FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1993
-----------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _____ to _____
Commission Registrant; State of Incorporation; I.R.S. Employer
File Number Address; and Telephone Number Identification No.
----------- ------------------------------------ ------------------
1-5324 NORTHEAST UTILITIES 04-2147929
(a Massachusetts voluntary association)
174 Brush Hill Avenue
West Springfield, Massachusetts 01090-0010
Telephone: (413) 785-5871
0-404 THE CONNECTICUT LIGHT AND POWER COMPANY 06-0303850
(a Connecticut corporation)
Selden Street
Berlin, Connecticut 06037-1616
Telephone: (203) 665-5000
1-6392 PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE 02-0181050
(a New Hampshire corporation)
1000 Elm Street
Manchester, New Hampshire 03105
Telephone: (603) 669-4000
0-7624 WESTERN MASSACHUSETTS ELECTRIC COMPANY 04-1961130
(a Massachusetts corporation)
174 Brush Hill Avenue
West Springfield, Massachusetts 01090-0010
Telephone: (413) 785-5871
33-43508 NORTH ATLANTIC ENERGY CORPORATION 06-1339460
(a New Hampshire corporation)
1000 Elm Street
Manchester, New Hampshire 03105
Telephone: (603) 669-4000
<PAGE>
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Registrant Title of Each Class On Which Registered
---------- -------------------- ---------------------
NORTHEAST UTILITIES Common Shares, $5.00 par value New York Stock
Exchange, Inc.
Securities registered pursuant to Section 12(g) of the Act:
Registrant Title of Class
---------- --------------
NORTHEAST UTILITIES Common Share Warrants, no par value, exercisable
at $ 24 per share
THE CONNECTICUT LIGHT Preferred Stock, par value $50.00 per share, issuable
AND POWER COMPANY in series, of which the following series are
outstanding:
$1.90 Series of 1947 4.96% Series of 1958
$2.00 Series of 1947 4.50% Series of 1963
$2.04 Series of 1949 5.28% Series of 1967
$2.20 Series of 1949 6.56% Series of 1968
3.90% Series of 1949 $3.24 Series G of 1968
$2.06 Series E of 1954 7.23% Series of 1992
$2.09 Series F of 1955 5.30% Series of 1993
4.50% Series of 1956
Class A Preferred Stock, par value $25.00 per share,
issuable in series, of which the following series are
outstanding:
9.00% Series of 1989
Dutch Auction Rate Transferable Securities,
1989 Series
PUBLIC SERVICE COMPANY Preferred Stock, par value $25.00 per share, issuable
OF NEW HAMPSHIRE in series, of which the following series are
outstanding:
10.60% Series A of 1991
WESTERN MASSACHUSETTS Preferred Stock, par value $100.00 per share,
ELECTRIC COMPANY issuable in series, of which the following series are
outstanding:
7.72% Series B of 1971
Class A Preferred Stock, par value $25.00 per share,
issuable in series, of which the following series are
outstanding:
7.60% Series of 1987
Dutch Auction Rate Transferable Securities,
1988 Series
<PAGE>
Indicate by check mark whether the registrants (1) have filed all reports
required to be filed by Section 13 or 15(d)of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrants were required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days.
Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the registrants' knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ X ]
The aggregate market value of NORTHEAST UTILITIES' Common Shares, $5.00 Par
Value, held by nonaffiliates, was $ 2,907,287,878, based on a closing sales
price of $ 23.375 per share for the 124,375,952 common shares outstanding on
February 28, 1994. NORTHEAST UTILITIES holds all of the 12,222,930 shares,
1,000 shares, 1,072,471 shares and 1,000 shares of the outstanding common
stock of THE CONNECTICUT LIGHT AND POWER COMPANY, PUBLIC SERVICE COMPANY OF
NEW HAMPSHIRE, WESTERN MASSACHUSETTS ELECTRIC COMPANY and NORTH ATLANTIC
ENERGY CORPORATION, respectively.
Documents Incorporated by Reference:
Part of Form 10-K
Into Which Document
Description is Incorporated
----------- --------------------
Portions of Annual Reports to Shareholders of the following
companies for the year ended December 31, 1993:
Northeast Utilities Part II
The Connecticut Light and Power Company Part II
Public Service Company of New Hampshire Part II
Western Massachusetts Electric Company Part II
North Atlantic Energy Corporation Part II
Portions of the Northeast Utilities Proxy
Statement dated April 1, 1994 Part III
<PAGE>
NORTHEAST UTILITIES
THE CONNECTICUT LIGHT AND POWER COMPANY
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
WESTERN MASSACHUSETTS ELECTRIC COMPANY
NORTH ATLANTIC ENERGY CORPORATION
1993 Form 10-K Annual Report
Table of Contents
PART I
Page
Item 1. Business. . . . . . . . . . . . . . . . . . . 1
The Northeast Utilities System . . . . . . . . . . 1
Competition and Marketing. . . . . . . . . . . . . 2
Economic Development. . . . . . . . . . . . . 2
Business Retention/Business Recovery. . . . . 3
Competitive Generation. . . . . . . . . . . . 4
Retail Wheeling . . . . . . . . . . . . . . . 4
Fuel Switching/Electrotechnologies. . . . . . 5
Wholesale Marketing . . . . . . . . . . . . . 6
Rates. . . . . . . . . . . . . . . . . . . . . . . 7
Connecticut Retail Rates. . . . . . . . . . . 7
New Hampshire Retail Rates. . . . . . . . . . 12
Massachusetts Retail Rates. . . . . . . . . . 16
Wholesale Rates . . . . . . . . . . . . . . . 19
Resource Plans . . . . . . . . . . . . . . . . . . 21
Construction. . . . . . . . . . . . . . . . . 21
Future Needs. . . . . . . . . . . . . . . . . 22
Financing Program. . . . . . . . . . . . . . . . . 24
1993 Financings . . . . . . . . . . . . . . . 24
Financing Nuclear Fuel. . . . . . . . . . . . 25
1994 Financing Requirements . . . . . . . . . 26
1994 Financing Plans. . . . . . . . . . . . . 27
Financing Limitations . . . . . . . . . . . . 27
Electric Operations. . . . . . . . . . . . . . . . 30
Distribution and Load . . . . . . . . . . . . 30
Generation and Transmission . . . . . . . . . 33
Hydro-Quebec. . . . . . . . . . . . . . . . . 34
Fossil Fuels. . . . . . . . . . . . . . . . . 35
Nuclear Generation. . . . . . . . . . . . . . 37
<PAGE>i
Non-Utility Businesses . . . . . . . . . . . . . . 53
General . . . . . . . . . . . . . . . . . . . 53
Private Power Development . . . . . . . . . . 53
Energy Management Services. . . . . . . . . . 54
Regulatory and Environmental Matters . . . . . . . 55
Public Utility Regulation . . . . . . . . . . 55
NRC Nuclear Plant Licensing . . . . . . . . . 56
Environmental Regulation. . . . . . . . . . . 57
Electric and Magnetic Fields. . . . . . . . . 68
FERC Hydro Project Licensing. . . . . . . . . 69
Employees. . . . . . . . . . . . . . . . . . . . . 70
Item 2. Properties. . . . . . . . . . . . . . . . . . 72
Electric Properties. . . . . . . . . . . . . . . . 73
Franchises . . . . . . . . . . . . . . . . . . . . 78
Item 3. Legal Proceedings . . . . . . . . . . . . . . 80
Item 4. Submission of Matters to a Vote of Security
Holders (Fourth Quarter 1993) . . . . . . . . 85
PART II
Item 5. Market for Registrants' Common Equity and
Related Shareholder Matters . . . . . . . . . 87
Item 6. Selected Financial Data . . . . . . . . . . . 87
Item 7. Discussion and Analysis of Financial
Condition and Results of Operations . . . . . 87
Item 8. Financial Statements and Supplementary Data . 88
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure . . . 89
<PAGE>ii
PART III
Item 10. Directors and Executive Officers of the
Registrants . . . . . . . . . . . . . . . . . 90
Item 11. Executive Compensation. . . . . . . . . . . . 94
Item 12. Security Ownership of Certain Beneficial
Owners and Management . . . . . . . . . . . . 98
Item 13. Certain Relationships and Related
Transactions. . . . . . . . . . . . . . . . . 100
PART IV
Item 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K . . . . . . . . . . . 101
<PAGE>iii
GLOSSARY OF TERMS
The following is a glossary of frequently used abbreviations
or acronyms that are found throughout this report:
COMPANIES
NU. . . . . . . . . . . . . . Northeast Utilities
CL&P . . . . . . . . . . . . The Connecticut Light and Power Company
Charter Oak . . . . . . . . . Charter Oak Energy, Inc.
WMECO . . . . . . . . . . . . Western Massachusetts Electric Company
HWP . . . . . . . . . . . . . Holyoke Water Power Company
NUSCO or the Service Company. Northeast Utilities Service Company
NNECO . . . . . . . . . . . . Northeast Nuclear Energy Company
NAEC. . . . . . . . . . . . . North Atlantic Energy Corporation
NAESCO or North Atlantic. . . North Atlantic Energy Service
Corporation
PSNH. . . . . . . . . . . . . Public Service Company of New Hampshire
RRR . . . . . . . . . . . . The Rocky River Realty Company
the System. . . . . . . . . . the Northeast Utilities System
CYAPC . . . . . . . . . . . . Connecticut Yankee Atomic Power Company
MYAPC . . . . . . . . . . . . Maine Yankee Atomic Power Company
VYNPC . . . . . . . . . . . . Vermont Yankee Nuclear Power
Corporation
YAEC. . . . . . . . . . . . . Yankee Atomic Electric Company
GENERATING UNITS
Millstone 1 . . . . . . . . . Millstone Unit No. 1, a 659.5-MW
nuclear electric generating unit
completed in 1970
Millstone 2 . . . . . . . . . Millstone Unit No. 2, an 862-MW
nuclear electric generating unit
completed in 1975
Millstone 3 . . . . . . . . . Millstone Unit No. 3, a 1,149-MW
nuclear electric generating unit
completed in 1986
Seabrook or Seabrook 1. . . . Seabrook Unit No. 1, a 1,150-MW
nuclear electric generating unit
completed in 1986. Seabrook 1 went
into service in 1990.
REGULATORS
DOE . . . . . . . . . . . . . U.S. Department of Energy
DPU . . . . . . . . . . . . . Massachusetts Department of Public
Utilities
DPUC. . . . . . . . . . . . . Connecticut Department of Public
Utility Control
<PAGE>iv
GLOSSARY OF TERMS
REGULATORS (Continued)
MDEP. . . . . . . . . . . . . Massachusetts Department of
Environmental Protection
CDEP. . . . . . . . . . . . . Connecticut Department of
Environmental Protection
EPA . . . . . . . . . . . . . U.S. Environmental Protection Agency
FASB. . . . . . . . . . . . . Financial Accounting Standards Board
FERC. . . . . . . . . . . . . Federal Energy Regulatory Commission
NHDES . . . . . . . . . . . . New Hampshire Department of
Environmental Services
NHPUC . . . . . . . . . . . . New Hampshire Public Utilities
Commission
NRC . . . . . . . . . . . . . Nuclear Regulatory Commission
SEC . . . . . . . . . . . . . Securities and Exchange Commission
OTHER
1935 Act. . . . . . . . . . . Public Utility Holding Company Act of
1935
AFUDC . . . . . . . . . . . . Allowance for funds used during
construction
CC. . . . . . . . . . . . . . Conservation charge
C&LM. . . . . . . . . . . . . Conservation and load management
CWIP. . . . . . . . . . . . . Construction work in progress
Energy Policy Act . . . . . . Energy Policy Act of 1992
FAC . . . . . . . . . . . . . Fossil-fuel adjustment clause
FPPAC . . . . . . . . . . . . Fuel and purchased power adjustment
clause (PSNH)
GUAC. . . . . . . . . . . . . Generation utilization adjustment
clause (CL&P)
IRM . . . . . . . . . . . . . Integrated resource management
MW. . . . . . . . . . . . . . Megawatt
NBFT. . . . . . . . . . . . . Niantic Bay Fuel Trust, lessor of
nuclear fuel used by CL&P and WMECO
NEPOOL. . . . . . . . . . . . New England Power Pool
NUG&T . . . . . . . . . . . . Northeast Utilities Generation and
Transmission Agreement
IPPs. . . . . . . . . . . . . Independent power producers
QFs . . . . . . . . . . . . . Qualifying cogeneration and small
power production facilities
ROE . . . . . . . . . . . . . Return on equity
<PAGE>v
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<PAGE>vii
NORTHEAST UTILITIES
THE CONNECTICUT LIGHT AND POWER COMPANY
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
WESTERN MASSACHUSETTS ELECTRIC COMPANY
NORTH ATLANTIC ENERGY CORPORATION
PART I
ITEM 1. BUSINESS
THE NORTHEAST UTILITIES SYSTEM
Northeast Utilities (NU) is the parent company of the Northeast
Utilities system (the System). It is not itself an operating company.
Through four of NU's wholly-owned subsidiaries (The Connecticut Light and
Power Company [CL&P], Public Service Company of New Hampshire [PSNH], Western
Massachusetts Electric Company [WMECO] and Holyoke Water Power Company
[HWP]), the System furnishes electric service in Connecticut, New Hampshire
and western Massachusetts. In addition to their retail electric service,
CL&P, PSNH, WMECO and HWP (including its wholly-owned subsidiary Holyoke
Power and Electric Company) together furnish firm wholesale electric service
to eight municipalities and utilities. The System companies also supply
other wholesale electric services to various municipalities and other
utilities. NU serves about 30 percent of New England's electric needs and is
one of the 20 largest electric utility systems in the country.
NU acquired PSNH, the largest electric utility in New Hampshire, in
June 1992. PSNH was in bankruptcy reorganization proceedings from January
1988 to May 1991, when it emerged from bankruptcy in the first step of an NU-
sponsored two-step plan of reorganization. NU's acquisition of PSNH was the
second step of the reorganization plan. On October 1, 1993, the Bankruptcy
Court in New Hampshire formally terminated the bankruptcy proceeding. See
Item 3, Legal Proceedings. PSNH continues to operate its core electric
utility business, but pursuant to the reorganization plan, PSNH transferred
its 35.6 percent interest in the Seabrook nuclear generating facility
(Seabrook) in Seabrook, New Hampshire to North Atlantic Energy Corporation
(NAEC), a special purpose subsidiary of NU which sells the capacity and
output of that unit to PSNH under two life-of-unit, full cost recovery
contracts. In June 1992, NU's subsidiary North Atlantic Energy Service
Corporation (North Atlantic) assumed operational responsibility for Seabrook.
Before that, Seabrook had been operated by a division of PSNH.
Other wholly-owned subsidiaries of NU provide support services for
the System companies and, in some cases, for other New England utilities.
Northeast Utilities Service Company (NUSCO or the Service Company) provides
centralized accounting, administrative, data processing, engineering,
financial, legal, operational, planning, purchasing and other services to the
System companies. Northeast Nuclear Energy Company (NNECO) acts as agent for
the System companies and other New England utilities in operating nuclear
generating facilities in Connecticut. North Atlantic acts as agent for the
System companies and other New England utilities in operating Seabrook. Two
other subsidiaries construct, acquire or lease some of the property and
facilities used by the System companies.
NU has two other principal subsidiaries, Charter Oak Energy, Inc.
(Charter Oak) and HEC Inc. (HEC), which have non-utility businesses.
Directly and through subsidiaries, Charter Oak develops and invests in
cogeneration, small power production and independent power production
facilities. HEC provides energy management services for commercial,
industrial and institutional electric customers. See "Non-Utility
<PAGE>1
Businesses."
COMPETITION AND MARKETING
Competition within the electric utility industry is increasing. In
response, NU has developed, and is continuing to develop, a number of
initiatives to retain and continue to serve its existing customers and to
expand its retail and wholesale customer base. These initiatives are aimed
at keeping customers from either leaving NU's retail service territory or
replacing NU's electric service with alternative energy sources and at
attracting new customers. Management believes that CL&P, PSNH and WMECO must
continue to be responsive to their business customers, in particular, in
dealing with the price of electricity and to recognize that many business
customers have alternatives such as fuel switching, relocation and self-
generation if the price of electricity is not competitive.
A System-wide emphasis on improved customer service is a central
focus of the reorganization of NU that became effective on January 1, 1994.
The reorganization entails realignment of the System into two new core
business groups. The first core business group, the energy resources group,
is devoted to energy resource acquisition and wholesale marketing and focuses
on nuclear, fossil and hydroelectric generation, wholesale power marketing
and new business development. The second core business group, the retail
business group, oversees all customer service, transmission and distribution
operations and retail marketing in Connecticut, New Hampshire and
Massachusetts. These two core business groups are served by various support
functions known collectively as the corporate center. In connection with
NU's reorganization, the System has begun a corporate reengineering process
which should help it to identify opportunities to become more competitive
while improving customer service and maintaining a high level of operational
performance.
ECONOMIC DEVELOPMENT
The cost of doing business, including the price of electricity, is
higher in the System's service area, and the Northeast generally, than in
most other parts of the country. Relatively high state and local taxes,
labor costs and other costs of doing business in New England also contribute
to competitive disadvantages for many industrial and commercial customers of
CL&P, PSNH and WMECO. These disadvantages have aggravated the pressures on
business customers in the current weakened regional economy. As a result,
state and local governments in the region frequently offer incentives to
attract new business development to, and to expand existing businesses
within, their states. Since 1991, CL&P and WMECO have worked actively with
state and local economic development authorities to package incentives for a
variety of prospective or expanding customers. These economic development
packages typically include both electric rate discounts and incentive
payments for energy efficient construction, as well as technical support and
energy conservation services.
In general, electric rate discounts are phased out over varying
periods generally not in excess of ten years. From September 1991 through
March 1, 1994, economic development rate agreements had been reached with
approximately 45 industrial and commercial customers in the three states
served by the System, including 38 customers in CL&P's service territory, one
customer in PSNH's service territory and six customers in WMECO's service
territory.
<PAGE>2
As an adjunct to their economic development efforts, CL&P and WMECO
have also developed programs which provide incentives to customers planning
to construct or significantly renovate commercial or industrial buildings
within the System's service territory. Approximately 40 percent of all such
construction qualifies for incentive payments for the installation or
retrofitting of energy-efficient equipment designed to result in permanent
savings for the customer in addition to any savings that result from the rate
discounts.
The business expansion-related rate agreements cover small-to-
medium-sized industrial companies and a few medium-sized commercial business
relocations. In all cases where economic development rates are in effect,
the additional load and associated revenues, even though received under
discounted rates, result in a net benefit to the System by making a
contribution towards the System's fixed costs. During 1993, 28 customers
were on economic development rate riders, including 24 CL&P customers and
four WMECO customers. The net benefit to the System during 1993 as a result
of these agreements was approximately $300,000.
BUSINESS RETENTION/BUSINESS RECOVERY
From 1983 through 1989, the System's retail kilowatt-hour sales grew
by an annual average rate of 3.8 percent. Since the end of 1989, retail
sales have been level, except for the addition of PSNH's electric load as a
result of NU's acquisition of PSNH, effective in June 1992. The leveling
effect has resulted in part from the System's conservation and load
management (C&LM) efforts, but is largely due to the region's persistent weak
economy. Management expects a modest improvement in the economy in 1994 and
moderate electric sales growth is anticipated.
To spur economic activity, NU's subsidiaries have worked in concert
with state and local authorities to retain businesses that are considering
relocating outside of the NU service territory. C&LM incentives are used
with temporary rate reductions to produce both short-term and long-term cost
savings for customers. These reductions are generally limited to five years
but may be for as long as ten years. As of the end of 1993, 25 System
customers received such reductions, including 19 CL&P customers, two PSNH
customers and five WMECO customers. These customers in the aggregate
represented less than 0.5 percent of System revenues.
The NU operating subsidiaries also offer rate reductions to business
entities that can demonstrate that they are encountering financial problems
threatening their viability but have reasonable prospects for improvement.
These "business recovery" reductions can be brief in duration, sometimes
lasting only a few months, or may extend for up to five years. From the time
these rates became available in late 1991 through the end of 1993, 23 CL&P
customers, two PSNH customers and eight WMECO customers have been granted
such rate reductions. The CL&P customers provided approximately $10 million
in annual revenues; the PSNH customers provided approximately $10 million in
annual revenues and the WMECO customers provided approximately $1.5 million
in annual revenues.
The bulk of the cost of the presently estimated discounts has been
anticipated in base rates. The cost of the C&LM program is also collected
from ratepayers.
<PAGE>3
COMPETITIVE GENERATION
A growing source of competition in the electric utility industry
comes from companies that are marketing co-generation systems, primarily to
those customers who can use both the electricity and the steam created by
such systems. See "Regulatory and Environmental Matters - Public Utility
Regulation." For instance, the Pratt & Whitney Aircraft Division of United
Technologies Corporation, the System's largest industrial customer, put into
service a 25-megawatt generating system in January 1993, reducing CL&P's
industrial sales by approximately 1.5 percent, or $8 million, during 1993.
While only a few other such systems have been installed in the System's
service territory to date, the extent of growth of further self-generation
cannot be predicted.
To help convince retail customers not to generate their own power,
CL&P, PSNH and WMECO have offered a competitive generation rate or special
rate contracts that typically provide for up to ten years of rate reductions
in return for a commitment not to self-generate. Two of CL&P's largest
customers, together accounting for approximately $12 million of annual
revenues in 1993, are operating under these arrangements. The New Hampshire
Public Utilities Commission (NHPUC) also approved a special PSNH rate
available for operators of sawmills to help prevent those customers from
installing diesel generation. Altogether, approximately 28 System customers
were on some type of competitive generation rate or special contract at the
end of 1993, consisting of two CL&P customers, 20 PSNH customers and six
WMECO customers. The PSNH customers provided approximately $3 million in
annual revenues and the WMECO customers provided approximately $1.5 million
in annual revenues.
Overall, all types of flexible rate riders and special contracts
offered by the System have preserved System revenues of approximately $50
million. As each subsidiary intensifies its efforts to retain existing
customers and gain new customers, the number of customers covered under such
flexible rates, and the number and amount of overall discounts, are expected
to rise moderately over the next few years.
RETAIL WHEELING
In principle, retail wheeling would enable a retail customer to
select an electricity supplier and force the local electric utility to
transmit the power to the customer's site. While wholesale wheeling was
mandated by the Energy Policy Act of 1992 (Energy Policy Act) under certain
circumstances, retail wheeling is generally not required in any of the
System's jurisdictions. See "Regulatory and Environmental Matters - Public
Utility Regulation." In Connecticut, the Department of Public Utility
Control (DPUC) has begun an investigation into the desirability of retail
wheeling; a similar DPUC study undertaken in 1987 concluded that full-scale
ail wheeling was not in the public interest at that time. See
"Rates-Connecticut Retail Rates."
In New Hampshire, there have been no legislative proposals on full-
scale retail wheeling to date.
In Massachusetts, bills being reviewed by legislative committees
could permit limited retail wheeling in economically distressed areas and to
municipal and state-owned facilities.
<PAGE>4
FUEL SWITCHING/ELECTROTECHNOLOGIES
A customer's ability to switch to or from electricity as an energy
source for heating, cooling or industrial processes (fuel switching) will
continue to provide the System with both opportunities and risks over the
coming years.
While it is an important load, residential electric space heating
makes up only five percent of the System's retail sales. In Connecticut and
Massachusetts, the risk of fuel switching among residential customers is
concentrated in the area of electric to natural gas conversions with lesser
risks of oil and propane conversions, while in New Hampshire, conversions to
oil and propane are more common. During 1993, approximately three percent
of WMECO and PSNH space heating customers converted their heating systems
from electric resistance or baseboard heating. Conversion activity in CL&P's
service territory was minimal during 1993 and the net number of electric
space heating customers in CL&P's territory increased during 1993. Since
1992, space heating conversions on the System have not represented more
than a 0.1 percent loss of annual retail sales. Nonetheless, the System
operating companies have implemented a number of programs to mitigate these
losses. In New Hampshire, a new thermal energy storage program is being
reviewed for approval by the NHPUC. In Connecticut and Massachusetts,
programs are in place to encourage the use of ground source and advanced
air-to-air heat pumps in both new and existing construction. In addition, in
1993 WMECO lowered rates for its electric space heating cusomters by
approximately five percent with permission from the Massachusetts Department
of Public Utilities (DPU) to address the competitive threat. Because of
these programs and other initiatives, NU forecasts a continued increase in
the net number of electric space heating customers.
With respect to residential sales, central air conditioning
continues to become more common in the System's service territory. The
System has also begun to test the use of electric vehicles in all three of
its service territories and is working to promote the manufacture of electric
vehicles and their components in the System's service area. The System's
energy conservation programs which target electric heat and hot water
customers can be effective in lowering electric bills substantially. In
1993, the System embarked upon two aggressive field testing programs
involving heat pumps to provide residential heating, cooling and hot water
heating in cost effective ways. These programs, in Massachusetts and at
Heritage Village in Southbury, Connecticut, are intended to demonstrate that
the combination of cost effective conservation and the use of heat pumps will
provide lower cost heating, cooling and water heating than other available
fuels.
The System also faces commercial load loss because of fuel
switching, such as in the area of electrically heated commercial buildings.
Additionally, natural gas distribution companies have been actively marketing
gas-fired chillers to commercial and industrial customers. Electric space
and hot water heating and air conditioning have come under increasing
pressure in recent years from aggressive campaigns by natural gas
distribution companies seeking to add new customers. In Connecticut and
Massachusetts, NU's subsidiaries have initiated market driven heating,
ventilating and air-conditioning (HVAC) incentive programs, which include
some design assistance, to promote efficient, nonchlorofluorocarbon
refrigerant electric chillers.
In response to the threat of load loss due to alternative fuel
sources, the System's marketing and customer service staff works proactively
to compare relative costs of alternative fuels. In most instances, accurate
<PAGE>5
cost comparisons and energy conservation programs allow the System to
preserve most of each customer's load by assisting the customer to achieve a
more efficient use of its electric energy.
WHOLESALE MARKETING
In general and subject to existing contractual restrictions, the
System's wholesale customers, both within and outside the System's retail
service area, are free to select any supplier they choose. NU's subsidiaries
do not have an exclusive franchise right to serve such customers. Thus, the
wholesale segment of the System's business is highly competitive.
As a result of very limited load growth throughout the Northeast in
the past five years and the operation of several new generating plants,
competition has grown, and a seller's market for electricity has turned into
a buyer's market. Of the approximately 2,000 - 3,000 megawatts of surplus
capacity in New England, the System's total is approximately 1,000 megawatts.
The prices the System has been able to receive for new wholesale contracts
have generally been far lower than the prices prevalent in recent years.
Nevertheless, in 1993, the System sold a monthly average of 350
megawatts on a daily and short-term basis and 1,150 megawatts under
preexisting long-term commitments of capacity to over 20 utilities throughout
the Northeast. These sales resulted in approximately $150 million of
capacity revenues. The majority of these revenues have been recognized in
System company base rates.
In addition, System companies entered into approximately 11 long-
term sales contracts in 1993 with both new and existing customers. These
contracts are expected to increase sales by a yearly average of 60 megawatts
from late 1993 through 2005. The new wholesale customers include the
municipal electric systems in Georgetown, Middletown, South Hadley,
Princeton, Danvers, Littleton and Mansfield, all in Massachusetts. Including
these new sales, the System currently has capacity sales commitments with
other New England utilities to sell an aggregate 4,000 megawatt-years of
capacity from 1994 through 2008. The net benefits after costs from these
sales are estimated at approximately $550 million over the remaining life of
the contracts. Most of these benefits will be realized over the next few
years. In addition, a contract for the sale of approximately 450 megawatt-
years to the municipal electric system in Madison, Maine has been signed and
is awaiting certain approvals. For information on competitive pressures
affecting wholesale transmission, see "Electric Operations - Generation and
Transmission."
Over the next five years, intense competition in the Northeast
market is expected to continue as new generating facilities, located for the
most part outside the System's retail service areas and contracted to sell to
others, become operational. See "Regulatory and Environmental Matters -
Public Utility Regulation." This increase in power supply sources could put
further downward pressure on prices, but the potential price decreases may be
somewhat offset by an improvement in the region's economy and the retirement
of a number of the region's existing generating plants. See "Electric
Operations - Generation and Transmission."
<PAGE>6
SUMMARY
To date, the System has not been materially affected by competition,
and it does not foresee substantial adverse effect in the near future unless
the current regulatory structure or practice is substantially altered. The
rate, service, business development and conservation initiatives described
above, portions of which are funded in base rates, plus other cost
containment efforts described below, have been adequate to date in retaining
customers, preventing fuel switching and attracting new customers at a level
sufficient to maintain the System's revenue and profit base and should have
significant positive effects in the next few years. As noted above, however,
the DPUC has begun a retail wheeling investigation in Connecticut, and its
outcome is uncertain at this time. In Massachusetts, retail wheeling
legislation is under consideration. To date, no such initiatives are
underway in New Hampshire. NU's subsidiaries benefit from a diverse retail
base, and the System has no significant dependance on any one customer or
industry. The System's extensive transmission facilities and diversified
generating capacity position it to be a strong factor in the regional
wholesale power market for the foreseeable future. The System's wholesale
power business should further cushion the financial effects of competitive
inroads within its service area. The System believes that the corporate
reengineering process initiated in early 1994 and structural reorganization
effective January 1, 1994 should better position it to compete in the retail
and wholesale electric businesses in the future.
RATES
CONNECTICUT RETAIL RATES
GENERAL
CL&P's retail electric rate schedules are subject to the jurisdiction of
the DPUC. Connecticut law provides that increased rates may not be put into
effect without the prior approval of the DPUC, which has 150 days to act upon
a proposed rate increase, with one 30-day extension possible. If the DPUC
does not act within that period, the proposed rates may be put into effect
subject to refund.
Connecticut law authorizes the DPUC to order a rate reduction before
holding a full-scale rate proceeding if it finds that (i) a utility's
earnings exceed authorized levels by one percentage point or more for six
consecutive months, (ii) tax law changes significantly increase the utility's
profits, or (iii) the utility may be collecting rates that are more than just
and reasonable. The law requires the DPUC to give notice to the utility and
any customers affected by the interim decrease. The utility would be
afforded a hearing. If final rates set after a full rate proceeding or court
appeal are higher, customers would be surcharged to make up the difference.
1992-1993 CL&P RETAIL RATE CASE
In December 1992, CL&P filed an application for rate relief with the
DPUC. The updated request sought to increase CL&P's revenues by $344 million
or 15.4 percent in total over three years. That increase incorporated
requested annual increases of $130 million, $104 million and $110 million
starting in May 1993. As an alternative to the multi-year plan, CL&P also
proposed a one-time increase totaling about $280 million, or 13.9 percent.
<PAGE>7
On June 16, 1993, the DPUC issued a decision (Decision) approving
the multi-year plan and providing for annual rate increases of $46.0 million,
or 2.01 percent, in July 1993, $47.1 million, or 2.04 percent, in July 1994
and $48.2 million, or 2.06 percent, in July 1995. The total increase granted
of $141.3 million, or 6.11 percent, is approximately 42 percent of CL&P's
updated request.
In light of the State of Connecticut's concern over economic
development and industrial and commercial rates, one important aspect of the
Decision was that industrial and manufacturing rates will rise only about 1.1
percent anually over the three-year period.
Other significant aspects of the Decision include the reduction of
CL&P's return on equity (ROE) from 12.9 percent (CL&P had sought to continue
its ROE at that level) to 11.5 percent for the first year of the multi-year
plan, 11.6 percent for the second year and 11.7 percent for the third year;
recognition in CL&P's rates, by 1998, of non-pension, post-retirement benefit
cost accruals required under Statement of Financial Accounting Standards
(SFAS) No. 106; the identification of $49 million of prior fuel
overrecoveries and the use of that amount to offset a similar amount of the
unrecovered balance in CL&P's generation utilization adjustment clause
(GUAC); the reduction of CL&P's projected operating and maintenance expense
for contingency funding by approximately $53.6 million spread over three
years; and the deferral of cogeneration expenses projected for 1994 and 1995
and the future recovery of those deferred amounts (approximately $63 million
in total) plus carrying costs over five years beginning July 1, 1996.
The Decision also required CL&P to allocate to customers $10 million
of after tax earnings from a $47.7 million property tax accounting change
made in the first quarter of 1993. CL&P recorded this $10 million adjustment
as a reduction to second quarter net income.
On August 2, 1993, two appeals were filed from the Decision. CL&P
filed an appeal on four issues. The second appeal was filed by the
Connecticut Office of Consumer Counsel (OCC) and the City of Hartford,
challenging the legality of the multi-year plan approved by the DPUC. The
two appeals were consolidated. CL&P moved to dismiss the appeal by the City
of Hartford and the OCC on jurisdictional grounds. Oral arguments were held
on October 15, 1993 and February 14, 1994 on CL&P's motion to dismiss the
appeals challenging the multi-year rate plan. It is not known when a
decision on CL&P's motion will be issued. In addition, the Court rejected
(without prejudice to renewal) the City of Hartford's and the OCC's motion to
stay implementation of the second and third year of the rate plan pending the
outcome of their appeal. The City of Hartford and the OCC could renew a
request for a stay following the outcome of their appeal.
CL&P ADJUSTMENT CLAUSES
CL&P has a fossil fuel adjustment clause and a GUAC applicable to its
retail electric rates. In Connecticut, the DPUC is required to approve each
month the charges or credits proposed for the following month under the
fossil fuel adjustment clause. These charges and credits are designed to
recover or refund changes in purchased power (energy) and fossil fuel prices
from those set in base rates. Monthly fossil fuel charges or credits are
also subject to review and appropriate adjustment by the DPUC each quarter
after full public hearings. The Connecticut clause allows CL&P to recover
substantially all prudently incurred fossil fuel expenses.
CL&P's current retail electric base rate schedules assume that the
nuclear units in which CL&P has entitlements will operate at a 72 percent
<PAGE>8
composite capacity factor. The GUAC levels the effect on rates of fuel costs
incurred or avoided due to variations in nuclear generation above and below
that performance level. When actual nuclear performance is above the
specified level, net fuel costs are lower than the costs reflected in base
rates, and when nuclear performance is below the specified level, net fuel
costs are higher than the costs reflected in base rates. At the end of a
twelve-month period ending July 31 of each year, with DPUC approval, these
net variations from the costs reflected in base rates are generally refunded
to or collected from customers over the subsequent eleven-month period
beginning September 1. This clause, however, does not permit automatic
collection from customers to the extent the capacity factor is less than 55
percent for the twelve-month period. When and to the extent the annual
nuclear capacity factor is less than 55 percent, it is necessary for CL&P to
apply to the DPUC for permission to recover the additional fuel expense.
In the Decision, the DPUC disallowed recovery of $41.5 million, the
GUAC deferral balance associated with operation at a nuclear capacity factor
below 55 percent during the 12-month GUAC period ending July 31, 1992. In
the same Decision, the DPUC also disallowed $7.5 million of the $96 million
deferral balance, representing operation at a nuclear capacity factor above
55 percent for that period, which had already been approved for collection
from customers through December 31, 1993. The reason given for the
disallowances was CL&P's $49 million overrecovery of fuel costs through base
rates and the fuel adjustment clauses for the period August 1991 to July
1992.
The Decision also cut short the previously allowed recovery of
$96 million in GUAC deferrals by four months. The DPUC ordered the remaining
unrecovered GUAC balance of $24.6 million to be "trued-up" against the
deferral for the 1992-93 GUAC year. As result of two previous prudence
decisions imposing disallowances for outages at the nuclear unit (CY)
operated by the Connecticut Yankee Atomic Power Company (CYAPC) and
Millstone I, the DPUC also ordered CL&P to refund to customers a total of
$5.1 million in the GUAC billing period beginning September 1, 1993.
In the most recent GUAC period, which ended July 31, 1993, the
actual level of nuclear generating performance was 72.6 percent, resulting in
a GUAC deferral of $4.0 million to be credited to customers beginning in
September 1993. The GUAC rate filed by CL&P for the September 1993 - August
1994 GUAC billing period had five components: the $7.5 million disallowance
from the rate case, the $5.1 million of prudence disallowances, the $4.0
million credit deferral for the most recent GUAC period, and the $24.6
million debit of previously unrecovered GUAC deferrals, for a total of $7.9
million.
On September 1, 1993, the DPUC issued an interim order setting a
GUAC rate of zero beginning September 1, 1993, subject to a proceeding to
consider further CL&P's GUAC rate for the period September 1, 1993 to July
31, 1994. On January 5, 1994, the DPUC issued a decision fixing the GUAC
rate at zero through August 31, 1994 and disallowing recovery of $7.9 million
through the GUAC. The disallowance was based on a comparison of fuel
revenues with fuel expenses, in the August 1992 - July 1993 period. On
January 24, 1994, CL&P requested the DPUC to clarify its January 5, 1994
decision with respect to future application of the GUAC. Based on
management's interpretation of the January 5, 1994 decision, CL&P does not
expect that any future DPUC review using this methodology will have a
material adverse impact on its future earnings. On March 4, 1994, CL&P
appealed the January 5 GUAC decision to Connecticut Superior Court.
<PAGE>9
For the 1984-1991 GUAC periods, CL&P refunded more than $112 million
to its customers through the GUAC mechanism. For the five months ended
December 31, 1993, the composite nuclear generation capacity factor was 66.7
percent. For the full twelve-month period ending July 31, 1994, the factor
is projected to be approximately 74.7 percent.
The DPUC has opened a docket to review the prudence of the 1992 outage
related to the Millstone 2 steam generator replacement project. Discovery and
filing of testimony is expected to continue through May 1994 and hearings, if
required, will be held in the summer of 1994.
CL&P incurred approximately $88 million in replacement power costs
associated with Millstone outages that occurred during the period October
1990 - February 1992. These outages were the subject of several separate
prudence reviews conducted by the DPUC, three of which are either on appeal
or still pending at the DPUC.
On May 19, 1993, the DPUC issued a final decision allowing recovery
of costs related to the July 1991 shutdown of Millstone 3 caused by mussel-
fouling of the heat exchangers. Approximately $0.9 million of replacement
power costs are at issue. The OCC has appealed that decision to the
Connecticut Superior Court.
On September 1, 1993, the DPUC issued a final decision in the
prudence investigation of outages at all four Connecticut nuclear plants
resulting from an erosion/corrosion-induced pipe rupture at Millstone 2 on
November 6, 1991. The decision concluded that CL&P's management of its
erosion/corrosion program was reasonable and prudent and that expenses
incurred as a result of the outages, which total approximately $65 million
($51 million of which represents replacement power costs) for CL&P, should be
allowed. The OCC has also appealed this decision to the Connecticut Superior
Court.
The third ongoing prudence investigation involves a Millstone 3
outage caused by repairs to the service water piping in the fall of 1991.
The OCC's witness filed testimony that, as a result of the DPUC's decision
finding that the concurrent mussel-fouling outage was prudent, and the fact
that the mussel-fouling outage continued at least as long as the service
water outage, there was no economic impact on ratepayers from the service
water outage. On September 23, 1993, the DPUC suspended the service water
docket pending the outcome of OCC's appeal of the decision on the mussel-
fouling outage. Approximately $26 million of replacement power costs are at
issue. For further information on the shutdowns of Millstone units currently
under review by the DPUC, see "Electric Operations -- Nuclear Generation --
Millstone Units."
Some portion of the replacement power costs reflected in the three
Millstone outages, as to which the DPUC has not completed its review or as to
which the DPUC's decision has been appealed, may be disallowed. However,
management believes that its actions with respect to these outages have been
prudent, and it does not expect the outcome of the prudence reviews to result
in material disallowances.
CL&P has recognized that it will not recover in rates approximately
$9.4 million in replacement power costs resulting from two other shutdowns at
Millstone 1: one related to the unit's licensed operators failing
requalification exams and the other related to seaweed blockage at the intake
structure.
<PAGE>10
CL&P owns 34.5 percent of the common stock of CYAPC, a regional nuclear
generating company. During the 1987-1988 refueling outage, repairs were made
to CY's thermal shield. During an extended 1989-1990 refueling outage, the
thermal shield was removed due to continued degradation.
The DPUC reviewed these outages. In a report issued in 1990, the
DPUC's auditors concluded that the actions of CYAPC's personnel and its
contractors were reasonable with respect to the thermal shield's repair and
removal. However, the auditors also concluded that the failure to clean the
entire refueling cavity during the 1987-1988 outage was the most likely cause
of debris left in the cavity that subsequently resulted in the additional
damage that was repaired during the 1989-1990 outage.
In October 1992, the DPUC disallowed CL&P's recovery of $3 million
in replacement power costs and $230,000 of related operating and maintenance
costs resulting from CY's 1989-1990 extended outage. CL&P appealed the
DPUC's decision. On December 2, 1993, the Connecticut Superior Court issued
a decision reversing the DPUC, in part, and upholding it in part. The court
ruled in favor of CL&P by reversing the $230,000 disallowance and in favor of
the DPUC by upholding the $3 million disallowance of replacement power costs.
The partial reversal in favor of CL&P was based on the principle of
federal preemption and is an important legal precedent for future CYAPC
matters.
CONSERVATION AND LOAD MANAGEMENT
CL&P participates in a collaborative process for the development and
implementation of C&LM programs for its residential, commercial and
industrial customers.
In September 1992, the DPUC approved a Conservation Adjustment
Mechanism (CAM) that allows CL&P to recover C&LM costs to the extent not
recovered through current base rates. The CAM authorized continued recovery
of C&LM costs over a ten-year period with a return on the unrecovered costs.
In December 1992, CL&P filed an application with the DPUC for approval of
budgeted C&LM expenditures for 1993 of $47.5 million and a proposed CAM for
1993. On April 14, 1993, the DPUC issued an order approving a new CAM rate,
which allows CL&P to recover $24 million of its budgeted $47 million C&LM
expenditures during 1993 and associated true-ups of past C&LM expenditures.
The order also provided that any unrecovered expenditures would be recovered
over eight years. CL&P's actual 1993 C&LM expenditures were approximately
$42.8 million. The unrecovered C&LM costs at December 31, 1993 excluding
carrying costs were $116.2 million.
On December 30, 1993, CL&P and the other participants in the
collaborative process filed an offer of settlement with the DPUC regarding
CL&P's 1994 C&LM expenditures, program designs, performance incentive and
lost fixed cost revenue recovery. The settlement proposed a budget level of
$39 million for 1994 C&LM and a reduction in the amortization period for new
expenditures from eight to 3.85 years. CL&P expects additional 1994 C&LM
expenditures of approximately $1 million for state facilities. The DPUC
began hearings on the proposed settlement during March 1994.
<PAGE>11
NEW HAMPSHIRE RETAIL RATES
RATE AGREEMENT AND FPPAC
NU acquired PSNH, the largest electric utility in New Hampshire, in
June 1992. See "The Northeast Utilities System." PSNH's 1989 Rate Agreement
(Rate Agreement) provides the financial basis for the plan under which PSNH
was reorganized and became an NU subsidiary. The Rate Agreement sets out a
comprehensive plan of retail rates for PSNH, providing for seven base rate
increases of 5.5 percent per year and a comprehensive fuel and purchased
power adjustment clause (FPPAC). The first of these base retail rate
increases was put into effect in January 1990. The second rate increase took
place on May 16, 1991, when PSNH reorganized as an interim, stand-alone
company; the third rate increase occurred on June 1, 1992, just before NU's
acquisition of PSNH; and the fourth rate increase went into effect on June 1,
1993. The remaining three increases are to be placed in effect by the NHPUC
annually beginning June 1, 1994, concurrently with a semi-annual adjustment
in the FPPAC.
The Rate Agreement also provides for the recovery by PSNH through
rates of a regulatory asset, which is the aggregate value placed by PSNH's
reorganization plan on PSNH's assets in excess of the net book value of
PSNH's non-Seabrook assets and the value assigned to Seabrook. In accordance
with the Rate Agreement, approximately $265 million of the remaining
regulatory asset is scheduled to be amortized and recovered through rates by
1998, and the remaining amount, approximately $504 million, is scheduled to
be amortized and recovered through rates by 2011. PSNH is entitled to a
return each year on the unamortized portion of the asset. The unrecovered
balance of the regulatory asset at December 31, 1993 was approximately
$769.5 million. In order to provide protection from significant variations
from the costs assumed in the base rates over the period of the seven base
rate increases (Fixed Rate Period), the Rate Agreement established a return
on equity (ROE) collar to prevent PSNH from earning an ROE in excess of an
upper limit or below a lower limit. To date, PSNH's ROE has been within the
limits of the ROE collar.
The FPPAC provides for the recovery or refund by PSNH, for the ten-
year period beginning on May 16, 1991, of the difference between the actual
prudent energy and purchased power costs and the costs included in base
rates. The rate is calculated for a six-month period based on forecasted
data and is reconciled to actual data in subsequent FPPAC billing periods.
PSNH costs included in the FPPAC calculation are the cost of fuel used at its
generating plants and purchased power, energy savings and support payments
associated with PSNH's participation in the Hydro-Quebec arrangements, the
Seabrook Power Contract costs billed to PSNH from NAEC, NEPOOL Interchange
expense and savings, fifty percent of the joint dispatch energy expense
savings resulting from the combination of PSNH and the System companies as a
single pool participant, purchased capacity costs associated with other
System power and unit contract capacity purchases excluding the Yankee
nuclear companies and the cost to amortize capital expenditures for, and to
operate, environmental or safety backfits or fuel switching. The FPPAC also
provides for the recovery of a portion of the payments made currently to
qualifying facilities and a portion of the costs associated with the PSNH
buyback of the New Hampshire Electric Cooperative, Inc. (NHEC) entitlement in
Seabrook. For information on NHEC's 1991 filing for bankruptcy and its
subsequent reorganization, see "Rates - Wholesale Rates." The balance of the
current payments to qualifying facilities, representing a part of the
payments made currently to eight specific small power producers (SPPs), are
deferred each year and amortized and recovered over the succeeding ten years.
<PAGE>12
A portion of the current payments to NHEC is also deferred and will be
recovered either through the FPPAC during the fixed rate period or through
base rates after the fixed rate period. Recovery of the NHEC deferral
through the FPPAC occurs only if the FPPAC rate is negative; in such
instance, deferred NHEC costs would be recovered to the extent required to
bring the FPPAC rate to zero. From June to November 1992, the FPPAC rate,
which would otherwise have been negative, was set at zero, and some NHEC
deferrals were amortized. The operation of the FPPAC during this period
resulted in an overrecovery, which was also netted against NHEC deferrals in
December 1992 and March 1993. As of December 31, 1993, SPP and NHEC
deferrals totaled approximately $107.6 and $14.8 million, respectively.
Under the Rate Agreement, PSNH has an obligation to use its best
efforts to renegotiate the purchase power arrangements with 13 specified SPPs
that were selling their output to PSNH under long term rate orders.
Agreements have been reached with all five of the hydroelectric facilities
under which the rates PSNH pays for their output would be reduced but the
term of years for sales from the hydro producers would be extended by five
years. The NHPUC held a hearing concerning these agreements on February 25,
1994. PSNH has also reached agreements with three of the eight wood-fired
qualifying facilities with long term rate orders. Under each agreement, PSNH
would pay each operator a lump sum in exchange for canceling the operator's
right to sell its output to PSNH under rate orders. The total payment to the
three operators would be approximately $91.8 million (covering approximately
35 MW of capacity). The three wood operators' agreements will be considered
in hearings before the NHPUC in late spring 1994. PSNH is unable to predict
if any or all of these agreements will be consummated.
Although the Rate Agreement provides an unusually high degree of
certainty about PSNH's future retail rates, it also entails a risk if sales
are lower than anticipated, as they were in 1991 and 1992, or if PSNH should
experience unexpected increases in its costs other than those for fuel and
purchased power, since PSNH has agreed that it will not seek additional rate
relief before 1997, except in limited circumstances. Even if allowed under
the Rate Agreement, any additional increases above 5.5 percent per year are
subject to political and economic pressures that tend to limit overall retail
rate increases, including FPPAC increases.
In accordance with the Rate Agreement, PSNH increased its average
retail electric rates by about 4.5 percent in June 1993 and by 1.8 percent on
December 1, 1993. The 4.5 percent increase in June resulted from the
combined effect of decreasing to $.00110 per kilowatthour the FPPAC charge at
the same time that (1) the fourth of the seven increases in base electric
rates of 5.5 percent and (2) a temporary increase associated with recently
enacted legislation associated with the settlement of the Seabrook tax suit
described below took effect. The decrease in the FPPAC charge also reflected
lower costs paid by PSNH through the Seabrook Power Contract for Seabrook
property tax imposed on NAEC. The December 1993 increase resulted from an
increase in the FPPAC rate.
In its decision on the June 1, 1993 increase, the NHPUC disallowed
replacement power costs for three Seabrook outages totalling about $0.4
million. On August 16, 1993, the NHPUC affirmed its decision to disallow
that amount. In the August 16 decision, the NHPUC also rejected a request by
the New Hampshire Office of Consumer Advocate (OCA) to allow access to
certain confidential, self-critical documents generated at Seabrook station
by plant personnel following outages and power reductions. PSNH has been
providing summary analyses of the circumstances surrounding outages; however,
it declined to provide the original self-critical documents in an effort to
<PAGE>13
maintain an atmosphere in which employees would be encouraged to report and
comment on all possible problems. The OCA filed an appeal of the NHPUC's
decision on its request for access to these documents with the New Hampshire
Supreme Court on November 16, 1993. On February 8, 1994, the court accepted
the appeal.
On September 14, 1993, PSNH filed a request for an increase in its
FPPAC rate for the period December 1, 1993 through May 31, 1994. The
increase of one percent of the average retail rate was expected to produce
less than the revenues necessary to cover PSNH's FPPAC costs over these six
months, a period during which Seabrook will undergo a two-month refueling
outage. PSNH waived its right to immediate collection and proposed to defer
about $13 million of FPPAC costs for later collection in order to limit its
total rate increases for 1993 to 5.5 percent. Hearings on the FPPAC rate
request were held on November 9 and 10, 1993. On November 29, 1993, the
NHPUC approved a higher FPPAC rate than the rate requested by PSNH. The
increase was 1.8 percent higher than rates previously in effect and allowed
PSNH to recover a deferral of $10.5 million over a twelve month period
beginning June 1, 1994, which ends prior to the next scheduled Seabrook
refueling outage.
In its June 1992 decision concerning PSNH's FPPAC rate, the NHPUC
had determined that PSNH should not be entitled to recover approximately $1.3
million with respect to wholesale power agreements with two New England
utilities. Also, the NHPUC had questioned the prudence of a series of short
term contractual agreements (SWAP Agreements) for energy and capacity
exchanges entered into between the System and PSNH prior to the merger and
the allocation of savings resulting from the SWAP Agreements. In November
1992, PSNH entered into proposed settlements with the NHPUC staff and the OCA
to settle these issues. The settlements proposed disallowances of
approximately $500,000 for the two wholesale power agreements and $250,000
for the SWAP Agreements. On March 23, 1993, the NHPUC approved the
settlements.
SETTLEMENT OF THE SEABROOK TAX SUIT
On April 16, 1993, the Governor of New Hampshire signed into law
legislation that implemented the settlement of a suit concerning property tax
on Seabrook station (the Seabrook Tax) that was filed with the United States
Supreme Court by Attorneys General of Connecticut, Massachusetts and Rhode
Island. The legislation made various changes to New Hampshire tax laws,
resulting in taxes of approximately $5.8 million to be paid by NU on a
consolidated basis in each of 1993 and 1994 and $3.0 million in 1995, a
reduction from the $9.5 million paid by NU on a consolidated basis in 1992.
Of such amounts to be paid, CL&P's portion will be approximately $0.6 million
in each of 1993 and 1994 and approximately $0.3 million in 1995 and NAEC's
portion will be approximately $5.2 million in each of 1993 and 1994 and
approximately $2.7 million in 1995.
MEMORANDUM OF UNDERSTANDING
On May 6, 1993, PSNH, NAEC, NUSCO and the Attorney General of the
State of New Hampshire entered into a Memorandum of Understanding
(Memorandum) relating to certain issues which had arisen under the Rate
Agreement. In part, the issues addressed relate to the enactment of the
legislation implementing the settlement of the Seabrook Tax lawsuit.
Pursuant to the Memorandum, tax changes imposed by the legislation will not
increase PSNH's overall ratepayer charges, but will be reflected in PSNH
rates pursuant to the Rate Agreement through offsetting adjustments to PSNH's
<PAGE>14
base rates and FPPAC charges. On June 1, 1993, PSNH put into effect a
temporary increase of $0.00074 per kilowatthour in base rates designed to
recover the increased costs associated with the enactment of the legislation.
A corresponding decrease in the FPPAC costs collected after June 1, 1993
offset the base rate increase. The FPPAC decrease reflected the reduction of
the Seabrook property tax resulting from the legislation.
The Memorandum also addresses the implementation of new accounting
standards imposed by SFAS 106 and SFAS 109. The Memorandum establishes the
method of accounting under SFAS 106 for employees' post-retirement benefits
other than pensions for PSNH ratemaking purposes. Under SFAS 109, companies
may recognize as a deferred tax asset the value of certain tax attributes.
The Memorandum provides for the establishment of a regulatory liability
attributable to significant net operating loss carryforwards and establishes
that such liability should be amortized over a six-year period beginning on
May 1, 1993.
Other provisions of the Memorandum cover:
NAEC's acquisition of the Vermont Electric Generation and Transmission
Cooperative's (VEG&T) 0.41259% interest in Seabrook for approximately
$6.4 million and NAEC's sale of the output to PSNH. All necessary regulatory
approvals for NAEC's acquisition have been received and NAEC acquired
VEG&T's interest on February 15, 1994. The Rate Agreement will be amended to
ensure that this acquisition will not impact PSNH rates during the fixed rate
period.
The Rate Agreement's ROE collar floor provisions were amended to provide
for the adjustment by PSNH of its revenue received from James River
Corporation and Wausau Papers of New Hampshire by the amount of the demand
charge discount previously approved by the NHPUC.
The Rate Agreement was also amended to provide that any adjustments to
the amount of PSNH's liability under the Seabrook Power Contract to reimburse
NAEC for payments to the Seabrook Nuclear Decommissioning Financing Fund (a
fund administered by the State of New Hampshire to finance decommissioning of
Seabrook) will be recovered through adjustments to PSNH's base rates;
however, such adjustments will not be subject to the annual 5.5 percent
increases established under the Rate Agreement. See "Electric Operations -
Nuclear Generation - Decommissioning" for further information on
decommissioning costs for Seabrook station and other nuclear units that the
System owns or participates in.
On May 11, 1993, PSNH and the State of New Hampshire filed a petition
with the NHPUC seeking approval of the Memorandum. As required for
implementation, PSNH's lenders approved the Memorandum. The NHPUC hearing on
the petition seeking approval of the Memorandum and a request to make the
June 1, 1993, temporary base rate increase permanent was held on December 2,
1993. PSNH entered into a stipulation with the NHPUC staff and the OCA which
modified the Memorandum slightly, clarifying terms of the NAEC power contract
applicable to the VEG&T interest in Seabrook. The NHPUC approved the
Memorandum as modified by the stipulation, the permanent base rate increase
and the Third Amendment to the Rate Agreement on January 3, 1994.
As a result of the approval of the Memorandum, PSNH's earnings in 1993
increased by $10 million. The cumulative impact of the issues resolved by
the Memorandum is not expected to have a significant impact on PSNH's future
earnings.
<PAGE>15
SEABROOK POWER CONTRACT
PSNH and NAEC entered into the Seabrook Power Contract (Contract) on
June 5, 1992. Under the terms of the Contract, PSNH is obligated to purchase
NAEC's initial 35.56942% ownership share of the capacity and output of
Seabrook 1 for the term of Seabrook's NRC operating license and to pay NAEC's
"cost of service" during this period, whether or not Seabrook 1 continues to
operate. NAEC's cost of service includes all of its prudently incurred
Seabrook-related costs, including maintenance and operation expenses, cost of
fuel, depreciation of NAEC's recoverable investment in Seabrook 1 and a
phased-in return on that investment. The payments by PSNH to NAEC under the
Contract constitute purchased power costs for purposes of the FPPAC and are
recovered from customers under the Rate Agreement. Decommissioning costs
are separately collected by PSNH in its base rates. See "Rates - New
Hampshire Retail Rates - Rate Agreement and FPPAC" for information relating
to the Rate Agreement.
If Seabrook 1 is retired prior to the expiration of the Nuclear
Regulatory Commission (NRC) operating license term, NAEC will continue to be
entitled under the Contract to recover its remaining Seabrook investment and
a return of that investment and its other Seabrook-related costs for 39
years, less the period during which Seabrook 1 has operated. At December 31,
1993, NAEC's net utility plant investment in Seabrook 1 was $732 million.
The Contract provides that NAEC's return on its "allowed investment"
in Seabrook 1 (its investment in working capital, fuel, capital additions
after the date of commercial operation of Seabrook 1 and a portion of the
initial investment) is calculated based on NAEC's actual capitalization from
time to time over the term of the Contract, its actual debt and preferred
equity costs, and a common equity cost of 12.53 percent for the first ten
years of the Contract, and thereafter at an equity rate of return to be fixed
in a filing with the FERC. The portion of the initial investment which is
included in the "allowed investment" was 20 percent for the twelve months
commencing May 16, 1991, increasing by 20 percent in the second year and by
15 percent in each of the next four years, resulting in 100 percent in the
sixth and each succeeding year. As of December 31, 1993, 55 percent of the
investment was included in rates.
NAEC is entitled to earn a deferred return on the portion of the initial
investment not yet phased into rates. The deferred return on the excluded
portion of the initial investment will be recovered, together with a return
on it, beginning in the first year after PSNH's Fixed Rate Period, and will
be fully recovered prior to the tenth anniversary of PSNH's reorganization
date.
Effective February 15, 1994, NAEC also owns the 0.41259% share of
capacity and output of Seabrook it purchased from VEG&T. NAEC sells that
share to PSNH under an agreement that has been approved by FERC and is
substantially similar to the Contract; however, the agreement does not
provide for a phase-in of allowed investment and associated deferrals of
capital recovery.
MASSACHUSETTS RETAIL RATES
GENERAL
WMECO's retail electric rate schedules are subject to the jurisdiction
of the DPU. The rates charged under HWP's contracts with industrial
customers are not subject to the ratemaking jurisdiction of any state or
federal regulatory agency.
<PAGE>16
Massachusetts law allows the DPU to suspend a proposed rate increase
for up to six months. If the DPU does not act within the suspension period,
the proposed rates may be put into effect.
Under present rate-making standards, the DPU allows few adjustments to
historic test year expenses to reflect the conditions anticipated by a
company during the first year amended rate schedules are to be in effect.
The principal adjustments that are permitted are inflation adjustments to
historic test year non-fuel operation and maintenance expenses. Rate base is
based on test year-end levels, and capital structure is based on test
year-end levels adjusted for known and measurable changes. Current DPU
practices permit WMECO to normalize most income tax timing differences.
In Holyoke, Massachusetts, where HWP and Holyoke Gas and Electric
Department, a municipal utility, operate side-by-side, approximately 30 HWP
industrial customers sought bids as a group in 1993 for future electric
service. HWP retained the load and has a 10-year contract, at substantially
lower rates than in the past, to supply the group.
WMECO REGULATORY ACTIVITY
In December 1991, WMECO filed an application with the DPU for a retail
rate increase of approximately $36 million or 9.1 percent. In April 1992,
WMECO and the Massachusetts Attorney General filed a partial settlement
agreement for approval by the DPU. Also in April 1992, a settlement
agreement on WMECO's C&LM program budget was filed with the DPU jointly by
WMECO, the Massachusetts Attorney General, Massachusetts Division of Energy
Resources (DOER), the Conservation Law Foundation, Inc. (CLF) and the DPU's
Settlement Intervention Staff. The settlement agreement covered WMECO's C&LM
program through 1993 and included an annual budget of $17 million for both
years. The parties also agreed that all expenditures and other charges
relating to C&LM would be collected through a conservation charge (CC).
In May 1992, the DPU accepted the WMECO retail rate case and the C&LM
settlement agreements. As a result, WMECO's annual retail rates increased by
$12 million, or three percent, on July 1, 1992, and by a further $11 million,
or 2.7 percent, on July 1, 1993. In June 1992, the DPU resolved the remaining
issues in the rate case filed in December 1991, when it issued an order on
WMECO's rate design. The DPU order required the first and second year base
revenue increases to be allocated so that all classes contribute the same
percentage increase.
In July 1992, the DPU approved an amended settlement agreement for 1992
and 1993 C&LM programs that established a CC that promoted rate stability by
spreading the costs and subsequent recovery of 1992 and 1993 C&LM programs
over the 18-month period from July 1, 1992 through December 31, 1993. The CC
includes incremental C&LM program costs above or below base rate recovery
levels, C&LM fixed cost recovery adjustments, and the provision for a C&LM
incentive mechanism. In January 1993, WMECO filed with the DPU a request to
reduce the CC rate by an aggregate of $3 million in 1993. On February 5,
1993, the DPU directed WMECO to file a revised CC to be effective on March 1,
1993 based on actual 1992 expenditures and the preapproved 1993 budget. The
DPU approved the new CC on February 26, 1993. A motion for reconsideration
was filed by certain of the parties to the original settlement. The DPU
rejected that motion on July 9, 1993. WMECO filed for approval of a new CC
on February 2, 1994. The DPU held a hearing on the proposed new CC on
February 18, 1994.
<PAGE>17
In October 1992, the DPU approved an Integrated Resource Management
(IRM) settlement agreement that had been proposed by WMECO, the Attorney
General, CLF, DOER and the Massachusetts Public Interest Research Group
(MASSPIRG) concerning WMECO's IRM. The settlement required WMECO to submit
its C&LM programs for 1994, 1995 and a portion of 1996 for approval by the
DPU prior to October 1993, and to file its next IRM draft initial filing on
January 3, 1994. The settlement also requires WMECO to prepare a
competitive resource solicitation at least six months before its C&LM filing
for any new C&LM programs it proposes.
On March 16, 1993 WMECO filed a motion with the DPU to request authority
to eliminate the separate (and higher) rates for residential electric heating
customers by placing those customers on the same rates as the residential
non-electric heating customers. WMECO proposed this change in order to be
more competitive and to stem its losses of electric heating customers. On
April 30, 1993, the DPU denied WMECO's request to eliminate the separate
rates for residential electric heating customers but reduced the customer and
energy charges for the electric heating customers to equal the comparable
charges for non-electric heating customers.
In November 1993, WMECO submitted its C&LM filing required in the
settlement of the IRM proceeding, along with a settlement offer from WMECO,
the Attorney General, DOER, CLF and MASSPIRG. The settlement offer
incorporated preapproved C&LM funding levels for 1994 and 1995 of $14.2
million and $15.8 million, respectively. The settlement also provides for
the recovery of lost fixed revenue and a bonus incentive if certain
implementation objectives are met. On January 21, 1994, the DPU approved the
settlement.
On January 3, 1994, WMECO submitted its next draft initial IRM filing
required by the October 1992 settlement to the DPU. The filing indicates the
System does not need additional resources until at least the year 2007 and,
therefore, WMECO does not intend to issue any solicitation for additional
resources anytime in the foreseeable future. WMECO is presently
participating in settlement discussions concerning this IRM filing. Should
no settlement be reached, WMECO is scheduled to submit its initial IRM
filing to the DPU in April 1994.
WMECO ADJUSTMENT CLAUSE
In Massachusetts, all fuel costs are collected on a current basis by
means of a forecasted quarterly fuel clause. The DPU must hold public
hearings before permitting quarterly adjustments in WMECO's retail fuel
adjustment clause. In addition to energy costs, the fuel adjustment clause
includes capacity and transmission charges and credits that result from
short-term transactions with other utilities and from the operation of the
Northeast Utilities Generation and Transmission Agreement (NUG&T). The NUG&T
is the FERC-approved contract among the System operating companies, other
than PSNH, that provides for the sharing among the companies of system-wide
costs of generation and transmission and serves as the basis for planning and
operating the System's bulk power supply system on a unified basis.
Massachusetts law establishes an annual performance program related
to fuel procurement and use, and requires the DPU to review generating unit
performance and related fuel costs if a utility fails to meet the fuel
procurement and use performance goals set for that utility. Goals are
established for equivalent availability factor, availability factor, capacity
factor, forced outage rate and heat rate. Fuel clause revenues collected in
<PAGE>18
Massachusetts are subject to potential refund, pending the DPU's examination
of the actual performance of WMECO's generating units.
Currently pending before the DPU are investigations into the
performance of WMECO's generating units for the 12-month periods ending
May 31, 1992 and May 31, 1993. The DPU held a hearing on February 1, 1994 on
WMECO's non-nuclear performance for the 12-month period ending May 31, 1992.
Except for the order concerning CYAPC discussed below, the DPU has completed
investigations of, but not yet issued decisions reviewing WMECO's actual
generating unit performance for the program years between June 1987 and May
1991.
The DPU has consistently set performance goals for generating units
that are not wholly-owned and operated by the company whose goals are being
set. The DPU has found that possession of a minority ownership interest in a
generating plant does not relieve a company of its responsibilities for the
prudent operation of that plant. Accordingly, the DPU has established goals,
as discussed above, for the three Millstone units and for the three regional
nuclear generating units (the Yankee plants) in which WMECO has minority
ownership interests.
The total amount of WMECO retail replacement power costs attributable to
the major outages in the 1991 performance year -- the Millstone 3 July 1991
outage (mussel-fouling and service water), the Millstone 1 October 1991
outage (operator requalification examinations) and the November 1991 outages
to perform pipe inspections, analysis and repair -- is approximately $17
million. In December 1992, WMECO notified the DPU that it will forego
recovery of $1.2 million in replacement power costs associated with the
October 1991 Millstone 1 operator requalification examination outage. The
total amount of WMECO retail replacement power costs attributable to outages
in the 1992-1993 performance year is approximately $17 million. Management
believes that some portion of these replacement power costs may be subject to
refund upon completion of the DPU's performance program reviews. However,
management believes that its actions with respect to these outages have been
prudent and does not expect the outcome of the DPU review to have a material
adverse impact on WMECO's future earnings.
In September 1992, the DPU issued a partial order pertaining to CY's
extended 1989-1990 refueling outage (discussed above), disallowing the
recovery of $0.6 million of incremental replacement power costs that could be
attributable to the outage. WMECO filed a motion for reconsideration with
the DPU in the same month, which motion is pending before the DPU.
WHOLESALE RATES
CL&P currently furnishes firm wholesale electric service to one
Connecticut municipal electric system. PSNH serves NHEC, three New Hampshire
municipal electric systems and one investor-owned utility in Vermont. HWP
and its wholly-owned subsidiary, Holyoke Power and Electric Company, serve
one Massachusetts municipal electric system. WMECO serves one New York
investor-owned electric utility. The System's 1993 firm wholesale load was
approximately 275 megawatts (MW). In 1993, firm wholesale electric service
accounted for approximately 2.5 percent of the System's consolidated electric
operating revenues (approximately 1.2 percent of CL&P's operating revenue,
6.0 percent of PSNH's operating revenue, 0.1 percent of WMECO's operating
revenue and 21.5 percent of HWP's operating revenue).
NHEC, PSNH's largest customer, representing 5.9 percent of its revenues
for 1993, filed a petition for reorganization in 1991 under Chapter 11 of the
<PAGE>19
United States Bankruptcy Code. A plan of reorganization for NHEC, which was
confirmed by the Bankruptcy Court in March 1992 and became effective on
December 1, 1993, resolves a series of disputes between PSNH and NHEC and
provides for PSNH to continue to serve NHEC. The contract covering this
continued service has been filed with and accepted by FERC.
In addition to firm service, the System engages in numerous other bulk
supply transactions that reduce retail customer costs, at rates that are
subject to FERC jurisdiction, and it transmits power for other utilities at
FERC-regulated rates. See "Electric Operations - Generation and
Transmission" for further information on those bulk supply transactions and
for information on pending FERC proceedings relating to transmission service.
All of the wholesale electric transactions of CL&P, PSNH, WMECO, NAEC and HWP
are subject to the jurisdiction of the FERC.
For a discussion of certain FERC-regulated sales of power by CL&P, PSNH,
WMECO and HWP to other utilities, see "Electric Operations -- Distribution
and Load." For a discussion of sales of power by NAEC to PSNH, see "Rates -
Seabrook Power Contract." For a discussion of the effects of competition on
the System, see "Competition and Marketing."
<PAGE>20
RESOURCE PLANS
CONSTRUCTION
The System's construction program expenditures, including allowance for
funds used during construction (AFUDC), in the period 1994 through 1998 are
estimated to be as follows:
1994 1995 1996 1997 1998
(Millions of Dollars)
PRODUCTION
CL&P . . . . . $ 60.9 $54.5 $44.3 $41.5 $39.6
PSNH . . . . . 10.5 7.0 13.3 8.7 15.8
WMECO . . . . 17.3 13.5 10.1 9.3 17.4
NAEC . . . . . 8.2 8.5 8.3 7.0 5.8
Other . . . . 16.2 3.0 2.0 0.7 0.5
System Total . 113.1 86.5 78.0 67.2 79.1
SUBSTATIONS AND
TRANSMISSION LINES
CL&P . . . . . 12.2 9.4 11.6 12.3 14.6
PSNH . . . . . 3.0 6.9 9.9 6.1 6.7
WMECO. . . . . 0.8 0.4 0.5 0.8 1.3
NAEC . . . . . 0.0 0.0 0.0 0.0 0.0
Other . . . . 0.0 0.0 0.0 0.0 0.0
System Total 16.0 16.7 22.0 19.2 22.6
DISTRIBUTION OPERATIONS
CL&P . . . . . 76.1 78.8 80.9 84.1 85.5
PSNH . . . . . 22.0 11.7 10.6 14.5 14.2
WMECO. . . . . 17.4 19.3 17.3 17.2 18.7
NAEC . . . . . 0.0 0.0 0.0 0.0 0.0
Other . . . . 0.4 0.2 0.2 0.2 0.2
System Total 115.9 110.0 109.0 116.0 118.6
GENERAL
CL&P . . . . . 8.6 8.8 7.2 5.8 5.1
PSNH . . . . . 2.0 3.3 1.9 2.4 2.0
WMECO . . . . 2.0 2.1 1.9 1.5 1.3
NAEC . . . . . 0.0 0.0 0.0 0.0 0.0
Other . . . . 9.9 7.4 7.8 9.8 9.8
System Total 22.5 21.6 18.8 19.5 18.2
TOTAL CONSTRUCTION
CL&P . . . . . 157.8 151.5 144.0 143.7 144.8
PSNH . . . . . 37.5 28.9 35.7 31.7 38.7
WMECO . . . . 37.5 35.3 29.8 28.8 38.7
NAEC . . . . . 8.2 8.5 8.3 7.0 5.8
Other . . . . 26.5 10.6 10.0 10.7 10.5
System Total $267.5 $234.8 $227.8 $221.9 $238.5
The construction program data shown above include all anticipated
capital costs necessary for committed projects and for those reasonably
expected to become committed, regardless of whether the need for the project
arises from environmental compliance, nuclear safety, improved reliability or
other causes.
<PAGE>21
The construction program data shown above generally include the
anticipated capital costs necessary for fossil generating units to operate at
least until their scheduled retirement dates. Whether a unit will be
operated beyond its scheduled retirement date, be deactivated or be retired
on or before its scheduled retirement date is regularly evaluated in light of
the System's needs for resources at the time, the cost and availability of
alternatives, and the costs and benefits of operating the unit compared with
the costs and benefits of retiring the unit. Retirement of certain of the
units could, in turn, require substantial compensating expenditures for other
parts of the System's bulk power supply system. Those compensating capital
expenditures have not been fully identified or evaluated and are not included
in the table.
FUTURE NEEDS
The System's integrated demand and supply planning process is the means
by which the System periodically updates its long-range resource needs.
The current resource plan identifies a need for new resources beginning in
2007.
Because New England and the System have surplus generating capacity and
are forecasting low load growth over the next several years, the System has
no current plans to construct or to contract for any new generating units.
Additional capacity beyond 2007, the projected System year of need, can come
from a variety of sources. The design and implementation of new C&LM
programs, the timely development of economic, reliable and efficient
qualifying cogeneration and small power production facilities (QFs) or
independent power producer (IPP) capacity through state-sanctioned resource
acquisition processes, economic utility-sponsored generating resources
(including the possibility of repowering retired power plants) and purchases
from other utilities will all receive consideration in the System's
integrated resource planning process.
With respect to demand-side management measures, the System's long-
term plans rely, in part, on encouraging additional C&LM by customers. These
measures, including installations to date, are projected to lower the System
summer peak load in 2007 by over 1000 MW. In addition, System companies have
long-term arrangements to purchase the output from QFs and IPPs under federal
and state laws, regulations and orders mandating such purchases. CL&P's,
PSNH's and WMECO's plans anticipate the development of QFs and IPPs supplying
710 MW of firm capacity by 1995, of which approximately 695 MW was
operational in 1993. See "New Hampshire Retail Rates -- Rate Agreement and
FPPAC" for information concerning PSNH's efforts to renegotiate its
agreements with thirteen QFs.
CL&P and WMECO filed applications with the U.S. Environmental Protection
Agency to receive 203 SO2 allowances for C&LM activity as authorized by the
Clean Air Act Amendments. See "Regulatory and Environmental Matters -
Environmental Regulation - Air Quality Requirements."
The DPUC has issued regulations establishing competitive bidding systems
for future purchases by Connecticut electric utilities from QFs and IPPs and
from C&LM vendors. The regulations also implement a state law which provides
that a utility may seek a premium of between one and five percentage points
above its most recently authorized rate of return for each multi-year C&LM
program requiring capital investment by the utility. In April 1993, CL&P
submitted its eighth annual filing to the DPUC on private power production,
C&LM, projected avoided costs and related matters. CL&P stated that the
<PAGE>22
System's existing and committed resources are expected to be sufficient to
meet System capacity requirements until 2007, and therefore, CL&P did not
solicit new capacity from QFs or C&LM vendors in 1993. In December 1993, the
DPUC issued its final decision approving CL&P's avoided cost estimates as
filed.
In 1993, regulatory preapproval was obtained for all 1993 C&LM
expenditures in each of the three retail jurisdictions. In addition, the
DPUC authorized a maximum of 3 percent premium rate of return (after
tax) on CL&P C&LM investment in 1993. WMECO is currently projected to earn
$1.2 million of incentive (after tax) based on 1993 program savings. See
"Rates - Connecticut Retail Rates - Conservation and Load Management" and
"Rates - Massachusetts Retail Rates -WMECO Regulatory Activity" for
information about rate treatment of C&LM costs.
In 1988, the DPU adopted regulations requiring preapproval of
Massachusetts utilities' major investments in electric generating facilities,
including life extensions. In 1990, the DPU adopted new IRM regulations,
which established procedures by which additional resources are planned,
solicited and processed to provide for reliable electric service in a least-
cost manner. The regulations provide a mechanism for preapproval (rather
than after-the-fact review) of utility plant construction, procurement of
non-utility generation (QFs and IPPs), and C&LM programs. The regulations
specifically require that environmental externalities be considered in the
evaluation of resource alternatives.
In January 1994, WMECO filed its initial draft IRM filing, stating that
WMECO's year of need is estimated to be 2007, and that no new capacity need
be solicited at this time. WMECO is presently in settlement discussions.
See "Rates-Massachusetts Retail Rates - WMECO Regulatory Activity" for
further information relating to WMECO C&LM issues.
In 1993, the NHPUC approved a settlement agreement related to PSNH's
1992 least cost planning filing, which defers various planning issues to
PSNH's April 1, 1994 filing.
In addition to the contributions from C&LM, QFs and IPPs, the System's
long-term resource plan includes consideration of continued operation of
certain of the System's fossil generating units beyond their current book
retirement dates to the extent that it is economic, and possibly repowering
certain of the System's older fossil plants. Continued operation of existing
fossil units past their book retirement dates (and replacing certain
critically located peaking units if they fail) is expected by 2007 to provide
approximately 1,400 MW of resources that would otherwise have been retired.
Repowering of some of the System's retired generating plants could make
available an additional 900 MW of capacity. The capacity could be brought on
line in various increments timed with the year of need. The System's need
for new resources may be affected by any additional retirements of the
System's existing generating units.
The System companies periodically study the economics of their
generating units as part of their overall resource planning process. In
1992, the DPUC ordered CL&P to submit economic analyses of the continued
operation of 11 fossil steam units by April 1, 1993, and of Millstone
Units 1 and 2 and CY, of which the System companies own 49 percent) by April
1, 1994. In 1993, the DPUC reviewed the continued unit operation (CUO)
studies submitted by CL&P for the eleven fossil units in Connecticut and
<PAGE>23
Massachusetts in its annual review of Integrated Resource Planning. The DPUC
concluded that a decision was inappropriate at that time and that it would
review the issue again in its management audit of CL&P and in CL&P's 1994
integrated resource planning docket. For Millstone 1 and 2 and CY, the CUO
studies are in progress. Preliminary indications are that the operation of
the units continues to be economic for customers. Final analyses for CY and
the Millstone units will be filed with the DPUC in 1994.
For planning and budgetary purposes, the System assumes that CL&P's
Montville Station (497.5 MW) will be deactivated from November 1994 through
October 1998. A final decision is expected to be made in 1994. Since
reactivation is expected to occur in 1998, the System year of need of 2007 is
unaffected. The System year of need of 2007 assumes PSNH's Merrimack 2
continues to operate. However, Merrimack 2's continued operation is in
question because Merrimack 2 produces significant NOx emissions. The concern
has been raised as to whether the emissions can be lowered to acceptable
levels in the short and long term. In 1993, PSNH worked successfully with
local, state and federal interests to arrive at a solution for Merrimack 2
NOx compliance by 1995, while deferring a decision on continued unit
operation beyond 1999 to the future. For information regarding the agreement
concerning NOX emissions at the Merrimack units, see "Regulatory and
Environmental Matters - Environmental Regulation - Air Quality Requirements."
See "Regulatory and Environmental Matters -- NRC Nuclear Plant Licensing"
for further information on the NRC rule on nuclear plant operating license
renewal and information on the expiration dates of the operating licenses of
the nuclear plants in which System companies have interests. Before the
System can make any decisions about whether license extensions for any of its
nuclear units are feasible, detailed technical and economic studies will be
needed.
FINANCING PROGRAM
1993 FINANCINGS
In January 1993, WMECO issued $60 million in principal amount of 6 7/8
percent first mortgage bonds due in 2000. In July 1993, CL&P issued $200
million and $100 million, respectively, of 5 3/4 percent and 7 1/2 percent
first mortgage bonds due in 2000 and 2023, respectively. In December 1993,
CL&P issued $125 million of 7 3/8 percent first mortgage bonds due in 2025.
The proceeds from the foregoing issues were used to redeem outstanding bonds
with interest rates ranging from 8 3/4 percent to 9 3/4 percent.
In October 1993, CL&P issued $80 million of 5.30 percent preferred
stock, $50 par value. The proceeds of this issuance, together with $30
million of short-term debt, were used to redeem $110 million of preferred
stock with dividend rates ranging from 7.6 percent to 9.1 percent.
In September 1993, the Connecticut Development Authority (CDA) issued,
on behalf of CL&P, two tax-exempt variable rate pollution control revenue
bonds (PCRBs) in the amounts of $245.5 million and $70 million, respectively.
At the same time, the CDA issued, on behalf of WMECO, $53.8 million of
tax-exempt variable rate PCRBs. The proceeds of these issues were used to
redeem like amounts of tax-exempt PCRBs having less favorable structures.
These refinancings will result in savings from the extension of maturities,
the redemption of two issues of fixed-rate bonds with proceeds of the
<PAGE>24
issuance of variable-rate bonds, the improved credit ratings of new
supporting letter of credit banks and associated administrative savings. In
December 1993, the New Hampshire Business Finance Authority (BFA) issued, on
behalf of PSNH, $44.8 million of tax-exempt variable rate PCRBs. The
proceeds of this issue were used to redeem a like amount of taxable PCRBs.
Taxable BFA bonds issued on behalf of PSNH in the amount of $109.2 million
are outstanding and may be refinanced with tax-exempt bonds upon the receipt
of an allocation of the state's private activity volume allocation.
In January 1993, CL&P, PSNH and WMECO purchased $340 million, $75
million and $52 million, respectively, of three-year variable rate debt
caps. The caps were purchased to hedge the interest rate risk of the
companies' respective variable rate PCRBs and were sized to approximate each
respective company's then-current tax-exempt variable rate PCRB issuances.
If the interest rate, based on the J. J. Kenny index, exceeds 4.5 percent
(the strike rate), each company will receive payments under the terms of its
respective interest rate cap agreement. In June 1993, PSNH purchased a
$50 million six-month interest rate cap, a $50 million 12 month cap and a
$100 million 18 month cap to hedge its interest rate exposure on its variable
rate term note. The six-month and 12 month caps have a strike rate of
4.5 percent and the 18 month cap has a strike rate of 5.0 percent, all based
on 90 day LIBOR. These caps were sized to approximate portions of a PSNH
term note which has a quarterly sinking fund of $23.5 million.
In February 1993, NU, CL&P, WMECO and the Niantic Bay Fuel Trust (NBFT)
began a co-managed commercial paper program with two commercial paper
dealers. Prior to this time, each company's commercial paper program was
managed by one commercial paper dealer. The co-managed program was
implemented to promote competition between commercial paper dealers, to
increase the investor universe and to increase the range of maturities
available to the issuers. On December 31, 1993, $113.0 million commercial
paper was outstanding under these programs.
In December 1993, NNECO issued $25 million of 7.17 percent unsecured
amortizing notes maturing in 2019. The proceeds of this issuance are being
used to finance the construction of a new building at Millstone station to
house various administrative and technical support functions.
FINANCING NUCLEAR FUEL
The System requires nuclear fuel for the three Millstone units and for
Seabrook 1. The requirements for the Millstone 1, Millstone 2 and CL&P's and
WMECO's share of the Millstone 3 units are financed through a third party
trust financing arrangement described below. All nuclear fuel for NAEC's and
CL&P's shares of Seabrook 1 and PSNH's share of Millstone 3 is owned and
financed directly by the respective companies. For the period 1994 through
1998, NAEC's and CL&P's shares of the cost of nuclear fuel for Seabrook 1 are
estimated at $56.8 million and $6.4 million, respectively, excluding AFUDC.
For the same period, PSNH's share of the cost of nuclear fuel for Millstone 3
is estimated at $6 million, excluding AFUDC.
In 1982, CL&P and WMECO entered into arrangements under which NBFT owns
and finances the nuclear fuel for Millstone 1 and 2 and CL&P's and WMECO's
share of the nuclear fuel for Millstone 3. NBFT finances the fuel from the
time uranium is acquired, during the off-site processing stages and through
its use in the units' reactors. NBFT obtains funds from bank loans, the sale
of commercial paper and the sale of intermediate term notes. The fuel is
leased to CL&P and WMECO by the trust while it is used in the reactors, and
<PAGE>25
ownership of the fuel is transferred to CL&P and WMECO when it is permanently
discharged from the reactors. CL&P and WMECO are severally obligated to make
quarterly lease payments, to pay all expenses incurred by NBFT in connection
with the fuel and the financing arrangements, to purchase the fuel under
certain circumstances and to indemnify all the parties to the transactions.
The trust arrangements presently allow up to $530 million to be
financed by NBFT with bank loans and commercial paper (up to $230 million)
and with intermediate term notes (up to $300 million). The arrangements with
the banks are in effect until February 19, 1996, and can be extended for an
additional three years if the parties so agree. On December 31, 1993, NBFT
had $80 million of intermediate term notes and $113 million of commercial
paper outstanding.
As of December 31, 1993, NBFT's investment in nuclear fuel, net of the
fourth quarter 1993 lease payment made on January 31, 1994, for all three
Millstone units was $172.1 million, as follows:
Total
CL&P WMECO System
(Millions of Dollars)
In process.......... $20.3 $4.7 $25.0
In stock............ 8.0 1.9 9.9
In reactor.......... 111.2 26.0 137.2
Total.......... $139.5 $32.6 $172.1
For the period 1994 through 1998, CL&P and WMECO's share of the cost
of nuclear fuel for the three Millstone units that will be acquired through
NBFT will be $313.5 million and $73.2 million, respectively, excluding AFUDC.
Nuclear fuel costs and a provision for spent fuel disposal costs are
being recovered through rates as the fuel is consumed in reactors.
1994 FINANCING REQUIREMENTS
In addition to financing the construction requirements described under
"Resource Plans - Construction," the System companies are obligated to meet
$1,373.8 million of long-term debt maturities and cash sinking fund
requirements and $76.4 million of preferred stock cash sinking fund
requirements in 1994 through 1998. In 1994, long-term debt maturity and cash
sinking fund requirements will be $295.3 million, consisting of $182 million
of long-term debt maturities and $7 million of debt cash sinking fund
requirements to be met by CL&P, $94 million of cash sinking fund requirements
to be met by PSNH, $1.5 million of cash sinking funds to be met by WMECO and
$10.7 million of cash sinking fund requirements to be met by other
subsidiaries. These figures do not include $125 million of long-term debt
redeemed by CL&P on January 7, 1994 with the proceeds of its issuance of $125
million mortgage bonds in December 1993. See "Financing Program - 1993
Financings."
See "Electric Operations -- Nuclear Generation -- Operations --
Seabrook" for information on CL&P's commitment to advance funds to cover
payments that a 12 percent Seabrook owner might be unable to pay with respect
to Seabrook project costs.
<PAGE>26
The System's aggregate capital requirements for 1994, exclusive of
requirements under NBFT, are as follows:
Total
CL&P PSNH WMECO NAEC Other System
(Millions of Dollars)
Construction
(including AFUDC)..... $157.8 $37.5 $37.5 $ 8.2 $26.5 $267.5
Nuclear Fuel
(excluding AFUDC). (.3) 1.8 (.2) 5.8 - 7.1
Maturities......... 182.0 - - - - 182.0
Cash Sinking Funds. 7.0 94.0 1.5 - 10.7 113.2
Total.......... $346.5 $133.3 $38.8 $14.0 $37.2 $569.8
1994 FINANCING PLANS
The System companies, other than CL&P, currently expect to finance
their 1994 requirements through internally generated funds. CL&P may issue
up to $200 million of long-term debt, primarily to finance maturing
securities. This estimate excludes the nuclear fuel requirements financed
through the NBFT. See "Financing Nuclear Fuel" above for information on the
NBFT. In addition to financing their 1994 requirements, the System companies
intend, if market conditions permit, to continue to refinance a portion of
their outstanding long-term debt and preferred stock, if that can be done at
a lower effective cost.
On February 17, 1994, CL&P issued $140 million in principal amount of
5 1/2 percent first mortgage bonds due in 1999 and $140 million in principal
amount of 6 1/2 percent first mortgage bonds due in 2004. The net proceeds
were used to redeem higher cost first mortgage bonds.
On March 8, 1994, WMECO contracted to issue $40 million principal
amount of 6 1/4 percent first mortgage bonds due in 1999 and $50 million in
principal amount of 7 3/4 percent first mortgage bonds due in 2024. The net
proceeds will be used to redeem higher cost first mortgage bonds.
FINANCING LIMITATIONS
The amounts of short-term borrowings that may be incurred by NU, CL&P,
PSNH, WMECO, HWP, NAEC, NNECO, The Rocky River Realty Company (RRR), The
Quinnehtuk Company (Quinnehtuk) (RRR and Quinnehtuk are real estate
subsidiaries), and HEC are subject to periodic approval by the SEC under the
Public Utility Holding Company Act of 1935 (1935 Act).
The following table shows the amount of short-term borrowings authorized
by the SEC for each company and the amounts of outstanding short term debt of
those companies at the end of 1993.
<PAGE>27
Maximum Authorized Short-Term Debt
Short-Term Debt Outstanding at 12/31/93*
(Millions of Dollars)
NU.................. $ 175.0 $ 72.5
CL&P ............... 375.0 96.2
PSNH ............... 125.0 2.5
WMECO............... 75.0 6.0
HWP................. 8.0 -
NAEC................ 50.0 -
NNECO............... 65.0 -
RRR................. 25.0 16.5
Quinnehtuk.......... 8.0 4.3
HEC................. 11.0 2.9
______
$200.9
_________________
* This column includes borrowings of various System companies from NU and
other System companies through the Northeast Utilities System Money Pool
(Money Pool). Total System short term indebtedness to unaffiliated lenders
was $173.5 million at December 31, 1993.
The supplemental indentures under which NU issued $175 million in
principal amount of 8.58 percent amortizing notes in December 1991 and
$75 million in principal amount of 8.38 percent amortizing notes in March
1992 contain restrictions on dispositions of certain System companies' stock,
limitations of liens on NU assets and restrictions on distributions on and
acquisitions of NU stock. Under these provisions, neither NU, CL&P, PSNH nor
WMECO may dispose of voting stock of CL&P, PSNH or WMECO other than to NU or
another System company, except that CL&P may sell voting stock for cash to
third persons if so ordered by a regulatory agency so long as the amount sold
is not more than 19 percent of CL&P's voting stock after the sale. The
restrictions also generally prohibit NU from pledging voting stock of CL&P,
PSNH or WMECO or granting liens on its other assets in amounts greater than
five percent of the total common equity of NU. As of March 1, 1994, no NU
debt was secured by liens on NU assets. Finally, NU may not declare or make
distributions on its capital stock, acquire its capital stock (or rights
thereto), or permit a System company to do the same, at times when there is
an Event of Default under the supplemental indentures under which the
amortizing notes were issued.
The charters of CL&P and WMECO contain preferred stock provisions
restricting the amount of short term or other unsecured borrowings those
companies may incur. As of December 31, 1993, CL&P's charter would permit
CL&P to incur an additional $570 million of unsecured debt and WMECO's
charter would permit it to incur an additional $141.1 million of unsecured
debt.
In connection with NU's acquisition of PSNH, certain financial
conditions intended to prevent NU from relying on CL&P resources if the PSNH
acquisition strains NU's financial condition were imposed by the DPUC. The
principal conditions provide for a DPUC review if CL&P's common equity falls
to 36 percent or below, require NU to obtain DPUC approval to secure NU
financings with CL&P stock or assets, and obligate NU to use its best efforts
to sell CL&P preferred or common stock to the public if NU cannot meet CL&P's
need for equity capital. At December 31, 1993, CL&P's common equity ratio
was 39.1 percent.
While not directly restricting the amount of short-term debt that CL&P,
WMECO, RRR, NNECO and NU may incur, credit agreements to which CL&P, WMECO,
HWP, RRR, NNECO and NU are parties provide that the lenders are not required
<PAGE>28
to make additional loans, or that the maturity of indebtedness can be
accelerated, if NU (on a consolidated basis) does not meet a common equity
ratio that requires, in effect, that the NU consolidated common equity (as
defined) be at least 27 percent for three consecutive quarters. At December
31, 1993, NU's common equity ratio was 30.9 percent. Credit agreements to
which PSNH is a party forbid its incurrence of additional debt unless it is
able to demonstrate, on a pro forma basis for the prior quarter and going
forward, that its equity ratio (as defined) will be at least 21 percent of
total capitalization (as defined) through June 30, 1994, 23 percent through
June 30, 1995 and 25 percent thereafter. In addition, PSNH must demonstrate
that its ratio of operating income to interest expense will be at least 1.5
to 1 for each period of four fiscal quarters ending after June 30, 1993
through June 30, 1994 and 1.75 to 1 thereafter. At December 31, 1993, PSNH's
common equity ratio was 28.2 percent and its operating income to interest
expense ratio was 2.27 to 1.
See "Short-Term Debt" in the notes to NU's, CL&P's, PSNH's and WMECO's
financial statements for information about credit lines available to System
companies.
The indentures securing the outstanding first mortgage bonds of CL&P,
PSNH, WMECO and NAEC provide that additional bonds may not be issued, except
for certain refunding purposes, unless earnings (as defined in each
indenture, and before income taxes, and, in the case of PSNH, without
deducting the amortization of PSNH's regulatory asset) are at least twice the
pro forma annual interest charges on outstanding bonds and certain prior lien
obligations and the bonds to be issued.
The preferred stock provisions of CL&P's, WMECO's and PSNH's charters
also prohibit the issuance of additional preferred stock (except for
refinancing purposes) unless income before interest charges (as defined and
after income taxes and depreciation) is at least 1.5 times the pro forma
annual interest charges on indebtedness and the annual dividend requirements
on preferred stock that will be outstanding after the additional stock is
issued.
Beginning with the dividends paid on NU common shares by NU in June
1990, NU's Dividend Reinvestment Plan (DRP) was amended to authorize the
dividends and optional cash purchases of participating shareholders to be
reinvested in NU common shares purchased either in the open market or
directly from NU. NU received approximately $42.4 million in 1991 and
approximately $35.6 million in 1992 of new common shareholders' equity from
the reinvestment of dividends and voluntary cash investments. No funds have
been raised by NU through DRP since August 1992, when management ended direct
purchases and caused shares to be purchased for DRP participants in the open
market.
As part of the PSNH acquisition in June 1992, NU issued warrants for the
purchase of NU common stock at a price of $24 per share. In 1993, NU
received $8.3 million from the exercise of these warrants. As of December
31, 1993, warrants for 7,975,516 shares of NU common stock remained
unexercised.
NU is dependent on the earnings of, and dividends received from, its
subsidiaries to meet its own financial requirements, including the payment of
dividends on NU common shares. At the current indicated annual dividend of
$1.76 per share, NU's aggregate annual dividends on common shares outstanding
at December 31, 1993, including unallocated shares held by the ESOP trust,
would be approximately $236.2 million. Dividends are payable on common
shares only if, and in the amounts, declared by the NU Board of Trustees.
<PAGE>29
SEC rules under the 1935 Act require that dividends on NU's shares be
based on the amounts of dividends received from subsidiaries, not on the
undistributed retained earnings of subsidiaries. The SEC's order approving
NU's acquisition of PSNH under the 1935 Act approved NU's request for a
waiver of this requirement through June 1997. PSNH and NAEC were effectively
prohibited from paying dividends to NU through May 1993. Through the
remainder of 1993, PSNH and NAEC did not pay dividends to permit them to
build up the common equity portion of their capitalizations. Until PSNH and
NAEC can begin to fund a part of NU's dividend requirements, NU expects to
fund that portion of its dividend requirements with the proceeds of
borrowings.
The supplemental indentures under which CL&P's and WMECO's first
mortgage bonds and the indenture under which PSNH's first mortgage bonds have
been issued limit the amount of cash dividends and other distributions these
subsidiaries can make to NU out of their retained earnings. As of December
31, 1993, CL&P had $210.6 million, WMECO had $26.5 million and PSNH had $60.8
million of unrestricted retained earnings. PSNH's preferred stock provisions
also limit the amount of cash dividends and other distributions PSNH can make
to NU if after taking the dividend or other distribution into account, PSNH's
common stock equity is less than 25 percent of total capitalization. The
indenture under which NAEC's Series A Bonds have been issued also limits the
amount of cash dividends or distributions NAEC can make to NU to retained
earnings plus $10 million. At December 31, 1993, $48.7 million was available
to be paid under this provision.
PSNH's credit agreements prohibit PSNH from declaring or paying any cash
dividends or distributions on any of its capital stock, except for dividends
on the preferred stock, unless minimum interest coverage and common equity
ratio tests are satisfied.
Certain subsidiaries of NU established the Money Pool to provide a more
effective use of the cash resources of the System, and to reduce outside
short term borrowings. The Service Company administers the Money Pool as
agent for the participating companies. Short term borrowing needs of the
participating companies (except NU) are first met with available funds of
other member companies, including funds borrowed by NU from third parties.
NU may lend to, but not borrow from, the Money Pool. Investing and borrowing
subsidiaries receive or pay interest based on the average daily Federal Funds
rate, except that borrowings based on loans from NU bear interest at NU cost.
Funds may be withdrawn or repaid to the Money Pool at any time without prior
notice.
ELECTRIC OPERATIONS
DISTRIBUTION AND LOAD
The System operating companies own and operate a fully-integrated
electric utility business. The System operating companies' retail electric
service territories cover approximately 11,335 square miles (4,400 in CL&P's
service area, 5,445 in PSNH's service area and 1,490 in WMECO's service area)
and have an estimated total population of approximately 3.7 million (2.5
million in Connecticut, 780,000 in New Hampshire and 450,000 in
Massachusetts). The companies furnish retail electric service in 149, 198
and 59 cities and towns in Connecticut, New Hampshire and Massachusetts,
respectively. In December 1993, CL&P furnished retail electric service to
approximately 1.085 million customers in Connecticut, PSNH provided retail
electric service to approximately 397,000 customers in New Hampshire and
<PAGE>30
WMECO served approximately 193,000 retail electric customers in
Massachusetts. HWP serves approximately 25 customers in a portion of the
town of Holyoke, Massachusetts.
The following table shows the sources of 1993 electric revenues based on
categories of customers:
CL&P PSNH WMECO NAEC Total System
Residential........... 39% 35% 38% - 39%
Commercial............ 33 17 30 - 29
Industrial ........... 14 28 20 - 18
Wholesale* ........... 11 17 8 100% 11
Other ................ 3 3 4 - 3
____ ____ ____ ____ ____
Total ................ 100% 100% 100% 100% 100%
______________________
* Includes capacity sales.
NAEC's 1993 electric revenues were derived entirely from sales to PSNH
under the Seabrook Power Contract. See "Rates - Seabrook Power Contract" for
a discussion of the contract.
Through December 31, 1993, the all-time maximum demand on the System was
6,191 MW, which occurred on July 8, 1993. At the time of the peak, the
System's generating capacity, including capacity purchases, was 8,965 MW.
The System was also selling approximately 1,431 MW of capacity to other
utilities at that time.
In 1993, System energy requirements were met 62 percent by nuclear
units, nine percent by oil burning units, 10 percent by coal burning units,
three percent by hydroelectric units, two percent by natural gas burning
units and 14 percent by cogenerators and small power producers. By
comparison, in 1992 the System's energy requirements were met 48 percent by
nuclear units, 24 percent by oil burning units, 10 percent by coal burning
units, four percent by hydroelectric units, one percent by natural gas
burning units and 13 percent by cogenerators and small power producers. See
"Electric Operations-Generation and Transmission" for further information.
The actual changes in kWh sales for the last two years and the
forecasted sales growth estimates for the 10-year period 1993 through 2003,
in each case exclusive of bulk power sales, for the System, CL&P, PSNH and
WMECO are set forth below:
1993 over 1992 over Forecast 1993-2003
(under) 1992 (under) 1991 Compound Rate of Growth
System......... 10.9%(1) 15.3%(1) 1.4%
CL&P........... (0.3)% 0.2% 1.3%
PSNH........... 1.0% 1.1% 1.7%
WMECO....... 0.1% (1.6)% 1.1%
___________________
(1) The percent increase in System 1992 sales over 1991 sales and 1993
sales over 1992 sales is due to the inclusion of PSNH sales
beginning in June 1992.
<PAGE>31
In 1990, FERC required the reclassification of bulk power sales from
"purchased power" to "sales for resale" for the 1990 and later reporting
years. Bulk power sales are not included in the development of any long-term
forecasted growth rates. The actual changes in kWh sales for the last two
years, adjusted for bulk power sales (by adding back the bulk power sales),
for the System, CL&P, PSNH and WMECO are set forth below:
1993 over (under) 1992 1992 over (under) 1991
System ................... 11.8%(1) 19.7%(1)
CL&P ..................... 1.2% 3.3%
PSNH ..................... (9.3)% 6.7%
WMECO .................... 13.5% 9.9%
__________________
(1) System sales percentages reflect the inclusion of PSNH sales beginning
in June 1992.
Despite a warmer than normal summer that added to cooling requirements,
sales showed negligible growth in 1993. Widespread economic recovery
throughout the System's service territory did not occur in 1993, but there
were mixed pockets of regional economic growth aided by very favorable
interest rates. Curtailments in defense spending continue to affect the
Connecticut, New Hampshire and western Massachusetts economies, which are
heavily dependent on defense-related industries. Competition in various
forms may also adversely affect the projected growth rate of sales over the
next ten years. Where energy costs are a significant part of operating
expenses, business customers may turn to self-generation, switch fuel
sources, or relocate to other states and countries which have aggressive
programs to attract new businesses. For further information on the effect of
competition on sales growth rates, see "Marketing and Competition."
The forecasted load growth for the System as a whole is significantly
below historic rates in part because of forecasted savings from NU-sponsored
C&LM programs, which are designed to minimize operating expenses for System
customers and postpone the need for new capacity on the System. The
forecasted ten-year growth rate of System sales would be approximately
1.8 percent instead of 1.4 percent if the System did not pursue C&LM savings.
See "Resource Plans - Future Needs" for an estimate of the impact of C&LM
programs on the System's need for new generating resources and for
information about C&LM cost impacts and cost recovery. See "Rates -
Connecticut Retail Rates" and "Rates - Massachusetts Retail Rates" for
information about rate treatment of C&LM costs.
With the System's generating capacity of 8,268 MW as of January 1, 1994
(including the net of capacity sales to and purchases from other utilities,
and approximately 690 MW of capacity to be purchased from QFs and IPPs under
existing contracts and contracts under negotiation), the System expects to
meet its projected annual peak load growth of 1.3 percent reliably until at
least the year 2007.
The availability of new resources and reduced demand for electricity
have combined to place the System and most other New England electric
utilities in a surplus capacity situation. The principal resource changes
were Seabrook 1's commercial operation, the full operation of the second
phase of the Hydro-Quebec project, and increased availability of power from
QF and IPP projects. As a consequence, the competition from capacity-long
<PAGE>32
utilities as sellers and the loss of utilities that are no longer capacity-
short as buyers have adversely affected the System companies' efforts to sell
additional surplus capacity at the price levels that prevailed in the late
1980s. Taking into account projected load growth for the System and
committed capacity sales, but not taking into account future potential
capacity sales to other utilities that are not subject to firm commitments,
the System's surplus capacity is expected to be approximately 1,000 MW in
1994.
For further information on the effect of competition on sales of surplus
capacity, see "Competition and Marketing."
The System operating companies operate and dispatch their generation
as provided in the New England Power Pool (NEPOOL) Agreement. In 1993, the
peak demand on the NEPOOL system was 19,570 MW, which occurred in July, above
the 1992 peak load of 18,853 MW in January of that year. NEPOOL has projected
that there will be an increase in demand in 1994 and estimates that the
summer 1994 peak load could reach 19,800 MW. NEPOOL projects that sufficient
capacity will be available to meet this anticipated demand.
GENERATION AND TRANSMISSION
The System operating companies and most other New England utilities with
electric generating facilities are parties to the NEPOOL Agreement. Under
the NEPOOL Agreement, the region's generation and transmission facilities are
planned and operated as part of the regional New England bulk power system.
System transmission lines form part of the New England transmission system
linking System generating plants with one another and with the facilities of
other utilities in the northeastern United States and Canada. The generating
facilities of all NEPOOL participants are dispatched as a single system
through the New England Power Exchange, a central dispatch facility. The
NEPOOL Agreement provides for a determination of the generating capacity
responsibilities of participants and certain transmission rights and
responsibilities. Pool dispatch results in substantial purchases
and sales of electric energy by pool participants, including the System
companies, at prices determined in accordance with the NEPOOL Agreement.
The System operating companies, except PSNH, pool their electric
production costs and the costs of their principal transmission facilities
under the NUG&T agreement. In addition, a ten-year agreement between PSNH and
CL&P, WMECO and HWP provides for a sharing of the capability responsibility
savings and energy expense savings resulting from a single system dispatch.
In connection with NU's acquisition of PSNH, the System proposed a
comprehensive plan for opening up a transmission corridor between northern
and southern New England for use in "wheeling" power of other utilities. The
plan was designed to accomplish a level of access to transmission resources
of the PSNH and New England Electric System (NEES) systems that could
formerly be accomplished only after a series of multilateral negotiations.
The plan includes provisions to (i) make 452 MW of long term transmission
service available across the PSNH system from Maine to Massachusetts, Rhode
Island, Connecticut and Vermont at embedded cost rates, (ii) make 200 MW of
long term transmission service available by NEES for those utilities
requiring deliveries across NEES's system in order to make use of access to
the PSNH system, and (iii) construct new facilities as needed to expand the
corridor from Maine to Massachusetts, if the cost of expansion is supported
and if regulatory approvals for the expansion are received. Further, NU
committed to make access to the combined NU-PSNH transmission system
available for third-party wheeling transactions whenever capacity is
available, and to expand the system when expansion is feasible. The
<PAGE>33
principal constraints are that NU and PSNH have reserved a priority on the
use of their transmission systems to serve the reliability needs of their own
native load customers, and the commitment to expand would be subject to
obtaining all necessary approvals. This plan became effective in October
1992, subject to the outcome of a hearing ordered by FERC in this proceeding,
and the Commission's final decision in the compliance phase of the merger
proceeding discussed below. NU and NEES filed offers of settlement in this
proceeding in May and June 1993, respectively, and the Presiding
Administrative Law Judge certified both settlement offers to the Commission
in July 1993. The only contested issue was the refund and surcharge
provision that was included in both offers of settlement. The Commission has
not yet acted on these settlement offers.
These commitments, and the entire issue of access to the NU and PSNH
transmission systems by other utilities and non-utility generators, were the
subject of extensive controversy in New England. On January 29, 1992, FERC
issued a decision approving the acquisition and allowing NU and PSNH
customers to be held harmless if other utilities and non-utility generators
need to use the NU-PSNH transmission to buy or sell electricity. In
accordance with the January 29 decision, on April 23, 1992 and August 4,
1992, NU made compliance filings, including transmission tariffs implementing
the FERC's conditions. All tariffs have been accepted by FERC and were
effective as of the merger date. FERC has issued summary determinations
(without hearing) and NU has filed for rehearing of FERC's compliance tariff
order in an effort to reinstate the originally proposed rates. FERC has not
yet acted on NU's rehearing petition.
FERC's approval of NU's acquisition of PSNH was appealed to the United
States Court of Appeals for the First Circuit. On May 19, 1993, the First
Circuit Court affirmed FERC's decision approving the merger but remanded to
FERC one issue brought by NU related to FERC's ability to change the terms of
the Seabrook Power Contract. FERC filed for en banc (full court) review by
the First Circuit Court on the Seabrook Power Contract issue, which was
denied. No petitions for review were filed in the U.S. Supreme Court,
therefore, the First Circuit Court's decision is final. FERC has yet to
initiate any proceeding on the court's remand, which would address whether
FERC could modify the Seabrook Power Contract under a more stringent "public
interest standard."
On December 21, 1993, NU filed an appeal in the United States Court
of Appeals for the District of Columbia Circuit of a FERC order directing NU
to put itself on its own transmission tariffs in connection with all NU sales
of wholesale power. NU had committed, as part of the PSNH merger, to place
itself on its tariff when it was competing with other wholesale power
suppliers to make a sale in order to "level the playing field." In its
order, FERC expanded NU's merger commitment to include all transactions,
regardless of whether or not NU's competitors need to use the NU transmission
system.
The controversy about the terms on which wheeling transactions are to be
effected in New England has stimulated a series of negotiations among
utilities, regulators and non-utility generators, directed at the possible
development of new regional transmission arrangements. While an original
draft regional transmission arrangement was not supported by all parties,
there have been negotiations on a less comprehensive arrangement. Any
arrangement would be subject to approval by NEPOOL members and FERC.
HYDRO-QUEBEC
Along with other New England utility companies, CL&P, PSNH, WMECO and
<PAGE>34
HWP is each a participant in agreements to finance, construct, and operate
the United States portion of direct current transmission circuits between New
England and Quebec, Canada. The project was built in two phases, and now
provides 2,000 MW of rated transfer capacity with Canadian facilities
constructed and owned by Hydro-Quebec, a Canadian utility system. Phase 1,
which entered into commercial operation in 1986, initially provided 690 MW of
North-South transfer capacity. In Phase 2, the transmission line was
extended to a new converter station in eastern Massachusetts. Phase 2
entered into full operation in 1991. The actual transfers over the
interconnection to date have averaged in the 1,400 to 1,800 MW range.
The interconnection permits a reduction in oil consumption in New
England and has the potential to produce cost savings to customers through
the purchase of power from Hydro-Quebec's hydroelectric generating
facilities. The interconnection also reduces the level of reserves New
England utilities must carry to assure that pool reliability criteria are
met.
The System companies are obligated to pay 34.22 percent of the annual
costs of the Phase 1 facilities and 32.78 percent of the annual cost of the
Phase 2 facilities. They are entitled, on the basis of a composite of these
percentages, to use the capacity of the facilities for their own transactions
and to share in the savings from pool energy transactions with Hydro-Quebec.
The Phase 1 total project cost was $141 million and the Phase 2 total project
cost was approximately $495 million. Phase 2 was constructed and is owned
and operated by two companies in which NU has a 22.66 percent equity
ownership interest. As an equity participant, NU guarantees certain
obligations in connection with the debt financing of certain other
participants that have lower credit ratings, and it receives compensation for
such undertakings.
When the Phase 2 facilities became fully operational in 1991, a contract
covering the purchase by the New England utilities of 70 terawatthours of
energy from Hydro-Quebec over a period of approximately ten years came into
effect. While transactions under this contract are expected to constitute
the principal use of the interconnection during the 1990s, the
interconnection is also available for other energy transactions and for the
"banking" of energy in Canada during off-peak hours in New England, with
equivalent amounts of energy available to New England during peak hours.
FOSSIL FUELS
OIL
The System's residual oil-fired generation stations used approximately
5.89 million barrels of oil in 1993. The System obtained the majority of its
oil requirements in 1993 through contracts with three large, independent oil
companies. Those contracts allow for some spot purchases when market
conditions warrant, but spot purchases represented less than 15 percent of
the System's fuel oil purchases in 1993. The contracts expire annually or
biennially.
The average 1993 price paid for fuel oil used for electric generation
was approximately $14 per barrel, which was the same as the average 1992
price. No. 6 fuel oil prices were high during the first quarter of 1993 due
to increased demand and firm crude oil prices. Fuel oil prices declined
slightly during the second and third quarters, weakened in the fourth quarter
due to weak crude prices associated with OPEC over-production and then firmed
in the first quarter of 1994 due to severe weather in the Northeast. On
<PAGE>35
February 1, 1994, the weighted average price being paid for the System's fuel
oil had increased to $17 per barrel.
The System-wide fuel oil storage capacity is approximately 2.5 million
barrels. In 1993, inventories were maintained at levels between 40 - 60
percent of capacity. This inventory constitutes approximately 13 days of
full load operation.
GAS
Currently, three system generating units, PSNH's Newington unit, WMECO's
West Springfield Unit 3 and CL&P's Montville 5, can burn either residual oil
or natural gas as economics dictate. The System is currently in the process
of converting CL&P's Devon Units 7 & 8 into oil and gas dual-fuel generating
units. Devon Unit 8's boiler conversion, which gave it gas burning
capability, was completed in December 1993. Devon Unit 7's boiler conversion
is scheduled for completion during its upcoming April 1994 outage. The System
plans to have both units operational by the end of July 1994.
Annual gas consumption depends on factors such as oil prices, gas
prices and unit availability. In 1993, gas was used sparingly at the
System's dual-fuel units because of the attractiveness of oil prices relative
to those for natural gas. CL&P, PSNH and WMECO all have contracts with the
local gas distribution companies where the Montville, Newington and West
Springfield units are located, under which natural gas is made available by
those companies on an interruptible basis. While WMECO and PSNH meet all of
their gas supply needs for the West Springfield and Newington units through
purchases from the local gas distribution company, CL&P can supply its
Montville unit either by purchasing gas from the local gas distribution
company at a DPUC-approved rate or by purchasing gas directly from producers
or brokers and transporting that gas through the interstate pipeline system
and the local gas distribution system. In 1993, all of the gas burned at
Montville Unit 5 was purchased from a local gas distribution company. It is
expected that gas for the Devon units will be purchased directly from
producers or brokers on an interruptible basis and transported through the
interstate pipeline system and the local gas distribution company.
The System expects that interruptible natural gas will continue to be
available for its dual-fuel electric generating units and will continue to
supplement fuel oil requirements. The Iroquois Gas Transportation System,
which became fully operational in November 1992, is expected to increase New
England's gas supplies by at least 35 percent by November 1994. The
increased availability of gas may make the option of converting other oil-
burning electric generating units to gas on an interruptible dual-fuel basis
more attractive to the System.
COAL
Currently, coal is purchased for HWP's Mt. Tom Station and for PSNH's
Merrimack Units 1 and 2 and its coal-oil Schiller Units 4, 5 and 6. Mt. Tom
Station received approximately 314,000 tons of coal in 1993 at an average
delivered coal price of $ 43.40 per ton, which is down from the average 1992
coal price of $44.25 per ton. In 1993, HWP extended an existing contract
for the majority of the coal to be supplied to Mt. Tom Station. This contract
provides the System with assurance of coal supply and the flexibility to
purchase some coal on the spot market. In the future, the System will
evaluate whether to continue to purchase coal by contract or return to the
spot market.
<PAGE>36
The coal inventory for Mt. Tom Station varies between a minimum level of
30 days fuel and a maximum of approximately 100 days fuel. Typically, the
higher level is achieved in December, when deliveries are suspended for the
winter. The stockpile provides the plant's operating fuel until deliveries
are resumed in March. Because of changes in federal and state air quality
requirements, by 1995 HWP will need to change the kinds of coal that it
purchases for use at Mt. Tom Station. The potential impact of changing air
quality requirements on coal supplies is being evaluated, and HWP is testing
various types of coal to meet these requirements. See "Regulatory and
Environmental Matters - Environmental Regulation-Air Quality Requirements."
In December 1991, PSNH executed a contract for the purchase of up to 100
percent of the coal requirements for PSNH's Merrimack Units 1 and 2 through
December 31, 1993. This contract has been extended through December 31,
1994. Under this agreement, PSNH may also purchase coal on the spot market.
In 1993, Merrimack Station received approximately 1.1 million tons of coal.
The average delivered coal price in 1993 was $43.00 per ton. The coal
inventory at Merrimack Station varies between a minimum of 60 days and a
maximum of 90 days of fuel.
Schiller Units 4, 5 and 6, PSNH's dual-fuel coal and oil fired units,
are dispatched on the most economical fuel in accordance with the provisions
of the NEPOOL Agreement. Schiller Station consumed approximately 236,000
tons of coal in 1993 at an average delivered price of $39.40 per ton.
Schiller's 1993 coal requirements were fulfilled through three primary
contracts, pursuant to which 77 percent was provided by foreign suppliers and
the remaining 23 percent by a domestic supplier.
FOSSIL PLANT RETIREMENTS
In 1991, the System retired seven of the System's oldest, least used,
and most costly oil-fired steam generating units. In 1992, five oil-burning
combustion turbines were retired. The decision to retire these units
reflected both the surplus of generating capacity in New England and the
System's continuing efforts to reduce operation and maintenance costs. There
were no significant fossil plant retirements in 1993, but the System's plan
calls for deactivating, by the end of 1994 Montville Units 5 and 6, which
have a capacity of 82 MW and 410 MW, respectively. A final decision on the
future of these units will be made following the completion of further
economic evaluations and consideration of possible alternatives.
NUCLEAR GENERATION
GENERAL
The System companies have interests in seven operating nuclear units:
Millstone 1, 2 and 3, Seabrook 1 and three other units owned by regional
nuclear generating companies (the Yankee companies). System companies
operate the three Millstone units, Seabrook 1 and CY. The System companies
also have interests in the owned by the Yankee Atomic Electric Company
(Yankee Rowe), which was permanently removed from service in 1992.
CL&P and WMECO own 100 percent of Millstone 1 and 2 as tenants in
common. Their respective ownership interests are 81 percent and 19 percent.
CL&P, PSNH and WMECO have agreements with other New England
utilities covering their joint ownership as tenants in common of Millstone 3.
CL&P's ownership interest in the unit is 52.9330 percent (608 MW), PSNH's
ownership interest in the unit is 2.8475 percent (32.7 MW) and WMECO's
interest is 12.2385 percent (140.6 MW). NAEC and CL&P are parties to an
<PAGE>37
agreement, similar to the Millstone 3 agreements, with respect to their
35.98201 percent (413.8 MW) and 4.05985 percent (46.7 MW) interests,
respectively, in Seabrook. The agreements all provide for pro rata sharing
of the construction and operating costs and the electrical output of each
unit by the owners, as well as associated transmission costs.
CL&P, PSNH, WMECO and other New England electric utilities are the
stockholders of the Yankee companies. Each Yankee company owns a single
nuclear generating unit. The stockholder-sponsors of a Yankee company are
responsible for proportional shares of the operating costs of the Yankee
company and are entitled to proportional shares of the electrical output.
The relative rights and obligations with respect to the Yankee companies are
approximately proportional to the stockholders' percentage stock holdings,
but vary slightly to reflect arrangements under which non-stockholder
electric utilities have contractual rights to some of the output of
particular units. The Yankee companies and CL&P's, PSNH's and WMECO's stock
ownership percentages and approximate MW entitlements in each are set forth
below:
CL&P PSNH WMECO System
% MW % MW % MW % MW
Connecticut Yankee Atomic
Power Company (CYAPC) ...... 34.5 204 5.0 29 9.5 56 49.0 289
Maine Yankee Atomic Power
Company (MYAPC) ............ 12.0 95 5.0 39 3.0 24 20.0 158
Vermont Yankee Nuclear
Power Corporation (VYNPC)... 9.5 44 4.0 19 2.5 12 16.0 75
Yankee Atomic Electric
Company (YAEC)* ............ 24.5 - 7.0 - 7.0 - 38.5 -
_____________________________
* See "Yankee Units" for information about the permanent shutdown of the unit
owned and operated by YAEC.
CL&P, PSNH and WMECO are obligated to provide their percentages of any
additional equity capital necessary for the Yankee companies. CL&P, PSNH and
WMECO believe that the Yankee companies, excluding YAEC, will require
additional external financing in the next several years to finance
construction expenditures and nuclear fuel and for other purposes. Although
the ways in which each Yankee company will attempt to finance these
expenditures have not been determined, CL&P, PSNH and WMECO could be asked to
provide direct or indirect financial support for one or more Yankee
companies.
OPERATIONS
Capacity factor is a ratio that compares a unit's actual generating
output for a period with the unit's maximum potential output. In 1993, the
nuclear units in which the System companies have entitlements achieved an
actual composite (weighted by entitlement) capacity factor of 79.9 percent.
The five nuclear units operated by the System had a composite capacity factor
of 80.3 percent based on normal winter claimed capability. The average
capacity factor for operating nuclear units in the United States was 73.2
percent for January through September 1993 and 80.4 percent for the five
System nuclear units operated in 1993, in each case using the design
electrical rating method rather than normal winter claimed capability.
<PAGE>38
When the nuclear units in which they have interests are out of service,
CL&P, PSNH and WMECO need to generate and/or purchase replacement power.
Recovery of prudently incurred replacement power costs is permitted, with
limitations, through the GUAC for CL&P, through a retail fuel adjustment
clause for WMECO and through a comprehensive fuel and purchased power
adjustment clause (FPPAC) for PSNH. For the status of regulatory and legal
proceedings related to recovery of replacement power costs for the 1990-1993
period, see "Rates - Connecticut Retail Rates," "Rates-Massachusetts Retail
Rates" and "Rates - New Hampshire Retail Rates."
MILLSTONE UNITS
The 1993 overall performance of the three nuclear electric generating
units located at Millstone station and operated by the System was
substantially better than in 1992. For the twelve months ended December 31,
1993, the three units' composite capacity factor was 79.3 percent, compared
with a composite capacity factor of 53.1 percent for the twelve months ended
December 31, 1992 and 38.4 percent for the same period in 1991.
In 1993 Millstone 1 operated at a 92.4 percent capacity factor with no
extended outages. The unit began a planned refueling and maintenance outage
on January 15, 1994 that is expected to last seventy-one days. Major work
includes replacement of the main condenser tubes and installation of a new
low pressure turbine. These modifications are intended to reduce the number
of unplanned outages and improve the overall plant efficiency.
In 1993 Millstone 2 operated at a 82.5 percent capacity factor. On
January 13, 1993, the plant returned to service following a refueling outage
that commenced on May 29, 1992. During that outage, both steam generators
were replaced. The DPUC has opened a docket to review CL&P's performance in
replacing Millstone 2's steam generators. See "Rates-Connecticut Retail
Rates" for further information on the steam generator replacement docket. In
addition to several short outages during 1993, Millstone 2 was shut down for
two unplanned outages of significant duration. The first such outage began
on August 5, 1993, to replace a leaking primary system valve. That outage
lasted ten days. For more information on this outage, see "Electric
Operations - Nuclear Generation - Operations - NRC Regulation." The second
significant unplanned outage lasted twenty-six days, commencing on September
15, 1993, and was necessary to upgrade the motor-operated feedwater isolation
valves. Millstone 2 is scheduled to begin a refueling and maintenance outage
on July 30, 1994. The outage is currently planned for a 63-day duration.
Major work activities will include a reactor vessel in-service inspection,
erosion/corrosion piping inspections, motor-operated valve testing and
service water piping replacement.
In 1993 Millstone 3 operated at a 64.8 percent capacity factor. The
unit began a refueling and maintenance outage on July 31, 1993 and completed
it in 99 days. During the outage two significant issues were identified and
resolved. Each of these issues resulted in an outage extension beyond
original plans. The first issue required replacement of all four reactor
coolant pumps due to concerns over turning vane cap screw and locking cup
integrity. The second issue related to problems identified during inspection
and testing of the supplementary leak collection and release system (SLCRS)
and the auxiliary building ventilation system (ABVS), which provide secondary
protection against radiological releases to the atmosphere. For more
information on this issue, see "Electric Operations - Nuclear Generation -
Operations - NRC Regulation." Resolution of these problems necessitated
various modifications to these systems. No refueling or maintenance outages
are planned for Millstone 3 during 1994.
<PAGE>39
NUCLEAR PERFORMANCE IMPROVEMENT INITIATIVES
The System's nuclear organization is taking major steps to correct
identified performance weaknesses. For instance, on a 1992 to 1995
cumulative basis, NU anticipates total expenditures of approximately $2.3
billion for operation and maintenance and $440 million in capital
improvements for the five plants that it operates.
In addition, the comprehensive Performance Enhancement Program (PEP),
authorized in 1992, continues to be one of the major initiatives that the
nuclear organization is implementing to improve its overall performance. The
program, in conjunction with other actions to address the long-term
performance of the nuclear group, is designed to correct the root causes of
the declining performance trend noted in the early 1990's. The PEP is
organized into four major areas of activities, each focusing on a particular
aspect of nuclear operations. The areas are management practices, programs
and processes, performance assessments and functional programs. These areas
were established based on an internal self-assessment completed in 1992.
Detailed action plans have been prepared to address the specific activities.
At the end of 1992, six of the forty-two action plans were completed and
validated. An additional fourteen action plans were completed in 1993 and
are awaiting validation. Seven action plans are to be completed in
1994, leaving fifteen action plans to complete during the remainder of the
program. The 1993 PEP budget was $32.9 million.
The System also announced a major reorganization of its
Connecticut-based nuclear organization on November 8, 1993. The primary
focus was realignment of engineering services along unit lines. The changes
also included the appointment of a new senior vice president for Millstone
station, some management consolidation, and a reorganization of the nuclear
plant maintenance staff. See "Employees." In addition, most of the nuclear
support staff currently located in Berlin, Connecticut will be centralized at
the generating stations by the summer of 1994. To support these efforts, the
System is constructing a five-story office building at Millstone station.
This building will replace several temporary modular buildings and will house
most of the nuclear technical support staff that is now located at various
System locations. The prudence of this construction project is the subject
of an ongoing inquiry by the DPUC.
SEABROOK
In 1993 Seabrook 1 operated at a capacity factor of 89.8 percent. The
unit is currently in an 18-month operating cycle that began in November 1992.
The unit is scheduled to begin a 57-day refueling and maintenance outage on
April 16, 1994. During this outage, the main plant computer will be
replaced.
CL&P, PSNH and NAEC could be affected by the ability of other Seabrook
joint owners to fund their share of Seabrook costs. Great Bay Power
Corporation (GBPC), a former subsidiary of Eastern Utilities Associates and
owner of 12.13 percent of Seabrook, has been in bankruptcy since February
1991. The Bankruptcy Court confirmed GBPC's reorganization plan on March 5,
1993 and approvals are required from NRC, FERC and NHPUC to consummate the
plan. CL&P has committed to advance GBPC up to $12 million, secured by a
high priority lien on GBPC's share of Seabrook, to cover GBPC's shortfalls in
funding its share of the operation of Seabrook through June 30, 1994. As of
March 1, 1994, CL&P was lending approximately $2 million to GBPC under this
arrangement. GBPC has advised CL&P that it expects to consummate its
<PAGE>40
reorganization plan, emerge from bankruptcy and repay CL&P for all advances
by June 30, 1994. CL&P is unable to predict what impact, if any, failure of
the reorganization plan to become effective will have on the operating
license for Seabrook or what actions CL&P and the other joint owners of the
unit may be required to take.
On May 6, 1991, NHEC, PSNH's largest customer and one of the joint
owners of Seabrook, filed a petition for reorganization under Chapter 11 of
the Federal Bankruptcy Code. The plan of reorganization for NHEC was
confirmed by the United States Bankruptcy Court on March 20, 1992 and
wholesale power arrangements were accepted by FERC on July 22, 1992. On
October 5, 1992, the NHPUC released an order approving NHEC's plan of
reorganization. Under the plan of reorganization, NHEC will remain a
customer of PSNH. The plan also provides that PSNH will purchase the
capacity and energy of NHEC's 2.2 percent ownership interest in Seabrook 1
and pay all of NHEC's Seabrook costs for a ten-year period, which began July
1, 1990. On December 1, 1993, the United States Bankruptcy Court for the
District of New Hampshire declared the NHEC reorganization plan effective as
of that date. See "Rates--Wholesale Rates" for further information on the
bankruptcy and subsequent reorganization of NHEC.
At certain times, VEG&T failed to pay its share of Seabrook costs.
Certain joint owners, including PSNH and CL&P, provided funds against future
payments due from VEG&T to assure that funds were available to meet its
ownership share of Seabrook costs. PSNH initially participated in such
payments, but ceased providing such funds in January 1988, when it commenced
bankruptcy proceedings under Chapter 11 of the Bankruptcy Code. The total
amount contributed by PSNH until then was $976,000. The total amount
contributed by CL&P was $265,000.
As part of an agreement to resolve issues raised during the bankruptcy
of PSNH, PSNH agreed that it or its designee would purchase the VEG&T 0.41259
percent interest in Seabrook for approximately $6.4 million. NAEC, the
current owner of PSNH's ownership share in Seabrook, agreed to purchase the
interest and to enter into a separate power contract with PSNH, under which
PSNH would be obligated to buy from NAEC all of the capacity and output of
Seabrook attributable to such interest for a period equal to the
length of the NRC full power operating license for Seabrook. On January 7,
1994, the NRC approved the transfer of VEG&T's ownership share of Seabrook
to NAEC. All other regulatory approvals for NAEC's purchase were
received and the acquisition became effective on February 15, 1994. In
settlement of their claims against VEG&T for advances, PSNH and CL&P received
payment of the amounts advanced, $1.78 million and $390,000, respectively,
out of proceeds of the sale, with interest thereon, for the period each
advance was outstanding at the prime rate. See "Rates-New Hampshire Retail
Rates-Memorandum of Understanding" and "Rates-New Hampshire Retail
Rates-Seabrook Power Contract" for further information on NAEC's acquisition
of VEG&T's share of Seabrook.
In 1989, as part of a comprehensive settlement of Seabrook issues,
PSNH agreed to make certain payments totaling $16 million to Massachusetts
Municipal Wholesale Electric Company during the first eight years of Seabrook
operation. As of December 31, 1993, PSNH had made approximately $7.2 million
of these payments.
YANKEE UNITS
CY, the nuclear unit owned by MYAPC (MY) and the nuclear unit owned by
VYAPC (VY) operated in 1993 at capacity factors of 73.1 percent, 74.3 percent
and 74.1 percent, respectively, based on normal winter claimed capability.
<PAGE>41
Yankee Rowe has not operated since October 1991.
CY. As of December 31, 1993, CY, since it began commercial operation in
1968, had generated over 99 billion kWh (gross) of electricity, making it one
of the most productive nuclear generating units in the United States.
The unit completed, on schedule, a 66-day refueling and maintenance
outage that began on May 15, 1993. The second reload of fuel clad with
zircalloy was installed during this outage to replace the stainless steel
clad fuel. There is one more phase to this upgrade project that, when
completed, will make the operation of the reactor core more economical by
allowing longer operating cycles. CY's next refueling and maintenance outage
is scheduled to begin on November 12, 1994 and is expected to last 54 days.
Major work activities will include auxiliary feedwater system modifications
and motor-operated valve testing. The start date and length of this
refueling outage may be impacted by an unplanned shutdown which occurred on
February 12, 1994, when the plant was required to come off line to address
integrity concerns in the safety-related service water system. CYAPC is
reviewing the scope of work required and schedule for returning the unit to
service from the unplanned outage.
In October 1992, CYAPC filed an application with the FERC for wholesale
rate relief. CYAPC requested the increase to become effective on January 1,
1993. The filing requested an increase in estimated decommissioning cost
collections from $130 million to $309.1 million (in July 1992 dollars) and
also proposed to adjust decommissioning accruals automatically on an annual
basis beginning January 1, 1993. In December 1992, FERC accepted CYAPC's
increased rates for filing, to become effective on June 1, 1993, subject to
refund, and rejected the proposal to automatically adjust decommissioning
accruals. A settlement between all the parties was reached in 1992 and was
accepted by FERC in 1993. This included an accrual level for decommissioning
of $294.2 million in 1992 dollars and an automatic increase of 5.5% annually
in the decommissioning accrual for each of the next five years.
MY. MY began a refueling and maintenance outage on July 31, 1993 and
completed it in 75 days. During the outage, repairs were made to the reactor
vessel thermal shield.
VY. VY began a refueling and maintenance outage on August 27, 1993, and
completed it in 59 days, including recovery from a dropped fuel bundle that
suspended fuel movement for approximately 20 days.
Yankee Rowe. In February 1992, YAEC's owners voted to shut down Yankee
Rowe permanently and to begin preparations for an orderly decommissioning of
the facility. The decision to close the generating plant eight years before
the end of its operating license was based on an economic evaluation of the
cost of a proposed safety review, the reduced demand for electricity in New
England, the price of alternative energy sources and uncertainty about the
regulatory requirements that the unit would need to meet in order to restart.
See "Electric Operations-Nuclear Generation-Operations-Decommissioning" for
information on YAEC's filing with FERC to collect for shutdown and
decommissioning costs and the recovery of the remaining investment in the
Yankee Rowe plant.
The power contracts between CL&P, PSNH and WMECO and YAEC permit YAEC
to recover from each its proportional share of these costs from CL&P, PSNH
and WMECO. Management believes that, although Yankee Rowe was shut down
eight years before the end of the unit's current license, CL&P, PSNH and
<PAGE>42
WMECO will recover their investments in YAEC, along with any other costs
associated with the shutdown and decommissioning of Yankee Rowe. Accordingly,
the System has recognized these costs as a regulatory asset on its
consolidated balance sheet and as a corresponding obligation to YAEC.
NRC REGULATION
As holders of licenses to operate nuclear reactors, CL&P, PSNH, WMECO,
NAEC, North Atlantic, NNECO and the Yankee companies are subject to the
jurisdiction of the NRC. The NRC has broad jurisdiction over the design,
construction and operation of nuclear generating stations, including matters
of public health and safety, financial qualifications, antitrust
considerations and environmental impact.
In its latest Systematic Assessment of Licensee Performance Report (SALP
report) issued on October 19, 1993, the NRC gave the three Millstone nuclear
plants a Category 1 rating in the area of radiological controls and a
Category 2 rating in five of the seven areas rated: plant operations,
maintenance/surveillance, emergency preparedness, security and
engineering/technical support. The Millstone units received a Category 3
rating in the area of safety assessment/quality verification. Category 1
indicates "a superior level of performance," Category 2 indicates "a good
level of performance" and Category 3 denotes "an acceptable level of
performance." The evaluation covered plant activities for the period
February 16, 1992 through April 3, 1993. Management expects to continue to
improve performance, thereby raising these scores.
The NRC issued its latest SALP report for Seabrook 1 on November 18,
1993. The report covered the interval from March 1, 1992 through August 28,
1993. This report reflects the recent revisions to the SALP program in which
the number of functional evaluation areas has been reduced from seven to
four: plant operations, maintenance, engineering and plant support. The
evaluation rated Seabrook 1 a Category 1 in the engineering and plant support
areas. In the areas of plant operations and maintenance, the unit was rated
a Category 2.
The NRC issued its latest SALP report for CY on May 21, 1993. The
report covered the interval from July 14, 1991 through January 9, 1993. This
evaluation recognized the superior performance of CY by awarding the unit a
Category 1 in six of the seven areas rated: plant operations, emergency
preparedness, security, engineering/technical support, safety
assessment/quality verification and radiological controls. In the final
area, maintenance/surveillance, CY was rated as a Category 2.
Despite the overall improved performance of the Millstone units, there
were a number of regulatory enforcement actions taken by the NRC in 1993. On
May 4, 1993, the NRC issued to NNECO a Notice of Violation (NOV) identifying
two potential violations. The first violation concerned NRC findings that a
former employee was subjected to harassment and intimidation in 1989 for
raising a nuclear safety concern and that senior management was not effective
in dealing with the situation. The second violation involved NRC concerns
that an employee may have deliberately delayed the processing of a
contemplated substantial safety hazard evaluation conducted to fulfill the
requirements of federal law. Following NNECO's response to the NOV, the NRC
withdrew the second violation. To resolve this matter, NNECO paid a fine of
$100,000 in connection with the first violation.
On August 5, 1993, Millstone Unit 2 was shut down by plant personnel
after extensive efforts to repair a leaking primary system valve proved
<PAGE>43
unsuccessful, and a sudden increase in the leak rate was experienced.
Following replacement of the damaged valve, the unit was returned to service
on August 16, 1993. Recognizing the seriousness of this event and the
potentially severe consequences of the failed repair efforts, NNECO
performed a detailed evaluation of this event to consider potential
deficiencies and identify the actions needed to prevent recurrence. The NRC
also conducted a special investigation of this event and on September 22,
1993, identified to NNECO three apparent violations, related to work control
planning and implementation, which were being considered for escalated
enforcement. On December 3, 1993, the NRC informed NNECO that it was
imposing a civil penalty of $237,500 for the three violations. NNECO has
since paid the fine.
On September 10, 1993, NNECO was informed by the NRC that, as a result
of an investigation by the NRC Office of Investigation and a routine safety
inspection of the Millstone Unit 1 nuclear power plant, two apparent
violations arising from 1989 events were being considered for possible civil
monetary penalties. The first issue concerned the alleged failure to
initiate and perform a required engineering analysis to determine the
operability of safety-related system in a timely manner. The second issue
relates to allegations that the engineer who identified the system as being
potentially inoperable was harassed and discriminated against in retaliation
for the findings of his technical evaluations. These matters were
investigated between early 1992 and June 1993 by a grand jury acting under
the direction of the U.S. Attorney's Office in Bridgeport, Connecticut. The
U.S. Attorney's office issued a letter on June 30, 1993, stating that no
prosecutorial action would be initiated. On March 17, 1994, the NRC informed
NNECO that further enforcement action with respect to this matter was not
planned, because their review had determined that there was insufficient
evidence to support the apparent violations.
On September 20, 1993, the NRC issued to NNECO an NOV concerning two
violations at the Millstone Station identified during its evaluation of the
licensed operator requalification training (LORT) program. The first
violation concerned an inspection finding that various licensed operators at
Millstone 1 and 2 did not fully complete the LORT program for the 1991 and
1992 training periods. The second violation cited the failure of NNECO's
internal nuclear review board to perform comprehensive audits of the
training, retaining, requalification, and performance of the operations staff
at Millstone 2 and 3. NNECO chose not to contest the violations nor the
imposition of a $50,000 civil penalty.
On December 15, 1993, the NRC issued an inspection report concerning the
SLCRS and ABVS systems deficiencies that were identified during the 1993
Millstone 3 refueling outage. The report identified two apparent violations
that are being considered for escalated enforcement. The apparent violations
involve the inability of the systems to provide the necessary drawdown of
secondary containment following a postulated accident and NNECO's failure to
fully resolve these problems earlier, as a result of previous similar
violations identified in September 1992. On March 11, 1994, the NRC notified
NNECO that it proposed to impose a civil penalty of $50,000 in respect of
these violations. NNECO has 30 days to respond to the NRC.
In January 1994, the NRC issued a report finding that the overall
Millstone 1 operator requalification training program was satisfactory. The
NRC had previously found the program to be unsatisfactory. The recent
conclusion was based on the results of a number of NRC inspections and the
operator examinations conducted in September 1993. The NRC reviewed NNECO's
corrective actions and determined that all actions necessary to obtain and
maintain a satisfactory requalification training program had been completed
<PAGE>44
and verified.
INDUSTRY-WIDE NUCLEAR ISSUES
The NRC regularly conducts generic reviews of technical and other
issues, a number of which may affect the nuclear plants in which System
companies have interests. Issues currently under review include individual
plant examination programs to evaluate the likelihood and effects of severe
accidents at operating nuclear plants, pipe crack phenomena, post-accident
measures for controlling hydrogen, reactor vessel embrittlement, upgrading of
emergency response facilities and communications, the ability of plants to
cope with a total loss of power, emergency response planning, fitness for
duty policies, operator requalification training, reactor containment
suitability, maintenance adequacy, motor-operated valve testing, design basis
reconstitution, diesel generator reliability, life extension, equipment
procurement, electrical distribution system adequacy, reactor coolant pump
seal integrity, plant risk during shutdown and low power operation,
technical specification improvements, accident management, component aging,
steam generator degradation phenomena, service water system adequacy, seismic
qualification of equipment and other issues. At present, the outcome of the
NRC's reviews of these and other technical issues, and the ways in which the
different nuclear plants in which System companies have interests may be
affected, cannot be determined. The cost of complying with any new
requirements that may result from these reviews cannot be estimated at this
time, but such costs could be substantial. Further, the NRC is currently
evaluating a staff report on the reporting of nuclear safety concerns, which
may result in changes in the way such concerns are addressed. The NRC has
authorized the conduct of various regulatory activities designed to lower
costs to its licensees while maintaining or improving public safety.
Public controversy concerning nuclear power could affect the nuclear
units in which System companies have ownership interests. Over the past
decade, proposals to force the premature shutdown of nuclear units have
become issues of serious and recurring attention in Maine, Massachusetts,
Vermont and New Hampshire. States' efforts to deal with the siting of low
level radioactive waste repositories have also stimulated negative reactions
in communities being considered for those facilities. The continuing
controversy about nuclear power may affect the cost of operating the nuclear
units in which System companies have interests.
While much of the public policy debate about nuclear power has been
critical in the past, some trends in the energy environment have stimulated
renewed support for nuclear power in the northeastern United States. Among
these trends are the growing national environmental concerns and legislation
about acid rain, air quality and global warming associated with fossil fuels.
These concerns particularly affect the densely populated areas in the
Northeast, downwind of coal-burning regions like the Midwest and mid-Atlantic
states. In addition, at times when the price and availability of fuel oil
have been volatile, the System's commitment to nuclear power has allowed it
to minimize the oil-related rise in customers' bills. While the public
controversy about nuclear power is not expected to disappear, recent trends
suggest a more balanced public policy debate about the impacts of fossil fuel
generation as well.
NUCLEAR INSURANCE
The NRC's nuclear property insurance rule requires nuclear plant
licensees to obtain a minimum of $1.06 billion in insurance coverage. The
<PAGE>45
rule requires that, although such policies may provide traditional property
coverage, proceeds from the policy following an accident in which estimated
stabilization and decontamination expenses exceed $100 million will first be
applied to pay such expenses. The insurance carried by the licensees of
the Millstone units, Seabrook 1, CY, MY and VY meets the requirements of this
rule. YAEC has obtained an exemption for the Yankee Rowe plant from the
$1.06 billion requirement and currently carries $25 million of insurance that
otherwise meets the requirements of the rule.
The Price-Anderson Act currently limits public liability from a single
incident at a nuclear power plant to $9.4 billion. The first $200 million of
liability would be provided by purchasing the maximum amount of commercially
available insurance. Additional coverage of up to $8.8 billion would be
provided by an assessment of $75.5 million per incident, levied on each of
the 116 United States nuclear units that are currently subject to the
secondary financial protection program, subject to a maximum assessment of
$10 million per incident per nuclear unit in any year. In addition, if the
sum of all public liability claims and legal costs arising from any nuclear
incident exceeds the maximum amount of financial protection, each reactor
operator can be assessed an additional five percent, up to $3.8 million or
$437.9 million in total for all 116 reactors. The maximum assessment is to
be adjusted for inflation at least every five years.
Based on CL&P's, PSNH's and WMECO's ownership interests in the three
Millstone units and CL&P's and NAEC's interests in Seabrook 1, the System's
current maximum direct liability would be $244.2 million per incident. In
addition, through CL&P's, PSNH's and WMECO's power purchase contracts with
the four Yankee regional nuclear electric generating companies, the System
would be responsible for up to an additional $97.9 million per incident.
These payments would be limited to a maximum in any year of $43.2 million per
incident.
Insurance has been purchased from Nuclear Electric Insurance Limited
(NEIL) to cover: (1) certain extra costs incurred in obtaining replacement
power during prolonged accidental outages with respect to CL&P's and WMECO's
ownership interests in Millstone 1, 2, 3, and CY, CL&P's ownership interest
in Seabrook, and PSNH's Seabrook Power Contract with NAEC; and (2) the cost
of repair, replacement, or decontamination or premature decommissioning of
utility property resulting from insured occurrences with respect to CL&P's
ownership interests in Millstone 1, 2, 3, CY, MY, VY, and Seabrook 1; WMECO's
ownership interests in Millstone 1, 2, 3, CY, MY, and VY; PSNH's ownership
interest in Millstone 3, CY, MY and VY; and NAEC's ownership interest in
Seabrook 1. All companies insured with NEIL are subject to retroactive
assessments if losses exceed the accumulated funds available to NEIL. The
maximum potential assessments against CL&P, PSNH, WMECO, and NAEC with
respect to losses arising during current policy years are approximately $13.9
million under the replacement power policies and $29.9 million under the
property damage, decontamination, and decommissioning policies. Although
CL&P, PSNH, WMECO, and NAEC have purchased the limits of coverage currently
available from the conventional nuclear insurance pools, the cost of a
nuclear incident could exceed available insurance proceeds.
Insurance has been purchased from American Nuclear Insurers/Mutual
Atomic Energy Liability Underwriters, aggregating $200 million on an industry
basis, for coverage of worker claims. All companies insured under this
coverage are subject to retrospective assessments of $3.2 million per
reactor. The maximum potential assessments against CL&P, PSNH, WMECO, and
NAEC with respect to losses arising during the current policy period are
approximately $13.9 million.
<PAGE>46
CYAPC expects that it will receive an insurance recovery for costs
related to the CY thermal shield repair which occurred during the 1987
outage, and the removal which occurred during the 1989 outage, but the amount
and time of payment are not certain. See "Rates-Connecticut Retail
Rates-Adjustment Clauses."
NUCLEAR FUEL
The supply of nuclear fuel for the System's existing units requires the
procurement of uranium concentrates, followed by the conversion, enrichment
and fabrication of the uranium into fuel assemblies suitable for use in the
System's units. These materials and services are available from a number of
domestic and foreign sources. The System companies have predominantly relied
on long term contracts with both domestic and foreign suppliers, supplemented
with short term contracts and market purchases, to satisfy the units'
requirements. Although the System has increased the use of foreign
suppliers, domestic suppliers still provide the majority of the materials and
services. The System companies have maintained diversified sources of
supply, relying on no single source of supply for any one component of the
fuel cycle, with the exception of enrichment services of which the majority
of the System companies' requirements are provided under a long term
contract with the U.S. Enrichment Corporation, a wholly-owned government
corporation, established on July 1, 1993, in accordance with the Energy
Policy Act and the successor to the U.S. DOE Uranium Enrichment Enterprise.
The System expects that uranium concentrates and related services for the
units operated by the System and for the other units in which the System
companies are participating, that are not covered by existing contracts, will
be available for the foreseeable future on reasonable terms and
prices.
As a result of the Energy Policy Act, the U.S. utility industry is
required to pay to the DOE, via a special assessment for the costs of the
decontamination and decommissioning of uranium enrichment plants operated by
the DOE, $150 million each U.S. Government fiscal year for 15 years
beginning in 1993. Each domestic utility will make a payment proportioned on
its past purchases from the DOE's Uranium Enrichment Enterprise. Each year,
the DOE will adjust the annual assessment using the Consumer Price Index.
The Energy Policy Act provides that the assessments are to be treated as
reasonable and necessary current costs of fuel, which costs shall be fully
recoverable in rates in all jurisdictions. The System's total share of the
estimated assessment was approximately $56.7 million. Management believes
that the DOE assessments against CL&P, WMECO, PSNH and NAEC will be
recoverable in future rates. Accordingly, each of these companies has
recognized these costs as regulatory asset, with corresponding obligation on
its balance sheet.
Costs associated with nuclear plant operations include amounts for
disposal of nuclear wastes, including spent fuel, and for the ultimate
decommissioning of the plants. The System companies include in their nuclear
fuel expense spent fuel disposal costs accepted by the DPUC, the NHPUC and
the DPU in rate case or fuel adjustment decisions. Spent fuel disposal costs
are also reflected in wholesale charges. Such provisions include
amortization and recovery in rates of previously unrecovered disposal costs
of accumulated spent nuclear fuel.
HIGH-LEVEL RADIOACTIVE WASTES
Under the Nuclear Waste Policy Act of 1982, the DOE is required to
design, license, construct and operate a permanent repository for high level
<PAGE>47
radioactive wastes and spent nuclear fuel. The act requires the DOE to
provide, beginning in 1998, for the disposal of spent nuclear fuel and high
level radioactive waste from commercial nuclear plants through contracts with
the owners and generators of such waste. The System companies have entered
into such contracts with the DOE with respect to Millstone 1, 2 and 3 and
Seabrook 1, and have been advised that the Yankee companies have entered into
similar contracts.
The DOE has established disposal fees to be paid to the federal
government by electric utilities owning or operating nuclear generating
units. The System companies have been paying for such services for fuel
burned starting in April 1983 on a quarterly basis since July 1983 in
accordance with the contracts; the DPUC, the NHPUC and the DPU permit the fee
to be recovered through rates.
The disposal fee for fuel burned before April 1983 (previously burned
fuel) is determined in accordance with a fee structure based on fuel burnup.
Under the contract payment option selected, the System companies anticipate
making payment to the DOE for disposal of previously burned fuel just before
the first delivery of spent fuel to the DOE. That payment obligation is not
a funded obligation. The liability under the selected payment option for
previously burned fuel, including interest, through December 31, 1993, and
the amounts recovered through rates for previously burned fuel through the
end of 1993 for Millstone 1 and 2, are as follows:
Previously Burned Fuel Liability, Amounts Recovered for Previously
Including Interest, Thru 12/31/93 Burned Fuel Thru 12/31/93
(Millions)
CL&P $136.1 $134.5
WMECO 31.9 32.3
Total $168.0 $166.8
Because Millstone 3 and Seabrook 1 went into service after 1983, there
is no previously burned fuel liability for those units.
In return for payment of the fees prescribed by the Nuclear Waste Policy
Act, the federal government is to take title to and dispose of the utilities'
high level wastes and spent nuclear fuel beginning no later than 1998. Until
the federal government begins receiving such materials, operating nuclear
generating plants will need to retain high-level wastes and spent fuel on-site
or make some other provisions for their storage. With the addition of new
storage racks or through fuel consolidation, storage facilities for Millstone
3 and CY are expected to be adequate for the projected life of the units. With
the storage facilities for Millstone 1 and 2 are expected to be adequate
(maintaining the capacity to accommodate a full-core discharge from the reactor)
until 2000. Fuel consolidation, which has been licensed for Millstone 2, could
provide adequate storage capability for the projected lives of Millstone 1 and
2. In addition, other licensed technologies, such as dry storage casks or
on-site transfers, are being considered to accommodate spent fuel storage
requirements. With the addition of new racks, Seabrook 1 is expected to have
spent fuel storage capacity until at least 2010.
Under the terms of a license amendment approved by the NRC in 1984, MY's
present storage capacity of the spent fuel pool at the unit will be reached
in 1999, and after 1996 the available capacity of the pool will not
accommodate a full-core removal. After consideration of available
technologies, MYAPC elected to provide additional capacity by replacing the
fuel racks in the spent fuel pool at the unit and, on January 25, 1993, filed
with the NRC seeking authorization to implement the plan. MYAPC believes
<PAGE>48
that the replacement of the fuel racks, if approved, will provide adequate
storage capacity through the unit's licensed operating life. While no
intervention has occurred, MYAPC cannot predict with certainty whether the
NRC authorization will be granted or whether or to what extent the storage
capacity limitation at the unit will affect the operation of the unit or the
future cost of disposal.
Under the terms of a license amendment approved by the NRC in 1991, the
storage capacity of the spent fuel pool at VY is expected to be reached in
2003, and the available capacity of the pool is not expected to be able to
accommodate a full-core removal after 1998.
Because the Yankee Rowe plant was permanently shut down effective
February 26, 1992, YAEC is planning to construct a temporary facility to
store the spent nuclear fuel produced by the Yankee Rowe plant over its
operating lifetime until that fuel is removed by the DOE. See "Electric
Operations - Nuclear Generation - Decommissioning" for further information on
the closing and decommissioning of Yankee Rowe.
LOW-LEVEL RADIOACTIVE WASTES
Disposal costs for low-level radioactive wastes (LLRW) have continued to
rise in recent years despite significant reductions in volume. Approximately
$7.65 million was spent on LLRW disposal for the Millstone units and CY in
1993.
In accordance with the provisions of the federal Low-Level Radioactive
Waste Policy Act of 1980, as amended (the Waste Policy Act), on December 31,
1992 the disposal site at Beatty, Nevada closed, and the Richland, Washington
facility closed to disposal of LLRW from outside its compact region. During
1992, the Barnwell, South Carolina site announced its intention to remain
open for disposal of out-of-region LLRW until June 30, 1994. In November
1992, the Northeast Compact commission entered into an agreement with the
Southeast Interstate Low-Level Radioactive Waste Management Compact (the
Southeast Compact) commission providing for continued access to the Barnwell
facility until June 30, 1994 by Connecticut LLRW generators, and the System
agreed to pay, in addition to disposal fees, an access fee of $220 per cubic
foot, with a minimum of $4.73 million, for the right to dispose of LLRW at
Barnwell during this period.
The Connecticut Hazardous Waste Management Service (the Service), a
state quasi-public corporation, is charged with coordinating the
establishment of a facility for disposal of LLRW originating in Connecticut.
In June 1991, the Service announced that it had selected three potential
sites in north-central Connecticut for further study. The Service's
announcement provoked intense controversy in the affected municipalities and
resulted in legislative action to stop the selection process. On February 1,
1993, the Service presented the legislature with a new site selection plan
under which communities are urged to volunteer a site for a facility in
return for financial and other incentives. The volunteer process is being
continued in 1994. The Service's activities in this regard are funded by
assessments on Connecticut's LLRW generators. The System was assessed
approximately $1.8 million for the state's 1992-1993 fiscal year. Due to the
change to a volunteer process, there was no assessment for the 1993-1994
fiscal year and the state projects no assessment for the 1994-1995 and
1995-1996 fiscal years.
<PAGE>49
The System has plans to acquire or construct additional LLRW storage
capacity at the Millstone and CY sites to provide for temporary storage of
LLRW should that become necessary. The System can manage its Connecticut
LLRW by volume reduction, storage or shipment at least through 1999.
Management cannot predict whether and when a disposal site will be designated
in Connecticut.
Since January 1, 1989, the State of New Hampshire has been barred from
shipping Seabrook LLRW to the operating disposal facilities in South
Carolina, Nevada and Washington for failure to meet the milestones required
by the Waste Policy Act. Seabrook 1 has never shipped LLRW but has capacity
to store at least five years' worth of the LLRW generated on-site, with the
capability to expand this on-site capacity if necessary. The Seabrook
station accrued approximately $1.3 million in off-site disposal costs in
1993. New Hampshire is pursuing options for out-of-state disposal of LLRW
generated at Seabrook.
Massachusetts and Vermont have arranged for continued access to the
Barnwell facility until mid-1994 for the nuclear waste generators in their
states. YAEC is currently disposing of its LLRW at the Barnwell facility.
MY has been storing its LLRW on-site since January 1993. VY and MY each has
on-site storage capacity for at least five years' production of LLRW from its
respective plants. Maine and Vermont are in the process of finalizing an
agreement with the state of Texas to provide access to a facility that will
be developed in that state.
DECOMMISSIONING
The System's most recent comprehensive site-specific updates of the
decommissioning costs for each of the three Millstone units were completed in
1992 and for Seabrook was completed in 1991. The recommended decommissioning
method reflected in the cost estimates continues to be immediate and complete
dismantlement of those units at their retirement. The table below sets forth
the estimated Millstone and Seabrook decommissioning costs for the System
companies. The estimates are based on the latest site studies, escalated to
December 31, 1993 dollars, and include costs allocable to NAEC's share of
Seabrook recently acquired from VEG&T.
CL&P PSNH WMECO NAEC NU System
(Millions)
Millstone 1 $312.5 $ - $ 73.3 $ - $385.8
Millstone 2 251.0 - 58.9 - $309.9
Millstone 3 223.0 12.0 51.6 - 286.6
Seabrook 1 14.9 - - 131.7 146.6
Total $801.4 $12.0 $183.8 $131.7 $1,128.9
Pursuant to Connecticut law, CL&P has periodically filed plans with the
DPUC for financing the decommissioning of the three Millstone units. In
1986, the DPUC approved the establishment of separate external trusts for the
currently tax-deductible portions of decommissioning expense accruals for
Millstone 1 and 2 and for all expense accruals for Millstone 3. In its 1993
CL&P multi-year rate case decision, the DPUC allowed CL&P's full
decommissioning estimate for the three Millstone units to be collected from
customers. This estimate includes an approximately 16 percent contingency
factor for each unit. The estimated aggregate cost of decommissioning the
Millstone units is $1.1 billion in December 1993 dollars.
WMECO has established independent trusts to hold all decommissioning
expense collections from customers. In its 1990 WMECO multi-year rate case
decision, the DPU allowed WMECO's decommissioning estimate for the three
<PAGE>50
Millstone units ($840 million in December 1990 dollars) to be collected from
customers. Due to the settlement in the 1992 WMECO rate case, the aggregate
decommissioning estimate for the three Millstone units remains unchanged.
The decommissioning cost estimates for the Millstone units are reviewed
and updated regularly to reflect inflation and changes in decommissioning
requirements and technology. Changes in requirements or technology, or
adoption of a decommissioning method other than immediate dismantlement,
could change these estimates. CL&P, PSNH and WMECO attempt to recover
sufficient amounts through their allowed rates to cover their expected
decommissioning costs. Only the portion of currently estimated total
decommissioning costs that has been accepted by regulatory agencies is
reflected in rates of the System companies. Although allowances for
decommissioning have increased significantly in recent years, ratepayers in
future years will need to increase their payments to offset the effects of
any insufficient rate recoveries in previous years.
New Hampshire enacted a law in 1981 requiring the creation of a
state-managed fund to finance decommissioning of any units in that state. In
1992, the New Hampshire Nuclear Decommissioning Financing Committee (NDFC)
established approximately $323 million (in 1991 dollars) as the
decommissioning cost estimate for immediate and complete dismantlement of
Seabrook 1 upon its retirement. On March 10, 1993, FERC approved this
estimate. The estimated total decommissioning cost for Seabrook 1 is $366
million in December 1993 dollars.
The NHPUC is authorized to permit the utilities subject to its
jurisdiction that own an interest in Seabrook 1 to recover from their
customers on a per-kilowatt-hour basis amounts paid into the decommissioning
fund over a period of years. NAEC's costs for decommissioning are billed by
it to PSNH and recovered by PSNH under the Rate Agreement. Under the Rate
Agreement, PSNH is entitled to a base rate increase to recover increased
decommissioning costs. See "Rates - New Hampshire Retail Rates" for further
information on the Rate Agreement.
North Atlantic submitted its annual update of the 1991 Decommissioning
Study and Funding Schedule to the NDFC on March 31, 1993. It included an
updated estimate for the prompt removal and dismantling of Seabrook station
in 2026 at the end of licensed life and a review of the assumptions on
inflation and rate-of-return on fund investments used to develop the joint
owner contribution schedule. North Atlantic concluded that the 1991
estimate, escalated in accordance with these assumptions to 1993 dollars, is
still valid. Although a schedule has not been set by the NDFC, public
hearings on the decommissioning estimate and funding schedule will probably
be held in the third quarter of 1994.
The new Investment Guidelines for the Seabrook Nuclear Decommissioning
Financing Fund, which were approved by the New Hampshire State Treasurer and
would have gone into effect on November 1, 1993, have been put on hold by a
recent decision of FERC. The October 20, 1993 FERC order effectively
reinstated the so-called "black lung" investment restrictions on
decommissioning funds subject to its jurisdiction, although Congress, in the
Energy Policy Act, had repealed the IRS regulation which mandated them.
Under these restrictions, investments are limited to public debt securities
that are fully backed by the U.S. government, tax exempt obligations of state
or local governments and time deposits with a bank or insured credit union.
The new guidelines would allow equity holdings by the joint owners of
Seabrook, beginning with a limit of 10 percent in 1994 and gradually
increasing to a limit of 40 percent in 1997. The strategies also call for a
gradual reduction in the equity position as the plant approaches the end of
<PAGE>51
its licensed life. Implementation of new investment guidelines for the
Millstone units and CY have also been delayed because of the FERC decision.
The System is party to petitions filed with FERC in November 1993, seeking
reconsideration of the FERC decision.
As of December 31, 1993, the balances (at cost) in the external
decommissioning trust funds were as follows:
Millstone 1 Millstone 2 Millstone 3 Seabrook 1
(Millions of Dollars)
CL&P........... $70.4 $45.5 $30.9 $ .9
PSNH........... * * 1.5 *
WMECO.......... 24.0 16.5 8.6 *
NAEC........... * * * 7.9
_____ _____ _____ ____
Total........ $94.4 $62.0 $41.0 $8.8
*PSNH has no ownership interest in the Millstone 1 and 2 units. WMECO
has no ownership interest in Seabrook 1. NAEC's only ownership interest
is in Seabrook 1.
YAEC, MYAPC, VYNPC and CYAPC are all collecting revenues for
decommissioning from their power purchasers. The table below sets forth the
estimated decommissioning costs of the Yankee units for the System companies.
The estimates are based on the latest site studies, escalated to December 31,
1993 dollars. For information on the equity ownership of the System
companies in each of the Yankee units, see "Electric Operations - Nuclear
Generation - General."
CL&P PSNH WMECO NU System
(Millions)
CY $117.3 $17.0 $32.3 $166.6
MY 38.8 16.2 9.7 64.7
VY * * * *
Yankee Rowe 68.7 19.6 19.6 107.9
______ _____ _____ ______
Total $255.3 $65.6 $69.6 $390.5
*VYNPC is currently reestimating the cost of decommissioning VY. Based
on recent estimates for comparable units, the projected cost is expected to
fall into the $300 - $350 million range. The System's share of these
costs is expected to be between $48 million and $56 million. The results of
the VYNPC study are expected to be available in the spring of 1994.
In June 1992, YAEC filed a rate filing to obtain FERC authorization for
an increase in rates to cover the costs of closing and decommissioning the
Yankee Rowe plant and for the recovery of the remaining investment in the
unit over the remaining period of its NRC operating license. At December 31,
1993, the System's share of these estimated costs was approximately $132.8
million. A settlement agreement among YAEC, the FERC staff and intervenors
to the FERC proceeding addressing all issues has been filed with and accepted
by FERC. YAEC has submitted its decommissioning plan to the NRC for
approval.
Due to the unexpected continued availability of the low level waste
disposal facility in Barnwell, South Carolina, YAEC requested NRC permission
to use decommissioning funds prior to final NRC approval of the complete
<PAGE>52
plan. On April 16, 1993, the NRC approved YAEC's request to use funds for
removal of the steam generators, pressurizer and reactor internals. By
December 31, 1993, all major components were successfully disposed of at
Barnwell and only a small number of internals shipments remain to be made.
YAEC will continue its dismantling of the plant in 1994. The NRC's
review of the decommissioning plan is expected to be completed by December
31, 1994 at which time YAEC will, depending upon the availability of a low
level waste site, move to completely dismantle the facility.
CYAPC accrues decommissioning costs on the basis of immediate
dismantlement at retirement. The most current estimated decommissioning
cost, based on a 1992 study, is approximately $339.9 million in year-end 1993
dollars. As a result of a 1987 study approved by FERC, CYAPC has been
accruing expenses based on an estimated decommissioning level of $130
million. On October 30, 1992, CYAPC filed with FERC a proposed change in
rates to recover the increase in estimated decommissioning costs. On May 11,
1993, FERC approved a settlement agreement allowing a decommissioning
estimate of $294.2 million (in July 1992 dollars) to be recovered in rates
effective June 1, 1993. See "Electric Operations - Nuclear Generation -
Operations - Yankee Units."
In 1984, CYAPC established an independent irrevocable decommissioning
trust fund, which was modified for tax purposes in 1987 to create two trusts.
Each month, CYAPC's sponsors are billed for their proportionate share of
decommissioning expense as allowed by FERC and payments are made directly to
the trust. The combined balance of the trusts at December 31, 1993 was
$137.8 million. The trust balances must be used exclusively to discharge
decommissioning costs as incurred.
MYAPC estimates the cost of decommissioning MY at $323.7 million in
December 31, 1993 dollars based on a study completed in July 1993.
NON-UTILITY BUSINESSES
GENERAL
In addition to its core electric utility businesses in Connecticut, New
Hampshire and Massachusetts, in recent years the System has begun a
diversification of its business activities into two energy-related fields:
private power development and energy management services.
PRIVATE POWER DEVELOPMENT
In 1988, NU organized a new subsidiary corporation, Charter Oak, through
which the System participates as a developer and investor in domestic and
international private power projects. With the passage of the Energy Policy
Act, Charter Oak can invest in cogeneration and small power production (SPP)
facilities anywhere in the world. This legislation also expands Charter
Oak's permissible involvement in exempt wholesale generators (EWGs) to
include development, construction and ownership. Management currently does
not permit Charter Oak to invest in facilities which are located within the
System service territory or to sell its electric output to any of the System
electric utility companies. For a discussion of certain highlights of the
Energy Policy Act relating to EWGs, see "Regulatory and Environmental Matters
- - Public Utility Regulation."
<PAGE>53
Under the Public Utility Regulatory Policies Act of 1978 (PURPA), as a
subsidiary of an electric utility holding company, Charter Oak is effectively
limited to no more than 50 percent ownership in a QF within the United
States. To work within this constraint, Charter Oak has made strategic
alliances with several experienced developers to pursue development
opportunities. Through these relationships, Charter Oak is pursuing
development opportunities nationwide and internationally.
Although Charter Oak has no full-time employees, eight NUSCO employees
are dedicated to Charter Oak activities on a full-time basis. Other NUSCO
employees provide services as required.
Charter Oak owns, through a wholly-owned special purpose subsidiary, a
ten percent equity interest in a 220 MW natural gas-fired combined cycle
cogeneration QF in Texas which provides steam to Campbell Soup Company's
Paris, Texas manufacturing facility and electricity to Texas Utilities
Electric Company. Charter Oak also owns 56 MW of the 1,875 MW Teesside
natural gas-fired cogeneration facility in the United Kingdom. Charter Oak
is pursuing other project development opportunities in both the domestic and
international markets with a combined capacity over 1,000 MW. Charter Oak is
currently participating in the development stage of projects in Texas, the
West Coast, the Midwest, Latin America and the Pacific Rim.
NU's total investment in Charter Oak was approximately $23.0 million as
of December 31, 1993. NU, Charter Oak and its subsidiary, Charter Oak Energy
Development, have received approval from the SEC to increase NU's authorized
investment in Charter Oak to up to $100 million and to increase Charter Oak's
authorized investment in COE Development to up to $100 million for
preliminary development activities in QFs, IPPs, EWGs and foreign utility
companies.
ENERGY MANAGEMENT SERVICES
In 1990, NU organized a new subsidiary corporation, HEC, which acquired
substantially all of the assets and personnel of an existing, non-affiliated
energy management services company. In general, the energy management
services that HEC provides are performed for customers pursuant to contracts
to reduce the customers' overall energy consumption and reduce energy costs
and/or conserve energy resources. HEC also provides demand side management
consulting services to utilities. HEC's energy management and consulting
services are directed primarily to the commercial, industrial and
institutional markets and utilities in New England and New York, although the
SEC's order under the 1935 Act that authorized NU to operate HEC also permits
HEC to serve customers outside that area, so long as over half of its
revenues are attributable to customers in New England and New York.
NU's initial equity investment in HEC was approximately $4 million and
NU has made additional capital contributions of approximately $300,000
through March 1, 1994. Under the SEC order authorizing HEC's participation
in the Money Pool, HEC may borrow up to $11 million from the Money Pool. At
December 31, 1993, HEC had $2.9 million outstanding from its borrowings from
the Money Pool.
<PAGE>54
REGULATORY AND ENVIRONMENTAL MATTERS
PUBLIC UTILITY REGULATION
NU is registered with the SEC as an electric utility holding company
under the 1935 Act. Under the 1935 Act, the SEC has jurisdiction over NU and
its subsidiaries with respect to, among other things, securities issues,
sales and acquisitions of securities and utility assets, intercompany loans,
services performed by and for associated companies, accounts and records,
involvement in non-utility operations and dividends.
The Energy Policy Act amended the 1935 Act to give registered holding
companies, like NU, broadened authority to invest in small power production
facilities qualifying under PURPA and to own a new class of IPPs known as
EWGs. An EWG is an entity exclusively in the business of owning and/or
operating generating facilities that sell electricity at wholesale. EWGs are
exempt from most regulation under the 1935 Act. A registered holding company
may also invest in foreign utility companies with SEC approval. EWGs,
however, are subject to state regulation with respect to siting and financial
regulation to prevent cross-subsidies and self-dealing among utilities and
affiliated EWGs.
The Energy Policy Act also amended the Federal Power Act to authorize
FERC to order wholesale transmission wheeling services, including the
enlargement of transmission capacity necessary to provide such services,
unless such transmission would unreasonably impair the reliability of the
electric systems affected or the utility ordered to provide transmission is
unable to obtain necessary governmental approvals or property rights. Rates
for transmission ordered under the Energy Policy Act are to be designed to
protect the wheeling utilities' existing customers. FERC's authority to
order wheeling does not extend to retail wheeling, and FERC may not issue a
wheeling order that is inconsistent with state franchise laws.
CL&P is subject to regulation by the DPUC, which has jurisdiction over,
among other things, retail rates, accounting procedures, certain dispositions
of property and plant, mergers and consolidations, securities issues,
standards of service, management efficiency and construction and operation of
generation, transmission and distribution facilities. Because of their
ownership interests in the Millstone units, PSNH and WMECO are also subject
to the jurisdiction of the DPUC with respect to their activities in
Connecticut and their securities issues.
PSNH and NAEC are subject to regulation by the NHPUC, which has
jurisdiction over retail rates, accounting procedures, certain dispositions
of property and plant, quality of service, securities issues, acquisitions of
securities of other utilities, mortgages of property, declaration of
dividends, contracts with affiliates, management efficiency, construction and
operation of generation, transmission and distribution facilities, integrated
resource planning and other matters. Although the Seabrook Power Contract
between PSNH and NAEC is a wholesale contract subject to the jurisdiction of
FERC, pursuant to the terms of the Rate Agreement, the NHPUC has the right to
review the prudence of costs incurred by NAEC to determine whether they
should be passed on to ratepayers through FPPAC, and the NHPUC and the State
of New Hampshire have additional rights and limited jurisdiction over certain
other Seabrook Power Contract issues.
NU and its subsidiaries are subject to the general supervision of the
NHPUC with respect to all dealings with PSNH and NAEC. Based upon PSNH's
ownership of generating and transmission facilities in Maine and transmission
<PAGE>55
and hydroelectric facilities in Vermont, PSNH is also subject to limited
regulatory jurisdiction in those states.
WMECO is subject to regulation by the DPU, which has jurisdiction over
retail rates, accounting procedures, quality of service, contracts for the
purchase of electricity, mergers, securities issues and other matters. The
DPU has adopted regulations that provide for DPU preapproval of utility plant
construction, procurement of non-utility generation (QFs and IPPs), and C&LM
programs. HWP is subject to regulation by the DPU with respect to certain
contracts and quality of service. NU and its subsidiaries are subject to the
general supervision of the DPU with respect to all dealings with WMECO and
HWP.
CL&P is subject to the jurisdiction of the NHPUC for limited purposes in
connection with its ownership interest in Seabrook.
CL&P, PSNH, WMECO, NAEC and HWP are public utilities under Part II of
the Federal Power Act and are subject to regulation by the FERC with respect
to, among other things, interconnection and coordination of facilities,
wholesale rates and accounting procedures.
The System incurs substantial capital expenditures and operating
expenses to identify and comply with environmental, energy, licensing and
other regulatory requirements, including those described in the following
subsections, and it expects to incur additional costs to satisfy further
requirements in these and other areas of regulation. Because of the
continually changing nature of regulations affecting the System, the total
amount of these costs is not determinable.
The System has active auditing programs addressing a variety of legal
and regulatory areas, including an environmental auditing program. To the
extent it is determined that a System operation or facility is not in full
compliance with applicable environmental or other laws or regulations, the
System attempts to resolve non-compliance through the auditing response
process or other management processes. Compliance with existing and proposed
regulations also affects the time needed to complete new facilities or to
modify present facilities, and it affects System companies' rates, sales,
revenues and net income, all in ways that may be substantial but are not
readily calculable.
NRC NUCLEAR PLANT LICENSING
The operators of the Millstone 1, 2 and 3 units, the CY, MY and VY
and Seabrook 1 all have full term full power operating licenses from the NRC.
The following table sets forth the current license expiration dates for each
unit:
Operating License
Unit Expiration Date (*)
Millstone 1 October 6, 2010
Millstone 2 July 31, 2015
Millstone 3 November 25, 2025
Seabrook 1 October 17, 2026
CY June 29, 2007
MY October 21, 2008
VY March 21, 2012
_________________________
(*) For all units except Seabrook 1 and MY, the current operating
<PAGE>56
license expires 40 years from the date the operating licensee was issued.
The Seabrook license expires 40 years from the date on which the NRC issued a
license for the unit to load nuclear fuel, which was about 3 1/2 years before
the full power operating license was issued. MY's operating license expires
40 years from the date the construction license was issued, which was about
four years before the operating license was issued. The System will
determine at the appropriate time whether to seek to recapture these periods
and add them to the operating license terms for those units.
YAEC had been working with the NRC on a preliminary analysis to extend
the license expiration date for Yankee Rowe from 2000 to 2020, but that
effort was suspended when the unit was shut down for evaluation. YAEC
received a "possession only" license from the NRC in August 1992. See
"Electric Operations - Nuclear Generation - Operations - Yankee Units" for
further information on the decision to shut down the Yankee Rowe unit
permanently.
Currently the NRC issues 40-year operating licenses to nuclear units. In
December 1991, the NRC issued a final rule that establishes the requirements
that must be met by an applicant for renewal of a nuclear power plant
operating license, the information that must be submitted to the NRC for
review, so that the agency can determine whether those requirements have in
fact been met, and the application procedures that must be used to obtain an
extension of a nuclear plant operating license beyond 40 years. A renewal
license may be granted for not more than 20 years beyond the current licensed
life. The licensing requirements for a nuclear plant during the renewal term
will consist of the plant's current licensing requirements and new
commitments to monitor, manage, and correct age-related degradation of plant
systems, structures, and components that is unique to the license renewal
term but will not encompass the higher licensing standards imposed on new
plants. An opportunity for a formal public hearing is provided to permit
interested persons to raise contentions on the adequacy of the renewal
applicant's proposals to address age-related degradation and compliance with
applicable requirements relating to an environmental impact statement. The
NRC rule was challenged on antitrust grounds and upheld in the District of
Columbia Court of Appeals.
ENVIRONMENTAL REGULATION
GENERAL
The National Environmental Policy Act (NEPA) requires that detailed
statements of the environmental effects of major federal actions be prepared
by federal agencies. Major federal actions can include licenses or permits
issued to the System by FERC, NRC and other federal agencies for construction
or operation of generation and transmission facilities. NEPA requires that
federal licensing agencies make an independent evaluation of the alternatives
and environmental impacts of the proposed actions.
Under Connecticut law, major generation or transmission facilities may
not be constructed or significantly modified without a certificate of
environmental compatibility and public need from the Connecticut Siting
Council (CSC). After public hearings, CSC may issue the certificate, which
addresses the public need for the facility and probable environmental impact
of the facility and may impose specific conditions for protection of the
environment.
In New Hampshire, construction of major new generation or transmission
facilities, or sizeable additions to existing facilities, requires a
<PAGE>57
certificate of site and facility from the New Hampshire Site Evaluation
Committee (NHSEC) and NHPUC under the state's energy facility siting law. In
addition to review by all state agencies having jurisdiction over any aspect
of the construction or operation of the proposed facility, the law requires
full review by NHSEC of the environmental impact of the proposed site or
route after allowing for public comment and conducting public hearings.
Issuance of a certificate requires, among other findings, a finding that the
proposed site and facility will not have an unreasonable adverse effect on
environmental values.
Massachusetts law requires all state agencies to determine the
environmental impact of any projects proposed by private companies requiring
state permits, or involving state funding or participation. Massachusetts
state agencies are required to make a finding that all feasible measures have
been taken to avoid or minimize the environmental impact of the project. In
certain instances, Massachusetts law also requires the preparation and
dissemination, among various state agencies, of an environmental impact
report for the proposed project. Major generation or transmission facilities
may not be constructed or significantly modified without approval by the
Massachusetts Energy Facilities Siting Board; new transmission facilities
also require approval by the DPU.
The System anticipates that additional environmental legislation will be
seriously considered by Congress and state legislatures in the coming years.
The issues of global warming, air pollution, hazardous waste handling and
disposal and water pollution control are receiving a significant amount of
public and political attention and are likely areas for federal or state
legislative activity in the near future. Until and unless any such
legislation is enacted and implementing regulations are issued, the effects
on the System cannot be determined. Compliance with environmental laws and
regulations, particularly air and water pollution control requirements, may
limit operations or require substantial investments in new equipment at
existing facilities. Such laws and regulations may also require substantial
investments that are not included in the estimated construction budget set
forth herein. See "Resource Plans" for a discussion of the System's
construction plans.
SURFACE WATER QUALITY REQUIREMENTS
The federal Clean Water Act (CWA) provides that every "point source"
discharger of pollutants into navigable waters must obtain a National
Pollutant Discharge Elimination System (NPDES) permit from EPA specifying the
allowable quantity and characteristics of its effluent. To obtain an NPDES
permit, a discharger must meet technology-based and biologically-based
effluent standards and must also demonstrate that its effluent will not cause
a violation of established standards for the quality of the receiving waters.
Connecticut, Massachusetts and New Hampshire regulations contain similar
permit requirements and these states can impose more stringent requirements.
All of the System's steam-electric generating plants have NPDES permits
in effect. Any of the permits may be reopened to incorporate more stringent
regulations adopted by EPA or state environmental agencies. Compliance with
NPDES and state water discharge permit requirements has necessitated
substantial expenditures and may require further expenditures because of
additional requirements that could be imposed in the future.
The CWA requires EPA and state permitting authorities to approve the
cooling water intake structure design and thermal discharge of steam-electric
generating plants. All System steam-electric plants have received these
<PAGE>58
approvals. In the renewed discharge permit for the three Millstone nuclear
units, issued in 1992, CDEP included a condition requiring a feasibility
study of various structural or operational modifications of the cooling
water intake system to reduce the entrainment of winter flounder larvae.
This study was submitted to CDEP in January 1993 and includes analyses of the
costs and benefits of each alternative considered. The costs ranged from
$1.8 million to $519 million. The study concluded that the substantial
incremental costs of each of the alternatives studied are not justified by
the small benefits to the winter flounder population. In a letter dated
January 14, 1994, CDEP approved the report requiring only that Millstone
station continue efforts to schedule refueling outages to coincide with the
period of high winter flounder larvae abundance and that the station continue
to monitor the Niantic River winter flounder population in accordance with
existing NPDES permit conditions.
Merrimack station's NHDES discharge permit requires site work to isolate
adjacent wetlands from the station's waste water system. Plans have been
approved by the New Hampshire Department of Environmental Services (NHDES),
and PSNH is now preparing a permit application to begin construction. The
new permit may require PSNH to perform further biological studies because
significant numbers of migratory fish are being restored to lower reaches of
the Merrimack River. Should the studies indicate that Merrimack Station's
once-through cooling system interferes with the establishment of a balanced
aquatic community, PSNH could be required to construct a partially enclosed
cooling water system for Merrimack station. The amount of capital
expenditures relating to the foregoing cannot be determined at this time.
However, if such expenditures were to be required, they would likely be
substantial and a reduction of Merrimack station's net generation capability
could result.
The ultimate cost impact of the CWA and state water quality regulations
on the System cannot be estimated because of uncertainties such as the impact
of changes to the effluent guidelines or water quality standards. Additional
modifications, in some cases extensive and involving substantial cost, may
ultimately be required for some or all of the System's generating facilities.
In response to several major oil spills in recent years, Congress passed
the Oil Pollution Act of 1990 (OPA 90). OPA 90 sets out the requirements for
facility response plans and periodic inspections of spill response equipment
at certain facilities. The requirements apply to facilities that can cause
substantial harm or significant and substantial harm to the environment by
discharging oil or hazardous substances into the navigable waters of the
United States and adjoining shorelines. Pursuant to OPA 90, EPA has
authority to regulate non-transportation-related fixed onshore facilities and
the Coast Guard has the authority to regulate transportation-related onshore
facilities.
Response plans were filed for all System facilities believed to be
subject to this requirement. EPA and the Coast Guard have reviewed these
plans and accepted the information provided in them as certification of
contracted resources for response to a worst case discharge. The Coast Guard
expects to complete its review process by February 17, 1995, and EPA by
August 18, 1995. Both agencies have authorized continued operation
pending final plan approval.
OPA 90 includes limits on the liability that may be imposed on persons
deemed responsible for release of oil. The limits do not apply to oil spills
caused by negligence or violation of laws or regulations. OPA 90 also does
not preempt state laws regarding liability for oil spills. In general, the
laws of the states in which the System owns facilities and through which the
<PAGE>59
System transports oil could be interpreted to impose strict liability for
the cost of remediating releases of oil and for damages caused by releases.
The System and its principal oil transporter currently carry a total of $890
million in insurance coverage for oil spills.
AIR QUALITY REQUIREMENTS
Under the federal Clean Air Act, EPA has promulgated national ambient
air quality standards for certain air pollutants, including sulfur dioxide,
particulate matter, nitrogen oxides and ozone. EPA has approved a
Connecticut implementation plan prepared by CDEP, a New Hampshire plan
prepared by NHDES and a Massachusetts plan prepared by MDEP for the
achievement and maintenance of these standards. The Connecticut, New
Hampshire and Massachusetts plans impose limits on the amounts of various
airborne pollutants that can be emitted from utility boilers.
Under the Clean Air Act, emissions from new or substantially modified
sources are limited by new source performance standards and very strict
technology-based emission limits.
The Clean Air Act Amendments of 1990 (CAAA) made extensive revisions and
additions to the Clean Air Act and imposed many stringent new requirements on
air emissions sources. The CAAA contains provisions further regulating
emissions of sulfur dioxide (SO2) and nitrogen oxides (NOX) for the purpose
of controlling acid rain, toxic air pollutants and other pollutants,
requiring installation of continuous emissions monitors (CEMs) and expanding
permitting provisions.
Existing and additional federal and state air quality regulations could
hinder or possibly preclude the construction of new, or modification of
existing, fossil units in the System's service area, could raise the capital
and operating cost of existing units, and may affect the operations of the
System's work centers and other facilities. The ultimate cost impact of
these requirements on the System cannot be estimated because of uncertainties
about how EPA and the states will implement various requirements of the CAAA.
NOX. The CAAA identifies NOX emissions as a precursor of ambient ozone
for the northeastern region of the United States, much of which is in
violation of the ambient air quality standard for ozone. Pursuant to the
CAAA, Connecticut, New Hampshire and Massachusetts must implement plans to
address ozone nonattainment. Probable actions include additional NOX
controls that could impose costs on the System's generating units. The
capital cost to comply with 1995's anticipated Phase I requirements is
expected to approximate $10 million for CL&P, $11 million for PSNH, $1
million for WMECO and $3 million for HWP, while compliance costs for Phase
II, effective in 1999, could be substantially higher depending on the level
of NOX reductions required. Costs for meeting the 1999 NOX emission
reduction requirements cannot be estimated at this time.
Connecticut and New Hampshire have not as yet issued final regulations
to implement NOX reduction requirements, although both have previously
indicated that they will attempt to achieve NOX reduction requirements at the
lowest possible costs. The System companies are in the process of reviewing
compliance strategies and costs and of providing input to state environmental
regulators. Massachusetts issued final NOX Reasonably Available Control
Technology (RACT) rules in September, 1993.
In December 1993, PSNH reached a revised agreement regarding NOX
emissions with various environmental groups and the New Hampshire Business
<PAGE>60
and Industrial Association. The agreement has been submitted to the New
Hampshire Air Resources Division (NHARD) in the form of proposed regulations.
The agreement provides for aggressive unit specific NOX emission rate limits
for PSNH's generating facilities, effective May 31, 1995. The agreement no
longer requires a PSNH commitment to retire or repower Merrimack Unit 2 by
May 15, 1999, however more stringent emission rate limits equivalent to the
range of 0.1 to 0.4 pounds of NOX per million Btu are required for the unit
by that date.
PSNH recently received an amendment to its Permit to Operate for
Merrimack Unit 1 from NHARD to allow the testing of wood chips as a fuel.
Testing has begun and if it is successful it may assist PSNH in compliance
with the CAAA.
SO2. The CAAA mandates reductions in sulfur dioxide (SO2) emissions to
control acid rain. These reductions are to occur in two phases. First, high
SO2 emitting plants are required to reduce their emissions beginning January
1, 1995. The only System units subject to the Phase I reduction requirements
are PSNH's Merrimack Units 1 and 2. Management plans to meet the
requirements of both Phase I and Phase II by burning low sulfur fuels and
substituting (i.e. adding) Newington and Mt. Tom stations as Phase I units,
if allowed by EPA regulations.
On January 1, 2000, the start of Phase II, a nationwide cap of 8.9
million tons per year of utility SO2 emissions will be imposed and existing
units will be granted allowances to emit SO2. These allowances are freely
tradable. One allowance entitles a source to emit one ton of SO2 in a year.
No unit may emit more SO2 in a particular year than the amount for which it
has allowances. The System expects to be allocated allowances by EPA that
substantially exceed its expected SO2 emissions for 2000 and subsequent
years. In 1993, the System agreed to donate, subject to regulatory approval,
10,000 of its surplus SO2 allowances to the American Lung Association thereby
effectively preventing 10,000 tons of SO2 from being emitted into the
atmosphere. The System expects to be able to sell some of its surplus
allowances. The price of allowances depends on the market. The amount of
surplus allowances and the allocation of the revenues received from such
sales between ratepayers and shareholders have not been determined.
On February 15, 1993, as required by the CAAA, PSNH filed Phase I Acid
Rain Permit Applications for Merrimack Station. In addition, as allowed by
the CAAA, PSNH designated its Newington station unit, and HWP designated its
Mt. Tom unit, as conditional Phase I substitution units. EPA is currently
reviewing whether it will accept Newington and Mt. Tom as substitution units
and the number of allowances each will be awarded. All Phase I units,
including substitution units accepted by EPA, will be allocated SO2
allowances for the period 1995-1999.
On December 31, 1992, pursuant to Connecticut Public Act 92-106, CL&P
filed a report with the Energy and Public Utilities Committee of the
Connecticut General Assembly and the DPUC describing its plan for allocation
of revenues from sale of SO2 allowances. CL&P proposed that its shareholders
receive 20 percent of the proceeds from sales of allowances to compensate for
the risks they have taken to reduce CL&P's SO2 emissions and to provide
appropriate incentive to CL&P to sell allowances at the maximum price. In
1993 the DPUC approved a proposal by The United Illuminating Company (UI) to
grant an option to another utility for the purchase of SO2 allowances, and
ruled that shareholders would receive 15 percent of the proceeds from the
eventual sale. The DPUC opened a docket and held hearings to review the
reports filed by CL&P and UI. This review is addressing development of a
<PAGE>61
policy on allocation between shareholders and ratepayers of SO2 allowance
proceeds as well as CL&P's allowance donation.
CDEP's air quality regulations permit CL&P to burn 1.0 percent sulfur
oil at oil-fired generating stations in Connecticut, except that 0.5 percent
sulfur oil must be burned at Middletown station. Current CDEP policy
requires CL&P to use 0.5 percent or lower sulfur oil when replacing older
(1.0 percent sulfur oil fueled) plant auxiliary boilers needed for unit
start-up and plant space heating. The regulations also permit the burning of
coal with a sulfur content of up to 0.7 percent at CL&P's plants, or up
to 1.0 percent if a special permit is obtained.
New Hampshire air quality regulations permit PSNH to emit 55,150 tons of
SO2 annually. The New Hampshire acid rain control law required a 25 percent
reduction in SO2 emissions from the 1979-1982 baseline emissions at PSNH's
units, which has been achieved. Compliance with New Hampshire's acid rain
control law has brought PSNH very close to compliance with the SO2 emission
limits of Phase I of the CAAA. PSNH may need to install additional pollution
control equipment or use fuel with lower sulfur content in order to meet the
requirements of the CAAA.
The EPA has issued an order requiring modeling of the impact on ambient
air quality of SO2 emissions from Merrimack Station. Work on this study has
begun and the final results of the modeling are expected to be available in
mid-1995. If the modeling study indicates that compliance with the primary
ambient air quality standards for SO2 is not being achieved, additional
control strategies, possibly including the addition of emission control
devices or a higher stack, will be required. Management cannot at this time
predict the results of the modeling or estimate the cost of any additional
control strategies that may be required.
The Massachusetts air quality regulations permit HWP to burn 1.5 percent
sulfur coal with an ash content up to 9 percent at Mt. Tom Station. Coal
with a higher ash content can be burned with MDEP approval. Mt. Tom Station
is required to reduce sulfur emissions to the equivalent of 1.0 percent
sulfur oil if certain air quality monitors show levels of SO2 approaching
ambient air quality limits. WMECO's West Springfield station currently burns
1.0 percent sulfur oil or natural gas.
The Massachusetts acid rain control law requires MDEP to adopt
regulations to limit future sulfur dioxide emissions. These regulations
limit the allowable SO2 emissions from utility power plants and other major
fuel burning sources to 1.2 pounds per million BTUs averaged over all of the
System's Massachusetts plants, effective January 1, 1995. The System's
generating plants in Massachusetts on average emit approximately 1.9 pounds
of SO2 per million BTUs. The System expects to meet the new sulfur dioxide
limitation by using natural gas and lower sulfur oil and coal in its plants.
The System could incur additional costs for the lower sulfur fuels it may
burn to meet the requirements of this legislation.
Under the existing fuel adjustment clauses in Connecticut, New Hampshire
and Massachusetts, the System would be able to recover the additional fuel
costs of compliance with the CAAA and state laws from its customers.
Management does not believe that the acid rain provisions of the CAAA will
have a significant impact on the System's overall costs or rates due to the
very strict limits on SO2 emissions already imposed by Connecticut, New
Hampshire and Massachusetts and on NOX limitations imposed by Connecticut and
New Hampshire.
<PAGE>62
EPA, Connecticut, New Hampshire and Massachusetts regulations also
include other air quality standards, emission standards and monitoring, and
testing and reporting requirements that apply to the System's generating
stations. They require that new or modified fossil fuel-fired electric
generating units operate within stringent emission limits.
Air Toxics. Title III of the CAAA imposes new stringent discharge
limitations on hazardous air pollutants. EPA is required to study toxic
emissions and mercury emissions from power plants. Pending completion of
these studies, power plants are exempt from the hazardous air pollutant
requirements. Should EPA or Congress determine that power plant emissions
must be controlled to the same extent as emissions from other sources under
Title III, the System could be required to make substantial capital
expenditures to upgrade or replace pollution control equipment, but the
amount of these expenditures cannot be readily estimated.
Connecticut and New Hampshire have enacted, and Massachusetts is
considering, toxic air pollution regulations limiting emissions of numerous
substances that may extend beyond those regulated under federal law.
TOXIC SUBSTANCES AND HAZARDOUS WASTE REGULATIONS
PCBs. Under the federal Toxic Substances Control Act of 1976 (TSCA),
EPA has issued regulations that control the use and disposal of
polychlorinated biphenyls (PCBs). PCBs had been widely used as insulating
fluids in many electric utility transformers and capacitors before TSCA
prohibited any further manufacture of such PCB equipment. System companies
have taken numerous steps to comply with these regulations and have incurred
increased costs for disposal of used fluids and equipment that are subject to
the regulations. One disposal measure involves the System's burning of
some waste oil with a low level of PCB contamination (up to 500 parts per
million (ppm)) as supplemental fuel at CL&P's Middletown station Unit 3. EPA
and CDEP have approved this disposal method.
In general, the System sends fluids with concentrations of PCBs equal to
or higher than 500 ppm but lower than 8,500 ppm to an unaffiliated company to
dispose of using a chemical treatment process. Electrical capacitors that
contain PCB fluid are sent offsite to dispose of through burning in high
temperature incinerators approved by EPA. Currently, there are only four
such approved incinerators operating in the United States, which has resulted
in a sharp rise in the price of disposal through these facilities. The
System disposes of solid wastes containing PCBs in secure chemical waste
landfills. In 1993, the System incurred costs of approximately $450,000 for
disposal of materials at these facilities.
Asbestos. Federal, Connecticut, New Hampshire and Massachusetts
asbestos regulations have required the System to expend significant sums on
removal of asbestos including measures to protect the health of workers and
the general public and to properly dispose of asbestos wastes. Areas of the
System currently undergoing removal of asbestos include nuclear, fossil/hydro
production, transmission and distribution and facilities operations. The
System expects to expend approximately $3.4 million in 1994 on the removal of
asbestos in nuclear units, fossil and hydro generating stations and
buildings. Even greater costs are likely to be incurred annually in the
future if federal and state asbestos regulations become more stringent and
the System's need to remove asbestos grows.
RCRA. Under the federal Resource Conservation and Recovery Act of 1976,
as amended (RCRA), the generation, transportation, treatment, storage and
<PAGE>63
disposal of hazardous wastes are subject to EPA regulations. Connecticut,
New Hampshire and Massachusetts have adopted state regulations that parallel
RCRA regulations but in some cases are more stringent. A change in
interpretation of RCRA by EPA now requires that nuclear facilities obtain EPA
permits to handle radioactive wastes that are also hazardous under RCRA
(so-called mixed wastes). The notifications and applications required by
these regulations have been made by all units to which these regulations
apply. The procedures by which System companies handle, store, treat and
dispose of hazardous wastes are regularly revised, where necessary, to comply
with these regulations.
CL&P has discontinued operation of surface impoundments in its four
Connecticut wastewater treatment facilities used to treat hazardous waste.
This is because CL&P was unable to obtain variances from EPA to exempt the
facilities from the double lining requirement under the 1984 RCRA amendments.
CL&P has constructed replacement above-ground concrete tanks at an estimated
cost of approximately $22 million. It is expected that in early 1994, EPA
and DEP will approve clean closure for CL&P's Montville Station's
impoundment. Accordingly, CL&P will no longer be required to maintain
liability insurance or financial assurance for closure and post-closure for
this former impoundment site. EPA's final approval of the closure of the
remaining three surface impoundments is pending. The System estimates that
it will incur approximately $2 million in costs of monitoring and closure of
the container storage areas for these sites in the future, but the ultimate
amount will depend on EPA's final disposition.
Underground Storage Tanks. Federal and state regulations regulate
underground tanks storing petroleum products or hazardous substances. The
System has about 130 underground storage tanks that are used primarily for
gasoline, diesel, house-heating and fuel oil. To reduce its environmental
and financial liabilities, the System has begun implementing a policy calling
for the permanent removal of all non-essential underground vehicle fueling
tanks. Costs for this program are not substantial.
Hazardous Waste Liability. As many other industrial companies have done
in the past, System companies have disposed of residues from operations by
depositing or burying such materials on-site or disposing of them at off-site
landfills or facilities. Typical materials disposed of include coal
gasification waste and oils that might contain PCBs. In recent years it has
been determined that deposited or buried wastes, under certain circumstances,
could cause groundwater contamination or other environmental harm. The
System continues to evaluate the environmental impact of its former disposal
practices. Under federal and state law, government agencies and private
parties can attempt to impose liability on System companies for such past
disposal.
Under the federal Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, commonly known as Superfund, EPA has the
authority to clean up hazardous waste sites and to impose the cleanup costs
on parties deemed responsible for the hazardous waste activities on the
sites. Responsible parties include the current owner of a site, past owners
of a site at the time of waste disposal, waste transporters and waste
generators. It is EPA's position that all responsible parties are jointly
and severally liable, so that any single responsible party can be required to
pay the entire costs of cleaning up the site. As a practical matter,
however, the costs of cleanup are usually allocated by agreement of the
parties, or by the courts on an equitable basis among the parties deemed
responsible, and several recent federal appellate court decisions have
rejected EPA's position on strict joint and several liability. Superfund
<PAGE>64
also contains provisions that require System companies to report releases of
specified quantities of hazardous materials and require notification of
known hazardous waste disposal sites. Management believes that the System
companies are in compliance with these reporting and notification requirements.
The System is or has recently been involved in eight Superfund sites.
Three of these sites are in Connecticut, one is in Kentucky, one is in West
Virginia and three are in New Hampshire. The level of study of each site and
the information about the waste contributed to the site by the System and
other parties differs from site to site. Where reliable information is
available that permits the System to make a reasonable estimate of the
expected total costs of remedial action and/or the System's likely share of
remediation costs for a particular site, those cost estimates are provided
below. All cost estimates were made, in accordance with Financial Accounting
Standards Board Statement No. 5, where remediation costs were probable and
reasonably estimable. Any estimated costs disclosed for cleaning up the
sites discussed below were determined without consideration of possible
recoveries from third parties, including insurance recoveries. Where the
System has not accrued a liability, the costs either were not material or
there was insufficient information to accurately assess the System's
exposure.
At two Connecticut sites, the Beacon Heights and Laurel Park landfills,
the major parties formed coalitions to clean the sites and settled their
suits with EPA and CDEP. The coalitions then attempted to join as defendants
a large number of potential contributors, including "Northeast Utilities
(Connecticut Light and Power)." Litigation on both sites was consolidated in
a single case in the federal district court. In January 1993, Judge Dorsey
denied the motion of the Laurel Park Coalition to join NU (CL&P). In
December 1993, Judge Dorsey dismissed the claims of Beacon Heights Coalition
against many of the defendants and directed the coalition to indicate which
remaining defendants it intended to pursue claims against. In January
1994, the Beacon Heights Coalition filed a response listing NU (CL&P) as a
defendant they would not continue to pursue. As a result of Judge Dorsey's
rulings and the coalition's actions, it is not likely that CL&P will incur
any cleanup costs for these sites.
In June, 1993, EPA notified the System that it was a Potentially
Responsible Party (PRP) at the Solvents Recovery Service of New England site
in Southington, Connecticut. PSNH is a de minimis PRP at this site and does
not expect its cost to be substantial.
At the Maxey Flats nuclear waste disposal site in Fleming County,
Kentucky, EPA has issued a notice of potential liability to NNECO and CYAPC.
The System had sent a substantial volume of LLRW from Millstone 1, Millstone 2
and CY to this site. CL&P and WMECO had previously recorded a liability for
future remediation costs for this site based on System estimates. To date, the
costs have not been material with respect to their earnings or financial
positions.
In September 1991, EPA issued its record of decision for the Maxey Flats
nuclear waste disposal site. The EPA-approved remedy requires pumping and
treatment of leachate, installing of an initial cap, allowing materials in
the trenches to settle and ultimately constructing a permanent cap. EPA
estimated that the cost of the remedy is approximately $33.5 million. Based
on that estimate and the volume contributed, the System's share would be
approximately $0.5 million. However, the System believes that the cost of
the remedy could be substantially higher. The System estimates that its
total cost for cleanup could be approximately $1-$2 million. EPA provided an
opportunity for PRPs, including certain System companies, to enter into a
<PAGE>65
consent decree with EPA under which each PRP would reimburse EPA for its past
costs and would undertake remedial action at the site or pay the costs of EPA
undertaking remedial action.
On October 20, 1992, PRPs that are members of the Maxey Flats PRP
Steering Committee, including System companies, and several federal
government agencies, including DOE and the Department of Defense, made a
settlement offer to EPA involving a commitment to perform a substantial
portion of the remedial work required by EPA in its record of decision. On
that same date, the Commonwealth of Kentucky made a settlement offer. EPA
rejected the settlement offers in December 1992, but gave the parties an
additional 60 days to make a "good faith" offer. On March 16, 1993, the PRP
Steering Committee and the federal government agencies made a revised offer
to EPA. Since then all parties have been actively involved in settlement
negotiations.
PSNH has settled with EPA and other PRPs at sites in West Virginia and
Kingston, New Hampshire. PSNH paid approximately $33,700 to cash out of these
sites.
PSNH has committed approximately $280,000 as its share of the costs to
clean up municipal landfills in Dover and North Hampton, New Hampshire. Some
additional costs may be incurred at these sites but they are not expected to
be significant.
Other New Hampshire sites include municipal landfills in Somersworth and
Peterborough, and the Dover Point site owned by PSNH in Dover, New Hampshire.
PSNH's liability at the landfills is not expected to be significant and its
liability at the Dover Point site cannot be estimated at this time.
PSNH contacted NHDES in December 1993 concerning possible coal tar
contamination in the headwater of Lake Winnipesaukee near an area where PSNH
formerly owned and operated a coal gasification plant which was sold in 1945.
PSNH agreed to conduct an historical review and provide a report to NHDES in
February 1994. PSNH, along with two other identified PRPs, most likely will
be conducting a site investigation in the spring of 1994.
In 1987, CDEP published a list of 567 hazardous waste disposal sites in
Connecticut. The System owns two sites on this list. The System has spent
approximately $0.5 million to date completing investigations at these sites.
Both sites were formerly used by CL&P predecessor companies for the
manufacture of coal gas (also known as town gas sites) from the late 1800s to
the 1950s. This process resulted in the production of coal tar residues,
which, when not sold for roofing or road construction, were frequently
deposited on or near the production facilities. Site investigations are
being carried out to gain an understanding of the environmental and health
risks of these sites. Should future site remediation become necessary, the
level of cleanup will be established in cooperation with CDEP. Connecticut
is currently developing cleanup standards and guidelines for soil and
groundwater.
One of the sites is a 25.8 acre site located in the south end of
Stamford, Connecticut. Site investigations have located coal tar deposits
covering approximately 5.5 acres and having a volume of approximately 45,000
cubic yards. A final risk assessment report for the site was completed in
January 1994. Several remedial options are currently being evaluated to
clean up the site; however, CL&P is focusing on institutional and engineering
controls, such as capping and paving, which would reduce the potential health
risks and secure the site. The estimated costs of institutional controls
<PAGE>66
range from $2 million to $3 million.
As part of the 1989 divestiture of CL&P's gas business, site
investigations were performed for properties that were transferred to Yankee
Gas Services Company (Yankee Gas). As a result of those investigations, ten
properties were identified for which negative declarations under the Property
Transfer Act could not be filed. A negative declaration is a statement that
there has been no discharge of hazardous wastes at the site, or that if there
was such a discharge, it has been cleaned up or determined to pose no threat
to health, safety or the environment and is being managed lawfully. Of the
ten sites, CL&P agreed to accept liability for required cleanup for the three
sites it retained. At one location, CL&P and Yankee Gas share the site and
any liability for any required cleanup. Yankee Gas accepted liability for
any required cleanup of the other sites. CL&P and Yankee Gas will share the
costs of cleanup of sites formerly used in CL&P's gas business but not
currently owned by either of them.
In Massachusetts, System companies have been designated by MDEP as PRPs
for ten sites under MDEP's hazardous waste and spill remediation program.
The System does not expect that its share of the remaining remediation costs
for any of these sites will be material. At some of these sites, the System
is responsible for only a small portion or none of the hazardous wastes. For
some of these and for other sites, the total remediation costs are not
expected to be material. At one of the sites, the System has spent
approximately $2 million for cleanup and it expects to incur
approximately $250,000 for the remaining remediation costs.
HWP has been identified by MDEP as a PRP in a coal tar site in Holyoke,
Massachusetts. HWP owned and operated the Holyoke Gas Works from 1859 to 1902.
It was sold to the city of Holyoke and operated by its Gas and Electric
Department (HG&E) from 1902 to 1951. Currently, one third of the two acre
property is owned by HG&E, with the remaining portion owned by a construction
company. The site is located on the west side of Holyoke, adjacent to the
Connecticut River and immediately downstream of HWP's Hadley Falls Station.
MDEP has classified both the land and river deposit areas as Tier I priority
waste disposal sites. Due to the presence of tar patches in the vicinity of the
spawning habitat of the shortnose sturgeon (SNS) - an endangered species - the
National Oceanographic and Atmospheric Administration (NOAA) and National Marine
Fisheries Service have taken an active role in overseeing site activities.
Although HWP denies that it is a PRP, it has cooperated with the agencies in
investigating this problem. Both MDEP and NOAA have indicated they may require
the removal of tar deposits from the vicinity of the SNS spawning habitat. To
date, HWP has spent approximately $200,000 for river studies and construction
costs for an oil containment boom to prevent leaching hydrocarbons from entering
the Hadley Falls tailrace and the Connecticut River.
The System has received other claims from government agencies and third
parties for the cost of remediating sites not currently owned by the System
but affected by past System disposal activities and expects to receive more
such claims in the future. The System expects that the costs of resolving
claims for remediating sites about which it has been notified will not be
material, but cannot estimate the costs with respect to sites about which it
has not been notified. If the System, regulatory agencies or courts
determine that remedial actions must be taken in relation to past disposal
practices on property owned or used for disposal by the System in the past,
the System could incur substantial costs.
<PAGE>67
ELECTRIC AND MAGNETIC FIELDS
In recent years, published reports have discussed the possibility of
adverse health effects from electric and magnetic fields (EMF) associated
with electric transmission and distribution facilities and appliances and
wiring in buildings and homes. On the basis of scientific reviews of these
reports conducted by various state, federal and international panels,
management does not believe that a causal relationship has been established
or that significant capital expenditures are appropriate to minimize
unsubstantiated risks. The System supports further research into the subject
and is participating in the funding of the National EMF Research and Public
Information Dissemination Program and other industry-sponsored studies. If
further investigation were to demonstrate that the present electricity
delivery system is contributing to increased risk of cancer or other health
problems, the industry could be faced with the difficult problem of
delivering reliable electric service in a cost-effective manner
while managing EMF exposures. In addition, if the courts were to conclude
that individuals have been harmed and that utilities are liable for damages,
the potential monetary exposure for all utilities, including the System
companies, could be enormous. Without definitive scientific evidence of a
causal relationship between EMF and health effects, and without reliable
information about the kinds of changes in utilities' transmission and
distribution systems that might be needed to address the problem, if one is
found, no estimates of the cost impacts of remedial actions and liability
awards are available.
Epidemiological studies, rather than laboratory studies, have been
primarily responsible for increased scientific interest in and public concern
over EMF exposures in the past decade. New epidemiological study results
from international researchers were released and publicized in late-1992 and
in 1993, but these only added to a picture of inconsistency from previous
studies. Researchers from Sweden and Denmark concluded that their
statistical results support the hypothesis that EMF may be a causative factor
in certain types of cancer (although they disagreed on which types), while
researchers from Finland and Greece found no evidence to support such a
hypothesis. These researchers, as well as scientific review panels
considering all significant EMF epidemiological and laboratory research to
date, all agree that current information remains inconclusive, inconsistent
and insufficient for risk assessment of EMF exposures. NU is closely
monitoring research and government policy developments.
In 1993, there were several notable events on the federal government
level regarding EMF. The EPA has indefinitely postponed completion of a
report on EMF, citing as its reasons high costs and the unlikelihood of
shedding new light on the issue. Instead, it now plans to issue a 30-page
"summary of science" in early 1994. In a related development, the Department
of Energy has initiated a scientific review of EMF research by the National
Academy of Sciences. Also on the federal level, the National EMF Research
and Public Information Dissemination Program (created by the Energy Policy
Act) moved forward in 1993 by establishing a federal interagency committee
and an advisory committee, and by soliciting the required non-federal
matching funds (through The Edison Electric Institute, NU will be making a
voluntary contribution of approximately $62,000 for each year of the
five-year program).
The Connecticut Interagency EMF Task Force (Task Force) provided reports
to the state legislature in March 1993 and in January 1994. The Task Force
recognizes and supports the need for more research, and has suggested a
policy of "voluntary exposure control," which involves providing people with
information to enable them to make individual decisions about EMF exposure.
<PAGE>68
Neither the Task Force, nor any Connecticut state agency, has recommended
changes to the existing electrical supply system. Finally, the Connecticut
Siting Council adopted a set of EMF "best management practices" in February
1993, which must now be considered in the justification, siting and design of
new transmission lines and substations. EMF has become increasingly
important as a factor in facility siting decisions in many states.
Several bills were introduced in Massachusetts in January 1993, and were
last reported to be pending before various legislative committees. It is not
known whether there will be further action on the bills, which would require
certain disclosures to real estate purchasers and utility employees, a
scientific literature review, establishment of a fund to reduce certain field
exposures, identification of schools and day care centers within 500 feet of
transmission lines and development of EMF regulations. No action was taken
on EMF bills previously pending in 1992.
CL&P has been the focus of media reports charging that EMF associated
with a CL&P substation and related distribution lines in Guilford,
Connecticut, is linked with various cancers and other illnesses in several
nearby residents. See Item 3, Legal Proceedings, for information about two
suits brought by plaintiffs who now live or formerly lived near that
substation.
FERC HYDRO PROJECT LICENSING
Federal Power Act licenses may be issued for hydroelectric projects for
terms of up to 50 years as determined by FERC. Any hydroelectric project so
licensed is subject to recapture by the United States for licensing to others
after expiration of the license upon payment to the licensee of the lesser of
fair value or the net investment in the project plus severance damages less
certain amounts earned by the licensee in excess of a reasonable rate of
return. Licenses are customarily conditioned on the licensee's development of
recreational and other non-power uses at each licensed project. Conditions
may be imposed with respect to low flow augmentation of streams and fish
passage facilities.
On September 28, 1993, the United States Fish and Wildlife Service (FWS)
was petitioned to list the anadromous Atlantic salmon (Salmo salar) as an
endangered species in the United States. After a 90-day review, the petition
was found to be complete and was accepted. The National Marine Fisheries
Service and FWS were given joint jurisdiction over this petition. Within the
next 12 months, these agencies will decide if the petition is warranted. If
salmon are listed as an endangered species, the System may be required to take
a number of actions including increasing spillage over some dams during the
salmon migration period resulting in loss of generation capacity at the affected
hydroelectric facilities; modifying spillways to accommodate safe fish passage;
curtailing pumping at Northfield Mountain during the salmon migration period;
improving upstream and downstream passage facilities at all hydroelectric dams
on the Connecticut and Merrimack Rivers; and modifying intake structures and
curtailing operations during salmon migration periods at certain of the System's
thermal structures. Although these are all possible implications of a listing,
the System cannot estimate the impact on System facilities at this time.
The System is continuing to conduct studies on the Connecticut River in
fulfillment of the Memorandum of Agreement (MOA) concerning downstream
passage of anadromous fishes (Atlantic salmon, American shad and blueback
herring). The MOA was signed by the System and the Connecticut River
Atlantic Salmon Commission and its member agencies in 1990. The System
conducted studies in 1991 and 1992 of the entrainment of salmon smolts and
<PAGE>69
juvenile shad and herring in water pumped to the upper reservoir of the
Northfield Mountain Pumped Storage Project. Studies of entrainment of shad
and herring indicated that Northfield's impact on these species is low, and
further studies have not been conducted.
Studies of salmon smolts, however, indicated the potential for
unacceptable losses of smolts due to entrainment, but the results also
indicated that firm conclusions could not be drawn. Accordingly, the System
conducted a more definitive study indicating that about 10 percent of the 1993
smolt run was entrained at Northfield. The System will continue to pursue
practical techniques to reduce salmon smolt entrainment at Northfield and has
agreed to alter its 1994 maintenance schedule to reduce the amount of time
when all four pump/turbine units will be pumping simultaneously during the
smolt migration period. Should the system be unable to reduce smolt
entrainment through operational changes or practical exclusion techniques,
substantial additional costs are possible. The total cost cannot be
determined at this time.
The System operating companies hold licenses granted under Part I of the
Federal Power Act for the operation and maintenance of thirteen existing
hydroelectric projects, four of which are in Massachusetts (Northfield,
Turners Falls, Gardners Falls and Holyoke [river and canal units]), three of
which are in Connecticut (Scotland, Housatonic [encompassing Bulls Bridge,
Rocky River, Shepaug and Stevenson] and Falls Village) and six of which are
in New Hampshire (Merrimack [encompassing Garvins Falls, Hooksett and
Amoskeag], Smith, Ayers Island, Eastman Falls, Canaan and Gorham).
In 1992, FERC issued orders exempting from licensing WMECO's four
Chicopee River projects: Dwight, Indian Orchard, Putts Bridge and Red
Bridge. To date, FERC has not claimed jurisdiction over CL&P's Bantam,
Robertsville, Taftville and Tunnel Projects or PSNH's Jackman project.
Four of the System's FERC licenses expired at the end of 1993 (Gardners
Falls, Ayers Island, Gorham and Smith). Relicensing efforts have been under
way for these projects for several years. As no third parties have filed
competing license applications with FERC for these projects, it is highly
likely that FERC will grant renewal licenses for these projects to the
System.
However, certain operating, environmental and/or recreational conditions
may be placed on these licenses. Because FERC was unable to complete its
relicensing process prior to the December 31, 1993 expiration of these
licenses, under the provision of section 15 of the Federal Power Act, FERC
has issued one-year extensions to each of these licensees. FERC will
continue to issue annual licenses until it completes the relicensing process.
EMPLOYEES
As of December 31, 1993, the System companies had approximately 9,697
full and part time employees on their payrolls, of which approximately 2,697
were employed by CL&P, approximately 1,452 by PSNH, approximately 656 by
WMECO, approximately 119 by HWP, approximately 1,252 by NNECO, approximately
2,584 by NUSCO and approximately 937 by North Atlantic. NU and NAEC have no
employees. Approximately 2,242 employees of CL&P, PSNH, WMECO and HWP are
covered by union agreements, which expire between October 1994 and May 1996.
Certain employees of North Atlantic negotiated a union contract in 1993.
On August 3, 1993, the System announced that it intended to reduce its
total workforce by 600 to 700 positions and offered a voluntary early
<PAGE>70
retirement program to about 800 eligible employees. The program was
available generally to all nonbargaining unit employees of NU's subsidiaries,
NUSCO, CL&P, WMECO, HWP, PSNH and NAESCO, who would be at least age 55 with
ten years of service as of November 1, 1993. Most nuclear-related job
classifications at NUSCO and NAESCO were not eligible. The program enhanced
pension benefits by adding an additional three years to age and service for
the purpose of calculating pension benefits and early retirement reduction
factors, as well as providing a supplemental payment to employees who retired
prior to becoming eligible for social security benefits. Each program
participant has retired or will retire on a date to be established by the
employer between November 1, 1993 and November 1, 1994. A similar program
was offered to approximately 300 bargaining unit employees working for
System companies and 12 employees of NEPOOL/NEPEX. The workforce reduction
affected approximately 811 employees, of which 498 individuals accepted the
early retirement program and another 313 individuals who were involuntarily
terminated. Involuntarily terminated employees were eligible to receive a
lump sum severance payment of up to a maximum of 52 weeks salary, depending
on years of credited service. In addition, as part of the System's
reorganization of its Connecticut-based nuclear organization, 32 employees
were involuntarily terminated through January 12, 1994. For more information
on the reorganization see "Nuclear Generation - Operations - Nuclear
Performance Improvement Initiatives." The total cost of the workforce
reduction program and the nuclear reorganization was approximately $38
million, including pension, severance and other benefits.
<PAGE>71
Item 2. Properties
The physical properties of the System are owned or leased by
subsidiaries of NU. CL&P's principal plants and other properties
are located either on land which is owned in fee or on land, as to
which CL&P owns perpetual occupancy rights adequate to exclude all
parties except possibly state and federal governments, which has
been reclaimed and filled pursuant to permits issued by the United
States Army Corps of Engineers. The principal properties of PSNH
are held by it in fee. In addition, PSNH leases space in an office
building under a 30-year lease expiring in 2002. WMECO's principal
plants and a major portion of its other properties are owned in
fee, although one hydroelectric plant is leased. NAEC owns a
35.98201 percent interest in Seabrook 1, and approximately 719 acres
of exclusion area land located around the unit. In addition, CL&P,
PSNH, and WMECO have certain substation equipment, data processing
equipment, nuclear fuel, nuclear control room simulators, vehicles,
and office space that are leased. With few exceptions, the
System's companies' lines are located on or under streets or
highways, or on properties either owned, leased, or in which the
company has appropriate rights, easements, or permits from the
owners.
CL&P's properties are subject to the liens of CL&P's first
mortgage indenture and, with respect to properties formerly owned
by The Hartford Electric Light Company (HELCO), to the lien of
HELCO's first mortgage indenture. PSNH's properties are subject to
the lien of its first mortgage indenture. In addition, PSNH's
outstanding term loan and revolving credit agreement borrowings are
secured by a second lien, junior to the lien of the first mortgage
indenture, on PSNH property located in New Hampshire. WMECO's
properties are subject to the lien of its first mortgage indenture.
NAEC's First Mortgage Bond are secured by a lien on the Seabrook 1
interest described above, and all rights of NAEC under the Seabrook
Power Contract. In addition, CL&P's and WMECO's interests in
Millstone 1 are subject to second liens for the benefit of lenders
under agreements related to pollution control revenue bonds.
Various ones of these properties are also subject to minor
encumbrances which do not substantially impair the usefulness of
the properties to the owning company.
The System companies' properties are well maintained and are
in good operating condition.
<PAGE>72
<TABLE>
ELECTRIC PROPERTIES
<CAPTION>
The following represents the miles of electric lines operated and other
physical data as of December 31, 1993, for the System companies:
Total
CL&P PSNH WMECO HWP System
---- ---- ----- --- ------
<S> <C> <C> <C> <C> <C>
TRANSMISSION SYSTEM:
Substations
-----------
Number 37 49 15 1 102
Aggregate Capacity
(kVA) 16,329,857 4,991,221 3,507,152 197,000 25,025,230
Overhead Lines
--------------
(Circuit Miles)
345 kV 392 252 105 - 749
230 kV - 9 - - 9
115 kV 1,131 713 328 15 2,187
69 kV 101 - 35 - 136
Underground Lines
-----------------
(Cable Miles)
138 kV 41 - - - 41
115 kV 117 - 28 - 145
69 kV 8 - - - 8
DISTRIBUTION SYSTEM:
Substations
Number 243 134 51 6 434
Aggregate Capacity 6,873,752 776,310 1,407,705 142,350 9,200,117
(kVA)
Overhead Lines
--------------
Pole Miles 18,130 10,574 3,592 19 32,315
Underground Lines
-----------------
Conduit Bank Miles 710 880 262 3 1,855
OTHER PHYSICAL DATA:
Line Transformers
-----------------
Number in Service 217,642 121,634 37,705 151 377,132
Aggregate Capacity
(kVA) 9,857,000 4,057,000 1,716,000 81,000 15,711,000
</TABLE>
<TABLE>
<CAPTION>
As of December 31, 1993, the electric generating plants of the System
operating companies and the System companies' entitlements from the generating
plants of the three operating Yankee regional nuclear generating companies were as follows:
<PAGE>73
Name Plate Claimed
Year Rating Capability
Name, Owner, Town, Location Type Installed (Kilowatts) (Kilowatts)
- --------------------------- ---- --------- ----------- -----------
(Winter
Ratings)
System Generating Plants:
- ------------------------
<S> <C> <C> <C> <C>
Millstone Plant (Waterford-Long Island Sound)
CL&P's Portion -
81% Ownership of Unit 1 Nuclear 1970 535,815 524,637
81% Ownership of Unit 2 Nuclear 1975 737,019 708,345
52.9330% Ownership of Unit 3 Nuclear 1986 663,303 608,041
--------- ---------
1,936,137 1,841,023
PSNH's Portion -
2.8475% Ownership of Unit 3 Nuclear 1986 35,682 32,709
WMECO's Portion -
19% Ownership of Unit 1 Nuclear 1970 125,685 123,063
19% Ownership of Unit 2 Nuclear 1975 172,881 166,155
12.2385% Ownership of Unit 3 Nuclear 1986 153,361 140,584
--------- ---------
451,927 429,802
Total Millstone Plant
100% Ownership of Unit 1 Nuclear 1970 661,500 647,700
100% Ownership of Unit 2 Nuclear 1975 909,900 874,500
68.0190% Ownership of Unit 3 Nuclear 1986 852,346 781,334
--------- ---------
2,423,746 2,303,534
Seabrook Plant
(Seabrook, New Hampshire)
CL&P's 4.05985% Ownership Portion Nuclear 1990 50,423 46,688
NAEC's 35.56942% Ownership Portion <F1>(a) Nuclear 1990 441,772 409,048
--------- ---------
Total Seabrook Plant 492,195 455,736
Northfield Plant (Northfield
and Erving - Connecticut River)
CL&P's 81% Ownership Portion Pumped Storage 1972-1973 685,260 874,800
WMECO's 19% Ownership Portion Pumped Storage 1972-1973 160,740 205,200
--------- ---------
Total Northfield Plant 846,000 1,080,000
Middletown Plant (CL&P) Steam 1958-1973 767,896 765,000
(Middletown - Connecticut River) Gas Turbine 1966 18,594 22,000
--------- ---------
Total Middletown Plant 786,490 787,000
Montville Plant (CL&P) Steam 1954-1971 489,900 492,000
(Montville - Thames River) 2 Diesels 1967 5,500 5,500
--------- ---------
Total Montville Plant 495,400 497,500
<PAGE>74
Name Plate Claimed
Year Rating Capability
Name, Owner, Town, Location Type Installed (Kilowatts) (Kilowatts)
- --------------------------- ---- --------- ----------- -----------
(Winter
Ratings)
Norwalk Harbor Plant (CL&P) Steam 1960-1963 326,400 336,000
(Norwalk - Long Island Sound) Gas Turbine 1966 16,320 17,000
--------- ---------
Total Norwalk Plant 342,720 353,000
Devon Plant (CL&P) Steam 1956-1958 207,000 218,000
(Milford - Housatonic River) Gas Turbine 1986 18,594 19,200
--------- ---------
Total Devon Plant 225,594 237,200
South Meadow Plant (CL&P) 4 Gas Turbines 1970 167,400 195,600
(Hartford - Connecticut River)
Shepaug Plant (CL&P) Hydro 1955 37,200 43,400
(Southbury - Housatonic River)
Rocky River Plant (CL&P) Pumped 1928-1929 31,000 30,350
(New Milford - Housatonic River) Storage
Stevenson Plant (CL&P) Hydro 1919-1936 30,500 28,900
(Monroe - Housatonic River)
Amoskeag Plant (PSNH) Hydro 1922-1924 16,000 17,500
(Manchester - Merrimack River)
Garvins Falls Plant (PSNH) Hydro 1925-1981 12,400 10,560
(Bow - Merrimack River)
Lost Nation Plant (PSNH) Combustion
(Northumberland) Turbine 1969 18,000 18,300
Merrimack Plant (PSNH) Steam 1960-1968 433,600 433,500
(Bow - Merrimack River) 2 Combustion
Turbines 1968-1969 37,200 44,600
--------- ---------
Total Merrimack Plant 470,800 478,100
Schiller Plant (PSNH) Steam 1952-1957 150,000 145,100
(Portsmouth - Piscataqua River) Combustion
Turbine 1970 21,250 22,000
--------- ---------
Total Schiller Plant 171,250 167,100
<PAGE>75
NamePlate Claimed
Year Rating Capability
Name, Owner, Town, Location Type Installed (Kilowatts) (Kilowatts)
- --------------------------- ---- --------- ----------- -----------
(Winter
Ratings)
Wyman #4 Plant
(Yarmouth, ME)
PSNH's 3.1433% Ownership Portion Steam 1978 19,900 19,465
Smith Plant (PSNH) Hydro 1948 15,000 15,170
(Berlin - Androscoggin River)
White Lake Plant (PSNH) Combustion
(Tamworth) Turbine 1968 18,600 22,150
Newington Plant (PSNH) Steam 1974 414,000 406,000
(Newington - Piscataqua River)
Turners Falls Plant (WMECO) Hydro 1905-1917 56,573 59,250
(Montague - Connecticut River)
West Springfield Plant (WMECO) Steam 1957 113,636 107,000
(West Springfield - Connecticut River) Gas Turbine 1968 18,594 22,000
--------- ---------
Total West Springfield Plant 132,230 129,000
Cobble Mountain Plant (WMECO)<F2>(b) Hydro 1930 33,000 33,960
(Granville - Westfield Little River)
Mt. Tom Plant (HWP) Steam 1960 136,000 147,000
(Holyoke - Connecticut River)
Hadley Falls Plant (HWP) Hydro 1952-1983 30,800 31,500
(Holyoke - Connecticut River)
23 Small Hydro Plants 74,156 80,570
7 Internal Combustion Plants
(gas turbine, combustion turbine, and jet) 175,314 196,600
--------- ---------
Total System Generating Plants 7,672,268 7,844,445
--------- ---------
<PAGE>76
NamePlate Claimed
Year Rating Capability
Name, Owner, Town, Location Type Installed (Kilowatts) (Kilowatts)
- --------------------------- ---- --------- ----------- -----------
(Winter
Ratings)
Regional Nuclear Generating Plants <F3>(c)
Connecticut Yankee Atomic Power Company Nuclear 1968
(Haddam, Connecticut)
CL&P's 34.5% Ownership Portion 207,104 201,204
PSNH's 5.0% Ownership Portion 30,015 29,160
WMECO's 9.5% Ownership Portion 57,028 55,404
--------- ---------
294,147 285,768
--------- ---------
Maine Yankee Atomic Power Company Nuclear 1972
(Wiscasset, Maine)
CL&P's 12.0% Ownership Portion 87,289 94,832
PSNH's 5.0% Ownership Portion 36,371 39,514
WMECO's 3.0% Ownership Portion 21,822 23,708
--------- ---------
145,482 158,054
--------- ---------
Vermont Yankee Nuclear Power
Corporation Nuclear 1972
(Vernon, Vermont)
CL&P's 9.5% Ownership Portion 48,120 44,356
PSNH's 4.0% Ownership Portion 20,231 18,648
WMECO's 2.5% Ownership Portion 12,677 11,685
--------- ---------
81,028 74,689
--------- ---------
Total Regional Nuclear Generating Plants 520,657 518,511
--------- ---------
TOTAL GENERATING PLANTS 8,192,925 8,362,956
========= =========
Summary
CL&P 5,291,543 5,456,703
PSNH 1,301,149 1,298,536
NAEC 441,772 409,048
WMECO 978,705 1,008,109
HWP 179,756 190,560
--------- ---------
TOTAL GENERATING PLANTS 8,192,925 8,362,956
========= =========
_________________________
<FN>
<F1>(a) In February 1994, NAEC purchased VEG&T's 0.41259% ownership share of
Seabrook, representing a current capability of 4,745 kW. If NAEC had owned this
additional share of Seabrook at December 31, 1993, NAEC's and the NU system's
ownership shareof Seabrook would have been 35.98201% and 40.04186%, respectively, representing
current generating capability of 413,793 kW and 460,481 kW, respectively. In addition,
the current generating capability for the NU system and total capability including
Yankee regional nuclear generating companies would have been 7,849,190 kW and 8,367,701
kW, respectively. For more information concerning VEG&T, see "Item 1. Business, Electric
Operations - Nuclear Generation, Seabrook."
<F2>(b) The Cobble Mountain plant is leased from the City of Springfield,
Massachusetts.
<F3>(c) Represents CL&P's, PSNH's, and WMECO's entitlements in the generating
plants of the three operating Yankee regional nuclear generating companies.
<PAGE>77
Franchises
NU's operating subsidiaries hold numerous franchises in the
territories served by them. See also "Competition and Marketing -
Retail Wheeling" and "Legal Proceedings."
CL&P. Subject to the power of alteration, amendment or repeal by
the General Assembly of Connecticut and subject to certain approvals,
permits and consents of public authority and others prescribed by
statute, CL&P has, subject to certain exceptions not deemed material,
valid franchises free from burdensome restrictions to sell electricity
in the respective areas in which it is now supplying such service.
In addition to the right to sell electricity as set forth above,
the franchises of CL&P include, among others, rights and powers to
manufacture, generate, purchase, transmit and distribute electricity,
to sell electricity at wholesale to other utility companies and
municipalities and to erect and maintain certain facilities on public
highways and grounds, all subject to such consents and approvals of
public authority and others as may be required by law. The franchises
of CL&P include the power of eminent domain.
PSNH. Subject to the power of alteration, amendment or repeal by
the General Court of the State of New Hampshire and subject to certain
approvals, permits and consents of public authority and others
prescribed by statute, PSNH has, subject to certain exceptions not
deemed material, valid franchises free from burdensome restrictions to
sell electricity in the respective areas in which it is now supplying
such service.
In addition to the right to sell electricity as set forth above,
the franchises of PSNH include, among others, rights and powers to
manufacture, generate, purchase, transmit and distribute electricity,
to sell electricity at wholesale to other utility companies and
municipalities and to erect and maintain certain facilities on certain
public highways and grounds, all subject to such consents and
approvals of public authority and others as may be required by law.
The franchises of PSNH include the power of eminent domain.
NNECO. Subject to the power of alteration, amendment or repeal
by the General Assembly of Connecticut and subject to certain
approvals, permits and consents of public authority and others
prescribed by statute, NNECO has a valid franchise free from
burdensome restrictions to sell electricity to utility companies doing
an electric business in Connecticut and other states.
In addition to the right to sell electricity as set forth above,
the franchise of NNECO includes, among others, rights and powers to
manufacture, generate and transmit electricity, and to erect and
maintain facilities on certain public highways and grounds, all
subject to such consents and approvals of public authority and others
as may be required by law.
WMECO. WMECO is authorized by its charter to conduct itselectric
business in the territories served by it, and has
locations in the public highways for transmission and distribution
lines. Such locations are granted pursuant to the laws of
Massachusetts by the Department of Public Works of Massachusetts or
local municipal authorities and are of unlimited duration, but the
<PAGE>78
rights thereby granted are not vested. Such locations are for
specific lines only, and for extensions of lines in public highways
further similar locations must be obtained from the Department of
Public Works of Massachusetts or the local municipal authorities. In
addition, WMECO has been granted easements for its lines in the
Massachusetts Turnpike by the Massachusetts Turnpike Authority.
HWP and Holyoke Power and Electric Company (HP&E). HWP, and its
wholly owned subsidiary HP&E, are authorized by their charters to
conduct their businesses in the territories served by them. HWP's
electric business is subject to the restriction that sales be made by
written contract in amounts of not less than 100 horsepower, except
for municipal customers in the counties of Hampden or Hampshire,
Massachusetts and except for customers who occupy property in which
HWP has a financial interest, by ownership or purchase money mortgage.
HWP also has certain dam and canal and related rights, all subject to
such consents and approvals of public authorities and others as may be
required by law. The two companies have locations in the public
highways for their trans-mission and distribution lines. Such
locations are granted pursuant to the laws of Massachusetts by the
Department of Public Works of Massachusetts or local municipal
authorities and are of unlimited duration, but the rights thereby
granted are not vested. Such locations are for specific lines only
and, for extensions of lines in public highways, further similar
locations must be obtained from the Department of Public Works of
Massachusetts or the local municipal authorities. The two companies
have no other utility franchises.
NAEC. NAEC is authorized to own and operate its interest in
Seabrook 1.
<PAGE>79
ITEM 3 - LEGAL PROCEEDINGS
1. Litigation Relating to Electric and Magnetic Fields
On December 9, 1991, NU and CL&P were sued in Connecticut Superior Court
by Melissa Bullock, a nineteen year old woman, and her mother Suzanne
Bullock, both residents of 28 Meadow Street in Guilford, Connecticut. The
plaintiffs allege that they have lived in close proximity to CL&P's Meadow
Street substation and distribution lines since 1979. The suit claims that
Melissa Bullock suffers from a form of brain cancer, and that the cancer and
related physical and psychological injuries were "brought on as a result of
exposure in her home to electromagnetic radiation generated by the
defendants." Suzanne Bullock claims various physical and psychological
injuries, and a diminution in the value of her property. The various counts
against NU and CL&P include allegations of negligence, products liability,
nuisance, unfair trade practices and strict liability. The suit seeks
monetary damages, both compensatory and punitive, in as-yet unspecified
amounts, as well as an injunction to cease emission of "dangerous levels" of
electric and magnetic fields (EMF) into the plaintiffs' home.
The plaintiffs are represented in part by counsel with a nationwide
emphasis on similar litigation, and management considers this lawsuit to be a
test case. The case is presently in the pre-trial discovery process, with
trial anticipated in 1995.
On January 14, 1992, a second lawsuit involving two other plaintiffs was
served on NU and CL&P, also alleging cancer from EMF emanating from CL&P's
Meadow Street substation and distribution lines (the Walston case). The
plaintiffs in the Walston case also live or lived on Meadow Street. They are
represented by the same counsel as the Bullocks, and the claims are nearly
identical to the Bullocks' suit. In a decision issued on October 21, 1993,
the court granted the Company's motion to strike certain counts of the
plaintiff's complaint alleging causes of action based on ultrahazardous
activity and unfair trade practices. This case is also in the pretrial
discovery process; a trial date is not yet known.
Management believes that the allegations that EMF caused or contributed
to the plaintiffs' illnesses are not supported by current scientific studies.
NU and CL&P intend to defend the lawsuits vigorously. For information on EMF
studies and state and federal initiatives, see "Item 1 Business -
Regulatory and Environmental Matters - Electric and Magnetic Fields."
2. Massachusetts Municipal Wholesale Electric Company
On January 8, 1992, a suit was filed in Massachusetts Superior Court by
Massachusetts Municipal Wholesale Electric Company and a number of its
member municipalities, all of which are members of NEPOOL, against other
members of NEPOOL alleging, in summary, that the plaintiffs have been damaged
by NEPOOL's establishment of a minimum size for generating units to be
considered for designation as "Pool-Planned" units. That designation
entitles the owners of an interest in a unit to have their shares of the
output of the unit transmitted to them under a transmission rate that is
generally more favorable than the rates that would be available to them in
the absence of such a designation. The complaint names NU's operating
subsidiaries, CL&P, PSNH, WMECO, HWP and HP&E, as defendants.
After settlement negotiations broke down in April 1993, the defendants
<PAGE>80
moved to dismiss the suit on jurisdictional and other grounds. On December
1, 1993, the Superior Court held that it had jurisdiction to decide the
plaintiffs' claims, but ordered the plaintiffs to join additional NEPOOL
Participants as parties in this action. The defendants are presently
awaiting the court's decision on their motion to dismiss the suit for failure
to state a claim.
In an effort to respond to the concerns that prompted the complaint, the
defendants proposed the 30th Amendment to the NEPOOL Agreement. On June 21,
1993, the plaintiffs moved to enjoin the defendants from filing the 30th
Amendment with state or federal regulatory authorities. The Superior Court
entered the preliminary injunction on July 2, 1993. The defendants
petitioned a Single Justice of the Appeals court for relief from the Order of
the Superior Court, and on September 22, 1993, the Single Justice vacated the
preliminary injunction. The plaintiffs have appealed the Order of the Single
Justice, and their appeal is presently pending before the full bench of the
Appeals Court. After the preliminary injunction was vacated, 29 participants
that were also defendants in the Massachusetts litigation filed the 30th
Amendment with FERC. The Commission has requested additional information
concerning the 30th Amendment, and the Amendment has not yet become
effective.
3. "Municipal Rate" Litigation
CL&P has initiated a challenge in federal court to the DPUC's approval
of an electricity purchase contract for a 13.85 MW resource recovery facility
under Connecticut's so-called "municipal rate law." Under this law, CL&P
would be required to purchase electricity from the resource recovery facility
at a rate equal to the retail rate that CL&P charges municipalities for
electricity, which is significantly higher than CL&P's avoided costs. The
DPUC ordered CL&P to pay the municipal rate for electricity generated from
trash of towns that are CL&P customers. CL&P filed a Federal District Court
action challenging the validity of the municipal rate statute in January
1990. In May 1993, the judge informed the parties that he would require the
parties to ask FERC to resolve the issues in this case. On July 12, 1993,
CL&P filed a Request for Declaratory Ruling with FERC asking FERC to
determine that the municipal rate law was invalid. The FERC has not taken
any action on CL&P's petition.
4. CL&P's Connecticut DPUC Rate Proceeding
In June, 1993 the DPUC approved a multi-year rate plan for CL&P with
increases of 2.01, 2.04 and 2.06 percent, totaling $141.3 million in
additional revenues over three years, beginning July 1, 1993. Two appeals
(one by the City of Hartford and the Connecticut Office of Consumer Counsel
on the multi-year plan and one by CL&P on four issues) filed in the case have
been consolidated in Hartford Superior Court. Oral arguments were held on
October 15, 1993 and February 14, 1994 on CL&P's motion to dismiss the
Hartford/OCC appeal on jurisdictional grounds. Establishment of a briefing
schedule is awaiting a decision on CL&P's motion to dismiss. For additional
information on CL&P's 1992-1993 retail rate case, see Item 1, "Business -
Rates - Connecticut Retail Rates".
5. Housatonic Railroad
Housatonic Railroad (Housatonic) owns and operates an independent
freight and tourist service rail line extending from New Milford to Canaan,
Connecticut. Housatonic is suing CL&P and NUSCO for damages allegedly
<PAGE>81
arising from the partial collapse of a canal at CL&P's Falls Village
hydroelectric facility in 1989. Housatonic claims that the resultant flood
rendered its rail line inoperable. The complaint alleges that CL&P and NUSCO
promised to restore the railroad to operating condition within a few weeks to
a few months and, in any event, before completing the restoration of the
canal. Housatonic maintains that, despite these alleged representations and
the cooperation of Housatonic in the restoration project, CL&P and NUSCO
completely reconstructed the canal before restoring the railroad to operating
condition. Rail service was allegedly interrupted for a year. Housatonic
claims that this interruption deprived the railroad of "growth and
development" it would have otherwise experienced.
Housatonic is seeking relief on the common law grounds of negligence,
strict liability for ultrahazardous activity, nuisance, trespass,
and unjust enrichment. Housatonic alleges damages of $2-$4 million for its
unjust enrichment claim. The case is currently in discovery. NUSCO and
CL&P intend to defend this case vigorously.
6. Connecticut Indian Land Claims
Numerous lawsuits asserting land claims in Connecticut have been either
filed in state and federal court or threatened by a group called the Golden
Hill Paugussett Tribe of Indians (the "Paugussetts"). These actions could
impact the title of certain NU system companies named in the suits to certain
real estate in eight Connecticut towns. Title to the properties of thousands
of other owners, including homeowners, has been similarly threatened. To date,
CL&P has been specifically named as a defendant in only one case, a class
action suit affecting approximately 1,500 property owners in Southbury. On
October 28, 1993, this action was dismissed; however, the dismissal has been
appealed. The outcome of the present or potential litigation either by the
Paugussetts or by other groups claiming to be "Indian tribes" cannot be
predicted at this time. However, a number of possible defenses exist to
Indian land claims in Connecticut, and the Paugussetts' success on the merits
appears unlikely.
7. Litigation Relating to the Reorganization of PSNH
An appeal has been filed against PSNH, et al., by three of PSNH's former
common shareholders, Messrs. Richards, Kaufman and Rochman (RKR), from a
judgment rendered by the U.S. Bankruptcy Court for the District of New
Hampshire. The judgment enjoined RKR and their fellow participants from
commencing a threatened class action against NU and its subsidiaries and
others. RKR's action alleged violations of the Securities Exchange Act of
1934 and sought damages in the amount of $300 million in connection with the
reorganization of PSNH.
After entry of the judgment, another shareholder, Mr. Mascioni, Trustee,
represented by Richards from the RKR group, commenced a class action in U.S.
District Court for the Southern District of New York against the System and
certain of its employees and advisors, alleging the same claims and seeking
the same damages earlier threatened by RKR. An Order of Contempt was
obtained from the Bankruptcy Court directing Mascioni and Richards to
withdraw the action, which they have done. Mascioni and Richards have filed
an appeal from the Order of Contempt. If RKR or Mascioni are successful in
reversing the Judgment or the Order of Contempt, they have stated that they
will commence an action against the System and certain of its employees and
advisors. The System intends vigorously to defend the appeals and if either
<PAGE>82
appeal is successful, it intends vigorously to defend any action by RKR or
Mascioni.
8. Litigation Challenging New Hampshire Property Tax
On January 27, 1992, the United States Supreme Court agreed to exercise
its "original jurisdiction" to hear a suit filed by Attorneys General from
Connecticut, Massachusetts and Rhode Island that asked the Court to overturn
a new property tax on Seabrook. A Special Master, appointed by the U.S.
Supreme Court, rendered his opinion that the New Hampshire law, which created
the Seabrook Tax and granted a credit for the amount paid in Seabrook Tax
against any Business Profits Tax owed, is unconstitutional.
In April, 1993 the matter was settled by the parties before the
United States Supreme Court acted on the report of the Special Master. The
settlement provided for a full refund to all the parties taxed over a two-
year period. The credit for the tax against the New Hampshire Business
Profits Tax was repealed.
9. Termination of the PSNH Chapter 11 Case
PSNH filed a petition for reorganization under Chapter 11 of the
Bankruptcy Code on January 28, 1988. PSNH's reorganization was substantially
completed by NU's acquisition of PSNH on June 5, 1992.
Since the acquisition, five remaining final fee applications have been
pending before the U.S. Bankruptcy Court for the District of New Hampshire,
seeking final fees, expenses and enhancements from PSNH in connection with
the PSNH Chapter 11 bankruptcy case. The law firm of Stutman Treister &
Glatt was seeking an enhancement of $3,155,293 over the $4,344,707 in fees
and $363,928 in expenses billed for legal representation of PSNH, and First
Boston Corp. was seeking $4,500,000 for merger and acquisition services
rendered to PSNH. Paul L. Gioia sought an enhancement of $200,000 over and
above the $268,875 in fees allowed based on his hourly rates under the court
order authorizing his employment as examiner. The United Illuminating
Company was seeking a "benefit to the estate" allowance to cover its costs
and expenses of making its competing bid for PSNH. Rothchild, Inc.,
financial advisor to the Official Committee of Equity Security Holders, was
seeking an enhancement of $1,000,000 over and above the $2,090,000 paid to it
in fees under the order authorizing its retention.
On August 30, 1993, the United States Bankruptcy Court for the District
of New Hampshire issued an "Omnibus Order on Final Fee Awards and Related
Matters". The Order allowed Stutman Treister and Glatt the fees and expenses
they had billed for representation of PSNH over the term of the case in the
amount of $4,344,707 in fees and $363,928 in expenses and denied any
additional fees, including the requested fee enhancement. First Boston Corp.
was denied any additional fees beyond those already collected by it as a
financial advisor during the course of the bankruptcy proceedings. Paul L.
Gioia was awarded an additional $200,000 for his services as examiner during
the proceedings. The United Illuminating Company was denied any fees as an
unsuccessful bidder for PSNH. Rothchild, Inc. was awarded the $1,000,000
enhancement requested on the grounds that exceptional results were obtained
for the equity holders under the circumstances of the PSNH bankruptcy. On
October 1, 1993 the Bankruptcy Court granted PSNH's Application for Final
Decree, closing the bankruptcy proceeding.
<PAGE>83
10. Utility Property - Tax Appeal Matters
On October 15, 1993, the Merrimack County Superior Court issued a
decision dismissing PSNH's appeals of the property taxes assessed against it
by the Town of Bow, New Hampshire for the years 1988, 1989, 1990 and 1991.
The decision rejects the "unit method" of valuation (essentially book cost),
which is the method predominantly used for PSNH's property throughout New
Hampshire, and approves the "reproduction cost method" of valuation. This
change in methodology would result in property tax valuations approximately
three times greater than net book cost, with a commensurate rise in property
taxes in Bow. PSNH has two generating facilities in the Town of Bow:
Merrimack Station, consisting of two coal-fired units with a total capacity
of 459 megawatts, and the Garvins Falls hydroelectric station with an
installed capacity of 12.1 megawatts. PSNH filed an appeal with the New
Hampshire Supreme Court on October 5, 1993. The appeal was accepted by the
New Hampshire Supreme Court on January 26, 1994, with the Company's briefs
due March 7, 1994.
In another property tax matter, Connecticut statues require that every
town revalue all property on its "grand list" at least once every ten years.
In late 1991, the Town of Haddam, Connecticut, where Connecticut Yankee is
located, performed its grand list revaluation. In preparation for this
revaluation, NUSCO property tax personnel had a series of meetings with
the town's Assessor in an attempt to reach an agreement concerning
Connecticut Yankee's value for property tax purposes. In October 1991, the
town's valuation contractor, United Appraisal, toured the Connecticut Yankee
facility. United Appraisal placed a fair market value of $433 million on
Connecticut Yankee. In January 1992, the town's selectmen appropriated funds
to perform a second appraisal of Connecticut Yankee by an engineering
consulting firm.. The town engaged the engineering firm of Dean and
Associates to perform this second valuation. Following a tour of Connecticut
Yankee and receipt of written material from NU, the Dean report was completed
on February 27, 1992. Dean placed a fair market value of $840 million on CY.
The town Assessor accepted Dean's fair market value.
The Company appealed the Assessor's decision to the Haddam Board of
Tax Review. It is Connecticut Yankee's position that the fair value of
Connecticut Yankee is best approximated by the facility's net book value of
$243 million. On May 21, 1992, following a March 18, 1992, hearing, the
Board of Tax Review rejected Connecticut Yankee's appeal and upheld the
Assessor's decision.
Based upon an estimate of the town's mill rate, as valued, Connecticut
Yankee's annual property tax payment is approximately $7.8 million. If
valued at net book value, the tax would be approximately $2.3 million.
The Company appealed the Board of Tax Review's decision to the
Connecticut Superior Court on July 15, 1992. The case is currently in
discovery and no trial schedule has been established.
11. Other Legal Proceedings
The following sections of Item 1 "Business" discuss additional legal
proceedings: "Rates" for information about rate and fuel adjustment clause
proceedings and the reorganization of PSNH's largest customer, NHEC;
"Resource Plans -- Future Needs" for information on proceedings involving
integrated resource planning; "Electric Operations -- Generation and
<PAGE>84
Transmission" for information about proceedings relating to power
transmission issues; "Electric Operations -- Nuclear Generation" for
information related to various Seabrook joint owners, high-level and low-
level radioactive waste disposal, decommissioning matters and NRC regulation;
and "Regulatory and Environmental Matters" for information about proceedings
involving surface water and air quality, toxic substances and hazardous
waste, electric and magnetic fields, licensing of hydroelectric projects, and
other matters.
ITEM 4. Submission of Matters to a Vote of Security Holders (Fourth
Quarter 1993)
A special meeting of Common, Preferred and Class A Preferred
Shareholders of CL&P was held on December 15, 1993, to vote on (1) a
proposal to amend the Certificate of Incorporation as it relates to issuance
or assumption of unsecured indebtedness that would permanently eliminate the
10% limitation on unsecured borrowings for securities with maturities of
less than 10 years and (2) a proposal to consent to the issuance or
assumption of unsecured indebtedness that would authorize the Company to
continue for a period ending March 31, 2004 to issue or assume unsecured
indebtedness in an amount up to 20% of aggregate capitalization.
The votes cast at the meeting were as follows:
FOR AGAINST ABSTAIN
Proposal (1) Common Stock 12,222,930 0 0
Senior Stock 8,468,442 4,174,126 139,210
Proposal (2) Senior Stock 10,503,710 1,581,318 696,750
A special meeting of Common, Preferred and Class A Preferred
Shareholders of WMECO was held on December 15, 1993, to vote on (1) a
proposal to amend the By-laws and Articles of Organization as they relate to
(1) a proposal to amend the Certificate of Incorporation as it relates to
issuance or assumption of unsecured indebtedness that would permanently
eliminate the 10% limitation on unsecured borrowings for securities with
maturities of less than 10 years, (2) a proposal to consent to the issuance
or assumption of unsecured indebtedness that would authorize the Company to
continue for a period ending February 10, 2004 to issue or assume unsecured
indebtedness in an amount up to 20% of aggregate capitalization and (3) a
proposal regarding the location of shareholder meetings .
The votes cast at the meeting were as follows:
FOR AGAINST ABSTAIN
Proposal (1) Common Stock 1,072,471 0 0
Senior Stock 2,485,059 1,096,056 12,865
Proposal (2) Senior Stock 2,680,268 795,767 117,945
Proposal (3) Common Stock 1,072,471 0 0
Senior Stock 2,878,229 625,453 112,074
<PAGE>85
Each Proposal 1 failed to attain the necessary two-thirds approving vote
of all outstanding shares of each class of stock voting, and thus failed to
carry. Each Proposal 2 attained the necessary approving vote of a majority
of all outstanding shares of Senior Stock, and thus carried.
In the case of WMECO's Proposal 3, it attained the necessary two-thirds
approving vote of all outstanding shares of each class of stock voting, and
thus carried.
<PAGE>86
PART II
Item 5. Market for the Registrants' Common Stock and Related
Shareholder Matters
NU. NU declared and paid quarterly dividends of $0.44 in 1993
and $0.44 in 1992. On January 24, 1994, the Board of Trustees
declared a dividend of $0.44 per share, payable on March 31, 1994 to
holders of record on March 1, 1994. The declaration of future
dividends may vary depending on capital requirements and income as
well as financial and other conditions existing at the time.
Information with respect to dividend restrictions for NU and its
subsidiaries is contained in Item 1. Business under the caption
"Financing Program--Financing Limitations" and in Note (b) to the
"Consolidated Statements of Common Shareholders' Equity" on page 34 of
NU's 1993 Annual Report to Shareholders and additional information
with respect to common shares is contained under the caption
"Shareholder Information" on page 54 of NU's 1993 Annual Report to
Shareholders, which information is incorporated herein by reference.
CL&P, PSNH, WMECO, and NAEC. The information required by this
item is not applicable because the common stock of CL&P, PSNH, WMECO,
and NAEC is held solely by NU.
Item 6. Selected Financial Data
NU. Reference is made to information under the heading "Selected
Consolidated Financial Data" contained on pages 50 and 51 of NU's 1993
Annual Report to Shareholders, which information is incorporated
herein by reference.
CL&P. Reference is made to information under the heading
"Selected Financial Data" contained on page 40 of CL&P's 1993 Annual
Report, which information is incorporated herein by reference.
PSNH. Reference is made to information under the heading
"Selected Financial Data" contained on pages 37 and 38 of PSNH's 1993
Annual Report, which information is incorporated herein by reference.
WMECO. Reference is made to information under the heading
"Selected Financial Data" contained on page 34 of WMECO's 1993 Annual
Report, which information is incorporated herein by reference.
NAEC. Reference is made to information under the heading
"Selected Financial Data" contained on page 23 of NAEC's 1993 Annual
Report, which information is incorporated herein by
reference.
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations
NU. Reference is made to information under the heading
"Management's Discussion and Analysis" contained on pages 18 through
25 in NU's 1993 Annual Report to Shareholders, which information is
incorporated herein by reference.
<PAGE>87
CL&P. Reference is made to information under the heading
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" contained on pages 32 through 39 in CL&P's 1993
Annual Report, which information is incorporated herein by reference.
PSNH. Reference is made to information under the heading
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" contained on pages 30 through 35 in PSNH's 1993
Annual Report, which information is incorporated herein by reference.
WMECO. Reference is made to information under the heading
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" contained on pages 28 through 33 in WMECO's
1993 Annual Report, which information is incorporated herein by
reference.
NAEC. Reference is made to information under the heading
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" contained on pages 18 through 22 in NAEC's 1993
Annual Report, which information is incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data
NU. Reference is made to information under the headings "Company
Report," "Report of Independent Public Accountants," "Consolidated
Statements of Income," "Consolidated Statements of Cash Flows,"
"Consolidated Statements of Income Taxes," "Consolidated Balance
Sheets," "Consolidated Statements of Capitalization," "Consolidated
Statements of Common Shareholders' Equity," "Notes to Consolidated
Financial Statements," and "Consolidated Statements of Quarterly
Financial Data" contained on pages 26 through 49 in NU's 1993 Annual
Report to Shareholders, which information is incorporated herein by
reference.
CL&P. Reference is made to information under the headings
"Balance Sheets," "Statements of Income," "Statements of Cash Flows,"
"Statements of Common Stockholder's Equity," "Notes to Financial
Statements," "Report of Independent Public Accountants," and
"Statements of Quarterly Financial Data" contained on pages 1 through
31 and page 40 in CL&P's 1993 Annual Report, which information is
incorporated herein by reference.
PSNH. Reference is made to information under the headings
"Balance Sheets," "Statements of Income," "Statements of Cash Flows,"
Statements of Common Equity," "Notes to Financial Statements," "Report
of Independent Public Accountants," "Independent Auditors' Report,"
and "Statements of Quarterly Financial Data" contained on pages 1
through 29 and page 39 in PSNH's 1993 Annual Report, which information
is incorporated herein by reference.
WMECO. Reference is made to information under the headings
"Balance Sheets," "Statements of Income," "Statements of Cash Flows,"
"Statements of Common Stockholder's Equity," "Notes to Financial
Statements," "Report of Independent Public Accountants," and
"Statements of Quarterly Financial Data" contained on pages 1 through
27 and page 34 in WMECO's 1993 Annual Report, which information is
incorporated herein by reference.
<PAGE>88
NAEC. Reference is made to information under the headings
"Balance Sheet," "Statement of Income," "Statement of Cash Flows,"
"Statement of Common Stockholder's Equity," "Notes to Financial
Statements," "Report of Independent Public Accountants," and
"Statement of Quarterly Financial Data" contained on pages 1 through
17 and page 23 in NAEC's 1993 Annual Report which information is
incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
No event that would be described in response to this item has
occurred with respect to NU, CL&P, PSNH, WMECO, or NAEC.
<PAGE>89
PART III
Item 10. Directors and Executive Officers of the Registrants
NU.
In addition to the information provided below concerning the executive
officers of NU, incorporated herein by reference are pages 1 through 12 of
the definitive proxy statement for solicitation of proxies by NU's Board of
Trustees, dated April 1, 1994 and filed with the Commission pursuant to Rule
14a-6 under the Securities Exchange Act of 1934 (the Act).
First First
Positions Elected Elected
Name Held an Officer a Trustee
William B. Ellis CHB, T 06/15/76 04/26/77
Bernard M. Fox P, CEO, T 05/01/83 05/20/86
CL&P.
First First
Positions Elected Elected
Name Held an Officer a Director
Robert G. Abair D - 01/01/89
Robert E. Busch EVP, CFO, D 06/01/87 06/01/87
John P. Cagnetta SVP, D 06/17/81 05/09/83
William B. Ellis CH, D 06/15/76 06/15/76
Bernard M. Fox VC, D 05/15/81 05/01/83
William T. Frain, Jr. D - 02/01/94
Cheryl W. Grise SVP, D 06/01/91 01/01/94
John B. Keane D - 08/01/92
Francis L. Kinney SVP 04/24/74 -
Frank R. Locke (1) D 10/01/83 05/01/83
Hugh C. MacKenzie P, D 07/01/88 06/06/90
John W. Noyes VP, CONT 07/01/87 -
John F. Opeka D - 06/10/85
PSNH.
First First
Positions Elected Elected
Name Held an Officer a Director
Robert E. Busch EVP, CFO, D 06/05/92 06/05/92
John C. Collins D - 10/19/92
William B. Ellis CH, D 06/05/92 06/05/92
William T. Frain, Jr. P, COO, D 03/18/71 02/01/94
Bernard M. Fox VC, CEO, D 06/05/92 06/05/92
Gerald Letendre D - 10/19/92
Frank R. Locke (1) P, COO, D 06/05/92 06/05/92
Hugh C. MacKenzie D - 02/01/94
Jane E. Newman D - 10/19/92
Dale F. Nitzschke D - 10/19/92
John W. Noyes VP, CONT 06/05/92 -
Robert P. Wax D - 02/01/93
<PAGE>90
WMECO.
First First
Positions Elected Elected
Name Held an Officer a Director
Robert G. Abair D - 01/01/89
Robert E. Busch EVP, CFO, D 06/01/87 06/01/87
John P. Cagnetta SVP, D 06/17/81 05/09/83
William B. Ellis CH, D 06/15/76 06/15/76
Bernard M. Fox VC, D 05/15/81 05/01/83
William T. Frain D - 02/01/94
Cheryl W. Grise SVP, D 06/01/91 01/01/94
John B. Keane D - 08/01/92
Francis L. Kinney SVP 04/24/74 -
Frank R. Locke (1) D - 05/01/83
Hugh C. MacKenzie P, D 07/01/88 06/06/90
John W. Noyes VP, CONT 04/01/92 -
John F. Opeka D - 06/10/85
NAEC.
First First
Positions Elected Elected
Name Held an Officer a Director
Robert E. Busch P, CFO, D 10/21/91 10/16/91
John P. Cagnetta SVP, D 10/21/91 10/16/91
William B. Ellis CH, D 10/21/91 10/16/91
Ted C. Feigenbaum SVP, D 10/21/91 10/16/91
Bernard M. Fox VC, CEO, D 10/21/91 10/16/91
William T. Frain, Jr. D - 02/01/94
Cheryl W. Grise SVP, D 10/21/91 01/01/94
Francis L. Kinney SVP 10/21/91 -
John B. Keane D - 08/01/92
Frank R. Locke (1) SVP, CAO, D 10/21/91 10/16/91
Hugh C. MacKenzie D - 01/01/94
John W. Noyes VP, CONT 10/21/91 -
John F. Opeka EVP, D 10/21/91 10/16/91
KEY: CAO - Chief Administrative Officer EVP - Executive Vice President
CEO - Chief Executive Officer P - President
CFO - Chief Financial Officer SVP - Senior Vice President
CH - Chairman T - Trustee
CHB - Chairman of the Board VC - Vice Chairman
COO - Chief Operating Officer VP - Vice President
CONT - Controller
D - Director
(1) Resigned effective February 1, 1994.
<PAGE>91
Name Age Business Experience During Past 5 Years
Robert G. Abair (1) 55 Elected Vice President and Chief Administrative
Officer of WMECO in 1988.
Robert E. Busch (2) 47 Elected President and Chief Financial Officer
of NAEC in 1994; elected Executive Vice
President and Chief Financial Officer of NU,
CL&P, PSNH, and WMECO in 1992; previously
Executive Vice President and Chief Financial
Officer of NAEC since 1992; Senior Vice
President and Chief Financial Officer of NU,
CL&P and WMECO since 1990.
John P. Cagnetta (3) 61 Elected Senior Vice President of CL&P and WMECO
in 1987 and of NAEC in 1991.
John C. Collins (4) 49 Chief Executive Officer, The Hitchcock Clinic,
Dartmouth - Hitchcock Medical Center since
1977.
William B. Ellis 53 Elected Chairman of the Board of NU in 1993;
elected Chairman of CL&P, NAEC, PSNH and WMECO
in 1993; previously Chairman of the Board and
Chief Executive Officer of NU and Chairman and
Chief Executive Officer of CL&P and WMECO since
1987, NAEC since 1991 and PSNH since 1992.
Ted C. Feigenbaum 43 Elected Senior Vice President of NAEC in 1991;
previously Senior Vice President and Chief
Nuclear Officer of PSNH June, 1992 to
August, 1992; previously President and Chief
Executive Officer - New Hampshire Yankee
Division of PSNHOctober, 1990 to June, 1992 and
Chief Nuclear Production Officer of PSNH
January, 1990 to June, 1992; Senior Vice
President and Chief Operating Officer - New
Hampshire Yankee Division of PSNH (1989-1990)
and Vice President (1987-1989) - New Hampshire
Yankee Division of PSNH.
Bernard M. Fox (5) 51 Elected Vice Chairman of CL&P and WMECO, and
Vice Chairman and Chief Executive Officer of
NAEC, in 1994; previously Chief Executive
Officer of NU, CL&P, PSNH, WMECO and NAEC
in 1993; previously President and Chief
Operating Officer of NU, CL&P and WMECO in 1990
and NAEC since 1991; Vice Chairman of PSNH
since 1992; previously President and Chief
Operating and Financial Officer of NU, CL&P and
WMECO since 1987.
William T. Frain, Jr.(6) 52 Elected President and Chief Operating Officer
of PSNH in 1994; previously Senior Vice
President of PSNH since 1992; previously
Treasurer of PSNH since 1991 and Vice President
of PSNH since 1982.
<PAGE>92
Cheryl W. Grise 41 Elected Senior Vice President-Human Resources
and Administrative Services of CL&P, WMECO and
NAEC in 1994; previously Vice President-
Human Resources of NAEC since 1992 and of CL&P
and WMECO since 1991.
John B. Keane (7) 47 Elected Vice President and Treasurer of NU,
CL&P, PSNH, WMECO and NAEC in 1993; previously
Vice President, Secretary and General
Counsel-Corporate of NU, CL&P, PSNH, WMECO and
NAEC since February 1, 1993; previously Vice
President, Assistant Secretary and General
Counsel-Corporate of PSNH and NAEC, Vice
President, Secretary and General
Counsel-Corporate of NU and CL&P, and Vice
President, Secretary, Assistant Clerk and
General Counsel-Corporate of WMECO since 1992;
previously Associate General Counsel of NUSCO
since 1985.
Francis L. Kinney (8) 61 Elected Senior Vice President-
Governmental Affairs of CL&P, WMECO and NAEC in
1994; previously Vice President-Public Affairs
of NAEC since 1992 and of CL&P and WMECO since
1978.
Gerald Letendre 52 President, Diamond Casting & Machine Co., Inc.
since 1972.
Frank R. Locke 66 Resigned effective February 1, 1994; previously
President and Chief Operating Officer of PSNH
since in 1992 and Senior Vice President and
Chief Administrative Officer-New Hampshire of
NAEC since 1991; and of NUSCO since
1990; previously Senior Vice President of
NUSCO since 1988.
Hugh C. MacKenzie (9) 51 Elected President of CL&P and WMECO in 1994;
previously Senior Vice President-Customer
Service Operations of CL&P and WMECO since
1990; previously Vice President of CL&P and
WMECO since 1988.
Jane E. Newman (10) 48 President, Coastal Broadcasting Corporation
since 1992; previously Assistant to the
President of the United States for Management
and Administration from 1989 to 1991 and
President of the Business and Industry
Association of New Hampshire from 1985 to 1988.
Dale F. Nitzschke 56 President, University of New Hampshire, Durham,
New Hampshire since 1990; previously President,
Marshall University, Huntington, West Virginia
from 1984 to 1990.
John W. Noyes 46 Elected Vice President and Controller of NU,
CL&P, PSNH, WMECO and NAEC in 1992; previously
Vice President of CL&P and WMECO since 1987.
<PAGE>93
John F. Opeka (11) 53 Elected Executive Vice President - Nuclear of
NAEC in 1991 and of NUSCO in 1986, previously
Executive Vice President - Nuclear of CL&P
and WMECO from 1986 to 1993.
Robert P. Wax 45 Elected Vice President, Secretary and General
Counsel of NU and CL&P, Vice President,
Secretary, Assistant Clerk and General Counsel
of WMECO and Vice President, Assistant
Secretary and General Counsel of PSNH and NAEC
in 1993; previously Vice President and General
Counsel-Regulatory of NU, CL&P, PSNH, WMECO and
NAEC since 1992; previously Associate General
Counsel of NUSCO since 1985.
_____________________
(1) Trustee of Easthampton Savings Bank.
(2) Director Connecticut Yankee Atomic Power Company.
(3) Director of Connecticut Yankee Atomic Power Company.
(4) Director of Fleet Bank - New Hampshire.
(5) Chairman of the Board of The Institute of Living, and a Director of
Shawmut Bank Connecticut, N.A., Shawmut Bank, N.A. and Shawmut National
Corp., Mount Holyoke College, Connecticut Yankee Atomic Power Company and
The Dexter Corporation.
(6) Director of Connecticut Yankee Atomic Power Company, Maine Yankee Atomic
Power Company and Yankee Atomic Power Company.
(7) Director of Maine Yankee Atomic Power Company, Vermont Yankee Nuclear
Power Corporation and Yankee Atomic Power Company.
(8) Director of Mid-Conn Bank.
(9) Director of Connecticut Yankee Atomic Power Company.
(10) Director of Fleet Bank - New Hampshire, Perini Corporation and New
England Telephone.
(11) Director of Connecticut Yankee Atomic Power Company, Maine Yankee Atomic
Power Company, Vermont Yankee Nuclear Power Corporation and Yankee
Atomic Electric Company.
There are no family relationships between any director or executive
officer and any other director or executive officer of NU, CL&P, PSNH, WMECO
or NAEC.
Item 11. Executive Compensation
NU.
Incorporated herein by reference are pages 7 through 12 of the definitive
proxy statement for solicitation of proxies by NU's Board of Trustees, dated
April 1, 1994 and filed with the Commission pursuant to Rule 14a-6 under the
Act.
<PAGE>94
SUMMARY COMPENSATION TABLE
CL&P, PSNH, WMECO, and NAEC.
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
The following table presents the cash and non-cash compensation received
by the five highest-paid executive officers of CL&P, PSNH, WMECO and NAEC, in
accordance with rules of the Securities and Exchange Commission (SEC):
</TABLE>
<TABLE>
<CAPTION> Annual Compensation Long Term Compensation
------------------------------ ----------------------------------------
Awards Payouts
----------------------- ----------------
Name and Year Salary Bonus ($) Other Restricted Options/ Long All Other
Principal Position ($) (Note 1) Annual Award(s) Stock Term Compensa-
Compen- ($) Apprecia- Incentive tion ($)
sation (Note 1) tion Program (Note 3)
($) (Note 2) Rights(#) Payouts
($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ---------------- ------- ------- ---------- ------- ---------- --------- -------- ---------
Bernard M. Fox 1993 478,775 (Note 4) None None None 61,155 7,033
President and 1992 424,517 54,340 None None None 19,493 6,860
Chief Executive 1991 402,333 103,872 None 38,173 None 15,398 3,380
Officer (Note 5)
- --------------------------------------------------------------------------------------------------------
William B. Ellis 1993 521,250 (Note 4) None None None 87,363 None
Chairman 1992 522,212 97,029 None None None 30,707 None
(Note 5) 1991 500,000 185,519 None 54,608 None 24,451 None
- --------------------------------------------------------------------------------------------------------
John F. Opeka 1993 277,304 (Note 4) None None None 40,014 6,875
Executive Vice 1992 268,958 19,644 None None None 14,017 6,813
President 1991 260,600 49,676 None 28,498 None 11,184 3,385
- --------------------------------------------------------------------------------------------------------
Robert E. Busch 1993 255,915 (Note 4) None None None 32,337 7,072
Executive Vice 1992 236,654 27,934 None None None 10,040 6,866
President 1991 212,333 46,597 None 23,026 None 7,444 3,185
- --------------------------------------------------------------------------------------------------------
John P. Cagnetta 1993 208,900 (Note 4) None None None 29,679 6,134
Senior Vice 1992 200,462 21,635 None None None 10,730 6,014
President 1991 194,266 35,446 None 17,893 None 8,909 2,913
- --------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>95
Notes:
1. Until 1991, awards under the short-term programs of the Northeast tilities
Executive Incentive Compensation Program (EICP) were made in restricted
stock. In 1991, the Northeast Utilities Executive Incentive Plan (EIP)
was adopted, which did not require restricted stock awards. Awards under
the 1991 and 1992 short-term programs under the EIP were paid in 1992 and
1993, respectively, in the form of unrestricted stock and, in accordance
with the requirements of the SEC, are included as "bonus" in the years
earned.
2. The five executive officers listed in the table above each received an
award of restricted stock in May, 1991 (which vested in January, 1993),
under the EICP. The number of shares in each such award is shown below.
All restricted stock awards under the EICP vested prior to December 31,
1993.
Name Shares
B. M. Fox 1,807
W. B. Ellis 2,585
J. F. Opeka 1,349
R. E. Busch 1,090
J. P. Cagnetta 847
3. "All Other Compensation" consists of employer matching contributions under
the Northeast Utilities Service Company Supplemental Retirement and
Savings Plan (401(k) Plan), generally available to all eligible
employees. In 1993, the employer match for non-union employees was 100
percent of the first three percent of compensation contributed on a
before-tax basis.
4. Awards under the short-term program of the EIP have typically been made by
NU's Committee on Organization, Compensation and Board Affairs in April
each year. Based on preliminary estimates of corporate performance, and
assuming that the individual performance levels of Messrs. Opeka, Busch
and Cagnetta approximate those of other system officers, it is estimated
that the five executive officers listed in the table above would receive
the following awards: Mr. Fox - $180,780; Mr. Ellis - $160,693;
Mr. Busch - $64,946; Mr. Opeka - $64,946; and Dr. Cagnetta - $43,828.
5. Mr. Fox served as President and Chief Operating Officer of CL&P, NAEC and
WMECO and Vice Chairman and Chief Operating Officers of PSNH until July 1,
1993, when he became President and Chief Executive Officer of CL&P, NAEC
and WMECO and Vice Chairman and Chief Executive Officer of PSNH. Mr.
Ellis served as Chairman and Chief Executive Officer of these companies
until July 1, 1993, when he became Chairman. Amounts listed in the "Long
Term Incentive Program" column of the Summary Compensation Table for 1993
were received by these individuals prior to their change in
responsibilities. $267,500 of Mr. Ellis's 1993 salary was paid prior to
July 1, 1993, while he was Chief Executive Officer, and $253,750 was paid
after July 1, 1993. $217,500 of Mr. Fox's 1993 salary was paid prior to
July 1, 1993, and $261,275 was paid after Mr. Fox became Chief Executive
Officer on July 1, 1993.
<PAGE>96
PENSION BENEFITS
The following table shows the estimated annual retirement benefits
payable to an executive officer of NU, CL&P, WMECO, PSNH and NAEC upon
retirement, assuming that retirement occurs at age 65 and that the
officer is at that time not only eligible for a pension benefit under the
Northeast Utilities Service Company Retirement Plan (the Retirement Plan) but
also eligible for the "make-whole benefit" and the "target benefit"
under the Supplemental Executive Retirement Plan for Officers of Northeast
Utilities System Companies (the Supplemental Plan). The Supplemental Plan is
a non-qualified pension plan providing supplemental retirement income to System
officers. The "make-whole benefit" under the Supplemental Plan makes up for
benefits lost through application of certain tax code limitations on the
benefits that may be provided under the Retirement Plan, and is available to all
officers. The "target benefit" further supplements these benefits and is
available to officers at the Senior Vice President level and higher who are
selected by the NU Board of Trustees to participate in the target benefit and
who remain in the employ of NU companies until at least age 60 (unless the NU
Board of Trustees sets an earlier age). Each of the executive officers of NU,
CL&P, WMECO, PSNH and NAEC named in the summary compensation table above is
currently eligible for a target benefit. If an executive officer were not
eligible for a target benefit at the time of retirement, a lower level of
retirement benefits would be paid.
The benefits presented are based on a straight life annuity beginning at
age 65 and do not take into account any reduction for joint and survivorship
annuity payments.
Years of Credited Service
Final Average ------------------------------------------------------
Compensation 15 20 25 30 35
- ------------------ ------------------------------------------------------
$ 125,000 $ 45,000 $ 60,000 $ 75,000 $ 75,000 $ 75,000
$ 150,000 $ 54,000 $ 72,000 $ 90,000 $ 90,000 $ 90,000
$ 175,000 $ 63,000 $ 84,000 $105,000 $105,000 $105,000
$ 200,000 $ 72,000 $ 96,000 $120,000 $120,000 $120,000
$ 225,000 $ 81,000 $108,000 $135,000 $135,000 $135,000
$ 250,000 $ 90,000 $120,000 $150,000 $150,000 $150,000
$ 300,000 $108,000 $144,000 $180,000 $180,000 $180,000
$ 350,000 $126,000 $168,000 $210,000 $210,000 $210,000
$ 400,000 $144,000 $192,000 $240,000 $240,000 $240,000
$ 450,000 $162,000 $216,000 $270,000 $270,000 $270,000
$ 500,000 $180,000 $240,000 $300,000 $300,000 $300,000
$ 600,000 $216,000 $288,000 $360,000 $360,000 $360,000
$ 700,000 $252,000 $336,000 $420,000 $420,000 $420,000
$ 800,000 $288,000 $384,000 $480,000 $480,000 $480,000
Final average compensation for purposes of calculating the "target
benefit" is the highest average annual compensation of the participant during
any 36 consecutive months compensation was earned. Compensation taken into
account under the "target benefit" described above includes salary, bonus,
restricted stock awards, and long-term incentive payouts shown in the Summary
Compensation Table above, but does not include employer matching contributions
under the Northeast Utilities Service Company Supplemental Retirement and
Savings Plan (401(k)) Plan. In the event that an officer's employment
terminates because of disability, the retirement benefits shown above would be
offset by the amount of any disability benefits payable to the recipient that
are attributable to contributions made by NU and its subsidiaries under long
term disability plans and policies.
<PAGE>97
As of December 31, 1993, the five executive officers named in the Summary
Compensation Table above had the following years of credited service for
retirement compensation purposes: Mr. Fox - 29, Mr. Ellis - 17, Mr. Opeka -
23, Mr. Busch - 20 and Dr. Cagnetta - 21. Assuming that retirement were to
occur at age 65 for these officers, retirement would occur with 43, 29, 35, 38
and 25 years of credited service, respectively.
NU has entered into agreements with Messrs. Ellis and Fox to provide for
an orderly management succession. The agreement with Mr. Ellis calls for him
to work with the NU Board of Trustees and Mr. Fox to effect the orderly
transition of his responsibilities to Mr. Fox. In accordance with the
agreement, Mr. Ellis stepped down as Chief Executive Officer of NU, CL&P, WMECO,
PSNH and NAEC as of July 1, 1993. The agreement anticipates his retirement as
of August 1, 1995.
The agreement provides that, upon his retirement, Mr. Ellis will be
entitled to receive from NU and its subsidiaries a target benefit under the
Supplemental Plan. His target benefit will be based on the greater of his
actual final average compensation or an amount determined as if his salary had
increased each year since 1991 at a rate equal to the average rate of the
increases of all other target benefit participants and as if he had received
incentive awards each year based on this modified salary, but with the same
performance as the Chief Executive Officer at the time. The agreement also
provides specified death and disability benefits for the period before Mr.
Ellis's 1995 retirement.
The agreement with Mr. Fox states that if he is terminated as Chief
Executive Officer without cause, he will be entitled to specified severance pay
and benefits. Those benefits consist primarily of (i) two years' base pay,
medical, dental and life insurance benefits, (ii) a supplemental retirement
benefit equal to the difference between the target benefit he would be entitled
to receive if he had reached the age of 55 on the termination date and the
actual target benefit to which he is entitled as of the termination date, and
(iii) a target benefit under the Supplemental Plan, notwithstanding that he
might not have reached age 60 on the termination date and notwithstanding other
forfeiture provisions of that plan. The agreement also provides specified death
and disability benefits. The agreement terminates two years after NU gives
Mr. Fox a notice of termination, but no earlier than the date he becomes 55.
The agreements do not address the officers' normal compensation and
benefits, which are to be determined by NU's Committee on Organization,
Compensation and Board Affairs and the NU Board of Trustees in accordance with
their customary practices.
Item 12. Security Ownership of Certain Beneficial Owners and Management
NU.
Incorporated herein by reference are pages 5 through 12 of the definitive
proxy statement for solicitation of proxies by NU's Board of Trustees, dated
April 1, 1994 and filed with the Commission pursuant to Rule 14a-6 under the
Act.
CL&P, PSNH, WMECO and NAEC.
As of February 28, 1994, the Directors of CL&P, PSNH, WMECO and NAEC,
beneficially owned the following number of shares of each class of equity
securities of NU. No equity securities of CL&P, PSNH or WMECO are owned by the
Directors and Executive Officers.
<PAGE>98
CL&P, PSNH, WMECO, and NAEC DIRECTORS AND NAMED EXECUTIVE OFFICERS
Amount and
Nature of
Title Of Name of Beneficial Percent of
Class Beneficial Owner Ownership (1) Class (2)
NU Common Robert G. Abair (3) (621) 4,271 shares
NU Common Robert E. Busch (772) 6,054 shares
NU Common John P. Cagnetta (4) (581) 3,979 shares
NU Common John C. Collins (5) 0 shares
NU Common William B. Ellis (6) (1,259) 14,837 shares
NU Common Ted C. Feigenbaum(7) 151 shares
NU Common Bernard M. Fox (8) (1,072) 17,428 shares
NU Common William T. Frain, Jr. 885 shares
NU Common Cheryl W. Grise (221) 1,349 shares
NU Common John B. Keane (9) (368) 1,146 shares
NU Common Francis L. Kinney (10) (303) 3,781 shares
NU Common Gerald Letendre (5) 0 shares
NU Common Hugh C. MacKenzie (4)(11) (779) 4,277 shares
NU Common Jane E. Newman (5) 0 shares
NU Common Dale F. Nitzschke (5) 0 shares
NU Common John W. Noyes (658) 2,789 shares
NU Common John F. Opeka (4)(12) (1,075) 16,463 shares
NU Common Robert P. Wax (5) (651) 1,436 shares
Amount beneficially owned by Directors
and Executive Officers as a group - CL&P (7,709) 77,259 shares
- PSNH (6,790) 69,299 shares
- WMECO (7,709) 77,259 shares
- NAEC (7,088) 73,139 shares
(1) Unless otherwise noted, each Director and Executive Officer of CL&P, PSNH,
WMECO and NAEC has sole voting and investment power with respect to the
listed shares. The numbers in parentheses reflect the number of shares
owned by each Director and Executive Officer under the Northeast
Utilities Service Company Supplemental Retirement and Savings Plan (401(k)
Plan), as to which the Officer has no investment power.
(2) As of February 28, 1994 there were 134,208,461 common shares of NU
outstanding. The percentage of such shares beneficially owned by any
Director or Executive Officer, or by all Directors and Executive Officers
of CL&P, PSNH, WMECO and NAEC as a group, does not exceed one percent.
(3) Mr. Abair is a Director of CL&P and WMECO only.
(4) Mr. Opeka and Dr. Cagnetta are not officers of PSNH, but each in his
capacity as an officer (with the stated title) of NUSCO, an affiliate of
PSNH, performs policy-making functions for PSNH.
(5) Messrs. Collins, Letendre, Nitzschke and Wax and Ms. Newman areDirectors
of PSNH only.
(6) Mr. Ellis shares voting and investment power with his wife for 1,117
shares.
(7) Mr. Feigenbaum is a Director and an Executive Officer of NAEC only.
<PAGE>99
(8) Mr. Fox shares voting and investment power with his wife for 3,031 of
these shares. In addition, Mr. Fox's wife has sole voting and investment
power for 140 shares, as to which Mr. Fox disclaims beneficial ownership.
(9) Mr. Keane is a Director of CL&P, WMECO and NAEC only.
(10) Mr. Kinney shares voting and investment power with his wife for 2,155
shares.
(11) Mr. MacKenzie shares voting and investment power with his wife for 1,259
shares.
(12) Mr. Opeka shares voting and investment power with his wife for 1,718
shares.
Item 13. Certain Relationships and Related Transactions
NU.
Incorporated herein by reference is page 14 of the definitive proxy
statement for solicitation of proxies by NU's Board of Trustees, dated April
1, 1994 and filed with the Commission pursuant to Rule 14a-6 under the Act.
CL&P, PSNH, WMECO and NAEC.
No relationships or transactions that would be described in response
to this item exist now or existed during 1993 with respect to CL&P, PSNH, WMECO
and NAEC.
<PAGE>100
PART IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K
(a) 1. Financial Statements:
The Report of Independent Public Accountants and
financial statements of NU, CL&P, PSNH, WMECO, and NAEC
are hereby incorporated by reference and made a part of
this report (see "Item 8. Financial Statements and
Supplementary Data").
Reports of Independent Public Accountants
on Schedules S-1
Consents of Independent Public Accountants S-3
2. Schedules:
Financial Statement Schedules for NU
(Parent), NU and Subsidiaries, CL&P,
PSNH, WMECO, and NAEC are listed
in the Index to Financial Statement
Schedules S-5
3. Exhibits Index E-1
(b) Reports on Form 8-K:
During the fourth quarter of 1993, the companies
filed Form 8-Ks dated December 2, 1993 disclosing
the following:
o On December 2, 1993, the Northeast Utilities
system announced a reorganization of its corporate
structure.
o On December 3, 1993, NNECO was informed by the NRC
that it was being assessed a civil penalty in
response to repair activities at Millstone 2.
In addition, the Form 8-K dated December 2, 1993 which
was filed by PSNH also discussed the following:
o On June 8, 1992, PSNH changed its independent
public accountant.
<PAGE>101
NORTHEAST UTILITIES
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
NORTHEAST UTILITIES
-------------------
(Registrant)
Date: March 18, 1994 By /s/ William B. Ellis
-------------- ---------------------------
William B. Ellis
Chairman of the Board
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the dates
indicated.
Date Title Signature
---- ----- ---------
March 18, 1994 Trustee and Chairman /s/ William B. Ellis
- -------------- of the Board -------------------------
William B. Ellis
March 18, 1994 Trustee, President /s/ Bernard M. Fox
- -------------- and Chief Executive -------------------------
Officer Bernard M. Fox
March 18, 1994 Executive Vice /s/ Robert E. Busch
- -------------- President and Chief -------------------------
Financial Officer Robert E. Busch
March 18, 1994 Vice President and /s/ John B. Keane
- -------------- Treasurer -------------------------
John B. Keane
March 18, 1994 Vice President and /s/ John W. Noyes
- -------------- Controller -------------------------
John W. Noyes
<PAGE>102
NORTHEAST UTILITIES
SIGNATURES (CONT'D)
Date Title Signature
---- ----- ---------
March 18, 1994 Trustee /s/ Cotton Mather Cleveland
- -------------- ---------------------------
Cotton Mather Cleveland
March 18, 1994 Trustee /s/ George David
- -------------- ---------------------------
George David
March 18, 1994 Trustee /s/ Donald J. Donahue
- -------------- ---------------------------
Donald J. Donahue
March 18, 1994 Trustee /s/ Eugene D. Jones
- -------------- ---------------------------
Eugene D. Jones
March 18, 1994 Trustee /s/ Elizabeth T. Kennan
- -------------- ---------------------------
Elizabeth T. Kennan
Trustee
- -------------- ---------------------------
Denham C. Lunt, Jr.
March 18, 1994 Trustee /s/ William J. Pape II
- -------------- ---------------------------
William J. Pape II
March 18, 1994 Trustee /s/ Robert E. Patricelli
- -------------- ---------------------------
Robert E. Patricelli
Trustee
- -------------- ---------------------------
Norman C. Rasmussen
Trustee
- -------------- ---------------------------
John F. Swope
<PAGE>103
THE CONNECTICUT LIGHT AND POWER COMPANY
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
THE CONNECTICUT LIGHT AND POWER COMPANY
---------------------------------------
(Registrant)
Date: March 18, 1994 By /s/ William B. Ellis
-------------- ---------------------
William B. Ellis
Chairman
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated.
Date Title Signature
---- ----- ---------
March 18, 1994 Chairman and Director /s/ William B. Ellis
- -------------- --------------------------
William B. Ellis
March 18, 1994 Vice Chairman and /s/ Bernard M. Fox
- -------------- Director --------------------------
Bernard M. Fox
March 18, 1994 President and Director /s/ Hugh C. MacKenzie
- -------------- --------------------------
Hugh C. MacKenzie
March 18, 1994 Executive Vice /s/ Robert E. Busch
- -------------- President, Chief --------------------------
Financial Officer Robert E. Busch
and Director
March 18, 1994 Vice President and /s/ John W. Noyes
- -------------- Controller --------------------------
John W. Noyes
<PAGE>104
THE CONNECTICUT LIGHT AND POWER COMPANY
SIGNATURES (CONT'D)
Date Title Signature
---- ----- ---------
- ------------------- Director --------------------------
Robert G. Abair
March 18, 1994 Director /s/ John P. Cagnetta
- ------------------- --------------------------
John P. Cagnetta
March 18, 1994 Director /s/ William T. Frain, Jr.
- ------------------- --------------------------
William T. Frain, Jr.
March 18, 1994 Director /s/ Cheryl W. Grise
- ------------------- -----------------------
Cheryl W. Grise
March 18, 1994 Director /s/ John B. Keane
- ------------------- -----------------------
John B. Keane
March 18, 1994 Director /s/ John F. Opeka
- ------------------- -----------------------
John F. Opeka
<PAGE>105
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
---------------------------------------
(Registrant)
Date: March 18, 1994 By /s/ William B. Ellis
-------------- -------------------------
William B. Ellis
Chairman
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated.
Date Title Signature
---- ----- ---------
March 18, 1994 Chairman and Director /s/ William B. Ellis
- -------------- --------------------------
William B. Ellis
March 18, 1994 Vice Chairman, Chief /s/ Bernard M. Fox
- -------------- Executive Officer and --------------------------
Director Bernard M. Fox
March 18, 1994 President, Chief /s/ William T. Frain, Jr.
- -------------- Operating Officer --------------------------
and Director William T. Frain, Jr.
March 18, 1994 Executive Vice /s/ Robert E. Busch
- -------------- President, Chief --------------------------
Financial Officer Robert E. Busch
and Director
March 18, 1994 Vice President and /s/ John W. Noyes
- -------------- Controller --------------------------
John W. Noyes
<PAGE>106
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
SIGNATURES (CONT'D)
Date Title Signature
---- ----- ---------
March 18, 1994 Director /s/ John C. Collins
- ------------------- --------------------------
John C. Collins
March 18, 1994 Director /s/ Gerald Letendre
- ------------------- --------------------------
Gerald Letendre
March 18, 1994 Director /s/ Hugh C. MacKenzie
- ------------------- --------------------------
Hugh C. MacKenzie
March 18, 1994 Director /s/ Jane E. Newman
- ------------------- --------------------------
Jane E. Newman
March 18, 1994 Director /s/ Dale S. Nitzschke
- ------------------- --------------------------
Dale S. Nitzschke
March 18, 1994 Director /s/ Robert P. Wax
- ------------------- --------------------------
Robert P. Wax
<PAGE>107
WESTERN MASSACHUSETTS ELECTRIC COMPANY
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
WESTERN MASSACHUSETTS ELECTRIC COMPANY
--------------------------------------
(Registrant)
Date: March 18, 1994 By /s/ William B. Ellis
-------------- --------------------
William B. Ellis
Chairman
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated.
Date Title Signature
---- ----- ---------
March 18, 1994 Chairman and Director /s/ William B. Ellis
- -------------- --------------------------
William B. Ellis
March 18, 1994 Vice Chairman and /s/ Bernard M. Fox
- -------------- Director --------------------------
Bernard M. Fox
March 18, 1994 President and Director /s/ Hugh C. MacKenzie
- -------------- --------------------------
Hugh C. MacKenzie
March 18, 1994 Executive Vice /s/ Robert E. Busch
- -------------- President, Chief --------------------------
Financial Officer Robert E. Busch
and Director
March 18, 1994 Vice President and /s/ John W. Noyes
- -------------- Controller --------------------------
John W. Noyes
<PAGE>108
WESTERN MASSACHUSETTS ELECTRIC COMPANY
SIGNATURES (CONT'D)
Date Title Signature
---- ----- ---------
- ------------------- Director --------------------------
Robert G. Abair
March 18, 1994 Director /s/ John P. Cagnetta
- ------------------- --------------------------
John P. Cagnetta
March 18, 1994 Director /s/ William T. Frain, Jr.
- ------------------- --------------------------
William T. Frain, Jr.
March 18, 1994 Director /s/ Cheryl W. Grise
- ------------------- -----------------------
Cheryl W. Grise
March 18, 1994 Director /s/ John B. Keane
- ------------------- -----------------------
John B. Keane
March 18, 1994 Director /s/ John F. Opeka
- ------------------- -----------------------
John F. Opeka
<PAGE>109
NORTH ATLANTIC ENERGY CORPORATION
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
NORTH ATLANTIC ENERGY CORPORATION
---------------------------------
(Registrant)
Date: March 18, 1994 By /s/ William B. Ellis
-------------- ---------------------
William B. Ellis
Chairman
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated.
Date Title Signature
---- ----- ---------
March 18, 1994 Chairman and Director /s/ William B. Ellis
- -------------- --------------------------
William B. Ellis
March 18, 1994 Vice Chairman, Chief /s/ Bernard M. Fox
- -------------- Executive Officer and --------------------------
Director Bernard M. Fox
March 18, 1994 President, Chief /s/ Robert E. Busch
- -------------- Operating Officer --------------------------
and Director Robert E. Busch
March 18, 1994 Vice President and /s/ John W. Noyes
- -------------- Controller --------------------------
John W. Noyes
<PAGE>110
NORTH ATLANTIC ENERGY CORPORATION
SIGNATURES (CONT'D)
Date Title Signature
---- ----- ---------
March 18, 1994 Director /s/ John P. Cagnetta
- -------------- --------------------------
John P. Cagnetta
- -------------- Director --------------------------
Ted C. Feigenbaum
March 18, 1994 Director /s/ William T. Frain. Jr.
- -------------- --------------------------
William T. Frain, Jr.
March 18, 1994 Director /s/ Cheryl W. Grise
- -------------- --------------------------
Cheryl W. Grise
March 18, 1994 Director /s/ John B. Keane
- -------------- --------------------------
John B. Keane
March 18, 1994 Director /s/ Hugh C. MacKenzie
- -------------- --------------------------
Hugh C. MacKenzie
March 18, 1994 Director /s/ John F. Opeka
- -------------- --------------------------
John F. Opeka
<PAGE>111
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULES
We have audited in accordance with generally accepted auditing
standards, the financial statements included in Northeast Utilities'
annual report to shareholders and The Connecticut Light and Power
Company's, Western Massachusetts Electric Company's, North Atlantic
Energy Corporation's, and Public Service Company of New Hampshire's
annual reports, incorporated by reference in this Form 10-K, and have
issued our reports thereon dated February 18, 1994. Our reports on the
financial statements include an explanatory paragraph with respect to the
change in methods of accounting for property taxes, postretirement
benefits other than pensions, income taxes, and employee stock ownership
plans, as applicable to each company, as explained in Note 1 to the
related company's financial statements. Our audits were made for the
purpose of forming an opinion on each company's statements taken as a
whole. The schedules listed in the index to financial statement schedules are
the responsibility of each company's management and are presented for
purposes of complying with the Securities and Exchange Commission's rules
and are not part of each company's basic financial statements. The
schedules have been subjected to the auditing procedures applied in the
audits of each company's basic financial statements and, in our opinion,
fairly state in all material respects the financial data required to be
set forth therein in relation to each company's basic financial
statements taken as a whole.
/s/ ARTHUR ANDERSEN & CO.
ARTHUR ANDERSEN & CO.
Hartford, Connecticut
February 18, 1994
<PAGE>S-1
INDEPENDENT AUDITORS' REPORT ON SCHEDULES
The Board of Directors
Public Service Company of New Hampshire:
Under date of February 7, 1992, we reported on the balance sheet and
statement of capitalization of Public Service Company of New Hampshire as
of December 31, 1991 (not presented in the 1993 annual report to
stockholders) and the related statements of income, cash flows and common
stock equity for the periods January 1, 1991 to May 15, 1991 and May 16,
1991 to December 31, 1991, as contained in the annual report to
stockholders of Public Service Company for the year 1993. These
financial statements and our report thereon are incorporated by reference
herein. In connection with our audits of the aforementioned financial
statements, we have also audited the related financial statement
schedules as listed in the accompanying index. These financial statement
schedules are the responsibility of the Company's management. Our
responsiblity is to express an opinion on these financial statement
schedules based on our audit.
In our opinion, such financial statement schedules, when considered in
relation to the basic financial statements taken as a whole, present
fairly, in all material respects, the information set forth therein.
/s/ KPMG Peat Marwick
KPMG Peat Marwick
Boston, Massachusetts
February 7, 1992
<PAGE>S-2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference of our reports in this Form 10-K, into previously filed
Registration Statement No. 33-13444, No. 33-46291 , No. 33-59430, and No.
33-50853 of The Connecticut Light and Power Company, No. 33-34886, No.
33-51185 and No. 33-25619 of Western Massachusetts Electric Company, and No.
33-34622 and No. 33-40156 of Northeast Utilities.
/s/ ARTHUR ANDERSEN & CO.
ARTHUR ANDERSEN & CO.
Hartford, Connecticut
March 18, 1994
<PAGE>S-3
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Public Service Company of New Hampshire:
We consent to the use of our reports included or incorporated by
reference herein.
/s/ KPMG Peat Marwick
KPMG Peat Marwick
Boston, Massaschusetts
March 18, 1994
<PAGE>S-4
INDEX TO FINANCIAL STATEMENT SCHEDULES
Schedule Page
- -------- ----
III. Financial Information of Registrant:
Northeast Utilities (Parent) Balance
Sheets 1993 and 1992 S-7
Northeast Utilities (Parent) Statements
of Income 1993, 1992, and 1991 S-8
Northeast Utilities (Parent) Statements
of Cash Flows 1993, 1992, and 1991 S-9
V. Utility Plant 1993, 1992, and 1991:
Northeast Utilities and Subsidiaries S-10 -- S-12
The Connecticut Light and Power Company S-13 -- S-15
Public Service Company of New Hampshire S-16 -- S-20
Western Massachusetts Electric Company S-21 -- S-23
North Atlantic Energy Corporation S-24 -- S-25
V. Nuclear Fuel 1993, 1992, and 1991:
Northeast Utilities and Subsidiaries S-26 -- S-28
The Connecticut Light and Power Company S-29 -- S-31
Public Service Company of New Hampshire S-32 -- S-36
Western Massachusetts Electric Company S-37 -- S-39
North Atlantic Energy Corporation S-40 -- S-41
VI. Accumulated Provision for Depreciation
of Utility Plant 1993, 1992, and 1991:
Northeast Utilities and Subsidiaries S-42 -- S-44
The Connecticut Light and Power Company S-45
Public Service Company of New Hampshire S-46 -- S-48
Western Massachusetts Electric Company S-49
North Atlantic Energy Corporation S-50
VIII. Valuation and Qualifying Accounts and Reserves
1993, 1992, and 1991:
Northeast Utilities and Subsidiaries S-51 -- S-53
The Connecticut Light and Power Company S-54 -- S-56
Public Service Company of New Hampshire S-57 -- S-61
Western Massachusetts Electric Company S-62 -- S-64
<PAGE>S-5
Schedule Page
- -------- ----
IX. Short-Term Borrowings 1993, 1992, and 1991:
Northeast Utilities and Subsidiaries S-65
The Connecticut Light and Power Company S-66
Public Service Company of New Hampshire S-67
Western Massachusetts Electric Company S-68
North Atlantic Energy Corporation S-69
X. Supplementary Income Statement Information
1993, 1992, and 1991:
Northeast Utilities and Subsidiaries S-70
The Connecticut Light and Power Company S-71
Public Service Company of New Hampshire S-72
Western Massachusetts Electric Company S-73
North Atlantic Energy Corporation S-74
All other schedules of the companies' for which provision is made in
the applicable regulations of the Securities and Exchange Commission are
not required under the related instructions or are not applicable, and
therefore have been omitted.
<PAGE>S-6
SCHEDULE III
NORTHEAST UTILITIES (PARENT)
----------------------------
FINANCIAL INFORMATION OF REGISTRANT
-----------------------------------
BALANCE SHEETS
--------------
AT DECEMBER 31, 1993 AND 1992
------------------------------
(Thousands of Dollars)
<TABLE>
<CAPTION>
1993 1992
---------- ----------
<S> <C> <C>
ASSETS
- ------
Other Property and Investments:
Investments in subsidiary companies, at
equity............................................... $2,505,950 $2,428,669
Investments in transmission companies, at equity...... 26,535 27,655
Other, at cost........................................ 1,710 1,742
----------- -----------
2,534,195 2,458,066
----------- -----------
Current Assets:
Cash and special deposits............................. 72 73
Notes receivable from affiliated companies............ 19,625 52,600
Taxes receivable...................................... 485 -
Receivables from affiliated companies................. 32,638 7,626
Prepayments........................................... 73 11
----------- -----------
52,893 60,310
----------- -----------
Deferred Charges:
Accumulated deferred income taxes..................... 5,859 2,660
Unamortized debt expense.............................. 45 50
Other................................................. 42 165
----------- -----------
5,946 2,875
----------- -----------
Total Assets..................................... $2,593,034 $2,521,251
=========== ===========
CAPITALIZATION AND LIABILITIES
- ------------------------------
Capitalization:
Common Shareholders' Equity:
Common shares, $5 par value--Authorized
225,000,000 shares; 134,207,025 shares issued and
124,326,836 shares outstanding in 1993 and
133,862,919 shares issued and outstanding in 1992... $ 671,035 $ 669,315
Capital surplus, paid in.............................. 901,740 897,317
Deferred benefit plan--employee stock ownership plan.. (228,205) (240,399)
Retained earnings..................................... 879,518 847,744
----------- -----------
Total common shareholders' equity................... 2,224,088 2,173,977
Long-term debt........................................ 236,000 245,000
----------- -----------
Total capitalization................................ 2,460,088 2,418,977
----------- -----------
Current Liabilities:
Notes payable to banks................................ 72,500 70,500
Long-term debt and preferred stock--current portion... 9,000 5,000
Accounts payable...................................... 5,048 6,107
Accounts payable to affiliated companies.............. 42,459 14,334
Accrued taxes......................................... - 2,283
Accrued interest...................................... 3,311 3,491
Other................................................. 13 13
----------- -----------
132,331 101,728
----------- -----------
Other Deferred Credits.................................. 615 546
----------- -----------
Total Capitalization and Liabilities $2,593,034 $2,521,251
=========== ===========
</TABLE>
<PAGE>S-7
SCHEDULE III
NORTHEAST UTILITIES (PARENT)
----------------------------
FINANCIAL INFORMATION OF REGISTRANT
-----------------------------------
STATEMENTS OF INCOME
--------------------
YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
---------------------------------------------
(Thousands of Dollars Except Share Information)
<TABLE>
<CAPTION>
1993 1992 1991
------------- ------------- -------------
<S> <C> <C> <C>
Operating Revenues............... $ - $ - $ -
------------- ------------- -------------
Operating Expenses:
Other.......................... 2,677 (22,915) 3,128
Federal income taxes........... (7,564) 12,736 (2,231)
------------- ------------- -------------
Total operating epenses....... (4,887) (10,179) 897
------------- ------------- -------------
Operating Income (Loss).......... 4,887 10,179 (897)
------------- ------------- -------------
Other Income:
Equity in earnings of
subsidiaries.................. 263,725 238,624 234,552
Equity in earnings of
transmission companies........ 3,736 4,141 4,229
Other, net..................... 1,302 6,439 1,959
------------- ------------- -------------
Other income, net............ 268,763 249,204 240,740
------------- ------------- -------------
Income before interest
charges..................... 273,650 259,383 239,843
------------- ------------- -------------
Interest Charges................. 23,697 3,329 3,134
------------- ------------- -------------
Net Income ...................... 249,953 256,054 236,709
Tax benefit of Employee Stock
Ownership Plan dividends........ - 7,348 -
------------- ------------- -------------
Earnings For Common Shares....... $ 249,953 $ 263,402 $ 236,709
============= ============= =============
Earnings Per Common Share........ $ 2.02 $ 2.02 $ 2.12
============= ============= =============
Common Shares Outstanding
(average)....................... 123,947,631 130,403,488 111,453,550
============= ============= =============
</TABLE>
<PAGE>S-8
SCHEDULE III
NORTHEAST UTILITIES (PARENT)
FINANCIAL INFORMATION OF REGISTRANT
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
(Thousands of Dollars)
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
CASH FLOWS FROM OPERATIONS:
Net income . . . . . . . . . . . . . . $ 249,953 $ 256,054 $ 236,709
Adjusted for the following:
Equity in earnings of subsidiary
companies . . . . . . . . . . . . . (263,725) (238,624) (234,552)
Cash dividends received from
subsidiary companies. . . . . . . . 191,297 196,267 207,319
Deferred income taxes. . . . . . . . (3,199) 7,382 (2,232)
Other sources of cash. . . . . . . . 197 19,244 4,332
Other uses of cash . . . . . . . . . (3,915) (1,346) (4,292)
Changes in working capital:
Accounts receivable. . . . . . . . 7,963 165,021 (174,631)
Accounts payable . . . . . . . . . 27,066 (4,528) 19,392
Other working capital
(excludes cash) . . . . . . . . . (3,010) (4,203) 1,776
-------- --------- --------
Net cash flows from operations. . . . 202,627 395,267 53,821
-------- --------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Common shares. . . . . . . . . . . . 22,252 271,128 42,420
Long-term debt . . . . . . . . . . . (5,000) 75,000 175,000
Financing expenses . . . . . . . . . - (4,597) -
Net increase (decrease) in
short-term debt. . . . . . . . . . 2,000 70,500 (67,000)
Cash dividends paid on common
shares. . . . . . . . . . . . . . . (218,179) (229,074) (195,056)
-------- -------- --------
Net cash flows from (used for) financing
activities. . . . . . . . . . . . . . (198,927) 182,957 (44,636)
-------- -------- --------
INVESTMENT ACTIVITIES:
Investments in subsidiaries. . . . . (4,853) (592,715) (2,601)
Other, at cost. . . . . . . . . . . 1,152 (83) -
-------- -------- --------
Net cash flows used for investment
activities. . . . . . . . . . . . . (3,701) (592,798) (2,601)
-------- -------- --------
NET INCREASE IN CASH (DECREASE):
For the Period . . . . . . . . . . . (1) (14,574) 6,584
Cash beginning of period . . . . . . 73 14,647 8,063
-------- -------- --------
Cash end of period . . . . . . . . . $ 72 $ 73 $ 14,647
======== ======== ========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid (received) during the year
for interest . . . . . . . . . . . . . $ 23,808 $ (11,419) $ 2,118
======== ======== ========
Income tax refund . . . . . . . . . . . $ - $ (4,277) $ -
======== ======== ========
</TABLE>
<PAGE>S-9
<TABLE>
NORTHEAST UTILITIES AND SUBSIDIARIES SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR FUEL)
YEAR ENDED DECEMBER 31, 1993
(THOUSANDS OF DOLLARS)
<CAPTION>
- --------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct) at close
Classification of period at Cost Retirements describe of period
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Utility Plant in Service
Electric $ 8,945,429 $ 231,332 $ 59,917 $ (2,768)<F1> $ 9,114,133
(8)<F2>
65 <F3>
Other 132,537 7,054 1,273 (1,185)<F1> 146,011
184<F4>
8,694<F6>
Construction Work in Progress
Electric 140,967 37,326 - (603)<F200> 177,690
Other 23,407 7,647 - (184)<F4> 30,394
(476)<F2>
Utility Plant Held for Future Use
Electric 5,876 - - (725)<F5> 5,151
Other 218 - - - 218
----------- ---------- ---------- ---------- -----------
TOTAL $ 9,248,434 $ 283,359 $ 61,190 $ 2,994 $ 9,473,597
=========== ========== ========== ========== ===========
<FN>
<F1> Amortization of capital leases charged to expense and construction overheads.
<F2> Adjust COE additions.
<F3> Correction of prior retirements.
<F4> Transfers between Utility Plant in Service and Constructin Work in Progress.
<F5> Transfer of land associated with two cancelled qualifying cogeneration facilities
to deferred debits.
<F6> Transfer between Utility Plant in Service and Miscellaneous Balance Sheet Accounts.
<F200>Transfer between Construction Work in Progress and Miscellaneous Balance
Sheet accounts.
</TABLE>
<PAGE>S-10
<TABLE>
NORTHEAST UTILITIES AND SUBSIDIARIES SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR FUEL)
YEAR ENDED DECEMBER 31, 1992
(THOUSANDS OF DOLLARS)
<CAPTION>
- ----------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct) at close
Classification of period at Cost Retirements describe of period
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Utility Plant in Service
Electric $6,898,392 $ 334,367 $ 120,319 $ 1,837,120 <F7> $ 8,945,429
(1,198)<F8>
(2,137)<F9>
(796)<F10>
Other 103,561 27,781 2 (740)<F9> 132,537
1,937 <F10>
Construction Work in Progress
Electric 164,264 (34,196) - 9,522 <F7> 140,967
774 <F10>
603 <F201>
Other 36,579 (11,204) - (1,968)<F10> 23,407
Utility Plant Held for Future Use
Electric 527 662 - 4,687 <F7> 5,876
Other 218 - - - 218
---------- ----------- ----------- ----------- -----------
TOTAL $7,203,541 $ 317,410 $ 120,321 $ 1,847,804 $ 9,248,434
========== =========== =========== =========== ===========
<FN>
<F7> Plant assets - Public Service Company of New Hampshire acquisition.
<F8> Sale of plant assets.
<F9> Amortization of capital leases charged to expense and construction overheads.
<F10> Transfers between Utility Plant in Service and Construction Work in Progress.
<F201>Transfers between Construction Work in Progress and Miscellaneous Balance
Sheet accounts.
</TABLE>
<PAGE>S-11
<TABLE>
NORTHEAST UTILITIES AND SUBSIDIARIES SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR FUEL)
YEAR ENDED DECEMBER 31, 1991
(THOUSANDS OF DOLLARS)
<CAPTION>
- -------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct) at close
Classification of period at Cost Retirements describe of period
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Utility Plant in Service
Electric $ 6,752,985 $ 226,378 $ 79,159 $ (1,914)<F11> $ 6,898,392
18 <F12>
161 <F13>
(77)<F14>
Other 100,634 5,846 4,279 (1,685)<F11> 103,561
3,052 <F12>
(7)<F14>
Construction Work in Progress
Electric 163,561 732 - (18)<F12> 164,264
(11)<F14>
Other 20,990 17,526 - (3,052)<F12> 36,579
1,115 <F15>
Utility Plant Held for Future Use
Electric 527 - - - 527
Other 218 - - - 218
----------- ---------- ---------- ----------- -----------
TOTAL $ 7,038,915 $ 250,482 $ 83,438 $ (2,418) $ 7,203,541
=========== ========== ========== =========== ===========
<F11> Amortization of capital leases charged to expense and construction overheads.
<F12> Transfer between Utility Plant in Service and Construction Work in Progress.
<F13> Transfer between Utility Plant in Service and Accumulated Provision for Depreciation.
<F14> Transfer between Utility Plant in Service and Miscellaneous Balance Sheet Accounts.
<F15> Transfer between Construction Work in Progress and Miscellaneous Balance Sheet Accounts.
</TABLE>
<PAGE>S-12
<TABLE>
THE CONNECTICUT LIGHT AND POWER COMPANY SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR FUEL)
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
<CAPTION>
- --------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of Period
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Utility Plant in Service
Electric $ 5,821,900 $ 138,104 $ 23,451 $ (367)<F16> $ 5,936,186
Construction Work in Progress
Electric 110,081 11,096 - - 121,177
Utility Plant Held for Future Use
Electric 883 - - (725)<F17> 158
----------- ---------- ---------- ---------- -----------
TOTAL $ 5,932,864 $ 149,200 $ 23,451 $ (1,092) $ 6,057,521
=========== ========== ========== ========== ===========
<F16> Amortization of capital leases charged to expense and construction overheads.
<F17> Transfer of land associated with two cancelled qualifying cogeneration facilities
to deferred debits.
</TABLE>
<PAGE>S-13
<TABLE>
THE CONNECTICUT LIGHT AND POWER COMPANY SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR FUEL)
YEAR ENDED DECEMBER 31, 1992
(THOUSANDS OF DOLLARS)
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct) at close
Classification of period at Cost Retirements describe of period
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Utility Plant in Service
Electric $ 5,660,946 $ 249,042 $ 87,127 $ (333)<F18> $ 5,821,900
(628)<F19>
Construction Work in Progress
Electric 131,600 (22,147) - 628 <F19> 110,081
Utility Plant Held for Future Use
Electric 159 724 - - 883
----------- ---------- ---------- ---------- -------------
TOTAL $ 5,792,705 $ 227,619 $ 87,127 $ (333) $ 5,932,864
=========== ========== ========== ========== =============
<F18> Amortization of capital leases charged to expense and construction overheads.
<F19> Transfer between Utility Plant in Service and Construction Work in Progress.
</TABLE>
<PAGE>S-14
<TABLE>
THE CONNECTICUT LIGHT AND POWER COMPANY SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR FUEL)
YEAR ENDED DECEMBER 31, 1991
(THOUSANDS OF DOLLARS)
<CAPTION>
- --------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of Period
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Utility Plant in Service
Electric $ 5,534,947 $ 191,364 $ 65,147 $ (287)<F20> $ 5,660,946
19 <F21>
160 <F22>
(110)<F23>
Construction Work in Progress
Electric 132,006 (387) - (19)<F21> 131,600
Utility Plant Held for Future Use
Electric 159 - - - 159
----------- ---------- ---------- ----------- -----------
TOTAL $ 5,667,112 $ 190,977 $ 65,147 $ (237) $ 5,792,705
=========== ========== ========== =========== ===========
<F20> Amortization of capital leases charged to expense and construction overheads.
<F21> Transfer between Utility Plant in Service and Construction Work in Progress.
<F22> Transfer between Utility Plant in Service and Accumulated Provision for Depreciation.
<F23> Transfer between Utility Plant in Service and Miscellaneous Balance Sheet accounts.
</TABLE>
<PAGE>S-15
<TABLE>
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR FUEL)
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
<CAPTION>
- -------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of Period
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Utility Plant in Service
Electric $1,883,035 $ 120,494 $ 27,770 $ (398)<F24> $ 1,975,426
65 <F25>
Construction Work in Progress
Electric 4,363 4,210 - - 8,573
Utility Plant Held for Future Use
Electric 4,624 - - - 4,624
--------- --------- --------- --------- -----------
TOTAL $1,892,022 $ 124,704 $ 27,770 $ (333) $ 1,988,623
========= ========= ========= ========= ===========
<F24> Amortization of capital leases charged to expense and construction overheads.
<F25> Correction of Prior Retirements.
</TABLE>
<PAGE>S-16
<TABLE>
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR FUEL)
FOR THE PERIOD JUNE 5, 1992 THROUGH DECEMBER 31, 1992
(Thousands of Dollars)
<CAPTION>
- --------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct)- at close
Classification of period<F26> at Cost Retirements describe of Period
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Utility Plant in Service
Electric $ 1,784,431 $ 56,506 $ 6,649 $ (701,336)<F27> $ 1,883,035
(188)<F30>
760,425 <F28>
(10,154)<F29>
Construction Work in Progress
Electric 9,522 (3,597) - (1,562)<F27> 4,363
Utility Plant Held for Future Use
Electric 4,686 (62) - - 4,624
----------- ---------- ---------- ---------- ------------
TOTAL $ 1,798,639 $ 52,847 $ 6,649 $ 47,185 $ 1,892,022
=========== ========== ========== ========== ============
<F26> Public Service Company of New Hampshire was acquired by Northeast Utilities on June 5, 1992.
<F27> Transferred to North Atlantic Energy Corporation.
<F28> Seabrook Power Contract.
<F29> Amortization of Seabrook Power Contract charged to expense.
<F30> Transferred to North Atlantic Energy Service Corporation.
</TABLE>
<PAGE>S-17
<TABLE>
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR FUEL)
FOR THE PERIOD JANUARY 1, 1992 THROUGH JUNE 4, 1992
(Thousands of Dollars)
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of Period
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Utility Plant in Service
Electric $ 1,764,828 $ 23,430 $ 3,827 $ - $ 1,784,431
Construction Work in Progress
Electric 7,697 1,825 - - 9,522
Utility Plant Held for Future Use
Electric 4,686 - - - 4,686
----------- ---------- ---------- ---------- -----------
TOTAL $ 1,777,211 $ 25,255 $ 3,827 $ - $ 1,798,639
=========== ========== ========== ========== ===========
</TABLE>
<PAGE>S-18
<TABLE>
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR FUEL)
FOR THE PERIOD MAY 16, 1991 THROUGH DECEMBER 31, 1991
(Thousands of Dollars)
<CAPTION>
- -----------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other change Balance
beginning Additions add (deduct) at close
Classification of period<F28> at Cost Retirements describe of Period
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Utility Plant in Service
Electric $ 1,745,493 $ 31,251 $ 11,916 $ - $ 1,764,828
Construction Work in Progress
Electric 16,514 (8,817) - - 7,697
Utility Plant Held for Future Use
Electric 4,253 433 - - 4,686
----------- ---------- ---------- ---------- -----------
TOTAL $ 1,766,260 $ 22,867 $ 11,916 $ - $ 1,777,211
=========== ========== ========== ========== ===========
<F28> Public Service Company of New Hampshire was reorganized on May 16, 1991.
</TABLE>
<PAGE>S-19
<TABLE>
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR FUEL
FOR THE PERIOD JANUARY 1, 1991 THROUGH MAY 15, 1991
(Thousands of Dollars)
<CAPTION>
- --------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of Period
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Utility Plant in Service
Electric $2,489,492 $ 9,931 $ 1,942 $ - $ 2,497,481
Construction Work in Progress
Electric 6,764 11,116 - - 17,880
Utility Plant Held for Future Use
Electric 4,254 - - (1)<F29> 4,253
--------- --------- --------- ------- -----------
TOTAL $2,500,510 $ 21,047 $ 1,942 $ (1) $ 2,519,614
========== ========= ========= ======= ===========
<F29> Reserve associated with plant held for future use.
</TABLE>
<PAGE>S-20
<TABLE>
WESTERN MASSACHUSETTS ELECTRIC COMPANY SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
<CAPTION>
- ----------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of Period
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Utility Plant in Service
Electric $1,157,792 $ 29,574 $ 4,314 $ (10)<F30> $ 1,183,042
Construction Work in Progress
18,522 5,268 - - 23,790
Utility Plant Held for Future Use
Electric 368 - - - 368
---------- --------- --------- ---------- -----------
TOTAL $1,176,682 $ 34,842 $ 4,314 $ (10) $ 1,207,200
========== ========= ========= ========== ===========
<F30> Amortization of capital leases charged to expense and construction overheads.
</TABLE>
<PAGE>S-21
<TABLE>
WESTERN MASSACHUSETTS ELECTRIC COMPANY SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR
YEAR ENDED DECEMBER 31, 1992
(Thousands of Dollars)
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of Period
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Utility Plant in Service
Electric $1,128,710 $ 55,282 $ 26,023 $ (10)<F31> $ 1,157,792
(167)<F32>
Construction Work in Progress
Electric 27,094 (8,717) - 145<F32> 18,522
Utility Plant Held for Future Use
Electric 368 - - - 368
---------- --------- --------- --------- -----------
TOTAL $1,156,172 $ 46,565 $ 26,023 $ (32) $ 1,176,682
========== ========= ========= ========= ===========
<F31> Amortization of capital leases charged to expense and construction overheads.
<F32> Transfer between Utility Plant in Service and Construction Work in Progress.
</TABLE>
<PAGE>S-22
<TABLE>
WESTERN MASSACHUSETTS ELECTRIC COMPANY SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR
YEAR ENDED DECEMBER 31, 1991
(Thousands of Dollars)
<CAPTION>
- ---------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of Period
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Utility Plant in Service
Electric $1,110,711 $ 31,777 $ 13,802 $ (9)<F33> $ 1,128,710
33 <F34>
Construction Work in Progress
Electric 26,091 1,003 - - 27,094
Utility Plant Held for Future Use
Electric 368 - - - 368
---------- --------- --------- ------ -----------
TOTAL $1,137,170 $ 32,780 $ 13,802 $ 24 $ 1,156,172
========== ========= ========= ====== ===========
<F33> Amortization of capital leases charged to expense and construction overheads.
<F34> Transfer between Utility Plant in Service and Amortiable Property Investment.
</TABLE>
<PAGE>S-23
<TABLE>
NORTH ATLANTIC ENERGY CORPORATION SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR FUE
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
<CAPTION>
- --------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of Period
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Utility Plant in Service
Electric $ 756,806 $ 3,964 $ 2,600 $ - $ 758,170
Construction Work in Progress
Electric 4,775 2,843 - - 7,618
--------- --------- --------- --------- -----------
TOTAL $ 761,581 $ 6,807 $ 2,600 $ - $ 765,788
========= ========= ========= ========= ===========
</TABLE>
<PAGE>S-24
<TABLE>
NORTH ATLANTIC ENERGY CORPORATION SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR FUEL
FOR THE PERIOD JUNE 5, 1992 THROUGH DECEMBER 31, 1992
(Thousands of Dollars)
<CAPTION>
- ----------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of Period
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Utility Plant in Service
Electric $ - $ 3,138 $ 168 $ 701,336 <F36> $ 756,806
52,500 <F37>
Construction Work in Progress
Electric - 3,213 - 1,562 <F35> 4,775
--------- --------- --------- --------- -----------
TOTAL $ - $ 6,351 $ 168 $ 755,398 $ 761,581
========= ========= ========= ========= ===========
<F35> North Atlantic Energy Corporation began operations on June 5, 1992.
<F36> Acquired from Public Service Company of New Hampshire.
<F37> Charged to other balance sheet accounts.
</TABLE>
<PAGE>S-25
<TABLE>
NORTHEAST UTILITIES AND SUBSIDIARIES SCHEDULE V
NUCLEAR FUEL
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
<CAPTION>
- --------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes Balance
beginning Additions add (deduct)- at close
Classification of period at cost Retirements describe of period
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Nuclear fuel in process
of refinement,
conversion, enrichment,
and fabrication
and nuclear fuel
materials and
assemblies -
stock account $ 2,041 $ 67,245 $ - $ (36,818)<F50>$ 32,468
Nuclear fuel assemblies
in reactor 26,210 - - 669 <F50> 26,879
Spent nuclear fuel 698,721 - - 93,975 <F50> 792,696
Accumulated provision for
amortization of nuclear
fuel assemblies (709,450) - - (92,949)<F50> (806,066)
(7,550)<F51>
3,883<F250>
Leased nuclear fuel 202,730 13,103 - 35,123 <F50> 172,074
(78,882)<F51>
------------ --------- ----------- --------- -----------
TOTAL $ 220,252 $ 80,348 $ - $ (82,549) $ 218,051
============ ========= =========== ========= ===========
<FN>
<F50> Transfers between nuclear fuel accounts.
<F51> Amortization of nuclear fuel assemblies charged to expense.
<F250>Transfer to deferred credits.
</TABLE>
<PAGE>S-26
<TABLE>
NORTHEAST UTILITIES AND SUBSIDIARIES
NUCLEAR FUEL
YEAR ENDED DECEMBER 31, 1992
(Thousands of Dollars)
<CAPTION>
- ---------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes Balance
beginning Additions add (deduct)- at close
Classification of period at cost Retirements describe of period
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Nuclear fuel in process
of refinement,
conversion, enrichment,
and fabrication
and nuclear fuel
materials and
and assemblies -
stock account $ 7,705 $ 14,086 $ - 13,248 <F44> $ 2,041
(33,059)<F45>
61 <F251>
Nuclear fuel assemblies
in reactor 11,065 - - 4,431 <F44> 26,210
10,714 <F45>
Spent nuclear fuel 689,025 - - 4,935 <F44> 698,721
4,761 <F45>
Accumulated provision for
amortization of nuclear
fuel assemblies (693,797) - - (6,941) <F44> (709,450)
(3,883) <F252>
(4,829) <F46>
Leased nuclear fuel 222,172 20,589 - 17,584 <F45> 202,730
(57,615) <F46>
------------ --------- ----------- --------- -----------
TOTAL $ 236,170 $ 34,675 - $(50,593) $ 220,252
============ ========= =========== ========= ===========
<FN>
<F44> Public Service Company of New Hampshire acquisition.
<F45> Transfers between nuclear fuel accounts.
<F46> Amortization of nuclear fuel assemblies charged to expense.
<F251>Transfer between miscellaneous balance sheet accounts.
<F252>Department of energy credits.
</TABLE>
<PAGE>S-27
<TABLE>
NORTHEAST UTILITIES AND SUBSIDIARIES SCHEDULE V
NUCLEAR FUEL
YEAR ENDED DECEMBER 31, 1991
(Thousands of Dollars)
<CAPTION>
- -------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of period
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Nuclear fuel in process
of refinement,
conversion, enrichment,
and fabrication
and nuclear fuel
materials and
assemblies -
stock account $ 3,876 $ 19,510 $ - $ (15,681)<F47>$ 7,705
Nuclear fuel assemblies
in reactor 5,033 - - 6,032 <F47> 11,065
Spent nuclear fuel 588,337 - - 100,688 <F47> 689,025
Accumulated provision for
amortization of nuclear
fuel assemblies (584,461) - - (105,452)<F47> (693,797)
(4,937)<F48>
1,053 <F49>
Leased nuclear fuel 247,036 3,743 - 14,413 <F47> 222,172
(43,020)<F48>
------------ --------- ----------- --------- -----------
TOTAL $ 259,821 $ 23,253 $ - $ (46,904) $ 236,170
============ ========= =========== ========= ===========
<FN>
<F47> Transfers between nuclear fuel accounts.
<F48> Amortization of nuclear fuel assemblies charged to expense.
<F49> Insurance settlement.
</TABLE>
<PAGE>S-28
<TABLE>
THE CONNECTICUT LIGHT AND POWER COMPANY SCHEDULE V
NUCLEAR FUEL
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
<CAPTION>
- -------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of period
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Nuclear fuel in process
of refinement,
conversion, enrichment
and fabrication
and nuclear fuel
materials and
assemblies -
stock account $ 993 $ 42,107 $ - $ (28,820)<F52>$ 14,280
Nuclear fuel assemblies
in reactor 9,470 - - 910 <F52> 10,380
Spent nuclear fuel 563,628 - - 74,803 <F52> 638,431
Accumulated provision for
amortization of nuclear
fuel assemblies (570,598) - - (75,342)<F52> (645,701)
3,029 <F253>
(2,790)<F53>
Leased nuclear fuel 164,323 11,691 - 28,449 <F52> 139,488
(64,975)<F53>
------------ --------- ----------- --------- -----------
TOTAL $ 167,816 53,798 - (64,736) 156,878
============ ========= =========== ========= ===========
<FN>
<F52> Transferred between nuclear fuel accounts.
<F53> Amortization of nuclear fuel assemblies charged to expense.
<F253>Transfer to deferred credits.
</TABLE>
<PAGE>S-29
<TABLE>
THE CONNECTICUT LIGHT AND POWER COMPANY SCHEDULE V
NUCLEAR FUEL
YEAR ENDED DECEMBER 31, 1992
(Thousands of Dollars)
<CAPTION>
- -------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes Balance
beginning Additions add (deduct)- at close
Classification of period<F52> at Cost Retirements describe of period
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Nuclear fuel in process
of refinement,
conversion, enrichment
and fabrication
and nuclear fuel
materials and
assemblies -
stock account $ 7,089 $ 11,131 $ - $ (17,227)<F54>$ 993
Nuclear fuel assemblies
in reactor 11,273 - - (1,803)<F54> 9,470
Spent nuclear fuel 558,868 - - 4,760 <F54> 563,628
Accumulated provision for
amortization of nuclear
fuel assemblies (563,752) - - (3,029)<F55> (570,598)
(3,817)<F254>
Leased nuclear fuel 180,086 16,678 - 14,270 <F54> 164,323
(46,711)<F254>
------------ --------- ----------- --------- -----------
TOTAL $ 193,564 $ 27,809 $ - $ (53,557) $ 167,816
============ ========= =========== ========= ===========
<FN>
<F54> Transfers between nuclear fuel accounts.
<F55> Amortization of nuclear fuel assemblies charged to expense.
<F254>Department of Energy Credits.
</TABLE>
<PAGE>S-30
<TABLE>
THE CONNECTICUT LIGHT AND POWER COMPANY SCHEDULE V
NUCLEAR FUEL
YEAR ENDED DECEMBER 31, 1991
(Thousands of Dollars)
<CAPTION>
- -------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes Balance
beginning Additions add (deduct)- at close
Classification of period<F54> at Cost Retirements describe of period
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Nuclear fuel in process
of refinement,
conversion, enrichment
and fabrication
and nuclear fuel
materials and
assemblies -
stock account $ 5,183 $ 15,110 $ - $ (13,204)<F56>$ 7,089
Nuclear fuel assemblies
in reactor 6,481 - - 4,792 <F56> 11,273
Spent nuclear fuel 476,656 - - 82,212 <F56> 558,868
Accumulated provision for
amortizatiion of nuclear
fuel assemblies (474,171) - - (85,478)<F56> (563,752)
(4,956)<F57>
853 <F58>
Leased nuclear fuel 200,238 3,034 - 11,678 <F56> 180,086
(34,864)<F57>
------------ --------- ----------- --------- -----------
TOTAL $ 214,387 $ 18,144 $ - $ (38,967) $ 193,564
============ ========= =========== ========= ===========
<FN>
<F56> Transfers between nuclear fuel accounts.
<F57> Amortization of nuclear fuel assemblies charged to expense.
<F58> Insurance settlement.
</TABLE>
<PAGE>S-31
<TABLE>
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE V
NUCLEAR FUEL
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
<CAPTION>
- -------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of period
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Nuclear fuel in process
of refinement
conversion, enrichment
and fabrication,
and nuclear fuel
materials and
assemblies -
stock account $ 668 $ 614 $ - $ (1,261)<F82>$ 21
Nuclear fuel assemblies
in reactor 4,162 - - (512)<F82> 3,650
Spent nuclear fuel 4,936 - - 1,773 <F82> 6,709
Accumulated provision for
amortization of nuclear
fuel assemblies (7,429) - - 149 <F82> (8,273)
(993)<F83>
------------ --------- ----------- --------- -----------
TOTAL $ 2,337 $ 614 $ - $ (844) $ 2,107
============ ========= =========== ========= ===========
<FN>
<F82> Transfers between nuclear fuel accounts.
<F83> Amortization of nuclear fuel assemblies charged to expense.
</TABLE>
<PAGE>S-32
<TABLE>
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE V
NUCLEAR FUEL
FOR THE PERIOD JUNE 5, 1992 THROUGH DECEMER 31, 1992
(Thousands of Dollars)
<CAPTION>
- -------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of period
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Nuclear fuel in process
of refinement,
conversion, enrichment
and fabrication,
and nuclear fuel
materials and
assemblies -
stock account $ 13,248 $ 552 $ - $ (13,132)<F65>$ 668
Nuclear fuel assemblies
in reactor 4,431 - - (269)<F66> 4,162
Spent nuclear fuel 4,936 - - - 4,936
Accumulated provision for
amortization of nuclear
fuel assemblies (6,941) - - 82 <F66> (7,429)
(570)<F67>
------------ --------- ----------- --------- -----------
TOTAL $ 15,674 $ 552 $ - $ (13,889) $ 2,337
============ ========= =========== ========= ===========
<FN>
<F65> Public Service Company of New Hampshire was acquired by Northeast Utilities
on June 5, 1992.
<F66> Transfers to North Atlantic Energy Corporation.
<F67> Amortization of nuclear fuel assemblies charged to expense.
</TABLE>
<PAGE>S-33
<TABLE>
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE V
NUCLEAR FUEL
FOR THE PERIOD JANUARY 1, 1992 THROUGH JUNE 4, 1992
(Thousands of Dollars)
<CAPTION>
- -------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of period
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Nuclear fuel in process
of refinement,
conversion, enrichment
and fabrication,
and nuclear fuel
materials and
assemblies -
stock account $ 2,859 $ 9,990 $ - $ 399 <F59> $ 13,248
Nuclear fuel assemblies
in reactor 4,431 - - - 4,431
Spent nuclear fuel 4,936 - - - 4,936
Accumulated provision for
amortization of nuclear
fuel assemblies (6,543) - - (398)<F59> (6,941)
------------ --------- ----------- --------- -----------
TOTAL $ 5,683 $ 9,990 $ - $ 1 $ 15,674
============ ========= =========== ========= ===========
<FN>
<F59> Miscellaneous transfers.
</TABLE>
<PAGE>S-34
<TABLE>
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE V
NUCLEAR FUEL
FOR THE PERIOD MAY 16, 1991 THROUGH DECEMBER 31, 1991
(Thousands of Dollars)
<CAPTION>
- -------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes Balance
beginning Additions add (deduct)- at close
Classification of period<F60> at Cost Retirements describe of period
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Nuclear fuel in process
of refinement,
conversion, enrichment
and fabrication,
and nuclear fuel
materials and
assemblies -
stock account $ 207 $ 3,125 $ - $ (473)<F61>$ 2,859
Nuclear fuel assemblies
in reactor 5,586 - - 473 <F61> 4,431
(1,628)<F61>
Spent nuclear fuel 3,308 - - 1,628 <F61> 4,936
Accumulated provision for
amortization of nuclear
fuel assemblies (6,299) - - (244)<F62> (6,543)
------------ --------- ----------- --------- -----------
TOTAL $ 2,802 $ 3,125 $ - $ (244) $ 5,683
============ ========= =========== ========= ===========
<FN>
<F60> Public Service Company of New Hampshire was reorganized on May 16, 1991.
<F61> Transfers between nuclear fuel accounts.
<F62> Amortization of nuclear fuel assemblies charged to expense.
</TABLE>
<PAGE>S-35
<TABLE>
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE V
NUCLEAR FUEL
FOR THE PERIOD JANUARY 1, 1991 THROUGH MAY 15, 1991
(Thousands of Dollars)
<CAPTION>
- -------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of period
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Nuclear fuel in process
of refinement
conversion, enrichment
and fabrication,
and nuclear fuel
materials and
assemblies -
stock account $ 40,943 $ 4,264 $ - $ (1,741)<F63> 43,466
Nuclear fuel assemblies
in reactor 41,129 - - 1,741 <F63> 42,870
Spent nuclear fuel 3,308 - - - 3,308
Accumulated provision for
amortization of nuclear
fuel assemblies (15,564) - - (7,649)<F64> (23,213)
------------ --------- ----------- --------- -----------
TOTAL $ 69,816 $ 4,264 $ - $ (7,649) $ 66,431
============ ========= =========== ========= ===========
<FN>
<F63> Transfers between nuclear fuel accounts.
<F64> Amortization of nuclear fuel assemblies charged to expense.
</TABLE>
<PAGE>S-36
<TABLE>
WESTERN MASSACHUSETTS ELECTRIC COMPANY SCHEDULE V
NUCLEAR FUEL
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
<CAPTION>
- -------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of period
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Nuclear fuel in process
of refinement
conversion, enrichment
and fabrication,
and nuclear fuel
materials and
assemblies -
stock account $ 197 $ 9,598 $ - $ (6,737)<F73>$ 3,058
Nuclear fuel assemblies
in reactor (208) - - 272 <F73> 64
Spent nuclear fuel 130,157 - - 17,398 <F73> 147,555
Accumulated provision for
amortization of nuclear
fuel assemblies (130,848) - - 854 <F254> (147,535)
(17,607)<F73>
66 <F74>
Leased nuclear fuel 38,406 2,697 - 6,674 <F73> 32,585
(15,192)<F254>
------------ --------- ----------- --------- -----------
TOTAL $ 37,704 $ 12,295 $ - $ (14,272) $ 35,727
============ ========= =========== ========= ===========
<FN>
<F73> Transfers between nuclear fuel accounts.
<F74> Amortization of nuclear fuel assemblies charged to expense.
<F254>Transfer to deferred credits.
</TABLE>
<PAGE>S-37
<TABLE>
WESTERN MASSACHUSETTS ELECTRIC COMPANY SCHEDULE V
NUCLEAR FUEL
YEAR ENDED DECEMBER 31, 1992
(Thousands of Dollars)
<CAPTION>
- ----------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of period
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Nuclear fuel in process of
of refinement,
conversion, enrichment
and fabrication,
and nuclear fuel
materials and
assemblies -
stock account $ 1,200 $ 2,310 $ - $ (3,313)<F68>$ 197
Nuclear fuel assemblies
in reactor (208) - - - (208)
Spent nuclear fuel 130,157 - - - 130,157
Accumulated provision for
amortization of nuclear
fuel assemblies (130,045) - - (854)<F69> (130,848)
51 <F255>
Leased nuclear fuel 42,086 3,911 - (10,904)<F255> 38,406
3,313 <F68>
--------- --------- ----------- --------- -----------
TOTAL $ 43,190 $ 6,221 $ - $ (11,707)<F69>$ 37,704
========= ========= =========== ========= ===========
<FN>
<F68> Transfers between nuclear fuel accounts.
<F69> Amortization of nuclear fuel assemblies charged to expense.
<F255>Department of Energy Credits.
</TABLE>
<PAGE> S-38
<TABLE>
WESTERN MASSACHUSETTS ELECTRIC COMPANY SCHEDULE V
NUCLEAR FUEL
YEAR ENDED DECEMBER 31, 1991
(Thousands of Dollars)
<CAPTION>
- --------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of period
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Nuclear fuel in process
of refinement
conversion, enrichment
and fabrication,
and nuclear fuel
materials and
assemblies -
stock account $ 373 $ 3,304 $ - $ (2,477)<F70>$ 1,200
Nuclear fuel assemblies
in reactor (1,448) - - 1,240 <F70> (208)
Spent nuclear fuel 111,681 - - 18,476 <F70> 130,157
Accumulated provision for
amortization of nuclear
fuel assemblies (110,289) - - (19,974)<F70> (130,045)
18 <F71>
200 <F72>
Leased nuclear fuel 46,798 709 - 2,735 <F70> 42,086
(8,156)<F71>
------------ --------- ----------- --------- -----------
TOTAL 47,115 4,013 - (7,938)<F71>$ 43,190
============ ========= =========== ========= ===========
<FN>
<F70> Transfers between nuclear fuel accounts.
<F71> Amortization of nuclear fuel assemblies charged to expense.
<F72> Insurance settlements.
</TABLE>
<PAGE> S-39
<TABLE>
NORTH ATLANTIC ENERGY CORPORATION SCHEDULE V
NUCLEAR FUEL
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
<CAPTION>
- -------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes Balance
beginning Additions add (deduct)- at close
Classification of period<F79> at Cost Retirements describe of period
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Nuclear fuel in process
of refinement
conversion, enrichment
and fabrication,
and nuclear fuel
materials and
assemblies -
stock account $ 1,126 $ 13,983 $ - $ - $ 15,109
Nuclear fuel assemblies
in reactor 12,786 - - - 12,786
Spent nuclear fuel - - - - 0
Accumulated provision for
amortization of nuclear
fuel assemblies (573) - - (3,983)<F81> (4,556)
------------ --------- ----------- --------- -----------
TOTAL $ 13,339 $ 13,983 $ - $ (3,983) $ 23,339
============ ========= =========== ========= ===========
<FN>
<F79> North Atlantic Energy Corporation began operations on June 5, 1992.
<F81> Amortization of nuclear fuel assemblies charged to expense.
</TABLE>
<PAGE>S-40
<TABLE>
NORTH ATLANTIC ENERGY CORPORATION SCHEDULE V
NUCLEAR FUEL
FOR THE PERIOD JUNE 5, 1992 THROUGH DECEMBER 31, 1992
(Thousands of Dollars)
<CAPTION>
- -------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes Balance
beginning Additions add (deduct)- at close
Classification of period<F75> at Cost Retirements describe of period
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Nuclear fuel in process
of refinement,
conversion, enrichment
and fabrication,
and nuclear fuel
materials and
assemblies -
stock account $ - $ 511 $ - $ 13,132 <F76>$ 1,126
(12,517)<F77>
Nuclear fuel assemblies
in reactor - - - 269 <F76> 12,786
12,517 <F77>
Spent nuclear fuel - - - - -
Accumulated provision for
amortization of nuclear
fuel assemblies - - - (82)<F76> (573)
(491)<F78>
------------ --------- ----------- --------- -----------
TOTAL $ - $ 511 $ - $ 12,828 $ 13,339
============ ========= =========== ========= ===========
<FN>
<F75> North Atlantic Energy Corporation began operations on June 5, 1992.
<F76> Acquired from Public Service Company of New Hampshire.
<F77> Transfers between nuclear fuel accounts.
<F78> Amortization of nuclear fuel assemblies charged to expense.
</TABLE>
<PAGE>S-41
<TABLE>
NORTHEAST UTILITIES AND SUBSIDIARIES SCHEDULE VI
ACCUMULATED PROVISION FOR DEPRECIATION OF UTILITY PLANT
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Additions
Balance at charged to Other changes- Balance
beginning of costs and add (deduct)- at close
Description period expenses Retirements describe of period
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Electric $ 2,675,731 $ 325,935 $ 58,049 $ 613<F87>$ 2,944,230
Other 73,303 5,501 1,047 - 77,757
------------ ------------ ------------ ------------ ------------
TOTAL $ 2,749,034 $ 331,436 $ 59,096 $ 613 $ 3,021,987
============ ============ ============ ============ ============
<FN>
<F87> Depreciation charged to Clearing, Fuel Stock, Stores, and Other Accounts.
</TABLE>
<PAGE>S-42
<TABLE>
NORTHEAST UTILITIES AND SUBSIDIARIES SCHEDULE VI
ACCUMULATED PROVISION FOR DEPRECIATION OF UTILITY PLANT
YEAR ENDED DECEMBER 31, 1992
(Thousands of Dollars)
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Additions
Balance at charged to Other changes- Balance
beginning of costs and add (deduct)- at close
Description period expenses Retirements describe of period
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Electric $ 2,113,908 $ 289,798 $ 148,122 $ 419,436<F84>$ 2,675,731
711<F85>
Other 68,236 5,205 138 - 73,303
------------ ------------ ------------ ------------ ------------
TOTAL $ 2,182,144 $ 295,003 $ 148,260 $ 420,147 $ 2,749,034
============ ============ ============ ============ ============
<FN>
<F84> Accumulated provision for depreciation - Public Service Company of New Hampshire acquisition.
<F85> Depreciation charged to Clearing, Fuel Stock, Stores, and Other Accounts.
</TABLE>
<PAGE>S-43
<TABLE>
NORTHEAST UTILITIES AND SUBSIDIARIES SCHEDULE VI
ACCUMULATED PROVISION FOR DEPRECIATION OF UTILITY PLANT
YEAR ENDED DECEMBER 31, 1991
(Thousands of Dollars)
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Additions
Balance at charged to Other changes- Balance
beginning of costs and add (deduct)- at close
Description period expenses Retirements describe of period
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Electric $ 1,976,327 $ 231,862 $ 103,598 $ 9,317<F86>$ 2,113,908
Other 57,241 11,595 600 - 68,236
------------ ------------ ------------ ------------ ------------
TOTAL $ 2,033,568 $ 243,457 $ 104,198 $ 9,317 $ 2,182,144
============ ============ ============ ============ ============
<FN>
<F86> Depreciation charged to Clearing, Fuel Stock, Stores, and Other Accounts.
</TABLE>
<PAGE>S-44
<TABLE>
THE CONNECTICUT LIGHT AND POWER COMPANY SCHEDULE VI
ACCUMULATED PROVISION FOR DEPRECIATION OF UTILITY PLANT
YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
(Thousands of Dollars)
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Additions
Balance at charged to Other changes- Balance
beginning of costs and add (deduct)- at close
Description period expenses Retirements describe of period
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Year Ended December 31, 1993
Electric $ 1,827,024 $ 222,245 $ 38,392 $ 85<F88>$ 2,010,962
============ ============ ============ ============ ============
Year Ended December 31, 1992
Electric $ 1,724,673 $ 216,755 $ 114,511 $ 107<F88>$ 1,827,024
============ ============ ============ ============ ============
Year Ended December 31, 1991
Electric $ 1,608,784 $ 201,377 $ 85,549 $ 61<F88>$ 1,724,673
============ ============ ============ ============ ============
<FN>
<F88> Depreciation charged to Transportation Clearing, Fuel Stock, Stores, and Other Accounts.
</TABLE>
<PAGE>S-45
<TABLE>
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE VI
ACCUMULATED PROVISION FOR DEPRECIATION OF UTILITY PLANT
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Additions
Balance at charged to Other changes- Balance
beginning of costs and add (deduct)- at close
Description period expenses Retirements describe of period
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Electric $ 410,026 $ 38,664 $ 8,007 $ 393<F96>$ 441,076
============ ============ ============ =========== ============
<FN>
<F96> Depreciation charged to Clearing and Other Accounts.
</TABLE>
<PAGE>S-46
<TABLE>
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE VI
ACCUMULATED PROVISION FOR DEPRECIATION OF UTILITY PLANT
FOR THE PERIODS JUNE 5, 1992 THROUGH DECEMBER 31, 1992 AND JANUARY 1, 1992 THROUGH JUNE 4, 1992
(Thousands of Dollars)
<CAPTION>
- -----------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Additions
Balance at charged to Other changes- Balance
beginning of costs and add (deduct)- at close
Description period expenses Retirements describe of period
- ------------------------------------------------------------------------------------------------------
For the Period June 5, 1992
through December 31, 1992
<S> <C> <C> <C> <C> <C>
Electric $ 419,436<F89>$ 21,526 $ 6,837 $ (23,316)<F90> $ 410,026
257 <F91>
(1,040)<F92>
-----------
$ (24,099)
=========== =========== =========== =========== =========
For the Period January 1, 1992
through June 4, 1992 $ 398,334 $ 25,183 $ 2,461 $ 243 <F91> $ 419,436
(1,863)<F92>
-----------
$ (1,620)
=========== =========== =========== =========== =========
<FN>
<F89> Public Service Company of New Hampshire was acquired by Northeast Utilities on June 5, 1992
<F90> Transfer of Seabrook to North Atlantic Energy Corporation.
<F91> Depreciation charged to Clearing and Other Accounts.
<F92> Net salvage.
</TABLE>
<PAGE>S-47
<TABLE>
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE VI
ACCUMULATED PROVISION FOR DEPRECIATION OF UTILITY PLANT
FOR THE PERIODS MAY 16, 1991 THROUGH DECEMBER 31, 1991 AND JANUARY 1, 1991 THROUGH MAY 15, 1991
(Thousands of Dollars)
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Additions
Balance at charged to Other changes- Balance
beginning of costs and add (deduct)- at close
Description period expenses Retirements describe of period
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
For the Period May 16, 1991
through December 31, 1991
Electric $ 376,103<F93>$ 36,590 $ 12,377 $ 482 (b) $ 398,334
(2,464)(c)
-----------
$ (1,982)
=========== =========== =========== =========== ==========
For the Period January 1, 1991
through May 15, 1991
Electric $ 382,565 $ 28,269 $ 1,945 $ 1,705 (b) $ 409,831
(763)(c)
-----------
$ 942
=========== =========== =========== =========== ===========
<FN>
<F93> Public Service Company of New Hampshire was reorganized on May 16, 1991.
<F94> Depreciation charged Clearing and Other Accounts.
<F95> Net salvage.
</TABLE>
<PAGE>S-48
<TABLE>
WESTERN MASSACHUSETTS ELECTRIC COMPANY SCHEDULE VI
ACCUMULATED PROVISION FOR DEPRECIATION OF UTILITY PLANT
YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
(Thousands of Dollars)
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Additions
Balance at charged to Other changes- Balance
beginning of costs and add (deduct)- at close
Description period expenses Retirements describe of period
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Year Ended December 31, 1993
Electric $ 364,702 $ 38,271 $ 7,801 $ 18<F97>$ 395,190
============ ============ ============ =========== ============
Year Ended December 31, 1992
Electric $ 352,855 $ 36,707 $ 24,886 $ 26<F97>$ 364,702
============ ============ ============ =========== ============
Year Ended December 31, 1991
Electric $ 332,472 $ 37,800 $ 17,429 $ 12<F97>$ 352,855
============ ============ ============ =========== ============
<FN>
<F97> Depreciation charged to Transportation Clearing, Fuel Stock, and Other Accounts.
</TABLE>
<PAGE>S-49
<TABLE>
NORTH ATLANTIC ENERGY CORPORATION SCHEDULE VI
ACCUMULATED PROVISION FOR DEPRECIATION OF UTILITY PLANT
YEARS ENDED DECEMBER 31, 1993 AND 1992
(Thousands of Dollars)
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Additions
Balance at charged to Other changes- Balance
beginning of costs and add (deduct)- at close
Description period<F98> expenses Retirements describe of period
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Year Ended Dcember 31, 1993
Electric $ 36,327 $ 22,862 $ 2,540 $ - $ 56,649
=========== =========== =========== ============== ===========
Year Ended Dcember 31, 1992
Electric $ - $ 12,981 $ (30) $ 23,316<F99>$ 36,327
=========== =========== =========== ============== ===========
<FN>
<F98> North Atlantic Energy Corporation began operations on June 5, 1992.
<F99> Acquired from Public Service Company of New Hampshire.
</TABLE>
<PAGE>S-50
<TABLE>
NORTHEAST UTILITIES AND SUBSIDIARIES SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
<CAPTION>
- ----------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
Additions
--------------------
(1) (2)
Charged to
Balance at Charged to other Balance
beginning costs and accounts- Deductions- at end
Description of period expenses describe describe of period
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
RESERVES DEDUCTED FROM ASSETS
TO WHICH THEY APPLY:
Reserves for uncollectible accounts $ 13,255 $ 22,342 $ - $ 20,968<F100>$ 14,629
========= ========= ========= ========= ========
RESERVES NOT APPLIED AGAINST ASSETS:
Injuries and damages <F101> $ 14,059 $ 9,231 $ - $ 7,572<F102>$ 15,718
========= ========= ========= ========= ========
Medical insurance <F103> $ 9,430 $ 42,442 $ - $ 43,215<F104>$ 8,657
========= ========= ========= ========= ========
<FN>
<F100> Amounts written off, net of recoveries.
<F101> Provided to cover claims for injuries to employees, workmen's compensation, bodily injury to
others, and property damage.
<F102> Principally payments for various injuries and damages and expenses in connection therewith.
<F103> Provided to cover claims for employee medical insurance.
<F104> Principally payments for various employee medical expenses and expenses in connection
therewith.
</TABLE>
<PAGE>S-51
<TABLE>
NORTHEAST UTILITIES AND SUBSIDIARIES SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
YEAR ENDED DECEMBER 31, 1992
(Thousands of Dollars)
<CAPTION>
- -------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
Additions
-------------------
(1) (2)
Charged to
Balance at Charged to other Balance
beginning costs and accounts- Deductions- at end
Description of period expenses describe describe of period
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
RESERVES DEDUCTED FROM ASSETS
TO WHICH THEY APPLY:
Reserves for uncollectible accounts $ 11,607 $ 20,005 $ 2,826<F105>$ 21,183<F106>$ 13,255
========= ========= ======== ======== ========
RESERVES NOT APPLIED AGAINST ASSETS:
Injuries and damages <F107> $ 9,465 $ 8,275 $ 3,138<F105>$ 6,819<F108>$ 14,059
========= ========= ======== ========= ========
Medical insurance <F109> $ 6,869 $ 39,693 $ 1,150<F105>$ 38,282<F110>$ 9,430
========= ========= ======== ======== ========
<FN>
<F105> Acquired as part of Northeast Utilities acquisition of Public Service Company of New Hampshire
on June 5, 1992.
<F106> Amounts charged off as uncollectible after deducting customers' deposits and recoveries
of accounts previously charged off.
<F107> Provided to cover claims for injuries to employees, workmen's compensation,
bodily injury to others, and property damage.
<F108> Principally payments for various injuries and damages and expenses in connection therewith.
<F109> Provided to cover claims for employee medical insurance.
<F110> Principally payments for various employee medical expenses and expenses in connection
therewith.
</TABLE>
<PAGE>S-52
<TABLE>
NORTHEAST UTILITIES AND SUBSIDIARIES SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
YEAR ENDED DECEMBER 31, 1991
(Thousands of Dollars)
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
Additions
--------------------
(1) (2)
Charged to
Balance at Charged to other Balance
beginning costs and accounts- Deductions- at end
Description of period expenses describe describe of period
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
RESERVES DEDUCTED FROM ASSETS
TO WHICH THEY APPLY:
Reserves for uncollectible accounts $ 10,588 $ 16,593 $ - $ 15,574<F111>$ 11,607
========= ========= ========= ========= ========
RESERVES NOT APPLIED AGAINST ASSETS:
Injuries and damages <F112> $ 6,238 $ 10,211 $ - $ 6,984<F113> 9,465
Medical insurance <F114> 6,157 41,327 - 40,615<F115> 6,869
Other <F116> 7,028 2,393 488<F117> 11,686<F118> (1,777)
--------- --------- --------- --------- --------
TOTAL $ 19,423 $ 53,931 $ 488 $ 59,285 $ 14,557
========= ========= ========= ========= =========
<FN>
<F111> Amounts charged off as uncollectible after deducting customers' deposits and recoveries of
accounts previously charged off.
<F112> Provided to cover claims for injuries to employees, workmen's compensation, bodily injury to
others, and property damage.
<F113> Principally payments for various injuries and damages and expenses in connection therewith.
<F114> Provided to cover claims for employee medical insurance.
<F115> Principally payments for various employee medical expenses and expenses in connection
therewith.
<F116> Consists of a long-term disability insurance reserve, a supplemental executive retirement plan
reserve, an early retirement incentive reserve, a storm damage reserve, and a reserve for
nuclear materials and supplies remaining at decommissioning.
<F117> Employee contributions related to the long-term disability plan.
<F118> Payments under a long-term disability plan, supplemental executive retirement plan, an early
retirement incentive plan and a storm damage reserve.
</TABLE>
<PAGE>S-53
<TABLE>
THE CONNECTICUT LIGHT AND POWER COMPANY SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
<CAPTION>
- ------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
Additions
--------------------
(1) (2)
Charged to
Balance at Charged to other Balance
beginning costs and accounts- Deductions- at end
Description of period expenses describe describe of period
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
RESERVES DEDUCTED FROM ASSETS
TO WHICH THEY APPLY:
Reserves for uncollectible accounts $ 8,358 $ 16,366 $ - $ 13,908<F119>$ 10,816
========= ========= ========= ========= ========
RESERVES NOT APPLIED AGAINST ASSETS:
Injuries and damages <F120> $ 8,359 $ 7,115 $ - $ 5,821<F121>$ 9,653
========= ========= ========= ========= ========
Medical insurance <F122> $ 3,496 $ 19,846 $ - $ 20,975<F123>$ 2,367
========= ========= ========= ========= ========
<FN>
<F119> Amounts charged off as uncollectible after deducting customers' deposits and recoveries of
accounts previously charged off.
<F120> Provided to cover claims for injuries to employees, workmen's compensation, bodily injury to
others, and property damage.
<F121> Principally payments for various injuries and damages and expenses in connection therewith.
<F122> Provided to cover claims for employee medical insurance.
<F123> Principally payments for various employee medical expenses and expenses in connection
therewith.
</TABLE>
<PAGE>S-54
<TABLE>
THE CONNECTICUT LIGHT AND POWER COMPANY SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
YEAR ENDED DECEMBER 31, 1992
(Thousands of Dollars)
<CAPTION>
- -------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
Additions
--------------------
(1) (2)
Charged to
Balance at Charged to other Balance
beginning costs and accounts- Deductions- at end
Description of period expenses describe describe of period
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
RESERVES DEDUCTED FROM ASSETS
TO WHICH THEY APPLY:
Reserves for uncollectible accounts $ 9,560 $ 14,837 $ - $ 16,039<F124>$ 8,358
========= ========= ========= ========= ========
RESERVES NOT APPLIED AGAINST ASSETS:
Injuries and damages <F125> $ 7,369 $ 6,600 $ - $ 5,610<F126>$ 8,359
========= ========= ========= ========= ========
Medical insurance <F127> $ 3,429 $ 19,770 $ - $ 19,703<F128>$ 3,496
========= ========= ========= ========= ========
<FN>
<F124> Amounts charged off as uncollectible after deducting customers' deposits and recoveries of
accounts previously charged off.
<F125> Provided to cover claims for injuries to employees, workmen's compensation, bodily injury to
others, and property damage.
<F126> Principally payments for various injuries and damages and expenses in connection therewith.
<F127> Provided to cover claims for employee medical insurance.
<F128> Principally payments for various employee medical expenses and expenses in connection
therewith.
</TABLE>
<PAGE>S-55
<TABLE>
THE CONNECTICUT LIGHT AND POWER COMPANY SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
YEAR ENDED DECEMBER 31, 1991
(Thousands of Dollars)
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
Additions
--------------------
(1) (2)
Charged to
Balance at Charged to other Balance
beginning costs and accounts- Deductions- at end
Description of period expenses describe describe of period
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
RESERVES DEDUCTED FROM ASSETS
TO WHICH THEY APPLY:
Reserves for uncollectible accounts $ 8,610 $ 12,804 $ - $ 11,854<F129>$ 9,560
========= ========= ========= ========= =========
RESERVES NOT APPLIED AGAINST ASSETS:
Injuries and damages <F130> $ 4,781 $ 8,460 $ - $ 5,872<F131>$ 7,369
Medical insurance <F132> 3,167 20,990 - 20,728<F133>$ 3,429
Other <F134> 3,279 1,186 97<F135> 11,373<F136>$ (6,811)
--------- --------- --------- --------- ---------
TOTAL $ 11,227 $ 30,636 $ 97 $ 37,973 $ 3,987
========= ========= ========= ========= ==========
<FN>
<F129> Amounts charged off as uncollectible after deducting customers' deposits and recoveries of
accounts previously charged off.
<F130> Provided to cover claims for injuries to employees, workmen's compensation,
bodily injury to others and property damage.
<F131> Principally payments for various injuries and damages and expenses in connection therewith.
<F132> Provided to cover claims for employee medical insurance.
<F133> Principally payments for various employee medical expenses and expenses in connection
therewith.
<F134> Consists of a long-term disability insurance reserve, a supplemental executive retirement
plan, an early retirement incentive reserve, a storm damage reserve, and a reserve for nuclear
materials and supplies remaining at decommissioning.
<F135> Employeee contributions related to the long-term disability plan.
<F136> Payments under a long-term disability plan, supplemental executive retirement plan, an early
retirement incentive plan, and a storm damage reserve.
</TABLE>
<PAGE>S-56
<TABLE>
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
<CAPTION>
- ------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
Additions
--------------------
(1) (2)
Charged to
Balance at Charged to other Balance
beginning costs and accounts- Deductions- at end
Description of period expenses describe describe of period
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
RESERVES DEDUCTED FROM ASSETS
TO WHICH THEY APPLY:
Reserves for uncollectible accounts $ 2,780 $ 1,771 $ - $ 2,735<F137>$ 1,816
========= ========= ========= ========= =======
RESERVES NOT APPLIED AGAINST ASSETS:
Injuries and damages $ 2,770 $ 192 $ - 917<F138>$ 2,045
========= ========= ========= ========= ========
Medical insurance $ 1,650 $ 265 $ - $ - $ 1,915
========= ========= ========= ========= ========
<FN>
<F137> Amounts written off, net of recoveries.
<F138> Principally payments for various injuries and damages and expenses in connection therewith.
</TABLE>
<PAGE>S-57
<TABLE>
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE PERIOD June 5, 1992 THROUGH DECEMBER 31, 1992
(Thousands of Dollars)
<CAPTION>
- -------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
Additions
--------------------
(1) (2)
Charged to
Balance at Charged to other Balance
beginning costs and accounts- Deductions- at end
Description of period<F147> expenses describe describe of period
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
RESERVES DEDUCTED FROM ASSETS
TO WHICH THEY APPLY:
Reserves for uncollectible accounts $ 2,826 $ 1,617 $ - $ 1,663<F148> $ 2,780
========= ========= ========= ========= =========
RESERVES NOT APPLIED AGAINST ASSETS:
Injuries and damages $ 3,138 $ (277) $ - $ 91<F149> $ 2,770
========= ========= ========= ========= =========
Medical Insurance $ 1,150 $ 500 $ - $ - $ 1,650
========= ========= ========= ========= =========
<FN>
<F147> Public Service Company of New Hampshire was acquired by Northeast Utilities
on June 5, 1992.
<F148> Amounts written off, net of recoveries.
<F149> Nonoperating reserve transferred to operating.
</TABLE>
<PAGE>S-58
<TABLE>
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE PERIOD JANUARY 1, 1992 THROUGH JUNE 4, 1992
(Thousands of Dollars)
<CAPTION>
- --------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
Additions
-----------------
(1) (2)
Charged to
Balance at Charged to other Balance
beginning costs and accounts- Deductions- at end
Description of period expenses describe describe of period
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
RESERVES DEDUCTED FROM ASSETS
TO WHICH THEY APPLY:
Reserves for uncollectible accounts $ 2,834 $ 1,581 $ - $ 1,589<F139>$ 2,826
========= ========= ========= ========== ========
RESERVES NOT APPLIED AGAINST ASSETS:
Injuries and damages $ 1,615 $ 1,618 $ - $ 95<F140>$ 3,138
========= ========= ========= ========= ========
Medical insurance $ 1,050 $ 100 $ - $ - $ 1,150
========= ========= ========= ========= ========
<FN>
<F139> Amounts written off, net of recoveries.
<F140> Nonoperating reserve transferred to operating.
</TABLE>
<PAGE>S-59
<TABLE>
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE PERIOD MAY 16, 1991 THROUGH DECEMBER 31, 1991
(Thousands of Dollars)
<CAPTION>
- --------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
Additions
--------------------
(1) (2)
Charged to
Balance at Charged to other Balance
beginning costs and accounts- Deductions- at end
Description of period<F141> expenses describe describe of period
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
RESERVES DEDUCTED FROM ASSETS
TO WHICH THEY APPLY:
Reserves for uncollectible accounts $ 2,827 $ 2,267 $ - $ 2,260<F142> $ 2,834
========= ========= ========= ========= =======
RESERVES NOT APPLIED AGAINST ASSETS:
Injuries and damages $ 1,777 $ 325 $ - $ 487<F143> $ 1,615
========= ========= ========= ========= ========
<FN>
<F141> Public Service Company of New Hampshire was reorganized on May 15, 1991.
<F142> Accounts written off, net of recoveries.
<F143> Nonoperating reserve transferred to operating.
</TABLE>
<PAGE>S-60
<TABLE>
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE PERIOD JANUARY 1, 1991 THROUGH MAY 15, 1991
(Thousands of Dollars)
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
Additions
--------------------
(1) (2)
Charged to
Balance at Charged to other Balance
beginning costs and accounts- Deductions- at end
Description of period expenses describe describe of period
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
RESERVES DEDUCTED FROM ASSETS
TO WHICH THEY APPLY:
Reserves for uncollectible accounts $ 2,361 $ 1,340 $ - $ 874<F144> $ 2,827
========= ========= ========= ========= =========
RESERVES NOT APPLIED AGAINST ASSETS:
Estimated cancellation costs
for Seabrook 2 $ 12,465 $ - $ (12,465)<F145> $ - -
========= ========= ========= ========= =========
Injuries and damages $ 1,812 $ 257 $ - $ 292<F146> $ 1,777
========= ========= ========= ========= =========
<FN>
<F144> Amounts written off, net of recoveries.
<F145> Write-off of reserve to Account 426.6.
<F146> Nonoperating reserve transferred to operating.
</TABLE>
<PAGE>S-61
<TABLE>
WESTERN MASSACHUSETTS ELECTRIC COMPANY SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
YEAR-ENDED DECEMBER 31, 1993
(Thousands of Dollars)
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
Additions
----------------------
(1) (2)
Charged to
Balance at Charged to other Balance
beginning costs and accounts- Deductions- at end
Description of period expenses describe describe of period
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
RESERVES DEDUCTED FROM ASSETS
TO WHICH THEY APPLY:
Reserves for uncollectible accounts $ 2,117 $ 2,812 $ - $ 2,932<F150> $ 1,997
========== ========== ========== ========== =========
RESERVES NOT APPLIED AGAINST ASSETS:
Injuries and damages <F151> $ 1,612 $ 1,750 $ - $ 602<F152> $ 2,760
========== ========== ========== ========== =========
Medical Insurance <F153> $ 741 $ 4,017 $ - $ 4,291<F154> $ 467
========== ========== ========== ========== =========
<FN>
<F150> Amounts written off, net of recoveries.
<F151> Provided to cover claims for injuries to employees, workmen's compensation, bodily injury to
others, and property damage.
<F152> Principally payments for various injuries and damages and expenses in connection therewith.
<F153> Provided to cover claims for employee medical insurance.
<F154> Principally payments for various employee medical expenses and expenses in connection
therewith.
</TABLE>
<PAGE>S-62
<TABLE>
WESTERN MASSACHUSETTS ELECTRIC COMPANY SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
YEAR ENDED DECEMBER 31, 1992
(Thousands of Dollars)
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
Additions
----------------------
(1) (2)
Charged to
Balance at Charged to other Balance
beginning costs and accounts- Deductions- at end
Description of period expenses describe describe of period
- ------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
RESERVES DEDUCTED FROM ASSETS
TO WHICH THEY APPLY:
Reserves for uncollectible accounts $ 1,977 $ 3,303 $ - $ 3,163<F163> $ 2,117
========= ========== ========== ========== ========
RESERVES NOT APPLIED AGAINST ASSETS:
Injuries and damages <F164> $ 1,496 $ 1,200 $ - $ 1,084<F165> $ 1,612
========= ========== ========== ========== ========
Medical insurance <F166> $ 667 $ 3,916 $ - $ 3,842<F167> $ 741
========= ========== ========== ========== ========
<FN>
<F163> Amounts charged off as uncollectible after deducting customers' deposits and recoveries of
accounts previously charged off.
<F164> Provided to cover claims for injuries to employees, workmen's compensation, bodily injury to
others, and property damage.
<F165> Principally payments for various injuries and damages and expenses in connection therewith.
<F166> Provided to cover claims for employee medical insurance.
<F167> Principally payments for various employee medical expenses and expenses in connection
therewith.
</TABLE>
<PAGE>S-63
<TABLE>
WESTERN MASSACHUSETTS ELECTRIC COMPANY SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
YEAR ENDED DECEMBER 31, 1991
(Thousands of Dollars)
<CAPTION>
- ----------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
Additions
--------------------
(1) (2)
Charged to
Balance at Charged to other Balance
beginning costs and accounts- Deductions- at end
Description of period expenses describe describe of period
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
RESERVES DEDUCTED FROM ASSETS
TO WHICH THEY APPLY:
Reserves for uncollectible accounts $ 1,909 $ 3,789 $ - $ 3,721<F155> $ 1,977
========= ========= ======== ========= =========
RESERVES NOT APPLIED AGAINST ASSETS:
Injuries and damages <F156> $ 986 $ 1,200 $ - $ 690<F157> $ 1,496
Medical insurance <F158> 629 4,178 - 4,140<F159> 667
Other <F160> 738 397 19<F161> 150<F162> 1,004
---------- ---------- -------- --------- ---------
TOTAL $ 2,353 $ 5,775 $ 19 $ 4,980 $ 3,167
========= ========= ======== ========= =========
<FN>
<F155> Amounts charged off as uncollectible after deducting customers' deposits and recoveries of
accounts previously charged off.
<F156> Provided to cover claims for injuries to employees, workmen's compensation, bodily injury to
others, and property damage.
<F157> Principally payments for various injuries and damages and expenses in connection therewith.
<F158> Provided to cover claims for employee medical insurance.
<F159> Principally payments for various employee medical expenses and expenses in connection
therewith.
<F160> Consists of a long-term disability insurance reserve, a supplemental executive retirement plan
reserve, an early retirement incentive reserve, and a reserve for nuclear materials and
supplies remaining at decommissioning.
<F161> Employee contributions related to the long-term disability plan.
<F162> Payments under a long-term disability plan, supplemental executive retirement plan, and early
retirement incentives.
</TABLE>
<PAGE>S-64
<TABLE>
NORTHEAST UTILITIES AND SUBSIDIARIES SCHEDULE IX
SHORT-TERM BORROWINGS
YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
(Thousands of Dollars)
<CAPTION>
- ----------------------------------------------------------------------------------------------------
Column A Column B Column C <F161> Column D Column E <F162> Column<F163>
Category of Balance Weighted Maximum Average Weighted
aggregate at end of average amount amount average
short-term period interest outstanding outstanding interest rate
borrowings rate at end during the during the during the
of period period period period
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 31, 1993
- -------------------------
Notes Payable to Banks $ 173,500 3.3 % $ 254,000 $ 169,081 4.0 %
Commercial Paper $ - - % $ 203,500 $ 91,031 3.4 %
December 31, 1992
- -------------------------
Notes Payable to Banks $ 220,000 4.0 % $ 245,000 $ 84,285 5.0 %
Commercial Paper $ 132,740 4.1 % $ 138,000 $ 36,507 3.7 %
December 31, 1991
- -------------------------
Notes Payable to Banks $ 62,500 5.2 % $ 218,500 $ 114,225 7.0 %
Commercial Paper $ - - % $ 115,000 $ 38,669 6.4 %
<F161> Excludes the effect of commitment fees.
<F162> Average daily balance during the period.
<F163> Based on the daily amounts outstanding including commitmentfees.
</TABLE>
<PAGE>S-65
<TABLE>
THE CONNECTICUT LIGHT AND POWER COMPANY SCHEDULE IX
SHORT-TERM BORROWINGS
YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
(Thousands of Dollars)
<CAPTION>
- -----------------------------------------------------------------------------------------------
Column A Column B Column C <F164> Column D Column E <F165> Column F <F166>
Category of Balance Weighted Maximum Average Weighted
aggregate at end of average amount amount average
short-term period interest outstanding outstanding interest rate
borrowings rate at end during the during the during the
of period period period period
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 31, 1993
- -------------------------
Notes Payable to Banks $ 95,000 3.3 % $ 145,500 $ 86,101 3.8 %
Commercial Paper $ - - % $ 197,500 $ 83,660 3.4 %
NU System Money Pool $ 1,250 2.9 % $ 28,500 $ 6,801 3.0 %
December 31, 1992
- -------------------------
Notes Payable to Banks $ 96,500 4.0 % $ 193,000 $ 43,314 4.8 %
Commercial Paper $ 109,240 4.1 % $ 118,000 $ 27,911 3.7 %
NU System Money Pool $ - - % $ 272,750 $ 80,473 3.9 %
December 31, 1991
- -------------------------
Notes Payable to Banks $ 53,500 5.2 % $ 174,000 $ 75,355 6.8 %
Commercial Paper $ - - % $ 114,000 $ 18,166 6.0 %
NU System Money Pool $ 137,000 4.1 % $ 142,500 $ 11,573 4.6 %
<F164> Excludes the effect of commitment fees.
<F165> Average daily balance during the period.
<F166> Based on the daily amounts outstanding including commitmentfees.
</TABLE>
<PAGE>S-66
<TABLE>
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE IX
SHORT-TERM BORROWINGS
FOR THE YEAR ENDED DECEMBER 31, 1993, THE PERIOD JUNE 5,1992 THROUGH DECEMBER 31, 1992,
THE PERIOD JANUARY 1, 1992 THROUGH JUNE 4, 1992
(Thousands of Dollars)
<CAPTION>
- -----------------------------------------------------------------------------------------------------
Column A Column B Column C <F167> ColumnD Column E <F168> Column F<F169>
Category of Balance Weighted Maximum Average Weighted
aggregate at end of average amount amount average
short-term period interest outstanding outstanding interest rate
borrowings rate at end during the during the during the
of period period period period
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 31, 1993 <F170>
- -------------------------------
Notes Payable to Banks $ - - % $ 35,000 $ 4,205 12.3 %
NU System Money Pool $ 2,500 2.9 % $ 17,500 N/A <F171> N/A <F171>%
For the Period June 5, 1992
through December 31, 1992 <F170>
- ------------------------------
Notes Payable to Banks $ 35,000 5.0 % $ 108,000 $ 8,767 6.7 %
NU System Money Pool $ 8,500 2.7 % $ 25,000 N/A <F171> N/A <F171>
For the Period January 1, 1992
through June 4, 1992
- ------------------------------
Notes Payable to Banks $ 108,000 5.6 % $ 128,000 $ 99,013 5.6 %
<F167> Excludes the effect of commitment fees.
<F168> Average daily balance during the period.
<F169> Based on the daily amounts outstanding including commitmentfees.
<F170> Public Service Company of New Hampshire was acquired byNortheast Utilities on June 5, 1992.
<F171> Average money pool investments were greater than averagemoney pool borrowings during the
period.
</TABLE>
<PAGE>S-67
<TABLE>
WESTERN MASSACHUSETTS ELECTRICCOMPANY SCHEDULE IX
SHORT-TERM BORROWINGS
YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
(Thousands of Dollars)
<CAPTION>
- -------------------------------------------------------------------------------------------------
Column A Column B Column C <F172> Column D Column E <F173> Column F <F174>
Category of Balance Weighted Maximum Average Weighted
aggregate at end of average amount amount average
short-term period interest outstanding outstanding interest rate
borrowings rate at end during the during the during the
of period period period period
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 31, 1993
- -------------------------
Notes Payable to Banks $ 6,000 3.3 % $ 25,000 $ 6,705 4.5 %
Commercial Paper $ - - % $ 23,500 $ 5,727 3.5 %
NU System Money Pool $ - - % $ 28,000 $ N/A <F175> N/A <F175> %
December 31, 1992
- -------------------------
Notes Payable to Banks $ 18,000 3.8 % $ 30,000 $ 2,142 10.6 %
Commercial Paper $ 23,500 4.2 % $ 30,000 $ 8,596 3.7 %
NU System Money Pool $ - - % $ 42,500 $ 10,202 4.2 %
December 31, 1991
- -------------------------
Notes Payable to Banks $ 9,000 5.3 % $ 49,000 $ 19,504 7.1 %
Commercial Paper $ - - % $ 37,000 $ 13,466 6.5 %
NU System Money Pool $ 35,750 4.1 % $ 38,000 $ 4,933 5.1 %
<F172> Excludes the effect of commitment fees.
<F173> Average daily balance during the period.
<F174> Based on the daily amounts outstanding including commitmentfees of compensating balances.
<F175> Average money pool investments were greater than averagemoney pool borrowings
during the period.
</TABLE>
<PAGE>S-68
<TABLE>
NORTH ATLANTIC ENERGY CORPORATION SCHEDULE IX
SHORT-TERM BORROWINGS
FOR THE YEAR ENDED DECEMBER 31, 1993 AND THE PERIOD JUNE 5, 1992
THROUGH DECEMBER 31, 1992
(Thousands of Dollars)
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Column A Column B Column C <F176> ColumnD Column E <F177> Column F <F178>
Category o Balance Weighted Maximum Average Weighted
aggregate at end of average amount amount average
short-term period interest outstanding outstanding interest rate
borrowings rate at end duringthe during the during the
of period period period period
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 31, 1993
- -----------------------------
NU System Money Pool $ - - % $ 34,500 $ 14,835 3.2 %
For the Period June 5, 1992
through December 31, 1992 <F176>
- -----------------------------
NU System Money Pool $ 18,500 2.7 % $ 35,500 $ 21,234 3.2 %
<F176> Atlantic Energy Corporation began operations on June 5, 1992.
<F177> Average daily balance during the period.
</TABLE>
<PAGE>S-69
<TABLE>
NORTHEAST UTILITIES AND SUBSIDIARIES SCHEDULE X
SUPPLEMENTARY INCOME STATEMENT INFORMATION
YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
(Thousands of Dollars)
<CAPTION>
- ----------------------------------------------------------------------------------------------------
Column A Column B
Item Charged to Expenses
- ----------------------------------------------------------------------------------------------------
1993 1992 1991
---------------- ---------------- ----------------
<S> <C> <C> <C>
Taxes, other than payroll and
income taxes:
State gross receipts $ 94,199 $ 87,695 $ 87,240
Real and personal property 113,253 98,279 75,416
---------------- ---------------- ----------------
TOTAL $ 207,452 $ 185,974 $ 162,656
================ ================ ================
</TABLE>
<PAGE>S-70
<TABLE>
THE CONNECTICUT LIGHT AND POWER COMPANY SCHEDULE X
SUPPLEMENTARY INCOME STATEMENT INFORMATION
YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
(Thousands of Dollars)
<CAPTION>
- -----------------------------------------------------------------------------------------------------
Column A Column B
Item Charged to Expense
- -----------------------------------------------------------------------------------------------------
1993 1992 1991
---------------- ---------------- ----------------
<S> <C> <C> <C>
Taxes, other than payroll and
income taxes:
State gross receipts $ 94,047 $ 87,532 $ 87,095
Real and personal property 63,551 64,054 61,344
---------------- ---------------- -----------------
TOTAL $ 157,598 $ 151,586 $ 148,439
================ ================ =================
</TABLE>
<PAGE>S-71
<TABLE>
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE X
SUPPLEMENTARY INCOME STATEMENT INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1993 AND THE PERIODS JUNE 5, 1992
THROUGH DECEMBER 31, 1992 AND JANUARY 1, 1992 THROUGH JUNE 4, 1992
(Thousands of Dollars)
<CAPTION>
- --------------------------------------------------------------------------------------------------
Column A Column B
Item Charged to Expenses
- --------------------------------------------------------------------------------------------------
<S> <C>
December 31, 1993
- --------------------------------
Taxes, other than payroll and
income taxes:
Real and personal property $ 25,020
================
TOTAL
June 5, 1992 - December 31, 1992 <F178>
- --------------------------------
Taxes, other than payroll and
income taxes:
Real and personal property $ 13,827
================
TOTAL
January 1, 1992 - June 4, 1992
- --------------------------------
Taxes, other than payroll and
income taxes:
Real and personal property $ 16,588
================
<F178> Public Service Company of New Hampshire was acquired by Northeast Utilities on June 5, 1992.
</TABLE>
<PAGE>S-72
<TABLE>
WESTERN MASSACHUSETTS ELECTRIC COMPANY SCHEDULE X
SUPPLEMENTARY INCOME STATEMENT INFORMATION
YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
(Thousands of Dollars)
<CAPTION>
- ----------------------------------------------------------------------------------------------------
Column A Column B
Item Charged to Expense
- ----------------------------------------------------------------------------------------------------
1993 1992 1991
---------------- ---------------- ----------------
<S> <C> <C> <C>
Taxes, other than payroll and
income taxes:
Real and personal property $ 14,279 $ 12,947 $ 11,814
================ ================ ================
TOTAL
</TABLE>
<PAGE>S-73
<TABLE>
NORTH ATLANTIC ENERGY CORPORATION SCHEDULE X
SUPPLEMENTARY INCOME STATEMENT INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1993 AND
FOR THE PERIOD JUNE 5, 1992 THROUGH DECEMBER 31, 1992<F179>
(Thousands of Dollars)
<CAPTION>
- --------------------------------------------------------------------------------------
Column A Column B
Item Charged to Expense
- --------------------------------------------------------------------------------------
<S> <C>
December 31, 1993
- ------------------------------
Taxes, other than payroll and
income taxes:
Real and personal property $ 7,549
============
TOTAL
June 5, 1992 - December 31, 1992
- ----------------------------------------
Taxes, other than payroll and
income taxes:
Real and personal property $ 4,528
============
TOTAL
<F179>North Atlantic Energy Corporation began operations on June 5, 1992.
</TABLE>
<PAGE>S-74
EXHIBIT INDEX
Each document described below is incorporated by reference to the files of
the Securities and Exchange Commission, unless the reference to the document is
marked as follows:
* - Filed with the 1993 Annual Report on Form 10-K for NU and herein
incorporated by reference from the 1993 NU Form 10-K, File
No. 1-5324 into the 1993 Annual Reports on Form 10-K for CL&P,
PSNH, WMECO and NAEC.
# - Filed with the 1993 Annual Report on Form 10-K for NU and herein
incorporated by reference from the 1993 NU Form 10-K, File
No. 1-5324 into the 1993 Annual Report on Form 10-K for CL&P.
@ - Filed with the 1993 Annual Report on Form 10-K for NU and herein
incorporated by reference from the 1993 NU Form 10-K, File No.
1-5324 into the 1993 Annual Report on Form 10-K for PSNH.
** - Filed with the 1993 Annual Report on Form 10-K for NU and herein
incorporated by reference from the 1993 NU Form 10-K, File No.
1-5324 into the 1993 Annual Report on Form 10-K for WMECO.
## - Filed with the 1993 Annual Report on Form 10-K for NU and herein
incorporated by reference from the 1993 Form 10-K, File No.
1-5324 into the 1993 Annual Report on Form 10-K for NAEC.
Exhibit
Number Description
3 Articles of Incorporation and By-Laws
3.1 Northeast Utilities
3.1.1 Declaration of Trust of NU, as amended through May 24, 1988.
(Exhibit 3.1.1, 1988 NU Form 10-K, File No. 1-5324)
3.2 The Connecticut Light and Power Company
# 3.2.1 Certificate of Incorporation of CL&P, restated to
March 22, 1994.
# 3.2.2 By-laws of CL&P, as amended to March 1, 1982.
3.3 Public Service Company of New Hampshire
@ 3.3.1 Articles of Incorporation, as amended to May 16, 1991.
@ 3.3.2 By-laws of PSNH, as amended to November 1, 1993.
3.4 Western Massachusetts Electric Company
3.4.1 Certificate of Organization of WMECO, as amended, to
August 31, 1954. (Exhibit 3.1, File No. 2-11114)
3.4.2 Amendments to Certificate of Organization of WMECO of
May 19, 1966 and of December 5, 1967. (Exhibit 3.2, File
No. 2-30534)
<PAGE>E-1
3.4.3 Articles of Amendment dated December 9, 1981. (Exhibit
3.1.2, 1981 WMECO Form 10-K, File No. 0-7624)
3.4.4 Certificate of Vote of Directors Establishing a Series of a
Class of Stock, dated December 16, 1981. (Exhibit 3.1.3,
1981 WMECO Form 10-K, File No. 0-7624)
3.4.5 Articles of Amendment dated April 7, 1983. (Exhibit 3.3.5,
1983 NU Form 10-K, File No. 1-5324)
3.4.6 Certificate of Vote of Directors Establishing a Series of a
Class of Stock, dated April 12, 1983. (Exhibit 3.3.6, 1983
NU Form 10-K, File No. 1-5324)
3.4.7 Articles of Amendment dated January 29, 1987. (Exhibit
3.3.7, 1986 NU Form 10-K, File No. 1-5324)
3.4.8 Articles of Amendment dated February 11, 1987. (Exhibit
3.3.8, 1986 NU Form 10-K, File No. 1-5324)
3.4.9 Articles of Amendment dated February 19, 1988. (Exhibit
3.3.9, 1987 NU Form 10-K, File No. 1-5324)
3.4.10 Certificate of Vote of Directors Establishing a Series of a
Class of Stock, dated February 23, 1988. (Exhibit 3.3.10,
1987 NU Form 10-K, File No. 1-5324)
** 3.4.11 By-laws of WMECO, as amended to February 24, 1988.
3.5 North Atlantic Energy Corporation
## 3.5.1 Articles of Incorporation of NAEC dated September 20, 1991.
## 3.5.2 Articles of Amendment dated October 16, 1991 and June 2,
1992 to Articles of Incorporation of NAEC.
## 3.5.3 By-laws of NAEC, as amended to November 8, 1993.
4 Instruments defining the rights of security holders, including indentures
4.1 Northeast Utilities
4.1.1 Indenture dated as of December 1, 1991 between Northeast
Utilities and IBJ Schroder Bank & Trust Company, with
respect to the issuance of Debt Securities. (Exhibit 4.1.1,
1991 NU Form 10-K, File No. 1-5324)
4.1.2 First Supplemental Indenture dated as of December 1, 1991
between Northeast Utilities and IBJ Schroder Bank & Trust
Company, with respect to the issuance of Series A Notes.
(Exhibit 4.1.2, 1991 NU Form 10-K, File No. 1-5324)
4.1.3 Second Supplemental Indenture dated as of March 1, 1992
between Northeast Utilities and IBJ Schroder Bank & Trust
Company with respect to the issuance of 8.38% Amortizing
Notes. (Exhibit 4.1.3, 1992 NU Form 10-K, File No. 1-5324)
<PAGE>E-2
4.1.4 Warrant Agreement dated as of June 5, 1992 between Northeast
Utilities and the Service Company. (Exhibit 4.1.4, 1992 NU
Form 10-K, File No. 1-5324)
4.1.4.1 Additional Warrant Agent Agreement dated as of
June 5, 1992 between Northeast Utilities and
State Street Bank and Trust Company. (Exhibit
4.1.4.1, 1992 NU Form 10-K, File No. 1-5324)
4.1.4.2 Exchange and Disbursing Agent Agreement dated as
of June 5, 1992 among Northeast Utilities,
Public Service Company of New Hampshire and
State Street Bank and Trust Company. (Exhibit
4.1.4.2, 1992 NU Form 10-K, File No. 1-5324)
4.1.5 Credit Agreements among CL&P, NU, WMECO, NUSCO
(as Agent) and 19 Commercial Banks dated
December 3, 1992 (364 Day and Three-Year
Facilities). (Exhibit C.2.38, 1992 NU Form U5S,
File No. 30-246)
4.1.6 Credit Agreements among CL&P, WMECO, NU, Holyoke
Water Power Company, RRR, NNECO and NUSCO (as
Agent) dated December 3, 1992 (364 Day and
Three-Year Facilities). (Exhibit C.2.39, 1992 NU
Form U5S, File No. 30-246)
4.2 The Connecticut Light and Power Company
4.2.1 Indenture of Mortgage and Deed of Trust between CL&P and
Bankers Trust Company, Trustee, dated as of May 1, 1921.
(Composite including all twenty-four amendments to May 1,
1967.) (Exhibit 4.1.1, 1989 NU Form 10-K, File No. 1-5324)
Supplemental Indentures to the Composite May 1, 1921
Indenture of Mortgage and Deed of Trust between CL&P and
Bankers Trust Company, dated as of:
4.2.2 April 1, 1967. (Exhibit 4.16, File No. 2-60806)
4.2.3 January 1, 1968. (Exhibit 4.18, File No. 2-60806)
4.2.4 December 1, 1969. (Exhibit 4.20, File No. 2-60806)
4.2.5 June 30, 1982. (Exhibit 4.33, File No. 2-79235)
4.2.6 June 1, 1989. (Exhibit 4.1.24, 1989 NU Form 10-K, File No.
1-5324)
4.2.7 September 1, 1989. (Exhibit 4.1.25, 1989 NU Form 10-K, File
No. 1-5324)
4.2.8 December 1, 1989. (Exhibit 4.1.26, 1989 NU Form 10-K, File
No. 1-5324)
4.2.9 April 1, 1992. (Exhibit 4.30, File No. 33-59430)
4.2.10 July 1, 1992. (Exhibit 4.31, File No. 33-59430)
<PAGE>E-3
4.2.11 October 1, 1992. (Exhibit 4.32, File No. 33-59430)
4.2.12 July 1, 1993. (Exhibit A.10(b), File No. 70-8249)
4.2.13 July 1, 1993. (Exhibit A.10(b), File No. 70-8249)
# 4.2.14 December 1, 1993.
# 4.2.15 February 1, 1994.
# 4.2.16 February 1, 1994.
4.2.17 Financing Agreement between Industrial Development Authority
of the State of New Hampshire and CL&P (Pollution Control
Bonds) dated as of December 1, 1986. (Exhibit C.1.47, 1986
NU Form U5S, File No. 30-246)
4.2.18 Financing Agreement between Industrial Development Authority
of the State of New Hampshire and CL&P (Pollution Control
Bonds) dated as of October 1, 1988. (Exhibit C.1.55, 1988
NU Form U5S, File No. 30-246)
4.2.19 Financing Agreement between Industrial Development Authority
of the State of New Hampshire and CL&P (Pollution Control
Bonds) dated as of December 1, 1989. (Exhibit C.1.39, 1989
NU Form U5S, File No. 30-246)
4.2.20 Loan and Trust Agreement among Business Finance Authority of
the State of New Hampshire and CL&P (Pollution Control
Bonds) dated as of December 1, 1992. (Exhibit C.2.33, 1992
NU Form U5S, File No. 30-246)
# 4.2.21 Series A (Tax Exempt Refunding) PCRB Loan Agreement between
Connecticut Development Authority and CL&P (Pollution
Control Bonds) dated as of September 1, 1993.
# 4.2.22 Series B (Tax Exempt Refunding) PCRB Loan Agreement between
Connecticut Development Authority and CL&P (Pollution
Control Bonds) dated as of September 1, 1993.
# 4.2.23 Series A (Tax Exempt Refunding) PCRB Letter of Credit and
Reimbursement Agreement (Pollution Control Bonds) dated as
of September 1, 1993.
# 4.2.24 Series B (Tax Exempt Refunding) PCRB Letter of Credit and
Reimbursement Agreement (Pollution Control Bonds) dated as
of September 1, 1993.
4.3 Public Service Company of New Hampshire
4.3.1 First Mortgage Indenture dated as of August 15, 1978 between
PSNH and First Fidelity Bank, National Association, New
Jersey, Trustee, (Composite including all amendments to May
16, 1991). (Exhibit 4.4.1, 1992 NU Form 10-K, File No. 1-
5324)
<PAGE>E-4
4.3.1.1 Tenth Supplemental Indenture dated as of May 1,
1991 between PSNH and First Fidelity Bank,
National Association. (Exhibit 4.1, PSNH Current
Report on Form 8-K dated February 10, 1992, File
No. 1-6392).
4.3.2 Revolving Credit Agreement dated as May 1, 1991. (Exhibit
4.12, PSNH Current Report on Form 8-K dated February 10,
1992, File No. 1-6392)
4.3.3 Term Credit Agreement dated as of May 1, 1991. (Exhibit
4.11, PSNH Current Report on Form 8-K dated February 10,
1992, File No. 1-6392)
4.3.4 Series A (Tax Exempt New Issue) PCRB Loan and Trust
Agreement dated as of May 1, 1991. (Exhibit 4.2, PSNH
Current Report on Form 8-K dated February 10, 1992, File No.
1-6392)
4.3.5 Series B (Tax Exempt Refunding) PCRB Loan and Trust
Agreement dated as of May 1, 1991. (Exhibit 4.3, PSNH
Current Report on Form 8-K dated February 10, 1992, File No.
1-6392)
4.3.6 Series C (Tax Exempt Refunding) PCRB Loan and Trust
Agreement dated as of May 1, 1991. (Exhibit 4.4, PSNH
Current Report on Form 8-K dated February 10, 1992, File No.
1-6392)
4.3.7 Series D (Taxable New Issue) PCRB Loan and Trust Agreement
dated as of May 1, 1991. (Exhibit 4.5, PSNH Current Report
on Form 8-K dated February 10, 1992, File No. 1-6392)
4.3.7.1 First Supplement to Series D (Tax Exempt
Refunding Issue) PCRB Loan and Trust Agreement
dated as of December 1, 1992. (Exhibit 4.4.5.1,
1992 NU Form 10-K, File No. 1-5324)
4.3.8 Series E (Taxable New Issue) PCRB Loan and Trust Agreement
dated as of May 1, 1991. (Exhibit 4.6, PSNH Current Report
on Form 8-K dated February 10, 1992, File No. 1-6392)
@ 4.3.8.1 First Supplement to Series E (Tax Exempt
Refunding Issue) PCRB Loan and Trust Agreement
dated as of December 1, 1993.
@ 4.3.9 Series D (May 1, 1991 Taxable New Issue and December 1, 1992
Tax Exempt Refunding Issue) PCRB Letter of Credit and
Reimbursement Agreement dated as of October 1, 1992.
@ 4.3.9.1 Amended and Restated Letter of Credit dated
December 17, 1992.
4.3.10 Series E (May 1, 1991 Taxable New Issue and December 1, 1993
Tax Exempt Refunding Issue) PCRB Letter of Credit and
Reimbursement Agreement dated as of May 1, 1991. (Exhibit
4.8, PSNH Current Report on Form 8-K dated February 10,
1992, File No. 1-6392)
<PAGE>E-5
@ 4.3.10.1 Amended and Restated Letter of Credit dated
December 15, 1993.
4.4 Western Massachusetts Electric Company
** 4.4.1 First Mortgage Indenture and Deed of Trust between WMECO and
Old Colony Trust Company, Trustee, dated as of August 1,
1954.
Supplemental Indentures thereto dated as of:
4.4.2 March 1, 1967. (Exhibit 2.5, File No. 2-68808)
4.4.3 March 1, 1968. (Exhibit 2.6, File No. 2-68808)
4.4.4 December 1, 1968. (Exhibit 2.7, File No. 2-68808)
4.4.5 July 1, 1972. (Exhibit 2.9, File No. 2-68808)
4.4.6 May 1, 1986. (Exhibit 4.3.18, 1986 NU Form 10-K, File No.
1-5324)
4.4.7 December 1, 1988. (Exhibit 4.3.20, 1988 NU Form 10-K, File
No. 1-5324.)
4.4.8 September 1, 1990. (Exhibit 4.3.15, 1990 NU Form 10-K, File
No. 1-5324.)
4.4.9 December 1, 1992. (Exhibit 4.15, File No. 33-55772)
4.4.10 January 1, 1993. (Exhibit 4.5.13, 1992 NU Form 10-K, File
No. 1-5324)
** 4.4.11 March 1, 1994.
** 4.4.12 March 1, 1994.
** 4.4.13 Series A (Tax Exempt Refunding) PCRB Loan Agreement between
Connecticut Development Authority and WMECO (Pollution
Control Bonds) dated as of September 1, 1993.
** 4.4.14 Series A (Tax Exempt Refunding) PCRB Letter of Credit and
Reimbursement Agreement (Pollution Control Bonds) dated as
of September 1, 1993.
4.5 North Atlantic Energy Corporation
4.5.1 First Mortgage Indenture and Deed of Trust between NAEC and
United States Trust Company of New York, Trustee, dated as
of June 1, 1992. (Exhibit 4.6.1, 1992 NU Form 10-K, File
No. 1-5324)
4.5.2 Note Indenture dated as of May 15, 1991. (Exhibit 4.10,
PSNH Current Report on Form 8-K dated February 10, 1992,
File No. 1-6392)
<PAGE>E-6
4.5.3 First Supplemental Indenture dated as of June 5, 1992
between NAEC, PSNH and United States Trust Company of New
York, Trustee. (Exhibit 4.6.3, 1992 NU Form 10-K, File No.
1-5324)
10 Material Contracts
10.1 Stockholder Agreement dated as of July 1, 1964 among the
stockholders of Connecticut Yankee Atomic Power Company (CYAPC).
(Exhibit 13.1, File No. 2-22958)
10.2 Form of Power Contract dated as of July 1, 1964 between CYAPC and
each of CL&P, HELCO, PSNH and WMECO. (Exhibit 13.2, File No.
2-22958)
10.2.1 Form of Additional Power Contract dated as of April 30,
1984, between CYAPC and each of CL&P, PSNH and WMECO.
(Exhibit 10.2.4, 1984 NU Form 10-K, File No. 1-5324)
10.2.2 Form of 1987 Supplementary Power Contract dated as of April
1, 1987, between CYAPC and each of CL&P, PSNH and WMECO.
(Exhibit 10.2.6, 1987 NU Form 10-K, File No. 1-5324)
10.3 Capital Funds Agreement dated as of September 1, 1964 between CYAPC
and CL&P, HELCO, PSNH and WMECO. (Exhibit 13.3, File No. 2-22958)
#@** 10.4 Stockholder Agreement dated December 10, 1958 between Yankee Atomic
Electric Company (YAEC) and CL&P, HELCO, PSNH and WMECO.
10.5 Form of Amendment No. 3, dated as of April 1, 1985, to Power
Contract between YAEC and each of CL&P, PSNH and WMECO, including
a composite restatement of original Power Contract dated June 30,
1959 and Amendment No. 1 dated April 1, 1975 and Amendment No. 2
dated October 1, 1980. (Exhibit 10.5, 1988 NU Form 10-K, File No.
1-5324.)
10.5.1 Form of Amendment No. 4 to Power Contract, dated May 6,
1988, between YAEC and each of CL&P, PSNH and WMECO.
(Exhibit 10.5.1, 1989 NU Form 10-K, File No. 1-5324)
10.5.2 Form of Amendment No. 5 to Power Contract, dated June 26,
1989, between YAEC and each of CL&P, PSNH and WMECO.
(Exhibit 10.5.2, 1989 NU Form 10-K, File No. 1-5324)
10.5.3 Form of Amendment No. 6 to Power Contract, dated July 1,
1989, between YAEC and each of CL&P, PSNH and WMECO.
(Exhibit 10.5.3, 1989 NU Form 10-K, File No. 1-5324)
#@** 10.5.4 Form of Amendment No. 7 to Power Contract, dated February 1,
1992, between YAEC and each of CL&P, PSNH and WMECO.
10.6 Stockholder Agreement dated as of May 20, 1968 among stockholders
of MYAPC. (Exhibit 4.15, File No. 2-30018)
10.7 Form of Power Contract dated as of May 20, 1968 between MYAPC and
each of CL&P, HELCO, PSNH and WMECO. (Exhibit 4.14, File No.
2-30018)
<PAGE>E-7
#@** 10.7.1 Form of Amendment No. 1 to Power Contract dated as of March
1, 1983 between MYAPC and each of CL&P, PSNH and WMECO.
#@** 10.7.2 Form of Amendment No. 2 to Power Contract dated as of
January 1, 1984 between MYAPC and each of CL&P, PSNH and
WMECO.
10.7.3 Form of Amendment No. 3 to Power Contract dated as of
October 1, 1984 between MYAPC and each of CL&P, PSNH and
WMECO. (Exhibit 10.7.3, 1985 NU Form 10-K, File No. 1-5324)
#@** 10.7.4 Form of Additional Power Contract dated as of February 1,
1984 between MYAPC and each of CL&P, PSNH and WMECO.
10.8 Capital Funds Agreement dated as of May 20, 1968 between Maine
Yankee Atomic Power Company (MYAPC) and CL&P, PSNH, HELCO and
WMECO. (Exhibit 4.13, File No. 2-30018)
10.8.1 Amendment No. 1 to Capital Funds Agreement, dated as of
August 1, 1985, between MYAPC, CL&P, PSNH and WMECO.
(Exhibit 10.6.1, 1985 NU Form 10-K, File No. 1-5324)
10.9 Sponsor Agreement dated as of August 1, 1968 among the sponsors of
VYNPC. (Exhibit 4.16, File No. 2-30285)
10.10 Form of Power Contract dated as of February 1, 1968 between
VYNPC and each of CL&P, HELCO, PSNH and WMECO. (Exhibit
4.18, File No. 2-30018)
10.10.1 Form of Amendment to Power Contract dated as of June
1, 1972 between VYNPC and each of CL&P, HELCO, PSNH
and WMECO. (Exhibit 5.22, File No. 2-47038)
#@** 10.10.2 Form of Second Amendment to Power Contract dated as of
April 15, 1983 between VYNPC and each of CL&P, PSNH
and WMECO.
10.10.3 Form of Third Amendment to Power Contract dated as of
April 24, 1985 between VYNPC and each of CL&P, PSNH
and WMECO. (Exhibit 10.10.3, 1986 NU Form 10-K, File
No. 1-5324)
10.10.4 Form of Fourth Amendment to Power Contract dated as of
June 1, 1985 between VYNPC and each of CL&P, PSNH and
WMECO. (Exhibit 10.10.4, 1986 NU Form 10-K, File No.
1-5324)
10.10.5 Form of Fifth Amendment to Power Contract dated as of
May 6, 1988 between VYNPC and each of CL&P, PSNH and
WMECO. (Exhibit 10.10.5, 1990 NU Form 10-K, File
No. 1-5324)
10.10.6 Form of Sixth Amendment to Power Contract dated as of
May 6, 1988 between VYNPC and each of CL&P, PSNH and
WMECO. (Exhibit 10.10.6, 1990 NU Form 10-K, File No.
1-5324)
<PAGE>E-8
10.10.7 Form of Seventh Amendment to Power Contract dated as
of June 15, 1989 between VYNPC and each of CL&P, PSNH
and WMECO. (Exhibit 10.10.7, 1990 NU Form 10-K, File
No. 1-5324)
10.10.8 Form of Eighth Amendment to Power Contract dated as of
December 1, 1989 between VYNPC and each of CL&P, PSNH
and WMECO. (Exhibit 10.10.8, 1990 NU Form 10-K, File
No. 1-5324)
#@** 10.10.9 Form of Additional Power Contract dated as of February
1, 1984 between VYNPC and each of CL&P, PSNH and
WMECO.
10.11 Capital Funds Agreement dated as of February 1, 1968 between
Vermont Yankee Nuclear Power Corporation (VYNPC) and CL&P,
HELCO, PSNH and WMECO. (Exhibit 4.16, File No. 2-30018)
10.11.1 Form of First Amendment to Capital Funds Agreement
dated as of March 12, 1968 between VYNPC and CL&P,
HELCO, PSNH and WMECO. (Exhibit 4.17, File
No. 2-30018)
#@** 10.11.2 Form of Second Amendment to Capital Funds Agreement
dated as of September 1, 1993 between VYNPC and CL&P,
HELCO, PSNH and WMECO.
10.12 Amended and Restated Millstone Plant Agreement dated as of
December 1, 1984 by and among CL&P, WMECO and Northeast
Nuclear Energy Company (NNECO). (Exhibit 10.17, 1985 NU
Form 10-K, File No. 1-5324)
10.13 Sharing Agreement dated as of September 1, 1973 with respect
to 1979 Connecticut nuclear generating unit (Millstone 3).
(Exhibit 6.43, File No. 2-50142)
10.13.1 Amendment dated August 1, 1974 to Sharing Agreement -
1979 Connecticut Nuclear Unit. (Exhibit 5.45, File
No. 2-52392)
10.13.2 Amendment dated December 15, 1975 to Sharing Agreement
- 1979 Connecticut Nuclear Unit. (Exhibit 7.47, File
No. 2-60806)
10.13.3 Amendment dated April 1, 1986 to Sharing Agreement -
1979 Connecticut Nuclear Unit. (Exhibit 10.17.3, 1990
NU Form 10-K, File No. 1-5324)
10.14 Agreement dated July 19, 1990, among NAESCO and Seabrook
Joint owners with respect to operation of Seabrook.
(Exhibit 10.53, 1990 NU Form 10-K, File No. 1-5324)
10.15 Sharing Agreement between CL&P, WMECO, HP&E, HWP and PSNH
dated as of June 1, 1992. (Exhibit 10.17, 1992 NU Form 10-
K, File No. 1-5324)
10.16 Form of Seabrook Power Contract between PSNH and NAEC, as
amended and restated. (Exhibit 10.45, NU 1992 Form 10-K,
File No. 1-5324)
<PAGE>E-9
10.17 Agreement for joint ownership, construction and operation of
New Hampshire nuclear generating units dated as of May 1,
1973. (Exhibit 13-57, File No. 2-48966)
10.17.1 Amendments to Exhibit 10.17 dated May 24, 1974, June
21, 1974 and September 25, 1974. (Exhibit 5.15, File
No. 2-51999)
10.17.2 Amendments to Exhibit 10.17 dated October 25, 1974 and
January 31, 1975. (Exhibit 5.23, File No. 2-54646)
10.17.3 Sixth Amendment to Exhibit 10.17 dated as of April 18,
1979. (Exhibit 5.4.3, File No. 2-64294)
10.17.4 Seventh Amendment to Exhibit 10.17 dated as of April
18, 1979. (Exhibit 5.4.4, File No. 2-64294)
10.17.5 Eighth Amendment to Exhibit 10.17 dated as of April
25, 1979. (Exhibit 5.4.5, File No. 2-64815)
10.17.6 Ninth Amendment to Exhibit 10.17 dated as of June 8,
1979. (Exhibit 5.4.6, File No. 2-64815)
10.17.7 Tenth Amendment to Exhibit 10.17 dated as of October
10, 1979. (Exhibit 5.4.2, File No. 2-66334)
10.17.8 Eleventh Amendment to Exhibit 10.17 dated as of
December 15, 1979. (Exhibit 5.4.8, File No. 2-66492)
10.17.9 Twelfth Amendment to Exhibit 10.17 dated as of June
16, 1980. (Exhibit 5.4.9, File No. 2-68168)
10.17.10 Thirteenth Amendment to Exhibit 10.17 dated as of
December 31, 1980. (Exhibit 10.6, File No. 2-70579)
* 10.17.11 Fourteenth Amendment to Exhibit 10.17 dated as of June
1, 1982.
10.17.12 Fifteenth Amendment to Exhibit 10.17 dated as of April
27, 1984. (Exhibit 10.14.12, 1984 NU Form 10-K, File
No. 1-5324)
10.17.13 Sixteenth Amendment to Exhibit 10.17 dated as of June
15, 1984. (Exhibit 10.14.13, 1984 NU Form 10-K, File
No. 1-5324)
10.17.14 Seventeenth Amendment to Exhibit 10.17 dated as of
March 8, 1985. (Exhibit 10.13.14, 1985 NU Form 10-K,
File No. 1-5324)
10.17.15 Eighteenth Amendment to Exhibit 10.17 dated as of
March 14, 1986. (Exhibit 10.13.15, 1986 NU Form 10-K,
File No. 1-5324)
10.17.16 Nineteenth Amendment to Exhibit 10.17 dated as of May
1, 1986. (Exhibit 10.13.16, 1986 NU Form 10-K, File
No. 1-5324)
<PAGE>E-10
10.17.17 Twentieth Amendment to Exhibit 10.17 dated as of July
15, 1986. (Exhibit 10.13.17, 1986 NU Form 10-K, File
No. 1-5324)
10.17.18 Twenty-first Amendment to Exhibit 10.17 dated as of
November 12, 1987. (Exhibit 10.13.18, 1987 NU Form
10-K, File No. 1-5324)
10.17.19 Twenty-second Amendment to Exhibit 10.17 dated as of
January 13, 1989. (Exhibit 10.13.19, 1989 NU Form
10-K, File No. 1-5324)
10.17.20 Twenty-third Amendment to Exhibit 10.17 dated as of
November 1, 1990. (Exhibit 10.13.20, 1990 NU Form 10-
K, File No. 1-5324)
10.17.21 Memorandum of Understanding dated November 7, 1988
between PSNH and Massachusetts Municipal Wholesale
Electric Company (Exhibit 10.17, PSNH 1989 Form 10-K,
File No. 1-6392)
10.17.22 Agreement of Settlement among Joint Owners dated as of
January 13, 1989. (Exhibit 10.13.21, 1988 NU Form 10-
K, File No. 1-5324)
10.17.22.1 Supplement to Settlement Agreement, dated as of
February 7, 1989, between PSNH and Central Maine
Power Company. (Exhibit 10.18.1, PSNH 1989 Form
10-K, File No. 1-6392)
10.18 Amended and Restated Agreement for Seabrook Project
Disbursing Agent dated as of November 1, 1990. (Exhibit
10.4.7, File No. 33-35312)
10.18.1 Form of First Amendment to Exhibit 10.18. (Exhibit
10.4.8, File No. 33-35312)
* 10.18.2 Form (Composite) of Second Amendment to Exhibit 10.18.
10.19 Agreement dated November 1, 1974 for Joint Ownership,
Construction and Operation of William F. Wyman Unit No. 4
among PSNH, Central Maine Power Company and other utilities.
(Exhibit 5.16 , File No. 2-52900)
10.19.1 Amendment to Exhibit 10.19 dated June 30, 1975.
(Exhibit 5.48, File No. 2-55458)
10.19.2 Amendment to Exhibit 10.19 dated as of August 16,
1976. (Exhibit 5.19, File No. 2-58251)
10.19.3 Amendment to Exhibit 10.19 dated as of December 31,
1978. (Exhibit 5.10.3, File No. 2-64294)
#** 10.20 Form of Service Contract dated as of July 1, 1966 between
each of NU, CL&P and WMECO and the Service Company.
10.20.1 Service Contract dated as of June 5, 1992 between PSNH
and the Service Company. (Exhibit 10.12.4, 1992 NU
Form 10-K, File No. 1-5324)
<PAGE>E-11
10.20.2 Service Contract dated as of June 5, 1992 between NAEC
and the Service Company. (Exhibit 10.12.5, 1992 NU
Form 10-K, File No. 1-5324)
* 10.20.3 Form of Annual Renewal of Service Contract.
10.21 Memorandum of Understanding between CL&P, HELCO, Holyoke
Power and Electric Company (HP&E), Holyoke Water Power
Company (HWP) and WMECO dated as of June 1, 1970 with
respect to pooling of generation and transmission. (Exhibit
13.32, File No. 2-38177)
#** 10.21.1 Amendment to Memorandum of Understanding between CL&P,
HELCO, HP&E, HWP and WMECO dated as of February 2,
1982 with respect to pooling of generation and
transmission.
10.22 New England Power Pool Agreement effective as of November 1,
1971, as amended to November 1, 1988. (Exhibit 10.15, 1988
NU Form 10-K, File No. 1-5324.)
10.22.1 Twenty-sixth Amendment to Exhibit 10.22 dated as of
March 15, 1989. (Exhibit 10.15.1, 1990 NU Form 10-K,
File No. 1-5324)
10.22.2 Twenty-seventh Amendment to Exhibit 10.22 dated as of
October 1, 1990. (Exhibit 10.15.2, 1991 NU Form 10-K,
File No. 1-5324)
10.22.3 Twenty-eighth Amendment to Exhibit 10.22 dated as of
September 15, 1992. (Exhibit 10.18.3, 1992 NU Form
10-K, File No. 1-5324)
* 10.22.4 Twenty-ninth Amendment to Exhibit 10.22 dated as of
May 1, 1993.
10.23 Agreements among New England Utilities with respect to the
Hydro-Quebec interconnection projects. (See Exhibits 10(u)
and 10(v); 10(w), 10(x), and 10(y), 1990 and 1988,
respectively, Form 10-K of New England Electric System,
File No. 1-3446.)
10.24 Trust Agreement dated February 11, 1992, between State
Street Bank and Trust Company of Connecticut, as Trustor,
and Bankers Trust Company, as Trustee, and CL&P and WMECO,
with respect to NBFT. (Exhibit 10.23, 1991 NU Form 10-K,
File No. 1-5324)
10.24.1 Nuclear Fuel Lease Agreement dated as of February 11,
1992, between Bankers Trust Company, Trustee, as
Lessor, and CL&P and WMECO, as Lessees. (Exhibit
10.23.1, 1991 NU Form 10-K, File No. 1-5324)
10.25 Simulator Financing Lease Agreement, dated as of February 1,
1985, by and between ComPlan and NNECO. (Exhibit 10.52,
1985 NU Form 10-K, File No. 1-5324)
<PAGE>E-12
10.26 Simulator Financing Lease Agreement, dated as of May 2,
1985, by and between The Prudential Insurance Company of
America and NNECO. (Exhibit 10.53, 1985 NU Form 10-K, File
No. 1-5324)
10.27 Lease dated as of April 14, 1992 between The Rocky River
Realty Company (RRR) and Northeast Utilities Service Company
(NUSCO) with respect to the Berlin, Connecticut headquarters
(office lease). (Exhibit 10.29, 1992 NU Form 10-K, File
No. 1-5324)
10.27.1 Lease date as of April 14, 1992 between RRR and NUSCO
with respect to the Berlin, Connecticut headquarters
(project lease). (Exhibit 10.29.1, 1992 NU Form 10-K,
File No. 1-5324)
* 10.28 Millstone Technical Building Note Agreement dated as of
December 21, 1993 between, by and between The Prudential
Insurance Company of America and NNECO.
10.29 Lease and Agreement, dated as of December 15, 1988, by and
between WMECO and Bank of New England, N.A., with BNE Realty
Leasing Corporation of North Carolina. (Exhibit 10.63, 1988
NU Form 10-K, File No. 1-5324.)
10.30 Note Agreement dated April 14, 1992, by and between The
Rocky River Realty Company (RRR) and Purchasers named
therein (Connecticut General Life Insurance Company, Life
Insurance Company of North America, INA Life Insurance
Company of New York, Life Insurance Company of Georgia),
with respect to RRR's sale of $15 million of guaranteed
senior secured notes due 2007 and $28 million of guaranteed
senior secured notes due 2017. (Exhibit 10.52, 1992 NU Form
10-K, File No. 1-5324)
10.30.1 Note Guaranty dated April 14, 1992 by Northeast
Utilities pursuant to Note Agreement dated April 14,
1992 between RRR and Note Purchasers, for the benefit
of The Connecticut National Bank as Trustee, the
Purchasers and the owners of the notes. (Exhibit
10.52.1, 1992 NU Form 10-K, File No. 1-5324)
10.30.2 Assignment of Leases, Rents and Profits, Security
Agreement and Negative Pledge, dated as of April 14,
1992 among RRR, NUSCO and The Connecticut National
Bank as Trustee, securing notes sold by RRR pursuant
to April 14, 1992 Note Agreement. (Exhibit 10.52.2,
1992 NU Form 10-K, File No. 1-5324)
10.31 Master Trust Agreement dated as of September 2, 1986 between
CL&P and WMECO and Colonial Bank as Trustee, with respect to
reserve funds for Millstone 1 decommissioning costs.
(Exhibit 10.80, 1986 NU Form 10-K, File No. 1-5324)
10.31.1 Notice of Appointment of Mellon Bank, N.A. as
Successor Trustee, dated November 20, 1990, and
Acceptance of Appointment. (Exhibit 10.41.1, 1992 NU
Form 10-K, File No. 1-5324)
<PAGE>E-13
10.32 Master Trust Agreement dated as of September 2, 1986 between
CL&P and WMECO and Colonial Bank as Trustee, with respect to
reserve funds for Millstone 2 decommissioning costs.
(Exhibit 10.81, 1986 NU Form 10-K, File No. 1-5324)
10.32.1 Notice of Appointment of Mellon Bank, N.A. as
Successor Trustee, dated November 20, 1990, and
Acceptance of Appointment. (Exhibit 10.42.1, 1992 NU
Form 10-K, File No. 1-5324)
10.33 Master Trust Agreement dated as of April 23, 1986 between
CL&P and WMECO and Colonial Bank as Trustee, with respect to
reserve funds for Millstone 3 decommissioning costs.
(Exhibit 10.82, 1986 NU Form 10-K, File No. 1-5324)
10.33.1 Notice of Appointment of Mellon Bank, N.A. as
Successor Trustee, dated November 20, 1990, and
Acceptance of Appointment. (Exhibit 10.43.1, 1992 NU
Form 10-K, File No. 1-5324)
10.34 NU Executive Incentive Plan, effective as of January 1,
1991. (Exhibit 10.44, NU 1991 Form 10-K, File No. 1-5324)
10.35 Supplemental Executive Retirement Plan for Officers of NU
System Companies, Amended and Restated effective as of
January 1, 1992. (Exhibit 10.45.1, NU Form 10-Q for the
Quarter Ended June 30, 1992, File No. 1-5324)
* 10.35.1 Amendment 1 to Exhibit 10.35, effective as of August
1, 1993.
* 10.35.2 Amendment 2 to Exhibit 10.35, effective as of January
1, 1994.
10.36 Loan Agreement dated as of December 2, 1991, by and between
NU and Mellon Bank, N.A., as Trustee, with respect to NU's
loan of $175 million to an ESOP Trust. (Exhibit 10.46, NU
1991 Form 10-K, File No. 1-5324)
* 10.36.1 First Amendment to Exhibit 10.36 dated February 7,
1992.
10.36.2 Loan Agreement dated as of March 19, 1992 by and
between NU and Mellon Bank, N.A., as Trustee, with
respect to NU's loan of $75 million to the ESOP Trust.
(Exhibit 10.49.1, 1992 NU Form 10-K, File No. 1-5324)
* 10.36.3 Second Amendment to Exhibit 10.36 dated April 9, 1992.
10.37 Management Succession Agreement. (Exhibit 10.47, NU Form
10-Q for the Quarter Ended June 30, 1992, File No. 1-5324)
10.38 Employment Agreement. (Exhibit 10.48, NU Form 10-Q for the
Quarter Ended June 30, 1992, File No. 1-5324)
13 Annual Report to Security Holders (Each of the Annual Reports is filed
only with the Form 10-K of that respective registrant.)
<PAGE>E-14
* 13.1 Portions of the Annual Report to Security Holders of NU (pages
17 - 54) that have been incorporated by reference into this
Form 10-K.
13.2 Annual Report of CL&P.
13.3 Annual Report of WMECO.
13.4 Annual Report of PSNH.
13.5 Annual Report of NAEC.
21 Subsidiaries of the Registrant (Exhibit 22, 1992 NU Form 10-K, File
1-5324)
<PAGE>E-15
CERTIFICATE RESTATING
CERTIFICATE OF INCORPORATION OF
THE CONNECTICUT LIGHT AND POWER COMPANY
BY ACTION OF THE BOARD OF DIRECTORS
Pursuant to CONN. GEN. STAT. Section 33-362 (1993), the following document
entitled "Restated Certificate of Incorporation of The Connecticut Light and
Power Company", which integrates into one document the certificate of
incorporation of The Connecticut Light and Power Company, restates but does not
change the provisions of the original certificate of incorporation as
supplemented and amended and there is no discrepancy between such provisions and
the provisions of the restated certificate of incorporation.
The Restated Certificate of Incorporation of The Connecticut Light and
Power Company shall be executed by the Company and be filed in accordance with
the provisions of CONN. GEN. STAT. Section 33-285 (1993).
RESTATED CERTIFICATE OF INCORPORATION OF
THE CONNECTICUT LIGHT AND POWER COMPANY
ARTICLE I
NAME OF CORPORATION
The name of this company shall be THE CONNECTICUT LIGHT AND POWER
COMPANY.
ARTICLE II
PRINCIPAL PLACE OF BUSINESS
The principal place of business of the Company shall be located at 107
Selden Street, Berlin, Connecticut.
ARTICLE III
NATURE OF BUSINESS
The nature of the business to be transacted by the Company shall be that
of an electric company and any other business permitted to a corporation
formed under the Stock Corporation Act of the State of Connecticut, as
amended from time to time, and the Company may engage in any lawful act or
activity for which corporations may be formed under the Stock Corporation Act
of the State of Connecticut, as amended from time to time. The Company shall
have all of the powers granted to stock corporations under the Stock
Corporation Act of the State of Connecticut, as amended from time to time.
In addition, the Company shall have all of the powers, rights and franchises
granted to Connecticut public service companies or electric companies
generally, or specially granted to the Company or its predecessor companies,
by the provisions of the General Statutes or Special Acts of Connecticut,
including, without limitation, the powers, rights and franchises, whether of
a public or private nature, and the special rights, privileges and
immunities, to engage in any business and to carry on its business in any
area granted to the Company or its predecessor companies by the provisions of
the Connecticut Special Acts listed in Exhibit A to this Restated Certificate
of Incorporation, and the Company shall continue to be entitled to such
franchises and special rights, privileges and immunities without reciting
such provisions in this Restated Certificate of Incorporation.
ARTICLE IV
CAPITAL STOCK
PART I
AMOUNT AND CLASSES OF AUTHORIZED STOCK
The capital stock of the Company shall consist of three classes designated,
respectively, "Preferred Stock," "Class A Preferred Stock" and "Common Stock."
The authorized number of shares of Preferred Stock is 9,000,000 shares of the
par value of $50 per share. The authorized number of shares of Class A
Preferred Stock is 8,000,000 shares of the par value of $25 per share. The
authorized number of shares of Common Stock is 24,500,000 shares of the par
value of $10 per share.
The Preferred Stock and the Class A Preferred Stock are hereinafter for
convenience of reference sometimes collectively referred to as the "Senior
Stock," and either class may hereinafter individually be referred to as "Senior
Stock." Shares of Preferred Stock and shares of Class A Preferred Stock shall
rank on a parity in respect of dividends or payment in case of liquidation, and,
to the extent not fixed and determined by these Sections or otherwise required
by law, shall have the same rights, preferences and powers.
PART TWO
PROVISIONS WITH RESPECT TO THE CLASSES OF SENIOR STOCK
Shares of the class of Preferred Stock and shares of the class of Class A
Preferred Stock shall be issued in accordance with, and the general terms,
limitations and relative rights and preferences of each share of either said
class shall be as set out in, the following Sections:
SECTION I
ISSUANCE OF SENIOR STOCK
Shares of Preferred Stock may be issued from time to time in one or more
series, in such amounts, on such terms and for such consideration as may be
determined by the Board of Directors. Shares of Class A Preferred Stock may be
issued from time to time in one or more series, in such amounts, on such terms
and for such consideration as may be determined by the Board of Directors. To
the extent not fixed and determined by these Sections, the series designation,
dividend rate, redemption prices, and sinking funds, conversion, participation
and other special rights, if any, of each series of either class of Senior Stock
shall be determined by the Board of Directors at the time of its vote to issue
such class and series.
SECTION II
DIVIDENDS
Section 1. The holders of any series of either class of the Senior Stock
shall receive, when declared by the Board of Directors, preferential dividends
at such rate and payable on such dividend payment dates in each year as said
Board may determine at the time of its vote to issue said class and series, such
dividends to be payable to Senior Stockholders of record on such dates as may
be fixed by said Board, but not more than 45 days before each dividend date,
provided, however, that dividends shall not be declared and set apart for
payment, or paid, on Senior Stock of any one class and series, for any dividend
period, unless dividends have been or are contemporaneously declared and set
apart for payment, or paid, on the Senior Stock of all series for all dividend
periods terminating on the same or an earlier date.
Section 2. Dividends on each share of the Senior Stock shall be cumulative
from the date of issue thereof or from such earlier date as the Board of
Directors may determine at the time of its vote to issue such share.
Section 3. Unless full cumulative dividends to the last preceding dividend
date shall have been paid or set apart for payment on all outstanding shares of
Senior Stock no dividend shall be paid on any junior stock. The term "junior
stock" as used in these Sections means Common Stock and any other stock of the
Company subordinate to the Senior Stock in respect of dividends or payment in
case of liquidation.
Section 4. So long as any shares of Senior Stock are outstanding, the
Company shall not declare any dividends or make any other distributions in
respect of outstanding shares of any junior stock of the Company, other than
dividends or distributions in shares of junior stock, or purchase or otherwise
acquire for value any outstanding shares of junior stock (the declaration of any
such dividend or the making of any such distribution, purchase or acquisition
being herein called a "junior stock payment") in contravention of the following:
(a) If and so long as the junior stock equity (hereinafter defined),
adjusted to reflect the proposed junior stock payment, at the end of the
calendar month immediately preceding the calendar month in which the proposed
junior stock payment is to be made is less than 20% of total capitalization
(hereinafter defined) at that date, the Company shall not make such junior stock
payment in an amount which, together with all other junior stock payments made
within the year ending with and including the date on which the proposed junior
stock payment is to be made, exceeds 50% of the net income of the Company
available for dividends on junior stock for the 12 full calendar months
immediately preceding the calendar month in which such junior stock payment is
made, except in an amount not exceeding the aggregate of junior stock payments
which under the restrictions set forth above in this subsection (a) could have
been, and have not been, made.
(b) If and so long as the junior stock equity, adjusted to reflect
the proposed junior stock payment, at the end of the calendar month immediately
preceding the calendar month in which the proposed junior stock payment is to
be made is less than 25% but not less than 20% of the total capitalization at
that date, the Company shall not make such junior stock payment in an amount
which, together with all other junior stock payments made within the year ending
with and including the date on which the proposed junior stock payment is to be
made, exceeds 75% of the net income of the Company available for dividends on
the junior stock for the 12 full calendar months immediately preceding the
calendar month in which such junior stock payment is made, except in an amount
not exceeding the aggregate of junior stock payments which under the
restrictions set forth above in this subsection (b) could have been, and have
not been, made.
Section 5. The term "junior stock equity" as used in these Sections means
the aggregate of the par value of, or stated capital represented by, the
outstanding shares of junior stock, all earned surplus, capital or paid-in
surplus, and any premiums on the junior stock then carried on the books of the
Company, less:
(a) the excess, if any, of the aggregate amount payable on
involuntary liquidation of the Company upon all outstanding shares of the Senior
Stock over the sum of (i) the aggregate par or stated value of such shares and
(ii) any premiums thereon;
(b) any amounts on the books of the Company known, or estimated if
known, to represent the excess, if any, of recorded value over original cost of
used or useful utility plant; and
(c) any intangible items set forth on the asset side of the balance
sheet of the Company as a result of accounting convention, such as unamortized
debt discount and expense, provided, however, that no deductions shall be
required to be made in respect of items referred to in subsections (b) and (c)
of this Section 5 in cases in which such items are being amortized or are
provided for, or are being provided for, by reserves.
Section 6. The term "total capitalization" as used in these Sections means
the aggregate of:
(a) the principal amount of all outstanding indebtedness of the
Company maturing more than 12 months after the date of issue thereof, and
(b) the par value or stated capital represented by, and any premiums
carried on the books of the Company in respect of, the outstanding shares of all
classes of the capital stock of the Company, earned surplus, and capital or
paid-in surplus, less any amounts required to be deducted pursuant to
subsections (b) and (c) of Section 5 of this Section II in the determination of
junior stock equity.
SECTION III
REDEMPTION OR PURCHASE OF SENIOR STOCK
Section 1. All or any part of any series of the Senior Stock at any time
outstanding may be called by vote of the Board of Directors for redemption at
any time and in the manner hereinbelow provided. If less than all of any series
of the Senior Stock is so called, the Transfer Agent shall determine by lot, or
in some other proper manner approved by the Board of Directors, the shares of
such series of Senior Stock to be called. The redemption prices with respect
to any series of the Senior Stock shall be determined by the Board of Directors
at the time of its vote to issue said series.
Section 2. No call for redemption of less than all of the Senior Stock
outstanding shall be made if the Company shall be in arrears with respect to
payment of dividends on any shares of the Senior Stock outstanding.
Section 3. Subject to the provisions of Section 2 of this Section III, all
or any part of any series of the Senior Stock may be called for redemption
without calling any part or all of any other series of the Senior Stock.
Section 4. The sums payable in respect of any Senior Stock so called shall
be payable at the office of an incorporated bank or trust company in good
standing. Notice of such call, stating the redemption date and the place where
the stock so called is payable shall be mailed not less than 30 days before the
redemption date to each holder of stock so called at his address as it appears
upon the books of the Company.
Section 5. The Company shall, before the redemption date, deposit with
said bank or trust company all sums payable with respect to the Senior Stock so
called. After such mailing and deposit the holders of the Senior Stock so
called for redemption shall cease to have any right to future dividends or other
rights or privileges as stockholders in respect of such stock and shall be
entitled only to the payment on the redemption date of the sums so deposited
with said bank or trust company for their respective accounts. Stock so
redeemed may be reissued but only subject to the limitations imposed by these
Sections upon the issue of Senior Stock.
Section 6. The Company may at any time purchase all or any of the then
outstanding shares of the Senior Stock of any class and series upon the best
terms reasonably obtainable, but not exceeding the then current redemption price
of such shares, except that no such purchase shall be made if the Company shall
be in arrears with respect to payment of dividends on any shares of the Senior
Stock outstanding or if there shall exist an event of default as defined in
Section V hereof.
SECTION IV
AMOUNTS PAYABLE ON LIQUIDATION
The holders of any series of the Senior Stock shall receive upon any
voluntary liquidation, dissolution or winding up of the Company the then current
redemption price of such series and, if such action is involuntary, $50 per
share in the case of the Preferred Stock and $25 per share in the case of the
Class A Preferred Stock, plus in each case all dividends accrued and unpaid to
the date of such payment, before any payment in liquidation is made on any
junior stock. If the net assets of the Company shall be insufficient to pay
said amounts in full, then the entire net assets of the Company shall be
distributed among the holders of the Senior Stock, who shall receive a common
percentage of the full respective preferential amounts.
SECTION V
VOTING POWERS
Section 1. Except as provided in these Sections and as provided by law,
the holders of the Senior Stock shall have no voting power or right to notice
of any meeting.
Section 2. Whenever the holders of the Senior Stock shall have the
right to vote or consent to an action as provided in these Sections or as
provided by law, both classes of Senior Stock shall (except as provided below)
vote together as a single class, each outstanding share of Preferred Stock
entitled to vote and each outstanding share of Class A Preferred Stock entitled
to vote having such voting rights as are proportionate to the ratio of (i) the
par value represented by such share to (ii) the par value represented by all
shares of Senior Stock then outstanding. Whenever only one class of the Senior
Stock shall have the right to vote or consent to an action as provided in these
Sections or as provided by law, or whenever each class of the Senior Stock shall
be entitled or be required to vote as a separate class on a matter, each
outstanding share of such class entitled to vote shall be entitled to one vote
on each such matter.
Section 3. Whenever dividends on any share of the Senior Stock shall be
in arrears in an amount equal to or exceeding full dividends for one year
thereon, or whenever there shall have occurred some default in the observance
of any of the provisions of these Sections, or some default on which action has
been taken by the bondholders or the trustees of any indenture of mortgage or
deed of trust of the Company, or whenever the Company shall have been declared
bankrupt or a receiver of its property shall have been appointed (said
conditions being herein called "events of default"), then the holders of the
Senior Stock shall be given notice of all stockholders' meetings and shall have
the right voting together as a class to elect the smallest number of directors
necessary to constitute a majority of the Board of Directors of the Company and
the exclusive right voting together as a class to amend the By-Laws to make such
appropriate increase in the number of directorships as may be required to effect
such election. When all such arrears of dividends shall have been paid and such
event of default shall have terminated, all the rights and powers of the holders
of the Senior Stock to receive notice and to vote shall cease, subject to being
again revived on any subsequent event of default.
Section 4. Whenever the right to elect directors shall have accrued to the
holders of the Senior Stock, the Company shall call a meeting for the election
of directors and, if necessary, the amendment of the By-Laws to permit the
holders of the Senior Stock to exercise their rights pursuant to Section 3 of
this Section V, such meeting to be held not less than 45 days and not more than
90 days after the accrual of such rights. When such rights shall cease, the
Company shall, within seven days from the delivery to the Company of a written
request therefor by any stockholder, cause a meeting of the stockholders to be
held within 30 days from the delivery of such request for the purpose of
electing a new Board of Directors. Forthwith, upon the election of such new
Board of Directors, the directors in office immediately prior to such election
(other than persons elected directors in such election) shall be deemed removed
from office without further action by the Company.
SECTION VI
ACTION REQUIRING CERTAIN CONSENT OF
SENIOR STOCKHOLDERS
Section 1. Except with the consent of the holders of at least two-thirds
(2/3) of the Senior Stock at the time outstanding, or at least two-thirds (2/3)
of the class of Senior Stock affected if only one such class is affected, given
in writing or by vote at a meeting duly called and held for the purpose, the
Company shall not authorize or issue any class of capital stock having a
priority over the Senior Stock in respect of the payment of dividends or
payments in case of liquidation, dissolution or winding up of the Company or
issue any shares of any such prior ranking stock more than 12 months after the
date of such authorization.
Section 2. Except with the consent of the holders of at least two-thirds
(2/3) of the Senior Stock at the time outstanding, or at least two-thirds (2/3)
of the class of Senior Stock affected if only one such class is affected, given
in writing or by vote at a meeting duly called and held for the purpose, the
Company shall not amend, alter, or repeal any of the rights, preferences or
powers of the holders of the Senior Stock or either class of the Senior Stock
so as to affect adversely any such rights, preferences or powers; provided,
however, that no reduction of the dividend rate, the redemption prices, or the
amount to be paid on liquidation with respect to any share of the Senior Stock
or either class of the Senior Stock may be made without the consent of the
holder thereof and no such reduction with respect to the shares of any
particular series of the Senior Stock shall be made without the consent of all
the holders of shares of such series.
Section 3. So long as any of the Senior Stock is outstanding neither the
authorized total number of shares nor the authorized aggregate of stated value
or par value of the Senior Stock and stock ranking on a parity with the Senior
Stock in respect of the payment of dividends or payments in case of liquidation,
dissolution or winding up of the Company shall be increased beyond 9,000,000
shares of Preferred Stock, 8,000,000 shares of Class A Preferred Stock,
$450,000,000 aggregate of stated value or par value of Preferred Stock and
$200,000,000 aggregate of stated value or par value of Class A Preferred Stock,
unless such increase is approved, at a stockholders' meeting duly called and
held, by the affirmative vote of the holders of at least two-thirds (2/3) of the
Senior Stock, or at least two-thirds (2/3) of the class of Senior Stock affected
if only one such class is affected, represented in person or by proxy at said
meeting or of such larger number of shares as the then applicable statutes of
the State of Connecticut may require for such purpose.
Section 4. Except with the consent of the holders of a majority of the
Senior Stock at the time outstanding, given in writing or by vote at a meeting
duly called and held for the purpose, the Company shall not:
1. Issue or assume any unsecured notes, unsecured debentures or other
securities representing unsecured debt (other than for the purpose of refunding
or renewing outstanding unsecured securities issued or assumed by the Company
resulting in equal or longer maturities or redeeming or otherwise retiring all
outstanding shares of the Senior Stock) if immediately after such issue or
assumption (a) the total outstanding principal amount of all unsecured notes,
unsecured debentures or other securities representing unsecured debt of the
Company will thereby exceed 20% of the aggregate of all outstanding secured debt
of the Company and the capital stock, premiums thereon, and surplus of the
Company, as stated on its books, or (b) the total outstanding principal amount
of all unsecured notes, unsecured debentures or other securities representing
unsecured debt of the Company of maturities of less than 10 years will thereby
exceed 10% of the aggregate of all outstanding secured debt of the Company and
the capital stock, premiums thereon, and surplus of the Company, as stated on
its books. For the purposes of this subsection (1), the payment due upon the
maturity of unsecured debt having an original single stated maturity of 10 years
or more shall not be regarded as unsecured debt with a maturity of less than 10
years until within three years of the maturity thereof, and none of the payments
due upon any unsecured serial debt having an original stated maturity for the
final serial payment of 10 years or more shall be regarded as unsecured debt of
a maturity of less than 10 years until within three years of the maturity of the
final serial payment.
2. Issue, sell or otherwise dispose of any shares of the then
authorized but unissued Senior Stock or any other stock ranking on a parity with
or having a priority over the Senior Stock in respect of dividends or payment
in case of liquidation, or reissue, sell or otherwise dispose of any reacquired
shares of Senior Stock or such other stock, other than to refinance an equal par
value or stated value of Senior Stock or of stock ranking on a parity with the
Senior Stock in respect of dividends or payment in case of liquidation,
(i) if, for a period of 12 consecutive calendar months within
15 calendar months immediately preceding the calendar month in which
any such shares shall be issued, the Income before Interest Charges
of the Company for said period available for the payment of interest,
determined in accordance with the systems of accounts then prescribed
for the Company by the Department of Public Utility Control of the
State of Connecticut (or by such other official body as may then have
authority to prescribe such systems of accounts), but in any event
after deducting taxes including taxes based on income and the amount
charged by the Company on its books to depreciation expense,
(including, in any case in which such stock is to be issued, sold or
otherwise disposed of in connection with the acquisition of any
property, the Income before Interest Charges of the property to be so
acquired, computed as nearly as practicable in the manner specified
above) shall not have been at least one and one-half (1 1/2) times
the sum of (a) the interest charges for one year on all indebtedness
which shall then be outstanding (including any indebtedness proposed
to be created in connection with the issue, sale or other disposition
of such shares, but not including any indebtedness proposed to be
retired in connection with such issue, sale or other disposition or
indebtedness held by or for the account of the Company) and (b) such
rental charges as shall not be deducted in such determination of
Income before Interest Charges and (c) an amount equal to all annual
dividend requirements on all outstanding shares of the Senior Stock
and all other stock, if any, ranking on a parity with or having
priority over the Senior Stock as to dividends or payment in case of
liquidation, including the shares proposed to be issued, but not
including any shares proposed to be retired in connection with such
issue, sale or other disposition; or
(ii) if such issue, sale or disposition would bring the
aggregate of the amount payable in connection with an involuntary
liquidation of the Company with respect to all shares of the Senior
Stock and all shares of stock, if any, ranking on a parity with or
having priority over the Senior Stock as to dividends or payment in
case of liquidation to an amount in excess of the sum of the junior
stock equity. If for the purposes of meeting the requirements of
this clause (ii), it shall have been necessary to take into
consideration any earned surplus of the Company, the Company shall
not thereafter pay any dividends on or make any distributions in
respect of, or make any payment for the purchase or other acquisition
of junior stock which would result in reducing the junior stock
equity to an amount less than the amount payable on involuntary
liquidation of the Company with respect to the Senior Stock and all
shares ranking on a parity with or having a priority over the Senior
Stock in respect of dividends or payment in case of liquidation at
the time outstanding.
If during the period for which Income before Interest Charges is to be
determined for the purpose set forth in this subsection (2), the amount, if any,
required to be expended by the Company during such period for property additions
pursuant to a renewal and replacement fund or similar fund established under any
indenture of mortgage or deed of trust of the Company shall exceed the amount
deducted during such period in the determination of such Income before Interest
Charges on account of depreciation and amortization of electric and gas plant
acquisition adjustments, such excess shall also be deducted in determining such
Income before Interest Charges.
If, pursuant to this Section 4, holders of one-third (1/3) of the aggregate
voting rights represented by the shares of the Senior Stock then outstanding
dissent in writing from or vote against any proposed action, action shall not
be taken unless subsequently authorized in compliance with all provisions of
this Section 4, including this sentence.
Section 5. No share of Senior Stock shall be deemed to be "outstanding"
within the meaning of this Section VI or of Section VII if, at or prior to the
time when the consent or approval herein or therein referred to would otherwise
be required, provision shall be made for its redemption, including a deposit
complying with the requirements of Section 5 of Section III.
SECTION VII
MERGER, CONSOLIDATION OR SALE OF ALL ASSETS
Except with the consent of the holders of a majority of the Senior Stock
at the time outstanding, given in writing or by vote at a meeting duly called
and held for the purpose, the Company shall not merge or consolidate with or
into any other corporation or sell or otherwise dispose of all or substantially
all of its assets (except by mortgage or pledge) unless such merger,
consolidation, sale or other disposition, or the issuance or assumption of
securities in the effectuation thereof shall have been ordered, approved or
permitted under the Public Utility Holding Company Act of 1935.
SECTION VIII
NO PREEMPTIVE RIGHT
The holders of the Senior Stock shall have no preemptive right to subscribe
to any future issue of additional shares of the Senior Stock or of any other
preferred stock or any other class of stock now or hereafter authorized, nor for
any future issue of bonds, notes or other evidence of indebtedness convertible
into stock.
SECTION IX
IMMUNITY OF DIRECTORS
OFFICERS AND AGENTS
No director, officer or agent of the Company shall be held personally
responsible for any action taken in good faith though subsequently adjudged to
be in violation of these Sections.
SECTION X
TRANSFER AGENT
The Company shall always have at least one Transfer Agent for the Senior
Stock, which shall be an incorporated bank or trust company of good standing.
PART THREE
PROVISIONS WITH RESPECT TO THE SERIES OF PREFERRED STOCK
SECTION I
There shall be a series of Preferred Stock designated "$2.00 Preferred
Stock" and consisting of 336,088 shares with an aggregate par value of
$16,804,000 and a par value per share of $50.00. The dividend rate, redemption
prices and amounts payable on liquidation, dissolution or winding up of the
Company as to said $2.00 Preferred Stock shall be as follows:
(a) Dividends on said $2.00 Preferred Stock shall be at the rate of
$2.00 per share per annum, and no more, and shall be cumulative from May
1, 1947. Said dividends, when declared, shall be payable on the first
days of February, May, August and November in each year.
(b) Redemption Prices of said $2.00 Preferred Stock shall be $55.50
per share if redeemed on or before May 1, 1952, $54.50 per share if
redeemed after May 1, 1952 and on or before May 1, 1957, and $54.00 per
share if redeemed after May 1, 1957, plus in all cases that portion of the
quarterly dividend accrued thereon to the redemption date and all unpaid
dividends thereon, if any.
(c) Amounts Payable on Liquidation to each holder of said $2.00
Preferred Stock upon any voluntary liquidation, dissolution or winding up
of the Company shall be the then current redemption price thereof and, if
such action is involuntary, $50.00 per share, plus in each case all
dividends accrued and unpaid to date of such payment.
SECTION II
There shall be a series of Preferred Stock designated "$1.90 Preferred
Stock" and consisting of 163,912 shares with an aggregate par value of
$8,195,600 and a par value per share of $50.00. The dividend rate, redemption
prices and amounts payable on liquidation, dissolution or winding up of the
Company as to said $1.90 Preferred Stock shall be as follows:
(a) Dividends on said $1.90 Preferred Stock shall be at the rate of
$1.90 per share per annum, and no more, and shall be cumulative from May
1, 1947. Said dividends, when declared, shall be payable on the first
days of February, May, August and November in each year.
(b) Redemption Prices of said $1.90 Preferred Stock shall be $54.00
per share if redeemed on or before May 1, 1952, $53.00 per share if
redeemed after May 1, 1952 and on or before May 1, 1957, and $52.50 per
share if redeemed after May 1, 1957, plus in all cases that portion of the
quarterly dividend accrued thereon to the redemption date and all unpaid
dividends thereon, if any.
(c) Amounts Payable on Liquidation to each holder of said $1.90
Preferred Stock upon any voluntary liquidation, dissolution or winding up
of the Company shall be the then current redemption price thereof and, if
such action is involuntary, $50.00 per share, plus in each case all
dividends accrued and unpaid to date of such payment.
SECTION III
There shall be a series of Preferred Stock designated "$2.20 Preferred
Stock" and consisting of 200,000 shares with an aggregate par value of
$10,000,000 and a par value per share of $50.00. The dividend rate, redemption
prices and amounts payable on liquidation, dissolution or winding up of the
Company as to said $2.20 Preferred Stock shall be as follows:
(a) Dividends on said $2.20 Preferred Stock, shall be at the rate of
$2.20 per share per annum, and no more, and shall be cumulative from May
1, 1949. Said dividends, when declared, shall be payable on the first
days of February, May, August and November in each year.
(b) Redemption Prices of said $2.20 Preferred Stock shall be $54.00
per share if redeemed on or before May 1, 1954, $53.00 per share if
redeemed after May 1, 1954 and on or before May 1, 1959, and $52.50 per
share if redeemed after May 1, 1959, plus in all cases that portion of the
quarterly dividend accrued thereon to the redemption date and all unpaid
dividends thereon, if any.
(c) Amounts Payable on Liquidation to each holder of said $2.20
Preferred Stock upon any voluntary liquidation, dissolution or winding up
of the Company shall be the then current redemption price thereof and, if
such action is involuntary, $50.00 per share, plus in each case all
dividends accrued and unpaid to date of such payment.
SECTION IV
There shall be a series of Preferred Stock designated "$2.04 Preferred
Stock" and consisting of 100,000 shares with an aggregate par value of
$5,000,000 and a par value per share of $50.00. The dividend rate, redemption
prices and amounts payable on liquidation, dissolution or winding up of the
Company as to said $2.04 Preferred Stock shall be as follows:
(a) Dividends on said $2.04 Preferred Stock shall be at the rate of
$2.04 per share per annum, and no more, and shall be cumulative from
November 1, 1949. Said dividends, when declared, shall be payable on the
first days of February, May, August and November in each year.
(b) Redemption Prices of said $2.04 Preferred Stock shall be $54.50
per share if redeemed on or before November 1, 1954, $52.50 per share if
redeemed after November 1, 1954 and on or before November 1, 1959, and
$52.00 per share if redeemed after November 1, 1959, plus in all cases
that portion of the quarterly dividend accrued thereon to the redemption
date and all unpaid dividends thereon, if any.
(c) Amounts Payable on Liquidation to each holder of said $2.04
Preferred Stock upon any voluntary liquidation, dissolution or winding up
of the Company shall be the then current redemption price thereof and, if
such action is involuntary, $50.00 per share, plus in each case all
dividends accrued and unpaid to date of such payment.
SECTION V
There shall be a series of Preferred Stock designated "$2.06 Preferred
Stock-Series E" and consisting of 200,000 shares with an aggregate par value of
$10,000,000 and a par value per share of $50.00. The dividend rate redemption
prices and amounts payable on liquidation, dissolution or winding up of the
Company as to said $2.06 Preferred Stock-Series E shall be as follows:
(a) Dividends on said $2.06 Preferred Stock-Series E shall be the
rate of $2.06 per share per annum, and no more, and shall be cumulative
from May 1, 1954. Said dividends, when declared, shall be payable on the
first days of February, May, August and November in each year.
(b) Redemption Prices of said $2.06 Preferred Stock-Series E shall
be $52.00 per share if redeemed on or before May 1, 1959, $51.50 per share
if redeemed after May 1, 1959 and on or before May 1, 1964, and $51.00 per
share if redeemed after May 1, 1964, plus in all cases that portion of the
quarterly dividend accrued thereon to the redemption date and all unpaid
dividends thereon, if any.
(c) Amounts Payable on Liquidation to each holder of said $2.06
Preferred Stock-Series E upon any voluntary liquidation, dissolution or
winding up of the Company shall be the then current redemption price
thereof and, if such action is involuntary, $50.00 per share, plus in each
case all dividends accrued and unpaid to date of such payment.
SECTION VI
There shall be a series of Preferred Stock designated "$2.09 Preferred
Stock-Series F" and consisting of 100,000 shares with an aggregate par value of
$5,000,000 and a par value per share of $50.00. The dividend rate, redemption
prices and amounts payable on liquidation, dissolution or winding up of the
Company as to said $2.09 Preferred Stock-Series F shall be as follows:
(a) Dividends on said $2.09 Preferred Stock-Series F shall be at the
rate of $2.09 per share per annum, and no more, and shall be cumulative
from November 1, 1955. Said dividends, when declared, shall be payable on
the first days of February, May, August and November in each year.
(b) Redemption Prices of said $2.09 Preferred Stock-Series F shall
be $52.00 per share if redeemed on or before November 1, 1960, $51.50 per
share if redeemed after November 1, 1960 and on or before November 1,
1965, and $51.00 per share if redeemed after November 1, 1965, plus in all
cases that portion of the quarterly dividend accrued thereon to the
redemption date and all unpaid dividends thereon, if any.
(c) Amounts Payable on Liquidation to each holder of said $2.09
Preferred Stock-Series F upon any voluntary liquidation, dissolution or
winding up of the Company shall be the then current redemption price
thereof and, if such action is involuntary, $50.00 per share, plus in each
case all dividends accrued and unpaid to date of such payment.
SECTION VII
There shall be a series of Preferred Stock designated "$3.24 Preferred
Stock-Series G" and consisting of 300,000 shares with an aggregate par value of
$15,000,000 and a par value per share of $50.00. The dividend rate and
redemption prices of said $3.24 Preferred Stock-Series G shall be as follows:
(a) Dividends on said $3.24 Preferred Stock-Series G shall be at the
rate of $3.24 per share per annum, and no more, and shall be cumulative
from January 1, 1968. Said dividends, when declared, shall be payable on
the first days of January, April, July and October in each year.
(b) Redemption Prices of said $3.24 Preferred Stock-Series G shall
be $54.27 per share if redeemed on or before January 1, 1973, $53.46 per
share if redeemed after January 1, 1973 and on or before January 1, 1978,
$52.65 per share if redeemed after January 1, 1978 and on or before
January 1, 1983 and $51.84 per share if redeemed after January 1, 1983,
plus in all cases that portion of the quarterly dividend accrued thereon
to the redemption date and all unpaid dividends thereon, if any.
SECTION VIII
There shall be a series of Preferred Stock designated "3.90% Preferred
Stock" and consisting of 160,000 shares with an aggregate par value of
$8,000,000 and a par value per share of $50.00. The dividend rate and
redemption prices of said series of Preferred Stock shall be as follows:
(a) Dividends on said 3.90% Preferred Stock shall be at the rate of
3.90% per share per annum and no more, and shall be cumulative from
September 1, 1949. Said dividends, when declared, shall be payable on the
first days of March, June, September and December in each year.
(b) Redemption Prices of said 3.90% Preferred Stock shall be $50.50
per share, plus that portion of the quarterly dividend accrued thereon up
to the redemption date and all unpaid dividends thereon, if any.
SECTION IX
There shall be a series of Preferred Stock designated "4.50% Preferred
Stock" and consisting of 104,000 shares with an aggregate par value of
$5,200,000 and a par value per share of $50.00. The dividend rate and
redemption prices of said series of Preferred Stock shall be as follows:
(a) Dividends on said 4.50% Preferred Stock shall be at the rate of
4.50% per share per annum and no more and shall be cumulative from
November 1, 1957. Said dividends, when declared, shall be payable on the
first days of February, May, August and November in each year.
(b) Redemption Prices of said 4.50% Preferred Stock shall be $50.75
per share, plus that portion of the quarterly dividend accrued thereon up
to the redemption date and all unpaid dividends thereon, if any.
SECTION X
There shall be a series of Preferred Stock designated "4.96% Preferred
Stock" and consisting of 100,000 shares with an aggregate par value of
$5,000,000 and a par value per share of $50.00. The dividend rate and
redemption prices of said series of Preferred Stock shall be as follows:
(a) Dividends on said 4.96% Preferred Stock shall be at the rate of
4.96% per share per annum and no more, and shall be cumulative from
November 6, 1958. Said dividends, when declared, shall be payable on the
first days of February, May, August and November in each year.
(b) Redemption Prices of said 4.96% Preferred Stock shall be $50.50
per share, plus that portion of the quarterly dividend accrued thereon up
to the redemption date and all unpaid dividends thereon, if any.
SECTION XI
There shall be a series of Preferred Stock designated "4.50% Preferred
Stock, 1963 Series" and consisting of 160,000 shares with an aggregate par value
of $8,000,000 and a par value per share of $50.00. The dividend rate and
redemption prices of said series of Preferred Stock shall be as follows:
(a) Dividends on said 4.50% Preferred Stock, 1963 Series, shall be
at the rate of 4.50% of the par value per share per annum and no more, and
shall be cumulative from the date of issue thereof. Said dividends, when
declared, shall be payable on the first days of March, June, September and
December in each year.
(b) Redemption prices of said 4.50% Preferred Stock, 1963 Series,
shall be $50.50 per share, plus that portion of the quarterly dividend
accrued thereon up to the redemption date and all unpaid dividends
thereon, if any.
SECTION XII
There shall be a series of Preferred Stock designated "5.28% Preferred
Stock, 1967 Series" and consisting of 200,000 shares with an aggregate par value
of $10,000,000 and a par value per share of $50.00. The dividend rate and
redemption prices of said series of Preferred Stock shall be as follows:
(a) Dividends on said 5.28% Preferred Stock, 1967 Series, shall be
at the rate of 5.28% of the par value per share per annum and no more, and
shall be cumulative from April 1, 1967. Said dividends, when declared,
shall be payable on the first days of January, April, July and October in
each year.
(b) Redemption Prices of said 5.28% Preferred Stock, 1967 Series
shall be $52.09 per share if redeemed on or before April 1, 1982, and
$51.43 per share if redeemed after April 1, 1982, plus in all cases that
portion of the quarterly dividend accrued thereon up to the redemption
date and all unpaid dividends thereon, if any.
SECTION XIII
There shall be a series of Preferred Stock designated "6.56% Preferred
Stock, 1968 Series" and consisting of 200,000 shares with an aggregate par value
of $10,000,000 and a par value per share of $50.00. The dividend rate and
redemption prices of said Preferred Stock shall be as follows:
(a) Dividends of said 6.56% Preferred Stock, 1968 Series, shall be
at the rate of 6.56% of the par value per share per annum and no more, and
shall be cumulative from February 1, 1968. Said dividends, when declared,
shall be payable on the first days of February, May, August and November
in each year.
(b) Redemption Prices of said 6.56% Preferred Stock, 1968 Series,
shall be $52.26 per share if redeemed on or before February 1, 1983, and
$51.44 per share if redeemed after February 1, 1983, plus in all cases
that portion of the quarterly dividend accrued thereon up to the
redemption date and all unpaid dividends thereon, if any.
SECTION XIV
There shall be a series of Preferred Stock designated 7.23% Preferred
Stock, 1992 Series, and consisting of 1,500,000 shares with an aggregate par
value of $75,000,000 and a par value per share of $50. The dividend rate and
redemption prices as to said 7.23% Preferred Stock, 1992 Series, shall be as
follows:
(a) Dividends on said 7.23% Preferred Stock, 1992 Series, shall be
at the rate of 7.23% per annum per share, and no more, and shall be
cumulative from the date of issuance. Said dividends, when declared,
shall be payable on the first day of March, June, September, and December
in each year, commencing December 1, 1992.
(b) The redemption prices of the 7.23% Preferred Stock, 1992 Series,
shall be as follows:
(i) if redeemed through operation of the sinking fund
hereinafter provided, or upon any voluntary liquidation, dissolution
or winding up of the Company before September 1, 1997, at the price
of $50.00 per share,
(ii) if redeemed otherwise than through operation of the sinking
fund, for each of the twelve-month periods commencing September 1,
1997, the redemption prices of said 7.23% Preferred Stock, 1992
Series, shall be the amount per share set forth below:
Twelve Twelve
Months Redemption Months Redemption
Beginning Price Beginning Price
September 1 Per Share September 1 Per Share
----------- ---------- ----------- ----------
1997 $52.41 2007 $50.00
1998 52.17 2008 50.00
1999 51.93 2009 50.00
2000 51.69 2010 50.00
2001 51.45 2011 50.00
2002 51.21 2012 50.00
2003 50.97 2013 50.00
2004 50.73 2014 50.00
2005 50.49 2015 50.00
2006 50.25 2016 50.00
plus in all cases that portion of the quarterly dividend accrued
thereon to the redemption date and all unpaid dividends thereon, if
any, provided, however, that none of the 7.23% Preferred Stock, 1992
Series, shall be redeemed prior to September 1, 1997.
(c) As and for a sinking fund for said 7.23% Preferred Stock, 1992
Series, commencing on September 1, 1998, and on each September 1 in each
year thereafter so long as any shares of the 7.23% Preferred Stock, 1992
Series, remain outstanding, the Company shall, to the extent of any funds
of the Company legally available therefor and except as otherwise
restricted by the Company's Amended and Restated Provisions with Respect
to Capital Stock, redeem 75,000 shares of 7.23% Preferred Stock, 1992
Series (or such lesser number of such shares as remain outstanding) at the
sinking fund redemption price, plus accrued dividends to the date of
redemption; provided, however, that if in any year the Company does not
redeem the full number of shares of 7.23% Preferred Stock, 1992 Series,
required to be redeemed pursuant to this sinking fund, the deficiency
shall be made good on the next succeeding September 1 on which the
Company has funds legally available for, and is otherwise permitted to
effect, the redemption of shares of 7.23% Preferred Stock, 1992 Series,
pursuant to this sinking fund. At the option of the Company, the number
of shares purchased and canceled by the Company during the preceding
twelve-month period or redeemed during such period pursuant to clause
(ii) of subsection (b) hereof. Any shares so redeemed or purchased and
canceled may be given the status of authorized but unissued shares of
Senior Stock, but none of such shares shall be reissued as shares of 7.23%
Preferred Stock, 1992 Series. The Company shall have the option, which
shall be noncumulative, to redeem on September 1, 1998 and on each
September 1 thereafter up to an additional 75,000 shares of 7.23%
Preferred Stock, 1992 Series, at the sinking fund redemption price, plus
accrued dividends to the date of redemption. No such optional sinking
fund shall operate to reduce the number of shares of the 7.23% Preferred
Stock, 1992 Series, required to be redeemed pursuant to the mandatory
sinking fund provisions hereinabove set forth. If the Company shall at
any time fail to make a full mandatory sinking fund payment on any sinking
fund payment date, the Company shall not pay any dividends or make any
other distributions in respect of outstanding shares of any junior stock
(as that term is defined in Section II, Section 3 of Part Two hereof) of
the Company, other than dividends or distributions in shares of junior
stock, or purchase or otherwise acquire for value any outstanding shares
of junior stock, until all such payments have been made.
SECTION XV
There shall be a series of Preferred Stock designated 5.30% Preferred
Stock, 1993 Series, and consisting of 1,600,000 shares with an aggregate par
value of $80,000,000 and a par value per share of $50. The dividend rate and
redemption prices as to said 5.30% Preferred Stock, 1993 Series, shall be as
follows:
(a) Dividends on said 5.30% Preferred Stock, 1993 Series, shall be
at the rate of 5.30% per annum per share, and no more, and shall be
cumulative from the date of issuance. Said dividends, when declared,
shall be payable on the first day of January, April, July and October in
each year, commencing January, 1994.
(b) The redemption prices of the 5.30% Preferred Stock, 1993 Series,
shall be as follows:
(i) if redeemed through operation of the sinking fund
hereinafter provided, or upon any voluntary liquidation, dissolution
or winding up of the Company before October 1, 1998, at the price of
$50 per share,
(ii) if redeemed otherwise than through operation of the sinking
fund, for each of the twelve-month periods commencing October 1,
1998, the redemption prices of said 5.30% Preferred Stock, 1993
Series, shall be the amount per share set forth below:
Twelve
Months Redemption
Beginning Price
October 1 Per Share
--------- ----------
1998 $51.00
1999 50.67
2000 50.34
2001 50.00
2002 50.00
plus in all cases that portion of the quarterly dividend accrued
thereon to the redemption date and all unpaid dividends thereon, if
any, provided, however, that none of the 5.30% Preferred Stock, 1993
Series, shall be redeemed prior to October 1, 1998. The notice of
redemption required by Part II, Section III, Section 4 hereof may
state that it is subject to the receipt of redemption moneys by the
paying agent before the date fixed for redemption and that such
notice shall be of no effect unless such moneys are so received
before such date.
(c) As and for a sinking fund for said 5.30% Preferred Stock, 1993
Series, commencing on October 1, 1999, and on each October 1 in each year
thereafter so long as any shares of the 5.30% Preferred Stock, 1993
Series, remain outstanding, the Company shall, to the extent of any funds
of the Company legally available therefor and except as otherwise
restricted by the Company's Amended and Restated Provisions with Respect
to Capital Stock, redeem 320,000 shares of 5.30% Preferred Stock, 1993
Series (or such lesser number of such shares as remain outstanding) at the
sinking fund redemption price, plus accrued dividends to the date of
redemption; provided, however, that if in any year the Company does not
redeem the full number of shares of 5.30% Preferred Stock, 1993 Series,
required to be redeemed pursuant to this sinking fund, the deficiency
shall be made good on the next succeeding October 1 on which the Company
has funds legally available for, and is otherwise permitted to effect, the
redemption of shares of 5.30% Preferred Stock, 1993 Series, pursuant to
this sinking fund. At the option of the Company, the number of shares of
5.30% Preferred Stock, 1993 Series, redeemed on any October 1 may be
reduced by the number of such shares purchased and canceled by the Company
during the preceding twelve-month period or redeemed during such period
pursuant to clause (ii) of subsection (b) hereof. Any shares so redeemed
or purchased and canceled may be given the status of authorized but
unissued shares of Senior Stock, but none of such shares shall be reissued
as shares of 5.30% Preferred Stock, 1993 Series. The Company shall have
the option, which shall be noncumulative, to redeem on October 1, 1999
and on each October 1 thereafter up to an additional 320,000 shares of
5.30% Preferred Stock, 1993 Series, at the sinking fund redemption price,
plus accrued dividends to the date of redemption. No such optional
sinking fund shall operate to reduce the number of shares of the 5.30%
Preferred Stock, 1993 Series, required to be redeemed pursuant to the
mandatory sinking fund provisions hereinabove set forth. If the Company
shall at any time fail to make a full mandatory sinking fund payment on
any sinking fund payment date, the Company shall not pay any dividends or
make any other distributions in respect of outstanding shares of any
junior stock (as that term is defined in Section II, Section 3 of
Part Two hereof) of the Company, other than dividends or distributions in
shares of junior stock, or purchase or otherwise acquire for value any
outstanding shares of junior stock, until all such payments have been
made.
PART FOUR
PROVISIONS WITH RESPECT TO THE
SERIES OF CLASS A PREFERRED STOCK
SECTION I
There shall be a series of Class A Preferred Stock designated "Dutch
Auction Rate Transferable Securities Class A Preferred Stock, 1989 Series" (the
"1989 DARTS") consisting of 2,000,000 shares with an aggregate par value of
$50,000,000 and a par value per share of $25. The provisions governing the
issue and sale of the 1989 DARTS in Units, certification, dividend rights,
redemption, reacquisition, auction procedures, and other preferences,
qualifications and special or relative rights or privileges with respect to the
1989 DARTS shall be as follows:
(1) Units
The 1989 DARTS shall be issued and sold by the Company only in units of
4,000 shares per unit ("Units"). No partial Units shall be issued and sold by
the Company, and no fractional shares of the 1989 DARTS shall be issued and
sold, no transfer of the 1989 DARTS in less than whole Units shall be made, nor
shall any transfer in less than whole Units be registered on the transfer books
of the Company or be effective for any purpose.
(2) Certification
Except as otherwise provided by law, all outstanding 1989 DARTS shall be
represented by a certificate or certificates registered in the name of a nominee
of the Securities Depository (as defined in Section 6(a)(xxi) below), and no
person acquiring Units shall be entitled to receive a certificate representing
the 1989 DARTS. The nominee of the Securities Depository shall be the sole
holder of record of the 1989 DARTS. Each purchaser of Units will receive
dividends, distributions and notices according to the procedures of the
Securities Depository and, if such purchaser is not a member of the Securities
Depository, of such purchaser's Agent Member (as defined in Section (6)(a)(ii)
below).
(3) Dividend Rights
(a) Dividends on the 1989 DARTS shall be paid, when, as and if declared
by the Board of Directors of the Company out of funds legally available
therefor, at the rate per annum determined as set forth below in subsection (c)
of this Section (3) and no more (the "Applicable Rate"), payable on the
respective dates set forth below.
(b) Dividends on the 1989 DARTS shall accrue from the date of original
issuance and shall be payable commencing on March 15, 1989, and on each
succeeding seventh Wednesday thereafter, except that if any of such Wednesday,
the Tuesday preceding such Wednesday, or the Thursday following such Wednesday
is not a Business Day (as defined below), then (i) the dividend payment date
shall be the first Business Day after such Wednesday that is immediately
followed by a Business Day and is preceded by a Business Day that is the
preceding Tuesday or a day after such Tuesday, or (ii) if the Securities
Depository shall make available to its participants and members, in funds
immediately available in New York City on dividend payment dates, the amount due
as dividends on such dividend payment dates (and the Securities Depository shall
have so advised the Trust Company (as defined in Section (6)(a)(xxx) below)),
then the dividend payment date shall be the first Business Day on or after such
Wednesday that is preceded by a Business Day that is the preceding Tuesday or
a day after such Tuesday. "Business Day" means a day on which the New York
Stock Exchange is open for trading and which is not a day on which banks in New
York City are authorized by law to close. Each dividend payment date determined
as provided above is referred to herein as the "Dividend Payment Date."
Although any particular Dividend Payment Date may not occur on the originally
scheduled Wednesday because of the exceptions discussed above, the next
succeeding Dividend Payment Date shall be, subject to such exceptions, the
seventh Wednesday following the originally designated Wednesday Dividend Payment
Date for the prior Dividend Period. As used herein, Dividend Period means the
period commencing on a Dividend Payment Date for the 1989 DARTS and ending on
the day next preceding the next Dividend Payment Date. Notwithstanding the
foregoing, in the event of a change in law altering the minimum holding period
(currently found in Section 246(c) of the Internal Revenue Code of 1986, as
amended (the "Code")) required for taxpayers to be entitled to the dividends
received deduction on preferred stock held by non-affiliated corporations
(currently found in Section 243(a) of the Code), the Company shall adjust the
period of time between Dividend Payment Dates so as to adjust uniformly the
number of days (such number of days without giving effect to the exceptions
referred to above being hereinafter referred to as "Dividend Period Days") in
Dividend Periods commencing after the date of such change in law to equal or
exceed the then current minimum holding period; provided that the number of
Dividend Period Days shall not exceed by more than nine days the length of such
then current minimum holding period and shall be evenly divisible by seven, and
the maximum number of Dividend Period Days in no event shall exceed 98 days.
Upon any such change in the number of Dividend Period Days as a result of a
change in law, the Company shall give notice of such change to all Existing
Holders of Units.
(c) The dividend rate on shares of the 1989 DARTS during the initial
dividend period (the "Initial Dividend Period"), from and after the date of
original issuance to March 15, 1989 (the "Initial Dividend Payment Date") shall
be 7.60 percent per annum. Commencing on the Initial Dividend Payment Date, the
dividend rate on shares of the 1989 DARTS for each subsequent Dividend Period
(normally a period of 49 days, subject to certain exceptions as set forth above)
shall be at a rate per annum that results from the implementation of the Auction
procedures set forth in Section (6) below.
The amount of dividends per Unit for the 1989 DARTS payable for each
Dividend Period shall be computed by multiplying the dividend rate for such
series for each Dividend Period determined in accordance with subsection (c)
above by a fraction the numerator of which shall be the number of days in such
Dividend Period (calculated by counting the first day thereof but excluding the
last day thereof) such Unit was outstanding and the denominator of which shall
be 360, and multiplying the amount so obtained by $100,000 per Unit.
(d) Prior to each Dividend Payment Date, the Company shall pay to the
Trust Company sufficient funds for the payment of declared dividends.
(e) For the purpose of determining whether and when holders of the Senior
Stock are entitled to the rights to elect certain directors of the Company,
described under Part Two, Section V, Section 3 of the Capital Stock Provisions
of this Certificate of Incorporation, dividends on the 1989 DARTS shall be
deemed to be in arrears "in an amount equal to or exceeding four quarterly
dividend payments," if, at the time dividends are in arrears for four quarterly
dividend payments for Senior Stock having quarterly dividend payments, dividends
on the 1989 DARTS are in arrears for each Dividend Period beginning on or after
the first day of the first of the four quarterly dividend periods as to which
dividends on the Senior Stock having quarterly dividends are in arrears.
(4) Redemption Provisions
(a) At the option of the Company, the Units may be redeemed out of funds
legally available therefor in whole or from time to time in part on any Dividend
Payment Date at a redemption price of $25 per share of the 1989 DARTS ($100,000
per Unit) plus accrued and unpaid dividends (whether or not earned or declared)
to the redemption date. Only whole Units may be redeemed. See Section (5)
below for restrictions on the reissue of Units after redemption.
(b) In accordance with Part Two, Section III, Section 4 of the Capital
Stock Provisions of this Certificate of Incorporation, notice of redemption
shall be mailed to each record holder of Units and to the Trust Company not less
than 30 days prior to the date fixed for redemption thereof. Each notice of
redemption shall include a statement setting forth: (i) the redemption date,
(ii) the number of Units to be redeemed, (iii) the redemption price, (iv) the
place or places where Units are to be surrendered for payment of the redemption
price, and (v) that dividends of the Units to be redeemed will cease to accrue
on such redemption date. No defect in the notice of redemption or in the
mailing thereof shall affect the validity of the redemption proceedings, except
as required by applicable law.
(c) If less than all of the outstanding Units are to be redeemed, the
number of Units to be redeemed shall be determined by the Company and
communicated to the Trust Company. In accordance with Part Two, Section III,
Section 1 of the Capital Stock Provisions of this Certificate of Incorporation,
the Trust Company shall give notice to the Securities Depository and the
Securities Depository will determine by lot under its usual operating procedures
the number of Units, if any, to be redeemed from the account of the Agent Member
of each Existing Holder. An Agent Member may determine to redeem Units from
some Existing Holders without redeeming Units from the accounts of other
Existing Holders.
(5) Reacquisition
Except in an Auction (as defined in Section (6)(a)(iii) below), the Company
shall have the right, in accordance with Part Two, Section III, Section 6 of the
Capital Stock Provisions of this Certificate of Incorporation and where
permitted by applicable law, to purchase or otherwise acquire Units upon the
best terms reasonably obtainable, but not exceeding the then current redemption
price of such Units, except that no such purchase shall be made if the Company
shall be in arrears in respect to payment of dividends on any shares of Senior
Stock outstanding or if there shall exist an event of default as defined in Part
Two, Section V, Section 3 of the Capital Stock Provisions of this Certificate
of Incorporation. Notwithstanding the provisions of Part Two, Section III,
Section 5 of the Capital Stock Provisions of this Certificate of Incorporation,
Units that have been redeemed, purchased or otherwise acquired by the Company
shall not be reissued as 1989 DARTS and shall either be restored to authorized
but unissued shares of the Company's Class A Preferred Stock or canceled at the
Company's option.
(6) Auction Procedures
(a) Certain Definitions. As used in these provisions establishing and
designating the 1989 DARTS the following terms shall have the following
meanings, unless the context otherwise requires:
(i) "Affiliate" shall mean any Person known to the Trust Company to
be controlled by, in control of, or under common control with the Company.
(ii) "Agent Member" shall mean the member of the Securities Depository
that will act on behalf of a Bidder and is identified as such in such Bidder's
Purchaser's Letter.
(iii) "Auction" shall mean the periodic operation of the
procedures set forth herein.
(iv) "Auction Date" shall mean the Business Day next preceding the
Dividend Payment Date for the prior Dividend Period.
(v) "Available Units" shall have the meaning specified in paragraph
(d)(i)(A) below.
(vi) "Bid" shall have the meaning specified in paragraph (b)(i) below.
(vii) "Bidder" shall have the meaning specified in paragraph
(b)(i) below.
(viii) "Board of Directors" shall mean the Board of Directors of the
Company.
(ix) "Broker-Dealer" shall mean any broker-dealer, or other entity
permitted by law to perform the functions required of a Broker-Dealer herein,
that has been selected by the Company and has entered into a Broker-Dealer
Agreement with the Trust Company that remains effective.
(x) "Broker-Dealer Agreement" shall mean an agreement between the
Trust Company and a Broker-Dealer pursuant to which such Broker-Dealer agrees
to follow the procedures specified herein.
(xi) "DARTS" or "1989 DARTS" shall mean the 2,000,000 shares of Dutch
Auction Rate Transferable Securities Class A Preferred Stock, 1989 Series, $25
par value, of the Company.
(xii) "Existing Holder," when used with respect to Units, shall
mean a Person who has signed a Purchaser's Letter and is listed as the
beneficial owner of such Units in the records of the Trust Company.
(xiii) "Hold Order" shall have the meaning specified in paragraph
(b)(i) below.
(xiv) "Maximum Applicable Rate," on any Auction Date, shall mean
the percentage of the 60-day "AA" Composite Commercial Paper Rate (as defined
below) in effect on such Auction Date, determined as set forth below based on
the prevailing rating of the DARTS in effect at the close of business on the day
preceding such Auction Date:
Prevailing Rating Percentage
----------------- ----------
AA/aa or Above..................... 110%
A/a................................ 125%
BBB/baa............................ 150%
Below BBB/baa...................... 200%
For purposes of this definition, the "prevailing rating" of the DARTS shall
be (i) AA/aa or Above, if the DARTS have a rating of AA- or better by Standard
& Poor's Corporation or its successor ("S&P") and aa3 or better by Moody's
Investors Service, Inc. or its successor ("Moody's"), or the equivalent of both
of such ratings by such agencies or a substitute rating agency or substitute
rating agencies selected as provided below, (ii) if not AA/aa or Above, then
A/a, if the DARTS have a rating of A- or better by S&P and a3 or better by
Moody's or the equivalent of both of such ratings by such agencies or a
substitute rating agency or substitute rating agencies selected as provided
below, (iii) if not AA/aa or Above or A/a, then BBB/Baa, if the DARTS have a
rating of BBB- or better by S&P and baa3 or better by Moody's, or the equivalent
of both of such ratings by such agencies or a substitute rating agency or
substitute rating agencies selected as provided below, and (iv) if not AA/aa or
Above, A/a or BBB/baa, then BBB/baa. The Company shall take all reasonable
action necessary to enable S&P and Moody's to provide a rating for the DARTS.
If either S&P or Moody's shall not make such a rating available, or neither S&P
nor Moody's shall make such a rating available, Salomon Brothers Inc and Morgan
Stanley & Co. Incorporated, or their successors, shall select a nationally
recognized securities rating agency or two nationally recognized securities
rating agencies to act as a substitute rating agency or substitute rating
agencies, as the case may be.
(xv) "Minimum Applicable Rate," on any Auction Date, shall mean 59%
of the 60-day "AA" Composite Commercial Paper Rate in effect on such Auction
Date.
(xvi) "Order" shall have the meaning specified in paragraph (b)(i)
below.
(xvii) "Outstanding" shall mean, as of any date, the DARTS theretofore
issued by the Company except, without duplication, (A) any DARTS theretofore
canceled or delivered to the Trust Company for cancellation, or redeemed by the
Company, or as to which a notice of redemption shall have been given by the
Company, (B) any DARTS as to which the Company or any Affiliate thereof shall
be an Existing Holder and (C) any DARTS represented by any certificate in lieu
of which a new certificate has been executed and delivered by the Company.
(xviii) "Person" shall mean and include an individual, a partnership,
a corporation, a trust, an unincorporated association, a joint venture or other
entity or a government or any agency or political subdivision thereof.
(xix) "Potential Holder" shall mean any Person, including any
Existing Holder, (A) who shall have executed and delivered or caused to be
delivered a Purchaser's Letter to the Trust Company and (B) who may be
interested in acquiring Units (or, in the case of an Existing Holder, additional
Units).
(xx) "Purchaser's Letter" shall mean a letter addressed to the
Company, the Trust Company, Broker-Dealer and other persons in which a Person
agrees, among other things, to offer to purchase, offer to sell and/or sell
Units as set forth herein.
(xxi) "Securities Depository" shall mean The Depository Trust
Company and its successors and assigns or any other securities depository
selected by the Company which agrees to follow the procedures required to be
followed by such securities depository in connection with the DARTS.
(xxii) "Sell Order" shall have the meaning specified in paragraph
(b)(i) below.
(xxiii) "60-day 'AA' Composite Commercial Paper Rate," on any date,
means (i) the interest equivalent of the 60-day rate on commercial paper placed
on behalf of issuers whose corporate bonds are rated "AA" by S&P or the
equivalent of such rating by S&P or another rating agency, as such 60-day rate
is made available on a discount basis or otherwise by the Federal Reserve Bank
of New York for the Business Day immediately preceding such date, or (ii) in the
event that the Federal Reserve Bank of New York does not make available such a
rate, then the interest equivalent of the 60-day rate on commercial paper placed
on behalf of such issuers, as quoted on a discount basis or otherwise by Morgan
Stanley & Co. Incorporated or, in lieu thereof, any affiliates or successor
thereof (the "Commercial Paper Dealer"), to the Trust Company for the close of
business on the Business Day immediately preceding such date. If the Commercial
Paper Dealer does not quote a rate required to determine the 60-day "AA"
Composite Commercial Rate, the 60-day "AA" Composite Commercial Paper Rate shall
be determined on the basis of the quotation or quotations furnished by any
Substitute Commercial Paper Dealer or Substitute Commercial Paper Dealers
selected by the Company to provide such rate. If the Company, however, shall
adjust the number of Dividend Period Days in the event of a change in the
dividends received reduction minimum holding period contained in the Internal
Revenue Code of 1986, as amended, with the result that (i) the Dividend Period
Days shall be fewer than 70 days, such rate shall be the interest equivalent of
the 60-day rate on such commercial paper, (ii) the Dividend Period Days shall
be 70 or more days but fewer than 85 days, such rate shall be the arithmetic
average of the interest equivalent of the 60-day and 90-day rates on such
commercial paper, and (iii) the Dividend Period Days shall be 85 or more days
but 98 or fewer days, such rate shall be the interest equivalent of the 90-day
rate on such commercial paper. For the purposes of such definition, "interest
equivalent" means the equivalent yield on a 360-day basis of a discount basis
security to an interest-bearing security and "Substitute Commercial Paper
Dealer" shall mean any commercial paper dealer that is a leading dealer in the
commercial paper market, provided that neither such dealer nor any of its
affiliates is a Commercial Paper Dealer.
(xxiv) "Submission Deadline" shall mean 12:30 P.M., New York City
time, on any Auction Date or such other time on any Auction Date by which
Broker-Dealers are required to submit Orders to the Trust Company as specified
by the Trust Company from time to time.
(xxv) "Submitted Bid" shall have the meaning specified in
paragraph (d)(i) below.
(xxvi) "Submitted Hold Order" shall have the meaning specified in
paragraph (d)(i) below.
(xxvii) "Submitted Order" shall have the meaning specified in
paragraph (d)(i) below.
(xxviii) "Submitted Sell Order" shall have the meaning specified in
paragraph (d)(i) below.
(xxvix) "Sufficient Clearing Bids" shall have the meaning specified
in paragraph (d)(i) below.
(xxx) "Trust Company" shall mean Bankers Trust Company and its
successor, and assigns or any other bank, trust company or other entity selected
by the Company which agrees to follow the Auction Procedures described in this
Section (6) for the purposes of determining the Applicable Rate for the DARTS.
(xxxi) "Winning Bid Rate" shall have the meaning specified in
paragraph (d)(i) below.
(b) Orders by Existing Holders and Potential Holders
(i) On or prior to each Auction Date:
(A) each Existing Holder may submit to a Broker-Dealer information
as to:
(1) the number of Outstanding Units, if any, held by such
Existing Holder which such Existing Holder desires to continue to
hold without regard to the Applicable Rate for the next succeeding
Dividend Period;
(2) the number of Outstanding Units, if any, held by such
Existing Holder which such Existing Holder desires to continue to
hold, provided that the Applicable Rate for the next succeeding
Dividend Period shall not be less than the rate per annum specified
by such Existing Holder; and/or
(3) the number of Outstanding Units, if any, held by such
Existing Holder which such Existing Holder offers to sell without
regard to the Applicable Rate for the next succeeding Dividend
Period; and
(B) Each Broker-Dealer, using a list of a Potential Holders that
shall be maintained in good faith for the purpose of conducting a
competitive Auction shall contact Potential Holders, including Persons
that are not Existing Holders, on such list to determine the number of
Outstanding Units, if any, which each such Potential Holder offers to
purchase, provided that the Applicable Rate for the next succeeding
Dividend Period shall not be less than the rate per annum specified by
such Potential Holder.
For the purposes hereof, the communication to a Broker-Dealer of
information referred to in clause (A) or (B) of this paragraph (b)(i) is
hereinafter referred to as an "Order" and each Existing Holder and each
Potential Holder placing an Order is hereinafter referred to as a
"Bidder"; and Order containing the information referred to in clause
(A)(1) of this paragraph (b)(i) is hereinafter referred to as a "Hold
Order"; an Order containing the information referred to in clause (A)(2)
or (B) of this paragraph (b)(i) is hereinafter referred to as a "Bid"; and
an Order containing the information referred to in clause (A)(3) of this
paragraph (b)(i) is hereinafter referred to as a "Sell Order."
(ii) (A) A Bid by an Existing Holder shall constitute an irrevocable
offer to sell:
(1) the number of Outstanding Units specified in such Bid if
the Applicable Rate determined on such Auction Date shall be less
than the rate specified therein; or
(2) such number or a lesser number of Outstanding Units to be
determined as set forth in paragraph (e)(i)(D) if the Applicable Rate
determined on such Auction Date shall be equal to the rate specified
therein; or
(3) a lesser number of Outstanding Units to be determined as
set forth in paragraph (e)(ii)(C) if such specified rate shall be
higher than Maximum Applicable Rate and Sufficient Clearing Bids do
not exist.
(B) A Sell Order by an Existing Holder shall constitute an
irrevocable offer to sell:
(1) the number of Outstanding Units specified in such Sell
Order; or
(2) such number or a lesser number of Outstanding Units to be
determined as set forth in paragraph (e)(ii)(C) if Sufficient
Clearing Bids do not exist.
(C) A Bid by a Potential Holder shall constitute an irrevocable
offer to purchase:
(1) the number of Outstanding Units specified in such Bid if
the Applicable Rate determined on such Auction Date shall be higher
than the rate specified therein; or
(2) such number of a lesser number of Outstanding Units to be
determined as set forth in paragraph (e)(i)(E) if the Applicable Rate
determined on such Auction Date shall be equal to the rate specified
therein.
(c) Submission of Orders by Broker-Dealers to Trust Company
(i) Each Broker-Dealer shall submit in writing to the Trust Company
prior to the Submission Deadline on each Auction Date all Orders obtained by
such Broker-Dealer and specifying with respect to each Order:
(A) the name of the Bidder placing such Order;
(B) the aggregate number of Outstanding Units that are subject of
such Order;
(C) to the extent that such Bidder is an Existing Holder:
(1) the number of Outstanding Units, if any, subject to any
Hold Order placed by such Existing Holder;
(2) the number of Outstanding Units, if any, subject to any Bid
placed by such Existing Holder and the rate specified in such Bid;
and
(3) the number of Outstanding Units, if any, subject to any
Sell Order placed by such Existing Holder; and
(D) to the extent such Bidder is a Potential Holder, the rate
specified in such Potential Holder's Bid.
(ii) If any rate specified in any Bid contains more than three
figures to the right of the decimal point, the Trust Company shall round such
rate up to the next highest one-thousandth (.001) of 1%.
(iii) If an Order or Orders covering all of the Outstanding Units
held by an Existing Holder is not submitted to the Trust Company prior to the
Submission Deadline, the Trust Company shall deem a Hold Order to have been
submitted on behalf of such Existing Holder covering the number of Outstanding
Units held by such Existing Holder and not subject to Orders submitted to the
Trust Company.
(iv) If one or more Orders covering in the aggregate more than the
number of Outstanding Units held by an Existing Holder are submitted to the
Trust Company, such Orders shall be considered valid as follows and in the
following order or priority:
(A) any Hold Order submitted on behalf of such Existing Holder shall
be considered valid up to and including the number of Outstanding Units
held by such Existing Holder; provided that if more than one Hold Order is
submitted on behalf of such Existing Holder and the number of Units
subject to such Hold Orders exceeds the number of Outstanding Units held
by such Existing Holder, the number of Units subject to such Hold Orders
shall be reduced pro rata so that such Hold Orders shall cover the number
of Outstanding Units held by such Existing Holder;
(B) (1) any Bid shall be considered valid up to and including the
excess of the number of Outstanding Units held by such Existing Holder
over number of Units subject to Hold Orders referred to in paragraph
(c)(iv)(A);
(2) subject to clause (1) above, if more than one Bid with the
same rate is submitted on behalf of such Existing Holder and the
number of Outstanding Units subject to such Bids is greater than such
excess, the number of Outstanding Units subject to such Bids shall be
reduced pro rata so that such Bids shall cover the number of
Outstanding Units equal to such excess; and
(3) subject to clause (1) above, if more than one Bid with
different rates is submitted on behalf of such Existing Holder, such
Bids shall be considered valid in the ascending order of their
respective rates and in any such event the number, if any, of such
Outstanding Units subject to Bids not valid under this clause (B)
shall be treated as the subject of a Bid by a potential Holder; and
(C) any Sell Order shall be considered valid up to and including the
excess of the number of Outstanding Units held by such Existing Holder
over the number of Outstanding Units subject to Hold Orders referred to in
paragraph (c)(iv)(A) and Bids referred to in paragraph (c)(iv)(B).
(v) If more than one Bid is submitted on behalf of any Potential
Holder, each Bid submitted shall be a separate Bid with the rate and Units
therein specified.
(vi) If any rate specified in any Bid is lower than the Minimum
Applicable Rate for the Dividend Period to which such Bid relates, such Bid
shall be deemed to be a Bid specifying a rate equal to such Minimum Applicable
Rate.
(vii) Orders by Existing Holders and Potential Holders must
specify numbers of Units in whole Units. Any Order that specifies a number of
Units other than in whole units will be invalid and will not be considered a
Submitted Order for purposes of an Auction.
(d) Determination of Sufficient Clearing Bids, Winning Bid Rate and
Applicable Rate
(i) Not earlier than the Submission Deadline on each Auction Date,
the Trust Company shall assemble all Orders submitted or deemed submitted to it
by the Broker- Dealers (each such Order as submitted or deemed submitted by a
Broker-Dealer being hereinafter referred to individually as a "Submitted Hold
Order" a "Submitted Bid" or a "Submitted Sell Order," as the case may be, or as
a "Submitted Order") and shall determine:
(A) the excess of the total number of Outstanding Units over the
number of Outstanding Units that are the subject of Submitted Hold Orders
(such excess being hereinafter referred to as the "Available Units");
(B) from the Submitted Orders, whether:
(1) the number of Outstanding Units that are the subject of
Submitted Bids by Potential Holders specifying one or more rates
equal to or lower than the Maximum Applicable Rate exceeds or is
equal to the sum of:
(2) [a] the number of Outstanding Units that are the subject of
Submitted Bids by Existing Holders specifying one or more rates
higher than the Maximum Applicable Rate, and
[b] the number of Outstanding Units that are subject to
Submitted Sell Orders (if such excess of such equality exists (other
than because the number of Outstanding Units in clauses [a] and [b]
above are each zero because all of the Outstanding Units are the
subject of Submitted Hold Orders), such Submitted Bids in clause (1)
above being hereinafter referred to collectively as "Sufficient
Clearing Bids"); and
(C) if Sufficient Clearing Bids exist, the lowest rate specified in
the Submitted Bids (the "Winning Bid Rate"), which if:
(1) each Submitted Bid from Existing Holders specifying the
Winning Bid Rate and all other Submitted Bids from Existing Holders
specifying lower rates were rejected, thus entitling such Existing
Holders to continue to hold the Units that are the subject of such
Submitted Bids, and
(2) each Submitted Bid from Potential Holders specifying the
Winning Bid Rate and all other Submitted Bids from Potential Holders
specifying lower rates were accepted, thus entitling the Potential
Holders to purchase the Units that are the subject of such Submitted
Bids, would result in the number of shares subject to all Submitted
Bids specifying the Winning Bid Rate or a lower rate being at least
equal to the Available Units.
(ii) Promptly after the Trust Company has made the determinations
pursuant to paragraph (d)(i), the Trust Company shall advise the Company of the
Maximum Applicable Rate and the Minimum Applicable Rate and, based on such
determinations, the Applicable Rate for the next succeeding Dividend Period as
follows:
(A) if Sufficient Clearing Bids exist, that the Applicable Rate for
the next succeeding Dividend Period shall be equal to the Winning Bid Rate
so determined;
(B) if Sufficient Clearing Bids do not exist (other than because all
of the Outstanding Units are the subject of Submitted Hold Orders), that
the Applicable Rate for the next succeeding Dividend Period shall be equal
to the Maximum Applicable Rate; or
(C) if all the Outstanding Units are the subject of Submitted Hold
Orders, that the Applicable Rate for the next succeeding Dividend Period
shall be equal to the Minimum Applicable Rate.
(e) Acceptance and Rejection of Submitted Bids and Submitted Sell Orders
and Allocation of Shares
Based on the determinations made pursuant to paragraph (d)(i), the Submitted
Bids and Submitted Sell Orders shall be accepted or rejected and the Trust
Company shall take such other action as set forth below:
(i) If Sufficient Clearing Bids have been made, subject to the
provisions of paragraphs (e)(iii) and ((e)(iv), Submitted Bids and Submitted
Sell Orders shall be accepted or rejected in the following order or priority and
all other Submitted bids shall be rejected:
(A) the Submitted Sell Orders of Existing Holders shall be accepted
and the Submitted Bid of each of the Existing Holders specifying any rate
that is higher then the Winning Bid Rate shall be rejected, thus requiring
each such Existing Holder to sell the Outstanding Units that are the
subject of such Submitted Bid;
(B) the Submitted Bid of each of the Existing Holders specifying any
rate that is lower than the Winning Bid Rate shall be accepted, thus
entitling each such Existing Holder to continue to hold the Outstanding
Units that are the subject of such Submitted Bid;
(C) the Submitted Bid of each of the Potential Holders specifying
any rate that is lower than the Winning Bid Rate shall be accepted;
(D) the Submitted Bid of each of the Existing Holders specifying a
rate that is equal to the Winning Bid Rate shall be accepted, thus
entitling each such Existing Holder to continue to hold the Outstanding
Units that are the subject of such Submitted Bids, unless the number of
Outstanding Units subject to all such Submitted Bids shall be greater than
the number of Outstanding Units ("remaining shares") equal to the excess
of the Available Units over the number of Outstanding Units subject to
Submitted Bids described in paragraphs (e)(i)(B) and (e)(i)(C), in which
event the Submitted Bids of each such Existing Holder shall be rejected,
and each such Existing Holder shall be required to sell Outstanding Units,
but only in an amount equal to the difference between (1) the number of
Outstanding Units then held by such Existing Holder subject to such
Submitted Bid and (2) the number of Units obtained by multiplying (x) the
number of remaining shares by (y) a fraction the numerator of which shall
be the number of Outstanding Units held by such Existing Holder subject to
such Submitted Bid and the denominator of which shall be the sum of the
number of Outstanding Units subject to such Submitted Bids made by all
such Existing Holders that specified a rate equal to the Winning Bid Rate;
and
(E) the Submitted Bid of each of the Potential Holders specifying a
rate that is equal to the Winning Bid Rate shall be accepted but only in
an amount equal to the number of Outstanding Units obtained by multiplying
(x) the difference between the Available Units and the number of
Outstanding Units subject to the Submitted Bids described in paragraphs
(e)(i)(B), (e)(i)(C) and (e)(i)(D) by (y) a fraction the numerator of
which shall be the number of Outstanding shares of Units subject to such
Submitted Bid and the denominator of which shall be the sum of the number
of Outstanding Units subject to such Submitted Bids made by all such
Potential Holders that specified rates equal to the Winning Bid Rate.
(ii) If Sufficient Clearing Bids have not been made (other than
because all of the Outstanding Units are subject to Submitted Hold Orders),
subject to the provisions of paragraphs (e)(iii) and (e)(iv), Submitted Orders
shall be accepted or rejected as follows in the following order of priority and
all other Submitted Bids shall be rejected:
(A) the Submitted Bid of each Existing Holder specifying any rate
that is equal to or lower than the Maximum Applicable Rate shall be
accepted, thus entitling such Existing Holder to continue to hold the
Outstanding Units that are the subject of such Submitted Bid;
(B) the Submitted Bid of each Potential Holder specifying any rate
that is equal to or lower than the Maximum Applicable Rate shall be
accepted, thus requiring such Potential Holder to purchase the Outstanding
Units that are the subject of such Submitted Bid; and
(C) the Submitted Bids of each Existing Holder specifying any rate
that is higher than the Maximum Applicable Rate shall be rejected and the
Submitted Sell Orders of each Existing Holder shall be accepted, in both
cases only in an amount equal to the difference between (1) the number of
Outstanding Units then held by such Existing Holder subject to such
Submitted Bid or Submitted Sell Order and (2) the number of Units obtained
by multiplying (x) the difference between the Available Units and the
aggregate number of Outstanding Units subject to Submitted Bids described
in paragraphs (e)(ii)(A) and (e)(ii)(B) by (y) a fraction the numerator of
which shall be the number of Outstanding Units held by such Existing
Holder subject to such Submitted Bid or Submitted Sell Order and the
denominator of which shall be the number of Outstanding Units subject to
all such Submitted Bids and Submitted Sell Orders.
(iii) If, as a result of the procedures described in paragraph
(e)(i) or (e)(ii), any Existing Holder would be entitled or required to sell,
or any Potential Holder would be entitled or required to purchase, a fraction
of a Unit on any Auction Date, the Trust Company shall, in such manner as, in
its sole discretion, it shall determine, round up or down the number of Units
to be purchased or sold by any Existing Holder or Potential Holder on such
Auction Date so that the number of Outstanding Units purchased or sold by each
Existing Holder or Potential Holder on such Auction Date shall be whole Units.
(iv) If, as a result of the procedures described in paragraph (e)(i),
any Potential Holder would be entitled or required to purchase less than a whole
Unit on any Auction Date, the Trust Company shall, in such manner as, in its
sole discretion, it shall determine, allocate Units for purchase among Potential
Holders so that only whole Units are purchased on such Auction Date by any
Potential Holder, even if such allocation results in one or more of such
Potential Holders not purchasing Units on such Auction Date.
(v) Based on the results of each Auction, the Trust Company shall
determine the aggregate number of Outstanding Units to be purchased and the
aggregate number of Outstanding Units to be sold by Potential Holders and
Existing Holders on whose behalf each Broker-Dealer submitted Bids or Sell
Orders, and, with respect to each Broker-Dealer, to the extent that such
aggregate number of Outstanding Units to be purchased and such aggregate number
of Outstanding Units to be sold differ, determine to which other Broker- Dealer
or Broker-Dealers acting for one or more purchasers such Broker-Dealer shall
deliver, or from which other Broker-Dealer or Broker-Dealers acting for one or
more sellers such Broker-Dealer shall receive, as the case may be, Outstanding
Units.
(f) Miscellaneous
The Board of Directors may interpret the provisions of these Auction
Procedures to resolve any inconsistency or ambiguity, and may remedy any formal
defect or make any other change or modification which does not adversely affect
the rights of Existing Holders of Units. An Existing Holder (A) may sell,
transfer or otherwise dispose of Units only pursuant to a Bid or Sell Order in
accordance with the procedures described in this paragraph or to or through a
Broker-Dealer or to a Person that has delivered a signed copy of a Purchaser's
Letter to the Trust Company, provided that in the case of all transfers other
than pursuant to Auctions such Existing Holder, its Broker-Dealer or its Agent
Member advises the Trust Company of such transfer and (B) shall have the
ownership of the Units held by it maintained in book entry form by the
Securities Depository in the account of its Agent Member, which in turn will
maintain records of such Existing Holder's beneficial ownership. Neither the
Company nor any Affiliate shall submit an Order, either directly or indirectly,
in any Auction. Except as otherwise provided by law, all of the Outstanding
Units shall be represented by a certificate registered in the name of the
nominee of the Securities Depository an no Person acquiring Units shall be
entitled to receive a certificate representing such Units.
(g) Headings of Subdivisions
The headings of the various subdivisions of these Auction Procedures are
for convenience of reference only and shall not affect the interpretation of any
of the provisions hereof.
SECTION II
There shall be a series of Class A Preferred Stock designated "9% Class A
Preferred Stock, 1989 Series," and consisting of 3,000,000 shares with an
aggregate par value of $75,000,000 and a par value per share of $25. The
dividend rate and redemption prices as to said 9% Class A Preferred Stock, 1989
Series, shall be as follows:
(a) Dividends on said 9% Class A Preferred Stock, 1989 Series, shall
be at the rate of 9% per annum per share, and no more, and shall be cumulative
from the date of issuance. Said dividends, when declared, shall be payable on
the first day of January, April, July and October in each year, commencing
January 1, 1990.
(b) The redemption prices of the 9% Class A Preferred Stock, 1989
Series, shall be as follows:
(i) if redeemed through operation of the sinking fund
hereinafter provided, at the price of $25.00 per share,
(ii) if redeemed otherwise than through operation of the sinking
fund, for each of the twelve-month periods commencing October 1, 1989, the
redemption prices of said 9% Class A Preferred Stock, 1989 Series, shall be the
amount per share set forth below:
Twelve Twelve
Months Redemption Months Redemption
Beginning Price Beginning Price
October 1 Per Share October 1 Per Share
--------- ---------- --------- ----------
1989 $27.25 2002 $25.30
1990 27.10 2003 25.15
1991 26.95 2004 25.00
1992 26.80 2005 25.00
1993 26.65 2006 25.00
1994 26.50 2007 25.00
1995 26.35 2008 25.00
1996 26.20 2009 25.00
1997 26.05 2010 25.00
1998 25.90 2011 25.00
1999 25.75 2012 25.00
2000 25.60 2013 25.00
2001 25.45
plus in all cases that portion of the quarterly dividend accrued thereon to the
redemption date and all unpaid dividends hereon, if any; provided, however, that
none of the 9% Class A Preferred Stock, 1989 Series, shall be redeemed prior to
October 1, 1994, if such redemption is for the purpose of or in anticipation of
refunding such 9% Class A Preferred Stock, 1989 Series, through the use,
directly or indirectly, of funds borrowed by the Company or of the proceeds of
the issue by the Company of shares of any stock ranking prior to or on a parity
with the 9% Class A preferred Stock, 1989 Series, as to dividends or assets, if
such borrowed funds or such shares have an effective interest cost or effective
dividend cost to the Company (computed in accordance with generally accepted
financial principles), as the case may be, of less than 9.24% per annum.
(c) As and for a sinking fund for said 9% Class A Preferred Stock,
1989 Series, commencing on October 1, 1995, and on each October 1 in each year
thereafter so long as any shares of the 9% Class A Preferred Stock, 1989 Series,
remain outstanding, the Company shall, to the extent of any funds of the Company
legally available therefor and except as otherwise restricted by the Company's
Amended and Restated Certificate of Incorporation, redeem 150,000 shares of 9%
Class A Preferred Stock, 1989 Series, (or such lesser number of such shares as
remain outstanding) at the sinking fund redemption price, plus accrued dividends
to the date fo redemption; provided, however, that if in any year the Company
does not redeem the full number of shares of 9% Class A Preferred Stock, 1989
Series, required to be redeemed pursuant to this sinking fund, the deficiency
shall be made good on the next succeeding October 1 on which the Company has
funds legally available for, and is otherwise permitted to effect, the
redemption of shares of 9% Class A Preferred Stock, 1989 Series, pursuant to
this sinking fund. At the option of the Company, the number of shares of 9%
Class A Preferred Stock, 1989 Series, redeemed on any October 1 may be reduced
by the number of such shares purchased and canceled by the Company during the
preceding twelve-month period or redeemed during such period pursuant to clause
(ii) of subsection (b) hereof. Any shares so redeemed or purchased and canceled
may be given the status of authorized but unissued shares of Senior Stock, but
none of such shares shall be reissued as shares of 9% Class A Preferred Stock,
1989 Series. The Company shall have the option, which shall be noncumulative,
to redeem on October 1, 1995 and on each October 1 thereafter up to an
additional 150,000 shares of 9% Class A Preferred Stock, 1989 Series, at the
sinking fund redemption price, plus accrued dividends to the date of redemption.
No such optional sinking fund shall operate to reduce the number of shares of
the 9% Class A Preferred Stock, 1989 Series, required to be redeemed pursuant
to the mandatory sinking fund provisions hereinabove set forth. If the Company
shall at any time fail to make a full mandatory sinking fund payment on any
sinking fund payment date, the Company shall not pay any dividends or make any
other distributions in respect of outstanding shares of any junior stock (as
that term is defined in Section II, Section 3 of Part Two hereof) of the
Company, other than dividends or distributions in shares of junior stock, or
purchase or otherwise acquire for value any outstanding shares of junior stock,
until all such payments have been made.
RESOLVED, that the officers of the Company are severally authorized
and directed to make, sign, swear to and cause to be filed any and all
certificates and other documents required to make effective the amendment of the
Company's Certificate of Incorporation adopted by the Board at this meeting.
PART FIVE
PROVISIONS WITH RESPECT TO THE CLASS OF COMMON STOCK
Subject to the rights of holders of Senior Stock, the holders of Common
Stock shall have the dividend, voting, liquidation, preemptive and other rights
to which they are entitled under the general corporation law of the State of
Connecticut, as from time to time in effect, except as otherwise provided
herein. The holders of the Common Stock shall have no preemptive right to
subscribe to any future issues of Senior Stock shall have no preemptive right
to subscribe to any future issues of Senior Stock or any other preferred stock
of any class now or hereafter authorized (other than Senior Stock or other
preferred stock which is convertible into Common Stock) nor to any future issues
of bonds, notes or other evidences of indebtedness which may be convertible into
preferred stock. As used in this paragraph, the term "preferred stock" shall
mean stock which has, as against the Common Stock, preferential rights to the
Company's assets in the event of liquidation or preferential rights in respect
of dividends or other distributions, and shall include the aforementioned
classed of Preferred Stock and Class A Preferred Stock.
The Board of Directors shall have the power to issue and dispose of, from
time to time, shares of the authorized and unissued Common Stock at such times,
in such amounts, upon such terms, and in such manner as it may determine, either
for cash or property, or for securities convertible into Common Stock, and to
fix the amount of money or the actual value of the consideration for which such
authorized and unissued Common Stock shall be issued.
EXHIBIT A TO
RESTATED
CERTIFICATE OF
INCORPORATION
TABLE OF CONNECTICUT SPECIAL ACTS
GRANTING RIGHTS, POWERS AND
FRANCHISES TO THE CONNECTICUT
LIGHT AND POWER COMPANY AND
ITS PREDECESSORS
TITLE DATE OF VOLUME PAGE
APPROVAL OF THE COMPILED
SPECIAL LAWS OF
CONNECTICUT OR
CONNECTICUT
SPECIAL ACTS
A - THE CONNECTICUT LIGHT AND POWER
COMPANY, FORMERLY THE ROCKY
RIVER POWER COMPANY
1. Incorporating the 6/22/1905 Vol. XIV P. 860
Rocky River Power
Company
2. Amending the Charter 8/17/1909 Vol. XV P. 1093
of the Rocky River
Power Company
3. Amending the Charter 3/29/1917 Vol. XVII P. 833
of The Housatonic
Power Company
4. Amending the Charter 4/9/1919 Vol. XVIII P. 97
of The Connecticut
Light and Power
Company
5. Amending the Charter 4/15/1919 Vol. XVIII P. 106
of The Connecticut
Light and Power
Company
6. Amending the Charter 5/16/1923 Vol. XIX P. 180
of The Connecticut
Light and Power
Company
7. Amending the Charter 4/26/1927 Vol. XX P. 223
of The Connecticut
Light and Power
Company (Sections 2
and 3 only)
8. Authorizing The 5/23/1927 Vol. XX P. 297
Connecticut Light and
Power Company to
Acquire the Franchises
and Property of The
Bristol and Plainville
Electric Company
B - PREDECESSORS OF THE CONNECTICUT
LIGHT AND POWER COMPANY
1. Housatonic Power Company
1. Incorporating The 3/24/1893 Vol. XI P. 111
Housatonic Power
Company
2. Amending the Charter 6/27/1893 Vol. XI P. 868
of The Housatonic
Power Company
3. Concerning the 3/14/1895 Vol. XII P. 27
Organization of The
Housatonic Power
Company
4. Amending the Charter 5/3/1895 Vol. XII P. 247
of The Housatonic
Power Company
5. Extending the Time for 3/10/1897 Vol. XII P. 692
the Organization of
The Housatonic Power
Company
6. Amending the Charter 3/9/1899 Vol. XIII P. 23
of The Housatonic
Power Company
7. Amending the Charter 8/29/1911 Vol. XVI P. 499
of The Housatonic
Power Company
8. Concerning The 6/6/1913 Vol. XVI P. 1032
Housatonic Power
Company
2. The New Milford Power Company
1. Incorporating The New 4/20/1893 Vol. XI P. 288
Milford Power Company
2. Amending the Charter 3/14/1895 Vol. XII P. 28
of The New Milford
Power Company
3. Amending the Charter 5/21/1903 Vol. XIV P. 252
of The New Milford
Power Company
4. Amending the Charter 7/13/1905 Vol. XIV P. 997
of The New Milford
Power Company
3. The Branford Lighting and Water Company
(formerly The Branford Electric Company)
1. Incorporating The 3/28/1895 Vol. XII P. 104
Branford Electric
Company
2. Amending the Charter 4/7/1897 Vol. XII P. 846
of The Branford
Electric Company
3. Amending the Charter 6/1/1899 Vol. XIII P. 334
of The Branford
Electric Company
4. Amending the Charter 5/8/1901 Vol. XIII P. 791
of The Branford
Lighting and Water
Company
5. Amending the Charter 5/15/1903 Vol. XIV P. 204
of The Branford
Lighting and Water
Company
6. Amending the Charter 5/9/1905 Vol. XIV P. 652
of The Branford
Lighting and Water
Company
4. The United Electric Light and Water Company
1. Incorporating The 6/10/1901 Vol. XIII P. 995
United Electric Light
and Water Company
2. Amending the Charter 5/27/1903 Vol. XIV P. 239
of The United Electric
Light and Water
Company
3. Amending the Charter 6/3/1913 Vol. XVI P. 933
of The United Electric
Light and Water
Company
4. Amending the Charter 5/16/1917 Vol. XVII P. 1051
of The United Electric
Light and Water
Company
5. The Seymour Electric Light Company
1. Incorporating The 5/21/1889 Vol. X P. 1133
Seymour Electric Light
Company
2. Amending the Charter 3/29/1905 Vol. XIV P. 549
of The Seymour
Electric Light Company
3. Amending the Charter 5/1/1917 Vol. XVII P. 949
of The Seymour
Electric Light Company
6. The Meriden Electric Light Company
1. Incorporating The 4/20/1887 Vol. X P. 684
Meriden Electric Light
Company
2. Authorizing The 6/14/1907 Vol. XV P. 255
Meriden Electric Light
Company to Increase
Its Capital Stock and
to Issue Bonds
3. Authorizing The 5/7/1917 Vol. XVII P. 993
Meriden Electric Light
Company to Increase
Its Capital Stock
4. Amending the Charter 4/9/1925 Vol. XIX P. 678
of The Meriden
Electric Light Company
7. The Meriden Gas-Light Company
1. Incorporating the 6/12/1860 Vol. V P. 362
Meriden Gas-Light
Company
2. Authorizing the 5/31/1867 Vol. VI P. 154
Meriden Gas Light
Company to Increase
its Capital Stock
3. Amending the Charter 6/11/1868 Vol. VI P. 320
of the Meriden Gas
Light Company
4. Amending the Charter 3/4/1878 Vol. VIII P. 149
of the Meriden Gas
Light Company
5. Empowering the Meriden 2/28/1883 Vol. IX P. 707
Gas Light Company to
Increase its Capital
Stock
6. Amending the Charter 4/7/1887 Vol. X P. 614
of the Meriden Gas
Light Company
7. Amending the Charter 5/18/1893 Vol. XI P. 473
of the Meriden Gas
Light Company
8. Authorizing the 4/25/1899 Vol. XIII P. 187
Meriden Gas Light
Company to Increase
its Capital Stock and
to Issue Bonds
9. Amending The Charter 4/21/1909 Vol. XV P. 681
of the Meriden Gas
Light Company
10. Authorizing the 6/5/1913 Vol. XVI P. 888
Meriden Gas Light
Company to Increase
its Capital Stock
11. Amending the Charter 4/9/1925 Vol. XIX P. 675
of the Meriden Gas
Light Company
8. The Woodbury Electric Company
(formerly The Woodbury and
Southbury Electric Railway Company)
1. Incorporating The 6/14/1893 Vol. XI P. 720
Woodbury and Southbury
Electric Railway
Company
2. Re-enacting and 4/7/1897 Vol. XII P. 851
Amending the Charter
of The Woodbury and
Southbury Electric
Railway Company
3. Amending the Charter 4/23/1925 Vol. XIX P. 715
of The Woodbury
Electric Company
9. The Westport Electric Company
1. Incorporating The 4/2/1925 Vol. XIX P. 621
Westport Electric
Company
10. The Westport Water Company
1. Incorporating The 5/15/1889 Vol. X P. 1063
Westport Water Company
2. Amending the Charter 3/2/1893 Vol. XI P. 33
of The Westport Water
Company
3. Amending the Charter 6/30/1893 Vol. XI P. 1099
of The Westport Water
Company
4. Incorporating the 7/3/1895 Vol. XII P. 601
United Water and Light
Company
5. Extending the Time for 4/22/1897 Vol. XII P. 904
the Organization of
the United Water and
Light Company
6. Amending the Charter 6/21/1905 Vol. XIV P. 847
of The Westport Water
Company
11. The New Milford Electric Light Company
1. Incorporating The New 5/27/1893 Vol. XI P. 575
Milford Electric Light
Company
2. Amending the Charter 5/16/1911 Vol. XVI P. 190
of The New Milford
Electric Light Company
3. Authorizing The New 3/26/1919 Vol. XVIII P. 29
Milford Electric Light
Company to Increase
Its Capital Stock
4. Authorizing The New 5/3/1921 Vol. XVIII P. 524
Milford Electric Light
Company to Increase
Its Capital Stock
5. Amending the Charter 4/23/1925 Vol. XIX P. 714
of The New Milford
Electric Light Company
6. Concerning an 5/8/1929 Vol. XX P. 848
Amendment to the
Charter of The New
Milford Electric Light
Company
12. The Waterbury and Milldale Tramway Company
1. Incorporating The 6/5/1907 Vol. XV P. 180
Waterbury and Milldale
Tramway Company
2. Amending the Charter 6/2/1927 Vol. XX P. 444
of The Waterbury and
Milldale Tramway
Company
13. Bristol and Plainville Electric Company
(formerly Bristol and Plainville Tramway Company)
1. Incorporating the 6/14/1893 Vol. XI P. 730
Bristol and Plainville
Tramway
2. Merging The Bristol 3/31/1897 Vol. XII P. 822
Electric Light Company
in the Bristol and
Plainville Tramway
Company
3. Amending the Charter 4/7/1897 Vol. XII P. 874
of the Bristol and
Plainville Tramway
Company
4. Amending the Charter 6/13/1899 Vol. XIII P. 284
of the Bristol and
Plainville Tramway
Company
5. Amending the Charter 5/15/1903 Vol. XIV P. 185
of the Bristol and
Plainville Tramway
Company
6. Amending the Charter 7/8/1909 Vol. XV P. 888
of the Bristol and
Plainville Tramway
Company
7. Amending the Charter 5/3/1921 Vol. XVIII P. 500
of the Bristol and
Plainville Tramway
Company
(VALIDATED: PUBLIC ACTS, 1923, CHAPTER 276, APPROVED 6/21/1923)
8. Authorizing the 3/20/1925 Vol. XIX P. 61
Directors of the
Bristol and Plainville
Electric Company to
Change the Par Value
of Its Stock
14. The Bristol Electric Light Company
1. Incorporating The 2/24/1886 Vol. X P. 221
Bristol Electric Light
Company
15. The Middletown Gas Light Company
1. Incorporating "The Passed Vol. III P. 571
Middletown Gas Light 1853
Company"
2. Amending the Charter 7/3/1867 Vol. VI P. 219
of the Middletown Gas
Light Company
3. Amending the Charter 6/11/1873 Vol. VII P. 472
of the Middletown Gas
Light Company
4. Amending the Charter 3/18/1881 Vol. IX P. 69
of The Middletown Gas
Light Company
5. Amending the Charter 3/15/1895 Vol. XII P. 30
of The Middletown Gas
Light Company
6. Amending the Charter 6/6/1913 Vol. XVI P. 1116
of The Middletown Gas
Light Company
7. Amending the Charter 5/6/1927 Vol. XX P. 288
of The Middletown Gas
Light Company
16. The Eastern Connecticut Power Company
1. Incorporated on -- -- --
8/28/1917 under
General Laws
2. Concerning the Sale of 5/8/1919 Vol. XVIII P. 180
Gas and Electricity in
Norwich
3. Authorizing The Shore 5/8/1919 Vol. XVIII P. 204
Line Electric Railway
Company to Sell
Certain Rights and
Property to The
Eastern Connecticut
Power Company
3. Amending the Charter 6/3/1921 Vol. XVIII P. 883
of The Eastern
Connecticut Power
Company
4. Concerning The Eastern 4/4/1923 Vol. XIX P. 133
Connecticut Power
Company
5. Authorizing The 5/23/1927 Vol. XX P. 310
Eastern Connecticut
Power Company to
Acquire the Franchises
and Property of The
Putnam Light and Power
Company, The Danielson
and Plainfield Gas and
Electric Company and
The Lyme Electric
Power Company
17. The Shore Line Electric Railway Company
1. Incorporating The 6/6/1905 Vol. XIV P. 719
Shore Line Electric
Railway Company
2. Amending the Charter 6/10/1909 Vol. XV P. 810
of The Shore Line
Electric Railway
Company and Extending
the Time for
Constructing its
Lines.
3. Concerning Bonds of 6/29/1911 Vol. XVI P. 289
The Shore Line
Electric Railway
Company
4. Amending the Charter 8/22/1911 Vol. XVI P. 439
of The Shore Line
Electric Railway
Company
5. Amending the Charter 6/4/1913 Vol. XVI P. 945
of The Shore Line
Electric Railway
Company
6. Amending the Charter 5/16/1917 Vol. XVII P. 1035
of The Shore Line
Electric Railway
Company
18. The Groton and Stonington Street Railway Company
1. Incorporating The 5/11/1903 Vol. XIV P. 151
Groton and Stonington
Street Railway Company
2. Amending the Charter 7/25/1907 Vol. XV P. 310
of The Groton and
Stonington Street
Railway Company
19. The Norwich & Westerly Traction Company
(formerly The Norwich & Westerly Railway Company,
also The Norwich, Mystic and Westerly Street
Railway Company)
1. Incorporating The 5/11/1903 Vol. XIV P. 158
Norwich, Mystic and
Westerly Street
Railway Company
2. Granting Additional 4/21/1909 Vol. XV P. 660
Powers to The Norwich,
Mystic and Westerly
Street Railway Company
3. Amending the Charter 6/6/1913 Vol. XVI P. 989
of The Norwich &
Westerly Traction
Company
20. The Putnam Light and Power Company
(formerly Putnam Gas Light Company)
1. Incorporating the 3/10/1886 Vol. X P. 276
Putnam Gas Light
Company
2. Reducing the Capital 3/4/1887 Vol. X P. 448
Stock of the Putnam
Gas Light Company
3. Amending the Charter 4/20/1887 Vol. X P. 694
of the Putnam Gas
Light Company
4. Validating an 5/29/1889 Vol. X P. 1176
Amendment to the
Charter of Putnam Gas
Light Company and
Changing Its Corporate
Name
5. Amending the Charter 4/3/1903 Vol. XIV P. 49
of The Putnam Light
and Power Company
6. Amending the Charter 3/16/1905 Vol. XIV P. 528
of The Putnam Light
and Power Company
7. Amending the Charter 3/16/1905 Vol. XIV P. 528
of The Pomfret Club
8. Extending the Time for 5/1/1907 Vol. XV P. 117
the Acceptance of an
Amendment to the
Charter of The Putnam
Light and Power
Company
9. Authorizing The Putnam 4/6/1911 Vol. XVI P. 104
Light and Power
Company to Distribute
and Sell Electricity
in the Town of
Woodstock
10. Amending the Charter 4/6/1911 Vol. XVI P. 116
of The Putnam Light
and Power Company
11. Amending the Charter 4/24/1917 Vol. XVII P. 867
of The Putnam Light
and Power Company
12. Amending the Charter 6/3/1921 Vol. XVIII P. 877
of The Putnam Light
and Power Company
21. The Lyme Electric Power Company
1. Incorporating The Lyme 7/5/1907 Vol. XV P. 331
Electric Power Company
2. Extending the Time for 7/14/1909 Vol. XV P. 898
the Organization of
The Lyme Electric
Power Company
3. Amending the Charter 3/30/1915 Vol. XVII P. 69
of The Lyme Electric
Power Company
22. The Danielson and Plainfield Gas and Electric
Company (formerly The Nashawaug Electric Power
Company)
1. Incorporating The 6/28/1893 Vol. XI P. 882
Nashawaug Electric
Power Company
2. Authorizing the Merger 3/19/1919 Vol. XVIII P. 24
of The People's Light
and Power Company and
The Danielson and
Plainfield Gas and
Electric Company,
under the Name of The
Danielson and
Plainfield Gas and
Electric Company
3. Extending the Time for 5/1/1923 Vol. XIX P. 153
the Acceptance of an
Amendment to the
Charters of The
People's Light and
Power Company and The
Danielson and
Plainfield Gas and
Electric Company
23. The People's Light and Power Company
1. Incorporating The 4/5/1893 Vol. XI P. 178
People's Light and
Power Company
2. Amending the Charter 4/23/1903 Vol. XIV P. 99
of The People's Light
and Power Company
3. Amending the Charter 3/16/1905 Vol. XIV P. 529
of The People's Light
and Power Company
4. Extending the Time for 5/1/1907 Vol. XV P. 104
the Acceptance of an
Amendment to the
Charter of The
People's Light and
Power Company
24. The Gaylordsville Electric Company
1. Incorporating The 5/25/1923 Vol. XIX P. 318
Gaylordsville Electric
Company
25. The Uncas Power Company
1. Incorporating The 7/18/1905 Vol. XIV P. 1082
Uncas Power Company
2. Amending the Charter 6/28/1907 Vol. XV P. 281
of The Uncas Power
Company
3. Amending the Charter 8/24/1909 Vol. XV P. 1116
of The Uncas Power
Company
26. The Kent Electric Light and Gas Company
1. Incorporating The Kent 5/22/1913 Vol. XVI P. 861
Electric Light and Gas
Company
27. The Beacon Falls Electric Company
(formerly The Beacon Falls Rubber Shoe Company)
1. Incorporating The 3/15/1899 Vol. XIII P. 37
Beacon Falls Rubber
Shoe Company
28. The Waterbury Gas Light Company
1. Incorporating "The Passed Vol. III P. 591
Waterbury Gas Light 1854
Company"
2. Amending the Charter 5/29/1873 Vol. VII P. 465
of "The Waterbury Gas
Light Company"
3. Amending the Charter 3/5/1884 Vol. IX P. 922
of The Waterbury Gas
Light Company
4. Amending the Charter 3/26/1884 Vol. IX P. 994
of The Waterbury Gas
Light Company
5. Amending the Charter 3/12/1895 Vol. XII P. 17
of The Waterbury Gas
Light Company
6. Amending the Charter 6/13/1895 Vol. XII P. 386
of The Waterbury Gas
Light Company
7. Validating the 3/1/1897 Vol. XII P. 673
Amendments to the
Charter of The
Waterbury Gas Light
Company
8. Amending the Charter 4/14/1903 Vol. XIV P. 53
of The Waterbury Gas
Light Company
9. Amending the Charter 9/19/1911 Vol. XVI P. 640
of The Waterbury Gas
Light Company and
Authorizing it to
Increase its Capital
Stock and to Issue
Bonds
10. Amending the Charter 9/20/1911 Vol. XVI P. 646
of The Waterbury Gas
Light Company
11. Amending the Charter 5/20/1915 Vol. XVII P. 502
of The Waterbury Gas
Light Company
12. Amending the Charter 4/2/1919 Vol. XVIII P. 52
of The Waterbury Gas
Light Company
13. Amending the Charter 4/16/1925 Vol. XIX P. 685
of The Waterbury Gas
Light Company
14. Concerning the Charter 6/22/1927 Vol. XX P. 385
of The Waterbury Gas
Light Company
15. Amending the Charter 6/12/1929 Vol. XX P. 933
of The Waterbury Gas
Light Company
29. Naugatuck Electric Light Company
1. Incorporating the 4/16/1887 Vol. X P. 650
Naugatuck Electric
Light Company
2. Validating the Charter 5/25/1893 Vol. XI P. 560
of the Naugatuck
Electric Light Company
3. Authorizing the 5/25/1893 Vol. XI P. 561
Naugatuck Electric
Light Company to Issue
Bonds
4. Validating the Charter 3/26/1895 Vol. XII P. 67
and Amendments Thereto
of the Naugatuck
Electric Light Company
5. Authorizing the 3/2/1899 Vol. XIII P. 17
Naugatuck Electric
Light Company to Issue
Bonds
30. The Watertown Gas Company
1. Incorporating The 6/6/1911 Vol. XVI P. 249
Watertown Gas Company
31. Winsted Gas Company
1. Incorporating the 5/30/1860 Vol. V P. 348
Winsted Gas Company
2. Increasing the Capital 6/17/1874 Vol. VII P. 670
Stock of the Winsted
Gas Company
3. Amending the Charter 4/13/1887 Vol. X P. 636
of the Winsted Gas
Company
4. Amending the Charter 5/17/1899 Vol. XIII P. 255
of the Winsted Gas
Company
5. Amending the Charter 5/10/1901 Vol. XIII P. 799
of The Winsted Gas
Company
6. Amending the Charter 4/9/1919 Vol. XVIII P. 90
of the Winsted Gas
Company
32. Central Connecticut Power and Light Company
(formerly The East Haddam Electric Light Company)
1. Incorporating The East 5/18/1893 Vol. XI P. 519
Haddam Electric Light
Company
2. Extending the Time for 7/2/1895 Vol. XII P. 572
Organization of The
East Haddam Electric
Light Company
3. Amending the Charter 2/18/1897 Vol. XII P. 664
of The East Haddam
Electric Light Company
4. Amending the Charter 5/20/1915 Vol. XVII P. 497
of The East Haddam
Electric Light Company
5. Changing the Name of 3/29/1917 Vol. XVII P. 863
The East Haddam
Electric Light Company
to Central Connecticut
Power and Light
Company
6. Amending the Charter 5/17/1921 Vol. XVIII P. 596
of the Central
Connecticut Power and
Light Company
7. Providing for the 6/24/1921 Vol. XVIII P. 1012
Rescission of the
Contract Between the
State and the Central
Connecticut Power and
Light Company
8. Amending the Charter 6/15/1925 Vol. XIX P. 805
of the Central
Connecticut Power and
Light Company
33. The Colchester Electric Light Company
1. Incorporating The 5/9/1893 Vol. XI P. 348
Colchester Electric
Light Company
2. Reviving the Charter 8/10/1909 Vol. XV P. 1089
of The Colchester
Electric Light Company
34. The Essex Light and Power Company
1. Incorporating The 5/17/1899 Vol. XIII P. 221
Essex Light and Power
Company
2. Amending the Charter 7/25/1911 Vol. XVI P. 381
of The Essex Light and
Power Company
35. The Rockville-Willimantic Lighting Company
(formerly The Willimantic and
Stafford Street Railway Company)
1. Incorporating The 7/18/1905 Vol. XIV P. 1096
Willimantic and
Stafford Street
Railway Company
2. Extending the Time for 5/13/1909 Vol. XV P. 737
The Willimantic and
Stafford Street
Railway Company to
Construct its Tracks
3. Authorizing the Laying 5/10/1915 Vol. XVII P. 244
of Certain Gas Pipes
Across Land of the
State in Willimantic
4. Authorizing The 6/2/1921 Vol. XVIII P. 862
Rockville-Willimantic
Lighting Company to
Issue First and
Refunding Mortgage
Bonds and Preferred
Stock
5. Defining the 7/22/1925 Vol. XIX P. 898
Territorial Limits of
The Rockville-
Willimantic Lighting
Company
6. Amending an Act 5/24/1927 Vol. XX P. 299
Authorizing The
Rockville-Willimantic
Lighting Company to
Issue First and
Refunding Mortgage
Bonds and Preferred
Stock
7. Amending the Charter 5/8/1929 Vol. XX P. 761
of The Rockville-
Willimantic Lighting
Company
8. Extending the 6/18/1929 Vol. XX P. 1005
Territorial Limits of
The Rockville-
Willimantic Lighting
Company
36. The Rockville Gas and Electric Company
(formerly The Rockville and
Ellington Street Railway Company)
1. Incorporating The 6/30/1893 Vol. XI P. 997
Rockville and
Ellington Street
Railway Company
2. Amending the Charter 3/31/1897 Vol. XII P. 820
of The Rockville and
Ellington Street
Railway Company, and
Changing Its Name to
The Rockville Gas and
Electric Company
37. The Rockville Gas and Electric Company
(formerly The Rockville Gas Light Company)
1. Incorporating The 7/2/1863 Vol. V P. 554
Rockville Gas Light
Company
2. Amending Charter of 3/28/1883 Vol. IX P. 762
The Rockville Gas
Light Company
3. Amending the Charter 4/12/1893 Vol. XI P. 231
of The Rockville Gas
Light Company
38. The Stafford Springs
Electric Light and Gas Company
1. Incorporating The 4/27/1887 Vol. X P. 713
Stafford Springs
Electric Light and Gas
Company
2. Extending the Time for 6/5/1889 Vol. X P. 1219
Organizing The
Stafford Springs
Electric Light and Gas
Company
3. Amending the Charter 7/11/1907 Vol. XV P. 359
of The Stafford
Springs Electric Light
and Gas Company
39. Willimantic Gas and Electric Light Company
1. Incorporating the 6/20/1899 Vol. XIII P. 550
Willimantic Gas and
Electric Light Company
2. Amending the Charter 6/4/1901 Vol. XIII P. 935
of the Willimantic Gas
and Electric Light
Company
3. Amending the Charter 4/3/1903 Vol. XIV P. 49
of the Willimantic Gas
and Electric Light
Company
4. Amending the Charter 8/13/1909 Vol. XV P. 1095
of the Willimantic Gas
and Electric Light
Company
5. Amending the Charter 5/9/1911 Vol. XVI P. 159
of the Willimantic Gas
and Electric Light
Company
40. Willimantic Electric Light Company
1. Incorporating the 4/15/1887 Vol. X P. 643
Willimantic Electric
Light Company
41. The Citizens' Gas Light Company of Willimantic
1. Incorporating The 6/30/1893 Vol. XI P. 1093
Citizens' Gas Light
Company of Willimantic
2. Validating the 3/1/1897 Vol. XII P. 675
Acceptance of an
Amendment to the
Charter of The
Citizens' Gas Light
Company of Willimantic
42. The Monroe Electric Light Company
1. Incorporating The 5/27/1921 Vol. XVIII P. 675
Monroe Electric Light
Company
43. The Connecticut Electric Service Company
1. Incorporating The 6/15/1925 Vol. XIX P. 834
Connecticut Electric
Service Company
2. Amending the Charter 6/20/1927 Vol. XX P. 377
of The Connecticut
Electric Service
Company
3. Amending the Charter 4/30/1929 Vol. XX P. 838
of The Connecticut
Electric Service
Company
44. The Connecticut Electric Securities Company
1. Incorporated on -- -- --
2/18/1929 under
General Laws.
45. The Northern Connecticut Power Company (1926)
(NO SPECIAL ACTS)
FORMED BY MERGER AND CONSOLIDATION EFFECTIVE ON 4/1/1926
46. The Northern Connecticut Power Company (1905)
1. Incorporating The 6/21/1905 Vol. XIV P. 827
Northern Connecticut
Power Company
47. Connecticut River Company
THE CHARTER RIGHTS OF THE FORMER CONNECTICUT RIVER COMPANY WERE
NOT ACQUIRED BY THE CONNECTICUT LIGHT AND POWER COMPANY AND ARE
NOT INCLUDED HEREIN, BUT REMAIN WITH THE NORTHERN CONNECTICUT
POWER COMPANY.
48. The Northern Connecticut Light and Power Company
(formerly The Enfield Gas Company, also
The Pynchon Land and Construction Company)
1. Incorporating The 4/22/1897 Vol. XII P. 900
Pynchon Land and
Construction Company
2. Extending the Time for 5/17/1899 Vol. XIII P. 187
the Organization of
The Pynchon Land and
Construction Company
3. Amending the Charter 6/17/1901 Vol. XIII P. 1223
of The Pynchon Land
and Construction
Company and Extending
the Time for Its
Organization
4. Extending the Time for 4/14/1903 Vol. XIV P. 51
the Organization of
The Pynchon Land and
Construction Company
5. Amending the Charter 5/5/1905 Vol. XIV P. 635
of The Pynchon Land
and Construction
Company and Changing
Its Name to The
Enfield Gas Company
6. Amending the Charter 5/15/1907 Vol. XV P. 149
of The Northern
Connecticut Light and
Power Company
7. Amending the Charter 7/26/1909 Vol. XV P. 966
of The Northern
Connecticut Light and
Power Company
8. Amending the Charter 5/20/1915 Vol. XVII P. 603
of The Northern
Connecticut Light and
Power Company
49. Windsor Locks Electric Lighting Company
1. Incorporating the 3/17/1886 Vol. X P. 293
Windsor Locks Electric
Lighting Company
2. Amending the Charter 2/12/1889 Vol. X P. 779
of the Windsor Locks
Electric Lighting
Company
3. Authorizing the 4/19/1893 Vol. XI P. 267
Windsor Locks Electric
Lighting Company to
Issue Bonds
4. Extending the Time for 4/24/1895 Vol. XII P. 203
the Issue of Bonds by
the Windsor Locks
Electric Lighting
Company
5. Amending the Charter 5/29/1901 Vol. XIII P. 903
of the Windsor Locks
Electric Lighting
Company
50. Enfield Electric Light and Power Company
1. Incorporating the 6/11/1889 Vol. X P. 1270
Enfield Electric Light
and Power Company
51. The Somers Water Company
(formerly The Somers Electric Company)
1. Incorporating The 6/18/1903 Vol. XIV P. 467
Somers Electric
Company
52. The Village Water Company of Suffield
1. Amending the Charter 5/17/1901 Vol. XIII P. 854
of The Village Water
Company of Suffield
2. Amending the Charter 5/11/1903 Vol. XIV P. 183
of The Village Water
Company of Suffield
53. The Suffield Electric Light Company
1. Incorporating The 5/3/1895 Vol. XII P. 238
Suffield Electric
Light Company
2. Authorizing The 5/31/1899 Vol. XIII P. 128
Suffield Electric
Light Company to
Increase Its Capital
Stock
54. The Talcott Brothers Company
1. Authorizing The 6/3/1925 Vol. XIX P. 915
Talcott Brothers
Company to Maintain
Transmission Lines For
the Purchase and Sale
of Electricity
(Property pertaining to the electric business only.)
ON 6/28/1936, SOLD ENTIRE ELECTRIC TRANSMISSION AND DISTRIBUTION
SYSTEMS TO THE CONNECTICUT LIGHT AND POWER COMPANY.
55. The Baltic Mills Company
(formerly The Baltic Power Company)
1. Incorporating The 6/21/1893 Vol. XI P. 833
Baltic Power Company
2. Amending the Charter 5/23/1895 Vol. XII P. 319
of The Baltic Power
Company
56. The Meriden, Southington
and Compounce Tramway Company
1. Incorporating The 4/7/1897 Vol. XII P. 683
Meriden, Southington
and Compounce Tramway
Company
2. Amending the Charter 6/16/1899 Vol. XIII P. 386
of The Meriden,
Southington and
Compounce Tramway
Company
3. Amending the Charter 6/17/1901 Vol. XIII P. 1217
of The Meriden,
Southington and
Compounce Tramway
Company
4. Amending the Charter 6/22/1903 Vol. XIV P. 471
of The Meriden,
Southington and
Compounce Tramway
Company
5. Amending the Charter 7/18/1905 Vol. XIV P. 1088
of The Meriden,
Southington and
Compounce Tramway
Company and Extending
the Time Within Which
Said Company May
Construct Its Tracks
57. The Waterbury and Pomperaug Valley Railway Company
(formerly The Woodbury and
Seymour Street Railway Company)
1. Incorporating The 5/13/1903 Vol. XIV P. 187
Woodbury and Seymour
Street Railway Company
58. The Woodbury and Waterbury Street Railway Company
1. Incorporating The 6/11/1903 Vol. XIV P. 315
Woodbury and Waterbury
Street Railway Company
59. The Litchfield Electric Light and Power Company
1. Incorporating The 3/24/1897 Vol. XII P. 799
Litchfield Electric
Light and Power
Company
2. Extending the Time for 3/7/1901 Vol. XIII P. 596
Filing the Certificate
of Organization of The
Litchfield Electric
Light and Power
Company
3. Amending the Charter 4/3/1903 Vol. XIV P. 51
of The Litchfield
Electric Light and
Power Company
4. Amending the Charter 4/19/1905 Vol. XIV P. 622
of The Litchfield
Electric Light and
Power Company
5. Extending the Time for 5/25/1905 Vol. XIV P. 700
the Acceptance of the
Amendment to the
Charter of The
Litchfield Electric
Light and Power
Company
6. Amending the Charter 5/3/1921 Vol. XVIII P. 525
of The Litchfield
Electric Light and
Power Company
7. Extending the Time 4/5/1923 Vol. XIX P. 80
Within Which The
Litchfield Electric
Light and Power
Company May Accept an
Amendment to Its
Charter, and
Validating Acts of
Said Corporation
8. Amending the Charter 4/9/1925 Vol. XIX P. 678
of The Litchfield
Electric Light and
Power Company
9. Amending the Charter 6/22/1927 Vol. XX P. 422
of The Litchfield
Electric Light and
Power Company
10. Authorizing The 5/12/1937 Vol. XXII P. 685
Litchfield Electric
Light and Power
Company to Exercise
Its Corporate Rights
in a Portion of the
Town of Harwinton
11. Validating Certain 4/12/1939 Vol. XXIII P. 86
Mergers or
Consolidations of or
Between The Litchfield
Electric Light and
Power Company and The
Washington Electric
Light and Power
Company and The
Litchfield Electric
Light and Power
Company and The
Ridgefield Electric
Light and Power
Company
12. Amending the Charter 4/12/1939 Vol. XXIII P. 95
of The Litchfield
Electric Light & Power
Company, Regarding The
Issuance of Mortgage
Bonds
13. Extending the Time 6/16/1939 Vol. XXIII P. 608
Within Which the
Litchfield Electric
Light & Power Company
May Accept an
Amendment to Its
Charter
14. Amending the Charter 5/9/1945 Vol. XXIV P. 552
of The Litchfield
Electric Light and
Power Company
60. The Washington Electric Light and Power Company
1. Incorporating The 6/13/1907 Vol. XV P. 237
Washington Electric
Light and Power
Company
61. The Ridgefield Electric Company
1. Incorporating The 4/24/1901 Vol. XIII P. 732
Ridgefield Electric
Company
2. Amending the Charter 5/14/1907 Vol. XV P. 153
of The Ridgefield
Electric Company
62. The Clinton Electric Light and Power Company
1. Incorporating The 5/14/1901 Vol. XIII P. 821
Clinton Electric Light
and Power Company
2. Amending the Charter 5/16/1917 Vol. XVII P. 1053
of The Clinton
Electric Light and
Power Company
3. Amending the Charter 4/15/1919 Vol. XVIII P. 110
of The Clinton
Electric Light and
Power Company
4. Amending the Charter 6/22/1927 Vol. XX P. 445
of The Clinton
Electric Light and
Power Company
5. Amending the Charter 5/8/1953 Vol. XXVI P. 864
of The Clinton
Electric Light and
Power Company
63. The Housatonic Public Service Company
(formerly The Derby Gas and
Electric Corporation of Connecticut)
1. Incorporating The 6/21/1935 Vol. XXII P. 351
Derby Gas and Electric
Corporation of
Connecticut
2. Amending the Charter 6/16/1937 Vol. XXII P. 892
of The Derby Gas and
Electric Corporation
of Connecticut and
Changing Its Name to
Derby Gas & Electric
Company
3. Amending the Charter 6/20/1939 Vol. XXIII P. 589
of The Derby Gas and
Electric Company of
Connecticut
4. Amending the Charter 4/30/1953 Vol. XXVI P. 859
of The Derby Gas and
Electric Corporation
of Connecticut and
Changing Its Name to
The Housatonic Public
Service Company
5. Amending the Charter 6/29/1955 Vol. XXVII P. 327
of The Housatonic
Public Service Company
6. Amending the Charter 4/12/1957 Vol. XXVIII P. 125
of The Housatonic
Public Service Company
7. Amending the Charter 4/25/1958 Vol. XXIX P. 32
of The Housatonic
Public Service Company
64. The Derby Gas and Electric Company
(formerly Derby Gas Company, also
The Birmingham Gas Light Company)
1. Incorporating the 5/20/1859 Vol. V P. 223
Birmingham Gas Light
Company
2. Amending the Charter 7/1/1869 Vol. VI P. 668
of the Birmingham Gas
Light Company
3. Amending the Charter 6/14/1871 Vol. VII P. 14
of Birmingham Gas
Light Company
4. Amending the Charter 3/16/1881 Vol. IX P. 49
of the Derby Gas
Company
5. Amending the Charter 2/19/1886 Vol. X P. 214
of the Derby Gas
Company
6. Amending the Charter 3/7/1889 Vol. X P. 818
of the Derby Gas
Company
7. Amending the Charter 5/18/1893 Vol. XI P. 533
of the Derby Gas
Company
8. Amending the Charter 3/23/1897 Vol. XII P. 778
of The Derby Gas
Company
9. Amending the Charter 4/2/1901 Vol. XIII P. 652
of the Derby Gas
Company
10. Amending the Charter 3/29/1905 Vol. XIV P. 545
of The Derby Gas
Company
11. Authorizing The Derby 6/6/1913 Vol. XVI P. 988
Gas Company to
Increase Its Capital
Stock
12. Amending the Charter 4/21/1915 Vol. XVII P. 181
of The Derby Gas
Company
13. Changing the Name of 3/9/1921 Vol. XVIII P. 349
The Derby Gas Company
to The Derby Gas and
Electric Company and
Authorizing Said
Company to Increase
Its Capital Stock
14. Amending the Charter 5/21/1925 Vol. XIX P. 768
of The Derby Gas and
Electric Company
15. Amending the Charter 7/22/1945 Vol. XXIV P. 635
of The Derby Gas and
Electric Company and
Authorizing It to
Increase Its Capital
Stock
16. Amending the Charter 5/24/1949 Vol. XXV P. 876
of The Derby Gas and
Electric Company
65. The Wallingford Gas Light Company
1. Incorporating The 4/14/1881 Vol. IX P. 246
Wallingford Gas Light
Company
2. Amending the Charter 3/14/1883 Vol. IX P. 725
of The Wallingford
Gas-Light Company
3. Validating Amendments 5/16/1889 Vol. X P. 1125
to the Charter of the
Wallingford Gas Light
Company
4. Amending the Charter 5/4/1903 Vol. XIV P. 134
of The Wallingford Gas
Light Company
5. Amending the Charter 7/31/1907 Vol. XV P. 576
of The Wallingford Gas
Light Company
6. Authorizing The 4/20/1921 Vol. XVIII P. 468
Wallingford Gas Light
Company to Issue
Mortgage Bonds
7. Amending the Charter 4/26/1923 Vol. XIX P. 150
of The Wallingford Gas
Light Company
8. Amending the Charter 5/24/1949 Vol. XXV P. 877
of The Wallingford Gas
Light Company
66. The Danbury and Bethel Gas and Electric Light
Company (formerly the Danbury Gas Light Company)
1. Incorporating the Passed Vol. III P. 566
Danbury Gas Light 1854
Company
2. Amending The Charter 4/13/1887 Vol. X P. 642
of The Danbury Gas
Light Company and
Changing Its Name to
The Danbury and Bethel
Gas and Electric Light
Company
3. Authorizing The 6/27/1907 Vol. XV P. 280
Danbury and Bethel Gas
and Electric Light
Company to Increase
Its Capital Stock and
to Issue Bonds
4. Amending the Charter 6/21/1911 Vol. XVI P. 276
of The Danbury and
Bethel Gas and
Electric Light Company
5. Amending the Charter 5/26/1913 Vol. XVI P. 881
of The Danbury and
Bethel Gas and
Electric Light Company
6. Authorizing The 5/16/1917 Vol. XVII P. 1096
Danbury and Bethel Gas
and Electric Light
Company to Increase
Its Capital Stock and
to Issue Bonds
7. Authorizing The 6/12/1929 Vol. XX P. 964
Danbury and Bethel Gas
and Electric Light
Company to Increase
Its Capital Stock to
Issue Bonds
8. Reimbursing The 4/2/1941 Vol. XXIII P. 731
Danbury and Bethel Gas
and Electric Light
Company for Money Paid
to the State in Error
9. Authorizing The 6/10/1941 Vol. XXIII P. 1143
Danbury and Bethel Gas
and Electric Light
Company to Purchase
the Franchises of The
Litchfield Electric
Light and Power
Company
10. Amending The Charter 6/24/1941 Vol. XXIII P. 1287
of the Danbury and
Bethel Gas and
Electric Light Company
11. Extending the Time for 3/15/1943 Vol. XXIV P. 24
Filing Certificates of
Acceptance of Charter
Amendments by Certain
Corporations
12. Amending The Charter 7/22/1945 Vol. XXIV P. 634
of the Danbury and
Bethel Gas and
Electric Light Company
13. Authorizing The 6/30/1947 Vol. XXV P. 381
Danbury and Bethel Gas
and Electric Light
Company to Increase
Its Capital Stock
67. The Danbury Power and Transportation Company
(formerly The Danbury and Bethel Traction Company)
1. Incorporating The 5/13/1919 Vol. XVIII P. 305
Danbury and Bethel
Traction Company
2. Extending the Time for 4/20/1921 Vol. XVIII P. 446
The Organization of
The Danbury and Bethel
Traction Company
3. Extending the Time for 4/3/1923 Vol. XIX P. 63
The Organization of
The Danbury and Bethel
Traction Company
68. Danbury and Bethel Street Railway Company
(formerly Danbury and
Bethel Horse Railway Company)
1. Incorporating the 3/31/1885 Vol. X P. 81
Danbury and Bethel
Horse Railway Company
2. Amending the Charter 3/11/1886 Vol. X P. 275
of the Danbury and
Bethel Horse Railway
Company
3. Legalizing Bonds 3/8/1887 Vol. X P. 452
Issued by the Danbury
and Bethel Horse
Railway Company
4. Amending the Charter 5/4/1887 Vol. X P. 718
of the Danbury and
Bethel Horse Railway
Company
5. Amending the Charter 6/5/1889 Vol. X P. 1219
of the Danbury and
Bethel Horse Railway
Company
6. Amending the Charter 6/21/1893 Vol. XI P. 830
of the Danbury and
Bethel Horse Railway
Company
7. Amending the Charter 5/3/1895 Vol. XII P. 236
of the Danbury and
Bethel Horse Railway
Company
8. Amending the Charter 4/30/1901 Vol. XII P. 748
of the Danbury and
Bethel Street Railway
Company
9. Amending the Charter 6/18/1903 Vol. XIV P. 433
of the Danbury and
Bethel Street Railway
Company
10. Extending the Time for 3/29/1905 Vol. XIV P. 551
the Acceptance by the
Danbury and Bethel
Street Railway Company
of the Amendment to
Its Charter
11. Amending the Charter 7/8/1909 Vol. XV P. 880
of the Danbury and
Bethel Street Railway
Company
12. Extending the Time for 9/19/1911 Vol. XVI P. 644
Constructing Lines of
the Danbury and Bethel
Street Railway Company
13. Amending the Charter 4/30/1913 Vol. XVI P. 777
of the Danbury and
Bethel Street Railway
Company
14. Extending the Time 5/10/1915 Vol. XVII P. 250
Within Which The
Danbury and Bethel
Street Railway Company
May Construct Its
Lines
15. Amending the Charter 5/16/1917 Vol. XVII P. 1031
of the Danbury and
Bethel Street Railway
Company
16. Amending the Charter 5/21/1919 Vol. XVIII P. 221
of the Danbury and
Bethel Street Railway
Company, Relating to
Fares
17. Amending the Charter 4/20/1921 Vol. XVIII P. 441
of the Danbury and
Bethel Street Railway
Company
69. The Bridgeport and
Danbury Electric Railway Company
1. Incorporating The 6/25/1907 Vol. XV P. 184
Bridgeport and Danbury
Electric Railway
Company
2. Amending the Charter 8/31/1911 Vol. XVI P. 595
of The Bridgeport and
Danbury Electric
Railway Company and
Extending the Time for
Constructing Its
Tracks
3. Reviving and Extending 6/6/1913 Vol. XVI P. 1150
the Rights of The
Bridgeport and Danbury
Electric Railway
Company
70. The Fletcher Electric Light Company, Inc.
1. Incorporating The 5/8/1986 1986 Conn. Acts 27 (Reg. Sess.)
Fletcher Electric Light
Company
C - THE HARTFORD ELECTRIC LIGHT COMPANY
1. Incorporating The 4/12/1881 Vol. IX P. 212
Hartford Electric
Light Company
2. Amending the Charter 4/24/1883 Vol. IX P. 820
of The Hartford
Electric Light Company
3. Amending the Charter 5/4/1893 Vol. XI P. 332
of The Hartford
Electric Light Company
4. Authorizing The 3/3/1897 Vol. XII P. 691
Hartford Electric
Light Company to
Purchase or Lease the
Franchises and
Property of The
Hartford Light and
Power Company, and
Amending the Charter
of The Hartford Light
and Power Company
5. Amending the Charter 3/10/1897 Vol. XII P. 697
of The Hartford
Electric Light Company
6. Amending the Charter 4/19/1899 Vol. XIII P. 157
of The Hartford
Electric Light Company
7. Amending the Charter 5/11/1905 Vol. XIV P. 644
of The Hartford
Electric Light Company
8. Amending the Charter 6/15/1905 Vol. XIV P. 763
of The Hartford
Electric Light Company
9. Amending the Charter 7/25/1907 Vol. XV P. 422
of The Hartford
Electric Light Company
10. Amending the Charter 4/6/1911 Vol. XVI P. 116
of The Hartford
Electric Light Company
11. Amending the Charter 3/8/1917 Vol. XVII P. 733
of The Hartford
Electric Light Company
12. Amending the Charter 3/21/1917 Vol. XVII P. 753
of The Hartford
Electric Light Company
13. Amending the Charter 4/10/1917 Vol. XVII P. 936
of The Hartford
Electric Light Company
14. Amending the Charter 4/20/1921 Vol. XVIII P. 473
of The Hartford
Electric Light Company
15. Amending the Charter 5/24/1923 Vol. XIX P. 248
of The Hartford
Electric Light Company
16. Amending the Charter 6/3/1927 Vol. XX P. 299
of The Hartford
Electric Light Company
17. Amending the Charter 6/18/1929 Vol. XX P. 1024
of The Hartford
Electric Light Company
18. Amending the Charter 5/10/1943 Vol. XXIV P. 196
of The Hartford
Electric Light Company
Concerning the
Purchase of Property
19. Amending the Charter 5/10/1943 Vol. XXIV P. 196
of The Hartford
Electric Light Company
Concerning Merger or
Consolidation
20. Amending the Charter 5/10/1943 Vol. XXIV P. 197
of The Hartford
Electric Light Company
Concerning the Sale or
Purchase of Power
21. Amending the Charter 5/28/1947 Vol. XXV P. 202
of The Hartford
Electric Light Company
22. Amending the Charter 5/28/1947 Vol. XXV P. 207
of The Hartford
Electric Light Company
23. Removing the 7/12/1949 Vol. XXV P. 1062
Limitation on Capital
Stock of The Hartford
Electric Light Company
24. Concerning Offering of 7/12/1949 Vol. XXV P. 1062
Stock of The Hartford
Electric Light Company
to Stockholders
25. Amending the Charter 5/28/1953 Vol. XXVI P. 991
of The Hartford
Electric Light Company
26. Amending the Charter 4/22/1959 Vol. XXIX P. 64
of The Hartford
Electric Light Company
D - PREDECESSORS OF THE HARTFORD
ELECTRIC LIGHT COMPANY
1. The East Hartland Improvement Company
1. Incorporated on -- -- --
8/7/1928 under General
Laws
2. Authorizing The East 4/18/1929 Vol. XX P. 660
Hartland Improvement
Company to Purchase
and Distribute
Electricity
3. Amending the Charter 4/9/1937 Vol. XXII P. 596
of The East Hartland
Improvement Company
2. The Hartford Light and Power Company
1. Incorporating The 4/25/1887 Vol. X P. 701
Hartford Light and
Power Company
2. Authorizing The 4/22/1897 Vol. XII P. 904
Hartford Light and
Power Company to Take
Up Its Outstanding
Bonds
3. The Simsbury Electric Company
1. Incorporating The 5/24/1899 Vol. XIII P. 74
Simsbury Electric
Company
2. Amending the Charter 4/6/1911 Vol. XVI P. 101
of The Simsbury
Electric Company
3. Amending the Charter 4/9/1925 Vol. XIX P. 666
of The Simsbury
Electric Company
4. Amending the Charter 5/25/1931 Vol. XXI P. 514
of The Simsbury
Electric Company
5. Amending the Charter 6/29/1939 Vol. XXIII P. 643
of The Simsbury
Electric Company
E - THE CONNECTICUT POWER COMPANY,
FORMERLY THE MARINE POWER COMPANY
1. Incorporating the 5/23/1899 Vol. XIII P. 266
Marine Power Company
2. Extending the Time of 3/28/1901 Vol. XIII P. 641
the Charter of the
Marine Power Company
3. Extending the Time for 6/17/1901 Vol. XIII P. 1188
Organizing the Marine
Power Company
4. Extending the Time for 5/4/1903 Vol. XIV P. 136
Organizing the Marine
Power Company
5. Amending the Charter 9/5/1911 Vol. XVI P. 597
of The Connecticut
Power Company
6. Amending the Charter 6/3/1927 Vol. XX P. 331
of The Connecticut
Power Company
7. Amending the Charter 7/26/1949 Vol. XXV P. 1139
of The Connecticut
Power Company to
Remove Requirement
That Capital Stock be
Offered to
Stockholders
8. Amending the Charter 7/26/1949 Vol. XXV P. 1139
of The Connecticut
Power Company to
Remove the Limitation
on Issuance of Capital
Stock
9. Amending the Charter 5/28/1953 Vol. XXVI P. 1008
of The Connecticut
Power Company
F - PREDECESSORS OF THE CONNECTICUT
POWER COMPANY
1. The Berkshire Power Company
1. Incorporated on -- -- --
12/9/1904 under
General Laws
2. Authorizing The 6/22/1905 Vol. XIV P. 865
Berkshire Power
Company to Erect a Dam
and Take Land Flooded
Thereby
2. The Bolton Electric Company
1. Incorporating The 4/23/1925 Vol. XIX P. 688
Bolton Electric
Company
3. The Eastern Connecticut Electric Power Company
1. Incorporating The 6/5/1903 Vol. XIV P. 297
Eastern Connecticut
Electric Power Company
2. Amending the Charter 7/13/1905 Vol. XIV 1047
of The Eastern
Connecticut Electric
Power Company
4. The Manchester Electric Company
1. Incorporating The 6/14/1893 Vol. XI P. 752
South Manchester
Light, Power, and
Tramway Company
2. Amending the Charter 4/26/1917 Vol. XVII P. 944
of The South
Manchester Light,
Power and Tramway
Company
3. Amending the Charter 5/3/1921 Vol. XVIII P. 524
of The Manchester
Electric Company
4. Authorizing The 4/19/1923 Vol. XIX P. 132
Manchester Electric
Company to Increase
Its Capital Stock and
to Issue Bonds
5. Authorizing The 6/12/1929 Vol. XX P. 935
Manchester Electric
Company to Increase
Its Capital Stock
5. The Manchester Light and Power Company
1. Incorporating The 3/10/1893 Vol. XI P. 44
Manchester Light and
Power Company
6. The Middletown Electric Light Company
1. Incorporating The 4/19/1887 Vol. X P. 666
Middletown Electric
Light Company
2. Amending the Charter 4/21/1909 Vol. XV P. 685
of The Middletown
Electric Light Company
3. Amending the Charter 4/25/1911 Vol. XVI P. 145
of The Middletown
Electric Light Company
7. The New Hartford Electric Company
1. Incorporating The New 6/17/1901 Vol. XIII P. 1228
Hartford Electric
Company
2. Amending the Charter 6/7/1927 Vol. XX P. 303
of The New Hartford
Electric Company
3. Validating the Filing 6/18/1929 Vol. XX P. 1020
of Acceptance of an
Act Amending the
Charter of The New
Hartford Electric
Company
4. Authorizing The New 6/18/1929 Vol. XX P. 1021
Hartford Electric
Company to Increase
Its Capital Stock
8. New London Gas and Electric Company
1. Incorporating the New 3/10/1897 Vol. XII P. 702
London Gas and
Electric Company
2. Amending the Charter 3/10/1897 Vol. XII P. 705
of the New London Gas
and Electric Company
3. Authorizing the New 3/2/1899 Vol. XIII P. 12
London Gas and
Electric Company to
Issue Additional Bonds
4. Amending the Charter 6/11/1901 Vol. XIII P. 1029
of the New London Gas
and Electric Company
5. Amending the Charter 5/12/1903 Vol. XIV P. 204
of the New London Gas
and Electric Company
6. Amending the Charter 4/11/1911 Vol. XVI P. 119
of the New London Gas
and Electric Company
9. The New London Gas Light Company
1. Incorporating The New Passed Vol. III P. 578
London Gas Light 1853
Company
10. The Norfolk Electric Light Company
1. Incorporating The 3/10/1897 Vol. XII P. 660
Norfolk Electric Light
Company
11. Oneco Manufacturing Company
1. Incorporating the 5/9/1893 Vol. XI P. 436
Oneco Manufacturing
Company
12. The Sharon Electric Light Company
1. Incorporating The 5/29/1889 Vol. X P. 1174
Sharon Electric Light
Company
2. Amending the Charter 5/18/1893 Vol. XI P. 516
of The Sharon Electric
Light Company
3. Amending the Charter 5/13/1897 Vol. XII P. 1026
of The Sharon Electric
Light Company
4. Amending the Charter 6/22/1905 Vol. XIV P. 863
of The Sharon Electric
Light Company
5. Amending the Charter 6/2/1913 Vol. XVI P. 907
of The Sharon Electric
Light Company
13. Stamford Electric Lighting Company
1. Incorporating Stamford 4/8/1881 Vol. IX P. 199
Electric Lighting
Company
14. The Stamford Gas and Electric Company
1. Incorporating The 6/14/1893 Vol. XI P. 717
Stamford Gas and
Electric Company
2. Authorizing The 4/23/1897 Vol. XII P. 922
Stamford Gas and
Electric Company to
Issue Additional Bonds
3. Amending the Charter 6/6/1913 Vol. XVI P. 1120
of The Stamford Gas
and Electric Company
4. Amending the Charter 3/19/1915 Vol. XVII P. 38
of The Stamford Gas
and Electric Company
5. Amending a Resolution 4/2/1919 Vol. XVIII P. 70
Incorporating The
Stamford Gas and
Electric Company
6. Authorizing The 6/3/1927 Vol. XX P. 297
Stamford Gas and
Electric Company to
Increase Its Capital
Stock
7. Amending the Charter 4/23/1929 Vol. XX P. 860
of The Stamford Gas
and Electric Company
15. The Stamford Gas Light Company
1. Incorporating The Passed Vol. III P. 586
Stamford Gas Light 1854
Company
2. Amending the Charter 6/12/1860 Vol. V P. 364
of The Stamford Gas-
Light Company
3. Amending the Charter 6/22/1865 Vol. V P. 684
of The Stamford Gas
Light Company
4. Authorizing The 5/27/1869 Vol. VI P. 575
Stamford Gas Light
Company to Increase
Its Capital Stock
5. To Increase the Number 3/24/1880 Vol. VIII P. 398
of Directors of The
Stamford Gas Company
6. Authorizing The 3/8/1881 Vol. IX P. 31
Stamford Gas Light
Company to Accept
Amendment to Its
Charter
7. Amending the Charter 4/2/1889 Vol. X P. 918
of The Stamford Gas-
Light Company
16. The Thomaston Electric Light Company
1. Incorporating The 4/10/1889 Vol. X P. 947
Thomaston Electric
Light Company
17. The Torrington Electric Light Company
1. Incorporating The 4/13/1887 Vol. X P. 625
Torrington Electric
Light Company
2. Amending the Charter 3/2/1899 Vol. XIII P. 13
of The Torrington
Electric Light Company
3. Amending the Charter 6/22/1905 Vol. XIV P. 856
of The Torrington
Electric Light Company
4. Authorizing The 5/1/1907 Vol. XV P. 111
Torrington Electric
Light Company to
Increase Its Capital
Stock
5. Amending the Charter 4/9/1915 Vol. XVII P. 131
of The Torrington
Electric Light Company
6. Amending the Charter 6/3/1921 Vol. XVIII P. 888
of The Torrington
Electric Light Company
7. Amending the Charter 3/9/1923 Vol. XIX P. 28
of The Torrington
Electric Light Company
8. Authorizing The 4/2/1925 Vol. XIX P. 632
Torrington Electric
Light Company to
Increase Its Capital
Stock
9. Amending the Charter 6/9/1933 Vol. XXI P. 1145
of The Torrington
Electric Light Company
18. The Union Electric Light and Power Company
1. Incorporating The 5/10/1901 Vol. XIII P. 794
Union Electric Light
and Power Company
2. Amending the Charter 3/27/1907 Vol. XV P. 50
of The Union Electric
Light and Power
Company
3. Amending the Charter 5/7/1907 Vol. XV P. 131
of The Union Electric
Light and Power
Company
4. Amending the Charter 5/20/1909 Vol. XV P. 762
of The Union Electric
Light and Power
Company
5. Amending the Charter 6/6/1913 Vol. XVI P. 999
of The Union Electric
Light and Power
Company
6. Amending the Charter 3/9/1923 Vol. XIX P. 28
of The Union Electric
Light and Power
Company
7. Authorizing The Union 6/7/1927 Vol. XX P. 308
Electric Light and
Power Company to
Increase Its Capital
Stock and Amending Its
Charter
8. Validating the Filing 6/12/1929 Vol. XX P. 936
of Acceptance of an
Act Amending the
Charter of The Union
Electric Light and
Power Company
G - CONNECTICUT RAILWAY AND LIGHTING
COMPANY, FORMERLY THE GAS SUPPLY COMPANY
1. Incorporating The Gas 7/2/1895 Vol. XII P. 586
Supply Company
2. Amending the Charter 3/2/1899 Vol. XIII P. 17
of The Gas Supply
Company
3. Amending the Charter 4/30/1901 Vol. XIII P. 752
of the Connecticut
Railway and Lighting
Company
4. Amending the Charter 3/18/1903 Vol. XIV P. 13
of the Connecticut
Railway and Lighting
Company
5. Amending the Charter 4/23/1903 Vol. XIV P. 103
of the Connecticut
Railway and Lighting
Company
6. Amending the Charter 4/29/1903 Vol. XIV P. 120
of the Connecticut
Railway and Lighting
Company
7. Amending the Charter 5/4/1903 Vol. XIV P. 135
of the Connecticut
Railway and Lighting
Company
8. Confirming the Right 5/15/1903 Vol. XIV P. 178
of the Connecticut
Railway and Lighting
Company to Construct
Its Railway Along
North Main Street in
Ansonia
9. Amending the Charter 3/16/1905 Vol. XIV P. 530
of the Connecticut
Railway and Lighting
Company
10. Amending the Charter 3/16/1905 Vol. XIV P. 530
of the Connecticut
Railway and Lighting
Company
11. Amending the Charter 5/2/1905 Vol. XIV P. 624
of the Connecticut
Railway and Lighting
Company
12. Amending the Charter 5/25/1905 Vol. XIV P. 703
of the Connecticut
Railway and Lighting
Company
13. Amending the Charter 7/31/1907 Vol. XV P. 571
of the Connecticut
Railway and Lighting
Company
14. Amending the Charter 8/10/1909 Vol. XV P. 1073
of the Connecticut
Railway and Lighting
Company
15. Amending the Charter 8/10/1909 Vol. XV P. 1073
of the Connecticut
Railway and Lighting
Company
16. Amending the Charter 8/13/1909 Vol. XV P. 1081
of the Connecticut
Railway and Lighting
Company
17. Extending the Time 8/13/1909 Vol. XV P. 1082
Within Which the
Connecticut Railway
and Lighting Company
May Construct Its Line
in Bridgeport and
Stratford
18. Amending the Charter 8/29/1911 Vol. XVI P. 496
of the Connecticut
Railway and Lighting
Company
19. Amending the Charter 6/5/1913 Vol. XVI P. 1224
of the Connecticut
Railway and Lighting
Company
20. Amending the Charter 5/14/1915 Vol. XVII P. 283
of the Connecticut
Railway and Lighting
Company
21. Amending the Charter 5/17/1917 Vol. XVII P. 1056
of the Connecticut
Railway and Lighting
Company
22. Amending the Charter 5/16/1917 Vol. XVII P. 1093
of the Connecticut
Railway and Lighting
Company
23. Amending the Charter 5/1/1919 Vol. XVIII P. 137
of the Connecticut
Railway and Lighting
Company
24. Amending the Charter 5/5/1927 Vol. XX P. 390
of the Connecticut
Railway and Lighting
Company
H - PREDECESSORS OF CONNECTICUT
RAILWAY AND LIGHTING COMPANY
1. The Norwalk and South Norwalk Electric Light
Company
1. Incorporating The 4/20/1887 Vol. X P. 682
Norwalk and South
Norwalk Electric Light
Company
2. The Norwalk Gas Light Company
1. Incorporating The Passed Vol. III P. 580
Norwalk Gas Light 1856
Company
2. Amending the Charter 5/30/1866 Vol. VI P. 11
of The Norwalk Gas
Light Company
3. Amending the Charter 4/7/1887 Vol. X P. 613
of The Norwalk Gas
Light Company
3. The Greenwich Gas and Electric Lighting Company
1. Incorporating The 3/13/1885 Vol. X P. 34
Greenwich Gas and
Electric Lighting
Company
2. Validating the 4/20/1887 Vol. X P. 695
Organization of The
Greenwich Gas and
Electric Lighting
Company
3. Amending the Charter 5/23/1889 Vol. X P. 1117
of The Greenwich Gas
and Electric Lighting
Company
4. Amending the Charter 5/31/1893 Vol. XI P. 604
of The Greenwich Gas
and Electric Lighting
Company
5. Authorizing The 4/24/1895 Vol. XII P. 201
Greenwich Gas and
Electric Lighting
Company to Maintain a
Wharf and Construct
Sea-walls
4. Naugatuck Electric Light Company
1. Incorporating the 4/16/1887 Vol. X P. 650
Naugatuck Electric
Light Company
2. Validating the Charter 5/25/1893 Vol. XI P. 560
of the Naugatuck
Electric Light Company
3. Authorizing the 5/25/1893 Vol. XI P. 561
Naugatuck Electric
Light Company to Issue
Bonds
4. Validating the Charter 3/26/1895 Vol. XII P. 67
and Amendments Thereto
of the Naugatuck
Electric Light Company
5. Authorizing the 3/2/1899 Vol. XIII P. 17
Naugatuck Electric
Light Company to Issue
Bonds
5. Central Railway and Electric Company
(formerly The New Britain Tramway Company)
1. Incorporating The New 2/24/1886 Vol. X P. 233
Britain Tramway
Company
2. Amending the Charter 5/4/1887 Vol. X P. 721
of The New Britain
Tramway Company
3. Amending the Charter 5/18/1887 Vol. X P. 745
of The New Britain
Tramway Company
4. Amending the Charter 6/15/1893 Vol. XI P. 774
of The New Britain
Tramway Company
5. Amending the Charter 6/28/1893 Vol. XI P. 893
of the Central Railway
and Electric Company
6. Amending the Charter 3/1/1897 Vol. XII P. 683
of the Central Railway
and Electric Company
6. New Britain Electric Light Company
(formerly The New Britain Schuyler
Electric Light Company)
1. Incorporating The New 4/27/1887 Vol. X P. 708
Britain Schuyler
Electric Light Company
2. Changing the Name of 4/2/1889 Vol. X P. 906
The New Britain
Schuyler Electric
Light Company
7. Plainville Electric Light and Power Company
1. Incorporating the 5/31/1893 Vol. XI P. 602
Plainville Electric
Light and Power
Company
8. The Newington Tramway Company
1. Incorporating The 6/30/1893 Vol. XI P. 1035
Newington Tramway
Company
2. Amending the Charter 3/1/1897 Vol. XII P. 686
of The Newington
Tramway Company
9. The Norwalk Street Railway Company
(formerly the Norwalk Horse Railroad Company)
1. Incorporating the 6/28/1862 Vol. V P. 487
Norwalk Horse Railroad
Company
2. Amending the Charter 6/24/1864 Vol. V P. 586
of the Norwalk Horse
Railroad Company
3. Authorizing the 6/25/1869 Vol. VI P. 656
Norwalk Horse Railroad
Company to increase
its Capital Stock
4. Amending the Charter 6/21/1870 Vol. VI P. 828
of the Norwalk Horse
Railroad Company
5. Amending the Charter 7/27/1871 Vol. VII P. 146
of the Norwalk Horse
Railroad Company
6. Amending the Charter 7/30/1872 Vol. VII P. 380
of the Norwalk Horse
Railway Company
7. Amending the Charter 3/30/1886 Vol. X P. 330
of the Norwalk Horse
Railroad Company
8. Amending the Charter 6/30/1893 Vol. XI P. 1045
of the Norwalk Horse
Railroad Company
9. Amending the Charter 6/19/1895 Vol. XII P. 426
of The Norwalk Street
Railway Company
10. Amending the Charters 6/25/1895 Vol. XII P. 474
of The Norwalk Street
Railway Company and
The Norwalk Tramway
Company
11. Amending the Charter 5/25/1899 Vol. XIII P. 207
of The Norwalk Street
Railway Company
10. Bridgeport Traction Company
1. Formed by -- -- --
Consolidation of
Bridgeport Railway
Company, The
Bridgeport Horse
Railroad Company and
East End Railway
Company under General
Laws on 7/20/1893
2. Amending the Charter 5/18/1897 Vol. XII P. 1036
of the Bridgeport
Traction Company
3. Amending the Charter 6/1/1899 Vol. XIII P. 286
of the Bridgeport
Traction Company
4. Amending the Charter 4/9/1901 Vol. XIII P. 678
of the Bridgeport
Traction Company
11. Bridgeport Railway Company
1. Incorporating the 6/28/1893 Vol. XI P. 872
Bridgeport Railway
Company
12. The Bridgeport Horse Railroad Company
1. Incorporating The 6/30/1864 Vol. V P. 607
Bridgeport Horse
Railroad Company
2. Amending the Charter 6/6/1866 Vol. VI P. 28
of the Bridgeport
Horse Railroad Company
3. Amending the Charter 2/24/1886 Vol. X P. 233
of the Bridgeport
Horse Railroad Company
4. Amending the Charter 5/16/1889 Vol. X P. 1118
of the Bridgeport
Horse Railroad Company
5. Authorizing the 5/25/1893 Vol. XI P. 575
Bridgeport Horse
Railroad Company to
Cross Steam Railroad
at Grade
6. Amending the Charter 6/28/1893 Vol. XI P. 879
of the Bridgeport
Horse Railroad Company
7. Amending the Charter 7/1/1893 Vol. XI P. 975
of the Bridgeport
Horse Railroad Company
13. East End Railway Company
(formerly The Bridgeport and
West Stratford Horse Railroad Company)
1. Incorporating The 4/22/1885 Vol. X P. 168
Bridgeport and West
Stratford Horse
Railroad Company
2. Amending the Charter 3/2/1886 Vol. X P. 247
of the Bridgeport and
West Stratford Horse
Railroad Company
3. Amending the Charter 5/9/1889 Vol. X P. 1098
of the Bridgeport and
West Stratford Horse
Railroad Company and
Changing Its Name
4. Amending the Charter 5/5/1893 Vol. XI P. 422
of The East End
Railway Company
5. Amending the Charter 6/28/1893 Vol. XI P. 878
of The East End
Railway Company
14. Milford Street Railway Company
1. Incorporating the 6/13/1895 Vol. XII P. 387
Milford Street Railway
Company
2. Amending the Charter 3/24/1897 Vol. XII P. 788
of the Milford Street
Railway Company
3. Amending the Charter 5/19/1899 Vol. XIII P. 298
of the Milford Street
Railway Company
4. Amending the Charter 4/9/1901 Vol. XIII P. 678
of the Milford Street
Railway Company
15. Southington and Plantsville Tramway Company
1. Incorporating the 4/16/1887 Vol. X P. 655
Southington and
Plantsville Tramway
Company
2. Amending the Charter 3/12/1889 Vol. X P. 827
of the Southington and
Plantsville Tramway
Company
3. Abating Taxes of The 5/9/1895 Vol. XII P. 290
Southington and
Plantsville Tramway
Company
4. Amending the Charter 4/7/1897 Vol. XII P. 862
of the Southington and
Plantsville Tramway
Company
16. The Waterbury Traction Company
(formerly Waterbury Horse Railroad Company)
1. Incorporating the 3/18/1884 Vol. IX P. 941
Waterbury Horse
Railroad Company
2. Amending the Charter 2/24/1886 Vol. X P. 242
of the Waterbury Horse
Railroad Company
3. Amending the Charter 6/14/1893 Vol. XI P. 724
and Changing the Name
of the Waterbury Horse
Railroad Company
4. Amending the Charter 6/27/1893 Vol. XI P. 868
of The Waterbury
Traction Company
5. Amending the Charter 6/20/1895 Vol. XII P. 390
of The Waterbury
Traction Company
6. Amending the Charter 5/12/1897 Vol. XII P. 1016
of The Waterbury
Traction Company
17. The Connecticut Electric Company
(formerly The Connecticut District
Telegraph and Electric Company)
1. Incorporated on -- -- --
11/26/1883 under
General Laws
2. Incorporating The 4/13/1887 Vol. X P. 620
Connecticut Electric
Company
18. The Norwalk Tramway Company
1. Incorporating The 5/6/1889 Vol. X P. 1067
Norwalk Tramway
Company
2. Amending the Charter 6/29/1893 Vol. XI P. 971
of the Norwalk Tramway
Company
3. Amending the Charters 6/25/1895 Vol. XII P. 474
of The Norwalk Street
Railway Company and
The Norwalk Tramway
Company
4. Amending the Charter 7/3/1895 Vol. XII P. 600
of the Norwalk Tramway
Company
5. Amending the Charter 6/2/1897 Vol. XII P. 1175
of the Norwalk Tramway
Company
6. Amending the Charter 6/20/1899 Vol. XIII P. 480
of The Norwalk Tramway
Company
7. Amending the Charter 4/24/1901 Vol. XIII P. 725
of The Norwalk Tramway
Company
19. The Shelton Street Railway Company
1. Incorporating The 6/21/1893 Vol. XI P. 830
Shelton Street Railway
Company
2. Extending the Time for 5/2/1895 Vol. XII P. 285
the Organization of
The Shelton Street
Railway Company, and
for the Construction
of Its Railway
3. Amending the Charter 3/1/1897 Vol. XII P. 684
of The Shelton Street
Railway Company
4. Amending the Charter 5/23/1899 Vol. XIII P. 277
of the Shelton Street
Railway Company
5. Amending the Charter 4/9/1901 Vol. XIII P. 678
of The Shelton Street
Railway Company
6. Granting The Shelton 5/14/1901 Vol. XIII P. 824
Street Railway Company
the Right to Build and
Maintain a Dam Across
Far Mill River
20. The Westport and Saugatuck Street Railway Company
(formerly The Westport and Saugatuck
Horse Railroad Company)
1. Authorizing and 6/8/1876 Vol. VIII P. 7
empowering the
Westport and Saugatuck
Horse Railroad Company
to construct, operate,
and maintain a Horse
Railroad
2. Amending the Charter 7/6/1895 Vol. XII P. 622
of The Westport and
Saugatuck Horse
Railroad Company
3. Amending the Charter 7/6/1895 Vol. XII P. 621
of The Westport and
Saugatuck Street
Railway Company
4. Amending the Charter 6/2/1897 Vol. XII P. 1176
of the Westport and
Saugatuck Street
Railway Company
5. Amending the Charter 6/14/1899 Vol. XIII P. 350
of the Westport and
Saugatuck Street
Railway Company
6. Amending the Charter 4/9/1901 Vol. XIII P. 678
of The Westport and
Saugatuck Street
Railway Company
21. Derby Street Railway Company
(formerly The Derby Horse Railway Company)
1. Incorporating The 3/19/1885 Vol. X P. 55
Derby Horse Railway
Company
2. Amending the Charter 3/16/1887 Vol. X P. 501
of The Derby Horse
Railway Company
3. Amending the Charter 6/21/1889 Vol. X P. 1331
of the Derby Horse
Railway Company
4. Amending the Charter 6/30/1893 Vol. XI P. 1061
of The Derby Street
Railway Company
5. Extending the Time for 3/31/1897 Vol. XII P. 824
the Construction of
the Road of The Derby
Street Railway Company
6. Amending the Charter 3/15/1899 Vol. XIII P. 36
of the Derby Street
Railway Company
7. Amending the Charter 4/11/1901 Vol. XIII P. 687
of the Derby Street
Railway Company and
Extending Time for
Construction of Tracks
22. Derby and Ansonia Street Railway Company
(formerly The Birmingham and
Ansonia Horse Railroad Company)
1. Incorporating the 6/27/1876 Vol. VIII P. 49
Birmingham and Ansonia
Horse Railroad Company
2. Authorizing The 4/5/1887 Vol. X P. 590
Birmingham and Ansonia
Horse Railroad Company
to Issue Bonds
3. Amending the Charter 6/30/1893 Vol. XI P. 1058
and Changing the Name
of The Birmingham and
Ansonia Horse Railroad
Company
23. Thomaston and Watertown Electric Railway Company
1. Incorporating the 4/30/1901 Vol. XIII P. 741
Thomaston and
Watertown Electric
Railway Company
2. Extending the Time for 6/3/1903 Vol. XIV P. 280
Organizing The
Norwalk, Bridgeport,
and Bethel Traction
Company and the
Thomaston and
Watertown Electric
Railway Company
3. Extending the Time for 4/19/1905 Vol. XIV P. 612
Organizing The
Thomaston and
Watertown Electric
Railway Company and
for Building Its Lines
4. Amending the Charter 7/31/1907 Vol. XV P. 577
of The Thomaston and
Watertown Electric
Railway Company
24. The Thomaston Tramway Company
1. Incorporating The 7/18/1905 Vol. XIV P. 1077
Thomaston Tramway
Company
2. Amending the Charter 7/17/1907 Vol. XV P. 399
of The Thomaston
Tramway Company
25. Cheshire Street Railway Company
1. Incorporating the 6/17/1901 Vol. XIII P. 1181
Cheshire Street
Railway Company
2. Amending the Charter 4/23/1903 Vol. XIV P. 104
of the Cheshire Street
Railway Company
3. Extending the Time 3/16/1905 Vol. XIV P. 530
Within Which the
Cheshire Street
Railway Company May
Build Its Lines of
Street Railway
4. Extending the Time 7/25/1907 Vol. XV P. 404
Within Which the
Cheshire Street
Railway Company May
Construct Its Tracks
26. The Naugatuck Valley Electric Railway Company
1. Incorporating The 3/25/1903 Vol. XIV P. 26
Naugatuck Valley
Electric Railway
Company
2. Extending the Time 4/17/1907 Vol. XV P. 92
Within Which The
Naugatuck Valley
Electric Railway
Company May Construct
Its Tracks
27. The Meriden, Southington
and Compounce Tramway Company
1. Incorporating The 4/7/1897 Vol. XII P. 863
Meriden, Southington,
and Compounce Tramway
Company
2. Amending the Charter 6/6/1899 Vol. XIII P. 386
of The Meriden,
Southington, and
Compounce Tramway
Company
3. Amending the Charter 6/17/1901 Vol. XIII P. 1217
of The Meriden,
Southington, and
Compounce Tramway
Company
4. Amending the Charter 6/22/1903 Vol. XIV P. 471
of The Meriden,
Southington, and
Compounce Tramway
Company
5. Amending the Charter 7/18/1905 Vol. XIV P. 1088
of The Meriden,
Southington, and
Compounce Tramway
Company and Extending
the Time Within Which
Said Company May
Construct Its Tracks
Exhibit 3.2.2
BY-LAWS
THE CONNECTICUT LIGHT AND POWER COMPANY
Amended
January 18, 1961
April 15, 1964
July 1, 1966
March 1, 1982
THE CONNECTICUT LIGHT AND POWER COMPANY
BY-LAWS
ARTICLE I
MEETINGS OF SHAREHOLDERS
Section 1. Meetings of the shareholders may be held at any place in
the State of Connecticut fixed by the Board of Directors.
Section 2. The Annual Meeting of Shareholders for the election of
Directors and the transaction of such other business as may properly be
brought before the meeting shall be held in March, April, May, June or July
in each year on the day and at the hour designated by the Board of
Directors.
Section 3. Notice of all meetings of shareholders, stating the day,
hour and place thereof, shall be given by a written or printed notice,
delivered or sent by mail, at least ten days but not more than fifty days
prior to the meeting, to each shareholder of record on the books of the
Company and entitled to vote at such meeting, at the address appearing on
such books, unless such shareholder shall waive notice or be in attendance
at the meeting. Notice of a special meeting of shareholders shall state
also the general purpose or purposes of such meeting and no business other
than that of which notice has been so given shall be transacted at such
meeting.
Section 4. At all meetings of shareholders each share of stock
entitled to vote, and represented in person or by proxy, shall be entitled
to one vote.
Section 5. The Board of Directors may fix a date as the record date
for the purpose of determining shareholders entitled to notice of and to
vote at any meeting of shareholders or any adjournment thereof, such date
in any case to be not earlier than the date such action is taken by the
Board of Directors and not more than seventy days and not less than ten
days immediately preceding the date of such meeting. In such case only
such shareholders or their legal representatives as shall be shareholders
on the record date so fixed shall be entitled to such notice and to vote at
such meeting or any adjournment thereof, notwithstanding the transfer of
any shares of stock on the books of the Company after any such record date
so fixed.
ARTICLE II
DIRECTORS
Section 1. The business, property and affairs of the Company shall be
managed by a Board of not less than three nor more than sixteen Directors.
Within these limits, the number of positions on the Board of Directors for
any year shall be the number fixed by resolution of the shareholders or of
the Board of Directors, or, in the absence of such a resolution, shall be
the number of Directors elected at the preceding Annual Meeting of
Shareholders. The Directors so elected shall continue in office until
their successors have been elected and qualified.
Section 2. The Board of Directors shall have power to fill vacancies
that may occur in the Board, or any other office, by death, resignation or
otherwise, by a majority vote of the remaining members of the Board, and
the person so chosen shall hold the office until the next Annual Meeting
and until his successor shall be elected and qualified.
Section 3. The Board of Directors shall have power to employ such and
so many agents and factors or employees as the interests of the Company may
require, and to fix the compensation and define the duties of all of the
officers, agents, factors and employees of the Company. All the officers,
agents, factors and employees of the Company shall be subject to the order
of said Board, shall hold their offices at the pleasure of said Board, and
may be removed at any time by said Board at its discretion.
Section 4. The Board of Directors shall have power to fix from time
to time the compensation of the Directors and the method of payment
thereof.
ARTICLE III
MEETINGS OF DIRECTORS
Section 1. A regular meeting of the Board of Directors shall, if a
quorum is present, be held without notice immediately after the adjournment
of the Annual Meeting of stockholders, or as soon thereafter as convenient,
for the purpose of organization. At such organization meeting or at any
subsequent meeting, the Directors shall elect the officers of the Company
provided for in Article IV of these By-Laws, who shall hold their offices
(subject to the provisions of Section 3, Article II, of these By-Laws) for
the ensuing year, or until the next such organization meeting and until
their successors are chosen and qualified.
Section 2. All other regular meetings of the Board of Directors may
be held at such time and place within or without the State of Connecticut
as said Board may determine.
Section 3. Special meetings of the Board of Directors may be held at
any place within or without the State of Connecticut upon call by the
Chairman or, if the Chairman shall be absent or unable to perform the
duties of his office, the President, or by the Secretary upon written
request of five or more Directors.
Section 4. Oral, written or printed notice of a special meeting of
the Board of Directors shall be given to each Director personally, or by
telephone, mail or telegraph, at least two days prior to the meeting unless
each Director shall, in writing or by telegraph, waive such notice or be in
attendance at such meeting.
Section 5. One-third of the directorships as fixed in accordance with
Article II, Section 1 of these By-Laws shall constitute a quorum, except
that no quorum shall consist of less than two Directors. A less number
than a quorum may adjourn from time to time until a quorum is present. In
the event of such an adjournment, notice of the adjourned meeting shall be
given to all Directors.
Section 6. Except as otherwise provided by these By-Laws, all
questions shall be decided by vote of a majority of the Directors present
at any meeting of the Board at which a quorum is present. The yeas and
nays on any question shall be taken and recorded on the minutes at the
request of any Directors.
ARTICLE IV
OFFICERS
Section 1. The officers of this Company shall consist of a President,
one or more Vice Presidents, a Secretary, a Treasurer, and, at the
discretion of the Board of Directors, a Chairman, and the Board of
Directors may elect one or more Assistant Secretaries, one or more
Assistant Treasurers, and such other officers as they may deem advisable.
The President and Chairman shall be Directors.
Section 2. The same person shall not hold the offices of both
President and Secretary and no officer shall execute, acknowledge or verify
any instrument in more than one capacity.
Section 3. The officers of the Company shall be elected by the Board
of Directors as provided in Section 1, Article III of these By-Laws.
ARTICLE V
CHAIRMAN AND PRESIDENT
Section 1. The Chairman, if such office shall be filled by the
Directors, shall, when present, preside at all meetings of said Board and
of the stockholders. He shall have such other authority and shall perform
such additional duties as may be assigned to him from time to time by the
Board of Directors.
Section 2. The President shall be the chief executive officer of the
Company and shall be responsible for the general supervision, direction and
control of the business and affairs of the Company. If the Chairman shall
be absent or unable to perform the duties of his office, or if the office
of Chairman shall not have been filled by the Directors, the President
shall preside at meetings of the Board of Directors and of the
stockholders. He shall have such other authority and shall perform such
additional duties as may be assigned to him from time to time by the Board
of Directors.
ARTICLE VI
VICE PRESIDENTS
Section 1. The Vice Presidents shall have such powers and duties as
may be assigned to them from time to time by the Board of Directors or the
President. One of such Vice Presidents may be designated by said Board as
Executive Vice President and, if so designated, shall exercise the powers
and perform the duties of the President in the absence of the President or
if the President is unable to perform the duties of his office. The Board
of Directors may also designate one or more of such Vice Presidents as
Senior Vice Presidents.
ARTICLE VII
SECRETARY
Section 1. The Secretary shall keep the minutes of all meetings of
the stockholders and of the Board of Directors. He shall give notice of
all meetings of the stockholders and of said Board. He shall record all
votes taken at such meetings. He shall be custodian of all contracts,
leases, assignments, deeds and other instruments in writing and documents
not properly belonging to the office of the Treasurer, and shall perform
such additional duties as may be assigned to him from time to time by the
Board of Directors, the Chairman, the President or by law.
Section 2. He shall have the custody of the Corporate Seal of the
Company and shall affix the same to all instruments requiring a seal except
as otherwise provided in these By-Laws.
ARTICLE VIII
ASSISTANT SECRETARY
Section 1. An Assistant Secretary shall perform the duties of the
Secretary if the Secretary shall be absent or unable to perform the duties
of his office. An Assistant Secretary shall perform such additional duties
as may be assigned to him from time to time by the Board of Directors, the
Chairman, the President or the Secretary.
ARTICLE IX
TREASURER
Section 1. The Treasurer shall have charge of all receipts and
disbursements of the Company, and shall be the custodian of the Company's
funds. He shall have full authority to receive and give receipts for all
moneys due and payable to the Company from any source whatever, and give
full discharge for the same, and to endorse checks, drafts and warrants in
its name and on its behalf. He shall sign all checks, notes, drafts and
similar instruments, except as otherwise provided for by the Board of
Directors.
Section 2. He shall perform such additional duties as may be assigned
to him from time to time by the Board of Directors, the Chairman, the
President or by law.
ARTICLE X
ASSISTANT TREASURER
Section 1. An Assistant Treasurer shall perform the duties of the
Treasurer if the Treasurer shall be absent or unable to perform the duties
of his office. An Assistant Treasurer shall perform such additional duties
as may be assigned to him from time to time by the Board of Directors, the
Chairman, the President or the Treasurer.
ARTICLE XI
COMMITTEES
Section 1. The Board of Directors, by the affirmative vote of
Directors holding a majority of the number of directorships (as fixed for
the current year in accordance with Article II, Section 1, of these
By-Laws), may appoint such committees as it may deem proper, and may
delegate to such committees any of the powers possessed by said Board. A
majority of any committee shall have the power to act. Committees shall
keep full records of their proceedings, and shall report the same to the
next regular meeting of said Board, or when called upon by said Board.
ARTICLE XII
INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHER PERSONS
Section 1. The Board of Directors may, as and to the extent permitted
by law, indemnify and reimburse each Director, officer or employee of this
Company, and any person engaged to perform services for this Company as an
independent contractor, and the heirs, executors or administrators of any
such Director, officer, employee or independent contractor, for expenses,
including attorneys' fees, and such amount of any judgment, money decree,
fine, penalty or settlement for which he may become liable as the Board of
Directors deems reasonable, incurred by him in connection with the defense
or reasonable settlement of any action, suit or proceeding in which he is
made a party by reason of his being, or having been, a Director, officer or
employee of this Company, or such an independent contractor.
ARTICLE XIII
STOCK CERTIFICATES
Section 1. All stock certificates, Common and Preferred, may bear the
facsimile signatures of the President or a Vice President and the Treasurer
or an Assistant Treasurer and a facsimile seal of the Company, or may be
signed by the President or a Vice President and the Treasurer or an
Assistant Treasurer or the Secretary or an Assistant Secretary, and may be
sealed by any one of such officers.
ARTICLE XIV
CORPORATE SEAL
Section 1. The Corporate Seal of the Company shall be circular in
form, with the name of the Company inscribed thereon.
ARTICLE XV
AMENDMENTS
Section 1. These By-Laws may be altered, amended, added to or
repealed at any meeting of stockholders, or of the Board of Directors,
provided the notice of such meeting states that such action is to be
proposed. Such action by the stockholders shall require the affirmative
vote of the holders of a majority of the voting power of shares entitled to
vote thereon. Such action by the Board of Directors shall require the
affirmative vote of Directors holding a majority of the number of
directorships (as fixed for the current year in accordance with Article II,
Section 1 of these By-Laws). This Section 1 of Article XV may be amended
only at a meeting of stockholders.
Exhibit 3.3.1
Public Service Company of New Hampshire
Organized Under the Laws of New Hampshire
August, 1926
ARTICLES OF INCORPORATION
As in effect May 16, 1991
AMENDED ARTICLES OF INCORPORATION OF
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
ARTICLE I
NAME OF CORPORATION
The name of this corporation shall be PUBLIC SERVICE COMPANY OF NEW
HAMPSHIRE.
ARTICLE II
CORPORATE POWERS
The objects for which this corporation is established are to carry on
the business of an electric utility within the state of New Hampshire or
elsewhere, and to transact any and all lawful business for which
corporations may be incorporated under New Hampshire Revised Statutes
Annotated Chapter 293-A.
ARTICLE III
PRINCIPAL PLACE OF BUSINESS
The principal place of business of the corporation shall be located in
Manchester in the County of Hillsborough and State of New Hampshire, but
the corporation may carry on any portion of its business at other places,
either within or without the State of New Hampshire.
ARTICLE IV
AMOUNT AND CLASSES OF THE AUTHORIZED STOCK
1. The capital stock of the corporation shall consist of two classes
designated, respectively, "Preferred Stock" and "Common Stock." The total
number of authorized shares shall be twenty-five million (25,000,000)
shares of Preferred Stock, $25.00 par value, and one hundred million
(100,000,000) shares of Common Stock, Sl par value.
2. No nonvoting equity securities of the corporation shall be issued;
this provision is included in these Amended and Restated Articles of
Incorporation in compliance with Section 1123 of the United States Federal
Bankruptcy Code, 11 U.S.C. Section 1123, and shall have no further force
and effect beyond that required by such Section and for so long as such
Section is in effect and applicable to the corporation.
ARTICLE V
ISSUANCE AND TERMS OF THE PREFERRED STOCK
lA. Shares of the Preferred Stock, authorized but not issued, may be
issued from time to time in one or more series, in such amounts, on such
terms, for such consideration and to such persons as may be determined by
the Board of Directors at the time of its vote to issue such series, in its
discretion; provided that all shares of the Preferred Stock shall be
identical, except in the case of the following relative rights and
preferences, as to which there may be variations between series of the
Preferred Stock: (a) the rate of dividend, including the extent to which
all or any portion of any dividend may be paid in additional shares of
Preferred Stock in lieu of cash; (b) the prices, terms and conditions of
redemption; (c) the amount payable upon shares in event of voluntary
liquidation; (d) sinking fund provisions, if any, for the redemption or
purchase of shares; and (e) the terms and conditions, if any, on which
shares may be converted.
lB. In order for the Board of Directors to establish a series of the
Preferred Stock, the Board of Directors shall adopt a resolution setting
forth the number of shares and designation of such series of the Preferred
Stock and fixing and determining the relative rights and preferences of
such series; and upon the filing by the Secretary of State of the State of
New Hampshire of the statement required by the New Hampshire Business
Corporation Act, the resolution shall become effective and shall constitute
an amendment of these Articles of Incorporation.
DIVIDENDS
2A. The holders of any series of the Preferred Stock shall receive,
when declared by the Board of Directors, preferential dividends at such
rate and payable on such dividend payment dates in each year as said Board
may determine at the time of its vote to issue said series, such dividends
to be payable out of funds legally available therefor to the Preferred
Stockholders of record on such dates as may be fixed by said Board,
provided, however, that dividends shall not be declared and set apart for
payment, or paid, on the Preferred Stock of any one series, for any
dividend period, unless like proportionate dividends, ratably in proportion
to the respective dividend rates, have been or are contemporaneously
declared and set apart for payment, or paid, on the Preferred Stock of all
series for all dividend periods terminating on the same or an earlier date.
2B. Dividends on the shares of each series of the Preferred Stock
shall be cumulative from the date of original issue of such series or from
such other date as the Board of Directors may determine at the time of its
vote to issue the shares of such series .
2C. Unless full cumulative dividends to the last preceding dividend
payment date shall have been declared and paid or set apart for payment on
all outstanding shares of the Preferred Stock, all mandatory redemption
payments then due in respect of all outstanding shares of the Preferred
Stock shall have been made or funds for the payment thereof set apart and
no event of default (as hereinafter defined) has occurred and is
continuing, no junior stock payment (as hereinafter defined) shall be paid
on any junior stock. The term "junior stock" as used in these Articles
means Common Stock and any other stock of the corporation subordinate to
the Preferred Stock in respect of dividends or payment in case of
liquidation.
2D. So long as any shares of the Preferred Stock are outstanding, the
corporation shall not declare any dividends or make any other distributions
in respect of outstanding shares of any junior stock, other than dividends
or distributions in shares of junior stock, or purchase or otherwise
acquire for value any outstanding shares of junior stock (the declaration
of any such dividend or the making of any such distribution (other than
dividends or distributions in shares of junior stock), purchase or
acquisition being herein called a "junior stock payment") in contravention
of the following:
(a) If and so long as the junior stock equity (hereinafter defined),
adjusted to reflect the proposed junior stock payment, at the end of the
calendar month immediately preceding the calendar month in which the
proposed junior stock payment is to be made is less than 20% of total
capitalization (hereinafter defined) at that date, the corporation shall
not make such junior stock payment in an amount which, together with all
other junior stock payments made within the year ending with and including
the date on which the proposed junior stock payment is to be made, exceeds
50% of the net income of the corporation available for dividends on junior
stock for the 12 full calendar months immediately preceding the calendar
month in which such junior stock payment is to be made, except in an amount
not exceeding the aggregate of junior stock payments which under the
restrictions set forth above in this subsection (a) could have been, and
have not been, made.
(b) If and so long as the junior stock equity, adjusted to reflect the
proposed junior stock payment, at the end of the calendar month immediately
preceding the calendar month in which the proposed junior stock payment is
to be made is less than 25% but not less than 20% of the total
capitalization at that date, the corporation shall not make such junior
stock payment in an amount which, together with all other junior stock
payments made within the year ending with and including the date on which
the proposed junior stock payment is to be made, exceeds 75% of the net
income of the corporation available .or dividends on the junior stock for
the 12 full calendar months immediately preceding the calendar month in
which such junior stock payment is to be made, except in an amount not
exceeding the aggregate of junior stock payments which under the
restrictions set forth above in this subsection (b) could have been, and
have not been, made.
2E. The term "junior stock equity" as used in these Articles means the
aggregate of the par value of, or stated capital represented by, the
outstanding shares of junior stock, all earned surplus, capital or paid-in
surplus, and any premiums on the junior stock then carried on the books of
the corporation, less:
(a) the excess, if any, of the aggregate amount payable on
involuntary liquidation of the corporation upon all outstanding shares of
the Preferred Stock over the sum of (i) the aggregate par or stated value
of such shares and (ii) any premiums thereon;
(b) any amounts on the books of the corporation known, or
estimated if not known, to represent the excess, if any, of recorded value
over original cost of used or useful utility plant, and
(c) any intangible items set forth on the asset side of the
balance sheet of the corporation as a result of accounting convention, such
as unamortized debt discount and expense; provided, however, that no
deductions shall be required to be made in respect of items referred to in
subsections (b) and (c) of this subdivision 2E in cases in which such items
are being amortized or are provided for, or are being provided for, by
reserves, including, without limitation, the acquisition premium of
approximately eight hundred million dollars ($800,000,000) which the
corporation is permitted to recover through rates under the agreement dated
as of November 22, 1989, as amended, between Northeast Utilities Service
Company ("NUSCO"), a Connecticut corporation, on behalf of its parent,
Northeast Utilities ("NU"), an unincorporated voluntary business
association organized under the laws of the Commonwealth of Massachusetts,
and the Governor and Attorney General of New Hampshire, acting on behalf of
the State of New Hampshire.
F. The term "total capitalization" as used in these Articles means the
aggregate of:
(a) the principal amount of all outstanding indebtedness for
borrowed money of the corporation maturing more than 12 months after the
date of issue thereof, and
(b) the par value or stated capital represented by, and any
premiums carried on the books of the corporation in respect of, the
outstanding shares of all classes of the capital stock of the corporation,
earned surplus, and capital or paid-in surplus, less any amounts required
to be deducted pursuant to subsections (b) and (c) of subdivision 2E above
in the determination of junior stock equity.
REDEMPTION OR PURCHASE OF THE PREFERRED STOCK
3A. Except as otherwise provided with respect to a particular series
of the Preferred Stock, all or any part of any series of the Preferred
Stock at any time outstanding may be called by vote of the Board of
Directors for redemption at any time and in the manner herein below
provided. If less than all of any series of the Preferred Stock is so
called, the Transfer Agent shall determine by lot, or in some other proper
manner approved by the Board of Directors, the shares of such series of the
Preferred Stock to be called.
3B. No call for redemption of less than all of the Preferred Stock
outstanding shall be made if the corporation shall be in arrears with
respect to payment of dividends on or mandatory redemption of or an event
of default (as hereinafter defined) shall exist with respect to any shares
of the Preferred Stock outstanding.
3C. Subject to the provisions of subdivision 3B, all or any part of
any series of the Preferred Stock may be called for redemption without
calling any part or all of any other series of the Preferred Stock.
3D. Except as otherwise provided with respect to a particular series
of the Preferred Stock, the sums payable in respect of any of the Preferred
Stock so called shall be payable out of funds legally available therefor at
the office of an incorporated bank or trust company in good standing
selected by the corporation. Notice of such call, stating the redemption
date and the place where the stock so called is payable, shall be sent by
first class mail, postage prepaid, not fewer than 30 nor more than 50 days
prior to the redemption date to the holders of stock so called at their
respective addresses as they appear upon the books of the corporation.
3E. Except as otherwise provided with respect to a particular series
of the Preferred Stock, the corporation shall, on or before the redemption
date, deposit with said bank or trust company all sums payable with respect
to the Preferred Stock so called. After such mailing and deposit the
holders of the Preferred Stock so called for redemption shall cease to have
any right to future dividends or other rights or privileges as stockholders
in respect of such stock and shall be entitled only to the payment on the
redemption date of the sums so deposited with said bank or trust company
for their respective accounts. Stock so redeemed may be reissued but only
subject to the limitations imposed by this Article V upon the issue of the
Preferred Stock.
3F. The corporation may at any time purchase all or any of the then
outstanding shares of the Preferred Stock of any series upon the best terms
reasonably obtainable, except that no such purchase shall be made if the
corporation shall be in arrears with respect to the declaration and payment
of dividends on or mandatory redemption of any shares of the Preferred
Stock outstanding or if there shall exist an event of default as defined in
subdivision 5B of this Article V.
AMOUNTS PAYABLE ON LIQUIDATION
4. The holders of any series of the Preferred Stock shall receive upon
any voluntary liquidation, dissolution or winding up of the corporation the
then current redemption price of such series and if such action is
involuntary $25 per share plus in each case all dividends accrued and
unpaid (whether or not such dividends have been declared) to the date of
such payment, before any payment in liquidation is made on any junior
stock. If the net assets of the corporation shall be insufficient to pay
said amounts in full, then the entire amount of such net assets shall be
distributed among the holders of the Preferred Stock, who shall receive a
common percentage of the full respective preferential amounts.
VOTING POWERS
5A. Except as provided in this Article V and as provided by law, the
holders of the Preferred Stock shall have no voting power or right to
notice of any meeting.
5B. Whenever dividends on any share of the Preferred Stock shall be in
arrears in an amount equal to or exceeding full dividends for one year
thereon, or whenever all mandatory redemption payments then due in respect
of all outstanding shares of the Preferred Stock shall not have been
declared and paid when due, or whenever there shall have occurred some
default in the observance of any of the provisions of this Article V, or
some default on which action has been taken by the bondholders or the
trustee of any indenture of mortgage or deed of trust of the corporation,
or whenever the corporation shall have been declared bankrupt or a receiver
of its property shall have been appointed (said conditions being herein
called "events of default"), then the holders of the Preferred Stock shall
be given notice of all stockholders' meetings and shall have the right
voting together as a class to elect the smallest number of additional
directors necessary to constitute a majority of the Board of Directors of
the corporation and the exclusive right voting together as a class to amend
the By-Laws to make such appropriate increase in the number of
directorships as may be required to effect such election. When all such
arrears of dividends shall have been paid and such events of default shall
no longer be continuing, all the rights and powers of the holders of the
Preferred Stock to receive notice and to vote shall cease, subject to being
again revived on any subsequent event of default.
5C. Whenever the right to elect directors shall have accrued to the
holders of the Preferred Stock, the corporation shall call a meeting for
the election of directors and, if necessary, the amendment of the By-Laws
to permit the holders of the Preferred Stock to exercise their rights
pursuant to subdivision 5B above, such meeting to be held not less than 45
days and not more than 90 days after the accrual of such rights. When such
rights shall cease, then forthwith the terms of the directors who were
elected by the holders of the Preferred Stock shall terminate and the
number of directors constituting the Board of Directors of the corporation
shall be reduced by the number of directors whose terms shall have so
terminated.
ACTION REQUIRING CERTAIN CONSENT OF
PREFERRED STOCKHOLDERS
6A. Except with the consent of the holders of at least two- thirds
(2/3) of the Preferred Stock at the time outstanding, given by vote at a
meeting duly called and held for the purpose, or given in such other manner
as may be authorized by law, the corporation shall not (a) authorize,
create or issue any class of capital stock having a priority over the
Preferred Stock in respect of the payment of dividends or payments in case
of liquidation, dissolution or winding up of the corporation, (b) increase
the rights and preferences or number of authorized shares of any such prior
ranking stock, or (c) issue any shares of any such prior ranking stock more
than 12 months after the date of such authorization.
6B. Except with the consent of the holders of at least two- thirds
(2/3) of the Preferred Stock at the time outstanding, or at least
two-thirds (2/3) of the series of the Preferred Stock affected if only one
such series is affected, given by vote at a meeting duly called and held
for the purpose, or, given in such other manner as may be authorized by
law, the corporation shall not amend, alter, or repeal any of the rights,
preferences or powers of the holders of the Preferred Stock so as to affect
adversely any such rights, preferences or powers; provided, however, that
no reduction of the dividend rate, redemption price, or the amount to be
paid on liquidation, dissolution or winding up with respect to any share of
the Preferred Stock may be made without the consent of the holder thereof
and no such reduction with respect to the shares of any particular series
of the Preferred Stock shall be made without the consent of all the holders
of shares of such series.
6C. Except with the consent of the holders of a majority of the shares
of the Preferred Stock at the time outstanding, given in writing or by vote
at a meeting duly called and held for the purpose, the corporation shall
not issue, sell or otherwise dispose of authorized but unissued shares of
the Preferred Stock (except at a time when no shares of Preferred Stock are
outstanding) or any other stock ranking on a parity with the Preferred
Stock in respect of dividends or payment in case of liquidation,
dissolution or winding up of the corporation, or reissue, sell or otherwise
dispose of any reacquired shares of the Preferred Stock or such other
stock, other than (a) to refinance an equal par value or stated value of
the Preferred Stock or of stock at the time outstandinq ranking prior to or
on a parity with the Preferred Stock in respect of dividends or payment in
case of liquidation, dissolution or winding up of the corporation or (b)
Preferred Stock issued as dividends on outstanding shares of Preferred
Stock the terms of which expressly permit or require the corporation to pay
such dividends in additional shares of Preferred Stock, at any time prior
to May 16, 1992, nor at any time thereafter:
1. unless, for a period of 12 consecutive calendar months within the
15 conseCutive calendar months immediately preceding the calendar month in
which any such shares shall be issued (but in no event including any month
prior to May 16, 1391), the Income before Interest Charges of the
corporation for said 12-month period available for the payment of interest,
determined in accordance with the systems of accounts then prescribed for
the corporation by the State of New Hampshire Public Utilities Commission
(or by such other official body as may then have authority to prescribe
such systems of accounts), but in any event after deducting taxes including
taxes based on income and the amount charged by the corporation on its
books to depreciation expense, (including, in any case in which such stock
is to be issued, sold or otherwise disposed of in connection with the
acquisition of any property (including property directly or indirectly
acquired or disposed of by the corporation, whether consisting of stock or
other ownership interests, partnership participation or otherwise), the
Income before Interest Charges of the property to be so acquired, computed
as nearly as practicable in the manner specified above) is at least one and
one-half (1 1/2) times the sum of (a) the interest charges for one year on
all indebtedness which shall then be outstanding (includinq any
indebtedness proposed to be created in connection with the issue, sale or
other disposition of such shares, but not including any indebtedness
proposed to be retired in connection with such issue, sale or other
disposition or indebtedness held by or for the account of the corporation),
calculated, in the case of floating rate indebtedness, as if the rate in
effect on the date of the computation is the applicable rate for the entire
period, and (b) such annual rental charges as shall not be deducted in such
determination of Income before Interest Charges and (c) an amount equal to
all annual dividend requirements on all outstanding shares of the Preferred
Stock and all other stock, if any, ranking on a parity with or having
priority over the Preferred Stock as to dividends or payments in case of
liquidation, dissolution or winding up of the corporation, including the
shares proposed to be issued, but not including any shares proposed to be
retired in connection with such issue, sale or other disposition; or
2. if such issue, sale or disposition would bring the aggregate of
the amount payable in connection with an involuntary liquidation of the
corporation with respect to all shares of the Preferred Stock and all
shares of stock, if any, ranking on a parity with or having priority over
the Preferred Stock as to dividends or payments in case of liquidation,
dissolution or winding up of the corporation to an amount in excess of the
sum of the junior stock equity. If for the purposes of meeting the
requirements of this clause 2, it shall have been necessary to take into
consideration any earned surplus of the corporation, the corporation shall
not thereafter pay any dividends on or make any distributions in respect
of, or make any payment for the purchase or other acquisition of, junior
stock which would result in reducing the junior stock equity to an amount
less than the amount payable on involuntary liquidation of the corporation
with respect to the Preferred Stock and all shares ranking on a parity with
or having a priority over the Preferred Stock in respect of dividends or
payments in case of liquidation, dissolution or winding up of the
corporation at the time outstanding.
If during the period for which Income before Interest Charges is to be
determined for the purpose set forth in this subdivision 6C the amount, if
any, required to be expended by the corporation during such period for
property additions pursuant to a renewal and replacement fund or similar
fund established under any indenture of mortgage or deed of trust of the
corporation shall exceed the amount deducted during such period in the
determination of such Income before Interest Charges on account of
depreciation and amortization of electric plant acquisition adjustments
(including for this purpose any amount deducted on account of the
acquisition premium referred to in subdivision 2E of this Article V), such
excess shall also be deducted in determining such Income before Interest
Charges.
6D. No share of the Preferred Stock shall be deemed to be
"outstanding" within the meaning of this subdivision 6 or of subdivision 7,
if, (a) such share is held by the corporation or an affiliate of the
corporation or (b) at or prior to the time when the consent or approval
herein or therein referred to would otherwise be required, provision shall
be made for its redemption, including a deposit complying with the
requirements of subdivision 3E.
MERGER, CONSOLIDATION OR SALE OF ALL ASSETS
7. The provisions of this Paragraph 7 shall become effective as of the
date of the merger (the "Merger") of Northeast Utilities AcquisitiOn Corp.
("NUAC"), a New Hampshire Corporation, with and into the corporation
pursuant to the joint plan (the "Joint Plan") for the reorganization of the
corporation filed by NUSCO on behalf of its parent and by others in
Bankruptcy Case No. BK88-00043 in the United States Bankruptcy Court for
the District of New Hampshire and confirmed by the Court by order dated
April 20, 1990 (the "Confirmation Order"). Except with the consent of the
holders of a majority of the Preferred Stock at the time outstanding, given
in writing or by vote at a meeting duly called and held for the purpose,
the corporation shall not merge or consolidate with or into any other
corporation or sell or otherwise dispose of all or substantially all of its
assets (except by mortgage or pledge) (collectively, a "Transfer") unless
such Transfer or other disposition, or the issuance or assumption of
securities in the effectuation thereof shall have been ordered, approved or
permitted under the Public Utility Holding Company Act of 1935; provided,
however, that no such consent shall be required (i) for the Merger, (ii)
for the transfer of the corporation's "interest in the Seabrook project,"
including, without limitation, its interest in Seabrook Unit No. 1, certain
nuclear fuel and the balance of the Seabrook site, to North Atlantic Energy
Corporation pursuant to the Joint Plan, or (iii) for any transfer of the
corporation's New Hampshire Yankee Division and/or the assets, liabilities
and employees of the New Hampshire Yankee Division pursuant to the Joint
Plan.
NO PREEMPTIVE RIGHT
8. The holders of the Preferred Stock shall have no preemptive right
to subscribe to any future issue of additional shares of the Common Stock
or the Preferred Stock or of any other class of stock (preferred or
otherwise) now or hereafter authorized, nor for any future issue of bonds,
notes or other evidence of indebtedness convertible into stock or other
securities exchangeable for stock.
TRANSFER AGENT
9. The corporation shall always have at least one Transfer Agent for
the Preferred Stock, which may be the corporation or an affiliate of the
corporation.
TERMS OF 10.60% CUMULATIVE PREFERRED STOCK, SERIES A
10A. There shall be established a series of the corporation's Preferred
Stock designated as "10.60% Cumulative Preferred Stock, Series A,~
consisting of 5,000,000 shares.
10B. The special relative rights and preferences of the 10.60%
Cumulative Preferred Stock, Series A, shall be as set forth below:
(1) Cumulative dividends shall be payable on shares of 10.60% Cumulative
Preferred Stock, Series A, at the rate of 10.60% per annum, payable
quarterly in arrears on March 31, June 30, September 30 and December 31 in
each year, commencing on June 30, 1991.
(2) Except to the extent that it may be prevented from doing so by law or
by the terms of any agreement, contract. mortgage, Indenture or, by the
terms of the corporation's Amended Axticles of Incorporation or any other
instrument to which the corporation is a party, the corporation shall, on
June 30, 1997 and on each June 30 thereafter, redeem 1,000,000 shares of
10.60% Cumulative Preferred Stock, Series A (or all of such shares
outstanding, if there are fewer than 1,000,000 -shares outstanding), at a
sinking fund redemption price equal to $25.00 per share. together with
accrued but unpaid dividends thereon to-the date fixed for redemption (the
failure by the corporation to so redeem such shares, regardless of whether
it is prevented from doing so for any of the reasons enumerated above,
shall constitute an "event of default" under Article V, subdivision 5B of
the corporation's Amended Articles of Incorporation). The obligation of
the corporation to redeem shares of 10.60% Cumulative Preferred Stock,
Series A. pursuant to this paragraph shall be cumulative.
(3) The 10.60% cumulative Preferred Stock, Series A, shall not be subject
to optional redemption by the corporation.
Except as specially provided for above, the 5,000,000 shares of the
corporation's 10.60~ Cumulative Preferred Stock Series A, shall constitute
part of and have the general terms, limitations and relative rights and
preferences of the corporation~s Preferred Stock.
ARTICLE VI
DIRECTORS
1. The property and affairs of the corporation shall be managed,
subject to the applicable terms of the Confirmation order, these Articles
of Incorporation, the Corporation's By-Laws and the vote of the
stockholders, by a Board of Directors constituted in accordance with the
Confirmation Order and the By- Laws. The corporation shall enter into such
agreements, including a management services agreement between the
corporation and NUSCO, as may be required from time to time by the
Confirmation Order.
2. Notwithstanding any other provision of New Hampshire Law or
these Articles of Incorporation, the Board of Directors shall take such
action as may be necessary, without obtaining any vote, approval or consent
of the corporation's stockholders, to cause the corporation to carry out,
fulfill, comply with or otherwise effect the terms of the Confirmation
Order.
3. To the fullest extent permissible under the New Hampshire
Business Corporation Law, as same exists or may hereafter be amended from
time to time, no officer or director of the corporation shall be personally
liable for money damages to the corporation or any of its shareholders for
breach of fiduciary duty as a director, an officer, or both.
Any repeal or modification of this paragraph 3 of this Article
VI by the shareholders of the corporation shall not, unless otherwise
required by law, adversely affect any right or protection of a director or
officer existing at the time of such repeal or modification with respect to
acts or omissions occurring prior to such repeal or modification.
ARTICLE VII PREEMPTIVE RIGHTS
The holders of the Common Stock shall have no preemptive riqht to
subscribe to any future issue of additional shares of the Common Stock or
the Preferred Stock or any other class of stock now or hereafter
authorized, nor for any future issue of bonds, notes or other evidence of
indebtedness convertible into stock or other securities exchangeable for
stock.
ARTICLE VIII DISSENTERS' RIGHTS
The holders of Common Stock shall be deemed to have each voted in
favor of the Merger in connection with the approval o~ the Joint Plan, the
entry of the Confirmation Order and the issuance of the shares of Common
Stock as provided in the Joint Plan. Notwithstanding any other provision
of New Hampshire law, no shareholder of the corporation shall have any
right to dissent from or to obtain payment for his shares in the event of
the occurrence of the Merger, other than the right to receive those
payments provided for under the terms of such Merger.
ARTICLE I
The first meeting of the incorporators shall be held at the office of
Demondi Woodworth, Sulloway & Rogers, 77 North Main Street, in Concord, New
Hampshire, on the fourteenth day of August, 1926, at eleven o'clock in the
forenoon.
Dated at Concord, New Hampshire, this fourteenth day of August, 1926.
Name Post Office Address
EDWARD K. WOODWORTH Concord, N.H.
JONATHAN PIPER Concord, N.H.
WILLOUGHBY A. COLBY Concord, N.H.
ARTICLE
DURATION
1. The period of duration of the corporation is perpetual.
Exhibit 3.3.2
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
Organized Under the Laws of New Hampshire
August, 1926
BY-LAWS
As in effect November 1, 1993
BY-LAWS OF
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
ARTICLE I.
Articles of Incorporation; Offices.
SECTION 1. These By-Laws shall be subject to the Articles of Agreement
or Articles of Incorporation of the corporation, whichever should then be
in effect, and all references in these By-Laws to the Articles of
Incorporation shall be construed to mean the Articles of Agreement or
Articles of Incorporation of the corporation as from time to time amended.
SECTION 2. The corporation shall maintain its principal office in
Manchester, New Hampshire, and may maintain offices at such other places as
the Board of Directors (the "Board") may, from time to time, appoint.
ARTICLE II.
Seal.
The initial corporate seal shall have inscribed thereon the name of the
corporation and words and figures indicating the state and year of its
incorporation. The seal shall otherwise be in such form as the Board may
determine. After the merger of the corporation with and into Public
Service Company of New Hampshire, the corporate seal shall have inscribed
thereon the name Public Service Company of New Hampshire, the state of the
corporation's incorporation, and 1926, the year of Public Service Company
of New Hampshire's incorporation, and shall otherwise be in such form as
the Board may determine. If the seal of the corporation is at any time not
available, a wafer seal may be used.
ARTICLE III.
Capital Stock and Transfers.
SECTION 1. The amount and classes of capital stock that may be issued
by the corporation, and the designations, preferences, rights, privileges,
voting powers, restrictions and qualifications of each class thereof, shall
be as set forth in or pursuant to the Articles of Incorporation.
SECTION 2. Each holder of fully paid stock shall be entitled to a
certificate or certificates of stock having plainly written or printed upon
its face that the corporation is organized under the laws of The State of
New Hampshire, the name of the person to whom issued and the number and
class of shares represented by such certificate, and the designation of the
series where a class is divided into series. Stock certificates shall
otherwise be in such form as the Board may from time to time prescribe;
provided, however, that so long as the corporation is authorized to issue
shares of more than one class each certificate shall set forth upon the
face or back of the certificate, or shall state that the corporation will
furnish to any shareholder upon request and without charge, a full
statement of the designations, preferences, limitations, and relative
rights of the shares of each class authorized to be issued and as to
preferred shares, the variations in the relative rights and preferences
between the shares of each series so far as the rights and preferences have
been fixed and determined, and the authority of the Board to fix and
determine the relative rights and preferences of subsequent series. All
stock certificates shall be sealed with the corporate seal, shall be signed
by the President or any Vice President and by the Secretary or any
Assistant Secretary of the corporation, and shall also be countersigned and
registered by a Registrar to be appointed by the Board, and be
countersigned by a Transfer Agent to be appointed by the Board; except that
pending the preparation of permanent certificates the Board may cause
temporary certificates to be issued; and except that the signatures of the
above-named officers, and the corporate seal, and the signatures of the
Transfer Agent or the Registrar, or both, may be facsimiles, engraved or
printed.
SECTION 3. Shares of stock may be transferred by the owner by a
writing upon the back of the certificate by him signed, or by a separate
instrument of assignment, and the assignee, upon producing and surrendering
to the corporation the former certificate so transferred or the certificate
accompanied by such instrument, shall be entitled to a new certificate if
no liens upon the stock against the former owner have attached. The
delivery of a stock certificate to a bona fide purchaser or pledgee for
value, together with a written transfer of the same or a power of attorney
to sell, assign and transfer the same, signed by the owner of the
certificate, shall be a sufficient delivery to transfer the title; but no
such transfer shall affect the right of the corporation to treat the
stockholder of record as the stockholder in fact until the old certificate
is surrendered and a new certificate is issued to the person entitled
thereto. Except as hereinafter provided, or as may be required by law or
by the order of a court in appropriate proceedings, shares of stock shall
be transferred on the books of the corporation only upon the proper
assignment and surrender of the certificates issued therefor. If an owner
of stock claims that an outstanding stock certificate has been lost,
destroyed, or wrongfully taken, such owner may upon request to the
corporation have a new certificate issued to him provided he
files with the corporation a sufficient indemnity bond or satisfies any
other reasonable requirements imposed by the corporation.
SECTION 4. The transfer books may be closed by order of the Board for
short periods, not exceeding twenty-five days at any one time, for the
purpose of paying a dividend, or holding a meeting of stockholders, or for
any other legal purpose, as the Board shall deem advisable.
SECTION 5. If default shall be made in the prompt payment when due of
any sum payable to the corporation upon any subscription for stock of the
corporation, and if such default shall continue for a period of thirty days
after written demand has been made, then all rights under the subscription
in and to the stock subscribed for shall, upon the expiration of such
period, cease and determine and become and be forfeited to the corporation;
provided that if at the expiration of such thirty-day period such right
shall belong to the estate of a decedent, it may be forfeited only by
resolution of the Board declaring forfeiture. The corporation shall,
within thirty-days after such forfeiture, cause such stock to be sold at
private or public sale, at its market value at the time of sale, and shall,
out of the net proceeds of sale and upon surrender of any outstanding
Stock Subscription Receipt issued to evidence the subscription, pay to the
recorded holder of such receipt the amount paid on the subscription prior
to forfeiture, less the amount, if any, by which the total subscription
price of the stock exceeded the net proceeds of sale.
ARTICLE IV.
Meetings of Stockholders.
SECTION 1. All meetings of the stockholders shall be held at the
principal office of the corporation or at such other place within or
without the State of New Hampshire as shall be designated in the call
therefor. An annual meeting shall be held each year on the second Thursday
of May, or on such other date as the Board shall determine, but in no case
later than June 30, at the time designated in the call, for the election
of directors and the transaction of such other business as may come before
it.
SECTION 2. Special meetings of the stockholders may be called by vote
of the Board, or on written request of stockholders holding not less than
one-tenth in number of the total outstanding shares of capital stock of the
corporation entitled to vote at the meeting, or as provided in the Articles
of Incorporation, or in such other manner as may be provided by statute.
In case an annual meeting shall be omitted through inadvertence or
otherwise, the business of such meeting may be transacted at a special
meeting duly called for the purpose and in such case all references to the
annual meetings in these By-Laws, except in Section 1 and this Section 2 of
this Article IV, shall be deemed to refer to such special meeting held in
place of the annual meeting.
SECTION 3. Notice of the time and place of each annual meeting shall
be sent by mail to the recorded address of each stockholder entitled to
vote thereat, or delivered in person to each such stockholder, not less
than ten days nor more than fifty days (including the day of mailing or
delivery) before the date of the meeting. Like notice shall be given of
all special meetings, except in cases where other special method of notice
may be required by statute, in all which cases the statutory method shall
be followed. Except as otherwise provided in the Articles of
Incorporation, notice of a stockholders' meeting need not be sent to any
class of stockholders not entitled to vote upon any question to be acted
upon or at any election of officers or directors to be held at such
meeting. The notice of stockholders' meeting shall state the objects of
the meeting. Less than ten days' notice of any stockholders' meeting shall
be sufficient if all the stockholders entitled to vote at such meeting
consent in writing to the notice actually given; and any meeting held
without the notice herein provided for, and all action taken at such
meeting, shall be legal and valid if all the stockholders entitled to
notice thereof (a) are present in person or represented by proxy thereat
and no objection is made by anyone so present, (b) waive notice thereof in
writing, or (c) sign a written consent to the records thereof.
SECTION 4. At any meeting of stockholders, except where a different
quorum is required by law, by the Articles of Incorporation or by these
By-Laws, a representation in person or by proxy of a majority of the number
of shares of stock outstanding and entitled to vote upon a question to be
considered or at any election of officers or directors or a class of
directors to be held at the meeting, shall be necessary to constitute a
quorum for the consideration of such question or for such election, and in
case a class of stock is entitled to vote upon a question or at an election
as a separate class a representation of a majority of the number of
outstanding shares of that class shall be necessary to constitute a quorum
for action by that class, except that a majority vote of whatever
stock shall be represented shall be sufficient for (a) adjourning from time
to time until a quorum shall be obtained or (b) adjourning sine die.
SECTION 5. When a quorum for the consideration of a question is
present at any meeting a majority in interest of the stock represented at
the meeting and entitled to vote upon the question shall decide the
question, or in case two or more classes of stock are entitled to vote as
separate classes upon such question a majority interest of the stock
represented at the meeting of each such class shall determine the action of
that class except in either case where a larger vote is specifically
required by law, by the Articles of Incorporation or by these By-Laws.
When a quorum for an election is present at any meeting a plurality of
the votes cast for any office shall elect to such office except where a
larger vote is specifically required by law, by the Articles of
Incorporation or by these By-Laws.
SECTION 6. Except as specifically provided in the Articles of
Incorporation and these By-Laws, stockholders shall have one vote for each
share of stock owned and entitled to vote. Stockholders may vote either in
person or by proxy in writing dated not more than eleven months before the
meeting named therein which shall be filed with the Secretary at the
meeting or any adjournment thereof before being voted. Such proxies shall
entitle the holders thereof to vote at any adjournment of such meeting but
shall not be valid after the final adjournment of such meeting. Every
proxy shall be revocable at the pleasure of the stockholder executing it,
except as otherwise provided therein and as permitted by law.
ARTICLE V.
Directors.
SECTION 1. The property and business of the corporation shall be
managed, subject to the terms of the Articles of Incorporation, these
By-Laws and the votes of the shareholders, under the direction of a Board
of not less than five nor more than twenty-one, who may or may not be
stockholders. Directors shall be elected by ballot, by a plurality vote of
the stockholders entitled to vote and present in person or represented by
proxy at each election, except (i) as otherwise provided in the Articles of
Incorporation, (ii) as hereinafter provided with respect to the filling of
vacancies, and (iii) for the election of directors by the holders of the
Preferred Stock, when, in accordance with the Articles of Incorporation,
they, voting separately as one class, shall be entitled to elect additional
directors. The number of positions on the Board of Directors for any year
shall be fixed by resolution of the shareholders or of the Board of
Directors, or, in the absence of such a resolution, shall be the number
elected at the preceding Annual Meeting of Shareholders. Except as
otherwise provided in the Articles of Incorporation, each director shall
hold office until the next annual meeting when chosen otherwise than at an
annual meeting, and for the term of one year when chosen at an annual
meeting, and in either case until his successor shall be elected and shall
qualify. The Board shall have and may exercise all its powers
notwithstanding the existence of one or more vacancies in its number.
SECTION 2. Any vacancy in the Board shall be filled by the affirmative
vote of a majority of its remaining members though less than a quorum and
each director so appointed shall hold office until his successor shall be
elected by the stockholders, who may so elect a successor at the next
annual meeting or at any duly called special meeting prior thereto, and
shall qualify.
SECTION 3. The Board may hold its meetings and may have one or more
offices, and may keep the books of the corporation (except such records and
books as by the laws of New Hampshire are required to be kept within that
State) within or outside of New Hampshire, at such places as it may from
time to time determine. In addition to the powers and authorities by these
By-Laws, the Articles of Incorporation, and applicable law expressly
conferred upon it, the Board may exercise all such powers of the
corporation, and do all such lawful acts and things as are not by law, by
the Articles of Incorporation or by these By-Laws required to be exercised
or done by the stockholders.
SECTION 4. Without prejudice to the general powers conferred by, and
subject to the limitations mentioned in, the last sentence of Section 3 of
this Article V, it is hereby expressly declared that the Board shall have
the following powers, that is to say:
1. From time to time to make and change rules and regulations, not
inconsistent with these By-laws, for the management of the corporation's
business and affairs.
2. From time to time, as and when and upon such terms and conditions
as it may determine, to authorize the corporation to issue any part of the
authorized capital stock of the corporation and fix the consideration for
the issue and disposal thereof.
3. To cause the corporation to purchase, or otherwise acquire for the
corporation, any property, right or privilege which the corporation is
authorized to acquire at such price or consideration, and generally on such
terms or conditions as it shall think fit.
4. At its discretion to cause the corporation to pay for any property
or rights acquired, by the corporation, either wholly or partly in money,
stock, bonds, debentures or other securities of the corporation.
5. To cause the corporation to borrow money, to create, make and
issue mortgages, bonds, deeds of trust, trust agreements and negotiable or
transferable instruments and securities, secured by mortgage or otherwise,
and to do every other act and thing necessary to effectuate the same.
6. To appoint, and at its discretion remove or suspend, any and all
officers, employees and agents, permanently or temporarily, as it may think
fit and to the fullest extent permitted by then applicable law, and to
determine their duties and fix and from time to time change their duties,
salaries and emoluments, and to require security in such instances and in
such amounts as it thinks fit.
7. To confer by resolution upon any officer of the corporation, the
power to choose, remove or suspend subordinate officers, employees and
agents.
8. To appoint any person or corporation to accept and hold in trust
for the corporation, any property belonging to the corporation, or in which
it is interested, or for any other purpose, and to execute and do all such
deeds and things as may be requisite in relation to any such trust.
9. To determine who shall be authorized on the corporation's behalf,
to sign bills, notes, receipts, acceptances, endorsements, checks,
releases, contracts and other paper and documents.
10. To sell or otherwise dispose of any property of the corporation,
the sale or disposal of which does not require a vote of the stockholders
under the laws of The State of New Hampshire.
11. To delegate any of the powers of the board in the course of the
current business of the corporation to any standing or special committee,
or to appoint any persons to be the agents of the corporation with such
powers (including the powers to sub-delegate) and upon such terms as it
shall think fit, to the fullest extent permitted by then applicable law.
12. To fix in advance a date not exceeding fifty days and not less
than ten days prior to the date of (1) any meeting of stockholders, (2) the
payment of any dividend, (3) the making of any distribution to
stockholders, (4) the last day upon which the consent or dissent of
stockholders may be effectively expressed for any purpose, or (5) the
delivery of evidences of rights or interests arising out of any issue,
change, conversion or exchange of capital stock, as a record date for the
determination of the stockholders entitled (a) to notice of and to vote at
any meeting and any adjournment thereof, (b) to receive any dividend,
(c) to receive any distribution to stockholders, (d) to consent or dissent
for any purpose, or (e) to receive delivery of evidences of rights or
interests arising out of any issue, change, conversion or exchange of
capital stock, and in such case only stockholders of record on such record
date shall have such rights notwithstanding any transfer of stock upon the
books of the corporation after the record date.
13. To direct the use of facsimile signatures of corporate officers of
the corporation and a facsimile of the corporate seal, if any, upon bonds
or other corporate obligations of the corporation for the payment of money
where such bond or other obligation is authenticated or certified by a
Trustee.
ARTICLE VI.
Meetings of the Board.
SECTION 1. Regular meetings of the Board shall be held at such place
and time as may be designated from time to time by the Board; and such
meetings, and a regular meeting immediately following and at the same place
as each annual meeting of the stockholders, may be held without notice.
Special meetings of the Board may be called by the Chairman, if any, the
Vice Chairman, if any, the President, or by any two directors. Oral
or written notice of the time and place of each special meeting of the
Board of Directors shall be given to each director personally or by
telephone, or by mail or facsimile at his last-known post office address,
at least twenty-four hours prior to the time of the meeting, provided that
any director may waive such notice in writing or by facsimile or by
attendance at such meeting.
SECTION 2. One-third of the Board then in office shall constitute a
quorum for the transaction of business at any meeting of the Board, but no
quorum shall consist of fewer than two directors. A lesser number may
adjourn any meeting from time to time, until a quorum is obtained, or may
adjourn sine die.
SECTION 3. In all meetings of the Board a majority vote of the members
in attendance shall be decisive of all questions before the meeting, except
as may be otherwise provided by law or by the Articles of Incorporation.
The Board shall keep minutes of the proceedings at its meetings.
SECTION 4. Any resolution in writing concerning action to be taken by
the Company, which resolution is approved and signed by all of the
Directors, severally or collectively, whose number shall constitute a
quorum for such action, shall have the same force and effect as if such
action were authorized at a meeting of the Board of Directors duly called
and held for that purpose, and such resolution, together with the
Directors' written approval thereof, shall be recorded by the Secretary in
the minute book of the Company.
SECTION 5. A Director or a member of a committee of the Board of
Directors may participate in a meeting of the Board of Directors or of such
committee by means of conference telephone or similar communications
equipment enabling all Directors participating in the meeting to hear one
another, and participation in a meeting in such manner shall constitute
presence in person at such meeting.
SECTION 6. Directors of the corporation shall receive such salaries
for services and such fees and expenses for attendance at meetings as may
be fixed by resolution of the Board, and directors shall be entitled to be
reimbursed for all actual expenses incurred for travel related to
attendance at such meetings; provided, however, that no director, who is
either an officer or a regular employee of the corporation and who receives
compensation therefor, shall receive any compensation for service as a
director or for attendance at meetings and provided further, that nothing
herein contained shall be construed to preclude any director from serving
the corporation in any other capacity, and receiving compensation therefor.
ARTICLE VII.
Executive Committee.
SECTION 1. The Board may, by resolution passed by a majority of the
whole Board, designate from its members an Executive Committee of such
number, not less than three, as the Board may fix from time to time. The
Executive Committee may make its own rules of procedure and shall meet
where and as provided by such rules, or by resolution of the Board.
One-third of the members of the Executive Committee shall constitute a
quorum for the transaction of business. During the intervals between the
meetings of the Board, and except as provided by Section 8.25 of the New
Hampshire Business Corporation Act, the Executive Committee shall have all
the powers of the Board in the management of the business and affairs of
the corporation, including power to authorize the seal of the corporation
to be affixed to all papers which may require it, and, by majority vote
of a quorum of its members, exercise any and all such powers in such manner
as the Executive Committee shall deem best for the interests of the
corporation, in all cases in which specific directions shall not have been
given by the Board, and in which the vote of a quorum of the full Board is
not required by law or by these By-Laws.
SECTION 2. The Executive Committee shall keep regular minutes of its
proceedings and report the same to the Board when required. The Board
shall have power to rescind any vote or resolution of the Executive
Committee, but no such rescission shall have retroactive effect.
ARTICLE VIII.
Officers.
SECTION 1. In each year there shall be elected by the Board (i) a
President, (ii) one or more Vice Presidents, (iii) a Secretary, (iv) one or
more Assistant Secretaries, (v) a Treasurer, (vi) one or more Assistant
Treasurers, and (vii) a Controller; and the Board may provide for and elect
a Chairman, a Vice Chairman and such other officers and assistants and
prescribe such duties for them as in its judgment may, from time to time,
be required to conduct the business of the corporation. The offices of
President, Treasurer and/or Secretary may be held by the same person, and
one person may be both an assistant Treasurer and assistant Secretary. All
officers shall hold their respective offices for a term prescribed by the
Board, and until their successors, willing to serve, shall have been
elected and, in the case of the Secretary, qualified, unless sooner
removed; but they, and any of them may be removed from their respective
offices at the pleasure of the Board. Vacancies arising in any office from
any cause shall be filled by the Board; and the persons chosen to fill
vacancies shall serve for the balance of the unexpired term and until their
successors shall have been elected and, in the case of the Secretary,
qualified.
SECTION 2. The Board of Directors may provide for and elect a Chairman
from its members and, if a Chairman is elected, the Board may designate
whether the Chairman is to be an officer of the Company. The Chairman, if
and when elected, may elect, when present, to preside at meetings of the
Board of Directors and of the Executive Committee. He may attend any
meeting of any committee of the Board, whether or not he is a member of
such committee. The Chairman, if an officer of the Company and when
also elected or designated chief executive officer, shall have general
supervision of the Company's affairs, and shall have such other powers and
duties as may be prescribed by the Board of Directors. Until a Chairman be
elected or in case of the absence, death, resignation or removal from
office of the Chairman, the powers and duties as such Chairman shall, for
the time being, be exercised by the President, unless otherwise
ordered by the Board of Directors.
SECTION 3. A Vice Chairman, if and when elected, shall have such
powers and duties as may from time to time be prescribed by the Board of
Directors. If the Chairman is unable at any time to attend to the duties
of the office of Chairman, or in case of the Chairman's death, resignation
or removal from office, the powers and duties of the Chairman shall, except
as the Board of Directors may otherwise provide, devolve upon the Vice
Chairman or, if more than one Vice Chairman is elected, the most senior
Vice Chairman, and shall be exercised by such Vice Chairman during such
inability of the Chairman or until the vacancy in the office of Chairman
shall be filled.
SECTION 4. Unless otherwise provided by the Board, the President shall
have the general management and direction, subject to the control of the
Board of Directors and of the Executive Committee and of the Chief
Executive Officer or Chief Operating Officer, if such officers shall have
been elected, of the business of the Company, including the power to
appoint and to remove and discharge any and all agents and employees of the
Company not elected or appointed directly by the Board of Directors. He
may, with the approval of the Board of Directors, appoint, to aid him in
his duties, an assistant or assistants to be known by such title or titles
as he may designate, and may assign to such assistant or assistants such
duties as he shall think advisable, not inconsistent with the By-Laws of
the Company.
SECTION 5. The Vice President, or Vice Presidents, if there shall be
more than one, shall have such powers and duties as may from time to time
be prescribed by the Board. In case the President from absence or any
other cause shall be unable at any time to attend to the duties of the
office of President requiring attention, or in case of his death,
resignation, or removal from office, the powers and duties of the President
shall, except as the Board may otherwise provide, temporarily devolve upon
the Vice President, if he shall be able to serve, if there shall be
but one Vice President, or upon the highest ranking Vice President able to
serve, if there shall be more than one, and shall be exercised by such Vice
President as acting President during such inability of the President, or
until the vacancy in the office of President shall be filled. In case of
the absence, disability, death, resignation or removal from office of both
the President and the Vice Presidents, the Board shall elect one of its
members to exercise the powers and duties of the President during such
absence or disability, or until the vacancy in one of said offices shall be
filled.
SECTION 6. The Secretary shall be sworn each year to the faithful
discharge of his duties, shall attend the meetings of and record all votes
and proceedings of the stockholders and of the Board, shall make a record
of all instruments and papers required to be recorded in his office and
shall have the custody and care of the corporate seal, records and minutes
of the corporation. He shall keep or cause to be kept a suitable record
of the addresses of stockholders and shall issue all notices for meetings
of stockholders. Whenever requested by the Chairman, if any, the Board or
stockholders to give notice for a meeting of stockholders, he shall give
such notice, as requested, and the notice shall state at whose request the
notice is given. Whenever requested by the Chairman, if any, the Vice
Chairman, if any, the President, or by any two directors to give notice for
a meeting of the Board, he shall give such notice, as requested, and the
notice shall state at whose request the notice is given. He shall sign all
mortgages, and all other documents and papers to which his signature may be
necessary or appropriate, shall affix the seal of the corporation to all
instruments requiring the seal, and shall have such other powers and duties
as are commonly incidental to the office of the Secretary, or as may be
prescribed for him. In the absence of the Secretary or an Assistant
Secretary from any meeting of the stockholders or of the board, a Secretary
pro tempore, who shall be similarly sworn, may be chosen to record the
votes and proceedings thereat.
SECTION 7. The Treasurer shall have charge of, and be responsible for,
the collection, receipt, custody and disbursement of the funds of the
corporation, and shall deposit its funds in the name of the corporation,
in, and shall transfer such funds so deposited between, such banks, trust
companies, or safe deposit vaults as the Board may direct. He shall have
the custody of such books, receipted vouchers, and other books and papers
as in the practical business operations of the corporation shall naturally
belong in the office or custody of the Treasurer, or as shall be placed in
his custody by the Board, by the Executive Committee, by the President, or
by a Vice President when acting as President. He shall also have charge of
the safekeeping of all stock, bonds, mortgages, and other securities
belonging to the corporation, but such stocks, bonds, mortgages, and other
securities shall be deposited for safekeeping in a safe deposit vault to be
approved by the Board or by the Executive Committee, in a box or boxes,
access to which shall be had as may be provided by resolution of the Board
or Executive Committee. He shall have such powers and duties as are
commonly incidental to the office of Treasurer, or as may be prescribed for
him. He may be required to give bond to the corporation for the faithful
discharge of his duties in such form and to such amount and with such
sureties as shall be determined by the Board.
SECTION 8. The duties of the Controller shall be to maintain adequate
records of all assets, liabilities, and transactions of the corporation; to
see that adequate audits thereof are currently and regularly made; and, in
conjunction with other officers and department heads, to initiate and
enforce measures and procedures whereby the business of the corporation
shall be conducted with the maximum safety, efficiency and economy. Upon
request of any member of the Board, he shall attend any meeting of the
Board. Upon request of any member of the Executive Committee, he shall
attend any meeting of the Executive Committee.
SECTION 9. Assistant Secretaries, Treasurers or Controllers, when
elected, shall assist the Secretary, the Treasurer or the Controller, as
the case may be, in the performance of the respective duties assigned to
such principal officers; and the powers and duties of any such principal
officer, shall, except as otherwise ordered by the Board, temporarily
devolve upon his assistant in case of the absence, disability, death,
resignation or removal from office of such principal officer. They shall
perform such other duties as may be assigned to them from time to time.
SECTION 10. In addition to the powers and duties of officers
prescribed in these By-Laws and by law, and in addition to such powers and
duties as the Board of Directors may prescribe but subject to such
limitations as the Board of Directors may establish, each officer shall
have the powers and perform the duties which by general usage pertain to
the officer's particular office.
ARTICLE IX.
Miscellaneous.
SECTION 1. Notes of the corporation shall be signed by the President
or a Vice President and by the Treasurer or an Assistant Treasurer or by
such officers or persons as may be designated from time to time by the
Board.
SECTION 2. No debts or obligations shall be contracted by any person
on behalf of the corporation, unless authorized by the Board or the
Executive Committee, except those incurred in the usual course of the
business of the corporation.
SECTION 3. All dividends shall be payable at such time as may be fixed
by the Board or by the Articles of Incorporation. Before payment of any
dividend or making any distribution of profits, there shall be set aside,
out of the surplus or net profits of the corporation, such sum or sums as
the Board from time to time, in its absolute discretion, thinks proper as a
reserve fund to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or for such other
purpose as the Board shall think conducive to the interest of the
corporation.
SECTION 4. The fiscal year of the corporation shall be the calendar
year unless otherwise determined by the Board.
SECTION 5. The corporation shall indemnify, to the fullest extent
permitted by applicable law, each person made or threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the
fact that such person or such person's testator or intestate is or was a
director or officer of the corporation, or is or was serving, at the
request of the corporation, for another corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise in any capacity
while he or she was such a director or officer, (hereinafter referred to as
"Indemnified Person"), against expenses, including attorneys' fees,
judgments, fines, penalties and amounts paid in settlement, actually and
reasonably incurred in connection with such action or proceeding, or any
appeal therein.
The corporation shall advance or promptly reimburse upon request any
Indemnified Person for all expenses, including attorneys' fees, actually
and reasonably incurred in defending any action or proceeding in advance of
the final disposition thereof upon receipt of any undertaking then required
by applicable law by or on behalf of such Indemnified Person.
Determinations with respect to indemnification and reimbursement of a
person (unless ordered by a court) shall be made: (1) by the Board acting
(a) by majority vote or action of a disinterested quorum of directors; or
(b) if such quorum is not obtainable, as directed by a majority vote or
action of a committee of the Board, duly designated to act in the matter by
a majority vote or action of the full Board (in which designation directors
who are parties may participate), consisting solely of two or more
directors not at the time parties to such proceeding; or (2) by independent
legal counsel, selected by the Board or a committee thereof by vote or
action as set forth in clauses (a) and (b) of clause (1), or if the
requisite quorum of the full Board cannot be obtained therefor and such
committee cannot be established, by a majority vote or action of the full
Board (in which selection directors who are parties may participate); or
(3) by a majority vote of the holders of the outstanding stock at the time
entitled to vote for directors, voting as a single class; or (4) by any
other method of determination selected by the Board (in which selection
directors who are parties may participate).
Nothing herein shall limit or affect any right of any Indemnified
Person otherwise than hereunder to indemnification or expenses, including
attorneys' fees, under any statute, rule, regulation, certificate of
incorporation, by-law, insurance policy, contract or otherwise.
Anything in these By-Laws to the contrary notwithstanding, no
elimination of this By-Law, and no amendment of this By-Law adversely
affecting the right of any Indemnified Person to indemnification or
advancement or reimbursement of expenses hereunder, shall be effective
until the 60th day following the taking of such action, and no elimination
of or amendment to this By-Law shall thereafter deprive any Indemnified
Person of his or her rights hereunder arising out of alleged or actual
occurrences, acts or failures to act occurring prior to such 60th day.
Upon taking any such action the corporation shall promptly notify all
Indemnified Parties, which notification shall be sufficient if mailed,
postage prepaid, to each such Indemnified Person at their last known
address.
The corporation shall not, except by elimination or amendment of this
By-Law in a manner consistent with the preceding paragraph and Article X of
these By-Laws, and except by making any determination required by Section
5, IV, of the New Hampshire Business Corporation Act take any corporate
action or enter into any agreement which prohibits, or otherwise limits the
rights of any Indemnified Person to, indemnification in accordance with the
provisions of this By-Law. The indemnification of any Indemnified Person
provided by this By-Law shall be deemed to be a contract between the
corporation and such Indemnified Person and shall continue after such
Indemnified Person has ceased to be a director or officer of the
corporation and shall inure to the benefit of such Indemnified Person's
heirs, executors, administrators and legal representatives. If the
corporation fails timely to make any payment pursuant to the
indemnification and advancement or reimbursement of expenses provisions of
this Article IX Section 5 and an Indemnified Person commences an action or
proceeding to recover such payment, the corporation in addition shall
reimburse such Indemnified Person for the legal fees and other expenses of
such action or proceeding if the Indemnified Party shall prevail in such
action or proceeding.
In case any provision in this By-Law shall be determined at any time to
be unenforceable in any respect, the other provisions shall not in any way
be affected or impaired thereby.
For purposes of this By-Law, the corporation shall be deemed to have
requested an Indemnified Person to serve an employee benefit plan where the
performance by such Indemnified Person of his or her duties to the
corporation also imposes duties on, or otherwise involves services by, such
Indemnified Person to the plan or participants or beneficiaries of the
plan. Such Indemnified Person shall be indemnified against excise taxes
assessed on him or her with respect to an employee benefit plan pursuant to
applicable law. For purposes of this Section 5 of Article IX of these
By-Laws, the term "corporation" shall include any legal successor to the
corporation, including any corporation which acquires all or substantially
all of the assets of the corporation in one or more transactions.
ARTICLE X.
Amendment.
The Board shall have the power to alter, amend or repeal these By-Laws
or to adopt new By-Laws; provided, however, that any such action shall be
subject to repeal or change by action of the shareholders; and provided
further that the unanimous vote of the Board shall be required to alter,
amend, or repeal Article IX, Section 5 of these By-Laws. The By-Laws may
contain any provisions for the regulation and management of the affairs of
the corporation not inconsistent with law, or the Articles of
Incorporation. Action by the Board to alter, amend or repeal these By-Laws
shall be by the affirmative vote of such number of directors as is equal to
a majority of the full Board.
Exhibit 3.4.11
BY-LAWS
WESTERN MASSACHUSETTS ELECTRIC COMPANY
Adopted
February 11, 1937
Amended
February 18, 1942
January 13, 1943
October 19, 1945
January 15, 1947
August 18, 1948
November 17, 1954
February 26, 1960
September 9, 1960
February 27, 1962
July 8, 1964
May 19, 1966
December 5, 1967
June 3, 1970
August 2, 1971
October 13, 1971
October 20, 1975
December 16, 1981
March 1, 1982
April 12, 1983
December 15, 1983
(effective
November 13, 1986)
February 11, 1987
February 24, 1988
WESTERN MASSACHUSETTS ELECTRIC COMPANY
BY-LAWS
ARTICLE I
STOCKHOLDERS' MEETINGS
The annual meeting of the stockholders shall be held on the first
Wednesday of March in each year, and special meetings of the stockholders
shall be held whenever the Chairman of the Board, the President, or two
Directors shall so order, or whenever called in any other manner as
provided by law.
Each meeting of the stockholders, annual or special, shall be held at
such hour of the day, and at such place in Boston or in such other place in
Massachusetts, as may be designated by the Board of Directors, by the
Chairman of the Board or by the President. Notice of the time and place of
every such meeting shall be given by the Clerk by mailing a notice to each
stockholder of record at his address as shown on the books of the
corporation not less than seven (7) days before the day named for the
meeting. No business shall be in order at a special meeting except such as
shall have been indicated in the notice of such meeting.
In the event of any failure to call and hold the annual meeting as
herein provided, a special meeting may be called and held in lieu of and
for the purposes of such annual meeting. Any election had or business done
at such substitute meeting shall be as valid and effectual as if had or
done at a meeting called as an annual meeting and duly held on said date.
A majority in interest of all the shares of stock of the corporation
outstanding present in person or by proxy shall constitute a quorum for the
transaction of business but less than a quorum may adjourn either sine die
or to a date certain.
No meeting of the stockholders shall be deemed to be invalid for want
of notice provided every stockholder waives notice thereof by a writing
filed either before or after such meeting with the records thereof.
ARTICLE II
OFFICERS
The officers of the corporation shall be a Chairman of the Board of
Directors, a President, an Executive Vice-president, one or more Vice-
presidents, a Treasurer, a Clerk, a Board of not less than five (5) nor
more than twenty-five (25) Directors, such other officers as the Board of
Directors may appoint, including, if the Directors see fit, a Secretary and
one or more Assistant Treasurers. The officers need not be stockholders.
No two of the following offices may be held by the same person: Chairman
of the Board of Directors, President, Executive Vice-president, and Vice-
president, and the Treasurer shall not be an Assistant Treasurer.
The business, property and affairs of the Company shall be managed by
a Board of not less than three nor more than sixteen Directors. Within
these limits, the number of positions on the Board of Directors for any
year shall be the number fixed by resolution of the shareholders or of the
Board of Directors, or, in the absence of such a resolution, shall be the
number of Directors elected at the preceding Annual Meeting of
Shareholders. The Directors so elected shall continue in office until
their successors have been elected and qualified.
ARTICLE III
ELECTION OF OFFICERS
The Directors, the clerk, and the Treasurer shall be elected by
ballot each year at the annual meeting of the stockholders. The Chairman
of the Board, the President, the Executive Vice-president, and each Vice-
president shall be elected annually by, and the Chairman of the Board and
the President shall be elected from, The Board of Directors. All such
other officers as the Directors may appoint, as provided in Article II,
shall be elected annually by the Board of Directors.
Any vacancy in the office of Chairman of the Board, President,
Executive Vice-president, Vice-president, Directors, Treasurer, Assistant
Treasurer, or Clerk arising from non-election, resignation, declination,
death, or any other cause, may be filled by the Board of Directors, except
that whenever the number of Directors shall be increased at any special
meeting of the stockholders the additional Directors so provided for shall
be elected by ballot by the stockholders at the same meeting. Said Board
may also elect an officer pro tempore to serve during the disability or
absence of any officer. Officers chosen to fill vacancies shall hold their
offices until new officers are duly chosen by the stockholders or
Directors, as the case may be.
ARTICLE IV
DIRECTORS
Meetings of the Board of Directors may be held at any time and place
at the call of the Chairman of the Board, the President, or any two
Directors. Notice of each meeting shall be given to each Director either
by notice mailed to him at least forty-eight (48) hours before the time of
such meeting, or by a telephone or telegraphic message sent to his place of
business or residence, or other form of notice actually given to him
twenty-four (24) hours before the time of such meetings. However, any
meeting of the Board and all business transacted thereat shall be legal and
valid without such notice if each member of the Board is present in person
or waives notice thereof by writing filed with the records of the meeting
or assents in writing to the recorded proceedings of the meeting.
One-third of the directors then in office shall constitute a quorum,
except that no quorum shall consist of less than two Directors. A number
less than a quorum may adjourn from time to time until a quorum is present.
In the event of such an adjournment, notice of the adjourned meeting shall
be given to all Directors.
The Board of Directors may at any time elect by ballot not less than
five (5) of their members who shall constitute an Executive committee of
the Board, and if such an Executive Committee is elected the Board of
Directors shall make regulations defining the powers and duties of such
Executive Committee and may delegate to it any or all of their powers in
management of the property, business and affairs of the corporation except
so far as is incompatible with these By-laws or with the laws of the
Commonwealth. A majority of the Executive Committee shall constitute a
quorum.
Such Executive Committee shall elect a Chairman and Secretary and
shall keep a record of its doings which at all reasonable times shall be
open to inspection by each member of the Board of Directors. The Chairman
of the Executive Committee shall submit its records to the Board of
Directors at each regular or special meeting of the Board for such action
as said Board may deem proper.
The Directors as a Board shall have the management of the property,
business and affairs of the corporation and they are hereby invested in
such management with all the powers which the corporation itself possesses
so far as such investing is not incompatible with the provisions of these
By-laws or the laws of the Commonwealth. However, so long as the holders
of the outstanding shares of the corporation's preferred stock voting as a
class have not exercised their right to elect a majority of the Board of
Directors of the corporation on the happening of any of the events of
default specified in the preferred stock provisions of these By-laws, any
right of the corporation to terminate, amend, rescind, waive, discharge, or
in any other way alter or change the obligations of the corporation under
any contract with Northeast Nuclear Energy Company covering the maintaining
of an inventory of nuclear core elements for Unit Nos. 1, 2 or 3 of the
Millstone Nuclear Power Station, including, without limitation, the Fuel
Supply Contract dated as of December 1, 1972, (as it is to be amended by a
Contract of Amendment to be dated as of October 1, 1975), by and among the
corporation, The Hartford Electric Light Company, and the Connecticut Light
and Power Company and Northeast Nuclear Energy Company, shall be reserved
to the common stockholders of the corporation.
They may appoint and remove at pleasure such subordinate officers and
employees as may see to them wise.
They may assign such powers and duties to any officers or subordinate
officers or employees as may not be inconsistent with Laws or these
By-laws.
They shall have access to the books, vouchers and funds of the
corporation in the custody of the Treasurer, shall determine upon the form
of the corporate seal and of the certificates of stock, shall fix the
salaries of the officers, and shall declare dividends from time to time as
they may deem for the best interests of the corporation.
They may make contributions to corporations, trusts, funds or
foundations organized and operated exclusively for charitable, scientific
or educational purposes, no part of the earnings of which inures to the
benefit of any private shareholder or individual, in such amounts as they
may deem reasonable up to but not exceeding in any fiscal year in the
aggregate one-half of one percent of the capital and surplus of the
corporation as at the close of the fiscal year last preceding the making of
any such contribution.
The Company shall indemnify each of its Directors and officers
(including persons who serve at its request as Directors, officers, or in
any other similar capacity of another organization in which it has any
interest as a shareholder, creditor or otherwise) against all liabilities
and expenses, including amounts paid in satisfaction of judgments, in
compromise or as fines and penalties, and counsel fees, reasonably incurred
by him in connection with the defense or disposition of any action, suit or
other proceeding, whether civil or criminal, in which he may be involved or
with which he may be threatened, while in office or thereafter, by reason
of his being or having been such a Director or officer, except with respect
to any matter as to which he shall have been adjudicated in such action,
suit or proceeding not to have acted in good faith in the reasonable belief
that his action was in the best interests of the corporation; provided,
however, that as to any matter disposed of by a compromise payment by such
Director or officer pursuant to a consent decree or otherwise, no
indemnification either for said payment or for any other expenses shall be
provided unless such compromise shall be approved as in the best interests
of the corporation, after notice that it involves such indemnification, (a)
by a disinterested majority of the Directors then in office; or (b) by a
majority of the disinterested Directors then in office, provided that there
has been obtained an opinion in writing of independent legal counsel to the
effect that such Director or officer appears to have acted in good faith in
the reasonable belief that his action was in the best interests of the
corporation; or (c) by the holders of majority of the outstanding stock at
the time entitled to vote for Directors, voting as a single class,
exclusive of any stock owned by an interested Director or officer. In
discharging his duty any such Director or officer, when acting in good
faith, may rely upon the books of account of the corporation or of such
other organization, reports made to the corporation or to such other
organization by any of its officers or employees or by counsel,
accountants, appraisers or other experts selected with reasonable care by
the Board of Directors or officers, or upon other records of the
corporation or of such other organization. Expenses incurred with respect
to any such action, suit or proceeding may be advanced by the corporation
prior to the final disposition of such action, suit or proceeding, upon
receipt of an undertaking by or on behalf of the recipient to repay such
amount unless it is ultimately determined that he is entitled to
indemnification. The right of indemnification hereby provided shall not be
exclusive of or affect any other right to which any Director or officer may
be entitled. As used in this paragraph, the terms "Director" and "officer"
include their respective heirs, executors and administrators, and an
"interested" Director or officer is one against whom in such capacity the
proceedings in question or another proceeding on the same or similar
grounds is then pending. Nothing contained in this Article shall be found,
in any action, suit or proceeding to be invalid or ineffective, the
validity and the effect of the remaining parts shall not be affected.
ARTICLE V
CHAIRMAN OF THE BOARD OF DIRECTORS
The Chairman of the Board of Directors shall preside at the meetings
of the Board and shall act in a general advisory capacity to the Board in
regard to all activities of the corporation, and shall have such other
powers and perform such other duties as may from time to time be determined
by the Board.
ARTICLE VI
THE PRESIDENT
The President shall preside at all meetings of the stockholders and
in the absence of the Chairman of the Board at all meetings of the Board of
Directors. The President shall be the chief executive officer of the
corporation and shall have full charge of its business and affairs and
shall perform all the duties of this office prescribed by law and all
powers and duties given him by the Board of Directors.
ARTICLE VII
ECUTIVE VICE-PRESIDENT AND VICE-PRESIDENTS
The Executive Vice-president shall have such powers and perform such
duties as may be assigned to him by the Board of Directors or as may be
delegated to him by the President. In the absence or disability of the
President, or in case of an unfilled vacancy in that office, the Executive
Vice-president shall perform the duties and exercise the powers of the
President.
The Vice-president or Vice-presidents shall perform such duties of a
general or special nature as may be assigned to him or them by the Board of
Directors or as may be delegated to him or them by or through the
President. In case of the absence or disability of the Executive
Vice-president, a Vice-president shall perform all the duties and have all
the powers of the Executive Vice-president. If there are at any time two
or more Vice-presidents, the one to act in place of the Executive
Vice-president shall be selected by the Board of Directors, provided,
however, that prior to the making of such selection by said Board a
Vice-president to act as aforesaid may be appointed by the President, or if
he is unable to make such appointment or fails to do so, by the Chairman of
the Board, and the Vice-president so appointed shall continue to act as
aforesaid until another Vice-president has been appointed for that purpose
by the Board of Directors.
ARTICLE VIII
THE SECRETARY AND THE CLERK
The Secretary shall have such duties as may from time to time be
delegated to him by the Board of Directors.
The Clerk shall be a resident of Massachusetts. He shall be sworn,
and shall record all votes of the corporation in a book to be kept for the
purpose. He shall attend all meetings of stockholders, of the Board of
Directors, and of the Executive Committee. In the absence of the Clerk or
if at any such meeting he shall be otherwise engaged, an Assistant Clerk if
present shall record the votes taken at the meeting, and if no Assistant
Clerk shall be present, a Clerk pro tempore shall be chosen for that
purpose. The Clerk or any Assistant Clerk may furnish certified copies of
any portion of the records of the corporation under its corporate seal.
All Assistant Clerks shall be sworn.
ARTICLE IX
THE TREASURER
The Treasurer when required by the Directors shall give bond with
sureties acceptable to them for the faithful discharge of his duties and in
such sum as the Directors may determine, and the premium may, by vote of
the Board of Directors, be paid from the funds of the corporation.
He shall be the transfer agent of the stock of the corporation unless
a special transfer agent is appointed by the Directors, shall keep a record
of the names and residences of all the stockholders, shall have the custody
of the corporate seal and of all the moneys, funds and valuable papers and
documents of the corporation except his own bond which shall be in the
custody of the President.
He shall deposit all the funds of the corporation in such bank or
banks as the Directors shall designate to the credit of the corporation by
its corporate name, subject to the checks of the corporation signed by its
Treasurer or an Assistant Treasurer or such other officer or employee as
may be designated for that purpose by the vote of the Directors, but with
such requirements, if any, as to joint signatures and such other
limitations, if any, of the authority as aforesaid of any signing officer
or employee as the Directors may see fit to impose.
He shall issue notes and accept drafts on behalf of the corporation
only when authorized thereto by the Directors.
He shall keep accurate books of account of the corporation's
transactions which shall be the property of the corporation, which together
with all its property in his custody shall be subject at all times to
inspection and control of the Directors.
ARTICLE X
ASSISTANT TREASURER
Each Assistant Treasurer, if any, shall have such powers and duties
as may be given him by the Directors and shall give bond when required by
the Directors with sureties acceptable to them for the faithful discharge
of his duties in such sum as the Directors may determine, and the premiums
may, by vote of the Board of Directors, be paid by the corporation.
ARTICLE XI
SALES, LEASES, AND CONVEYANCES OF REAL ESTATE
The President and Treasurer may in their discretion, to the extent
authorized by law and by vote of the Directors or of the Executive
Committee, lease for any term of time and convey all of its real estate
including water power and release or modify easements and other rights in
real estate whether granted to or by the corporation; and all deeds,
conveyances and leases of real estate including water power and releases
and modifications of easements and of other rights in real estate of the
corporation, unless otherwise provided by vote of the corporation, shall be
made in the name of the corporation under its corporate seal, and be signed
by the President, the Executive Vice-president, or any Vice-president
thereto authorized by a vote of the Directors or of the Executive Committee
and may be acknowledged by any person signing as aforesaid.
ARTICLE XII
CERTIFICATES OF STOCK-TRANSFERS
Certificates of stock may be signed by the President or a
Vice-president and the Treasurer or an Assistant Treasurer. Such
certificates shall be in such form as the Directors may approve, and shall
also bear the seal of the corporation which shall be in the form
theretofore used by the corporation, or in a newer form adopted by the
Directors.
Shares of stock may be transferred by assignment thereof in writing,
accompanied by delivery of the certificates; but no such transfer of stock
shall affect the right of the corporation to pay any dividend thereon or to
treat the holder of record as the holder in fact until the transfer has
been recorded upon the books of the corporation or a new certificate has
been issued to the person to whom the stock has been transferred.
In case of the loss of a certificate, a duplicate may be issued on
such reasonable terms as the Directors shall prescribe.
ARTICLE XIII
CLOSING OF TRANSFER BOOKS
The transfer books of the corporation may be closed for not exceeding
fifteen (15) days next prior to any meeting of the stock-holders and at
such other times and for such reasonable periods as may be determined by
the Board of Directors.
ARTICLE XIV
FISCAL YEAR
The fiscal year of the corporation shall end on the thirty-first day
of December in each year.
ARTICLE XV
TRANSFER AGENT AND REGISTRAR
If the Board of Directors deem it advisable to have a transfer agent
other than the Treasurer, they may appoint any Bank or Trust Company to
that office. They may appoint the same or any other Bank or Trust Company
as Registrar of stock certificates if it appear desirable to have the stock
registered. They may terminate the authority of any Bank acting in either
capacity whenever it shall seem wise.
ARTICLE XVI
SENIOR STOCK PROVISIONS
The Company's capital stock includes a class of capital stock
designated "Common Stock," a class of capital stock designated "Preferred
Stock," and a class of capital stock designated "Class A Preferred Stock."
The authorized shares of Common Stock, Preferred Stock and Class A
Preferred Stock are the number of shares authorized in the Company's
articles of organization, as amended from time to time. The Preferred
Stock and the Class A Preferred Stock are hereinafter for convenience of
reference sometimes collectively referred to as the "Senior Stock," and
either class may hereinafter individually be referred to as "Senior Stock."
Shares of Preferred Stock and shares of Class A Preferred Stock shall rank
on a parity in respect of dividends or payment in case of liquidation, and,
to the extent not fixed and determined by these by-laws or the Company's
articles of organization or otherwise by law, shall have the same rights,
preferences and powers. The general terms, limitations and relative rights
and preferences of each share of Preferred Stock and each share of Class A
Preferred Stock shall be determined in accordance with the following
Sections:
Section 1. Issuance of Senior Stock
Shares of Preferred Stock may be issued from time to time in one or
more series on such terms and for such consideration as may be determined
by the Board of Directors. Shares of Class A Preferred Stock may be issued
from time to time in one or more series on such terms and for such
consideration as may be determined by the Board of Directors. The series
designation, dividend rate, redemption prices, and any other terms,
limitations and relative rights and preferences of each series of either
class of Senior Stock shall be determined by the Board of Directors to the
extent not fixed and determined by this Article or the Company's articles
of organization.
Section 2. Dividends
A. The holders of either class of the Senior Stock shall receive,
but only when and as declared by the Board of Directors, cumulative
dividends at the rate provided for the particular series and payable on
such dividend payment dates in each year as said Board may determine, such
dividends to be payable to holders of record on such dates as may be fixed
by said Board but not more than 45 days before each dividend date,
provided, however, that dividends shall not be declared and set apart for
payment, or paid, on Senior Stock of any one class and series, for any
dividend period, unless dividends have been or are contemporaneously
declared and set apart for payment, or paid, on Senior Stock of all series
for all dividend periods terminating on the same or an earlier date.
B. Dividends on each share of Senior Stock shall be cumulative from
the date of issue thereof or from such earlier date as the Board of
Directors may determine therefor. Unless full cumulative dividends to the
last preceding dividend date shall have been paid or set apart for payment
on all outstanding shares of Senior Stock, no dividend shall be paid on any
junior stock. The term "junior stock" means Common Stock or any other
stock of the Company subordinate to the Senior Stock in respect of
dividends or payments in liquidation.
C. So long as any shares of Senior Stock are outstanding, the
Company shall not declare any dividends or make any other distributions in
respect of outstanding shares of any junior stock of the Company, other
than dividends or distributions in shares of junior stock, or purchase or
otherwise acquire for value any outstanding shares of junior stock (the
declaration of any such dividend or the making of any such distribution,
purchase or acquisition being herein called a "junior stock payment") in
contravention of the following:
(1) If and so long as the junior stock equity (hereinafter
defined), adjusted to reflect the proposed junior stock payment, at the end
of the calendar month immediately preceding the calendar month in which the
proposed junior stock payment is to be made is less than 20% of total
capitalization (hereinafter defined) at that date, as so adjusted, the
Company shall not make such junior stock payment in an amount which,
together with all other junior stock payments made within the year ending
with and including the date on which the proposed junior stock payment is
to be made, exceeds 50% of the net income of the Company available for
dividends on junior stock for the 12 full calendar months immediately
preceding the calendar month in which such junior stock payment is made,
except in an amount not exceeding the aggregate of junior stock payments
which under the restrictions set forth above in this paragraph (1) could
have been, and have not been, made.
(2) If and so long as the junior stock equity, adjusted to
reflect the proposed junior stock payment, at the end of the calendar month
immediately preceding the calendar month in which the proposed junior stock
payment is to be made, is less than 25% but not less than 20% of the total
capitalization at that date, as so adjusted, the Company shall not make
such junior stock payment in an amount which, together with all other
junior stock payments made within the year ending with and including the
date on which the proposed junior stock payment is to be made, exceeds 75%
of the net income of the Company available for dividends on the junior
stock for the 12 full calendar months immediately preceding the calendar
month in which such junior stock payment is made, except in an amount not
exceeding the aggregate of junior stock payments which under the
restrictions set forth above in this paragraph (2) could have been, and
have not been, made.
D. The term "junior stock equity" means the aggregate of the part
value of or stated capital represented by, the outstanding shares of junior
stock, all earned surplus, capital or paid-in surplus, and any premiums on
the junior stock then carried on the books of the Company, less:
(1) the excess, if any, of the aggregate amount payable on
involuntary liquidation of the Company upon all outstanding shares of
Senior Stock over the sum of (i) the aggregate par or stated value of such
shares and (ii) any premiums thereon;
(2) any amounts on the books of the Company known, or estimated
if not known, to represent the excess, if any, of recorded value over
original cost of used or useful utility plant; and
(3) any intangible items set forth on the asset side of the
balance sheet of the Company as a result of accounting convention, such as
unamortized debt discount and expense; provided, however, that no
deductions shall be required to be made in respect of items referred to in
clauses (2) and (3) of this subsection D in cases in which such items are
being amortized or are provided for, or are being provided for, by
reserves.
E. The term "total capitalization" means the aggregate of:
(1) the principal amount of all outstanding indebtedness of the
Company maturing more than 12 months after the date of issue thereof; and
(2) the par value or stated capital represented by, and any
premiums carried on the books of the Company in respect of, the outstanding
shares of all classes of the capital stock of the Company, earned surplus,
and capital or paid-in surplus, less any amounts required to be deducted
pursuant to clauses (2) and (3) of subsection D of this Section 2 in the
determination of junior stock equity.
Section 3. Redemption or Purchase of Senior Stock
A. All or any part of any series of Senior Stock may by vote of
the Board of Directors be called for redemption at any time at the
redemption price provided for the particular series and in the manner
hereinbelow provided. Subject to the provisions of subsection B of this
Section 3, all or any part of any series of Senior Stock may be called for
redemption without calling all or any part of any other series of Senior
Stock. If less than all of any series of Senior Stock is so called, the
Transfer Agent shall determine by lot or in some other manner approved by
the Board of Directors the shares of such series of Senior Stock to be
called.
B. No call for redemption of less than all shares of Senior Stock
outstanding shall be made if the Company shall be in arrears in respect of
payment of dividends on any shares of Senior Stock outstanding.
C. The sums payable in respect of any shares of Senior Stock so
called shall be payable at the office of an incorporated bank or trust
company in good standing. Notice of such call stating the redemption date
shall be mailed not less than 30 days before the redemption date to each
holder of record of shares of Senior Stock so called at his address as it
appears upon the books of the Company.
D. The Company shall, before the redemption date, deposit with
said bank or trust company all sums payable with respect to shares of
Senior Stock so called. After such mailing and deposit the holders of
shares of Senior Stock so called for redemption shall cease to have any
right to future dividends or other rights or privileges as stockholders
in respect of such shares and shall be entitled to look for payment on and
after the redemption date only to the sums so deposited with said bank or
trust company for their respective amounts. Shares so redeemed may be
reissued but only subject to the limitations imposed upon the issue of
Senior Stock.
E. The Company may at any time purchase all or any of the
then outstanding shares of Senior Stock of any class and series upon the
best terms reasonably obtainable, but not exceeding the then current
redemption price of such shares, except that no such purchase shall be made
if the Company shall be in arrears in respect of payment of dividends on
any shares of Senior Stock outstanding or if there shall exist an event of
default as defined in Section 5 hereof.
Section 4. Amounts Payable on Liquidation
A. The holders of any series of Senior Stock shall receive upon
any voluntary liquidation, dissolution or winding up of the Company the
then current redemption price of the particular series and if such action
is involuntary $100 per share in the case of the Preferred Stock and $25
per share in the case of the Class A Preferred Stock, plus in each case all
dividends accrued and unpaid to the date of such payment, before any
payment in liquidation is made on any junior stock.
B. If the net assets of the Company available for distribution on
liquidation to the holders of Senior Stock shall be insufficient to pay
said amounts in full, then such net assets shall be distributed among the
holders of Senior Stock, who shall receive a common percentage of the full
respective preferential amounts.
Section 5. Voting Powers
A. Except as provided in this Article or in the Company's articles
of organization and as provided by law, the holders of Senior Stock shall
have no voting power or right to notice of any meeting.
B. Whenever the holders of the Senior Stock shall have the
right to vote or consent to an action as provided in these Articles or the
Company's articles of organization or as provided by law, both classes of
Senior Stock shall (except as provided below) vote together as a single
class, each outstanding share of Preferred Stock entitled to vote and each
outstanding share of Class A Preferred Stock entitled to vote having such
voting rights as are proportionate to the ratio of (i) the par value
represented by such share to (ii) the par value represented by all shares
of Senior Stock then outstanding. Whenever only one class of the Senior
Stock shall have the right to vote or consent to an action as provided in
these Articles or the Company's articles of organization or as provided by
law, or whenever each class of the Senior Stock shall be entitled or be
required to vote as a separate class on a matter, each outstanding share
of such class entitled to vote shall be entitled to one vote on each such
matter.
C. Whenever dividends on any share of Senior Stock shall be in
arrears in an amount equal to or exceeding four quarterly dividend
payments, or whenever there shall have occurred some default in the
observance of any of the provisions of this Article, or some default on
which action has been taken by debentureholders, bondholders or the trustee
of any deed of trust or mortgage of the Company, or whenever the Company
shall have been declared bankrupt or a receiver of its property shall have
been appointed (any of said conditions being herein called an "event of
default"), then the holders of Senior Stock shall be given notice of all
stockholders' meetings and shall have the right voting together as a class
to elect the smallest number of directors necessary to constitute a
majority of the Board of Directors of the Company and the exclusive right
voting together as a class to amend the by-laws to make such appropriate
increase in the number of directorships as may be required to effect such
election. When all arrears of dividends shall have been paid and such
event of default shall have been terminated, all the rights and powers of
the holders of Senior Stock to receive notice and to vote shall cease,
subject to being again revived on any subsequent event of default.
D. Whenever the right to elect directors shall have accrued to the
holders of Senior Stock the Company shall call a meeting of stockholders
for the election of directors and, if necessary, the amendment of the
by-laws to permit the holders of Senior Stock to exercise their rights
pursuant to subsection C of this Section 5, such meeting to be held not
less than 45 days and not more than 90 days after the accrual of such
rights. When such rights shall cease, the Company shall, within seven days
from the delivery to the Company of a written request therefor by any
stockholder, cause a meeting of the stockholders to be held within 30 days
from the delivery of such request for the purpose of electing a new Board
of Directors. Forthwith, upon the election of such new Board of Directors,
the directors in office immediately prior to such election (other than
persons elected directors in such election) shall be deemed removed from
office without further action by the Company.
Section 6. Action Requiring Certain Consent of Senior
Stockholders
A. So long as any Senior Stock is outstanding, the Company,
without the affirmative vote or written consent of at least a majority in
interest of the Senior Stock then outstanding voting or giving consent
together as a class shall not:
(1) Issue or assume any unsecured notes, unsecured debentures
or other securities representing unsecured debt (other than for the purpose
of refunding or renewing outstanding unsecured securities issued or assumed
by the Company resulting in equal or longer maturities or redeeming or
otherwise retiring all outstanding shares of Senior Stock) if immediately
after such issue or assumption (a) the total outstanding principal amount
of all unsecured notes, unsecured debentures or other securities
representing unsecured debt of the Company will thereby exceed 20% of the
aggregate of all outstanding secured debt of the Company and the capital
stock, premiums thereon, and surplus of the Company, as stated on its
books, or (b) the total outstanding principal amount of all unsecured debt
of the Company of maturities of less than 10 years will thereby exceed 10%
of the aggregate of all outstanding secured debt of the Company and the
capital stock, premiums thereon, and surplus of the Company, as stated on
its books. For the purposes of this subsection A, the payment due upon the
maturity of unsecured debt having an original single stated maturity of 10
years or more shall not be regarded as unsecured debt with a maturity of
less than 10 years until within three years of the maturity thereof, and
none of the payments due upon any unsecured serial debt having an original
stated maturity for the final serial payment of 10 years or more shall be
regarded as unsecured debt of a maturity of less than 10 years until within
three years of the maturity of the final serial payment.
(2) Issue, sell or otherwise dispose of any shares of the then
authorized but unissued Senior Stock or any other stock ranking on a parity
with or having a priority over Senior Stock in respect of dividends or of
payments in liquidation, or reissue, sell or otherwise dispose of any
reacquired shares of Senior Stock or such other stock, other than to
refinance an equal par value or stated value of Senior Stock or of stock
ranking on a parity with or having priority over Senior Stock in respect of
dividends or of payments in liquidation, if:
(a) For a period of 12 consecutive calendar months within
15 calendar months immediately preceding the calendar month in which any
such shares shall be issued, the Income before Interest Charges of the
Company for said period available for the payment of interest determined in
accordance with the systems of accounts then prescribed for the Company by
the Department of Public Utilities of the Commonwealth of Massachusetts (or
by such other official body as may then have authority to prescribe such
systems of accounts) but in any event after deducting depreciation charges
and taxes (including income taxes) and including, in any case in which such
stock is to be issued, sold or otherwise disposed of in connection with the
acquisition of any property, the Income before Interest Charges of the
property to be so acquired, computed as nearly as practicable in the manner
specified above, shall not have been at least one and one-half (1 1/2)
times the sum of (i) the interest charges for one year on all indebtedness
which shall then be outstanding (excluding interest charges on any
indebtedness, proposed to be retired in connection with the issue, sale or
other disposition of such shares), and (ii) an amount equal to all annual
dividend requirements on all outstanding shares of Senior Stock and all
other stock, if any, ranking on a parity with or having priority over
Senior Stock in respect of dividends or of payments in liquidation,
including the shares proposed to be issued, but not including any shares
proposed to be retired in connection with such issue, sale or other
disposition; or if
(b) Such issue, sale or disposition would bring the
aggregate of the amount payable in connection with an involuntary
liquidation of the Company with respect to all shares of Senior Stock and
all shares of stock, if any, ranking on a parity with or having priority
over Senior Stock in respect of dividends or of payments in liquidation to
an amount in excess of the sum of the junior stock equity. If for the
purposes of meeting the requirements of this clause (b), it shall have been
necessary to take into consideration any earned surplus of the Company, the
Company shall not thereafter pay any dividends on or make any distributions
in respect of, or make any payment for the purchase or other acquisition
of, junior stock which would result in reducing the junior stock equity to
an amount less than the amount payable on involuntary liquidation of the
Company in respect of Senior Stock and all shares ranking on a parity with
or having a priority over Senior Stock in respect of dividends or of
payments in liquidation at the time outstanding.
If during the period for which Income before Interest Charges is to be
determined for the purpose set forth in this paragraph (2), the amount, if
any, required to be expended by the Company during such period for property
additions pursuant to a renewal and replacement fund or similar fund
established under any indenture of mortgage or deed of trust of the Company
shall exceed the amount deducted during such period in the determination of
such Income before Interest Charges on account of depreciation and
amortization of electric plan acquisition adjustments, such excess shall
also be deducted in determining such Income before Interest Charges.
B. So long as any Senior Stock is outstanding, the Company,
without the affirmative vote or written consent of at least two-thirds in
interest of the Senior Stock then outstanding voting or giving consent
together as a class shall not authorize any shares of any class of stock
having a priority over the Senior Stock in respect of dividends or of
payments in liquidation or issue any shares of any such prior ranking stock
more than 12 months after the date of the vote or consent authorizing such
prior ranking stock.
C. The provisions of this Article may be changed only by the
affirmative vote or written consent of at least two-thirds in interest of
the issued and outstanding shares of each class of capital stock of the
Company voting or giving their consent in each case separately as a class;
provided, however, that if any such change or proposed change would affect
only one class of Senior Stock, then such change may be effected only by
the affirmative vote or written consent of at least two-thirds in interest
of the issued and outstanding shares of Common Stock and at least
two-thirds in interest of the issued and outstanding shares of the class of
Senior Stock that is affected, voting or giving their consent in each case
separately as a class; and provided further, however, the holders of
Senior Stock shall not be entitled to vote on an increase in the number of
authorized shares of Preferred Stock or Class A Preferred Stock. In no
event shall any reduction of the dividend rate or of the amounts payable
upon redemption or liquidation with respect to any share of Senior Stock be
made without the consent of the holder thereof, and no such reduction in
respect of the shares of any particular series of Senior Stock shall be
made without the consent of all the holders of shares of such series.
D. No share of Senior Stock shall be deemed to be "outstanding"
within the meaning of this Section 6 or of Section 7 if, at or prior to the
time when the approval herein or therein referred to would otherwise be
required, provision shall be made for its redemption, including a deposit
complying with the requirements of subsection D of Section 3.
Section 7. Merger, Consolidation or Sale of All Assets Except
with the affirmative vote or written consent of a majority in interest of
Senior Stock then outstanding voting or giving consent together as a class,
the Company shall not merge or consolidate with or into any other
corporation or sell or otherwise dispose of all or substantially all of its
assets (except by mortgage or pledge) unless such merger, consolidation,
sale or other disposition, or the issuance or assumption of securities in
the effectuation thereof shall have been ordered, approved or permitted
under the Public Utility Holding Company Act of 1935.
Section 8. No Preemptive Right
Except as otherwise expressly provided by law, the holders of Senior
Stock shall have no preemptive right to subscribe to any further issue of
additional shares of Senior Stock or of any other class of stock now or
hereafter authorized, nor for any future issue of bonds, debentures, notes
or other evidence of indebtedness or other security convertible into stock.
If it is expressly required by law that, notwithstanding the provisions of
the preceding sentence, any such further or future issue be offered
proportionately to the stockholders, the holders of Preferred Stock only
shall be entitled to subscribe for new or additional Preferred Stock, the
holders of Class A Preferred Stock only shall be entitled to subscribe for
new or additional Class A Preferred Stock and the holders of Common Stock
only shall be entitled to subscribe for new or additional Common Stock; and
notice of such increase as required by law need be given and the new shares
need be offered proportionately only to the stockholders who are so
entitled to subscribe.
Section 9. Immunity of Directors, Officers and Agents No
director, officer or agent of the Company shall be held personally
responsible for any action taken in good faith though subsequently adjudged
to be in violation of this Article.
Section 10. Transfer Agent
The Company shall always have at least one transfer agent for Senior
Stock, which shall be an incorporated bank or trust company of good
standing.
ARTICLE XVII
PROVISIONS WITH RESPECT TO THE SERIES OF PREFERRED STOCK
1. 9.60% Preferred Stock, Series A
There shall be a series of Preferred Stock designated "9.60%
Preferred Stock, Series A," and consisting of 150,000 shares with an
aggregate par value of $15,000,000 and a par value per share of $100. The
dividend rate and redemption prices as to said 9.60% Preferred Stock,
Series A, shall be as follows:
(a) Dividends on said 9.60% Preferred Stock, Series A, shall be
at the rate of 9.60% per share per annum, and no more, and shall be
cumulative from June 1, 1970. Said dividends, when declared, shall be
payable on the first days of March, June, September and December in each
year.
(b) Redemption Prices of said 9.60% Preferred Stock, Series A,
shall be $111.19 per share if redeemed on or before June 1, 1975, $108.79
per share if redeemed after June 1, 1975 and on or before June 1, 1980,
$106.39 per share if redeemed after June 1, 1980 and on or before June 1,
1985, and $103.99 per share if redeemed after June 1, 1985, plus in all
cases that portion of the quarterly dividend accrued thereon to the
redemption date and all unpaid dividends thereon, if any.
2. 7.72% Preferred Stock, Series B
There shall be a series of Preferred Stock designated "7.72%
Preferred Stock, Series B," and consisting of 200,000 shares with an
aggregate par value of $20,000,000 and a par value per share of $100. The
dividend rate and redemption prices as to said 7.72% Preferred Stock,
Series B, shall be as follows:
(a)Dividends on said 7.72% Preferred Stock, Series B, shall be
at the rate of 7.72% per share per annum, and no more, and shall be
cumulative from October 1, 1971. Said dividends, when declared, shall be
payable on the first days of January, April, July and October in each year.
(b)Redemption Prices of said 7.72% Preferred Stock, Series B,
shall be $109.30 per share if redeemed on or before October 1, 1976,
$107.37 per share if redeemed after October 1, 1976 and on or before
October 1, 1981, $105.44 per share if redeemed after October 1, 1981 and on
or before October 1, 1986, and $103.51 per share if redeemed after October
1, 1986, plus in all cases that portion of the quarterly dividend accrued
thereon to the redemption date and all unpaid dividends thereon, if any,
provided, however, that none of the 7.72% Preferred Stock, Series B shall
be redeemed prior to October 1, 1976, if such redemption is for the purpose
of or in anticipation of refunding such 7.72% Preferred Stock, Series B
through the use, directly or indirectly, of finds borrowed by the Company
or of the proceeds of the issue by the Company of shares of any stock
ranking prior to or on a parity with the 7.72% Preferred Stock, Series B as
to dividends or assets, if such borrowed funds or such shares have an
effective interest cost or effective dividend cost to the Company (computed
in accordance with generally accepted financial principles), as the case
may be, of less than 7.69% per annum.
3. 16% Preferred Stock, Series C
There shall be a series of Preferred Stock designated "16% Preferred
Stock, Series C," and consisting of 150,000 shares with an aggregate par
value of $15,000,000 and a par value per share of $100. The dividend rate
and redemption prices as to said 16% Preferred Stock, Series C, shall be as
follows:
(a)Dividends on said 16% Preferred Stock, Series C, shall be at
the rate of 16% per share per annum, and no more, and shall be cumulative
from date of issuance. Said dividends, when declared, shall be payable on
the first days of March, June, September and December in each year,
commencing March 1, 1982.
(b)Redemption Prices of said 16% Preferred Stock, Series C,
shall be $116.00 per share if redeemed on or before December 1, 1986,
$112.00 per share if redeemed after December 1, 1986 and on or before
December 1, 1991, $108.00 per share if redeemed after December 1, 1991 and
on or before December 1, 1996, $104.00 per share if redeemed after December
1, 1996 and on or before December 1, 2001, and at $101.60 per share if
redeemed after December 1, 2001, plus in all cases that portion of the
quarterly dividend accrued thereon to the redemption date and all unpaid
dividends thereon, if any; provided, however, that none of the 16%
Preferred Stock, Series C shall be redeemed prior to December 1, 1986, if
such redemption is for the purpose of or in anticipation of refunding such
16% Preferred Stock, Series C through the use, directly or indirectly, of
funds borrowed by the Company or of the proceeds of the issue by the
company of shares of any stock ranking prior to or on a parity with the 16%
Preferred Stock, Series C as to dividends or assets, if such borrowed funds
or such shares have an effective interest cost or effective dividend cost
to the Company (computed in accordance with generally accepted financial
principles), as the case may be, of less than 16.59% per annum.
(c)As and for a sinking fund for said 16% Preferred Stock,
Series C, commencing on December 1, 1986 and on or before each December 1
in each year thereafter so long as any shares of the 16% Preferred Stock,
Series C remain outstanding, the Company shall, to the extent of any funds
of the Company legally available therefor and except as otherwise
restricted by the Company's Statement of Preferred Stock Provisions, redeem
7,500 shares of 16% Preferred Stock, Series C (or such lesser number of
such shares as remain outstanding) at $100 per share plus accrued dividends
to the date of redemption; provided, however, that if in any year the
Company does not redeem the full number of shares of 16% Preferred Stock,
Series C required to be redeemed pursuant to this sinking fund, the
deficiency shall be made good on the next December 1 on which the Company
has funds legally available for, and is otherwise permitted to effect, the
redemption of shares of 16% Preferred Stock, Series C, pursuant to this
sinking fund. The number of shares of 16% Preferred Stock, Series C,
redeemed on any December 1 shall be reduced by the number of such shares
purchased and cancelled by the Company during the preceding twelve-month
period or redeemed during such period pursuant to subsection (b) hereof.
Any shares so redeemed or purchased or cancelled may be given the status of
authorized but unissued shares or Preferred Stock, but none of such shares
shall be reissued as shares of 16% Preferred Stock, Series C. The Company
shall have the option, which shall be noncumulative, to redeem on December
1, 1986 and on each December 1 thereafter up to an additional 7,500 shares
of 16% Preferred Stock, Series C, at the sinking fund redemption price. No
such optional sinking fund shall operate to reduce the number of shares of
the 15% Preferred Stock, Series C, required to be redeemed pursuant to the
mandatory sinking fund provisions hereinabove set forth. In the event that
the Company shall at any time fail to make a full mandatory sinking fund
payment on any sinking fund payment date, the Company shall not pay any
dividends or make any other distributions in respect of outstanding shares
of any junior stock (as that term is defined in Subsection A of Section of
Article XVI of the by-laws of the Company) of the Company, other than
dividends or distributions in shares of junior stock, or purchase or
otherwise acquire for value any out-standing shares of junior stock, until
all such payments have been made.
4. Adjustable Rate Preferred Stock, Series D
There shall be a series of Preferred Stock designated "Adjustable
Rate Preferred Stock, Series D", and consisting of 350,000 shares with an
aggregate par value of $35,000,000 and a par value per share of $100. The
dividend rate provisions, redemption prices and sinking fund provisions as
to said Adjustable Rate Preferred Stock, Series D, shall be as follows:
(a)The dividend per share on said Adjustable Rate Preferred
Stock, Series D, shall be (1) at the rate of 12% per annum per share for
the Initial Dividend Payment Period (as herein defined) (2) at the rate of
forty-one hundredth (40/100th) of one percentage point above the Applicable
Rate (as herein defined), from time to time in effect, for each subsequent
quarterly Dividend Period (as herein defined); provided, however, the
dividend rate for any Dividend Period (including the Initial Dividend
Payment Period) shall not be at a rate of less than 8% per annum per share
or greater than 13% per annum per share. Dividends shall be cumulative
from the date of issuance. Except as provided below in this paragraph,
the "Applicable Rate" for any Dividend Period shall be the highest of (i)
the Treasury Bill Rate, (ii) the Ten Year Constant Maturity Rate and (iii)
the Twenty Year Constant Maturity Rate (each as hereinafter defined) for
such Dividend Period. If the Company determines in good faith that for any
reason one or more of such rates cannot be determined for a particular
Dividend Period, then the Applicable Rate for such Dividend Period shall be
the higher of whichever of such rates can be so determined. If the Company
determines in good faith that none of such rates can be determined for a
particular Dividend Period, then the Applicable Rate in effect for the
preceding Dividend Period shall be continued for such Dividend Period.
Except as provided below in this paragraph, the "Treasury Bill
Rate" for each Dividend Period shall be the arithmetic average of the two
most recent weekly per annum market discount rates (or the one weekly per
annum market discount rate, if only one such rate shall be published during
the relevant Calendar Period (as defined below)) for three-month U.S.
Treasury bills, as published weekly by the Federal Reserve Board or its
successor agency during the Calendar Period immediately prior to the ten
calendar days immediately preceding the Dividend Payment Date for the
dividend period immediately prior to the Dividend Period for which the
dividend rate on the Adjustable Rate Preferred Stock, Series D is being
determined. If the Federal Reserve Board or its successor agency does not
publish such a weekly per annum market discount rate during such Calendar
Period, then the Treasury Bill Rate for such Dividend Period shall be the
arithmetic average of the two most recent weekly per annum market discount
rates (or the one weekly per annum market discount rate, if one such rate
shall be published during the relevant Calendar Period) for three-month
U.S. Treasury bills, as published weekly during such Calendar Period by any
Federal Reserve Bank or by any U.S. Government department or agency
selected by the Company. If a per annum market discount rate for
three-month U.S. Treasury bills shall not be published by the Federal
Reserve Board or its successor agency or by any Federal Reserve Bank or by
any U.S. Government department or agency during such Calendar Period, then
the Treasury Bill Rate for such Dividend Period shall be the arithmetic
average of the two most recent weekly per annum market discount rates (or
the one weekly per annum market discount rate, if one such rate shall be
published during the relevant Calendar Period) for all of the U.S. Treasury
bills then having maturities of not less than 80 nor more than 100 days, as
published during such Calendar Period by the Federal Reserve Board or its
successor agency or, if the Federal Reserve Board or its successor agency
shall not publish such rates, by any Federal Reserve Bank or by any U.S.
Government department or agency selected by the Company. If the Company
determines in good faith that for any reason no such U.S. Treasury bill
rates are published as provided above during such Calendar Period, then the
Treasury Bill Rate for such Dividend Period shall be the arithmetic average
of the per annum market discount rates based upon the closing bids during
such Calendar Period for each of the issues of marketable non-interest
bearing U.S. Treasury securities with a maturity of not less than 80 nor
more than 100 days from the date of each such quotation, as quoted daily
for each business day in New York City (or less frequently if daily
quotations shall not be generally available) to the Company by at least
three recognized U.S. Government securities dealers selected by the
Company. If the Company determines in good faith that for any reason the
Company cannot determine the Treasury Bill Rate for any Dividend Period as
provided above in this paragraph, the Treasury Bill Rate for such Dividend
Period shall be the arithmetic average of the per annum market discount
rates based upon the closing bids during the related Calendar Period for
each of the issues of marketable interest-bearing U.S. Treasury securities
with a maturity of not less than 80 nor more than 100 days from the date of
each such quotation, as quoted daily for each business day in New York City
(or less frequently if daily quotations shall not be generally available)
to the Company by at least three recognized U.S. Government securities
dealers selected by the Company.
Except as provided below in this paragraph, the "Ten Year
Constant Maturity Rate" for each Dividend Period shall be the arithmetic
average of the two most recent weekly per annum Ten Year Average Yields (or
the one weekly per annum Ten Year Average Yield, if only one such Yield
shall be published during the relevant Calendar Period as provided below),
as published weekly by the Federal Reserve Board or its successor agency
during the Calendar Period immediately prior to the ten calendar days
immediately preceding the Dividend Payment Date prior to the Dividend
Period for which the dividend rate on the Adjustable Rate Preferred Stock,
Series D is being determined. If the Federal Reserve Board or its
successor agency does not publish such a weekly per annum Ten Year Average
Yield during such Calendar Period, then the Ten Year Constant Maturity Rate
for such Dividend Period shall be the arithmetic average of the two most
recent weekly per annum Ten Year Average Yields (or the one weekly per
annum Ten Year Average Yield, if only one such Yield shall be published
during such Calendar Period), as published weekly during such Calendar
Period by any Federal Reserve Bank or by any U.S. Government department or
agency selected by the Company. If a per annum Ten Year Average Yield
shall not be published by the Federal Reserve Board or its successor agency
or by any Federal Reserve Bank or by any U.S. Government department or
agency during such Calendar Period, then the Ten Year Constant Maturity
Rate for such Dividend Period shall be the arithmetic average of the two
most recent weekly per annum average yields to maturity (or the one
weekly average yield to maturity, if only one such yield shall be
published during such Calendar Period) for all of the actively traded
marketable U.S. Treasury fixed interest rate securities (other than Special
Securities (as defined below)) then having maturities of not less than
eight nor more than twelve years, as published during such Calendar Period
by the Federal Reserve Board or its successor agency or, if the Federal
Reserve Board or its successor agency shall not publish such yields, by any
Federal Reserve Bank or by any U.S. Government department or agency
selected by the Company. If the Company determines in good faith that for
any reason the Company cannot determine the Ten Year Constant Maturity Rate
for any Dividend Period as provided above in this paragraph, then the Ten
Year Constant Maturity Rate for such Dividend Period shall be the
arithmetic average of the per annum average yields to maturity based upon
the closing bids during such Calendar Period for each of the issues of
actively traded marketable U.S. Treasury fixed interest rate securities
(other than Special Securities) with a final maturity date not less than
eight nor more than twelve years from the date of each such quotation, as
quoted daily for each business day in New York City (or less frequently if
daily quotations shall not be generally available) to the Company by at
least three recognized U.S. Government securities dealers selected by the
Company.
Except as provided below in this paragraph, the "Twenty Year
Constant Maturity Rate" for each Dividend Period shall be the arithmetic
average of the two most recent weekly per annum Twenty Year Average Yields
(or the one weekly per annum Twenty Year Average Yield, if only one such
Yield shall be published during the relevant Calendar Period), as published
weekly by the Federal Reserve Board or its successor agency during the
Calendar Period immediately prior to the ten calendar days immediately
preceding the Dividend Payment Date prior to the Dividend Period for which
the dividend rate on the Adjustable Rate Preferred Stock, Series D is being
determined. If the Federal Reserve Board or its successor agency does not
publish such a weekly per annum Twenty Year Average Yield during such
Calendar Period, then the Twenty Year Constant Maturity Rate for such
Dividend Period shall be the arithmetic average of the two most recent
weekly per annum Twenty Year Average Yields (or the one weekly per annum
Twenty Year Average Yield, if only one such Yield shall be published during
such Calendar Period), as published weekly during such Calendar Period by
any Federal Reserve Bank or by any U.S. Government department or agency
selected by the Company. If a per annum Twenty Year Average Yield shall
not be published by the Federal Reserve Board or its successor agency or by
any Federal Reserve Bank or by any U.S. Government department or agency
during such Calendar Period, then the Twenty Year Constant Maturity Rate
for such Dividend Period shall be the arithmetic average of the two most
recent weekly per annum average yields to maturity (or the one weekly
average yield to maturity, if only one such yield shall be published during
such Calendar Period) for all of the actively traded marketable U.S.
Treasury fixed interest rate securities (other than Special Securities)
then having maturities of not less than eighteen nor more than twenty-two
years, as published during such Calendar Period by the Federal Reserve
Board or its successor agency or, if the Federal Reserve Board or its
successor agency shall not publish such yields, by any Federal Reserve Bank
or by any U.S. Government department or agency selected by the Company. If
the Company determines in good faith that for any reason the Company cannot
determine the Twenty Year Constant Maturity Rate for any Dividend Period as
provided above in this paragraph, then the Twenty Year Constant Maturity
Rate for such Dividend Period shall be the arithmetic average of the per
annum average yields to maturity based upon the closing bids during such
Calendar Period for each of the issues of actively traded marketable U.S.
Treasury fixed interest rate securities (other than Special Securities)
with a final maturity date not less than eighteen nor more than twenty-two
years from the date of each such quotation, as quoted daily for each
business day in New York City (or less frequently if daily quotations shall
not be generally available) to the Company by at least three recognized
U.S. Government securities dealers selected by the Company.
The Treasury Bill Rate, the Ten Year Constant Maturity Rate and
the Twenty Year Constant Maturity Rate shall each be rounded to the nearest
five one-hundredths of a percentage point.
The "Initial Dividend Payment Period" shall be that period
beginning on April 19, 1983 (the date of issuance) and continuing through
and including June 30, 1983. The initial dividend payment date shall be
July 1, 1983.
A "Dividend Period" shall mean the three month period beginning
April 1, July 1, October 1, and January 1 in each year. A "Dividend
Payment Date" shall mean the first day of April, July, October, and January
in each year, commencing October 1, 1983.
The amount of dividends per share payable for each Dividend
Period shall be computed by dividing the dividend rate for such Dividend
Period by four and applying such rate against the par value per share of
the Adjustable Rate Preferred Stock, Series D. The amount of dividends
payable for the Initial Dividend Period or any period shorter than a full
quarterly Dividend Period shall be computed on the basis of 30-day months,
a 360-day year and the actual number of days elapsed in such period.
The dividend rate with respect to each Dividend Period will be
calculated as promptly as practicable by the Company according to the
appropriate method described herein. The mathematical accuracy of each
such calculation will be confirmed in writing by independent accountants of
recognized standing. The Company will cause each dividend rate to be
published in a newspaper of general circulation in New York City prior to
the commencement of the new Dividend Period to which it applies and will
cause notice of such dividend rate to be enclosed with the dividend payment
checks next mailed to the holders of the Adjustable Rate Preferred Stock,
Series D.
As used herein, the term "Calendar Period" means a period of
fourteen calendar days; the term "Special Securities" means securities
which can, at the option of the holder, be surrendered at face value in
payment of any Federal estate tax or which provide tax benefits to the
holder and are priced to reflect such tax benefits or which were originally
issued at a deep or substantial discount; the term "Ten Year Average Yield"
means the average yield to maturity for actively traded marketable U.S.
Treasury fixed interest rate securities (adjusted to constant maturities of
ten years); and the term "Twenty Year Average Yield" means the average
yield to maturity for actively traded marketable U.S. Treasury fixed
interest rate securities (adjusted to constant maturities of twenty years).
(b)The redemption prices of the Adjustable Rate Preferred Stock,
Series D, shall be $112.00 per share if redeemed on or before April 1,
1988, $103.00 per share if redeemed after April 1, 1988 but on or before
April 1, 1993, or $100.00 per share if redeemed after April 1, 1993. In
each case the redemption price will also include accrued dividends to the
date of redemption. None of the Adjustable Rate Preferred Stock, Series D
shall be redeemed prior to April 1, 1988 if such redemption is for the
purpose of or in anticipation of refunding the Adjustable Rate Preferred
Stock, Series D through the use, directly or indirectly, of borrowed funds
or of the proceeds of the issue by the Company of shares of any stock
ranking prior to or on a parity with the Adjustable Rate Preferred Stock,
Series D as to dividends or assets, if such borrowed funds or such shares
have an effective interest cost or effective dividend cost (computed in
accordance with generally accepted financial principles), as the case may
be, of less than 12.36 % per annum per share.
(c) As and for a sinking fund for the Adjustable Rate
Preferred Stock, Series D, commencing on April 1, 1988 and on or before
each April 1 in each year thereafter so long as any shares of the
Adjustable Rate Preferred Stock, Series D remain outstanding, the Company
shall, to the extent of any funds of the Company legally available therefor
and except as otherwise restricted by the Company's Statement of Preferred
Stock Provisions, redeem 17,500 shares of Adjustable Rate Preferred Stock,
Series D (or such lesser number of such shares as remain outstanding) at
$100 per share plus accrued dividends to the date of redemption; provided,
however, that if in any year the Company does not redeem the full number of
shares of Adjustable Rate Preferred Stock, Series D required to be redeemed
pursuant to this sinking fund, the deficiency shall be made good on the
next April 1 on which the Company has funds legally available for, and is
otherwise permitted to effect, the redemption of shares of Adjustable Rate
Preferred Stock, Series D, pursuant to this sinking fund. The number of
shares of Adjustable Rate Preferred Stock, Series D, redeemed on any April
1 shall be reduced by the number of such shares purchased and cancelled by
the Company during the preceding twelve-month period or redeemed during
such period pursuant to subsection (b) hereof. Any shares so redeemed or
purchased or cancelled may be given the status of authorized but unissued
shares of Preferred Stock, but none of such shares shall be reissued as
shares of Adjustable Rate Preferred Stock, Series D. The Company shall
have the option, which shall be noncumulative, to redeem on April 1, 1988
and on each April 1 thereafter up to an additional 17,500 shares of
Adjustable Rate Preferred Stock, Series D, at the sinking fund redemption
price. No such optional sinking fund shall operate to reduce the number of
shares of the Adjustable Rate Preferred Stock, Series D, required to be
redeemed pursuant to the mandatory sinking fund provisions hereinabove set
forth. In the event that the Company shall at any time fail to make a full
mandatory sinking fund payment on any sinking fund payment date, the
Company shall not pay any dividends or make any other distributions in
respect of outstanding shares of any junior stock (as that term is defined
in Subsection A of Section of Article XVI of the by-laws of the Company) of
the Company, other than dividends or distributions in shares of junior
stock, or purchase or otherwise acquire for value any outstanding shares of
junior stock, until all such payments have been made.
5. 7.60% Class A Preferred Stock, 1987 Series
There shall be a series of Preferred Stock designated "7.60% Class A
Preferred Stock, 1987 Series," and consisting of 1,200,000 shares with an
aggregate par value of $30,000,000 and a par value per share of $25. The
dividend rate and redemption prices as to said 7.60% Class A Preferred
Stock, 1987 Series, shall be as follows:
(a) Dividends on said 7.60% Class A Preferred Stock, 1987 Series,
shall be at the rate of 7.60% per share per annum, and no more, and shall
be cumulative from the date of issuance. Said dividends, when declared,
shall be payable on the first days of February, May, August and November in
each year, commencing May 1, 1987.
(b) For each of the twelve month periods commencing February 1,
1987, the redemption prices of said 7.60% Class A Preferred Stock, 1987
Series, shall be the amount per share set forth below:
Twelve Twelve
Months Redemption Months Redemption
Beginning Price Beginning Price
February 1 Per Share February 1 Per Share
1987 $26.90 2000 $25.26
1988 26.90 2001 25.13
1989 26.90 2002 25.00
1990 26.90 2003 25.00
1991 26.90 2004 25.00
1992 26.27 2005 25.00
1993 26.14 2006 25.00
1994 26.02 2007 25.00
1995 25.89 2008 25.00
1996 25.76 2009 25.00
1997 25.64 2010 25.00
1998 25.51 2011 25.00
1999 25.38
plus in all cases that portion of the quarterly dividend accrued thereon
to the redemption date and all unpaid dividends thereon, if any; provided,
however, that none of the 7.60% Class A Preferred Stock, 1987 Series, shall
be redeemed prior to February 1, 1992, if such redemption is for the
purpose of or in anticipation of refunding such 7.60% Class A Preferred
Stock, 1987 Series, through the use, directly or indirectly, of funds
borrowed by the Company or of the proceeds of the issue by the Company of
shares of any stock ranking prior to or on a parity with the 7.60% Class A
Preferred Stock, 1987 Series, as to dividends or assets, if such borrowed
funds or such shares have an effective interest cost or effective dividend
cost to the Company (computed in accordance with generally accepted
financial principles), as the case may be, of less than 7.69% per annum.
(c) As and for a sinking fund for said 7.60% Class A Preferred
Stock, 1987 Series, commencing on February 1, 1992, and on each February
1 in each year thereafter so long as any shares of the 7.60% Class A
Preferred Stock, 1987 Series, remain outstanding, the Company shall, to the
extent of any funds of the Company legally available therefor and except as
otherwise restricted by the Company's Statement of Preferred Stock
Provisions, redeem 60,000 shares of 7.60% Class A Preferred Stock, 1987
Series (or such lesser number of such shares as remain outstanding) at $25
per share plus accrued dividends to the date of redemption; provided,
however, that if in any year the Company does not redeem the full number of
shares of 7.60% Class A Preferred Stock, 1987 Series, required to be
redeemed pursuant to this sinking fund, the deficiency shall be made good
on the next succeeding February 1 on which the Company has funds legally
available for, and is otherwise permitted to effect, the redemption of
shares of 7.60% Class A Preferred Stock, 1987 Series, pursuant to this
sinking fund. At the option of the Company, the number of shares of 7.60%
Class A Preferred Stock, 1987 Series, redeemed on any February 1 may be
reduced by the number of such shares purchased and canceled by the Company
during the preceding twelve-month period or redeemed during such period
pursuant to subsection (b) hereof. Any shares so redeemed or purchased and
canceled may be given the status of authorized but unissued shares of
Senior Stock, but none of such shares shall be reissued as shares of 7.60%
Class A Preferred Stock, 1987 Series. The Company shall have the option,
which shall be noncumulative, to redeem on February 1, 1992 and on each
February 1 thereafter up to an additional 60,000 shares of 7.60% Class A
Preferred Stock, 1987 Series, at the sinking fund redemption price. No
such optional sinking fund shall operate to reduce the number of shares of
the 7.60% Class A Preferred Stock, 1987 Series, required to be redeemed
pursuant to the mandatory sinking fund provisions hereinabove set forth.
In the event that the Company shall at any time fail to make a full
mandatory sinking fund payment on any sinking fund payment date, the
Company shall not pay any dividends or make any other distributions in
respect of outstanding shares of any junior stock (as that term is defined
in Subsection 2D of Section 2 of Article XVI of the by-laws of the Company)
of the Company, other than dividends or distributions in shares of junior
stock, or purchase or otherwise acquire for value any outstanding shares of
junior stock, until all such payments have been made.
6. Dutch Auction Rate Transferable Securities Class A Preferred
Stock, 1988 Series
There shall be a series of Class A Preferred Stock designated "Dutch
Auction Rate Transferable Securities Class A Preferred Stock, 1988
Series" (the "1988 DARTS") consisting of 2,140,000 shares with an
aggregate par value of $53,500,000 and a par value per share of $25. The
provisions governing the issue and sale of the 1988 DARTS in Units,
certification, dividend rights, redemption, reacquisition, auction
procedures, and other preferences, qualifications and special or relative
rights or privileges with respect to the 1988 DARTS shall be as follows:
(1) Units
The 1988 DARTS shall be issued and sold by the Company only in units
of 4,000 shares per unit ("Units"). No partial Units shall be issued and
sold by the Company, and no fractional shares of the 1988 DARTS shall be
issued and sold, no transfer of the 1988 DARTS in less than whole Units
shall be made, nor shall any transfer in less than whole Units be
registered on the transfer books of the Company or be effective for any
purpose.
(2) Certification
Except as otherwise provided by law, all outstanding DARTS shall be
represented by a certificate or certificates registered in the name of a
nominee of the Securities Depository (as defined in Section (6)(a)(xxi)
below), and no person acquiring Units shall be entitled to receive a
certificate representing the 1988 DARTS. The nominee of the Securities
Depository shall be the sole holder of record of the 1988 DARTS. Each
purchaser of Units will receive dividends, distributions and notices
according to the procedures of the Securities Depository and, if such
purchaser is not a member of the Securities Depository, of such purchaser's
Agent Member (as defined in Section (6)(a)(ii) below).
(3) Dividend Rights
(a) Dividends on the 1988 DARTS shall be paid, when, as and if
declared by the Board of Directors of the Company out of funds legally
available therefor, at the rate per annum determined as set forth below in
subsection (c) of this Section (3) and no more (the "Applicable Rate"),
payable on the respective dates set forth below.
(b) Dividends on the 1988 DARTS shall accrue from the date of
original issuance and shall be payable commencing on May 3, 1988, and on
each succeeding seventh Tuesday thereafter, except that if any of such
Tuesday, the Monday preceding such Tuesday, or the Wednesday following such
Tuesday is not a Business Day (as defined below), then (i) the dividend
payment date shall be the first Business Day after such Tuesday that is
immediately followed by a Business Day and is preceded by a Business Day
that is the preceding Monday or a day after such Monday, or (ii) if the
Securities Depository shall make available to its participants and members,
in funds immediately available in New York City on dividend payment dates,
the amount due as dividends on such dividend payment dates (and the
Securities Depository shall have so advised the Trust Company (as defined
in Section (6)(a)(xxx) below)), then the dividend payment date shall be the
first Business Day on or after such Tuesday that is preceded by a Business
Day that is the preceding Monday or a day after such Monday. "Business
Day" means a day on which the New York Stock Exchange is open for trading
and which is not a day on which banks in New York City are authorized by
law to close. Each dividend payment date determined as provided above is
referred to herein as the "Dividend Payment Date." Although any particular
Dividend Payment Date may not occur on the originally scheduled Tuesday
because of the exceptions discussed above, the next succeeding Dividend
Payment Date shall be, subject to such exceptions, the seventh Tuesday
following the originally designated Tuesday Dividend Payment Date for the
prior Dividend Period. As used herein, Dividend Period means the period
commencing on a Dividend Payment Date for DARTS and ending on the day next
preceding the next Dividend Payment Date. Notwithstanding the foregoing,
in the event of a change in law altering the minimum holding period
(currently found in Section 246(c) of the Internal Revenue Code of 1986, as
amended (the "Code")) required for taxpayers to be entitled to the
dividends received deduction on preferred stock held by non-affiliated
corporations (currently found in Section 243(a) of the Code), the Company
shall adjust the period of time between Dividend Payment Dates so as to
adjust uniformly the number of days (such number of days without giving
effect to the exceptions referred to above being hereinafter referred to as
"Dividend Period Days") in Dividend Periods commencing after the date of
such change in law to equal or exceed the then current minimum holding
period; provided that the number of Dividend Period Days shall not exceed
by more than nine days the length of such then current minimum holding
period and shall be evenly divisible by seven, and the maximum number of
Dividend Period Days in no event shall exceed 98 days. Upon any such
change in the number of Dividend Period Days as a result of a change in
law, the Company shall give notice of such change to all Existing Holders
of Units.
(c) The dividend rate on shares of the 1988 DARTS during the period
from and after the date of original issuance to the Initial Dividend
Payment Date (the "Initial Dividend Period") shall be 6.375 percent per
annum. Commencing on the Initial Dividend Payment Date, the dividend rate
on shares of the 1988 DARTS for each subsequent Dividend Period shall be at
a rate per annum that results from the implementation of the Auction
procedures set forth in Section (6) below.
The amount of dividends per Unit for the 1988 DARTS payable for each
Dividend Period shall be computed by multiplying the dividend rate for such
series for each Dividend Period determined in accordance with subsection
(c) above by a fraction the numerator of which shall be the number of days
in such Dividend Period (calculated by counting the first day thereof but
excluding the last day thereof) such Unit was outstanding and the
denominator of which shall be 360, and multiplying the amount so obtained
by $100,000 per Unit.
(d) Prior to each Dividend Payment Date, the Company shall pay to the
Trust Company sufficient funds for the payment of declared dividends.
(e) For the purpose of determining whether and when holders of the
Senior Stock are entitled to the rights to elect certain directors of the
Company, described under Article XVI, Section 5(c) of these By-laws,
dividends on the DARTS shall be deemed to be in arrears "in an amount equal
to or exceeding four quarterly dividend payments," if, at the time
dividends are in arrears for four quarterly dividend payments for Senior
Stock having quarterly dividend payments, dividends on the 1988 DARTS are
in arrears for each Dividend Period beginning on or after the first day of
the first of the four quarterly dividend periods as to which dividends on
the Senior Stock having quarterly dividends are in arrears.
(4) Redemption Provisions
(a) At the option of the Company, the Units may be redeemed out of
funds legally available therefor in whole on any Dividend Payment Date at a
redemption price of $25 per share of the 1988 DARTS ($100,000 per Unit)
plus accrued and unpaid dividends (whether or not earned or declared) to
the redemption date. Only whole Units may be redeemed. See Section (5)
below for restrictions on the reissue of Units after redemption.
(b) In accordance with Article XVI, Section 3 of these By-laws,
notice of redemption shall be mailed to each record holder of Units and to
the Trust Company not less than 30 days prior to the date fixed for
redemption thereof. Each notice of redemption shall include a statement
setting forth: (i) the redemption date, (ii) the number of Units to be
redeemed, (iii) the redemption price, (iv) the place or places where Units
are to be surrendered for payment of the redemption price, and (v) that
dividends of the Units to be redeemed will cease to accrue on such
redemption date. No defect in the notice of redemption or in the mailing
thereof shall affect the validity of the redemption proceedings, except as
required by applicable law.
(c) If less than all of the outstanding Units are to be redeemed,
the number of Units to be redeemed shall be determined by the Company and
communicated to the Trust Company. In accordance with Article XVI, Section
3A of these By-laws, the Trust Company shall give notice to the Securities
Depository and the Securities Depository will determine by lot under its
usual operating procedures the number of Units, if any, to be redeemed from
the account of the Agent Member of each Existing Holder. An Agent Member
may determine to redeem Units from some Existing Holders without redeeming
Units from the accounts of other Existing Holders.
(5) Reacquisition
Except in an Auction (as defined in Section (6)(a)(iii) below), the
Company shall have the right, in accordance with Article XVI, Section 3E of
these By-laws, and where permitted by applicable law, to purchase or
otherwise acquire Units upon the best terms reasonably obtainable, but not
exceeding the then current redemption price of such Units, except that no
such purchase shall be made if the Company shall be in arrears in respect
to payment of dividends on any shares of Senior Stock outstanding or if
there shall exist an event of default as defined in Article XVI, Section 5
of these By-laws. Notwithstanding the provisions of Article XVI, Section
3D of these By-laws, Units that have been redeemed, purchased or otherwise
acquired by the Company shall not be reissued as 1988 DARTS and shall
either be restored to authorized but unissued shares of the Company's Class
A Preferred Stock or canceled at the Company's option.
(6) Auction Procedures
(a) Certain Definitions. As used in this Section 6 of these
Provisions with Respect to the series of Senior Stock, the following terms
shall have the following meanings, unless the context otherwise requires:
(i) "Affiliate" shall mean any Person known to the Trust
Company to be controlled by, in control of, or under common control with
the Company.
(ii) "Agent Member" shall mean the member of the Securities
Depository that will act on behalf of a Bidder and is identified as such in
such Bidder's Purchaser's Letter.
(iii) "Auction" shall mean the periodic operation of the
procedures set forth herein.
(iv) "Auction Date" shall mean the Business Day next
preceding a Dividend Payment Date.
(v) "Available Units" shall have the meaning specified in
paragraph (d)(i)(A) below.
(vi) "Bid" shall have the meaning specified in paragraph
(b)(i) below.
(vii) "Bidder" shall have the meaning specified in paragraph
(b)(i) below.
(viii) "Board of Directors" shall mean the Board of Directors of
the Company.
(ix) "Broker-Dealer" shall mean any broker-dealer, or other
entity permitted by law to perform the functions required of a
Broker-Dealer herein, that has been selected by the Company and has entered
into a Broker-Dealer Agreement with the Trust Company that remains
effective.
(x) "Broker-Dealer Agreement" shall mean an agreement between
the Trust Company and a Broker-Dealer pursuant to which such Broker-Dealer
agrees to follow the procedures specified herein.
(xi) "DARTS" or "1988 DARTS" shall mean the 2,140,000 shares of
Dutch Auction Rate Transferable Securities Class A Preferred Stock, 1988
Series, $25 Par Value, of the Company.
(xii) "Existing Holder," when used with respect to Units, shall
mean a Person who has signed a Purchaser's Letter and is listed as the
beneficial owner of such Units in the records of the Trust Company.
(xiii) "Hold Order" shall have the meaning specified in
paragraph (b)(i) below.
(xiv) "Maximum Applicable Rate," on any Auction Date, shall
mean the percentage of the 60-day "AA" Composite Commercial Paper Rate (as
defined below) in effect on such Auction Date, determined as set forth
below based on the prevailing rating of the DARTS in effect at the close of
business on the day preceding such Auction Date:
Prevailing Rating Percentage
AA/aa or Above........................... 110%
A/a...................................... 120%
BBB/baa.................................. 130%
BB/ba.................................... 175%
Below BB/ba.............................. 200%
For purposes of this definition, the "prevailing rating" of
the DARTS shall be (i) AA/aa or Above, if the DARTS have a rating of AA- or
better by Standard & Poor's Corporation or its successor ("S&P") and aa3 or
better by Moody's Investors Service, Inc. or its successor ("Moody's"), or
the equivalent of both of such ratings by such agencies or a substitute
rating agency or substitute rating agencies selected as provided below,
(ii) if not AA/aa or Above, then A/a, if the DARTS have a rating of A- or
better by S&P and a3 or better by Moody's or the equivalent of both of such
ratings by such agencies or a substitute rating agency or substitute rating
agencies selected as provided below, (iii) if not AA/aa or Above or A/a,
then BBB/Baa, if the DARTS have a rating of BBB- or better by S&P and baa3
or better by Moody's or the equivalent of both of such ratings by such
agencies or a substitute rating agency or substitute rating agencies
selected as provided below, and (iv) if not AA/aa or Above, A/a or BBB/baa,
then BB/ba, if the DARTS have a rating of BB- or better by S&P and Ba3 or
better by Moody's, or the equivalent of both of such ratings by such
agencies or a substitute rating agency or substitute rating agencies
selected as provided below, and (v) if not AA/aa or Above, A/a, BBB/baa or
BB/ba, then Below BB/ba. The Company shall take all reasonable action
necessary to enable S&P and Moody's to provide a rating for the DARTS. If
either S&P or Moody's shall not make such a rating available, or neither
S&P nor Moody's shall make such a rating available, Salomon Brothers Inc
and Morgan Stanley & Co. Incorporated, or their successors shall select a
nationally recognized securities rating agency or two nationally recognized
securities rating agencies to act as substitute rating agency or substitute
rating agencies, as the case may be.
(xv) "Minimum Applicable Rate," on any Auction Date, shall mean
59% of the 60-day "AA" Composite Commercial Paper Rate in effect on such
Auction Date.
(xvi) "Order" shall have the meaning specified in
paragraph(b)(i) below.
(xvii) "Outstanding" shall mean, as of any date, the DARTS
theretofore issued by the Company except, without duplication, (A) any
DARTS theretofore canceled or delivered to the Trust Company for
cancellation, or redeemed by the Company, or as to which a notice of
redemption shall have been given by the Company, (B) any DARTS as to which
the Company or any Affiliate thereof shall be an Existing Holder and (C)
any DARTS represented by any certificate in lieu of which a new
certificate has been executed and delivered by the Company.
(xviii) "Person" shall mean and include an individual, a
partnership, a corporation, a trust, an unincorporated association, a joint
venture or other entity or a government or any agency or political
subdivision thereof.
(xix) "Potential Holder" shall mean any Person, including any
Existing Holder, (A) who shall have executed and delivered or caused to be
delivered a Purchaser's Letter to the Trust Company and (B) who may be
interested in acquiring Units (or, in the case of an Existing Holder,
additional Units).
(xx) "Purchaser's Letter" shall mean a letter addressed to the
Company, the Trust Company, Broker-Dealer and other persons in which a
Person agrees, among other things, to offer to purchase, purchase, offer to
sell and/or sell Units as set forth herein.
(xxi) "Securities Depository" shall mean The Depository Trust
Company and its successors and assigns or any other securities depository
selected by the Company which agrees to follow the procedures required to
be followed by such securities depository in connection with the DARTS.
(xxii) "Sell Order" shall have the meaning specified in paragraph
(b)(i) below.
(xxiii) "60-day 'AA' Composite Commercial Paper Rate," on any
date, means (i) the interest equivalent of the 60-day rate on commercial
paper placed on behalf of issuers whose corporate bonds are rated "AA" by
S&P or the equivalent of such rating by S&P or another rating agency, as
such 60-day rate is made available on a discount basis or otherwise by the
Federal Reserve Bank of New York for the Business Day immediately preceding
such date, or (ii) in the event that the Federal Reserve Bank of New York
does not make available such a rate, then the interest equivalent of the
60-day rate on commercial paper placed on behalf of such issuers, as quoted
on a discount basis or otherwise by Morgan Stanley & Co. Incorporated or,
in lieu thereof, any affiliates or successor thereof (the "Commercial
Paper Dealer"), to the Trust Company for the close of business on the
Business Day immediately preceding such date. If the Commercial Paper
Dealer does not quote a rate required to determine the 60-day "AA"
Composite Commercial Rate, the 60-day "AA" Composite Commercial Paper Rate
shall be determined on the basis of the quotation or quotations furnished
by any Substitute Commercial Paper Dealer or Substitute Commercial Paper
Dealers selected by the Company to provide such rate. If the Company,
however, shall adjust the number of Dividend Period Days in the event of a
change in the dividends received deduction minimum holding period contained
in the Internal Revenue Code of 1986, as amended, with the result that (i)
the Dividend Period Days shall be fewer than 70 days, such rate shall be
the interest equivalent of the 60-day rate on such commercial paper, (ii)
the Dividend Period Days shall be 70 or more days but fewer than 85 days,
such rate shall be the arithmetic average of the interest equivalent of the
60-day and 90-day rates on such commercial paper, and (iii) the Dividend
Period Days shall be 85 or more days but 98 or fewer days, such rate shall
be the interest equivalent of the 90-day rate on such commercial paper.
For the purposes of such definition, "interest equivalent" means the
equivalent yield on a 360-day basis of a discount basis security to an
interest-bearing security and "Substitute Commercial Paper Dealer" shall
mean any commercial paper dealer that is a leading dealer in the
commercial paper market, provided that neither such dealer nor any of its
affiliates is a Commercial Paper Dealer.
(xxiv) "Submission Deadline" shall mean 12:30 P.M., New York City
time, on any Auction Date or such other time on any Auction Date by which
Broker-Dealers are required to submit Orders to the Trust Company as
specified by the Trust Company from time to time.
(xxv) "Submitted Bid" shall have the meaning specified
inparagraph (d)(i) below.
(xxvi) "Submitted Hold Order" shall have the meaning specified
in paragraph (d)(i) below.
(xxvii) "Submitted Order" shall have the meaning specified in
paragraph (d)(i) below.
(xxviii) "Submitted Sell Order" shall have the meaning specified
in paragraph (d)(i) below.
(xxvix) "Sufficient Clearing Bids" shall have the meaning
specified in paragraph (d)(i) below.
(xxx) "Trust Company" shall mean Bankers Trust Company and its
successor, and assigns or any other bank, trust company or other entity
selected by the Company which agrees to follow the Auction Procedures
described in this Section (6) for the purposes of determining the
Applicable Rate for the DARTS.
(xxxi) "Winning Bid Rate" shall have the meaning specified in
paragraph (d)(i) below.
(b) Orders by Existing Holders and Potential Holders
(i) On or prior to each Auction Date:
(A) each Existing Holder may submit to a Broker-Dealer
information as to:
(1) the number of Outstanding Units, if any, held by
such Existing Holder which such Existing Holder desires to continue to hold
without regard to the Applicable Rate for the next succeeding Dividend
Period;
(2) the number of Outstanding Units, if any, held by such
Existing Holder which such Existing Holder desires to continue to hold,
provided that the Applicable Rate for the next succeeding Dividend Period
shall not be less than the rate per annum specified by such Existing
Holder; and/or (3) the number of Outstanding Units, if any, held by
such Existing Holder which such Existing Holder offers to sell without
regard to the Applicable Rate for the next succeeding Dividend Period; and
(B) Each Broker-Dealer, using a list of Potential Holders
that shall be maintained in good faith for the purpose of conducting a
competitive Auction shall contact Potential Holders, including Persons that
are not Existing Holders, on such list to determine the number of
Outstanding Units, if any, which each such Potential Holder offers to
purchase, provided that the Applicable Rate for the next succeeding
Dividend Period shall not be less than the rate per annum specified by such
Potential Holder.
For the purposes hereof, the communication to a Broker-Dealer of
information referred to in clause (A) or (B) of this paragraph (b)(i) is
hereinafter referred to as an "Order" and each Existing Holder and each
Potential Holder placing an Order is hereinafter referred to as a "Bidder";
and Order containing the information referred to in clause (A)(1) of this
paragraph (b)(i) is hereinafter referred to as a "Hold Order"; an Order
containing the information referred to in clause (A)(2) or (B) of this
paragraph (b)(i) is hereinafter referred to as a "Bid"; and an Order
containing the information referred to in clause (A)(3) of this paragraph
(b)(i) is hereinafter referred to as a "Sell Order."
(ii) (A) A Bid by an Existing Holder shall constitute an
irrevocable offer to sell:
(1) the number of Outstanding Units specified in such
Bid if the Applicable Rate determined on such Auction Date shall be less
than the rate specified therein; or
(2) such number or a lesser number of Outstanding
Units to be determined as set forth in paragraph (e)(i)(D) if the
Applicable Rate determined on such Auction Date shall be equal to the rate
specified therein; or
(3) a lesser number of Outstanding Units to be determined
as set forth in paragraph (e)(ii)(C) if such specified rate shall be higher
than Maximum Applicable Rate and Sufficient Clearing Bids do not exist.
(B) A Sell Order by an Existing Holder shall constitute an
irrevocable offer to sell:
(1) the number of Outstanding Units specified in such Sell
Order; or
(2) such number or a lesser number of Outstanding
Units to be determined as set forth in paragraph (e)(ii)(C) if Sufficient
Clearing Bids do not exist.
(C) A Bid by a Potential Holder shall constitute an irrevocable
offer to purchase:
(1) the number of Outstanding Units specified in such Bid
if the Applicable Rate determined on such Auction Date shall be higher than
the rate specified therein; or
(2) such number of a lesser number of Outstanding Units to
be determined as set forth in paragraph (e)(i)(E) if the Applicable Rate
determined on such Auction Date shall be equal to the rate specified
therein.
(c) Submission of Orders by Broker-Dealers to Trust Company (i) Each
Broker-Dealer shall submit in writing to the Trust Company prior to the
Submission Deadline on each Auction Date all Orders obtained by such
Broker-Dealer and specifying with respect to each Order:
(A) the name of the Bidder placing such Order;
(B) the aggregate number of Outstanding Units that are subject
of such Order;
(C) to the extent that such Bidder is an Existing Holder:
(1) the number of Outstanding Units, if any, subject to any
Hold Order placed by such Existing Holder;
(2) the number of Outstanding Units, if any, subject to
any Bid placed by such Existing Holder and the rate specified in such Bid;
and
(3) the number of Outstanding Units, if any, subject to
any Sell Order placed by such Existing Holder; and
(D) to the extent such Bidder is a Potential Holder, the rate
specified in such Potential Holder's Bid.
(ii) If any rate specified in any Bid contains more than three
figures to the right of the decimal point, the Trust Company shall round
such rate up to the next highest one-thousandth (.001) of 1%.
(iii) If an Order or Orders covering all of the Outstanding Units
held by an Existing Holder is not submitted to the Trust Company prior to
the Submission Deadline, the Trust Company shall deem a Hold Order to have
been submitted on behalf of such Existing Holder covering the number of
Outstanding Units held by such Existing Holder and not subject to Orders
submitted to the Trust Company.
(iv) If one or more Orders covering in the aggregate more than the
number of Outstanding Units held by an Existing Holder are submitted to the
Trust Company, such Orders shall be considered valid as follows and in the
following order or priority:
(A) any Hold Order submitted on behalf of such Existing
Holder shall be considered valid up to and including the number of
Outstanding Units held by such Existing Holder; provided that if more than
one Hold Order is submitted on behalf of such Existing Holder and the
number of Units subject to such Hold Orders exceeds the number of
Outstanding Units held by such Existing Holder, the number of Units subject
to such Hold Orders shall be reduced pro rata so that such Hold Orders
shall cover the number of Outstanding Units held by such Existing Holder;
(B) (1) any Bid shall be considered valid up to and including
the excess of the number of Outstanding Units held by such Existing Holder
over the number of Units subject to Hold Orders referred to in paragraph
(c)(iv)(A);
(2) subject to clause (1) above, if more than one Bid
with the same rate is submitted on behalf of such Existing Holder and the
number of Outstanding Units subject to such Bids is greater than such
excess, the number of Outstanding Units subject to such Bids shall be
reduced pro rata so that such Bids shall cover the number of Outstanding
Units equal to such excess; and
(3) subject to clause (1) above, if more than one Bid
with different rates is submitted on behalf of such Existing Holder, such
Bids shall be considered valid in the ascending order of their respective
rates and in any such event the number, if any, of such Outstanding shares
subject to Bids not valid under this clause (B) shall be treated as the
subject of a Bid by a Potential Holder; and (C) any Sell Order shall be
considered valid up to and including the excess of the number of
Outstanding Units held by such Existing Holder over the number of
Outstanding Units subject to Hold Orders referred to in paragraph
(c)(iv)(A) and Bids referred to in paragraph (c)(iv)(B).
(v) If more than one Bid is submitted on behalf of any Potential
Holder, each Bid submitted shall be a separate Bid with the rate and Units
therein specified.
(vi) If any rate specified in any Bid is lower than the Minimum
Applicable Rate for the Dividend Period to which such Bid relates, such Bid
shall be deemed to be a Bid specifying a rate equal to such Minimum
Applicable Rate.
(vii) Orders by Existing Holders and Potential Holders must specify
numbers of Units in whole Units. Any Order that specifies a number of
Units other than in whole shares will be invalid and will not be considered
a Submitted Order for purposes of an Auction.
(d) Determination of Sufficient Clearing Bids, Winning Bid Rate and
Applicable Rate (i) Not earlier than the Submission Deadline on each
Auction Date, the Trust Company shall assemble all Orders submitted or
deemed submitted to it by the Broker-Dealers (each such Order as submitted
or deemed submitted by a Broker-Dealer being hereinafter referred to
individually as a "Submitted Hold Order" a "Submitted Bid" or a "Submitted
Sell Order," as the case may be, or as a "Submitted Order") and shall
determine:
(A) the excess of the total number of Outstanding Units over
the number of Outstanding Units that are the subject of Submitted Hold
Orders (such excess being hereinafter referred to as the "Available
Units");
(B) from the Submitted Orders, whether:
(1) the number of Outstanding Units that are the
subject of Submitted Bids by Potential Holders specifying one or more rates
equal to or lower than the Maximum Applicable Rate exceeds or is equal to
the sum of:
(2) [a] the number of Outstanding Units that are the
subject of Submitted Bids by Existing Holders specifying one or more
rates higher than the Maximum Applicable Rate, and [b] the number of
Outstanding Units that are subject to Submitted Sell Orders (if such excess
of such equality exists (other than because the number of Outstanding Units
in clauses [a] and [b] above are each zero because all of the Outstanding
Units are the subject of Submitted Hold Orders), such Submitted Bids in
clause (1) above being hereinafter referred to collectively as "Sufficient
Clearing Bids"); and (C) if Sufficient Clearing Bids exist, the lowest
rate specified in the Submitted Bids (the "Winning Bid Rate"), which if:
(1) each Submitted Bid from Existing Holders specifying the
Winning Bid Rate and all other Submitted Bids from Existing Holders
specifying lower rates were rejected, thus entitling such Existing Holders
to continue to hold the Units that are the subject of such Submitted Bids,
and (2) each Submitted Bid from Potential Holders specifying the Winning
Bid Rate and all other Submitted Bids from Potential Holders specifying
lower rates were accepted, thus entitling the Potential Holders to purchase
the Units that are the subject of such Submitted Bids, would result in the
number of shares subject to all Submitted Bids specifying the Winning Bid
Rate or a lower rate being at least equal to the Available Units.
(ii) Promptly after the Trust Company has made the determinations
pursuant to paragraph (d)(i), the Trust Company shall advise the Company
of the Maximum Applicable Rate and the Minimum Applicable Rate and, based
on such determinations, the Applicable Rate for the next succeeding
Dividend Period as follows:
(A) if Sufficient Clearing Bids exist, that the Applicable
Rate for the next succeeding Dividend Period shall be equal to the Winning
Bid Rate so determined;
(B) if Sufficient Clearing Bids do not exist (other than
because all of the Outstanding Units are the subject of Submitted Hold
Orders), that the Applicable Rate for the next succeeding Dividend Period
shall be equal to the Maximum Applicable Rate; or (C) if all the
Outstanding Units are the subject of Submitted Hold Orders, that the
Applicable Rate for the next succeeding Dividend Period shall be equal to
the Minimum Applicable Rate.
(e) Acceptance and Rejection of Submitted Bids and Submitted Sell Orders
and Allocation of Shares Based on the determinations made pursuant to
paragraph (d)(i), the Submitted Bids and Submitted Sell Orders shall be
accepted or rejected and the Trust Company shall take such other action as
set forth below:
(i) If Sufficient Clearing Bids have been made, subject to
the provisions of paragraphs (e)(iii) and (e)(iv), Submitted Bids and
Submitted Sell Orders shall be accepted or rejected in the following order
or priority and all other Submitted bids shall be rejected:
(A) the Submitted Sell Orders of Existing Holders shall be
accepted and the Submitted Bid of each of the Existing Holders specifying
any rate that is higher than the Winning Bid Rate shall be rejected, thus
requiring each such Existing Holder to sell the Outstanding Units that are
the subject of such Submitted Bid;
(B) the Submitted Bid of each of the Existing Holders
specifying any rate that is lower than the Winning Bid Rate shall be
accepted, thus entitling each such Existing Holder to continue to hold the
Outstanding Units that are the subject of such Submitted Bid;
(C) the Submitted Bid of each of the Potential Holders
specifying any rate that is lower than the Winning Bid Rate shall be
accepted;
(D) the Submitted Bid of each of the Existing Holders
specifying a rate that is equal to the Winning Bid Rate shall be accepted,
thus entitling each such Existing Holder to continue to hold the
Outstanding Units that are the subject of such Submitted Bid, unless the
number of Outstanding Units subject to all such Submitted Bids shallbe
greater than the number of Outstanding Units ("remaining shares") equal to
the excess of the Available Units over the number of Outstanding Units
subject to Submitted Bids described in paragraphs (e)(i)(B) and (e)(i)(C),
in which event the Submitted Bids of each such Existing Holder shall be
rejected, and each such Existing Holder shall be required to sell
Outstanding Units, but only in an amount equal to the difference between
(1) the number of Outstanding Units then held by such Existing Holder
subject to such Submitted Bid and (2) the number of Units obtained by
multiplying (x) the number of remaining shares by (y) a fraction the
numerator of which shall be the number of Outstanding Units held by such
Existing Holder subject to such Submitted Bid and the denominator of which
shall be the sum of the number of Outstanding Units subject to such
Submitted Bids made by all such Existing Holders that specified a rate
equal to the Winning Bid Rate; and
(E) the Submitted Bid of each of the Potential Holders
specifying a rate that is equal to the Winning Bid Rate shall be accepted
but only in an amount equal to the number of Outstanding Units obtained by
multiplying (x) the difference between the Available Units and the number
of Outstanding Units subject to the Submitted Bids described inparagraphs
(e)(i)(B), (e)(i)(C) and (e)(i)(D) by (y) a fraction the numerator of which
shall be the number of Outstanding shares of Units subject to such
Submitted Bid and the denominator of which shall be the sum of the number
of Outstanding Units subject to such Submitted Bids made by all such
Potential Holders that specified rates equal to the Winning Bid Rate.
(ii) If Sufficient Clearing Bids have been made (other than because
all of the Outstanding Units are subject to Submitted Hold Orders), subject
to the provisions of paragraphs (e)(iii) and (e)(iv), Submitted Orders
shall be accepted or rejected as follows in the following order of priority
and all other Submitted Bids shall be rejected:
(A) the Submitted Bid of each Existing Holder specifying any
rate that is equal to or lower than the Maximum Applicable Rate shall be
accepted, thus entitling such Existing Holder to continue to hold the
Outstanding Units that are the subject of such Submitted Bid;
(B) the Submitted Bid of each Potential Holder specifying any
rate that is equal to or lower than the Maximum Applicable Rate shall be
accepted, thus requiring such Potential Holder to purchase the Outstanding
Units that are the subject of such Submitted Bid; and
(C) the Submitted Bids of each Existing Holder specifying any
rate that is higher than the Maximum Applicable Rate shall be rejected and
the Submitted Sell Orders of each Existing Holder shall be accepted, in
both cases only in an amount equal to the difference between (1) the number
of Outstanding Units then held by such Existing Holder subject to such
Submitted Bid or Submitted Sell Order and (2) the number of Units obtained
by multiplying (x) the difference between the Available Units and the
aggregate number of Outstanding Units subject to Submitted Bids described
in paragraphs (e)(ii)(A) and (e)(ii)(B) by (y) a fraction the numerator of
which shall be the number of Outstanding Units held by such Existing Holder
subject to such Submitted Bid or Submitted Sell Order and the denominator
of which shall be the number of Outstanding Units subject to all such
Submitted Bids and Submitted Sell Orders.
(iii) If, as a result of the procedures described in paragraph (e)(i)
or (e)(ii), any Existing Holder would be entitled or required to sell, or
any Potential Holder would be entitled or required to purchase, a fraction
of a Unit on any Auction Date, the Trust Company shall, in such manner as,
in its sole discretion, it shall determine, round up or down the number of
Units to be purchased or sold by any Existing Holder or Potential Holder on
such Auction Date so that the number of Outstanding shares purchased or
sold by each Existing Holder or Potential Holder on such Auction Date shall
be whole Units.
(iv) If, as a result of the procedures described in paragraph
(e)(i), any Potential Holder would be entitled or required to purchase less
than a whole Unit on any Auction Date, the Trust Company shall, in such
manner as, in its sole discretion, it shall determine, allocate Units for
purchase among Potential Holders so that only whole Units are purchased on
such Auction Date by any Potential Holder, even if such allocation results
in one or more of such Potential Holders not purchasing Units on such
Auction Date.
(v) Based on the results of each Auction, the Trust Company shall
determine the aggregate number of Outstanding Units to be purchased and the
aggregate number of Outstanding Units to be sold by Potential Holders and
Existing Holders on whose behalf each Broker-Dealer submitted Bids or Sell
Orders, and, with respect to each Broker-Dealer, to the extent that such
aggregate number of Outstanding shares to be purchased and such aggregate
number of Outstanding shares to be sold differ, determine to which other
Broker-Dealer or Broker-Dealers acting for one or more purchasers such
Broker-Dealer
shall deliver, or from which other Broker-Dealer or Broker-Dealers acting
for one or more sellers such Broker-Dealer shall receive, as the case may
be, Outstanding Units.
(f) Miscellaneous
The Board of Directors may interpret the provisions of these Auction
Procedures to resolve any inconsistency or ambiguity, and may remedy any
formal defect or make any other change or modification which does not
adversely affect the rights of Existing Holders of Units. An Existing
Holder (A) may sell, transfer or otherwise dispose of Units only pursuant
to a Bid or Sell Order in accordance with the procedures described in this
paragraph or to or through a Broker-Dealer or to a Person that has
delivered a signed copy of a Purchaser's Letter to the Trust Company,
provided that in the case of all transfers other than pursuant to Auctions
such Existing Holder, its Broker-Dealer or its Agent Member advises the
Trust Company of such transfer and (B) shall have the ownership of the
Units held by it maintained in book entry form by the Securities Depository
in the account of its Agent Member, which in turn will maintain records of
such Existing Holder's beneficial ownership. Neither the Company nor any
Affiliate shall submit an Order, either directly or indirectly, in any
Auction. Except as otherwise provided by law, all of the Outstanding Units
shall be represented by a certificate registered in the name of the nominee
of the Securities Depository and no Person acquiring Units shall be
entitled to receive a certificate representing such shares.
(g) Headings of Subdivisions
The headings of the various subdivisions of these Auction Procedures are
for convenience of reference only and shall not affect the interpretation
of any of the provisions hereof.
ARTICLE XVIII
AMENDMENTS
Except as otherwise provided in Article XVI hereof, these By-Laws may
be altered, amended or repealed at any meeting of the stockholders called
for the purpose by vote of a majority of stock present and voting thereon
or at any meeting of the Board of Directors called for the purpose by vote
of a majority of the Board of Directors.
Exhibit 3.5.1
ARTICLES OF INCORPORATION
OF
NORTH ATLANTIC ENERGY CORPORATION
THE UNDERSIGNED, ACTING AS INCORPORATOR OF A CORPORATION UNDER THE NEW
HAMPSHIRE BUSINESS CORPORATION ACT, ADOPTS THE FOLLOWING ARTICLES OF
INCORPORATION FOR SUCH CORPORATION:
ARTICLE I
The name of the corporation is North Atlantic Energy Corporation.
ARTICLE II
The period of its duration is perpetual.
ARTICLE III
The corporation is empowered to transact any and all lawful business
for which corporations may be incorporated under RSA 293-A. The principal
purpose for which the corporation is organized is to own a joint ownership
interest in the Seabrook nuclear power project and to sell electricity
generated by the Seabrook project.
ARTICLE IV
The aggregate number of shares which the corporation shall have
authority to issue is 1000 shares of Common Stock with a par value of
$1 per share.
ARTICLE V
The capital stock will be sold or offered for sale within the meaning
of RSA 421-B (New Hampshire Securities Act).
ARTICLE VI
Shareholders shall have no preemptive rights to acquire unissued or
treasury shares or securities convertible into such shares or carrying a
right to subscribe or acquire such shares.
ARTICLE VII
Provisions for the regulation of the internal affairs of the
corporation shall be set forth in the By-Laws of the corporation.
ARTICLE VIII
The address of the initial registered office of the corporation is
Rath, Young, Pignatelli and Oyer, P.A., Two Capital Plaza, P.O. Box 854,
Concord, NH 03302-0854 and the name of the initial registered agent at such
address is Thomas D. Rath.
ARTICLE IX
The number of directors constituting the initial board of directors of
the corporation is one, and the name and address of the person who is to
serve as director until the first annual meeting of shareholders or until
his successor is elected and shall qualify is:
Name Address
Thomas D. Rath Rath, Young, Pignatelli and Oyer, P.A.
Two Capital Plaza, P.O. Box 854
Concord, NH 03302-0854
ARTICLE X
The name and address of the incorporator is:
Thomas D. Rath Rath, Young, Pignatelli and Oyer, P.A.
Two Capital Plaza, P.O. Box 854
Concord, NH 03302-0854
ARTICLE XI
The directors and officers of the corporation shall not be liable to
the corporation or its shareholders for monetary damages for breach of
fiduciary duty as a director or officer except with respect to:
1) any breach of the director's and/or officer's duty of loyalty to
the corporation or its shareholders;
2) acts or omissions which are not in good faith or which involve
intentional misconduct or a knowing violation of law;
3) actions for which a director may be liable under RSA 293-A:48; or
4) any transaction from which the director or officer derived an
improper personal benefit.
Dated: September 20, 1991
/S/Thomas D. Rath
Thomas D. Rath
Exhibit 3.5.2
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
NORTH ATLANTIC ENERGY CORPORATION
PURSUANT TO THE PROVISIONS OF SECTION 61 OF THE NEW HAMPSHIRE BUSINESS
CORPORATION ACT, THE UNDERSIGNED CORPORATION ADOPTS THE FOLLOWING ARTICLES
OF AMENDMENT TO ITS ARTICLES OF INCORPORATION:
FIRST: The name of the corporation is North Atlantic Energy
Corporation.
SECOND: The following amendments of the Articles of Incorporation
were adopted by resolution of the board of directors of the corporation on
October 16, 1991, in the manner prescribed by the New Hampshire Business
Corporation Act:
That the Articles of Incorporation of the corporation be amended
by deleting the current Article IX and inserting a new Article IX
as follows:
The number of directors constituting the initial board of
directors of the corporation is nine, and the names and addresses
of the persons who are to serve as directors until the first
annual meeting of shareholders or until their successors are
elected and shall qualify are:
Bernard M. Fox 29 St. Andrews Drive
Avon, CT 06001
Robert E. Busch 292 Foot Hills Road
Higganum, CT 06441
John P. Cagnetta 97 Butternut Circle
Wethersfield, CT 06109
John F. Opeka 10 Nottingham Drive
Old Lyme, CT 06371
Lawrence H. Shay 21 Goodwin Street
Niantic, CT 06357
Walter F. Torrance, Jr. 575A Heritage Village
Southbury, CT 06488
William B. Ellis 31 Pound Foolish Lane
Glastonbury, CT 06033
Frank R. Locke 9 Chickadee Court
Bedford, NH 03110
Ted C. Feigenbaum 8 Evergreen Way
Stratham, NH 03885
NORTH ATLANTIC ENERGY CORPORATION
Dated: October 16, 1991 By: /S/Thomas D. Rath
Thomas D. Rath, President
and
By: /S/Thomas D. Rath
Thomas D. Rath, Secretary
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
NORTH ATLANTIC ENERGY CORPORATION
PURSUANT TO THE PROVISIONS OF SECTION 61 OF THE NEW HAMPSHIRE BUSINESS
CORPORATION ACT, THE UNDERSIGNED CORPORATION ADOPTS THE FOLLOWING ARTICLES
OF AMENDMENT TO ITS ARTICLES OF INCORPORATION:
FIRST: The name of the corporation is North Atlantic Energy
Corporation.
SECOND: The following amendments of the Articles of Incorporation
were adopted by resolution of the board of directors of the corporation on
June 1, 1992, in the manner prescribed by the New Hampshire Business
Corporation Act:
That the Articles of Incorporation of the corporation be amended
by adding the following language to Article IV:
No nonvoting equity securities of the corporation shall be
issued; this provision is included in these Articles of
Incorporation in compliance with Section 1123 of the United
States Federal Bankruptcy Code, 11 U.S.C. Section 1123, and
shall have no further force and effect beyond that required by
such Section and for so long as such Section is in effect
and applicable to the corporation.
THIRD: No shares of the corporation were outstanding at the time of
adoption of the foregoing amendment.
NORTH ATLANTIC ENERGY CORPORATION
Dated: June 2, 1992 By: /S/Robert E. Busch
Robert E. Busch
Executive Vice-President
By: /S/John B. Keane
John B. Keane
Assistant Secretary
Exhibit 3.5.3
NORTH ATLANTIC ENERGY CORPORATION
BY-LAWS
AS AMENDED TO NOVEMBER 8, 1993
ARTICLE I
MEETINGS OF SHAREHOLDERS
Section 1. Meetings of the shareholders may be held at such place
either within or without the State of New Hampshire as may be designated by
the Board of Directors.
Section 2. The Annual Meeting of Shareholders for the election of
Directors and the transaction of such other business as may properly be
brought before the meeting shall be held in March, April, May, June or July
in each year on the day and at the hour designated by the Board of
Directors.
Section 3. Notice of all meetings of shareholders, stating the day,
hour and place thereof, shall be given by a written or printed notice,
delivered or sent by mail, at least ten days but not more than fifty days
before the date of the meeting, to each shareholder of record on the books
of the Company and entitled to vote at such meeting, at the address
appearing on such books, unless such shareholder shall waive notice in
writing. Notice of a special meeting of shareholders shall state also the
general purpose or purposes of such meeting and no business other than that
of which notice has been so given shall be transacted at such meeting.
Section 4. At all meetings of shareholders each share of Common Stock
entitled to vote, and represented in person or by proxy, shall be entitled
to one vote.
Section 5. The Board of Directors may fix a date as the record date
for the purpose of determining shareholders entitled to notice of and to
vote at any meeting of shareholders or any adjournment thereof, such date
in any case to be not earlier than the date such action is taken by the
Board of Directors and not more than fifty days and not less than ten days
immediately preceding the date of such meeting. In such case only such
shareholders or their legal representatives as shall be shareholders on the
record date so fixed shall be entitled to such notice and to vote at such
meeting or any adjournment thereof, notwithstanding the transfer of any
shares of stock on the books of the Company after any such record date so
fixed.
ARTICLE II
DIRECTORS
Section 1. The business, property and affairs of the Company shall be
managed by a Board of not less than three nor more than sixteen Directors.
Within these limits, the number of positions on the Board of Directors for
any year shall be the number fixed by resolution of the shareholders or of
the Board of Directors, or, in the absence of such a resolution, shall be
the number of Directors elected at the preceding Annual Meeting of
Shareholders. The Directors so elected shall continue in office until
their successors have been elected and qualified, except that a Director
shall cease to be in office upon his death, resignation, lawful removal or
court order decreeing that he is
no longer a Director in office.
Section 2. The Board of Directors shall have power to fill vacancies
that may occur in the Board, or any other office, by death, resignation or
otherwise, by a majority vote of the remaining members of the Board, and
the person so chosen shall hold the office until the next Annual Meeting of
Shareholders and until his successor shall be elected and qualified.
Section 3. The Board of Directors shall have power to employ such and
so many agents and factors or employees as the interests of the Company may
require, and to fix the compensation and define the duties of all of the
officers, agents, factors and employees of the Company. All the officers,
agents, factors and employees of the Company shall be subject to the order
of said Board, shall hold their offices at the pleasure of said Board, and
may be removed at any time by said Board at its discretion.
Section 4. Any one or more Directors may be removed from office at a
meeting of Shareholders expressly called for that purpose with or without
any showing of cause by an affirmative vote of the holders of a majority of
the Company's issued and outstanding shares entitled to vote.
ARTICLE III
MEETINGS OF DIRECTORS
Section 1. A regular meeting of the Board of Directors shall be held
annually, without notice, directly following the annual meeting of the
shareholders, or as soon as practicable thereafter, for the election of
officers and the transaction of other business.
Section 2. All other regular meetings of the Board of Directors may
be held at such time and place as the Board may from time to time
determine. Special meetings of the Board may be held at any place upon call
of the Chairman (if there be one) or the President, or, in the event of the
absence or inability of either to act, of a Vice President, or upon call of
any three or more directors.
Section 3. Oral or written notice of the time and place of each
special meeting of the Board of Directors shall be given to each director
personally or by telephone, or by mail or telegraph at his last-known post
office address, at least twenty-four hours prior to the time of the
meeting, provided that any director may waive such notice in writing or by
telegraph or by attendance at such meeting.
Section 4. One-third of the number of directors as fixed in
accordance with Section 1 of Article II of these By-Laws shall constitute a
quorum. A number less than a quorum may adjourn from time to time until a
quorum is present. In the event of such an adjournment, notice of the
adjourned meeting shall be given to all Directors.
Section 5. Except as otherwise provided by these By-Laws, the act of
a majority of the Directors present at a meeting at which a quorum is
present at the time of the act shall be the act of the Board of Directors.
Section 6. Any resolution in writing concerning action to be taken by
the Company, which resolution is approved and signed by all of the
Directors, severally and collectively, shall have the same force and effect
as if such action were authorized at a meeting of the Board of Directors
duly called and held for that purpose, and such resolution, together with
the Directors'written approval thereof, shall be recorded by the Secretary
in the minute book of the Company.
Section 7. One or more Directors or members of a committee of the
Board of Directors may participate in a meeting of the Board of Directors
or of such committee by means of conference telephone or similar
communications equipment enabling all Directors participating in the
meeting to hear one another, and participation in a meeting in such manner
shall constitute presence in person at such meeting.
ARTICLE IV
OFFICERS
Section 1. At its annual meeting, the Board of Directors shall elect
a President, one or more Vice Presidents, a Secretary, a Treasurer, one or
more Assistant Secretaries, one or more Assistant Treasurers, and, if the
Board shall so determine, a Chairman, each of whom shall, subject to the
provisions of Article IV, Section 3, hereof, hold office until the next
annual election of officers and until his successor shall have been elected
and qualified. Any two or more offices may be held by the same person
except that the offices of the President and Secretary may not be
simultaneously held by the same person. The Board shall also elect at such
meeting, and, may elect at any regular or special meeting, such other
officers as it may deem
necessary for the prompt and orderly transaction of the business of the
Company. Any vacancy occurring in any office may be filled at any regular
meeting of the Board or at any special meeting of the Board held for that
purpose.
Section 2. In addition to such powers and duties as these By-Laws and
the Board of Directors may prescribe, and except as may be otherwise
provided by the Board, each officer shall have the powers and perform the
duties which by law and general usage appertain to his particular office.
Section 3. Any officer may be removed, with or without cause, at any
time by the Board in its discretion. Vacancies among the officers by
reason of death, resignation, removal (with or without cause) or other
reason shall be filled by the Board of Directors.
ARTICLE V
CHAIRMAN AND PRESIDENT
Section 1. The Chairman, if such office shall be filled by the
Directors, shall, when present, preside at all meetings of said Board and
of the stockholders. He shall have such other authority and shall perform
such additional duties as may be assigned to him from time to time by the
Board of Directors.
Section 2. If the Chairman shall be absent or unable to perform the
duties of his office, or if the office of the Chairman shall not have been
filled by the Directors, the President shall preside at meetings of the
Board of Directors and of the stockholders. He shall have such other
authority and shall perform such additional duties as may be assigned to
him from time to time by the Board of Directors.
ARTICLE VI
VICE PRESIDENTS
Section 1. The Vice Presidents shall have such powers and duties as
may be assigned to them from time to time by the Board of Directors or the
President. One of such Vice Presidents may be designated by said Board as
Executive Vice President and, if so designated, shall exercise the powers
and perform the duties of the President in the absence of the President or
if the President is unable to perform the duties of his office. The Board
of Directors may also designate one or more of such Vice Presidents as
Senior Vice President(s).
ARTICLE VII
SECRETARY
Section 1. The Secretary shall keep the minutes of all meetings of
the stockholders and of the Board of Directors. He shall give notice of
all meetings of the stockholders and of said Board. He shall record all
votes taken at such meetings. He shall be custodian of all contracts,
leases, assignments, deeds and other instruments in writing and documents
not properly belonging to the office of the Treasurer, and shall perform
such additional duties as may be assigned to him from time to time by the
Board of Directors, the Chairman, the President or by law. He shall be the
registered agent of the Company.
Section 2. He shall have the custody of the Corporate Seal of the
Company and shall affix the same to all instruments requiring a seal except
as otherwise provided in these By-Laws.
ARTICLE VIII
ASSISTANT SECRETARIES
Section 1. One or more Assistant Secretaries shall perform the duties
of the Secretary if the Secretary shall be absent or unable to perform the
duties of his office. The Assistant Secretaries shall perform such
additional duties as may be assigned to them from time to time by the Board
of Directors, the Chairman, the President or the Secretary.
ARTICLE IX
TREASURER
Section 1. The Treasurer shall have charge of all receipts and
disbursements of the Company, and shall be the custodian of the Company's
funds. He shall have full authority to receive and give receipts for all
moneys due and payable to the Company from any source whatever, and give
full discharge for the same, and to endorse checks, drafts and warrants in
its name and on its behalf. He shall sign all checks, notes, drafts and
similar instruments, except as otherwise provided for by the Board of
Directors.
Section 2. He shall perform such additional duties as may be assigned
to him from time to time by the Board of Directors, the Chairman, the
President or by law.
ARTICLE X
ASSISTANT TREASURERS
Section 1. One or more Assistant Treasurers shall perform the duties
of the Treasurer if the Treasurer shall be absent or unable to perform the
duties of his office. The Assistant Treasurers shall perform such
additional duties as may be assigned to them from time to time by the Board
of Directors, the Chairman, the President or the Treasurer.
ARTICLE XI
COMMITTEES
Section 1. The Board of Directors may designate, by resolution
adopted by a majority of the full Board of Directors, two or more Directors
to constitute an executive committee or other committees, which committees
shall have and may exercise all such authority of the Board of Directors as
may be delegated to such committees in accordance with law. At the time of
such appointment, the Board of Directors may also appoint, in respect to
each member of any such committee, another Director to serve as his
alternate at any meeting of such committee which such member is unable to
attend. Each alternate shall have, during his attendance at a meeting of
such committee, all the rights and obligations of a regular member thereof.
Any vacancy on any committee or among alternate members thereof shall be
filled by the Board of Directors.
ARTICLE XII
STOCK CERTIFICATES
Section 1. All stock certificates may bear the facsimile signatures
of the President or a Vice President and the Secretary or an Assistant
Secretary or the Treasurer or an Assistant Treasurer and a facsimile seal
of the Company, or may be signed by the President or a Vice President and
the Secretary or an Assistant Secretary or the Treasurer or an Assistant
Treasurer and may be sealed by one of such officers.
ARTICLE XIII
CORPORATE SEAL
Section 1. The corporate seal of the Company shall be circular in
form with the name of the Company inscribed therein.
ARTICLE XIV
INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES
AND AGENTS
Section 1. The Board of Directors may, as and to the extent permitted
by law, indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a director, officer, employee or agent
of the corporation or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses,
including attorneys' fees, actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit.
ARTICLE XV
AMENDMENTS
Section 1. These By-Laws may be altered, amended, added to or
repealed from time to time by an affirmative vote of the holders of a
majority of the voting powers of shares entitled to vote thereon at any
meeting of the shareholders called for the purpose or by an affirmative
vote of Directors holding a majority of the number of directorships at any
meeting of the Board of Directors called for that purpose.
Exhibit 4.2.14
SUPPLEMENTAL INDENTURE
Dated as of December 1, 1993
TO
Indenture of Mortgage and Deed of Trust
Dated as of May 1, 1921
THE CONNECTICUT LIGHT AND POWER COMPANY
TO
BANKERS TRUST COMPANY, Trustee
Series ZZ Bonds, Due December 1, 2025
THE CONNECTICUT LIGHT AND POWER COMPANY
Supplemental Indenture, Dated as of December 1, 1993
TABLE OF CONTENTS
PAGE
Parties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Granting Clauses . . . . . . . . . . . . . . . . . . . . . . . . . 2
Habendum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Grant in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 1.
FORM AND PROVISIONS OF BONDS OF SERIES ZZ
SECTION 1.01. Designation; Amount. . . . . . . . . . . . . . . . . 3
SECTION 1.02. Form of Bonds of Series ZZ . . . . . . . . . . . . . 3
SECTION 1.03. Provisions of Bonds of Series ZZ; Interest Accrual . 3
SECTION 1.04. Transfer and Exchange of Bonds of Series ZZ. . . . . 4
SECTION 1.05. Sinking and Improvement Fund . . . . . . . . . . . . 4
ARTICLE 2.
REDEMPTION OF BONDS OF SERIES ZZ . . . . . . 4
ARTICLE 3.
MISCELLANEOUS
SECTION 3.01. Benefits of Supplemental Indenture and
Bonds of Series ZZ. . . . . . . . . . . . . . . . . 5
SECTION 3.02. Effect of Table of Contents and Headings . . . . . . 5
SECTION 3.03. Counterparts . . . . . . . . . . . . . . . . . . . . 5
TESTIMONIUM. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ACKNOWLEDGMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . 6
SCHEDULE A - Form of Bond of Series ZZ, Form of
Trustee's Certificate. . . . . . . . . . . . . . . . . . 7
SCHEDULE B - Property Subject to the Lien of the Mortgage. . . . . 13
SUPPLEMENTAL INDENTURE, dated as of the first day of December, 1993,
between THE CONNECTICUT LIGHT AND POWER COMPANY, a corporation organized
and existing under the laws of the State of Connecticut (hereinafter called
"Company") and BANKERS TRUST COMPANY, a corporation organized and existing
under the laws of the State of New York (hereinafter called "Trustee").
WHEREAS, the Company heretofore duly executed, acknowledged and
delivered to the Trustee a certain Indenture of Mortgage and Deed
of Trust dated as of May 1, 1921, and fifty-eight Supplemental Indentures
thereto dated respectively as of May 1, 1921, February 1, 1924, July 1,
1926, October 20, 1936, December 1, 1936, December 1, 1938, August 31,
1944, September 1, 1944, May 1, 1945, October 1, 1945, November 1, 1949,
December 1, 1952, December 1, 1955, January 1, 1958, February 1, 1960,
April 1, 1961, September 1, 1963, April 1, 1967, May 1, 1967, January 1,
1968, October 1, 1968, December 1, 1969, January 1, 1970, October 1, 1970,
December 1, 1971, August 1, 1972, April 1, 1973, March 1, 1974, February 1,
1975, September 1, 1975, May 1, 1977, March 1, 1978, September 1, 1980,
October 1, 1981, June 30, 1982, July 1, 1983, January 1, 1984, October 1,
1985, September 1, 1986, April 1, 1987, October 1, 1987, November 1, 1987,
April 1, 1988, November 1, 1988, June 1, 1989, September 1, 1989, December
1, 1989, April 1, 1992, July 1, 1992, October 1, 1992, July 1, 1993, and
July 1, 1993 (said Indenture of Mortgage and Deed of Trust (i) as
heretofore amended, being hereinafter generally called the "Mortgage
Indenture," and (ii) together with said Supplemental Indentures thereto,
being hereinafter generally called the "Mortgage"), all of which have been
duly recorded as required by law, for the purpose of securing its First and
Refunding Mortgage Bonds (of which $1,407,000,000 aggregate principal
amount are outstanding at the date of this Supplemental Indenture) to an
unlimited amount, issued and to be issued for the purposes and in the
manner therein provided, of which Mortgage this Supplemental Indenture is
intended to be made a part, as fully as if therein recited at length;
WHEREAS, the Company by appropriate and sufficient corporate action in
conformity with the provisions of the Mortgage has duly determined to
create a further series of bonds under the Mortgage to be designated "First
and Refunding Mortgage 7-3/8% Bonds, Series ZZ" (hereinafter generally
referred to as the "bonds of Series ZZ"), to consist of fully registered
bonds containing terms and provisions duly fixed and determined by the
Board of Directors of the Company and expressed in this Supplemental
Indenture, such fully registered bonds and the Trustee's certificate of its
authentication thereof to be substantially in the forms thereof
respectively set forth in Schedule A appended hereto and made a part
hereof; and
WHEREAS, the execution and delivery of this Supplemental Indenture and
the issue of not exceeding one hundred and twenty-five million dollars
($125,000,000) in aggregate principal amount of bonds of Series ZZ and
other necessary actions have been duly authorized by the Board of Directors
of the Company; and
WHEREAS, the Company proposes to execute and deliver this Supplemental
Indenture to provide for the issue of the bonds of Series ZZ and to confirm
the lien of the Mortgage on the property referred to below, all as
permitted by Section 14.01 of the Mortgage Indenture; and
WHEREAS, all acts and things necessary to constitute this Supplemental
Indenture a valid, binding and legal instrument and to make the bonds of
Series ZZ, when executed by the Company and authenticated by the Trustee
valid, binding and legal obligations of the Company have been authorized
and performed;
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE OF MORTGAGE AND DEED OF
TRUST WITNESSETH:
That in order to secure the payment of the principal of and interest on
all bonds issued and to be issued under the Mortgage, according to their
tenor and effect, and according to the terms of the Mortgage and this
Supplemental Indenture, and to secure the performance of the covenants and
obligations in said bonds and in the Mortgage and this Supplemental
Indenture respectively contained, and for the better assuring and
confirming unto the Trustee, its successor or successors and its or their
assigns, upon the trusts and for the purposes expressed in the Mortgage and
this Supplemental Indenture, all and singular the hereditament, premises,
estates and property of the Company thereby conveyed or assigned or
intended so to be, or which the Company may thereafter have become bound to
convey or assign to the Trustee, as security for said bonds (except such
hereditament, premises, estates and property as shall have been disposed of
or released or withdrawn from the lien of the Mortgage and this
Supplemental Indenture, in accordance with the provisions thereof and
subject to alterations, modifications and changes in said hereditament,
premises, estates and property as permitted under the provisions thereof),
the Company, for and in consideration of the premises and the sum of One
Dollar ($1.00) to it in hand paid by the Trustee, the receipt whereof is
hereby acknowledged, and of other valuable considerations, has granted,
bargained, sold, assigned, mortgaged, pledged, transferred, set over,
aliened, enfeoffed, released, conveyed and confirmed, and by these presents
does grant, bargain, sell, assign, mortgage, pledge, transfer, set over,
alien, enfeoff, release, convey and confirm unto said Bankers Trust
Company, as Trustee, and its successor or successors in the trusts created
by the Mortgage and this Supplemental Indenture, and its and their assigns,
all of said hereditament, premises, estates and property (except and
subject as aforesaid), as fully as though described at length herein,
including, without limitation of the foregoing, the property, rights and
privileges of the Company described or referred to in Schedule B hereto.
Together with all plants, buildings, structures, improvements and
machinery located upon said real estate or any portion thereof, and all
rights, privileges and easements of every kind and nature appurtenant
thereto, and all and singular the tenements, hereditament and appurtenances
belonging to the real estate or any part thereof described or referred to
in Schedule B or intended so to be, or in any wise appertaining thereto,
and the reversions, remainders, rents, issues and profits thereof, and also
all the estate, right, title, interest, property, possession, claim and
demand whatsoever, as well in law as in equity, of the Company, of, in and
to the same and any and every part thereof, with the appurtenances; except
and subject as aforesaid.
TO HAVE AND TO HOLD all and singular the property, rights and
privileges hereby granted or mentioned or intended so to be, together with
all and singular the reversions, remainders, rents, revenues, income,
issues and profits, privileges and appurtenances, now or hereafter
belonging or in any way appertaining thereto, unto the Trustee and its
successor or successors in the trust created by the Mortgage and this
Supplemental Indenture, and its and their assigns, forever, and with like
effect as if the above described property, rights and privileges had been
specifically described at length in the Mortgage and this Supplemental
Indenture.
Subject, however, to permitted liens, as defined in the Mortgage
Indenture.
IN TRUST, NEVERTHELESS, upon the terms and trusts of the Mortgage and
this Supplemental Indenture for those who shall hold the bonds and coupons
issued and to be issued thereunder, or any of them, without preference,
priority or distinction as to lien of any of said bonds and coupons over
any others thereof by reason of priority in the time of the issue or
negotiation thereof, or otherwise howsoever, subject, however, to the
provisions in reference to extended, transferred or pledged coupons and
claims for interest set forth in the Mortgage and this Supplemental
Indenture (and subject to any sinking fund that may heretofore have been or
hereafter be created for the benefit of any particular series).
And it is hereby covenanted that all such bonds of Series ZZ are to be
issued, authenticated and delivered, and that the mortgaged premises are to
be held by the Trustee, upon and subject to the trusts, covenants,
provisions and conditions and for the uses and purposes set forth in the
Mortgage and this Supplemental Indenture and upon and subject to the
further covenants, provisions and conditions and for the uses and purposes
hereinafter set forth, as follows, to wit:
ARTICLE 1.
FORM AND PROVISIONS OF BONDS OF SERIES ZZ
SECTION 1.01. Designation; Amount. The bonds of Series ZZ shall be
designated "First and Refunding Mortgage 7-3/8% Bonds, Series ZZ" and,
subject to Section 2.08 of the Mortgage Indenture, shall not exceed one
hundred and twenty-five million dollars ($125,000,000) in aggregate
principal amount at any one time outstanding. The initial issue of the
bonds of Series ZZ may be effected upon compliance with the applicable
provisions of the Mortgage Indenture.
SECTION 1.02. Form of Bonds of Series ZZ. The bonds of Series ZZ
shall be issued only in fully registered form without coupons in
denominations of one thousand dollars ($1,000) and multiples thereof.
The bonds of Series ZZ and the certificate of the Trustee upon said
bonds shall be substantially in the forms thereof respectively set forth in
Schedule A appended hereto.
SECTION 1.03. Provisions of Bonds of Series ZZ; Interest Accrual. The
bonds of Series ZZ shall mature on December 1, 2025 and shall bear
interest, payable semiannually on the first days of June and December of
each year, commencing June 1, 1994, at the rate specified in their title,
until the Company's obligation in respect of the principal thereof shall be
discharged; and shall be payable both as to principal and interest at the
office or agency of the Company in the Borough of Manhattan, New York, New
York, in any coin or currency of the United States of America which at the
time of payment is legal tender for the payment of public and private
debts. The interest on the bonds of Series ZZ, whether in temporary or
definitive form, shall be payable without presentation of such bonds; and
only to or upon the written order of the registered holders thereof of
record at the applicable record date. The bonds of Series ZZ shall be
callable for redemption in whole or in part according to the terms and
provisions provided herein in Article 2.
Each bond of Series ZZ shall be dated as of December 1, 1993 and
shall bear interest on the principal amount thereof from the interest
payment date next preceding the date of authentication thereof by the
Trustee to which interest has been paid on the bonds of Series ZZ, or if
the date of authentication thereof is prior to May 16, 1994, then from the
date of original issuance, or if the date of authentication thereof be an
interest payment date to which interest is being paid or a date between the
record date for any such interest payment date and such interest payment
date, then from such interest payment date.
The person in whose name any bond of Series ZZ is registered at the
close of business on any record date (as hereinafter defined) with respect
to any interest payment date shall be entitled to receive the interest
payable on such interest payment date notwithstanding the cancellation of
such bond upon any registration of transfer or exchange thereof subsequent
to the record date and prior to such interest payment date, except that if
and to the extent the Company shall default in the payment of the interest
due on such interest payment date, then such defaulted interest shall be
paid to the person in whose name such bond is registered on a subsequent
record date for the payment of defaulted interest if one shall have been
established as hereinafter provided and otherwise on the date of payment of
such defaulted interest. A subsequent record date may be established by
the Company by notice mailed to the owners of bonds of Series ZZ not less
than ten days preceding such record date, which record date shall not be
more than thirty days prior to the subsequent interest payment date. The
term "record date" as used in this Section with respect to any regular
interest payment (i.e., June 1 or December 1) shall mean the May 15 or
November 15, as the case may be, next preceding such interest payment date,
or if such May 15 or November 15 shall be a legal holiday or a day on which
banking institutions in the Borough of Manhattan, New York, New York are
authorized by law to close, the next preceding day which shall not be a
legal holiday or a day on which such institutions are so authorized to
close.
SECTION 1.04. Transfer and Exchange of Bonds of Series ZZ. The bonds
of Series ZZ may be surrendered for registration of transfer as provided in
Section 2.06 of the Mortgage Indenture at the office or agency of the
Company in the Borough of Manhattan, New York, New York, and may be
surrendered at said office for exchange for a like aggregate principal
amount of bonds of Series ZZ of other authorized denominations.
Notwithstanding the provisions of Section 2.06 of the Mortgage Indenture,
no charge, except for taxes or other governmental charges, shall be made by
the Company for any registration of transfer of bonds of Series ZZ or for
the exchange of any bonds of Series ZZ for such bonds of other authorized
denominations.
SECTION 1.05. Sinking and Improvement Fund. Each holder of a bond of
Series ZZ, solely by virtue of its acquisition thereof, shall have and be
deemed to have consented, without the need for any further action or
consent by such holder, to any and all amendments to the Mortgage Indenture
which are intended to eliminate or modify in any manner the requirements of
the sinking and improvement fund as provided for in Section 6.14 thereof.
ARTICLE 2.
REDEMPTION OF BONDS OF SERIES ZZ.
The bonds of Series ZZ are not subject to redemption at the option of
the Company prior to December 1, 1998. Thereafter, the bonds of Series ZZ
shall be redeemable as a whole at any time or in part from time to time in
accordance with the provisions of the Mortgage and upon not less than
thirty (30) days' prior notice given by mail as provided in the Mortgage
(which notice may state that it is subject to the receipt of the redemption
moneys by the Trustee on or before the date fixed for redemption and which
notice shall be of no effect unless such moneys are so received on or
before such date), either at the option of the Company, or for the purpose
of any applicable provision of the Mortgage, at the following prices:
(a) if redeemed with trust moneys deposited with or received
by the Trustee pursuant to Section 3.55 or Section 6.06 or Section 6.09 or
Section 6.14 or Article 8.5 of the Mortgage Indenture, then at the
applicable special redemption price, stated as a percentage of the
principal amount, specified under the column headed Special Redemption
Price in the form of bond of Series ZZ set forth in Schedule A appended
hereto, together in every case with accrued and unpaid interest thereon
to the date fixed for redemption; and
(b) otherwise, at the applicable general redemption price,
stated as a percentage of the principal amount, specified under the
column headed General Redemption Price in the form of bond of Series ZZ
set forth in Schedule A appended hereto, together in every case with
accrued and unpaid interest thereon to the date fixed for redemption.
ARTICLE 3.
MISCELLANEOUS.
SECTION 3.01. Benefits of Supplemental Indenture and Bonds of Series
ZZ. Nothing in this Supplemental Indenture, or in the bonds of Series ZZ,
expressed or implied, is intended to or shall be construed to give to any
person or corporation other than the Company, the Trustee and the holders
of the bonds and interest obligations secured by the Mortgage and this
Supplemental Indenture, any legal or equitable right, remedy or claim under
or in respect of this Supplemental Indenture or of any covenant, condition
or provision herein contained. All the covenants, conditions and
provisions hereof are and shall be held to be for the sole and exclusive
benefit of the Company, the Trustee and the holders of the bonds and
interest obligations secured by the Mortgage and this Supplemental
Indenture.
SECTION 3.02. Effect of Table of Contents and Headings. The table of
contents and the descriptive headings of the several Articles and Sections
of this Supplemental Indenture are inserted for convenience of reference
only and are not to be taken to be any part of this Supplemental Indenture
or to control or affect the meaning, construction or effect of the same.
SECTION 3.03. Counterparts. For the purpose of facilitating the
recording hereof, this Supplemental Indenture may be executed in any number
of counterparts, each of which shall be and shall be taken to be an
original and all collectively but one instrument.
IN WITNESS WHEREOF, The Connecticut Light and Power Company has caused
these presents to be executed by a Vice President and its corporate seal to
be hereunto affixed, duly attested by its Secretary or an Assistant
Secretary, and Bankers Trust Company has caused these presents to be
executed by a Vice President or Assistant Vice President and its corporate
seal to be hereunto affixed, duly attested by one of its Assistant
Treasurers, as of the day and year first above written.
THE CONNECTICUT LIGHT AND POWER
COMPANY
Attest:
/s/ Mark A. Joyse By /s/ John B. Keane
Mark A. Joyse John B. Keane
Assistant Secretary Vice President
(SEAL) Signed, sealed and delivered
in the presence of:
/s/ Judith D. Boucher
/s/ Lisa M. DiMano
BANKERS TRUST COMPANY
Attest:
/s/ M. Lisa Morrone By /s/ Robert Gorman
M. Lisa Morrone Robert Gorman
Assistant Treasurer Vice President
(SEAL) Signed, sealed and delivered
in the presence of:
/s/ J. Florio
J. Florio
/s/ Shikha Dombek
Shikha Dombek
STATE OF CONNECTICUT )
) SS.: BERLIN
COUNTY OF HARTFORD )
On this 13th day of December 1993, before me, Rose Valintakonis, the
undersigned officer, personally appeared John B. Keane and Mark A. Joyse,
who acknowledged themselves to be Vice President and Assistant Secretary,
respectively, of THE CONNECTICUT LIGHT AND POWER COMPANY, a corporation,
and that they, as such Vice President and such Assistant Secretary, being
authorized so to do, executed the foregoing instrument for the purpose
therein contained, by signing the name of the corporation by themselves as
Vice President and Assistant Secretary, and as their free act and deed.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Rose Valintakonis
Rose Valintakonis
Notary Public
My commission expires March 31, 1994
(SEAL)
STATE OF NEW YORK )
) SS.: NEW YORK
COUNTY OF NEW YORK )
On this 8th day of December, 1993, before me, /s/ Sharon V. Alston, the
undersigned officer, personally appeared Robert Gorman and M. Lisa Morrone,
who acknowledged themselves to be Vice President and Assistant Treasurer,
respectively, of BANKERS TRUST COMPANY, a corporation, and that they, as
such Vice President and such Assistant Treasurer, being authorized so to
do, executed the foregoing instrument for the purposes therein contained,
by signing the name of the corporation by themselves as Vice President and
Assistant Treasurer, and as their free act and deed.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Sharon V. Alston
Notary Public
My Commission expires May 7, 1994
(SEAL)
SCHEDULE A
[FORM OF BONDS OF SERIES ZZ]
No. $
THE CONNECTICUT LIGHT AND POWER COMPANY
Incorporated under the Laws of the State of Connecticut
FIRST AND REFUNDING MORTGAGE 7-3/8% BOND, SERIES ZZ
PRINCIPAL DUE DECEMBER 1, 2025
FOR VALUE RECEIVED, THE CONNECTICUT LIGHT AND POWER COMPANY, a
corporation organized and existing under the laws of the State of
Connecticut (hereinafter called the Company), hereby promises to pay to
, or registered assigns, the principal sum of
dollars, on the first day of December, 2025 and
to pay interest on said sum, semiannually on the first days of June and
December in each year, commencing June 1, 1994, until the Company's
obligation with respect to said principal sum shall be discharged, at the
rate per annum specified in the title of this bond from the interest
payment date next preceding the date of authentication hereof to which
interest has been paid on the bonds of this series, or if the date of
authentication hereof is prior to May 16, 1994, then from the date of
original issuance, or if the date of authentication hereof is an interest
payment date to which interest is being paid or a date between the record
date for any such interest payment date and such interest payment date,
then from such interest payment date. Both principal and interest shall be
payable at the office or agency of the Company in the Borough of Manhattan,
New York, New York, in such coin or currency of the United States of
America as at the time of payment is legal tender for the payment of public
and private debts.
Each installment of interest hereon (other than overdue interest) shall
be payable to the person who shall be the registered owner of this bond at
the close of business on the record date, which shall be the May 15 or
November 15, as the case may be, next preceding the interest payment date,
or, if such May 15 or November 15 shall be a legal holiday or a day on
which banking institutions in the Borough of Manhattan, New York, New York,
are authorized by law to close, the next preceding day which shall not be a
legal holiday or a day on which such institutions are so authorized to
close.
Reference is hereby made to the further provisions of this bond set
forth on the reverse hereof, including without limitation provisions in
regard to the call and redemption and the registration of transfer and
exchangeability of this bond, and such further provisions shall for all
purposes have the same effect as though fully set forth in this place.
This bond shall not become or be valid or obligatory until the
certificate of authentication hereon shall have been signed by Bankers
Trust Company (hereinafter with its successors as defined in the Mortgage
hereinafter referred to, generally called the Trustee), or by such a
successor.
IN WITNESS WHEREOF, The Connecticut Light and Power Company has caused
this bond to be executed in its corporate name and on its behalf by its
President by his signature or a facsimile thereof, and its corporate seal
to be affixed or imprinted hereon and attested by the manual or facsimile
signature of its Secretary.
Dated as of December 1, 1993.
THE CONNECTICUT LIGHT AND POWER COMPANY
By
President
Attest:
Secretary
[FORM OF TRUSTEE'S CERTIFICATE]
Bankers Trust Company hereby certifies that this bond is one of the
bonds described in the within mentioned Mortgage.
BANKERS TRUST COMPANY, TRUSTEE
By
Authorized Officer
Dated:
[FORM OF BOND]
[REVERSE]
THE CONNECTICUT LIGHT AND POWER COMPANY
FIRST AND REFUNDING MORTGAGE 7-3/8% BOND, SERIES ZZ
This bond is one of an issue of bonds of the Company, of an unlimited
authorized amount of coupon bonds or registered bonds without coupons, or
both, known as its First and Refunding Mortgage Bonds, all issued or to be
issued in one or more series, and is one of a series of said bonds limited
in principal amount to one hundred and twenty-five million dollars
($125,000,000), consisting only of registered bonds without coupons and
designated "First and Refunding Mortgage 7-3/8% Bonds, Series ZZ," all of
which bonds are issued or are to be issued under, and equally and ratably
secured by, a certain Indenture of Mortgage and Deed and Trust dated as of
May 1, 1921, and by fifty-nine Supplemental Indentures dated respectively
as of May 1, 1921, February 1, 1924, July 1, 1926, June 20, 1928, June 1,
1932, July 1, 1932, July 1, 1935, September 1, 1936, October 20, 1936,
December 1, 1936, December 1, 1938, August 31, 1944, September 1, 1944, May
1, 1945, October 1, 1945, November 1, 1949, December 1, 1952, December 1,
1955, January 1, 1958, February 1, 1960, April 1, 1961, September 1, 1963,
April 1, 1967, May 1, 1967, January 1, 1968, October 1, 1968, December 1,
1969, January 1, 1970, October 1, 1970, December 1, 1971, August 1, 1972,
April 1, 1973, March 1, 1974, February 1, 1975, September 1, 1975, May 1,
1977, March 1, 1978, September 1, 1980, October 1, 1981, June 30, 1982,
October 1, 1982, July 1, 1983, January 1, 1984, October 1, 1985, September
1, 1986, April 1, 1987, October 1, 1987, November 1, 1987, April 1, 1988,
November 1, 1988, June 1, 1989, September 1, 1989, December 1, 1989, April
1, 1992, July 1, 1992, October 1, 1992, July 1, 1993, July 1, 1993 and
December 1, 1993 (said Indenture of Mortgage and Deed of Trust and
Supplemental Indentures being collectively referred to herein as the
"Mortgage"), all executed by the Company to Bankers Trust Company, as
Trustee, all as provided in the Mortgage to which reference is made for a
statement of the property mortgaged and pledged, the nature and extent of
the security, the rights of the holders of the bonds in respect thereof and
the terms and conditions upon which the bonds may be issued and are
secured; but neither the foregoing reference to the Mortgage nor any
provision of this bond or of the Mortgage shall affect or impair the
obligation of the Company, which is absolute, unconditional and
unalterable, to pay at the maturities herein provided the principal of and
interest on this bond as herein provided. The principal of this bond may
be declared or may become due on the conditions, in the manner and at the
time set forth in the Mortgage, upon the happening of an event of default
as in the Mortgage provided.
This bond is transferable by the registered holder hereof in person or
by attorney upon surrender hereof at the office or agency of the Company in
the Borough of Manhattan, New York, New York, together with a written
instrument of transfer in approved form, signed by the holder, and a new
bond or bonds of this series for a like principal amount in authorized
denominations will be issued in exchange, all as provided in the Mortgage.
Prior to due presentment for registration of transfer of this bond the
Company and the Trustee may deem and treat the registered owner hereof as
the absolute owner hereof, whether or not this bond be overdue, for the
purpose of receiving payment and for all other purposes, and neither the
Company nor the Trustee shall be affected by any notice to the contrary.
This bond is exchangeable at the option of the registered holder
hereof upon surrender hereof, at the office or agency of the Company in the
Borough of Manhattan, New York, New York, for an equal principal amount of
bonds of this series of other authorized denominations, in the manner and
on the terms provided in the Mortgage.
Bonds of this series are to be issued initially under a book-entry only
system and, except as hereinafter provided, registered in the name of The
Depository Trust Company, New York, New York ("DTC") or its nominee, which
shall be considered to be the holder of all bonds of this series for all
purposes of the Mortgage, including, without limitation, payment by the
Company of principal of and interest on such bonds of this series and
receipt of notices and exercise of rights of holders of such bonds of this
series. There shall be a single bond of this series which shall be
immobilized in the custody of DTC with the owners of book-entry interests
in bonds of this series ("Book-Entry Interests") having no right to receive
bonds of this series in the form of physical securities or certificates.
Ownership of Book-Entry Interests shall be shown by book-entry on the
system maintained and operated by DTC, its participants (the
"Participants") and certain persons acting through the Participants.
Transfers of ownership of Book-Entry Interests are to be made only by DTC
and the Participants by that book-entry system, the Company and the Trustee
having no responsibility therefor so long as bonds of this series are
registered in the name of DTC or its nominee. DTC is to maintain records
of positions of Participants in bonds of this series, and the Participants
and persons acting through Participants are to maintain records of the
purchasers and owners of Book-Entry Interests. If DTC or its nominee
determines not to continue to act as a depository for the bonds of this
series in connection with a book-entry only system, another depository, if
available, may act instead and the single bond of this series will be
transferred into the name of such other depository or its nominee, in which
case the above provisions will continue to apply to the new depository. If
the book-entry only system for bonds of this series is discontinued for any
reason, upon surrender and cancellation of the single bond of this series
registered in the name of the then depository or its nominee, new
registered bonds of this series will be issued in authorized denominations
to the holders of Book-Entry Interests in principal amounts coinciding with
the amounts of Book-Entry Interests shown on the book-entry system
immediately prior to the discontinuance thereof. Neither the Trustee nor
the Company shall be responsible for the accuracy of the interests shown on
that system.
The bonds of this series are not subject to redemption at the option
of the Company prior to December 1, 1998. Thereafter, the bonds of this
series are subject to redemption prior to maturity as a whole at any time
or in part from time to time in accordance with the provisions of the
Mortgage, upon not less than thirty (30) days' prior notice (which notice
may be made subject to the deposit of redemption moneys with the Trustee
before the date fixed for redemption) given by mail as provided in the
Mortgage, either at the option of the Company, or for the purposes of any
applicable provision of the Mortgage, at the following prices, together in
every case with accrued and unpaid interest thereon to the date fixed for
redemption:
(a) if redeemed with trust moneys deposited with or received by
the Trustee pursuant to specified provisions of the Mortgage, then at
the applicable special redemption price, stated as a percentage of the
principal amount, set forth below; and
(b) otherwise, at the applicable general redemption price,
stated as a percentage of the principal amount, set forth below:
If date fixed for General Special
redemption falls Redemption Redemption
within twelve months' Price (% Price (%
period ending the of principal of principal
last day of November amount called) amount called)
1999 104.47% 100.00%
2000 104.17 100.00
2001 103.88 100.00
2002 103.58 100.00
2003 103.28 100.00
2004 102.98 100.00
2005 102.68 100.00
2006 102.39 100.00
2007 102.09 100.00
2008 101.79 100.00
2009 101.49 100.00
2010 101.20 100.00
2011 100.90 100.00
2012 100.60 100.00
2013 100.30 100.00
2014 100.00 100.00
2015 100.00 100.00
2016 100.00 100.00
2017 100.00 100.00
2018 100.00 100.00
2019 100.00 100.00
2020 100.00 100.00
2021 100.00 100.00
2022 100.00 100.00
2023 100.00 100.00
2024 100.00 100.00
2025 100.00 100.00
The Mortgage provides that the Company and the Trustee, with consent
of the holders of not less than 66-2/3% in aggregate principal amount of
the bonds at the time outstanding which would be affected by the action
proposed to be taken, may by supplemental indenture add any provisions to
or change or eliminate any of the provisions of the Mortgage or modify the
rights of the holders of the bonds and coupons issued thereunder; provided,
however, that without the consent of the holder hereof no such supplemental
indenture shall affect the terms of payment of the principal of or interest
or premium on this bond, or reduce the aforesaid percentage of the bonds
the holders of which are required to consent to such a supplemental
indenture, or permit the creation by the Company of any mortgage or pledge
or lien in the nature thereof ranking prior to or equal with the lien of
the Mortgage or deprive the holder hereof of the lien of the Mortgage on
any of the property which is subject to the lien thereof.
As set forth in the Supplemental Indenture establishing the terms and
series of the bonds of this series, each holder of this bond, solely by
virtue of its acquisition thereof, shall have and be deemed to have
consented, without the need for any further action or consent by such
holder, to any and all amendments to the Mortgage which are intended to
eliminate or modify in any manner the requirements of the sinking and
improvement fund as set forth in Section 6.14 of the Mortgage.
No recourse shall be had for the payment of the principal of or the
interest on this bond, or any part thereof, or for any claim based thereon
or otherwise in respect thereof, to any incorporator, or any past, present
or future stockholder, officer or director of the Company, either directly
or indirectly, by virtue of any statute or by enforcement of any assessment
or otherwise, and any and all liability of the said incorporators,
stockholders, officers or directors of the Company in respect to this bond
is hereby expressly waived and released by every holder hereof.
[This page intentionally left blank]
SCHEDULE B
PROPERTY SUBJECT TO THE LIEN OF THE MORTGAGE
IN CONNECTICUT
TOWN OF ANDOVER
All the following described rights, privileges and easements
situated in the Town of Andover, County of Tolland and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(1) Lynn M. Wytas et al. August 12, 1993 59 588
(2) Joseph A. Toce August 16, 1993 59 590
(3) Jessee Person et al. September 29, 1993 59 873
TOWN OF ASHFORD
All the following described rights, privileges and
easements situated in the Town of Ashford, County of Windham and
State of Connecticut, more particularly described in the
following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(4) State of Connecticut September 16, 1985 78 894
(5) Colonial Builders of New December 13, 1985 79 220
England, Inc.
(6) Trade Craftsmen, Inc. September 21, 1993 102 516
TOWN OF AVON
All the following described rights, privileges and easements
situated in the Town of Avon, County of Hartford and State of Connecticut,
more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(7) Avon Park Properties June 24, 1993 280 150
(8) Orchard Farm Development, Inc. June 23, 1993 280 120
TOWN OF BERLIN
All the following described rights, privileges and easements
situated in the Town of Berlin, County of Hartford and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(9) Louis F. Grabowski et al. July 8, 1993 349 370
(10) Kenneth J. Dorio June 21, 1993 349 372
TOWN OF BRISTOL
All the following described rights, privileges and easements
situated in the Town of Bristol, County of Hartford and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(11) East View Farm Associates August 5, 1993 1100 872
TOWN OF CHAPLIN
All the following described rights, privileges and easements
situated in the Town of Chaplin, County of Windham and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(12) Raymond B. Bettencourt et al. February 17, 1987 44 191
TOWN OF CHESHIRE
All the following described rights, privileges and easements
situated in the Town of Cheshire, County of New Haven and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(13) Copper Valley Estates, Inc. August 23, 1993 998 33
(14) Orchard View Construction Co., August 17, 1993 998 163
Inc.
TOWN OF COLCHESTER
All the following described rights, privileges and easements
situated in the Town of Colchester, County of New London and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(15) William R. Swenson November 19, 1992 333 319
TOWN OF COLUMBIA
All the following described rights, privileges and easements
situated in the Town of Columbia, County of Tolland and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(16) Francis G. Kosowicz March 25, 1987 75 137
(17) Randazzo Associates October 8, 1993 100 225
TOWN OF COVENTRY
All the following described rights, privileges and easements
situated in the Town of Coventry, County of Tolland and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(18) Frank Infante July 1, 1993 492 246
(19) Country Place Associates, Inc. July 13, 1987 345 331
(20) Gerald P. Rothman September 29, 1988 382 66
(21) Paxton Development Group July 2, 1993 492 108
Limited Partnership
(22) Paxton Development Group July 10, 1993 493 98
Limited Partnership et al.
TOWN OF EASTFORD
All the following described rights, privileges and easements
situated in the Town of Eastford, County of Windham and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(23) Evelyn Day Warren August 12, 1993 34 197
TOWN OF ELLINGTON
All the following described rights, privileges and easements
situated in the Town of Ellington, County of Tolland and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(24) The Apostolic Christian Church July 19, 1993 201 62
of Ellington, Inc.
(25) Robert A. Ludwig et al. August 25, 1978 111 258
(26) Gardner L. Chapman July 28, 1986 142 112
(27) Evandro S. Santini October 21, 1985 135 919
(28) Michael J. Stosonis et al. August 7, 1978 111 260
(29) I-86 Co. October 8, 1993 203 477
TOWN OF ENFIELD
All the following described rights, privileges and easements
situated in the Town of Enfield, County of Hartford and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(30) Maine State Retirement System June 11, 1993 788 127
(31) Betty Ann Reilly May 28, 1993 795 314
(32) Charles R. Garrow et al. August 19, 1993 809 162
TOWN OF FARMINGTON
All the following described rights, privileges and easements
situated in the Town of Farmington, County of Hartford and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(33) Lawrence F. Webster July 15, 1993 465 705
TOWN OF FRANKLIN
All the following described rights, privileges and easements
situated in the Town of Franklin, County of New London and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(34) Crossen Builders, Inc. December 24, 1986 35 17
TOWN OF KILLINGLY
All the following described rights, privileges and easements
situated in the Town of Killingly, County of Windham and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(35) Edith B. Hughes et al. August 27, 1993 581 275
(36) Robert A. Mineau et al. September 22, 1993 583 204
(37) Green Hollow Associates September 16, 1993 583 201
TOWN OF LEBANON
All the following described rights, privileges and easements
situated in the Town of Lebanon, County of New London and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(38) Michael S. Block September 28, 1993 154 799
TOWN OF MANCHESTER
All the following described rights, privileges and easements
situated in the Town of Manchester, County of Hartford and State of
Connecticut, more particularly described in the
following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(39) Downeast Associates Limited August 20, 1993 1626 298
*Partnership
*Inter alia - South Windsor
TOWN OF MANSFIELD
All the following described rights, privileges and easements
situated in the Town of Mansfield, County of Tolland and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(40) Lodi Associates et al. July 13, 1993 338 67
(41) Joseph Glasser December 5, 1986 245 480
(42) Mansfield Cooperative, Inc. August 13, 1993 340 4
(43) Mansfield Retirement Community, July 14, 1993 341 154
Inc.
TOWN OF NAUGATUCK
All the following described rights, privileges and easements
situated in the Town of Naugatuck, County of New Haven and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(44) Richard F. Bushka et al. April 6, 1993 374 79
TOWN OF NEWINGTON
All the following described rights, privileges and easements
situated in the Town of Newington, County of Hartford and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(45) Ramblewood, Incorporated September 2, 1993 931 228
TOWN OF NEWTOWN
All the following described rights, privileges and easements
situated in the Town of Newtown, County of Fairfield and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(46) Russett Road Developers, Inc. June 15, 1993 471 39
(47) Kevin F. Braun et al. August 6, 1992 453 665
(48) Craig M. Berger January 30, 1991 428 104
TOWN OF NEWTOWN
All the following described pieces or parcels of land with any
improvements thereon situated in the Town of Newtown, County of Fairfield
and State of Connecticut, viz:
(49) A certain piece of parcel of land located in the Town of Newtown,
County of Fairfield and State of Connecticut, containing 6.06 acres,
acquired from Craig M. Berger, in deed dated January 30, 1991, recorded in
Volume 428, Page 78 of the Newtown land records.
TOWN OF PLAINFIELD
All the following described rights, privileges and easements
situated in the Town of Plainfield, County of Windham and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(50) Dow Road Associates, Inc. October 1, 1993 218 504
(51) Alice C. Ferrance October 14, 1993 218 548
TOWN OF PLAINVILLE
All the following described rights, privileges and easements
situated in the Town of Plainville, County of Hartford and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(52) Brian J. Corriveau et al. June 17, 1993 301 636
(53) Stephen Martino et al. June 17, 1993 301 645
TOWN OF POMFRET
All the following described rights, privileges and easements
situated in the Town of Pomfret, County of Windham and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(54) The W. B. Lambot Lumber & November 20, 1986 62 278
Supply Co.
(55) Burt-Fanning Salmon et al. November 20, 1986 62 282
(56) Richard G. Whipple November 20, 1986 62 280
TOWN OF PUTNAM
All the following described rights, privileges and easements
situated in the Town of Putnam, County of Windham and State of Connecticut,
more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(57) David E. Nichols August 31, 1993 250 158*
*Inter alia - Thompson
TOWN OF ROCKY HILL
All the following described rights, privileges and easements
situated in the Town of Rocky Hill, County of Hartford and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(58) Brookwood Village Condominium August 31, 1993 269 971
Association, Inc.
TOWN OF SIMSBURY
All the following described rights, privileges and easements
situated in the Town of Simsbury, County of Hartford and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(59) S. J. Fish & Sons, Incorporated July 12, 1993 414 247
(60) Patrick V. McCue et al. August 2, 1993 415 92
TOWN OF SOUTHINGTON
All the following described rights, privileges and easements
situated in the Town of Southington, County of Hartford and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(61) Xhemali Fazo April 12, 1993 563 875
(62) The Robert L. Jacks and Ted J.April 14, 1993 563 879
Crew Partnership
(63) National Auto/Truckstops, Inc.April 22, 1993 563 885
(64) John E. Valentine August 18, 1993 573 739
TOWN OF SOUTH WINDSOR
All the following described rights, privileges and easements
situated in the Town of South Windsor, County of Hartford and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(65) Downeast Associates Limited August 20, 1993 738 21*
Partnership
(66) R. Squared, Inc. September 22, 1993 747 86
*Inter alia - Manchester
TOWN OF SPRAGUE
All the following described rights, privileges and easements
situated in the Town of Sprague, County of New London and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(67) Gail L. Whitney et al. August 3, 1993 47 619
TOWN OF STAFFORD
All the following described rights, privileges and easements
situated in the Town of Stafford, County of Tolland and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(68) Glenville Development April 14, 1987 238 248
Corporation
(69) Condevco, Inc. December 20, 1983 204 477
TOWN OF STERLING
All the following described rights, privileges and easements
situated in the Town of Sterling, County of Windham and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(70) Charles T. Camp et al. November 6, 1986 52 210
TOWN OF THOMPSON
All the following described rights, privileges and easements
situated in the Town of Thompson, County of Windham and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(71) David E. Nichols August 31, 1993 303 340*
*Inter alia - Putnam
TOWN OF TOLLAND
All the following described rights, privileges and easements
situated in the Town of Tolland, County of Tolland and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(72) Lee & Lamont Realty June 18, 1993 457 3
(73) Thomas E. Sayers et al. July 26, 1993 459 275
(74) Joseph Mihaliak July 23, 1981 204 122
(75) FRI Land Equities, Inc. January 28, 1987 294 28
(76) Vincent A. Vivenzio et al. September 27, 1993 467 356
(77) Brian M. Furbish et al. September 24, 1993 467 358
TOWN OF TORRINGTON
All the following described rights, privileges and easements
situated in the Town of Torrington, County of Litchfield and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(78) Stanley M. Lessler, Trustee June 25, 1993 577 1039
TOWN OF UNION
All the following described rights, privileges and easements
situated in the Town of Union, County of Tolland and State of Connecticut,
more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(79) Joseph P. Pikul et al. August 31, 1993 36 575*
*Inter alia - Woodstock
TOWN OF VERNON
All the following described rights, privileges and easements
situated in the Town of Vernon, County of Tolland and State of Connecticut,
more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(80) Anita Jane Giuletti et al. May 6, 1993 931 251
(81) Courtside Associates, Inc. June 21, 1983 461 17
(82) The Madrid Corporation May 10, 1985 528 96
(83) Samuel P. Belsito, Jr. et al. October 30, 1986 597 347
(84) 155 West Main Street January 28, 1987 614 43
Associates Limited Partnership
TOWN OF WASHINGTON
All the following described pieces or parcels of land with any
improvements thereon situated in the Town of Washington, County of
Litchfield and State of Connecticut, viz:
(85) A certain piece or parcel of land with buildings thereon, located in
the Town of Washington, County of Litchfield and State of Connecticut,
containing 3.00 acres more or less, acquired from Edward R. Lerner and
Leila Lerner, in deed dated April 30, 1993, recorded in Volume 122, Page
1059 of the Washington land records.
TOWN OF WATERBURY
All the following described rights, privileges and easements
situated in the Town of Waterbury, County of New Haven and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(86) Peter Carmody et al. April 15, 1993 2969 192
TOWN OF WETHERSFIELD
All the following described rights, privileges and easements
situated in the Town of Wethersfield, County of Hartford and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(87) Drisdelle Builders, Inc. July 16, 1993 551 641
(88) Mark O'Connor et al. June 24, 1993 557 73
TOWN OF WINDHAM
All the following described rights, privileges and easements
situated in the Town of Windham, County of Windham and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(89) Wal-Mart Stores, Inc. February 18, 1993 420 262
TOWN OF WINDSOR
All the following described rights, privileges and easements
situated in the Town of Windsor, County of Hartford and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(90) Joseph Misky, Jr. June 22, 1993 949 177
(91) The Estate of Benjamin D. July 15, 1992 929 288
Sasportas
(92) T & M Building Company, Inc. February 16, 1993 929 230
(93) Culbro Homes II, Inc. July 16, 1993 963 295
TOWN OF WINDSOR LOCKS
All the following described rights, privileges and easements
situated in the Town of Windsor Locks, County of Hartford and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(94) Cortland Group, Inc. July 1, 1993 215 882
(95) Henry L. Graziani et al. July 31, 1992 217 488
(96) Sales Development Company June 6, 1993 217 491
(97) Jacqueline F. Smith May 21, 1993 217 494
(98) Susan M. Montemerlo September 16, 1993 217 496
TOWN OF WOODBURY
All the following described rights, privileges and easements
situated in the Town of Woodbury, County of Litchfield and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(99) Mark K. Zielke August 23, 1993 196 404
TOWN OF WOODSTOCK
All the following described rights, privileges and easements
situated in the Town of Woodstock, County of Windham and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(100) Philip L. Corrow May 14, 1987 168 37
(101) Alexander J. Parrow et al. August 24, 1990 204 199
(102) Kim Staveski Mack et al. June 28, 1989 193 196
(103) Woodstock Building Associates August 27, 1993 237 352
(104) Thomas P. Laskey July 20, 1993 236 483
(105) Joseph P. Pikul et al. August 31, 1993 237 363*
(106) Henry L. Bugden et al August 31, 1993 237 365
(107) Lawrence O'Neill et al. December 14, 1990 236 212
*Inter alia - Union
Exhibit 4.2.15
SUPPLEMENTAL INDENTURE
Dated as of February 1, 1994
TO
Indenture of Mortgage and Deed of Trust
Dated as of May 1, 1921
THE CONNECTICUT LIGHT AND POWER COMPANY
TO
BANKERS TRUST COMPANY, Trustee
1994 Series A Bonds, Due February 1, 1999
THE CONNECTICUT LIGHT AND POWER COMPANY
Supplemental Indenture, Dated as of February 1, 1994
TABLE OF CONTENTS
PAGE
Parties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Granting Clauses . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Habendum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Grant in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 1.
FORM AND PROVISIONS OF BONDS OF SERIES A
SECTION 1.01. Designation; Amount. . . . . . . . . . . . . . . . . . . 3
SECTION 1.02. Form of Bonds of Series A. . . . . . . . . . . . . . . . 3
SECTION 1.03. Provisions of Bonds of Series A; Interest Accrual. . . . 3
SECTION 1.04. Transfer and Exchange of Bonds of Series A . . . . . . . 4
SECTION 1.05. Sinking and Improvement Fund . . . . . . . . . . . . . . 4
ARTICLE 2.
REDEMPTION OF BONDS OF SERIES A. . . . . . . . . 4
ARTICLE 3.
MISCELLANEOUS
SECTION 3.01. Benefits of Supplemental Indenture and
Bonds of Series A . . . . . . . . . . . . . . . . . . . 4
SECTION 3.02. Effect of Table of Contents and Headings . . . . . . . . 4
SECTION 3.03. Counterparts . . . . . . . . . . . . . . . . . . . . . . 4
TESTIMONIUM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ACKNOWLEDGMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SCHEDULE A - Form of Bond of Series A, Form of
Trustee's Certificate. . . . . . . . . . . . . . . . . . . . 8
SCHEDULE B - Property Subject to the Lien of the Mortgage. . . . . . .13
SUPPLEMENTAL INDENTURE, dated as of the first day of February, 1994,
between THE CONNECTICUT LIGHT AND POWER COMPANY, a corporation organized
and existing under the laws of the State of Connecticut (hereinafter called
"Company") and BANKERS TRUST COMPANY, a corporation organized and existing
under the laws of the State of New York (hereinafter called "Trustee").
WHEREAS, the Company heretofore duly executed, acknowledged and
delivered to the Trustee a certain Indenture of Mortgage and Deed of Trust
dated as of May 1, 1921, and fifty-nine Supplemental Indentures thereto
dated respectively as of May 1, 1921, February 1, 1924, July 1, 1926,
October 20, 1936, December 1, 1936, December 1, 1938, August 31, 1944,
September 1, 1944, May 1, 1945, October 1, 1945, November 1, 1949,
December 1, 1952, December 1, 1955, January 1, 1958, February 1, 1960,
April 1, 1961, September 1, 1963, April 1, 1967, May 1, 1967, January 1,
1968, October 1, 1968, December 1, 1969, January 1, 1970, October 1, 1970,
December 1, 1971, August 1, 1972, April 1, 1973, March 1, 1974, February 1,
1975, September 1, 1975, May 1, 1977, March 1, 1978, September 1, 1980,
October 1, 1981, June 30, 1982, July 1, 1983, January 1, 1984, October 1,
1985, September 1, 1986, April 1, 1987, October 1, 1987, November 1, 1987,
April 1, 1988, November 1, 1988, June 1, 1989, September 1, 1989,
December 1, 1989, April 1, 1992, July 1, 1992, October 1, 1992, July 1,
1993, July 1, 1993 and December 1, 1993 (said Indenture of Mortgage and
Deed of Trust (i) as heretofore amended, being hereinafter generally called
the "Mortgage Indenture," and (ii) together with said Supplemental
Indentures thereto, being hereinafter generally called the "Mortgage"), all
of which have been duly recorded as required by law, for the purpose of
securing its First and Refunding Mortgage Bonds (of which $1,235,000,000
aggregate principal amount are outstanding at the date of this Supplemental
Indenture) to an unlimited amount, issued and to be issued for the purposes
and in the manner therein provided, of which Mortgage this Supplemental
Indenture is intended to be made a part, as fully as if therein recited at
length;
WHEREAS, the Company by appropriate and sufficient corporate action in
conformity with the provisions of the Mortgage has duly determined to
create a further series of bonds under the Mortgage to be designated "First
and Refunding Mortgage 5-1/2% Bonds, 1994 Series A" (hereinafter generally
referred to as the "bonds of Series A"), to consist of fully registered
bonds containing terms and provisions duly fixed and determined by the
Board of Directors of the Company and expressed in this Supplemental
Indenture, such fully registered bonds and the Trustee's certificate of its
authentication thereof to be substantially in the forms thereof
respectively set forth in Schedule A appended hereto and made a part
hereof; and
WHEREAS, the execution and delivery of this Supplemental Indenture and
the issue of not exceeding one hundred and forty million dollars
($140,000,000) in aggregate principal amount of bonds of Series A and other
necessary actions have been duly authorized by the Board of Directors of
the Company; and
WHEREAS, the Company proposes to execute and deliver this Supplemental
Indenture to provide for the issue of the bonds of Series A and to confirm
the lien of the Mortgage on the property referred to below, all as
permitted by Section 14.01 of the Mortgage Indenture; and
WHEREAS, all acts and things necessary to constitute this Supplemental
Indenture a valid, binding and legal instrument and to make the bonds of
Series A, when executed by the Company and authenticated by the Trustee
valid, binding and legal obligations of the Company have been authorized
and performed;
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE OF MORTGAGE AND DEED OF
TRUST WITNESSETH:
That in order to secure the payment of the principal of and interest
on all bonds issued and to be issued under the Mortgage, according to their
tenor and effect, and according to the terms of the Mortgage and this
Supplemental Indenture, and to secure the performance of the covenants and
obligations in said bonds and in the Mortgage and this Supplemental
Indenture respectively contained, and for the better assuring and
confirming unto the Trustee, its successor or successors and its or their
assigns, upon the trusts and for the purposes expressed in the Mortgage and
this Supplemental Indenture, all and singular the hereditament, premises,
estates and property of the Company thereby conveyed or assigned or
intended so to be, or which the Company may thereafter have become bound to
convey or assign to the Trustee, as security for said bonds (except such
hereditament, premises, estates and property as shall have been disposed of
or released or withdrawn from the lien of the Mortgage and this
Supplemental Indenture, in accordance with the provisions thereof and
subject to alterations, modifications and changes in said hereditament,
premises, estates and property as permitted under the provisions thereof),
the Company, for and in consideration of the premises and the sum of One
Dollar ($1.00) to it in hand paid by the Trustee, the receipt whereof is
hereby acknowledged, and of other valuable considerations, has granted,
bargained, sold, assigned, mortgaged, pledged, transferred, set over,
aliened, enfeoffed, released, conveyed and confirmed, and by these presents
does grant, bargain, sell, assign, mortgage, pledge, transfer, set over,
alien, enfeoff, release, convey and confirm unto said Bankers Trust
Company, as Trustee, and its successor or successors in the trusts created
by the Mortgage and this Supplemental Indenture, and its and their assigns,
all of said hereditament, premises, estates and property (except and
subject as aforesaid), as fully as though described at length herein,
including, without limitation of the foregoing, the property, rights and
privileges of the Company described or referred to in Schedule B hereto.
Together with all plants, buildings, structures, improvements and
machinery located upon said real estate or any portion thereof, and all
rights, privileges and easements of every kind and nature appurtenant
thereto, and all and singular the tenements, hereditament and appurtenances
belonging to the real estate or any part thereof described or referred to
in Schedule B or intended so to be, or in any wise appertaining thereto,
and the reversions, remainders, rents, issues and profits thereof, and also
all the estate, right, title, interest, property, possession, claim and
demand whatsoever, as well in law as in equity, of the Company, of, in and
to the same and any and every part thereof, with the appurtenances; except
and subject as aforesaid.
TO HAVE AND TO HOLD all and singular the property, rights and
privileges hereby granted or mentioned or intended so to be, together with
all and singular the reversions, remainders, rents, revenues, income,
issues and profits, privileges and appurtenances, now or hereafter
belonging or in any way appertaining thereto, unto the Trustee and its
successor or successors in the trust created by the Mortgage and this
Supplemental Indenture, and its and their assigns, forever, and with like
effect as if the above described property, rights and privileges had been
specifically described at length in the Mortgage and this Supplemental
Indenture.
Subject, however, to permitted liens, as defined in the Mortgage
Indenture.
IN TRUST, NEVERTHELESS, upon the terms and trusts of the Mortgage and
this Supplemental Indenture for those who shall hold the bonds and coupons
issued and to be issued thereunder, or any of them, without preference,
priority or distinction as to lien of any of said bonds and coupons over
any others thereof by reason of priority in the time of the issue or
negotiation thereof, or otherwise howsoever, subject, however, to the
provisions in reference to extended, transferred or pledged coupons and
claims for interest set forth in the Mortgage and this Supplemental
Indenture (and subject to any sinking fund that may heretofore have been or
hereafter be created for the benefit of any particular series).
And it is hereby covenanted that all such bonds of Series A are to be
issued, authenticated and delivered, and that the mortgaged premises are to
be held by the Trustee, upon and subject to the trusts, covenants,
provisions and conditions and for the uses and purposes set forth in the
Mortgage and this Supplemental Indenture and upon and subject to the
further covenants, provisions and conditions and for the uses and purposes
hereinafter set forth, as follows, to wit:
ARTICLE 1.
FORM AND PROVISIONS OF BONDS OF SERIES A
SECTION 1.01. Designation; Amount. The bonds of Series A shall be
designated "First and Refunding Mortgage 5-1/2% Bonds, 1994 Series A" and,
subject to Section 2.08 of the Mortgage Indenture, shall not exceed one
hundred and forty million dollars ($140,000,000) in aggregate principal
amount at any one time outstanding. The initial issue of the bonds of
Series A may be effected upon compliance with the applicable provisions of
the Mortgage Indenture.
SECTION 1.02. Form of Bonds of Series A. The bonds of Series A shall
be issued only in fully registered form without coupons in denominations of
one thousand dollars ($1,000) and multiples thereof.
The bonds of Series A and the certificate of the Trustee upon said
bonds shall be substantially in the forms thereof respectively set forth in
Schedule A appended hereto.
SECTION 1.03. Provisions of Bonds of Series A; Interest Accrual. The
bonds of Series A shall mature on February 1, 1999 and shall bear interest,
payable semiannually on the first days of February and August of each year,
commencing August 1, 1994, at the rate specified in their title, until the
Company's obligation in respect of the principal thereof shall be
discharged; and shall be payable both as to principal and interest at the
office or agency of the Company in the Borough of Manhattan, New York, New
York, in any coin or currency of the United States of America which at the
time of payment is legal tender for the payment of public and private
debts. The interest on the bonds of Series A, whether in temporary or
definitive form, shall be payable without presentation of such bonds; and
only to or upon the written order of the registered holders thereof of
record at the applicable record date. The bonds of Series A shall be
callable for redemption in whole or in part according to the terms and
provisions provided herein in Article 2.
Each bond of Series A shall be dated as of February 1, 1994 and shall
bear interest on the principal amount thereof from the interest payment
date next preceding the date of authentication thereof by the Trustee to
which interest has been paid on the bonds of Series A, or if the date of
authentication thereof is prior to July 16, 1994, then from the date of
original issuance, or if the date of authentication thereof be an interest
payment date to which interest is being paid or a date between the record
date for any such interest payment date and such interest payment date,
then from such interest payment date.
The person in whose name any bond of Series A is registered at the
close of business on any record date (as hereinafter defined) with respect
to any interest payment date shall be entitled to receive the interest
payable on such interest payment date notwithstanding the cancellation of
such bond upon any registration of transfer or exchange thereof subsequent
to the record date and prior to such interest payment date, except that if
and to the extent the Company shall default in the payment of the interest
due on such interest payment date, then such defaulted interest shall be
paid to the person in whose name such bond is registered on a subsequent
record date for the payment of defaulted interest if one shall have been
established as hereinafter provided and otherwise on the date of payment of
such defaulted interest. A subsequent record date may be established by
the Company by notice mailed to the owners of bonds of Series A not less
than ten days preceding such record date, which record date shall not be
more than thirty days prior to the subsequent interest payment date. The
term "record date" as used in this Section with respect to any regular
interest payment (i.e., February 1 or August 1) shall mean the January 15
or July 15, as the case may be, next preceding such interest payment date,
or if such January 15 or July 15 shall be a legal holiday or a day on which
banking institutions in the Borough of Manhattan, New York, New York are
authorized by law to close, the next preceding day which shall not be a
legal holiday or a day on which such institutions are so authorized to
close.
SECTION 1.04. Transfer and Exchange of Bonds of Series A. The bonds
of Series A may be surrendered for registration of transfer as provided in
Section 2.06 of the Mortgage Indenture at the office or agency of the
Company in the Borough of Manhattan, New York, New York, and may be
surrendered at said office for exchange for a like aggregate principal
amount of bonds of Series A of other authorized denominations.
Notwithstanding the provisions of Section 2.06 of the Mortgage Indenture,
no charge, except for taxes or other governmental charges, shall be made by
the Company for any registration of transfer of bonds of Series A or for
the exchange of any bonds of Series A for such bonds of other authorized
denominations.
SECTION 1.05. Sinking and Improvement Fund. Each holder of a bond of
Series A, solely by virtue of its acquisition thereof, shall have and be
deemed to have consented, without the need for any further action or
consent by such holder, to any and all amendments to the Mortgage Indenture
which are intended to eliminate or modify in any manner the requirements of
the sinking and improvement fund as provided for in Section 6.14 thereof.
ARTICLE 2.
REDEMPTION OF BONDS OF SERIES A.
The bonds of Series A shall not be redeembable as a whole or in part
at any time.
ARTICLE 3.
MISCELLANEOUS.
SECTION 3.01. Benefits of Supplemental Indenture and Bonds of Series
A. Nothing in this Supplemental Indenture, or in the bonds of Series A,
expressed or implied, is intended to or shall be construed to give to any
person or corporation other than the Company, the Trustee and the holders
of the bonds and interest obligations secured by the Mortgage and this
Supplemental Indenture, any legal or equitable right, remedy or claim under
or in respect of this Supplemental Indenture or of any covenant, condition
or provision herein contained. All the covenants, conditions and
provisions hereof are and shall be held to be for the sole and exclusive
benefit of the Company, the Trustee and the holders of the bonds and
interest obligations secured by the Mortgage and this Supplemental
Indenture.
SECTION 3.02. Effect of Table of Contents and Headings. The table of
contents and the descriptive headings of the several Articles and Sections
of this Supplemental Indenture are inserted for convenience of reference
only and are not to be taken to be any part of this Supplemental Indenture
or to control or affect the meaning, construction or effect of the same.
SECTION 3.03. Counterparts. For the purpose of facilitating the
recording hereof, this Supplemental Indenture may be executed in any number
of counterparts, each of which shall be and shall be taken to be an
original and all collectively but one instrument.
IN WITNESS WHEREOF, The Connecticut Light and Power Company has caused
these presents to be executed by a Vice President and its corporate seal to
be hereunto affixed, duly attested by its Secretary or an Assistant
Secretary, and Bankers Trust Company has caused these presents to be
executed by a Vice President or Assistant Vice President and its corporate
seal to be hereunto affixed, duly attested by one of its Assistant
Treasurers, as of the day and year first above written.
THE CONNECTICUT LIGHT AND POWER
COMPANY
Attest:
/s/ Mark A. Joyse By /s/ John B. Keane
Mark A. Joyse John B. Keane
Assistant Secretary Vice President
(SEAL) Signed, sealed and delivered
in the presence of:
/s/ Tracy DeCredico
/s/ Shelley O. Peters
BANKERS TRUST COMPANY
Attest:
/s/M. Lisa Morrone By /s/ Robert Corporale
M. Lisa Morrone Robert Caporale
Assistant Treasurer Vice President
(SEAL) Signed, sealed and delivered
in the presence of:
/s/Denise Mitchell
Denise Mitchell
/s/Michael Weber
Michael Weber
STATE OF CONNECTICUT )
) SS.: BERLIN
COUNTY OF HARTFORD )
On this 4th day of February 1994, before me, Maureen J. Rothwell, the
undersigned officer, personally appeared John B. Keane and Mark A. Joyse,
who acknowledged themselves to be Vice President and Assistant Secretary,
respectively, of THE CONNECTICUT LIGHT AND POWER COMPANY, a corporation,
and that they, as such Vice President and such Assistant Secretary, being
authorized so to do, executed the foregoing instrument for the purpose
therein contained, by signing the name of the corporation by themselves as
Vice President and Assistant Secretary, and as their free act and deed.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Maureen J. Rothwell
Maureen J. Rothwell
Notary Public
My commission expires May 31, 1996
(SEAL)
STATE OF NEW YORK )
) SS.: NEW YORK
COUNTY OF NEW YORK )
On this 3rd day of February, 1994, before me, John Florio, the
undersigned officer, personally appeared Robert Caporale and M. Lisa
Morrone, who acknowledged themselves to be Vice President and Assistant
Treasurer, respectively, of BANKERS TRUST COMPANY, a corporation, and that
they, as such Vice President and such Assistant Treasurer, being authorized
so to do, executed the foregoing instrument for the purposes therein
contained, by signing the name of the corporation by themselves as Vice
President and Assistant Treasurer, and as their free act and deed.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ John Florio
John Florio
Notary Public, State of New York
No. 01FL5021631
Qualified in New York County
My Commission Expires December 20, 1995
(SEAL)
SCHEDULE A
[FORM OF BONDS OF SERIES A]
No. $
THE CONNECTICUT LIGHT AND POWER COMPANY
Incorporated under the Laws of the State of Connecticut
FIRST AND REFUNDING MORTGAGE 5-1/2% BOND, 1994 SERIES A
PRINCIPAL DUE FEBRUARY 1, 1999
FOR VALUE RECEIVED, THE CONNECTICUT LIGHT AND POWER COMPANY, a
corporation organized and existing under the laws of the State of
Connecticut (hereinafter called the Company), hereby promises to pay to
, or registered assigns, the principal sum of
dollars, on the first day of February, 1999 and to
pay interest on said sum, semiannually on the first days of February and
August in each year, commencing August 1, 1994, until the Company's
obligation with respect to said principal sum shall be discharged, at the
rate per annum specified in the title of this bond from the interest
payment date next preceding the date of authentication hereof to which
interest has been paid on the bonds of this series, or if the date of
authentication hereof is prior to July 16, 1994, then from the date of
original issuance, or if the date of authentication hereof is an interest
payment date to which interest is being paid or a date between the record
date for any such interest payment date and such interest payment date,
then from such interest payment date. Both principal and interest shall be
payable at the office or agency of the Company in the Borough of Manhattan,
New York, New York, in such coin or currency of the United States of
America as at the time of payment is legal tender for the payment of public
and private debts.
Each installment of interest hereon (other than overdue interest)
shall be payable to the person who shall be the registered owner of this
bond at the close of business on the record date, which shall be the
January 15 or July 15, as the case may be, next preceding the interest
payment date, or, if such January 15 or July 15 shall be a legal holiday or
a day on which banking institutions in the Borough of Manhattan, New York,
New York, are authorized by law to close, the next preceding day which
shall not be a legal holiday or a day on which such institutions are so
authorized to close.
Reference is hereby made to the further provisions of this bond set
forth on the reverse hereof, including without limitation provisions in
regard to the call and redemption and the registration of transfer and
exchangeability of this bond, and such further provisions shall for all
purposes have the same effect as though fully set forth in this place.
This bond shall not become or be valid or obligatory until the
certificate of authentication hereon shall have been signed by Bankers
Trust Company (hereinafter with its successors as defined in the Mortgage
hereinafter referred to, generally called the Trustee), or by such a
successor.
IN WITNESS WHEREOF, The Connecticut Light and Power Company has caused
this bond to be executed in its corporate name and on its behalf by its
President by his signature or a facsimile thereof, and its corporate seal
to be affixed or imprinted hereon and attested by the manual or facsimile
signature of its Secretary.
Dated as of February 1, 1994.
THE CONNECTICUT LIGHT AND POWER COMPANY
By
President
Attest:
Secretary
[FORM OF TRUSTEE'S CERTIFICATE]
Bankers Trust Company hereby certifies that this bond is one of the
bonds described in the within mentioned Mortgage.
BANKERS TRUST COMPANY, TRUSTEE
By
Authorized Officer
Dated:
[FORM OF BOND]
[REVERSE]
THE CONNECTICUT LIGHT AND POWER COMPANY
FIRST AND REFUNDING MORTGAGE 5-1/2% BOND, 1994 SERIES A
This bond is one of an issue of bonds of the Company, of an unlimited
authorized amount of coupon bonds or registered bonds without coupons, or
both, known as its First and Refunding Mortgage Bonds, all issued or to be
issued in one or more series, and is one of a series of said bonds limited
in principal amount to one hundred and forty million dollars
($140,000,000), consisting only of registered bonds without coupons and
designated "First and Refunding Mortgage 5 1/2% Bonds, 1994 Series A," all
of which bonds are issued or are to be issued under, and equally and
ratably secured by, a certain Indenture of Mortgage and Deed and Trust
dated as of May 1, 1921, and by sixty Supplemental Indentures dated
respectively as of May 1, 1921, February 1, 1924, July 1, 1926, June 20,
1928, June 1, 1932, July 1, 1932, July 1, 1935, September 1, 1936,
October 20, 1936, December 1, 1936, December 1, 1938, August 31, 1944,
September 1, 1944, May 1, 1945, October 1, 1945, November 1, 1949,
December 1, 1952, December 1, 1955, January 1, 1958, February 1, 1960,
April 1, 1961, September 1, 1963, April 1, 1967, May 1, 1967, January 1,
1968, October 1, 1968, December 1, 1969, January 1, 1970, October 1, 1970,
December 1, 1971, August 1, 1972, April 1, 1973, March 1, 1974, February 1,
1975, September 1, 1975, May 1, 1977, March 1, 1978, September 1, 1980,
October 1, 1981, June 30, 1982, October 1, 1982, July 1, 1983, January 1,
1984, October 1, 1985, September 1, 1986, April 1, 1987, October 1, 1987,
November 1, 1987, April 1, 1988, November 1, 1988, June 1, 1989,
September 1, 1989, December 1, 1989, April 1, 1992, July 1, 1992, October
1, 1992, July 1, 1993, July 1, 1993, December 1, 1993 and February 1, 1994
(said Indenture of Mortgage and Deed of Trust and Supplemental Indentures
being collectively referred to herein as the "Mortgage"), all executed by
the Company to Bankers Trust Company, as Trustee, all as provided in the
Mortgage to which reference is made for a statement of the property
mortgaged and pledged, the nature and extent of the security, the rights of
the holders of the bonds in respect thereof and the terms and conditions
upon which the bonds may be issued and are secured; but neither the
foregoing reference to the Mortgage nor any provision of this bond or of
the Mortgage shall affect or impair the obligation of the Company, which is
absolute, unconditional and unalterable, to pay at the maturities herein
provided the principal of and interest on this bond as herein provided.
The principal of this bond may be declared or may become due on the
conditions, in the manner and at the time set forth in the Mortgage, upon
the happening of an event of default as in the Mortgage provided.
This bond is transferable by the registered holder hereof in person or
by attorney upon surrender hereof at the office or agency of the Company in
the Borough of Manhattan, New York, New York, together with a written
instrument of transfer in approved form, signed by the holder, and a new
bond or bonds of this series for a like principal amount in authorized
denominations will be issued in exchange, all as provided in the Mortgage.
Prior to due presentment for registration of transfer of this bond the
Company and the Trustee may deem and treat the registered owner hereof as
the absolute owner hereof, whether or not this bond be overdue, for the
purpose of receiving payment and for all other purposes, and neither the
Company nor the Trustee shall be affected by any notice to the contrary.
This bond is exchangeable at the option of the registered holder
hereof upon surrender hereof, at the office or agency of the Company in the
Borough of Manhattan, New York, New York, for an equal principal amount of
bonds of this series of other authorized denominations, in the manner and
on the terms provided in the Mortgage.
Bonds of this series are to be issued initially under a book-entry
only system and, except as hereinafter provided, registered in the name of
The Depository Trust Company, New York, New York ("DTC") or its nominee,
which shall be considered to be the holder of all bonds of this series for
all purposed of the Mortgage, including, without limitation, payment by the
Company of principal of and interest on such bonds of this series and
receipt of notices and exercise of rights of holders of such bonds of this
series. There shall be a single bond of this series which shall be
immobilized in the custody of DTC with the owners of book-entry interests
in bonds of this series ("Book-Entry Interests") having no right to receive
bonds of this series in the form of physical securities or certificates.
Ownership of Book-Entry Interests shall be shown by book-entry on the
system maintained and operated by DTC, its participants (the
"Participants") and certain persons acting through the Participants.
Transfer of ownership of Book-Entry Interests are to be made only by DTC
and the Participants by that book-entry system, the Company and the Trustee
having no responsibility therefor so long as bonds of this series are
registered in the name of DTC or its nominee. DTC is to maintain records
of positions of Participants in bonds of this series, and the Participants
and persons acting through Participants are to maintain records of the
purchasers and owners of Book-Entry Interests. If DTC or its nominees
determines not to continue to act as a depository for the bonds of this
series in connection with a book-entry only system, another depository, if
available, may act instead and the single bond of this series will be
transferred into the name of such other depository or its nominee, in which
case the above provisions will continue to apply but to the new depository.
If the book-entry only system for bonds of this series is discontinued for
any reason upon surrender and cancellation of the single bond of this
series registered in the name of the then depository or its nominee, new
registered bonds of this series will be issued in authorized denominations
to the holder of Book-Entry Interests shown on the book-entry system
immediately prior to the discontinuance thereof. Neither the Trustee nor
the Company shall be responsible for the accuracy of the interests shown on
that system.
The bonds of this series are not subject to redemption as a whole or
in part prior to maturity.
The Mortgage provides that the Company and the Trustee, with consent
of the holders of not less than 66-2/3% in aggregate principal amount of
the bonds at the time outstanding which would be affected by the action
proposed to be taken, may by supplemental indenture add any provisions to
or change or eliminate any of the provisions of the Mortgage or modify the
rights of the holders of the bonds and coupons issued thereunder; provided,
however, that without the consent of the holder hereof no such supplemental
indenture shall affect the terms of payment of the principal of or interest
or premium on this bond, or reduce the aforesaid percentage of the bonds
the holders of which are required to consent to such a supplemental
indenture, or permit the creation by the Company of any mortgage or pledge
or lien in the nature thereof ranking prior to or equal with the lien of
the Mortgage or deprive the holder hereof of the lien of the Mortgage on
any of the property which is subject to the lien thereof.
As set forth in the Supplemental Indenture establishing the terms and
series of the bonds of this series, each holder of this bond, solely by
virtue of its acquisition thereof, shall have and be deemed to have
consented, without the need for any further action or consent such holder,
to any and all amendments to the Mortgage which are intended to eliminate
or modify in any manner the requirements of the sinking and improvement
fund as set forth in Section 6.14 of the Mortgage.
No recourse shall be had for the payment of the principal of or the
interest on this bond, or any part thereof, or for any claim based thereon
or otherwise in respect thereof, to any incorporator, or any past, present
or future stockholder, officer or director of the Company, either directly
or indirectly, by virtue of any statute or by enforcement of any assessment
or otherwise, and any and all liability of the said incorporators,
stockholders, officers or directors of the Company in respect to this bond
is hereby expressly waived and released by every holder hereof.
SCHEDULE B
PROPERTY SUBJECT TO THE LIEN OF THE MORTGAGE
IN CONNECTICUT
TOWN OF ASHFORD
All of the following described rights, privileges and easements
situated in the Town of Ashford, County of Windham and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(1) C & M Developers November 8, 1993 103 32
(2) Crossen Builders, Inc. November 8, 1993 103 29
TOWN OF BRISTOL
All of the following described rights, privileges and easements
situated in the Town of Bristol, County of Hartford and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(3) Hart Street Development September 22, 1993 1103 617
Group, Inc.
TOWN OF BROOKLYN
All of the following described rights, privileges and easements
situated in the Town of Brooklyn, County of Windham and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(4) Edward B. Ross et al. November 10, 1993 145 11
TOWN OF CHAPLIN
All of the following described rights, privileges and easements
situated in the Town of Chaplin, County of Windham and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(5) Paul V. Carlson December 2, 1993 57 256
TOWN OF CHESHIRE
All of the following described rights, privileges and easements
situated in the Town of Cheshire, County of New Haven and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(6) The Ginger Group November 17, 1993 1018 222
(7) Anderson-Wilcox, Inc. May 6, 1993 976 25
(8) James B. Sweeney May 4, 1993 976 27
TOWN OF CLINTON
All of the following described rights, privileges and easements
situated in the Town of Clinton, County of Middlesex and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(9) Moran Builders, Inc. October 13, 1993 226 1034
TOWN OF EAST GRANBY
All of the following described rights, privileges and easements
situated in the Town of East Granby, County of Hartford and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(10) Deer Run Corporation July 30, 1993 101 646
(11) Halmar, Incorporated November 17, 1993 102 39
(12) William H. Wilson November 11, 1993 102 156
TOWN OF EAST HARTFORD
All of the following described rights, privileges and easements
situated in the Town of East Hartford, County of Hartford and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(13) Sally Realty Inc. et al. September 29, 1993 1476 206
TOWN OF FARMINGTON
All of the following described rights, privileges and easements
situated in the Town of Farmington, County of Hartford and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(14) The Town of Farmington November 17, 1993 471 1018
TOWN OF LEBANON
All of the following described rights, privileges and easements
situated in the Town of Lebanon, County of New London and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(15) Robert G. Avery et al. November 1, 1993 155 614
(16) Joyce N. Hoek November 8, 1993 155 616
(17) Alexander P. McDonnell et al. October 30, 1993 155 619
TOWN OF MANCHESTER
All of the following described rights, privileges and easements
situated in the Town of Manchester, County of Hartford and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(18) Rail Line Associates April 13, 1993 1590 83
(19) Manchester Crossroads I September 23, 1993 1643 205
Associates Limited
Partnership et al.
TOWN OF PLAINVILLE
All of the following described rights, privileges and easements
situated in the Town of Plainville, County of Hartford and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(20) R & C Construction, Inc. October 15, 1993 306 715
TOWN OF POMFRET
All of the following described rights, privileges and easements
situated in the Town of Pomfret, County of Windham and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(21) Raynham, Inc. October 21, 1993 110 93
TOWN OF SIMSBURY
All of the following described rights, privileges and easements
situated in the Town of Simsbury, County of Hartford and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(22) Louis A. Sperandio et al. October 12, 1993 419 484
(23) C.G.R. Developers, Inc. October 25, 1993 420 927
TOWN OF SOUTH WINDSOR
All of the following described rights, privileges and easements
situated in the Town of South Windsor, County of Hartford and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(24) Maple Leaf Construction, Inc. November 3, 1993 755 73
TOWN OF THOMPSON
All of the following described rights, privileges and easements
situated in the Town of Thompson, County of Windham and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(25) Lemanda Corporation November 11, 1993 308 123
(26) David G. Mossy December 6, 1993 309 219
TOWN OF WINDSOR
All of the following described rights, privileges and easements
situated in the Town of Windsor, County of Hartford and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(27) Culbro Land Resources, Inc. October 11, 1993 969 335
(28) AP Property & Standard October 18, 1993 969 337
Exchange, Inc.
TOWN OF WOODSTOCK
All of the following described rights, privileges and easements
situated in the Town of Woodstock, County of Windham and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(29) Nelson E. Douglas et al. July 7, 1993 239 366
Exhibit 4.2.16
SUPPLEMENTAL INDENTURE
Dated as of February 1, 1994
TO
Indenture of Mortgage and Deed of Trust
Dated as of May 1, 1921
THE CONNECTICUT LIGHT AND POWER COMPANY
TO
BANKERS TRUST COMPANY, Trustee
1994 Series B Bonds, Due February 1, 2004
THE CONNECTICUT LIGHT AND POWER COMPANY
Supplemental Indenture, Dated as of February 1, 1994
TABLE OF CONTENTS
PAGE
Parties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Granting Clauses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Habendum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Grant in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 1.
FORM AND PROVISIONS OF BONDS OF SERIES B
SECTION 1.01. Designation; Amount. . . . . . . . . . . . . . . . . . . . 3
SECTION 1.02. Form of Bonds of Series B. . . . . . . . . . . . . . . . . 3
SECTION 1.03. Provisions of Bonds of Series B; Interest Accrual. . . . . 3
SECTION 1.04. Transfer and Exchange of Bonds of Series B . . . . . . . . 4
SECTION 1.05. Sinking and Improvement Fund . . . . . . . . . . . . . . . 4
ARTICLE 2.
REDEMPTION OF BONDS OF SERIES B. . . . . . . . . . 4
ARTICLE 3.
MISCELLANEOUS
SECTION 3.01. Benefits of Supplemental Indenture and
Bonds of Series B . . . . . . . . . . . . . . . . . . . . 5
SECTION 3.02. Effect of Table of Contents and Headings . . . . . . . . . 5
SECTION 3.03. Counterparts . . . . . . . . . . . . . . . . . . . . . . . 5
TESTIMONIUM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ACKNOWLEDGMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SCHEDULE A - Form of Bond of Series B, Form of
Trustee's Certificate. . . . . . . . . . . . . . . . . . . . . . . . . 7
SCHEDULE B - Property Subject to the Lien of the Mortgage. . . . . . . .12
SUPPLEMENTAL INDENTURE, dated as of the first day of February, 1994,
between THE CONNECTICUT LIGHT AND POWER COMPANY, a corporation organized
and existing under the laws of the State of Connecticut (hereinafter called
"Company") and BANKERS TRUST COMPANY, a corporation organized and existing
under the laws of the State of New York (hereinafter called "Trustee").
WHEREAS, the Company heretofore duly executed, acknowledged and
delivered to the Trustee a certain Indenture of Mortgage and Deed of Trust
dated as of May 1, 1921, and sixty Supplemental Indentures thereto dated
respectively as of May 1, 1921, February 1, 1924, July 1, 1926, October 20,
1936, December 1, 1936, December 1, 1938, August 31, 1944, September 1,
1944, May 1, 1945, October 1, 1945, November 1, 1949, December 1, 1952,
December 1, 1955, January 1, 1958, February 1, 1960, April 1, 1961,
September 1, 1963, April 1, 1967, May 1, 1967, January 1, 1968, October 1,
1968, December 1, 1969, January 1, 1970, October 1, 1970, December 1, 1971,
August 1, 1972, April 1, 1973, March 1, 1974, February 1, 1975, September
1, 1975, May 1, 1977, March 1, 1978, September 1, 1980, October 1, 1981,
June 30, 1982, July 1, 1983, January 1, 1984, October 1, 1985, September 1,
1986, April 1, 1987, October 1, 1987, November 1, 1987, April 1, 1988,
November 1, 1988, June 1, 1989, September 1, 1989, December 1, 1989, April
1, 1992, July 1, 1992, October 1, 1992, July 1, 1993, July 1, 1993,
December 1, 1993 and February 1, 1994 (said Indenture of Mortgage and Deed
of Trust (i) as heretofore amended, being hereinafter generally called the
"Mortgage Indenture," and (ii) together with said Supplemental Indentures
thereto, being hereinafter generally called the "Mortgage"), all of which
have been duly recorded as required by law, for the purpose of securing its
First and Refunding Mortgage Bonds (of which $1,235,000,000 aggregate
principal amount are outstanding at the date of this Supplemental
Indenture) to an unlimited amount, issued and to be issued for the purposes
and in the manner therein provided, of which Mortgage this Supplemental
Indenture is intended to be made a part, as fully as if therein recited at
length;
WHEREAS, the Company by appropriate and sufficient corporate action in
conformity with the provisions of the Mortgage has duly determined to
create a further series of bonds under the Mortgage to be designated "First
and Refunding Mortgage 6-1/8% Bonds, 1994 Series B" (hereinafter generally
referred to as the "bonds of Series B"), to consist of fully registered
bonds containing terms and provisions duly fixed and determined by the
Board of Directors of the Company and expressed in this Supplemental
Indenture, such fully registered bonds and the Trustee's certificate of its
authentication thereof to be substantially in the forms thereof
respectively set forth in Schedule A appended hereto and made a part
hereof; and
WHEREAS, the execution and delivery of this Supplemental Indenture and
the issue of not exceeding one hundred and forty million dollars
($140,000,000) in aggregate principal amount of bonds of Series B and other
necessary actions have been duly authorized by the Board of Directors of
the Company; and WHEREAS, the Company proposes to execute and deliver this
Supplemental Indenture to provide for the issue of the bonds of Series B
and to confirm the lien of the Mortgage on the property referred to below,
all as permitted by Section 14.01 of the Mortgage Indenture; and
WHEREAS, all acts and things necessary to constitute this Supplemental
Indenture a valid, binding and legal instrument and to make the bonds of
Series B, when executed by the Company and authenticated by the Trustee
valid, binding and legal obligations of the Company have been authorized
and performed;
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE OF MORTGAGE AND DEED OF
TRUST WITNESSETH:
That in order to secure the payment of the principal of and interest on
all bonds issued and to be issued under the Mortgage, according to their
tenor and effect, and according to the terms of the Mortgage and this
Supplemental Indenture, and to secure the performance of the covenants and
obligations in said bonds and in the Mortgage and this Supplemental
Indenture respectively contained, and for the better assuring and
confirming unto the Trustee, its successor or successors and its or their
assigns, upon the trusts and for the purposes expressed in the Mortgage and
this Supplemental Indenture, all and singular the hereditament, premises,
estates and property of the Company thereby conveyed or assigned or
intended so to be, or which the Company may thereafter have become bound to
convey or assign to the Trustee, as security for said bonds (except such
hereditament, premises, estates and property as shall have been disposed of
or released or withdrawn from the lien of the Mortgage and this
Supplemental Indenture, in accordance with the provisions thereof and
subject to alterations, modifications and changes in said hereditament,
premises, estates and property as permitted under the provisions thereof),
the Company, for and in consideration of the premises and the sum of One
Dollar ($1.00) to it in hand paid by the Trustee, the receipt whereof is
hereby acknowledged, and of other valuable considerations, has granted,
bargained, sold, assigned, mortgaged, pledged, transferred, set over,
aliened, enfeoffed, released, conveyed and confirmed, and by these presents
does grant, bargain, sell, assign, mortgage, pledge, transfer, set over,
alien, enfeoff, release, convey and confirm unto said Bankers Trust
Company, as Trustee, and its successor or successors in the trusts created
by the Mortgage and this Supplemental Indenture, and its and their assigns,
all of said hereditament, premises, estates and property (except and
subject as aforesaid), as fully as though described at length
herein,including, without limitation of the foregoing, the property, rights
and privileges of the Company described or referred to in Schedule B
hereto.
Together with all plants, buildings, structures, improvements and
machinery located upon said real estate or any portion thereof, and all
rights, privileges and easements of every kind and nature appurtenant
thereto, and all and singular the tenements, hereditament and appurtenances
belonging to the real estate or any part thereof described or referred to
in Schedule B or intended so to be, or in any wise appertaining thereto,
and the reversions, remainders, rents, issues and profits thereof, and also
all the estate, right, title, interest, property, possession, claim and
demand whatsoever, as well in law as in equity, of the Company, of, in and
to the same and any and every part thereof, with the appurtenances; except
and subject as aforesaid.
TO HAVE AND TO HOLD all and singular the property, rights and
privileges hereby granted or mentioned or intended so to be, together with
all and singular the reversions, remainders, rents, revenues, income,
issues and profits, privileges and appurtenances, now or hereafter
belonging or in any way appertaining thereto, unto the Trustee and its
successor or successors in the trust created by the Mortgage and this
Supplemental Indenture, and its and their assigns, forever, and with like
effect as if the above described property, rights and privileges had been
specifically described at length in the Mortgage and this Supplemental
Indenture.
Subject, however, to permitted liens, as defined in the Mortgage
Indenture.
IN TRUST, NEVERTHELESS, upon the terms and trusts of the Mortgage and
this Supplemental Indenture for those who shall hold the bonds and coupons
issued and to be issued thereunder, or any of them, without preference,
priority or distinction as to lien of any of said bonds and coupons over
any others thereof by reason of priority in the time of the issue or
negotiation thereof, or otherwise howsoever, subject, however, to the
provisions in reference to extended, transferred or pledged coupons and
claims for interest set forth in the Mortgage and this Supplemental
Indenture (and subject to any sinking fund that may heretofore have been or
hereafter be created for the benefit of any particular series).
And it is hereby covenanted that all such bonds of Series B are to be
issued, authenticated and delivered, and that the mortgaged premises are to
be held by the Trustee, upon and subject to the trusts, covenants,
provisions and conditions and for the uses and purposes set forth in the
Mortgage and this Supplemental Indenture and upon and subject to the
further covenants, provisions and conditions and for the uses and purposes
hereinafter set forth, as follows, to wit:
ARTICLE 1.
FORM AND PROVISIONS OF BONDS OF SERIES B
SECTION 1.01. Designation; Amount. The bonds of Series B shall be
designated "First and Refunding Mortgage 6-1/8% Bonds, 1994 Series B" and,
subject to Section 2.08 of the Mortgage Indenture, shall not exceed one
hundred and forty million dollars ($140,000,000) in aggregate principal
amount at any one time outstanding. The initial issue of the bonds of
Series B may be effected upon compliance with the applicable provisions of
the Mortgage Indenture.
SECTION 1.02. Form of Bonds of Series B. The bonds of Series B shall
be issued only in fully registered form without coupons in denominations of
one thousand dollars ($1,000) and multiples thereof.
The bonds of Series B and the certificate of the Trustee upon said
bonds shall be substantially in the forms thereof respectively set forth in
Schedule A appended hereto.
SECTION 1.03. Provisions of Bonds of Series B; Interest Accrual. The
bonds of Series B shall mature on February 1, 2004 and shall bear interest,
payable semiannually on the first days of February and August of each year,
commencing August 1, 1994, at the rate specified in their title, until the
Company's obligation in respect of the principal thereof shall be
discharged; and shall be payable both as to principal and interest at the
office or agency of the Company in the Borough of Manhattan, New York, New
York, in any coin or currency of the United States of America which at the
time of payment is legal tender for the payment of public and private
debts. The interest on the bonds of Series B, whether in temporary or
definitive form, shall be payable without presentation of such bonds; and
only to or upon the written order of the registered holders thereof of
record at the applicable record date. The bonds of Series B shall be
callable for redemption in whole or in part according to the terms and
provisions provided herein in Article 2.
Each bond of Series B shall be dated as of February 1, 1994 and shall
bear interest on the principal amount thereof from the interest payment
date next preceding the date of authentication thereof by the Trustee to
which interest has been paid on the bonds of Series B, or if the date of
authentication thereof is prior to July 16, 1994, then from the date of
original issuance, or if the date of authentication thereof be an interest
payment date to which interest is being paid or a date between the record
date for any such interest payment date and such interest payment date,
then from such interest payment date.
The person in whose name any bond of Series B is registered at the
close of business on any record date (as hereinafter defined) with respect
to any interest payment date shall be entitled to receive the interest
payable on such interest payment date notwithstanding the cancellation of
such bond upon any registration of transfer or exchange thereof subsequent
to the record date and prior to such interest payment date, except that if
and to the extent the Company shall default in the payment of the interest
due on such interest payment date, then such defaulted interest shall be
paid to the person in whose name such bond is registered on a subsequent
record date for the payment of defaulted interest if one shall have been
established as hereinafter provided and otherwise on the date of payment of
such defaulted interest. A subsequent record date may be established by
the Company by notice mailed to the owners of bonds of Series B not less
than ten days preceding such record date, which record date shall not be
more than thirty days prior to the subsequent interest payment date. The
term "record date" as used in this Section with respect to any regular
interest payment (i.e., February 1 or August 1) shall mean the January 15
or July 15, as the case may be, next preceding such interest payment date,
or if such January 15 or July 15 shall be a legal holiday or a day on which
banking institutions in the Borough of Manhattan, New York, New York are
authorized by law to close, the next preceding day which shall not be a
legal holiday or a day on which such institutions are so authorized to
close.
SECTION 1.04. Transfer and Exchange of Bonds of Series B. The bonds
of Series B may be surrendered for registration of transfer as provided in
Section 2.06 of the Mortgage Indenture at the office or agency of the
Company in the Borough of Manhattan, New York, New York, and may be
surrendered at said office for exchange for a like aggregate principal
amount of bonds of Series B of other authorized denominations.
Notwithstanding the provisions of Section 2.06 of the Mortgage Indenture,
no charge, except for taxes or other governmental charges, shall be made by
the Company for any registration of transfer of bonds of Series B or for
the exchange of any bonds of Series B for such bonds of other authorized
denominations.
SECTION 1.05. Sinking and Improvement Fund. Each holder of a bond of
Series B, solely by virtue of its acquisition thereof, shall have and be
deemed to have consented, without the need for any further action or
consent by such holder, to any and all amendments to the Mortgage Indenture
which are intended to eliminate or modify in any manner the requirements of
the sinking and improvement fund as provided for in Section 6.14 thereof.
ARTICLE 2.
REDEMPTION OF BONDS OF SERIES B.
The bonds of Series B are not subject to redemption at the option of
the Company prior to February 1, 1999. Thereafter, the bonds of Series B
shall be redeemable as a whole at any time or in part from time to time in
accordance with the provisions of the Mortgage and upon not less than
thirty (30) days' prior notice given by mail as provided in the Mortgage
(which notice may state that it is subject to the receipt of the redemption
moneys by the Trustee on or before the date fixed for redemption and which
notice shall be of no effect unless such moneys are so received on or
before such date), either at the option of the Company, or for the purpose
of any applicable provision of the Mortgage, at the following prices:
(a) if redeemed with trust moneys deposited with or received by
the Trustee pursuant to Section 3.55 or Section 6.06 or Section 6.09 or
Section 6.14 or Article 8.5 of the Mortgage Indenture, then at the
applicable special redemption price, stated as a percentage of the
principal amount, specified under the column headed Special Redemption
Price in the form of bond of Series B set forth in Schedule A appended
hereto, together in every case with accrued and unpaid interest thereon to
the date fixed for redemption; and
(b) otherwise, at the applicable general redemption price, stated
as a percentage of the principal amount, specified under the column headed
General Redemption Price in the form of bond of Series B set forth in
Schedule A appended hereto, together in every case with accrued and unpaid
interest thereon to the date fixed for redemption.
ARTICLE 3.
MISCELLANEOUS.
SECTION 3.01. Benefits of Supplemental Indenture and Bonds of Series
B. Nothing in this Supplemental Indenture, or in the bonds of Series B,
expressed or implied, is intended to or shall be construed to give to any
person or corporation other than the Company, the Trustee and the holders
of the bonds and interest obligations secured by the Mortgage and this
Supplemental Indenture, any legal or equitable right, remedy or claim under
or in respect of this Supplemental Indenture or of any covenant, condition
or provision herein contained. All the covenants, conditions and
provisions hereof are and shall be held to be for the sole and exclusive
benefit of the Company, the Trustee and the holders of the bonds and
interest obligations secured by the Mortgage and this Supplemental
Indenture.
SECTION 3.02. Effect of Table of Contents and Headings. The table of
contents and the descriptive headings of the several Articles and Sections
of this Supplemental Indenture are inserted for convenience of reference
only and are not to be taken to be any part of this Supplemental Indenture
or to control or affect the meaning, construction or effect of the same.
SECTION 3.03. Counterparts. For the purpose of facilitating the
recording hereof, this Supplemental Indenture may be executed in any number
of counterparts, each of which shall be and shall be taken to be an
original and all collectively but one instrument.
IN WITNESS WHEREOF, The Connecticut Light and Power Company has caused
these presents to be executed by a Vice President and its corporate seal to
be hereunto affixed, duly attested by its Secretary or an Assistant
Secretary, and Bankers Trust Company has caused these presents to be
executed by a Vice President or Assistant Vice President and its corporate
seal to be hereunto affixed, duly attested by one of its Assistant
Treasurers, as of the day and year first above written.
THE CONNECTICUT LIGHT AND POWER
COMPANY
Attest:
/s/ Mark A. Joyse By /s/ John B. Keane
Mark A. Joyse John B. Keane
Assistant Secretary Vice President
(SEAL) Signed, sealed and delivered
in the presence of:
/s/ Tracy A. DeCredico
/s/ Shelly O. Peters
BANKERS TRUST COMPANY
Attest:
/s/ Lisa Morrone By /s/ Robert Caporale
M. Lisa Morrone Robert Caporale
Assistant Treasurer Vice President
(SEAL) Signed, sealed and delivered
in the presence of:
/s/ Dennis Mitchell
Denise Mitchell
/s/ Michael Weber
Michael Weber
STATE OF CONNECTICUT )
) SS.: BERLIN
COUNTY OF HARTFORD )
On this 4th day of February 1994, before me, Maureen J. Rothwell, the
undersigned officer, personally appeared John B. Keane and Mark A. Joyse,
who acknowledged themselves to be Vice President and Assistant Secretary,
respectively, of THE CONNECTICUT LIGHT AND POWER COMPANY, a corporation,
and that they, as such Vice President and such Assistant Secretary, being
authorized so to do, executed the foregoing instrument for the purpose
therein contained, by signing the name of the corporation by themselves as
Vice President and Assistant Secretary, and as their free act and deed.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Maureen Rothwell
Maureen J. Rothwell
Notary Public
My commission expires May 31, 1996
(SEAL)
STATE OF NEW YORK )
) SS.: NEW YORK
COUNTY OF NEW YORK )
On this 3rd day of February, 1994, before me, John Florio, the
undersigned officer, personally appeared Robert Caporale and M. Lisa
Morrone, who acknowledged themselves to be Vice President and Assistant
Treasurer, respectively, of BANKERS TRUST COMPANY, a corporation, and that
they, as such Vice President and such Assistant Treasurer, being authorized
so to do, executed the foregoing instrument for the purposes therein
contained, by signing the name of the corporation by themselves as Vice
President and Assistant Treasurer, and as their free act and deed.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ John Florio
John Florio
Notary Public, State of New York
No. 01FL5021631
Qualified in New York County
My Commission Expires December 20, 1995
(SEAL)
SCHEDULE A
[FORM OF BONDS OF SERIES B]
No. $
THE CONNECTICUT LIGHT AND POWER COMPANY
Incorporated under the Laws of the State of Connecticut
FIRST AND REFUNDING MORTGAGE 6-1/8% BOND, 1994 SERIES B
PRINCIPAL DUE FEBRUARY 1, 2004
FOR VALUE RECEIVED, THE CONNECTICUT LIGHT AND POWER COMPANY, a
corporation organized and existing under the laws of the State of Connecticut
(hereinafter called the Company), hereby promises to pay to
, or registered assigns, the principal sum of
dollars, on the first day of February, 2004 and to pay interest
on said sum, semiannually on the first days of February and August in each
year, commencing August 1, 1994, until the Company's
obligation with respect to said principal sum shall be discharged, at the
rate per annum specified in the title of this bond from the interest
payment date next preceding the date of authentication hereof to which
interest has been paid on the bonds of this series, or if the date of
authentication hereof is prior to July 16, 1994, then from the date of
original issuance, or if the date of authentication hereof is an interest
payment date to which interest is being paid or a date between the record
date for any such interest payment date and such interest payment date,
then from such interest payment date. Both principal and interest shall be
payable at the office or agency of the Company in the Borough of Manhattan,
New York, New York, in such coin or currency of the United States of
America as at the time of payment is legal tender for the payment of public
and private debts.
Each installment of interest hereon (other than overdue interest) shall
be payable to the person who shall be the registered owner of this bond at
the close of business on the record date, which shall be the January 15 or
July 15, as the case may be, next preceding the interest payment date, or,
if such January 15 or July 15 shall be a legal holiday or a day on which
banking institutions in the Borough of Manhattan, New York, New York, are
authorized by law to close, the next preceding day which shall not be a
legal holiday or a day on which such institutions are so authorized to
close.
Reference is hereby made to the further provisions of this bond set
forth on the reverse hereof, including without limitation provisions in
regard to the call and redemption and the registration of transfer and
exchangeability of this bond, and such further provisions shall for all
purposes have the same effect as though fully set forth in this place.
This bond shall not become or be valid or obligatory until the
certificate of authentication hereon shall have been signed by Bankers
Trust Company (hereinafter with its successors as defined in the Mortgage
hereinafter referred to, generally called the Trustee), or by such a
successor.
IN WITNESS WHEREOF, The Connecticut Light and Power Company has caused
this bond to be executed in its corporate name and on its behalf by its
President by his signature or a facsimile thereof, and its corporate seal
to be affixed or imprinted hereon and attested by the manual or facsimile
signature of its Secretary.
Dated as of February 1, 1994.
THE CONNECTICUT LIGHT AND POWER COMPANY
By
President
Attest:
Secretary
[FORM OF TRUSTEE'S CERTIFICATE]
Bankers Trust Company hereby certifies that this bond is one of the
bonds described in the within mentioned Mortgage.
BANKERS TRUST COMPANY, TRUSTEE
By Authorized Officer
Dated:
[FORM OF BOND]
[REVERSE]
THE CONNECTICUT LIGHT AND POWER COMPANY
FIRST AND REFUNDING MORTGAGE 6-1/8% BOND, 1994 SERIES B
This bond is one of an issue of bonds of the Company, of an unlimited
authorized amount of coupon bonds or registered bonds without coupons, or
both, known as its First and Refunding Mortgage Bonds, all issued or to be
issued in one or more series, and is one of a series of said bonds limited
in principal amount to one hundred and forty million dollars
($140,000,000), consisting only of registered bonds without coupons and
designated "First and Refunding Mortgage 6-1/8% Bonds, 1994 Series B," all
of which bonds are issued or are to be issued under, and equally and
ratably secured by, a certain Indenture of Mortgage and Deed and Trust
dated as of May 1, 1921, and by sixty-one Supplemental Indentures dated
respectively as of May 1, 1921, February 1, 1924, July 1, 1926, June 20,
1928, June 1, 1932, July 1, 1932, July 1, 1935, September 1, 1936, October
20, 1936, December 1, 1936, December 1, 1938, August 31, 1944, September 1,
1944, May 1, 1945, October 1, 1945, November 1, 1949, December 1, 1952,
December 1, 1955, January 1, 1958, February 1, 1960, April 1, 1961,
September 1, 1963, April 1, 1967, May 1, 1967, January 1, 1968, October 1,
1968, December 1, 1969, January 1, 1970, October 1, 1970, December 1, 1971,
August 1, 1972, April 1, 1973, March 1, 1974, February 1, 1975, September
1, 1975, May 1, 1977, March 1, 1978, September 1, 1980, October 1, 1981,
June 30, 1982, October 1, 1982, July 1, 1983, January 1, 1984, October 1,
1985, September 1, 1986, April 1, 1987, October 1, 1987, November 1, 1987,
April 1, 1988, November 1, 1988, June 1, 1989, September 1, 1989, December
1, 1989, April 1, 1992, July 1, 1992, October 1, 1992, July 1, 1993, July
1, 1993, December 1, 1993, February 1, 1994 and February 1, 1994 (said
Indenture of Mortgage and Deed of Trust and Supplemental Indentures being
collectively referred to herein as the "Mortgage"), all executed by the
Company to Bankers Trust Company, as Trustee, all as provided in the
Mortgage to which reference is made for a statement of the property
mortgaged and pledged, the nature and extent of the security, the rights of
the holders of the bonds in respect thereof and the terms and conditions
upon which the bonds may be issued and are secured; but neither the
foregoing reference to the Mortgage nor any provision of this bond or of
the Mortgage shall affect or impair the obligation of the Company, which is
absolute, unconditional and unalterable, to pay at the maturities herein
provided the principal of and interest on this bond as herein provided. The
principal of this bond may be declared or may become due on the conditions,
in the manner and at the time set forth in the Mortgage, upon the happening
of an event of default as in the Mortgage provided.
This bond is transferable by the registered holder hereof in person or
by attorney upon surrender hereof at the office or agency of the Company in
the Borough of Manhattan, New York, New York, together with a written
instrument of transfer in approved form, signed by the holder, and a new
bond or bonds of this series for a like principal amount in authorized
denominations will be issued in exchange, all as provided in the Mortgage.
Prior to due presentment for registration of transfer of this bond the
Company and the Trustee may deem and treat the registered owner hereof as
the absolute owner hereof, whether or not this bond be overdue, for the
purpose of receiving payment and for all other purposes, and neither the
Company nor the Trustee shall be affected by any notice to the contrary.
This bond is exchangeable at the option of the registered holder hereof
upon surrender hereof, at the office or agency of the Company in the
Borough of Manhattan, New York, New York, for an equal principal amount of
bonds of this series of other authorized denominations, in the manner and
on the terms provided in the Mortgage.
Bonds of this series are to be issued initially under a book-entry only
system and, except as hereinafter provided, registered in the name of The
Depository Trust Company, New York, New York ("DTC") or its nominee, which
shall be considered to be the holder of all bonds of this series for all
purposed of the Mortgage, including, without limitation, payment by the
Company of principal of and interest on such bonds of this series and
receipt of notices and exercise of rights of holders of such bonds of this
series. There shall be a single bond of this series which shall be
immobilized in the custody of DTC with the owners of book-entry interests
in bonds of this series ("Book-Entry Interests") having no right to receive
bonds of this series in the form of physical securities or certificates.
Ownership of Book-Entry Interests shall be shown by book-entry on the
system maintained and operated by DTC, its participants (the
"Participants") and certain persons acting through the Participants.
Transfer of ownership of Book-Entry Interests are to be made only by DTC
and the Participants by that book-entry system, the Company and the Trustee
having no responsibility therefor so long as bonds of this series are
registered in the name of DTC or its nominee. DTC is to maintain records
of positions of Participants in bonds of this series, and the Participants
and persons acting through Participants are to maintain records of the
purchasers and owners of Book-Entry Interests. If DTC or its nominees
determines not to continue to act as a depository for the bonds of this
series in connection with a book-entry only system, another depository, if
available, may act instead and the single bond of this series will be
transferred into the name of such other depository or its nominee, in which
case the above provisions will continue to apply but to the new depository.
If the book-entry only system for bonds of this series is discontinued for
any reason upon surrender and cancellation of the single bond of this
series registered in the name of the then depository or its nominee, new
registered bonds of this series will be issued in authorized denominations
to the holder of Book-Entry Interests shown on the book-entry system
immediately prior to the discontinuance thereof. Neither the Trustee nor
the Company shall be responsible for the accuracy of the interests
shown on that system.
The bonds of this series are not subject to redemption at the option of
the Company prior to February 1, 1999. Thereafter, the bonds of this
series are subject to redemption prior to maturity as a whole at any time
or in part from time to time in accordance with the provisions of the
Mortgage, upon not less than thirty (30) days' prior notice (which notice
may be made subject to the deposit of redemption moneys with the Trustee
before the date fixed for redemption) given by mail as provided in the
Mortgage, either at the option of the Company, or for the purposes of any
applicable provision of the Mortgage, at the following prices, together in
every case with accrued and unpaid interest thereon to the date fixed for
redemption:
(a) if redeemed with trust moneys deposited with or received by
the Trustee pursuant to specified provisions of the Mortgage, then at the
applicable special redemption price, stated as a percentage of the
principal amount, set forth below; and
(b) otherwise, at the applicable general redemption price, stated
as a percentage of the principal amount, set forth below:
If date fixed for General Special
redemption falls Redemption Redemption
within twelve months' Price (% Price (%
period ending the of principal of principal
last day of January amount called) amount called)
2000 101.68% 100.00%
2001 101.12 100.00
2002 100.56 100.00
2003 100.00 100.00
2004 100.00 100.00
The Mortgage provides that the Company and the Trustee, with consent
of the holders of not less than 66-2/3% in aggregate principal amount of
the bonds at the time outstanding which would be affected by the action
proposed to be taken, may by supplemental indenture add any provisions to
or change or eliminate any of the provisions of the Mortgage or modify the
rights of the holders of the bonds and coupons issued thereunder; provided,
however, that without the consent of the holder hereof no such supplemental
indenture shall affect the terms of payment of the principal of or interest
or premium on this bond, or reduce the aforesaid percentage of the bonds
the holders of which are required to consent to such a supplemental
indenture, or permit the creation by the Company of any mortgage or pledge
or lien in the nature thereof ranking prior to or equal with the lien of
the Mortgage or deprive the holder hereof of the lien of the Mortgage on
any of the property which is subject to the lien thereof.
As set forth in the Supplemental Indenture establishing the terms and
series of the bonds of this series, each holder of this bond, solely by
virtue of its acquisition thereof, shall have and be deemed to have
consented, without the need for any further action or consent such holder,
to any and all amendments to the Mortgage which are intended to eliminate
or modify in any manner the requirements of the sinking and improvement
fund as set forth in Section 6.14 of the Mortgage.
No recourse shall be had for the payment of the principal of or the
interest on this bond, or any part thereof, or for any claim based thereon
or otherwise in respect thereof, to any incorporator, or any past, present
or future stockholder, officer or director of the Company, either directly
or indirectly, by virtue of any statute or by enforcement of any assessment
or otherwise, and any and all liability of the said incorporators,
stockholders, officers or directors of the Company in respect to this bond
is hereby expressly waived and released by every holder hereof.
SCHEDULE B
PROPERTY SUBJECT TO THE LIEN OF THE MORTGAGE
IN CONNECTICUT
TOWN OF ASHFORD
All of the following described rights, privileges and easements
situated in the Town of Ashford, County of Windham and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(1) C & M Developers November 8, 1993 103 32
(2) Crossen Builders, Inc. November 8, 1993 103 29
TOWN OF BRISTOL
All of the following described rights, privileges and easements
situated in the Town of Bristol, County of Hartford and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(3) Hart Street Development September 22, 1993 1103 617
Group, Inc.
TOWN OF BROOKLYN
All of the following described rights, privileges and easements
situated in the Town of Brooklyn, County of Windham and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(4) Edward B. Ross et al. November 10, 1993 145 11
TOWN OF CHAPLIN
All of the following described rights, privileges and easements
situated in the Town of Chaplin, County of Windham and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(5) Paul V. Carlson December 2, 1993 57 256
TOWN OF CHESHIRE
All of the following described rights, privileges and easements
situated in the Town of Cheshire, County of New Haven and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(6) The Ginger Group November 17, 1993 1018 222
(7) Anderson-Wilcox, Inc. May 6, 1993 976 25
(8) James B. Sweeney May 4, 1993 976 27
TOWN OF CLINTON
All of the following described rights, privileges and easements
situated in the Town of Clinton, County of Middlesex and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(9) Moran Builders, Inc. October 13, 1993 226 1034
TOWN OF EAST GRANBY
All of the following described rights, privileges and easements
situated in the Town of East Granby, County of Hartford and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(10) Deer Run Corporation July 30, 1993 101 646
(11) Halmar, Incorporated November 17, 1993 102 39
(12) William H. Wilson November 11, 1993 102 156
TOWN OF EAST HARTFORD
All of the following described rights, privileges and easements
situated in the Town of East Hartford, County of Hartford and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(13) Sally Realty Inc. et al. September 29, 1993 1476 206
TOWN OF FARMINGTON
All of the following described rights, privileges and easements
situated in the Town of Farmington, County of Hartford and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(14) The Town of Farmington November 17, 1993 471 1018
TOWN OF LEBANON
All of the following described rights, privileges and easements
situated in the Town of Lebanon, County of New London and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(15) Robert G. Avery et al. November 1, 1993 155 614
(16) Joyce N. Hoek November 8, 1993 155 616
(17) Alexander P. McDonnell et al. October 30, 1993 155 619
TOWN OF MANCHESTER
All of the following described rights, privileges and easements
situated in the Town of Manchester, County of Hartford and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(18) Rail Line Associates April 13, 1993 1590 83
(19) Manchester Crossroads I September 23, 1993 1643 205
Associates Limited
Partnership et al.
TOWN OF PLAINVILLE
All of the following described rights, privileges and easements
situated in the Town of Plainville, County of Hartford and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(20) R & C Construction, Inc. October 15, 1993 306 715
TOWN OF POMFRET
All of the following described rights, privileges and easements
situated in the Town of Pomfret, County of Windham and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(21) Raynham, Inc. October 21, 1993 110 93
TOWN OF SIMSBURY
All of the following described rights, privileges and easements
situated in the Town of Simsbury, County of Hartford and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(22) Louis A. Sperandio et al. October 12, 1993 419 484
(23) C.G.R. Developers, Inc. October 25, 1993 420 927
TOWN OF SOUTH WINDSOR
All of the following described rights, privileges and easements
situated in the Town of South Windsor, County of Hartford and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(24) Maple Leaf Construction, Inc. November 3, 1993 755 73
TOWN OF THOMPSON
All of the following described rights, privileges and easements
situated in the Town of Thompson, County of Windham and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(25) Lemanda Corporation November 11, 1993 308 123
(26) David G. Mossy December 6, 1993 309 219
TOWN OF WINDSOR
All of the following described rights, privileges and easements
situated in the Town of Windsor, County of Hartford and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(27) Culbro Land Resources, Inc. October 11, 1993 969 335
(28) AP Property & Standard October 18, 1993 969 337
Exchange, Inc.
TOWN OF WOODSTOCK
All of the following described rights, privileges and easements
situated in the Town of Woodstock, County of Windham and State of
Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(29) Nelson E. Douglas et al. July 7, 1993 239 366
Exhibit 4.2.21
Connecticut Development Authority
and
The Connecticut Light and Power Company
LOAN AGREEMENT
Dated as of September 1, 1993
Connecticut Development Authority
$245,500,000 Pollution Control Revenue Refunding Bonds
(The Connecticut Light and Power Company Project - 1993A Series)
TABLE OF CONTENTS
Page
PREAMBLE ................................................ 1
ARTICLE I DEFINITIONS AND INTERPRETATION
Section 1.1. Definitions.......................... 5
Section 1.2. Interpretation....................... 13
ARTICLE II REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations by the Authority..... 15
Section 2.2. Limitation of Control by Borrower.... 16
Section 2.3. Representations by the Borrower...... 17
ARTICLE III THE LOAN
Section 3.1. Loan Clauses......................... 20
Section 3.2. Other Amounts Payable................ 21
Section 3.3. Manner of Payment.................... 22
Section 3.4. Obligation Unconditional............. 22
Section 3.5. Security Clauses..................... 22
Section 3.6. Issuance of Bonds.................... 22
Section 3.7. Use of Priority Amounts.............. 22
Section 3.8. Effect of Drawing Under Letter
of Credit............................ 23
Section 3.9. Effective Date and Term.............. 23
Section 3.10. Borrower's Purchase of Bonds......... 23
Section 3.11. Letter of Credit..................... 24
Section 3.12. Requirements for Delivery of a
Substitute Credit Facility........... 24
Section 3.13. Securities Laws...................... 26
Section 3.14. New York Paying Agent................ 26
ARTICLE IV THE PROJECT
Section 4.1. Completion of the Project............ 27
Section 4.2. No Warranty Regarding Condition,
Suitability or Cost of Project....... 27
Section 4.3. Taxes................................ 27
Section 4.4. Insurance............................ 28
Section 4.5. Compliance with Law.................. 28
Section 4.6. Maintenance and Repair............... 28
ARTICLE V CONDEMNATION DAMAGE AND DESTRUCTION
Section 5.1. No Abatement of Payments Hereunder... 30
Section 5.2. Project Disposition Upon Condemnation,
Damage or Destruction................ 30
Section 5.3. Application of Net Proceeds of
Insurance or Condemnation............ 30
ARTICLE VI COVENANTS
Section 6.1. The Borrower to Maintain its
Corporate Existence; Conditions under
which Exceptions Permitted........... 31
Section 6.2. Indemnification, Payment of Expenses,
and Advances......................... 31
Section 6.3. Incorporation of Tax Regulatory
Agreement; Payments Upon Taxability.. 34
Section 6.4. Covenant as to Project Use........... 35
Section 6.5. Further Assurances and Corrective
Instruments.......................... 37
Section 6.6. Covenant by Borrower as to Compliance
with Indenture....................... 37
Section 6.7. Assignment of Agreement or Note...... 37
Section 6.8. Inspection........................... 37
Section 6.9. Default Notification................. 38
Section 6.10. Covenant Against Discrimination...... 38
Section 6.11. Authority Costs and Expenses......... 38
ARTICLE VII EVENTS OF DEFAULT AND REMEDIES
Section 7.1. Events of Default.................... 39
Section 7.2. Remedies on Default.................. 40
Section 7.3. Remedies Upon Project Use Default.... 41
Section 7.4. No Duty to Mitigate Damages.......... 41
Section 7.5. Remedies Cumulative.................. 42
ARTICLE VIII PREPAYMENT PROVISIONS
Section 8.1. Optional Prepayment.................. 43
Section 8.2. Notice by the Borrower of Optional
Prepayment........................... 45
Section 8.3. Mandatory Prepayment on Taxability... 45
Section 8.4. Mandatory Prepayment Upon Occurrence
of Certain Events.................... 45
ARTICLE IX GENERAL
Section 9.1. Indenture............................ 46
Section 9.2. Benefit of and Enforcement by
Bondholders.......................... 46
Section 9.3. Force Majeure........................ 46
Section 9.4. Amendments........................... 47
Section 9.5. Notices.............................. 47
Section 9.6. Prior Agreements Superseded.......... 47
Section 9.7. Execution of Counterparts............ 48
Section 9.8. Time................................. 48
APPENDICES
Appendix A - Form of Promissory Note
Appendix B - Description of Project
Connecticut Development Authority
The Connecticut Light and Power Company
LOAN AGREEMENT
THIS LOAN AGREEMENT, made and dated as of September 1, 1993 by and
between the Connecticut Development Authority, a body corporate and politic
constituting a public instrumentality and political subdivision of the
State of Connecticut, and The Connecticut Light and Power Company, a
corporation organized and existing under the laws of the State of
Connecticut,
WITNESSETH THAT:
WHEREAS, the State Commerce Act, constituting Connecticut General
Statutes, Sections 32-la through 32-23ss, as amended (the "Act"), declares
that there is a continuing need in the State (1) for economic development
and activity to provide and maintain employment and tax revenues and to
control, abate and prevent pollution to protect the public health and
safety and (2) for assistance to public service businesses providing
transportation and utility services in the State, and that the availability
of financial assistance and suitable facilities are important inducements
to industrial and commercial enterprises to remain or locate in the State
and to provide industrial, recreation, urban and public service projects;
and
WHEREAS, the Act provides that (1) the term "project" as used therein
means any facility, plant, works, system, building, structure, utility,
fixture or other real property improvement located in the State, and the
land on which it is located or which is reasonably necessary in connection
therewith, which is of a nature or which is to be used or occupied by any
person for purposes which would constitute it as an economic development
project, recreation project, urban project, public service project or
health care project, and any real property improvement reasonably related
thereto, and (2) that a project may also include or consist exclusively of
machinery, equipment or fixtures; and
WHEREAS, the Act defines economic development project to include
"any project which is to be used or occupied by any person for . . . (2)
controlling, abating, preventing or disposing of land, water, air or other
environmental pollution . . . or (3) the conservation of energy or the
utilization of cogeneration technology or solar, wind, hydro, biomass or
other renewable sources to produce energy for any industrial or commercial
application."
WHEREAS, the Act provides that the Authority shall have power (1) to
determine the location and character of any project to be financed under
the provisions of the Act; (2) to purchase, receive by gift or otherwise,
lease, exchange, or otherwise acquire, and construct, reconstruct, improve,
maintain, equip and furnish one or more projects, including all real and
personal property which the Authority may deem necessary therewith, and to
enter into a contract with a person therefor upon such terms and conditions
as the Authority shall determine to be reasonable, including but not
limited to reimbursement for the planning, designing, financing,
construction, reconstruction, improvement, equipping, furnishing, operation
and maintenance of reserve and insurance funds with respect to the
financing of the project; (3) to extend credit or make loans to any person
for the planning, designing, financing, acquiring, constructing,
reconstructing, improving, equipping and furnishing of a project and for
the refinancing of existing indebtedness with respect to any facility or
part thereof which would qualify as a project in order to facilitate
substantial improvements thereto, which credits or loans may be secured by
loan agreements, mortgages, contracts and all other instruments or fees and
charges, upon such terms and conditions as the Authority shall determine to
be reasonable in connection with such loans, including provision for the
establishment and maintenance of reserve and insurance funds and in the
exercise of powers granted in the the Act in connection with a project for
such person, to require the inclusion in any contract, loan agreement or
other instrument, such provisions for the construction, use, operation and
maintenance and financing of a project as the Authority may deem necessary
or desirable; (4) to issue its bonds for such purposes, subject to the
approval of the Treasurer of the State; and, (5) as security for the
payment of the principal or redemption price, if any, of and interest on
any such bonds, to pledge or assign such a loan, lease or sale agreement
and the revenues and receipts derived by the Authority from such a project;
and
WHEREAS, by resolutions adopted October 24, 1973; June 14, 1977; July
10, 1984 and March 12, 1985, the Authority has authorized the issuance of
$11,650,000 principal amount of its Pollution Control Revenue Bonds
(Millstone Point Project - 1973 Series) (of which $9,436,500 was for the
benefit of The Connecticut Light and Power Company (the "Borrower") and The
Hartford Electric Light Company, which merged with and into the Borrower in
1982); $16,000,000 principal amount of its Pollution Control Revenue Bonds
(The Connecticut Light and Power Company and The Hartford Electric Light
Company Projects - 1977 Series); $69,800,000 principal amount of its
Pollution Control Revenue Par Value Demand Bonds (The Connecticut Light and
Power Company Project - 1984 Series); $39,700,000 principal amount of its
Pollution Control Revenue Par Value Demand Bonds (The Connecticut Light and
Power Company Project - 1985 Series); and $60,700,000 principal amount of
its Pollution Control Revenue Par Value Demand Bonds (The Connecticut Light
and Power Company - 1985 Series B); and $53,500,000 principal amount of its
Pollution Control Revenue Par Value Demand Bonds (The Connecticut Light and
Power Company Project - 1985 Series C) (the "Prior Obligations") for the
purposes of providing funds for the financing of construction of and
additions to the pollution control facilities of the Borrower; and
WHEREAS, the Borrower currently owns certain individual interests
in existing facilities within certain municipalities in the State and, by
resolution adopted in furtherance of the purposes of the Act, the Authority
has accepted the application of the Borrower for assistance in the
financing of facilities for the control, abatement or prevention of
environmental pollution deriving from the operation of certain nuclear and
fossil fuel electric generating facilities (the "Project"); and
WHEREAS, the Authority has by a further resolution adopted September
8, 1993, authorized the issuance of $245,500,000 principal amount of its
Pollution Control Revenue Refunding Bonds (The Connecticut Light and Power
Company Project - 1993A Series) for the purposes of providing funds for the
refunding of the Prior Obligations; and
WHEREAS, pursuant to such resolution the Bonds (as hereinafter
defined) are to be secured by an Indenture of Trust of even date herewith,
by and between the Authority and Shawmut Bank Connecticut, National
Association, as Trustee; and
WHEREAS, in order to further secure the Bonds, the Borrower
concurrently with the execution hereof has arranged the delivery to the
Paying Agent of an irrevocable Letter of Credit, dated the date of delivery
of the Bonds, issued by Deutsche Bank AG, New York Branch, for the account
of the Borrower in favor of the Paying Agent as beneficiary on behalf of
the owners of the Bonds; and
WHEREAS, the Borrower and Deutsche Bank AG, New York Branch, entered
into a Letter of Credit and Reimbursement Agreement dated as of September
1, 1993 obligating the Borrower inter alia to repay all amounts drawn under
the Letter of Credit together with interest, if any, thereon; and
WHEREAS, the Bonds shall be special obligations of the Authority,
payable solely from the revenues or other receipts, funds or monies to be
derived by the Authority under this Agreement or the Indenture and from any
amounts otherwise available under the Indenture for the payment of the
Bonds; and
WHEREAS, all federal and State agencies having jurisdiction in the
premises have certified that the portion of the Project that constitutes
pollution control Facilities, as designed, is in furtherance of the purpose
of controlling, abating or preventing such pollution at the Project; and
WHEREAS, the Authority proposes with the proceeds of the Bonds to
make a loan to the Borrower and the Borrower proposes to borrow such
proceeds from the Authority for the purpose of refunding the Prior
Obligations issued by the Authority to finance and refinance a portion of
the cost of undertaking and completing the Project; and
WHEREAS, the Borrower acknowledges that the Authority is providing
financing for the Project in furtherance of the Authority's corporate
purposes under the Act, that the accomplishment of these purposes is
dependent upon the compliance of the Borrower with its covenants contained
in this Agreement, that the Authority has a resulting beneficial interest
in the Project, and that the Borrower's use of and interest in the Project
as provided hereby are in furtherance of the discharge of a public purpose;
and
WHEREAS, the Connecticut Department of Public Utility Control has
approved the issuance of the Note;
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, covenants and agreements herein set forth, the Authority
and the Borrower, each binding itself, its successors and assigns, do
mutually promise, covenant and agree as follows (provided that in the
performance of the agreements of the Authority herein contained, any
obligation it may incur for the payment of money shall not be an
obligation, debt or liability of the State or any municipality thereof and
neither the State nor any municipality thereof shall be liable on any
obligation so incurred, but any such obligation shall be payable solely out
of the revenues or other receipts, funds or monies to be derived by the
Authority under this Agreement or the Indenture and from any amounts
otherwise available under the Indenture for the payment of the Bonds):
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1. Definitions. For the purposes of this Agreement, the
following words and terms shall have the respective meanings set forth as
follows, and any capitalized word or term used but not defined herein is
used as defined in the Indenture:
"Act" means the State Commerce Act, constituting Connecticut General
Statutes, Sections 32-la through 32-23ss, as amended.
"Agreement" means this Loan Agreement and any amendments and
supplements hereto.
"Authority" means the Connecticut Development Authority, a body
corporate and politic constituting a public instrumentality and political
subdivision of the State of Connecticut duly organized and existing under
the laws of the State, and any body, board, authority, agency or other
political subdivision or instrumentality of the State which shall hereafter
succeed to the powers, duties and functions thereof.
"Authorized Representative" means, in the case of the Authority, the
Chairman or Vice Chairman, the President, the Executive Vice President or
any Senior Vice President or any Vice President thereof and, in the case of
the Borrower, the Chairman, Vice Chairman, President, any Vice President,
Chief Financial Officer, Treasurer, Assistant Treasurer, Secretary or
Assistant Secretary thereof and, when used with reference to the
performance of any act, the discharge of any duty or the execution of any
certificate or other document, any officer, employee or other person
authorized to perform such act, discharge such duty or execute such
certificate or other document.
"Bank" means Deutsche Bank AG, New York Branch, in its capacity as
issuer of the Letter of Credit and any other issuer of a Credit Facility.
"Beneficial Owner" shall have the meaning specified in Section 2.3(F)
of the Indenture. If any person claims to the Trustee to be a Beneficial
Owner, for purposes of Section 2.4(C) of the Indenture, such person shall
prove such claim to the satisfaction of the Trustee with such documentation
and signature guaranties as the Trustee may request.
"Bonds" means the $245,500,000 Pollution Control Revenue Refunding
Bonds (The Connecticut Light and Power Company Project - 1993A Series)
authorized and issued pursuant to Section 2.3 of the Indenture.
"Bond Counsel" means Whitman & Ransom or such other nationally
recognized bond counsel selected by the Authority and reasonably
satisfactory to the Borrower and the Trustee.
"Borrower" means (i) The Connecticut Light and Power Company, a
corporation organized and existing under the laws of the State of
Connecticut, and its successors and assigns and (ii) any surviving
resulting or transferee corporation as provided in Section 6.1 hereof.
"Business Day" means any day (i) that is not a Saturday or Sunday,
(ii) that is a day on which banks located in Hartford, Connecticut and New
York, New York are not required or authorized to remain closed, (iii) that
is a day on which banking institutions in all of the cities in which the
principal offices of the Trustee and the Paying Agent and, if applicable,
the Remarketing Agent and the Bank are located and are not required or
authorized to remain closed and (iv) that is a day on which the New York
Stock Exchange, Inc. is not closed.
"Code" means the Internal Revenue Code of 1986, as amended and
regulations promulgated thereunder.
"Conversion Date" means the date on which a new Mode becomes
effective with respect to a Bond, and with respect to a Bond in the
Multiannual Mode, the date on which a new Rate Period becomes effective.
"Credit Facility" means the Letter of Credit and any substitute
irrevocable transferable letter of credit delivered to the Paying Agent
pursuant to the Indenture and this Agreement and then in effect. More than
one Credit Facility may be in effect from time to time.
"Debt Service Fund" means the special trust fund so designated,
established pursuant to Section 5.1 of the Indenture.
"DTC" or "The Depository Trust Company" shall mean the
limited-purpose trust company organized under the laws of the State of New
York which shall act as securities depository for the Bonds, and any
successor thereto.
"Determination of Taxability" means (1) a published revenue ruling by
the Internal Revenue Service and an opinion of Bond Counsel, unless the
Borrower timely requests the Authority to proceed in accordance with
Section 6.3(H) of this Agreement and proceedings pursuant to such section
are continuing, (2)(a)(i) a private ruling specifically applicable to the
Bonds or (ii) the receipt by any Bondowner of a notice of assessment and
demand for payment from the Internal Revenue Service and (b)(i) the
expiration of the appeal period provided therein if no appeal is taken or
(ii) if an appeal is taken, a final unappealable decision by a court of
competent jurisdiction; provided that in the case of an event described in
clause (2) that the Authority or the Bondowner, as the case may be, has
given the Borrower and the Trustee prompt written notice of any application
for such a private ruling or, as the case may be, any proposed assertion of
taxability by the Internal Revenue Service and, if the Borrower agrees to
pay all expenses in connection therewith, permits the Borrower to contest
such action, either directly or in the name of the registered owner,
through any level of appeal determined by the Borrower, or (3) the
admission in writing by the Borrower, in the case of clause (1), (2) and
(3) to the effect that the interest on the Bonds is includable in the gross
income for federal income tax purposes (other than for purposes of any
alternative minimum tax, environmental tax or foreign branch profits tax)
of an owner or former owner thereof, other than for a period during which
such owner or former owner is or was a "Substantial User" of the Project or
a "Related Person" as such terms are defined in the Code. For purposes of
this definition, the term owner or Bondowner means the Beneficial Owner of
the Bonds so long as the Book-Entry Only System (as defined in Section
23(F) of the Indenture) is in effect.
"Event of Default" means an Event of Default as defined in Section
7.1 hereof.
"Financing Documents" means this Agreement, the Tax Regulatory
Agreement and the Note.
"Indenture" means the Indenture of Trust, of even date herewith, by
and between the Authority and the Trustee, together with all indentures
supplemental thereto made and entered into in accordance therewith.
"Interest Payment Date" shall mean each date on which interest is
payable on the Bonds as provided in the forms of the Bonds.
"Letter of Credit" means the $249,133,000 irrevocable letter of
credit dated the date of the initial delivery of the Bonds and issued by
Deutsche Bank AG, New York Branch, for the benefit of the Paying Agent.
"Mortgage Indentures" means (i) that certain Indenture of Mortgage
and Deed of Trust dated as of May 1, 1921, by and between the Borrower and
Bankers Trust Company, as trustee, as amended and supplemented, (ii) that
certain First Mortgage Indenture and Deed of Trust dated as of January 1,
1958, by and between The Hartford Electric Light Company (which merged with
and into the Borrower as of June 30, 1982) and Old Colony Trust Company
(which merged into First National Bank of Boston by merger effective
January 4, 1971), as trustee, as amended and supplemented, and (iii) any
other mortgage indenture which may hereafter be created so long as such
mortgage indenture covers the property pledged under the indentures named
in (i) and (ii) above or otherwise covers substantially all of the property
of the Borrower.
"Moody's" means Moody's Investors Services, Inc., a corporation
organized and existing under the laws of the State of Delaware, its
successors and their assigns, and if such corporation shall be dissolved or
liquidated or shall no longer perform the functions of a securities rating
agency, "Moody's" shall be deemed to refer to any other nationally
recognized securities rating agency designated by the Authority, at the
direction of the Borrower, by notice to the Trustee and the
Borrower.
"Net Proceeds" when used with respect to any insurance or
condemnation award, means the gross proceeds from such award less all
expenses (including attorney's fees and expenses and any extraordinary
expenses) incurred in the collection thereof.
"1954 Code" means the Internal Revenue Code of 1954, as amended, as
in effect on August 1, 1986.
"Note" means the promissory note of the Borrower to the Authority,
dated the initial date of delivery of the Bonds in the form attached as an
Appendix to this Agreement, and any amendments or supplements made in
conformity with this Agreement and the Indenture.
"Outstanding", when used with reference to a Bond or Bonds, as of any
particular date, means all Bonds which have been authenticated and
delivered under the Indenture, except:
(1) any Bonds cancelled by the Trustee because of payment or
redemption prior to maturity or surrendered to the Trustee for
cancellation;
(2) any Bond (or portion of a Bond) paid or redeemed or for
the payment or redemption of which there has been separately set
aside and held in the Debt Service Fund either:
(a) monies in an amount sufficient to effect payment of
the principal or applicable Redemption Price thereof, together with accrued
interest on such Bond to the payment or redemption date, which payment or
redemption date shall be specified in irrevocable instructions given to the
Trustee to apply such monies to such payment on the date so specified; or
(b) obligations of the kind described in subsection
12.1(A) of the Indenture in such principal amounts, of such maturities,
bearing such interest and otherwise having such terms and qualifications as
shall be necessary to provide monies in an amount sufficient to effect
payment of the principal or applicable Redemption Price of such Bond,
together with accrued interest on such Bond to the payment or redemption
date, which payment or redemption date shall be specified in irrevocable
instructions given to the Trustee to apply such obligations to such payment
on the date so specified; or
(c) any combination of (a) and (b) above;
(3) Bonds deemed tendered for purchase and not delivered to
the Paying Agent on the Purchase Date, provided sufficient funds for
payment of the Purchase Price are on deposit with the Paying Agent;
(4) Bonds in exchange for or in lieu of which other Bonds
shall have been authenticated and delivered under Article III of the
Indenture; and
(5) any Bond deemed to have been paid as provided in subsection
12.1 of the Indenture.
"Paying Agent" means any paying agent for the Bonds appointed
pursuant to Section 9.10 of the Indenture (and may include the Trustee),
and its successor or successors and any other corporation which may at any
time be substituted in its place in accordance with the Indenture.
"Permitted Encumbrances" mean, as of any particular date, (i) the
lien of the Mortgage Indentures, (ii) liens and encumbrances permitted by
the Mortgage Indentures, (iii) liens for taxes not yet due and payable,
(iv) any lien created by this Agreement and the Indenture, (v) utility,
access and other easements and rights-of-way, that will not interfere with
or impair the value or use of the Project as herein provided, (vi) any
mechanic's, laborer's, materialman's, supplier's or vendor's lien or right
in respect thereof if payment is not yet due and payable and for which
statutory lien rights exist, and (vii) such minor defects, irregularities,
easements, and, rights-of-way (including agreements with any railroad the
purpose of which is to service the railroad siding) as normally exist with
respect to property similar in character to the Project and which do not
materially impair the value or use of the property affected thereby for the
purpose for which it was acquired hereunder.
"Plants" means, collectively, the nuclear or fossil fuel electric
generating plants at which the various portions of the Project are located,
including the Millstone 1, Millstone 2, and Millstone 3 nuclear electric
generating plants in Waterford, Connecticut, the Devon fossil fuel electric
generating plant in Milford, Connecticut, the Montville fossil fuel
electric generating plant in Uncasville, Connecticut, the Norwalk Harbor
fossil fuel electric generating plant in Norwalk, Connecticut, and the
Middletown fossil fuel electric generating plant in Middletown,
Connecticut, and as used in the singular form shall mean any one of them.
"Principal User" means any principal user of the Project within the
meaning of Section 144(a)(2)(B) of the Code, or 103(b)(6)(B) of the 1954
Code, as applicable, including without limitation any person who is a
greater-than-10-percent-owner (or if none, the person(s) who holds the
largest ownership interest in the Project), lessee or user of more than 10%
of the Project measured either by occupiable space or fair rental value
under any formal or informal agreement or, under the particular facts and
circumstances, anyone who is a principal customer of the Project. The term
"principal customer" means any person, who purchases output of the Project
under a contract if the percentage of output taken or to be taken by such
person, multiplied by a fraction the numerator of which is the term of such
contract and the denominator of which is the economic life of the Project,
exceeds 10%. In the case of a person who purchases output of an electric
or thermal energy, gas, water or other similar facility, such person is a
principal customer if the total output purchased by such person during any
one-year period beginning with the date the facility is placed in service
is more than 10 percent of the facility's output during each such period.
Co-owners or co-lessees who are shareholders in a corporation or who are
collectively treated as a partnership subject to subchapter K under section
761(a) of the Code are not treated as Principal Users merely by reason of
their ownership of corporate or partnership interests.
"Prior Obligations" means the Authority's $11,650,000 principal
amount of Pollution Control Revenue Bonds (Millstone Point Project - 1973
Series) (of which $9,436,500 was for the benefit of The Connecticut Light
and Power Company (the "Borrower") and The Hartford Electric Light Company,
which merged with and into the Borrower in 1982); $16,000,000 principal
amount of Pollution Control Revenue Bonds (The Connecticut Light and Power
Company and The Hartford Electric Company Projects - 1977 Series);
$69,800,000 principal amount of Pollution Control Revenue Par Value Demand
Bonds (The Connecticut Light and Power Company Project - 1984 Series);
$39,700,000 principal amount of Pollution Control Revenue Par Value Demand
Bonds (The Connecticut Light and Power Company Project - 1985 Series); and
$60,700,000 principal amount of its Pollution Control Revenue Par Value
Demand Bond (The Connecticut Light and Power Company - 1985 Series B); and
$53,500,000 principal amount Pollution Control Revenue Par Value Demand
Bonds (The Connecticut Light and Power Company Project - 1985 Series C).
"Project" means the Borrower's interest in the realty and other
interests in the real property, and in all personal property, goods,
leasehold improvements, machinery, equipment, furnishings, furniture,
fixtures, tools and attachments wherever located and whether now owned or
hereafter acquired, acquired or financed in whole or in part with the
proceeds of the Prior Obligations or the proceeds of tax-exempt securities
refunded by the Prior Obligations, and any additions and accessions
thereto, substitutions therefor and replacements, improvements, extensions
and restorations thereof, described in Appendix B to this Agreement, as
amended from time to time in accordance with this Agreement.
"Redemption Price" means, when used with respect to a Bond or a
portion thereof, the principal amount of such Bond or portion thereof plus
the applicable premium, if any, payable upon redemption thereof pursuant to
the Indenture.
"Refunding Fund" means the special trust fund so designated,
established pursuant to Section 5.1 of the Indenture.
"Reimbursement Agreement" means the Letter of Credit and
Reimbursement Agreement dated as of September 1, 1993 among the Borrower,
Deutsche Bank AG, New York Branch, as agent and issuing bank thereunder,
and the participating banks referred to therein, and any other agreement
between the Borrower and a Bank under which the Borrower is obligated to
reimburse the Bank for payments made by the Bank under a Credit Facility.
"Related Person" means, with respect to any Principal User, a person
which is a related person (as defined in Section 144(a)(3) of the Code, or
Section 103(b)(6)(B) of the 1954 Code, as applicable, and by reference to
Sections 267, 707(b) and 1563(a) of the Code, except that 50% is to be
substituted for 80% in Section 1563(a)).
"Sharing Agreement" means the Sharing Agreement - 1979 Connecticut
Nuclear Unit dated as of September 1, 1973, among the Borrower and the
other participants from time to time in ownership of the Millstone 3
nuclear electric generating plant in Waterford, Connecticut, pertaining to
the ownership, construction and operation of Millstone 3, as such agreement
has been or may be amended from time to time.
"S&P" means Standard & Poor's Corporation, a corporation organized
and existing under the laws of the State of New York, its successors and
their assigns and, if such corporation shall be dissolved or liquidated or
shall no longer perform the functions of a securities rating agency, "S&P"
shall be deemed to refer to any other nationally recognized securities
rating agency designated by the Trustee at the direction of the Borrower.
"State" means the State of Connecticut.
"Substantial User" means any substantial user of the Project within
the meaning of Section 147(a) of the Code or Section 103(b)(13) of the 1954
Code, as applicable.
"Supplemental Indenture" means any indenture supplemental to the
Indenture or amendatory of the Indenture, adopted by the Authority in
accordance with Article X of the Indenture.
"Tax Incidence Date" means the date as of which interest on the Bonds
becomes or became includable in the gross income of the recipient thereof
(other than the Borrower or another Substantial User or Related Person) for
federal income tax purposes for any cause, as determined by a Determination
of Taxability.
"Tax Regulatory Agreement" means the Tax Regulatory Agreement, dated
as of the date of initial issuance and delivery of the Bonds, among the
Authority, the Borrower and the Trustee, and any amendments and supplements
thereto.
"Term", when used with reference to this Agreement, means the term of
this Agreement determined as provided in Article III hereof.
"Trustee" means Shawmut Bank Connecticut, National Association, and its
successor or successors hereafter appointed in the manner provided in the
Indenture.
Section 1.2. Interpretation. In this Agreement:
(1) The terms "hereby", "hereof", "hereto", "herein",
"hereunder" and any similar terms, as used in this Agreement, refer to this
Agreement, and the term "hereafter" means after, and the term "heretofore"
means before, the date of this Agreement.
(2) Words of the masculine gender mean and include correlative
words of the feminine and neuter genders and words importing the
singular number mean and include the plural number and vice versa.
(3) Words importing persons include firms, associations,
partnerships (including limited partnerships), trusts, corporations
and other legal entities, including public bodies, as well as natural
persons.
(4) Any headings preceding the texts of the several Articles
and Sections of this Agreement, and any table of contents appended
to copies hereof, shall be solely for convenience of reference and
shall not constitute a part of this Agreement, nor shall they affect
its meaning, construction or effect.
(5) Nothing contained in this Agreement shall be construed to
cause the Borrower to become the agent for the Authority or the Trustee for
any purpose whatsoever, nor shall the Authority or the Trustee be
responsible for any shortage, discrepancy, damage, loss or destruction of
any part of the Project wherever located or for whatever cause.
(6) All approvals, consents and acceptances required to be
given or made by any person or party hereunder shall be at the sole
discretion of the party whose approval, consent or acceptance is
required.
(7) All notices to be given hereunder shall be given in
writing within a reasonable time unless otherwise specifically
provided.
(8) This Agreement shall be governed by and construed in
accordance with the applicable laws of the State.
(9) If any provision of this Agreement shall be ruled invalid
by any court of competent jurisdiction, the invalidity of such
provision shall not affect any of the remaining provisions hereof.
(10) From and after the date upon which there is no Credit
Facility in effect, upon receipt by the Trustee of a certificate from the
Bank stating that all amounts payable to the Bank under the Reimbursement
Agreement have been paid in full, all references to the Bank, the
Reimbursement Agreement or the Credit Facility in this Agreement, the Note,
the Indenture, and the Bonds shall be ineffective.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations by the Authority. The Authority
represents and warrants that:
(1) It is a body corporate and politic constituting a public
instrumentality and political subdivision of the State, duly organized and
existing under the laws of the State including the Act. The Authority is
authorized to issue the Bonds in accordance with the Act and to use the
proceeds thereof to refinance the Project.
(2) The Authority has complied with the provisions of the Act
and has full power and authority pursuant to the Act to consummate all
transactions contemplated by the Bonds, the Indenture and the Financing
Documents.
(3) By resolution duly adopted by the Authority and still in
full force and effect, the Authority has authorized the execution, delivery
and due performance of the Bonds, the Indenture and the Financing
Documents, and the taking of any and all action as may be required on the
part of the Authority to carry out, give effect to and consummate the
transactions contemplated by this Agreement and the Indenture, and all
approvals necessary in connection with the foregoing have been received.
(4) The Bonds have been duly authorized, executed,
authenticated, issued and delivered, constitute valid and binding special
obligations of the Authority payable solely from revenues or other
receipts, funds or monies pledged therefor under the Indenture and from any
amounts otherwise available under the Indenture, and are entitled to the
benefit of the Indenture. Neither the State nor any municipality thereof
is obligated to pay the Bonds or the interest thereon. Neither the faith
and credit nor the taxing power of the State nor any municipality thereof
is pledged for the payment of the principal, and premium, if any, of and
interest on the Bonds.
(5) The execution and delivery of the Bonds, the Indenture
and the Financing Documents and compliance with the provisions thereof,
will not conflict with or constitute on the part of the Authority a
violation of, breach of or default under its by-laws or any statute,
indenture, mortgage, deed of trust, note agreement or other agreement or
instrument to which the Authority is a party or by which the Authority is
bound, or, to the knowledge of the Authority, any order, rule or regulation
of any court or governmental agency or body having jurisdiction over the
Authority or any of its activities or properties, and all consents,
approvals, authorizations and orders of governmental or regulatory
authorities which are required for the consummation by the Authority of the
transactions contemplated thereby have been obtained.
(6) Subject to the provisions of this Agreement and the
Indenture, the Authority will apply the proceeds of the Bonds to the
purposes specified in the Indenture and the Financing Documents.
(7) There is no action, suit, proceeding or investigation at
law or in equity before or by any court, public board or body pending or
threatened against or affecting the Authority, or to the best knowledge of
the Authority, any basis therefor, wherein an unfavorable decision, ruling
or finding would adversely affect the transactions contemplated hereby or
by the Indenture, or which, in any way, would adversely affect the validity
of the Bonds, or the validity of or enforceability of the Indenture or the
Financing Documents, or any agreement or instrument to which the Authority
is a party and which is used or contemplated for use in consummation of the
transactions contemplated hereby and by the Indenture.
(8) It has not made any commitment or taken any action which
will result in a valid claim for any finders or similar fees or commitments
in respect of the transactions contemplated by this Agreement.
(9) The representations of the Authority set forth in the Tax
Regulatory Agreement are by this reference incorporated in this
Agreement as though fully set forth herein.
Section 2.2 Limitation of Control by Borrower. Pursuant to the
Sharing Agreement, the Borrower is the owner of a 52.933% undivided
interest in the Millstone 3 nuclear electric generating plant in Waterford,
Connecticut, at which a portion of the Project is located. The Sharing
Agreement designates the Borrower as one of two lead participants and,
together with such other lead participant, the Borrower has sole
responsibility for operation and maintenance of Millstone 3, subject to the
provisions of the Sharing Agreement. Every obligation of the Borrower
hereunder with respect to that portion of the Project located at Millstone
3 (other than the continuing obligation of the Borrower to pay, at the
times and in the amounts set forth herein, its loan obligation pursuant to
this Agreement) is subject to and limited by the provisions of such Sharing
Agreement. The Borrower agrees, however, subject to the representations
set forth in this Section, to exercise all rights granted to it pursuant to
the Sharing Agreement and its rights as to matters otherwise within the
Borrower's control, and to take all reasonable actions in the prudent
exercise of business judgment, to cause the covenants of the Borrower
contained in this Agreement to be performed to the full extent of the
Borrower's ability during the Term of this Agreement.
Section 2.3. Representations by the Borrower. The Borrower
represents and warrants that:
(1) The Borrower has been duly incorporated and validly exists
as a corporation in good standing under the laws of the State of
Connecticut, is not in violation of any provision of its certificate of
incorporation or its by-laws, has corporate power to enter into and perform
the Financing Documents, and by proper corporate action has duly authorized
the execution and delivery of the Financing Documents.
(2) The Financing Documents constitute valid and legally
binding obligations of the Borrower, enforceable in accordance with
their respective terms, except to the extent that such enforceability may
be limited by bankruptcy or insolvency or other laws affecting creditors'
rights generally or by general principles of equity.
(3) Neither the execution and delivery of the Financing
Documents, the consummation of the transactions contemplated thereby, nor
the fulfillment by the Borrower of or compliance by the Borrower with the
terms and conditions thereof is prevented or limited by or conflicts with
or results in a breach of, or default under the terms, conditions or
provisions of any contractual or other restriction of the Borrower,
evidence of its indebtedness or agreement or instrument of whatever nature
to which the Borrower is now a party or by which it is bound, or
constitutes a default under any of the foregoing. No event has occurred
and no condition exists which, upon the execution and delivery of any
Financing Documents, constitutes an Event of Default hereunder or an event
of default thereunder or, but for the lapse of time or the giving of
notice, would constitute an Event of Default hereunder or an event of
default thereunder.
(4) There is no action or proceeding pending or, to the
knowledge of the Borrower, threatened against the Borrower before any
court, administrative agency or arbitration board that will materially and
adversely affect the ability of the Borrower to perform its obligations
under the Financing Documents except as disclosed in the Borrower's Annual
Report on Form 10-K for the fiscal year ended December 31, 1992, the
Borrower's Quarterly Reports on Form 10-Q for the fiscal quarters ended
March 31, 1993 and June 30, 1993, and the Borrower's Current Reports on
Form 8-K dated June 3, 1993, June 30, 1993 and September 10, 1993; and all
authorizations, consents and approvals of governmental bodies or agencies
required in connection with the execution and delivery of the Financing
Documents and in connection with the performance of the Borrower's
obligations hereunder or thereunder have been obtained.
(5) The execution, delivery and performance of the Financing
Documents and any other instrument delivered by the Borrower pursuant to
the terms hereof or thereof are within the corporate powers of the Borrower
and have been duly authorized and approved by the board of directors of the
Borrower and are not in contravention of law or of the Borrower's
certificate of incorporation or by-laws, as amended to date, or of any
undertaking or agreement to which the Borrower is a party or by which it is
bound.
(6) The Borrower represents that it has not made any
commitment or taken any action which will result in a valid claim for any
finders' or similar fees or commitments in respect of the transactions
described in this Agreement other than the fees to various parties to the
transactions contemplated hereby which have been heretofore paid or
provided.
(7) The Project is included within the definition of a
"project" in the Act, and its estimated cost is equal to or in excess of
$245,500,000. The Borrower intends the Project to be and continue to be an
authorized project under the Act during the Term of this Agreement.
(8) All amounts shown in Schedule D of the Tax Regulatory
Agreement are eligible costs of a project financed by bonds issued by the
Authority under the Act, and may be financed by amounts in the Refunding
Fund under the Indenture. None of the proceeds of the Bonds will be used
directly or indirectly as working capital or to finance inventory.
(9) The Project is in compliance with all applicable federal,
State and local laws and ordinances (including rules and regulations)
relating to zoning, building, safety and environmental quality the
non-compliance with which would materially adversely affect the performance
by the Borrower of any of its obligations hereunder.
(10) The Borrower has obtained all necessary material approvals
from any and all governmental agencies requisite to the Project, and has
also obtained all material occupancy permits and authorizations from
appropriate authorities authorizing the occupancy and use of the Project
for the purposes contemplated hereby. The Borrower further represents and
warrants that it has completed the Project in accordance with all material
federal, State and local laws, ordinances and regulations applicable
thereto.
(11) The availability of financial assistance from the Authority
as provided herein and in the Indenture has induced the Borrower to locate
the Project in the State. The Borrower does not presently intend to lease
the project.
(12) The Borrower will not take or omit to take any action which
action or omission will in any way cause the proceeds of the Bonds to be
applied in a manner contrary to that provided in the Indenture and the
Financing Documents as in force from time to time.
(13) The Borrower has not taken and will not take any action and
knows of no action that any other person, firm or corporation has taken or
intends to take, which would cause interest on the Bonds to be includable
in the gross income of the recipients thereof for federal income tax
purposes. The representations, certifications and statements of reasonable
expectation made by the Borrower in the Tax Regulatory Agreement and
relating to Project description, composite issues, bond maturity and
average asset economic life, use of Bond proceeds, arbitrage and related
matters are hereby incorporated by this reference as though fully set forth
herein.
(14) The Borrower has good and marketable or good and
merchantable title to the Project subject only to Permitted Encumbrances
and to irregularities or defects in title which may exist which do not
materially impair the use of such properties in the Borrower's business.
(15) The Borrower will use all of the proceeds of the Bonds to
refund the Prior Obligations.
ARTICLE III
THE LOAN
Section 3.1. Loan Clauses. (A) Subject to the conditions and in
accordance with the terms of this Agreement, the Authority agrees to make a
loan to the Borrower from the proceeds of the Bonds in the amount of
$245,500,000 and the Borrower agrees to borrow such amount from the
Authority.
(B) The loan shall be made at the time of delivery of the Bonds
and receipt of payment therefor by the Authority against receipt by the
Authority of the Note duly executed and delivered to evidence the pecuniary
indebtedness of the Borrower hereunder. As and for the loan the Authority
shall apply the proceeds of the Bonds as provided in the Indenture on the
terms and conditions therein prescribed.
(C) The Borrower shall make payments in immediately available
funds to the Trustee for deposit in the Debt Service Fund no later than
12:00 Noon on the date on which such payment of principal (including
principal called for redemption) of, premium, if any, or interest on Bonds
shall become due in an amount equal to the payment then coming due on such
Bonds less the amounts, if any, (i) then held in the Debt Service Fund and
available to pay the same, and (ii) amounts received by the Paying Agent to
pay the same from a draw under a Credit Facility. The Borrower may make
payments to the Debt Service Fund earlier than required by this section,
but such payments shall not affect the accrual of interest. In addition,
the Borrower shall pay to the Trustee, as and when the same shall become
due, all other amounts due under the Financing Documents, together with
interest thereon at the then applicable rate as set forth herein in Section
6.2(G). The Borrower shall have the option to prepay its loan obligation in
whole or in part at the times and in the manner provided in Article VIII
hereof.
(D) The payments to be made under Section 3.1(C) shall be
appropriately adjusted to reflect the date of issue of Bonds, accrued
interest deposited in the Debt Service Fund, if any, and any purchase or
redemption of Bonds so that there will be available on each payment date
the amount necessary to pay the interest and principal due or coming due on
the Bonds and so that accrued interest will be applied to the installments
of interest to which it is applicable.
(E) At any time when any principal of the Bonds is overdue, the
Borrower shall also have a continuing obligation to pay to the Trustee for
deposit in the Debt Service Fund an amount equal to interest on the overdue
principal but the installment payments required under this section shall
not otherwise bear interest. Redemption premiums shall not bear interest.
(F) The payment obligations of the Borrower in this Section 3.1
are subject in all respects to the provisions of Sections 3.7 and 3.8
hereof regarding the use of Priority Amounts and the effect of drawings
under the Credit Facility.
(G) In the event the Borrower should fail to make any of the
payments required under the foregoing provisions of this Section 3.1, the
item or installment so in default shall continue as an obligation of the
Borrower until the amount in default shall have been fully paid, and the
Borrower agrees to pay or cause to be paid the same with interest thereon
at the rate determined in accordance with Article II of the Indenture until
paid in accordance herewith and with the Indenture.
Section 3.2. Other Amounts Payable. (A) The Borrower hereby further
expressly agrees to pay to the Trustee as and when the same shall become
due, (i) an amount equal to the initial and annual fees of the Trustee for
the ordinary services of the Trustee rendered and its ordinary expenses
incurred under the Indenture, including fees and expenses as Paying Agent
and the fees and expenses of Trustee's counsel, including fees and expenses
as registrar and in connection with preparation and delivery of new Bonds
upon exchanges or transfers, (ii) the reasonable fees and expenses of the
Trustee and any Paying Agents on the Bonds for acting as paying agents as
provided in the Indenture, including fees and expenses of the Paying Agent
as registrar and in connection with the preparation of new Bonds upon
exchanges, transfers or redemptions, (iii) the reasonable fees and expenses
of the Bank and the Remarketing Agent for the performance of their duties
as provided in the Indenture, including the reasonable fees of their
counsel and other expenses the Remarketing Agent may incur in providing for
accurate offering documents in connection therewith, (iv) the reasonable
fees and charges of the Trustee for extraordinary services rendered by it
and extraordinary expenses incurred by it under the Indenture, including
reasonable counsel fees and expenses, and (v) fees and expenses of Bond
Counsel and the Authority for any future action requested of either.
(B) The Borrower also agrees to pay all amounts payable by it
under the Financing Documents at the time and in the manner therein
provided.
Section 3.3. Manner of Payment. The payments provided for in
Section 3.1 hereof shall be made by any reasonable method providing
immediately available funds at the time and place of payment directly to
the Trustee for the account of the Authority and shall be deposited in the
Debt Service Fund. The additional payments provided for in Section 3.2
shall be made in the same manner directly to the entitled party or to the
Trustee for its own use or disbursement to the Paying Agents, as the case
may be.
Section 3.4. Obligation Unconditional. The obligations of the
Borrower under the Financing Documents shall be absolute and unconditional,
irrespective of any defense or any rights of setoff, recoupment or
counterclaim it might otherwise have against the Authority or the Trustee.
The Borrower will not suspend or discontinue any such payment or terminate
this Agreement (other than in the manner provided for hereunder) for any
cause, including, without limiting the generality of the foregoing, any
acts or circumstances that may constitute failure of consideration, failure
of title, or commercial frustration of purpose, or any damage to or
destruction of the Project, or the taking by eminent domain of title to or
the right of temporary use of all or any part of the Project, or any change
in the tax or other laws of the United States, the State or any political
subdivision of either thereof, or any failure of the Authority or the
Trustee to perform and observe any agreement or covenant, whether expressed
or implied, or any duty, liability or obligation arising out of or
connected with the Financing Documents.
Section 3.5. Security Clauses. The Authority hereby notifies the
Borrower and the Borrower acknowledges that, among other things, the
Borrower's loan payments and all of the Authority's right, title and
interest under the Financing Documents to which it is a party (except its
rights under Section 6.2 hereof) are being concurrently with the execution
and delivery hereof endorsed, pledged and assigned without recourse by the
Authority to the Trustee as security for the Bonds as provided in the
Indenture.
Section 3.6. Issuance of Bonds. The Authority has concurrently
with the execution and delivery hereof sold and delivered the Bonds under
and pursuant to a resolution adopted by the Authority on September 8, 1993,
authorizing their issuance under and pursuant to the Indenture. The
proceeds of sale of the Bonds shall be applied as provided in Articles IV
and V of the Indenture.
Section 3.7. Use of Priority Amounts. The Borrower and the
Authority acknowledge their intention to minimize the risk that any payment
made to a Bondowner from amounts provided by or on behalf of the Borrower
may be determined by a bankruptcy court to constitute a preference. To
this end the parties agree that payments to Bondowners on Bonds supported
by a Credit Facility shall be made only from Priority Amounts, except when
and to the extent no Priority Amounts are available for the purpose as
provided in Section 5.8(e) of the Indenture.
Section 3.8. Effect of Drawings Under Credit Facility. The payment
of obligations of the Borrower under this Agreement and the Note with
respect to the Bonds shall be completely satisfied to the extent of all
drawings made under the Credit Facility for the purpose of satisfying such
obligations.
Section 3.9. Effective Date and Term. (A) This Agreement shall
become effective upon its execution and delivery by the parties hereto,
shall remain in full force from such date and, subject to the provisions
hereof (including particularly Articles VII and VIII), shall expire on such
date as the Indenture shall be discharged and satisfied in accordance with
the provisions of subsection 12.1(A) thereof. The Borrower's obligations
under Sections 6.2 and 6.3 hereof, however, shall survive the expiration of
this Agreement.
(B) Within 60 days of such expiration the Authority shall
deliver to the Borrower any documents and take or cause the Trustee, at the
Borrower's expense, to take any such reasonable actions as may be necessary
to effect the cancellation, release and satisfaction of the Indenture and
the Financing Documents.
Section 3.10. Borrower's Purchase of Bonds. Pursuant to Section
5.8(F) of the Indenture, if the amount drawn on the Credit Facility and
deposited with the Paying Agent, together with all other amounts (including
remarketing proceeds) received by the Paying Agent for the purchase of
Bonds supported by a Credit Facility and tendered pursuant to Section
2.3(G)(1)(c) or 2.3(G)(2)(c) or (d) of the Indenture, is not sufficient to
pay the Purchase Price of such Bonds on the Purchase Date, the Paying Agent
shall before 3:30 P.M. on such Purchase Date, notify the Borrower, the
Remarketing Agent and the Trustee of such deficiency by telephone promptly
confirmed in writing. The Borrower shall pay to the Paying Agent in
immediately available funds by 4:00 P.M. on the Purchase Date an amount
equal to the Purchase Price of such Bonds less the amount, if any,
available to pay the Purchase Price in accordance with Section 9.18 of the
Indenture from the proceeds of the remarketing of such Bonds or from
drawings on the Credit Facility, as reported by the Paying Agent. Bonds so
purchased with moneys furnished by the Borrower shall be Borrower Bonds.
Section 3.11. Letter of Credit. The Borrower has arranged,
concurrently with the original issuance and authentication of the Bonds,
for the delivery to the Paying Agent of the Letter of Credit having a term
expiring three years from the date of issuance, and providing for the
Paying Agent to be entitled to draw on or prior to the Termination Date (as
defined therein), an amount that is not less than the sum of the aggregate
principal amount (or that portion of the purchase price corresponding to
principal) of the Outstanding Bonds and the aggregate amount of interest
accrued on such Bonds (or that portion of the purchase price corresponding
to interest).
Section 3.12. Requirements for Delivery of a Substitute Credit
Facility. (A) The Borrower may, upon satisfaction of the requirements set
forth in this Section, at its option (except during the period between the
giving of notice of mandatory tender for purchase on account of the
expiration of the Credit Facility and the Purchase Date), provide for the
delivery to the Paying Agent of a substitute Credit Facility; provided,
however, that (1) the Credit Facility being replaced shall in no event be
terminated or released until the Borrower has given not less than
forty-five (45) days' written notice to the Authority, the Trustee, the
Paying Agent and the Remarketing Agent, and further the Paying Agent has
received the proceeds of all outstanding drawings on the Credit Facility
being replaced, (2) if any Bonds supported by the Credit Facility being
replaced are in the Weekly Mode, the Paying Agent has given not less than
(30) days' written notice of the termination or release of the Credit
Facility to owners of such Bonds in the Weekly Mode and (3) if any of the
Bonds supported by the Credit Facility being replaced are in the Flexible
Mode, such Credit Facility shall in no event be terminated or released
earlier than on the second Business Day after an Effective Date for all
such Bonds or such earlier day on or after such Effective Date on which the
full Purchase Price for such Bonds is received by the Paying Agent. Any
notice given pursuant to clause (1) or (2) above shall specify the
expiration date of the Credit Facility and the name of the entity providing
the substitute Credit Facility and shall advise that the Credit Facility
will terminate on the date stated in such notice.
(B) Each Credit Facility must:
(i) be an irrevocable, unconditional obligation of a
financial institution;
(ii) be on terms no less favorable to the Paying Agent
than the Letter of Credit and entitle the Paying Agent to draw upon or
demand payment and receive in immediately available funds an amount equal
to the sum of the principal amount of the Bonds supported by the Credit
Facility, any premium applicable thereto, and (A) forty-five (45) days'
accrued interest at the Maximum Interest Rate on the principal amount of
Bonds then Outstanding in the Weekly Mode, or (B) thirty-eight (38) days'
accrued interest at the Maximum Interest Rate on the principal amount of
Bonds then Outstanding in the Flexible Mode; and (iii) provide for a term
which may not expire in less than 360 days and which may not expire or be
terminated prior to the fifth Business Day after the mandatory tender for
purchase as provided in Section 2.3(G)(1)(c) or 2.3(G)(2)(d) of
theIndenture. The Borrower shall not enter into any Reimbursement
Agreement or agree to any amendment of a Reimbursement Agreement which in
any way limits the obligation of the Bank to provide funds under the
Credit Facility without the prior written consent of 100% of the principal
amount of the Bonds Outstanding and entitled to the benefit thereof.
(C) No substitute Credit Facility may be delivered to the Trustee for
any purpose under this Agreement or the Indenture unless accompanied by the
following documents: (i) an opinion of counsel for the issuer of the
substitute Credit Facility to the effect that it constitutes a legal, valid
and binding obligation of the issuer enforceable in accordance with its
terms; (ii) an opinion of Bond Counsel to the effect that the issuance of a
substitute Credit Facility will not adversely affect the exclusion of
interest on the Bonds from gross income for federal income tax purposes and
that such Credit Facility is permitted under the Indenture; (iii) an
opinion of counsel to the Borrower, satisfactory to the Trustee stating
that the delivery of such substitute Credit Facility is authorized under
this Agreement and complies with the terms hereof; (iv) a certificate of
the Bank that all amounts due under the Reimbursement Agreement have been
paid and that the Company has fulfilled all its obligations arising out of
such Agreement; (v) an executed copy of the Reimbursement Agreement entered
into with respect to the substitute Credit Facility; (vi) copies of any
other documents, agreements or arrangements entered into directly or
indirectly between the Borrower and the entity issuing the substitute
Credit Facility with respect to the transactions contemplated by the
substitute Credit Facility and related Reimbursement Agreement; and (vii)
such other documents and opinions as the Trustee or the Authority may
reasonably request. Notice of the substitution, replacement, termination
or extension of a Credit Facility shall be sent by the Paying Agent to
Moody's and S&P and shall include the new expiration date of the Credit
Facility and the name of the entity providing the substitute Credit
Facility.
The substitute Credit Facility, related Reimbursement Agreement
and other documents, agreements and arrangements entered into and delivered
with respect to the delivery of a substitute Credit Facility shall not
include any provisions less favorable to the owners of the Bonds than the
provisions of the Credit Facility and related Reimbursement Agreement,
documents, agreements and arrangements, including provisions regarding the
acceleration of the Bonds, any right of setoff of assets of the account
party by the entity issuing the substitute Credit Facility, and any direct
or indirect pledge of collateral which is not pledged on a priority or
parity basis to the owners of the Bonds.
Section 3.13. Securities Laws. In any remarketing of Bonds under
this Agreement, the Borrower shall at all times comply with applicable
federal and state securities laws.
Section 3.14. New York Paying Agent. The Borrower agrees that if
at any time it becomes necessary or desirable to have a Paying Agent
capable of performing in New York, New York, it shall remove Shawmut Bank
Connecticut, National Association as Paying Agent and a successor shall be
appointed pursuant to Section 9.11 of the Indenture.
ARTICLE IV
THE PROJECT
Section 4.1. Completion of the Project. (A) The Borrower represents
and warrants that the Project has been completed.
(B) The Borrower affirms that it shall bear all of the costs
and expenses in connection with the preparation of the Financing Documents
and the Indenture, the preparation and delivery of any legal instruments
and documents necessary in connection therewith and their filing and
recording, if required, and all taxes and charges payable in connection
with any of the foregoing. Such costs and all other costs of the Project
shall be paid by the Borrower or from the Refunding Fund in the manner and
to the extent provided in the Indenture.
Section 4.2. No Warranty Regarding Condition, Suitability or Cost
of Project. Neither the Authority, nor the Trustee, nor any Bondholder
makes any warranty, either expressed or implied, as to the Project or its
condition or that it will be suitable for the Borrower's purposes or needs,
or that the insurance required hereunder will be adequate to protect the
Borrower's business or interest, or that the proceeds of the Bonds will be
sufficient to refund the Prior Obligations.
Section 4.3. Taxes. (A) The Borrower will pay when due all material
(1) taxes, assessments, water rates and sewer use or rental charges, (2)
payments in lieu thereof which may be required by law, and (3) governmental
charges and impositions of any kind whatsoever which may now or hereafter
be lawfully assessed or levied upon the Project or any part thereof, or
upon the rents, issues, or profits thereof, whether directly or indirectly.
With respect to special assessments or other governmental charges that may
lawfully be paid in installments over a period of years, the Borrower shall
be obligated to pay only such installments as are required to be paid
during the Term.
(B) The Borrower may, at its expense and in its own name, in
good faith contest any such taxes, assessments and other charges and
payments in lieu of taxes including assessments and, in the event of such
contest, may permit the taxes, assessments or other charges or payments in
lieu of taxes, including assessments so contested to remain unpaid,
provided prior written notice thereof has been given to the Trustee and
reserves to the extent required by the Reimbursement Agreement are
maintained, during the period of such contest and any appeal therefrom.
Nothing herein shall preclude the Borrower, at its expense and in its own
name and behalf, from applying for any tax exemption allowed by the federal
government, the State or any political or taxing subdivision thereof under
any existing or future provision of law which grants or may grant such tax
exemption.
Section 4.4. Insurance. (A) The Borrower shall insure the Project
against loss or damage by fire, flood, lightning, windstorm, vandalism and
malicious mischief and other hazards, casualties, contingencies and
extended coverage risks in such amounts and in such manner as is required
by applicable federal or state law and shall pay when due the premiums
thereon.
(B) The Borrower further agrees that it will at all times carry
public liability insurance with respect to the Project to the extent
required by applicable federal or state law.
(C) As an alternative to the hazard insurance and public
liability insurance requirements of subsections (A) or (B) above the
Borrower may self-insure against hazard or public liability risks.
(D) The insurance coverage required by this Section may be
effected under overall blanket or excess coverage policies of the Borrower
or any affiliate and may be carried with any insurer other than an
unauthorized insurer under the Connecticut Unauthorized Insurers Act. The
Borrower shall furnish evidence satisfactory to the Authority or the
Trustee, promptly upon the request of either, that the required insurance
coverage is valid and in force.
Section 4.5. Compliance with Law. The Borrower will observe and
comply with all material laws, regulations, ordinances, rules, and orders
(including without limitation those relating to zoning, land use,
environmental protection, air, water and land pollution, wetlands, health,
equal opportunity, minimum wages, worker's compensation and employment
practices) of any federal, state, municipal or other governmental authority
relating to the Project except during any period during which the Borrower
at its expense and in its name shall be in good faith contesting its
obligation to comply therewith.
Section 4.6. Maintenance and Repair. At its own expense, the
Borrower will keep and maintain or cause the Project to be kept and
maintained in accordance with sound utility operating practice and in good
condition, working order and repair, will not commit or suffer any waste
thereon, and will make all material repairs and replacements thereto which
may be required in connection therewith. Nothing in this Section 4.6 shall
(1) apply to any portion of the Project beyond its useful or economic life
or (2) apply to the use and disposition by the Borrower of any part of the
Project in the ordinary course of its business.
ARTICLE V
CONDEMNATION
DAMAGE AND DESTRUCTION
Section 5.1. No Abatement of Payments Hereunder. If the Project
shall be damaged or either partially or totally destroyed, or if title to
or the temporary use of the whole or any part thereof shall be taken or
condemned by a competent authority for any public use or purpose, there
shall be no abatement or reduction in the amounts payable by the Borrower
hereunder and the Borrower shall continue to be obligated to make such
payments. In any such case the Borrower shall promptly give written notice
thereof to the Authority and the Trustee.
Section 5.2. Project Disposition Upon Condemnation, Damage or
Destruction. In the event of any such condemnation, damage or destruction
the Borrower shall:
(1) Comply with the applicable provisions of the Mortgage
Indentures and the Sharing Agreement concerning the repair,
reconstruction or restoration of the Project or give notice to the
Authority of its decision not to so comply; and/or
(2) If and as permitted by Section 8.1 hereof, exercise its
option to prepay its loan obligation in full.
Section 5.3. Application of Net Proceeds of Insurance or
Condemnation. The Net Proceeds from any insurance or condemnation award
with respect to the Project shall be applied as provided in the Mortgage
Indentures, or, in the event that the Mortgage Indentures have been
discharged or are no longer in effect, shall be applied at the direction of
the Borrower with the approval of the Authority.
ARTICLE VI
COVENANTS
Section 6.1. The Borrower to Maintain its Corporate Existence;
Conditions under which Exceptions Permitted. (A) The Borrower covenants and
agrees that, during the Term of this Agreement it will maintain its
corporate existence, will continue to be a corporation either organized
under the laws of or duly qualified to do business as a foreign corporation
in the State and in all jurisdictions necessary in the operation of its
business, will not dissolve or otherwise dispose of all or substantially
all of its assets and will not consolidate with or merge into another
corporation or permit one or more other corporations to consolidate with or
merge into it.
(B) The Borrower may, however, without violating the agreements
contained in this Section, consolidate with or merge into another
corporation or permit one or more other corporations to consolidate with or
merge into it, or sell or otherwise transfer to another corporation all or
substantially all of its assets as an entity and thereafter liquidate or
dissolve, if (a) the Borrower is the surviving, resulting or transferee
corporation, as the case may be, or (b) in the event the Borrower is not
the surviving, resulting or transferee corporation, as the case may be,
such corporation (i) is a solvent corporation either organized under the
laws of or duly qualified to do business as a foreign corporation subject
to service of process in the State and (ii) assumes in writing all of the
obligations of the Borrower herein, and under the Note.
Section 6.2. Indemnification, Payment of Expenses, and Advances.
(A) The Borrower agrees to protect, defend and hold harmless the Trustee,
the Paying Agent, the Authority, the State, agencies of the State and the
members, servants, agents, officers, employees and directors of the
Trustee, the Paying Agent, the Authority or the State (the "Indemnified
Parties"), from any claim, demand, suit, action or other proceeding and any
liabilities, costs, and expenses whatsoever by any person or entity
whatsoever, arising or purportedly arising from or in connection with the
Financing Documents, the Indenture, the Bonds, or the transactions
contemplated thereby or actions taken thereunder by any person (including
without limitation the filing of any information, form or statement with
the Internal Revenue Service), except for any wilful and material
misrepresentation, wilful misconduct or gross negligence on the part of the
Indemnified Parties and except for any bad faith on the part of any
Indemnified Party other than the Authority.
The Borrower agrees to indemnify and hold harmless any Indemnified
Party against any and all claims, demands, suits, actions or other
proceedings and all liabilities, costs and expenses whatsoever caused by
any untrue statement or misleading statement or alleged untrue statement or
alleged misleading statement of a material fact contained in the written
information provided by the Borrower in connection with the issuance of the
Bonds or incorporated by reference therein or caused by any omission or
alleged omission from such information of any material fact required to be
stated therein or necessary in order to make the statements made therein in
the light of the circumstances under which they were made, not misleading.
(B) The Authority and the Trustee shall not be liable for any
damage or injury to the persons or property of the Borrower or its members,
directors, officers, agents, servants or employees, or any other person who
may be about the Project due to any act or omission of any person other
than the Authority or the Trustee or their respective members, directors,
officers, agents, servants and employees.
(C) The Borrower releases each Indemnified Party from, agrees
that no Indemnified Party shall be liable for, and agrees to hold each
Indemnified Party harmless against, any attorney fees and expenses,
expenses or damages incurred because of any investigation, review or
lawsuit commenced by the Trustee or the Authority in good faith with
respect to the Financing Documents, the Indenture, the Bonds and the
Project Realty and the Project Equipment, and the Authority or the Trustee
shall promptly give written notice to the Borrower with respect thereto.
(D) All covenants, stipulations, promises, agreements and
obligations of the Authority and the Trustee contained herein shall be
deemed to be the covenants, stipulations, promises, agreements and
obligations of the Authority and the Trustee and not of any member,
director, officer or employee of the Authority or the Trustee in its
individual capacity, and no recourse shall be had for the payment of the
Bonds or for any claim based thereon or hereunder against any member,
director, officer or employee of the Authority or the Trustee or any
natural person executing the Bonds.
(E) In case any action shall be brought against one or more of
the Indemnified Parties based upon any of the above and in respect of which
indemnity may be sought against the Borrower, such Indemnified Party shall
promptly notify the Borrower in writing, enclosing a copy of all papers
served, but the omission so to notify the Borrower of any such action shall
not relieve it of any liability which it may have to any Indemnified Party
otherwise than under this Section 6.2. In case any such action shall be
brought against any Indemnified Party and it shall notify the Borrower of
the commencement thereof, the Borrower shall be entitled to participate in
and, to the extent that it shall wish, to assume the defense thereof with
counsel satisfactory to such Indemnified Party, and after notice from the
Borrower to such Indemnified Party of the Borrower's election so to assume
the defense thereof, the Borrower shall not be liable to such Indemnified
Party for any subsequent legal or other expenses attributable to such
defense, except as set forth below, other than reasonable costs of
investigation subsequently incurred by such Indemnified Party in connection
with the defense thereof. The Indemnified Party shall have the right to
employ its own counsel in any such action, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Party unless (i)
the employment of counsel by such Indemnified Party has been authorized by
the Borrower; (ii) the Indemnified Party shall have reasonably concluded
that there may be a conflict of interest between the Borrower and the
Indemnified Party in the conduct of the defense of such action (in which
case the Borrower shall not have the right to direct the defense of such
action on behalf of the Indemnified Party); or (iii) the Borrower shall not
in fact have employed counsel reasonably satisfactory to the Indemnified
Party to assume defense of such action; provided, however, that Borrower
shall not be responsible for the fees and expenses of more than one such
law firm unless an Indemnified Party shall have reasonably concluded that
there may be a conflict of interest between such Indemnified Party and any
other Indemnified Party requiring the use of separate counsel, or Borrower
has not employed counsel which is satisfactory to each Indemnified Party.
The Borrower shall not be liable for any settlement of any action or claim
effected without its consent.
(F) The Borrower also agrees to pay all reasonable or necessary
out-of-pocket expenses of the Authority in connection with the issuance of
the Bonds, the administration of the Financing Documents and the
enforcement of its rights thereunder.
(G) In the event the Borrower fails to pay any amount or
perform any act under the Financing Documents, the Trustee or the Authority
may pay the amount or perform the act, in which event the costs,
disbursements, expenses and reasonable counsel fees and expenses thereof,
together with interest thereon from the date the expense is paid or
incurred at the prime interest rate generally prevailing among banks in the
State on the date of the advance plus 1% shall be an additional obligation
hereunder payable upon demand by the Authority or the Trustee.
(H) Any obligation of the Borrower to the Authority under this
Section shall be separate from and independent of the other obligations of
the Borrower hereunder, and may be enforced directly by the Authority
against the Borrower irrespective of any action taken by or on behalf of
the owners of the Bonds.
(I) The obligations of the Borrower under this section,
notwithstanding any other provisions contained in the Financing Documents,
shall survive the termination of this Agreement and shall be recourse to
the Borrower, and for the enforcement thereof any Indemnified Party shall
have recourse to the general credit of the Borrower.
Section 6.3. Incorporation of Tax Regulatory Agreement; Payments
Upon Taxability. (A) For purpose of this Section, the term owner means the
Beneficial Owner of the Bonds so long as the Book-Entry System is in
effect.
(B) The representations, warranties, covenants and statements
of expectation of the Borrower set forth in the Tax Regulatory Agreement
are by this reference incorporated in this Agreement as though fully set
forth herein.
(C) If any owner of the Bonds receives from the Internal
Revenue Service a notice of assessment and demand for payment with respect
to interest on any Bond (except a notice and demand based upon the
assertion that the owner of the Bonds is a Substantial User or Related
Person), an appeal may be taken by the owner of the Bonds at the option of
the Borrower. Without limiting the generality of the foregoing, the
Borrower shall have the right to direct the Trustee to direct the owner of
the Bonds to take such appeal or not to take such appeal. In either case
all expenses of the appeal including reasonable counsel fees and expenses
shall be paid by the Borrower, and the owner of the Bonds and the Borrower
shall cooperate and consult with each other in all matters pertaining to
any such appeal, except that no owner of the Bonds shall be required to
disclose or furnish any non-publicly disclosed information, including,
without limitation, financial information and tax returns.
(D) Not later than 90 days following a Determination of
Taxability, the Borrower shall pay to the Trustee an amount sufficient,
when added to the amount then in the Debt Service Fund and available for
such purpose, to retire and redeem all Bonds then Outstanding, in
accordance with Section 2.4 of the Indenture.
(E) The obligation of the Borrower to make the payments
provided for in this Section shall be absolute and unconditional, and the
failure of the Authority or the Trustee to execute or deliver or cause to
be executed or delivered any documents or to take any action required under
this Agreement or otherwise shall not relieve the Borrower of its
obligation under this Section. Notwithstanding any other provision of this
Agreement or the Indenture, the Borrower's obligations under this Section
shall survive the termination of this Agreement and the Indenture.
(F) The Borrower's payment obligations under this Section are
further subject in all respects to the provisions of Section 3.7 and 3.8
hereof regarding the use of Priority Amounts and the effect of drawings
under the Letter of Credit.
(G) The occurrence of a Determination of Taxability shall not
be an Event of Default hereunder but shall require only the performance of
the obligations of the Borrower stated in this Section, the breach of which
shall constitute an Event of Default as provided in Section 7.1 hereof.
(H) At any time after the issuance of the Bonds, the Authority
shall, upon (1) the release of a published Revenue Ruling by the Internal
Revenue Service and the receipt by the Authority of an opinion of Bond
Counsel to the effect that such ruling may adversely affect the exclusion
of interest on the Bonds from gross income for federal income tax purposes,
and (2) receipt from the Borrower, within 30 days after the Authority has
mailed copies of such ruling and such opinion to the Borrower, of a written
request to proceed in accordance with this Section, proceed to apply for
and use its best efforts to obtain a ruling from the Internal Revenue
Service, pursuant to Revenue Procedure 88-33 or any other procedures
subsequently established by the Internal Revenue Service, as to the
qualification or continued qualification of interest on the Bonds for
exclusion from gross income for federal income tax purposes. The Authority
and the Borrower shall cooperate and consult with each other in all matters
pertaining to such ruling request. All expenses of the Authority in
connection with such application including reasonable counsel fees shall be
paid by the Borrower.
Section 6.4. Covenant as to Project Use. (A) The Borrower agrees
that it shall promptly notify the Authority and the Trustee upon the
occurrence of any of the following events, in each case, whether as a
result of a determination by the Borrower, the Connecticut Department of
Public Utility Control or the United States Nuclear Regulatory Commission
or its successors,
(1) Abandonment of a substantial portion of the Project
at any one time or in the aggregate;
(2) Any disposition of all or any part of the Borrower's
ownership interest in the Project other than (i) to a company which is part
of Northeast Utilities, (ii) in connection with a merger, consolidation, or
sale of assets permitted by Section 6.1(B) hereof, (iii) in connection with
any form of financing (including without limitation the grant of a mortgage
or security interest or sale in connectin with a sale and lease back) by
the Borrower, (iv) in any case in which the remaining aggregate ownership
interest of Northeast Utilities is greater than 50 percent, (v) of any
portion of the Project beyond its useful or economic life, or (vi) in the
ordinary course of the Borrower's business. For purposes of this
paragraph, "Northeast Utilities" means Northeast Utilities, its
subsidiaries (whether direct or indirect) and their successors and assigns;
or (3) Any determination, following damage or destruction of all or
substantially all of the Project, not to repair, reconstruct, relocate or
replace the Project.
(B) In the event that the Authority receives notice from
the Borrower of the occurrence of any event described in subsection (A) of
this Section 6.4, the Borrower agrees that the Authority may, not later
than one year after the receipt of such notice from the Borrower, declare
that payment of all amounts due under the Financing Documents shall be
accelerated by notice to the Borrower and the Trustee stating that such
amounts are due and payable by the Borrower in full on a date selected by
the Borrower and set forth in a notice to the Trustee and the Authority,
which date shall be not later than three years from the date of mailing of
the Authority's acceleration notice to the Borrower.
(C) Any failure of the Borrower to comply with the
provisions of this Section shall be subject to the provisions of Section
7.3 hereof.
Section 6.5. Further Assurances and Corrective Instruments. The
Authority and the Borrower agree that they will, from time to time,
execute, acknowledge and deliver, or cause to be executed, acknowledged and
delivered, such supplements hereto and such further instruments as may
reasonably be required for correcting any inadequate or incorrect
description of the Project Realty or Project Equipment or for carrying out
the intention of or facilitating the performance of this Agreement.
Section 6.6. Covenant by Borrower as to Compliance with Indenture.
The Borrower covenants and agrees that it will comply with the provisions
of the Indenture with respect to the Borrower and that the Trustee and the
Bondholders shall have the power and authority provided in the Indenture.
The Borrower further agrees to aid in the furnishing to the Authority or
the Trustee of opinions that may be required under the Indenture. The
Borrower covenants and agrees that the Trustee shall be entitled to and
shall have all the rights, including the right to enforce against the
Borrower the provisions of the Financing Documents, pertaining to the
Trustee notwithstanding the fact that the Trustee is not a party to the
Financing Documents.
Section 6.7. Assignment of Agreement or Note. (A) The Borrower may
not assign its rights, interests or obligations hereunder or under the Note
except as may be permitted pursuant to Section 6.1(B) hereof.
(B) The Authority agrees that it will not assign or transfer
any of the Financing Documents or the revenues and other receipts, funds
and monies to be received thereunder during the Term except to the Trustee
as provided in this Agreement and the Indenture.
Section 6.8. Inspection. The Authority, the Trustee and their duly
authorized agents shall have (1) the right at all reasonable times to enter
upon and to examine and inspect the Project and (2) such rights of access
thereto as may be reasonably necessary for the proper maintenance and
repair thereof in the event of failure by the Borrower to perform its
obligations under this Agreement, subject, in each case, to all applicable
laws, rules, regulations, orders and guidelines. The Authority and the
Trustee shall also be permitted, at all reasonable times, to examine the
books and records of the Borrower with respect to the Project.
Section 6.9. Default Notification. Within seven (7) days after
becoming aware of any condition or event which constitutes, or with the
giving of notice or the passage of time would constitute, an Event of
Default or an "Event of Default" under Section 8.1 of the Indenture, the
Borrower shall deliver to the Authority, the Bank, if any, the Remarketing
Agent, the Paying Agent and the Trustee a notice stating the existence and
nature thereof and specifying the corrective steps, if any, the Borrower
is taking with respect thereto.
Section 6.10. Covenant Against Discrimination. (A) The Borrower in
the performance of this Agreement will not discriminate or permit
discrimination against any person or group of persons on the grounds of
race, color, religion, national origin, age, sex, sexual orientation,
marital status, physical or learning disability, political beliefs, mental
retardation or history of mental disorder in any manner prohibited by the
laws of the United States or of the State.
(B) The Borrower will comply with the provisions of the
resolution adopted by the Authority on June 14, 1977, as amended, and the
policy of the Authority implemented pursuant thereto concerning the
promotion of equal employment opportunity through affirmative action plans.
The resolution requires that all borrowers receiving financial assistance
from the Authority adopt and implement an affirmative action plan prior to
the closing of the loan. The plan shall be updated annually as long as the
Bonds remain Outstanding.
Section 6.11. Authority Costs and Expenses. The Authority agrees
that it shall in all instances act in good faith in incurring costs,
expenses and legal fees in connection with the transactions contemplated by
this Agreement and the Indenture.
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.1. Events of Default. Any one or more of the following
shall constitute an "Event of Default" hereunder:
(1) Any material representation or warranty made by the
Borrower in the Financing Documents or any certificate, statement, data or
information furnished in writing to the Authority or the Trustee by the
Borrower in connection with the closing of the initial issue of the Bonds
or included by the Borrower in its application to the Authority for
assistance proves at any time to have been incorrect when made in any
material respect.
(2) Failure by the Borrower to pay any amount that has become
due and payable with respect to the Bonds or any other amount due and
payable pursuant to the Financing Documents and the continuance of such
failure for more than five Business Days.
(3) Failure by the Borrower to comply with the default
notification provisions of Section 6.9 hereof.
(4) The occurrence of an "Event of Default" under Section
8.1(A) of the Indenture (other than an occurrence under Section
8.1(A)(2)(a)).
(5) Failure by the Borrower to observe or perform any covenant,
condition or agreement hereunder or under the Financing Documents (except
those referred to above) and (a) continuance of such failure for a period
of sixty days after receipt by the Borrower of written notice specifying
the nature of such failure or
(b) if by reason of the nature of such failure the same cannot be
remedied within the sixty day period, the Borrower fails to proceed
with reasonable diligence after receipt of the notice to cure the
failure.
(6) The Borrower shall
(a) apply for or consent to the appointment of a receiver, trustee,
liquidator or custodian or the like of itself or of its property, (b) admit
in writing its inability to pay its debts generally as they become due, (c)
make a general assignment for the benefit of creditors, (d) be adjudicated
a bankrupt or insolvent, or (e) commence a voluntary case under the Federal
bankruptcy laws of the United States of America or file a voluntary
petition or answer seeking reorganization, an arrangement with creditors or
an order for relief or seeking to take advantage of any insolvency law or
file an answer admitting the material allegations of a petition filed
against it in any bankruptcy, reorganization or insolvency proceeding; or
corporate action shall be taken by it for the purpose of effecting any of
the foregoing; or if without the application, approval or consent of the
Borrower, a proceeding shall be instituted in any court of competent
jurisdiction, seeking in respect of the Borrower an adjudication in
bankruptcy, reorganization, dissolution, winding up, liquidation, a
composition or arrangement with creditors, a readjustment of debts, the
appointment of a trustee, receiver, liquidator or custodian or the like of
the Borrower or of all or any substantial part of its assets, or other like
relief in respect thereof under any bankruptcy or insolvency law, and, if
such proceeding is being contested by the Borrower in good faith, the same
shall continue undismissed, or pending and unstayed, for any period of 90
consecutive days.
Section 7.2. Remedies on Default. (A) Whenever any Event of Default
shall have occurred, the Trustee, or the Authority where so provided
herein, may take any one or more of the following actions:
(1) The Trustee, as and to the extent provided in Article VIII
of the Indenture, may cause all amounts payable under the Financing,
Documents to be immediately due and payable without notice or demand of any
kind, whereupon the same shall become immediately due and payable.
(2) The Authority, without the consent of the Trustee or any
Bondholder, may proceed to enforce the obligations of the Borrower to the
Authority under this Agreement.
(3) The Trustee may take whatever action at law or in equity
it may have to collect the amounts then due and thereafter to become due,
or to enforce the performance or observance of the obligations, agreements,
and covenants of the Borrower under theFinancing Documents.
(B) In the event that any Event of Default or any proceeding
taken by the Authority (or by the Trustee on behalf of the Authority)
thereon shall be waived or determined adversely to the Authority, then the
Event of Default shall be annulled and the Authority and the Borrower shall
be restored to their former rights hereunder, but no such waiver or
determination shall extend to any subsequent or other default or impair any
right consequent thereon.
Section 7.3 Remedies Upon Project Use Default. (A) If the
Borrower shall fail to notify the Authority of the occurrence of any event
set forth in Section 6.4(A) hereof within 60 days of the determination
thereof as provided in Section 6.4(A), the Authority may, not later than
one year after obtaining knowledge of such determination and so long as
such failure is continuing, send a notice to the Trustee and the Borrower
calling for the acceleration of all of the Borrower's obligations under the
Financing Documents and for the redemption of all of the Bonds Outstanding.
Any such notice (i) shall set forth in reasonable detail the event giving
rise to the Borrower's obligation under Section 6.4(A), (ii) shall be
accompanied by such evidence thereof as shall be acceptable to the Trustee,
and (iii) shall specify the dates upon which (a) notice of redemption of
the Bonds is to be given by the Trustee (which shall not be less than 180
days from the date of the notice being given to the Trustee by the
Authority) and (b) the date redemption of Bonds is to occur (which shall be
a date at least thirty days after notice of redemption is to be given by
the Trustee).
(B) If, after receipt of notice from the Authority as
provided in Section 6.4(B), the Borrower shall fail to select a date for
redemption of all Outstanding Bonds, the Authority may, not earlier than 60
days prior to the date which is three years after the date notice was
mailed to the Borrower as provided in Section 6.4(B), send a notice to the
Trustee and the Borrower calling for the redemption of all of the Bonds
then Outstanding. Any such notice shall specify the date that notice of
redemption is to be given by the Trustee and the date that such redemption
is to occur.
(C) On or before the redemption date specified by the
Trustee in its notice of redemption pursuant to this Section, the Borrower
shall pay, as a final loan payment hereunder, a sum sufficient, together
with other funds on deposit with the Trustee and available for such
purpose, to redeem all Bonds then Outstanding under the Indenture at 100%
of the principal amount thereof plus accrued interest to the redemption
date. The Borrower shall also pay or provide for all reasonable and
necessary fees of the Trustee and any Paying Agent accrued and to accrue
through the date of redemption of the Bonds and all other amounts due or to
become due under the Financing Documents.
Section 7.4. No Duty to Mitigate Damages. Unless otherwise
required by law, neither the Authority, the Trustee nor any Bondholder
shall be obligated to do any act whatsoever or exercise any diligence
whatsoever to mitigate the damages to the Borrower if an Event of Default
shall occur.
Section 7.5. Remedies Cumulative. No remedy herein conferred upon
or reserved to the Authority or the Trustee is intended to be exclusive of
any other available remedy or remedies but each and every such remedy shall
be cumulative and shall be in addition to every remedy given under this
Agreement or now or hereafter existing at law or in equity or by statute.
Delay or omission to exercise any right or power accruing upon any default
or failure by the Authority or the Trustee to insist upon the strict
performance of any of the covenants and agreements herein set forth or to
exercise any rights or remedies upon default by the Borrower hereunder
shall not impair any such right or power or be considered or taken as a
waiver or relinquishment for the future of the right to insist upon and to
enforce, by injunction or other appropriate legal or equitable remedy,
strict compliance by the Borrower with all of the covenants and conditions
hereof, or of the right to exercise any such rights or remedies, if such
default by the Borrower be continued or repeated.
ARTICLE VIII
PREPAYMENT PROVISIONS
Section 8.1. Optional Prepayment. (A) The Borrower shall have, and
is hereby granted, the option to prepay its loan obligation and to cause
the corresponding optional redemption of the Bonds pursuant to Section
2.4(A) of the Indenture at such times, in such amounts, and with such
premium, if any, for such optional redemption as set forth in the forms of
the Bonds, by delivering a written notice to the Trustee in accordance with
Section 8.2 hereof, with a copy to the Authority, setting forth the amount
to be prepaid, the amount of Bonds requested to be redeemed with the
proceeds of such prepayment, and the date on which such Bonds are to be
redeemed. Such prepayment must be sufficient to provide monies for the
payment of interest and Redemption Price in accordance with the terms of
the Bonds requested to be redeemed with such prepayment and all other
amounts then due under the Financing Documents. In the event of any
complete prepayment of its loan obligation, the Borrower shall, at the time
of such prepayment, also pay or provide for the payment of all reasonable
or necessary fees and expenses of the Authority, the Trustee and the Paying
Agent accrued and to accrue through the final payment of all the Bonds.
Any such prepayments shall be applied to the redemption of Bonds in the
manner provided in Section 2.4(A) of the Indenture, and credited against
payments due hereunder in the same manner.
(B) The Borrower shall have, and is hereby granted, the option
to prepay its loan obligation in full at any time without premium if any of
the following events shall have occurred, as evidenced in each case by the
filing with the Trustee of a certificate of an Authorized Representative of
the Borrower to the effect that one of such events has occurred and is
continuing, and describing the same:
(1) Damage or destruction to any of the Plants or the Project
to such extent that in the opinion of the Borrower (expressed in a
resolution adopted by the Board of Directors of the Borrower (a "Board
Resolution")) and of an architect or engineer acceptable to the Borrower
(who may be an employee of the Borrower), both filed with the Authority and
the Trustee, (1) any of the Plants or the Project, as the case may be,
cannot be reasonably repaired, rebuilt, or restored within a period of six
(6) months to their condition immediately preceding such damage or
destruction, or (2) normal operations are thereby prevented from being
carried on at any of the Plants for a period of not less than six (6)
months.
(2) Loss of title to or use of a substantial part of any of
the Plants or the Project as a result of the exercise of the power of
eminent domain which, in the opinion of the Borrower (expressed in a Board
Resolution) and of an architect or engineer acceptable to the Borrower (who
may be an employee of the Borrower), both filed with the Authority and the
Trustee, prevents or is likely to prevent normal operations from being
carried on at any of the Plants for a period of not less than six (6)
months.
(3) A substantial part of any of the Plants or the Project
shall become obsolete in the opinion of the Borrower (expressed in a
Board Resolution).
(4) A change in the Constitution of the State of Connecticut
or of the United States of America or legislative or executive action
(whether local, state, or federal) or a final decree, judgment or order of
any court or administrative body (whether local, state, or federal) that
causes this Agreement to become void or unenforceable or impossible of
performance in accordance with the intent and purpose of the parties as
expressed herein or, imposes unreasonable burdens or excessive liabilities
upon the Borrower with respect to any of the Plants or the Project or the
operation thereof.
(5) The operation of any of the Plants or the Project shall
have been enjoined or shall otherwise have been prohibited by any order,
decree, rule or regulation of any court or of any local, state, or federal
regulatory body, administrative agency or other governmental body for a
period of not less than six (6) months.
(6) Changes which the Borrower cannot reasonably control in
the economic availability of fuel, materials, supplies, labor, equipment,
or other properties or things necessary for the efficient operation of any
of the Plants or the Project shall have occurred which, in the judgment of
the Borrower (expressed in a Board Resolution), render the continued
operation of any of the Plants uneconomical. In any such case the final
loan payment shall be a sum sufficient, together with other funds deposited
with Trustee and available for such purpose, to redeem all Bonds then
outstanding under the Indenture at the redemption price of 100% of the
principal amount thereof plus accrued interest to the redemption date or
dates and all other amounts then due under the Financing Documents, and the
Borrower shall also pay or provide for all reasonable or necessary fees and
expenses of the Trustee and Paying Agent and the Remarketing Agent accrued
and to accrue through final payment for the Bonds. The Borrower shall
deliver a written notice to the Trustee, with a copy to the Authority,
requesting the redemption of the Bonds under the Indenture, which notice
shall have attached thereto the applicable certificate of the Authorized
Representative of the Borrower. The Borrower's right to so request the
redemption of the Bonds upon the occurrence of any single event listed in
this Section 8.1(B) shall expire six (6) months, and any such redemption
shall occur within nine (9) months, after such event occurs.
Section 8.2. Notice by the Borrower of Optional Prepayment. The
Borrower shall exercise its option to prepay its loan obligation pursuant
to Section 8.1(A) or (B) by giving written notice signed by an Authorized
Representative of the Borrower to the Trustee, the Authority, the Paying
Agent, and the Remarketing Agent at least five (5) days before the
prepayment date if Bonds to be redeemed with the amounts to prepaid
pursuant to the Indenture are then in the Flexible Mode, and forty-five
(45) days before the prepayment date if Bonds to be redeemed with the
amounts so prepaid pursuant to the Indenture are then in any other Mode.
Section 8.3. Mandatory Prepayment on Taxability. The Borrower
shall pay or cause the prepayment of its loan obligation following a
Determination of Taxability in the manner provided in Section 6.3 of this
Agreement.
Section 8.4. Mandatory Prepayment Upon Occurrence of Certain
Events. The Borrower shall pay or cause the prepayment of its loan
obligation, prior to the maturity of the Bonds, on a date selected by the
Borrower, which date shall be not later than three years after the date of
mailing to the Borrower of notice from the Authority of the Authority's
election to accelerate the Borrower's loan obligation hereunder as provided
in Sections 6.4 and 7.3 hereof.
ARTICLE IX
GENERAL
Section 9.1. Indenture. (A) Monies received from the sale of the
Bonds and all loan payments made by the Borrower and all other monies
received by the Authority or the Trustee under the Financing Documents
shall be applied solely and exclusively in the manner and for the purposes
expressed and specified in the Indenture and in the Bonds and as provided
in this Agreement.
(B) The Borrower shall have and may exercise all the rights,
powers and authority given the Borrower in the Indenture and in the Bonds,
and the Indenture and the Bonds shall not be modified, altered or amended
in any manner which adversely affects such rights, powers and authority or
otherwise adversely affects the Borrower without the prior written consent
of the Borrower.
Section 9.2. Benefit of and Enforcement by Bondholders. The
Authority and the Borrower agree that this Agreement is executed in part to
induce the purchase by others of the Bonds and for the further securing of
the Bonds, and accordingly that all covenants and agreements on the part of
the Authority and the Borrower as to the amounts payable with respect to
the Bonds hereunder are hereby declared to be for the benefit of the
holders from time to time of the Bonds and may be enforced as provided in
the Indenture on behalf of the Bondholders by the Trustee.
Section 9.3. Force Majeure. In case by reason of force majeure
either party hereto shall be rendered unable wholly or in part to carry out
its obligations under this Agreement, then except as otherwise expressly
provided in this Agreement, if such party shall give notice and full
particulars of such force majeure in writing to the other party within a
reasonable time after occurrence of the event or cause relied on, the
obligations of the party giving such notice, other than the obligation of
the Borrower to make the payments required under the terms hereof or of the
Note, so far as they are affected by such force majeure, shall be suspended
during the continuance of the inability then claimed which shall include a
reasonable time for the removal of the effect thereof, but for no longer
period, and such parties shall endeavor to remove or overcome such
inability with all reasonable dispatch. The term "force majeure", as
employed herein, means acts of God, strikes, lockouts or other industrial
disturbances, acts of the public enemy, orders of any kind of the
Government of the United States, of the State or any civil or military
authority, insurrections, riots, epidemics, landslides, lightning,
earthquakes, volcanoes, fires, hurricanes, tornadoes, storms, floods,
washouts, droughts, arrests, restraining of government and people, civil
disturbances, explosions, partial or entire failure of utilities, shortages
of labor, material, supplies or transportation, or any other similar or
different cause not reasonably within the control of the party claiming
such inability. It is understood and agreed that the settlement of
existing or impending strikes, lockouts or other industrial disturbances
shall be entirely within the discretion of the party having the difficulty
and that the above requirements that any force majeure shall be reasonably
beyond the control of the party and shall be remedied with all reasonable
dispatch shall be deemed to be fulfilled even though such existing or
impending strikes, lockouts and other industrial disturbances may not be
settled and could have been settled by acceding to the demands of the
opposing person or persons.
Section 9.4. Amendments. This Agreement may be amended only with
the concurring written consent of the Trustee and, if required by the
Indenture, of the owners of the Bonds given in accordance with the
provisions of the Indenture.
Section 9.5. Notices. All notices, certificates or other
communications hereunder shall be sufficiently given and shall be deemed
given when delivered or when mailed by registered or certified mail,
postage prepaid, addressed as follows: if to the Authority, at 845 Brook
Street, Rocky Hill, Connecticut 06067, Attention: Program Manager - Loan
Administration; if to the Borrower, c/o Northeast Utilities Service Company
at 107 Selden Street, Berlin, Connecticut 06037, Attention: Assistant
Treasurer; if to the Remarketing Agent, Morgan Stanley & Co., Inc., 1221
Avenue of the Americas, New York, New York 10020, Attention: Short Term
Sales and Trading - Tax Exempt Securities Department; if to the Paying
Agent, Shawmut Bank Connecticut, National Association, 777 Main Street,
Hartford, Connecticut 06115, Attention: Corporate Trust Department; and if
to the Trustee, Shawmut Bank Connecticut, National Association, 777 Main
Street, Hartford, Connecticut 06115, Attention: Corporate Trust
Department. A duplicate copy of each notice, certificate or other
communication given hereunder by either the Authority or the Borrower to
the other shall also be given to the Trustee. The Authority, the Borrower,
the Remarketing Agent, the Paying Agent and the Trustee may, by notice
given hereunder, designate any further or different addresses to which
subsequent notices, certificates or other communications shall be sent.
Section 9.6. Prior Agreements Superseded. This Agreement, together
with all agreements executed by the parties concurrently herewith or in
conjunction with the sale of the Bonds, shall completely and fully
supersede all other prior understandings or agreements, both written and
oral, between the Authority and the Borrower relating to the lending of
money and the Project, including those contained in any commitment letter
executed in anticipation of the issuance of the Bonds.
Section 9.7. Execution of Counterparts. This Agreement may be
executed simultaneously in several counterparts each of which shall be an
original and all of which shall constitute but one and the same instrument.
Section 9.8. Time. All references to times of day in this
Agreement are references to New York City time.
IN WITNESS WHEREOF, the Authority has caused this Agreement to be
executed in its corporate name by a duly Authorized Representative, and the
Borrower has caused this Agreement to be executed in its corporate name by
its duly authorized officer all as of the date first above written.
Connecticut Development Authority
By/s/ Stanley R. Killinger
Name: Stanley R. Killinger
Authorized Representative
The Connecticut Light and
Power Company
By /s/ Bruce F. Garelick
Name: Bruce F. Garelick
Title: Assistant Treasurer
APPENDIX B
Description of Project Equipment and Project Realty
Exhibit 4.2.22
Connecticut Development Authority
and
The Connecticut Light and Power Company
LOAN AGREEMENT
Dated as of September 1, 1993
Connecticut Development Authority
$70,000,000 Pollution Control Revenue Refunding Bonds
(The Connecticut Light and Power Company Project - 1993B Series)
TABLE OF CONTENTS
Page
PREAMBLE .............................................. 1
ARTICLE I DEFINITIONS AND INTERPRETATION
Section 1.1. Definitions.......................... 5
Section 1.2. Interpretation....................... 12
ARTICLE II REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations by the Authority..... 14
Section 2.2. Limitation of Control by Borrower.... 15
Section 2.3. Representations by the Borrower...... 16
ARTICLE III THE LOAN
Section 3.1. Loan Clauses......................... 19
Section 3.2. Other Amounts Payable................ 20
Section 3.3. Manner of Payment.................... 21
Section 3.4. Obligation Unconditional............. 21
Section 3.5. Security Clauses..................... 21
Section 3.6. Issuance of Bonds.................... 21
Section 3.7. Use of Priority Amounts.............. 21
Section 3.8. Effect of Drawing Under Letter
of Credit............................ 22
Section 3.9. Effective Date and Term.............. 22
Section 3.10. Borrower's Purchase of Bonds......... 22
Section 3.11. Letter of Credit..................... 23
Section 3.12. Requirements for Delivery of a
Substitute Credit Facility........... 23
Section 3.13. Securities Laws...................... 25
Section 3.14. New York Paying Agent................ 25
ARTICLE IV THE PROJECT
Section 4.1. Completion of the Project............ 26
Section 4.2. No Warranty Regarding Condition,
Suitability or Cost of Project....... 26
Section 4.3. Taxes................................ 26
Section 4.4. Insurance............................ 27
Section 4.5. Compliance with Law.................. 27
Section 4.6. Maintenance and Repair............... 27
ARTICLE V CONDEMNATION DAMAGE AND DESTRUCTION
Section 5.1. No Abatement of Payments Hereunder... 29
Section 5.2. Project Disposition Upon Condemnation,
Damage or Destruction................ 29
Section 5.3. Application of Net Proceeds of
Insurance or Condemnation............ 29
ARTICLE VI COVENANTS
Section 6.1. The Borrower to Maintain its
Corporate Existence; Conditions under
which Exceptions Permitted........... 30
Section 6.2. Indemnification, Payment of Expenses,
and Advances......................... 30
Section 6.3. Incorporation of Tax Regulatory
Agreement; Payments Upon Taxability.. 33
Section 6.4. Covenant as to Project Use........... 34
Section 6.5. Further Assurances and Corrective
Instruments.......................... 36
Section 6.6. Covenant by Borrower as to Compliance
with Indenture....................... 36
Section 6.7. Assignment of Agreement or Note...... 36
Section 6.8. Inspection........................... 36
Section 6.9. Default Notification................. 36
Section 6.10. Covenant Against Discrimination...... 37
Section 6.11. Authority Costs and Expenses......... 37
ARTICLE VII EVENTS OF DEFAULT AND REMEDIES
Section 7.1. Events of Default.................... 38
Section 7.2. Remedies on Default.................. 72
Section 7.3. Remedies Upon Project Use Default.... 40
Section 7.4. No Duty to Mitigate Damages.......... 40
Section 7.5. Remedies Cumulative.................. 41
ARTICLE VIII PREPAYMENT PROVISIONS
Section 8.1. Optional Prepayment.................. 42
Section 8.2. Notice by the Borrower of Optional
Prepayment........................... 44
Section 8.3. Mandatory Prepayment on Taxability... 44
Section 8.4. Mandatory Prepayment Upon Occurrence
of Certain Events.................... 44
ARTICLE IX GENERAL
Section 9.1. Indenture............................ 45
Section 9.2. Benefit of and Enforcement by
Bondholders.......................... 45
Section 9.3. Force Majeure........................ 45
Section 9.4. Amendments........................... 46
Section 9.5. Notices.............................. 46
Section 9.6. Prior Agreements Superseded.......... 46
Section 9.7. Execution of Counterparts............ 47
Section 9.8. Time................................. 47
APPENDICES
Appendix A - Form of Promissory Note
Appendix B - Description of Project
Connecticut Development Authority
The Connecticut Light and Power Company
LOAN AGREEMENT
THIS LOAN AGREEMENT, made and dated as of September 1, 1993 by and
between the Connecticut Development Authority, a body corporate and politic
constituting a public instrumentality and political subdivision of the
State of Connecticut, and The Connecticut Light and Power Company, a
corporation organized and existing under the laws of the State of
Connecticut,
WITNESSETH THAT:
WHEREAS, the State Commerce Act, constituting Connecticut General
Statutes, Sections 32-la through 32-23ss, as amended (the "Act"), declares
that there is a continuing need in the State (1) for economic development
and activity to provide and maintain employment and tax revenues and to
control, abate and prevent pollution to protect the public health and
safety and (2) for assistance to public service businesses providing
transportation and utility services in the State, and that the availability
of financial assistance and suitable facilities are important inducements
to industrial and commercial enterprises to remain or locate in the State
and to provide industrial, recreation, urban and public service projects;
and
WHEREAS, the Act provides that (1) the term "project" as used therein
means any facility, plant, works, system, building, structure, utility,
fixture or other real property improvement located in the State, and the
land on which it is located or which is reasonably necessary in connection
therewith, which is of a nature or which is to be used or occupied by any
person for purposes which would constitute it as an economic development
project, recreation project, urban project, public service project or
health care project, and any real property improvement reasonably related
thereto, and (2) that a project may also include or consist exclusively of
machinery, equipment or fixtures; and
WHEREAS, the Act defines economic development project to include "any
project which is to be used or occupied by any person for . . . (2)
controlling, abating, preventing or disposing of land, water, air or other
environmental pollution . . . or (3) the conservation of energy or the
utilization of cogeneration technology or solar, wind, hydro, biomass or
other renewable sources to produce energy for any industrial or commercial
application."
WHEREAS, the Act provides that the Authority shall have power (1) to
determine the location and character of any project to be financed under
the provisions of the Act; (2) to purchase, receive by gift or otherwise,
lease, exchange, or otherwise acquire, and construct, reconstruct, improve,
maintain, equip and furnish one or more projects, including all real and
personal property which the Authority may deem necessary therewith, and to
enter into a contract with a person therefor upon such terms and conditions
as the Authority shall determine to be reasonable, including but not
limited to reimbursement for the planning, designing, financing,
construction, reconstruction, improvement, equipping, furnishing, operation
and maintenance of reserve and insurance funds with respect to the
financing of the project; (3) to extend credit or make loans to any person
for the planning, designing, financing, acquiring, constructing,
reconstructing, improving, equipping and furnishing of a project and for
the refinancing of existing indebtedness with respect to any facility or
part thereof which would qualify as a project in order to facilitate
substantial improvements thereto, which credits or loans may be secured by
loan agreements, mortgages, contracts and all other instruments or fees and
charges, upon such terms and conditions as the Authority shall determine to
be reasonable in connection with such loans, including provision for the
establishment and maintenance of reserve and insurance funds and in the
exercise of powers granted in the the Act in connection with a project for
such person, to require the inclusion in any contract, loan agreement or
other instrument, such provisions for the construction, use, operation and
maintenance and financing of a project as the Authority may deem necessary
or desirable; (4) to issue its bonds for such purposes, subject to the
approval of the Treasurer of the State; and, (5) as security for the
payment of the principal or redemption price, if any, of and interest on
any such bonds, to pledge or assign such a loan, lease or sale agreement
and the revenues and receipts derived by the Authority from such a project;
and
WHEREAS, by resolutions adopted December 9, 1986 and December 8, 1987,
the Authority has authorized the issuance of $30,000,000 principal amount
of its Pollution Control Revenue Par Value Demand Bonds (The Connecticut
Light and Power Company Project - 1986 Series A) and $40,000,000 principal
amount of its Pollution Control Revenue Par Value Demand Bonds (The
Connecticut Light and Power Company Project - 1987 Series A) (the "Prior
Obligations") for the purposes of providing funds for the financing of
construction of and additions to the pollution control facilities of the
Borrower; and
WHEREAS, the Borrower currently owns certain individual interests in
existing facilities within certain municipalities in the State and, by
resolution adopted in furtherance of the purposes of the Act, the Authority
has accepted the application of the Borrower for assistance in the
financing of facilities for the control, abatement or prevention of
environmental pollution deriving from the operation of certain nuclear
electric generating facilities (the "Project"); and
WHEREAS, the Authority has by a further resolution adopted September 8,
1993, authorized the issuance of $70,000,000 principal amount of its
Pollution Control Revenue Refunding Bonds (The Connecticut Light and Power
Company Project - 1993B Series) for the purposes of providing funds for the
refunding of the Prior Obligations; and
WHEREAS, pursuant to such resolution the Bonds (as hereinafter defined)
are to be secured by an Indenture of Trust of even date herewith, by and
between the Authority and Shawmut Bank Connecticut, National Association,
as Trustee; and
WHEREAS, in order to further secure the Bonds, the Borrower concurrently
with the execution hereof has arranged the delivery to the Paying Agent of
an irrevocable Letter of Credit, dated the date of delivery of the Bonds,
issued by Union Bank of Switzerland, New York Branch, for the account of
the Borrower in favor of the Paying Agent as beneficiary on behalf of the
owners of the Bonds; and
WHEREAS, the Borrower and Union Bank of Switzerland, New York Branch,
entered into a Letter of Credit and Reimbursement Agreement dated as of
September 1, 1993 obligating the Borrower inter alia to repay all amounts
drawn under the Letter of Credit together with interest, if any, thereon;
and
WHEREAS, the Bonds shall be special obligations of the Authority,
payable solely from the revenues or other receipts, funds or monies to be
derived by the Authority under this Agreement or the Indenture and from any
amounts otherwise available under the Indenture for the payment of the
Bonds; and
WHEREAS, all federal and State agencies having jurisdiction in the
premises have certified that the portion of the Project that constitutes
pollution control Facilities, as designed, is in furtherance of the purpose
of controlling, abating or preventing such pollution at the Project; and
WHEREAS, the Authority proposes with the proceeds of the Bonds to make a
loan to the Borrower and the Borrower proposes to borrow such proceeds from
the Authority for the purpose of refunding the Prior Obligations issued by
the Authority to finance and refinance a portion of the cost of undertaking
and completing the Project; and
WHEREAS, the Borrower acknowledges that the Authority is providing
financing for the Project in furtherance of the Authority's corporate
purposes under the Act, that the accomplishment of these purposes is
dependent upon the compliance of the Borrower with its covenants contained
in this Agreement, that the Authority has a resulting beneficial interest
in the Project, and that the Borrower's use of and interest in the Project
as provided hereby are in furtherance of the discharge of a public purpose;
and
WHEREAS, the Connecticut Department of Public Utility Control has
approved the issuance of the Note;
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, covenants and agreements herein set forth, the Authority
and the Borrower, each binding itself, its successors and assigns, do
mutually promise, covenant and agree as follows (provided that in the
performance of the agreements of the Authority herein contained, any
obligation it may incur for the payment of money shall not be an
obligation, debt or liability of the State or any municipality thereof and
neither the State nor any municipality thereof shall be liable on any
obligation so incurred, but any such obligation shall be payable solely out
of the revenues or other receipts, funds or monies to be derived by the
Authority under this Agreement or the Indenture and from any amounts
otherwise available under the Indenture for the payment of the Bonds):
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1. Definitions. For the purposes of this Agreement, the
following words and terms shall have the respective meanings set forth as
follows, and any capitalized word or term used but not defined herein is
used as defined in the Indenture:
"Act" means the State Commerce Act, constituting Connecticut General
Statutes, Sections 32-la through 32-23ss, as amended.
"Agreement" means this Loan Agreement and any amendments and supplements
hereto.
"Authority" means the Connecticut Development Authority, a body
corporate and politic constituting a public instrumentality and political
subdivision of the State of Connecticut duly organized and existing under
the laws of the State, and any body, board, authority, agency or other
political subdivision or instrumentality of the State which shall hereafter
succeed to the powers, duties and functions thereof.
"Authorized Representative" means, in the case of the Authority, the
Chairman or Vice Chairman, the President, the Executive Vice President or
any Senior Vice President or any Vice President thereof and, in the case of
the Borrower, the Chairman, Vice Chairman, President, any Vice President,
Chief Financial Officer, Treasurer, Assistant Treasurer, Secretary or
Assistant Secretary thereof and, when used with reference to the
performance of any act, the discharge of any duty or the execution of any
certificate or other document, any officer, employee or other person
authorized to perform such act, discharge such duty or execute such
certificate or other document.
"Bank" means Union Bank of Switzerland, New York Branch, in its capacity
as issuer of the Letter of Credit and any other issuer of a Credit
Facility.
"Beneficial Owner" shall have the meaning specified in Section 2.3(F) of
the Indenture. If any person claims to the Trustee to be a Beneficial
Owner, for purposes of Section 2.4(C) of the Indenture, such person shall
prove such claim to the satisfaction of the Trustee with such documentation
and signature guaranties as the Trustee may request.
"Bonds" means the $70,000,000 Pollution Control Revenue Refunding Bonds
(The Connecticut Light and Power Company Project - 1993B Series) authorized
and issued pursuant to Section 2.3 of the Indenture.
"Bond Counsel" means Whitman & Ransom or such other nationally
recognized bond counsel selected by the Authority and reasonably
satisfactory to the Borrower and the Trustee.
"Borrower" means (i) The Connecticut Light and Power Company, a
corporation organized and existing under the laws of the State of
Connecticut, and its successors and assigns and (ii) any surviving
resulting or transferee corporation as provided in Section 6.1 hereof.
"Business Day" means any day (i) that is not a Saturday or Sunday, (ii)
that is a day on which banks located in Hartford, Connecticut and New York,
New York are not required or authorized to remain closed, (iii) that is a
day on which banking institutions in all of the cities in which the
principal offices of the Trustee and the Paying Agent and, if applicable,
the Remarketing Agent and the Bank are located and are not required or
authorized to remain closed and (iv) that is a day on which the New York
Stock Exchange, Inc. is not closed.
"Code" means the Internal Revenue Code of 1986, as amended and
regulations promulgated thereunder.
"Conversion Date" means the date on which a new Mode becomes effective
with respect to a Bond, and with respect to a Bond in the Multiannual Mode,
the date on which a new Rate Period becomes effective.
"Credit Facility" means the Letter of Credit and any substitute
irrevocable transferable letter of credit delivered to the Paying Agent
pursuant to the Indenture and this Agreement and then in effect. More than
one Credit Facility may be in effect from time to time.
"Debt Service Fund" means the special trust fund so designated,
established pursuant to Section 5.1 of the Indenture.
"DTC" or "The Depository Trust Company" shall mean the limited-purpose
trust company organized under the laws of the State of New York which shall
act as securities depository for the Bonds, and any successor thereto.
"Determination of Taxability" means (1) a published revenue ruling by
the Internal Revenue Service and an opinion of Bond Counsel, unless the
Borrower timely requests the Authority to proceed in accordance with
Section 6.3(H) of this Agreement and proceedings pursuant to such section
are continuing, (2)(a)(i) a private ruling specifically applicable to the
Bonds or (ii) the receipt by any Bondowner of a notice of assessment and
demand for payment from the Internal Revenue Service and (b)(i) the
expiration of the appeal period provided therein if no appeal is taken or
(ii) if an appeal is taken, a final unappealable decision by a court of
competent jurisdiction; provided that in the case of an event described in
clause (2) that the Authority or the Bondowner, as the case may be, has
given the Borrower and the Trustee prompt written notice of any application
for such a private ruling or, as the case may be, any proposed assertion of
taxability by the Internal Revenue Service and, if the Borrower agrees to
pay all expenses in connection therewith, permits the Borrower to contest
such action, either directly or in the name of the registered owner,
through any level of appeal determined by the Borrower, or (3) the
admission in writing by the Borrower, in the case of clause (1), (2) and
(3) to the effect that the interest on the Bonds is includable in the gross
income for federal income tax purposes (other than for purposes of any
alternative minimum tax, environmental tax or foreign branch profits tax)
of an owner or former owner thereof, other than for a period during which
such owner or former owner is or was a "Substantial User" of the Project or
a "Related Person" as such terms are defined in the Code. For purposes of
this definition, the term owner or Bondowner means the Beneficial Owner of
the Bonds so long as the Book-Entry Only System (as defined in Section
23(F) of the Indenture is in effect.
"Event of Default" means an Event of Default as defined in Section 7.1
hereof.
"Financing Documents" means this Agreement, the Tax Regulatory Agreement
and the Note.
"Indenture" means the Indenture of Trust, of even date herewith, by and
between the Authority and the Trustee, together with all indentures
supplemental thereto made and entered into in accordance therewith.
"Interest Payment Date" shall mean each date on which interest is
payable on the Bonds as provided in the forms of the Bonds.
"Letter of Credit" means the $71,036,000 irrevocable letter of credit
dated the date of the initial delivery of the Bonds and issued by Union
Bank of Switzerland, New York Branch, for the benefit
of the Paying Agent.
"Mortgage Indentures" means (i) that certain Indenture of Mortgage and
Deed of Trust dated as of May 1, 1921, by and between the Borrower and
Bankers Trust Company, as trustee, as amended and supplemented, (ii) that
certain First Mortgage Indenture and Deed of Trust dated as of January 1,
1958, by and between The Hartford Electric Light Company (which merged with
and into the Borrower as of June 30, 1982) and Old Colony Trust Company
(which merged into First National Bank of Boston by merger effective
January 4, 1971), as trustee, as amended and supplemented, and (iii) any
other mortgage indenture which may hereafter be created so long as such
mortgage indenture covers the property pledged under the indentures named
in (i) and (ii) above or otherwise covers substantially all of the property
of the Borrower.
"Moody's" means Moody's Investors Services, Inc., a corporation
organized and existing under the laws of the State of Delaware, its
successors and their assigns, and if such corporation shall be dissolved or
liquidated or shall no longer perform the functions of a securities rating
agency, "Moody's" shall be deemed to refer to any other nationally
recognized securities rating agency designated by the Authority, at the
direction of the Borrower, by notice to the Trustee and the Borrower.
"Net Proceeds" when used with respect to any insurance or condemnation
award, means the gross proceeds from such award less all expenses
(including attorney's fees and expenses and any extraordinary expenses)
incurred in the collection thereof.
"1954 Code" means the Internal Revenue Code of 1954, as amended, as in
effect on August 1, 1986.
"Note" means the promissory note of the Borrower to the Authority, dated
the date of initial delivery of the Bonds in the form attached as an
Appendix to this Agreement, and any amendments or supplements made in
conformity with this Agreement and the Indenture.
"Outstanding", when used with reference to a Bond or Bonds, as of any
particular date, means all Bonds which have been authenticated and
delivered under the Indenture, except:
(1) any Bonds cancelled by the Trustee because of payment or
redemption prior to maturity or surrendered to the Trustee for
cancellation;
(2) any Bond (or portion of a Bond) paid or redeemed or for the
payment or redemption of which there has been separately set aside and
held in the Debt Service Fund either:
(a) monies in an amount sufficient to effect payment of the
principal or applicable Redemption Price thereof, together with accrued
interest on such Bond to the payment or redemption date, which payment or
redemption date shall be specified in irrevocable instructions given to the
Trustee to apply such monies to such payment on the date so specified; or
(b) obligations of the kind described in subsection 12.1(A)
of the Indenture in such principal amounts, of such maturities, bearing
such interest and otherwise having such terms and qualifications as shall
be necessary to provide monies in an amount sufficient to effect payment of
the principal or applicable Redemption Price of such Bond, together with
accrued interest on such Bond to the payment or redemption date, which
payment or redemption date shall be specified in irrevocable instructions
given to the Trustee to apply such obligations to such payment on the date
so specified; or
(c) any combination of (a) and (b) above;
(3) Bonds deemed tendered for purchase and not delivered to the
Paying Agent on the Purchase Date, provided sufficient funds for payment of
the Purchase Price are on deposit with the Paying Agent;
(4) Bonds in exchange for or in lieu of which other Bonds shall
have been authenticated and delivered under Article III of the
Indenture; and
(5) any Bond deemed to have been paid as provided in subsection
12.1 of the Indenture.
"Paying Agent" means any paying agent for the Bonds appointed pursuant
to Section 9.10 of the Indenture (and may include the Trustee), and its
successor or successors and any other corporation which may at any time be
substituted in its place in accordance with the Indenture.
"Permitted Encumbrances" mean, as of any particular date, (i) the lien
of the Mortgage Indentures, (ii) liens and encumbrances permitted by the
Mortgage Indentures, (iii) liens for taxes not yet due and payable, (iv)
any lien created by this Agreement and the Indenture, (v) utility, access
and other easements and rights-of-way, that will not interfere with or
impair the value or use of the Project as herein provided, (vi) any
mechanic's, laborer's, materialman's, supplier's or vendor's lien or right
in respect thereof if payment is not yet due and payable and for which
statutory lien rights exist, and (vii) such minor defects, irregularities,
easements, and, rights-of-way (including agreements with any railroad the
purpose of which is to service the railroad siding) as normally exist with
respect to property similar in character to the Project and which do not
materially impair the value or use of the property affected thereby for the
purpose for which it was acquired hereunder.
"Plants" means, collectively, the nuclear electric generating plants at
which the various portions of the Project are located, including the
Millstone 1, Millstone 2, and Millstone 3 plants in Waterford, Connecticut,
and as used in the singular form shall mean any one of them.
"Principal User" means any principal user of the Project within the
meaning of Section 144(a)(2)(B) of the Code, or 103(b)(6)(B) of the 1954
Code, as applicable, including without limitation any person who is a
greater-than-10-percent-owner (or if none, the person(s) who holds the
largest ownership interest in the Project), lessee or user of more than 10%
of the Project measured either by occupiable space or fair rental value
under any formal or informal agreement or, under the particular facts and
circumstances, anyone who is a principal customer of the Project. The term
"principal customer" means any person, who purchases output of the Project
under a contract if the percentage of output taken or to be taken by such
person, multiplied by a fraction the numerator of which is the term of such
contract and the denominator of which is the economic life of the Project,
exceeds 10%. In the case of a person who purchases output of an electric
or thermal energy, gas, water or other similar facility, such person is a
principal customer if the total output purchased by such person during any
one-year period beginning with the date the facility is placed in service
is more than 10 percent of the facility's output during each such period.
Co-owners or co-lessees who are shareholders in a corporation or who are
collectively treated as a partnership subject to subchapter K under section
761(a) of the Code are not treated as Principal Users merely by reason of
their ownership of corporate or partnership interests.
"Prior Obligations" means the Authority's $30,000,000 principal amount
of Pollution Control Revenue Par Value Demand Bonds (The Connecticut Light
and Power Company Project - 1986 Series A) and $40,000,000 principal amount
of Pollution Control Revenue Par Value Demand Bonds (The Connecticut Light
and Power Company Project - 1987 Series A).
"Project" means the Borrower's interest in the realty and other
interests in the real property, and in all personal property, goods,
leasehold improvements, machinery, equipment, furnishings, furniture,
fixtures, tools and attachments wherever located and whether now owned or
hereafter acquired, acquired or financed in whole or in part with the
proceeds of the Prior Obligations or the proceeds of tax-exempt securities
refunded by the Prior Obligations, and any additions and accessions
thereto, substitutions therefor and replacements, improvements, extensions
and restorations thereof, described in Appendix B to this Agreement, as
amended from time to time in accordance with this Agreement.
"Redemption Price" means, when used with respect to a Bond or a portion
thereof, the principal amount of such Bond or portion thereof plus the
applicable premium, if any, payable upon redemption thereof pursuant to the
Indenture.
"Refunding Fund" means the special trust fund so designated, established
pursuant to Section 5.1 of the Indenture.
"Reimbursement Agreement" means the Letter of Credit and Reimbursement
Agreement dated as of September 1, 1993 among the Borrower, Union Bank of
Switzerland, New York Branch, as agent and issuing bank thereunder, and the
participating banks referred to therein, and any other agreement between
the Borrower and a Bank under which the Borrower is obligated to reimburse
the Bank for payments made by the Bank under a Credit Facility.
"Related Person" means, with respect to any Principal User, a person
which is a related person (as defined in Section 144(a)(3) of the Code, or
Section 103(b)(6)(B) of the 1954 Code, as applicable, and by reference to
Sections 267, 707(b) and 1563(a) of the Code, except that 50% is to be
substituted for 80% in Section 1563(a)).
"Sharing Agreement" means the Sharing Agreement - 1979 Connecticut
Nuclear Unit dated as of September 1, 1973, among the Borrower and the
other participants from time to time in ownership of the Millstone 3
nuclear electric generating plant in Waterford, Connecticut, pertaining to
the ownership, construction and operation of Millstone 3, as such agreement
has been or may be amended from time to time.
"S&P" means Standard & Poor's Corporation, a corporation organized and
existing under the laws of the State of New York, its successors and their
assigns and, if such corporation shall be dissolved or liquidated or shall
no longer perform the functions of a securities rating agency, "S&P" shall
be deemed to refer to any other nationally recognized securities rating
agency designated by the Trustee at the direction of the Borrower.
"State" means the State of Connecticut.
"Substantial User" means any substantial user of the Project within
the meaning of Section 147(a) of the Code or Section 103(b)(13) of the 1954
Code, as applicable.
"Supplemental Indenture" means any indenture supplemental to the
Indenture or amendatory of the Indenture, adopted by the Authority in
accordance with Article X of the Indenture.
"Tax Incidence Date" means the date as of which interest on the Bonds
becomes or became includable in the gross income of the recipient thereof
(other than the Borrower or another Substantial User or Related Person) for
federal income tax purposes for any cause, as determined by a Determination
of Taxability.
"Tax Regulatory Agreement" means the Tax Regulatory Agreement, dated
as of the date of initial issuance and delivery of the Bonds, among the
Authority, the Borrower and the Trustee, and any amendments and supplements
thereto.
"Term", when used with reference to this Agreement, means the term of
this Agreement determined as provided in Article III hereof.
"Trustee" means Shawmut Bank Connecticut, National Association, and
its successor or successors hereafter appointed in the manner provided in
the
Indenture.
Section 1.2. Interpretation. In this Agreement:
(1) The terms "hereby", "hereof", "hereto", "herein",
"hereunder" and any similar terms, as used in this Agreement, refer to
this Agreement, and the term "hereafter" means after, and the term
"heretofore" means before, the date of this Agreement.
(2) Words of the masculine gender mean and include correlative
words of the feminine and neuter genders and words importing the
singular number mean and include the plural number and vice versa.
(3) Words importing persons include firms, associations,
partnerships (including limited partnerships), trusts, corporations
and other legal entities, including public bodies, as well as natural
persons.
(4) Any headings preceding the texts of the several Articles and
Sections of this Agreement, and any table of contents appended to
copies hereof, shall be solely for convenience of reference and shall
not constitute a part of this Agreement, nor shall they affect its
meaning, construction or effect.
(5) Nothing contained in this Agreement shall be construed to
cause the Borrower to become the agent for the Authority or the
Trustee for any purpose whatsoever, nor shall the Authority or the
Trustee be responsible for any shortage, discrepancy, damage, loss or
destruction of any part of the Project wherever located or for
whatever cause.
(6) All approvals, consents and acceptances required to be given
or made by any person or party hereunder shall be at the sole
discretion of the party whose approval, consent or acceptance is
required.
(7) All notices to be given hereunder shall be given in writing
within a reasonable time unless otherwise specifically provided.
(8) This Agreement shall be governed by and construed in
accordance with the applicable laws of the State.
(9) If any provision of this Agreement shall be ruled invalid by
any court of competent jurisdiction, the invalidity of such provision
shall not affect any of the remaining provisions hereof.
(10) From and after the date upon which there is no Credit
Facility in effect, upon receipt by the Trustee of a certificate from
the Bank stating that all amounts payable to the Bank under the
Reimbursement Agreement have been paid in full, all references to the
Bank, the Reimbursement Agreement or the Credit Facility in this
Agreement, the Note, the Indenture, and the Bonds shall be
ineffective.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations by the Authority. The Authority
represents and warrants that:
(1) It is a body corporate and politic constituting a public
instrumentality and political subdivision of the State, duly organized and
existing under the laws of the State including the Act. The Authority is
authorized to issue the Bonds in accordance with the Act and to use the
proceeds thereof to refinance the Project.
(2) The Authority has complied with the provisions of the Act and
has full power and authority pursuant to the Act to consummate all
transactions contemplated by the Bonds, the Indenture and the Financing
Documents.
(3) By resolution duly adopted by the Authority and still in full
force and effect, the Authority has authorized the execution, delivery and
due performance of the Bonds, the Indenture and the Financing Documents,
and the taking of any and all action as may be required on the part of the
Authority to carry out, give effect to and consummate the transactions
contemplated by this Agreement and the Indenture, and all approvals
necessary in connection with the foregoing have been received.
(4) The Bonds have been duly authorized, executed, authenticated,
issued and delivered, constitute valid and binding special obligations of
the Authority payable solely from revenues or other receipts, funds or
monies pledged therefor under the Indenture and from any amounts otherwise
available under the Indenture, and are entitled to the benefit of the
Indenture. Neither the State nor any municipality thereof is obligated to
pay the Bonds or the interest thereon. Neither the faith and credit nor
the taxing power of the State nor any municipality thereof is pledged for
the payment of the principal, and premium, if any, of and interest on the
Bonds.
(5) The execution and delivery of the Bonds, the Indenture and
the Financing Documents and compliance with the provisions thereof, will
not conflict with or constitute on the part of the Authority a violation
of, breach of or default under its by-laws or any statute, indenture,
mortgage, deed of trust, note agreement or other agreement or instrument to
which the Authority is a party or by which the Authority is bound, or, to
the knowledge of the Authority, any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Authority or
any of its activities or properties, and all consents, approvals,
authorizations and orders of governmental or regulatory authorities which
are required for the consummation by the Authority of the transactions
contemplated thereby have been obtained.
(6) Subject to the provisions of this Agreement and the Indenture,
the Authority will apply the proceeds of the Bonds to the purposes
specified in the Indenture and the Financing Documents.
(7) There is no action, suit, proceeding or investigation at law
or in equity before or by any court, public board or body pending or
threatened against or affecting the Authority, or to the best knowledge of
the Authority, any basis therefor, wherein an unfavorable decision, ruling
or finding would adversely affect the transactions contemplated hereby or
by the Indenture, or which, in any way, would dversely affect the validity
of the Bonds, or the validity of or enforceability of the Indenture or the
Financing Documents, or any agreement or instrument to which the
Authority is a party and which is used or contemplated for use in
consummation of the transactions contemplated hereby and by the Indenture.
(8) It has not made any commitment or taken any action which will
result in a valid claim for any finders or similar fees or commitments in
respect of the transactions contemplated by this Agreement.
(9) The representations of the Authority set forth in the Tax
Regulatory Agreement are by this reference incorporated in this Agreement
as though fully set forth herein.
Section 2.2 Limitation of Control by Borrower. Pursuant to the
Sharing Agreement, the Borrower is the owner of a 52.933% undivided
interest in the Millstone 3 nuclear electric generating plant in Waterford,
Connecticut, at which a portion of the Project is located. The Sharing
Agreement designates the Borrower as one of two lead participants and,
together with such other lead participant, the Borrower has sole
responsibility for operation and maintenance of Millstone 3, subject to the
provisions of the Sharing Agreement. Every obligation of the Borrower
hereunder with respect to that portion of the Project located at Millstone
3 (other than the continuing obligation of the Borrower to pay, at the
times and in the amounts set forth herein, its loan obligation pursuant to
this Agreement) is subject to and limited by the provisions of such Sharing
Agreement. The Borrower agrees, however, subject to the representations
set forth in this Section, to exercise all rights granted to it pursuant to
the Sharing Agreement and its rights as to matters otherwise within the
Borrower's control, and to take all reasonable actions in the prudent
exercise of business judgment, to cause the covenants of the Borrower
contained in this Agreement to be performed to the full extent of the
Borrower's ability during the Term of this Agreement.
Section 2.3. Representations by the Borrower. The Borrower represents
and warrants that:
(1) The Borrower has been duly incorporated and validly exists as
a corporation in good standing under the laws of the State of Connecticut,
is not in violation of any provision of its certificate of incorporation or
its by-laws, has corporate power to enter into and perform the Financing
Documents, and by proper corporate action has duly authorized the execution
and delivery of the Financing Documents.
(2) The Financing Documents constitute valid and legally binding
obligations of the Borrower, enforceable in accordance with their
respective terms, except to the extent that such enforceability may be
limited by bankruptcy or insolvency or other laws affecting creditors'
rights generally or by general principles of equity.
(3) Neither the execution and delivery of the Financing Documents,
the consummation of the transactions contemplated thereby, nor the
fulfillment by the Borrower of or compliance by the Borrower with the terms
and conditions thereof is prevented or limited by or conflicts with or
results in a breach of, or default under the terms, conditions or
provisions of any contractual or other restriction of the Borrower,
evidence of its indebtedness or agreement or instrument of whatever nature
to which the Borrower is now a party or by which it is bound, or
constitutes a default under any of the foregoing. No event has occurred
and no condition exists which, upon the execution and delivery of any
Financing Documents, constitutes an Event of Default hereunder or an event
of default thereunder or, but for the lapse of time or the giving of
notice, would constitute an Event of Default hereunder or an event of
default thereunder.
(4) There is no action or proceeding pending or, to the knowledge
of the Borrower, threatened against the Borrower before any court,
administrative agency or arbitration board that will materially and
adversely affect the ability of the Borrower to perform its obligations
under the Financing Documents except as disclosed in the Borrower's Annual
Report on Form 10-K for the fiscal year ended December 31, 1992, the
Borrower's Quarterly Reports on Form 10-Q for the fiscal quarters ended
March 31, 1993 and June 30, 1993, and the Borrower's Current Reports on
Form 8-K dated June 3, 1993, June 30, 1993 and September 10, 1993; and all
authorizations, consents and approvals of governmental bodies or agencies
required in connection with the execution and delivery of the Financing
Documents and in connection with the performance of the Borrower's
obligations hereunder or thereunder have been obtained.
(5) The execution, delivery and performance of the Financing
Documents and any other instrument delivered by the Borrower pursuant to
the terms hereof or thereof are within the corporate powers of the Borrower
and have been duly authorized and approved by the board of directors of the
Borrower and are not in contravention of law or of the Borrower's
certificate of incorporation or by-laws, as amended to date, or of any
undertaking or agreement to which the Borrower is a party or by which it is
bound.
(6) The Borrower represents that it has not made any commitment
or taken any action which will result in a valid claim for any finders' or
similar fees or commitments in respect of the transactions described in
this Agreement other than the fees to various parties to the transactions
contemplated hereby which have been heretofore paid or provided.
(7) The Project is included within the definition of a "project"
in the Act, and its estimated cost is equal to or in excess of $70,000,000.
The Borrower intends the Project to be and continue to be an authorized
project under the Act during the Term of this Agreement.
(8) All amounts shown in Schedule D of the Tax Regulatory
Agreement are eligible costs of a project financed by bonds issued by
the Authority under the Act, and may be financed by amounts in the
Refunding Fund under the Indenture. None of the proceeds of the Bonds
will be used directly or indirectly as working capital or to finance
inventory.
(9) The Project is in compliance with all applicable federal,
State and local laws and ordinances (including rules and regulations)
relating to zoning, building, safety and environmental quality the
non-compliance with which would materially adversely affect the
performance by the Borrower of any of its obligations hereunder.
(10) The Borrower has obtained all necessary material approvals
from any and all governmental agencies requisite to the Project, and has
also obtained all material occupancy permits and authorizations from
appropriate authorities authorizing the occupancy and use of the Project
for the purposes contemplated hereby. The Borrower further represents and
warrants that it has completed the Project in accordance with all material
federal, State and local laws, ordinances and regulations applicable
thereto.
(11) The availability of financial assistance from the Authority
as provided herein and in the Indenture has induced the Borrower to locate
the Project in the State. The Borrower does not presently intend to lease
the project.
(12) The Borrower will not take or omit to take any action which
action or omission will in any way cause the proceeds of the Bonds to be
applied in a manner contrary to that provided in the Indenture and the
Financing Documents as in force from time to time.
(13) The Borrower has not taken and will not take any action and
knows of no action that any other person, firm or corporation has taken or
intends to take, which would cause interest on the Bonds to be includable
in the gross income of the recipients thereof for federal income tax
purposes. The representations, certifications and statements of reasonable
expectation made by the Borrower in the Tax Regulatory Agreement and
relating to Project description, composite issues, bond maturity and
average asset economic life, use of Bond proceeds, arbitrage and related
matters are hereby incorporated by this reference as though fully set forth
herein.
(14) The Borrower has good and marketable or good and merchantable
title to the Project subject only to Permitted Encumbrances and to
regularities or defects in title which may exist which do not materially
impair the use of such properties in the Borrower's business.
(15) The Borrower will use all of the proceeds of the Bonds to
refund the Prior Obligations.
ARTICLE III
THE LOAN
Section 3.1. Loan Clauses. (A) Subject to the conditions and in
accordance with the terms of this Agreement, the Authority agrees to make a
loan to the Borrower from the proceeds of the Bonds in the amount of
$70,000,000 and the Borrower agrees to borrow such amount from the
Authority.
(B) The loan shall be made at the time of delivery of the Bonds
and receipt of payment therefor by the Authority against receipt by the
Authority of the Note duly executed and delivered to evidence the pecuniary
indebtedness of the Borrower hereunder. As and for the loan the Authority
shall apply the proceeds of the Bonds as provided in the Indenture on the
terms and conditions therein prescribed.
(C) The Borrower shall make payments in immediately available
funds to the Trustee for deposit in the Debt Service Fund no later than
12:00 Noon on the date on which such payment of principal (including
principal called for redemption) of, premium, if any, or interest on Bonds
shall become due in an amount equal to the payment then coming due on such
Bonds less the amounts, if any, (i) then held in the Debt Service Fund and
available to pay the same, and (ii) amounts received by the Paying Agent to
pay the same from a draw under a Credit Facility. The Borrower may make
payments to the Debt Service Fund earlier than required by this section,
but such payments shall not affect the accrual of interest. In addition,
the Borrower shall pay to the Trustee, as and when the same shall become
due, all other amounts due under the Financing Documents, together with
interest thereon at the then applicable rate as set forth herein in Section
6.2(G). The Borrower shall have the option to prepay its loan obligation in
whole or in part at the times and in the manner provided in Article VIII
hereof.
(D) The payments to be made under Section 3.1(C) shall be
appropriately adjusted to reflect the date of issue of Bonds, accrued
interest deposited in the Debt Service Fund, if any, and any purchase or
redemption of Bonds so that there will be available on each payment date
the amount necessary to pay the interest and principal due or coming due on
the Bonds and so that accrued interest will be applied to the installments
of interest to which it is applicable.
(E) At any time when any principal of the Bonds is overdue, the
Borrower shall also have a continuing obligation to pay to the Trustee for
deposit in the Debt Service Fund an amount equal to interest on the overdue
principal but the installment payments required under this section shall
not otherwise bear interest. Redemption premiums shall not bear interest.
(F) The payment obligations of the Borrower in this Section 3.1
are subject in all respects to the provisions of Sections 3.7 and 3.8
hereof regarding the use of Priority Amounts and the effect of drawings
under the Credit Facility.
(G) In the event the Borrower should fail to make any of the
payments required under the foregoing provisions of this Section 3.1, the
item or installment so in default shall continue as an obligation of the
Borrower until the amount in default shall have been fully paid, and the
Borrower agrees to pay or cause to be paid the same with interest thereon
at the rate determined in accordance with Article II of the Indenture until
paid in accordance herewith and with the Indenture.
Section 3.2. Other Amounts Payable. (A) The Borrower hereby further
expressly agrees to pay to the Trustee as and when the same shall become
due, (i) an amount equal to the initial and annual fees of the Trustee for
the ordinary services of the Trustee rendered and its ordinary expenses
incurred under the Indenture, including fees and expenses as Paying Agent
and the fees and expenses of Trustee's counsel, including fees and expenses
as registrar and in connection with preparation and delivery of new Bonds
upon exchanges or transfers, (ii) the reasonable fees and expenses of the
Trustee and any Paying Agents on the Bonds for acting as paying agents as
provided in the Indenture, including fees and expenses of the Paying Agent
as registrar and in connection with the preparation of new Bonds upon
exchanges, transfers or redemptions, (iii) the reasonable fees and expenses
of the Bank and the Remarketing Agent for the performance of their duties
as provided in the Indenture, including the reasonable fees of their
counsel and other expenses the Remarketing Agent may incur in providing for
accurate offering documents in connection therewith, (iv) the reasonable
fees and charges of the Trustee for extraordinary services rendered by it
and extraordinary expenses incurred by it under the Indenture, including
reasonable counsel fees and expenses, and (v) fees and expenses of Bond
Counsel and the Authority for any future action requested of either.
(B) The Borrower also agrees to pay all amounts payable by it
under the Financing Documents at the time and in the manner therein
provided.
Section 3.3. Manner of Payment. The payments provided for in Section
3.1 hereof shall be made by any reasonable method providing immediately
available funds at the time and place of payment directly to the Trustee
for the account of the Authority and shall be deposited in the Debt Service
Fund. The additional payments provided for in Section 3.2 shall be made in
the same manner directly to the entitled party or to the Trustee for its
own use or disbursement to the Paying Agents, as the case may be.
Section 3.4. Obligation Unconditional. The obligations of the
Borrower under the Financing Documents shall be absolute and unconditional,
irrespective of any defense or any rights of setoff, recoupment or
counterclaim it might otherwise have against the Authority or the Trustee.
The Borrower will not suspend or discontinue any such payment or terminate
this Agreement (other than in the manner provided for hereunder) for any
cause, including, without limiting the generality of the foregoing, any
acts or circumstances that may constitute failure of consideration, failure
of title, or commercial frustration of purpose, or any damage to or
destruction of the Project, or the taking by eminent domain of title to or
the right of temporary use of all or any part of the Project, or any change
in the tax or other laws of the United States, the State or any political
subdivision of either thereof, or any failure of the Authority or the
Trustee to perform and observe any agreement or covenant, whether expressed
or implied, or any duty, liability or obligation arising out of or
connected with the Financing Documents.
Section 3.5. Security Clauses. The Authority hereby notifies the
Borrower and the Borrower acknowledges that, among other things, the
Borrower's loan payments and all of the Authority's right, title and
interest under the Financing Documents to which it is a party (except its
rights under Section 6.2 hereof) are being concurrently with the execution
and delivery hereof endorsed, pledged and assigned without recourse by the
Authority to the Trustee as security for the Bonds as provided in the
Indenture.
Section 3.6. Issuance of Bonds. The Authority has concurrently with
the execution and delivery hereof sold and delivered the Bonds under and
pursuant to a resolution adopted by the Authority on September 8, 1993,
authorizing their issuance under and pursuant to the Indenture. The
proceeds of sale of the Bonds shall be applied as provided in Articles IV
and V of the Indenture.
Section 3.7. Use of Priority Amounts. The Borrower and the Authority
acknowledge their intention to minimize the risk that any payment made to a
Bondowner from amounts provided by or on behalf of the Borrower may be
determined by a bankruptcy court to constitute a preference. To this end
the parties agree that payments to Bondowners on Bonds supported by a
Credit Facility shall be made only from Priority Amounts, except when and
to the extent no Priority Amounts are available for the purpose as provided
in Section 5.8(e) of the Indenture.
Section 3.8. Effect of Drawings Under Credit Facility. The payment of
obligations of the Borrower under this Agreement and the Note with respect
to the Bonds shall be completely satisfied to the extent of all drawings
made under the Credit Facility for the purpose of satisfying such
obligations.
Section 3.9. Effective Date and Term. (A) This Agreement shall become
effective upon its execution and delivery by the parties hereto, shall
remain in full force from such date and, subject to the provisions hereof
(including particularly Articles VII and VIII), shall expire on such date
as the Indenture shall be discharged and satisfied in accordance with the
provisions of subsection 12.1(A) thereof. The Borrower's obligations under
Sections 6.2 and 6.3 hereof, however, shall survive the expiration of this
Agreement.
(B) Within 60 days of such expiration the Authority shall deliver
to the Borrower any documents and take or cause the Trustee, at the
Borrower's expense, to take any such reasonable actions as may be necessary
to effect the cancellation, release and satisfaction of the Indenture and
the Financing Documents.
Section 3.10. Borrower's Purchase of Bonds. Pursuant to Section 5.8(F)
of the Indenture, if the amount drawn on the Credit Facility and deposited
with the Paying Agent, together with all other amounts (including
remarketing proceeds) received by the Paying Agent for the purchase of
Bonds supported by a Credit Facility and tendered pursuant to Section
2.3(G)(1)(c) or 2.3(G)(2)(c) or (d) of the Indenture, is not sufficient to
pay the Purchase Price of such Bonds on the Purchase Date, the Paying Agent
shall before 3:30 P.M. on such Purchase Date, notify the Borrower, the
Remarketing Agent and the Trustee of such deficiency by telephone promptly
confirmed in writing. The Borrower shall pay to the Paying Agent in
immediately available funds by 4:00 P.M. on the Purchase Date an amount
equal to the Purchase Price of such Bonds less the amount, if any,
available to pay the Purchase Price in accordance with Section 9.18 of the
Indenture from the proceeds of the remarketing of such Bonds or from
drawings on the Credit Facility, as reported by the Paying Agent. Bonds so
purchased with moneys furnished by the Borrower shall be Borrower Bonds.
Section 3.11. Letter of Credit. The Borrower has arranged,
concurrently with the original issuance and authentication of the Bonds,
for the delivery to the Paying Agent of the Letter of Credit having a term
expiring three years from the date of issuance, and providing for the
Paying Agent to be entitled to draw on or prior to the Termination Date (as
defined therein), an amount that is not less than the sum of the aggregate
principal amount (or that portion of the purchase price corresponding to
principal) of the Outstanding Bonds and the aggregate amount of interest
accrued on such Bonds (or that portion of the purchase price corresponding
to interest).
Section 3.12. Requirements for Delivery of a Substitute Credit
Facility. (A) The Borrower may, upon satisfaction of the requirements set
forth in this Section, at its option (except during the period between the
giving of notice of mandatory tender for purchase on account of the
expiration of the Credit Facility and the Purchase Date), provide for the
delivery to the Paying Agent of a substitute Credit Facility; provided,
however, that (1) the Credit Facility being replaced shall in no event be
terminated or released until the Borrower has given not less than
forty-five (45) days' written notice to the Authority, the Trustee, the
Paying Agent and the Remarketing Agent, and further the Paying Agent has
received the proceeds of all outstanding drawings on the Credit Facility
being replaced, (2) if any Bonds supported by the Credit Facility being
replaced are in the Weekly Mode, the Paying Agent has given not less than
(30) days' written notice of the termination or release of the Credit
Facility to owners of such Bonds in the Weekly Mode and (3) if any of the
Bonds supported by the Credit Facility being replaced are in the Flexible
Mode, such Credit Facility shall in no event be terminated or released
earlier than on the second Business Day after an Effective Date for all
such Bonds or such earlier day on or after such Effective Date on which the
full Purchase Price for such Bonds is received by the Paying Agent. Any
notice given pursuant to clause (1) or (2) above shall specify the
expiration date of the Credit Facility and the name of the entity providing
the substitute Credit Facility and shall advise that the Credit Facility
will terminate on the date stated in such notice.
(B) Each Credit Facility must:
(i) be an irrevocable, unconditional obligation of a
financial institution;
(ii) be on terms no less favorable to the Paying Agent than
the Letter of Credit and entitle the Paying Agent to draw upon or demand
payment and receive in immediately available funds an amount equal to the
sum of the principal amount of the Bonds supported by the Credit Facility,
any premium applicable thereto, and (A) forty-five (45) days' accrued
interest at the Maximum Interest Rate on the principal amount of Bonds then
Outstanding in the Weekly Mode, or (B) thirty-eight (38) days' accrued
interest at the Maximum Interest Rate on the principal amount of Bonds then
Outstanding in the Flexible Mode; and
(iii) provide for a term which may not expire in less than 360
days and which may not expire or be terminated prior to the fifth Business
Day after the mandatory tender for purchase as provided in Section
2.3(G)(1)(c) or 2.3(G)(2)(d) of the Indenture. The Borrower shall not
enter into any Reimbursement Agreement or agree to any amendment of a
Reimbursement Agreement which in any way limits the obligation of the Bank
to provide funds under the Credit Facility without the prior written
consent of 100% of the principal amount of the Bonds Outstanding and
entitled to the benefit thereof.
(C) No substitute Credit Facility may be delivered to the Trustee
for any purpose under this Agreement or the Indenture unless accompanied by
the following documents: (i) an opinion of counsel for the issuer of the
substitute Credit Facility to the effect that it constitutes a legal, valid
and binding obligation of the issuer enforceable in accordance with its
terms; (ii) an opinion of Bond Counsel to the effect that the issuance of a
substitute Credit Facility will not adversely affect the exclusion of
interest on the Bonds from gross income for federal income tax purposes and
that such Credit Facility is permitted under the Indenture; (iii) an
opinion of counsel to the Borrower, satisfactory to the Trustee stating
that the delivery of such substitute Credit Facility is authorized under
this Agreement and complies with the terms hereof; (iv) a certificate of
the Bank that all amounts due under the Reimbursement Agreement have been
paid and that the Company has fulfilled all its obligations arising out of
such Agreement; (v) an executed copy of the Reimbursement Agreement entered
into with respect to the substitute Credit Facility; (vi) copies of any
other documents, agreements or arrangements entered into directly or
indirectly between the Borrower and the entity issuing the substitute
Credit Facility with respect to the transactions contemplated by the
substitute Credit Facility and related Reimbursement Agreement; and (vii)
such other documents and opinions as the Trustee or the Authority may
reasonably request. Notice of the substitution, replacement, termination
or extension of a Credit Facility shall be sent by the Paying Agent to
Moody's and S&P and shall include the new expiration date of the Credit
Facility and the name of the entity providing the substitute Credit
Facility.
The substitute Credit Facility, related Reimbursement Agreement and
other documents, agreements and arrangements entered into and delivered
with respect to the delivery of a substitute Credit Facility shall not
include any provisions less favorable to the owners of the Bonds than the
provisions of the Credit Facility and related Reimbursement Agreement,
documents, agreements and arrangements, including provisions regarding the
acceleration of the Bonds, any right of setoff of assets of the account
party by the entity issuing the substitute Credit Facility, and any direct
or indirect pledge of collateral which is not pledged on a priority or
parity basis to the owners of the Bonds.
Section 3.13. Securities Laws. In any remarketing of Bonds under this
Agreement, the Borrower shall at all times comply with applicable federal
and state securities laws.
Section 3.14. New York Paying Agent. The Borrower agrees that if at
any time it becomes necessary or desirable to have a Paying Agent capable
of performing in New York, New York, it shall remove Shawmut Bank
Connecticut, National Association as Paying Agent and a successor shall be
appointed pursuant to Section 9.11 of the Indenture.
ARTICLE IV
THE PROJECT
Section 4.1. Completion of the Project. (A) The Borrower represents
and warrants that the Project has been completed.
(B) The Borrower affirms that it shall bear all of the costs and
expenses in connection with the preparation of the Financing Documents and
the Indenture, the preparation and delivery of any legal instruments and
documents necessary in connection therewith and their filing and recording,
if required, and all taxes and charges payable in connection with any of
the foregoing. Such costs and all other costs of the Project shall be paid
by the Borrower or from the Refunding Fund in the manner and to the extent
provided in the Indenture.
Section 4.2. No Warranty Regarding Condition, Suitability or Cost of
Project. Neither the Authority, nor the Trustee, nor any Bondholder makes
any warranty, either expressed or implied, as to the Project or its
condition or that it will be suitable for the Borrower's purposes or needs,
or that the insurance required hereunder will be adequate to protect the
Borrower's business or interest, or that the proceeds of the Bonds will be
sufficient to refund the Prior Obligations.
Section 4.3. Taxes. (A) The Borrower will pay when due all material
(1) taxes, assessments, water rates and sewer use or rental charges, (2)
payments in lieu thereof which may be required by law, and (3) governmental
charges and impositions of any kind whatsoever which may now or hereafter
be lawfully assessed or levied upon the Project or any part thereof, or
upon the rents, issues, or profits thereof, whether directly or indirectly.
With respect to special assessments or other governmental charges that may
lawfully be paid in installments over a period of years, the Borrower shall
be obligated to pay only such installments as are required to be paid
during the Term.
(B) The Borrower may, at its expense and in its own name, in good
faith contest any such taxes, assessments and other charges and payments in
lieu of taxes including assessments and, in the event of such contest, may
permit the taxes, assessments or other charges or payments in lieu of
taxes, including assessments so contested to remain unpaid, provided prior
written notice thereof has been given to the Trustee and reserves to the
extent required by the Reimbursement Agreement are maintained, during the
period of such contest and any appeal therefrom. Nothing herein shall
preclude the Borrower, at its expense and in its own name and behalf, from
applying for any tax exemption allowed by the federal government, the State
or any political or taxing subdivision thereof under any existing or future
provision of law which grants or may grant such tax exemption.
Section 4.4. Insurance. (A) The Borrower shall insure the Project
against loss or damage by fire, flood, lightning, windstorm, vandalism and
malicious mischief and other hazards, casualties, contingencies and
extended coverage risks in such amounts and in such manner as is required
by applicable federal or state law and shall pay when due the premiums
thereon.
(B) The Borrower further agrees that it will at all times carry
public liability insurance with respect to the Project to the extent
required by applicable federal or state law.
(C) As an alternative to the hazard insurance and public liability
insurance requirements of subsections (A) or (B) above the Borrower may
self-insure against hazard or public liability risks.
(D) The insurance coverage required by this Section may be
effected under overall blanket or excess coverage policies of the Borrower
or any affiliate and may be carried with any insurer other than an
unauthorized insurer under the Connecticut Unauthorized Insurers Act. The
Borrower shall furnish evidence satisfactory to the Authority or the
Trustee, promptly upon the request of either, that the required insurance
coverage is valid and in force.
Section 4.5. Compliance with Law. The Borrower will observe and
comply with all material laws, regulations, ordinances, rules, and orders
(including without limitation those relating to zoning, land use,
environmental protection, air, water and land pollution, wetlands, health,
equal opportunity, minimum wages, worker's compensation and employment
practices) of any federal, state, municipal or other governmental authority
relating to the Project except during any period during which the Borrower
at its expense and in its name shall be in good faith contesting its
obligation to comply therewith.
Section 4.6. Maintenance and Repair. At its own expense, the Borrower
will keep and maintain or cause the Project to be kept and maintained in
accordance with sound utility operating practice and in good condition,
working order and repair, will not commit or suffer any waste thereon, and
will make all material repairs and replacements thereto which may be
required in connection therewith. Nothing in this Section 4.6 shall (1)
apply to any portion of the Project beyond its useful or economic life or
(2) apply to the use and disposition by the Borrower of any part of the
Project in the ordinary course of its business.
ARTICLE V
CONDEMNATION
DAMAGE AND DESTRUCTION
Section 5.1. No Abatement of Payments Hereunder. If the Project shall
be damaged or either partially or totally destroyed, or if title to or the
temporary use of the whole or any part thereof shall be taken or condemned
by a competent authority for any public use or purpose, there shall be no
abatement or reduction in the amounts payable by the Borrower hereunder and
the Borrower shall continue to be obligated to make such payments. In any
such case the Borrower shall promptly give written notice thereof to the
Authority and the Trustee.
Section 5.2. Project Disposition Upon Condemnation, Damage or
Destruction. In the event of any such condemnation, damage or destruction
the Borrower shall:
(1) Comply with the applicable provisions of the Mortgage
Indentures and the Sharing Agreement concerning the repair,
reconstruction or restoration of the Project or give notice to the
Authority of its decision not to so comply; and/or
(2) If and as permitted by Section 8.1 hereof, exercise its
option to prepay its loan obligation in full.
Section 5.3. Application of Net Proceeds of Insurance or Condemnation.
The Net Proceeds from any insurance or condemnation award with respect to
the Project shall be applied as provided in the Mortgage Indentures, or, in
the event that the Mortgage Indentures have been discharged or are no
longer in effect, shall be applied at the direction of the Borrower with
the approval of the Authority.
ARTICLE VI
COVENANTS
Section 6.1. The Borrower to Maintain its Corporate Existence;
Conditions under which Exceptions Permitted. (A) The Borrower covenants and
agrees that, during the Term of this Agreement it will maintain its
corporate existence, will continue to be a corporation either organized
under the laws of or duly qualified to do business as a foreign corporation
in the State and in all jurisdictions necessary in the operation of its
business, will not dissolve or otherwise dispose of all or substantially
all of its assets and will not consolidate with or merge into another
corporation or permit one or more other corporations to consolidate with or
merge into it.
(B) The Borrower may, however, without violating the agreements
contained in this Section, consolidate with or merge into another
corporation or permit one or more other corporations to consolidate with or
merge into it, or sell or otherwise transfer to another corporation all or
substantially all of its assets as an entity and thereafter liquidate or
dissolve, if (a) the Borrower is the surviving, resulting or transferee
corporation, as the case may be, or (b) in the event the Borrower is not
the surviving, resulting or transferee corporation, as the case may be,
such corporation (i) is a solvent corporation either organized under the
laws of or duly qualified to do business as a foreign corporation subject
to service of process in the State and (ii) assumes in writing all of the
obligations of the Borrower herein, and under the Note.
Section 6.2. Indemnification, Payment of Expenses, and Advances. (A)
The Borrower agrees to protect, defend and hold harmless the Authority, the
State, agencies of the State and their members, servants, agents,
directors, officers and employees (the "Authority Indemnified Parties"),
and the Paying Agent, the Trustee and their officers, directors and
employees (the "Indemnified Parties") from any claim, demand, suit, action
or other proceeding and any liabilities, costs, and expenses whatsoever by
any person or entity whatsoever, arising or purportedly arising from or in
connection with the Financing Documents, the Indenture, the Bonds, or the
transactions contemplated thereby or actions taken thereunder by any person
(including without limitation the filing of any information, form or
statement with the Internal Revenue Service), except for any wilful and
material misrepresentation, wilful misconduct or gross negligence on the
part of the Authority Indemnified Parties or the Indemnified Parties and
except for any bad faith on the part of any Indemnified Party other than an
Authority Indemnified Party.
The Borrower agrees to indemnify and hold harmless any Indemnified Party
against any and all claims, demands, suits, actions or other proceedings
and all liabilities, costs and expenses whatsoever caused by any untrue
statement or misleading statement or alleged untrue statement or alleged
misleading statement of a material fact contained in the written
information provided by the Borrower in connection with the issuance of the
Bonds or incorporated by reference therein or caused by any omission or
alleged omission from such information of any material fact required to be
stated therein or necessary in order to make the statements made therein in
the light of the circumstances under which they were made, not misleading.
(B) The Authority and the Trustee shall not be liable for any
damage or injury to the persons or property of the Borrower or its members,
directors, officers, agents, servants or employees, or any other person who
may be about the Project due to any act or omission of any person other
than the Authority or the Trustee or their respective members, directors,
officers, agents, servants and employees.
(C) The Borrower releases each Indemnified Party from, agrees that
no Indemnified Party shall be liable for, and agrees to hold each
Indemnified Party harmless against, any attorney fees and expenses,
expenses or damages incurred because of any investigation, review or
lawsuit commenced by the Trustee or the Authority in good faith with
respect to the Financing Documents, the Indenture, the Bonds and the
Project Realty and the Project Equipment, and the Authority or the Trustee
shall promptly give written notice to the Borrower with respect thereto.
(D) All covenants, stipulations, promises, agreements and
obligations of the Authority and the Trustee contained herein shall be
deemed to be the covenants, stipulations, promises, agreements and
obligations of the Authority and the Trustee and not of any member,
director, officer or employee of the Authority or the Trustee in its
individual capacity, and no recourse shall be had for the payment of the
Bonds or for any claim based thereon or hereunder against any member,
director, officer or employee of the Authority or the Trustee or any
natural person executing the Bonds.
(E) In case any action shall be brought against one or more of
the Indemnified Parties based upon any of the above and in respect of which
indemnity may be sought against the Borrower, such Indemnified Party shall
promptly notify the Borrower in writing, enclosing a copy of all papers
served, but the omission so to notify the Borrower of any such action shall
not relieve it of any liability which it may have to any Indemnified Party
otherwise than under this Section 6.2. In case any such action shall be
brought against any Indemnified Party and it shall notify the Borrower of
the commencement thereof, the Borrower shall be entitled to participate in
and, to the extent that it shall wish, to assume the defense thereof with
counsel satisfactory to such Indemnified Party, and after notice from the
Borrower to such Indemnified Party of the Borrower's election so to assume
the defense thereof, the Borrower shall not be liable to such Indemnified
Party for any subsequent legal or other expenses attributable to such
defense, except as set forth below, other than reasonable costs of
investigation subsequently incurred by such Indemnified Party in connection
with the defense thereof. The Indemnified Party shall have the right to
employ its own counsel in any such action, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Party unless (i)
the employment of counsel by such Indemnified Party has been authorized by
the Borrower; (ii) the Indemnified Party shall have reasonably concluded
that there may be a conflict of interest between the Borrower and the
Indemnified Party in the conduct of the defense of such action (in which
case the Borrower shall not have the right to direct the defense of such
action on behalf of the Indemnified Party); or (iii) the Borrower shall not
in fact have employed counsel reasonably satisfactory to the Indemnified
Party to assume defense of such action; provided, however, that Borrower
shall not be responsible for the fees and expenses of more than one such
law firm unless an Indemnified Party shall have reasonably concluded that
there may be a conflict of interest between such Indemnified Party and any
other Indemnified Party requiring the use of separate counsel, or Borrower
has not employed counsel which is satisfactory to each Indemnified Party.
The Borrower shall not be liable for any settlement of any action or claim
effected without its consent.
(F) The Borrower also agrees to pay all reasonable or necessary
out-of-pocket expenses of the Authority in connection with the issuance of
the Bonds, the administration of the Financing Documents and the
enforcement of its rights thereunder.
(G) In the event the Borrower fails to pay any amount or perform
any act under the Financing Documents, the Trustee or the Authority may pay
the amount or perform the act, in which event the costs, disbursements,
expenses and reasonable counsel fees and expenses thereof, together with
interest thereon from the date the expense is paid or incurred at the prime
interest rate generally prevailing among banks in the State on the date of
the advance plus 1% shall be an additional obligation hereunder payable
upon demand by the Authority or the Trustee.
(H) Any obligation of the Borrower to the Authority under this
Section shall be separate from and independent of the other obligations of
the Borrower hereunder, and may be enforced directly by the Authority
against the Borrower irrespective of any action taken by or on behalf of
the owners of the Bonds.
(I) The obligations of the Borrower under this section,
notwithstanding any other provisions contained in the Financing Documents,
shall survive the termination of this Agreement and shall be recourse to
the Borrower, and for the enforcement thereof any Indemnified Party shall
have recourse to the general credit of the Borrower.
Section 6.3. Incorporation of Tax Regulatory Agreement; Payments Upon
Taxability. (A) For purpose of this Section, the term owner means the
Beneficial Owner of the Bonds so long as the Book-Entry System is in
effect.
(B) The representations, warranties, covenants and statements of
expectation of the Borrower set forth in the Tax Regulatory Agreement are
by this reference incorporated in this Agreement as though fully set forth
herein.
(C) If any owner of the Bonds receives from the Internal Revenue
Service a notice of assessment and demand for payment with respect to
interest on any Bond (except a notice and demand based upon the assertion
that the owner of the Bonds is a Substantial User or Related Person), an
appeal may be taken by the owner of the Bonds at the option of the
Borrower. Without limiting the generality of the foregoing, the Borrower
shall have the right to direct the Trustee to direct the owner of the Bonds
to take such appeal or not to take such appeal. In either case all
expenses of the appeal including reasonable counsel fees and expenses shall
be paid by the Borrower, and the owner of the Bonds and the Borrower shall
cooperate and consult with each other in all matters pertaining to any such
appeal, except that no owner of the Bonds shall be required to disclose or
furnish any non-publicly disclosed information, including, without
limitation, financial information and tax returns.
(D) Not later than 90 days following a Determination of
Taxability, the Borrower shall pay to the Trustee an amount sufficient,
when added to the amount then in the Debt Service Fund and available for
such purpose, to retire and redeem all Bonds then Outstanding, in
accordance with Section 2.4 of the Indenture.
(E) The obligation of the Borrower to make the payments provided
for in this Section shall be absolute and unconditional, and the failure of
the Authority or the Trustee to execute or deliver or cause to be executed
or delivered any documents or to take any action required under this
Agreement or otherwise shall not relieve the Borrower of its obligation
under this Section. Notwithstanding any other provision of this Agreement
or the Indenture, the Borrower's obligations under this Section shall
survive the termination of this Agreement and the Indenture.
(F) The Borrower's payment obligations under this Section are
further subject in all respects to the provisions of Section 3.7 and 3.8
hereof regarding the use of Priority Amounts and the effect of drawings
under the Letter of Credit.
(G) The occurrence of a Determination of Taxability shall not be
an Event of Default hereunder but shall require only the performance of the
obligations of the Borrower stated in this Section, the breach of which
shall constitute an Event of Default as provided in Section 7.1 hereof.
(H) At any time after the issuance of the Bonds, the Authority
shall, upon (1) the release of a published Revenue Ruling by the Internal
Revenue Service and the receipt by the Authority of an opinion of Bond
Counsel to the effect that such ruling may adversely affect the exclusion
of interest on the Bonds from gross income for federal income tax purposes,
and (2) receipt from the Borrower, within 30 days after the Authority has
mailed copies of such ruling and such opinion to the Borrower, of a written
request to proceed in accordance with this Section, proceed to apply for
and use its best efforts to obtain a ruling from the Internal Revenue
Service, pursuant to Revenue Procedure 88-33 or any other procedures
subsequently established by the Internal Revenue Service, as to the
qualification or continued qualification of interest on the Bonds for
exclusion from gross income for federal income tax purposes. The Authority
and the Borrower shall cooperate and consult with each other in all matters
pertaining to such ruling request. All expenses of the Authority in
connection with such application including reasonable counsel fees shall be
paid by the Borrower.
Section 6.4. Covenant as to Project Use. (A) The Borrower agrees that
it shall promptly notify the Authority and the Trustee upon the occurrence
of any of the following events, in each case, whether as a result of a
determination by the Borrower, the Connecticut Department of Public Utility
Control or the United States Nuclear Regulatory Commission or its
successors,
(1) Abandonment of a substantial portion of the Project at
any one time or in the aggregate;
(2) Any disposition of all or any part of the Borrower's
ownership interest in the Project other than (i) to a company which is part
of Northeast Utilities, (ii) in connection with a merger, consolidation, or
sale of assets permitted by Section 6.1(B) hereof, (iii) in connection with
any form of financing (including without limitation the grant of a mortgage
or security interest or sale in connectin with a sale and lease back) by
the Borrower, (iv) in any case in which the remaining aggregate ownership
interest of Northeast Utilities is greater than 50 percent, (v) of any
portion of the Project beyond its useful or economic life, or (vi) in the
ordinary course of the Borrower's business. For purposes of this
paragraph, "Northeast Utilities" means Northeast Utilities, its
subsidiaries (whether direct or indirect) and their successors and assigns;
or
(3) Any determination, following damage or destruction of
all or substantially all of the Project, not to repair, reconstruct,
relocate or replace the Project.
(B) In the event that the Authority receives notice from the
Borrower of the occurrence of any event described in subsection (A) of this
Section 6.4, the Borrower agrees that the Authority may, not later than one
year after the receipt of such notice from the Borrower, declare that
payment of all amounts due under the Financing Documents shall be
accelerated by notice to the Borrower and the Trustee stating that such
amounts are due and payable by the Borrower in full on a date selected by
the Borrower and set forth in a notice to the Trustee and the Authority,
which date shall be not later than three years from the date of mailing of
the Authority's acceleration notice to the Borrower.
(C) Any failure of the Borrower to comply with the provisions
of this Section shall be subject to the provisions of Section 7.3 hereof.
Section 6.5. Further Assurances and Corrective Instruments. The
Authority and the Borrower agree that they will, from time to time,
execute, acknowledge and deliver, or cause to be executed, acknowledged and
delivered, such supplements hereto and such further instruments as may
reasonably be required for correcting any inadequate or incorrect
description of the Project Realty or Project Equipment or for carrying out
the intention of or facilitating the performance of this Agreement.
Section 6.6. Covenant by Borrower as to Compliance with Indenture.
The Borrower covenants and agrees that it will comply with the provisions
of the Indenture with respect to the Borrower and that the Trustee and the
Bondholders shall have the power and authority provided in the Indenture.
The Borrower further agrees to aid in the furnishing to the Authority or
the Trustee of opinions that may be required under the Indenture. The
Borrower covenants and agrees that the Trustee shall be entitled to and
shall have all the rights, including the right to enforce against the
Borrower the provisions of the Financing Documents, pertaining to the
Trustee notwithstanding the fact that the Trustee is not a party to the
Financing Documents.
Section 6.7. Assignment of Agreement or Note. (A) The Borrower may
not assign its rights, interests or obligations hereunder or under the Note
except as may be permitted pursuant to Section 6.1(B) hereof.
(B) The Authority agrees that it will not assign or transfer any
of the Financing Documents or the revenues and other receipts, funds and
monies to be received thereunder during the Term except to the Trustee as
provided in this Agreement and the Indenture.
Section 6.8. Inspection. The Authority, the Trustee and their duly
authorized agents shall have (1) the right at all reasonable times to enter
upon and to examine and inspect the Project and (2) such rights of access
thereto as may be reasonably necessary for the proper maintenance and
repair thereof in the event of failure by the Borrower to perform its
obligations under this Agreement, subject, in each case, to all applicable
laws, rules, regulations, orders and guidelines. The Authority and the
Trustee shall also be permitted, at all reasonable times, to examine the
books and records of the Borrower with respect to the Project.
Section 6.9. Default Notification. Within seven (7) days after
becoming aware of any condition or event which constitutes, or with the
giving of notice or the passage of time would constitute, an Event of
Default or an "Event of Default" under Section 8.1 of the Indenture, the
Borrower shall deliver to the Authority, the Bank, if any, the Remarketing
Agent, the Paying Agent and the Trustee a notice stating the existence and
nature thereof and specifying the corrective steps, if any, the Borrower
is taking with respect thereto.
Section 6.10. Covenant Against Discrimination. (A) The Borrower in the
performance of this Agreement will not discriminate or permit
discrimination against any person or group of persons on the grounds of
race, color, religion, national origin, age, sex, sexual orientation,
marital status, physical or learning disability, political beliefs, mental
retardation or history of mental disorder in any manner prohibited by the
laws of the United States or of the State.
(B) The Borrower will comply with the provisions of the resolution
adopted by the Authority on June 14, 1977, as amended, and the policy of
the Authority implemented pursuant thereto concerning the promotion of
equal employment opportunity through affirmative action plans. The
resolution requires that all borrowers receiving financial assistance from
the Authority adopt and implement an affirmative action plan prior to the
closing of the loan. The plan shall be updated annually as long as the
Bonds remain Outstanding.
Section 6.11. Authority Costs and Expenses. The Authority agrees that
it shall in all instances act in good faith in incurring costs, expenses
and legal fees in connection with the transactions contemplated by this
Agreement and the Indenture.
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.1. Events of Default. Any one or more of the following
shall constitute an "Event of Default" hereunder:
(1) Any material representation or warranty made by the Borrower
in the Financing Documents or any certificate, statement, data or
information furnished in writing to the Authority or the Trustee by the
Borrower in connection with the closing of the initial issue of the Bonds
or included by the Borrower in its application to the Authority for
assistance proves at any time to have been incorrect when made in any
material respect.
(2) Failure by the Borrower to pay any amount that has become
due and payable with respect to the Bonds or any other amount due and
payable pursuant to the Financing Documents and the continuance of such
failure for more than five Business Days.
(3) Failure by the Borrower to comply with the default
notification provisions of Section 6.9 hereof.
(4) The occurrence of an "Event of Default" under Section 8.1(A)
of the Indenture (other than an occurrence under Section 8.1(A)(2)(a)).
(5) Failure by the Borrower to observe or perform any covenant,
condition or agreement hereunder or under the Financing Documents except
those referred to above) and (a) continuance of such failure for a period
of sixty days after receipt by the Borrower of written notice specifying
the nature of such failure or (b) if by reason of the nature of such
failure the same cannot be remedied within the sixty day period, the
Borrower fails to proceed with reasonable diligence after receipt of the
notice to cure the failure.
(6) The Borrower shall (a) apply for or consent to the appointment
of a receiver, trustee, liquidator or custodian or the like of itself or of
its property, (b) admit in writing its inability to pay its debts generally
as they become due, (c) make a general assignment for the benefit of
creditors, (d) be adjudicated a bankrupt or insolvent, or (e) commence a
voluntary case under the Federal bankruptcy laws of the United States of
America or file a voluntary petition or answer seeking reorganization, an
arrangement with creditors or an order for relief or seeking to take
advantage of any insolvency law or file an answer admitting the material
allegations of a petition filed against it in any bankruptcy,
reorganization or insolvency proceeding; or corporate action shall be taken
by it for the purpose of effecting any of the foregoing; or if without the
application, approval or consent of the Borrower, a proceeding shall be
instituted in any court of competent jurisdiction, seeking in respect of
the Borrower an adjudication in bankruptcy, reorganization, dissolution,
winding up, liquidation, a composition or arrangement with creditors, a
readjustment of debts, the appointment of a trustee, receiver, liquidator
or custodian or the like of the Borrower or of all or any substantial part
of its assets, or other like relief in respect thereof under any bankruptcy
or insolvency law, and, if such proceeding is being contested by the
Borrower in good faith, the same shall continue undismissed, or pending and
unstayed, for any period of 90 consecutive days.
Section 7.2. Remedies on Default. (A) Whenever any Event of Default
shall have occurred, the Trustee, or the Authority where so provided
herein, may take any one or more of the following actions:
(1) The Trustee, as and to the extent provided in Article VIII of
the Indenture, may cause all amounts payable under the Financing Documents
to be immediately due and payable without notice or demand of any kind,
whereupon the same shall become immediately due and payable.
(2) The Authority, without the consent of the Trustee or any
Bondholder, may proceed to enforce the obligations of the Borrower to
the Authority under this Agreement.
(3) The Trustee may take whatever action at law or in equity it
may have to collect the amounts then due and thereafter to become due, or
to enforce the performance or observance of the obligations, agreements,
and covenants of the Borrower under the Financing Documents.
(B) In the event that any Event of Default or any proceeding taken
by the Authority (or by the Trustee on behalf of the Authority) thereon
shall be waived or determined adversely to the Authority, then the Event of
Default shall be annulled and the Authority and the Borrower shall be
restored to their former rights hereunder, but no such waiver or
determination shall extend to any subsequent or other default or impair any
right consequent thereon.
Section 7.3 Remedies Upon Project Use Default. (A) If the Borrower
shall fail to notify the Authority of the occurrence of any event set forth
in Section 6.4(A) hereof within 60 days of the determination thereof as
provided in Section 6.4(A), the Authority may, not later than one year
after obtaining knowledge of such determination and so long as such failure
is continuing, send a notice to the Trustee and the Borrower calling for
the acceleration of all of the Borrower's obligations under the Financing
Documents and for the redemption of all of the Bonds Outstanding. Any such
notice (i) shall set forth in reasonable detail the event giving rise to
the Borrower's obligation under Section 6.4(A), (ii) shall be accompanied
by such evidence thereof as shall be acceptable to the Trustee, and (iii)
shall specify the dates upon which (a) notice of redemption of the Bonds is
to be given by the Trustee (which shall not be less than 180 days from the
date of the notice being given to the Trustee by the Authority) and (b) the
date redemption of Bonds is to occur (which shall be a date at least thirty
days after notice of redemption is to be given by the Trustee).
(B) If, after receipt of notice from the Authority as
provided in Section 6.4(B), the Borrower shall fail to select a date for
redemption of all Outstanding Bonds, the Authority may, not earlier than 60
days prior to the date which is three years after the date notice was
mailed to the Borrower as provided in Section 6.4(B), send a notice to the
Trustee and the Borrower calling for the redemption of all of the Bonds
then Outstanding. Any such notice shall specify the date that notice of
redemption is to be given by the Trustee and the date that such redemption
is to occur.
(C) On or before the redemption date specified by the Trustee
in its notice of redemption pursuant to this Section, the Borrower shall
pay, as a final loan payment hereunder, a sum sufficient, together with
other funds on deposit with the Trustee and available for such purpose, to
redeem all Bonds then Outstanding under the Indenture at 100% of the
principal amount thereof plus accrued interest to the redemption date. The
Borrower shall also pay or provide for all reasonable and necessary fees of
the Trustee and any Paying Agent accrued and to accrue through the date of
redemption of the Bonds and all other amounts due or to become due under
the Financing Documents.
Section 7.4. No Duty to Mitigate Damages. Unless otherwise required
by law, neither the Authority, the Trustee nor any Bondholder shall be
obligated to do any act whatsoever or exercise any diligence whatsoever to
mitigate the damages to the Borrower if an Event of Default shall occur.
Section 7.5. Remedies Cumulative. No remedy herein conferred upon or
reserved to the Authority or the Trustee is intended to be exclusive of any
other available remedy or remedies but each and every such remedy shall be
cumulative and shall be in addition to every remedy given under this
Agreement or now or hereafter existing at law or in equity or by statute.
Delay or omission to exercise any right or power accruing upon any default
or failure by the Authority or the Trustee to insist upon the strict
performance of any of the covenants and agreements herein set forth or to
exercise any rights or remedies upon default by the Borrower hereunder
shall not impair any such right or power or be considered or taken as a
waiver or relinquishment for the future of the right to insist upon and to
enforce, by injunction or other appropriate legal or equitable remedy,
strict compliance by the Borrower with all of the covenants and conditions
hereof, or of the right to exercise any such rights or remedies, if such
default by the Borrower be continued or repeated.
ARTICLE VIII
PREPAYMENT PROVISIONS
Section 8.1. Optional Prepayment. (A) The Borrower shall have, and is
hereby granted, the option to prepay its loan obligation and to cause the
corresponding optional redemption of the Bonds pursuant to Section 2.4(A)
of the Indenture at such times, in such amounts, and with such premium, if
any, for such optional redemption as set forth in the forms of the Bonds,
by delivering a written notice to the Trustee in accordance with Section
8.2 hereof, with a copy to the Authority, setting forth the amount to be
prepaid, the amount of Bonds requested to be redeemed with the proceeds of
such prepayment, and the date on which such Bonds are to be redeemed. Such
prepayment must be sufficient to provide monies for the payment of interest
and Redemption Price in accordance with the terms of the Bonds requested to
be redeemed with such prepayment and all other amounts then due under the
Financing Documents. In the event of any complete prepayment of its loan
obligation, the Borrower shall, at the time of such prepayment, also pay or
provide for the payment of all reasonable or necessary fees and expenses of
the Authority, the Trustee and the Paying Agent accrued and to accrue
through the final payment of all the Bonds. Any such prepayments shall be
applied to the redemption of Bonds in the manner provided in Section 2.4(A)
of the Indenture, and credited against payments due hereunder in the same
manner.
(B) The Borrower shall have, and is hereby granted, the option to
prepay its loan obligation in full at any time without premium if any of
the following events shall have occurred, as evidenced in each case by the
filing with the Trustee of a certificate of an Authorized Representative of
the Borrower to the effect that one of such events has occurred and is
continuing, and describing the same:
(1) Damage or destruction to any of the Plants or the Project to
such extent that in the opinion of the Borrower (expressed in a resolution
adopted by the Board of Directors of the Borrower (a "Board Resolution"))
and of an architect or engineer acceptable to the Borrower (who may be an
employee of the Borrower), both filed with the Authority and the Trustee,
(1) any of the Plants or the Project, as the case may be, cannot be
reasonably repaired, rebuilt, or restored within a period of six (6) months
to their condition immediately preceding such damage or destruction, or (2)
normal operations are thereby prevented from being carried on at any of the
Plants for a period of not less than six (6) months.
(2) Loss of title to or use of a substantial part of any of the
Plants or the Project as a result of the exercise of the power of
eminent domain which, in the opinion of the Borrower (expressed in a
Board Resolution) and of an architect or engineer acceptable to the
Borrower (who may be an employee of the Borrower), both filed with the
Authority and the Trustee, prevents or is likely to prevent normal
operations from being carried on at any of the Plants for a period of
not less than six (6) months.
(3) A substantial part of any of the Plants or the Project shall
become obsolete in the opinion of the Borrower (expressed in a Board
Resolution).
(4) A change in the Constitution of the State of Connecticut or
of the United States of America or legislative or executive action (whether
local, state, or federal) or a final decree, judgment or order of any court
or administrative body (whether local, state, or federal) that causes this
Agreement to become void or unenforceable or impossible of performance in
accordance with the intent and purpose of the parties as expressed herein
or, imposes unreasonable burdens or excessive liabilities upon the Borrower
with respect to any of the Plants or the Project or the operation thereof.
(5) The operation of any of the Plants or the Project shall have
been enjoined or shall otherwise have been prohibited by any order,
decree, rule or regulation of any court or of any local, state, or
federal regulatory body, administrative agency or other governmental
body for a period of not less than six (6) months.
(6) Changes which the Borrower cannot reasonably control in the
economic availability of fuel, materials, supplies, labor, equipment, or
other properties or things necessary for the efficient operation of any of
the Plants or the Project shall have occurred which, in the judgment of the
Borrower (expressed in a Board Resolution), render the continued operation
of any of the Plants uneconomical.
In any such case the final loan payment shall be a sum sufficient, together
with other funds deposited with Trustee and available for such purpose, to
redeem all Bonds then outstanding under the Indenture at the redemption
price of 100% of the principal amount thereof plus accrued interest to the
redemption date or dates and all other amounts then due under the Financing
Documents, and the Borrower shall also pay or provide for all reasonable or
necessary fees and expenses of the Trustee and Paying Agent and the
Remarketing Agent accrued and to accrue through final payment for the
Bonds. The Borrower shall deliver a written notice to the Trustee, with a
copy to the Authority, requesting the redemption of the Bonds under the
Indenture, which notice shall have attached thereto the applicable
certificate of the Authorized Representative of the Borrower. The
Borrower's right to so request the redemption of the Bonds upon the
occurrence of any single event listed in this Section 8.1(B) shall expire
six (6) months, and any such redemption shall occur within nine (9) months,
after such event occurs.
Section 8.2. Notice by the Borrower of Optional Prepayment. The
Borrower shall exercise its option to prepay its loan obligation pursuant
to Section 8.1(A) or (B) by giving written notice signed by an Authorized
Representative of the Borrower to the Trustee, the Authority, the Paying
Agent, and the Remarketing Agent at least five (5) days before the
prepayment date if Bonds to be redeemed with the amounts to prepaid
pursuant to the Indenture are then in the Flexible Mode, and forty-five
(45) days before the prepayment date if Bonds to be redeemed with the
amounts so prepaid pursuant to the Indenture are then in any other Mode.
Section 8.3. Mandatory Prepayment on Taxability. The Borrower shall
pay or cause the prepayment of its loan obligation following a
Determination of Taxability in the manner provided in Section 6.3 of this
Agreement.
Section 8.4. Mandatory Prepayment Upon Occurrence of Certain Events.
The Borrower shall pay or cause the prepayment of its loan obligation,
prior to the maturity of the Bonds, on a date selected by the Borrower,
which date shall be not later than three years after the date of mailing to
the Borrower of notice from the Authority of the Authority's election to
accelerate the Borrower's loan obligation hereunder as provided in Sections
6.4 and 7.3 hereof.
ARTICLE IX
GENERAL
Section 9.1. Indenture. (A) Monies received from the sale of the Bonds
and all loan payments made by the Borrower and all other monies received by
the Authority or the Trustee under the Financing Documents shall be applied
solely and exclusively in the manner and for the purposes expressed and
specified in the Indenture and in the Bonds and as provided in this
Agreement.
(B) The Borrower shall have and may exercise all the rights,
powers and authority given the Borrower in the Indenture and in the Bonds,
and the Indenture and the Bonds shall not be modified, altered or amended
in any manner which adversely affects such rights, powers and authority or
otherwise adversely affects the Borrower without the prior written consent
of the Borrower.
Section 9.2. Benefit of and Enforcement by Bondholders. The Authority
and the Borrower agree that this Agreement is executed in part to induce
the purchase by others of the Bonds and for the further securing of the
Bonds, and accordingly that all covenants and agreements on the part of the
Authority and the Borrower as to the amounts payable with respect to the
Bonds hereunder are hereby declared to be for the benefit of the holders
from time to time of the Bonds and may be enforced as provided in the
Indenture on behalf of the Bondholders by the Trustee.
Section 9.3. Force Majeure. In case by reason of force majeure either
party hereto shall be rendered unable wholly or in part to carry out its
obligations under this Agreement, then except as otherwise expressly
provided in this Agreement, if such party shall give notice and full
particulars of such force majeure in writing to the other party within a
reasonable time after occurrence of the event or cause relied on, the
obligations of the party giving such notice, other than the obligation of
the Borrower to make the payments required under the terms hereof or of the
Note, so far as they are affected by such force majeure, shall be suspended
during the continuance of the inability then claimed which shall include a
reasonable time for the removal of the effect thereof, but for no longer
period, and such parties shall endeavor to remove or overcome such
inability with all reasonable dispatch. The term "force majeure", as
employed herein, means acts of God, strikes, lockouts or other industrial
disturbances, acts of the public enemy, orders of any kind of the
Government of the United States, of the State or any civil or military
authority, insurrections, riots, epidemics, landslides, lightning,
earthquakes, volcanoes, fires, hurricanes, tornadoes, storms, floods,
washouts, droughts, arrests, restraining of government and people, civil
disturbances, explosions, partial or entire failure of utilities, shortages
of labor, material, supplies or transportation, or any other similar or
different cause not reasonably within the control of the party claiming
such inability. It is understood and agreed that the settlement of
existing or impending strikes, lockouts or other industrial disturbances
shall be entirely within the discretion of the party having the difficulty
and that the above requirements that any force majeure shall be reasonably
beyond the control of the party and shall be remedied with all reasonable
dispatch shall be deemed to be fulfilled even though such existing or
impending strikes, lockouts and other industrial disturbances may not be
settled and could have been settled by acceding to the demands of the
opposing person or persons.
Section 9.4. Amendments. This Agreement may be amended only with the
concurring written consent of the Trustee and, if required by the
Indenture, of the owners of the Bonds given in accordance with the
provisions of the Indenture.
Section 9.5. Notices. All notices, certificates or other
communications hereunder shall be sufficiently given and shall be deemed
given when delivered or when mailed by registered or certified mail,
postage prepaid, addressed as follows: if to the Authority, at 845 Brook
Street, Rocky Hill, Connecticut 06067, Attention: Program Manager - Loan
Administration; if to the Borrower, c/o Northeast Utilities Service Company
at 107 Selden Street, Berlin, Connecticut 06037, Attention: Assistant
Treasurer; if to the Remarketing Agent, Goldman Sachs & Co., 85 Broad
Street, New York, New York 10004, Attention: Municipal Bond Department; if
to the Paying Agent, Shawmut Bank Connecticut, National Association, 777
Main Street, Hartford, Connecticut 06115, Attention: Corporate Trust
Department; and if to the Trustee, Shawmut Bank Connecticut, National
Association, 777 Main Street, Hartford, Connecticut 06115, Attention:
Corporate Trust Department. A duplicate copy of each notice, certificate
or other communication given hereunder by either the Authority or the
Borrower to the other shall also be given to the Trustee. The Authority,
the Borrower, the Remarketing Agent, the Paying Agent and the Trustee may,
by notice given hereunder, designate any further or different addresses to
which subsequent notices, certificates or other communications shall be
sent.
Section 9.6. Prior Agreements Superseded. This Agreement, together
with all agreements executed by the parties concurrently herewith or in
conjunction with the sale of the Bonds, shall completely and fully
supersede all other prior understandings or agreements, both written and
oral, between the Authority and the Borrower relating to the lending of
money and the Project, including those contained in any commitment letter
executed in anticipation of the issuance of the Bonds.
Section 9.7. Execution of Counterparts. This Agreement may be
executed simultaneously in several counterparts each of which shall be an
original and all of which shall constitute but one and the same instrument.
Section 9.8. Time. All references to times of day in this Agreement
are references to New York City time.
IN WITNESS WHEREOF, the Authority has caused this Agreement to be
executed in its corporate name by a duly Authorized Representative, and the
Borrower has caused this Agreement to be executed in its corporate name by
its duly authorized officer all as of the date first above written.
Connecticut Development Authority
By /s/ Stanley R. Killinger
Name: Stanley R. Killinger
Authorized Representative
The Connecticut Light and
Power Company
By /s/ Bruce F. Garelick
Name: Bruce F. Garelick
Title: Assistant Treasurer
APPENDIX B
Description of Project Equipment and Project Realty
Exhibit 4.2.23
LETTER OF CREDIT
AND REIMBURSEMENT AGREEMENT
Dated as of September 1, 1993
Among
THE CONNECTICUT LIGHT AND
POWER COMPANY
as Account Party
DEUTSCHE BANK AG, NEW YORK BRANCH
as Issuing Bank and as Agent
BANK OF MONTREAL
CREDIT SUISSE
as Co-Agents
and
THE PARTICIPATING BANKS
REFERRED TO HEREIN
Relating to
Connecticut Development Authority
$245,500,000 Pollution Control Revenue Refunding Bonds
(The Connecticut Light and Power Company Project - 1993A Series)
TABLE OF CONTENTS
Section Page
PRELIMINARY STATEMENT
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01 Certain Defined Terms . . . . . . . . . . . . 2
1.02 Computation of Time Periods . . . . . . . . . 15
1.03 Accounting Terms. . . . . . . . . . . . . . . 15
1.04 Computations of Outstandings. . . . . . . . . 15
ARTICLE II
THE LETTER OF CREDIT
2.01 The Letter of Credit. . . . . . . . . . . . . 16
2.02 Termination of the Commitments. . . . . . . . 16
2.03 Commissions and Fees . . . . . . . . . . . . 16
2.04 Reinstatement of the Letter of Credit . . . . 16
2.05 Extension of the Stated Termination Date. . . 18
ARTICLE III
REIMBURSEMENT AND ADVANCES
3.01 Reimbursement on Demand . . . . . . . . . . . 18
3.02 Advances . . . . . . . . . . . . . . . . . . 19
3.03 Interest on Advances. . . . . . . . . . . . . 20
3.04 Conversion of Term Advances . . . . . . . . . 22
3.05 Other Terms Relating to the
Making and Conversion of Advances . . . . . . 22
3.06 Prepayment of Advances. . . . . . . . . . . . 23
3.07 Participation; Reimbursement of Issuing Bank. 24
ARTICLE IV
PAYMENTS
4.01 Payments and Computations . . . . . . . . . . 26
4.02 Default Interest. . . . . . . . . . . . . . . 28
4.03 Yield Protection. . . . . . . . . . . . . . . 28
4.04 Sharing of Payments, Etc. . . . . . . . . . . 33
4.05 Taxes . . . . . . . . . . . . . . . . . . . . 34
4.06 Obligations Absolute. . . . . . . . . . . . . 36
4.07 Evidence of Indebtedness . . . . . . . . . . 37
ARTICLE V
CONDITIONS PRECEDENT
5.01 Conditions Precedent to the Issuance of
the Letter of Credit . . . . . . . . . . . . 38
5.02 Additional Conditions Precedent to the Issuance of
the Letter of Credit . . . . . . . . . . . . 41
5.03 Conditions Precedent to Initial Advances
and Conversions of Advances . . . . . . . . 42
5.04 Conditions Precedent to Term Advances . . . . 42
5.05 Reliance on Certificates. . . . . . . . . . . 43
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.01 Representations and Warranties of the Account Party 43
ARTICLE VII
COVENANTS OF THE ACCOUNT PARTY
7.01 Affirmative Covenants . . . . . . . . . . . . 48
7.02 Negative Covenants. . . . . . . . . . . . . . 51
7.03 Reporting Obligations . . . . . . . . . . . . 56
ARTICLE VIII
DEFAULTS
8.01 Events of Default . . . . . . . . . . . . . . 59
8.02 Remedies Upon Events of Default . . . . . . . 61
ARTICLE IX
THE AGENT, THE CO-AGENTS, THE PARTICIPATING BANKS
AND THE ISSUING BANK
9.01 Authorization of Agent; Actions of Agent
and Issuing Bank . . . . . . . . . . . . . . 63
9.02 Reliance, Etc.. . . . . . . . . . . . . . . . 63
9.03 The Agent, the Co-Agents, the Issuing Bank and Affiliates
64
9.04 Participating Bank Credit Decision. . . . . . 64
9.05 Indemnification . . . . . . . . . . . . . . . 65
9.06 Successor Agent . . . . . . . . . . . . . . . 65
9.07 Issuing Bank. . . . . . . . . . . . . . . . . 65
ARTICLE X
MISCELLANEOUS
10.01 Amendments, Etc.. . . . . . . . . . . . . . . 66
10.02 Notices, Etc. . . . . . . . . . . . . . . . . 67
10.03 No Waiver of Remedies . . . . . . . . . . . . 68
10.04 Costs, Expenses and Indemnification . . . . . 68
10.05 Right of Set-Off. . . . . . . . . . . . . . . 70
10.06 Binding Effect; Assignments and Participants. 71
10.07 Relation of the Parties; No Beneficiary . . . 72
10.08 Issuing Bank Not Liable . . . . . . . . . . . 72
10.09 Confidentiality . . . . . . . . . . . . . . . 73
10.10 Waiver of Jury Trial. . . . . . . . . . . . . 74
10.11 Governing Law . . . . . . . . . . . . . . . . 74
10.12 Execution in Counterparts . . . . . . . . . . 75
SCHEDULES
Schedule I - Applicable Lending Offices
Schedule II - Pending Actions
EXHIBITS
Exhibit 1.01A - Form of Letter of Credit
Exhibit 1.01B - Form of Participation Assignment
Exhibit 1.01C - Form of Pledge Amendment
Exhibit 5.01A - Form of Opinion of Day, Berry & Howard,
counsel to the Account Party
Exhibit 5.01B - Form of Opinion of King & Spalding,
special New York counsel to the Agent and the
Issuing Bank
LETTER OF CREDIT AND
REIMBURSEMENT AGREEMENT
Dated as of September 1, 1993
THIS LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT (this Agreement ) is
made by and among:
(i) THE CONNECTICUT LIGHT AND POWER COMPANY, a corporation
duly organized and validly existing under the laws of the State of
Connecticut (the Account Party );
(ii) DEUTSCHE BANK AG, NEW YORK BRANCH ( Deutsche Bank ), as
issuer of the Letter of Credit (the Issuing Bank );
(iii) BANK OF MONTREAL and CREDIT SUISSE, as Co-Agents (the
Co- Agents );
(iv) The Participating Banks (as hereinafter defined) from
time to time party hereto; and
(v) Deutsche Bank as agent (together with any successor
agent hereunder, the Agent ) for such Participating Banks and the Issuing
Bank.
PRELIMINARY STATEMENT
The Connecticut Development Authority (the Issuer ) proposes to
issue, pursuant to an Indenture of Trust, dated as of September 1, 1993 (as
supplemented or amended from time to time with the written consent of the
Issuing Bank, the Indenture ), made to Shawmut Bank Connecticut, National
Association, as trustee (such entity, or its successor as trustee, being
the Trustee ), $245,500,000 aggregate principal amount of its Pollution
Control Revenue Refunding Bonds (The Connecticut Light and Power Company
Project - 1993A Series) (the Bonds ). Pursuant to the Indenture and the
Loan Agreement, dated as of September 1, 1993, between the Issuer and the
Account Party (the Loan Agreement ), the Account Party has requested the
Issuing Bank to issue its irrevocable letter of credit in favor of the
Paying Agent (as defined below), in substantially the form of Exhibit 1.01A
hereto (such letter of credit, as it may from time to time be extended or
modified pursuant to the terms of this Agreement, being the Letter of
Credit ), in the amount of $249,133,000 (the Stated Amount ), of which (i)
$245,500,000 shall support the payment of principal of the Bonds (or the
portion of the purchase or redemption price of the Bonds corresponding to
principal), (ii) $3,633,000 shall support the payment of up to 45 days'
interest on the principal amount of the Bonds (or the portion of the
purchase or redemption price of the Bonds corresponding to interest),
computed at a maximum interest rate of 12% per annum on the basis of the
actual days elapsed and a year of 365 or 366 days (as applicable) and (iii)
$0.00 shall support the payment of premium on the Bonds. The Issuing Bank
has agreed to issue the Letter of Credit subject to the terms and
conditions set forth herein (including the terms and conditions relating to
the rights and obligations of the Participating Banks).
NOW, THEREFORE, in consideration of the premises and in order to
induce the Issuing Bank to issue the Letter of Credit and the Participating
Banks to participate in the Letter of Credit and make advances hereunder,
the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. In addition to the terms
defined in the Preliminary Statement hereto, as used in this Agreement, the
following terms shall have the following meanings (such meanings to be
applicable to the singular and plural forms of the terms defined):
Advances means Initial Advances and Term Advances,
without differentiation; individually, an Advance .
Affiliate means, with respect to any Person, any other
Person directly or indirectly controlling (including, but not limited to
all directors and officers of such Person), controlled by, or under direct
or indirect common control with such Person. A Person shall be deemed to
control another entity if such Person possesses, directly or indirectly,
the power to direct or cause the direction of the management and policies
of such entity, whether through the ownership of voting securities, by
contract or otherwise.
Alternate Base Rate means, for any Interest Period or
any other period, a fluctuating interest rate per annum equal at all times
to the highest from time to time of:
(a) the rate of interest announced publicly by
Deutsche Bank in New York, New York, from time to time, as Deutsche Bank's
prime rate; and
(b) 1/2 of one percent per annum above the Federal
Funds Rate from time to time.
Each change in the Alternate Base Rate shall take effect
concurrently with any change in such prime rate or Federal Funds Rate, as
the case may be.
Applicable Lending Office means, with respect to each
Participating Bank, (i)(A) such Participating Bank's Domestic Lending
Office in the case of a Base Rate Advance and (B) such Participating
Bank's Eurodollar Lending Office in the case of a Eurodollar Rate
Advance, in each case as specified opposite such Participating Bank's name
on Schedule I hereto (in the case of a Participating Bank initially party
to this Agreement) or in the Participation Assignment pursuant to which
such Participating Bank became a Participating Bank (in the case of any
other Participating Bank), or (ii) such other office or affiliate of such
Participating Bank as such Participating Bank may from time to time specify
to the Account Party and the Agent.
Available Amount in effect at any time means the
maximum aggregate amount available to be drawn at such time under the
Letter of Credit, the determination of such maximum amount to assume
compliance with all conditions for drawing and no reduction for (i) any
amount drawn by the Paying Agent to make a regularly scheduled payment of
interest on the Bonds (unless such amount will not be reinstated under the
Letter of Credit) or (ii) any amount not available to be drawn because
Bonds are held by or for the account of the Account Party and/or in pledge
for the benefit of the Issuing Bank.
Base Rate Advance means an Advance in respect of which
the Account Party has selected in accordance with Article III hereof, or
this Agreement otherwise provides for, interest to be computed on the basis
of the Alternate Base Rate.
Bonds has the meaning assigned to that term in the
Preliminary Statement.
Business Day means a day of the year that is not a
Saturday or Sunday or a day on which banks are authorized to close in New
York City and, (i) if the applicable Business Day relates to any Eurodollar
Rate Advance, is a day on which dealings are carried on in the London
interbank market and/or (ii) if the applicable Business Day relates to any
action to be taken by, or notice furnished to or by, or payment to be made
to or by, the Trustee, the Paying Agent or the Remarketing Agent, is a day
on which (A) banks located in Hartford, Connecticut and New York, New York
are not required or authorized to remain closed, (B) banking institutions
in all of the cities in which the principal offices of the Issuing Bank,
the Trustee, the Paying Agent and, if applicable, the Remarketing Agent are
located are not required or authorized to remain closed and (C) the New
York Stock Exchange, Inc. is not closed.
CL&P Indenture has the meaning assigned to that term
in Section 7.02(a)(i)(A) hereof.
Closing Date means the Business Day upon which each of
the conditions precedent enumerated in Sections 5.01 and 5.02 hereof shall
be fulfilled to the satisfaction of the Agent, the Issuing Bank, the
Participating Banks and the Account Party. All transactions contemplated
to occur on the Closing Date shall occur contemporaneously on or prior to
November 15, 1993, at the offices of King & Spalding, 120 West 45th Street,
New York, New York 10036, at 10:00 A.M. (New York City time), or at such
other place and time as the parties hereto may mutually agree.
Collateral means all of the collateral in which liens,
mortgages or security interests are purported to be granted by any or all
of the Security Documents.
Commitment means, for each Participating Bank, such
Participating Bank's Participation Percentage of the Available Amount.
Commitments shall refer to the aggregate of the Commitments.
Confidential Information has the meaning assigned to
that term in Section 10.09 hereof.
Consolidated Capitalization means, for any period, the
aggregate of all amounts that would, in accordance with generally accepted
accounting principles and consistent with those applied in the preparation
of the Account Party's consolidated financial statements included in its
Annual Report on Form 10-K for the year ended December 31, 1992, appear on
the Account Party's consolidated balance sheet as the sum of (i) the total
principal amount of all long-term Debt of the Account Party and its
Subsidiaries (excluding, however, Debt not to exceed $400,000,000 existing
under any nuclear fuel financing so long as the proceeds of such Debt are
used solely to finance the purchase and carrying of nuclear fuel and so
long as the appropriate regulatory authorities have not taken any action
which would not allow the costs with respect to such financing to be
recovered through the rate making process), (ii) the aggregate of the par
value of, or stated capital represented by, the outstanding shares of all
classes of common and preferred shares of the Account Party and its
Subsidiaries, (iii) the consolidated surplus of the Account Party and its
Subsidiaries, paid-in, earned and other, if any, and (iv) the excess, if
any, of (A) the aggregate unpaid principal amount of all short-term Debt of
the Account Party and its Subsidiaries over (B) 10% of the sum of clauses
(i), (ii) and (iii) above.
Consolidated Common Equity means, for any period, an
amount equal to the sum of the aggregate of the par value of, or stated
capital represented by, the outstanding common shares of the Account Party
and its Subsidiaries and the surplus, paid-in, earned and other, if any, of
the Account Party and its Subsidiaries as determined on a consolidated
basis in accordance with generally accepted accounting principles.
Conversion , Convert or Converted each refers to a
conversion of Term Advances pursuant to Section 3.04 hereof, including, but
not limited to any selection of a longer or shorter Interest Period to be
applicable to such Term Advances or any conversion of a Term Advance as
described in Section 3.04(c) hereof.
Credit Termination Date means the date on which the
Letter of Credit shall terminate in accordance with its terms.
Debt means, for any Person, without duplication, (i)
indebtedness of such Person for borrowed money, including but not limited
to obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments, (ii) obligations of such Person to pay the
deferred purchase price of property or services (excluding any obligation
of such Person to the United States Department of Energy or its successor
with respect to disposition of spent nuclear fuel burned prior to April 3,
1983), (iii) obligations of such Person as lessee under leases which shall
have been or should be, in accordance with generally accepted accounting
principles, recorded as capital leases, (iv) obligations under direct or
indirect guaranties in respect of, and obligations (contingent or
otherwise) to purchase or otherwise acquire, or otherwise to assure a
creditor against loss in respect of, indebtedness or obligations of others
of the kinds referred to in clauses (i) through (iii), above, and (v)
liabilities in respect of unfunded vested benefits under ERISA Plans.
Default Rate means a fluctuating interest rate equal
at all times to 2% per annum above the Alternate Base Rate in effect from
time to time.
ERISA means the Employee Retirement Income Security
Act of 1974, as amended from time to time.
ERISA Affiliate means, with respect to any Person, any
trade or business (whether or not incorporated) which is a commonly
controlled entity of the Account Party within the meaning of the
regulations under Section 414 of the Internal Revenue Code of 1986, as
amended from time to time.
ERISA Multiemployer Plan means a multiemployer plan
subject to Title IV of ERISA.
ERISA Plan means an employee benefit plan (other than
an ERISA Multiemployer Plan) maintained for employees of the Account Party
or any ERISA Affiliate and covered by Title IV of ERISA.
ERISA Plan Termination Event means (i) a Reportable
Event described in Section 4043 of ERISA and the regulations issued
thereunder (other than a Reportable Event not subject to the provision for
30-day notice to the PBGC under such regulations) with respect to an ERISA
Plan or an ERISA Multiemployer Plan, or (ii) the withdrawal of the Account
Party or any of its ERISA Affiliates from an ERISA Plan or an ERISA
Multiemployer Plan during a plan year in which it was a substantial
employer as defined in Section 4001(a)(2) of ERISA, or (iii) the filing of
a notice of intent to terminate an ERISA Plan or an ERISA Multiemployer
Plan or the treatment of an ERISA Plan or an ERISA Multiemployer Plan under
Section 4041 of ERISA, or (iv) the institution of proceedings to terminate
an ERISA Plan or an ERISA Multiemployer Plan by the PBGC, or (v) any other
event or condition which might constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any ERISA Plan or ERISA Multiemployer Plan.
Eurocurrency Liabilities has the meaning assigned to
that term in Regulation D of the Board of Governors of the Federal Reserve
System, as in effect from time to time.
Eurodollar Rate means for any Interest Period for any
Eurodollar Rate Advances comprising part of the same Term Borrowing, an
interest rate per annum equal at all times during such Interest Period to
the sum of:
(i) the rate per annum (rounded upward to the
nearest whole multiple of 1/100 of 1% per annum, if such rate is not such a
multiple) determined by the Agent at which deposits in United States
dollars in amounts comparable to the Eurodollar Rate Advance of Deutsche
Bank comprising part of such Term Borrowing and for comparable periods as
such Interest Period are offered by the principal office of Deutsche Bank
in London, England to prime banks in the London interbank market at 11:00
A.M. (London time) two Business Days before the first day of such Interest
Period, plus
(ii) 0.625% per annum.
Eurodollar Rate Advance means an Advance in respect of
which the Account Party has selected in accordance with Article III hereof,
and this Agreement provides for, interest to be computed on the basis of
the Eurodollar Rate.
Eurodollar Reserve Percentage of any Participating
Bank for each Interest Period for each Eurodollar Rate Advance means the
reserve percentage applicable during such Interest Period (or if more than
one such percentage shall be so applicable, the daily average of such
percentages for those days in such Interest Period during which any such
percentage shall be so applicable) under Regulation D or other regulations
issued from time to time by the Board of Governors of the Federal Reserve
System (or any successor) for determining the maximum reserve requirement
(including, without limitation, any emergency, supplemental or other
marginal reserve requirement, without benefit of or credit for proration,
exemptions or offsets) for such Participating Bank with respect to
liabilities or assets consisting of or including eurocurrency liabilities
having a term equal to such Interest Period.
Event of Default has the meaning assigned to that term
in Section 8.01.
Federal Funds Rate means, for any period, a
fluctuating interest rate per annum equal for each day during such period
to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published on the next succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so published on
the next succeeding Business Day, the average of the quotations for such
day on such transactions received by the Agent from three Federal funds
brokers of recognized standing selected by it.
FERC means the Federal Energy Regulatory Commission.
Governmental Approval means any authorization,
consent, approval, license, permit, certificate, exemption of, or filing or
registration with, any governmental authority or other legal or regulatory
body (including, without limitation, the Securities and Exchange
Commission, the FERC, the Nuclear Regulatory Commission and the Connecticut
Department of Public Utility Control), required in connection with either
(i) the execution, delivery or performance of any Loan Document or Related
Document or the grant and perfection of any lien or security interest
contemplated by the Security Documents or (ii) the nature of the Account
Party's or any Principal Subsidiary's business as conducted or the nature
of the property owned or leased by it.
Hazardous Substance means any waste, substance or
material identified as hazardous, dangerous or toxic by any office, agency,
department, commission, board, bureau or instrumentality of the United
States of America or of the State or locality in which the same is located
having or exercising jurisdiction over such waste, substance or material.
Indemnified Person has the meaning assigned to that
term in Section 10.04(b) hereof.
Indenture has the meaning assigned to that term in the
Preliminary Statement.
Indenture Documents means, collectively, the Indenture
and the Loan Agreement, together with all amendments, modifications and
supplements thereto; individually, an Indenture Document .
Information Memorandum means the Confidential
Information Memorandum, dated August 1993 regarding the Account Party and
the facilities provided for herein as distributed to the Issuing Bank and
the Participating Banks, including, without limitation, the financial
information concerning the Account Party set forth therein.
Initial Advance has the meaning assigned to that term
in Section 3.02(a) hereof.
Initial Repayment Date has the meaning assigned to
that term in Section 3.02(a) hereof.
Interest Component has the meaning assigned to that
term in the Letter of Credit.
Interest Drawing has the meaning assigned to that term
in the Letter of Credit.
Interest Period has the meaning assigned to that term
in Section 3.03(b) hereof.
Issuer has the meaning assigned to that term in the
Preliminary Statement.
Issuer Resolution means the resolution adopted by the
Issuer that authorized the issuance of the Bonds, approved the terms and
provisions of the Bonds, and approved those of the documents related to the
Bonds to which the Issuer is a party.
Letter of Credit has the meaning assigned to that term
in the Preliminary Statement.
Lien has the meaning assigned to that term in Section
7.02(a) hereof.
Loan Agreement has the meaning assigned to that term
in the Preliminary Statement.
Loan Documents means this Agreement and the Security
Documents.
Majority Lenders means on any date of determination,
(i) the Issuing Bank and (ii) Participating Banks who, collectively, on
such date, have Participation Percentages in the aggregate of at least
66-2/3%. Determination of those Participating Banks satisfying the criteria
specified above for action by the Majority Lenders shall be made by the
Agent and shall be conclusive and binding on all parties absent manifest
error.
Moody's means Moody's Investors Service, Inc. or any
successor thereto.
NU means Northeast Utilities, an unincorporated
voluntary business association organized under the laws of the Commonwealth
of Massachusetts.
Participant shall have the meaning assigned to that
term in Section 10.06(b) hereof.
Participating Banks means the Persons listed on the
signature pages hereof following the heading Participating Banks and any
other Person who becomes a party hereto pursuant to Section 10.06 hereof.
Participation Assignment means a participation
assignment entered into pursuant to Section 10.06 hereof by any
Participating Bank and an assignee, in substantially the form of Exhibit
1.01B hereto.
Participation Percentage means, as of any date of
determination (i) with respect to a Participating Bank initially a party
hereto, the percentage set forth opposite such Participating Bank's name on
the signature pages hereof, except as provided in clause (iii), below, (ii)
with respect to a Participating Bank that became a party hereto by
operation of Section 10.06(a) hereof, the Participation Percentage stated
to be assumed by such assignee Participating Bank in the relevant
Participation Assignment, except as provided in clause (iii), below, and
(iii) with respect to any Participating Bank described in clauses (i) and
(ii), above, that assigns a percentage of its interests in accordance with
Section 10.06(a) hereof, its Participation Percentage as reduced by the
percentage so assigned.
Paying Agent means (i) Shawmut Bank Connecticut,
National Association, as the initial paying agent for the Bonds under the
Indenture Documents, and (ii) any successor paying agent for the Bonds
under the Indenture Documents.
PBGC means the Pension Benefit Guaranty Corporation
(or any successor entity) established under ERISA.
Person means an individual, partnership, corporation
(including a business trust), joint stock company, trust, estate,
unincorporated association, joint venture or other entity, or a government
or any political subdivision or agency thereof.
Pledge Agreement means the Pledge Agreement, dated as
of September 1, 1993, by the Account Party in favor of the Issuing Bank for
the benefit of the Agent, the Co-Agents and the Participating Banks, in
substantially the form of Exhibit 1.01C hereto, and as the same may from
time to time be amended, modified or supplemented.
Pledged Bonds shall have the meaning assigned to that
term in the Pledge Agreement.
Premium Component has the meaning assigned to that
term in the Letter of Credit.
Principal Component has the meaning assigned to that
term in the Letter of Credit.
Principal Subsidiary means a Subsidiary, whether owned
directly or indirectly by the Account Party, which, with respect to the
Account Party and its Subsidiaries taken as a whole, represents a material
portion of the Account Party's consolidated assets or consolidated net
income (or loss), (it being understood that, as of the date of this
Agreement, the Account Party has no Principal Subsidiaries).
Purchase Contract means the Bond Purchase Agreement,
dated September 21, 1993, among the Issuer, the Account Party and Goldman,
Sachs & Co., Individually and as Representative of Advest, Inc., Greenwich
Partners, Inc. and U.S. Securities, Inc.
Recipient has the meaning assigned to that term in
Section 10.09 hereto.
Regulatory Transaction means any merger or
consolidation of the Account Party with or into, or any purchase or
acquisition by the Account Party of the assets of (and any related
assumption by the Account Party of the liabilities of) any utility company
or utility-related company, if such transaction is undertaken pursuant to
an order or request of, or otherwise in fulfillment of the stated goals of,
a utility regulatory agency having jurisdiction over NU or any of its
Subsidiaries.
Regulatory Transaction Entity means any utility
company or utility-related company (other than the Account Party) that is
the subject of a Regulatory Transaction.
Related Documents means the Letter of Credit, the
Bonds, the Indenture Documents, any Remarketing Agreement and the Purchase
Contract.
Remarketing Agent has the meaning assigned to that
term in the Indenture Documents.
Remarketing Agreement means (i) the Remarketing
Agreement, dated as of September 1, 1993, among the Issuer, the Account
Party and Morgan Stanley & Co. Incorporated, as the same may be amended
from time to time; and (ii) any successor remarketing agreement between the
Account Party and a successor Remarketing Agent as shall be in effect from
time to time in accordance with the terms of the Indenture Documents.
S&P means Standard and Poor's Corporation or any
successor thereto.
Second Mortgage means the Open End Mortgage and Trust
Agreement made as of October 1, 1986, by and between the Account Party and
Bank of Boston Connecticut, as trustee, as amended through the date hereof
to secure the obligations of the Account Party hereunder and as the same
may be further amended, modified or supplemented from time to time.
Security Documents means the Pledge Agreement and the
Indenture Documents, but shall not include the Second Mortgage.
Stated Amount has the meaning assigned to that term in
the Preliminary Statement hereto.
Stated Termination Date means the expiration date
specified in clause (i) of the first paragraph of Paragraph (1) of the
Letter of Credit, as such date may be extended pursuant to Section 2.05
hereof.
Subsidiary shall mean, with respect to any Person (the
Parent ), any corporation, association or other business entity of which
securities or other ownership interests representing 50% or more of the
ordinary voting power are, at the time as of which any determination is
being made, owned or controlled by the Parent or one or more Subsidiaries
of the Parent or by the Parent and one or more Subsidiaries of the Parent.
Tender Drawing has the meaning assigned to that term
in the Letter of Credit.
Term Advance has the meaning assigned to that term in
Section 3.02(b) hereof, and refers to a Base Rate Advance or a Eurodollar
Rate Advance (each of which shall be a Type of Term Advance). The Type
of a Term Advance may change from time to time when such Term Advance is
Converted. For purposes of this Agreement, all Term Advances of a
Participating Bank (or portions thereof) made as, or Converted to, the same
Type and Interest Period on the same day shall be deemed a single Term
Advance by such Participating Bank until repaid or next Converted.
Term Borrowing means a borrowing consisting of Term
Advances of the same Type and Interest Period made on the same day by the
Participating Banks, ratably in accordance with their respective
Participation Percentages. A Term Borrowing may be referred to herein as
being a Type of Term Borrowing, corresponding to the Type of Term
Advances comprising such Term Borrowing. For purposes of this Agreement,
all Term Advances made as, or Converted to, the same Type and Interest
Period on the same day shall be deemed a single Term Borrowing until repaid
or next Converted.
Termination Date means the Credit Termination Date or
the earlier date of termination of the Commitments pursuant to Sections
2.02 or 8.02 hereunder.
Trustee has the meaning assigned to that term in the
Preliminary Statement hereto.
Type has the meaning assigned to such term in the
definitions of Term Advance and Term Borrowing herein.
Unmatured Default means the occurrence and continuance
of an event which, with the giving of notice or lapse of time or both,
would constitute an Event of Default.
SECTION 1.02. Computation of Time Periods. In the computation
of periods of time under this Agreement any period of a specified number of
days or months shall be computed by including the first day or month
occurring during such period and excluding the last such day or month. In
the case of a period of time from a specified date to or until a
later specified date, the word from means from and including and the
words to and until each means to but excluding .
SECTION 1.03. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles applied on a basis consistent with the
application employed in the preparation of the Account Party's consolidated
financial statements included in its Annual Report on Form 10-K for the
year ended December 31, 1992.
SECTION 1.04. Computations of Outstandings. Whenever reference
is made in this Agreement to the principal amount outstanding on any date
under this Agreement, such reference shall refer to the sum of (i) the
Available Amount on such date, (ii) the aggregate principal amount of all
Advances outstanding on such date and (iii) the aggregate amount of all
demand loans under Section 3.01 hereunder on such date, in each case after
giving effect to all transactions to be made on such date and the
application of the proceeds thereof.
ARTICLE II
THE LETTER OF CREDIT
SECTION 2.01. The Letter of Credit. The Issuing Bank agrees, on
the terms and conditions hereinafter set forth (including, without
limitation, the applicable conditions precedent set forth in Article V
hereof), to issue the Letter of Credit to the Paying Agent, upon not less
than three Business Days prior notice from the Account Party, on the
Closing Date.
SECTION 2.02. Termination of the Commitments. The obligation
of the Issuing Bank to issue the Letter of Credit shall automatically
terminate if not issued on or before 5:00 P.M. (New York City time) on
November 15, 1993.
SECTION 2.03. Commissions and Fees. (a) The Account Party
hereby agrees to pay to the Agent, for the account of the Participating
Banks ratably in accordance with their respective Participation
Percentages, a letter of credit commission on the Available Amount in
effect from time to time from the date of issuance of the Letter of Credit
until the Termination Date (disregarding for such purpose any temporary
diminution thereof arising from drawings under the Letter of Credit to pay
interest (or purchase price corresponding to interest) on the Bonds,
regardless of whether the amount so drawn shall be thereafter reinstated),
at a rate equal to 0.40% per annum, payable quarterly in arrears on the
first day of March, June, September and December in each year, commencing
on the first such date to occur following the date of issuance of the
Letter of Credit, and on the Credit Termination Date.
(b) The Account Party also agrees to pay to the Agent, for
the account of the Agent and the Issuing Bank, such other fees as may be
agreed upon from time to time by the Account Party and the Agent and the
Issuing Bank.
SECTION 2.04. Reinstatement of the Letter of Credit. (a) The
Interest Component and the Principal Component shall, from time to time, be
reinstated by the Issuing Bank in accordance with, and only to the extent
provided in, the Letter of Credit. In no event shall reductions in the
Premium Component be reinstated.
(b) Interest Component. With respect to reinstatement of
reductions in the Interest Component resulting from Interest Drawings:
(i) The Issuing Bank may only deliver to the Paying
Agent any notice of non-reinstatement pursuant to Paragraph 5(i)(A) of the
Letter of Credit if (A) the Issuing Bank and/or the Participating Banks
have not been reimbursed in full by the Account Party for one or more
drawings, together with interest, if any, owing thereon pursuant to this
Agreement, or (B) an Event of Default has occurred and is then continuing.
(ii) If, subsequent to any such delivery of a notice of
non-reinstatement, the circumstances giving rise to the delivery of such
notice of non-reinstatement shall have ceased to exist (whether as a result
of reimbursement of unreimbursed drawings, or waiver or cure of an Event of
Default, or otherwise), then, provided that no other Event of Default shall
have occurred and be continuing, the Issuing Bank shall deliver to the
Paying Agent, by hand delivery or facsimile transmission, a Notice of
Reinstatement in the form of Exhibit 5 to the Letter of Credit reinstating
that portion of the Interest Component in respect of which such notice of
non-reinstatement was given.
(c) Principal Component. With respect to reinstatement of a
reduction in the Principal Component resulting from any Tender Drawing, IF:
(i) such reduction has not been reinstated pursuant to
Paragraph 5(ii)(A) of the Letter of Credit;
(ii) the Issuing Bank and/or the Participating Banks
shall have been reimbursed by the Account Party for such Tender Drawing;
(iii) any demand loan(s) and Advance(s) made in respect
of such Tender Drawing shall have been repaid by the Account Party,
together with any interest thereon and any other amounts payable hereunder
in connection therewith; AND
(iv) no Event of Default shall have occurred and then
be continuing;
THEN, the Issuing Bank shall deliver to the Paying Agent, by hand delivery
or facsimile transmission, a Notice of Reinstatement in the form of Exhibit
5 to the Letter of Credit reinstating the Principal Component to the extent
of such Tender Drawing.
SECTION 2.05. Extension of the Stated Termination Date. Unless
the Letter of Credit shall have previously expired in accordance with its
terms, at least 60 days but not more than 90 days before each anniversary
date of this Agreement, the Account Party may, by notice to the Agent (any
such notice being irrevocable), request the Issuing Bank and the
Participating Banks to extend the Stated Termination Date of the Letter of
Credit for a period of one year. If the Account Party shall make such
request, the Agent shall promptly inform the Issuing Bank and the
Participating Banks and, no later than 15 days prior to such anniversary
date, the Agent shall notify the Account Party in writing (with a copy of
such notice to the Trustee and the Paying Agent) if the Issuing Bank and
all of the Participating Banks consent to such request and the conditions
of such consent (including conditions relating to legal documentation). If
such consent is granted, the Stated Termination Date as theretofore in
effect shall be extended for one year, such extension to take effect on
such anniversary date. The granting of any such consent shall be in the
sole and absolute discretion of the Issuing Bank and all of the
Participating Banks, and if the Agent shall not so notify the Account
Party, such lack of notification shall be deemed to be a determination not
to consent to such request.
ARTICLE III
REIMBURSEMENT AND ADVANCES
SECTION 3.01. Reimbursement on Demand. Subject to the
provisions of Section 3.02 hereof, the Account Party hereby agrees to pay
(whether with the proceeds of Initial Advances made pursuant to this
Agreement or otherwise) to the Issuing Bank on demand (a) on and after each
date on which the Issuing Bank shall pay any amount under the Letter of
Credit pursuant to any draft, but only after so paid by the Issuing Bank, a
sum equal to such amount so paid (which sum shall constitute a demand loan
from the Issuing Bank to the Account Party from the date of such payment by
the Issuing Bank until so paid by the Account Party), plus (b) interest on
any amount remaining unpaid by the Account Party to the Issuing Bank under
clause (a), above, from the date such amount becomes payable on demand
until payment in full, at the Default Rate in effect from time to time. No
reinstatement of the Interest Component or the Principal Component despite
the failure by the Account Party to reimburse the Issuing Bank for any
previous drawing to pay interest on the Bonds shall limit or impair the
Account Party's obligations under this Section 3.01.
SECTION 3.02. Advances. Each Participating Bank agrees to make
Initial Advances and Term Advances for the account of the Account Party
from time to time upon the terms and subject to the conditions set forth in
this Agreement.
(a) Initial Advances; Repayment of Initial Advances. If the
Issuing Bank shall honor any Tender Drawing and if the conditions precedent
set forth in Section 5.03 of this Agreement have been satisfied as of the
date of such honor, then, each Participating Bank's payment made to the
Issuing Bank pursuant to Section 3.07 hereof in respect of such Tender
Drawing shall be deemed to constitute an advance made for the account of
the Account Party by such Participating Bank (each such advance being an
Initial Advance made by such Participating Bank). Each Initial Advance
shall be made as a Base Rate Advance, shall bear interest at the Alternate
Base Rate and shall not be entitled to be Converted. Subject to Article
VIII of this Agreement, each Initial Advance and all interest thereon shall
be due and payable on the earlier to occur of (i) the date 30 days from the
date of such Initial Advance (such repayment date being the Initial
Repayment Date for such Initial Advance) and (ii) the Termination Date.
The Account Party may repay the principal amount of any Initial Advance
with (and to the extent of) the proceeds of a Term Advance made pursuant to
subsection (b), below, and may prepay Initial Advances in accordance with
Section 3.06 hereof.
(b) Term Advances; Repayment. Subject to the satisfaction
of the conditions precedent set forth in Section 5.04 hereof and the other
conditions of this subsection (b), each Participating Bank agrees to make
one or more advances for the account of the Account Party ( Term Advances )
on each Initial Repayment Date in an aggregate principal amount equal to
the amount of such Participating Bank's Initial Advances maturing on such
Initial Repayment Date. All Term Advances comprising a single Term
Borrowing shall be made upon written notice given by the Account Party to
the Agent not later than 11:00 A.M. (New York City time) (A) in the case of
a Term Borrowing comprised of Base Rate Advances, on the Business Day of
such proposed Term Borrowing and (B) in the case of a Term Borrowing
comprised of Eurodollar Rate Advances, three Business Days prior to the
date of such proposed Term Borrowing. The Agent shall notify each
Participating Bank of the contents of such notice promptly after receipt
thereof. Each such notice shall specify therein the following information:
(W) the date on which such Term Borrowing is to be made, (X) the principal
amount of Term Advances comprising such Term Borrowing, (Y) the Type of
Term Borrowing and (Z) the duration of the initial Interest Period, if
applicable, proposed to apply to the Term Advances comprising such Term
Borrowing. The proceeds of each Participating Bank's Term Advances shall
be applied solely to the repayment of the Initial Advances made by such
Participating Bank and shall in no event be made available to the Account
Party. The principal amount of each Term Advance, together with all
accrued and unpaid interest thereon, shall be due and payable on the
earlier to occur of (x) the same calendar date occurring 35 months
following the date upon which such Term Advance is made (or, if such month
does not have a corresponding date, on the last day of such month) and (y)
the Termination Date.
SECTION 3.03. Interest on Advances. The Account Party shall
pay interest on the unpaid principal amount of each Advance from the date
of such Advance until such principal amount is paid in full at the
applicable rate set forth below:
(a) Alternate Base Rate. Except to the extent that the
Account Party shall elect to pay interest on any Advance for any Interest
Period pursuant to paragraph (c) of this Section 3.03, the Account Party
shall pay interest on each Advance (including all Initial Advances) from
the date thereof until the date such Advance is due, at a fluctuating
interest rate per annum in effect from time to time equal to the Alternate
Base Rate in effect from time to time. The Account Party shall pay
interest on each Advance bearing interest in accordance with this
subsection quarterly in arrears on the first day of March, June, September
and December in each year and on the Termination Date or the earlier date
for repayment of such Advance (including the Initial Repayment Date
therefor, in the case of an Initial Advance).
(b) Interest Periods. Subject to the other requirements
of this Section 3.03, the Account Party may from time to time elect to have
the interest on all Term Advances comprising part of the same Term
Borrowing determined and payable for a specified period (an Interest
Period for such Term Advances) in accordance with paragraph (c) of this
Section 3.03. The first day of an Interest Period for such Term Advances
shall be the date such Advance is made or most recently Converted, which
shall be a Business Day. All Interest Periods shall end on or prior to the
Stated Termination Date. Any Interest Period for a Term Advance that would
otherwise end after the Termination Date or earlier date for the repayment
of such Advance shall be deemed to end on the Termination Date or such
earlier repayment date, as the case may be.
(c) Eurodollar Rate. Subject to the requirements of
this Section 3.03 and Article V hereof, the Account Party may from time to
time elect to have any Term Advances comprising part of the same Term
Borrowing made as, or Converted to, Eurodollar Rate Advances. The Interest
Period applicable to such Eurodollar Rate Advances shall be of one, two or
three whole months' duration, as the Account Party shall select in its
notice delivered to the Agent pursuant to Section 3.02(b) or 3.04 hereof,
as applicable. If the Account Party shall have made such election, the
Account Party shall pay interest on such Eurodollar Rate Advances at the
Eurodollar Rate, for the applicable Interest Period for such Eurodollar
Rate Advances, which interest shall be payable on the last day of such
Interest Period and on the date for repayment or prepayment for such
Eurodollar Rate Advances. Any Interest Period pertaining to Eurodollar
Rate Advances that begins on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the last
Business Day of a calendar month.
(d) Interest Rate Determinations. The Agent shall give
prompt notice to the Account Party and the Participating Banks of the
Eurodollar Rate determined from time to time by the Agent to be applicable
to each Eurodollar Rate Advance.
SECTION 3.04. Conversion of Term Advances. Subject to
the satisfaction of the conditions precedent set forth in Section 5.03
hereof, the Account Party may elect to Convert one or more Term Advances of
any Type to one or more Term Advances of the same or any other Type on the
following terms and subject to the following conditions:
(a) Each Conversion shall be made as to all Term
Advances comprising a single Term Borrowing upon written notice given by
the Account Party to the Agent not later than 11:00 A.M. (New York City
time) on the third Business Day prior to the date of the proposed
Conversion. The Agent shall notify each Participating Bank of the contents
of such notice promptly after receipt thereof. Each such notice shall
specify therein the following information: (A) the date of such proposed
Conversion (which in the case of Eurodollar Rate Advances shall be the last
day of the Interest Period then applicable to such Term Advances to be
Converted), (B) Type of, and Interest Period, if any, applicable to the
Term Advances proposed to be Converted, (C) the aggregate principal amount
of Term Advances proposed to be Converted, and (D) the Type of Term
Advances to which such Term Advances are proposed to be Converted and the
Interest Period, if any, to be applicable thereto.
(b) During the continuance of an Unmatured Default or an
Event of Default, the right of the Account Party to Convert Term Advances
to Eurodollar Rate Advances shall be suspended, and all Eurodollar Rate
Advances then outstanding shall be Converted to Base Rate Advances on the
last day of the Interest Period then in effect, if, on such day, an
Unmatured Default or an Event of Default shall be continuing.
(c) If no notice of Conversion is received by the Agent
as provided in subsection (a) above with respect to any outstanding
Eurodollar Rate Advances, the Agent shall treat such absence of notice as a
deemed notice of Conversion providing for such Advances to be Converted to
Base Rate Advances on the last day of the Interest Period then in effect
for such Eurodollar Rate Advances.
SECTION 3.05. Other Terms Relating to the Making and Conversion
of Advances. (a) Notwithstanding anything in Section 3.02, 3.03 or 3.04,
above, to the contrary:
(i) at no time shall more than six different Term
Borrowings be outstanding hereunder; and
(ii) each Term Borrowing consisting of Eurodollar
Rate Advances shall be in the aggregate principal amount of $10,000,000 or
an integral multiple of $1,000,000 in excess thereof.
(b) Each notice of borrowing pursuant to Section 3.02(b) hereof
and each notice of Conversion pursuant to Section 3.04 hereof shall be
irrevocable and binding on the Account Party.
SECTION 3.06. Prepayment of Advances. (a) The Account Party
shall have no right to prepay any principal amount of any Advances except
in accordance with subsections (b) and (c) below.
(b) The Account Party may, upon at least one Business Day's
notice to the Agent stating the proposed date and aggregate principal
amount of the prepayment and the specific Initial Advances or Term
Borrowing(s) to be prepaid, and if such notice is given, the Account Party
shall, prepay, in whole or ratably in part, together with accrued interest
to the date of such prepayment on the principal amount prepaid and any
amounts due pursuant to Section 4.03, the outstanding principal amount of
(i) all Initial Advances made on the same date or (ii) all Term Advances
comprising the same Term Borrowing, in each case as the Account Party shall
designate in such notice; provided, however, that each partial prepayment
shall be in an aggregate principal amount not less than $10,000,000, or, if
less, the aggregate principal amount of all Advances then outstanding.
(c) Prior to or simultaneously with the resale of all of the
Bonds purchased with the proceeds of a Tender Drawing, the Account Party
shall prepay, or cause to be prepaid, in full, the then outstanding
principal amount of all Initial Advances and of all Term Advances
comprising the same Term Borrowing(s) arising pursuant to such Tender
Drawing, together with all interest thereon to the date of such prepayment.
If less than all of such Bonds are resold, then prior to or simultaneously
with such resale the Account Party shall prepay or cause to be prepaid that
portion of such Advances, together with all interest thereon to the date of
such prepayment, equal to the then outstanding principal amount thereof
multiplied by a fraction, the numerator of which shall be the principal
amount of the Bonds resold and the denominator of which shall be the
principal amount of all of the Bonds purchased with the proceeds of the
relevant Tender Drawing.
SECTION 3.07. Participation; Reimbursement of Issuing Bank. (a)
The Issuing Bank hereby sells and transfers to each Participating Bank, and
each Participating Bank hereby acquires from the Issuing Bank, an undivided
interest and participation to the extent of such Participating Bank's
Participation Percentage in and to (i) the Letter of Credit, including the
obligations of the Issuing Bank under and in respect thereof and the
Account Party's reimbursement and other obligations in respect thereof and
(ii) each demand loan or deemed demand loan made by the Issuing Bank,
whether now existing or hereafter arising.
(b) If the Issuing Bank (i) shall not have been reimbursed
in full for any payment made by the Issuing Bank under the Letter of Credit
on the date of such payment or (ii) shall make any demand loan to the
Account Party, the Issuing Bank shall promptly notify the Agent and the
Agent shall promptly notify each Participating Bank of such
non-reimbursement or demand loan and the amount thereof. Upon receipt of
such notice from the Agent, each Participating Bank shall pay to the
Issuing Bank, directly, an amount equal to such Participating Bank's
ratable portion (according to such Participating Bank's Participation
Percentage) of such unreimbursed amount or demand loan paid or made by the
Issuing Bank, plus interest on such amount at a rate per annum equal to the
Federal Funds Rate from the date of such payment by the Issuing Bank to the
date of payment to the Issuing Bank by such Participating Bank. All such
payments by each Participating Bank shall be made in United States dollars
and in same day funds:
(x) not later than 2:45 P.M. (New York City time) on the
day such notice is received by such Participating Bank if such notice is
received at or prior to 12:30 P.M. (New York City time) on a Business Day;
or
(y) not later than 12:00 Noon (New York City time) on
the Business Day next succeeding the day such notice is received by such
Participating Bank, if such notice is received after 12:30 P.M. (New York
City time) on a Business Day.
If a Participating Bank shall have paid to the Issuing Bank its ratable
portion of any unreimbursed amount or demand loan paid or made by the
Issuing Bank, together with all interest thereon required by the second
sentence of this subsection (b), such Participating Bank shall be entitled
to receive its ratable share of all interest paid by the Account Party in
respect of such unreimbursed amount or demand loan from the date paid or
made by the Issuing Bank. If such Participating Bank shall have made such
payment to the Issuing Bank, but without all such interest thereon required
by the second sentence of this subsection (b), such Participating Bank
shall be entitled to receive its ratable share of the interest paid by the
Account Party in respect of such unreimbursed amount or demand loan only
from the date it shall have paid all interest required by the second
sentence of this subsection (b).
(c) Each Participating Bank's obligation to make each
payment to the Issuing Bank, and the Issuing Bank's right to receive the
same, shall be absolute and unconditional and shall not be affected by any
circumstance whatsoever, including, without limitation, the foregoing or
Section 4.06 hereof, or the occurrence or continuance of an Event of
Default, or the non- satisfaction of any condition precedent set forth in
Sections 5.03 or 5.04 hereof, or the failure of any other Participating
Bank to make any payment under this Section 3.07. Each Participating Bank
further agrees that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever.
(d) The failure of any Participating Bank to make any
payment to the Issuing Bank in accordance with subsection (b) above, shall
not relieve any other Participating Bank of its obligation to make payment,
but neither the Issuing Bank nor any Participating Bank shall be
responsible for the failure of any other Participating Bank to make such
payment. If any Participating Bank shall fail to make any payment to the
Issuing Bank in accordance with subsection (b) above, then such
Participating Bank shall pay to the Issuing Bank forthwith on demand such
corresponding amount together with interest thereon, for each day until the
date such amount is repaid to the Issuing Bank at the Federal Funds Rate.
Nothing herein shall in any way limit, waive or otherwise reduce any claims
that any party hereto may have against any non-performing Participating
Bank.
(e) If any Participating Bank shall fail to make any payment
to the Issuing Bank in accordance with subsection (b) above, then, in
addition to other rights and remedies which the Issuing Bank may have, the
Agent is hereby authorized, at the request of the Issuing Bank, to withhold
and to apply to the payment of such amounts owing by such Participating
Bank to the Issuing Bank and any related interest, that portion of any
payment received by the Agent that would otherwise be payable to such
Participating Bank. In furtherance of the foregoing, if any Participating
Bank shall fail to make any payment to the Issuing Bank in accordance with
subsection (b), above, and such failure shall continue for five Business
Days following written notice of such failure from the Issuing Bank to such
Participating Bank, the Issuing Bank may acquire, or transfer to a third
party in exchange for the sum or sums due from such Participating Bank,
such Participating Bank's interest in the related unreimbursed amounts and
demand loans and all other rights of such Participating Bank hereunder in
respect thereof, without, however, relieving such Participating Bank from
any liability for damages, costs and expenses suffered by the Issuing Bank
as a result of such failure. The purchaser of any such interest shall be
deemed to have acquired an interest senior to the interest of such
Participating Bank and shall be entitled to receive all subsequent payments
which the Issuing Bank or the Agent would otherwise have made hereunder to
such Participating Bank in respect of such interest.
ARTICLE IV
PAYMENTS
SECTION 4.01. Payments and Computations. (a) The Account
Party shall make each payment hereunder (i) in the case of reimbursement
obligations pursuant to Section 3.01 hereof (excluding any portion thereof
in respect of which an Initial Advance is to be made), not later than 2:30
P.M. (New York City time) on the day the related drawing under the Letter
of Credit is paid by the Issuing Bank, and (ii) in all other cases, not
later than 12:30 P.M. (New York City time) on the day when due, in each
case in lawful money of the United States of America to the Agent at its
address referred to in Section 10.02 hereof in immediately available funds.
The Agent will promptly thereafter cause to be distributed like funds
relating to the payment of reimbursements, principal, interest, fees or
other amounts payable to the Issuing Bank and the Participating Banks to
whom the same are payable, ratably and without offset or counterclaim
except as provided in Section 3.07, at its address set forth in Section
10.02 hereof (in the case of the Issuing Bank) or for the account of their
respective Applicable Lending Offices (in the case of the Participating
Banks), in each case to be applied in accordance with the terms of this
Agreement.
(b) The Account Party hereby authorizes the Issuing Bank,
and each Participating Bank, if and to the extent payment owed to the
Issuing Bank, or such Participating Bank, as the case may be, is not made
when due hereunder, to charge from time to time against any or all of the
Account Party's accounts with the Issuing Bank or such Participating Bank,
as the case may be, any amount so due.
(c) All computations of interest based on the Alternate Base
Rate when based on Deutsche Bank's prime rate referred to in the definition
of Alternate Base Rate shall be made by the Agent on the basis of a year
of 365 or 366 days, as the case may be. All other computations of interest
hereunder (including computations of interest based on the Eurodollar Rate
and the Federal Funds Rate (including the Alternate Base Rate if and so
long as such Rate is based on the Federal Funds Rate)), and of all fees,
commissions and other amounts payable hereunder shall be made by the Agent
or the party claiming such other amounts, as the case may be, on the basis
of a year of 360 days. In each such case, such computation shall be made
for the actual number of days (including the first day, but excluding the
last day) occurring in the period for which such interest, fees,
commissions or other amounts are payable. Each such determination by the
Agent or a Participating Bank, as the case may be, shall be conclusive and
binding for all purposes, absent manifest error.
(d) Whenever any payment hereunder shall be stated to be
due, or the last day of an Interest Period hereunder shall be stated to
occur, on a day other than a Business Day, such payment shall be made and
the last day of such Interest Period shall occur on the next succeeding
Business Day, and such extension of time shall in such case be included in
the computation of payment of interest, commissions and fees hereunder;
provided, however, that if such extension would cause payment of interest
on or principal of Eurodollar Rate Advances to be made, or the last day of
an Interest Period for a Eurodollar Rate Advance to occur, in the next
following calendar month, such payment shall be made on the next preceding
Business Day and such reduction of time shall in such case be included in
the computation of payment of interest hereunder.
(e) Unless the Agent shall have received notice from the
Account Party prior to the date on which any payment is due to the Issuing
Bank or the Participating Banks hereunder that the Account Party will not
make such payment in full, the Agent may assume that the Account Party has
made such payment in full to the Agent on such date and the Agent may, in
reliance upon such assumption, cause to be distributed to the Issuing Bank
and/or each Participating Bank on such due date an amount equal to the
amount then due the Issuing Bank and/or such Participating Bank. If and to
the extent the Account Party shall not have so made such payment in full to
the Agent, the Issuing Bank and/or each such Participating Bank shall repay
to the Agent forthwith on demand such amount distributed to the Issuing
Bank and/or such Participating Bank, together with interest thereon, for
each day from the date such amount is distributed to the Issuing Bank
and/or such Participating Bank until the date the Issuing Bank and/or such
Participating Bank repays such amount to the Agent, at the Federal Funds
Rate.
(f) If, after the Agent has paid to the Issuing Bank or any
Participating Bank any amount pursuant to subsection (a) above, such
payment is rescinded or must otherwise be returned or must be paid over by
the Agent or the Issuing Bank to any Person, whether pursuant to any
bankruptcy or insolvency law, Section 4.04 hereof or otherwise, such
Participating Bank shall, at the request of the Agent or the Issuing Bank,
promptly repay to the Agent or the Issuing Bank, as the case may be, an
amount equal to its ratable share of such payment, together with any
interest required to be paid by the Agent or the Issuing Bank with respect
to such payment.
SECTION 4.02. Default Interest. Any amounts payable by the
Account Party hereunder that are not paid when due shall (to the fullest
extent permitted by law) bear interest, from the date when due until paid
in full, at the Default Rate, payable on demand.
SECTION 4.03. Yield Protection. (a) Change in Circumstances.
Notwithstanding any other provision herein, if after the date hereof, the
adoption of or any change in applicable law or regulation or in the
interpretation or administration thereof by any governmental authority
charged with the interpretation or administration thereof (whether or not
having the force of law) (i) shall change the basis of taxation of payments
to the Issuing Bank or any Participating Bank of the principal of or
interest on any Eurodollar Rate Advance made by such Participating Bank or
any fees or other amounts payable hereunder (other than changes in respect
of taxes imposed on the overall net income of the Issuing Bank or such
Participating Bank, or its Applicable Lending Office, by the jurisdiction
in which the Issuing Bank or such Participating Bank has its principal
office or in which such Applicable Lending Office is located or by any
political subdivision or taxing authority therein), or (ii) shall impose,
modify or deem applicable any reserve, special deposit or similar
requirement against letters of credit (or participatory interests therein)
issued by, commitments or assets of, deposits with or for the account of,
or credit extended by, the Issuing Bank or such Participating Bank, or
(iii) shall impose on the Issuing Bank or such Participating Bank any other
condition affecting this Agreement, the Letter of Credit or participatory
interests therein or Eurodollar Rate Advances, and the result of any of the
foregoing shall be (A) to increase the cost to the Issuing Bank or such
Participating Bank of issuing, maintaining or participating in this
Agreement or the Letter of Credit or of agreeing to make, making or
maintaining any Advance or (B) to reduce the amount of any sum received or
receivable by the Issuing Bank or such Participating Bank hereunder
(whether of principal, interest or otherwise), then the Account Party will
pay to the Issuing Bank or such Participating Bank, upon demand, such
additional amount or amounts as will compensate the Issuing Bank or such
Participating Bank for such additional costs incurred or reduction
suffered.
(b) Capital. If the Issuing Bank or any Participating Bank
shall have determined that the adoption after the date hereof of any law,
rule, regulation or guideline regarding capital adequacy, or any change
therein or in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by the Issuing Bank
or any Participating Bank (or any Applicable Lending Office of the Issuing
Bank or such Participating Bank), or any holding company of any such
entity, with any request or directive regarding capital adequacy not in
effect on the date hereof (whether or not having the force of law) of any
such authority, central bank or comparable agency, has or would have the
effect (i) of reducing the rate of return on such entity's capital or on
the capital of such entity's holding company, if any, as a consequence of
this Agreement, the Letter of Credit or such entity's participatory
interest therein, any Commitment hereunder or the portion of the Advances
made by such entity pursuant hereto to a level below that which such entity
or such entity's holding company could have achieved, but for such
applicability, adoption, change or compliance (taking into consideration
such entity's policies and the policies of such entity's holding company
with respect to capital adequacy), or (ii) of increasing or otherwise
determining the amount of capital required or expected to be maintained by
such entity or such entity's holding company based upon the existence of
this Agreement, the Letter of Credit or such entity's participatory
interest therein, any Commitment hereunder, the portion of the Advances
made by such entity pursuant hereto and other similar such credits,
participations, commitments, agreements or assets, then from time to time
the Account Party shall pay to the Issuing Bank or such Participating Bank,
upon demand, such additional amount or amounts as will compensate such
entity or such entity's holding company for any such reduction or allocable
capital cost suffered.
(c) Eurodollar Reserves. The Account Party shall pay to
each Participating Bank upon demand, so long as such Participating Bank
shall be required under regulations of the Board of Governors of the
Federal Reserve System to maintain reserves with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities, additional
interest on the unpaid principal amount of such Participating Bank's
portion of each Eurodollar Rate Advance, from the date of such Advance
until such principal amount is paid in full, at an interest rate per annum
equal at all times to the remainder obtained by subtracting (i) the rate
described in clause (i) of the definition of Eurodollar Rate for the
Interest Period for such Advance from (ii) the rate obtained by dividing
such rate by a percentage equal to 100% minus the Eurodollar Reserve
Percentage of such Participating Bank for such Interest Period. Such
additional interest shall be determined by such Participating Bank and
notified to the Account Party and the Issuing Bank.
(d) Breakage Indemnity. The Account Party shall indemnify
each Participating Bank against any loss, cost or reasonable expense which
such Participating Bank may sustain or incur as a consequence of (i) any
failure by the Account Party to fulfill on the date of any Advance or
Conversion hereunder the applicable conditions set forth in Articles III
and V, (ii) any failure by the Account Party to Convert any Advance
hereunder after irrevocable notice of Conversion has been given pursuant to
Section 3.04 hereof, (iii) any payment, prepayment or Conversion of a
Eurodollar Rate Advance required or permitted by any other provision of
this Agreement or otherwise made or deemed made on a date other than the
last day of the Interest Period applicable thereto, (iv) any default in
payment or prepayment of the principal amount of any Advance or any part
thereof or interest accrued thereon, as and when due and payable (at the
due date thereof, by irrevocable notice of prepayment or otherwise) or (v)
the occurrence of any Event of Default, including, in each such case, any
loss or reasonable expense sustained or incurred or to be sustained or
incurred in liquidating or employing deposits from third parties acquired
to effect or maintain such Advance or any part thereof as a Eurodollar Rate
Advance. Such loss, cost or reasonable expense shall include an amount
equal to the excess, if any, as reasonably determined by such Participating
Bank, of (A) its cost of obtaining the funds for the Advance being paid,
prepaid, Converted or not borrowed (based on the Eurodollar Rate) for the
period from the date of such payment, prepayment, Conversion or failure to
borrow to the last day of the Interest Period for such Advance (or, in the
case of a failure to borrow, the Interest Period for such Advance which
would have commenced on the date of such failure) over (B) the amount of
interest (as reasonably determined by such Participating Bank) that would
be realized by such Participating Bank in reemploying the funds so paid,
prepaid, Converted or not borrowed for such period or Interest Period, as
the case may be. For purposes of this subsection (d), it shall be presumed
that each Participating Bank shall have funded each such Advance with a
fixed-rate instrument bearing the rates and maturities designated in the
determination of the applicable interest rate for such Advance.
(e) Notices. A certificate of the Issuing Bank or any
Participating Bank setting forth such entity's claim for compensation
hereunder and the amount necessary to compensate such entity or its holding
company pursuant to subsections (a) through (d) of this Section 4.03 shall
be submitted to the Account Party and the Issuing Bank and shall be
conclusive and binding for all purposes, absent manifest error. The
Account Party shall pay the Issuing Bank or such Participating Bank
directly the amount shown as due on any such certificate within ten days
after its receipt of the same. The failure of any entity to provide such
notice or to make demand for payment under this Section 4.03 shall not
constitute a waiver of such Participating Bank's rights hereunder;
provided, that such entity shall not be entitled to demand payment pursuant
to subsections (a) through (d) of this Section 4.03 in respect of any loss,
cost, expense, reduction or reserve if such demand is made more than one
year following the later of such entity's incurrence or sufferance thereof
or such entity's actual knowledge of the event giving rise to such entity's
rights pursuant to such subsections. The protections of this Section 4.03
shall be available to the Issuing Bank and each Participating Bank
regardless of any possible contention of the invalidity or inapplicability
of the law, rule, regulation, guideline or other change or condition which
shall have occurred or been imposed and shall survive the Termination Date
and the payment of all other amounts hereunder.
(f) Change in Legality. Notwithstanding any other provision
herein, if the adoption of or any change in any law or regulation or in the
interpretation or administration thereof by any governmental authority
charged with the administration or interpretation thereof shall make it
unlawful for any Participating Bank to make or maintain any Eurodollar Rate
Advance or to give effect to its obligations as contemplated hereby with
respect to any Eurodollar Rate Advance, then, by written notice to the
Account Party and the Issuing Bank, such Participating Bank may:
(i) declare that Eurodollar Rate Advances will not
thereafter be made by such Participating Bank hereunder, whereupon the
right of the Account Party to select Eurodollar Rate Advances for any
Advance or Conversion shall be forthwith suspended until such Participating
Bank shall withdraw such notice as provided hereinbelow or shall cease to
be a Participating Bank hereunder; and
(ii) require that all outstanding Eurodollar Rate
Advances be Converted to Base Rate Advances, in which event all Eurodollar
Rate Advances shall be automatically Converted to Base Rate Advances as of
the effective date of such notice as provided hereinbelow.
Upon receipt of any such notice, the Agent shall promptly notify the
Participating Banks thereof. Promptly upon becoming aware that the
circumstances that caused such Participating Bank to deliver such notice no
longer exist, such Participating Bank shall deliver notice thereof to the
Account Party and the Agent withdrawing such prior notice (but the failure
to do so shall impose no liability upon such Participating Bank). Promptly
upon receipt of such withdrawing notice from such Participating Bank, the
Agent shall deliver notice thereof to the Account Party and the
Participating Banks and such suspension shall terminate. Prior to any
Participating Bank giving notice to the Account Party under this subsection
(f), such Participating Bank shall use reasonable efforts to change the
jurisdiction of its Applicable Lending Office, if such change would avoid
such unlawfulness and would not, in the sole determination of such
Participating Bank, be otherwise disadvantageous to such Participating
Bank. Any notice to the Account Party by any Participating Bank shall be
effective as to each Eurodollar Rate Advance on the last day of the
Interest Period currently applicable to such Eurodollar Rate Advance;
provided that if such notice shall state that the maintenance of such
Advance until such last day would be unlawful, such notice shall be
effective on the date of receipt by the Account Party and the Agent.
(g) Market Rate Disruptions. If, (i) the Agent determines
that an adequate basis does not exist for the determination of the
Eurodollar Rate for Eurodollar Rate Advances or (ii) if the Majority
Lenders shall notify the Agent that the Eurodollar Rate will not adequately
reflect the cost to such Majority Lenders of making, funding or maintaining
their respective Eurodollar Rate Advances, the right of the Account Party
to select or receive or Convert into such Type of Advances shall be
forthwith suspended until the Agent shall notify the Account Party and the
Participating Banks that the circumstances causing such suspension no
longer exist, and until such notification from the Agent, each request for
or Conversion into such Type of Advance hereunder shall be deemed to be a
request for or Conversion into Base Rate Advances.
SECTION 4.04. Sharing of Payments, Etc. If any Participating
Bank shall obtain any payment (whether voluntary, involuntary, through the
exercise of any right of set-off, or otherwise, but excluding any proceeds
received by assignments or sales of participations in accordance with
Section 10.06 hereof to a Person that is not an Affiliate of the Account
Party) on account of the Advances owing to it (other than pursuant to
Section 4.03 hereof) in excess of its ratable share of payments on account
of the Advances obtained by all the Participating Banks, such Participating
Bank shall forthwith purchase from the other Participating Banks such
participation in the portions of the Advances owing to them as shall be
necessary to cause such purchasing Participating Bank to share the excess
payment ratably with each of them; provided, however, that if all or any
portion of such excess payment is thereafter recovered from such purchasing
Participating Bank, such purchase from each Participating Bank shall be
rescinded and such Participating Bank shall repay to the purchasing
Participating Bank the purchase price to the extent of such recovery
together with an amount equal to such Participating Bank's ratable share
(according to the proportion of (i) the amount of such Participating Bank's
required repayment to (ii) the total amount so recovered from the
purchasing Participating Bank) of any interest or other amount paid or
payable by the purchasing Participating Bank in respect of the total amount
so recovered. The Account Party agrees that any Participating Bank so
purchasing a participation from another Participating Bank pursuant to this
Section 4.04 may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of set-off) with respect to such
participation as fully as if such Participating Bank were the direct
creditor of the Account Party in the amount of such participation.
Notwithstanding the foregoing, if any Participating Bank shall obtain any
such excess payment involuntarily, such Participating Bank may, in lieu of
purchasing participations from the other Participating Banks in accordance
with this Section 4.04, on the date of receipt of such excess payment,
return such excess payment to the Agent for distribution in accordance with
Section 4.01(a) hereof.
SECTION 4.05. Taxes. (a) All payments by the Account Party
hereunder shall be made in accordance with Section 4.01, free and clear of
and without deduction for all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Participating Bank and the Issuing
Bank, taxes imposed on its overall net income, and franchise taxes imposed
on it, by the jurisdiction under the laws of which such Participating Bank
or the Issuing Bank (as the case may be) is organized or any political
subdivision thereof and, in the case of each Participating Bank, taxes
imposed on its overall net income, and franchise taxes imposed on it, by
the jurisdiction of such Participating Bank's Applicable Lending Office or
any political subdivision thereof (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as Taxes ). If the Account Party shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder to any Participating Bank or the Issuing Bank, (i) the sum
payable shall be increased as may be necessary so that after making all
required deductions (including deductions applicable to additional sums
payable under this Section 4.05) such Participating Bank or the Issuing
Bank (as the case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Account Party shall
make such deductions and (iii) the Account Party shall pay the full amount
deducted to the relevant taxation authority or other authority in
accordance with applicable law.
(b) In addition, the Account Party agrees to pay any present
or future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies that arise from any payment made hereunder or
from the execution, delivery or registration of, or otherwise with respect
to, this Agreement (hereinafter referred to as Other Taxes ).
(c) The Account Party will indemnify each Participating Bank
and the Issuing Bank for the full amount of Taxes and Other Taxes
(including, without limitation, any Taxes and any Other Taxes imposed by
any jurisdiction on amounts payable under this Section 4.05) paid by such
Participating Bank or the Issuing Bank (as the case may be) and any
liability (including penalties, interest and expenses) arising therefrom or
with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted. This indemnification shall be made within
30 days from the date such Participating Bank or the Issuing Bank (as the
case may be) makes written demand therefor. If any Taxes or Other Taxes
for which a Participating Bank or the Issuing Bank has received payments
from the Account Party hereunder shall be finally determined to have been
incorrectly or illegally asserted and are refunded to such Participating
Bank, such Participating Bank shall promptly forward to the Account Party
any such refunded amount. The Account Party's, the Issuing Bank's and each
Participating Bank's obligations under this Section 4.05 shall survive the
Termination Date and the payment of all other amounts hereunder.
(d) Within 30 days after the date of any payment of Taxes,
the Account Party will furnish to the Issuing Bank, at its address referred
to in Section 10.02 hereof, the original or a certified copy of a receipt
evidencing payment thereof.
(e) Each Participating Bank not incorporated in the United
States or a jurisdiction within the United States shall, on or prior to the
date it becomes a Participating Bank hereunder, deliver to the Account
Party and the Issuing Bank such certificates, documents or other evidence,
as required by the Internal Revenue Code of 1986, as amended from time to
time (the Code ), or treasury regulations issued pursuant thereto,
including Internal Revenue Service Form 4224 and any other certificate or
statement of exemption required by Treasury Regulation Section 1.1441-1(a)
or Section 1.1441-6(c) or any subsequent version thereof, properly
completed and duly executed by such Participating Bank establishing that it
is (i) not subject to withholding under the Code or (ii) totally exempt
from United States of America tax under a provision of an applicable tax
treaty. Each Participating Bank shall promptly notify the Account Party
and the Issuing Bank of any change in its Applicable Lending Office and
shall deliver to the Account Party and the Issuing Bank together with such
notice such certificates, documents or other evidence referred to in the
immediately preceding sentence. Unless the Account Party and the Issuing
Bank have received forms or other documents satisfactory to them indicating
that payments hereunder are not subject to United States of America
withholding tax or are subject to such tax at a rate reduced by an
applicable tax treaty, the Account Party or the Issuing Bank shall withhold
taxes from such payments at the applicable statutory rate in the case of
payments to or for any Participating Bank organized under the laws of a
jurisdiction outside the United States of America. Each Participating Bank
represents and warrants that each such form supplied by it to the Issuing
Bank and the Account Party pursuant to this Section 4.05, and not
superseded by another form supplied by it, is or will be, as the case may
be, complete and accurate.
(f) Any Participating Bank claiming any additional amounts
payable pursuant to this Section 4.05 shall use reasonable efforts
(consistent with legal and regulatory restrictions) to file any certificate
or document requested by the Account Party or to change the jurisdiction of
its Applicable Lending Office if the making of such a filing or change
would avoid the need for or reduce the amount of any such additional
amounts which may thereafter accrue and would not, in the sole
determination of such Participating Bank, be otherwise disadvantageous to
such Participating Bank.
SECTION 4.06. Obligations Absolute. The obligations of the
Account Party under this Agreement shall be unconditional and irrevocable,
and shall be paid strictly in accordance with the terms of this Agreement
(as the same may be amended from time to time) under all circumstances,
including, without limitation, the following circumstances:
(i) any lack of validity or enforceability of this
Agreement, the Second Mortgage or any of the Security Documents or Related
Documents or any document or agreement delivered in connection therewith;
(ii) any change in the time, manner or place of
payment of, or in any other term of, all or any of the obligations of the
Account Party in respect of the Letter of Credit or any other amendment or
waiver of or any consent to departure from all or any of the Loan
Documents, the Second Mortgage or the Related Documents or any document or
agreement delivered in connection therewith;
(iii) the existence of any claim, set-off, defense or
other right which the Account Party may have at any time against the Paying
Agent, the Trustee or any other beneficiary, or any transferee, of the
Letter of Credit (or any persons or entities for whom the Paying Agent, the
Trustee, any such beneficiary or any such transferee may be acting), the
Agent, the Issuing Bank, or any other person or entity, whether in
connection with this Agreement, the transactions contemplated in any of the
Loan Documents, the Second Mortgage or the Related Documents, or any
unrelated transaction;
(iv) any statement or any other document presented
under the Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect, except to the extent that a court of competent
jurisdiction shall determine that the Issuing Bank shall have engaged in
gross negligence or willful misconduct with respect thereto;
(v) payment by the Issuing Bank under the Letter of
Credit against presentation of a draft or certificate which does not comply
with the terms of the Letter of Credit, except to the extent that a court
of competent jurisdiction shall determine that the Issuing Bank shall have
engaged in gross negligence or willful misconduct with respect thereto;
(vi) any exchange of, release of or non-perfection of
any interest in any collateral, or any release or amendment or waiver of or
consent to departure from any guarantee, for all or any of the obligations
of the Account Party in respect of the Letter of Credit; or
(vii) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing.
SECTION 4.07. Evidence of Indebtedness. The Issuing Bank and
each Participating Bank shall maintain, in accordance with their usual
practice, an account or accounts evidencing the indebtedness of the Account
Party resulting from each drawing under the Letter of Credit (in the case
of the Issuing Bank) and from each Advance (in the case of each
Participating Bank) made from time to time hereunder and the amounts of
principal and interest payable and paid from time to time hereunder. In
any legal action or proceeding in respect of this Agreement, the entries
made in such account or accounts shall, in the absence of manifest error,
be conclusive evidence of the existence and amounts of the obligations of
the Account Party therein recorded.
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.01. Conditions Precedent to the Issuance of the Letter
of Credit. The obligation of the Issuing Bank to issue the Letter of
Credit and of each Participating Bank to make the Advances to be made by it
is subject to the fulfillment of the conditions precedent that the Agent
shall have received on or before the day of such issuance the following,
each dated such day (except where specified otherwise below), in form and
substance satisfactory to each Participating Bank (except where specified
otherwise below) and in sufficient copies for each Participating Bank:
(a) Agreements:
(i) Counterparts of this Agreement, duly executed and
delivered by the Account Party, the Agent, the Issuing Bank and each
Participating Bank listed on the signature pages hereto.
(ii) Counterparts of the Pledge Agreement, duly
executed by the Account Party, the Agent and the Issuing Bank.
(iii) Executed copies (or duplicate copies thereof
certified as of the Closing Date by the Account Party in a manner
satisfactory to the Agent to be a true copy) of the Indenture and the Loan
Agreement, duly executed by the parties thereto.
(iv) Executed copies (or duplicate copies thereof
certified as of the Closing Date by the Account Party in a manner
satisfactory to the Agent to be a true copy) of the Second Mortgage, duly
executed by the parties thereto.
(v) A letter of credit application in the standard form
prescribed by the Issuing Bank, duly completed and executed by the Account
Party.
(b) Corporate Matters:
(i) A certificate of the Secretary or an Assistant
Secretary of the Account Party certifying that attached thereto are (A) a
true and correct listing of the documents comprising the Articles of
Incorporation of the Account Party and a true and correct copy of the
By-laws of the Account Party, in each case as in effect on the Closing Date
and (B) true and correct copies of the resolutions of the Board of
Directors of the Account Party approving, if and to the extent necessary,
this Agreement, the other Loan Documents, the Related Documents to which it
is a party and the other documents to be delivered by or on behalf of the
Account Party hereunder and thereunder, and of all documents evidencing
other necessary corporate action, if any, with respect to the execution,
delivery and performance by or on behalf of the Account Party of this
Agreement, the other Loan Documents and such Related Documents and
certifying that such resolutions and other corporate actions, if any, are
in full force and effect and have not been revoked, rescinded or modified.
(ii) A certificate of the Secretary or an Assistant
Secretary of the Account Party certifying the names and true signatures of
the officers of the Account Party authorized to sign this Agreement, the
other Loan Documents, the Related Documents to which it is a party and the
other documents to be delivered hereunder and thereunder.
(c) Governmental Approvals:
(i) A certificate of a duly authorized officer of the
Account Party certifying that attached thereto are true and correct copies
of all Governmental Approvals referred to in clause (i) of the definition
of Governmental Approval required to be obtained or made by the Account
Party.
(d) Financial, Accounting and Compliance Matters:
(i) A certificate signed by the Treasurer or Assistant
Treasurer of the Account Party, certifying as to the absence of any
material adverse change in the financial condition, operations, properties
or prospects of the Account Party since December 31, 1992, except to the
extent, if any, described in the Account Party's Quarterly Reports on Form
10-Q for the periods ended March 31 and/or June 30, 1993 or in the Account
Party's Current Reports on Form 8-K dated June 3, 1993, June 30, 1993
and/or September 10, 1993.
(ii) A certificate of a duly authorized officer of the
Account Party to the effect that:
(A) the representations and warranties contained in
Section 6.01 are correct in all material respects on and as of the Closing
Date before and after giving effect to the issuance of the Letter of
Credit; and
(B) no event has occurred and is continuing which
constitutes an Event of Default or Unmatured Default, or would result from
the issuance of the Letter of Credit.
(e) Relating to the Issuance of the Bonds:
(i) An executed copy (or a duplicate copy thereof
certified by the Account Party in a manner satisfactory to the Agent to be
a true copy) of the Remarketing Agreement, duly executed by the Issuer, the
Remarketing Agent and the Account Party.
(ii) An executed copy (or a duplicate copy thereof
certified by the Account Party in a manner satisfactory to the Agent to be
a true copy) of the Purchase Contract, duly executed by Goldman, Sachs &
Co., Individually and as Representative of Advest, Inc., Greenwich
Partners, Inc. and U.S. Securities, Inc., the Issuer and the Account Party.
(iii) A letter from Whitman & Ransom, counsel to the
Issuer, addressed to the Agent, the Issuing Bank and the Participating
Banks and stating therein that the Agent, the Issuing Bank and the
Participating Banks may rely on the opinion of such firm in the form of
Appendix C to the Official Statement relating to the Bonds and delivered
pursuant to Section 14(i)(2)(G) of the Purchase Contract, together with
copies of such opinion.
(iv) Copies of the Preliminary Official Statement and
Official Statement used in connection with the offering and remarketing of
the Bonds, and any amendments, supplements or "stickers" thereto.
(v) Copies of the Issuer Resolution, and, to the extent
not otherwise referenced in this Section 5.01(e), of all other agreements,
documents, certificates and opinions delivered in connection with the
issuance of the Bonds.
(f) Opinions of Counsel:
Favorable opinions of:
(i) Day, Berry & Howard, counsel to the Account Party,
in substantially the form of Exhibit 5.01A and as to such other matters as
the Majority Lenders, through the Agent, may reasonably request; and
(ii) King & Spalding, special New York counsel to the
Agent and the Issuing Bank, in substantially the form of Exhibit 5.01B.
(g) Miscellaneous:
(i) Letters from S&P and Moody's to the effect that the
Bonds have been rated A-1+ and VMIG-1, respectively, such letters to be in
form and substance satisfactory to the Issuing Bank.
(ii) Such other approvals, opinions and documents as
the Majority Lenders, through the Issuing Bank, may reasonably request as
to the legality, validity, binding effect or enforceability of the Loan
Documents or the financial condition, properties, operations or prospects
of the Account Party.
SECTION 5.02. Additional Conditions Precedent to the Issuance of
the Letter of Credit. The obligation of the Issuing Bank to issue the
Letter of Credit and of each Participating Bank to make the Advances to be
made by it shall be subject to the further conditions precedent that, on
the date of the issuance of the Letter of Credit:
(a) the representations and warranties contained in
Section 6.01 shall be correct in all material respects on and as of the
Closing Date before and after giving effect to the issuance of the Letter
of Credit;
(b) no event shall have occurred and be continuing which
constitutes an Event of Default or Unmatured Default, or would result from
the issuance of the Letter of Credit; and
(c) The Account Party shall have paid all fees under or
referenced in Section 2.03 hereof, to the extent then due and payable.
SECTION 5.03. Conditions Precedent to Initial Advances and
Conversions of Advances. The obligation of each Participating Bank to make
any Initial Advance or to Convert any Term Advance shall be subject to the
conditions precedent that, on the date of such Initial Advance or
Conversion, the following statements shall be true:
(a) the representations and warranties contained in
Section 6.01 of this Agreement (other than the last sentence of subsection
(f) and clause (ii) of subsection (g) thereof) are true and correct on and
as of the date of such Initial Advance or Conversion, before and after
giving effect to such Initial Advance or Conversion and to the application
of the proceeds (if any) therefrom, as though made on and as of such date;
and
(b) no event has occurred and is continuing which
constitutes an Event of Default.
Unless the Account Party shall have previously advised the Agent
in writing that one or more of the statements contained in subsections (a)
and (b) of this Section 5.03 is no longer true, the Account Party shall be
deemed to have represented and warranted, on and as of the date of any
Initial Advance or Conversion, that the above statements are true.
SECTION 5.04. Conditions Precedent to Term Advances. The
obligation of each Participating Bank to make any Term Advance shall be
subject to the conditions precedent that, on the date of such Term Advance
the following statements shall be true:
(a) the representations and warranties contained in
Section 6.01 of this Agreement (including the last sentence of subsection
(f) and clause (ii) of subsection (g) thereof) are true and correct on and
as of the date of such Term Advance, before and after giving effect to such
Term Advance and to the application of the proceeds therefrom, as though
made on and as of such date; and
(b) no event has occurred and is continuing which
constitutes an Event of Default or an Unmatured Default.
Unless the Account Party shall have previously advised the Agent in writing
that one or more of the statements contained in subsections (a) and (b) of
this Section 5.04 is no longer true, the Account Party shall be deemed to
have represented and warranted, on and as of the date of any Term Advance,
that the above statements are true.
SECTION 5.05. Reliance on Certificates. The Agent, the Issuing
Bank and the Participating Banks shall be entitled to rely conclusively
upon the certificates delivered from time to time by officers of the
Account Party, NU and the other parties to the Loan Documents and Related
Documents as to the names, incumbency, authority and signatures of the
respective persons named therein until such time as the Agent may receive a
replacement certificate, in form acceptable to the Agent, from an officer
of such Person identified to the Agent as having authority to deliver such
certificate, setting forth the names and true signatures of the officers
and other representatives of such Person thereafter authorized to act on
behalf of such Person.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01. Representations and Warranties of the Account
Party. The Account Party represents and warrants as follows:
(a) Each of the Account Party and its Principal Subsidiaries
is a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, has the requisite
corporate power and authority to own its property and assets and to carry
on its business as now conducted and is qualified to do business in every
jurisdiction where, because of the nature of its business or property, such
qualification is required, except where the failure so to qualify would not
have a material adverse effect on the financial condition, properties,
prospects or operations of the Account Party or of the Account Party and
its Principal Subsidiaries taken as a whole. The Account Party has the
corporate power to execute, deliver and perform its obligations under this
Agreement, each other Loan Document and each Related Document to which it
will be a party.
(b) The execution, delivery and performance by the Account
Party of each Loan Document and Related Document to which it is a party are
within the Account Party's corporate powers, have been duly authorized by
all necessary corporate action, and do not and will not contravene (i) the
Account Party's charter or by-laws or any law or legal restriction or (ii)
any contractual restriction binding on or affecting the Account Party or
its properties or any of its Principal Subsidiaries or its properties.
(c) Each of the Account Party and its Principal Subsidiaries
is not in violation of any law, or in default with respect to any judgment,
writ, injunction, decree, rule or regulation of any court or governmental
agency or instrumentality, where such violation or default would have a
material adverse effect on the financial condition, properties, prospects
or operations of the Account Party or of the Account Party and its
Principal Subsidiaries taken as a whole.
(d) All Governmental Approvals referred to in clause (i) in
the definition of Governmental Approvals have been duly obtained or made,
and all applicable periods of time for review, rehearing or appeal with
respect thereto have expired, except as described below. If the period for
appeal of the order of the Securities and Exchange Commission approving the
transactions contemplated hereby has not expired, the filing of an appeal
of such order will not affect the validity of said transactions, unless
such order has been otherwise stayed or any of the parties hereto has
actual knowledge that any of such transactions constitutes a violation of
the Public Utility Holding Company Act of 1935 or any rule or regulation
thereunder. No such stay exists and the Account Party has no reason to
believe that any of such transactions constitutes any such violation. If
the period for appeal of the decision of the Connecticut Department of
Public Utility Control (the CDPUC ) approving the transactions
contemplated hereby has not expired, the filing of an appeal of such
decision will not affect the validity of said transactions, unless
operation of such decision has been stayed or suspended by the CDPUC or a
reviewing court prior to the consummation of such transactions. No such
stay or suspension exists. No representation or warranty is made
concerning the applicable period of time for review, rehearing or appeal
with respect to Governmental Approvals of the Issuer in connection with the
issuance of the Bonds. The Account Party and each of its Principal
Subsidiaries have obtained or made all Governmental Approvals referred to
in clause (ii) of the definition of Governmental Approvals , except (i)
those which are not yet required but which are obtainable in the ordinary
course of business as and when required, (ii) those the absence of which
would not materially adversely affect the financial condition, properties,
prospects or operations of the Account Party or any Principal Subsidiary
and (iii) those which the Account Party is diligently attempting in good
faith to obtain, renew or extend, or the requirement for which the Account
Party is contesting in good faith by appropriate proceedings or by other
appropriate means; in each case described in the foregoing clause (iii),
such attempt or contest, and any delay resulting therefrom, is not
reasonably expected to have a material adverse effect on the financial
condition, properties, prospects or operations of the Account Party or any
Principal Subsidiary or to magnify to any significant degree any such
material adverse effect that would reasonably be expected to result from
the absence of such Governmental Approval.
(e) This Agreement, each other Loan Document and each
Related Document to which the Account Party is a party have been duly
executed and delivered by or on behalf of the Account Party and are legal,
valid and binding obligations of the Account Party enforceable against the
Account Party in accordance with their respective terms; subject to the
qualifications, however, that the enforcement of the rights and remedies
herein and therein is subject to bankruptcy and other similar laws of
general application affecting rights and remedies of creditors and the
application of general principles of equity (regardless of whether
considered in a proceeding in equity or at law) and that indemnification
against violations of securities and similar laws may be subject to matters
of public policy.
(f) (i) The audited balance sheet of the Account Party as
at December 31, 1992, and the audited statements of income and cash flows
of the Account Party for the fiscal year then ended as set forth in the
Account Party's Annual Report on Form 10-K for such fiscal year and (ii)
the unaudited balance sheet of the Account Party as at June 30, 1993 and
the unaudited statements of income and cash flows of the Account Party for
the six-month period then ended as set forth in the Account Party's
Quarterly Report on Form 10-Q for the period then ended, fairly present in
all material respects the financial condition and results of operations of
the Account Party at and for the respective periods ended on such dates,
and have been prepared in accordance with generally accepted accounting
principles consistently applied. Since December 31, 1992, there has been
no material adverse change in the financial condition, operations,
properties or prospects of the Account Party and its Subsidiaries, if any,
taken as a whole, except to the extent, if any, described in the Account
Party's Quarterly Reports on Form 10-Q for the periods ended March 31, 1993
and/or June 30, 1993, or in the Account Party's Current Reports on Form 8-K
dated June 3, 1993, June 30, 1993 and/or September 10, 1993 or in Schedule
II hereto.
(g) There is no pending or known threatened action or
proceeding (including, without limitation, any action or proceeding
relating to any environmental protection laws or regulations) affecting the
Account Party or its properties, or any of its Principal Subsidiaries or
its properties, before any court, governmental agency or arbitrator (i)
which affects or purports to affect the legality, validity or
enforceability of the Loan Documents or the Related Documents or any of
them or (ii) as to which there is a reasonable possibility of an adverse
determination and which, if adversely determined, would materially
adversely affect the financial condition, properties, prospects or
operations of the Account Party and its Principal Subsidiaries taken as a
whole; except, for purposes of clause (ii) only, such as is described in
the Account Party's Annual Report on Form 10-K for the fiscal year ended
December 31, 1992, in the Account Party's Quarterly Reports on Form 10-Q
for the periods ended March 31, 1993 or June 30, 1993, or in the Account
Party's Current Reports on Form 8-K, dated June 3, 1993, June 30, 1993
and/or September 10, 1993 or in Schedule II hereto.
(h) No ERISA Plan Termination Event has occurred nor is
reasonably expected to occur with respect to any ERISA Plan which would
materially adversely affect the financial condition, properties, prospects
or operations of the Account Party and its Subsidiaries taken as a whole,
except as disclosed to and consented to in writing by the Majority Lenders.
Since the date of the most recent Schedule B (Actuarial Information) to the
annual report of each such ERISA Plan (Form 5500 Series), there has been no
material adverse change in the funding status of the ERISA Plans referred
to therein, and no prohibited transaction has occurred with respect
thereto that, singly or in the aggregate with all other prohibited
transactions and after giving effect to all likely consequences thereof,
would be reasonably expected to have a material adverse effect on the
financial condition, properties, prospects or operations of the Account
Party and its Subsidiaries taken as a whole. Neither the Account Party nor
any of its ERISA Affiliates has incurred nor reasonably expects to incur
any material withdrawal liability under ERISA to any ERISA Multiemployer
Plan, except as disclosed to all Lenders and consented to in writing by the
Majority Lenders.
(i) The Account Party or one of its Principal Subsidiaries
has good and marketable title (or, in the case of personal property, valid
title) or valid leasehold interests in the electric generating plants of
which it is named as owner in Item 2 of the Account Party's Annual Report
on Form 10-K for the fiscal year ended December 31, 1992 under the caption
System Generating Plants , except for minor defects in title that do not
interfere with the ability of the Account Party or any of its Principal
Subsidiaries to conduct its business as now conducted. All such assets and
properties are free and clear of any Lien, other than Liens permitted under
Section 7.02(a) hereof.
(j) All outstanding shares of capital stock having ordinary
voting power for the election of directors of the Account Party have been
validly issued, are fully paid and nonassessable and are owned beneficially
by NU, free and clear of any Lien. NU is a holding company (as defined
in the Public Utility Holding Company Act of 1935, as amended).
(k) The Account Party and each of its Principal Subsidiaries
has filed all tax returns (Federal, state and local) required to be filed
and paid taxes shown thereon to be due, including interest and penalties,
or, to the extent the Account Party or any of its Principal Subsidiaries is
contesting in good faith an assertion of liability based on such returns,
has provided adequate reserves in accordance with generally accepted
accounting principles for payment thereof.
(l) The Information Memorandum did not contain when made any
material misstatement of fact or omit to state any material fact necessary
to make the statements contained therein not misleading in light of the
circumstances under which they were made; and no other exhibit, schedule,
report or other written information provided by or on behalf of the Account
Party or its agents to the Agent, the Issuing Bank or the Participating
Banks in connection with the negotiation, execution and closing of this
Agreement, the other Loan Documents or the Related Documents knowingly
contained when made any material misstatement of fact or knowingly omitted
to state any material fact necessary to make the statements contained
therein not misleading in light of the circumstances under which they were
made.
(m) No proceeds of any Advance will be used in violation of,
or in any manner that would result in a violation by any party hereto of,
Regulations G, T, U or X promulgated by the Board of Governors of the
Federal Reserve System or any successor regulations. The Account Party (A)
is not an investment company within the meaning ascribed to that term in
the Investment Company Act of 1940 and (B) is not engaged in the business
of extending credit for the purpose of buying or carrying margin stock.
ARTICLE VII
COVENANTS OF THE ACCOUNT PARTY
SECTION 7.01. Affirmative Covenants. So long as any amounts
shall remain available to be drawn under the Letter of Credit or any
Advance or other amounts shall remain unpaid hereunder or any Participating
Bank shall have any Commitment, the Account Party will, unless the Majority
Lenders shall otherwise consent in writing:
(a) Use of Proceeds. Apply all proceeds of each Advance
solely as specified in Section 3.02 and Section 6.01(m) hereof.
(b) Payment of Taxes, Etc. Pay and discharge before the
same shall become delinquent, and cause each of its Principal Subsidiaries
to pay and discharge before the same shall become delinquent, all taxes,
assessments and governmental charges, royalties or levies imposed upon it
or upon its property except to the extent the Account Party or any of its
Principal Subsidiaries is contesting the same in good faith by appropriate
proceedings and has set aside adequate reserves in accordance with
generally accepted accounting principles for the payment thereof.
(c) Maintenance of Insurance. Maintain, or cause to be
maintained, insurance (including appropriate plans of self-insurance)
covering the Account Party, its Principal Subsidiaries and their respective
properties, in effect at all times in such amounts and covering such risks
as may be required by law and in addition as is usually carried by
companies engaged in similar businesses and owning similar properties.
(d) Preservation of Existence, Etc. Subject at all times to
Section 7.02(b) hereof, preserve and maintain, and cause each of its
Principal Subsidiaries to preserve and maintain, its existence, corporate
or otherwise, material rights (statutory and otherwise) and franchises
except for such rights and franchises which do not materially adversely
affect the financial condition, properties, prospects or operations of the
Account Party or any of its Principal Subsidiaries.
(e) Compliance with Laws, Etc.. Comply, and cause each of
its Principal Subsidiaries to comply, in all material respects with the
requirements of all applicable laws, rules, regulations and orders of any
governmental authority, including, without limitation, any such laws,
rules, regulations and orders issued by the Securities and Exchange
Commission or relating to zoning, environmental protection, use and
disposal of Hazardous Substances, land use, construction and building
restrictions, ERISA and employee safety and health matters relating to
business operations, except to the extent (i) that the Account Party or any
of its Principal Subsidiaries is contesting the same in good faith by
appropriate proceedings or (ii) that any such non-compliance, and the
enforcement or correction thereof, would not materially adversely affect
the financial condition, properties, prospects or operations of the Account
Party or any of its Principal Subsidiaries.
(f) Inspection Rights. At any time and from time to time
upon reasonable notice, permit the Issuing Bank and its agents and
representatives to examine the records and books of account of, and the
properties of, the Account Party and any of its Principal Subsidiaries.
(g) Keeping of Books. Keep proper records and books of
account, in which full and correct entries shall be made of all financial
transactions of the Account Party and its Principal Subsidiaries and the
assets and business of the Account Party and its Principal Subsidiaries, in
accordance with generally accepted accounting practices consistently
applied.
(h) Conduct of Business. Conduct its primary business, and
cause each of its Principal Subsidiaries to conduct its primary business,
in substantially the same manner and in substantially the same fields as
such business is conducted on the Closing Date.
(i) Maintenance of Properties, Etc. (i) As to properties
of the type described in Section 6.01(i) hereof, subject at all times to
Section 7.02(b) hereof, maintain, and cause its Principal Subsidiaries to
maintain, title of the quality described therein; and (ii) preserve,
maintain, develop, and operate, and cause its Principal Subsidiaries to
preserve, maintain, develop and operate, in substantial conformity with all
laws, material contractual obligations and prudent practices prevailing in
the industry, all of its properties which are used or useful in the conduct
of its or its Principal Subsidiaries' respective businesses in good working
order and condition, ordinary wear and tear excepted, except to the extent
such non- conformity would not materially adversely affect the financial
condition, properties, prospects or operations of the Account Party or any
of its Principal Subsidiaries; provided, however, that the Account Party or
any Principal Subsidiary will not be prevented from discontinuing the
operation and maintenance of any such properties if such discontinuance is,
in the judgment of the Account Party or such Principal Subsidiary,
desirable in the operation or maintenance of its business and would not
materially adversely affect the financial condition, properties, prospects
or operations of the Account Party or such Principal Subsidiary.
(j) Governmental Approvals. Duly obtain, and cause each of
its Principal Subsidiaries to duly obtain, on or prior to such date as the
same may become legally required, and thereafter maintain in effect at all
times, all Governmental Approvals on its or such Principal Subsidiary's
part to be obtained, except with respect to those Governmental Approvals
referred to in clause (ii) of the definition of Governmental Approvals ,
(i) those the absence of which would not materially adversely affect the
financial condition, properties, prospects or operations of the Account
Party or any Principal Subsidiary and (ii) those which the Account Party is
diligently attempting in good faith to obtain, renew or extend, or the
requirement for which the Account Party is contesting in good faith by
appropriate proceedings or by other appropriate means; provided, however,
that the exception afforded by clause (ii), above, shall be available only
if and for so long as such attempt or contest, and any delay resulting
therefrom, does not have a material adverse effect on the financial
condition, properties, prospects or operations of the Account Party or any
Principal Subsidiary and does not magnify to any significant degree any
such material adverse effect that would reasonably be expected to result
from the absence of such Governmental Approval.
(k) Further Assurances. Promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary or that any Participating Bank through the Issuing Bank may
reasonably request in order to fully give effect to the interests and
properties purported to be covered by the Security Documents.
(l) Related Documents. Perform and comply in all material
respects with each of the provisions of each Related Document to which it
is a party.
(m) Ratings. Maintain at all times ratings in respect of the
Bonds of at least two nationally-recognized rating services, of which at
least one shall be S&P or Moody's.
SECTION 7.02. Negative Covenants. So long as any amount shall
remain available to be drawn under the Letter of Credit or any Advance or
other amounts shall remain unpaid hereunder or any Participating Bank shall
have any Commitment, the Account Party will not, without the written
consent of the Majority Lenders:
(a) Liens, Etc. Create, incur, assume or suffer to exist
any lien, security interest, or other charge or encumbrance (including the
lien or retained security title of a conditional vendor) of any kind, or
any other type of preferential arrangement the intent or effect of which is
to assure a creditor against loss or to prefer one creditor over another
creditor upon or with respect to any of its properties or assets (any of
the foregoing being referred to herein as a Lien ), excluding, however,
from the operation of the foregoing restrictions the Liens created or
perfected under or in connection with the Pledge Agreement, and the
following, whether now existing or hereafter created or perfected:
(i) Liens created by (A) the Indenture of Mortgage and
Deed of Trust dated as of May 1, 1921, from the Account Party to Bankers
Trust Company, as Trustee, as amended and supplemented (the CL&P Indenture
), or (B) the First Mortgage Indenture and Deed of Trust dated as of
January 1, 1958, from the Hartford Electric Light Company ( HELCO ) to the
First National Bank of Boston, as Successor Trustee, as amended and
supplemented (the HELCO Indenture );
(ii) Liens on the Account Party's interest in the
Millstone Unit No. 1, Millstone Unit No. 2 or Millstone Unit No. 3 nuclear
generating units in Waterford, Connecticut, or nuclear fuel for any or all
nuclear units in which the Account Party has an interest (including,
without limitation, Millstone Unit No. 1, Millstone Unit No.2 and Millstone
Unit No. 3);
(iii) Permitted Liens or Permitted Encumbrances
under the CL&P Indenture or the HELCO Indenture;
(iv) any Lien on assets of any of its Subsidiaries
created or assumed to secure Debt owing by any of its Subsidiaries to the
Account Party or to any wholly-owned Subsidiary of the Account Party;
(v) any purchase money Lien or construction mortgage on
assets hereafter acquired or constructed by the Account Party or any of its
Subsidiaries and any Lien on any assets existing at the time of acquisition
thereof by the Account Party or any of its Subsidiaries, or created within
180 days from the date of completion of such acquisition or construction;
provided that such Lien shall at all times be confined solely to the assets
so acquired or constructed and any additions thereto;
(vi) any existing Liens on assets now owned by the
Account Party or any of its Subsidiaries; Liens on assets or stock of any
class of, or any partnership or joint venture interest in, any of its
Subsidiaries existing at the time it becomes a Subsidiary of the Account
Party, and liens existing on assets of a corporation or other going concern
when it is merged into or with the Account Party or a Subsidiary of the
Account Party, or when substantially all of its assets are acquired by the
Account Party or a Subsidiary of the Account Party; provided that such
Liens shall at all times be confined solely to such assets, or if such
assets constitute a utility system, additions to or substitutions for such
assets;
(vii) Liens resulting from legal proceedings being
contested in good faith by appropriate legal or administrative proceedings
by the Account Party or any of its Subsidiaries, and as to which the
Account Party or any of its Subsidiaries, as the case may be, to the extent
required by generally accepted accounting principles applied on a
consistent basis, shall have set aside on its books adequate reserves;
(viii) Liens created in favor of the other contracting
party in connection with advance or progress payments;
(ix) any Liens in favor of any state of the United
States or any political subdivision of any such state, or any agency of any
such state or political subdivisions, or trustee acting on behalf of
holders of obligations issued by any of the foregoing or any financial
institutions lending to or purchasing obligations of any of the foregoing,
which Lien is created or assumed for the purpose of financing all or part
of the cost of acquiring or constructing the property subject thereto;
(x) Liens resulting from conditional sale agreements,
capital leases or other title retention agreements;
(xi) Liens on property of the Account Party or any of
its Subsidiaries related to the financing of pollution control facilities;
(xii) Liens on accounts receivable and power contracts
resulting from financing transactions;
(xiii) any other Liens incurred in the ordinary course
of business otherwise than to secure Debt; and
(xiv) any extension, renewal or replacement of Liens
permitted by clauses (i) through (vi) and (viii) through (xiii); provided,
however, that the principal amount of Debt secured thereby shall not, at
the time of such extension, renewal or replacement, exceed the principal
amount of Debt so secured and that such extension, renewal or replacement
shall be limited to all or a part of the property which secured the Lien so
extended, renewed or replaced;
(b) Mergers, and Sales of Assets, Etc. Merge with or into
or consolidate with or into, any Person, or permit any of its Subsidiaries
to be a party to, any merger or consolidation, or purchase or otherwise
acquire all or substantially all of the assets or stock of any class of, or
any partnership or joint venture interest in, any other Person or entity,
or sell, transfer, convey or lease all or any substantial part of its
assets (other than sales, transfers or conveyances of receivables and power
contracts), except for, and then only after receipt of all necessary
corporate and governmental or regulatory approvals and provided, that,
before and after giving effect to any such merger, consolidation, purchase,
acquisition, sale, transfer, conveyance or lease, no Event of Default or
Unmatured Default shall have occurred and be continuing:
(i) any such merger or consolidation, sale, transfer,
conveyance, lease or assignment of or by any wholly-owned Subsidiary of the
Account Party into the Account Party or into, with or to any other wholly-
owned Subsidiary of the Account Party and any such purchase or other
acquisition by the Account Party or any wholly-owned Subsidiary of the
Account Party of the assets or stock of any wholly-owned Subsidiary of the
Account Party;
(ii) any such sale of assets (other than stock) which
comprise all or any part of its interest in a nuclear power generating
plant (whether completed or under construction);
(iii) any such merger or consolidation of the Account
Party with or into another wholly-owned Subsidiary of NU and/or a
Regulatory Transaction Entity and/or an entity owning a cogeneration or
independent power project, pursuant to step-in or similar rights granted
pursuant to a pre-existing power purchase contract, if (but only if): (A)
the successor or surviving corporation, if not the Account Party, shall
have assumed or succeeded to all of the liabilities of the Account Party
(including the liabilities of the Account Party under this Agreement), and
(B) the Agent shall have received the favorable written opinion of counsel
to the Account Party, in form and substance satisfactory to the Agent and
the Majority Lenders, to the effect of the foregoing subclause (A);
provided, however, in the event of a merger or consolidation with a
Regulatory Transaction Entity, if the purchase price plus the amount of any
liabilities assumed in connection with such merger or consolidation exceeds
$100,000,000, the Account Party shall deliver to the Agent with sufficient
copies for each Participating Bank 30 days prior to such merger or
consolidation, a certificate of a duly authorized officer of the Account
Party demonstrating projected compliance with the ratio set forth in
Section 7.02(d) hereof for and as of each of the three consecutive fiscal
quarters immediately succeeding such merger or consolidation and certifying
that such projections were prepared in good faith and on reasonable
assumptions;
(iv) any purchase or acquisition of all or substantially
all of the assets of or stock of any class of, or any partnership or joint
venture interest in (and any assumption of the related liabilities) (A) an
entity owning a cogeneration or independent power project, pursuant to
step- in or similar rights granted pursuant to a pre-existing power
purchase contract; (B) a Regulatory Transaction Entity; or (C) any other
Person if the purchase price of such acquisition plus the amount of any
liabilities assumed by the Account Party in connection therewith does not
exceed $50,000,000 in the aggregate; provided, however, in the event of a
purchase or acquisition of a Regulatory Transaction Entity, if the purchase
price plus the amount of any liabilities assumed in connection with such
purchase or acquisition exceeds in the aggregate $100,000,000, the Account
Party shall deliver to the Agent with sufficient copies for each
Participating Bank 30 days prior to such purchase or acquisition, a
certificate of a duly authorized officer of the Account Party demonstrating
projected compliance with the ratio set forth in Section 7.02(d) hereof for
and as of each of the three consecutive fiscal quarters immediately
succeeding such purchase or acquisition and certifying that such
projections were prepared in good faith and on reasonable assumptions; or
(v) any purchase or acquisition of a joint venture
interest in a generating and/or transmission facility or in a mutual
insurance company providing nuclear liability or nuclear property or
replacement power insurance.
(c) Compliance with ERISA. (i) Terminate, or permit any
ERISA Affiliate to terminate, any ERISA Plan so as to result in any
liability of the Account Party or any Principal Subsidiary to the PBGC in
an amount greater than $1,000,000, or (ii) permit to exist any occurrence
of any Reportable Event (as defined in Title IV of ERISA) which, alone or
together with any other Reportable Event with respect to the same or
another ERISA Plan, has a reasonable possibility of resulting in liability
of the Account Party or any Subsidiary to the PBGC in an aggregate amount
exceeding $1,000,000, or any other event or condition, which presents a
material risk of such a termination by the PBGC of any ERISA Plan or has a
reasonable possibility of resulting in a liability of the Account Party or
any Subsidiary to the PBGC in an aggregate amount exceeding $1,000,000.
(d) Common Equity Ratio. Permit the ratio (expressed as a
percentage) of Consolidated Common Equity to Consolidated Capitalization to
be less than 30% for any three consecutive fiscal quarters.
SECTION 7.03. Reporting Obligations. So long as any amount
shall remain available to be drawn under the Letter of Credit or any
Advance or other amounts shall remain unpaid hereunder or any Participating
Bank shall have any Commitment, the Account Party will, unless the Majority
Lenders shall otherwise consent in writing, furnish to the Agent in
sufficient copies for the Issuing Bank and each Participating Bank, the
following:
(i) as soon as possible and in any event within ten days
after the occurrence of each Event of Default or Unmatured Default
continuing on the date of such statement, a statement of the Chief
Financial Officer, Treasurer or Assistant Treasurer of the Account Party
setting forth details of such Event of Default or Unmatured Default and the
action which the Account Party proposes to take with respect thereto;
(ii) as soon as available and in any event within 50
days after the end of each of the first three quarters of each fiscal year
of the Account Party, a copy of the Account Party's Quarterly Report on
Form 10-Q, if any, submitted to the Securities and Exchange Commission with
respect to such quarter, containing financial statements in reasonable
detail and duly certified (subject to year-end audit adjustments) by the
Chief Financial Officer, Treasurer, Assistant Treasurer or Comptroller of
the Account Party as having been prepared in accordance with the system of
management financial reports of the Account Party applied on a basis
consistent with the financial statements referred to in Section 6.01(f)
hereof and accompanied by a certificate of a duly authorized officer of the
Account Party (X) stating that no Event of Default or Unmatured Default has
occurred and is continuing or, if an Event of Default or Unmatured Default
has occurred and is continuing, describing the nature thereof and the
action which the Account Party proposes to take with respect thereto and
(Y) demonstrating compliance with Section 7.02(d) hereof for and as of the
end of such fiscal quarter, such demonstration to be in a schedule (in form
satisfactory to the Agent) which sets forth the computations used in
determining such compliance;
(iii) as soon as available and in any event within 105
days after the end of each fiscal year of the Account Party, a copy of the
Account Party's Annual Report on Form 10-K submitted to the Securities and
Exchange Commission with respect to such year, containing financial
statements certified by a nationally-recognized independent public
accountant and to be accompanied by a certificate of the Chief Financial
Officer, Treasurer, Assistant Treasurer or Comptroller of the Account Party
(X) stating that no Event of Default or Unmatured Default has occurred and
is continuing, or if an Event of Default or Unmatured Default has occurred
and is continuing, describing the nature thereof and the action which the
Account Party proposes to take with respect thereto and (Y) demonstrating
compliance with Section 7.02(d) hereof for and as of the end of such fiscal
year, such demonstration to be in a schedule (in form satisfactory to the
Agent) which sets forth the computations used in determining such
compliance;
(iv) as soon as possible and in any event (A) within
30 days after the Chief Financial Officer, Treasurer or any Assistant
Treasurer of the Account Party knows or has reason to know that any ERISA
Plan Termination Event described in clause (i) of the definition of ERISA
Plan Termination Event with respect to any ERISA Plan or ERISA
Multiemployer Plan has occurred and (B) within 10 days after the Account
Party knows or has reason to know that any other ERISA Plan Termination
Event with respect to any ERISA Plan or ERISA Multiemployer Plan has
occurred, a statement of the Chief Financial Officer, Treasurer or
Assistant Treasurer of the Account Party describing such ERISA Plan
Termination Event and the action, if any, which the Account Party proposes
to take with respect thereto;
(v) promptly after receipt thereof by the Account Party
or any of its ERISA Affiliates from the PBGC, copies of each notice
received by the Account Party or any such ERISA Affiliate of the PBGC's
intention to terminate any ERISA Plan or ERISA Multiemployer Plan or to
have a trustee appointed to administer any ERISA Plan or ERISA
Multiemployer Plan;
(vi) promptly after receipt thereof by the Account
Party or any of its ERISA Affiliates from an ERISA Multiemployer Plan
sponsor, a copy of each notice received by the Account Party or any of its
ERISA Affiliates concerning the imposition or amount of withdrawal
liability in an aggregate principal amount of at least $1,000,000 pursuant
to Section 4202 of ERISA in respect of which the Account Party may be
liable;
(vii) promptly after the Account Party or any
Subsidiary becomes aware of the commencement thereof, notice of all
actions, suits, proceedings or other events of the type described in
Section 6.01(g) hereof;
(viii) promptly after the filing thereof, copies of
each prospectus (excluding any prospectus contained in any Form S-8) and
Current Report on Form 8-K, if any, which the Account Party or any
Principal Subsidiary files with the Securities and Exchange Commission or
any governmental authority which may be substituted therefor;
(ix) promptly after receipt thereof, any assertion of
the character described in Section 8.01(h) hereof and the action the
Account Party proposes to take with respect thereto; and
(x) promptly after requested, such other information
respecting the financial condition, operations, properties, prospects or
otherwise, of the Account Party or its Subsidiaries as the Agent on behalf
of the Majority Lenders may from time to time reasonably request in
writing.
ARTICLE VIII
DEFAULTS
SECTION 8.01. Events of Default. The following events shall
each constitute an Event of Default if the same shall occur and be
continuing after the grace period and notice requirement (if any)
applicable thereto:
(a) The Account Party shall fail to pay any interest on any
Advance or pursuant to Section 4.02 hereof within two days after the same
becomes due; or the Account Party shall fail to reimburse the Issuing Bank
for any Interest Drawing (as defined in the Letter of Credit) within two
days after such reimbursement becomes due; or the Account Party shall fail
to pay any fees or commissions hereunder within five days after the same
becomes due; or the Account Party shall fail to make any other payment
required to be made pursuant to Article II or Article III hereof when due;
or
(b) Any representation or warranty made by the Account Party
(or any of its officers or agents) in this Agreement, the Pledge Agreement
or the Purchase Contract, or in any certificate or other writing delivered
pursuant to this Agreement or the Purchase Contract, shall prove to have
been incorrect in any material respect when made or deemed made; or
(c) The Account Party shall fail to perform or observe any
term or covenant on its part to be performed or observed contained in
Sections 7.01(d), Section 7.02(b) or (d), or Section 7.03(i) hereof; or
(d) The Account Party shall fail to perform or observe any
other term or covenant on its part to be performed or observed contained in
this Agreement or the Pledge Agreement and any such failure shall remain
unremedied, after the earlier of written notice having been given to the
Account Party by the Agent, the Issuing Bank or any Participating Bank, and
actual knowledge thereof by the Account Party, for a period of 30 days; or
(e) The Account Party or any Principal Subsidiary shall fail
to pay any of its Debt when due (including any interest or premium thereon
but excluding Debt arising hereunder and excluding other Debt aggregating
in no event more than $10,000,000 in principal amount at any one time)
whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise, and such failure shall continue after the applicable grace
period, if any, specified in any agreement or instrument relating to such
Debt; or any other default under any agreement or instrument relating to
any such Debt, or any other event, shall occur and shall continue after the
applicable grace period, if any, specified in such agreement or instrument,
if the effect of such default or event is to accelerate, or to permit the
acceleration of, the maturity of such Debt; or any such Debt shall be
declared to be due and payable, or required to be prepaid (other than by a
regularly scheduled required prepayment or as a result of the Account
Party's or such Principal Subsidiary's exercise of a prepayment option)
prior to the stated maturity thereof; or
(f) The Account Party or any Principal Subsidiary shall
generally not pay its debts as such debts become due, or shall admit in
writing its inability to pay its debts generally, or shall make an
assignment for the benefit of creditors; or any proceeding shall be
instituted by or against the Account Party or such Principal Subsidiary
seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief, or
composition of its debts under any law relating to bankruptcy, insolvency,
or reorganization or relief of debtors, or seeking the entry of an order
for relief or the appointment of a receiver, trustee, or other similar
official for it or for any substantial part of its property and, in the
case of a proceeding instituted against the Account Party or such Principal
Subsidiary, either the Account Party or such Principal Subsidiary shall
consent thereto or such proceeding shall remain undismissed or unstayed for
a period of 90 days or any of the actions sought in such proceeding
(including without limitation the entry of an order for relief against the
Account Party or such Principal Subsidiary or the appointment of a
receiver, trustee, custodian or other similar official for the Account
Party or such Principal Subsidiary or any of its property) shall occur; or
the Account Party or such Principal Subsidiary shall take any corporate or
other action to authorize any of the actions set forth above in this
subsection (f); or
(g) Any judgment or order for the payment of money in excess
of $10,000,000 shall be rendered against the Account Party or its
properties, or any Principal Subsidiary or its properties, and either (i)
enforcement proceedings shall have been commenced by any creditor upon such
judgment or order and shall not have been stayed or (ii) there shall be any
period of 30 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not be
in effect; or
(h) Any material provision of any Loan Document or any
Related Document shall for any reason other than the express terms thereof
or the exercise of any right or option expressly contained therein cease to
be valid and binding on the Account Party, or shall be determined to be
invalid or unenforceable by any court, governmental agency or authority
having jurisdiction over the Account Party, or the Account Party shall deny
that it has any further liability or obligation under this Agreement or any
Related Document, or any party to a Related Document shall so assert in
writing; provided, that in the case of any party other than the Account
Party making such assertion in respect of any Related Document, such
assertion shall not in and of itself constitute an Event of Default
hereunder until (i) such asserting party shall cease to perform under and
in compliance with such Related Document, (ii) the Account Party shall fail
to diligently prosecute, by appropriate action or proceedings, a rescission
of such assertion or a binding determination as to the merits thereof or
(iii) such a binding determination shall have been made in favor of such
asserting party's position; or
(i) The Security Documents shall for any reason, except to
the extent permitted by the terms thereof, fail or cease to create valid
and perfected Liens (to the extent purported to be granted by such
documents and subject to the exceptions permitted thereunder) in any of the
Collateral (other than Liens in favor of the Trustee with respect to the
interests of the Issuer under the Indenture Documents), provided, that such
failure or cessation relating to any non-material portion of such
Collateral shall not constitute an Event of Default hereunder unless the
same shall not have been corrected within 30 days after the Account Party
becomes aware thereof; or
(j) NU shall cease to own 100% of the issued and outstanding
shares of the capital stock of the Account Party having ordinary voting
power for the election of directors, free and clear of any Liens; or
(k) An event of default (as defined therein) shall have
occurred and be continuing under the Indenture Documents.
SECTION 8.02. Remedies Upon Events of Default. Upon the
occurrence and during the continuance of any Event of Default, then, and in
any such event, the Agent with the concurrence of the Issuing Bank and the
Majority Lenders may, and upon the direction of the Issuing Bank and the
Majority Lenders the Agent shall (i) if the Letter of Credit shall not have
been issued, instruct the Issuing Bank to (whereupon the Issuing Bank
shall) by notice to the Account Party declare its commitment to issue the
Letter of Credit to be terminated, whereupon the same shall forthwith
terminate, (ii) if the Letter of Credit shall have been issued, instruct
the Issuing Bank to (whereupon the Issuing Bank shall) furnish to the
Trustee and the Paying Agent, at their respective corporate trust offices
as provided in the Indenture Documents, written notice of such Event of
Default in accordance with Section 8.1(A)(4)(1) of the Indenture and of the
Issuing Bank's determination to terminate the Letter of Credit on the fifth
business day (as defined in the Indenture) following the Trustee's and
Paying Agent's receipt of such written notice, (iii) if the Letter of
Credit shall have been issued, instruct the Issuing Bank to (whereupon the
Issuing Bank shall) furnish to the Trustee and the Paying Agent written
notice that the Interest Component will not be reinstated in the amount of
one or more Interest Drawings, all as provided in the Letter of Credit;
(iv) declare the Advances and all other principal amounts outstanding
hereunder, all interest thereon and all other amounts payable hereunder to
be forthwith due and payable, whereupon the Advances and all other
principal amounts outstanding hereunder, all such interest and all such
other amounts shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Account Party, and (v) instruct the
Issuing Bank to (whereupon the Issuing Bank shall) exercise all the rights
and remedies provided herein and under and in respect of the Security
Documents; provided, however, that in the event of the occurrence of any
Event of Default described in Section 8.01(f) with respect to the Account
Party, (A) the commitment of the Issuing Bank to issue the Letter of Credit
and the Commitments and the obligations of the Participating Banks to make
Advances shall automatically be terminated, and (B) the Advances and all
other principal amounts outstanding hereunder, all interest accrued and
unpaid thereon and all other amounts payable hereunder shall automatically
become due and payable, without presentment, demand, protest or any notice
of any kind, all of which are hereby expressly waived by the Account Party.
ARTICLE I
X THE AGENT, THE CO-AGENTS, THE PARTICIPATING BANKS AND THE
ISSUING BANK
SECTION 9.01. Authorization of Agent; Actions of Agent and
Issuing Bank. The Issuing Bank and each Participating Bank hereby appoint
and authorize the Agent to take such action as agent on their behalf and to
exercise such powers under this Agreement as are delegated to the Agent by
the terms hereof, together with such powers as are reasonably incidental
thereto; provided, however, that neither the Agent nor the Issuing Bank
shall be required to take any action which exposes the Agent or the Issuing
Bank to personal liability or which is contrary to this Agreement or
applicable law. As to any matters not expressly provided for by any
Related Document (including, without limitation, enforcement or collection
thereof), neither the Agent nor the Issuing Bank shall be required to
exercise any discretion or take any action. The Agent agrees to deliver
promptly (i) to the Issuing Bank and each Participating Bank copies of each
notice delivered to it by the Account Party and (ii) to each Participating
Bank copies of each notice delivered to it by the Issuing Bank, in each
case pursuant to the terms of this Agreement.
SECTION 9.02. Reliance, Etc. Neither the Agent, the Issuing
Bank, nor any of their directors, officers, agents or employees shall be
liable for any action taken or omitted to be taken by it or them under or
in connection with this Agreement or any Related Document, except for its
or their own gross negligence or willful misconduct as determined by a
court of competent jurisdiction. Without limitation of the generality of
the foregoing, each of the Agent and the Issuing Bank (i) may consult with
legal counsel (including counsel for the Account Party), independent public
accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken in good faith by it in accordance
with the advice of such counsel, accountants or experts; (ii) makes no
warranty or representation to any Participating Bank and shall not be
responsible to any Participating Bank for any statements, warranties or
representations made in or in connection with this Agreement or any Related
Document; (iii) shall not have any duty to ascertain or to inquire as to
the performance or observance of any of the terms, covenants or conditions
of this Agreement or any Related Document on the part of the Account Party
to be performed or observed, or to inspect any property (including the
books and records) of the Account Party; (iv) shall not be responsible to
any Participating Bank for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any
Related Document or any other instrument or document furnished pursuant
hereto and thereto; and (v) shall incur no liability under or in respect of
this Agreement or any Related Document by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telegram, cable
or telex), including, without limitation, any thereof from time to time
purporting to be from the Trustee, believed by it to be genuine and signed
or sent by the proper party or parties.
SECTION 9.03. The Agent, the Co-Agents, the Issuing Bank and
Affiliates. The Agent, the Co-Agents and the Issuing Bank shall have the
same rights and powers under this Agreement as any other Participating Bank
and may exercise (or omit from exercising) the same as though they were not
the Agent, the Co-Agents and the Issuing Bank, respectively, and the term
Participating Bank shall, unless otherwise expressly indicated, include
Deutsche Bank in its individual capacity. The Agent, the Co-Agents, the
Issuing Bank and their respective Affiliates may accept deposits from, lend
money to, act as trustee under indentures of, and generally engage in any
kind of business with, the Account Party, any of its subsidiaries and any
Person who may do business with or own securities of the Account Party or
any such subsidiary, all as if Deutsche Bank was not the Agent or the
Issuing Bank or Bank of Montreal and Credit Suisse were not the Co-Agents,
and without any duty to account therefor to the Participating Banks.
SECTION 9.04. Participating Bank Credit Decision. Each of the
Issuing Bank and each Participating Bank acknowledges that it has,
independently and without reliance upon the Agent, the Co-Agents, the
Issuing Bank or any other Participating Bank and based on the financial
information referred to in Section 6.01(f) hereof and such other documents
and information as it has deemed appropriate, made its own credit analysis
and decision to enter into this Agreement. Each of the Issuing Bank and
each Participating Bank also acknowledges that it will, independently and
without reliance upon the Agent, the Co-Agents, the Issuing Bank or any
other Participating Bank and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement.
SECTION 9.05. Indemnification. The Participating Banks agree to
indemnify the Agent and the Issuing Bank (to the extent not reimbursed by
the Account Party), ratably according to their respective Participation
Percentages, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against the Agent or the Issuing Bank in any way
relating to or arising out of this Agreement or any action taken or omitted
by the Agent or the Issuing Bank under this Agreement, provided that no
Participating Bank shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Agent's or the Issuing Bank's
gross negligence or willful misconduct. Without limitation of the
foregoing, each Participating Bank agrees to reimburse the Agent and the
Issuing Bank promptly upon demand for its ratable share of any amounts for
which the Agent and the Issuing Bank are entitled to reimbursement or
indemnity pursuant to Section 10.04 hereof but are not reimbursed by the
Account Party.
SECTION 9.06. Successor Agent. The Agent may resign at any time
by giving written notice thereof to the Issuing Bank, the Participating
Banks and the Account Party, with any such resignation to become effective
only upon the appointment of a successor Agent pursuant to this Section
9.06. Upon any such resignation, the Issuing Bank shall have the right to
appoint a successor Agent, which shall be another commercial bank or trust
company reasonably acceptable to the Account Party, organized or licensed
under the laws of the United States, or of any State thereof. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent and
the execution and delivery by the Account Party and the successor Agent of
an agreement relating to the fees, if any, to be paid to the successor
Agent in connection with its acting as Agent hereunder, such successor
Agent shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Agent, and the retiring Agent
shall be discharged from its duties and obligations under this Agreement.
After any retiring Agent's resignation hereunder as Agent, the provisions
of this Article IX shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under this Agreement.
SECTION 9.07. Issuing Bank. (a) All notices received by the
Issuing Bank pursuant to this Agreement or any Related Document (other than
the Letter of Credit) shall be promptly delivered to the Agent for
distribution to the Participating Banks.
(b) The Issuing Bank shall not amend or waive any provision
or consent to the amendment or waiver of any Related Document without the
written consent of the Majority Lenders.
(c) Upon receipt by the Issuing Bank from time to time of
any amount pursuant to the terms of any Related Document (other than
pursuant to the terms of this Agreement), the Issuing Bank shall promptly
deliver to the Agent such amount.
ARTICLE
X MISCELLANEOUS
SECTION 10.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Pledge Agreement, nor consent to any
departure by the Account Party therefrom, shall in any event be effective
unless the same shall be in writing and signed by the Majority Lenders, and
then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided, however,
that no amendment, waiver or consent shall, unless in writing and signed by
the Issuing Bank and all the Participating Banks, do any of the following:
(a) waive, modify or eliminate any of the conditions specified in Article
V, (b) increase the Commitments of the Participating Banks that may be
maintained hereunder or subject the Participating Banks to any additional
obligations, (c) reduce the principal of, or interest on, the Advances, any
amount reimbursable on demand pursuant to Section 3.01, or any fees or
other amounts payable hereunder, (d) postpone any date fixed for any
payment of principal of, or interest on, the Advances, such reimbursable
amounts or any fees or other amounts payable hereunder (other than fees
payable to the Issuing Bank or the Agent pursuant to Section 2.03(b)
hereof), (e) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Advances, or the number of Participating
Banks which shall be required for the Participating Banks or any of them to
take any action hereunder, (f) amend this Agreement or the Pledge Agreement
in a manner intended to prefer one or more Participating Banks over any
other Participating Banks, (g) amend this Section 10.01, or (h) release any
of the Collateral otherwise than in accordance with any provisions for such
release contained in the Security Documents, or change any provision of any
Security Document providing for the release of all or substantially all of
the Collateral; and provided, further, that no amendment, waiver or consent
shall, unless in writing and signed by the Issuing Bank or the Agent in
addition to the Participating Banks required above to take such action,
affect the rights or duties of the Issuing Bank or the Agent, as the case
may be, under this Agreement or the Pledge Agreement.
SECTION 10.02. Notices, Etc. All notices and other
communications provided for hereunder and under the other Loan Documents
shall be in writing (including telegraphic, telex, telecopy or cable
communication) and mailed, telegraphed, telexed, telecopied, cabled or
delivered:
(i) if to the Account Party, to it in care of Northeast
Utilities Service Company at 107 Selden Street, Berlin, Connecticut 06037
(telecopy: (203) 665-5457), Attention: Assistant Treasurer;
(ii) if to the Issuing Bank or the Agent, to it at its
address at 31 West 52nd Street, New York, New York 10019 Attention: E.
Scott Medla, (telephone: (212) 474-8025, telecopy: (212) 474-8256) with a
copy to: Peter Sonza, telephone: (212) 474-8112, telecopy: (212) 474-7048).
(iii) if to any Participating Bank, to it at its address
set forth on the signature pages hereof or in the Participation Assignment
pursuant to which it became a Participating Bank; or
as to each party other than any Participating Bank, at such other address
as shall be designated by such party in a written notice to the other
parties, and, as to any Participating Bank, at such other address as shall
be designated by such Participating Bank in a written notice to the Account
Party and the Agent. All such notices and communications shall, when
mailed, telegraphed, telexed, telecopied or cabled, be effective five days
after when deposited in the mails, or when delivered to the telegraph
company, confirmed by telex answerback, telecopied or delivered to the
cable company, respectively, except that notices and communications to the
Agent or the Issuing Bank pursuant to Article II, III or IV shall not be
effective until received by the Agent or the Issuing Bank, as the case may
be.
SECTION 10.03. No Waiver of Remedies. No failure on the part of
any Participating Bank or the Issuing Bank to exercise, and no delay in
exercising, any right hereunder or under any Loan Document shall operate as
a waiver thereof; nor shall any single or partial exercise of any such
right preclude any other or further exercise thereof or the exercise of any
other right. The remedies herein provided are cumulative and not exclusive
of any remedies provided by law.
SECTION 10.04. Costs, Expenses and Indemnification. (a) The
Account Party agrees to pay on demand all costs and expenses, if any
(including, without limitation, reasonable counsel fees and expenses
including, in the case of clause (ii) below, the reasonable allocated cost
of internal counsel), of (i) the Agent and the Issuing Bank in connection
with the preparation, negotiation, execution and delivery of the Loan
Documents and the administration of the Loan Documents, the care and
custody of any and all collateral, and any proposed modification,
amendment, or consent relating thereto; and (ii) the Agent, the Co-Agents,
the Issuing Bank and each Participating Bank in connection with the
enforcement (whether through negotiations, legal proceedings or otherwise)
of this Agreement, the Second Mortgage or any other Loan Document.
(b) The Account Party hereby agrees to indemnify and hold
the Agent, the Co-Agents, the Issuing Bank and each Participating Bank and
their respective officers, directors, employees, professional advisors and
affiliates (each, an Indemnified Person ) harmless from and against any
and all claims, damages, losses, liabilities, costs or expenses (including
reasonable attorney's fees and expenses, whether or not such Indemnified
Person is named as a party to any proceeding or investigation or is
otherwise subjected to judicial or legal process arising from any such
proceeding or investigation) which any of them may incur or which may be
claimed against any of them by any person or entity (except to the extent
such claims, damages, losses, liabilities, costs or expenses arise from the
gross negligence or willful misconduct of the Indemnified Person):
(i) by reason of or in connection with the execution,
delivery or performance of any of the Loan Documents, the Second Mortgage
or the Related Documents or any transaction contemplated thereby, or the
use by the Account Party of the proceeds of any Advance or the use by the
Paying Agent or the Trustee of the proceeds of any drawing under the Letter
of Credit;
(ii) in connection with or resulting from the
utilization, storage, disposal, treatment, generation, transportation,
release or ownership of any Hazardous Substance (A) at, upon or under any
property of the Account Party or any of its Affiliates or (B) by or on
behalf of the Account Party or any of its Affiliates at any time and in any
place;
(iii) in connection with any documentary taxes,
assessments or charges made by any governmental authority by reason of the
execution and delivery of any of the Loan Documents or the Second Mortgage;
(iv) by reason of or in connection with the execution
and delivery or transfer of, or payment or failure to make payment under,
the Letter of Credit; provided, however, that the Account Party shall not
be required to indemnify the Agent, the Co-Agents, the Issuing Bank or any
Participating Bank pursuant to this Section for any claims, damages,
losses, liabilities, costs or expenses to the extent caused by (A) the
Issuing Bank's willful misconduct or gross negligence, as determined by a
court of competent jurisdiction, in determining whether documents presented
under the Letter of Credit are genuine or comply with the terms of the
Letter of Credit or (B) the Issuing Bank's willful or grossly negligent
failure, as determined by a court of competent jurisdiction, to make lawful
payment under the Letter of Credit after the presentation to it by the
Paying Agent of a draft and certificate strictly complying with the terms
and conditions of the Letter of Credit; or
(v) by reason of any inaccuracy or alleged inaccuracy in
any material respect, or any untrue statement or alleged untrue statement
of any material fact, contained in the Information Memorandum or in any
Preliminary Official Statement or Official Statement relating to the Bonds
or any amendment or supplement thereto, except to the extent contained in
or arising from information in the Information Memorandum or any
Preliminary Official Statement or Official Statement relating to the Bonds
supplied in writing by and describing the Issuing Bank.
(c) Nothing contained in this Section 10.04 is intended to
limit the Account Party's obligations set forth in Articles II, III and IV.
The Account Party's obligations under this Section 10.04 shall survive the
creation and sale of any participation interest pursuant to Section 10.06
hereof and shall survive as well the repayment of all amounts owing to the
Agent, the Co-Agents, the Issuing Bank and the Participating Banks under
the Loan Documents and the termination of the Commitments. If and to the
extent that the obligations of the Account Party under this Section 10.04
are unenforceable for any reason, the Account Party agrees to make the
maximum contribution to the payment and satisfaction thereof which is
permissible under applicable law.
SECTION 10.05. Right of Set-off. (a) Upon (i) the occurrence
and during the continuance of any Event of Default and (ii) the taking of
any action or the giving of any instruction by the Agent as specified by
Section 8.02 hereof, the Issuing Bank and each Participating Bank are
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by the Issuing Bank or such Participating
Bank to or for the credit or the account of the Account Party against any
and all of the obligations of the Account Party now or hereafter existing
under this Agreement in favor of the Issuing Bank or such Participating
Bank, irrespective of whether or not the Issuing Bank or such Participating
Bank shall have made any demand under this Agreement and although such
obligations may be unmatured. The Issuing Bank and each Participating Bank
agrees promptly to notify the Account Party after any such set-off and
application provided that the failure to give such notice shall not affect
the validity of such set-off and application. The rights of the Issuing
Bank and each Participating Bank under this Section are in addition to
other rights and remedies (including, without limitation, other rights of
set-off) which the Issuing Bank and/or such Participating Bank may have.
(b) The Account Party agrees that it shall have no right of
off-set, deduction or counterclaim in respect of its obligations hereunder,
and that the obligations of the Issuing Bank and of the several
Participating Banks hereunder are several and not joint. Nothing contained
herein shall constitute a relinquishment or waiver of the Account Party's
rights to any independent claim that the Account Party may have against the
Issuing Bank or any Participating Bank, but no Participating Bank shall be
liable for the conduct of the Issuing Bank or any other Participating Bank,
and the Issuing Bank shall not be liable for the conduct of any
Participating Bank.
SECTION 10.06. Binding Effect; Assignments and Participants.
(a) This Agreement shall become effective when it shall have been executed
and delivered by the Account Party, the Agent, the Co-Agents, the Issuing
Bank and each Participating Bank named on the signature pages hereto and
thereafter shall be binding upon and inure to the benefit of the Account
Party, the Agent, the Co-Agents, the Issuing Bank and each Participating
Bank and their respective successors and assigns, except that the Account
Party shall not have the right to assign its rights hereunder or any
interest herein nor transfer any of its obligations without the prior
written consent of the Issuing Bank and each Participating Bank, and the
Issuing Bank may not assign its commitment to issue the Letter of Credit or
its obligations under or in respect of the Letter of Credit.
(b) Each Participating Bank may assign all or any portion of
its rights and transfer its obligations under this Agreement, under the
Letter of Credit or in any security hereunder, including, without
limitation, any instruments securing the Account Party's obligations
hereunder; provided that (i) no assignment by any Participating Bank may be
made to any Person, except with the prior written consent of (A) the
Account Party (which consent shall not be unreasonably withheld and, in the
case of an assignment to another Participating Bank or to an Affiliate of a
Participating Bank, shall not be required) and (B) the Issuing Bank, (ii)
any assignment shall be of a constant and not a varying percentage of all
of the assignor's rights and obligations hereunder and (iii) the parties to
each such assignment shall execute and deliver to the Agent a Participation
Assignment, together with a processing fee of $3,000. Upon receipt of a
completed Participation Assignment and the processing fee, the Agent will
record in a register maintained for such purpose the name of the assignee
and the percentage participation interest assigned by the assignor and
assumed by the assignee for purposes of the determination of such
assignor's and assignee's respective Participation Percentages. Upon such
execution, delivery, acceptance and recording, from and after the effective
date specified in each Participation Assignment, which effective date shall
be at least five Business Days after the execution thereof, the assignee
shall, to the extent of such assignment, become a party hereto and have all
of the rights and obligations of a Participating Bank hereunder and, to
the extent of such assignment, such assigning Participating Bank shall be
released from its obligations hereunder (without relieving such
Participating Bank from any liability for damages, costs and expenses
suffered by the Issuing Bank or the Account Party as a result of the
failure by such Participating Bank to perform its obligations hereunder).
(c) Each Participating Bank may grant participations to one
or more Persons in all or any part of, or any interest (undivided or
divided) in, such Participating Bank's rights and obligations under this
Agreement (any such Person being referred to hereinafter as a Participant
and such interests are collectively, referred to hereinafter as the Rights
); provided, however, that (i) such Participating Bank's obligations under
this Agreement shall remain unchanged; (ii) any such Participant shall be
entitled to the benefits and cost protections provided for in Section 4.03
hereof on the same basis as if it were a Participating Bank hereunder;
(iii) the Account Party, the Agent and the Issuing Bank shall continue to
deal solely and directly with such Participating Bank in connection with
such Participating Bank's rights and obligations under this Agreement; and
(iv) no such Participant, other than an Affiliate of such Participating
Bank, shall be entitled to require such Participating Bank to take or omit
to take any action hereunder, unless such action or omission would have an
effect of the type described in subsections (c), (d) or (h) of Section
10.01 hereof.
(d) Notwithstanding anything contained in this Section 10.06
to the contrary, the Issuing Bank and any Participating Bank may assign and
pledge all or any portion of the Advances (or participating interests
therein) owing to the Issuing Bank or such Participating Bank to any
Federal Reserve Bank (and its transferees) as collateral security pursuant
to Regulation A of the Board of Governors of the Federal Reserve System and
any Operating Circular issued by such Federal Reserve Bank. No such
assignment shall release the Issuing Bank or such Participating Bank from
its obligations hereunder.
SECTION 10.07. Relation of the Parties; No Beneficiary. No
term, provision or requirement, whether express or implied, of any Loan
Document, or actions taken or to be taken by any party thereunder, shall be
construed to create a partnership, association, or joint venture between
such parties or any of them. No term or provision of the Loan Documents
shall be construed to confer a benefit upon, or grant a right or privilege
to, any Person other than the parties hereto.
SECTION 10.08. Issuing Bank Not Liable. As between the Agent,
the Co-Agents, the Issuing Bank and the Participating Banks on the one
hand, and the Account Party on the other, the Account Party assumes all
risks of the acts or omissions of the Paying Agent, the Trustee and any
other beneficiary or transferee of the Letter of Credit with respect to its
use of the Letter of Credit. Neither the Agent, the Co-Agents, the Issuing
Bank, any Participating Bank, nor any of their respective officers or
directors shall be liable or responsible for: (a) the use which may be made
of the Letter of Credit or any acts or omissions of the Paying Agent, the
Trustee and any other beneficiary or transferee in connection therewith;
(b) the validity, sufficiency or genuineness of documents, or of any
endorsement thereon, even if such documents should prove to be in any or
all respects invalid, insufficient, fraudulent or forged; (c) payment by
the Issuing Bank against presentation of documents which do not comply with
the terms of the Letter of Credit, including failure of any documents to
bear any reference or adequate reference to the Letter of Credit; or (d)
any other circumstances whatsoever in making or failing to make payment
under the Letter of Credit, except that the Account Party shall have a
claim against the Issuing Bank, and the Issuing Bank shall be liable to the
Account Party, to the extent of any direct, as opposed to consequential,
damages suffered by the Account Party which the Account Party proves were
caused by (i) the Issuing Bank's willful misconduct or gross negligence, as
determined by a court of competent jurisdiction, in determining whether
documents presented under the Letter of Credit are genuine or comply with
the terms of the Letter of Credit or (ii) the Issuing Bank's willful or
grossly negligent failure, as determined by a court of competent
jurisdiction, to make lawful payment under the Letter of Credit after the
presentation to it by the Paying Agent of a draft and certificate strictly
complying with the terms and conditions of the Letter of Credit. In
furtherance and not in limitation of the foregoing, the Issuing Bank may
accept original or facsimile (including telecopy) sight drafts and
accompanying certificates presented under the Letter of Credit that appear
on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary.
SECTION 10.09. Confidentiality. In connection with the
negotiation and administration of this Agreement and the other Loan
Documents, the Account Party has furnished and will from time to time
furnish to the Agent, the Co-Agents, the Issuing Bank and the Participating
Banks (each, a Recipient ) written information which is identified to the
Recipient when delivered as confidential (such information, other than any
such information which (i) was publicly available, or otherwise known to
the Recipient, at the time of disclosure, (ii) subsequently becomes
publicly available other than through any act or omission by the Recipient
or (iii) otherwise subsequently becomes known to the Recipient other than
through a Person whom the Recipient knows to be acting in violation of his
or its obligations to the Account Party, being hereinafter referred to as
Confidential Information ). The Recipient will not knowingly disclose any
such Confidential Information to any third party (other than to those
Persons who have a confidential relationship with the Recipient), and will
take all reasonable steps to restrict access to such information in a
manner designed to maintain the confidential nature of such information, in
each case until such time as the same ceases to be Confidential Information
or as the Account Party may otherwise instruct. It is understood, however,
that the foregoing will not restrict the Recipient's ability to freely
exchange such Confidential Information with prospective assignees of or
participants in the Recipient's position herein, but the Recipient's
ability to so exchange Confidential Information shall be conditioned upon
any such prospective assignee's or participant's entering into an
understanding as to confidentiality similar to this provision. It is
further understood that the foregoing will not prohibit the disclosure of
any or all Confidential Information in any litigation or proceedings
between the Account Party and such Recipient and/or if and to the extent
that such disclosure may be required (i) by a regulatory agency or
otherwise in connection with an examination of the Recipient's records by
appropriate authorities, (ii) pursuant to court order, subpoena or other
legal process or (iii) otherwise, as required by law; in the event of any
required disclosure under clause (ii) or (iii), above, the Recipient agrees
to use reasonable efforts to inform the Account Party as promptly as
practicable unless the Recipient is prohibited from doing so by court
order, subpoena or other legal process.
SECTION 10.10 Waiver of Jury Trial. The Account Party, the
Agent, the Co-Agents, the Issuing Bank, and the Participating Banks each
hereby irrevocably waives all right to trial by jury in any action,
proceeding or counterclaim arising out of or relating to this Agreement or
any other Loan Document, or any other instrument or document delivered
hereunder or thereunder.
SECTION 10.11. Governing Law. This Agreement and the Pledge
Agreement shall be governed by, and construed in accordance with, the laws
of the State of New York. The Account Party, the Agent, the Co-Agents, the
Issuing Bank and each Participating Bank each (i) irrevocably submits to
the jurisdiction of any New York State court or Federal court sitting in
New York City in any action arising out of any Loan Document, (ii) agrees
that all claims in such action may be decided in such court, (iii) waives,
to the fullest extent it may effectively do so, the defense of an
inconvenient forum and (iv) consents to the service of process by mail. A
final judgment in any such action shall be conclusive and may be enforced
in other jurisdictions. Nothing herein shall affect the right of any party
to serve legal process in any manner permitted by law or affect its right
to bring any action in any other court.
SECTION 10.12. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one and the
same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective officers thereunto duly authorized, as
of the date first above written.
THE ACCOUNT PARTY:
THE CONNECTICUT LIGHT AND
POWER COMPANY
By /s/ Bruce F. Garelick
Title: Assistant Treasurer
THE AGENT AND ISSUING BANK:
DEUTSCHE BANK AG, NEW YORK
BRANCH and/or CAYMAN ISLANDS
BRANCH,
as Agent and as Issuing Bank
By /s/Thomas L. Newberry
Title: Vice President
By /s/ E. Scott Medla
Title: Vice President
THE PARTICIPATING BANKS:
DEUTSCHE BANK AG, NEW YORK
BRANCH and/or CAYMAN ISLANDS
BRANCH
By /s/Thomas L. Newberry
Title: Vice President
By /s/ E. Scott Medla
Title: Vice President
Participation Percentage: 23.73552%
Address for Notices
Deutsche Bank AG, New York Branch
31 West 52nd Street
New York, New York 10019
Attention: E. Scott Medla
Telephone: 212.474.8025
Fax: 212.474.8256
BANK OF MONTREAL,
as Participating Bank and Co-Agent
By /s/Joseph M. Longpre
Title: Managing Director
Participation Percentage: 14.04872%
Address for Notices
Bank of Montreal
430 Park Avenue, 16th floor
New York, New York 10022
Attention: John L. Smith
Telephone: 212.605.1617
Fax: 212.605.1648
CREDIT SUISSE,
as Participating Bank and Co-Agent
By /s/Juerg Johner
Title:
By/s/Robert C. Rubino
Title:
Participation Percentage: 14.04872%
Address for Notices
Credit Suisse
12 E. 49th Street, 44th floor
New York, New York 10017
Attention: Juerg Johner
Telephone: 212.238.5404
Fax: 212.238.5439
BANK OF AMERICA NT & SA
By /s/Paul Farrell
Title: Vice President
Participation Percentage: 6.02088%
Address for Notices
Bank of America NT & SA
335 Madison Avenue
New York, New York 10017
Attention: John Jordan
Telephone: 212.503.7558
Fax: 212.503.7066
THE BANK OF NEW YORK
By /s/Mary Lou Bradley
Title: Vice President
Participation Percentage: 6.02088%
Address for Notices
The Bank of New York
1 Wall Street, 19th floor
New York, New York 10286
Attention: Mary Lou Bradley
Telephone: 212.635.7605
Fax: 212.635.7923
THE BANK OF NOVA SCOTIA
By /s/ T.M. Pitcher
Title: Vice President
Participation Percentage: 6.02088%
Address for Notices
The Bank of Nova Scotia
101 Federal Street, 16th floor
Boston, Massachusetts 02208
Attention: Carolyn Lopez
Telephone: 617.737.6313
Fax: 617.951.2177
FLEET BANK, N.A.
By /s/Suresh Chivukula
Title: Vice President
Participation Percentage: 6.02088%
Address for Notices
Fleet Bank, N.A.
One Constitution Plaza
Hartford, Connecticut 06115
Attention: Suresh V. Chivukula
Telephone: 203.244.6038
Fax: 203.244.5391
THE INDUSTRIAL BANK OF JAPAN,
LIMITED, NEW YORK BRANCH
By /s/Robert W. Ramage, Jr.
Title: Senior Vice President
Participation Percentage: 6.02088%
Address for Notices
The Industrial Bank of Japan
245 Park Avenue
New York, New York 10167
Attention: Steven Pottle
Telephone: 212.309.6443
Fax: 212.856.9450
THE LONG-TERM CREDIT BANK
OF JAPAN
By /s/Rikuichi Yoshisue
Title: Joint General Manager
Participation Percentage: 6.02088%
Address for Notices
The Long-Term Credit Bank of Japan
165 Broadway
New York, New York 10006
Attention: Yumiko Noda
Telephone: 212.335.4515
Fax: 212.608.2371/2529
MELLON BANK, N.A.
By /s/Mary Ellen Usher
Title: Vice President
Participation Percentage: 6.02088%
Address for Notices
Mellon Bank, N.A.
One Mellon Bank Center, Room 4425
Pittsburgh, Pennsylvania 15258-0001
Attention: Mary Ellen Usher
Telephone: 412.236.1203
Fax: 412.234.6375
SOCIETE GENERALE
By /s/Gordon N. Eadon
Title: Vice President
By /s/G. St. Denis
Title: Assistant Vice President
Participation Percentage: 6.02088%
Address for Notices
Societe Generale
50 Rockefeller Plaza
New York, New York 10020
Attention: Gordon St. Denis
Telephone: 212.830.7141
Fax: 212.581.8752
SCHEDULE I
APPLICABLE LENDING OFFICES
Name of Domestic Eurodollar
Participating Bank Lending Office Lending Office
Bank of America NT & SA 1850 Gateway Boulevard Same as Domestic
1850 Gateway Boulevard Concord, CA 94520 Tel: Lending Office
(510) 675-7755 Fax:
(510) 675- 7531/7532
Bank of Montreal 430 Park Avenue Same as Domestic
New York, NY 10022 Lending Office
Tel: (212) 605-1436
Fax: (212) 605-1525
The Bank of New York 101 Barclay Street Same as Domestic
New York, NY 10286 Lending Office, c/o
Attn: Commercial Loans Eurodollar/Cayman
Dept. Funding Area
The Bank of Nova Scotia 101 Federal Street Same as Domestic
Boston, MA 02110 Lending Office
Tel: (617) 737-6300
Fax: (617) 951-2177
Credit Suisse 12 East 49th Street Same as Domestic
44th Floor Lending Office
New York, NY 10017
Tel: (212) 238-5404
Fax: (212) 238-5439
Deutsche Bank AG, 31 West 52 Street New York Branch
New York Branch New York, NY 10019 and/or Cayman
Tel: (212) 474-8025 Islands Branch
Fax: (212) 474-8256 31 West 52 Street
New York, NY 10019
Fleet Bank, N.A. One Constitution Plaza Same as Domestic
CTHMMO3G Lending Office
Hartford, CT 06115
Tel: (203) 244-6038
Fax: (203) 244-5391
The Industrial Bank of 245 Park Avenue Same as Domestic
Japan, New York, NY 10167 Lending Office
Limited, New York Branch Tel: (212) 309-6449
Fax: (212) 949-0134
The Long-Term Credit Bank 165 Broadway Same as Domestic
of Japan New York, NY 10006 Lending Office
Tel: (212) 335-4801
Fax: (212) 608-3452
Mellon Bank, N.A. Loan Administration 153-2303 Same as Domestic
P.O. Box 656 Lending Office
Pittsburgh, PA 15230-9972
Attn: Sue Cooke
Tel: (412) 234-8285 Fax:
(412) 236-2028/
234- 5049
Societe Generale 50 Rockefeller Plaza Same as Domestic
New York, NY 10020 Lending Office
Tel: (212) 830-7141
Fax: (212) 581-8752
SCHEDULE II
PENDING ACTIONS
NONE
[Form of Letter of Credit - CDA/CL&P SERIES A]
EXHIBIT 1.01A
IRREVOCABLE LETTER OF CREDIT
NO. 83952561
September 22, 1993
Shawmut Bank Connecticut, National Association
777 Main Street
Hartford, Connecticut 06115
Attention: Corporate Trust Department
Dear Sir or Madam:
We hereby establish, at the request and for the account of The
Connecticut Light and Power Company (the "Account Party"), in your favor,
as Paying Agent (the "Paying Agent") under that certain Indenture of Trust,
dated as of September 1, 1993 (the "Indenture"), by and between the
Connecticut Development Authority (the "Issuer") and Shawmut Bank
Connecticut, National Association, as trustee (the "Trustee"), pursuant to
which $245,500,000 in aggregate principal amount of the Issuer's Pollution
Control Revenue Refunding Bonds (The Connecticut Light and Power Company
Project - 1993A Series) (the "Bonds"), are being issued, our Irrevocable
Letter of Credit No. 83952561, in the amount of US$249,133,000.00 (TWO
HUNDRED FORTY-NINE MILLION ONE HUNDRED THIRTY-THREE THOUSAND AND NO ONE-
HUNDREDTHS UNITED STATES DOLLARS) (subject to reduction and reinstatement
as provided below).
(1) Credit Termination Date. This Letter of Credit shall expire on
the earliest to occur of (i) September 22, 1996 (the "Stated Termination
Date"), (ii) the date upon which we honor a draft accompanying a written
and completed certificate signed by you in substantially the form of
Exhibit 2 attached hereto, and stating therein that such draft is the final
draft to be drawn under this Letter of Credit and that, upon the honoring
of such draft, this Letter of Credit will expire in accordance with its
terms, (iii) the date upon which we receive a written certificate signed by
you and stating therein that no Bonds entitled to the benefits of this
Letter of Credit (as determined in accordance with the Indenture)
("Eligible Bonds") are "Outstanding" under (and as defined in) the
Indenture, (iv) the fifth business day following receipt by you and the
Trustee of written notice from us that an Event of Default (as defined
below) has occurred under the Reimbursement Agreement (as defined below)
and of our determination to terminate this Letter of Credit on such fifth
business day and (v) the date upon which we receive a written certificate
signed by you and stating therein that a substitute or replacement Credit
Facility (as defined in the Indenture) has been provided pursuant to
Section 3.12 of the "Agreement referred to (and as defined) in the
Indenture (such earliest date being the "Credit Termination Date").
As used herein, the term "business day" shall mean any day of the year
(i) that is not a Saturday or Sunday, (ii) that is a day on which banks
located in Hartford, Connecticut and New York, New York are not required or
authorized to remain closed and (iii) that is a day on which banking
institutions in all of the cities in which the principal offices of the
Trustee, the Paying Agent and the Remarketing Agent (as defined in the
Indenture) are located are not required or authorized to remain closed and
(iv) that is a day on which the New York Stock Exchange, Inc. is not
closed.
As used herein "Reimbursement Agreement" shall mean the Letter of
Credit and Reimbursement Agreement, dated as of September 1, 1993, between
the Account Party, us and certain Co-Agents and Participating Banks
referred to therein, and the term "Event of Default" shall mean an "Event
of Default" as that term is defined in the Reimbursement Agreement.
(2) Principal, Interest and Premium Components. The aggregate amount
which may be drawn under this Letter of Credit, subject to reductions in
amount and reinstatement as provided below, is US$249,133,000.00 (TWO
HUNDRED FORTY-NINE MILLION ONE HUNDRED THIRTY-THREE THOUSAND AND NO ONE-
HUNDREDTHS UNITED STATES DOLLARS), of which the aggregate amounts set forth
below may be drawn as indicated.
(i) An aggregate amount not exceeding US$245,500,000.00 (TWO
HUNDRED FORTY-FIVE MILLION FIVE HUNDRED THOUSAND AND NO ONE-HUNDREDTHS
UNITED STATES DOLLARS), as such amount may be reduced and reinstated
as provided below, may be drawn in respect of payment of principal
(whether upon scheduled or accelerated maturity, or upon redemption)
of Eligible Bonds or the portion of the purchase price of Eligible
Bonds corresponding to principal (the "Principal Component").
(ii) An aggregate amount not exceeding US$3,633,000.00 (THREE
MILLION SIX HUNDRED THIRTY-THREE THOUSAND AND NO ONE-HUNDREDTHS UNITED
STATES DOLLARS), as such amount may be reduced and reinstated as
provided below, may be drawn in respect of payment of (A) accrued and
unpaid interest on Eligible Bonds not in the Flexible Mode (as defined
in the Indenture) or that portion of the redemption price or purchase
price of such Eligible Bonds corresponding to accrued and unpaid
interest, but not more than an amount equal to accrued and unpaid
interest on such Eligible Bonds for up to a maximum of 45 days
immediately preceding the date of such drawing and (B) unpaid interest
(whether accrued or to accrue) on Eligible Bonds in the Flexible Mode
or that portion of the redemption price or purchase price of such
Eligible Bonds corresponding to such interest, but not more than an
amount equal to such interest on such Eligible Bonds for up to a
maximum of 45 days immediately preceding the next Purchase Date (as
defined in the Indenture) for each such Eligible Bond (or, if interest
on any such Eligible Bond was not paid on the most recent Purchase
Date for such Bond, for up to a maximum of 45 days immediately
preceding the date of such drawing), calculated, in each case referred
to in the foregoing clause (A) or clause (B) at a maximum rate of
twelve percent (12%) per annum, or such lesser rate of interest as
shall equal the Maximum Interest Rate (as defined in the Indenture) in
effect under the Indenture with respect to such Eligible Bonds, and in
any case calculated on the basis of a year of 365 or 366 days (as
applicable) for the actual days elapsed (the "Interest Component").
(iii) An aggregate amount not exceeding US$0.00 (ZERO UNITED
STATES DOLLARS) may be drawn in respect of premium on Eligible Bonds
(the "Premium Component"). If, subsequent to the date hereof, the
Premium Component shall be increased by us at the request of the
Account Party, the Premium Component shall be subject to reduction as
provided below, and amounts drawn in respect thereof shall not be
subject to reinstatement.
(3) Drawings. Funds under this Letter of Credit are available to you
against (i) your draft, stating on its face: "Drawn under Irrevocable
Letter of Credit No. 83952561, dated September 22, 1993", and (ii) the
appropriate certificate specified below, purportedly executed by you and
appropriately completed.
Exhibit Setting Forth
Type of Drawing Form of Certificate Required
Tender Drawing Exhibit 1
(as hereinafter defined)
Redemption/Mandatory Exhibit 2
Purchase Drawing
(as hereinafter defined)
Interest Drawing Exhibit 3
(as hereinafter
defined)
Drafts and certificates hereunder shall be dated the date of
presentation and shall be presented at our office located at 31 West 52nd
Street, New York, New York 10019 Attention: Volker Fischer or James Roces,
Trade Finance, 6th Floor (telephone: (212) 474-7978) (or at such other
office as we may designate by written notice to you). Presentation of such
drafts and certificates may be made (a) by physical presentation of such
drafts and certificates or (b) by facsimile transmission of such drafts and
certificates received by us at (212) 474-7989 with a copy to Peter Sonza at
(FAX) (212) 474-7048 (or at such other number as we may designate by
written notice to you) with prior telephone notice to us at (212) 474-7978,
Attention: Volker Fischer or James Roces, (or at such other number as we
may designate by written notice to you) that such presentation is to be
made by facsimile transmission and with the original executed drafts and
certificates to be received by us not later than our close of business on
the next business day, it being understood that payments hereunder shall be
made upon receipt by us of such facsimile transmission; provided, however,
that presentations of drafts and certificates relating to Tender Drawings
in respect of Eligible Bonds in the Flexible Mode shall in all instances be
made in accordance with the foregoing clause (b). Drafts drawn under and
in strict compliance with the terms of this Letter of Credit will be duly
honored by us upon presentation thereof in accordance with this Paragraph 3
if presented on or prior to 4:00 P.M. (New York City time) on the Credit
Termination Date as follows:
(i) Tender Drawings; Flexible Mode. In the case of drafts and
certificates relating to Tender Drawings in respect of Eligible Bonds
in the Flexible Mode presented in accordance with the foregoing clause
(b):
(A) if such drafts and certificates are presented as
aforesaid at or prior to 1:30 P.M. (New York City time) on a
business day, and provided that such drafts and certificates
strictly conform to the requirements of this Letter of Credit, we
will initiate a wire transfer of the amount so drawn to your
account indicated below at or prior to 3:30 P.M. (New York City
time) on the same business day;
(B) if such drafts and certificates are presented as
aforesaid after 1:30 P.M. but at or prior to 4:00 P.M. (New York
City time) on a business day, and provided that such drafts and
certificates strictly conform to the requirements of this Letter
of Credit, we will initiate a wire transfer of the amount so
drawn to your account indicated below at or prior to 10:00 A.M.
on the business day next succeeding the business day on which
such drafts and certificates were presented (notwithstanding that
such day of presentation may have been the Credit Termination
Date); and
(C) if such drafts and certificates are presented as
aforesaid after 4:00 P.M. (New York City time) on a business day,
and provided that such drafts and certificates strictly conform
to the requirements of this Letter of Credit, we will initiate a
wire transfer of the amount so drawn to your account indicated
below at or prior to 1:00 P.M. (New York City time) on the
business day next succeeding the business day on which such
drafts and certificates were presented (notwithstanding that such
day of presentation may have been the Credit Termination Date);
and
(ii) All Other Drawings: In the case of any other drafts and
certificates:
(A) if such drafts and certificates are presented as
aforesaid at or prior to 4:00 P.M. (New York City time) on a
business day, and provided that such drafts strictly conform to
the requirements of this Letter of Credit, we will initiate a
wire transfer of the amount so drawn to your account indicated
below at or prior to 10:00 A.M. (New York City time) on the
business day next succeeding the business day on which such
drafts and certificates were presented (notwithstanding that such
day of presentation may have been the Credit Termination Date);
and
(B) if such drafts and certificates are presented as
aforesaid after 4:00 P.M. (New York City time) on a business day,
and provided that such drafts and certificates strictly conform
to the requirements of this Letter of Credit, we will initiate a
wire transfer of the amount so drawn to your account indicated
below at or prior to 1:00 P.M. (New York City time) on the
business day next succeeding the business day on which such
drafts and certificates were presented (notwithstanding that such
day of presentation may have been the Credit Termination Date).
Wire transfers of funds paid in respect of any drawing hereunder shall be
made to you at Shawmut Bank Connecticut, National Association, Hartford,
Connecticut, ABA# 011900445, Account No. 0067548290 Corporate Trust Admin.
Wire Account, Attention: K. Larimore, Reference: CDA/CL&P Series 1993A, or
to such other account as you may from time to time specify to us in
writing. All payments made by us under this Letter of Credit will be made
with our own funds and not with any funds of the Account Party or the
Issuer.
(4) Reductions. The Interest Component shall be reduced immediately
following our honoring any draft drawn hereunder to pay unpaid interest on
Eligible Bonds or to pay that portion of the purchase price or redemption
price corresponding to unpaid interest on Eligible Bonds, in each case by
an amount equal to the amount of such draft (any such drawing being an
"Interest Drawing"). The Principal Component shall be reduced immediately
following our honoring any draft drawn hereunder: (i) pursuant to Section
5.8(B) of the Indenture to pay that portion of purchase price corresponding
to principal of Eligible Bonds that are (A) subject to mandatory tender for
purchase pursuant to Section 2.3(G)(1)(c) or 2.3(G)(2)(d)(ii) of the
Indenture or (B) tendered for purchase by the holders thereof pursuant to
2.3(G)(2)(c) of the Indenture, (ii) pursuant to Section 5.8(C) of the
Indenture to pay that portion of purchase price corresponding to principal
of Eligible Bonds that are the subject of a failed conversion pursuant to
Section 2.3(G)(1)(b) or 2.3(G)(2)(b) of the Indenture, as appropriate (any
such drawing in respect of the circumstances referred to in the foregoing
clause (i) or this clause (ii) being a "(Tender Drawing)", (iii) pursuant
to Section 5.8(A) of the Indenture to pay the principal of Eligible Bonds
or that portion of the redemption price of Eligible Bonds corresponding to
principal, whether at stated maturity, upon acceleration or upon
redemption, or (iv) pursuant to Section 5.8(B) of the Indenture to pay that
portion of the purchase price corresponding to principal of Eligible Bonds
that are subject to mandatory tender for purchase pursuant to Section
2.3(G)(2)(d)(i) of the Indenture (any such drawing in respect of the
circumstances referred to in the foregoing clause (iii) or in this clause
(iv) being a "Redemption/Mandatory Purchase Drawing"), in each such case by
an amount equal to the amount of such draft. The Premium Component shall
be reduced immediately following our honoring any draft drawn hereunder to
pay premium on Eligible Bonds in connection with a Redemption/Mandatory
Purchase Drawing, by an amount equal to the amount of such draft.
Additionally, upon receipt of a Notice of Reduction in the form
of Exhibit 4 to this Letter of Credit purportedly executed by you, we will
reduce the Principal Component, Interest Component and Premium Component to
the amounts therein stated.
(5) Reinstatement. The Interest Component and the Principal
Component shall, from time to time, be reinstated by us in accordance with,
and only to the extent provided in, the following subparagraphs (i) and
(ii). In no event shall reductions in the Premium Component be reinstated.
(i) Interest Component. Reductions in the Interest Component
resulting from Interest Drawings shall be reinstated as follows:
(A) Immediately following each drawing hereunder to pay
unpaid interest on Eligible Bonds in the Flexible Mode or to pay
that portion of purchase price, but not redemption price,
corresponding to unpaid interest on Eligible Bonds in the
Flexible Mode, the amount so drawn shall be automatically
reinstated to the Interest Component unless, not later than the
business day preceding such drawing you shall have received
written notice from us that we will not reinstate the Interest
Component in the amount of such drawing. On the fifth day
following each drawing hereunder to pay accrued and unpaid
interest on Eligible Bonds that are not in the Flexible Mode, or
to pay that portion of purchase price, but not redemption price,
corresponding to accrued and unpaid interest on Eligible Bonds
that are not in the Flexible Mode, the amount so drawn shall be
automatically reinstated to the Interest Component, unless you
shall have theretofore received written notice from us that we
will not reinstate the Interest Component in the amount of such
drawing. Any notice of non-reinstatement delivered pursuant to
this subparagraph (i)(A) shall be in writing and shall be
delivered to you by hand delivery or facsimile transmission.
(B) If, subsequent to any such delivery of a notice of non-
reinstatement as aforesaid, we shall deliver to you, by hand
delivery or facsimile transmission, a Notice of Reinstatement in
the form of Exhibit 5 hereto, then, upon such delivery to you,
the Interest Component shall be immediately reinstated to the
extent specified in such Notice of Reinstatement.
(C) In no event shall the Interest Component be reinstated
to an amount in excess of 45 days' interest on Eligible Bonds,
computed at the rate of 12% per annum on the basis of a year of
365 or 366 days (as applicable) for the actual days elapsed, or
such lesser rate of interest as shall equal the Maximum Interest
Rate (as defined in the Indenture) in effect under the Indenture
with respect to such Eligible Bonds.
(ii) Principal Component. Reductions in the Principal Component
resulting from Redemption/Mandatory Purchase Drawings shall in no
event be reinstated. Reductions in the Principal Component resulting
from Tender Drawings shall be reinstated as follows:
(A) Immediately upon receipt by us of proceeds from the
remarketing of Pledged Bonds (as defined in the Indenture), or of
written notice from you that you have received such proceeds (or
a window receipt guaranteeing same day payment in immediately
available funds of such proceeds as contemplated by Section
9.19(A) of the Indenture), the Principal Component shall be
reinstated automatically by the amount of such proceeds.
(B) Immediately upon your receipt from us, by hand delivery
or facsimile transmission, of a Notice of Reinstatement in the
form of Exhibit 5 hereto, the Principal Component shall be
immediately reinstated to the extent specified in such Notice of
Reinstatement.
(C) In no event shall the Principal Component be reinstated
to an amount in excess of the aggregate principal amount of
Eligible Bonds then outstanding under the Indenture.
Any Notice of Reinstatement delivered to you in the form set forth in
Exhibit 5 hereto, whether delivered pursuant to subparagraph (i) or
subparagraph (ii), above, may be combined, in a single such Notice, with
any other Notice of Reinstatement delivered pursuant to the other such
subparagraph.
(6) Notices. Communications (other than drawings) with respect to
this Letter of Credit shall be in writing and shall be addressed to us at
31 West 52nd Street, New York, New York 10019, Attention: E. Scott Medla
(telephone: (212) 474-8025, telecopy: (212) 474-8256) with a copy to: Peter
Sonza (telephone: (212) 474-8112, telecopy: (212) 474-7048) (or at such
other office as we may designate by written notice to you), specifically
referring to the number of this Letter of Credit.
(7) Transfer. This Letter of Credit is transferable in its entirety
(but not in part) to any transferee who has succeeded you as Paying Agent
under the Indenture and may be successively so transferred. Transfer of
the available balance under this Letter of Credit to such transferee shall
be effected by the presentation to us of this Letter of Credit accompanied
by a certificate substantially in form set forth in Exhibit 6.
(8) Governing Law, Etc. Except as otherwise provided herein, this
Letter of Credit shall be governed by and construed in accordance with the
Uniform Customs and Practices for Documentary Credits (1983 Revision)
Publication No. 400 of the International Chamber of Commerce ("UCP") and,
to the extent not inconsistent with the UCP, the laws of the State of New
York, including the Uniform Commercial Code as in effect in the State of
New York. This Letter of Credit sets forth in full our undertaking, and,
except as expressly set forth herein, such undertaking shall not in any way
be modified, amended, amplified or limited by reference to any document,
instrument or agreement referred to herein (including, without limitation,
the Bonds, the Indenture and the Reimbursement Agreement), except only the
certificates and the drafts referred to herein; and any such reference
shall not be deemed to incorporate herein by reference any document,
instrument or agreement except for such certificates and such drafts.
Whenever and wherever the terms of this Letter of Credit shall refer to the
purpose of a draft hereunder, or the provisions of any agreement or
document pursuant to which such draft may be presented hereunder, such
purpose or provisions shall be conclusively determined by reference to the
certificate accompanying such draft; in furtherance of this sentence,
whether any drawing is in respect of payment of regularly scheduled
interest on the Bonds or of principal of or interest on the Bonds upon
scheduled or accelerated maturity or is a Tender Drawing or a
Redemption/Mandatory Purchase Drawing shall be conclusively determined by
reference to the certificate accompanying such drawing.
Very truly yours,
DEUTSCHE BANK AG, NEW YORK BRANCH
By _______________________________
Title:
By _______________________________
Title:
EXHIBIT 1
TO THE LETTER OF CREDIT
CERTIFICATE FOR TENDER DRAWING
The undersigned, a duly authorized officer of
__________________________, (the "Paying Agent"), hereby certifies as
follows to DEUTSCHE BANK AG, NEW YORK BRANCH (the "Bank"), with reference
to Irrevocable Letter of Credit No. 83952561 (the "Letter of Credit")
issued by the Bank in favor of the Paying Agent. Terms defined in the
Letter of Credit and used but not defined herein shall have the meanings
given them in the Letter of Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for the
holders of the Bonds.
(2) The Paying Agent is making a Tender Drawing under the Letter of
Credit in the amount of $________ pursuant to Section 5.8 of the Indenture
to pay that portion of the purchase price corresponding to principal of
Eligible Bonds that are
[subject to mandatory tender for purchase pursuant to Section
[2.3(G)(1)(c)] [2.3(G)(2)(d)(ii)] of the Indenture.]
[tendered for purchase by the holders thereof pursuant to Section
2.3(G)(2)(c) of the Indenture.]
[the subject of a failed conversion pursuant to Section
2.3(G)(1)(b) or 2.3(G)(2)(b) of the Indenture.]
(3) The amount of purchase price corresponding to principal of
Eligible Bonds and with respect to the payment of which the Paying Agent,
pursuant to the foregoing Sections of the Indenture, is drawing under the
Letter of Credit, is as follows, and the amount of the draft accompanying
this Certificate does not exceed such amount:
Principal: $_______________________________
(4) The amount of the draft accompanying this Certificate being drawn
in respect of purchase price corresponding to principal of Eligible Bonds,
as indicated in paragraph (3), above, does not exceed the Principal
Component of the Letter of Credit. The amount of the draft accompanying
this Certificate in respect of purchase price corresponding to principal of
such Bonds has been computed in accordance with the terms and conditions of
such Eligible Bonds and the Indenture.
(5) No proceeds of this drawing will be applied to the payment of
purchase price of any Bonds that are not Eligible Bonds, including any
Pledged Bonds (as defined in the Indenture), any Borrower Bonds (as defined
in the Indenture) and any Bonds in the Fixed Rate Mode (as defined in the
Indenture).
[(6) The Eligible Bonds in respect of which this drawing is being made
are Eligible Bonds in the Flexible Mode, and payment of this drawing shall
be made in accordance with Paragraph 3(i) of the Letter of Credit.]
[(6) The Eligible Bonds in respect of which this drawing is being made
are not Eligible Bonds in the Flexible Mode, and payment of this drawing
shall be made in accordance with Paragraph 3(ii) of the Letter of Credit].
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this
Certificate as of the ____ day of _____________, 19__.
[NAME OF PAYING AGENT],
as Paying Agent
By _______________________________
Title:
EXHIBIT 2
TO THE LETTER OF CREDIT
CERTIFICATE FOR REDEMPTION/
MANDATORY PURCHASE DRAWING
The undersigned, a duly authorized officer of ________, (the "Paying
Agent"), hereby certifies as follows to DEUTSCHE BANK AG, NEW YORK BRANCH
(the "Bank"), with reference to Irrevocable Letter of Credit No. 83952561
(the "Letter of Credit") issued by the Bank in favor of the Paying Agent.
Terms defined in the Letter of Credit and used but not defined herein shall
have the meanings given them in the Letter of Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for the
holders of the Bonds.
(2) The Paying Agent is making a Redemption/Mandatory Purchase
Drawing under the Letter of Credit in the amount of $______________
[pursuant to Section 5.8(A) and Section 8.5 of the Indenture to
pay the principal of Eligible Bonds due pursuant to the Indenture
upon maturity or as a result of acceleration of such Eligible
Bonds in accordance with the Indenture and the terms of such
Eligible Bonds.]
[pursuant to Section 5.8(A) of the Indenture to pay that portion
of the redemption price corresponding to principal of [and
premium on] Eligible Bonds due pursuant to the Indenture upon
redemption of such Eligible Bonds in accordance with the
Indenture and the terms of such Eligible Bonds.]
[pursuant to Section 5.8(B) of the Indenture to pay that portion
of the purchase price of Eligible Bonds corresponding to
principal that are subject to mandatory tender for purchase
pursuant to Section 2.3(G)(2)(d)(i) of the Indenture.]
(3) The amount of [principal of] [redemption price corresponding to
principal of] [and premium on] [purchase price corresponding to principal
of] Eligible Bonds which is due and payable and with respect to the payment
of which the Paying Agent, pursuant to the foregoing Section[s] of the
Indenture, is to draw under the Letter of Credit is as follows, and the
amount of the draft accompanying this Certificate does not exceed such
amount:
Principal: $ _____________
[Premium: $ _____________
(4) The amount of the draft accompanying this Certificate being drawn
in respect of payment of [principal] [redemption price corresponding to
principal] [purchase price corresponding to principal] of Eligible Bonds,
as indicated in paragraph (3), above, does not exceed the Principal
Component of the Letter of Credit. [The amount of the draft accompanying
this Certificate being drawn in respect of that portion of the redemption
price of Eligible Bonds corresponding to premium, as indicated in paragraph
(3), above, does not exceed the Premium Component of the Letter of Credit.]
The amount of the draft accompanying this Certificate in respect of payment
of [principal] [redemption price corresponding to principal] [and premium]
[purchase price corresponding to principal] of such Eligible Bonds has been
computed in accordance with the terms and conditions of such Eligible Bonds
and the Indenture.
(5) No proceeds of this drawing will be applied to the payment of
principal, redemption price (including premium, if any) or purchase price
of any Bonds that are not Eligible Bonds, including any Pledged Bonds (as
defined in the Indenture), any Borrower Bonds (as defined in the
Indenture), and any Bonds in the Fixed Rate Mode (as defined in the
Indenture).
(6) Payment of this drawing shall be made in accordance with
Paragraph 3(ii) of the Letter of Credit.
[(7) The draft accompanying this Certificate is the final draft to be
drawn under the Letter of Credit, and, upon the honoring of such draft, the
Letter of Credit will expire in accordance with its terms.]
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this
Certificate as of the __________ day of __________________, 19__.
[NAME OF PAYING AGENT], as Paying Agent
By ___________________________
Title:
EXHIBIT 3
TO THE LETTER OF CREDIT
CERTIFICATE FOR INTEREST DRAWING
The undersigned, a duly authorized officer of ______, (the "Paying
Agent"), hereby certifies as follows to DEUTSCHE BANK AG, NEW YORK BRANCH
(the "Bank"), with reference to Irrevocable Letter of Credit No. 83952561
(the "Letter of Credit") issued by the Bank in favor of the Paying Agent.
Terms defined in the Letter of Credit and used but not defined herein shall
have the meanings given them in the Letter of Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for the
holders of the Bonds.
(2) The Paying Agent is making a drawing under the Letter of Credit
in the amount of $______ with respect to [the payment of interest] [the
payment of the portion of redemption price corresponding to interest] [the
payment of the portion of purchase price corresponding to interest] on
Eligible Bonds in accordance with the Indenture.
(3) The amount of [interest] [redemption price corresponding to
interest] [purchase price corresponding to interest] on Eligible Bonds that
is due and owing is as follows, and the amount of the draft accompanying
this Certificate does not exceed such amount:
Interest: ______________________
(4) The amount of the draft accompanying this Certificate being drawn
in respect of payment of [interest] [redemption price corresponding to
interest] [purchase price corresponding to interest] on Eligible Bonds, as
indicated in paragraph (3), above, does not exceed the Interest Component
of the Letter of Credit. The amount of the draft accompanying this
Certificate in respect of payment of [interest] [redemption price
corresponding to interest] [purchase price corresponding to interest] on
Eligible Bonds has been computed in accordance with the terms and
conditions of such Eligible Bonds and the Indenture.
(5) Payment of this drawing shall be made in accordance with
Paragraph 3(ii) of the Letter of Credit.
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this
Certificate as of the _____ day of ___________, 19__.
[NAME OF PAYING AGENT],
as Paying Agent
By ___________________________
Title:
EXHIBIT 4
TO THE LETTER OF CREDIT
NOTICE OF REDUCTION
The undersigned, a duly authorized officer of _____________________,
(the "Paying Agent"), hereby certifies as follows to DEUTSCHE BANK AG, NEW
YORK BRANCH (the "Bank"), with reference to Irrevocable Letter of Credit
No. 83952561 (the "Letter of Credit") issued by the Bank in favor of the
Paying Agent. Terms defined in the Letter of Credit and used but not
defined herein shall have the meanings given them in the Letter of Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for
the holders of the Bonds.
(2) As of the date hereof, the aggregate principal amount of
Eligible Bonds (including for this purpose all Pledged Bonds and all
Borrower Bonds) outstanding is
Principal: $___________________________
(3) You are hereby directed to reduce the [Principal] [Premium]
[and] [Interest] Components of the Letter of Credit as follows:
[The Principal Component of the Letter of Credit is reduced
to $____________.]
[The Premium Component of the Letter of Credit is reduced to
$_____________.]
[The Interest Component of the Letter of Credit is reduced
to $_____________.]
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this
Certificate as of the ____ day of __________, 19__.
[NAME OF PAYING AGENT],
as Paying Agent
By __________________________
Title:
EXHIBIT 5
TO THE LETTER OF CREDIT
NOTICE OF REINSTATEMENT
The undersigned, a duly authorized officer of DEUTSCHE BANK AG, NEW YORK
BRANCH (the "Bank"), hereby gives the following notice to
_________________, as paying agent (the "Paying Agent"), with reference to
Irrevocable Letter of Credit No. 83952561 (the "Letter of Credit") issued
by the Bank in favor of the Paying Agent. Terms defined in the Letter of
Credit and used but not defined herein have the meanings given them in the
Letter of Credit.
The Bank hereby notifies you that:
[1.] [Pursuant to Paragraph 5(i)(B) of the Letter of Credit and Section
2.04(b)(ii) of the Reimbursement Agreement, the Interest Component has
been reinstated by $________________.]
[2.] [Pursuant to Paragraph 5(ii)(B) of the Letter of Credit and Section
2.04(c) of the Reimbursement Agreement, the Principal Component has
been reinstated by $_________________.]
IN WITNESS WHEREOF, the Bank has executed and delivered this Notice of
Reinstatement as of the ____ day of ______________, 19__.
DEUTSCHE BANK AG,
NEW YORK BRANCH
By ______________________
Title:
By ______________________
Title:
EXHIBIT 6
TO THE LETTER OF CREDIT
INSTRUCTIONS TO TRANSFER
_____________, 19__
Re: Irrevocable Letter of Credit No. 83952561
Gentlemen:
The undersigned, as Paying Agent under that certain Indenture of
Trust, dated as of September 1, 1993 (the "Indenture"), by and between the
Connecticut Development Authority (the "Issuer") and Shawmut Bank
Connecticut, National Association, as Trustee, is named as beneficiary in
the Letter of Credit referred to above (the "Letter of Credit"). The
Transferee named below has succeeded the undersigned as Paying Agent under
such Indenture.
_______________________________
(Name of Transferee)
_______________________________
(Address)
Therefore, for value received, the undersigned hereby irrevocably
instructs you to transfer to such Transferee all rights of the undersigned
to draw under the Letter of Credit.
Such Transferee shall hereafter have the sole rights as beneficiary
under the Letter of Credit; provided, however, that no rights shall be
deemed to have been transferred to such Transferee until such transfer
complies with the requirements of the Letter of Credit pertaining to
transfers.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Certificate as of the ____ day of ______________, 19__.
[NAME OF RETIRING PAYING AGENT],
as Paying Agent
By______________________
Title:
The undersigned, [Name of Transferee], hereby accepts the
foregoing transfer of rights under the Letter of Credit.
[Name of Transferee]
By ______________________
Title:
Address of Principal
Corporate Trust Office:
[insert address]
EXHIBIT 1.01B
Form of
PARTICIPATION ASSIGNMENT
Dated _________________, 19__
Reference is made to the Letter of Credit and Reimbursement Agreement,
dated as of September 1, 1993 (said Agreement, as it may hereafter be
amended or otherwise modified from time to time, being the "Agreement";
unless otherwise defined herein terms defined in the Agreement are used
herein with the same meaning), among The Connecticut Light and Power
Company (the "Account Party"), Deutsche Bank AG, New York Branch ("Deutsche
Bank"), as Issuing Bank, the Co-Agents and Participating Banks named
therein and from time to time parties thereto, and Deutsche Bank, as Agent.
Pursuant to the Agreement, ______________ (the "Assignor") has purchased a
participation from the Issuing Bank in and to the Letter of Credit and each
payment thereunder and demand loan made by the Issuing Bank and has
committed to make Advances to the Account Party.
The Assignor and ________________ (the "Assignee") agree as follows:
2. The Assignor hereby sells and assigns, without recourse, to the
Assignee, and the Assignee hereby purchases and assumes from the Assignor,
without recourse to the Assignor that portion set forth in Section 1(c) of
Schedule 1 hereto (the "Assigned Interest") of the Assignor's rights and
obligations under the Agreement and the Pledge Agreement, including,
without limitation, the participation purchased by the Assignor pursuant to
Section 3.07 of the Agreement in respect of unreimbursed amounts and demand
loans owing from time to time to the Issuing Bank, the Commitment of the
Assignor to make Advances and the Advances outstanding on the Effective
Date (as hereinafter defined). Such Assigned Interest represents the
percentage interest specified in Section 2(b) of Schedule 1 of all
outstanding rights and obligations of the Participating Banks under the
Agreement, and, after giving effect to such sale and assignment, the
Assignee's and Assignor's Participation Percentages will be as set forth in
Sections 2(b) and 2(c), respectively, of Schedule 1. The effective date of
this sale and assignment shall be the date specified in Section 3 of
Schedule 1 (the "Effective Date").
2. On the Effective Date, the Assignee will pay to the Assignor, in
same day funds, at such address and account as the Assignor shall advise
the Assignee, an amount equal to (1) the aggregate amount of unreimbursed
letter of credit payments, demand loans and Advances outstanding (as set
forth in Section 1 of Schedule 1) times (2) the Assigned Interest. From
and after the Effective Date, the Assignor agrees that the Assignee shall
be entitled to all rights, powers and privileges of the Assignor under the
Agreement and the Pledge Agreement to the extent of the Assigned Interest,
including without limitation (i) the right to receive all payments in
respect of the Assigned Interest for the period from and after the
Effective Date, whether on account of reimbursements, principal, interest,
fees, indemnities in respect of claims arising after the Effective Date,
increased costs, additional amounts or otherwise; (ii) the right to vote
and to instruct the Agent and the Issuing Bank under the Agreement based on
the Assigned Interest; (iii) the right to set-off and to appropriate and
apply deposits of the Account Party as set forth in the Agreement; and (iv)
the right to receive notices, requests, demands and other communications.
The Assignor agrees that it will promptly remit to the Assignee any amount
received by it in respect of the Assigned Interest (whether from the
Account Party, the Agent or otherwise) in the same funds in which such
amount is received by the Assignor.
3. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to
any statements, warranties or representations made in or in connection with
the Agreement or the Related Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the
Agreement, the Related Documents or any other instrument or document
furnished pursuant thereto; and (iii) makes no representation or warranty
and assumes no responsibility with respect to the financial condition of
the Account Party or the performance or observance by the Account Party of
any of its obligations under the Agreement, the Related Documents or any
other instrument or document furnished pursuant thereto.
4. The Assignee (i) confirms that it has received a copy of the
Agreement, together with copies of the financial statements referred to in
Section 6.01(f) thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter
into this Assignment; (ii) agrees that it will, independently and without
reliance upon the Agent, the Issuing Bank, the Assignor or any other
Participating Bank and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Agreement and the Related Documents;
(iii) appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers under the Agreement and the Pledge
Agreement as are delegated to the Agent by the terms thereof, together with
such powers as are reasonably incidental thereto; (iv) agrees that it will
perform in accordance with its terms all of the obligations which by the
terms of the Agreement are required to be performed by it as a
Participating Bank and (v) confirms that it has paid the processing fee
referred to in subsection 10.06(b) of the Agreement.
5. Following the execution of this Assignment, it will be delivered
to the Agent for acceptance and recording by the Agent. Upon such
acceptance and recording and receipt of the consent of the Issuing Bank
required pursuant to Section 10.06(b) of the Agreement (which shall be
evidenced by the Issuing Bank's execution of this Assignment on the
appropriate space on Schedule 1), as of the Effective Date, (i) the
Assignee shall be a party to the Agreement and, to the extent provided in
this Assignment, have the rights and obligations of a Participating Bank
thereunder and under the Pledge Agreement and (ii) the Assignor shall, to
the extent provided in this Assignment, relinquish its rights and be
released from its obligations under the Agreement and the Pledge Agreement.
6. Upon such acceptance, recording and consent, from and after the
Effective Date, the Agent shall make all payments under the Agreement in
respect of the interest assigned hereby (including, without limitation, all
payments of principal, interest and fees with respect thereto) to the
Assignee at its address set forth on Schedule 1 hereto. The Assignor and
Assignee shall make all appropriate adjustments in payments under the
Agreement for periods prior to the Effective Date directly between
themselves.
7. This Assignment shall be governed by, and construed in accordance
with, the laws of the State of New York.
8. This Assignment may be executed in counterparts by the parties
hereto, each of which counterpart when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the
same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment to
be executed by their respective officers thereunto duly authorized, as of
the date first above written, such execution being made on Schedule 1
hereto.
Schedule 1
to
Participation Assignment
Dated ____________, 19__
Section 1.
(a) Total Unreimbursed
Payments and demand loans $__________
(b) Total Advances: $__________
(c) Assigned Interest: __________%
Specify percentage to no more than 8 decimal points.
Section 2.
(a) Assignor's Participation
Percentage (immediately
prior to the effectiveness
of this Assignment) ___________%
(b) Assignee's Participation
Percentage2 (upon the
effectiveness of this
Assignment) ___________%
(c) Assignor's Participation
Percentage (upon
the effectiveness of
this Assignment)
The sum of the percentages set forth in Section 2(b) and (c) shall equal
the percentage set forth in Section 2(a). ___________%
Section 3.
Effective Date:__________, 19__
Such date shall be at least 5 Business Days after the execution of this
Assignment.
[NAME OF ASSIGNOR]
By______________________________
Title:
[NAME OF ASSIGNEE]
By______________________________
Title:
[Address]
Telecopier No._______________
Attention:___________________
Consented to this __ day
of ______________, ___
DEUTSCHE BANK AG, NEW YORK
BRANCH,
as Issuing Bank
By ______________________
Title:
By ______________________
Title:
Accepted this __ day
of _____________, ___
Not to be accepted without proof of Account Party's consent pursuant to
Section 10.06(b) of the Reimbursement Agreement.
DEUTSCHE BANK AG, NEW YORK
BRANCH,
as Agent
By ______________________
Title:
By ______________________
Title:
APPLICABLE LENDING OFFICES
The Assignee's Applicable Lending Offices are as follows:
Domestic Lending Office:
Eurodollar Lending Office:
EXHIBIT 1.01C
Form of
PLEDGE AGREEMENT
Dated as of September 1, 1993
THIS PLEDGE AGREEMENT ("this Agreement") is made by and between:
(i) THE CONNECTICUT LIGHT AND POWER COMPANY, a corporation duly
organized and validly existing under the laws of the State of
Connecticut (the "Account Party"); and
(ii) DEUTSCHE BANK AG, NEW YORK BRANCH, as issuer of the Letter of
Credit (the "Issuing Bank");
for the benefit of the Issuing Bank and
(iii) The Agent (as defined therein), the Co-Agents (as defined
therein) and the Participating Banks (as defined therein) from
time to time party to the Reimbursement Agreement hereinafter
referred to.
PRELIMINARY STATEMENT
The Connecticut Development Authority (the "Issuer") proposes to issue,
pursuant to an Indenture of Trust, dated as of September 1, 1993 (as
supplemented or amended from time to time with the written consent of the
Issuing Bank, the "Indenture"), made to Shawmut Bank Connecticut, National
Association, as trustee (such entity, or its successor as trustee, being the
"Trustee"), $245,500,000 aggregate principal amount of its Pollution Control
Revenue Refunding Bonds (The Connecticut Light and Power Company Project -
1993A Series) (the "Bonds"). Pursuant to the Indenture and the Loan
Agreement, dated as of September 1, 1993, between the Issuer and the Account
Party, the Account Party has requested the Issuing Bank to issue the letter
of credit referred to therein in favor of the Paying Agent described therein.
The Issuing Bank has agreed to issue such letter of credit subject to the
terms and conditions set forth in that certain Letter of Credit and
Reimbursement Agreement, of even date herewith, among the Account Party, the
Issuing Bank, the Agent and the Co-Agents and Participating Banks referred to
therein and relating to the Bonds (said Letter of Credit and Reimbursement
Agreement, as it may hereafter be amended, modified or supplemented from time
to time, being hereinafter referred to as the "Reimbursement Agreement").
It is a condition precedent to the obligation of the Issuing Bank to
issue such letter of credit and of the Participating Banks to make the
Advances described in the Reimbursement Agreement that the Account Party
shall have made the pledge described in this Agreement.
NOW THEREFORE, in consideration of the premises and to induce the
Issuing Bank to issue such letter of credit and to induce the Participating
Banks to make such Advances, the Account Party hereby agrees as follows
(capitalized terms used herein and not otherwise defined herein having the
meanings assigned them in the Reimbursement Agreement):
SECTION 1. Pledge. The Account Party hereby pledges to the
Issuing Bank for the benefit of the Agent and the Participating Banks, and
grants to the Issuing Bank for the benefit of the Agent and the Participating
Banks a security interest in, the following (the "Pledged Collateral"):
(i) the Pledged Bonds (as defined in the Indenture) and the
instruments, if any, evidencing the Pledged Bonds, and all interest,
cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any
or all of the Pledged Bonds; and
(ii) all proceeds (other than the proceeds of the initial sale upon
issuance of the Pledged Bonds) of any and all of the foregoing
collateral (including, without limitation, proceeds that constitute
property of the types described above).
SECTION 2. Security for Obligations. This Agreement secures the
payment of all obligations of the Account Party now or hereafter existing
under the Reimbursement Agreement, whether for reimbursement, principal,
interest, fees, expenses or otherwise, and all obligations of the Account
Party now or hereafter existing under this Agreement (all such obligations of
the Account Party being the "Obligations"). Without limiting the generality
of the foregoing, this Agreement secures the payment of all amounts which
constitute part of the Obligations and would be owed by the Account Party to
the Issuing Bank, the Agent or any Participating Bank under the Reimbursement
Agreement but for the fact that they are unenforceable or not allowable due
to the existence of a bankruptcy, reorganization or similar proceeding
involving the Account Party.
SECTION 3. Delivery of Pledged Collateral. (a) All certificates
or instruments representing or evidencing the Pledged Collateral shall be
delivered to the Paying Agent and held by the Paying Agent on behalf of the
Issuing Bank pursuant hereto and shall be in suitable form for transfer by
delivery, or shall be accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance satisfactory to the Issuing
Bank. For the better perfection of the Issuing Bank's, the Agent's and the
Participating Banks' rights in and to the Pledged Collateral, the Account
Party shall forthwith, upon the pledge of any Pledged Collateral hereunder,
cause such Pledged Collateral to be registered in the name of such nominee or
nominees of the Issuing Bank as the Issuing Bank shall direct.
(b) If, prior to the payment in full of the Obligations and the
termination of the Letter of Credit, the Account Party shall become entitled
to receive or shall receive any payment in respect of the Pledged Collateral,
the Account Party agrees to accept the same as the agent of the Issuing Bank,
the Agent and the Participating Banks, to hold the same in trust for the
Issuing Bank, the Agent and the Participating Banks and to deliver the same
to the Issuing Bank. All such sums so received by the Issuing Bank shall be
credited against the Obligations in such order as the Agent shall, in its
sole discretion, elect.
(c) Notwithstanding the foregoing subsection (a), if and for so
long as the Bonds are to be held in the Book-Entry Only System (as defined in
the Indenture), the Account Party's obligations under such subsection shall
be deemed satisfied if such Pledged Bonds are (i) registered in the name of
DTC (as defined in the Indenture) in accordance with the Book-Entry Only
System, (ii) credited on the books of DTC to the account of the Paying Agent
(or its nominee) and (iii) further credited on the books of the Paying Agent
(or such nominee) to the account of the Issuing Bank (or its nominee).
SECTION 4. Representations and Warranties. The Account Party
represents and warrants as follows:
(a) The pledge of the Pledged Collateral pursuant to this
Agreement creates, upon the Paying Agent's taking possession of the Pledged
Bonds pursuant to Section 3 hereof (whether by physical possession or by
means of registration to DTC and book-entry credit as described in subsection
(c) thereof), a valid and perfected first priority security interest in the
Pledged Collateral, securing the payment of the Obligations.
(b) No consent of any other person or entity and no authorization,
approval, or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required (i) for the pledge by
the Account Party of the Pledged Collateral pursuant to this Agreement or for
the execution, delivery or performance of this Agreement by the Account
Party, (ii) for the perfection or maintenance of the security interest
created hereby (including the first priority nature of such security
interest), other than any filings of Uniform Commercial Code financing
statements that may be required for such perfection with respect to any
"proceeds" of the Pledged Bonds, or (iii) for the exercise by the Issuing
Bank of the voting or other rights provided for in this Agreement or the
remedies in respect of the Pledged Collateral pursuant to this Agreement
(except as may be required in connection with any disposition of any portion
of the Pledged Collateral by laws affecting the offering and sale of
securities generally and except for such as have already been obtained and
are in full force and effect).
SECTION 5. Further Assurances. The Account Party agrees that at
any time and from time to time, at the expense of the Account Party, the
Account Party will promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary or desirable,
or that the Issuing Bank may reasonably request, in order to perfect and
protect any security interest granted or purported to be granted hereby or to
enable the Issuing Bank to exercise and enforce its rights and remedies
hereunder with respect to any Pledged Collateral.
SECTION 6. Release. In the event that any Pledged Bonds are
subsequently remarketed by the Remarketing Agent and the proceeds thereof,
when added to any amounts paid to the Issuing Bank and/or the Agent by the
Account Party, are sufficient to (a) reimburse the Issuing Bank and the
Participating Banks in full for the drawing under the Letter of Credit
pursuant to which such Pledged Bonds became Pledged Bonds, (b) repay or
prepay any demand loan or Advance made in respect thereof and (c) pay all
interest, fees and other amounts accrued in respect thereof pursuant to the
Reimbursement Agreement, the lien of this Agreement shall be released as to
such Pledged Bonds (but not as to any other Pledged Bonds).
SECTION 7. Transfers and Other Liens. The Account Party agrees
that it will not (i) sell, assign or otherwise dispose of, or grant any
option with respect to, any of the Pledged Collateral, or (ii) create or
permit to exist any lien, security interest, option or other charge or
encumbrance upon or with respect to any of the Pledged Collateral, except for
the security interest under this Agreement.
SECTION 8. Bank Appointed Attorney-in-Fact. The Account Party
hereby appoints the Issuing Bank the Account Party's attorney-in-fact, with
full authority in the place and stead of the Account Party and in the name of
the Account Party or otherwise, from time to time in the Issuing Bank's
discretion to take any action and to execute any instrument which the Issuing
Bank may deem necessary or advisable to accomplish the purposes of this
Agreement, including, without limitation, to receive, indorse and collect all
instruments made payable to the Account Party representing any interest
payment or other distribution in respect of the Pledged Collateral or any
part thereof and to give full discharge for the same.
SECTION 9. Bank May Perform. If the Account Party fails to
perform any agreement contained herein, the Issuing Bank may itself perform,
or cause performance of, such agreement, and the expenses of the Issuing Bank
incurred in connection therewith shall be payable by the Account Party under
Section 10.04 of the Reimbursement Agreement.
SECTION 10. The Issuing Bank's Duties. The powers conferred on
the Issuing Bank hereunder are solely to protect its interest in the Pledged
Collateral and shall not impose any duty upon it to exercise any such powers.
Except for the safe custody of any Pledged Collateral in its actual
possession and the accounting for moneys actually received by it hereunder,
the Issuing Bank shall have no duty as to any Pledged Collateral, as to
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Pledged Collateral,
whether or not the Issuing Bank has or is deemed to have knowledge of such
matters, or as to the taking of any necessary steps to preserve rights
against any parties or any other rights pertaining to any Pledged Collateral.
The Issuing Bank shall be deemed to have exercised reasonable care in the
custody and preservation of any Pledged Collateral in its actual possession
if such Pledged Collateral is accorded treatment substantially equal to that
which the Issuing Bank accords its own property.
SECTION 11. Remedies upon Default. If any Event of Default shall
have occurred and be continuing:
(a) The Issuing Bank may exercise in respect of the Pledged
Collateral, in addition to other rights and remedies provided for herein
or otherwise available to it, all the rights and remedies of a secured
party on default under the Uniform Commercial Code in effect in the
State of New York at that time (the "Code") (whether or not the Code
applies to the affected Pledged Collateral), and may also, without
notice except as specified below, sell the Pledged Collateral or any
part thereof in one or more parcels at public or private sale, at any
exchange, broker's board or at any of the Issuing Bank's offices or
elsewhere, for cash, on credit or for future delivery, and upon such
other terms as the Issuing Bank may deem commercially reasonable. The
Account Party agrees that, to the extent notice of sale shall be
required by law, at least ten days' notice to the Account Party of the
time and place of any public sale or the time after which any private
sale is to be made shall constitute reasonable notification. The
Issuing Bank shall not be obligated to make any sale of Pledged
Collateral regardless of notice of sale having been given. The Issuing
Bank may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned.
(b) Any cash held by the Issuing Bank as Pledged Collateral and
all cash proceeds received by the Issuing Bank in respect of any sale
of, collection from, or other realization upon all or any part of the
Pledged Collateral may, in the discretion of the Issuing Bank, be held
by the Issuing Bank as collateral for, and/or then or at any time
thereafter be applied (after payment of any amounts payable to the
Issuing Bank pursuant to Section 9 hereof and/or Section 10.04 of the
Reimbursement Agreement) in whole or in part by the Issuing Bank
against, all or any part of the Obligations in such order as the Issuing
Bank shall elect. Any surplus of such cash or cash proceeds held by the
Issuing Bank and remaining after payment in full of all the Obligations
shall be paid over to the Account Party or to whomsoever may be lawfully
entitled to receive such surplus.
SECTION 12. Continuing Security Interest; Assignments. This
Agreement shall create a continuing security interest in the Pledged
Collateral and shall (i) remain in full force and effect until the later of
(x) the payment in full of the Obligations and all other amounts payable
under this Agreement and (y) the expiration or termination of the
Commitments, (ii) be binding upon the Account Party, its successors and
assigns, and (iii) inure to the benefit of, and be enforceable by, the
Issuing Bank, the Agent, the Participating Banks and their respective
successors, transferees and assigns. Without limiting the generality of the
foregoing clause (iii), any Participating Bank may, subject to Section 10.06
of the Reimbursement Agreement, assign or otherwise transfer all or any
portion of its rights and obligations under the Reimbursement Agreement
(including, without limitation, all or any portion of its Commitment and the
Advances owing to it) to any other person or entity, and such other person or
entity shall thereupon become vested with all the benefits in respect thereof
granted to such Participating Bank herein or otherwise. Upon the later of
the payment in full of the Obligations and all other amounts payable under
this Agreement and the expiration or termination of the Commitments, the
security interest granted hereby shall terminate and all rights to the
Pledged Collateral shall revert to the Account Party. Upon any such
termination, the Issuing Bank will, at the Account Party's expense, return to
the Account Party such of the Pledged Collateral as shall not have been sold
or otherwise applied pursuant to the terms hereof and execute and deliver to
the Account Party such documents as the Account Party shall reasonably
request to evidence such termination.
IN WITNESS WHEREOF, the Account Party has caused this Agreement to
be duly executed and delivered by its officer thereunto duly authorized as of
the date first above written.
THE CONNECTICUT LIGHT AND
POWER COMPANY, as Account Party and
pledgor
By ______________________
Title:
DEUTSCHE BANK AG,
NEW YORK BRANCH,
as Issuing Bank and pledgee
By ______________________
Title:
By ______________________
Title:
[Form of Opinion of King & Spalding - CDA/CL&P SERIES A]
EXHIBIT 5.01B
September 22, 1993
To Deutsche Bank AG, New York Branch,
as Agent and as Issuing Bank under
the Reimbursement Agreement referred
to below, and to each Co-Agent and
Participating Bank thereunder
Re: The Connecticut Light and Power Company
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 5.01(f)(ii) of the
Letter of Credit and Reimbursement Agreement, dated as of September 1, 1993
(the "Reimbursement Agreement"), among The Connecticut Light and Power
Company (the "Company"), Deutsche Bank AG, New York Branch, as the Agent (the
"Agent") and Issuing Bank (the "Issuing Bank") thereunder, and the Co-Agents
and Participating Banks referred to therein. Unless otherwise defined
herein, terms defined in the Reimbursement Agreement are used herein as
therein defined.
We have acted as special New York counsel to the Agent and the Issuing
Bank in connection with the preparation, execution and delivery of the
Reimbursement Agreement and the issuance by the Issuing Bank of the Letter of
Credit referred to therein.
In that connection, we have examined the following documents:
(a) The Reimbursement Agreement, executed by each of the parties
thereto; and
(b) The documents furnished to you today pursuant to Section 5.01
of the Reimbursement Agreement, including the opinion of counsel
delivered pursuant to Section 5.01(f)(i) of the Reimbursement Agreement
(the "Opinion").
In our examination of the documents referred to above, we have assumed
the authenticity of all such documents submitted to us as originals, the
genuineness of all signatures, the due authority of the parties executing
such documents and the conformity to the originals of all such documents
submitted to us as copies or telecopies. We have also assumed that the
Agent, the Issuing Bank and each Participating Bank have duly executed and
delivered, with all necessary power and authority (corporate and otherwise),
the Reimbursement Agreement.
To the extent that our opinions expressed below involve conclusions as
to matters governed by laws other than the laws of the State of New York, we
have relied upon the Opinion and have assumed without independent
investigation the correctness of the matters set forth therein, our opinions
expressed below being subject to the assumptions, qualifications and
limitations set forth in the Opinion. As to matters of fact, we have relied
solely upon the documents we have examined.
Based upon the foregoing, and subject to the qualifications set forth
below, we are of the opinion that:
4. The Reimbursement Agreement is in substantially acceptable
legal form.
5. The Opinion and the other documents referred to in item (b),
above, are substantially responsive to the requirements of the Sections
of the Reimbursement Agreement pursuant to which the same have been
delivered.
The foregoing opinions are solely for your benefit and may not be relied
upon by any other person, other than any person that may become a
Participating Bank under the Reimbursement Agreement after the date hereof.
Very truly yours,
Exhibit 4.2.24
LETTER OF CREDIT
AND REIMBURSEMENT AGREEMENT
Dated as of September 1, 1993
Among
THE CONNECTICUT LIGHT AND
POWER COMPANY
as Account Party
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH
as Issuing Bank and as Agent
and
THE PARTICIPATING BANKS
REFERRED TO HEREIN
Relating to
Connecticut Development Authority
$70,000,000 Pollution Control Revenue Refunding Bonds
(The Connecticut Light and Power Company Project - 1993B Series)
TABLE OF CONTENTS
Section Page
PRELIMINARY STATEMENT
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01 Certain Defined Terms . . . . . . . . . . 2
1.02 Computation of Time Periods . . . . . . . 13
1.03 Accounting Terms. . . . . . . . . . . . . 13
1.04 Computations of Outstandings. . . . . . . 14
ARTICLE II
THE LETTER OF CREDIT
2.01 The Letter of Credit. . . . . . . . . . . 14
2.02 Termination of the Commitments. . . . . . 14
2.03 Commissions and Fees . . . . . . . . . . 14
2.04 Reinstatement of the Letter of Credit . . 15
2.05 Extension of the Stated Termination Date. 16
ARTICLE III
REIMBURSEMENT AND ADVANCES
3.01 Reimbursement on Demand . . . . . . . . . 17
3.02 Advances . . . . . . . . . . . . . . . . 17
3.03 Interest on Advances. . . . . . . . . . . 18
3.04 Prepayment of Advances. . . . . . . . . . 18
3.05 Participation; Reimbursement of . . . . . 19
Issuing Bank
ARTICLE IV
PAYMENTS
4.01 Payments and Computations . . . . . . . . 22
4.02 Default Interest. . . . . . . . . . . . . 24
4.03 Yield Protection. . . . . . . . . . . . . 24
4.04 Sharing of Payments, Etc. . . . . . . . . 26
4.05 Taxes . . . . . . . . . . . . . . . . . . 26
4.06 Obligations Absolute. . . . . . . . . . . 29
4.07 Evidence of Indebtedness . . . . . . . . 30
ARTICLE V
CONDITIONS PRECEDENT
5.01 Conditions Precedent to the Issuance of
the Letter of Credit . . . . . . . . . . 30
5.02 Additional Conditions Precedent to the
Issuance of the Letter of Credi. . . . . 34
5.03 Conditions Precedent to Initial Advances. 34
5.04 Conditions Precedent to Term Advances . . 35
5.05 Reliance on Certificates. . . . . . . . . 35
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.01 Representations and Warranties of
the Account Party . . . . . . . . . . . . 36
ARTICLE VII
COVENANTS OF THE ACCOUNT PARTY
7.01 Affirmative Covenants . . . . . . . . . . 40
7.02 Negative Covenants. . . . . . . . . . . . 43
7.03 Reporting Obligations . . . . . . . . . . 48
ARTICLE VIII
DEFAULTS
8.01 Events of Default . . . . . . . . . . . . 51
8.02 Remedies Upon Events of Default . . . . . 54
ARTICLE IX
THE AGENT, THE PARTICIPATING BANKS
AND THE ISSUING BANK
9.01 Authorization of Agent; Actions of Agent
and Issuing Bank . . . . . . . . . . . . 55
9.02 Reliance, Etc.. . . . . . . . . . . . . . 55
9.03 The Agent, the Issuing Bank and Affiliates 56
9.04 Participating Bank Credit Decision. . . . 56
9.05 Indemnification . . . . . . . . . . . . . 57
9.06 Successor Agent . . . . . . . . . . . . . 57
9.07 Issuing Bank. . . . . . . . . . . . . . . 58
ARTICLE X
MISCELLANEOUS
10.01 Amendments, Etc.. . . . . . . . . . . . . 58
10.02 Notices, Etc. . . . . . . . . . . . . . . 59
10.03 No Waiver of Remedies . . . . . . . . . . 60
10.04 Costs, Expenses and Indemnification . . . 60
10.05 Right of Set-Off. . . . . . . . . . . . . 62
10.06 Binding Effect; Assignments and Participants 63
10.07 Relation of the Parties; No Beneficiary . 64
10.08 Issuing Bank Not Liable . . . . . . . . . 65
10.09 Confidentiality . . . . . . . . . . . . . 66
10.10 Waiver of Jury Trial. . . . . . . . . . . 66
10.11 Governing Law . . . . . . . . . . . . . . 67
10.12 Execution in Counterparts . . . . . . . . 67
SCHEDULES
Schedule I - Applicable Lending Offices
Schedule II - Pending Actions
EXHIBITS
Exhibit 1.01A - Form of Letter of Credit
Exhibit 1.01B - Form of Participation Assignment
Exhibit 1.01C - Form of Pledge Amendment
Exhibit 5.01A - Form of Opinion of Day, Berry & Howard,
counsel to the Account Party
Exhibit 5.01B - Form of Opinion of King & Spalding,
special New York counsel to the Agent and the
Issuing Bank
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
Dated as of September 1, 1993
THIS LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT (this Agreement ) is
made by and among:
(i) THE CONNECTICUT LIGHT AND POWER COMPANY, a corporation duly
organized and validly existing under the laws of the State of Connecticut
(the Account Party );
(ii) UNION BANK OF SWITZERLAND, NEW YORK BRANCH ( UBS ), as issuer of
the Letter of Credit (the Issuing Bank );
(iii) The Participating Banks (as hereinafter defined) from time to
time party hereto; and
(iv) UBS as agent (together with any successor agent hereunder, the
Agent) for such Participating Banks and the Issuing Bank.
PRELIMINARY STATEMENT
The Connecticut Development Authority (the Issuer ) proposes to
issue, pursuant to an Indenture of Trust, dated as of September 1, 1993 (as
supplemented or amended from time to time with the written consent of the
Issuing Bank, the Indenture ), made to Shawmut Bank Connecticut, National
Association, as trustee (such entity, or its successor as trustee, being
the Trustee ), $70,000,000 aggregate principal amount of its Pollution
Control Revenue Refunding Bonds (The Connecticut Light and Power Company
Project - 1993B Series) (the Bonds ). Pursuant to the Indenture and the
Loan Agreement, dated as of September 1, 1993, between the Issuer and the
Account Party (the Loan Agreement ), the Account Party has requested the
Issuing Bank to issue its irrevocable letter of credit in favor of the
Paying Agent (as defined below), in substantially the form of Exhibit 1.01A
hereto (such letter of credit, as it may from time to time be extended or
modified pursuant to the terms of this Agreement, being the Letter of
Credit ), in the amount of $71,036,000 (the Stated Amount ), of which (i)
$70,000,000 shall support the payment of principal of the Bonds (or the
portion of the purchase or redemption price of the Bonds corresponding to
principal), (ii) $1,036,000 shall support the payment of up to 45 days'
interest on the principal amount of the Bonds (or the portion of the
purchase or redemption price of the Bonds corresponding to interest),
computed at a maximum interest rate of 12% per annum on the basis of the
actual days elapsed and a year of 365 or 366 days (as applicable) and (iii)
$0.00 shall support the payment of premium on the Bonds. The Issuing Bank
has agreed to issue the Letter of Credit subject to the terms and
conditions set forth herein (including the terms and conditions relating to
the rights and obligations of the Participating Banks).
NOW, THEREFORE, in consideration of the premises and in order to induce
the Issuing Bank to issue the Letter of Credit and the Participating Banks
to participate in the Letter of Credit and make advances hereunder, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. In addition to the terms defined
in the Preliminary Statement hereto, as used in this Agreement, the
following terms shall have the following meanings (such meanings to be
applicable to the singular and plural forms of the terms defined):
Advances means Initial Advances and Term Advances, without
differentiation; individually, an Advance .
Affiliate means, with respect to any Person, any other Person
directly or indirectly controlling (including, but not limited to all
directors and officers of such Person), controlled by, or under direct or
indirect common control with such Person. A Person shall be deemed to
control another entity if such Person possesses, directly or indirectly,
the power to direct or cause the direction of the management and policies
of such entity, whether through the ownership of voting securities, by
contract or otherwise.
Alternate Base Rate means a fluctuating interest rate per annum
equal at all times to the highest from time to time of:
(a) the rate of interest announced publicly by UBS in New
York, New York, from time to time, as UBS's prime rate; and
(b) 1/2 of one percent per annum above the Federal Funds
Rate from time to time.
Each change in the Alternate Base Rate shall take effect
concurrently with any change in such prime rate or Federal Funds Rate, as
the case may be.
Applicable Commission means, for any period, the
percentage set forth below corresponding to the ratings then assigned by
Moody's and S&P to the Account Party's first mortgage bonds (or other
senior secured debt) not supported by letters of credit or other credit
enhancement facilities, the Applicable Commission to change as when such
ratings change; in the event of a split rating, the lower rating shall
govern:
Moody's S&P Applicable Commission
A3 or Higher A- or Higher 0.35%
Baa1 and Baa2 BBB+ and BBB 0.40%
Baa3 BBB- 0.55%
Ba1 or Below BB+ or Below 0.70%
Applicable Lending Office means, with respect to each
Participating Bank, such Participating Bank's Domestic Lending Office as
specified opposite such Participating Bank's name on Schedule I hereto (in
the case of a Participating Bank initially party to this Agreement) or in
the Participation Assignment pursuant to which such Participating Bank
became a Participating Bank (in the case of any other Participating Bank),
or such other office or affiliate of such Participating Bank as such
Participating Bank may from time to time specify to the Account Party and
the Agent.
Available Amount in effect at any time means the maximum
aggregate amount available to be drawn at such time under the Letter of
Credit, the determination of such maximum amount to assume compliance with
all conditions for drawing and no reduction for (i) any amount drawn by the
Paying Agent to make a regularly scheduled payment of interest on the Bonds
(unless such amount will not be reinstated under the Letter of Credit) or
(ii) any amount not available to be drawn because Bonds are held by or for
the account of the Account Party and/or in pledge for the benefit of the
Issuing Bank.
Bonds has the meaning assigned to that term in the Preliminary
Statement.
Business Day means a day of the year that is not a Saturday or
Sunday or a day on which banks are authorized to close in New York City
and, if the applicable Business Day relates to any action to be taken by,
or notice furnished to or by, or payment to be made to or by, the Trustee,
the Paying Agent or the Remarketing Agent, is a day on which (A) banks
located in Hartford, Connecticut and New York, New York are not required or
authorized to remain closed, (B) banking institutions in all of the cities
in which the principal offices of the Issuing Bank, the Trustee, the Paying
Agent and, if applicable, the Remarketing Agent are located are not
required or authorized to remain closed and (C) the New York Stock
Exchange, Inc. is not closed.
CL&P Indenture has the meaning assigned to that term in Section
7.02(a)(i)(A) hereof.
Closing Date means the Business Day upon which each of the
conditions precedent enumerated in Sections 5.01 and 5.02 hereof shall be
fulfilled to the satisfaction of the Agent, the Issuing Bank, the
Participating Banks and the Account Party. All transactions contemplated
to occur on the Closing Date shall occur contemporaneously on or prior to
November 15, 1993, at the offices of King & Spalding, 120 West 45th Street,
New York, New York 10036, at 10:00 A.M. (New York City time), or at such
other place and time as the parties hereto may mutually agree.
Collateral means all of the collateral in which liens,
mortgages or security interests are purported to be granted by any or all
of the Security Documents.
Commitment means, for each Participating Bank, such
Participating Bank's Participation Percentage of the Available Amount.
Commitments shall refer to the aggregate of the Commitments.
Confidential Information has the meaning assigned to that term
in Section 10.09 hereof.
Consolidated Capitalization means, for any period, the aggregate
of all amounts that would, in accordance with generally accepted accounting
principles and consistent with those applied in the preparation of the
Account Party's consolidated financial statements included in its Annual
Report on Form 10-K for the year ended December 31, 1992, appear on the
Account Party's consolidated balance sheet as the sum of (i) the total
principal amount of all long-term Debt of the Account Party and its
Subsidiaries (excluding, however, Debt not to exceed $400,000,000 existing
under any nuclear fuel financing so long as the proceeds of such Debt are
used solely to finance the purchase and carrying of nuclear fuel and so
long as the appropriate regulatory authorities have not taken any action
which would not allow the costs with respect to such financing to be
recovered through the rate making process), (ii) the aggregate of the par
value of, or stated capital represented by, the outstanding shares of all
classes of common and preferred shares of the Account Party and its
Subsidiaries, (iii) the consolidated surplus of the Account Party and its
Subsidiaries, paid-in, earned and other, if any, and (iv) the excess, if
any, of (A) the aggregate unpaid principal amount of all short-term Debt of
the Account Party and its Subsidiaries over (B) 10% of the sum of clauses
(i), (ii) and (iii) above.
Consolidated Common Equity means, for any period, an amount
equal to the sum of the aggregate of the par value of, or stated capital
represented by, the outstanding common shares of the Account Party and its
Subsidiaries and the surplus, paid-in, earned and other, if any, of the
Account Party and its Subsidiaries as determined on a consolidated basis in
accordance with generally accepted accounting principles.
Credit Termination Date means the date on which the Letter of
Credit shall terminate in accordance with its terms.
Debt means, for any Person, without duplication, (i)
indebtedness of such Person for borrowed money, including but not limited
to obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments, (ii) obligations of such Person to pay the
deferred purchase price of property or services (excluding any obligation
of such Person to the United States Department of Energy or its successor
with respect to disposition of spent nuclear fuel burned prior to April 3,
1983), (iii) obligations of such Person as lessee under leases which shall
have been or should be, in accordance with generally accepted accounting
principles, recorded as capital leases, (iv) obligations under direct or
indirect guaranties in respect of, and obligations (contingent or
otherwise) to purchase or otherwise acquire, or otherwise to assure a
creditor against loss in respect of, indebtedness or obligations of others
of the kinds referred to in clauses (i) through (iii), above, and (v)
liabilities in respect of unfunded vested benefits under ERISA Plans.
Default Rate means a fluctuating interest rate equal at all
times to two percent (2.00%) per annum above the Alternate Base Rate in
effect from time to time.
ERISA means the Employee Retirement Income Security Act of 1974,
as amended from time to time.
ERISA Affiliate means, with respect to any Person, any trade or
business (whether or not incorporated) which is a commonly controlled
entity of the Account Party within the meaning of the regulations under
Section 414 of the Internal Revenue Code of 1986, as amended from time to
time.
ERISA Multiemployer Plan means a multiemployer plan subject to
Title IV of ERISA.
ERISA Plan means an employee benefit plan (other than an ERISA
Multiemployer Plan) maintained for employees of the Account Party or any
ERISA Affiliate and covered by Title IV of ERISA.
ERISA Plan Termination Event means (i) a Reportable Event
described in Section 4043 of ERISA and the regulations issued thereunder
(other than a Reportable Event not subject to the provision for 30-day
notice to the PBGC under such regulations) with respect to an ERISA Plan or
an ERISA Multiemployer Plan, or (ii) the withdrawal of the Account Party or
any of its ERISA Affiliates from an ERISA Plan or an ERISA Multiemployer
Plan during a plan year in which it was a substantial employer as defined
in Section 4001(a)(2) of ERISA, or (iii) the filing of a notice of intent
to terminate an ERISA Plan or an ERISA Multiemployer Plan or the treatment
of an ERISA Plan or an ERISA Multiemployer Plan under Section 4041 of
ERISA, or (iv) the institution of proceedings to terminate an ERISA Plan or
an ERISA Multiemployer Plan by the PBGC, or (v) any other event or
condition which might constitute grounds under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer, any
ERISA Plan or ERISA Multiemployer Plan.
Event of Default has the meaning assigned to that term in
Section 8.01.
Federal Funds Rate means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank
of New York, or, if such rate is not so published on the next succeeding
Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
FERC means the Federal Energy Regulatory Commission.
Governmental Approval means any authorization, consent,
approval, license, permit, certificate, exemption of, or filing or
registration with, any governmental authority or other legal or regulatory
body (including, without limitation, the Securities and Exchange
Commission, the FERC, the Nuclear Regulatory Commission and the Connecticut
Department of Public Utility Control), required in connection with either
(i) the execution, delivery or performance of any Loan Document or Related
Document or the grant and perfection of any lien or security interest
contemplated by the Security Documents or (ii) the nature of the Account
Party's or any Principal Subsidiary's business as conducted or the nature
of the property owned or leased by it.
Hazardous Substance means any waste, substance or material
identified as hazardous, dangerous or toxic by any office, agency,
department, commission, board, bureau or instrumentality of the United
States of America or of the State or locality in which the same is located
having or exercising jurisdiction over such waste, substance or material.
Indemnified Person has the meaning assigned to that term in
Section 10.04(b) hereof.
Indenture has the meaning assigned to that term in the
Preliminary Statement.
Indenture Documents means, collectively, the Indenture and the
Loan Agreement, together with all amendments, modifications and supplements
thereto; individually, an Indenture Document .
Initial Advance has the meaning assigned to that term in Section
3.02(a) hereof.
Initial Repayment Date has the meaning assigned to that term in
Section 3.02(a) hereof.
Interest Component has the meaning assigned to that term in the
Letter of Credit.
Interest Drawing has the meaning assigned to that term in the
Letter of Credit.
Issuer has the meaning assigned to that term in the Preliminary
Statement.
Issuer Resolution means the resolution adopted by the Issuer
that authorized the issuance of the Bonds, approved the terms and
provisions of the Bonds, and approved those of the documents related to the
Bonds to which the Issuer is a party.
Letter of Credit has the meaning assigned to that term in the
Preliminary Statement.
Lien has the meaning assigned to that term in Section 7.02(a)
hereof.
Loan Agreement has the meaning assigned to that term in the
Preliminary Statement.
Loan Documents means this Agreement and the Security Documents.
Majority Lenders means on any date of determination, (i) the
Issuing Bank and (ii) Participating Banks who, collectively, on such date,
have Participation Percentages in the aggregate of at least 66-2/3%.
Determination of those Participating Banks satisfying the criteria
specified above for action by the Majority Lenders shall be made by the
Agent and shall be conclusive and binding on all parties absent manifest
error.
Moody's means Moody's Investors Service, Inc. or any successor
thereto.
NU means Northeast Utilities, an unincorporated voluntary
business association organized under the laws of the Commonwealth of
Massachusetts.
Participant shall have the meaning assigned to that term in
Section 10.06(b) hereof.
Participating Banks means the Persons listed on the signature
pages hereof following the heading Participating Banks and any other
Person who becomes a party hereto pursuant to Section 10.06 hereof.
Participation Assignment means a participation assignment
entered into pursuant to Section 10.06 hereof by any Participating Bank and
an assignee, in substantially the form of Exhibit 1.01B hereto.
Participation Percentage means, as of any date of determination
(i) with respect to a Participating Bank initially a party hereto, the
percentage set forth opposite such Participating Bank's name on the
signature pages hereof, except as provided in clause (iii), below, (ii)
with respect to a Participating Bank that became a party hereto by
operation of Section 10.06(a) hereof, the Participation Percentage stated
to be assumed by such assignee Participating Bank in the relevant
Participation Assignment, except as provided in clause (iii), below, and
(iii) with respect to any Participating Bank described in clauses (i) and
(ii), above, that assigns a percentage of its interests in accordance with
Section 10.06(a) hereof, its Participation Percentage as reduced by the
percentage so assigned.
Paying Agent means (i) Shawmut Bank Connecticut, National
Association, as the initial paying agent for the Bonds under the Indenture
Documents, and (ii) any successor paying agent for the Bonds under the
Indenture Documents.
PBGC means the Pension Benefit Guaranty Corporation (or any
successor entity) established under ERISA.
Person means an individual, partnership, corporation (including
a business trust), joint stock company, trust, estate, unincorporated
association, joint venture or other entity, or a government or any
political subdivision or agency thereof.
Pledge Agreement means the Pledge Agreement, dated as of
September 1, 1993, by the Account Party in favor of the Issuing Bank for
the benefit of the Agent and the Participating Banks, in substantially the
form of Exhibit 1.01C hereto, and as the same may from time to time be
amended, modified or supplemented.
Pledged Bonds shall have the meaning assigned to that term in
the Pledge Agreement.
Premium Component has the meaning assigned to that term in the
Letter of Credit.
Principal Component has the meaning assigned to that term in the
Letter of Credit.
Principal Subsidiary means a Subsidiary, whether owned directly
or indirectly by the Account Party, which, with respect to the Account
Party and its Subsidiaries taken as a whole, represents a material portion
of the Account Party's consolidated assets or consolidated net income (or
loss), (it being understood that, as of the date of this Agreement, the
Account Party has no Principal Subsidiaries).
Purchase Contract means the Bond Purchase Agreement, dated
September 21, 1993, among the Issuer, the Account Party and Goldman, Sachs
& Co., Individually and as Representative of Advest, Inc., Greenwich
Partners, Inc. and U.S. Securities, Inc.
Recipient has the meaning assigned to that term in Section
10.09 hereto.
Regulatory Transaction means any merger or consolidation of the
Account Party with or into, or any purchase or acquisition by the Account
Party of the assets of (and any related assumption by the Account Party of
the liabilities of) any utility company or utility- related company, if
such transaction is undertaken pursuant to an order or request of, or
otherwise in fulfillment of the stated goals of, a utility regulatory
agency having jurisdiction over NU or any of its Subsidiaries.
Regulatory Transaction Entity means any utility company or
utility-related company (other than the Account Party) that is the subject
of a Regulatory Transaction.
Related Documents means the Letter of Credit, the Bonds, the
Indenture Documents, any Remarketing Agreement and the Purchase Contract.
Remarketing Agent has the meaning assigned to that term in the
Indenture Documents.
Remarketing Agreement means (i) the Remarketing Agreement, dated
as of September 1, 1993, among the Issuer, the Account Party and Goldman,
Sachs & Co., as the same may be amended from time to time; and (ii) any
successor remarketing agreement between the Account Party and a successor
Remarketing Agent as shall be in effect from time to time in accordance
with the terms of the Indenture Documents.
S&P means Standard and Poor's Corporation or any successor
thereto.
Second Mortgage means the Open End Mortgage and Trust Agreement
made as of October 1, 1986, by and between the Account Party and Bank of
Boston Connecticut, as trustee, as amended through the date hereof to
secure the obligations of the Account Party hereunder and as the same may
be further amended, modified or supplemented from time to time.
Security Documents means the Pledge Agreement and the Indenture
Documents, but shall not include the Second Mortgage.
Stated Amount has the meaning assigned to that term in the
Preliminary Statement hereto.
Stated Termination Date means the expiration date specified in
clause (i) of the first paragraph of Paragraph (1) of the Letter of Credit,
as such date may be extended pursuant to Section 2.05 hereof.
Subsidiary shall mean, with respect to any Person (the Parent),
any corporation, association or other business entity of which securities
or other ownership interests representing 50% or more of the ordinary
voting power are, at the time as of which any determination is being made,
owned or controlled by the Parent or one or more Subsidiaries of the Parent
or by the Parent and one or more Subsidiaries of the Parent.
Tender Drawing has the meaning assigned to that term in the
Letter of Credit.
Term Advance has the meaning assigned to that term in Section
3.02(b) hereof.
Term Borrowing means a borrowing consisting of Term Advances made
on the same day by the Participating Banks, ratably in accordance with
their respective Participation Percentages.
Termination Date means the Credit Termination Date or the earlier
date of termination of the Commitments pursuant to Sections 2.02 or 8.02
hereunder.
Trustee has the meaning assigned to that term in the Preliminary
Statement hereto.
Unmatured Default means the occurrence and continuance of an
event which, with the giving of notice or lapse of time or both, would
constitute an Event of Default.
SECTION 1.02. Computation of Time Periods. In the computation of periods
of time under this Agreement any period of a specified number of days or
months shall be computed by including the first day or month occurring
during such period and excluding the last such day or month. In the case
of a period of time from a specified date to or until a later
specified date, the word from means from and including and the words
to and until each means to but excluding .
SECTION 1.03. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles applied on a basis consistent with the application
employed in the preparation of the Account Party's consolidated financial
statements included in its Annual Report on Form 10-K for the year ended
December 31, 1992.
SECTION 1.04. Computations of Outstandings. Whenever reference is made
in this Agreement to the principal amount outstanding on any date under
this Agreement, such reference shall refer to the sum of (i) the Available
Amount on such date, (ii) the aggregate principal amount of all Advances
outstanding on such date and (iii) the aggregate amount of all demand loans
under Section 3.01 hereunder on such date, in each case after giving effect
to all transactions to be made on such date and the application of the
proceeds thereof.
ARTICLE II
THE LETTER OF CREDIT
SECTION 2.01. The Letter of Credit. The Issuing Bank agrees, on the
terms and conditions hereinafter set forth (including, without limitation,
the applicable conditions precedent set forth in Article V hereof), to
issue the Letter of Credit to the Paying Agent, upon not less than three
Business Days prior notice from the Account Party, on the Closing Date.
SECTION 2.02. Termination of the Commitments. The obligation of the
Issuing Bank to issue the Letter of Credit shall automatically terminate if
not issued on or before 5:00 P.M. (New York City time) on November 15,
1993.
SECTION 2.03. Commissions and Fees. (a) The Account Party hereby
agrees to pay to the Agent, for the account of the Participating Banks
ratably in accordance with their respective Participation Percentages, a
letter of credit commission on the Available Amount in effect from time to
time from the date of issuance of the Letter of Credit until the
Termination Date (disregarding for such purpose any temporary diminution
thereof arising from drawings under the Letter of Credit to pay interest
(or purchase price corresponding to interest) on the Bonds, regardless of
whether the amount so drawn shall be thereafter reinstated), at a rate per
annum equal to the Applicable Commission, payable quarterly in arrears on
the first day of March, June, September and December in each year,
commencing on the first such date to occur following the date of issuance
of the Letter of Credit, and on the Credit Termination Date.
(b) The Account Party also agrees to pay to the Agent, for the
account of the Agent and the Issuing Bank, such other fees as may be agreed
upon from time to time by the Account Party and the Agent and the Issuing
Bank.
SECTION 2.04. Reinstatement of the Letter of Credit. (a) The Interest
Component and the Principal Component shall, from time to time, be
reinstated by the Issuing Bank in accordance with, and only to the extent
provided in, the Letter of Credit. In no event shall reductions in the
Premium Component be reinstated.
(b) Interest Component. With respect to reinstatement
of reductions in the Interest Component resulting from Interest Drawings:
(i) The Issuing Bank may only deliver to the Paying Agent any notice
of non-reinstatement pursuant to Paragraph 5(i)(A) of the Letter of Credit
if (A) the Issuing Bank and/or the Participating Banks have not been
reimbursed in full by the Account Party for one or more drawings, together
with interest, if any, owing thereon pursuant to this Agreement, or (B) an
Event of Default has occurred and is then continuing.
(ii) If, subsequent to any such delivery of a notice of
non-reinstatement, the circumstances giving rise to the delivery of such
notice of non-reinstatement shall have ceased to exist (whether as a result
of reimbursement of unreimbursed drawings, or waiver or cure of an Event of
Default, or otherwise), then, provided that no other Event of Default shall
have occurred and be continuing, the Issuing Bank shall deliver to the
Paying Agent, by hand delivery or facsimile transmission, a Notice of
Reinstatement in the form of Exhibit 5 to the Letter of Credit reinstating
that portion of the Interest Component in respect of which such notice of
non-reinstatement was given.
(c) Principal Component. With respect to reinstatement of a reduction
in the Principal Component resulting from any Tender Drawing, IF:
(i) such reduction has not been reinstated pursuant to
Paragraph 5(ii)(A) of the Letter of Credit;
(ii) the Issuing Bank and/or the Participating Banks shall
have been reimbursed by the Account Party for such Tender Drawing;
(iii) any demand loan(s) and Advance(s) made in respect of such
Tender Drawing shall have been repaid by the Account Party, together with
any interest thereon and any other amounts payable hereunder in connection
therewith; AND
(iv) no Event of Default shall have occurred and then be
continuing;
THEN, the Issuing Bank shall deliver to the Paying Agent, by hand delivery
or facsimile transmission, a Notice of Reinstatement in the form of Exhibit
5 to the Letter of Credit reinstating the Principal Component to the extent
of such Tender Drawing.
SECTION 2.05. Extension of the Stated Termination Date. Unless the
Letter of Credit shall have previously expired in accordance with its
terms, at least 60 days but not more than 90 days before each anniversary
date of this Agreement, the Account Party may, by notice to the Agent (any
such notice being irrevocable), request the Issuing Bank and the
Participating Banks to extend the Stated Termination Date of the Letter of
Credit for a period of one year. If the Account Party shall make such
request, the Agent shall promptly inform the Issuing Bank and the
Participating Banks and, no later than 15 days prior to such anniversary
date, the Agent shall notify the Account Party in writing (with a copy of
such notice to the Trustee and the Paying Agent) if the Issuing Bank and
all of the Participating Banks consent to such request and the conditions
of such consent (including conditions relating to legal documentation). If
such consent is granted, the Stated Termination Date as theretofore in
effect shall be extended for one year, such extension to take effect on
such anniversary date. The granting of any such consent shall be in the
sole and absolute discretion of the Issuing Bank and all of the
Participating Banks, and if the Agent shall not so notify the Account
Party, such lack of notification shall be deemed to be a determination not
to consent to such request.
ARTICLE III
REIMBURSEMENT AND ADVANCES
SECTION 3.01. Reimbursement on Demand. Subject to the
provisions of Section 3.02 hereof, the Account Party hereby agrees to pay
(whether with the proceeds of Initial Advances made pursuant to this
Agreement or otherwise) to the Issuing Bank on demand (a) on and after each
date on which the Issuing Bank shall pay any amount under the Letter of
Credit pursuant to any draft, but only after so paid by the Issuing Bank, a
sum equal to such amount so paid (which sum shall constitute a demand loan
from the Issuing Bank to the Account Party from the date of such payment by
the Issuing Bank until so paid by the Account Party), plus (b) interest on
any amount remaining unpaid by the Account Party to the Issuing Bank under
clause (a), above, from the date such amount becomes payable on demand
until payment in full, at the Default Rate in effect from time to time. No
reinstatement of the Interest Component or the Principal Component despite
the failure by the Account Party to reimburse the Issuing Bank for any
previous drawing to pay interest on the Bonds shall limit or impair the
Account Party's obligations under this Section 3.01.
SECTION 3.02. Advances. Each Participating Bank agrees to make
Initial Advances and Term Advances for the account of the Account Party
from time to time upon the terms and subject to the conditions set forth in
this Agreement.
(a) Initial Advances; Repayment of Initial Advances. If the Issuing
Bank shall honor any Tender Drawing and if the conditions precedent set
forth in Section 5.03 of this Agreement have been satisfied as of the date
of such honor, then, each Participating Bank's payment made to the Issuing
Bank pursuant to Section 3.05 hereof in respect of such Tender Drawing
shall be deemed to constitute an advance made for the account of the
Account Party by such Participating Bank (each such advance being an
Initial Advance made by such Participating Bank). Subject to Article VIII
of this Agreement, each Initial Advance and all interest thereon shall be
due and payable on the earlier to occur of (i) the date 30 days from the
date of such Initial Advance (such repayment date being the Initial
Repayment Date for such Initial Advance) and (ii) the Termination Date.
The Account Party may repay the principal amount of any Initial Advance
with (and to the extent of) the proceeds of a Term Advance made pursuant to
subsection (b), below, and may prepay Initial Advances in accordance with
Section 3.04 hereof.
(b) Term Advances; Repayment. Subject to the satisfaction
of the conditions precedent set forth in Section 5.04 hereof and the other
conditions of this subsection (b), each Participating Bank agrees to make
one or more advances for the account of the Account Party ( Term Advances )
on each Initial Repayment Date in an aggregate principal amount equal to
the amount of such Participating Bank's Initial Advances maturing on such
Initial Repayment Date. All Term Advances comprising a single Term
Borrowing shall be made upon written notice given by the Account Party to
the Agent not later than 11:00 A.M. (New York City time) on the Business
Day of such proposed Term Borrowing. The Agent shall notify each
Participating Bank of the contents of such notice promptly after receipt
thereof. Each such notice shall specify therein the date on which such
Term Borrowing is to be made and the principal amount of Term Advances
comprising such Term Borrowing. The proceeds of each Participating Bank's
Term Advances shall be applied solely to the repayment of the Initial
Advances made by such Participating Bank and shall in no event be made
available to the Account Party. The principal amount of each Term Advance,
together with all accrued and unpaid interest thereon, shall be due and
payable on the earlier to occur of (x) the same calendar date occurring 35
months following the date upon which such Term Advance is made (or, if such
month does not have a corresponding date, on the last day of such month)
and (y) the Termination Date.
SECTION 3.03. Interest on Advances. The Account Party shall pay
interest on the unpaid principal amount of each Advance from the date of
such Advance until such principal amount is paid in full at a fluctuating
interest rate per annum equal to the Alternate Base Rate in effect from
time to time. The Account Party shall pay interest on each Advance
quarterly in arrears on the first day of March, June, September and
December in each year and on the Termination Date or the earlier date for
repayment of such Advance (including the Initial Repayment Date therefor,
in the case of an Initial Advance).
SECTION 3.04. Prepayment of Advances. (a) The Account Party
shall have no right to prepay any principal amount of any Advances except
in accordance with subsections (b) and (c) below.
(b) The Account Party may, upon at least one Business Day's notice
to the Agent stating the proposed date and aggregate principal amount of
the prepayment and the specific Initial Advances or Term Borrowing(s) to be
prepaid, and if such notice is given, the Account Party shall, prepay, in
whole or ratably in part, together with accrued interest to the date of
such prepayment on the principal amount prepaid, the outstanding principal
amount of (i) all Initial Advances made on the same date or (ii) all Term
Advances comprising the same Term Borrowing, in each case as the Account
Party shall designate in such notice; provided, however, that each partial
prepayment shall be in an aggregate principal amount not less than
$10,000,000, or, if less, the aggregate principal amount of all Advances
then outstanding.
(c) Prior to or simultaneously with the resale of all of the Bonds
purchased with the proceeds of a Tender Drawing, the Account Party shall
prepay, or cause to be prepaid, in full, the then outstanding principal
amount of all Initial Advances and of all Term Advances comprising the same
Term Borrowing(s) arising pursuant to such Tender Drawing, together with
all interest thereon to the date of such prepayment. If less than all of
such Bonds are resold, then prior to or simultaneously with such resale the
Account Party shall prepay or cause to be prepaid that portion of such
Advances, together with all interest thereon to the date of such
prepayment, equal to the then outstanding principal amount thereof
multiplied by a fraction, the numerator of which shall be the principal
amount of the Bonds resold and the denominator of which shall be the
principal amount of all of the Bonds purchased with the proceeds of the
relevant Tender Drawing.
SECTION 3.05. Participation; Reimbursement of Issuing Bank. (a)
The Issuing Bank hereby sells and transfers to each Participating Bank, and
each Participating Bank hereby acquires from the Issuing Bank, an undivided
interest and participation to the extent of such Participating Bank's
Participation Percentage in and to (i) the Letter of Credit, including the
obligations of the Issuing Bank under and in respect thereof and the
Account Party's reimbursement and other obligations in respect thereof and
(ii) each demand loan or deemed demand loan made by the Issuing Bank,
whether now existing or hereafter arising.
(b) If the Issuing Bank (i) shall not have been reimbursed in
full for any payment made by the Issuing Bank under the Letter of Credit on
the date of such payment or (ii) shall make any demand loan to the Account
Party, the Issuing Bank shall promptly notify the Agent and the Agent shall
promptly notify each Participating Bank of such non-reimbursement or demand
loan and the amount thereof. Upon receipt of such notice from the Agent,
each Participating Bank shall pay to the Issuing Bank, directly, an amount
equal to such Participating Bank's ratable portion (according to such
Participating Bank's Participation Percentage) of such unreimbursed amount
or demand loan paid or made by the Issuing Bank, plus interest on such
amount at a rate per annum equal to the Federal Funds Rate from the date of
such payment by the Issuing Bank to the date of payment to the Issuing Bank
by such Participating Bank. All such payments by each Participating Bank
shall be made in United States dollars and in same day funds:
(x) not later than 2:45 P.M. (New York City time) on the
day such notice is received by such Participating Bank if such notice is
received at or prior to 12:30 P.M. (New York City time) on a Business Day;
or
(y) not later than 12:00 Noon (New York City time) on the
Business Day next succeeding the day such notice is received by such
Participating Bank, if such notice is received after 12:30 P.M. (New York
City time) on a Business Day.
If a Participating Bank shall have paid to the Issuing Bank its ratable
portion of any unreimbursed amount or demand loan paid or made by the
Issuing Bank, together with all interest thereon required by the second
sentence of this subsection (b), such Participating Bank shall be entitled
to receive its ratable share of all interest paid by the Account Party in
respect of such unreimbursed amount or demand loan from the date paid or
made by the Issuing Bank. If such Participating Bank shall have made such
payment to the Issuing Bank, but without all such interest thereon required
by the second sentence of this subsection (b), such Participating Bank
shall be entitled to receive its ratable share of the interest paid by the
Account Party in respect of such unreimbursed amount or demand loan only
from the date it shall have paid all interest required by the second
sentence of this subsection (b).
(c) Each Participating Bank's obligation to make each payment
to the Issuing Bank, and the Issuing Bank's right to receive the same,
shall be absolute and unconditional and shall not be affected by any
circumstance whatsoever, including, without limitation, the foregoing or
Section 4.06 hereof, or the occurrence or continuance of an Event of
Default, or the non-satisfaction of any condition precedent set forth in
Sections 5.03 or 5.04 hereof, or the failure of any other Participating
Bank to make any payment under this Section 3.05. Each Participating Bank
further agrees that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever.
(d) The failure of any Participating Bank to make any payment
to the Issuing Bank in accordance with subsection (b) above, shall not
relieve any other Participating Bank of its obligation to make payment, but
neither the Issuing Bank nor any Participating Bank shall be responsible
for the failure of any other Participating Bank to make such payment. If
any Participating Bank shall fail to make any payment to the Issuing Bank
in accordance with subsection (b) above, then such Participating Bank shall
pay to the Issuing Bank forthwith on demand such corresponding amount
together with interest thereon, for each day until the date such amount is
repaid to the Issuing Bank at the Federal Funds Rate. Nothing herein shall
in any way limit, waive or otherwise reduce any claims that any party
hereto may have against any non-performing Participating Bank.
(e) If any Participating Bank shall fail to make any payment to
the Issuing Bank in accordance with subsection (b) above, then, in addition
to other rights and remedies which the Issuing Bank may have, the Agent is
hereby authorized, at the request of the Issuing Bank, to withhold and to
apply to the payment of such amounts owing by such Participating Bank to
the Issuing Bank and any related interest, that portion of any payment
received by the Agent that would otherwise be payable to such Participating
Bank. In furtherance of the foregoing, if any Participating Bank shall
fail to make any payment to the Issuing Bank in accordance with subsection
(b), above, and such failure shall continue for five Business Days
following written notice of such failure from the Issuing Bank to such
Participating Bank, the Issuing Bank may acquire, or transfer to a third
party in exchange for the sum or sums due from such Participating Bank,
such Participating Bank's interest in the related unreimbursed amounts and
demand loans and all other rights of such Participating Bank hereunder in
respect thereof, without, however, relieving such Participating Bank from
any liability for damages, costs and expenses suffered by the Issuing Bank
as a result of such failure. The purchaser of any such interest shall be
deemed to have acquired an interest senior to the interest of such
Participating Bank and shall be entitled to receive all subsequent payments
which the Issuing Bank or the Agent would otherwise have made hereunder to
such Participating Bank in respect of such interest.
ARTICLE IV
PAYMENTS
SECTION 4.01. Payments and Computations. (a) The Account
Party shall make each payment hereunder (i) in the case of reimbursement
obligations pursuant to Section 3.01 hereof (excluding any portion thereof
in respect of which an Initial Advance is to be made), not later than 2:30
P.M. (New York City time) on the day the related drawing under the Letter
of Credit is paid by the Issuing Bank, and (ii) in all other cases, not
later than 12:30 P.M. (New York City time) on the day when due, in each
case in lawful money of the United States of America to the Agent at its
address referred to in Section 10.02 hereof in immediately available funds.
The Agent will promptly thereafter cause to be distributed like funds
relating to the payment of reimbursements, principal, interest, fees or
other amounts payable to the Issuing Bank and the Participating Banks to
whom the same are payable, ratably and without offset or counterclaim
except as provided in Section 3.05, at its address set forth in Section
10.02 hereof (in the case of the Issuing Bank) or for the account of their
respective Applicable Lending Offices (in the case of the Participating
Banks), in each case to be applied in accordance with the terms of this
Agreement.
(b) The Account Party hereby authorizes the Issuing Bank, and each
Participating Bank, if and to the extent payment owed to the Issuing Bank,
or such Participating Bank, as the case may be, is not made when due
hereunder, to charge from time to time against any or all of the Account
Party's accounts with the Issuing Bank or such Participating Bank, as the
case may be, any amount so due.
(c) All computations of interest based on the Alternate Base Rate
when based on UBS's prime rate referred to in the definition of Alternate
Base Rate shall be made by the Agent on the basis of a year of 365 or 366
days, as the case may be. All other computations of interest hereunder
(including computations of interest based on the Federal Funds Rate
(including the Alternate Base Rate if and so long as such Rate is based on
the Federal Funds Rate)), and of all fees, commissions, and other amounts
payable hereunder shall be made by the Agent or the party claiming such
other amounts, as the case may be, on the basis of a year of 360 days. In
each such case, such computation shall be made for the actual number of
days (including the first day, but excluding the last day) occurring in the
period for which such interest, fees, commissions or other amounts are
payable. Each such determination by the Agent or a Participating Bank, as
the case may be, shall be conclusive and binding for all purposes, absent
manifest error.
(d) Whenever any payment hereunder shall be stated to be due on a day
other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest, commissions and fees
hereunder.
(e) Unless the Agent shall have received notice from the Account
Party prior to the date on which any payment is due to the Issuing Bank or
the Participating Banks hereunder that the Account Party will not make such
payment in full, the Agent may assume that the Account Party has made such
payment in full to the Agent on such date and the Agent may, in reliance
upon such assumption, cause to be distributed to the Issuing Bank and/or
each Participating Bank on such due date an amount equal to the amount then
due the Issuing Bank and/or such Participating Bank. If and to the extent
the Account Party shall not have so made such payment in full to the Agent,
the Issuing Bank and/or each such Participating Bank shall repay to the
Agent forthwith on demand such amount distributed to the Issuing Bank
and/or such Participating Bank, together with interest thereon, for each
day from the date such amount is distributed to the Issuing Bank and/or
such Participating Bank until the date the Issuing Bank and/or such
Participating Bank repays such amount to the Agent, at the Federal Funds
Rate.
(f) If, after the Agent has paid to the Issuing Bank or any
Participating Bank any amount pursuant to subsection (a) above, such
payment is rescinded or must otherwise be returned or must be paid over by
the Agent or the Issuing Bank to any Person, whether pursuant to any
bankruptcy or insolvency law, Section 4.04 hereof or otherwise, such
Participating Bank shall, at the request of the Agent or the Issuing Bank,
promptly repay to the Agent or the Issuing Bank, as the case may be, an
amount equal to its ratable share of such payment, together with any
interest required to be paid by the Agent or the Issuing Bank with respect
to such payment.
SECTION 4.02. Default Interest. Any amounts payable by the
Account Party hereunder that are not paid when due shall (to the fullest
extent permitted by law) bear interest, from the date when due until paid
in full, at the Default Rate, payable on demand.
SECTION 4.03. Yield Protection. (a) Change in Circumstances.
Notwithstanding any other provision herein, if after the date hereof, the
adoption of or any change in applicable law or regulation or in the
interpretation or administration thereof by any governmental authority
charged with the interpretation or administration thereof (whether or not
having the force of law) (i) shall impose, modify or deem applicable any
reserve, special deposit or similar requirement against letters of credit
(or participatory interests therein) issued by, commitments or assets of,
deposits with or for the account of, or credit extended by, the Issuing
Bank or any Participating Bank, or (ii) shall impose on the Issuing Bank or
such Participating Bank any other condition affecting this Agreement, the
Letter of Credit or participatory interests therein, and the result of any
of the foregoing shall be (A) to increase the cost to the Issuing Bank or
such Participating Bank of issuing, maintaining or participating in this
Agreement or the Letter of Credit or of agreeing to make, making or
maintaining any Advance or (B) to reduce the amount of any sum received or
receivable by the Issuing Bank or such Participating Bank hereunder
(whether of principal, interest or otherwise), then the Account Party will
pay to the Issuing Bank or such Participating Bank, upon demand, such
additional amount or amounts as will compensate the Issuing Bank or such
Participating Bank for such additional costs incurred or reduction
suffered.
(b) Capital. If the Issuing Bank or any Participating Bank shall
have determined that the adoption after the date hereof of any law, rule,
regulation or guideline regarding capital adequacy, or any change therein
or in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by the Issuing Bank
or any Participating Bank (or any Applicable Lending Office of the Issuing
Bank or such Participating Bank), or any holding company of any such
entity, with any request or directive regarding capital adequacy not in
effect on the date hereof (whether or not having the force of law) of any
such authority, central bank or comparable agency, has or would have the
effect (i) of reducing the rate of return on such entity's capital or on
the capital of such entity's holding company, if any, as a consequence of
this Agreement, the Letter of Credit or such entity's participatory
interest therein, any Commitment hereunder or the portion of the Advances
made by such entity pursuant hereto to a level below that which such entity
or such entity's holding company could have achieved, but for such
applicability, adoption, change or compliance (taking into consideration
such entity's policies and the policies of such entity's holding company
with respect to capital adequacy), or (ii) of increasing or otherwise
determining the amount of capital required or expected to be maintained by
such entity or such entity's holding company based upon the existence of
this Agreement, the Letter of Credit or such entity's participatory
interest therein, any Commitment hereunder, the portion of the Advances
made by such entity pursuant hereto and other similar such credits,
participations, commitments, agreements or assets, then from time to time
the Account Party shall pay to the Issuing Bank or such Participating Bank,
upon demand, such additional amount or amounts as will compensate such
entity or such entity's holding company for any such reduction or allocable
capital cost suffered.
(c) Notices. A certificate of the Issuing Bank or any Participating Bank
setting forth such entity's claim for compensation hereunder and the amount
necessary to compensate such entity or its holding company pursuant to
subsection (a) or (b) of this Section 4.03 shall be submitted to the
Account Party and the Issuing Bank and shall be conclusive and binding for
all purposes, absent manifest error. The Account Party shall pay the
Issuing Bank or such Participating Bank directly the amount shown as due on
any such certificate within ten days after its receipt of the same. The
failure of any entity to provide such notice or to make demand for payment
under this Section 4.03 shall not constitute a waiver of such Participating
Bank's rights hereunder; provided, that such entity shall not be entitled
to demand payment pursuant to subsections (a) or (b) of this Section 4.03
in respect of any loss, cost, expense, reduction or reserve if such demand
is made more than one year following the later of such entity's incurrence
or sufferance thereof or such entity's actual knowledge of the event giving
rise to such entity's rights pursuant to such subsections. The protections
of this Section 4.03 shall be available to the Issuing Bank and each
Participating Bank regardless of any possible contention of the invalidity
or inapplicability of the law, rule, regulation, guideline or other change
or condition which shall have occurred or been imposed and shall survive
the Termination Date and the payment of all other amounts hereunder.
SECTION 4.04. Sharing of Payments, Etc. If any Participating Bank shall
obtain any payment (whether voluntary, involuntary, through the exercise of
any right of set-off, or otherwise, but excluding any proceeds received by
assignments or sales of participations in accordance with Section 10.06
hereof to a Person that is not an Affiliate of the Account Party) on
account of the Advances owing to it (other than pursuant to Section 4.03
hereof) in excess of its ratable share of payments on account of the
Advances obtained by all the Participating Banks, such Participating Bank
shall forthwith purchase from the other Participating Banks such
participation in the portions of the Advances owing to them as shall be
necessary to cause such purchasing Participating Bank to share the excess
payment ratably with each of them; provided, however, that if all or any
portion of such excess payment is thereafter recovered from such purchasing
Participating Bank, such purchase from each Participating Bank shall be
rescinded and such Participating Bank shall repay to the purchasing
Participating Bank the purchase price to the extent of such recovery
together with an amount equal to such Participating Bank's ratable share
(according to the proportion of (i) the amount of such Participating Bank's
required repayment to (ii) the total amount so recovered from the
purchasing Participating Bank) of any interest or other amount paid or
payable by the purchasing Participating Bank in respect of the total amount
so recovered. The Account Party agrees that any Participating Bank so
purchasing a participation from another Participating Bank pursuant to this
Section 4.04 may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of set-off) with respect to such
participation as fully as if such Participating Bank were the direct
creditor of the Account Party in the amount of such participation.
Notwithstanding the foregoing, if any Participating Bank shall obtain any
such excess payment involuntarily, such Participating Bank may, in lieu of
purchasing participations from the other Participating Banks in accordance
with this Section 4.04, on the date of receipt of such excess payment,
return such excess payment to the Agent for distribution in accordance with
Section 4.01(a) hereof.
SECTION 4.05. Taxes. (a) All payments by the Account
Party hereunder shall be made in accordance with Section 4.01, free and
clear of and without deduction for all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Participating Bank and the
Issuing Bank, taxes imposed on its overall net income, and franchise taxes
imposed on it, by the jurisdiction under the laws of which such
Participating Bank or the Issuing Bank (as the case may be) is organized or
any political subdivision thereof and, in the case of each Participating
Bank, taxes imposed on its overall net income, and franchise taxes imposed
on it, by the jurisdiction of such Participating Bank's Applicable Lending
Office or any political subdivision thereof (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as Taxes ). If the Account Party shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder to any Participating Bank or the Issuing Bank, (i) the sum
payable shall be increased as may be necessary so that after making all
required deductions (including deductions applicable to additional sums
payable under this Section 4.05) such Participating Bank or the Issuing
Bank (as the case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Account Party shall
make such deductions and (iii) the Account Party shall pay the full amount
deducted to the relevant taxation authority or other authority in
accordance with applicable law.
(b) In addition, the Account Party agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies that arise from any payment made hereunder or
from the execution, delivery or registration of, or otherwise with respect
to, this Agreement (hereinafter referred to as Other Taxes ).
(c) The Account Party will indemnify each Participating Bank and
the Issuing Bank for the full amount of Taxes and Other Taxes (including,
without limitation, any Taxes and any Other Taxes imposed by any
jurisdiction on amounts payable under this Section 4.05) paid by such
Participating Bank or the Issuing Bank (as the case may be) and any
liability (including penalties, interest and expenses) arising therefrom or
with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted. This indemnification shall be made within
30 days from the date such Participating Bank or the Issuing Bank (as the
case may be) makes written demand therefor. If any Taxes or Other Taxes
for which a Participating Bank or the Issuing Bank has received payments
from the Account Party hereunder shall be finally determined to have been
incorrectly or illegally asserted and are refunded to such Participating
Bank, such Participating Bank shall promptly forward to the Account Party
any such refunded amount. The Account Party's, the Issuing Bank's and each
Participating Bank's obligations under this Section 4.05 shall survive the
Termination Date and the payment of all other amounts hereunder.
(d) Within 30 days after the date of any payment of Taxes, the
Account Party will furnish to the Issuing Bank, at its address referred to
in Section 10.02 hereof, the original or a certified copy of a receipt
evidencing payment thereof.
(e) Each Participating Bank not incorporated in the United States
or a jurisdiction within the United States shall, on or prior to the date
it becomes a Participating Bank hereunder, deliver to the Account Party and
the Issuing Bank such certificates, documents or other evidence, as
required by the Internal Revenue Code of 1986, as amended from time to time
(the Code ), or treasury regulations issued pursuant thereto, including
Internal Revenue Service Form 4224 and any other certificate or statement
of exemption required by Treasury Regulation Section 1.1441-1(a) or Section
1.1441-6(c) or any subsequent version thereof, properly completed and duly
executed by such Participating Bank establishing that it is (i) not subject
to withholding under the Code or (ii) totally exempt from United States of
America tax under a provision of an applicable tax treaty. Each
Participating Bank shall promptly notify the Account Party and the Issuing
Bank of any change in its Applicable Lending Office and shall deliver to
the Account Party and the Issuing Bank together with such notice such
certificates, documents or other evidence referred to in the immediately
preceding sentence. Unless the Account Party and the Issuing Bank have
received forms or other documents satisfactory to them indicating that
payments hereunder are not subject to United States of America withholding
tax or are subject to such tax at a rate reduced by an applicable tax
treaty, the Account Party or the Issuing Bank shall withhold taxes from
such payments at the applicable statutory rate in the case of payments to
or for any Participating Bank organized under the laws of a jurisdiction
outside the United States of America. Each Participating Bank represents
and warrants that each such form supplied by it to the Issuing Bank and the
Account Party pursuant to this Section 4.05, and not superseded by another
form supplied by it, is or will be, as the case may be, complete and
accurate.
(f) Any Participating Bank claiming any additional amounts payable
pursuant to this Section 4.05 shall use reasonable efforts (consistent with
legal and regulatory restrictions) to file any certificate or document
requested by the Account Party or to change the jurisdiction of its
Applicable Lending Office if the making of such a filing or change would
avoid the need for or reduce the amount of any such additional amounts
which may thereafter accrue and would not, in the sole determination of
such Participating Bank, be otherwise disadvantageous to such Participating
Bank.
SECTION 4.06. Obligations Absolute. The obligations of the
Account Party under this Agreement shall be unconditional and irrevocable,
and shall be paid strictly in accordance with the terms of this Agreement
(as the same may be amended from time to time) under all circumstances,
including, without limitation, the following circumstances:
(i) any lack of validity or enforceability of this Agreement, the
Second Mortgage or any of the Security Documents or Related Documents or
any document or agreement delivered in connection therewith;
(ii) any change in the time, manner or place of payment of, or in
any other term of, all or any of the obligations of the Account Party in
respect of the Letter of Credit or any other amendment or waiver of or any
consent to departure from all or any of the Loan Documents, the Second
Mortgage or the Related Documents or any document or agreement delivered in
connection therewith;
(iii) the existence of any claim, set-off, defense or other right
which the Account Party may have at any time against the Paying Agent, the
Trustee or any other beneficiary, or any transferee, of the Letter of
Credit (or any persons or entities for whom the Paying Agent, the Trustee,
any such beneficiary or any such transferee may be acting), the Agent, the
Issuing Bank, or any other person or entity, whether in connection with
this Agreement, the transactions contemplated in any of the Loan Documents,
the Second Mortgage or the Related Documents, or any unrelated transaction;
(iv) any statement or any other document presented under the
Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect, except to the extent that a court of competent jurisdiction shall
determine that the Issuing Bank shall have engaged in gross negligence or
willful misconduct with respect thereto;
(v) payment by the Issuing Bank under the Letter of Credit
against presentation of a draft or certificate which does not comply with
the terms of the Letter of Credit, except to the extent that a court of
competent jurisdiction shall determine that the Issuing Bank shall have
engaged in gross negligence or willful misconduct with respect thereto;
(vi) any exchange of, release of or non-perfection of any interest
in any collateral, or any release or amendment or waiver of or consent to
departure from any guarantee, for all or any of the obligations of the
Account Party in respect of the Letter of Credit; or
(vii) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing.
SECTION 4.07. Evidence of Indebtedness. The Issuing Bank and each
Participating Bank shall maintain, in accordance with their usual practice,
an account or accounts evidencing the indebtedness of the Account Party
resulting from each drawing under the Letter of Credit (in the case of the
Issuing Bank) and from each Advance (in the case of each Participating
Bank) made from time to time hereunder and the amounts of principal and
interest payable and paid from time to time hereunder. In any legal action
or proceeding in respect of this Agreement, the entries made in such
account or accounts shall, in the absence of manifest error, be conclusive
evidence of the existence and amounts of the obligations of the Account
Party therein recorded.
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.01. Conditions Precedent to the Issuance of the Letter of
Credit. The obligation of the Issuing Bank to issue the Letter of Credit
and of each Participating Bank to make the Advances to be made by it is
subject to the fulfillment of the conditions precedent that the Agent shall
have received on or before the day of such issuance the following, each
dated such day (except where specified otherwise below), in form and
substance satisfactory to each Participating Bank (except where specified
otherwise below) and in sufficient copies for each Participating Bank:
(a) Agreements:
(i) Counterparts of this Agreement, duly executed and delivered
by the Account Party, the Agent, the Issuing Bank and each Participating
Bank listed on the signature pages hereto.
(ii) Counterparts of the Pledge Agreement, duly executed by
the Account Party, the Agent and the Issuing Bank.
(iii) Executed copies (or duplicate copies thereof certified
as of the Closing Date by the Account Party in a manner satisfactory to the
Agent to be a true copy) of the Indenture and the Loan Agreement, duly
executed by the parties thereto.
(iv) Executed copies (or duplicate copies thereof certified as
of the Closing Date by the Account Party in a manner satisfactory to the
Agent to be a true copy) of the Second Mortgage, duly executed by the
parties thereto.
(b) Corporate Matters:
(i) A certificate of the Secretary or an Assistant Secretary of
the Account Party certifying that attached thereto are (A) a true and
correct listing of the documents comprising the Articles of Incorporation
of the Account Party and a true and correct copy of the By-laws of the
Account Party, in each case as in effect on the Closing Date and (B) true
and correct copies of the resolutions of the Board of Directors of the
Account Party approving, if and to the extent necessary, this Agreement,
the other Loan Documents, the Related Documents to which it is a party and
the other documents to be delivered by or on behalf of the Account Party
hereunder and thereunder, and of all documents evidencing other necessary
corporate action, if any, with respect to the execution, delivery and
performance by or on behalf of the Account Party of this Agreement, the
other Loan Documents and such Related Documents and certifying that such
resolutions and other corporate actions, if any, are in full force and
effect and have not been revoked, rescinded or modified.
(ii) A certificate of the Secretary or an Assistant Secretary of
the Account Party certifying the names and true signatures of the officers
of the Account Party authorized to sign this Agreement, the other Loan
Documents, the Related Documents to which it is a party and the other
documents to be delivered hereunder and thereunder.
(c) Governmental Approvals:
(i) A certificate of a duly authorized officer of the Account
Party certifying that attached thereto are true and correct copies of all
Governmental Approvals referred to in clause (i) of the definition of
Governmental Approval required to be obtained or made by the Account
Party.
(d) Financial, Accounting and Compliance Matters:
(i) A certificate signed by the Treasurer or Assistant Treasurer
of the Account Party, certifying as to the absence of any material adverse
change in the financial condition, operations, properties or prospects of
the Account Party since December 31, 1992, except to the extent, if any,
described in the Account Party's Quarterly Reports on Form 10-Q for the
periods ended March 31 and/or June 30, 1993 or in the Account Party's
Current Reports on Form 8-K dated June 3, 1993, June 30, 1993 and/or
September 10, 1993.
(ii) A certificate of a duly authorized officer of the Account
Party to the effect that:
(A) the representations and warranties contained in Section
6.01 are correct in all material respects on and as of the Closing Date
before and after giving effect to the issuance of the Letter of Credit; and
(B) no event has occurred and is continuing which
constitutes an Event of Default or Unmatured Default, or would result from
the issuance of the Letter of Credit.
(e) Relating to the Issuance of the Bonds:
(i) An executed copy (or a duplicate copy thereof certified by
the Account Party in a manner satisfactory to the Agent to be a true copy)
of the Remarketing Agreement, duly executed by the Issuer, the Remarketing
Agent and the Account Party.
(ii) An executed copy (or a duplicate copy thereof certified by
the Account Party in a manner satisfactory to the Agent to be a true copy)
of the Purchase Contract, duly executed by Goldman, Sachs & Co.,
Individually and as Representative of Advest, Inc., Greenwich Partners,
Inc. and U.S. Securities, Inc., the Issuer and the Account Party.
(iii) A letter from Whitman & Ransom, counsel to the Issuer,
addressed to the Agent, the Issuing Bank and the Participating Banks and
stating therein that the Agent, the Issuing Bank and the Participating
Banks may rely on the opinion of such firm in the form of Appendix C to the
Official Statement relating to the Bonds and delivered pursuant to Section
14(i)(2)(F) of the Purchase Contract, together with copies of such opinion.
(iv) Copies of the Preliminary Official Statement and Official
Statement used in connection with the offering and remarketing of the
Bonds, and any amendments, supplements or "stickers" thereto.
(v) Copies of the Issuer Resolution, and, to the extent not
otherwise referenced in this Section 5.01(e), of all other agreements,
documents, certificates and opinions delivered in connection with the
issuance of the Bonds.
(f) Opinions of Counsel:
Favorable opinions of:
(i) Day, Berry & Howard, counsel to the Account Party, in
substantially the form of Exhibit 5.01A and as to such other matters as the
Majority Lenders, through the Agent, may reasonably request; and
(ii) King & Spalding, special New York counsel to the Agent and
the Issuing Bank, in substantially the form of Exhibit 5.01B.
(g) Miscellaneous:
(i) Letters from S&P and Moody's to the effect that the Bonds
have been rated A-1+ and VMIG-1, respectively, such letters to be in form
and substance satisfactory to the Issuing Bank.
(ii) Such other approvals, opinions and documents as the Majority
Lenders, through the Issuing Bank, may reasonably request as to the
legality, validity, binding effect or enforceability of the Loan Documents
or the financial condition, properties, operations or prospects of the
Account Party.
SECTION 5.02. Additional Conditions Precedent to the Issuance of the
Letter of Credit. The obligation of the Issuing Bank to issue the Letter
of Credit and of each Participating Bank to make the Advances to be made by
it shall be subject to the further conditions precedent that, on the date
of the issuance of the Letter of Credit:
(a) the representations and warranties contained in Section
6.01 shall be correct in all material respects on and as of the Closing
Date before and after giving effect to the issuance of the Letter of
Credit;
(b) no event shall have occurred and be continuing which
constitutes an Event of Default or Unmatured Default, or would result from
the issuance of the Letter of Credit; and
(c) The Account Party shall have paid all fees under or
referenced in Section 2.03 hereof, to the extent then due and payable.
SECTION 5.03. Conditions Precedent to Initial Advances. The
obligation of each Participating Bank to make any Initial Advance shall be
subject to the conditions precedent that, on the date of such Initial
Advance, the following statements shall be true:
(a) the representations and warranties contained in Section
6.01 of this Agreement (other than the last sentence of subsection (f) and
clause (ii) of subsection (g) thereof) are true and correct on and as of
the date of such Initial Advance, before and after giving effect to such
Initial Advance and to the application of the proceeds (if any) therefrom,
as though made on and as of such date; and
(b) no event has occurred and is continuing which
constitutes an Event of Default.
Unless the Account Party shall have previously advised the Agent in writing
that one or more of the statements contained in subsections (a) and (b) of
this Section 5.03 is no longer true, the Account Party shall be deemed to
have represented and warranted, on and as of the date of any Initial
Advance, that the above statements are true.
SECTION 5.04. Conditions Precedent to Term Advances. The
obligation of each Participating Bank to make any Term Advance shall be
subject to the conditions precedent that, on the date of such Term Advance
the following statements shall be true:
(a) the representations and warranties contained in Section
6.01 of this Agreement (including the last sentence of subsection (f) and
clause (ii) of subsection (g) thereof) are true and correct on and as of
the date of such Term Advance, before and after giving effect to such Term
Advance and to the application of the proceeds therefrom, as though made
on and as of such date; and
(b) no event has occurred and is continuing which
constitutes an Event of Default or an Unmatured Default.
Unless the Account Party shall have previously advised the Agent in writing
that one or more of the statements contained in subsections (a) and (b) of
this Section 5.04 is no longer true, the Account Party shall be deemed to
have represented and warranted, on and as of the date of any Term Advance,
that the above statements are true.
SECTION 5.05. Reliance on Certificates. The Agent, the Issuing
Bank and the Participating Banks shall be entitled to rely conclusively
upon the certificates delivered from time to time by officers of the
Account Party, NU and the other parties to the Loan Documents and Related
Documents as to the names, incumbency, authority and signatures of the
respective persons named therein until such time as the Agent may receive a
replacement certificate, in form acceptable to the Agent, from an officer
of such Person identified to the Agent as having authority to deliver such
certificate, setting forth the names and true signatures of the officers
and other representatives of such Person thereafter authorized to act on
behalf of such Person.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01. Representations and Warranties of the Account Party. The
Account Party represents and warrants as follows:
(a) Each of the Account Party and its Principal Subsidiaries is a
corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, has the requisite corporate
power and authority to own its property and assets and to carry on its
business as now conducted and is qualified to do business in every
jurisdiction where, because of the nature of its business or property, such
qualification is required, except where the failure so to qualify would not
have a material adverse effect on the financial condition, properties,
prospects or operations of the Account Party or of the Account Party and
its Principal Subsidiaries taken as a whole. The Account Party has the
corporate power to execute, deliver and perform its obligations under this
Agreement, each other Loan Document and each Related Document to which it
will be a party.
(b) The execution, delivery and performance by the Account Party of
each Loan Document and Related Document to which it is a party are within
the Account Party's corporate powers, have been duly authorized by all
necessary corporate action, and do not and will not contravene (i) the
Account Party's charter or by-laws or any law or legal restriction or (ii)
any contractual restriction binding on or affecting the Account Party or
its properties or any of its Principal Subsidiaries or its properties.
(c) Each of the Account Party and its Principal Subsidiaries is not
in violation of any law, or in default with respect to any judgment, writ,
injunction, decree, rule or regulation of any court or governmental agency
or instrumentality, where such violation or default would have a material
adverse effect on the financial condition, properties, prospects or
operations of the Account Party or of the Account Party and its Principal
Subsidiaries taken as a whole.
(d) All Governmental Approvals referred to in clause (i) in the
definition of Governmental Approvals have been duly obtained or made, and
all applicable periods of time for review, rehearing or appeal with respect
thereto have expired, except as described below. If the period for appeal
of the order of the Securities and Exchange Commission approving the
transactions contemplated hereby has not expired, the filing of an appeal
of such order will not affect the validity of said transactions, unless
such order has been otherwise stayed or any of the parties hereto has
actual knowledge that any of such transactions constitutes a violation of
the Public Utility Holding Company Act of 1935 or any rule or regulation
thereunder. No such stay exists and the Account Party has no reason to
believe that any of such transactions constitutes any such violation. If
the period for appeal of the decision of the Connecticut Department of
Public Utility Control (the CDPUC ) approving the transactions
contemplated hereby has not expired, the filing of an appeal of such
decision will not affect the validity of said transactions, unless
operation of such decision has been stayed or suspended by the CDPUC or a
reviewing court prior to the consummation of such transactions. No such
stay or suspension exists. No representation or warranty is made
concerning the applicable period of time for review, rehearing or appeal
with respect to Governmental Approvals of the Issuer in connection with the
issuance of the Bonds. The Account Party and each of its Principal
Subsidiaries have obtained or made all Governmental Approvals referred to
in clause (ii) of the definition of Governmental Approvals , except (i)
those which are not yet required but which are obtainable in the ordinary
course of business as and when required, (ii) those the absence of which
would not materially adversely affect the financial condition, properties,
prospects or operations of the Account Party or any Principal Subsidiary
and (iii) those which the Account Party is diligently attempting in good
faith to obtain, renew or extend, or the requirement for which the Account
Party is contesting in good faith by appropriate proceedings or by other
appropriate means; in each case described in the foregoing clause (iii),
such attempt or contest, and any delay resulting therefrom, is not
reasonably expected to have a material adverse effect on the financial
condition, properties, prospects or operations of the Account Party or any
Principal Subsidiary or to magnify to any significant degree any such
material adverse effect that would reasonably be expected to result from
the absence of such Governmental Approval.
(e) This Agreement, each other Loan Document and each Related Document
to which the Account Party is a party have been duly executed and delivered
by or on behalf of the Account Party and are legal, valid and binding
obligations of the Account Party enforceable against the Account Party in
accordance with their respective terms; subject to the qualifications,
however, that the enforcement of the rights and remedies herein and therein
is subject to bankruptcy and other similar laws of general application
affecting rights and remedies of creditors and the application of general
principles of equity (regardless of whether considered in a proceeding in
equity or at law) and that indemnification against violations of securities
and similar laws may be subject to matters of public policy.
(f) (i) The audited balance sheet of the Account Party as at December
31, 1992, and the audited statements of income and cash flows of the
Account Party for the fiscal year then ended as set forth in the Account
Party's Annual Report on Form 10-K for such fiscal year and (ii) the
unaudited balance sheet of the Account Party as at June 30, 1993 and the
unaudited statements of income and cash flows of the Account Party for the
six-month period then ended as set forth in the Account Party's Quarterly
Report on Form 10-Q for the period then ended, fairly present in all
material respects the financial condition and results of operations of the
Account Party at and for the respective periods ended on such dates, and
have been prepared in accordance with generally accepted accounting
principles consistently applied. Since December 31, 1992, there has been
no material adverse change in the financial condition, operations,
properties or prospects of the Account Party and its Subsidiaries, if any,
taken as a whole, except to the extent, if any, described in the Account
Party's Quarterly Reports on Form 10-Q for the periods ended March 31, 1993
and/or June 30, 1993, or in the Account Party's Current Reports on Form 8-K
dated June 3, 1993, June 30, 1993 and/or September 10, 1993 or in Schedule
II hereto.
(g) There is no pending or known threatened action or proceeding
(including, without limitation, any action or proceeding relating to any
environmental protection laws or regulations) affecting the Account Party
or its properties, or any of its Principal Subsidiaries or its properties,
before any court, governmental agency or arbitrator (i) which affects or
purports to affect the legality, validity or enforceability of the Loan
Documents or the Related Documents or any of them or (ii) as to which there
is a reasonable possibility of an adverse determination and which, if
adversely determined, would materially adversely affect the financial
condition, properties, prospects or operations of the Account Party and its
Principal Subsidiaries taken as a whole; except, for purposes of clause
(ii) only, such as is described in the Account Party's Annual Report on
Form 10-K for the fiscal year ended December 31, 1992, in the Account
Party's Quarterly Reports on Form 10-Q for the periods ended March 31, 1993
or June 30, 1993, or in the Account Party's Current Reports on Form 8-K,
dated June 3, 1993, June 30, 1993 and/or September 10, 1993 or in Schedule
II hereto.
(h) No ERISA Plan Termination Event has occurred nor is reasonably
expected to occur with respect to any ERISA Plan which would materially
adversely affect the financial condition, properties, prospects or
operations of the Account Party and its Subsidiaries taken as a whole,
except as disclosed to and consented to in writing by the Majority Lenders.
Since the date of the most recent Schedule B (Actuarial Information) to the
annual report of each such ERISA Plan (Form 5500 Series), there has been no
material adverse change in the funding status of the ERISA Plans referred
to therein, and no prohibited transaction has occurred with respect
thereto that, singly or in the aggregate with all other prohibited
transactions and after giving effect to all likely consequences thereof,
would be reasonably expected to have a material adverse effect on the
financial condition, properties, prospects or operations of the Account
Party and its Subsidiaries taken as a whole. Neither the Account Party nor
any of its ERISA Affiliates has incurred nor reasonably expects to incur
any material withdrawal liability under ERISA to any ERISA Multiemployer
Plan, except as disclosed to all Lenders and consented to in writing by the
Majority Lenders.
(i) The Account Party or one of its Principal Subsidiaries has good
and marketable title (or, in the case of personal property, valid title) or
valid leasehold interests in the electric generating plants of which it is
named as owner in Item 2 of the Account Party's Annual Report on Form
10-K for the fiscal year ended December 31, 1992 under the caption System
Generating Plants , except for minor defects in title that do not interfere
with the ability of the Account Party or any of its Principal Subsidiaries
to conduct its business as now conducted. All such assets and properties
are free and clear of any Lien, other than Liens permitted under Section
7.02(a) hereof.
(j) All outstanding shares of capital stock having ordinary voting
power for the election of directors of the Account Party have been validly
issued, are fully paid and nonassessable and are owned beneficially by NU,
free and clear of any Lien. NU is a holding company (as defined in the
Public Utility Holding Company Act of 1935, as amended).
(k) The Account Party and each of its Principal Subsidiaries has filed
all tax returns (Federal, state and local) required to be filed and paid
taxes shown thereon to be due, including interest and penalties, or, to the
extent the Account Party or any of its Principal Subsidiaries is contesting
in good faith an assertion of liability based on such returns, has provided
adequate reserves in accordance with generally accepted accounting
principles for payment thereof.
(l) No exhibit, schedule, report or other written information provided
by or on behalf of the Account Party or its agents to the Agent, the
Issuing Bank or the Participating Banks in connection with the negotiation,
execution and closing of this Agreement, the other Loan Documents or the
Related Documents knowingly contained when made any material misstatement
of fact or knowingly omitted to state any material fact necessary to make
the statements contained therein not misleading in light of the
circumstances under which they were made.
(m) No proceeds of any Advance will be used in violation of, or in any
manner that would result in a violation by any party hereto of, Regulations
G, T, U or X promulgated by the Board of Governors of the Federal Reserve
System or any successor regulations. The Account Party (A) is not an
investment company within the meaning ascribed to that term in the
Investment Company Act of 1940 and (B) is not engaged in the business of
extending credit for the purpose of buying or carrying margin stock.
ARTICLE VII
COVENANTS OF THE ACCOUNT PARTY
SECTION 7.01. Affirmative Covenants. So long as any amounts shall
remain available to be drawn under the Letter of Credit or any Advance or
other amounts shall remain unpaid hereunder or any Participating Bank shall
have any Commitment, the Account Party will, unless the Majority Lenders
shall otherwise consent in writing:
(a) Use of Proceeds. Apply all proceeds of each Advance solely as
specified in Section 3.02 and Section 6.01(m) hereof.
(b) Payment of Taxes, Etc. Pay and discharge before the same shall
become delinquent, and cause each of its Principal Subsidiaries to pay and
discharge before the same shall become delinquent, all taxes, assessments
and governmental charges, royalties or levies imposed upon it or upon its
property except to the extent the Account Party or any of its Principal
Subsidiaries is contesting the same in good faith by appropriate
proceedings and has set aside adequate reserves in accordance with
generally accepted accounting principles for the payment thereof.
(c) Maintenance of Insurance. Maintain, or cause to be maintained,
insurance (including appropriate plans of self-insurance) covering the
Account Party, its Principal Subsidiaries and their respective properties,
in effect at all times in such amounts and covering such risks as may be
required by law and in addition as is usually carried by companies engaged
in similar businesses and owning similar properties.
(d) Preservation of Existence, Etc. Subject at all times to Section
7.02(b) hereof, preserve and maintain, and cause each of its Principal
Subsidiaries to preserve and maintain, its existence, corporate or
otherwise, material rights (statutory and otherwise) and franchises except
for such rights and franchises which do not materially adversely affect the
financial condition, properties, prospects or operations of the Account
Party or any of its Principal Subsidiaries.
(e) Compliance with Laws, Etc.. Comply, and cause each of its
Principal Subsidiaries to comply, in all material respects with the
requirements of all applicable laws, rules, regulations and orders of any
governmental authority, including, without limitation, any such laws,
rules, regulations and orders issued by the Securities and Exchange
Commission or relating to zoning, environmental protection, use and
disposal of Hazardous Substances, land use, construction and building
restrictions, ERISA and employee safety and health matters relating to
business operations, except to the extent (i) that the Account Party or any
of its Principal Subsidiaries is contesting the same in good faith by
appropriate proceedings or (ii) that any such non-compliance, and the
enforcement or correction thereof, would not materially adversely affect
the financial condition, properties, prospects or operations of the Account
Party or any of its Principal Subsidiaries.
(f) Inspection Rights. At any time and from time to time upon
reasonable notice, permit the Issuing Bank and its agents and
representatives to examine the records and books of account of, and the
properties of, the Account Party and any of its Principal Subsidiaries.
(g) Keeping of Books. Keep proper records and books of account, in
which full and correct entries shall be made of all financial transactions
of the Account Party and its Principal Subsidiaries and the assets and
business of the Account Party and its Principal Subsidiaries, in accordance
with generally accepted accounting practices consistently applied.
(h) Conduct of Business. Conduct its primary business, and cause each
of its Principal Subsidiaries to conduct its primary business, in
substantially the same manner and in substantially the same fields as such
business is conducted on the Closing Date.
(i) Maintenance of Properties, Etc. (i) As to properties of the type
described in Section 6.01(i) hereof, subject at all times to Section
7.02(b) hereof, maintain, and cause its Principal Subsidiaries to maintain,
title of the quality described therein; and (ii) preserve, maintain,
develop, and operate, and cause its Principal Subsidiaries to preserve,
maintain, develop and operate, in substantial conformity with all laws,
material contractual obligations and prudent practices prevailing in the
industry, all of its properties which are used or useful in the conduct of
its or its Principal Subsidiaries' respective businesses in good working
order and condition, ordinary wear and tear excepted, except to the extent
such non-conformity would not materially adversely affect the financial
condition, properties, prospects or operations of the Account Party or any
of its Principal Subsidiaries; provided, however, that the Account Party or
any Principal Subsidiary will not be prevented from discontinuing the
operation and maintenance of any such properties if such discontinuance is,
in the judgment of the Account Party or such Principal Subsidiary,
desirable in the operation or maintenance of its business and would not
materially adversely affect the financial condition, properties, prospects
or operations of the Account Party or such Principal Subsidiary.
(j) Governmental Approvals. Duly obtain, and cause each of its
Principal Subsidiaries to duly obtain, on or prior to such date as the same
may become legally required, and thereafter maintain in effect at all
times, all Governmental Approvals on its or such Principal Subsidiary's
part to be obtained, except with respect to those Governmental Approvals
referred to in clause (ii) of the definition of Governmental Approvals ,
(i) those the absence of which would not materially adversely affect the
financial condition, properties, prospects or operations of the Account
Party or any Principal Subsidiary and (ii) those which the Account Party is
diligently attempting in good faith to obtain, renew or extend, or the
requirement for which the Account Party is contesting in good faith by
appropriate proceedings or by other appropriate means; provided, however,
that the exception afforded by clause (ii), above, shall be available only
if and for so long as such attempt or contest, and any delay resulting
therefrom, does not have a material adverse effect on the financial
condition, properties, prospects or operations of the Account Party or any
Principal Subsidiary and does not magnify to any significant degree any
such material adverse effect that would reasonably be expected to result
from the absence of such Governmental Approval.
(k) Further Assurances. Promptly execute and deliver all further
instruments and documents, and take all further action, that may be
necessary or that any Participating Bank through the Issuing Bank may
reasonably request in order to fully give effect to the interests and
properties purported to be covered by the Security Documents.
(l) Related Documents. Perform and comply in all material respects
with each of the provisions of each Related Document to which it is a
party.
(m) Ratings. Maintain at all times ratings in respect of the Bonds of
at least two nationally-recognized rating services, at least one of which
shall be S&P or Moody's.
SECTION 7.02. Negative Covenants. So long as any amount shall remain
available to be drawn under the Letter of Credit or any Advance or other
amounts shall remain unpaid hereunder or any Participating Bank shall have
any Commitment, the Account Party will not, without the written consent of
the Majority Lenders:
(a) Liens, Etc. Create, incur, assume or suffer to exist any lien,
security interest, or other charge or encumbrance (including the lien or
retained security title of a conditional vendor) of any kind, or any other
type of preferential arrangement the intent or effect of which is to assure
a creditor against loss or to prefer one creditor over another creditor
upon or with respect to any of its properties or assets (any of the
foregoing being referred to herein as a Lien ), excluding, however, from
the operation of the foregoing restrictions the Liens created or perfected
under or in connection with the Pledge Agreement, and the following,
whether now existing or hereafter created or perfected:
(i) Liens created by (A) the Indenture of Mortgage and Deed of
Trust dated as of May 1, 1921, from the Account Party to Bankers Trust
Company, as Trustee, as amended and supplemented (the CL&P Indenture ), or
(B) the First Mortgage Indenture and Deed of Trust dated as of January 1,
1958, from the Hartford Electric Light Company ( HELCO ) to the First
National Bank of Boston, as Successor Trustee, as amended and supplemented
(the HELCO Indenture );
(ii) Liens on the Account Party's interest in the Millstone Unit
No. 1, Millstone Unit No. 2 or Millstone Unit No. 3 nuclear generating
units in Waterford, Connecticut, or nuclear fuel for any or all nuclear
units in which the Account Party has an interest (including, without
limitation, Millstone Unit No. 1, Millstone Unit No.2 and Millstone Unit
No. 3);
(iii) Permitted Liens or Permitted Encumbrances under the CL&P
Indenture or the HELCO Indenture;
(iv) any Lien on assets of any of its Subsidiaries created or
assumed to secure Debt owing by any of its Subsidiaries to the Account
Party or to any wholly-owned Subsidiary of the Account Party;
(v) any purchase money Lien or construction mortgage on assets
hereafter acquired or constructed by the Account Party or any of its
Subsidiaries and any Lien on any assets existing at the time of acquisition
thereof by the Account Party or any of its Subsidiaries, or created within
180 days from the date of completion of such acquisition or construction;
provided that such Lien shall at all times be confined solely to the assets
so acquired or constructed and any additions thereto;
(vi) any existing Liens on assets now owned by the Account Party
or any of its Subsidiaries; Liens on assets or stock of any class of, or
any partnership or joint venture interest in, any of its Subsidiaries
existing at the time it becomes a Subsidiary of the Account Party, and
liens existing on assets of a corporation or other going concern when it is
merged into or with the Account Party or a Subsidiary of the Account Party,
or when substantially all of its assets are acquired by the Account Party
or a Subsidiary of the Account Party; provided that such Liens shall at all
times be confined solely to such assets, or if such assets constitute a
utility system, additions to or substitutions for such assets;
(vii) Liens resulting from legal proceedings being contested in
good faith by appropriate legal or administrative proceedings by the
Account Party or any of its Subsidiaries, and as to which the Account Party
or any of its Subsidiaries, as the case may be, to the extent required by
generally accepted accounting principles applied on a consistent basis,
shall have set aside on its books adequate reserves;
(viii) Liens created in favor of the other contracting party in
connection with advance or progress payments;
(ix) any Liens in favor of any state of the United States or any
political subdivision of any such state, or any agency of any such state or
political subdivisions, or trustee acting on behalf of holders of
obligations issued by any of the foregoing or any financial institutions
lending to or purchasing obligations of any of the foregoing, which Lien is
created or assumed for the purpose of financing all or part of the cost of
acquiring or constructing the property subject thereto;
(x) Liens resulting from conditional sale agreements, capital
leases or other title retention agreements;
(xi) Liens on property of the Account Party or any of its
Subsidiaries related to the financing of pollution control facilities;
(xii) Liens on accounts receivable and power contracts resulting
from financing transactions;
(xiii) any other Liens incurred in the ordinary course of business
otherwise than to secure Debt; and
(xiv) any extension, renewal or replacement of Liens permitted by
clauses (i) through (vi) and (viii) through (xiii); provided, however, that
the principal amount of Debt secured thereby shall not, at the time of such
extension, renewal or replacement, exceed the principal amount of Debt so
secured and that such extension, renewal or replacement shall be limited to
all or a part of the property which secured the Lien so extended, renewed
or replaced;
(b) Mergers, and Sales of Assets, Etc. Merge with or into or
consolidate with or into, any Person, or permit any of its Subsidiaries to
be a party to, any merger or consolidation, or purchase or otherwise
acquire all or substantially all of the assets or stock of any class of, or
any partnership or joint venture interest in, any other Person or entity,
or sell, transfer, convey or lease all or any substantial part of its
assets (other than sales, transfers or conveyances of receivables and power
contracts), except for, and then only after receipt of all necessary
corporate and governmental or regulatory approvals and provided, that,
before and after giving effect to any such merger, consolidation, purchase,
acquisition, sale, transfer, conveyance or lease, no Event of Default or
Unmatured Default shall have occurred and be continuing:
(i) any such merger or consolidation, sale, transfer, conveyance,
lease or assignment of or by any wholly-owned Subsidiary of the Account
Party into the Account Party or into, with or to any other wholly-owned
Subsidiary of the Account Party and any such purchase or other acquisition
by the Account Party or any wholly- owned Subsidiary of the Account Party
of the assets or stock of any wholly- owned Subsidiary of the Account
Party;
(ii) any such sale of assets (other than stock) which comprise all
or any part of its interest in a nuclear power generating plant (whether
completed or under construction);
(iii) any such merger or consolidation of the Account Party with
or into another wholly- owned Subsidiary of NU and/or a Regulatory
Transaction Entity and/or an entity owning a cogeneration or independent
power project, pursuant to step- in or similar rights granted pursuant to
a pre-existing power purchase contract, if (but only if): (A) the successor
or surviving corporation, if not the Account Party, shall have assumed or
succeeded to all of the liabilities of the Account Party (including the
liabilities of the Account Party under this Agreement), and (B) the Agent
shall have received the favorable written opinion of counsel to the Account
Party, in form and substance satisfactory to the Agent and the Majority
Lenders, to the effect of the foregoing subclause (A); provided, however,
in the event of a merger or consolidation with a Regulatory Transaction
Entity, if the purchase price plus the amount of any liabilities assumed in
connection with such merger or consolidation exceeds $100,000,000, the
Account Party shall deliver to the Agent with sufficient copies for each
Participating Bank 30 days prior to such merger or consolidation, a
certificate of a duly authorized officer of the Account Party demonstrating
projected compliance with the ratio set forth in Section 7.02(d) hereof for
and as of each of the three consecutive fiscal quarters immediately
succeeding such merger or consolidation and certifying that such
projections were prepared in good faith and on reasonable assumptions;
(iv) any purchase or acquisition of all or substantially all of
the assets of or stock of any class of, or any partnership or joint venture
interest in (and any assumption of the related liabilities) (A) an entity
owning a cogeneration or independent power project, pursuant to step-in
or similar rights granted pursuant to a pre- existing power purchase
contract; (B) a Regulatory Transaction Entity; or (C) any other Person if
the purchase price of such acquisition plus the amount of any liabilities
assumed by the Account Party in connection therewith does not exceed
$50,000,000 in the aggregate; provided, however, in the event of a purchase
or acquisition of a Regulatory Transaction Entity, if the purchase price
plus the amount of any liabilities assumed in connection with such purchase
or acquisition exceeds in the aggregate $100,000,000, the Account Party
shall deliver to the Agent with sufficient copies for each Participating
Bank 30 days prior to such purchase or acquisition, a certificate of a duly
authorized officer of the Account Party demonstrating projected compliance
with the ratio set forth in Section 7.02(d) hereof for and as of each of
the three consecutive fiscal quarters immediately succeeding such purchase
or acquisition and certifying that such projections were prepared in good
faith and on reasonable assumptions; or
(v) any purchase or acquisition of a joint venture interest in
a generating and/or transmission facility or in a mutual insurance company
providing nuclear liability or nuclear property or replacement power
insurance.
(c) Compliance with ERISA. (i) Terminate, or permit any ERISA
Affiliate to terminate, any ERISA Plan so as to result in any liability of
the Account Party or any Principal Subsidiary to the PBGC in an amount
greater than $1,000,000, or (ii) permit to exist any occurrence of any
Reportable Event (as defined in Title IV of ERISA) which, alone or together
with any other Reportable Event with respect to the same or another ERISA
Plan, has a reasonable possibility of resulting in liability of the Account
Party or any Subsidiary to the PBGC in an aggregate amount exceeding
$1,000,000, or any other event or condition, which presents a material risk
of such a termination by the PBGC of any ERISA Plan or has a reasonable
possibility of resulting in a liability of the Account Party or any
Subsidiary to the PBGC in an aggregate amount exceeding $1,000,000.
(d) Common Equity Ratio. Permit the ratio (expressed as a
percentage) of Consolidated Common Equity to Consolidated Capitalization to
be less than 30% for any three consecutive fiscal quarters.
SECTION 7.03. Reporting Obligations. So long as any amount
shall remain available to be drawn under the Letter of Credit or any
Advance or other amounts shall remain unpaid hereunder or any Participating
Bank shall have any Commitment, the Account Party will, unless the Majority
Lenders shall otherwise consent in writing, furnish to the Agent in
sufficient copies for the Issuing Bank and each Participating Bank, the
following:
(i) as soon as possible and in any event within ten days after the
occurrence of each Event of Default or Unmatured Default continuing on the
date of such statement, a statement of the Chief
Financial Officer, Treasurer or Assistant Treasurer of the Account Party
setting forth details of such Event of Default or Unmatured Default and the
action which the Account Party proposes to take with respect thereto;
(ii) as soon as available and in any event within 50 days after
the end of each of the first three quarters of each fiscal year of the
Account Party, a copy of the Account Party's Quarterly Report on Form 10-Q,
if any, submitted to the Securities and Exchange Commission with respect to
such quarter, containing financial statements in reasonable detail and duly
certified (subject to year-end audit adjustments) by the Chief Financial
Officer, Treasurer, Assistant Treasurer or Comptroller of the Account Party
as having been prepared in accordance with the system of management
financial reports of the Account Party applied on a basis consistent with
the financial statements referred to in Section 6.01(f) hereof and
accompanied by a certificate of a duly authorized officer of the Account
Party (X) stating that no Event of Default or Unmatured Default has
occurred and is continuing or, if an Event of Default or Unmatured Default
has occurred and is continuing, describing the nature thereof and the
action which the Account Party proposes to take with respect thereto and
(Y) demonstrating compliance with Section 7.02(d) hereof for and as of the
end of such fiscal quarter, such demonstration to be in a schedule (in form
satisfactory to the Agent) which sets forth the computations used in
determining such compliance;
(iii) as soon as available and in any event within 105 days after the
end of each fiscal year of the Account Party, a copy of the Account Party's
Annual Report on Form 10-K submitted to the Securities and Exchange
Commission with respect to such year, containing financial statements
certified by a nationally-recognized independent public accountant and to
be accompanied by a certificate of the Chief Financial Officer, Treasurer,
Assistant Treasurer or Comptroller of the Account Party (X) stating that no
Event of Default or Unmatured Default has occurred and is continuing, or if
an Event of Default or Unmatured Default has occurred and is continuing,
describing the nature thereof and the action which the Account Party
proposes to take with respect thereto and (Y) demonstrating compliance with
Section 7.02(d) hereof for and as of the end of such fiscal year, such
demonstration to be in a schedule (in form satisfactory to the Agent) which
sets forth the computations used in determining such compliance;
(iv) as soon as possible and in any event (A) within 30 days
after the Chief Financial Officer, Treasurer or any Assistant Treasurer of
the Account Party knows or has reason to know that any ERISA Plan
Termination Event described in clause (i) of the definition of ERISA Plan
Termination Event with respect to any ERISA Plan or ERISA Multiemployer
Plan has occurred and (B) within 10 days after the Account Party knows or
has reason to know that any other ERISA Plan Termination Event with respect
to any ERISA Plan or ERISA Multiemployer Plan has occurred, a statement of
the Chief Financial Officer, Treasurer or Assistant Treasurer of the
Account Party describing such ERISA Plan Termination Event and the action,
if any, which the Account Party proposes to take with respect thereto;
(v) promptly after receipt thereof by the Account Party or any of its
ERISA Affiliates from the PBGC, copies of each notice received by the
Account Party or any such ERISA Affiliate of the PBGC's intention to
terminate any ERISA Plan or ERISA Multiemployer Plan or to have a trustee
appointed to administer any ERISA Plan or ERISA Multiemployer Plan;
(vi) promptly after receipt thereof by the Account Party or any of
its ERISA Affiliates from an ERISA Multiemployer Plan sponsor, a copy of
each notice received by the Account Party or any of its ERISA Affiliates
concerning the imposition or amount of withdrawal liability in an aggregate
principal amount of at least $1,000,000 pursuant to Section 4202 of ERISA
in respect of which the Account Party may be liable;
(vii) promptly after the Account Party or any Subsidiary
becomes aware of the commencement thereof, notice of all actions, suits,
proceedings or other events of the type described in Section 6.01(g)
hereof;
(viii) promptly after the filing thereof, copies of each
prospectus (excluding any prospectus contained in any Form S-8) and Current
Report on Form 8-K, if any, which the Account Party or any Principal
Subsidiary files with the Securities and Exchange Commission or any
governmental authority which may be substituted therefor;
(ix) promptly after receipt thereof, any assertion of the character
described in Section 8.01(h) hereof and the action the Account Party
proposes to take with respect thereto; and
(x) promptly after requested, such other information
respecting the financial condition, operations, properties, prospects or
otherwise, of the Account Party or its Subsidiaries as the Agent on behalf
of the Majority Lenders may from time to time reasonably request in
writing.
ARTICLE VIII
DEFAULTS
SECTION 8.01. Events of Default. The following events shall
each constitute an Event of Default if the same shall occur and be
continuing after the grace period and notice requirement (if any)
applicable thereto:
(a) The Account Party shall fail to pay any interest on any
Advance or pursuant to Section 4.02 hereof within two days after the same
becomes due; or the Account Party shall fail to reimburse the Issuing Bank
for any Interest Drawing (as defined in the Letter of Credit) within two
days after such reimbursement becomes due; or the Account Party shall fail
to pay any fees or commissions hereunder within five days after the same
becomes due; or the Account Party shall fail to make any other payment
required to be made pursuant to Article II or Article III hereof when due;
or
(b) Any representation or warranty made by the Account Party (or
any of its officers or agents) in this Agreement, the Pledge Agreement or
the Purchase Contract, or in any certificate or other writing delivered
pursuant to this Agreement or the Purchase Contract, shall prove to have
been incorrect in any material respect when made or deemed made; or
(c) The Account Party shall fail to perform or observe any
term or covenant on its part to be performed or observed contained in
Sections 7.01(d), Section 7.02(b) or (d), or Section 7.03(i) hereof; or
(d) The Account Party shall fail to perform or observe any other
term or covenant on its part to be performed or observed contained in this
Agreement or the Pledge Agreement and any such failure shall remain
unremedied, after the earlier of written notice having been given to the
Account Party by the Agent, the Issuing Bank or any Participating Bank, and
actual knowledge thereof by the Account Party, for a period of 30 days; or
(e) The Account Party or any Principal Subsidiary shall fail to
pay any of its Debt when due (including any interest or premium thereon but
excluding Debt arising hereunder and excluding other Debt aggregating in no
event more than $10,000,000 in principal amount at any one time) whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise,
and such failure shall continue after the applicable grace period, if any,
specified in any agreement or instrument relating to such Debt; or any
other default under any agreement or instrument relating to any such Debt,
or any other event, shall occur and shall continue after the applicable
grace period, if any, specified in such agreement or instrument, if the
effect of such default or event is to accelerate, or to permit the
acceleration of, the maturity of such Debt; or any such Debt shall be
declared to be due and payable, or required to be prepaid (other than by a
regularly scheduled required prepayment or as a result of the Account
Party's or such Principal Subsidiary's exercise of a prepayment option)
prior to the stated maturity thereof; or
(f) The Account Party or any Principal Subsidiary shall
generally not pay its debts as such debts become due, or shall admit in
writing its inability to pay its debts generally, or shall make an
assignment for the benefit of creditors; or any proceeding shall be
instituted by or against the Account Party or such Principal Subsidiary
seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief, or
composition of its debts under any law relating to bankruptcy, insolvency,
or reorganization or relief of debtors, or seeking the entry of an order
for relief or the appointment of a receiver, trustee, or other similar
official for it or for any substantial part of its property and, in the
case of a proceeding instituted against the Account Party or such Principal
Subsidiary, either the Account Party or such Principal Subsidiary shall
consent thereto or such proceeding shall remain undismissed or unstayed for
a period of 90 days or any of the actions sought in such proceeding
(including without limitation the entry of an order for relief against the
Account Party or such Principal Subsidiary or the appointment of a
receiver, trustee, custodian or other similar official for the Account
Party or such Principal Subsidiary or any of its property) shall occur; or
the Account Party or such Principal Subsidiary shall take any corporate or
other action to authorize any of the actions set forth above in this
subsection (f); or
(g) Any judgment or order for the payment of money in excess of
$10,000,000 shall be rendered against the Account Party or its properties,
or any Principal Subsidiary or its properties, and either (i) enforcement
proceedings shall have been commenced by any creditor upon such judgment or
order and shall not have been stayed or (ii) there shall be any period of
30 consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect;
or
(h) Any material provision of any Loan Document or any Related
Document shall for any reason other than the express terms thereof or the
exercise of any right or option expressly contained therein cease to be
valid and binding on the Account Party, or shall be determined to be
invalid or unenforceable by any court, governmental agency or authority
having jurisdiction over the Account Party, or the Account Party shall deny
that it has any further liability or obligation under this Agreement or any
Related Document, or any party to a Related Document shall so assert in
writing; provided, that in the case of any party other than the Account
Party making such assertion in respect of any Related Document, such
assertion shall not in and of itself constitute an Event of Default
hereunder until (i) such asserting party shall cease to perform under and
in compliance with such Related Document, (ii) the Account Party shall fail
to diligently prosecute, by appropriate action or proceedings, a rescission
of such assertion or a binding determination as to the merits thereof or
(iii) such a binding determination shall have been made in favor of such
asserting party's position; or
(i) The Security Documents shall for any reason, except to the
extent permitted by the terms thereof, fail or cease to create valid and
perfected Liens (to the extent purported to be granted by such documents
and subject to the exceptions permitted thereunder) in any of the
Collateral (other than Liens in favor of the Trustee with respect to the
interests of the Issuer under the Indenture Documents), provided, that such
failure or cessation relating to any non-material portion of such
Collateral shall not constitute an Event of Default hereunder unless the
same shall not have been corrected within 30 days after the Account Party
becomes aware thereof; or
(j) NU shall cease to own 100% of the issued and outstanding
shares of the capital stock of the Account Party having ordinary voting
power for the election of directors, free and clear of any Liens; or
(k) An event of default (as defined therein) shall have occurred
and be continuing under the Indenture Documents.
SECTION 8.02. Remedies Upon Events of Default. Upon the
occurrence and during the continuance of any Event of Default, then, and in
any such event, the Agent with the concurrence of the Issuing Bank and the
Majority Lenders may, and upon the direction of the Issuing Bank and the
Majority Lenders the Agent shall (i) if the Letter of Credit shall not have
been issued, instruct the Issuing Bank to (whereupon the Issuing Bank
shall) by notice to the Account Party declare its commitment to issue the
Letter of Credit to be terminated, whereupon the same shall forthwith
terminate, (ii) if the Letter of Credit shall have been issued, instruct
the Issuing Bank to (whereupon the Issuing Bank shall) furnish to the
Trustee and the Paying Agent, at their respective corporate trust offices
as provided in the Indenture Documents, written notice of such Event of
Default in accordance with Section 8.1(A)(4)(1) of the Indenture and of the
Issuing Bank's determination to terminate the Letter of Credit on the fifth
business day (as defined in the Indenture) following the Trustee's and
Paying Agent's receipt of such written notice, (iii) if the Letter of
Credit shall have been issued, instruct the Issuing Bank to (whereupon the
Issuing Bank shall) furnish to the Trustee and the Paying Agent written
notice that the Interest Component will not be reinstated in the amount of
one or more Interest Drawings, all as provided in the Letter of Credit;
(iv) declare the Advances and all other principal amounts outstanding
hereunder, all interest thereon and all other amounts payable hereunder to
be forthwith due and payable, whereupon the Advances and all other
principal amounts outstanding hereunder, all such interest and all such
other amounts shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Account Party, and (v) instruct the
Issuing Bank to (whereupon the Issuing Bank shall) exercise all the rights
and remedies provided herein and under and in respect of the Security
Documents; provided, however, that in the event of the occurrence of any
Event of Default described in Section 8.01(f) with respect to the Account
Party, (A) the commitment of the Issuing Bank to issue the Letter of Credit
and the Commitments and the obligations of the Participating Banks to make
Advances shall automatically be terminated, and (B) the Advances and all
other principal amounts outstanding hereunder, all interest accrued and
unpaid thereon and all other amounts payable hereunder shall automatically
become due and payable, without presentment, demand, protest or any notice
of any kind, all of which are hereby expressly waived by the Account Party.
ARTICLE IX
THE AGENT, THE PARTICIPATING BANKS AND THE ISSUING BANKX
SECTION 9.01. Authorization of Agent; Actions of Agent and
Issuing Bank. The Issuing Bank and each Participating Bank hereby appoint
and authorize the Agent to take such action as agent on their behalf and to
exercise such powers under this Agreement as are delegated to the Agent by
the terms hereof, together with such powers as are reasonably incidental
thereto; provided, however, that neither the Agent nor the Issuing Bank
shall be required to take any action which exposes the Agent or the Issuing
Bank to personal liability or which is contrary to this Agreement or
applicable law. As to any matters not expressly provided for by any
Related Document (including, without limitation, enforcement or collection
thereof), neither the Agent nor the Issuing Bank shall be required to
exercise any discretion or take any action. The Agent agrees to deliver
promptly (i) to the Issuing Bank and each Participating Bank copies of each
notice delivered to it by the Account Party and (ii) to each Participating
Bank copies of each notice delivered to it by the Issuing Bank, in each
case pursuant to the terms of this Agreement.
SECTION 9.02. Reliance, Etc. Neither the Agent, the Issuing
Bank, nor any of their directors, officers, agents or employees shall be
liable for any action taken or omitted to be taken by it or them under or
in connection with this Agreement or any Related Document, except for its
or their own gross negligence or willful misconduct as determined by a
court of competent jurisdiction. Without limitation of the generality of
the foregoing, each of the Agent and the Issuing Bank (i) may consult with
legal counsel (including counsel for the Account Party), independent public
accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken in good faith by it in accordance
with the advice of such counsel, accountants or experts; (ii) makes no
warranty or representation to any Participating Bank and shall not be
responsible to any Participating Bank for any statements, warranties or
representations made in or in connection with this Agreement or any Related
Document; (iii) shall not have any duty to ascertain or to inquire as to
the performance or observance of any of the terms, covenants or conditions
of this Agreement or any Related Document on the part of the Account Party
to be performed or observed, or to inspect any property (including the
books and records) of the Account Party; (iv) shall not be responsible to
any Participating Bank for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any
Related Document or any other instrument or document furnished pursuant
hereto and thereto; and (v) shall incur no liability under or in respect of
this Agreement or any Related Document by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telegram, cable
or telex), including, without limitation, any thereof from time to time
purporting to be from the Trustee, believed by it to be genuine and signed
or sent by the proper party or parties.
SECTION 9.03. The Agent, the Issuing Bank and Affiliates. The
Agent and the Issuing Bank shall have the same rights and powers under this
Agreement as any other Participating Bank and may exercise (or omit from
exercising) the same as though they were not the Agent and the Issuing
Bank, respectively, and the term Participating Bank shall, unless
otherwise expressly indicated, include UBS in its individual capacity. The
Agent, the Issuing Bank and their respective Affiliates may accept deposits
from, lend money to, act as trustee under indentures of, and generally
engage in any kind of business with, the Account Party, any of its
subsidiaries and any Person who may do business with or own securities of
the Account Party or any such subsidiary, all as if UBS was not the Agent
or the Issuing Bank, and without any duty to account therefor to the
Participating Banks.
SECTION 9.04. Participating Bank Credit Decision. Each of the
Issuing Bank and each Participating Bank acknowledges that it has,
independently and without reliance upon the Agent, the Issuing Bank or any
other Participating Bank and based on the financial information referred to
in Section 6.01(f) hereof and such other documents and information as it
has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each of the Issuing Bank and each Participating Bank
also acknowledges that it will, independently and without reliance upon the
Agent, the Issuing Bank or any other Participating Bank and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under this Agreement.
SECTION 9.05. Indemnification. The Participating Banks agree to
indemnify the Agent and the Issuing Bank (to the extent not reimbursed by
the Account Party), ratably according to their respective Participation
Percentages, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against the Agent or the Issuing Bank in any way
relating to or arising out of this Agreement or any action taken or omitted
by the Agent or the Issuing Bank under this Agreement, provided that no
Participating Bank shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Agent's or the Issuing Bank's
gross negligence or willful misconduct. Without limitation of the
foregoing, each Participating Bank agrees to reimburse the Agent and the
Issuing Bank promptly upon demand for its ratable share of any amounts for
which the Agent and the Issuing Bank are entitled to reimbursement or
indemnity pursuant to Section 10.04 hereof but are not reimbursed by the
Account Party.
SECTION 9.06. Successor Agent. The Agent may resign at any time
by giving written notice thereof to the Issuing Bank, the Participating
Banks and the Account Party, with any such resignation to become effective
only upon the appointment of a successor Agent pursuant to this Section
9.06. Upon any such resignation, the Issuing Bank shall have the right to
appoint a successor Agent, which shall be another commercial bank or trust
company reasonably acceptable to the Account Party, organized or licensed
under the laws of the United States, or of any State thereof. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent and
the execution and delivery by the Account Party and the successor Agent of
an agreement relating to the fees, if any, to be paid to the successor
Agent in connection with its acting as Agent hereunder, such successor
Agent shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Agent, and the retiring Agent
shall be discharged from its duties and obligations under this Agreement.
After any retiring Agent's resignation hereunder as Agent, the provisions
of this Article IX shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under this Agreement.
SECTION 9.07. Issuing Bank. (a) All notices received by the
Issuing Bank pursuant to this Agreement or any Related Document (other than
the Letter of Credit) shall be promptly delivered to the Agent for
distribution to the Participating Banks.
(b) The Issuing Bank shall not amend or waive any provision
or consent to the amendment or waiver of any Related Document without the
written consent of the Majority Lenders.
(c) Upon receipt by the Issuing Bank from time to time of any
amount pursuant to the terms of any Related Document (other than pursuant
to the terms of this Agreement), the Issuing Bank shall promptly deliver to
the Agent such amount.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Pledge Agreement, nor consent to any
departure by the Account Party therefrom, shall in any event be effective
unless the same shall be in writing and signed by the Majority Lenders, and
then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided, however,
that no amendment, waiver or consent shall, unless in writing and signed by
the Issuing Bank and all the Participating Banks, do any of the following:
(a) waive, modify or eliminate any of the conditions specified in Article
V, (b) increase the Commitments of the Participating Banks that may be
maintained hereunder or subject the Participating Banks to any additional
obligations, (c) reduce the principal of, or interest on, the Advances, any
amount reimbursable on demand pursuant to Section 3.01, or any fees or
other amounts payable hereunder, (d) postpone any date fixed for any
payment of principal of, or interest on, the Advances, such reimbursable
amounts or any fees or other amounts payable hereunder (other than fees
payable to the Issuing Bank or the Agent pursuant to Section 2.03(b)
hereof), (e) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Advances, or the number of Participating
Banks which shall be required for the Participating Banks or any of them to
take any action hereunder, (f) amend this Agreement or the Pledge Agreement
in a manner intended to prefer one or more Participating Banks over any
other Participating Banks, (g) amend this Section 10.01, or (h) release any
of the Collateral otherwise than in accordance with any provisions for such
release contained in the Security Documents, or change any provision of any
Security Document providing for the release of all or substantially all of
the Collateral; and provided, further, that no amendment, waiver or consent
shall, unless in writing and signed by the Issuing Bank or the Agent in
addition to the Participating Banks required above to take such action,
affect the rights or duties of the Issuing Bank or the Agent, as the case
may be, under this Agreement or the Pledge Agreement.
SECTION 10.02. Notices, Etc. All notices and other
communications provided for hereunder and under the other Loan Documents
shall be in writing (including telegraphic, telex, telecopy or cable
communication) and mailed, telegraphed, telexed, telecopied, cabled or
delivered:
(i) if to the Account Party, to it in care of
Northeast Utilities Service Company at 107 Selden Street, Berlin,
Connecticut 06037 (telecopy: (203) 665-5457), Attention: Assistant
Treasurer;
(ii) if to the Issuing Bank or the Agent, to it at its
address at 299 Park Avenue, New York, New York 10171-0026 Attention: Loan
Servicing Department, James Brodus (telephone: (212) 715-3227, telecopy:
(212) 715-3891), with a copy to Christopher W. Criswell, (telephone: (212)
715-3317, telecopy: (212) 715- 3878);
(iii) if to any Participating Bank, to it at its
address set forth on the signature pages hereof or in the Participation
Assignment pursuant to which it became a Participating Bank; or as to each
party other than any Participating Bank, at such other address as shall be
designated by such party in a written notice to the other parties, and, as
to any Participating Bank, at such other address as shall be designated by
such Participating Bank in a written notice to the Account Party and the
Agent. All such notices and communications shall, when mailed,
telegraphed, telexed, telecopied or cabled, be effective five days after
when deposited in the mails, or when delivered to the telegraph company,
confirmed by telex answerback, telecopied or delivered to the cable
company, respectively, except that notices and communications to the Agent
or the Issuing Bank pursuant to Article II, III or IV shall not be
effective until received by the Agent or the Issuing Bank, as the case may
be.
SECTION 10.03. No Waiver of Remedies. No failure on the part of
any Participating Bank or the Issuing Bank to exercise, and no delay in
exercising, any right hereunder or under any Loan Document shall operate as
a waiver thereof; nor shall any single or partial exercise of any such
right preclude any other or further exercise thereof or the exercise of any
other right. The remedies herein provided are cumulative and not exclusive
of any remedies provided by law.
SECTION 10.04. Costs, Expenses and Indemnification. (a) The
Account Party agrees to pay on demand all costs and expenses, if any
(including, without limitation, reasonable counsel fees and expenses
including, in the case of clause (ii) below, the reasonable allocated cost
of internal counsel), of (i) the Agent and the Issuing Bank in connection
with the preparation, negotiation, execution and delivery of the Loan
Documents and the administration of the Loan Documents, the care and
custody of any and all collateral, and any proposed modification,
amendment, or consent relating thereto; and (ii) the Agent, the Issuing
Bank and each Participating Bank in connection with the enforcement
(whether through negotiations, legal proceedings or otherwise) of this
Agreement, the Second Mortgage or any other Loan Document.
(b) The Account Party hereby agrees to indemnify and hold the
Agent, the Issuing Bank and each Participating Bank and their respective
officers, directors, employees, professional advisors and affiliates (each,
an Indemnified Person ) harmless from and against any and all claims,
damages, losses, liabilities, costs or expenses (including reasonable
attorney's fees and expenses, whether or not such Indemnified Person is
named as a party to any proceeding or investigation or is otherwise
subjected to judicial or legal process arising from any such proceeding or
investigation) which any of them may incur or which may be claimed against
any of them by any person or entity (except to the extent such claims,
damages, losses, liabilities, costs or expenses arise from the gross
negligence or willful misconduct of the Indemnified Person):
(i) by reason of or in connection with the execution,
delivery or performance of any of the Loan Documents, the Second Mortgage
or the Related Documents or any transaction contemplated thereby, or the
use by the Account Party of the proceeds of any Advance or the use by the
Paying Agent or the Trustee of the proceeds of any drawing under the Letter
of Credit;
(ii) in connection with or resulting from the utilization,
storage, disposal, treatment, generation, transportation, release or
ownership of any Hazardous Substance (A) at, upon or under any property of
the Account Party or any of its Affiliates or (B) by or on behalf of the
Account Party or any of its Affiliates at any time and in any place;
(iii) in connection with any documentary taxes,
assessments or charges made by any governmental authority by reason of the
execution and delivery of any of the Loan Documents or the Second Mortgage;
(iv) by reason of or in connection with the execution
and delivery or transfer of, or payment or failure to make payment under,
the Letter of Credit; provided, however, that the Account Party shall not
be required to indemnify the Agent, the Issuing Bank or any Participating
Bank pursuant to this Section for any claims, damages, losses, liabilities,
costs or expenses to the extent caused by (A) the Issuing Bank's willful
misconduct or gross negligence, as determined by a court of competent
jurisdiction, in determining whether documents presented under the Letter
of Credit are genuine or comply with the terms of the Letter of Credit or
(B) the Issuing Bank's willful or grossly negligent failure, as determined
by a court of competent jurisdiction, to make lawful payment under the
Letter of Credit after the presentation to it by the Paying Agent of a
draft and certificate strictly complying with the terms and conditions of
the Letter of Credit; or
(v) by reason of any inaccuracy or alleged inaccuracy in
any material respect, or any untrue statement or alleged untrue statement
of any material fact, contained in any Preliminary Official Statement or
Official Statement relating to the Bonds or any amendment or supplement
thereto, except to the extent contained in or arising from information in
any Preliminary Official Statement or Official Statement relating to the
Bonds supplied in writing by and describing the Issuing Bank.
(c) Nothing contained in this Section 10.04 is intended to limit
the Account Party's obligations set forth in Articles II, III and IV. The
Account Party's obligations under this Section 10.04 shall survive the
creation and sale of any participation interest pursuant to Section 10.06
hereof and shall survive as well the repayment of all amounts owing to the
Agent, the Issuing Bank and the Participating Banks under the Loan
Documents and the termination of the Commitments. If and to the extent
that the obligations of the Account Party under this Section 10.04 are
unenforceable for any reason, the Account Party agrees to make the maximum
contribution to the payment and satisfaction thereof which is permissible
under applicable law.
SECTION 10.05. Right of Set-off. (a) Upon (i) the occurrence
and during the continuance of any Event of Default and (ii) the taking of
any action or the giving of any instruction by the Agent as specified by
Section 8.02 hereof, the Issuing Bank and each Participating Bank are
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by the Issuing Bank or such Participating
Bank to or for the credit or the account of the Account Party against any
and all of the obligations of the Account Party now or hereafter existing
under this Agreement in favor of the Issuing Bank or such Participating
Bank, irrespective of whether or not the Issuing Bank or such Participating
Bank shall have made any demand under this Agreement and although such
obligations may be unmatured. The Issuing Bank and each Participating Bank
agrees promptly to notify the Account Party after any such set-off and
application provided that the failure to give such notice shall not affect
the validity of such set-off and application. The rights of the Issuing
Bank and each Participating Bank under this Section are in addition to
other rights and remedies (including, without limitation, other rights of
set-off) which the Issuing Bank and/or such Participating Bank may have.
(b) The Account Party agrees that it shall have no right of
off-set, deduction or counterclaim in respect of its obligations hereunder,
and that the obligations of the Issuing Bank and of the several
Participating Banks hereunder are several and not joint. Nothing contained
herein shall constitute a relinquishment or waiver of the Account Party's
rights to any independent claim that the Account Party may have against the
Issuing Bank or any Participating Bank, but no Participating Bank shall be
liable for the conduct of the Issuing Bank or any other Participating Bank,
and the Issuing Bank shall not be liable for the conduct of any
Participating Bank.
SECTION 10.06. Binding Effect; Assignments and Participants.
(a) This Agreement shall become effective when it shall have been executed
and delivered by the Account Party, the Agent, the Issuing Bank and each
Participating Bank named on the signature pages hereto and thereafter shall
be binding upon and inure to the benefit of the Account Party, the Agent,
the Issuing Bank and each Participating Bank and their respective
successors and assigns, except that the Account Party shall not have the
right to assign its rights hereunder or any interest herein nor transfer
any of its obligations without the prior written consent of the Issuing
Bank and each Participating Bank, and the Issuing Bank may not assign its
commitment to issue the Letter of Credit or its obligations under or in
respect of the Letter of Credit.
(b) Each Participating Bank may assign all or any portion of its
rights and transfer its obligations under this Agreement, under the Letter
of Credit or in any security hereunder, including, without limitation, any
instruments securing the Account Party's obligations hereunder; provided
that (i) no assignment by any Participating Bank may be made to any Person,
except with the prior written consent of (A) the Account Party (which
consent shall not be unreasonably withheld and, in the case of an
assignment to another Participating Bank or to an Affiliate of a
Participating Bank, shall not be required) and (B) the Issuing Bank, (ii)
any assignment shall be of a constant and not a varying percentage of all
of the assignor's rights and obligations hereunder and (iii) the parties to
each such assignment shall execute and deliver to the Agent a Participation
Assignment, together with a processing fee of $3,000. Upon receipt of a
completed Participation Assignment and the processing fee, the Agent will
record in a register maintained for such purpose the name of the assignee
and the percentage participation interest assigned by the assignor and
assumed by the assignee for purposes of the determination of such
assignor's and assignee's respective Participation Percentages. Upon such
execution, delivery, acceptance and recording, from and after the effective
date specified in each Participation Assignment, which effective date shall
be at least five Business Days after the execution thereof, the assignee
shall, to the extent of such assignment, become a party hereto and have all
of the rights and obligations of a Participating Bank hereunder and, to
the extent of such assignment, such assigning Participating Bank shall be
released from its obligations hereunder (without relieving such
Participating Bank from any liability for damages, costs and expenses
suffered by the Issuing Bank or the Account Party as a result of the
failure by such Participating Bank to perform its obligations hereunder).
(c) Each Participating Bank may grant participations to one or
more Persons in all or any part of, or any interest (undivided or divided)
in, such Participating Bank's rights and obligations under this Agreement
(any such Person being referred to hereinafter as a Participant and such
interests are collectively, referred to hereinafter as the Rights );
provided, however, that (i) such Participating Bank's obligations under
this Agreement shall remain unchanged; (ii) any such Participant shall be
entitled to the benefits and cost protections provided for in Section 4.03
hereof on the same basis as if it were a Participating Bank hereunder;
(iii) the Account Party, the Agent and the Issuing Bank shall continue to
deal solely and directly with such Participating Bank in connection with
such Participating Bank's rights and obligations under this Agreement; and
(iv) no such Participant, other than an Affiliate of such Participating
Bank, shall be entitled to require such Participating Bank to take or omit
to take any action hereunder, unless such action or omission would have an
effect of the type described in subsections (c), (d) or (h) of Section
10.01 hereof.
(d) Notwithstanding anything contained in this Section 10.06 to
the contrary, the Issuing Bank and any Participating Bank may assign and
pledge all or any portion of the Advances (or participating interests
therein) owing to the Issuing Bank or such Participating Bank to any
Federal Reserve Bank (and its transferees) as collateral security pursuant
to Regulation A of the Board of Governors of the Federal Reserve System and
any Operating Circular issued by such Federal Reserve Bank. No such
assignment shall release the Issuing Bank or such Participating Bank from
its obligations hereunder.
SECTION 10.07. Relation of the Parties; No Beneficiary. No
term, provision or requirement, whether express or implied, of any Loan
Document, or actions taken or to be taken by any party thereunder, shall be
construed to create a partnership, association, or joint venture between
such parties or any of them. No term or provision of the Loan Documents
shall be construed to confer a benefit upon, or grant a right or privilege
to, any Person other than the parties hereto.
SECTION 10.08. Issuing Bank Not Liable. As between the Agent,
the Issuing Bank and the Participating Banks on the one hand, and the
Account Party on the other, the Account Party assumes all risks of the acts
or omissions of the Paying Agent, the Trustee and any other beneficiary or
transferee of the Letter of Credit with respect to its use of the Letter of
Credit. Neither the Agent, the Issuing Bank, any Participating Bank, nor
any of their respective officers or directors shall be liable or
responsible for: (a) the use which may be made of the Letter of Credit or
any acts or omissions of the Paying Agent, the Trustee and any other
beneficiary or transferee in connection therewith; (b) the validity,
sufficiency or genuineness of documents, or of any endorsement thereon,
even if such documents should prove to be in any or all respects invalid,
insufficient, fraudulent or forged; (c) payment by the Issuing Bank against
presentation of documents which do not comply with the terms of the Letter
of Credit, including failure of any documents to bear any reference or
adequate reference to the Letter of Credit; or (d) any other circumstances
whatsoever in making or failing to make payment under the Letter of Credit,
except that the Account Party shall have a claim against the Issuing Bank,
and the Issuing Bank shall be liable to the Account Party, to the extent of
any direct, as opposed to consequential, damages suffered by the Account
Party which the Account Party proves were caused by (i) the Issuing Bank's
willful misconduct or gross negligence, as determined by a court of
competent jurisdiction, in determining whether documents presented under
the Letter of Credit are genuine or comply with the terms of the Letter of
Credit or (ii) the Issuing Bank's willful or grossly negligent failure, as
determined by a court of competent jurisdiction, to make lawful payment
under the Letter of Credit after the presentation to it by the Paying Agent
of a draft and certificate strictly complying with the terms and conditions
of the Letter of Credit. In furtherance and not in limitation of the
foregoing, the Issuing Bank may accept original or facsimile (including
telecopy) sight drafts and accompanying certificates presented under the
Letter of Credit that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary.
SECTION 10.09. Confidentiality. In connection with the
negotiation and administration of this Agreement and the other Loan
Documents, the Account Party has furnished and will from time to time
furnish to the Agent, the Issuing Bank and the Participating Banks (each, a
Recipient ) written information which is identified to the Recipient when
delivered as confidential (such information, other than any such
information which (i) was publicly available, or otherwise known to the
Recipient, at the time of disclosure, (ii) subsequently becomes publicly
available other than through any act or omission by the Recipient or (iii)
otherwise subsequently becomes known to the Recipient other than through a
Person whom the Recipient knows to be acting in violation of his or its
obligations to the Account Party, being hereinafter referred to as
Confidential Information ). The Recipient will not knowingly disclose any
such Confidential Information to any third party (other than to those
Persons who have a confidential relationship with the Recipient), and will
take all reasonable steps to restrict access to such information in a
manner designed to maintain the confidential nature of such information, in
each case until such time as the same ceases to be Confidential Information
or as the Account Party may otherwise instruct. It is understood, however,
that the foregoing will not restrict the Recipient's ability to freely
exchange such Confidential Information with prospective assignees of or
participants in the Recipient's position herein, but the Recipient's
ability to so exchange Confidential Information shall be conditioned upon
any such prospective assignee's or participant's entering into an
understanding as to confidentiality similar to this provision. It is
further understood that the foregoing will not prohibit the disclosure of
any or all Confidential Information in any litigation or proceedings
between the Account Party and such Recipient and/or if and to the extent
that such disclosure may be required (i) by a regulatory agency or
otherwise in connection with an examination of the Recipient's records by
appropriate authorities, (ii) pursuant to court order, subpoena or other
legal process or (iii) otherwise, as required by law; in the event of any
required disclosure under clause (ii) or (iii), above, the Recipient agrees
to use reasonable efforts to inform the Account Party as promptly as
practicable unless the Recipient is prohibited from doing so by court
order, subpoena or other legal process.
SECTION 10.10 Waiver of Jury Trial. The Account Party, the
Agent, the Issuing Bank, and the Participating Banks each hereby
irrevocably waives all right to trial by jury in any action, proceeding or
counterclaim arising out of or relating to this Agreement or any other Loan
Document, or any other instrument or document delivered hereunder or
thereunder.
SECTION 10.11. Governing Law. This Agreement and the Pledge
Agreement shall be governed by, and construed in accordance with, the laws
of the State of New York. The Account Party, the Agent, the Issuing Bank
and each Participating Bank each (i) irrevocably submits to the
jurisdiction of any New York State court or Federal court sitting in New
York City in any action arising out of any Loan Document, (ii) agrees that
all claims in such action may be decided in such court, (iii) waives, to
the fullest extent it may effectively do so, the defense of an inconvenient
forum and (iv) consents to the service of process by mail. A final
judgment in any such action shall be conclusive and may be enforced in
other jurisdictions. Nothing herein shall affect the right of any party to
serve legal process in any manner permitted by law or affect its right to
bring any action in any other court.
SECTION 10.12. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one and the
same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
THE ACCOUNT PARTY:
THE CONNECTICUT LIGHT AND
POWER COMPANY
By /s/Bruce F. Garelick
Title: Assistant Treasurer
THE AGENT AND ISSUING BANK:
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH,
as Agent and as Issuing Bank
By /s/Christopher W. Criswell
Title: Vice President
By /s/Laura Monroe Singer
Title: Assistant Treasurer
THE PARTICIPATING BANKS:
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH
By /s/Christopher W. Criswell
Title: Vice President
By /s/Laura Monroe Singer
Title: Assistant Treasurer
Participation Percentage: 100%
Address for Notices
Union Bank of Switzerland,
New York Branch
299 Park Avenue
New York, New York 10171-0026
Attention: Loan Servicing
Dept., James Brodus
Telephone: (212) 715-3227
Fax: (212) 715-3891
With a Copy To:
Attention: Christopher W. Criswell
Telephone: (212) 715-3317
Fax: (212) 715-3878
SCHEDULE I
APPLICABLE LENDING OFFICES
Name of Domestic
Participating Bank Lending Office
Union Bank of Switzerland, 299 Park Avenue
New York Branch New York, NY 10022
Attn: Loan Servicing
Dept., James Brodus
Tel: (212) 715-3227
Fax: (212) 715-3891
with a copy to:
Christopher W. Criswell
Tel: (212) 715-3317
Fax: (212) 715-3878
SCHEDULE II
PENDING ACTIONS
NONE
[Form of Letter of Credit - CDA/CL&P SERIES B]
EXHIBIT 1.01A
IRREVOCABLE LETTER OF CREDIT
NO. SBY502181
September 22, 1993
Shawmut Bank Connecticut, National Association
777 Main Street
Hartford, Connecticut 06115
Attention: Corporate Trust Department
Dear Sir or Madam:
We hereby establish, at the request and for the account of The
Connecticut Light and Power Company (the "Account Party"), in your favor,
as Paying Agent (the "Paying Agent") under that certain Indenture of Trust,
dated as of September 1, 1993 (the "Indenture"), by and between the
Connecticut Development Authority (the "Issuer") and Shawmut Bank
Connecticut, National Association, as trustee (the "Trustee"), pursuant to
which $70,000,000 in aggregate principal amount of the Issuer's Pollution
Control Revenue Refunding Bonds (The Connecticut Light and Power Company
Project - 1993B Series) (the "Bonds"), are being issued, our Irrevocable
Letter of Credit No. SBY502181, in the amount of US$71,036,000.00 (SEVENTY-
ONE MILLION THIRTY-SIX THOUSAND AND NO ONE-HUNDREDTHS UNITED STATES
DOLLARS) (subject to reduction and reinstatement as provided below).
(1) Credit Termination Date. This Letter of Credit shall expire on
the earliest to occur of (i) September 22, 1996 (the "Stated Termination
Date"), (ii) the date upon which we honor a draft accompanying a written
and completed certificate signed by you in substantially the form of
Exhibit 2 attached hereto, and stating therein that such draft is the final
draft to be drawn under this Letter of Credit and that, upon the honoring
of such draft, this Letter of Credit will expire in accordance with its
terms, (iii) the date upon which we receive a written certificate signed by
you and stating therein that no Bonds entitled to the benefits of this
Letter of Credit (as determined in accordance with the Indenture)
("Eligible Bonds") are "Outstanding" under (and as defined in) the
Indenture, (iv) the fifth business day following receipt by you and the
Trustee of written notice from us that an Event of Default (as defined
below) has occurred under the Reimbursement Agreement (as defined below)
and of our determination to terminate this Letter of Credit on such fifth
business day and (v) the date upon which we receive a written certificate
signed by you and stating therein that a substitute or replacement Credit
Facility (as defined in the Indenture) has been provided pursuant to
Section 3.12 of the "Agreement" referred to (and as defined) in the
Indenture (such earliest date being the "Credit Termination Date").
As used herein, the term "business day" shall mean any day of the year
(i) that is not a Saturday or Sunday, (ii) that is a day on which banks
located in Hartford, Connecticut and New York, New York are not required or
authorized to remain closed and (iii) that is a day on which banking
institutions in all of the cities in which the principal offices of the
Trustee, the Paying Agent and the Remarketing Agent (as defined in the
Indenture) are located are not required or authorized to remain closed and
(iv) that is a day on which the New York Stock Exchange, Inc. is not
closed.
As used herein "Reimbursement Agreement" shall mean the Letter of
Credit and Reimbursement Agreement, dated as of September 1, 1993, between
the Account Party, us and certain Participating Banks referred to therein,
and the term "Event of Default" shall mean an "Event of Default" as that
term is defined in the Reimbursement Agreement.
(2) Principal, Interest and Premium Components. The aggregate amount
which may be drawn under this Letter of Credit, subject to reductions in
amount and reinstatement as provided below, is US$71,036,000.00 (SEVENTY-
ONE MILLION THIRTY-SIX THOUSAND AND NO ONE-HUNDREDTHS UNITED STATES
DOLLARS), of which the aggregate amounts set forth below may be drawn as
indicated.
(i) An aggregate amount not exceeding US$70,000,000.00 ( SEVENTY
MILLION AND NO ONE-HUNDREDTHS UNITED STATES DOLLARS), as such amount
may be reduced and reinstated as provided below, may be drawn in
respect of payment of principal (whether upon scheduled or accelerated
maturity, or upon redemption) of Eligible Bonds or the portion of the
purchase price of Eligible Bonds corresponding to principal (the
"Principal Component").
(ii) An aggregate amount not exceeding US$1,036,000.00 (ONE
MILLION THIRTY-SIX THOUSAND AND NO ONE-HUNDREDTHS UNITED STATES
DOLLARS), as such amount may be reduced and reinstated as provided
below, may be drawn in respect of payment of (A) accrued and unpaid
interest on Eligible Bonds not in the Flexible Mode (as defined in the
Indenture) or that portion of the redemption price or purchase price
of such Eligible Bonds corresponding to accrued and unpaid interest,
but not more than an amount equal to accrued and unpaid interest on
such Eligible Bonds for up to a maximum of 45 days immediately
preceding the date of such drawing and (B) unpaid interest (whether
accrued or to accrue) on Eligible Bonds in the Flexible Mode or that
portion of the redemption price or purchase price of such Eligible
Bonds corresponding to such interest, but not more than an amount
equal to such interest on such Eligible Bonds for up to a maximum of
45 days immediately preceding the next Purchase Date (as defined in
the Indenture) for each such Eligible Bond (or, if interest on any
such Eligible Bond was not paid on the most recent Purchase Date for
such Bond, for up to a maximum of 45 days immediately preceding the
date of such drawing), calculated, in each case referred to in the
foregoing clause (A) or clause (B) at a maximum rate of twelve percent
(12%) per annum, or such lesser rate of interest as shall equal the
Maximum Interest Rate (as defined in the Indenture) in effect under
the Indenture with respect to such Eligible Bonds, and in any case
calculated on the basis of a year of 365 or 366 days (as applicable)
for the actual days elapsed (the "Interest Component").
(iii) An aggregate amount not exceeding US$0.00 (ZERO UNITED
STATES DOLLARS) may be drawn in respect of premium on Eligible Bonds
(the "Premium Component"). If, subsequent to the date hereof, the
Premium Component shall be increased by us at the request of the
Account Party, the Premium Component shall be subject to reduction as
provided below, and amounts drawn in respect thereof shall not be
subject to reinstatement.
(3) Drawings. Funds under this Letter of Credit are available to you
against (i) your draft, stating on its face: "Drawn under Irrevocable
Letter of Credit No. SBY502181, dated September 22, 1993", and (ii) the
appropriate certificate specified below, purportedly executed by you and
appropriately completed.
Exhibit Setting Forth
Type of Drawing Form of Certificate Required
Tender Drawing Exhibit 1
(as hereinafter defined)
Redemption/Mandatory Exhibit 2
Purchase Drawing
(as hereinafter defined)
Interest Drawing Exhibit 3
(as hereinafter
defined)
Drafts and certificates hereunder shall be dated the date of
presentation and shall be presented at our office located at 299 Park
Avenue, New York, New York 10171-0026 Attention: Loan Servicing
Department, James Brodus (telephone: (212) 715-3227) (or at such other
office as we may designate by written notice to you) with a copy to
Christopher W. Criswell (telephone: (212) 715-3317), FAX: (212) 715-3878).
Presentation of such drafts and certificates may be made (a) by physical
presentation of such drafts and certificates or (b) by facsimile
transmission of such drafts and certificates received by us at (212) 715-
3891 (or at such other number as we may designate by written notice to you)
with prior telephone notice to us at (212) 715-3227, Attention: James
Brodus, (or at such other number as we may designate by written notice to
you; in any event with a copy to Christopher W. Criswell as aforesaid) that
such presentation is to be made by facsimile transmission and with the
original executed drafts and certificates to be received by us not later
than our close of business on the next business day, it being understood
that payments hereunder shall be made upon receipt by us of such facsimile
transmission; provided, however, that presentations of drafts and
certificates relating to Tender Drawings in respect of Eligible Bonds in
the Flexible Mode shall in all instances be made in accordance with the
foregoing clause (b). Drafts drawn under and in strict compliance with the
terms of this Letter of Credit will be duly honored by us upon presentation
thereof in accordance with this Paragraph 3 if presented on or prior to
4:00 P.M. (New York City time) on the Credit Termination Date as follows:
(i) Tender Drawings; Flexible Mode. In the case of drafts and
certificates relating to Tender Drawings in respect of Eligible Bonds
in the Flexible Mode presented in accordance with the foregoing clause
(b):
(A) if such drafts and certificates are presented as
aforesaid at or prior to 1:30 P.M. (New York City time) on a
business day, and provided that such drafts and certificates
strictly conform to the requirements of this Letter of Credit, we
will initiate a wire transfer of the amount so drawn to your
account indicated below at or prior to 3:30 P.M. (New York City
time) on the same business day;
(B) if such drafts and certificates are presented as
aforesaid after 1:30 P.M. but at or prior to 4:00 P.M. (New York
City time) on a business day, and provided that such drafts and
certificates strictly conform to the requirements of this Letter
of Credit, we will initiate a wire transfer of the amount so
drawn to your account indicated below at or prior to 10:00 A.M.
on the business day next succeeding the business day on which
such drafts and certificates were presented (notwithstanding that
such day of presentation may have been the Credit Termination
Date); and
(C) if such drafts and certificates are presented as
aforesaid after 4:00 P.M. (New York City time) on a business day,
and provided that such drafts and certificates strictly conform
to the requirements of this Letter of Credit, we will initiate a
wire transfer of the amount so drawn to your account indicated
below at or prior to 1:00 P.M. (New York City time) on the
business day next succeeding the business day on which such
drafts and certificates were presented (notwithstanding that such
day of presentation may have been the Credit Termination Date);
and
(ii) All Other Drawings: In the case of any other drafts and
certificates:
(A) if such drafts and certificates are presented as
aforesaid at or prior to 4:00 P.M. (New York City time) on a
business day, and provided that such drafts strictly conform to
the requirements of this Letter of Credit, we will initiate a
wire transfer of the amount so drawn to your account indicated
below at or prior to 10:00 A.M. (New York City time) on the
business day next succeeding the business day on which such
drafts and certificates were presented (notwithstanding that such
day of presentation may have been the Credit Termination Date);
and
(B) if such drafts and certificates are presented as
aforesaid after 4:00 P.M. (New York City time) on a business day,
and provided that such drafts and certificates strictly conform
to the requirements of this Letter of Credit, we will initiate a
wire transfer of the amount so drawn to your account indicated
below at or prior to 1:00 P.M. (New York City time) on the
business day next succeeding the business day on which such
drafts and certificates were presented (notwithstanding that such
day of presentation may have been the Credit Termination Date).
Wire transfers of funds paid in respect of any drawing hereunder shall be
made to you at Shawmut Bank Connecticut, National Association, Hartford,
Connecticut, ABA# 011900445, Account No. 0067548290 Corporate Trust Admin.
Wire Account, Attention: K. Larimore, Reference: CDA/CL&P Series 1993B, or
to such other account as you may from time to time specify to us in
writing. All payments made by us under this Letter of Credit will be made
with our own funds and not with any funds of the Account Party or the
Issuer.
(4) Reductions. The Interest Component shall be reduced immediately
following our honoring any draft drawn hereunder to pay unpaid interest on
Eligible Bonds or to pay that portion of the purchase price or redemption
price corresponding to unpaid interest on Eligible Bonds, in each case by
an amount equal to the amount of such draft (any such drawing being an
"Interest Drawing"). The Principal Component shall be reduced immediately
following our honoring any draft drawn hereunder: (i) pursuant to Section
5.8(B) of the Indenture to pay that portion of purchase price corresponding
to principal of Eligible Bonds that are (A) subject to mandatory tender for
purchase pursuant to Section 2.3(G)(1)(c) or 2.3(G)(2)(d)(ii) of the
Indenture or (B) tendered for purchase by the holders thereof pursuant to
2.3(G)(2)(c) of the Indenture, (ii) pursuant to Section 5.8(C) of the
Indenture to pay that portion of purchase price corresponding to principal
of Eligible Bonds that are the subject of a failed conversion pursuant to
Section 2.3(G)(1)(b) or 2.3(G)(2)(b) of the Indenture, as appropriate (any
such drawing in respect of the circumstances referred to in the foregoing
clause (i) or this clause (ii) being a "Tender Drawing"), (iii) pursuant to
Section 5.8(A) of the Indenture to pay the principal of Eligible Bonds or
that portion of the redemption price of Eligible Bonds corresponding to
principal, whether at stated maturity, upon acceleration or upon
redemption, or (iv) pursuant to Section 5.8(B) of the Indenture to pay that
portion of the purchase price corresponding to principal of Eligible Bonds
that are subject to mandatory tender for purchase pursuant to Section
2.3(G)(2)(d)(i) of the Indenture (any such drawing in respect of the
circumstances referred to in the foregoing clause (iii) or in this clause
(iv) being a "Redemption/Mandatory Purchase Drawing"), in each such case by
an amount equal to the amount of such draft. The Premium Component shall
be reduced immediately following our honoring any draft drawn hereunder to
pay premium on Eligible Bonds in connection with a Redemption/Mandatory
Purchase Drawing, by an amount equal to the amount of such draft.
Additionally, upon receipt of a Notice of Reduction in the form
of Exhibit 4 to this Letter of Credit purportedly executed by you, we will
reduce the Principal Component, Interest Component and Premium Component to
the amounts therein stated.
(5) Reinstatement. The Interest Component and the Principal
Component shall, from time to time, be reinstated by us in accordance with,
and only to the extent provided in, the following subparagraphs (i) and
(ii). In no event shall reductions in the Premium Component be reinstated.
(i) Interest Component. Reductions in the Interest Component
resulting from Interest Drawings shall be reinstated as follows:
(A) Immediately following each drawing hereunder to pay
unpaid interest on Eligible Bonds in the Flexible Mode or to pay
that portion of purchase price, but not redemption price,
corresponding to unpaid interest on Eligible Bonds in the
Flexible Mode, the amount so drawn shall be automatically
reinstated to the Interest Component unless, not later than the
business day preceding such drawing you shall have received
written notice from us that we will not reinstate the Interest
Component in the amount of such drawing. On the fifth day
following each drawing hereunder to pay accrued and unpaid
interest on Eligible Bonds that are not in the Flexible Mode, or
to pay that portion of purchase price, but not redemption price,
corresponding to accrued and unpaid interest on Eligible Bonds
that are not in the Flexible Mode, the amount so drawn shall be
automatically reinstated to the Interest Component, unless you
shall have theretofore received written notice from us that we
will not reinstate the Interest Component in the amount of such
drawing. Any notice of non-reinstatement delivered pursuant to
this subparagraph (i)(A) shall be in writing and shall be
delivered to you by hand delivery or facsimile transmission.
(B) If, subsequent to any such delivery of a notice of non-
reinstatement as aforesaid, we shall deliver to you, by hand
delivery or facsimile transmission, a Notice of Reinstatement in
the form of Exhibit 5 hereto, then, upon such delivery to you,
the Interest Component shall be immediately reinstated to the
extent specified in such Notice of Reinstatement.
(C) In no event shall the Interest Component be reinstated
to an amount in excess of 45 days' interest on Eligible Bonds,
computed at the rate of 12% per annum on the basis of a year of
365 or 366 days (as applicable) for the actual days elapsed, or
such lesser rate of interest as shall equal the Maximum Interest
Rate (as defined in the Indenture) in effect under the Indenture
with respect to such Eligible Bonds.
(ii) Principal Component. Reductions in the Principal Component
resulting from Redemption/Mandatory Purchase Drawings shall in no
event be reinstated. Reductions in the Principal Component resulting
from Tender Drawings shall be reinstated as follows:
(A) Immediately upon receipt by us of proceeds from the
remarketing of Pledged Bonds (as defined in the Indenture), or of
written notice from you that you have received such proceeds (or
a window receipt guaranteeing same day payment in immediately
available funds of such proceeds as contemplated by Section
9.19(A) of the Indenture), the Principal Component shall be
reinstated automatically by the amount of such proceeds.
(B) Immediately upon your receipt from us, by hand delivery
or facsimile transmission, of a Notice of Reinstatement in the
form of Exhibit 5 hereto, the Principal Component shall be
immediately reinstated to the extent specified in such Notice of
Reinstatement.
(C) In no event shall the Principal Component be reinstated
to an amount in excess of the aggregate principal amount of
Eligible Bonds then outstanding under the Indenture.
Any Notice of Reinstatement delivered to you in the form set forth in
Exhibit 5 hereto, whether delivered pursuant to subparagraph (i) or
subparagraph (ii), above, may be combined, in a single such Notice, with
any other Notice of Reinstatement delivered pursuant to the other such
subparagraph.
(6) Notices. Communications (other than drawings) with respect to
this Letter of Credit shall be in writing and shall be addressed to us at
299 Park Avenue, New York, New York 10171-0026, Attention: Loan Servicing
Department, James Brodus (telephone: (212) 715-3227, telecopy: (212) 715-
3891), with a copy to Christopher W. Criswell, (telephone: (212) 715-3317,
telecopy: (212) 715-3878), (or at such other office as we may designate by
written notice to you), specifically referring to the number of this Letter
of Credit.
(7) Transfer. This Letter of Credit is transferable in its entirety
(but not in part) to any transferee who has succeeded you as Paying Agent
under the Indenture and may be successively so transferred. Transfer of
the available balance under this Letter of Credit to such transferee shall
be effected by the presentation to us of this Letter of Credit accompanied
by a certificate substantially in form set forth in Exhibit 6.
(8) Governing Law, Etc. Except as otherwise provided herein, this
Letter of Credit shall be governed by and construed in accordance with the
Uniform Customs and Practices for Documentary Credits (1983 Revision)
Publication No. 400 of the International Chamber of Commerce ("UCP") and,
to the extent not inconsistent with the UCP, the laws of the State of New
York, including the Uniform Commercial Code as in effect in the State of
New York. This Letter of Credit sets forth in full our undertaking, and,
except as expressly set forth herein, such undertaking shall not in any way
be modified, amended, amplified or limited by reference to any document,
instrument or agreement referred to herein (including, without limitation,
the Bonds, the Indenture and the Reimbursement Agreement), except only the
certificates and the drafts referred to herein; and any such reference
shall not be deemed to incorporate herein by reference any document,
instrument or agreement except for such certificates and such drafts.
Whenever and wherever the terms of this Letter of Credit shall refer to the
purpose of a draft hereunder, or the provisions of any agreement or
document pursuant to which such draft may be presented hereunder, such
purpose or provisions shall be conclusively determined by reference to the
certificate accompanying such draft; in furtherance of this sentence,
whether any drawing is in respect of payment of regularly scheduled
interest on the Bonds or of principal of or interest on the Bonds upon
scheduled or accelerated maturity or is a Tender Drawing or a
Redemption/Mandatory Purchase Drawing shall be conclusively determined by
reference to the certificate accompanying such drawing.
Very truly yours,
UNION BANK OF SWITZERLAND, NEW
YORK BRANCH
By ___________________________________
Title:
By ___________________________________
Title:
EXHIBIT 1
TO THE LETTER OF CREDIT
CERTIFICATE FOR TENDER DRAWING
The undersigned, a duly authorized officer of ____________________,
(the "Paying Agent"), hereby certifies as follows to UNION BANK OF
SWITZERLAND, NEW YORK BRANCH (the "Bank"), with reference to Irrevocable
Letter of Credit No. SBY502181 (the "Letter of Credit") issued by the Bank
in favor of the Paying Agent. Terms defined in the Letter of Credit and
used but not defined herein shall have the meanings given them in the
Letter of Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for the
holders of the Bonds.
(2) The Paying Agent is making a Tender Drawing under the Letter of
Credit in the amount of $____________ pursuant to Section 5.8 of the
Indenture to pay that portion of the purchase price corresponding to
principal of Eligible Bonds that are
[subject to mandatory tender for purchase pursuant to Section
[2.3(G)(1)(c)] [2.3(G)(2)(d)(ii)] of the Indenture.]
[tendered for purchase by the holders thereof pursuant to Section
2.3(G)(2)(c) of the Indenture.]
[the subject of a failed conversion pursuant to Section
2.3(G)(1)(b) or 2.3(G)(2)(b) of the Indenture.]
(3) The amount of purchase price corresponding to principal of
Eligible Bonds and with respect to the payment of which the Paying Agent,
pursuant to the foregoing Sections of the Indenture, is drawing under the
Letter of Credit, is as follows, and the amount of the draft accompanying
this Certificate does not exceed such amount:
Principal: $__________________
(4) The amount of the draft accompanying this Certificate being drawn
in respect of purchase price corresponding to principal of Eligible Bonds,
as indicated in paragraph (3), above, does not exceed the Principal
Component of the Letter of Credit. The amount of the draft accompanying
this Certificate in respect of purchase price corresponding to principal of
such Bonds has been computed in accordance with the terms and conditions of
such Eligible Bonds and the Indenture.
(5) No proceeds of this drawing will be applied to the payment of
purchase price of any Bonds that are not Eligible Bonds, including any
Pledged Bonds (as defined in the Indenture), any Borrower Bonds (as defined
in the Indenture) and any Bonds in the Fixed Rate Mode (as defined in the
Indenture).
[(6) The Eligible Bonds in respect of which this drawing is being made
are Eligible Bonds in the Flexible Mode, and payment of this drawing shall
be made in accordance with Paragraph 3(i) of the Letter of Credit.]
[(6) The Eligible Bonds in respect of which this drawing is being made
are not Eligible Bonds in the Flexible Mode, and payment of this drawing
shall be made in accordance with Paragraph 3(ii) of the Letter of Credit].
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this
Certificate as of the ________ day of _______________, 19___.
[NAME OF PAYING AGENT],
as Paying Agent
By ___________________________________
Title:
EXHIBIT 2
TO THE LETTER OF CREDIT
CERTIFICATE FOR REDEMPTION/
MANDATORY PURCHASE DRAWING
The undersigned, a duly authorized officer of __________________, (the
"Paying Agent"), hereby certifies as follows to UNION BANK OF SWITZERLAND,
NEW YORK BRANCH (the "Bank"), with reference to Irrevocable Letter of
Credit No. SBY502181 (the "Letter of Credit") issued by the Bank in favor
of the Paying Agent. Terms defined in the Letter of Credit and used but
not defined herein shall have the meanings given them in the Letter of
Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for the
holders of the Bonds.
(2) The Paying Agent is making a Redemption/Mandatory Purchase
Drawing under the Letter of Credit in the amount of $______________
[pursuant to Section 5.8(A) and Section 8.5 of the Indenture to
pay the principal of Eligible Bonds due pursuant to the Indenture
upon maturity or as a result of acceleration of such Eligible
Bonds in accordance with the Indenture and the terms of such
Eligible Bonds.]
[pursuant to Section 5.8(A) of the Indenture to pay that portion
of the redemption price corresponding to principal of [and
premium on] Eligible Bonds due pursuant to the Indenture upon
redemption of such Eligible Bonds in accordance with the
Indenture and the terms of such Eligible Bonds.]
[pursuant to Section 5.8(B) of the Indenture to pay that portion
of the purchase price of Eligible Bonds corresponding to
principal that are subject to mandatory tender for purchase
pursuant to Section 2.3(G)(2)(d)(i) of the Indenture.]
(3) The amount of [principal of] [redemption price corresponding to
principal of] [and premium on] [purchase price corresponding to principal
of] Eligible Bonds which is due and payable and with respect to the payment
of which the Paying Agent, pursuant to the foregoing Section[s] of the
Indenture, is to draw under the Letter of Credit is as follows, and the
amount of the draft accompanying this Certificate does not exceed such
amount:
Principal: $__________________
[Premium: $__________________]
(4) The amount of the draft accompanying this Certificate being drawn
in respect of payment of [principal] [redemption price corresponding to
principal] [purchase price corresponding to principal] of Eligible Bonds,
as indicated in paragraph (3), above, does not exceed the Principal
Component of the Letter of Credit. [The amount of the draft accompanying
this Certificate being drawn in respect of that portion of the redemption
price of Eligible Bonds corresponding to premium, as indicated in paragraph
(3), above, does not exceed the Premium Component of the Letter of Credit.]
The amount of the draft accompanying this Certificate in respect of payment
of [principal] [redemption price corresponding to principal] [and premium]
[purchase price corresponding to principal] of such Eligible Bonds has been
computed in accordance with the terms and conditions of such Eligible Bonds
and the Indenture.
(5) No proceeds of this drawing will be applied to the payment of
principal, redemption price (including premium, if any) or purchase price
of any Bonds that are not Eligible Bonds, including any Pledged Bonds (as
defined in the Indenture), any Borrower Bonds (as defined in the
Indenture), and any Bonds in the Fixed Rate Mode (as defined in the
Indenture).
(6) Payment of this drawing shall be made in accordance with
Paragraph 3(ii) of the Letter of Credit.
[(7) The draft accompanying this Certificate is the final draft to be
drawn under the Letter of Credit, and, upon the honoring of such draft, the
Letter of Credit will expire in accordance with its terms.]
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this
Certificate as of the ________ day of _______________, 19___.
[NAME OF PAYING AGENT],
as Paying Agent
By ___________________________________
Title:
EXHIBIT 3
TO THE LETTER OF CREDIT
CERTIFICATE FOR INTEREST DRAWING
The undersigned, a duly authorized officer of __________________, (the
"Paying Agent"), hereby certifies as follows to UNION BANK OF SWITZERLAND,
NEW YORK BRANCH (the "Bank"), with reference to Irrevocable Letter of
Credit No. SBY502181 (the "Letter of Credit") issued by the Bank in favor
of the Paying Agent. Terms defined in the Letter of Credit and used but
not defined herein shall have the meanings given them in the Letter of
Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for the
holders of the Bonds.
(2) The Paying Agent is making a drawing under the Letter of Credit
in the amount of $____________ with respect to [the payment of interest]
[the payment of the portion of redemption price corresponding to interest]
[the payment of the portion of purchase price corresponding to interest] on
Eligible Bonds in accordance with the Indenture.
(3) The amount of [interest] [redemption price corresponding to
interest] [purchase price corresponding to interest] on Eligible Bonds that
is due and owing is as follows, and the amount of the draft accompanying
this Certificate does not exceed such amount:
Interest: __________________
(4) The amount of the draft accompanying this Certificate being drawn
in respect of payment of [interest] [redemption price corresponding to
interest] [purchase price corresponding to interest] on Eligible Bonds, as
indicated in paragraph (3), above, does not exceed the Interest Component
of the Letter of Credit. The amount of the draft accompanying this
Certificate in respect of payment of [interest] [redemption price
corresponding to interest] [purchase price corresponding to interest] on
Eligible Bonds has been computed in accordance with the terms and
conditions of such Eligible Bonds and the Indenture.
(5) Payment of this drawing shall be made in accordance with
Paragraph 3(ii) of the Letter of Credit.
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this
Certificate as of the ________ day of _______________, 19___.
[NAME OF PAYING AGENT],
as Paying Agent
By ___________________________________
Title:
EXHIBIT 4
TO THE LETTER OF CREDIT
NOTICE OF REDUCTION
The undersigned, a duly authorized officer of _____________________,
(the "Paying Agent"), hereby certifies as follows to UNION BANK OF
SWITZERLAND, NEW YORK BRANCH (the "Bank"), with reference to Irrevocable
Letter of Credit No. SBY502181 (the "Letter of Credit") issued by the Bank
in favor of the Paying Agent. Terms defined in the Letter of Credit and
used but not defined herein shall have the meanings given them in the
Letter of Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for
the holders of the Bonds.
(2) As of the date hereof, the aggregate principal amount of
Eligible Bonds (including for this purpose all Pledged Bonds and all
Borrower Bonds) outstanding is
Principal: $__________________
(3) You are hereby directed to reduce the [Principal] [Premium]
[and] [Interest] Components of the Letter of Credit as follows:
[The Principal Component of the Letter of Credit is reduced
to $__________________.]
[The Premium Component of the Letter of Credit is reduced to
$__________________.]
[The Interest Component of the Letter of Credit is reduced
to $__________________.]
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this
Certificate as of the ________day of _______________, 19___.
[NAME OF PAYING AGENT],
as Paying Agent
By ___________________________________
Title:
EXHIBIT 5
TO THE LETTER OF CREDIT
NOTICE OF REINSTATEMENT
The undersigned, a duly authorized officer of UNION BANK OF SWITZERLAND,
NEW YORK BRANCH (the "Bank"), hereby gives the following notice to
_________________, as paying agent (the "Paying Agent"), with reference to
Irrevocable Letter of Credit No. SBY502181 (the "Letter of Credit") issued
by the Bank in favor of the Paying Agent. Terms defined in the Letter of
Credit and used but not defined herein have the meanings given them in the
Letter of Credit.
The Bank hereby notifies you that:
[1.] [Pursuant to Paragraph 5(i)(B) of the Letter of Credit and Section
2.04(b)(ii) of the Reimbursement Agreement, the Interest Component has
been reinstated by $________________.]
[2.] [Pursuant to Paragraph 5(ii)(B) of the Letter of Credit and Section
2.04(c) of the Reimbursement Agreement, the Principal Component has
been reinstated by $_________________.]
IN WITNESS WHEREOF, the Bank has executed and delivered this Notice of
Reinstatement as of the ________ day of _______________, 19___
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH
By ___________________________________
Title:
EXHIBIT 6
TO THE LETTER OF CREDIT
INSTRUCTIONS TO TRANSFER
__________________, 19___
Re: Irrevocable Letter of Credit No. SBY502181
Gentlemen:
The undersigned, as Paying Agent under that certain Indenture of
Trust, dated as of September 1, 1993 (the "Indenture"), by and between the
Connecticut Development Authority (the "Issuer") and Shawmut Bank
Connecticut, National Association, as Trustee, is named as beneficiary in
the Letter of Credit referred to above (the "Letter of Credit"). The
Transferee named below has succeeded the undersigned as Paying Agent under
such Indenture.
___________________________________
(Name of Transferee)
___________________________________
(Address)
Therefore, for value received, the undersigned hereby irrevocably
instructs you to transfer to such Transferee all rights of the undersigned
to draw under the Letter of Credit.
Such Transferee shall hereafter have the sole rights as beneficiary
under the Letter of Credit; provided, however, that no rights shall be
deemed to have been transferred to such Transferee until such transfer
complies with the requirements of the Letter of Credit pertaining to
transfers.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Certificate as of the ________ day of _______________, 19___.
[NAME OF RETIRING PAYING AGENT],
as Paying Agent
By ___________________________________
Title:
The undersigned, [Name of Transferee], hereby accepts the
foregoing transfer of rights under the Letter of Credit.
[Name of Transferee]
By ___________________________________
Title:
Address of Principal
Corporate Trust Office:
[insert address]
EXHIBIT 1.01B
Form of
PARTICIPATION ASSIGNMENT
Dated _________________, 19__
Reference is made to the Letter of Credit and Reimbursement Agreement,
dated as of September 1, 1993 (said Agreement, as it may hereafter be
amended or otherwise modified from time to time, being the "Agreement";
unless otherwise defined herein terms defined in the Agreement are used
herein with the same meaning), among The Connecticut Light and Power
Company (the "Account Party"), Union Bank of Switzerland, New York Branch
("UBS"), as Issuing Bank, the Participating Banks named therein and from
time to time parties thereto, and UBS as Agent. Pursuant to the Agreement,
______________ (the "Assignor") has purchased a participation from the
Issuing Bank in and to the Letter of Credit and each payment thereunder and
demand loan made by the Issuing Bank and has committed to make Advances to
the Account Party.
The Assignor and ________________ (the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns, without recourse, to the
Assignee, and the Assignee hereby purchases and assumes from the Assignor,
without recourse to the Assignor that portion set forth in Section 1(c) of
Schedule 1 hereto (the "Assigned Interest") of the Assignor's rights and
obligations under the Agreement and the Pledge Agreement, including,
without limitation, the participation purchased by the Assignor pursuant to
Section 3.07 of the Agreement in respect of unreimbursed amounts and demand
loans owing from time to time to the Issuing Bank, the Commitment of the
Assignor to make Advances and the Advances outstanding on the Effective
Date (as hereinafter defined). Such Assigned Interest represents the
percentage interest specified in Section 2(b) of Schedule 1 of all
outstanding rights and obligations of the Participating Banks under the
Agreement, and, after giving effect to such sale and assignment, the
Assignee's and Assignor's Participation Percentages will be as set forth in
Sections 2(b) and 2(c), respectively, of Schedule 1. The effective date of
this sale and assignment shall be the date specified in Section 3 of
Schedule 1 (the "Effective Date").
2. On the Effective Date, the Assignee will pay to the Assignor, in
same day funds, at such address and account as the Assignor shall advise
the Assignee, an amount equal to (1) the aggregate amount of unreimbursed
letter of credit payments, demand loans and Advances outstanding (as set
forth in Section 1 of Schedule 1) times (2) the Assigned Interest. From
and after the Effective Date, the Assignor agrees that the Assignee shall
be entitled to all rights, powers and privileges of the Assignor under the
Agreement and the Pledge Agreement to the extent of the Assigned Interest,
including without limitation (i) the right to receive all payments in
respect of the Assigned Interest for the period from and after the
Effective Date, whether on account of reimbursements, principal, interest,
fees, indemnities in respect of claims arising after the Effective Date,
increased costs, additional amounts or otherwise; (ii) the right to vote
and to instruct the Agent and the Issuing Bank under the Agreement based on
the Assigned Interest; (iii) the right to set-off and to appropriate and
apply deposits of the Account Party as set forth in the Agreement; and (iv)
the right to receive notices, requests, demands and other communications.
The Assignor agrees that it will promptly remit to the Assignee any amount
received by it in respect of the Assigned Interest (whether from the
Account Party, the Agent or otherwise) in the same funds in which such
amount is received by the Assignor.
3. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to
any statements, warranties or representations made in or in connection with
the Agreement or the Related Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the
Agreement, the Related Documents or any other instrument or document
furnished pursuant thereto; and (iii) makes no representation or warranty
and assumes no responsibility with respect to the financial condition of
the Account Party or the performance or observance by the Account Party of
any of its obligations under the Agreement, the Related Documents or any
other instrument or document furnished pursuant thereto.
4. The Assignee (i) confirms that it has received a copy of the
Agreement, together with copies of the financial statements referred to in
Section 6.01(f) thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter
into this Assignment; (ii) agrees that it will, independently and without
reliance upon the Agent, the Issuing Bank, the Assignor or any other
Participating Bank and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Agreement and the Related Documents;
(iii) appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers under the Agreement and the Pledge
Agreement as are delegated to the Agent by the terms thereof, together with
such powers as are reasonably incidental thereto; (vi) agrees that it will
perform in accordance with its terms all of the obligations which by the
terms of the Agreement are required to be performed by it as a
Participating Bank and (v) confirms that it has paid the processing fee
referred to in subsection 10.06(b) of the Agreement.
5. Following the execution of this Assignment, it will be delivered
to the Agent for acceptance and recording by the Agent. Upon such
acceptance and recording and receipt of the consent of the Issuing Bank
required pursuant to Section 10.06(b) of the Agreement (which shall be
evidenced by the Issuing Bank's execution of this Assignment on the
appropriate space on Schedule 1), as of the Effective Date, (i) the
Assignee shall be a party to the Agreement and, to the extent provided in
this Assignment, have the rights and obligations of a Participating Bank
thereunder and under the Pledge Agreement and (ii) the Assignor shall, to
the extent provided in this Assignment, relinquish its rights and be
released from its obligations under the Agreement and the Pledge Agreement.
6. Upon such acceptance, recording and consent, from and after the
Effective Date, the Agent shall make all payments under the Agreement in
respect of the interest assigned hereby (including, without limitation, all
payments of principal, interest and fees with respect thereto) to the
Assignee at its address set forth on Schedule 1 hereto. The Assignor and
Assignee shall make all appropriate adjustments in payments under the
Agreement for periods prior to the Effective Date directly between
themselves.
7. This Assignment shall be governed by, and construed in accordance
with, the laws of the State of New York.
8. This Assignment may be executed in counterparts by the parties
hereto, each of which counterpart when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the
same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment to
be executed by their respective officers thereunto duly authorized, as of
the date first above written, such execution being made on Schedule 1
hereto.
Schedule 1
to
Participation Assignment
Dated ____________, 19__
Section 1.
(a) Total Unreimbursed
Payments and demand loans $__________
(b) Total Advances: $__________
(c) Assigned Interest:1 __________%
1 Specify percentage to no more than 8 decimal points.
Section 2.
(a) Assignor's Participation
Percentage (immediately
prior to the effectiveness
of this Assignment) ___________%
(b) Assignee's Participation
Percentage2 (upon the
effectiveness of this
Assignment) ___________%
(c) Assignor's Participation
Percentage2 (upon
the effectiveness of
this Assignment) ___________%
2 The sum of the percentages set forth in Section 2(b) and (c) shall
equal
the percentage set forth in Section 2(a).
Section 3.
Effective Date:3__________, 19__
3 Such date shall be at least 5 Business Days after the execution of
this
Assignment.
[NAME OF ASSIGNOR]
By______________________________
Title:
[NAME OF ASSIGNEE]
By______________________________
Title:
[Address]
Telecopier No._______________
Attention:___________________
Consented to this __ day
of ______________, ___
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH,
as Issuing Bank
By ___________________________________
Title:
By ___________________________________
Title:
Accepted this __ day4
of _____________, ___
4 Not to be accepted without proof of Account Party's consent pursuant
to
Section 10.06(b) of the Reimbursement Agreement.
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH,
as Agent
By ___________________________________
Title:
By ___________________________________
Title:
APPLICABLE LENDING OFFICE
The Assignee's Applicable Lending Office is as follows:
EXHIBIT 1.01C
Form of
PLEDGE AGREEMENT
Dated as of September 1, 1993
THIS PLEDGE AGREEMENT ("this Agreement") is made by and between:
(i) The Connecticut Light and Power Company, a corporation duly
organized and validly existing under the laws of the State of
Connecticut (the "Account Party"); and
(ii) UNION BANK OF SWITZERLAND, NEW YORK BRANCH, as issuer of the
Letter
of Credit (the "Issuing Bank");
for the benefit of the Issuing Bank and
(iii) The Agent (as defined therein) and the Participating Banks
(as
defined therein) from time to time party to the
Reimbursement
Agreement hereinafter referred to.
PRELIMINARY STATEMENT
The Connecticut Development Authority (the "Issuer") proposes to
issue,
pursuant to an Indenture of Trust, dated as of September 1, 1993 (as
supplemented or amended from time to time with the written consent of the
Issuing Bank, the "Indenture"), made to Shawmut Bank Connecticut, National
Association, as trustee (such entity, or its successor as trustee, being
the
"Trustee"), $70,000,000 aggregate principal amount of its Pollution Control
Revenue Refunding Bonds (The Connecticut Light and Power Company Project -
1993B Series) (the "Bonds"). Pursuant to the Indenture and the Loan
Agreement, dated as of September 1, 1993, between the Issuer and the
Account
Party, the Account Party has requested the Issuing Bank to issue the letter
of credit referred to therein in favor of the Paying Agent described
therein.
The Issuing Bank has agreed to issue such letter of credit subject to the
terms and conditions set forth in that certain Letter of Credit and
Reimbursement Agreement, of even date herewith, among the Account Party,
the Issuing Bank, the Agent and the Participating Banks referred to therein
and
relating to the Bonds (said Letter of Credit and Reimbursement Agreement,
as it may hereafter be amended, modified or supplemented from time to time,
being hereinafter referred to as the "Reimbursement Agreement").
It is a condition precedent to the obligation of the Issuing Bank to
issue such letter of credit and of the Participating Banks to make the
Advances described in the Reimbursement Agreement that the Account Party
shall have made the pledge described in this Agreement.
NOW THEREFORE, in consideration of the premises and to induce the
Issuing Bank to issue such letter of credit and to induce the Participating
Banks to make such Advances, the Account Party hereby agrees as follows
(capitalized terms used herein and not otherwise defined herein having the
meanings assigned them in the Reimbursement Agreement):
SECTION 1. Pledge. The Account Party hereby pledges to the
Issuing Bank for the benefit of the Agent and the Participating Banks, and
grants to the Issuing Bank for the benefit of the Agent and the
Participating Banks a security interest in, the following (the "Pledged
Collateral"):
(i) the Pledged Bonds (as defined in the Indenture) and the
instruments, if any, evidencing the Pledged Bonds, and all interest,
cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for
any or all of the Pledged Bonds; and
(ii) all proceeds (other than the proceeds of the initial sale
upon issuance of the Pledged Bonds) of any and all of the foregoing
collateral (including, without limitation, proceeds that constitute
property of the types described above).
SECTION 2. Security for Obligations. This Agreement secures the
payment of all obligations of the Account Party now or hereafter existing
under the Reimbursement Agreement, whether for reimbursement, principal,
interest, fees, expenses or otherwise, and all obligations of the Account
Party now or hereafter existing under this Agreement (all such obligations
of the Account Party being the "Obligations"). Without limiting the
generality of the foregoing, this Agreement secures the payment of all
amounts which constitute part of the Obligations and would be owed by the
Account Party to the Issuing Bank, the Agent or any Participating Bank under
the Reimbursement Agreement but for the fact that they are unenforceable or
not allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving the Account Party.
SECTION 3. Delivery of Pledged Collateral. (a) All certificates
or instruments representing or evidencing the Pledged Collateral shall be
delivered to the Paying Agent and held by the Paying Agent on behalf of the
Issuing Bank pursuant hereto and shall be in suitable form for transfer by
delivery, or shall be accompanied by duly executed instruments of transfer
or assignment in blank, all in form and substance satisfactory to the Issuing
Bank. For the better perfection of the Issuing Bank's, the Agent's and the
Participating Banks' rights in and to the Pledged Collateral, the Account
Party shall forthwith, upon the pledge of any Pledged Collateral hereunder,
cause such Pledged Collateral to be registered in the name of such nominee
or nominees of the Issuing Bank as the Issuing Bank shall direct.
(b) If, prior to the payment in full of the Obligations and the
termination of the Letter of Credit, the Account Party shall become
entitled to receive or shall receive any payment in respect of the Pledged
Collateral, the Account Party agrees to accept the same as the agent of the
Issuing Bank, the Agent and the Participating Banks, to hold the same in
trust for the Issuing Bank, the Agent and the Participating Banks and to
deliver the same to the Issuing Bank. All such sums so received by the
Issuing Bank shall be credited against the Obligations in such order as the
Agent shall, in its sole discretion, elect.
(c) Notwithstanding the foregoing subsection (a), if and for so
long as the Bonds are to be held in the Book-Entry Only System (as defined
in the Indenture), the Account Party's obligations under such subsection
shall be deemed satisfied if such Pledged Bonds are (i) registered in the
name of DTC (as defined in the Indenture) in accordance with the Book-Entry
Only System, (ii) credited on the books of DTC to the account of the Paying
Agent (or its nominee) and (iii) further credited on the books of the Paying
Agent (or such nominee) to the account of the Issuing Bank (or its nominee).
SECTION 4. Representations and Warranties. The Account Party
represents and warrants as follows:
(a) The pledge of the Pledged Collateral pursuant to this
Agreement creates, upon the Paying Agent's taking possession of the Pledged
Bonds pursuant to Section 3 hereof (whether by physical possession or by
means of registration to DTC and book-entry credit as described in
subsection (c) thereof), a valid and perfected first priority security
interest in the Pledged Collateral, securing the payment of the Obligations.
(b) No consent of any other person or entity and no
authorization, approval, or other action by, and no notice to or filing with,
any governmental authority or regulatory body is required (i) for the pledge
by the Account Party of the Pledged Collateral pursuant to this Agreement or
for the execution, delivery or performance of this Agreement by the Account
Party, (ii) for the perfection or maintenance of the security interest
created hereby (including the first priority nature of such security
interest), other than any filings of Uniform Commercial Code financing
statements that may be required for such perfection with respect to any
"proceeds" of the Pledged Bonds, or (iii) for the exercise by the Issuing
Bank of the voting or other rights provided for in this Agreement or the
remedies in respect of the Pledged Collateral pursuant to this Agreement
(except as may be required in connection with any disposition of any
portion of the Pledged Collateral by laws affecting the offering and sale of
securities generally and except for such as have already been obtained and
are in full force and effect).
SECTION 5. Further Assurances. The Account Party agrees that at
any time and from time to time, at the expense of the Account Party, the
Account Party will promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary or desirable,
or that the Issuing Bank may reasonably request, in order to perfect and
protect any security interest granted or purported to be granted hereby or
to enable the Issuing Bank to exercise and enforce its rights and remedies
hereunder with respect to any Pledged Collateral.
SECTION 6. Release. In the event that any Pledged Bonds are
subsequently remarketed by the Remarketing Agent and the proceeds thereof,
when added to any amounts paid to the Issuing Bank and/or the Agent by the
Account Party, are sufficient to (a) reimburse the Issuing Bank and the
Participating Banks in full for the drawing under the Letter of Credit
pursuant to which such Pledged Bonds became Pledged Bonds, (b) repay or
prepay any demand loan or Advance made in respect thereof and (c) pay all
interest, fees and other amounts accrued in respect thereof pursuant to the
Reimbursement Agreement, the lien of this Agreement shall be released as to
such Pledged Bonds (but not as to any other Pledged Bonds).
SECTION 7. Transfers and Other Liens. The Account Party agrees
that it will not (i) sell, assign or otherwise dispose of, or grant any
option with respect to, any of the Pledged Collateral, or (ii) create or
permit to exist any lien, security interest, option or other charge or
encumbrance upon or with respect to any of the Pledged Collateral, except
for the security interest under this Agreement.
SECTION 8. Bank Appointed Attorney-in-Fact. The Account Party
hereby appoints the Issuing Bank the Account Party's attorney-in-fact, with
full authority in the place and stead of the Account Party and in the name
of the Account Party or otherwise, from time to time in the Issuing Bank's
discretion to take any action and to execute any instrument which the
Issuing Bank may deem necessary or advisable to accomplish the purposes of
this Agreement, including, without limitation, to receive, indorse and
collect all instruments made payable to the Account Party representing any
interest payment or other distribution in respect of the Pledged Collateral
or any part thereof and to give full discharge for the same.
SECTION 9. Bank May Perform. If the Account Party fails to
perform any agreement contained herein, the Issuing Bank may itself
perform, or cause performance of, such agreement, and the expenses of the
Issuing Bank incurred in connection therewith shall be payable by the Account
Party under Section 10.04 of the Reimbursement Agreement.
SECTION 10. The Issuing Bank's Duties. The powers conferred on
the Issuing Bank hereunder are solely to protect its interest in the
Pledged Collateral and shall not impose any duty upon it to exercise any such
powers. Except for the safe custody of any Pledged Collateral in its actual
possession and the accounting for moneys actually received by it hereunder,
the Issuing Bank shall have no duty as to any Pledged Collateral, as to
ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relative to any Pledged
Collateral, whether or not the Issuing Bank has or is deemed to have
knowledge of such matters, or as to the taking of any necessary steps to
preserve rights against any parties or any other rights pertaining to any
Pledged Collateral.
The Issuing Bank shall be deemed to have exercised reasonable care in the
custody and preservation of any Pledged Collateral in its actual possession
if such Pledged Collateral is accorded treatment substantially equal to
that which the Issuing Bank accords its own property.
SECTION 11. Remedies upon Default. If any Event of Default
shall have occurred and be continuing:
(a) The Issuing Bank may exercise in respect of the Pledged
Collateral, in addition to other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies of a secured
party on default under the Uniform Commercial Code in effect in the
State of New York at that time (the "Code") (whether or not the Code
applies to the affected Pledged Collateral), and may also, without
notice except as specified below, sell the Pledged Collateral or any
part thereof in one or more parcels at public or private sale, at any
exchange, broker's board or at any of the Issuing Bank's offices or
elsewhere, for cash, on credit or for future delivery, and upon such
other terms as the Issuing Bank may deem commercially reasonable. The
Account Party agrees that, to the extent notice of sale shall be
required by law, at least ten days' notice to the Account Party of the
time and place of any public sale or the time after which any private
sale is to be made shall constitute reasonable notification. The
Issuing Bank shall not be obligated to make any sale of Pledged
Collateral regardless of notice of sale having been given. The
Issuing Bank may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was
so adjourned.
(b) Any cash held by the Issuing Bank as Pledged Collateral and
all cash proceeds received by the Issuing Bank in respect of any sale
of, collection from, or other realization upon all or any part of the
Pledged Collateral may, in the discretion of the Issuing Bank, be held
by the Issuing Bank as collateral for, and/or then or at any time
thereafter be applied (after payment of any amounts payable to the
Issuing Bank pursuant to Section 9 hereof and/or Section 10.04 of the
Reimbursement Agreement) in whole or in part by the Issuing Bank
against, all or any part of the Obligations in such order as the
Issuing Bank shall elect. Any surplus of such cash or cash proceeds held by
the Issuing Bank and remaining after payment in full of all the
Obligations shall be paid over to the Account Party or to whomsoever may be
lawfully entitled to receive such surplus.
SECTION 12. Continuing Security Interest; Assignments. This
Agreement shall create a continuing security interest in the Pledged
Collateral and shall (i) remain in full force and effect until the later of
(x) the payment in full of the Obligations and all other amounts payable
under this Agreement and (y) the expiration or termination of the
Commitments, (ii) be binding upon the Account Party, its successors and
assigns, and (iii) inure to the benefit of, and be enforceable by, the
Issuing Bank, the Agent, the Participating Banks and their respective
successors, transferees and assigns. Without limiting the generality of
the foregoing clause (iii), any Participating Bank may, subject to Section
10.06 of the Reimbursement Agreement, assign or otherwise transfer all or any
portion of its rights and obligations under the Reimbursement Agreement
(including, without limitation, all or any portion of its Commitment and
the advances owing to it) to any other person or entity, and such other
person or entity shall thereupon become vested with all the benefits in
respect thereof granted to such Participating Bank herein or otherwise. Upon
the later of the payment in full of the Obligations and all other amounts
payable under this Agreement and the expiration or termination of the
Commitments, the security interest granted hereby shall terminate and all
rights to the Pledged Collateral shall revert to the Account Party. Upon any
such termination, the Issuing Bank will, at the Account Party's expense,
return to the Account Party such of the Pledged Collateral as shall not have
been sold or otherwise applied pursuant to the terms hereof and execute and
deliver to the Account Party such documents as the Account Party shall
reasonably request to evidence such termination.
IN WITNESS WHEREOF, the Account Party has caused this Agreement
to be duly executed and delivered by its officer thereunto duly authorized as
of the date first above written.
THE CONNECTICUT LIGHT AND
POWER COMPANY, as Account Party and
pledgor
By ________________________________________
Title:
UNION BANK OF SWITZERLAND, NEW
YORK BRANCH, as Issuing Bank and pledgee
By ________________________________________
Title:
By ________________________________________
Title:
[Form of Opinion of King & Spalding - CDA/CL&P SERIES B]
EXHIBIT 5.01B
September 22, 1993
To Union Bank of Switzerland, New York Branch,
as Agent and as Issuing Bank under
the Reimbursement Agreement referred
to below, and to each Participating
Bank thereunder
Re: The Connecticut Light and Power Company
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 5.01(f)(ii) of
the Letter of Credit and Reimbursement Agreement, dated as of September 1,
1993
(the "Reimbursement Agreement"), among The Connecticut Light and Power
Company (the "Company"), Union Bank of Switzerland, New York Branch, as the
Agent (the "Agent") and Issuing Bank (the "Issuing Bank") thereunder, and
the Participating Banks referred to therein. Unless otherwise defined
herein,
terms defined in the Reimbursement Agreement are used herein as therein
defined.
We have acted as special New York counsel to the Agent and the Issuing
Bank in connection with the preparation, execution and delivery of the
Reimbursement Agreement and the issuance by the Issuing Bank of the Letter
of Credit referred to therein.
In that connection, we have examined the following documents:
(a) The Reimbursement Agreement, executed by each of the parties
thereto; and
(b) The documents furnished to you today pursuant to Section
5.01 of the Reimbursement Agreement, including the opinion of counsel
delivered pursuant to Section 5.01(f)(i) of the Reimbursement
Agreement (the "Opinion").
In our examination of the documents referred to above, we have assumed
the authenticity of all such documents submitted to us as originals, the
genuineness of all signatures, the due authority of the parties executing
such documents and the conformity to the originals of all such documents
submitted to us as copies or telecopies. We have also assumed that the
Agent, the Issuing Bank and each Participating Bank have duly executed and
delivered, with all necessary power and authority (corporate and
otherwise), the Reimbursement Agreement.
To the extent that our opinions expressed below involve conclusions as
to matters governed by laws other than the laws of the State of New York,
we have relied upon the Opinion and have assumed without independent
investigation the correctness of the matters set forth therein, our
opinions expressed below being subject to the assumptions, qualifications and
limitations set forth in the Opinion. As to matters of fact, we have
relied solely upon the documents we have examined.
Based upon the foregoing, and subject to the qualifications set forth
below, we are of the opinion that:
4. The Reimbursement Agreement is in substantially acceptable
legal form.
5. The Opinion and the other documents referred to in item (b),
above, are substantially responsive to the requirements of the
Sections of the Reimbursement Agreement pursuant to which the same have
been delivered.
The foregoing opinions are solely for your benefit and may not be
relied upon by any other person, other than any person that may become a
Participating Bank under the Reimbursement Agreement after the date hereof.
Very truly yours,
Exhibit 4.3.8.1
FIRST SUPPLEMENT
Dated as of December 1, 1993
among
BUSINESS FINANCE AUTHORITY OF THE
STATE OF NEW HAMPSHIRE
and
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
and
STATE STREET BANK AND TRUST COMPANY, as Trustee
Supplementing and Amending the Series E Loan and Trust Agreement
Dated as of May 1, 1991 and Providing for the Issue of:
$44,800,000
Business Finance Authority of the State of New
Hampshire Pollution Control Refunding Revenue Bonds
(Public Service Company of New Hampshire Project -
1993 Tax-Exempt Series E)
TABLE OF CONTENTS
ARTICLE I: INTRODUCTION AND DEFINITIONS. . . . . . . . . . . . . . . . 1
Section 101. Description of the Agreement and the
Parties. . . . . . . . . . . . . . . . . . . . . . . 1
Section 102. Definitions. . . . . . . . . . . . . . . . . . . . . 2
(a) Words. . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II: LOAN OF 1993 SERIES E BOND PROCEEDS;
CONFIRMATION OF PLEDGE . . . . . . . . . . . . . . . . . . 3
Section 201. Pledge of Series G First Mortgage Bonds. . . . . . . 3
ARTICLE III: THE 1993 SERIES E BONDS . . . . . . . . . . . . . . . . . 4
Section 301. Forms of 1993 Series E Bonds . . . . . . . . . . . . 4
(a) Form of Flexible Bond. . . . . . . . . . . . . . . . . . 4
(b) Form of Weekly Bond. . . . . . . . . . . . . . . . . . . 13
(c) Form of Multiannual Bond . . . . . . . . . . . . . . . . 26
(d) Form of Fixed Rate Bond. . . . . . . . . . . . . . . . . 38
Section 302. Details of the 1993 Series E Bonds . . . . . . . . . 45
Section 303. Registration of Bonds in the Book-Entry
Only System. . . . . . . . . . . . . . . . . . . . . 46
Section 304. Application of 1993 Series E Bond
Proceeds . . . . . . . . . . . . . . . . . . . . . . 49
Section 305. Maximum Interest Rate for 1993 Series E
Bonds. . . . . . . . . . . . . . . . . . . . . . . . 49
Section 306. Additional Limitations on Conversions to
New Modes. . . . . . . . . . . . . . . . . . . . . . 49
(a) Conversions to Multiannual Mode. . . . . . . . . . . . . 49
(b) Conversions from Multiannual Mode to Flexible or Weekly
Mode . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 307. Subsection 310(c) of Original Agreement
Amended. . . . . . . . . . . . . . . . . . . . . . . 50
Section 308. Subsection 310(e) of Original Agreement
Amended. . . . . . . . . . . . . . . . . . . . . . . 50
Section 309. Tax Status of 1993 Series E Bonds. . . . . . . . . . 50
Section 310. Amendment of Credit Facility . . . . . . . . . . . . 51
(a) Issuance of Amended and Restated Credit Facility . . . . 51
(b) Paragraph 102(a)(13) of Original Agreement Amended . . . 51
Section 311. Subsection 301(e) of Original Agreement
Amended. . . . . . . . . . . . . . . . . . . . . . . 51
(a) Paragraph 301(e)(ii) Amended . . . . . . . . . . . . . . 51
(b) Subparagraph 301(e)(iv)(A) Amended . . . . . . . . . . . 51
Section 312. Subsection 308(c) of Original Agreement
Amended. . . . . . . . . . . . . . . . . . . . . . . 52
(a) Paragraph 308(c)(i) Amended. . . . . . . . . . . . . . . 52
(b) Paragraph 308(c)(iii) of Original Agreement Amended. . . 52
(c) Paragraph 308(c)(iv) Added to Original Agreement . . . . 52
Section 313. Subsection 311(c) Added. . . . . . . . . . . . . . . 52
Section 314. Subsection 312(a) Amended. . . . . . . . . . . . . . 52
Section 315. Section 405 of Original Agreement
Amended. . . . . . . . . . . . . . . . . . . . . . . 53
ARTICLE IV: MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . 53
Section 401. Original Agreement Affirmed. . . . . . . . . . . . . 53
Section 402. Company's Agreement to Chapter 263 . . . . . . . . . 53
Section 403. Severability . . . . . . . . . . . . . . . . . . . . 53
Section 404. Counterparts . . . . . . . . . . . . . . . . . . . . 54
Section 405. Receipt of Documents . . . . . . . . . . . . . . . . 54
Section 406. Captions . . . . . . . . . . . . . . . . . . . . . . 54
Section 407. Governing Law. . . . . . . . . . . . . . . . . . . . 54
SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
EXHIBIT A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
ARTICLE I: INTRODUCTION AND DEFINITIONS
Section 101. Description of the Agreement and the Parties. This FIRST
SUPPLEMENT (the "First Supplement") is entered into as of December 1, 1993 by
the Business Finance Authority of the State of New Hampshire (with its
successors, the "Authority"), a body corporate and politic created under New
Hampshire Revised Statutes Annotated 162-A:3 formerly known as The Industrial
Development Authority of the State of New Hampshire; Public Service Company
of New Hampshire (with its successors, the "Company"), a New Hampshire
corporation, and State Street Bank and Trust Company, a Massachusetts trust
company, as Trustee (with its successors, the "Trustee"). This First
Supplement supplements and amends the Series E Loan and Trust Agreement dated
as of May 1, 1991 (the "Original Agreement") among the Authority, the Company
and the Trustee and is entered into pursuant to Article IV and Clauses
1101(a)(v), (vii) and (viii) of the Original Agreement. The Agreement is a
financing document combined with a security document as one instrument in
accordance with New Hampshire Revised Statutes Annotated Chapter 162-I (the
"Act") and relates to industrial facilities as defined in Paragraphs 2,
VII(d) and (e) of the Act and located in the Town of Seabrook, Rockingham
County, New Hampshire.
This First Supplement, in conjunction with the Original Agreement,
provides for the following transactions:
(a) the Authority's issue of the 1993 Series E Bonds, which are to be
Tax-Exempt Refunding Bonds as provided for in the Original Agreement;
(b) the Authority's loan of the proceeds of the 1993 Series E Bonds to
the Company for the purpose of refunding the principal of $44,800,000 of the
Authority's 1991 Series E Bonds;
(c) the Company's repayment of the loan of 1993 Series E Bond proceeds
from the Authority through payment to the Trustee of all amounts necessary to
pay the 1993 Series E Bonds issued by the Authority;
(d) the Company's confirmation of its agreement to evidence and secure
its repayment obligations hereunder and its reimbursement obligations under
the Reimbursement Agreement with the Series G First Mortgage Bonds; and
(e) the amendment and restatement, at the time the 1993 Series E Bonds
are issued, of the irrevocable, transferable Letter of Credit of Citibank,
N.A. issued to the Paying Agent so that it may be drawn upon to pay the
Purchase Price of, principal of, premium, if any, and interest on the 1993
Series E Bonds as well as the 1991 Series E Bonds that remain Outstanding.
In consideration of the mutual promises contained in this First
Supplement, the rights conferred and the obligations assumed hereby, and
other good and valuable consideration, the receipt of which is hereby
acknowledged, each of the Company, the Authority and the Trustee agree,
assign, covenant, grant, pledge, promise, represent and warrant as set forth
herein for their own benefit and for the benefit of the Bondowners and the
Bank.
Section 102. Definitions. (a) Words. Unless otherwise defined in
this First Supplement, or unless the context otherwise requires, the terms
defined in the Original Agreement shall have the same meaning in this First
Supplement. In addition to terms defined in the Original Agreement and
elsewhere in this First Supplement, the following terms have the following
meanings in the Agreement, unless the context otherwise requires:
(1) "Agreement" means the Original Agreement, as supplemented and
amended by this First Supplement and as may be subsequently amended or
supplemented from time to time.
(2) "Assumption Agreement" means the Assumption Agreement dated as of
June 5, 1992 among the parties hereto and the Seabrook Transferee.
(3) "Authority's Service Charge" means with respect to the 1993
Series E Bonds, payments to the Authority for its own use which consist of
(i) a payment of $37,333.33 on the date of the issue of the 1993 Series E
Bonds and (ii) annual payments commencing on the first anniversary of the
date of this First Supplement and continuing on each subsequent anniversary,
which are each equal to 1/20th of 1% of the average principal balance of the
1993 Series E Bonds on which interest was accruing during the prior twelve-
month period, or $250, whichever is greater, with a final payment due upon
the redemption or payment of the 1993 Series E Bonds in full prorated to the
date of such redemption or payment, as the case may be.
(4) "First Supplemental Federal Tax Statement" means the Statement as
to Tax Status of Bonds executed by the Company and the Seabrook Transferee in
connection with the original issuance of the 1993 Series E Bonds and
delivered to the Trustee.
(5) Except in the 1993 Series E Bonds, "here" in such words as
"hereby," "herein," "hereof" or "hereunder" means the Agreement as a whole
rather than this First Supplement, or the particular section, subsection,
paragraph, subparagraph, clause or subclause in which the word appears; and
in the 1993 Series E Bonds it refers thereto.
(6) "Letter of Credit" means the $119,129,000 irrevocable letter of
credit No. NY0389-30008830, as amended and restated, issued by Citibank, N.A.
for the benefit of the Paying Agent.
(7) "1993 Series E Bonds" means the $44,800,000 principal amount of
Business Finance Authority of the State of New Hampshire Pollution Control
Refunding Revenue Bonds (Public Service Company of New Hampshire Project -
1993 Tax-Exempt Series E).
(8) "Paying Agent" means BankAmerica National Trust Company (formerly
known as Security Pacific National Trust Company (New York)) or any successor
or successors designated from time to time pursuant to Section 313 of the
Original Agreement.
(9) "Reimbursement Agreement" means the Series E Letter of Credit and
Reimbursement Agreement dated as of May 1, 1991, among the Company, Citibank,
N.A., as issuing bank thereunder, and the participating banks referred to
therein, and any other agreement between the Company and a Bank under which
the Company is obligated to reimburse the Bank for payments made by the Bank
under a Credit Facility.
(10) "Representation Letter" has the meaning given such term in Section
303 of this First Supplement.
(11) "Seabrook Transferee" means North Atlantic Energy Corporation, the
transferee of the Project Facilities pursuant to the Seabrook Transfer, and
its successors.
ARTICLE II: LOAN OF 1993 SERIES E BOND PROCEEDS;
CONFIRMATION OF PLEDGE
Section 201. Pledge of Series G First Mortgage Bonds. The Authority
shall issue the 1993 Series E Bonds pursuant to the Act in the amount, in
the form and with the terms provided herein, and shall loan to the Company
such amount (the "First Supplemental Loan") to refund the principal of
$44,800,000 of the 1991 Series E Bonds as hereinafter provided. The
Company agrees to repay the First Supplemental Loan of the aggregate
principal amount of the 1993 Series E Bonds in the amounts and at the times
necessary to pay principal of, premium, if any, and interest on the Bonds
by making the payments required under Section 308 of the Original
Agreement, and for such purpose the First Supplemental Loan is to be
treated as part of the Loan made pursuant to the Original Agreement. To
evidence and secure the Company's obligation to repay the Loan, including
the First Supplemental Loan, and to secure the Company's reimbursement and
certain other obligations under the Reimbursement Agreement, the Company
issued and delivered to the Trustee on the date of issuance of the 1991
Series E Bonds a like aggregate principal amount of its Series G First
Mortgage Bonds. The Company hereby confirms that the Series G First
Mortgage Bonds evidence and secure the Company's obligations to make
payments in amounts and at times necessary to pay principal of, premium, if
any, and interest on all of the Outstanding Bonds, including the
Outstanding 1993 Series E Bonds and the Outstanding 1991 Series E Bonds and
the Company's reimbursement and certain other obligations under the
Reimbursement Agreement.
ARTICLE III: THE 1993 SERIES E BONDS
Section 301. Forms of 1993 Series E Bonds.
The 1993 Series E Bonds shall be issued in substantially the following
forms for the various Modes:
(a) Form of Flexible Bond. The 1993 Series E Bonds may be issued in
the Flexible Mode in substantially the form prescribed below.
$____________ No. R-
ANY BONDOWNER WHO FAILS TO DELIVER A BOND FOR PURCHASE AT THE TIMES AND AT
THE PLACE REQUIRED HEREIN SHALL HAVE NO FURTHER RIGHTS HEREUNDER EXCEPT THE
RIGHT TO RECEIVE THE PURCHASE PRICE HEREOF UPON PRESENTATION AND SURRENDER
OF THIS BOND TO THE PAYING AGENT AS DESCRIBED HEREIN, AND SHALL HOLD THIS
BOND AS AGENT FOR THE PAYING AGENT.
UNITED STATES OF AMERICA
STATE OF NEW HAMPSHIRE
BUSINESS FINANCE AUTHORITY
OF THE STATE OF NEW HAMPSHIRE
Pollution Control Refunding Revenue Bond
(Public Service Company of New Hampshire
Project - 1993 Tax-Exempt Series E)
REGISTERED OWNER:
PRINCIPAL AMOUNT: DOLLARS
INTEREST DUE: $
(on the Next Purchase Date)
INTEREST RATE:
(to the Next Purchase Date)
NEXT PURCHASE DATE:
COMMENCEMENT DATE OF RATE PERIOD:
MATURITY DATE: May 1, 2021
CUSIP:
DATE OF THIS BOND:
(Date as of which Bonds of this
series were initially issued.)
MODE: Flexible
THIS BOND DOES NOT CONSTITUTE AN INDEBTEDNESS OF THE STATE OF NEW
HAMPSHIRE OR OF THE AUTHORITY EXCEPT TO THE EXTENT PERMITTED BY NEW
HAMPSHIRE RSA CHAPTER 162-I. ALL AMOUNTS OWED HEREUNDER ARE PAYABLE ONLY
FROM THE SOURCES PROVIDED IN THE LOAN AND TRUST AGREEMENT DESCRIBED BELOW,
AND NO PUBLIC FUNDS MAY BE USED FOR THAT PURPOSE.
The Business Finance Authority of the State of New Hampshire (the
"Authority"), for value received, promises to pay to the REGISTERED OWNER,
or registered assigns, but solely from the moneys to be provided under the
Agreement mentioned below, upon presentation and surrender hereof, in
lawful money of the United States of America, the PRINCIPAL AMOUNT on the
MATURITY DATE, unless paid earlier as provided below, with interest from
the most recent Interest Payment Date, as defined below, to which interest
has been paid or duly provided for or, if no interest has been paid, from
the DATE OF THIS BOND set forth above, until paid in full, at the rates set
forth below, payable on each Interest Payment Date. So long as this bond
is in the Flexible Mode, interest shall be due on this bond on each
Purchase Date (as defined below) and on the MATURITY DATE, and when this
bond is in any other Mode interest shall be due on the dates provided in
the Agreement (the "Interest Payment Dates"). Until conversion to the
Weekly, Multiannual or Fixed Rate Mode as provided below, this bond shall
bear interest at the Flexible Rate. The Flexible Rate for this bond shall
be the rate of interest determined by the Remarketing Agent designated as
provided in the Agreement (herein, with its successors, the "Remarketing
Agent"), for each Rate Period, as defined below, to be the lowest rate
which in its judgment, on the basis of prevailing financial market
conditions, is necessary on and as of the Effective Date, as defined below,
to remarket each Bond having such Rate Period in a secondary market
transaction at a price equal to the principal amount thereof, but not in
excess of the Maximum Interest Rate. If this bond is converted to the
Weekly, Multiannual or Fixed Rate Mode it shall bear interest at the
Weekly, Multiannual or Fixed Rate, as the case may be, as defined in the
Agreement. The Remarketing Agent shall determine the initial Flexible Rate
on or before the date of issue in or of conversion to the Flexible Mode,
which rate shall remain in effect as provided in the Agreement.
Thereafter, the Remarketing Agent shall redetermine the Flexible Rate for
each Rate Period as provided below. The amount of interest due on any
Interest Payment Date shall be the amount of unpaid interest accrued on
this bond through the day preceding such Interest Payment Date or, if such
Interest Payment Date is not a Business Day, through the day preceding the
first Business Day succeeding such Interest Payment Date.
This bond is one of a series of Pollution Control Refunding Revenue
Bonds (Public Service Company of New Hampshire Project - 1993 Tax-Exempt
Series E) (the "Bonds") in the aggregate principal amount of $44,800,000
issued under New Hampshire RSA Chapter 162-I (the "Act"). The proceeds of
the Bonds are being loaned to Public Service Company of New Hampshire (the
"Company"), a New Hampshire corporation, pursuant to a Series E Loan and
Trust Agreement dated as of May 1, 1991, as supplemented and amended by a
First Supplement dated as of December 1, 1993 (the "Agreement") among the
Company, the Authority and State Street Bank and Trust Company, as Trustee
(the "Trustee") to refund a like principal amount of the Authority's
$114,500,000 Pollution Control Revenue Bonds (Public Service Company of New
Hampshire Project - 1991 Taxable Series E) (the "1991 Bonds"), which were
originally issued to finance certain costs associated with the Company's
ownership interest in air or water pollution control and sewage or solid
waste disposal facilities installed for use by Unit No. 1 at the nuclear
electric generating station (the "Station") in Seabrook, New Hampshire (the
"Project Facilities"). Pursuant to the Agreement, the Company has
unconditionally agreed to repay such loan in the amounts and at the times
necessary to pay the principal of, premium, if any, and interest on the
Bonds when due. To evidence and secure such loan and the Company's
reimbursement and certain other obligations under the Reimbursement
Agreement (as defined below), the Company has issued and delivered to the
Trustee its First Mortgage Bonds, Series G (the "Series G First Mortgage
Bonds") issued under the First Mortgage Indenture dated as of August 15,
1978, as amended, and the Tenth Supplemental Indenture thereto dated as of
May 1, 1991 between the Company and First Fidelity Bank, National
Association, New Jersey, as Trustee (as amended and supplemented from time
to time, the "First Mortgage Bond Indenture") in an aggregate principal
amount, and with an interest rate, maturity date and redemption provisions
corresponding to those of the Bonds and certain other bonds issued under
the Agreement, including the 1991 Bonds. As provided in the Agreement,
payments of principal of, and premium, if any, and interest on the Series G
First Mortgage Bonds shall, upon receipt by the Trustee, be deemed to
constitute payments in corresponding amounts by the Company in respect of
the Bonds and certain other bonds issued under the Agreement, including the
1991 Bonds. Reference is hereby made to the Agreement for the provisions
thereof with respect to the rights, limitations of rights, duties,
obligations and immunities of the Company, the Authority, the Trustee, the
Paying Agent, and the Bondowners, including the order of payments in the
event of insufficient funds, the disposition of unclaimed moneys held by
the Trustee and restrictions on the rights of owners of the Bonds to bring
suit. The Agreement may be amended to the extent and in the manner
provided therein. Copies of the Agreement are available for inspection at
the corporate trust office of the Trustee.
The Purchase Price (as defined below) and principal of and interest on
this bond while it is in the Flexible Mode is also payable from moneys
drawn by the Paying Agent on an irrevocable letter of credit for the Bonds
and certain other bonds issued under the Agreement, including the 1991
Bonds (together with any extensions, amendments and renewals thereof, the
"Letter of Credit"), issued by ________________, pursuant to the terms of a
Reimbursement Agreement dated as of __________________ (the "Reimbursement
Agreement") by and between the Company and _____________________________
(together with any other issuer of a Credit Facility, the "Bank"). The
Letter of Credit initially expires on _______________ but may be terminated
earlier upon the occurrence of certain events set forth in the Agreement
and the Reimbursement Agreement or extended as provided in the
Reimbursement Agreement. The Company may substitute the Letter of Credit
in whole or in part with one or more new letters of credit (collectively
with the Letter of Credit, a "Credit Facility") as provided in the
Agreement and the Reimbursement Agreement. The Company may substitute a
new Credit Facility as provided in the Agreement.
Unless otherwise defined herein, capitalized terms used in this bond
shall have the meaning given them in the Agreement. The following terms
are defined as follows:
"Business Day" means a day (i) that is not a Sunday or legal holiday
or a day on which banking institutions are authorized pursuant to law to
close, (ii) that is not a day on which the corporate trust office of the
First Mortgage Bond Trustee is not open for business, (iii) that is a day
on which banks are not required or authorized to close in New York, New
York, and (iv) that is a day on which banking institutions in all of the
cities in which the principal offices of the Trustee and the Paying Agent
and, if applicable, the Remarketing Agent and the Bank are located are not
required or authorized to remain closed and on which the New York Stock
Exchange is not closed.
"Effective Date" means, with respect to a Bond in the Flexible, Weekly
and Multiannual Modes, the date on which a new Rate Period for that Bond
takes effect.
"Mode" means the period for and the manner in which the interest rates
on the Bonds are set and includes the Flexible Mode, the Weekly Mode, the
Multiannual Mode and the Fixed Rate Mode.
"Purchase Date" means, while this bond is in the Flexible Mode, the
date on which this bond shall be required to be purchased pursuant to a
mandatory tender in accordance with the provisions hereof.
"Rate Period" or "Period" means, when used with respect to any
particular rate of interest for a Bond in the Flexible, Weekly or
Multiannual Mode, the period during which such rate of interest determined
for such Bond will remain in effect as described herein.
At the option of the Company and upon certain conditions provided for
in the Agreement described below, all or a portion of the Bonds (a) may be
converted or reconverted from time to time to or from the Weekly Mode or
Multiannual Mode, which means that the Rate Period is, respectively, one
week or one year or any multiple of one year, (b) may be converted or
reconverted from time to time to or from the Flexible Mode, and will have
Rate Periods of from one to 270 days as provided herein, or (c) may be
converted to the Fixed Rate Mode; provided, however, that in the
Multiannual Mode the first rate period occurring after conversion to such
Mode may be shorter than the applicable multiple of one year as provided in
the Agreement. While this bond is in the Flexible Mode, a new interest
rate shall take effect on the date such Mode takes effect, and on the
Effective Date of the next Flexible Rate Period, as defined herein,
applicable to this bond.
While this bond is in the Flexible Mode, conversions to any other Mode
may take place only on an Effective Date. Conversion of this bond to
another Mode shall be subject to certain conditions set forth in the
Agreement. In the event that the conditions for a proposed conversion to a
new Mode are not met (i) such new Mode shall not take effect on the
proposed conversion date, notwithstanding any prior notice to the
Bondowners of such conversion and (ii) this bond shall remain in the
Flexible Mode with a Rate Period of one day. In no event shall the failure
of this bond to be converted to another Mode be deemed to be a Default or
an Event of Default under the Agreement as long as the Purchase Price (as
defined below) is made available on the failed conversion date to owners of
all Bonds that were to have been converted.
While Bonds bear interest at Flexible Rates, the interest rate for
each particular Bond in the Flexible Mode will be determined by the
Remarketing Agent and will remain in effect from and including the
Effective Date of the Rate Period selected for that Bond by the Remarketing
Agent through the last date thereof. While the Bonds are in the Flexible
Mode, Bonds may have successive Rate Periods of any duration up to 270 days
each and ending on a Business Day and any Bond may bear interest at a rate
and for a period different from any other Bond.
In the event that the Remarketing Agent no longer determines, or fails
to determine when required, any Rate Period or any Flexible Rate for any
Bonds, or if for any reason such manner of determination shall be
determined to be invalid or unenforceable, the Rate Period for any such
Bond shall be deemed to be a Flexible Rate Period with a duration of one
day and the Flexible Rate shall be determined as provided in the Agreement.
While this bond is in the Flexible Mode it is subject to mandatory
tender for purchase on each applicable Effective Date at a price (the
"Purchase Price") of par plus accrued interest to the Effective Date. THE
OWNER OF THIS BOND, BY ACCEPTANCE HEREOF, AGREES TO SELL AND SURRENDER THIS
BOND IN ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT AND, ON THE
PURCHASE DATE, TO SURRENDER THIS BOND TO THE PAYING AGENT FOR PAYMENT OF
THE PURCHASE PRICE. UPON DEPOSIT OF THE PURCHASE PRICE WITH THE PAYING
AGENT ON THE PURCHASE DATE, THIS BOND SHALL BE DEEMED TENDERED FOR PURCHASE
AND SHALL CEASE TO BE OUTSTANDING UNDER THE AGREEMENT, INTEREST HEREON
SHALL CEASE TO ACCRUE AS OF THE PURCHASE DATE, AND THE REGISTERED OWNER
HEREOF SHALL BE ENTITLED ONLY TO RECEIVE THE PURCHASE PRICE SO DEPOSITED
WITH THE PAYING AGENT UPON SURRENDER OF THIS CERTIFICATE TO THE PAYING
AGENT. The Purchase Price shall be paid on the Delivery Date, which shall
be the Effective Date or any subsequent Business Day on which this bond is
delivered to the Paying Agent. The Purchase Price of this bond shall be
paid only upon surrender of this bond to the Paying Agent as provided
herein. From and after the Effective Date, no further interest shall be
payable to the REGISTERED OWNER during the preceding Rate Period, provided
that there are sufficient funds available on the Effective Date to pay the
Purchase Price.
Each determination and redetermination of the Flexible Rate shall be
conclusive and binding on the Authority, the Trustee, the Paying Agent, the
Bank, the Company and the Bondowners.
While this bond is in the Flexible Mode, interest shall be computed on
the basis of actual days elapsed divided by 365 or 366, as appropriate.
From and after the date on which this bond becomes due, any unpaid
principal will bear interest at the then effective interest rate until paid
or duly provided for.
While this bond is in the Flexible Mode, the principal of and interest
on this bond due on the MATURITY DATE are payable when due by wire or bank
transfer of immediately available funds within the continental United
States to the REGISTERED OWNER hereof but only upon presentation and
surrender of this bond at the offices of __________________________,
__________, _________, as Paying Agent (with its successors in such
capacity, the "Paying Agent"). While this bond is in the Flexible Mode,
the Purchase Price of this bond (which includes accrued interest to the
Purchase Date) tendered for purchase is payable by wire or bank transfer
within the continental United States from the Paying Agent to the
REGISTERED OWNER at its address shown on the registration books maintained
by the Paying Agent. Payment of the Purchase Price of this bond to such
owner shall be made on the Purchase Date if presentation and surrender of
this bond is made prior to 11:00 A.M., New York City time, on the Purchase
Date or on such later Business Day upon which presentation and surrender of
this bond is made prior to 11:00 A.M., New York City time. The Purchase
Price of this bond shall be paid in immediately available funds. Overdue
interest on this bond, or interest on overdue principal while in the
Flexible Mode is payable in immediately available funds by wire or bank
transfer within the continental United States from the Paying Agent to the
REGISTERED OWNER, determined as of the close of business on the applicable
special record date as determined by the Trustee, at its address as shown
on the registration books maintained by the Paying Agent. The special
record date may be not more than thirty (30) days before the date set for
payment. The Paying Agent will mail notice of a special record date to the
Bondowners at least ten (10) days before the special record date. The
Paying Agent will promptly certify to the Authority, the Trustee and the
Remarketing Agent that it has mailed such notice to all Bondowners, and
such certificate will be conclusive evidence that notice was given in the
manner required hereby.
The Bonds are subject to mandatory redemption at any time at a
redemption price of 100% of the principal amount of the Bonds so redeemed
plus accrued interest in the event (i) the Company delivers to the Trustee
an opinion of nationally recognized bond counsel selected by the Company
and reasonably satisfactory to the Trustee ("Bond Counsel") stating that
interest on the Bonds is or will become includable in gross income of the
owners thereof for federal income tax purposes, or (ii) it is finally
determined by the Internal Revenue Service or a court of competent
jurisdiction, as a result of (A) a proceeding in which the Company has
participated or been given notice and an opportunity to participate, and,
(B) either (1) a failure by the Company (or the Seabrook Transferee as
defined in the Agreement) to observe any covenant or agreement undertaken
in or pursuant to the Agreement, or the inaccuracy of any representation
made by the Company (or the Seabrook Transferee) in or pursuant to the
Agreement, or (2) the Seabrook Transfer (as defined in the Agreement), that
interest payable on the Bonds is includable for federal income tax purposes
in the gross income of any owner thereof (other than an owner which is a
"substantial user" or a "related person" within the meaning of Section
147(a) of the Internal Revenue Code of 1986). Any determination under
clause (ii) above will not be considered final for this purpose until the
earliest of the conclusion of any appellate review, the denial of appellate
review or the expiration of the period for seeking appellate review.
Redemption under this paragraph shall be in whole unless not less than
forty-five (45) days prior to the redemption date the Company delivers to
the Trustee an opinion of Bond Counsel reasonably satisfactory to the
Trustee to the effect that a redemption of less than all of the Bonds will
preserve the tax-exempt status of interest on the remaining Bonds
outstanding subsequent to such redemption. Except as provided in the next
sentence, any such redemption shall be made on the 90th day after the date
on which the opinion described in clause (i) is delivered or the
determination described in clause (ii) becomes final or on such earlier
date as the Company may designate by notice given to the Trustee at least
forty-five (45) days prior to such designated date. Any Bond in the
Flexible Mode that has a Purchase Date prior to the redemption date
established for that Bond pursuant to the preceding sentence shall be
redeemed on that Purchase Date. If such redemption shall occur in
accordance with the terms of the Agreement, then such failure by the
Company (or the Seabrook Transferee as described above) to observe such
covenant or agreement, or the inaccuracy of any such representation will
not, in and of itself, constitute a default thereunder.
If the Trustee receives written notice from any Bondowner stating that
(i) such Bondowner has been notified in writing by the Internal Revenue
Service that it proposes to include the interest on the Bonds in the gross
income of such owner for federal income tax purposes, or any other
proceeding has been instituted against such owner which may lead to a like
determination, and (ii) such owner will afford the Company the opportunity
to participate at its own expense in the proceeding, either directly or in
the name of such owner, until the conclusion of any appellate review, and
the Trustee has examined such written notice and it appears to be accurate
on its face, then the Trustee shall promptly give notice thereof to the
Company, the Authority, and each Bondowner whose Bonds may be affected.
The Trustee shall thereafter keep itself reasonably informed of the
progress of any administrative proceedings or litigation relating to such
notice. Under the Agreement the Company is required to give the Trustee
written notice of such a final determination within forty-five (45) days of
such final determination.
If the Purchase Date of this bond is after the redemption date, notice
of redemption of this bond will be given by first class mail, postage
prepaid, not more than forty-five (45) nor less than thirty (30) days prior
to the redemption date to the REGISTERED OWNER at its registered address.
Failure to mail notice to the owner of any other Bond or any defect in the
notice to such other owner shall not affect the redemption of this bond.
This bond is transferable by the REGISTERED OWNER, in person or by its
attorney duly authorized in writing, at the office of the Paying Agent,
upon surrender of this bond to the Paying Agent for cancellation. Upon the
transfer, a new Bond or Bonds in authorized denominations of the same
aggregate principal amount will be issued to the transferee at the same
office. No transfer will be effective unless represented by such surrender
and reissue. This bond may also be exchanged at the office of the Paying
Agent for a new Bond or Bonds in authorized denominations of the same
aggregate principal amount without transfer to a new registered owner.
Exchanges and transfers will be without expense to the owner except for
applicable taxes or other governmental charges, if any.
The Bonds are issuable only in fully registered form and while in the
Flexible Mode shall be in denominations of $100,000 or any multiple of
$1,000 in excess of $100,000.
The Authority, the Trustee, the Paying Agent and the Company may treat
the REGISTERED OWNER as the absolute owner of this bond for all purposes,
notwithstanding any notice to the contrary.
No director, officer, employee or agent of the Authority nor any
person executing this bond (by facsimile signature or otherwise) shall be
personally liable, either jointly or severally, hereon or be subject to any
personal liability or accountability by reason of the issuance hereof.
This bond will not be valid until the Certificate of Authentication
has been signed by the Trustee or the Paying Agent.
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND ON THE BACK,
WHICH HAVE THE SAME EFFECT AS IF SET FORTH HERE.
BUSINESS FINANCE AUTHORITY
OF THE STATE OF NEW HAMPSHIRE
(Seal) By:________________________________
Title:
By:________________________________
Title:
Certificate of Authentication
This bond is one of the Bonds described in the Agreement.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
Date of Registration:
By:____________________________, or
Authorized Signature
By:___________________________________,
as Paying Agent
By:______________________________
Authorized Signature
Assignment
For value received the undersigned sells, assigns and transfers this
bond to
_____________________________________________________________
(Name and Address of Assignee)
_____________________________________________________________
_____________________________________________________________
Social Security or Other Identifying Number of Assignee
and irrevocably appoints ________________________________ attorney-in-fact
to transfer it on the books kept for registration of the bond, with full
power of substitution.
____________________________________
NOTE: The signature to this assignment must
correspond with the name as written on the face of
the bond without alteration or enlargement or
other change and must be guaranteed by a
Participant in a Recognized Signature Guaranty
Medallion Program.
Dated:
Signature Guaranteed:
____________________________________
Participant in a Recognized
Signature Guaranty Medallion Program
By:_____________________________
Authorized Signature
The following abbreviations, when used in the inscription on the face
of this bond, shall be construed as though they were written out in full
according to applicable law.
TEN COM - as tenants in common UNIF GIFT MIN ACT -
TEN ENT - as tenants by the entirety ______ Custodian _______
JT TEN - as joint tenants with rights (Cust) (Minor)
of survivorship and not as
tenants in common
Act ____________________
(State)
Additional abbreviations may also be used though not set forth in the list
above.
(b) Form of Weekly Bond. The 1993 Series E Bonds may be issued in
the Weekly Mode in substantially the form prescribed below.
$____________ No. R-
ANY BONDOWNER WHO FAILS TO DELIVER A BOND FOR PURCHASE AT THE TIMES AND AT
THE PLACE REQUIRED HEREIN SHALL HAVE NO FURTHER RIGHTS HEREUNDER EXCEPT THE
RIGHT TO RECEIVE THE PURCHASE PRICE HEREOF UPON PRESENTATION AND SURRENDER
OF THIS BOND TO THE PAYING AGENT AS DESCRIBED HEREIN, AND SHALL HOLD THIS
BOND AS AGENT FOR THE PAYING AGENT.
UNITED STATES OF AMERICA
STATE OF NEW HAMPSHIRE
BUSINESS FINANCE AUTHORITY
OF THE STATE OF NEW HAMPSHIRE
Pollution Control Refunding Revenue Bond
(Public Service Company of New Hampshire
Project - 1993 Tax-Exempt Series E)
REGISTERED OWNER:
PRINCIPAL AMOUNT: DOLLARS
INTEREST PAYMENT DATES: (i) the first Business Day of each calendar
month, and (ii) the Maturity Date.
MATURITY DATE: May 1, 2021
DATE OF THIS BOND:
(Date as of which Bonds of this
series were initially issued.)
MODE: Weekly
CUSIP:
THIS BOND DOES NOT CONSTITUTE AN INDEBTEDNESS OF THE STATE OF NEW
HAMPSHIRE OR OF THE AUTHORITY EXCEPT TO THE EXTENT PERMITTED BY NEW
HAMPSHIRE RSA CHAPTER 162-I. ALL AMOUNTS OWED HEREUNDER ARE PAYABLE ONLY
FROM THE SOURCES PROVIDED IN THE LOAN AND TRUST AGREEMENT DESCRIBED BELOW,
AND NO PUBLIC FUNDS MAY BE USED FOR THAT PURPOSE.
The Business Finance Authority of the State of New Hampshire (the
"Authority"), for value received, promises to pay to the REGISTERED OWNER,
or registered assigns, but solely from the moneys to be provided under the
Agreement mentioned below, upon presentation and surrender hereof, in
lawful money of the United States of America, the PRINCIPAL AMOUNT on the
MATURITY DATE, unless paid earlier as provided below, with interest from
the most recent INTEREST PAYMENT DATE to which interest has been paid or
duly provided for or, if no interest has been paid, from the DATE OF THIS
BOND set forth above, until paid in full, at the rates set forth below,
payable on each INTEREST PAYMENT DATE. Until conversion to the Flexible,
Multiannual or Fixed Rate Mode as provided below, this bond shall bear
interest at the Weekly Rate. The Weekly Rate for this bond shall be the
rate of interest determined by the Remarketing Agent designated as provided
in the Agreement (herein, with its successors, the "Remarketing Agent"),
for each Rate Period, as defined below, to be the lowest rate which in its
judgment, on the basis of prevailing financial market conditions, would
permit the sale of the Bonds (as defined below) in the Weekly Mode at par
plus accrued interest on and as of the Effective Date, as defined below,
but not in excess of the Maximum Interest Rate. If this bond is converted
to the Flexible, Multiannual or Fixed Rate Mode it shall bear interest at
the Flexible, Multiannual or Fixed Rate, as the case may be, as defined in
the Agreement. The Remarketing Agent shall determine the initial Weekly
Rate on or before the date of issue in or of conversion to the Weekly Mode,
which rate shall remain in effect as provided in the Agreement. Thereafter,
the Remarketing Agent shall redetermine the Weekly Rate for each Rate
Period as provided below. The amount of interest due on any INTEREST
PAYMENT DATE shall be the amount of unpaid interest accrued on this bond
through the day preceding such INTEREST PAYMENT DATE.
This bond is one of a series of Pollution Control Refunding Revenue
Bonds (Public Service Company of New Hampshire Project - 1993 Tax-Exempt
Series E) (the "Bonds") in the aggregate principal amount of $44,800,000
issued under New Hampshire RSA Chapter 162-I (the "Act"). The proceeds of
the Bonds are being loaned to Public Service Company of New Hampshire (the
"Company"), a New Hampshire corporation, pursuant to a Series E Loan and
Trust Agreement dated as of May 1, 1991, as supplemented and amended by a
First Supplement dated as of December 1, 1993 (the "Agreement") among the
Company, the Authority and State Street Bank and Trust Company, as Trustee
(the "Trustee") to refund a like principal amount of the Authority's
$114,500,000 Pollution Control Revenue Bonds (Public Service Company of New
Hampshire Project - 1991 Taxable Series E) (the "1991 Bonds"), which were
originally issued to finance certain costs associated with the Company's
ownership interest in air or water pollution control and sewage or solid
waste disposal facilities installed for use by Unit No. 1 at the nuclear
electric generating station (the "Station") in Seabrook, New Hampshire (the
"Project Facilities"). Pursuant to the Agreement, the Company has
unconditionally agreed to repay such loan in the amounts and at the times
necessary to pay the principal of, premium, if any, and interest on the
Bonds when due. To evidence and secure such loan and the Company's
reimbursement and certain other obligations under the Reimbursement
Agreement (as defined below), the Company has issued and delivered to the
Trustee its First Mortgage Bonds, Series G (the "Series G First Mortgage
Bonds") issued under the First Mortgage Indenture dated as of August 15,
1978, as amended, and the Tenth Supplemental Indenture thereto dated as of
May 1, 1991 between the Company and First Fidelity Bank, National
Association, New Jersey, as Trustee (as amended and supplemented from time
to time, the "First Mortgage Bond Indenture") in an aggregate principal
amount, and with an interest rate, maturity date and redemption provisions
corresponding to those of the Bonds and certain other bonds issued under
the Agreement, including the 1991 Bonds. As provided in the Agreement,
payments of principal of, and premium, if any, and interest on the Series G
First Mortgage Bonds shall, upon receipt by the Trustee, be deemed to
constitute payments in corresponding amounts by the Company in respect of
the Bonds and certain other bonds issued under the Agreement, including the
1991 Bonds. Reference is hereby made to the Agreement for the provisions
thereof with respect to the rights, limitations of rights, duties,
obligations and immunities of the Company, the Authority, the Trustee, the
Paying Agent, and the Bondowners, including the order of payments in the
event of insufficient funds, the disposition of unclaimed moneys held by
the Trustee and restrictions on the rights of owners of the Bonds to bring
suit. The Agreement may be amended to the extent and in the manner
provided therein. Copies of the Agreement are available for inspection at
the corporate trust office of the Trustee.
The Purchase Price (as defined below) and principal of and interest on
this bond while it is in the Weekly Mode is also payable from moneys drawn
by the Paying Agent on an irrevocable letter of credit for the Bonds and
certain other bonds issued under the Agreement, including the 1991 Bonds
(together with any extensions, amendments, and renewals thereof, the
"Letter of Credit"), issued by Citibank, N.A. pursuant to the terms of a
Series E Letter of Credit and Reimbursement Agreement dated as of May 1,
1991 (the "Reimbursement Agreement") by and among the Company, Citibank,
N.A. (together with any other issuer of a Credit Facility, the "Bank") and
the participating banks named therein. The Paying Agent may draw on the
Letter of Credit presently in place for the payment of up to forty-five
(45) days' interest for Bonds in the Weekly Mode. The Letter of Credit
initially expires on May 16, 1995 but may be terminated earlier upon the
occurrence of certain events set forth in the Agreement and the
Reimbursement Agreement or extended as provided in the Reimbursement
Agreement. Unless the Letter of Credit is extended or renewed or a
substitute letter of credit (collectively with the Letter of Credit, a
"Credit Facility") is provided in accordance with the Agreement, the Bonds
will become subject to mandatory purchase as described below. The Company
may substitute a new Credit Facility as provided in the Agreement.
In case any Event of Default occurs and is continuing, the principal
amount of this bond together with accrued interest may become or be
declared immediately due and payable in the manner and with the effect
provided in the Agreement.
Unless otherwise defined herein, capitalized terms used in this bond
shall have the meaning given them in the Agreement. The following terms
are defined as follows:
"Business Day" means a day (i) that is not a Sunday or legal holiday
or a day on which banking institutions are authorized pursuant to law to
close, (ii) that is not a day on which the corporate trust office of the
First Mortgage Bond Trustee is not open for business, (iii) that is a day
on which banks are not required or authorized to close in New York, New
York, and (iv) that is a day on which banking institutions in all of the
cities in which the principal offices of the Trustee and the Paying Agent
and, if applicable, the Remarketing Agent and the Bank are located are not
required or authorized to remain closed and on which the New York Stock
Exchange is not closed.
"Effective Date" means, with respect to a Bond in the Flexible, Weekly
and Multiannual Modes, the date on which a new Rate Period for that Bond
takes effect.
"Mode" means the period for and the manner in which the interest rates
on the Bonds are set and includes the Flexible Mode, the Weekly Mode, the
Multiannual Mode and the Fixed Rate Mode.
"Purchase Date" means, while this bond is in the Weekly Mode, the date
on which this bond shall be required to be purchased pursuant to a
mandatory or optional tender in accordance with the provisions hereof.
"Rate Period" or "Period" means, when used with respect to any
particular rate of interest for a Bond in the Flexible, Weekly or
Multiannual Mode, the period during which such rate of interest determined
for such Bond will remain in effect as described herein. While this bond
is in the Weekly Mode, a new interest rate shall take effect on the date
such Mode takes effect and thereafter on each Wednesday.
At the option of the Company and upon certain conditions provided for
in the Agreement described below, all or a portion of the Bonds (a) may be
converted or reconverted from time to time to or from the Weekly Mode or
Multiannual Mode, which means that the Rate Period is, respectively, one
week or one year or any multiple of one year, (b) may be converted or
reconverted from time to time to or from the Flexible Mode, and will have
Rate Periods of from one to 270 days as provided herein, or (c) may be
converted to the Fixed Rate Mode; provided, however, that in the
Multiannual Mode the first rate period occurring after conversion to such
Mode may be shorter than the applicable multiple of one year as provided in
the Agreement.
While this bond is in the Weekly Mode, conversions to any other Mode
may take place only on the first Business Day of any calendar month upon
thirty (30) days' prior written notice from the Paying Agent to the
REGISTERED OWNER of this bond. Conversion of this bond to another Mode
shall be subject to the conditions set forth in the Agreement. In the
event that the conditions for a proposed conversion to a new Mode are not
met (i) such new Mode shall not take effect on the proposed conversion
date, notwithstanding any prior notice to the Bondowners of such
conversion, (ii) this bond shall automatically convert to the Flexible Mode
with a Rate Period of one day, and (iii) this bond shall be subject to
mandatory tender for purchase as provided below. In no event shall the
failure of this bond to be converted to another Mode be deemed to be a
Default or an Event of Default under the Agreement as long as the Purchase
Price (as defined below) is made available on the failed conversion date to
owners of all Bonds that were to have been converted.
When this bond is in the Weekly Mode, the Weekly Rate in effect for
each Rate Period (the "Effective Rate" for such Period) shall be determined
not later than the Business Day next preceding the Effective Date. If the
Remarketing Agent fails to make such determination or fails to announce the
Effective Rate as required with respect to any Bonds in the Weekly Mode, or
if for any reason such manner of determination shall be determined to be
invalid or unenforceable, the rate on such Bonds to take effect on that
Effective Date shall be the Weekly Rate in effect on the day preceding such
date. The Remarketing Agent shall announce the Effective Rate by telephone
to the Paying Agent on the date of determination thereof, and shall
promptly confirm such notice in writing. While this bond is in the Weekly
Mode, any Bondowner may ascertain the Effective Rate at any time by
contacting the Paying Agent or the Remarketing Agent.
Each determination and redetermination of the Weekly Rate shall be
conclusive and binding on the Authority, the Trustee, the Paying Agent, the
Bank, the Company and the Bondowners.
While this bond is in the Weekly Mode, interest shall be computed on
the basis of a 365- or 366-day year, as appropriate, and actual days
elapsed. From and after the date on which this bond becomes due, any
unpaid principal will bear interest at the then effective interest rate
until paid or duly provided for.
While this bond is in the Weekly Mode the principal of this bond is
payable when due by wire or bank transfer of immediately available funds
within the continental United States to the REGISTERED OWNER hereof but
only upon presentation and surrender of this bond at the office of
BankAmerica National Trust Company, New York, New York, as Paying Agent,
(with its successors in such capacity, the "Paying Agent"). Interest on
this bond while in the Weekly Mode is payable in immediately available
funds by wire or bank transfer within the continental United States from
the Paying Agent to the REGISTERED OWNER, determined as of the close of
business on the applicable record date, at its address as shown on the
registration books maintained by the Paying Agent. The Purchase Price (as
defined below) of Bonds tendered for purchase shall be paid as provided
below.
The record date for payment of interest while this bond is in the
Weekly Mode is the Business Day preceding the date on which interest is to
be paid. With respect to overdue interest or interest payable on
redemption of this bond other than on an INTEREST PAYMENT DATE or interest
on any overdue amount, the Trustee may establish a special record date.
The special record date may be not more than thirty (30) days before the
date set for payment. The Paying Agent will mail notice of a special
record date to the Bondowners at least ten (10) days before the special
record date. The Paying Agent will promptly certify to the Authority, the
Trustee and the Remarketing Agent that it has mailed such notice to all
Bondowners, and such certificate will be conclusive evidence that notice
was given in the manner required hereby.
While this bond is in the Weekly Mode, the REGISTERED OWNER shall have
the right to tender this bond for purchase in multiples of $100,000 at a
price (the "Purchase Price") equal to 100% of the principal amount thereof,
plus accrued interest, if any, to the Purchase Date, upon compliance with
the conditions described below, provided that if the Purchase Date is an
INTEREST PAYMENT DATE, accrued interest shall be paid separately, and not
as part of the Purchase Price on such date. In order to exercise the right
to tender, the REGISTERED OWNER must deliver to the Paying Agent a written
irrevocable notice of tender substantially in the form of the Bondowner's
Election Notice set forth hereon or such other form as may be satisfactory
to the Paying Agent. While this bond is in the Weekly Mode, it will be
purchased on the Business Day specified in such Bondowner's Election
Notice, provided such date is at least seven calendar days after receipt by
the Paying Agent of such notice. If the REGISTERED OWNER of this bond has
elected to require purchase as provided above, the REGISTERED OWNER shall
be deemed, by such election, to have agreed irrevocably to sell this bond
to any purchaser determined in accordance with the provisions of the
Agreement on the date fixed for purchase at the Purchase Price.
Tender of this bond will not be effective and this bond will not be
purchased if at the time fixed for purchase an acceleration of the maturity
of the Bonds shall have occurred and not have been annulled in accordance
with the Agreement. Notice of tender of this bond is irrevocable. All
notices of tender of Bonds shall be made to the Paying Agent at 2 Rector
Street, New York, New York, or such other address specified in writing by
the Paying Agent to the Bondowners. All deliveries of tendered Bonds,
including deliveries of Bonds subject to mandatory tender, shall be made to
the Paying Agent at 2 Rector Street, New York, New York, Attention:
Corporate Trust Department, or such other address specified in writing by
the Paying Agent to the Bondowners.
This bond is subject to mandatory tender for purchase at the Purchase
Price (i) on the date of conversion or proposed conversion from one Mode to
another Mode and (ii) on (a) the effective date of a substitute Credit
Facility unless the Trustee receives written evidence from Moody's (if this
bond is rated by Moody's) and S&P (if this bond is rated by S&P) that such
substitution will not result in a withdrawal or reduction (excluding a
withdrawal or reduction resulting from a change in Modes) of the rating of
this bond or (b) a date that is not more than fifteen (15) or less than ten
(10) days prior to the expiration or termination of the Credit Facility
other than upon conversion to a new Mode. Notice of mandatory tender shall
be given or caused to be given by the Paying Agent in writing to the
REGISTERED OWNER at least thirty (30) days prior to the mandatory Purchase
Date. THE OWNER OF THIS BOND, BY ACCEPTANCE HEREOF, AGREES TO SELL AND
SURRENDER THIS BOND AT SUCH PRICE TO ANY PURCHASER DETERMINED IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT IN THE EVENT OF SUCH MANDATORY TENDER
AND, ON SUCH PURCHASE DATE, TO SURRENDER THIS BOND TO THE PAYING AGENT FOR
PAYMENT OF THE PURCHASE PRICE. From and after the Purchase Date, no
further interest on this bond shall be payable to the REGISTERED OWNER,
provided that there are sufficient funds available on the Effective Date to
pay the Purchase Price.
The Purchase Price of this bond shall be paid to the REGISTERED OWNER
by the Paying Agent on the Delivery Date, which shall be the Purchase Date
or any subsequent Business Day on which this bond is delivered to the
Paying Agent. The Purchase Price of this bond shall be paid only upon
surrender of this bond to the Paying Agent as provided herein. From and
after the Purchase Date, no further interest on this bond shall be payable
to the REGISTERED OWNER who gave notice of tender for purchase, provided
that there are sufficient funds available on the Purchase Date to pay the
Purchase Price. The Purchase Price of Bonds tendered for purchase is
payable for Bonds in the Weekly Mode by wire or bank transfer within the
continental United States in immediately available funds from the Paying
Agent to the REGISTERED OWNER at its address shown on the registration
books maintained by the Paying Agent. If on any date this bond is subject
to mandatory tender for purchase or is required to be purchased at the
election of the REGISTERED OWNER, payment of the Purchase Price of this
bond to such owner shall be made on the Purchase Date if presentation and
surrender of this bond is made prior to 11:00 A.M., New York City time, on
the Purchase Date or on such later Business Day upon which presentation and
surrender of this bond is made prior to 11:00 A.M., New York City time.
Bonds in the Weekly Mode are subject to redemption in whole or in part
at the direction of the Company on any INTEREST PAYMENT DATE at a
redemption price of par plus accrued interest.
The Bonds are subject to mandatory redemption at any time at a
redemption price of 100% of the principal amount of the Bonds so redeemed
plus accrued interest in the event (i) the Company delivers to the Trustee
an opinion of nationally recognized bond counsel selected by the Company
and reasonably satisfactory to the Trustee ("Bond Counsel") stating that
interest on the Bonds is or will become includable in gross income of the
owners thereof for federal income tax purposes, or (ii) it is finally
determined by the Internal Revenue Service or a court of competent
jurisdiction, as a result of (A) a proceeding in which the Company has
participated or been given notice and an opportunity to participate, and,
(B) either (1) a failure by the Company (or the Seabrook Transferee as
defined in the Agreement) to observe any covenant or agreement undertaken
in or pursuant to the Agreement, or the inaccuracy of any representation
made by the Company (or the Seabrook Transferee) in or pursuant to the
Agreement, or (2) the Seabrook Transfer (as defined in the Agreement), that
interest payable on the Bonds is includable for federal income tax purposes
in the gross income of any owner thereof (other than an owner which is a
"substantial user" or a "related person" within the meaning of Section
147(a) of the Internal Revenue Code of 1986). Any determination under
clause (ii) above will not be considered final for this purpose until the
earliest of the conclusion of any appellate review, the denial of appellate
review or the expiration of the period for seeking appellate review.
Redemption under this paragraph shall be in whole unless not less than
forty-five (45) days prior to the redemption date the Company delivers to
the Trustee an opinion of Bond Counsel reasonably satisfactory to the
Trustee to the effect that a redemption of less than all of the Bonds will
preserve the tax-exempt status of interest on the remaining Bonds
outstanding subsequent to such redemption. Except as provided in the next
sentence, any such redemption shall be made on the 90th day after the date
on which the opinion described in clause (i) is delivered or the
determination described in clause (ii) becomes final or on such earlier
date as the Company may designate by notice given to the Trustee at least
forty-five (45) days prior to such designated date. Any Bond in the
Flexible Mode that has a Purchase Date prior to the redemption date
established for that Bond pursuant to the preceding sentence shall be
redeemed on that Purchase Date. If such redemption shall occur in
accordance with the terms of the Agreement, then such failure by the
Company (or the Seabrook Transferee as described above) to observe such
covenant or agreement, or the inaccuracy of any such representation will
not, in and of itself, constitute a default thereunder.
If the Trustee receives written notice from any Bondowner stating that
(i) such Bondowner has been notified in writing by the Internal Revenue
Service that it proposes to include the interest on the Bonds in the gross
income of such owner for federal income tax purposes, or any other
proceeding has been instituted against such owner which may lead to a like
determination, and (ii) such owner will afford the Company the opportunity
to participate at its own expense in the proceeding, either directly or in
the name of such owner, until the conclusion of any appellate review, and
the Trustee has examined such written notice and it appears to be accurate
on its face, then the Trustee shall promptly give notice thereof to the
Company, the Authority, and each Bondowner whose Bonds may be affected.
The Trustee shall thereafter keep itself reasonably informed of the
progress of any administrative proceedings or litigation relating to such
notice. Under the Agreement the Company is required to give the Trustee
written notice of such a final determination within forty-five (45) days of
such final determination.
If less than all of the Outstanding Bonds are to be called for redem-
ption, the Bonds (or portions thereof) to be redeemed shall be selected as
provided in the Agreement with Bonds in the Weekly Mode being redeemed in
units of $100,000.
In the event this bond is selected for redemption, notice will be
mailed no more than forty-five (45) nor less than thirty (30) days prior to
the redemption date to the REGISTERED OWNER at its address shown on the
registration books maintained by the Paying Agent. Failure to mail notice
to the owner of any other Bond or any defect in the notice to such an owner
shall not affect the redemption of this bond.
If this bond is of a denomination in excess of one hundred thousand
dollars ($100,000), portions of the principal amount in the amount of one
hundred thousand dollars ($100,000) or any multiple thereof may be
redeemed. If less than all of the principal amount is to be redeemed, upon
surrender of this bond to the Paying Agent, there will be issued to the
REGISTERED OWNER, without charge, a new Bond or Bonds, at the option of the
REGISTERED OWNER, for the unredeemed principal amount.
Notice of redemption having been duly mailed, this bond, or the
portion called for redemption, will become due and payable on the
redemption date at the applicable redemption price and, moneys for the
redemption having been deposited with the Paying Agent, from and after the
date fixed for redemption, interest on this bond (or such portion) will no
longer accrue.
IN CERTAIN CIRCUMSTANCES SET OUT HEREIN, THIS BOND (OR PORTION HEREOF)
IS SUBJECT TO PURCHASE OR REDEMPTION, IN EACH CASE UPON NOTICE TO OR FROM
THE OWNER HEREOF AS OF A DATE PRIOR TO SUCH PURCHASE OR REDEMPTION. IN
EACH SUCH EVENT AND UPON DEPOSIT OF THE PURCHASE OR REDEMPTION PRICE WITH
THE PAYING AGENT ON THE PURCHASE OR REDEMPTION DATE, AS THE CASE MAY BE,
THIS BOND (OR PORTION HEREOF) SHALL CEASE TO BE OUTSTANDING UNDER THE
AGREEMENT, INTEREST HEREON SHALL CEASE TO ACCRUE AS OF THE PURCHASE OR
REDEMPTION DATE, AND THE REGISTERED OWNER HEREOF SHALL BE ENTITLED ONLY TO
RECEIVE THE PURCHASE OR REDEMPTION PRICE SO DEPOSITED WITH THE PAYING AGENT
UPON SURRENDER OF THIS CERTIFICATE TO THE PAYING AGENT.
This bond is transferable by the REGISTERED OWNER, in person or by its
attorney duly authorized in writing, at the office of the Paying Agent,
upon surrender of this bond to the Paying Agent for cancellation. Upon the
transfer, a new Bond or Bonds in authorized denominations of the same
aggregate principal amount will be issued to the transferee at the same
office. No transfer will be effective unless represented by such surrender
and reissue. This bond may also be exchanged at the office of the Paying
Agent for a new Bond or Bonds in authorized denominations of the same
aggregate principal amount without transfer to a new registered owner.
Exchanges and transfers will be without expense to the owner except for
applicable taxes or other governmental charges, if any. The Paying Agent
will not be required to make an exchange or transfer of this bond (except
in connection with any optional or mandatory tender of this bond) (i) if
this bond (or any portion thereof) has been selected for redemption or (ii)
during the fifteen (15) days preceding any date fixed for selection for
redemption if this bond (or any portion thereof) is eligible to be selected
for redemption.
The Bonds are issuable only in fully registered form and while in the
Weekly Mode shall be in denominations of $100,000 or any multiple thereof.
The Authority, the Trustee, the Paying Agent and the Company may treat
the REGISTERED OWNER as the absolute owner of this bond for all purposes,
notwithstanding any notice to the contrary.
No director, officer, employee or agent of the Authority nor any
person executing this bond (by facsimile signature or otherwise) shall be
personally liable, either jointly or severally, hereon or be subject to any
personal liability or accountability by reason of the issuance hereof.
This bond will not be valid until the Certificate of Authentication
has been signed by the Trustee or the Paying Agent.
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND ON THE BACK,
WHICH HAVE THE SAME EFFECT AS IF SET FORTH HERE.
BUSINESS FINANCE AUTHORITY
OF THE STATE OF NEW HAMPSHIRE
(Seal) By:________________________________
Title:
By:________________________________
Title:
Certificate of Authentication
This bond is one of the Bonds described in the Agreement.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
Date of Registration: By:____________________________, or
Authorized Signature
By: BANKAMERICA NATIONAL TRUST COMPANY, as
Paying Agent
By: __________________________
Authorized Signature
Assignment
For value received the undersigned sells, assigns and transfers this
bond to
_____________________________________________________________
(Name and Address of Assignee)
_____________________________________________________________
_____________________________________________________________
Social Security or Other Identifying Number of Assignee
and irrevocably appoints ________________________________ attorney-in-fact
to transfer it on the books kept for registration of the bond, with full
power of substitution.
___________________________________
NOTE: The signature to this assignment must
correspond with the name as written on the face of
the bond without alteration or enlargement or
other change and must be guaranteed by a
Participant in a Recognized Signature Guaranty
Medallion Program.
Dated:
Signature Guaranteed:
____________________________________
Participant in a Recognized
Signature Guaranty Medallion Program
By:_________________________________
Authorized Signature
The following abbreviations, when used in the inscription on the face
of this bond, shall be construed as though they were written out in full
according to applicable law.
TEN COM - as tenants in common UNIF GIFT MIN ACT -
TEN ENT - as tenants by the entirety ______ Custodian _______
JT TEN - as joint tenants with rights (Cust) (Minor)
of survivorship and not as
tenants in common
Act ____________________
(State)
Additional abbreviations may also be used though not set forth in the list
above.
The following is the Bondowner's Election Notice described herein:
BONDOWNER'S ELECTION NOTICE
Business Finance Authority of the State of New
Hampshire Pollution Control Refunding Revenue Bonds
(Public Service Company of New Hampshire Project -
1993 Tax-Exempt Series E)
Principal Principal Amount Bond Purchase
Amount CUSIP Tendered for Purchase Numbers Date
The undersigned hereby certifies that it is the registered owner of the
Bonds described above (the "Tendered Bonds"), all of which are in the
Weekly Mode, and hereby agrees that the delivery of this instrument of
transfer to the Paying Agent constitutes an irrevocable offer to sell the
Tendered Bonds to the Company or its designee on the Purchase Date, which
shall be a Business Day at least seven (7) calendar days following delivery
of this instrument, at a purchase price equal to the unpaid principal
balance thereof plus accrued and unpaid interest thereon to the Purchase
Date (the "Purchase Price"). The undersigned acknowledges and agrees that
this election notice is irrevocable and that the undersigned will have no
further rights with respect to the Tendered Bonds except payment, upon
presentation and surrender of the Tendered Bonds, of the Purchase Price by
payment by wire or bank transfer within the continental United States from
the Paying Agent to the undersigned at its address as shown on the
registration books of the Paying Agent (i) on the Purchase Date if the
Tendered Bonds shall have been surrendered to the Paying Agent prior to
11:00 A.M., New York City time, on the Purchase Date or (ii) on any
Delivery Date subsequent to the Purchase Date on which Tendered Bonds are
delivered to the Paying Agent by 11:00 A.M., New York City time, provided
that for so long as the Bonds are in the Book-Entry Only System, physical
surrender of the Bonds to the Paying Agent shall not be required and the
Bonds shall be tendered pursuant to the procedures described in Subsection
303(g) of the First Supplement referred to below.
Except as otherwise indicated herein and unless the context otherwise
requires, the terms used herein shall have the meanings set forth in the
Series E Loan and Trust Agreement dated as of May 1, 1991 and in the First
Supplement dated as of December 1, 1993 relating to the Bonds.
Date: _________________ Signature(s)
___________________________________
___________________________________
___________________________________
___________________________________
Street City State Zip
IMPORTANT: The above signature(s) must correspond with the name(s) as
set forth on the face of the Tendered Bond(s) with respect to which this
Bondowner's Election Notice is being delivered without any change wha-
tsoever. If this notice is signed by a person other than the registered
owner of any Tendered Bond(s), the Tendered Bond(s) must be either endorsed
on the Assignment appearing on each Bond or accompanied by appropriate bond
powers, in each case signed exactly as the name or names of the registered
owner or owners appear on the bond register. The method of presenting this
notice to the Paying Agent is the choice of the person making such
presentation. If it is made by mail, it should be by registered mail with
return receipt requested.
* * *
(c) Form of Multiannual Bond. The 1993 Series E Bonds may be issued
in the Multiannual Mode in substantially the form prescribed below.
$____________ No. R-
ANY BONDOWNER WHO FAILS TO DELIVER A BOND FOR PURCHASE AT THE TIMES AND AT
THE PLACE REQUIRED HEREIN SHALL HAVE NO FURTHER RIGHTS HEREUNDER EXCEPT THE
RIGHT TO RECEIVE THE PURCHASE PRICE HEREOF UPON PRESENTATION AND SURRENDER
OF THIS BOND TO THE PAYING AGENT AS DESCRIBED HEREIN, AND SHALL HOLD THIS
BOND AS AGENT FOR THE PAYING AGENT.
UNITED STATES OF AMERICA
STATE OF NEW HAMPSHIRE
BUSINESS FINANCE AUTHORITY
OF THE STATE OF NEW HAMPSHIRE
Pollution Control Refunding Revenue Bond
(Public Service Company of New Hampshire
Project - 1993 Tax-Exempt Series E)
REGISTERED OWNER:
PRINCIPAL AMOUNT: DOLLARS
INTEREST PAYMENT DATES: (i) the first day of the sixth full calendar
month after the Mode takes effect and the
first day of each sixth calendar month there-
after, and (ii) the Maturity Date.
CURRENT EFFECTIVE DATE:
INTEREST RATE:
(To Next Purchase Date)
NEXT PURCHASE DATE:
COMMENCEMENT DATE OF RATE PERIOD:
MATURITY DATE: May 1, 2021
DATE OF THIS BOND:
(Date as of which Bonds of this
series were initially issued.)
MODE: Multiannual
CUSIP:
THIS BOND DOES NOT CONSTITUTE AN INDEBTEDNESS OF THE STATE OF NEW
HAMPSHIRE OR OF THE AUTHORITY EXCEPT TO THE EXTENT PERMITTED BY NEW
HAMPSHIRE RSA CHAPTER 162-I. ALL AMOUNTS OWED HEREUNDER ARE PAYABLE ONLY
FROM THE SOURCES PROVIDED IN THE LOAN AND TRUST AGREEMENT DESCRIBED BELOW,
AND NO PUBLIC FUNDS MAY BE USED FOR THAT PURPOSE.
The Business Finance Authority of the State of New Hampshire (the
"Authority"), for value received, promises to pay to the REGISTERED OWNER,
or registered assigns, but solely from the moneys to be provided under the
Agreement mentioned below, upon presentation and surrender hereof, in
lawful money of the United States of America, the PRINCIPAL AMOUNT on the
MATURITY DATE, unless paid earlier as provided below, with interest from
the most recent INTEREST PAYMENT DATE to which interest has been paid or
duly provided for or, if no interest has been paid, from the DATE OF THIS
BOND set forth above, until paid in full, at the rates set forth below,
payable on each INTEREST PAYMENT DATE. Until conversion to the Flexible,
Weekly or Fixed Rate as provided below, this bond shall bear interest at
the Multiannual Rate. The Multiannual Rate shall be the rate of interest
determined by the Remarketing Agent designated as provided in the Agreement
(herein, with its successors, the "Remarketing Agent"), for each Rate
Period, as defined below, to be the lowest rate which in its judgment, on
the basis of prevailing financial market conditions, would permit the sale
of the Bonds (as defined below) with the same Rate Period at par plus
accrued interest on and as of the Effective Date, as defined below. If
this bond is converted to the Flexible, Weekly, or Fixed Rate Mode it shall
bear interest at the Flexible, Weekly or Fixed Rate, as the case may be, as
defined in the Agreement. The Remarketing Agent shall determine the
initial Multiannual Rate on or before the date of issue in or of conversion
to the Multiannual Mode, which rate shall remain in effect as provided in
the Agreement. Thereafter, the Remarketing Agent shall redetermine the
Multiannual Rate for each Rate Period as provided below. If any payment,
redemption or maturity date for principal, premium or interest shall not be
a Business Day, then the payment thereof may be made on the next succeeding
Business Day with the same force and effect as if made on the specified
payment date and no interest shall accrue for the period after the
specified payment date.
This bond is one of a series of Pollution Control Refunding Revenue
Bonds (Public Service Company of New Hampshire Project - 1993 Tax-Exempt
Series E) (the "Bonds") in the aggregate principal amount of $44,800,000
issued under New Hampshire RSA Chapter 162-I (the "Act"). The proceeds of
the Bonds are being loaned to Public Service Company of New Hampshire (the
"Company"), a New Hampshire corporation, pursuant to a Series E Loan and
Trust Agreement dated as of May 1, 1991, as supplemented and amended by a
First Supplement dated as of December 1, 1993 (the "Agreement") among the
Company, the Authority and State Street Bank and Trust Company, as Trustee
(the "Trustee") to refund a like principal amount of the Authority's
$114,500,000 Pollution Control Revenue Bonds (Public Service Company of New
Hampshire Project - 1991 Taxable Series E) (the "1991 Bonds"), which were
originally issued to finance certain costs associated with the Company's
ownership interest in air or water pollution control and sewage or solid
waste disposal facilities installed for use by Unit No. 1 at the nuclear
electric generating station (the "Station") in Seabrook, New Hampshire (the
"Project Facilities"). Pursuant to the Agreement, the Company has
unconditionally agreed to repay such loan in the amounts and at the times
necessary to pay the principal of, premium, if any, and interest on the
Bonds when due. To evidence and secure such loan and the Company's
reimbursement and certain other obligations, if any, under the
Reimbursement Agreement, (as defined in the Agreement), the Company has
issued and delivered to the Trustee its First Mortgage Bonds, Series G (the
"Series G First Mortgage Bonds") issued under the First Mortgage Indenture
dated as of August 15, 1978, as amended, and the Tenth Supplemental
Indenture thereto dated as of May 1, 1991 between the Company and First
Fidelity Bank, National Association, New Jersey, as Trustee (as amended and
supplemented from time to time, the "First Mortgage Bond Indenture") in an
aggregate principal amount, and with an interest rate, maturity date and
redemption provisions corresponding to those of the Bonds and certain other
bonds issued under the Agreement, including the 1991 Bonds. As provided in
the Agreement, payments of principal of, and premium, if any, and interest
on the Series G First Mortgage Bonds shall, upon receipt by the Trustee, be
deemed to constitute payments in corresponding amounts by the Company in
respect of the Bonds and certain other bonds issued under the Agreement,
including the 1991 Bonds. Reference is hereby made to the Agreement for
the provisions thereof with respect to the rights, limitations of rights,
duties, obligations and immunities of the Company, the Authority, the
Trustee, the Paying Agent, and the Bondowners, including the order of
payments in the event of insufficient funds, the disposition of unclaimed
moneys held by the Trustee and restrictions on the rights of owners of the
Bonds to bring suit. The Agreement may be amended to the extent and in the
manner provided therein. Copies of the Agreement are available for
inspection at the corporate trust office of the Trustee.
In case any Event of Default occurs and is continuing, the principal
amount of this bond together with accrued interest may become or be
declared immediately due and payable in the manner and with the effect
provided in the Agreement.
Unless otherwise defined herein, capitalized terms used in this bond
shall have the meaning given them in the Agreement. The following terms
are defined as follows:
"Business Day" means a day (i) that is not a Sunday or legal holiday
or a day on which banking institutions are authorized pursuant to law to
close, (ii) that is not a day on which the corporate trust office of the
First Mortgage Bond Trustee is not open for business, (iii) that is a day
on which banks are not required or authorized to close in New York, New
York, and (iv) that is a day on which banking institutions in all of the
cities in which the principal offices of the Trustee and the Paying Agent
and, if applicable, the Remarketing Agent and the Bank (as defined in the
Agreement) are located are not required or authorized to remain closed and
on which the New York Stock Exchange is not closed.
"Effective Date" means, with respect to a Bond in the Flexible, Weekly
and Multiannual Modes, the date on which a new Rate Period for that Bond
takes effect.
"Mode" means the period for and the manner in which the interest rates
on the Bonds are set and includes the Flexible Mode, the Weekly Mode, the
Multiannual Mode and the Fixed Rate Mode.
"Purchase Date" means, while this bond is in a Multiannual Mode, the
date on which this bond shall be required to be purchased pursuant to a
mandatory tender in accordance with the provisions hereof.
"Rate Period" or "Period" means, when used with respect to any
particular rate of interest for a Bond in the Flexible, Weekly or
Multiannual Mode, the period during which such rate of interest determined
for such Bond will remain in effect as described herein.
At the option of the Company and upon certain conditions provided for
in the Agreement described below, all or a portion of the Bonds (a) may be
converted or reconverted from time to time to or from the Weekly Mode or
Multiannual Mode, which means that the Rate Period is, respectively, one
week or one year or any multiple of one year, (b) may be converted or
reconverted from time to time to or from the Flexible Mode, and will have
Rate Periods of from one to 270 days as provided herein, or (c) may be
converted to the Fixed Rate Mode; provided, however, that in the
Multiannual Mode the first rate period occurring after conversion to such
Mode may be shorter or longer than the applicable multiple of one year as
provided in the Agreement. While this bond is in the Multiannual Mode, a
new interest rate shall take effect on the date such Mode takes effect and
thereafter on the INTEREST PAYMENT DATE ending the Rate Period designated
by the Company.
While this bond is in the Multiannual Mode, conversions to any other
Mode, or conversions to new Rate Periods of the same or different lengths
while in the Multiannual Mode, may take place only on a date which would
have been an Effective Date for this bond, or if conversion is to the
Flexible or Weekly Mode and such day is not a Business Day, the first
Business Day thereafter. Conversion of this bond to another Mode, or to a
new Rate Period in the Multiannual Mode of the same or a different length,
shall be subject to the conditions set forth in the Agreement. In the
event that the conditions for a proposed conversion to a new Mode, or to a
new Rate Period in the Multiannual Mode of the same or different length,
are not met (i) such new Mode or Rate Period shall not take effect on the
proposed conversion date, notwithstanding any prior notice to the
Bondowners of such conversion and (ii) this bond shall automatically
convert to the Flexible Mode with a Rate Period of one day. In no event
shall the failure of this bond to be converted to another Mode or Rate
Period be deemed to be a Default or an Event of Default under the Agreement
as long as the Purchase Price (as defined below) is made available on the
failed conversion date to owners of all Bonds that were to have been
converted.
When this bond is in any Multiannual Mode, the Multiannual Rate in
effect for each Rate Period (the "Effective Rate" for such Period) shall be
determined not later than two (2) Business Days prior to the Effective
Date. If the Remarketing Agent fails to make such determination or fails
to announce the Effective Rate as required with respect to any Bonds in the
Multiannual Mode, or if for any reason such manner of determination shall
be determined to be invalid or unenforceable, the rate to take effect on
any Effective Date shall be automatically converted to the Flexible Mode
with a Rate Period of one day. The Remarketing Agent shall announce the
Effective Rate by telephone to the Paying Agent on the date of
determination thereof, and shall promptly confirm such notice in writing.
Each determination and redetermination of the Multiannual Rate shall
be conclusive and binding on the Authority, the Trustee, the Paying Agent,
the Company, the Bondowners and, if applicable, the Bank.
While this bond is in the Multiannual Mode, interest shall be computed
on the basis of a 360-day year consisting of twelve 30-day months. From
and after the date on which this bond becomes due, any unpaid principal
will bear interest at the then effective interest rate until paid or duly
provided for.
While this bond is in the Multiannual Mode, the principal of and
premium, if any, on this bond are payable when due by check or draft in
clearinghouse funds to the REGISTERED OWNER hereof but only upon
presentation and surrender of this bond at the office of
_______________________________, ____________________,
______________________, as Paying Agent, (with its successors in such
capacity, the "Paying Agent"). Interest on this bond while in the
Multiannual Mode is payable by check or draft in clearinghouse funds mailed
on the applicable payment date by the Paying Agent to the REGISTERED OWNER,
determined as of the close of business on the applicable record date, at
its address as shown on the registration books. The Purchase Price (as
defined below) of Bonds tendered for purchase shall be paid as provided
below.
The record date for payment of interest while this bond is in the
Multiannual Mode is the fifteenth day of the month immediately preceding
the date on which the interest is to be paid, provided that with respect to
overdue interest or interest payable on redemption of this bond other than
on an INTEREST PAYMENT DATE or interest on any overdue amount, the Trustee
may establish a special record date. The special record date may be not
more than thirty (30) days before the date set for payment. The Paying
Agent will mail notice of a special record date to the Bondowners at least
ten (10) days before the special record date. The Paying Agent will
promptly certify to the Authority, the Trustee and the Remarketing Agent
that it has mailed such notice to all Bondowners, and such certificate will
be conclusive evidence that notice was given in the manner required hereby.
While this bond is in the Multiannual Mode, this bond is subject to
mandatory tender for purchase at a price (the "Purchase Price") equal to
100% of the principal amount thereof, plus accrued interest, if any, on
each Effective Date. THE OWNER OF THIS BOND, BY ACCEPTANCE HEREOF, AGREES
TO SELL AND SURRENDER THIS BOND IN ACCORDANCE WITH THE PROVISIONS OF THE
AGREEMENT AND, ON THE PURCHASE DATE, TO SURRENDER THIS BOND TO THE PAYING
AGENT FOR PAYMENT OF THE PURCHASE PRICE. UPON DEPOSIT OF THE PURCHASE
PRICE WITH THE PAYING AGENT ON THE PURCHASE DATE, THIS BOND SHALL BE DEEMED
TENDERED FOR PURCHASE AND SHALL CEASE TO BE OUTSTANDING UNDER THE
AGREEMENT, INTEREST HEREON SHALL CEASE TO ACCRUE AS OF THE PURCHASE DATE,
AND THE REGISTERED OWNER HEREOF SHALL BE ENTITLED ONLY TO RECEIVE THE
PURCHASE PRICE SO DEPOSITED WITH THE PAYING AGENT UPON SURRENDER OF THIS
CERTIFICATE TO THE PAYING AGENT. All deliveries of tendered Bonds shall be
made to the Paying Agent at ________________, New York, New York,
Attention: ______________, or such other address specified in writing by
the Paying Agent to the Bondowners.
The Purchase Price of this bond shall be paid to the REGISTERED OWNER
by the Paying Agent on the Delivery Date, which shall be the Purchase Date
or any subsequent Business Day on which this bond is delivered to the
Paying Agent. The Purchase Price of this bond shall be paid only upon
surrender of this bond to the Paying Agent as provided herein. From and
after the Purchase Date, no further interest on this bond shall be payable
to the REGISTERED OWNER, provided that there are sufficient funds available
on the Purchase Date to pay the Purchase Price. The Purchase Price of
Bonds is payable for Bonds in the Multiannual Mode by check or draft in
clearinghouse funds from the Paying Agent to the REGISTERED OWNER at its
address shown on the registration books maintained by the Paying Agent. If
on any date this bond is subject to mandatory tender for purchase, payment
of the Purchase Price of this bond to such owner shall be made on the
Purchase Date if presentation and surrender of this bond is made prior to
11:00 A.M., New York City time, on the Purchase Date or on such later
Business Day upon which presentation and surrender of this bond is made
prior to 11:00 A.M., New York City time.
In the Multiannual Mode and after the expiration of the applicable No
Call Period (measured from the COMMENCEMENT DATE OF RATE PERIOD) set forth
in the following schedule, the Bonds shall be subject to redemption at the
direction of the Company in whole or in part at any time at the following
redemption prices expressed as a percentage of the principal amount
redeemed, plus interest accrued to the redemption date:
Length of
Multiannual Redemption
Rate Period No Call Period Price
Greater than 15 years 10 years 102%, declining by 1/2%
on each succeeding anni-
versary of the end of the
no call period until
reaching 100% and
thereafter at 100%
Greater than 10, but not 8 years 101 1/2%, declining
greater than 15 years by 1/2% on each suc-
ceeding anniversary of
the end of the no call
period until reaching
100% and thereafter at
100%
Greater than 5, but not 5 years 101%, declining by
greater than 10 years 1/2% on the next
anniversary of the end of
the no call period and
there-after at 100%
5 years or less Bonds not subject to
optional redemption
until commencement of
next Rate Period.
In addition, at the option of the Company, the Bonds in the
Multiannual Mode are subject to redemption prior to maturity as a whole at
any time at 100% of the principal amount thereof, plus accrued interest to
the redemption date, within nine (9) months of the occurrence of certain
extraordinary events consisting of (a) damage or destruction, or loss of
title by eminent domain, to the Station or the Project Facilities, (b)
changes in law affecting the enforceability of the Agreement or imposing
unreasonable burdens or excessive liabilities on the Company relating to
the Station or the Project Facilities or their operation, (c) the enjoining
or prohibiting of the operation of the Station or the Project Facilities,
or (d) changes in the economic availability of fuel, materials, supplies,
labor, equipment or other properties or things rendering the continued
operation of the Station uneconomical, all as more fully described in the
Agreement. The Company's right to direct the redemption of the Bonds in
the Multiannual Mode upon the occurrence of any event listed above shall
expire six (6) months after such event occurs.
The Bonds are subject to mandatory redemption at any time at a
redemption price of 100% of the principal amount of the Bonds so redeemed
plus accrued interest in the event (i) the Company delivers to the Trustee
an opinion of nationally recognized bond counsel selected by the Company
and reasonably satisfactory to the Trustee ("Bond Counsel") stating that
interest on the Bonds is or will become includable in gross income of the
owners thereof for federal income tax purposes, or (ii) it is finally
determined by the Internal Revenue Service or a court of competent
jurisdiction, as a result of (A) a proceeding in which the Company has
participated or been given notice and an opportunity to participate, and,
(B) either (1) a failure by the Company (or the Seabrook Transferee as
defined in the Agreement) to observe any covenant or agreement undertaken
in or pursuant to the Agreement, or the inaccuracy of any representation
made by the Company (or the Seabrook Transferee) in or pursuant to the
Agreement, or (2) the Seabrook Transfer (as defined in the Agreement), that
interest payable on the Bonds is includable for federal income tax purposes
in the gross income of any owner thereof (other than an owner which is a
"substantial user" or a "related person" within the meaning of Section
147(a) of the Internal Revenue Code of 1986). Any determination under
clause (ii) above will not be considered final for this purpose until the
earliest of the conclusion of any appellate review, the denial of appellate
review or the expiration of the period for seeking appellate review.
Redemption under this paragraph shall be in whole unless not less than
forty-five (45) days prior to the redemption date the Company delivers to
the Trustee an opinion of Bond Counsel reasonably satisfactory to the
Trustee to the effect that a redemption of less than all of the Bonds will
preserve the tax-exempt status of interest on the remaining Bonds
outstanding subsequent to such redemption. Except as provided in the next
sentence, any such redemption shall be made on the 90th day after the date
on which the opinion described in clause (i) is delivered or the
determination described in clause (ii) becomes final or on such earlier
date as the Company may designate by notice given to the Trustee at least
forty-five (45) days prior to such designated date. Any Bond in the
Flexible Mode that has a Purchase Date prior to the redemption date
established for that Bond pursuant to the preceding sentence shall be
redeemed on that Purchase Date. If such redemption shall occur in
accordance with the terms of the Agreement, then such failure by the
Company (or the Seabrook Transferee as described above) to observe such
covenant or agreement, or the inaccuracy of any such representation will
not, in and of itself, constitute a default thereunder.
If the Trustee receives written notice from any Bondowner stating that
(i) such Bondowner has been notified in writing by the Internal Revenue
Service that it proposes to include the interest on the Bonds in the gross
income of such owner for federal income tax purposes, or any other
proceeding has been instituted against such owner which may lead to a like
determination, and (ii) such owner will afford the Company the opportunity
to participate at its own expense in the proceeding, either directly or in
the name of such owner, until the conclusion of any appellate review, and
the Trustee has examined such written notice and it appears to be accurate
on its face, then the Trustee shall promptly give notice thereof to the
Company, the Authority, and each Bondowner whose Bonds may be affected.
The Trustee shall thereafter keep itself reasonably informed of the
progress of any administrative proceedings or litigation relating to such
notice. Under the Agreement the Company is required to give the Trustee
written notice of such a final determination within forty-five (45) days of
such final determination.
If less than all of the outstanding Bonds are to be called for redem-
ption, the Bonds (or portions thereof) to be redeemed shall be selected as
provided in the Agreement with Bonds in the Multiannual Mode being redeemed
in units of $5,000.
In the event this bond is selected for redemption, notice will be
mailed no more than forty-five (45) nor less than thirty (30) days prior to
the redemption date to the REGISTERED OWNER at its address shown on the
registration books maintained by the Paying Agent. Failure to mail notice
to the owner of any other Bond or any defect in the notice to such an owner
shall not affect the redemption of this bond.
If this bond is of a denomination in excess of five thousand dollars
($5,000), portions of the principal amount in the amount of five thousand
dollars ($5,000) or any multiple thereof may be redeemed. If less than all
of the principal amount is to be redeemed, upon surrender of this bond to
the Paying Agent, there will be issued to the REGISTERED OWNER, without
charge, a new Bond or Bonds, at the option of the REGISTERED OWNER, for the
unredeemed principal amount.
Notice of redemption having been duly mailed, this bond, or the
portion called for redemption, will become due and payable on the
redemption date at the applicable redemption price and, moneys for the
redemption having been deposited with the Paying Agent, from and after the
date fixed for redemption, interest on this bond (or such portion) will no
longer accrue.
IN CERTAIN CIRCUMSTANCES SET OUT HEREIN, THIS BOND (OR PORTION HEREOF)
IS SUBJECT TO PURCHASE OR REDEMPTION. IN EACH SUCH EVENT AND UPON DEPOSIT
OF THE PURCHASE OR REDEMPTION PRICE WITH THE PAYING AGENT ON THE PURCHASE
OR REDEMPTION DATE, AS THE CASE MAY BE, THIS BOND (OR PORTION HEREOF) SHALL
CEASE TO BE DEEMED TO BE OUTSTANDING UNDER THE AGREEMENT, INTEREST HEREON
SHALL CEASE TO ACCRUE AS OF THE PURCHASE OR REDEMPTION DATE, AND THE
REGISTERED OWNER HEREOF SHALL BE ENTITLED ONLY TO RECEIVE THE PURCHASE OR
REDEMPTION PRICE SO DEPOSITED WITH THE PAYING AGENT ONLY UPON SURRENDER OF
THIS CERTIFICATE TO THE PAYING AGENT.
This bond is transferable by the REGISTERED OWNER, in person or by its
attorney duly authorized in writing, at the office of the Paying Agent,
upon surrender of this bond to the Paying Agent for cancellation. Upon the
transfer, a new Bond or Bonds in authorized denominations of the same
aggregate principal amount will be issued to the transferee at the same
office. No transfer will be effective unless represented by such surrender
and reissue. This bond may also be exchanged at the office of the Paying
Agent for a new Bond or Bonds in authorized denominations of the same
aggregate principal amount without transfer to a new registered owner.
Exchanges and transfers will be without expense to the owner except for
applicable taxes or other governmental charges, if any. The Paying Agent
will not be required to make an exchange or transfer of this bond (except
in connection with any optional or mandatory tender of this bond) (i) if
this bond (or any portion thereof) has been selected for redemption or (ii)
during the fifteen (15) days preceding any date fixed for selection for
redemption if this bond (or any portion thereof) is eligible to be selected
for redemption.
The Bonds are issuable only in fully registered form in denominations
of five thousand dollars ($5,000) or any multiple thereof.
The Authority, the Trustee, the Paying Agent and the Company may treat
the REGISTERED OWNER as the absolute owner of this bond for all purposes,
notwithstanding any notice to the contrary.
No director, officer, employee or agent of the Authority nor any
person executing this bond (by facsimile signature or otherwise) shall be
personally liable, either jointly or severally, hereon or be subject to any
personal liability or accountability by reason of the issuance hereof.
This bond will not be valid until the Certificate of Authentication
has been signed by the Trustee or the Paying Agent.
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND ON THE BACK,
WHICH HAVE THE SAME EFFECT AS IF SET FORTH HERE.
BUSINESS FINANCE AUTHORITY
OF THE STATE OF NEW HAMPSHIRE
(Seal)
By:________________________________
Title:
By:________________________________
Title:
Certificate of Authentication
This bond is one of the Bonds described in the Agreement.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
Date of Registration: By:____________________________, or
Authorized Signature
By: _____________________________, as Paying
Agent
By: __________________________
Authorized Signature
Assignment
For value received the undersigned sells, assigns and transfers this
bond to
_____________________________________________________________
(Name and Address of Assignee)
_____________________________________________________________
_____________________________________________________________
Social Security or Other Identifying Number of Assignee
and irrevocably appoints ________________________________ attorney-in-fact
to transfer it on the books kept for registration of the bond, with full
power of substitution.
___________________________________
NOTE: The signature to this assignment must
correspond with the name as written on the face of
the bond without alteration or enlargement or
other change and must be guaranteed by a
Participant in a Recognized Signature Guaranty
Medallion Program.
Dated:
Signature Guaranteed:
____________________________________
Participant in a Recognized
Signature Guaranty Medallion Program
By:_________________________________
Authorized Signature
The following abbreviations, when used in the inscription on the face
of this bond, shall be construed as though they were written out in full
according to applicable law.
TEN COM - as tenants in common UNIF GIFT MIN ACT -
TEN ENT - as tenants by the entirety ______ Custodian _______
JT TEN - as joint tenants with rights (Cust) (Minor)
of survivorship and not as
tenants in common
Act ____________________
(State)
Additional abbreviations may also be used though not set forth in the list
above.
(d) Form of Fixed Rate Bond. The 1993 Series E Bonds may be issued
in the Fixed Rate Mode in substantially the form prescribed below.
$____________ No. R-
UNITED STATES OF AMERICA
STATE OF NEW HAMPSHIRE
BUSINESS FINANCE AUTHORITY
OF THE STATE OF NEW HAMPSHIRE
Pollution Control Refunding Revenue Bond
(Public Service Company of New Hampshire
Project - 1993 Tax-Exempt Series E)
INTEREST RATE: CUSIP:
MATURITY DATE: May 1, 2021
DATE OF THIS BOND:
(Date as of which Bonds of this
series were initially issued.)
INTEREST PAYMENT DATES: May 1 and November 1
(but not before
______, ____)
REGISTERED OWNER:
PRINCIPAL AMOUNT: DOLLARS
THIS BOND DOES NOT CONSTITUTE AN INDEBTEDNESS OF THE STATE OF NEW
HAMPSHIRE OR OF THE AUTHORITY EXCEPT TO THE EXTENT PERMITTED BY NEW
HAMPSHIRE RSA CHAPTER 162-I. ALL AMOUNTS OWED HEREUNDER ARE PAYABLE ONLY
FROM THE SOURCES PROVIDED IN THE LOAN AND TRUST AGREEMENT DESCRIBED BELOW,
AND NO PUBLIC FUNDS MAY BE USED FOR THAT PURPOSE.
The Business Finance Authority of the State of New Hampshire (the
"Authority"), for value received promises to pay to the REGISTERED OWNER,
or registered assigns, but solely from the moneys to be provided under the
Agreement mentioned below, upon presentation and surrender hereof, in
lawful money of the United States of America, the PRINCIPAL AMOUNT on the
MATURITY DATE, unless paid earlier as provided below, with interest
(computed on the basis of a 360-day year consisting of twelve 30-day
months) from the most recent INTEREST PAYMENT DATE to which interest has
been paid or duly provided for or, if no interest has been paid, from the
DATE OF THIS BOND, at the INTEREST RATE per annum, payable semiannually on
the INTEREST PAYMENT DATES, until the date on which this bond becomes due,
whether at maturity or by acceleration or redemption. From and after that
date, any unpaid principal will bear interest at the same rate until paid
or duly provided for. The principal and premium, if any, of this bond is
payable in clearinghouse funds at the office of
_____________________________, as Paying Agent (with its successors, the
"Paying Agent"). Interest is payable by check or draft in clearinghouse
funds mailed by the Paying Agent to the REGISTERED OWNER of this bond (or
of one or more predecessor or successor Bonds (as defined below)),
determined as of the close of business on the applicable record date, at
its address as shown on the registration books maintained by the Paying
Agent. If any payment, redemption or maturity date for principal, premium
or interest shall be (i) a Sunday or a legal holiday, or (ii) a day on
which banking institutions are authorized pursuant to law to close and on
which the corporate trust office of the Trustee or the First Mortgage Bond
Trustee is not open for business, then the payment thereof may be made on
the next succeeding day not a day specified in (i) or (ii) with the same
force and effect as if made on the specified payment date and no interest
shall accrue for the period after the specified payment date.
The record date for payment of interest is the fifteenth day of the
month preceding the date on which the interest is to be paid, provided
that, with respect to overdue interest or interest payable on redemption of
this bond other than on an INTEREST PAYMENT DATE or interest on any overdue
amount, the Trustee (as defined below) may establish a special record date.
The special record date may be not more than thirty (30) days before the
date set for payment. The Paying Agent will mail notice of a special
record date to the registered owners of the Bonds (the "Bondowners") at
least ten (10) days before the special record date. The Paying Agent will
promptly certify to the Authority and the Trustee that it has mailed such
notice to all Bondowners, and such certificate will be conclusive evidence
that such notice was given in the manner required hereby.
This bond is one of a series of Pollution Control Refunding Revenue
Bonds (Public Service Company of New Hampshire Project - 1993 Tax-Exempt
Series E) (the "Bonds") in the aggregate principal amount of $44,800,000
issued under New Hampshire RSA Chapter 162-I (the "Act"). The proceeds of
the Bonds are being loaned to Public Service Company of New Hampshire (the
"Company"), a New Hampshire corporation, pursuant to a Series E Loan and
Trust Agreement dated as of May 1, 1991, as supplemented and amended by a
First Supplement dated as of December 1, 1993 (the "Agreement") among the
Company, the Authority and State Street Bank and Trust Company, as Trustee
(the "Trustee") to refund a like principal amount of the Authority's
$114,500,000 Pollution Control Revenue Bonds (Public Service Company of New
Hampshire Project - 1991 Taxable Series E) (the "1991 Bonds"), which were
originally issued to finance certain costs associated with the Company's
ownership interest in air or water pollution control and sewage or solid
waste disposal facilities installed for use by Unit No. 1 at the nuclear
electric generating station (the "Station") in Seabrook, New Hampshire (the
"Project Facilities"). Pursuant to the Agreement, the Company has
unconditionally agreed to repay such loan in the amounts and at the times
necessary to pay the principal of, premium, if any, and interest on the
Bonds when due. To evidence and secure such loan and the Company's
reimbursement and certain other obligations, if any, under the
Reimbursement Agreement (as defined in the Agreement), the Company has
issued and delivered to the Trustee its First Mortgage Bonds, Series G (the
"Series G First Mortgage Bonds") issued under the First Mortgage Indenture
dated as of August 15, 1978, as amended, and the Tenth Supplemental
Indenture thereto dated as of May 1, 1991 between the Company and First
Fidelity Bank, National Association, New Jersey, as Trustee (as amended and
supplemented from time to time, the "First Mortgage Bond Indenture") in an
aggregate principal amount, and with an interest rate, maturity date and
redemption provisions corresponding to those of the Bonds and certain other
bonds issued under the Agreement, including the 1991 Bonds. As provided in
the Agreement, payments of principal of, and premium, if any, and interest
on the Series G First Mortgage Bonds shall, upon receipt by the Trustee, be
deemed to constitute payments in corresponding amounts by the Company in
respect of the Bonds and certain other bonds issued under the Agreement,
including the 1991 Bonds. Reference is hereby made to the Agreement for
the provisions thereof with respect to the rights, limitations of rights,
duties, obligations and immunities of the Company, the Authority, the
Trustee, the Paying Agent, and the Bondowners, including the order of
payments in the event of insufficient funds, the disposition of unclaimed
moneys held by the Trustee and restrictions on the rights of owners of the
Bonds to bring suit. The Agreement may be amended to the extent and in the
manner provided therein. Copies of the Agreement are available for
inspection at the corporate trust office of the Trustee.
In case any Event of Default (as defined in the Agreement) occurs and
is continuing, the principal amount of this bond together with accrued
interest may be declared due and payable in the manner and with the effect
provided in the Agreement.
The Bonds are redeemable pursuant to the Agreement prior to maturity
beginning on _________, ____, at the option of the Authority by direction
of the Company, as a whole or in part at any time, at the following prices
expressed in percentages of their principal amount, plus accrued interest
to the redemption date:
Period During Which Redeemed Redemption Price
%
[Table to be prepared upon Fixed Rate conversion. The table shall be based
on redemption schedule established for the bond in the Multiannual Mode.]
In addition, at the option of the Company, this bond is subject to
redemption prior to maturity at 100% of the principal amount thereof, plus
accrued interest to the redemption date within nine (9) months of the
occurrence of certain extraordinary events consisting of (a) damage or
destruction, or loss of title by eminent domain, to the Station or the
Project Facilities, (b) changes in law affecting the enforceability of the
Agreement or imposing unreasonable burdens or excessive liabilities on the
Company relating to the Station or the Project Facilities or their
operation, (c) the enjoining or prohibiting of the operation of the Station
or the Project Facilities, or (d) changes in the economic availability of
fuel, materials, supplies, labor, equipment or other properties or things
rendering the continued operation of the Station uneconomical, all as more
fully described in the Agreement. The Company's right to direct the
redemption of this bond upon the occurrence of any event listed above shall
expire six (6) months after such event occurs.
The Bonds are subject to mandatory redemption at any time at a
redemption price of 100% of the principal amount of the Bonds so redeemed
plus accrued interest in the event (i) the Company delivers to the Trustee
an opinion of nationally recognized bond counsel selected by the Company
and reasonably satisfactory to the Trustee ("Bond Counsel") stating that
interest on the Bonds is or will become includable in gross income of the
owners thereof for federal income tax purposes, or (ii) it is finally
determined by the Internal Revenue Service or a court of competent
jurisdiction, as a result of (A) a proceeding in which the Company has
participated or been given notice and an opportunity to participate, and,
(B) either (1) a failure by the Company (or the Seabrook Transferee as
defined in the Agreement) to observe any covenant or agreement undertaken
in or pursuant to the Agreement, or the inaccuracy of any representation
made by the Company (or the Seabrook Transferee) in or pursuant to the
Agreement, or (2) the Seabrook Transfer (as defined in the Agreement), that
interest payable on the Bonds is includable for federal income tax purposes
in the gross income of any owner thereof (other than an owner which is a
"substantial user" or a "related person" within the meaning of Section
147(a) of the Internal Revenue Code of 1986). Any determination under
clause (ii) above will not be considered final for this purpose until the
earliest of the conclusion of any appellate review, the denial of appellate
review or the expiration of the period for seeking appellate review.
Redemption under this paragraph shall be in whole unless not less than
forty-five (45) days prior to the redemption date the Company delivers to
the Trustee an opinion of Bond Counsel reasonably satisfactory to the
Trustee to the effect that a redemption of less than all of the Bonds will
preserve the tax-exempt status of interest on the remaining Bonds
outstanding subsequent to such redemption. Except as provided in the next
sentence, any such redemption shall be made on the 90th day after the date
on which the opinion described in clause (i) is delivered or the
determination described in clause (ii) becomes final or on such earlier
date as the Company may designate by notice given to the Trustee at least
forty-five (45) days prior to such designated date. Any Bond in the
Flexible Mode that has a Purchase Date prior to the redemption date
established for that Bond pursuant to the preceding sentence shall be
redeemed on that Purchase Date. If such redemption shall occur in
accordance with the terms of the Agreement, then such failure by the
Company (or the Seabrook Transferee as described above) to observe such
covenant or agreement, or the inaccuracy of any such representation will
not, in and of itself, constitute a default thereunder.
If the Trustee receives written notice from any Bondowner stating that
(i) such Bondowner has been notified in writing by the Internal Revenue
Service that it proposes to include the interest on the Bonds in the gross
income of such owner for federal income tax purposes, or any other
proceeding has been instituted against such owner which may lead to a like
determination, and (ii) such owner will afford the Company the opportunity
to participate at its own expense in the proceeding, either directly or in
the name of such owner, until the conclusion of any appellate review, and
the Trustee has examined such written notice and it appears to be accurate
on its face, then the Trustee shall promptly give notice thereof to the
Company, the Authority, and each Bondowner whose Bonds may be affected.
The Trustee shall thereafter keep itself reasonably informed of the
progress of any administrative proceedings or litigation relating to such
notice. Under the Agreement the Company is required to give the Trustee
written notice of such a final determination within forty-five (45) days of
such final determination.
If less than all of the outstanding Bonds are to be called for
redemption, the Bonds (or portions thereof) to be redeemed shall be
selected as provided in the Agreement.
In the event this bond is selected for redemption, notice will be
mailed no more than forty-five (45) nor less than thirty (30) days prior to
the redemption date to the REGISTERED OWNER at its address shown on the
registration books maintained by the Paying Agent. Failure to mail notice
to the owner of any other Bond or any defect in the notice to such an owner
shall not affect the redemption of this bond.
If this bond is of a denomination in excess of five thousand dollars
($5,000), portions of the principal amount in the amount of five thousand
dollars ($5,000) or any multiple thereof may be redeemed. If less than all
of the principal amount is to be redeemed, upon surrender of this bond to
the Paying Agent, there will be issued to the REGISTERED OWNER, without
charge, a new Bond or Bonds, at the option of the REGISTERED OWNER, for the
unredeemed principal amount.
Notice of redemption having been duly mailed, this bond, or the
portion called for redemption, will become due and payable on the
redemption date at the applicable redemption price and, moneys for the
redemption having been deposited with the Paying Agent, from and after the
date fixed for redemption, interest on this bond (or such portion) will no
longer accrue.
This bond is transferable by the REGISTERED OWNER, in person or by its
attorney duly authorized in writing, at the office of the Paying Agent,
upon surrender of this Bond to the Paying Agent for cancellation. Upon the
transfer, a new Bond or Bonds in authorized denominations of the same
aggregate principal amount will be issued to the transferee at the same
office. No transfer will be effective unless represented by such surrender
and reissue. This bond may also be exchanged at the office of the Paying
Agent for a new Bond or Bonds of the same aggregate principal amount
without transfer to a new registered owner. Exchanges and transfers will
be without expense to the holder except for applicable taxes or other
governmental charges, if any. The Paying Agent will not be required to
make an exchange or transfer of this bond during the fifteen (15) days
preceding any date fixed for selection for redemption if this bond (or any
part thereof) is eligible to be selected or has been selected for the
redemption.
This bond is issuable only in fully registered form in the
denominations of five thousand dollars ($5,000) or any multiple thereof.
The Authority, the Trustee, the Paying Agent and the Company may treat
the REGISTERED OWNER as the absolute owner of this bond for all purposes,
notwithstanding any notice to the contrary.
No director, officer, employee or agent of the Authority nor any
person executing this bond (by facsimile signature or otherwise) shall be
personally liable, either jointly or severally, hereon or be subject to any
personal liability or accountability by reason of the issuance hereof.
This bond will not be valid until the Certificate of Authentication
has been signed by the Trustee or the Paying Agent.
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND ON THE BACK,
WHICH HAVE THE SAME EFFECT AS IF SET FORTH HERE.
BUSINESS FINANCE AUTHORITY
OF THE STATE OF NEW HAMPSHIRE
(Seal)
By: _____________________________
Title:
By: _____________________________
Title:
Certificate of Authentication
This bond is one of the Bonds described in the Agreement.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
Date of Registration: By:____________________________, or
Authorized Signature
By:_________________________________,
as Paying Agent
By:___________________________
Authorized Signature
Assignment
For value received the undersigned sells, assigns and transfers this
bond to
________________________________________________________________
(Name and Address of Assignee)
________________________________________________________________
________________________________________________________________
Social Security or Other Identifying Number of Assignee
and irrevocably appoints ________________________________ attorney-in-fact
to transfer it on the books kept for registration of the bond, with full
power of substitution.
_________________________________________
NOTE: The signature to this assignment must correspond
with the name as written on the face of the bond
without alteration or enlargement or other change and
must be guaranteed by a Participant in a Recognized
Signature Guaranty Medallion Program.
Dated:
Signature Guaranteed:
____________________________________
Participant in a Recognized
Signature Guaranty Medallion Program
By: ________________________________
Authorized Signature
The following abbreviations, when used in the inscription on the face
of this bond, shall be construed as though they were written out in full
according to applicable law.
TEN COM - as tenants in common UNIF GIFT MIN ACT -
TEN ENT - as tenants by the entirety ______ Custodian _______
JT TEN - as joint tenants with rights (Cust) (Minor)
of survivorship and not as
tenants in common
Act ____________________
(State)
Additional abbreviations may also be used though not set forth in the list
above.
Section 302. Details of the 1993 Series E Bonds.
The 1993 Series E Bonds shall be signed on behalf of the Authority by
the manual or facsimile signatures of any two of the Chairman, Vice
Chairman, Treasurer and Executive Director and the corporate seal of the
Authority or a facsimile thereof shall be impressed, engraved or otherwise
reproduced thereon. The Certificate of Authentication shall be manually
signed by the Trustee or the Paying Agent.
In case any officer whose manual or facsimile signature shall appear
on any 1993 Series E Bond shall cease to be such officer before the
delivery thereof, such manual or facsimile signature shall nevertheless be
valid and sufficient for all purposes as if he or she had remained in
office until after such delivery.
The 1993 Series E Bonds shall be issued in fully registered form and
shall be numbered from 1 upwards in the order of their issuance, or in any
other manner deemed appropriate by the Paying Agent and the Trustee. The
1993 Series E Bonds shall be in the denomination of $100,000 or any
multiple of $1,000 in excess of $100,000 in the Flexible Mode, $5,000 or
any multiple thereof in the Fixed Rate and Multiannual Modes and $100,000
or any multiple thereof in the Weekly Mode. The 1993 Series E Bonds shall
be dated the date of original delivery thereof and shall mature on May 1,
2021. The interest on 1993 Series E Bonds until they come due shall be
payable on the interest payment dates applicable to the Mode the Bonds are
in from time to time. Interest on overdue principal of any Bond shall bear
interest at the rate last established for that Bond before the principal
became overdue until duly paid or provided for. All of the 1993 Series E
Bonds shall be initially in the Weekly Mode.
The 1993 Series E Bonds are subject to redemption as described in
Sections 310 and 405 of the Original Agreement and in the forms of 1993
Series E Bonds.
Section 303. Registration of Bonds in the Book-Entry Only System.
(a) Notwithstanding any provision herein to the contrary, the provisions
of this Subsection 303 and the Representation Letter (as defined below)
shall apply with respect to any 1993 Series E Bond registered to CEDE & CO.
or any other nominee of The Depository Trust Company ("DTC") while the
Book-Entry Only System (meaning the system of registration described in
Section 303) is in effect. The Book-Entry Only System shall be in effect
for any Mode or Rate Period within the Multiannual Mode if so specified by
the Company prior to conversion to that Mode or Rate Period, subject to the
provisions below concerning termination of the Book-Entry Only System.
Until it revokes such specification in its discretion, the Company hereby
specifies that the Book-Entry Only System shall be in effect while the 1993
Series E Bonds are in Weekly, Multiannual and Fixed Rate Modes.
(b) The 1993 Series E Bonds in or to be in the Book-Entry Only System
shall be issued in the form of a separate single authenticated fully
registered 1993 Series E Bond for each separate Mode or Rate Period in
substantially the forms provided for in Section 301. Any legend required
to be on the Bonds by DTC may be added by the Trustee or Paying Agent. On
the date of original delivery thereof or date of conversion of the 1993
Series E Bonds to a Mode or Rate Period in which the Book-Entry Only System
is in effect, as applicable, the 1993 Series E Bonds shall be registered in
the registry books of the Paying Agent in the name of CEDE & CO., as
nominee of The Depository Trust Company as agent for the Authority in
maintaining the Book-Entry Only System. With respect to 1993 Series E
Bonds registered in the registry books kept by the Paying Agent in the name
of CEDE & CO., as nominee of DTC, the Authority, the Paying Agent, the
Company, the Remarketing Agent and the Trustee shall have no responsibility
or obligation to any Participant (which means securities brokers and
dealers, banks, trust companies, clearing corporations and various other
entities, some of whom or their representatives own DTC) or to any
Beneficial Owner (which means, when used with reference to the Book-Entry
Only System, the person who is considered the beneficial owner of the 1993
Series E Bonds pursuant to the arrangements for book entry determination of
ownership applicable to DTC) with respect to the following: (A) the
accuracy of the records of DTC, CEDE & CO. or any Participant with respect
to any ownership interest in the 1993 Series E Bonds, (B) the delivery to
or from any Participant, any Beneficial Owner or any other person, other
than DTC, of any notice with respect to the 1993 Series E Bonds, including
any notice of redemption or tender (whether mandatory or optional), or (C)
the payment to any Participant, any Beneficial Owner or any other person,
other than DTC, of any amount with respect to the principal or premium, if
any, or interest on the 1993 Series E Bonds. The Paying Agent shall pay
all principal of and premium, if any, and interest on the 1993 Series E
Bonds only to or upon the order of DTC, and all such payments shall be
valid and effective fully to satisfy and discharge the Authority's
obligations with respect to the principal of and premium, if any, and
interest on 1993 Series E Bonds to the extent of the sum or sums so paid.
No person other than DTC shall be entitled to receive an authenticated 1993
Series E Bond evidencing the obligation of the Authority to make payments
of principal and premium, if any, and interest pursuant to this Agreement.
Upon delivery by DTC to the Paying Agent of written notice to the effect
that DTC has determined to substitute a new nominee in place of CEDE & CO.,
the words "CEDE & CO." in this Agreement shall refer to such new nominee of
DTC.
(c) Upon receipt by the Trustee or the Paying Agent of written notice
from DTC to the effect that DTC is unable or unwilling to discharge its
responsibilities, the Authority shall issue and the Paying Agent shall
transfer and exchange 1993 Series E Bonds as requested by DTC in
appropriate amounts and in authorized denominations, and whenever DTC
requests the Authority, the Paying Agent and the Trustee to do so, the
Trustee, the Paying Agent and the Authority will, at the expense of the
Company, cooperate with DTC in taking appropriate action after reasonable
notice (A) to arrange for a substitute bond depository willing and able
upon reasonable and customary terms to maintain custody of the 1993
Series E Bonds or (B) to make available for transfer and exchange 1993
Series E Bonds registered in whatever name or names and in whatever
authorized denominations as DTC shall designate.
(d) In the event the Company determines that the Beneficial Owners
should be able to obtain 1993 Series E Bond certificates, the Company may
so notify DTC, the Paying Agent and the Trustee, whereupon DTC will notify
the Participants of the availability through DTC of 1993 Series E Bond
certificates. In such event, the Authority shall issue and the Paying
Agent shall transfer and exchange 1993 Series E Bond certificates as
requested by DTC in appropriate amounts and in authorized denominations.
Whenever DTC requests the Paying Agent to do so, the Paying Agent will
cooperate with DTC in taking appropriate action after reasonable notice to
make available for transfer and exchange 1993 Series E Bonds registered in
whatever name or names and in whatever authorized denominations as DTC
shall designate.
(e) Notwithstanding any other provision of the Agreement to the
contrary, so long as any 1993 Series E Bond is registered in the name of
CEDE & CO., as nominee of DTC, all payments with respect to the principal
of, Purchase Price, premium, if any, and interest on such 1993 Series E
Bond and all notices with respect to such 1993 Series E Bond shall be made
and given, respectively, to DTC as provided in the Letter of Representation
(the "Representation Letter"), the form of which is included as Exhibit A
attached to this First Supplement. The form of such Representation Letter
may be modified in a manner consistent with the provisions of the Agreement
upon conversion or reconversion of the 1993 Series E Bonds to a Mode or
Rate Period in which the Book-Entry Only System is in effect.
(f) Notwithstanding any provision in Subsection 301(h) or Section 310
of the Original Agreement to the contrary, so long as any of the 1993
Series E Bonds outstanding are held in the Book-Entry Only System, if less
than all of such 1993 Series E Bonds are to be converted or redeemed upon
any conversion or redemption of 1993 Series E Bonds hereunder, the
particular 1993 Series E Bonds or portions of 1993 Series E Bonds to be
converted or redeemed shall be selected by DTC in such manner as DTC may
determine.
(g) So long as the Book-Entry Only System is in effect, a Beneficial
Owner who elects to have its 1993 Series E Bonds purchased or tendered
pursuant to the Agreement shall effect delivery by causing a Participant to
transfer the Beneficial Owner's interest in the 1993 Series E Bonds
pursuant to the Book-Entry Only System. The requirement for physical
delivery of 1993 Series E Bonds in connection with a demand for purchase or
a mandatory purchase will be deemed satisfied when the ownership rights in
the 1993 Series E Bonds are transferred in accordance with the Book-Entry
Only System.
(h) So long as the Book-Entry Only System is in effect, the
Remarketing Agent shall communicate to DTC information concerning the
purchasers of Tendered Bonds as may be necessary or appropriate, and,
notwithstanding any provision in the Representation Letter to the contrary,
the Remarketing Agent shall continue to remit to the Paying Agent interest
rate determination information pursuant to the terms of this Agreement.
Section 304. Application of 1993 Series E Bond Proceeds. The
Authority shall loan the proceeds of the 1993 Series E Bonds to the Company
by promptly causing (A) an amount equal to the accrued interest, if any, to
be deposited in the Bond Fund and (B) $44,800,000 to be deposited with the
Trustee, in each case in immediately available funds. Upon receipt by the
Paying Agent in respect of a drawing on the Letter of Credit of an amount
necessary to pay the Purchase Price due on $44,800,000 principal amount of
1991 Series E Bonds, the Paying Agent shall immediately notify the Trustee
that it has received sufficient draw proceeds to pay such Purchase Price,
and upon the Trustee's receipt of such notice the Trustee shall pay to the
Bank the $44,800,000 deposited with the Trustee by the Authority under
clause (B) of this section as partial reimbursement for such drawing. If
the Trustee receives such notice from the Paying Agent before 12:00 Noon on
any Business Day it shall transmit a payment order for the above-described
payment by wire transfer in immediately available funds to the Bank by
2:30 P.M. on the same day, and if the Trustee receives such notice after
12:00 Noon it shall make such payment by wire transfer in immediately
available funds to the Bank by 11:00 A.M. on the next Business Day. In
connection with the reimbursement of the Bank, the Company represents and
warrants that (i) not less than 95% of the proceeds of the 1991 Series E
Bonds were spent to reimburse the Company for Project Costs; (ii) such
Project Costs were incurred by and were chargeable to the capital account
of the Company; (iii) such Project Costs were costs of "sewage or solid
waste disposal facilities" or "air or water pollution control facilities"
within the meaning of Section 103(b)(4)(E) or (F) of the 1954 Code incurred
and paid after January 14, 1976; (iv) such Project Costs were for an
"industrial facility" within the meaning of Paragraphs 2, VII (d) and (e)
of the Act; and (v) such Project Costs were costs of a facility described
in Section 1312(a) of the Tax Reform Act of 1986.
Section 305. Maximum Interest Rate for 1993 Series E Bonds. The
Maximum Interest Rate for the 1993 Series E Bonds shall be initially 12%
per annum, subject to adjustment as provided in Paragraph 102(a)(33) of the
Original Agreement.
Section 306. Additional Limitations on Conversions to New Modes.
(a) Conversions to Multiannual Mode. 1993 Series E Bonds converted
to the Multiannual Mode shall not be supported by a Credit Facility.
(b) Conversions from Multiannual Mode to Flexible or Weekly Mode.
Any Bank issuing a Credit Facility in connection with a conversion of 1993
Series E Bonds from the Multiannual Mode to the Flexible or Weekly Mode
shall have a long-term corporate debt rating of Aa from Moody's or AA from
S&P, or their equivalent.
Section 307. Subsection 310(c) of Original Agreement Amended.
Subsection 310(c) of the Original Agreement is amended to read as follows:
(c) Notice by the Company. The Company shall exercise its
option to have Bonds redeemed under Subsection 310(a) or (b) by
giving notice to the Trustee, the Authority, the Paying Agent,
and the Remarketing Agent at least five (5) days before the
redemption date in the case of Bonds in the Flexible Mode, and
forty-five (45) days before the redemption date in the case of
Bonds in any other Mode.
Section 308. Subsection 310(e) of Original Agreement Amended.
Subsection 310(e) of the Original Agreement is amended to read as follows:
(e) Notice of Redemption. When Bonds are to be redeemed,
the Paying Agent shall give notice to the Bondowners in the name
of the Authority, which notice shall identify the Bonds to be
redeemed, state the date fixed for redemption and specify the
office of the Paying Agent at which such Bonds will be redeemed.
The notice shall further state that on such date there shall
become due and payable upon each Bond to be redeemed the
redemption price thereof, together with interest accrued to the
redemption date, and that moneys therefor having been deposited
with the Paying Agent, from and after such date, interest thereon
shall cease to accrue and that the Bonds or portions thereof
called for redemption shall cease to be entitled to any benefit
under this Agreement except the right to receive payment of the
redemption price. The Paying Agent shall mail the redemption
notice the number of days prior to the date fixed for redemption
provided in the forms of Bond for the Mode the Bonds are in, to
the registered owners of any Bonds which are to be redeemed, at
their addresses shown on the registration books maintained by the
Paying Agent. Failure to mail notice to a particular Bondowner,
or any defect in the notice to such Bondowner, shall not affect
the redemption of any other Bond. No notice shall be given of
redemption of Bonds in the Flexible Mode, except for such
redemption pursuant to Section 405 as and when provided in the
form of Flexible Bonds.
Section 309. Tax Status of 1993 Series E Bonds. The Company will
perform its obligations and agreements contained in the First Supplemental
Federal Tax Statement as if they were set forth herein. All
representations of the Company in the First Supplemental Federal Tax
Statement shall be treated as if they were set forth herein. Any
covenants, agreements or representations made by the Company or the
Seabrook Transferee in the Assumption Agreement shall be performed and
treated as if set forth herein.
Section 310. Amendment of Credit Facility.
(a) Issuance of Amended and Restated Credit Facility.
Contemporaneously with the issuance of the 1993 Series E Bonds, the Company
shall cause the irrevocable letter of credit No. NY0389-30008830 of
Citibank, N.A. in the maximum aggregate amount of $121,014,000 issued to
the Paying Agent to be amended by the delivery to the Paying Agent of an
amended and restated Letter of Credit substantially in the form attached as
Exhibit II to the Pentagonal Agreement dated as of December 1, 1993 among
the Company, the Trustee, the Paying Agent, the Remarketing Agent and the
Bank, and shall cause to be delivered to the Trustee, the Authority and the
Paying Agent an opinion or opinions of counsel for the issuer of such
letter of credit substantially to the effect that such letter of credit, as
amended and restated, is a legal, valid and binding obligation of the
issuer enforceable in accordance with its terms.
Paragraph 102(a)(13) of Original Agreement Amended. The
definition of the term "Credit Facility" appearing in Paragraph 102(a)(13)
of the Original Agreement shall be amended by the addition of the following
phrase at the end of the first sentence thereof:
", as each may be amended from time to time pursuant to the terms
of this Agreement or any amendment or supplement to this
Agreement."
Section 311. Subsection 301(e) of Original Agreement Amended.
(a) Paragraph 301(e)(ii) Amended. The first sentence of Paragraph
301(e)(ii) of the Original Agreement is amended by striking the phrase "any
Effective Date" and inserting in lieu thereof "the first Business Day of
any calendar month."
(b) Subparagraph 301(e)(iv)(A) Amended. The last sentence of
Subparagraph 301(e)(iv)(A) of the Original Agreement is amended to read as
follows:
At least forty (40) days prior to the mandatory tender date, the
Trustee shall give notice to the Paying Agent as to whether or
not it has received the notices described in the immediately
preceding sentence from Moody's and S&P, and if the Trustee has
not received such notices or if the Credit Facility is expiring
without substitution or replacement, the Paying Agent shall give
notice to the Bondowners of the mandatory tender of the Bonds at
least thirty (30) days prior to the mandatory tender date.
Section 312. Subsection 308(c) of Original Agreement Amended.
(a) Paragraph 308(c)(i) Amended. The first sentence of Paragraph
308(c)(i) of the Original Agreement is amended by inserting after the
phrase "whether at maturity," and before the phrase "by acceleration," the
phrase "on an interest payment date,".
(b) Paragraph 308(c)(iii) of Original Agreement Amended. Paragraph
308(c)(iii) of the Original Agreement is amended to read as follows:
(iii) Use of Credit Facility. All amounts received by the
Paying Agent under any Credit Facility shall be held in a fund
separate and apart from all other amounts held by the Paying
Agent, shall remain uninvested and used solely to pay the
Purchase Price or principal of, premium, if any, and interest on
the Bonds for which the Credit Facility is available. Principal
and Purchase Price of, premium, if any, and interest on Company
Bonds, Pledged Bonds and Bonds not supported by a Credit Facility
shall not be paid from amounts drawn on a Credit Facility.
(c) Paragraph 308(c)(iv) Added to Original Agreement. A new
Paragraph 308(c)(iv) is added to the Original Agreement, which shall read
as follows:
(iv) Failed Conversion. Whenever there is a failed
conversion of Bonds supported by a Credit Facility, the Paying
Agent shall draw on the Credit Facility as provided in Paragraph
301(d)(ii), 301(e)(ii) or 301(f)(ii), as appropriate.
Section 313. Subsection 311(c) Added. A new Subsection 311(c) is
added to the Original Agreement, which shall read as follows:
(c) Commencement of New Mode or Rate Period. Whenever
Bonds in the Flexible or Multiannual Mode are subject to
mandatory tender for purchase on an Effective Date, the new Rate
Period for the Bonds (including a new Rate Period in a new Mode)
shall commence immediately upon the Bonds becoming subject to
mandatory tender for purchase.
Section 314. Subsection 312(a) Amended. The fifth sentence of the
second paragraph of Subsection 312(a) is amended to read as follows:
Upon receipt by the Paying Agent of notice from the Remarketing
Agent that a purchaser has been found for Pledged Bonds or
Company Bonds held by the Paying Agent, the Paying Agent shall
register and deliver such Bonds to such purchaser (at which time
such Bonds shall cease to be Pledged Bonds or Company Bonds) upon
receipt by the Paying Agent of the Purchase Price of such Bonds,
provided, however, that no Pledged Bond or Company Bond shall be
so registered and delivered unless the Paying Agent has received
from the Bank a written notice of the reinstatement of the
principal and interest component of the Credit Facility, or if
prior to or simultaneously with such registration or delivery,
the amount available to be drawn under the Credit Facility is
otherwise less than the amount described in Paragraph 317(b)(ii)
determined as if Bonds which are to continue as Pledged Bonds
were not Outstanding.
Section 315. Section 405 of Original Agreement Amended. Section 405
of the Original Agreement is amended by adding at the end thereof the
following sentence:
At least forty (40) days prior to any redemption pursuant to this
Section 405, the Trustee shall notify the Paying Agent of the
redemption date and the principal amount of Tax-Exempt Refunding
Bonds to be redeemed.
ARTICLE IV: MISCELLANEOUS
Section 401. Original Agreement Affirmed. Except as otherwise
expressly supplemented and amended by this First Supplement, the provisions
of the Original Agreement and the Assumption Agreement remain unchanged,
binding, and in full force and effect.
Section 402. Company's Agreement to Chapter 263. To the extent
required by 1993 New Hampshire Laws 263:4, the Company agrees to the
provisions of 1993 New Hampshire Laws 263:2 and 3. The Company further
agrees that it shall apply 100% of the savings that result from the
issuance of the 1993 Series E Bonds and that are generated until the end of
the fixed rate period (within the meaning of 1993 New Hampshire Laws 263:2,
I) pursuant to an investment plan approved by the New Hampshire Public
Utilities Commission under which the Company shall make expenditures for
one or all of the purposes described in 1993 New Hampshire Laws 263:2,
I(a)-(c).
Section 403. Severability. In the event that any provision of this
First Supplement shall be held to be invalid in any circumstance, such
invalidity shall not affect any other provisions or circumstances.
Section 404. Counterparts. This First Supplement may be executed and
delivered in any number of counterparts, each of which shall be deemed to
be an original, but such counterparts together shall constitute one and the
same instrument.
Section 405. Receipt of Documents. By its execution and delivery of
this First Supplement the Trustee acknowledges receipt of the items listed
in Section 402 of the Original Agreement as conditions precedent to the
authentication of the 1993 Series E Bonds and the opinion of Bond Counsel
required to accompany this First Supplement pursuant to Subsection 1101(c)
of the Original Agreement.
Section 406. Captions. The captions and table of contents of this
First Supplement are for convenience only and shall not affect the
construction hereof.
Section 407. Governing Law. This instrument shall be governed by the
laws of State of New Hampshire.
IN WITNESS WHEREOF, the Business Finance Authority of the State of New
Hampshire has caused this Agreement to be signed and its official seal to
be impressed hereon by its Executive Director; Public Service Company of
New Hampshire has caused this Agreement to be signed and its corporate seal
to be impressed hereon by an authorized officer; and State Street Bank and
Trust Company, as Trustee, has caused this Agreement to be signed and its
corporate seal to be impressed hereon by an authorized officer.
BUSINESS FINANCE AUTHORITY OF THE STATE OF
NEW HAMPSHIRE
(Seal)
By:______________________________
Jack Donovan
Executive Director
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
(Seal)
By:______________________________
John B. Keane
Treasurer
STATE STREET BANK AND TRUST COMPANY,
as Trustee
(Seal)
By:/s/ Daniel Golden
Daniel Golden
Assistant Vice President
The undersigned hereby consents
to this First Supplement.
CITIBANK, N.A.
By: /s/Paul T. Addison_
Paul T. Addison
Vice President
Exhibit 4.3.9
SERIES D LETTER OF CREDIT
AND REIMBURSEMENT AGREEMENT
Dated as of October 1, 1992
Among
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
as Account Party
BARCLAYS BANK PLC, NEW YORK BRANCH
as Issuing Bank and as Agent
and
THE PARTICIPATING BANKS
REFERRED TO HEREIN
Relating to
The Industrial Development Authority of the State of New Hampshire
Pollution Control Revenue Bonds (Public Service Company of New Hampshire
Project - 1991 Taxable Series D)
TABLE OF CONTENTS
Section Page
PRELIMINARY STATEMENT
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01 Certain Defined Terms. . . . . . . . . . . . . . .3
1.02 Computation of Time Periods. . . . . . . . . . . 21
1.03 Accounting Terms . . . . . . . . . . . . . . . . 21
1.04 Computations of Outstandings . . . . . . . . . . 22
ARTICLE II
THE LETTER OF CREDIT
2.01 The Letter of Credit . . . . . . . . . . . . . . 22
2.02 Termination of the Commitments . . . . . . . . . 22
2.03 Commissions and Fees . . . . . . . . . . . . . . 22
2.04 Reinstatement of the Letter of Credit. . . . . . 23
2.05 Extension of the Stated Termination Date . . . . 24
2.06 Modification of the Letter of Credit . . . . . . 25
ARTICLE III
REIMBURSEMENT AND ADVANCES
3.01 Reimbursement on Demand . . . . . . . . . . . . 26
3.02 Advances . . . . . . . . . . . . . . . . . . . . 26
3.03 Interest on Advances . . . . . . . . . . . . . . 27
3.04 Conversion of Term Advances . . . . . . . . . . 29
3.05 Other Terms Relating to the
Making and Conversion of Advances . . . . . 30
3.06 Prepayment of Advances . . . . . . . . . . . . . 31
3.07 Participation; Reimbursement of Issuing Bank . . 31
ARTICLE IV
PAYMENTS
4.01 Payments and Computations. . . . . . . . . . . . 34
4.02 Default Interest . . . . . . . . . . . . . . . . 36
4.03 Yield Protection . . . . . . . . . . . . . . . . 36
4.04 Sharing of Payments, Etc.. . . . . . . . . . . . 41
4.05 Taxes. . . . . . . . . . . . . . . . . . . . . . 41
4.06 Obligations Absolute . . . . . . . . . . . . . . 44
4.07 Evidence of Indebtedness . . . . . . . . . . . . 45
ARTICLE V
CONDITIONS PRECEDENT
5.01 Conditions Precedent to the Issuance of
the Letter of Credit. . . . . . . . . . . . . . 45
5.02 Additional Conditions Precedent to the
Issuance of Letter of Credit . . . . . . . . . 53
5.03 Conditions Precedent to Initial Advances
and Conversions of Advances . . . . . . . . . . 54
5.04 Conditions Precedent to Term Advances. . . . . . 54
5.05 Reliance on Certificates . . . . . . . . . . . . 55
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.01 Representations and Warranties of the
Account Party . . . . . . . . . . . . . . . . . 55
ARTICLE VII
COVENANTS OF THE ACCOUNT PARTY
7.01 Affirmative Covenants. . . . . . . . . . . . . . 59
7.02 Negative Covenants . . . . . . . . . . . . . . . 62
7.03 Reporting Obligations. . . . . . . . . . . . . . 67
ARTICLE VIII
DEFAULTS
8.01 Events of Default. . . . . . . . . . . . . . . . 72
8.02 Remedies Upon Events of Default. . . . . . . . . 75
8.03 Issuing Bank to Notify First Mortgage
Trustee, Others. . . . . . . . . . . . . . . . . 76
ARTICLE IX
THE AGENT, THE PARTICIPATING BANKS
AND THE ISSUING BANK
9.01 Authorization of Agent; Actions of Agent
and Issuing Bank. . . . . . . . . . . . . . . . 77
9.02 Reliance, Etc. . . . . . . . . . . . . . . . . . 77
9.03 The Agent, the Issuing Bank and Affiliates . . . 78
9.04 Participating Bank Credit Decision . . . . . . . 78
9.05 Indemnification. . . . . . . . . . . . . . . . . 79
9.06 Successor Agent. . . . . . . . . . . . . . . . . 79
9.07 Issuing Bank . . . . . . . . . . . . . . . . . . 80
ARTICLE X
MISCELLANEOUS
10.01 Amendments, Etc. . . . . . . . . . . . . . . . . 80
10.02 Notices, Etc.. . . . . . . . . . . . . . . . . . 81
10.03 No Waiver of Remedies. . . . . . . . . . . . . . 82
10.04 Costs, Expenses and Indemnification. . . . . . . 82
10.05 Right of Set-Off . . . . . . . . . . . . . . . . 84
10.06 Binding Effect; Assignments and Participants . . 85
10.07 Relation of the Parties; No Beneficiary. . . . . 86
10.08 Issuing Bank Not Liable . . . . . . . . . . . . 86
10.09 Confidentiality. . . . . . . . . . . . . . . . . 87
10.10 Waiver of Jury Trial . . . . . . . . . . . . . . 88
10.11 Governing Law. . . . . . . . . . . . . . . . . . 88
10.12 Execution in Counterparts. . . . . . . . . . . . 89
SCHEDULES
Schedule I - Applicable Lending Offices
Schedule II - [Reserved]
Schedule III - Investments
Schedule IV - Pending Actions
EXHIBITS
Exhibit 1.01A - Form of Letter of Credit
Exhibit 1.01B - Form of Participation Assignment
Exhibit 1.01C - Form of Pledge Amendment
Exhibit 5.01A - Form of Opinion of Day, Berry & Howard,
counsel to the Account Party
Exhibit 5.01B - Form of Opinion of Rath, Young, Pignatelli and Oyer,
P.A., special New Hampshire counsel to the Account
Party
Exhibit 5.01C - Form of Opinion of Pierre O. Caron,
Assistant General Counsel of the Account Party
Exhibit 5.01D - Form of Opinion of Drummond Woodsum Plimpton &
MacMahon, special Maine counsel to the Account Party
Exhibit 5.01E - Form of Opinion of Zuccaro Willis & Bent, special
Vermont counsel to the Account Party
Exhibit 5.01F - Form of Opinion of Porter & Travers,
counsel to the Agent and the Issuing Bank
SERIES D LETTER OF CREDIT
AND REIMBURSEMENT AGREEMENT
Dated as of October 1, 1992
THIS SERIES D LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
(this "Agreement") is made by and among:
(1) Public Service Company of New Hampshire, a corporation
duly organized and validly existing under the laws of
the State of New Hampshire (the "Account Party");
(2) Barclays Bank PLC, New York Branch ("Barclays"), as
issuer of the Letter of Credit (the "Issuing Bank");
(3) The Participating Banks (as hereinafter defined) from
time to time party hereto; and
(4) Barclays as agent (together with any successor agent
hereunder, the "Agent") for such Participating Banks
and the Issuing Bank.
PRELIMINARY STATEMENT
The Account Party was previously reorganized under Chapter
11 of the Bankruptcy Code pursuant to that certain Third Amended Joint Plan
of Reorganization of the Account Party, dated December 28, 1989 (the
"Plan") as confirmed by order of the United States Bankruptcy Court for the
District of New Hampshire (the "Bankruptcy Court") on April 20, 1990. Such
reorganization (the "Reorganization") became effective on May 16, 1991 (the
"Plan Effective Date"). Terms used herein are defined in Section 1.01,
below.
In order to finance the Reorganization, the Account Party
entered into the following agreements (collectively, the "Financing
Agreements"):
(i) a $452,000,000 Term Credit Agreement among the
Account Party, the Banks and Co-Agents named therein and
Citibank, N.A., as Administrative Agent; and
(ii) a $200,000,000 Revolving Credit Agreement
among the Account Party, the Banks and Co-Agents named
therein, and Chemical Bank, as Administrative Agent.
In addition to the Financing Agreements, the following
additional sources of capital were utilized by the Account Party:
(x) the issuance and sale of First Mortgage Bonds
(including First Mortgage Bonds securing the Bonds referred
to hereinafter and First Mortgage Bonds securing other
Pollution Control Revenue Bonds of the Issuer for which the
Account Party is liable) in an aggregate principal amount
of $858,985,000 (the "Initial First Mortgage Bonds"); and
(y) the issuance and sale of $125,000,000 of Preferred
Stock of the Account Party.
Additionally, the Account Party has become bound by, and is
entitled to the full rights and benefits of, the Rate Agreement (subject to
any Governmental Approvals required from time to time as contemplated
thereby) and has entered into the other Significant Contracts in connection
with the effectiveness of the Plan and the Merger.
The Business Finance Authority (formerly The Industrial
Development Authority) of the State of New Hampshire (the "Issuer") has
issued, pursuant to a Series D Loan and Trust Agreement, dated as of May 1,
1991 (as supplemented or amended from time to time with the written consent
of the Issuing Bank, the "Indenture"), by and among the Issuer, the Account
Party and State Street Bank and Trust Company, as trustee (such entity, or
its successor as trustee, being the "Trustee"), $114,500,000 aggregate
principal amount of The Industrial Development Authority of the State of
New Hampshire Pollution Control Revenue Bonds (Public Service Company of
New Hampshire Project - 1991 Taxable Series D) (such Bonds, together with
any Tax-Exempt Refunding Bonds (as defined in the Indenture) issued to
refund such bonds as provided in Article IV of the Indenture, being
hereinafter referred to, collectively, as the "Bonds") and, pursuant to the
Indenture, the Account Party has previously caused Citibank, N.A.
("Citibank") to issue the letter of credit referred to therein in favor of
the Paying Agent.
The Account Party now wishes to substitute a letter of
credit issued by the Issuing Bank for the letter of credit previously
issued by Citibank, and, in furtherance thereof, the Account Party has
requested the Issuing Bank to issue its irrevocable letter of credit in
favor of the Paying Agent, in substantially the form of Exhibit 1.01A
hereto (such letter of credit of the Issuing Bank, as it may from time to
time be extended or modified pursuant to the terms of this Agreement, being
the "Letter of Credit"), in the amount of $121,014,000 (the "Stated
Amount"), of which (i) $114,500,000 shall support the payment of principal
of the Bonds (or the portion of the purchase or redemption price of the
Bonds corresponding to principal), (ii) $6,514,000 shall support the
payment of up to 128 days' interest on the principal amount of the Bonds
(or the portion of the purchase or redemption price of the Bonds
corresponding to interest), computed at a maximum interest rate of 16% per
annum on the basis of the actual days elapsed and a year of 360 days,
subject to modification as provided in Section 2.06 hereof, and (iii) $0.00
shall support the payment of premium on the Bonds. The Issuing Bank has
agreed to issue the Letter of Credit subject to the terms and conditions
set forth herein (including the terms and conditions relating to the rights
and obligations of the Participating Banks).
NOW, THEREFORE, in consideration of the premises and in
order to induce the Issuing Bank to issue the Letter of Credit and the
Participating Banks to participate in the Letter of Credit and make
advances hereunder, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.A. Certain Defined Terms. In addition to the terms defined
in the Preliminary Statement hereto, as used in this Agreement, the
following terms shall have the following meanings (such meanings to be
applicable to the singular and plural forms of the terms defined):
"Adjustment" at any time and for any purpose means whichever of
the following, if any, is applicable at such time:
(1) an increase of 0.25% per annum in the event that, and
at all times during which, the First Mortgage Bonds (or if no
First Mortgage Bonds are then outstanding, the senior secured
long-term Debt of the Account Party not entitled to the benefits
of a letter of credit or other credit enhancement facility) (the
"Senior Debt") are rated Ba1 (or lower) by Moody's or BB+ (or
lower) by S&P; or
(2) a decrease of 0.125% per annum in the event that, and
at all times during which, the Senior Debt is rated Baa2 (or
higher) by Moody's and BBB (or higher) by S&P;
The Adjustment shall be redetermined upon any change in the rating of
the Senior Debt by either Moody's or S&P, and shall be effective from
the date of such change.
"Advances" means Initial Advances and Term Advances, without
differentiation; individually, an "Advance".
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling (including, but not limited to all
directors and officers of such Person), controlled by, or under direct
or indirect common control with such Person. A Person shall be deemed
to control another entity if such Person possesses, directly or
indirectly, the power to direct or cause the direction of the
management and policies of such entity, whether through the ownership
of voting securities, by contract or otherwise.
"Agreement for Capacity Transfer" means the Agreement for
Capacity Transfer, dated as of December 1, 1989, between The
Connecticut Light and Power Company ("CL&P") and the Account Party, as
amended by the First Amendment to Agreement for Capacity Transfer,
dated as of May 1, 1992 between CL&P and the Account Party, which
provides for capacity transfers from the Account Party to CL&P.
"Alternate Base Rate" means, for any Interest Period or any other
period, a fluctuating interest rate per annum equal at all times to
the highest from time to time of:
(a) the rate of interest announced publicly by Barclays in
New York, New York, from time to time, as Barclays' prime rate;
and
(b) 1/2 of one percent per annum above the Federal Funds
Rate from time to time.
Each change in the Alternate Base Rate shall take effect concurrently
with any change in such prime rate or Federal Funds Rate, as the case
may be.
"Applicable Lending Office" means, with respect to each
Participating Bank, (i)(A) such Participating Bank's "Domestic Lending
Office" in the case of a Base Rate Advance, (B) such Participating
Bank's "CD Lending Office" in the case of a CD Rate Advance and (C)
such Participating Bank's "Eurodollar Lending Office" in the case of a
Eurodollar Rate Advance, in each case as specified opposite such
Participating Bank's name on Schedule I hereto (in the case of a
Participating Bank initially party to this Agreement) or in the
Participation Assignment pursuant to which such Participating Bank
became a Participating Bank (in the case of any other Participating
Bank), or (ii) such other office or affiliate of such Participating
Bank as such Participating Bank may from time to time specify to the
Account Party and the Agent.
"Assessment Rate" means, for any Interest Period or any other
period, the annual assessment rate per annum estimated by the Agent on
the first day of such Interest Period or such other period, as the
case may be, for determining the then average current annual
assessment payable by insured banks to the Federal Deposit Insurance
Corporation (or any successor) for insuring U.S. dollar deposits in
the United States. The "Assessment Rate" shall be adjusted
automatically on and as of the effective date of each change in any
such rate.
"Available Amount" in effect at any time means the maximum
aggregate amount available to be drawn at such time under the Letter
of Credit, the determination of such maximum amount to assume
compliance with all conditions for drawing and no reduction for (i)
any amount drawn by the Paying Agent to make a regularly scheduled
payment of interest on the Bonds (unless such amount will not be
reinstated under the Letter of Credit) or (ii) any amount not
available to be drawn because Bonds are held by or for the account of
the Account Party and/or in pledge for the benefit of the Issuing
Bank, but after giving effect, nevertheless, to any reduction in the
Stated Amount effected pursuant to Section 2.06 hereof.
"Bankruptcy Court" has the meaning assigned to that term in the
Preliminary Statement.
"Base Rate Advance" means an Advance in respect of which the
Account Party has selected in accordance with Article III hereof, or
this Agreement otherwise provides for, interest to be computed on the
basis of the Alternate Base Rate.
"Bonds" has the meaning assigned to that term in the Preliminary
Statement.
"Business Day" means a day of the year that is not a Sunday or
legal holiday or a day on which banks are authorized to close in New
York City and, (i) if the applicable Business Day relates to any
Eurodollar Rate Advance, is a day on which dealings are carried on in
the London interbank market and/or (ii) if the applicable Business Day
relates to any action to be taken by, or notice furnished to or by, or
payment to be made to or by, the Trustee, the Paying Agent, the
Remarketing Agent or the First Mortgage Trustee, is a day on which (A)
banking institutions are not authorized pursuant to law to close, (B)
the corporate trust office of the First Mortgage Trustee is open for
business, (C) banking institutions in all of the cities in which the
principal offices of the Issuing Bank, the Trustee, the Paying Agent,
the First Mortgage Trustee and, if applicable, the Remarketing Agent
are located are not required or authorized to remain closed and (D)
the New York Stock Exchange is not closed.
"CD Rate" means for any Interest Period for any CD Rate Advances
comprising part of the same Term Borrowing, an interest rate per annum
equal at all times during such Interest Period to the sum of:
(i) the rate per annum obtained by dividing (x) the
consensus bid rate determined by the Agent to be the average
(rounded upward to the nearest whole multiple of 1/100 of 1% per
annum, if such average is not such a multiple) of the bid rates
per annum, at 9:00 A.M. (New York City time) (or as soon
thereafter as practicable) on the first day of such Interest
Period, of three New York certificate of deposit dealers of
recognized standing selected by the Agent for the purchase at
face value of certificates of deposit of Barclays in an aggregate
amount substantially equal to the CD Rate Advance of Barclays
comprising part of the same Term Borrowing and with a maturity
equal to such Interest Period, by (y) a percentage equal to 100%
minus the Domestic Reserve Percentage for such Interest Period,
plus
(ii) 0.875% per annum; plus
(iii) the Assessment Rate for such Interest Period.
"CD Rate Advance" means an Advance in respect of which the
Account Party has selected in accordance with Article III hereof, and
this Agreement provides for, interest to be computed on the basis of
the CD Rate.
"Closing Date" means the Business Day upon which each of the
conditions precedent enumerated in Sections 5.01 and 5.02 hereof shall
be fulfilled to the satisfaction of the Agent, the Issuing Bank, the
Participating Banks and the Account Party. All transactions
contemplated to occur on the Closing Date shall occur
contemporaneously on or prior to October 5, 1992, at the offices of
Porter & Travers, 120 West 45th Street, New York, New York 10036, at
10:00 A.M. (New York City time), or at such other place and time as
the parties hereto may mutually agree.
"CL&P" has the meaning assigned to that term in the definition of
Agreement for Capacity Transfer.
"Collateral" means all of the collateral in which liens,
mortgages or security interests are purported to be granted by any or
all of the Security Documents.
"Commitment" means, for each Participating Bank, such
Participating Bank's Percentage of the Available Amount.
"Commitments" shall refer to the aggregate of the Commitments.
"Common Equity" means, at any date, an amount equal to the sum
of the aggregate of the par value of, or stated capital represented
by, the outstanding shares of common stock of the Account Party and
the surplus, paid-in, earned and other, if any, of the Account Party.
"Confidential Information" has the meaning assigned to that term
in Section 10.09 hereof.
"Conversion", "Convert" or "Converted" each refers to a
conversion of Term Advances pursuant to Section 3.04 hereof,
including, but not limited to any selection of a longer or shorter
Interest Period to be applicable to such Term Advances or any
conversion of a Term Advance as described in Section 3.04(c) hereof.
"Credit Termination Date" means the date on which the Letter of
Credit shall terminate in accordance with its terms.
"Debt" means, for any Person, without duplication, (i)
indebtedness of such Person for borrowed money, (ii) obligations of
such Person evidenced by bonds, debentures, notes or other similar
instruments, (iii) obligations of such Person to pay the deferred
purchase price of property or services, (iv) obligations of such
Person as lessee under leases which shall have been or should be, in
accordance with generally accepted accounting principles, recorded as
capital leases (not including the Unit Contract), (v) obligations
(contingent or otherwise) of such Person under reimbursement or
similar agreements with respect to the issuance of letters of credit,
(vi) net obligations (contingent or otherwise) of such Person under
interest rate swap, "cap", "collar" or other hedging agreements, (vii)
obligations of such person to pay rent or other amounts under leases
entered into in connection with sale and leaseback transactions
involving assets of such Person being sold in connection therewith,
(viii) obligations under direct or indirect guaranties in respect of,
and obligations (contingent or otherwise) to purchase or otherwise
acquire, or otherwise to assure a creditor against loss in respect of,
indebtedness or obligations of others of the kinds referred to in
clauses (i) through (vii), above, and (ix) liabilities in respect of
unfunded vested benefits under ERISA Plans.
"Default Rate" means a fluctuating interest rate equal at all
times to 2% per annum above the Alternate Base Rate in effect from
time to time.
"Domestic Reserve Percentage" means, for any Interest Period or
any other period, the reserve percentage applicable on the first day
of such Interest Period or such other period, as the case may be,
under regulations issued from time to time by the Board of Governors
of the Federal Reserve System (or any successor) for determining the
maximum reserve requirement (including, but not limited to, any
emergency, supplemental or other marginal reserve requirement) for
Barclays with respect to liabilities consisting of or including (among
other liabilities) U.S. dollar nonpersonal time deposits in the United
States and with a maturity equal to such Interest Period or such other
period, as the case may be. The "Domestic Reserve Percentage" shall
be determined from time to time by the Agent and shall be adjusted
automatically on and as of the effective date of each change in any
reserve requirement.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA Affiliate" means, with respect to any Person, any trade or
business (whether or not incorporated) which is a "commonly controlled
entity" of the Account Party within the meaning of the regulations
under Section 414 of the Internal Revenue Code of 1986, as amended
from time to time.
"ERISA Multiemployer Plan" means a "multiemployer plan" subject
to Title IV of ERISA.
"ERISA Plan" means an employee benefit plan (other than an ERISA
Multiemployer Plan) maintained for employees of the Account Party or
any ERISA Affiliate and covered by Title IV of ERISA.
"ERISA Plan Termination Event" means (i) a Reportable Event
described in Section 4043 of ERISA and the regulations issued
thereunder (other than a Reportable Event not subject to the provision
for 30-day notice to the PBGC under such regulations) with respect to
an ERISA Plan or an ERISA Multiemployer Plan, or (ii) the withdrawal
of the Account Party or any of its ERISA Affiliates from an ERISA Plan
or an ERISA Multiemployer Plan during a plan year in which it was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA, or
(iii) the filing of a notice of intent to terminate an ERISA Plan or
an ERISA Multiemployer Plan or the treatment of an ERISA Plan or an
ERISA Multiemployer Plan under Section 4041 of ERISA, or (iv) the
institution of proceedings to terminate an ERISA Plan or an ERISA
Multiemployer Plan by the PBGC, or (v) any other event or condition
which might constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any
ERISA Plan or ERISA Multiemployer Plan.
"Eurocurrency Liabilities" has the meaning assigned to that term
in Regulation D of the Board of Governors of the Federal Reserve
System, as in effect from time to time.
"Eurodollar Rate" means for any Interest Period for any
Eurodollar Rate Advances comprising part of the same Term Borrowing,
an interest rate per annum equal at all times during such Interest
Period to the sum of:
(i) the rate per annum (rounded upward to the nearest whole
multiple of 1/100 of 1% per annum, if such rate is not such a
multiple) determined by the Agent at which deposits in United
States dollars in amounts comparable to the Eurodollar Rate
Advance of Barclays comprising part of such Term Borrowing and
for comparable periods as such Interest Period are offered by the
principal office of Barclays in London, England to prime banks in
the London interbank market at 11:00 A.M. (London time) two
Business Days before the first day of such Interest Period, plus
(ii) 0.75% per annum.
"Eurodollar Rate Advance" means an Advance in respect of which
the Account Party has selected in accordance with Article III hereof,
and this Agreement provides for, interest to be computed on the basis
of the Eurodollar Rate.
"Eurodollar Reserve Percentage" of any Participating Bank for
each Interest Period for each Eurodollar Rate Advance means the
reserve percentage applicable during such Interest Period (or if more
than one such percentage shall be so applicable, the daily average of
such percentages for those days in such Interest Period during which
any such percentage shall be so applicable) under Regulation D or
other regulations issued from time to time by the Board of Governors
of the Federal Reserve System (or any successor) for determining the
maximum reserve requirement (including, without limitation, any
emergency, supplemental or other marginal reserve requirement, without
benefit of or credit for proration, exemptions or offsets) for such
Participating Bank with respect to liabilities or assets consisting of
or including "eurocurrency liabilities" having a term equal to such
Interest Period.
"Event of Default" has the meaning assigned to that term in
Section 8.01.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers, as published on the next succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so published
on the next succeeding Business Day, the average of the quotations for
such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by it.
"Financing Agreements" has the meaning assigned to that term in
the Preliminary Statement.
"First Mortgage Bonds" means first mortgage bonds issued or to be
issued by the Account Party and secured, directly or indirectly,
collectively or severally, by one or more first-priority liens on all
or part of the Indenture Assets pursuant to the First Mortgage
Indenture or another indenture in form and substance satisfactory to
the Majority Lenders. For purposes hereof, all or part of the First
Mortgage Bonds may be issued as collateral for pollution control
revenue bonds or industrial revenue bonds, whether taxable or tax
exempt issued by the Account Party or by a governmental authority at
the Account Party's request.
"First Mortgage Indenture" means the General and Refunding
Mortgage Indenture, between the Account Party and New England
Merchants National Bank, as trustee and to which First Fidelity Bank,
National Association, New Jersey, is to be successor trustee, dated as
of August 15, 1978, as amended through the Plan Effective Date, and as
the same may thereafter be amended, supplemented or modified from time
to time.
"First Mortgage Trustee" means the trustee from time to time
under the First Mortgage Indenture.
"Governmental Approval" means any authorization, consent,
approval, license, permit, certificate, exemption of, or filing or
registration with, any governmental authority or other legal or
regulatory body (including, without limitation, the Bankruptcy Court),
required in connection with either (i) the execution, delivery or
performance of the Rate Agreement, any Loan Document, Related
Document, Financing Agreement or Significant Contract, (ii) the grant
and perfection of any security interest, lien or mortgage contemplated
by the Security Documents, or (iii) the nature of the Account Party's
business as conducted or the nature of the property owned or leased by
it. For purposes of this Agreement, Chapter 362-C of the Revised
Statutes Annotated of New Hampshire, in effect on the date hereof,
shall be deemed to be a Governmental Approval.
"Hazardous Substance" means any waste, substance or material
identified as hazardous, dangerous or toxic by any office, agency,
department, commission, board, bureau or instrumentality of the United
States of America or of the State or locality in which the same is
located having or exercising jurisdiction over such waste, substance
or material.
"Indemnified Person" has the meaning assigned to that term in
Section 10.04(b) hereof.
"Indenture" has the meaning assigned to that term in the
Preliminary Statement.
"Indenture Assets" means fixed assets of the Account Party
(including related Governmental Approvals and regulatory assets) which
from time to time are subject to the first-priority lien under the
First Mortgage Indenture.
"Information Memorandum" means the syndication memorandum, dated
May 1992 regarding the Account Party and NU, as distributed to the
Issuing Bank and the Participating Banks, including, without
limitation, the Annual Reports of the Account Party and NU on Form 10-
K for the fiscal year ended December 31, 1991.
"Initial Advance" has the meaning assigned to that term in
Section 3.02(a) hereof.
"Initial First Mortgage Bonds" has the meaning assigned to that
term in the Preliminary Statement.
"Initial Repayment Date" has the meaning assigned to that term in
Section 3.02(a) hereof.
"Interest Component" has the meaning assigned to that term in the
Letter of Credit.
"Interest Drawing" has the meaning assigned to that term in the
Letter of Credit.
"Interest Period" has the meaning assigned to that term in
Section 3.03(b) hereof.
"Issuer" has the meaning assigned to that term in the Preliminary
Statement.
"Issuer Resolution" means the resolution adopted by the Issuer
that authorized the issuance of the Bonds, approved the terms and
provisions of the Bonds, and approved those of the documents related
to the Bonds to which the Issuer is a party.
"Letter of Credit" has the meaning assigned to that term in the
Preliminary Statement.
"Lien" has the meaning assigned to that term in Section 7.02(a)
hereof.
"Loan Documents" means this Agreement and the Security Documents.
"Major Electric Generating Plants" means the following nuclear,
combustion turbine and coal, oil or diesel-fired generating stations
of the Account Party: the Merrimack generating station located in
Bow, New Hampshire; the Newington generating station located in
Newington, New Hampshire; the Schiller generating station located in
Portsmouth, New Hampshire; the White Lake combustion turbine located
in Tamworth, New Hampshire; the Millstone Unit No. 3 generating
station located in Waterford, Connecticut, and the Wyman Unit No. 4
generating station located in Yarmouth, Maine.
"Majority Lenders" means on any date of determination, (i) the
Issuing Bank and (ii) Participating Banks who, collectively, on such
date, have Percentages in the aggregate of at least 66-2/3%.
Determination of those Participating Banks satisfying the criteria
specified above for action by the Majority Lenders shall be made by
the Agent and shall be conclusive and binding on all parties absent
manifest error.
"Merger" means (i) the merger on June 5, 1992 of NU Acquisition
Corp., a wholly-owned subsidiary of NU, with and into the Account
Party and (ii) the transfer on the same date by the Account Party, as
so merged, to NAEC of the Seabrook Interests in accordance with the
Plan and the Rate Agreement.
"Moody's" means Moody's Investors Service, Inc. or any successor
thereto.
"NAEC" means North Atlantic Energy Corporation, a corporation
wholly-owned by NU for the sole purpose of acquiring the Seabrook
Interests, which were acquired by NAEC from the Account Party on June
5, 1992.
"NU" means Northeast Utilities, an unincorporated voluntary
business association organized under the laws of the Commonwealth of
Massachusetts.
"NUSCO" means Northeast Utilities Service Company, a Connecticut
corporation and a wholly-owned subsidiary of NU.
"Original Reimbursement Agreement" means the Series D Letter of
Credit and Reimbursement Agreement, dated as of May 1, 1991, among the
Account Party, Citibank and the Participating Banks referred to
therein relating to the Issuer's Pollution Control Revenue Bonds
(Public Service Company of New Hampshire Project-1991 Taxable Series
D).
"Participant" shall have the meaning assigned to that term in
Section 10.06(b) hereof.
"Participating Banks" means the Persons listed on the signature
pages hereof following the heading "Participating Banks" and any other
Person who becomes a party hereto pursuant to Section 10.06 hereof.
"Participation Assignment" means a participation assignment
entered into pursuant to Section 10.06 hereof by any Participating
Bank and an assignee, in substantially the form of Exhibit 1.01B
hereto.
"Participation Percentage" means, as of any date of determination
(i) with respect to a Participating Bank initially a party hereto, the
percentage set forth opposite such Participating Bank's name on the
signature pages hereof, except as provided in clause (iii), below,
(ii) with respect to a Participating Bank that became a party hereto
by operation of Section 10.06(a) hereof, the Participation Percentage
stated to be assumed by such assignee Participating Bank in the
relevant Participation Assignment, except as provided in clause (iii),
below, and (iii) with respect to any Participating Bank described in
clauses (i) and (ii), above, that assigns a percentage of its
interests in accordance with Section 10.06(a) hereof, its
participation percentage as reduced by the percentage so assigned.
"Paying Agent" means (i) Security Pacific National Trust Company
(New York), as the initial paying agent for the Bonds under the
Indenture, and (ii) any successor paying agent for the Bonds under the
Indenture.
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor entity) established under ERISA.
"Permitted Investments" means each and any of the following so
long as (A) with respect to Permitted Investments held or maintained
by the Issuing Bank as collateral security, if any, no such Permitted
Investment shall have a final maturity later than one month from the
date of investment therein and (B) with respect to all other Permitted
Investments, no such Permitted Investment shall have a final maturity
later than 12 months from the date of investment therein and all such
Permitted Investments, collectively, shall have a dollar-weighted
average maturity no later than six months from any date of
determination:
(i) direct obligations of the United States of America, or
obligations guaranteed as to principal and interest by the United
States of America;
(ii) subject to any more stringent requirement
contained in the Financing Agreements, certificates of deposit,
eurodollar certificates of deposit or bankers' acceptances
issued, or time deposits held, or investment contracts
guaranteed, by (a) any Participating Bank or any of the "Banks"
under the Financing Agreements; or (b) any other commercial bank,
trust company, savings and loan association or savings bank
organized under the laws of the United States of America, or any
State thereof, or of any other country which is a member of the
Organization for Economic Cooperation and Development (or a
political subdivision of any such country) having outstanding
unsecured indebtedness that is rated (on the date of acquisition
thereof) AA- or better by Standard & Poor's Corporation or Aa3 or
better by Moody's Investors Service, Inc. (or an equivalent
rating by another nationally recognized credit rating agency of
similar standing if neither of such corporations is then in the
business of rating unsecured bank indebtedness);
(iii) subject to any more stringent requirement
contained in the Financing Agreements, obligations with any
Participating Bank, any of such Banks or any other bank or trust
company described in clause (ii), above, in respect of the
repurchase of obligations of the type described in clause (i),
above, provided that such repurchase obligations shall be fully
secured by obligations of the type described in said clause (i)
and the possession of such obligations shall be transferred to,
and segregated from other obligations owned by, such
Participating Bank, Bank or other bank or trust company;
(iv) commercial paper rated (on the date of acquisition
thereof) A-1 or P-1 or better by S&P or Moody's, respectively (or
an equivalent rating by another nationally recognized credit
rating agency of similar standing if neither of such corporations
is then in the business of rating commercial paper); and
(v) obligations of NU or any Affiliate of NU held or
maintained in accordance with NUSCO intercompany lending
arrangements.
"Person" means an individual, partnership, corporation (including
a business trust), joint stock company, trust, estate, unincorporated
association, joint venture or other entity, or a government or any
political subdivision or agency thereof.
"Plan" has the meaning assigned to that term in the Preliminary
Statement.
"Plan Effective Date" has the meaning assigned to that term in
the Preliminary Statement.
"Pledge Agreement" means the Series D Pledge Agreement, dated as
of May 1, 1991, by the Account Party in favor of Citibank, as amended
by a First Amendment thereto (the "Pledge Amendment") in substantially
the form of Exhibit 1.01C hereto, and as the same may from time to
time be amended, modified or supplemented.
"Pledged Bonds" shall have the meaning assigned to that term in
the Pledge Agreement.
"Preferred Stock" means 5,000,000 shares of Series A Preferred
Stock of the Account Party (par value $25).
"Premium Component" has the meaning assigned to that term in the
Letter of Credit.
"Principal Component" has the meaning assigned to that term in
the Letter of Credit.
"PSNH Mortgage" has the meaning assigned to that term in the
Financing Agreements.
"Purchase Contract" means the Series D and E Bond Purchase
Agreement, dated May 15, 1991, among the Issuer, the Account Party,
Goldman, Sachs & Co. and Morgan Stanley & Co. Incorporated.
"Rate Agreement" means the Agreement dated as of November 22,
1989, as amended by the First Amendatory Agreement dated as of
December 5, 1989, and the Second Amendatory Agreement dated as of
December 12, 1989, among NUSCO, the Governor and Attorney General of
the State of New Hampshire and adopted by the Account Party as of July
10, 1990 (without giving effect to any deemed modification effected
pursuant to Section 2(c) thereof except and to the extent the Majority
Lenders shall have consented thereto in writing, and excluding the
Unit Contract appended as Exhibit A thereto subsequent to the
effectiveness of such contract).
"Recipient" has the meaning assigned to that term in Section
10.09 hereto.
"Related Documents" means the Letter of Credit, the Bonds, the
Indenture, any Remarketing Agreement and the Purchase Contract.
"Remarketing Agent" has the meaning assigned to that term in the
Indenture.
"Remarketing Agreement" means (i) the Remarketing Agreement,
dated as of May 1, 1991, between the Account Party and Goldman, Sachs
Money Markets Inc., as the same may be amended from time to time; and
(ii) any successor remarketing agreement between the Account Party and
a successor Remarketing Agent as shall be in effect from time to time
in accordance with the terms of the Indenture.
"Restricted Payment" has the meaning assigned to that term in
Section 7.02(f) hereof.
"S&P" means Standard and Poor's Corporation or any successor
thereto.
"Seabrook" means the nuclear-fueled, steam-electric generating
plant at a site located in Seabrook, New Hampshire, and the related
real property interests, fixtures, and other fixed assets.
"Seabrook Interests" means all right, title and interest of the
Account Party, prior to the Merger, in and to the fixed assets of
Seabrook, nuclear fuel relating to Seabrook and Governmental Approvals
relating thereto, including the undeveloped land adjacent to Seabrook
then wholly-owned by the Account Party and described as the "Adjacent
Property" in Schedule D to the PSNH Mortgage.
"Security Documents" means the Pledge Agreement, the Indenture,
the First Mortgage Indenture and the Series F First Mortgage Bonds.
"Series E Reimbursement Agreement" means (i) the Series E Letter
of Credit and Reimbursement Agreement, dated as of May 1, 1991, among
the Account Party, Citibank and the Participating Banks referred to
therein relating to the Issuer's Pollution Control Revenue Bonds
(Public Service Company of New Hampshire Project-1991 Taxable Series
E), as the same may from time to time be amended, modified or
supplemented or (ii) any reimbursement agreement or similar agreement
relating to a substitute Credit Facility applicable to such bonds.
"Series F First Mortgage Bonds" means the Account Party's Series
F First Mortgage Bonds.
"Sharing Agreement" means the Sharing Agreement, dated as of June
1, 1992, among CL&P, Western Massachusetts Electric Company, Holyoke
Water Power Company, Holyoke Power and Electric Company, the Account
Party and NUSCO.
"Significant Contracts" means the following contracts, in each
case as the same may be amended, modified or supplemented from time to
time in accordance with this Agreement:
(i) the Agreement for Capacity Transfer;
(ii) the Sharing Agreement;
(iii) the Tax Allocation Agreement; and
(iv) the Unit Contract.
"Stated Amount" has the meaning assigned to that term in the
Preliminary Statement hereto.
"Stated Termination Date" means the expiration date specified in
clause (i) of the first paragraph of Paragraph (1) of the Letter of
Credit, as such date may be extended pursuant to Section 2.05 hereof.
"Tax Allocation Agreement" means the Amended and Restated Tax
Allocation Agreement, dated as of January 1, 1990, among NU and the
members of the consolidated group of which NU is the common parent,
including, without limitation, the Account Party.
"Tender Drawing" has the meaning assigned to that term in the
Letter of Credit.
"Term Advance" has the meaning assigned to that term in Section
3.02(b) hereof, and refers to a Base Rate Advance, a CD Rate Advance
or a Eurodollar Rate Advance (each of which shall be a "Type" of Term
Advance). The Type of a Term Advance may change from time to time
when such Term Advance is Converted. For purposes of this Agreement,
all Term Advances of a Participating Bank (or portions thereof) made
as, or Converted to, the same Type and Interest Period on the same day
shall be deemed a single Term Advance by such Participating Bank until
repaid or next Converted.
"Term Borrowing" means a borrowing consisting of Term Advances of
the same Type and Interest Period made on the same day by the
Participating Banks, ratably in accordance with their respective
Participation Percentages. A Term Borrowing may be referred to herein
as being a "Type" of Term Borrowing, corresponding to the Type of Term
Advances comprising such Term Borrowing. For purposes of this
Agreement, all Term Advances made as, or Converted to, the same Type
and Interest Period on the same day shall be deemed a single Term
Borrowing until repaid or next Converted.
"Termination Date" means the Stated Termination Date or the
earlier date of termination of the Commitments pursuant to Sections
2.02 or 8.02 hereunder.
"Total Capitalization" means, as of any day, the aggregate of
all amounts that would, in accordance with generally accepted
accounting principles applied on a basis consistent with the standards
referred to in Section 1.03 hereof, appear on the balance sheet of the
Account Party as at such day as the sum of (i) the principal amount of
all long-term Debt of the Account Party on such day, (ii) the par
value of, or stated capital represented by, the outstanding shares of
all classes of common and preferred shares of the Account Party on
such day, (iii) the surplus of the Account Party, paid-in, earned and
other, if any, on such day and (iv) the unpaid principal amount of all
short-term Debt of the Account Party on such day.
"Trustee" has the meaning assigned to that term in the
Preliminary Statement hereto.
"Type" has the meaning assigned to such term in the definitions
of "Term Advance" and "Term Borrowing" herein.
"Unit Contract" means the Unit Contract, dated as of June 1,
1992, between the Account Party and NAEC.
"Unmatured Default" means the occurrence and continuance of an
event which, with the giving of notice or lapse of time or both, would
constitute an Event of Default.
SECTION 1.B. Computation of Time Periods. In the computation of
periods of time under this Agreement any period of a specified number of
days or months shall be computed by including the first day or month
occurring during such period and excluding the last such day or month. In
the case of a period of time "from" a specified date "to" or "until" a
later specified date, the word "from" means "from and including" and the
words "to" and "until" each means "to but excluding".
SECTION 1.C. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles applied on a basis consistent with the application
employed in the preparation of the financial projections and pro-formas
referred to in Section 5.01 hereof.
SECTION 1.D. Computations of Outstandings. Whenever reference is made
in this Agreement to the principal amount outstanding on any date under
this Agreement, such reference shall refer to the sum of (i) the Available
Amount on such date, (ii) the aggregate principal amount of all Advances
outstanding on such date and (iii) the aggregate amount of all demand loans
under Section 3.01 hereunder on such date, in each case after giving effect
to all transactions to be made on such date and the application of the
proceeds thereof.
ARTICLE II
THE LETTER OF CREDIT
SECTION 2.01. The Letter of Credit. The Issuing Bank agrees, on the
terms and conditions hereinafter set forth (including, without limitation,
the applicable conditions precedent set forth in Article V hereof), to
issue the Letter of Credit to the Paying Agent, upon not less than three
Business Days prior notice from the Account Party, on the Closing Date.
SECTION 2.02. Termination of the Commitments. The obligation of the
Issuing Bank to issue the Letter of Credit shall automatically terminate if
unexercised at 5:00 P.M. (New York City time) on October 15, 1992.
SECTION 2.03. Commissions and Fees. (a) The Account Party hereby
agrees to pay to the Agent, for the account of the Participating Banks
ratably in accordance with their respective Participation Percentages, a
letter of credit commission on the Available Amount in effect from time to
time from the date of issuance of the Letter of Credit until the
Termination Date (disregarding for such purpose any temporary diminution
thereof arising from drawings under the Letter of Credit to pay interest
(or purchase price corresponding to interest) on the Bonds, regardless of
whether the amount so drawn shall be thereafter reinstated), at a rate
equal to 0.725% per annum as increased or decreased by the Adjustment,
payable quarterly in arrears on the first day of October, January, April
and July in each year, commencing on the first such date to occur following
the date of issuance of the Letter of Credit, and on the Credit Termination
Date.
(b) The Account Party also agrees to pay to the Agent for the account
of the Participating Banks ratably in accordance with their respective
Participation Percentages, a one-time participation fee in the amount
agreed upon by the Agent and the Account Party, such participation fee to
be payable in full simultaneously with the issuance of the Letter of
Credit.
(c) The Account Party also agrees to pay to the Agent, for the
account of the Issuing Bank, such other fees as have been agreed upon by
the Account Party and the Issuing Bank.
(d) The Account Party also agrees to pay to the Agent, for its own
account, such other fees as have been agreed upon by the Account Party and
the Agent.
SECTION 2.04. Reinstatement of the Letter of Credit. (a) The
Interest Component and the Principal Component shall, from time to time, be
reinstated by the Issuing Bank in accordance with, and only to the extent
provided in, the Letter of Credit. In no event shall reductions in the
Premium Component be reinstated.
(b) Interest Component. With respect to reinstatement of reductions
in the Interest Component resulting from Interest Drawings:
(i) The Issuing Bank may only deliver to the Paying Agent any
notice of non-reinstatement pursuant to Paragraph 5(i)(A) of the
Letter of Credit if (A) the Issuing Bank and/or the Participating
Banks have not been reimbursed in full by the Account Party for one or
more drawings, together with interest, if any, owing thereon pursuant
to this Agreement, or (B) an Event of Default has occurred and is then
continuing.
(ii) If, subsequent to any such delivery of a notice of non-
reinstatement, the circumstances giving rise to the delivery of such
notice of non-reinstatement shall have ceased to exist (whether as a
result of reimbursement of unreimbursed drawings, or waiver or cure of
an Event of Default, or otherwise), then, provided that no other Event
of Default shall have occurred and be continuing, the Issuing Bank
shall deliver to the Paying Agent, by hand delivery or facsimile
transmission, a Notice of Reinstatement in the form of Exhibit 5 to
the Letter of Credit reinstating that portion of the Interest
Component in respect of which such notice of non-reinstatement was
given.
(c) Principal Component. With respect to reinstatement of a
reduction in the Principal Component resulting from any Tender Drawing, IF:
(i) such reduction has not been reinstated pursuant to Paragraph
5(ii)(A) of the Letter of Credit;
(ii) the Issuing Bank and/or the Participating Banks shall have
been reimbursed by the Account Party for such Tender Drawing;
(iii) any demand loan(s) and Advance(s) made in respect of such
Tender Drawing shall have been repaid by the Account Party, together
with any interest thereon and any other amounts payable hereunder in
connection therewith; AND
(iv) no Event of Default shall have occurred and then be
continuing;
THEN, the Issuing Bank shall deliver to the Paying Agent, by hand delivery
or facsimile transmission, a Notice of Reinstatement in the form of Exhibit
5 to the Letter of Credit reinstating the Principal Component to the extent
of such Tender Drawing.
SECTION 2.05. Extension of the Stated Termination Date. Unless the
Letter of Credit shall have previously expired in accordance with its
terms, at least 105 days but not more than 120 days before the Stated
Termination Date, the Account Party may, by notice to the Agent (any such
notice being irrevocable), request the Issuing Bank and the Participating
Banks to extend the Stated Termination Date of the Letter of Credit for a
period of one year. If the Account Party shall make such request, the
Agent shall promptly inform the Issuing Bank and the Participating Banks
and, no later than 60 days prior to the Stated Termination Date, the Agent
shall notify the Account Party in writing (with a copy of such notice to
the Trustee and the Paying Agent) if the Issuing Bank and the Participating
Banks consent to such request and the conditions of such consent (including
conditions relating to legal documentation). The granting of any such
consent shall be in the sole and absolute discretion of the Issuing Bank
and the Participating Banks, and if the Agent shall not so notify the
Account Party, such lack of notification shall be deemed to be a
determination not to consent to such request.
SECTION 2.06. Modification of the Letter of Credit. In the event that
the Account Party elects to cause the issuance of Tax-Exempt Refunding
Bonds (as defined in the Indenture) pursuant to Article IV of the
Indenture, the Account Party may, but shall not be obligated to, propose
amendments to the Letter of Credit to change the method of computing the
Interest Component or such other terms thereof as may be necessary or
appropriate in connection with such issuance. Any such proposal shall be
furnished to the Issuing Bank in writing not later than 60 days prior to
the date proposed for such issuance. If the Issuing Bank shall consent to
such amendments (which consent, subject to the provisions of the next
succeeding sentence, shall not be unreasonably withheld) the Issuing Bank
shall, upon surrender of the Letter of Credit by the beneficiary thereof
for amendment (or replacement, as the Issuing Bank may elect), amend the
Letter of Credit accordingly (or issue a replacement Letter of Credit
therefor reflecting such amendments but otherwise identical to the Letter
of Credit so surrendered). Notwithstanding the foregoing, the Issuing Bank
shall not be obligated to consent to any amendment or amendments that (i)
increase the Stated Amount or the then-existing Available Amount, (ii)
change or modify in any respect the Credit Termination Date or any
provision for determining the expiry or other termination of the Letter of
Credit, (iii) change or modify in any respect the times, places or manner
at or in which drawings under the Letter of Credit are to be presented or
paid, (iv) change or modify in any respect the forms of drawing
certificates and other annexes to the Letter of Credit, (v) change the
beneficiary of the Letter of Credit or the method prescribed therein for
the transfer of the Letter of Credit or (vi) as determined in the good
faith discretion of the Issuing Bank and its counsel, increase or enlarge
the scope, or modify the nature, of the Issuing Bank's and the
Participating Banks' credit exposure to the Account Party or any legal
risks related thereto or expose the Issuing Bank to any additional
liability. In furtherance of the foregoing, the Issuing Bank may condition
the granting of such consent on the receipt by the Issuing Bank of such
certificates, opinions of counsel and other assurances of the Account Party
and its counsel, or bond counsel or the Trustee or Paying Agent, as the
Issuing Bank may reasonably require. Each Participating Bank, by its
execution of this Agreement, or of the Participation Assignment pursuant to
which it became a Participating Bank, consents to, ratifies and affirms all
actions taken and to be taken by the Issuing Bank pursuant to this Section
2.06.
ARTICLE III
REIMBURSEMENT AND ADVANCES
SECTION 3.01. Reimbursement on Demand. Subject to the provisions of
Section 3.02 hereof, the Account Party hereby agrees to pay (whether with
the proceeds of Initial Advances made pursuant to this Agreement or
otherwise) to the Issuing Bank on demand (a) on and after each date on
which the Issuing Bank shall pay any amount under the Letter of Credit
pursuant to any draft, but only after so paid by the Issuing Bank, a sum
equal to such amount so paid (which sum shall constitute a demand loan from
the Issuing Bank to the Account Party from the date of such payment by the
Issuing Bank until so paid by the Account Party), plus (b) interest on any
amount remaining unpaid by the Account Party to the Issuing Bank under
clause (a), above, from the date such amount becomes payable on demand
until payment in full, at the Default Rate in effect from time to time. No
reinstatement of the Interest Component or the Principal Component despite
the failure by the Account Party to reimburse the Issuing Bank for any
previous drawing to pay interest on the Bonds shall limit or impair the
Account Party's obligations under this Section 3.01.
SECTION 3.02. Advances. Each Participating Bank agrees to make
Initial Advances and Term Advances for the account of the Account Party
from time to time upon the terms and subject to the conditions set forth in
this Agreement.
(a) Initial Advances; Repayment of Initial Advances. If the Issuing
Bank shall honor any Tender Drawing and if the conditions precedent set
forth in Section 5.03 of this Agreement have been satisfied as of the date
of such honor, then, each Participating Bank's payment made to the Issuing
Bank pursuant to Section 3.07 hereof in respect of such Tender Drawing
shall be deemed to constitute an advance made for the account of the
Account Party by such Participating Bank (each such advance being an
"Initial Advance" made by such Participating Bank). Each Initial Advance
shall be made as a Base Rate Advance, shall bear interest at the Alternate
Base Rate and shall not be entitled to be Converted. Subject to Article
VIII of this Agreement, each Initial Advance and all interest thereon shall
be due and payable on the earlier to occur of (i) the date 30 days from the
date of such Initial Advance (such repayment date being the "Initial
Repayment Date" for such Initial Advance) and (ii) the Termination Date.
The Account Party may repay the principal amount of any Initial Advance
with (and to the extent of) the proceeds of a Term Advance made pursuant to
subsection (b), below, and may prepay Initial Advances in accordance with
Section 3.06 hereof.
(b) Term Advances; Repayment. Subject to the satisfaction of the
conditions precedent set forth in Section 5.04 hereof and the other
conditions of this subsection (b), each Participating Bank agrees to make
one or more advances for the account of the Account Party ("Term Advances")
on each Initial Repayment Date in an aggregate principal amount equal to
the amount of such Participating Bank's Initial Advances maturing on such
Initial Repayment Date. All Term Advances comprising a single Term
Borrowing shall be made upon written notice given by the Account Party to
the Agent not later than 11:00 A.M. (New York City time) (A) in the case of
a Term Borrowing comprised of Base Rate Advances, on the Business Day of
such proposed Term Borrowing, (B) in the case of a Term Borrowing comprised
of CD Rate Advances, two Business Days prior to the date of such Term
Borrowing and (C) in the case of a Term Borrowing comprised of Eurodollar
Rate Advances, three Business Days prior to the date of such proposed Term
Borrowing. The Agent shall notify each Participating Bank of the contents
of such notice promptly after receipt thereof. Each such notice shall
specify therein the following information: (W) the date on which such Term
Borrowing is to be made, (X) the principal amount of Term Advances
comprising such Term Borrowing, (Y) the Type of Term Borrowing and (Z) the
duration of the initial Interest Period, if applicable, proposed to apply
to the Term Advances comprising such Term Borrowing. The proceeds of each
Participating Bank's Term Advances shall be applied solely to the repayment
of the Initial Advances made by such Participating Bank and shall in no
event be made available to the Account Party. The principal amount of each
Term Advance, together with all accrued and unpaid interest thereon, shall
be due and payable on the earlier to occur of (x) the same calendar date
occurring 35 months following the date upon which such Term Advance is made
(or, if such month does not have a corresponding date, on the last day of
such month) and (y) the Termination Date.
SECTION 3.03. Interest on Advances. The Account Party shall pay
interest on the unpaid principal amount of each Advance from the date of
such Advance until such principal amount is paid in full at the applicable
rate set forth below:
(a) Alternate Base Rate. Except to the extent that the Account
Party shall elect to pay interest on any Advance for any Interest
Period pursuant to paragraph (c) or (d) of this Section 3.03, the
Account Party shall pay interest on each Advance (including all
Initial Advances) from the date thereof until the date such Advance is
due, at a fluctuating interest rate per annum in effect from time to
time equal to the Alternate Base Rate in effect from time to time.
The Account Party shall pay interest on each Advance bearing interest
in accordance with this subsection quarterly in arrears on the first
day of October, January, April and July in each year and on the
Termination Date or the earlier date for repayment of such Advance
(including the Initial Repayment Date therefor, in the case of an
Initial Advance).
(b) Interest Periods. Subject to the other requirements of
this Section 3.03, the Account Party may from time to time elect to
have the interest on all Term Advances comprising part of the same
Term Borrowing determined and payable for a specified period (an
"Interest Period" for such Term Advances) in accordance with paragraph
(c) or (d) of this Section 3.03. The first day of an Interest Period
for such Term Advances shall be the date such Advance is made or most
recently Converted, which shall be a Business Day. All Interest
Periods shall end on or prior to the Stated Termination Date. Any
Interest Period for a Term Advance that would otherwise end after the
Termination Date or earlier date for the repayment of such Advance
shall be deemed to end on the Termination Date or such earlier
repayment date, as the case may be.
(c) CD Rate. Subject to the requirements of this Section 3.03
and Article V hereof, the Account Party may from time to time elect to
have any Term Advances comprising part of the same Term Borrowing made
as, or Converted to, CD Rate Advances. The Interest Period applicable
to such CD Rate Advances shall be of 30, 60, 90 or 180 days' duration,
as the Account Party shall select in its notice delivered to the Agent
pursuant to Section 3.02(b) or 3.04 hereof, as applicable. If the
Account Party shall have made such election, the Account Party shall
pay interest on such CD Rate Advances at the CD Rate, for the
applicable Interest Period for such CD Rate Advances, which interest
shall be payable on the last day of such Interest Period, on the date
for repayment for such CD Rate Advances and also, in the case of any
Interest Period of 180 days' duration, on the 90th day of such
Interest Period.
(d) Eurodollar Rate. Subject to the requirements of this
Section 3.03 and Article V hereof, the Account Party may from time to
time elect to have any Term Advances comprising part of the same Term
Borrowing made as, or Converted to, Eurodollar Rate Advances. The
Interest Period applicable to such Eurodollar Rate Advances shall be
of one, two, three or six whole months' duration, as the Account Party
shall select in its notice delivered to the Agent pursuant to Section
3.02(b) or 3.04 hereof, as applicable. If the Account Party shall
have made such election, the Account Party shall pay interest on such
Eurodollar Rate Advances at the Eurodollar Rate, for the applicable
Interest Period for such Eurodollar Rate Advances, which interest
shall be payable on the last day of such Interest Period, on the date
for repayment for such Eurodollar Rate Advances and also, in the case
of any Interest Period of six months' duration, on that day of the
third month of such Interest Period which corresponds with the first
day of such Interest Period (or, if any such month does not have a
corresponding day, then on the last day of such month). Any Interest
Period pertaining to Eurodollar Rate Advances that begins on the last
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of a calendar
month.
(e) Interest Rate Determinations. The Agent shall give prompt
notice to the Account Party and the Participating Banks of the
Eurodollar Rate or CD Rate determined from time to time by the Agent
to be applicable to each Eurodollar Rate Advance or CD Rate Advance,
as the case may be.
SECTION 3.04. Conversion of Term Advances. Subject to the
satisfaction of the conditions precedent set forth in Section 5.03 hereof,
the Account Party may elect to Convert one or more Term Advances of any
Type to one or more Term Advances of the same or any other Type on the
following terms and subject to the following conditions:
(a) Each Conversion shall be made as to all Term Advances
comprising a single Term Borrowing upon written notice given by the
Account Party to the Agent not later than 11:00 A.M. (New York City
time) on the third Business Day prior to the date of the proposed
Conversion. The Agent shall notify each Participating Bank of the
contents of such notice promptly after receipt thereof. Each such
notice shall specify therein the following information: (A) the date
of such proposed Conversion (which in the case of CD Rate Advances or
Eurodollar Rate Advances shall be the last day of the Interest Period
then applicable to such Term Advances to be Converted), (B) Type of,
and Interest Period, if any, applicable to the Term Advances proposed
to be Converted, (C) the aggregate principal amount of Term Advances
proposed to be Converted, and (D) the Type of Term Advances to which
such Term Advances are proposed to be Converted and the Interest
Period, if any, to be applicable thereto.
(b) During the continuance of an Unmatured Default or an Event
of Default, the right of the Account Party to Convert Term Advances to
CD Rate Advances or to Eurodollar Rate Advances shall be suspended,
and all CD Rate Advances and Eurodollar Rate Advances then outstanding
shall be Converted to Base Rate Advances on the last day of the
Interest Period then in effect, if, on such day, an Unmatured Default
or an Event of Default shall be continuing.
(c) If no notice of Conversion is received by the Agent as
provided in subsection (a) above with respect to any outstanding CD
Rate Advances or Eurodollar Rate Advances, the Agent shall treat such
absence of notice as a deemed notice of Conversion providing for such
Advances to be Converted to Base Rate Advances on the last day of the
Interest Period then in effect for such CD Rate Advances or Eurodollar
Rate Advances.
SECTION 3.05. Other Terms Relating to the Making and Conversion of
Advances. (a) Notwithstanding anything in Section 3.02, 3.03 or 3.04,
above, to the contrary:
(i) at no time shall more than six different Term Borrowings be
outstanding hereunder; and
(ii) each Term Borrowing consisting of CD Rate Advances or
Eurodollar Rate Advances shall be in the aggregate principal amount of
$10,000,000 or an integral multiple of $1,000,000 in excess thereof.
(b) Each notice of borrowing pursuant to Section 3.02(b) hereof and
each notice of Conversion pursuant to Section 3.04 hereof shall be
irrevocable and binding on the Account Party.
SECTION 3.06. Prepayment of Advances. (a) The Account Party shall
have no right to prepay any principal amount of any Advances except in
accordance with subsections (b) and (c) below.
(b) The Account Party may, upon at least one Business Day's notice to
the Agent stating the proposed date and aggregate principal amount of the
prepayment (and if such notice is given the Account Party shall), prepay,
in whole or ratably in part, together with accrued interest to the date of
such prepayment on the principal amount prepaid, the outstanding principal
amount of (i) all Initial Advances made on the same date or (ii) all Term
Advances comprising the same Term Borrowing, in each case as the Account
Party shall designate in such notice; provided, however, that each partial
prepayment shall be in an aggregate principal amount not less than
$10,000,000, or, if less, the aggregate principal amount of all Advances
then outstanding.
(c) Prior to or simultaneously with the resale of all of the Bonds
purchased with the proceeds of a Tender Drawing, the Account Party shall
prepay, or cause to be prepaid, in full, the then outstanding principal
amount of all Initial Advances and of all Term Advances comprising the same
Term Borrowing(s) arising pursuant to such Tender Drawing, together with
all interest thereon to the date of such prepayment. If less than all of
such Bonds are resold, then prior to or simultaneously with such resale the
Account Party shall prepay or cause to be prepaid that portion of such
Advances, together with all interest thereon to the date of such
prepayment, equal to the then outstanding principal amount thereof
multiplied by a fraction, the numerator of which shall be the principal
amount of the Bonds resold and the denominator of which shall be the
principal amount of all of the Bonds purchased with the proceeds of the
relevant Tender Drawing.
SECTION 3.07. Participation; Reimbursement of Issuing Bank. (a) The
Issuing Bank hereby sells and transfers to each Participating Bank, and
each Participating Bank hereby acquires from the Issuing Bank, an undivided
interest and participation to the extent of such Participating Bank's
Participation Percentage in and to (i) the Letter of Credit, including the
obligations of the Issuing Bank under and in respect thereof and the
Account Party's reimbursement and other obligations in respect thereof and
(ii) each demand loan or deemed demand loan made by the Issuing Bank,
whether now existing or hereafter arising.
(b) If the Issuing Bank (i) shall not have been reimbursed in full
for any payment made by the Issuing Bank under the Letter of Credit on the
date of such payment or (ii) shall make any demand loan to the Account
Party, the Issuing Bank shall promptly notify the Agent and the Agent shall
promptly notify each Participating Bank of such non-reimbursement or demand
loan and the amount thereof. Upon receipt of such notice from the Agent,
each Participating Bank shall pay to the Issuing Bank, directly, an amount
equal to such Participating Bank's ratable portion (according to such
Participating Bank's Participation Percentage) of such unreimbursed amount
or demand loan paid or made by the Issuing Bank, plus interest on such
amount at a rate per annum equal to the Federal Funds Rate from the date of
such payment by the Issuing Bank to the date of payment to the Issuing Bank
by such Participating Bank. All such payments by each Participating Bank
shall be made in United States dollars and in same day funds:
(x) not later than 2:45 P.M. (New York City time) on the day
such notice is received by such Participating Bank if such notice is
received at or prior to 12:30 P.M. (New York City time) on a Business
Day; or
(y) not later than 12:00 Noon (New York City time) on the
Business Day next succeeding the day such notice is received by such
Participating Bank, if such notice is received after 12:30 P.M. (New
York City time) on a Business Day.
If a Participating Bank shall have paid to the Issuing Bank its ratable
portion of any unreimbursed amount or demand loan paid or made by the
Issuing Bank, together with all interest thereon required by the second
sentence of this subsection (b), such Participating Bank shall be entitled
to receive its ratable share of all interest paid by the Account Party in
respect of such unreimbursed amount or demand loan from the date paid or
made by the Issuing Bank. If such Participating Bank shall have made such
payment to the Issuing Bank, but without all such interest thereon required
by the second sentence of this subsection (b), such Participating Bank
shall be entitled to receive its ratable share of the interest paid by the
Account Party in respect of such unreimbursed amount or demand loan only
from the date it shall have paid all interest required by the second
sentence of this subsection (b).
(c) Each Participating Bank's obligation to make each payment to the
Issuing Bank, and the Issuing Bank's right to receive the same, shall be
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including, without limitation, the foregoing or Section 4.06
hereof, or the occurrence or continuance of an Event of Default, or the
non-satisfaction of any condition precedent set forth in Sections 5.03 or
5.04 hereof, or the failure of any other Participating Bank to make any
payment under this Section 3.07. Each Participating Bank further agrees
that each such payment shall be made without any offset, abatement,
withholding or reduction whatsoever.
(d) The failure of any Participating Bank to make any payment to the
Issuing Bank in accordance with subsection (b) above, shall not relieve any
other Participating Bank of its obligation to make payment, but neither the
Issuing Bank nor any Participating Bank shall be responsible for the
failure of any other Participating Bank to make such payment. If any
Participating Bank shall fail to make any payment to the Issuing Bank in
accordance with subsection (b) above, then such Participating Bank shall
pay to the Issuing Bank forthwith on demand such corresponding amount
together with interest thereon, for each day until the date such amount is
repaid to the Issuing Bank at the Federal Funds Rate. Nothing herein shall
in any way limit, waive or otherwise reduce any claims that any party
hereto may have against any non-performing Participating Bank.
(e) If any Participating Bank shall fail to make any payment to the
Issuing Bank in accordance with subsection (b) above, then, in addition to
other rights and remedies which the Issuing Bank may have, the Agent is
hereby authorized, at the request of the Issuing Bank, to withhold and to
apply the payment of such amounts owing to such Participating Bank to the
Issuing Bank and any related interest, that portion of any payment received
by the Agent that would otherwise be payable to such Participating Bank.
In furtherance of the foregoing, if any Participating Bank shall fail to
make any payment to the Issuing Bank in accordance with subsection (b),
above, and such failure shall continue for five Business Days following
written notice of such failure from the Issuing Bank to such Participating
Bank, the Issuing Bank may acquire, or transfer to a third party in
exchange for the sum or sums due from such Participating Bank, such
Participating Bank's interest in the related unreimbursed amounts and
demand loans and all other rights of such Participating Bank hereunder in
respect thereof, without, however, relieving such Participating Bank from
any liability for damages, costs and expenses suffered by the Issuing Bank
as a result of such failure. The purchaser of any such interest shall be
deemed to have acquired an interest senior to the interest of such
Participating Bank and shall be entitled to receive all subsequent payments
which the Issuing Bank or the Agent would otherwise have made hereunder to
such Participating Bank in respect of such interest.
ARTICLE IV
PAYMENTS
SECTION 4.01. Payments and Computations. (a) The Account Party
shall make each payment hereunder (i) in the case of reimbursement
obligations pursuant to Section 3.01 hereof (excluding any portion thereof
in respect of which an Initial Advance is to be made), not later than 2:30
P.M. (New York City time) on the day the related drawing under the Letter
of Credit is paid by the Issuing Bank, and (ii) in all other cases, not
later than 12:30 P.M. (New York City time) on the day when due, in each
case in lawful money of the United States of America to the Agent at its
address referred to in Section 10.02 hereof in same day funds. The Agent
will promptly thereafter cause to be distributed like funds relating to the
payment of reimbursements, principal, interest, fees or other amounts
payable to the Issuing Bank and the Participating Banks to whom the same
are payable, ratably, at its address set forth in Section 10.02 hereof (in
the case of the Issuing Bank) or for the account of their respective
Applicable Lending Offices (in the case of the Participating Banks), in
each case to be applied in accordance with the terms of this Agreement.
(b) The Account Party hereby authorizes the Issuing Bank, and each
Participating Bank, if and to the extent payment owed to the Issuing Bank,
or such Participating Bank, as the case may be, is not made when due
hereunder, to charge from time to time against any or all of the Account
Party's accounts with the Issuing Bank or such Participating Bank, as the
case may be, any amount so due.
(c) All computations of interest based on the Alternate Base Rate
when based on Barclays' prime rate referred to in the definition of
"Alternate Base Rate" and all computations of commissions and fees
hereunder shall be made by the Agent on the basis of a year of 365 or 366
days, as the case may be. All other computations of interest hereunder
(including computations of interest based on the CD Rate, the Eurodollar
Rate and the Federal Funds Rate (including the Alternate Base Rate if and
so long as such Rate is based on the Federal Funds Rate)), and of other
amounts pursuant to Section 4.03 hereof, shall be made by the Agent or the
party claiming such other amounts, as the case may be, on the basis of a
year of 360 days. In each such case, such computation shall be made for
the actual number of days (including the first day, but excluding the last
day) occurring in the period for which such interest, commissions or fees
are payable. Each such determination by the Agent or a Participating Bank,
as the case may be, shall be conclusive and binding for all purposes,
absent manifest error.
(d) Whenever any payment hereunder shall be stated to be due, or the
last day of an Interest Period hereunder shall be stated to occur, on a day
other than a Business Day, such payment shall be made and the last day of
such Interest Period shall occur on the next succeeding Business Day, and
such extension of time shall in such case be included in the computation of
payment of interest, commissions and fees hereunder; provided, however,
that if such extension would cause payment of interest on or principal of
Eurodollar Rate Advances to be made, or the last day of an Interest Period
for a Eurodollar Rate Advance to occur, in the next following calendar
month, such payment shall be made on the next preceding Business Day and
such reduction of time shall in such case be included in the computation of
payment of interest hereunder.
(e) Unless the Agent shall have received notice from the Account
Party prior to the date on which any payment is due to the Issuing Bank or
the Participating Banks hereunder that the Account Party will not make such
payment in full, the Agent may assume that the Account Party has made such
payment in full to the Agent on such date and the Agent may, in reliance
upon such assumption, cause to be distributed to the Issuing Bank and/or
each Participating Bank on such due date an amount equal to the amount then
due the Issuing Bank and/or such Participating Bank. If and to the extent
the Account Party shall not have so made such payment in full to the Agent,
the Issuing Bank and/or each such Participating Bank shall repay to the
Agent forthwith on demand such amount distributed to the Issuing Bank
and/or such Participating Bank, together with interest thereon, for each
day from the date such amount is distributed to the Issuing Bank and/or
such Participating Bank until the date the Issuing Bank and/or such
Participating Bank repays such amount to the Agent, at the Federal Funds
Rate.
(f) If, after the Agent has paid to the Issuing Bank or any
Participating Bank any amount pursuant to subsection (a) above, such
payment is rescinded or must otherwise be returned or must be paid over by
the Agent or the Issuing Bank to any Person, whether pursuant to any
bankruptcy or insolvency law, Section 4.04 hereof or otherwise, such
Participating Bank shall, at the request of the Agent or the Issuing Bank,
promptly repay to the Agent or the Issuing Bank, as the case may be, an
amount equal to its ratable share of such payment, together with any
interest required to be paid by the Agent or the Issuing Bank with respect
to such payment.
SECTION 4.02. Default Interest. Any amounts payable hereunder that
are not paid when due shall (to the fullest extent permitted by law) bear
interest, from the date when due until paid in full, at the Default Rate,
payable on demand.
SECTION 4.03. Yield Protection. (a) Change in Circumstances.
Notwithstanding any other provision herein, if after the date hereof, the
adoption of or any change in applicable law or regulation or in the
interpretation or administration thereof by any governmental authority
charged with the interpretation or administration thereof (whether or not
having the force of law) shall (i) change the basis of taxation of payments
to the Issuing Bank or any Participating Bank of the principal of or
interest on any Eurodollar Rate Advance or CD Rate Advance made by such
Participating Bank or any fees or other amounts payable hereunder (other
than changes in respect of taxes imposed on the overall net income of the
Issuing Bank or such Participating Bank, or its Applicable Lending Office,
by the jurisdiction in which the Issuing Bank or such Participating Bank
has its principal office or in which such Applicable Lending Office is
located or by any political subdivision or taxing authority therein), or
(ii) shall impose, modify or deem applicable any reserve, special deposit
or similar requirement against letters of credit (or participatory
interests therein) issued by, commitments or assets of, deposits with or
for the account of, or credit extended by, the Issuing Bank or such
Participating Bank (excluding, in the case of CD Rate Advances, any such
requirement included in the CD Rate), or (iii) shall impose on the Issuing
Bank or such Participating Bank any other condition affecting this
Agreement, the Letter of Credit or participatory interests therein or
Eurodollar Rate Advances or CD Rate Advances, and the result of any of the
foregoing shall be (A) to increase the cost to the Issuing Bank or such
Participating Bank of issuing, maintaining or participating in this
Agreement or the Letter of Credit or of agreeing to make, making or
maintaining any Advance or (B) to reduce the amount of any sum received or
receivable by the Issuing Bank or such Participating Bank hereunder
(whether of principal, interest or otherwise), then the Account Party will
pay to the Issuing Bank or such Participating Bank, upon demand, such
additional amount or amounts as will compensate the Issuing Bank or such
Participating Bank for such additional costs incurred or reduction
suffered.
(b) Capital. If the Issuing Bank or any Participating Bank shall
have determined that the applicability of any law, rule, regulation or
guideline adopted pursuant to or arising out of the July 1988 report of the
Basle Committee on Banking Regulations and Supervisory Practices entitled
"International Convergence of Capital Measurement and Capital Standards",
or the adoption after the date hereof of any law, rule, regulation or
guideline regarding capital adequacy, or any change in any of the foregoing
or in the interpretation or administration of any of the foregoing by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by the Issuing Bank
or any Participating Bank (or any Applicable Lending Office of the Issuing
Bank or such Participating Bank), or any holding company of any such
entity, with any request or directive regarding capital adequacy (whether
or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect (i) of reducing the rate of
return on such entity's capital or on the capital of such entity's holding
company, if any, as a consequence of this Agreement, the Letter of Credit
or such entity's participatory interest therein, any Commitment hereunder
or the portion of the Advances made by such entity pursuant hereto to a
level below that which such entity or such entity's holding company could
have achieved, but for such applicability, adoption, change or compliance
(taking into consideration such entity's policies and the policies of such
entity's holding company with respect to capital adequacy), or (ii) of
increasing or otherwise determining the amount of capital required or
expected to be maintained by such entity or such entity's holding company
based upon the existence of this Agreement, the Letter of Credit or such
entity's participatory interest therein, any Commitment hereunder, the
portion of the Advances made by such entity pursuant hereto and other
similar such credits, participations, commitments, agreements or assets,
then from time to time the Account Party shall pay to the Issuing Bank or
such Participating Bank, upon demand, such additional amount or amounts as
will compensate such entity or such entity's holding company for any such
reduction or allocable capital cost suffered.
(c) Eurodollar Reserves. The Account Party shall pay to each
Participating Bank upon demand, so long as such Participating Bank shall be
required under regulations of the Board of Governors of the Federal Reserve
System to maintain reserves with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities, additional interest on
the unpaid principal amount of such Participating Bank's portion of each
Eurodollar Rate Advance, from the date of such Advance until such principal
amount is paid in full, at an interest rate per annum equal at all times to
the remainder obtained by subtracting (i) the rate described in clause (i)
of the definition of "Eurodollar Rate" for the Interest Period for such
Advance from (ii) the rate obtained by dividing such rate by a percentage
equal to 100% minus the Eurodollar Reserve Percentage of such Participating
Bank for such Interest Period. Such additional interest shall be
determined by such Participating Bank and notified to the Account Party and
the Issuing Bank.
(d) Breakage Indemnity. The Account Party shall indemnify each
Participating Bank against any loss, cost or reasonable expense which such
Participating Bank may sustain or incur as a consequence of (i) any failure
by the Account Party to fulfill on the date of any Advance or Conversion
hereunder the applicable conditions set forth in Articles III and V,
(ii) any failure by the Account Party to Convert any Advance hereunder
after irrevocable notice of Conversion has been given pursuant to
Section 3.04 hereof, (iii) any payment, prepayment or Conversion of a
Eurodollar Rate Advance or CD Rate Advance required or permitted by any
other provision of this Agreement or otherwise made or deemed made on a
date other than the last day of the Interest Period applicable thereto,
(iv) any default in payment or prepayment of the principal amount of any
Advance or any part thereof or interest accrued thereon, as and when due
and payable (at the due date thereof, by irrevocable notice of prepayment
or otherwise) or (v) the occurrence of any Event of Default, including, in
each such case, any loss or reasonable expense sustained or incurred or to
be sustained or incurred in liquidating or employing deposits from third
parties acquired to effect or maintain such Advance or any part thereof as
a Eurodollar Rate Advance or CD Rate Advance. Such loss, cost or
reasonable expense shall include an amount equal to the excess, if any, as
reasonably determined by such Participating Bank, of (A) its cost of
obtaining the funds for the Advance being paid, prepaid, Converted or not
borrowed (based on the Eurodollar Rate or CD Rate) for the period from the
date of such payment, prepayment, Conversion or failure to borrow to the
last day of the Interest Period for such Advance (or, in the case of a
failure to borrow, the Interest Period for such Advance which would have
commenced on the date of such failure) over (B) the amount of interest (as
reasonably determined by such Participating Bank) that would be realized by
such Participating Bank in reemploying the funds so paid, prepaid,
Converted or not borrowed for such period or Interest Period, as the case
may be. For purposes of this subsection (d), it shall be presumed that
each Participating Bank shall have funded each such Advance with a
fixed-rate instrument bearing the rates and maturities designated in the
determination of the applicable interest rate for such Advance.
(e) Notices. A certificate of the Issuing Bank or any Participating
Bank setting forth such entity's claim for compensation hereunder and the
amount necessary to compensate such entity or its holding company pursuant
to subsections (a) through (d) of this Section 4.03 shall be submitted to
the Account Party and the Issuing Bank and shall be conclusive and binding
for all purposes, absent manifest error. The Account Party shall pay the
Issuing Bank or such Participating Bank directly the amount shown as due on
any such certificate within ten days after its receipt of the same. The
failure of any entity to provide such notice or to make demand for payment
under this Section 4.03 shall not constitute a waiver of such Participating
Bank's rights hereunder; provided, that such entity shall not be entitled
to demand payment pursuant to subsections (a) through (d) of this Section
4.03 in respect of any loss, cost, expense, reduction or reserve if such
demand is made more than one year following the later of such entity's
incurrence or sufferance thereof or such entity's actual knowledge of the
event giving rise to such entity's rights pursuant to such subsections.
The protection of this Section 4.03 shall be available to the Issuing Bank
and each Participating Bank regardless of any possible contention of the
invalidity or inapplicability of the law, rule, regulation, guideline or
other change or condition which shall have occurred or been imposed.
(f) Change in Legality. Notwithstanding any other provision herein,
if the adoption of or any change in any law or regulation or in the
interpretation or administration thereof by any governmental authority
charged with the administration or interpretation thereof shall make it
unlawful for any Participating Bank to make or maintain any Eurodollar Rate
Advance or to give effect to its obligations as contemplated hereby with
respect to any Eurodollar Rate Advance, then, by written notice to the
Account Party and the Issuing Bank, such Participating Bank may:
(i) declare that Eurodollar Rate Advances will not thereafter be
made by such Participating Bank hereunder, whereupon the right of the
Account Party to select Eurodollar Rate Advances for any Advance or
Conversion shall be forthwith suspended until such Participating Bank
shall withdraw such notice as provided hereinbelow or shall cease to
be a Participating Bank hereunder; and
(ii) require that all outstanding Eurodollar Rate Advances be
Converted to Base Rate Advances, in which event all Eurodollar Rate
Advances shall be automatically Converted to Base Rate Advances as of
the effective date of such notice as provided hereinbelow.
Upon receipt of any such notice, the Agent shall promptly notify the
Participating Banks thereof. Promptly upon becoming aware that the
circumstances that caused such Participating Bank to deliver such notice no
longer exist, such Participating Bank shall deliver notice thereof to the
Account Party and the Agent withdrawing such prior notice (but the failure
to do so shall impose no liability upon such Participating Bank). Promptly
upon receipt of such withdrawing notice from such Participating Bank, the
Agent shall deliver notice thereof to the Account Party and the
Participating Banks and such suspension shall terminate. Prior to any
Participating Bank giving notice to the Account Party under this subsection
(f), such Participating Bank shall use reasonable efforts to change the
jurisdiction of its Applicable Lending Office, if such change would avoid
such unlawfulness and would not, in the sole determination of such
Participating Bank, be otherwise disadvantageous to such Participating
Bank. Any notice to the Account Party by any Participating Bank shall be
effective as to each Eurodollar Rate Advance on the last day of the
Interest Period currently applicable to such Eurodollar Rate Advance;
provided that if such notice shall state that the maintenance of such
Advance until such last day would be unlawful, such notice shall be
effective on the date of receipt by the Account Party and the Agent.
(g) Market Rate Disruptions. If, (i) the Agent determines that an
adequate basis does not exist for the determination of the CD Rate for CD
Rate Advances, or the Eurodollar Rate for Eurodollar Rate Advances or
(ii) if the Majority Lenders shall notify the Agent that the Eurodollar
Rate or CD Rate, as the case may be, will not adequately reflect the cost
to such Majority Lenders of making, funding or maintaining their respective
Eurodollar Rate Advances or CD Rate Advances, the right of the Account
Party to select or receive or Convert into such Type of Advances shall be
forthwith suspended until the Agent shall notify the Account Party and the
Participating Banks that the circumstances causing such suspension no
longer exist, and until such notification from the Agent, each request for
or Conversion into such Type of Advance hereunder shall be deemed to be a
request for or Conversion into Base Rate Advances.
SECTION 4.04. Sharing of Payments, Etc. If any Participating Bank
shall obtain any payment (whether voluntary, involuntary, through the
exercise of any right of set-off, or otherwise, but excluding any proceeds
received by assignments or sales of participations in accordance with
Section 10.06 hereof to a Person that is not an Affiliate of the Account
Party) on account of the Advances owing to it (other than pursuant to
Section 4.03 hereof) in excess of its ratable share of payments on account
of the Advances obtained by all the Participating Banks, such Participating
Bank shall forthwith purchase from the other Participating Banks such
participation in the portions of the Advances owing to them as shall be
necessary to cause such purchasing Participating Bank to share the excess
payment ratably with each of them; provided, however, that if all or any
portion of such excess payment is thereafter recovered from such purchasing
Participating Bank, such purchase from each Participating Bank shall be
rescinded and such Participating Bank shall repay to the purchasing
Participating Bank the purchase price to the extent of such recovery
together with an amount equal to such Participating Bank's ratable share
(according to the proportion of (i) the amount of such Participating Bank's
required repayment to (ii) the total amount so recovered from the
purchasing Participating Bank) of any interest or other amount paid or
payable by the purchasing Participating Bank in respect of the total amount
so recovered. The Account Party agrees that any Participating Bank so
purchasing a participation from another Participating Bank pursuant to this
Section 4.04 may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of set-off) with respect to such
participation as fully as if such Participating Bank were the direct
creditor of the Account Party in the amount of such participation.
Notwithstanding the foregoing, if any Participating Bank shall obtain any
such excess payment involuntarily, such Participating Bank may, in lieu of
purchasing participation from the other Participating Banks in accordance
with this Section 4.04, on the date of receipt of such excess payment,
return such excess payment to the Agent for distribution in accordance with
Section 4.01(a) hereof.
SECTION 4.05. Taxes. (a) All payments by the Account Party
hereunder shall be made in accordance with Section 4.01, free and clear of
and without deduction for all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Participating Bank and the Issuing
Bank, taxes imposed on its overall net income, and franchise taxes imposed
on it, by the jurisdiction under the laws of which such Participating Bank
or the Issuing Bank (as the case may be) is organized or any political
subdivision thereof and, in the case of each Participating Bank, taxes
imposed on its overall net income, and franchise taxes imposed on it, by
the jurisdiction of such Participating Bank's Applicable Lending Office or
any political subdivision thereof (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If the Account Party shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder to any Participating Bank or the Issuing Bank, (i) the sum
payable shall be increased as may be necessary so that after making all
required deductions (including deductions applicable to additional sums
payable under this Section 4.05) such Participating Bank or the Issuing
Bank (as the case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Account Party shall
make such deductions and (iii) the Account Party shall pay the full amount
deducted to the relevant taxation authority or other authority in
accordance with applicable law.
(b) In addition, the Account Party agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies that arise from any payment made hereunder or
from the execution, delivery or registration of, or otherwise with respect
to, this Agreement (hereinafter referred to as "Other Taxes").
(c) The Account Party will indemnify each Participating Bank and the
Issuing Bank for the full amount of Taxes and Other Taxes (including,
without limitation, any Taxes and any Other Taxes imposed by any
jurisdiction on amounts payable under this Section 4.05) paid by such
Participating Bank or the Issuing Bank (as the case may be) and any
liability (including penalties, interest and expenses) arising therefrom or
with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted. This indemnification shall be made within
30 days from the date such Participating Bank or the Issuing Bank (as the
case may be) makes written demand therefor. If any Taxes or Other Taxes
for which a Participating Bank or the Issuing Bank has received payments
from the Account Party hereunder shall be finally determined to have been
incorrectly or illegally asserted and are refunded to such Participating
Bank, such Participating Bank shall promptly forward to the Account Party
any such refunded amount. The Account Party's, the Issuing Bank's and each
Participating Bank's obligations under this Section 4.05 shall survive the
payment in full of the Advances.
(d) Within 30 days after the date of any payment of Taxes, the
Account Party will furnish to the Issuing Bank, at its address referred to
in Section 10.02 hereof, the original or a certified copy of a receipt
evidencing payment thereof.
(e) Each Participating Bank not incorporated in the United States or
a jurisdiction within the United States shall, on or prior to the date it
becomes a Participating Bank hereunder, deliver to the Account Party and
the Issuing Bank such certificates, documents or other evidence, as
required by the Internal Revenue Code of 1986, as amended from time to time
(the "Code"), or treasury regulations issued pursuant thereto, including
Internal Revenue Service Form 4224 and any other certificate or statement
of exemption required by Treasury Regulation Section 1.1441-1(a) or
Section 1.1441-6(c) or any subsequent version thereof, properly completed
and duly executed by such Participating Bank establishing that it is
(i) not subject to withholding under the Code or (ii) totally exempt from
United States of America tax under a provision of an applicable tax treaty.
Each Participating Bank shall promptly notify the Account Party and the
Issuing Bank of any change in its Applicable Lending Office and shall
deliver to the Account Party and the Issuing Bank together with such notice
such certificates, documents or other evidence referred to in the
immediately preceding sentence. Unless the Account Party and the Issuing
Bank have received forms or other documents satisfactory to them indicating
that payments hereunder are not subject to United States of America
withholding tax or are subject to such tax at a rate reduced by an
applicable tax treaty, the Account Party or the Issuing Bank shall withhold
taxes from such payments at the applicable statutory rate in the case of
payments to or for any Participating Bank organized under the laws of a
jurisdiction outside the United States of America. Each Participating Bank
represents and warrants that each such form supplied by it to the Issuing
Bank and the Account Party pursuant to this Section 4.05, and not
superseded by another form supplied by it, is or will be, as the case may
be, complete and accurate.
(f) Any Participating Bank claiming any additional amounts payable
pursuant to this Section 4.05 shall use reasonable efforts (consistent with
legal and regulatory restrictions) to file any certificate or document
requested by the Account Party or to change the jurisdiction of its
Applicable Lending Office if the making of such a filing or change would
avoid the need for or reduce the amount of any such additional amounts
which may thereafter accrue and would not, in the sole determination of
such Participating Bank, be otherwise disadvantageous to such Participating
Bank.
SECTION 4.06. Obligations Absolute. The obligations of the Account
Party under this Agreement shall be unconditional and irrevocable, and
shall be paid strictly in accordance with the terms of this Agreement (as
the same may be amended from time to time) under all circumstances,
including, without limitation, the following circumstances:
(i) any lack of validity or enforceability of this
Agreement or any of the Security Documents or Related Documents or any
document or agreement delivered in connection therewith;
(ii) any change in the time, manner or place of payment of,
or in any other term of, all or any of the obligations of the Account
Party in respect of the Letter of Credit or any other amendment or
waiver of or any consent to departure from all or any of the Loan
Documents or the Related Documents or any document or agreement
delivered in connection therewith;
(iii) the existence of any claim, set-off, defense or other
right which the Account Party may have at any time against the Paying
Agent, the Trustee or any other beneficiary, or any transferee, of the
Letter of Credit (or any persons or entities for whom the Paying
Agent, the Trustee, any such beneficiary or any such transferee may be
acting), the Agent, the Issuing Bank, or any other person or entity,
whether in connection with this Agreement, the transactions
contemplated in any of the Loan Documents or the Related Documents, or
any unrelated transaction;
(iv) any statement or any other document presented under the
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect, except to the extent that a court of
competent jurisdiction shall determine that the Issuing Bank shall
have engaged in gross negligence or willful misconduct with respect
thereto;
(v) payment by the Issuing Bank under the Letter of Credit
against presentation of a draft or certificate which does not comply
with the terms of the Letter of Credit, except to the extent that a
court of competent jurisdiction shall determine that the Issuing Bank
shall have engaged in gross negligence or willful misconduct with
respect thereto;
(vi) any exchange of, release of or non-perfection of any
interest in any collateral, or any release or amendment or waiver of
or consent to departure from any guarantee, for all or any of the
obligations of the Account Party in respect of the Letter of Credit;
or
(vii) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing.
SECTION 4.07. Evidence of Indebtedness. The Issuing Bank and each
Participating Bank shall maintain, in accordance with their usual practice,
an account or accounts evidencing the indebtedness of the Account Party
resulting from each drawing under the Letter of Credit (in the case of the
Issuing Bank) and from each Advance (in the case of each Participating
Bank) made from time to time hereunder and the amounts of principal and
interest payable and paid from time to time hereunder. In any legal action
or proceeding in respect of this Agreement, the entries made in such
account or accounts shall, in the absence of manifest error, be conclusive
evidence of the existence and amounts of the obligations of the Account
Party therein recorded.
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.01. Conditions Precedent to the Issuance of the Letter of
Credit. The obligation of the Issuing Bank to issue the Letter of Credit
and of each Participating Bank to make the Advances to be made by it is
subject to the fulfillment of the conditions precedent that the Agent shall
have received on or before the day of such issuance the following, each
dated such day (except where specified otherwise below), in form and
substance satisfactory to each Participating Bank (except where specified
otherwise below) and in sufficient copies for each Participating Bank:
(a) Agreements:
(i) Counterparts of this Agreement, duly executed and delivered
by the Account Party, the Agent, the Issuing Bank and each
Participating Bank listed on the signature pages hereto.
(ii) Counterparts of the Pledge Amendment, duly executed by the
Account Party, Citibank, the Agent and the Issuing Bank, and copies of
the Pledge Agreement.
(iii) Executed copies (or duplicate copies thereof certified
as of the Closing Date by the Account Party in a manner satisfactory
to the Agent to be a true copy) of each other Security Document, duly
executed by the parties thereto.
(iv) For each Participating Bank who shall so request, executed
copies (or duplicate copies thereof certified as of the Closing Date
by the Account Party in a manner satisfactory to the Agent to be a
true copy) of each of the Financing Agreements, together with all
amendments, modifications and supplements thereto, in each such case
duly executed by the respective parties thereto.
(v) For each Participating Bank who shall so request, executed
copies (or duplicate copies thereof certified as of the Closing Date
by the Account Party in a manner satisfactory to the Agent to be a
true copy) of the Rate Agreement and each Significant Contract and all
amendments, modifications and supplements thereto, in each such case
duly executed by the respective parties thereto.
(b) Corporate Matters:
(i) A certificate of the Secretary of the Account Party
certifying (as to the Account Party) and of the Secretary of NUSCO
certifying (as to NUSCO) that attached thereto are (A) true and
correct copies of the Articles of Incorporation of the Account Party
and the By-laws of the Account Party, in each case as in effect on the
Closing Date and (B) true and correct copies of the resolutions of the
Boards of Directors of the Account Party and of NUSCO approving, if
and to the extent necessary, this Agreement, the other Loan Documents,
the Related Documents to which it is a party and the other documents
to be delivered by or on behalf of the Account Party hereunder and
thereunder, and of all documents evidencing other necessary corporate
action, if any, with respect to the execution, delivery and
performance by or on behalf of the Account Party of this Agreement,
the other Loan Documents and such Related Documents and certifying
that such resolutions and other corporate actions, if any, are in full
force and effect and have not been revoked, rescinded or modified.
(ii) A certificate of the Secretary of the Account Party
certifying (as to the Account Party) and of the Secretary of NUSCO
certifying (as to NUSCO) the names and true signatures of the officers
of the Account Party and/or NUSCO authorized to sign this Agreement,
the other Loan Documents, the Related Documents to which it is a party
and the other documents to be delivered hereunder and thereunder.
(c) Governmental Approvals, Litigation and the Merger:
(i) A certificate of a duly authorized officer of the Account
Party certifying that Schedule IV hereto includes a description of all
pending or known threatened actions or proceedings affecting the
Account Party or its properties before any court, governmental agency
or arbitrator, which may, if adversely determined (i) purport to
affect the legality, validity or enforceability of the Plan, the Rate
Agreement, any Loan Document, any Related Document or any Significant
Contract or (ii) materially adversely affect the financial condition,
properties, prospects or operations of the Account Party.
(ii) A certificate signed by the Assistant General Counsel of
the Account Party certifying that no court shall have granted a motion
for stay or any request for similar relief in connection with the
Plan, the Merger, the Loan Documents, the Related Documents, the
Initial First Mortgage Bonds, the Preferred Stock or the transactions
contemplated thereunder.
(iii) Certificates signed by duly authorized officers of the
Account Party and NU to the effect that all conditions to the
occurrence of the Merger were satisfied or waived and the Merger was
consummated on June 5, 1992.
(iv) For each Participating Bank who shall so request, true and
complete photocopies of all documents delivered by the Account Party
pursuant to the Financing Agreements in connection with the
consummation of the Merger.
(d) Financial, Accounting and Compliance Matters:
(i) An audited balance sheet of the Account Party as at
December 31, 1991 and the related statements of the Account Party's
results of operations, retained earnings and cash flows for and as of
the year then ended, and an unaudited balance sheet of the Account
Party as at June 30, 1992 and the related unaudited statements of the
Account Party's results of operations, retained earnings and cash
flows for and as of the quarter then ended.
(ii) A certificate signed by the Treasurer or Assistant
Treasurer of the Account Party, certifying as to the absence of any
material adverse change in the financial condition, operations,
properties or prospects of the Account Party since December 31, 1991.
(iii) Financial projections, on assumptions acceptable to the
Participating Banks, demonstrating projected compliance with
Section 7.01(j) hereof and the terms of this Agreement and the
Financing Agreements.
(iv) A certificate signed by the Chief Financial Officer,
Treasurer or Assistant Treasurer of NU, certifying as to the absence
of any material adverse change in the financial condition, operations,
properties or prospects of NU since December 31, 1991.
(v) A certificate of a duly authorized officer of the Account
Party describing in reasonable detail all insurance policies and self-
insurance programs maintained by the Account Party relating to
property insurance and liability insurance, which shall comply with
the requirements of Section 7.01(c) hereof, and certifying that all
such policies are fully paid and in full force and effect.
(vi) A certificate of a duly authorized officer of the Account
Party to the effect that:
(A) the representations and warranties contained in Section
6.01 are correct in all material respects on and as of the
Closing Date before and after giving effect to the issuance of
the Letter of Credit;
(B) no event has occurred and is continuing which
constitutes an Event of Default or Unmatured Default, or would
result from the issuance of the Letter of Credit;
(C) The Financing Agreements are in full force and effect
and no "Event of Default" or "Unmatured Default" (as defined
therein) has occurred and is continuing;
(D) The Initial First Mortgage Bonds have been issued and
are outstanding, and no "Event of Default" (as defined in the
First Mortgage Indenture) has occurred and is continuing; and
(E) The Series F First Mortgage Bonds have been duly issued
to the Trustee in accordance with the Indenture, are presently
outstanding, and no "Event of Default" (as defined in the First
Mortgage Indenture) has occurred and is continuing.
(e) Relating to the Issuance of the Bonds and the Substitution of the
Letter of Credit:
(i) An executed copy (or a duplicate copy thereof certified by
the Account Party in a manner satisfactory to the Agent to be a true
copy) of the Remarketing Agreement, duly executed by the Remarketing
Agent and the Account Party.
(ii) An executed copy (or a duplicate copy thereof certified by
the Account Party in a manner satisfactory to the Agent to be a true
copy) of the Purchase Contract, duly executed by Goldman, Sachs & Co.,
Morgan Stanley & Co. Incorporated, the Issuer and the Account Party.
(iii) An executed copy (or a duplicate copy thereof certified by
the Account Party in a manner satisfactory to the Agent to be a true
copy) of the certificate from the Issuer delivered pursuant to Section
7(a)(iii) of the Purchase Contract, together with a certified copy of
the Issuer Resolution and copies of all other proceedings of the
Issuer relative to the issuance of the Bonds.
(iv) An executed copy (or a duplicate copy thereof certified by
the Account Party in a manner satisfactory to the Agent to be a true
copy) of the certificate from the Account Party delivered pursuant to
Section 7(c)(iv) of the Purchase Contract.
(v) An executed copy (or a duplicate copy thereof certified by
the Account Party in a manner satisfactory to the Agent to be a true
copy) of the certificates from each of NU and NUSCO delivered pursuant
to Section 7(d)(ii)(A) and Section 7(d)(ii)(B), respectively, of the
Purchase Contract.
(vi) A letter from Palmer & Dodge, Bond Counsel, addressed to
the Agent, the Issuing Bank and the Participating Banks and stating
therein that the Agent, the Issuing Bank and the Participating Banks
may rely on the opinion of such firm in the form of Exhibit A-1 to the
Purchase Contract and delivered pursuant to Section 7(k)(i) of the
Purchase Contract, together with a copy of such opinion.
(vii) A letter from Palmer & Dodge, counsel to the Issuer,
addressed to the Agent, the Issuing Bank and the Participating Banks
and stating therein that the Agent, the Issuing Bank and the
Participating Banks may rely on the opinions of such firm in the form
of Exhibits B-1 and B-2 to the Purchase Contract and delivered
pursuant to Section 7(k)(ii) of the Purchase Contract, together with
copies of such opinions.
(viii) A letter from Sulloway & Hollis, New Hampshire counsel to
the Account Party, addressed to the Agent, the Issuing Bank and the
Participating Banks and stating therein that the Agent, the Issuing
Bank and the Participating Banks may rely on the opinion of such firm
in the form of Exhibit C-1 to the Purchase Contract and delivered
pursuant to Section 7(k)(iii) of the Purchase Contract, and the
opinion of such firm in the form of Exhibit 5.02B of the Original
Reimbursement Agreement and delivered pursuant to Section
5.02(a)(xxxii)(B) of the Original Reimbursement Agreement, together
with copies of such opinions.
(ix) A letter from Day, Berry & Howard, counsel to NU and NUSCO,
addressed to the Agent, the Issuing Bank and the Participating Banks
and stating therein that the Agent, the Issuing Bank and the
Participating Banks may rely on the opinion of such firm in the form
of Exhibit C-2 to the Purchase Contract and delivered pursuant to
Section 7(k)(iii) of the Purchase Contract, and the opinion of such
firm in the form of Exhibit 5.02A of the Original Reimbursement
Agreement and delivered pursuant to Section 5.02(a)(xxxii)(A) of the
Original Reimbursement Agreement, together with copies of such
opinions.
(x) A letter from Pierre O. Caron, Assistant General Counsel of
the Account Party, addressed to the Agent, the Issuing Bank and the
Participating Banks and stating therein that the Agent, the Issuing
Bank and the Participating Banks may rely on the opinion of such
individual in the form of Exhibit C-3 to the Purchase Contract and
delivered pursuant to Section 7(k)(iii) of the Purchase Contract, and
the opinion of such firm in the form of Exhibit 5.02C of the Original
Reimbursement Agreement and delivered pursuant to Section
5.02(a)(xxxii)(C) of the Original Reimbursement Agreement, together
with copies of such opinion.
(xi) A letter from Drummond Woodsum Plimpton & MacMahon, special
Maine counsel to the Account Party, addressed to the Agent, the
Issuing Bank and the Participating Banks and stating therein that the
Agent, the Issuing Bank and the Participating Banks may rely on the
opinion of such firm in the form of Exhibit 5.02D of the Original
Reimbursement Agreement and delivered pursuant to Section
5.02(a)(xxxii)(D) of the Original Reimbursement Agreement, together
with a copy of such opinion.
(xii) A letter from Zuccaro, Willis & Bent, special Vermont
counsel to the Account Party, addressed to the Agent, the Issuing Bank
and the Participating Banks and stating therein that the Agent, the
Issuing Bank and the Participating Banks may rely on the opinion of
such firm in the form of Exhibit 5.02E of the Original Reimbursement
Agreement and delivered pursuant to Section 5.02(a)(xxxii)(E) of the
Original Reimbursement Agreement, together with a copy of such
opinion.
(xiii) A letter from Palmer & Dodge, addressed to the Agent, the
Issuing Bank and the Participating Banks and stating therein that the
Agent, the Issuing Bank and the Participating Banks may rely on any
opinion delivered by such firm pursuant to Section 7(k)(vi) of the
Purchase Contract, together with a copy of such opinion.
(xiv) Copies of the Official Statement used, and of any
amendment, supplement or "sticker" to the Official Statement to be
used, in connection with the offering and remarketing of the Bonds.
(xv) Copies of all such documents and materials (including
opinions of counsel or reliance letters in respect thereof) as the
Agent, the Issuing Bank or any Participating Bank may reasonably
request relating to the issuance, offering and sale of the Series F
First Mortgage Bonds.
(f) Opinions of Counsel:
Favorable opinions of:
(i) Day, Berry & Howard, counsel to the Account Party, in
substantially the form of Exhibit 5.01A and as to such other
matters as the Majority Lenders, through the Agent, may
reasonably request;
(ii) Rath, Young, Pignatelli and Oyer, P.A., special
New Hampshire counsel to the Account Party, in substantially the
form of Exhibit 5.01B and as to such other matters as the
Majority Lenders, through the Agent, may reasonably request;
(iii) Pierre O. Caron, Assistant General Counsel of the
Account Party, in substantially the form of Exhibit 5.01C and as
to such other matters as the Majority Lenders, through the Agent,
may reasonably request;
(iv) Drummond Woodsum Plimpton & MacMahon, special
Maine counsel to the Account Party, in substantially the form of
Exhibit 5.01D and as to such other matters as the Majority
Lenders, through the Agent, may reasonably request;
(v) Zuccaro Willis & Bent, special Vermont counsel to the
Account Party, in substantially the form of Exhibit 5.02E and as
to such other matters as the Majority Lenders, through the Agent,
may reasonably request; and
(vi) Porter & Travers, special New York counsel to the
Agent and the Issuing Bank, in substantially the form of Exhibit
5.01F.
(g) Miscellaneous:
(i) A certificate of Citibank to the effect that (A) all amounts
payable to it in connection with the Original Reimbursement Agreement
and the letter of credit issued thereunder have been paid to it and
(B) it thereby surrenders any and all rights it may have under the
Related Documents arising in connection with the Original
Reimbursement Agreement and the letter of credit issued thereunder,
except for any such rights it may have as an indemnified party
thereunder.
(ii) Letters from S&P and Moody's to the effect that the Bonds
have been rated A-1+ and P-1, respectively, such letters to be in form
and substance satisfactory to the Issuing Bank.
(iii) Such other approvals, opinions and documents as the
Majority Lenders, through the Issuing Bank, may reasonably request as
to the legality, validity, binding effect or enforceability of the
Loan Documents or the financial condition, properties, operations or
prospects of the Account Party.
SECTION 5.02. Additional Conditions Precedent to the Issuance of the
Letter of Credit. The obligation of the Issuing Bank to issue the Letter
of Credit and of each Participating Bank to make the Advances to be made by
it shall be subject to the further conditions precedent that, on the date
of the issuance of the Letter of Credit:
(a) the representations and warranties contained in Section
6.01 shall be correct in all material respects on and as of the
Closing Date before and after giving effect to the issuance of the
Letter of Credit;
(b) no event shall have occurred and be continuing which
constitutes an Event of Default or Unmatured Default, or would result
from the issuance of the Letter of Credit;
(c) The Financing Agreements shall be in full force and effect
and no "Event of Default" or "Unmatured Default" (as defined therein)
shall have occurred and be continuing;
(d) The Initial First Mortgage Bonds shall have been issued and
be outstanding, and no "Event of Default" (as defined in the First
Mortgage Indenture) shall have occurred and be continuing;
(e) The Series F First Mortgage Bonds shall have been duly
issued to the Trustee in accordance with the Indenture, and be
outstanding, and no "Event of Default" (as defined in the First
Mortgage Indenture) shall have occurred and be continuing; and
(f) The Account Party shall have paid all fees under or
referenced in Section 2.03 hereof, to the extent then due and payable.
SECTION 5.03. Conditions Precedent to Initial Advances and Conversions
of Advances. The obligation of each Participating Bank to make any Initial
Advance or to Convert any Term Advance shall be subject to the conditions
precedent that, on the date of such Initial Advance or Conversion, the
following statements shall be true:
(a) the representations and warranties contained in
Section 6.01 of this Agreement (other than the last sentence of
subsection (e) and clause (ii) of subsection (f) thereof) are true and
correct on and as of the date of such Initial Advance or Conversion,
before and after giving effect to such Initial Advance or Conversion
and to the application of the proceeds (if any) therefrom, as though
made on and as of such date; and
(b) no event has occurred and is continuing which constitutes
an Event of Default.
Unless the Account Party shall have previously advised the Agent in
writing that one or more of the statements contained in subsections (a) and
(b) of this Section 5.03 is no longer true, the Account Party shall be
deemed to have represented and warranted, on and as of the date of any
Initial Advance or Conversion, that the above statements are true.
SECTION 5.04. Conditions Precedent to Term Advances. The obligation
of each Participating Bank to make any Term Advance shall be subject to the
conditions precedent that, on the date of such Term Advance the following
statements shall be true:
(a) the representations and warranties contained in Section
6.01 of this Agreement (including the last sentence of subsection (e)
and clause (ii) of subsection (f) thereof) are true and correct on and
as of the date of such Term Advance, before and after giving effect to
such Term Advance and to the application of the proceeds therefrom,
as though made on and as of such date; and
(b) no event has occurred and is continuing which constitutes
an Event of Default or an Unmatured Default.
Unless the Account Party shall have previously advised the Agent in writing
that one or more of the statements contained in subsections (a) and (b) of
this Section 5.04 is no longer true, the Account Party shall be deemed to
have represented and warranted, on and as of the date of any Term Advance,
that the above statements are true.
SECTION 5.05. Reliance on Certificates. The Agent, the Issuing Bank
and the Participating Banks shall be entitled to rely conclusively upon the
certificates delivered from time to time by officers of the Account Party,
NU, NUSCO and the other parties to the Loan Documents, Related Documents
and the Significant Contracts as to the names, incumbency, authority and
signatures of the respective persons named therein until such time as the
Agent may receive a replacement certificate, in form acceptable to the
Agent, from an officer of such Person identified to the Agent as having
authority to deliver such certificate, setting forth the names and true
signatures of the officers and other representatives of such Person
thereafter authorized to act on behalf of such Person.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01. Representations and Warranties of the Account Party.
The Account Party represents and warrants as follows:
(a) The Account Party is a corporation duly organized and validly
existing under the laws of the State of New Hampshire. The Account Party is
duly qualified to do business in, and is in good standing in, all other
jurisdictions where the nature of its business or the nature of property
owned or used by it makes such qualifications necessary.
(b) The execution, delivery and performance by the Account Party of
the Rate Agreement and of each Loan Document, Related Document and
Significant Contract to which it is a party, are within the Account Party's
corporate powers, have been duly authorized by all necessary corporate
action, and do not and will not contravene (i) the Account Party's charter
or by-laws or (ii) any law or legal or contractual restriction binding on
or affecting the Account Party; and such execution, delivery and
performance do not or will not result in or require the creation of any
Lien (other than pursuant to the Security Documents) upon or with respect
to any of its properties.
(c) No Governmental Approval referred to in clauses (i) and (ii) in
the definition of "Governmental Approvals" is required, or if required, has
been duly obtained or made, and is in full force and effect; and except as
set forth in Schedule IV hereto, all applicable periods of time for review,
rehearing or appeal with respect thereto have expired; and the Account
Party has obtained all Governmental Approvals referred to in clause (iii)
in the definition of "Governmental Approvals", except those not yet
required but which are obtainable in the ordinary course of business as and
when required and those the absence of which would not materially adversely
affect the financial condition, properties, prospects or operations of the
Account Party as a whole.
(d) This Agreement, the Rate Agreement, each other Loan Document,
Related Document and each Significant Contract to which the Account Party
is a party have been duly executed and delivered by or on behalf of the
Account Party and are legal, valid and binding obligations of the Account
Party enforceable against the Account Party in accordance with their
respective terms; subject to the qualifications, however, that the
enforcement of the rights and remedies herein and therein is subject to
bankruptcy and other similar laws of general application affecting rights
and remedies of creditors, that the remedy of specific performance or of
injunctive relief is subject to the discretion of the court before which
any proceedings therefor may be brought, and that indemnification against
violations of securities and similar laws may be subject to matters of
public policy.
(e) The audited balance sheet of the Account Party as at December 31,
1991, the unaudited balance sheet of the Account Party as at June 30, 1992
and the related statements of the Account Party setting forth the results
of operations, retained earnings and cash flows of the Account Party for
the fiscal year and fiscal quarter, respectively, then ended, copies of
which have been furnished to each Participating Bank, fairly present in all
material respects the financial condition, results of operations, retained
earnings and cash flows of the Account Party at and for the year and fiscal
quarter, respectively, ended on such dates, and have been prepared in
accordance with generally accepted accounting principles consistently
applied (subject, in the case of such unaudited statements, to normal year-
end audit adjustments). Except as reflected in such financial statements,
the Account Party has no material non-contingent liabilities, and all
contingent liabilities have been appropriately reserved. The financial
projections referred to in Section 5.01(d)(iii) hereof, have been prepared
in good faith and on reasonable assumptions. Since December 31, 1991,
there has been no material adverse change in the Account Party's financial
condition, operations, properties or prospects.
(f) Except as set forth in Schedule IV hereto or in the certificate
referred to in Section 5.01(c)(i) hereof, there is no pending or known
threatened action or proceeding (including, without limitation, any action
or proceeding relating to any environmental protection laws or regulations)
affecting the Account Party or its properties before any court,
governmental agency or arbitrator, which may, if adversely determined,
(i) purport to affect the legality, validity or enforceability of the Rate
Agreement, any Loan Document or Related Document or any Significant
Contract or (ii) materially adversely affect the financial condition,
properties, prospects or operations of the Account Party as a whole.
(g) All insurance required by Section 7.01(c) hereof is in full force
and effect.
(h) No ERISA Plan Termination Event has occurred nor is reasonably
expected to occur with respect to any ERISA Plan which would materially
adversely affect the financial condition, properties, prospects or
operations of the Account Party, except as disclosed to and consented by
the Majority Lenders in writing. Since the date of the most recent Schedule
B (Actuarial Information) to the annual report of the Account Party (Form
5500 Series), if any, there has been no material adverse change in the
funding status of the ERISA Plans referred to therein and no "prohibited
transaction" has occurred with respect thereto, except as described in the
Account Party's Annual Report on Form 10-K for the year ended December 31,
1991. Neither the Account Party nor any of its ERISA Affiliates has
incurred nor reasonably expects to incur any material withdrawal liability
under ERISA to any ERISA Multiemployer Plan, except as disclosed to and
consented by the Majority Lenders in writing.
(i) The Major Electric Generating Plants are on land in which the
Account Party owns a full or an undivided fee interest subject only to
Liens permitted by Section 7.02(a) hereof, which do not materially impair
the usefulness to the Account Party of such properties; the electric
transmission and distribution lines of the Account Party in the main are
located in New Hampshire and on land owned in fee by the Account Party or
over which the Account Party has easements, or are in or over public
highways or public waters pursuant to adequate statutory or regulatory
authority, and any defects in the title to such transmission and
distribution lands or easements are in the main curable by the exercise of
the Account Party's right of eminent domain upon a finding that such
eminent domain proceedings are necessary to meet the reasonable
requirements of service to the public; the Account Party enjoys peaceful
and undisturbed possession under all of the leases under which it is
operating, none of which contains any unusual or burdensome provision which
will materially affect or impair the operation of the Account Party; and
the Security Documents will create valid Liens in the Collateral, subject
only to Liens permitted by Section 7.02(a) hereof, and all filings and
other actions necessary to perfect and protect such security interests (to
the extent such security interests may be perfected or protected by filing)
have been taken; provided, however, that no representation is made as to
any Lien purported to be created in favor of the Trustee with respect to
any interest of the Issuer in the Indenture.
(j) No material part of the properties, business or operations of the
Account Party are materially adversely affected by any fire, explosion,
accident, strike, lockout or other labor disputes, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy or other casualty
(except for any such circumstance, if any, which is covered by insurance
which coverage has been confirmed and not disputed by the relevant insurer
or by fully-funded self-insurance programs).
(k) The Account Party has filed all tax returns (Federal, state and
local) required to be filed and paid taxes shown thereon to be due,
including interest and penalties, or, to the extent the Account Party is
contesting in good faith an assertion of liability based on such returns,
has provided adequate reserves in accordance with generally accepted
accounting principles for payment thereof.
(l) No exhibit, schedule, report or other written information
provided by the Account Party or its agents to the Agent, the Issuing Bank
or the Participating Banks in connection with the negotiation, execution
and closing of this Agreement (including, without limitation, the
Information Memorandum and the Official Statement) knowingly contained when
made any material misstatement of fact or knowingly omitted to state any
material fact necessary to make the statements contained therein not
misleading in light of the circumstances under which they were made.
(m) No event has occurred and is continuing which constitutes a
material default under the Rate Agreement or any Significant Contract.
(n) No proceeds of any Advance will be used (i) to acquire any equity
security of a class which is registered pursuant to Section 12 of the
Securities Exchange Act of 1934 or (ii) to buy or carry any margin stock
(within the meaning of Regulation U issued by the Board of Governors of the
Federal Reserve System) or to extend credit to others for such purpose.
The Account Party (X) is not an "investment company" within the meaning
ascribed to that term in the Investment Company Act of 1940 or (Y) is not
engaged in the business of extending credit for the purpose of buying or
carrying margin stock.
ARTICLE VII
COVENANTS OF THE ACCOUNT PARTY
SECTION 7.01. Affirmative Covenants. So long as any amounts shall
remain available to be drawn under the Letter of Credit or any Advance or
other amounts shall remain unpaid hereunder or any Participating Bank shall
have any Commitment, the Account Party will, unless the Majority Lenders
shall otherwise consent in writing:
(a) Use of Proceeds. Apply all proceeds of each Advance solely as
specified in Section 3.02 and Section 6.01(n) hereof.
(b) Payment of Taxes, Etc. Pay and discharge before the same shall
become delinquent, all taxes, assessments and governmental charges,
royalties or levies imposed upon it or upon its property except to the
extent the Account Party is contesting the same in good faith by
appropriate proceedings and has set aside adequate reserves for the payment
thereof.
(c) Maintenance of Insurance. Maintain, or cause to be maintained,
insurance (including appropriate plans of self-insurance) covering the
Account Party and its properties in effect at all times in such amounts and
covering such risks as may be required by law and in addition as is usually
carried by companies engaged in similar businesses and owning similar
properties.
(d) Preservation of Existence, Etc. Preserve and maintain its
corporate existence, material rights (statutory and otherwise) and
franchises except as otherwise expressly provided in the Plan or in the
Pledge Agreement, the PSNH Mortgage, or the Collateral Agency Agreement
referred to in the Financing Agreements.
(e) Compliance with Laws, Etc. Comply in all material respects with
the requirements of all applicable laws, rules, regulations and orders of
any governmental authority, including without limitation any such laws,
rules, regulations and orders relating to utilities, zoning, environmental
protection, use and disposal of Hazardous Substances, land use,
construction and building restrictions, and employee safety and health
matters relating to business operations, except to the extent (i) that the
Account Party is contesting the same in good faith by appropriate
proceedings or (ii) that any such non-compliance, and the enforcement or
correction thereof, would not materially adversely affect the financial
condition, properties, prospects or operations of the Account Party as a
whole.
(f) Inspection Rights. At any time and from time to time upon
reasonable notice, permit the Issuing Bank and its agents and
representatives to examine and make copies of and abstracts from the
records and books of account of, and the properties of, the Account Party
and to discuss the affairs, finances and accounts of the Account Party with
the Account Party and of its officers, directors and accountants.
(g) Keeping of Books. Keep proper records and books of account, in
which full and correct entries shall be made of all financial transactions
of the Account Party and the assets and business of the Account Party, in
accordance with good accounting practices consistently applied.
(h) Performance of Related Agreements. Perform and observe all
material terms and provisions of the Rate Agreement and each Significant
Contract to be performed or observed by the Account Party and take all
reasonable steps to enforce such agreements substantially in accordance
with their terms and to preserve the rights of the Account Party
thereunder; provided, that the foregoing provisions of this Section 7.01(h)
shall not preclude the Account Party from any waiver, amendment,
modification, consent or termination permitted under Section 7.02(h)
hereof.
(i) Collection of Accounts Receivable. Promptly bill, and diligently
pursue collection of, in accordance with customary utility practices, all
accounts receivable owing to the Account Party and all other amounts that
may from time to time be owing to the Account Party for services rendered
or goods sold.
(j) Common Equity to Total Capitalization Ratio. Maintain at all
times a ratio of Common Equity to Total Capitalization of not less than the
respective ratio specified below:
Period Ratio
Closing Date through and
including June 30, 1993 0.20:1
July 1, 1993 through and
including June 30, 1994 0.21:1
July 1, 1994 through and
including June 30, 1995 0.23:1
July 1, 1995 through and
including the Termination
Date 0.25:1
(k) Maintenance of Properties, Etc. (i) As to properties of the
type described in Section 6.01(i) hereof, maintain title of the quality
described therein; and (ii) preserve, maintain, develop, and operate in
substantial conformity with all laws, material contractual obligations and
prudent practices prevailing in the industry, all of its properties which
are used or useful in the conduct of its business in good working order and
condition, ordinary wear and tear excepted, except to the extent such non-
conformity would not materially adversely affect the financial condition,
properties, prospects or operations of the Account Party as a whole.
(l) Governmental Approvals. Duly obtain on or prior to such date as
the same may become legally required, and thereafter maintain in effect at
all times, all Governmental Approvals on its part to be obtained, except
those the absence of which would not materially adversely affect the
financial condition, properties, prospects or operations of the Account
Party as a whole.
(m) Further Assurances. Promptly execute and deliver all further
instruments and documents, and take all further action, that may be
necessary or that any Participating Bank through the Issuing Bank may
reasonably request in order to fully give effect to the interests and
properties purported to be covered by the Security Documents.
(n) Related Documents. Perform and comply in all material respects
with each of the provisions of each Related Document to which it is a
party.
SECTION 7.02. Negative Covenants. So long as any amount shall remain
available to be drawn under the Letter of Credit or any Advance or other
amounts shall remain unpaid hereunder or any Participating Bank shall have
any Commitment, the Account Party will not, without the written consent of
the Majority Lenders:
(a) Liens, Etc. Create, incur, assume or suffer to exist any lien,
security interest, or other charge or encumbrance (including the lien or
retained security title of a conditional vendor) of any kind, or any other
type of preferential arrangement the intent or effect of which is to assure
a creditor against loss or to prefer one creditor over another creditor
upon or with respect to any of its properties of any character (any of the
foregoing being referred to herein as a "Lien") whether now owned or
hereafter acquired, or sign or file under the Uniform Commercial Code of
any jurisdiction a financing statement which names the Account Party as
debtor, sign any security agreement authorizing any secured party
thereunder to file such financing statement, or assign accounts, excluding,
however, from the operation of the foregoing restrictions the Liens created
or perfected under or in connection with the Pledge Agreement, the Pledge
Agreement (as defined in the Series E Reimbursement Agreement), the
Financing Agreements, the Notes and the Collateral Agency Agreement
referred to in the Financing Agreements, the PSNH Mortgage, and the
following, whether now existing or hereafter created or perfected:
(i) Liens on Property specifically reserved, excepted and
excluded by subparagraphs (c) through (g) and subparagraph (j)
following the Granting Clauses section of the First Mortgage
Indenture;
(ii) Permitted Encumbrances (as defined in the PSNH Mortgage) on
the Indenture Assets (except Liens referred to in paragraphs (s) and
(t) of Schedule C to the PSNH Mortgage hereafter directly created by
the Account Party, provided, however, that the Account Party may
create any such Lien with the consent of the Majority Lenders (as
defined in the Financing Agreements) if such Lien would not materially
adversely affect the security granted under the PSNH Mortgage, as
determined by the Majority Lenders (as defined in the Financing
Agreements) in their reasonable discretion), provided that in no event
shall the outstanding principal amount of the First Mortgage Bonds
exceed at any time the First Mortgage Bond Amount (as defined in the
Financing Agreements); and
(iii) Liens referred to in paragraphs (b) through (t) of
Schedule C to the PSNH Mortgage on realty or personalty that is
subject to the Lien of the First Mortgage Indenture but is not also
subject to the Lien of the PSNH Mortgage; provided, however, that the
aggregate principal amount of the Debt at any one time outstanding
secured by purchase money Liens permitted by paragraph (m) of Schedule
C to the PSNH Mortgage, including Liens of a conditional vendor that
are the functional equivalent of purchase money liens, shall not
exceed $20,000,000.
(b) Debt. Create, incur or assume any Debt unless, after giving
effect thereto, (i) no Event of Default or Unmatured Default shall have
occurred and be continuing on the date of such creation, incurrence or
assumption and (ii) the Account Party shall have determined that, on the
basis of the assumptions and forecasts set forth in the most recent
operating budget/forecast of operations delivered pursuant to Section
7.03(iv) hereof (which the Account Party continues to believe to be
reasonable), the Account Party will continue to be in compliance at all
times with the provisions of Section 7.01(j) hereof. The Account Party
will furnish evidence of its compliance with this subsection (b) for each
fiscal quarter pursuant to Section 7.03(ii) hereof.
(c) Mergers, Etc. Merge with or into or consolidate with or into, or
acquire all or substantially all of the assets of, any Person.
(d) Sales, Etc., of Assets. Sell, lease, transfer or otherwise
dispose of all or any substantial part of its assets (whether in a single
transaction or series of transactions during any consecutive 12-month
period) other than in the ordinary course of the Account Party's business
in accordance with ordinary and customary terms and conditions.
For purposes of this subsection (d):
(i) all sales, leases, transfers or dispositions of receivables
of the Account Party to any unaffiliated third party, except for
collection in the ordinary course of the Account Party's business of
delinquent accounts, shall be deemed to be substantial and outside of
the ordinary course of the Account Party's business; and
(ii) any transaction or series of transactions during any
consecutive 12-month period shall be deemed to involve a "substantial
part" of the Account Party's assets if, in the aggregate, (A) the
value of such assets equals or exceeds 10% of the total assets of the
Account Party reflected in the financial statements of the Account
Party delivered pursuant to Section 7.03(ii) or 7.03(iii) hereof in
respect of the fiscal quarter or year ending on or immediately prior
to the commencement of such 12-month period or (B) for the four
calendar quarters ending on or immediately prior to commencement of
such 12-month period, the gross revenue derived by the Account Party
from such assets shall equal or exceed 10% of the total gross revenue
of the Account Party.
(e) Investments in Other Persons. Make any loan or advance to any
Person or purchase or otherwise acquire any capital stock, obligations or
other securities of, make any capital contribution to, or otherwise invest
in, any Person other than Permitted Investments and loans, advances,
purchases and investments listed on Schedule III hereto.
(f) Restricted Payments. Declare or pay any dividend, or make any
payment or other distribution of assets, properties, cash, rights,
obligations or securities on account of any share of any class of capital
stock of the Account Party (other than stock splits and dividends payable
solely in equity securities of the Account Party), or purchase, redeem,
retire, or otherwise acquire for value any shares of any class of capital
stock of the Account Party or any warrants, rights, or options to acquire
any such Debt or shares, now or hereafter outstanding, or make any
distribution of assets to any of its shareholders (any such transaction
being a "Restricted Payment") except for Restricted Payments made in
compliance with the following conditions:
(i) The Account Party may not make any Restricted Payments if
an Event of Default or Unmatured Default shall have occurred and be
continuing.
(ii) The Account Party may not make any Restricted Payments
during any fiscal quarter if, after giving effect thereto (and to the
other computations set forth below in this clause (ii)), the Account
Party would not be in full compliance with Section 7.01(j) hereof.
For purposes of determining compliance with Section 7.01(j) under this
clause (ii), computations under Section 7.01(j) shall be made as of
the date of such Restricted Payment, except that, retained earnings
shall be determined as of the last day of the immediately preceding
fiscal quarter (adjusted for all Restricted Payments made after the
last day of such preceding fiscal quarter).
(iii) The Account Party may not make any Restricted Payments
unless, after giving effect thereto, the Account Party shall have
determined that, on the basis of the assumptions and forecasts set
forth in the most recent operating budget/forecast of operations
delivered pursuant to Section 7.03(iv) hereof (which the Account Party
continues to believe to be reasonable) the Account Party will continue
to be in compliance at all times with the provisions of Section
7.01(j) hereof.
(iv) On or prior to May 16, 1993, the Account Party may make
no Restricted Payments except out of that portion of earned surplus
accumulated after May 16, 1991 in excess of $75,000,000 (determined in
accordance with generally accepted accounting principles and without
giving effect to charges to earned surplus on account of Restricted
Payments or on account of transfers from earned surplus to capital
surplus or capital stock accounts).
Notwithstanding anything contrary contained in this Section 7.02(f), the
Account Party may declare and pay regularly scheduled quarterly dividends
on the Preferred Stock and declare and pay into escrow, prior to the date
required to be paid to holders of Preferred Stock, with respect to the
fifth and sixth dividend periods following May 16, 1991 all or any part of
the dividends scheduled to accrue during such periods, if, immediately
prior to and after giving effect to any such payment, no Event of Default
or Unmatured Default shall have occurred and be continuing.
(g) Compliance with ERISA. (i) Terminate, or permit any ERISA
Affiliate to terminate, any ERISA Plan so as to result in any material (in
the opinion of the Majority Lenders) liability of the Account Party to the
PBGC, or (ii) permit to exist any occurrence of any Reportable Event (as
defined in Title IV of ERISA), or any other event or condition, which
presents a material (in the opinion of the Majority Lenders) risk of such a
termination by the PBGC of any ERISA Plan and such a material liability to
the Account Party.
(h) Related Agreements.
(i) Amendments. Amend, modify or supplement or give any
consent, acceptance or approval to any amendment, modification or
supplement or deviation by any party from the terms of, the Rate
Agreement or any Significant Contract, except, with respect only to
the Significant Contracts, any amendment, modification or supplement
to such agreement that would not reduce the rights or entitlements of
the Account Party thereunder in any material way.
(ii) Termination. Cancel or terminate (or consent to any
cancellation or termination of) the Rate Agreement or any Significant
Contract prior to the expiration of its stated term, provided that
this subsection (ii) shall not restrict the rights of the Account
Party to enforce any remedy against any obligor under any Significant
Contract in the event of a material breach or default by such obligor
thereunder if and so long as the Account Party shall have provided to
the Issuing Bank at least 30 days prior written notice of the
enforcement action proposed to be undertaken by the Account Party.
(i) Change in Nature of Business. Engage in any material business
activity other than those established and engaged in on the date hereof or
described in the Third Amended Disclosure Statement of NU, dated
December 28, 1989 and filed with the Bankruptcy Court.
(j) Ownership in Seabrook and Nuclear Plants. Acquire, directly or
indirectly, any ownership interest or any additional ownership interest of
any kind in any nuclear-powered electric generating plant, except such
additional ownership interest in Seabrook as may be acquired from the
Vermont Electric Generation and Transmission Cooperative, Inc.
(k) Subsidiaries. Create or suffer to exist any active subsidiaries
other than Properties, Inc., a New Hampshire corporation; or permit any
material assets or business to be maintained at or conducted by any
subsidiary except for the assets owned by Properties, Inc. not exceeding
$20,000,000.
SECTION 7.03. Reporting Obligations. So long as any amount shall
remain available to be drawn under the Letter of Credit or any Advance or
other amounts shall remain unpaid hereunder or any Participating Bank shall
have any Commitment, the Account Party will, unless the Majority Lenders
shall otherwise consent in writing, furnish to the Agent in sufficient
copies for the Issuing Bank and each Participating Bank, the following:
(i) as soon as possible and in any event within five (5)
days after the occurrence of each Event of Default or Unmatured
Default continuing on the date of such statement, a statement of
the Chief Financial Officer, Treasurer or Assistant Treasurer of
the Account Party setting forth details of such Event of Default
or Unmatured Default and the action which the Account Party
proposes to take with respect thereto;
(ii) as soon as available and in any event within fifty
(50) days after the end of each of the first three quarters of
each fiscal year of the Account Party, (A) if and so long as the
Account Party is required to submit to the Securities and
Exchange Commission a report on Form 10-Q, a copy of the Account
Party's report on Form 10-Q submitted to the Securities and
Exchange Commission with respect to such quarter and (B) if the
Account Party ceases to be required to submit such report, a
balance sheet of the Account Party as of the end of such quarter
and statements of income and retained earnings and of cash flows
of the Account Party for the period commencing at the end of the
previous fiscal year and ending with the end of such quarter, all
in reasonable detail and duly certified (subject to year-end
audit adjustments) by the Chief Financial Officer, Treasurer or
Assistant Treasurer of the Account Party as having been prepared
in accordance with generally accepted accounting principles
consistent with those applied in the preparation of the financial
statements referred to in Section 6.01(e) hereof, in each such
case, delivered together with a certificate of said officer
(x) stating that no Event of Default or Unmatured Default has
occurred and is continuing or, if an Event of Default or
Unmatured Default has occurred and is continuing, a statement as
to the nature thereof and the action which the Account Party
proposes to take with respect thereto, (y) demonstrating
compliance with Section 7.01(j) hereof for and as of the end of
such fiscal quarter and compliance with Sections 7.02(b) and (f)
hereof, as of the dates on which any Debt was created, incurred
or assumed (using the Account Party's most recent annual
actuarial determinations in the computation of Debt referred to
in clause (ix) in the definition of "Debt") or any Restricted
Payment was made during such quarter, and (z) demonstrating,
after giving effect to the incurrence of any Debt created,
incurred or assumed during such fiscal quarter (using the Account
Party's most recent annual actuarial determinations in the
computation of Debt referred to in clause (ix) in the definition
of "Debt") and after giving effect to any Restricted Payment made
during such fiscal quarter, compliance with Section 7.01(j)
hereof for the remainder of the fiscal year of the Account Party
based on the operating budget/forecast of operations delivered
pursuant to Section 7.03(iv) hereof for such fiscal year, such
demonstrations to be in a schedule (in form satisfactory to the
Majority Lenders) which sets forth the computations used by the
Account Party in determining such compliance;
(iii) as soon as available and in any event within 105
days after the end of each fiscal year of the Account Party,
(A) if and so long as the Account Party is required to submit to
the Securities and Exchange Commission a report on Form 10-K, a
copy of the Account Party's report on Form 10-K submitted to the
Securities and Exchange Commission with respect to such year and
(B) if the Account Party ceases to be required to submit such
report, a copy of the annual audit report for such year for the
Account Party including therein a balance sheet of the Account
Party as of the end of such fiscal year and statements of income
and retained earnings and of cash flows of the Account Party for
such fiscal year, in each case certified by a
nationally-recognized independent public accountant, in each such
case delivered together with a certificate of the Chief Financial
Officer, Treasurer or Assistant Treasurer (x) stating that the
financial statements were prepared in accordance with generally
accepted accounting principles consistent with those applied in
the preparation of financial statements referred to in Section
6.01(e) hereof, and that no Event of Default or Unmatured Default
has occurred and is continuing, or if an Event of Default or
Unmatured Default has occurred and is continuing, stating the
nature thereof and the action which the Account Party proposes to
take with respect thereto and (y) demonstrating compliance with
Section 7.01(j) hereof for and as of the end of such fiscal year
and compliance with Sections 7.02(b) and (f) hereof, as of the
dates on which any Debt was created, incurred or assumed (using
the Account Party's most recent annual actuarial determinations
in the computation of Debt referred to in clause (ix) in the
definition of "Debt") or any Restricted Payment was made during
the last fiscal quarter of the Account Party, such demonstrations
to be in a schedule (in form satisfactory to the Majority
Lenders) which sets forth the computations used by the Account
Party in determining such compliance.
(iv) as soon as available and in any event before
March 31 of each fiscal year, a copy of an operating
budget/forecast of operations of the Account Party as approved by
the Board of Directors of the Account Party in form satisfactory
to the Participating Banks for such fiscal year of the Account
Party, together with a certificate of the Chief Financial
Officer, Treasurer or Assistant Treasurer of the Account Party
stating that such budget/forecast was prepared in good faith and
on reasonable assumptions;
(v) as soon as available and in any event no later than the
New Hampshire Public Utilities Commission shall have received the
Account Party's annual submission, if any, relating to the
"return on equity collar" referred to in the Rate Agreement, a
copy of such annual submission of the Account Party;
(vi) as soon as possible and in any event (A) within 30
days after the Account Party knows or has reason to know that any
ERISA Plan Termination Event described in clause (i) of the
definition of ERISA Plan Termination Event with respect to any
ERISA Plan or ERISA Multiemployer Plan has occurred and
(B) within 10 days after the Account Party knows or has reason to
know that any other ERISA Plan Termination Event with respect to
any ERISA Plan or ERISA Multiemployer Plan has occurred, a
statement of the Chief Financial Officer, Treasurer or Assistant
Treasurer of the Account Party describing such ERISA Plan
Termination Event and the action, if any, which the Account Party
proposes to take with respect thereto;
(vii) promptly after receipt thereof by the Account
Party or any of its ERISA Affiliates from the PBGC, copies of
each notice received by the Account Party or any such ERISA
Affiliate of the PBGC's intention to terminate any ERISA Plan or
ERISA Multiemployer Plan or to have a trustee appointed to
administer any ERISA Plan or ERISA Multiemployer Plan;
(viii) promptly and in any event within 30 days after the
filing thereof with the Internal Revenue Service, copies of each
Schedule B (Actuarial Information) to the annual report (Form
5500 Series) with respect to each ERISA Plan (if any) to which
the Account Party is a contributing employer;
(ix) promptly after receipt thereof by the Account
Party or any of its ERISA Affiliates from an ERISA Multiemployer
Plan sponsor, a copy of each notice received by the Account Party
or any of its ERISA Affiliates concerning the imposition or
amount of withdrawal liability in an aggregate principal amount
of at least $10,000,000 pursuant to Section 4202 of ERISA in
respect of which the Account Party may be liable;
(x) promptly after the Account Party becomes aware of the
occurrence thereof, notice of all actions, suits, proceedings or
other events (A) of the type described in Section 6.01(f), or
(B) which purport to affect the legality, validity or
enforceability of any of the Loan Documents or Significant
Contracts;
(xi) promptly after the sending or filing thereof,
copies of all such proxy statements, financial statements, and
reports which the Account Party sends to its public security
holders (if any) or files with, and copies of all regular,
periodic and special reports and all registration statements and
periodic or special reports, if any, which the Account Party
files with, the Securities and Exchange Commission or any
governmental authority which may be substituted therefor, or with
any national securities exchange;
(xii) promptly after receipt thereof, any assertion of
the character described in Section 8.01(h) hereof and the action
the Account Party proposes to take with respect thereto;
(xiii) promptly after knowledge of any material default
under the Rate Agreement or any Significant Contract, notice of
such default and the action the Account Party proposes to take
with respect thereto;
(xiv) promptly after knowledge of any amendment,
modification, or other change to the Rate Agreement or any
Significant Contract or to any Governmental Approval affecting
the Rate Agreement, notice of such amendment, modification or
other change, it being understood that for purposes of this
clause (xiv) any filing by the Account Party in the ordinary
course of the Account Party's business with, or order issued or
action taken by, a governmental authority or regulatory body
after May 16, 1991 to implement the terms of the Rate Agreement
shall not be considered an amendment, modification or change to a
Governmental Approval affecting the Rate Agreement; and
(xv) promptly after requested, such other information
respecting the financial condition, operations, properties,
prospects or otherwise, of the Account Party as the Issuing Bank
or Majority Lenders may from time to time reasonably request in
writing.
ARTICLE VIII
DEFAULTS
SECTION 8.01. Events of Default. The following events shall each
constitute an "Event of Default" if the same shall occur and be continuing
after the grace period and notice requirement (if any) applicable thereto:
(a) The Account Party shall fail to pay any interest on any Advance
or pursuant to Section 4.02 hereof within two days after the same becomes
due; the Account Party shall fail to reimburse the Issuing Bank for any
Interest Drawing (as defined in the Letter of Credit) within two days after
such reimbursement becomes due; or the Account Party shall fail to make any
other payment required to be made pursuant to Article II or Article III
hereof when due; or
(b) Any representation or warranty made by the Account Party or NU
(or any of their respective officers or agents) in this Agreement, the
Pledge Agreement or the Purchase Contract, or in any certificate or other
writing delivered pursuant to this Agreement or Section 7 of the Purchase
Contract, shall prove to have been incorrect in any material respect when
made or deemed made; or
(c) The Account Party shall fail to perform or observe any term or
covenant on its part to be performed or observed contained in
Sections 7.01(a), (d) or, (j), Section 7.02 or Section 7.03(i) hereof; or
(d) The Account Party shall fail to perform or observe any other term
or covenant on its part to be performed or observed contained in this
Agreement or the Pledge Agreement and such failure shall remain unremedied,
after written notice thereof shall have been given to the Account Party by
the Agent, the Issuing Bank or any Participating Bank, for a period of 30
days; or
(e) The Account Party shall fail to pay any of its Debt when due
(including any interest or premium thereon but excluding Debt arising
hereunder or under or in connection with the Financing Agreements and
excluding other Debt aggregating in no event more than $10,000,000 in
principal amount at any one time) whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise, and such failure shall
continue after the applicable grace period, if any, specified in any
agreement or instrument relating to such Debt; or any other default under
any agreement or instrument relating to any such Debt, or any other event,
shall occur and shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such default or
event is to accelerate, or to permit the acceleration of, the maturity of
such Debt; or any such Debt (including, for purposes of this clause and the
next succeeding clause of this Section 8.01(e), the Debt arising under or
in connection with the Financing Agreements) shall be declared to be due
and payable, or required to be prepaid (other than by a regularly scheduled
required prepayment or as a result of the Account Party's exercise of a
prepayment option) prior to the stated maturity thereof; unless in each
such case the obligee under or holder of such Debt or the trustee with
respect to such Debt shall have waived in writing such circumstance without
consideration having been paid by the Account Party so that such
circumstance is no longer continuing; or
(f) The Account Party shall generally not pay its debts as such debts
become due, or shall admit in writing its inability to pay its debts
generally, or shall make an assignment for the benefit of creditors; or any
proceeding shall be instituted by or against the Account Party seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition
of its debts under any law relating to bankruptcy, insolvency,or
reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, or other similar official
for it or for any substantial part of its property and, in the case of a
proceeding instituted against the Account Party, either the Account Party
shall consent thereto or such proceeding shall remain undismissed or
unstayed for a period of 90 days or any of the actions sought in such
proceeding (including without limitation the entry of an order for relief
against the Account Party or the appointment of a receiver, trustee,
custodian or other similar official for the Account Party or any of its
property) shall occur; or the Account Party shall take any corporate or
other action to authorize any of the actions set forth above in this
subsection (f); or
(g) Any judgment or order for the payment of money in excess of
$10,000,000 shall be rendered against the Account Party or its properties
and either enforcement proceedings shall have been commenced by any
creditor upon such judgment or order and shall not have been stayed or
there shall be any period of 15 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
(h) Any material provision of any Loan Document, any Related
Document, the Rate Agreement or any Significant Contract shall for any
reason other than the express terms thereof or the exercise of any right or
option expressly contained therein cease to be valid and binding on any
party thereto except as otherwise expressly permitted by the exceptions and
provisos contained in Section 7.02(h) hereof; or any party thereto other
than the Participating Banks shall so assert in writing, provided that in
the case of any party other than the Account Party making such assertion in
respect of any Related Document, the Rate Agreement or any Significant
Contract, such assertion shall not in and of itself constitute an Event of
Default hereunder until (i) such asserting party shall cease to perform
under and in compliance with such Related Document, the Rate Agreement or
such Significant Contract, (ii) the Account Party shall fail to diligently
prosecute, by appropriate action or proceedings, a rescission of such
assertion or a binding determination as to the merits thereof or (iii) such
a binding determination shall have been made in favor of such asserting
party's position; or
(i) The Security Documents shall for any reason, except to the extent
permitted by the terms thereof, fail or cease to create valid and perfected
Liens (to the extent purported to be granted by such documents and subject
to the exceptions permitted thereunder) in any of the Collateral (other
than Liens in favor of the Trustee with respect to the interests of the
Issuer under the Indenture), provided, that such failure or cessation
relating to any non-material portion of such Collateral shall not
constitute an Event of Default hereunder unless the same shall not have
been corrected within 30 days after the Account Party becomes aware
thereof; or
(j) The Account Party shall not have in full force and effect any or
all insurance required under Section 7.01(c) hereof or there shall be
incurred any uninsured damage, loss or destruction of or to the Account
Party's properties in an amount not covered by insurance (including fully-
funded self-insurance programs) which the Majority Lenders consider to be
material; or
(k) A default by the Account Party shall have occurred under the Rate
Agreement and shall not have been effectively cured within the time period
specified therein for such cure (or, if no such time period is specified
therein, 10 days); or a default by any party shall have occurred under any
Significant Contract and such default shall not have been effectively cured
within 30 days after notice from the Agent to the Account Party stating
that, in the opinion of the Majority Lenders, such default may have a
material adverse effect upon the financial condition, operations,
properties or prospects of the Account Party as a whole; or
(l) Any Governmental Approval (whether federal, state or local)
required to give effect to the Rate Agreement (including, without
limitation, Chapter 362-C of the New Hampshire Revised Statutes and the
enabling order of The New Hampshire Public Utilities Commission issued
pursuant thereto) shall be amended, modified or supplemented, or any other
regulatory or legislative action or change (whether federal, state or
local) having the effect, directly or indirectly, of modifying the benefits
or entitlements of the Account Party under the Rate Agreement shall occur,
and in any such case such amendment, modification, supplement, action or
change may have, in the opinion of the Majority Lenders, a material adverse
effect upon the financial condition, operations, properties or prospects of
the Account Party as a whole; or
(m) NU shall cease to own all of the outstanding common stock of the
Account Party, free and clear of any Liens; or
(n) An event of default (as defined therein) shall have occurred and
be continuing under the Indenture or the First Mortgage Indenture.
(o) An event of default (as defined therein) shall have occurred and
be continuing under the Series E Reimbursement Agreement.
SECTION 8.02. Remedies Upon Events of Default. Upon the occurrence
and during the continuance of any Event of Default, then, and in any such
event, the Agent with the concurrence of the Issuing Bank may, and upon the
direction of the Majority Lenders the Agent shall (i) if the Letter of
Credit shall not have been issued, instruct the Issuing Bank to (whereupon
the Issuing Bank shall) by notice to the Account Party declare its
commitment to issue the Letter of Credit to be terminated, whereupon the
same shall forthwith terminate, (ii) if the Letter of Credit shall have
been issued, instruct the Issuing Bank to (whereupon the Issuing Bank
shall) furnish to the Trustee and the Paying Agent written notice of such
Event of Default in accordance with Section 6.01(a)(iv) of the Indenture
and of the Issuing Bank's determination to terminate the Letter of Credit
on the fifth business day (as defined in the Indenture) following the
Trustee's and Paying Agent's receipt of such notice, (iii) if the Letter of
Credit shall have been issued, instruct the Issuing Bank to (whereupon the
Issuing Bank shall) furnish to the Trustee and the Paying Agent written
notice that the Interest Component will not be reinstated in the amount of
one or more Interest Drawings, all as provided in the Letter of Credit;
(iv) declare the Advances and all other principal amounts outstanding
hereunder, all interest thereon and all other amounts payable hereunder to
be forthwith due and payable, whereupon the Advances and all other
principal amounts outstanding hereunder, all such interest and all such
other amounts shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Account Party, and (v) instruct the
Issuing Bank to (whereupon the Issuing Bank shall) exercise all the rights
and remedies provided herein and under and in respect of the Security
Documents; provided, however, that in the event of an actual or deemed
entry of an order for relief with respect to the Account Party under the
Federal Bankruptcy Code, (A) the commitment of the Issuing Bank to issue
the Letter of Credit, the Commitments and the obligations of the
Participating Banks to make Advances shall automatically be terminated, and
(B) the Advances and all other principal amounts outstanding hereunder, all
interest accrued and unpaid thereon and all other amounts payable hereunder
shall automatically become due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived
by the Account Party.
SECTION 8.03. Issuing Bank to Notify First Mortgage Trustee, Others.
The Issuing Bank shall promptly notify the First Mortgage Trustee by
telephone, confirmed in writing, of the occurrence of any Event of Default.
In addition, the Issuing Bank shall furnish to the Agent, the Account
Party, the Paying Agent and the Issuer a copy of (a) any notice furnished
to the First Mortgage Trustee pursuant to the preceding sentence and (b)
any notice delivered to the Trustee pursuant to clause (ii) or clause (iii)
of Section 8.02. Notwithstanding the foregoing, no failure of the Issuing
Bank to give any notice (or copy of a notice) as contemplated by this
Section 8.03 shall limit or impair any rights of the Issuing Bank, the
Agent or any Participating Bank or the exercise of any remedy hereunder,
nor shall the Issuing Bank, the Agent or any Participating Bank incur any
liability as a result of any such failure.
ARTICLE IX
THE AGENT, THE PARTICIPATING
BANKS AND THE ISSUING BANK
SECTION 9.01. Authorization of Agent; Actions of Agent and Issuing
Bank. The Issuing Bank and each Participating Bank hereby appoint and
authorize the Agent to take such action as agent on their behalf and to
exercise such powers under this Agreement as are delegated to the Agent by
the terms hereof, together with such powers as are reasonably incidental
thereto; provided, however, that neither the Agent nor the Issuing Bank
shall be required to take any action which exposes the Agent or the Issuing
Bank to personal liability or which is contrary to this Agreement or
applicable law. As to any matters not expressly provided for by any
Related Document (including, without limitation, enforcement or collection
thereof), neither the Agent nor the Issuing Bank shall be required to
exercise any discretion or take any action. The Agent agrees to deliver
promptly (i) to the Issuing Bank and each Participating Bank copies of each
notice delivered to it by the Account Party and (ii) to each Participating
Bank copies of each notice delivered to it by the Issuing Bank, in each
case pursuant to the terms of this Agreement.
SECTION 9.02. Reliance, Etc. Neither the Agent, the Issuing Bank,
nor any of their directors, officers, agents or employees shall be liable
for any action taken or omitted to be taken by it or them under or in
connection with this Agreement or any Related Document, except for its or
their own gross negligence or willful misconduct as determined by a court
of competent jurisdiction. Without limitation of the generality of the
foregoing, each of the Agent and the Issuing Bank (i) may consult with
legal counsel (including counsel for the Account Party), independent public
accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken in good faith by it in accordance
with the advice of such counsel, accountants or experts; (ii) makes no
warranty or representation to any Participating Bank and shall not be
responsible to any Participating Bank for any statements, warranties or
representations made in or in connection with this Agreement or any Related
Document; (iii) shall not have any duty to ascertain or to inquire as to
the performance or observance of any of the terms, covenants or conditions
of this Agreement or any Related Document on the part of the Account Party
to be performed or observed, or to inspect any property (including the
books and records) of the Account Party; (iv) shall not be responsible to
any Participating Bank for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any
Related Document or any other instrument or document furnished pursuant
hereto and thereto; and (v) shall incur no liability under or in respect of
this Agreement or any Related Document by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telegram, cable
or telex), including, without limitation, any thereof from time to time
purporting to be from the Trustee, believed by it to be genuine and signed
or sent by the proper party or parties.
SECTION 9.03. The Agent, the Issuing Bank and Affiliates. The Agent
and the Issuing Bank shall have the same rights and powers under this
Agreement as any other Participating Bank and may exercise (or omit from
exercising) the same as though they were not the Agent and the Issuing
Bank, respectively, and the term "Participating Bank" shall, unless
otherwise expressly indicated, include Barclays in its individual capacity.
The Agent, the Issuing Bank and their respective Affiliates may accept
deposits from, lend money to, act as trustee under indentures of, and
generally engage in any kind of business with, the Account Party, any of
its subsidiaries and any Person who may do business with or own securities
of the Account Party or any such subsidiary, all as if Barclays was not the
Agent or the Issuing Bank, and without any duty to account therefor to the
Participating Banks.
SECTION 9.04. Participating Bank Credit Decision. Each of the
Issuing Bank and each Participating Bank acknowledges that it has,
independently and without reliance upon the Agent, the Issuing Bank or any
other Participating Bank and based on the financial information referred to
in Section 6.01(e) hereof and such other documents and information as it
has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement, including, without limitation, in the case of the
Issuing Bank and the Participating Banks, with respect to the determination
as to whether to classify the transactions evidenced by this Agreement as
an "HLT" (as defined in Banking Circular BC-242, issued by the Comptroller
of the Currency on October 30, 1989, as supplemented from time to time, or
any successor concept). Each of the Issuing Bank and each Participating
Bank also acknowledges that it will, independently and without reliance
upon the Agent, the Issuing Bank or any other Participating Bank and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under this Agreement. In that regard, the Issuing Bank, the Participating
Banks and the Agent acknowledge that none of them has classified the
transactions evidenced hereby as an "HLT", and agree with each other that,
in the event that any of them shall subsequently determine to classify such
transactions as an "HLT", it will provide notice to such effect to the
Issuing Bank, the Participating Banks and the Agent, as applicable, prior
to or promptly following effecting such classification.
SECTION 9.05. Indemnification. The Participating Banks agree to
indemnify the Agent and the Issuing Bank (to the extent not reimbursed by
the Account Party), ratably according to their respective Participation
Percentages, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against the Agent or the Issuing Bank in any way
relating to or arising out of this Agreement or any action taken or omitted
by the Agent or the Issuing Bank under this Agreement, provided that no
Participating Bank shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Agent's or the Issuing Bank's
gross negligence or willful misconduct. Without limitation of the
foregoing, each Participating Bank agrees to reimburse the Agent and the
Issuing Bank promptly upon demand for its ratable share of any out-of-
pocket expenses (including counsel fees) incurred by the Agent and the
Issuing Bank in connection with the preparation, execution, delivery,
administration, modification, amendment, waiver or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice
in respect of rights or responsibilities under, this Agreement to the
extent that the Agent and the Issuing Bank are entitled to reimbursement
for such expenses pursuant to Section 10.04 hereof but are not reimbursed
for such expenses by the Account Party.
SECTION 9.06. Successor Agent. The Agent may resign at any time by
giving written notice thereof to the Issuing Bank, the Participating Banks
and the Account Party, with any such resignation to become effective only
upon the appointment of a successor Agent pursuant to this Section 9.06.
Upon any such resignation, the Issuing Bank shall have the right to appoint
a successor Agent, which shall be another commercial bank or trust company
reasonably acceptable to the Account Party, organized or licensed under the
laws of the United States, or of any State thereof. Upon the acceptance of
any appointment as Agent hereunder by a successor Agent and the execution
and delivery by the Account Party and the successor Agent of an agreement
relating to the fees, if any, to be paid to the successor Agent in
connection with its acting as Agent hereunder, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall
be discharged from its duties and obligations under this Agreement. After
any retiring Agent's resignation hereunder as Agent, the provisions of this
Article IX shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent under this Agreement.
SECTION 9.07. Issuing Bank. (a) All notices received by the Issuing
Bank pursuant to this Agreement or any Related Document (other than the
Letter of Credit) shall be promptly delivered to the Agent for distribution
to the Participating Banks.
(b) The Issuing Bank shall not amend or waive any provision or
consent to the amendment or waiver of any Related Document without the
written consent of the Majority Lenders.
(c) Upon receipt by the Issuing Bank from time to time of any amount
pursuant to the terms of any Related Document (other than pursuant to the
terms of this Agreement), the Issuing Bank shall promptly deliver to the
Agent such amount.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Pledge Agreement, nor consent to any
departure by the Account Party therefrom, shall in any event be effective
unless the same shall be in writing and signed by the Majority Lenders, and
then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided, however,
that no amendment, waiver or consent shall, unless in writing and signed by
the Issuing Bank and all the Participating Banks, do any of the following:
(a) waive, modify or eliminate any of the conditions specified in
Article V, (b) increase the Commitments of the Participating Banks that may
be maintained hereunder or subject the Participating Banks to any
additional obligations, (c) reduce the principal of, or interest on, the
Advances, any amount reimbursable on demand pursuant to Section 3.01, or
any fees or other amounts payable hereunder, (d) postpone any date fixed
for any payment of principal of, or interest on, the Advances, such
reimbursable amounts or any fees or other amounts payable hereunder (other
than fees payable to the Issuing Bank or the Agent pursuant to Section
2.03(b) or (c) hereof), (e) change the percentage of the Commitments or of
the aggregate unpaid principal amount of the Advances, or the number of
Participating Banks which shall be required for the Participating Banks or
any of them to take any action hereunder, (f) amend this Agreement or the
Pledge Agreement in a manner intended to prefer one or more Participating
Banks over any other Participating Banks, (g) amend this Section 10.01, or
(h) release any of the Collateral otherwise than in accordance with any
provisions for such release contained in the Security Documents, or change
any provision of any Security Document providing for the release of all or
substantially all of the Collateral; and provided, further, that no
amendment, waiver or consent shall, unless in writing and signed by the
Issuing Bank or the Agent in addition to the Participating Banks required
above to take such action, affect the rights or duties of the Issuing Bank
or the Agent, as the case may be, under this Agreement or the Pledge
Agreement.
SECTION 10.02. Notices, Etc. All notices and other communications
provided for hereunder and under the other Loan Documents shall be in
writing (including telegraphic, telex, telecopy or cable communication) and
mailed, telegraphed, telexed, telecopied, cabled or delivered:
(i) if to the Account Party, to it in care of NUSCO at NUSCO's
address at 107 Selden Street, Berlin, Connecticut 06037 (telecopy:
(203) 665-5457), Attention: Assistant Treasurer;
(ii) if to the Issuing Bank or the Agent, to it at its address at
222 Broadway, 12th Floor, New York, New York 10038, Attention:
Customer Service Unit, (telephone: (212) 412-3363, telecopy: (212)
412-3080, Telex: 12-6946), with a copy to: Utilities Finance Group,
(telephone (212) 412-2551, telecopy: (212) 412-7575) and with a
further copy to Credit Enhancement Unit (telephone (212) 412-3578,
telecopy (212) 412-6969);
(iii) if to any Participating Bank, to it at its address set
forth on the signature pages hereof or in the Participation Assignment
pursuant to which it became a Participating Bank; or
as to each party other than any Participating Bank, at such other address
as shall be designated by such party in a written notice to the other
parties, and, as to any Participating Bank, at such other address as shall
be designated by such Participating Bank in a written notice to the Account
Party and the Agent. All such notices and communications shall, when
mailed, telegraphed, telexed, telecopied or cabled, be effective five days
after when deposited in the mails, or when delivered to the telegraph
company, confirmed by telex answerback, telecopied or delivered to the
cable company, respectively, except that notices and communications to the
Agent or the Issuing Bank pursuant to Article II, III or IV shall not be
effective until received by the Agent or the Issuing Bank, as the case may
be.
SECTION 10.03. No Waiver of Remedies. No failure on the part of any
Participating Bank or the Issuing Bank to exercise, and no delay in
exercising, any right hereunder or under any Loan Document shall operate as
a waiver thereof; nor shall any single or partial exercise of any such
right preclude any other or further exercise thereof or the exercise of any
other right. The remedies herein provided are cumulative and not exclusive
of any remedies provided by law.
SECTION 10.04. Costs, Expenses and Indemnification. (a) The Account
Party agrees to pay on demand all costs and expenses, if any (including,
without limitation, reasonable counsel fees and expenses), of (i) the Agent
and the Issuing Bank in connection with the preparation, negotiation,
execution and delivery of the Loan Documents and the administration of the
Loan Documents, the care and custody of any and all collateral, and any
proposed modification, amendment, or consent relating thereto; and (ii) the
Agent, the Issuing Bank and each Participating Bank in connection with the
enforcement (whether through negotiations, legal proceedings or otherwise)
of this Agreement or any other Loan Document.
(b) The Account Party hereby agrees to indemnify and hold the Agent,
the Issuing Bank and each Participating Bank and their respective officers,
directors, employees, professional advisors and affiliates (each, an
"Indemnified Person") harmless from and against any and all claims,
damages, losses, liabilities, costs or expenses (including reasonable
attorney's fees and expenses, whether or not such Indemnified Person is
named as a party to any proceeding or investigation or is otherwise
subjected to judicial or legal process arising from any such proceeding or
investigation) which any of them may incur or which may be claimed against
any of them by any person or entity (except to the extent such claims,
damages, losses, liabilities, costs or expenses arise from the gross
negligence or willful misconduct of the Indemnified Person):
(i) by reason of or in connection with the execution, delivery
or performance of any of the Loan Documents or the Related Documents
or any transaction contemplated thereby, or the use by the Account
Party of the proceeds of any Advance or the use by the Paying Agent or
the Trustee of the proceeds of any drawing under the Letter of Credit;
(ii) in connection with or resulting from the utilization,
storage, disposal, treatment, generation, transportation, release or
ownership of any Hazardous Substance (A) at, upon or under any
property of the Account Party or any of its Affiliates or (B) by or on
behalf of the Account Party or any of its Affiliates at any time and
in any place;
(iii) in connection with any documentary taxes, assessments
or charges made by any governmental authority by reason of the
execution and delivery of any of the Loan Documents;
(iv) by reason of or in connection with the execution and
delivery or transfer of, or payment or failure to make payment under,
the Letter of Credit; provided, however, that the Account Party shall
not be required to indemnify the Agent, the Issuing Bank or any
Participating Bank pursuant to this Section for any claims, damages,
losses, liabilities, costs or expenses to the extent caused by (A) the
Issuing Bank's willful misconduct or gross negligence, as determined
by a court of competent jurisdiction, in determining whether documents
presented under the Letter of Credit are genuine or comply with the
terms of the Letter of Credit or (B) the Issuing Bank's willful or
grossly negligent failure, as determined by a court of competent
jurisdiction, to make lawful payment under the Letter of Credit after
the presentation to it by the Paying Agent of a draft and certificate
strictly complying with the terms and conditions of the Letter of
Credit; or
(v) by reason of any inaccuracy or alleged inaccuracy in any
material respect, or any untrue statement or alleged untrue statement
of any material fact, contained in any preliminary official statement
relating to the Bonds or in the Official Statement relating to the
Bonds or any amendment or supplement thereto, except to the extent
contained in or arising from information in the Official Statement
relating to the Bonds supplied in writing by and describing the
Issuing Bank.
(c) Nothing contained in this Section 10.04 is intended to limit the
Account Party's obligations set forth in Articles II, III and IV. The
Account Party's obligations under this Section 10.04 shall survive the
creation and sale of any participation interest pursuant to Section 10.06
hereof and shall survive as well the repayment of all amounts owing to the
Agent, the Issuing Bank and the Participating Banks under the Loan
Documents and the termination of the Commitments. If and to the extent
that the obligations of the Account Party under this Section 10.04 are
unenforceable for any reason, the Account Party agrees to make the maximum
contribution to the payment and satisfaction thereof which is permissible
under applicable law.
SECTION 10.05. Right of Set-off. (a) Upon (i) the occurrence and
during the continuance of any Event of Default and (ii) the taking of any
action or the giving of any instruction by the Agent as specified by
Section 8.02 hereof, the Issuing Bank and each Participating Bank are
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by the Issuing Bank or such Participating
Bank to or for the credit or the account of the Account Party against any
and all of the obligations of the Account Party now or hereafter existing
under this Agreement in favor of the Issuing Bank or such Participating
Bank, irrespective of whether or not the Issuing Bank or such Participating
Bank shall have made any demand under this Agreement and although such
obligations may be unmatured. The Issuing Bank and each Participating Bank
agrees promptly to notify the Account Party after any such set-off and
application provided that the failure to give such notice shall not affect
the validity of such set-off and application. The rights of the Issuing
Bank and each Participating Bank under this Section are in addition to
other rights and remedies (including, without limitation, other rights of
set-off) which the Issuing Bank and/or such Participating Bank may have.
(b) The Account Party agrees that it shall have no right of off-set,
deduction or counterclaim in respect of its obligations hereunder, and that
the obligations of the Issuing Bank and of the several Participating Banks
hereunder are several and not joint. Nothing contained herein shall
constitute a relinquishment or waiver of the Account Party's rights to any
independent claim that the Account Party may have against the Issuing Bank
or any Participating Bank, but no Participating Bank shall be liable for
the conduct of the Issuing Bank or any other Participating Bank, and the
Issuing Bank shall not be liable for the conduct of any Participating Bank.
SECTION 10.06. Binding Effect; Assignments and Participants. (a)
This Agreement shall become effective when it shall have been executed and
delivered by the Account Party, the Agent, the Issuing Bank and each
Participating Bank named on the signature pages hereto and thereafter shall
be binding upon and inure to the benefit of the Account Party, the Agent,
the Issuing Bank and each Participating Bank and their respective
successors and assigns, except that the Account Party shall not have the
right to assign its rights hereunder or any interest herein without the
prior written consent of the Issuing Bank and each Participating Bank, and
the Issuing Bank may not assign its commitment to issue the Letter of
Credit or its obligations under or in respect of the Letter of Credit.
(b) Each Participating Bank may assign all or any portion of its
rights under this Agreement, under the Letter of Credit or in any security
hereunder, including, without limitation, any instruments securing the
Account Party's obligations hereunder; provided that (i) no assignment by
any Participating Bank may be made to any Person, other than to another
Participating Bank, except with the prior written consent of the Issuing
Bank and the Account Party (which consent, in the case of the Account
Party, shall not be unreasonably withheld), (ii) any assignment shall be of
a constant and not a varying percentage of all of the assignor's rights and
obligations hereunder and (iii) the parties to each such assignment shall
execute and deliver to the Agent a Participation Assignment, together with
a processing fee of $3,000. Upon receipt of a completed Participation
Assignment and the processing fee, the Agent will record in a register
maintained for such purpose the name of the assignee and the percentage
participation interest assigned by the assignor and assumed by the assignee
for purposes of the determination of such assignor's and assignee's
respective Participation Percentages. Upon such execution, delivery,
acceptance and recording, from and after the effective date specified in
each Participation Assignment, which effective date shall be at least five
Business Days after the execution thereof, the assignee shall, to the
extent of such assignment, become a party hereto and have all of the rights
and obligations of a Participating Bank hereunder and, to the extent of
such assignment, such assigning Participating Bank shall be released from
its obligations hereunder (without relieving such Participating Bank from
any liability for damages, costs and expenses suffered by the Issuing Bank
or the Account Party as a result of the failure by such Participating Bank
to perform its obligations hereunder).
(c) Each Participating Bank may grant participations to one or more
Persons in all or any part of, or any interest (undivided or divided) in,
such Participating Bank's rights and obligations under this Agreement (any
such Person being referred to hereinafter as a "Participant" and such
interests are collectively, referred to hereinafter as the "Rights");
provided, however, that (i) such Participating Bank's obligations under
this Agreement shall remain unchanged; (ii) any such Participant shall be
entitled to the benefits and cost protections provided for in Section 4.03
hereof on the same basis as if it were a Participating Bank hereunder;
(iii) the Account Party, the Agent and the Issuing Bank shall continue to
deal solely and directly with such Participating Bank in connection with
such Participating Bank's rights and obligations under this Agreement; and
(iv) no such Participant, other than an Affiliate of such Participating
Bank, shall be entitled to require such Participating Bank to take or omit
to take any action hereunder, unless such action or omission would have an
effect of the type described in subsections (c), (d) or (h) of Section
10.01 hereof.
(d) Notwithstanding anything contained in this Section 10.06 to the
contrary, the Issuing Bank and any Participating Bank may assign and pledge
all or any portion of the Advances (or participating interests therein)
owing to the Issuing Bank or such Participating Bank to any Federal Reserve
Bank (and its transferees) as collateral security pursuant to Regulation A
of the Board of Governors of the Federal Reserve System and any Operating
Circular issued by such Federal Reserve Bank. No such assignment shall
release the Issuing Bank or such Participating Bank from its obligations
hereunder.
SECTION 10.07. Relation of the Parties; No Beneficiary. No term,
provision or requirement, whether express or implied, of any Loan Document,
or actions taken or to be taken by any party thereunder, shall be construed
to create a partnership, association, or joint venture between such parties
or any of them. No term or provision of the Loan Documents shall be
construed to confer a benefit upon, or grant a right or privilege to, any
Person other than the parties hereto.
SECTION 10.08. Issuing Bank Not Liable. As between the Agent, the
Issuing Bank and the Participating Banks on the one hand, and the Account
Party on the other, the Account Party assumes all risks of the acts or
omissions of the Paying Agent, the Trustee and any other beneficiary or
transferee of the Letter of Credit with respect to its use of the Letter of
Credit. Neither the Agent, the Issuing Bank, any Participating Bank, nor
any of their respective officers or directors shall be liable or
responsible for: (a) the use which may be made of the Letter of Credit or
any acts or omissions of the Paying Agent, the Trustee and any other
beneficiary or transferee in connection therewith; (b) the validity,
sufficiency or genuineness of documents, or of any endorsement thereon,
even if such documents should prove to be in any or all respects invalid,
insufficient, fraudulent or forged; (c) payment by the Issuing Bank against
presentation of documents which do not comply with the terms of the Letter
of Credit, including failure of any documents to bear any reference or
adequate reference to the Letter of Credit; or (d) any other circumstances
whatsoever in making or failing to make payment under the Letter of Credit,
except that the Account Party shall have a claim against the Issuing Bank,
and the Issuing Bank shall be liable to the Account Party, to the extent of
any direct, as opposed to consequential, damages suffered by the Account
Party which the Account Party proves were caused by (i) the Issuing Bank's
willful misconduct or gross negligence, as determined by a court of
competent jurisdiction, in determining whether documents presented under
the Letter of Credit are genuine or comply with the terms of the Letter of
Credit or (ii) the Issuing Bank's willful or grossly negligent failure, as
determined by a court of competent jurisdiction, to make lawful payment
under the Letter of Credit after the presentation to it by the Paying Agent
of a draft and certificate strictly complying with the terms and conditions
of the Letter of Credit. In furtherance and not in limitation of the
foregoing, the Issuing Bank may accept original or facsimile (including
telecopy) sight drafts and accompanying certificates presented under the
Letter of Credit that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary.
SECTION 10.09. Confidentiality. In connection with the negotiation
and administration of this Agreement and the other Loan Documents, the
Account Party has furnished and will from time to time furnish to the
Agent, the Issuing Bank and the Participating Banks (each, a "Recipient")
written information which is identified to the Recipient when delivered as
confidential (such information, other than any such information which
(i) was publicly available, or otherwise known to the Recipient, at the
time of disclosure, (ii) subsequently becomes publicly available other than
through any act or omission by the Recipient or (iii) otherwise
subsequently becomes known to the Recipient other than through a Person
whom the Recipient knows to be acting in violation of his or its
obligations to the Account Party, being hereinafter referred to as
"Confidential Information"). The Recipient will not knowingly disclose any
such Confidential Information to any third party (other than to those
persons who have a confidential relationship with the Recipient), and will
take all reasonable steps to restrict access to such information in a
manner designed to maintain the confidential nature of such information, in
each case until such time as the same ceases to be Confidential Information
or as the Account Party may otherwise instruct. It is understood, however,
that the foregoing will not restrict the Recipient's ability to freely
exchange such Confidential Information with prospective assignees of or
participants in the Recipient's position herein, but the Recipient's
ability to so exchange Confidential Information shall be conditioned upon
any such prospective assignee's or participant's entering into an
understanding as to confidentiality similar to this provision. It is
further understood that the foregoing will not prohibit the disclosure of
any or all Confidential Information if and to the extent that such
disclosure may be required (i) by a regulatory agency or otherwise in
connection with an examination of the Recipient's records by appropriate
authorities, (ii) pursuant to court order, subpoena or other legal process
or (iii) otherwise, as required by law; in the event of any required
disclosure under clause (ii) or (iii), above, the Recipient agrees to use
reasonable efforts to inform the Account Party as promptly as practicable.
SECTION 10.10 Waiver of Jury Trial. The Account Party, the Agent,
the Issuing Bank, and the Participating Banks each hereby irrevocably
waives all right to trial by jury in any action, proceeding or counterclaim
arising out of or relating to this Agreement or any other Loan Document, or
any other instrument or document delivered hereunder or thereunder.
SECTION 10.11. Governing Law. This Agreement and the Pledge
Agreement shall be governed by, and construed in accordance with, the laws
of the State of New York. The Account Party, the Agent, the Issuing Bank
and each Participating Bank each (i) irrevocably submits to the
jurisdiction of any New York State Court or Federal court sitting in New
York City in any action arising out of any Loan Document, (ii) agrees that
all claims in such action may be decided in such court, (iii) waives, to
the fullest extent it may effectively do so, the defense of an inconvenient
forum and (iv) consents to the service of process by mail. A final
judgment in any such action shall be conclusive and may be enforced in
other jurisdictions. Nothing herein shall affect the right of any party to
serve legal process in any manner permitted by law or affect its right to
bring any action in any other court.
SECTION 10.12. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one and the
same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of
the date first above written.
THE ACCOUNT PARTY:
PUBLIC SERVICE COMPANY OF
NEW HAMPSHIRE
By /s/E.G. Vertefeuille
Title: Assistant Treasurer
THE AGENT AND ISSUING BANK:
BARCLAYS BANK PLC,
NEW YORK BRANCH,
as Agent and as Issuing Bank
By /s/Elizabeth Dempsey
Title: Associate Director
THE PARTICIPATING BANKS:
BARCLAYS BANK PLC,
NEW YORK BRANCH
By /s/Elizabeth Dempsey
Title: Associate Director
Participation Percentage: 12.406828962%
Address for Notices
Barclays Bank PLC
222 Broadway
New York, New York 10038
Attention: Elizabeth Dempsey
Telephone: (212) 412-2589
Fax: (212) 412-7575
THE BANK OF NOVA SCOTIA
By /s/Carolyn A. Lopez
Title: Representative
Participation Percentage: 12.395260053%
Address for Notices
The Bank of Nova Scotia
101 Federal Street
16th Floor
Boston, Massachusetts 02208
Attention: Carolyn Lopez
Telephone: (617) 737-6313
Fax: (617) 951-2177
CITIBANK, N.A.
By /s/S.J. Dimmick
Title: Vice President
Participation Percentage: 17.353364074%
Address for Notices
Citibank, N.A.
399 Park Avenue
4th Floor, Zone 21
New York, New York 10043
Attention: Susan Dimmick
Telephone: (212) 559-4205
Fax: (212) 832-9859
THE FIRST NATIONAL
BANK OF BOSTON
By /s/F.T. Smith
Title: Director
Participation Percentage: 20.658766754%
Address for Notices
The First National Bank of Boston
100 Federal Street
Mail Stop 01-15-04
Boston, Massachusetts 02110
Attention: Frank T. Smith
Telephone: (617) 434-3271
Fax: (617) 434-3652
Telex: 4996527
Answerback: NNBBUS33
UNION BANK
By /s/John C. Erickson
Title:Vice President
Participation Percentage: 8.263506702%
Address for Notices
Union Bank
445 S. Figueroa Street
15th Floor
Los Angeles, California 90071
Attention: John C. Erickson
Telephone: (213) 236-5224
Fax: (213) 236-4096
Telex: 188612
Answerback: UnionBk UT
WESTPAC BANKING CORP.
By /s/ Paul Miller
Title:Vice President
Participation Percentage: 20.658766754%
Address for Notices
Westpac Banking Corp.
225 West Washington Street
28th Floor
Chicago, Illinois 60606
Attention: Paul Miller
Telephone: (312) 630-5695
Fax: (312) 332-3527
Telex: 210103 VIA RCA
Answerback:
YASUDA TRUST AND
BANKING CO., LTD.,
NEW YORK BRANCH
By /s/Michael G. Haggarty
Title: Vice President
Participation Percentage: 8.263506702%
Address for Notices
Yasuda Trust and Banking Co., Ltd.
New York Branch
One World Trade Center
Suite 8871
New York, New York 10048
Attention: Denise M. Furey
Telephone: (212) 432-6780
Fax: (212) 432-0289
Telex: 12445
Answerback: YASUDA
SCHEDULE I
APPLICABLE LENDING OFFICES
Name of Parti- Domestic CD Lending Eurodollar
cipating Bank Lending Office Office Lending Office
Barclays Bank PLC 75 Wall Street Same as Barclays Bank
PLC,
New York Branch New York, NY 10265 Domestic Nassau Branch
Att: Customer Service Lending c/o Barclays Bank
Unit Office PLC,
Tel: (212) 412-3363 New York Branch
Fax: (212) 412-3080 75 Wall Street
New York, NY
10265
Citibank, N.A. 399 Park Avenue Same as Same as Domestic
New York, NY 10043 Domestic Lending Office
Att: Susan Dimmick Lending
Tel: (212) 559-4205 Office
Fax: (212) 832-9859
The Bank of 101 Federal Street 165 Broadway Same as Domestic
Nova Scotia 16th Floor New York, NY Lending Office
Boston, MA 02208 10006
Fax: (617) 951-2177
The First 100 Federal Street Same as Same as Domestic
National Bank Boston, MA 02106 Domestic Lending Office
of Boston Att: Debbie Dobbins Lending
Tel: (617) 434-5455 Office
Fax: (617) 434-3652
Union Bank 445 South Figueroa Same as Same as Domestic
Street Domestic Lending Office
Los Angeles, CA Lending
90071 Office
Att: Chris A. Behrman
Tel: (213) 236-7285
Fax: (213) 236-4096
Westpac Banking 225 West Washington Same as Same as Domestic
Corporation Street Domestic Lending Office
28th Floor Lending
Chicago, IL 60606 Office
Tel: (312) 630-7887
Fax: (312) 332-3527
Yasuda Trust and One World Trade Ctr. Same as Same as Domestic
Banking Co., Ltd. Suite 8871 Domestic Lending Office
New York Branch New York, NY 10048 Lending
Att: Administration Office
Dept.
SCHEDULE III
INVESTMENTS
SCHEDULE IV
PENDING ACTIONS
EXHIBIT 1.01A
FORM OF
IRREVOCABLE LETTER OF CREDIT
NO. _________________
October __, 1992
Security Pacific National Trust Company (New York)
2 Rector Street
New York, New York 10006
Attention: Corporate Trust Division
Dear Sir or Madam:
We hereby establish, at the request and for the account of Public
Service Company of New Hampshire (the "Account Party"), in your favor, as
paying agent (the "Paying Agent") under that certain Series D Loan and
Trust Agreement, dated as of May 1, 1991 (the "Indenture"), by and among
the Business Finance Authority (formerly The Industrial Development
Authority) of the State of New Hampshire (the "Issuer"), the Account Party
and State Street Bank and Trust Company, as trustee (the "Trustee"),
pursuant to which $114,500,000 in aggregate principal amount of the
Issuer's Pollution Control Revenue Bonds (Public Service Company of New
Hampshire Project - 1991 Taxable Series D) (the "Bonds"), have been issued,
our Irrevocable Letter of Credit No. _______________, in the amount of
US$121,014,000.00 (ONE HUNDRED TWENTY-ONE MILLION FOURTEEN THOUSAND AND NO
ONE-HUNDREDTHS UNITED STATES DOLLARS) (subject to reduction and
reinstatement as provided below).
(1) Credit Termination Date. This Letter of Credit shall expire on
the earliest to occur of (i) October 1, 1995 (the "Stated Termination
Date"), (ii) the date upon which we honor a draft accompanying a written
and completed certificate signed by you in substantially the form of
Exhibit 2 attached hereto, and stating therein that such draft is the final
draft to be drawn under this Letter of Credit and that, upon the honoring
of such draft, this Letter of Credit will expire in accordance with its
terms, (iii) the date upon which we receive a written certificate signed by
you and stating therein that no Bonds entitled to the benefits of this
Letter of Credit (as determined in accordance with the Indenture)
("Eligible Bonds") are "outstanding" under the Indenture, (iv) the fifth
business day following receipt by you and the Trustee of written notice
from us that an Event of Default (as defined below) has occurred under the
Reimbursement Agreement (as defined below) and of our determination to
terminate this Letter of Credit on such fifth business day and (v) the date
upon which we receive a written certificate signed by you and stating
therein that a substitute or replacement Credit Facility (as defined in the
Indenture) has been provided pursuant to Section 317 of the Indenture (such
earliest date being the "Credit Termination Date").
As used herein, the term "business day" shall mean any day of the year
(i) that is not a Sunday or legal holiday or a day on which banking
institutions are authorized pursuant to law to close, (ii) that is not a
day on which the corporate trust office of the First Mortgage Bond Trustee
(as defined in the Indenture) is not open for business, (iii) that is a day
on which banks are not required or authorized to close in New York City and
(iv) that is a day on which banking institutions in all of the cities in
which the principal offices of the Trustee, the Paying Agent and the
Remarketing Agent (as defined in the Indenture) are located are not
required or authorized to remain closed and on which the New York Stock
Exchange is not closed.
As used herein "Reimbursement Agreement" shall mean the Series D
Letter of Credit and Reimbursement Agreement, dated as of October 1, 1992,
between the Account Party, us and certain Participating Banks referred to
therein, and the term "Event of Default" shall mean an "Event of Default"
as that term is defined in the Reimbursement Agreement.
(2) Principal, Interest and Premium Components. The aggregate amount
which may be drawn under this Letter of Credit, subject to reductions in
amount and reinstatement as provided below, is US$121,014,000.00 (ONE
HUNDRED TWENTY-ONE MILLION FOURTEEN THOUSAND AND NO ONE-HUNDREDTHS UNITED
STATES DOLLARS), of which the aggregate amounts set forth below may be
drawn as indicated.
(i) An aggregate amount not exceeding US$114,500,000.00 (ONE
HUNDRED FOURTEEN MILLION FIVE HUNDRED THOUSAND AND NO ONE-HUNDREDTHS
UNITED STATES DOLLARS), as such amount may be reduced and reinstated
as provided below, may be drawn in respect of payment of principal
(whether upon scheduled or accelerated maturity, or upon redemption)
of Eligible Bonds or the portion of the purchase price of Eligible
Bonds corresponding to principal (the "Principal Component").
(ii) An aggregate amount not exceeding US$6,514,000.00 (SIX
MILLION FIVE HUNDRED FOURTEEN THOUSAND AND NO ONE-HUNDREDTHS UNITED
STATES DOLLARS), as such amount may be reduced and reinstated as
provided below, may be drawn in respect of payment of (A) accrued and
unpaid interest on Eligible Bonds not in the Flexible Mode (as defined
in the Indenture) or that portion of the redemption price or purchase
price of such Eligible Bonds corresponding to accrued and unpaid
interest, but not more than an amount equal to accrued and unpaid
interest on such Eligible Bonds for up to a maximum of 128 days
immediately preceding the date of such drawing and (B) unpaid interest
(whether accrued or to accrue) on Eligible Bonds in the Flexible Mode
or that portion of the redemption price or purchase price of such
Eligible Bonds corresponding to such interest, but not more than an
amount equal to such interest on such Eligible Bonds for up to a
maximum of 128 days immediately preceding the next Purchase Date (as
defined in the Indenture) for each such Eligible Bond (or, if interest
on any such Eligible Bond was not paid on the most recent Purchase
Date for such Bond, for up to a maximum of 128 days immediately
preceding the date of such drawing), calculated, in each case referred
to in the foregoing clause (A) or clause (B) at a maximum rate of
sixteen percent (16%) per annum, or such lesser rate of interest as
shall equal the Maximum Interest Rate (as defined in the Indenture) in
effect under the Indenture with respect to such Eligible Bonds, and in
any case calculated on the basis of actual days elapsed divided by 360
(the "Interest Component").
(iii) An aggregate amount not exceeding US$0.00 (ZERO UNITED
STATES DOLLARS) may be drawn in respect of premium on Eligible Bonds
(the "Premium Component"). If, subsequent to the date hereof, the
Premium Component shall be increased by us at the request of the
Account Party, the Premium Component shall be subject to reduction as
provided below, and amounts drawn in respect thereof shall not be
subject to reinstatement.
(3) Drawings. Funds under this Letter of Credit are available to you
against (i) your draft, stating on its face: "Drawn under Irrevocable
Letter of Credit No. __________________, dated October __, 1992", and (ii)
the appropriate certificate specified below, purportedly executed by you
and appropriately completed.
Exhibit Setting Forth
Type of Drawing Form of Certificate Required
Tender Drawing Exhibit 1
(as hereinafter defined)
Redemption/Mandatory Exhibit 2
Purchase Drawing
(as hereinafter defined)
Interest Drawing Exhibit 3
(as hereinafter
defined)
Drafts and certificates hereunder shall be dated the date of
presentation and shall be presented at our office located at 222 Broadway,
12th Floor, New York, New York 10038, Attention: Central Loan
Administration Department (or at such other office as we may designate by
written notice to you). Presentation of such drafts and certificates may
be made (a) by physical presentation of such drafts and certificates or (b)
by facsimile transmission of such drafts and certificates received by us at
(212) 412-3080 (or at such other number as we may designate by written
notice to you) with prior telephone notice to us at (212) _____________,
Attention: ______________________, (or at such other number as we may
designate by written notice to you) that such presentation is to be made by
facsimile transmission and with the original executed drafts and
certificates to be received by us not later than our close of business on
the next business day, it being understood that payments hereunder shall be
made upon receipt by us of such facsimile transmission; provided, however,
that presentations of drafts and certificates relating to Tender Drawings
in respect of Eligible Bonds in the Flexible Mode shall in all instances be
made in accordance with the foregoing clause (b). Drafts drawn under and
in strict compliance with the terms of this Letter of Credit will be duly
honored by us upon presentation thereof in accordance with this Paragraph 3
if presented on or prior to 4:00 P.M. (New York City time) on the Credit
Termination Date as follows:
(i) Tender Drawings; Flexible Mode. In the case of drafts and
certificates relating to Tender Drawings in respect of Eligible Bonds
in the Flexible Mode presented in accordance with the foregoing clause
(b):
(A) if such drafts and certificates are presented as
aforesaid at or prior to 1:30 P.M. (New York City time) on a
business day, and provided that such drafts and certificates
strictly conform to the requirements of this Letter of Credit, we
will initiate a wire transfer of the amount so drawn to your
account indicated below at or prior to 3:30 P.M. (New York City
time) on the same business day;
(B) if such drafts and certificates are presented as
aforesaid after 1:30 P.M. but at or prior to 4:00 P.M. (New York
City time) on a business day, and provided that such drafts and
certificates strictly conform to the requirements of this Letter
of Credit, we will initiate a wire transfer of the amount so
drawn to your account indicated below at or prior to 10:00 A.M.
on the business day next succeeding the business day on which
such drafts and certificates were presented (notwithstanding that
such day of presentation may have been the Credit Termination
Date); and
(C) if such drafts and certificates are presented as
aforesaid after 4:00 P.M. (New York City time) on a business day,
and provided that such drafts and certificates strictly conform
to the requirements of this Letter of Credit, we will initiate a
wire transfer of the amount so drawn to your account indicated
below at or prior to 1:00 P.M. (New York City time) on the
business day next succeeding the business day on which such
drafts and certificates were presented (notwithstanding that such
day of presentation may have been the Credit Termination Date);
and
(ii) All Other Drawings: In the case of any other drafts and
certificates:
(A) if such drafts and certificates are presented as
aforesaid at or prior to 4:00 P.M. (New York City time) on a
business day, and provided that such drafts strictly conform to
the requirements of this Letter of Credit, we will initiate a
wire transfer of the amount so drawn to your account indicated
below at or prior to 10:00 A.M. (New York City time) on the
business day next succeeding the business day on which such
drafts and certificates were presented (notwithstanding that such
day of presentation may have been the Credit Termination Date);
and
(B) if such drafts and certificates are presented as
aforesaid after 4:00 P.M. (New York City time) on a business day,
and provided that such drafts and certificates strictly conform
to the requirements of this Letter of Credit, we will initiate a
wire transfer of the amount so drawn to your account indicated
below at or prior to 1:00 P.M. (New York City time) on the
business day next succeeding the business day on which such
drafts and certificates were presented (notwithstanding that such
day of presentation may have been the Credit Termination Date).
Wire transfers of funds paid in respect of any drawing hereunder shall be
made to your Account No. ____________ at ____________________________,
reference: _________________________, Attention: _________________, or to
such other account as you may from time to time specify to us in writing.
All payments made by us under this Letter of Credit will be made with our
own funds and not with any funds of the Account Party or the Issuer.
(4) Reductions. The Interest Component shall be reduced immediately
following our honoring any draft drawn hereunder to pay unpaid interest on
Eligible Bonds or to pay that portion of the purchase price or redemption
price corresponding to unpaid interest on Eligible Bonds, in each case by
an amount equal to the amount of such draft (any such drawing being an
"Interest Drawing"). The Principal Component shall be reduced immediately
following our honoring any draft drawn hereunder: (i) pursuant to Section
308(c)(ii) of the Indenture to pay that portion of purchase price
corresponding to principal of Eligible Bonds that are (A) subject to
mandatory tender for purchase pursuant to Section 301(d)(iii),
301(e)(iv)(B) or 301(f)(iii) of the Indenture or (B) tendered for purchase
by the holders thereof pursuant to Section 301(e)(iii) of the Indenture
(any such drawing in respect of the circumstances referred to in this
clause (i) being a "Tender Drawing"), (ii) pursuant to Section 308(c)(i) of
the Indenture to pay the principal of Eligible Bonds or that portion of the
redemption price of Eligible Bonds corresponding to principal, whether at
stated maturity, upon acceleration or upon redemption, or (iii) pursuant to
Section 308(c)(ii) of the Indenture to pay that portion of the purchase
price corresponding to principal of Eligible Bonds that are subject to
mandatory tender for purchase pursuant to Section 301(e)(iv)(A) of the
Indenture (any such drawing in respect of the circumstances referred to in
the foregoing clause (ii) or in this clause (iii) being a
"Redemption/Mandatory Purchase Drawing"), in each such case by an amount
equal to the amount of such draft. The Premium Component shall be reduced
immediately following our honoring any draft drawn hereunder to pay premium
on Eligible Bonds in connection with a Redemption/Mandatory Purchase
Drawing, by an amount equal to the amount of such draft.
Additionally, upon receipt of a Notice of Reduction in the form
of Exhibit 4 to this Letter of Credit purportedly executed by you, we will
reduce the Principal Component, Interest Component and Premium Component to
the amounts therein stated.
(5) Reinstatement. The Interest Component and the Principal
Component shall, from time to time, be reinstated by us in accordance with,
and only to the extent provided in, the following subparagraphs (i) and
(ii). In no event shall reductions in the Premium Component be reinstated.
(i) Interest Component. Reductions in the Interest Component
resulting from Interest Drawings shall be reinstated as follows:
(A) Immediately following each drawing hereunder to pay
unpaid interest on Eligible Bonds in the Flexible Mode or to pay
that portion of purchase price, but not redemption price,
corresponding to unpaid interest on Eligible Bonds in the
Flexible Mode, the amount so drawn shall be automatically
reinstated to the Interest Component unless, not later than the
business day preceding such drawing you shall have received
written notice from us that we will not reinstate the Interest
Component in the amount of such drawing. On the fifth day
following each drawing hereunder to pay accrued and unpaid
interest on Eligible Bonds that are not in the Flexible Mode, or
to pay that portion of purchase price, but not redemption price,
corresponding to accrued and unpaid interest on Eligible Bonds
that are not in the Flexible Mode, the amount so drawn shall be
automatically reinstated to the Interest Component, unless you
shall have theretofore received written notice from us that we
will not reinstate the Interest Component in the amount of such
drawing. Any notice of non-reinstatement delivered pursuant to
this subparagraph (i)(A) shall be in writing and shall be
delivered to you by hand delivery or facsimile transmission.
(B) If, subsequent to any such delivery of a notice of non-
reinstatement as aforesaid, we shall deliver to you, by hand
delivery or facsimile transmission, a Notice of Reinstatement in
the form of Exhibit 5 hereto, then, upon such delivery to you,
the Interest Component shall be immediately reinstated to the
extent specified in such Notice of Reinstatement.
(C) In no event shall the Interest Component be reinstated
to an amount in excess of 128 days' interest on Eligible Bonds,
computed at the rate of 16% per annum, or such lesser rate of
interest as shall equal the Maximum Interest Rate (as defined in
the Indenture) in effect under the Indenture with respect to such
Eligible Bonds, in any case on the basis of actual days elapsed
divided by 360.
(ii) Principal Component. Reductions in the Principal Component
resulting from Redemption/Mandatory Purchase Drawings shall in no
event be reinstated. Reductions in the Principal Component resulting
from Tender Drawings shall be reinstated as follows:
(A) Immediately upon receipt by us of proceeds from the
remarketing of Pledged Bonds (as defined in the Indenture), or of
written notice from you that you have received such proceeds (or
a window receipt guaranteeing same day payment in immediately
available funds of such proceeds as contemplated by Section
312(a) of the Indenture), the Principal Component shall be
reinstated automatically by the amount of such proceeds.
(B) Immediately upon your receipt from us, by hand delivery
or facsimile transmission, of a Notice of Reinstatement in the
form of Exhibit 5 hereto, the Principal Component shall be
immediately reinstated to the extent specified in such Notice of
Reinstatement.
(C) In no event shall the Principal Component be reinstated
to an amount in excess of the aggregate principal amount of
Eligible Bonds then outstanding under the Indenture.
Any Notice of Reinstatement delivered to you in the form set forth in
Exhibit 5 hereto, whether delivered pursuant to subparagraph (i) or
subparagraph (ii), above, may be combined, in a single such Notice, with
any other Notice of Reinstatement delivered pursuant to the other such
subparagraph.
(6) Notices. Communications (other than drawings) with respect to
this Letter of Credit shall be in writing and shall be addressed to us at
222 Broadway, 12th Floor, New York, New York 10038, Attention: Central
Loan Administration Department (or at such other office as we may designate
by written notice to you) or by facsimile transmission received by us at:
(212) 412-3080 (or at such other telephone number as we may designate by
written notice to you) specifically referring to the number of this Letter
of Credit.
(7) Transfer. This Letter of Credit is transferable in its entirety
(but not in part) to any transferee who has succeeded you as Paying Agent
under the Indenture and may be successively so transferred. Transfer of
the available balance under this Letter of Credit to such transferee shall
be effected by the presentation to us of this Letter of Credit accompanied
by a certificate substantially in form set forth in Exhibit 6.
(8) Governing Law, Etc. Except as otherwise provided herein, this
Letter of Credit shall be governed by and construed in accordance with the
Uniform Customs and Practices for Documentary Credits (1983 Revision)
Publication No. 400 of the International Chamber of Commerce ("UCP") and,
to the extent not inconsistent with the UCP, the laws of the State of New
York, including the Uniform Commercial Code as in effect in the State of
New York. This Letter of Credit sets forth in full our undertaking, and,
except as expressly set forth herein, such undertaking shall not in any way
be modified, amended, amplified or limited by reference to any document,
instrument or agreement referred to herein (including, without limitation,
the Bonds, the Indenture and the Reimbursement Agreement), except only the
certificates and the drafts referred to herein; and any such reference
shall not be deemed to incorporate herein by reference any document,
instrument or agreement except for such certificates and such drafts.
Whenever and wherever the terms of this Letter of Credit shall refer to the
purpose of a draft hereunder, or the provisions of any agreement or
document pursuant to which such draft may be presented hereunder, such
purpose or provisions shall be conclusively determined by reference to the
certificate accompanying such draft; in furtherance of this sentence,
whether any drawing is in respect of payment of regularly scheduled
interest on the Bonds or of principal of or interest on the Bonds upon
scheduled or accelerated maturity or is a Tender Drawing or a
Redemption/Mandatory Purchase Drawing shall be conclusively determined by
reference to the certificate accompanying such drawing.
Very truly yours,
BARCLAYS BANK PLC,
NEW YORK BRANCH
By ___________________________________
Title:
By ___________________________________
Title:
EXHIBIT 1
TO THE LETTER OF CREDIT
CERTIFICATE FOR TENDER DRAWING
The undersigned, a duly authorized officer of __________________, (the
"Paying Agent"), hereby certifies as follows to Barclays Bank PLC, New York
Branch (the "Bank"), with reference to Irrevocable Letter of Credit No.
_________________ (the "Letter of Credit") issued by the Bank in favor of
the Paying Agent. Terms defined in the Letter of Credit and used but not
defined herein shall have the meanings given them in the Letter of Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for the
holders of the Bonds.
(2) The Paying Agent is making a Tender Drawing under the Letter of
Credit in the amount of $_______________ pursuant to Section 308(c)(ii) of
the Indenture to pay that portion of the purchase price corresponding to
principal of Eligible Bonds that are
[subject to mandatory tender for purchase pursuant to Section
[301(d)(iii)] [301(e)(iv)(B)] [301(f)(iii)] of the Indenture.]
[tendered for purchase by the holders thereof pursuant to Section
301(e)(iii) of the Indenture.]
(3) The amount of purchase price corresponding to principal of
Eligible Bonds and with respect to the payment of which the Paying Agent,
pursuant to the foregoing Sections of the Indenture, is drawing under the
Letter of Credit, is as follows, and the amount of the draft accompanying
this Certificate does not exceed such amount:
Principal: $__________________
(4) The amount of the draft accompanying this Certificate being drawn
in respect of purchase price corresponding to principal of Eligible Bonds,
as indicated in paragraph (3), above, does not exceed the Principal
Component of the Letter of Credit. The amount of the draft accompanying
this Certificate in respect of purchase price corresponding to principal of
such Bonds has been computed in accordance with the terms and conditions of
such Eligible Bonds and the Indenture.
(5) No proceeds of this drawing will be applied to the payment of
purchase price of any Bonds that are not Eligible Bonds, including any
Pledged Bonds (as defined in the Indenture), any Company Bonds (as defined
in the Indenture) and any Bonds in the Fixed Rate Mode (as defined in the
Indenture).
[(6) The Eligible Bonds in respect of which this drawing is being made
are Eligible Bonds in the Flexible Mode, and payment of this drawing shall
be made in accordance with Paragraph 3(i) of the Letter of Credit.]
[(6) The Eligible Bonds in respect of which this drawing is being made
are not Eligible Bonds in the Flexible Mode, and payment of this drawing
shall be made in accordance with Paragraph 3(ii) of the Letter of Credit].
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this
Certificate as of the ________ day of _______________, 19___.
[NAME OF PAYING AGENT],
as Paying Agent
By ___________________________________
Title:
EXHIBIT 2
TO THE LETTER OF CREDIT
CERTIFICATE FOR REDEMPTION/
MANDATORY PURCHASE DRAWING
The undersigned, a duly authorized officer of __________________, (the
"Paying Agent"), hereby certifies as follows to Barclays Bank PLC, New York
Branch (the "Bank"), with reference to Irrevocable Letter of Credit No.
_____________________ (the "Letter of Credit") issued by the Bank in favor
of the Paying Agent. Terms defined in the Letter of Credit and used but
not defined herein shall have the meanings given them in the Letter of
Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for the
holders of the Bonds.
(2) The Paying Agent is making a Redemption/Mandatory Purchase
Drawing under the Letter of Credit in the amount of $______________
[pursuant to Section 308(c)(i) and Section 605 of the Indenture
to pay the principal of Eligible Bonds due pursuant to the
Indenture upon maturity or as a result of acceleration of such
Eligible Bonds in accordance with the Indenture and the terms of
such Eligible Bonds.]
[pursuant to Section 308(c)(i) of the Indenture to pay that
portion of the redemption price corresponding to principal of
[and premium on] Eligible Bonds due pursuant to the Indenture
upon redemption of such Eligible Bonds in accordance with the
Indenture and the terms of such Eligible Bonds.]
[pursuant to Section 308(c)(ii) of the Indenture to pay that
portion of the purchase price of Eligible Bonds corresponding to
principal that are subject to mandatory tender for purchase
pursuant to Section 301(e)(iv)(A) of the Indenture.]
(3) The amount of [principal of] [redemption price corresponding to
principal of] [and premium on] [purchase price corresponding to principal
of] Eligible Bonds which is due and payable and with respect to the payment
of which the Paying Agent, pursuant to the foregoing Section[s] of the
Indenture, is to draw under the Letter of Credit is as follows, and the
amount of the draft accompanying this Certificate does not exceed such
amount:
Principal: $__________________
[Premium: $__________________]
(4) The amount of the draft accompanying this Certificate being drawn
in respect of payment of [principal] [redemption price corresponding to
principal] [purchase price corresponding to principal] of Eligible Bonds,
as indicated in paragraph (3), above, does not exceed the Principal
Component of the Letter of Credit. [The amount of the draft accompanying
this Certificate being drawn in respect of that portion of the redemption
price of Eligible Bonds corresponding to premium, as indicated in paragraph
(3), above, does not exceed the Premium Component of the Letter of Credit.]
The amount of the draft accompanying this Certificate in respect of payment
of [principal] [redemption price corresponding to principal] [and premium]
[purchase price corresponding to principal] of such Eligible Bonds has been
computed in accordance with the terms and conditions of such Eligible Bonds
and the Indenture.
(5) No proceeds of this drawing will be applied to the payment of
principal, redemption price (including premium, if any) or purchase price
of any Bonds that are not Eligible Bonds, including any Pledged Bonds (as
defined in the Indenture), any Company Bonds (as defined in the Indenture),
and any Bonds in the Fixed Rate Mode (as defined in the Indenture).
(6) Payment of this drawing shall be made in accordance with
Paragraph 3(ii) of the Letter of Credit.
[(7) The draft accompanying this Certificate is the final draft to be
drawn under the Letter of Credit, and, upon the honoring of such draft, the
Letter of Credit will expire in accordance with its terms.]
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this
Certificate as of the ________ day of _______________, 19___.
[NAME OF PAYING AGENT],
as Paying Agent
By ___________________________________
Title:
EXHIBIT 3
TO THE LETTER OF CREDIT
CERTIFICATE FOR INTEREST DRAWING
The undersigned, a duly authorized officer of __________________, (the
"Paying Agent"), hereby certifies as follows to Barclays Bank PLC, New York
Branch (the "Bank"), with reference to Irrevocable Letter of Credit No.
___________ (the "Letter of Credit") issued by the Bank in favor of the
Paying Agent. Terms defined in the Letter of Credit and used but not
defined herein shall have the meanings given them in the Letter of Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for the
holders of the Bonds.
(2) The Paying Agent is making a drawing under the Letter of Credit
in the amount of $_______________ with respect to [the payment of interest]
[the payment of the portion of redemption price corresponding to interest]
[the payment of the portion of purchase price corresponding to interest] on
Eligible Bonds in accordance with the Indenture.
(3) The amount of [interest] [redemption price corresponding to
interest] [purchase price corresponding to interest] on Eligible Bonds that
is due and owing is as follows, and the amount of the draft accompanying
this Certificate does not exceed such amount:
Interest: __________________
(4) The amount of the draft accompanying this Certificate being drawn
in respect of payment of [interest] [redemption price corresponding to
interest] [purchase price corresponding to interest] on Eligible Bonds, as
indicated in paragraph (3), above, does not exceed the Interest Component
of the Letter of Credit. The amount of the draft accompanying this
Certificate in respect of payment of [interest] [redemption price
corresponding to interest] [purchase price corresponding to interest] on
Eligible Bonds has been computed in accordance with the terms and
conditions of such Eligible Bonds and the Indenture.
(5) Payment of this drawing shall be made in accordance with
Paragraph 3(ii) of the Letter of Credit.
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this
Certificate as of the ________ day of _______________, 19___.
[NAME OF PAYING AGENT],
as Paying Agent
By ___________________________________
Title:
EXHIBIT 4
TO THE LETTER OF CREDIT
NOTICE OF REDUCTION
The undersigned, a duly authorized officer of _____________________,
(the "Paying Agent"), hereby certifies as follows to Barclays Bank PLC, New
York Branch (the "Bank"), with reference to Irrevocable Letter of Credit
No. _____________________ (the "Letter of Credit") issued by the Bank in
favor of the Paying Agent. Terms defined in the Letter of Credit and used
but not defined herein shall have the meanings given them in the Letter of
Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for
the holders of the Bonds.
(2) As of the date hereof, the aggregate principal amount of
Eligible Bonds (including for this purpose all Pledged Bonds and all
Company Bonds) outstanding is
Principal: $__________________
(3) You are hereby directed to reduce the [Principal] [Premium]
[and] [Interest] Components of the Letter of Credit as follows:
[The Principal Component of the Letter of Credit is reduced
to $__________________.]
[The Premium Component of the Letter of Credit is reduced to
$__________________.]
[The Interest Component of the Letter of Credit is reduced
to $__________________.]
IN WITNESS WHEREOF, the Paying Agent has executed and delivered
this Certificate as of the ________ day of _______________, 19___.
[NAME OF PAYING AGENT],
as Paying Agent
By ___________________________________
Title:
EXHIBIT 5
TO THE LETTER OF CREDIT
NOTICE OF REINSTATEMENT
The undersigned, a duly authorized officer of Barclays Bank PLC, New York
Branch (the "Bank"), hereby gives the following notice to
_________________, as paying agent (the "Paying Agent"), with reference to
Irrevocable Letter of Credit No. __________________ (the "Letter of
Credit") issued by the Bank in favor of the Paying Agent. Terms defined in
the Letter of Credit and used but not defined herein have the meanings
given them in the Letter of Credit.
The Bank hereby notifies you that:
[1.] [Pursuant to Paragraph 5(i)(B) of the Letter of Credit and Section
2.04(b)(ii) of the Reimbursement Agreement, the Interest Component has
been reinstated by $________________.]
[2.] [Pursuant to Paragraph 5(ii)(B) of the Letter of Credit and Section
2.04(c) of the Reimbursement Agreement, the Principal Component has
been reinstated by $_________________.]
IN WITNESS WHEREOF, the Bank has executed and delivered this Notice of
Reinstatement as of the ________ day of _______________, 19___
BARCLAYS BANK PLC,
NEW YORK BRANCH
By ___________________________________
Title:
EXHIBIT 6
TO THE LETTER OF CREDIT
INSTRUCTIONS TO TRANSFER
__________________, 19___
Re: Irrevocable Letter of Credit No. __________________
Gentlemen:
The undersigned, as Paying Agent under that certain Series D Loan and
Trust Agreement, dated as of May 1, 1991 (the "Indenture"), by and among
the Business Finance Authority (formerly The Industrial Development
Authority) of the State of New Hampshire (the "Issuer"), Public Service
Company of New Hampshire and the State Street Bank and Trust Company, as
Trustee, is named as beneficiary in the Letter of Credit referred to above
(the "Letter of Credit"). The Transferee named below has succeeded the
undersigned as Paying Agent under such Indenture.
___________________________________
(Name of Transferee)
___________________________________
(Address)
Therefore, for value received, the undersigned hereby irrevocably
instructs you to transfer to such Transferee all rights of the undersigned
to draw under the Letter of Credit.
Such Transferee shall hereafter have the sole rights as beneficiary
under the Letter of Credit; provided, however, that no rights shall be
deemed to have been transferred to such Transferee until such transfer
complies with the requirements of the Letter of Credit pertaining to
transfers.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Certificate as of the ________ day _______________, 19___.
[NAME OF RETIRING PAYING AGENT],
as Paying Agent
By ___________________________________
Title:
The undersigned, [Name of Transferee], hereby accepts the
foregoing transfer of rights under the Letter of Credit.
[Name of Transferee]
By ___________________________________
Title:
Address of Principal
Corporate Trust Office:
[insert address]
EXHIBIT 1.01B
PARTICIPATION ASSIGNMENT
Dated _________________, 19__
Reference is made to the Letter of Credit and Reimbursement Agreement,
dated as of October 1, 1992 (said Agreement, as it may hereafter be amended
or otherwise modified from time to time, being the "Agreement"; unless
otherwise defined herein terms defined in the Agreement are used herein
with the same meaning), among Public Service Company of New Hampshire (the
"Account Party"), Barclays Bank PLC, New York Branch ("Barclays"), as
Issuing Bank, the Participating Banks named therein and from time to time
parties thereto, and Barclays, as Agent. Pursuant to the Agreement,
______________ (the "Assignor") has purchased a participation from the
Issuing Bank in and to the Letter of Credit and each payment thereunder and
demand loan made by the Issuing Bank and has committed to make Advances to
the Account Party.
The Assignor and ________________ (the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns, without recourse, to the
Assignee, and the Assignee hereby purchases and assumes from the Assignor,
without recourse to the Assignor that portion set forth in Section 1(c) of
Schedule 1 hereto (the "Assigned Interest") of the Assignor's rights and
obligations under the Agreement and the Pledge Agreement, including,
without limitation, the participation purchased by the Assignor pursuant to
Section 3.07 of the Agreement in respect of unreimbursed amounts and demand
loans owing from time to time to the Issuing Bank, the Commitment of the
Assignor to make Advances and the Advances outstanding on the Effective
Date (as hereinafter defined). Such Assigned Interest represents the
percentage interest specified in Section 2(b) of Schedule 1 of all
outstanding rights and obligations of the Participating Banks under the
Agreement, and, after giving effect to such sale and assignment, the
Assignee's and Assignor's Participation Percentages will be as set forth in
Sections 2(b) and 2(c), respectively, of Schedule 1. The effective date of
this sale and assignment shall be the date specified in Section 3 of
Schedule 1 (the "Effective Date").
2. On the Effective Date, the Assignee will pay to the Assignor, in
same day funds, at such address and account as the Assignor shall advise
the Assignee, an amount equal to (1) the aggregate amount of unreimbursed
letter of credit payments, demand loans and Advances outstanding (as set
forth in Section 1 of Schedule 1) times (2) the Assigned Interest. From
and after the Effective Date, the Assignor agrees that the Assignee shall
be entitled to all rights, powers and privileges of the Assignor under the
Agreement and the Pledge Agreement to the extent of the Assigned Interest,
including without limitation (i) the right to receive all payments in
respect of the Assigned Interest for the period from and after the
Effective Date, whether on account of reimbursements, principal, interest,
fees, indemnities in respect of claims arising after the Effective Date,
increased costs, additional amounts or otherwise; (ii) the right to vote
and to instruct the Agent and the Issuing Bank under the Agreement based on
the Assigned Interest; (iii) the right to set-off and to appropriate and
apply deposits of the Account Party as set forth in the Agreement; and (iv)
the right to receive notices, requests, demands and other communications.
The Assignor agrees that it will promptly remit to the Assignee any amount
received by it in respect of the Assigned Interest (whether from the
Account Party, the Agent or otherwise) in the same funds in which such
amount is received by the Assignor.
3. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to
any statements, warranties or representations made in or in connection with
the Agreement or the Related Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the
Agreement, the Related Documents or any other instrument or document
furnished pursuant thereto; and (iii) makes no representation or warranty
and assumes no responsibility with respect to the financial condition of
the Account Party or the performance or observance by the Account Party of
any of its obligations under the Agreement, the Related Documents or any
other instrument or document furnished pursuant thereto.
4. The Assignee (i) confirms that it has received a copy of the
Agreement, together with copies of the financial statements referred to in
Section 6.01(e) thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter
into this Assignment; (ii) agrees that it will, independently and without
reliance upon the Agent, the Issuing Bank, the Assignor or any other
Participating Bank and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Agreement and the Related Documents;
(iii) appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers under the Agreement and the Pledge
Agreement as are delegated to the Agent by the terms thereof, together with
such powers as are reasonably incidental thereto; (iv) agrees that it will
perform in accordance with its terms all of the obligations which by the
terms of the Agreement are required to be performed by it as a
Participating Bank and (v) confirms that it has paid the processing fee
referred to in subsection 10.06(b) of the Agreement.
5. Following the execution of this Assignment, it will be delivered
to the Agent for acceptance and recording by the Agent. Upon such
acceptance and recording and receipt of the consent of the Issuing Bank
required pursuant to Section 10.06(b) of the Agreement (which shall be
evidenced by the Issuing Bank's execution of this Assignment on the
appropriate space on Schedule 1), as of the Effective Date, (i) the
Assignee shall be a party to the Agreement and, to the extent provided in
this Assignment, have the rights and obligations of a Participating Bank
thereunder and under the Pledge Agreement and (ii) the Assignor shall, to
the extent provided in this Assignment, relinquish its rights and be
released from its obligations under the Agreement and the Pledge Agreement.
6. Upon such acceptance, recording and consent, from and after the
Effective Date, the Agent shall make all payments under the Agreement in
respect of the interest assigned hereby (including, without limitation, all
payments of principal, interest and fees with respect thereto) to the
Assignee at its address set forth on Schedule 1 hereto. The Assignor and
Assignee shall make all appropriate adjustments in payments under the
Agreement for periods prior to the Effective Date directly between
themselves.
7. This Assignment shall be governed by, and construed in accordance
with, the laws of the State of New York.
8. This Assignment may be executed in counterparts by the parties
hereto, each of which counterpart when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the
same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment to
be executed by their respective officers thereunto duly authorized, as of
the date first above written, such execution being made on Schedule 1
hereto.
Schedule 1
to
Participation Assignment
Dated ____________, 19__
Section 1.
(a) Total Unreimbursed
Payments and demand loans $__________
(b) Total Advances: $__________
(c) Assigned Interest:1 __________%
1 Specify percentage to no more than 8 decimal points.
Section 2.
(a) Assignor's Participation
Percentage (immediately
prior to the effectiveness
of this Assignment) ___________%
(b) Assignee's Participation
Percentage2 (upon the
effectiveness of this
Assignment) ___________%
(c) Assignor's Participation
Percentage2 (upon
the effectiveness of
this Assignment) ___________%
2 The sum of the percentages set forth in Section 2(b) and (c) shall equal
the percentage set forth in Section 2(a).
Section 3.
Effective Date:3 __________, 19__
3 Such date shall be at least 5 Business Days after the execution of this
Assignment.
[NAME OF ASSIGNOR]
By______________________________
Title:
[NAME OF ASSIGNEE]
By______________________________
Title:
[Address]
Telecopier No._______________
Attention:___________________
Consented to this __ day
of ______________, ___
BARCLAYS BANK, PLC
NEW YORK BRANCH
as Issuing Bank
By__________________________
Title:
Accepted this __ day4
of _____________, ___
4 Not to be accepted without proof of Account Party's consent pursuant to
Section 10.06(b) of the Reimbursement Agreement.
BARCLAYS BANK, PLC,
New York Branch,
as Agent
By__________________________
Title:
APPLICABLE LENDING OFFICES
The Assignee's Applicable Lending Offices are as follows:
Domestic Lending Office:
CD Lending Office:
Eurodollar Lending Office:
EXHIBIT 1.01C
FIRST AMENDMENT
TO
SERIES D PLEDGE AGREEMENT
This FIRST AMENDMENT, dated as of October 1, 1992 (this "Amendment"), to
the SERIES D PLEDGE AGREEMENT, dated as of May 1, 1991 ("the Existing
Agreement", and, as amended by this Amendment, the "Amended Agreement") is
made by and among:
(i) Public Service Company of New Hampshire, a corporation duly
organized and validly existing under the laws of the State of New
Hampshire (the "Account Party");
(ii) Citibank, N.A., as the "Issuing Bank" under the Existing Agreement
(the "Retiring Issuing Bank"); and
(iii) Barclays Bank PLC, New York Branch ("Barclays"), as the
"Issuing Bank" under the Reimbursement Agreement hereinafter
referred to (the "Issuing Bank");
for the benefit of the Issuing Bank and
(iv) The Agent (as defined therein) and the Participating Banks (as
defined therein) from time to time party to such Reimbursement
Agreement.
PRELIMINARY STATEMENT
The Account Party was previously reorganized under Chapter 11 of the
Bankruptcy Code pursuant to that certain Third Amended Joint Plan of
Reorganization of the Account Party, dated December 28, 1989 as confirmed by
order of the United States Bankruptcy Court for the District of New Hampshire
on April 20, 1990. Such reorganization (the "Reorganization") became
effective on May 16, 1991.
In order to finance, in part, the Reorganization, the Business Finance
Authority (formerly The Industrial Development Authority) of the State of New
Hampshire (the "Issuer") has issued, pursuant to a Series D Loan and Trust
Agreement, dated as of May 1, 1991 (as supplemented or amended from time to
time with the written consent of the Issuing Bank, the "Indenture"), by and
among the Issuer, the Account Party and State Street Bank and Trust Company,
as trustee (such entity, or its successor as trustee, being the "Trustee"),
$114,500,000 aggregate principal amount of The Industrial Development
Authority of the State of New Hampshire Pollution Control Revenue Bonds
(Public Service Company of New Hampshire Project - 1991 Taxable Series D)
(such Bonds, together with any Tax-Exempt Refunding Bonds (as defined in the
Indenture) issued to refund such bonds as provided in Article IV of the
Indenture, being hereinafter referred to, collectively, as the "Bonds") and,
pursuant to the Indenture, the Account Party has previously caused the
Retiring Issuing Bank to issue the letter of credit referred to therein in
favor of the Paying Agent described therein. For the purposes stated in the
recitals to the Existing Agreement, the Account Party has previously entered
into the Existing Agreement and pledged the Pledged Collateral (as defined in
the Existing Agreement) to the Retiring Issuing Bank;
The Account Party now wishes to substitute a letter of credit issued by
the Issuing Bank for the letter of credit previously issued by the Retiring
Issuing Bank, and in furtherance thereof, the Account Party has requested the
Issuing Bank to issue its irrevocable letter of credit in favor of the Paying
Agent. The Issuing Bank has agreed to issue such letter of credit subject to
the terms and conditions set forth in that certain Series D Letter of Credit
and Reimbursement Agreement, of even date herewith, among the Account Party,
the Issuing Bank, the Agent and the Participating Banks referred to therein
and relating to the Bonds (said Series D Letter of Credit and Reimbursement
Agreement, as it may be hereafter be amended, modified or supplemented from
time to time, being hereinafter referred to as the "Reimbursement
Agreement").
It is a condition precedent to the obligation of the Issuing Bank to
issue such letter of credit and of the Participating Banks to make the
Advances described in the Reimbursement Agreement that the parties execute
and deliver this Amendment and effect the assignment provided for herein;
NOW THEREFORE, the Account Party, the Retiring Issuing Bank and the
Issuing Bank hereby agree as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.01. Definitions. For the purposes of this Amendment and the
Amended Agreement, terms defined in the Reimbursement Agreement and used but
not otherwise defined in this Amendment have the meanings given them in the
Reimbursement Agreement.
ARTICLE II.
ASSIGNMENT
In consideration of the premises and for other good and valuable
consideration, receipt of which is hereby acknowledged, the Retiring Issuing
Bank hereby assigns, transfers, sets over and conveys, to the Issuing Bank
for the benefit of the Agent and the Participating Banks, without recourse of
any kind, all of the Retiring Issuing Bank's right, title and interest in and
to the Existing Agreement, the security interests created thereby and the
Pledged Collateral described therein. The Retiring Issuing Bank further
agrees to execute and deliver all such other documents and to take all such
other actions, as in each case may be reasonably requested by the Issuing
Bank to further evidence or perfect the foregoing assignment; provided,
however, that the Retiring Issuing Bank shall not be required to incur any
liability or expend any funds in connection with the foregoing unless
indemnified to its reasonable satisfaction. By execution and delivery of
this Amendment, (i) the Issuing Bank hereby accepts such assignment, transfer
and conveyance and (ii) the Account Party consents thereto.
ARTICLE III.
AMENDMENTS TO EXISTING AGREEMENT
SECTION 3.01. Restatement of Grant of Security Interest. Section 1 of
the Existing Agreement is hereby amended and restated to read in its entirety
as follows:
SECTION 1. Pledge. The Account Party hereby pledges to the
Issuing Bank for the benefit of the Agent and the Participating Banks,
and grants to the Issuing Bank for the benefit of the Agent and the
Participating Banks a security interest in, the following (the "Pledged
Collateral"):
(i) the Pledged Bonds (as defined in the Indenture) and the
instruments, if any, evidencing the Pledged Bonds, and all
interest, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in
exchange for any or all of the Pledged Bonds; and
(ii) all proceeds (other than the proceeds of the initial sale
upon issuance of the Pledged Bonds) of any and all of the foregoing
collateral (including, without limitation, proceeds that constitute
property of the types described above).
SECTION 3.02. Restatement of Security for Obligations. Section 2 of
the Existing Agreement is hereby amended and restated to read in its entirety
as follows:
SECTION 2. Security for Obligations. This Agreement secures
the payment of all obligations of the Account Party now or hereafter
existing under the Reimbursement Agreement, whether for reimbursement,
principal, interest, fees, expenses or otherwise, and all obligations of
the Account Party now or hereafter existing under this Agreement (all
such obligations of the Account Party being the "Obligations"). Without
limiting the generality of the foregoing, this Agreement secures the
payment of all amounts which constitute part of the Obligations and
would be owed by the Account Party to the Issuing Bank, the Agent or any
Participating Bank under the Reimbursement Agreement but for the fact
that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving the Account
Party.
SECTION 3.03. Certain Cross-References. The references in Sections 9
and 11(b) of the Existing Agreement to "Section 9.04 of the Reimbursement
Agreement" are hereby amended by substituting therefor the words "Section
10.04 of the Reimbursement Agreement".
SECTION 3.04. Restatement of Section 12. Section 12 of the Existing
Agreement is hereby amended and restated to read in its entirety as follows:
SECTION 12. Continuing Security Interest; Assignments. This
Agreement shall create a continuing security interest in the Pledged
Collateral and shall (i) remain in full force and effect until the later
of (x) the payment in full of the Obligations and all other amounts
payable under this Agreement and (y) the expiration or termination of
the Commitments, (ii) be binding upon the Account Party, its successors
and assigns, and (iii) inure to the benefit of, and be enforceable by,
the Issuing Bank, the Agent, the Participating Banks and their
respective successors, transferees and assigns. Without limiting the
generality of the foregoing clause (iii), any Participating Bank may,
subject to Section 10.06 of the Reimbursement Agreement, assign or
otherwise transfer all or any portion of its rights and obligations
under the Reimbursement Agreement (including, without limitation, all or
any portion of its Commitment and the Advances owing to it) to any other
person or entity, and such other person or entity shall thereupon become
vested with all the benefits in respect thereof granted to such
Participating Bank herein or otherwise. Upon the later of the payment
in full of the Obligations and all other amounts payable under this
Agreement and the expiration or termination of the Commitments, the
security interest granted hereby shall terminate and all rights to the
Pledged Collateral shall revert to the Account Party. Upon any such
termination, the Issuing Bank will, at the Account Party's expense,
return to the Account Party such of the Pledged Collateral as shall not
have been sold or otherwise applied pursuant to the terms hereof and
execute and deliver to the Account Party such documents as the Account
Party shall reasonably request to evidence such termination.
ARTICLE IV.
MISCELLANEOUS
SECTION 4.01. Effectiveness; Effect on Existing Agreement. This
Amendment shall become effective when, and only when, (a) the Agent shall
have received counterparts of this Amendment duly executed by all the parties
hereto and (b) the Letter of Credit shall have been issued pursuant to the
Reimbursement Agreement. Upon the effectiveness of this Amendment, (x) each
reference in the Existing Agreement to "the Reimbursement Agreement", "the
Series D Reimbursement Agreement", "thereunder", "thereof" or words of like
import referring to the Original Reimbursement Agreement, shall mean and be
a reference to the Reimbursement Agreement, and (y) each reference in the
Existing Agreement to "this Agreement", "hereunder", "hereof" or words of
like import referring to the Existing Agreement, and each reference in the
Related Documents to "the Pledge Agreement", "the Series D Pledge Agreement",
"thereunder", "thereof" or words of like import referring to the Existing
Agreement, shall mean and be a reference to the Amended Agreement. Except as
expressly amended hereby, all provisions of the Existing Agreement shall
remain in full force and effect and are hereby in all respects ratified and
confirmed.
SECTION 4.02. Counterparts. This Amendment may be executed in
counterparts, and such counterparts taken together shall be deemed to
constitute one and the same agreement.
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed and delivered as of the date first above written.
PUBLIC SERVICE COMPANY
OF NEW HAMPSHIRE
By ____________________________
Title:
CITIBANK, N.A.
By ____________________________
Title:
BARCLAYS BANK PLC,
NEW YORK BRANCH,
as Issuing Bank and as Agent
By ____________________________
Title:
EXHIBIT 5.01A
[Form of Opinion of Day, Berry & Howard]
[Closing Date]
To Barclays Bank PLC, New York Branch,
as Agent and as Issuing Bank under the
Reimbursement Agreement referred to below,
and to each Participating Bank thereunder
Public Service Company of New Hampshire
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 5.01(f)(i) of the
Series D Letter of Credit and Reimbursement Agreement, dated as of October 1,
1992 (the "Reimbursement Agreement"), among Public Service Company of New
Hampshire (the "Company"), Barclays Bank PLC, New York Branch, as the Agent
(the "Agent") and Issuing Bank (the "Issuing Bank") thereunder, and the
Participating Banks referred to therein. Unless otherwise defined herein,
terms defined in the Reimbursement Agreement are used herein as therein
defined.
We have acted as counsel for the Company in connection with the
preparation, execution and delivery of:
(1) the Reimbursement Agreement;
(2) the Series D Loan and Trust Agreement, dated as of May 1, 1991
(the "Loan and Trust Agreement"), among the Company, the Business
Finance Authority (formerly The Industrial Development Authority) of the
State of New Hampshire ("NHIDA") and State Street Bank and Trust
Company, as trustee (the "Trustee"), pursuant to which NHIDA has issued,
for the benefit of the Company, its Pollution Control Revenue Bonds
(Public Service Company of New Hampshire Project - 1991 Taxable Series
D);
(3) the Series D and Series E Bond Purchase Agreement, dated May
15, 1991, among NHIDA, the Company, Goldman, Sachs & Co. and Morgan
Stanley & Co. Incorporated;
(4) Irrevocable Letter of Credit No. _____________, dated October
5, 1992 (the "Letter of Credit"), issued by the Issuing Bank;
(5) the Series D Pledge Agreement, dated as of May 1, 1991, between
the Company and Citibank, N.A., as amended by a First Amendment thereto,
dated as of October 1, 1992 (the "Pledge Amendment") among the Company,
Citibank, N.A. and the Issuing Bank (such Series D Pledge Agreement, as
amended by the Pledge Amendment, being herein referred to as the "Pledge
Agreement"); and
(6) the Series D Remarketing Agreement, dated as of May 1, 1991,
between the Company and Goldman, Sachs Money Markets Inc. (the
"Remarketing Agreement").
In that connection, we have examined:
(a) The Reimbursement Agreement, the Loan and Trust Agreement, the
Pledge Agreement and the Remarketing Agreement (hereinafter the "Documents").
(b) The Letter of Credit.
(c) The First Mortgage Indenture and the Series F First Mortgage Bonds.
(d) The articles of incorporation of the Company and all amendments
thereto including the Articles of Merger governing the merger of NU
Acquisition Corp. into the Company (collectively; the "Charter") and the by-
laws of the Company and all amendments thereto (the "By-laws"), in each case
as in effect on the date hereof.
(e) True and complete photocopies of the Rate Agreement and the
Significant Contracts, and all amendments, modifications and supplements
thereto.
(f) The other documents furnished by the Company pursuant to Section
5.01 of the Reimbursement Agreement.
(g) A certificate of the Secretary of State of Connecticut, dated
September ___, 1992, attesting to the qualification as a foreign corporation
and good standing of the Company in that State.
In addition, we have examined the originals, or copies certified to our
satisfaction, of such other corporate records of the Company, certificates of
public officials and of officers of the Company, and agreements, instruments
and other documents, as we have deemed necessary as a basis for the opinions
expressed below. In our examination of such agreements, instruments and
documents, we have assumed the genuineness of all signatures (other than
those of the Company), the authenticity of all agreements, instruments and
documents submitted to us as originals, and the conformity to original
agreements, instruments and documents of all agreements, instruments and
documents submitted to us as certified, conformed or photostatic copies and
the authenticity of the originals of such copies. As to questions of fact
material to such opinions, we have assumed without verification and relied
upon the accuracy of the representations as to factual matters set forth in
the Documents and each other Loan Document and in certificates of the Company
or its officers or of public officials. Nothing has come to our attention,
however, calling into question the accuracy of such representations.
We are qualified to practice law in the State of Connecticut and for
purposes of this opinion we do not purport to be experts on any laws other
than the laws of the States of Connecticut and New York and the Federal laws
of the United States.
Based upon the foregoing and upon such investigation as we have deemed
necessary, we are of the following opinion:
1. The execution, delivery and performance by the Company of each
Document and each Significant Contract are within the Company's
corporate powers, have been duly authorized by all necessary corporate
action, and do not and will not contravene (i) the Company's Charter or
By-laws or (ii) any law (other than the state securities or "Blue Sky"
laws of any jurisdiction, as to which we express no opinion) or, to the
best of our knowledge, contractual restriction contained in any material
agreement binding on or affecting the Company; and such execution,
delivery and performance do not and will not result in or require the
creation of any Lien (other than pursuant to the Loan Documents) upon or
with respect to any of its properties. Each Document and each
Significant Contract has been duly executed and delivered by the
Company. The Merger was duly consummated on June 5, 1992, in accordance
with the Plan and all requirements of law.
2, No authorization, consent, approval, license, permit,
certificate, exemption of, or filing or registration with, any
governmental authority or other legal or regulatory body (including,
without limitation, the Bankruptcy Court but other than in connection
with or in compliance with the provisions of the state securities or
"Blue Sky" laws of any jurisdiction, as to which we express no opinion)
is required in connection with either (i) the execution, delivery or
performance of the Reimbursement Agreement, the Pledge Amendment or any
Significant Contract or the performance of the Pledge Agreement or (ii)
the grant and perfection of any security interest or lien contemplated
by the Pledge Amendment, or if required, has been duly obtained or made
and is in full force and effect; and except as set forth in Schedule IV
to the Reimbursement Agreement or in the certificate referred to in
Section 5.01(c)(i) to the Reimbursement Agreement, all applicable
periods of time for review, rehearing or appeal with respect thereto
have expired.
3. The Reimbursement Agreement, the Pledge Agreement and each
Significant Contract are (a) the legal, valid and binding obligations of
the Company enforceable against the Company in accordance with their
respective terms and (b) in full force and effect as to the Company, NU
and its other Affiliates parties thereto.
4. Except as set forth in Schedule IV to the Reimbursement
Agreement or in the certificate referred to in Section 5.01(c)(i) of the
Reimbursement Agreement, to the best of our knowledge there is no
pending or threatened action or proceeding affecting the Company or its
properties before any court, governmental agency or arbitrator, which
may, if adversely determined, purport to affect the legality, validity
or enforceability of the Rate Agreement, any Document, any other Loan
Document or any Significant Contract.
5. To the best of our knowledge, no event has occurred and is
continuing which constitutes a material default under the Rate Agreement
or any Significant Contract.
6. None of the Issuing Bank, the Agent nor any Participating Bank
is required to qualify to do business in the State of Connecticut, or to
comply with the requirement of any foreign lender statute in the State
of Connecticut, by virtue solely of the execution, delivery, performance
or enforcement of the Letter of Credit or the Reimbursement Agreement or
as a condition or requirement to avail itself of the remedies provided
by the Loan Documents.
7. The Company is a corporation duly qualified to do business in,
and is in good standing in, the State of Connecticut.
The opinions set forth above are subject to the following qualifications:
(a) With respect to our opinions in paragraphs 1 and 3, insofar as
such opinions relate to the laws of the State of New Hampshire, we have
relied on the opinion of Rath, Young, Pignatelli and Oyer, P.A.
delivered to you.
(b) With respect to our opinion in paragraph 1, insofar as such
opinion relates to the laws of the States of Maine and Vermont, we have
relied on the opinions of Drummond Woodsum Plimpton & MacMahon and
Zuccaro, Willis & Bent, respectively, delivered to you.
(c) With respect to our opinion in paragraph 2, insofar as such
opinion relates to any Governmental Approval required by any (i) New
Hampshire governmental authority, or other New Hampshire state court or
regulatory body, we have relied on the opinion of Rath, Young,
Pignatelli and Oyer, P.A. delivered to you, (ii) Maine governmental
authority, or other Maine state court or regulatory body, we have relied
on the opinion of Drummond Woodsum Plimpton & MacMahon delivered to you
and (iii) Vermont governmental authority, or other Vermont state court
or regulatory body, we have relied on the opinion of Zuccaro, Willis &
Bent delivered to you.
(d) Our opinion in paragraph 3 above (i) is subject to the effect
of any applicable bankruptcy, insolvency, reorganization, moratorium or
similar law affecting creditors' rights generally, to the effect of
general principles of equity, including (without limitation) concepts of
materiality, reasonableness, good faith and fair dealing (regardless of
whether considered in a proceeding in equity or at law) and to the
effect of certain laws and judicial decisions that may affect the
enforceability of certain rights and remedies provided in the Pledge
Agreement, none of which laws and judicial decisions, however, will make
the rights and remedies provided in the Pledge Agreement inadequate for
the practical realization of the benefits provided in the Pledge
Agreement and (ii) assumes the binding effect of all documents referred
to therein on all parties thereto other than the Company, NUSCO and NU
and its other Affiliates.
(e) With respect to our opinion in paragraph 6, we have assumed
(or, in the case of clause (ii) below, have relied on the fact) that (i)
the Issuing Bank's, the Agent's and each Participating Bank's decision
to enter into the transactions contemplated by the Reimbursement
Agreement was not made in the State of Connecticut, (ii) the execution
and delivery of the Letter of Credit and the Reimbursement Agreement by
the Issuing Bank, the Agent and each Participating Bank did not take
place in the State of Connecticut, (iii) any funds disbursed by the
Issuing Bank, the Agent or any Participating Bank pursuant to the Letter
of Credit or the Reimbursement Agreement will be disbursed outside of
the State of Connecticut, (iv) all payments to the Issuing Bank, the
Agent or any Participating Bank pursuant to the Reimbursement Agreement
will be made to a bank account or bank accounts established at a branch
office or branch offices located outside of the State of Connecticut and
(v) the Issuing Bank, the Agent and each Participating Bank does not
have an office in Connecticut, and does not have officers or agents in
Connecticut for the solicitation of business. In addition, our opinion
in paragraph 6 is qualified with respect to the ability of the Issuing
Bank, the Agent or any Participating Bank to avail itself of the
remedies provided by the Loan Documents as follows. The Issuing Bank,
the Agent or any Participating Bank will be permitted to hold property
in Connecticut that it acquires by foreclosure or otherwise in payment
of debts due it without being considered to be transacting business in
Connecticut unless the Issuing Bank, the Agent or such Participating
Bank has engaged in any other activities or transactions that either
alone or in connection with the activities and transactions pursuant to
the Reimbursement Agreement would constitute "transacting business" in
the State of Connecticut for purposes of Section 36-5a of the
Connecticut General Statutes. The holding of any such property should
be conducted, however, with a view to, and in a manner reasonably
calculated to do nothing more than, preserve the value of the property
pending its resale by the Issuing Bank, the Agent or any Participating
Bank. In our view, the Connecticut courts likely would hold that the
active management and operation of such property by the Issuing Bank,
the Agent or any Participating Bank prior to the resale of the property
may constitute "transacting business" in Connecticut. While no
particular holding period may be specified, such period should not be
any longer than reasonably necessary for the prudent resale of the
property acquired in foreclosure.
(f) We express no opinion as to the validity of the Liens in the
Collateral or the perfection or priority of such Liens.
(g) We note further that, in addition to the effect of general
principles of equity described in subparagraph (d) above, courts have
imposed an obligation on contracting parties to act reasonably and in
good faith in the exercise of their contractual rights and remedies, and
may also apply public policy considerations in limiting the right of
parties seeking to obtain indemnification under circumstances where the
conduct of such parties in the circumstances in question is determined
to have constituted negligence.
(h) We express no opinion herein as to (i) Section 10.05 of the
Reimbursement Agreement, (ii) the enforceability of provisions
purporting to grant to a party conclusive rights of determination, (iii)
the availability of specific performance or other equitable remedies and
(iv) the enforceability of waivers by parties of their respective rights
and remedies under law.
We are aware that Rath, Young, Pignatelli and Oyer, P.A. will rely upon
the opinion set forth in paragraph 7 of this opinion and that Porter &
Travers will rely upon the opinions set forth in paragraphs 1, 2, and 4 of
this opinion in rendering their opinions furnished pursuant to Sections
5.01(f)(ii) and 5.01(f)(vi), respectively, of the Reimbursement Agreement,
and we hereby authorize such reliance.
Very truly yours,
EXHIBIT 5.01B
[Form of Opinion of Rath, Young, Pignatelli and Oyer, P.A.]
[Closing Date]
To Barclays Bank PLC, New York Branch,
as Agent and as Issuing Bank under the
Reimbursement Agreement referred to below,
and to each Participating Bank thereunder
Public Service Company of New Hampshire
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 5.01(f)(ii) of the
Series D Letter of Credit and Reimbursement Agreement, dated as of October 1,
1992 (the "Reimbursement Agreement"), among Public Service Company of New
Hampshire (the "Company"), Barclays Bank PLC, New York Branch, as the Agent
(the "Agent") and Issuing Bank (the "Issuing Bank") thereunder, and the
Participating Banks referred to therein. Unless otherwise defined herein,
terms defined in the Reimbursement Agreement are used herein as therein
defined.
We have acted as special New Hampshire counsel to the Company in
connection with the execution and delivery of:
(1) the Reimbursement Agreement;
(2) Irrevocable Letter of Credit No. _____________, dated October
5, 1992 (the "Letter of Credit"), issued by the Issuing Bank; and
(3) the First Amendment, dated as of October 1, 1992 (the "Pledge
Amendment") among the Company, Citibank, N.A. and the Issuing Bank, to
the Series D Pledge Agreement, dated as of May 1, 1991, between the
Company and Citibank, N.A. (such Series D Pledge Agreement being herein
referred to as the "Original Pledge Agreement;" the Original Pledge
Agreement, as amended by the Pledge Amendment, being herein referred to
as the "Pledge Agreement").
In that connection, we have examined:
(a) The Reimbursement Agreement and the Pledge Agreement (hereinafter
the "Documents").
(b) The Letter of Credit.
(c) The articles of incorporation of the Company and all amendments
thereto including the Articles of Merger governing the merger of NU
Acquisition Corp. into the Company (collectively; the "Charter") and the by-
laws of the Company and all amendments thereto (the "By-laws"), in each case
as in effect on the date hereof.
(d) True and complete photocopies of the Rate Agreement and the
Significant Contracts, and all amendments, modifications and supplements
thereto.
(e) A certificate of the Secretary of State of New Hampshire, dated
September ___, 1992, attesting to the continued corporate existence and good
standing of the Company in that State.
In addition, we have examined the originals, or copies certified to our
satisfaction, of such other corporate records of the Company, certificates of
public officials and of officers of the Company, and agreements, instruments
and other documents, as we have deemed necessary as a basis for the opinions
expressed below. In our examination of such agreements, instruments and
documents, we have assumed the genuineness of all signatures (other than
those of the Company), the authenticity of all agreements, instruments and
documents submitted to us as originals, and the conformity to original
agreements, instruments and documents of all agreements, instruments and
documents submitted to us as certified, conformed or photostatic copies and
the authenticity of the originals of such copies. Our knowledge as to
factual matters is based only upon certificates of officers of the Company
that have been delivered to us and a review of our files, and we have assumed
without verification and relied upon the accuracy of the representations as
to factual matters set forth in the Documents and in certificates of the
Company or its officers or of public officials. Nothing has come to our
attention, however, calling into question the accuracy of such
representations.
We are qualified to practice law in the State of New Hampshire and for
purposes of this opinion we do not purport to be experts on any laws other
than the laws of the State of New Hampshire, including any political
subdivision thereof ("New Hampshire").
Based upon the foregoing and upon such investigation as we have deemed
necessary, we are of the following opinion:
1. The Company is a corporation duly organized, validly existing
and in good standing under the laws of New Hampshire, and is duly
qualified to do business in, and is in good standing in, all other
jurisdictions where the nature of its business or the nature of property
owned or used by it makes such qualification necessary.
2. The execution, delivery and performance by the Company of each
Document and each Significant Contract are within the Company's
corporate powers, have been duly authorized by all necessary corporate
action, and do not and will not contravene (i) the Company's Charter or
By-laws or (ii) any New Hampshire law (other than the state securities
or "Blue Sky" laws of New Hampshire, as to which we express no opinion)
or, to the best of our knowledge, contractual restriction contained in
any material agreement binding on or affecting the Company; and such
execution, delivery and performance do not and will not result in or
require the creation of any Lien (other than pursuant to the Loan
Documents) upon or with respect to any of its properties. Each
Document and each Significant Contract has been duly executed and
delivered by the Company. The Merger was duly consummated on June 5,
1992, in accordance with the Plan and all requirements of New Hampshire
law.
3. No authorization, consent, approval, license, permit,
certificate, exemption of, or filing or registration with any New
Hampshire governmental authority or other New Hampshire legal or
regulatory body (which does not include the United States Bankruptcy
Court for the District of New Hampshire and other than in connection
with or in compliance with the provisions of the state securities or
"Blue Sky" laws of any jurisdiction, as to which we express no opinion)
is required in connection with either (i) the execution, delivery or
performance of the Reimbursement Agreement, the Pledge Amendment or any
Significant Contract or the performance of the Pledge Agreement or (ii)
the grant and perfection of any security interest or lien contemplated
by the Pledge Amendment, or, if required, has been duly obtained or made
and is in full force and effect; and except as set forth in Schedule IV
to the Reimbursement Agreement or in the certificate referred to in
Section 5.01(c)(i) to the Reimbursement Agreement, all applicable
periods of time for review, rehearing or appeal with respect thereto
have expired.
4. The Reimbursement Agreement, the Pledge Agreement and each
Significant Contract are (a) the legal, valid and binding obligations of
the Company enforceable against the Company (to the extent such
enforceability is a matter of New Hampshire law) in accordance with
their respective terms and (b) in full force and effect as to the
Company.
5. Except as set forth in Schedule IV to the Reimbursement
Agreement or in the certificate referred to in Section 5.01(c)(i) of the
Reimbursement Agreement, to the best of our knowledge there is no
pending or threatened action or proceeding affecting the Company or its
properties before any New Hampshire court, governmental agency or
arbitrator, which may, if adversely determined, purport to affect the
legality, validity or enforceability of the Rate Agreement, any
Document, any other Loan Document or any Significant Contract.
6. To the best of our knowledge, no event has occurred and is
continuing which constitutes a material default by the Company under the
Rate Agreement or any Significant Contract.
7. In any action or proceeding arising out of or relating to the
Reimbursement Agreement or the Pledge Agreement in any court in New
Hampshire, such court would recognize and give effect to the provisions
of the Reimbursement Agreement or the Pledge Agreement, as the case may
be, wherein the parties thereto agreed that the Reimbursement Agreement
or the Pledge Agreement, as the case may be, shall be governed by, and
construed in accordance with, the laws of the State of New York.
However, if a court were to hold that the Reimbursement Agreement or the
Pledge Agreement is governed by, and to be construed in accordance with,
the laws of New Hampshire, the Reimbursement Agreement or the Pledge
Agreement, as the case may be, would, under the laws of New Hampshire,
constitute a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject to
the qualifications that are set forth in subparagraphs (b), (c) and (d)
contained in the penultimate paragraph hereof.
8. None of the Issuing Bank, the Agent nor any Participating Bank
is required to qualify to do business in New Hampshire, or to comply
with the requirement of any foreign lender statute in New Hampshire, by
virtue solely of the execution, delivery, performance or enforcement of
the Letter of Credit or the Reimbursement Agreement or as a condition or
requirement to avail itself of the remedies provided by the Loan
Documents; nor will the Issuing Bank, the Agent or any such
Participating Bank be subject to taxation in New Hampshire solely by
virtue of any such circumstance.
The opinions set forth above are subject to the following qualifications:
(a) With respect to our opinion in paragraph 1, insofar as such
opinion relates to the laws of the States of Connecticut, Maine and
Vermont, we have relied on the opinions of Day, Berry & Howard, Drummond
Woodsum Plimpton & MacMahon and Zuccaro, Willis & Bent, respectively,
delivered to you.
(b) Our opinions in paragraphs 4 and 7 above are subject to the
effect of any applicable bankruptcy, insolvency, reorganization,
moratorium or similar law affecting creditors' rights generally.
(c) Our opinions in paragraphs 4 and 7 above are subject to the
effect of general principles of equity, including (without limitation)
concepts of materiality, reasonableness, good faith and fair dealing
(regardless of whether considered in a proceeding in equity or at law).
(d) Our opinions in paragraphs 4 and 7 above are subject to the
effect of certain laws and judicial decisions that may affect the
enforceability of certain rights and remedies provided in the Pledge
Agreement, none of which laws and judicial decisions, however, will make
the rights and remedies provided in the Pledge Agreement inadequate for
the practical realization of the benefits provided in the Pledge
Agreement, and assume the binding affect of all documents referred to
therein on all parties thereto other than the Company.
(e) We express no opinion herein as to (i) Section 10.05 of the
Reimbursement Agreement, (ii) the enforceability of provisions
purporting to grant to a party conclusive rights of determination, (iii)
the availability of specific performance or other equitable remedies and
(iv) the enforceability of waivers by parties of their respective rights
and remedies under law.
(f) We note further that, in addition to the effect of general
principles of equity described in subparagraph (c) above, courts have
imposed an obligation on contracting parties to act reasonably and in
good faith in the exercise of their contractual rights and remedies, and
may also apply public policy considerations in limiting the right of
parties seeking to obtain indemnification under circumstances where the
conduct of such parties in the circumstances in question is determined
to have constituted negligence.
(g) With respect to our opinion in paragraph 4 of this opinion, we
note that the Tax Allocation Agreement and the Sharing Agreement provide
that they are governed by Connecticut law, and the Reimbursement
Agreement and the Pledge Agreement provide that they are governed by New
York law.
(h) Our opinions assume that the execution and delivery by the
Company of the Original Pledge Agreement was within the Company's
corporate powers, was duly authorized by all necessary corporate action
and was duly executed and delivered by the Company.
(i) We express no opinion as to the validity of the Liens in the
Collateral or the perfection or priority of such Liens.
We are aware that Day, Berry & Howard will rely upon the opinions set
forth in paragraphs 2, 3 and 4 of this opinion and that Porter & Travers will
rely upon the opinions set forth in paragraphs 1, 2, 3 and 5 of this opinion
in rendering their opinions furnished pursuant to Section 5.01(f)(i) and
5.01(f)(vi), respectively, of the Reimbursement Agreement, and we hereby
authorize such reliance. This opinion is otherwise furnished to you solely
for your use and the use of the Company and, unless authorized by us in
writing, may not be relied upon or used by any other party.
Very truly yours,
EXHIBIT 5.01C
[Form of Opinion of Pierre O. Caron, Esq.]
[Closing Date]
To Barclays Bank PLC, New York Branch,
as Agent and as Issuing Bank under the
Reimbursement Agreement referred to below,
and to each Participating Bank thereunder
Public Service Company of New Hampshire
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 5.01(f)(iii) of the
Series D Letter of Credit and Reimbursement Agreement, dated as of October 1,
1992 (the "Reimbursement Agreement"), among Public Service Company of New
Hampshire (the "Company"), Barclays Bank PLC, New York Branch, as the Agent
(the "Agent") and Issuing Bank (the "Issuing Bank") thereunder, and the
Participating Banks referred to therein. Unless otherwise defined herein,
terms defined in the Reimbursement Agreement are used herein as therein
defined.
I am Assistant General Counsel of the Company and am the head of the
Company's Law Department, which is responsible for obtaining and maintaining
all Governmental Approvals of the type referred to in clause (iii) in the
definition of "Governmental Approvals" contained in the Reimbursement
Agreement.
Based upon such investigation as I have deemed necessary, including,
without limitation, conversations with other responsible officers of the
Company, I am of the following opinion:
1. The Company has obtained all Governmental Approvals referred
to in clause (iii) in the definition of "Governmental Approvals"
contained in the Reimbursement Agreement, except those not yet required
but which are obtainable in the ordinary course of business as and when
required and those the absence of which would not materially adversely
affect the financial condition, properties, prospects or operations of
the Company as a whole.
2. Except as set forth in Schedule IV to the Reimbursement
Agreement or in the certificate referred to in Section 5.01(c)(i) of the
Reimbursement Agreement, to the best of my knowledge there is no pending
or threatened action or proceeding affecting the Company or its
properties before any New Hampshire court, governmental agency or
arbitrator, which may, if adversely determined, materially adversely
affect the financial condition, properties, prospects or operations of
the Company as a whole.
Very truly yours,
EXHIBIT 5.01D
[Form of Opinion of Drummond
Woodsum Plimpton & MacMahon]
[Closing Date]
To Barclays Bank PLC, New York Branch,
as Agent and as Issuing Bank under the
Reimbursement Agreement referred to below,
and to each Participating Bank thereunder
Public Service Company of New Hampshire
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 5.01(f)(iv) of the
Series D Letter of Credit and Reimbursement Agreement, dated as of October 1,
1992 (the "Reimbursement Agreement"), among Public Service Company of New
Hampshire (the "Company"), Barclays Bank PLC, New York Branch, as the Agent
(the "Agent") and Issuing Bank (the "Issuing Bank") thereunder, and the
Participating Banks referred to therein. Unless otherwise defined herein,
terms defined in the Reimbursement Agreement are used herein as therein
defined.
We have acted as special Maine counsel for the Company in connection
with the transactions contemplated under the Reimbursement Agreement.
In connection with this opinion, we have examined:
(1) the Reimbursement Agreement;
(2) the Series D Loan and Trust Agreement, dated as of May 1, 1991
(the "Loan and Trust Agreement"), among the Company, the Business
Finance Authority (formerly The Industrial Development Authority) of the
State of New Hampshire ("NHIDA") and State Street Bank and Trust
Company, as trustee (the "Trustee"), pursuant to which NHIDA has issued,
for the benefit of the Company, its Pollution Control Revenue Bonds
(Public Service Company of New Hampshire Project - 1991 Taxable Series
D);
(3) the Series D and Series E Bond Purchase Agreement, dated May
15, 1991, among NHIDA, the Company, Goldman, Sachs & Co. and Morgan
Stanley & Co. Incorporated;
(4) Irrevocable Letter of Credit No. _____________, dated October
5, 1992 (the "Letter of Credit"), issued by the Issuing Bank;
(5) the Series D Pledge Agreement, dated as of May 1, 1991, between
the Company and Citibank, N.A., as amended by a First Amendment thereto,
dated as of October 1, 1992 (the "Pledge Amendment") among the Company,
Citibank, N.A. and the Issuing Bank (such Series D Pledge Agreement, as
amended by the Pledge Amendment, being herein referred to as the "Pledge
Agreement");
(6) the Series D Remarketing Agreement, dated as of May 1, 1991,
between the Company and Goldman, Sachs Money Markets Inc. (the
"Remarketing Agreement"); and
(7) a certificate of the Secretary of State of Maine, dated
September ___, 1992, attesting to the authorization to do business and
good standing of the Company in Maine.
We have also examined the other Loan Documents, the Rate Agreement the
Significant Contracts, the originals or copies certified to our satisfaction
of such corporate records of the Company, such certificates of public
officials and officers of the Company, and such other agreements, instruments
and documents as we have deemed necessary as a basis for the opinions
expressed below. In our examination of such agreements, instruments and
documents, we have assumed the genuineness of all signatures, the
authenticity of all agreements, instruments and documents submitted to us as
originals, and the conformity to original agreements, instruments and
documents of all agreements, instruments and documents submitted to us as
certified, conformed or photostatic copies and the authenticity of the
originals of such copies.
As to questions of fact material to such opinions, we have, when
relevant facts were not independently established by us, relied upon
certificates of the Company or its officers or of public officials.
We are assuming, for purposes of this opinion, that the Company is a
corporation organized and existing under the laws of the State of New
Hampshire and has, under its articles of incorporation, all requisite
corporate power and authority to own and operate its properties and carry on
its business as presently conducted, including without limitation the power
to make, generate, sell, distribute and supply electricity at wholesale and
retail.
We are qualified to practice law in the State of Maine and we do not
purport to be experts on any laws other than the laws of the State of Maine.
Based upon the foregoing and upon such investigation as we deemed
necessary, we are of the opinion that:
1. The Company is a corporation duly qualified to do business in,
and is in good standing in, the State of Maine.
2. The execution, delivery and performance by the Company of the
Rate Agreement, the Reimbursement Agreement, the Loan and Trust
Agreement, the Pledge Agreement, the Remarketing Agreement, each other
Loan Document and each Significant Contract do not and will not
contravene the laws of the State of Maine (other than the state
securities or "Blue Sky" laws of Maine, as to which we express no
opinion).
3. No Governmental Approval of the types referred to in clauses
(i) and (ii) in the definition of "Governmental Approvals" contained in
the Reimbursement Agreement by any governmental authority in the State
of Maine or by any legal or regulatory body in the State of Maine (other
than in connection with or in compliance with the state securities or
"Blue Sky" laws of Maine, as to which we express no opinion) is
required, or if required, has been duly obtained or made, and is in full
force and effect; and except as set forth in Schedule IV to the
Reimbursement Agreement or in the certificate referred to in Section
5.01(c)(i) to the Reimbursement Agreement, all applicable periods of
time for review, rehearing or appeal with respect thereto have expired.
4. To the best of our knowledge there is no pending or threatened
action or proceeding in the State of Maine affecting the Company or its
properties before any court, governmental agency or arbitrator, which
may, if adversely determined, purport to affect the legality, validity
or enforceability of the Rate Agreement, the Reimbursement Agreement,
the Loan and Trust Agreement, the Pledge Agreement, the Remarketing
Agreement, any other Loan Document or any Significant Contract.
We are aware that Day, Berry & Howard, Rath, Young, Pignatelli and Oyer,
P.A. and Porter & Travers will rely upon the opinions set forth above in
rendering their opinions furnished pursuant to Section 5.01(f)(i), Section
5.01(f)(ii) and Section 5.01(f)(vi), respectively, of the Reimbursement
Agreement, and we hereby authorize such reliance.
Very truly yours,
EXHIBIT 5.01E
[Form of Opinion of Zuccaro, Willis & Bent]
[Closing Date]
To Barclays Bank PLC, New York Branch,
as Agent and as Issuing Bank under the
Reimbursement Agreement referred to below,
and to each Participating Bank thereunder
Public Service Company of New Hampshire
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 5.01(f)(v) of the
Series D Letter of Credit and Reimbursement Agreement, dated as of October 1,
1992 (the "Reimbursement Agreement"), among Public Service Company of New
Hampshire (the "Company"), Barclays Bank PLC, New York Branch, as the Agent
(the "Agent") and Issuing Bank (the "Issuing Bank") thereunder, and the
Participating Banks referred to therein. Unless otherwise defined herein,
terms defined in the Reimbursement Agreement are used herein as therein
defined.
We have acted as special Vermont counsel for the Company in connection
with the transactions contemplated under the Reimbursement Agreement.
In connection with this opinion, we have examined:
(1) the Reimbursement Agreement;
(2) the Series D Loan and Trust Agreement, dated as of May 1, 1991
(the "Loan and Trust Agreement"), among the Company, the Business
Finance Authority (formerly The Industrial Development Authority) of the
State of New Hampshire ("NHIDA") and State Street Bank and Trust
Company, as trustee (the "Trustee"), pursuant to which NHIDA has issued,
for the benefit of the Company, its Pollution Control Revenue Bonds
(Public Service Company of New Hampshire Project - 1991 Taxable Series
D);
(3) the Series D and Series E Bond Purchase Agreement, dated May
15, 1991, among NHIDA, the Company, Goldman, Sachs & Co. and Morgan
Stanley & Co. Incorporated;
(4) Irrevocable Letter of Credit No. _____________, dated October
5, 1992 (the "Letter of Credit"), issued by the Issuing Bank;
(5) the Series D Pledge Agreement, dated as of May 1, 1991, between
the Company and Citibank, N.A., as amended by a First Amendment thereto,
dated as of October 1, 1992 (the "Pledge Amendment") among the Company,
Citibank, N.A. and the Issuing Bank (such Series D Pledge Agreement, as
amended by the Pledge Amendment, being herein referred to as the "Pledge
Agreement"); and
(6) the Series D Remarketing Agreement, dated as of May 1, 1991,
between the Company and Goldman, Sachs Money Markets Inc. (the
"Remarketing Agreement").
(7) Certificate of the Secretary of State of Vermont, dated
September ___, 1992, attesting to the authorization to do business and
good standing of the Company in Vermont.
We have also examined the other Loan Documents, the Rate Agreement, the
Significant Contracts, the originals or copies certified to our satisfaction
of such corporate records of the Company, such certificates of public
officials and officers of the Company, and such other agreements, instruments
and documents as we have deemed necessary as a basis for the opinions
expressed below. In our examination of such agreements, instruments and
documents, we have assumed the genuineness of all signatures, the
authenticity of all agreements, instruments and documents submitted to us as
originals, and the conformity to original agreements, instruments and
documents of all agreements, instruments and documents submitted to us as
certified, conformed or photostatic copies and the authenticity of the
originals of such copies.
As to questions of fact material to such opinions, we have, when
relevant facts were not independently established by us, relied upon
certificates of the Company or its officers or of public officials.
We are assuming, for purposes of this opinion, that the Company is a
corporation organized and existing under the laws of the State of New
Hampshire and has, under its articles of incorporation, all requisite
corporate power and authority to own and operate its properties and carry on
its business as presently conducted, including without limitation the power
to make, generate, sell, distribute and supply electricity at wholesale and
retail.
We are qualified to practice law in the State of Vermont and we do not
purport to be experts on any laws other than the laws of the State of
Vermont.
Based upon the foregoing and upon such investigation as we deemed
necessary, we are of the opinion that:
1. The Company is a corporation duly qualified to do business in,
and is in good standing in, the State of Vermont.
2. The execution, delivery and performance by the Company of the
Rate Agreement, the Reimbursement Agreement, the Loan and Trust
Agreement, the Pledge Agreement, the Remarketing Agreement, each other
Loan Document and each Significant Contract do not and will not
contravene the laws of the State of Vermont (other than the state
securities or "Blue Sky" laws of Vermont, as to which we express no
opinion).
3. No Governmental Approval of the types referred to in clauses
(i) and (ii) in the definition of "Governmental Approvals" contained in
the Reimbursement Agreement by any governmental authority in the State
of Vermont or by any legal or regulatory body in the State of Vermont
(other than in connection with or in compliance with the state
securities or "Blue Sky" laws of Vermont, as to which we express no
opinion) is required, or if required, has been duly obtained or made,
and is in full force and effect; and except as set forth in Schedule IV
to the Reimbursement Agreement or in the certificate referred to in
Section 5.01(c)(i) to the Reimbursement Agreement, all applicable
periods of time for review, rehearing or appeal with respect thereto
have expired.
4. To the best of our knowledge there is no pending or threatened
action or proceeding in the State of Vermont affecting the Company or
its properties before any court, governmental agency or arbitrator,
which may, if adversely determined, purport to affect the legality,
validity or enforceability of the Rate Agreement, the Reimbursement
Agreement, the Loan and Trust Agreement, the Pledge Agreement, the
Remarketing Agreement, any other Loan Document or any Significant
Contract.
We are aware that Day, Berry & Howard, Rath, Young, Pignatelli and Oyer,
P.A. and Porter & Travers will rely upon the opinions set forth above in
rendering their opinions furnished pursuant to Section 5.01(f)(i), Section
5.01(f)(ii) and Section 5.01(f)(vi), respectively, of the Reimbursement
Agreement, and we hereby authorize such reliance.
Very truly yours,
EXHIBIT 5.01F
[Form of Opinion of Porter & Travers]
October 5, 1992
To Barclays Bank PLC, New York Branch,
as Agent and as Issuing Bank under the
Reimbursement Agreement referred to below,
and to each Participating Bank thereunder
Public Service Company of New Hampshire
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 5.01(f)(vi) of the
Series D Letter of Credit and Reimbursement Agreement, dated as of October 1,
1992 (the "Reimbursement Agreement"), among Public Service Company of New
Hampshire (the "Company"), Barclays Bank PLC, New York Branch, as the Agent
(the "Agent") and Issuing Bank (the "Issuing Bank") thereunder, and the
Participating Banks referred to therein. Unless otherwise defined herein,
terms defined in the Reimbursement Agreement are used herein as therein
defined.
We have acted as special New York counsel to the Agent and the Issuing
Bank in connection with the preparation, execution and delivery of the
Reimbursement Agreement and the issuance by the Issuing Bank of the Letter of
Credit referred to therein.
In that connection, we have examined the following documents:
(a) The Reimbursement Agreement, executed by each of the parties
thereto; and
(b) The documents furnished to you today pursuant to Section 5.01
of the Reimbursement Agreement, including the opinions of counsel
delivered pursuant to Sections 5.01(f)(i) through (v) of the
Reimbursement Agreement (collectively, the "Opinions").
In our examination of the documents referred to above, we have assumed
the authenticity of all such documents submitted to us as originals, the
genuineness of all signatures, the due authority of the parties executing
such documents and the conformity to the originals of all such documents
submitted to us as copies or telecopies. We have also assumed that the
Agent, the Issuing Bank and each Participating Bank have duly executed and
delivered, with all necessary power and authority (corporate and otherwise),
the Reimbursement Agreement and that all requisite consents of Participating
Banks have been obtained under Sections 5.01 of the Reimbursement Agreement.
To the extent that our opinions expressed below involve conclusions as
to matters governed by laws other than the laws of the State of New York, we
have relied upon the Opinions and have assumed without independent
investigation the correctness of the matters set forth therein, our opinions
expressed below being subject to the assumptions, qualifications and
limitations set forth in the Opinions. As to matters of fact, we have relied
solely upon the documents we have examined.
Based upon the foregoing, and subject to the qualifications set forth
below, we are of the opinion that:
5. The Reimbursement Agreement is the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance
with its terms.
6. The Opinions and the other documents referred to in paragraph
(b), above, are substantially responsive to the requirements of the
sections of the Reimbursement Agreement pursuant to which the same have
been delivered.
Our opinions are subject to the following qualifications:
(a) Our opinion in paragraph 1, above, is subject to the effect of
any applicable bankruptcy, insolvency, reorganization, moratorium or
similar law affecting creditors' rights generally.
(b) Our opinion in paragraph 1, above, is subject to the effect of
general principles of equity, including (without limitation) concepts of
materiality, reasonableness, good faith and fair dealing (regardless of
whether considered in a proceeding in equity or at law).
(c) We note further that, in addition to the application of
equitable principles described above, courts have imposed an obligation
on contracting parties to act reasonably and in good faith in the
exercise of their contractual rights and remedies, and may also apply
public policy considerations in limiting the right of parties seeking to
obtain indemnification.
(d) We express no opinion herein as to (i) Section 10.05 of the
Reimbursement Agreement, (ii) the enforceability of provisions
purporting to grant to a party conclusive rights of determination, (iii)
the availability of specific performance or other equitable remedies and
(iv) the enforceability of waivers by parties of their respective rights
and remedies under law.
(e) Our opinions expressed above are limited to the law of the
State of New York and the Federal law of the United States, and we do
not express any opinion herein concerning any other law. Without
limiting the generality of the foregoing, we express no opinion as to
the effect of the law of any jurisdiction other than the State of New
York wherein the Issuing Bank, the Agent or any Participating Bank may
be located or wherein enforcement of the Reimbursement Agreement may be
sought which limits the rates of interest legally chargeable or
collectible.
Very truly yours,
Exhibit 4.3.9.1
AMENDED AND RESTATED
IRREVOCABLE LETTER OF CREDIT
NO. 833162
December 17, 1992
Security Pacific National Trust Company (New York)
2 Rector Street
New York, New York 10006
Attention: Corporate Trust Division
Dear Sir or Madam:
We hereby establish, at the request and for the account of Public
Service Company of New Hampshire (the "Account Party"), in your favor, as
paying agent (the "Paying Agent") under that certain Series D Loan and
Trust Agreement, dated as of May 1, 1991, as supplemented by a First
Supplement thereto dated as of December 1, 1992, (as so supplemented, the
"Indenture"), by and among the Business Finance Authority (formerly The
Industrial Development Authority) of the State of New Hampshire (the
"Issuer"), the Account Party and State Street Bank and Trust Company, as
trustee (the "Trustee"), pursuant to which $39,500,000 in outstanding
aggregate principal amount of the Issuer's Pollution Control Revenue Bonds
(Public Service Company of New Hampshire Project - 1991 Taxable Series D)
and $75,000,000 in outstanding aggregate principal amount of the Issuer's
Pollution Control Refunding Revenue Bonds (Public Service Company of New
Hampshire Project - 1992 Tax-Exempt Series D) (such 1991 Taxable Series D
and 1992 Tax-Exempt Series D bonds being hereinafter referred to,
collectively, as the "Bonds"), have been issued, our Amended and Restated
Irrevocable Letter of Credit No. 833162, in the amount of US$117,858,000
(ONE HUNDRED SEVENTEEN MILLION EIGHT HUNDRED FIFTY-EIGHT THOUSAND AND NO
ONE-HUNDREDTHS UNITED STATES DOLLARS), subject to reduction and
reinstatement as provided below. This Amended and Restated Irrevocable
Letter of Credit No. 833162 amends, restates and supersedes our Irrevocable
Letter of Credit No. 833162 issued to you on October 5, 1992.
(1) Credit Termination Date. This Letter of Credit shall expire on
the earliest to occur of (i) October 1, 1995 (the "Stated Termination
Date"), (ii) the date upon which we honor a draft accompanying a written
and completed certificate signed by you in substantially the form of
Exhibit 2 attached hereto, and stating therein that such draft is the final
draft to be drawn under this Letter of Credit and that, upon the honoring
of such draft, this Letter of Credit will expire in accordance with its
terms, (iii) the date upon which we receive a written certificate signed by
you and stating therein that no Bonds entitled to the benefits of this
Letter of Credit (as determined in accordance with the Indenture)
("Eligible Bonds") are "outstanding" under the Indenture, (iv) the fifth
business day following receipt by you and the Trustee of written notice
from us that an Event of Default (as defined below) has occurred under the
Reimbursement Agreement (as defined below) and of our determination to
terminate this Letter of Credit on such fifth business day and (v) the date
upon which we receive a written certificate signed by you and stating
therein that a substitute or replacement Credit Facility (as defined in the
Indenture) has been provided pursuant to Section 317 of the Indenture (such
earliest date being the "Credit Termination Date").
As used herein, the term "business day" shall mean any day of the year
(i) that is not a Sunday or legal holiday or a day on which banking
institutions are authorized pursuant to law to close, (ii) that is not a
day on which the corporate trust office of the First Mortgage Bond Trustee
(as defined in the Indenture) is not open for business, (iii) that is a day
on which banks are not required or authorized to close in New York City and
(iv) that is a day on which banking institutions in all of the cities in
which the principal offices of the Trustee, the Paying Agent and the
Remarketing Agent (as defined in the Indenture) are located are not
required or authorized to remain closed and on which the New York Stock
Exchange is not closed.
As used herein "Reimbursement Agreement" shall mean the Series D
Letter of Credit and Reimbursement Agreement, dated as of October 1, 1992,
between the Account Party, us and certain Participating Banks referred to
therein, and the term "Event of Default" shall mean an "Event of Default"
as that term is defined in the Reimbursement Agreement.
(2) Principal, Interest and Premium Components. The aggregate amount
which may be drawn under this Letter of Credit, subject to reductions in
amount and reinstatement as provided below, is US$117,858,000.00 (ONE
HUNDRED SEVENTEEN MILLION EIGHT HUNDRED FIFTY-EIGHT THOUSAND AND NO ONE-
HUNDREDTHS UNITED STATES DOLLARS), of which the aggregate amounts set forth
below may be drawn as indicated.
(i) An aggregate amount not exceeding US$114,500,000.00 (ONE
HUNDRED FOURTEEN MILLION FIVE HUNDRED THOUSAND AND NO ONE-HUNDREDTHS
UNITED STATES DOLLARS), as such amount may be reduced and reinstated
as provided below, (the "Principal Component") may be drawn in respect
of payment of principal (whether upon scheduled or accelerated
maturity, or upon redemption) of Eligible Bonds or the portion of the
purchase price of Eligible Bonds corresponding to principal.
(ii) An aggregate amount not exceeding US$3,358,000.00 (THREE
MILLION THREE HUNDRED FIFTY-EIGHT THOUSAND AND NO ONE-HUNDREDTHS
UNITED STATES DOLLARS), as such amount may be reduced and reinstated
as provided below, (the "Interest Component") may be drawn in respect
of payment of:
(A) accrued and unpaid interest on Eligible Bonds not in the
Flexible Mode (as defined in the Indenture) or that portion of
the redemption price or purchase price of such Eligible Bonds
corresponding to accrued and unpaid interest, but not more than
an amount equal to accrued and unpaid interest on such Eligible
Bonds for up to a maximum of 1) 128 days immediately preceding
the date of such drawing (in the case of Eligible Bonds that are
1991 Taxable Series D Bonds) and 2) 45 days immediately preceding
the date of such drawing (in the case of Eligible Bonds that are
1992 Tax-Exempt Series D Bonds); and
(B) unpaid interest (whether accrued or to accrue) on
Eligible Bonds in the Flexible Mode or that portion of the
redemption price or purchase price of such Eligible Bonds
corresponding to such interest, but not more than an amount equal
to such interest on such Eligible Bonds for up to a maximum of 1)
128 days immediately preceding the next Purchase Date (as defined
in the Indenture) for each such Eligible Bond (in the case of
Eligible Bonds that are 1991 Taxable Series D Bonds) (or, if
interest on any such Eligible Bond was not paid on the most
recent Purchase Date for such Bond, for up to a maximum of 128
days immediately preceding the date of such drawing) and 2) 45
days immediately preceding such Purchase Date (in the case of
Eligible Bonds that are 1992 Tax-Exempt Series D Bonds) (or, if
interest on any such Eligible Bond was not paid on the most
recent Purchase Date for such Bond, for up to a maximum of 45
days immediately preceding the date of such drawing);
calculated, in each case referred to in the foregoing clause (A) or
clause (B) at a maximum rate of:
(X) sixteen percent (16%) per annum on the basis of a year
of 360 days for the actual days elapsed, or such lesser rate of
interest as shall equal the Maximum Interest Rate (as defined in
the Indenture) in effect under the Indenture with respect to such
Eligible Bonds that are 1991 Taxable Series D Bonds (whether or
not in the Flexible Mode); and
(Y) twelve percent (12%) per annum on the basis of a year of
365 or 366 days (as applicable) for the actual days elapsed, or
such lesser rate of interest as shall equal the Maximum Interest
Rate in effect under the Indenture with respect to such Eligible
Bonds that are 1992 Tax-Exempt Series D Bonds (whether or not in
the Flexible Mode).
(iii) An aggregate amount not exceeding US$0.00 (ZERO UNITED
STATES DOLLARS) may be drawn in respect of premium on Eligible Bonds
(the "Premium Component"). If, subsequent to the date hereof, the
Premium Component shall be increased by us at the request of the
Account Party, the Premium Component shall be subject to reduction as
provided below, and amounts drawn in respect thereof shall not be
subject to reinstatement.
(3) Drawings. Funds under this Letter of Credit are available to you
against (i) your draft, stating on its face: "Drawn under Amended and
Restated Irrevocable Letter of Credit No. 833162, dated December 17, 1992",
and (ii) the appropriate certificate specified below, purportedly executed
by you and appropriately completed.
Exhibit Setting Forth
Type of Drawing Form of Certificate Required
Tender Drawing Exhibit 1
(as hereinafter defined)
Redemption/Mandatory Exhibit 2
Purchase Drawing
(as hereinafter defined)
Interest Drawing Exhibit 3
(as hereinafter
defined)
Drafts and certificates hereunder shall be dated the date of
presentation and shall be presented at our office located at 75 Wall
Street, 17th Floor, New York, New York 10265, Attention: Trade Services
Group (or at such other office as we may designate by written notice to
you). Presentation of such drafts and certificates may be made (a) by
physical presentation of such drafts and certificates or (b) by facsimile
transmission of such drafts and certificates received by us at (212) 412-
5111 (or at such other number as we may designate by written notice to you)
with prior telephone notice to us at (212) 412-5121/22, Attention: Dawn
Townsend or Pamela Seeley, (or at such other number as we may designate by
written notice to you) that such presentation is to be made by facsimile
transmission and with the original executed drafts and certificates to be
received by us not later than our close of business on the next business
day, it being understood that payments hereunder shall be made upon receipt
by us of such facsimile transmission; provided, however, that presentations
of drafts and certificates relating to Tender Drawings in respect of
Eligible Bonds in the Flexible Mode shall in all instances be made in
accordance with the foregoing clause (b). Drafts drawn under and in strict
compliance with the terms of this Letter of Credit will be duly honored by
us upon presentation thereof in accordance with this Paragraph 3 if
presented on or prior to 4:00 P.M. (New York City time) on the Credit
Termination Date as follows:
(i) Tender Drawings; Flexible Mode: In the case of drafts and
certificates relating to Tender Drawings in respect of Eligible Bonds
in the Flexible Mode presented in accordance with the foregoing clause
(b):
(A) if such drafts and certificates are presented as
aforesaid at or prior to 1:30 P.M. (New York City time) on a
business day, and provided that such drafts and certificates
strictly conform to the requirements of this Letter of Credit, we
will initiate a wire transfer of the amount so drawn to your
account indicated below at or prior to 3:30 P.M. (New York City
time) on the same business day;
(B) if such drafts and certificates are presented as
aforesaid after 1:30 P.M. but at or prior to 4:00 P.M. (New York
City time) on a business day, and provided that such drafts and
certificates strictly conform to the requirements of this Letter
of Credit, we will initiate a wire transfer of the amount so
drawn to your account indicated below at or prior to 10:00 A.M.
on the business day next succeeding the business day on which
such drafts and certificates were presented (notwithstanding that
such day of presentation may have been the Credit Termination
Date); and
(C) if such drafts and certificates are presented as
aforesaid after 4:00 P.M. (New York City time) on a business day,
and provided that such drafts and certificates strictly conform
to the requirements of this Letter of Credit, we will initiate a
wire transfer of the amount so drawn to your account indicated
below at or prior to 1:00 P.M. (New York City time) on the
business day next succeeding the business day on which such
drafts and certificates were presented (notwithstanding that such
day of presentation may have been the Credit Termination Date);
and
(ii) All Other Drawings: In the case of any other drafts and
certificates:
(A) if such drafts and certificates are presented as
aforesaid at or prior to 4:00 P.M. (New York City time) on a
business day, and provided that such drafts strictly conform to
the requirements of this Letter of Credit, we will initiate a
wire transfer of the amount so drawn to your account indicated
below at or prior to 10:00 A.M. (New York City time) on the
business day next succeeding the business day on which such
drafts and certificates were presented (notwithstanding that such
day of presentation may have been the Credit Termination Date);
and
(B) if such drafts and certificates are presented as
aforesaid after 4:00 P.M. (New York City time) on a business day,
and provided that such drafts and certificates strictly conform
to the requirements of this Letter of Credit, we will initiate a
wire transfer of the amount so drawn to your account indicated
below at or prior to 1:00 P.M. (New York City time) on the
business day next succeeding the business day on which such
drafts and certificates were presented (notwithstanding that such
day of presentation may have been the Credit Termination Date).
Wire transfers of funds paid in respect of any drawing hereunder shall be
made to your Account No. 1000-551 at Security N.Y.C. (ABA #0260-05885),
reference: Corporate Trust Department, Attention: Stephen Bruce, or to such
other account as you may from time to time specify to us in writing. All
payments made by us under this Letter of Credit will be made with our own
funds and not with any funds of the Account Party or the Issuer.
(4) Reductions. The Interest Component shall be reduced immediately
following our honoring any draft drawn hereunder to pay unpaid interest on
Eligible Bonds or to pay that portion of the purchase price or redemption
price corresponding to unpaid interest on Eligible Bonds, in each case by
an amount equal to the amount of such draft (any such drawing being an
"Interest Drawing"). The Principal Component shall be reduced immediately
following our honoring any draft drawn hereunder: (i) pursuant to Section
308(c)(ii) of the Indenture to pay that portion of purchase price
corresponding to principal of Eligible Bonds that are (A) subject to
mandatory tender for purchase pursuant to Section 301(d)(iii),
301(e)(iv)(B) or 301(f)(iii) of the Indenture or (B) tendered for purchase
by the holders thereof pursuant to Section 301(e)(iii) of the Indenture
(any such drawing in respect of the circumstances referred to in this
clause (i) being a "Tender Drawing"), (ii) pursuant to Section 308(c)(i) of
the Indenture to pay the principal of Eligible Bonds or that portion of the
redemption price of Eligible Bonds corresponding to principal, whether at
stated maturity, upon acceleration or upon redemption, or (iii) pursuant to
Section 308(c)(ii) of the Indenture to pay that portion of the purchase
price corresponding to principal of Eligible Bonds that are subject to
mandatory tender for purchase pursuant to Section 301(e)(iv)(A) of the
Indenture (any such drawing in respect of the circumstances referred to in
the foregoing clause (ii) or in this clause (iii) being a
"Redemption/Mandatory Purchase Drawing"), in each such case by an amount
equal to the amount of such draft. The Premium Component shall be reduced
immediately following our honoring any draft drawn hereunder to pay premium
on Eligible Bonds in connection with a Redemption/Mandatory Purchase
Drawing, by an amount equal to the amount of such draft.
Additionally, upon receipt of a Notice of Reduction in the form
of Exhibit 4 to this Letter of Credit purportedly executed by you, we will
reduce the Principal Component, Interest Component and Premium Component to
the amounts therein stated.
(5) Reinstatement. The Interest Component and the Principal
Component shall, from time to time, be reinstated by us in accordance with,
and only to the extent provided in, the following subparagraphs (i) and
(ii). In no event shall reductions in the Premium Component be reinstated.
(i) Interest Component. Reductions in the Interest Component
resulting from Interest Drawings shall be reinstated as follows:
(A) Immediately following each drawing hereunder to pay
unpaid interest on Eligible Bonds in the Flexible Mode or to pay
that portion of purchase price, but not redemption price,
corresponding to unpaid interest on Eligible Bonds in the
Flexible Mode, the amount so drawn shall be automatically
reinstated to the Interest Component unless, not later than the
business day preceding such drawing you shall have received
written notice from us that we will not reinstate the Interest
Component in the amount of such drawing. On the fifth day
following each drawing hereunder to pay accrued and unpaid
interest on Eligible Bonds that are not in the Flexible Mode, or
to pay that portion of purchase price, but not redemption price,
corresponding to accrued and unpaid interest on Eligible Bonds
that are not in the Flexible Mode, the amount so drawn shall be
automatically reinstated to the Interest Component, unless you
shall have theretofore received written notice from us that we
will not reinstate the Interest Component in the amount of such
drawing. Any notice of non-reinstatement delivered pursuant to
this subparagraph (i)(A) shall be in writing and shall be
delivered to you by hand delivery or facsimile transmission.
(B) If, subsequent to any such delivery of a notice of non-
reinstatement as aforesaid, we shall deliver to you, by hand
delivery or facsimile transmission, a Notice of Reinstatement in
the form of Exhibit 5 hereto, then, upon such delivery to you,
the Interest Component shall be immediately reinstated to the
extent specified in such Notice of Reinstatement.
(C) In no event shall the Interest Component be reinstated
to an amount in excess of the sum of: 1) 128 days' interest on
all Eligible Bonds that are 1991 Taxable Series D Bonds, computed
at the rate of 16% per annum on the basis of a year of 360 days
for the actual days elapsed, or such lesser rate of interest as
shall equal the Maximum Interest Rate (as defined in the
Indenture) in effect under the Indenture with respect to such
Eligible Bonds and 2) 45 days' interest on all Eligible Bonds
that are 1992 Tax-Exempt Series D Bonds, computed at the rate of
12% per annum on the basis of a year of 365 or 366 days (as
applicable) for the actual days elapsed, or such lesser rate of
interest as shall equal the Maximum Interest Rate in effect under
the Indenture with respect to such Eligible Bonds.
(ii) Principal Component. Reductions in the Principal Component
resulting from Redemption/Mandatory Purchase Drawings shall in no
event be reinstated. Reductions in the Principal Component resulting
from Tender Drawings shall be reinstated as follows:
(A) Immediately upon receipt by us of proceeds from the
remarketing of Pledged Bonds (as defined in the Indenture), or of
written notice from you that you have received such proceeds (or
a window receipt guaranteeing same day payment in immediately
available funds of such proceeds as contemplated by Section
312(a) of the Indenture), the Principal Component shall be
reinstated automatically by the amount of such proceeds.
(B) Immediately upon your receipt from us, by hand delivery
or facsimile transmission, of a Notice of Reinstatement in the
form of Exhibit 5 hereto, the Principal Component shall be
immediately reinstated to the extent specified in such Notice of
Reinstatement.
(C) In no event shall the Principal Component be reinstated
to an amount in excess of the aggregate principal amount of
Eligible Bonds then outstanding under the Indenture.
Any Notice of Reinstatement delivered to you in the form set forth in
Exhibit 5 hereto, whether delivered pursuant to subparagraph (i) or
subparagraph (ii), above, may be combined, in a single such Notice, with
any other Notice of Reinstatement delivered pursuant to the other such
subparagraph.
(6) Notices. Communications (other than drawings) with respect to
this Letter of Credit shall be in writing and shall be addressed to us at
222 Broadway, 12th Floor, New York, New York 10038, Attention: Utilities
Finance Group (or at such other office as we may designate by written
notice to you) or by facsimile transmission received by us at: (212) 412-
7575, with a copy to Credit Enhancement Unit (telecopy (212) 412-6969) (or
at such other telephone number as we may designate by written notice to
you) specifically referring to the number of this Letter of Credit.
(7) Transfer. This Letter of Credit is transferable in its entirety
(but not in part) to any transferee who has succeeded you as Paying Agent
under the Indenture and may be successively so transferred. Transfer of
the available balance under this Letter of Credit to such transferee shall
be effected by the presentation to us of this Letter of Credit accompanied
by a certificate substantially in form set forth in Exhibit 6.
(8) Governing Law, Etc. Except as otherwise provided herein, this
Letter of Credit shall be governed by and construed in accordance with the
Uniform Customs and Practices for Documentary Credits (1983 Revision)
Publication No. 400 of the International Chamber of Commerce ("UCP") and,
to the extent not inconsistent with the UCP, the laws of the State of New
York, including the Uniform Commercial Code as in effect in the State of
New York. This Letter of Credit sets forth in full our undertaking, and,
except as expressly set forth herein, such undertaking shall not in any way
be modified, amended, amplified or limited by reference to any document,
instrument or agreement referred to herein (including, without limitation,
the Bonds, the Indenture and the Reimbursement Agreement), except only the
certificates and the drafts referred to herein; and any such reference
shall not be deemed to incorporate herein by reference any document,
instrument or agreement except for such certificates and such drafts.
Whenever and wherever the terms of this Letter of Credit shall refer to the
purpose of a draft hereunder, or the provisions of any agreement or
document pursuant to which such draft may be presented hereunder, such
purpose or provisions shall be conclusively determined by reference to the
certificate accompanying such draft; in furtherance of this sentence,
whether any drawing is in respect of payment of regularly scheduled
interest on the Bonds or of principal of or interest on the Bonds upon
scheduled or accelerated maturity or is a Tender Drawing or a
Redemption/Mandatory Purchase Drawing shall be conclusively determined by
reference to the certificate accompanying such drawing.
Very truly yours,
BARCLAYS BANK PLC,
NEW YORK BRANCH
By /s/Elizabeth Dempsey
Title:Associate Director
By /s/Joseph Carlani
Title: Associate Director
EXHIBIT 1
TO THE LETTER OF CREDIT
CERTIFICATE FOR TENDER DRAWING
The undersigned, a duly authorized officer of __________________ ,
(the "Paying Agent"), hereby certifies as follows to Barclays Bank PLC, New
York Branch (the "Bank"), with reference to Amended and Restated
Irrevocable Letter of Credit No. _________________ (the "Letter of Credit")
issued by the Bank in favor of the Paying Agent. Terms defined in the
Letter of Credit and used but not defined herein shall have the meanings
given them in the Letter of Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for the
holders of the Bonds.
(2) The Paying Agent is making a Tender Drawing under the Letter of
Credit in the amount of $_______________ pursuant to Section 308(c)(ii) of
the Indenture to pay that portion of the purchase price corresponding to
principal of Eligible Bonds that are
[subject to mandatory tender for purchase pursuant to Section
[301(d)(iii)] [301(e)(iv)(B)] [301(f)(iii)] of the Indenture.]
[tendered for purchase by the holders thereof pursuant to Section
301(e)(iii) of the Indenture.]
(3) The amount of purchase price corresponding to principal of
Eligible Bonds and with respect to the payment of which the Paying Agent,
pursuant to the foregoing Sections of the Indenture, is drawing under the
Letter of Credit, is as follows, and the amount of the draft accompanying
this Certificate does not exceed such amount:
Principal: $__________________
(4) The amount of the draft accompanying this Certificate being drawn
in respect of purchase price corresponding to principal of Eligible Bonds,
as indicated in paragraph (3), above, does not exceed the Principal
Component of the Letter of Credit. The amount of the draft accompanying
this Certificate in respect of purchase price corresponding to principal of
such Bonds has been computed in accordance with the terms and conditions of
such Eligible Bonds and the Indenture.
(5) No proceeds of this drawing will be applied to the payment of
purchase price of any Bonds that are not Eligible Bonds, including any
Pledged Bonds (as defined in the Indenture), any Company Bonds (as defined
in the Indenture) and any Bonds in the Fixed Rate Mode (as defined in the
Indenture).
[(6) The Eligible Bonds in respect of which this drawing is being made
are Eligible Bonds in the Flexible Mode, and payment of this drawing shall
be made in accordance with Paragraph 3(i) of the Letter of Credit.]
[(6) The Eligible Bonds in respect of which this drawing is being made
are not Eligible Bonds in the Flexible Mode, and payment of this drawing
shall be made in accordance with Paragraph 3(ii) of the Letter of Credit].
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this
Certificate as of the ________ day of _______________, 19___.
[NAME OF PAYING AGENT],
as Paying Agent
By ___________________________________
Title:
EXHIBIT 2
TO THE LETTER OF CREDIT
CERTIFICATE FOR REDEMPTION/
MANDATORY PURCHASE DRAWING
The undersigned, a duly authorized officer of __________________, (the
"Paying Agent"), hereby certifies as follows to Barclays Bank PLC, New York
Branch (the "Bank"), with reference to Amended and Restated Irrevocable
Letter of Credit No. _____________________ (the "Letter of Credit") issued
by the Bank in favor of the Paying Agent. Terms defined in the Letter of
Credit and used but not defined herein shall have the meanings given them
in the Letter of Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for the
holders of the Bonds.
(2) The Paying Agent is making a Redemption/Mandatory Purchase
Drawing under the Letter of Credit in the amount of $______________
[pursuant to Section 308(c)(i) and Section 605 of the Indenture
to pay the principal of Eligible Bonds due pursuant to the
Indenture upon maturity or as a result of acceleration of such
Eligible Bonds in accordance with the Indenture and the terms of
such Eligible Bonds.]
[pursuant to Section 308(c)(i) of the Indenture to pay that
portion of the redemption price corresponding to principal of
[and premium on] Eligible Bonds due pursuant to the Indenture
upon redemption of such Eligible Bonds in accordance with the
Indenture and the terms of such Eligible Bonds.]
[pursuant to Section 308(c)(ii) of the Indenture to pay that
portion of the purchase price of Eligible Bonds corresponding to
principal that are subject to mandatory tender for purchase
pursuant to Section 301(e)(iv)(A) of the Indenture.]
(3) The amount of [principal of] [redemption price corresponding to
principal of] [and premium on] [purchase price corresponding to principal
of] Eligible Bonds which is due and payable and with respect to the payment
of which the Paying Agent, pursuant to the foregoing Section[s] of the
Indenture, is to draw under the Letter of Credit is as follows, and the
amount of the draft accompanying this Certificate does not exceed such
amount:
Principal: $__________________
[Premium: $__________________]
(4) The amount of the draft accompanying this Certificate being drawn
in respect of payment of [principal] [redemption price corresponding to
principal] [purchase price corresponding to principal] of Eligible Bonds,
as indicated in paragraph (3), above, does not exceed the Principal
Component of the Letter of Credit. [The amount of the draft accompanying
this Certificate being drawn in respect of that portion of the redemption
price of Eligible Bonds corresponding to premium, as indicated in paragraph
(3), above, does not exceed the Premium Component of the Letter of Credit.]
The amount of the draft accompanying this Certificate in respect of payment
of [principal] [redemption price corresponding to principal] [and premium]
[purchase price corresponding to principal] of such Eligible Bonds has been
computed in accordance with the terms and conditions of such Eligible Bonds
and the Indenture.
(5) No proceeds of this drawing will be applied to the payment of
principal, redemption price (including premium, if any) or purchase price
of any Bonds that are not Eligible Bonds, including any Pledged Bonds (as
defined in the Indenture), any Company Bonds (as defined in the Indenture),
and any Bonds in the Fixed Rate Mode (as defined in the Indenture).
(6) Payment of this drawing shall be made in accordance with
Paragraph 3(ii) of the Letter of Credit.
[(7) The draft accompanying this Certificate is the final draft to be
drawn under the Letter of Credit, and, upon the honoring of such draft, the
Letter of Credit will expire in accordance with its terms.]
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this
Certificate as of the ________day of _______________, 19___.
[NAME OF PAYING AGENT],
as Paying Agent
By ___________________________________
Title:
EXHIBIT 3
TO THE LETTER OF CREDIT
CERTIFICATE FOR INTEREST DRAWING
The undersigned, a duly authorized officer of __________________, (the
"Paying Agent"), hereby certifies as follows to Barclays Bank PLC, New York
Branch (the "Bank"), with reference to Amended and Restated Irrevocable
Letter of Credit No. ___________ (the "Letter of Credit") issued by the
Bank in favor of the Paying Agent. Terms defined in the Letter of Credit
and used but not defined herein shall have the meanings given them in the
Letter of Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for the
holders of the Bonds.
(2) The Paying Agent is making a drawing under the Letter of Credit
in the amount of $_______________ with respect to [the payment of interest]
[the payment of the portion of redemption price corresponding to interest]
[the payment of the portion of purchase price corresponding to interest] on
Eligible Bonds in accordance with the Indenture.
(3) The amount of [interest] [redemption price corresponding to
interest] [purchase price corresponding to interest] on Eligible Bonds that
is due and owing is as follows, and the amount of the draft accompanying
this Certificate does not exceed such amount:
Interest: __________________
(4) The amount of the draft accompanying this Certificate being drawn
in respect of payment of [interest] [redemption price corresponding to
interest] [purchase price corresponding to interest] on Eligible Bonds, as
indicated in paragraph (3), above, does not exceed the Interest Component
of the Letter of Credit. The amount of the draft accompanying this
Certificate in respect of payment of [interest] [redemption price
corresponding to interest] [purchase price corresponding to interest] on
Eligible Bonds has been computed in accordance with the terms and
conditions of such Eligible Bonds and the Indenture.
(5) Payment of this drawing shall be made in accordance with
Paragraph 3(ii) of the Letter of Credit.
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this
Certificate as of the ________ day of _______________, 19___.
[NAME OF PAYING AGENT],
as Paying Agent
By ___________________________________
Title:
EXHIBIT 4
TO THE LETTER OF CREDIT
NOTICE OF REDUCTION
The undersigned, a duly authorized officer of _____________________,
(the "Paying Agent"), hereby certifies as follows to Barclays Bank PLC, New
York Branch (the "Bank"), with reference to Amended and Restated
Irrevocable Letter of Credit No. _____________________ (the "Letter of
Credit") issued by the Bank in favor of the Paying Agent. Terms defined in
the Letter of Credit and used but not defined herein shall have the
meanings given them in the Letter of Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for
the holders of the Bonds.
(2) As of the date hereof, the aggregate principal amount of
Eligible Bonds (including for this purpose all Pledged Bonds and all
Company Bonds) outstanding is
Principal: $__________________
(3) You are hereby directed to reduce the [Principal] [Premium]
[and] [Interest] Components of the Letter of Credit as follows:
[The Principal Component of the Letter of Credit is reduced
to $__________________.]
[The Premium Component of the Letter of Credit is reduced to
$__________________.]
[The Interest Component of the Letter of Credit is reduced
to $__________________.]
IN WITNESS WHEREOF, the Paying Agent has executed and delivered
this Certificate as of the ________ day of _______________, 19___.
[NAME OF PAYING AGENT],
as Paying Agent
By ___________________________________
Title:
EXHIBIT 5
TO THE LETTER OF CREDIT
NOTICE OF REINSTATEMENT
The undersigned, a duly authorized officer of Barclays Bank PLC, New York
Branch (the "Bank"), hereby gives the following notice to
_________________, as paying agent (the "Paying Agent"), with reference to
Amended and Restated Irrevocable Letter of Credit No. __________________
(the "Letter of Credit") issued by the Bank in favor of the Paying Agent.
Terms defined in the Letter of Credit and used but not defined herein have
the meanings given them in the Letter of Credit.
The Bank hereby notifies you that:
[1.] [Pursuant to Paragraph 5(i)(B) of the Letter of Credit and Section
2.04(b)(ii) of the Reimbursement Agreement, the Interest Component has
been reinstated by $________________.]
[2.] [Pursuant to Paragraph 5(ii)(B) of the Letter of Credit and Section
2.04(c) of the Reimbursement Agreement, the Principal Component has
been reinstated by $_________________.]
IN WITNESS WHEREOF, the Bank has executed and delivered this Notice of
Reinstatement as of the ________ day of _______________, 19___
BARCLAYS BANK PLC,
NEW YORK BRANCH
By ___________________________________
Title:
EXHIBIT 6
TO THE LETTER OF CREDIT
INSTRUCTIONS TO TRANSFER
__________________, 19___
Re: Amended and Restated Irrevocable Letter of Credit
No. __________________
Gentlemen:
The undersigned, as Paying Agent under that certain Series D Loan and
Trust Agreement, dated as of May 1, 1991, as supplemented by a First
Supplement thereto dated as of December 1, 1992 (as so supplemented, the
"Indenture"), by and among the Business Finance Authority (formerly The
Industrial Development Authority) of the State of New Hampshire (the
"Issuer"), Public Service Company of New Hampshire and the State Street
Bank and Trust Company, as Trustee, is named as beneficiary in the Letter
of Credit referred to above (the "Letter of Credit"). The Transferee named
below has succeeded the undersigned as Paying Agent under such Indenture.
___________________________________
(Name of Transferee)
___________________________________
(Address)
Therefore, for value received, the undersigned hereby irrevocably
instructs you to transfer to such Transferee all rights of the undersigned
to draw under the Letter of Credit.
Such Transferee shall hereafter have the sole rights as beneficiary
under the Letter of Credit; provided, however, that no rights shall be
deemed to have been transferred to such Transferee until such transfer
complies with the requirements of the Letter of Credit pertaining to
transfers.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Certificate as of the ________ day _______________, 19___.
[NAME OF RETIRING PAYING AGENT],
as Paying Agent
By ___________________________________
Title:
The undersigned, [Name of Transferee], hereby accepts the
foregoing transfer of rights under the Letter of Credit.
[Name of Transferee]
By ___________________________________
Title:
Address of Principal
Corporate Trust Office:
[insert address]
111 Wall Street
New York, New York 10005
Exhibit 4.3.10.1
AMENDED AND RESTATED
IRREVOCABLE LETTER OF CREDIT
NO. NY0389-30008830
December 15, 1993
BankAmerica National Trust Company
2 Rector Street
New York, New York 10006
Attention: Corporate Trust Division
Dear Sir or Madam:
We hereby establish, at the request and for the account of Public
Service Company of New Hampshire (the "Account Party"), in your favor, as
paying agent (the "Paying Agent") under that certain Series E Loan and
Trust Agreement, dated as of May 1, 1991, as supplemented by a First
Supplement thereto dated as of December 1, 1993, (as so supplemented, the
"Indenture"), by and among the Business Finance Authority (formerly The
Industrial Development Authority) of the State of New Hampshire (the
"Issuer"), the Account Party and State Street Bank and Trust Company, as
trustee (the "Trustee"), pursuant to which $69,700,000 in outstanding
aggregate principal amount of the Issuer's Pollution Control Revenue Bonds
(Public Service Company of New Hampshire Project - 1991 Taxable Series E)
and $44,800,000 in outstanding aggregate principal amount of the Issuer's
Pollution Control Refunding Revenue Bonds (Public Service Company of New
Hampshire Project - 1993 Tax-Exempt Series E) (such 1991 Taxable Series E
and 1993 Tax-Exempt Series E bonds being hereinafter referred to,
collectively, as the "Bonds"), have been issued, our Amended and Restated
Irrevocable Letter of Credit No. NY0389-30008830, in the amount of
US$119,129,000 (ONE HUNDRED NINETEEN MILLION ONE HUNDRED TWENTY-NINE
THOUSAND AND NO ONE-HUNDREDTHS UNITED STATES DOLLARS), subject to reduction
and reinstatement as provided below. This Amended and Restated Irrevocable
Letter of Credit No. NY0389-30008830 amends, restates and supersedes our
Irrevocable Letter of Credit No. NY0389-30008830 issued to you on May 16,
1991.
(1) Credit Termination Date. This Letter of Credit shall expire on
the earliest to occur of (i) May 16, 1995 (the "Stated Termination Date"),
(ii) the date upon which we honor a draft accompanying a written and
completed certificate signed by you in substantially the form of Exhibit 2
attached hereto, and stating therein that such draft is the final draft to
be drawn under this Letter of Credit and that, upon the honoring of such
draft, this Letter of Credit will expire in accordance with its terms,
(iii) the date upon which we receive a written certificate signed by you
and stating therein that no Bonds entitled to the benefits of this Letter
of Credit (as determined in accordance with the Indenture) ("Eligible
Bonds") are "outstanding" under the Indenture, (iv) the fifth business day
following receipt by you and the Trustee of written notice from us that an
Event of Default (as defined below) has occurred under the Reimbursement
Agreement (as defined below) and of our determination to terminate this
Letter of Credit on such fifth business day and (v) the date upon which we
receive a written certificate signed by you and stating therein that a
substitute or replacement Credit Facility (as defined in the Indenture) has
been provided pursuant to Section 317 of the Indenture (such earliest date
being the "Credit Termination Date").
As used herein, the term "business day" shall mean any day of the year
(i) that is not a Sunday or legal holiday or a day on which banking
institutions are authorized pursuant to law to close, (ii) that is not a
day on which the corporate trust office of the First Mortgage Bond Trustee
(as defined in the Indenture) is not open for business, (iii) that is a day
on which banks are not required or authorized to close in New York City and
(iv) that is a day on which banking institutions in all of the cities in
which the principal offices of the Trustee, the Paying Agent and the
Remarketing Agent (as defined in the Indenture) are located are not
required or authorized to remain closed and on which the New York Stock
Exchange is not closed.
As used herein "Reimbursement Agreement" shall mean the Series E
Letter of Credit and Reimbursement Agreement, dated as of May 1, 1991,
between the Account Party, us and certain Participating Banks referred to
therein, and the term "Event of Default" shall mean an "Event of Default"
as that term is defined in the Reimbursement Agreement.
(2) Principal, Interest and Premium Components. The aggregate amount
which may be drawn under this Letter of Credit, subject to reductions in
amount and reinstatement as provided below, is US$119,129,000.00 (ONE
HUNDRED NINETEEN MILLION ONE HUNDRED TWENTY-NINE THOUSAND AND NO ONE-
HUNDREDTHS UNITED STATES DOLLARS), of which the aggregate amounts set forth
below may be drawn as indicated.
(i) An aggregate amount not exceeding US$114,500,000.00 (ONE
HUNDRED FOURTEEN MILLION FIVE HUNDRED THOUSAND AND NO ONE-HUNDREDTHS
UNITED STATES DOLLARS), as such amount may be reduced and reinstated
as provided below, (the "Principal Component") may be drawn in respect
of payment of principal (whether upon scheduled or accelerated
maturity, or upon redemption) of Eligible Bonds or the portion of the
purchase price of Eligible Bonds corresponding to principal.
(ii) An aggregate amount not exceeding US$4,629,000.00 (FOUR
MILLION SIX HUNDRED TWENTY-NINE THOUSAND AND NO ONE-HUNDREDTHS UNITED
STATES DOLLARS), as such amount may be reduced and reinstated as
provided below, (the "Interest Component") may be drawn in respect of
payment of:
(A) accrued and unpaid interest on Eligible Bonds not in the
Flexible Mode (as defined in the Indenture) or that portion of
the redemption price or purchase price of such Eligible Bonds
corresponding to accrued and unpaid interest, but not more than
an amount equal to accrued and unpaid interest on such Eligible
Bonds for up to a maximum of 1) 128 days immediately preceding
the date of such drawing (in the case of Eligible Bonds that are
1991 Taxable Series E Bonds) and 2) 45 days immediately preceding
the date of such drawing (in the case of Eligible Bonds that are
1993 Tax-Exempt Series E Bonds); and
(B) unpaid interest (whether accrued or to accrue) on
Eligible Bonds in the Flexible Mode or that portion of the
redemption price or purchase price of such Eligible Bonds
corresponding to such interest, but not more than an amount equal
to such interest on such Eligible Bonds for up to a maximum of 1)
128 days immediately preceding the next Purchase Date (as defined
in the Indenture) for each such Eligible Bond (in the case of
Eligible Bonds that are 1991 Taxable Series E Bonds) (or, if
interest on any such Eligible Bond was not paid on the most
recent Purchase Date for such Bond, for up to a maximum of 128
days immediately preceding the date of such drawing) and 2) 45
days immediately preceding such Purchase Date (in the case of
Eligible Bonds that are 1993 Tax-Exempt Series E Bonds) (or, if
interest on any such Eligible Bond was not paid on the most
recent Purchase Date for such Bond, for up to a maximum of 45
days immediately preceding the date of such drawing);
calculated, in each case referred to in the foregoing clause (A) or
clause (B) at a maximum rate of:
(X) sixteen percent (16%) per annum on the basis of a year
of 360 days for the actual days elapsed, or such lesser rate of
interest as shall equal the Maximum Interest Rate (as defined in
the Indenture) in effect under the Indenture with respect to such
Eligible Bonds that are 1991 Taxable Series E Bonds (whether or
not in the Flexible Mode); and
(Y) twelve percent (12%) per annum on the basis of a year of
365 or 366 days (as applicable) for the actual days elapsed, or
such lesser rate of interest as shall equal the Maximum Interest
Rate in effect under the Indenture with respect to such Eligible
Bonds that are 1993 Tax-Exempt Series E Bonds (whether or not in
the Flexible Mode).
(iii) An aggregate amount not exceeding US$0.00 (ZERO UNITED
STATES DOLLARS) may be drawn in respect of premium on Eligible Bonds
(the "Premium Component"). If, subsequent to the date hereof, the
Premium Component shall be increased by us at the request of the
Account Party, the Premium Component shall be subject to reduction as
provided below, and amounts drawn in respect thereof shall not be
subject to reinstatement.
(3) Drawings. Funds under this Letter of Credit are available to you
against (i) your draft, stating on its face: "Drawn under Amended and
Restated Irrevocable Letter of Credit No. NY0389-30008830, dated December
15, 1993", and (ii) the appropriate certificate specified below,
purportedly executed by you and appropriately completed.
Exhibit Setting Forth
Type of Drawing Form of Certificate Required
Tender Drawing Exhibit 1
(as hereinafter defined)
Redemption/Mandatory Exhibit 2
Purchase Drawing
(as hereinafter defined)
Interest Drawing Exhibit 3
(as hereinafter
defined)
Drafts and certificates hereunder shall be dated the date of
presentation and shall be presented at our office located at 111 Wall
Street, 16th Floor, New York, New York, Attention: Letter of Credit
Department (or at such other office as we may designate by written notice
to you). Presentation of such drafts and certificates may be made (a) by
physical presentation of such drafts and certificates or (b) by facsimile
transmission of such drafts and certificates received by us at (212) 344-
3378 or (212) 269-9657 (or at such other number as we may designate by
written notice to you) with prior telephone notice to us at (212) 657-9554,
Attention: Joseph Jaklitsch, Trade Services (or at such other number as we
may designate by written notice to you) that such presentation is to be
made by facsimile transmission and with the original executed drafts and
certificates to be received by us not later than our close of business on
the next business day, it being understood that payments hereunder shall be
made upon receipt by us of such facsimile transmission; provided, however,
that presentations of drafts and certificates relating to Tender Drawings
in respect of Eligible Bonds in the Flexible Mode shall in all instances be
made in accordance with the foregoing clause (b). Drafts drawn under and
in strict compliance with the terms of this Letter of Credit will be duly
honored by us upon presentation thereof in accordance with this Paragraph 3
if presented on or prior to 4:00 P.M. (New York City time) on the Credit
Termination Date as follows:
(i) Tender Drawings; Flexible Mode: In the case of drafts and
certificates relating to Tender Drawings in respect of Eligible Bonds
in the Flexible Mode presented in accordance with the foregoing clause
(b):
(A) if such drafts and certificates are presented as
aforesaid at or prior to 1:30 P.M. (New York City time) on a
business day, and provided that such drafts and certificates
strictly conform to the requirements of this Letter of Credit, we
will initiate a wire transfer of the amount so drawn to your
account indicated below at or prior to 3:30 P.M. (New York City
time) on the same business day;
(B) if such drafts and certificates are presented as
aforesaid after 1:30 P.M. but at or prior to 4:00 P.M. (New York
City time) on a business day, and provided that such drafts and
certificates strictly conform to the requirements of this Letter
of Credit, we will initiate a wire transfer of the amount so
drawn to your account indicated below at or prior to 10:00 A.M.
on the business day next succeeding the business day on which
such drafts and certificates were presented (notwithstanding that
such day of presentation may have been the Credit Termination
Date); and
(C) if such drafts and certificates are presented as
aforesaid after 4:00 P.M. (New York City time) on a business day,
and provided that such drafts and certificates strictly conform
to the requirements of this Letter of Credit, we will initiate a
wire transfer of the amount so drawn to your account indicated
below at or prior to 1:00 P.M. (New York City time) on the
business day next succeeding the business day on which such
drafts and certificates were presented (notwithstanding that such
day of presentation may have been the Credit Termination Date);
and
(ii) All Other Drawings: In the case of any other drafts and
certificates:
(A) if such drafts and certificates are presented as
aforesaid at or prior to 4:00 P.M. (New York City time) on a
business day, and provided that such drafts strictly conform to
the requirements of this Letter of Credit, we will initiate a
wire transfer of the amount so drawn to your account indicated
below at or prior to 10:00 A.M. (New York City time) on the
business day next succeeding the business day on which such
drafts and certificates were presented (notwithstanding that such
day of presentation may have been the Credit Termination Date);
and
(B) if such drafts and certificates are presented as
aforesaid after 4:00 P.M. (New York City time) on a business day,
and provided that such drafts and certificates strictly conform
to the requirements of this Letter of Credit, we will initiate a
wire transfer of the amount so drawn to your account indicated
below at or prior to 1:00 P.M. (New York City time) on the
business day next succeeding the business day on which such
drafts and certificates were presented (notwithstanding that such
day of presentation may have been the Credit Termination Date).
Wire transfers of funds paid in respect of any drawing hereunder shall be
made to your Account No. 1000-551 at BK AMER (ABA #0260-05885), reference:
Corporate Trust Department, Attention: Stephen Bruce, or to such other
account as you may from time to time specify to us in writing. All
payments made by us under this Letter of Credit will be made with our own
funds and not with any funds of the Account Party or the Issuer.
(4) Reductions. The Interest Component shall be reduced immediately
following our honoring any draft drawn hereunder to pay unpaid interest on
Eligible Bonds or to pay that portion of the purchase price or redemption
price corresponding to unpaid interest on Eligible Bonds, in each case by
an amount equal to the amount of such draft (any such drawing being an
"Interest Drawing"). The Principal Component shall be reduced immediately
following our honoring any draft drawn hereunder: (i) pursuant to Section
308(c)(ii) of the Indenture to pay that portion of purchase price
corresponding to principal of Eligible Bonds that are (A) subject to
mandatory tender for purchase pursuant to Section 301(d)(iii),
301(e)(iv)(B) or 301(f)(iii) of the Indenture or (B) tendered for purchase
by the holders thereof pursuant to Section 301(e)(iii) of the Indenture
(any such drawing in respect of the circumstances referred to in this
clause (i) being a "Tender Drawing"), (ii) pursuant to Section 308(c)(i) of
the Indenture to pay the principal of Eligible Bonds or that portion of the
redemption price of Eligible Bonds corresponding to principal, whether at
stated maturity, upon acceleration or upon redemption, or (iii) pursuant to
Section 308(c)(ii) of the Indenture to pay that portion of the purchase
price corresponding to principal of Eligible Bonds that are subject to
mandatory tender for purchase pursuant to Section 301(e)(iv)(A) of the
Indenture (any such drawing in respect of the circumstances referred to in
the foregoing clause (ii) or in this clause (iii) being a
"Redemption/Mandatory Purchase Drawing"), in each such case by an amount
equal to the amount of such draft. The Premium Component shall be reduced
immediately following our honoring any draft drawn hereunder to pay premium
on Eligible Bonds in connection with a Redemption/Mandatory Purchase
Drawing, by an amount equal to the amount of such draft.
Additionally, upon receipt of a Notice of Reduction in the form
of Exhibit 4 to this Letter of Credit purportedly executed by you, we will
reduce the Principal Component, Interest Component and Premium Component to
the amounts therein stated.
(5) Reinstatement. The Interest Component and the Principal
Component shall, from time to time, be reinstated by us in accordance with,
and only to the extent provided in, the following subparagraphs (i) and
(ii). In no event shall reductions in the Premium Component be reinstated.
(i) Interest Component. Reductions in the Interest Component
resulting from Interest Drawings shall be reinstated as follows:
(A) Immediately following each drawing hereunder to pay
unpaid interest on Eligible Bonds in the Flexible Mode or to pay
that portion of purchase price, but not redemption price,
corresponding to unpaid interest on Eligible Bonds in the
Flexible Mode, the amount so drawn shall be automatically
reinstated to the Interest Component unless, not later than the
business day preceding such drawing you shall have received
written notice from us that we will not reinstate the Interest
Component in the amount of such drawing. On the fifth day
following each drawing hereunder to pay accrued and unpaid
interest on Eligible Bonds that are not in the Flexible Mode, or
to pay that portion of purchase price, but not redemption price,
corresponding to accrued and unpaid interest on Eligible Bonds
that are not in the Flexible Mode, the amount so drawn shall be
automatically reinstated to the Interest Component, unless you
shall have theretofore received written notice from us that we
will not reinstate the Interest Component in the amount of such
drawing. Any notice of non-reinstatement delivered pursuant to
this subparagraph (i)(A) shall be in writing and shall be
delivered to you by hand delivery or facsimile transmission.
(B) If, subsequent to any such delivery of a notice of non-
reinstatement as aforesaid, we shall deliver to you, by hand
delivery or facsimile transmission, a Notice of Reinstatement in
the form of Exhibit 5 hereto, then, upon such delivery to you,
the Interest Component shall be immediately reinstated to the
extent specified in such Notice of Reinstatement.
(C) In no event shall the Interest Component be reinstated
to an amount in excess of the sum of: 1) 128 days' interest on
all Eligible Bonds that are 1991 Taxable Series E Bonds, computed
at the rate of 16% per annum on the basis of a year of 360 days
for the actual days elapsed, or such lesser rate of interest as
shall equal the Maximum Interest Rate (as defined in the
Indenture) in effect under the Indenture with respect to such
Eligible Bonds and 2) 45 days' interest on all Eligible Bonds
that are 1993 Tax-Exempt Series E Bonds, computed at the rate of
12% per annum on the basis of a year of 365 or 366 days (as
applicable) for the actual days elapsed, or such lesser rate of
interest as shall equal the Maximum Interest Rate in effect under
the Indenture with respect to such Eligible Bonds.
(ii) Principal Component. Reductions in the Principal Component
resulting from Redemption/Mandatory Purchase Drawings shall in no
event be reinstated. Reductions in the Principal Component resulting
from Tender Drawings shall be reinstated as follows:
(A) Immediately upon receipt by us of proceeds from the
remarketing of Pledged Bonds (as defined in the Indenture), or of
written notice from you that you have received such proceeds (or
a window receipt guaranteeing same day payment in immediately
available funds of such proceeds as contemplated by Section
312(a) of the Indenture), the Principal Component shall be
reinstated automatically by the amount of such proceeds.
(B) Immediately upon your receipt from us, by hand delivery
or facsimile transmission, of a Notice of Reinstatement in the
form of Exhibit 5 hereto, the Principal Component shall be
immediately reinstated to the extent specified in such Notice of
Reinstatement.
(C) In no event shall the Principal Component be reinstated
to an amount in excess of the aggregate principal amount of
Eligible Bonds then outstanding under the Indenture.
Any Notice of Reinstatement delivered to you in the form set forth in
Exhibit 5 hereto, whether delivered pursuant to subparagraph (i) or
subparagraph (ii), above, may be combined, in a single such Notice, with
any other Notice of Reinstatement delivered pursuant to the other such
subparagraph.
(6) Notices. Communications (other than drawings) with respect to
this Letter of Credit shall be in writing and shall be addressed to us at
111 Wall Street, New York, New York 10005, Attention: Letter of Credit
Department (or at such other office as we may designate by written notice
to you) or by facsimile transmission received by us at one of the following
telephone numbers: (212) 344-3378 or (212) 269-9657 (or at such other
telephone number as we may designate by written notice to you) specifically
referring to the number of this Letter of Credit.
(7) Transfer. This Letter of Credit is transferable in its entirety
(but not in part) to any transferee who has succeeded you as Paying Agent
under the Indenture and may be successively so transferred. Transfer of
the available balance under this Letter of Credit to such transferee shall
be effected by the presentation to us of this Letter of Credit accompanied
by a certificate substantially in form set forth in Exhibit 6.
(8) Governing Law, Etc. Except as otherwise provided herein, this
Letter of Credit shall be governed by and construed in accordance with the
Uniform Customs and Practices for Documentary Credits (1983 Revision)
Publication No. 400 of the International Chamber of Commerce ("UCP") and,
to the extent not inconsistent with the UCP, the laws of the State of New
York, including the Uniform Commercial Code as in effect in the State of
New York. This Letter of Credit sets forth in full our undertaking, and,
except as expressly set forth herein, such undertaking shall not in any way
be modified, amended, amplified or limited by reference to any document,
instrument or agreement referred to herein (including, without limitation,
the Bonds, the Indenture and the Reimbursement Agreement), except only the
certificates and the drafts referred to herein; and any such reference
shall not be deemed to incorporate herein by reference any document,
instrument or agreement except for such certificates and such drafts.
Whenever and wherever the terms of this Letter of Credit shall refer to the
purpose of a draft hereunder, or the provisions of any agreement or
document pursuant to which such draft may be presented hereunder, such
purpose or provisions shall be conclusively determined by reference to the
certificate accompanying such draft; in furtherance of this sentence,
whether any drawing is in respect of payment of regularly scheduled
interest on the Bonds or of principal of or interest on the Bonds upon
scheduled or accelerated maturity or is a Tender Drawing or a
Redemption/Mandatory Purchase Drawing shall be conclusively determined by
reference to the certificate accompanying such drawing.
Very truly yours,
CITIBANK, N.A.
By /s/Paul T. Addison
Title:Attorney in Fact
EXHIBIT 1
TO THE LETTER OF CREDIT
CERTIFICATE FOR TENDER DRAWING
The undersigned, a duly authorized officer of __________________, (the
"Paying Agent"), hereby certifies as follows to Citibank, N.A. (the
"Bank"), with reference to Amended and Restated Irrevocable Letter of
Credit No. _________________ (the "Letter of Credit") issued by the Bank in
favor of the Paying Agent. Terms defined in the Letter of Credit and used
but not defined herein shall have the meanings given them in the Letter of
Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for the
holders of the Bonds.
(2) The Paying Agent is making a Tender Drawing under the Letter of
Credit in the amount of $_______________ pursuant to Section 308(c)(ii) of
the Indenture to pay that portion of the purchase price corresponding to
principal of Eligible Bonds that are
[subject to mandatory tender for purchase pursuant to Section
[301(d)(iii)] [301(e)(iv)(B)] [301(f)(iii)] of the Indenture.]
[tendered for purchase by the holders thereof pursuant to Section
301(e)(iii) of the Indenture.]
(3) The amount of purchase price corresponding to principal of
Eligible Bonds and with respect to the payment of which the Paying Agent,
pursuant to the foregoing Sections of the Indenture, is drawing under the
Letter of Credit, is as follows, and the amount of the draft accompanying
this Certificate does not exceed such amount:
Principal: $__________________
(4) The amount of the draft accompanying this Certificate being drawn
in respect of purchase price corresponding to principal of Eligible Bonds,
as indicated in paragraph (3), above, does not exceed the Principal
Component of the Letter of Credit. The amount of the draft accompanying
this Certificate in respect of purchase price corresponding to principal of
such Bonds has been computed in accordance with the terms and conditions of
such Eligible Bonds and the Indenture.
(5) No proceeds of this drawing will be applied to the payment of
purchase price of any Bonds that are not Eligible Bonds, including any
Pledged Bonds (as defined in the Indenture), any Company Bonds (as defined
in the Indenture) and any Bonds in the Fixed Rate Mode (as defined in the
Indenture).
[(6) The Eligible Bonds in respect of which this drawing is being made
are Eligible Bonds in the Flexible Mode, and payment of this drawing shall
be made in accordance with Paragraph 3(i) of the Letter of Credit.]
[(6) The Eligible Bonds in respect of which this drawing is being made
are not Eligible Bonds in the Flexible Mode, and payment of this drawing
shall be made in accordance with Paragraph 3(ii) of the Letter of Credit].
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this
Certificate as of the ________ day of _______________, 19___.
[NAME OF PAYING AGENT],
as Paying Agent
By ___________________________________
Title:
EXHIBIT 2
TO THE LETTER OF CREDIT
CERTIFICATE FOR REDEMPTION/
MANDATORY PURCHASE DRAWING
The undersigned, a duly authorized officer of __________________, (the
"Paying Agent"), hereby certifies as follows to Citibank, N.A. (the
"Bank"), with reference to Amended and Restated Irrevocable Letter of
Credit No. _____________________ (the "Letter of Credit") issued by the
Bank in favor of the Paying Agent. Terms defined in the Letter of Credit
and used but not defined herein shall have the meanings given them in the
Letter of Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for the
holders of the Bonds.
(2) The Paying Agent is making a Redemption/Mandatory Purchase
Drawing under the Letter of Credit in the amount of $______________
[pursuant to Section 308(c)(i) and Section 605 of the Indenture
to pay the principal of Eligible Bonds due pursuant to the
Indenture upon maturity or as a result of acceleration of such
Eligible Bonds in accordance with the Indenture and the terms of
such Eligible Bonds.]
[pursuant to Section 308(c)(i) of the Indenture to pay that
portion of the redemption price corresponding to principal of
[and premium on] Eligible Bonds due pursuant to the Indenture
upon redemption of such Eligible Bonds in accordance with the
Indenture and the terms of such Eligible Bonds.]
[pursuant to Section 308(c)(ii) of the Indenture to pay that
portion of the purchase price of Eligible Bonds corresponding to
principal that are subject to mandatory tender for purchase
pursuant to Section 301(e)(iv)(A) of the Indenture.]
(3) The amount of [principal of] [redemption price corresponding to
principal of] [and premium on] [purchase price corresponding to principal
of] Eligible Bonds which is due and payable and with respect to the payment
of which the Paying Agent, pursuant to the foregoing Section[s] of the
Indenture, is to draw under the Letter of Credit is as follows, and the
amount of the draft accompanying this Certificate does not exceed such
amount:
Principal: $__________________
[Premium: $__________________]
(4) The amount of the draft accompanying this Certificate being drawn
in respect of payment of [principal] [redemption price corresponding to
principal] [purchase price corresponding to principal] of Eligible Bonds,
as indicated in paragraph (3), above, does not exceed the Principal
Component of the Letter of Credit. [The amount of the draft accompanying
this Certificate being drawn in respect of that portion of the redemption
price of Eligible Bonds corresponding to premium, as indicated in paragraph
(3), above, does not exceed the Premium Component of the Letter of Credit.]
The amount of the draft accompanying this Certificate in respect of payment
of [principal] [redemption price corresponding to principal] [and premium]
[purchase price corresponding to principal] of such Eligible Bonds has been
computed in accordance with the terms and conditions of such Eligible Bonds
and the Indenture.
(5) No proceeds of this drawing will be applied to the payment of
principal, redemption price (including premium, if any) or purchase price
of any Bonds that are not Eligible Bonds, including any Pledged Bonds (as
defined in the Indenture), any Company Bonds (as defined in the Indenture),
and any Bonds in the Fixed Rate Mode (as defined in the Indenture).
(6) Payment of this drawing shall be made in accordance with
Paragraph 3(ii) of the Letter of Credit.
[(7) The draft accompanying this Certificate is the final draft to be
drawn under the Letter of Credit, and, upon the honoring of such draft, the
Letter of Credit will expire in accordance with its terms.]
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this
Certificate as of the ________ day of _______________, 19___.
[NAME OF PAYING AGENT],
as Paying Agent
By ___________________________________
Title:
EXHIBIT 3
TO THE LETTER OF CREDIT
CERTIFICATE FOR INTEREST DRAWING
The undersigned, a duly authorized officer of __________________, (the
"Paying Agent"), hereby certifies as follows to Citibank, N.A. (the
"Bank"), with reference to Amended and Restated Irrevocable Letter of
Credit No. ___________ (the "Letter of Credit") issued by the Bank in favor
of the Paying Agent. Terms defined in the Letter of Credit and used but
not defined herein shall have the meanings given them in the Letter of
Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for the
holders of the Bonds.
(2) The Paying Agent is making a drawing under the Letter of Credit
in the amount of $_______________ with respect to [the payment of interest]
[the payment of the portion of redemption price corresponding to interest]
[the payment of the portion of purchase price corresponding to interest] on
Eligible Bonds in accordance with the Indenture.
(3) The amount of [interest] [redemption price corresponding to
interest] [purchase price corresponding to interest] on Eligible Bonds that
is due and owing is as follows, and the amount of the draft accompanying
this Certificate does not exceed such amount:
Interest: __________________
(4) The amount of the draft accompanying this Certificate being drawn
in respect of payment of [interest] [redemption price corresponding to
interest] [purchase price corresponding to interest] on Eligible Bonds, as
indicated in paragraph (3), above, does not exceed the Interest Component
of the Letter of Credit. The amount of the draft accompanying this
Certificate in respect of payment of [interest] [redemption price
corresponding to interest] [purchase price corresponding to interest] on
Eligible Bonds has been computed in accordance with the terms and
conditions of such Eligible Bonds and the Indenture.
(5) Payment of this drawing shall be made in accordance with
Paragraph 3(ii) of the Letter of Credit.
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this
Certificate as of the ________ day of _______________, 19___.
[NAME OF PAYING AGENT],
as Paying Agent
By ___________________________________
Title:
EXHIBIT 4
TO THE LETTER OF CREDIT
NOTICE OF REDUCTION
The undersigned, a duly authorized officer of _____________________,
(the "Paying Agent"), hereby certifies as follows to Citibank, N.A. (the
"Bank"), with reference to Amended and Restated Irrevocable Letter of
Credit No. _____________________ (the "Letter of Credit") issued by the
Bank in favor of the Paying Agent. Terms defined in the Letter of Credit
and used but not defined herein shall have the meanings given them in the
Letter of Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for
the holders of the Bonds.
(2) As of the date hereof, the aggregate principal amount of
Eligible Bonds (including for this purpose all Pledged Bonds and all
Company Bonds) outstanding is
Principal: $__________________
(3) You are hereby directed to reduce the [Principal] [Premium]
[and] [Interest] Components of the Letter of Credit as follows:
[The Principal Component of the Letter of Credit is reduced
to $__________________.]
[The Premium Component of the Letter of Credit is reduced to
$__________________.]
[The Interest Component of the Letter of Credit is reduced
to $__________________.]
IN WITNESS WHEREOF, the Paying Agent has executed and delivered
this Certificate as of the ________ day of _______________, 19___.
[NAME OF PAYING AGENT],
as Paying Agent
By ___________________________________
Title:
EXHIBIT 5
TO THE LETTER OF CREDIT
NOTICE OF REINSTATEMENT
The undersigned, a duly authorized officer of Citibank, N.A. (the "Bank"),
hereby gives the following notice to _________________, as paying agent
(the "Paying Agent"), with reference to Amended and Restated Irrevocable
Letter of Credit No. __________________ (the "Letter of Credit") issued by
the Bank in favor of the Paying Agent. Terms defined in the Letter of
Credit and used but not defined herein have the meanings given them in the
Letter of Credit.
The Bank hereby notifies you that:
[1.] [Pursuant to Paragraph 5(i)(B) of the Letter of Credit and Section
2.04(b)(ii) of the Reimbursement Agreement, the Interest Component has
been reinstated by $________________.]
[2.] [Pursuant to Paragraph 5(ii)(B) of the Letter of Credit and Section
2.04(c) of the Reimbursement Agreement, the Principal Component has
been reinstated by $_________________.]
IN WITNESS WHEREOF, the Bank has executed and delivered this Notice of
Reinstatement as of the ________ day of _______________, 19___
CITIBANK, N.A.
By ___________________________________
Title:
EXHIBIT 6
TO THE LETTER OF CREDIT
INSTRUCTIONS TO TRANSFER
__________________, 19___
Re: Amended and Restated Irrevocable Letter of Credit
No. __________________
Gentlemen:
The undersigned, as Paying Agent under that certain Series E Loan and
Trust Agreement, dated as of May 1, 1991, as supplemented by a First
Supplement thereto dated as of December 1, 1993 (as so supplemented, the
"Indenture"), by and among the Business Finance Authority (formerly The
Industrial Development Authority) of the State of New Hampshire (the
"Issuer"), Public Service Company of New Hampshire and the State Street
Bank and Trust Company, as Trustee, is named as beneficiary in the Letter
of Credit referred to above (the "Letter of Credit"). The Transferee named
below has succeeded the undersigned as Paying Agent under such Indenture.
___________________________________
(Name of Transferee)
___________________________________
(Address)
Therefore, for value received, the undersigned hereby irrevocably
instructs you to transfer to such Transferee all rights of the undersigned
to draw under the Letter of Credit.
Such Transferee shall hereafter have the sole rights as beneficiary
under the Letter of Credit; provided, however, that no rights shall be
deemed to have been transferred to such Transferee until such transfer
complies with the requirements of the Letter of Credit pertaining to
transfers.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Certificate as of the ________ day _______________, 19___.
[NAME OF RETIRING PAYING AGENT],
as Paying Agent
By ___________________________________
Title:
The undersigned, [Name of Transferee], hereby accepts the
foregoing transfer of rights under the Letter of Credit.
[Name of Transferee]
By ___________________________________
Title:
Address of Principal
Corporate Trust Office:
[insert address]
Exhibit 4.4.1
WESTERN MASSACHUSETTS ELECTRIC COMPANY
to
OLD COLONY TRUST COMPANY,
Trustee
FIRST MORTGAGE INDENTURE AND DEED OF TRUST
Dated as of August 1, 1954
$11,000,000
initial issue
First Mortgage Bonds, Series A, 2.95%
due October 1, 1973.
WESTERN MASSACHUSETTS ELECTRIC COMPANY
INDENTURE
Dated as of August 1, 1954
TABLE OF CONTENTS
(Not part of the Indenture)
Page
Caption ............................................................ 1
Recitals ........................................................... 1
Form of Series A Fully Registered Bond ....................... 2
Form of Trustee's certificate of authentication .......... 6
Form of Transfer......................................... 7
Form of Series A Coupon Bond ................................. 7
Form of coupon .......................................... 12
Form of Trustee's certificate of authentication ......... 12
Form of registration .................................... 12
Form of Stamp Tax Legend ..................................... 13
Granting Clauses ................................................... 13
Recital of consideration ..................................... 13
Grant ........................................................ 14
Reservations and exceptions .................................. 16
Habendum ..................................................... 17
Declaration of trust ......................................... 17
Condition .................................................... 18
ARTICLE I.
Definitions
1.01 Explanatory preamble ......................................... 19
1.02 (1) "Indenture" ............................................. 19
(2) "herein", "hereof", etc.................................. 19
(3) "Supplemental Indenture", etc............................ 19
(4) "Company" ............................................... 20
(5) "Obligor" ............................................... 20
(6) "person" ................................................ 20
(7) "Corporation" ........................................... 20
(8) "Affiliate", "Control", etc. ............................ 20
(9) "Trustee" ............................................... 21
(10) "Responsible Officer", etc. ............................. 21
(11) "Bond", "Bondholder", etc. .............................. 21
(12) "Cancellation", "Cancelled" etc. ........................ 21
(13) "Outstanding ............................................ 22
(14) "excluding Company-owned Bonds" ......................... 22
(15) "Bondholders' Notice", "Bondholders' Request" ........... 23
(16) "Lien of this Indenture", "Lien hereof" ................. 23
(17) "Excepted Property" ..................................... 24
(18) "Permitted Encumbrances" ................................ 24
(19) "Directors' Resolution" ................................. 25
(20) "Officers' Certificate" ................................. 25
(21) "Engineer" .............................................. 25
(22) "Accountant" ............................................ 26
(23) "Engineer's Certificate", "Accountant's Certificate" .... 26
(24) "Independent" ........................................... 26
(25) "Independent Engineer's Certificate", "Independent
Accountant's Certificate" ........................... 26
(26) "Opinion of Counsel" .................................... 27
(27) "Evidence of Approval by Trustee" ....................... 27
(28) "Fundable Property" ..................................... 27
(29) "Cost" .................................................. 29
(30) "Fair Value" ............................................ 30
(31) "Property Additions" .................................... 31
(32) "Property Retirement" ................................... 31
(33) "Net Property Additions" ................................ 32
(34) "Made the Basis of Action or Credit hereunder" .......... 32
(35) "Earnings Certificate" .................................. 32
(36) "Commission Orders" ..................................... 34
(37) "Published Notice" ...................................... 35
1.03 Form of Corticate of Available Net Property Additions ........ 35
ARTICLE II.
Form, Execution, Registration, and Exchange of Bonds
2.01 General provisions ........................................... 38
2.02 Characteristics of Bonds ..................................... 39
2.03 Execution of Bonds and authentication of coupons ............. 40
2.04 Certification and delivery of Bonds .......................... 40
2.05 Temporary Bonds .............................................. 41
2.06 Registration, transfer, and exchange ......................... 42
2.07 Books for registration, transfer and exchange ................ 42
2.08 Registration of Coupon Bonds as to principal and transfer
of Fully Registered Bonds ............................... 42
2.09 Exchanges of Series A Bonds .................................. 43
2.10 Exchanges of Bonds of other series pursuant to Supplemental
Indenture................................................ 44
(a) Exchanges for Bonds of same or different series ......... 44
(b) Coupon Bonds exchanged for Fully Registered Bonds ....... 44
(c) Fully Registered Bonds exchanged for Coupon Bonds ....... 44
2.11 Charges on transfers or exchanges ............................ 45
2.12 Negotiability ................................................. 45
2.13 Mutilated, lost, stolen, or destroyed Bonds or coupons ....... 46
2.14 Status of Bonds held or acquired by Company .................. 47
ARTICLE III.
Issue of Bonds
3.01 Aggregate principal amount issuable and Outstanding
at any given time ....................................... 48
3.02 Issue of Series A Bonds ...................................... 48
3.03 Issue of Series B Bonds ...................................... 48
(a) Directors' resolution ................................... 49
(b) Stockholders' resolution if necessary .................... 49
(c) Supplemental Indenture if new series .................... 49
(d) Earnings Certificate .................................... 49
(e) Officers' Certificate ................................... 49
(f) Commission Orders ....................................... 50
(g) Opinion of Counsel ...................................... 50
3.04 Issue of Bond against retirement of Bonds .................... 50
(a) Directors' resolution .................................... 51
(b) Stockholders' resolution if necessary .................... 52
(c) Supplemental Indenture ................................... 52
(d) Officers' Certificate .................................... 52
(e) Commission Orders ......................................... 53
(f) Bonds to be surrendered .................................. 54
(g) Opinion of Counsel ....................................... 54
(h) Earnings Certificate if required ......................... 54
3.05 Issue of Bonds against cash .................................. 55
(a) Directors' resolution ................................... 55
(b) Stockholders' resolution if necessary ................... 55
(c) Supplemental Indenture .................................. 56
(d) Officers' Certificate ................................... 56
(e) Deposit of cash ......................................... 56
(f) Commission Orders ....................................... 56
(g) Earnings Certificate .................................... 56
(h) Opinion of Counsel ...................................... 56
3.06 Withdrawal of deposited cash ................................. 57
3.07 Application of deposited cash not withdrawn .................. 57
3.08 Issue of Bonds against 60% of Net Property Additions ......... 58
(a) Directors' resolutions ................................... 58
(b) Stockholders' resolution if necessary ................... 58
(c) Supplemental Indenture .................................. 59
(d) Officers' Certificate ................................... 59
(e) Certificate of available Net Property Additions ......... 59
(f) Accountant's Certificate ................................ 59
(g) Engineer's Certificate .................................. 60
(h) Commission Orders ....................................... 60
(i) Earnings Certificate .................................... 60
(j) Opinion of Counsel ...................................... 60
and Independent Engineers Certificate as to Fair Value to Company
of property used or operated by others, when required ... 61
3.09 Distinguishing features of various series .................... 62
ARTICLE IV.
Particular Covenants of the Company
4.01 Prompt payment of principal and interest; deposit in trust ... 62
4.02 No extension of time for payment of coupon or interest ....... 63
4.03 (a) Filing of vacancy in office of Trustee .................. 63
(b) Transfer offices to be maintained ....................... 64
(c) Paying agents ........................................... 64
(d) If Company acts as paying agent ......................... 65
(e) Payments to Trustee held in trust ....................... 65
(f) Payments to Trustee subject to 15.02 .................... 65
(g) Trustee appointed Registrar ............................. 65
4.04 Prompt payment of taxes and other charges and discharge of liens 65
4.05 Insurance of Mortgaged Property .............................. 66
4.06 Maintenance of Mortgaged Property ............................ 68
4.07 Conduct of Company's business ................................ 68
4.08 Corporate existence and authority to create and issue Bonds .. 69
4.09 Seisin, good right to convey, general warranty, recording,
after-required property ................................. 69
4.10 Against encumbrances and liens ............................... 71
4.11 Books and records ............................................ 71
4.12 Entries charging current earnings and crediting depreciation
reserve ................................................. 72
4.13 Compliance with conditions on merger, etc. ................... 72
4.15 No default to be suffered permitted .......................... 74
4.16 Advances by Trustee, etc. .................................... 74
4.17 Contents of Certificate of Available Net Property Additions ... 75
ARTICLE V.
Redemption of Bonds
5.01 General provision; redemption prices of Series A Bonds ........ 75
5.02 Notice of redemption ......................................... 76
5.03 Rescinding of election to redeem .............................. 77
5.04 Deposit of redemption price .................................. 78
5.05 Effect of notice and deposit ................................. 79
5.06 No Call for redemption if in default on Bonds Outstanding .... 80
5.07 Provisions for redemption and prepayment of Bonds of
future series ........................................... 80
ARTICLE VI.
Improvement Fund
6.01 Improvement Fund for Series A Bonds .......................... 80
6.02 Determination of amount to be paid into Improvement Fund ..... 81
(a) Form of Improvement Fund Application ................... 81
(b) Allocation of 60% of Net Property Additions ............. 82
(1) Directors' Resolution ............................... 82
(2) Supplemental Indenture .............................. 82
(3) Certificate of Available Net Property Additions ..... 82
(4) Accountant's Certificate ............................ 82
(5) Engineer's Certificate .............................. 82
(6) Opinion of Counsel .................................. 82
6.03 Application of cash to redemption by Trustee ................. 83
6.04 Sinking Fund Etc. for Bonds of other series .................. 84
ARTICLE VII.
Possession, Use, and Release of Mortgaged Property
7.01 Possession and use prior to default .......................... 84
7.02 Releases without consent of Trustee; application of proceeds 84
(a) abandonment of unserviceable parts of Mortgaged Property 85
(b) disposition of unserviceable poles, machinery, etc. ..... 85
(c) changes in contracts, etc. .............................. 85
(d) grant of easements and rights of way .................... 85
(e) leases of Mortgaged Property ............................ 86
(f) standing timber ......................................... 86
(h) indentures and agreements modifying or extinguishing
existing indentures and agreements .................. 86
7.03 Releases by Trustee on disposal of property .................. 86
(a) Directors' resolution ................................... 87
(b) Officers' Certificate ................................... 87
(c) Engineer's Certificate .................................. 88
(d) Consideration ........................................... 88
(e) Assignment of mortgages; or cash ........................ 89
(f) Supplemental Indenture, when required ................... 89
(g) Instrument of partial release ........................... 89
(h) Opinion of Counsel ...................................... 89
7.04 Releases by Trustee on disposal of real estate for cash ...... 90
(a) Officers' Certificate ................................... 91
(b) Engineer's Certificate .................................. 91
(c) Instrument of partial release ........................... 91
(d) Cash .................................................... 91
(e) Opinion of Counsel ...................................... 91
7.05 Taking by eminent domain, etc. ............................... 91
(a) Officers' Certificate ................................... 92
(b) Instrument of partial release ........................... 92
(c) Money ................................................... 92
(d) Supplemental Indenture, when required ................... 92
(e) Engineer's Certificate .................................. 92
(f) Opinion of Counsel ...................................... 93
7.06 Independent Engineer's Certificate as to Fair Value of property
released, when required ................................. 93
7.07 Release by Trustee of purchase money obligations on receipt of
value ................................................... 94
7.08 Disposition of moneys received by Trustee .................... 94
7.09 Sale of Excepted Property .................................... 94
(a) Officers' Certificate ................................... 94
(b) Instrument of partial release ........................... 94
(c) Opinion of Counsel ...................................... 94
7.10 Rights of purchasers of released property .................... 95
7.11 Sections 7.02, 7.03 and 7.04 not limitation of one another ... 95
7.12 Trustee may execute partial release though default has occurred 95
7.13 Rights of receiver, etc. ..................................... 95
ARTICLE VIII.
Disposition of Money in the Hands of the Trustee
8.01 General provisions relating to disposition of money deposited
for various purposes .................................... 96
8.02 Application of insurance moneys and cash received from sale of
Mortgaged Property, eminent domain, etc. ............... 96
8.03 Moneys deposited in 8.02 applied to
(a) redemption of Bonds ..................................... 97
(b) payment to Company against Net Property Additions ....... 98
(1) Directors' resolution ............................... 98
(2) Supplemental Indenture .............................. 98
(3) Officers' Certificate ............................... 98
(4) Certificate of Available Net Property Additions ..... 98
(5) Accountant's Certificate ............................ 98
(6) Engineer's Certificate...... ........................ 99
(7) Opinion of Counsel .................................. 99
(c) reimbursement to Company for taxes paid on profits from
sale of Mortgaged Property .......................... 99
(d) payment to Company for Bonds surrendered ................ 100
(e) payment of matured Bonds ................................ 100
(f) purchase of Bonds entitled to benefits of Sinking Fund,
etc. .................................................... 100
8.04 Moneys in excess of $250,000 after three years to be held for
redemption of Bonds; call for redemption ................ 101
8.05 Application of proceeds if all Mortgaged Property taken by
eminent domain .......................................... 102
8.06 Investment of moneys in hands of Trustee ..................... 102
ARTICLE IX.
Defaults and Remedies
9.01 Defaults; principal of Bonds may be declared due and payable . 103
9.02 Notice of default to Bondholders ............................. 106
9.03 Powers of Trustee on default ................................. 106
(1) entry on Mortgaged Property .............................. 106
(2) collection of purchase money obligations ................ 108
(3) sale of Mortgaged Property .............................. 108
(4) suit for foreclosure, etc. .............................. 109
9.04 Right to legal remedies; appointment of receiver ............. 109
9.05 Sale of Mortgaged Property as an entirety .................... 109
9.06 Notice of sale ............................................... 110
9.07 Rights of purchaser on sale .................................. 110
9.08 Conveyance by Trustee; power of attorney to Trustee;
confirmation by Company; Company forever barred;
receipt for purchase money .............................. 111
9.09 Application of purchase money ................................ 112
9.10 Principal accelerated on sale ................................ 113
9.11 Rights of Trustee to collect principal and interest of Bonds;
recovery of judgment; application of amount collected ... 113
9.12 Trustee's right to maintain suits to protect security ........ 116
9.13 Right of receiver or Bondholders to make payments for account
of Company .............................................. 116
9.14 Waiver of stays or extensions or redemption laws .............. 117
9.15 Waiver of service of process, etc. ........................... 117
9.16 Powers of majority in interest of Bondholders ................ 118
9.17 Powers of majority in interest of Bondholders of various series 118
9.18 Restrictions on right of Bondholders to enforce Indenture .... 119
9.19 Remedies not exclusive ....................................... 120
9.20 Delay not a waiver of rights; Trustee may act without
possession of Bonds ..................................... 120
9.21 Trustee represents all Bondholders ........................... 120
ARTICLE X.
Evidence of Rights of Bondholders and Ownership of Bonds
10.01 Execution of requests and evidence of bondholding ............. 121
ARTICLE XI.
Immunity of Incorporators, Stockholders, Officers and Directors
11.01 Waiver of personal liability ................................. 122
ARTICLE XII.
Bondholders' List and Reports by the Company and the Trustee
12.01 Information as to Bondholders to be furnished by Company ..... 123
12.02 (a) Preservation of information by Trustee .................. 123
(b) Information to be furnished to Bondholders .............. 124
12.03 Reports to be filed by Company with Trustee and Securities
and Exchange Commission; summaries to Bondholders ....... 125
12.04 Reports by Trustee to Bondholders ............................ 126
ARTICLE XIII.
Concerning the Trustee and Its Paying Agents
13.01 Qualification of Trustee ..................................... 128
13.02 Trustee's undertaking prior to and after default ............. 129
13.03 Trustee released from certain liabilities .................... 129
13.04 Recitals by Company, not Trustee ............................. 130
13.05 Trustee not personally liable in case of entry ............... 131
13.06 Reliance by Trustee on documents; right to consult counsel, etc.131
13.07 Trustee's responsibility for selection of independent experts;
Trustee not required to risk own funds .................. 131
13.08 Trustee or paying agent may own Bonds ........................ 132
13.09 Funds held in trust .......................................... 132
13.10 Trustee entitled to compensation ............................. 132
13.11 Prior right of Trustee to compensation and reimbursement ...... 136
13.12 Reliance on Officers' Certificates ........................... 135
13.13 Notices by Trustee ........................................... 136
13.14 Conflicting interest of Trustee .............................. 136
(a) Must eliminate such interest or resign .................. 136
(b) Notice to Bondholders of failure to remove conflicting
interests or resign ................................. 136
(c) Bondholders may require resignation ..................... 136
(d) Definition of conflicting interest ...................... 137
13.15 Trustee as creditor .......................................... 142
(a) Apportionment of preferential collection on debt arising
within four months prior to default; exceptions; applica-
tion on resignation ..................................... 142
(b) Situation excluded from apportionment requirement ....... 145
13.16 Resignation of Trustee ....................................... 146
13.17 Removal of Trustee ........................................... 147
13.18 Appointment of successor Trustee ............................. 147
13.19 Acceptance of trust by successor Trustee; conveyance to
successor Trustee ....................................... 149
13.20 Effect of merger or consolidation of Trustee ................. 149
13.21 Relationship of Trustee and Bondholder governed by
Massachusetts law ....................................... 150
13.22 Paying agents ................................................ 150
ARTICLE XIV.
Effects of Consolidation, Merger, Sale or Lease
14.01 Terms on which Company may consolidate, merge, sell or lease
Mortgaged Property ...................................... 151
14.02 Compliance with conditions precedent ......................... 154
14.03 Extent of Lien of Indenture on property of successor ......... 155
14.04 Rights of successor under Indenture .......................... 156
14.05 Stamping of Bonds issued by successor ........................ 157
ARTICLE XV.
Defeasance
15.01 Discharge of Indenture ....................................... 158
15.02 Disposition of money deposited with Trustee .................. 159
ARTICLE XVI.
Supplemental Indentures
16.01 Supplemental Indentures without consent of Bondholders;
purposes for which permitted ............................. 160
16.02 Supplemental Indentures amending Indenture; consent of
Bondholders required .................................... 162
16.03 Discretion of Trustee concerning acceptance of Supplemental
Indentures ............................................. 164
16.04 Supplemental Indentures become part of this Indenture; must
comply with Trust Indenture Act of 1939 ................. 164
ARTICLE XVII.
Miscellaneous
17.01 Indenture for benefit of parties and Bondholders solely....... 165
17.02 Required statement in certificates and opinions; basis of
certificates and opinions ............................... 165
17.03 Notices ...................................................... 166
17.04 Consent to undertaking for costs ............................. 166
17.06 Provisions required by Trust Indenture Act of 1939 control ... 167
17.06 Trust Indenture Act of 1939 means as Act existed on date
Indenture ............................................... 167
17.07 Parties include successors and assigns ....................... 167
17.08 Invalidity of any provision of Indenture shall not affect
other provisions ........................................ 167
17.09 Date of Indenture ............................................ 167
17.10 Cover, headings, etc. ........................................ 167
17.11 United States Internal Revenue stamp tax paid ................ 168
17.12 Original counterparts ........................................ 168
Testimonium ........................................................ 168
Signatures ......................................................... 169
Schedule A ........................................................ 183
Acknowledgements - Western Massachusetts Electric Company ......... 183
Old Colony Trust Company ....................... 184
Certificate of Votes ............................................... 185
THIS FIRST MORTGAGE INDENTURE AND DEED OF TRUST dated as of the first
day of August, 1954, made and entered into by and between WESTERN
MASSACHUSETTS ELECTRIC COMPANY, a corporation organized under the laws of
the Commonwealth of Massachusetts having principal places of business at
Greenfield and Turners Falls in the County of Franklin, Springfield in the
County of Hampden, Pittsfield in the County of Berkshire, and Boston in the
County of Suffolk, all in said Commonwealth, (hereinafter called the
Company) and OLD COLONY TRUST COMPANY, a corporation organized under the
laws of the Commonwealth of Massachusetts, and having its principal office
and usual place of business in said Boston, (hereinafter called the
Trustee).
WITNESSETH That:
WHEREAS the Company is authorized and empowered by law to borrow
money for its proper corporate purposes, to issue its bonds for money so
borrowed, and to secure the payment of said bonds by mortgage of its
franchises and property hereinafter described; and
WHEREAS the Company has deemed it necessary to borrow money for such
purposes and to that end, pursuant to votes or resolutions duly and legally
adopted by its Board of Directors, by its Executive Committee and by its
stockholder at meetings duly and regularly called and held for the purpose,
has duly authorized and directed the execution and delivery of this
Indenture under which Bonds to an amount limited only by the terms of this
Indenture and by law, may be issued and secured, the said Bonds so to be
issued being known generally as its First Mortgage Bonds (hereinafter
called the Bonds) to be issued in one or more series, the Bonds of each
series to be identical, so far as may be, in tenor, except that the Bonds
of any series may be in coupon form with coupons attached or may be
registerable as to principal only, or may be in fully registered form; to
mature on such dates; to bear interest at such rates; to be payable in such
currency; and to contain such other provisions required or permitted by
this Indenture as may be determined from time to time by the stockholder or
stockholders and/or the Board of Directors of the Company; and
WHEREAS the Company, at said meetings, has authorized an original
issue of Bonds under this Indenture limited in aggregate amount (except as
provided in 2.13 hereof) to eleven million dollars ($11,000,000), said
Bonds being originally issued in fully registered form, maturing on October
1, 1973, bearing interest from the date thereof at the rate of two and
ninety-five hundredths percentum (2.95%) per annum payable semi-annually,
and being known as its "First Mortgage Bonds, Series A, 2.95%, due October
1, 1973" (hereinafter called the 2.95% Bonds); and
WHEREAS the Department of Public Utilities of the Commonwealth of
Massachusetts has in due form of law authorized the issue of said 2.95%
Bonds hereunder in the aggregate principal amount of eleven million dollars
($11,000,000) by its Order dated July 29, 1954; and
WHEREAS the permanent form of said 2.95% Bonds, in fully registered
form without coupons, of the certificate of authentication thereof, of the
transfer thereof, and the permanent form of said 2.95% Bonds in coupon form
for which the said 2.95% Bonds in fully registered form are exchangeable as
hereinafter provided, and of the coupons thereon, of the certificate of
authentication thereof, of the transfer thereof, and the form of the stamp
tax legend to be affixed to said 2.95% Bonds in either form shall be
substantially in the following form; to wit:
Form of Fully Registered Bond
No. AR $...........
WESTERN MASSACHUSETTS ELECTRIC COMPANY
First Mortgage Bond, Series A, 2.95%, due October 1, 1973
FOB VALUE RECEIVED, WESTERN MASSACHUSETTS ELECTRIC COMPANY, a
corporation of the Commonwealth of Massachusetts, (hereinafter called the
Company) hereby promises to pay to , or registered
assigns, the sum of dollars ($ ), on the first day of
October, 1973, and semi-annually on the first days of April and October in
each year to pay interest on said sum at the rate of two and ninety-five
hundredths percentum (2.95%) per annum from the date hereof until the
Company's obligation with respect to said sum shall be discharged. Both
principal and interest shall be payable at the principal office in Boston
in the County of Suffolk and said Commonwealth of Old Colony Trust Company,
a corporation organized under the laws of said Commonwealth (hereinafter
with its successors, as defined in the Indenture mentioned below, generally
called the Trustee), or of such successors in such coin or currency of the
United States of America as at the time of payment is legal tender for
public and private debts.
This Bond is one of a series of Bonds known as the "First Mortgage
Bonds, Series A, 2.95%, due October 1, 1973" of the Company, being either
in the form of coupon Bonds registerable as to principal only or in fully
registered form, limited to eleven million dollars ($11,000,000) in
principal amount (except as provided by the terms of 2.13 of the Indenture
mentioned below), and issued under and secured by a First Mortgage
Indenture and Deed of Trust (hereinafter with all indentures stated to be
supplemental thereto to which the Trustee shall be a party, generally
called the Indenture) between the Company and said Old Colony Trust Company
dated as of August 1, 1954, an executed counterpart of which is on file at
the principal office of the Trustee, to which Indenture reference is hereby
made for a description of the nature and extent of the security, the rights
thereunder of the bearers or registered owners of Bonds issued and to be
issued thereunder, the rights, duties, and immunities thereunder of the
Trustee, the rights and obligations thereunder of the Company, and the
terms and conditions upon which said Bonds, and other and further Bonds of
other series, are issued and are to be issued.
The fully registered Bonds of this series in permanent form are
issuable in denominations of one thousand dollars ($1,000) and any multiple
thereof.
This Bond is transferable by the registered owner hereof in person or
by his duly authorized attorney at the principal office of the Trustee upon
surrender and cancellation thereof, and thereupon a new Bond or Bonds of
this series for a like principal amount will be issued in exchange, all as
provided in said Indenture. The Company and the Trustee may deem and treat
the registered owner hereof as the absolute owner hereof, whether or not
this Bond be overdue, for the purpose of receiving payment and for all
other purposes, and neither the Company nor the Trustee shall be affected
by any notice to the contrary.
This Bond is exchangeable at the option of the registered owner
hereof at the principal office of the Trustee for coupon Bonds of this
series of an equal principal amount, upon transfer and surrender hereof to
the Trustee as hereinbefore provided, in the manner and on the terms
provided in said Indenture, and upon such transfer and surrender, coupon
Bonds of this series, with all coupons for interest unpaid hereon and none
others attached, will be issued in lieu hereof.
This Bond is also exchangeable at the option of the registered owner
hereof at the principal office of the Trustee for an equal principal amount
of fully registered Bonds of this series of other denominations, in the
manner and on the terms provided in said Indenture.
The Bonds of this series are subject to redemption prior to maturity
upon not less than thirty (30) days' prior notice, as a whole at any time,
or in part from time to time, at the option of the Company, in the manner
and with the effect provided in said Indenture, at the principal amount of
the Bonds so to be redeemed and interest accrued thereon to the date fixed
for redemption, together (unless redeemed in the twelve months' period
ending September 30, 1973) with a premium equal to the percentage of the
principal amount thereof hereinafter set forth:
If redeemed on or at any time prior to September 30, 1956, 2-1/2%
If redeemed thereafter and on or at any time prior to September 30, 1960,
2%
If redeemed thereafter and on or at any time prior to September 30, 1964,
1-1/2%
If redeemed thereafter and on or at any time prior to September 30, 1968,
1%
If redeemed thereafter and on or at any time prior to September 30, 1972,
1/2%
The Bonds of this series are also subject to redemption to the extent
provided in the Indenture by the operation of the Improvement Fund
provisions of said Indenture at the principal amount thereof and interest
accrued thereon to the date fixed for redemption.
Notice of redemption as aforesaid shall be given by publication at
least once in each of three (3) successive weeks, the first publication to
be at least thirty (30) days before the date set for redemption, in at
least two daily newspapers of general circulation printed in the English
language one of which shall be published in said Boston, and by mailing, at
least thirty (30) days prior to the date set for redemption, by registered
mail to the registered owners of all fully registered Bonds and to the
registered owners of all coupon Bonds registered as to principal, which
have been called for redemption, a copy of said notice (provided, however,
that if all of said Bonds shall be fully registered at any time not more
than forty-five (45) and not less than thirty (30) days prior to the date
set for redemption, notice by publication may be dispensed with).
If this Bond, or a part hereof, shall be called for redemption, or
provision for such call shall have been made, as provided in said
Indenture, and payment of the redemption price shall have been duly
provided for by the Company, interest shall cease to accrue hereon, or on
such called part, from and after the redemption date, the Company shall
from the time provided in said Indenture be under no further liability in
respect of the principal of, or premium, if any, or interest on, this Bond,
or such called part, and the registered owner hereof shall from and after
such time look for payment hereof solely to the money so provided.
The said Indenture contains provisions permitting the Company and the
Trustee with the consent of the bearers or registered owners of not less
than seventy percentum (70%) in principal amount of the Bonds at the time
outstanding, (except Bonds held by or for the benefit of the Company)
including, if more than one series of Bonds shall be at the time
outstanding, not less than seventy percentum (70%) in principal amount of
the Bonds except Bonds held by or for the benefit of the Company) of each
series affected differently from those of other series, to effect by
supplemental indenture modifications or alterations of said Indenture and
of the rights and obligations of the Company and of the bearers and
registered owners of the Bonds; but no such modification or alteration
shall be made which, without the written approval or consent of the
registered owner hereof, will extend the maturity hereof or reduce the rate
or extend the time for payment of interest hereon or reduce the amount of
the principal hereof or of any premium payable on the redemption hereof, or
which will reduce the percentage of the principal amount of Bonds required
for the adoption of the modifications or alterations as aforesaid, or
authorize the creation by the Company, except as expressly authorized by
the Indenture, of any mortgage, pledge or lien upon the property subjected
thereto ranking prior to or on an equality with the lien thereof.
If a default, as defined in said Indenture shall occur, the principal
of this Bond may become or be declared due and payable before maturity, in
the manner and with the effect provided in the Indenture; but any default
and the consequences thereof may be waived by certain percentages of the
bearers or registered owners of Bonds, all as provided in said Indenture.
No recourse shall be had for the payment of the principal of or the
interest on this Bond or for any claim based hereon or otherwise in respect
hereof or of the said Indenture against any incorporator, stockholder,
director, or officer, past, present, or future, as such, of the Company or
of any predecessor or successor corporation under any constitution,
statute, or rule of law, or by the enforcement of any assessment, penalty
or otherwise, all such liability being waived and released by the holder
hereof by the acceptance of this Bond.
This Bond shall take effect as a sealed instrument.
This Bond shall not become or be valid or obligatory until the
certificate of authentication hereon shall have been signed by the Trustee.
IN WITNESS WHEREOF, WESTERN MASSACHUSETTS ELECTRIC COMPANY has caused
this Bond to be executed in its name and on its behalf and under its
corporate seal by its and , thereunto
duly authorized, as of the day of , 19
WESTERN MASSACHUSETTS ELECTRIC COMPANY
By _______________________________
and
By _______________________________
Certificate of Authentication
This Bond is one of the First Mortgage Bonds, Series A, 2.95%, due
October 1, 1973, described and provided for in the within mentioned
Indenture.
OLD COLONY TRUST COMPANY, TRUSTEE
By _______________________________
Authorized Officer
Form for Transfer
FOR VALUE RECEIVE hereby sell, assign,
and transfer the within Bond to and hereby
irrevocably constitute and appoint attorney to
transfer said Bond on the books of the Company with full power of
substitution in the premises.
Dated this day of , 19
In presence of:
Form of Coupon Bond
No. AM $1,000
WESTERN MASSACHUSETTS ELECTRIC COMPANY
First Mortgage Bond, Series A, 2.95%, due October 1, 1973
FOR VALUE RECEIVED, WESTERN MASSACHUSETTS ELECTRIC COMPANY, a
corporation of the Commonwealth of Massachusetts, (hereinafter called the
Company) hereby promises to pay to the bearer, or, if this Bond be
registered as to principal otherwise than to bearer, then to the registered
owner hereof, the sum of one thousand dollars ($1,000) on the first day of
October, 1973, and semi-annually on the first days of April and October in
each year to pay interest on said sum at the rate of two and ninety-five
hundredths percentum (2.95%) per annum from the date hereof until the
Company obligation in respect of said sum shall be discharged, but until
maturity, only upon presentation and surrender of the annexed coupons as
they severally mature. Both principal and interest shall be payable at the
principal office in Boston in the County of Suffolk and said Commonwealth
of Old Colony Trust Company, a corporation organized under the laws of said
Commonwealth, (hereinafter with its successors, as defined in the Indenture
mentioned below, generally called the Trustee), or of such successors, in
such coin or currency of the United States of America as at the time of
payment is legal tender for public and private debts.
This Bond is one of a series of Bonds known as the "First Mortgage
Bonds, Series A, 2.95%, due October 1, 1973" of the Company, being either
in the form of coupon Bonds registerable as to principal only or in fully
registered form, limited to eleven million dollars ($11,000,000) in
principal amount (except as provided by the terms of 2.13 of the Indenture
mentioned below), and issued under and secured by a First Mortgage
Indenture and Deed of Trust (hereinafter, with all indentures stated to be
supplemental thereto to which the Trustee shall be a party, generally
called the Indenture) between the Company and said Old Colony Trust Company
dated as of August 1, 1954, an executed counterpart of which is on file at
the principal office of the Trustee, to which Indenture reference is hereby
made for a description of the nature and extent of the security, the rights
thereunder of the bearers or registered owners of Bonds issued and to be
issued thereunder and of the coupons appertaining thereto, the rights,
duties, and immunities thereunder of the Trustee, the rights and
obligations thereunder of the Company, and the terms and conditions upon
which said Bonds, and other and further Bonds of other series, are issued
and are to be issued.
The coupon Bonds of this series in permanent form are issuable in the
denomination of one thousand dollars ($1,000).
This Bond, singly or together with other coupon Bonds of this series,
may be exchanged at the option of the bearer or registered owner for fully
registered Bonds of this series of an equal principal amount, in the manner
and on the terms provided in said Indenture.
This Bond, except while registered as to principal, and the coupons
annexed hereto shall be transferable by delivery. The bearer hereof may
have the ownership of the principal of this Bond registered upon
presentation hereof for that purpose at the principal office of the
Trustee, such registration to be noted hereon. After such registration no
transfer hereof shall be valid unless made on the registration books at
said office by the registered owner in person or by his duly authorized
attorney and similarly noted hereon; but this Bond may be discharged from
registry by like transfer to bearer similarly registered and noted hereon,
and thereupon transferability by delivery shall be restored and this Bond
may again and from time to time be registered or transferred as before.
The coupons annexed hereto, whether or not this Bond be registered as to
principal, shall remain payable to bearer and shall continue to be
transferable by delivery. The Company and the Trustee may deem and treat
the bearer of this Bond, if it be not then registered as to principal, or,
if this Bond be registered as to principal as herein authorized, the person
in whose name the same is registered, as the absolute owner hereof and the
bearer of any coupon hereto appertaining as the absolute owner thereof,
whether or not this Bond or such coupon shall be overdue, for the purpose
of receiving payment and for all other purposes, and neither the Company
nor the Trustee shall be affected by any notice to the contrary.
The Bonds of this series are subject to redemption prior to maturity
upon not less than thirty (30) days' prior notice, as a whole at any time,
or in part from time to time, at the option of the Company, in the manner
and with the effect provided in said Indenture, at the principal amount of
the Bonds so to be redeemed and interest accrued thereon to the date fixed
for redemption, together (unless redeemed in the twelve months' period
ending September 30, 1973) with a premium equal to the percentage of the
principal amount thereof hereinafter set forth:
If redeemed on or at any time prior to September 30, 1956, 2-1/2 %
If redeemed thereafter and on or at any time prior to September 30, 1960,
2%
If redeemed thereafter and on or at any time prior to September 30, 1964,
1-1/2%
If redeemed thereafter and on or at any time prior to September 30, 1968,
1%
Ii redeemed thereafter and on or at any time prior to September 30, 1972,
1/2%
The Bonds of this series are also subject to redemption to the extent
provided in the Indenture by the operation of the Improvement Fund
provisions of said Indenture at the principal amount thereof and interest
accrued thereon to the date fixed for redemption.
Notice of redemption as aforesaid shall be given by publication at
least once in each of three (3) successive weeks, the first publication to
be at least thirty (30) days before the date set for redemption, in at
least two daily newspapers of general circulation printed in the English
language one of which shall be published in said Boston, and by mailing, at
least thirty (30) days prior to the date set for redemption, by registered
mail, to the registered owners of all fully registered Bonds and to the
registered owners of all coupon Bonds registered as to principal, which
have been called for redemption, a copy of said notice (provided, however,
that if all of said Bonds shall be fully registered at any time not more
than forty-five (45) and not less than thirty (30) days prior to the date
set for redemption, notice by publication may be dispensed with).
If this Bond shall be called for redemption, or provision for such
call shall have been made, as provided in said Indenture, and payment of
the redemption price shall have been duly provided for by the Company,
interest shall cease to accrue hereon from and after the redemption date,
the coupons appertaining hereto thereafter maturing shall be void, the
Company shall from the time provided in said Indenture be under no further
liability in respect of the principal of, or premium, if any, or interest
on, this Bond and the bearer or registered owner hereof shall from and
after such time look for payment hereof solely to the money so provided.
The said Indenture contains provisions permitting the Company and the
Trustee with the consent of the bearers or registered owners of not less
than seventy percentum (70%) in principal amount of the Bonds at the time
outstanding, (except Bonds held by or for the benefit of the Company)
including if more than one series of Bonds shall be at the time
outstanding, not less than seventy percentum (70%) in principal amount of
the Bonds (except Bonds held by or for the benefit of the Company) of each
series affected differently from those of other series, to effect by
supplemental indenture modifications or alterations of said Indenture and
of the rights and obligations of the Company and of the bearers and
registered owners of the Bonds and coupons; but no such modification or
alteration shall be made which, without the written approval or consent of
the bearer or registered owner hereof, will extend the maturity hereof or
reduce the rate or extend the time for payment of interest hereon or reduce
the amount of the principal hereof or of any premium payable on the
redemption hereof, or which will reduce the percentage of the principal
amount of Bonds required for the adoption of the modifications or
alterations as aforesaid, or authorize the creation by the Company, except
as expressly authorized by the Indenture, of any mortgage, pledge or lien
upon the property subjected thereto ranking prior to or on an equality with
the lien thereof.
If a default as defined in said Indenture shall occur, the principal
of this Bond may become or be declared due and payable before maturity, in
the manner and with the effect provided in the Indenture; but an default
and the consequences thereof may be waived by certain percentages of the
bearers or registered owners of Bonds, all as provided in said Indenture.
No recourse shall be had for the payment of the principal of or the
interest on this Bond or for any claim based hereon or otherwise in respect
hereof or of the said Indenture against any incorporator, stockholder,
director, or officer, past, present, or future, as such, of the Company or
of any predecessor or successor corporation under any constitution,
statute, or rule of law, or by the enforcement of any assessment, penalty,
or otherwise, all such liability being waived and released by the holder
hereof by the acceptance of this Bond.
This Bond shall take effect as a sealed instrument.
Neither this Bond nor any of the annexed coupons shall become or be
valid or obligatory until the certificate of authentication hereon shall
have been signed by the Trustee.
IN WITNESS WHEREOF, WESTERN MASSACHUSETTS ELECTRIC COMPANY has caused
this Bond to be executed in its name and on its behalf, and under its
corporate seal by its and
, thereunto duly authorized, and the coupons
annexed thereto to bear the facsimile signature of its Treasurer, as of the
first day of August, 1954.
WESTERN MASSACHUSETTS ELECTRIC COMPANY
By ___________________________________
and
By ___________________________________
Form of Coupon
On , 19 , WESTERN MASSACHUSETTS ELECTRIC COMPANY upon
surrender hereof, unless the Bond hereinafter mentioned shall have been
called for previous redemption and payment duly provided therefor, will pay
to the bearer, at the principal office in Boston, Massachusetts, of Old
Colony Trust Company or of any successor as Trustee under the Indenture
securing said Bond, and /100 dollars,
in any coin or currency of the United States of America which at the time
of such payment is legal tender for public and private debt, being
( ) months' interest on its First Mortgage Bond, Series A 2.95%, due
October 1, 1973, Numbered
Treasurer
Certificate of Authentication
This Bond is one of the First Mortgage Bonds, Series A, 2.95%, due
October 1, 1973, described and provided for in the within mentioned
Indenture.
OLD COLONY TRUST COMPANY, TRUSTEE
By _______________________________
Authorized Officer
Form for Registration
Notice: No writing below except by a duly authorized officer of the
Registrar.
_________________________________________________________________________
Date of Registration Name of Registered Owner Signature of Registrar
Form of Stamp Tax Legend
Any Federal Revenue Tax on the issue of this Bond has been paid by
affixing to an original counterpart of the Indenture under which it is
issued, and duly cancelling, the required stamps.
AND WHEREAS the Bonds of each series, other than the 2.95% Bonds, and
the coupons, if any, to be attached thereto are to be substantially in the
forms above set forth, with such modifications thereof and additions
thereto or eliminations therefrom authorized or permitted by this Indenture
as to any particular series as in the opinion of the stockholder or
stockholders and/or the Board of Directors and/or the Executive Committee
of the Company may at the time be necessary or proper by reason of the
terms on which the Bonds of any such series are issued; and
WHEREAS all requirements of law and of the Certificate of Incor-
poration as amended, and of the By-Laws of the Company, including all
requisite action on the part of directors and officers, and all things nec-
essary to make said 2.95% Bonds originally issued hereunder, when duly
executed by the Company and delivered, the valid, binding, and legal
obligations of the Company, and the covenants and stipulations herein
contained valid and binding obligations of the Company, have been done and
performed, and the execution and delivery hereof have been in all respects
duly authorized;
NOW, THEREFORE, THIS INDENTURE AND DEED OF TRUST WITNESSETH: In
consideration of the premises and of the mutual covenants herein contained
and of the purchase and acceptance by the bearers and registered owners
thereof of the Bonds at any time issued hereunder, and of one (1) dollar
duly paid to the Company by the Trustee and for other good and valuable
considerations, the receipt whereof at or before the ensealing and delivery
of these presents is hereby acknowledged, and in order to secure the
payment of the principal of and premium, if any, and interest on all Bonds
from time to time outstanding hereunder according to their tenor and
effect, and to secure the performance and observance of all the covenants
and conditions therein and herein contained, and to declare the terms and
conditions upon and subject to which the Bonds are to be issued and
secured, the Company has executed and delivered this Indenture, and has
granted, bargained, sold, conveyed, assigned, transferred, mortgaged, and
confirmed, and by these presents does grant, bargain, sell, convey, assign,
transfer, mortgage, and confirm unto Old Colony Trust Company as Trustee,
its successors in the trust hereof, and its and their assigns, all and
singular the franchised and properties hereinafter described in Clauses 1
to 4 inclusive (hereinafter called the Mortgaged Property), that is to say:
CLAUSE 1.
All the property, real, personal, or mixed, of every kind, character,
and description, which is described in Schedule A hereto attached and
hereby made a part of this Clause as fully as if set forth at length
herein.
CLAUSE 2.
Without in any way limiting, or derogating from the inclusiveness of
the description of the property described in Clause 1, or hereinafter
described in Clauses 3 and 4, all and singular the franchises and the
lands, real estate, interests and rights in land, rights of way, agreements
for rights of way, locations, leaseholds, grants, easements, servitudes,
rights pursuant to ordinances, rights in private ways, flowage and riparian
rights and rights of drainage, percolation, seepage, and erosion, licenses,
immunities, privileges, permits; dams, wings, retaining walls, canals,
gates, reservoirs, dam sites, power houses, power plants, water wheels,
engines, boilers, dynamos, generators, motors, pumps, valves, and other
structures, erections, apparatus and appurtenances for generating and
storing electrical energy; stations and substations, transmission lines,
towers, cables, wires, poles, fractional interests in poles, distribution
and supply lines, conduits, drains and systems, transformers, meters,
lamps, and apparatus and appurtenances for the distribution and sale of
electrical energy or steam; other appliances and apparatus and physical
property used or useful in the business of generating, storing,
transmitting or circulating and selling electric energy or steam; and
office building, shops, garages, laboratories, and the physical equipment
therein, which, in respect of all the foregoing, now are owned by the
Company; together with all and singular the tenements, hereditaments, and
appurtenances belonging or in any wise appertaining to the aforesaid
property or any part thereof; with the reversion and reversions, remainder
and remainders, and all tolls, earnings, revenues, rents, issues, profits
and other income thereof, and all the estate, right, title, interest, and
claim whatsoever at law as well as in equity, which the Company now has or
may hereafter acquire in and to the aforesaid property and every part and
parcel thereof.
The conveyance, transfer, and assignment of property described in
Clauses 1 and 2 hereof are made subject, however, (1) to the specific
liens, encumbrances, reservations, restrictions, conditions, limitations,
covenants, interests, and exceptions to the extent set forth or referred to
in Schedule A aforesaid and in the deeds, grants, and conveyances therein
described; (2) to Permitted Encumbrances; and (3) to any and all existing
leases or tenancies for camp sites, fishing, swimming, or hunting rights,
rights to cut wood, rights of way whether of necessity or by prescription
or otherwise, and other similar rights and privileges given, granted,
permitted, or acquiesced in by the Company in respect of any of said
property, no one of which leases, tenancies, rights, or privileges
substantially interferes with the use and enjoyment of said properties by
the Company for its general and ordinary business.
CLAUSE 3.
The franchise or franchises of the Company as that term is used in
Section 13 of Chapter 164 of the General Laws (Ter. Ed.) of the Com-
monwealth of Massachusetts, together with all the rights of the Company,
but subject to the obligations of the Company, relative to the erection,
maintenance, and operation of the Company's mains, conduits, poles, wires,
fixtures, and other apparatus in, over, under, or across public ways.
CLAUSE 4.
Any and all other franchises and property, real, personal, or mixed,
and wheresoever situated, in character and kind like or similar to the
property hereinbefore described in Clauses 2 and 3 which may be at any time
hereafter acquired by the Company (except as provided in 14.01 and 14.03 in
respect of property acquired by consolidation or merger), it being the
intention hereof that all such franchises and property acquired by the
Company (except as aforesaid) shall be as fully embraced within and subject
to the lien hereof as if such property were now owned by the Company and
were specifically described herein and conveyed hereby.
The conveyance, transfer, and assignment of the property acquired by
the Company after the execution hereof, pursuant to this Clause 4, is
subject to Permitted Encumbrances and to any mortgages, liens, or other
encumbrances thereon of the character described in 4.10 existing at the
time of the acquisition thereof by the Company and to any mortgages of such
character which may be placed thereon at the time of the acquisition
thereof to secure or to raise a part of the purchase price thereof and to
any renewals or extensions of such encumbrances or mortgages.
There is furthermore expressly excepted and excluded from the lien
and operation of this Indenture, and from the definition of Mortgaged
Property anything in Clauses 1 to 4, both inclusive, notwithstanding, the
following described property of the Company, whether owned at the time of
the execution hereof and otherwise hereby conveyed, transferred, and
assigned, or hereafter acquired by it:
A. All cash now and hereafter on hand and in banks, all present
and future contracts and other choses in action, bills, notes, and
accounts receivable, trade acceptances, claims for damage in tort, or
for breach of contract whether or not to the property hereby
conveyed, transferred, and assigned or intended to be; claims for
refunds of taxes of every sort and description; judgments obtained by
or in the name of the Company; and the interest of the Company in any
present or future funds or obligations comprised in any retirement or
pension plan to which the Company is or may be a party;
B. Office furniture, equipment and supplies, books, records,
documents, and papers now or hereafter belonging to the Company;
C. Vehicles of every sort and description now or hereafter
belonging to the Company, together with all equipment and supplies
necessary to the operation and maintenance thereof;
D. All present and future material and supplies, coal, oil,
fuel and other personal property which is consumable (otherwise than
by ordinary wear and tear) in the physical operation of the plants
and systems of the Company; and all present and future materials or
supplies used as components in the construction of electric utility
or steam plant and held in advance of use thereof for such purpose.
E. Goods, wares, merchandise, appliances, materials, and
supplies now or hereafter manufactured, produced, purchased, or
acquired by the Company for the purpose of sale, display or lease in
the ordinary conduct of its business;
F. Shares of stock, notes, debentures, bonds, or other certifi-
cates or evidences of indebtedness and other securities now or here-
after owned by the Company excepting however purchase money
obligations acquired pursuant to the provisions of 7.03;
G. All property, leasehold interests, permits, licenses, fran-
chises, and rights whether now owned or hereafter acquired by the
Company which are intended to be hereby conveyed, transferred, or
assigned and which may not legally be so conveyed, transferred or
assigned, or which cannot be so conveyed, transferred, or assigned
without the consent of other parties whose consent is not secured, or
without subjecting the Trustee to a liability not otherwise
contemplated by the provisions hereof or which otherwise may not be,
or are not, hereby lawfully and/or effectively granted, conveyed,
mortgaged, transferred and assigned by the Company;
H. The last day of the term of each leasehold estate (oral or
written and/or any agreement therefor) now or hereafter enjoyed by
the Company whether falling within a general or a particular
description of property herein;
I. Any property which pursuant to the terms of Article XIV is
excepted from the lien hereof;
J. All small tools and equipment and machinery of portable
size.
TO HAVE AND TO HOLD all and singular the above described properties
unto the said Old Colony Trust Company as Trustee hereunder, its successors
in the trusts hereof, and its and their assigns, to its and their own use
forever.
BUT IN TRUST, NEVERTHELESS, upon the terms and trusts herein set
forth for the equal pro rata benefit, security, and protection of the
bearers or registered owners of the Bonds from time to time certified,
issued, and outstanding hereunder, without any discrimination, preference,
priority, or distinction of any Bond or coupon over any other Bond or
coupon by reason of series, priority in the time of issue, sale, or
negotiation thereof, or otherwise howsoever, except that the bearers of (1)
coupons for the payment of which money has been deposited with the Trustee,
and (2) coupons extended or transferred or pledged apart from the Bonds to
which they appertain, and the bearers and/or registered owners of (3) Bonds
which have been called for redemption or have otherwise become due and for
the payment of which money has been deposited with the Trustee, (4) Bonds
tenders for the sale of which to any Sinking Fund, Maintenance and Renewal
Fund, Improvement Fund, or any analogous fund established pursuant to any
Indenture Supplemental hereto have been accepted by the Trustee, (5) Bonds
and coupons held by or for the benefit of the Company, (6) Bonds or coupons
purportedly lost, destroyed, or stolen not held by a bona fide purchaser,
(7) Bonds and coupons entitled to particular security by reason of the
establishment for the benefit of the holders thereof of a sinking or other
fund in accordance with the provisions hereof, and (8) Bonds the holders of
which have consented to any alteration of the rights, powers, and
privileges pursuant to the terms of any supplemental indenture executed
pursuant to the terms of 16.02 hereof shall in each case be entitled to the
particular status, whether preferential or deferred, hereinafter and/or in
any such supplemental indentures set forth in respect of such particular
Bonds or coupons;
PROVIDED HOWEVER, and these presents are upon the condition that, if
the Company, its successors or assigns, shall pay or cause to be paid the
principal of and the premium, if any, and interest on the Bonds at the
times and in the manner stipulated therein and herein and shall keep,
perform, and observe all and singular the covenants and promises in said
Bonds and in this Indenture expressed to be kept, performed, and observed
by and on the part of the Company, then this Indenture and the estate and
rights hereby granted shall, pursuant to the provisions of Article XV
hereof, cease, determine, and be void; otherwise to be and remain in full
force and effect.
The Company hereby declares that it holds and will hold all property
described in the foregoing clauses G and H as specifically reserved and
excepted, upon the trusts herein set forth and as the Trustee (or any
purchaser thereof upon any sale thereof hereunder) shall for such purpose
direct from time to time, to the fullest extent permitted by law or in
equity, as fully as is the same could be and had been hereby granted,
conveyed, mortgaged, transferred and assigned to and vested in the Trustee.
AND IT IS HEREBY COVENANTED, DECLARED, AND AGREED by and between the
parties hereto that all Bonds and the coupons appertaining thereto are to
be issued, certified, delivered, and held and that the above described
property is to be held subject to the further covenants, conditions, uses,
and trusts hereinafter set forth, and the Company, for itself and its
successors and assigns, does hereby covenant and agree to and with the
Trustee and its successor or successors in such trust for the benefit of
those who shall hold said Bonds and Coupons or any of them as follows:
ARTICLE I.
Definitions
1.01. Unless the context requires some other meaning, the words
and terms defined in this Article I, and their equivalents, shall have the
following meanings whenever used in this Indenture, such definitions to be
equally applicable to both singular and plural forms. All other terms used
in this Indenture which are defined in the Trust Indenture Act of 1939 or
which are defined therein by reference to the Securities Act of 1933
(except as herein otherwise expressly provided) shall have the meanings
assigned to such terms in said Trust Indenture Act and in said Securities
Act as they were in force on the date of the execution of this Indenture.
Definitions of certain other words, terms, or phrases used in a particular
Section or in particular Sections hereof only, will be found in that
Section or in one of those Sections.
1.02.
(1) Indenture
The word "Indenture" shall include and mean not only this Indenture
as originally executed but also this Indenture as it may be from time to
time supplemented, modified, or amended by any Supplemental Indenture.
(2) Herein, hereof, etc.
The words "herein", "hereof", "hereunder", "hereby", "hereinbefore",
"hereinafter", and other words of similar import refer to this Indenture as
a whole and not to any particular Article, Section, or other subdivision
thereof.
(3) Supplemental Indenture
The terms "Supplemental Indenture", or "Indenture Supplemental
hereto" shall mean any indenture hereafter duly authorized and entered into
between the Company and the Trustee in accordance with the provisions of
this Indenture, and duly acknowledged by the officers of the Company
executing the same, in form proper for recording or filing.
(4) Company
The word "Company" shall mean the party of the first part hereto,
Western Massachusetts Electric Company, and also any successor corporation
which shall become such in the manner prescribed in Article XIV but subject
to the provisions of said Article XIV.
(5) Obligor
The word "Obligor", when used with respect to Bonds issued or
issuable under this Indenture shall mean every person who is liable
thereon.
(6) Person
The word "person" shall mean an individual, a corporation, a
partnership, an association, a joint stock company, a trust, an
unincorporated organization, or a government or any agency or political
subdivision thereof.
(7) Corporation
The word "Corporation" shall also include any voluntary association,
joint stock company, business trust or other similar organization including
in particular Western Massachusetts Companies, a voluntary association
organized under a declaration of trust, dated January 15, 1927, as amended.
(8) Affiliate, Control
The word "Affiliate" as used with respect to any person shall mean
any other person, who or which, directly or indirectly, controls or is
controlled by or is under common control with such person. The word
"Control" as used with respect to any person shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of
the management and policies of such person, whether through the ownership
of voting securities or by contract, or otherwise. The words and terms
"Affiliated", "Affiliation", "Controlling", "Controlled by", and "under
common Control with" shall have meanings correlative with the foregoing.
(9) Trustee
The word "Trustee" shall mean Old Colony Trust Company and also any
successor Trustee which shall become such in the manner prescribed in
Article XIII.
(10) Responsible Officer, Responsible Officers
The terms "Responsible Officer" or "Responsible Officers" when used
with respect to the Trustee shall mean and include the chairman and
vice-chairman of the board of directors, the president, every vice
president, the secretary, the secretary of the board of directors, the
treasurer, every assistant vice-president, every trust officer, the
cashier, and any other officer or assistant officer of the Trustee with
supervisory powers who customarily performs functions similar to those
performed by any of the foregoing individuals or to whom any corporate
trust matter is referred because of his knowledge of and familiarity with a
particular subject.
(11) Bond, Bonds, Bondholder, Bondholders
The words "Bond" or "Bonds" shall include one or more, as the case
may be, coupon Bonds, fully registered Bonds and temporary Bonds and, to
the extent applicable, the coupons and claims for interest appertaining
thereto.
The words "Bondholder" or "Bondholders" and the words "holder" and
"holders" and other similar words or terms shall mean the bearer or bearers
of coupon Bonds not registered as to principal, or not so registered
otherwise than to bearer, the bearer or bearers of coupons and the
registered owners of Bonds at the time outstanding hereunder, subject,
however, to the extent applicable, to the provisions of 2.13 and 4.02.
The words "Registered Bond" or "Registered Bonds" shall mean one or
more coupon Bonds registered as to principal otherwise than to bearer and
one or more fully registered Bonds.
(12) Cancellation, Cancelled
The words "Cancellation", "Cancel" and "Cancelled", in respect of
Bonds or coupons, shall, at the option of the Trustee, include any cus-
tomary cremation approved by the Trustee, and any requirement of this
Indenture for the delivery of cancelled Bonds shall be satisfied by the
delivery of any customary cremation certificate so approved; any Bonds
which are cancelled shall be delivered to the Company unless the Company
shall in writing otherwise direct.
(13) Outstanding
The word "Outstanding" when used with reference to Bonds issued
hereunder shall mean all Bonds theretofore certified and delivered
hereunder, except
(a) Bonds theretofore paid or otherwise acquired by the Company
and surrendered to the Trustee for Cancellation; or
(b) Bonds for the purchase, payment or redemption of which the
necessary money shall have been deposited with, or shall then be held
by, the Trustee, and in the case of Bonds called for redemption, if,
and only if, notice of redemption shall have been duly given, or
irrevocable power of attorney to give such notice shall have been
delivered to the Trustee or other arrangements for so doing have been
made satisfactory to the Trustee; or
(c) Bonds surrendered to the Trustee by the holders thereof in
exchange for other Bonds of the same aggregate principal amount; or
(d) Bonds allegedly lost, stolen, or destroyed, and mutilated
Bonds surrendered to the Trustee in lieu of or in substitution for
which other Bonds shall have been issued hereunder, pursuant to 2.13.
(14) (excluding Company-owned Bonds)
The phrase "(excluding Company-owned Bonds)" occurring after or in
connection with the mention of "Bonds Outstanding" or "Outstanding Bonds"
shall be held to exclude therefrom in connection with the determination of
the percentage of the aggregate principal amount of Bonds Outstanding or of
the Bonds of a particular series Outstanding, Bonds owned by the Company,
or by any other Obligor upon the Bonds, or by any Affiliate of the Company
or of such other Obligor, except that for the purpose of determining
whether the Trustee shall be protected in relying on any such action,
direction, concurrence, or consent, only Bonds which the Trustee knows are
so owned shall be so excluded. Bonds so owned which have been pledged in
good faith may be regarded as Outstanding, regardless of the above phrase,
if the pledgee shall establish to the satisfaction of the Trustee the
pledgee's right to act as aforesaid in respect of such Bonds and that the
pledgee is not an Affiliate of the Company or of any such other Obligor.
In case of a dispute as to such right, any decision by the Trustee taken
upon the advice of counsel shall be fall protection to the Trustee.
(15) Bondholders' Notice; Bondholders' Request
The term "Bondholders' Notice" shall mean a written notice and the
words "Bondholders' Request" shall mean a written request, in each case
filed with and satisfactory to the Trustee, from Bondholders (whose
ownership of Bonds shall, from time to time, if and when requested by the
Trustee, be established by proof satisfactory to the Trustee) of such part,
if any, of Bonds as may be specifically provided for in respect of a
particular matter by any of the provisions hereof, or, in respect of any
matter as to which no such specific provision is made herein, of not less
than:
(a) in respect of each such notice, ten per cent (10%) in prin-
cipal amount of all Bonds Outstanding (excluding Company-owned Bonds)
at the time of such notice, and
(b) in respect of each such request, twenty-five per cent (25%)
in principal amount of all Bonds Outstanding (excluding Company-owned
Bonds) at the time of such request,
setting forth to the satisfaction of the Trustee, in respect of each such
notice, particulars of any existing default and of the continuance thereof,
and of all, if any, other matters covered by such notice, and, in respect
of each such request, particulars of all matters covered by such request,
and in the latter case also specifying any action requested or
contemplated, under this Indenture, or any Bond, with respect to which such
request was filed.
(16) Lien of this Indenture, Lien hereof
The terms "Lien of this Indenture" and "Lien hereof" shall mean the
lien created by this Indenture (including the after-acquired property
clause hereof) and the lien created by any subsequent conveyance or
delivery to the Trustee or otherwise created, effectively constituting any
property a part of the security held by the Trustee upon the terms and
trust and subject to the covenants, conditions, and uses specified in the
Indenture.
(17) Excepted Property
The term "Excepted Property" shall mean property of the character
described as included in paragraphs A to J, both inclusive, of the
foregoing description of the property conveyed by these presents to the
Trustee.
(18) Permitted Encumbrances
The term "Permitted Encumbrances" shall mean, as of any particular
time, any of the following:
(a) the Lien of this Indenture upon the Mortgaged Property and
all liens and encumbrances thereon junior hereto;
(b) liens for taxes, assessments, or governmental charges not
then delinquent, on the Mortgaged Property, or any part of it, or, if
delinquent, in the course of contest in good faith;
(c) liens arising out of proceedings in court in course of con-
test in good faith;
(d) liens or charges, if any, incidental to current construction
or current operation;
(e) liens securing indebtedness neither payable by, nor assumed
or guaranteed by, the Company, nor on which it customarily pays
interest, existing either at the date of the execution of these
presents as to the Mortgaged Property, or, as to property thereafter
acquired, at the time of acquisition by the Company, upon real estate
or right in or relating to real estate acquired by the Company for
substation, transmission line, distribution line, or right of way
purposes;
(f) defects in title to rights of way for transmission and dis-
tribution lines over public or private property;
(g) easements, rights of way, licenses, restrictions,
exceptions, reservations, or other interests in or against any
property and/or rights of way of the Company created, reserved, or
existing for the purpose of public highways, private roads,
railroads, railroad sidetrack, transmission and distribution lines,
telegraph and telephone lines, and other like purposes which do not
materially impair the use of such property and/or rights of way for
the purposes for which such property and/or right of way are held by
the Company;
(h) zoning ordinances and other similar rights reserved to or
vested in any municipality, or official, commission, or board
thereof, or other public authority to control or regulate the
property of the Company provided that the use of such property by the
Company for the purposes for which it is held by the Company is not
materially interfered with thereby;
(i) rights reserved to or vested in the United States of America
or any state, municipality, or public authority by the terms of any
franchise, grant, license, or permit or by any provision of law to
take, purchase or recapture, or to designate a purchaser for, any of
the properties of the Company;
(j) rights reserved to or vested in the United States of America
or any state, municipality, or public authority to use, control or
regulate any property of the Company;
(k) any obligations or duties of the Company to the United
States of America or any state, municipality, or public authority
with respect to any franchise, grant, license, or permit.
(19) Directors' Resolution
The term "Directors' Resolution" shall mean a resolution of the Board
of Directors or of the Executive Committee of the Company filed with the
Trustee, certified by the Clerk or the Assistant Clerk of the Company to
have been duly adopted by said Board or Committee and to be in full force
and effect on the date of its certification.
(20) Officers' Certificate
The term "Officers' Certificate" shall mean a certificate or opinion
filed with the Trustee complying with the provisions of 17.02, signed by
the President or a Vice President and the Treasurer or an Assistant
Treasurer of the Company.
(21) Engineer
The word "Engineer" shall mean an individual who is an engineer,
appraiser, or other expert, or a co-partnership or a corporation engaged in
such business, who or which, unless required to be independent, may be
regularly employed by the Company.
(22) Accountant
The word "Accountant" shall mean any accountant or accounting firm,
who or which need not be certified, licensed, or public, and, unless
required to be independent, may be an officer or employee of the Company.
(23) Engineer's Certificate, Accountant's Certificate
The terms "Engineer's Certificate" and "Accountant's Certificate"
shall mean a certificate conforming to the requirements of 17.02 signed by
an Engineer or by an Accountant, as the case may be, appointed and paid by
the Company and approved by the Trustee in the exercise of reasonable care.
With respect to the Cost of Property Additions or of Property
Retirements included in any Accountant's Certificate which have been
included in a previous Accountant's Certificate, the Accountant making such
Certificate may rely upon the figures as to Cost contained in such previous
Certificate.
(24) Independent
The word "Independent" when applied to any engineer, appraiser,
accountant, or other expert shall mean a person who (1) is in fact
independent, (2) does not have any substantial interest, direct or
indirect, in the Company or in any other Obligor upon the Bonds or in any
Affiliate of the Company or of any such other Obligor, and (3) is not
connected with the Company or any such other Obligor or any Affiliate of
the Company or of any such other Obligor as an officer, employee, promoter,
underwriter, trustee, partner, director, or person performing similar
functions. The Trustee is entitled to require an Officers' Certificate,
satisfactory to it, as to the independence of any Engineer or Accountant.
(25) Independent Engineer's Certificate, Independent Accountant's
Certificate
The terms "Independent Engineer's Certificate" and "Independent
Accountant's Certificate" shall mean a certificate corresponding with an
Engineer's Certificate or an Accountant's Certificate, respectively, in all
respects except that the Engineer or the Accountant shall be Independent.
Each such Certificate shall state that the signer thereof has read the
definition of the word "Independent" herein and that the signer is
independent within the meaning of that definition.
Whenever the Company is required to furnish to the Trustee pursuant
hereto an Independent Engineer's Certificate or an Independent Accountant's
Certificate, the signer thereof must be appointed by the President or
Treasurer of the Company and approved by the Trustee in the exercise of
reasonable care.
(26) Opinion of Counsel
The term "Opinion of Counsel" shall mean a written opinion complying
with the provisions of 17.02 filed with the Trustee by counsel (who may be
counsel or of counsel to the Company) selected by the Company and approved
by the Trustee, or selected by the Trustee in the exercise of reasonable
care.
(27) Evidence of Approval by Trustee
The acceptance by the Trustee of any one of the foregoing Cer-
tificates or of an Opinion of Counsel shall be sufficient evidence that the
signer or signers have been approved by, or are satisfactory to, the
Trustee, as the case may be.
(28) Fundable Property
The term "Fundable Property" shall mean property of the character
hereinafter described, but excluding Excepted Property, which the Company
shall (1) acquire or construct after May 31, 1954 (including, if in process
of construction, any property in so far as actually constructed subsequent
to said May 31), (2) be entitled by its corporate powers, franchises, or
other legal rights to own, possess, operate and use in the ordinary conduct
of its business, and (3) have good and marketable title to, subject only to
Permitted Encumbrances, and subject to, or to be immediately made subject
to, the Lien of this Indenture; provided however that Fundable Property
shall also include, to the extent permitted by Article XIV hereof, property
otherwise complying with this definition of Fundable Property acquired and
held by the Company pursuant to any merger or consolidation permitted by
14.01; provided further that in case of property acquired or constructed in
connection with hydro-electric works for the maintenance and operation of
which the Company shall not have obtained a license under the Federal Power
Act or other similar legislation, the Company shall be deemed to have
complied with the requirements of clause (2) above in respect of such
property if an Opinion of Counsel shall be filed with the Trustee covering
such situation, in the manner specified in subparagraph (j) of 3.08 hereof;
and provided further that if any property at any time subject to the Lien
hereof shall be or shall have been retired from service subsequent to May
31, 1954, and shall consist solely of materials or supplies usable as
components in the construction of electric utility or steam plant, and the
Cost thereof (less any credit for salvage value actually received) shall
have been charged to the depreciation reserve, the reserve for
contributions to extensions, or the surplus account of the Company and such
property shall thereafter be put into service again and shall otherwise
comply with this definition of Fundable Property, it shall be held to be
Fundable Property even though originally acquired prior to said May 31,
1954.
Such property shall consist only of property (including additional or
partly completed construction work) used or planned to be used in the
business of operating the Company's electric utility and steam systems and
acquired or constructed by the Company and properly charged to its electric
utility and steam accounts (including work-in-progress accounts) in
accordance with any system of accounting required by law, or by regulatory
or other public authorities having jurisdiction, to be followed by the
Company or, in the absence of such requirement, in accordance with sound
accounting practice then current. Property held jointly with others shall
be includable in such property provided that only the right, title, and
interest of the Company therein shall be included in determining Cost or
Fair Value. Such property, however, shall not include
(i) leasehold interests, or any extensions, improvements, or
additions of or to any property in which the Company shall hold only
a leasehold interest unless the Company shall have the right under
the provisions of the agreement creating said leasehold interest to
remove such extensions, improvements, or additions on or prior to the
expiration of the term thereof;
(ii) real estate unless owned in fee simple or rights in real
estate unless owned in perpetuity;
(iii) going concern value or good will, as such.
No portion of any property shall be excluded by the requirements of
this subdivision for the reason that any other portion of such property
would be excluded by said requirements, but the exclusion of such other
portion shall be considered in determining the Cost or Fair Value of the
unexcluded portion.
(29) Cost
The word "Cost" shall mean
(a) as to any property owned by the Company on May 31, 1954 the
book value thereof on the books of the Company as of that date
without deducting therefrom applicable reserves for depreciation
and/or retirements as of that date;
(b) as to any property acquired or constructed after May 31,
1954, the sum of (i) any cash expenditures made or agreed to be made
by the Company therefor; (ii) the fair market value in cash (as of
the date of delivery) of any securities or other property delivered
by the Company as consideration therefor; (iii) whichever shall be
the lesser of (1) an amount equivalent to the principal amount of any
indebtedness (whether or not assumed by the Company) secured by prior
lien upon such property outstanding at the time of, or reserved by
the vendor or created by the Company, at the time of, the acquisition
of such property or (2) the aggregate amounts (exclusive of premium
or interest) expended by the Company to pay off said indebtedness or
to release the property from said lien; (iv) in respect of property
constructed by or for the Company, such allowances or charges for
interest during construction, taxes, engineering, legal expenses,
superintendence, casualty insurance, and other items during
construction as in the opinion of the signers of any Certificate
hereunder wherein the Cost of such property is required to be stated,
shall be proper under sound accounting practice then current in
respect of the particular property specified in such Certificate; (v)
general overhead expenses to the extent that they are properly
chargeable under sound accounting practice then current to the cost
of the property, whether acquired or constructed by the Company; and
(vi) the amount of any unsecured indebtedness (other than
indebtedness described under (iii) above) issued or assumed by the
Company as consideration for the acquisition or construction of such
property, provided however that in any case where property shall have
been acquired by the Company, without the payment of cash, property,
or securities or the issue, assumption, or payment of indebtedness,
no determination of Cost shall be required, and the word Cost shall
in any such case mean an amount equal to the Fair Value thereof at
the time of acquisition by the Company;
(c) as to any materials and supplies at any time subject to the
Lien hereof which shall have been or shall be retired from service by
the Company subsequent to May 31, 1954 and the Cost thereof (less any
credit for salvage value actually received) charged to the
depreciation reserve, the reserve for contributions to extensions or
the surplus account of the Company, and which shall subsequently be
put into service again, the Fair Value of such property at the time
when again put into service, or the value at which such property was
previously retired, whichever shall be lower.
(d) as to any property owned by a Corporation merging or
consolidating with the Company pursuant to the provisions of Article
XIV, the book value thereof less any reserve for depreciation
applicable thereto as recorded on the books of said Corporation at
the date of said merger or consolidation.
In determining Cost in cases in which property acquired consists
partly of Fundable Property and partly of other property or in cases in
which Cost is not allocated between various items of property, Cost may be
allocated to the various parts or items of property in any manner which the
signers of the Certificate in which the Cost of such parts or items is
required to be stated shall deem reasonable and in accordance with sound
accounting practice.
In the event that the Company shall acquire an electric utility
system or electric utility systems as a whole without the payment of
separate or distinct consideration for the acquisition of any rights or
intangible property acquired simultaneously therewith or as a part thereof,
the term Cost as applied to the Fundable Property so acquired may be held
to include such part of the total consideration paid therefor as shall be
both reasonable and proportionate, but shall be held to exclude any value
based on going concern value or good will.
(30) Fair Value
The term "Fair Value" of property shall mean the price which a
willing buyer thereof would pay to a willing seller at private sale, taking
into consideration its location, condition, and adaptability for the
purposes for which it is designed, but not exceeding the reproduction cost
new of such property less observed depreciation, which reproduction cost
may, for property under construction, include estimates for items during
construction described in clauses (iv) and (v) of subparagraph (b) of the
definition of Cost, but no other items of intangible value.
Unless otherwise expressly provided, the term "Fair Value" when
applied to Property Additions shall mean the Fair Value to the Company of
such Property Additions at the date of the acquisition thereof by the
Company and the term "Fair Value" in all other cases shall apply as of the
date of the Certificate to be furnished in respect thereof.
(31) Property Additions
The term "Property Additions" shall mean Fundable Property which is
to be Made the Basis for Action or Credit hereunder, and shall include
Fundable Property purchased, constructed, or otherwise acquired by the
Company to renew, replace, or to substitute for old, worn out, retired,
discontinued or abandoned property or property otherwise no longer used or
useful, the retirement of which has been charged against the depreciation
reserve, the reserve for contributions to extensions, or the surplus
account of the Company, but shall exclude any property made or constructed
by the Company in keeping or maintaining the Mortgaged Property in good
repair, working order and condition, the cost of which is not properly
chargeable to electric utility or steam plant account.
(32) Property Retirements
The term "Property Retirements" shall mean any of the property of the
Company of the character described in the final paragraph of the
description of Fundable Property, but excluding Excepted Property, which
shall have become worn out or become permanently unserviceable, or shall
have been lost, sold, destroyed, abandoned, surrendered on lapse of title,
or retired from service for any reason, or shall have permanently ceased to
be used or useful in the business of the Company, but in each case only to
the extent that the Cost (less any credit for salvage value actually
received) thereof has been previously charged to the depreciation reserve,
the reserve for contributions to extensions, or the surplus account of the
Company, subsequent to May 31, 1954, or in the event that such property
shall have been sold, to the extent that the Cost thereof, or any balance
of the Cost thereof, not charged as above provided, shall have been
credited to the plant and equipment (devoted to utility operation) account
of the Company, subsequent to May 31, 1954.
(33) Net Property Addition
The term "Net Property Additions" shall mean the total of all
Property Additions less the total of all Property Retirements.
(34) Made the Basis for Action or Credit hereunder
The phrase "Made the Basis for Action or Credit hereunder" shall mean
when applied to Property Additions, Property Retirements or Net Property
Additions, any thereof
(i) which have been made the basis for the withdrawal of moneys
from the hands of the Trustee;
(ii) which shall have been made the basis for any credit to the
Improvement Fund, or to a Sinking Fund, Maintenance and Renewal Fund,
Improvement Fund, or any analogous fund established in accordance
with the provisions of any Supplemental Indenture; or
(iii) which have been made the basis for the issue of additional
Bonds.
(35) Earnings Certificate
The term "Earnings Certificate" shall mean an Officers' Certificate
(which, unless one of the Officers signing the same is an Accountant, shall
also be signed by an Accountant) dated not more than thirty (30) days prior
to the date of the application to the Trustee to which the Earnings
Certificate shall pertain, setting forth in reasonable detail
(a) the net earnings available for interest, computed as here-
inafter provided, of the Company for a period of twelve (12) con-
secutive calendar months within the fifteen (15) calendar months
immediately preceding the first day of the month in which the said
application to the Trustee is made;
(b) the annual interest charges on (i) Bonds Outstanding at the
date of said Certificate, except Bonds for the payment, retirement,
or redemption of which Bonds to be issued pursuant to such
application are to be issued, (ii) Bonds proposed to be issued pur-
suant to such application and (iii) any obligations (whether or not
the payment of the principal or of the interest thereon is assumed by
the Company) secured by or proposed to be secured by any mortgage,
charge, encumbrance or lien upon the Mortgaged Property superior to
or on a parity with the Lien of this Indenture;
(c) that such net earnings available for interest are at least
twice the aggregate of the annual interest charges on all said
indebtedness; and
(d) that such net earnings available for interest have been
computed as provided in this Section.
The net earnings available for interest in any such twelve (12) month
period shall be computed on an accrual basis in accordance with sound
accounting practice then current by deducting from total operating revenues
for such period the total operating expenses for such period, including (a)
all taxes, other than Federal income taxes, excess profits taxes, and any
other taxes imposed on or measured by gross or net income or earnings or
undistributed earnings or income or surplus, (b) all charges on the
Company's books to expense or income to provide for depreciation (but
excluding charges to income for the amortization of plant and equipment
(devoted to utility operation) account or amounts transferred therefrom),
(c) charges for maintenance, and (d) interest, other than interest on any
Bonds, on obligations secured by any mortgage, charge, encumbrance or lien
upon the Mortgaged Property superior to or on a parity with the Lien
hereof, and on any debentures, notes or other evidences of indebtedness for
the payment, retirement or redemption of which, or in exchange for which,
Bonds to be issued pursuant to such application are to be issued, but
excluding, however, any charges or provision for the Improvement Fund or
for any Sinking Fund, Maintenance and Renewal Fund, Improvement Fund or
analogous fund established pursuant to the terms of any Supplemental
Indenture for the retirement of debt or for the amortization of any debt
discount and expense during said period, and also excluding any profits and
losses from the sale or other disposition of capital assets made in said
period.
If any property of the Company owned by it at the time of making any
Earnings Certificate shall consist of a plant or system which shall have
been acquired during or after any period for which net earnings are to be
computed, the actual net earnings or net losses of such property (computed
in the manner specified in the definition for the computation of the net
earnings of the Company, but eliminating all intercompany items, if any)
during such period, or such part of such period as shall have preceded the
acquisition thereof, to the extent that the same have not otherwise been
included, shall be treated as the net earnings or net losses of the Company
for the purposes of an Earnings Certificate. The net earnings or net losses
of any property of the Company consisting of a plant or system which shall
have been disposed of by the Company during or after any period for which
net earnings are to be computed shall not be treated as any part of the net
earnings of the Company for the purposes of an Earnings Certificate.
If the Company shall be consolidated or merged into another
Corporation, or if another Corporation shall be merged into the Company in
accordance with the provisions of Article XIV hereof at any time within
fifteen (15) months prior to the first day of a month in which an
application to the Trustee to which an Earnings Certificate shall pertain
shall be made, the said Earnings Certificate shall include as a part of the
net earnings of the Company the net earnings of the said other Corporation
for a period identical with the period for which the Company's net earnings
shall be determined, computed as hereinbefore in this subparagraph
provided, except that if said other Corporation shall have issued
indebtedness secured by a first or other mortgage pledge lien or
encumbrance upon its property and maturing more than twelve (12) months
from the date of the issue thereof which shall be Outstanding at the time
of the making of such Earnings Certificate, and which is not to be paid
retired or redeemed with the proceeds of, or exchanged for, the Bonds to be
issued pursuant to such application such indebtedness shall be considered
for the purpose of said Earnings Certificate as if it consisted of Bonds
issued hereunder, and thereafter in determining the net earnings of the
Corporation resulting from such merger or consolidation for the purposes of
any subsequent Earnings Certificate any such indebtedness shall likewise be
considered as if it consisted of Bonds issued hereunder.
(36) Commission Orders
The term "Commission Orders" shall mean duly and properly certified
copies (except in cases where until such copies can be made available it is
customary to accept temporarily telegrams or like informal written
evidences; and in any such cases duly and properly certified copies as soon
as available) delivered to the Trustee of all orders consents, permissions,
or authorizations issued by the Department of Public Utilities of
Massachusetts, or by the Securities and Exchange Commission, or by any
Board, Department or official succeeding in whole or in part to the duties
of either, or by any governmental agency which shall then have jurisdiction
over the issue, sale, or negotiation of any Bonds issuable hereunder,
ordering, consenting to, permitting or authorizing to the full extent
required by law the issue, sale, or negotiation of the particular Bonds in
respect of which said orders, consent, permissions, or authorizations are
legally necessary.
(37) Published Notice
The term "Published Notice" shall mean a notice given by publication
not less than once a week for not less than two (2) successive weeks (or
with such other frequency and duration, if any, as may be specifically
provided for in respect of a particular publication by any of the
provisions hereof) in at least two (2) daily newspapers printed in the
English language, published and of general circulation, one being in the
City of Boston, Massachusetts.
1.03 For the purpose of evidencing to the Trustee Net Property
Additions from time to time available as a basis for the withdrawal of
moneys from the hands of the Trustee pursuant to 3.06 or 8.03(b), the issue
of additional Bonds pursuant to 3.08, or as a basis for credit against the
annual Improvement Fund obligation payable under 6.01 or against any
obligation under any analogous fund or under any Sinking Fund established
by any Supplemental Indenture for the benefit of any Bonds issuable
hereunder, the Company shall file with the Trustee an Officers' Certificate
(hereinafter called Certificate of Available Net Property Additions)
conforming to the requirements of 17.02 substantially in the following
form:
WESTERN MASSACHUSETTS ELECTRIC COMPANY
To Old Colony Trust Company, Trustee
Under Indenture dated as of August 1, 1954.
Certificate No. of Available Net Property Additions
The undersigned, in conformity with the provisions of the above
described Indenture, hereby certify in connection with the application of
the Company dated , 19
[for the issue of additional
(here describe the issue of Bonds applied for) in the aggregate principal
amount of , pursuant to 3.08 thereof]
(or)
[for the withdrawal by the Company of cash in the sum of $
(here insert the amount of cash desired to be withdrawn) held by the
Trustee pursuant to 3.06 or 8.03(b) thereof] (omit inapplicable section)
(or)
[for credit in the amount of $ against the Improvement Fund
pursuant to 6.01 thereof (if credit be sought against the obligation of any
Sinking Fund, Maintenance and Renewal Fund, Improvement Fund or analogous
fund, the name of such fund should be substituted) payable by the Company
in the sum of $ on , 19 , pursuant to
section thereof] (omit whichever purpose is inapplicable) as
follows:
A. That the Cost or Fair Value, whichever is
less, of all Property Additions made by the Company
subsequent to May 31, 1954, and on or prior to
, 19 (here insert the terminal date specified in
the last previous Certificate of Available Net
Property Additions) is $____________________________
(Omit Item A in first Certificate)
B. That the Cost or Fair Value, whichever is
less, of all Property Additions made by the Company
subsequent to , 19 , (here insert in the
first Certificate May 31, 1954, and in each
subsequent Certificate the date inserted in the space
in Item A) and on or prior to , 19 ,
(here insert a date not more than 60 days prior to
the date of the application hereinbefore referred to)
is $_________________________________
C. Constituting the Cost or Fair Value,
whichever is less, of all Property Additions
$_____________________
(Item A plus Item B)
D. That the Cost of all Property Retirements
made by the Company after May 31, 1954, and on or
prior to , 19 , (here insert the date
inserted in the second space in Item B) is
$________________________
E. That the total of all Net Property Additions
heretofore made the basis for the withdrawal of money
from the hands of the Trustee pursuant to the
provisions of 3.06 or of 8.03(b), or the issue of
additional Bonds pursuant to 3.08, or irrevocably
allocated for credit against the Improvement Fund
pursuant to the provisions of 6.01, or (here insert
the name of any Sinking Fund, Maintenance and Renewal
Fund, Improvement Fund or analogous fund created by
Supplemental Indenture against the obligations of
which Net Property Additions have been heretofore
credited) is $____________________________
F. Leaving as Available Net Property Additions
$____________________________
(Item C less the total of Items D and E)
G. That the Available Net Property Additions
now made the basis for the application in connection
with which this Certificate is filed is $
____________________________________
(Office held)
____________________________________
(Office held)
Dated: , 19
ARTICLE II.
Form, Execution, Registration and Exchange of Bonds
2.01 At the option of the Company the Bonds issued hereunder may be
issued from time to time in any number of different series. All Bonds of
the same series shall be identical in tenor and effect, except for number
and for necessary or proper variations between temporary Bonds, coupon
Bonds, and fully registered Bonds, or Bonds of different denominations, and
in the case of Bonds of serial maturity, in date of maturity, rate of
interest, and price, terms, and conditions of redemption. The form of each
series shall be distinguished by such designation or descriptive title as
the Board of Directors or the Executive Committee of the Company may select
for such series and as may be approved by the Trustee and each Bond issued
hereunder shall bear upon the face thereof the designation or descriptive
title so selected for the series to which it belongs.
All coupon Bonds of the same series shall bear the same date. Each
fully registered Bond shall bear interest from its date and shall be dated
as of the interest payment date next preceding the date of issue, unless
issued on the date as of which the Bonds of that series were originally
issued, or on an interest payment date, in either of which cases it shall
bear interest from and shall be dated as of such date; provided however -
that if the Company shall be in default in the payment of interest on any
series of Bonds at the time of the issue or transfer of a fully registered
Bond of such series, such fully registered Bond if issued in exchange for a
coupon Bond or Bonds of the same series surrendered together with all
unpaid coupons appertaining thereto, shall be dated as of the date of the
commencement of the period for which such interest shall be in default.
Upon the issue of any fully registered Bond in permanent form the
Trustee may reserve unissued a coupon Bond or coupon Bonds of the same
series in an aggregate amount equal to the face of such fully registered
Bond and in such event shall endorse on such fully registered Bond the
number or numbers of the coupon Bond or Bonds so reserved, but, in lieu of
reserving coupon Bonds as in this Section above provided, the Trustee may
endorse on each such fully registered Bond a number or numbers such as
would have been endorsed thereon if coupon Bonds had been reserved against
each such Bond as hereinabove provided.
Coupon Bonds, other than the 2.95% Bonds and the coupons thereto
appertaining, shall be substantially in the form heretofore recited for the
2.95% Bonds in coupon form, with such omissions, variations, and insertions
as are permitted by this indenture, and the fully registered Bonds of any
such series shall follow the form of the coupon Bonds of that series with
only such changes as are necessitated by the change from a coupon Bond with
appurtenant coupons to a duly registered Bond of the same issue.
2.02 The permanent 2.95% Bonds shall be substantially in the forms
hereinbefore set forth, with such changes therein as shall be approved by
the Company and the Trustee, shall be designated as the First Mortgage
Bonds, Series A, 2.95%, due October 1, 1973, of the Company, shall be
issuable hereunder in the aggregate principal amount of eleven million
dollars ($11,000,000) and no more except as provided in 2.13 hereof, if in
coupon form shall be dated as of August 1, 1954, shall mature October 1,
1973, shall bear interest at the rate of two and ninety-five hundredths
percentum (2.95%) per annum from the date thereof to the date of payment,
payable semi-annually on the first days of April and October in each year
(the principal, premium, if any, and the interest thereon being payable in
coin or currency of the United States of America which at the time of
payment is legal tender for public and private debts), shall be issued in
coupon form registerable as to principal only, in the denomination of one
thousand dollars ($1,000) each, and in fully registered form in
denominations of one thousand dollars ($1,000) and any multiple thereof,
and shall be redeemable at the times and in the manner provided in Article
V and Article VI hereof.
The Bonds of every series other than the 2.95% Bonds shall be printed
in the English language and shall (1) bear such date, (2) be payable as to
both principal and interest in such coin or currency and at such time or
times (which shall include the right to issue serial Bonds) and at such
place or places, (3) bear interest at such rate, (4) be in such
denominations, (5) be in fully registered form or be coupon Bonds
registerable as to principal or not, (6) contain such provisions and con-
ditions, if any, with respect to exchangeability for Bonds of another
series, tax exemption, tax reimbursements redemption, sinking, amorti-
zation, improvement, renewal, maintenance, or other fund, or limitation of
the aggregate principal amount of Bonds of such series issuable, (7) be
entitled to be convertible at the option of the holders into other
securities so far as permitted by law, and (8) have such other charac-
teristics not in conflict with the terms hereof as the Board of Directors
or the Executive Committee of the Company shall determine with respect to
the Bonds of such series prior to the issue of any of the Bonds thereof.
The Bonds of any series may bear such legends or other variations in form
as may be required to comply with the rules of any stock exchange or to
conform to any usage or law.
The forms of Bonds of such other series and the applicable charac-
teristics referred to in (6), (7) and (8) in this Section shall be set
forth in the Supplemental Indenture authorizing the issue of said Bonds.
2.03 All Bonds from time to time issued hereunder shall be executed
in the name and on behalf of the Company, and under its corporate seal
impressed or imprinted thereon, by its President or a Vice President and
its Treasurer or an Assistant Treasurer or by such other form of execution
permitted by law as may be prescribed by a Directors' Resolution and shall
be expressed to take effect as sealed instruments. In case any officer of
the Company who shall have signed or sealed any Bond shall cease to be such
officer of the Company before the Bond so signed or sealed shall have been
actually delivered, such Bond, nevertheless, may be delivered and issued
with the same force and effect as though the person or persons who had
signed or sealed such Bond had not ceased to be an officer or officers of
the Company. Furthermore, any Bond may be signed and sealed on behalf of
the Company by such persons as at the actual date of the execution of such
Bond shall be the proper officers of the Company, although at the date of
such Bond such persons shall not have been officers of the Company. The
coupons to be attached to any coupon Bond shall be authenticated by the
facsimile signature of the present or any future Treasurer of the Company.
The Company may adopt and use for that purpose the facsimile signature of
any person who shall have been such Treasurer notwithstanding the fact that
he may not have been such Treasurer at the date of such Bond or that he may
have ceased to be such Treasurer at the time when such Bond shall be
actually delivered.
2.04 Bonds when executed shall be delivered to the Trustee for
certification by it; and the Trustee shall certify and deliver said Bonds
as in this Indenture provided and not otherwise. Before certifying and
delivering any coupon Bond, the Trustee shall detach and Cancel all coupons
thereto appertaining then matured representing installments of interest on
said Bond which have been paid or for which payments shall have been
provided, except that coupon Bonds issued upon exchanges shall bear such
coupons as may be necessary in order that no gain or loss of interest shall
result from any exchange of a fully registered or temporary Bond for a
coupon Bond or the exchange or substitution of a new Bond for a Bond
mutilated or purportedly lost, destroyed, or stolen.
No Bond and no coupon thereto appertaining shall be or become valid
or obligatory for any purpose or entitled to any benefit under this
Indenture until the Trustee's certification thereupon shall have been
signed by the Trustee, and such certification by the Trustee upon any Bond
shall be conclusive evidence that such Bond has been duly certified and
delivered hereunder and is valid, obligatory, and entitled to the benefit
of this Indenture.
2.05 Until Bonds in permanent form are ready for delivery, there may
be issued, certified and delivered, in lieu thereof and subject to the same
provisions, limitations, and conditions, one or more Bonds of any series
authorized to be issued under this Indenture in temporary form, which may
be typewritten, printed, or lithographed, may be of any authorized
denomination or denominations satisfactory to the Company and approved by
the Trustee, and otherwise shall be substantially of the tenor of the Bonds
of such series, with or without one or more coupons, in fully registered
form or in coupon form, and with or without provision for the registration
thereof as to principal, and with or without a recital of specific
redemption prices, and with such other omissions and with such other
insertions and variations as the officers executing such Bonds may
determine. The temporary Bonds shall be entitled to the security and
benefit of this Indenture to the same extent as permanent Bonds of the same
series and maturity certified and delivered hereunder. The Company shall
without unreasonable delay, at its own expense, prepare, execute and
deliver to the Trustee, and thereupon the Trustee, upon presentation and
surrender of the temporary Bonds with all unmatured coupons, if any,
appertaining thereto, shall certify and deliver in exchange therefor,
engraved or lithographed or printed permanent Bonds of the same series and
for the same aggregate principal amount. Temporary Bonds so surrendered for
exchange shall be considered as having been surrendered for Cancellation.
Upon such exchange, which the Company shall make at its own expense and
without making any charge therefor, the Trustee shall forthwith Cancel the
surrendered temporary Bonds.
2.06 The Trustee is hereby authorized by the Company to certify all
Bonds issued hereunder by the Company which are presented to it for
certification by the Company. The Trustee is also hereby appointed
Registrar of the Company and hereby authorized and empowered to register
all Bonds in fully registered form issued by the Company, and the transfers
thereof, to certify new Bonds in fully registered form issued by the
Company pursuant to such transfers, to register, transfer, and discharge
from registry the principal of all coupon Bonds issued hereunder presented
to it by the bearers or registered owners thereof, for such register,
transfer, or discharge, and to make exchanges of Bonds of any one series of
any denomination for an equal principal amount of Bonds of the same series
of any other denomination, of fully registered Bonds for coupon Bonds of
the same series, of coupon Bonds for fully registered Bonds of the same
series, of temporary Bonds for permanent Bonds of the same series, and of
mutilated Bonds and/or coupons for Bonds or coupons issued in substitution
therefor.
2.07 The Company shall keep at the principal office of the Registrar,
and at such other offices or agencies of the Trustee or of the Company as
may be specified in the Bonds of any series, or in any Supplemental
Indenture securing them, books for the registration, and transfer, and for
the exchange of fully registered Bonds, and for the registration, transfer,
and discharge from registry, and for the exchange of coupon Bonds issued
hereunder.
The Company shall also keep at any other office or agency of the
Trustee or of the Company required to be maintained for such purpose in
order to comply with the regulations of any stock exchange on which the
Bonds may at any time be listed, like books to the extent necessary to
comply with such regulations.
2.08 The bearer of any coupon Bond issued hereunder which is
expressed to be registerable as to principal may have the ownership thereof
registered as to principal at the principal office of the Trustee (or at
such other agency as may be provided in respect of a particular series) and
such registration shall be noted on the Bond. After such registration no
transfer of said Bond shall be valid unless made at said office or agency
by the registered owner in person or by his duly authorized attorney and
similarly noted on the Bond; but such Bond may be discharged from
registration by being in like manner transferred to bearer, and thereupon
transferability by delivery shall be restored, but such Bond may again and
from time to time be registered or transferred as before. Such
registration, however, shall not affect the negotiability of the coupons,
but every such coupon shall continue to be transferable by delivery merely,
and shall remain payable to bearer, and payment thereof to bearer shall
fully discharge the Company in respect of the interest therein mentioned,
whether or not the Bond be registered as to principal.
The registered owner of any fully registered Bond issued hereunder
may transfer the ownership of said Bond at the principal office of the
Trustee (or at such other agency as may be provided in respect of a
particular series) by surrendering said Bond for transfer accompanied by a
written instrument of transfer signed by him or his duly authorized
attorney, all in form satisfactory to the Trustee or to such agent, and
thereupon the Company shall issue and the Trustee shall certify and
register a new fully registered Bond or new fully registered Bonds of the
same series and maturity date as the Bond or Bonds surrendered and in the
same aggregate principal amount in the name or names designated by the
transferor. The fully registered Bond or Bonds so surrendered shall be
considered as having been surrendered for Cancellation and shall be
forthwith Cancelled by the Trustee.
2.09 The 2.95% Bonds in fully registered form may be exchanged at the
principal office of the Trustee for a like aggregate principal amount of
2.95% Bonds in fully registered form of other denominations and, upon
surrender to the Trustee for exchange of one or more of such 2.95% Bonds,
the Company shall execute and the Trustee shall certify and shall deliver
in exchange therefor a like aggregate principal amount of such 2.95% Bonds
of other denominations. Bonds so surrendered for exchange shall be
considered as having been surrendered for Cancellation and shall be
forthwith Cancelled by the Trustee.
The 2.95% Bonds in fully registered form may also be exchanged for
2.95% Bonds in coupon form of a like aggregate principal amount, and upon
surrender at the principal office of the Trustee of any such Bond or Bonds
accompanied by a written instrument of transfer signed by the registered
owner thereof or by his duly authorized attorney, in form satisfactory to
the Trustee, the Company shall issue and the Trustee shall certify (unless
coupon Bonds previously certified shall be available) and deliver in
exchange therefor 2.95% Bonds in coupon form in a like aggregate principal
amount, with such coupons annexed thereto as may be necessary in order that
no gain or loss of interest shall result from such exchange.
The 2.95% Bonds in coupon form may be exchanged for 2.95% Bonds in
fully registered form of a like aggregate principal amount, and upon
surrender at the principal office of the Trustee of any such Bond or Bonds
with all unpaid coupons appertaining thereto, the Company shall issue and
the Trustee shall certify and deliver in exchange therefor one or more
fully registered 2.95% Bonds in a like aggregate principal amount in the
name or names designated by the holder of the coupon Bond or Bonds so
surrendered.
2.10 If and to the extent that the Company by a Supplemental
Indenture shall so provide, either at the time of the creation of any
series of Bonds other than the 2.95% Bonds, or at any time thereafter
(a) Bonds of any series other than the 2.95% Bonds may, at the
option of the holders thereof and upon surrender thereof to the
Trustee, or otherwise as in said Supplemental Indenture provided, be
exchanged for Bonds of the same or of a different series and
maturity, of the same aggregate principal amount, but of different
authorized denomination or denominations;
(b) Coupon Bonds of any series other than the 2.95% Bonds may,
at the option of the holder thereof and upon the surrender thereof to
the Trustee or otherwise as in said Supplemental Indenture provided,
be exchanged for fully registered Bonds without coupons of the same
or of a different series and maturity, of the same aggregate
principal amount, and of the same or of a different authorized
denomination or denominations; and
(c) Fully registered Bonds without coupons of any series other
than the 2.95% Bonds may, at the option of the registered owners
thereof and upon the surrender thereof to the Trustee or otherwise as
in said Supplemental Indenture provided, be exchanged for coupon
Bonds of the same or of a different series and maturity, of the same
or of a different authorized denomination or denominations.
All Bonds and coupons so surrendered shall be considered as having
been surrendered for Cancellation, shall be forthwith Cancelled by the
Trustee.
2.11 For any exchange of Bonds, including the 2.95% Bonds, for Bonds
of another denomination or of coupon Bonds for fully registered Bonds, or
of fully registered Bonds for coupon Bonds, or for any transfer of a fully
registered Bond, the Company, at its option, may require the payment of a
sum sufficient to reimburse it for any stamp tax or other governmental
charge incident thereto, and, in addition thereto, a further sum not
exceeding two dollars ($2) for each new Bond, if any, issued upon such
exchange or transfer. No charge except for taxes or governmental charges
shall be made against the holder for the registration or transfer of coupon
Bonds.
2.12 The Bonds shall be treated as negotiable, subject to the pro-
visions for registration and transfer therein and in this Indenture con-
tained, and the coupon Bonds, except while registered as to principal
otherwise than to bearer, shall pass by delivery; registration of any
coupon Bond as to principal shall not affect the negotiability of its
coupons, which shall remain payable to bearer, be treated as negotiable,
and pass by delivery whether or not the Bond to which any coupon appertains
is registered. The Company, the Trustee and any paying agent may deem and
treat the bearer of any coupon Bond, or of any temporary Bond with or
without coupons, which shall not at the time be registered as to principal,
and the bearer of any coupon for interest appertaining to any Bond, whether
or not such Bond shall be registered, as the absolute owner of said Bond or
coupon, as the case may be, for the purpose of receiving payment thereof or
on account thereof and for all other purposes whatsoever, whether or not
such Bond or coupon shall be overdue, and neither the Company nor the
Trustee, nor any paying agent shall be affected by any notice to the
contrary.
As to all coupon Bonds registered as to principal and all fully reg-
istered Bonds, temporary or permanent, the person in whose name the same
shall be registered shall be deemed and treated as the absolute owner
thereof for all purposes of this Indenture, and payment of or on account of
the principal of such Bond if it be a coupon Bond registered as to
principal and of the principal and interest if it be a fully registered
Bond, shall be made only to or upon the order, in writing of such
registered owner thereof and all such payments so made to any such reg-
istered owner or upon his order shall be valid and effectual to satisfy and
discharge the liability of the Company upon such Bond to the extent of the
sum or sums so paid, and neither the Company nor the Trustee shall be
affected by any notice to the contrary.
2.13 In case any Bond, with the coupons, if any, belonging thereto,
or any coupon shall become mutilated or be lost, stolen, or destroyed, then
upon the surrender to the Trustee for exchange and Cancellation of such
mutilated Bond, together with all unmatured coupons appertaining thereto,
or of any such mutilated coupon, or upon the receipt of evidence
satisfactory to the Company and the Trustee of the loss, theft, or
destruction of such Bond and its coupons, if any, or of such coupon, and of
the ownership and authenticity thereof, and upon receipt also of indemnity
(naming as obligees both the Company and the Trustee) in a sum and with a
surety company thereon deemed satisfactory by the Company and the Trustee,
the Company, in its discretion, may execute and the Trustee shall certify
and deliver a new Bond of the same series, denomination, and maturity date,
in exchange for, and upon Cancellation of the mutilated Bond and its
coupons (if any), or, in lieu of the Bond and its coupons (if any) so lost,
stolen, or destroyed, or if a coupon or coupons only have been mutilated or
have been lost, stolen, or destroyed, the Company, in its discretion, may
execute and the Trustee shall certify and deliver in exchange for and upon
surrender and Cancellation of the Bond to which such coupon or coupons
appertain and of all coupons appertaining thereto not lost, stolen, or
destroyed, a new Bond of the same series, denomination, and maturity with
coupons appurtenant thereto of the same maturities as the coupons
surrendered and the coupons lost, stolen, or destroyed, or, if any such
mutilated, lost, stolen, or destroyed Bond or any of its coupons or such
mutilated, lost, stolen or destroyed coupon shall have matured or shall be
about to mature, instead of issuing a substitute Bond or of issuing a
substitute Bond with such matured coupons attached, the Company with the
consent of the Trustee may pay the same and in such event, to the extent
that it shall pay coupons appertaining to any Bond so mutilated or so
purportedly lost, stolen, or destroyed, the Trustee shall cut off and
Cancel the corresponding coupons on the substituted Bond before delivering
the same.
Any such Bonds and coupons issued pursuant to this Section in
substitution for Bonds or coupons purportedly lost, stolen, or destroyed
shall constitute original additional contractual obligations of the Company
whether or not the Bonds and coupons purportedly lost, stolen, or destroyed
be at any time enforceable by anyone and shall (subject to the provisions
of 2.14 and 4.02) be equally and ratably entitled to the benefits of this
Indenture with all other Bonds and coupons issued hereunder. The Company
and the Trustee, in their discretion, may place upon any such substituted
Bond a distinguishing mark or a legend, but such mark or legend shall in no
wise affect the validity of such substituted Bond. The Company may, at its
option, require the payment of a sum sufficient to reimburse it for any
stamp tax or other governmental charge and any expense incurred by the
Company or the Trustee in connection with the issue of any such substituted
Bond and also a further sum not exceeding two dollars ($2) for each such
substituted Bond.
All Bonds are held and owned upon the express condition that the
foregoing provisions are exclusive in respect of the replacement of muti-
lated, lost, stolen, or destroyed Bonds and shall preclude any and all
other rights and remedies, any law or statute now existing or hereafter
enacted to the contrary notwithstanding.
2.14 Bonds pledged by the Company, upon being released from pledge,
or Bonds purchased or otherwise acquired by the Company may be sold,
pledged, or otherwise disposed of before maturity by the Company prior to
the occurrence of an event of default hereunder without reexecution or
recertification, but the benefit of this Indenture shall be suspended in
respect of Bonds, coupons, or claims for interest while held by or for the
benefit of the Company. Subject to the provisions of 2.12 hereof, Bonds and
coupons and claims for interest transferred by or from the Company while in
default in the payment of principal or interest, or premium, if any, or any
Sinking Fund, Maintenance and Renewal, Improvement or other analogous fund
instalment hereunder, so long as such default shall continue, shall not be
deemed Outstanding under the Indenture in connection with (a) any com-
putation of percentages of Bonds outstanding hereunder for the purpose of
any action by Bondholders, or (b) any provision for the enforcement of any
rights or remedies hereunder or under the Bonds, or (c) any distribution of
proceeds or payment of the purchase price upon any sale hereunder, or upon
any other such enforcement, except after the prior payment in full of all
Bonds and coupons and claims for interest not so held or transferred,
provided, however, that for the purpose of determining whether the Trustee
shall be protected in relying on any direction or consent of Bondholders
only Bonds which the Trustee knows to be so held or to have been so
transferred shall be so deemed not to be Outstanding.
ARTICLE III.
Issue of Bonds
3.01 The aggregate principal amount of Bonds which may be issued by
the Company under this Indenture and may be Outstanding at any one time
shall not, in any event, exceed the amount at the time permitted by law,
but otherwise, except as in 3.02 and 3.03 provided, is unlimited; provided
however that the aggregate principal amount of Bonds, or the aggregate
principal amount of Bonds of any one series, which may be issued hereunder
may, at any time at the election of the Company as evidenced by a
Supplemental Indenture, be limited to such definite aggregate principal
amount as may be specified in such Supplemental Indenture.
3.02 First Mortgage Bonds, Series A, 2.95%, due October 1, 1973,
limited in aggregate principal amount to eleven million dollars
($11,000,000) and in denominations authorized hereunder may forthwith upon
the execution and delivery of this Indenture be executed by the Company and
delivered to the Trustee for certification, and thereupon may be certified
by the Trustee, and delivered to or upon the written order of the Treasurer
or an Assistant Treasurer of the Company without the necessity of awaiting
the filing or recording hereof.
3.03 Bonds, when authorized by a Supplemental Indenture, of one or
more series, other than the series constituting the 2.95% Bonds, (in this
Article III called Series B Bonds) may from time to time be executed by the
Company and shall be delivered to the Trustee for certification and
thereupon shall be certified by the Trustee and delivered to or upon the
written order of the Treasurer or an Assistant Treasurer of the Company to
an aggregate principal amount not exceeding twenty-one million dollars
($21,000,000), less the total of the aggregate principal amount of Series B
Bonds theretofore certified and delivered upon original issue. Series B
Bonds shall be certified and delivered by the Trustee only after the
Trustee has received the following:
(a) a Directors' Resolution determining the series of the said
Bonds and, if a new series, distinguishing the same by descriptive
title pursuant to 2.01, establishing in respect thereof the
applicable characteristics described in 2.02, authorizing the
execution of the Bonds and of the Supplemental Indenture securing
them, in form satisfactory to the Trustee, and the issue of said
Bonds, and also requesting the certification and the delivery of the
said Bonds by the Trustee all in the principal amount therein
specified, but not exceeding the maximum amount which may be issued
by the Company and certified and delivered by the Trustee under the
provisions of this Section;
(b) Unless in the Opinion of Counsel described in subparagraph
(g) of this Section it is stated that no vote or resolution of the
stockholders of the Company is required in order that the issue and
sale or other disposition of said Series B Bonds shall be legal, a
certified copy of a vote by the stockholder or by the stockholders
holding the requisite number of shares of the Company taken at a
meeting duly called and held, authorizing the said Directors'
Resolution and said request, and the execution, certification and
delivery of said Bonds, and the execution and delivery of said
Supplemental Indenture;
(c) said Supplemental Indenture duly executed by the Company and
by the Trustee, in as many counterparts as the Trustee shall require;
(d) an Earnings Certificate;
(e) an Officers' Certificate stating
(1) that to the best knowledge and belief of such officers
the Company is not in default in the performance and observance
of any of the terms, covenants, and conditions of this In-
denture;
(2) that all conditions precedent provided for herein (in-
cluding any covenants hereof compliance with which constitutes a
condition precedent) have been complied with; and
(3) the aggregate principal amount of Series B Bonds
theretofore certified and delivered upon original issue;
(f) Commission Orders to the extent required by law; and
(g) an Opinion of Counsel to the effect that all corporate
action prerequisite to or necessary for the authorization, execution,
issue, certification, sale or other disposition, and delivery of the
said Bonds, and the execution and delivery of the Supplemental
Indenture, has been duly and properly taken, or, if no action by
stockholders is necessary therefor, stating such fact; that the
Commission Orders furnished to the Trustee are proper and legal, and
order, consent to, permit and authorize to the full extent required
by law the issue, sale, or negotiation of the said Bonds (or that no,
or no other, Commission Orders are required by law); that all
conditions hereof precedent to the issue of such Bonds (including any
covenants hereof compliance with which constitutes a condition
precedent) have been complied with; that said Bonds when delivered by
the Company will be in all respect valid and enforceable obligations
of the Company in accordance with their terms and entitled to the
benefit and security of this Indenture; that the aggregate principal
amount of Series B Bonds (as previously limited in this Section) then
to be issued under this Section does not exceed the aggregate
principal amount then issuable under this Section; and that upon the
issue of said Bonds, the aggregate principal amount of Bonds issued
hereunder and then Outstanding will not exceed the amount permissible
hereunder and permissible by law; and that all recording and filing
in respect of said Supplemental Indenture necessary for the security
of any or all of said Bonds has been or will be completed.
3.04 Bonds, when authorized by a Supplemental Indenture, of one or
more series, other than the series constituting the 2.95% Bonds and in
addition thereto and to the Series B Bonds, may from time to time be
executed by the Company and shall be delivered to the Trustee for
certification and thereupon shall be certified and delivered by the Trustee
to or upon the written order of the Treasurer or an Assistant Treasurer of
the Company in an aggregate principal amount equal to the aggregate
principal amount of any Bonds which hare been paid, retired, redeemed,
Cancelled, surrendered to the Trustee or to the Company for Cancellation,
or for the payment or redemption of which moneys in the necessary amount
shall have been deposited with or shall then be held by the Trustee (with
irrevocable direction and authorization satisfactory to the Trustee so to
apply the same, and as regards Bonds to be redeemed, either with proof
satisfactory to the Trustee that notice of redemption has been duly given
or with irrevocable power of attorney to the Trustee to give such notice);
provided however that, unless all 2.95% Bonds and all Bonds of any other
series issued prior to the issue of the Bonds then to be issued under this
Section shall have ceased to be Outstanding hereunder, no Bonds shall be
issuable under the provisions of this Section in respect of Bonds which
have been or are contemporaneously to be paid, retired, redeemed,
Cancelled, or surrendered to the Trustee for Cancellation (a) by the use of
moneys received by the Trustee as or from the proceeds of any part of the
Mortgaged Property sold, taken by eminent domain, or otherwise disposed of,
or as the proceeds of any policies of insurance upon the Mortgaged
Property, or by the use of any other moneys held by the Trustee as
described in 8.02, (b) by the use of moneys deposited with the Trustee upon
the issue of Bonds pursuant to the provisions of 3.05, (c) in lieu of the
payment to the Trustee of moneys pursuant to the terms of any Sinking Fund,
Maintenance and Renewal Fund, Improvement Fund, or any analogous fund
established by a Supplemental Indenture then in force, or (d) by the use by
the Trustee of moneys paid to it pursuant to the terms of any such fund,
unless, in either case, the provisions establishing such fund shall
expressly permit the issue of Bonds under this Section in respect of Bonds
paid, retired, redeemed, Cancelled, or surrendered for Cancellation as a
part of the operation of such fund.
Bonds issuable under this Section shall be certified and delivered by
the Trustee only after the Trustee has received the following:
(a) a Directors' Resolution determining the series of the Bonds,
and, if a new series, distinguishing said series by descriptive title
pursuant to 2.01, and establishing in respect thereof the applicable
characteristics enumerated in 2.02, authorizing the execution of the
Bonds and of a Supplemental Indenture securing them, in form
satisfactory to the Trustee and the issue of the said Bonds, and also
requesting the certification and the delivery of the said Bonds by
the Trustee, in such aggregate principal amount as the Board of
Directors or the Executive Committee shall determine, but not
exceeding the maximum amount which may be issued by the Company and
certified and delivered by the Trustee under the provisions of this
Section;
(b) unless in the opinion of Counsel described in subparagraph
(g) of this Section it is stated that no vote or resolution of the
stockholders of the Company is required in order that the issue and
sale or other disposition of said Bonds shall be legal, a certified
copy of a vote by the stockholder or by the stockholders holding the
requisite number of shares of the Company taken at a meeting duly
called and held, authorizing the said Directors' Resolution and said
request and the execution, certification and delivery of said Bonds
and the execution and delivery of said Supplemental Indenture;
(c) said Supplemental Indenture duly executed by the Company and
by the Trustee, in as many counterparts as the Trustee shall require;
(d) an Officers' Certificate stating
(1) that to the best knowledge and belief of such officers
the Company is not in default in the performance and observance
of any of the terms, covenants, and conditions of this
Indenture;
(2) that all Bonds theretofore issued under this Indenture
have been paid, retired, redeemed, or Cancelled, or surrendered
to the Trustee for Cancellation, or concurrently with the cer-
tification and delivery of the requested Bonds will be surren-
dered to the Trustee for Cancellation, or that moneys in the
necessary amount for the payment or redemption of all Bonds not
so paid, retired, redeemed, or surrendered have been deposited
with, or shall then be held by the Trustee (with irrevocable
directions and authorization satisfactory to the Trustee to
apply the same to such payment or redemption, and as regards
Bonds to be redeemed, either with proof satisfactory to the
Trustee that notice of redemption has already been duly given or
with irrevocable power of attorney to the Trustee to give such
notice); or
that Bonds theretofore issued under this Indenture of a
specific aggregate principal amount (not less than the aggregate
principal amount of Bonds then to be issued under this Section)
have been or will be paid, retired, redeemed, or Cancelled, or
surrendered to the Trustee for Cancellation and that money in
the amount necessary therefor is then held by the Trustee or
will be deposited with it prior to or concurrently with the
certification and delivery of the Bonds so requested (with
irrevocable authorization satisfactory to the Trustee so to
apply the same to such payment or redemption, and as regards
Bonds to be redeemed, either with proof satisfactory to the
Trustee that notice of redemption has been duly given, or with
irrevocable power of attorney to the Trustee to give such
notice), and that no part of said Bonds theretofore issued has
been or will be paid, retired, redeemed, or Cancelled, or
surrendered to the Trustee for Cancellation, either by the use
of moneys received by the Trustee as or from the proceeds of any
part of the Mortgaged Property sold, taken by eminent domain, or
otherwise disposed of, or as the proceeds of any policies of
insurance upon the Mortgaged Property, or by the use of any
other moneys held by the Trustee as described in 8.02, or by the
use of moneys deposited with the Trustee upon the issue of Bonds
pursuant to the provisions of 3.05, or (unless one or more Sink-
ing, Maintenance and Renewal, Improvement, or analogous funds
created by Supplemental Indenture then in force permit the issue
of Bonds under this Section in respect of Bonds paid, retired,
redeemed, Cancelled or surrendered for Cancellation as a part of
the operation of any such fund) in lieu of the payment to the
Trustee of moneys pursuant to the terms of any such fund, or by
the use by the Trustee of moneys paid to it pursuant to the
terms of any such fund provided however that in the event that a
Sinking Fund, Maintenance and Renewal Fund, Improvement Fund or
other analogous fund created by a Supplemental Indenture then in
effect may in respect of such fund relax the foregoing pro-
visions, they may be modified to the extent necessary to comply
with the terms of such Supplemental Indenture;
(3) that all conditions precedent provided for herein
(including any covenants hereof compliance with which consti-
tutes a condition precedent) have been complied with;
(e) Commission Orders to the extent required by law;
(f) all Bonds previously issued, surrender of which is to be
made contemporaneously with the issue by the Company and the
certification and delivery by the Trustee of the Bonds to be issued
under this Section, together with all unmatured coupons thereto ap-
pertaining, and all cash necessary to pay the principal and interest
or the redemption price of all Bonds previously issued, the payment
or redemption of which, respectively, is made the basis for the issue
of the Bonds so requested;
(g) an Opinion of Counsel to the effect that all corporate
action prerequisite or necessary for the authorization, execution,
issue, certification, sale or other disposition, and delivery of the
said Bonds, and the execution and delivery of the Supplemental Inden-
ture, have been duly and properly taken, or, if no action by stock-
holders is necessary therefor, stating such fact; that the payment,
retirement, redemption, Cancellation, or surrender for Cancellation
of Bonds previously issued, as set forth in the Officers' Certificate
hereinbefore in this Section described, constitute a basis for the
issue of the aggregate principal amount of said Bonds then to be
issued under this Section; that the Commission Orders furnished to
the Trustee are proper and legal, and order, consent to, permit and
authorize to the full extent required by law the issue, sale, or
negotiation of the said Bonds (or that no, or no other, Commission
Orders are required by law); that all conditions hereof precedent to
the issue of such Bonds (including any covenants compliance with
which constitutes a condition precedent) have been complied with;
that said Bonds when delivered by the Company will be in all respects
valid and enforceable obligations of the Company in accordance with
their terms and entitled to the benefit and security of this
Indenture; that the aggregate principal amount of said Bonds then to
be issued under this Section does not exceed the aggregate principal
amount then issuable under this Section; that upon the issue of said
Bonds the aggregate principal amount of Bonds issued hereunder and
then Outstanding will not exceed the amount permissible hereunder and
permissible by law; and that all recording and filing in respect of
said Supplemental Indenture necessary for the security of any or all
of said Bonds has been or will be completed; and
(h) in the event that the total annual interest requirements of
the Bonds then to be issued under this section exceeds the total
annual interest requirements on the Bonds in respect of the payment,
retirement, redemption, Cancellation or surrender to the Trustee for
Cancellation of which said Bonds are then to be issued, an Earnings
Certificate.
All Bonds paid, retired, redeemed, or otherwise acquired which form
the basis for the issue of Bonds pursuant to this Section shall be
delivered to the Trustee for Cancellation and Cancelled by it.
3.05 Bonds, when authorized by a Supplemental Indenture, of one or
more series, other than the series constituting the 2.95% Bonds and in
addition thereto and to the Series B Bonds, may from time to time be
executed by the Company and delivered to the Trustee for certification and
thereupon shall be certified and delivered by the Trustee to or upon the
written order of the Treasurer or an Assistant Treasurer of the Company in
any aggregate principal amount permissible hereunder and permissible by law
which shall be equal to the amount of cash paid to the Trustee in exchange
therefor.
Bonds issuable under this Section shall be certified and delivered by
the Trustee only after the Trustee has received the following:
(a) a Directors' Resolution determining the series of the Bonds,
and, if a new series, distinguishing said series by descriptive
title, pursuant to 2.01, and establishing in respect thereof the
characteristics enumerated in 2.02, authorizing the execution of the
Bonds and of a Supplemental Indenture securing them, in form
satisfactory to the Trustee, and the issue of the said Bonds, and
also requesting the certification and delivery of the said Bonds in
such aggregate principal amount as the Board of Directors or the
Executive Committee shall determine, but not exceeding the maximum
amount which may be issued by the Company and certified and delivered
by the Trustee under the provisions of this Section;
(b) unless in the Opinion of Counsel described in subparagraph
(h) of this Section it is stated that no vote or resolution of the
stockholders of the Company is required in order that the issue and
sale or other disposition of said Bonds shall be legal, a certified
copy of a vote by the stockholder or by the stockholders holding the
requisite number of shares of the Company taken at a meeting duly
called and held, authorizing the said Directors' Resolution and said
request, and the execution, certification and delivery of said Bonds
and the execution and delivery of said Supplemental Indenture;
(c) said Supplemental Indenture duly executed by the Company and
by the Trustee, in as many counterparts as the Trustee shall require;
(d) an Officers' Certificate stating
(1) that to the best knowledge and belief of such officers the
Company is not in default in the performance and observance of any
of the terms, covenants, and conditions of the Indenture; and
(2) that all conditions precedent provided for herein
(including any covenants hereof compliance with which con-
stitutes a condition precedent) have been complied with;
(e) a sum of cash equal to the aggregate principal amount of the
Bonds the issue of which is requested pursuant to the terms of this
Section;
(f) Commission Orders to the extent required by law;
(g) an Earnings Certificate; and
(h) an Opinion of Counsel to the effect that all corporate
action prerequisite or necessary for the authorization, execution,
issue, certification, sale or other disposition, and delivery of the
said Bonds, and the execution and delivery of the Supplemental
Indenture, has been duly and properly taken, or, if no action by
stockholders is necessary therefor, stating such fact; that the Com-
mission Orders furnished to the Trustee are proper and legal, and
order, consent to, permit and authorize to the full extent required
by law the issue, sale, or negotiation of the said Bonds (or that no,
or no other, Commission Orders are required by law); that all
conditions hereof precedent to the issue of such Bonds (including any
covenants hereof compliance with which constitutes a condition
precedent) have been complied with; that said Bonds when delivered by
the Company will be in all respects valid and enforceable obligations
of the Company in accordance with their terms and entitled to the
benefit and security of this Indenture; that upon the issue of said
Bonds, the aggregate principal amount of Bonds issued hereunder and
then Outstanding will not exceed the amount permissible hereunder and
permissible by law; and that all recording and filing in respect of
said Supplemental Indenture necessary for the security of any or all
of said Bonds has been or will be completed.
3.06 All cash paid to the Trustee pursuant to the provisions of 3.05
shall, so long as held by it, be held as part of the Mortgaged Property but
whenever the Company shall become entitled to certification and delivery of
Bonds against Available Net Property Additions pursuant to the provisions
of 3.08, the Trustee, upon the application of the Company and upon compli-
ance by the Company with all requirements of said 3.08 (except as
hereinafter in this Section provided, and with such additions, omissions,
and variations as may be appropriate by reason of the fact that application
is being made for the withdrawal of cash and not for the certification and
delivery of Bonds) necessary to obtain certification and delivery of Bonds
under that Section, shall pay over, in lieu of the Bonds to which the
Company would be otherwise entitled to receive pursuant to that Section, an
amount of said cash equal to the aggregate principal amount of said Bonds,
or if the Trustee shall then hold less than such amount of cash, the
greatest amount which will leave in its hands less than one thousand
(1,000) dollars thereof. Any withdrawal of an amount of cash under this
Section shall be in lieu of the right of the Company to the certification
and delivery of Bonds under 3.08 in an equal aggregate principal amount,
but shall not otherwise affect the right to the certification and delivery
of Bonds to which it might otherwise be entitled under the provisions of
that Section.
The Company shall not be required to furnish in connection with the
withdrawal of the cash held by the Trustee pursuant to this Section, so
much of the Directors' Resolution, Officers' Certificate, or Opinion of
Counsel described in 3.08 as shall relate to the authorization,
certification, or issue of Bonds, or any certificate relating to action by
stockholders or any Commission Orders unless required by law, or an
Earnings Certificate.
3.07 Any sums deposited with the Trustee under the provisions of 3.05
in respect of which no application under the provisions of 3.06 shall have
been made within three (3) years of the date of the deposit thereof, or in
respect of which the Company shall at any time have notified the Trustee in
writing that it will make no application under that Section, may be applied
by the Company at any time to the discharge of the entire indebtedness on
all Bonds Outstanding hereunder pursuant to the provisions of 15.01(A) and
if not so applied shall be used and applied by the Trustee to the
redemption of Bonds of the series in respect of the issue of which it was
so deposited, pursuant to the provisions of the Supplemental Indenture
applicable thereto. Bonds so redeemed shall not thereafter be made the
basis for the issue of Bonds or the withdrawal of cash under any provisions
of the Indenture.
3.08 Bonds, when authorized by a Supplemental Indenture, of one or
more series, other than the series constituting the 2.95% Bonds and in
addition thereto and to the Series B Bonds, may from time to time be
executed by the Company and shall be delivered to the Trustee for
certification and thereupon shall be certified and delivered by the Trustee
to or upon the written order of the Treasurer or an Assistant Treasurer of
the Company in the aggregate principal amount requested by the Company, but
not in excess of sixty percentum (60%) of Available Net Property Additions
set forth in Item G of the Certificate of Available Net Property Additions
filed, as hereinafter in this Section provided, in connection with such
request for the issue of additional Bonds under this Section.
Bonds issuable under this Section shall be certified and delivered by
the Trustee only after the Trustee has received the following:
(a) a Directors' Resolution determining the series of the Bonds,
and, if a new series, distinguishing said series by descriptive title
pursuant to 2.01 and establishing in respect thereof the applicable
characteristics enumerated in 2.02, authorizing the execution of the
Bonds and the Supplemental Indenture securing them, in form
satisfactory to the Trustee, and the issue of said Bonds, which
Supplemental Indenture shall also convey, transfer and/or assign to
the Trustee all Fundable Property not previously so conveyed,
transferred and/or assigned, and also requesting the certification
and the delivery by the Trustee of the said Bonds, in such aggregate
principal amount as the Board of Directors or the Executive Committee
shall determine, but not exceeding the maximum amount which may be
issued by the Company and certified and delivered by the Trustee
under the provisions of this Section;
(b) unless in the Opinion of Counsel described in subparagraph
(j) of this Section it is stated that no vote or resolution of the
stockholders of the Company is required in order that the issue and
sale or other disposition of said Bonds shall be legal, a certified
copy of a vote by the stockholder or by the stockholders holding the
requisite number of shares of the Company taken at a meeting duly
called and held, authorizing the said Directors' Resolution and said
request, and the execution certification and delivery of said Bonds
and the execution and delivery of said Supplemental Indenture;
(c) said Supplemental Indenture duly executed by the Company and
by the Trustee, in as many counterparts as the Trustee shall require;
(d) an Officers' Certificate stating
(1) that to the best knowledge and belief of such officers
the Company is not in default in the performance and observance
of any of the terms, covenants, and conditions of the Indenture;
and
(2) that all conditions precedent provided herein (including
any covenants hereof compliance with which constitutes a
condition precedent) have been complied with; and
(3) the aggregate principal amount of all Bonds then
issuable under this Section;
(e) a Certificate of Available Net Property Additions;
(f) an Accountant's Certificate to the effect that the said
Certificate of Available Net Property Additions accurately states the
figures in prior Certificates which are reflected therein; stating
the Cost of all Property Additions referred to in Item B of the said
Certificate and that the Cost thereof has been compiled in said
Certificate in accordance with the definition of Cost contained
herein; that said Property Additions have not theretofore been Made
the Basis for Action or Credit hereunder; stating that the Property
Retirements referred to in Item D of said Certificate include all
Property Retirements required to be reflected on the books of the
Company pursuant to the provisions hereof and that all Property
Retirements so included are such within the definition thereof
contained herein, and that the Cost thereof has been compiled in said
Certificate in accordance with said definition of Cost; in the event
that any securities or other property have been included in the Cost
of any Property additions includable in said Accountant's Certifi-
cate, brief describing said securities or said other property and
stating the date of delivery or transfer thereof; in the event that
any of said Property Additions when required were subject to a prior
lien or were subjected thereto at the time of acquisition, stating
that such prior lien has been discharged, the principal amount of the
indebtedness secured thereby on the date of its acquisition by the
Company, the aggregate amounts (exclusive of premium or interest)
expended by the Company in discharge of said indebtedness or release
of said Property Additions from said lien, and the date or dates when
the indebtedness was paid and said lien released; in the event that
any of said Property Additions were acquired by the issue or
assumption by the Company of any unsecured indebtedness, the amount
thereof at the time of the signing of said Certificate; and in the
event that any of said Property Additions were acquired without the
payment of cash, property, or securities, or the issue, assumption,
or payment of indebtedness, describing in reasonable detail any such
Property Additions and the manner in and the time as of which the
Fair Value thereof was determined; and in the event that said
Property Additions include any electrical utility system or systems,
stating the extent to which Cost includes any part of the Cost of any
rights and intangible property and whether, in his opinion, any
included item is reasonable and proportionate, and, if not, the
extent of the inclusion which is either disproportionate or
unreasonable, and further stating that Cost does not include any
value based on going concern value or good will;
(g) an Engineer's Certificate describing in reasonable detail
all Property Additions referred to in Item B of the aforesaid Cer-
tificate of Available Net Property Additions and stating that all
said Property Additions are Fundable Property within the definition
thereof contained herein and are desirable for use in the proper
conduct of the business of the Company; stating the Fair Value of
said Property Additions and that the Fair Value thereof has been
determined in accordance with the definition of Fair Value contained
herein;
(h) Commission Orders to the extent required by law;
(i) an Earnings Certificate; and
(j) an Opinion of Counsel to the effect that all corporate
action prerequisite or necessary for the authorization, execution,
issue, sale or other disposition, and delivery of the Bonds, and the
execution and delivery of the Supplemental Indenture, has been duly
and properly taken, or, if no action by stockholders is necessary
therefor, stating such fact; that the Property Additions described in
Item B of the Certificate of Available Net Property Additions are
Fundable Property within the definition thereof contained herein;
that in case any such Property Additions shall be acquired or con-
structed in connection with any hydro-electric works, for the main-
tenance and operation of which the Company has not obtained a license
under the Federal Power Act, or other similar legislation, and no
proceedings shall then have been instituted by any governmental
authority having jurisdiction to require the Company either to apply
for such a license or to remove such hydro-electric works, it shall
be a sufficient compliance with the requirement of this subparagraph
(j) as to the Company's power and right to operate under the Federal
Power Act, or similar legislation, for such Opinion of Counsel to
state the circumstances as to such situation and that in his opinion
based thereon either there is no reasonable ground for believing that
such a license upon reasonable terms would not be issued, whenever
application therefor should be made, or there is no legal necessity
for obtaining such a license; that the Commission Orders furnished
to the Trustee are proper and legal, and order, consent to, permit
and authorize to the full extent required by law the issue, sale, or
negotiation of the said Bonds (or that no, or no other, Commission
Orders are required by law); that all conditions hereof precedent to
the issue of said Bonds (including any covenants hereof compliance
with which constitutes a condition precedent) have been complied
with; that said Bonds when delivered by the Company will be in all
respects valid and enforceable obligations of the Company in
accordance with their terms and entitled to the benefit and security
of this Indenture; that the aggregate principal amount of said Bonds
then to be issued under this Section does not exceed the aggregate
principal amount then issuable under this Section; and that upon the
issue of said Bonds the aggregate principal amount of Bonds issued
hereunder and then Outstanding will not exceed the amount permissible
hereunder and permissible by law; and that all recording and filing
in respect of said Supplemental Indenture necessary for the security
of any and all of said Bonds has been or will be completed.
If the Property Additions shall include any property which, within
six (6) months prior to the date of acquisition thereof by the Company, has
been used or operated by a person or persons other than the Company in a
business similar to that in which it has been or is to be used or operated
by the Company, and if the Fair Value to the Company of such property is
not less than twenty-five thousand dollars ($25,000) and not less than one
(1) percentum of the aggregate principal amount of the Bonds then
Outstanding hereunder, the Company shall also file an Independent
Engineer's Certificate stating the Fair Value to the Company of such
property and of any other such property so used or operated which, since
the commencement of the then calendar year, has been subjected to the Lien
of this Indenture as the basis for the certification and delivery of Bonds,
the withdrawal of cash constituting a part of the trust estate, or the
release of property subject to the Lien of this Indenture, and as to which
an Independent Engineer's Certificate has not previously been furnished.
3.09 Bonds issued pursuant to 3.03, 3.04, 3.05 or 3.08 may be issued
in whole or in part as a single separate series, or in several series, each
such series bearing such alphabetical designation as will distinguish it
from all other series issued hereunder, and Bond issued under 3.03 may be
issued in whole or in part with and as a part of and under the same
designation as that of any other series of Bonds, other than the 2.95%
Bonds, issued contemporaneously therewith or prior thereto.
ARTICLE IV.
Particular Covenants of the Company
The Company hereby covenants and agrees with the Trustee and with the
respective bearers and owners of the Bonds issued hereunder as follows:
4.01 That the Company will duly and punctually pay the principal of,
and interest on, and premium, if any, upon, all the Bonds at any time
issued hereunder, according to the terms thereof; that the interest on all
coupon Bonds shall until the maturity of such Bonds be payable only upon
presentation and surrender of the several coupons for such interest as they
respectively mature. The interest on fully registered Bonds shall be paid
to or upon the order of the registered owners thereof. Except as provided
in 2.13, the principal of each Bond shall be payable only upon the
presentation and surrender of the Bond. The Company prior to each date on
which the principal of and any premium or interest on any of the Bonds
shall become due and payable, whether at the date of maturity thereof, by
call for redemption, by declaration, or otherwise, will deposit or cause to
be deposited with the Trustee (with arrangements for transfers of such
deposits between the Trustee and any paying agent, if a paying agent shall
be hereafter appointed) the full amount necessary to make such payment.
When and as paid in full, all Bonds and all coupons shall be surrendered to
and Cancelled by the Trustee and thereafter delivered to the Company upon
its written request.
Except as otherwise provided in 15.02, moneys deposited with the
Trustee or with any paying agent appointed pursuant to the terms of any
Supplemental Indenture for the purpose of paying the principal of or
interest (or premium, if any) on any Bonds issued under this Indenture
shall constitute a trust fund for such purpose and for no other purpose
whatever, subject to the provisions of 13.09.
4.02 That so long as Bonds duly issued hereunder shall remain
Outstanding and unpaid, the Company will not directly or indirectly extend
or consent to the extension of the time for the payment of any coupon or
claim for interest of or upon any Bond, and will not, directly or
indirectly, become a party to any such extension or approve any arrangement
therefor, either by purchasing or refunding or in any manner keeping alive
any such interest coupon or claim for interest or otherwise; that in case
the payment of any such interest coupon or claim for interest shall be so
extended or kept alive by, or with or without, the consent of the Company,
or in case any such coupon or claim for interest shall in any way at or
after maturity have been transferred or pledged, separate or apart from the
Bond to which it relates, then, anything in this Indenture contained to the
contrary notwithstanding, any such interest coupon or claim for interest so
extended or kept alive or so transferred or pledged shall not be entitled,
in case of a default hereunder, to any benefit of or under this Indenture
except after the prior payment in full of the principal of the Bonds
Outstanding hereunder and of all coupons and claims for interest not so
transferred, pledged, kept alive, or extended.
4.03
(a) That whenever necessary to avoid or fill a vacancy in the
office of the Trustee, the Company will, in the manner provided in
13.18 hereof, appoint a Trustee so that there shall at all times be a
Trustee hereunder, which shall at all times be a bank or trust
company having its principal office and place of business in the City
of Boston, Massachusetts, if there be such bank or trust company
willing and able to accept the trust upon reasonable or customary
terms, and which shall at all times be a corporation organized and
doing business under the laws of the United States or any State or
Territory or of the District of Columbia with a combined capital and
surplus of at least five million (5,000,000) dollars and authorized
under such laws to exercise corporate trust powers and subject to
supervision or examination by Federal, State, Territorial, or
District of Columbia authority.
(b) That the Company will register, transfer, and/or exchange at
the principal office of the Trustee, (and at such other offices or
agencies of the Trustee or the Company as may be specified in the
Bonds and in any Supplemental Indenture securing them, or as may
hereafter be established or maintained in order to comply with any
requirements to that end contained in any regulations of any stock
exchange on which the Bonds issued hereunder may hereafter be listed
on application of the Company) any 2.95% Bonds (and any Bonds of any
other series issued hereunder and entitled by the provisions thereof
or hereof to registration, transfer, and/or exchange, at said office
or said offices) when presented for that purpose pursuant to the
provisions of said 2.95% Bonds (or said Bonds of any other series)
and of this Indenture; and that the Company will maintain any such
office or agency, at which any such Bonds may be presented for
registration, transfer, and/or exchange, and at which such Bonds and
the coupons or claims for interest appertaining thereto may be
presented for payment and at which notices or demands in respect of
said Bonds, coupons, or claims for interest may be served pursuant to
any provision therefor contained in any of said Bonds or in this
Indenture; and that the Company will file with the Trustee notice in
writing of the location, and of any change in location, of any such
office or agency; and that in case the Company having once
established any such office or agency shall fail to maintain the
same, or shall fail to give notice of the location or change of the
location thereof, then presentation and demand may be made and
notices may be served at the office of the Trustee.
(c) That if the Company shall appoint a paying agent other than
the Trustee, it will cause such paying agent to execute and deliver
to the Trustee an instrument in which it shall agree, subject to the
provisions of this Section, (1) that such paying agent shall hold in
trust for the benefit of the Bondholders entitled thereto, or the
Trustee, all sums held by such paying agent for the payment of the
principal of or interest on the Bonds (and premium, if any) and
(2) that such paying agent shall give the Trustee notice of any
default by the Company or any other Obligor on the Bonds in the
making of any deposit with it for the payment of the principal of or
interest (and premium, if any) on the Bonds, and of any default in
the making of such payment. While the Trustee shall be a paying
agent the Trustee shall hold in trust, as provided in 4.01, for the
benefit of the Bondholders entitled thereto all sums held by it as
such paying agent for the payment of the principal of or interest on
the Bonds.
(d) That if the Company shall act as its own paying agent, it
will, on or before each due date of each instalment of principal of
or interest on the Bonds set aside and segregate and hold in trust
for the benefit of the Bondholders entitled thereto or for the
Trustee a sum sufficient to pay such principal or interest so
becoming due on the Bonds (and premium, if any) and will notify the
Trustee of such action or of any failure to take such action.
(e) Anything in this Section to the contrary notwithstanding,
the Company may at any time, for the purpose of obtaining a release
or satisfaction of this Indenture or for any other reason, pay or
cause to be paid to the Trustee all sums held in trust by it or any
paying agent as required by this Section, such sums to be held by the
Trustee upon the trusts herein contained.
(f) Anything in this Section to the contrary notwithstanding,
the agreement to hold sums in trust as provided in this Section is
subject to the provisions of 15.02.
(g) That for the purpose of registering, transferring, and/or
exchanging Bonds the Company will maintain Old Colony Trust Company
or its successor as Trustee hereunder as Registrar of the Bonds
issued hereunder.
4.04 That the Company will duly pay and discharge, or cause to be
paid and discharged, as the same shall become due and payable all taxes,
water rates, assessments, and governmental and other charges lawfully
levied, imposed, or assessed upon the Mortgaged Property or any part
thereof or upon or measured by the franchises, business, or income of the
Company, and will duly observe, and conform to all valid requirements of
any governmental authority relative to any part of the Mortgaged Property,
and will not suffer any mechanics', laborers', statutory, or other lien to
be hereafter created upon any part thereof now owned or hereafter acquired,
or the income therefrom, prior to the Lien hereof, except Permitted
Encumbrances; provided however that the acquisition and ownership by the
Company of property hereafter acquired subject to mortgage or other lien,
whether existing at the time of acquisition or contemporaneously created to
secure a part of the purchase price thereof to the extent permitted by
4.10, or the refunding or extension thereof, shall not be deemed a viola-
tion of the foregoing covenant, but no such property shall be Made the
Basis for Action or Credit hereunder unless the mortgage or other lien to
which it shall have been subject has theretofore been or is
contemporaneously discharged; and provided further that nothing in this
Section contained shall require the Company to pay, acquire, or make
provision for any tax assessment, lien, or charge so long as the Company in
good faith and by appropriate legal proceedings shall contest the validity
thereof, unless thereby any of the Mortgaged Property will be lost or
forfeited.
That the Company will duly and punctually perform all the conditions
and obligations imposed on it by the terms of any lien upon its property
acquired after the date of execution of these presents, and will not permit
any default in any such obligation if thereby the protection afforded by
this Section be materially impaired or endangered.
4.05 That the Company will keep or cause to be kept all the Mortgaged
Property of a character usually insured by companies similarly situated
insured against loss or damage by fire and against such other risks as such
property is usually insured against and in such amounts as such property is
usually insured for by companies similarly situated, either by means of
policies issued by reputable insurance companies, or, at the Company's
election, with respect to all or any part of the property by means of an
adequate insurance fund set aside and maintained by it out of its own
earnings, or, in conjunction with other companies through an insurance
fund, trust, or other agreement (the adequacy of such insurance fund,
trust, or other agreement to be evidenced by a certificate, to be filed
with the Trustee, of an actuary or other person selected by the Board of
Directors or the Executive Committee of the Company and satisfactory to the
Trustee in the exercise of reasonable care), the loss if any, except to the
person or property of others, and except as to Excepted Property, and
except any loss less than twenty-five thousand (25,000) dollars, to be made
payable to the Trustee as the interest of the Trustee may appear and to be
paid to the Trustee and to be held by it and applied as hereinafter in
8.02, 8.03 and 8.04 hereof provided. As soon as practicable after the
execution of these presents, but not later than December 31, 1954, and
thereafter once in each year, and at any other time upon the written
request of the Trustee, the Company will furnish to the Trustee an
Officers' Certificate to the effect that the Company has complied with the
terms and conditions of this Section, and with the terms and conditions of
all insurance policies, and containing a detailed statement of the
insurance then in effect upon the property of the Company on a date therein
specified (which date shall be within thirty (30) days of the filing of
such Certificate), and, except in respect of property insured by means of
an insurance fund, trust, or other agreement as permitted by this Section,
showing the numbers of the policies of insurance in effect, the names of
the issuing companies, the amounts and expiration dates of such policies,
and the property covered by such policies; and in case any of the property
shall at the time be insured by means of an insurance fund, trust, or other
agreement, as permitted by this Section, the Company shall at the time of
furnishing each such Certificate also furnish to the Trustee a further
Officers' Certificate with respect to the adequacy of such insurance fund,
trust, or other agreement. The Trustee shall, subject to the provisions of
13.02 and 13.03, be entitled to accept any such Officers' Certificate or
further Officers' Certificate, if required, as satisfactory evidence of
compliance by the Company with the provisions of this Section, and shall,
subject to the provisions of 13.02 and 13.03, be under no duty with respect
to any such Certificate or further Certificate except to exhibit the same
to any Bondholder upon request.
If any part of the Mortgaged Property hereafter acquired shall be
subject to a prior lien, purchase money mortgage, or other encumbrance, the
Company may include in any policy of insurance the interest of the holder
of said prior lien, mortgage, or other encumbrance or may provide for his
interest in any such insurance fund, trust, or other agreement, but such
fact and the details of the rights of such holder in said policies or under
such insurance fund, trust, or other agreement shall be set forth in each
Officers' Certificate filed with the Trustee as in this Section heretofore
provided, and in the event that a check for the amount of any loss covered
by insurance on any property subject to such lien, mortgage or other
encumbrance shall be drawn by an insurer payable to the order, among
others, of the Trustee and the holder of such lien, mortgage, or encum-
brance, the Trustee shall endorse said check, without recourse, and deliver
the same, so endorsed, to such holder.
Upon request of the Trustee, the Company shall deliver to it any
policies of insurance upon the Mortgaged Property. If the proceeds of any
insurance on account of any one loss do not exceed the sum of twenty-five
thousand (25,000) dollars, such proceeds, if coming into the hands of the
Trustee, shall be paid by it forthwith to the Company and the Trustee shall
not be obligated to see to the application thereof. In case of any loss
covered by any policy of insurance, any adjustment thereof and settlement
which may be agreed upon by the Company and the insurer or insurers shall
be accepted by the Trustee.
4.06 That the Company, irrespective of any obligation undertaken in
Article VI hereof, will at all times maintain, preserve, and keep its
Mortgaged Property as an operating system or systems in good repair,
working order, and condition, and will from time to time make all needful
and proper repairs, replacements, and renewals thereto and thereof.
Nothing in this Section contained shall be held to prevent the Company from
permanently discontinuing the operation of or reducing the capacity of any
of its plants or properties or any part thereof if, in the judgment of the
Board of Directors or the Executive Committee of the Company, any such
action is necessary or desirable in the conduct of the business of the
Company, or, if the Company is ordered so to do by regulatory authority
having jurisdiction over the Company, or, if the Company intends to sell or
dispose of the same, and within a reasonable time shall endeavor to
effectuate such sale; nor shall anything in this Section contained be
construed to prevent the Company from taking such action with respect to
the use of its plants, works, and properties as is proper under the circum-
stances, including the cessation of or omission to exercise rights,
permits, licenses, privileges, or franchises which, in the judgment of the
Company, can no longer be properly exercised or availed of.
4.07 That the Company will, except only as interrupted by causes
beyond its control or except upon compliance with the provisions of
Article XIV, continually conduct and carry on its usual business in an
efficient and proper manner.
4.08 That the Company is duly organized and existing under the laws
of the Commonwealth of Massachusetts and is duly authorized by law to
create and issue the Bonds from time to time issued hereunder and to
execute the Indenture, and that all corporate action on its part for the
creation and issue of the 2.95% Bonds, as herein provided, and for the
execution and delivery of this Indenture has been taken; and that, subject
to the provisions of Article XIV, it will at all times do or cause to be
done all things necessary to maintain its corporate existence and to
preserve and keep in full force and effect all its rights, permits,
licenses, privileges, and franchises, except such as can, in the judgment
of the Company, no longer be properly exercised or availed of.
4.09 That, except as to after-acquired property, the Company is
lawfully seized and possessed of the Mortgaged Property, that it has good
and marketable title thereto; that it has good right and lawful authority
to mortgage the same, as provided in and by this Indenture, free from all
liens and encumbrances except those specified, described or referred to in
the description contained in the granting clauses hereof and in Schedule A;
that it will forever warrant and defend the title to the Mortgaged
Property, including all property at any time intended to be included
therein under the provisions of Clause 4 of the granting clauses of this
Indenture, and every part thereof, to the Trustee, its successors and
assigns, against all claims and demands whatsoever, except such liens and
encumbrances as are specified described or referred to in the granting
clauses hereof or in Schedule A or are otherwise permitted under any of the
provisions hereof; provided that nothing in this Indenture contained shall
prevent the Company from hereafter acquiring any property subject to a
prior lien or purchase money mortgage or other encumbrance of the character
described in 4.10.
That the Company will cause this Indenture and all Supplemental
Indentures to be at all times properly recorded and filed and rerecorded
and refiled in such manner and in such places as may be required by law and
will do such other acts as may be necessary in order fully to preserve and
protect the security of the Bondholders and the rights of the Trustee and
to establish and maintain the superior lien hereof upon the Mortgaged
Property, subject however to the provisos and exceptions in this Section
before set forth and to the provisions of 4.10 and of Article XIV.
That the Company will, upon reasonable request by the Trustee,
execute and deliver such Supplemental Indentures and other instruments and
do such further acts as may be necessary or proper to carry out more
effectually the purposes of this Indenture, especially to subject to the
Lien hereof any property now owned or hereafter acquired by it which it is
herein provided shall be subject to the Lien hereof, and to transfer to any
new trustee the estates, powers, instruments, and funds held in trust
hereunder.
That the Company will furnish to the Trustee:
(a) Promptly after the execution and delivery of this Indenture
and of each Supplemental Indenture or other instrument granting or
confirming to the Trustee title to any of the Mortgaged Property an
Opinion of Counsel either stating that in the opinion of such counsel
this Indenture or such Supplemental Indenture or other instrument has
been properly recorded and filed so as to make effective the Lien
intended to be created thereby, and reciting the details of such
action, or stating that in the opinion of such counsel no such action
is necessary to make such Lien effective. It shall be a compliance
with this sub-section (a) if (i) such Opinion of Counsel shall state
that this Indenture or such Supplemental Indenture or other
instrument has been received for record or filing in each
jurisdiction in which it is required to be recorded or filed, and
that, in the opinion of such counsel, (if such is the case) such
receipt for record or filing makes effective the Lien intended to be
created by this Indenture or such Supplemental Indenture or other
instrument, and (ii) such Opinion of Counsel is delivered to the
Trustee within such time, following the date of the execution and
delivery of this Indenture, or such Supplemental Indenture or other
instrument, as shall be practicable, having due regard to the number
and distance of the jurisdictions in which this Indenture or such
Supplemental Indenture or other instrument is required to be recorded
or filed;
(b) At least annually after the execution and delivery of this
Indenture, an Opinion of Counsel either stating that in the opinion
of such counsel such action has been taken with respect to the re-
cording, filing, re-recording, and refiling of this Indenture and of
each Supplemental Indenture or other instrument granting or con-
firming to the Trustee title to any of the Mortgaged Property as is
necessary to maintain the Lien thereof, and reciting the details of
such action, or stating that in the opinion of such counsel no such
action is necessary to maintain such Lien. Such opinion shall be
delivered to the Trustee within three (3) months after each
anniversary of the execution and delivery of this Indenture.
4.10 That the Company will not create or suffer any other mortgage,
charge, encumbrance, or lien, of any kind, superior to or on a parity with
the Lien of this Indenture upon any of the Mortgaged Property whether now
owned or hereafter acquired, excepting only those specified, described, or
referred to in the description contained in the granting clauses hereof and
in Schedule A, and, in respect of Mortgaged Property hereafter acquired,
excepting also mortgages or other encumbrances or liens on any part or
portion thereof (including renewals and extensions thereof) whether
existing at the time of the acquisition of such part or portion (and
whether or not the obligations secured thereby are assumed in connection
with such acquisition) or created contemporaneously to secure or to raise a
part of the purchase price thereof, provided however that the total of all
obligations secured by any such mortgage, encumbrance, or lien upon such
part or portion shall not exceed sixty (60) per centum of the Cost thereof
or of the Fair Value thereof, whichever is less, and provided further that
an Earnings Certificate dated not more than sixty (60) days prior to the
acquisition of such part or portion shall be delivered to the Trustee
contemporaneously with said acquisition.
4.11 That the Company will keep proper books of account and records
to which the Trustee or its duly authorized representatives may have access
at all reasonable times; will not charge to its property plant, and
equipment accounts any expenditures which are properly chargeable to
maintenance or repairs or to any other expense account in accordance with
any system of accounting required by law, or by any regulatory or other
public authorities having jurisdiction, to be followed by the Company, or,
in the absence of such requirement, in accordance with sound accounting
practice then current; will promptly charge to the depreciation reserve,
the reserve for contributions to extensions, and/or the surplus account of
the Company all property which has become worn out or become permanently
unserviceable, or has been lost, sold, destroyed, abandoned, surrendered on
lapse of title, or retired from service for any reason, or has permanently
ceased to be used or useful in the business of the Company, except that
property which has been abandoned consequent upon an act of God or other
unavoidable casualty may be retired over a period in accordance with orders
or decrees of any regulatory authority having jurisdiction over the
Company; and will furnish to the Trustee, as soon as practicable after the
close of each fiscal year and in any event not later than one hundred and
twenty (120) days thereafter, an income statement, analysis of surplus and
balance sheet of the Company, for such year, all in such detail as the
Trustee shall require, which shall be certified by an Independent
Accountant, who shall be a certified or public Accountant, and will give to
the Trustee full information pertinent to any provision thereof.
4.12 That the Company in each fiscal year will make entries on its
books charging to current earnings and crediting to depreciation reserve an
amount not less than two and one-tenth percentum (2.1%) of the average of
the beginning and ending balances for such year of the total plant and
equipment (devoted to utility operation) account of the Company, exclusive
of land, flowage rights, rights of way, water rights, and other like
undepreciable real estate and rights in real estate, and of unfinished
construction.
4.13 That the Company will not, except in accordance with the
provisions of Article XIV hereof, sell, convey, transfer, or lease the
Mortgaged Property as a whole or substantially as a whole and no other
person shall, by consolidation, merger, grant lease, or otherwise, be
vested with the title thereto as a whole or substantially as a whole,
except upon compliance with the conditions prescribed in said Article XIV
and the Company will not dispose of any part of the Mortgaged Property not
in the hands of the Trustee except in accordance with the provisions of
Article VII hereof; provided however that nothing contained in this Section
shall prevent the Company from selling, exchanging, or disposing of the
Mortgaged Property in conformity with the provisions of said Article VII or
from demolishing, abandoning dismantling, discontinuing, or retiring parts
of the Mortgaged Property if such action shall seem to the Company to be in
its best interests.
4.14 That so long as any of the 2.95% Bonds shall be Outstanding, the
Company will not on or after August 1, 1954, declare or pay a dividend upon
its capital stock (other than a dividend payable in shares of its capital
stock) or make any other distribution on any shares of its capital stock,
or purchase any shares of its capital stock in an amount or amounts
exceeding the Dividend Fund hereinafter described, as constituted at the
time of the declaration or payment of such dividend or distribution or at
the time of such purchase.
The Dividend Fund shall be computed by adding to
(a) the sum of $2,639,760.58
(b) the net earnings of the Company, determined as hereinafter
defined, for the period, considered as a unit, from January 1, 1954,
to the close of that quarter which last precedes the date of the
declaration of any such proposed dividend or distribution, or date of
such purchase;
and by subtracting from the total thereof
(c) the aggregate amounts theretofore paid out or declared or
agreed to be paid out during said period in respect of such
dividends, distributions, or purchases.
For the purposes of this Section, the net earnings of the Company for
any such period shall be computed on an accrual basis in accordance with
sound accounting practice then current by deducting from the total revenues
for such period the total operating expenses and other proper charges to
income for such period, including (without in any respect limiting the
generality of the foregoing) all taxes, interest on all outstanding
indebtedness, amortization of debt discount and expense, amortization of
all other deferred charges properly subject to amortization, all charges on
the Company's books to expense or income to provide for depreciation and
all charges for maintenance, but excluding any provision for the
Improvement Fund or any Sinking or similar funds for the retirement of debt
and any profits and losses from the sale or other disposition of capital
assets made in said period; provided however that
(1) the charge to earnings and credit to depreciation reserve
for said period shall comply with the provisions of 4.12 hereof,
except that for any period less than a year the charge for such
period shall be apportioned, at a rate which shall not be less than
the annual rate required by 4.12 hereof, on the balance of the depre-
ciable property as described in said Section owned by the Company at
the beginning of said year; and
(2) net earnings shall be adjusted by debits, or credits thereto
which are offset by adjustments of the hydro-equalization reserve of
the Company and, except for said adjustments, net earnings shall not
reflect as revenues or as a deduction from revenues any adjustment
made during such period (whether made through surplus or income
accounts) properly attributable to operations prior to January 1,
1954.
In the event that the Company shall merge or consolidate with any
other corporation or corporations pursuant to Article XIV, the Dividend
Fund shall not be increased or diminished by the surplus or deficit of such
other corporation or corporations or by its or their earnings, dividends,
distributions, or purchases prior to the date of such merger.
4.15 That the Company will not issue or permit to be issued any Bonds
hereunder in any manner other than in accordance with the provisions of
this Indenture, and will not suffer or permit any default to occur under
this Indenture, but will faithfully observe and perform all the conditions,
covenants, and requirements of this Indenture and of the Bonds issued
hereunder; and that on or before July 1, 1955, and on or before July 1 in
each calendar year thereafter, or on or before such other day in each
calendar year as the Company and the Trustee may from time to time agree
upon it will deliver to the Trustee an Officers' Certificate in respect of
compliance or non-compliance by the Company with the covenants contained in
sections 4.01, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13,
4.14, 4.15, 4.17, 6.01 and 8.03 (a), (b), (c) and (d).
4.16 That if the Company shall fail to perform any of the covenant
contained in sections 4.04, 4.05, and 4.06, the Trustee, or any receiver or
trustee appointed hereunder pursuant to the laws of the United States
relating to bankruptcy, may (but subject to 13.02 and 13.03 hereof shall
not be required to) make advances to perform the same in behalf of the
Company; and the Company hereby agrees to repay all sums so advanced on
demand, with interest at the rate of four (4) percentum per annum after
demand, and all sums so advanced, with interest as aforesaid, shall be
secured hereby in priority to the indebtedness evidenced by said Bonds and
coupons; but no such advance shall be deemed to relieve the Company from
any default hereunder.
4.17 That in every Certificate of Available Net Property Additions
filed with the Trustee for any purpose under this Indenture, all Property
Additions, and all Property Retirements, the Cost or Fair Value of which is
included in any such Certificate will comply with the definition herein of
Property Additions and Property Retirements, respectively; that the Cost
and Fair Value of all such Property Additions and the Cost of all such
Property Retirements will be compiled in accordance with the definitions
herein of Cost and Fair Value respectively; that no property which is not
Fundable Property will be included in Item A or Item B of any such
Certificate; and that no Property Additions which have once been Made the
Basis for Action or Credit hereunder will thereafter be Made the Basis for
Action or Credit hereunder, provided however that property at any time
subject to the Lien hereof consisting solely of materials or supplies
usable as components in the construction of electric utility or steam
plant, and which has once been Made the Basis for Action or Credit
hereunder may again be Made the Basis for subsequent Action or Credit
hereunder when restored to service if it shall in the meantime have been
retired from service and the Cost thereof (less any credit for salvage
value actually received) shall then have been charged to the depreciation
reserve, the reserve for contributions to extensions, or to the surplus
account of the Company and such charge shall have been reflected in Item D
of any Certificate of Available Net Property Additions filed with the
Trustee pursuant to the provisions of 3.06, 3.08, 6.02(b) or 8.03(b).
ARTICLE V.
Redemption of Bonds
5.01 Subject to the provisions of 5.06, all or any part of any series
of the Bonds Outstanding hereunder or any part of the principal amount of
any such fully registered Bond constituting one thousand dollars ($1,000)
or a multiple thereof may, at the election of the Company to be exercised
by resolution of its Board of Directors or of its Executive Committee, be
called for redemption and prepayment at any time, or from time to time,
upon not less than thirty (30) days' prior Notice, at a redemption price in
respect of each Bond or part thereof so called for redemption set forth in
said Bond and in respect of the Bonds of any series other than the 2.95%
Bonds in the Supplemental Indenture securing such Bonds. In respect of the
2.95% Bonds the redemption price shall consist of the principal amount
thereof or if less than the principal amount of a fully registered Bond
shall be called then the principal amount so called, together with interest
accrued thereon to the date filed for redemption, and (unless redeemed in
the twelve months' period ending September 30, 1973) with a premium equal
to the percentage of said principal amount hereinafter set forth:
If redeemed on or at any time prior to September 30, 1956, 2-1/2%
If redeemed thereafter and on or at any time prior to September 30, 1960,
2%
If redeemed thereafter and on or at any time prior to September 30, 1964,
1-1/2% If redeemed thereafter and on or at any time prior to September 30,
1968, 1%
If redeemed thereafter and on or at any time prior to September 30, 1972,
1/2%
5.02 Unless otherwise specifically provided in a Supplemental
Indenture relating to a subsequent series of Bonds issued hereunder, the
prior notice of the call for redemption of any Bonds issued hereunder shall
consist of a Published Notice published not less than once a week in each
of three successive weeks, the first publication to be at least thirty (30)
days before the date set for redemption, and by mailing, at least thirty
(30) days prior to the date set for redemption, by registered mail, postage
prepaid, to the registered owners of all fully registered Bonds and to the
registered owners of all coupon Bonds registered as to principal which have
been called for redemption, a copy of said notice, provided however that if
at any time not more than forty-five (45) and not less than thirty (30)
days prior to the date set for redemption the entire issue of 2.95% Bonds
then Outstanding shall be in fully registered form, notice by publication
as aforesaid may be dispensed with. Unless all the said 2.95% Bonds then
Outstanding shall be in fully registered form, failure by the Company to
give such notice by mail, as aforesaid, shall not invalidate or affect the
validity of the redemption proceedings. The notice aforesaid shall state
the redemption price, the date set for redemption, the place of payment
(which shall be the principal office of the Trustee and shall include any
paying agent if the Company shall appoint one or more paying agents
pursuant to the provisions of 4.03), and, in case of the redemption of a
part only of any series of Bonds including said 2.95% Bonds, the numbers of
the particular Bonds so called for redemption and payment, and if less than
the whole principal amount of any fully registered Bond shall be so
redeemed, the number of each fully registered Bond so called only in part,
and the portion of the principal amount thereof so called, and in such last
event stating also that, upon presentation of each such fully registered
Bond for redemption, there will be issued in lieu of the unredeemed portion
of the principal amount thereof one or more Bonds of the series so-called
for redemption in coupon or in fully registered form, for an aggregate
principal amount equal to such unredeemed portion. Said notice shall also
state that if the redemption price of all Bonds, or parts thereof, called
for redemption shall be duly provided by the Company, from and after the
redemption date interest shall cease to accrue thereon, coupons, if any,
appertaining thereto thereafter maturing shall be void, and the bearers or
registered owners thereof shall look for payment thereof solely to the
money so provided by the Company. If the Company shall have provided for
immediate prepayment pursuant to the provisions of 5.05, the notice shall
also state the full terms of such right of prepayment. In case of the
redemption of less than all the Bonds of any series, including the 2.95%
Bonds, the Company shall, at least fifteen (15) days prior to the date upon
which the notice is first required to be given, notify the Trustee in
writing of the aggregate principal amount of said Bonds to be redeemed and
furnish to it an Officers' Certificate pursuant to the provisions of 5.06,
and thereupon the Trustee shall draw by lot, in such manner as it shall
deem proper, the Bonds (or the portion of a fully registered Bond) to be so
redeemed and shall, within seven (7) days after receiving such notice from
the Company, notify the Company in writing of the numbers so drawn (and in
the case of the partial redemption of a fully registered Bond the amount to
be redeemed), and the Company shall insert such numbers and such amounts,
if any, in the notice, provided however that in respect of a partial
redemption of the 2.95% Bonds such determination of the particular Bond or
Bonds to be redeemed may be made in accordance with the provisions of any
agreement, satisfactory to the Trustee, to which the registered holders of
all the 2.95% Bonds then Outstanding are parties.
5.03 Any election of the Company to redeem the Bonds of any series,
including the 2.95% Bonds, may be rescinded by the Company at any time
prior to the first publication of the said notice or the mailing thereof to
the holders of Bonds, either fully registered or registered as to principal
only.
5.04 At least three (3) days prior to the date set for redemption and
payment of any Bonds, the Company shall deposit with the Trustee, in coin
or currency of the United States of America which at the time of such
deposit shall be legal tender for the payment of public and private debts,
a sum of money which, together with so much of any moneys then held by the
Trustee as a part of the Mortgaged Property under 8.02 as may be available
hereunder for such redemption and as the Company may desire to apply to the
redemption of said Bonds, shall be sufficient to redeem all the Bonds so
called for payment at the redemption price thereof. If the Company shall
deposit and/or apply such sum of money, and if notice as provided in 5.02
or in any Supplemental Indenture shall have been duly given, then on and
after the date set for redemption Bonds so called shall be paid by the
Trustee (or in the event that the Company shall have appointed one or more
paying agents pursuant to the provisions of 4.03 by any such paying agent,
and the Trustee shall make necessary arrangements for transfer of funds so
that each paying agent shall be enabled to make payment) upon presentation
and surrender of such Bonds with all unmatured coupons, if any,
appertaining thereto attached, and if any such Bonds be in fully registered
form or be registered as to principal, accompanied by instruments of
assignment in form satisfactory to the Trustee (or to any paying agent
making the payment) duly executed by the registered owner or by his duly
authorized attorney and in the event that less than the entire principal
amount of any fully registered Bond shall be called for redemption, the
Company shall issue and the Trustee shall certify and deliver one or more
Bonds of the same series in coupon or in fully registered form for an
aggregate principal amount equal to the uncalled and unpaid remainder of
the principal amount of each such fully registered Bond so presented and
surrendered for partial redemption; provided however that at the request of
the Company the Trustee may prepay Bonds so called for redemption on such
terms as the Company may determine by resolution of its Board of Directors
or Executive Committee. All Bonds redeemed and paid as aforesaid shall be
forthwith Cancelled by the Trustee.
The money so deposited with the Trustee and so much of the moneys
held by the Trustee as a part of the Mortgaged Property under 8.02 as shall
be applied by the Company to the payment of the redemption price of Bonds
called for redemption shall be held by the Trustee, subject to the
provisions of 13.09, from and after the date when notice by publication
shall first have been given, or if the Trustee shall have been given
irrevocable power of attorney to give such notice by publication pursuant
to the provisions of 5.05, then from the moment of the delivery of said
power of attorney to the Trustee, in trust for the exclusive benefit of the
bearers and registered owners of the Bonds so called or to be called for
redemption.
5.05 Upon deposit of the redemption price of the 2.95% Bonds as
aforesaid or of the redemption price of Bonds of any other series made
pursuant hereto and if notice as provided in 5.02 or in any Supplemental
Indenture shall have been duly given, said Bonds shall no longer be
entitled to the benefit and security of this Indenture, and from and after
the date set for redemption all Bonds, or parts thereof, so called for
redemption shall cease to bear interest, the coupons, if any, appertaining
thereto thereafter maturing shall be void, the Company shall be under no
further liability in respect of the principal of, or premium, if any, or
interest on, said Bonds, or the called parts thereof, and the bearers or
registered owners thereof shall look for payment of their Bonds, or the
called parts thereof, solely to the money on deposit with the Trustee,
provided however that if there shall have been deposited with the Trustee
all sums necessary to redeem and pay all Bonds Outstanding irrespective of
series, or all Bonds Outstanding of any one or more series but not of all
series Outstanding, in either case at the full redemption price or prices
current at a future date for redemption and payment therefor set by
resolution of the Board of Directors or the Executive Committee of the
Company, and if all other sums due or to become due to the Trustee shall
have been paid or duly provided for to its satisfaction, and if the Trustee
shall have been duly and legally given irrevocable power or powers of
attorney in form satisfactory to the Trustee to call all said Bonds
Outstanding, or all said Bonds Outstanding of any one or more series, as
the case may be, in full conformity with any and all provisions hereof
relating to call and redemption, and if said resolution shall provide that
the bearers and registered owners of the Bonds to be redeemed may receive
payment of the redemption price, including accrued interest to the
redemption date, from and after the moment when all said sums have been
deposited and said power or powers of attorney have been delivered to the
Trustee, then from said moment the Company shall be under no further
liability in respect of said Bonds or the Bonds of said series as the case
may be, said Bonds or the Bonds of said series, as the case may be, shall
no longer be entitled to the security and benefit of this Indenture, and
the bearers or registered owners thereof shall look for payment of their
Bonds solely to the money so on deposit with the Trustee and in no event to
the Company, but said Bonds or the Bonds of said series shall still bear
interest to the date set for redemption, and only coupons, if any, apper-
taining thereto maturing after said redemption date shall be void.
5.06 The Company covenants with the Trustee and with the respective
bearers and registered owners of the Bonds issued and to be issued
hereunder that it will not call for redemption less than all the Bonds
Outstanding hereunder if it shall then be in default in the payment of the
principal of or interest on any Bonds Outstanding hereunder, or in the
performance of the covenants contained in 6.01, or in covenants of like
character or imposing a Sinking Fund obligation or the obligation of a
Maintenance and Renewal Fund or Improvement Fund or any analogous fund
established pursuant to a Supplemental Indenture for the benefit of Bonds
issued hereunder of a series other than the 2.95% Bonds. An Officers'
Certificate to the effect that no one of such defaults then exists shall be
filed with the Trustee as provided in 5.02.
5.07 The Company may, in connection with the authorization and issue
of any series of Bonds hereunder other than the 2.95% Bonds, provide for
the redemption and prepayment of the Bonds of any such series at such
premiums, on such notice, and on such other terms and conditions as the
Company may, subject to the terms hereof, determine, subject to the
provisions of 5.06 and 5.06 and to the approval of the Trustee in respect
of any and all provisions relating to moneys in its hands.
ARTICLE VI.
Improvement Fund
6.01 The Company covenants that so long as any 2.95% Bonds are
Outstanding hereunder it will on the first day of November, 1954, and on
the first day of November in each calendar year thereafter pay to the
Trustee the sum of one hundred and ten thousand dollars ($110,000), as an
Improvement Fund to be held and applied by the Trustee pursuant to the
terms of 6.03; provided however, that the Company may, at its option,
irrevocably allocate, upon filing the application and other documents
described in 6.02, Net Property Additions towards the satisfaction of the
obligation aforesaid in an amount equal to sixty percentum (60%) of the
Available Net Property Additions as set forth in Item G of the Certificate
of Available Net Property Additions filed in connection with said
application.
6.02 For the purpose of determining the amount of money, if any, to
be paid to the Trustee pursuant to the provisions of 6.01, the Company
shall file with the Trustee on or before each said first day of November
the following:
(a) an application consisting of an Officers' Certificate
conforming to the requirements of 17.02 substantially in the
following form:
WESTERN MASSACHUSETTS ELECTRIC COMPANY
To Old Colony Trust Company, Trustee
under Indenture dated as of August 1, 1954.
Improvement Fund Application
filed November , 19
In conformity with the provisions of Article VI of the above de-
scribed Indenture providing for an annual Improvement Fund in the amount of
$110,000 for the benefit of the holders or registered owners of the First
Mortgage Bonds, Series A, 2.95%, due October 1, 1973, of the aforesaid
Company issued under the aforesaid Indenture, we hereby certify that the
sum of $110,000 is due at this time from the Company to you as Trustee as
aforesaid on account of said Improvement Fund obligation now due and
payable.
(If irrevocable allocation of Net Property Additions is in full
satisfaction of the Improvement Fund obligation then current, the
following should be used)
Application is hereby made irrevocably to allocate in the amount of
$183,333.34 the Available Net Property Additions set forth in Item G of the
accompanying Certificate of Available Net Property Additions in full
satisfaction of said obligation.
(If in partial satisfaction, the following should be used)
Application is hereby made irrevocably to allocate Net Property
Additions shown in the accompanying Certificate of Available Net Property
Additions, in partial satisfaction of said obligation, by application of an
amount equal to sixty percentum (60%) of the Available Net Property
Additions set forth in Item G of said Certificate, the balance of $
being transmitted herewith in cash in full satisfaction of said obligation.
(If there is no allocation of Net Property Additions the follow-
ing should be used)
The sum of $110,000 is transmitted herewith in cash in full satis-
faction of said obligation.
__________________________________
Office held
__________________________________
Office held
(b) if irrevocable allocation of any Net Property Additions be
made
(1) a Directors Resolution authorizing the execution of a
Supplemental Indenture in form satisfactory to the Trustee
conveying, transferring and/or assigning to the Trustee all
Fundable Property not previously so conveyed, transferred and/or
assigned;
(2) said Supplemental Indenture duly executed by the Com-
pany, and if necessary by the Trustee, in as many counterparts
as the Trustee shall require;
(3) a Certificate of Available Net Property Additions;
(4) an Accountant's Certificate similar, except for
necessary variations, to the Accountant's Certificate described
in subparagraph (f) of 3.08;
(5) an Engineer's Certificate similar, except for necessary
variations, to the Engineer's Certificate described in
subparagraph (g) of 3.08;
(6) an Opinion of Counsel to the effect that the amount of
the Improvement Fund obligation then due is correctly stated in
said application, and that the documents described in this
Section and/or the sum of money paid to the Trustee pursuant to
this Section fully satisfy the liability of the Company upon the
Improvement Fund obligation then due and if any Fundable
Property be conveyed, assigned, and/or transferred to the
Trustee, that all corporate action prerequisite or necessary for
the execution and delivery of the Supplemental Indenture has
been taken; that the Property Additions described in Item B of
said Certificate are Fundable Property within the definition
thereof contained herein; and that all recording and filing in
respect of said Supplemental Indenture necessary for the
security of any and all Bonds has been or will be completed.
The Company shall also pay to the Trustee with the documents
aforesaid the sum of money, if any, set forth in the said
application.
6.03 If at the close of the first day of November, 1954, and of the
first day of November in any calendar year thereafter, there shall be in
the hands of the Trustee any cash paid to the Trustee pursuant to the
provisions of 6.02, in the aggregate amount of five thousand dollars
($5,000) or more, said cash shall be set aside by the Trustee for the call
and redemption of 2.95% Bonds then Outstanding and the Trustee, on behalf
of and in the name of the Company and at the Company's expense, shall call
for redemption on or prior to the next succeeding thirty-first day of
December, at a redemption price in respect of each Bond so called for
redemption consisting of the principal amount thereof and interest accrued
thereon to the date fixed for redemption, 2.95% Bonds to a principal amount
sufficient (exclusive of accrued interest) to exhaust as nearly as may be
the cash so set aside. Notice to bearers or registered owners of the 2.95%
Bonds called for redemption under this Section shall be given in the manner
provided in 5.02 hereof and such 2.95% Bonds shall be presented for
payment, and paid, in the manner provided in 5.04 hereof; the particular
2.95% Bonds to be redeemed shall unless they shall include all the 2.95%
Bonds then Outstanding, be chosen by lot as provided in 5.02; provided
however that the determination of the particular 2.95% Bond or Bonds to be
redeemed may be made in accordance with the provisions of any agreement,
satisfactory to the Trustee, to which the registered holders of all the
2.95% Bonds then Outstanding are parties; and the provisions of 5.05 hereof
shall be applicable to the redemption of such 2.95% Bonds and all matters
related thereto.
The Company shall reimburse the Trustee, forthwith upon its request,
for all sums paid or to be paid out as interest upon 2.95% Bonds redeemed
pursuant to the provisions of this Section.
6.04 The Company may, in connection with the authorization and issue
of any series of Bonds hereunder other than the 2.95% Bonds, establish for
the benefit of such other series of Bonds any Sinking Fund, Maintenance and
Renewal Fund, Improvement Fund, or analogous fund, with such terms and
conditions in respect of the amount, character, and description thereof as
the Company may, subject to the terms hereof, determine, subject however to
the approval of the Trustee in respect of any and all provisions relating
to money in its hands.
ARTICLE VII.
Possession, Use, and Release of Mortgaged Property
7.01 Unless and until one or more of the events of default specified
in 9.01 shall have occurred and the Trustee shall have taken action
authorized in such case by Article IX hereof, and after any such event of
default so occurring shall have been cured or waived pursuant to the
provisions of said Article IX, then, until the re-occurrence of an event of
default and the taking of said action by the Trustee consequent thereon the
Company shall be suffered and permitted to possess, use, and enjoy the
Mortgaged Property (other than any money, choses in action, or other
personal property deposited with or required to be deposited with the
Trustee under any provision hereof) and to operate its plants and
transmission and distribution systems with the franchises, rights, and
privileges appertaining thereto, and to receive and use the rents,
revenues, issues, earnings, income, products, and profits thereof, in-
cluding interest or dividends on or other income from purchase money or
other obligations, stocks, or other securities held by the Trustee, with
power in the ordinary course of business freely and without let or
hindrance on the part of the Trustee or of the Bondholders to alter,
repair, add to, and change the location of any of its plants, buildings,
works, structures, transmission and distribution systems, or any part or
portion thereof, and the appliances appertaining to or used in connection
therewith, and to replace or renew any of its equipment, machinery, or
other property, whether any of the same shall now be constructed or owned
or shall be hereafter constructed or acquired by the Company.
7.02 Unless and until one or more of the events of default specified
in 9.01 shall have occurred and the Trustee shall have taken action
authorized in such case by Article IX hereof, and after any such event of
default so occurring shall have been cured or waived pursuant to the
provisions of said Article IX, then, until the re-occurrence of any event
of default and the taking of said action by the Trustee consequent thereon,
the Company may at any time and from time to time without any release,
consent, or other action by the Trustee
(a) in the ordinary course of business demolish, dismantle, tear
down, or abandon any part of the Mortgaged Property which has become
old, worn out, unserviceable, undesirable, or unnecessary for use in
the conduct of the Company's business;
(b) sell, exchange, or otherwise dispose of, free from the lien
of this Indenture, any poles, fractional interests in poles,
machinery, equipment, apparatus, tools, or other tangible property,
subject to the Lien of this Indenture, which shall have become old,
worn out, unserviceable, undesirable, or unnecessary for use in the
conduct of the Company's business, provided that the Company shall
within a reasonable time thereafter replace the same with, or sub-
stitute for the same, new poles, fractional interests in poles,
machinery, equipment, apparatus, tools, or other tangible property,
not necessarily of the same character, or located in the same place
or physical position, but of a value at least equal to that of the
property so sold, exchanged, or disposed of, which shall, without
further action by the Company or the Trustee, be and become subject
to the Lien hereof;
(c) cancel, surrender, terminate, release, abandon, or make
changes, amendments, or alterations in, or substitutions for, any and
all contracts, leases, easements or rights of way, grants, locations,
permits, licenses, franchises, consents, agreements concerning
fractional interests in any poles in which the Company has or shall
have such interest, or similar rights; provided that such action is
necessary, desirable, or advisable in the conduct of the business of
the Company;
(d) grant or convey easements or rights of way or of passage
over, on, or in respect of any part of the Mortgaged Property, in-
cluding the right to grant fractional interests in any poles of the
Company and the right to the joint use with the Company of such
interests by the grantee, provided that such grant or conveyance will
not materially impair the usefulness of such part or any other part
of the Mortgaged Property in the conduct of the business of the
Company;
(e) lease any of the Mortgaged Property which shall be, in the
opinion of the Company as evidenced by a Directors' Resolution,
neither essential nor desirable for the operation of any of the
Mortgaged Property, and such lease may provide that it shall remain
in force and effect even after the happening of an event of default
hereunder, and if it so provides and also provides against any
anticipation of rental payments, it shall have such force and effect;
(f) cut and sell, and license others to, and remove standing
timber of any sort upon any land forming part of the Mortgaged
Property.
(g) make and enter into such indentures and agreements as the
Company shall consider necessary, desirable, or advisable in the
conduct of its business, in modification or extinguishment of
existing indentures and agreements with other parties under which
such other parties now have the right to draw and use water from the
canal of the Company at Turners Falls in the Town of Montague;
In the event that as a result of action taken by the Company under
subsection (b) of this Section any Fundable Property shall be acquired by
the Company, it shall be subject to the Lien of this Indenture and if the
Trustee shall so request in writing, shall be forthwith conveyed,
transferred, or assigned to the Trustee in the manner substantially similar
except for necessary variations to that provided in sub-paragraphs (1), (2)
and (6) of 6.02(b).
7.03 Unless and until one or more of the events of default specified
in 9.01 shall have occurred and the Trustee shall have taken action
authorized in such case by Article IX hereof, and after any such event of
default so occurring shall have been cured or waived pursuant to the
provisions of said Article IX, then, until the re-occurrence of an event of
default and the taking of said action by the Trustee consequent thereon,
the Company shall have the right at any time and from time to time to sell
or exchange any part of the Mortgaged Property. The consideration received
for such part of the Mortgaged Property so sold or exchanged may be (i)
cash and/or (ii) an obligation or obligations secured by a closed purchase
money mortgage on such property provided that such obligation or
obligations shall not exceed sixty (60) per centum of the Cost or Fair
Value, whichever is less, of the property so sold or exchanged (established
as in subsection (c) of this Section provided) and provided further that
the total principal amount payable on all such obligations when added to
the aggregate principal amount then payable on all other obligations
secured by purchase money mortgages held by the Trustee shall not exceed
twenty (20) per centum of the aggregate principal amount of Bonds issued
hereunder and then Outstanding and/or (iii) Fundable Property. The Trustee
shall release any such part of the Mortgaged Property so sold or exchanged
only on receipt of
(a) a Directors' Resolution requesting such release, identifying
the property to be released and describing the consideration to be
received therefor;
(b) an Officers' Certificate dated not more than ten (10) days
prior to the delivery to the Trustee of the Directors' Resolution
stating
(1) that to the best of the knowledge and belief of such
officers the Company is not in default in the performance and
observance of any of the terms, covenants, and conditions of the
Indenture;
(2) that all conditions precedent provided herein (includ-
ing any covenants compliance with which constitutes a condition
precedent) have been complied with;
(3) that the sale or exchange of such property is desirable
in the conduct of the business of the Company;
(4) that the Company has sold or exchanged, or contracted
to sell or exchange, the property so to be released, the con-
sideration to be received therefor, and, if such consideration
shall be in part an obligation or obligations secured by a
purchase money mortgage or purchase money mortgages or in whole
or in part Fundable Property, describing such consideration in
detail;
(5) if such consideration shall be in part an obligation or
obligations secured by a purchase money mortgage or purchase
money mortgages the aggregate principal amount then payable on
all other obligations then secured by purchase money mortgages
held by the Trustee and the aggregate principal amount of Bonds
issued hereunder and then Outstanding;
(c) an Engineer's Certificate (accompanied with such Independent
Engineer's Certificate as may be required pursuant to 7.06 hereof in
respect of property to be sold or exchanged and/or to the last
paragraph of 3.08 hereof in respect of any Fundable Property to be
received under this Section) dated not earlier than sixty (60) days
prior to the date of delivery of such Officers' Certificate stating
the Fair Value of the property to be sold or exchanged, that the
release of such property from the Lien hereof will not impair the
security under this Indenture in contravention of the provisions
hereof; in case the property to be sold or exchanged shall be subject
to a prior lien at the time of sale or exchange, stating the actual
value of the obligation or obligations secured by such prior lien; in
case the consideration to be received shall consist of an obligation
or obligations secured by a purchase money mortgage or purchase money
mortgages, stating that the actual value of the said obligation or
obligations does not exceed sixty per centum (60%) of the Cost or
Fair Value, whichever is less, of the property so sold or exchanged
and that the total of such actual value plus the other considerations
received for such property so sold or exchanged is at least equal to
the Fair Value thereof; and in case the consideration to be received
shall consist in whole or in part of Fundable Property, stating that
such Fundable Property complies with the definition of Fundable
Property contained herein, that the Fair Value to the Company of such
Fundable Property plus the other consideration, if any, received is
at least equal to the Fair Value of the property so sold or exchanged
and stating the Fair Value to the Company of any Fundable Property
forming said consideration or a part thereof;
(d) a sum of money which shall be equal to the Fair Value of the
property so sold or exchanged after deducting therefrom the actual
value of any prior lien existing thereon at the time of sale or
exchange, the actual value of every obligation secured by a purchase
money mortgage or mortgages received as part consideration therefor
and/or the Fair Value to the Company of any Fundable Property
received as part consideration therefor, in all cases as set forth in
the foregoing Engineer's Certificate, and also all necessary out of
pocket expenses incurred in connection with said sale or exchange;
(e) an assignment or transfer to the Trustee, in form satis-
factory to it, of every obligation secured by any purchase money
mortgage or mortgages which shall form part of the consideration for
the sale of any such property so sold or exchanged, and a like
assignment of any such mortgage; provided however that the Company
may at its option retain any such obligation so secured, and said
mortgage or mortgages and substitute therefor cash in an amount equal
to the full principal amount thereof;
(f) if Fundable Property be received as consideration or as part
consideration for any of said property so sold or exchanged, a
Supplemental Indenture conveying, transferring, or assigning such
Fundable Property to the Trustee as a part of the Mortgaged Property,
accompanied by a Directors' Resolution authorizing the execution and
delivery thereof to the Trustee;
(g) an instrument of partial release of the property so sold or
exchanged, or agreed to be so sold or exchanged, for execution by the
Trustee, in form satisfactory to it,
(h) an Opinion of Counsel to the effect that the Certificates,
instruments, or other documents and cash which have been or are
therewith delivered to the Trustee conform to and comply with the
requirements of the Indenture and constitute sufficient authority
hereunder to the Trustee to execute the instrument of partial
release, and that the said instrument, itself, is in proper form and
will adequately release the property so sold or exchanged by the
Company; in the event that an obligation or obligations secured by
any purchase money mortgage or mortgages shall form part of the
consideration for the property so released, that the total principal
amount payable thereon when added to the aggregate principal amount
then payable on all other obligations secured by purchase money
mortgages then held by the Trustee does not exceed twenty (20) per
centum of the aggregate principal amount of Bonds issued thereunder
and then Outstanding, that the said obligation or obligations and the
assignment or transfer thereof are valid, and are properly and
legally secured by such mortgage or mortgages, that the assignment or
transfer thereof to the Trustee is valid and that such mortgage or
mortgages constitute a direct lien on the property so sold or
exchanged, subject to no lien prior thereto except such as shall have
existed thereon as liens prior to the Lien hereof immediately before
the release of the said property, describing any such liens, if any,
and the effect thereof upon the said obligation or obligations
assigned to the Trustee, and stating that all recording and filing in
respect of said mortgage or mortgages and the assignment or transfer
thereof necessary for the security of any or all of said Bonds has
been or will be completed; and, in case the Trustee is requested to
release any such rights as are described in Clause 3 of the granting
clauses of these presents, that such release will not impair the
right of the Company to operate any remaining portion of the
Mortgaged Property; and, in case Fundable Property shall be received
as consideration for the exchange of said property, stating that the
property so received complies with the definition of Fundable
Property herein, that all corporate action prerequisite or necessary
for the execution and delivery of the Supplemental Indenture
granting, transferring, or assigning to the Trustee said property so
received has been duly and properly taken, that the said Supplemental
Indenture is adequate and complete to grant, transfer, or assign said
property to the Trustee as part of the Mortgaged Property, that all
conditions precedent to the release by the Trustee of the property so
sold or exchanged, or agreed so to be, have been complied with, and
that all recording and filing in respect of said Supplemental
Indenture necessary for the security of any or all of said Bonds has
been or will be completed.
7.04 Unless and until one or more of the events of default specified
in 9.01 shall have occurred and the Trustee shall have taken action
authorized in such case by Article IX hereof, and after any such event of
default so occurring shall have been cured or waived pursuant to the
provisions of said Article IX, then, until the re-occurrence of an event of
default and the taking of said action by the Trustee consequent thereon,
the Company shall have the right at any time and from time to time to sell
and dispose of for cash real estate forming part of the Mortgaged Property
of a Fair Value not in excess in the aggregate of one hundred thousand
(100,000) dollars in any one calendar year, the sale of which is desirable
in the conduct of the business of the Company. The Trustee shall release
any such part of the Mortgaged Property so sold only on receipt of
(a) an Officers' Certificate requesting the release of any real
estate comprised in the Mortgaged Property, describing the same in
reasonable detail, stating the Fair Value thereof and of each other
parcel of real estate forming part of the Mortgaged Property
previously released pursuant to the provisions of this Section during
the then current calendar year, the total thereof, and that such
total does not exceed one hundred thousand (100,000) dollars;
(b) an Engineer's Certificate, (accompanied with such Inde-
pendent Engineer's Certificate as may be required pursuant to 7.06
hereof) dated not earlier than sixty (60) days prior to the date of
delivery of such Officers' Certificate, stating the Fair Value of the
property requested to be released in said Officers' Certificate, and
that the sale thereof is desirable in the conduct of the business of
the Company and will not impair the security under this Indenture in
contravention of the provisions hereof;
(c) an instrument of partial release of the property so sold or
agreed to be so sold for execution by the Trustee, in form satis-
factory to it;
(d) a sum of cash equal to the Fair Value of the said property;
(e) an Opinion of Counsel that the Certificates, instruments,
and cash which have been or are therewith delivered to the Trustee
conform to and comply with the requirements of this Indenture and
constitute sufficient authority hereunder to the Trustee to execute
the instrument of partial release, and that said instrument is in
proper form and will adequately release the property so sold by the
Company.
7.05 Should any of the Mortgaged Property be taken by exercise of the
power of eminent domain, or should any governmental or public body, agency,
authority, or instrumentality exercise at any time any right, power, or
authority which it may have to purchase or to designate a purchaser for any
part of the Mortgaged Property, or should the Board of Directors of the
Company determine upon a sale or conveyance in lieu of or in reasonable
anticipation of any such taking or exercise, the Trustee shall release the
property so taken or sold upon being furnished with
(a) an Officers' Certificate describing in reasonable detail the
property so taken or sold and stating the amount and character of the
compensation therefor or proceeds therefrom and the method or manner
by or in which the property has been taken or sold and that such
taking or sale has been in conformity with the provisions of this
Section and, if a sale, was for the best interests of the Company
under the circumstances;
(b) an instrument of partial release of the property so taken or
sold for execution by the Trustee, in form satisfactory to it;
(c) a sum of money equal to the amount of the compensation paid
for the property if taken, or, the proceeds of the sale thereof if
sold, to the extent that the compensation paid for the property, if
taken, or, the proceeds of the sale thereof, if sold, shall consist
of cash, together with any amount paid to the Company in connection
with the taking or sale as severance damages to other Mortgaged
Property not so taken, after deducting the net adjustments incurred
in connection with said taking or said sale, which shall be
established to be such to the satisfaction of the Trustee; provided
however that unless a Directors' Resolution shall otherwise provide,
the amount to be deposited with the Trustee shall not exceed the
redemption price then current for redemption at the option of the
Company of all Bonds then Outstanding hereunder;
(d) to the extent that the compensation received for the prop-
erty, if taken, shall consist of rights of way or of other rights in
land, a Supplemental Indenture in form satisfactory to the Trustee
conveying, transferring, and/or assigning to the Trustee the rights
of way or the rights in land so conveyed, transferred, and/or
assigned to the Company;
(e) an Engineer's Certificate (accompanied with such Independent
Engineer's Certificate as may be required pursuant to 7.06 hereof),
dated not earlier than sixty (60) days prior to the date of the
delivery of such Officer's Certificate, stating the Fair Value of the
property taken or sold, and if rights of way or other rights in land
be conveyed, transferred, and/or assigned to the Trustee by a
Supplemental Indenture as a part of the compensation for the property
taken, if it be taken, briefly describing the same and stating also
the Fair Value of such rights of way or other rights in land and that
the Fair Value thereof has been determined pursuant to the definition
herein of Fair Value;
(f) an Opinion of Counsel to the effect that the property has
been taken in pursuance of and in accordance with the power of
eminent domain or similar right or power or sold to, or to a pur-
chaser designated by, a governmental or public body, agency,
authority, or instrumentality having the right to exercise such power
or similar right, in lieu of or in reasonable anticipation of the
exercise by it of such power or right; that all corporate action
requisite or necessary for the execution of the Supplemental In-
denture has been properly taken; that the Certificates, instruments
of partial release, amounts or proceeds, and/or the Supplemental
Indenture, if any, which have been or are therewith delivered to the
Trustee, conform to and/or comply with the requirements of the
Indenture and constitute sufficient authority hereunder to the
Trustee to execute the instrument of partial release; that the said
instrument, itself, is in proper form and will adequately release the
property so taken or sold; and that all recording and filing in
respect of said Supplemental Indenture necessary for the security of
any and all of said Bonds has been or will be completed.
7.06 If the Fair Value of any property to be sold or exchanged
pursuant to the provisions of 7.03, 7.04 and 7.05 hereof and of all other
property released from the Lien of this Indenture since the commencement of
the then current calendar year, as set forth in the Certificates required
pursuant to this Article VII, is ten percentum (10%) or more of the
aggregate principal amount of the Bonds then Outstanding hereunder, unless
the Fair Value of the property to be released, as set forth in the
Engineer's Certificate required to be filed with the Trustee in accordance
with the provisions of this Article VII, is less than twenty-five thousand
dollars ($25,000) or less than one percentum (1%) of the aggregate
principal amount of Bonds at the time Outstanding, the Engineer's
Certificate shall be accompanied by an Independent Engineer's Certificate
dated not earlier than sixty (60) days prior to the date of delivery of
such Certificate, stating (i) the Fair Value, in the opinion of the signer,
of the property to be released and (ii) that in the opinion of the signer
such release will not impair the security under this Indenture in
contravention of the provisions hereof.
7.07 Any purchase money obligation received by the Trustee pursuant
to the provisions of 7.03 may be released to the Company upon payment by
the Company to the Trustee of the actual value thereof less any payments on
the principal thereof received by the Trustee. All sums of money received
by the Trustee in respect of the principal of any such obligation shall be
held and disposed of by the Trustee as provided in 7.08, and any sum of
money received by the Trustee in respect of the interest thereon shall,
unless an event of default as specified in 9.01 shall have occurred and
shall be continuing, be paid forthwith to the Company. The Trustee may
take any action which in its judgment may be desirable or necessary for the
collection of any such obligation or for the enforcement of the security
therefor.
7.08 Any sums of money received by the Trustee pursuant to the terms
of 7.03, 7.04, 7.05, or 7.07 shall be held, paid out, or applied by it
pursuant to the provisions of Article VIII hereof.
7.09 In case the Company proposes to sell or has sold any Excepted
Property or any property which the Company is entitled to sell or dispose
of pursuant to the provisions of 7.02 and the purchaser thereof shall
request the Company to furnish an instrument in the form of a partial
release by the Trustee releasing any claim to or interest in such property
which the Trustee might have hereunder, then the Trustee shall execute such
instrument upon receipt of
(a) an Officers' Certificate requesting such release, describing
such property, and stating that such property is either Excepted
Property or property which the Company is entitled to sell or dispose
of pursuant to the provisions of 7.02, and that the purchaser thereof
has requested such partial release by the Trustee;
(b) such instrument of partial release for execution by the
Trustee, in form satisfactory to it; and
(c) an Opinion of Counsel to the effect that such property is
Excepted Property or property which the Company is entitled to sell
or dispose of pursuant to the provisions of 7.02, that said property
may be properly sold or disposed of by the Company in conformity with
the terms hereof, and that all conditions precedent provided herein
(including any covenants compliance with which constitutes a
condition precedent) have been complied with; and that the instrument
of partial release is in all respects proper for the purposes of this
Section, and in form proper for execution by the Trustee.
7.10 No purchaser in good faith of any property purporting to be
released hereunder shall be bound to ascertain the authority of the Trustee
to execute the instrument of partial release thereof or to inquire as to
the existence of any conditions required by the provisions hereof for the
exercise of such authority; nor shall any purchaser or grantee of any
property or rights permitted by this Article VII to be sold, exchanged, or
otherwise disposed of by the Company be under any obligation to ascertain
or inquire into the authority of the Company to make any such sale,
exchange, or other disposition or to look to the application of the
purchase money.
7.11 The provisions of 7.02, 7.03, and 7.04 shall not be construed as
being in limitation of one another but as separate and distinct methods of
releasing, selling, or otherwise disposing of Mortgaged Property.
7.12 The Trustee, subject to the provisions of 13.02 and 13.03, may
in its absolute discretion (but shall not be bound to) execute any
instrument of partial release pursuant to the provisions of 7.02, 7.03,
7.04, 7.05 and 7.09 notwithstanding the fact that an event of default as
specified in 9.01 shall have occurred and shall be continuing.
7.13 In case a receiver or a trustee of the Company or of all or a
substantial part of the Mortgaged Property or business of the Company shall
be lawfully appointed, all acts or requests which the Company may do or
make under the foregoing provisions of this Article VII or under the
provisions of Article VIII hereof may be done or made by such receiver or
trustee with the consent of the Trustee, which may, subject to the
provisions of 13.02 and 13.03, give or withhold such consent as it may in
its discretion determine. In case the Trustee shall be in possession of
the Mortgaged Property pursuant to any of the provisions hereof, the
Trustee may, subject as aforesaid, without any action or request by the
Company, or any receiver or trustee, take any action authorized by any
provision of this Indenture to be taken by the Company alone, by the
Company and the Trustee, or by the Trustee, or by the Trustee at the
request of the Company.
ARTICLE VIII.
Disposition of Money in the Hands of the Trustee
8.01 Moneys deposited with the Trustee in exchange for Bonds issued
pursuant to 3.05 shall be held and disposed of as provided in 3.06 and
3.07; moneys deposited with the Trustee for payment of principal of or
interest on Bonds issued hereunder shall be held and disposed of as
provided in 4.01; moneys deposited with the Trustee for the redemption of
Bonds issued hereunder, moneys deposited with the Trustee in fulfillment of
the Company's obligation in respect of the Improvement Fund pursuant to
6.01, and moneys held by the Trustee as a part of the Mortgaged Property
under 8.02 and applied by the Company to the redemption of Bonds shall be
held and disposed of as provided in 5.04; and moneys deposited with the
Trustee in fulfillment of any Sinking Fund, Maintenance and Renewal Fund,
Improvement Fund or analogous obligation established pursuant to the terms
of a Supplemental Indenture shall be held and disposed of as provided in
said Supplemental Indenture.
8.02 Insurance moneys paid to the Trustee on account of policies made
payable to the Trustee pursuant to 4.05, all moneys received from the sale
of any part of the Mortgaged Property pursuant to 7.03, and 7.04, any
moneys received by the Trustee as compensation for property taken by
exercise of the power of eminent domain pursuant to 7.05, and any moneys
received by the Trustee either from the Company, or in payment of the
principal of any purchase money obligation held by the Trustee, pursuant to
7.07 and any other moneys received by the Trustee, other than moneys the
disposition of which is elsewhere herein specifically provided for, shall
be held by the Trustee as part of the Mortgaged Property and all or any
part of said money at the request and election of the Company may be
withdrawn from, and/or shall be applied by, the Trustee from time to time
as provided in 8.03, 8.04 and 8.05, provided, however, that in the event of
a taking by the exercise of the power of eminent domain or of a sale as
permitted by 7.05, in either case of all or substantially all of the
Mortgaged Property, any award paid for the property taken or the proceeds
of said sale and any amount paid in connection therewith as severance
damages, shall, whether or not interest on any Bonds then Outstanding
hereunder shall be due and unpaid and whether or not any of the events of
default specified in 9.01 shall have occurred, be applied by the Trustee to
the retirement of Bonds issued hereunder and then Outstanding pursuant to
the provisions of 8.05, and if the money received by the Trustee as such
award or such proceeds and as such severance damages, if any, together with
other moneys then in the hands of the Trustee and available for the purpose
is not sufficient to effect the retirement of all the Bonds then
Outstanding, it shall be applied to the retirement of Bonds as aforesaid
only upon the deposit by the Company with the Trustee (and the Company
covenants to make such deposit) of an amount sufficient, together with such
moneys, so to effect the retirement of all Bonds then Outstanding.
8.03 Subject to the provisions of 8.02, and, unless and until one or
more of the events of default specified in 9.01 shall have occurred and the
Trustee shall have taken action authorized in such case by Article IX
hereof, and after any such event of default so occurring shall have been
cured or waived pursuant to the provisions of said Article IX then, until
the re-occurrence of an event of default and the taking of said action
consequent thereon, the Trustee shall apply any or all of the moneys
described in 8.02 then in its possession as follows:
(a) Upon receipt by the Trustee of a Directors' Resolution to
the effect that the Company has called for redemption in accordance
with 5.01 or with any Supplemental Indenture executed in pursuance of
the provisions of 5.07 all or any part of the Bonds of any series
Outstanding, and stating the principal amount of Bonds so called for
redemption, the amount of money necessary to redeem said principal
amount of Bonds at the redemption price thereof, the amount of money
deposited or to be deposited to pay the interest accrued to the date
of redemption on all Bonds called for redemption and the additional
money, if any, necessary for such redemption and requesting that the
Trustee apply from the moneys of the character described in 8.02 then
in its hands a sum which together with such amount so deposited or to
be so deposited shall be sufficient to redeem at such total
redemption price the Bonds so called for redemption, (but in no event
in excess of such moneys then in its hands) the Trustee shall, from
and after the deposit of such amount, apply the sum so requested to
such redemption pursuant to the provisions of 5.04, or to the
provisions of said Supplemental Indenture, as the case may be, and
the sum so applied shall thereafter be held and disposed of by the
Trustee as an integral part of the amount so deposited as provided in
said Section or in said Supplemental Indenture as the case may be
provided however that the Trustee may not make such application if the
Company shall then be in default in the payment of the principal of or
interest on any Bonds then Outstanding hereunder or in the performance of
the covenants contained in 6.01 or in covenants of like character or
imposing a Sinking Fund obligation or the obligation of a Maintenance and
Renewal Fund or Improvement Fund or any analogous fund established pursuant
to a Supplemental Indenture for the benefit of Bonds issued hereunder of a
series other than the 2.96% Bonds unless all Bonds then Outstanding
hereunder are to be redeemed.
(b) Upon receipt by the Trustee of
(1) a Directors' Resolution to the effect that the Company
has determined irrevocably to allocate Net Property Additions as
a basis for the withdrawal from the hands of the Trustee of
moneys of the character described in 8.02, and authorizing the
execution of a Supplemental Indenture, in form satisfactory to
the Trustee, conveying, transferring and/or assigning to the
Trustee all Fundable Property not previously so conveyed,
transferred and/or assigned;
(2) said Supplemental Indenture duly executed by the
Company and if necessary by the Trustee, in as many counterparts
as the Trustee shall require;
(3) an Officers' Certificate stating
(i) that to the best of the knowledge and belief of
such officers the Company is not in default in the perform-
ance and observance of any of the terms, covenants, and
conditions of the Indenture;
(ii) that all conditions precedent provided herein (in-
cluding any covenants hereof compliance with which con-
stitutes a condition precedent) have been complied with;
(4) a Certificate of Available Net Property Additions;
(5) an Accountant's Certificate similar, except for neces-
sary variations, to the Accountant's Certificate described in
subparagraph (f) 3.08;
(6) an Engineer's Certificate (accompanied with such
Independent Engineer's Certificate as may be required pursuant
to the last paragraph of 3.08 hereof with respect to Property
Additions) similar, except for necessary variations, to the
Engineer's Certificate described in subparagraph (g) of 3.08;
(7) an Opinion of Counsel to the effect that all corporate
action prerequisite or necessary for the execution and delivery
of the Supplemental Indenture has been taken; that the Property
Additions described in Item B of the said Certificate of
Available Net Property Additions are Fundable Property within
the definition thereof contained herein; and that all recording
and filing in respect of said Supplemental Indenture necessary
for the security of any and all Bonds has been or will be
completed;
the Trustee shall pay over to the Company a sum of money (but in no event
in excess of the moneys then held by it of the character described in 8.02)
equal to one hundred per centum (100%) of the Available Net Property
Additions set forth in Item G of said Certificate of Available Net Property
Additions;
(c) Upon receipt by the Trustee of an Officers' Certificate to
the effect that the Company has paid a specified amount of Federal
and/or State taxes based on profits derived from the sale or other
disposition of Mortgaged Property released from the Lien of this
Indenture pursuant to the provisions of Article VII hereof, and
requesting the payment to it of such amount, and stating that no part
thereof has been theretofore reimbursed to the Company out of moneys
in the hands of the Trustee, and stating in addition
(1) that to the best of the knowledge and belief of such
officers the Company is not in default in the performance and
observance of any of the terms, covenants, and conditions of the
Indenture; and
(2) that all conditions precedent provided herein
(including any covenants hereof compliance with which
constitutes a condition precedent) have been complied with;
the Trustee shall pay over to the Company the sum of money so requested
provided that such sum shall not exceed the moneys then held by it of the
character described in 8.02;
(d) Upon receipt by the Trustee of Bonds issued hereunder
surrendered by the Company, together with all unmatured coupons
appurtenant thereto, for Cancellation by the Trustee, and of an
Officers' Certificate containing the statements set forth in clauses
(1) and (2) of subparagraph (c) of this Section, the Trustee shall
pay over to the Company from moneys held by it of the character
described in 8.02 a sum of money (not in excess of such moneys then
held by it) equal to the principal amount of Bonds so surrendered to
it by the Company for Cancellation;
(e) Upon receipt by the Trustee of an Officers' Certificate
requesting the Trustee to apply a sum of money of the character
described in 8.02, then held by the Trustee, to the payment at matu-
rity of any Bonds issued hereunder, the Trustee shall, if said Bonds
to be paid are the only Bonds then Outstanding hereunder, apply
whatever such moneys the Company shall request to be so applied (not
in excess of such moneys then held by it) to such payment, but if
said Bonds to be paid are not the only Bonds then Outstanding
hereunder, the Trustee shall make such application only if the
Officers' Certificate shall in addition contain the statements set
forth in clauses (1) and (2) of subparagraph (c) of this Section;
(f) Upon receipt by the Trustee of an Officers' Certificate
requesting that the Trustee apply a sum of money of the character
described in 8.02, then held by the Trustee, to the purchase of Bonds
issued hereunder and then currently entitled to the benefit of any
Sinking Fund, Maintenance and Renewal Fund, Improvement Fund or
analogous fund established pursuant to the terms of a Supplemental
Indenture securing such Bonds, at prices not in excess of the then
current redemption price established by such Supplemental Indenture
for redemption of Bonds through the operation of such fund or of such
lesser price as the Certificate shall specify, either in the open
market or pursuant to tenders invited in pursuance of the provisions
of said Supplemental Indenture, as the Company shall direct by said
Certificate and containing the statements set forth in clauses (1)
and (2) of subparagraph (c) of this Section, the Trustee shall apply
so much of said sum as can be applied pursuant to such request to
such purchases, (but not in excess of such money then in its hands)
provided however that the receipt by the Trustee of a Directors'
Resolution or Officers' Certificate pursuant to subparagraphs (a),
(b), (c), or (e) of this Section shall be held to be a withdrawal and
cancellation of any request theretofore made to the Trustee under
this subparagraph (f) to the extent that such request shall not have
then been complied with or completed.
Bonds surrendered to the Trustee pursuant to subparagraph (d) or
purchased by the Trustee pursuant to subparagraph (f) of this Section shall
be treated as paid for all purposes hereof, shall be Cancelled by the
Trustee and no Bond shall ever be issued in the place of any such Bond.
8.04 Any moneys paid out by the Trustee in accordance with the
provisions of 8.03 shall be held to have been paid from or out of money
then longest in its hands. Any moneys of the character described in 8.02
which shall remain in the hands of the Trustee for a period in excess of
three (3) years shall, if such amount shall exceed the sum of two hundred
fifty thousand (250,000) dollars, be applied by the Trustee (if the Company
shall not be in default in the payment of the principal of or interest on
any Bonds Outstanding hereunder, or in the performance of the covenants
contained in 6.01 or in covenants of like character securing Bonds issued
hereunder belonging to a series other than the 2.95% Bonds or the
satisfaction of the requirements of any Sinking Fund, Maintenance and
Renewal Fund, Improvement Fund or analogous fund established by a
Supplemental Indenture securing Bonds issued hereunder) to the redemption
at the regular redemption price then current for the redemption at the
option of the Company of Bonds of that series then Outstanding which shall
first mature, provided however that if the Company shall have filed with
the Trustee prior to the first publication of call for redemption a written
plan for the definite expenditure of such moneys for Fundable Property, or
an Officers' Certificate stating that the expenditure of such moneys has
been prevented or delayed by acts of God, strikes, civil disturbances, or
restrictions imposed by reason of a state of war and requesting in either
case an extension of time, the Trustee may postpone the call for redemption
for such period as it may deem proper.
Call for redemption shall be made in the manner provided in 5.02
unless in respect of Bonds of any series other than the 2.95% Bonds a
different manner shall have been provided in the Supplemental Indenture
securing such Bonds, and the Trustee shall pay, Cancel, and deliver Bonds
and hold and apply the money for the payment thereof substantially in the
manner provided in 5.04, unless a different manner shall have been provided
in the Supplemental Indenture securing the Bonds of a series other than the
2.95% Bonds. The provisions of 5.05 shall control the rights of the
holders of the Bonds so called for redemption unless different provisions
in a Supplemental Indenture securing a series of Bonds other than the 2.95%
Bonds shall control the rights of the holders of such Bonds.
8.05 In the event of a taking by the exercise of the power of eminent
domain or of a sale as permitted by 7.05, in either case of all or
substantially all of the Mortgaged Property, and of the deposit with the
Trustee pursuant to 8.02 of sums sufficient together with moneys in the
hands of the Trustee and available for the purpose to effect the retirement
of all the Bonds then Outstanding, the Trustee, whether or not interest on
any Bonds then Outstanding shall be due and unpaid and whether or not any
of the events of default specified in 9.01 shall have occurred, shall as
soon as reasonably possible call for the redemption at the lowest
redemption price then current applicable to each series of Bonds so called,
all the Bonds then Outstanding for payment. The provisions of 8.04 shall
control the call for redemption, payment, and Cancellation of Bonds,
delivery of Cancelled Bonds, and the rights of the holders of Bonds called
for redemption hereunder.
8.06 Any cash of the character described in 8.02 while held by the
Trustee (prior to any application thereof pursuant to either 8.03 or 8.04)
shall upon receipt of a Directors' Resolution requesting such action be
invested or reinvested by the Trustee to the extent permitted by law in any
bonds or other obligations of the United States of America designated in
said Directors' Resolution. Until one or more of the events of default
specified in 9.01 shall have occurred, any interest on such bonds or other
obligations which may be received by the Trustee shall be forthwith paid to
the Company, except that if any of such bonds or other obligations shall
have been purchased by the Trustee at an amount in excess of the principal
amount thereof, all interest received upon such bonds or other obligations
shall be retained by the Trustee until the amount of such interest so
received and retained shall be equal to the amount of such excess thus paid
by the Trustee. Such bonds or other obligations shall be held by the
Trustee as a part of the Mortgaged Property. Any or all of such bonds or
other obligations so held by the Trustee shall upon receipt of a Directors'
Resolution requesting such action, or without the receipt of any such
Directors' Resolution whenever the Trustee in its discretion shall deem
such action advisable, be sold by the Trustee, but the Trustee shall be
under no obligation to make any such sale unless requested by the Company.
The proceeds of any such sale shall be held by the Trustee as a part of the
Mortgaged Property and shall be considered as being of the character
described in 8.02. In case the net proceeds (excluding any interest
received by the Company and including any interest received and retained by
the Trustee) realized upon any sale shall amount to less than the amount
paid by the Trustee in or on account of the purchase of the bonds or
obligations so sold, the Trustee shall within five (5) days after such sale
notify the Company in writing thereof and within five (5) days thereafter
the Company shall pay to the Trustee the amount of the difference between
the amount so paid by the Trustee and such net proceeds and the amount so
paid shall be held by the Trustee in like manner and subject to the same
rights and obligations as the proceeds realized upon such sale. However,
in case such net proceeds shall amount to more than the amount so paid by
the Trustee, the Trustee shall within five (5) days of such sale pay to the
Company the difference between such net proceeds and such amount so paid up
to but not exceeding the total amount of interest on such bonds or
obligations so sold received and retained by the Trustee.
The Trustee shall not be held responsible for any diminution in the
value of any bonds or other obligations of the United States of America in
which cash of the character described in 8.02 shall be invested, or for any
realized loss arising from any sale or other disposition thereof.
ARTICLE IX.
Defaults and Remedies
9.01 If any one or more of the following events (herein generally
termed, singly, an event of default, and as regards any two or more, or all
collectively, events of default) shall occur, namely
(1) if default shall be made in the payment of any installment
of interest on any of the Bonds, when and as the same shall become
due and payable, as therein and herein expressed, and such default
shall continue for a period of thirty (30) days; or
(2) if default shall be made in the payment of the principal of
or any premium on any of the Bonds, when and as the same shall become
due and payable, whether at maturity, by call for redemption, by
declaration, or otherwise; or
(3) If default shall be made in the payment of any Improvement
Fund installment or in the payment of any installment payable in
respect of any Sinking Fund, Maintenance and Renewal Fund,
Improvement Fund, or analogous fund established pursuant to the terms
of any Supplemental Indenture, when and as the same shall become due
and payable, as herein or therein expressed, and such default shall
continue for a period of sixty (60) days; or
(4) if default shall be made by the Company in the performance
or observance of any other covenant, agreement, or condition on its
part to be performed or observed as expressed in the Indenture or in
the Bonds, and such default shall continue for a period of sixty (60)
days after written notice delivered to the Company by the Trustee, or
to the Company and the Trustee by the holders of not less than
twenty-five per cent (25%) in principal amount of the Bonds then
Outstanding (excluding Company-owned Bonds), or forthwith upon such
notice and without lapse of time if the Company shall waive the same
in writing; or
(5) if the Company shall be dissolved, or shall lose its charter
by forfeiture or otherwise, or shall admit in writing its inability
to pay its debts generally as they become due, or shall make a
general assignment for the benefit of creditors, or shall file a
voluntary petition in bankruptcy or under the corporate
reorganization provisions of the National Bankruptcy Act (as now or
hereafter amended), or an answer admitting the material allegations
of a petition filed against the Company under such provisions, or
shall, by voluntary petition, answer, or consent, seek relief under
the provisions of any other now existing or future bankruptcy or
other law providing for the reorganization, dissolution, liquidation,
or winding up of corporations on the ground of insolvency; or
(6) if an order, judgment, or decree shall be entered by any
court of competent jurisdiction without the consent of the Company,
adjudicating the Company to be a bankrupt or insolvent, or appointing
a trustee or receiver of the Company or of the whole or any
substantial part of the Mortgaged Property, and such adjudication
shall not have been vacated or set aside, or the trustee or the
receiver so appointed shall not have been removed or discharged, as
the case may be, within sixty (60) days thereafter; or if the Company
shall consent to a petition or application for its adjudication as
bankrupt or insolvent, or for the appointment of a trustee or
receiver of itself or the whole or any substantial part of the
Mortgaged Property; or
(7) if a petition against the Company in proceedings under the
corporate reorganization provisions of the National Bankruptcy Act
(as now or hereafter amended) shall be approved by any court of
competent jurisdiction and such approval shall not be withdrawn and
the proceedings dismissed within sixty (60) days thereafter; or, if
under the provisions of any other now existing or future bankruptcy
or other law providing for the reorganization, dissolution,
liquidation, or winding up of corporations on the ground of
insolvency, any court of competent jurisdiction shall assume
jurisdiction, custody, or control of the Company, or of the whole or
any substantial part of the Mortgaged Property, and such
jurisdiction, custody, or control shall not be relinquished or
terminated within sixty (60) days thereafter;
then, if and so long as any such default shall continue to exist, the
Trustee by notice in writing given to the Company, or the holders of not
less than twenty-five per cent (25%) in principal amount of the Bonds then
Outstanding (excluding Company-owned Bonds) by notice in writing to the
Company and to the Trustee, may declare the principal of all the Bonds then
Outstanding, if not already due and payable, to be immediately due and
payable together with all accrued and unpaid interest thereon, and upon any
such declaration, the same shall become and be immediately due and payable,
anything in this Indenture or in any of the Bonds contained to the contrary
notwithstanding.
This provision is subject to the condition that if, at any time after
the principal shall have been so declared due and payable and before any
sale of the Mortgaged Property shall have been made, all arrears of
interest upon all the Bonds (with interest at the rate specified therein on
any overdue installment of interest, so far as the same may be legally
enforceable) and the expenses of the Trustee, its agents or attorneys shall
either be paid by the Company or be collected and paid out of the Mortgaged
Property, and all defaults as aforesaid (other than the payment of
principal which has been declared due and payable) shall have been cured or
secured or adequately provided for to the satisfaction of the Trustee,
then, and in every such case, the Trustee may, and upon request of the
holders of not less than a majority of the Bonds then Outstanding
(excluding Company-owned Bonds) shall, waive such default and its
consequences and rescind such declaration; but no such waiver shall extend
to or affect any subsequent default or impair or exhaust any right or power
consequent thereon. In the event of such waiver and rescission, the
Mortgaged Property if in the hands of the Trustee or of a receiver
appointed hereunder, shall be returned to the Company.
9.02 The Trustee shall give to the Bondholders, in the manner and to
the extent provided in subsection (G) of 12.04 hereof, notice of all
defaults known to the Trustee, within ninety (90) days after the occurrence
thereof, unless such defaults shall have been cured or waived before the
giving of such notice (the word "defaults" for the purposes of this Section
being hereby defined to be the events of default specified in 9.01 hereof
without waiting for the expiration of any period of grace); provided that,
except in the case of default in the payment of the principal of or
interest on any of the Bonds, or in the payment of any Improvement Fund
installment, or in the payment of any installment payable in respect of any
Maintenance and Renewal Fund, Improvement Fund or analogous fund
established pursuant to the terms of any Supplemental Indenture, the
Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee, or a trust committee of
directors and/or Responsible Officers, of the Trustee in good faith
determine that the withholding of such notice is in the interest of the
Bondholders.
9.03 In case one or more of the events of default enumerated in 9.01
shall exist, then and in each and every such case the Trustee, personally
or by its attorneys or agents, is hereby authorized and empowered, whether
or not the principal of the Bonds shall have matured or been declared due,
to exercise any one or more of the following remedies, and to do or cause
to be done any or all of the following acts and things, namely:
(1) The Trustee, by its agents or attorneys, may (provided such
action shall not at the time be in violation of any laws applicable
to the Company or its properties) enter into and upon and take
possession of any or all of the Mortgaged Property and each and every
part thereof (and the books, papers, and accounts of the Company),
and may exclude the Company, its successors or assigns, its or their
agents, servants, and employees wholly therefrom, and have, hold,
use, operate, manage, and control the same and each and every part
thereof and, in the name of the Company or otherwise as the Trustee
shall deem best, conduct the business thereof and exercise the
franchises pertaining thereto and all the rights and powers of the
Company, and from time to time, maintain, restore, insure, and keep
insured the properties, plants, equipment, and apparatus provided or
required for use in connection with such business and likewise, from
time to time, make all such necessary or proper repairs, renewals,
and replacements, and all such useful alterations, additions,
betterments, and improvements as to the Trustee may seem judicious,
and collect and receive all tolls, earnings, revenues, rents, issues,
profits, and other income of the same and of every part thereof, and
pay therefrom all proper costs and expenses of operation and all
expenses incurred hereunder and all other proper outlays herein
authorized, and all payments which may be made for taxes and
assessments and for such other liens prior hereto and charges upon
the Mortgaged Property or any part thereof as the Trustee may deem it
wise to pay, and the just and reasonable compensation for the
services of the Trustee and for the services of such attorneys,
agents, and assistants as it may in the exercise of its discretion
employ for any of the purposes aforesaid, and shall apply the rest
and residue of such moneys received by it as follows:
(a) In case the principal of none of the Bonds shall have
become due, to the payment of the interest in default, in the
order of the maturity of the installments of such interest, with
interest, so far as the same may be legally enforceable, on the
overdue installments thereof at the same rates, respectively, as
were borne by the Bonds on which such interest shall be in
default, such payments to be made ratably to the parties en-
titled thereto without discrimination or preference, subject,
however, to the provisions of 2.14 and 4.02.
(b) In case the principal of any, but not all, of the
Bonds, shall have become due, first to the payment of the
interest in default, in the order of the maturity of the
installments thereof, with interest, so far as the same may be
legally enforceable, on the overdue installments thereof at the
same rates, respectively, as were borne by the Bonds on which
such interest shall be in default, and next to the payment of
the principal of all Bonds then due, with interest on the
overdue principal at the rates specified in the respective
Bonds, such payments to be made ratably to the parties entitled
thereto without discrimination or preference, subject, however,
to the provisions of 2.14 and 4.02.
(c) In case the principal of all of the Bonds shall have
become due, by declaration or otherwise, then as provided in
Paragraph Second of 9.09, but subject to the condition set forth
in the proviso at the close of said Section.
In case all payments provided for in paragraphs (a) and (b)
above and payment of whatever may be payable for any other purpose
required by any provisions of this Indenture shall have been paid in
full, and no sale shall have been made as hereinafter provided, and
all other defaults under this Indenture made good, the Trustee shall
restore the possession of the Mortgaged Property (other than any cash
and/or purchase money obligations required to be deposited with the
Trustee) to the Company or whosoever shall be entitled thereto; the
same right of entry to exist upon any subsequent event of default
however.
(2) The Trustee may, with or without entry, collect or enforce
the collection of all interest and principal payable in respect of
any purchase money obligation which may at the time be held by the
Trustee hereunder. Any sums so collected or received by the Trustee
shall be held and applied by the Trustee in like manner as is
provided in the foregoing subdivision (1) of this Section in respect
of tolls, earnings, revenues, rents, issues, profits, and other
income collected or received by the Trustee from or on account of the
Mortgaged Property.
(3) The Trustee may (if such action shall at the time be
authorized by law), with or without entry, sell, subject to the prior
liens, if any, then existing thereon or free from such of said liens
as the Trustee in its discretion may elect to discharge, to the
highest and best bidder, all and singular the Mortgaged Property and
the right, title, interest, claim, and demand of the Company therein
and thereto, and the right of redemption thereof, at public auction,
at such times and places and upon such conditions as to upset or
reserve bids or prices and as to terms of payment and other terms of
sale as the Trustee may fix and briefly specify in the notice of sale
to be given as hereinafter provided, or as may be required by law,
including power and authority to the Trustee to rescind or vary any
contract of sale that may be entered into and to resell under the
powers herein conferred.
(4) The Trustee may proceed to protect and enforce its rights
and the rights of the Bondholders under this Indenture by a suit or
suits in equity or at law, whether for the specific performance of
any covenant or agreement contained in this Indenture, or in aid of
the execution of any power granted in this Indenture, or for the
foreclosure of this Indenture, or for the enforcement of any other
appropriate legal or equitable remedy as the Trustee being advised by
counsel, shall, subject to the provisions of 13.02 and 13.03, deem
most effectual to protect and enforce any of the rights aforesaid.
9.04 Upon filing a bill in equity or upon other commencement of
judicial proceedings by the Trustee to enforce any right under this
Indenture, the Trustee shall be entitled to exercise any and all other
rights and powers herein conferred and provided to be exercised by the
Trustee upon the occurrence of an event of default as defined in 9.01; and,
as a matter of right, without notice or demand and without regard to the
adequacy of the security for the Bonds, the Trustee shall be entitled to
the appointment of a receiver of the Mortgaged Property, and of the tolls,
earnings, revenues, rents, issues, profits, and other income thereof, with
all such powers as the court or courts making such appointment shall
confer; but notwithstanding the appointment of any receiver, the Trustee
shall be entitled to retain possession and control of, and to collect and
receive the income from, any moneys or purchase money obligations which may
at the time be held by it hereunder.
9.05 In the event of any such sale, whether made under the power of
sale herein conferred, or under or by virtue of judicial proceedings, the
whole of the Mortgaged Property shall be sold in one parcel as an entirety,
including the franchises and business of the Company and the right to use
its corporate name, unless such sale as an entirety is, in the judgment of
the Trustee, impracticable by reason of some statute or other reason, or
unless the holders of a majority in principal amount of the Bonds then
Outstanding (excluding Company-owned Bonds) shall file with the Trustee a
Bondholders' Request from the holders of not less than the majority of such
Bonds to cause the Mortgaged Property to be sold in parcels, in which case,
unless prevented by statute or some other cause, the sale shall be made in
such parcels and in such order as may be specified in such Request. The
Company for itself and all persons and corporations hereafter claiming
from, through, or under it or who may at any time hereafter become holders
of liens junior to the Lien of this Indenture, hereby expressly waives and
releases all right to have the Mortgaged Property marshalled upon any
foreclosure or other enforcement hereof, and the Trustee, or any court in
which the foreclosure of this Indenture or administration of the trusts
hereby created is sought, shall have the right as aforesaid to sell the
Mortgaged Property as a whole in a single parcel.
9.06 Notice of any sale pursuant to the provisions of this Indenture
shall state the time and place when and where the same is to be held, shall
contain a brief description of the property to be sold, and shall briefly
state the terms of sale, and shall be sufficient if given by Published
Notice once a week for four successive weeks prior to such sale, the first
publication to be not less than thirty (30) days prior to such sale, and in
such other manner as may be required by law. The Trustee may adjourn from
time to time any such sale by announcement at the time and place appointed
for such sale, or for such adjourned sale or sales; and without further
notice or publication (unless otherwise required by law) it may make such
sale at the time and place to which the same shall be so adjourned or
readjourned.
9.07 Upon any sale, as aforesaid, whether made under the power of
sale hereby conferred or under or by virtue of judicial proceedings, any
Bondholders or the Trustee may bid for and purchase the property offered
for sale, or any part thereof, and upon compliance with the terms of sale,
may hold and dispose of such property in their own or its own absolute
right, without further accountability; and any purchaser at any such sale,
for the purpose of making settlement or payment for the property purchased,
shall be entitled to use and apply any Bonds then Outstanding, and any
matured and unpaid coupons appertaining thereto or claims for interest
thereon, by presenting the same so that there may be credited, as paid
thereon, the sums payable out of the net proceeds of such sale to the
holder of such Bonds and coupons or claims as his ratable share of such net
proceeds after allowing for the proportions of the total purchase price
required to be paid in cash for the cost and expenses of the sale,
compensation, and other charges; and thereupon such purchaser shall be
credited on account of such purchase price payable by him with that portion
of such net proceeds which shall be applicable to the payment of, and which
shall have been credited upon, the Bonds and coupons and claims so
presented. The provisions of this Section are subject to the provisions of
2.14 and 4.02.
9.08 Upon the completion of any sale or sales under or by virtue of
this Indenture, the Trustee shall execute and deliver to the accepted
purchaser or purchasers a good and sufficient deed or deeds of conveyance,
sale, and transfer of all the property sold; and the Trustee, or its
successor for the time being, is hereby irrevocably appointed the true and
lawful attorney of the Company, its successors or assigns, in its or their
name or names and stead, to make all necessary deeds, conveyances,
assignments, and transfers of the property thus sold; and for that purpose
it may execute all necessary deeds and instruments of assignment and
transfer, and may substitute one or more persons with like power, the
Company for itself, its successors or assigns, hereby ratifying and
confirming all that its said attorney, or such substitute or substitutes,
shall lawfully do by virtue hereof. Nevertheless, if so requested by the
Trustee, the Company shall ratify and confirm any such sale or transfer by
executing and delivering to the Trustee or to such purchaser or purchasers
all such instruments as may be necessary or in the judgment of the Trustee
proper for the purpose and as may be designated in any such request.
Any such sale or sales made under or by virtue of this Indenture,
whether under the power of sale herein granted or by virtue of judicial
proceedings, shall, to the extent permitted by law, operate to divest all
right, title, interest, claim, and demand whatsoever, either at law or in
equity, of the Company, in and to the property so sold, and shall be a
perpetual bar, both at law and in equity, against the Company, its
successors and assigns, and against any and all persons claiming or who may
claim the property sold, or any part thereof, from, through, or under the
Company, or its successors and assigns.
The receipt of the Trustee, or of the court officer conducting any
such sale, for the purchase money paid at or under any such sale, shall be
a full and sufficient discharge to any purchaser of any property sold as
aforesaid; and no purchaser, or his representatives, grantees, or assigns,
after paying such purchase money and receiving such receipt, shall be bound
to see to the application of such purchase money upon or for any trust or
purpose of this Indenture, or in any manner whatsoever be answerable for
any loss, misapplication, or non-application of any such purchase money or
any part thereof, or be bound to inquire as to the authorization,
necessity, expediency, or regularity of any such sale.
9.09 The purchase money, proceeds, and avails of any sale, whether
made under the power of sale herein granted or pursuant to judicial
proceedings, together with any such sums which then may be held by the
Trustee under any provision of this Indenture as part of the Mortgaged
Property, shall be applied in the following order:
First. To or towards the payment of the costs and expenses of
such sale and reasonable compensation of the Trustee, its agents,
attorneys, and counsel, and of all necessary or proper expenses,
liabilities, and advances made or incurred by the Trustee, without
negligence or bad faith, under this Indenture or in executing any
power or trust hereunder, and to the payment of all taxes, assess-
ments, or liens superior to the Lien of this Indenture, except any
taxes, assessments, or other superior liens subject to which such
sale shall have been made.
Second. To the payment of the whole amount due and unpaid at
the time of distribution upon the Bonds then Outstanding for
principal and any premium which shall have become payable on any
Bonds theretofore called for redemption, and interest, with interest,
so far as the same may be legally enforceable, on overdue principal
and overdue installments of interest at the same rates, respectively,
as were borne by the respective Bonds, and, in case such proceeds
shall be insufficient to pay in full the whole amount so due and
unpaid upon the Bonds, then to the payment of such principal (but not
including any premium) and interest, without preference or priority
of principal over interest, or of interest over principal, or of any
installment of interest over any other installment of interest, or of
the Bonds of any series over the Bonds of any other series, ratably
to the aggregate of such principal and unpaid interest, subject,
however, to the provisions of 2.14 and 4.02, and any balance then
remaining to the payment ratably of any such premiums. Such payments
shall be made on the date fixed therefor by the Trustee upon
presentation of the several Bonds and coupons and stamping such
payment thereon, if partly paid, and upon surrender and cancellation
thereof, if fully paid; and
Third. To the payment of the surplus, if any, to the Company,
its successors or assigns, or to whosoever may be lawfully entitled
to receive the same, or as a court of competent jurisdiction may
direct;
provided, however, that if at the time of any such application by the
Trustee any Bonds shall be Outstanding, and if the Trustee shall have in
its hands Sinking Fund, Maintenance and Renewal Fund, Improvement Fund, or
analogous fund moneys for the benefit of any particular series of Bonds
then Outstanding hereunder, such moneys shall be added to the amount or
amounts otherwise distributable pursuant to Paragraph Second hereof to the
holders of the Bonds of such particular series, (but not to an amount such
that said holders shall receive a sum in excess of the whole amount due and
unpaid at the time of distribution upon Bonds held by them) and shall be
divided ratably among them, subject however, to the provisions of 2.14 and
4.02.
9.10 In case of any sale of the Mortgaged Property, or any part
thereof, under this Article IX, whether made under the power of sale herein
granted, or by virtue of judicial proceedings, the principal of and accrued
interest on all the Bonds then Outstanding, if not already due, shall
immediately become due and payable, anything in the Bonds or in this
Indenture to the contrary not withstanding.
9.11 The Company covenants that
(1) in case it shall fail to pay interest on any Bond for a
period of thirty (30) days after such interest shall have become
due and payable; or
(2) in case it shall fail to pay the principal or premium,
if any, of any Bond when and as the same shall become due and
payable, whether by the terms thereof or otherwise as herein
provided,
then, and upon demand of the Trustee, the Company will pay to the Trustee
at its office, for the benefit of the holders of the Bonds and coupons then
Outstanding, the whole amount then due and unpaid thereon, for principal,
premium, or interest, as the case may be, with interest at the rate
specified in such Bonds upon the overdue principal and the overdue
installments of interest, so far as the same may be legally enforceable,
and, in case the Company shall fail to pay the same forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust,
shall be entitled to recover judgment against the Company for the whole
amount of such principal, premium, and interest remaining unpaid.
The Trustee shall be entitled and empowered either in its own name
and as trustee of an express trust, or as attorney-in-fact for the bearers
or registered owners of the Bonds and coupons, or in any one or more such
capacities, to make and file such proofs of debt, amendments to proofs of
debt, claims, petitions, or other documents as may be necessary or
advisable in order to have the claims of the bearers or registered owners
of the Bonds and coupons allowed in any equity receivership, insolvency,
bankruptcy, liquidation, readjustment, reorganization, or other proceeding
involving any distribution of the assets of the Company or any other
Obligor upon the Bonds to its creditors, or in any judicial proceedings
relative to the Company or such other Obligor, its creditors, or its
property.
The Trustee is hereby irrevocably appointed (and the successive
bearers or registered owners of the Bonds and coupons issued hereunder, by
taking and holding the same, shall be conclusively deemed to have so
appointed the Trustee) the true and lawful attorney-in-fact of the
respective bearers and registered owners of the Bonds and coupons issued
hereunder, with authority to make and file in any judicial proceeding,
either in the respective names of the bearers and registered owners of the
Bonds and/or coupons, or on behalf of all the bearers and registered owners
of the Bonds and/or coupons as a class (subject to deduction from any such
claim of the amounts of any claims filed by any of the bearers and
registered owners of the Bonds and/or coupons themselves), any proof of
debt, amendment to proof of debt, claim, petition, or other document; to
receive payment of any sums becoming distributable on account thereof; and
to execute any other papers and documents and to do and perform any and all
such acts and things as may be necessary or advisable in the opinion of the
Trustee in order to have the respective claims of the bearers and
registered owners of the Bonds and/or coupons against the Company or any
other Obligor upon the Bonds allowed in any equity receivership,
insolvency, bankruptcy, liquidation, or other proceedings to which the
Company or any such other Obligor shall be a party or which relates to the
Company or any such other Obligor, or to the creditors or property of the
Company or any such other Obligor. The Trustee shall have full power of
substitution and delegation in respect of any such powers.
Nothing herein shall be deemed, however, to give power to the Trustee
to vote the claims of the holders of the Bonds or coupons in any such
proceedings, or to accept or consent to any plan of reorganization,
readjustment, arrangement, or composition or other like plan, or by other
action of any character in any such proceeding to waive or change any right
of any holder of the Bonds or coupons.
The Trustee shall be entitled to recover judgment or make or file
proof of debt as aforesaid either before or after or during the pendency of
any proceedings for the enforcement of the Lien of this Indenture, and the
right of the Trustee to recover such judgment or make such proof of debt
shall not be affected by any entry or sale hereunder or by the exercise of
any other right, power, or remedy for the enforcement of the provisions of
this Indenture or the foreclosure of the Lien hereof. In case of a sale of
the Mortgaged Property and of the application of the proceeds of sale to
the payment of the Bonds, the Trustee, in its own name and as trustee of an
express trust, shall be entitled to enforce payment of, and to receive, all
amounts then remaining due and unpaid upon any and all of the Bonds and
coupons then Outstanding, for the benefit of the holders thereof, and shall
be entitled to recover judgment or make or file proof of debt for any
portion of the same remaining unpaid, with interest as aforesaid. No
recovery of any such judgment by the Trustee or any attachment or levy of
execution under any such judgment upon the Mortgaged Property or any part
thereof, or upon any other property, nor any such proof of debt, shall in
any manner or to any extent affect the Lien of this Indenture upon the
Mortgaged Property or any part thereof or any lien, rights, powers, or
remedies of the Trustee hereunder or of the holders of the Bonds; but such
Lien, lien, rights, powers, and remedies shall continue unimpaired as
before.
All moneys collected by the Trustee under this Section shall be
applied as follows:
First. To the payment of the costs and expenses of the pro-
ceedings resulting in the collection of such moneys, the reasonable
compensation of the Trustee, its agents, attorneys, and counsel and
of necessary or proper expenses, liabilities, and advances made or
incurred by the Trustee, without negligence or bad faith, under this
Indenture or in executing any trust or power hereunder; and
Second. To the payment of the amounts then due and unpaid upon
the Bonds for principal, premium (if any) and interest in respect
whereof such moneys shall have been collected, ratably and without
any preference or priority of any kind (except as provided in 2.14
and 4.02) according to the amounts due and payable upon such Bonds
and for interest, respectively, to the date filed by the Trustee for
the distribution of such moneys, upon presentation of the several
Bonds and coupons, if any, and stamping such payment thereon, if
partly paid, and upon surrender and cancellation thereof, if fully
paid.
9.12 The Trustee shall have power to institute and to maintain such
suits and proceedings as the Trustee being advised by counsel may deem
necessary or expedient to prevent any impairment of the security hereunder
by any acts of the Company which are in violation of this Indenture or are
unlawful, or as the Trustee being advised by counsel may deem necessary or
expedient to preserve or protect its interest and the interests of the
Bondholders in respect of the Mortgaged Property, and in respect of the
tolls, earnings, revenues, rents, issues, profits and other income arising
therefrom, including the power to institute and to maintain suits or
proceedings to restrain the enforcement of, or compliance with, or the
observance of, any legislative, municipal, or other governmental enactment,
rule, or order that may be unconstitutional or otherwise invalid, if the
enforcement of, compliance with, or observance of, such enactment, rule, or
order would impair the security hereunder or be prejudicial to the
interests of the Bondholders or of the Trustee.
9.13 Upon failure of the Company so to do, either any receiver
appointed hereunder, or the holders of not less than twenty-five percent
(25%) in principal amount of the Bonds then Outstanding (excluding
Company-owned Bonds) may make any payment (other than of the principal or
interest in respect of the Bonds and/or sums due pursuant to the
Improvement Fund, or to the terms of any Sinking Fund, Maintenance and
Renewal Fund, Improvement Fund or any analogous fund if any, in respect of
the Bonds) which the Company by any provision of this Indenture agrees to
make or cause to be made, and the Company covenants and agrees that it will
forthwith repay to such receiver or to the Bondholders all moneys which
such receiver or the Bondholders shall so pay, and will pay interest
thereon from the date of such payment by such receiver or the Bondholders
until the repayment thereof at the current rate for time loans; and until
so paid, such advances shall be secured by a lien under and by virtue of
this Indenture upon the Mortgaged Property, in preference to the Bonds and
coupons issued hereunder. No such payment by any such receiver or by the
Bond holders shall be deemed to relieve the Company from the consequence of
any default hereunder.
9.14 In case of a default on its part, neither the Company nor any
one claiming from, through, or under it shall or will take advantage of any
appraisement, valuation, stay, extension, or redemption laws now or
hereafter in force in any locality where any property subject to the Lien
hereof may be situated, in order to prevent or hinder the enforcement or
foreclosure of this Indenture, or the absolute sale of the Mortgaged
Property, or the final and absolute putting into possession thereof,
immediately after such sale, of the purchaser or purchasers thereat, and
the Company, for itself and all who may claim through or under it, hereby
waives the benefit of all such laws, and the Company covenants it will not
hinder, delay, or impede the execution of any power herein granted or
delegated to the Trustee, or which the Trustee may otherwise have, but that
the Company will suffer and permit the execution of every such power, as
though no such law or laws had been made or enacted.
9.15 The Company, for itself, its successors and assigns, hereby
expressly covenants to and with the Trustee that, at and immediately upon
the commencement of any action, suit, or other legal proceeding by the
Trustee (1) to obtain possession of the Mortgaged Property, or any part
thereof, the Company, its successors and assigns, shall and will,
severally, waiving the issuance and service of process, enter its or their
voluntary appearance in such action, suit, or proceeding, and consent to
the entry of a judgment for the recovery and possession of the Mortgaged
Property and every part thereof; (2) for the foreclosure of the Lien of
this Indenture, the Company, its successors and assigns, shall and will,
severally, waiving the issuance and service of process, enter its or their
voluntary appearance in such action, suit, or proceeding and consent to the
appointment of a receiver of the Mortgaged Property and the tolls,
earnings, revenues, rents, issues, profits, and other income thereof for
the sole benefit of the holders of the Bonds; and (3) pursuant to the
provisions hereof, to obtain judgment for the principal of or interest on
any of the Bonds or for both, or to obtain a judgment or decree of any
other nature in aid of the enforcement of the Bonds or coupons or any of
them, or of this Indenture, the Company, its successors or assigns, shall
and will, severally, waiving the issuance and service of process, enter its
or their voluntary appearance in such action, suit, or proceeding and
consent to the entry of a judgment for such principal and/or interest, with
interest on overdue principal and installments of interest, so far as the
same may be legally enforceable, and for the lawful costs and expenses and
compensation of the Trustee and its agents and attorneys and for such other
relief as the Trustee may be entitled to under the provisions hereof.
9.16 In the event of default, anything in this Indenture to the
contrary notwithstanding, the holders of not less than a majority in
aggregate principal amount of the Bonds then Outstanding (excluding
Company-owned Bonds) shall, upon filing with the Trustee a Bondholders'
Notice and a Bondholders' Request from the holders of such majority of such
Bonds, have the right (1) to require the Trustee to proceed to enforce the
Lien of this Indenture, either by suit or suits at law or in equity for the
enforcement of the payment of the Bonds then Outstanding hereunder and for
the foreclosure of this Indenture and for the sale of the Mortgaged
Property under the judgment or decree of a court of competent jurisdiction,
or at the election of the Trustee by exercise of its powers with respect to
entry or sale, and (2) to direct and control the time, method, and place of
conducting any and all proceedings hereby authorized for any sale of the
Mortgaged Property, or any adjournment thereof, or for the foreclosure of
this Indenture, or for the appointment of a receiver, or any other action
or proceeding hereunder instituted by the Trustee, provided, however, that
such direction shall not be otherwise than in accordance with the
provisions of law and this Indenture, and the Trustee shall not be
responsible to anyone for any action taken or omitted by it in good faith
pursuant to any such direction; and, provided further, that, subject to the
provisions of 13.02 and 13.03, the Trustee shall have the right to decline
to follow any such requirement or direction if it shall be advised by
counsel that the action or proceeding so directed may not be lawfully taken
or if the Trustee in good faith shall by Responsible Officers determine
that the action or proceeding so directed would involve it in personal
liability or be unjustifiably prejudicial to the non-assenting Bondholders,
or that it will not be sufficiently indemnified for any expenditures in any
action or proceeding so directed.
9.17 In so far as not contrary to any Bondholders' Notice and
Bondholders' Request pursuant to 9.16, but notwithstanding anything else in
this Indenture to the contrary, in case more than one series of Bonds be
Outstanding hereunder and an event of default shall have happened because
of any default in the payment of the principal of, or of the interest on,
or of any Sinking Fund, Maintenance and Renewal Fund, Improvement Fund, or
analogous fund installment in respect of, the Bonds of any one or more of
such series and not in respect of the Bonds of one or more of the other
series, and such event of default shall be subsisting, then whatever action
in this article it is provided may or shall be taken upon the happening of
such an event of default (continuing or subsisting as in this Indenture
provided) by or upon the request of the holders of a specified percentage
in principal amount of Bonds then Outstanding (excluding Company-owned
Bonds), may or shall be taken, in respect of the Bonds then Outstanding of
the series as to which such default shall have been made, by or upon the
request of the holders of a majority in principal amount of the Bonds then
Outstanding (excluding Company-owned Bonds) of the series as to which such
default shall have been made.
9.18 No holder of any Bond, or of any coupon or claim for interest
thereto appertaining, shall have the right to institute any suit, action,
or proceeding at law or in equity for the foreclosure of this Indenture or
for the execution of any trust or power hereof or for the appointment of a
receiver or for the enforcement of any other remedy hereunder unless there
shall previously have been filed with the Trustee a Bondholders' Notice and
a Bondholders' Request pertaining to enforcement of this Indenture by the
Trustee and unless there shall have been offered to the Trustee security
and indemnity satisfactory to it against the costs, expenses, and
liabilities to be incurred pursuant to such Notice and Request without
negligence or bad faith and unless the Trustee shall have failed to act
after a reasonable period, not exceeding sixty (60) days after receipt of
such Notice and Request, and such Notice and Request are hereby declared to
be conditions precedent to any such action or proceedings, all to the end
that the rights of the Trustee and the equal and ratable rights of every
holder of the Bonds shall be protected and multiplicity of suits shall be
avoided. Notwithstanding any other provisions hereof, the right of any
Bondholder to receive payment of the principal of and interest on any of
his Bonds on or after the respective due dates expressed in the Bonds and
coupons, or to institute suit for the enforcement of any such payment on or
after such respective dates, shall not be impaired or affected without the
consent of such holder; provided, however, that no Bondholder may institute
any such suit if and to the extent that the institution or prosecution
thereof or the entry of judgment herein would, under applicable law, result
in the surrender, impairment, waiver, or loss of the Lien of this Indenture
on any property subject to such Lien.
For the enforcement of the foregoing provisions of this Section and
for the protection of their rights hereunder, each and every holder of
Bonds, and the Trustee, shall be entitled to such relief as can be given
either at law or in equity.
9.19 Except as herein expressly provided to the contrary, no remedy
herein conferred upon or reserved to the Trustee or to the holders of the
Bonds is intended to be exclusive of any other remedy, but each and every
such remedy shall be cumulative and shall be in addition to every other
remedy given hereunder or now or hereafter existing at law or in equity or
by statute; and the employment of any remedy hereunder or otherwise shall
not prevent the concurrent employment of any other appropriate remedy or
remedies.
9.20 No delay or omission of the Trustee or of any holder of Bonds to
exercise any right or power upon the happening of any event of default (as
defined in 9.01) shall impair any such right or power or shall be construed
to be a waiver thereof or an acquiescence therein, nor shall the action of
the Trustee, or of the Bondholders, in case of any event of default and the
subsequent waiver thereof, affect or impair the rights of the Trustee, or
of such holders, in respect of any subsequent event of default on the part
of the Company or impair any right resulting therefrom; and every right,
power, and remedy given by this article to the Trustee, or to the
Bondholders, respectively, may, subject to the provisions of 9.18, be
exercised from time to time and as often as may be deemed expedient by the
Trustee, or by the Bondholders.
All rights of action under this Indenture (including the making and
filing of proofs of debt, and taking any action necessary or advisable in
order to have the claims of bearers and registered owners of Bonds allowed
in any proceedings) may be enforced by the Trustee without the possession
of any of the Bonds or coupons or the production thereof on the trial or
other proceedings, and any such suit or proceedings instituted by the
Trustee shall be brought in its name.
9.21 In any proceeding in law or equity brought by the Trustee
(including also any proceeding involving the interpretation of any
provision of this Indenture to which the Trustee shall be a party), the
Trustee shall be held to represent all the holders of Bonds and coupons
secured by this Indenture, and it shall not be necessary to make such
holders parties to any such proceeding.
ARTICLE X.
Evidence of Rights of Bondholders and Ownership of Bonds
10.01 Any Request, Notice, declaration, or other instrument, which
this Indenture may require or permit to be signed and executed by the
Bondholders, may be in any number of concurrent instruments of similar
tenor, and may be signed or executed by such Bondholders in person or by
attorney appointed in writing. Proof of the execution of any such Request
or other instrument, or of a writing appointing any such attorney, or of
the holding by any person of the Bonds or coupons appertaining thereto, may
be accepted by the Company or by the Trustee, as sufficient for any purpose
of this Indenture if made in the following manner:
(a) The fact and date of the execution by any person of such
Request or other instrument or writing may be proved by the cer-
tificate under his official seal of any notary public, or other
officer authorized to take acknowledgments of deeds to be recorded in
the jurisdiction wherein he purports to act, that the person signing
such Request or other instrument acknowledged to him the execution
thereof, or by an affidavit of a witness of such execution;
(b) The amount of Bonds transferable by delivery held by any
person executing such Request or other instrument as a Bondholder,
and the series and serial numbers thereof held by such person and the
date of his holding the same, may be proven by a certificate executed
by any trust company, bank, banker, or other depositary wherever
situated, if such certificate shall be deemed by the Trustee to be
satisfactory, showing that at the date therein mentioned such person
had on deposit with such depositary the Bonds described in such
certificate, and such holding may be deemed by the Trustee and the
Company to continue until written notice to the contrary is served
upon the Trustee. The Company and the Trustee may nevertheless in
their separate discretion require further proof in cases where they
deem further proof desirable. The ownership of registered Bonds
(whether fully registered, or registered as to principal only) shall
be proved by the registry books.
Any Request, Notice, consent or vote of the holder of any Bond shall
bind all future holders of the same Bond or any Bond or Bonds issued in
lieu thereof, in respect of anything done or suffered by the Company or by
the Trustee in pursuance thereof or in reliance thereon.
ARTICLE XI.
Immunity of Incorporators, Stockholders, Officers and Directors
11.01 No recourse under or upon any obligation, covenant, or
agreement contained in this Indenture, or in any Bond or coupon hereby
secured, for the payment of the principal of, premium, if any, or interest
on, any of the Bonds hereby secured, or for any claim based thereon, or
otherwise in any manner in respect thereof, shall be had against any
incorporator, stockholder, subscriber to capital stock, officer, or
director, as such, former, present, or future, of the Company, or of any
successor corporation, either directly, or indirectly through the Company
or any predecessor or successor corporation or the Trustee by the
enforcement of any assessment or by any legal or equitable proceeding by
virtue of any constitution, statute, or otherwise (including without
limiting the generality of the foregoing, any proceeding to enforce any
claimed liability of stockholders of the Company, based upon any theory
that the Company was acting as the agent or instrumentality of the stock-
holders); it being expressly agreed and understood that this Indenture, and
the obligations hereby secured, are solely corporate obligations, and that
no personal liability whatever shall attach to, or be incurred by, the
incorporators, stockholders, subscribers to capital stock, officers, or
directors, as such, of the Company, or of any successor corporation, or any
of them, on account of the indebtedness hereby authorized, or under or by
reason of any of the obligations, covenants, or agreements contained in
this Indenture or in any of the Bonds or coupons hereby secured, or implied
therefrom, and that any and all such personal liability of every name and
nature, and any and all such rights and claims against every such
incorporator, stockholder, subscriber to capital stock, officer, or
director, as such, whether arising at common law or in equity, or created
by constitution, statute, contract of subscription, or otherwise, are
expressly released and waived as a condition of, and as part of the
consideration for, the execution of this Indenture and the issue of the
Bonds and interest obligations secured hereby.
ARTICLE XII.
Bondholders' Lists and Reports by the Company and the Trustee
12.01 The Company covenants and agrees that it will furnish or
cause to be furnished to the Trustee not less than forty-five (45) nor more
than sixty (60) days after each interest payment date on Bonds of each
series from time to time Outstanding, and at such other times as the
Trustee may request in writing, a list in such form as the Trustee may
reasonably require containing all the information in the possession or
control of the Company or of any of its paying agents other than the
Trustee, as to the names and addresses of the holders of Bonds of the
series on which interest was payable not less than forty-five (45) nor more
than sixty (60) days prior to such filing obtained since the date as of
which the next previous list, if any, relating to Bonds of that series was
furnished. Any such list may be dated as of a date not more than fifteen
(15) days prior to the time such information is furnished or caused to be
furnished, and need not include information received after such date.
12.02
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses
of the holders of Bonds (1) contained in the most recent list
furnished to it as provided in 12.01, (2) received by it in the
capacity of paying agent hereunder if and when acting in such
capacity, and (3) filed with it within the two (2) preceding years
pursuant to the provisions of paragraph (2) of subsection (c) of
12.04. The Trustee may (1) destroy any list furnished to it as
provided in 12.01 upon receipt of a new list so furnished;
(2) destroy any information received by it as paying agent for any
series of Bonds upon delivering to itself as Trustee, not earlier
than forty-five (45) days after an interest payment date of the Bonds
of such series, a list containing the names and addresses of the
holders of Bonds obtained from such information since the delivery of
the next previous list, if any, with respect to such series;
(3) destroy any list delivered to itself as Trustee which was
compiled from information received by it as such paying agent upon
the receipt of a new list so delivered with respect to the same
series; and (4) destroy any information received by it pursuant to
the provisions of paragraph (2) of subsection (c) of 12.04, but not
until two (2) years after such information has been filed with it.
(b) In case three or more holders of Bonds (hereinafter in this
subsection referred to as "applicants") apply in writing to the
Trustee, and furnish to the Trustee reasonable proof that each such
applicant has owned one or more Bonds for a period of at least six
(6) months preceding the date of such application, and such
application states that the applicants desire to communicate with
other holders of Bonds with respect to their rights under this
Indenture or under the Bonds, and is accompanied by a copy of the
form of proxy or other communication which such applicants propose to
transmit, then the Trustee shall, within five (5) business days after
the receipt of such application, at its election either
(1) afford to such applicants access to the information
preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section; or
(2) inform such applicants as to the approximate number of
holders of Bonds whose names and addresses appear in the infor-
mation preserved at the time by the Trustee, in accordance with
the provisions of subsection (a) of this Section, and as to the
approximate cost of mailing to such Bondholders the form of
proxy or other communication, if any, specified in such
application.
If the Trustee shall elect not to afford to such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each Bondholder whose name and address appear in
the information preserved at the time by the Trustee in accordance
with the provisions of subsection (a) of this Section, a copy of the
form of proxy or other communication which is specified in such
request, with reasonable promptness after a tender to the Trustee of
the material to be mailed and of payment or provision for the payment
of the reasonable expenses of mailing, unless within five (5) days
after such tender the Trustee shall mail to such applicants and file
with the Securities and Exchange Commission, together with a copy of
the material to be mailed, a written statement to the effect that, in
the opinion of the Trustee, such mailing would be contrary to the
best interests of the holders of Bonds, or would be in violation of
applicable law. Such written statement shall specify the basis of
such opinion. If said Commission, after opportunity for a hearing
upon the objections specified in the written statement so filed,
shall enter an order refusing to sustain any of such objections or
if, after the entry of an order sustaining one or more of such
objections, said Commission shall find, after notice and opportunity
for a hearing, that all objections so sustained have been met and
shall enter an order so declaring, the Trustee shall mail copies of
such material to all such Bondholders with reasonable promptness
after the entry of such order and the renewal of such tender;
otherwise the Trustee shall be relieved of any obligation or duty to
such applicants respecting their application.
(c) The Trustee shall not be held accountable by reason of the
mailing of any material pursuant to any request made under subsection
(b) of this Section or the disclosure of any information as to the
names and addresses of the holders of Bonds in accordance with the
provisions of said subsection (b), regardless of the source from
which such information was derived.
12.03 The Company covenants and agrees
(1) to file with the Trustee, within fifteen (15) days after the
Company is required to file the same with the Securities and Exchange
Commission, copies of the annual reports and of the information,
documents, and other reports (or copies of such portions of any of
the foregoing as such Commission may from time to time by rules and
regulations prescribe) which the Company may be required to file with
such Commission pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934; or, if the Company is not required
to file information, documents, or reports pursuant to either of such
Sections, then to file with the Trustee and the Securities and
Exchange Commission, in accordance with such rules and regulations as
may be prescribed from time to time by said Commission, such of the
supplementary and periodic information, documents, and reports which
may be required pursuant to Section 13 of the Securities Exchange Act
of 1934 in respect of a security listed and registered on a national
securities exchange as may be prescribed from time to time by such
rules and regulations;
(2) to file with the Trustee and the Securities and Exchange
Commission, in accordance with the rules and regulations prescribed
from time to time by said Commission, such additional information,
documents, and reports with respect to compliance by the Company with
the conditions and covenants provided for in this Indenture as may be
required from time to time by such rules and regulations; and
(3) to transmit to the holders of Bonds in the manner and to the
extent provided in subsection (c) of 12.04 with respect to reports
pursuant to subsection (a) of 12.04, such summaries of any
information, documents, and reports required to be filed by the
Company pursuant to subsections (1) and (2) of this Section as may be
required by the rules and regulations prescribed from time to time by
the Securities and Exchange Commission.
12.04
(a) The Trustee shall transmit within sixty (60) days after
May 15 in each year beginning with the year 1955, to the Bondholders
as hereinafter in this Section provided, a brief report dated as of
such May 15 with respect to
(1) its eligibility and qualifications under 4.03(a), 13.01
and 13.14 or in lieu thereof, if to the best of its knowledge
the Trustee has continued to be eligible and qualified under
such Sections, a written statement to such effect;
(2) the character and amount of any advances (and if the
Trustee elects so to state, the circumstances surrounding the
making thereof) made by the Trustee as such which remain unpaid
on the date of such report, and for the reimbursement of which
the Trustee claims or may claim a lien or charge prior to that
of the Bonds on the Mortgaged Property or on property or funds
held or collected by it as Trustee, except that the Trustee
shall not be required (but may elect) to state such advances if
such advances so remaining unpaid aggregate not more than
one-half of one percentum (1/2%) of the principal amount of the
Bonds outstanding on the date of such report;
(3) the amount, interest rate, and maturity date of all
other indebtedness owing by the Company or any other Obligor on
the Bonds to the Trustee in its individual capacity on the date
of such report, with a brief description of any property held as
collateral security therefor, except an indebtedness based upon
a creditor relationship arising in any manner described in
subparagraphs (2), (3), (4) or (6) of subsection (b) of 13.15;
(4) the property and funds physically in the possession of
the Trustee, as such, or of a depositary for the Trustee, on the
date of such report;
(5) any release, or release and substitution, of property
subject to the lien of this Indenture (and the consideration
therefor, if any) which it has not previously reported;
provided, however, that to the extent that the aggregate value
as shown by the release papers of any or all of such released
properties does not exceed an amount equal to one percentum (1%)
of the aggregate principal amount of Bonds then outstanding, the
report need only indicate the number of such releases, the total
value of property released as shown by the release papers, the
aggregate amount of cash and obligations secured by purchase
money mortgages received and the aggregate value of property
received in substitution therefor as shown by the release
papers;
(6) any additional issue of Bonds which it has not
previously reported; and
(7) any action taken by the Trustee in the performance of
its duties under this Indenture which it has not previously
reported and which in its opinion materially affect the Bonds or
the Mortgaged Property, except action in respect of a default
notice of which has been or is to be withheld by it in
accordance with the provisions of 9.02.
(b) The Trustee shall transmit to the Bondholders as hereinafter
provided, within ninety (90) days after the making of any release,
release and substitution, or advance as hereinafter specified, a
brief report with respect to
(1) the release, or release and substitution of property
subject to the Lien of this Indenture (and the consideration
therefor, if any) unless the Fair Value of such property, as set
forth in the certificates or opinions required by 7.03, 7.04, or
7.05, is less than ten percentum (10%) of the principal amount
of Bonds outstanding at the time of such release, or release and
substitution; and
(2) the character and amount of any advances (and if the
Trustee elects so to state, the circumstances surrounding the
making thereof) made by the Trustee, as such, since the date of
the last report transmitted pursuant to the provisions of
subsection (a) of this Section (or if no such report has yet
been so transmitted, since the date of execution of this
Indenture), for the reimbursement of which the Trustee claims or
may claim a lien or charge prior to that of the Bonds on the
Mortgaged Property or on property or funds held or collected by
it as Trustee, and which it has not previously reported pursuant
to this paragraph, except that the Trustee shall not be required
(but may elect) to report such advances if such advances
remaining unpaid at any time aggregate not more than ten
percentum (10%) of the principal amount of Bonds outstanding at
such time.
(c) Reports pursuant to this Section shall be transmitted by
mail
(1) to all registered holders of Bonds, as the names and
addresses of such holders appear upon the registration books of
the Company;
(2) to such holders of Bonds as have, within two (2) years
preceding such transmission, filed their names and addresses
with the Trustee for that purpose; and
(3) except in the case of reports pursuant to subsection
(b) of this Section, to each Bondholder whose name and address
is preserved at the time by the Trustee as provided in
subsection (a) of 12.02.
(d) At the time of the transmission to the Bondholders of any
report pursuant to this Section, a copy of such report shall be filed
by the Trustee with each securities exchange upon which the Bonds are
listed, and also with the Securities and Exchange Commission and with
the Company. The Company covenants that it will immediately notify
the Trustee of the name and address of each securities exchange upon
which the Bonds of any series shall be listed.
(e) For the purposes of this Section all Bonds which have been
certified and delivered and not returned to the Trustee and Cancelled
shall be deemed to be Outstanding.
ARTICLE XIII.
Concerning the Trustee and Its Paying Agents
13.01 The Trustee shall at all times be a bank or trust company
eligible under 4.03(a) and having a combined capital and surplus of at
least five million dollars ($5,000,000). If the Trustee publishes reports
of condition at least annually, pursuant to law or to the requirements of
any supervising or examining authority referred to in 4.03(a), then for the
purposes of this Section the combined capital and surplus of the Trustee
shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published. No bond shall be required of
the Trustee unless ordered by a court having jurisdiction and for cause
shown.
13.02 The Trustee hereby accepts the trust hereby created. The
Trustee undertakes, prior to an event of default as defined in 9.01 and
after all events of default which may have occurred shall have ceased to be
continuing or shall have been waived, to perform such duties and only such
duties as are specifically set forth in this Indenture, and after and
during the continuance of such an event of default which shall not have
been waived, to exercise such of the rights and powers vested in it by this
Indenture and to use the same degree of care and skill in their exercise as
a prudent man would exercise or use under the circumstances in the conduct
of his own affairs.
For the purposes of this 13.02 and of 13.03, a default shall be
deemed to have ceased to be continuing when the act or omission or other
event giving rise to such default shall have been cured, remedied or
terminated. If a default is waived as provided in 9.01 such default shall
be deemed to have been cured.
The Trustee, upon receipt of evidence furnished to it by or on behalf
of the Company pursuant to any provision of this Indenture, shall examine
the same to determine whether or not such evidence conforms to the
requirements of this Indenture.
13.03 No provision of this Indenture shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act, or its own wilful misconduct, except that
(a) prior to the occurrence of an event of default hereunder and
after all events of default which may have occurred shall have ceased
to be continuing or shall have been waived the Trustee shall not be
liable except for the performance of such duties as are specifically
set forth in this Indenture, and no implied covenants or obligations
shall be read into this Indenture against the Trustee, but the duties
and obligations of the Trustee, prior to the occurrence of an event
of default and after all events of default which may have occurred
shall have ceased to be continuing or shall have been waived, shall
be determined solely by the express provisions of this Indenture;
(b) prior to the occurrence of an event of default hereunder and
after all events of default which may have occurred shall have ceased
to be continuing or shall have been waived, and in the absence of bad
faith on the part of the Trustee, the Trustee may conclusively rely
as to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions conforming to the
requirements of this Indenture; but in the case of any such
certificate or opinion which by any provision hereof is specifically
required to be furnished to the Trustee, the Trustee shall be under a
duty to examine the same to determine whether or not it conforms to
the requirements of this Indenture;
(c) the Trustee shall not be personally liable for any error of
judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(d) the Trustee shall not be personally liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the holders of not less than a
majority in aggregate principal amount of the Bonds at the time
Outstanding (excluding Company-owned Bonds) relating to the time,
method, and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred
upon the Trustee under this Indenture.
13.04 The recitals of fact contained herein and in the Bonds
(other than the Trustee's certification) shall be taken as the statements
of the Company, and the Trustee assumes no responsibility for the
correctness of the same. The Trustee makes no representations as to the
value of the Mortgaged Property or any part thereof, or as to the title of
the Company thereto, or as to the validity or adequacy of the security
afforded thereby and by this Indenture, or as to the validity of this
Indenture or of the Bonds or coupons issued hereunder. The Trustee shall
be under no responsibility or duty with respect to the making, executing,
acknowledging, recording, or filing hereof, or of any Supplemental
Indenture as a mortgage or conveyance of real or personal property, or the
transfer of any property acquired by the Company after the date of the
recording of these presents, or with respect to the disposition by the
Company of any Bonds certified and delivered hereunder or the application
of the proceeds thereof or the applications of any moneys paid to the
Company under any of the provisions hereof.
13.05 Subject to the provisions of 13.02 and 13.03 the Trustee
shall not be personally liable in case of entry by it upon the Mortgaged
Property for debts contracted or liability or damages incurred in the
management or operation of said property.
13.06 To the extent permitted by 13.02 and 13.03:
(1) The Trustee may rely and shall be protected in acting upon
any resolution, certificate, opinion, notice, request, consent,
order, appraisal, report, Bond, or other paper or document believed
by it to be genuine and to have been signed or presented by the
proper party or parties;
(2) The Trustee may consult with counsel, who may be of counsel
to the Company, and the opinion of such counsel shall be fall and
complete authorization and protection in respect of any action taken
or suffered by it hereunder in good faith and in accordance with the
opinion of such counsel; and
(3) The Trustee shall not be liable for any action taken by it
in good faith and believed by it to be authorized or within the
discretion or power conferred upon it by this Indenture.
13.07 The Trustee shall not be under any responsibility for the
selection, appointment, or approval of any engineer, accountant, or other
expert for any of the purposes expressed in this Indenture, except that
nothing in this Section contained shall relieve the Trustee of its
obligation to exercise reasonable care with respect to the selection,
appointment, or approval of independent experts who may furnish opinions or
certificates to the Trustee pursuant to any provision of this Indenture.
Nothing contained in this Section shall be deemed to modify the
obligation of the Trustee to exercise after the occurrence of an event of
default the rights and powers vested in it by this Indenture with the
degree of care and skill specified in 13.02.
None of the provisions in this Indenture contained shall require the
Trustee to advance or expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if there is reasonable ground
for believing that the repayment of such funds or liability is not
reasonably assured to it by the security afforded to it by the terms of
this Indenture.
13.08 Subject to the provisions of 13.14 and 13.15 the Trustee or
any paying agent in its individual or any other capacity may become the
owner or pledgee of Bonds or coupons with the same rights it would have if
it were not Trustee or paying agent.
13.09 Subject to the provisions of 15.02, all moneys received by
the Trustee, whether as Trustee or paying agent, shall, until used or
applied as herein provided, be held in trust for the purposes for which
they were received, but need not be segregated from other funds except to
the extent required by law and all such moneys, other than those described
in 8.01, shall be held by the Trustee, until so used or applied, as a part
of the Mortgaged Property. The Trustee may allow and credit to the Company
interest on any moneys received by it hereunder at such rate, if any, as
may be agreed upon with the Company from time to time and as may be
permitted by law. After compliance with any applicable legal requirement,
the Trustee may deposit all or any part of such moneys (including moneys
described in 8.01) on a certificate of deposit or otherwise to its credit
as Trustee hereunder, in its own banking department, or in any bank or
trust company approved by the Trustee having a capital, surplus, and un-
divided profits of not less than five million (5,000,000) dollars, or the
Trustee, after such compliance, may so deposit such moneys, together with
moneys of like nature held by it under other indentures or trust
instruments, to its credit as trustee of all moneys deposited in each such
account, respectively.
13.10 The Company covenants and agrees to pay to the Trustee from
time to time, and the Trustee shall be entitled to, reasonable compensation
for all services rendered by it in the execution of the trusts hereby
created and in the exercise and performance of any of the powers and duties
hereunder of the Trustee, which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust, and the Company will reimburse the Trustee for all advances made by
the Trustee and will pay to the Trustee from time to time its expenses and
disbursements, including the reasonable compensation and the expenses and
disbursements of its counsel and of all persons not regularly in its
employ, incurred without negligence or bad faith. The Company also
covenants to indemnify the Trustee for, and to hold it harmless against,
any loss, liability, or expense incurred without negligence or bad faith on
the part of the Trustee, arising out of or in connection with the
acceptance or administration of this trust, including the costs and
expenses of defending against any claim of liability in the premises. The
Company further covenants and agrees to pay interest to the Trustee at the
rate of four percentum (4%) per annum upon all amounts paid, advanced, or
disbursed by the Trustee for which it is entitled to reimbursement or
indemnity as herein provided. The obligations of the Company to the
Trustee under this Section shall constitute additional indebtedness secured
hereby. For the performance of the obligations of the Company under this
Section, the Trustee shall have (in addition to any other rights under this
Indenture) a lien prior to the Bonds on the Mortgaged Property, including
all property or funds held or collected by the Trustee, as such, except
funds held in trust for the benefit of the holders of particular Bonds or
coupons.
In order to further assure the Trustee that it will be compensated,
reimbursed, and indemnified as provided in this Section and that the prior
lien provided for in this Section upon the trust estate to secure the
payment of such compensation, reimbursement, and indemnity will be enforced
for the benefit of the Trustee, all parties to this Indenture agree, and
each holder or owner of any Bond by his acceptance thereof shall be deemed
to have agreed that in the event of
(1) the adjudication of the Company as a bankrupt by any court
of competent jurisdiction,
(2) the filing of any petition seeking the reorganization of the
Company under the Federal Bankruptcy Laws or any other applicable law
or statute of the United States of America or of any State thereof,
(3) the appointment of one or more trustees or receivers of all
or substantially all the property of the Company,
(4) the filing of any bill to foreclose this Indenture,
(5) the filing by the Company of a petition to take advantage of
any insolvency act, or
(6) the institution of any other proceeding wherein it shall
become necessary or desirable to file or present claims against the
Company,
the Trustee may file from time to time in any such proceeding or
proceedings one or more claims, supplemental claims, and amended claims as
a secured creditor for its reasonable compensation for all services
rendered by it (including services rendered during the course of any such
proceeding or proceedings) and for reimbursement for all advances,
expenses, and disbursements (including the reasonable compensation and the
expenses and disbursements of its counsel and of all persons not regularly
in its employ) made or incurred by it in the execution of the trusts hereby
created and in the exercise and performance of any of the powers and duties
herein of the Trustee, and for any and all amounts to which the Trustee is
entitled as indemnity as provided in this Section; and the Trustee and its
counsel and agents may file in any such proceeding or proceedings
applications or petitions for compensation for such services rendered, for
reimbursement for such advances, expenses, and disbursements, and for such
indemnity. The claim or claims of the Trustee filed in any such proceeding
or proceedings shall be reduced by the amount of compensation for services,
reimbursement for advances, expenses, and disbursements, and indemnity paid
to it following final allowance to it and to its counsel and agents by the
court in any such proceeding as an expense of administration or in
connection with a plan of reorganization or readjustment. To the extent
that compensation, reimbursement, and indemnity are denied to the Trustee
or to its counsel or other agents because of not being rendered or incurred
in connection with the Administration of an estate in a proceeding or in
connection with a plan of reorganization or readjustment, approved as
required by law, because such services were not rendered in the interests
of and with benefit to the estate of the Company as a whole but in the
interests of and with benefit to the holders of the Bonds, in the execution
of the trusts hereby created or in the exercise and performance of any of
the powers and duties hereunder of the Trustee or because of any other
reason, the court may to the extent permitted by law allow such claim, as
supplemented and amended, in any such proceeding or proceedings and for the
purposes of any plan of reorganization or readjustment of the Company's
obligations, classify the Trustee as a secured creditor of a class separate
and distinct from that of other creditors and of a class having priority
and precedence over the class in which the holders of Bonds are placed by
reason of having a lien, prior and superior to that of the holders of the
Bonds, upon the trust estate, including all property or funds held or
collected by the Trustee as such. The amount of the claim or claims of the
Trustee for service rendered and for advances, expenses, and disbursements,
including the reasonable compensation and the expenses and disbursements of
its counsel and of all persons not regularly in its employ which are not
allowed and paid in any such proceeding, but for which the Trustee is
entitled to the allowance of a secured claim as herein provided, may be
fixed by the court or judge in any such proceeding or proceedings to the
extent that such court or judge has or exercises jurisdiction over the
amount of any such claim or claims.
13.11 If, and to the extent that the Trustee and its counsel and
other persons not regularly in its employ do not receive compensation for
services rendered, reimbursement of its or their advances, expenses, and
disbursements, or indemnity, as herein provided, as the result of
allowances made in any reorganization, bankruptcy, receivership,
liquidation, or other proceeding or by any plan of reorganization or
readjustment of obligations of the Company, the Trustee shall be entitled,
to the extent permitted by law in priority to the holders of the Bonds, to
receive any distributions of any securities, dividends, or other
disbursements which would otherwise be made to the holders of Bonds in any
such proceeding or proceedings and the Trustee is hereby constituted and
appointed, irrevocably, the attorney in fact for the holders of the Bonds
and each of them to collect and receive, in their name, place, and stead,
such distributions, dividends, or other disbursements, to deduct therefrom
the amounts due to the Trustee, its counsel, and other persons not
regularly in its employ on account of services rendered, advances,
expenses, and disbursements made or incurred, or indemnity, and to pay and
distribute the balance, pro rata, except as provided in 2.14 and 4.02
hereof to the holders of the Bonds. The Trustee shall have a lien upon any
securities or other considerations to which the holders of Bonds may become
entitled pursuant to any such plan of reorganization or readjustment of
obligations, or in any such proceeding or proceedings; and the court or
judge in any such proceeding or proceedings may determine the terms and
conditions under which any such lien shall exist and be enforced.
13.12 Whenever in the administration of the trusts of this In-
denture, prior to the occurrence of an event of default hereunder and after
all events of default which may have occurred shall have ceased to be
continuing or shall have been waived, the Trustee shall deem it necessary
or desirable that a matter be proved or established prior to taking or
suffering any action hereunder, each matter (unless other evidence in
respect thereof be herein specifically prescribed) may to the extent
permitted by 13.02 and 13.03 hereof be deemed to be conclusively proved and
established by an Officers' Certificate and such Certificate shall be full
warrant to the Trustee for any action taken or suffered by it under the
provisions of this Indenture upon the faith thereof.
13.13 Whenever it is provided in this Indenture that the Trustee
shall take any action upon the happening of a specified event or upon the
fulfillment of any condition or upon the request of the Company or of
Bondholders, the Trustee in taking such action shall have full power to
give any and all notices and to do any and all acts and things incidental
to such action.
13.14
(a) If the Trustee has or acquires any conflicting interest, as
defined by subsection (d) of this Section, the Trustee shall within
ninety (90) days after ascertaining that it has such conflicting
interest, either eliminate such conflicting interest or resign by
giving written notice to the Company, but such resignation shall not
become effective until the appointment of a successor trustee and
such successor's acceptance of such appointment. The Company
covenants to take prompt steps to have a successor appointed in the
manner hereinafter provided in 13.18. Upon giving such notice of
resignation, the resigning Trustee shall give Published Notice
thereof, once in each of three (3) successive calendar weeks, in each
case on any business day of the week. If the resigning Trustee fails
to give such Published Notice within ten (10) days after giving
written notice of its resignation to the Company, the Company shall
give such Published Notice.
(b) In the event that the Trustee shall fail to comply with the
provisions of the preceding subsection (a) of this Section, it shall
within ten (10) days after the expiration of such ninety (90) day
period transmit notice of such failure to the Bondholders, in the
manner and to the extent provided in subsection (c) of 12.04 with
respect to reports pursuant to subsection (a) of 12.04.
(c) Subject to the provisions of 17.04 any Bondholder who has
been a bona fide holder of a Bond or Bonds for at least six (6)
months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor if the Trustee fails,
after written request therefor by such holder, to comply with the
provisions of subsection (a) of this Section.
(d) For the purposes of this Section, the Trustee shall be
deemed to have a conflicting interest if
(1) the Trustee is trustee under another indenture under
which any other securities, or certificates of interest or
participation in any other securities, of the Company, are
outstanding, unless such other indenture is a collateral trust
indenture under which the only collateral consists of Bonds
issued under this Indenture; provided that there shall be
excluded from the operation of this paragraph any other
indenture or indentures under which other securities, or
certificates of interest or participation in other securities,
of the Company are outstanding, if the Company pursuant to
Section 310(b) of the Trust Indenture Act of 1939, shall have
sustained the burden of proving, on application to the Securi-
ties and Exchange Commission and after opportunity for hearing
thereon, that the trusteeship under this Indenture and such
other indenture is not so likely to involve a material conflict
of interest as to make it necessary in the public interest or
for the protection of investors to disqualify the Trustee from
acting as such under one of such indentures;
(2) the Trustee or any of its directors or executive
officers is an Obligor upon the Bonds or an underwriter for the
Company;
(3) the Trustee directly or indirectly controls or is
directly or indirectly controlled by or is under direct or
indirect common control with the Company or an underwriter for
the Company;
(4) the Trustee or any of its directors or executive
officers is a director, officer, partner, employee, appointee,
or representative of the Company, or of an underwriter (other
than the Trustee itself) for the Company, who is currently
engaged in the business of underwriting, except that (A) one
individual may be a director and/or an executive officer of the
Trustee and a director and/or an executive officer of the
Company, but may not be at the same time an executive officer of
both the Trustee and the Company; (B) if and so long as the
number of directors of the Trustee in office is more than nine
(9), one additional individual may be a director and/or an
executive officer of the Trustee and a director of the Company;
and (C) the Trustee may be designated by the Company, or by any
underwriter for the Company, to act in the capacity of transfer
agent, registrar, custodian, paying agent, fiscal agent, escrow
agent or depositary or in any other similar capacity, or subject
to the provisions of paragraph (1) of this subsection (d), to
act as trustee, whether under an indenture or otherwise;
(5) ten percentum (10%) or more of the voting securities of
the Trustee is beneficially owned either by the Company or by
any director, partner, or executive officer thereof, or twenty
percentum (20%) or more of such voting securities is
beneficially owned, collectively, by any two or more of such
persons; or ten percentum (10%) or more of the voting securities
of the Trustee is beneficially owned either by an underwriter
for the Company or by any director, partner, or executive
officer thereof, or is beneficially owned, collectively, by any
two or more such persons;
(6) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default as in
this subsection (d) defined, (A) five percentum (5%) or more of
the voting securities, or ten percentum (10%) or more of any
other class of security, of the Company, not including the Bonds
issued under this Indenture and securities issued under any
other indenture under which the Trustee is also trustee, or
(B) ten percentum (10%) or more of any class of security of an
underwriter for the Company;
(7) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default as in
this subsection (d) defined, five percentum (5%) or more of the
voting securities of any Person who, to the knowledge of the
Trustee, owns ten percentum (10%) or more of the voting
securities of, or controls directly or indirectly or is under
direct or indirect common control with, the Company;
(8) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default as in
this subsection (d) defined, ten percentum (10%) or more of any
class of security of any Person who, to the knowledge of the
Trustee, owns fifty percentum (50%) or more of the voting
securities of the Company; or
(9) the Trustee owns, on May 15 in any calendar year in the
capacity of executor, administrator, testamentary or inter vivos
trustee, guardian, committee or conservator, or in any other
similar capacity, an aggregate of twenty-five percentum (25%) or
more of the voting securities, or of any class of security, of
any Person, the beneficial ownership of a specified percentage
of which would have constituted a conflicting interest under
paragraphs (6), (7) or (8) of this subsection (d). As to any
such securities of which the Trustee acquired ownership through
becoming executor, administrator, or testamentary trustee of an
estate which included them, the provisions of the preceding
sentence shall not apply for a period of two (2) years from the
date of such acquisition, to the extent that such securities
included in such estate do not exceed twenty-five percentum
(25%) of such voting securities or twenty-five percentum (25) of
any such class of security. Promptly after May 15, in each
calendar year, the Trustee shall make a check of its holdings of
such securities in any of the above-mentioned capacities as of
May 15. If the Company fails to make payment in full of
principal or interest upon the Bonds when and as the same become
due and payable, and such failure continues for thirty (30) days
thereafter, the Trustee shall make a prompt check of its
holdings of such securities in any of the above-mentioned
capacities as of the date of the expiration of such thirty day
period, and after such date, notwithstanding the foregoing
provisions of this paragraph, all such securities so held by the
Trustee, with sole or joint control of such securities vested in
it, shall, but only so long as such failure shall continue, be
considered as though beneficially owned by the Trustee for the
purposes of paragraphs (6), (7) and (8) of this subsection (d)
The specifications of percentages in paragraphs (5) to (9), in-
clusive, of this subsection (d) shall not be construed as indicating
that the ownership of such percentages of the securities of a person
is or is not necessary or sufficient to constitute direct or indirect
control for the purpose of paragraph (3) or (7) of this
subsection (d).
For the purposes of paragraphs (6), (7), (8) and (9) of this
subsection (d) only, (A) the terms "security" and "securities" shall
include only such securities as are generally known as corporate
securities, but shall not include any note or other evidence of
indebtedness issued to evidence an obligation to repay moneys lent to
a person by one or more banks, trust companies, or banking firms, or
any certificate of interest or participation in any such note or
evidence of indebtedness; (B) an obligation shall be deemed to be in
default when a default in payment of principal shall have continued
for thirty (30) days or more and shall not have been cured; and (C)
the Trustee shall not be deemed to be the owner or holder of (i) any
security which it holds as collateral security (as trustee or
otherwise) for an obligation which is not in default as above
defined, or (ii) any security which it holds as collateral security
under this Indenture, irrespective of any default hereunder, or (iii)
any security which it holds as agent for collection, or as custodian,
escrow agent, or depositary, or in any similar representative
capacity.
The percentages of voting securities and other securities
specified in this subsection (d) shall be calculated in accordance
with the following provisions:
(a) A specified percentage of the voting securities of the
Trustee, the Company or any other Person referred to in this Section
(each of whom is referred to as a "person" in this paragraph and in
the following paragraph) means such amount of the outstanding voting
securities of such person as entitles the holder or holders thereof
to cast such specified percentage of the aggregate votes which the
holders of all the outstanding voting securities of such person as
entitles to cast in the direction or management of the affairs of
such person.
(b) specified percentage of a class of securities of a person
means such percentage of the aggregate amount of securities of the
class outstanding
(c) The term "amount", when used in regard to securities, means
the principal amount if relating to evidences of indebtedness, the
number of shares if relating to capital shares, and the number of
units, if relating to any other kind of security.
(d) The term "outstanding" means issued and not held by or for
the account of the issuer. The following securities shall not be
deemed outstanding within the meaning of this definition:
(1) Securities of an issuer held in a sinking fund relating
to securities of the issuer of the same class;
(2) Securities of an issuer held in a sinking fund relating
to another class of securities of the issuer, if the obligation
evidenced by such other class of securities is not in default as
to principal or interest or otherwise;
(3) Securities pledged by the issuer thereof as security
for an obligation of the issuer not in default as to principal
or interest or otherwise;
(4) Securities held in escrow if placed in escrow by the
issuer thereof;
provided, however, that any voting securities of an issuer shall be
deemed outstanding if any person other than the issuer is entitled to
exercise the voting rights thereof.
(e) A security shall be deemed to be of the same class as
another security if both securities confer upon the holder or holders
thereof substantially the same rights and privileges, provided,
however, that, in the case of secured evidences of indebtedness, all
of which are issued under a single indenture, differences in the
interest rates or maturity dates of various series thereof shall not
be deemed sufficient to constitute such series different classes, and
provided further, that, in the case of unsecured evidences of
indebtedness, differences in the interest rates or maturity dates
thereof shall not be deemed sufficient to constitute them securities
of different classes, whether or not they are issued under a single
indenture.
For the purposes of this Section, the term "voting security" means
any security presently entitling the owner or holder thereof to vote in the
direction or management of the affairs of a person, or any security issued
under or pursuant to any trust, agreement, or arrangement whereby a trustee
or trustees or agent or agents for the owner or holder of such security are
presently entitled to vote in the direction or management of the affairs of
a person; the term "director" means any director of a corporation, or any
individual performing similar functions with respect to any organization
whether incorporated or unincorporated; the term "executive officer" means
the president, every vice president, every trust officer, the cashier, the
secretary, and the treasurer of a corporation, and any individual
customarily performing similar functions with respect to any organization
whether incorporated or unincorporated, but shall not include the chairman
of the board of directors; the term "underwriter" when used with reference
to the Company means every person who, within three (3) years prior to the
time as of which the determination is made, has purchased from the Company
with a view to, or has sold for the Company in connection with, the
distribution of any security of the Company outstanding at such time, or
has participated or has had a direct or indirect participation in any such
undertaking, or has participated or has had a participation in the direct
or indirect underwriting of any such undertaking, but such term shall not
include a person whose interest was limited to a commission from an
underwriter or dealer not in excess of the usual and customary
distributors' or sellers' commission; and the term "the Company" shall
include any Obligor upon the Bonds.
13.15 (a) Subject to the provisions of subsection (b) of this
Section, if the Trustee shall be or shall become a creditor, directly or
indirectly, secured or unsecured, of the Company within four (4) months
prior to a default (as defined in the last paragraph of this subsection),
or subsequent to such a default, then, unless and until such default shall
be cured, the Trustee shall set apart and hold in a special account for the
benefit of the Trustee individually, the Bondholders, and the holders of
other indenture securities (as defined in the last paragraph of this
subsection)
(1) an amount equal to any and all reductions in the amount due
and owing upon any claim as such creditor in respect of principal or
interest, effected after the beginning of such four months' period
and valid as against the Company and its other creditors, except any
such reduction resulting from the receipt or disposition of any
property described in paragraph (2) of this subsection (a), or from
the exercise of any right of set-off which the Trustee could have
exercised if a petition in bankruptcy had been filed by or against
the Company upon the date of such default; and
(2) all property received by the Trustee in respect of any claim
as such creditor, either as security therefor, or in satisfaction or
composition thereof, or otherwise, after the beginning of such four
(4) months' period, or an amount equal to the proceeds of any such
property, if disposed of, subject, however, to the rights, if any, of
the Company and its other creditors in such property or such
proceeds.
Nothing herein contained, however, shall affect the right of the Trustee
(A) to retain for its or his own account (i) payments made on
account of any such claim by any person (other than the Company) who
is liable thereon, and (ii) the proceeds of the bona fide sale of any
such claim by the Trustee to a third person, and (iii) distributions
made in cash, securities, or other Property in respect of claims
filed against the Company in bankruptcy or receivership or in
proceedings for reorganization pursuant to the Bankruptcy Act or
applicable State law;
(B) to realize, for its own account, upon any property held by
it as security for any such claim, if such property was so held prior
to the beginning of such four (4) months' period;
(C) to realize, for its own account, but only to the extent of
the claim hereinafter mentioned, upon any property held by it as
security for any such claim, if such claim was created after the
beginning of such four (4) months' period and such property was
received as security therefor simultaneously with the creation
thereof, and if the Trustee shall sustain the burden of proving that
at the time such property was so received the Trustee had no
reasonable cause to believe that a default as defined in the last
paragraph of this subsection (a) would occur within four (4) months;
or
(D) to receive payment on any claim referred to in paragraph (B)
or (C) of this subsection (a) against the release of any property
held as security for such claim as provided in paragraph (B) or (C),
as the case may be, of this subsection (a), to the extent of the fair
value of such property.
For the purposes of paragraphs (B), (C) and (D) of this subsection
(a), property substituted after the beginning of such four (4) months'
period for property held as security at the time of such substitution
shall, to the extent of the fair value of the property released, have the
same status as the property released, and, to the extent that any claim
referred to in any of such paragraphs is created in renewal of or in
substitution for or for the purpose of repaying or refunding any
pre-existing claim of the Trustee as such creditor, such claim shall have
the same status as such pre-existing claim.
If the Trustee shall be required to account, the funds and property
held in such special account and the proceeds thereof shall be apportioned
between the Trustee, the Bondholders, and the holders of other indenture
securities in such manner that the Trustee, the Bondholders, and the
holders of other indenture securities realize, as a result of payments from
such special account and payments of dividends on claims filed against the
Company in bankruptcy or receivership or in proceedings for reorganization
pursuant to the Bankruptcy Act or applicable State law, the same percentage
of their respective claims, figured before crediting to the claim of the
Trustee anything on account of the receipt by it from the Company of the
funds and property in such special account and before crediting to the
respective claims of the Trustee, the Bondholders, and the holders of other
indenture securities dividends on claims filed against the Company in
bankruptcy or receivership or in proceedings for reorganization pursuant to
the Bankruptcy Act or applicable State law, but after crediting thereon
receipts on account of the indebtedness represented by their respective
claims from all sources other than from such dividends and from the funds
and property so held in such special account. As used in this paragraph,
with respect to any claim, the term "dividends" shall include any
distribution with respect to such claim, in bankruptcy or receivership or
in proceedings for reorganization pursuant to the Bankruptcy Act or
applicable State law, whether such distribution is made in cash,
securities, or other property, but shall not include any such distribution
with respect to the secured portion, if any, of such claim. The court in
which such bankruptcy, receivership, or proceeding for reorganization is
pending shall have jurisdiction (i) to apportion between the Trustee, the
Bondholders, and the holders of other indenture securities, in accordance
with the provisions of this paragraph, the funds and property held in such
special account and the proceeds thereof, or (ii) in lieu of such
apportionment, in whole or in part, to give to the provisions of this
paragraph due consideration in determining the fairness of the distri-
butions to be made to the Trustee, the Bondholders, and the holders of
other indenture securities, with respect to their respective claims, in
which event it shall not be necessary to liquidate or to appraise the value
of any securities or other property held in such special account or as
security for any such claim, or to make a specific allocation of such
distributions as between the secured and unsecured portions of such claims,
or otherwise to apply the provisions of this paragraph as a mathematical
formula.
If the Trustee shall have resigned or been removed after the be-
ginning of such four (4) months' period, it shall be subject to the pro-
visions of this subsection as though such resignation or removal had not
occurred. If the Trustee has resigned or been removed prior to the
beginning of such four (4) months' period, it shall be subject to the
provisions of this subsection (a) if and only if the following conditions
exist:
(i) the receipt of property or reduction of claim which would
have given rise to the obligation to account, if the Trustee had con-
tinued as trustee, occurred after the beginning of such four (4)
months' period; and
(ii) such receipt of property or reduction of claim occurred
within four (4) months after such resignation or removal.
As used in this Section, the term "default" means any failure to make
payment in full of the principal of or interest upon the Bonds or upon the
other indenture securities when and as such principal or interest becomes
due and payable; and the term "other indenture securities" means securities
upon which the Company is an obligor (as defined in the Trust Indenture Act
of 1939) outstanding under any other indenture (a) under which the Trustee
is also trustee, (b) which contains provisions substantially similar to the
provisions of this subsection (a), and (c) under which a default exists at
the time of the apportionment of the funds and property held in said
special account.
(b) There shall be excluded from the operation of subsection (a) of
this Section a creditor relationship arising from
(1) the ownership or acquisition of securities issued under any
indenture, or any security or securities having a maturity of one
year or more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court of
competent jurisdiction or by this Indenture for the purpose of
preserving the property subject to the Lien of this Indenture or of
discharging tax liens or other prior liens or encumbrances on the
Mortgaged Property, if notice of such advance and of the
circumstances surrounding the making thereof is given to the
Bondholders as provided in subsections (a), (b) and (c) of 12.04
hereof with respect to advances by the Trustee as such;
(3) disbursements made in the ordinary course of business in the
capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depositary, or other similar
capacity;
(4) an indebtedness created as a result of services rendered or
premises rented; or an indebtedness created as a result of goods or
securities sold in a cash transaction as defined in the last para-
graph of this subsection (b);
(5) the ownership of stock or of other securities of a corpora-
tion organized under the provisions of Section 25 (a) of the Federal
Reserve Act, as amended, which is directly or indirectly a creditor
of the Company; or
(6) the acquisition, ownership, acceptance or negotiation of any
drafts, bills of exchange, acceptances, or obligations which fall
within the classification of self-liquidating paper as defined in the
last paragraph of this subsection (b).
As used in this 13.15, the term "security" shall have the meaning
assigned to such terms in the Securities Act of 1933, as amended and in
force on the date of the execution-of this Indenture; the term "cash
transaction" shall mean any transaction in which full payment for goods or
securities sold is made within seven (7) days after delivery of the goods
or securities in currency or in checks or other orders drawn upon banks or
bankers and payable upon demand; and the term "self-liquidating paper"
shall mean any draft, bill of exchange, acceptance or obligation which is
made, drawn, negotiated or incurred by the Company for the purpose of
financing the purchase, processing, manufacture, shipment, storage or sale
of goods, wares, or merchandise and which is secured by documents
evidencing title to, possession of, or a lien upon, the goods, wares, or
merchandise or the receivables or proceeds arising from the sale of the
goods, wares, or merchandise previously constituting the security, provided
the security is received by the Trustee simultaneously with the creation of
the creditor relationship with the Company arising from the making,
drawing, negotiating or incurring of the draft, bill of exchange,
acceptance or obligation; the term "Trustee" shall include the Trustee and
any separate trustee or co-trustee hereafter appointed; and the term "the
Company" shall include any Obligor upon the Bonds.
13.16 The Trustee may at any time resign and be discharged of the
trusts hereby created by giving written notice to the Company specifying
the day upon which such resignation shall take effect and thereafter giving
Published Notice thereof, once in each of three (3) successive calendar
weeks, in each case on any business day of the week, and such resignation
shall take effect upon the day specified in such Notice unless previously a
successor trustee shall have been appointed by the Bondholders or the
Company in the manner hereinafter provided in 13.18, and in such event such
resignation shall take effect immediately on the appointment of such
successor trustee. This Section shall not be applicable to resignations
pursuant to 13.14.
13.17 The Trustee may be removed at any time by an instrument or
concurrent instruments in writing filed with the Trustee and signed and
acknowledged by the holders of a majority in aggregate principal amount of
the Bonds then Outstanding (excluding Company-owned Bonds) or by their
attorneys in fact duly authorized.
In case at any time the Trustee shall cease to be eligible in ac-
cordance with the provisions of 4.03(a) and 13.01, then the Trustee shall
resign immediately in the manner and with the effect specified in 13.16;
and in the event that the Trustee does not resign immediately in such case,
then it may be removed forthwith by an instrument or concurrent instruments
in writing filed with the Trustee and either (a) signed by the President or
a Vice President of the Company with its corporate seal attested by a Clerk
or an Assistant Clerk of the Company or (b) signed and acknowledged by the
holders of a majority in aggregate principal amount of the Bonds then
Outstanding (excluding Company-owned Bonds) or by their attorneys in fact
duly authorized.
13.18 In case at any time the Trustee shall resign or shall be
removed (unless the Trustee shall be removed as provided in subsection (a)
of 13.14 in which event the vacancy shall be filed as provided in said
subsection) or shall become incapable of acting or shall be adjudged a
bankrupt or insolvent, or if a receiver of the Trustee or of its property
shall be appointed, or if any public officer shall take charge or control
of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation, or liquidation, a vacancy shall be deemed to
exist in the office of Trustee, and a successor or successors may be
appointed by the holders of a majority in aggregate principal amount of the
Bonds then Outstanding hereunder (excluding Company-owned Bonds), by an
instrument or concurrent instruments in writing signed and acknowledged by
such Bondholders or by their attorneys in fact duly authorized, and
delivered to such new Trustee, notification thereof being given to the
Company and the retiring Trustee; provided, nevertheless, that until a new
Trustee shall be appointed by the Bondholders as aforesaid, the Company, by
instrument executed by order of its Board of Directors and duly
acknowledged by its President or a Vice President, may appoint a Trustee to
fill such vacancy until a new Trustee shall be appointed by the Bondholders
as herein authorized. The Company shall publish notice of any such
appointment made by it in the manner provided in 13.16. Any new Trustee
appointed by the Company shall, immediately and without further act, be
superseded by a Trustee appointed by the Bondholders, as above provided, if
such appointment by the Bondholders be made prior to the expiration of one
year after the first publication of notice of the appointment of the new
Trustee by the Company. The Company shall cause notice of any such
appointment made by the Bondholders to be published in the manner provided
in 13.16.
If in a proper case no appointment of a successor Trustee shall be
made pursuant to the foregoing provisions of this Section within six (6)
months after a vacancy shall have occurred in the office of Trustee, the
holder of any Bond Outstanding hereunder or any retiring Trustee may apply
to any court of competent jurisdiction to appoint a successor Trustee.
Said court may thereupon after such notice, if any, as such court may deem
proper and prescribe, appoint a successor Trustee.
If the Trustee resigns because of a conflicting interest as provided
in subsection (a) of 13.14 and a successor has not been appointed by the
Company or the Bondholders or, if appointed, has not accepted the
appointment within thirty (30) days after the date of such resignation, the
resigning Trustee may apply to any court of competent jurisdiction for the
appointment of a successor Trustee, and appointment may be made by such
court pursuant to the procedure set forth in the preceding paragraph of
this Section.
Any Trustee appointed under the provisions of this Section in
succession to a Trustee shall be a bank or trust company eligible under
4.03(a) and 13.01 and not disqualified under 13.14.
Any Trustee which has resigned or been removed shall nevertheless
retain the lien upon the Mortgaged Property, including all property or
funds held or collected by the Trustee as such (except funds held in trust
for the benefit or particular Bonds or coupons), to secure the amounts due
to such Trustee as compensation, reimbursement, expenses and indemnity
afforded to it by 13.10 and shall retain the rights afforded to it by
13.11.
13.19 Any successor trustee appointed hereunder shall execute,
acknowledge, and deliver to its predecessor trustee, and also to the
Company, an instrument accepting such appointment hereunder, and thereupon
such successor trustee, without any further act, deed, or conveyance shall
become fully vested with all the estates, properties, rights, powers,
trusts, duties, and obligations of its predecessor in trust hereunder, with
like effect as if originally named as trustee herein; but the trustee
ceasing to act shall nevertheless, on the written request of the Company,
or of the successor trustee, or of the holders of ten percentum (10%) in
aggregate principal amount of the Bonds then Outstanding hereunder,
execute, acknowledge, and deliver such instruments of conveyance and
further assurance and do such other things as may reasonably be required
for more fully and certainly vesting and confirming in such successor
trustee all the right, title, and interest of the trustee to which it
succeeds, in and to the Mortgaged Property and such rights, powers, trusts,
duties, and obligations, and the trustee ceasing to act shall also, upon
like request, pay over, assign, and deliver to the successor trustee any
money or other property which may then be in its possession subject to the
Lien of this Indenture, including any purchase money mortgage or other like
indebtedness which may then be in its possession provided always that the
Trustee ceasing to act shall retain its prior lien upon the Mortgaged
Property until compensated, reimbursed or indemnified as herein provided.
Should any deed, conveyance, or instrument in writing from the Company be
required by the new trustee for more fully and certainly vesting in and
confirming to such new trustee such estates, properties, rights, powers,
trusts, duties, and obligations, any and all such deeds, conveyances, and
instruments in writing shall, on request, be executed, acknowledged, and
delivered by the Company.
13.20 Any corporation into which the Trustee may be merged or with
which it may be consolidated or any corporation resulting from any merger
or consolidation to which the Trustee shall be a party or any corporation
to which substantially all the business and assets of the Trustee may be
transferred, provided such corporation shall be eligible under the
provisions of 4.03(a) and 13.01 hereof and qualified under 13.14 hereof,
shall be the successor Trustee under this Indenture, without the execution
or filing of any paper or the performance of any further act on the part of
any other parties hereto, anything herein to the contrary notwithstanding.
In case any of the Bonds contemplated to be issued hereunder shall have
been certified but not delivered, any such successor to the Trustee may,
subject to the same terms and conditions as though such successor had
itself certified such Bonds, adopt the certification of the original
Trustee or of any successor to it as trustee hereunder, and deliver the
said Bonds so certified; and in case any of such Bonds shall not have been
certified, any successor to the Trustee may certify such Bonds either in
the name of any predecessor hereunder or in the name of the successor
Trustee, and in all such cases such certificate shall have the full force
which it is anywhere in said Bonds or in this Indenture provided that the
certificate of the Trustee shall have; provided, however, that the right to
certify Bonds in the name of the original Trustee shall apply only to its
successor or successors by merger or consolidation or sale as aforesaid.
13.21 The duties, liabilities, rights, privileges, and immunities
of the Trustee in relation to the holders of the Bonds shall be governed
exclusively by the laws of the Commonwealth of Massachusetts.
13.22 Each office, agency, corporation, or firm specified in or on
any of the Bonds or in any Directors' Resolution as a place of paying the
principal thereof, or the interest thereon, is included in the term "paying
agents" for all purposes hereof. If any of the paying agents, as above
defined, shall be dissolved, or cease to carry on business, or if any of
the paying agents shall resign hereunder by writing filed with the Trustee,
or if the Company shall remove any paying agent by a Directors' Resolution
filed with the Trustee and with the paying agent so removed, or if a
receiver of any paying agent be appointed or its property or affairs be
taken over by any public officer or officers, or if it be adjudged bankrupt
or insolvent, or if a vacancy for any cause occur at any time in the office
of any paying agent, then all the rights and duties conferred upon such
paying agent by this Indenture or by any Directors' Resolution shall be
exercised by the Trustee, and in such case, subject to the provisions of
13.02 and 13.03, the Trustee shall incur no liability for any action taken
by it in such capacity save for loss or damage resulting from its
negligence or wilful default; provided, however, that in lieu of such
exercise of rights and powers by the Trustee, in each or any such case the
Company may, by a Directors' Resolution, appoint some other person or
persons, natural or corporate, as successor to, and with all the rights and
powers of, such predecessor paying agent.
Each of the paying agents, in respect of all moneys paid to or held
by each hereunder or under the Bonds, shall be subject to the trusts
specified in 4.03 (c) hereof.
ARTICLE XIV.
Effect of Consolidation, Merger, Sale, or Lease
14.01 Nothing contained in this Indenture or in any Bond issued or
to be issued hereunder shall prevent any consolidation with the Company, or
merger into the Company, of any other Corporation, or any consolidation
with or merger by the Company into any other Corporation having corporate
powers to carry on the business then being carried on by the Company, or
the sale or lease (subject to the continuing Lien of this Indenture and to
all the provisions hereof) of all or substantially all of the Mortgaged
Property as an entirety to any Corporation lawfully entitled to acquire or
lease and operate the same, or prevent successive similar consolidations,
mergers, sales, and leases to which the Company or any other such
Corporation shall be a party, provided, however, that
A. any such merger or consolidation shall be consummated only
in conformity with the following conditions precedent thereto:
(1) that if any property owned by the Corporation to be
consolidated with the Company or merged into it or into which
the Company shall be merged (in this Article XIV called the
other Corporation) shall after such merger or consolidation be
subject to one or more mortgages or liens which shall be prior
to the Lien hereof and which shall secure any indebtedness not
then called for redemption and payment (and deposit actually and
irrevocably made of the entire redemption price), (a) then the
aggregate principal amount of all such indebtedness shall not
exceed sixty percentum (60%) of the Cost or Fair Value,
whichever is less, of said property, and (b) the net earnings
of said other Corporation, computed as provided in subparagraph
35 of 1.02 hereof, (excluding the final paragraph thereof)
during a period of twelve (12) consecutive calendar months
ending within ninety (90) days next preceding the date of such
consolidation or merger shall have been a sum at least equal to
twice the annual interest on said indebtedness, and
(2) that if the Corporation resulting from any such merger
or consolidation (herein in this Article XIV called the
successor corporation) shall have outstanding at the time of
such merger or consolidation any indebtedness not then called
for redemption and payment (and deposit actually and irrevocably
made of the entire redemption price) or proposes to issue in
connection with such consolidation or merger any indebtedness in
either case secured by a mortgage, lien, or pledge on its
property, whether or not any of said property shall have been
previously owned by the Company, said successor corporation
shall have made effective provision to establish as prior and
superior to the mortgage, lien, or pledge securing the said
indebtedness the Lien hereof upon the Mortgaged Property owned
by the Company immediately prior to said merger or consolidation
and upon all property thereafter to be acquired by the successor
corporation (other than property of the character described
herein under the definition of Excepted Property) or the
franchises necessary for the operation thereof, which, if
acquired by the Company, would constitute betterment,
extensions, improvements, additions, repairs, renewals,
replacements, substitutions, and alterations of or to the
Mortgaged Property as constituted immediately prior to said
merger or consolidation, and, if the Trustee shall so require,
shall in addition have made effective provision that the lien of
said mortgage or pledge upon the property of said successor
corporation of the character described herein under the
definition of Excepted Property shall in no wise be superior to
the Lien hereof on any such property;
B. any such merger or consolidation and any such sale shall be
consummated only if the successor corporation or the purchaser, as
the case may be, shall also covenant with the Trustee in a
Supplemental Indenture, in form satisfactory to the Trustee, to be
duly recorded and filed either prior to or substantially
simultaneously with any such merger, consolidation or sale in all
registries or other offices where this Indenture is then recorded
and/or filed
(1) that such consolidation, merger, or sale shall be on
such terms as in no respect to impair the rights or powers of
the Trustee or of the Bondholders or the Lien hereof upon the
Mortgaged Property owned by the Company immediately prior to
said merger, consolidation, or sale, or upon any property
thereafter to be acquired by the successor corporation or the
purchaser, as the case may be, (other than property of the
character described herein under the definition of Excepted
Property), or the franchises necessary for the operation
thereof, which, if acquired by the Company, would constitute
betterment, extensions, improvements, additions, repairs,
renewals, replacements, substitutions, and alterations of or to
the Mortgaged Property as constituted immediately prior to said
merger, consolidation, or sale; and
(2) to assume the due and punctual payment of the principal
of and interest on all the Bonds then Outstanding hereunder
according to their tenor and the due and punctual performance of
all the covenants hereof to be kept or performed by the Company;
and
(3) fully to preserve and protect the franchises of the
Company so far as they relate to the Mortgaged Property im-
mediately prior to said merger, consolidation, or sale, subject
however to the provisions of 7.02(c);
and any such Supplemental Indenture shall also contain:
(a) a grant confirming the Lien hereof upon the
Mortgaged Property owned by the Company immediately prior to
said merger, consolidation or sale, and upon all property
thereafter to be acquired by the successor corporation or
the purchaser, as the case may be, (other than property of
the character described herein under the definition of
Excepted Property), or the franchises necessary for the
operation thereof, which would constitute betterment,
extensions, improvements, additions, repairs, renewals,
replacements, substitutions, and alterations of or to the
Mortgaged Property so owned, and
(b) a covenant to keep the Mortgaged Property so owned
and all said after acquired property and the earnings,
income, and profits therefrom so segregated as to be capable
of identification;
C. any such lease shall be consummated only if at the time of
the execution of said lease no event of default hereunder shall have
occurred or if, having occurred, shall not then be continuing, and
only if the lessee shall furnish to the Trustee an indenture, in form
satisfactory to the Trustee, to be duly recorded and filed in all
registries or other offices where this Indenture is then recorded
and/or filed, containing covenants substantially identical with those
described in subparagraphs B(2) and B(3) of this Section (except that
the lessee shall not be obliged to covenant to perform any covenant
hereof or hereunder after the expiration date of such lease) and a
further covenant that such lease shall be made expressly subject, at
any time after default shall be made in said covenants or after the
occurrence of an event of default hereunder, to immediate termination
either by the Company or by the Trustee, or by the purchaser of the
Mortgaged Property or any substantial part thereof at any sale
thereof made hereunder, whether such sale be made under the power of
sale hereby conferred or under judicial proceedings.
14.02 The Company shall furnish or cause to be furnished to the
Trustee prior to the consummation of any such consolidation, merger, sale
or lease, as the case may be, (1) in order to establish that the conditions
precedent set forth in subparagraph A of 14.01 have been fully complied
with (a) an Independent Accountant's Certificate setting forth the net
earnings, during a period of twelve (12) consecutive calendar months ending
as required by (1) of said subparagraph A, of the Corporation to be
consolidated with the Company or merged into it or into which the Company
shall be merged or consolidated, stating that said net earnings have been
computed in accordance with the provisions of (1) of said subparagraph, and
that they are at least equal to twice the annual interest upon all the
indebtedness of said Corporation secured by mortgages or liens of the
character therein referred to; and (b) an Independent Engineer's
Certificate stating that the aggregate principal amount of the indebtedness
secured by mortgages or liens of the character described in (1) of said
subparagraph A of said other Corporation does not exceed sixty per centum
(60%) of the said Cost or Fair Value, whichever is less, of the property
securing said indebtedness; (2) in order to establish the non-occurrence or
non-continuance of an event of default as provided in subparagraph C of
14.01, an Officers' Certificate to that effect; and, (3) in order to
establish the performance of all other pertinent requirements set forth in
14.01 and the fulfillment of the conditions contained in 14.03, an Opinion
of Counsel to the effect that all such pertinent requirements have been
fully met and complied with and subject to the provisions of 13.02 and
13.03 such Opinion of Counsel shall protect the Trustee in approving or
consenting to any such consolidation, merger, sale or lease. The
Independent Engineer's Certificate shall also describe in reasonable detail
the property of said other Corporation of the character defined in the
second paragraph of the definition of Fundable Property and state the Cost
thereof or the Fair Value thereof as of the date of said merger,
consolidation or sale, whichever is less, and that said Cost or Fair Value
has been determined in accordance with the definitions of said terms.
14.03 No such consolidation, merger, or sale, and no indenture
made requisite by the pertinent requirements of 14.01 shall, in the absence
of an express grant by the successor corporation or purchaser, subject to
the Lien hereof any of the properties of the character described in
Clause 2 of the granting clauses hereof or any of the franchises of any
such successor corporation or purchaser, except those acquired by it from
the Company and except further any property thereafter acquired by it
(other than property of the character described herein under the definition
of Excepted Property), or the franchises necessary for the operation
thereof, which would have constituted betterment, extensions, improvements,
additions, repairs, renewals, replacements, substitutions, or alterations
of or to the Mortgaged Property so acquired as constituted immediately
prior to such consolidation, merger or sale; provided however that
notwithstanding any such consolidation, merger or sale, this Indenture
shall constitute a lien on all the Mortgaged Property as so constituted and
on the above described after-acquired property, and on any other property
acquired from the Company of the character described herein under the
definition of Excepted Property if the Trustee shall so require pursuant to
the provisions of subparagraph A (2) of 14.01 and on any other property
which, pursuant to the terms of 14.04, shall be Made the Basis for Action
or Credit hereunder by such successor corporation or purchaser, or which
shall consist of repairs or additions to or replacements or restorations of
any part of said Mortgaged Property or said after-acquired property made by
the application of the proceeds of insurance thereon not paid to the
Trustee, or which shall consist of machinery, equipment, apparatus, or
other tangible property substituted for any old, worn out, unserviceable,
undesirable, or unnecessary property previously a part of said Mortgaged
Property, or said after-acquired property pursuant to the provisions of
7.02(b).
14.04 In case the Company, pursuant to 14.01 and 14.02, shall be
consolidated with or merged into any other Corporation or shall sell,
subject to the Lien hereof, the Mortgaged Property as aforesaid, the
Successor Corporation, or the purchaser, as the case may be, upon
compliance with the applicable provisions of 14.01, shall succeed to and be
substituted for the Company with the same effect as if it had been named
herein as the mortgagor company, and shall have and may exercise under this
Indenture the same powers and rights as those of the Company hereunder, and
without prejudice to the generality of the foregoing, such successor
corporation or purchaser may thereafter
A. issue Bonds hereunder in accordance with the provisions of
Article III hereof, including Bonds which the Company was entitled to
issue but had not issued hereunder, but subject to all the terms,
conditions, and restrictions herein prescribed, and for this purpose
may use any Bonds theretofore executed by the Company or any
intermediate successor corporation or purchaser or may cause to be
signed, issued, and delivered, either in its own name or in the name
of Western Massachusetts Electric Company or in the name of any
intermediate successor corporation or purchaser, any or all Bonds
which shall not theretofore have been signed by the Company or any
intermediate successor corporation or purchaser and which have not
been certified by the Trustee; and upon the application of the
successor corporation or the purchaser, in lieu of the Company, and
subject to all the terms, conditions, and restrictions herein
prescribed in respect of the certification and delivery of Bonds, the
Trustee shall certify and deliver any of such bonds which shall have
been previously signed and delivered by the officers of the Company
or of any intermediate successor corporation or purchaser to the
Trustee for certification, and any of such Bonds which the successor
corporation or purchaser shall thereafter, in accordance with the
provisions of this Indenture, cause to be signed by its appropriate
officers and delivered to the Trustee for such purpose;
B. possess, use, enjoy, and obtain the release of Mortgaged
Property (including all property subjected to the Lien hereof sub-
sequent to any such consolidation, merger, or sale) in accordance
with the provisions of Article VII;
C. withdraw money from the hands of the Trustee (including
money in its hands at the time of such merger, consolidation, or
Sale) in accordance with the provisions of Article VIII and 3.06 and
3.07;
D. irrevocably allocate Net Property Additions in accordance
with the provisions of Article VI; and
E. call for redemption and redeem Bonds at any time Outstanding
hereunder in accordance with the provisions of Article V;
provided however that if property owned by the other Corporation prior to
any merger or consolidation, being or having become Fundable Property
hereunder, shall be Made the Basis for Action or Credit hereunder, such
property shall be subjected to the Lien hereof by Supplemental Indenture
and the Cost or Fair Value thereof as stated in the Independent Engineer's
Certificate described in 14.02 shall be the Cost thereof or the Fair Value
thereof as of the date of such merger or consolidation.
All Bonds of any one series issued pursuant to the provisions of this
Section shall in all respects have the same legal rank and security as the
Bonds of said series theretofore or thereafter issued in accordance with
the terms of this Indenture.
14.05 The Company covenants that if Bonds at any time be issued in
any new name the Company will provide for the stamping, or for the
exchange, of any Bonds previously issued for Bonds of the same tenor and
amounts issued in any such new name, at the option of the holders and
without expense to them, and the Trustee shall also do such acts as may be
necessary on its part to that end, including certification of the Bonds so
to be issued in exchange.
ARTICLE XV.
Defeasance
15.01 If the Company shall pay and discharge the entire in-
debtedness on all Bonds Outstanding hereunder in any one or more of the
following ways, to wit:
A. if, when the principal of all the Bonds at the time Out-
standing hereunder shall have become due and payable or will become
due and payable within two (2) years, by their terms, on redemption,
by declaration, or in any other manner, the Company shall pay or
cause to be paid the whole amount of the principal of said Bonds and
of the interest to the stated or accelerated maturity or maturities
thereof (as the case may be) due or to become due on said Bonds with
interest on overdue principal and overdue interest (so far as the
same may be legally enforceable) at the rate or rates borne by the
respective Bonds, and the premium if any due in respect of any Bonds
called for redemption, or shall deposit or cause to be deposited with
the Trustee for the account of the holders of said Bonds and of the
holders of the coupons, if any, appertaining thereto representing
such interest a sum which, together with so much of any moneys in the
hands of the Trustee or of any other paying agent hereunder (not held
for the benefit of the holders of other Bonds previously Outstanding
hereunder or of overdue coupons not previously presented for payment)
as the Company shall be permitted to apply to the purpose and shall
elect so to do, shall be sufficient to pay the whole amount of such
principal, interest, interest on overdue payments, and premium, and
in case any or all of said Bonds have been or are about to be called
for redemption the Company shall have furnished to the Trustee proof
satisfactory to it that the notice of redemption of all of said Bonds
has been duly given or has given to the Trustee irrevocable power or
powers of attorney in conformity with 5.05 to call all of said Bonds;
or
B. if the Company shall surrender to the Trustee for cancella-
tion by it all Bonds Outstanding hereunder together with all unpaid
coupons thereto appertaining;
and shall also pay or cause to be paid all other sums payable
hereunder by the Company (except in respect of any refund or
reimbursement of taxes, assessments, or other governmental charges as
to Bonds of any series for which the holders of Bonds shall look only
to the Company), then and in any such case immediately or at any time
after such payment, deposit, or surrender and, in the case of the
redemption of Bonds, such furnishing of proof or giving of
irrevocable power of attorney, but subject to the provisions of
15.02, said Bonds shall cease to be entitled to any benefit or
security hereunder, the estate, right, title and interest of the
Trustee hereby created shall determine, and, upon the request and at
the cost of the Company, and upon the receipt by the Trustee of an
Officers' Certificate stating that the conditions hereinabove in this
Section specified have been fully performed and complied with and an
Opinion of Counsel stating that the instruments which have been or
are therewith delivered to the Trustee conform to the requirements
hereof and constitute sufficient authority hereunder for the Trustee
to release and discharge the Lien hereof, and stating that the
conditions hereinabove in this Section specified have been fully
performed and complied with, the Trustee shall execute to the Company
a good and sufficient release and discharge of this Indenture and of
the Lien hereby created, and shall surrender possession to the
Company of any property of which it shall have taken possession
hereunder and which shall not have been, or shall not be required to
be, sold or disposed of under and by virtue of this Indenture; and
the Trustee shall thereupon pay to the Company all moneys, if any,
then remaining in the possession of the Trustee, which are not
required to discharge any obligation of the Company under any of the
provisions hereof or of the Bonds and shall transfer and assign to
the Company any purchase money obligations or other indebtedness, and
the security therefor held by the Trustee hereunder as part of the
Mortgaged Property; but otherwise, and until such payment and
performance, this Indenture shall be and remain in full force and
effect.
15.02 Notwithstanding the release and discharge hereof, any moneys
deposited by the Company with the Trustee, whether for the payment of
interest, interest on overdue interest, principal, or premium on any Bond
or coupon at any time Outstanding hereunder, shall be held in trust for the
exclusive benefit of the holders or registered owners of said Bonds or the
holders of said coupons respectively; provided however that any moneys
deposited with the Trustee or any paying agent for the payment of
principal, premium, or interest on Bonds at any time issued hereunder and
not applied to such payment within six (6) years after the date on which
the same shall have become due shall be repaid by the Trustee or such
paying agent to the Company, and thereafter Bondholders shall be entitled
to look only to the Company for payment, and then only to the extent of the
amount so repaid, and the Company shall not be liable for any interest
thereon and shall not be regarded as a trustee of such money; provided,
however, that the Trustee, before being required to make any such repayment
shall, at the expense of the Company, give Published Notice of the fact
that such moneys have not been so applied and that after a date specified
therein any unclaimed balance of said moneys then remaining will be repaid
to the Company.
ARTICLE XVI.
Supplemental Indentures
16.01 In addition to any Supplemental Indenture otherwise au-
thorized by this Indenture, the Company, when authorized by resolution of
its Board of Directors, or of its Executive Committee and the Trustee, at
any time and from time to time, subject to the conditions, provisions, and
restrictions herein contained, may enter into an Indenture or Indentures
Supplemental hereto and which shall thereafter form a part hereof, for any
one or more or all of the following purposes:
(a) To close the Indenture against the issue of additional Bonds
or to add to the conditions, limitations, and restrictions on the
authorized amount, terms, provisions, purposes of issue, cer-
tification and delivery of Bonds specified in Articles II and III
hereof, other conditions, limitations, and restrictions thereafter to
be observed;
(b) To add to the covenants and agreements of the Company in
this Indenture contained, other covenants and agreements thereafter
to be observed, which the Board of Directors or the Executive
Committee of the Company shall consider to be for the protection of
the Mortgaged Property and of the holders of the Bonds, although the
freedom of action of the Company may be materially restricted
thereby, and/or to surrender any right or power herein reserved to,
or conferred upon, the Company, or to or upon any successor
Corporation;
(c) To correct or amplify the description of any property hereby
conveyed, assigned, or pledged or intended so to be, or to convey,
transfer, and/or assign to the Trustee, and to subject to or confirm
the Lien of this Indenture upon, with the same force and effect as
though included in the granting clauses' hereof, additional
properties and franchises hereafter acquired by the Company through
consolidation or merger, or by purchase or otherwise;
(d) To include in the Mortgaged Property any assets of the
Company now classified as Excepted Property;
(e) To evidence the succession of another Corporation to the
Company, or successive successions, and the assumption by such
successor Corporation of the covenants, agreements, and obligations
of the Company under this Indenture and to provide for the execution,
certification, and issue of Bonds hereunder pursuant to 14.04;
(f) For the purpose of curing any ambiguity, or of curing,
correcting, or supplementing any defective or inconsistent provision
contained herein or in any Supplemental Indenture;
(g) For the appointment of a separate trustee or a co-trustee to
act under this Indenture and/or under any Supplemental Indenture;
(h) To provide the terms and conditions of Bonds of a new series
or for the exchange of Bonds of one series for Bonds of another
series; or for the conversion of Bonds of any series into capital
stock, or other securities and the terms and conditions of such
conversion;
(i) To provide for meetings of Bondholders;
(j) To amend this Indenture by modifying, eliminating, or
amending any provision contained therein which is required by the
Trust Indenture Act of 1939, to be included in an indenture to be
qualified under said Act so long as the Indenture, as so amended,
shall comply with the provisions of said Act in effect at the time of
any such amendment; to eliminate all such required provisions in the
event said Act shall no longer be in effect; or to insert in this
Indenture any provision which shall be required by the provisions of
said Act then in effect; provided, however, that no such
modification, elimination, or amendment of any such provision or
provisions which would adversely affect any Bonds theretofore issued
and then Outstanding under this Indenture shall be made;
(k) To modify any of the provisions of this Indenture for the
purpose of relieving the Company from any of the obligations,
conditions, or restrictions herein contained; provided that no such
modification shall be or become operative or effective, or in any
manner impair any of the rights of the Bondholders or of the Trustee,
while any Bonds of any series established prior to the execution of
such Supplemental Indenture shall remain Outstanding; and provided,
further, that such Supplemental Indenture shall be specifically
referred to in the test of all Bonds of any series established after
the execution of such Supplemental Indenture; and provided also, that
the Trustee may in its uncontrolled discretion decline to enter into
any such Supplemental Indenture which, in its opinion, may not afford
adequate protection to the Trustee when the same shall become
operative;
(l) For any other purpose not inconsistent with the terms of
this Indenture.
Any Supplemental Indenture authorized by the provisions of this
Section may be executed by the Company and the Trustee without the consent
of the holders of any of the Bonds at the time Outstanding notwithstanding
any of the provisions of 16.02.
16.02 The Company and the Trustee, at any time and from time to
time, may also enter into one or more Supplemental Indentures for the
purpose of modifying, amending, suspending, or rescinding any of the
provisions of this Indenture, or inserting any provision therein, if such
modification, amendment, suspension, rescission, or insertion shall be
approved by resolution of the Board of Directors of the Company and by the
written consent, filed with the Trustee, of the holders of not less than
seventy percentum (70%) in principal amount of the Bonds at the time
Outstanding (excluding Company-owned Bonds); provided, however:
(1) that, before any such Supplemental Indenture shall be
executed by the Trustee or be of any effect, there shall be filed
with the Trustee an Officers' Certificate to the effect that
Published Notice has been given for not less than four (4) successive
calendar weeks, stating in general terms the substance of any
modification, amendment, suspension, rescission, or insertion
embodied in any such Supplemental Indenture presented to the Trustee
for execution, and that a similar notice has been mailed, postage
prepaid, at least thirty (30) days prior to such presentation to the
Trustee, to each registered owner of Bonds then Outstanding hereunder
at his address as given upon the registry books kept by the Trustee,
provided however that if at any time not more than forty-five (45)
and not less than thirty (30) days prior to such presentation to the
Trustee, all Bonds Outstanding hereunder shall be in fully registered
form, Published Notice as aforesaid may be dispensed with;
(2) that no such modification, amendment, suspension, rescis-
sion, or insertion shall be such, or shall be so construed, as to
change any of the powers, rights, duties, or obligations of the
Trustee without the Trustee's written assent thereto;
(3) that no action shall be taken under this Section affecting
the rights of the holders of one or more series of Bonds in any
manner or to any extent differing from that in or to which the rights
of holders of any other series of Bonds are affected, unless such
action shall have received the written consent, filed with the
Trustee, of holders of not less than seventy percentum (70%) in
principal amount of the Bonds of each series so affected then Out-
standing (excluding Company-owned Bonds);
(4) that no such modification, amendment, suspension, rescis-
sion, or insertion shall affect the obligation of the Company in
respect of the principal of or interest on any Bond, which obligation
is absolute, unconditional, and unalterable, or permit any change in
the principal amount, or premium, or any extension of the maturity,
of any Bond, or the reduction of the rate, or extension of the time
of payment, of the interest thereon, or permit any modification in
the terms of payment of such principal or interest, without the
consent of the holder thereof, or impair or affect the right of any
Bondholder, without his consent, to receive payment of the principal
of or interest on any of his Bonds on or after the respective due
dates expressed in the Bonds and coupons, or to institute suit for
the enforcement of any such payment on or after such respective
dates, subject to the limitations contained in 9.18 hereof;
(5) that no such modification, amendment, suspension, rescis-
sion, or insertion shall reduce the percentage required by the pro-
visions of this Section for the taking of any action thereunder, or
shall permit any other change in any of the provisions of this
Section, or authorize the creation by the Company, except as herein
expressly authorized, of any mortgage, pledge, or lien on any part or
all of the Mortgaged Property ranking prior to or on an equality with
the Lien of this Indenture.
Subject to the provisions of 13.02 and 13.03 hereof the Trustee shall receive
and shall be entitled to rely for all purposes on an Opinion of Counsel that
the provisions of any such Supplemental Indenture executed by the Company and
presented to the Trustee for execution comply with the provisions hereof; and
any such Supplemental Indenture executed by the Company, and by the Trustee
pursuant to such Opinion of Counsel, shall have full force and effect
notwithstanding any conflict thereof with any provisions hereof, (or of any
prior Supplemental Indenture) other than subclauses (1), (2), (3), (4), and
(5) immediately preceding; and the Trustee shall be as fully protected in
relying on and acting pursuant to any such Supplemental Indenture as if the
provisions thereof were herein set forth as a part hereof, and were expressed
to control, in case of conflict, all other provisions hereof.
It shall not be necessary for the consent of Bondholders under this
Section to approve the particular form of any proposed Supplemental Indenture
but it shall be sufficient if such consent shall approve the substance
thereof.
16.03 In each and every case provided for in this Article, the Trustee
shall be entitled to exercise its uncontrolled discretion in determining
whether or not any proposed Supplemental Indenture, or any term or provision
thereof, is necessary or desirable, having in view the needs of the Company
and the respective rights and interests of the holders of Bonds theretofore
issued hereunder; and the Trustee, subject to the provisions of 13.02 and
13.03 hereof shall be under no responsibility or liability to the Company or
to any holder of any Bond, or otherwise, for any act or thing which it may do
or decline to do in good faith, pursuant to the provisions of this Article
XVI, in the exercise of such discretion.
16.04 The Trustee is authorized to join with the Company in the
execution of any Supplemental Indenture authorized under this Article XVI, to
make the further agreements and stipulations which may be therein contained,
and to accept the conveyance, transfer, and assignment of any property
thereunder.
Any Supplemental Indenture executed in accordance with any of the
provisions of this Article shall thereafter form a part of this Indenture;
and all the terms and conditions contained in any such Supplemental
Indenture, if authorized hereby to be contained therein, shall be, and be
deemed to be, part of the terms or conditions hereof for any and all
purposes, and, if deemed necessary or desirable by the Trustee, any of such
terms or conditions may be set forth in reasonable and customary manner in
the Bonds of the particular series to which such Supplemental Indenture shall
apply and express reference may be made thereto in the test of the Bonds of
any series issued thereafter; provided, however, that each such supplemental
indenture or mortgage shall comply with any applicable requirements of the
Trust Indenture Act of 1939 as in effect on the date of the execution of this
Indenture, unless said Act shall then have been repealed, and shall stipulate
that the Trustee shall not be taken impliedly to waive thereby any right it
would otherwise have, and that nothing in this Section shall affect or limit
the obligation of the Company to execute and deliver to the Trustee any
instrument of further assurance, or other instrument, which elsewhere in this
Indenture is required to be made to or with the Trustee.
ARTICLE XVII.
Miscellaneous
17.01 Nothing in this Indenture, expressed or implied, is intended
or shall be construed to confer upon, or give to any person or corporation
other than the parties hereto and the holders from time to time of the Bonds
and coupons Outstanding hereunder, any security, rights, remedies, or claims,
legal or equitable, under or by reason hereof, or any covenant, condition or
stipulation hereof; and this Indenture and all the covenants, conditions,
stipulations, and agreements herein are and shall be held to be for the sole
and exclusive benefit of the parties hereto and the holders from time to time
of the Bonds and coupons Outstanding hereunder.
17.02 Each Certificate or Opinion provided for in this Indenture
delivered to the Trustee in respect to compliance with a condition or
covenant herein contained shall include (1) a statement that the person
making such Certificate or Opinion 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
Certificate or Opinion are based; (3) a statement that, in the opinion of
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 a
covenant or condition has been complied with; and (4) a statement as to
whether or not in the opinion of such person such condition or covenant has
been complied with.
Each Certificate or Opinion of an Independent Engineer or Independent
Accountant provided for in this Indenture delivered to the Trustee shall also
state that such Engineer or Accountant, as the case may be, is in fact
independent and is not a director, officer, or employee of, or under retainer
by, the Company or any Affiliate of the Company.
17.03 Any notice or demand by any Bondholder to or upon the Trustee
shall be due and sufficient notice or demand for each and every purpose
hereunder if made by written instrument delivered to the Trustee at its
principal office. Any notice or demand which by any provision of this
Indenture is required or provided to be given or served by the Trustee or by
any Bondholder, upon the Company shall be deemed to have been sufficiently
given or served for all purposes if mailed as registered mail matter, postage
prepaid, addressed as follows:
Western Massachusetts Electric Company
45 Federal Street
Greenfield, Massachusetts
or addressed to the Company at any other address which it may file with the
Trustee as the address to which notices or demands shall be mailed.
17.04 All parties to this Indenture agree, and each holder or owner
of any Bond by his acceptance thereof shall be deemed to have agreed, that
any court may in its discretion require 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, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having
due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to
any suit instituted by the Trustee, to any suit instituted by any Bondholder,
or group of Bondholders, holding in the aggregate more than ten percentum
(10%) in aggregate principal amount of the Bonds outstanding (excluding
Company-owned Bonds), or to any suit instituted by any Bondholder for the
enforcement of the payment of the principal of or interest on any Bond, on or
after the respective due dates expressed in such Bond.
17.05 If and to the extent that any provision of this Indenture
limits, qualifies, or conflicts with any other provision included herein that
is required to be included herein by the Trust Indenture Act of 1939, such
required provision shall control.
17.06 Wherever reference is made in this Indenture to the Trust
Indenture Act of 1939, reference is made to such Act as it was in force on
the date of the execution of this Indenture.
17.07 Whenever in this Indenture either of the parties hereto is
named or referred to, the successors and assigns of such party shall be
deemed to be included, and all the covenants, promises, and agreements in
this Indenture contained by or on behalf of the Company, or by or on behalf
of the Trustee, shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed or not.
17.08 In case any one or more of the provisions contained in this
Indenture or in the Bonds or coupons shall for any reason be held to be
invalid, illegal, or unenforceable in any respect, such invalidity,
illegality, or unenforceability shall not affect any other provisions of this
Indenture, but this Indenture shall be construed as if such invalid or
illegal or unenforceable provision had never been contained herein.
17.09 The date of this Indenture, to wit, August 1, 1954, is in-
tended as and for a date for reference and for identification, the actual
time of the execution hereof being the date written in the testimonium clause
hereof.
17.10 The cover of this Indenture, and all Articles and description
headings, and the table of contents and marginal notes and headings, if any,
are inserted for convenience of reference, and are not to be taken to be any
part of these provisions, nor to control or affect the meaning, construction,
or effect of the same.
17.11 It is hereby certified that the United States Internal Revenue
tax which may be imposed by reason of the initial issue of eleven million
dollars ($11,000,000) principal amount of the 2.95% Bonds, and which may be
paid by affixing stamps to this Indenture, has been paid by affixing to an
original counterpart hereof (to be filed with the Trustee), and duly
canceling, the required stamps.
17.12 This Indenture may be simultaneously executed in any number of
counterparts, each of which shall be deemed an original; and all said
counterparts executed and delivered, each as an original, shall constitute
but one and the same instrument, which shall for all purposes be sufficiently
evidenced by any such original counterpart.
IN WITNESS WHEREOF, said Western Massachusetts Electric Company has
caused this instrument to be executed in its corporate name by its President
or one of its Vice-Presidents, thereunto duly authorized, and its corporate
seal to be hereto affixed, attested by its Clerk or an Assistant Clerk and
said Old Colony Trust Company has caused this instrument to be executed in
its corporate name by one of its Vice-Presidents, thereunto duly authorized,
and its corporate seal to be hereto affixed, all on August 17, 1954, but as
of the day and year first above written.
WESTERN MASSACHUSETTS ELECTRIC COMPANY
By /s/ Howard J. Cadwell
President
ATTEST:
/s/ James Gray
Clerk
signed, sealed and delivered by
Western Massachusetts Electric
Company in our presence:
/s/ A. W. Wilkinson
/s/ D. R. Pokross
OLD COLONY TRUST COMPANY
By /s/ J. J. Walsh
Vice-President
Signed, sealed and delivered by
Old Colony Trust Company in our
presence:
/s/ A. W. Wilkinson
/s/ D. R. Pokross
SCHEDULE A
I. All real estate and rights in real estate owned of record by the
Company, as follows:
A. Hydro-Electric Properties
A.1. Turners Falls Dam and associated or adjacent real estate as
follows:
The site of The Turners Falls dam across the Connecticut River in the
towns of Montague and Gill in Franklin County, Massachusetts, including land
in said towns occupied by the head gates, canal, and forebay; two
hydro-electric generating stations in said Montague known as Cabot Station
and Turners Falls Station; office building, garage, maintenance building, and
switching station in said Montague; also the flowage, seepage, and
percolation rights appurtenant to said dam, canal, and forebay upstream of
said dam in said towns and in the towns of Erving, Northfield, and Greenfield
(all in said Franklin County) and extending into Hinsdale, New Hampshire, and
Vernon, Vermont. The title to said site and rights hereby conveyed is that
acquired by the Company by deed of Turners Falls Power & Electric Company
dated December 30, 1942, and recorded in Franklin County Deeds, Book 856,
page 174, and by two deeds of other grantors dated March 30, 1949, and
November 14, 1950, and recorded with said Deeds, Book 934, page 372, and Book
956, page 197, respectively; except that rights under certain indentures to
draw and use water from said canal have since then been released to the
Company. The title conveyed to the Company thereby was then and is now
subject to indentures between said Turners Falls Power & Light Company, or a
predecessor thereof, and others, relating to rights to draw and use water
from said canal, as follows:
Indentures with Keith Paper Company
dated September 2, 1873, and recorded Book 275, page 397,
dated June 2, 1885, and recorded Book 377, page 235,
dated September 12, 1892, and recorded Book 427, page 100,
dated August 21, 1900, and recorded Book 478, page 252,
dated June 13, 1912, and recorded Book 576, page 78,
dated December 29, 1920, and recorded Book 650, page 288,
dated May 1, 1922, and recorded Book 876, page 12;
Indenture with Marshall Paper Company
dated June 20, 1895, and recorded Book 440, page 334;
Indentures with Esleeck Manufacturing Company
dated July 22, 1903, and recorded Book 504, page 154,
dated July 28, 1922, and recorded Book 691, page 124,
dated August 7, 1928, and recorded Book 751, page 40.
A.2. Gardners Falls Dam and associated or adjacent real estate as
follows:
The site of Gardners Falls Dam across the Deerfield River in the towns
of Buckland and Shelburne including land occupied by the head gates, canal,
and forebay in said towns; the hydro-electric generating station in said
Buckland; also the flowage, seepage, and percolation rights appurtenant to
said dam, canal, and forebay upstream of said dam in said towns; the title to
said real estate and rights in real estate being that acquired by the Company
by the following deeds, of which all but the last were acquired under the
Company's prior name, Greenfield Electric Light & Power Company:
Recording Reference in
Date of Deed Franklin County Deed
(a) June 23, 1903 Book 501, page 223
(b) June 26, 1903 Book 501, page 231
(c) April 30, 1904 Book 557, page 111
(d) May 23, 1918 Book 632, page 230
(e) May 9, 1919 Book 650, page 11
(f) June 11, 1924 Book 690, page 312
(g) October 25, 1945 Book 884, page 310.
A.3. Dam across Green River and associated or adjacent real estate as
follows:
The site of the dam across Green River in said Greenfield including
land occupied by the head gates, canal, and forebay and hydro-electric
station, all in said Greenfield; also the flowage, seepage, and percolation
rights appurtenant to said dam, canal, and forebay upstream of said dam in
said town; the title to said real estate and rights in real estate being that
acquired by having been conveyed to the Company (under its prior name,
Greenfield Electric Light & Power Company) by deed of Arthur D. Potter and
others dated September 23, 1910, and recorded in said Franklin County Deeds,
Book 566, page 123.
A.4. Indian Orchard Dam and associated or adjacent real estate as
follows:
The site of the Indian Orchard Dam across the Chicopee River in the
town of Ludlow and city of Springfield, both in Hampden County,
Massachusetts, including land occupied by head gates, canal, and forebay in
said town and city; a hydro-electric generating station in said Springfield;
also the flowage, seepage, and percolation rights appurtenant to said dam,
canal, and forebay upstream of said dam in said town and city; the title to
said real estate and rights in real estate being that acquired by the Company
by deed of United Electric Light Company dated December 30, 1942, and
recorded in Hampden County Deeds, Book 1753, page 597.
A.5. Leases: The rights of the Company as lessee under the following
leases to it:
(a) Lease from the City of Springfield dated June 21, 1928, and
recorded with Hampden County Deeds, Book 1467, page 174, as amended by
two later agreements, one dated August 1, 1928, recorded with said
Deeds, Book 1467, page 186, and the other dated February 25, 1929,
recorded with said Deeds, Book 1467, page 187, subject to the payment
of rent as therein provided, of a hydro-electric generating station
situated on the Westfield Little River in the town of Granville known
as the Cobble Mountain Plant, together with the right to operate said
plant for the generation of electricity and to sell the electricity so
generated and for this purpose to draw water from the Cobble Mountain
Reservoir so-called which is owned by said City, all as set forth in
said lease as amended; except the last day of the term of said lease.
(b) Lease from The Quinnehtuk Company dated June 30, 1947, but not
recorded, subject to the payment of rent as therein provided, of a
hydroelectric development on Chicopee River in the city of Chicopee
known as the Dwight Plant, said lease being for a period of ten years
beginning July 1, 1947, with provisions for successive automatic
renewals and for termination on thirty days' notice by either party;
except the last day of the term of said lease.
B. Steam Generating Properties
B.1. West Springfield plant consisting of the following:
(a) The site of the principal steam generating plant of the
Company and of an outdoor substation and other transmission facilities
in the town of West Springfield, Hampden County, on the westerly side
of Highway Route 5, so-called.
(b) The site of the screen well house between the easterly side of
said Route 5 and Connecticut River; said sites (a) and (b) together
containing about fifty acres.
(c) Easements appurtenant to parcels (a) and (b) for tunnels under
said Route 5. For Company's title to said easements, see the following
deeds in said Hampden County Deeds:
Book 1358, page 260
Book 1864, page 97
Book 1900, page 171
Book 1900, page 169
Book 2017, page 287
Book 2315, page 342
The title to said sites (a) and (b) being that acquired by the Company
by the following deeds recorded in said Hampden Deeds:
Date Recording Data
December 30, 1942 Book 1753, page 597
January 7, 1947 Book 1846, page 303
January 7, 1947 Book 1846, page 378
March 1, 1947 Book 1864, page 100
April 1, 1947 Book 1864, page 93
April 1, 1947 Book 1864, page 95
May 12, 1947 Book 1867, page 14
The land acquired under said deeds was reduced by taking of
Commonwealth of Massachusetts for said Route 5. (See Book 2264, page 462,
Book 2274, page 228.)
B.2. The site of a team generating plant in said Springfield on the
easterly side of the Connecticut River at the foot of State Street containing
about 157,600 square feet; the title to said real estate being that acquired
by the Company by the following deeds recorded in said Hampden County Deeds:
Date Recording Data
December 30, 1942 Book 17O3, page 597
February 16, 1948 Book 1925, page 69
July 29, 1948 Registered land. See Certificate No. 4574.
B.3. The site containing about thirty-four acres of a steam generating
plant in the city of Chicopee at the confluence of the Chicopee and
Connecticut Rivers at the foot of Depot Street; the title to said real estate
being that acquired by the Company by deed from Turners Falls Power &
Electric Company dated December 30, 1942, recorded in said Hampden County
Deeds, Book 1753, page 594.
B.4. The site of a steam generating plant and transmission facilities,
including an outdoor substation and other transmission facilities, in the
city of Pittsfield, Berkshire County, at the corner of Fourth Street and
Silver Lake Road, containing about 298,000 square feet; the title to said
real estate being that acquired by the Company by deed from Pittsfield
Electric Company dated December 30, 1942, recorded in Berkshire Middle
District Deeds, Book 511, page 43.
C. Transmission and Distribution Properties,
the titles to the various sites being those acquired
by the Company by the respective deeds below mentioned:
Fourteen sites in said Springfield as follows:
C.1. Of the Distribution Department building, garage, and storage
facilities on King Street containing about 114,000 square feet.
C.2. Of the Meter Department building, a substation and storage facili-
ties on Wilbraham Avenue containing about 123,000 square feet.
C.3. Of No. 4 Distribution Substation building, so-called, on Carew
Street, containing about 23,000 square feet.
C.4. Of No. 5 Transmission Substation building, so-called, and trans-
mission line facilities on Page Boulevard, containing about eleven acres.
C.5. Of No. 7 Distribution Substation building, so-called, at the
corner of Converse and Buckler Streets, containing about 19,923 square feet.
C.6. Of a Distribution Substation building at the corner of Armory and
Ledyard Streets containing about 6,937 square feet.
C.7. Of a Distribution Substation building on Birnie Avenue containing
about 4,740 square feet.
The above sites, C.1 to C.7 inclusive, were all acquired by the Company
by deed of United Electric Light Company dated December 30, 1942, and
recorded in Hampden County Deeds, Book 1753, page 597.
C.8. Of Unit Substation No. 12 so-called, on Longhill Street, contain-
ing about 9,968 square feet, acquired by deed of J. C. Nowak, dated January
27, 1948, and recorded in said Hampden County Deeds, Book 1919, page 432.
C.9. Of Unit Substation No. 13 so-called, on Berkshire Avenue and
Jasper Street containing about 3,520 square feet, acquired by deed of Marcel
A. Bedard dated November 10, 1949, and recorded in said Hampden County Deeds,
Book 2019, page 325.
C.10. Of Unit Substation No. 14 so-called, on said Carew Street
containing about 5,000 square feet, acquired by deed of Stephen W. Sarandis
and Demetrius G. Hondros dated November 25, 1949, and recorded in said
Hampden County Deeds, Book 2021, page 451.
C.11. Of Unit Substation No. 15 so-called, on Main Street (Indian
Orchard section) containing about 5,000 square feet, acquired by deed of
Stanley J. Chmura dated February 24, 1950, and recorded in said Hampden
County Deeds, Book 2034, page 561.
C.12. Of a prospective unit substation at the corner of Wilbraham
Road and Kane Street containing about 8,986 square feet, acquired by deed of
Elizabeth Varanka dated October 8, 1953, and recorded in said Hampden County
Deeds, Book 2270, page 514.
C.13. Of a prospective unit substation on Allen Street containing
about 20,963 square feet, acquired by deed of Frank Pessolano dated October
8, 1953, and recorded in said Hampden County Deeds, Book 2270, page 515.
C.14. Of a prospective unit substation and transmission substation
at the corner of said Wilbraham Road and Bradley Road containing about 11.85
acres, acquired by deed of Estate of Jane D. Namack dated November 2, 1953,
and recorded in said Hampden County Deeds, Book 2276, page 412.
Twenty-two sites outside of said Springfield as follows:
C.15. Of No. 9 Distribution Substation so-called, on Southwick
Street, Agawam, in said Hampden County, containing about 32,480 square feet,
acquired by said deed of United Electric Light Company dated December 30,
1942, recorded in said Hampden County Deeds, Book 1753, page 597.
C.16. Of No. 19 Distribution Substation on Perry Street in said
Agawam containing about 9,927 square feet, acquired by two deeds of Agawam
Manufacturing Company, Inc. dated October 9, 1952, and June 8, 1954, recorded
in said Hampden County Deeds, Books 2203, page 159, and Book 2315, page 544,
respectively.
C.17. Of No. 10 Distribution Substation on Hubbard Street in said
Ludlow containing about 13,699 square feet, acquired by said deed of United
Electric Light Company dated December 30, 1942, recorded in said Hampden
County Deeds, Book 1753, page 597.
C.18. Of No. 11 Unit Substation on Union Street in said West
Springfield containing about 7,000 square feet, acquired by deed of Walter R.
Johnson et ux. dated November 25, 1947, recorded in said Hampden County
Deeds, Book 1908, page 275.
C.19. Of No. 17 Unit Substation on Kings Highway in said West
Springfield, containing about 15,000 square feet, acquired by deed of Rachel
E. Raleigh dated September 29, 1952, recorded in said Hampden County Deeds,
Book 2200, page 432.
C.20. Of No. 16 Distribution Substation so-called, on Longmeadow
Street in Longmeadow, in said Hampden County, containing about 13,600 square
feet, acquired by deed of Marjorie S. Jennings, dated September 6, 1951,
recorded in said Hampden County Deeds, Book 2134, page 108.
C.21. Of a Unit Substation at the corner of Bernardston-Northfield
State Highway and Turners Falls Road, in Bernardston, in said Franklin
County, containing about 15,491 square feet, acquired by deed of Herbert L.
Ryther dated July 13, 1948, recorded in said Franklin County Deeds, Book 914,
page 348.
C.22. Of Regulator Units on State Highway leading from Shelburne
Falls in Colrain, in said Franklin County, containing about 7,000 square
feet, acquired by deed of Earle H. Temple and Harold D. Temple dated February
3, 1941, recorded in said Franklin County Deeds, Book 845, page 155.
C.23. Of a Unit Substation on Graves Street in Deerfield, in said
Franklin County, containing about 4.8 acres, acquired by deed of Selvestor
Jachimowicz et ux. dated December 10, 1949, recorded in said Franklin County
Deeds, Book 943, page 351.
C.24. Of a Distribution and Meter Department building, garage, and
storage facilities on Federal Street in said Greenfield, containing about
43,000 square feet, acquired by the following deeds, of which all but the
last were acquired under the Company's prior name, Greenfield Electric Light
& Power Company; being recorded in said Franklin County Deeds.
Date Recording Data
(a) January 24, 1913 Book 594, page 23
(b) May 5, 1916 Book 624, page 12
(c) June 13, 1916 Book 624, page 60
(d) April 14, 1920 Book 662, page 82
(e) April 29, 1920 Book 663, page 101
(f) May 17, 1920 Book 661, page 126
(g) June 7, 1920 Book 661, page 167
(h) April 8, 1927 Book 738, page 24
(i) February 1, 1929 Book 758, page 141
(j) July 1, 1929 Book 767, page 5
(k) January 8, 1930 Book 748, page 393
(l) May 10, 1945 Book 883, page 21
Note: A portion of the parcel acquired by said deed (e) was conveyed
to Town of Greenfield by deed dated December 18, 1925, recorded in said
Deeds, Book 707, page 372, but a right of way 12 feet wide to Main Street was
reserved by the Company in said deed over said portion so conveyed.
Also by the same deed to said Town portions of the parcels acquired by
said deeds (f) and (g) were conveyed to said Town.
Said portions so conveyed to said Town are not included in the area of
about 43,000 square feet.
C.25. Of a Unit Substation on Franklin Street in said Greenfield,
containing about 16,346 square feet, acquired by deed of Franklin Savings
Institution dated January 13, 1939, recorded in said Franklin County Deeds,
Book 827, page 336.
C.26. Of Greenfield Substation building and transmission line
facilities on Mill Street, in said Greenfield, containing about 525,865
square feet, acquired by the Company under its prior name, Greenfield
Electric Light & Power Company by the following deeds recorded in said
Franklin County Deeds:
Date Recording Data
(a) August 2, 1897 Book 457, page 112
(b) June 21, 1915 Book 601, page 381
(c) February 2, 1916 Book 612, page 70
(d) April 21, 1916 Book 611, page 170
(e) February 18, 1925 Book 707, page 78
(f) December 18, 1925 Book 706, page 348
(g) September 6, 1926 Book 736, page 158
(h) September 27, 1926 Book 737, page 150
(i) May 7, 1931 Book 775, page 155
Note: A portion of the parcel acquired by said deed (b) was conveyed
to H. Kunaszko by deed dated February 2, 1916, recorded in said Deeds,
Book 612, page 70. Also portions of the parcels acquired by said deeds
(g) and (h) were taken by said Town March 26, 1954, for highway purposes by
a taking recorded in said Deeds, Book 1000, page 348. Said portions are not
included in the area of about 525,865 square feet.
C.27. Of the Millers Falls Substation so-called, on Grand Avenue in
said Montague containing about 9,712 square feet (under the name of Green-
field Electric Light & Power Company) by deed of Franklin Electric Company
dated July 21, 1923, recorded in said Franklin County Deeds, Book 674,
page 361.
C.28. Of Montague Town Substation so-called, on Sunderland-Turners
Falls Highway in said Montague, containing about 11,592 square feet, acquired
by deed of Boston and Maine Railroad dated December 21, 1950, recorded in
said Franklin County Deeds, Book 956, page 389.
C.29. Of Leyden Substation so-called, on Greenfield Road in Leyden
in said Franklin County, containing about 7,500 square feet, acquired by deed
of William A. Webb et ux. dated November 14, 1952, recorded in said Franklin
County Deeds, Book 982, page 54.
C.30. Of Agawam Substation so-called, a service building, storage
facilities, and transmission facilities on Maple Street in said Agawam
containing about 22.13 acres, acquired by deed of Turners Falls Power &
Electric Company dated December 30, 1942, recorded in said Hampden County
Deeds, Book 1753, page 594.
C.31. Of Chicopee Substation so-called, and transmission facilities
on Gratton Street in said Chicopee containing about 5 acres acquired by said
deed of Turners Falls Power & Electric Company dated December 30, 1942,
recorded in said Hampden County Deeds, Book 1753, page 194.
C.32. Of Westfield Substation so-called, on Elm Street in the city
of Westfield in said Hampden County, containing about 41,086 square feet,
acquired by two deeds of said Turners Falls Power & Electric Company and of
The Quinnehtuk Company dated December 30, 1942, and October 31, 1944 respec-
tively; and recorded in said Hampden County Deeds, Book 1753, page 594, and
Book 1790, page 54, respectively.
C.33. Of Amherst Substation so-called, garage, transmission, and
storage facilities on College Street in Amherst, Hampshire County,
Massachusetts, containing about 5 acres, acquired by deed of Western Counties
Electric Company dated December 30, 1933, recorded in Hampshire County Deeds,
Book 893, page 488.
C.34. Of the West Chesterfield Substation so-called, northerly of,
but not abutting on, the Chesterfield-West Chesterfield Highway in
Chesterfield in said Hampshire County, containing about 3,000 square feet,
with a right of way to said site from said highway, acquired by said deed of
Western Counties Electric Company dated December 30, 1933, recorded in said
Hampshire County Deeds, Book 893, page 488.
C.35. Of a garage with stock room and storage facilities on Liberty
Street, Easthampton, in said Hampshire County, containing about 42,312 square
feet, acquired by deed of Easthampton Gas Company dated May 31, 1935,
recorded in said Hampshire County Deeds, Book 906, page 219.
C.36. Of Easthampton Substation so-called, on said Liberty Street in
said Easthampton containing about 57,000 square feet, acquired by said deed
of Western Counties Electric Company dated December 30, 1933, recorded in
said Hampshire County Deeds, Book 893, page 488.
C.37. Of Mount Tom Substation so-called, on State Highway leading to
Northampton in said Easthampton containing about 6 acres, acquired by deed of
said Turners Falls Power & Electric Company dated December 30, 1942, recorded
in said Hampshire County Deeds, Book 972, page 521.
C.38. Of Bancroft Substation so-called, on Bancroft Road in the town
of Becket, in said Berkshire County, containing about 11,689 square feet.
C.39. Of Dalton Substation so-called, on Housatonic Street in the
town of Dalton, in said Berkshire County, containing about 47,000 square
feet.
C.40. Of Canal Street Substation so-called, at the foot of Canal
Street in Lee in said Berkshire County, containing about 9,000 square feet.
C.41. Of Valley Mill Substation so-called, on the easterly side of
Housatonic River in Lee, containing about .87 acres.
C.42. Of Maple Street Substation so-called, on Maple Street in said
Lee containing about 44,700 square feet.
C.43. Of Woodland Road Substation so-called, and transmission
facilities on Woodland Road in said Lee containing about 25 acres.
Sites numbered 38 to 43 inclusive were all acquired by deed of
Pittsfield Electric Company dated December 30, 1942, recorded in Berkshire
County Middle District Deeds, Book 511, page 43.
C.44. Of Fairview Street Substation so-called, on Fairview Street in
said Lee containing about 70,000 square feet acquired by deed of Southern
Berkshire Power and Electric Company dated November 9, 1945, recorded in said
Berkshire County Middle District Deeds, Book 512, page 435.
C.45. Of Renne Avenue Substation so-called, on Eagle Street in said
city of Pittsfield, containing about 5,740 square feet, acquired by said deed
of Pittsfield Electric Company dated December 30, 1942, recorded in said
Berkshire County Middle District Deeds, Book 511, page 43.
C.46. Of Seymour Street Substation so-called, on Seymour Street in
said Pittsfield containing about 3,960 square feet, acquired by deed of
Leonard S. Murrel et ux. dated April 13, 1950, recorded in said Berkshire
County Middle District Deeds, Book 555, page 374.
C.47. Of Dorchester Avenue Substation so-called, on Dorchester
Avenue in said Pittsfield containing about 10,000 square feet, acquired by
deeds of Turners Falls Power & Electric Company and Pittsfield Electric
Company dated December 30, 1942, recorded in said Berkshire County Middle
District Deeds, Book 512, page 42, and Book 511, page 43, respectively.
C.48. Of Coltsville Substation so-called, on Merrill Road in said
Pittsfield containing about 39,525 square feet, acquired by deeds of
Edward H. Prentice et ux. dated April 15, 1952, and March 26, 1953, recorded
in said Berkshire County Middle District Deeds, Book 583, page 121, and Book
595, page 156, respectively.
C.49. Of Wyandotte Substation so-called, on North Street in said
Pittsfield containing about 15,000 square feet, acquired by deed of
Francis J. Quirico dated March 4, 1954, recorded in said Berkshire County
Middle District Deeds, Book 610, page 318.
C.50. Of Doreen Substation so-called, and transmission line and
switching facilities on Elm Street in said Pittsfield, containing about 12
acres, acquired by deed of Anna Dragone dated November 3, 1952, recorded in
said Berkshire County Middle District Deeds, Book 590, page 568.
D. Office Properties
The following sites of office properties, in addition to office
properties included in the sites above mentioned; the titles to the various
sites being those acquired by the Company by the respective deeds below
mentioned:
D.1. Of the office of the Springfield Division, 73 State Street,
Springfield containing about 51,187 square feet, acquired by said deed of
United Electric Light Company dated December 30, 1942, recorded in Hampden
County Deeds, Book 1753, page 597.
D.2. Of office, living quarters, and garage on College Highway in
Southwich; Hampden County, containing about 9,528 square feet, acquired by
deed of Pittsfield Electric Company dated December 30, 1942, recorded in
Hampden County Deeds, Book 1753, page 592.
D.3. Of an office building on Federal Street in said Greenfield
containing about 10,041 square feet, acquired (under prior name of Greenfield
Electric Light & Power Company) by deed of Jacob Schick dated December 13,
1929, recorded in Franklin County Deeds, Book 768, page 101.
D.4. Of an office building, a Distribution Department building, garage,
and storage facilities on Eagle Street in said Pittsfield, containing about
56,586 square feet, acquired by deed of Pittsfield Electric Company dated
December 30, 1942, recorded in Berkshire County Middle District Deeds, Book
511, page 43.
E. Miscellaneous Properties Not Included in the Foregoing and
Not Including Easements or other Transmission Line Rights
The titles to the various sites are those acquired by the Company by
the respective deeds below mentioned:
E.1. Of the former location of Northfield Substation so-called (not now
in use) on Parker Avenue in Northfield, in said Franklin County, containing
about 30,717 square feet, acquired (under said prior name) by two deeds, one
dated December 27, 1910, recorded in said Franklin County Deeds, Book 566,
page 326, and one dated February 4, 1928, and recorded with said Deeds, Book
748, page 90.
B.2. Of a radio tower and associated equipment southerly of, but not
abutting on, Old Albany Road, so-called, in said Shelburne containing about
1.24 acres, acquired by deed of Guy Manners and Rachel L. Manners dated March
3, 1950, recorded in said Franklin County Deeds, Book 945, page 135; also and
easement to said site acquired by deed of Harry P. Koch dated February 2,
1950, and recorded in said Franklin County Deeds, Book 944, page 315.
E.3. Of a radio tower and associated equipment on North Street in the
town of Blandford, said Hampden County, containing about 2.3 acres, acquired
by deed of Ethel M. Fiske dated May 13, 1953, recorded in said Hampden County
Deeds, Book 2240, page 405.
E.4. Of the portion of a former transformer location, remaining after
a taking by the Commonwealth of Massachusetts for Route 5, on Bishop Street
in said West Springfield containing about 599 square feet, acquired by said
deed of United Electric Light Company dated December 30, 1942, recorded in
said Hampden County Deeds, Book 1753, page 597.
E.5. Of a former dam site and hydro-generating plant known as No. 3
Substation on East Main Street in said Chicopee and Monsanto Avenue in said
Springfield containing about 14.28 acres acquired by said deed of United
Electric Light Company dated December 30, 1942, recorded in said Hampden
County Deeds, Book 1753, page 597.
E.6. Of a radio tower and associated equipment on Washington Mountain
Road in the town of Washington in said Berkshire County, containing about
10,000 square feet, acquired by deed of Arthur W. Dust et ux. dated
January 26, 1950, recorded in said Berkshire County Middle District Deeds,
Book 558, page 210.
F. Transmission and Distribution Lines
All locations of record for all transmission or distribution lines of
the Company of whatever capacity and wherever situated, of which the
following are all the lines operating at a voltage of 13,400 volts or more.
In some instances two or more lines carrying different voltages are in whole
or in part within the same location.
13,400-Volt Lines
F.1. Gardners Falls Line from said Gardners Falls Hydro-Electric
Station in Buckland running easterly through Shelburne and Greenfield to said
Montague Substation.
F.2. South Deerfield Line from said Gardners Falls Line in Greenfield
running southerly through Deerfield to said South Deerfield Substation.
F.3. Millers Falls Line from said Montague Substation easterly to said
Millers Falls Substation, all in said Montague.
F.4. A distribution line from said Millers Falls Line southerly to said
Montague Town Substation, all in said Montague.
F.5. Leyden Line in Greenfield and Leyden from said Greenfield Sub-
station northerly to said Leyden Substation.
F.6. Mount Hermon Line from said Turners Falls Station so-called, in
Montague running northerly through Gill to said Mount Hermon Substation in
Bernardston.
F.7. Underground distribution line from said Gardners Falls Line in
Montague westerly to said Greenfield Substation.
F.8. A line in Montague from said Montague Substation northerly to said
Turners Falls Station.
F.9. A line leading from a tap off said Gardners Falls Line in
Greenfield running northeasterly to said Greenfield Substation.
F.10. Lane Quarry Line from said Mount Tom Substation in Easthampton
running across the Connecticut River through the town of Hadley in a
northerly direction then easterly and southerly in said Amherst to Lane's
Quarry.
F.11. A line from said Mount Tom Substation in Easthampton running
southwesterly on the northerly side of the Easthampton Branch Railroad to
said Easthampton Substation.
F.11.A. A line from said Mount Tom Substation running southwesterly on
the northerly side of the Easthampton Branch Railroad, then northerly to the
boundary between the city of Northampton and said Easthampton and there
connecting with the lines of Northampton Electric Lighting Company.
F.12. A line in Easthampton from said Mount Tom Substation running
southerly, then westerly to said Easthampton Substation.
F.13. A line from said Chicopee Substation running southerly to the
United States Rubber Company (Fisk Tire Plant) with a tap therefrom running
easterly, to Chicopee Manufacturing Corporation and Savage Arms Corporation
(J. Stevens Arms Div.), all in Chicopee.
F.14. Willimansett Line from said Chicopee Substation running south-
westerly, southerly, and westerly to the steam generating station in
Chicopee; with a tap line running northerly to A. G. Spalding & Brothers, a
tap line running southerly to Dwight Station, and a tap line to Moore Drop
Forging Co., all in Chicopee.
F.15. Bear Hole Line from said Agawam Substation running north-
westerly, westerly, and northerly, through West Springfield, to Lanes
Quarries in Westfield.
F.16. Southwick Tap from said Bear Hole Line running southerly,
westerly, and southerly to said No. 9 Distribution Substation, with a tap
westerly to a television station, all in Agawam, and a tap in Agawam to Suzio
Quarry in Southwick.
F.17. Ramapogue Line from said Bear Hole Line in said Agawam running
northerly and easterly to Boston and Albany Railroad shops in West
Springfield.
F.18. Merrick Line from said Agawam Substation running easterly and
northerly to General Fiber Box Co. in said West Springfield.
F.19. Warehouse Point (Riverside Park) Line from said Agawam Sub-
station running southerly and easterly to Riverside Park, all in said Agawam.
F.20. A line from said West Springfield Substation underground
beneath the Connecticut River easterly to said State Street Substation in
Springfield.
23,000-Volt Lines
F.20.A. Chester Line from said Westfleld Substation running north-
westerly through Montgomery, Russell, Huntington, and Chester to Bancroft
Substation in said Becket.
F.21. West Chesterfield Line, a tap off said Chester Line in
Huntington running northerly through Huntington and Chesterfield to said Welt
Chesterfield Substation.
F.22. Dalton Line from said outdoor substation on Silver Lake Road
in Pittsfield running easterly and northeasterly to said Dalton Substation.
F.23. Coltsville Line from said Doreen Substation running northerly
to said Coltsville Substation, all in Pittsfield.
F.24. Wyandotte Line from said Coltsville Substation running
northerly and westerly to said Wyandotte Substation, all in Pittsfield.
F.25. A line from said Woodland Road Substation running southerly to
said Maple Street Substation, thence southerly and westerly to said Fairview
Street Substation, all in Lee.
F.26. A line from said Valley Mill Substation running southerly and
westerly to Hurlburt Paper Company, all in Lee.
F.27. A line from said outdoor substation on Silver Lake Road in
Pittsfield running easterly to said Doreen Substation, thence southerly
through Pittsfield and Lenox to said Woodland Road Substation.
66,000-Vott Lines
F.28. Mount Tom-Agawam Line from said Mount Tom Substation running
southerly through Easthampton, Southampton, and Westfield to said Westfield
Substation, thence running southeasterly through Agawam to said Agawam
Substation.
F.29. Cobble Mount Line from said Cobble Mountain Station running
northeasterly through Granville to a connection in Westfield with said Mount
Tom-Agawam Line.
F.30. Holyoke Tap Line from a tap in Chicopee off the
Agawam-Chicopee Line below mentioned running northerly and northwesterly to
Holyoke Water Power Company, in Holyoke.
F.31. A line from said Amherst Substation running southerly through
Amherst and Granby, thence westerly through South Hadley and Hadley across
the Connecticut River to said Mount Tom Substation.
F.32. The Hampden Tap Line, being a tap off said Agawam-Chicopee
Line at a point near the Connecticut River in Chicopee, running southerly to
said Steam Station in Chicopee.
Parallel 66,000-Volt and 115,000-Vott Lines
F.33. Two parallel lines, one of 66,000 volts known as the Montague-
Mount Tom Line, the other of 115,000 volts known as the Montague-Agawam Line,
both running from said Montague Substation northeasterly, southeasterly, and
southerly through Montague, Sunderland, Leverett, and Amherst to said Amherst
Substation.
F.34. Two parallel lines, one of 66,000 volts known as the Agawam-
Chicopee Line, and the other of 115,000 volts known as the Montague-Agawam
Line, from said Chicopee Substation running southwesterly across the Con-
necticut River thence westerly and southerly into West Springfield, said
lines being separated for a distance with individual rights of ways but
continuing parallel again through West Springfield to said Agawam Substation.
115,000-Volt Lines
F.35. A line from said Montague Substation running northerly through
Montague and Greenfield to a connection with the Harriman-Millbury line of
the New England Power Company.
F.36. Montague-Pittsfield Line from said Montague Substation running
westerly, southerly, and westerly through Montague thence westerly through
Greenfield, Deerfield, Shelburne, Conway, Ashfield, Plainfield, Windsor,
Peru, Hinsdale, Dalton, and Pittsfield to said Silver Lake Road Substation in
Pittsfield.
F.37. Lanesboro Line from said Silver Lake Road Substation in
Pittsfield running easterly to Doreen Substation thence northerly through
Pittsfield and Lanesboro to a connection with the lines of the New England
Power Company.
F.38. A line, being a portion of the Montague-Agawam Line, from said
Amherst Substation running southerly and southwesterly through Amherst and
Granby thence southerly, southeasterly, and southwesterly through Chicopee to
aid Chicopee Substation.
F.39. East Springfield Tap Line, being a tap off the Montague-Agawam
Line at a point northeasterly of the Chicopee Substation in Chicopee, running
southeasterly to the Chicopee River thence southerly across said Chicopee
River through Springfield to said East Springfield Substation.
F.40. Agawam-West Springfield Line from said Agawam Substation
running easterly through Agawam and West Springfield and again through
Agawam, thence northeasterly through West Springfield to said West
Springfield Substation.
F.41. Agawam-Hartford Line from said Agawam Substation running
southerly and southwesterly through Agawam to the Massachusetts-Connecticut
state boundary line where connection is made with Connecticut Power Company
Lines.
All the real estate and rights in real estate mentioned in this
Schedule A are conveyed subject to and with the benefit of all easements,
reservations, and restrictions which are set forth or referred to in the
respective deeds above mentioned insofar as now in force and applicable.
The Company holds a license dated January 17, 1944, as amended by
Amendment No. 1 dated April 5, 1950, and Amendment No. 2 dated January 3,
1951, granted by the Federal Power Commission for the operation and
maintenance of the hydro-electric project known as the Turners Falls
development on the Connecticut River and designated as Project No. 1889.
The project is described in the license and includes the two hydro-electric
generating stations in said Montague known as Cabot Station and Turners Falls
Station, the Turners Falls dam, the headgates, canal, and forebay, and the
land and water rights appurtenant to the project, all of which are mentioned
in Paragraph A.1. hereof, and also all structures, fixtures, equipment, and
facilities connected therewith, and the transmission lines and circuits
between said Cabot Station and the switching station near said Cabot Station.
The license is effective from January 1, 1938 to June 30, 1970, and is
subject to the provision among others, that the United States shall have the
right upon or after the expiration of the license to take over the project
upon payment as provided therein.
II. All tangible personal property now owned by the Company and
situated in any city or town within the Counties of Franklin, Hampshire,
Hampden, and Berkshire in the Commonwealth of Massachusetts, other than
property of the character described as included in paragraphs A to J, both
inclusive, of the description of the property conveyed by the Indenture to
the Trustee.
COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss.
On this 17th day of August in the year 1954 before me personally came
Howard J. Cadwell and James Gray, both to me personally known, who being by
me duly sworn did depose and say that they reside in Greenfield,
Massachusetts and in Springfield, Massachusetts, respectively; that they are
respectively president and clerk of Western Massachusetts Electric Company,
one of the corporations described in and which executed the foregoing
Indenture; that they know the seal of said corporation; that the seal affixed
to said instrument opposite the execution was affixed thereto pursuant to the
authority and order of its Board of Directors; that they signed their
respective names thereto by like authority; and each of them acknowledged
said instrument to be his free act and deed in his said capacity and the free
act and deed of Western Massachusetts Electric Company.
IN WITNESS WHEREOF I have hereunto set my hand and affixed my official
seal, at Boston in said Commonwealth, the day and year first above written.
/s/ Elliot G. Kelley
Notary Public for
the Commonwealth of Massachusetts
My commission expires: November 14, 1958
COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss.
On this 17th day of August in the year 1954 before me personally came
J. J. Walsh to me personally known, who being by me duly sworn did depose and
say that he resides in Dorchester, Massachusetts; that he is a vice-president
of Old Colony Trust Company, one of the corporations described in and which
executed the foregoing Indenture; that he knows the seal of said corporation;
that the seal affixed to said instrument opposite the execution was affixed
thereto pursuant to the authority and order of its Board of Directors; that
he signed his name thereto by like authority; and he acknowledged said
instrument to be his free act and deed in his said capacity and the free act
and deed of Old Colony Trust Company.
IN WITNESS WHEREOF I have hereunto set my hand and affixed my official
seal, at Boston in said Commonwealth, the day and year first above written.
/s/ Elliot G. Kelley
Notary Public for
the Commonwealth of Massachusetts
My commission expires: November 14, 1958
I, the undersigned, Clerk of WESTERN MASSACHUSETTS ELECTRIC COMPANY,
hereby certify that at a special meeting of the stockholders of said Company,
duly called and held at Springfield, Massachusetts, on July 23, 1954, the
following vote was duly adopted by the affirmative vote of all the
outstanding stock of said Company; and I, the undersigned, further certify
that at a meeting of the Board of Directors of said Company, duly called and
held on July 23, 1954, at which a quorum was present and voting, the same
identical vote was unanimously passed by said Board of Directors:
Further Voted: That a First Mortgage Indenture and Deed of Trust,
dated as of August 1, 1954, between the Company and Old Colony Trust
Company, as Trustee, providing for the issue of First Mortgage Bonds,
of which $11,000,000 in original aggregate principal amount are to be
issued forthwith, and known as First Mortgage Bonds, Series A, 2.95%,
due October 1, 1973, and of other and further bonds of other and
different series, and conveying, transferring, and assigning to said
Trustee as security for said First Mortgage Bonds all real estate,
rights in real estate, rights of way, and all property now owned or
hereafter to be acquired by the Company and used or planned to be used
by it in the business of operating its electric utility and steam
systems, and the franchises of the Company thereto enabling, but
excluding therefrom all cash, receivables, securities, office
furniture, vehicles, materials, supplies and the like, all as described
in paragraphs A to J, both inclusive, of the description of the
property so conveyed, transferred, or assigned, in the form as laid
before this meeting be and it is hereby approved, subject to such
changes, insertions, and omissions, not inconsistent with the general
tenor and purposes thereof as may be approved prior to the execution
thereof by the President of the Company or any Vice President of the
Company, and either the President or any Vice President be and each of
them is hereby authorized and directed to execute the same for and on
behalf of the Company and under its corporate seal, and either the
President or any Vice President be and each of them is hereby
authorized and directed to deliver the same in as many counterparts as
may be deemed desirable by the said Trustee for execution by it, and
that the execution as aforesaid of an Indenture of the above
description by either the President or any Vice President shall be
conclusive evidence that it is the Indenture in the form in which it
has been hereby approved and the execution of which is hereby
authorized.
And I further certify that Howard J. Cadwell is the President and
Robert R. Habberley is a Vice President of said Company, each of said
officers being duly authorized to execute, in the name and on behalf of said
Company, the foregoing First Mortgage Indenture and Deed of Trust, dated as
of August 1, 1954; and I am the Clerk of said Company, duly authorized to
attest the ensealing of said First Mortgage Indenture and Deed of Trust; that
the First Mortgage Indenture and Deed of Trust, to which this certificate is
attached, is substantially in the form presented to and approved at each of
said meetings held on July 23, 1954; that the foregoing is a correct copy of
the vote adopted at each of said meetings; and that the foregoing vote
remains in full force and effect without alteration.
IN WITNESS WHEREOF, I have hereunto subscribed my name as Clerk and
have caused the corporate seal of the Company to be hereunto affixed on
August 17, 1954.
/s/ James Gray
Clerk
RECORDING NOTE
The First Mortgage Indenture and Deed of Trust dated as of August 1,
1954, from Western Massachusetts Electric Company to Old Colony Trust Company
as Trustee, has been duly filed for record as follows:
in the following Registries of Deeds:
County of Franklin
County of Hampden
County of Hampshire
County of Berkshire-Middle District
County of Berkshire-Northern District
County of Berkshire-Southern District
all in the Commonwealth of Massachusetts
County of Cheshire
in the State of New Hampshire
Vernon Land Records
in the State of Vermont
and in the following Land Court Registration Districts:
County of Hampden
County of Hampshire
County of Berkshire-Middle District
all in the Commonwealth of Massachusetts.
A Confirmatory Indenture of Mortgage dated August 17, 1954, from said
Company to Old Colony Trust Company as Trustee, incorporating by reference
the terms and provisions of said First Mortgage Indenture and Deed of Trust,
was duly filed for record in the offices of the clerks of the following
cities and towns:
City of Boston
City of Springfield
City of Chicopee
City of Pittsfield
Town of West Springfield
City of Westfield
Town of Lee
Town of Greenfield
Town of Easthampton
Town of Dalton
Town of Montague
all in the Commonwealth of Massachusetts.
Exhibit 4.4.11
SEVENTY-FOURTH SUPPLEMENTAL INDENTURE dated as of the first day of
March, 1994, made and entered into by and between WESTERN MASSACHUSETTS
ELECTRIC COMPANY, a corporation organized under the laws of the
Commonwealth of Massachusetts, with its principal place of business at 174
Brush Hill Avenue, West Springfield, Massachusetts 01089 (hereinafter
generally called the Company), and THE FIRST NATIONAL BANK OF BOSTON, a
national banking association organized under the laws of the United States
of America, as successor by merger to Old Colony Trust Company, as Trustee
under the Mortgage Indenture described below, with its principal office at
100 Federal Street, Boston, Massachusetts 02110 (said The First National
Bank of Boston or, as applied to action antedating the effective date of
said merger, said Old Colony Trust Company, being hereinafter generally
called the Trustee).
WITNESSETH that:
WHEREAS the Company has heretofore executed and delivered to the
Trustee its First Mortgage Indenture and Deed of Trust(FN1) dated as of
August 1, 1954 (hereinafter as amended by a First Supplemental Indenture
dated as of October 1, 1954, called the Original Indenture, the Original
Indenture with all indentures supplemental thereto being hereinafter
generally called the Indenture), conveying certain property therein
described in trust as security for the Bonds of the Company to be issued
thereunder as therein provided and for other purposes more particularly
specified therein, and the Trustee has accepted said Trust; and
WHEREAS there are outstanding $308,219,000 aggregate principal amount
of Bonds which have been issued at various times and in various amounts and
with various dates of maturity and rates of interest and have been
denominated Series F, Series G, Series H, Series J, Series R, Series T,
Series U, Series V and Series W; and
WHEREAS the Company has authorized the issue pursuant to Section 3.08 of
the Original Indenture of an additional series of its fully registered First
Mortgage Bonds without coupons, to be issued under the Indenture, to be
designated "First Mortgage Bonds, Series X, 6-1/4%, due March 1, 1999"
(hereinafter called the Series X Bonds) and to be limited (except as
provided in Section 2.13 of the Original Indenture) in aggregate principal
amount to $40,000,000 being the entire issue of the Series X Bonds; and
WHEREAS the Company, pursuant to resolutions duly and legally adopted
by its Board of Directors at a meeting duly called and held for the
purpose, has duly authorized the execution and delivery of this
Seventy-Fourth Supplemental Indenture and the issue of the Series X Bonds
in the aggregate principal amount of $40,000,000; and
WHEREAS the issue of the Series X Bonds in said aggregate principal
amount of $40,000,000 and the execution and delivery of this Seventy-Fourth
Supplemental Indenture have been duly approved to the extent required by
law by the Department of Public Utilities of said Commonwealth and by the
Department of Public Utility Control of the State of Connecticut; and
(FN1) For details as to the filing and recording of this instrument in
Massachusetts, see Schedule C.
WHEREAS all requirements of law and of the certificate of
incorporation, as amended, and of the by-laws of the Company, including all
requisite action on the part of directors and officers, and all things
necessary to make the Series X Bonds, when duly executed by the Company and
delivered, the valid, binding, and legal obligations of the Company, and
the covenants and stipulations herein contained valid and binding
obligations of the Company, have been done and performed, and the execution
and delivery hereof have been in all respects duly authorized; and
NOW, THEREFORE, THIS SEVENTY-FOURTH SUPPLEMENTAL INDENTURE WITNESSETH:
In consideration of the premises and of the mutual covenants herein
contained and of the purchase and acceptance by the registered owners
thereof of the Series X Bonds at any time issued hereunder, and of one
dollar ($1) duly paid to the Company by the Trustee and for other good and
valuable considerations, the receipt whereof at or before the ensealing and
delivery of these presents is hereby acknowledged, and in confirmation of
and supplementing the Indenture, and in the performance and observance of
the provisions thereof, and in order to establish the form and
characteristics of the Series X Bonds, and to secure the payment of the
principal of and premium, if any, and interest on all Bonds from time to
time outstanding under the Indenture according to their tenor and effect,
and to secure the performance and observance of all the covenants and
conditions contained therein and in this Seventy-Fourth Supplemental
Indenture, the Company has executed and delivered this Seventy-Fourth
Supplemental Indenture, and does hereby confirm the conveyance, transfer,
assignment, and mortgage of the franchises and properties as set forth in
the Original Indenture and in all supplemental indentures prior hereto,
excepting only such as have been released in accordance with Article VII of
the Indenture and has granted, bargained, sold, conveyed, assigned,
transferred, mortgaged, and confirmed, and by these presents does grant,
bargain, sell, convey, assign, transfer, mortgage, and confirm unto The
First National Bank of Boston, as Trustee, as provided in the Indenture,
its successors in the trusts thereof and hereof, and its and their assigns,
all and singular the franchises and properties of the Company of the
character described and defined in the Original Indenture as Mortgaged
Property (including all and singular such franchises and properties which
may hereafter be acquired by the Company) acquired after the execution of
the Original Indenture including all real property conveyed to the Company
prior to the date hereof, including, but not limited to, the property set
forth in Schedule B appended hereto, subject, however, to Permitted
Encumbrances and to any mortgages or other liens or encumbrances thereon of
the character described in Section 4.10 of the Indenture existing at the time
of the acquisition of such franchises and properties by the Company or
created contemporaneously to secure or to raise a part of the purchase price
thereof and to any renewals or extensions of such Permitted Encumbrances,
mortgages or other liens or encumbrances.
There is furthermore expressly excepted and excluded from the lien and
operation of this Seventy-Fourth Supplemental Indenture, and from the
definition of Mortgaged Property, all the property of the Company described
in clauses A to J, both inclusive, of the granting clauses of the Original
Indenture, whether owned at the time of the execution of this
Seventy-Fourth Supplemental Indenture or thereafter acquired by it.
TO HAVE AND TO HOLD all and singular the above described franchises
and properties unto the said The First National Bank of Boston, as Trustee
under the Indenture, its successors in the trusts thereof and hereof, and
its and their assigns, to its and their own use forever.
BUT IN TRUST, NEVERTHELESS, upon the terms and trusts set forth in the
Indenture for the equal pro rata benefit, security, and protection of the
bearers or registered owners of the Bonds from time to time certified,
issued, and outstanding under the Indenture, without any discrimination,
preference, priority, or distinction of any Bond or coupon over any other
Bond or coupon by reason of series, priority in the time of issue, sale, or
negotiation thereof, or otherwise howsoever, except as otherwise provided
in the Indenture;
PROVIDED, HOWEVER, and these presents are upon the condition that if
the Company, its successors or assigns, shall pay or cause to be paid the
principal of and the premium, if any, and interest on the Bonds Outstanding
under the Indenture at the times and in the manner stipulated therein and
in the Indenture and shall keep, perform, and observe all and singular the
covenants and promises in said Bonds and in the Indenture expressed to be
kept, performed, and observed by or on the part of the Company, then this
Seventy-Fourth Supplemental Indenture and the estate and rights hereby
granted shall, pursuant to the provisions of Article XV of the Original
Indenture, cease, determine and be void, but only if the Indenture shall
have ceased, determined and become void, as therein provided, otherwise to
be and remain in full force and effect.
ARTICLE I.
DESCRIPTION AND ISSUE OF SERIES X BONDS.
Section 1.01. Series X Bonds and the certificate of authentication of
the Trustee upon said Bonds shall be substantially in the forms thereof
respectively set forth in Schedule A appended hereto, with such changes
therein as shall be approved by the Company and the Trustee. Series X
Bonds shall be designated as the First Mortgage Bonds, Series X, 6-1/4%, due
March 1, 1999 of the Company, shall be issuable in the aggregate principal
amount of forty million dollars ($40,000,000) and no more except as
provided in Section 2.13 of the Original Indenture, shall be dated as
provided in Section 1.02 of this Seventy- Fourth Supplemental Indenture,
shall mature March 1, 1999, shall bear interest at the rate specified in
their title, as provided in said Section 1.02 until the Company's obligation
in respect of the principal thereof shall be discharged, payable semiannually
on the first days of March and September in each year as provided in said
Section 1.02 (the principal and interest thereon being payable at the
principal corporate trust office of the Trustee in the City of Boston,
Massachusetts, or at the principal corporate trust office of its successors,
in such coin or currency of the United States of America as at the time of
payment is legal tender for public and private debts), shall be issued in
fully registered form in denominations of one thousand dollars ($1,000) and
any multiple thereof, shall be transferable as provided in Sectioin 2.08 of
said Original Indenture at the principal corporate trust office of the
Trustee or at the office or agency of the Company in the Borough of
Manhattan, the City of New York, New York and shall not be redeemable in
whole or in part at any time as hereinafter provided in Article III of this
Seventy-Fourth Supplemental Indenture. Notwithstanding the provisions of
Section 2.11 of the Original Indenture, no charge, except for taxes or
governmental charges, shall be made by the Company upon any registration of
transfer or exchange of Series X Bonds.
Series X Bonds in fully registered form may be exchanged at the
principal corporate trust office of the Trustee or at the office or agency
of the Company in the Borough of Manhattan, the City of New York, New York,
for a like aggregate principal amount of Series X Bonds in fully registered
form of other authorized denominations and, upon surrender for exchange of
one or more of such Series X Bonds, the Company shall execute and the
Trustee shall certify and there shall be delivered in exchange therefor a
like aggregate principal amount of such Series X Bonds of other authorized
denominations. Bonds so surrendered for exchange shall be considered as
having been surrendered for Cancellation and shall be forthwith cancelled
by the Trustee.
Pursuant to the provisions of Section 2.07 of the Original Indenture,
the Company appoints BancBoston Trust Company of New York and its successors
as the agency of the Company in the Borough of Manhattan, the City of New
York, New York, for the registration of transfer and exchange of Series X
Bonds.
Section 1.02. Notwithstanding the provisions of Section 2.12 of the
Original Indenture, the person in whose name any Series X Bond is registered
at the close of business on any record date (as herein below defined) with
respect to any interest payment date shall be entitled to receive the
interest payable on such interest payment date notwithstanding the
cancellation of such Bond upon any registration of transfer or exchange
thereof subsequent to the record date and prior to such interest payment
date, except if and to the extent the Company shall default in the payment of
the interest due on such interest payment date, then such defaulted interest
shall be paid to the person in whose name such Bond is registered on a
subsequent record date for the payment of such defaulted interest if one
shall have been established as hereinafter provided and otherwise on the date
of payment of such defaulted interest. A subsequent record date may be
established by the Company by notice mailed to the owners of Series X Bonds
not less than ten days preceding such record date, which record date shall be
not more than thirty days prior to the subsequent interest payment date. The
term "record date" as used in this Section with respect to any regular
interest payment date shall mean the February 15 or August 15, as the case
may be, next preceding such interest payment date, or, if such February 15 or
August 15 shall be a legal holiday or a day on which banking institutions
in the City of Boston, Massachusetts, are authorized by law to close, the
next preceding day which shall not be a legal holiday or a day on which
such institutions are so authorized to close.
Notwithstanding the provisions of Sections 2.01 and 2.12 of the Original
Indenture, each Series X Bond shall be dated the date of the certification
thereof by the Trustee, and shall bear interest on the principal amount
thereof payable semiannually on the first days of March and September in
each year, until the Company's obligation with respect to the principal
shall be discharged, at the rate per annum specified in the title from the
interest payment date next preceding the date thereof to which interest has
been paid on the Bonds of said series, or if the date thereof is prior to
August 16, 1994, then from the date of original issuance, or if the date
thereof be an interest payment date to which interest is being paid or a
date between the record date for any interest payment date to which
interest is paid and such interest payment date, then from such interest
payment date.
ARTICLE II.
DIVIDEND COVENANT.
Section 2.01. This Seventy-Fourth Supplemental Indenture imposes no
additional restrictions on the Company's right to declare or pay any
dividends or make any other distributions on or in respect of its common
stock or to purchase or otherwise acquire for a consideration any shares of
its common stock beyond those created by prior supplemental indentures and
those in the Company's preferred stock provisions, by-laws and those
otherwise required by law.
ARTICLE III.
REDEMPTION OF SERIES X BONDS.
The Series X Bonds shall not be redeemable as a whole or in part at
any time.
ARTICLE IV.
THE TRUSTEE.
Section 4.01. The Trustee shall be entitled to, may exercise, and shall be
protected by, where and to the full extent that the same are applicable,
all the rights, powers, privileges, immunities and exemptions provided in
the Indenture, as if the provisions concerning the same were incorporated
herein at length. The remedies and provisions of the Indenture applicable
in case of any default by the Company thereunder are hereby adopted and
made applicable in case of any default with respect to the properties
included herein and, without limitation of the generality of the foregoing,
there are hereby conferred upon the Trustee the same powers of sale and
other powers over the properties described herein as are expressed to be
conferred by the Indenture.
ARTICLE V.
DEFEASANCE.
Section 5.01. This Seventy-Fourth Supplemental Indenture shall become
void when the Indenture shall be void.
ARTICLE VI.
MISCELLANEOUS PROVISIONS.
Section 6.01. The recitals in this Seventy-Fourth Supplemental Indenture
shall be taken as recitals by the Company alone, and shall not be
considered as made by or as imposing any obligation or liability upon the
Trustee, nor shall the Trustee be held responsible for the legality or
validity of this Seventy- Fourth Supplemental Indenture, and the Trustee
makes no covenants or representations, and shall not be responsible, as to
or for the effect, authorization, execution, delivery, or recording of this
Seventy-Fourth Supplemental Indenture, except as expressly set forth in the
Original Indenture. The Trustee shall not be taken impliedly to waive by
this Seventy- Fourth Supplemental Indenture any right it would otherwise
have as provided in the Original Indenture, this Seventy-Fourth
Supplemental Indenture shall hereafter form a part of the Indenture.
Section 6.02. This Seventy-Fourth Supplemental Indenture may be
simultaneously executed in any number of counterparts, each of which shall
be deemed an original; and all said counterparts executed and delivered,
each as an original, shall constitute but one and the same instrument,
which shall for all purposes be sufficiently evidenced by any such original
counterpart.
IN WITNESS WHEREOF, said Western Massachusetts Electric Company has
caused this instrument to be executed in its corporate name by its
President or one of its Vice Presidents and by its Treasurer or an
Assistant Treasurer, thereunto duly authorized, and its corporate seal to
be hereto affixed and attested by its Clerk or an Assistant Clerk, and said
The First National Bank of Boston has caused this instrument to be executed
in its corporate name by one of its Authorized Officers, thereunto duly
authorized, and its corporate seal to be hereto affixed, all as of the day
and year first above written.
WESTERN MASSACHUSETTS ELECTRIC COMPANY
By /s/John B. Keane
Vice President
and by/s/Robert C. Aronson
Assistant Treasurer
Attest: (CORPORATE SEAL)
/s/ Mark A. Joyse
Assistant Clerk
Signed, sealed and delivered by Western Massachusetts Electric Company in
our presence:
/s/ Tracy DeCredico
/s/ Jeffery C. Miller
THE FIRST NATIONAL BANK OF BOSTON,
Trustee
By /s/Mark Nelson
Authorized Officer
(CORPORATE SEAL)
Signed, sealed and delivered by
The First National Bank of Boston
in our presence:
/s/Traci Martin
/s/Kecia Banks
STATE OF CONNECTICUT
BERLIN
COUNTY OF HARTFORD
On this 9th day of March in the year 1994 before me personally came
John B. Keane and Robert C. Aronson, to me personally known, who being by
me duly sworn did depose and say that they are respectively Vice President
and Assistant Treasurer of Western Massachusetts Electric Company, one of
the corporations described in and which executed the foregoing instrument;
that they know the seal of said corporation; that the seal affixed to said
instrument opposite the execution was affixed thereto pursuant to the
authority of its Board of Directors; that they signed their names thereto
by like authority; and they acknowledged said instrument to be their free
act and deed in their said respective capacities and the free act and deed
of Western Massachusetts Electric Company.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal, at Berlin in said State, the day and year first above
written.
/s/ Maureen Rothwell
Maureen J. Rothwell
Notary Public for the
State of Connecticut
My commission expires: May 31, 1996
(NOTARIAL SEAL)
COMMONWEALTH OF MASSACHUSETTS
BOSTON
COUNTY OF SUFFOLK
On this 11th day of March in the year 1994 before me personally came
Mark Nelson, to me personally known, who being by me duly sworn
did depose and say that he is an authorized officer of The First National
Bank of Boston, one of the corporations described in and which executed the
foregoing instrument; that he knows the seal of said corporation; that the
seal affixed to said instrument opposite the execution was affixed thereto
pursuant to the authority of its Board of Directors; that he signed his
name thereto by like authority; and he acknowledged said instrument to be
his free act and deed in his said capacity and the free act and deed of The
First National Bank of Boston.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal, at Boston in said Commonwealth, the day and year first above
written.
/s/ Shawn Patrick George
Notary Public for the
Commonwealth of
Massachusetts
My commission expires: September 2, 1999
(NOTARIAL SEAL)
Schedule A
[FORM OF BOND]
No. $
WESTERN MASSACHUSETTS ELECTRIC COMPANY
First Mortgage Bond, Series X, 6-1/4%, due March 1, 1999
FOR VALUE RECEIVED, WESTERN MASSACHUSETTS ELECTRIC COMPANY, a
corporation of the Commonwealth of Massachusetts (hereinafter called the
Company), hereby promises to pay to , registered
assigns, the principal sum of dollars, on the first day of
March, 1999, and to pay interest on said sum semiannually on the first days
of March and September in each year until the Company's obligation with
respect to said principal sum shall be discharged at the rate per annum
specified in the title of this Bond from the interest payment date next
preceding the date hereof to which interest has been paid on the Bonds of
this series, or if the date hereof is prior to August 16, 1994, then from
the date of original issuance, or if the date hereof be an interest payment
date to which interest is being paid or a date between the record date for
any interest payment date to which interest is paid and such interest
payment date, then from such interest payment date. Both principal and
interest shall be payable at the principal corporate trust office in the
City of Boston in the County of Suffolk in said Commonwealth of The First
National Bank of Boston (hereinafter with its successors, generally called
the Trustee), or at the principal corporate trust office of its successors,
in such coin or currency of the United States of America as at the time of
payment is legal tender for public and private debts.
Each installment of interest hereon (other than overdue interest)
shall be payable to the person (as defined in the Original Indenture
mentioned on the reverse hereof) who shall be the registered owner of this
Bond at the close of business on the record date, which shall be the
February 15 or August 15, as the case may be, next preceding such interest
payment date, or, if such February 15 or August 15 shall be a legal holiday
or a day on which banking institutions in the City of Boston,
Massachusetts, are authorized by law to close, the next preceding day which
shall not be a legal holiday or a day on which such institutions are so
authorized to close.
Reference is hereby made to the further provisions of this Bond set
forth on the reverse hereof, including without limitation provisions in
regard to the registration of transfer and exchangeability of this Bond,
and such further provisions shall for all purposes have the same effect as
though fully set forth in this place.
This Bond shall take effect as a sealed instrument.
This Bond shall not become or be valid or obligatory until the
certificate of authentication hereon shall have been signed by the Trustee.
IN WITNESS WHEREOF, WESTERN MASSACHUSETTS ELECTRIC COMPANY has caused
this Bond to be executed in its name and on its behalf by its President or
a Vice President and its Treasurer or an Assistant Treasurer thereunto duly
authorized, and its corporate seal to be impressed or imprinted hereon.
Dated: WESTERN MASSACHUSETTS ELECTRIC COMPANY
By
By
CERTIFICATE OF AUTHENTICATION
This Bond is one of the First Mortgage Bonds, Series X, 6-1/4%, due
March 1, 1999, described and provided for in the within mentioned
Indenture.
THE FIRST NATIONAL BANK OF BOSTON,
TRUSTEE
By
Authorized Signatory
[FORM OF BOND]
[REVERSE]
This Bond is one of a series of Bonds in fully registered form known
as the "First Mortgage Bonds, Series X, 6-1/4%, due March 1, 1999" of the
Company, limited to forty million dollars ($40,000,000) in aggregate
principal amount (except as provided by the terms of Section 2.13 of the
Original Indenture mentioned below), and issued under and secured by a First
Mortgage Indenture and Deed of Trust between the Company and Old Colony
Trust Company (now The First National Bank of Boston, successor by merger)
as Trustee, dated as of August 1, 1954 (herein as amended by a First
Supplemental Indenture dated as of October 1, 1954, called the Original
Indenture, the Original Indenture with all indentures supplemental thereto,
including specifically the Seventy-Fourth Supplemental Indenture dated as
of March 1, 1994, being herein generally called the Indenture) and said
Seventy-Fourth Supplemental Indenture, an executed counterpart of each of
which is on file at the principal corporate trust office of the Trustee, to
which Indenture reference is hereby made for a description of the nature
and extent of the security, the rights thereunder of the bearers or
registered owners of Bonds issued and to be issued thereunder, the rights,
duties, and immunities thereunder of the Trustee, the rights and
obligations thereunder of the Company, and the terms and conditions upon
which said Bonds, and other and further Bonds of other series, are issued
and are to be issued; but neither the foregoing reference to the Indenture
nor any provision of this Bond or of the Indenture shall affect or impair
the obligation of the Company, which is absolute, unconditional and
unalterable, to pay at the maturities herein provided the principal of and
interest on this Bond as herein provided.
The Bonds of this series are issuable in fully registered form in
denominations of one thousand dollars ($1,000) and any multiple thereof.
This Bond is transferable by the registered owner hereof upon
surrender hereof at the principal corporate trust office of the Trustee or
at the office or agency of the Company in the Borough of Manhattan, the
City of New York, New York, together with a written instrument of transfer
in approved form signed by the registered owner or by his duly authorized
attorney, and a new Bond or Bonds of this series for a like principal
amount will be issued in exchange, all as provided in the Indenture. Prior
to due presentment for registration of transfer of this Bond the Company
and the Trustee may deem and treat the registered owner hereof as the
absolute owner hereof, whether or not this Bond be overdue, for the purpose
of receiving payment and for all other purposes, and neither the Company
nor the Trustee shall be affected by any notice to the contrary.
This Bond is exchangeable at the option of the registered owner hereof
at the principal corporate trust office of the Trustee or at the office or
agency of the Company in the Borough of Manhattan, the City of New York,
New York, for an equal principal amount of fully registered bonds of this
series of other authorized denominations, in the manner and on the terms
provided in the Indenture.
Bonds of this series are to be issued initially under a book-entry
only system and, except as hereinafter provided, registered in the name of
The Depository Trust Company, New York, New York ("DTC") or its nominee,
which shall be considered to be the holder of all bonds of this series for
all purposes of the Mortgage, including, without limitation, payment by the
Company of principal of and interest on such bonds of this series and
receipt of notices and exercise of rights of holders of such bonds of this
series. There shall be a single bond of this series which shall be
immobilized in the custody of DTC with the owners of book-entry interests
in bonds of this series ("Book-Entry Interests") having no right to receive
bonds of this series in the form of physical securities or certificates.
Ownership of Book-Entry Interests shall be shown by book-entry on the
system maintained and operated by DTC, its participants (the
"Participants") and certain persons acting through the Participants.
Transfer of ownership of Book-Entry Interests are to be made only by DTC
and the Participants by that book-entry system, the Company and the Trustee
having no responsibility therefor so long as bonds of this series are
registered in the name of DTC or its nominee. DTC is to maintain records
of positions of Participants in bonds of this series, and the Participants
and persons acting through Participants are to maintain records of the
purchasers and owners of Book-Entry Interests. If DTC or its nominee
determines not to continue to act as a depository for the bonds of this
series in connection with a book-entry only system, another depository, if
available, may act instead and the single bond of this series will be
transferred into the name of such other depository or its nominee, in which
case the above provisions will continue to apply but to the new depository.
If the book- entry only system for bonds of this series is discontinued for
any reason upon surrender and cancellation of the single bond of this
series registered in the name of the then depository or its nominee, new
registered bonds of this series will be issued in authorized denominations
to the holder of Book-Entry Interests shown on the book-entry system
immediately prior to the discontinuance thereof. Neither the Trustee nor
the Company shall be responsible for the accuracy of the interests shown on
that system.
The Bonds of this series are not subject to redemption as a whole or
in part at any time.
The Indenture contains provisions permitting the Company and the
Trustee with the consent of the bearers or registered owners of not less
than seventy percentum (70%) in principal amount of the Bonds at the time
outstanding (except Bonds held by or for the benefit of the Company),
including, if more than one series of Bonds shall be at the time
outstanding, not less than seventy percentum (70%) in principal amount of
the Bonds (except Bonds held by or for the benefit of the Company) of each
series affected differently from those of other series, to effect by
supplemental indenture modifications or alterations of the Indenture and of
the rights and obligations of the Company and of the bearers and registered
owners of the Bonds; but no such modification or alteration shall be made
which, without the written approval or consent of the registered owner
hereof, will extend the maturity hereof or reduce the rate or extend the
time for payment of interest hereon or change the amount of the principal
hereof or of any premium payable on the redemption hereof, or which will
reduce the percentage of the principal amount of Bonds or the percentage of
the principal amount of Bonds of any one series required for the adoption
of the modifications or alterations as aforesaid, or authorize the creation
by the Company, except as expressly authorized by the Indenture, of any
mortgage, pledge, or lien upon the property subjected thereto ranking prior
to or on an equality with the lien thereof.
If a default as defined in the Indenture shall occur, the principal of
this Bond may become or be declared due and payable before maturity, in the
manner and with the effect provided in the Indenture; but any default and
the consequences thereof may be waived by certain percentages of the
bearers or registered owners of Bonds, all as provided in the Indenture.
No recourse shall be had for the payment of the principal of or the
interest on this Bond or for any claim based hereon or otherwise in respect
hereof or of the Indenture against any incorporator, stockholder, director,
or officer, past, present, or future, as such, of the Company or of any
predecessor or successor corporation under any constitution, statute, or
rule of law, or by the enforcement of any assessment, penalty, or
otherwise, all such liability being waived and released by the holder
hereof by the acceptance of this Bond.
Schedule B
NONE
Schedule C
Detail of Filing and Recording of First Mortgage Indenture and Deed
of Trust dated as of August 1, 1954 in Massachusetts.
Date
Recorded Doc. No. Book Page
Registry of Deeds
County of Berkshire
Middle District 8/18/54 22357 614 395
Northern District 8/18/54 2684 512 97
Southern District 8/18/54 None 310 379
Assigned
County of Franklin 8/18/54 3501 1007 2
County of Hampshire 8/18/54 5070 1175 388
County of Hampden 8/15/54 20682 2331 1
Registry District of Land Court
County of Berkshire
Middle District 10/4/54 8407-A
Northern District 11/5/68 3115
County of Hampshire 8/18/54 822
County of Hampden 8/19/54 18800
Office of Town Clerk,
West Springfield* 3/22/67 6917 None Assigned
*Confirmatory Indenture of
Mortgage filed 8/18/54 None 54 121
Assigned
Secretary of the Commonwealth 442315
Exhibit 4.4.12
SEVENTY-FIFTH SUPPLEMENTAL INDENTURE dated as of the first day of
March, 1994, made and entered into by and between WESTERN MASSACHUSETTS
ELECTRIC COMPANY, a corporation organized under the laws of the
Commonwealth of Massachusetts, with its principal place of business at 174
Brush Hill Avenue, West Springfield, Massachusetts 01089 (hereinafter
generally called the Company), and THE FIRST NATIONAL BANK OF BOSTON, a
national banking association organized under the laws of the United States
of America, as successor by merger to Old Colony Trust Company, as Trustee
under the Mortgage Indenture described below, with its principal office at
100 Federal Street, Boston, Massachusetts 02110 (said The First National
Bank of Boston or, as applied to action antedating the effective date of
said merger, said Old Colony Trust Company, being hereinafter generally
called the Trustee).
WITNESSETH that:
WHEREAS the Company has heretofore executed and delivered to the
Trustee its First Mortgage Indenture and Deed of Trust(FN1) dated as of
August 1, 1954 (hereinafter as amended by a First Supplemental Indenture
dated as of October 1, 1954, called the Original Indenture, the Original
Indenture with all indentures supplemental thereto being hereinafter
generally called the Indenture), conveying certain property therein
described in trust as security for the Bonds of the Company to be issued
thereunder as therein provided and for other purposes more particularly
specified therein, and the Trustee has accepted said Trust; and
WHEREAS there are outstanding $348,219,000 aggregate principal amount
of Bonds which have been issued at various times and in various amounts and
with various dates of maturity and rates of interest and have been
denominated Series F, Series G, Series H, Series J, Series R, Series T,
Series U, Series V, Series W and Series X; and
WHEREAS the Company has authorized the issue pursuant to Section 3.08
of the Original Indenture of an additional series of its fully registered
First Mortgage Bonds without coupons, to be issued under the Indenture, to
be designated "First Mortgage Bonds, Series Y, 7-3/4%, due March 1, 2024"
(hereinafter called the Series Y Bonds) and to be limited (except as
provided in Section 2.13 of the Original Indenture) in aggregate principal
amount to $50,000,000 being the entire issue of the Series Y Bonds; and
WHEREAS the Company, pursuant to resolutions duly and legally adopted
by its Board of Directors at a meeting duly called and held for the
purpose, has duly authorized the execution and delivery of this
Seventy-Fifth Supplemental Indenture and the issue of the Series Y Bonds in
the aggregate principal amount of $50,000,000; and
WHEREAS the issue of the Series Y Bonds in said aggregate principal
amount of $50,000,000 and the execution and delivery of this Seventy-Fifth
Supplemental Indenture have been duly approved to the extent required by
law by the Department of Public Utilities of said Commonwealth and by the
Department of Public Utility Control of the State of Connecticut; and
(FN1) For details as to the filing and recording of this instrument in
Massachusetts, see Schedule C.
WHEREAS all requirements of law and of the certificate of
incorporation, as amended, and of the by-laws of the Company, including all
requisite action on the part of directors and officers, and all things
necessary to make the Series Y Bonds, when duly executed by the Company and
delivered, the valid, binding, and legal obligations of the Company, and
the covenants and stipulations herein contained valid and binding
obligations of the Company, have been done and performed, and the execution
and delivery hereof have been in all respects duly authorized; and
NOW, THEREFORE, THIS SEVENTY-FIFTH SUPPLEMENTAL INDENTURE WITNESSETH:
In consideration of the premises and of the mutual covenants herein
contained and of the purchase and acceptance by the registered owners
thereof of the Series Y Bonds at any time issued hereunder, and of one
dollar ($1) duly paid to the Company by the Trustee and for other good and
valuable considerations, the receipt whereof at or before the ensealing and
delivery of these presents is hereby acknowledged, and in confirmation of
and supplementing the Indenture, and in the performance and observance of
the provisions thereof, and in order to establish the form and
characteristics of the Series Y Bonds, and to secure the payment of the
principal of and premium, if any, and interest on all Bonds from time to
time outstanding under the Indenture according to their tenor and effect,
and to secure the performance and observance of all the covenants and
conditions contained therein and in this Seventy-Fifth Supplemental
Indenture, the Company has executed and delivered this Seventy-Fifth
Supplemental Indenture, and does hereby confirm the conveyance, transfer,
assignment, and mortgage of the franchises and properties as set forth in
the Original Indenture and in all supplemental indentures prior hereto,
excepting only such as have been released in accordance with Article VII of
the Indenture and has granted, bargained, sold, conveyed, assigned,
transferred, mortgaged, and confirmed, and by these presents does grant,
bargain, sell, convey, assign, transfer, mortgage, and confirm unto The
First National Bank of Boston, as Trustee, as provided in the Indenture,
its successors in the trusts thereof and hereof, and its and their assigns,
all and singular the franchises and properties of the Company of the
character described and defined in the Original Indenture as Mortgaged
Property (including all and singular such franchises and properties which
may hereafter be acquired by the Company) acquired after the execution of
the Original Indenture including all real property conveyed to the Company
prior to the date hereof, including, but not limited to, the property set
forth in Schedule B appended hereto, subject, however, to Permitted
Encumbrances and to any mortgages or other liens or encumbrances thereon of
the character described in Section 4.10 of the Indenture existing at the
time of the acquisition of such franchises and properties by the Company or
created contemporaneously to secure or to raise a part of the purchase
price thereof and to any renewals or extensions of such Permitted
Encumbrances, mortgages or other liens or encumbrances.
There is furthermore expressly excepted and excluded from the lien and
operation of this Seventy-Fifth Supplemental Indenture, and from the
definition of Mortgaged Property, all the property of the Company described
in clauses A to J, both inclusive, of the granting clauses of the Original
Indenture, whether owned at the time of the execution of this Seventy-Fifth
Supplemental Indenture or thereafter acquired by it.
TO HAVE AND TO HOLD all and singular the above described franchises
and properties unto the said The First National Bank of Boston, as Trustee
under the Indenture, its successors in the trusts thereof and hereof, and
its and their assigns, to its and their own use forever.
BUT IN TRUST, NEVERTHELESS, upon the terms and trusts set forth in the
Indenture for the equal pro rata benefit, security, and protection of the
bearers or registered owners of the Bonds from time to time certified,
issued, and outstanding under the Indenture, without any discrimination,
preference, priority, or distinction of any Bond or coupon over any other
Bond or coupon by reason of series, priority in the time of issue, sale, or
negotiation thereof, or otherwise howsoever, except as otherwise provided
in the Indenture;
PROVIDED, HOWEVER, and these presents are upon the condition that if
the Company, its successors or assigns, shall pay or cause to be paid the
principal of and the premium, if any, and interest on the Bonds Outstanding
under the Indenture at the times and in the manner stipulated therein and
in the Indenture and shall keep, perform, and observe all and singular the
covenants and promises in said Bonds and in the Indenture expressed to be
kept, performed, and observed by or on the part of the Company, then this
Seventy-Fifth Supplemental Indenture and the estate and rights hereby
granted shall, pursuant to the provisions of Article XV of the Original
Indenture, cease, determine and be void, but only if the Indenture shall
have ceased, determined and become void, as therein provided, otherwise to
be and remain in full force and effect.
ARTICLE I.
DESCRIPTION AND ISSUE OF SERIES Y BONDS.
Section 1.01. Series Y Bonds and the certificate of authentication
of the Trustee upon said Bonds shall be substantially in the forms thereof
respectively set forth in Schedule A appended hereto, with such changes
therein as shall be approved by the Company and the Trustee. Series Y
Bonds shall be designated as the First Mortgage Bonds, Series Y, 7-3/4%,
due March 1, 2024 of the Company, shall be issuable in the aggregate
principal amount of fifty million dollars ($50,000,000) and no more except
as provided in Section 2.13 of the Original Indenture, shall be dated as
provided in Section 1.02 of this Seventy- Fifth Supplemental Indenture,
shall mature March 1, 2024, shall bear interest at the rate specified in
their title, as provided in said Section 1.02 until the Company's
obligation in respect of the principal thereof shall be discharged, payable
semiannually on the first days of March and September in each year as
provided in said Section 1.02 (the principal, premium, if any, and interest
thereon being payable at the principal corporate trust office of the
Trustee in the City of Boston, Massachusetts, or at the principal corporate
trust office of its successors, in such coin or currency of the United
States of America as at the time of payment is legal tender for public and
private debts), shall be issued in fully registered form in denominations
of one thousand dollars ($1,000) and any multiple thereof, shall be
transferable as provided in Section 2.08 of said Original Indenture at the
principal corporate trust office of the Trustee or at the office or agency
of the Company in the Borough of Manhattan, the City of New York, New York,
and shall be redeemable at the times and in the manner provided in Article
V of the Original Indenture and as hereinafter provided in Article III of
this Seventy-Fifth Supplemental Indenture. Notwithstanding the provisions
of Section 2.11 of the Original Indenture, no charge, except for taxes or
governmental charges, shall be made by the Company upon any registration of
transfer or exchange of Series Y Bonds.
Series Y Bonds in fully registered form may be exchanged at the
principal corporate trust office of the Trustee or at the office or agency
of the Company in the Borough of Manhattan, the City of New York, New York,
for a like aggregate principal amount of Series Y Bonds in fully registered
form of other authorized denominations and, upon surrender for exchange of
one or more of such Series Y Bonds, the Company shall execute and the
Trustee shall certify and there shall be delivered in exchange therefor a
like aggregate principal amount of such Series Y Bonds of other authorized
denominations. Bonds so surrendered for exchange shall be considered as
having been surrendered for Cancellation and shall be forthwith cancelled
by the Trustee.
Pursuant to the provisions of Section 2.07 of the Original Indenture,
the Company appoints BancBoston Trust Company of New York and its successors
as the agency of the Company in the Borough of Manhattan, the City of New
York, New York, for the registration of transfer and exchange of Series Y
Bonds.
Section 1.02. Notwithstanding the provisions of Section 2.12 of the
Original Indenture, the person in whose name any Series Y Bond is registered
at the close of business on any record date (as herein below defined) with
respect to any interest payment date shall be entitled to receive the
interest payable on such interest payment date notwithstanding the
cancellation of such Bond upon any registration of transfer or exchange
thereof subsequent to the record date and prior to such interest payment
date, except if and to the extent the Company shall default in the payment of
the interest due on such interest payment date, then such defaulted interest
shall be paid to the person in whose name such Bond is registered on a
subsequent record date for the payment of such defaulted interest if one
shall have been established as hereinafter provided and otherwise on the date
of payment of such defaulted interest. A subsequent record date may be
established by the Company by notice mailed to the owners of Series Y Bonds
not less than ten days preceding such record date, which record date shall be
not more than thirty days prior to the subsequent interest payment date. The
term "record date" as used in this Section with respect to any regular
interest payment date shall mean the February 15 or August 15, as the case
may be, next preceding such interest payment date, or, if such February 15 or
August 15 shall be a legal holiday or a day on which banking institutions
in the City of Boston, Massachusetts, are authorized by law to close, the
next preceding day which shall not be a legal holiday or a day on which
such institutions are so authorized to close.
Notwithstanding the provisions of Sections 2.01 and 2.12 of the Original
Indenture, each Series Y Bond shall be dated the date of the certification
thereof by the Trustee, and shall bear interest on the principal amount
thereof payable semiannually on the first days of March and September in
each year, until the Company's obligation with respect to the principal
shall be discharged, at the rate per annum specified in the title from the
interest payment date next preceding the date thereof to which interest has
been paid on the Bonds of said series, or if the date thereof is prior to
August 16, 1994, then from the date of original issuance, or if the date
thereof be an interest payment date to which interest is being paid or a
date between the record date for any interest payment date to which
interest is paid and such interest payment date, then from such interest
payment date.
ARTICLE II.
DIVIDEND COVENANT.
Section 2.01. This Seventy-Fifth Supplemental Indenture imposes no
additional restrictions on the Company's right to declare or pay any
dividends or make any other distributions on or in respect of its common
stock or to purchase or otherwise acquire for a consideration any shares of
its common stock beyond those created by prior supplemental indentures and
those in the Company's preferred stock provisions, by-laws and those
otherwise required by law.
ARTICLE III.
REDEMPTION OF SERIES Y BONDS.
Section 3.01. The Series Y Bonds shall not be redeemable as a whole or in
part before March 1, 1999. Thereafter, subject to the provisions of Section
5.06 of the Original Indenture, the Series Y Bonds shall be redeemable as a
whole at any time, or, in part, from time to time, either at the option of
the Company or for the purposes of other applicable provisions of the
Indenture (i) if from moneys received by the Trustee pursuant to Section
4.05, Section 7.03, Section 7.04, Section 7.05, or Section 7.07 of the
Original Indenture or Section 4.18 of the Indenture to be applied by the
Trustee as provided in Section 8.03(a) or in Section 8.05
of the Original Indenture, at the applicable percentages of the called
principal amount thereof specified under the column headed Special
Redemption Price in the form of Series Y Bond set forth in Schedule A
appended hereto, and (ii) if at the option of the Company pursuant to any
provisions of the Indenture, other than those in respect of the aforesaid
moneys applied pursuant to Section 8.03(a) or Section 8.05 of the Original
Indenture, at the applicable percentages of the called principal amount
thereof specified under the column headed Optional Redemption Price in the
form of Series Y Bond set forth in Schedule A appended hereto, together in
each case with accrued and unpaid interest to the date fixed for redemption.
Section 3.02 Notice of redemption of the Series Y Bonds either as a whole
or in part shall be mailed by the Trustee by first class mail, postage
prepaid, to the registered owner or owners of each Series Y Bond called for
redemption either in whole or in part not less than thirty (30) or more
than sixty (60) days prior to the date set for redemption at their last
addresses as they shall appear upon the books for registration kept by the
Registrar. Any notice given in the foregoing manner shall be conclusively
deemed to have been duly given whether or not received by the owner or
owners. Failure to give such notice by mail to the owner or owners of any
Series Y Bond designated for redemption in whole or in part, or any defect
therein, shall not affect the validity of any proceedings for the
redemption of any other Series Y Bond. Except as aforesaid and except that
(a) Published Notice need not be given, (b) in the event a Series Y Bond
shall be called for redemption in its entirety the notice herein provided
need not contain the number of the Bond so called, and (c) any such notice
may be made subject to the deposit of redemption moneys with the Trustee
before the date fixed for redemption, the applicable provisions of Article
V of the Original Indenture shall control and be followed in all matters
connected with the redemption and payment of Series Y Bonds.
ARTICLE IV.
THE TRUSTEE.
Section 4.01. The Trustee shall be entitled to, may exercise, and shall be
protected by, where and to the full extent that the same are applicable,
all the rights, powers, privileges, immunities and exemptions provided in
the Indenture, as if the provisions concerning the same were incorporated
herein at length. The remedies and provisions of the Indenture applicable
in case of any default by the Company thereunder are hereby adopted and
made applicable in case of any default with respect to the properties
included herein and, without limitation of the generality of the foregoing,
there are hereby conferred upon the Trustee the same powers of sale and
other powers over the properties described herein as are expressed to be
conferred by the Indenture.
ARTICLE V.
DEFEASANCE.
Section 5.01. This Seventy-Fifth Supplemental Indenture shall become void
when the Indenture shall be void.
ARTICLE VI.
MISCELLANEOUS PROVISIONS.
Section 6.01. The recitals in this Seventy-Fifth Supplemental Indenture
shall be taken as recitals by the Company alone, and shall not be
considered as made by or as imposing any obligation or liability upon the
Trustee, nor shall the Trustee be held responsible for the legality or
validity of this Seventy-Fifth Supplemental Indenture, and the Trustee
makes no covenants or representations, and shall not be responsible, as to
or for the effect, authorization, execution, delivery, or recording of this
Seventy-Fifth Supplemental Indenture, except as expressly set forth in the
Original Indenture. The Trustee shall not be taken impliedly to waive by
this Seventy-Fifth Supplemental Indenture any right it would otherwise have
as provided in the Original Indenture, this Seventy-Fifth Supplemental
Indenture shall hereafter form a part of the Indenture.
Section 6.02. This Seventy-Fifth Supplemental Indenture may be
simultaneously executed in any number of counterparts, each of which shall
be deemed an original; and all said counterparts executed and delivered,
each as an original, shall constitute but one and the same instrument,
which shall for all purposes be sufficiently evidenced by any such original
counterpart.
IN WITNESS WHEREOF, said Western Massachusetts Electric Company has
caused this instrument to be executed in its corporate name by its
President or one of its Vice Presidents and by its Treasurer or an
Assistant Treasurer, thereunto duly authorized, and its corporate seal to
be hereto affixed and attested by its Clerk or an Assistant Clerk, and said
The First National Bank of Boston has caused this instrument to be executed
in its corporate name by one of its Authorized Officers, thereunto duly
authorized, and its corporate seal to be hereto affixed, all as of the day
and year first above written.
WESTERN MASSACHUSETTS ELECTRIC COMPANY
By /s/John B. Keane
Vice President
and by /s/ Robert C. Aronson
Assistant Treasurer
Attest: (CORPORATE SEAL)
/s/ Mark A. Joyse
Assistant Clerk
Signed, sealed and delivered by
Western Massachusetts Electric
Company in our presence:
/s/Tracy A. DeCredico
/s/Jeffrey C. Miller
THE FIRST NATIONAL BANK OF BOSTON,
Trustee
By /s/Mark Nelson
Authorized Officer
(CORPORATE SEAL)
Signed, sealed and delivered
by The First National Bank of Boston
in our presence:
/s/Traci Martin
/s/Kecia Banks
STATE OF CONNECTICUT
BERLIN
COUNTY OF HARTFORD
On this 9th day of March in the year 1994 before me personally came
John B. Keane and Robert C. Aronson, to me personally known, who being by
me duly sworn did depose and say that they are respectively Vice President
and Assistant Treasurer of Western Massachusetts Electric Company, one of
the corporations described in and which executed the foregoing instrument;
that they know the seal of said corporation; that the seal affixed to said
instrument opposite the execution was affixed thereto pursuant to the
authority of its Board of Directors; that they signed their names thereto
by like authority; and they acknowledged said instrument to be their free
act and deed in their said respective capacities and the free act and deed
of Western Massachusetts Electric Company.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal, at Berlin in said State, the day and year first above
written.
/s/ Maureen J. Rothwell
Maureen J. Rothwell
Notary Public for the
State of Connecticut
My commission expires: May 31, 1996
(NOTARIAL SEAL)
COMMONWEALTH OF MASSACHUSETTS
BOSTON
COUNTY OF SUFFOLK
On this 11th day of March in the year 1994 before me personally came
Mark Nelson, to me personally known, who being by me duly sworn
did depose and say that he is an authorized officer of The First National
Bank of Boston, one of the corporations described in and which executed the
foregoing instrument; that he knows the seal of said corporation; that the
seal affixed to said instrument opposite the execution was affixed thereto
pursuant to the authority of its Board of Directors; that he signed his
name thereto by like authority; and he acknowledged said instrument to be
his free act and deed in his said capacity and the free act and deed of The
First National Bank of Boston.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal, at Boston in said Commonwealth, the day and year first above
written.
/s/Shawn Patrick George
Notary Public for the
Commonwealth of
Massachusetts
My commission expires: September 2, 1999
(NOTARIAL SEAL)
Schedule A
[FORM OF BOND]
No. $
WESTERN MASSACHUSETTS ELECTRIC COMPANY
First Mortgage Bond, Series Y, 7-3/4%, due March 1, 2024
FOR VALUE RECEIVED, WESTERN MASSACHUSETTS ELECTRIC COMPANY, a
corporation of the Commonwealth of Massachusetts (hereinafter called the
Company), hereby promises to pay to , or registered
assigns, the principal sum of dollars, on the first day of
March, 2024, and to pay interest on said sum semiannually on the first days
of March and September in each year until the Company's obligation with
respect to said principal sum shall be discharged at the rate per annum
specified in the title of this Bond from the interest payment date next
preceding the date hereof to which interest has been paid on the Bonds of
this series, or if the date hereof is prior to August 16, 1994, then from
the date of original issuance, or if the date hereof be an interest payment
date to which interest is being paid or a date between the record date for
any interest payment date to which interest is paid and such interest
payment date, then from such interest payment date. Both principal and
interest shall be payable at the principal corporate trust office in the
City of Boston in the County of Suffolk in said Commonwealth of The First
National Bank of Boston (hereinafter with its successors, generally called
the Trustee), or at the principal corporate trust office of its successors,
in such coin or currency of the United States of America as at the time of
payment is legal tender for public and private debts.
Each installment of interest hereon (other than overdue interest)
shall be payable to the person (as defined in the Original Indenture
mentioned on the reverse hereof) who shall be the registered owner of this
Bond at the close of business on the record date, which shall be the
February 15 or August 15, as the case may be, next preceding such interest
payment date, or, if such February 15 or August 15 shall be a legal holiday
or a day on which banking institutions in the City of Boston,
Massachusetts, are authorized by law to close, the next preceding day which
shall not be a legal holiday or a day on which such institutions are so
authorized to close.
Reference is hereby made to the further provisions of this Bond set
forth on the reverse hereof, including without limitation provisions in
regard to the registration of transfer and exchangeability of this Bond,
and such further provisions shall for all purposes have the same effect as
though fully set forth in this place.
This Bond shall take effect as a sealed instrument.
This Bond shall not become or be valid or obligatory until the
certificate of authentication hereon shall have been signed by the Trustee.
IN WITNESS WHEREOF, WESTERN MASSACHUSETTS ELECTRIC COMPANY has caused
this Bond to be executed in its name and on its behalf by its President or
a Vice President and its Treasurer or an Assistant Treasurer thereunto duly
authorized, and its corporate seal to be impressed or imprinted hereon.
Dated: WESTERN MASSACHUSETTS ELECTRIC
COMPANY
By
By
CERTIFICATE OF AUTHENTICATION
This Bond is one of the First Mortgage Bonds, Series Y, 7-3/4%, due
March 1, 2024, described and provided for in the within mentioned
Indenture.
THE FIRST NATIONAL BANK OF BOSTON,
TRUSTEE
By
Authorized Signatory
[FORM OF BOND]
[REVERSE]
This Bond is one of a series of Bonds in fully registered form known
as the "First Mortgage Bonds, Series Y, 7-3/4%, due March 1, 2024" of the
Company, limited to fifty million dollars ($50,000,000) in aggregate
principal amount (except as provided by the terms of Section 2.13 of the
Original Indenture mentioned below), and issued under and secured by a First
Mortgage Indenture and Deed of Trust between the Company and Old Colony
Trust Company (now The First National Bank of Boston, successor by merger)
as Trustee, dated as of August 1, 1954 (herein as amended by a First
Supplemental Indenture dated as of October 1, 1954, called the Original
Indenture, the Original Indenture with all indentures supplemental thereto,
including specifically the Seventy-Fifth Supplemental Indenture dated as of
March 1, 1994, being herein generally called the Indenture) and said
Seventy-Fifth Supplemental Indenture, an executed counterpart of each of
which is on file at the principal corporate trust office of the Trustee, to
which Indenture reference is hereby made for a description of the nature
and extent of the security, the rights thereunder of the bearers or
registered owners of Bonds issued and to be issued thereunder, the rights,
duties, and immunities thereunder of the Trustee, the rights and
obligations thereunder of the Company, and the terms and conditions upon
which said Bonds, and other and further Bonds of other series, are issued
and are to be issued; but neither the foregoing reference to the Indenture
nor any provision of this Bond or of the Indenture shall affect or impair
the obligation of the Company, which is absolute, unconditional and
unalterable, to pay at the maturities herein provided the principal of and
interest on this Bond as herein provided.
The Bonds of this series are issuable in fully registered form in
denominations of one thousand dollars ($1,000) and any multiple thereof.
This Bond is transferable by the registered owner hereof upon
surrender hereof at the principal corporate trust office of the Trustee or
at the office or agency of the Company in the Borough of Manhattan, the
City of New York, New York, together with a written instrument of transfer
in approved form signed by the registered owner or by his duly authorized
attorney, and a new Bond or Bonds of this series for a like principal
amount will be issued in exchange, all as provided in the Indenture. Prior
to due presentment for registration of transfer of this Bond the Company
and the Trustee may deem and treat the registered owner hereof as the
absolute owner hereof, whether or not this Bond be overdue, for the purpose
of receiving payment and for all other purposes, and neither the Company
nor the Trustee shall be affected by any notice to the contrary.
This Bond is exchangeable at the option of the registered owner hereof
at the principal corporate trust office of the Trustee or at the office or
agency of the Company in the Borough of Manhattan, the City of New York,
New York, for an equal principal amount of fully registered bonds of this
series of other authorized denominations, in the manner and on the terms
provided in the Indenture.
Bonds of this series are to be issued initially under a book-entry
only system and, except as hereinafter provided, registered in the name of
The Depository Trust Company, New York, New York ("DTC") or its nominee,
which shall be considered to be the holder of all bonds of this series for
all purposes of the Mortgage, including, without limitation, payment by the
Company of principal of and interest on such bonds of this series and
receipt of notices and exercise of rights of holders of such bonds of this
series. There shall be a single bond of this series which shall be
immobilized in the custody of DTC with the owners of book-entry interests
in bonds of this series ("Book-Entry Interests") having no right to receive
bonds of this series in the form of physical securities or certificates.
Ownership of Book-Entry Interests shall be shown by book-entry on the
system maintained and operated by DTC, its participants (the
"Participants") and certain persons acting through the Participants.
Transfer of ownership of Book-Entry Interests are to be made only by DTC
and the Participants by that book-entry system, the Company and the Trustee
having no responsibility therefor so long as bonds of this series are
registered in the name of DTC or its nominee. DTC is to maintain records
of positions of Participants in bonds of this series, and the Participants
and persons acting through Participants are to maintain records of the
purchasers and owners of Book-Entry Interests. If DTC or its nominee
determines not to continue to act as a depository for the bonds of this
series in connection with a book-entry only system, another depository, if
available, may act instead and the single bond of this series will be
transferred into the name of such other depository or its nominee, in which
case the above provisions will continue to apply but to the new depository.
If the book- entry only system for bonds of this series is discontinued for
any reason upon surrender and cancellation of the single bond of this
series registered in the name of the then depository or its nominee, new
registered bonds of this series will be issued in authorized denominations
to the holder of Book-Entry Interests shown on the book-entry system
immediately prior to the discontinuance thereof. Neither the Trustee nor
the Company shall be responsible for the accuracy of the interests shown on
that system.
The Bonds of this series are not subject to redemption as a whole or
in part prior to March 1, 1999. Thereafter, subject to the provisions of
Section 5.06 of the Original Indenture, the Bonds of this series are subject
to redemption prior to maturity upon not less than thirty (30) days' prior
notice, as a whole at any time, or in part from time to time, either at the
option of the Company, or for the purposes of any applicable provision of
the Indenture, in the manner and with the effect provided in the Indenture,
(i) if from moneys received by the Trustee pursuant to Section 4.05, Section
7.03, Section 7.04, Section 7.05 or Section 7.07 of the Original Indenture or
Section 4.18 of the Indenture to be applied by the Trustee as provided in
Section 8.03(a) or in Section 8.05 of the Original Indenture, at the
applicable percentages of the called principal amount thereof specified under
the column headed Special Redemption Price, below, and (ii) if at the option
of the Company or pursuant to any provisions of the Indenture other than
those in respect of the aforesaid moneys applied pursuant to Section 8.03(a) or
Section 8.05 of the Original Indenture, at the applicable percentages of the
called principal amount thereof specified under the column headed Optional
Redemption Price, below, together in each case with accrued and unpaid
interest to the date fixed for redemption:
Optional Special
If Redeemed During Redemption Redemption
the 12 Months' Period Price Price
Starting March 1 % %
1999 104.65 100.00
2000 104.34 100.00
2001 104.03 100.00
2002 103.72 100.00
2003 103.41 100.00
2004 103.10 100.00
2005 102.79 100.00
2006 102.48 100.00
2007 102.17 100.00
2008 101.86 100.00
2009 101.55 100.00
2010 101.24 100.00
2011 100.93 100.00
2012 100.62 100.00
2013 100.31 100.00
2014 100.00 100.00
2015 100.00 100.00
2016 100.00 100.00
2017 100.00 100.00
2018 100.00 100.00
2019 100.00 100.00
2020 100.00 100.00
2021 100.00 100.00
2022 100.00 100.00
2023 100.00 100.00
Notice of redemption as aforesaid (which notice may be made subject to
the deposit of redemption moneys with the Trustee before the date fixed for
redemption) shall be mailed by the Trustee not less than thirty (30) days
nor more than sixty (60) days prior to the date set for redemption, by
first class mail, postage prepaid, to the registered owner or owners of
each Bond of this series called for redemption, at their last addresses as
they shall appear upon the books for registration kept by the Registrar.
If this Bond, or a part hereof, shall be duly called for redemption,
or provision for such call shall have been made, as provided in the
Indenture, and payment of the redemption price shall have been duly
provided for by the Company, interest shall cease to accrue hereon, or on
such called part, from and after the redemption date, the Company shall
from the time provided in the Indenture be under no further liability in
respect of the principal of, or premium, if any, or interest on, this Bond,
or such called part, and the registered owner hereof shall from and after
such time look for payment hereof, or of such called part, solely to the
money so provided.
The Indenture contains provisions permitting the Company and the
Trustee with the consent of the bearers or registered owners of not less
than seventy percentum (70%) in principal amount of the Bonds at the time
outstanding (except Bonds held by or for the benefit of the Company),
including, if more than one series of Bonds shall be at the time
outstanding, not less than seventy percentum (70%) in principal amount of
the Bonds (except Bonds held by or for the benefit of the Company) of each
series affected differently from those of other series, to effect by
supplemental indenture modifications or alterations of the Indenture and of
the rights and obligations of the Company and of the bearers and registered
owners of the Bonds; but no such modification or alteration shall be made
which, without the written approval or consent of the registered owner
hereof, will extend the maturity hereof or reduce the rate or extend the
time for payment of interest hereon or change the amount of the principal
hereof or of any premium payable on the redemption hereof, or which will
reduce the percentage of the principal amount of Bonds or the percentage of
the principal amount of Bonds of any one series required for the adoption
of the modifications or alterations as aforesaid, or authorize the creation
by the Company, except as expressly authorized by the Indenture, of any
mortgage, pledge, or lien upon the property subjected thereto ranking prior
to or on an equality with the lien thereof.
If a default as defined in the Indenture shall occur, the principal of
this Bond may become or be declared due and payable before maturity, in the
manner and with the effect provided in the Indenture; but any default and
the consequences thereof may be waived by certain percentages of the
bearers or registered owners of Bonds, all as provided in the Indenture.
No recourse shall be had for the payment of the principal of or the
interest on this Bond or for any claim based hereon or otherwise in respect
hereof or of the Indenture against any incorporator, stockholder, director,
or officer, past, present, or future, as such, of the Company or of any
predecessor or successor corporation under any constitution, statute, or
rule of law, or by the enforcement of any assessment, penalty, or
otherwise, all such liability being waived and released by the holder
hereof by the acceptance of this Bond.
Schedule B
NONE
Schedule C
Detail of Filing and Recording of First Mortgage Indenture and Deed
of Trust dated as of August 1, 1954 in Massachusetts.
Date
Recorded Doc. No. Book
Page
Registry of Deeds
County of Berkshire
Middle District 8/18/54 22357 614 395
Northern District 8/18/54 2684 512 97
Southern District 8/18/54 None 310 379
Assigned
County of Franklin 8/18/54 3501 1007 2
County of Hampshire 8/18/54 5070 1175 388
County of Hampden 8/15/54 20682 2331 1
Registry District of Land Court
County of Berkshire
Middle District 10/4/54 8407-A
Northern District 11/5/68 3115
County of Hampshire 8/18/54 822
County of Hampden 8/19/54 18800
Office of Town Clerk,
West Springfield* 3/22/67 6917 None Assigned
*Confirmatory Indenture of
Mortgage filed 8/18/54 None 54 121
Assigned
Secretary of the Commonwealth 442315
Exhibit 4.4.13
Connecticut Development Authority
and
Western Massachusetts Electric Company
LOAN AGREEMENT
Dated as of September 1, 1993
Connecticut Development Authority
$53,800,000 Pollution Control Revenue Refunding Bonds
(Western Massachusetts Electric Company Project - 1993A Series)
[6] TABLE OF CONTENTS
Page
PREAMBLE .............................................. 1
ARTICLE I DEFINITIONS AND INTERPRETATION
Section 1.1. Definitions.......................... 5
Section 1.2. Interpretation....................... [7] 12
ARTICLE II REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations by the Authority..... [8] 14
Section 2.2. Limitation of Control by Borrower.... 15
Section 2.3. Representations by the Borrower...... 16
ARTICLE III THE LOAN
Section 3.1. Loan Clauses......................... 19
Section 3.2. Other Amounts Payable................ 20
Section 3.3. Manner of Payment.................... 21
Section 3.4. Obligation Unconditional............. 21
Section 3.5. Security Clauses..................... 21
Section 3.6. Issuance of Bonds.................... 21
Section 3.7. Use of Priority Amounts.............. 21
Section 3.8. Effect of Drawing Under Letter
of Credit............................ 22
Section 3.9. Effective Date and Term.............. 22
Section 3.10. Borrower's Purchase of Bonds......... 22
Section 3.11. Letter of Credit..................... 23
Section 3.12. Requirements for Delivery of a
Substitute Credit Facility........... 23
Section 3.13. Securities Laws...................... 25
Section 3.14. New York Paying Agent................ 25
ARTICLE IV THE PROJECT
Section 4.1. Completion of the Project............ 26
Section 4.2. No Warranty Regarding Condition,
Suitability or Cost of Project....... 26
Section 4.3. Taxes................................ 26
Section 4.4. Insurance............................ 27
Section 4.5. Compliance with Law.................. 27
Section 4.6. Maintenance and Repair............... 27
ARTICLE V CONDEMNATION DAMAGE AND DESTRUCTION
Section 5.1. No Abatement of Payments Hereunder... 29
Section 5.2. Project Disposition Upon Condemnation,
Damage or Destruction................ 29
Section 5.3. Application of Net Proceeds of
Insurance or Condemnation............ 29
ARTICLE VI COVENANTS
Section 6.1. The Borrower to Maintain its
Corporate Existence; Conditions under
which Exceptions Permitted........... 30
Section 6.2. Indemnification, Payment of Expenses,
and Advances......................... 30
Section 6.3. Incorporation of Tax Regulatory
Agreement; Payments Upon Taxability.. 33
Section 6.4. Covenant as to Project Use........... 34
Section 6.5. Further Assurances and Corrective
Instruments.......................... 35
Section 6.6. Covenant by Borrower as to Compliance
with Indenture....................... 36
Section 6.7. Assignment of Agreement or Note...... 36
Section 6.8. Inspection........................... 36
Section 6.9. Default Notification................. 36
Section 6.10. Covenant Against Discrimination...... 37
Section 6.11. Authority Costs and Expenses......... 37
ARTICLE VII EVENTS OF DEFAULT AND REMEDIES
Section 7.1. Events of Default.................... 38
Section 7.2. Remedies on Default.................. 39
Section 7.3. Remedies Upon Project Use Default.... 40
Section 7.4. No Duty to Mitigate Damages.......... 40
Section 7.5. Remedies Cumulative.................. 41
ARTICLE VIII PREPAYMENT PROVISIONS
Section 8.1. Optional Prepayment.................. 42
Section 8.2. Notice by the Borrower of Optional
Prepayment........................... 44
Section 8.3. Mandatory Prepayment on Taxability... 44
Section 8.4. Mandatory Prepayment Upon Occurrence
of Certain Events.................... 44
ARTICLE IX GENERAL
Section 9.1. Indenture............................ 45
Section 9.2. Benefit of and Enforcement by
Bondholders.......................... 45
Section 9.3. Force Majeure........................ 45
Section 9.4. Amendments........................... 46
Section 9.5. Notices.............................. 46
Section 9.6. Prior Agreements Superseded.......... 46
Section 9.7. Execution of Counterparts............ 47
Section 9.8. Time................................. 47
APPENDICES
Appendix A - Form of Promissory Note
Appendix B - Description of Project
Connecticut Development Authority
Western Massachusetts Electric Company
LOAN AGREEMENT
THIS LOAN AGREEMENT, made and dated as of September 1, 1993 by and
between the Connecticut Development Authority, a body corporate and politic
constituting a public instrumentality and political subdivision of the
State of Connecticut, and Western Massachusetts Electric Company, a
corporation organized and existing under the laws of the Commonwealth of
Massachusetts,
WITNESSETH THAT:
WHEREAS, the State Commerce Act, constituting Connecticut General
Statutes, Sections 32-la through 32-23ss, as amended (the "Act"), declares
that there is a continuing need in the State (1) for economic development
and activity to provide and maintain employment and tax revenues and to
control, abate and prevent pollution to protect the public health and
safety and (2) for assistance to public service businesses providing
transportation and utility services in the State, and that the availability
of financial assistance and suitable facilities are important inducements
to industrial and commercial enterprises to remain or locate in the State
and to provide industrial, recreation, urban and public service projects;
and
WHEREAS, the Act provides that (1) the term "project" as used therein
means any facility, plant, works, system, building, structure, utility,
fixture or other real property improvement located in the State, and the
land on which it is located or which is reasonably necessary in connection
therewith, which is of a nature or which is to be used or occupied by any
person for purposes which would constitute it as an economic development
project, recreation project, urban project, public service project or
health care project, and any real property improvement reasonably related
thereto, and (2) that a project may also include or consist exclusively of
machinery, equipment or fixtures; and
WHEREAS, the Act defines economic development project to include "any
project which is to be used or occupied by any person for . . . (2)
controlling, abating, preventing or disposing of land, water, air or other
environmental pollution . . . or (3) the conservation of energy or the
utilization of cogeneration technology or solar, wind, hydro, biomass or
other renewable sources to produce energy for any industrial or commercial
application."
WHEREAS, the Act provides that the Authority shall have power (1) to
determine the location and character of any project to be financed under
the provisions of the Act; (2) to purchase, receive by gift or otherwise,
lease, exchange, or otherwise acquire, and construct, reconstruct, improve,
maintain, equip and furnish one or more projects, including all real and
personal property which the Authority may deem necessary therewith, and to
enter into a contract with a person therefor upon such terms and conditions
as the Authority shall determine to be reasonable, including but not
limited to reimbursement for the planning, designing, financing,
construction, reconstruction, improvement, equipping, furnishing, operation
and maintenance of reserve and insurance funds with respect to the
financing of the project; (3) to extend credit or make loans to any person
for the planning, designing, financing, acquiring, constructing,
reconstructing, improving, equipping and furnishing of a project and for
the refinancing of existing indebtedness with respect to any facility or
part thereof which would qualify as a project in order to facilitate
substantial improvements thereto, which credits or loans may be secured by
loan agreements, mortgages, contracts and all other instruments or fees and
charges, upon such terms and conditions as the Authority shall determine to
be reasonable in connection with such loans, including provision for the
establishment and maintenance of reserve and insurance funds and in the
exercise of powers granted in the the Act in connection with a project for
such person, to require the inclusion in any contract, loan agreement or
other instrument, such provisions for the construction, use, operation and
maintenance and financing of a project as the Authority may deem necessary
or desirable; (4) to issue its bonds for such purposes, subject to the
approval of the Treasurer of the State; and, (5) as security for the
payment of the principal or redemption price, if any, of and interest on
any such bonds, to pledge or assign such a loan, lease or sale agreement
and the revenues and receipts derived by the Authority from such a project;
and
WHEREAS, by resolutions adopted October 24, 1973; July 10, 1984; March
12, 1985; September 10, 1985; and December 12, 1985, the Authority has
authorized the issuance of $11,650,000 principal amount of its Pollution
Control Revenue Bonds (Millstone Point Project - 1973 Series) (of which
$2,213,500 was for the benefit of Western Massachusetts Electric Company);
$16,400,000 principal amount of its Pollution Control Revenue Bonds
(Western Massachusetts Electric Company Project - 1984 Series); $9,300,000
principal amount of its Pollution Control Revenue Variable Rate Demand
Bonds (Western Massachusetts Electric Company Project - 1985 Series);
$14,200,000 principal amount of its Pollution Control Revenue Par Value
Demand Bonds (Western Massachusetts Electric Company Project - 1985 Series
B); and $12,500,000 principal amount of its Pollution Control Revenue Par
Value Demand Bonds (Western Massachusetts Electric Company Project - 1985
Series C) (the "Prior Obligations") for the purposes of providing funds for
the financing of construction of and additions to the pollution control
facilities of the Borrower; and
WHEREAS, the Borrower currently owns certain individual interests in
existing facilities within certain municipalities in the State and, by
resolution adopted in furtherance of the purposes of the Act, the Authority
has accepted the application of the Borrower for assistance in the
financing of facilities for the control, abatement or prevention of
environmental pollution deriving from the operation of certain nuclear
electric generating facilities (the "Project"); and
WHEREAS, the Authority has by a further resolution adopted September 8,
1993, authorized the issuance of $53,800,000 principal amount of its
Pollution Control Revenue Refunding Bonds (Western Massachusetts Electric
Company Project - 1993A Series) for the purposes of providing funds for the
refunding of the Prior Obligations; and
WHEREAS, pursuant to such resolution the Bonds (as hereinafter defined)
are to be secured by an Indenture of Trust of even date herewith, by and
between the Authority and Shawmut Bank Connecticut, National Association,
as Trustee; and
WHEREAS, in order to further secure the Bonds, the Borrower concurrently
with the execution hereof has arranged the delivery to the Paying Agent of
an irrevocable Letter of Credit, dated the date of delivery of the Bonds,
issued by Union Bank of Switzerland, New York Branch, for the account of
the Borrower in favor of the Paying Agent as beneficiary on behalf of the
owners of the Bonds; and
WHEREAS, the Borrower and Union Bank of Switzerland, New York Branch,
entered into a Letter of Credit and Reimbursement Agreement dated as of
September 1, 1993 obligating the Borrower inter alia to repay all amounts
drawn under the Letter of Credit together with interest, if any, thereon;
and
WHEREAS, the Bonds shall be special obligations of the Authority,
payable solely from the revenues or other receipts, funds or monies to be
derived by the Authority under this Agreement or the Indenture and from any
amounts otherwise available under the Indenture for the payment of the
Bonds; and
WHEREAS, all federal and State agencies having jurisdiction in the
premises have certified that the portion of the Project that constitutes
pollution control Facilities, as designed, is in furtherance of the purpose
of controlling, abating or preventing such pollution at the Project; and
WHEREAS, the Authority proposes with the proceeds of the Bonds to make a
loan to the Borrower and the Borrower proposes to borrow such proceeds from
the Authority for the purpose of refunding the Prior Obligations issued by
the Authority to finance and refinance a portion of the cost of undertaking
and completing the Project; and
WHEREAS, the Borrower acknowledges that the Authority is providing
financing for the Project in furtherance of the Authority's corporate
purposes under the Act, that the accomplishment of these purposes is
dependent upon the compliance of the Borrower with its covenants contained
in this Agreement, that the Authority has a resulting beneficial interest
in the Project, and that the Borrower's use of and interest in the Project
as provided hereby are in furtherance of the discharge of a public purpose;
and
WHEREAS, the Massachusetts Department of Public Utilities has approved
the issuance of the Note;
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, covenants and agreements herein set forth, the Authority
and the Borrower, each binding itself, its successors and assigns, do
mutually promise, covenant and agree as follows (provided that in the
performance of the agreements of the Authority herein contained, any
obligation it may incur for the payment of money shall not be an
obligation, debt or liability of the State or any municipality thereof and
neither the State nor any municipality thereof shall be liable on any
obligation so incurred, but any such obligation shall be payable solely out
of the revenues or other receipts, funds or monies to be derived by the
Authority under this Agreement or the Indenture and from any amounts
otherwise available under the Indenture for the payment of the Bonds):
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1. Definitions. For the purposes of this Agreement, the
following words and terms shall have the respective meanings set forth as
follows, and any capitalized word or term used but not defined herein is
used as defined in the Indenture:
"Act" means the State Commerce Act, constituting Connecticut General
Statutes, Sections 32-la through 32-23ss, as amended.
"Agreement" means this Loan Agreement and any amendments and supplements
hereto.
"Authority" means the Connecticut Development Authority, a body
corporate and politic constituting a public instrumentality and political
subdivision of the State of Connecticut duly organized and existing under
the laws of the State, and any body, board, authority, agency or other
political subdivision or instrumentality of the State which shall hereafter
succeed to the powers, duties and functions thereof.
"Authorized Representative" means, in the case of the Authority, the
Chairman or Vice Chairman, the President, the Executive Vice President or
any Senior Vice President or any Vice President thereof and, in the case of
the Borrower, the Chairman, Vice Chairman, President, any Vice President,
Chief Financial Officer, Treasurer, Assistant Treasurer, Secretary,
Assistant Secretary, Clerk or Assistant Clerk thereof and, when used with
reference to the performance of any act, the discharge of any duty or the
execution of any certificate or other document, any officer, employee or
other person authorized to perform such act, discharge such duty or execute
such certificate or other document.
"Bank" means Union Bank of Switzerland, New York Branch, in its capacity
as issuer of the Letter of Credit and any other issuer of a Credit
Facility.
"Beneficial Owner" shall have the meaning specified in Section 2.3(F) of
the Indenture. If any person claims to the Trustee to be a Beneficial
Owner, for purposes of Section 2.4(C) of the Indenture, such person shall
prove such claim to the satisfaction of the Trustee with such documentation
and signature guaranties as the Trustee may request.
"Bonds" means the $53,800,000 Pollution Control Revenue Refunding Bonds
(Western Massachusetts Electric Company Project - 1993A Series) authorized
and issued pursuant to Section 2.3 of the Indenture.
"Bond Counsel" means Whitman & Ransom or such other nationally
recognized bond counsel selected by the Authority and reasonably
satisfactory to the Borrower and the Trustee.
"Borrower" means (i) Western Massachusetts Electric Company, a
corporation organized and existing under the laws of the Commonwealth of
Massachusetts, and its successors and assigns and (ii) any surviving
resulting or transferee corporation as provided in Section 6.1 hereof.
"Business Day" means any day (i) that is not a Saturday or Sunday, (ii)
that is a day on which banks located in Hartford, Connecticut and New York,
New York are not required or authorized to remain closed, (iii) that is a
day on which banking institutions in all of the cities in which the
principal offices of the Trustee and the Paying Agent and, if applicable,
the Remarketing Agent and the Bank are located and are not required or
authorized to remain closed and (iv) that is a day on which the New York
Stock Exchange, Inc. is not closed.
"Code" means the Internal Revenue Code of 1986, as amended and
regulations promulgated thereunder.
"Conversion Date" means the date on which a new Mode becomes
effective with respect to a Bond, and with respect to a Bond in the
Multiannual Mode, the date on which a new Rate Period becomes effective.
"Credit Facility" means the Letter of Credit and any substitute
irrevocable transferable letter of credit delivered to the Paying Agent
pursuant to the Indenture and this Agreement and then in effect. More than
one Credit Facility may be in effect from time to time.
"Debt Service Fund" means the special trust fund so designated,
established pursuant to Section 5.1 of the Indenture.
"DTC" or "The Depository Trust Company" shall mean the limited-purpose
trust company organized under the laws of the State of New York which shall
act as securities depository for the Bonds, and any successor thereto.
"Determination of Taxability" means (1) a published revenue ruling by
the Internal Revenue Service and an opinion of Bond Counsel, unless the
Borrower timely requests the Authority to proceed in accordance with
Section 6.3(H) of this Agreement and proceedings pursuant to such section
are continuing, (2)(a)(i) a private ruling specifically applicable to the
Bonds or (ii) the receipt by any Bondowner of a notice of assessment and
demand for payment from the Internal Revenue Service and (b)(i) the
expiration of the appeal period provided therein if no appeal is taken or
(ii) if an appeal is taken, a final unappealable decision by a court of
competent jurisdiction; provided that in the case of an event described in
clause (2) that the Authority or the Bondowner, as the case may be, has
given the Borrower and the Trustee prompt written notice of any application
for such a private ruling or, as the case may be, any proposed assertion of
taxability by the Internal Revenue Service and, if the Borrower agrees to
pay all expenses in connection therewith, permits the Borrower to contest
such action, either directly or in the name of the registered owner,
through any level of appeal determined by the Borrower, or (3) the
admission in writing by the Borrower, in the case of clause (1), (2) and
(3) to the effect that the interest on the Bonds is includable in the gross
income for federal income tax purposes (other than for purposes of any
alternative minimum tax, environmental tax or foreign branch profits tax)
of an owner or former owner thereof, other than for a period during which
such owner or former owner is or was a "Substantial User" of the Project or
a "Related Person" as such terms are defined in the Code. For purposes of
this definition, the term owner or Bondowner means the Beneficial Owner of
the Bonds so long as the Book-Entry Only System (as defined in Section
23(f) of the Indenture is in effect.
"Event of Default" means an Event of Default as defined in Section 7.1
hereof.
"Financing Documents" means this Agreement, the Tax Regulatory Agreement
and the Note.
"Indenture" means the Indenture of Trust, of even date herewith, by and
between the Authority and the Trustee, together with all indentures
supplemental thereto made and entered into in accordance therewith.
"Interest Payment Date" shall mean each date on which interest is
payable on the Bonds as provided in the forms of the Bonds.
"Letter of Credit" means the $54,596,000 irrevocable letter of credit
dated the date of the initial delivery of the Bonds and issued by Union
Bank of Switzerland, New York Branch, for the benefit of the Paying Agent.
"Mortgage Indentures" means (i) that certain First Mortgage Indenture
and Deed of Trust dated as of August 1, 1954, by and between the Borrower
and Old Colony Trust Company (which was merged into First National Bank of
Boston by merger effective January 4, 1971), as trustee, as amended and
supplemented, and (ii) any other mortgage indenture which may hereafter be
created so long as such mortgage indenture covers the property pledged
under the indenture named in (i) above or otherwise covers substantially
all of the property of the Borrower.
"Moody's" means Moody's Investors Services, Inc., a corporation
organized and existing under the laws of the State of Delaware, its
successors and their assigns, and if such corporation shall be dissolved or
liquidated or shall no longer perform the functions of a securities rating
agency, "Moody's" shall be deemed to refer to any other nationally
recognized securities rating agency designated by the Authority, at the
direction of the Borrower, by notice to the Trustee and the Borrower.
"Net Proceeds" when used with respect to any insurance or condemnation
award, means the gross proceeds from such award less all expenses
(including attorney's fees and expenses and any extraordinary expenses)
incurred in the collection thereof.
"1954 Code" means the Internal Revenue Code of 1954, as amended, as in
effect on August 1, 1986.
"Note" means the promissory note of the Borrower to the Authority, dated
the date of initial delivery of the Bonds in the form attached as an
Appendix to this Agreement, and any amendments or supplements made in
conformity with this Agreement and the Indenture.
"Outstanding", when used with reference to a Bond or Bonds, as of any
particular date, means all Bonds which have been authenticated and
delivered under the Indenture, except:
(1) any Bonds cancelled by the Trustee because of payment or
redemption prior to maturity or surrendered to the Trustee for
cancellation;
(2) any Bond (or portion of a Bond) paid or redeemed or for the
payment or redemption of which there has been separately set aside and held
in the Debt Service Fund either:
(a) monies in an amount sufficient to effect payment of the
principal or applicable Redemption Price thereof, together with accrued
interest on such Bond to the payment or redemption date, which payment or
redemption date shall be specified in irrevocable instructions given to the
Trustee to apply such monies to such payment on the date so specified; or
(b) obligations of the kind described in subsection 12.1(A)
of the Indenture in such principal amounts, of such maturities, bearing
such interest and otherwise having such terms and qualifications as shall
be necessary to provide monies in an amount sufficient to effect payment of
the principal or applicable Redemption Price of such Bond, together with
accrued interest on such Bond to the payment or redemption date, which
payment or redemption date shall be specified in irrevocable instructions
given to the Trustee to apply such obligations to such payment on the date
so specified; or
(c) any combination of (a) and (b) above;
(3) Bonds deemed tendered for purchase and not delivered to the
Paying Agent on the Purchase Date, provided sufficient funds for payment of
the Purchase Price are on deposit with the Paying Agent;
(4) Bonds in exchange for or in lieu of which other Bonds shall
have been authenticated and delivered under Article III of the Indenture;
and
(5) any Bond deemed to have been paid as provided in subsection
12.1 of the Indenture.
"Paying Agent" means any paying agent for the Bonds appointed pursuant
to Section 9.10 of the Indenture (and may include the Trustee), and its
successor or successors and any other corporation which may at any time be
substituted in its place in accordance with the Indenture.
"Permitted Encumbrances" mean, as of any particular date, (i) the lien
of the Mortgage Indentures, (ii) liens and encumbrances permitted by the
Mortgage Indentures, (iii) liens for taxes not yet due and payable, (iv)
any lien created by this Agreement and the Indenture, (v) utility, access
and other easements and rights-of-way, that will not interfere with or
impair the value or use of the Project as herein provided, (vi) any
mechanic's, laborer's, materialman's, supplier's or vendor's lien or right
in respect thereof if payment is not yet due and payable and for which
statutory lien rights exist, and (vii) such minor defects, irregularities,
easements, and, rights-of-way (including agreements with any railroad the
purpose of which is to service the railroad siding) as normally exist with
respect to property similar in character to the Project and which do not
materially impair the value or use of the property affected thereby for the
purpose for which it was acquired hereunder.
"Plants" means, collectively, the nuclear electric generating plants at
which the various portions of the Project are located, including the
Millstone 1, Millstone 2, and Millstone 3 plants in Waterford, Connecticut,
and as used in the singular form shall mean any one of them.
"Principal User" means any principal user of the Project within the
meaning of Section 144(a)(2)(B) of the Code, or 103(b)(6)(B) of the 1954
Code, as applicable, including without limitation any person who is a
greater-than-10-percent-owner (or if none, the person(s) who holds the
largest ownership interest in the Project), lessee or user of more than 10%
of the Project measured either by occupiable space or fair rental value
under any formal or informal agreement or, under the particular facts and
circumstances, anyone who is a principal customer of the Project. The term
"principal customer" means any person, who purchases output of the Project
under a contract if the percentage of output taken or to be taken by such
person, multiplied by a fraction the numerator of which is the term of such
contract and the denominator of which is the economic life of the Project,
exceeds 10%. In the case of a person who purchases output of an electric
or thermal energy, gas, water or other similar facility, such person is a
principal customer if the total output purchased by such person during any
one-year period beginning with the date the facility is placed in service
is more than 10 percent of the facility's output during each such period.
Co-owners or co-lessees who are shareholders in a corporation or who are
collectively treated as a partnership subject to subchapter K under section
761(a) of the Code are not treated as Principal Users merely by reason of
their ownership of corporate or partnership interests.
"Prior Obligations" means the Authority's $11,650,000 principal amount
of Pollution Control Revenue Bonds (Millstone Point Project - 1973 Series)
(of which $2,213,500 was for the benefit of the Borrower); $16,400,000
principal amount of Pollution Control Revenue Bonds (Western Massachusetts
Electric Company Project - 1984 Series); $9,300,000 principal amount of
Pollution Control Revenue Variable Rate Demand Bonds (Western Massachusetts
Electric Company Project - 1985 Series); $14,200,000 principal amount of
Pollution Control Revenue Par Value Demand Bonds (Western Massachusetts
Electric Company Project - 1985 Series B); and $12,500,000 principal amount
of Pollution Control Revenue Par Value Demand Bonds (Western Massachusetts
Electric Company Project - 1985 Series C).
"Project" means the Borrower's interest in the realty and other
interests in the real property, and in all personal property, goods,
leasehold improvements, machinery, equipment, furnishings, furniture,
fixtures, tools and attachments wherever located and whether now owned or
hereafter acquired, acquired or financed in whole or in part with the
proceeds of the Prior Obligations or the proceeds of tax-exempt securities
refunded by the Prior Obligations, and any additions and accessions
thereto, substitutions therefor and replacements, improvements, extensions
and restorations thereof, described in Appendix B to this Agreement, as
amended from time to time in accordance with this Agreement.
"Redemption Price" means, when used with respect to a Bond or a portion
thereof, the principal amount of such Bond or portion thereof plus the
applicable premium, if any, payable upon redemption thereof pursuant to the
Indenture.
"Refunding Fund" means the special trust fund so designated, established
pursuant to Section 5.1 of the Indenture.
"Reimbursement Agreement" means the Letter of Credit and Reimbursement
Agreement dated as of September 1, 1993 among the Borrower, Union Bank of
Switzerland, New York Branch, as agent and issuing bank thereunder, and the
participating banks referred to therein, and any other agreement between
the Borrower and a Bank under which the Borrower is obligated to reimburse
the Bank for payments made by the Bank under a Credit Facility.
"Related Person" means, with respect to any Principal User, a person
which is a related person (as defined in Section 144(a)(3) of the Code, or
Section 103(b)(6)(B) of the 1954 Code, as applicable, and by reference to
Sections 267, 707(b) and 1563(a) of the Code, except that 50% is to be
substituted for 80% in Section 1563(a)).
"Sharing Agreement" means the Sharing Agreement - 1979 Connecticut
Nuclear Unit dated as of September 1, 1973, among the Borrower and the
other participants from time to time in ownership of the Millstone 3
nuclear electric generating plant in Waterford, Connecticut, pertaining to
the ownership, construction and operation of Millstone 3, as such agreement
has been or may be amended from time to time.
"S&P" means Standard & Poor's Corporation, a corporation organized and
existing under the laws of the State of New York, its successors and their
assigns and, if such corporation shall be dissolved or liquidated or shall
no longer perform the functions of a securities rating agency, "S&P" shall
be deemed to refer to any other nationally recognized securities rating
agency designated by the Trustee at the direction of the Borrower.
"State" means the State of Connecticut.
"Substantial User" means any substantial user of the Project within the
meaning of Section 147(a) of the Code or Section 103(b)(13) of the 1954
Code, as applicable.
"Supplemental Indenture" means any indenture supplemental to the
Indenture or amendatory of the Indenture, adopted by the Authority in
accordance with Article X of the Indenture.
"Tax Incidence Date" means the date as of which interest on the Bonds
becomes or became includable in the gross income of the recipient thereof
(other than the Borrower or another Substantial User or Related Person) for
federal income tax purposes for any cause, as determined by a Determination
of Taxability.
"Tax Regulatory Agreement" means the Tax Regulatory Agreement, dated as
of the date of initial issuance and delivery of the Bonds, among the
Authority, the Borrower and the Trustee, and any amendments and supplements
thereto.
"Term", when used with reference to this Agreement, means the term of
this Agreement determined as provided in Article III hereof.
"Trustee" means Shawmut Bank Connecticut, National Association, and its
successor or successors hereafter appointed in the manner provided in the
Indenture.
Section 1.2. Interpretation. In this Agreement:
(1) The terms "hereby", "hereof", "hereto", "herein", "hereunder"
and any similar terms, as used in this Agreement, refer to this Agreement,
and the term "hereafter" means after, and the term "heretofore" means
before, the date of this Agreement.
(2) Words of the masculine gender mean and include correlative
words of the feminine and neuter genders and words importing the singular
number mean and include the plural number and vice versa.
(3) Words importing persons include firms, associations,
partnerships (including limited partnerships), trusts, corporations and
other legal entities, including public bodies, as well as natural persons.
(4) Any headings preceding the texts of the several Articles and
Sections of this Agreement, and any table of contents appended to copies
hereof, shall be solely for convenience of reference and shall not
constitute a part of this Agreement, nor shall they affect its meaning,
construction or effect.
(5) Nothing contained in this Agreement shall be construed to
cause the Borrower to become the agent for the Authority or the Trustee for
any purpose whatsoever, nor shall the Authority or the Trustee be
responsible for any shortage, discrepancy, damage, loss or destruction of
any part of the Project wherever located or for whatever cause.
(6) All approvals, consents and acceptances required to be given
or made by any person or party hereunder shall be at the sole discretion of
the party whose approval, consent or acceptance is required.
(7) All notices to be given hereunder shall be given in writing
within a reasonable time unless otherwise specifically provided.
(8) This Agreement shall be governed by and construed in
accordance with the applicable laws of the State.
(9) If any provision of this Agreement shall be ruled invalid by
any court of competent jurisdiction, the invalidity of such provision shall
not affect any of the remaining provisions hereof.
(10) From and after the date upon which there is no Credit Facility
in effect, upon receipt by the Trustee of a certificate from the Bank
stating that all amounts payable to the Bank under the Reimbursement
Agreement have been paid in full, all references to the Bank, the
Reimbursement Agreement or the Credit Facility in this Agreement, the Note,
the Indenture, and the Bonds shall be ineffective.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations by the Authority. The Authority
represents and warrants that:
(1) It is a body corporate and politic constituting a public
instrumentality and political subdivision of the State, duly organized and
existing under the laws of the State including the Act. The Authority is
authorized to issue the Bonds in accordance with the Act and to use the
proceeds thereof to refinance the Project.
(2) The Authority has complied with the provisions of the Act and
has full power and authority pursuant to the Act to consummate all
transactions contemplated by the Bonds, the Indenture and the Financing
Documents.
(3) By resolution duly adopted by the Authority and still in full
force and effect, the Authority has authorized the execution, delivery and
due performance of the Bonds, the Indenture and the Financing Documents,
and the taking of any and all action as may be required on the part of the
Authority to carry out, give effect to and consummate the transactions
contemplated by this Agreement and the Indenture, and all approvals
necessary in connection with the foregoing have been received.
(4) The Bonds have been duly authorized, executed, authenticated,
issued and delivered, constitute valid and binding special obligations of
the Authority payable solely from revenues or other receipts, funds or
monies pledged therefor under the Indenture and from any amounts otherwise
available under the Indenture, and are entitled to the benefit of the
Indenture. Neither the State nor any municipality thereof is obligated to
pay the Bonds or the interest thereon. Neither the faith and credit nor
the taxing power of the State nor any municipality thereof is pledged for
the payment of the principal, and premium, if any, of and interest on the
Bonds.
(5) The execution and delivery of the Bonds, the Indenture and
the Financing Documents and compliance with the provisions thereof, will
not conflict with or constitute on the part of the Authority a violation
of, breach of or default under its by-laws or any statute, indenture,
mortgage, deed of trust, note agreement or other agreement or instrument to
which the Authority is a party or by which the Authority is bound, or, to
the knowledge of the Authority, any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Authority or
any of its activities or properties, and all consents, approvals,
authorizations and orders of governmental or regulatory authorities which
are required for the consummation by the Authority of the transactions
contemplated thereby have been obtained.
(6) Subject to the provisions of this Agreement and the Indenture,
the Authority will apply the proceeds of the Bonds to the purposes
specified in the Indenture and the Financing Documents.
(7) There is no action, suit, proceeding or investigation at law
or in equity before or by any court, public board or body pending or
threatened against or affecting the Authority, or to the best knowledge of
the Authority, any basis therefor, wherein an unfavorable decision, ruling
or finding would adversely affect the transactions contemplated hereby or
by the Indenture, or which, in any way, would adversely affect the validity
of the Bonds, or the validity of or enforceability of the Indenture or the
Financing Documents, or any agreement or instrument to which the Authority
is a party and which is used or contemplated for use in consummation of the
transactions contemplated hereby and by the Indenture.
(8) It has not made any commitment or taken any action which will
result in a valid claim for any finders or similar fees or commitments in
respect of the transactions contemplated by this Agreement.
(9) The representations of the Authority set forth in the Tax
Regulatory Agreement are by this reference incorporated in this Agreement
as though fully set forth herein.
Section 2.2 Limitation of Control by Borrower. Pursuant to the Sharing
Agreement, the Borrower is the owner of a 12.2385% undivided interest in
the Millstone 3 nuclear electric generating plant in Waterford,
Connecticut, at which a portion of the Project is located. The Sharing
Agreement designates the Borrower as one of two lead participants and,
together with such other lead participant, the Borrower has sole
responsibility for operation and maintenance of Millstone 3, subject to the
provisions of the Sharing Agreement. Every obligation of the Borrower
hereunder with respect to that portion of the Project located at Millstone
3 (other than the continuing obligation of the Borrower to pay, at the
times and in the amounts set forth herein, its loan obligation pursuant to
this Agreement) is subject to and limited by the provisions of such Sharing
Agreement. The Borrower agrees, however, subject to the representations
set forth in this Section, to exercise all rights granted to it pursuant to
the Sharing Agreement and its rights as to matters otherwise within the
Borrower's control, and to take all reasonable actions in the prudent
exercise of business judgment, to cause the covenants of the Borrower
contained in this Agreement to be performed to the full extent of the
Borrower's ability during the Term of this Agreement.
Section 2.3. Representations by the Borrower. The Borrower represents
and warrants that:
(1) The Borrower has been duly incorporated and validly exists as
a corporation in good standing under the laws of the Commonwealth of
Massachusetts, is not in violation of any provision of its certificate of
incorporation or its by-laws, has corporate power to enter into and perform
the Financing Documents, and by proper corporate action has duly authorized
the execution and delivery of the Financing Documents.
(2) The Financing Documents constitute valid and legally binding
obligations of the Borrower, enforceable in accordance with their
respective terms, except to the extent that such enforceability may be
limited by bankruptcy or insolvency or other laws affecting creditors'
rights generally or by general principles of equity.
(3) Neither the execution and delivery of the Financing Documents,
the consummation of the transactions contemplated thereby, nor the
fulfillment by the Borrower of or compliance by the Borrower with the terms
and conditions thereof is prevented or limited by or conflicts with or
results in a breach of, or default under the terms, conditions or
provisions of any contractual or other restriction of the Borrower,
evidence of its indebtedness or agreement or instrument of whatever nature
to which the Borrower is now a party or by which it is bound, or
constitutes a default under any of the foregoing. No event has occurred
and no condition exists which, upon the execution and delivery of any
Financing Documents, constitutes an Event of Default hereunder or an event
of default thereunder or, but for the lapse of time or the giving of
notice, would constitute an Event of Default hereunder or an event of
default thereunder.
(4) There is no action or proceeding pending or, to the knowledge
of the Borrower, threatened against the Borrower before any court,
administrative agency or arbitration board that will materially and
adversely affect the ability of the Borrower to perform its obligations
under the Financing Documents except as disclosed in the Borrower's Annual
Report on Form 10-K for the fiscal year ended December 31, 1992, the
Borrower's Quarterly Reports on Form 10-Q for the fiscal quarters ended
March 31, 1993 and June 30, 1993, and the Borrower's Current Reports on
Form 8-K dated June 3, 1993, June 30, 1993 and September 10, 1993; and all
authorizations, consents and approvals of governmental bodies or agencies
required in connection with the execution and delivery of the Financing
Documents and in connection with the performance of the Borrower's
obligations hereunder or thereunder have been obtained.
(5) The execution, delivery and performance of the Financing
Documents and any other instrument delivered by the Borrower pursuant to
the terms hereof or thereof are within the corporate powers of the Borrower
and have been duly authorized and approved by the board of directors of the
Borrower and are not in contravention of law or of the Borrower's
certificate of incorporation or by-laws, as amended to date, or of any
undertaking or agreement to which the Borrower is a party or by which it is
bound.
(6) The Borrower represents that it has not made any commitment or
taken any action which will result in a valid claim for any finders' or
similar fees or commitments in respect of the transactions described in
this Agreement other than the fees to various parties to the transactions
contemplated hereby which have been heretofore paid or provided.
(7) The Project is included within the definition of a "project"
in the Act, and its estimated cost is equal to or in excess of $53,800,000.
The Borrower intends the Project to be and continue to be an authorized
project under the Act during the Term of this Agreement.
(8) All amounts shown in Schedule D of the Tax Regulatory
Agreement are eligible costs of a project financed by bonds issued by the
Authority under the Act, and may be financed by amounts in the Refunding
Fund under the Indenture. None of the proceeds of the Bonds will be used
directly or indirectly as working capital or to finance inventory.
(9) The Project is in compliance with all applicable federal,
State and local laws and ordinances (including rules and regulations)
relating to zoning, building, safety and environmental quality the
non-compliance with which would materially adversely affect the performance
by the Borrower of any of its obligations hereunder.
(10) The Borrower has obtained all necessary material approvals
from any and all governmental agencies requisite to the Project, and has
also obtained all material occupancy permits and authorizations from
appropriate authorities authorizing the occupancy and use of the Project
for the purposes contemplated hereby. The Borrower further represents and
warrants that it has completed the Project in accordance with all material
federal, State and local laws, ordinances and regulations applicable
thereto.
(11) The availability of financial assistance from the Authority as
provided herein and in the Indenture has induced the Borrower to locate the
Project in the State. The Borrower does not presently intend to lease the
project.
(12) The Borrower will not take or omit to take any action which
action or omission will in any way cause the proceeds of the Bonds to be
applied in a manner contrary to that provided in the Indenture and the
Financing Documents as in force from time to time.
(13) The Borrower has not taken and will not take any action and
knows of no action that any other person, firm or corporation has taken or
intends to take, which would cause interest on the Bonds to be includable
in the gross income of the recipients thereof for federal income tax
purposes. The representations, certifications and statements of reasonable
expectation made by the Borrower in the Tax Regulatory Agreement and
relating to Project description, composite issues, bond maturity and
average asset economic life, use of Bond proceeds, arbitrage and related
matters are hereby incorporated by this reference as though fully set forth
herein.
(14) The Borrower has good and marketable or good and merchantable
title to the Project subject only to Permitted Encumbrances and to
irregularities or defects in title which may exist which do not materially
impair the use of such properties in the Borrower's business.
(15) The Borrower will use all of the proceeds of the Bonds to
refund the Prior Obligations.
ARTICLE III
THE LOAN
Section 3.1. Loan Clauses. (A) Subject to the conditions and in
accordance with the terms of this Agreement, the Authority agrees to make a
loan to the Borrower from the proceeds of the Bonds in the amount of
$53,800,000 and the Borrower agrees to borrow such amount from the
Authority.
(B) The loan shall be made at the time of delivery of the Bonds
and receipt of payment therefor by the Authority against receipt by the
Authority of the Note duly executed and delivered to evidence the pecuniary
indebtedness of the Borrower hereunder. As and for the loan the Authority
shall apply the proceeds of the Bonds as provided in the Indenture on the
terms and conditions therein prescribed.
(C) The Borrower shall make payments in immediately available
funds to the Trustee for deposit in the Debt Service Fund no later than
12:00 Noon on the date on which such payment of principal (including
principal called for redemption) of, premium, if any, or interest on Bonds
shall become due in an amount equal to the payment then coming due on such
Bonds less the amounts, if any, (i) then held in the Debt Service Fund and
available to pay the same, and (ii) amounts received by the Paying Agent to
pay the same from a draw under a Credit Facility. The Borrower may make
payments to the Debt Service Fund earlier than required by this section,
but such payments shall not affect the accrual of interest. In addition,
the Borrower shall pay to the Trustee, as and when the same shall become
due, all other amounts due under the Financing Documents, together with
interest thereon at the then applicable rate as set forth herein in Section
6.2(G). The Borrower shall have the option to prepay its loan obligation in
whole or in part at the times and in the manner provided in Article VIII
hereof.
(D) The payments to be made under Section 3.1(C) shall be
appropriately adjusted to reflect the date of issue of Bonds, accrued
interest deposited in the Debt Service Fund, if any, and any purchase or
redemption of Bonds so that there will be available on each payment date
the amount necessary to pay the interest and principal due or coming due on
the Bonds and so that accrued interest will be applied to the installments
of interest to which it is applicable.
(E) At any time when any principal of the Bonds is overdue, the
Borrower shall also have a continuing obligation to pay to the Trustee for
deposit in the Debt Service Fund an amount equal to interest on the overdue
principal but the installment payments required under this section shall
not otherwise bear interest. Redemption premiums shall not bear interest.
(F) The payment obligations of the Borrower in this Section 3.1
are subject in all respects to the provisions of Sections 3.7 and 3.8
hereof regarding the use of Priority Amounts and the effect of drawings
under the Credit Facility.
(G) In the event the Borrower should fail to make any of the
payments required under the foregoing provisions of this Section 3.1, the
item or installment so in default shall continue as an obligation of the
Borrower until the amount in default shall have been fully paid, and the
Borrower agrees to pay or cause to be paid the same with interest thereon
at the rate determined in accordance with Article II of the Indenture until
paid in accordance herewith and with the Indenture.
Section 3.2. Other Amounts Payable. (A) The Borrower hereby further
expressly agrees to pay to the Trustee as and when the same shall become
due, (i) an amount equal to the initial and annual fees of the Trustee for
the ordinary services of the Trustee rendered and its ordinary expenses
incurred under the Indenture, including fees and expenses as Paying Agent
and the fees and expenses of Trustee's counsel, including fees and expenses
as registrar and in connection with preparation and delivery of new Bonds
upon exchanges or transfers, (ii) the reasonable fees and expenses of the
Trustee and any Paying Agents on the Bonds for acting as paying agents as
provided in the Indenture, including fees and expenses of the Paying Agent
as registrar and in connection with the preparation of new Bonds upon
exchanges, transfers or redemptions, (iii) the reasonable fees and expenses
of the Bank and the Remarketing Agent for the performance of their duties
as provided in the Indenture, including the reasonable fees of their
counsel and other expenses the Remarketing Agent may incur in providing for
accurate offering documents in connection therewith, (iv) the reasonable
fees and charges of the Trustee for extraordinary services rendered by it
and extraordinary expenses incurred by it under the Indenture, including
reasonable counsel fees and expenses, and (v) fees and expenses of Bond
Counsel and the Authority for any future action requested of either.
(B) The Borrower also agrees to pay all amounts payable by it
under the Financing Documents at the time and in the manner therein
provided.
Section 3.3. Manner of Payment. The payments provided for in Section
3.1 hereof shall be made by any reasonable method providing immediately
available funds at the time and place of payment directly to the Trustee
for the account of the Authority and shall be deposited in the Debt Service
Fund. The additional payments provided for in Section 3.2 shall be made in
the same manner directly to the entitled party or to the Trustee for its
own use or disbursement to the Paying Agents, as the case may be.
Section 3.4. Obligation Unconditional. The obligations of the
Borrower under the Financing Documents shall be absolute and unconditional,
irrespective of any defense or any rights of setoff, recoupment or
counterclaim it might otherwise have against the Authority or the Trustee.
The Borrower will not suspend or discontinue any such payment or terminate
this Agreement (other than in the manner provided for hereunder) for any
cause, including, without limiting the generality of the foregoing, any
acts or circumstances that may constitute failure of consideration, failure
of title, or commercial frustration of purpose, or any damage to or
destruction of the Project, or the taking by eminent domain of title to or
the right of temporary use of all or any part of the Project, or any change
in the tax or other laws of the United States, the State or any political
subdivision of either thereof, or any failure of the Authority or the
Trustee to perform and observe any agreement or covenant, whether expressed
or implied, or any duty, liability or obligation arising out of or
connected with the Financing Documents.
Section 3.5. Security Clauses. The Authority hereby notifies the
Borrower and the Borrower acknowledges that, among other things, the
Borrower's loan payments and all of the Authority's right, title and
interest under the Financing Documents to which it is a party (except its
rights under Section 6.2 hereof) are being concurrently with the execution
and delivery hereof endorsed, pledged and assigned without recourse by the
Authority to the Trustee as security for the Bonds as provided in the
Indenture.
Section 3.6. Issuance of Bonds. The Authority has concurrently with
the execution and delivery hereof sold and delivered the Bonds under and
pursuant to a resolution adopted by the Authority on September 8, 1993,
authorizing their issuance under and pursuant to the Indenture. The
proceeds of sale of the Bonds shall be applied as provided in Articles IV
and V of the Indenture.
Section 3.7. Use of Priority Amounts. The Borrower and the Authority
acknowledge their intention to minimize the risk that any payment made to a
Bondowner from amounts provided by or on behalf of the Borrower may be
determined by a bankruptcy court to constitute a preference. To this end
the parties agree that payments to Bondowners on Bonds supported by a
Credit Facility shall be made only from Priority Amounts, except when and
to the extent no Priority Amounts are available for the purpose as provided
in Section 5.8(e) of the Indenture.
Section 3.8. Effect of Drawings Under Credit Facility. The payment of
obligations of the Borrower under this Agreement and the Note with respect
to the Bonds shall be completely satisfied to the extent of all drawings
made under the Credit Facility for the purpose of satisfying such
obligations.
Section 3.9. Effective Date and Term. (A) This Agreement shall become
effective upon its execution and delivery by the parties hereto, shall
remain in full force from such date and, subject to the provisions hereof
(including particularly Articles VII and VIII), shall expire on such date
as the Indenture shall be discharged and satisfied in accordance with the
provisions of subsection 12.1(A) thereof. The Borrower's obligations under
Sections 6.2 and 6.3 hereof, however, shall survive the expiration of this
Agreement.
(B) Within 60 days of such expiration the Authority shall deliver
to the Borrower any documents and take or cause the Trustee, at the
Borrower's expense, to take any such reasonable actions as may be necessary
to effect the cancellation, release and satisfaction of the Indenture and
the Financing Documents.
Section 3.10. Borrower's Purchase of Bonds. Pursuant to Section 5.8(F)
of the Indenture, if the amount drawn on the Credit Facility and deposited
with the Paying Agent, together with all other amounts (including
remarketing proceeds) received by the Paying Agent for the purchase of
Bonds supported by a Credit Facility and tendered pursuant to Section
2.3(G)(1)(c) or 2.3(G)(2)(c) or (d) of the Indenture, is not sufficient to
pay the Purchase Price of such Bonds on the Purchase Date, the Paying Agent
shall before 3:30 P.M. on such Purchase Date, notify the Borrower, the
Remarketing Agent and the Trustee of such deficiency by telephone promptly
confirmed in writing. The Borrower shall pay to the Paying Agent in
immediately available funds by 4:00 P.M. on the Purchase Date an amount
equal to the Purchase Price of such Bonds less the amount, if any,
available to pay the Purchase Price in accordance with Section 9.18 of the
Indenture from the proceeds of the remarketing of such Bonds or from
drawings on the Credit Facility, as reported by the Paying Agent. Bonds so
purchased with moneys furnished by the Borrower shall be Borrower Bonds.
Section 3.11. Letter of Credit. The Borrower has arranged,
concurrently with the original issuance and authentication of the Bonds,
for the delivery to the Paying Agent of the Letter of Credit having a term
expiring three years from the date of issuance, and providing for the
Paying Agent to be entitled to draw on or prior to the Termination Date (as
defined therein), an amount that is not less than the sum of the aggregate
principal amount (or that portion of the purchase price corresponding to
principal) of the Outstanding Bonds and the aggregate amount of interest
accrued on such Bonds (or that portion of the purchase price corresponding
to interest).
Section 3.12. Requirements for Delivery of a Substitute Credit
Facility. (A) The Borrower may, upon satisfaction of the requirements set
forth in this Section, at its option (except during the period between the
giving of notice of mandatory tender for purchase on account of the
expiration of the Credit Facility and the Purchase Date), provide for the
delivery to the Paying Agent of a substitute Credit Facility; provided,
however, that (1) the Credit Facility being replaced shall in no event be
terminated or released until the Borrower has given not less than
forty-five (45) days' written notice to the Authority, the Trustee, the
Paying Agent and the Remarketing Agent, and further the Paying Agent has
received the proceeds of all outstanding drawings on the Credit Facility
being replaced, (2) if any Bonds supported by the Credit Facility being
replaced are in the Weekly Mode, the Paying Agent has given not less than
(30) days' written notice of the termination or release of the Credit
Facility to owners of such Bonds in the Weekly Mode and (3) if any of the
Bonds supported by the Credit Facility being replaced are in the Flexible
Mode, such Credit Facility shall in no event be terminated or released
earlier than on the second Business Day after an Effective Date for all
such Bonds or such earlier day on or after such Effective Date on which the
full Purchase Price for such Bonds is received by the Paying Agent. Any
notice given pursuant to clause (1) or (2) above shall specify the
expiration date of the Credit Facility and the name of the entity providing
the substitute Credit Facility and shall advise that the Credit Facility
will terminate on the date stated in such notice.
(B) Each Credit Facility must:
(i) be an irrevocable, unconditional obligation of a
financial institution;
(ii) be on terms no less favorable to the Paying Agent than
the Letter of Credit and entitle the Paying Agent to draw upon or demand
payment and receive in immediately available funds an amount equal to the
sum of the principal amount of the Bonds supported by the Credit Facility,
any premium applicable thereto, and (A) forty-five (45) days' accrued
interest at the Maximum Interest Rate on the principal amount of Bonds then
Outstanding in the Weekly Mode, or (B) thirty-eight (38) days' accrued
interest at the Maximum Interest Rate on the principal amount of Bonds then
Outstanding in the Flexible Mode; and
(iii) provide for a term which may not expire in less than
360 days and which may not expire or be terminated prior to the fifth
Business Day after the mandatory tender for purchase as provided in Section
2.3(G)(1)(c) or 2.3(G)(2)(d) of the Indenture. The Borrower shall not
enter into any Reimbursement Agreement or agree to any amendment of a
Reimbursement Agreement which in any way limits the obligation of the Bank
to provide funds under the Credit Facility without the prior written
consent of 100% of the principal amount of the Bonds Outstanding and
entitled to the benefit thereof.
(C) No substitute Credit Facility may be delivered to the Trustee
for any purpose under this Agreement or the Indenture unless accompanied by
the following documents: (i) an opinion of counsel for the issuer of the
substitute Credit Facility to the effect that it constitutes a legal, valid
and binding obligation of the issuer enforceable in accordance with its
terms; (ii) an opinion of Bond Counsel to the effect that the issuance of a
substitute Credit Facility will not adversely affect the exclusion of
interest on the Bonds from gross income for federal income tax purposes and
that such Credit Facility is permitted under the Indenture; (iii) an
opinion of counsel to the Borrower, satisfactory to the Trustee stating
that the delivery of such substitute Credit Facility is authorized under
this Agreement and complies with the terms hereof; (iv) a certificate of
the Bank that all amounts due under the Reimbursement Agreement have been
paid and that the Company has fulfilled all its obligations arising out of
such Agreement; (v) an executed copy of the Reimbursement Agreement entered
into with respect to the substitute Credit Facility; (vi) copies of any
other documents, agreements or arrangements entered into directly or
indirectly between the Borrower and the entity issuing the substitute
Credit Facility with respect to the transactions contemplated by the
substitute Credit Facility and related Reimbursement Agreement; and (vii)
such other documents and opinions as the Trustee or the Authority may
reasonably request. Notice of the substitution, replacement, termination
or extension of a Credit Facility shall be sent by the Paying Agent to
Moody's and S&P and shall include the new expiration date of the Credit
Facility and the name of the entity providing the substitute Credit
Facility.
The substitute Credit Facility, related Reimbursement Agreement and
other documents, agreements and arrangements entered into and delivered
with respect to the delivery of a substitute Credit Facility shall not
include any provisions less favorable to the owners of the Bonds than the
provisions of the Credit Facility and related Reimbursement Agreement,
documents, agreements and arrangements, including provisions regarding the
acceleration of the Bonds, any right of setoff of assets of the account
party by the entity issuing the substitute Credit Facility, and any direct
or indirect pledge of collateral which is not pledged on a priority or
parity basis to the owners of the Bonds.
Section 3.13. Securities Laws. In any remarketing of Bonds under this
Agreement, the Borrower shall at all times comply with applicable federal
and state securities laws.
Section 3.14. New York Paying Agent. The Borrower agrees that if at
any time it becomes necessary or desirable to have a Paying Agent capable
of performing in New York, New York, it shall remove Shawmut Bank
Connecticut, National Association as Paying Agent and a successor shall be
appointed pursuant to Section 9.11 of the Indenture.
ARTICLE IV
THE PROJECT
Section 4.1. Completion of the Project. (A) The Borrower represents
and warrants that the Project has been completed.
(B) The Borrower affirms that it shall bear all of the costs and
expenses in connection with the preparation of the Financing Documents and
the Indenture, the preparation and delivery of any legal instruments and
documents necessary in connection therewith and their filing and recording,
if required, and all taxes and charges payable in connection with any of
the foregoing. Such costs and all other costs of the Project shall be paid
by the Borrower or from the Refunding Fund in the manner and to the extent
provided in the Indenture.
Section 4.2. No Warranty Regarding Condition, Suitability or Cost of
Project. Neither the Authority, nor the Trustee, nor any Bondholder makes
any warranty, either expressed or implied, as to the Project or its
condition or that it will be suitable for the Borrower's purposes or needs,
or that the insurance required hereunder will be adequate to protect the
Borrower's business or interest, or that the proceeds of the Bonds will be
sufficient to refund the Prior Obligations.
Section 4.3. Taxes. (A) The Borrower will pay when due all material
(1) taxes, assessments, water rates and sewer use or rental charges, (2)
payments in lieu thereof which may be required by law, and (3) governmental
charges and impositions of any kind whatsoever which may now or hereafter
be lawfully assessed or levied upon the Project or any part thereof, or
upon the rents, issues, or profits thereof, whether directly or indirectly.
With respect to special assessments or other governmental charges that may
lawfully be paid in installments over a period of years, the Borrower shall
be obligated to pay only such installments as are required to be paid
during the Term.
(B) The Borrower may, at its expense and in its own name, in good
faith contest any such taxes, assessments and other charges and payments in
lieu of taxes including assessments and, in the event of such contest, may
permit the taxes, assessments or other charges or payments in lieu of
taxes, including assessments so contested to remain unpaid, provided prior
written notice thereof has been given to the Trustee and reserves to the
extent required by the Reimbursement Agreement are maintained, during the
period of such contest and any appeal therefrom. Nothing herein shall
preclude the Borrower, at its expense and in its own name and behalf, from
applying for any tax exemption allowed by the federal government, the State
or any political or taxing subdivision thereof under any existing or future
provision of law which grants or may grant such tax exemption.
Section 4.4. Insurance. (A) The Borrower shall insure the Project
against loss or damage by fire, flood, lightning, windstorm, vandalism and
malicious mischief and other hazards, casualties, contingencies and
extended coverage risks in such amounts and in such manner as is required
by applicable federal or state law and shall pay when due the premiums
thereon.
(B) The Borrower further agrees that it will at all times carry
public liability insurance with respect to the Project to the extent
required by applicable federal or state law.
(C) As an alternative to the hazard insurance and public liability
insurance requirements of subsections (A) or (B) above the Borrower may
self-insure against hazard or public liability risks.
(D) The insurance coverage required by this Section may be
effected under overall blanket or excess coverage policies of the Borrower
or any affiliate and may be carried with any insurer other than an
unauthorized insurer under the Connecticut Unauthorized Insurers Act. The
Borrower shall furnish evidence satisfactory to the Authority or the
Trustee, promptly upon the request of either, that the required insurance
coverage is valid and in force.
Section 4.5. Compliance with Law. The Borrower will observe and
comply with all material laws, regulations, ordinances, rules, and orders
(including without limitation those relating to zoning, land use,
environmental protection, air, water and land pollution, wetlands, health,
equal opportunity, minimum wages, worker's compensation and employment
practices) of any federal, state, municipal or other governmental authority
relating to the Project except during any period during which the Borrower
at its expense and in its name shall be in good faith contesting its
obligation to comply therewith.
Section 4.6. Maintenance and Repair. At its own expense, the Borrower
will keep and maintain or cause the Project to be kept and maintained in
accordance with sound utility operating practice and in good condition,
working order and repair, will not commit or suffer any waste thereon, and
will make all material repairs and replacements thereto which may be
required in connection therewith. Nothing in this Section 4.6 shall (1)
apply to any portion of the Project beyond its useful or economic life or
(2) apply to the use and disposition by the Borrower of any part of the
Project in the ordinary course of its business.
ARTICLE V
CONDEMNATION
DAMAGE AND DESTRUCTION
Section 5.1. No Abatement of Payments Hereunder. If the Project shall
be damaged or either partially or totally destroyed, or if title to or the
temporary use of the whole or any part thereof shall be taken or condemned
by a competent authority for any public use or purpose, there shall be no
abatement or reduction in the amounts payable by the Borrower hereunder and
the Borrower shall continue to be obligated to make such payments. In any
such case the Borrower shall promptly give written notice thereof to the
Authority and the Trustee.
Section 5.2. Project Disposition Upon Condemnation, Damage or
Destruction. In the event of any such condemnation, damage or destruction
the Borrower shall:
(1) Comply with the applicable provisions of the Mortgage
Indentures and the Sharing Agreement concerning the repair, reconstruction
or restoration of the Project or give notice to the Authority of its
decision not to so comply; and/or
(2) If and as permitted by Section 8.1 hereof, exercise its option
to prepay its loan obligation in full.
Section 5.3. Application of Net Proceeds of Insurance or Condemnation.
The Net Proceeds from any insurance or condemnation award with respect to
the Project shall be applied as provided in the Mortgage Indentures, or, in
the event that the Mortgage Indentures have been discharged or are no
longer in effect, shall be applied at the direction of the Borrower with
the approval of the Authority.
ARTICLE VI
COVENANTS
Section 6.1. The Borrower to Maintain its Corporate Existence;
Conditions under which Exceptions Permitted. (A) The Borrower covenants and
agrees that, during the Term of this Agreement it will maintain its
corporate existence, will continue to be a corporation either organized
under the laws of or duly qualified to do business as a foreign corporation
in the State and in all jurisdictions necessary in the operation of its
business, will not dissolve or otherwise dispose of all or substantially
all of its assets and will not consolidate with or merge into another
corporation or permit one or more other corporations to consolidate with or
merge into it.
(B) The Borrower may, however, without violating the agreements
contained in this Section, consolidate with or merge into another
corporation or permit one or more other corporations to consolidate with or
merge into it, or sell or otherwise transfer to another corporation all or
substantially all of its assets as an entity and thereafter liquidate or
dissolve, if (a) the Borrower is the surviving, resulting or transferee
corporation, as the case may be, or (b) in the event the Borrower is not
the surviving, resulting or transferee corporation, as the case may be,
such corporation (i) is a solvent corporation either organized under the
laws of or duly qualified to do business as a foreign corporation subject
to service of process in the State and (ii) assumes in writing all of the
obligations of the Borrower herein, and under the Note.
Section 6.2. Indemnification, Payment of Expenses, and Advances. (A)
The Borrower agrees to protect, defend and hold harmless the Trustee, the
Paying Agent, the Authority, the State, agencies of the State and the
members, servants, agents, officers, employees and directors of the
Trustee, the Paying Agent, the Authority or the State (the "Indemnified
Parties") from any claim, demand, suit, action or other proceeding and any
liabilities, costs, and expenses whatsoever by any person or entity
whatsoever, arising or purportedly arising from or in connection with the
Financing Documents, the Indenture, the Bonds, or the transactions
contemplated thereby or actions taken thereunder by any person (including
without limitation the filing of any information, form or statement with
the Internal Revenue Service), except for any wilful and material
misrepresentation, wilful misconduct or gross negligence on the part of the
Indemnified Parties and except for any bad faith on the part of any
Indemnified Party other than the Authority.
The Borrower agrees to indemnify and hold harmless any Indemnified Party
against any and all claims, demands, suits, actions or other proceedings
and all liabilities, costs and expenses whatsoever caused by any untrue
statement or misleading statement or alleged untrue statement or alleged
misleading statement of a material fact contained in the written
information provided by the Borrower in connection with the issuance of the
Bonds or incorporated by reference therein or caused by any omission or
alleged omission from such information of any material fact required to be
stated therein or necessary in order to make the statements made therein in
the light of the circumstances under which they were made, not misleading.
(B) The Authority and the Trustee shall not be liable for any
damage or injury to the persons or property of the Borrower or its members,
directors, officers, agents, servants or employees, or any other person who
may be about the Project due to any act or omission of any person other
than the Authority or the Trustee or their respective members, directors,
officers, agents, servants and employees.
(C) The Borrower releases each Indemnified Party from, agrees that
no Indemnified Party shall be liable for, and agrees to hold each
Indemnified Party harmless against, any attorney fees and expenses,
expenses or damages incurred because of any investigation, review or
lawsuit commenced by the Trustee or the Authority in good faith with
respect to the Financing Documents, the Indenture, the Bonds and the
Project Realty and the Project Equipment, and the Authority or the Trustee
shall promptly give written notice to the Borrower with respect thereto.
(D) All covenants, stipulations, promises, agreements and
obligations of the Authority and the Trustee contained herein shall be
deemed to be the covenants, stipulations, promises, agreements and
obligations of the Authority and the Trustee and not of any member,
director, officer or employee of the Authority or the Trustee in its
individual capacity, and no recourse shall be had for the payment of the
Bonds or for any claim based thereon or hereunder against any member,
director, officer or employee of the Authority or the Trustee or any
natural person executing the Bonds.
(E) In case any action shall be brought against one or more of
the Indemnified Parties based upon any of the above and in respect of which
indemnity may be sought against the Borrower, such Indemnified Party shall
promptly notify the Borrower in writing, enclosing a copy of all papers
served, but the omission so to notify the Borrower of any such action shall
not relieve it of any liability which it may have to any Indemnified Party
otherwise than under this Section 6.2. In case any such action shall be
brought against any Indemnified Party and it shall notify the Borrower of
the commencement thereof, the Borrower shall be entitled to participate in
and, to the extent that it shall wish, to assume the defense thereof with
counsel satisfactory to such Indemnified Party, and after notice from the
Borrower to such Indemnified Party of the Borrower's election so to assume
the defense thereof, the Borrower shall not be liable to such Indemnified
Party for any subsequent legal or other expenses attributable to such
defense, except as set forth below, other than reasonable costs of
investigation subsequently incurred by such Indemnified Party in connection
with the defense thereof. The Indemnified Party shall have the right to
employ its own counsel in any such action, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Party unless (i)
the employment of counsel by such Indemnified Party has been authorized by
the Borrower; (ii) the Indemnified Party shall have reasonably concluded
that there may be a conflict of interest between the Borrower and the
Indemnified Party in the conduct of the defense of such action (in which
case the Borrower shall not have the right to direct the defense of such
action on behalf of the Indemnified Party); or (iii) the Borrower shall not
in fact have employed counsel reasonably satisfactory to the Indemnified
Party to assume defense of such action; provided, however, that Borrower
shall not be responsible for the fees and expenses of more than one such
law firm unless an Indemnified Party shall have reasonably concluded that
there may be a conflict of interest between such Indemnified Party and any
other Indemnified Party requiring the use of separate counsel, or Borrower
has not employed counsel which is satisfactory to each Indemnified Party.
The Borrower shall not be liable for any settlement of any action or claim
effected without its consent.
(F) The Borrower also agrees to pay all reasonable or necessary
out-of-pocket expenses of the Authority in connection with the issuance of
the Bonds, the administration of the Financing Documents and the
enforcement of its rights thereunder.
(G) In the event the Borrower fails to pay any amount or perform
any act under the Financing Documents, the Trustee or the Authority may pay
the amount or perform the act, in which event the costs, disbursements,
expenses and reasonable counsel fees and expenses thereof, together with
interest thereon from the date the expense is paid or incurred at the prime
interest rate generally prevailing among banks in the State on the date of
the advance plus 1% shall be an additional obligation hereunder payable
upon demand by the Authority or the Trustee.
(H) Any obligation of the Borrower to the Authority under this
Section shall be separate from and independent of the other obligations of
the Borrower hereunder, and may be enforced directly by the Authority
against the Borrower irrespective of any action taken by or on behalf of
the owners of the Bonds.
(I) The obligations of the Borrower under this section,
notwithstanding any other provisions contained in the Financing Documents,
shall survive the termination of this Agreement and shall be recourse to
the Borrower, and for the enforcement thereof any Indemnified Party shall
have recourse to the general credit of the Borrower.
Section 6.3. Incorporation of Tax Regulatory Agreement; Payments Upon
Taxability. (A) For purpose of this Section, the term owner means the
Beneficial Owner of the Bonds so long as the Book-Entry System is in
effect.
(B) The representations, warranties, covenants and statements of
expectation of the Borrower set forth in the Tax Regulatory Agreement are
by this reference incorporated in this Agreement as though fully set forth
herein.
(C) If any owner of the Bonds receives from the Internal Revenue
Service a notice of assessment and demand for payment with respect to
interest on any Bond (except a notice and demand based upon the assertion
that the owner of the Bonds is a Substantial User or Related Person), an
appeal may be taken by the owner of the Bonds at the option of the
Borrower. Without limiting the generality of the foregoing, the Borrower
shall have the right to direct the Trustee to direct the owner of the Bonds
to take such appeal or not to take such appeal. In either case all
expenses of the appeal including reasonable counsel fees and expenses shall
be paid by the Borrower, and the owner of the Bonds and the Borrower shall
cooperate and consult with each other in all matters pertaining to any such
appeal, except that no owner of the Bonds shall be required to disclose or
furnish any non-publicly disclosed information, including, without
limitation, financial information and tax returns.
(D) Not later than 90 days following a Determination of
Taxability, the Borrower shall pay to the Trustee an amount sufficient,
when added to the amount then in the Debt Service Fund and available for
such purpose, to retire and redeem all Bonds then Outstanding, in
accordance with Section 2.4 of the Indenture.
(E) The obligation of the Borrower to make the payments provided
for in this Section shall be absolute and unconditional, and the failure of
the Authority or the Trustee to execute or deliver or cause to be executed
or delivered any documents or to take any action required under this
Agreement or otherwise shall not relieve the Borrower of its obligation
under this Section. Notwithstanding any other provision of this Agreement
or the Indenture, the Borrower's obligations under this Section shall
survive the termination of this Agreement and the Indenture.
(F) The Borrower's payment obligations under this Section are
further subject in all respects to the provisions of Section 3.7 and 3.8
hereof regarding the use of Priority Amounts and the effect of drawings
under the Letter of Credit.
(G) The occurrence of a Determination of Taxability shall not be
an Event of Default hereunder but shall require only the performance of the
obligations of the Borrower stated in this Section, the breach of which
shall constitute an Event of Default as provided in Section 7.1 hereof.
(H) At any time after the issuance of the Bonds, the Authority
shall, upon (1) the release of a published Revenue Ruling by the Internal
Revenue Service and the receipt by the Authority of an opinion of Bond
Counsel to the effect that such ruling may adversely affect the exclusion
of interest on the Bonds from gross income for federal income tax purposes,
and (2) receipt from the Borrower, within 30 days after the Authority has
mailed copies of such ruling and such opinion to the Borrower, of a written
request to proceed in accordance with this Section, proceed to apply for
and use its best efforts to obtain a ruling from the Internal Revenue
Service, pursuant to Revenue Procedure 88-33 or any other procedures
subsequently established by the Internal Revenue Service, as to the
qualification or continued qualification of interest on the Bonds for
exclusion from gross income for federal income tax purposes. The Authority
and the Borrower shall cooperate and consult with each other in all matters
pertaining to such ruling request. All expenses of the Authority in
connection with such application including reasonable counsel fees shall be
paid by the Borrower.
Section 6.4. Covenant as to Project Use. (A) The Borrower agrees that
it shall promptly notify the Authority and the Trustee upon the occurrence
of any of the following events, in each case, whether as a result of a
determination by the Borrower, the Massachusetts Department of Public
Utilities or the United States Nuclear Regulatory Commission or its
successors,
(1) Abandonment of a substantial portion of the Project at
any one time or in the aggregate;
(2) Any disposition of all or any part of the Borrower's
ownership interest in the Project other than (i) to a company which is part
of Northeast Utilities, (ii) in connection with a merger, consolidation, or
sale of assets permitted by Section 6.1(B) hereof, (iii) in connection with
any form of financing (including without limitation the grant of a mortgage
or security interest or sale in connectin with a sale and lease back) by
the Borrower, (iv) in any case in which the remaining aggregate ownership
interest of Northeast Utilities is greater than 50 percent, (v) of any
portion of the Project beyond its useful or economic life, or (vi) in the
ordinary course of the Borrower's business. For purposes of this
paragraph, "Northeast Utilities" means Northeast Utilities, its
subsidiaries (whether direct or indirect) and their successors and assigns;
or
(3) Any determination, following damage or destruction of all
or substantially all of the Project, not to repair, reconstruct, relocate
or replace the Project.
(B) In the event that the Authority receives notice from the
Borrower of the occurrence of any event described in subsection (A) of this
Section 6.4, the Borrower agrees that the Authority may, not later than one
year after the receipt of such notice from the Borrower, declare that
payment of all amounts due under the Financing Documents shall be
accelerated by notice to the Borrower and the Trustee stating that such
amounts are due and payable by the Borrower in full on a date selected by
the Borrower and set forth in a notice to the Trustee and the Authority,
which date shall be not later than three years from the date of mailing of
the Authority's acceleration notice to the Borrower.
(C) Any failure of the Borrower to comply with the provisions
of this Section shall be subject to the provisions of Section 7.3 hereof.
Section 6.5. Further Assurances and Corrective Instruments. The
Authority and the Borrower agree that they will, from time to time,
execute, acknowledge and deliver, or cause to be executed, acknowledged and
delivered, such supplements hereto and such further instruments as may
reasonably be required for correcting any inadequate or incorrect
description of the Project Realty or Project Equipment or for carrying out
the intention of or facilitating the performance of this Agreement.
Section 6.6. Covenant by Borrower as to Compliance with Indenture.
The Borrower covenants and agrees that it will comply with the provisions
of the Indenture with respect to the Borrower and that the Trustee and the
Bondholders shall have the power and authority provided in the Indenture.
The Borrower further agrees to aid in the furnishing to the Authority or
the Trustee of opinions that may be required under the Indenture. The
Borrower covenants and agrees that the Trustee shall be entitled to and
shall have all the rights, including the right to enforce against the
Borrower the provisions of the Financing Documents, pertaining to the
Trustee notwithstanding the fact that the Trustee is not a party to the
Financing Documents.
Section 6.7. Assignment of Agreement or Note. (A) The Borrower may
not assign its rights, interests or obligations hereunder or under the Note
except as may be permitted pursuant to Section 6.1(B) hereof.
(B) The Authority agrees that it will not assign or transfer any
of the Financing Documents or the revenues and other receipts, funds and
monies to be received thereunder during the Term except to the Trustee as
provided in this Agreement and the Indenture.
Section 6.8. Inspection. The Authority, the Trustee and their duly
authorized agents shall have (1) the right at all reasonable times to enter
upon and to examine and inspect the Project and (2) such rights of access
thereto as may be reasonably necessary for the proper maintenance and
repair thereof in the event of failure by the Borrower to perform its
obligations under this Agreement, subject, in each case, to all applicable
laws, rules, regulations, orders and guidelines. The Authority and the
Trustee shall also be permitted, at all reasonable times, to examine the
books and records of the Borrower with respect to the Project.
Section 6.9. Default Notification. Within seven (7) days after
becoming aware of any condition or event which constitutes, or with the
giving of notice or the passage of time would constitute, an Event of
Default or an "Event of Default" under Section 8.1 of the Indenture, the
Borrower shall deliver to the Authority, the Bank, if any, the Remarketing
Agent, the Paying Agent and the Trustee a notice stating the existence and
nature thereof and specifying the corrective steps, if any, the Borrower
is taking with respect thereto.
Section 6.10. Covenant Against Discrimination. (A) The Borrower in the
performance of this Agreement will not discriminate or permit
discrimination against any person or group of persons on the grounds of
race, color, religion, national origin, age, sex, sexual orientation,
marital status, physical or learning disability, political beliefs, mental
retardation or history of mental disorder in any manner prohibited by the
laws of the United States or of the State.
(B) The Borrower will comply with the provisions of the resolution
adopted by the Authority on June 14, 1977, as amended, and the policy of
the Authority implemented pursuant thereto concerning the promotion of
equal employment opportunity through affirmative action plans. The
resolution requires that all borrowers receiving financial assistance from
the Authority adopt and implement an affirmative action plan prior to the
closing of the loan. The plan shall be updated annually as long as the
Bonds remain Outstanding.
Section 6.11. Authority Costs and Expenses. The Authority agrees that
it shall in all instances act in good faith in incurring costs, expenses
and legal fees in connection with the transactions contemplated by this
Agreement and the Indenture.
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.1. Events of Default. Any one or more of the following
shall constitute an "Event of Default" hereunder:
(1) Any material representation or warranty made by the Borrower
in the Financing Documents or any certificate, statement, data or
information furnished in writing to the Authority or the Trustee by the
Borrower in connection with the closing of the initial issue of the Bonds
or included by the Borrower in its application to the Authority for
assistance proves at any time to have been incorrect when made in any
material respect.
(2) Failure by the Borrower to pay any amount that has become due
and payable with respect to the Bonds or any other amount due and payable
pursuant to the Financing Documents and the continuance of such failure for
more than five Business Days.
(3) Failure by the Borrower to comply with the default
notification provisions of Section 6.9 hereof.
(4) The occurrence of an "Event of Default" under Section 8.1(A)
of the Indenture (other than an occurrence under Section 8.1(A)(2)(a)).
(5) Failure by the Borrower to observe or perform any covenant,
condition or agreement hereunder or under the Financing Documents (except
those referred to above) and (a) continuance of such failure for a period
of sixty days after receipt by the Borrower of written notice specifying
the nature of such failure or (b) if by reason of the nature of such
failure the same cannot be remedied within the sixty day period, the
Borrower fails to proceed with reasonable diligence after receipt of the
notice to cure the failure.
(6) The Borrower shall (a) apply for or consent to the appointment
of a receiver, trustee, liquidator or custodian or the like of itself or of
its property, (b) admit in writing its inability to pay its debts generally
as they become due, (c) make a general assignment for the benefit of
creditors, (d) be adjudicated a bankrupt or insolvent, or (e) commence a
voluntary case under the Federal bankruptcy laws of the United States of
America or file a voluntary petition or answer seeking reorganization, an
arrangement with creditors or an order for relief or seeking to take
advantage of any insolvency law or file an answer admitting the material
allegations of a petition filed against it in any bankruptcy,
reorganization or insolvency proceeding; or corporate action shall be taken
by it for the purpose of effecting any of the foregoing; or if without the
application, approval or consent of the Borrower, a proceeding shall be
instituted in any court of competent jurisdiction, seeking in respect of
the Borrower an adjudication in bankruptcy, reorganization, dissolution,
winding up, liquidation, a composition or arrangement with creditors, a
readjustment of debts, the appointment of a trustee, receiver, liquidator
or custodian or the like of the Borrower or of all or any substantial part
of its assets, or other like relief in respect thereof under any bankruptcy
or insolvency law, and, if such proceeding is being contested by the
Borrower in good faith, the same shall continue undismissed, or pending and
unstayed, for any period of 90 consecutive days.
Section 7.2. Remedies on Default. (A) Whenever any Event of Default
shall have occurred, the Trustee, or the Authority where so provided
herein, may take any one or more of the following actions:
(1) The Trustee, as and to the extent provided in Article VIII of
the Indenture, may cause all amounts payable under the Financing Documents
to be immediately due and payable without notice or demand of any kind,
whereupon the same shall become immediately due and payable.
(2) The Authority, without the consent of the Trustee or any
Bondholder, may proceed to enforce the obligations of the Borrower to the
Authority under this Agreement.
(3) The Trustee may take whatever action at law or in equity it
may have to collect the amounts then due and thereafter to become due, or
to enforce the performance or observance of the obligations, agreements,
and covenants of the Borrower under the Financing Documents.
(B) In the event that any Event of Default or any proceeding taken
by the Authority (or by the Trustee on behalf of the Authority) thereon
shall be waived or determined adversely to the Authority, then the Event of
Default shall be annulled and the Authority and the Borrower shall be
restored to their former rights hereunder, but no such waiver or
determination shall extend to any subsequent or other default or impair any
right consequent thereon.
Section 7.3 Remedies Upon Project Use Default. (A) If the Borrower
shall fail to notify the Authority of the occurrence of any event set forth
in Section 6.4(A) hereof within 60 days of the determination thereof as
provided in Section 6.4(A), the Authority may, not later than one year
after obtaining knowledge of such determination and so long as such failure
is continuing, send a notice to the Trustee and the Borrower calling for
the acceleration of all of the Borrower's obligations under the Financing
Documents and for the redemption of all of the Bonds Outstanding. Any such
notice (i) shall set forth in reasonable detail the event giving rise to
the Borrower's obligation under Section 6.4(A), (ii) shall be accompanied
by such evidence thereof as shall be acceptable to the Trustee, and (iii)
shall specify the dates upon which (a) notice of redemption of the Bonds is
to be given by the Trustee (which shall not be less than 180 days from the
date of the notice being given to the Trustee by the Authority) and (b) the
date redemption of Bonds is to occur (which shall be a date at least thirty
days after notice of redemption is to be given by the Trustee).
(B) If, after receipt of notice from the Authority as
provided in Section 6.4(B), the Borrower shall fail to select a date for
redemption of all Outstanding Bonds, the Authority may, not earlier than 60
days prior to the date which is three years after the date notice was
mailed to the Borrower as provided in Section 6.4(B), send a notice to the
Trustee and the Borrower calling for the redemption of all of the Bonds
then Outstanding. Any such notice shall specify the date that notice of
redemption is to be given by the Trustee and the date that such redemption
is to occur.
(C) On or before the redemption date specified by the Trustee
in its notice of redemption pursuant to this Section, the Borrower shall
pay, as a final loan payment hereunder, a sum sufficient, together with
other funds on deposit with the Trustee and available for such purpose, to
redeem all Bonds then Outstanding under the Indenture at 100% of the
principal amount thereof plus accrued interest to the redemption date. The
Borrower shall also pay or provide for all reasonable and necessary fees of
the Trustee and any Paying Agent accrued and to accrue through the date of
redemption of the Bonds and all other amounts due or to become due under
the Financing Documents.
Section 7.4. No Duty to Mitigate Damages. Unless otherwise required
by law, neither the Authority, the Trustee nor any Bondholder shall be
obligated to do any act whatsoever or exercise any diligence whatsoever to
mitigate the damages to the Borrower if an Event of Default shall occur.
Section 7.5. Remedies Cumulative. No remedy herein conferred upon or
reserved to the Authority or the Trustee is intended to be exclusive of any
other available remedy or remedies but each and every such remedy shall be
cumulative and shall be in addition to every remedy given under this
Agreement or now or hereafter existing at law or in equity or by statute.
Delay or omission to exercise any right or power accruing upon any default
or failure by the Authority or the Trustee to insist upon the strict
performance of any of the covenants and agreements herein set forth or to
exercise any rights or remedies upon default by the Borrower hereunder
shall not impair any such right or power or be considered or taken as a
waiver or relinquishment for the future of the right to insist upon and to
enforce, by injunction or other appropriate legal or equitable remedy,
strict compliance by the Borrower with all of the covenants and conditions
hereof, or of the right to exercise any such rights or remedies, if such
default by the Borrower be continued or repeated.
ARTICLE VIII
PREPAYMENT PROVISIONS
Section 8.1. Optional Prepayment. (A) The Borrower shall have, and is
hereby granted, the option to prepay its loan obligation and to cause the
corresponding optional redemption of the Bonds pursuant to Section 2.4(A)
of the Indenture at such times, in such amounts, and with such premium, if
any, for such optional redemption as set forth in the forms of the Bonds,
by delivering a written notice to the Trustee in accordance with Section
8.2 hereof, with a copy to the Authority, setting forth the amount to be
prepaid, the amount of Bonds requested to be redeemed with the proceeds of
such prepayment, and the date on which such Bonds are to be redeemed. Such
prepayment must be sufficient to provide monies for the payment of interest
and Redemption Price in accordance with the terms of the Bonds requested to
be redeemed with such prepayment and all other amounts then due under the
Financing Documents. In the event of any complete prepayment of its loan
obligation, the Borrower shall, at the time of such prepayment, also pay or
provide for the payment of all reasonable or necessary fees and expenses of
the Authority, the Trustee and the Paying Agent accrued and to accrue
through the final payment of all the Bonds. Any such prepayments shall be
applied to the redemption of Bonds in the manner provided in Section 2.4(A)
of the Indenture, and credited against payments due hereunder in the same
manner.
(B) The Borrower shall have, and is hereby granted, the option to
prepay its loan obligation in full at any time without premium if any of
the following events shall have occurred, as evidenced in each case by the
filing with the Trustee of a certificate of an Authorized Representative of
the Borrower to the effect that one of such events has occurred and is
continuing, and describing the same:
(1) Damage or destruction to any of the Plants or the Project to
such extent that in the opinion of the Borrower (expressed in a resolution
adopted by the Board of Directors of the Borrower (a "Board Resolution"))
and of an architect or engineer acceptable to the Borrower (who may be an
employee of the Borrower), both filed with the Authority and the Trustee,
(1) any of the Plants or the Project, as the case may be, cannot be
reasonably repaired, rebuilt, or restored within a period of six (6) months
to their condition immediately preceding such damage or destruction, or (2)
normal operations are thereby prevented from being carried on at any of the
Plants for a period of not less than six (6) months.
(2) Loss of title to or use of a substantial part of any of the
Plants or the Project as a result of the exercise of the power of eminent
domain which, in the opinion of the Borrower (expressed in a Board
Resolution) and of an architect or engineer acceptable to the Borrower (who
may be an employee of the Borrower), both filed with the Authority and the
Trustee, prevents or is likely to prevent normal operations from being
carried on at any of the Plants for a period of not less than six (6)
months.
(3) A substantial part of any of the Plants or the Project shall
become obsolete in the opinion of the Borrower (expressed in a Board
Resolution).
(4) A change in the Constitution of the State of Connecticut or of
the United States of America or legislative or executive action (whether
local, state, or federal) or a final decree, judgment or order of any court
or administrative body (whether local, state, or federal) that causes this
Agreement to become void or unenforceable or impossible of performance in
accordance with the intent and purpose of the parties as expressed herein
or, imposes unreasonable burdens or excessive liabilities upon the Borrower
with respect to any of the Plants or the Project or the operation thereof.
(5) The operation of any of the Plants or the Project shall have
been enjoined or shall otherwise have been prohibited by any order, decree,
rule or regulation of any court or of any local, state, or federal
regulatory body, administrative agency or other governmental body for a
period of not less than six (6) months.
(6) Changes which the Borrower cannot reasonably control in the
economic availability of fuel, materials, supplies, labor, equipment, or
other properties or things necessary for the efficient operation of any of
the Plants or the Project shall have occurred which, in the judgment of the
Borrower (expressed in a Board Resolution), render the continued operation
of any of the Plants uneconomical.
In any such case the final loan payment shall be a sum sufficient, together
with other funds deposited with Trustee and available for such purpose, to
redeem all Bonds then outstanding under the Indenture at the redemption
price of 100% of the principal amount thereof plus accrued interest to the
redemption date or dates and all other amounts then due under the Financing
Documents, and the Borrower shall also pay or provide for all reasonable or
necessary fees and expenses of the Trustee and Paying Agent and the
Remarketing Agent accrued and to accrue through final payment for the
Bonds. The Borrower shall deliver a written notice to the Trustee, with a
copy to the Authority, requesting the redemption of the Bonds under the
Indenture, which notice shall have attached thereto the applicable
certificate of the Authorized Representative of the Borrower. The
Borrower's right to so request the redemption of the Bonds upon the
occurrence of any single event listed in this Section 8.1(B) shall expire
six (6) months, and any such redemption shall occur within nine (9) months,
after such event occurs.
Section 8.2. Notice by the Borrower of Optional Prepayment. The
Borrower shall exercise its option to prepay its loan obligation pursuant
to Section 8.1(A) or (B) by giving written notice signed by an Authorized
Representative of the Borrower to the Trustee, the Authority, the Paying
Agent, and the Remarketing Agent at least five (5) days before the
prepayment date if Bonds to be redeemed with the amounts to prepaid
pursuant to the Indenture are then in the Flexible Mode, and forty-five
(45) days before the prepayment date if Bonds to be redeemed with the
amounts so prepaid pursuant to the Indenture are then in any other Mode.
Section 8.3. Mandatory Prepayment on Taxability. The Borrower shall
pay or cause the prepayment of its loan obligation following a
Determination of Taxability in the manner provided in Section 6.3 of this
Agreement.
Section 8.4. Mandatory Prepayment Upon Occurrence of Certain Events.
The Borrower shall pay or cause the prepayment of its loan obligation,
prior to the maturity of the Bonds, on a date selected by the Borrower,
which date shall be not later than three years after the date of mailing to
the Borrower of notice from the Authority of the Authority's election to
accelerate the Borrower's loan obligation hereunder as provided in Sections
6.4 and 7.3 hereof.
ARTICLE IX
GENERAL
Section 9.1. Indenture. (A) Monies received from the sale of the Bonds
and all loan payments made by the Borrower and all other monies received by
the Authority or the Trustee under the Financing Documents shall be applied
solely and exclusively in the manner and for the purposes expressed and
specified in the Indenture and in the Bonds and as provided in this
Agreement.
(B) The Borrower shall have and may exercise all the rights,
powers and authority given the Borrower in the Indenture and in the Bonds,
and the Indenture and the Bonds shall not be modified, altered or amended
in any manner which adversely affects such rights, powers and authority or
otherwise adversely affects the Borrower without the prior written consent
of the Borrower.
Section 9.2. Benefit of and Enforcement by Bondholders. The Authority
and the Borrower agree that this Agreement is executed in part to induce
the purchase by others of the Bonds and for the further securing of the
Bonds, and accordingly that all covenants and agreements on the part of the
Authority and the Borrower as to the amounts payable with respect to the
Bonds hereunder are hereby declared to be for the benefit of the holders
from time to time of the Bonds and may be enforced as provided in the
Indenture on behalf of the Bondholders by the Trustee.
Section 9.3. Force Majeure. In case by reason of force majeure either
party hereto shall be rendered unable wholly or in part to carry out its
obligations under this Agreement, then except as otherwise expressly
provided in this Agreement, if such party shall give notice and full
particulars of such force majeure in writing to the other party within a
reasonable time after occurrence of the event or cause relied on, the
obligations of the party giving such notice, other than the obligation of
the Borrower to make the payments required under the terms hereof or of the
Note, so far as they are affected by such force majeure, shall be suspended
during the continuance of the inability then claimed which shall include a
reasonable time for the removal of the effect thereof, but for no longer
period, and such parties shall endeavor to remove or overcome such
inability with all reasonable dispatch. The term "force majeure", as
employed herein, means acts of God, strikes, lockouts or other industrial
disturbances, acts of the public enemy, orders of any kind of the
Government of the United States, of the State or any civil or military
authority, insurrections, riots, epidemics, landslides, lightning,
earthquakes, volcanoes, fires, hurricanes, tornadoes, storms, floods,
washouts, droughts, arrests, restraining of government and people, civil
disturbances, explosions, partial or entire failure of utilities, shortages
of labor, material, supplies or transportation, or any other similar or
different cause not reasonably within the control of the party claiming
such inability. It is understood and agreed that the settlement of
existing or impending strikes, lockouts or other industrial disturbances
shall be entirely within the discretion of the party having the difficulty
and that the above requirements that any force majeure shall be reasonably
beyond the control of the party and shall be remedied with all reasonable
dispatch shall be deemed to be fulfilled even though such existing or
impending strikes, lockouts and other industrial disturbances may not be
settled and could have been settled by acceding to the demands of the
opposing person or persons.
Section 9.4. Amendments. This Agreement may be amended only with the
concurring written consent of the Trustee and, if required by the
Indenture, of the owners of the Bonds given in accordance with the
provisions of the Indenture.
Section 9.5. Notices. All notices, certificates or other
communications hereunder shall be sufficiently given and shall be deemed
given when delivered or when mailed by registered or certified mail,
postage prepaid, addressed as follows: if to the Authority, at 845 Brook
Street, Rocky Hill, Connecticut 06067, Attention: Program Manager - Loan
Administration; if to the Borrower, c/o Northeast Utilities Service Company
at 107 Selden Street, Berlin, Connecticut 06037, Attention: Assistant
Treasurer; if to the Remarketing Agent, Goldman Sachs & Co., 85 Broad
Street, New York, New York 10004, Attention: Municipal Bond Department; if
to the Paying Agent, Shawmut Bank Connecticut, National Association, 777
Main Street, Hartford, Connecticut 06115, Attention: Corporate Trust
Department; and if to the Trustee, Shawmut Bank Connecticut, National
Association, 777 Main Street, Hartford, Connecticut 06115, Attention:
Corporate Trust Department. A duplicate copy of each notice, certificate
or other communication given hereunder by either the Authority or the
Borrower to the other shall also be given to the Trustee. The Authority,
the Borrower, the Remarketing Agent, the Paying Agent and the Trustee may,
by notice given hereunder, designate any further or different addresses to
which subsequent notices, certificates or other communications shall be
sent.
Section 9.6. Prior Agreements Superseded. This Agreement, together
with all agreements executed by the parties concurrently herewith or in
conjunction with the sale of the Bonds, shall completely and fully
supersede all other prior understandings or agreements, both written and
oral, between the Authority and the Borrower relating to the lending of
money and the Project, including those contained in any commitment letter
executed in anticipation of the issuance of the Bonds.
Section 9.7. Execution of Counterparts. This Agreement may be
executed simultaneously in several counterparts each of which shall be an
original and all of which shall constitute but one and the same instrument.
Section 9.8. Time. All references to times of day in this Agreement
are references to New York City time.
IN WITNESS WHEREOF, the Authority has caused this Agreement to be
executed in its corporate name by a duly Authorized Representative, and the
Borrower has caused this Agreement to be executed in its corporate name by
its duly authorized officer all as of the date first above written.
Connecticut Development Authority
By /s/ Stanley R. Killinger
Name: Stanley R. Killinger
Authorized Representative
Western Massachusetts
Electric Company
By /s/ Bruce F. Garelick
Name: Bruce F. Garelick
Title: Assistant Treasure
APPENDIX B
Description of Project Equipment and Project Realty
Exhibit 4.4.14
LETTER OF CREDIT
AND REIMBURSEMENT AGREEMENT
Dated as of September 1, 1993
Among
WESTERN MASSACHUSETTS
ELECTRIC COMPANY
as Account Party
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH
as Issuing Bank and as Agent
and
THE PARTICIPATING BANKS
REFERRED TO HEREIN
Relating to
Connecticut Development Authority
$53,800,000 Pollution Control Revenue Refunding Bonds
(Western Massachusetts Electric Company Project - 1993A Series)
TABLE OF CONTENTS
Section Page
PRELIMINARY STATEMENT
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01 Certain Defined Terms . . . . . . . . . . 2
1.02 Computation of Time Periods . . . . . . . 13
1.03 Accounting Terms. . . . . . . . . . . . . 14
1.04 Computations of Outstandings. . . . . . . 14
ARTICLE II
THE LETTER OF CREDIT
2.01 The Letter of Credit. . . . . . . . . . . 14
2.02 Termination of the Commitments. . . . . . 14
2.03 Commissions and Fees . . . . . . . . . . 14
2.04 Reinstatement of the Letter of Credit . . 15
2.05 Extension of the Stated Termination Date. 16
ARTICLE III
REIMBURSEMENT AND ADVANCES
3.01 Reimbursement on Demand . . . . . . . . . 17
3.02 Advances . . . . . . . . . . . . . . . . 17
3.03 Interest on Advances. . . . . . . . . . . 18
3.04 Prepayment of Advances. . . . . . . . . . 19
3.05 Participation; Reimbursement of Issuing
Bank. . . . . . . . . . . . . . . . . 19
ARTICLE IV
PAYMENTS
4.01 Payments and Computations . . . . . . . . 22
4.02 Default Interest. . . . . . . . . . . . . 24
4.03 Yield Protection. . . . . . . . . . . . . 24
4.04 Sharing of Payments, Etc. . . . . . . . . 26
4.05 Taxes . . . . . . . . . . . . . . . . . . 27
4.06 Obligations Absolute. . . . . . . . . . . 29
4.07 Evidence of Indebtedness . . . . . . . . 30
ARTICLE V
CONDITIONS PRECEDENT
5.01 Conditions Precedent to the Issuance of
the Letter of Credit . . . . . . . . . . 30
5.02 Additional Conditions Precedent to the
Issuance the Letter of Credit . . . . . . 34
5.03 Conditions Precedent to Initial Advances. 34
5.04 Conditions Precedent to Term Advances . . 35
5.05 Reliance on Certificates. . . . . . . . . 36
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.01 Representations and Warranties of the
Account Party . . . . . . . . . . . . . . 36
ARTICLE VII
COVENANTS OF THE ACCOUNT PARTY
7.01 Affirmative Covenants . . . . . . . . . . 40
7.02 Negative Covenants. . . . . . . . . . . . 43
7.03 Reporting Obligations . . . . . . . . . . 48
ARTICLE VIII
DEFAULTS
8.01 Events of Default . . . . . . . . . . . . 51
8.02 Remedies Upon Events of Default . . . . . 54
ARTICLE IX
THE AGENT, THE PARTICIPATING BANKS
AND THE ISSUING BANK
9.01 Authorization of Agent; Actions of Agent
and Issuing Bank . . . . . . . . . . . . 55
9.02 Reliance, Etc.. . . . . . . . . . . . . . 55
9.03 The Agent, the Issuing Bank and Affiliates 56
9.04 Participating Bank Credit Decision. . . . 56
9.05 Indemnification . . . . . . . . . . . . . 57
9.06 Successor Agent . . . . . . . . . . . . . 57
9.07 Issuing Bank. . . . . . . . . . . . . . . 58
ARTICLE X
MISCELLANEOUS
10.01 Amendments, Etc.. . . . . . . . . . . . . 58
10.02 Notices, Etc. . . . . . . . . . . . . . . 59
10.03 No Waiver of Remedies . . . . . . . . . . 60
10.04 Costs, Expenses and Indemnification . . . 60
10.05 Right of Set-Off. . . . . . . . . . . . . 62
10.06 Binding Effect; Assignments and
Participants . . . . . . . . . . . . . 63
10.07 Relation of the Parties; No Beneficiary . 64
10.08 Issuing Bank Not Liable . . . . . . . . . 65
10.09 Confidentiality . . . . . . . . . . . . . 65
10.10 Waiver of Jury Trial. . . . . . . . . . . 66
10.11 Governing Law . . . . . . . . . . . . . . 66
10.12 Execution in Counterparts . . . . . . . . 67
SCHEDULES
Schedule I - Applicable Lending Offices
Schedule II - Pending Actions
EXHIBITS
Exhibit 1.01A - Form of Letter of Credit
Exhibit 1.01B - Form of Participation Assignment
Exhibit 1.01C - Form of Pledge Amendment
Exhibit 5.01A - Form of Opinion of Day, Berry & Howard,
counsel to the Account Party
Exhibit 5.01B - Form of Opinion of King & Spalding,
special New York counsel to the Agent and the Issuing
Bank
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
Dated as of September 1, 1993
THIS LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT (this Agreement )
is made by and among:
(i) WESTERN MASSACHUSETTS ELECTRIC COMPANY, a corporation duly
organized and validly existing under the laws of the Commonwealth of
Massachusetts (the Account Party );
(ii) UNION BANK OF SWITZERLAND, NEW YORK BRANCH ( UBS ), as issuer
of the Letter of Credit (the Issuing Bank );
(iii) The Participating Banks (as hereinafter defined) from time
to time party hereto; and
(iv) UBS as agent (together with any successor agent hereunder,
the Agent) for such Participating Banks and the Issuing Bank.
PRELIMINARY STATEMENT
The Connecticut Development Authority (the Issuer) proposes to
issue, pursuant to an Indenture of Trust, dated as of September 1, 1993 (as
supplemented or amended from time to time with the written consent of the
Issuing Bank, the Indenture ), made to Shawmut Bank Connecticut, National
Association, as trustee (such entity, or its successor as trustee, being
the Trustee ), $53,800,000 aggregate principal amount of its Pollution
Control Revenue Refunding Bonds (Western Massachusetts Electric Company
Project - 1993A Series) (the Bonds ). Pursuant to the Indenture and the
Loan Agreement, dated as of September 1, 1993, between the Issuer and the
Account Party (the Loan Agreement ), the Account Party has requested the
Issuing Bank to issue its irrevocable letter of credit in favor of the
Paying Agent (as defined below), in substantially the form of Exhibit 1.01A
hereto (such letter of credit, as it may from time to time be extended or
modified pursuant to the terms of this Agreement, being the Letter of
Credit ), in the amount of $54,596,000 (the Stated Amount ), of which (i)
$53,800,000 shall support the payment of principal of the Bonds (or the
portion of the purchase or redemption price of the Bonds corresponding to
principal), (ii) $796,000 shall support the payment of up to 45 days'
interest on the principal amount of the Bonds (or the portion of the
purchase or redemption price of the Bonds corresponding to interest),
computed at a maximum interest rate of 12% per annum on the basis of the
actual days elapsed and a year of 365 or 366 days (as applicable) and (iii)
$0.00 shall support the payment of premium on the Bonds. The Issuing Bank
has agreed to issue the Letter of Credit subject to the terms and
conditions set forth herein (including the terms and conditions relating to
the rights and obligations of the Participating Banks).
NOW, THEREFORE, in consideration of the premises and in order to
induce the Issuing Bank to issue the Letter of Credit and the Participating
Banks to participate in the Letter of Credit and make advances hereunder,
the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. In addition to the terms
defined in the Preliminary Statement hereto, as used in this Agreement, the
following terms shall have the following meanings (such meanings to be
applicable to the singular and plural forms of the terms defined):
Advances means Initial Advances and Term Advances, without
differentiation; individually, an Advance.
Affiliate means, with respect to any Person, any other
Person directly or indirectly controlling (including, but not limited to
all directors and officers of such Person), controlled by, or under direct
or indirect common control with such Person. A Person shall be deemed to
control another entity if such Person possesses, directly or indirectly,
the power to direct or cause the direction of the management and policies
of such entity, whether through the ownership of voting securities, by
contract or otherwise.
Alternate Base Rate means a fluctuating interest rate per
annum equal at all times to the highest from time to time of:
(a) the rate of interest announced publicly by UBS in New
York, New York, from time to time, as UBS's prime rate; and
(b) 1/2 of one percent per annum above the Federal Funds
Rate from time to time.
Each change in the Alternate Base Rate shall take effect
concurrently with any change in such prime rate or Federal Funds Rate, as
the case may be.
Applicable Commission means, for any period, the percentage
set forth below corresponding to the ratings then assigned by Moody's and
S&P to the Account Party's first mortgage bonds (or other senior secured
debt) not supported by letters of credit or other credit enhancement
facilities, the Applicable Commission to change as when such ratings
change; in the event of a split rating, the lower rating shall govern:
Moody's S&P Applicable Commission
A3 or Higher A- or Higher 0.35%
Baa1 and Baa2 BBB+ and BBB 0.40%
Baa3 BBB- 0.55%
Ba1 or Below BB+ or Below 0.70%
Applicable Lending Office means, with respect to each
Participating Bank, such Participating Bank's Domestic Lending Office as
specified opposite such Participating Bank's name on Schedule I hereto (in
the case of a Participating Bank initially party to this Agreement) or in
the Participation Assignment pursuant to which such Participating Bank
became a Participating Bank (in the case of any other Participating Bank),
or such other office or affiliate of such Participating Bank as such
Participating Bank may from time to time specify to the Account Party and
the Agent.
Available Amount in effect at any time means the maximum
aggregate amount available to be drawn at such time under the Letter of
Credit, the determination of such maximum amount to assume compliance with
all conditions for drawing and no reduction for (i) any amount drawn by the
Paying Agent to make a regularly scheduled payment of interest on the Bonds
(unless such amount will not be reinstated under the Letter of Credit) or
(ii) any amount not available to be drawn because Bonds are held by or for
the account of the Account Party and/or in pledge for the benefit of the
Issuing Bank.
Bonds has the meaning assigned to that term in the
Preliminary Statement.
Business Day means a day of the year that is not a Saturday
or Sunday or a day on which banks are authorized to close in New York City
and, if the applicable Business Day relates to any action to be taken by,
or notice furnished to or by, or payment to be made to or by, the Trustee,
the Paying Agent or the Remarketing Agent, is a day on which (A) banks
located in Hartford, Connecticut and New York, New York are not required or
authorized to remain closed, (B) banking institutions in all of the cities
in which the principal offices of the Issuing Bank, the Trustee, the Paying
Agent and, if applicable, the Remarketing Agent are located are not
required or authorized to remain closed and (C) the New York Stock
Exchange, Inc. is not closed.
Closing Date means the Business Day upon which each of the
conditions precedent enumerated in Sections 5.01 and 5.02 hereof shall be
fulfilled to the satisfaction of the Agent, the Issuing Bank, the
Participating Banks and the Account Party. All transactions contemplated
to occur on the Closing Date shall occur contemporaneously on or prior to
November 15, 1993, at the offices of King & Spalding, 120 West 45th Street,
New York, New York 10036, at 10:00 A.M. (New York City time), or at such
other place and time as the parties hereto may mutually agree.
Collateral means all of the collateral in which liens,
mortgages or security interests are purported to be granted by any or all
of the Security Documents.
Commitment means, for each Participating Bank, such
Participating Bank's Participation Percentage of the Available Amount.
Commitments shall refer to the aggregate of the Commitments.
Confidential Information has the meaning assigned to that
term in Section 10.09 hereof.
Consolidated Capitalization means, for any period, the
aggregate of all amounts that would, in accordance with generally accepted
accounting principles and consistent with those applied in the preparation
of the Account Party's consolidated financial statements included in its
Annual Report on Form 10-K for the year ended December 31, 1992, appear on
the Account Party's consolidated balance sheet as the sum of (i) the total
principal amount of all long-term Debt of the Account Party and its
Subsidiaries (excluding, however, Debt not to exceed $400,000,000 existing
under any nuclear fuel financing so long as the proceeds of such Debt are
used solely to finance the purchase and carrying of nuclear fuel and so
long as the appropriate regulatory authorities have not taken any action
which would not allow the costs with respect to such financing to be
recovered through the rate making process), (ii) the aggregate of the par
value of, or stated capital represented by, the outstanding shares of all
classes of common and preferred shares of the Account Party and its
Subsidiaries, (iii) the consolidated surplus of the Account Party and its
Subsidiaries, paid-in, earned and other, if any, and (iv) the excess, if
any, of (A) the aggregate unpaid principal amount of all short-term Debt of
the Account Party and its Subsidiaries over (B) 10% of the sum of clauses
(i), (ii) and (iii) above.
Consolidated Common Equity means, for any period, an amount
equal to the sum of the aggregate of the par value of, or stated capital
represented by, the outstanding common shares of the Account Party and its
Subsidiaries and the surplus, paid-in, earned and other, if any, of the
Account Party and its Subsidiaries as determined on a consolidated basis in
accordance with generally accepted accounting principles.
Credit Termination Date means the date on which the Letter
of Credit shall terminate in accordance with its terms.
Debt means, for any Person, without duplication, (i)
indebtedness of such Person for borrowed money, including but not limited
to obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments, (ii) obligations of such Person to pay the
deferred purchase price of property or services (excluding any obligation
of such Person to the United States Department of Energy or its successor
with respect to disposition of spent nuclear fuel burned prior to April 3,
1983), (iii) obligations of such Person as lessee under leases which shall
have been or should be, in accordance with generally accepted accounting
principles, recorded as capital leases, (iv) obligations under direct or
indirect guaranties in respect of, and obligations (contingent or
otherwise) to purchase or otherwise acquire, or otherwise to assure a
creditor against loss in respect of, indebtedness or obligations of others
of the kinds referred to in clauses (i) through (iii), above, and (v)
liabilities in respect of unfunded vested benefits under ERISA Plans.
Default Rate means a fluctuating interest rate equal at all
times to two percent (2.00%) per annum above the Alternate Base Rate in
effect from time to time.
ERISA means the Employee Retirement Income Security Act of
1974, as amended from time to time.
ERISA Affiliate means, with respect to any Person, any
trade or business (whether or not incorporated) which is a commonly
controlled entity of the Account Party within the meaning of the
regulations under Section 414 of the Internal Revenue Code of 1986, as
amended from time to time.
ERISA Multiemployer Plan means a multiemployer plan
subject to Title IV of ERISA.
ERISA Plan means an employee benefit plan (other than an
ERISA Multiemployer Plan) maintained for employees of the Account Party or
any ERISA Affiliate and covered by Title IV of ERISA.
ERISA Plan Termination Event means (i) a Reportable Event
described in Section 4043 of ERISA and the regulations issued thereunder
(other than a Reportable Event not subject to the provision for 30-day
notice to the PBGC under such regulations) with respect to an ERISA Plan or
an ERISA Multiemployer Plan, or (ii) the withdrawal of the Account Party or
any of its ERISA Affiliates from an ERISA Plan or an ERISA Multiemployer
Plan during a plan year in which it was a substantial employer as defined
in Section 4001(a)(2) of ERISA, or (iii) the filing of a notice of intent
to terminate an ERISA Plan or an ERISA Multiemployer Plan or the treatment
of an ERISA Plan or an ERISA Multiemployer Plan under Section 4041 of
ERISA, or (iv) the institution of proceedings to terminate an ERISA Plan or
an ERISA Multiemployer Plan by the PBGC, or (v) any other event or
condition which might constitute grounds under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer, any
ERISA Plan or ERISA Multiemployer Plan.
Event of Default has the meaning assigned to that term in
Section 8.01.
Federal Funds Rate means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank
of New York, or, if such rate is not so published on the next succeeding
Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
FERC means the Federal Energy Regulatory Commission.
Governmental Approval means any authorization, consent,
approval, license, permit, certificate, exemption of, or filing or
registration with, any governmental authority or other legal or regulatory
body (including, without limitation, the Securities and Exchange
Commission, the FERC, the Nuclear Regulatory Commission, the Massachusetts
Department of Public Utilities and the Connecticut Department of Public
Utility Control), required in connection with either (i) the execution,
delivery or performance of any Loan Document or Related Document or the
grant and perfection of any lien or security interest contemplated by the
Security Documents or (ii) the nature of the Account Party's or any
Principal Subsidiary's business as conducted or the nature of the property
owned or leased by it.
Hazardous Substance means any waste, substance or material
identified as hazardous, dangerous or toxic by any office, agency,
department, commission, board, bureau or instrumentality of the United
States of America or of the State or locality in which the same is located
having or exercising jurisdiction over such waste, substance or material.
Indemnified Person has the meaning assigned to that term in
Section 10.04(b) hereof.
Indenture has the meaning assigned to that term in the
Preliminary Statement.
Indenture Documents means, collectively, the Indenture and
the Loan Agreement, together with all amendments, modifications and
supplements thereto; individually, an Indenture Document .
Initial Advance has the meaning assigned to that term in
Section 3.02(a) hereof.
Initial Repayment Date has the meaning assigned to that
term in Section 3.02(a) hereof.
Interest Component has the meaning assigned to that term in
the Letter of Credit.
Interest Drawing has the meaning assigned to that term in
the Letter of Credit.
Issuer has the meaning assigned to that term in the
Preliminary Statement.
Issuer Resolution means the resolution adopted by the
Issuer that authorized the issuance of the Bonds, approved the terms and
provisions of the Bonds, and approved those of the documents related to the
Bonds to which the Issuer is a party.
Letter of Credit has the meaning assigned to that term in
the Preliminary Statement.
Lien has the meaning assigned to that term in Section
7.02(a) hereof.
Loan Agreement has the meaning assigned to that term in the
Preliminary Statement.
Loan Documents means this Agreement and the Security
Documents.
Majority Lenders means on any date of determination, (i)
the Issuing Bank and (ii) Participating Banks who, collectively, on such
date, have Participation Percentages in the aggregate of at least 66-2/3%.
Determination of those Participating Banks satisfying the criteria
specified above for action by the Majority Lenders shall be made by the
Agent and shall be conclusive and binding on all parties absent manifest
error.
Moody's means Moody's Investors Service, Inc. or any
successor thereto.
NU means Northeast Utilities, an unincorporated voluntary
business association organized under the laws of the Commonwealth of
Massachusetts.
Participant shall have the meaning assigned to that term in
Section 10.06(b) hereof.
Participating Banks means the Persons listed on the
signature pages hereof following the heading Participating Banks and any
other Person who becomes a party hereto pursuant to Section 10.06 hereof.
Participation Assignment means a participation assignment
entered into pursuant to Section 10.06 hereof by any Participating Bank and
an assignee, in substantially the form of Exhibit 1.01B hereto.
Participation Percentage means, as of any date of
determination (i) with respect to a Participating Bank initially a party
hereto, the percentage set forth opposite such Participating Bank's name on
the signature pages hereof, except as provided in clause (iii), below, (ii)
with respect to a Participating Bank that became a party hereto by
operation of Section 10.06(a) hereof, the Participation Percentage stated
to be assumed by such assignee Participating Bank in the relevant
Participation Assignment, except as provided in clause (iii), below, and
(iii) with respect to any Participating Bank described in clauses (i) and
(ii), above, that assigns a percentage of its interests in accordance with
Section 10.06(a) hereof, its Participation Percentage as reduced by the
percentage so assigned.
Paying Agent means (i) Shawmut Bank Connecticut, National
Association, as the initial paying agent for the Bonds under the Indenture
Documents, and (ii) any successor paying agent for the Bonds under the
Indenture Documents.
PBGC means the Pension Benefit Guaranty Corporation (or any
successor entity) established under ERISA.
Person means an individual, partnership, corporation
(including a business trust), joint stock company, trust, estate,
unincorporated association, joint venture or other entity, or a government
or any political subdivision or agency thereof.
Pledge Agreement means the Pledge Agreement, dated as of
September 1, 1993, by the Account Party in favor of the Issuing Bank for
the benefit of the Agent and the Participating Banks, in substantially the
form of Exhibit 1.01C hereto, and as the same may from time to time be
amended, modified or supplemented.
Pledged Bonds shall have the meaning assigned to that term
in the Pledge Agreement.
Premium Component has the meaning assigned to that term in
the Letter of Credit.
Principal Component has the meaning assigned to that term
in the Letter of Credit.
Principal Subsidiary means a Subsidiary, whether owned
directly or indirectly by the Account Party, which, with respect to the
Account Party and its Subsidiaries taken as a whole, represents a material
portion of the Account Party's consolidated assets or consolidated net
income (or loss), (it being understood that, as of the date of this
Agreement, the Account Party has no Principal Subsidiaries).
Purchase Contract means the Bond Purchase Agreement, dated
September 21, 1993, among the Issuer, the Account Party and Goldman, Sachs
& Co., Individually and as Representative of Advest, Inc., Greenwich
Partners, Inc. and U.S. Securities, Inc.
Recipient has the meaning assigned to that term in Section
10.09 hereto.
Regulatory Transaction means any merger or consolidation of
the Account Party with or into, or any purchase or acquisition by the
Account Party of the assets of (and any related assumption by the Account
Party of the liabilities of) any utility company or utility-related
company, if such transaction is undertaken pursuant to an order or request
of, or otherwise in fulfillment of the stated goals of, a utility
regulatory agency having jurisdiction over NU or any of its Subsidiaries.
Regulatory Transaction Entity means any utility company or
utility-related company (other than the Account Party) that is the subject
of a Regulatory Transaction.
Related Documents means the Letter of Credit, the Bonds,
the Indenture Documents, any Remarketing Agreement and the Purchase
Contract.
Remarketing Agent has the meaning assigned to that term in
the Indenture Documents.
Remarketing Agreement means (i) the Remarketing Agreement,
dated as of September 1, 1993, among the Issuer, the Account Party and
Goldman, Sachs & Co., as the same may be amended from time to time; and
(ii) any successor remarketing agreement between the Account Party and a
successor Remarketing Agent as shall be in effect from time to time in
accordance with the terms of the Indenture Documents.
S&P means Standard and Poor's Corporation or any successor
thereto.
Second Mortgage means the Open End Mortgage and Trust
Agreement made as of October 1, 1986, by and between the Account Party and
Bank of Boston Connecticut, as trustee, as amended through the date hereof
to secure the obligations of the Account Party hereunder and as the same
may be further amended, modified or supplemented from time to time.
Security Documents means the Pledge Agreement and the
Indenture Documents, but shall not include the Second Mortgage.
Stated Amount has the meaning assigned to that term in the
Preliminary Statement hereto.
Stated Termination Date means the expiration date specified
in clause (i) of the first paragraph of Paragraph (1) of the Letter of
Credit, as such date may be extended pursuant to Section 2.05 hereof.
Subsidiary shall mean, with respect to any Person (the
Parent ), any corporation, association or other business entity of which
securities or other ownership interests representing 50% or more of the
ordinary voting power are, at the time as of which any determination is
being made, owned or controlled by the Parent or one or more Subsidiaries
of the Parent or by the Parent and one or more Subsidiaries of the Parent.
Tender Drawing has the meaning assigned to that term in the
Letter of Credit.
Term Advance has the meaning assigned to that term in
Section 3.02(b) hereof.
Term Borrowing means a borrowing consisting of Term
Advances made on the same day by the Participating Banks, ratably in
accordance with their respective Participation Percentages.
Termination Date means the Credit Termination Date or the
earlier date of termination of the Commitments pursuant to Sections 2.02 or
8.02 hereunder.
Trustee has the meaning assigned to that term in the
Preliminary Statement hereto.
Unmatured Default means the occurrence and continuance of
an event which, with the giving of notice or lapse of time or both, would
constitute an Event of Default.
WMECO Indenture has the meaning assigned to that term in
Section 7.02(a)(i) hereof.
SECTION 1.02. Computation of Time Periods. In the computation of
periods of time under this Agreement any period of a specified number of
days or months shall be computed by including the first day or month
occurring during such period and excluding the last such day or month. In
the case of a period of time from a specified date to or until a
later specified date, the word from means from and including and the
words to and until each means to but excluding .
SECTION 1.03. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles applied on a basis consistent with the
application employed in the preparation of the Account Party's consolidated
financial statements included in its Annual Report on Form 10-K for the
year ended December 31, 1992.
SECTION 1.04. Computations of Outstandings. Whenever reference is
made in this Agreement to the principal amount outstanding on any date
under this Agreement, such reference shall refer to the sum of (i) the
Available Amount on such date, (ii) the aggregate principal amount of all
Advances outstanding on such date and (iii) the aggregate amount of all
demand loans under Section 3.01 hereunder on such date, in each case after
giving effect to all transactions to be made on such date and the
application of the proceeds thereof.
ARTICLE II
THE LETTER OF CREDIT
SECTION 2.01. The Letter of Credit. The Issuing Bank agrees, on the
terms and conditions hereinafter set forth (including, without limitation,
the applicable conditions precedent set forth in Article V hereof), to
issue the Letter of Credit to the Paying Agent, upon not less than three
Business Days prior notice from the Account Party, on the Closing Date.
SECTION 2.02. Termination of the Commitments. The obligation of
the Issuing Bank to issue the Letter of Credit shall automatically
terminate if not issued on or before 5:00 P.M. (New York City time) on
November 15, 1993.
SECTION 2.03. Commissions and Fees. (a) The Account Party hereby
agrees to pay to the Agent, for the account of the Participating Banks
ratably in accordance with their respective Participation Percentages, a
letter of credit commission on the Available Amount in effect from time to
time from the date of issuance of the Letter of Credit until the
Termination Date (disregarding for such purpose any temporary diminution
thereof arising from drawings under the Letter of Credit to pay interest
(or purchase price corresponding to interest) on the Bonds, regardless of
whether the amount so drawn shall be thereafter reinstated), at a rate per
annum equal to the Applicable Commission, payable quarterly in arrears on
the first day of March, June, September and December in each year,
commencing on the first such date to occur following the date of issuance
of the Letter of Credit, and on the Credit Termination Date.
(b) The Account Party also agrees to pay to the Agent, for the
account of the Agent and the Issuing Bank, such other fees as may be agreed
upon from time to time by the Account Party and the Agent and the Issuing
Bank.
SECTION 2.04. Reinstatement of the Letter of Credit. (a) The
Interest Component and the Principal Component shall, from time to time, be
reinstated by the Issuing Bank in accordance with, and only to the extent
provided in, the Letter of Credit. In no event shall reductions in the
Premium Component be reinstated.
(b) Interest Component. With respect to reinstatement of reductions
in the Interest Component resulting from Interest Drawings:
(i) The Issuing Bank may only deliver to the Paying Agent any
notice of non-reinstatement pursuant to Paragraph 5(i)(A) of the Letter of
Credit if (A) the Issuing Bank and/or the Participating Banks have not been
reimbursed in full by the Account Party for one or more drawings, together
with interest, if any, owing thereon pursuant to this Agreement, or (B) an
Event of Default has occurred and is then continuing.
(ii) If, subsequent to any such delivery of a notice of non-
reinstatement, the circumstances giving rise to the delivery of such notice
of non-reinstatement shall have ceased to exist (whether as a result of
reimbursement of unreimbursed drawings, or waiver or cure of an Event of
Default, or otherwise), then, provided that no other Event of Default shall
have occurred and be continuing, the Issuing Bank shall deliver to the
Paying Agent, by hand delivery or facsimile transmission, a Notice of
Reinstatement in the form of Exhibit 5 to the Letter of Credit reinstating
that portion of the Interest Component in respect of which such notice of
non-reinstatement was given.
(c) Principal Component. With respect to reinstatement of a
reduction in the Principal Component resulting from any Tender Drawing, IF:
(i) such reduction has not been reinstated pursuant to
Paragraph 5(ii)(A) of the Letter of Credit;
(ii) the Issuing Bank and/or the Participating Banks shall
have been reimbursed by the Account Party for such Tender Drawing;
(iii) any demand loan(s) and Advance(s) made in respect of
such Tender Drawing shall have been repaid by the Account Party, together
with any interest thereon and any other amounts payable hereunder in
connection therewith; AND
(iv) no Event of Default shall have occurred and then be
continuing;
THEN, the Issuing Bank shall deliver to the Paying Agent, by hand delivery
or facsimile transmission, a Notice of Reinstatement in the form of Exhibit
5 to the Letter of Credit reinstating the Principal Component to the extent
of such Tender Drawing.
SECTION 2.05. Extension of the Stated Termination Date. Unless the
Letter of Credit shall have previously expired in accordance with its
terms, at least 60 days but not more than 90 days before each anniversary
date of this Agreement, the Account Party may, by notice to the Agent (any
such notice being irrevocable), request the Issuing Bank and the
Participating Banks to extend the Stated Termination Date of the Letter of
Credit for a period of one year. If the Account Party shall make such
request, the Agent shall promptly inform the Issuing Bank and all of the
Participating Banks and, no later than 15 days prior to such anniversary
date, the Agent shall notify the Account Party in writing (with a copy of
such notice to the Trustee and the Paying Agent) if the Issuing Bank and
the Participating Banks consent to such request and the conditions of such
consent (including conditions relating to legal documentation). If such
consent is granted, the Stated Termination Date as theretofore in effect
shall be extended for one year, such extension to take effect on such
anniversary date. The granting of any such consent shall be in the sole
and absolute discretion of the Issuing Bank and all of the Participating
Banks, and if the Agent shall not so notify the Account Party, such lack of
notification shall be deemed to be a determination not to consent to such
request.
ARTICLE III
REIMBURSEMENT AND ADVANCES
SECTION 3.01. Reimbursement on Demand. Subject to the provisions of
Section 3.02 hereof, the Account Party hereby agrees to pay (whether with
the proceeds of Initial Advances made pursuant to this Agreement or
otherwise) to the Issuing Bank on demand (a) on and after each date on
which the Issuing Bank shall pay any amount under the Letter of Credit
pursuant to any draft, but only after so paid by the Issuing Bank, a sum
equal to such amount so paid (which sum shall constitute a demand loan from
the Issuing Bank to the Account Party from the date of such payment by the
Issuing Bank until so paid by the Account Party), plus (b) interest on any
amount remaining unpaid by the Account Party to the Issuing Bank under
clause (a), above, from the date such amount becomes payable on demand
until payment in full, at the Default Rate in effect from time to time. No
reinstatement of the Interest Component or the Principal Component despite
the failure by the Account Party to reimburse the Issuing Bank for any
previous drawing to pay interest on the Bonds shall limit or impair the
Account Party's obligations under this Section 3.01.
SECTION 3.02. Advances. Each Participating Bank agrees to make
Initial Advances and Term Advances for the account of the Account Party
from time to time upon the terms and subject to the conditions set forth in
this Agreement.
(a) Initial Advances; Repayment of Initial Advances. If the
Issuing Bank shall honor any Tender Drawing and if the conditions precedent
set forth in Section 5.03 of this Agreement have been satisfied as of the
date of such honor, then, each Participating Bank's payment made to the
Issuing Bank pursuant to Section 3.05 hereof in respect of such Tender
Drawing shall be deemed to constitute an advance made for the account of
the Account Party by such Participating Bank (each such advance being an
Initial Advance made by such Participating Bank). Subject to Article VIII
of this Agreement, each Initial Advance and all interest thereon shall be
due and payable on the earlier to occur of (i) the date 30 days from the
date of such Initial Advance (such repayment date being the Initial
Repayment Date for such Initial Advance) and (ii) the Termination Date.
The Account Party may repay the principal amount of any Initial Advance
with (and to the extent of) the proceeds of a Term Advance made pursuant to
subsection (b), below, and may prepay Initial Advances in accordance with
Section 3.04 hereof.
(b) Term Advances; Repayment. Subject to the satisfaction of the
conditions precedent set forth in Section 5.04 hereof and the other
conditions of this subsection (b), each Participating Bank agrees to make
one or more advances for the account of the Account Party ( Term Advances )
on each Initial Repayment Date in an aggregate principal amount equal to
the amount of such Participating Bank's Initial Advances maturing on such
Initial Repayment Date. All Term Advances comprising a single Term
Borrowing shall be made upon written notice given by the Account Party to
the Agent not later than 11:00 A.M. (New York City time) on the Business
Day of such proposed Term Borrowing. The Agent shall notify each
Participating Bank of the contents of such notice promptly after receipt
thereof. Each such notice shall specify therein the date on which such
Term Borrowing is to be made and the principal amount of Term Advances
comprising such Term Borrowing. The proceeds of each Participating Bank's
Term Advances shall be applied solely to the repayment of the Initial
Advances made by such Participating Bank and shall in no event be made
available to the Account Party. The principal amount of each Term Advance,
together with all accrued and unpaid interest thereon, shall be due and
payable on the earlier to occur of (x) the same calendar date occurring 35
months following the date upon which such Term Advance is made (or, if such
month does not have a corresponding date, on the last day of such month)
and (y) the Termination Date.
SECTION 3.03. Interest on Advances. The Account Party shall pay
interest on the unpaid principal amount of each Advance from the date of
such Advance until such principal amount is paid in full at a fluctuating
interest rate per annum equal to the Alternate Base Rate in effect from
time to time. The Account Party shall pay interest on each Advance
quarterly in arrears on the first day of March, June, September and
December in each year and on the Termination Date or the earlier date for
repayment of such Advance (including the Initial Repayment Date therefor,
in the case of an Initial Advance).
SECTION 3.04. Prepayment of Advances. (a) The Account Party shall
have no right to prepay any principal amount of any Advances except in
accordance with subsections (b) and (c) below.
(b) The Account Party may, upon at least one Business Day's notice
to the Agent stating the proposed date and aggregate principal amount of
the prepayment and the specific Initial Advances or Term Borrowing(s) to be
prepaid, and if such notice is given, the Account Party shall, prepay, in
whole or ratably in part, together with accrued interest to the date of
such prepayment on the principal amount prepaid, the outstanding principal
amount of (i) all Initial Advances made on the same date or (ii) all Term
Advances comprising the same Term Borrowing, in each case as the Account
Party shall designate in such notice; provided, however, that each partial
prepayment shall be in an aggregate principal amount not less than
$10,000,000, or, if less, the aggregate principal amount of all Advances
then outstanding.
(c) Prior to or simultaneously with the resale of all of the Bonds
purchased with the proceeds of a Tender Drawing, the Account Party shall
prepay, or cause to be prepaid, in full, the then outstanding principal
amount of all Initial Advances and of all Term Advances comprising the same
Term Borrowing(s) arising pursuant to such Tender Drawing, together with
all interest thereon to the date of such prepayment. If less than all of
such Bonds are resold, then prior to or simultaneously with such resale the
Account Party shall prepay or cause to be prepaid that portion of such
Advances, together with all interest thereon to the date of such
prepayment, equal to the then outstanding principal amount thereof
multiplied by a fraction, the numerator of which shall be the principal
amount of the Bonds resold and the denominator of which shall be the
principal amount of all of the Bonds purchased with the proceeds of the
relevant Tender Drawing.
SECTION 3.05. Participation; Reimbursement of Issuing Bank. (a)
The Issuing Bank hereby sells and transfers to each Participating Bank, and
each Participating Bank hereby acquires from the Issuing Bank, an undivided
interest and participation to the extent of such Participating Bank's
Participation Percentage in and to (i) the Letter of Credit, including the
obligations of the Issuing Bank under and in respect thereof and the
Account Party's reimbursement and other obligations in respect thereof and
(ii) each demand loan or deemed demand loan made by the Issuing Bank,
whether now existing or hereafter arising.
(b) If the Issuing Bank (i) shall not have been reimbursed in full
for any payment made by the Issuing Bank under the Letter of Credit on the
date of such payment or (ii) shall make any demand loan to the Account
Party, the Issuing Bank shall promptly notify the Agent and the Agent shall
promptly notify each Participating Bank of such non-reimbursement or demand
loan and the amount thereof. Upon receipt of such notice from the Agent,
each Participating Bank shall pay to the Issuing Bank, directly, an amount
equal to such Participating Bank's ratable portion (according to such
Participating Bank's Participation Percentage) of such unreimbursed amount
or demand loan paid or made by the Issuing Bank, plus interest on such
amount at a rate per annum equal to the Federal Funds Rate from the date of
such payment by the Issuing Bank to the date of payment to the Issuing Bank
by such Participating Bank. All such payments by each Participating Bank
shall be made in United States dollars and in same day funds:
(x) not later than 2:45 P.M. (New York City time) on the day
such notice is received by such Participating Bank if such notice is
received at or prior to 12:30 P.M. (New York City time) on a Business Day;
or
(y) not later than 12:00 Noon (New York City time) on the
Business Day next succeeding the day such notice is received by such
Participating Bank, if such notice is received after 12:30 P.M. (New York
City time) on a Business Day.
If a Participating Bank shall have paid to the Issuing Bank its ratable
portion of any unreimbursed amount or demand loan paid or made by the
Issuing Bank, together with all interest thereon required by the second
sentence of this subsection (b), such Participating Bank shall be entitled
to receive its ratable share of all interest paid by the Account Party in
respect of such unreimbursed amount or demand loan from the date paid or
made by the Issuing Bank. If such Participating Bank shall have made such
payment to the Issuing Bank, but without all such interest thereon required
by the second sentence of this subsection (b), such Participating Bank
shall be entitled to receive its ratable share of the interest paid by the
Account Party in respect of such unreimbursed amount or demand loan only
from the date it shall have paid all interest required by the second
sentence of this subsection (b).
(c) Each Participating Bank's obligation to make each payment to
the Issuing Bank, and the Issuing Bank's right to receive the same, shall
be absolute and unconditional and shall not be affected by any circumstance
whatsoever, including, without limitation, the foregoing or Section 4.06
hereof, or the occurrence or continuance of an Event of Default, or the
non- satisfaction of any condition precedent set forth in Sections 5.03 or
5.04 hereof, or the failure of any other Participating Bank to make any
payment under this Section 3.05. Each Participating Bank further agrees
that each such payment shall be made without any offset, abatement,
withholding or reduction whatsoever.
(d) The failure of any Participating Bank to make any payment to
the Issuing Bank in accordance with subsection (b) above, shall not relieve
any other Participating Bank of its obligation to make payment, but neither
the Issuing Bank nor any Participating Bank shall be responsible for the
failure of any other Participating Bank to make such payment. If any
Participating Bank shall fail to make any payment to the Issuing Bank in
accordance with subsection (b) above, then such Participating Bank shall
pay to the Issuing Bank forthwith on demand such corresponding amount
together with interest thereon, for each day until the date such amount is
repaid to the Issuing Bank at the Federal Funds Rate. Nothing herein shall
in any way limit, waive or otherwise reduce any claims that any party
hereto may have against any non-performing Participating Bank.
(e) If any Participating Bank shall fail to make any payment to the
Issuing Bank in accordance with subsection (b) above, then, in addition to
other rights and remedies which the Issuing Bank may have, the Agent is
hereby authorized, at the request of the Issuing Bank, to withhold and to
apply to the payment of such amounts owing by such Participating Bank to
the Issuing Bank and any related interest, that portion of any payment
received by the Agent that would otherwise be payable to such Participating
Bank. In furtherance of the foregoing, if any Participating Bank shall
fail to make any payment to the Issuing Bank in accordance with subsection
(b), above, and such failure shall continue for five Business Days
following written notice of such failure from the Issuing Bank to such
Participating Bank, the Issuing Bank may acquire, or transfer to a third
party in exchange for the sum or sums due from such Participating Bank,
such Participating Bank's interest in the related unreimbursed amounts and
demand loans and all other rights of such Participating Bank hereunder in
respect thereof, without, however, relieving such Participating Bank from
any liability for damages, costs and expenses suffered by the Issuing Bank
as a result of such failure. The purchaser of any such interest shall be
deemed to have acquired an interest senior to the interest of such
Participating Bank and shall be entitled to receive all subsequent payments
which the Issuing Bank or the Agent would otherwise have made hereunder to
such Participating Bank in respect of such interest.
ARTICLE IV
PAYMENTS
SECTION 4.01. Payments and Computations. (a) The Account Party
shall make each payment hereunder (i) in the case of reimbursement
obligations pursuant to Section 3.01 hereof (excluding any portion thereof
in respect of which an Initial Advance is to be made), not later than 2:30
P.M. (New York City time) on the day the related drawing under the Letter
of Credit is paid by the Issuing Bank, and (ii) in all other cases, not
later than 12:30 P.M. (New York City time) on the day when due, in each
case in lawful money of the United States of America to the Agent at its
address referred to in Section 10.02 hereof in immediately available funds.
The Agent will promptly thereafter cause to be distributed like funds
relating to the payment of reimbursements, principal, interest, fees or
other amounts payable to the Issuing Bank and the Participating Banks to
whom the same are payable, ratably and without offset or counterclaim
except as provided in Section 3.05, at its address set forth in Section
10.02 hereof (in the case of the Issuing Bank) or for the account of their
respective Applicable Lending Offices (in the case of the Participating
Banks), in each case to be applied in accordance with the terms of this
Agreement.
(b) The Account Party hereby authorizes the Issuing Bank, and each
Participating Bank, if and to the extent payment owed to the Issuing Bank,
or such Participating Bank, as the case may be, is not made when due
hereunder, to charge from time to time against any or all of the Account
Party's accounts with the Issuing Bank or such Participating Bank, as the
case may be, any amount so due.
(c) All computations of interest based on the Alternate Base Rate
when based on UBS's prime rate referred to in the definition of Alternate
Base Rate shall be made by the Agent on the basis of a year of 365 or 366
days, as the case may be. All other computations of interest hereunder
(including computations of interest based on the Federal Funds Rate
(including the Alternate Base Rate if and so long as such Rate is based on
the Federal Funds Rate)), and of all fees, commissions, and other amounts
payable hereunder shall be made by the Agent or the party claiming such
other amounts, as the case may be, on the basis of a year of 360 days. In
each such case, such computation shall be made for the actual number of
days (including the first day, but excluding the last day) occurring in the
period for which such interest, fees, commissions or other amounts are
payable. Each such determination by the Agent or a Participating Bank, as
the case may be, shall be conclusive and binding for all purposes, absent
manifest error.
(d) Whenever any payment hereunder shall be stated to be due on a
day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest, commissions and fees
hereunder.
(e) Unless the Agent shall have received notice from the Account
Party prior to the date on which any payment is due to the Issuing Bank or
the Participating Banks hereunder that the Account Party will not make such
payment in full, the Agent may assume that the Account Party has made such
payment in full to the Agent on such date and the Agent may, in reliance
upon such assumption, cause to be distributed to the Issuing Bank and/or
each Participating Bank on such due date an amount equal to the amount then
due the Issuing Bank and/or such Participating Bank. If and to the extent
the Account Party shall not have so made such payment in full to the Agent,
the Issuing Bank and/or each such Participating Bank shall repay to the
Agent forthwith on demand such amount distributed to the Issuing Bank
and/or such Participating Bank, together with interest thereon, for each
day from the date such amount is distributed to the Issuing Bank and/or
such Participating Bank until the date the Issuing Bank and/or such
Participating Bank repays such amount to the Agent, at the Federal Funds
Rate.
(f) If, after the Agent has paid to the Issuing Bank or any
Participating Bank any amount pursuant to subsection (a) above, such
payment is rescinded or must otherwise be returned or must be paid over by
the Agent or the Issuing Bank to any Person, whether pursuant to any
bankruptcy or insolvency law, Section 4.04 hereof or otherwise, such
Participating Bank shall, at the request of the Agent or the Issuing Bank,
promptly repay to the Agent or the Issuing Bank, as the case may be, an
amount equal to its ratable share of such payment, together with any
interest required to be paid by the Agent or the Issuing Bank with respect
to such payment.
SECTION 4.02. Default Interest. Any amounts payable by the Account
Party hereunder that are not paid when due shall (to the fullest extent
permitted by law) bear interest, from the date when due until paid in full,
at the Default Rate, payable on demand.
SECTION 4.03. Yield Protection. (a) Change in Circumstances.
Notwithstanding any other provision herein, if after the date hereof, the
adoption of or any change in applicable law or regulation or in the
interpretation or administration thereof by any governmental authority
charged with the interpretation or administration thereof (whether or not
having the force of law) (i) shall impose, modify or deem applicable any
reserve, special deposit or similar requirement against letters of credit
(or participatory interests therein) issued by, commitments or assets of,
deposits with or for the account of, or credit extended by, the Issuing
Bank or any Participating Bank, or (ii) shall impose on the Issuing Bank or
such Participating Bank any other condition affecting this Agreement, the
Letter of Credit or participatory interests therein, and the result of any
of the foregoing shall be (A) to increase the cost to the Issuing Bank or
such Participating Bank of issuing, maintaining or participating in this
Agreement or the Letter of Credit or of agreeing to make, making or
maintaining any Advance or (B) to reduce the amount of any sum received or
receivable by the Issuing Bank or such Participating Bank hereunder
(whether of principal, interest or otherwise), then the Account Party will
pay to the Issuing Bank or such Participating Bank, upon demand, such
additional amount or amounts as will compensate the Issuing Bank or such
Participating Bank for such additional costs incurred or reduction
suffered.
(b) Capital. If the Issuing Bank or any Participating Bank shall
have determined that the adoption after the date hereof of any law, rule,
regulation or guideline regarding capital adequacy, or any change therein
or in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by the Issuing Bank
or any Participating Bank (or any Applicable Lending Office of the Issuing
Bank or such Participating Bank), or any holding company of any such
entity, with any request or directive regarding capital adequacy not in
effect on the date hereof (whether or not having the force of law) of any
such authority, central bank or comparable agency, has or would have the
effect (i) of reducing the rate of return on such entity's capital or on
the capital of such entity's holding company, if any, as a consequence of
this Agreement, the Letter of Credit or such entity's participatory
interest therein, any Commitment hereunder or the portion of the Advances
made by such entity pursuant hereto to a level below that which such entity
or such entity's holding company could have achieved, but for such
applicability, adoption, change or compliance (taking into consideration
such entity's policies and the policies of such entity's holding company
with respect to capital adequacy), or (ii) of increasing or otherwise
determining the amount of capital required or expected to be maintained by
such entity or such entity's holding company based upon the existence of
this Agreement, the Letter of Credit or such entity's participatory
interest therein, any Commitment hereunder, the portion of the Advances
made by such entity pursuant hereto and other similar such credits,
participations, commitments, agreements or assets, then from time to time
the Account Party shall pay to the Issuing Bank or such Participating Bank,
upon demand, such additional amount or amounts as will compensate such
entity or such entity's holding company for any such reduction or allocable
capital cost suffered.
(c) Notices. A certificate of the Issuing Bank or any
Participating Bank setting forth such entity's claim for compensation
hereunder and the amount necessary to compensate such entity or its holding
company pursuant to subsection (a) or (b) of this Section 4.03 shall be
submitted to the Account Party and the Issuing Bank and shall be conclusive
and binding for all purposes, absent manifest error. The Account Party
shall pay the Issuing Bank or such Participating Bank directly the amount
shown as due on any such certificate within ten days after its receipt of
the same. The failure of any entity to provide such notice or to make
demand for payment under this Section 4.03 shall not constitute a waiver of
such Participating Bank's rights hereunder; provided, that such entity
shall not be entitled to demand payment pursuant to subsections (a) or (b)
of this Section 4.03 in respect of any loss, cost, expense, reduction or
reserve if such demand is made more than one year following the later of
such entity's incurrence or sufferance thereof or such entity's actual
knowledge of the event giving rise to such entity's rights pursuant to such
subsections. The protections of this Section 4.03 shall be available to
the Issuing Bank and each Participating Bank regardless of any possible
contention of the invalidity or inapplicability of the law, rule,
regulation, guideline or other change or condition which shall have
occurred or been imposed and shall survive the Termination Date and the
payment of all other amounts hereunder.
SECTION 4.04. Sharing of Payments, Etc. If any Participating Bank
shall obtain any payment (whether voluntary, involuntary, through the
exercise of any right of set-off, or otherwise, but excluding any proceeds
received by assignments or sales of participations in accordance with
Section 10.06 hereof to a Person that is not an Affiliate of the Account
Party) on account of the Advances owing to it (other than pursuant to
Section 4.03 hereof) in excess of its ratable share of payments on account
of the Advances obtained by all the Participating Banks, such Participating
Bank shall forthwith purchase from the other Participating Banks such
participation in the portions of the Advances owing to them as shall be
necessary to cause such purchasing Participating Bank to share the excess
payment ratably with each of them; provided, however, that if all or any
portion of such excess payment is thereafter recovered from such purchasing
Participating Bank, such purchase from each Participating Bank shall be
rescinded and such Participating Bank shall repay to the purchasing
Participating Bank the purchase price to the extent of such recovery
together with an amount equal to such Participating Bank's ratable share
(according to the proportion of (i) the amount of such Participating Bank's
required repayment to (ii) the total amount so recovered from the
purchasing Participating Bank) of any interest or other amount paid or
payable by the purchasing Participating Bank in respect of the total amount
so recovered. The Account Party agrees that any Participating Bank so
purchasing a participation from another Participating Bank pursuant to this
Section 4.04 may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of set-off) with respect to such
participation as fully as if such Participating Bank were the direct
creditor of the Account Party in the amount of such participation.
Notwithstanding the foregoing, if any Participating Bank shall obtain any
such excess payment involuntarily, such Participating Bank may, in lieu of
purchasing participations from the other Participating Banks in accordance
with this Section 4.04, on the date of receipt of such excess payment,
return such excess payment to the Agent for distribution in accordance with
Section 4.01(a) hereof.
SECTION 4.05. Taxes. (a) All payments by the Account Party
hereunder shall be made in accordance with Section 4.01, free and clear of
and without deduction for all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Participating Bank and the Issuing
Bank, taxes imposed on its overall net income, and franchise taxes imposed
on it, by the jurisdiction under the laws of which such Participating Bank
or the Issuing Bank (as the case may be) is organized or any political
subdivision thereof and, in the case of each Participating Bank, taxes
imposed on its overall net income, and franchise taxes imposed on it, by
the jurisdiction of such Participating Bank's Applicable Lending Office or
any political subdivision thereof (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as Taxes ). If the Account Party shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder to any Participating Bank or the Issuing Bank, (i) the sum
payable shall be increased as may be necessary so that after making all
required deductions (including deductions applicable to additional sums
payable under this Section 4.05) such Participating Bank or the Issuing
Bank (as the case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Account Party shall
make such deductions and (iii) the Account Party shall pay the full amount
deducted to the relevant taxation authority or other authority in
accordance with applicable law.
(b) In addition, the Account Party agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies that arise from any payment made hereunder or
from the execution, delivery or registration of, or otherwise with respect
to, this Agreement (hereinafter referred to as Other Taxes ).
(c) The Account Party will indemnify each Participating Bank and
the Issuing Bank for the full amount of Taxes and Other Taxes (including,
without limitation, any Taxes and any Other Taxes imposed by any
jurisdiction on amounts payable under this Section 4.05) paid by such
Participating Bank or the Issuing Bank (as the case may be) and any
liability (including penalties, interest and expenses) arising therefrom or
with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted. This indemnification shall be made within
30 days from the date such Participating Bank or the Issuing Bank (as the
case may be) makes written demand therefor. If any Taxes or Other Taxes
for which a Participating Bank or the Issuing Bank has received payments
from the Account Party hereunder shall be finally determined to have been
incorrectly or illegally asserted and are refunded to such Participating
Bank, such Participating Bank shall promptly forward to the Account Party
any such refunded amount. The Account Party's, the Issuing Bank's and each
Participating Bank's obligations under this Section 4.05 shall survive the
Termination Date and the payment of all other amounts hereunder.
(d) Within 30 days after the date of any payment of Taxes, the
Account Party will furnish to the Issuing Bank, at its address referred to
in Section 10.02 hereof, the original or a certified copy of a receipt
evidencing payment thereof.
(e) Each Participating Bank not incorporated in the United States
or a jurisdiction within the United States shall, on or prior to the date
it becomes a Participating Bank hereunder, deliver to the Account Party and
the Issuing Bank such certificates, documents or other evidence, as
required by the Internal Revenue Code of 1986, as amended from time to time
(the Code ), or treasury regulations issued pursuant thereto, including
Internal Revenue Service Form 4224 and any other certificate or statement
of exemption required by Treasury Regulation Section 1.1441-1(a) or Section
1.1441-6(c) or any subsequent version thereof, properly completed and duly
executed by such Participating Bank establishing that it is (i) not subject
to withholding under the Code or (ii) totally exempt from United States of
America tax under a provision of an applicable tax treaty. Each
Participating Bank shall promptly notify the Account Party and the Issuing
Bank of any change in its Applicable Lending Office and shall deliver to
the Account Party and the Issuing Bank together with such notice such
certificates, documents or other evidence referred to in the immediately
preceding sentence. Unless the Account Party and the Issuing Bank have
received forms or other documents satisfactory to them indicating that
payments hereunder are not subject to United States of America withholding
tax or are subject to such tax at a rate reduced by an applicable tax
treaty, the Account Party or the Issuing Bank shall withhold taxes from
such payments at the applicable statutory rate in the case of payments to
or for any Participating Bank organized under the laws of a jurisdiction
outside the United States of America. Each Participating Bank represents
and warrants that each such form supplied by it to the Issuing Bank and the
Account Party pursuant to this Section 4.05, and not superseded by another
form supplied by it, is or will be, as the case may be, complete and
accurate.
(f) Any Participating Bank claiming any additional amounts payable
pursuant to this Section 4.05 shall use reasonable efforts (consistent with
legal and regulatory restrictions) to file any certificate or document
requested by the Account Party or to change the jurisdiction of its
Applicable Lending Office if the making of such a filing or change would
avoid the need for or reduce the amount of any such additional amounts
which may thereafter accrue and would not, in the sole determination of
such Participating Bank, be otherwise disadvantageous to such Participating
Bank.
SECTION 4.06. Obligations Absolute. The obligations of the Account
Party under this Agreement shall be unconditional and irrevocable, and
shall be paid strictly in accordance with the terms of this Agreement (as
the same may be amended from time to time) under all circumstances,
including, without limitation, the following circumstances:
(i) any lack of validity or enforceability of this
Agreement, the Second Mortgage or any of the Security Documents or Related
Documents or any document or agreement delivered in connection therewith;
(ii) any change in the time, manner or place of payment
of, or in any other term of, all or any of the obligations of the Account
Party in respect of the Letter of Credit or any other amendment or waiver
of or any consent to departure from all or any of the Loan Documents, the
Second Mortgage or the Related Documents or any document or agreement
delivered in connection therewith;
(iii) the existence of any claim, set-off, defense or other
right which the Account Party may have at any time against the Paying
Agent, the Trustee or any other beneficiary, or any transferee, of the
Letter of Credit (or any persons or entities for whom the Paying Agent, the
Trustee, any such beneficiary or any such transferee may be acting), the
Agent, the Issuing Bank, or any other person or entity, whether in
connection with this Agreement, the transactions contemplated in any of the
Loan Documents, the Second Mortgage or the Related Documents, or any
unrelated transaction;
(iv) any statement or any other document presented under
the Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect, except to the extent that a court of competent
jurisdiction shall determine that the Issuing Bank shall have engaged in
gross negligence or willful misconduct with respect thereto;
(v) payment by the Issuing Bank under the Letter of
Credit against presentation of a draft or certificate which does not comply
with the terms of the Letter of Credit, except to the extent that a court
of competent jurisdiction shall determine that the Issuing Bank shall have
engaged in gross negligence or willful misconduct with respect thereto;
(vi) any exchange of, release of or non-perfection of any
interest in any collateral, or any release or amendment or waiver of or
consent to departure from any guarantee, for all or any of the obligations
of the Account Party in respect of the Letter of Credit; or
(vii) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing.
SECTION 4.07. Evidence of Indebtedness. The Issuing Bank and each
Participating Bank shall maintain, in accordance with their usual practice,
an account or accounts evidencing the indebtedness of the Account Party
resulting from each drawing under the Letter of Credit (in the case of the
Issuing Bank) and from each Advance (in the case of each Participating
Bank) made from time to time hereunder and the amounts of principal and
interest payable and paid from time to time hereunder. In any legal action
or proceeding in respect of this Agreement, the entries made in such
account or accounts shall, in the absence of manifest error, be conclusive
evidence of the existence and amounts of the obligations of the Account
Party therein recorded.
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.01. Conditions Precedent to the Issuance of the Letter of
Credit. The obligation of the Issuing Bank to issue the Letter of Credit
and of each Participating Bank to make the Advances to be made by it is
subject to the fulfillment of the conditions precedent that the Agent shall
have received on or before the day of such issuance the following, each
dated such day (except where specified otherwise below), in form and
substance satisfactory to each Participating Bank (except where specified
otherwise below) and in sufficient copies for each Participating Bank:
(a) Agreements:
(i) Counterparts of this Agreement, duly executed and
delivered by the Account Party, the Agent, the Issuing Bank and each
Participating Bank listed on the signature pages hereto.
(ii) Counterparts of the Pledge Agreement, duly executed by the
Account Party, the Agent and the Issuing Bank.
(iii) Executed copies (or duplicate copies thereof
certified as of the Closing Date by the Account Party in a manner
satisfactory to the Agent to be a true copy) of the Indenture and the Loan
Agreement, duly executed by the parties thereto.
(iv) Executed copies (or duplicate copies thereof certified as
of the Closing Date by the Account Party in a manner satisfactory to the
Agent to be a true copy) of the Second Mortgage, duly executed by the
parties thereto.
(b) Corporate Matters:
(i) A certificate of the Secretary, an Assistant Secretary,
the Clerk or an Assistant Clerk of the Account Party certifying that
attached thereto are (A) a true and correct copy of the Articles of
Incorporation of the Account Party and a true and correct copy of the
By-laws of the Account Party, in each case as in effect on the Closing Date
and (B) true and correct copies of the resolutions of the Board of
Directors of the Account Party approving, if and to the extent necessary,
this Agreement, the other Loan Documents, the Related Documents to which it
is a party and the other documents to be delivered by or on behalf of the
Account Party hereunder and thereunder, and of all documents evidencing
other necessary corporate action, if any, with respect to the execution,
delivery and performance by or on behalf of the Account Party of this
Agreement, the other Loan Documents and such Related Documents and
certifying that such resolutions and other corporate actions, if any, are
in full force and effect and have not been revoked, rescinded or modified.
(ii) A certificate of the Secretary, an Assistant Secretary,
the Clerk or an Assistant Clerk of the Account Party certifying the names
and true signatures of the officers of the Account Party authorized to sign
this Agreement, the other Loan Documents, the Related Documents to which it
is a party and the other documents to be delivered hereunder and
thereunder.
(c) Governmental Approvals:
(i) A certificate of a duly authorized officer of the Account
Party certifying that attached thereto are true and correct copies of all
Governmental Approvals referred to in clause (i) of the definition of
Governmental Approval required to be obtained or made by the Account
Party.
(d) Financial, Accounting and Compliance Matters:
(i) A certificate signed by the Treasurer or Assistant
Treasurer of the Account Party, certifying as to the absence of any
material adverse change in the financial condition, operations, properties
or prospects of the Account Party since December 31, 1992, except to the
extent, if any, described in the Account Party's Quarterly Reports on Form
10-Q for the periods ended March 31 and/or June 30, 1993 or in the Account
Party's Current Reports on Form 8-K dated June 3, 1993, June 30, 1993
and/or September 10, 1993.
(ii) A certificate of a duly authorized officer of the Account
Party to the effect that:
(A) the representations and warranties contained in
Section 6.01 are correct in all material respects on and as of the Closing
Date before and after giving effect to the issuance of the Letter of
Credit; and
(B) no event has occurred and is continuing which
constitutes an Event of Default or Unmatured Default, or would result from
the issuance of the Letter of Credit.
(e) Relating to the Issuance of the Bonds:
(i) An executed copy (or a duplicate copy thereof certified by
the Account Party in a manner satisfactory to the Agent to be a true copy)
of the Remarketing Agreement, duly executed by the Issuer, the Remarketing
Agent and the Account Party.
(ii) An executed copy (or a duplicate copy thereof certified by
the Account Party in a manner satisfactory to the Agent to be a true copy)
of the Purchase Contract, duly executed by Goldman, Sachs & Co.,
Individually and as Representative of Advest, Inc., Greenwich Partners,
Inc. and U.S. Securities, Inc., the Issuer and the Account Party.
(iii) A letter from Whitman & Ransom, counsel to the Issuer,
addressed to the Agent, the Issuing Bank and the Participating Banks and
stating therein that the Agent, the Issuing Bank and the Participating
Banks may rely on the opinion of such firm in the form of Appendix C to the
Official Statement relating to the Bonds and delivered pursuant to Section
14(i)(2)(F) of the Purchase Contract, together with copies of such opinion.
(iv) Copies of the Preliminary Official Statement and Official
Statement used in connection with the offering and remarketing of the
Bonds, and any amendments, supplements or "stickers" thereto.
(v) Copies of the Issuer Resolution, and, to the extent not
otherwise referenced in this Section 5.01(e), of all other agreements,
documents, certificates and opinions delivered in connection with the
issuance of the Bonds.
(f) Opinions of Counsel:
Favorable opinions of:
(i) Day, Berry & Howard, counsel to the Account Party, in
substantially the form of Exhibit 5.01A and as to such other matters as the
Majority Lenders, through the Agent, may reasonably request; and
(ii) King & Spalding, special New York counsel to the Agent and
the Issuing Bank, in substantially the form of Exhibit 5.01B.
(g) Miscellaneous:
(i) Letters from S&P and Moody's to the effect that the Bonds
have been rated A-1+ and VMIG-1, respectively, such letters to be in form
and substance satisfactory to the Issuing Bank.
(ii) Such other approvals, opinions and documents as the
Majority Lenders, through the Issuing Bank, may reasonably request as to
the legality, validity, binding effect or enforceability of the Loan
Documents or the financial condition, properties, operations or prospects
of the Account Party.
SECTION 5.02. Additional Conditions Precedent to the Issuance of the
Letter of Credit. The obligation of the Issuing Bank to issue the Letter
of Credit and of each Participating Bank to make the Advances to be made by
it shall be subject to the further conditions precedent that, on the date
of the issuance of the Letter of Credit:
(a) the representations and warranties contained in Section
6.01 shall be correct in all material respects on and as of the Closing
Date before and after giving effect to the issuance of the Letter of
Credit;
(b) no event shall have occurred and be continuing which
constitutes an Event of Default or Unmatured Default, or would result from
the issuance of the Letter of Credit; and
(c) The Account Party shall have paid all fees under or
referenced in Section 2.03 hereof, to the extent then due and payable.
SECTION 5.03. Conditions Precedent to Initial Advances. The
obligation of each Participating Bank to make any Initial Advance shall be
subject to the conditions precedent that, on the date of such Initial
Advance, the following statements shall be true:
(a) the representations and warranties contained in Section
6.01 of this Agreement (other than the last sentence of subsection (f) and
clause (ii) of subsection (g) thereof) are true and correct on and as of
the date of such Initial Advance, before and after giving effect to such
Initial Advance and to the application of the proceeds (if any) therefrom,
as though made on and as of such date; and
(b) no event has occurred and is continuing which constitutes
an Event of Default.
Unless the Account Party shall have previously advised the Agent in
writing that one or more of the statements contained in subsections (a) and
(b) of this Section 5.03 is no longer true, the Account Party shall be
deemed to have represented and warranted, on and as of the date of any
Initial Advance, that the above statements are true.
SECTION 5.04. Conditions Precedent to Term Advances. The obligation
of each Participating Bank to make any Term Advance shall be subject to the
conditions precedent that, on the date of such Term Advance the following
statements shall be true:
(a) the representations and warranties contained in Section
6.01 of this Agreement (including the last sentence of subsection (f) and
clause (ii) of subsection (g) thereof) are true and correct on and as of
the date of such Term Advance, before and after giving effect to such Term
Advance and to the application of the proceeds therefrom, as though made
on and as of such date; and
(b) no event has occurred and is continuing which constitutes
an Event of Default or an Unmatured Default.
Unless the Account Party shall have previously advised the Agent in writing
that one or more of the statements contained in subsections (a) and (b) of
this Section 5.04 is no longer true, the Account Party shall be deemed to
have represented and warranted, on and as of the date of any Term Advance,
that the above statements are true.
SECTION 5.05. Reliance on Certificates. The Agent, the Issuing Bank
and the Participating Banks shall be entitled to rely conclusively upon the
certificates delivered from time to time by officers of the Account Party,
NU and the other parties to the Loan Documents and Related Documents as to
the names, incumbency, authority and signatures of the respective persons
named therein until such time as the Agent may receive a replacement
certificate, in form acceptable to the Agent, from an officer of such
Person identified to the Agent as having authority to deliver such
certificate, setting forth the names and true signatures of the officers
and other representatives of such Person thereafter authorized to act on
behalf of such Person.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01. Representations and Warranties of the Account Party.
The Account Party represents and warrants as follows:
(a) Each of the Account Party and its Principal Subsidiaries is a
corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, has the requisite corporate
power and authority to own its property and assets and to carry on its
business as now conducted and is qualified to do business in every
jurisdiction where, because of the nature of its business or property, such
qualification is required, except where the failure so to qualify would not
have a material adverse effect on the financial condition, properties,
prospects or operations of the Account Party or of the Account Party and
its Principal Subsidiaries taken as a whole. The Account Party has the
corporate power to execute, deliver and perform its obligations under this
Agreement, each other Loan Document and each Related Document to which it
will be a party.
(b) The execution, delivery and performance by the Account Party of
each Loan Document and Related Document to which it is a party are within
the Account Party's corporate powers, have been duly authorized by all
necessary corporate action, and do not and will not contravene (i) the
Account Party's charter or by-laws or any law or legal restriction or (ii)
any contractual restriction binding on or affecting the Account Party or
its properties or any of its Principal Subsidiaries or its properties.
(c) Each of the Account Party and its Principal Subsidiaries is not
in violation of any law, or in default with respect to any judgment, writ,
injunction, decree, rule or regulation of any court or governmental agency
or instrumentality, where such violation or default would have a material
adverse effect on the financial condition, properties, prospects or
operations of the Account Party or of the Account Party and its Principal
Subsidiaries taken as a whole.
(d) All Governmental Approvals referred to in clause (i) in the
definition of Governmental Approvals have been duly obtained or made, and
all applicable periods of time for review, rehearing or appeal with respect
thereto have expired, except as described below. If the period for appeal
of the order of the Securities and Exchange Commission approving the
transactions contemplated hereby has not expired, the filing of an appeal
of such order will not affect the validity of said transactions, unless
such order has been otherwise stayed or any of the parties hereto has
actual knowledge that any of such transactions constitutes a violation of
the Public Utility Holding Company Act of 1935 or any rule or regulation
thereunder. No such stay exists and the Account Party has no reason to
believe that any of such transactions constitutes any such violation.
Although the period for appeal of the order of the Massachusetts Department
of Public Utilities (the MDPU ) approving the transactions contemplated
hereby has not expired, no Person (other than the Account Party) has
standing to appeal such order of the MDPU. If the period for appeal of the
decision of the Connecticut Department of Public Utility Control (the
CDPUC ) approving or waiving approval of the transactions contemplated
hereby has not expired, the filing of an appeal of such decision will not
affect the validity of said transactions, unless operation of such decision
has been stayed or suspended by the CDPUC or a reviewing court prior to the
consummation of such transactions. No such stay or suspension exists. No
representation or warranty is made concerning the applicable period of time
for review, rehearing or appeal with respect to Governmental Approvals of
the Issuer in connection with the issuance of the Bonds. The Account Party
and each of its Principal Subsidiaries have obtained or made all
Governmental Approvals referred to in clause (ii) of the definition of
Governmental Approvals , except (i) those which are not yet required but
which are obtainable in the ordinary course of business as and when
required, (ii) those the absence of which would not materially adversely
affect the financial condition, properties, prospects or operations of the
Account Party or any Principal Subsidiary and (iii) those which the Account
Party is diligently attempting in good faith to obtain, renew or extend, or
the requirement for which the Account Party is contesting in good faith by
appropriate proceedings or by other appropriate means; in each case
described in the foregoing clause (iii), such attempt or contest, and any
delay resulting therefrom, is not reasonably expected to have a material
adverse effect on the financial condition, properties, prospects or
operations of the Account Party or any Principal Subsidiary or to magnify
to any significant degree any such material adverse effect that would
reasonably be expected to result from the absence of such Governmental
Approval.
(e) This Agreement, each other Loan Document and each Related
Document to which the Account Party is a party have been duly executed and
delivered by or on behalf of the Account Party and are legal, valid and
binding obligations of the Account Party enforceable against the Account
Party in accordance with their respective terms; subject to the
qualifications, however, that the enforcement of the rights and remedies
herein and therein is subject to bankruptcy and other similar laws of
general application affecting rights and remedies of creditors and the
application of general principles of equity (regardless of whether
considered in a proceeding in equity or at law) and that indemnification
against violations of securities and similar laws may be subject to matters
of public policy.
(f) (i) The audited balance sheet of the Account Party as at
December 31, 1992, and the audited statements of income and cash flows of
the Account Party for the fiscal year then ended as set forth in the
Account Party's Annual Report on Form 10-K for such fiscal year and (ii)
the unaudited balance sheet of the Account Party as at June 30, 1993 and
the unaudited statements of income and cash flows of the Account Party for
the six-month period then ended as set forth in the Account Party's
Quarterly Report on Form 10-Q for the period then ended, fairly present in
all material respects the financial condition and results of operations of
the Account Party at and for the respective periods ended on such dates,
and have been prepared in accordance with generally accepted accounting
principles consistently applied. Since December 31, 1992, there has been
no material adverse change in the financial condition, operations,
properties or prospects of the Account Party and its Subsidiaries, if any,
taken as a whole, except to the extent, if any, described in the Account
Party's Quarterly Reports on Form 10-Q for the periods ended March 31, 1993
and/or June 30, 1993, or in the Account Party's Current Reports on Form 8-K
dated June 3, 1993, June 30, 1993 and/or September 10, 1993 or in Schedule
II hereto.
(g) There is no pending or known threatened action or proceeding
(including, without limitation, any action or proceeding relating to any
environmental protection laws or regulations) affecting the Account Party
or its properties, or any of its Principal Subsidiaries or its properties,
before any court, governmental agency or arbitrator (i) which affects or
purports to affect the legality, validity or enforceability of the Loan
Documents or the Related Documents or any of them or (ii) as to which there
is a reasonable possibility of an adverse determination and which, if
adversely determined, would materially adversely affect the financial
condition, properties, prospects or operations of the Account Party and its
Principal Subsidiaries taken as a whole; except, for purposes of clause
(ii) only, such as is described in the Account Party's Annual Report on
Form 10-K for the fiscal year ended December 31, 1992, in the Account
Party's Quarterly Reports on Form 10-Q for the periods ended March 31, 1993
or June 30, 1993, or in the Account Party's Current Reports on Form 8-K,
dated June 3, 1993, June 30, 1993 and/or September 10, 1993 or in Schedule
II hereto.
(h) No ERISA Plan Termination Event has occurred nor is reasonably
expected to occur with respect to any ERISA Plan which would materially
adversely affect the financial condition, properties, prospects or
operations of the Account Party and its Subsidiaries taken as a whole,
except as disclosed to and consented to in writing by the Majority Lenders.
Since the date of the most recent Schedule B (Actuarial Information) to the
annual report of each such ERISA Plan (Form 5500 Series), there has been no
material adverse change in the funding status of the ERISA Plans referred
to therein, and no prohibited transaction has occurred with respect
thereto that, singly or in the aggregate with all other prohibited
transactions and after giving effect to all likely consequences thereof,
would be reasonably expected to have a material adverse effect on the
financial condition, properties, prospects or operations of the Account
Party and its Subsidiaries taken as a whole. Neither the Account Party nor
any of its ERISA Affiliates has incurred nor reasonably expects to incur
any material withdrawal liability under ERISA to any ERISA Multiemployer
Plan, except as disclosed to all Lenders and consented to in writing by the
Majority Lenders.
(i) The Account Party or one of its Principal Subsidiaries has good
and marketable title (or, in the case of personal property, valid title) or
valid leasehold interests in the electric generating plants of which it is
named as owner in Item 2 of the Account Party's Annual Report on Form
10-K for the fiscal year ended December 31, 1992 under the caption System
Generating Plants , except for minor defects in title that do not interfere
with the ability of the Account Party or any of its Principal Subsidiaries
to conduct its business as now conducted. All such assets and properties
are free and clear of any Lien, other than Liens permitted under Section
7.02(a) hereof.
(j) All outstanding shares of capital stock having ordinary voting
power for the election of directors of the Account Party have been validly
issued, are fully paid and nonassessable and are owned beneficially by NU,
free and clear of any Lien. NU is a holding company (as defined in the
Public Utility Holding Company Act of 1935, as amended).
(k) The Account Party and each of its Principal Subsidiaries has
filed all tax returns (Federal, state and local) required to be filed and
paid taxes shown thereon to be due, including interest and penalties, or,
to the extent the Account Party or any of its Principal Subsidiaries is
contesting in good faith an assertion of liability based on such returns,
has provided adequate reserves in accordance with generally accepted
accounting principles for payment thereof.
(l) No exhibit, schedule, report or other written information
provided by or on behalf of the Account Party or its agents to the Agent,
the Issuing Bank or the Participating Banks in connection with the
negotiation, execution and closing of this Agreement, the other Loan
Documents or the Related Documents knowingly contained when made any
material misstatement of fact or knowingly omitted to state any material
fact necessary to make the statements contained therein not misleading in
light of the circumstances under which they were made.
(m) No proceeds of any Advance will be used in violation of, or in
any manner that would result in a violation by any party hereto of,
Regulations G, T, U or X promulgated by the Board of Governors of the
Federal Reserve System or any successor regulations. The Account Party (A)
is not an investment company within the meaning ascribed to that term in
the Investment Company Act of 1940 and (B) is not engaged in the business
of extending credit for the purpose of buying or carrying margin stock.
ARTICLE VII
COVENANTS OF THE ACCOUNT PARTY
SECTION 7.01. Affirmative Covenants. So long as any amounts shall
remain available to be drawn under the Letter of Credit or any Advance or
other amounts shall remain unpaid hereunder or any Participating Bank shall
have any Commitment, the Account Party will, unless the Majority Lenders
shall otherwise consent in writing:
(a) Use of Proceeds. Apply all proceeds of each Advance solely as
specified in Section 3.02 and Section 6.01(m) hereof.
(b) Payment of Taxes, Etc. Pay and discharge before the same shall
become delinquent, and cause each of its Principal Subsidiaries to pay and
discharge before the same shall become delinquent, all taxes, assessments
and governmental charges, royalties or levies imposed upon it or upon its
property except to the extent the Account Party or any of its Principal
Subsidiaries is contesting the same in good faith by appropriate
proceedings and has set aside adequate reserves in accordance with
generally accepted accounting principles for the payment thereof.
(c) Maintenance of Insurance. Maintain, or cause to be maintained,
insurance (including appropriate plans of self-insurance) covering the
Account Party, its Principal Subsidiaries and their respective properties,
in effect at all times in such amounts and covering such risks as may be
required by law and in addition as is usually carried by companies engaged
in similar businesses and owning similar properties.
(d) Preservation of Existence, Etc. Subject at all times to
Section 7.02(b) hereof, preserve and maintain, and cause each of its
Principal Subsidiaries to preserve and maintain, its existence, corporate
or otherwise, material rights (statutory and otherwise) and franchises
except for such rights and franchises which do not materially adversely
affect the financial condition, properties, prospects or operations of the
Account Party or any of its Principal Subsidiaries.
(e) Compliance with Laws, Etc.. Comply, and cause each of its
Principal Subsidiaries to comply, in all material respects with the
requirements of all applicable laws, rules, regulations and orders of any
governmental authority, including, without limitation, any such laws,
rules, regulations and orders issued by the Securities and Exchange
Commission or relating to zoning, environmental protection, use and
disposal of Hazardous Substances, land use, construction and building
restrictions, ERISA and employee safety and health matters relating to
business operations, except to the extent (i) that the Account Party or any
of its Principal Subsidiaries is contesting the same in good faith by
appropriate proceedings or (ii) that any such non-compliance, and the
enforcement or correction thereof, would not materially adversely affect
the financial condition, properties, prospects or operations of the Account
Party or any of its Principal Subsidiaries.
(f) Inspection Rights. At any time and from time to time upon
reasonable notice, permit the Issuing Bank and its agents and
representatives to examine the records and books of account of, and the
properties of, the Account Party and any of its Principal Subsidiaries.
(g) Keeping of Books. Keep proper records and books of account, in
which full and correct entries shall be made of all financial transactions
of the Account Party and its Principal Subsidiaries and the assets and
business of the Account Party and its Principal Subsidiaries, in accordance
with generally accepted accounting practices consistently applied.
(h) Conduct of Business. Conduct its primary business, and cause
each of its Principal Subsidiaries to conduct its primary business, in
substantially the same manner and in substantially the same fields as such
business is conducted on the Closing Date.
(i) Maintenance of Properties, Etc. (i) As to properties of the
type described in Section 6.01(i) hereof, subject at all times to Section
7.02(b) hereof, maintain, and cause its Principal Subsidiaries to maintain,
title of the quality described therein; and (ii) preserve, maintain,
develop, and operate, and cause its Principal Subsidiaries to preserve,
maintain, develop and operate, in substantial conformity with all laws,
material contractual obligations and prudent practices prevailing in the
industry, all of its properties which are used or useful in the conduct of
its or its Principal Subsidiaries' respective businesses in good working
order and condition, ordinary wear and tear excepted, except to the extent
such non- conformity would not materially adversely affect the financial
condition, properties, prospects or operations of the Account Party or any
of its Principal Subsidiaries; provided, however, that the Account Party or
any Principal Subsidiary will not be prevented from discontinuing the
operation and maintenance of any such properties if such discontinuance is,
in the judgment of the Account Party or such Principal Subsidiary,
desirable in the operation or maintenance of its business and would not
materially adversely affect the financial condition, properties, prospects
or operations of the Account Party or such Principal Subsidiary.
(j) Governmental Approvals. Duly obtain, and cause each of its
Principal Subsidiaries to duly obtain, on or prior to such date as the same
may become legally required, and thereafter maintain in effect at all
times, all Governmental Approvals on its or such Principal Subsidiary's
part to be obtained, except with respect to those Governmental Approvals
referred to in clause (ii) of the definition of Governmental Approvals ,
(i) those the absence of which would not materially adversely affect the
financial condition, properties, prospects or operations of the Account
Party or any Principal Subsidiary and (ii) those which the Account Party is
diligently attempting in good faith to obtain, renew or extend, or the
requirement for which the Account Party is contesting in good faith by
appropriate proceedings or by other appropriate means; provided, however,
that the exception afforded by clause (ii), above, shall be available only
if and for so long as such attempt or contest, and any delay resulting
therefrom, does not have a material adverse effect on the financial
condition, properties, prospects or operations of the Account Party or any
Principal Subsidiary and does not magnify to any significant degree any
such material adverse effect that would reasonably be expected to result
from the absence of such Governmental Approval.
(k) Further Assurances. Promptly execute and deliver all further
instruments and documents, and take all further action, that may be
necessary or that any Participating Bank through the Issuing Bank may
reasonably request in order to fully give effect to the interests and
properties purported to be covered by the Security Documents.
(l) Related Documents. Perform and comply in all material respects
with each of the provisions of each Related Document to which it is a
party.
(m) Ratings. Maintain at all times ratings in respect of the Bonds
of at least two nationally-recognized ratings services, at least one of
which shall be S&P or Moody's.
SECTION 7.02. Negative Covenants. So long as any amount shall
remain available to be drawn under the Letter of Credit or any Advance or
other amounts shall remain unpaid hereunder or any Participating Bank shall
have any Commitment, the Account Party will not, without the written
consent of the Majority Lenders:
(a) Liens, Etc. Create, incur, assume or suffer to exist any lien,
security interest, or other charge or encumbrance (including the lien or
retained security title of a conditional vendor) of any kind, or any other
type of preferential arrangement the intent or effect of which is to assure
a creditor against loss or to prefer one creditor over another creditor
upon or with respect to any of its properties or assets (any of the
foregoing being referred to herein as a Lien ), excluding, however, from
the operation of the foregoing restrictions the Liens created or perfected
under or in connection with the Pledge Agreement, and the following,
whether now existing or hereafter created or perfected:
(i) Liens created by the First Mortgage Indenture and Deed of
Trust dated as of August 1, 1954, from the Account Party to the First
National Bank of Boston, as Successor Trustee, as amended and supplemented
(the WMECO Indenture );
(ii) Liens on the Account Party's interest in the Millstone
Unit No. 1, Millstone Unit No. 2 or Millstone Unit No. 3 nuclear generating
units in Waterford, Connecticut, or nuclear fuel for any or all nuclear
units in which the Account Party has an interest (including, without
limitation, Millstone Unit No. 1, Millstone Unit No.2 and Millstone Unit
No. 3);
(iii) Permitted Liens or Permitted Encumbrances under
the WMECO Indenture;
(iv) any Lien on assets of any of its Subsidiaries created or
assumed to secure Debt owing by any of its Subsidiaries to the Account
Party or to any wholly-owned Subsidiary of the Account Party;
(v) any purchase money Lien or construction mortgage on assets
hereafter acquired or constructed by the Account Party or any of its
Subsidiaries and any Lien on any assets existing at the time of acquisition
thereof by the Account Party or any of its Subsidiaries, or created within
180 days from the date of completion of such acquisition or construction;
provided that such Lien shall at all times be confined solely to the assets
so acquired or constructed and any additions thereto;
(vi) any existing Liens on assets now owned by the Account
Party or any of its Subsidiaries; Liens on assets or stock of any class of,
or any partnership or joint venture interest in, any of its Subsidiaries
existing at the time it becomes a Subsidiary of the Account Party, and
liens existing on assets of a corporation or other going concern when it is
merged into or with the Account Party or a Subsidiary of the Account Party,
or when substantially all of its assets are acquired by the Account Party
or a Subsidiary of the Account Party; provided that such Liens shall at all
times be confined solely to such assets, or if such assets constitute a
utility system, additions to or substitutions for such assets;
(vii) Liens resulting from legal proceedings being
contested in good faith by appropriate legal or administrative proceedings
by the Account Party or any of its Subsidiaries, and as to which the
Account Party or any of its Subsidiaries, as the case may be, to the extent
required by generally accepted accounting principles applied on a
consistent basis, shall have set aside on its books adequate reserves;
(viii) Liens created in favor of the other contracting party
in connection with advance or progress payments;
(ix) any Liens in favor of any state of the United States or
any political subdivision of any such state, or any agency of any such
state or political subdivisions, or trustee acting on behalf of holders of
obligations issued by any of the foregoing or any financial institutions
lending to or purchasing obligations of any of the foregoing, which Lien is
created or assumed for the purpose of financing all or part of the cost of
acquiring or constructing the property subject thereto;
(x) Liens resulting from conditional sale agreements, capital
leases or other title retention agreements;
(xi) Liens on property of the Account Party or any of its
Subsidiaries related to the financing of pollution control facilities;
(xii) Liens on accounts receivable and power contracts
resulting from financing transactions;
(xiii) any other Liens incurred in the ordinary course of
business otherwise than to secure Debt; and
(xiv) any extension, renewal or replacement of Liens
permitted by clauses (i) through (vi) and (viii) through (xiii); provided,
however, that the principal amount of Debt secured thereby shall not, at
the time of such extension, renewal or replacement, exceed the principal
amount of Debt so secured and that such extension, renewal or replacement
shall be limited to all or a part of the property which secured the Lien so
extended, renewed or replaced;
(b) Mergers, and Sales of Assets, Etc. Merge with or into or
consolidate with or into, any Person, or permit any of its Subsidiaries to
be a party to, any merger or consolidation, or purchase or otherwise
acquire all or substantially all of the assets or stock of any class of, or
any partnership or joint venture interest in, any other Person or entity,
or sell, transfer, convey or lease all or any substantial part of its
assets (other than sales, transfers or conveyances of receivables and power
contracts), except for, and then only after receipt of all necessary
corporate and governmental or regulatory approvals and provided, that,
before and after giving effect to any such merger, consolidation, purchase,
acquisition, sale, transfer, conveyance or lease, no Event of Default or
Unmatured Default shall have occurred and be continuing:
(i) any such merger or consolidation, sale, transfer,
conveyance, lease or assignment of or by any wholly-owned Subsidiary of the
Account Party into the Account Party or into, with or to any other wholly-
owned Subsidiary of the Account Party and any such purchase or other
acquisition by the Account Party or any wholly-owned Subsidiary of the
Account Party of the assets or stock of any wholly-owned Subsidiary of the
Account Party;
(ii) any such sale of assets (other than stock) which comprise
all or any part of its interest in a nuclear power generating plant
(whether completed or under construction);
(iii) any such merger or consolidation of the Account Party
with or into another wholly-owned Subsidiary of NU and/or a Regulatory
Transaction Entity and/or an entity owning a cogeneration or independent
power project, pursuant to step-in or similar rights granted pursuant to
a pre-existing power purchase contract, if (but only if): (A) the successor
or surviving corporation, if not the Account Party, shall have assumed or
succeeded to all of the liabilities of the Account Party (including the
liabilities of the Account Party under this Agreement), and (B) the Agent
shall have received the favorable written opinion of counsel to the Account
Party, in form and substance satisfactory to the Agent and the Majority
Lenders, to the effect of the foregoing subclause (A); provided, however,
in the event of a merger or consolidation with a Regulatory Transaction
Entity, if the purchase price plus the amount of any liabilities assumed in
connection with such merger or consolidation exceeds $100,000,000, the
Account Party shall deliver to the Agent with sufficient copies for each
Participating Bank 30 days prior to such merger or consolidation, a
certificate of a duly authorized officer of the Account Party demonstrating
projected compliance with the ratio set forth in Section 7.02(d) hereof for
and as of each of the three consecutive fiscal quarters immediately
succeeding such merger or consolidation and certifying that such
projections were prepared in good faith and on reasonable assumptions;
(iv) any purchase or acquisition of all or substantially all of
the assets of or stock of any class of, or any partnership or joint venture
interest in (and any assumption of the related liabilities) (A) an entity
owning a cogeneration or independent power project, pursuant to step-in
or similar rights granted pursuant to a pre-existing power purchase
contract; (B) a Regulatory Transaction Entity; or (C) any other Person if
the purchase price of such acquisition plus the amount of any liabilities
assumed by the Account Party in connection therewith does not exceed
$50,000,000 in the aggregate; provided, however, in the event of a purchase
or acquisition of a Regulatory Transaction Entity, if the purchase price
plus the amount of any liabilities assumed in connection with such purchase
or acquisition exceeds in the aggregate $100,000,000, the Account Party
shall deliver to the Agent with sufficient copies for each Participating
Bank 30 days prior to such purchase or acquisition, a certificate of a duly
authorized officer of the Account Party demonstrating projected compliance
with the ratio set forth in Section 7.02(d) hereof for and as of each of
the three consecutive fiscal quarters immediately succeeding such purchase
or acquisition and certifying that such projections were prepared in good
faith and on reasonable assumptions; or
(v) any purchase or acquisition of a joint venture interest in
a generating and/or transmission facility or in a mutual insurance company
providing nuclear liability or nuclear property or replacement power
insurance.
(c) Compliance with ERISA. (i) Terminate, or permit any ERISA
Affiliate to terminate, any ERISA Plan so as to result in any liability of
the Account Party or any Principal Subsidiary to the PBGC in an amount
greater than $1,000,000, or (ii) permit to exist any occurrence of any
Reportable Event (as defined in Title IV of ERISA) which, alone or together
with any other Reportable Event with respect to the same or another ERISA
Plan, has a reasonable possibility of resulting in liability of the Account
Party or any Subsidiary to the PBGC in an aggregate amount exceeding
$1,000,000, or any other event or condition, which presents a material risk
of such a termination by the PBGC of any ERISA Plan or has a reasonable
possibility of resulting in a liability of the Account Party or any
Subsidiary to the PBGC in an aggregate amount exceeding $1,000,000.
(d) Common Equity Ratio. Permit the ratio (expressed as a
percentage) of Consolidated Common Equity to Consolidated Capitalization to
be less than 30% for any three consecutive fiscal quarters.
SECTION 7.03. Reporting Obligations. So long as any amount shall
remain available to be drawn under the Letter of Credit or any Advance or
other amounts shall remain unpaid hereunder or any Participating Bank shall
have any Commitment, the Account Party will, unless the Majority Lenders
shall otherwise consent in writing, furnish to the Agent in sufficient
copies for the Issuing Bank and each Participating Bank, the following:
(i) as soon as possible and in any event within ten days after
the occurrence of each Event of Default or Unmatured Default continuing on
the date of such statement, a statement of the Chief Financial Officer,
Treasurer or Assistant Treasurer of the Account Party setting forth details
of such Event of Default or Unmatured Default and the action which the
Account Party proposes to take with respect thereto;
(ii) as soon as available and in any event within 50 days after
the end of each of the first three quarters of each fiscal year of the
Account Party, a copy of the Account Party's Quarterly Report on Form 10-Q,
if any, submitted to the Securities and Exchange Commission with respect to
such quarter, containing financial statements in reasonable detail and duly
certified (subject to year-end audit adjustments) by the Chief Financial
Officer, Treasurer, Assistant Treasurer or Comptroller of the Account Party
as having been prepared in accordance with the system of management
financial reports of the Account Party applied on a basis consistent with
the financial statements referred to in Section 6.01(f) hereof and
accompanied by a certificate of a duly authorized officer of the Account
Party (X) stating that no Event of Default or Unmatured Default has
occurred and is continuing or, if an Event of Default or Unmatured Default
has occurred and is continuing, describing the nature thereof and the
action which the Account Party proposes to take with respect thereto and
(Y) demonstrating compliance with Section 7.02(d) hereof for and as of the
end of such fiscal quarter, such demonstration to be in a schedule (in form
satisfactory to the Agent) which sets forth the computations used in
determining such compliance;
(iii) as soon as available and in any event within 105 days
after the end of each fiscal year of the Account Party, a copy of the
Account Party's Annual Report on Form 10-K submitted to the Securities and
Exchange Commission with respect to such year, containing financial
statements certified by a nationally-recognized independent public
accountant and to be accompanied by a certificate of the Chief Financial
Officer, Treasurer, Assistant Treasurer or Comptroller of the Account Party
(X) stating that no Event of Default or Unmatured Default has occurred and
is continuing, or if an Event of Default or Unmatured Default has occurred
and is continuing, describing the nature thereof and the action which the
Account Party proposes to take with respect thereto and (Y) demonstrating
compliance with Section 7.02(d) hereof for and as of the end of such fiscal
year, such demonstration to be in a schedule (in form satisfactory to the
Agent) which sets forth the computations used in determining such
compliance;
(iv) as soon as possible and in any event (A) within 30 days
after the Chief Financial Officer, Treasurer or any Assistant Treasurer of
the Account Party knows or has reason to know that any ERISA Plan
Termination Event described in clause (i) of the definition of ERISA Plan
Termination Event with respect to any ERISA Plan or ERISA Multiemployer
Plan has occurred and (B) within 10 days after the Account Party knows or
has reason to know that any other ERISA Plan Termination Event with respect
to any ERISA Plan or ERISA Multiemployer Plan has occurred, a statement of
the Chief Financial Officer, Treasurer or Assistant Treasurer of the
Account Party describing such ERISA Plan Termination Event and the action,
if any, which the Account Party proposes to take with respect thereto;
(v) promptly after receipt thereof by the Account Party or any
of its ERISA Affiliates from the PBGC, copies of each notice received by
the Account Party or any such ERISA Affiliate of the PBGC's intention to
terminate any ERISA Plan or ERISA Multiemployer Plan or to have a trustee
appointed to administer any ERISA Plan or ERISA Multiemployer Plan;
(vi) promptly after receipt thereof by the Account Party
or any of its ERISA Affiliates from an ERISA Multiemployer Plan sponsor, a
copy of each notice received by the Account Party or any of its ERISA
Affiliates concerning the imposition or amount of withdrawal liability in
an aggregate principal amount of at least $1,000,000 pursuant to Section
4202 of ERISA in respect of which the Account Party may be liable;
(vii) promptly after the Account Party or any Subsidiary
becomes aware of the commencement thereof, notice of all actions, suits,
proceedings or other events of the type described in Section 6.01(g)
hereof;
(viii) promptly after the filing thereof, copies of each
prospectus (excluding any prospectus contained in any Form S-8) and Current
Report on Form 8-K, if any, which the Account Party or any Principal
Subsidiary files with the Securities and Exchange Commission or any
governmental authority which may be substituted therefor;
(ix) promptly after receipt thereof, any assertion of the
character described in Section 8.01(h) hereof and the action the Account
Party proposes to take with respect thereto; and
(x) promptly after requested, such other information
respecting the financial condition, operations, properties, prospects or
otherwise, of the Account Party or its Subsidiaries as the Agent on behalf
of the Majority Lenders may from time to time reasonably request in
writing.
ARTICLE VIII
DEFAULTS
SECTION 8.01. Events of Default. The following events shall each
constitute an Event of Default if the same shall occur and be continuing
after the grace period and notice requirement (if any) applicable thereto:
(a) The Account Party shall fail to pay any interest on any Advance
or pursuant to Section 4.02 hereof within two days after the same becomes
due; or the Account Party shall fail to reimburse the Issuing Bank for any
Interest Drawing (as defined in the Letter of Credit) within two days after
such reimbursement becomes due; or the Account Party shall fail to pay any
fees or commissions hereunder within five days after the same becomes due;
or the Account Party shall fail to make any other payment required to be
made pursuant to Article II or Article III hereof when due; or
(b) Any representation or warranty made by the Account Party (or
any of its officers or agents) in this Agreement, the Pledge Agreement or
the Purchase Contract, or in any certificate or other writing delivered
pursuant to this Agreement or the Purchase Contract, shall prove to have
been incorrect in any material respect when made or deemed made; or
(c) The Account Party shall fail to perform or observe any term or
covenant on its part to be performed or observed contained in Sections
7.01(d), Section 7.02(b) or (d), or Section 7.03(i) hereof; or
(d) The Account Party shall fail to perform or observe any other
term or covenant on its part to be performed or observed contained in this
Agreement or the Pledge Agreement and any such failure shall remain
unremedied, after the earlier of written notice having been given to the
Account Party by the Agent, the Issuing Bank or any Participating Bank, and
actual knowledge thereof by the Account Party, for a period of 30 days; or
(e) The Account Party or any Principal Subsidiary shall fail to pay
any of its Debt when due (including any interest or premium thereon but
excluding Debt arising hereunder and excluding other Debt aggregating in no
event more than $10,000,000 in principal amount at any one time) whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise,
and such failure shall continue after the applicable grace period, if any,
specified in any agreement or instrument relating to such Debt; or any
other default under any agreement or instrument relating to any such Debt,
or any other event, shall occur and shall continue after the applicable
grace period, if any, specified in such agreement or instrument, if the
effect of such default or event is to accelerate, or to permit the
acceleration of, the maturity of such Debt; or any such Debt shall be
declared to be due and payable, or required to be prepaid (other than by a
regularly scheduled required prepayment or as a result of the Account
Party's or such Principal Subsidiary's exercise of a prepayment option)
prior to the stated maturity thereof; or
(f) The Account Party or any Principal Subsidiary shall generally
not pay its debts as such debts become due, or shall admit in writing its
inability to pay its debts generally, or shall make an assignment for the
benefit of creditors; or any proceeding shall be instituted by or against
the Account Party or such Principal Subsidiary seeking to adjudicate it a
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of its debts
under any law relating to bankruptcy, insolvency, or reorganization or
relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, or other similar official for it or for
any substantial part of its property and, in the case of a proceeding
instituted against the Account Party or such Principal Subsidiary, either
the Account Party or such Principal Subsidiary shall consent thereto or
such proceeding shall remain undismissed or unstayed for a period of 90
days or any of the actions sought in such proceeding (including without
limitation the entry of an order for relief against the Account Party or
such Principal Subsidiary or the appointment of a receiver, trustee,
custodian or other similar official for the Account Party or such Principal
Subsidiary or any of its property) shall occur; or the Account Party or
such Principal Subsidiary shall take any corporate or other action to
authorize any of the actions set forth above in this subsection (f); or
(g) Any judgment or order for the payment of money in excess of
$10,000,000 shall be rendered against the Account Party or its properties,
or any Principal Subsidiary or its properties, and either (i) enforcement
proceedings shall have been commenced by any creditor upon such judgment or
order and shall not have been stayed or (ii) there shall be any period of
30 consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect;
or
(h) Any material provision of any Loan Document or any Related
Document shall for any reason other than the express terms thereof or the
exercise of any right or option expressly contained therein cease to be
valid and binding on the Account Party, or shall be determined to be
invalid or unenforceable by any court, governmental agency or authority
having jurisdiction over the Account Party, or the Account Party shall deny
that it has any further liability or obligation under this Agreement or any
Related Document, or any party to a Related Document shall so assert in
writing; provided, that in the case of any party other than the Account
Party making such assertion in respect of any Related Document, such
assertion shall not in and of itself constitute an Event of Default
hereunder until (i) such asserting party shall cease to perform under and
in compliance with such Related Document, (ii) the Account Party shall fail
to diligently prosecute, by appropriate action or proceedings, a rescission
of such assertion or a binding determination as to the merits thereof or
(iii) such a binding determination shall have been made in favor of such
asserting party's position; or
(i) The Security Documents shall for any reason, except to the
extent permitted by the terms thereof, fail or cease to create valid and
perfected Liens (to the extent purported to be granted by such documents
and subject to the exceptions permitted thereunder) in any of the
Collateral (other than Liens in favor of the Trustee with respect to the
interests of the Issuer under the Indenture Documents), provided, that such
failure or cessation relating to any non-material portion of such
Collateral shall not constitute an Event of Default hereunder unless the
same shall not have been corrected within 30 days after the Account Party
becomes aware thereof; or
(j) NU shall cease to own 100% of the issued and outstanding shares
of the capital stock of the Account Party having ordinary voting power for
the election of directors, free and clear of any Liens; or
(k) An event of default (as defined therein) shall have occurred
and be continuing under the Indenture Documents.
SECTION 8.02. Remedies Upon Events of Default. Upon the occurrence
and during the continuance of any Event of Default, then, and in any such
event, the Agent with the concurrence of the Issuing Bank and the Majority
Lenders may, and upon the direction of the Issuing Bank and the Majority
Lenders the Agent shall (i) if the Letter of Credit shall not have been
issued, instruct the Issuing Bank to (whereupon the Issuing Bank shall) by
notice to the Account Party declare its commitment to issue the Letter of
Credit to be terminated, whereupon the same shall forthwith terminate, (ii)
if the Letter of Credit shall have been issued, instruct the Issuing Bank
to (whereupon the Issuing Bank shall) furnish to the Trustee and the Paying
Agent, at their respective corporate trust offices as provided in the
Indenture Documents, written notice of such Event of Default in accordance
with Section 8.1(A)(4)(1) of the Indenture and of the Issuing Bank's
determination to terminate the Letter of Credit on the fifth business day
(as defined in the Indenture) following the Trustee's and Paying Agent's
receipt of such written notice, (iii) if the Letter of Credit shall have
been issued, instruct the Issuing Bank to (whereupon the Issuing Bank
shall) furnish to the Trustee and the Paying Agent written notice that the
Interest Component will not be reinstated in the amount of one or more
Interest Drawings, all as provided in the Letter of Credit; (iv) declare
the Advances and all other principal amounts outstanding hereunder, all
interest thereon and all other amounts payable hereunder to be forthwith
due and payable, whereupon the Advances and all other principal amounts
outstanding hereunder, all such interest and all such other amounts shall
become and be forthwith due and payable, without presentment, demand,
protest or further notice of any kind, all of which are hereby expressly
waived by the Account Party, and (v) instruct the Issuing Bank to
(whereupon the Issuing Bank shall) exercise all the rights and remedies
provided herein and under and in respect of the Security Documents;
provided, however, that in the event of the occurrence of any Event of
Default described in Section 8.01(f) with respect to the Account Party, (A)
the commitment of the Issuing Bank to issue the Letter of Credit and the
Commitments and the obligations of the Participating Banks to make Advances
shall automatically be terminated, and (B) the Advances and all other
principal amounts outstanding hereunder, all interest accrued and unpaid
thereon and all other amounts payable hereunder shall automatically become
due and payable, without presentment, demand, protest or any notice of any
kind, all of which are hereby expressly waived by the Account Party.
ARTICLE I
THE AGENT, THE PARTICIPATING BANKS AND THE ISSUING BANK
SECTION 9.01. Authorization of Agent; Actions of Agent and Issuing
Bank. The Issuing Bank and each Participating Bank hereby appoint and
authorize the Agent to take such action as agent on their behalf and to
exercise such powers under this Agreement as are delegated to the Agent by
the terms hereof, together with such powers as are reasonably incidental
thereto; provided, however, that neither the Agent nor the Issuing Bank
shall be required to take any action which exposes the Agent or the Issuing
Bank to personal liability or which is contrary to this Agreement or
applicable law. As to any matters not expressly provided for by any
Related Document (including, without limitation, enforcement or collection
thereof), neither the Agent nor the Issuing Bank shall be required to
exercise any discretion or take any action. The Agent agrees to deliver
promptly (i) to the Issuing Bank and each Participating Bank copies of each
notice delivered to it by the Account Party and (ii) to each Participating
Bank copies of each notice delivered to it by the Issuing Bank, in each
case pursuant to the terms of this Agreement.
SECTION 9.02. Reliance, Etc. Neither the Agent, the Issuing Bank,
nor any of their directors, officers, agents or employees shall be liable
for any action taken or omitted to be taken by it or them under or in
connection with this Agreement or any Related Document, except for its or
their own gross negligence or willful misconduct as determined by a court
of competent jurisdiction. Without limitation of the generality of the
foregoing, each of the Agent and the Issuing Bank (i) may consult with
legal counsel (including counsel for the Account Party), independent public
accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken in good faith by it in accordance
with the advice of such counsel, accountants or experts; (ii) makes no
warranty or representation to any Participating Bank and shall not be
responsible to any Participating Bank for any statements, warranties or
representations made in or in connection with this Agreement or any Related
Document; (iii) shall not have any duty to ascertain or to inquire as to
the performance or observance of any of the terms, covenants or conditions
of this Agreement or any Related Document on the part of the Account Party
to be performed or observed, or to inspect any property (including the
books and records) of the Account Party; (iv) shall not be responsible to
any Participating Bank for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any
Related Document or any other instrument or document furnished pursuant
hereto and thereto; and (v) shall incur no liability under or in respect of
this Agreement or any Related Document by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telegram, cable
or telex), including, without limitation, any thereof from time to time
purporting to be from the Trustee, believed by it to be genuine and signed
or sent by the proper party or parties.
SECTION 9.03. The Agent, the Issuing Bank and Affiliates. The Agent
and the Issuing Bank shall have the same rights and powers under this
Agreement as any other Participating Bank and may exercise (or omit from
exercising) the same as though they were not the Agent and the Issuing
Bank, respectively, and the term Participating Bank shall, unless
otherwise expressly indicated, include UBS in its individual capacity. The
Agent, the Issuing Bank and their respective Affiliates may accept deposits
from, lend money to, act as trustee under indentures of, and generally
engage in any kind of business with, the Account Party, any of its
subsidiaries and any Person who may do business with or own securities of
the Account Party or any such subsidiary, all as if UBS was not the Agent
or the Issuing Bank, and without any duty to account therefor to the
Participating Banks.
SECTION 9.04. Participating Bank Credit Decision. Each of the
Issuing Bank and each Participating Bank acknowledges that it has,
independently and without reliance upon the Agent, the Issuing Bank or any
other Participating Bank and based on the financial information referred to
in Section 6.01(f) hereof and such other documents and information as it
has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each of the Issuing Bank and each Participating Bank
also acknowledges that it will, independently and without reliance upon the
Agent, the Issuing Bank or any other Participating Bank and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under this Agreement.
SECTION 9.05. Indemnification. The Participating Banks agree to
indemnify the Agent and the Issuing Bank (to the extent not reimbursed by
the Account Party), ratably according to their respective Participation
Percentages, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against the Agent or the Issuing Bank in any way
relating to or arising out of this Agreement or any action taken or omitted
by the Agent or the Issuing Bank under this Agreement, provided that no
Participating Bank shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Agent's or the Issuing Bank's
gross negligence or willful misconduct. Without limitation of the
foregoing, each Participating Bank agrees to reimburse the Agent and the
Issuing Bank promptly upon demand for its ratable share of any amounts for
which the Agent and the Issuing Bank are entitled to reimbursement or
indemnity pursuant to Section 10.04 hereof but are not reimbursed by the
Account Party.
SECTION 9.06. Successor Agent. The Agent may resign at any time by
giving written notice thereof to the Issuing Bank, the Participating Banks
and the Account Party, with any such resignation to become effective only
upon the appointment of a successor Agent pursuant to this Section 9.06.
Upon any such resignation, the Issuing Bank shall have the right to appoint
a successor Agent, which shall be another commercial bank or trust company
reasonably acceptable to the Account Party, organized or licensed under the
laws of the United States, or of any State thereof. Upon the acceptance of
any appointment as Agent hereunder by a successor Agent and the execution
and delivery by the Account Party and the successor Agent of an agreement
relating to the fees, if any, to be paid to the successor Agent in
connection with its acting as Agent hereunder, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall
be discharged from its duties and obligations under this Agreement. After
any retiring Agent's resignation hereunder as Agent, the provisions of this
Article IX shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent under this Agreement.
SECTION 9.07. Issuing Bank. (a) All notices received by the
Issuing Bank pursuant to this Agreement or any Related Document (other than
the Letter of Credit) shall be promptly delivered to the Agent for
distribution to the Participating Banks.
(b) The Issuing Bank shall not amend or waive any provision or
consent to the amendment or waiver of any Related Document without the
written consent of the Majority Lenders.
(c) Upon receipt by the Issuing Bank from time to time of any
amount pursuant to the terms of any Related Document (other than pursuant
to the terms of this Agreement), the Issuing Bank shall promptly deliver to
the Agent such amount.
ARTICLE
MISCELLANEOUS
SECTION 10.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Pledge Agreement, nor consent to any
departure by the Account Party therefrom, shall in any event be effective
unless the same shall be in writing and signed by the Majority Lenders, and
then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided, however,
that no amendment, waiver or consent shall, unless in writing and signed by
the Issuing Bank and all the Participating Banks, do any of the following:
(a) waive, modify or eliminate any of the conditions specified in Article
V, (b) increase the Commitments of the Participating Banks that may be
maintained hereunder or subject the Participating Banks to any additional
obligations, (c) reduce the principal of, or interest on, the Advances, any
amount reimbursable on demand pursuant to Section 3.01, or any fees or
other amounts payable hereunder, (d) postpone any date fixed for any
payment of principal of, or interest on, the Advances, such reimbursable
amounts or any fees or other amounts payable hereunder (other than fees
payable to the Issuing Bank or the Agent pursuant to Section 2.03(b)
hereof), (e) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Advances, or the number of Participating
Banks which shall be required for the Participating Banks or any of them to
take any action hereunder, (f) amend this Agreement or the Pledge Agreement
in a manner intended to prefer one or more Participating Banks over any
other Participating Banks, (g) amend this Section 10.01, or (h) release any
of the Collateral otherwise than in accordance with any provisions for such
release contained in the Security Documents, or change any provision of any
Security Document providing for the release of all or substantially all of
the Collateral; and provided, further, that no amendment, waiver or consent
shall, unless in writing and signed by the Issuing Bank or the Agent in
addition to the Participating Banks required above to take such action,
affect the rights or duties of the Issuing Bank or the Agent, as the case
may be, under this Agreement or the Pledge Agreement.
SECTION 10.02. Notices, Etc. All notices and other communications
provided for hereunder and under the other Loan Documents shall be in
writing (including telegraphic, telex, telecopy or cable communication) and
mailed, telegraphed, telexed, telecopied, cabled or delivered:
(i) if to the Account Party, to it in care of Northeast
Utilities Service Company at 107 Selden Street, Berlin, Connecticut 06037
(telecopy: (203) 665-5457), Attention: Assistant Treasurer;
(ii) if to the Issuing Bank or the Agent, to it at its address
at 299 Park Avenue, New York, New York 10171-0026 Attention: Loan
Servicing Department, James Brodus (telephone: (212) 715-3227, telecopy:
(212) 715- 3891), with a copy to Christopher W. Criswell, (telephone: (212)
715-3317, telecopy: (212) 715-3878);
(iii) if to any Participating Bank, to it at its address set
forth on the signature pages hereof or in the Participation Assignment
pursuant to which it became a Participating Bank; or
as to each party other than any Participating Bank, at such other address
as shall be designated by such party in a written notice to the other
parties, and, as to any Participating Bank, at such other address as shall
be designated by such Participating Bank in a written notice to the Account
Party and the Agent. All such notices and communications shall, when
mailed, telegraphed, telexed, telecopied or cabled, be effective five days
after when deposited in the mails, or when delivered to the telegraph
company, confirmed by telex answerback, telecopied or delivered to the
cable company, respectively, except that notices and communications to the
Agent or the Issuing Bank pursuant to Article II, III or IV shall not be
effective until received by the Agent or the Issuing Bank, as the case may
be.
SECTION 10.03. No Waiver of Remedies. No failure on the part of any
Participating Bank or the Issuing Bank to exercise, and no delay in
exercising, any right hereunder or under any Loan Document shall operate as
a waiver thereof; nor shall any single or partial exercise of any such
right preclude any other or further exercise thereof or the exercise of any
other right. The remedies herein provided are cumulative and not exclusive
of any remedies provided by law.
SECTION 10.04. Costs, Expenses and Indemnification. (a) The
Account Party agrees to pay on demand all costs and expenses, if any
(including, without limitation, reasonable counsel fees and expenses
including, in the case of clause (ii) below, the reasonable allocated cost
of internal counsel), of (i) the Agent and the Issuing Bank in connection
with the preparation, negotiation, execution and delivery of the Loan
Documents and the administration of the Loan Documents, the care and
custody of any and all collateral, and any proposed modification,
amendment, or consent relating thereto; and (ii) the Agent, the Issuing
Bank and each Participating Bank in connection with the enforcement
(whether through negotiations, legal proceedings or otherwise) of this
Agreement, the Second Mortgage or any other Loan Document.
(b) The Account Party hereby agrees to indemnify and hold the
Agent, the Issuing Bank and each Participating Bank and their respective
officers, directors, employees, professional advisors and affiliates (each,
an Indemnified Person ) harmless from and against any and all claims,
damages, losses, liabilities, costs or expenses (including reasonable
attorney's fees and expenses, whether or not such Indemnified Person is
named as a party to any proceeding or investigation or is otherwise
subjected to judicial or legal process arising from any such proceeding or
investigation) which any of them may incur or which may be claimed against
any of them by any person or entity (except to the extent such claims,
damages, losses, liabilities, costs or expenses arise from the gross
negligence or willful misconduct of the Indemnified Person):
(i) by reason of or in connection with the execution, delivery
or performance of any of the Loan Documents, the Second Mortgage or the
Related Documents or any transaction contemplated thereby, or the use by
the Account Party of the proceeds of any Advance or the use by the Paying
Agent or the Trustee of the proceeds of any drawing under the Letter of
Credit;
(ii) in connection with or resulting from the utilization,
storage, disposal, treatment, generation, transportation, release or
ownership of any Hazardous Substance (A) at, upon or under any property of
the Account Party or any of its Affiliates or (B) by or on behalf of the
Account Party or any of its Affiliates at any time and in any place;
(iii) in connection with any documentary taxes, assessments
or charges made by any governmental authority by reason of the execution
and delivery of any of the Loan Documents or the Second Mortgage;
(iv) by reason of or in connection with the execution and
delivery or transfer of, or payment or failure to make payment under, the
Letter of Credit; provided, however, that the Account Party shall not be
required to indemnify the Agent, the Issuing Bank or any Participating Bank
pursuant to this Section for any claims, damages, losses, liabilities,
costs or expenses to the extent caused by (A) the Issuing Bank's willful
misconduct or gross negligence, as determined by a court of competent
jurisdiction, in determining whether documents presented under the Letter
of Credit are genuine or comply with the terms of the Letter of Credit or
(B) the Issuing Bank's willful or grossly negligent failure, as determined
by a court of competent jurisdiction, to make lawful payment under the
Letter of Credit after the presentation to it by the Paying Agent of a
draft and certificate strictly complying with the terms and conditions of
the Letter of Credit; or
(v) by reason of any inaccuracy or alleged inaccuracy in any
material respect, or any untrue statement or alleged untrue statement of
any material fact, contained in any Preliminary Official Statement or
Official Statement relating to the Bonds or any amendment or supplement
thereto, except to the extent contained in or arising from information in
any Preliminary Official Statement or Official Statement relating to the
Bonds supplied in writing by and describing the Issuing Bank.
(c) Nothing contained in this Section 10.04 is intended to limit
the Account Party's obligations set forth in Articles II, III and IV. The
Account Party's obligations under this Section 10.04 shall survive the
creation and sale of any participation interest pursuant to Section 10.06
hereof and shall survive as well the repayment of all amounts owing to the
Agent, the Issuing Bank and the Participating Banks under the Loan
Documents and the termination of the Commitments. If and to the extent
that the obligations of the Account Party under this Section 10.04 are
unenforceable for any reason, the Account Party agrees to make the maximum
contribution to the payment and satisfaction thereof which is permissible
under applicable law.
SECTION 10.05. Right of Set-off. (a) Upon (i) the occurrence and
during the continuance of any Event of Default and (ii) the taking of any
action or the giving of any instruction by the Agent as specified by
Section 8.02 hereof, the Issuing Bank and each Participating Bank are
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by the Issuing Bank or such Participating
Bank to or for the credit or the account of the Account Party against any
and all of the obligations of the Account Party now or hereafter existing
under this Agreement in favor of the Issuing Bank or such Participating
Bank, irrespective of whether or not the Issuing Bank or such Participating
Bank shall have made any demand under this Agreement and although such
obligations may be unmatured. The Issuing Bank and each Participating Bank
agrees promptly to notify the Account Party after any such set-off and
application provided that the failure to give such notice shall not affect
the validity of such set-off and application. The rights of the Issuing
Bank and each Participating Bank under this Section are in addition to
other rights and remedies (including, without limitation, other rights of
set-off) which the Issuing Bank and/or such Participating Bank may have.
(b) The Account Party agrees that it shall have no right of
off-set, deduction or counterclaim in respect of its obligations hereunder,
and that the obligations of the Issuing Bank and of the several
Participating Banks hereunder are several and not joint. Nothing contained
herein shall constitute a relinquishment or waiver of the Account Party's
rights to any independent claim that the Account Party may have against the
Issuing Bank or any Participating Bank, but no Participating Bank shall be
liable for the conduct of the Issuing Bank or any other Participating Bank,
and the Issuing Bank shall not be liable for the conduct of any
Participating Bank.
SECTION 10.06. Binding Effect; Assignments and Participants. (a)
This Agreement shall become effective when it shall have been executed and
delivered by the Account Party, the Agent, the Issuing Bank and each
Participating Bank named on the signature pages hereto and thereafter shall
be binding upon and inure to the benefit of the Account Party, the Agent,
the Issuing Bank and each Participating Bank and their respective
successors and assigns, except that the Account Party shall not have the
right to assign its rights hereunder or any interest herein nor transfer
any of its obligations without the prior written consent of the Issuing
Bank and each Participating Bank, and the Issuing Bank may not assign its
commitment to issue the Letter of Credit or its obligations under or in
respect of the Letter of Credit.
(b) Each Participating Bank may assign all or any portion of its
rights and transfer its obligations under this Agreement, under the Letter
of Credit or in any security hereunder, including, without limitation, any
instruments securing the Account Party's obligations hereunder; provided
that (i) no assignment by any Participating Bank may be made to any Person,
except with the prior written consent of (A) the Account Party (which
consent shall not be unreasonably withheld and, in the case of an
assignment to another Participating Bank or to an Affiliate of a
Participating Bank, shall not be required) and (B) the Issuing Bank, (ii)
any assignment shall be of a constant and not a varying percentage of all
of the assignor's rights and obligations hereunder and (iii) the parties to
each such assignment shall execute and deliver to the Agent a Participation
Assignment, together with a processing fee of $3,000. Upon receipt of a
completed Participation Assignment and the processing fee, the Agent will
record in a register maintained for such purpose the name of the assignee
and the percentage participation interest assigned by the assignor and
assumed by the assignee for purposes of the determination of such
assignor's and assignee's respective Participation Percentages. Upon such
execution, delivery, acceptance and recording, from and after the effective
date specified in each Participation Assignment, which effective date shall
be at least five Business Days after the execution thereof, the assignee
shall, to the extent of such assignment, become a party hereto and have all
of the rights and obligations of a Participating Bank hereunder and, to
the extent of such assignment, such assigning Participating Bank shall be
released from its obligations hereunder (without relieving such
Participating Bank from any liability for damages, costs and expenses
suffered by the Issuing Bank or the Account Party as a result of the
failure by such Participating Bank to perform its obligations hereunder).
(c) Each Participating Bank may grant participations to one or more
Persons in all or any part of, or any interest (undivided or divided) in,
such Participating Bank's rights and obligations under this Agreement (any
such Person being referred to hereinafter as a Participant and such
interests are collectively, referred to hereinafter as the Rights );
provided, however, that (i) such Participating Bank's obligations under
this Agreement shall remain unchanged; (ii) any such Participant shall be
entitled to the benefits and cost protections provided for in Section 4.03
hereof on the same basis as if it were a Participating Bank hereunder;
(iii) the Account Party, the Agent and the Issuing Bank shall continue to
deal solely and directly with such Participating Bank in connection with
such Participating Bank's rights and obligations under this Agreement; and
(iv) no such Participant, other than an Affiliate of such Participating
Bank, shall be entitled to require such Participating Bank to take or omit
to take any action hereunder, unless such action or omission would have an
effect of the type described in subsections (c), (d) or (h) of Section
10.01 hereof.
(d) Notwithstanding anything contained in this Section 10.06 to the
contrary, the Issuing Bank and any Participating Bank may assign and pledge
all or any portion of the Advances (or participating interests therein)
owing to the Issuing Bank or such Participating Bank to any Federal Reserve
Bank (and its transferees) as collateral security pursuant to Regulation A
of the Board of Governors of the Federal Reserve System and any Operating
Circular issued by such Federal Reserve Bank. No such assignment shall
release the Issuing Bank or such Participating Bank from its obligations
hereunder.
SECTION 10.07. Relation of the Parties; No Beneficiary. No term,
provision or requirement, whether express or implied, of any Loan Document,
or actions taken or to be taken by any party thereunder, shall be construed
to create a partnership, association, or joint venture between such parties
or any of them. No term or provision of the Loan Documents shall be
construed to confer a benefit upon, or grant a right or privilege to, any
Person other than the parties hereto.
SECTION 10.08. Issuing Bank Not Liable. As between the Agent, the
Issuing Bank and the Participating Banks on the one hand, and the Account
Party on the other, the Account Party assumes all risks of the acts or
omissions of the Paying Agent, the Trustee and any other beneficiary or
transferee of the Letter of Credit with respect to its use of the Letter of
Credit. Neither the Agent, the Issuing Bank, any Participating Bank, nor
any of their respective officers or directors shall be liable or
responsible for: (a) the use which may be made of the Letter of Credit or
any acts or omissions of the Paying Agent, the Trustee and any other
beneficiary or transferee in connection therewith; (b) the validity,
sufficiency or genuineness of documents, or of any endorsement thereon,
even if such documents should prove to be in any or all respects invalid,
insufficient, fraudulent or forged; (c) payment by the Issuing Bank against
presentation of documents which do not comply with the terms of the Letter
of Credit, including failure of any documents to bear any reference or
adequate reference to the Letter of Credit; or (d) any other circumstances
whatsoever in making or failing to make payment under the Letter of Credit,
except that the Account Party shall have a claim against the Issuing Bank,
and the Issuing Bank shall be liable to the Account Party, to the extent of
any direct, as opposed to consequential, damages suffered by the Account
Party which the Account Party proves were caused by (i) the Issuing Bank's
willful misconduct or gross negligence, as determined by a court of
competent jurisdiction, in determining whether documents presented under
the Letter of Credit are genuine or comply with the terms of the Letter of
Credit or (ii) the Issuing Bank's willful or grossly negligent failure, as
determined by a court of competent jurisdiction, to make lawful payment
under the Letter of Credit after the presentation to it by the Paying Agent
of a draft and certificate strictly complying with the terms and conditions
of the Letter of Credit. In furtherance and not in limitation of the
foregoing, the Issuing Bank may accept original or facsimile (including
telecopy) sight drafts and accompanying certificates presented under the
Letter of Credit that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary.
SECTION 10.09. Confidentiality. In connection with the negotiation
and administration of this Agreement and the other Loan Documents, the
Account Party has furnished and will from time to time furnish to the
Agent, the Issuing Bank and the Participating Banks (each, a Recipient )
written information which is identified to the Recipient when delivered as
confidential (such information, other than any such information which (i)
was publicly available, or otherwise known to the Recipient, at the time of
disclosure, (ii) subsequently becomes publicly available other than through
any act or omission by the Recipient or (iii) otherwise subsequently
becomes known to the Recipient other than through a Person whom the
Recipient knows to be acting in violation of his or its obligations to the
Account Party, being hereinafter referred to as Confidential Information
). The Recipient will not knowingly disclose any such Confidential
Information to any third party (other than to those Persons who have a
confidential relationship with the Recipient), and will take all reasonable
steps to restrict access to such information in a manner designed to
maintain the confidential nature of such information, in each case until
such time as the same ceases to be Confidential Information or as the
Account Party may otherwise instruct. It is understood, however, that the
foregoing will not restrict the Recipient's ability to freely exchange such
Confidential Information with prospective assignees of or participants in
the Recipient's position herein, but the Recipient's ability to so exchange
Confidential Information shall be conditioned upon any such prospective
assignee's or participant's entering into an understanding as to
confidentiality similar to this provision. It is further understood that
the foregoing will not prohibit the disclosure of any or all Confidential
Information in any litigation or proceedings between the Account Party and
such Recipient and/or if and to the extent that such disclosure may be
required (i) by a regulatory agency or otherwise in connection with an
examination of the Recipient's records by appropriate authorities, (ii)
pursuant to court order, subpoena or other legal process or (iii)
otherwise, as required by law; in the event of any required disclosure
under clause (ii) or (iii), above, the Recipient agrees to use reasonable
efforts to inform the Account Party as promptly as practicable unless the
Recipient is prohibited from doing so by court order, subpoena or other
legal process.
SECTION 10.10 Waiver of Jury Trial. The Account Party, the Agent,
the Issuing Bank, and the Participating Banks each hereby irrevocably
waives all right to trial by jury in any action, proceeding or counterclaim
arising out of or relating to this Agreement or any other Loan Document, or
any other instrument or document delivered hereunder or thereunder.
SECTION 10.11. Governing Law. This Agreement and the Pledge
Agreement shall be governed by, and construed in accordance with, the laws
of the State of New York. The Account Party, the Agent, the Issuing Bank
and each Participating Bank each (i) irrevocably submits to the
jurisdiction of any New York State court or Federal court sitting in New
York City in any action arising out of any Loan Document, (ii) agrees that
all claims in such action may be decided in such court, (iii) waives, to
the fullest extent it may effectively do so, the defense of an inconvenient
forum and (iv) consents to the service of process by mail. A final
judgment in any such action shall be conclusive and may be enforced in
other jurisdictions. Nothing herein shall affect the right of any party to
serve legal process in any manner permitted by law or affect its right to
bring any action in any other court.
SECTION 10.12. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one and the
same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of
the date first above written.
THE ACCOUNT PARTY:
WESTERN MASSACHUSETTS ELECTRIC COMPANY
By /s/ Bruce F. Garelick
Title: Assistant Treasurer
THE AGENT AND ISSUING BANK:
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH,
as Agent and as Issuing Bank
By /s/ Christopher W. Criswell
Title: Vice President
By /s/ Laura Monroe Singer
Title: Assistant Treasurer
THE PARTICIPATING BANKS:
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH
By /s/ Christopher W. Criswell
Title: Vice President
By /s/Laura Monroe Singer
Title: Assistant Treasurer
Participation Percentage: 100%
Address for Notices
Union Bank of Switzerland,
New York Branch
299 Park Avenue
New York, New York 10171- 0026
Attention: Loan Servicing
Dept., James Brodus
Telephone: (212) 715-3227
Fax: (212) 715-3891
With a Copy To:
Attention: Christopher W. Criswell
Telephone: (212) 715-3317
Fax: (212) 715-3878
SCHEDULE I
APPLICABLE LENDING OFFICES
Name of Domestic
Participating Bank Lending Office
Union Bank of Switzerland, 299 Park Avenue
New York Branch New York, NY 10022
Attn: Loan Servicing
Dept., James Brodus
Tel: (212) 715-3227
Fax: (212) 715- 3891
with a copy to:
Christopher W. Criswell
Tel: (212) 715-3317
Fax: (212) 715-3878
SCHEDULE II
PENDING ACTIONS
NONE
[Form of Letter of Credit - CDA/WMECO SERIES A]
EXHIBIT 1.01A
IRREVOCABLE LETTER OF CREDIT
NO. SBY502182
September 22, 1993
Shawmut Bank Connecticut, National Association
777 Main Street
Hartford, Connecticut 06115
Attention: Corporate Trust Department
Dear Sir or Madam:
We hereby establish, at the request and for the account of Western
Massachusetts Electric Company (the "Account Party"), in your favor, as
Paying Agent (the "Paying Agent") under that certain Indenture of Trust,
dated as of September 1, 1993 (the "Indenture"), by and between the
Connecticut Development Authority (the "Issuer") and Shawmut Bank
Connecticut, National Association, as trustee (the "Trustee"), pursuant to
which $53,800,000 in aggregate principal amount of the Issuer's Pollution
Control Revenue Refunding Bonds (Western Massachusetts Electric Company
Project - 1993A Series) (the "Bonds"), are being issued, our Irrevocable
Letter of Credit No. SBY502182, in the amount of US$54,596,000.00 (FIFTY-
FOUR MILLION FIVE HUNDRED NINETY-SIX THOUSAND AND NO ONE-HUNDREDTHS UNITED
STATES DOLLARS) (subject to reduction and reinstatement as provided below).
(1) Credit Termination Date. This Letter of Credit shall expire on
the earliest to occur of (i) September 22, 1996 (the "Stated Termination
Date"), (ii) the date upon which we honor a draft accompanying a written
and completed certificate signed by you in substantially the form of
Exhibit 2 attached hereto, and stating therein that such draft is the final
draft to be drawn under this Letter of Credit and that, upon the honoring
of such draft, this Letter of Credit will expire in accordance with its
terms, (iii) the date upon which we receive a written certificate signed by
you and stating therein that no Bonds entitled to the benefits of this
Letter of Credit (as determined in accordance with the Indenture)
("Eligible Bonds") are "Outstanding" under (and as defined in) the
Indenture, (iv) the fifth business day following receipt by you and the
Trustee of written notice from us that an Event of Default (as defined
below) has occurred under the Reimbursement Agreement (as defined below)
and of our determination to terminate this Letter of Credit on such fifth
business day and (v) the date upon which we receive a written certificate
signed by you and stating therein that a substitute or replacement Credit
Facility (as defined in the Indenture) has been provided pursuant to
Section 3.12 of the "Agreement" referred to (and as defined) in the
Indenture (such earliest date being the "Credit Termination Date").
As used herein, the term "business day" shall mean any day of the year
(i) that is not a Saturday or Sunday, (ii) that is a day on which banks
located in Hartford, Connecticut and New York, New York are not required or
authorized to remain closed and (iii) that is a day on which banking
institutions in all of the cities in which the principal offices of the
Trustee, the Paying Agent and the Remarketing Agent (as defined in the
Indenture) are located are not required or authorized to remain closed and
(iv) that is a day on which the New York Stock Exchange, Inc. is not
closed.
As used herein "Reimbursement Agreement" shall mean the Letter of
Credit and Reimbursement Agreement, dated as of September 1, 1993, between
the Account Party, us and certain Participating Banks referred to therein,
and the term "Event of Default" shall mean an "Event of Default" as that
term is defined in the Reimbursement Agreement.
(2) Principal, Interest and Premium Components. The aggregate amount
which may be drawn under this Letter of Credit, subject to reductions in
amount and reinstatement as provided below, is US$54,596,000.00 (FIFTY-FOUR
MILLION FIVE HUNDRED NINETY-SIX THOUSAND AND NO ONE-HUNDREDTHS UNITED
STATES DOLLARS), of which the aggregate amounts set forth below may be
drawn as indicated.
(i) An aggregate amount not exceeding US$53,800,000.00 (FIFTY-
THREE MILLION EIGHT HUNDRED THOUSAND AND NO ONE-HUNDREDTHS UNITED
STATES DOLLARS), as such amount may be reduced and reinstated as
provided below, may be drawn in respect of payment of principal
(whether upon scheduled or accelerated maturity, or upon redemption)
of Eligible Bonds or the portion of the purchase price of Eligible
Bonds corresponding to principal (the "Principal Component").
(ii) An aggregate amount not exceeding US$796,000.00 (SEVEN
HUNDRED NINETY-SIX THOUSAND AND NO ONE-HUNDREDTHS UNITED STATES
DOLLARS), as such amount may be reduced and reinstated as provided
below, may be drawn in respect of payment of (A) accrued and unpaid
interest on Eligible Bonds not in the Flexible Mode (as defined in the
Indenture) or that portion of the redemption price or purchase price
of such Eligible Bonds corresponding to accrued and unpaid interest,
but not more than an amount equal to accrued and unpaid interest on
such Eligible Bonds for up to a maximum of 45 days immediately
preceding the date of such drawing and (B) unpaid interest (whether
accrued or to accrue) on Eligible Bonds in the Flexible Mode or that
portion of the redemption price or purchase price of such Eligible
Bonds corresponding to such interest, but not more than an amount
equal to such interest on such Eligible Bonds for up to a maximum of
45 days immediately preceding the next Purchase Date (as defined in
the Indenture) for each such Eligible Bond (or, if interest on any
such Eligible Bond was not paid on the most recent Purchase Date for
such Bond, for up to a maximum of 45 days immediately preceding the
date of such drawing), calculated, in each case referred to in the
foregoing clause (A) or clause (B) at a maximum rate of twelve percent
(12%) per annum, or such lesser rate of interest as shall equal the
Maximum Interest Rate (as defined in the Indenture) in effect under
the Indenture with respect to such Eligible Bonds, and in any case
calculated on the basis of a year of 365 or 366 days (as applicable)
for the actual days elapsed (the "Interest Component").
(iii) An aggregate amount not exceeding US$0.00 (ZERO UNITED
STATES DOLLARS) may be drawn in respect of premium on Eligible Bonds
(the "Premium Component"). If, subsequent to the date hereof, the
Premium Component shall be increased by us at the request of the
Account Party, the Premium Component shall be subject to reduction as
provided below, and amounts drawn in respect thereof shall not be
subject to reinstatement.
(3) Drawings. Funds under this Letter of Credit are available to you
against (i) your draft, stating on its face: "Drawn under Irrevocable
Letter of Credit No. SBY502182, dated September 22, 1993", and (ii) the
appropriate certificate specified below, purportedly executed by you and
appropriately completed.
Exhibit Setting Forth
Type of Drawing Form of Certificate Required
Tender Drawing Exhibit 1
(as hereinafter defined)
Redemption/Mandatory Exhibit 2
Purchase Drawing
(as hereinafter defined)
Interest Drawing Exhibit 3
(as hereinafter
defined)
Drafts and certificates hereunder shall be dated the date of
presentation and shall be presented at our office located at 299 Park
Avenue, New York, New York 10171-0026 Attention: Loan Servicing
Department, James Brodus (telephone: (212) 715-3227) (or at such other
office as we may designate by written notice to you) with a copy to
Christopher W. Criswell (telephone: (212) 715-3317), FAX: (212) 715-3878).
Presentation of such drafts and certificates may be made (a) by physical
presentation of such drafts and certificates or (b) by facsimile
transmission of such drafts and certificates received by us at (212) 715-
3891 (or at such other number as we may designate by written notice to you)
with prior telephone notice to us at (212) 715-3227, Attention: James
Brodus, (or at such other number as we may designate by written notice to
you; in any event with a copy to Christopher W. Criswell as aforesaid) that
such presentation is to be made by facsimile transmission and with the
original executed drafts and certificates to be received by us not later
than our close of business on the next business day, it being understood
that payments hereunder shall be made upon receipt by us of such facsimile
transmission; provided, however, that presentations of drafts and
certificates relating to Tender Drawings in respect of Eligible Bonds in
the Flexible Mode shall in all instances be made in accordance with the
foregoing clause (b). Drafts drawn under and in strict compliance with the
terms of this Letter of Credit will be duly honored by us upon presentation
thereof in accordance with this Paragraph 3 if presented on or prior to
4:00 P.M. (New York City time) on the Credit Termination Date as follows:
(i) Tender Drawings; Flexible Mode. In the case of drafts and
certificates relating to Tender Drawings in respect of Eligible Bonds
in the Flexible Mode presented in accordance with the foregoing clause
(b):
(A) if such drafts and certificates are presented as
aforesaid at or prior to 1:30 P.M. (New York City time) on a
business day, and provided that such drafts and certificates
strictly conform to the requirements of this Letter of Credit, we
will initiate a wire transfer of the amount so drawn to your
account indicated below at or prior to 3:30 P.M. (New York City
time) on the same business day;
(B) if such drafts and certificates are presented as
aforesaid after 1:30 P.M. but at or prior to 4:00 P.M. (New York
City time) on a business day, and provided that such drafts and
certificates strictly conform to the requirements of this Letter
of Credit, we will initiate a wire transfer of the amount so
drawn to your account indicated below at or prior to 10:00 A.M.
on the business day next succeeding the business day on which
such drafts and certificates were presented (notwithstanding that
such day of presentation may have been the Credit Termination
Date); and
(C) if such drafts and certificates are presented as
aforesaid after 4:00 P.M. (New York City time) on a business day,
and provided that such drafts and certificates strictly conform
to the requirements of this Letter of Credit, we will initiate a
wire transfer of the amount so drawn to your account indicated
below at or prior to 1:00 P.M. (New York City time) on the
business day next succeeding the business day on which such
drafts and certificates were presented (notwithstanding that such
day of presentation may have been the Credit Termination Date);
and
(ii) All Other Drawings: In the case of any other drafts and
certificates:
(A) if such drafts and certificates are presented as
aforesaid at or prior to 4:00 P.M. (New York City time) on a
business day, and provided that such drafts strictly conform to
the requirements of this Letter of Credit, we will initiate a
wire transfer of the amount so drawn to your account indicated
below at or prior to 10:00 A.M. (New York City time) on the
business day next succeeding the business day on which such
drafts and certificates were presented (notwithstanding that such
day of presentation may have been the Credit Termination Date);
and
(B) if such drafts and certificates are presented as
aforesaid after 4:00 P.M. (New York City time) on a business day,
and provided that such drafts and certificates strictly conform
to the requirements of this Letter of Credit, we will initiate a
wire transfer of the amount so drawn to your account indicated
below at or prior to 1:00 P.M. (New York City time) on the
business day next succeeding the business day on which such
drafts and certificates were presented (notwithstanding that such
day of presentation may have been the Credit Termination Date).
Wire transfers of funds paid in respect of any drawing hereunder shall be
made to you at Shawmut Bank Connecticut, National Association, Hartford,
Connecticut, ABA# 011900445, Account No. 0067548290 Corporate Trust Admin.
Wire Account, Attention: K. Larimore, Reference: CDA/WMECO Series 1993A, or
to such other account as you may from time to time specify to us in
writing. All payments made by us under this Letter of Credit will be made
with our own funds and not with any funds of the Account Party or the
Issuer.
(4) Reductions. The Interest Component shall be reduced immediately
following our honoring any draft drawn hereunder to pay unpaid interest on
Eligible Bonds or to pay that portion of the purchase price or redemption
price corresponding to unpaid interest on Eligible Bonds, in each case by
an amount equal to the amount of such draft (any such drawing being an
"Interest Drawing"). The Principal Component shall be reduced immediately
following our honoring any draft drawn hereunder: (i) pursuant to Section
5.8(B) of the Indenture to pay that portion of purchase price corresponding
to principal of Eligible Bonds that are (A) subject to mandatory tender for
purchase pursuant to Section 2.3(G)(1)(c) or 2.3(G)(2)(d)(ii) of the
Indenture or (B) tendered for purchase by the holders thereof pursuant to
2.3(G)(2)(c) of the Indenture, (ii) pursuant to Section 5.8(C) of the
Indenture to pay that portion of purchase price corresponding to principal
of Eligible Bonds that are the subject of a failed conversion pursuant to
Section 2.3(G)(1)(b) or 2.3(G)(2)(b) of the Indenture, as appropriate (any
such drawing in respect of the circumstances referred to in the foregoing
clause (i) or this clause (ii) being a "Tender Drawing"), (iii) pursuant to
Section 5.8(A) of the Indenture to pay the principal of Eligible Bonds or
that portion of the redemption price of Eligible Bonds corresponding to
principal, whether at stated maturity, upon acceleration or upon
redemption, or (iv) pursuant to Section 5.8(B) of the Indenture to pay that
portion of the purchase price corresponding to principal of Eligible Bonds
that are subject to mandatory tender for purchase pursuant to Section
2.3(G)(2)(d)(i) of the Indenture (any such drawing in respect of the
circumstances referred to in the foregoing clause (iii) or in this clause
(iv) being a "Redemption/Mandatory Purchase Drawing"), in each such case by
an amount equal to the amount of such draft. The Premium Component shall
be reduced immediately following our honoring any draft drawn hereunder to
pay premium on Eligible Bonds in connection with a Redemption/Mandatory
Purchase Drawing, by an amount equal to the amount of such draft.
Additionally, upon receipt of a Notice of Reduction in the form
of Exhibit 4 to this Letter of Credit purportedly executed by you, we will
reduce the Principal Component, Interest Component and Premium Component to
the amounts therein stated.
(5) Reinstatement. The Interest Component and the Principal
Component shall, from time to time, be reinstated by us in accordance with,
and only to the extent provided in, the following subparagraphs (i) and
(ii). In no event shall reductions in the Premium Component be reinstated.
(i) Interest Component. Reductions in the Interest Component
resulting from Interest Drawings shall be reinstated as follows:
(A) Immediately following each drawing hereunder to pay
unpaid interest on Eligible Bonds in the Flexible Mode or to pay
that portion of purchase price, but not redemption price,
corresponding to unpaid interest on Eligible Bonds in the
Flexible Mode, the amount so drawn shall be automatically
reinstated to the Interest Component unless, not later than the
business day preceding such drawing you shall have received
written notice from us that we will not reinstate the Interest
Component in the amount of such drawing. On the fifth day
following each drawing hereunder to pay accrued and unpaid
interest on Eligible Bonds that are not in the Flexible Mode, or
to pay that portion of purchase price, but not redemption price,
corresponding to accrued and unpaid interest on Eligible Bonds
that are not in the Flexible Mode, the amount so drawn shall be
automatically reinstated to the Interest Component, unless you
shall have theretofore received written notice from us that we
will not reinstate the Interest Component in the amount of such
drawing. Any notice of non-reinstatement delivered pursuant to
this subparagraph (i)(A) shall be in writing and shall be
delivered to you by hand delivery or facsimile transmission.
(B) If, subsequent to any such delivery of a notice of non-
reinstatement as aforesaid, we shall deliver to you, by hand
delivery or facsimile transmission, a Notice of Reinstatement in
the form of Exhibit 5 hereto, then, upon such delivery to you,
the Interest Component shall be immediately reinstated to the
extent specified in such Notice of Reinstatement.
(C) In no event shall the Interest Component be reinstated
to an amount in excess of 45 days' interest on Eligible Bonds,
computed at the rate of 12% per annum on the basis of a year of
365 or 366 days (as applicable) for the actual days elapsed, or
such lesser rate of interest as shall equal the Maximum Interest
Rate (as defined in the Indenture) in effect under the Indenture
with respect to such Eligible Bonds.
(ii) Principal Component. Reductions in the Principal Component
resulting from Redemption/Mandatory Purchase Drawings shall in no
event be reinstated. Reductions in the Principal Component resulting
from Tender Drawings shall be reinstated as follows:
(A) Immediately upon receipt by us of proceeds from the
remarketing of Pledged Bonds (as defined in the Indenture), or of
written notice from you that you have received such proceeds (or
a window receipt guaranteeing same day payment in immediately
available funds of such proceeds as contemplated by Section
9.19(A) of the Indenture), the Principal Component shall be
reinstated automatically by the amount of such proceeds.
(B) Immediately upon your receipt from us, by hand delivery
or facsimile transmission, of a Notice of Reinstatement in the
form of Exhibit 5 hereto, the Principal Component shall be
immediately reinstated to the extent specified in such Notice of
Reinstatement.
(C) In no event shall the Principal Component be reinstated
to an amount in excess of the aggregate principal amount of
Eligible Bonds then outstanding under the Indenture.
Any Notice of Reinstatement delivered to you in the form set forth in
Exhibit 5 hereto, whether delivered pursuant to subparagraph (i) or
subparagraph (ii), above, may be combined, in a single such Notice, with
any other Notice of Reinstatement delivered pursuant to the other such
subparagraph.
(6) Notices. Communications (other than drawings) with respect to
this Letter of Credit shall be in writing and shall be addressed to us at
299 Park Avenue, New York, New York 10171-0026, Attention: Loan Servicing
Department, James Brodus (telephone: (212) 715-3227, telecopy: (212) 715-
3891), with a copy to Christopher W. Criswell, (telephone: (212) 715-3317,
telecopy: (212) 715-3878), (or at such other office as we may designate by
written notice to you), specifically referring to the number of this Letter
of Credit.
(7) Transfer. This Letter of Credit is transferable in its entirety
(but not in part) to any transferee who has succeeded you as Paying Agent
under the Indenture and may be successively so transferred. Transfer of
the available balance under this Letter of Credit to such transferee shall
be effected by the presentation to us of this Letter of Credit accompanied
by a certificate substantially in form set forth in Exhibit 6.
(8) Governing Law, Etc. Except as otherwise provided herein, this
Letter of Credit shall be governed by and construed in accordance with the
Uniform Customs and Practices for Documentary Credits (1983 Revision)
Publication No. 400 of the International Chamber of Commerce ("UCP") and,
to the extent not inconsistent with the UCP, the laws of the State of New
York, including the Uniform Commercial Code as in effect in the State of
New York. This Letter of Credit sets forth in full our undertaking, and,
except as expressly set forth herein, such undertaking shall not in any way
be modified, amended, amplified or limited by reference to any document,
instrument or agreement referred to herein (including, without limitation,
the Bonds, the Indenture and the Reimbursement Agreement), except only the
certificates and the drafts referred to herein; and any such reference
shall not be deemed to incorporate herein by reference any document,
instrument or agreement except for such certificates and such drafts.
Whenever and wherever the terms of this Letter of Credit shall refer to the
purpose of a draft hereunder, or the provisions of any agreement or
document pursuant to which such draft may be presented hereunder, such
purpose or provisions shall be conclusively determined by reference to the
certificate accompanying such draft; in furtherance of this sentence,
whether any drawing is in respect of payment of regularly scheduled
interest on the Bonds or of principal of or interest on the Bonds upon
scheduled or accelerated maturity or is a Tender Drawing or a
Redemption/Mandatory Purchase Drawing shall be conclusively determined by
reference to the certificate accompanying such drawing.
Very truly yours,
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH
By _________________________________
Title:
By _________________________________
Title:
EXHIBIT 1
TO THE LETTER OF CREDIT
CERTIFICATE FOR TENDER DRAWING
The undersigned, a duly authorized officer of _______________________,
(the "Paying Agent"), hereby certifies as follows to UNION BANK OF
SWITZERLAND, NEW YORK BRANCH (the "Bank"), with reference to Irrevocable
Letter of Credit No. SBY502182 (the "Letter of Credit") issued by the Bank
in favor of the Paying Agent. Terms defined in the Letter of Credit and
used but not defined herein shall have the meanings given them in the
Letter of Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for the
holders of the Bonds.
(2) The Paying Agent is making a Tender Drawing under the Letter of
Credit in the amount of $_________ pursuant to Section 5.8 of the Indenture
to pay that portion of the purchase price corresponding to principal of
Eligible Bonds that are
[subject to mandatory tender for purchase pursuant to Section
[2.3(G)(1)(c)] [2.3(G)(2)(d)(ii)] of the Indenture.]
[tendered for purchase by the holders thereof pursuant to Section
2.3(G)(2)(c) of the Indenture.]
[the subject of a failed conversion pursuant to Section
2.3(G)(1)(b) or 2.3(G)(2)(b) of the Indenture.]
(3) The amount of purchase price corresponding to principal of
Eligible Bonds and with respect to the payment of which the Paying Agent,
pursuant to the foregoing Sections of the Indenture, is drawing under the
Letter of Credit, is as follows, and the amount of the draft accompanying
this Certificate does not exceed such amount:
Principal: $ _________________________________
(4) The amount of the draft accompanying this Certificate being drawn
in respect of purchase price corresponding to principal of Eligible Bonds,
as indicated in paragraph (3), above, does not exceed the Principal
Component of the Letter of Credit. The amount of the draft accompanying
this Certificate in respect of purchase price corresponding to principal of
such Bonds has been computed in accordance with the terms and conditions of
such Eligible Bonds and the Indenture.
(5) No proceeds of this drawing will be applied to the payment of
purchase price of any Bonds that are not Eligible Bonds, including any
Pledged Bonds (as defined in the Indenture), any Borrower Bonds (as defined
in the Indenture) and any Bonds in the Fixed Rate Mode (as defined in the
Indenture).
[(6) The Eligible Bonds in respect of which this drawing is being made
are Eligible Bonds in the Flexible Mode, and payment of this drawing shall
be made in accordance with Paragraph 3(i) of the Letter of Credit.]
[(6) The Eligible Bonds in respect of which this drawing is being made
are not Eligible Bonds in the Flexible Mode, and payment of this drawing
shall be made in accordance with Paragraph 3(ii) of the Letter of Credit].
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this
Certificate as of the ____ day of _____________________, 19__.
[NAME OF PAYING AGENT],
as Paying Agent
By _________________________________
Title:
EXHIBIT 2
TO THE LETTER OF CREDIT
CERTIFICATE FOR REDEMPTION/
MANDATORY PURCHASE DRAWING
The undersigned, a duly authorized officer of ____________________,
(the "Paying Agent"), hereby certifies as follows to UNION BANK OF
SWITZERLAND, NEW YORK BRANCH (the "Bank"), with reference to Irrevocable
Letter of Credit No. SBY502182 (the "Letter of Credit") issued by the Bank
in favor of the Paying Agent. Terms defined in the Letter of Credit and
used but not defined herein shall have the meanings given them in the
Letter of Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for the
holders of the Bonds.
(2) The Paying Agent is making a Redemption/Mandatory Purchase
Drawing under the Letter of Credit in the amount of $______________
[pursuant to Section 5.8(A) and Section 8.5 of the Indenture to
pay the principal of Eligible Bonds due pursuant to the Indenture
upon maturity or as a result of acceleration of such Eligible
Bonds in accordance with the Indenture and the terms of such
Eligible Bonds.]
[pursuant to Section 5.8(A) of the Indenture to pay that portion
of the redemption price corresponding to principal of [and
premium on] Eligible Bonds due pursuant to the Indenture upon
redemption of such Eligible Bonds in accordance with the
Indenture and the terms of such Eligible Bonds.]
[pursuant to Section 5.8(B) of the Indenture to pay that portion
of the purchase price of Eligible Bonds corresponding to
principal that are subject to mandatory tender for purchase
pursuant to Section 2.3(G)(2)(d)(i) of the Indenture.]
(3) The amount of [principal of] [redemption price corresponding to
principal of] [and premium on] [purchase price corresponding to principal
of] Eligible Bonds which is due and payable and with respect to the payment
of which the Paying Agent, pursuant to the foregoing Section[s] of the
Indenture, is to draw under the Letter of Credit is as follows, and the
amount of the draft accompanying this Certificate does not exceed such
amount:
Principal: $____________________
[Premium: $____________________
(4) The amount of the draft accompanying this Certificate being drawn
in respect of payment of [principal] [redemption price corresponding to
principal] [purchase price corresponding to principal] of Eligible Bonds,
as indicated in paragraph (3), above, does not exceed the Principal
Component of the Letter of Credit. [The amount of the draft accompanying
this Certificate being drawn in respect of that portion of the redemption
price of Eligible Bonds corresponding to premium, as indicated in paragraph
(3), above, does not exceed the Premium Component of the Letter of Credit.]
The amount of the draft accompanying this Certificate in respect of payment
of [principal] [redemption price corresponding to principal] [and premium]
[purchase price corresponding to principal] of such Eligible Bonds has been
computed in accordance with the terms and conditions of such Eligible Bonds
and the Indenture.
(5) No proceeds of this drawing will be applied to the payment of
principal, redemption price (including premium, if any) or purchase price
of any Bonds that are not Eligible Bonds, including any Pledged Bonds (as
defined in the Indenture), any Borrower Bonds (as defined in the
Indenture), and any Bonds in the Fixed Rate Mode (as defined in the
Indenture).
(6) Payment of this drawing shall be made in accordance with
Paragraph 3(ii) of the Letter of Credit.
[(7) The draft accompanying this Certificate is the final draft to be
drawn under the Letter of Credit, and, upon the honoring of such draft, the
Letter of Credit will expire in accordance with its terms.]
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this
Certificate as of the____ day of _____________________, 19__.
[NAME OF PAYING AGENT],
as Paying Agent
By _________________________________
Title:
EXHIBIT 3
TO THE LETTER OF CREDIT
CERTIFICATE FOR INTEREST DRAWING
The undersigned, a duly authorized officer of ____________________,
(the "Paying Agent"), hereby certifies as follows to UNION BANK OF
SWITZERLAND, NEW YORK BRANCH (the "Bank"), with reference to Irrevocable
Letter of Credit No. SBY502182 (the "Letter of Credit") issued by the Bank
in favor of the Paying Agent. Terms defined in the Letter of Credit and
used but not defined herein shall have the meanings given them in the
Letter of Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for the
holders of the Bonds.
(2) The Paying Agent is making a drawing under the Letter of Credit
in the amount of $____________________ with respect to [the payment of
interest] [the payment of the portion of redemption price corresponding to
interest] [the payment of the portion of purchase price corresponding to
interest] on Eligible Bonds in accordance with the Indenture.
(3) The amount of [interest] [redemption price corresponding to
interest] [purchase price corresponding to interest] on Eligible Bonds that
is due and owing is as follows, and the amount of the draft accompanying
this Certificate does not exceed such amount:
Interest: ____________________
(4) The amount of the draft accompanying this Certificate being drawn
in respect of payment of [interest] [redemption price corresponding to
interest] [purchase price corresponding to interest] on Eligible Bonds, as
indicated in paragraph (3), above, does not exceed the Interest Component
of the Letter of Credit. The amount of the draft accompanying this
Certificate in respect of payment of [interest] [redemption price
corresponding to interest] [purchase price corresponding to interest] on
Eligible Bonds has been computed in accordance with the terms and
conditions of such Eligible Bonds and the Indenture.
(5) Payment of this drawing shall be made in accordance with
Paragraph 3(ii) of the Letter of Credit.
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this
Certificate as of the ____ day of _____________________, 19__.
[NAME OF PAYING AGENT],
as Paying Agent
By _________________________________
Title:
EXHIBIT 4
TO THE LETTER OF CREDIT
NOTICE OF REDUCTION
The undersigned, a duly authorized officer of _____________________,
(the "Paying Agent"), hereby certifies as follows to UNION BANK OF
SWITZERLAND, NEW YORK BRANCH (the "Bank"), with reference to Irrevocable
Letter of Credit No. SBY502182 (the "Letter of Credit") issued by the Bank
in favor of the Paying Agent. Terms defined in the Letter of Credit and
used but not defined herein shall have the meanings given them in the
Letter of Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for
the holders of the Bonds.
(2) As of the date hereof, the aggregate principal amount of
Eligible Bonds (including for this purpose all Pledged Bonds and all
Borrower Bonds) outstanding is
Principal: $ ____________________
(3) You are hereby directed to reduce the [Principal] [Premium]
[and] [Interest] Components of the Letter of Credit as follows:
[The Principal Component of the Letter of Credit is reduced
to $____________________.]
[The Premium Component of the Letter of Credit is reduced to
$____________________.]
[The Interest Component of the Letter of Credit is reduced
to $____________________.]
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this
Certificate as of the____ day of _____________________, 19__.
[NAME OF PAYING AGENT],
as Paying Agent
By _________________________________
Title:
EXHIBIT 5
TO THE LETTER OF CREDIT
NOTICE OF REINSTATEMENT
The undersigned, a duly authorized officer of UNION BANK OF SWITZERLAND,
NEW YORK BRANCH (the "Bank"), hereby gives the following notice to
_________________, as paying agent (the "Paying Agent"), with reference to
Irrevocable Letter of Credit No. SBY502182 (the "Letter of Credit") issued
by the Bank in favor of the Paying Agent. Terms defined in the Letter of
Credit and used but not defined herein have the meanings given them in the
Letter of Credit.
The Bank hereby notifies you that:
[1.] [Pursuant to Paragraph 5(i)(B) of the Letter of Credit and Section
2.04(b)(ii) of the Reimbursement Agreement, the Interest Component has
been reinstated by $________________.]
[2.] [Pursuant to Paragraph 5(ii)(B) of the Letter of Credit and Section
2.04(c) of the Reimbursement Agreement, the Principal Component has
been reinstated by $_________________.]
IN WITNESS WHEREOF, the Bank has executed and delivered this Notice of
Reinstatement as of the ____ day of _____________________, 19__.
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH
By _________________________________
Title:
EXHIBIT 6
TO THE LETTER OF CREDIT
INSTRUCTIONS TO TRANSFER
____________________, 19__
Re: Irrevocable Letter of Credit No. SBY502182
Gentlemen:
The undersigned, as Paying Agent under that certain Indenture of
Trust, dated as of September 1, 1993 (the "Indenture"), by and between the
Connecticut Development Authority (the "Issuer") and Shawmut Bank
Connecticut, National Association, as Trustee, is named as beneficiary in
the Letter of Credit referred to above (the "Letter of Credit"). The
Transferee named below has succeeded the undersigned as Paying Agent under
such Indenture.
_________________________________
(Name of Transferee)
_________________________________
(Address)
Therefore, for value received, the undersigned hereby irrevocably
instructs you to transfer to such Transferee all rights of the undersigned
to draw under the Letter of Credit.
Such Transferee shall hereafter have the sole rights as beneficiary
under the Letter of Credit; provided, however, that no rights shall be
deemed to have been transferred to such Transferee until such transfer
complies with the requirements of the Letter of Credit pertaining to
transfers.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Certificate as of the ____ day of _____________________, 19__.
[NAME OF RETIRING PAYING AGENT],
as Paying Agent
By _________________________________
Title:
The undersigned, [Name of Transferee], hereby accepts the
foregoing transfer of rights under the Letter of Credit.
[Name of Transferee]
By _________________________________
Title:
Address of Principal
Corporate Trust Office:
[insert address]
EXHIBIT 1.01B
Form of
PARTICIPATION ASSIGNMENT
Dated _________________, 19__
Reference is made to the Letter of Credit and Reimbursement Agreement,
dated as of September 1, 1993 (said Agreement, as it may hereafter be
amended or otherwise modified from time to time, being the "Agreement";
unless otherwise defined herein terms defined in the Agreement are used
herein with the same meaning), among Western Massachusetts Electric Company
(the "Account Party"), Union Bank of Switzerland, New York Branch ("UBS"),
as Issuing Bank, the Participating Banks named therein and from time to
time parties thereto, and UBS, as Agent. Pursuant to the Agreement,
______________ (the "Assignor") has purchased a participation from the
Issuing Bank in and to the Letter of Credit and each payment thereunder and
demand loan made by the Issuing Bank and has committed to make Advances to
the Account Party.
The Assignor and ________________ (the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns, without recourse, to the
Assignee, and the Assignee hereby purchases and assumes from the Assignor,
without recourse to the Assignor that portion set forth in Section 1(c) of
Schedule 1 hereto (the "Assigned Interest") of the Assignor's rights and
obligations under the Agreement and the Pledge Agreement, including,
without limitation, the participation purchased by the Assignor pursuant to
Section 3.07 of the Agreement in respect of unreimbursed amounts and demand
loans owing from time to time to the Issuing Bank, the Commitment of the
Assignor to make Advances and the Advances outstanding on the Effective
Date (as hereinafter defined). Such Assigned Interest represents the
percentage interest specified in Section 2(b) of Schedule 1 of all
outstanding rights and obligations of the Participating Banks under the
Agreement, and, after giving effect to such sale and assignment, the
Assignee's and Assignor's Participation Percentages will be as set forth in
Sections 2(b) and 2(c), respectively, of Schedule 1. The effective date of
this sale and assignment shall be the date specified in Section 3 of
Schedule 1 (the "Effective Date").
2. On the Effective Date, the Assignee will pay to the Assignor, in
same day funds, at such address and account as the Assignor shall advise
the Assignee, an amount equal to (1) the aggregate amount of unreimbursed
letter of credit payments, demand loans and Advances outstanding (as set
forth in Section 1 of Schedule 1) times (2) the Assigned Interest. From
and after the Effective Date, the Assignor agrees that the Assignee shall
be entitled to all rights, powers and privileges of the Assignor under the
Agreement and the Pledge Agreement to the extent of the Assigned Interest,
including without limitation (i) the right to receive all payments in
respect of the Assigned Interest for the period from and after the
Effective Date, whether on account of reimbursements, principal, interest,
fees, indemnities in respect of claims arising after the Effective Date,
increased costs, additional amounts or otherwise; (ii) the right to vote
and to instruct the Agent and the Issuing Bank under the Agreement based on
the Assigned Interest; (iii) the right to set-off and to appropriate and
apply deposits of the Account Party as set forth in the Agreement; and (iv)
the right to receive notices, requests, demands and other communications.
The Assignor agrees that it will promptly remit to the Assignee any amount
received by it in respect of the Assigned Interest (whether from the
Account Party, the Agent or otherwise) in the same funds in which such
amount is received by the Assignor.
3. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to
any statements, warranties or representations made in or in connection with
the Agreement or the Related Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the
Agreement, the Related Documents or any other instrument or document
furnished pursuant thereto; and (iii) makes no representation or warranty
and assumes no responsibility with respect to the financial condition of
the Account Party or the performance or observance by the Account Party of
any of its obligations under the Agreement, the Related Documents or any
other instrument or document furnished pursuant thereto.
4. The Assignee (i) confirms that it has received a copy of the
Agreement, together with copies of the financial statements referred to in
Section 6.01(f) thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter
into this Assignment; (ii) agrees that it will, independently and without
reliance upon the Agent, the Issuing Bank, the Assignor or any other
Participating Bank and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Agreement and the Related Documents;
(iii) appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers under the Agreement and the Pledge
Agreement as are delegated to the Agent by the terms thereof, together with
such powers as are reasonably incidental thereto; (iv) agrees that it will
perform in accordance with its terms all of the obligations which by the
terms of the Agreement are required to be performed by it as a
Participating Bank and (v) confirms that it has paid the processing fee
referred to in subsection 10.06(b) of the Agreement.
5. Following the execution of this Assignment, it will be delivered
to the Agent for acceptance and recording by the Agent. Upon such
acceptance and recording and receipt of the consent of the Issuing Bank
required pursuant to Section 10.06(b) of the Agreement (which shall be
evidenced by the Issuing Bank's execution of this Assignment on the
appropriate space on Schedule 1), as of the Effective Date, (i) the
Assignee shall be a party to the Agreement and, to the extent provided in
this Assignment, have the rights and obligations of a Participating Bank
thereunder and under the Pledge Agreement and (ii) the Assignor shall, to
the extent provided in this Assignment, relinquish its rights and be
released from its obligations under the Agreement and the Pledge Agreement.
6. Upon such acceptance, recording and consent, from and after the
Effective Date, the Agent shall make all payments under the Agreement in
respect of the interest assigned hereby (including, without limitation, all
payments of principal, interest and fees with respect thereto) to the
Assignee at its address set forth on Schedule 1 hereto. The Assignor and
Assignee shall make all appropriate adjustments in payments under the
Agreement for periods prior to the Effective Date directly between
themselves.
7. This Assignment shall be governed by, and construed in accordance
with, the laws of the State of New York.
8. This Assignment may be executed in counterparts by the parties
hereto, each of which counterpart when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the
same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment to
be executed by their respective officers thereunto duly authorized, as of
the date first above written, such execution being made on Schedule 1
hereto.
Schedule 1
to
Participation Assignment
Dated ____________, 19__
Section 1
(a) Total Unreimbursed
Payments and demand loans $__________
(b) Total Advances: $__________
(c) Assigned Interest: __________%
Specify percentage to no more than 8 decimal points.
Section 2
(a) Assignor's Participation
Percentage (immediately
prior to the effectiveness
of this Assignment) ___________%
(b) Assignee's Participation
Percentage2 (upon the
effectiveness of this
Assignment) ___________%
(c) Assignor's Participation
Percentage (upon
the effectiveness of
this Assignment) ___________%
The sum of the percentages set forth in Section 2(b) and (c) shall equal
the percentage
set forth in Section 2(a).
Section 3
Effective Date:__________, 19__
Such date shall be at least 5 Business Days after the execution of this
Assignment.
[NAME OF ASSIGNOR]
By______________________________
Title:
[NAME OF ASSIGNEE]
By______________________________
Title:
[Address]
Telecopier No._______________
Attention:___________________
Consented to this __ day
of ______________, ___
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH,
as Issuing Bank
By _________________________________
Title:
By _________________________________
Title:
Accepted this __ day
of _____________, ___
Not to be accepted without proof of Account Party's consent pursuant to
Section 10.06(b) of the Reimbursement Agreement.
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH,
as Agent
By _________________________________
Title:
By _________________________________
Title:
APPLICABLE LENDING OFFICE
The Assignee's Applicable Lending Office is as follows:
Exhibit 1.01C
Form of
PLEDGE AGREEMENT
Dated as of September 1, 1993
THIS PLEDGE AGREEMENT ("this Agreement") is made by and between:
(i) Western Massachusetts Electric Company, a corporation duly
organized and validly existing under the laws of the Commonwealth
of Massachusetts (the "Account Party"); and
(ii) UNION BANK OF SWITZERLAND, NEW YORK BRANCH, as issuer of the Letter
of Credit (the "Issuing Bank");
for the benefit of the Issuing Bank and
(iii) The Agent (as defined therein) and the Participating Banks (as
defined therein) from time to time party to the Reimbursement
Agreement hereinafter referred to.
PRELIMINARY STATEMENT
The Connecticut Development Authority (the "Issuer") proposes to issue,
pursuant to an Indenture of Trust, dated as of September 1, 1993 (as
supplemented or amended from time to time with the written consent of the
Issuing Bank, the "Indenture"), made to Shawmut Bank Connecticut, National
Association, as trustee (such entity, or its successor as trustee, being the
"Trustee"), $53,800,000 aggregate principal amount of its Pollution Control
Revenue Refunding Bonds (Western Massachusetts Electric Company Project -
1993A Series) (the "Bonds"). Pursuant to the Indenture and the Loan
Agreement, dated as of September 1, 1993, between the Issuer and the Account
Party, the Account Party has requested the Issuing Bank to issue the letter
of credit referred to therein in favor of the Paying Agent described therein.
The Issuing Bank has agreed to issue such letter of credit subject to the
terms and conditions set forth in that certain Letter of Credit and
Reimbursement Agreement, of even date herewith, among the Account Party, the
Issuing Bank, the Agent and the Participating Banks referred to therein and
relating to the Bonds (said Letter of Credit and Reimbursement Agreement, as
it may hereafter be amended, modified or supplemented from time to time,
being hereinafter referred to as the "Reimbursement Agreement").
It is a condition precedent to the obligation of the Issuing Bank to
issue such letter of credit and of the Participating Banks to make the
Advances described in the Reimbursement Agreement that the Account Party
shall have made the pledge described in this Agreement.
NOW THEREFORE, in consideration of the premises and to induce the
Issuing Bank to issue such letter of credit and to induce the Participating
Banks to make such Advances, the Account Party hereby agrees as follows
(capitalized terms used herein and not otherwise defined herein having the
meanings assigned them in the Reimbursement Agreement):
SECTION 1. Pledge. The Account Party hereby pledges to the
Issuing Bank for the benefit of the Agent and the Participating Banks, and
grants to the Issuing Bank for the benefit of the Agent and the Participating
Banks a security interest in, the following (the "Pledged Collateral"):
(i) the Pledged Bonds (as defined in the Indenture) and the
instruments, if any, evidencing the Pledged Bonds, and all interest,
cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any
or all of the Pledged Bonds; and
(ii) all proceeds (other than the proceeds of the initial sale upon
issuance of the Pledged Bonds) of any and all of the foregoing
collateral (including, without limitation, proceeds that constitute
property of the types described above).
SECTION 2. Security for Obligations. This Agreement secures the
payment of all obligations of the Account Party now or hereafter existing
under the Reimbursement Agreement, whether for reimbursement, principal,
interest, fees, expenses or otherwise, and all obligations of the Account
Party now or hereafter existing under this Agreement (all such obligations of
the Account Party being the "Obligations"). Without limiting the generality
of the foregoing, this Agreement secures the payment of all amounts which
constitute part of the Obligations and would be owed by the Account Party to
the Issuing Bank, the Agent or any Participating Bank under the Reimbursement
Agreement but for the fact that they are unenforceable or not allowable due
to the existence of a bankruptcy, reorganization or similar proceeding
involving the Account Party.
SECTION 3. Delivery of Pledged Collateral. (a) All certificates
or instruments representing or evidencing the Pledged Collateral shall be
delivered to the Paying Agent and held by the Paying Agent on behalf of the
Issuing Bank pursuant hereto and shall be in suitable form for transfer by
delivery, or shall be accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance satisfactory to the Issuing
Bank. For the better perfection of the Issuing Bank's, the Agent's and the
Participating Banks' rights in and to the Pledged Collateral, the Account
Party shall forthwith, upon the pledge of any Pledged Collateral hereunder,
cause such Pledged Collateral to be registered in the name of such nominee or
nominees of the Issuing Bank as the Issuing Bank shall direct.
(b) If, prior to the payment in full of the Obligations and the
termination of the Letter of Credit, the Account Party shall become entitled
to receive or shall receive any payment in respect of the Pledged Collateral,
the Account Party agrees to accept the same as the agent of the Issuing Bank,
the Agent and the Participating Banks, to hold the same in trust for the
Issuing Bank, the Agent and the Participating Banks and to deliver the same
to the Issuing Bank. All such sums so received by the Issuing Bank shall be
credited against the Obligations in such order as the Agent shall, in its
sole discretion, elect.
(c) Notwithstanding the foregoing subsection (a), if and for so
long as the Bonds are to be held in the Book-Entry Only System (as defined in
the Indenture), the Account Party's obligations under such subsection shall
be deemed satisfied if such Pledged Bonds are (i) registered in the name of
DTC (as defined in the Indenture) in accordance with the Book-Entry Only
System, (ii) credited on the books of DTC to the account of the Paying Agent
(or its nominee) and (iii) further credited on the books of the Paying Agent
(or such nominee) to the account of the Issuing Bank (or its nominee).
SECTION 4. Representations and Warranties. The Account Party
represents and warrants as follows:
(a) The pledge of the Pledged Collateral pursuant to this
Agreement creates, upon the Paying Agent's taking possession of the Pledged
Bonds pursuant to Section 3 hereof (whether by physical possession or by
means of registration to DTC and book-entry credit as described in subsection
(c) thereof), a valid and perfected first priority security interest in the
Pledged Collateral, securing the payment of the Obligations.
(b) No consent of any other person or entity and no authorization,
approval, or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required (i) for the pledge by
the Account Party of the Pledged Collateral pursuant to this Agreement or for
the execution, delivery or performance of this Agreement by the Account
Party, (ii) for the perfection or maintenance of the security interest
created hereby (including the first priority nature of such security
interest), other than any filings of Uniform Commercial Code financing
statements that may be required for such perfection with respect to any
"proceeds" of the Pledged Bonds, or (iii) for the exercise by the Issuing
Bank of the voting or other rights provided for in this Agreement or the
remedies in respect of the Pledged Collateral pursuant to this Agreement
(except as may be required in connection with any disposition of any portion
of the Pledged Collateral by laws affecting the offering and sale of
securities generally and except for such as have already been obtained and
are in full force and effect).
SECTION 5. Further Assurances. The Account Party agrees that at
any time and from time to time, at the expense of the Account Party, the
Account Party will promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary or desirable,
or that the Issuing Bank may reasonably request, in order to perfect and
protect any security interest granted or purported to be granted hereby or to
enable the Issuing Bank to exercise and enforce its rights and remedies
hereunder with respect to any Pledged Collateral.
SECTION 6. Release. In the event that any Pledged Bonds are
subsequently remarketed by the Remarketing Agent and the proceeds thereof,
when added to any amounts paid to the Issuing Bank and/or the Agent by the
Account Party, are sufficient to (a) reimburse the Issuing Bank and the
Participating Banks in full for the drawing under the Letter of Credit
pursuant to which such Pledged Bonds became Pledged Bonds, (b) repay or
prepay any demand loan or Advance made in respect thereof and (c) pay all
interest, fees and other amounts accrued in respect thereof pursuant to the
Reimbursement Agreement, the lien of this Agreement shall be released as to
such Pledged Bonds (but not as to any other Pledged Bonds).
SECTION 7. Transfers and Other Liens. The Account Party agrees
that it will not (i) sell, assign or otherwise dispose of, or grant any
option with respect to, any of the Pledged Collateral, or (ii) create or
permit to exist any lien, security interest, option or other charge or
encumbrance upon or with respect to any of the Pledged Collateral, except for
the security interest under this Agreement.
SECTION 8. Bank Appointed Attorney-in-Fact. The Account Party
hereby appoints the Issuing Bank the Account Party's attorney-in-fact, with
full authority in the place and stead of the Account Party and in the name of
the Account Party or otherwise, from time to time in the Issuing Bank's
discretion to take any action and to execute any instrument which the Issuing
Bank may deem necessary or advisable to accomplish the purposes of this
Agreement, including, without limitation, to receive, indorse and collect all
instruments made payable to the Account Party representing any interest
payment or other distribution in respect of the Pledged Collateral or any
part thereof and to give full discharge for the same.
SECTION 9. Bank May Perform. If the Account Party fails to
perform any agreement contained herein, the Issuing Bank may itself perform,
or cause performance of, such agreement, and the expenses of the Issuing Bank
incurred in connection therewith shall be payable by the Account Party under
Section 10.04 of the Reimbursement Agreement.
SECTION 10. The Issuing Bank's Duties. The powers conferred on
the Issuing Bank hereunder are solely to protect its interest in the Pledged
Collateral and shall not impose any duty upon it to exercise any such powers.
Except for the safe custody of any Pledged Collateral in its actual
possession and the accounting for moneys actually received by it hereunder,
the Issuing Bank shall have no duty as to any Pledged Collateral, as to
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Pledged Collateral,
whether or not the Issuing Bank has or is deemed to have knowledge of such
matters, or as to the taking of any necessary steps to preserve rights
against any parties or any other rights pertaining to any Pledged Collateral.
The Issuing Bank shall be deemed to have exercised reasonable care in the
custody and preservation of any Pledged Collateral in its actual possession
if such Pledged Collateral is accorded treatment substantially equal to that
which the Issuing Bank accords its own property.
SECTION 11. Remedies upon Default. If any Event of Default shall
have occurred and be continuing:
(a) The Issuing Bank may exercise in respect of the Pledged
Collateral, in addition to other rights and remedies provided for herein
or otherwise available to it, all the rights and remedies of a secured
party on default under the Uniform Commercial Code in effect in the
State of New York at that time (the "Code") (whether or not the Code
applies to the affected Pledged Collateral), and may also, without
notice except as specified below, sell the Pledged Collateral or any
part thereof in one or more parcels at public or private sale, at any
exchange, broker's board or at any of the Issuing Bank's offices or
elsewhere, for cash, on credit or for future delivery, and upon such
other terms as the Issuing Bank may deem commercially reasonable. The
Account Party agrees that, to the extent notice of sale shall be
required by law, at least ten days' notice to the Account Party of the
time and place of any public sale or the time after which any private
sale is to be made shall constitute reasonable notification. The
Issuing Bank shall not be obligated to make any sale of Pledged
Collateral regardless of notice of sale having been given. The Issuing
Bank may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned.
(b) Any cash held by the Issuing Bank as Pledged Collateral and
all cash proceeds received by the Issuing Bank in respect of any sale
of, collection from, or other realization upon all or any part of the
Pledged Collateral may, in the discretion of the Issuing Bank, be held
by the Issuing Bank as collateral for, and/or then or at any time
thereafter be applied (after payment of any amounts payable to the
Issuing Bank pursuant to Section 9 hereof and/or Section 10.04 of the
Reimbursement Agreement) in whole or in part by the Issuing Bank
against, all or any part of the Obligations in such order as the Issuing
Bank shall elect. Any surplus of such cash or cash proceeds held by the
Issuing Bank and remaining after payment in full of all the Obligations
shall be paid over to the Account Party or to whomsoever may be lawfully
entitled to receive such surplus.
SECTION 12. Continuing Security Interest; Assignments. This
Agreement shall create a continuing security interest in the Pledged
Collateral and shall (i) remain in full force and effect until the later of
(x) the payment in full of the Obligations and all other amounts payable
under this Agreement and (y) the expiration or termination of the
Commitments, (ii) be binding upon the Account Party, its successors and
assigns, and (iii) inure to the benefit of, and be enforceable by, the
Issuing Bank, the Agent, the Participating Banks and their respective
successors, transferees and assigns. Without limiting the generality of the
foregoing clause (iii), any Participating Bank may, subject to Section 10.06
of the Reimbursement Agreement, assign or otherwise transfer all or any
portion of its rights and obligations under the Reimbursement Agreement
(including, without limitation, all or any portion of its Commitment and the
Advances owing to it) to any other person or entity, and such other person or
entity shall thereupon become vested with all the benefits in respect thereof
granted to such Participating Bank herein or otherwise. Upon the later of
the payment in full of the Obligations and all other amounts payable under
this Agreement and the expiration or termination of the Commitments, the
security interest granted hereby shall terminate and all rights to the
Pledged Collateral shall revert to the Account Party. Upon any such
termination, the Issuing Bank will, at the Account Party's expense, return to
the Account Party such of the Pledged Collateral as shall not have been sold
or otherwise applied pursuant to the terms hereof and execute and deliver to
the Account Party such documents as the Account Party shall reasonably
request to evidence such termination.
IN WITNESS WHEREOF, the Account Party has caused this Agreement to
be duly executed and delivered by its officer thereunto duly authorized as of
the date first above written.
WESTERN MASSACHUSETTS
ELECTRIC COMPANY, as
Account Party and pledgor
By _________________________________
Title:
UNION BANK OF SWITZERLAND, NEW
YORK BRANCH, as Issuing Bank and pledgee
By _________________________________
Title:
By _________________________________
Title:
[Form of Opinion of King & Spalding - CDA/WMECO]
EXHIBIT 5.01B
September 22, 1993
To Union Bank of Switzerland, New York Branch,
as Agent and as Issuing Bank under
the Reimbursement Agreement referred
to below, and to each Participating
Bank thereunder
Re: Western Massachusetts Electric Company
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 5.01(f)(ii) of the
Letter of Credit and Reimbursement Agreement, dated as of September 1, 1993
(the "Reimbursement Agreement"), among Western Massachusetts Electric Company
(the "Company"), Union Bank of Switzerland, New York Branch, as the Agent
(the "Agent") and Issuing Bank (the "Issuing Bank") thereunder, and the
Participating Banks referred to therein. Unless otherwise defined herein,
terms defined in the Reimbursement Agreement are used herein as therein
defined.
We have acted as special New York counsel to the Agent and the Issuing
Bank in connection with the preparation, execution and delivery of the
Reimbursement Agreement and the issuance by the Issuing Bank of the Letter of
Credit referred to therein.
In that connection, we have examined the following documents:
(a) The Reimbursement Agreement, executed by each of the parties
thereto; and
(b) The documents furnished to you today pursuant to Section 5.01
of the Reimbursement Agreement, including the opinion of counsel
delivered pursuant to Section 5.01(f)(i) of the Reimbursement Agreement
(the "Opinion").
In our examination of the documents referred to above, we have assumed
the authenticity of all such documents submitted to us as originals, the
genuineness of all signatures, the due authority of the parties executing
such documents and the conformity to the originals of all such documents
submitted to us as copies or telecopies. We have also assumed that the
Agent, the Issuing Bank and each Participating Bank have duly executed and
delivered, with all necessary power and authority (corporate and otherwise),
the Reimbursement Agreement.
To the extent that our opinions expressed below involve conclusions as
to matters governed by laws other than the laws of the State of New York, we
have relied upon the Opinion and have assumed without independent
investigation the correctness of the matters set forth therein, our opinions
expressed below being subject to the assumptions, qualifications and
limitations set forth in the Opinion. As to matters of fact, we have relied
solely upon the documents we have examined.
Based upon the foregoing, and subject to the qualifications set forth
below, we are of the opinion that:
4. The Reimbursement Agreement is in substantially acceptable
legal form.
5. The Opinion and the other documents referred to in item (b),
above, are substantially responsive to the requirements of the Sections
of the Reimbursement Agreement pursuant to which the same have been
delivered.
The foregoing opinions are solely for your benefit and may not be relied
upon by any other person, other than any person that may become a
Participating Bank under the Reimbursement Agreement after the date hereof.
Very truly yours,
Exhibit 10.4
STOCKHOLDER AGREEMENT, dated December 10, 1958, between Yankee Atomic
Electric Company ("Yankee") and [the names of Stockholders appear in the
attached Appendix] (the "Stockholder").
Yankee is a Massachusetts electric company, organized in 1954,
which has undertaken the construction and operation of a nuclear power
plant of approximately 134,000 kilowatts net electrical capacity, to
be located at Rowe, Massachusetts (the "plant"). Construction of the
plant is now under way, with completion scheduled for 1960. The plant
is expected to be the first nuclear power plant in New England and one
of the first in the nation. Because of its importance in the
development of commercial nuclear power, it is one of the projects
included in the Atomic Energy Commission's Power Demonstration Reactor
Program.
By separate contracts, Yankee will agree to sell the entire net
electrical output of the plant to the New England utility companies
which are its stockholders, and to make available to them such
information as may from time to time be useful to them as a result of
Yankee's experience in the design, planning, construction, and
operation of a demonstration nuclear power plant. The percentages of
Yankee's presently outstanding stock held by these companies and the
percentages of the output of the plant to be purchased by them are as
follows:
Stock Power
Percentage Percentage
New England Power Company 30.0% 30.0%
The Connecticut Light and Power Company 15.0 15.0
Boston Edison Company 9.5 9.5
Central Maine Power Company 9.5 --
The Hartford Electric Light Company 9.5 9.5
Western Massachusetts Electric Company 7.0 7.0
Public Service Company of New Hampshire 7.0 16.5*
Montaup Electric Company 4.5 4.5
New Bedford Gas and Edison Light Company 2.5 2.5
Cambridge Electric Light Company 2.0 2.0
Central Vermont Public Service Corp. 3.5 3.5
100.0% 100.0%
*Public Service Company of New Hampshire proposes to enter into
arrangements to supply power to Central Maine Power Company in amounts
equivalent to 9.5% of the net electrical output of the Yankee plant,
after appropriate allowance for transmission losses.
Yankee's present capitalization consists of $8,000,000 of common
capital stock, which has been purchased for cash at par by the
foregoing stockholders. Yankee's estimated capital requirements
aggregate $57,000,000, which Yankee proposes to finance through the
issuance of senior securities to provide funds of $37,000,000 and
additional capital stock to provide total equity funds of $20,000,000.
In consideration of the foregoing, of similar stockholder
agreements executed by others, and of the mutual covenants contained
herein, the parties agree as follows:
1. From time to time prior to plant completion date when additional
shares of its capital stock are offered by Yankee to its stockholders for
subscription, and until the total amount of Yankee's capital stock and
capital stock premium accounts, together with any amounts to be received
upon the issue and sale of the shares then being offered for subscription,
shall aggregate $20,000,000, the Stockholder will subscribe for, and
thereafter will purchase, its stock percentage of such shares, at a price
not less than the par value thereof, payable in cash on such terms and at
such times as may be specified by Yankee when said shares are offered for
subscription. If any additional shares of its capital stock are offered by
Yankee to its stockholders to meet all or any part of the excess capital
requirements of the project, the Stockholder will in like manner subscribe
for and purchase its stock percentage thereof.
The "plant completion date" shall be the date on which Yankee shall
have placed the plant in satisfactory operation, as determined by Yankee's
board of directors and evidenced by notice to its stockholders.
The "excess capital requirements of the project" shall be such capital
requirements in excess of $57,000,000 as Yankee may require to complete
construction of the plant and place it in satisfactory operation and to
provide adequate working capital for the continued operation of plant, as
determined by Yankee's board of directors at any time or from time to time
prior to the plant completion date and evidenced by notice to its
stockholders.
2. Yankee will proceed with due diligence with the construction and
operation of the plant, and will keep the Stockholder currently informed as
to the progress of the project and its anticipated capital requirements.
Yankee will use its best efforts to complete construction of the plant on
the presently estimated construction schedule (and in any event prior to
January 1, 1962) and within the limits of present costs estimates.
3. The obligations of the Stockholder hereunder are subject to the
following conditions:
(a) That all necessary regulatory approvals shall have been received
for the issue and sale by Yankee of any shares of its capital stock which
it may from time to time offer to its stockholders for subscription, and
for the acquisition by the Stockholder of its stock percentage of such
shares; and
(b) That Yankee shall have entered into contracts for the issue and
sale of its senior securities sufficient to provide capital funds
aggregating $37,000,000, and that no regulatory approvals necessary for the
issue and sale of such senior securities shall have been denied or revoked,
or granted upon conditions unacceptable to Yankee.
The parties will use their best efforts to obtain, or to assist in
obtaining, the foregoing regulatory approvals.
4. The Stockholder acknowledges notice of the restrictions on stock
transfer contained in Article IV, section 3 of Yankee's bylaws, and agrees
to be bound by said provisions with respect to all shares of Yankee's
capital stock which it now owns or may hereafter acquire.
5. This agreement, and the obligations of the parties hereunder, shall
terminate if the stockholders of Yankee, by vote of not less than 75% in
interest of the outstanding stock having general voting rights, shall vote
to discontinue and the construction or operation of the plant or to
liquidate Yankee and wind up its affairs.
6. This agreement is the corporate act and obligation of the parties
hereto, and any claim hereunder against any stockholder, director or
officer of either party, as such, is expressly waived.
IN WITNESS WHEREOF the parties have executed this agreement as a
sealed instrument by their respective officers thereunto duly authorized,
as of the date first above written.
YANKEE ATOMIC ELECTRIC COMPANY
By ____________________________________
ATTEST:
______________________________
_______________________________________
(Stockholder)
By ___________________________________
ATTEST:
_______________________________
[Forms of signatures appear in the attached Appendix.]
APPENDIX
Separate Stockholder Agreements were entered into, identical in form
with the foregoing except as to the execution thereof and except that on
page 1 the names of the respective Stockholders were inserted.
The Stockholder Agreements were executed by the parties thereto, under
their corporate seals, as follows:
YANKEE ATOMIC ELECTRIC COMPANY
ATTEST: By WILLIAM WEBSTER, President
D. G. ALLEN, Asst. Clerk
NEW ENGLAND POWER COMPANY
ATTEST: By ROBERT F. KRAUSE, President
JOSEPH X. CORBETT, Clerk
THE CONNECTICUT LIGHT AND POWER
COMPANY
ATTEST: By SHERMAN R, KNAPP, President
R. F. PROBST, Secretary
BOSTON EDISON COMPANY
ATTEST: By THOMAS G. DIGNAN, President
EDWIN J. LEE, Clerk
CENTRAL MAINE POWER COMPANY
ATTEST: By W. F. WYMAN, President
NATHANIEL W. WILSON, Secretary
THE HARTFORD ELECTRIC LIGHT COMPANY
ATTEST: By R. A. GIBSON, President
C. T. DWIGHT
WESTERN MASSACHUSETTS ELECTRIC
COMPANY
ATTEST: By HOWARD J. CADWELL, President
JAMES GRAY, Clerk
PUBLIC SERVICE COMPANY OF NEW
HAMPSHIRE
ATTEST: By A. R. SCHILLER, President
ANABELLE LANDERS, Secretary
MONTAUP ELECTRIC COMPANY
ATTEST: By GUIDO R. PERERA, President
R. M. KEITH, Clerk
NEW BEDFORD GAS AND EDISON LIGHT
COMPANY
ATTEST: By JOHN F. RICH, President
R. E. ROLLS, Clerk
CAMBRIDGE ELECTRIC LIGHT COMPANY
ATTEST: By JOHN F. RICH, President
R. E. ROLLS, Clerk
CENTRAL VERMONT PUBLIC SERVICE
CORPORATION
ATTEST: By ALBERT A. CREE, President
R. VANBUSKIRK, Clerk
Exhibit 10.5.4
Form of
Amendment No. 7
to
Power Contract
AMENDMENT NO. 7, dated as of the 1st day of February, 1992 between
YANKEE ATOMIC ELECTRIC COMPANY ("Yankee"), a Massachusetts corporation, and
a corporation ("Customer"),
to the Power Contract dated June 30, 1959, as heretofore amended and
revised effective June 2, 1975, October 1, 1980, April 1, 1985, May 6,
1988, June 26, 1989 and July 1, 1989, between Yankee and the Customer (the
"Power Contract").
WITNESSETH
WHEREAS, pursuant to the Power Contract, Yankee supplies to the
Customer and, pursuant to separate power contracts substantially identical
to the Power Contract except for the names of the parties, to the other
stockholders of Yankee, each of whom is contemporaneously entering into an
amendment to its power contract which is identical hereto except for the
necessary changes in the names of the parties, all of the capacity and the
electric energy available from the nuclear generating unit owned by Yankee
at a site in Rowe, Massachusetts (such unit being herein together with the
site and all related facilities owned by Yankee referred to as the
"plant"); and
WHEREAS, Yankee currently possesses a Facility Operating License for
the plant, issued by the Nuclear Regulatory Commission ("NRC"), which
authorizes operation of the plant through July 9, 2000; and
WHEREAS, the parties to the Power Contract and the Federal Energy
Regulatory Commission, which has regulatory jurisdiction over the Power
Contract, have consistently recognized that the cost of the capacity and
electric energy being sold under the Power Contract necessarily included
the costs of shutting down, removing from service and decommissioning the
plant after its useful life had ended and have heretofore incorporated in
the Power Contract provisions designed to achieve that result, whether or
not the plant produces electricity and whether or not the plant operates
for the full term of the Facility Operating License; and
WHEREAS, the parties to the Power Contract recognize that, if the
plant were to be shut down prematurely, it would be anticipated that the
NRC could amend the present Facility Operating License or issue a series of
superseding licenses applicable to the plant until such time as
decommissioning thereof is completed and that Yankee would be required to
retain possession of its spent fuel until such time as the Department of
Energy accepts responsibility therefor as required by law, during which
time the parties intend that the Power Contract would remain in effect to
govern the performance of their responsibilities; and
WHEREAS, the parties to the Power Contract have concluded that it is
in the best interest of their ratepayers and themselves to clarify the
application of the Power Contract in the event of a premature shutdown of
the plant; and
WHEREAS, the parties to the Power Contract desire to amend the
provisions of the Power Contract to provide for the foregoing.
NOW, THEREFORE, in consideration of the above and of other
good and valuable consideration, receipt of which is hereby acknowledged,
the parties hereto agree that the Power Contract is hereby amended as
follows:
1. Terms used herein and not defined shall have the meanings set
forth in the Power Contract.
2. Section 2 of the Power Contract is hereby amended by inserting at
the end thereof the following clause:
",including all billings and adjustments with respect to the
recovery of Yankee's total cost of service, as provided in
Section 6 hereof, until the non-salvageable investment in
plant, nuclear fuel and materials and supplies has been
fully amortized in accordance herewith."
3. Section 6 of the Power Contract is hereby amended by deleting
clause (i) of the fourth paragraph thereof and inserting in lieu thereof
the following:
"(i) depreciation accrued at a rate at least sufficient to
fully amortize over the estimated remaining useful life of
the plant Yankee's non-salvageable investments in plant,
nuclear fuel and materials and supplies, provided, however,
that if a decision is made to cease electricity production
at the plant prior to July 9, 2000, then such remaining non-
salvageable investments shall be amortized over a period
extending to July 9, 2000;".
4. Section 6 of the Power Contract is hereby amended by deleting
clause (iv) of the fourth paragraph thereof and inserting in lieu thereof
the following:
"(iv) costs incurred in connection with decommissioning the
plant, including (a) the direct and indirect costs of
operating, maintaining or dismantling the spent fuel storage
facilities and other plant facilities after the cessation of
electricity production and (b) the accruals to any reserve
established by Yankee's board of directors to provide for
physical decommissioning of the plant over the estimated
remaining useful life of the plant, provided, however, that
if a decision is made to cease electricity production at the
plant prior to July 9, 2000, then the accruals to the
reserve referred to in clause (b) shall be made over a
period extending to July 9, 2000;".
5. Section 6 of the Power Contract is hereby amended by
inserting at the end of the eighth paragraph thereof the following:
";plus (vi) the amount of any unamortized deferred expenses,
as permitted from time to time by the Federal Energy
Regulatory Commission or its successor agency; plus (vii) to
the extent not provided for elsewhere in this paragraph, the
remaining unamortized amount of the non-salvageable
investment in plant, nuclear fuel and materials and
supplies."
6. This Amendment shall become effective as of the date first
above written, subject to any suspension order duly issued by the Federal
Energy Regulatory Commission.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment to be executed by its officer thereunto duly authorized, as of
the date first above written.
YANKEE ATOMIC POWER COMPANY
By___________________________
Its President
CUSTOMER
By_____________________________
Its__________________________
Title
Exhibit 10.7.1
Form of
Maine Yankee Atomic Power Company
Amendment No. 1
to
POWER CONTRACT
AMENDMENT, dated as of March 1, 1983, between MAINE YANKEE
ATOMIC POWER COMPANY ("Maine Yankee"), a Maine corporation, and
(the "Purchaser") to the Power Contract, dated as of May
20, 1968, between Maine Yankee and the Purchaser.
W I T N E S S E T H
WHEREAS, Maine Yankee has heretofore established a trust pursuant to
an Indenture of Trust dated as of October 12, 1982 (the "Maine Yankee
Trust") to make provision for financing the decommissioning of its Unit in
accordance with the rules and regulations of the Nuclear Regulatory
Commission (the "NRC") and to assure its financial ability to meet the
obligations to the NRC, other applicable regulatory bodies, the general
public and its customers in connection with said decommissioning, such
trust to hold all payments made to it and any earnings thereon solely for
the purpose of meeting such decommissioning expenses and thereafter for the
benefit of the wholesale purchasers of power from Maine Yankee in
accordance with the terms and conditions ordered by any governmental
regulatory body having jurisdiction; and
WHEREAS, in order to provide for the accrual of an appropriate fund
for decommissioning the Unit at the end of its useful life, Maine Yankee
and each of its other Sponsors are contemporaneously entering into
Amendments which are identical to the Amendment except for the necessary
changes in the names of the parties; and
WHEREAS, pursuant to an Order (the "Order") issued by the Federal
Energy Regulatory Commission ("FERC") on August 3, 1982 (Docket No. ER 82-
15-000), Maine Yankee began collecting estimated costs of decommissioning
the Unit through rates effective on November 1, 1981, which amounts have
been paid into the Maine Yankee Trust except such amounts as are necessary
to be used to pay federal and state income taxes on moneys collected as
decommissioning charges unless and until it is ultimately determined that
such moneys are not subject to tax.
NOW, THEREFORE, in consideration of the premises and of other good and
valuable consideration, receipt of which is hereby acknowledged, the
parties hereto agree that the Power Contract is hereby amended as follows:
1. Terms used herein and not defined shall have the meanings set
forth in the Power Contract.
2. The second paragraph of Section 7 is hereby amended to insert
the clause "or, in the case of payments under clause (b) below, commencing on
or after the date authorized by the Federal Energy Regulatory Commission
("FERC"), formerly the Federal Power Commission," and the clause "plus
(b) the Total Decommissioning Costs for the month with respect to the
Unit," and to reletter the two final clauses, so that the entire paragraph
reads as follows:
"With respect to each month commencing on or after the plant
completion date or, in the case of payments under clause (b)
below, commencing on or after the date authorized by the Federal
Energy Regulatory Commission ("FERC"), formerly the Federal Power
Commission, the Purchaser will pay Maine Yankee an amount equal
to the Purchaser's entitlement percentage of the sum of (a) Maine
Yankee's total fuel costs for the month with respect to the Unit,
plus (b) the Total Decommissioning Costs for the month with
respect to the Unit, plus (c) Maine Yankee's total operating
expenses for the month with respect to the Unit, plus (d) an
amount equal to one-twelfth of the composite percentage for such
month of the net Unit investment as most recently determined in
accordance with this Section 7."
3. Section 7 is further amended by inserting therein immediately
preceding in the last paragraph thereof the following three paragraphs:
"Total Decommissioning Costs" for any month shall mean the
sum of (x) an amount equal to all accruals in such month to any
reserve, as from time to time established by Maine Yankee and
approved by its board of directors, to provide for the ultimate
payment of the Decommissioning Expenses of the Unit plus
(y) Decommissioning Tax Liability for such month. It is
understood (i) that such funds may be held by Maine Yankee or, if
required, by an independent trust or other separate fund, as
determined by said board of directors, (ii) that, upon compliance
with Section 21 hereof, the amount, custody and/or timing of such
accruals may from time to time during the term hereof be modified
by said board of directors in its discretion or to comply with
applicable statutory or regulatory requirements or to reflect
changes in the amount, custody or timing of anticipated
Decommissioning Expenses, and (iii) that the use of the term "to
decommission" herein encompasses compliance with all requirements
(other than those relating to spent nuclear fuel) of the Nuclear
Regulatory Commission or its successors (NRC) for permanent
cessation of operation of a nuclear facility.
"Decommissioning Expenses" shall include:
(1) All costs and expenses of removing the Unit from service,
including without limitation, dismantling, mothballing,
removing radioactive material (excluding spent nuclear fuel)
to temporary and/or permanent storage sites,
decontaminating, restoring and supervising the site, and any
costs and expenses incurred in connection with proceedings
before governmental regulatory authorities relating to any
authorization to decommission the Unit or remove the Unit
from service;
(2) All costs of labor and services, whether directly or
indirectly incurred, including without limitation services
of foremen, inspectors, supervisors, surveyors, engineers,
security personnel, counsel, and accountants, performed or
rendered in connection with the decommissioning of the Unit
and the removal of the Unit from service, and all costs of
materials, supplies, machinery, construction, equipment and
apparatus acquired or used (including rental charges for
machinery, equipment or apparatus hired) for or in
connection with the decommissioning of the Unit and the
removal of the Unit from service, and all administrative
costs, including services of counsel and financial advisers,
of any applicable independent trust or other separate fund;
it being understood that any amount, exclusive of amounts
received in respect of proceeds of insurance, realized by
Maine Yankee as salvage on any machinery, construction
equipment and apparatus, the cost of which was charged to
Decommissioning Expense, shall be treated as a reduction of
the amounts otherwise chargeable on account of the costs of
decommissioning of the unit; and
(3) All overhead costs applicable to the Unit during its
decommissioning period, including without limiting the
generality of the foregoing, taxes (other than taxes on or
in respect of income), licenses, excises, and assessments,
casualties, surety bond premiums and insurance premiums.
"Decommissioning Tax Liability" for any month shall be an
amount established by Maine Yankee and approved by its board of
directors to meet possible income tax obligations, which amount
shall not exceed: the amount to be included in the clause (x)
portion of Total Decommissioning Costs for such month multiplied
by a fraction whose numerator is equal to the combined highest
statutory federal and state marginal income tax rate and whose
denominator is equal to one minus the combined highest statutory
federal and state marginal income tax rate. Maine Yankee will
use its best efforts to obtain as promptly as possible favorable
tax treatment of the payments for total decommissioning costs
hereunder so that Decommissioning Tax Liability may be minimized.
Without limiting the generality of the foregoing, any other
amounts expended or to be paid with respect to decommissioning of
the Unit or removal of the Unit from service shall constitute
part of the Decommissioning Expenses if they are, or when paid
will be, either (i) properly chargeable to any account related to
decommissioning of a nuclear generating unit in accordance with
the Uniform System or generally accepted accounting principles as
then in effect, or (ii) properly chargeable to decommissioning of
a nuclear generating unit in accordance with then applicable
regulations of the NRC or FERC or any other regulatory agency
having jurisdiction.
4. A new Section 7A is hereby inserted therein immediately
following Section 7 thereof as follows:
"7A. Decommissioning Fund
Maine Yankee agrees to pay to, or cause to be paid to, the
Maine Yankee Trust or any successor trust approved by the board
of directors of Maine Yankee all funds collected hereunder for
the express purpose of decommissioning the Unit or removing the
Unit from service and further agrees that, after the tax
consequences of decommissioning collections have been resolved,
any funds collected hereunder to meet Decommissioning Tax
Liability which are not used for that purpose will be refunded to
Purchaser to the extent required by FERC."
5. The last four lines of the first paragraph of Section 9
following clause (iii) thereof are hereby amended to read as follows:
"then and in any such case, the Purchaser may cancel the
provisions of this contract, except that in all cases other than
those described in clause (ii) above, the provisions relating to
the payment of Total Decommissioning Costs shall, whether or not
the Unit is operated or operable and notwithstanding any earlier
termination of the service life of the Unit, remain in full force
and effect until January 1, 2003 or the completion of
decommissioning, whichever is earlier. Such cancellation shall
be effected by written notice given by the Purchaser to Maine
Yankee. In the event of such cancellation, all continuing
obligations of the parties (other than the obligations relating
to the payment and application of Total Decommissioning Costs to
the extent that such obligations remain in full force and effect
pursuant to the second preceding sentence, but including the
Purchaser's obligations to continue payments pursuant to
clauses (a), (c) and (d) of the second paragraph of Section 7
hereof) shall cease forthwith. Any dispute as to the Purchaser's
right to cancel this contract pursuant to the foregoing
provisions shall be referred to arbitration in accordance with
the provisions of Section 13.
6. A new Section 21 is inserted therein as follows:
"21. Amendments
Upon authorization by Maine Yankee's board of directors of
uniform amendments to all the sponsor power contracts, Maine
Yankee shall have the right to amend the provisions of Section 7
hereof insofar as they relate to the amounts collectible by Maine
Yankee pursuant to clause (b) of the second paragraph of
Section 7 hereof or to the timing of such collections by serving
an appropriate statement of such amendment upon the Purchaser and
filing the same with FERC (or such other regulatory agency as may
have jurisdiction in the premises) in accordance with the
provisions of applicable laws and any rules and regulations
thereunder, and the amendment shall thereupon become effective on
the date specified therein, subject to any suspension order duly
issued by such agency. All other amendments to this contract
shall be by mutual agreement, evidenced by a written amendment
signed by the parties hereto."
This Amendment No. 1 shall become effective on ,
1983, subject to any suspension order duly issued by the Federal Energy
Regulatory Commission.
IN WITNESS WHEREOF, the parties have executed this amendment by their
respective officers duly authorized as of the day of
, 1983.
MAINE YANKEE ATOMIC POWER COMPANY
By
President
PURCHASER
By
Exhibit 10.7.2
MAINE YANKEE ATOMIC POWER COMPANY
Form of
Amendment No. 2
to
Power Contract
AMENDMENT, dated as of this 1st day of January , 1984, between
MAINE YANKEE ATOMIC POWER COMPANY ("Maine Yankee"), a Maine corporation,
and , a
corporation (the "Purchaser"), to the Power Contract dated as of May 20,
1968, between Maine Yankee and the Purchaser (the "Power Contract").
W I T N E S S E T H
WHEREAS, pursuant to the Power Contract, Maine Yankee supplies to the
Purchaser and, pursuant to separate Power Contracts, to the other Sponsors
of Maine Yankee, each of whom is contemporaneously entering into Amendments
which are identical to the Amendment except for the necessary changes in
the names of the parties, all of the capacity and the electric energy
available from the nuclear generating unit owned by Maine Yankee at a site
on the tidewater in the Town of Wiscasset, Maine (such unit being herein
together with the site and all related facilities owned by Maine Yankee,
referred to as the "Unit").
WHEREAS, Maine Yankee, the Purchaser and the other Sponsors of Maine
Yankee believe that the monthly payments provided in the Power Contracts
are no longer sufficient to permit Maine Yankee to finance potential
modifications to the Unit and to purchase replacement nuclear fuel on an
optimum basis and that the implicit return on the equity component of Maine
Yankee's capitalization resulting from the payments provided in the Power
Contracts may not be sufficient to provide a return on the equity
investment in the Unit which is equal to the return achieved on investments
of comparable risk.
WHEREAS, in order to facilitate Maine Yankee's future financing and to
assure the maintenance of an appropriate level of return on common equity,
Maine Yankee and the Purchaser have agreed to enter into this Amendment in
order to provide for an appropriate supplemental payment for power
delivered from the Unit and to provide for a late payment charge to better
ensure prompt payment for power delivered from the Unit.
NOW, THEREFORE, in consideration of the premises and of other good and
valuable consideration, receipt of which is hereby acknowledged, the
parties hereto agree that the Power Contract is hereby amended as follows:
1. Terms used herein and not defined shall have the
meanings set forth in the Power Contract.
2. The third paragraph of Section 7 of the Power Contract
is amended to read as follows:
"Composite percentage" shall be computed as of the plant
completion date and as of the last day of each month
thereafter (the "computation date") and for any month the
composite percentage shall be that computed as of the last
day of the previous month. "Composite percentage" as of a
computation date shall be the sum of (i) nine and eight-
tenths percent (9.8%) or such higher percentage as the
Federal Energy Regulatory Commission (the "Commission") from
time to time may allow but not more than twenty percent
(20%), multiplied by the percentage which equity investment
with respect to the Unit (other than equity investment for
the financing of fuel inventory, including nuclear materials
and the cost of fabrication thereof, for the Unit) as of
such date is of the total capital as of such date; plus
(ii) the "effective interest rate" per annum of each
principal amount of indebtedness outstanding on such date
for money borrowed with respect to the Unit (other than for
money borrowed for the financing of fuel inventory,
including nuclear materials and the cost of fabrication
thereof, for the Unit), multiplied by the percentage which
such principal amount is of total capital as of such date.
The "effective interest rate" of each principal amount of
indebtedness referred to in clause (ii) of the next
preceding sentence will reflect the annual interest
requirements and to the extent applicable, amortization of
issue expenses, discounts and premiums, sinking fund call
premiums, expenses and discounts, refunding and retirement
expenses, discounts and premiums, and all other expenses
applicable to the issue.
3. The seventh paragraph of Section 7 of the Power Contract
is amended to read as follows:
Maine Yankee's "fuel costs" for any month shall include
(i) amounts chargeable in accordance with the Uniform System
in such month as amortization of costs of fuel assemblies
and components and burnup of nuclear materials for the Unit;
plus (ii) all other amounts properly chargeable in
accordance with the Uniform System to fuel costs for the
Unit less any applicable credits thereto; plus (iii) one-
twelfth of nine and eight-tenths percent (9.8%) or such
higher percentage as the Commission from time to time may
allow, but not more than twenty percent (20%), multiplied by
the equity investment for the financing of fuel inventory,
including nuclear materials and the cost of fabrication
thereof, for the Unit; plus (iv) to the extent not provided
for in any of the foregoing, all payments (or accruals
therefor or amortization thereof) with respect to
obligations incurred in connection with the financing or
leasing of fuel inventory, including nuclear materials and
the cost of fabrication thereof, for the Unit.
4. The last paragraph of Section 7 of the Power Contract is
amended to read as follows:
Maine Yankee will bill the Purchaser, as soon as
practicable after the end of each month, for all amounts
payable by the Purchaser with respect to the particular
month. Such bills will be rendered in such detail as the
Purchaser may reasonably request and may be rendered on an
estimated basis subject to corrective adjustments in
subsequent billing periods. All bills shall be due and
payable when rendered.
When all or any part of any bill shall remain unpaid
for more than thirty (30) days after the rendering thereof,
simple interest at an annual rate which is 2% in excess of
the current prime rate then in effect at The First National
Bank of Boston shall accrue to Maine Yankee from and after
the due date to the date payment is received and shall be
payable to Maine Yankee on either (i) such unpaid amount, or
(ii) in the event the amount of the bill is disputed, the
amount finally determined to be due and payable.
This Agreement shall become effective on January 1, 1984, or upon such
later date as it shall be permitted to become effective by the Federal
Energy Regulatory Commission or other governmental regulatory authority
having jurisdiction.
This Agreement may be executed in any number of counterparts and each
executed counterpart shall have the same force and effect as an original
instrument and as if all the parties to all of the counterparts had signed
the same instrument. Any signature page of this Agreement may be detached
from any counterpart without impairing the legal effect of any signatures
thereon, and may be attached to another counterpart of this contract
identical in form hereto but having attached it to one or more signature
pages.
IN WITNESS WHEREOF, the parties have executed this Agreement by their
respective officers hereto duly authorized, as of the date first above
written.
MAINE YANKEE ATOMIC POWER COMPANY
By
Its __________________________
Title
Address: Edison Drive
Augusta, Maine 04336
___________________________________
(PURCHASER)
By ______________________________
Its __________________________
Title
Address: _________________________
Exhibit 10.7.4
FORM OF
ADDITIONAL POWER CONTRACT, dated as of February 1, 1984, between MAINE
YANKEE ATOMIC POWER COMPANY ("Maine Yankee"), a Maine corporation, and
(the "Purchaser").
It is agreed as follows:
1. Basic Understandings
Maine Yankee was organized in 1966 to provide for the supply of power
to its eleven sponsoring utility companies (including the Purchaser), which
utilities are hereinafter called the "sponsors". It constructed a nuclear
electric generating unit of the pressurized water type, having a maximum
net capability of approximately 830 megawatts electric, on Bailey Point in
Wiscasset, Maine (said unit being herein, together with the site and all
related facilities owned or to be owned by Maine Yankee, referred to as the
"Unit"). On June 27, 1973 Maine Yankee was issued a full-term, operating
license for the Unit from the Atomic Energy Commission (now the Nuclear
Regulatory Commission which, together with any successor agency or
agencies, is hereafter called the "NRC"), which license expires on
October 21, 2008, and the Unit commenced commercial operation on January 1,
1973.
The Unit is operated to supply power to Maine Yankee's sponsors, each
of which by a Power Contract dated as of May 20, 1968, as amended and as
may be further amended from time to time (collectively the "Initial Power
Contracts"), has undertaken to purchase a fixed percentage of the capacity
and output of the Unit for a term extending through January 1, 2003. The
names of the sponsors and their respective percentages ("entitlement
percentages") of the capacity and output of the Unit are as follows:
Entitlement
Sponsor Percentage
Central Maine Power Company 38.0%
New England Power Company 20.0%
The Connecticut Light and Power Company 12.0%
Bangor Hydro-Electric Company 7.0%
Maine Public Service Company 5.0%
Public Service Company of New Hampshire 5.0%
Cambridge Electric Light Company 4.0%
Montaup Electric Company 4.0%
Western Massachusetts Electric Company 3.0%
Central Vermont Public Service Corporation 2.0%
100.0%
The sponsors have resold portions of their entitlement percentages of
capacity and output of the Unit under the Initial Power Contracts to other
utilities (the "secondary purchasers") on terms and conditions
substantially equivalent to those in the Initial Power Contracts: in 1972,
the three Maine sponsors resold an aggregate of .7158% of the Unit's
capacity and output to other utilities in Maine and, also in 1972, the non-
Maine sponsors resold an aggregate of 5.5689% of the Unit's capacity and
output to other New England utilities outside of Maine (collectively the
"Resale Contracts"). In 1983 the Initial Power Contracts were amended to
incorporate provisions for collection of funds to defray the ultimate cost
of decommissioning the Unit, which costs are being borne pro rata by the
secondary purchasers under the Resale Contracts.
Maine Yankee and its sponsors desire to provide for the orderly
continuation of the sale and purchase of the capacity and output of the
Unit during the useful life of the Unit to the extent it continues beyond
the termination date of the Initial Power Contracts, and to provide
appropriate provisions for the collection of funds for and the payment of
decommissioning and any other costs with respect thereto both during and
after the useful life of the Unit. Maine Yankee and its other sponsors are
entering into Additional Power Contracts which are identical to this
contract except for necessary changes in the names of the parties.
2. Effective Date, Term and Waiver
This contract shall become effective upon receipt by the Purchaser of
notice that Maine Yankee has entered into Additional Power Contracts, as
contemplated by Section 1 above, with each of its other sponsors. The
operative term of this contract shall commence on January 2, 2003,
notwithstanding the fact that the useful service life of the Unit may have
been terminated prior to that date, and shall terminate upon the later to
occur of (i) 30 days after the date on which the last of the financial
obligations of Maine Yankee which constitute elements of the purchase price
calculated pursuant to Section 7 of this contract has been extinguished by
Maine Yankee or (ii) 30 days after the date on which Maine Yankee is
finally relieved of any obligations under the last of any licenses
(operating and/or possessory) which it now holds from, or which may
hereafter be issued to it by, the NRC with respect to the Unit under
applicable provisions of the Atomic Energy Act of 1954, as amended from
time to time (the "Act").
Maine Yankee and the Purchaser acknowledge that if the useful service
life of the Unit is terminated prior to January 2, 2003, then only the
provisions of this contract applicable to decommissioning of the Unit will
apply during the operative term of this contract.
The Purchaser hereby irrevocably waives its right to extend the
contract term of its Initial Power Contract pursuant to subsections (a) or
(b) of Section 8 thereof.
3. Operation and Maintenance of the Unit
Maine Yankee will operate and maintain the Unit in accordance with
good utility practice under the circumstances and all applicable law,
including the applicable provisions of the Act and of any licenses issued
thereunder to Maine Yankee. Within the limits imposed by good utility
practice under the circumstances and applicable law, the Unit will be
operated at its maximum capability and on a long hour use basis.
Outages for inspection, maintenance, refueling and repairs and
replacements will be scheduled in accordance with good utility practice and
insofar as practicable shall be mutually agreed upon by Maine Yankee and
the Purchaser. In the event of an outage, Maine Yankee will use its best
efforts to restore the Unit to service as promptly as practicable.
4. Decommissioning
After commercial operation of the Unit permanently ceases, Maine
Yankee will decommission the Unit in a manner authorized by Maine Yankee's
board of directors and approved by the NRC in accordance with the Act and
the rules and regulations thereunder then in effect and by any agency
having jurisdiction over decommissioning of the Unit.
It is understood that, pursuant to the Initial Power Contracts and the
Resale Contracts, the sponsors and secondary purchasers are currently being
billed for Total Decommissioning Costs which, as of the date of this
contract, are being accumulated in a separate trust fund (the "Maine Yankee
Trust") which was established for the purpose of reimbursing Maine Yankee
for Decommissioning Expenses incurred in the process of decommissioning the
Unit and that such billings are subject to change in accordance with the
provisions of the Initial Power Contracts, subject to the jurisdiction of
the Federal Energy Regulatory Commission ("FERC"), formerly the Federal
Power Commission. It is contemplated that sufficient funds will be
accumulated pursuant to those contracts and paragraph 7 hereof to reimburse
Maine Yankee for the full cost of decommissioning the Unit.
5. Purchaser's Entitlement
The Purchaser will, throughout the term of this contract, be entitled
and obligated to take its entitlement percentage of the capacity and net
electrical output of the Unit, at whatever level the Unit is operated or
operable, whether more or less than 830 megawatts electric.
6. Deliveries and Metering
The Purchaser's entitlement percentage of the output of the Unit will
be delivered to and accepted by it at the step-up substation at the site.
All deliveries will be made in the form of 3-phase, 60 cycle, alternating
current at a nominal voltage of 345,000 volts. The Purchaser will make its
own arrangements for the transmission of its entitlement percentage of the
output of the Unit.
Maine Yankee will supply and maintain all necessary metering equipment
for determining the quality and conditions of supply of deliveries under
this contract, will make appropriate tests of such equipment in accordance
with good utility practice and as reasonably requested by the Purchaser,
and will maintain the accuracy of such equipment within reasonable limits.
Maine Yankee will furnish the Purchaser with such summaries of meter
readings as the Purchaser may reasonably request.
7. Payment
With respect to each month commencing on or after January 1, 2003, the
Purchaser will pay Maine Yankee an amount equal to the Purchaser's
entitlement percentage of the sum of (a) Maine Yankee's total fuel costs
for the month with respect to the Unit, plus (b) the Total Decommissioning
Costs for the month with respect to the Unit, plus (c) Maine Yankee's total
operating expenses for the month with respect to the Unit, plus (d) an
amount equal to one-twelfth of the composite percentage for such month of
the net Unit investment as most recently determined in accordance with this
Section 7.
"Composite percentage" shall be computed as of the last day of each
month during the term hereof (the "computation date") and for any month the
composite percentage shall be that computed as of the last day of the
previous month. "Composite percentage" as of a computation date shall be
the sum of (i) the equity percentage as of such date multiplied by the
percentage which equity investment with respect to the Unit (other than
equity investment for the financing of fuel inventory, including nuclear
materials and the cost of fabrication thereof, for the Unit) as of such
date is of the total capital as of such date; plus (ii) the "effective
interest rate" per annum of each principal amount of indebtedness
outstanding on such date for money borrowed with respect to the Unit (other
than for money borrowed for the financing of fuel inventory, including
nuclear materials and the cost of fabrication thereof, for the Unit),
multiplied by the percentage which such principal amount is of total
capital as of such date. The "effective interest rate" of each principal
amount of indebtedness referred to in clause (ii) of the next preceding
sentence will reflect the annual interest requirements and to the extent
applicable, amortization of issue expenses, discounts and premiums, sinking
fund call premiums, expenses and discounts, refunding and retirement
expenses, discounts and premiums, and all other expenses applicable to the
issue.
"Equity investment" as of any date shall consist of the sum of (i) all
amounts theretofore paid to Maine Yankee for all capital stock theretofore
issued, plus all capital contributions, less the sum of any amounts paid by
Maine Yankee in the form of stock retirements, repurchases or redemptions
or return of capital; plus (ii) any credit balance in the capital surplus
account not included under (i) and in the earned surplus account on the
books of Maine Yankee as of such date.
"Equity percentage" as of any date after commencement of the operative
term hereof shall be that percentage which was the "equity percentage" in
effect on the last day of the term of the Initial Power Contracts or such
other percentage as may from time to time thereafter be approved by FERC.
"Total capital" as of any date shall be the equity investment with
respect to the Unit, plus the total of all other securities and
indebtedness then outstanding with respect to the Unit other than equity
investment, securities, indebtedness and other obligations issued in
connection with the financing or leasing of fuel inventory, including
nuclear materials and the cost of fabrication thereof, for the Unit.
"Uniform System" shall mean the Uniform System of Accounts prescribed
by FERC for Class A and Class B Public Utilities and Licensees as in effect
on the date of this Agreement and as said System may be hereafter amended
to take account of private ownership of special nuclear material.
Maine Yankee's "fuel costs" for any month shall include (i) amounts
chargeable in accordance with the Uniform System in such month as
amortization of costs of fuel assemblies and components and burn-up of
nuclear materials for the Unit; plus (ii) all other amounts properly
chargeable in accordance with the Uniform System to fuel costs for the Unit
less any applicable credits thereto; plus (iii) one-twelfth of the equity
percentage as of such month multiplied by the equity investment for the
financing of fuel inventory, including nuclear materials and the cost of
fabrication thereof, for the Unit; plus (iv) to the extent not provided for
in any of the foregoing, all payments (or accruals therefor or amortization
thereof) with respect to obligations incurred in connection with the
financing or leasing of fuel inventory, including nuclear materials and the
cost of fabrication thereof, for the Unit (provided that such inventory is
not included in the net Unit investment).
Maine Yankee's "operating expenses" shall include all amounts properly
chargeable to operating expenses accounts (other than such amounts which
are included in Maine Yankee's fuel costs), less any applicable credits
thereto, in accordance with the Uniform System; it being understood that
for purposes of this contract "operating expenses" shall include
depreciation accrual and amortization at a rate at least sufficient to
fully amortize the non-salvageable plant investment over the estimated
remaining useful life of the plant.
The "net Unit investment" shall consist, in each case with respect to
the Unit, the net sum of (i) the aggregate amount properly chargeable at
the time in accordance with the Uniform System to Maine Yankee's electric
plant accounts (including construction work in progress); less (ii) the
amount of any unamortized property losses; less (iii) the amount of
reserves for depreciation and for amortization of property losses; plus
(iv) such allowances for inventories, materials and supplies (other than
fuel assemblies and components), prepaid items and cash working capital as
may reasonably be determined from time to time by Maine Yankee. The net
Unit investment shall be determined as of the commencement of each calendar
year, or, if Maine Yankee elects, at more frequent intervals.
"Total Decommissioning Costs" for any month shall mean the sum of
(x) an amount equal to all accruals in such month to any reserve, as from
time to time established by Maine Yankee and approved by its board of
directors, to provide for the ultimate payment of the Decommissioning
Expenses of the Unit plus (y) Decommissioning Tax Liability for such month.
It is understood (i) that such funds may be held by Maine Yankee or by any
independent trust or other separate fund, as determined by said board of
directors, (ii) that, upon compliance with Section 18 hereof, the amount,
custody and/or timing of such accruals may from time to time during the
term hereof be modified by said board of directors in its discretion or to
comply with applicable statutory or regulatory requirements or to reflect
changes in the amount, custody or timing of anticipated Decommissioning
Expenses, and (iii) that the use of the term "to decommission" herein
encompasses compliance with all requirements (other than those relating to
spent nuclear fuel) of the NRC for permanent cessation of operation of a
nuclear facility. "Decommissioning Expenses" shall include:
(1) All costs and expenses of removing the Unit from service,
including without limitation, dismantling, mothballing, removing
radioactive material (excluding spent nuclear fuel) to temporary
and/or permanent storage sites, decontaminating, restoring and
supervising the site, and any costs and expenses incurred in
connection with proceedings before governmental regulatory
authorities relating to any authorization to decommission the
Unit or remove the Unit from service;
(2) All costs of labor and services, whether directly or indirectly
incurred, including without limitation services of foremen,
inspectors, supervisors, surveyors, engineers, security
personnel, counsel and accountants, performed or rendered in
connection with the decommissioning of the Unit and the removal
of the Unit from service, and all costs of materials, supplies,
machinery, construction equipment and apparatus acquired or used
(including rental charges for machinery, equipment or apparatus
hired) for or in connection with the decommissioning of the Unit
and the removal of the Unit from service, and all administrative
costs, including services of counsel and financial advisers, of
any applicable independent trust or other separate fund; it being
understood that any amount, exclusive of proceeds of insurance,
realized by Maine Yankee as salvage on any machinery,
construction equipment and apparatus, the cost of which was
charged to Decommissioning Expense, shall be treated as a
reduction of the amounts otherwise chargeable on account of the
costs of decommissioning of the Unit; and
(3) All overhead costs applicable to the Unit during its
decommissioning period, including, without limiting the
generality of the foregoing, taxes (other than taxes on or in
respect of income), licenses, excises and assessments,
casualties, surety bond premiums and insurance premiums.
"Decommissioning Tax Liability" for any month shall be an amount
established by Maine Yankee and approved by its board of directors to meet
possible income tax obligations, which amount shall not exceed: the amount
to be included in the clause (x) portion of Total Decommissioning Costs for
such month multiplied by a fraction whose numerator is equal to the
combined highest statutory Federal and state marginal income tax rate and
whose denominator is equal to one minus the combined highest statutory
Federal and state marginal income tax rate.
Without limiting the generality of the foregoing, any other amounts
expended or to be paid with respect to decommissioning of the Unit or
removal of the Unit from service shall constitute part of the
Decommissioning Expenses if they are, or when paid will be, either
(i) properly chargeable to any account related to decommissioning of a
nuclear generating unit in accordance with the Uniform System or generally
accepted accounting principles as then in effect, or (ii) properly
chargeable to decommissioning of a nuclear generating unit in accordance
with then applicable regulations of the NRC or FERC or any other regulatory
agency having jurisdiction.
8. Billing
Maine Yankee will bill the Purchaser, as soon as practicable after the
end of each month, for all amounts payable by the Purchaser with respect to
the particular month pursuant to Section 7 hereof. Such bills will be
rendered in such detail as the Purchaser may reasonably request and may be
rendered on an estimated basis subject to corrective adjustments in
subsequent billing periods. All bills shall be paid in full within 10 days
after receipt thereof by the Purchaser.
When all or any part of any bill shall remain unpaid for more than
thirty (30) days after the due date thereof, simple interest at an annual
rate which is at all times 1% in excess of the prime rate for commercial
loans in effect at The First National Bank of Boston shall accrue to Maine
Yankee from and after the thirtieth day from the due date of said bill.
9. Decommissioning Fund
Maine Yankee agrees to pay to, or cause to be paid to, the Maine
Yankee Trust or any successor trust approved by the board of directors of
Maine Yankee all funds collected hereunder for the express purpose of
decommissioning the Unit or removing the Unit from service and further
agrees that, after the tax consequences of decommissioning collections have
been resolved, any funds collected hereunder to meet Decommissioning Tax
Liability which are not used for that purpose will be refunded to the
Purchaser to the extent required by FERC.
10. Cancellation of Contract
If deliveries cannot be made to the Purchaser because either
(i) the Unit is damaged to the extent of being completely
or substantially completely destroyed, or
(ii) the Unit is taken by exercise of the right of eminent
domain or a similar right or power, or
(iii) (a) the Unit cannot be used because of contamination,
or because a necessary license or other necessary public
authorization cannot be obtained or is revoked, or because the
utilization of such a license or authorization is made subject to
specified conditions which are not met, and (b) the situation
cannot be rectified to an extent which will permit Maine Yankee
to make deliveries to the Purchaser from the Unit;
then and in any such case, the Purchaser may cancel the provisions of this
contract, except that in all cases other than those described in clause
(ii) above, the provisions relating to the payment of Total Decommissioning
Costs shall, whether or not the Unit is operated or operable and
notwithstanding any earlier termination of the service life of the Unit,
remain in full force and effect until the expiration of the term hereof, it
being recognized that such costs represent deferred payment in connection
with power theretofore delivered by Maine Yankee hereunder. Such
cancellation shall be effected by written notice given by the Purchaser to
maine Yankee. In the event of such cancellation, all continuing
obligations of the parties hereunder (other than the obligations relating
to the payment and application of Total Decommissioning Costs to the extent
that such obligations remain in full force and effect pursuant to the
second preceding sentence, but including the Purchaser's obligations to
continue payments pursuant to clauses (a), (c) and (d) of the first
paragraph of Section 7 hereof) shall cease forthwith. Notwithstanding the
foregoing, the applicable provisions of this contract shall continue in
effect after the cancellation hereof to the extent necessary to permit
final billings and adjustments hereunder with respect to obligations
incurred through the date of cancellation and the collection thereof. Any
dispute as to the Purchaser's right to cancel this contract pursuant to the
forgoing provisions shall be referred to arbitration in accordance with the
provisions of Section 14 hereof.
Notwithstanding anything in this contract elsewhere contained, the
Purchaser may cancel this contract or be relieved of its obligations to
make payments hereunder only as provided in the next preceding paragraph of
this Section 10. Further, if for reasons beyond Maine Yankee's reasonable
control, deliveries are not made as contemplated by this contract, Maine
Yankee shall have no liability to the Purchaser on account of such non-
delivery.
11. Insurance
Maine Yankee presently has in effect, and hereafter will at all times
maintain until the expiration of the term hereof, insurance to cover its
"public liability" for personal injury and property damage resulting from a
"nuclear incident" (as those terms are defined in the Act), with limits not
less than Maine Yankee may be required to maintain to qualify for
governmental indemnity under the Act and shall execute and maintain an
indemnification agreement with the NRC as provided by the Act. Maine
Yankee will also at all times maintain such other types of liability
insurance, including workmen's compensation insurance, in such amounts as
is customary in the case of other similar electric utility companies or as
may be required by law.
Maine Yankee will at all times keep insured such portions of the Unit
(other than the fuel assemblies and components, including nuclear
materials) as are of a character usually insured by electric utility
companies similarly situated and operating like properties, against the
risk of a "nuclear incident" ad such other risks as electric utility
companies, similarly situated and operating like properties, usually insure
against; and such insurance shall to the extent available be carried in
amounts sufficient to prevent Maine Yankee from becoming a co-insurer.
Maine Yankee will at all times keep its fuel assemblies and components
(including nuclear materials) insured against such risks and in such
amounts as shall, in the opinion of Maine Yankee, provide adequate
protection.
12. Additional Units
At any time after the date hereof Maine Yankee or its nominees may
install one or more additional generating units at the Wiscasset site. The
installation of such unit or units shall not affect the terms of this
contract, but in such case if any portion of the Unit (whether such portion
constitutes land, structures or equipment) is also used with an additional
unit or units, an appropriate allocation of the cost of the Unit shall be
made and the net Unit investment shall be reduced accordingly, subject,
however, to the limitation that the aggregate amount of the reduction in
net Unit investment resulting from all such allocations shall not exceed
$5,000,000. Maine Yankee may make any other necessary allocations or any
necessary adjustments in its accounts with respect to the Unit (including
fuel assemblies and components) and any additional unit or units, and such
allocations and adjustments shall be binding on the sponsors.
13. Audit
Maine Yankee's books and records (including metering records) shall be
open to reasonable inspection and audit by the Purchaser.
14. Arbitration
In case any dispute shall arise as to the interpretation or
performance of this contract which cannot be settled by mutual agreement
and which may be finally determined by arbitration under the law of the
State of Maine then in effect, such dispute shall be submitted to
arbitration, and arbitration of such dispute shall be a condition precedent
to any action at law or suit in equity that can be brought. The parties
shall if possible agree upon a single arbitrator. In case of failure to
agree upon an arbitrator within 15 days after the delivery by either party
to the other of a written notice requesting arbitration, either party may
request the American Arbitration Association to appoint the arbitrator.
The arbitrator, after opportunity for each of the parties to be heard,
shall consider and decide the dispute and notify the parties in writing of
his decision. The expenses of the arbitration shall be borne equally by
the parties.
15. Regulation
This contract, and all rights, obligations and performance of the
parties hereunder, are subject to all applicable state and federal law and
to all duly promulgated orders and other duly authorized action of
governmental authority having jurisdiction in the premises.
16. Assignment
This contract shall be binding upon and shall inure to the benefit of,
and may be performed by, the successors and assigns of the parties, except
that no assignment, pledge or other transfer of this contract by either
party shall operate to release the assignor, pledgor or transferor from any
of its obligations under this contract unless consent to the release is
given in writing by the other party, or, if the other party has theretofore
assigned, pledged or otherwise transferred its interest in this contract,
by the other party's assignee, pledgee or transferee, or unless such
transfer is incident to a merger or consolidation with, or transfer of all
or substantially all of the assets of the transferor to, another sponsor
which shall, as a part of such succession, assume all the obligations of
the transferor under this contract.
17. Right of Setoff
The Purchaser shall not be entitled to set off against the payments
required to be made by it under this contract (i) any amounts owed to it by
Maine Yankee or (ii) the amount of any claim by it against Maine Yankee.
However, the foregoing shall not affect in any other way the Purchaser's
right and remedies with respect to any such amounts owed to it by Maine
Yankee or any such claim by it against Maine Yankee.
18. Amendments
Upon authorization by Maine Yankee's board of directors of uniform
amendments to all the Additional Power Contracts with sponsors, Maine
Yankee shall have the right to amend the provisions of Section 7 hereof
insofar as they relate to the amounts collectible by Maine Yankee pursuant
to clause (b) of the first paragraph of Section 7 hereof or to the timing
of such collections by serving an appropriate statement of such amendment
upon the Purchaser and filing the same with FERC (or such other regulatory
agency as may have jurisdiction in the premises) in accordance with the
provisions of applicable laws and any rules and regulations thereunder, and
the amendment shall thereupon become effective on the date specified
therein, subject to any suspension order issued by such agency. All other
amendments to this contract shall be by mutual agreement, evidenced by a
written amendment signed by the parties hereto.
19. Interpretation
The interpretation and performance of this contract shall be in
accordance with and controlled by the law of the State of Maine.
20. Addresses
Except as the parties may otherwise agree, any notice, request, bill
or other communication from one party to the other, relating to this
contract, or the rights, obligations or performance of the parties
hereunder, shall be in writing and shall be effective upon delivery to the
other party. Any such communication shall be considered as duly delivered
when delivered in person or mailed by registered or certified mail, postage
prepaid, to the post office address of the other party shown following the
signature of such other party hereto, or such other address as may be
designated by written notice given as provided in this Section 20.
21. Corporate Obligations
This contract is the corporate act and obligation of the parties
hereto, and any claim hereunder against any stockholder (other than the
Purchaser), director or officer of either party, as such, is expressly
waived.
22. All Prior Agreements Superseded
This contract represents the entire agreement between the parties
relating to the subject matter hereof during the operative term hereof
(i.e., post-January 1, 2003), and all previous agreements, discussions,
communications and correspondence with respect to the subject matter are
hereby superseded and are of no further force and effect.
IN WITNESS WHEREOF, the parties have executed this contract by their
respective officers thereunto duly authorized as of the date first above
written.
MAINE YANKEE ATOMIC POWER COMPANY
By
President
Edison Drive
Augusta, Maine 04336
PURCHASER
By
Exhibit 10.10.2
Form of
Amendment No. 2 to
Vermont Yankee Power Contract
AMENDMENT, dated as of April 15, 1983, between VERMONT YANKEE NUCLEAR
POWER CORPORATION ("Vermont Yankee"), a Vermont corporation and
(the "Purchaser") to the Power Contract,
dated as of February 1, 1968, as amended as of June 1, 1972, between
Vermont Yankee and the Purchaser.
It is agreed that, in order to provide for the accrual of an
appropriate fund for decommissioning the Vermont Yankee nuclear generating
plant at the end of its useful life, said Power Contract is hereby amended
as follows:
1. The second paragraph of Section 7 is hereby amended to insert
the clause "or, in the case of payments under clause (b) below, commencing on
or after the date authorized by FERC" and the clause "plus (b) the Total
Decommissioning Costs for the month with respect to the Unit," and to
reletter the two final clauses, so that the entire paragraph reads as
follows:
"With respect to each month commencing on or after the plant
completion date or, in the case of payments under clause (b)
below, commencing on or after the date authorized by FERC, the
Purchaser will pay Vermont Yankee an amount equal to the
Purchaser's entitlement percentage of the sum of (a) Vermont
Yankee's total fuel costs for the month with respect to the Unit,
plus (b) the Total Decommissioning Costs for the month with
respect to the Unit, plus (c) Vermont Yankee's total operating
expenses for the month with respect to the Unit, plus (d) an
amount equal to one-twelfth of the composite percentage for such
month of the net Unit investment as most recently determined in
accordance with this Section 7."
2. Section 7 is further amended by inserting therein immediately
preceding the ultimate paragraph thereof the following three paragraphs:
"Total Decommissioning Costs" for any month shall mean the
sum of (x) an amount equal to all accruals in such month to any
reserve, as from time to time established by Vermont Yankee and
approved by its board of directors, to provide for the ultimate
payment of the Decommissioning Expenses of the Unit plus
(y) Decommissioning Tax Liability for such month. It is
understood (i) that such funds may be held by Vermont Yankee or,
if required, by an independent trust or other separate fund, as
determined by said board of directors, (ii) that, upon compliance
with Section 20 hereof, the amount, custody and/or timing of such
accruals may from time to time during the term hereof be modified
by said board of directors in its discretion or to comply with
applicable statutory or regulatory requirements or to reflect
changes in the amount, custody or timing of anticipated
Decommissioning Expenses, and (iii) that the use of the term "to
decommission" herein encompasses compliance with all requirements
(other than those relating to spent nuclear fuel) of the Nuclear
Regulatory Commission or its successors (NRC) for permanent
cessation of operation of a nuclear facility.
"Decommissioning Expenses" shall include:
(1) All costs and expenses of removing the Unit from service,
including without limitation, dismantling, mothballing,
removing radioactive material (excluding spent nuclear fuel)
to temporary and/or permanent storage sites,
decontaminating, restoring and supervising the site, and any
costs and expenses incurred in connection with proceedings
before governmental regulatory authorities relating to any
authorization to decommission the Unit or remove the Unit
from service;
(2) All costs of labor and services, whether directly or
indirectly incurred, including without limitation services
of foremen, inspectors, supervisors, surveyors, engineers,
security personnel, counsel and accountants, performed or
rendered in connection with the decommissioning of the Unit
and the removal of the Unit from service, and all costs of
materials, supplies, machinery, construction equipment and
apparatus acquired or used (including rental charges for
machinery, equipment or apparatus hired) for or in
connection with the decommissioning of the Unit and the
removal of the Unit from service, and all administrative
costs, including services of counsel and financial advisers,
of any applicable independent trust or other separate fund;
it being understood that any amount, exclusive of proceeds
of insurance, realized by Vermont Yankee as salvage on any
machinery, construction equipment and apparatus, the cost of
which was charged to Decommissioning Expense, shall be
treated as a reduction of the amounts otherwise chargeable
on account of the costs of decommissioning of the Unit; and
(3) All overhead costs applicable to the Unit during its
decommissioning period, including, without limiting the
generality of the foregoing, taxes (other than taxes on or
in respect of income), licenses, excises, and assessments,
casualties, surety bond premiums and insurance premiums.
"Decommissioning Tax Liability" for any month shall be an
amount established by Vermont Yankee and approved by its board of
directors to meet possible income tax obligations, which amount
shall not exceed: the amount to be included in the clause (x)
portion of Total Decommissioning Costs for such month multiplied
by a fraction whose numerator is equal to the combined highest
statutory federal and state marginal income tax rate and whose
denominator is equal to one minus the combined highest statutory
federal and state marginal income tax rate. Vermont Yankee will
use its best efforts to obtain as promptly as possible favorable
tax treatment of the payments for Total Decommissioning Costs
hereunder so that Decommissioning Tax Liability may be minimized.
Without limiting the generality of the foregoing, amounts
expended or to be paid with respect to decommissioning of the
Unit or removal of the Unit from service shall constitute part of
the Decommissioning Expenses if they are, or when paid will be,
either (i) properly chargeable to any account related to
decommissioning of a nuclear generating unit in accordance with
the Uniform System or generally accepted accounting principles as
then in effect, or (ii) properly chargeable to decommissioning of
a nuclear generating unit in accordance with then applicable
regulations of the NRC or the Federal Energy Regulatory
Commission or its successors (FERC) or any other regulatory
agency having jurisdiction."
3. A new Section 7A is hereby inserted therein immediately
following Section 7 thereof as follows:
"7A. Decommissioning Fund.
Vermont Yankee agrees to cause an appropriate
decommissioning fund to be established in accordance with
applicable regulatory requirements. It is anticipated that FERC
may require an independent trust or other separate fund to be
created which will have the necessary powers to hold and invest
all funds collected for the decommissioning of the Unit and to
disburse the same to pay, or to reimburse Vermont Yankee for,
such costs when actually incurred for decommissioning of the Unit
or removal of the Unit from service. If during the term of such
trust or fund federal or state legislation or regulations are
promulgated which so permit or require, or an alternative entity
is created for funding decommissioning of the Unit, such trust
will have the authority, with the concurrence of Vermont Yankee,
to transfer its trust estate to such newly authorized entity for
the purpose of providing for the decommissioning of the Unit or
removal of the Unit from service.
Vermont Yankee agrees to pay to, or cause to be paid to,
said decommissioning fund or trust all funds collected hereunder
for the express purpose of decommissioning the Unit or removing
the Unit from service and further agrees that, after the tax
consequences of decommissioning collections have been resolved,
any funds collected hereunder to meet Decommissioning Tax
Liability which are not used for that purpose will be refunded as
Purchaser."
4. The last five lines of the first paragraph of Section 9
following clause (iii) thereof are hereby amended to read as follows:
"then and in any such case, the Purchaser may cancel the
provisions of this contract, except that in all cases other than
those described in clause (ii) above, the provisions relating to
the payment of Total Decommissioning Costs shall, whether or not
the Unit is operated or operable and notwithstanding any earlier
termination of the service life of the Unit, remain in full force
and effect until December 31, 2002 or the completion of
decommissioning, whichever is earlier. Such cancellation shall
be effected by written notice given by the Purchaser to Vermont
Yankee. In the event of such cancellation, all continuing
obligations of the parties other than the obligations relating to
the payment and application of Total Decommissioning Costs to the
extent excluded from such cancellation by the second preceding
sentence, but including the Purchaser's obligations to continue
payments pursuant to clauses (a), (c), and (d) of the second
paragraph of Section 7 hereof, shall cease forthwith. Any
dispute as to the Purchaser's right to cancel this contract
pursuant to the foregoing provisions shall be referred to
arbitration in accordance with the provisions of Section 12.
5. A new Section 20 is inserted therein as follows:
"20. Amendments
Upon authorization by Vermont Yankee's board of directors of
uniform amendments to all the sponsor power contracts, Vermont
Yankee shall have the right to amend the provisions of Section 7
hereof insofar as they relate to the amounts collectible by
Vermont Yankee pursuant to clause (b) of the second paragraph of
Section 7 hereof or to the timing of such collections by serving
an appropriate statement of such amendment upon the Purchaser and
filing the same with FERC (or such other regulatory agency as may
have jurisdiction in the premises) in accordance with the
provisions of applicable laws and any rules and regulations
thereunder, and the amendment shall thereupon become effective on
the date specified therein, subject to any suspension order duly
issued by such agency. All other amendments to this contract
shall be by mutual agreement, evidenced by a written amendment
signed by the parties hereto."
This Amendment No. 2 shall become effective on April 24, 1983, subject
to any suspension order duly issued by the Federal Energy Regulatory
Commission.
IN WITNESS WHEREOF, the parties have executed this amendment by their
respective officers duly authorized as of the day and year first named
above.
VERMONT YANKEE NUCLEAR POWER CORPORATION
By ______________________________
President
R.D. 5, Ferry Road, Box 169
Brattleboro, Vermont 05301
PURCHASER
By ______________________________
(Officer)
Exhibit 10.10.9
FORM OF
ADDITIONAL POWER CONTRACT, dated as of February 1, 1984, between
VERMONT YANKEE NUCLEAR POWER CORPORATION ("Vermont Yankee"), a Vermont
corporation, and (the "Purchaser").
It is agreed as follows:
1. Basic Understandings
Vermont Yankee was organized in 1966 to provide for the supply of
power to its sponsoring utility companies (including the Purchaser), which
utilities are hereinafter called the "sponsors". It constructed a nuclear
electric generating unit of the boiling water type, having a maximum net
capability of approximately 540 megawatts electric, at a site adjacent to
the Connecticut River at Vernon, Vermont (said unit being herein, together
with the site and all related facilities owned or to be owned by Vermont
Yankee, referred to as the "Unit"). On February 28, 1973 Vermont Yankee
was issued a full-term, operating license for the Unit from the Atomic
Energy Commission (now the Nuclear Regulatory Commission which, together
with any successor agency or agencies, is hereafter called the "NRC"),
which license expires on December 11, 2007, and the Unit commenced
commercial operation on November 30, 1972.
The Unit is operated to supply power to Vermont Yankee's sponsors,
each of which by a Power Contract dated as of February 1, 1968, as amended
(collectively the "Initial Power Contracts"), has undertaken to purchase a
fixed percentage of the capacity and output of the Unit for a term
extending through November 30, 2002. The names of the sponsors and their
respective percentages ("entitlement percentages") of the capacity and
output of the Unit are as follows:
Entitlement
Sponsor Percentage
Central Vermont Public Service Corporation 35.0%
Green Mountain Power Corporation 20.0%
New England Power Company 20.0%
The Connecticut Light and Power Company 9.5%
Central Maine Power Company 4.0%
Public Service Company of New Hampshire 4.0%
Western Massachusetts Electric Company 2.5%
Montaup Electric Company 2.5%
Cambridge Electric Light Company 2.5%
The sponsors have resold portions of their entitlement percentages of
capacity and output of the Unit under the Initial Power Contracts to other
utilities (the "secondary purchasers") on terms and conditions
substantially equivalent to those in the Initial Power Contracts: in 1969,
the two Vermont sponsors resold an aggregate of 7.426% of the Unit's
capacity and output to other utilities in Vermont; and in 1970 the non-
Vermont sponsors resold an aggregate of 4.5451% of the Unit's capacity and
output to other New England utilities outside of Vermont (collectively the
"Resale Contracts"). In 1983 the Initial Power Contracts were amended to
incorporate provisions for collection of funds to defray the ultimate cost
of decommissioning the Unit, which costs are being borne pro rata by said
secondary purchasers under the Resale Contracts.
Vermont Yankee and its sponsors desire to provide for the orderly
continuation of the sale and purchase of the capacity and output of the
Unit during the useful life of the Unit to the extent it continues beyond
the termination date of the Initial Power Contracts and to provide
appropriate provisions for the collection of funds for and the payment of
decommissioning and any other costs with respect thereto both during and
after the useful life of the Unit. Vermont Yankee and its other sponsors
are entering into Additional Power Contracts which are identical to this
contract except for necessary changes in the names of the parties.
2. Effective Date, Term and Waiver
This contract shall become effective upon receipt by the Purchaser of
notice that Vermont Yankee has entered into additional power contracts, as
contemplated by Section 1 above, with each of its other sponsors. The
operative term of this contract shall commence on December 1, 2002
notwithstanding the fact that the useful service life of the Unit may have
been terminated prior to that date, and shall terminate upon the later to
occur of (i) 30 days after the date on which the last of the financial
obligations of Vermont Yankee which constitute elements of the purchase
price calculated pursuant to Section 7 of this contract has been
extinguished by Vermont Yankee or (ii) 30 days after the date on which
Vermont Yankee is finally relieved of any obligations under the last of any
licenses (operating and/or possessory) which it now holds from, or which
may hereafter be issued to it by, the NRC with respect to the Unit under
applicable provisions of the Atomic Energy Act of 1954, as amended from
time to time (the "Act").
Vermont Yankee and the Purchaser acknowledge that, if the useful
service life of the Unit is terminated prior to December 1, 2002, then only
the provisions of this contract applicable to decommissioning of the Unit
will apply during the operative term of this contract.
The Purchaser hereby irrevocably waives its right to extend the
contract term of its Initial Power Contract pursuant to subsections (a) or
(b) of Section 8 thereof.
3. Operation and Maintenance of the Unit
Vermont Yankee will operate and maintain the Unit in accordance with
good utility practice under the circumstances and all applicable law,
including the applicable provisions of the Act and of any licenses issued
thereunder to Vermont Yankee. Within the limits imposed by good utility
practice under the circumstances and applicable law, the Unit will be
operated at its maximum capability and on a long hour use basis.
Outages for inspection, maintenance, refueling and repairs and
replacements will be scheduled in accordance with good utility practice and
insofar as practicable shall be mutually agreed upon by Vermont Yankee and
the Purchaser. In the event of an outage, Vermont Yankee will use its best
efforts to restore the Unit to service as promptly as practicable.
4. Decommissioning
After commercial operation of the Unit permanently ceases, Vermont
Yankee will decommission the Unit in a manner authorized by Vermont
Yankee's board of directors and approve by the NRC in accordance with the
Act and the rules and regulations thereunder then in effect and by any
agency having jurisdiction over decommissioning of the Unit.
It is understood that, pursuant to the Initial Power Contracts and the
Resale Contracts, the sponsors and secondary purchasers are currently being
billed for Total Decommissioning Costs which, as of the date of this
contract, are being accumulated in a separate fund which was established
for the purpose of reimbursing Vermont Yankee for Decommissioning Expenses
incurred in the process of decommissioning the Unit and that such billings
are subject to change in accordance with the provisions of the Initial
Power Contracts, subject to the jurisdiction of FERC. It is contemplated
that sufficient funds will be accumulated pursuant to those contracts and
paragraph 7 hereof to reimburse Vermont Yankee for the full cost of
decommissioning the Unit.
5. Purchaser's Entitlement
The Purchaser will, throughout the term of this contract, be entitled
and obligated to take its entitlement percentage of the capacity and net
electrical output of the Unit, at whatever level the Unit is operated or
operable, whether more or less than 540 megawatts electric.
6. Deliveries and Metering
The Purchaser's entitlement percentage of the output of the Unit will
be delivered to and accepted by it at the step-up substation at the site.
All deliveries will be made in the form of 3-phase, 60 cycle, alternating
current at a nominal voltage of 345,000 volts. The Purchaser will make its
own arrangements for the transmission of its entitlement percentage of the
output of the Unit.
Vermont Yankee will supply and maintain all necessary metering
equipment for determining the quantity and conditions of supply of
deliveries under this contract, will make appropriate tests of such
equipment in accordance with good utility practice and as reasonably
requested by the Purchaser, and will maintain the accuracy of such
equipment within reasonable limits. Vermont Yankee will furnish the
Purchaser with such summaries of meter readings as the Purchaser may
reasonably request.
7. Payment
With respect to each month commencing on or after December 1, 2002,
the Purchaser will pay Vermont Yankee an amount equal to the Purchaser's
entitlement percentage of the sum of (a) Vermont Yankee's total fuel costs
for the month with respect to the Unit, plus (b) the Total Decommissioning
Costs for the month with respect to the Unit, plus (c) Vermont Yankee's
total operating expenses for the month with respect to the Unit, plus
(d) an amount equal to one-twelfth of the composite percentage for such
month of the net Unit investment as most recently determined in accordance
with this Section 7.
"Composite percentage" shall be computed as of the last day of each
month during the term hereof (the "computation date") and for any month the
composite percentage shall be that computed as of the most recent
computation date. "Composite percentage" as of a computation date shall be
the sum of (i) the equity percentage as of such date multiplied by the
percentage which equity investment as of such date is of the total capital
as of such date; plus (ii) the stated interest rate per annum of each
principal amount of indebtedness bearing a particular rate of interest
outstanding on such date for money borrowed from other than sponsors
multiplied by the percentage which such principal amount is of total
capital as of such date.
"Equity percentage" as of any date after the commencement of the
operative term hereof shall be that percentage which was the "equity
percentage" in effect on the last day of the term of the Initial Power
Contracts or such other percentage as may from time to time thereafter be
approved by the Federal Energy Regulatory Commission or any successor
agency thereto ("FERC").
"Common stock equity investment" as of any date shall consist of
equity investment as of such date less the aggregate par value of all
issues of preferred stock outstanding on such date.
"Equity investment" as of any date shall consist of not less than the
sum of (i) all amounts theretofore paid to Vermont Yankee for all capital
stock theretofore issued (taken at the total par value thereof plus the
total of all amounts in excess of such par value paid thereon); plus all
capital contributions, loans and advances theretofore made to Vermont
Yankee by its sponsors, less the sum of any amounts distributed by Vermont
Yankee to its sponsors or stockholders in the form of stock repurchases or
redemptions, return of capital or repayments of loans and advances; plus
(ii) any credit balance in the capital surplus account (not included under
(i)) and in the earned surplus account on the books of Vermont Yankee as of
such date.
"Total capital" as of any date shall be the equity investment plus the
total of all indebtedness then outstanding for money borrowed from other
than Vermont Yankee's sponsors.
"Uniform System" shall mean the Uniform System of Accounts prescribed
by the FERC for Class A and Class B Public Utilities and Licensees as from
time to time in effect.
Vermont Yankee's "fuel costs" for any month shall include (i) amounts
chargeable in accordance with the Uniform System in such month as
amortization of costs of fuel assemblies and components and burn-up of
nuclear materials for the Unit; plus (ii) all other amounts properly
chargeable in accordance with the Uniform System to fuel costs for the Unit
less any applicable credits thereto; plus (iii) to the extent not so
chargeable, all payments (or accruals therefor) with respect to lease or
other financing obligations incurred in connection with such fuel
assemblies and components. Including nuclear materials, for the Unit
(provided such fuel assemblies and components are not included in net Unit
investment), and with the temporary or permanent storage or disposal
thereof.
Vermont Yankee's "operating expenses" shall include all amounts
properly chargeable to operating expense accounts (other than such amounts
which are included in Vermont Yankee's fuel costs), less any applicable
credits thereto, in accordance with the Uniform System; it being understood
that for purposes of this contract "operating expenses" shall include
(i) depreciation accrual at a rate at least sufficient to fully amortize
the non-salvageable plant investment over the estimated remaining useful
life of the plant; and (ii) obligations incurred in connection with the
leasing of plant facilities.
The "net Unit investment" shall consist, in each case with respect to
the Unit, of (i) the aggregate amount properly chargeable at the time in
accordance with the Uniform System to Vermont Yankee's electric plant
accounts (including construction work in progress) less the amount of any
accumulated provisions for depreciation thereof; plus (ii) the aggregate
amount properly chargeable at the time in accordance with the Uniform
System to accounts representing fuel assemblies and components (including
nuclear materials) and other materials and supplies, less the balance, if
any, at the time of the accumulated amortization thereof; plus (iii) such
reasonable allowances for prepaid items and cash working capital as may
from time to time be determined by Vermont Yankee. The net Unit investment
shall be determined as of the commencement of each calendar year, or, if
Vermont Yankee elects, at more frequent intervals.
"Total Decommissioning Costs" for any month shall mean the sum of
(x) an amount equal to all accruals in such month to any reserve, as from
time to time established by Vermont Yankee and approved by its board of
directors, to provide for the ultimate payment of the Decommissioning
Expenses of the Unit plus (y) Decommissioning Tax Liability for such month.
It is understood (i) that such funds may be held by Vermont Yankee or by an
independent trust or other separate fund, as determined by said board of
directors, (ii) that, upon compliance with Section 17 hereof, the amount,
custody and/or timing of such accruals may from time to time during the
term hereof be modified by said board of directors in its discretion or to
comply with applicable statutory or regulatory requirements or to reflect
changes in the amount, custody or timing of anticipated Decommissioning
Expenses, and (iii) that the use of the term "to decommission" herein
encompasses compliance with all requirements (other than those relating to
spent nuclear fuel) of the NRC for permanent cessation of operation of a
nuclear facility and any other activities reasonably related thereto.
"Decommissioning Expenses" shall include:
(1) All costs and expenses of removing the Unit from service,
including without limitation, dismantling, mothballing, removing
radioactive material (excluding spent nuclear fuel) to temporary
and/or permanent storage site, decontaminating, restoring and
supervising the site, and any costs and expenses incurred in
connection with proceedings before governmental regulatory
authorities relating to any authorization to decommission the
Unit or remove the Unit from service;
(2) All costs of labor and services, whether directly or indirectly
incurred, including without limitation services of foremen,
inspectors, supervisors, surveyors, engineers, security
personnel, counsel and accountants, performed or rendered in
connection with the decommissioning of the Unit and the removal
of the Unit from service, and all costs of materials, supplies,
machinery, construction equipment and apparatus acquired or used
(including rental charges for machinery, equipment or apparatus
hired) for or in connection with the decommissioning of the Unit
and the removal of the Unit from service, and all administrative
costs, including services of counsel and financial advisers, of
any applicable independent trust or other separate fund; it being
understood that any amount, exclusive of proceeds of insurance,
realized by Vermont Yankee as salvage on any machinery,
construction equipment and apparatus, the cost of which was
charged to Decommissioning Expense, shall be treated as a
reduction of the amounts otherwise chargeable on account of the
costs of decommissioning of the Unit; and
(3) All overhead costs applicable to the Unit during its
decommissioning period, including, without limiting the
generality of the foregoing, taxes (other than taxes on or in
respect of income), charges, licenses, excises and assessments,
casualties, surety bond premiums and insurance premiums.
"Decommissioning Tax Liability" for any month shall be an amount
established by Vermont Yankee and approved by its board of directors to
meet possible income tax obligations, which amount shall not exceed: the
amount to be included in the clause (x) portion of Total Decommissioning
Costs for such month multiplied by a fraction whose numerator is equal to
the combined highest statutory Federal and state marginal income tax rate
and whose denominator is equal to one minus the combined highest statutory
Federal and state marginal income tax rate.
Without limiting the generality of the foregoing, amounts expended or
to be paid with respect to decommissioning of the Unit or removal of the
Unit from service shall constitute part of the Decommissioning Expenses if
they are, or when paid will be, either (i) properly chargeable to any
account related to decommissioning of a nuclear generating unit in
accordance with the Uniform System or generally accepted accounting
principles as then in effect, or (ii) properly chargeable to
decommissioning of a nuclear generating unit in accordance with then
applicable regulations of the NRC or the FERC or any other regulatory
agency having jurisdiction.
8. Billing
Vermont Yankee will bill the Purchaser, as soon as practicable after
the end of each month, for all amounts payable by the Purchaser with
respect to the particular month pursuant to Section 7 hereof. Such bills
will be rendered in such detail as the Purchaser may reasonably request and
may be rendered on an estimated basis subject to corrective adjustments in
subsequent billing periods. All bills shall be due and payable when
rendered and any amount remaining unpaid 10 days following the date of
issuance of bills should bear interest at an annual rate equal to 2% in
excess of the current prime rate then in effect at The First National Bank
of Boston, from the due date to the date payment is received by Vermont
Yankee.
9. Decommissioning Fund
Vermont Yankee agrees to cause an appropriate decommissioning reserve
to be maintained in accordance with applicable regulatory requirements. As
of the date hereof, FERC has required an independent trust or other
separate fund to be created which has the necessary powers to hold and
invest all funds collected for the decommissioning of the Unit and to
disburse the same to pay, or to reimburse Vermont Yankee for, such costs
when actually incurred for decommissioning of the Unit or removal of the
Unit from service. If during the term of such trust or fund federal or
state legislation or regulations are promulgated which so permit or
require, or an alternative entity is created for funding decommissioning of
the Unit, such trust has the authority, with the concurrence of Vermont
Yankee, to transfer its trust estate to such newly authorized entity for
the purpose of providing for the decommissioning of the Unit or removal of
the Unit from service.
Vermont Yankee agrees to credit to, or cause to be credited to, the
appropriate decommissioning reserve all funds collected hereunder for the
express purpose of decommissioning the Unit or removing the Unit from
service and further agrees that, after the tax consequence of
decommissioning collections have been resolved, any funds collected
hereunder to meet Decommissioning Tax Liability which are not used for that
purpose will be refunded to Purchaser.
10. Cancellation of Contract
If deliveries cannot be made to the Purchaser because either
(i) the Unit is damaged to the extent of being completely or
substantially completely destroyed, or
(ii) the Unit is taken by exercise of the right of eminent domain
or a similar right or power, or
(iii) (a) the Unit cannot be used because of contamination, or
because a necessary license or other necessary public authorization
cannot be obtained or is revoked, or because the utilization of such a
license or authorization is made subject to specified conditions which
are not met, and (b) the situation cannot be rectified to an extent
which will permit Vermont Yankee to make deliveries to the Purchaser
from the Unit;
then and in any such case, the Purchaser may cancel the provisions of this
contract, except that in all cases other than those described in clause
(ii) above, the provisions relating to the payment of Total Decommissioning
Costs and of costs of permanent storage or disposal of spent nuclear fuel
shall, whether or not the Unit is operated or operable and notwithstanding
any earlier termination of the service life of the Unit, remain in full
force and effect until the expiration of the term hereof, it being
recognized that such costs represent deferred payments in connection with
power theretofore delivered by Vermont Yankee hereunder. Such cancellation
shall be effected by written notice given by the Purchaser to Vermont
Yankee. In the event of such cancellation, all continuing obligations of
the parties hereunder as to subsequently incurred costs of Vermont Yankee
other than the obligations relating to the payment and application of Total
Decommissioning Costs and of costs of permanent storage or disposal of
spent nuclear fuel to the extent excluded from such cancellation by the
second preceding sentence, but including the Purchaser's obligations to
continue payments pursuant to clause (a) (other than those related to the
costs of permanent storage or disposal of spent nuclear fuel, and clauses
(c) and (d) of the first paragraph of Section 7 hereof, shall cease
forthwith. Notwithstanding the foregoing, the applicable provisions of
this contract shall continue in effect after the cancellation hereof to the
extent necessary to permit final billings and adjustments hereunder with
respect to obligations incurred through the date of cancellation and the
collection thereof. Any dispute as to the Purchaser's right to cancel this
contract pursuant to the foregoing provisions shall be referred to
arbitration in accordance with the provisions of Section 13.
Notwithstanding anything in this contract elsewhere contained, the
Purchaser may cancel this contract or be relieved of its obligations to
make payments hereunder only as provided in the next preceding paragraph of
this Section 10. Further, if for reasons beyond Vermont Yankee's
reasonable control, deliveries are not made as contemplated by this
contract, Vermont Yankee shall have no liability to the Purchaser on
account of such non-delivery.
11. Insurance
Vermont Yankee presently has in effect, and hereafter will at all
times maintain until the expiration of the term hereof, insurance to cover
its "public liability" for personal injury and property damage resulting
from a "nuclear incident" (as those terms are defined in the Act), with
limits not less than Vermont Yankee may be required to maintain to qualify
for governmental indemnity under the Act and shall execute and maintain an
indemnification agreement with the NRC as provided by the Act. Vermont
Yankee will also at all times maintain such other types of liability
insurance, including workmen's compensation insurance, in such amounts, as
is customary in the case of other similar electric utility companies, or as
may be required by law.
Vermont Yankee will at all times keep insured such portions of the
Unit (other than the fuel assemblies and components, including nuclear
materials) as are of a character usually insured by electric utility
companies similarly situated and operating like properties, against the
risk of a "nuclear incident" and such other risks as electric utility
companies, similarly situated and operating like properties, usually insure
against; such insurance shall to the extent available, be carried in
amounts sufficient to prevent Vermont Yankee from becoming a co-insurer.
Vermont Yankee will at all times keep its fuel assemblies and components
(including nuclear materials) insured against such risks and in such
amounts as shall, in the opinion of Vermont Yankee, provide adequate
protection.
12. Audit
Vermont Yankee's books and records (including metering records) shall
be open to reasonable inspection and audit by the Purchaser.
13. Arbitration
In case any dispute shall arise as to the interpretation or
performance of this contract which cannot be settled by mutual agreement,
such dispute shall be submitted to arbitration. The parties shall if
possible agree upon a single arbitrator. In case of failure to agree upon
an arbitrator within 15 days after the delivery by either party to the
other of a written notice requesting arbitration, either party may request
the American Arbitration Association to appoint the arbitrator. The
arbitrator, after opportunity for each of the parties to be heard, shall
consider and decide the dispute and notify the parties in writing of his
decision. Such decision shall be binding upon the parties, and the
expenses of the arbitration shall be borne equally by them.
14. Regulation
This contract, and all rights, obligations and performance of the
parties hereunder, are subject to all applicable state and federal law and
to all duly promulgated orders and other duly authorized action of
governmental authority having jurisdiction in the premises.
15. Assignment
This contract shall be binding upon and shall inure to the benefit of,
and may be performed by, the successors and assigns of the parties, except
that not assignment, pledge or other transfer of this contract by either
party shall operate to release the assignor, pledgor or transferor from any
of its obligations under this contract unless consent to the release is
given in writing by the other party, or, if the other party has theretofore
assigned, pledged or otherwise transferred its interest in this contract,
by the other party's assigned, pledged or otherwise transferred its
interest in this contract, by the other party's assignee, pledgee or
transferee, or unless such transfer is incident to a merger or
consolidation with, or transfer of all or substantially all of the assets
of the transfer of all or substantially all of the assets of the transferor
to, another sponsor which shall, as a part of such succession, assume all
the obligations of the transferor under this contract.
16. Right of Setoff
The Purchaser shall not be entitled to set off against the payments
required to be made by it under this contract (i) any amounts owed to it by
Vermont Yankee or (ii) the amount of any claim by its against Vermont
Yankee. However, the foregoing shall not affect in any other way the
Purchaser's right and remedies with respect to any such claim by it against
Vermont Yankee.
17. Amendments
Upon authorization by Vermont Yankee's board of directors of uniform
amendments to all the Additional Power Contracts with sponsors, Vermont
Yankee shall have the right to amend the provisions of Section 7 hereof by
serving an appropriate statement of such amendment upon the Purchaser and
filing the same with FERC (or such other regulatory agency as may have
jurisdiction in the premises) in accordance with the provisions of
applicable laws and any rules and regulations thereunder, and the amendment
shall thereupon become effective on the date specified therein, subject to
any suspension order issued by such agency. All other amendments to this
contract shall be by mutual agreement, evidenced by a written amendment
signed by the parties hereto.
18. Interpretation
The interpretation and performance of this contract shall be in
accordance with and controlled by the law of the State of Vermont.
19. Addresses
Except as the parties may otherwise agree, any notice, request, bill
or other communication from one party to the other, relating to this
contract, or the rights, obligations or performance of the parties
hereunder, shall be in writing and shall be effective upon delivery to the
other party. Any such communication shall be considered as duly delivered
when delivered in person or mailed by registered or certified mail, postage
prepaid, to the respective post office address of the other party shown
following the signatures of such other party hereto, or such other address
as may be designated by written notice given as provided in this
Section 19.
20. Corporate Obligations
This contract is the corporate act and obligation of the parties
hereto, and any claim hereunder against any stockholder, director or
officer of either party, as such, is expressly waived.
21. All Prior Agreements Superseded
This contract represents the entire agreement between the parties
relating to the subject matter hereof during the operative term hereof
(i.e., post-December 1, 2002), and all previous agreements, discussions,
communications and correspondence with respect to the subject matter are
hereby superseded and are of no further force and effect.
IN WITNESS WHEREOF, the parties have executed this contract by their
respective officers thereunto duly authorized as of the date first above
written.
VERMONT YANKEE NUCLEAR POWER CORPORATION
By
President
R.D. 5, Ferry Road, Box 169
Brattleboro, Vermont 05301
PURCHASER
By
Exhibit 10.11.2
VERMONT YANKEE NUCLEAR POWER CORPORATION
FORM OF
AMENDMENT NO. 2
TO
CAPITAL FUNDS AGREEMENT
AMENDMENT NO. 2, dated as of September 1, 1993, between VERMONT YANKEE
NUCLEAR POWER CORPORATION ("Vermont Yankee"), a Vermont corporation, and
the "Sponsor"), a corporation, to
the Capital Funds Agreement dated as of February 1, 1968, as heretofore
amended (the "Capital Funds Agreement"), between Vermont Yankee and the
Sponsor.
Whereas, Vermont Yankee and its sponsoring utilities desire to extend
the term of their Capital Funds Agreements in order to facilitate Vermont
Yankee's financings and prevent the acceleration of some of Vermont
Yankee's outstanding First Mortgage Bonds.
Now, therefore, in consideration of the premises and other good and
valuable consideration, receipt of which is hereby acknowledged, Vermont
Yankee and the Sponsor hereby agree Section 2 of the Capital Funds
Agreement is hereby amended by striking the date "December 31, 2002" and
inserting in lieu thereof the date "March 21, 2012".
The parties hereto further agree that this Amendment No 2. shall
become effective upon receipt by the Sponsor of notice that Vermont Yankee
has entered into a similar amendment with each of its other sponsoring
utilities.
IN WITNESS WHEREOF, the parties have executed this amendment by their
respective officers thereunto duly authorized as of the date first above
written.
VERMONT YANKEE NUCLEAR POWER CORPORATION
By_____________________________________
SPONSOR
By______________________________________
Exhibit 10.17.11
(Conformed Copy)
FOURTEENTH AMENDMENT TO AGREEMENT FOR JOINT OWNERSHIP,
CONSTRUCTION AND OPERATION OF NEW HAMPSHIRE NUCLEAR UNITS
This Fourteenth Amendment to Agreement For Joint Ownership,
Construction and Operation of New Hampshire Nuclear Units (the Fourteenth
Amendment), made as of the 1st day of June, 1982, by and among Public
Service Company of New Hampshire, The United Illuminating Company, Bangor
Hydro-Electric Company, Central Maine Power Company, Central Vermont Public
Service Corporation, Commonwealth Electric Company (formerly New Bedford
Gas and Edison Light Company), The Connecticut Light and Power Company,
Fitchburg Gas and Electric Light Company, Hudson Light and Power
Department, Maine Public Service Company, Massachusetts Municipal Wholesale
Electric Company, Montaup Electric Company, New England Power Company, New
Hampshire Electric Cooperative, Inc., Taunton Municipal Lighting Plant and
Vermont Electric Cooperative, Inc. (the Participants).
WITNESSETH THAT:
WHEREAS, the Participants are parties to the Agreement for Joint
Ownership, Construction and Operation of New Hampshire Nuclear Units made
as of May 1, 1973, as heretofore amended by the amendatory agreements dated
May 24, 1974, June 21, 1974, September 25, 1974, October 25, 1974, January
31, 1975, April 18, 1979, April 25, 1979, June 8, 1979, October 11, 1979,
December 15, 1979, June 16, 1980 and December 31, 1980 (collectively the
Agreement); and
WHEREAS, the Participants desire to effect, in accordance with
(paragraph 29 of the Agreement, the amendments to the Agreement hereinafter
set forth:
NOW, THEREFORE, the Participants agree as follows:
1. Amendment to Paragraph 23 - Rights re Transfer of Ownership Shares
Paragraph 23 of the Agreement is hereby amended by adding after
paragraph 23.1 the following paragraph:
"23.2. Notwithstanding the provisions of paragraph 23.1 but
subject to the provisions of paragraph 32.5, any Participant may sell
all or any portion of its Ownership Share in particular nuclear fuel
provided that such Participant makes arrangements to lease the fuel
share so sold, that the terms of such sale and lease arrangements do
not adversely affect the rights and interests of the other
Participants in such particular nuclear fuel and in its use and
financing in accordance with this Agreement, and that such terms are
satisfactory to PSNH."
2. Amendment to Paragraph 32 - Miscellaneous
Paragraph 32.5 is hereby amended by striking out "paragraph 23" and
substituting therefor "paragraph 23.1".
3. Execution in Counterparts.
Any number of counterparts of this Fourteenth Amendment may be
executed and each shall have the same force and effect as an original
and as if all the parties to all of the counterparts had signed the
same instrument.
4. Effective Date of this Fourteenth Amendment.
When counterparts hereof have been executed by Participants having
Ownership Shares aggregating at least 80%, this Fourteenth Amendment
shall become effective in accordance with Paragraph 29 of the
Agreement.
IN WITNESS WHEREOF, each of the undersigned has caused this Fourteenth
Amendment to be signed by an authorized officer and its respective seal to
be affixed hereto on the date indicated but as of the date first above
written.
Witness: PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
s/ Florence B. Chase Bys/ W. C. Tallman (Seal)
Its Chairman
Date June 3, 1982
State of New Hampshire
County of Hillsborough
The foregoing instrument was acknowledged before me this 3rd day of
June, 1982, by W. C. Tallman, Chairman, of Public Service Company of New
Hampshire, a New Hampshire corporation, on behalf of the corporation.
s/ F. J. Coolbroth(Seal)
Notary Public
My Commission expires October 14, 1986
Witness: THE UNITED ILLUMINATING COMPANY
s/ Carlotta S. Shea Bys/ Leon A. Morgan (Seal)
Its Executive Vice President
Date June 9, 1982
State of Connecticut
County of New Haven
The foregoing instrument was acknowledged before me this 9th day of
June, 1982, by Leon A. Morgan, Executive Vice President, of The United
Illuminating Company, a Connecticut corporation, on behalf of the corpora-
tion.
s/ Richard F. Skinner(Seal)
Richard F. Skinner
Notary Public
My commission expires April 1, 1985
Witness: BANGOR HYDRO-ELECTRIC COMPANY
s/ Robert S. Briggs
Bys/ T. A. Greenquist (Seal)
Its President
DateJune 8, 1982
State of Maine
County of Penobscot
The foregoing instrument was acknowledged before me this 8th day of
June, 1982, by T. A. Greenquist, President, of Bangor Hydro-Electric
Company, a Maine corporation, on behalf of the corporation.
s/ Robert S. Briggs(Seal)
Witness: CENTRAL MAINE POWER COMPANY
s/ Judith Sargent Bys/ E. W. Thurlow (Seal)
Its President
DateJune 7, 1982
State of Maine
County of Kennebec
The foregoing instrument was acknowledged before me this 7th day of
June, 1982, by E. W. Thurlow, President, of Central Maine Power Company, a
Maine corporation, on behalf of the corporation.
s/ William M. Finn(Seal)
Notary Public
My commission expires September 16, 1984
Witness: CENTRAL VERMONT PUBLIC SERVICE CORPORATION
s/ Beverly H. Merrett Bys/ James E. Griffin (Seal)
Its President
DateJune 10, 1982
State of Vermont
County of Rutland
The foregoing instrument was acknowledged before me this 10th day of
June, 1982, by James E. Griffin, President, of Central Vermont Public
Service Corporation, a Vermont corporation, on behalf of the corporation.
s/ Olga G. Laird(Seal)
Notary Public
Witness: COMMONWEALTH ELECTRIC COMPANY
(Formerly New Bedford Gas and Edison Light Company)
CANAL ELECTRIC COMPANY
s/ M. P. Sullivan Bys/ E. G. Cheney (Seal)
Its Financial Vice President
DateJune 10, 1982
Commonwealth of Massachusetts
County of Middlesex
The foregoing instrument was acknowledged before me this 10th day of
June, 1982, by E. G. Cheney, Financial Vice President, of Commonwealth
Electric Company, Canal Electric Company, a Massachusetts corporation, on
behalf of the corporation.
s/ Michael P. Sullivan(Seal)
Notary Public
Witness: THE CONNECTICUT LIGHT AND POWER COMPANY
s/ Walter F. Torrance, Jr. By s/ W. T. Schultheis (Seal)
Its Vice President
DateJune 10, 1982
State of Connecticut
County of Hartford
The foregoing instrument was acknowledged before me this 10th day of
June, 1982, by Walter T. Schultheis, Vice President, of The Connecticut
Light and Power Company, a Connecticut corporation, on behalf of the
corporation.
s/ Janet E. Spencer(Seal)
Janet E. Spencer
Notary Public
My commission expires 3/31/85
Witness: FITCHBURG GAS AND ELECTRIC LIGHT COMPANY
s/ Bruce R. Garlick Bys/ Howard W. Evirs, Jr.(Seal)
Its President
DateJune 17, 1982
Commonwealth of Massachusetts
County of Worcester
The foregoing instrument was acknowledged before me this 17th day of
June, 1982, by Howard W. Evirs, Jr., President, of Fitchburg Gas and
Electric Light Company, a Massachusetts corporation, on behalf of the
corporation.
s/ John A. Haven(Seal)
My commission expires April 2, 1987
Witness: HUDSON LIGHT AND POWER DEPARTMENT
s/ Mary Ann Kenyon Bys/ Horst Huehmer (Seal)
Its Manager
Date7/16/82
Commonwealth of Massachusetts
County of Middlesex
The foregoing instrument was acknowledged before me this 16th day of
July, 1982, by Horst Huehmer, Manager, of Hudson Light and Power
Department, an agency of a Massachusetts municipal corporation, on behalf
of the corporation.
s/ George E. Thompson(Seal)
Witness: MAINE PUBLIC SERVICE COMPANY
s/ Glenna M. Briggs Bys/ R. A. Brown (Seal)
Its President
DateJune 10, 1982
State of Maine
County of Aroostook
The foregoing instrument was acknowledged before me this 10th day of
June, 1982, by Ralph A. Brown, President, of Maine Public Service Company,
a Maine corporation, on behalf of the corporation.
s/ Linda M. Swett(Seal)
My Commission Expires July 10, 1988
Witness: MASSACHUSETTS MUNICIPAL WHOLESALE ELECTRIC COMPANY
s/ Laurie Thompson Bys/ Phillip C. Otness(Seal)
Its General Manager and Secretary
DateDecember 9, 1982
Commonwealth of Massachusetts
County of Hampden
The foregoing instrument was acknowledged before me this 9th day of
December, 1982, by Phillip C. Otness, General Manager and Secretary, of
Massachusetts Municipal Wholesale Electric Company, a Massachusetts
corporation, on behalf of the corporation.
s/ Armand J. Goulet(Seal)
Notary Public
My Commission expires 3/3/89
Witness: MONTAUP ELECTRIC COMPANY
s/ Donald G. Parker Bys/ John F. G. Eichorn(Seal)
Its President
DateJune 8, 1982
Commonwealth of Massachusetts
County of Suffolk
The foregoing instrument was acknowledged before me this 8th day of
June, 1982, by John F. G. Eichorn, Jr., President, of Montaup Electric
Company, a Massachusetts corporation, on behalf of the corporation.
s/ William F. O'Connor(Seal)
Notary Public
My Commission Expires: May 18, 1984
Witness: NEW ENGLAND POWER COMPANY
By(Seal)
Its
Date
Commonwealth of Massachusetts
County of Worcester
The foregoing instrument was acknowledged before me this day
of June, 1982, by
, of New England Power Company, a Massachusetts corporation, on behalf of
the corporation.
(Seal)
Witness: NEW HAMPSHIRE ELECTRIC COOPERATIVE, INC.
s/ William A. Bardely Bys/ James J. Page (Seal)
Its President
Date2/25/83
State of New Hampshire
County of Grafton
The foregoing instrument was acknowledged before me this 25th day of
February, 1983, by James Page, of New Hampshire Electric Cooperative, Inc.,
a New Hampshire corporation, on behalf of the corporation.
s/ Maurice H. Muzzey(Seal)
My Commission Expires 12/13/87
Witness: TAUNTON MUNICIPAL LIGHTING PLANT
s/ W. F. O'Connor Bys/ Joseph M. Blain(Seal)
Its General Manager
Date6/17/82
Commonwealth of Massachusetts
County of Bristol
The foregoing instrument was acknowledged before me this 25th day of
June, 1982, by Joseph M. Blain, of Taunton Municipal Lighting Plant, an
agency of a Massachusetts municipal corporation, on behalf of the
corporation.
s/ Patricia S. Adams(Seal)
My commission expires 11/26/82
Witness: VERMONT ELECTRIC COOPERATIVE, INC.
s/ Nora H. Winckler Bys/ William J. Gallagher(Seal)
Its Vice-President and Executive Manager
DateJune 14, 1982
State of Vermont
County of Lamoile
The foregoing instrument was acknowledged before me this 14th day of
June, 1982, by William J. Gallagher, Vice-President and Executive Manager,
of Vermont Electric Cooperative, Inc., a Vermont corporation, on behalf of
the corporation.
s/ Nora H. Winckler(Seal)
Exhibit 10.18.2
FORM OF
COMPOSITE OF AGREEMENT FOR SEABROOK
PROJECT DISBURSING AGENT THROUGH
SECOND AMENDMENT TO RESTATED AGREEMENT
This Agreement for Seabrook Project Disbursing Agent, dated as of
May 23, 1984 ("Disbursing Agent Agreement" or "Agreement"), as heretofore
amended and herein restated to include all nine amendments, by and among
Public Service Company of New Hampshire, The United Illuminating Company,
Canal Electric Company (successor in interest to New Bedford and Edison
Light Company), The Connecticut Light and Power Company, EUA Power
Corporation, Massachusetts Municipal Wholesale Electric Company, Montaup
Electric Company, New England Power Company, New Hampshire Electric
Cooperative, Inc., Taunton Municipal Lighting Plant, Hudson Light & Power
Department and Vermont Electric Generation and Transmission Cooperative,
Inc. (collectively, the "Participants") and North Atlantic Energy Service
Corporation ("NAESCO" or "Disbursing Agent").
WITNESSETH THAT:
This Agreement is made pursuant to the provisions of Paragraph 35 of
the John Ownership Agreement to establish the powers, duties,
responsibilities, terms of employment and compensation of, and other
matters respecting, the Disbursing Agent appointed to receive, hold and
disburse payments due from Participants in the Seabrook Project.
1. Appointment of NAESCO as Disbursing Agent under the Joint
Ownership Agreement.
1.1 Appointment. The Participants hereby appoint NAESCO to act as
their Disbursing Agent under the terms of the Joint Ownership Agreement as
now in effect and as it may from time to time be amended or modified in the
future, and NAESCO hereby accepts this appointment. The scope of the
agency is as set forth in this Agreement.
1.2 Powers, etc. NAESCO's powers, duties, and responsibilities under
this Agreement shall be limited to activities reasonably incident to
collection and disbursal of Participants' payments for their respective
shares of costs of the Seabrook Project, as is more fully set out below in
Paragraph 1.5 and Paragraph 2.
1.3 Agency. For purposes of this Agreement, the Participants agree
that NAESCO shall act as agent for each of the Participants individually
(and not jointly or jointly and severally). With respect to certain other
agreements, the following provisions shall apply:
(1) In the event of any conflict between the provisions of this
Agreement and the Managing Agent Operating Agreement, the provisions of
this Agreement shall prevail.
(2) The parties to this Agreement on April 27, 1984, entered into an
agreement entitled "Interim Agreement to Preserve and Protect the Assets of
and Investment in the New Hampshire Nuclear Units" ("Interim Agreement").
This Agreement does not supersede the Interim Agreement, and any bills or
invoices paid pursuant to that agreement shall not be paid or deemed paid
pursuant to this Agreement.
(3) In the event of any conflict between the provisions of this
Agreement and the provisions of the Joint Ownership Agreement, the
provisions of the Joint Ownership Agreement shall prevail.
1.4 Escrowed Funds. Notwithstanding anything the contrary contained
elsewhere in this Agreement, all monies paid to NAESCO under this
Agreement, including without limitation, vendor credits received under
Paragraph 2.6 and gains from investment or interest under Paragraph 2.3
shall not be the property of the Participants but shall be held at all
times in escrow by NAESCO in the accounts established under Paragraph 2.3
hereof to be disbursed by NAESCO pursuant to the provisions hereof. Upon
termination of this Agreement, the Executive Committee will determine
whether the moneys held by the Disbursing Agent exceed future Project Costs
and any necessary reserves and, if so, will issue instructions to the
Disbursing Agent for the distribution of such surplus consistent with the
intent and purpose of this Agreement.
1.5 Disbursements. Except as otherwise specifically set out herein,
NAESCO shall disburse monies received from and credited to each Participant
only to pay that Participant's pro rata share, as defined in Paragraph 5.1
below, of Project Costs as defined in Paragraph 1.6. Monies received by
NAESCO from, or credited to, PSNH pursuant to Paragraphs 23.10 or 23.11 of
the Joint Ownership Agreement may be applied only to pay MMWEC's pro rata
share of Project Costs as defined in the Joint Ownership Agreement.
1.6 Definitions. As used in this Agreement, the following terms
shall have the following meanings:
Costs of Completion means and includes all Project Costs that are
subject to contractual commitment to be paid by or incurred by the
Participants to complete construction of Unit 1 of the Seabrook Project,
including, without limitation, costs resulting from suspension and
restarting after suspension (if any) of the construction of Unit 1.
Without limiting the generality of the foregoing, Costs of Completion shall
include the cost of the initial nuclear fuel load for Unit 1 of the
Seabrook Project.
Project Costs means and includes those costs described in
Paragraph 1.5 above and in Paragraphs 11 and 13 and the Operating Deposit
described in 37.3(d)(i) of the Joint Ownership Agreement, including costs
of the design, construction, operation, maintenance, renovation and
termination or decommissioning (if any) of, and fuel for, Unit 1 of the
Seabrook Project, and with respect to the preservation, protection and
termination of Unit 2 of the Seabrook Project. Costs incurred for one or
more Participants' individual accounts are not Project Costs but may be
billed to such Participant or Participants by NAESCO directly.
Project Manager means North Atlantic Energy Service Corporation unless
and until a successor has received all necessary licenses and
authorizations to replace North Atlantic Energy Service Corporation and has
replaced North Atlantic Energy Service Corporation as Project Manager of
the Seabrook Project.
2. Billings, Deposits, Investments and Payments.
2.1 The Execution Committee. The Executive Committee established
pursuant to Paragraph 37 of the Joint Ownership Agreement (the "Executive
Committee"), or its successor, shall oversee the functions of the
Disbursing Agent. The Participants authorize the Executive Committee or
any designee of such Executive Committee (i) to perform the functions
assigned to it in this Agreement, and (ii) to provide direction to NAESCO
in the fulfillment of NAESCO's responsibilities under this Agreement.
NAESCO agrees that it will operate under the direction of the Executive
Committee or its designee.
2.2(a) Routine Monthly Billing. Not later than the 15th day of each
month, or the first business day thereafter, the Disbursing Agent shall,
subject to the provisions of Paragraph 37.3(f) of the Joint Ownership
Agreement, bill ("routine monthly billing") each Participant for its pro
rata Ownership Share of the estimated Project Costs for the subsequent
month under the approved then current six-months' budget, as established
pursuant to Paragraphs 37.3(a), 37.3(b), and 37.3(c) of the Joint Ownership
Agreement. Each invoice shall be due and payable on the first business day
of the next following month. Any amount not paid on such date shall bear
interest from said date until the date of payment at the rate provided in
the Joint Ownership Agreement. In the event that one or more Participants
have not paid their routine monthly billing by the due date, the Disbursing
Agent shall notify the Executive Committee of such fact and the details
thereof and obtain specific direction from the Executive Committee.
Succeeding routine monthly billings shall set forth a reconciliation for
the previous month between the estimated Project Costs previously billed,
including any interim payments billed pursuant to Paragraph 2.2(c) below,
and the actual Project Costs incurred. Such billings also shall set forth
a credit or debit to the then current routine monthly billed amount to
reflect such reconciliation and interest due for late payment or other
adjustments such as vendor credits and interest. The routine monthly
billings shall show as debits or credits the amounts necessary to restore
the Operating Deposit (as defined in Paragraph 37.3(d)(i) of the Joint
Ownership Agreement) to the target amount set from time to time as provided
in the Joint Ownership Agreement, and such amounts shall be funded by the
Participants as provided in Paragraph 37.3(d)(i) and (d)(ii) of the Joint
Ownership Agreement. The Disbursing Agent shall not include in a routine
monthly billing for Project Costs a bill for funds for a major expenditure
unless such expense is to be paid by the Disbursing Agent during the month
for which the routine monthly billing is made. Unless otherwise directed
by the Executive Committee or provided by the Joint Ownership Agreement,
any net interest paid by any Participant with respect to its overdue
payment for any month's bill shall be credited by the Disbursing Agent, pro
rata determined by Ownership Share, to those Participants which made timely
payment of their bills for each such month.
2.2(b) Operating Deposit. After Commercial Operation of Unit No. 1,
the Disbursing Agent shall bill each Participant for its pro rata share of
the target amount of the Operating Deposit as provided in
Paragraph 37.3(d)(i) and (ii) of the Joint Ownership Agreement. Such
billing shall be included in the routine monthly billing made by the
Disbursing Agent under Paragraph 2.2(a) above. The Operating Deposit shall
be held by the Disbursing Agent with the routine monthly billing payments
to provide sufficient working capital for the Project, in escrow as
provided in Paragraphs 1.4 and 2.13 of this Agreement and in
Paragraph 37.3(h) of the Joint Ownership Agreement, solely for the benefit
of creditors of the Project, to be disbursed solely to pay each
Participant's Ownership Share of Project Costs, and at no time shall any of
such funds be the property of the Disbursing Agent.
2.2(d) Interim Billing. Subject to the prior approval of the
Executive Committee, the Disbursing Agent may, when and to the extent
authorized by Paragraph 37.3(g) of the Joint Ownership Agreement, obtain an
interim payment from each Participant by means of an interim billing to all
Participants, for payment of unanticipated expenditures which, in the
absence of such interim payment, would result in the reduction at the end
of the month of the sum of (i) the balance of the Operating Deposit and
(ii) the amounts of funds then remaining from the routing monthly billings
to the minimum required amount set forth in Paragraph 37.3(g) of the Joint
Ownership Agreement, or less. To the extent that any interim billing would
result in estimated Project Costs exceeding the then current six-months'
budget, such interim billing shall require approval, in advance, as
provided in Paragraph 37.3(c)(i) and (ii) of the Joint Ownership Agreement.
Upon receipt of the aforesaid required approvals, the Disbursing Agent
shall without delay bill each Participant for its pro rata Ownership Share
of the interim billing which shall be the amount necessary to restore said
minimum required balance. Each interim billing shall be due and payable
ten business days after issuance by the Disbursing Agent and any amount not
paid by such date shall bear interest from said due date until the date of
payment at the rate provided in the Joint Ownership Agreement. Each
interim billing shall be accompanied by a letter from the Project Manager
or the Managing Agent confirming the amount required and the reason for the
request.
2.3(a) Deposit of Funds. The Disbursing Agent shall establish one or
more bank accounts ("bank account(s)") at one or more banks or trust
companies organized under the laws of the United States or one of the
states with a combined capital and surplus of at least $10,000,000, which
is subject to supervision or examination by federal or state authority and
is not a creditor of any Participant. The Executive Committee shall have
the right to approve the selection of, and direct the Disbursing Agent to
change banks if the Executive Committee determines such to be in the best
interests of the Project. The monies deposited and held in all bank
accounts shall at all times be subject to the provisions of Paragraphs 1.4
and 2.13 of this Agreement and Paragraph 37.3(h) of the Joint Ownership
Agreement, and each bank account shall be denominated to show that it is an
escrow account.
2.3(b) Investment of Monies. To the extent that monies held in bank
accounts are not immediately required to pay Project Costs pursuant to
Paragraph 2.5 of this Agreement, the Disbursing Agent shall to the maximum
extent practicable invest such monies in one or more investment pool
accounts ("investment pool accounts") which have been selected by the
Disbursing Agent pursuant to investment guidelines developed and modified
from time to time by the Disbursing Agent, all with the approval of the
Executive Committee. Annually, a Participant shall inform the Disbursing
Agent of the particular investment pool account it prefers. The monies
deposited and held in all investment pool accounts and all earnings and
gains thereon shall at all times be subject to the provisions of
Paragraphs 1.4 and 2.13 of this Agreement and Paragraph 37.3(h) of the
Joint Ownership Agreement, and each investment pool account shall be
denominated to show that it is an escrow account. The Disbursing Agent
shall maintain records which show the earnings and gains of each investment
pool account and the credits from such earnings and gains which are
attributable to each Participant. Such credits shall be entered into the
escrow account maintained by the Disbursing Agent in the name of such
Participant. Each Participant shall directly pay such taxes on such gains
and earnings on investment pool accounts as may be attributable to it.
2.3(c) Executive Committee Satisfaction. The procedures for
selecting, establishing, maintaining and changing bank accounts and
investment pool accounts, and the receipt, holding, investment and
disbursement of all monies and credits, shall at all times be satisfactory
to the Executive Committee.
2.4 Daily Payment Certificates. On a daily basis, the Project
Manager shall present a certificate to NAESCO signed by an officer or
authorized agent of the Project Manager, certifying:
(i) the total amount of payments to be made for bills, invoices
and requests for payment covering Project Costs; and\
(ii) that such expenditures have been authorized as provided in
Paragraph 37 of the Joint Ownership Agreement. Such certificate, when
accompanied by an invoice approved by the Project Manager, an audited
voucher and a check (if required by NAESCO) for each payment being made,
shall be presented to NAESCO for NAESCO's review and payment.
2.5 Project Costs Payments. NAESCO shall withdraw and disburse
monies from the appropriate bank accounts to pay each Participant's pro
rata share of Project Costs, but NAESCO shall pay only those Project bills
that have been duly certified as provided in Paragraph 2.4 above. Before
making payment, NAESCO shall review all Project bills submitted for payment
to ensure compliance with these requirements. After following these
procedures, NAESCO shall pay such approved Project bills, in whole or in
part, directly to the vendors, as provided in Paragraph 1.5 of this
Agreement. In the event of, and as a condition to, a partial payment,
NAESCO shall obtain from the payee a release or waiver, in a form approved
by the Executive Committee, of liability, of each Participant that has
contributed its pro rata share of such payment (including a waiver of liens
on Seabrook Project real or personal property), unless the Executive
Committee otherwise directs in each specific case.
2.6 Vendor Credits. The Project Manager will deliver to NAESCO,
without delay, any and all monies derived from vendor credits, chargebacks
and other reimbursements ("vendor credits") that it receives on the
Seabrook Project. The Project Manager will notify all vendors to deliver
all such vendor credits on the Seabrook Project to, and to make such vendor
credits payable to, NAESCO as Disbursing Agent for the Participants.
Checks or other instruments representing such vendor credits, if payable to
the Project Manager, shall be properly endorsed by the Project Manager or
its agent to be payable to the order of NAESCO as Disbursing Agent. Upon
receipt of such vendor credits, NAESCO shall promptly deposit the same into
the appropriate bank account and credit each Participant, pro rata
according to its respective Ownership Share at the time the expense was
billed to the Participants, except that if any Participant did not pay its
pro rata share of such expense, such Participant shall not be entitled to
such credit. NAESCO shall disburse all such vendor credits solely to pay
Project Costs. If any Participant has a surplus of such vendor credits
over its pro rata share of disbursements for Project Costs, NAESCO shall
retain such surplus and shall disburse it, in accordance with Paragraph 2.5
above, to pay such Participant's pro rata share of Project Costs in
subsequent months.
2.7 MMWEC Credits. Notwithstanding any other provision of this
Agreement to the contrary, credits, refunds, recoveries, and damages
(collectively "Credits") to which MMWEC would be entitled but which arise
on account of payments made by NAESCO from funds provided by other
Participants on or after July 28, 1988 (including payments made from funds
deposited with NAESCO before July 28, 1988) of MMWEC's pro rata share of
Seabrook Project Requirement Estimates, shall be applied by NAESCO to
MMWEC's Supplementary Advance Payment Account in accordance with NAESCO's
prior practice; provided, that if any Credit is in the amount of Twenty-
Five Thousand Dollars ($25,000.00) or more, such Credit shall not be so
applied by NAESCO, but NAESCO shall deposit the Credit into the main
account of the Participant which made the payment to which the Credit
relates; except that any such Credits related to MMWEC Supplementary
Advance Payments made under Paragraph 23.10 or 23.11 of the Joint Ownership
Agreement, which Credit is received while PSNH is obligated to make such
payments, shall be deposited into the MMWEC Supplementary Advance Payment
Account.
2.8 Executive Committee Instructions. NAESCO shall report to the
Executive Committee or its designee (1) for overall direction in carrying
out its function, (2) for specific approval of or direction with respect to
payment of specific Project bills, if NAESCO believes that there is a
question as to whether such Project bills have been duly certified or have
been duly authorized under Paragraph 37 of the Joint Ownership Agreement
and (3) for specific approval for payment of bills related to any program
adopted to reconcile past unpaid bills. NAESCO shall also provide a
monthly report to the Participants itemizing, in appropriate form and
detail, and in any event in such form and detail as the Executive Committee
may direct, all Seabrook Project disbursements, credits, expenses,
investment and interest income and monies received from Participants.
2.9 Records. NAESCO shall maintain separate records of each
Participant's payments, credits applied on its behalf and disbursements
applied against its payments and credits. Each Participant shall have the
unrestricted right to all financial records relating to the Seabrook
Project within the control of the Disbursing Agent, and its affiliates,
wherever located, except for information which is a) protected by law,
b) restricted by contract with third parties, or c) deemed commercially
sensitive by an affiliate or affiliates of the Disbursing Agent. If
requested financial records are restricted by contract with third parties,
the Disbursing Agent, and its affiliates, will use their best efforts to
obtain the consent of third parties to disclose confidential financial
records to Participants, with the understanding that Participants may be
required to sign a nondisclosure agreement. For financial records which
are considered commercially sensitive to (an) affiliate(s) of the
Disbursing Agent, upon the request of one or more Participants, such
affiliate shall allow for their review by an independent third party,
selected by the parties involved (other than the Disbursing Agent and its
affiliates) and acceptable to the Disbursing Agent (provided that the
Disbursing Agent may not unreasonably withhold its acceptance) to
determine, using an informal, simplified procedure, whether the financial
records in question are commercially sensitive. In any event, if
reasonable under the circumstances, the Disbursing Agent may require a
Participant to sign a nondisclosure agreement covering financial records
that it considers commercially sensitive.
Review of financial records at the offices of the Disbursing Agent, or
its affiliate companies, shall occur at reasonable times during normal
business hours, and shall be arranged in advance among the involved
parties. The Participants shall use reasonable efforts to avoid disrupting
the business operations of the Disbursing Agent or its affiliates.
The Disbursing Agent shall coordinate and facilitate the dissemination
of financial records between Seabrook Station and the Executive Committee
and/or the Participants.
Subject to the limitations set forth elsewhere in this Section 2.9,
any financial records relating to the project shall be provided to any
Participant requesting them, with the understanding that the Participant
may be required to pay for the cost of providing them in the circumstances
described in Section 2.13.
Without limiting the generality of this Section 2.9, any Participant
or the Executive Committee may request an audit of the accounts and records
of the Disbursing Agent, at its offices, at reasonable times, by an
independent certified accountant or other representative of the Participant
requesting the audit; provided that, absent extraordinary circumstances,
subject to the rights of the Participants under Section 18 (Arbitration) of
the Managing Agent Operating Agreement, a full-scope audit shall not be
performed at the request of the Executive Committee or one or more
Participants not affiliated with the Disbursing Agent more frequently than
once each year. If an audit is represented by the Executive Committee, the
costs thereof shall be borne by all Participants in proportion to their
Ownership Shares. If an audit is requested by one or more, but less than
all, of the Participants, the costs thereof shall be borne by the
Participant(s) making such request. If an audit is performed in connection
with an arbitration proceeding, the costs of the audit shall be allocated
among the Participants in accordance with the decision of the arbitrator.
2.10 Payments. All services rendered by the Disbursing Agent, or its
affiliates, under this Agreement shall be at actual cost thereof, fairly
and equitably allocated and calculated, all consistent with the
requirements of the Act and the rules and regulations and orders
thereunder. Direct charges will be made for services where a direct
allocation of cost is possible. Charges not directly assignable shall be
determined and allocated on a reasonable and equitable basis in accordance
with the Act and as approved by the Executive Committee, which approval
shall not be unreasonably withheld. The Disbursing Agent shall obtain
Executive Committee approval, which approval shall not be unreasonably
withheld, of the methodology utilized, as well as changes thereto, for
allocating costs to Seabrook Station prior to the implementation of such
methodology. Such allocation methods will be appropriately documented and
available for review by the Participants upon request. Without limiting
the generality of the foregoing, allocable costs include executive salaries
and fringe benefits paid by the Disbursing Agent, the insurance expenses
incurred by the Disbursing Agent and other general overhead expenses
incurred by the Disbursing Agent. The Disbursing Agent shall keep complete
and accurate accounts of all receipts and expenditures hereunder in
accordance with the rules and regulations of the Securities and Exchange
Commission and the Uniform System of Accounts prescribed for Public
Utilities and Licensees, subject to the provisions of the Federal Power Act
as amended from time to time (or such similar accounts as may hereafter
become appropriate) (hereinafter the "Uniform System of Accounts").
2.11 Consultants. The Executive Committee is authorized to engage
such consultants as it sees fit to assist it in carrying out its function
under this Agreement and shall bill each Participant on a monthly basis for
the cost thereof based upon each such Participant's pro rata Ownership
Share of such costs. Each Participant will pay its pro rata share of such
bills and shall only be liable for such pro rata share.
2.12 Reports. This Agreement shall not affect the obligations of the
Project Manager to provide accounting reports to the other Participants
pursuant to the Joint Ownership Agreement or the Managing Agent Operating
Agreement.
2.13 Technical Assistance. Upon request, the Disbursing Agent shall
assist the Participants in regulatory proceedings and other contested
matters relative to the Plant, including the provision of witnesses and of
current and accurate data on a timely basis.
Information, including witness support, that will require a
substantial commitment of time or a substantial effort to assemble or
develop, and is neither a) required by a substantial number of
Participants, nor b) requested by the Executive Committee, shall be paid
for by the Participant(s) requesting such information. The Disbursing
Agent, in consultation with the Executive Committee, shall develop a
reasonable standard by which it will determine how and when a Participant
is to be charged for information requested.
2.14 NAESCO Covenant re Escrowed Funds. NAESCO agrees and stipulates
that neither it nor any of its creditors shall have any interest in the
bank accounts, the investment pool accounts, or in monies deposited therein
or credits applied thereto, and that the bank accounts and investment pool
accounts have been created and are being held in escrow solely for the
vendors whose bills have been certified for payment pursuant to
Paragraph 2.4 above, subject to the terms of, and to maintaining and
disbursing funds in the bank accounts in accordance with, this Agreement.
2.15 PSNH/MMWEC Settlement. Notwithstanding any other provision of
this Agreement to the contrary, on and after August 1, 1989, and in order
to give effect thereto:
(a) MMWEC shall have no liability for payment or repayment to NAESCO
of any amounts applied by NAESCO for MMWEC Project Costs from funds held by
NAESCO for MMWEC's account since June 1, 1988 (including payment or
refunding any of the prefunded amounts drawn down by MMWEC from June 1,
1988 through July 28, 1988);
(b) MMWEC shall have no liability to pay any interest or penalties
with respect to the aforesaid application of funds by NAESCO or with
respect to MMWEC's nonpayment of MMWEC Project Costs;
(c) PSNH shall not incur any additional obligations or liability as a
result of making payments required under Paragraphs 1 and 6 of the
Memorandum of Understanding of November 4, 1988 between PSNH and MMWEC,
except for the additional liability that PSNH assumes with respect to the
obligations of MMWEC under Paragraphs 23.10 and 23.11 of the Joint
Ownership Agreement, as amended, and only to the extent specifically
provided therein; and
(d) MMWEC shall not be liable for any payment which PSNH is to make
under Paragraphs 23.10 and 23.11 of the Joint Ownership Agreement, as
amended, whether or not PSNH makes such payment.
2.16 Further Amendment. The provisions of this Agreement not
specifically amended by the Sixth Amendment, including without limitation
the provisions of Section 5.1, shall be deemed to have been modified,
without the necessity of further formal amendment, as may be necessary to
given effect to the provisions of Paragraphs 23.10 and 23.11 of the Joint
Ownership Agreement with respect to payments to be made by PSNH thereunder
which MMWEC but for said Amendment would have been obligated to make.
2.17 No Setoff. The Participants' obligation to make payments to
NAESCO hereunder is absolute and unconditional and a Participant shall not
be entitled to set off against the payments required to be made hereunder
any amounts owed to it by NAESCO or any affiliate of NAESCO or by any other
Participant or the amount of any claim by it against NAESCO or any
affiliate of NAESCO or any other Participant.
3. Removal or Resignation of NAESCO and Appointment of Successor
NAESCO may resign at any time by giving twenty-one (21) days' prior
written notice thereof to each of the Participants. Such resignation shall
become effective on the date specified in the notice, or upon the
appointment of and acceptance by a successor, whichever is earlier. Upon
agreement of Participants owning sixty-two percent (62%) or more of the
Ownership Shares in the Seabrook Project, the Participants may at any time
remove NAESCO without cause upon twenty-one (21) days' prior written notice
to NAESCO, and with cause upon seven (7) days' prior written notice to
NAESCO. Such removal shall become effective on the date specified in the
notice. In the event of resignation or removal, NAESCO shall be entitled
to compensation under Paragraph 2.10 of this Agreement until the effective
date of such resignation or removal. In the event NAESCO resigns or is
removed, the Participants shall use their best efforts to appoint a
successor upon agreement of Participants owning sixty-two percent (62%) or
more of the Participants' Ownership Shares in the Seabrook Project. Any
successor agent shall execute an instrument accepting such appointment and
shall thereupon become vested with and subject to all properties, rights,
powers, and duties of NAESCO, as if originally named in the provisions
hereof (including this Paragraph 3). NAESCO shall duly assign, transfer
and deliver to the successor agent all records, property, and money held by
it hereunder, provided that NAESCO may retain copies of such records.
4. Liability and Indemnification
4.1 NAESCO. NAESCO shall not be responsible for the genuineness of
any signature and may rely conclusively upon, and shall be protected in
acting upon, any certificate, notice, request, consent, statement or other
instrument believed by it in good faith to be duly authorized and properly
made. The duties and obligations of NAESCO hereunder shall be governed
solely by the provisions of this Agreement and Joint Ownership Agreement.
For and in consideration of the fact that NAESCO is undertaking
responsibility under this Agreement for and on behalf of the Participants
without any compensation or charge other than recovery of its costs for
such service, no Participant shall be entitled to recover from NAESCO or
the directors, trustees, officers, employees, agents or affiliates of
NAESCO (or the directors, trustees, officers, employees or agents of such
affiliates) (collectively, "Protected Parties") any damages resulting from
performance or nonperformance of its respective responsibilities hereunder
or under the Joint Ownership Agreement, or for any damage to the Seabrook
Project, any curtailment of power, or any other damages of any kind,
including direct, incidental, consequential, special, indirect or punitive
damages occurring during the course of the design, engineering,
procurement, installation, construction, operation, maintenance, refueling
or decommissioning of the Seabrook Project or otherwise arising out of the
performance or nonperformance of this Agreement, unless such damages shall
have resulted directly from the willful misconduct of NAESCO, or, to the
extent legally attributable to NAESCO, directly from the willful misconduct
of a Protected Party. Notwithstanding the above, no Participant shall be
entitled to recover any such damages if such damages result from NAESCO's
or a Protected Party's actions or omissions that have been expressly
approved by the Executive Committee or by the Participants. All goods and
services provided to the Seabrook Project by a Protected Party shall be
under a written contract having the same limitation of liability as above;
provided, however, that the same limitation of liability shall also apply
even if goods and services are provided without a written contract. The
provisions of this Section 4.1 shall apply notwithstanding any provision of
this Agreement to the contrary and shall survive the expiration or
termination of this Agreement. NAESCO shall not have any duty to use its
own funds in carrying out its responsibilities under this Agreement.
4.2 Executive Committee. Notwithstanding the provisions of
Section 4.1 of this Agreement, neither the Executive Committee nor any
member nor designee thereof, when acting in such capacity, nor any employer
of any member or designee, nor any affiliate, agent or employee of such
member, designee or employer, shall by virtue of its relationship to the
Executive Committee or any Executive Committee member or designee acting in
such capacity, be liable to any Party to this Agreement for claims for
direct, incidental, indirect, consequential or other damages of any nature,
including, but not limited to, damages for loss of anticipated profits,
loss of use of revenue, loss by reason of construction shutdown or
interruption, and cost of capital, connected with or resulting from the
performance of this Agreement by the Executive Committee or by any member
or designee thereof or by any employee of any member or designee or any
affiliate, agent or employee of such member, designee or employer, except
in the event of willful misconduct. In addition, the Participants,
severally (and not jointly or jointly and severally), in accordance with
their respective pro rata shares as specified in Paragraph 5.1, agree to
defend, indemnify and hold the Executive Committee, each member and
designee thereof and each of the other persons or entities referred to in
the preceding sentence, harmless against all losses, claims, expenses
(including reasonable counsel fees) and liabilities, not resulting from his
or their willful misconduct, which may be asserted, imposed, or incurred in
connection with the performance of his or its responsibilities hereunder,
including any litigation arising from the foregoing.
5. Miscellaneous
5.1 Liability of Participants. All obligations of the Participants
hereunder are pro rata and several (not joint or joint and several) and,
with respect to each Participant, limited to the proportion of such
Participant's Ownership Share in the Seabrook Project to the total of all
Ownership Shares in the Seabrook Project (called a "pro rata share" in the
Agreement). As of the date of execution of this Agreement, the pro rata
share of each Participant is as follows:
Public Service Company of New Hampshire 35.56942%
The United Illuminating Company 17.50000%
Canal Electric Company 3.52317%
The Connecticut Light and Power Company 4.05985%
Hudson Light and Power Department 0.07737%
Massachusetts Municipal Wholesale
Electric Co. 11.59340%
Montaup Electric Company 2.89989%
New England Power Company 9.95766%
New Hampshire Electric Cooperative 2.17391%
Taunton Municipal Lighting Plant 0.10034%
Vermont Electric Generation &
Transmission Cooperative, Inc. 0.41259%
EUA Power Corporation 12.13240%
100.00000%
The Executive Committee shall notify NAESCO promptly of any changes in each
Participant's pro rata share. Every document delivered to any third party
by NAESCO pursuant to this Agreement which may bear on the nature of the
Participants' obligations hereunder shall specify such several (and not
joint or joint and several) nature of the Participants' obligations.
5.2 Unpaid Project Costs. Without limiting the generality of
Paragraph 5.6, nothing in this Agreement shall constitute or be construed
as a waiver or limitation on the enforceability of, or an election of
remedies with respect to, the rights of the Participants other than PSNH to
recover PSNH's unpaid share of Project Costs, if any, or its share of
interim care and protection costs paid by other Participants pursuant to
the Interim Agreement or to enforce other claims (whether now existing or
arising in the future) against PSNH.
5.3 Governing Law. This Agreement is made under and shall be
governed by, and construed in accordance with, the laws of the State of New
Hampshire.
5.4 Severability. In the event that any clause or provision of this
Agreement, or any part thereof, shall be declared invalid or unenforceable
by any regulatory body or court having jurisdiction, such invalidity or
unenforceability shall not affect the validity of the remaining portions of
this Agreement.
5.5 Survival. All provisions of this Agreement providing for
limitation of or protection against liability shall apply to the full
extent permitted by law and shall survive termination of this Agreement.
5.6 Right of Vendors. This Agreement is not intended, and shall not
be construed, to create or acknowledge any rights in favor of persons who
or entities that are not parties to this Agreement, except for rights of
vendors whose bills have been certified for payment pursuant to
Paragraph 2.4, subject to the terms of, and to maintaining and disbursing
the bank accounts and investment pool accounts in accordance with, this
Agreement. Anything in this Agreement to the contrary notwithstanding, the
Participants agree that this Agreement is made without prejudice to, and
does not constitute a waiver of, or election of remedies with respect to,
or limitation on the enforceability of, any rights or claims which any
Party or Participant may now have or in the future have against any other
Party or Participant.
5.7 Corporate Acts. This Agreement is the act and obligation of the
Parties hereto in their corporate capacities.
5.8 Effectiveness. The Seventh Amendment hereto shall become
effective upon execution by NAESCO and by Participants owning ninety-five
percent (95%) or more of the Ownership Shares in the Seabrook Project, and
upon its effectiveness, all Participants shall be, and be deemed to be,
Parties to this Agreement as amended by the Seventh Amendment.FOOTNOTE 1
5.9 Counterparts. Any number of counterparts of this Agreement may
be executed and each shall have the same force and effect as the original.
5.10 Amendments. Upon the Seventh Amendment becoming effective, this
Agreement may thereafter be amended or modified by an instrument executed
by Participants owning fifty-one percent or more of the Ownership Shares in
the Seabrook Project and by NAESCO; provided, however, that this
Paragraph 5.10 and the definitions of "Projected Costs" and "Cost of
Completion" in Paragraph 1.7 hereof, may be modified or amended only by
FOOTNOTE 1 The Seventh Amendment hereto has received the required
Participant approval and become effective. The First Amendment to Seventh
Amendment to and Restate Agreement for Seabrook Project Disbursing Agent
shall become effective at the "Time of Effectiveness," defined as "the date
of the closing of the transactions necessary to accomplish the transfer of
responsibility for the management, operation, and maintenance of Seabrook
from the New Hampshire Yankee Division of Public Service Company of New
Hampshire to NAESCO."
consent of Participants owning ninety-five percent or more of the Ownership
Shares in the Seabrook Project and NAESCO, and provided further that any
amendment to this Agreement which would have the effect of modifying the
terms of the Joint Ownership Agreement shall not become effective unless
approved as provided in Article 29 of the Joint Ownership Agreement.
5.11 Notices. Unless otherwise provided herein, notices and other
communications required or permitted to be given or made under terms of
this Agreement shall be in writing, and shall be deemed to have been duly
made or given when delivered personally or when made or given by telex,
telegraph or telecopier, prepaid, at, in the case of each Participant such
address and to the attention of the chief executive officer or such other
person as may be designated from time to time by a Participant in
accordance with the Joint Ownership Agreement; and, in the case of NAESCO,
to North Atlantic Energy Service Corporation, 107 Selden Street, Berlin,
Connecticut 06037, Attention Treasurer, or to such other address or to the
attention of such other person as NAESCO may from time to time designate by
notice in writing to each Participant.
5.12 Contracts with Affiliates. NAESCO may retain or appoint a
service company or agent (which service company or agent shall be
affiliated with NAESCO) to act on its behalf and perform the
responsibilities and assume the duties of the Disbursing Agent hereunder
and under the Joint Ownership Agreement, so long as such appointment is
consistent with the terms of the Operating License and the rules and
regulation of the NRC. No such retention or appointment shall become
effective unless the agreement(s) between NAESCO land such service company
or agent(s) has been approved by at least three or more unaffiliated
Participants, owning collectively 60 percent or more of the Ownership
Shares. Participants shall not withhold their approval of any such
agreement if it is fair and equitable to all affected parties. Any service
company or agent(s) which perform services under this section shall, unless
the Executive Committee otherwise directs, submit bills for such services
to NAESCO, and NAESCO shall in turn bill the Participants for such
services.
5.13 Termination. This Agreement shall be subject to termination and
shall terminate, without any action by NAESCO or the Participants, to the
extent and from the time that performance may conflict with the Public
Utility Holding Company Act of 1935 or with any rule, regulation, or order
of the Securities and Exchange Commission before or after the making
hereof.
IN WITNESS WHEREOF, each of the undersigned has cause this Agreement
to be duly signed by an authorized officer and attested (or such signature
by an authorized officer to be attested to by a witness) on the date
indicated by as of the date first above written.
CANAL ELECTRIC COMPANY
BY
Title:
THE CONNECTICUT LIGHT AND
POWER COMPANY
By
Title:
EUA POWER CORPORATION
By
Title:
HUDSON LIGHT & POWER DEPARTMENT
By
Title:
MASSACHUSETTS MUNICIPAL
WHOLESALE ELECTRIC COMPANY
By
Title:
MONTAUP ELECTRIC COMPANY
By
Title:
NEW ENGLAND POWER COMPANY
By
Title:
NEW HAMPSHIRE ELECTRIC COOPERATIVE
By
Title:
PUBLIC SERVICE COMPANY OF NEW
HAMPSHIRE
By
Title:
TAUNTON MUNICIPAL LIGHTING PLANT
By
Title:
THE UNITED ILLUMINATING COMPANY
By
Title:
VERMONT ELECTRIC GENERATION AND
TRANSMISSION COOPERATIVE, INC.
By
Title:
NORTH ATLANTIC ENERGY SERVICE
CORPORATION
By
Title:
Exhibit 10.20
NORTHEAST UTILITIES SERVICE COMPANY
FORM OF
SERVICE CONTRACT
AGREEMENT made and entered into as of the 1st day of July ,
1966, by and between NORTHEAST UTILITIES SERVICE COMPANY (hereinafter
referred to as Service Company) and
(hereinafter referred to as Associate Company).
WHEREAS, by order in File No. 37-65, the Securities and Exchange
Commission (hereinafter referred to as SEC) approved and authorized, under
the Public Utility Holding Company Act of 1935 (hereinafter referred to as
the Act), the organization and conduct of business of Service Company in
accordance herewith, as a wholly owned subsidiary service company of
Northeast Utilities (hereinafter referred to as Northeast); and
WHEREAS, Service Company is willing to render services as provided
herein to Northeast and its associated subsidiaries (hereinafter
collectively referred to as the System) at cost, determined in accordance
with applicable rules and regulations under the Act; and
WHEREAS, economies, increased efficiencies and other benefits will
result to the System from the performance by Service Company of services as
herein provided:
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein, it is agreed as follows:
Section 1. Agreement to Furnish Services.
Service Company agrees to furnish to Associate Company and other
System companies, upon the terms and conditions herein provided, the
services hereinafter referred to in Section 2 hereof at such times and for
such periods as may be required, and Service Company will, as and to the
extent required to provide such services to the system, keep itself and its
personnel available and competent to render such services to the System so
long as it is authorized so to do by federal and state regulatory agencies
having jurisdiction.
For the purpose of providing services as herein provided, Service
Company proposes to establish various departments, one or more of which
will participate in providing particular services hereinafter described.
Service Company reserves to itself the privilege, without amendment hereof
or express prior agreement by Associate Company or other System companies,
from time to time to establish new departments, to subdivide or otherwise
reorganize any of the departments established by it, and to reallocate
services among various departments.
Service Company will also provide for Associate Company and other
System companies as required such other services not referred to in
Section 2 hereof as Service Company may conclude it may furnish with
economies and increased efficiencies to the System or such other services
as Associate Company or other System companies may require and Service
Company is competent to perform.
Services will also be furnished to other System companies under
agreements similar in all respects hereto and may also be furnished, in
Service Company's discretion, to others, provided that by so doing the cost
of services to Associate Company or other System companies will not be
increased.
In supplying services hereunder, Service Company may arrange for
services of such executives, financial advisers, accountants, attorneys,
technical advisers, engineers and other persons as are required for or
pertinent to the rendition of such services.
Section 2. Services to be Performed.
Subject to the provisions of Section 1 hereof, Service Company will
provide to Associate Company and other System companies, the following
services:
(A) General System Management: Executive, administrative,
managerial, coordinating and advisory services, particularly with respect
to the formulation and effectuation of policies and programs affecting or
relating to the System as a whole, including financial, accounting, and
economic policies and programs, power supply, public and employee
relations, regulation, contractual arrangements, administrative and other
proceedings, industry-wide activities and like matters.
(B) Other Functions and Activities: Studying, planning, advise,
assistance, guidance, supervision, direction, administration, maintenance,
handling, performance and operation, as may be required, in connection with
the following functions and activities:
(i) Corporate and Secretarial: Policies and practices relating
to the performance of corporate secretarial functions and activities,
including the preparation and maintenance of official corporate records,
reports, minutes and correspondence in accordance with assigned
responsibilities and duties.
(ii) Financial Planning: Financial structures; financial
programs to raise funds required or to effect savings through refinancing;
relations with commercial banks and negotiation of short-term borrowings;
relationships with investment bankers, analysts, analyst societies,
securities holders, stock holders, stock exchanges and indenture trustees,
transfer agents and registrars; general treasury, banking and financial
matters.
(iii) Accounting: General accounting, customer accounting and
related records; depreciation, accounting procedures and practices to
improve efficiency; internal auditing, relations with independent auditors
and appearances before and requirements of regulatory bodies with respect
to accounting matters; and financial and operating reports and other
statistical matters and analyses thereof.
(iv) Taxes: Consolidated and other income tax returns and other
federal, state and municipal tax returns, and all matters related thereto,
including relations with the Internal Revenue Service and other taxing
authorities, the examination and processing of tax returns, assessments and
claims, and developments in federal, state and municipal taxes.
(v) Insurance: Insurance programs and matters, including
pension and other employee benefit plans and programs; and relations with
insurance brokers and agents.
(vi) Budgets: Operating, construction and cash budgets, and
similar studies or documents, including estimates and other information
required therefor or related thereto.
(vii) Data Processing: Computer and other data processing
activities.
(viii) Bulk Power Supply: The bulk power supply system from
sources of supply through to bulk substations, to achieve reliable service
at minimum cost, including forecasts of electric loads; power supply
arrangements among System companies; power supply relations with other
utilities; forecasts of gas requirements and the procurement of gas
supplies; design, engineering and scheduling of electric and gas production
and transmission facilities; the design, engineering and scheduling of
major and unusual distribution facilities; and System electric load
dispatching operations and related matters.
(ix) Engineering Research and Standardization: Engineering
activities in the fields of research, design, construction and
standardization; technical specifications and standard designs for and
procedures and methods of utilizing materials, equipment and associated
services; technical support and engineering as required in all areas of the
System's operations.
(x) System Operations: Electric and gas operations, including
production, transmission and distribution of electricity and gas; the
construction, operation and maintenance of electric and gas facilities; and
in general all electric and gas construction, maintenance and operating
activities.
(xi) Other Administrative Services: Management-union and all
other employee relation activities, including the definition of major
organizational responsibilities and the translation of those
responsibilities into effective organization structures; employee welfare
and other programs and problems; business methods and procedures; and
transportation activities and matters.
(xii) Purchasing and Stores: The purchasing and handling of
materials and supplies, fuel and equipment, including such activities as
buying, traffic, expediting and stock control, and scrap and salvage sales;
major and long-term purchase contracts pertaining to the foregoing; and
contacts with market conditions and principal suppliers.
(xiii) Commercial Activities: Electric, gas and other sales;
customer service facilities; rate matters and rate structures; and area
development plans and activities.
(C) Officers and other employees of Service Company will, on request
of Associate Company, serve, without charge other than as herein provided,
as officers or representatives of such Company.
Section 3. Agreement to Take and Pay for Services.
Associate Company agrees to take from Service Company such of the
services to be performed by Service Company as may be required and to pay
to Service Company the cost of such services determined as herein provided.
It is the intent of this Agreement that the payment for services rendered
by the Service Company to the System shall cover all the costs of its doing
business (less credits for services to others any other miscellaneous
income items), including reasonable compensation for necessary capital as
permitted by Rule 91 of the SEC under the Act. The methods and procedure
for determining the cost of services performed for Associate Company are
set forth in Appendix A hereto.
Bills will be rendered for each calendar month on or before the
twentieth day of the succeeding month and will be payable on presentation
and not later than the last day of that month. Monthly charges may be made
in whole or in part for particular expenses on an estimated basis, subject
to adjustment, so that all charges for services during a calendar year will
be made on an actual basis.
4. Effective Date; Term; and Cancellation.
This Agreement shall become and be effective as of the date hereof and
it shall continue in effect, unless sooner terminated as herein provided,
for a period of one year. It may be renewed from time to time for similar
one-year periods by mutual agreement. This Agreement shall also be subject
to termination and shall terminate, without any action by either of the
parties, to the extent and from the time that performance may conflict with
the Act or with any rule, regulation or order of the SEC adopted before or
after the making hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, by their respective officers thereunto duly authorized,
all as of the day and year first above written.
NORTHEAST UTILITIES SERVICE COMPANY
By
Its President
Attest:
Secretary ASSOCIATE COMPANY
By
Its President
Attest:
Secretary<PAGE>
APPENDIX A
DESCRIPTION OF METHODS AND PROCEDURE
FOR ALLOCATING COST OF SERVICES
JOB OR WORK ORDERS FOR SERVICE
There shall be job or work orders covering services to be performed
for Associate Company or other System companies. These orders may be
either general or specific. Services of a continuing nature, such as
accounting, financial planning and dispatching, will be covered by general
job or work orders; specific job or work orders will cover such things as
issues of securities, special studies or construction projects. General
orders, as well as specific orders, will specify the nature of the services
to be performed thereunder in sufficient detail that charges therefor may
be determined as herein provided and properly accounted for by the
Associate Company under its prescribed Uniform System of Accounts.
CHARGES FOR SERVICES
General
Charges for services rendered to Associate Company and other System
companies will be made on the bases of benefits conferred and of actual
cost (including reasonable compensation for necessary capital as permitted
by Rule 91 of the SEC under the Act), fairly and equitably allocated.
Specific Services
Charges for specific services performed will be made to the
appropriate specific job or work order number assigned to accumulate the
charges applicable to the particular activity. These charges will include
both direct and indirect costs involved in providing the specific services.
General Services
Charges for general services performed will be made to the appropriate
general job or work order number assigned to accumulate the charges
applicable to the particular activity. These charges will include both
direct and indirect costs involved in providing the general services.
NATURE OF CHARGES AND METHOD OF ALLOCATION
Direct Charges
Direct charges consist of those costs which can practicably be
recorded separately and identified not only by job or work order number and
department but also as to source, such as time reports for each employee,
vehicle reports, invoices and other source documents. Time reports will be
maintained for each employee, including officers, in such detail as may be
appropriate for such employee and the nature of the services performed.
Employees (other than stenographic, secretarial, clerical, and other
workers engaged in rendering support services) will record on their time
reports hours chargeable to the appropriate job or work order numbers and
the nature of the work performed.
Northeast will be charged with 25% of the costs chargeable to job or
work orders for general services not of an operating or functional nature
related primarily to the System subsidiary companies but primarily of
benefit to and performed for Northeast and the System as a whole. The
balance of the charges to such job or work orders will be allocated to
among System subsidiary companies as provided hereafter under "Charges to
System Companies - General Services."
Indirect Charges or Overhead Expenses
Indirect charges or overhead expenses consist of all costs of the
Service Company, other than direct charges described above. These charges
may be classified into the following two general categories:
1. General Service Company Overheads - These charges include costs which
cannot be identified as applicable to either a particular job or work
order number or department and which must be allocated to the various
Service Company departments on a fair and equitable basis. The
following items are illustrative, and not all-inclusive, of the types
of costs which may be so-allocated to the extent above provided:
rents; office supplies and expenses; depreciation; building operation
and maintenance; insurance; reasonable compensation for necessary
capital; general services, such as stenographic, files, mail, etc.,
including salaries, employee benefits, and expenses of related
employees; and other general overheads.
These overhead costs will be allocated to each department on
the basis of functional relationship, such as number of personnel,
space occupied, use, etc.
2. Departmental Overheads - These charges include costs which can be
identified as applicable to a particular department but which cannot
be directly associated with a particular job or work order number.
These costs will consist of the following:
(a) Wages and salaries of stenographic, secretarial, clerical and
other workers in the department engaged in rendering support
services.
(b) Lost or nonproductive time for vacations, personal time off,
sickness, holidays, etc., of all employees in department.
(c) Payroll-related Federal and State taxes and group benefit plans
for pension, life insurance, hospitalization and medical, etc.,
of all employees in department.
(d) Miscellaneous supplies and expense.
(e) General Service Company overheads allocated to the particular
department as set forth in item 1 above.
The indirect charges of a particular department, as outlined in this
item 2, will be distributed to the active specific or general job or
work orders for which work is being performed by that department on
the same proportionate basis as the actual direct payroll charges of
that department.
CHARGES TO OTHER THAN SYSTEM COMPANIES
Services performed for other than System companies will be billed and
paid for by them on an appropriate basis. All amounts so billed will be
credited to the appropriate job or work orders before any charges are made
therefrom to System companies.
CHARGES TO SYSTEM COMPANIES
Specific Services
Charges for specific services recorded in the appropriate job or work
order numbers, including overhead items, will be billed to the company or
companies for whom the services are performed.
General Services
Charges for general services recorded in the appropriate job or work
order numbers, including overhead items, will be allocated among System
subsidiary companies on one of the following bases determined on the basis
of functional relationship to be the most fair and equitable:
1. Revenues - The relation of each company's gross operating
revenues (electric, gas or total, as may be appropriate) to the
sum of the operating revenues of all System companies (electric,
gas or total, as may be appropriate) for the preceding calendar
year.
2. Electric Peak Load - The relation of each company's annual
electric peak load to the combined electric peak load of all
System companies for the preceding calendar year.
3. Peak Day Sendout - The relation of each company's gas peak day
sendout to the combined gas peak day sendout of all System
companies for the preceding calendar year.
4. Customers Billed - The relation of each company's total customers
billed to the combined total customers billed of all System
companies for the preceding calendar year.
5. Other - Such other basis or bases as experience may show will
provide on a functional relationship, a more fair and equitable
allocation of particular charges than any of the foregoing.
DEPARTMENT COST CONTROLS
Annual operating budgets, on a departmental basis, will be used and
costs will be controlled independently for each department so as to
maintain a periodic check on the balances, if any, over or underbilled to
insure that services rendered are being billed at cost. Each department
will be charged with all of its expenses, including overhead items
allocated to it, and will be credited with amounts billed from the
department for services rendered. The accounts of each department will be
maintained so as to be substantially in balance at all times. Accordingly,
semiannual reviews will be made of balances to determine to what extent the
billings should be adjusted to reflect actual cost.
BILLING
Bills will be provided Associate Company in sufficient detail so as to
identify the services rendered and permit proper accounting distribution of
the charges under the Associate Company's prescribed Uniform System of
Accounts. Detail on the bill will include: (1) Department; (2) Function
or type of service; (3) Nature of charges, whether direct or indirect
(overhead); and (4) Source of charges, if direct.
Exhibit 10.20.2
FORM OF
ANNUAL RENEWAL OF SERVICE CONTRACT
AGREEMENT, made and entered into as of the day of , by
and between Northeast Utilities Service Company (hereinafter referred to as
Service Company) and (hereinafter referred to as
Associate Company.
WHEREAS, the Service Contract between Service Company and Associate
Company expires as of ; and
WHEREAS, both companies deem it to be in their best interests to renew
the Service Contract for an additional period of one year on the same terms
and conditions;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, it is agreed as follows:
(1) The Service Contract between Service Company and Associate Company is
hereby renewed as of , for a period of one year; and
(2) All terms and conditions of the Service Contract shall continue in full
force and effect during such renewal period.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
duly executed by their respective officers thereunto duly authorized, all as
of the day and year first above written.
NORTHEAST UTILITIES SERVICE COMPANY
By:
attest:
ASSOCIATE COMPANY
By:
attest:
Exhibit 10.21.1
AMENDMENT TO
MEMORANDUM OF UNDERSTANDING
POOLING OF GENERATION AND TRANSMISSION
THIS AGREEMENT, dated as of February 2, 1982, is entered into by and
among The Connecticut Light and Power Company, The Hartford Electric Light
Company, Holyoke Power and Electric Company, Holyoke Water Power Company
and Western Massachusetts Electric Company (the "Companies") to amend an
agreement by and among the Companies entitled: MEMORANDUM OF
UNDERSTANDING -- POOLING OF GENERATION AND TRANSMISSION, dated as of
June 1, 1970 (hereinafter called the "NUG&T Agreement").
The Companies agree as follows:
1. Section 5 of the NUG&T Agreement is amended to read in the manner
shown on the attached revised pages 6, 7, and 8 of the NUG&T Agreement.
2. Schedule A to the NUG&T Agreement, consisting of 2 pages and
entitled: "DETERMINATION OF INVESTMENT RETURN," is amended to read in the
manner shown on the attached revised Schedule A.
3. This Agreement, and the amendments provided in 1 and 2 above,
shall become effective on April 5, 1982, or on such later date as the
Federal Energy Regulatory Commission shall specify; provided, however, that
if the Federal Energy Regulatory Commission shall order a hearing and
suspend the effectiveness of the amendments provided herein for any period,
then this Agreement and such amendments shall not become effective until
the Commission's order following such hearing becomes final and is no
longer subject to judicial review.
IN WITNESS WHEREOF, each of the Companies has caused this Agreement to
be executed by its duly authorized representative, as of this 2nd day of
February, 1982.
THE CONNECTICUT LIGHT AND POWER COMPANY
By /s/ W. A. Hunt
Its Vice President--
Revenue Requirements
THE HARTFORD ELECTRIC LIGHT COMPANY
By /s/ W. A. Hunt
Its Vice President--
Revenue Requirements
HOLYOKE POWER AND ELECTRIC COMPANY
By /s/ W. A. Hunt
Its Vice President--
Revenue Requirements
HOLYOKE WATER POWER COMPANY
By /s/ W. A. Hunt
Its Vice President--
Revenue Requirements
WESTERN MASSACHUSETTS ELECTRIC COMPANY
By /s/ W.A. Hunt
amounts are fixed, they shall be reflected in a supplement to this
Memorandum.
The amount which any of the Companies is required to pay, or entitled
to receive, under Section 3 each month shall be increased or decreased, as
appropriate, by one-twelfth of (i) 75% of its adjustment amount, as so
fixed, during the initial twelve months of the term of this Memorandum,
(ii) 50% of such adjustment amount during the second twelve months of the
term, and (iii) 25% of such adjustment amount during the third twelve
months of the term. No adjustment shall be made thereafter.
SECTION 5. DEFINITIONS.
The Companies participate in the New England Power Pool (NEPOOL)
pursuant to the NEPOOL Agreement, dated September 1, 1971, which superseded
the NEPEX Agreement. All references in Sections 2 through 8 of this
Memorandum to the NEPEX Agreement shall be interpreted to be references to
the NEPOOL Agreement, as amended, and as used in this Memorandum and all
schedules and supplements hereto the terms NEPEX, Annual Peak, Load, and
Unit Adjusted Contrast shall have the meanings specified for them in the
NEPOOL Agreement, as amended.
Further, as used in the Memorandum and all schedules and supplements
hereto the following items have the following respective meanings:
(a) Backbone Transmission: (i) all transmission lines 69KV and above
except radial tap lines and other lines which serve principally local load
and contribute little or no parallel capability to the interconnected
system, and (ii) necessary linkages (including substation facilities such
as transformers, circuit breakers and associated equipment) required to
connect such lines to each other or to connect generation to such lines.
(b) Investment: as applied to any facility or facilities, means the
original cost thereof as shown on the books of the owner thereof at the
applicable time (including the cost of any betterments, improvements and
additions thereto and excluding the cost of any retirements therefrom).
(c) Net Investment: as applied to any facility or facilities, means
the Investment therein at the applicable time less the net amount of
depreciation accumulated and less the net amount of deferred income taxes
accumulated with respect to investments made subsequent to December 31,
1981, in such facility or facilities and plus the net amount of deferred
income taxes accumulated subsequent to December 31, 1981, with respect to
the recovery of estimated costs of final dismantlement and decontamination
applicable to nuclear production facilities.
(d) Depreciable Investment: as applied to any facility or
facilities, means such part of the Investment therein at the applicable
time as reflects the portion thereof which is depreciable in accordance
with generally accepted accounting principles.
(e) Operation and Maintenance Expense: as applied to any facility or
facilities, means the actual expense of operating and maintaining such
facility or facilities (being those amounts, other than amounts
representing Fuel Expense, which are properly charged by the owner to power
production or transmission expense accounts under the Uniform System of
Accounts prescribed by the Federal Power Commission for Class A and Class B
Public Utilities and Licensees and which are properly allocable to the
facility or facilities), plus an appropriate amount to cover applicable
administrative and general expense with respect thereto.
(f) Depreciation Expense: as applied to any facility or facilities,
means an appropriate allowance to cover depreciation and obsolescence of
the Depreciable Investment therein as fixed by the owner in accordance with
its established practices.
(g) Property Tax Expense: as applied to any facility or facilities,
means an appropriate allowance to cover property taxes incurred with
respect thereto as fixed by the owner in accordance with its established
practices.
(h) Investment Return: as applied to any facility or facilities,
means an appropriate amount to cover capital costs with respect thereto,
and, in the case of a generating unit, fuel inventory and other materials
and supplies for the unit, determined in the manner provided in the
appropriate schedule or supplement to this Memorandum.
(i) Income Tax Expense: as applied to any facility or facilities,
means Federal or state income or other taxes related to Investment Return
with respect to such facility or facilities, or the investment therein and
shall reflect any applicable tax credits related to investments made
subsequent to December 31, 1981, in such facility or facilities ratably
over the remaining service life of such facilities.
(j) Fuel Expense: as applied to any facility or facilities, means
the amount which is properly charged by the owner thereto the appropriate
fuel expense account under the Uniform System of Accounts prescribed by the
Federal Power Commission for Class A and Class B Public Utilities and
Licensees and which is properly allocable to such facility or facilities.
SECTION 6. REIMBURSEMENT OF CERTAIN TAXES.
If at any time any of the Companies is required by any state or local
governmental authority to pay a gross revenue or other similar tax with
respect to payments made to it under this Memorandum by any other Company,
the Company paying the tax shall be promptly reimbursed by such other
Company for the amount of the tax.
SCHEDULE A
DETERMINATION OF INVESTMENT RETURN
"Investment Return" for any year shall be determined individually for
each of the Companies for purposes of the foregoing Memorandum by
multiplying the amount of its Net Investment in generation and Backbone
Transmission by its composite cost of capital. A Company's composite cost
of capital shall be computed on the basis of (a) its costs, expressed in
percentages, for (i) bonds and other long-term indebtedness and
(ii) preferred stock, and (iii) a return on its common equity, which is for
this purpose agreed to be 16.00%. These costs shall be combined in
accordance with the following formula to determine the Company's composite
cost of capital:
composite cost of capital = AxB + CxD + ExF
in which: A = the Company's cost for long-term indebtedness
B = the percentage of the Company's capitalization
represented by long-term indebtedness
C = the Company's cost for preferred stock
D = the percentage of the Company's capitalization
represented by preferred stock
E = the Company's return on common equity
F = the percentage of the Company's capitalization
represented by common equity
For purposes of the foregoing formula and this Schedule A, a Company's
capitalization consists of its long-term indebtedness, preferred stock and
common equity, and the percentage of capitalization represented by each of
the components thereof, shall be rounded off to the nearest whole number.
A Company's cost of long-term indebtedness for purposes of this
Schedule is the weighted average of the costs of its various issues of
long-term indebtedness. The cost of an issue of long-term indebtedness
shall be computed in accordance with the following formula:
(Discount or (Premium)+Company
+ Expenses of Issue) 100
Coupon or Interest Rate (%)xPrincipal Amount) Years to Maturity
Principal Amount - (Discount or (Premium) + Company Expenses of Issue)
A Company's cost of preferred stock for purposes of this Schedule is
the weighted average of the costs of its various issues of preferred stock.
The cost of an issue of preferred stock shall be computed in accordance
with the following formula:
Cost of Issue in Percent =
(Dividend Rate (%)xAggregate Par or Stated Value)
(Proceeds to Company from Underwriter or Investor -
Company Expenses of Issue
Each Company's Investment Return for a year shall be computed
initially at the beginning of the year on the basis of its Net Investment
in generation and Backbone Transmission and its composite cost of capital
as of the beginning of the year. The Investment Return, as so computed,
shall be re-computed each time that a substantial change in generation or
Backbone Transmission utility plant in service accounts occurs during the
year and at such other times as the Companies mutually agree is
appropriate.
The usage in this Schedule of terms which are defined in the foregoing
Memorandum is in accordance with the definitions thereof in the Memorandum.
CERTIFICATE OF CONCURRENCE
OF
THE HARTFORD ELECTRIC LIGHT COMPANY
This is to certify that The Hartford Electric Light Company assents to
and concurs in the rate schedule change described below which is being
filed concurrently herewith by The Connecticut Light and Power Company, and
The Hartford Electric Light Company hereby files this Certificate of
Concurrence in lieu of filing such rate schedule change:
AMENDMENT dated February 2, 1982, to MEMORANDUM OF UNDERSTANDING --
POOLING OF GENERATION AND TRANSMISSION dated as of June 1, 1970, by
and among The Connecticut Light and Power Company, The Hartford
Electric Light Company, Holyoke Power and Electric Company, Holyoke
Water Power Company and Western Massachusetts Electric Company
The Hartford Electric Light Company also assents to and concurs in the
information and supporting data which are being filed with such rate
schedule change, insofar as such information and supporting data relate to
The Hartford Electric Light Company, and respectfully requests that such
information and supporting data be deemed to have been submitted by The
Hartford Electric Light Company.
The Hartford Electric Light Company also joins in the request that
such rate schedule change be permitted to become effective on April 5,
1982, and advises the Commission that is has agreed with the other NU
Companies that, in the event that the Commission should order a hearing and
suspend the effectiveness of the rate schedule change for any period, the
rate schedule change shall not become effective until the Commission's
order following such hearing becomes final.
THE HARTFORD ELECTRIC LIGHT COMPANY
By /s/ W. A. Hunt
February 2, 1982
CERTIFICATE OF CONCURRENCE
OF
HOLYOKE WATER POWER COMPANY
This is to certify that Holyoke Water Power Company assents to and
concurs in the rate schedule change described below which is being filed
concurrently herewith by The Connecticut Light and Power Company, and
Holyoke Water Power Company hereby files this Certificate of Concurrence in
lieu of filing such rate schedule change:
AMENDMENT dated February 2, 1982, to MEMORANDUM OF UNDERSTANDING --
POOLING OF GENERATION AND TRANSMISSION dated as of June 1, 1970, by
and among The Connecticut Light and Power Company, The Hartford
Electric Light Company, Holyoke Power and Electric Company, Holyoke
Water Power Company and Western Massachusetts Electric Company
Holyoke Water Power Company also assents to and concurs in the
information and supporting data which are being filed with such rate
schedule change, insofar as such information and supporting data relate to
Holyoke Water Power Company, and respectfully requests that such
information and supporting data be deemed to have been submitted by Holyoke
Water Power Company.
Holyoke Water Power Company also joins in the request that such rate
schedule change be permitted to become effective on April 5, 1982, and
advises the Commission that is has agreed with the other NU Companies that,
in the event that the Commission should order a hearing and suspend the
effectiveness of the rate schedule change for any period, the rate schedule
change shall not become effective until the Commission's order following
such hearing becomes final.
HOLYOKE WATER POWER COMPANY
By /s/ W. A. Hunt
February 2, 1982
CERTIFICATE OF CONCURRENCE
OF
HOLYOKE POWER AND ELECTRIC COMPANY
This is to certify that Holyoke Power and Electric Company assents to
and concurs in the rate schedule change described below which is being
filed concurrently herewith by The Connecticut Light and Power Company, and
Holyoke Power and Electric Company hereby files this Certificate of
Concurrence in lieu of filing such rate schedule change:
AMENDMENT dated February 2, 1982, to MEMORANDUM OF UNDERSTANDING --
POOLING OF GENERATION AND TRANSMISSION dated as of June 1, 1970, by
and among The Connecticut Light and Power Company, The Hartford
Electric Light Company, Holyoke Power and Electric Company, Holyoke
Water Power Company and Western Massachusetts Electric Company
Holyoke Power and Electric Company also assents to and concurs in the
information and supporting data which are being filed with such rate
schedule change, insofar as such information and supporting data relate to
Holyoke Power and Electric Company, and respectfully requests that such
information and supporting data be deemed to have been submitted by Holyoke
Power and Electric Company.
Holyoke Power and Electric Company also joins in the request that such
rate schedule change be permitted to become effective on April 5, 1982, and
advises the Commission that is has agreed with the other NU Companies that,
in the event that the Commission should order a hearing and suspend the
effectiveness of the rate schedule change for any period, the rate schedule
change shall not become effective until the Commission's order following
such hearing becomes final.
HOLYOKE POWER AND ELECTRIC COMPANY
By /s/ W. A. Hunt
February 2, 1982
CERTIFICATE OF CONCURRENCE
OF
WESTERN MASSACHUSETTS ELECTRIC COMPANY
This is to certify that Western Massachusetts Electric Company assents
to and concurs in the rate schedule change described below which is being
filed concurrently herewith by The Connecticut Light and Power Company, and
Western Massachusetts Electric Company hereby files this Certificate of
Concurrence in lieu of filing such rate schedule change:
AMENDMENT dated February 2, 1982, to MEMORANDUM OF UNDERSTANDING --
POOLING OF GENERATION AND TRANSMISSION dated as of June 1, 1970, by
and among The Connecticut Light and Power Company, The Hartford
Electric Light Company, Holyoke Power and Electric Company, Holyoke
Water Power Company and Western Massachusetts Electric Company
Western Massachusetts Electric Company also assents to and concurs in
the information and supporting data which are being filed with such rate
schedule change, insofar as such information and supporting data relate to
Western Massachusetts Electric Company, and respectfully requests that such
information and supporting data be deemed to have been submitted by Western
Massachusetts Electric Company.
Western Massachusetts Electric Company also joins in the request that
such rate schedule change be permitted to become effective on April 5,
1982, and advises the Commission that is has agreed with the other NU
Companies that, in the event that the Commission should order a hearing and
suspend the effectiveness of the rate schedule change for any period, the
rate schedule change shall not become effective until the Commission's
order following such hearing becomes final.
WESTERN MASSACHUSETTS ELECTRIC COMPANY
By /s/ W. A. Hunt
February 2, 1982
Exhibit 10.22.4
TWENTY-NINTH AGREEMENT AMENDING
NEW ENGLAND POWER POOL AGREEMENT
THIS AGREEMENT, dated as of the 1st day of May, 1993 is entered into
by the signatories hereto for the amendment by them of the New England
Power Pool Agreement dated as of September 1, 1971 (the "NEPOOL
Agreement"), as previously amended by twenty-eight (28) amendments, the
most recent of which was dated as of September 15, 1992. WHEREAS,
Participant generation resources, other than hydroelectric units, whose
annual hours of operation are restricted by regulatory requirements,
contract terms or engineering or operating constraints, may require
treatment different from that otherwise provided in the NEPOOL Agreement
for Capability Responsibility and energy billing purposes; and
WHEREAS, the signatory Participants have determined to amend the
NEPOOL Agreement in the manner specified below in order to provide for a
modified Capability Responsibility and energy billing treatment for
restricted generation resources.
NOW THEREFORE, the signatories hereby agree as follows:
SECTION I
TEXT OF AMENDMENTS
A. Amendment of Section 9.2(b)(2)
Section 9.2(b)(2) of the NEPOOL Agreement is amended by inserting the
following additional provisions immediately following the present final
paragraph of Section 9.2(b)(2):
The New Unit Adjustment Factor for any Restricted Unit for which
proposed plans were submitted subsequent to November 1, 1990 for
review pursuant to Section 10.4 (or, in the case of a unit with a
rated capacity of less than 5MW, for which notification was first
given to NEPOOL subsequent to November 1, 1990) and for the
Peabody Municipal Light Plant's Waters River #2 unit shall be
determined in accordance with the formula previously specified in
this Section 9.2(b)(2), modified as follows:
n = K1(c-C) + K2(f-F) + K3(m-M) + K4(d-D) +
K5(f-F)c2 + K6(2500-a)
The symbols used in the above formula, as modified, shall have
the meanings previously specified, except that the symbols "K6"
and "a" shall have the following meanings:
K6 is a scaling factor of 0.0001.
a is as follows:
for units with more than 2500 annual hours
available for operation, "a" = 2500,
for units with annual hours available for
operation between 500 and 2500, inclusive, "a" =
annual hours available for operation, and
for units with annual hours available for
operation less than 500 hours, "a" = - 7500;
provided, however, that a Participant may elect to avoid, in
whole or part, the effect on its Capability Responsibility of a
Restricted Unit's availability being limited to 2500 hours or
less a year by agreeing to leave unfilled a portion of its
dispatchable load allocation in accordance with rules to be
adopted by the Operations Committee.
B. Amendment of Section 12.6
The first two sentences of Section 12.6 of the NEPOOL Agreement are
amended to read as follows:
If pursuant to Section 12.5A, a Participant is deemed to have
received energy service in any hour when the Participant (i) had
Entitlements in one or more generating units which were available
for service but were not scheduled for operation by NEPEX at
their full available Reserve Capability (or, to the extent
applicable, at their full available Temporary Reserve Capability)
and which, in the case of any Restricted Unit, had an unused
portion of an available Restricted Unit Operational Allowance
and/or (ii) had Scheduled Outage Service Entitlements, the
Participant shall be deemed to have received Economy Flow Service
and/or Scheduled Outage Service in an amount equal to the lesser
of:
(a) the amount of energy service the Participant is deemed to
have received pursuant to Section 12.5A, or
(b) the amount of energy service which could have been provided
from its share of (1) the unused portion of the available
Reserve or Temporary Reserve Capabilities of the units
described in (i) above, as limited in the case of any
Restricted Unit by the unused portion of its available
Restricted Unit Operational Allowance, plus (2) its
Scheduled Outage Service Entitlements.
Economy Flow Service is service which a Participant is
deemed to receive at any time to replace service which it
could have provided at the time from units described in (i)
above, and the amount of Economy Flow Service which it is
deemed to receive at the time shall not exceed the amount of
energy service which could have been provided from its share
of the unused portions of the available Reserve Capabilities
(or, to the extent applicable, the unused portion of the
available Temporary Reserve Capabilities or the unused
portion of the available Restricted Unit Operational
Allowances, whichever is controlling) of such units.
C. Addition of Definitions of "Restricted Unit" and "Restricted Unit
Operational Allowance".
The NEPOOL Agreement is amended by adding the following definitions
following the definition of "Reserve Savings Shares" in Section 15.37A:
15.37B. Restricted Unit is a generating unit, other than a
hydroelectric unit, that is restricted in annual
hours available for operation by regulatory
requirements, contract terms or actual engineering
or operating constraints. Planned or forced
outages due to maintenance requirements are not
considered restrictions in annual hours available
for operation.
15.37C. Restricted Unit Operational Allowance "Allowance")
for a Participant's Entitlement in a Restricted
Unit for any calendar year (or for the term of the
Entitlement in any year, if such term is for a
shorter period than the year) is the number of
hours for which the Restricted Unit is available
for operation during the year or such shorter
period, whichever is applicable. The Allowance
for a Participant's Entitlement in a Restricted
Unit for any year or shorter period shall be
deemed to be exhausted when (i) the number of
hours that the Operations Committee determines
the Participant would have used its Restricted
Unit Entitlement to minimize the Participant's
overall energy costs in the absence of NEPEX
dispatch, plus (ii) the number of hours that the
Participant is deemed to receive Scheduled Outage
Service with respect to its Entitlement in the
Restricted Unit during the year or such shorter
period pursuant to Section 12.6, equals the
Allowance.
D. Modification of Definition of "Scheduled Outage Service Entitlement".
The definition of "Scheduled Outage Service Entitlement" in Section
15.38B of the NEPOOL Agreement is amended to read as follows:
15.38B Scheduled Outage Service Entitlement of a
Participant is the amount of Scheduled Outage
Service which the Participant is entitled to
receive in any hour with respect to a generating
unit which is scheduled by the Operations
Committee to be out of service, in whole or in
part, for maintenance during a period approved
for it by the Operations Committee for Scheduled
Outage Service and is in fact out of service, in
whole or in part, for any reason during the
approved period. Such amount is equal to the
lesser of (i) the portion of the Participant's
share of the Reserve Capability of such unit which
is unavailable for service times an estimated
average availability of such unit between its
periodic scheduled outages or (ii) in the case of
any generating unit with a currently applicable
Temporary Reserve Capability, the portion of the
Participant's share of the Temporary Reserve
Capability which is unavailable for service;
provided, however, that (a) in the case of any
Limited Fuel Unit, the amount of a Participant's
Scheduled Outage Service Entitlement shall be
reduced, if appropriate, to take account of any
limit on the availability of stream flow or fuel
to operate the unit during the outage period, and
(b) in the case of any Restricted Unit, the
Participant's Scheduled Outage Service Entitlement
shall be limited to the unused portion, if any, of
its currently available Restricted Unit
Operational Allowance for the unit. The
Operations Committee shall develop rules for
establishing the estimated average availability of
each unit between scheduled outages. Such rules
shall become effective upon approval by the
Management Committee.
SECTION II
EFFECTIVENESS OF AGREEMENT
Following its execution by the requisite number of Participants, this
Agreement, and the amendments provided for above, shall become effective on
August 1, 1993, or on such later date as the Federal Energy Regulatory
Commission shall provide that such amendment shall become effective.
SECTION III
USAGE OF DEFINED TERMS
The usage in this Agreement of terms which are defined in the NEPOOL
Agreement shall be deemed to be in accordance with the definitions thereof
in the NEPOOL Agreement.
SECTION IV
COUNTERPARTS
This Agreement may be executed in any number of counterparts and each
executed counterpart shall have the same force and effect as an original
instrument and as if all the parties to all the counterparts had signed the
same instrument. Any signature page of this Agreement may be detached from
any counterpart of this Agreement without impairing the legal effect of any
signatures thereof, and may be attached to another counterpart of this
Agreement identical in form hereto but having attached to it one or
more signature pages.
IN WITNESS WHEREOF, each of the signatories has caused a counterpart
signature page to be executed by its duly authorized representative, as of
the 1st day of May, 1993.
COUNTERPART SIGNATURE PAGE
TO TWENTY-NINTH AGREEMENT AMENDING
NEW ENGLAND POWER POOL AGREEMENT
DATED AS OF MAY 1, 1993
The NEPOOL Agreement, being dated as of September 1, 1971, and being
previously amended by twenty-eight (28) amendments, the most recent prior
amendment being an amendment dated as of September 15, 1992.
By: /s/
Name:
Title:
Address:
Exhibit 10.28
NORTHEAST NUCLEAR ENERGY COMPANY
$25,000,000
7.17% SENIOR NOTES DUE AUGUST 31, 2019
NOTE AGREEMENT
Dated as of December 21, 1993
TABLE OF CONTENTS
(Not Part of Agreement)
Page
1. AUTHORIZATION AND INTEREST RATE . . . . . . . . . . . . . . . . . . .1
1A. Authorization of Issue of Notes . . . . . . . . . . . . . .1
1B. Interest Rate . . . . . . . . . . . . . . . . . . . . . . .1
2. PURCHASE AND SALE OF NOTES; FEES . . . . . . . . . . . . . . . . . . 1
2A. Purchase and Sale of Notes. . . . . . . . . . . . . . . . .1
2B. Rate Lock Delayed Delivery Fee. . . . . . . . . . . . . . .2
2C. Rate Lock Cancellation Fee. . . . . . . . . . . . . . . . .2
2D. Commitment Fee. . . . . . . . . . . . . . . . . . . . . . .3
3. CONDITIONS OF FUNDING. . . . . . . . . . . . . . . . . . . . . . . . 3
3A. Opinion of Purchaser's Special Counsel. . . . . . . . . . .3
3B. Opinion of Company's Counsel. . . . . . . . . . . . . . . .3
3C. Opinion of CL&P's Special Counsel . . . . . . . . . . . . .3
3D. Opinion of WMECO's Special Counsel. . . . . . . . . . . . .3
3E. Representations and Warranties; No Default. . . . . . . . .4
3F. Purchase Permitted By Applicable Laws; Regulatory
Approvals. . . . . . . . . . . . . . . . . . . . . . . . . 4
3G. Millstone Plant Agreement . . . . . . . . . . . . . . . . .4
3H. Delivery of Notes . . . . . . . . . . . . . . . . . . . . .4
3I. Inducement Letter . . . . . . . . . . . . . . . . . . . . .4
3J. Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . .5
3K. Proceedings . . . . . . . . . . . . . . . . . . . . . . . .5
4. PREPAYMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4A(1). Required Prepayments Prior to Downgrade Event. . . . .5
4A(2). Required Prepayments With Yield-Maintenance Amount . .5
4B. Optional Prepayment With Yield-Maintenance Amount . . . . .5
4C. Notice of Optional Prepayment . . . . . . . . . . . . . . .6
4D. Partial Payments Pro Rata . . . . . . . . . . . . . . . . .6
4E. Retirement of Notes . . . . . . . . . . . . . . . . . . . .6
5. AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . 7
5A. Financial Statements. . . . . . . . . . . . . . . . . . . .7
5B. Information Required by Rule 144A . . . . . . . . . . . . .9
5C. Inspection of Property. . . . . . . . . . . . . . . . . . .9
5D. Conduct of Business and Maintenance of Existence. . . . . .9
5E. Maintenance of Properties . . . . . . . . . . . . . . . . 10
5F. Obligations and Taxes . . . . . . . . . . . . . . . . . . 10
5G. Compliance with Laws and Other Covenants. . . . . . . . . 10
5H. Maintenance of Insurance. . . . . . . . . . . . . . . . . 11
5I. Covenant to Secure Note Equally . . . . . . . . . . . . . 11
6. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . 11
6A. Lien, Debt and Other Restrictions . . . . . . . . . . . . 11
6A(1). Liens. . . . . . . . . . . . . . . . . . . . . . . . 11
6A(2). Debt . . . . . . . . . . . . . . . . . . . . . . . . 12
6A(3). Merger and Sale of Assets. . . . . . . . . . . . . . 13
6A(4). Restricted Investments . . . . . . . . . . . . . . . 13
6B. No Amendment of Millstone Plant Agreement . . . . . . . . 14
7. EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . 14
7A. Acceleration. . . . . . . . . . . . . . . . . . . . . . . 14
7B. Rescission of Acceleration. . . . . . . . . . . . . . . . 17
7C. Notice of Acceleration or Rescission. . . . . . . . . . . 18
7D. Other Remedies. . . . . . . . . . . . . . . . . . . . . . 18
8. REPRESENTATIONS, COVENANTS AND WARRANTIES. . . . . . . . . . . . . .18
8A. Organization. . . . . . . . . . . . . . . . . . . . . . . 18
8B. Power and Authority . . . . . . . . . . . . . . . . . . . 19
8C. Financial Statements. . . . . . . . . . . . . . . . . . . 19
8D. Actions Pending . . . . . . . . . . . . . . . . . . . . . 19
8E. Outstanding Debt. . . . . . . . . . . . . . . . . . . . . 19
8F. Title to Properties . . . . . . . . . . . . . . . . . . . 20
8G. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8H. Conflicting Agreements and Other Matters. . . . . . . . . 20
8I. Offering of Notes . . . . . . . . . . . . . . . . . . . . 20
8J. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . 21
8K. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8L. Governmental and Other Third Party Consent. . . . . . . . 22
8M. Environmental Compliance. . . . . . . . . . . . . . . . . 22
8N. Disclosure. . . . . . . . . . . . . . . . . . . . . . . . 23
8O. Permits and Other Operating Rights. . . . . . . . . . . . 23
8P. Millstone Plant Agreement . . . . . . . . . . . . . . . . 23
8Q. Regulatory Status of Company. . . . . . . . . . . . . . . 23
9. REPRESENTATIONS OF THE PURCHASER . . . . . . . . . . . . . . . . . 24
9A. Nature of Purchase. . . . . . . . . . . . . . . . . . . . 24
9B. Source of Funds . . . . . . . . . . . . . . . . . . . . . 24
10. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
10A.Yield-Maintenance Terms . . . . . . . . . . . . . . . . . .24
10B.Other Terms . . . . . . . . . . . . . . . . . . . . . . . .26
10C.Accounting Principles, Terms and Determinations . . . . . .30
11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
11A.Note Payments . . . . . . . . . . . . . . . . . . . . . . .31
11B.Expenses. . . . . . . . . . . . . . . . . . . . . . . . . .31
11C.Consent to Amendments . . . . . . . . . . . . . . . . . . .32
11D.Form, Registration, Transfer and Exchange of Notes; Lost
Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11E.Persons Deemed Owners; Participations . . . . . . . . . . .33
11F.Survival of Representations and Warranties; Entire
Agreement. . . . . . . . . . . . . . . . . . . . . . . . . 33
11G.Successors and Assigns. . . . . . . . . . . . . . . . . . .33
11H.Disclosure to Other Persons . . . . . . . . . . . . . . . .33
11I.Notices . . . . . . . . . . . . . . . . . . . . . . . . . .34
11J.Payments Due on Non-Business Days . . . . . . . . . . . . .34
11K.Satisfaction Requirement. . . . . . . . . . . . . . . . . .34
11L.Governing Law . . . . . . . . . . . . . . . . . . . . . . .34
11M.Severability. . . . . . . . . . . . . . . . . . . . . . . .35
11N.Descriptive Headings. . . . . . . . . . . . . . . . . . . .35
11O.Counterparts. . . . . . . . . . . . . . . . . . . . . . . .35
PURCHASER SCHEDULE
EXHIBIT A -- FORM OF NOTE
EXHIBIT B -- FORM OF OPINION OF COMPANY'S SPECIAL COUNSEL
EXHIBIT C -- FORM OF OPINION OF CL&P'S SPECIAL COUNSEL
EXHIBIT D -- FORM OF OPINION OF WMECO'S SPECIAL COUNSEL
EXHIBIT E -- FORM OF INDUCEMENT LETTER
SCHEDULE 4A(1) -- AMORTIZATION SCHEDULE
SCHEDULE 6A(1)(v) -- EXISTING LIENS
SCHEDULE 6A(2) -- DEBT
SCHEDULE 8H -- LIST OF AGREEMENTS RESTRICTING DEBT
SCHEDULE 10B(2) -- MONEY POOL APPLICATION AND APPROVAL
NORTHEAST NUCLEAR ENERGY COMPANY
107 Selden Street
Berlin, Connecticut 06037
As of December 21, 1993
The Prudential Insurance Company of America
c/o Prudential Power Funding Associates
Four Gateway Center
100 Mulberry Street
Newark, New Jersey 07102-4069
Ladies and Gentlemen:
The undersigned, Northeast Nuclear Energy Company (herein called the
"Company"), hereby agrees with you as follows:
1. AUTHORIZATION AND INTEREST RATE.
1A. Authorization of Issue of Notes. The Company will authorize
the issue of its senior promissory notes in the aggregate principal amount
of $25,000,000, to be dated the date of issue thereof, to mature August 31,
2019, to bear interest on the unpaid balance thereof from the date thereof
until the principal thereof shall have become due and payable at the rate
per annum determined in accordance with paragraph 1B hereof and on overdue
payments at the rate specified therein, and to be substantially in the form
of Exhibit A attached hereto. The term "Notes" as used herein shall
include each such senior promissory note delivered pursuant to any
provision of this Agreement and each such senior promissory note delivered
in substitution or exchange for any other Note pursuant to any such
provision.
1B. Interest Rate. The Notes shall bear interest at the rate of
7.17% per annum payable on the last day of each month commencing December
31, 1993 and otherwise in accordance and as set forth in paragraph 11A
hereof; provided, however, that, in the event a Downgrade Event occurs,
then, on and after the Downgrade Date, the Notes shall bear interest at the
rate of 7.67% per annum payable as set forth herein and in paragraph 11A
hereof.
2. PURCHASE AND SALE OF NOTES; FEES.
2A. Purchase and Sale of Notes. The Company hereby agrees to
sell to you and, subject to the terms and conditions herein set forth, you
agree to purchase from the Company Notes in the aggregate principal amount
set forth opposite your name on the Purchaser Schedule attached hereto at
100% of such aggregate principal amount. The Company will deliver to you,
at the offices of Schiff Hardin & Waite at 7200 Sears Tower, Chicago,
Illinois 60606, one or more Notes registered in your name, evidencing the
aggregate principal amount of Notes to be purchased by you and in the
denomination or denominations specified in the Purchaser Schedule attached
hereto, against payment of the purchase price thereof by transfer of
immediately available funds for credit to the Company's account #0031-3419
at Shawmut Bank Connecticut, Hartford, Connecticut on the date of funding,
which shall be December 21, 1993 or any other date on or before December
30, 1993 upon which the Company and you may mutually agree (herein called
"funding" or the "date of funding").
2B. Rate Lock Delayed Delivery Fee. If funding does not occur
on or before December 30, 1993 for any reason, the Company will pay to you
in immediately available funds on January 1, 1994 a delayed delivery fee
calculated as provided below. If the funding date is delayed beyond
December 30, 1993 for any reason other than your failure to purchase the
Notes when you are obligated to do so pursuant to the terms of this
Agreement, the Company will pay to you in immediately available funds
additional delayed delivery fees on the rescheduled second funding date and
any subsequently rescheduled funding date calculated as provided below.
The amount of any delayed delivery fee shall be calculated as follows:
(7.17% - MMY) x DTS/360 x $25,000,000
where "MMY" means Money Market Yield, i.e., the yield per annum on an
alternative investment selected by you on the date you receive notice of
the delay of the funding date having a maturity date on or about the
rescheduled funding date (a new investment being selected by you each time
the funding date is delayed); "DTS" means Days to Settlement, i.e., the
number of actual days elapsed (a) from and including (i) December 30, 1993,
if no delayed delivery fee has been paid, or (ii) the date of the
immediately preceding payment of a delayed delivery fee, if a delayed
delivery fee has previously been paid, (b) to but excluding the date such
delayed delivery fee is to be paid. In no case shall any delayed delivery
fee be less than zero. Nothing in this paragraph 2B shall be or operate as
a consent by you to, or waiver of, the failure by the Company to comply
with the terms of this Agreement regarding the issuance and sale of the
Notes on the funding date, or a selection or limitation of any of your
rights or remedies resulting from such failure.
2C. Rate Lock Cancellation Fee. If funding does not occur on or
prior to the Cancellation Date for any reason, the Company will pay you in
immediately available funds on the Cancellation Date a cancellation fee
calculated as follows:
PI x $25,000,000
where "PI" means Price Increase, i.e., the quotient (expressed in decimals)
obtained by dividing (a) the excess, if any, of the asked price (determined
by you) of the Hedge Treasury Note(s) (as defined below) on the
Cancellation Date over the bid price (as determined by you) of the Hedge
Treasury Notes on December 17, 1993 by (b) such bid price. The foregoing
bid and asked prices shall be as reported by Telerate Systems, Inc. (or, if
such date for any reason ceases to be available through Telerate Systems,
Inc., any publicly available source of similar market data selected by
you). Each price shall be based on a Hedge Treasury Note having a par
value of $100.00 and shall be rounded to the second decimal place. In no
case shall the cancellation fee be less than zero. For purposes of this
paragraph 2C, (a) "Cancellation Date" shall mean the earlier to occur of
(i) the date on which you receive notice from the Company that the Company
does not intend to issue the Notes (or the next succeeding Business Day if
you receive such notice after 4:00 p.m., New York City time) or (ii)
December 30, 1993, and (b) "Hedge Treasury Note" shall mean the U.S.
Treasury Note or Notes used by you to lock the interest rate on the Notes
on December 17, 1993.
2D. Commitment Fee. The Company will pay to you in immediately
available funds on the date of funding a commitment fee on $28,000,000 at
the rate of 0.125% per annum for the period from September 14, 1993 to the
date of funding.
3. CONDITIONS OF FUNDING. Your obligation to purchase and pay for
the Notes to be purchased by you hereunder is subject to the satisfaction,
on or before the date of funding, of the following conditions:
3A. Opinion of Purchaser's Special Counsel. You shall have
received from Schiff Hardin & Waite, who are acting as special counsel for
you in connection with this transaction, a favorable opinion satisfactory
to you as to such matters incident to the matters herein contemplated as
you may reasonably request.
3B. Opinion of Company's Counsel. You shall have received from
Day, Berry & Howard, special counsel for the Company, a favorable opinion
satisfactory to you in the form of Exhibit B attached hereto, and the
Company, by its execution of this Agreement, authorizes and directs such to
render such opinion to you.
3C. Opinion of CL&P's Special Counsel. You shall have received
from Day, Berry & Howard, special counsel for CL&P, a favorable opinion in
the form of Exhibit C attached hereto.
3D. Opinion of WMECO's Special Counsel. You shall have received
from Day, Berry & Howard, special counsel for WMECO, a favorable opinion in
the form of Exhibit D attached hereto.
3E. Representations and Warranties; No Default. The
representations and warranties contained in paragraph 8 and in the
Inducement Letter shall be true on and as of the date of funding, both
before and after giving effect to the purchase of the Notes and the use of
the proceeds thereof; there shall exist on the date of funding no Event of
Default or Default both before and after giving effect to the purchase of
the Notes and the use of the proceeds thereof; and the Company shall have
delivered to you an Officer's Certificate, dated the date of funding, to
both such effects.
3F. Purchase Permitted By Applicable Laws; Regulatory Approvals.
The purchase of and payment for the Notes to be purchased by you on the
date of funding on the terms and conditions herein provided (including the
use of the proceeds of such Notes by the Company) shall not violate any
applicable law or governmental regulation (including, without limitation,
section 5 of the Securities Act or Regulation G, T or X of the Board of
Governors of the Federal Reserve System) and shall not subject you to any
tax, penalty, liability or other onerous condition under or pursuant to any
applicable law or governmental regulation, and you shall have received such
certificates or other evidence as you may request to establish compliance
with this condition. The orders of the Securities and Exchange Commission
and the CDPUC referred to in paragraph 8L of this Agreement shall be
satisfactory to you, shall be in full force and effect on the date of
funding, shall not have been stayed, suspended, modified, vacated or held
invalid, shall not be contested and no petition for rehearing, stay or
suspension or appeal or review of any thereof shall have been filed, and,
with respect to the orders described in clause (ii) of paragraph 8L, shall
be final. Any conditions contained in such orders shall have been
satisfied to your reasonable satisfaction. You and your special counsel
shall have received copies of such documents and papers (including, without
limitation, certified or attested copies of such orders) as you or they may
reasonably request in connection therewith or as a basis for your special
counsel's funding opinion, all in form and substance satisfactory to you
and your special counsel.
3G. Millstone Plant Agreement. The Millstone Plant Agreement
shall be in full force and effect without any amendment or supplement
thereto or waiver of any rights by any party thereunder and there shall be
no default or claim of default by any party under such agreement.
3H. Delivery of Notes. The Company shall have delivered to you
the Notes to be delivered to you pursuant to paragraph 2, all duly
completed and executed by the Company.
3I. Inducement Letter. Each of CL&P and WMECO shall have
executed and delivered to you a letter agreement in the form of Exhibit E
attached hereto (the "Inducement Letter") and the Inducement Letter shall
be in full force and effect.
3J. Fees. The Company shall have paid any delayed delivery fees
pursuant to paragraph 2B and the commitment fee pursuant to paragraph 2D.
3K. Proceedings. All corporate and other proceedings taken or
to be taken in connection with the transactions contemplated hereby and all
documents incident thereto shall be satisfactory in substance and form to
you, and you shall have received all such counterpart originals or
certified or other copies of such documents as you may reasonably request.
4. PREPAYMENTS. The Notes shall be subject to prepayment with
respect to the required prepayments specified in paragraph 4A(1) and 4A(2)
and the optional prepayments permitted by paragraph 4B.
4A(1). Required Prepayments Prior to Downgrade Event. Until
the Notes shall be paid in full, the Company shall apply to the prepayment
of the Notes, without premium, on the last day of each month, from
September 30, 1994 through July 31, 2019, the principal amount set forth on
Schedule 4A(1) attached hereto opposite such day, and such principal
amounts of the Notes, together with interest accrued thereon to the
prepayment dates, shall become due on such prepayment dates. The remaining
principal amount of the Notes, together with interest accrued thereon,
shall become due on August 31, 2019 or at such earlier time as may be
required pursuant to paragraph 4A(2). Notwithstanding the foregoing, in
the event a Downgrade Event occurs, the Company shall make the prepayments
required under paragraph 4A(2) in lieu of the prepayments required under
this paragraph 4A(1).
4A(2). Required Prepayments With Yield-Maintenance Amount. In
the event that a Downgrade Event occurs, the Company shall give immediate
notice thereof to the holders of the Notes and, until the Notes shall be
paid in full, the Company shall apply to the prepayment of the Notes, with
the Yield Maintenance Amount, if any, the Downgrade Prepayment Amount on
each Downgrade Payment Date, and such principal amounts of the Notes,
together with interest accrued thereon to the prepayment dates and together
with the Yield Maintenance Amount, if any, with respect thereto, shall
become due on such prepayment dates. The remaining outstanding principal
amount of the Notes, together with interest accrued thereon and together
with the Yield Maintenance Amount, if any, with respect thereto, shall
become due on the third anniversary of the first Downgrade Payment Date.
4B. Optional Prepayment With Yield-Maintenance Amount. The
Notes shall be subject to prepayment, in whole or in part on the last day
of any month (in multiples of $5,000,000 and integral multiplies of
$1,000,000 in excess of $5,000,000), at the option of the Company, at 100%
of the principal amount so prepaid plus interest accrued thereon to the
prepayment date and together with the Yield-Maintenance Amount, if any,
with respect thereto. Any partial prepayment of the Notes pursuant to this
paragraph 4B shall be applied in satisfaction of required payments of
principal under paragraph 4A(1) or 4A(2), as the case may be, in inverse
order of their scheduled due dates.
4C. Notice of Optional Prepayment. The Company shall give the
holder of each Note irrevocable written notice of any prepayment pursuant
to paragraph 4B not less than 30 days prior to the prepayment date,
specifying such prepayment date and the principal amount of the Notes, and
of the Notes held by such holder, to be prepaid on such date and stating
that such prepayment is to be made pursuant to paragraph 4B. Notice of
prepayment having been given as aforesaid, the principal amount of the
Notes specified in such notice, together with interest accrued thereon to
the prepayment date and together with the Yield-Maintenance Amount, if any,
with respect thereto, shall become due and payable on such prepayment date.
The Company shall, on or before the day on which it gives written notice of
any prepayment pursuant to paragraph 4B, give telephonic notice of the
principal amount of the Notes to be prepaid and the prepayment date to each
Significant Holder which shall have designated a recipient of such notices
in the Purchaser Schedule attached hereto or by notice in writing to the
Company.
4D. Partial Payments Pro Rata. Upon any partial prepayment of
the Notes pursuant to paragraph 4A(1), 4A(2) or 4B, the principal amount so
prepaid shall be allocated to all Notes at the time outstanding (including,
for the purpose of this paragraph 4D only, all Notes prepaid or otherwise
retired or purchased or otherwise acquired by the Company or any of its
Subsidiaries or Affiliates other than by prepayment pursuant to paragraph
4A(1), 4A(2) or 4B) in proportion to the respective outstanding principal
amounts thereof.
4E. Retirement of Notes. The Company shall not, and shall not
permit any of its Subsidiaries or Affiliates to, prepay or otherwise retire
in whole or in part prior to their stated final maturity (other than by
prepayment pursuant to paragraph 4A(1), 4A(2) or 4B or upon acceleration of
such final maturity pursuant to paragraph 7A), or purchase or otherwise
acquire, directly or indirectly, Notes held by any holder unless the
Company or such Subsidiary or such Affiliate shall have offered to prepay
or otherwise retire or purchase or otherwise acquire, as the case may be,
the same proportion of the aggregate principal amount of Notes held by each
other holder of Notes at the time outstanding upon the same terms and
conditions. Any Notes so prepaid or otherwise retired or purchased or
otherwise acquired by the Company or any of its Subsidiaries or Affiliates
shall not be deemed to be outstanding for any purpose under this Agreement,
except as provided in paragraph 4D.
5. AFFIRMATIVE COVENANTS.
5A. Financial Statements. The Company covenants that it will
deliver to each Significant Holder in quadruplicate:
(i) as soon as practicable and in any event within 60 days
after the end of each quarterly period (other than the last quarterly
period) in each fiscal year, consolidated statements of income and retained
earnings of the Company and its Subsidiaries for the period from the
beginning of the current fiscal year to the end of such quarterly period,
and a consolidated balance sheet of the Company and its Subsidiaries as at
the end of such quarterly period, setting forth in each case in comparative
form figures for the corresponding period in the preceding fiscal year, all
in reasonable detail and satisfactory in form to the Required Holder(s) and
certified by an authorized financial officer of the Company, subject to
changes resulting from year-end adjustments;
(ii) as soon as practicable and in any event within 135 days
after the end of each fiscal year, (A) consolidated statements of income
and cash flows of the Company and its Subsidiaries for such year, (B) a
consolidated balance sheet of the Company and its Subsidiaries as at the
end of such year, (C) consolidating and consolidated statements of income
and cash flows and a consolidated statement of stockholders' earnings of
Northeast Utilities and its subsidiaries for such year, and (D) a
consolidating and consolidated balance sheet of Northeast Utilities and its
subsidiaries as at the end of such year, setting forth in each case in
comparative form corresponding consolidated figures from the preceding
annual consolidated statements, in the case of the Company and its
Subsidiaries, and the preceding annual audit, in the case of Northeast
Utilities and its subsidiaries, all in reasonable detail and satisfactory
in form to the Required Holder(s) (with respect to the financial statements
for the Company and its Subsidiaries) and in conformance with the
requirements of the Securities and Exchange Commission (with respect to the
financial statements for Northeast Utilities and its subsidiaries), and, as
to the consolidated statements of Northeast Utilities and its subsidiaries,
reported on by independent public accountants of recognized national
standing selected by the Company whose report shall be without limitation
as to the scope of the audit and, as to the consolidated statements of the
Company and its Subsidiaries, certified by an authorized financial officer
of the Company;
(iii) promptly upon transmission thereof, copies of all
such financial statements, proxy statements, notices and reports as it
shall send to its public stockholders, if any, and copies of all
registration statements (without exhibits) and all reports which it files
with the Securities and Exchange Commission (or any governmental body or
agency succeeding to the functions of the Securities and Exchange
Commission);
(iv) promptly upon receipt thereof, a copy of each other
report submitted to the Company or any Subsidiary by independent
accountants in connection with any annual, interim or special audit made by
them of the books of the Company or any Subsidiary;
(v) promptly upon transmission thereof by Northeast
Utilities, copies of the Annual Reports on Form 10-K and Form U5S of
Northeast Utilities filed with the Securities and Exchange Commission (or
any governmental body or agency succeeding to the functions of the
Securities and Exchange Commission) and such other reports, financial or
other statements, notices or reports filed by Northeast Utilities pursuant
to the Exchange Act as such Significant Holder shall request, filed with
the Securities and Exchange Commission (or any governmental body or agency
succeeding to the functions of the Securities and Exchange Commission);
(vi) promptly after becoming available, any of the following
which is related to the Millstone Site:
(1) Nuclear Regulatory Commission ("NRC") Systematic
Assessment of Licensee Performance Report,
(2) NRC Inspection Report or, at the Company's option,
a summary thereof prepared by the Company,
(3) NRC Confirmatory Action Letter ("CAL"), and
(4) any other material report, notice from or other
correspondence with or submissions to the NRC or any other governmental or
regulatory agency; and
(vii) with reasonable promptness, such other financial
data as such Significant Holder may reasonably request.
Together with each delivery of financial statements required by clauses (i)
and (ii) above, the Company will deliver to each Significant Holder an
Officer's Certificate stating that there exists no Event of Default or
Default, or, if any Event of Default or Default exists, specifying the
nature and period of existence thereof and what action the Company proposes
to take with respect thereto. Together with each delivery of financial
statements required by clause (ii) above, the Company will deliver to each
Significant Holder a certificate of such accountants stating that, in
making the audit necessary for their report on such financial statements,
they have obtained no knowledge of any Event of Default or Default, or, if
they have obtained knowledge of any Event of Default or Default, specifying
the nature and period of existence thereof. Such accountants, however,
shall not be liable to anyone by reason of their failure to obtain
knowledge of any Event of Default or Default which would not be disclosed
in the course of an audit conducted in accordance with generally accepted
auditing standards. The Company also covenants that immediately after any
Responsible Officer obtains knowledge of an Event of Default or Default, it
will deliver to each Significant Holder an Officer's Certificate specifying
the nature and period of existence thereof and what action the Company
proposes to take with respect thereto.
5B. Information Required by Rule 144A. The Company covenants
that it will, upon the request of the holder of any Note, provide such
holder, and any qualified institutional buyer designated by such holder,
such financial and other information as such holder may reasonably
determine to be necessary in order to permit compliance with the
information requirements of Rule 144A under the Securities Act in
connection with the resale of Notes, except at such times as the Company is
subject to the reporting requirements of section 13 or 15(d) of the
Exchange Act. For the purpose of this paragraph 5B, the term "qualified
institutional buyer" shall have the meaning specified in Rule 144A under
the Securities Act.
5C. Inspection of Property. The Company covenants that it will
permit any Person designated by any Significant Holder in writing, at such
Significant Holder's expense, to visit and inspect any of the properties of
the Company and its Subsidiaries, to examine the corporate books and
financial records of the Company and its Subsidiaries and make copies
thereof or extracts therefrom and to discuss the affairs, finances and
accounts of any of such corporations with the principal officers of the
Company and its independent public accountants, all at such reasonable
times and as often as such Significant Holder may reasonably request.
5D. Conduct of Business and Maintenance of Existence. The
Company covenants that it and its Subsidiaries shall (i) carry out and
conduct its primary business in substantially the same manner and in
substantially the same fields as such business is now carried on and
conducted (it being understood that the Company will remain a wholly-owned
subsidiary of Northeast Utilities whose activities shall be limited to
acting as agent for CL&P, WMECO and the other co-owners of Units 1, 2 and 3
of the Millstone Nuclear Generating Station; provided, however, that the
Company may also act as operator of any other nuclear generating unit in
which Northeast Utilities or any subsidiary thereof owns an interest,
directly or indirectly), (ii) subject to paragraph 6A(3) of this Agreement,
preserve, renew and keep in full force and effect its corporate existence
and its rights, licenses, privileges and franchises necessary or desirable
in the normal conduct of its business (provided, however, that it shall not
be required to preserve any such right, license, privileges or franchise if
it shall determine in its sole discretion that the preservation thereof is
no longer necessary, desirable or permissible in the operation of its
business and it shall reasonably determine that the loss thereof is not
(and could not reasonably be expected to be) disadvantageous in any
material respect to you or any holder of any Note.
5E. Maintenance of Properties. With exception for ordinary wear
and tear, loss by fire or other casualty or condemnation, the Company and
its Subsidiaries will each cause all material properties used or useful in
the conduct of its business to be maintained and kept in good condition,
repair and working order, and cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in its
reasonable judgment may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all
times; provided, however, that neither the Company nor any of its
Subsidiaries shall be prevented from discontinuing the operation and
maintenance of any such properties if such discontinuance is, in its
reasonable judgment, desirable in the operation or maintenance of its
business and is not disadvantageous in any material respect to you or any
holder of any Note.
5F. Obligations and Taxes. The Company and its Subsidiaries
will each pay when due all taxes, assessments, fees and other governmental
charges (including, without limitation, real estate taxes, betterments,
assessments, water rates and sewer charges) and all other proper claims,
demands and liabilities (including, without limitation, claims or demands
of materialmen, mechanics, carriers, warehousemen and landlords); provided,
however, that neither the Company nor any of its Subsidiaries shall be
required to pay any such tax, assessment, fee, charge, claim, demand or
liability if the same is being contested and diligently pursued in good
faith by appropriate proceedings and if the Company or such Subsidiary
shall have set aside on its books, to the extent required by generally
accepted accounting principles applied on a consistent basis, reserves
reasonably deemed by it to be adequate with respect thereto; provided,
further, that the Company or such Subsidiary will pay or cause to be paid
in full, or will post a bond for the full amount of, any of such taxes,
assessments, fees, charges, claims, demands and liabilities forthwith prior
to the commencement of any proceeding to foreclose on any lien which
secures any of such amounts and to which any of its property may be
subject.
5G. Compliance with Laws and Other Covenants. The Company and
its Subsidiaries will each comply in all respects with all laws, rules,
ordinances, bylaws, codes, regulations and governmental orders (federal,
state and local) having applicability to it or to the business or
businesses at any time conducted by it (including, without limitation,
ERISA and the rules and regulations thereunder), or relating to its
property, the improvements thereon and/or occupancy or use thereof, except
where the failure to comply with any provision of the foregoing does not
and could not reasonably be expected to (a) have a material adverse effect
on the business, operations, affairs, condition (financial or otherwise),
properties, assets or prospects of the Company or the Company and its
Subsidiaries taken as a whole, or (b) be disadvantageous in any material
respect to you or any holder of any Note. The Company will comply in all
material respects with all of its covenants in the Millstone Plant
Agreement.
5H. Maintenance of Insurance. The Company covenants that it
shall (i) maintain insurance in such amounts and with such deductibles and
against such liabilities and hazards as customarily is maintained by other
companies operating similar businesses, and (ii) upon a request by any
holder of a Note, deliver to such holder a certificate of the insurer or
the Company's independent insurance agent summarizing the details of such
insurance in effect and stating the term of such insurance.
5I. Covenant to Secure Note Equally. The Company covenants
that, if it or any Subsidiary shall create or assume any Lien upon any of
its property or assets, whether now owned or hereafter acquired, securing
any Debt of the Company or any Subsidiary, other than Liens permitted by
the provisions of paragraph 6A (unless prior written consent to the
creation or assumption thereof shall have been obtained pursuant to
paragraph 11C), it will make or cause to be made effective provision
whereby the Notes will be secured by such Lien equally and ratably with any
and all other Debt thereby secured so long as any such other Debt shall be
so secured.
6. NEGATIVE COVENANTS.
6A. Lien, Debt and Other Restrictions. The Company covenants
that it shall not, and it shall not permit any Subsidiary to, directly or
indirectly:
6A(1). Liens -- create, assume or suffer to exist any Lien upon
any of its properties and assets, whether now owned or herewith acquired,
except:
(i) Liens for taxes, assessments and other governmental
charges not yet due or which (a) are being actively contested in good faith
by appropriate proceedings and (b) for which reserves have been established
in accordance with generally accepted accounting principles;
(ii) Statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics and materialmen (a) incurred in the ordinary course
of business for sums not yet due, (b) the payment of which is not at the
time required, (c) securing obligations which are not overdue for a period
of more than 90 days or (d) securing obligations claimed to be due and
which (i) are being actively contested in good faith by appropriate
proceedings and (ii) for which reserves have been established in accordance
with generally accepted accounting principles;
(iii) Liens (other than any Lien imposed by ERISA)
incurred or deposits made in the ordinary course of business (a) in
connection with workers' compensation, unemployment insurance and other
types of social security, or (b) to secure (or to obtain letters of credit
that secure) the performance of statutory obligations, surety and appeal
bonds, bids, performance bonds, purchase, construction or sales contracts
and other similar obligations, in each case not incurred or made in
connection with the borrowing of money, the obtaining of advances or credit
or the payment of the deferred purchase price of property;
(iv) Easements, rights-of-way, restrictions and other
similar charges or encumbrances, in each case incidental to, and not
interfering with, the ordinary conduct of the business of the Company;
(v) Liens resulting from Capitalized Lease Obligations,
conditional sale agreements or other title retention agreements provided
that the aggregate amount of Debt secured by such Liens is permitted by
paragraph 6A(2);
(vi) Liens arising from prejudgment remedies imposed
pursuant to Section 52-278c of the Connecticut General Statutes or a
similar statute under the laws of another state, provided the Company
contests the imposition of a prejudgment lien pursuant to Section 52-278d
of the Connecticut General Statutes or such other similar statute and, in
the event payment of any judgment rendered against the Company is not
adequately secured by insurance, the Company has substituted a bond for the
prejudgment remedy; and
(vii) Liens existing on the date hereof, which Liens are
described on Schedule 6A(1)(v) hereto;
6A(2). Debt -- Create, incur, assume or suffer to exist any
Debt or any Guarantee, except:
(i) Debt represented by the Notes;
(ii) Existing Debt of the Company which is described on
Schedule 6A(2) hereto; and
(iii) Current Debt not in excess of the aggregate amount of
Current Debt the Company is authorized by the Securities and Exchange
Commission to create, incur or suffer to exist, provided such Current Debt
is consistent with the Securities and Exchange Commission authorization
therefor;
6A(3). Merger and Sale of Assets -- Merge or consolidate with
any other corporation, sell, lease, transfer or otherwise dispose of all or
substantially all of its assets, except that the Company or any Subsidiary
may merge with or into another direct or indirect subsidiary of Northeast
Utilities if (A) immediately before such merger and after giving effect
thereto no Default or Event of Default shall exist, (B) the surviving
corporation expressly assumes, by an agreement satisfactory in substance
and form to the Required Holder(s) (which agreement may require in
connection with such assumption the delivery of such opinions of counsel as
the Required Holder(s) may reasonably request), the obligations of the
Company under this Agreement, the Notes and the Millstone Plant Agreement,
and (C) any authorizations, consents, approvals, exceptions or other
actions by or notices to or filings with any court, administrative or
governmental body or any other Person required for such merger or such
assumption shall have been obtained and made; and (D) the surviving
corporation shall, in the discretion of the Required Holder(s), be of a
credit quality equivalent to the credit quality of the Company.
6A(4). Restricted Investments -- Make or permit to remain
outstanding any loan or advance to, or own, purchase or acquire any stock,
obligations or securities of, or any other interest in, or make any capital
contribution to any Person, except for loans to the Northeast Utilities
System Money Pool, provided that funds contributed to the Northeast
Utilities System Money Pool by the Company or any Subsidiary are invested
only in:
(i) short-term loans made to subsidiaries of Northeast
Utilities participating in the Northeast Utilities System Money Pool,
provided such short-term loans are within amounts and on terms and
conditions approved by the Securities and Exchange Commission;
(ii) obligations issued or guaranteed by the United States
of America;
(iii) obligations issued or guaranteed by any person
controlled or supervised by and acting as an instrumentality of the United
States of America pursuant to authority granted by the Congress of the
United States;
(iv) obligations issued or guaranteed by any state or
political subdivision thereof, provided that such obligations are rated for
investment purposes at not less than "A" by Moody's Investors Service,
Inc., or by Standard & Poor's Corporation;
(v) commercial paper rated not less than "P-1" by Moody's
Investors Service, Inc., or not less than "A-1" by Standard & Poor's
Corporation;
(vi) any other investment permitted under Rule 40(a)(1) of
the Public Utility Holding Company Act of 1935, as amended.
6B. No Amendment of Millstone Plant Agreement -- The Company
covenants that it will not terminate the Millstone Plant Agreement or
amend, supplement, modify or waive any provision of the Millstone Plant
Agreement without the prior written consent of the Required Holder(s).
7. EVENTS OF DEFAULT.
7A. Acceleration. If any of the following events shall occur
and be continuing for any reason whatsoever (and whether such occurrence
shall be voluntary or involuntary or come about or be effected by operation
of law or otherwise):
(i) the Company defaults in the payment of any principal of
or Yield-Maintenance Amount payable with respect to any Note when the same
shall become due, either by the terms thereof or otherwise as herein
provided; or
(ii) the Company defaults in the payment of any interest on
any Note for more than 10 days after the date due; or
(iii) the Company, any Subsidiary, CL&P or WMECO defaults
(whether as primary obligor or as guarantor or other surety) in any payment
of principal of or interest on any other obligation for money borrowed (or
any Capitalized Lease Obligation, any obligation under a conditional sale
or other title retention agreement, any obligation issued or assumed as
full or partial payment for property whether or not secured by a purchase
money mortgage or any obligation under notes payable or drafts accepted
representing extensions of credit) beyond any period of grace provided with
respect thereto, or the Company, any Subsidiary, CL&P or WMECO fails to
perform or observe any other agreement, term or condition contained in any
agreement under which any such obligation is created (or if any other event
thereunder or under any such agreement shall occur and be continuing) and
the effect of such failure or other event is to cause, or to permit the
holder or holders of such obligation (or a trustee on behalf of such holder
or holders) to cause, such obligation to become due (or to be repurchased
by the Company, any Subsidiary, CL&P or WMECO prior to any stated
maturity), provided that the aggregate amount of all obligations as to
which such a payment default shall occur and be continuing or such a
failure or other event causing or permitting acceleration (or resale to the
Company, any Subsidiary, CL&P or WMECO) shall occur and be continuing
exceeds $15,000,000; or
(iv) any representation or warranty made by the Company
herein, by CL&P or WMECO in the Inducement Letter or by the Company, CL&P
or WMECO or any of its officers in any writing furnished in connection with
or pursuant to this Agreement shall be false in any material respect on the
date as of which made; or
(v) the Company fails to perform or observe any agreement
contained in paragraph 6 or CL&P or WMECO fails to perform or observe any
agreement contained in the Inducement Letter; or
(vi) the Company fails to perform or observe any other
agreement, term or condition contained herein and such failure shall not be
remedied within 30 days after any Responsible Officer obtains actual
knowledge thereof; or
(vii) the Company, any Subsidiary, CL&P or WMECO makes an
assignment for the benefit of creditors or is generally not paying its
debts as such debts become due; or
(viii) any decree or order for relief in respect of the
Company, any Subsidiary, CL&P or WMECO is entered under any bankruptcy,
reorganization, compromise, arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar law, whether now or hereafter in
effect (herein called the "Bankruptcy Law"), of any jurisdiction; or
(ix) the Company, any Subsidiary, CL&P or WMECO petitions or
applies to any tribunal for, or consents to, the appointment of, or taking
possession by, a trustee, receiver, custodian, liquidator or similar
official of the Company, any Subsidiary, CL&P or WMECO or of any
substantial part of the assets of the Company, any Subsidiary, CL&P or
WMECO or commences a voluntary case under the Bankruptcy Law of the United
States or any proceedings (other than proceedings for the voluntary
liquidation and dissolution of a Subsidiary) relating to the Company, any
Subsidiary, CL&P or WMECO under the Bankruptcy Law of any other
jurisdiction; or
(x) any such petition or application is filed, or any such
proceedings are commenced, against the Company or any Subsidiary, CL&P or
WMECO and the Company, such Subsidiary, CL&P or WMECO by any act indicates
its approval thereof, consent thereto or acquiescence therein, or an order,
judgment or decree is entered appointing any such trustee, receiver,
custodian, liquidator or similar official, or approving the petition in any
such proceedings, and such order, judgment or decree remains unstayed and
in effect for more than 90 days; or
(xi) any order, judgment or decree is entered in any
proceedings against the Company, CL&P or WMECO decreeing the dissolution of
the Company and such order, judgment or decree remains unstayed and in
effect for more than 90 days; or
(xii) any order, judgment or decree is entered in any
proceedings against the Company, any Subsidiary, CL&P or WMECO decreeing a
split-up of the Company, such Subsidiary, CL&P or WMECO which requires the
divestiture of assets representing a substantial part, or the divestiture
of the stock of a Subsidiary whose assets represent a substantial part, of
the consolidated assets of the Company and its Subsidiaries or the
consolidated assets of CL&P or WMECO, as the case may be (determined in
accordance with generally accepted accounting principles) or which requires
the divestiture of assets, or stock of a Subsidiary, which shall have
contributed a substantial part of the consolidated net income of the
Company and its Subsidiaries (determined in accordance with generally
accepted accounting principles) for any of the three fiscal years then most
recently ended, and such order, judgment or decree remains unstayed and in
effect for more than 60 days; or
(xiii) a final judgment in an amount in excess of
$15,000,000 is rendered against the Company, any Subsidiary, CL&P or WMECO
and, within 60 days after entry thereof, such judgment is not discharged or
execution thereof stayed pending appeal, or within 60 days after the
expiration of any such stay, such judgment is not discharged; or
(xiv) the Company or any ERISA Affiliate, in its
capacity as an employer under a Multiemployer Plan, makes a complete or
partial withdrawal from such Multiemployer Plan resulting in the incurrence
by such withdrawing employer of a withdrawal liability which is or would be
materially adverse to the business, condition (financial or otherwise) or
operations of the Company; or
(xv) the Millstone Plant Agreement, or any provision thereof
which would adversely affect the rights of the Company under Section 3(b)
thereof, or the Inducement Letter, shall at any time be terminated or shall
cease to be valid and binding on any party thereto, or shall be declared to
be null or void, or the validity or enforceability thereof shall be
contested by any party thereto, or a proceeding shall be commenced by any
governmental agency or authority having jurisdiction over any party thereto
seeking to establish the invalidity or unenforceability thereof, or any
party thereto shall deny that such party has no further liability or
obligation thereunder, or any party thereto shall default in the
performance of any provision thereof;
then (a) if such event is an Event of Default specified in clause (i) or
(ii) of this paragraph 7A, the holder of any Note (other than the Company
or any of its Subsidiaries or Affiliates) may at its option, by notice in
writing to the Company, declare such Note to be, and such Note shall
thereupon be and become, immediately due and payable at par together with
interest accrued thereon, without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Company, (b) if
such event is an Event of Default specified in clause (viii), (ix) or (x)
of this paragraph 7A with respect to the Company, all of the Notes at the
time outstanding shall automatically become immediately due and payable at
par together with interest accrued thereon, without presentment, demand,
protest or notice of any kind, all of which are hereby waived by the
Company, and (c) if such event is not an Event of Default specified in
clause (viii), (ix) or (x) of this paragraph 7A with respect to the
Company, the Required Holder(s) may at its or their option, by notice in
writing to the Company, declare all of the Notes to be, and all of the
Notes shall thereupon be and become, immediately due and payable together
with interest accrued thereon and together with the Yield-Maintenance
Amount, if any, with respect to each Note, without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Company, provided that the Yield-Maintenance Amount, if any, with respect
to each Note shall be due and payable upon such declaration only if (x)
such event is an Event of Default specified in any of clauses (i) to (vi),
inclusive, or clause (xv), of this paragraph 7A, (y) the Required Holder(s)
shall have given to the Company, at least 10 Business Days before such
declaration, written notice stating its or their intention so to declare
the Notes to be immediately due and payable and identifying one or more
such Events of Default whose occurrence on or before the date of such
notice permits such declaration and (z) one or more of the Events of
Default so identified shall be continuing at the time of such declaration.
7B. Rescission of Acceleration. At any time after any or all of
the Notes shall have been declared immediately due and payable pursuant to
paragraph 7A, the Required Holder(s) may, by notice in writing to the
Company, rescind and annul such declaration and its consequences if (i) the
Company shall have paid all overdue interest on the Notes, the principal of
and Yield-Maintenance Amount, if any, payable with respect to any Notes
which have become due otherwise than by reason of such declaration, and
interest on such overdue interest and overdue principal and
Yield-Maintenance Amount at the rate specified in the Notes, (ii) the
Company shall not have paid any amounts which have become due solely by
reason of such declaration, (iii) all Events of Default and Defaults, other
than non-payment of amounts which have become due solely by reason of such
declaration, shall have been cured or waived pursuant to paragraph 11C, and
(iv) no judgment or decree shall have been entered for the payment of any
amounts due pursuant to the Notes or this Agreement. No such rescission or
annulment shall extend to or affect any subsequent Event of Default or
Default or impair any right arising therefrom.
7C. Notice of Acceleration or Rescission. Whenever any Note
shall be declared immediately due and payable pursuant to paragraph 7A or
any such declaration shall be rescinded and annulled pursuant to paragraph
7B, the Company shall forthwith give written notice thereof to the holder
of each Note at the time outstanding.
7D. Other Remedies. If any Event of Default or Default shall
occur and be continuing, the holder of any Note may proceed to protect and
enforce its rights under this Agreement and such Note by exercising such
remedies as are available to such holder in respect thereof under
applicable law, either by suit in equity or by action at law, or both,
whether for specific performance of any covenant or other agreement
contained in this Agreement or in aid of the exercise of any power granted
in this Agreement. No remedy conferred in this Agreement upon the holder
of any Note is intended to be exclusive of any other remedy, and each and
every such remedy shall be cumulative and shall be in addition to every
other remedy conferred herein or now or hereafter existing at law or in
equity or by statute or otherwise.
8. REPRESENTATIONS, COVENANTS AND WARRANTIES. The Company
represents, covenants and warrants as follows:
8A. Organization. The Company is a corporation duly organized
and existing in good standing under the laws of the State of Connecticut.
The Company has no Subsidiaries. The Company is duly qualified and
authorized to transact business as a foreign corporation and is in good
standing in every jurisdiction in which the nature of the business
conducted by it or the ownership of its properties or assets makes such
qualification necessary, except where the failure to be in good standing or
to be so qualified or authorized would not have a material adverse effect
on the business, condition (financial or otherwise) or operations of the
Company. All of the outstanding shares of capital stock of the Company
have been duly authorized and validly issued, are fully paid and
nonassessable and are owned beneficially and of record by Northeast
Utilities free and clear of any Lien. There are no outstanding rights,
options, warrants, or agreements for the purchase from, or sale or issuance
by, the Company of any of its capital stock or any securities convertible
into or exchangeable for any of its capital stock or any such rights,
options, warrants or agreements.
8B. Power and Authority. The Company has all requisite
corporate power to conduct its business as currently conducted and as
currently proposed to be conducted. The Company has all requisite
corporate power to execute, deliver and perform its obligations under this
Agreement, the Notes and the Millstone Plant Agreement. The execution,
delivery and performance by the Company of each of this Agreement, the
Notes and the Millstone Plant Agreement have been duly authorized by all
requisite corporate action on the part of the Company. The Company has
duly executed and delivered each of this Agreement, the Notes and the
Millstone Plant Agreement, and each of this Agreement, the Notes and the
Millstone Plant Agreement constitutes the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance
with its terms.
8C. Financial Statements. The Company has furnished you with
the following financial statements, identified by a principal financial
officer of the Company: (i) a balance sheet of the Company as at December
31 in each of the years 1991 and 1992, inclusive, and statements of income
and cash flows of the Company for each such year, all certified by the
Chief Financial Officer of the Company; and (ii) a balance sheet of the
Company as at March 31 and June 30 in each of the years 1991 and 1992 and
statements of income and cash flows for the three-month and six-month
periods ended on such dates, prepared by the Company. Such financial
statements (including any related schedules and/or notes) are true and
correct in all material respects (subject, as to interim statements, to
changes resulting from audits and year-end adjustments), have been prepared
in accordance with generally accepted accounting principles consistently
followed throughout the periods involved and show all liabilities, direct
and contingent, of the Company required to be shown in accordance with such
principles. The balance sheets fairly present the condition of the Company
as at the dates thereof, and the statements of income and cash flows fairly
present the results of the operations of the Company and its cash flows for
the periods indicated. There has been no material adverse change in the
business, condition (financial or otherwise) or operations of the Company
since December 31, 1992.
8D. Actions Pending. There is no action, suit, investigation or
proceeding pending or, to the knowledge of the Company, threatened against
the Company, or any properties or rights of the Company, by or before any
court, arbitrator or administrative or governmental body which is likely to
result in any material adverse change in the business, condition (financial
or otherwise) or operations of the Company.
8E. Outstanding Debt. The Company does not have outstanding any
Debt except as set forth on Schedule 6A(2) attached hereto. There exists
no default under the provisions of any instrument evidencing such Debt or
of any agreement relating thereto.
8F. Title to Properties. The Company has good and indefeasible
title to its real properties (other than properties which it leases) and
good title to all of its other properties and assets, including the
properties and assets reflected in the balance sheet as at December 31,
1992 referred to in paragraph 8C (other than properties and assets disposed
of in the ordinary course of business), subject to no Lien of any kind
except Liens permitted by paragraph 6A. All leases necessary in any
material respect for the conduct of the business of the Company are valid
and subsisting and are in full force and effect.
8G. Taxes. The Company has filed all federal, state and other
income tax returns which, to the knowledge of the officers of the Company,
are required to be filed, and has paid all taxes as shown on such returns
and on all assessments received by it to the extent that such taxes have
become due, except such taxes as are being contested in good faith by
appropriate proceedings for which adequate reserves have been established
in accordance with generally accepted accounting principles.
8H. Conflicting Agreements and Other Matters. The Company is
not a party to any contract or agreement or subject to any charter or other
corporate restriction which materially and adversely affects its business,
property or assets, or financial condition. Neither the execution nor
delivery of this Agreement, the Notes or the Millstone Plant Agreement, nor
the offering, issuance and sale of the Notes, nor fulfillment of nor
compliance with the terms and provisions hereof, of the Notes or the
Millstone Plant Agreement will conflict with, or result in a breach of the
terms, conditions or provisions of, or constitute a default under, or
result in any violation of, or result in the creation of any Lien upon any
of the properties or assets of the Company pursuant to, the charter or
by-laws of the Company, any award of any arbitrator or any agreement
(including any agreement with stockholders), instrument, order, judgment,
decree, statute, law, rule or regulation to which the Company is subject.
The Company is not a party to, or otherwise subject to any provision
contained in, any instrument evidencing Indebtedness of the Company, any
agreement relating thereto or any other contract or agreement (including
its charter) which limits the amount of, or otherwise imposes restrictions
on the incurring of, Debt of the Company of the type to be evidenced by the
Notes except as set forth in the agreements listed in Schedule 8H attached
hereto.
8I. Offering of Notes. Neither the Company nor any agent acting
on its behalf has, directly or indirectly, offered the Notes or any similar
security of the Company for sale to, or solicited any offers to buy the
Notes or any similar security of the Company from, or otherwise approached
or negotiated with respect thereto with, any Person other than
institutional investors, and neither the Company nor any agent acting on
its behalf has taken or will take any action which would subject the
issuance or sale of the Notes to the provisions of section 5 of the
Securities Act or to the provisions of any securities or Blue Sky law of
any applicable jurisdiction.
8J. Use of Proceeds. The Company does not own or have any
present intention of acquiring any "margin stock" as defined in Regulation
G (12 CFR Part 207) of the Board of Governors of the Federal Reserve System
(herein called "margin stock"). The proceeds of sale of the Notes will be
used (i) to finance the construction by the Company on behalf of CL&P and
WMECO of Building 475 located on the Millstone Site, (ii) to repay
indebtedness incurred by the Company in connection with such construction,
(iii) to pay certain costs associated with the transactions contemplated by
this Agreement, and (iv) in the event a balance of the proceeds of the
Notes remains unspent after application thereof for the purposes set forth
in clauses (i) through (iii) hereof and to the extent permitted by the
regulatory orders referred to in paragraph 8L(i) hereof, to apply the
balance of such proceeds for the Company's general corporate purposes.
None of such proceeds will be used, directly or indirectly, for the
purpose, whether immediate, incidental or ultimate, of purchasing or
carrying any margin stock or for the purpose of maintaining, reducing or
retiring any Indebtedness which was originally incurred to purchase or
carry any stock that is currently a margin stock or for any other purpose
which might constitute this transaction a "purpose credit" within the
meaning of such Regulation G. Neither the Company nor any agent acting on
its behalf has taken or will take any action which might cause this
Agreement or the Notes to violate Regulation G, Regulation T or any other
regulation of the Board of Governors of the Federal Reserve System or to
violate the Exchange Act, in each case as in effect now or as the same may
hereafter be in effect.
8K. ERISA. No accumulated funding deficiency (as defined in
section 302 of ERISA and section 412 of the Code), whether or not waived,
exists with respect to any Plan (other than a Multiemployer Plan). No
liability to the Pension Benefit Guaranty Corporation has been or is
expected by the Company or any ERISA Affiliate to be incurred with respect
to any Plan (other than a Multiemployer Plan) by the Company or any ERISA
Affiliate which is or would be materially adverse to the business,
condition (financial or otherwise) or operations of the Company. Neither
the Company nor any ERISA Affiliate has incurred or presently expects to
incur any withdrawal liability under Title IV of ERISA with respect to any
Multiemployer Plan which is or would be materially adverse to the business,
condition (financial or otherwise) or operations of the Company. The
execution and delivery of this Agreement and the issuance and sale of the
Notes will be exempt from, or will not involve any transaction which is
subject to, the prohibitions of section 406 of ERISA and will not involve
any transaction in connection with which a penalty could be imposed under
section 502(i) of ERISA or a tax could be imposed pursuant to section 4975
of the Code. The representation by the Company in the next preceding
sentence is made in reliance upon and subject to the accuracy of your
representation in paragraph 9B.
8L. Governmental and Other Third Party Consent. Neither the
nature of the Company, nor any of its businesses or properties, nor any
relationship between the Company and any other Person, nor any circumstance
in connection with the offering, issuance, sale or delivery of the Notes is
such as to require any authorization, consent, approval, exemption or other
action by or notice to or filing with any court or administrative or
governmental body (other than routine filings after the date of funding
with the Securities and Exchange Commission and/or state Blue Sky
authorities) in connection with the execution and delivery of this
Agreement or the Millstone Plant Agreement, the offering, issuance, sale,
execution or delivery of the Notes or fulfillment of or compliance with the
terms and provisions hereof, of the Millstone Plant Agreement, of the
Inducement Letter or of the Notes, other than (i) the order of the
Securities and Exchange Commission dated December 16, 1993 under the Public
Utility Holding Company Act of 1935, as amended, and the order of the CDPUC
dated December 1, 1993 under Section 16-43 of the Connecticut General
Statutes, authorizing the execution and delivery of this Agreement and the
execution, sale, delivery and issuance of the Notes, each of which orders
has been obtained, is in full force and effect, has not been stayed,
suspended, modified, vacated or held invalid, is not being contested and
with respect to which no petition for rehearing, stay or suspension or
appeal or review has been filed, and (ii) the order of the Securities and
Exchange Commission dated September 24, 1985 under the Public Utility
Holding Company Act of 1935, as amended, and the order of the CDPUC dated
September 17, 1985, authorizing the execution, delivery and performance of
the Millstone Plant Agreement, each of which orders has been obtained, is
final and in full force and effect, has not been stayed, suspended,
modified, vacated or held invalid, is not being contested and is not
subject to petition for rehearing, stay suspension or appeal or review, and
the time period in which a petition for rehearing, stay or suspension or an
application for appeal or review of either such order must be filed has
expired. The Company has delivered to you true and complete copies of each
such order.
8M. Environmental Compliance. The Company and all of its
properties and facilities are in compliance in all respects with and to its
best knowledge have complied at all times and in all respects with all
federal, state, local and regional statutes, laws, ordinances and judicial
or administrative orders, judgments, rulings and regulations relating to
protection of the environment except, in any such case, where failure to
comply would not result in a material adverse effect on the business,
condition (financial or otherwise) or operations of the Company.
8N. Disclosure. Neither this Agreement nor any other document,
certificate or statement furnished to you by or on behalf of the Company,
CL&P, WMECO, Northeast Utilities or Northeast Utilities Service Company in
connection herewith contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
contained herein and therein not misleading. There is no fact peculiar to
the Company, CL&P or WMECO which materially adversely affects or in the
future may (so far as the Company can now foresee) materially adversely
affect the business, property or assets, or financial condition of the
Company, CL&P or WMECO and which has not been set forth in this Agreement
or in the other documents, certificates and statements furnished to you by
or on behalf of the Company, CL&P or WMECO prior to the date hereof in
connection with the transactions contemplated hereby.
8O. Permits and Other Operating Rights. The Company has all
such valid and sufficient franchises, licenses, permits, operating rights,
certificates of convenience and necessity, other authorizations from
federal, state, regional, municipal and other local regulatory bodies or
administrative agencies or other governmental bodies having jurisdiction
over the Company or any of the Company's properties, easements and
rights-of-way as are necessary for the ownership, operation and maintenance
of its business and properties, subject to exceptions and deficiencies
which do not materially and adversely affect its business and operations
considered as a whole or any material part thereof, and such franchises,
licenses, permits, operating rights, certificates of convenience and
necessity, other authorizations from federal, state, regional, municipal
and other local regulatory bodies or administrative agencies or other
governmental bodies having jurisdiction over the Company or any of the
Company's properties, easements and rights-of-way are free from burdensome
restrictions or conditions of an unusual character in the utility business
and are free from restrictions or conditions materially adverse to the
business or operations of the Company, and the Company is not in violation
thereof in any material respect.
8P. Millstone Plant Agreement. The Company has delivered to
each of you prior to the date hereof a true, correct and complete copy of
the Millstone Plant Agreement, as in effect on the date hereof, which has
not been amended or otherwise modified and no waiver has been given with
respect thereto. The Millstone Plant Agreement has been duly authorized,
executed and delivered by, and is the legal, valid and binding obligation
of, each party thereto, and is in full force and effect. No party to the
Millstone Plant Agreement is in default thereunder, nor is there any claim
of such default.
8Q. Regulatory Status of Company. The Company is not an
"investment company" or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended. The
Company is a "subsidiary company" of a "holding company" within the meaning
of the Public Utility Holding Company Act of 1935, as amended, which
holding company is registered as a "public utility holding company" under
such Act. The Company is a "public service company" under Connecticut law
which is subject to the jurisdiction of the CDPUC. The Company is not a
"public utility" or a "public service company" under the law of any state,
other than the State of Connecticut, or subject to the jurisdiction of any
commission or regulatory authority or Person in any state, other than the
CDPUC. Solely by purchasing the Notes you (i) will not be (a) a "public
utility, a "holding company" or an "affiliate" of a "holding company" or a
"subsidiary company" of a "holding company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended, (b) a " public
utility" within the meaning of the Federal Power Act, as amended, or (c) a
"public service company" under Connecticut law or a "public utility" or a
"public service company" under the law of any other state or (ii) subject
to the jurisdiction of the Federal Energy Regulatory Commission, the CDPUC
or any other commission or Person in any other state.
2. REPRESENTATIONS OF THE PURCHASER. You represent as follows:
9A. Nature of Purchase. You are not acquiring the Notes to be
purchased by you hereunder with a view to or for sale in connection with
any distribution thereof within the meaning of the Securities Act, provided
that the disposition of your property shall at all times be and remain
within your control.
9B. Source of Funds. No part of the funds being used by you to
pay the purchase price of the Notes being purchased by you hereunder
constitutes assets allocated to any separate account maintained by you.
For the purpose of this paragraph 9B, the term "separate account" shall
have the meaning specified in section 3 of ERISA.
10. DEFINITIONS. For the purpose of this Agreement, the terms
defined in the introductory sentence and in paragraphs 1 and 2 shall have
the respective meanings specified therein, and the following terms shall
have the meanings specified with respect thereto below:
10A. Yield-Maintenance Terms.
"Business Day" shall mean any day other than a Saturday, a Sunday
or a day on which commercial banks in New York City are required or
authorized to be closed.
"Called Principal" shall mean, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to paragraph 4A(2) or
4B or is declared to be immediately due and payable pursuant to paragraph
7A, as the context requires.
"Discounted Value" shall mean, with respect to the Called
Principal of any Note, the amount obtained by discounting all Remaining
Scheduled Payments with respect to such Called Principal from their
respective scheduled due dates under paragraph 4A(1) (determined by
assuming, if a Downgrade Event has occurred, that the Company is still
required to make the required prepayments under paragraph 4A(1) and any
prepayments under paragraph 4A(2) or 4B are applied to required payments
under paragraph 4A(1) in the inverse order of their maturity) to the
Settlement Date with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (applied on the same
periodic basis as that on which interest on the Notes is payable) equal to
the Reinvestment Yield with respect to such Called Principal.
"Reinvestment Yield" shall mean, with respect to the Called
Principal of any Note, the yield to maturity implied by (i) the yields
reported, as of 10:00 a.m. (New York City time) on the Business Day next
preceding the Settlement Date with respect to such Called Principal, on the
display designated as "Page 500" on the Telerate Service (or such other
display as may replace Page 500 on the Telerate Service) for actively
traded U.S. Treasury securities having a maturity equal to the Remaining
Average Life of such Called Principal as of such Settlement Date, or if
such yields shall not be reported as of such time or the yields reported as
of such time shall not be ascertainable, (ii) the Treasury Constant
Maturity Series yields reported, for the latest day for which such yields
shall have been so reported as of the Business Day next preceding the
Settlement Date with respect to such Called Principal, in Federal Reserve
Statistical Release H.15 (519) (or any comparable successor publication)
for actively traded U.S. Treasury securities having a constant maturity
equal to the Remaining Average Life of such Called Principal as of such
Settlement Date. Such implied yield shall be determined, if necessary, by
(a) converting U.S. Treasury bill quotations to bond-equivalent yields in
accordance with accepted financial practice and (b) interpolating linearly
between yields reported for various maturities.
"Remaining Average Life" shall mean, with respect to the Called
Principal of any Note, the number of years (calculated to the nearest
one-twelfth year) obtained by dividing (i) such Called Principal into (ii)
the sum of the products obtained by multiplying (a) each Remaining
Scheduled Payment of such Called Principal (but not of interest thereon) by
(b) the number of years (calculated to the nearest one-twelfth year) which
will elapse between the Settlement Date with respect to such Called
Principal and the scheduled due date under paragraph 4A(1) (determined by
assuming, if a Downgrade Event has occurred, that the Company is still
required to make the required prepayments under paragraph 4A(1) and any
prepayments under paragraph 4A(2) or 4B are applied to required payments
under paragraph 4A(1) in the inverse order of their maturity) of such
Remaining Scheduled Payment.
"Remaining Scheduled Payments" shall mean, with respect to the
Called Principal of any Note, all payments of such Called Principal and
interest thereon that would be due on or after the Settlement Date with
respect to such Called Principal under paragraph 4A(1) (determined by
assuming, if a Downgrade Event has occurred, that the Company is still
required to make the required prepayments under paragraph 4A(1) and any
prepayments under paragraph 4A(2) or 4B are applied to required payments
under paragraph 4A(1) in the inverse order of their maturity) if no payment
of such Called Principal were made prior to its scheduled due date under
paragraph 4A(1).
"Settlement Date" shall mean, with respect to the Called
Principal of any Note, the date on which such Called Principal is to be
prepaid pursuant to paragraph 4A(2) or 4B or is declared to be immediately
due and payable pursuant to paragraph 7A, as the context requires.
"Yield-Maintenance Amount" shall mean, with respect to any Note,
an amount equal to the excess, if any, of the Discounted Value of the
Called Principal of such Note over the sum of (i) such Called Principal
plus (ii) interest accrued thereon as of (including interest due on) the
Settlement Date with respect to such Called Principal. The
Yield-Maintenance Amount shall in no event be less than zero.
10B. Other Terms.
"Affiliate" shall mean any Person directly or indirectly
controlling, controlled by, or under direct or indirect common control
with, the Company, except a Subsidiary. A Person shall be deemed to
control a corporation if such Person possesses, directly or indirectly, the
power to direct or cause the direction of the management and policies of
such corporation, whether through the ownership of voting securities, by
contract or otherwise.
"Bankruptcy Law" shall have the meaning specified in clause
(viii) of paragraph 7A.
"Capitalized Lease Obligation" shall mean any rental obligation
which, under generally accepted accounting principles, would be required to
be capitalized on the books of the Company or any Subsidiary, CL&P or
WMECO, taken at the amount thereof accounted for as indebtedness (net of
interest expense) in accordance with such principles.
"CDPUC" shall mean the Connecticut Department of Public Utility
Control.
"CL&P" shall mean The Connecticut Light and Power Company, a
Connecticut corporation, and its successors and assigns.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Current Debt" shall mean, with respect to any Person, all
Indebtedness of such Person for borrowed money which by its terms or by the
terms of any instrument or agreement relating thereto matures on demand or
within one year from the date of the creation thereof and is not directly
or indirectly renewable or extendible at the option of the debtor to a date
more than one year from the date of the creation thereof, provided that
Indebtedness for borrowed money outstanding under a revolving credit or
similar agreement which obligates the lender or lenders to extend credit
over a period of more than one year shall constitute Funded Debt and not
Current Debt, even though such Indebtedness by its terms matures on demand
or within one year from the date of the creation thereof.
"Debt" shall mean Current Debt and Funded Debt.
"Downgrade Date" shall mean the first day upon which a Downgrade
Event occurs.
"Downgrade Event" shall mean either (a) the rating by Moody's
Investors Service, Inc. (or any successor thereto) of any long-term bonds
of CL&P or any long-term bonds of WMECO at less than "Baa3", or (b) the
rating by Standard & Poor's Corporation (or any successor thereto) of any
long-term bonds of CL&P or any long-term bonds of WMECO at less than
"BBB-".
"Downgrade Payment Date" shall mean each of (i) the 10th day
after the Downgrade Date, and (ii) the first and second anniversaries of
the date specified in clause (i).
"Downgrade Prepayment Amount" shall mean one-fourth of the
aggregate principal of the Notes outstanding on the Downgrade Date.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"ERISA Affiliate" shall mean any corporation which is a member of
the same controlled group of corporations as the Company within the meaning
of section 414(b) of the Code, or any trade or business which is under
common control with the Company within the meaning of section 414(c) of the
Code.
"Event of Default" shall mean any of the events specified in
paragraph 7A, provided that there has been satisfied any requirement in
connection with such event for the giving of notice, or the lapse of time,
or the happening of any further condition, event or act, and "Default"
shall mean any of such events, whether or not any such requirement has been
satisfied.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Funded Debt" shall mean, with respect to any Person, all
Indebtedness of such Person which by its terms or by the terms of any
instrument or agreement relating thereto matures, or which is otherwise
payable or unpaid, more than one year from, or is directly or indirectly
renewable or extendible at the option of the debtor to a date more than one
year (including an option of the debtor under a revolving credit or similar
agreement obligating the lender or lenders to extend credit over a period
of more than one year) from, the date of the creation thereof.
"Guarantee" shall mean, with respect to any Person, any direct or
indirect liability, contingent or otherwise, of such Person with respect to
any indebtedness, lease, dividend or other obligation of another,
including, without limitation, any such obligation directly or indirectly
guaranteed, endorsed (otherwise than for collection or deposit in the
ordinary course of business) or discounted or sold with recourse by such
Person, or in respect of which such Person is otherwise directly or
indirectly liable, including, without limitation, any such obligation in
effect guaranteed by such Person through any agreement (contingent or
otherwise) to purchase, repurchase or otherwise acquire such obligation or
any security therefor, or to provide funds for the payment or discharge of
such obligation (whether in the form of loans, advances, stock purchases,
capital contributions or otherwise), or to maintain the solvency or any
balance sheet or other financial condition of the obligor of such
obligation, or to make payment for any products, materials or supplies or
for any transportation or services regardless of the non-delivery or
non-furnishing thereof, in any such case if the purpose or intent of such
agreement is to provide assurance that such obligation will be paid or
discharged, or that any agreements relating thereto will be complied with,
or that the holders of such obligation will be protected against loss in
respect thereof. The amount of any Guarantee shall be equal to the
outstanding principal amount of the obligation guaranteed or such lesser
amount to which the maximum exposure of the guarantor shall have been
specifically limited.
"Indebtedness" shall mean, with respect to any Person, without
duplication, (i) all items (excluding items of contingency reserves or of
reserves for deferred income taxes) which in accordance with generally
accepted accounting principles would be included in determining total
liabilities as shown on the liability side of a balance sheet of such
Person as of the date on which Indebtedness is to be determined, (ii) all
indebtedness secured by any Lien on any property or asset owned or held by
such Person subject thereto, whether or not the indebtedness secured
thereby shall have been assumed, and (iii) all indebtedness of others with
respect to which such Person has become liable by way of a Guarantee.
"Inducement Letter" shall have the meaning specified in paragraph
3I.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien (statutory or otherwise) or charge of any kind (including
any agreement to give any of the foregoing, any conditional sale or other
title retention agreement, any lease in the nature thereof, and the filing
of or agreement to give any financing statement under the Uniform
Commercial Code of any jurisdiction) or any other type of preferential
arrangement for the purpose, or having the effect, of protecting a creditor
against loss or securing the payment or performance of an obligation.
"Millstone Plant Agreement" shall mean the Amended and Restated
Plant Agreement, dated as of December 1, 1984, among the Company, CL&P and
WMECO.
"Millstone Site" shall mean the approximately 500-acre site
located in Waterford, Connecticut containing the nuclear generating units
and appurtenant equipment and facilities operated by Borrower on behalf of,
among others, CL&P and WMECO pursuant to the Millstone Plant Agreement.
"Multiemployer Plan" shall mean any Plan which is a
"multiemployer plan" (as such term is defined in section 4001(a)(3) of
ERISA).
"Northeast Utilities" shall mean Northeast Utilities, a
Massachusetts Voluntary Association, and its successors and assigns.
"Northeast Utilities System Money Pool" shall mean the money pool
among Northeast Utilities, CL&P, WMECO, Public Service Company of New
Hampshire, North Atlantic Energy Corporation, Holyoke Water Power Company,
the Company, The Rocky River Realty Company, The Quinnehtuk Company and HEC
Inc. approved by the Securities and Exchange Commission in Release No.
35-25710. A copy of such approval and the application therefor is attached
hereto as Schedule 10B(2).
"Officer's Certificate" shall mean a certificate signed in the
name of the Company by its President, one of its Vice Presidents, its
Treasurer or one of its Assistant Treasurers.
"Person" shall mean and include an individual, a partnership, a
joint venture, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof.
"Plan" shall mean any "employee pension benefit plan" (as such
term is defined in section 3 of ERISA) which is or has been established or
maintained, or to which contributions are or have been made, by the Company
or any ERISA Affiliate.
"Responsible Officer" shall mean the chief executive officer,
chief operating officer, if any, chief financial officer, chief accounting
officer or assistant treasurer for finance of the Company or any other
officer of the Company involved principally in its financial administration
or its controllership function.
"Required Holder(s)" shall mean the holder or holders of at least
66-2/3% of the aggregate principal amount of the Notes from time to time
outstanding.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Significant Holder" shall mean (i) you, so long as you shall
hold (or be committed under this Agreement to purchase) any Note, or (ii)
any other holder of at least 5% of the aggregate principal amount of the
Notes at any time outstanding.
"Subsidiary" shall mean any corporation organized under the laws
of any state of the United States, Canada, or any province of Canada, which
conducts the major portion of its business in and makes the major portion
of its sales to Persons located in the United States or Canada, and at
least 51% of the total combined voting power of all classes of Voting Stock
of which shall, at the time as of which any determination is being made, be
owned by the Company either directly or through Subsidiaries.
"Transferee" shall mean any direct or indirect transferee of all
or any part of any Note purchased by you under this Agreement.
"Voting Stock" shall mean, with respect to any corporation, any
shares of stock of such corporation whose holders are entitled under
ordinary circumstances to vote for the election of directors of such
corporation (irrespective of whether at the time stock of any other class
or classes shall have or might have voting power by reason of the happening
of any contingency).
"WMECO" shall mean Western Massachusetts Electric Company, a
Massachusetts corporation, and its successors and assigns.
10C. Accounting Principles, Terms and Determinations. All
references in this Agreement to "generally accepted accounting principles"
shall be deemed to refer to generally accepted accounting principles in
effect in the United States at the time of application thereof. Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all determinations with respect to accounting matters
hereunder shall be made, and all unaudited financial statements and
certificates and reports as to financial matters required to be furnished
hereunder shall be prepared, in accordance with generally accepted
accounting principles, applied on a basis consistent with the most recent
audited consolidated financial statements of the Company and its
Subsidiaries delivered pursuant to clause (ii) of paragraph 5A or, if no
such statements have been so delivered, the most recent financial
statements referred to in clause (i) of paragraph 8C.
11. MISCELLANEOUS.
11A. Note Payments. The Company agrees that, so long as you
shall hold any Note, it will make payments of principal of, interest on and
any Yield-Maintenance Amount payable with respect to such Note, delayed
delivery fees, cancellation fee or commitment fee which comply with the
terms of this Agreement, by wire transfer of immediately available funds
for credit (not later than 12:00 noon, New York City time, on the date due)
to your account or accounts as specified in the Purchaser Schedule attached
hereto, or such other account or accounts in the United States as you may
designate in writing, notwithstanding any contrary provision herein or in
any Note with respect to the place of payment. Interest on the Notes and
the commitment fee shall be payable based on actual days outstanding and a
360-day year. You agree that, before disposing of any Note, you will make
a notation thereon (or on a schedule attached thereto) of all principal
payments previously made thereon and of the date to which interest thereon
has been paid. The Company agrees to afford the benefits of this paragraph
11A to any Transferee which shall have made the same agreement as you have
made in this paragraph 11A.
11B. Expenses. The Company agrees, whether or not the
transactions contemplated hereby shall be consummated, to pay, and save you
and any Transferee harmless against liability for the payment of, all
out-of-pocket expenses arising in connection with such transactions,
including (i) all document production and duplication charges and the fees
and expenses of any special counsel engaged by you or such Transferee in
connection with this Agreement or the Inducement Letter, the transactions
contemplated hereby and any subsequent proposed modification of, or
proposed consent under, this Agreement, whether or not such proposed
modification shall be effected or proposed consent granted, provided that
the amount payable with respect to the fees, charges and disbursements of
your special counsel in connection with the preparation, execution and
delivery of this Agreement and the Inducement Letter shall not exceed
$50,000 and (ii) the costs and expenses, including attorneys' fees,
incurred by you or such Transferee in enforcing (or determining whether or
how to enforce) any rights under this Agreement, the Inducement Letter or
the Notes or in responding to any subpoena or other legal process or
informal investigative demand issued in connection with this Agreement or
the transactions contemplated hereby or by reason of your or such
Transferee's having acquired any Note, including without limitation costs
and expenses incurred in any bankruptcy case. The obligations of the
Company under this paragraph 11B shall survive the transfer of any Note or
portion thereof or interest therein by you or any Transferee and the
payment of any Note.
11C. Consent to Amendments. This Agreement may be amended, and
the Company may take any action herein prohibited, or omit to perform any
act herein required to be performed by it, if the Company shall obtain the
written consent to such amendment, action or omission to act, of the
Required Holder(s) except that, without the written consent of the holder
or holders of all Notes at the time outstanding, no amendment to this
Agreement shall change the maturity of any Note, or change the principal
of, or the rate or time of payment of interest on or any Yield-Maintenance
Amount payable with respect to any Note, or affect the time, amount or
allocation of any prepayments, or change the proportion of the principal
amount of the Notes required with respect to any consent, amendment, waiver
or declaration. Each holder of any Note at the time or thereafter
outstanding shall be bound by any consent authorized by this paragraph 11C,
whether or not such Note shall have been marked to indicate such consent,
but any Notes issued thereafter may bear a notation referring to any such
consent. No course of dealing between the Company and the holder of any
Note nor any delay in exercising any rights hereunder or under any Note
shall operate as a waiver of any rights of any holder of such Note. As
used herein and in the Notes, the term "this Agreement" and references
thereto shall mean this Agreement as it may from time to time be amended or
supplemented.
11D. Form, Registration, Transfer and Exchange of Notes; Lost
Notes. The Notes are issuable as registered notes without coupons in
denominations of at least $100,000, except as may be necessary to reflect
any principal amount not evenly divisible by $100,000. The Company shall
keep at its principal office a register in which the Company shall provide
for the registration of Notes and of transfers of Notes. Upon surrender
for registration of transfer of any Note at the principal office of the
Company, the Company shall, at its expense, execute and deliver one or more
new Notes of like tenor and of a like aggregate principal amount,
registered in the name of such transferee or transferees. At the option of
the holder of any Note, such Note may be exchanged for other Notes of like
tenor and of any authorized denominations, of a like aggregate principal
amount, upon surrender of the Note to be exchanged at the principal office
of the Company. Whenever any Notes are so surrendered for exchange, the
Company shall, at its expense, execute and deliver the Notes which the
holder making the exchange is entitled to receive. Every Note surrendered
for registration of transfer or exchange shall be duly endorsed, or be
accompanied by a written instrument of transfer duly executed, by the
holder of such Note or such holder's attorney duly authorized in writing.
Any Note or Notes issued in exchange for any Note or upon transfer thereof
shall carry the rights to unpaid interest and interest to accrue which were
carried by the Note so exchanged or transferred, so that neither gain nor
loss of interest shall result from any such transfer or exchange. Upon
receipt of written notice from the holder of any Note of the loss, theft,
destruction or mutilation of such Note and, in the case of any such loss,
theft or destruction, upon receipt of such holder's unsecured indemnity
agreement, or in the case of any such mutilation upon surrender and
cancellation of such Note, the Company will make and deliver a new Note, of
like tenor, in lieu of the lost, stolen, destroyed or mutilated Note.
11E. Persons Deemed Owners; Participations. Prior to due
presentment for registration of transfer, the Company may treat the Person
in whose name any Note is registered as the owner and holder of such Note
for the purpose of receiving payment of principal of, interest on and any
Yield-Maintenance Amount payable with respect to such Note and for all
other purposes whatsoever, whether or not such Note shall be overdue, and
the Company shall not be affected by notice to the contrary. Subject to
the preceding sentence, the holder of any Note may from time to time grant
participations in such Note to any Person on such terms and conditions as
may be determined by such holder in its sole and absolute discretion,
provided that any such participation shall be in a principal amount of at
least $100,000.
11F. Survival of Representations and Warranties; Entire
Agreement. All representations and warranties contained herein or made in
writing by or on behalf of the Company in connection herewith shall survive
the execution and delivery of this Agreement and the Notes, the transfer by
you of any Note or portion thereof or interest therein and the payment of
any Note, and may be relied upon by any Transferee, regardless of any
investigation made at any time by or on behalf of you or any Transferee.
Subject to the preceding sentence, this Agreement and the Notes embody the
entire agreement and understanding between you and the Company and
supersede all prior agreements and understandings relating to the subject
matter hereof.
11G. Successors and Assigns. All covenants and other agreements
in this Agreement contained by or on behalf of either of the parties hereto
shall bind and inure to the benefit of the respective successors and
assigns of the parties hereto (including, without limitation, any
Transferee) whether so expressed or not.
11H. Disclosure to Other Persons. The Company acknowledges that
the holder of any Note may deliver copies of any financial statements and
other documents delivered to such holder, and disclose any other
information disclosed to such holder, by or on behalf of the Company or any
Subsidiary in connection with or pursuant to this Agreement to (i) such
holder's directors, officers, employees, agents and professional
consultants, (ii) any other holder of any Note, (iii) any Person to which
such holder offers to sell such Note or any part thereof, (iv) any Person
to which such holder sells or offers to sell a participation in all or any
part of such Note, (v) any Person from which such holder offers to purchase
any security of the Company, (vi) any federal or state regulatory authority
having jurisdiction over such holder, (vii) the National Association of
Insurance Commissioners or any similar organization or (viii) any other
Person to which such delivery or disclosure may be necessary or appropriate
(a) in compliance with any law, rule, regulation or order applicable to
such holder, (b) in response to any subpoena or other legal process or
informal investigative demand or (c) in connection with any litigation to
which such holder is a party.
11I. Notices. All written communications provided for hereunder
shall be sent by first class mail or nationwide overnight delivery service
(with charges prepaid) and (i) if to you, addressed to you at the address
specified for such communications in the Purchaser Schedule attached
hereto, or at such other address as you shall have specified to the Company
in writing, (ii) if to any other holder of any Note, addressed to such
other holder at such address as such other holder shall have specified to
the Company in writing or, if any such other holder shall not have so
specified an address to the Company, then addressed to such other holder in
care of the last holder of such Note which shall have so specified an
address to the Company, and (iii) if to the Company, addressed to it at 107
Selden Street, Berlin, Connecticut 06037, Attention: Treasurer, or at
such other address as the Company shall have specified to the holder of
each Note in writing.
11J. Payments Due on Non-Business Days. Anything in this
Agreement or the Notes to the contrary notwithstanding, any payment of
principal of or interest on any Note that is due on a date other than a
Business Day shall be made on the next succeeding Business Day. If the
date for any payment is extended to the next succeeding Business Day by
reason of the preceding sentence, the period of such extension shall be
included in the computation of the interest payable on such Business Day.
11K. Satisfaction Requirement. If any agreement, certificate or
other writing, or any action taken or to be taken, is by the terms of this
Agreement required to be satisfactory to you or to the Required Holder(s),
the determination of such satisfaction shall be made by you or the Required
Holder(s), as the case may be, in the sole and exclusive judgment
(exercised in good faith) of the Person or Persons making such
determination.
11L. Governing Law. This Agreement shall be construed and
enforced in accordance with, and the rights of the parties shall be
governed by, the laws of the State of Connecticut.
11M. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
11N. Descriptive Headings. The descriptive headings of the
several paragraphs of this Agreement are inserted for convenience only and
do not constitute a part of this Agreement.
11O. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be an original but all of which
together shall constitute one instrument.
If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterpart of this letter and return the same
to the Company, whereupon this letter shall become a binding agreement
between the Company and you.
Very truly yours,
NORTHEAST NUCLEAR ENERGY COMPANY
By: /s/John B. Keane
Title: Vice President
and Treasurer
The foregoing Agreement is
hereby accepted as of the
date first above written.
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By: /s/Lisa M. Ferraro
Vice President
PURCHASER SCHEDULE
Aggregate
Principal
Amount of
Notes to be Note Denom-
Purchased ination(s)
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA $25,000,000 $25,000,000
(1) All payments on account of Notes held by such purchaser shall be made
by wire transfer of immediately available funds for credit to:
Account No. 050-54-526
Morgan Guaranty Trust Company
of New York
23 Wall Street
New York, New York 10015
(ABA No.: 021-000-238)
Each such wire transfer shall set
forth the name of the Company, a
reference to "7.17% Senior Notes due
August 31, 2019, Security No.
66435*\D0", and the due date and
application (as among principal,
interest, Yield-Maintenance Amount,
delayed delivery fees, cancellation
fee and commitment fee) of the payment
being made.
(2) Address for all notices relating to payments:
The Prudential Insurance Company
of America
c/o Prudential Capital Corporation
Three Gateway Center
100 Mulberry Street
Newark, New Jersey 07102-4077
Attention: Investment Administration
Unit
(3) Address for all other communications and notices:
The Prudential Insurance Company
of America
c/o Prudential Power Funding
Associates
Four Gateway Center
100 Mulberry Street
Newark, New Jersey 07102-4069
Attention: Lisa Ferraro
(4) Recipient of telephonic prepayment notices:
Manager, Asset Management Unit
(201) 802-3288
(5) Tax Identification No.: 22-1211670
EXHIBIT A
FORM OF NOTE
NORTHEAST NUCLEAR ENERGY COMPANY
7.17% SENIOR NOTE DUE AUGUST 31, 2019
No. _____ [Date]
$________
FOR VALUE RECEIVED, the undersigned, Northeast Nuclear Energy Company
(herein called the "Company"), a corporation organized and existing under
the laws of the State of Connecticut, hereby promises to pay to THE
PRUDENTIAL INSURANCE COMPANY OF AMERICA, or registered assigns, the
principal sum of _________________________ DOLLARS on August 31, 2019, with
interest (computed on the basis of actual days outstanding and a 360-day
year) (a) on the unpaid balance thereof at the rate per annum determined in
accordance with paragraph 1B of the Note Agreement referred to below from
the date hereof, payable on the last day of each month, commencing December
31, 1993, until the principal hereof shall have become due and payable, and
(b) on any overdue payment (including any overdue prepayment) of principal,
any overdue payment of interest and any overdue payment of any
Yield-Maintenance Amount (as defined in the Note Agreement referred to
below), payable monthly as aforesaid (or, at the option of the registered
holder hereof, on demand), at a rate per annum from time to time equal to
the greater of (i) 2% in excess of the rate specified in clause (a) above
or (ii) 2.0% over the rate of interest publicly announced by Morgan
Guaranty Trust Company of New York from time to time in New York City as
its Prime Rate.
Payments of principal of, interest on and any Yield-Maintenance Amount
payable with respect to this Note are to be made at the main office of
Morgan Guaranty Trust Company of New York in New York City or at such other
place as the holder hereof shall designate to the Company in writing, in
lawful money of the United States of America.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to a Note Agreement, dated as of December 21, 1993
(herein called the "Agreement"), between the Company and The Prudential
Insurance Company of America and is entitled to the benefits thereof.
This Note is a registered Note and, as provided in the Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the
registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name
this Note is registered as the owner hereof for the purpose of receiving
payment and for all other purposes, and the Company shall not be affected
by any notice to the contrary.
The Company agrees to make required prepayments of principal on the
dates and in the amounts specified in the Agreement. This Note is also
subject to optional prepayment, in whole or from time to time in part, on
the terms specified in the Agreement.
In case an Event of Default, as defined in the Agreement, shall occur
and be continuing, the principal of this Note may be declared or otherwise
become due and payable in the manner and with the effect provided in the
Agreement.
This Note is intended to be performed in the State of Connecticut and
shall be construed and enforced in accordance with the law of such State.
NORTHEAST NUCLEAR ENERGY COMPANY
By:
Treasurer
EXHIBIT B
FORM OF OPINION OF COMPANY'S SPECIAL COUNSEL
Letterhead of Day, Berry & Howard
[Date of Funding]
The Prudential Insurance Company of America
c/o Prudential Power Funding Associates
Four Gateway Center
100 Mulberry Street
Newark, New Jersey 07102
Ladies and Gentlemen:
We have acted as special counsel for Northeast Nuclear Energy Company
(the "Company") in connection with the Note Agreement, dated as of December
21, 1993, between the Company and you (the "Note Agreement"), pursuant to
which the Company has issued to you today the 7.17% Senior Notes due August
31, 2019 of the Company in the aggregate principal amount of $25,000,000.
All terms used herein that are defined in the Note Agreement have the
respective meanings specified in the Note Agreement. This letter is being
delivered to you in satisfaction of the condition set forth in paragraph 3B
of the Note Agreement and with the understanding that you are purchasing
the Notes in reliance on the opinions expressed herein.
In this connection, we have examined such certificates of public
officials, certificates of officers of the Company and copies certified to
our satisfaction of corporate documents and records of the Company and of
other papers, and have made such other investigations, as we have deemed
relevant and necessary as a basis for our opinion hereinafter set forth.
We have relied upon such certificates of public officials and of officers
of the Company with respect to the accuracy of material factual matters
contained therein which were not independently established. With respect
to the opinion expressed in paragraph 3 below, we have also relied upon the
representation made by each of you in paragraph 9A of the Note Agreement.
Based on the foregoing, it is our opinion that:
1. The Company is a corporation duly organized and validly
existing in good standing under the laws of the State of Connecticut.
2. The Note Agreement, the Notes and the Millstone Plant
Agreement have been duly authorized by all requisite corporate action and
duly executed and delivered by authorized officers of the Company, and are
valid obligations of the Company, legally binding upon and enforceable
against the Company in accordance with their respective terms, except as
such enforceability may be limited by (a) bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of
creditors' rights generally and (b) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
3. It is not necessary in connection with the offering,
issuance, sale and delivery of the Notes under the circumstances
contemplated by the Note Agreement to register the Notes under the
Securities Act or to qualify an indenture in respect of the Notes under the
Trust Indenture Act of 1939, as amended.
4. The extension, arranging and obtaining of the credit
represented by the Notes do not result in any violation of Regulation G, T
or X of the Board of Governors of the Federal Reserve System.
5. The execution and delivery by the Company of the Note
Agreement, the Notes and the Millstone Plant Agreement, the offering,
issuance and sale of the Notes and fulfillment of and compliance by the
Company with the respective provisions of the Note Agreement, the Notes and
the Millstone Plant Agreement do not conflict with, or result in a breach
of the terms, conditions or provisions of, or constitute a default under,
or result in any violation of, or result in the creation of any Lien upon
any of the properties or assets of the Company pursuant to, or require any
authorization, consent, approval, exemption or other action by or notice to
or filing with any court, administrative or governmental body or other
Person (other than the orders of the Securities and Exchange Commission and
the Connecticut Department of Public Utility Control referred to in
paragraphs 6 through 9 below and other than routine filings after the date
hereof with the Securities and Exchange Commission and/or state Blue Sky
authorities) pursuant to, the charter or by-laws of the Company, any
applicable law (including any securities or Blue Sky law), statute, rule or
regulation (including, without limitation, the Public Utility Holding
Company Act of 1935 and any rule or regulation thereunder) or (insofar as
is known to us after having made due inquiry with respect thereto) any
agreement (including, without limitation, any agreement listed in Exhibit C
to the Note Agreement), instrument, order, judgment or decree to which the
Company is a party or otherwise subject.
6. The Connecticut Department of Public Utility Control has
duly issued an order dated December 1, 1993 approving the execution,
delivery and performance by the Company of the Note Agreement and the Notes
and the offering, issuance and sale of the Notes; to our knowledge after
due inquiry, such order is in full force and effect and has not been stayed
or suspended and no petition for rehearing, stay or suspension or appeal of
such order has been filed; and no further authorization, consent, approval,
exemption, or other action by or notice to or filing with the Connecticut
Department of Public Utility Control is required for the execution,
delivery or performance by the Company of the Note Agreement or the Notes
or the offering, issuance or sale of the Notes. The validity, legality and
enforceability of the Notes will not be affected if such order is stayed,
suspended, vacated, modified or otherwise held to be wholly or partly
invalid after the date hereof.
7. The Connecticut Department of Public Utility Control has
duly issued an order dated September 17, 1985 approving the execution,
delivery and performance by the Company of the Millstone Plant Agreement;
such order is final, in full force and effect and has not been stayed or
suspended, and the time for petition for rehearing, stay or suspension or
appeal of such order has expired without any such petition having been
filed or appeal having been taken; and no further authorization, consent,
approval, exemption, or other action by or notice to or filing with the
Connecticut Department of Public Utility Control is required for the
execution, delivery or performance by the Company of the Millstone Plant
Agreement.
8. The Securities and Exchange Commission has duly issued an
order dated December 16, 1993 under the Public Utility Holding Company Act
of 1935, as amended, approving the execution, delivery and performance by
the Company of the Note Agreement, the Notes and the offering and issuance
and sale of the Notes; to our knowledge after due inquiry, such order is in
full force and effect and has not been stayed or suspended and no petition
for rehearing, stay or suspension or appeal of such order has been filed;
and no further authorization, consent, approval, exemption, or other action
by or notice to or filing with the Securities and Exchange Commission under
such Act is required for the execution, delivery or performance by the
Company of the Note Agreement or the Notes or the offering, issuance or
sale of the Notes. The validity, legality and enforceability of the Notes
will not be affected if such order is stayed, suspended, vacated, modified
or otherwise held to be wholly or partly invalid after the date hereof
unless you have actual knowledge that the issuance and sale of the Notes is
in violation of the Public Utility Holding Company Act of 1935 or any rule
or regulation thereunder.
9. The Securities and Exchange Commission has duly issued an
order dated September 24, 1985 under the Public Utility Holding Company Act
of 1935, as amended, approving the execution, delivery and performance by
the Company of the Millstone Plant Agreement; such order is final, in full
force and effect and has not been stayed or suspended and the time for
petition for rehearing, stay or suspension or appeal of such orders has
expired without any such petition having been filed or appeal having been
taken; and no further authorization, consent, approval, exemption, or other
action by or notice to or filing with the Securities and Exchange
Commission under such Act is required for the execution, delivery or
performance by the Company of the Millstone Plant Agreement.
10. All amounts that may become due to you or any holder of any
Note under the Note Agreement or any Note, including, without limitation,
the principal of, interest on and Yield Maintenance Amount, if any, with
respect to the Notes and any amounts due under paragraph 11B of the Note
Agreement, are "expenses" which CL&P and WMECO are obligated to pay to the
Company under clause (i) of Subsection 3(b) of the Millstone Plant
Agreement in accordance with their respective Allocable Shares (as defined
in the Millstone Plant Agreement).
11. The Company validly holds all certificates, franchises,
licenses, permits and authorizations from governmental bodies or regulatory
authorities, including, without limitation, the Connecticut Public Utility
Control Authority and the Securities Exchange Commission under the Public
Utility Holding Company Act of 1935, as amended, free from unduly
burdensome restrictions or conditions of an unusual character, that are
necessary in any material respect for the ownership, maintenance and
operation of its properties and assets or for the conduct of its business
and, insofar as is known to us after having made due inquiry with respect
thereto, the Company is not in violation of any material term or provision
thereof in any respect which may materially adversely affect the condition
(financial or otherwise), operation, properties, assets or prospects of the
Company.
The opinions expressed above are limited to the laws of the State
of Connecticut, the Commonwealth of Massachusetts and the federal laws of
the United States.
Very truly yours,
EXHIBIT C
FORM OF OPINION OF CL&P'S SPECIAL COUNSEL
Letterhead of Day, Berry & Howard
[Date of Funding]
The Prudential Insurance Company of America
c/o Prudential Power Funding Associates
Four Gateway Center
100 Mulberry Street
Newark, New Jersey 07102
Ladies and Gentlemen:
We have acted as counsel for The Connecticut Light and Power Company
("CL&P") in connection with the letter agreement (the "Inducement Letter"),
dated as of the date hereof, from CL&P and Western Massachusetts Electric
Company ("WMECO") to you relating to the obligations of CL&P and WMECO
under the Amended and Restated Millstone Plant Agreement, dated as of
December 1, 1984, among Northeast Nuclear Energy Company (the "Company"),
CL&P and WMECO, as such obligations relate to the Note Agreement, dated as
of December 21, 1993, between the Company and you (the "Note Agreement"),
pursuant to which the Company has issued to you today the 7.17% Senior
Notes due August 31, 2019 of the Company in the aggregate principal amount
of $25,000,000. All terms used herein that are defined in the Note
Agreement have the respective meanings specified in the Note Agreement.
This letter is being delivered to you in satisfaction of the condition set
forth in paragraph 3C of the Note Agreement and with the understanding that
you are purchasing the Notes in reliance on the opinions expressed herein.
In this connection, we have examined such certificates of public
officials, certificates of officers of CL&P and copies certified to our
satisfaction of corporate documents and records of CL&P and of other
papers, and have made such other investigations, as we have deemed relevant
and necessary as a basis for our opinion hereinafter set forth. We have
relied upon such certificates of public officials and of officers of CL&P
with respect to the accuracy of material factual matters contained therein
which were not independently established.
Based on the foregoing, it is our opinion that:
1. CL&P is a corporation duly organized and validly existing in
good standing under the laws of the State of Connecticut.
2. The Inducement Letter and the Millstone Plant Agreement have
been duly authorized by all requisite corporate action and duly executed
and delivered by authorized officers of CL&P, and are valid obligations of
CL&P, legally binding upon and enforceable against CL&P in accordance with
their respective terms, except as such enforceability may be limited by (a)
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and (b) general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
3. The execution and delivery by CL&P of the Inducement Letter
and the Millstone Plant Agreement, and fulfillment of and compliance by
CL&P with the respective provisions of the Inducement Letter and the
Millstone Plant Agreement do not conflict with, or result in a breach of
the terms, conditions or provisions of, or constitute a default under, or
result in any violation of, or result in the creation of any Lien upon any
of the properties or assets of CL&P pursuant to, or require any
authorization, consent, approval, exemption or other action by or notice to
or filing with any court, administrative or governmental body or other
Person (other than the orders of the Connecticut Department of Public
Utility Control and the Securities and Exchange Commission referred to in
paragraphs 4 and 5 below and other than routine filings after the date
hereof with the Securities and Exchange Commission and/or state Blue Sky
authorities) pursuant to, the charter or by-laws of CL&P, any applicable
law (including any securities or Blue Sky law), statute, rule or regulation
or (insofar as is known to us after having made due inquiry with respect
thereto) any agreement, instrument, order, judgment or decree to which
WMECO is a party or otherwise subject.
4. The Connecticut Department of Public Utility Control has
duly issued an order dated September 17, 1985 approving the execution,
delivery and performance by CL&P of the Millstone Plant Agreement; such
order is final, in full force and effect and has not been stayed or
suspended, and the time for petition for rehearing, stay or suspension or
appeal of such order has expired without any such petition having been
filed or appeal having been taken; and no further authorization, consent,
approval, exemption, or other action by or notice to or filing with the
Connecticut Department of Public Utility Control is required for the
execution, delivery or performance by CL&P of the Inducement Letter or the
Millstone Plant Agreement.
5. The Securities and Exchange Commission has duly issued an
order dated September 24, 1985 under the Public Utility Holding Company Act
of 1935, as amended, approving the execution, delivery and performance by
CL&P of the Millstone Plant Agreement; such order is final, in full force
and effect and has not been stayed or suspended and the time for petition
for rehearing, stay or suspension or appeal of such order has expired
without any such petition having been filed or appeal having been taken;
and no further authorization, consent, approval, exemption, or other action
by or notice to or filing with the Securities and Exchange Commission under
such Act is required for the execution, delivery or performance by CL&P of
the Inducement Letter or the Millstone Plant Agreement.
6. All amounts that may become due to you or any holder of any
Note under the Note Agreement or any Note, including, without limitation,
the principal of, interest on and Yield Maintenance Amount, if any, with
respect to the Notes and any amounts due under paragraph 11B of the Note
Agreement, are "expenses" which CL&P is obligated to pay to the Company
under clause (i) of Subsection 3(b) of the Millstone Plant Agreement in
accordance with its respective Allocable Share (as defined in the Millstone
Plant Agreement).
7. CL&P validly holds all certificates, franchises, licenses,
permits and authorizations from governmental bodies or regulatory
authorities, including, without limitation, the Connecticut Department of
Public Utility Control and the Securities Exchange Commission under the
Public Utility Holding Company Act of 1935, as amended, free from unduly
burdensome restrictions or conditions of an unusual character, that are
necessary in any material respect for the ownership, maintenance and
operation of its properties and assets or for the conduct of its business
and, insofar as is known to us after having made due inquiry with respect
thereto, CL&P is not in violation of any material term or provision thereof
in any respect which may materially adversely affect the condition
(financial or otherwise), operation, properties, assets or prospects of
CL&P.
The opinions expressed above are limited to the laws of the State
of Connecticut, the Commonwealth of Massachusetts and the federal laws of
the United States.
Very truly yours,
EXHIBIT D
FORM OF OPINION OF WMECO'S SPECIAL COUNSEL
Letterhead of Day, Berry & Howard
[Date of Funding]
The Prudential Insurance Company of America
c/o Prudential Power Funding Associates
Four Gateway Center
100 Mulberry Street
Newark, New Jersey 07102
Ladies and Gentlemen:
We have acted as counsel for Western Massachusetts Electric Company
("WMECO") in connection with the letter agreement (the "Inducement
Letter"), dated as of the date hereof, from The Connecticut Light and Power
Company ("CL&P") and WMECO to you relating to the obligations of CL&P and
WMECO under the Amended and Restated Millstone Plant Agreement, dated as of
December 1, 1984, among Northeast Nuclear Energy Company (the "Company"),
CL&P and WMECO, as such obligations relate to the Note Agreement, dated as
of December 21, 1993, between the Company and you (the "Note Agreement"),
pursuant to which the Company has issued to you today the 7.17% Senior
Notes due August 31, 2019 of the Company in the aggregate principal amount
of $25,000,000. All terms used herein that are defined in the Note
Agreement have the respective meanings specified in the Note Agreement.
This letter is being delivered to you in satisfaction of the condition set
forth in paragraph 3D of the Note Agreement and with the understanding that
you are purchasing the Notes in reliance on the opinions expressed herein.
In this connection, we have examined such certificates of public
officials, certificates of officers of WMECO and copies certified to our
satisfaction of corporate documents and records of WMECO and of other
papers, and have made such other investigations, as we have deemed relevant
and necessary as a basis for our opinion hereinafter set forth. We have
relied upon such certificates of public officials and of officers of WMECO
with respect to the accuracy of material factual matters contained therein
which were not independently established.
Based on the foregoing, it is our opinion that:
1. WMECO is a corporation duly organized and validly existing
in good standing under the laws of the Commonwealth of Massachusetts.
2. The Inducement Letter and the Millstone Plant Agreement have
been duly authorized by all requisite corporate action and duly executed
and delivered by authorized officers of WMECO, and are valid obligations of
WMECO, legally binding upon and enforceable against WMECO in accordance
with their respective terms, except as such enforceability may be limited
by (a) bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and (b) general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
3. The execution and delivery by WMECO of the Inducement Letter
and the Millstone Plant Agreement, and fulfillment of and compliance by
WMECO with the respective provisions of the Inducement Letter and the
Millstone Plant Agreement do not conflict with, or result in a breach of
the terms, conditions or provisions of, or constitute a default under, or
result in any violation of, or result in the creation of any Lien upon any
of the properties or assets of WMECO pursuant to, or require any
authorization, consent, approval, exemption or other action by or notice to
or filing with any court, administrative or governmental body or other
Person (other than the order of the Securities and Exchange Commission
referred to in paragraph 4 below and other than routine filings after the
date hereof with the Securities and Exchange Commission and/or state Blue
Sky authorities) pursuant to, the charter or by-laws of WMECO, any
applicable law (including any securities or Blue Sky law), statute, rule or
regulation or (insofar as is known to us after having made due inquiry with
respect thereto) any agreement, instrument, order, judgment or decree to
which CL&P is a party or otherwise subject.
4. The Securities and Exchange Commission has duly issued an
order dated September 24, 1985 under the Public Utility Holding Company Act
of 1935, as amended, approving the execution, delivery and performance by
WMECO of the Millstone Plant Agreement; such order is final, in full force
and effect and has not been stayed or suspended and the time for petition
for rehearing, stay or suspension or appeal of such order has expired
without any such petition having been filed or appeal having been taken;
and no further authorization, consent, approval, exemption, or other action
by or notice to or filing with the Securities and Exchange Commission under
such Act is required for the execution, delivery or performance by WMECO of
the Inducement Letter or the Millstone Plant Agreement.
5. All amounts that may become due to you or any holder of any
Note under the Note Agreement or any Note, including, without limitation,
the principal of, interest on and Yield Maintenance Amount, if any, with
respect to the Notes and any amounts due under paragraph 11B of the Note
Agreement, are "expenses" which WMECO is obligated to pay to the Company
under clause (i) of Subsection 3(b) of the Millstone Plant Agreement in
accordance with its respective Allocable Share (as defined in the Millstone
Plant Agreement).
6. WMECO validly holds all certificates, franchises, licenses,
permits and authorizations from governmental bodies or regulatory
authorities, including, without limitation, the Massachusetts Department of
Public Utilities and the Securities Exchange Commission under the Public
Utility Holding Company Act of 1935, as amended, free from unduly
burdensome restrictions or conditions of an unusual character, that are
necessary in any material respect for the ownership, maintenance and
operation of its properties and assets or for the conduct of its business
and, insofar as is known to us after having made due inquiry with respect
thereto, WMECO is not in violation of any material term or provision
thereof in any respect which may materially adversely affect the condition
(financial or otherwise) operation, properties, assets or prospects of
WMECO.
The opinions expressed above are limited to the laws of the State
of Connecticut, the Commonwealth of Massachusetts and the federal laws of
the United States.
Very truly yours,
EXHIBIT E
Form of Inducement Letter
[Funding Date]
The Prudential Insurance Company
of America
c/o Prudential Power Funding Associates
Four Gateway Center
100 Mulberry Street
Newark, New Jersey 07102
Ladies and Gentlemen:
Reference is made to the Note Agreement dated as of December 21,
1993 (the "Note Agreement") between you and Northeast Nuclear Energy
Company (the "Company") providing for the issuance and sale by the Company
to you of the 7.17% Senior Notes due August 31, 2019 of the Company in the
aggregate principal amount of $25,000,000 (the "Notes"). Terms not
otherwise defined herein are used herein as defined in the Note Agreement.
The undersigned hereby certifies that attached hereto as Exhibit
A is a true and complete copy of the Amended and Restated Millstone Plant
Agreement dated as of December 1, 1984, by and among the Company, The
Connecticut Light and Power Company and Western Massachusetts Electric
Company (the "Millstone Plant Agreement"), together with all supplements
and amendments thereto.
To induce you to purchase the Notes pursuant to the Note
Agreement, and in satisfaction of one of the conditions precedent to your
obligation to purchase the Notes pursuant to the Note Agreement, the
undersigned:
(a) represent to you that all amounts due you or any holder of
any Note under the Note Agreement or any Note, including, without
limitation, the principal of, interest on and Yield Maintenance Amount, if
any, with respect to the Notes and any amounts due under paragraph 11B of
the Note Agreement, are "expenses" which the undersigned are obligated to
pay as provided in clause (i) of Subsection 3(b) of the Millstone Plant
Agreement in accordance with their respective Allocable Shares (as defined
in the Millstone Plant Agreement);
(b) covenant with you and any holder of any Note as follows:
(1) The undersigned will perform all of their obligations to the
Company under the Millstone Plant Agreement. So long as any Notes are
outstanding or the Company has any obligations to you or the holders of the
Notes under the Note Agreement or the Notes, the obligations of the
undersigned under clause (i) of Subsection 3(b) of the Millstone Plant
Agreement shall be absolute and unconditional and shall not be affected by
any circumstances, including, without limitation, any setoff, counterclaim,
recoupment, defense or other right which either of the undersigned may have
against the Company or anyone else (including, without limitation, the
other party to this letter agreement) for any reason whatsoever or any
failure or claimed failure of the Company to perform any obligation under
the Millstone Plant Agreement.
(2) The undersigned will not during the term of the Millstone
Plant Agreement terminate the Millstone Plant Agreement or, without the
written consent of the Required Holder(s), amend, supplement or modify any
provision of the Millstone Plant Agreement so as to adversely effect the
rights of the Company under Section 3(b) thereof. The undersigned will
make payment of any amount which the undersigned are obligated to pay to
the Company or any successor thereto or permitted assignee thereof pursuant
to clause (i) of subsection 3(b) of the Millstone Plant Agreement with
respect to any amounts due to you or any holder of any Note under the Note
Agreement or any Note notwithstanding any termination of the Millstone
Plant Agreement in accordance with its terms.
(3) You and any other holder of any Note shall constitute
third-party beneficiaries of, and shall be entitled to enforce directly
against the undersigned, the obligations of the undersigned under clause
(i) of Subsection 3(b) of the Millstone Plant Agreement with respect to any
amounts due to you or such holder under the Note Agreement or any Note.
(4) Each of the undersigned will deliver to each Significant
Holder in quadruplicate:
(i) as soon as practicable and in any event within 60 days
after the end of each quarterly period (other than the last quarterly
period) in each fiscal year, consolidated statements of income,
stockholders' equity and cash flows of the undersigned and its subsidiaries
for the period from the beginning of the current fiscal year to the end of
such quarterly period, and a consolidated balance sheet of the undersigned
and its subsidiaries as at the end of such quarterly period, setting forth
in each case in comparative form figures for the corresponding period in
the preceding fiscal year, all in reasonable detail and satisfactory in
form to the Required Holder(s) and certified by an authorized financial
officer of the undersigned, subject to changes resulting from year-end
adjustments; provided, however, that delivery pursuant to clause (iii)
below of copies of the Quarterly Report on Form 10-Q of the undersigned for
such quarterly period, together with any exhibits thereto containing the
financial statements of the undersigned and its subsidiaries, filed with
the Securities and Exchange Commission shall be deemed to satisfy the
requirements of this clause (i);
(ii) as soon as practicable and in any event within 135 days
after the end of each fiscal year, consolidating and consolidated
statements of income and cash flows and a consolidated statement of
stockholders' equity of the undersigned and its subsidiaries for such year,
and a consolidated balance sheet of the undersigned and its subsidiaries as
at the end of such year, setting forth in each case in comparative form
corresponding consolidated figures from the preceding annual audit;
provided, however, that delivery pursuant to clause (iii) below of copies
of the Annual Report on Form 10-K of the undersigned for such fiscal year
filed with the Securities and Exchange Commission, together with any
exhibits thereto containing the financial statements of the undersigned and
its subsidiaries, shall be deemed to satisfy the requirements of this
clause (ii);
(iii) promptly upon transmission thereof, copies of all such
financial statements, proxy statements, notices and reports as it shall
send to its public stockholders, if any, and copies of all registration
statements on Form S-1, S-2 or S-3 (without exhibits) and all reports on
Form 10-K, 10-Q or 8-K which it files with the Securities and Exchange
Commission (or any governmental body or agency succeeding to the functions
of the Securities and Exchange Commission); and
(iv) with reasonable promptness, such other financial data
as such Significant Holder may reasonably request.
Together with each delivery of financial statements required by
clauses (i) and (ii) above, each of the undersigned will deliver to each
Significant Holder an officer's certificate stating as to itself, and, to
its knowledge after due inquiry as to the Company, that there exists no
Event of Default or Default or failure by the undersigned to perform any
obligation under the Millstone Plant Agreement, or, if any Event of
Default, Default or such default exists, specifying the nature and period
of existence thereof and what action the undersigned proposes to take with
respect thereto; and
(c) represent and warrant as follows:
(1) Each of the undersigned is a corporation duly organized and
existing in good standing under the laws of the jurisdiction of its
organization and is qualified to do business in each state or other
jurisdiction in which the nature of its business makes such qualification
necessary.
(2) Each of the undersigned has the corporate power and
authority to execute and deliver this letter and the Millstone Plant
Agreement. The execution and delivery of this letter and the Millstone
Plant Agreement have been duly authorized by all requisite corporate action
on behalf of the undersigned. This letter and the Millstone Plant
Agreement have been duly executed and delivered by authorized officers of
the undersigned and are valid obligations of the undersigned, legally
binding upon and enforceable against the undersigned in accordance with
their respective terms.
(3) Neither the execution and delivery by them of this letter
and the Millstone Plant Agreement nor the performance or observance by them
of the terms, conditions or provisions hereof or thereof (i) does or will
conflict with or violate any existing law or governmental rule, regulation
or order or any existing judicial or administrative order or decree binding
on them or any of their properties; (ii) does or will conflict with or
violate their amended certificate of incorporation or articles of
organization, as the case may be, or bylaws as in effect on the date
hereof, or (iii) does or will require, under any existing law or
governmental rule, regulation, or order or any existing judicial or
administrative order or decree, on the part of them or Northeast Utilities
or any other subsidiary of Northeast Utilities, the consent or approval of,
the giving of notice to, the registration with or the taking of any other
action in respect of, any governmental or public authority or agency,
except as has been obtained or made and is in full force and effect; and
(d) Authorize and direct Day, Berry & Howard, special counsel to
each of the undersigned, to render to you the opinions referred to in
paragraph 3C and 3D of the Note Agreement.
Very truly yours,
THE CONNECTICUT LIGHT AND
POWER COMPANY
By:
Title:
WESTERN MASSACHUSETTS ELECTRIC
COMPANY
By:
Title:
SCHEDULE 4A(1)
AMORTIZATION SCHEDULE
(See Attached)
SCHEDULE 6A(1)(v)
EXISTING LIENS
None.
SCHEDULE 6A(2)
DEBT
$14,000,000 aggregate principal amount owed to the Northeast
Utilities System Money Pool.
SCHEDULE 8H
LIST OF AGREEMENTS RESTRICTING DEBT
1. 364 Day Revolving Credit Agreement dated December 3, 1992 among CL&P,
WMECO, Northeast Utilities, Holyoke Water Power Company, the Company,
The Rocky River Realty Company, Shawmut Bank Connecticut as successor
to The Connecticut National Bank, and Northeast Utilities Service
Company, as Agent.
2. 364 Day Revolving Credit Agreement dated December 3, 1992 among CL&P,
WMECO, Northeast Utilities, Holyoke Water Power Company, the Company,
The Rocky River Realty Company, Fleet Bank, N.A., and Northeast
Utilities Service Company, as Agent.
3. 364 Day Revolving Credit Agreement dated December 3, 1992 among CL&P,
WMECO, Northeast Utilities, Holyoke Water Power Company, the Company,
The Rocky River Realty Company, State Street Bank and Trust Company,
and Northeast Utilities Service Company, as Agent.
4. Three Year Revolving Credit Agreement dated December 3, 1992 among
CL&P, WMECO, Northeast Utilities, Holyoke Water Power Company, the
Company, The Rocky River Realty Company, Shawmut Bank Connecticut as
successor to The Connecticut National Bank, and Northeast Utilities
Service Company, as Agent.
5. Three Year Revolving Credit Agreement dated December 3, 1992 among
CL&P, WMECO, Northeast Utilities, Holyoke Water Power Company, the
Company, The Rocky River Realty Company, Fleet Bank, N.A., and
Northeast Utilities Service Company, as Agent.
6. Three Year Revolving Credit Agreement dated December 3, 1992 among
CL&P, WMECO, Northeast Utilities, Holyoke Water Power Company, the
Company, The Rocky River Realty Company, State Street Bank and Trust
Company, and Northeast Utilities Service Company, as Agent.
SCHEDULE 10B(2)
MONEY POOL APPLICATION AND APPROVAL
(See Attached)
Exhibit 10.35.1
Amendment No. 1 to Supplemental Executive Retirement Plan For Officers
of Northeast Utilities System Companies
Section V(a) of the Supplemental Executive Retirement Plan for Officers of
Northeast Utilities System Companies is hereby amended, effective as of
August 1, 1993, to read in its entirety
as follows:
"(a) equals a lifetime benefit in an annual amount equal to 60
percent of the Participant's Final Average Compensation multiplied by the
ratio of the Participant's Credited Service at the date his or her Credited
Service ends to twenty-five years (such ratio not to exceed one), which
benefit shall be reduced, if payment of the Target Benefit shall commence
prior to the Participant's attainment of age 65, in accordance with the
factors set forth in the Retirement Plan applicable to retirement benefits
of employees retiring on an early retirement date, Credit Service and age
to be determined for purpose of this subsection (a) after taken into
account any additions to age and/or Credited Service pursuant to any
retirement incentive program."
Exhibit 10.35.2
AMENDMENT NO. 2 TO
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
FOR OFFICERS OF NORTHEAST UTILITIES SYSTEM COMPANIES
The Supplemental Executive Retirement Plan for Officers of Northeast
Utilities System Companies is hereby amended, effective as of January 1,
1994, as follows:
A. Article I is amended to read in its entirety as follows:
The purpose of this Supplemental Executive Retirement Plan for
Officers of Northeast Utilities System Companies (the "Plan") is to
provide certain executives with (i) the benefits that would have been
provided to them under the Northeast Utilities Service Company
Retirement Plan (the "Retirement Plan") if compensation and benefits
were not subject to the limitations imposed by Sections 401(a)(17) and
415 of the Code and if certain awards under the Northeast Utilities
Executive Incentive Compensation Program (the "EICP") and the
Northeast Utilities Executive Incentive Plan (the "Incentive Plan")
were included in the benefit calculations under the Retirement Plan,
and (ii) a supplemental retirement benefit in addition to the
retirement benefit provided under the Retirement Plan and the benefits
described in clause (i) above. Effective as of January 1, 1992, this
Plan amends and restates in its entirety the Supplemental Executive
Retirement Plan for Officers of Northeast Utilities System Companies
dated June 23, 1987; provided, however, that the provisions of this
Plan applicable to the Compensation Limit Benefit shall be effective
as of January 1, 1989. The Plan has been further amended on September
28, 1993, effective August 1, 1993, and on January 25, 1994, effective
January 1, 1994. The Plan is not intended to meet the qualification
requirements of Section 401 of the Code.
B. The definition of "Administrator" in Article II is amended to read in
its entirety as follows:
"Administrator" shall mean the plan administrator under the
Retirement Plan and, to the extent a trust is established in
accordance with Article XI, the trustee of such trust, their
respective duties to be subject to written agreement between such plan
administrator and such trustee.
C. Article XI is amended to read in its entirety as follows:
Benefits payable under this Plan shall be "unfunded," as that
term is used in Sections 201(2), 301(a)(3), 401(a)(1) and 4021(a)(6)
of the Employee Retirement Income Security Act of 1974, as amended,
with respect to unfunded plans maintained primarily for the purpose of
providing deferred compensation to a select group of management or
highly compensated employees, and the Administrator shall administer
this Plan in a manner that will ensure that benefits are unfunded and
that Participants will not be considered to have received a taxable
economic benefit prior to the time at which benefits are actually
payable hereunder. Accordingly, the Employer shall not be required to
segregate or earmark any of its assets for the benefit of Participants
or their spouses or other beneficiaries, and each such person shall
have only a contractual right against the Employer for benefits
hereunder. The Company may from time to time establish a trust and
deposit with the trustee thereof funds to be held in trust for the
payment of benefits hereunder; provided, that the use of such funds
for such purpose shall be subject to the claims of the Company's
general creditors as set forth in the agreement establishing any such
trust. The rights and interests of a Participant under this Plan
shall not be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge or encumbrance by a Participant or any
person claiming under or through a Participant, nor shall they be
subject to the debts, contracts, liabilities or torts of a Participant
or anyone else prior to payment. The Treasurer of the Company may
from time to time appoint an investment manager or managers for the
funds held in any such trust.
D. Section (b) of Article XIV is amended to read in its entirety as
follows:
(b) Benefits under this Plan shall, in the first instance, be
paid and satisfied by NUSCO, whether from a trust set up as provided
in Article XI or otherwise. If NUSCO shall be dissolved or for any
other reason shall fail to pay and satisfy such benefits, through such
trust or otherwise, each individual Employer shall pay and satisfy its
share of such benefits, such share to be the ratio of the
Participant's Compensation, as defined in this Plan, charged to such
Employer during the three calendar years immediately preceding the
year in which the Participant's employment as an NU system employee
terminates to the total of the Participant's Compensation charged to
all Employers during the same period.
Exhibit 10.36.1
January 15, 1992
Mellon Bank, N.A.
One Mellon Bank Center
Suite 3340
Pittsburgh, PA 15258
(Attention: Earl Kleckner)
Re: Northeast Utilities ESOP Loan
Gentlemen:
Reference is made to the Loan Agreement, dated as of December 2, 1991,
by and between Northeast Utilities and Mellon Bank, N.A. solely in its
capacity as trustee (the "Trustee") of the Northeast Utilities Service
Company Supplemental Retirement and Savings Plan ESOP Trust (the "Loan
Agreement"). Section 5 of the Loan Agreement provides that the Trustee has
pledged to Northeast Utilities, and granted Northeast Utilities a security
interest in, all Company Shares acquired pursuant to the Share Purchase
Agreement (as such terms are defined in the Loan Agreement), and provides
for the release of such shares form such pledge and security interest as
payments of interest and principal are made on the Loan (as defined in the
Loan Agreement).
However, the Northeast Utilities Service Company Supplemental
Retirement and Savings Plan (the "401(k) Plan"), consistent with the
Employee Retirement Income Security act of 1974, as amended, and the
Internal Revenue Code of 1986, as amended, and regulations thereunder,
contemplates that Company Shares might be allocated to 401(k) Plan
participants' accounts in accordance with the terms of the 401(k) Plan,
whether or not the Loan payment has yet been made, and that no allocated
Company Shares be subject to the pledge and security interest. Northeast
Utilities hereby waives its rights under Section 5 of the Loan agreement to
the extent necessary to effect this intent.
The Declaration of Trust of Northeast Utilities provides that no
shareholder of Northeast Utilities shall be held to any liability whatever
for the payment of any sum of money, or for damages or otherwise under any
contract, obligation or undertaking made, entered into or issued by the
trustees of Northeast Utilities or by an officer, agent or representative
elected or appointed by such trustees, and no such contract, obligation or
undertaking shall be enforceable against such trustees or any of them in
their or his or her individual capacities or capacity and all such
contracts, obligations and undertakings shall be enforceable only against
the trustees as such, and every person or entity, having any claim or
demand arising out of any such contract, obligation or undertaking shall
look only to the trust estate for the payment or satisfaction thereof.
Please sign and return one copy of this letter to indicate your
agreement with the foregoing.
Very truly yours,
NORTHEAST UTILITIES
By /s/Eugene G. Vertefeuille
Eugene G. Vertefeuille
Its Assistant Treasurer
Agreed:
MELLON BANK, N.A.
By /s/Richard S. Thomas
Richard S. Thomas
Its Vice President
Date: February 7, 1992
Exhibit 10.36.3
March 16, 1992
Mellon Bank, N.A.
One Mellon Bank Center
Suite 3340
Pittsburgh, PA 15258
(Attention: Earl Kleckner)
Re: Northeast Utilities ESOP Loan
Gentlemen:
Reference is made to the Loan Agreement, dated as of December 2, 1991,
by and between Northeast Utilities and Mellon Bank, N.A. solely in its
capacity as trustee (the "Trustee") of the Northeast Utilities Service
Company Supplemental Retirement and Savings Plan ESOP Trust, as amended
(the "Loan Agreement"). Section 8(d) of the Loan Agreement provides that
Northeast Utilities will make or cause to be made contributions to the ESOP
Trust (as defined in the Loan agreement) in amounts sufficient to pay
reasonable operating expenses of the ESOP Trust and to pay all interest on
and the full amount of principal of the Loan (as therein defined) as and
when such obligations become due, after taking into account the extent to
which such interest and principal obligations are otherwise satisfied using
dividends paid on common shares of Northeast Utilities held by the ESOP
Trust.
On March 9, 1992, Northeast Utilities Service Company ("NUSCO")
adopted amendments to the Northeast Utilities Service Company Supplemental
Retirement and Savings Plan (the "Plan") providing for the merger into the
Plan of the Northeast Utilities Service Company Tax Reduction Employee
Stock Ownership Plan ("TRAESOP") and the Northeast Utilities Service
Company Payroll-Based Employee stock Ownership Plan ("PAYSOP"), and for an
additional ESOP benefit with respect to earnings on common shares
("TRAESOP/PAYSOP Shares") that had been held in the TRAESOP and PAYSOP
trusts. It is contemplated that the Treasurer of NUSCO may direct you from
time to time in your capacity as Trustee of the ESOP Trust to make payments
on the Loan under the Loan Agreement using cash dividends on certain
TRAESOP/PAYSOP Shares, allowing allocation of shares from the ESOP Trust to
the accounts of Plan participants holding TRAESOP/PAYSOP Shares, all in
accordance with the provisions of the amended Plan. In such case Northeast
Utilities's obligation under Section 8(d) of the Loan Agreement to make or
cause to be made Plan contributions would take into account the extent to
which Loan interest and principal obligations have been satisfied not only
using dividends paid on shares held by the ESOP Trust, but also using
dividends on those TRAESOP/PAYSOP Shares.
Accordingly, please sign and return one copy of this letter to
indicate your agreement that Section 8(d) of the Loan Agreement is hereby
amended to read in its entirety as follows, to reflect the foregoing:
(d) The Company will make, or will cause to be made by and on
behalf of companies that are members of a "controlled group of
corporations" (as defined in the Code) with the Company, contributions
to the ESOP Trust in amounts sufficient to pay reasonable operating
expenses of the ESOP Trust and to pay all interest on and the full
amount of principal of the Loan outstanding hereunder and under the
ESOP Term Note as and when such obligations become due, after taking
into account the extent to which such interest and principal
obligations are otherwise satisfied using dividends paid on Company
Shares as required or permitted by the Plan.
The Declaration of Trust of Northeast Utilities provides that no
shareholder of Northeast Utilities shall be held to any liability whatever
for the payment of any sum of money, or for damages or otherwise under any
contract, obligation or undertaking made, entered into or issued by the
trustees of Northeast Utilities or by an officer, agent or representative
elected or appointed by such trustees, and no such contract, obligation or
undertaking shall be enforceable against such trustees or any of them in
their or his or her individual capacities or capacity and all such
contracts, obligations and undertakings shall be enforceable only against
the trustees as such, and every person or entity, having any claim or
demand arising out of any such contract, obligation or undertaking shall
look only to the trust estate for the payment or satisfaction thereof.
Very truly yours,
NORTHEAST UTILITIES
By /s/Eugene G. Vertefeuille
Eugene G. Vertefeuille
Its Assistant Treasurer
Acknowledged and Agreed:
MELLON BANK, N.A., solely in
its capacity as trustee of the
trust created under the Agreement
of Trust, dated as of December 1, 1991,
between such trustee and Northeast
Utilities Service Company
By /s/Richard S. Thomas
Name: Richard S. Thomas
Title: Vice President
Date: April 9, 1992
Exhibit 13.1
1993
PORTIONS OF ANNUAL REPORT TO SHAREHOLDERS
NORTHEAST UTILITIES<PAGE>
FINANCIAL AND STATISTICAL SECTION
TABLE OF CONTENTS
Page 18-25
Management's Discussion And Analysis
Page 26
Company Report
Page 26
Report Of Independent Public Accountants
Page 27
Consolidated Statements Of Income
Page 28
Consolidated Statements Of Cash Flows
Page 29
Consolidated Statements Of Income Taxes
Page 30-31
Consolidated Balance Sheets
Page 32-33
Consolidated Statements Of Capitalization
Page 34
Consolidated Statements Of Common Shareholders' Equity
Page 35-48
Notes To Consolidated Financial Statements
Page 49
Consolidated Statements Of Quarterly Financial Data
Page 49
Consolidated General Operating Statistics
Page 50-51
Selected Consolidated Financial Data
Page 52-53
Consolidated Electric Operating Statistics
Page 54
Shareholder Information
<PAGE>17
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
FINANCIAL CONDITION
Overview
Northeast Utilities' (NU or the company) earnings per common share were $2.02
in 1993, unchanged from 1992. The 1993 earnings per common share reflect a
decrease in net income and a decrease in the number of shares outstanding,
resulting from a change in accounting rules for Employee Stock Ownership
Plans (ESOP). The 1993 earnings also reflect the cumulative effect of a
change in the accounting for Connecticut municipal property taxes. Certain
subsidiaries of NU adopted a one-time change in the method of accounting for
Connecticut municipal property tax expense in the first quarter of 1993. This
change resulted in a one-time contribution to earnings of $51.7 million or
$0.42 per common share.
Earnings per common share before the cumulative effect of the change in
accounting for property taxes were $1.60 in 1993. The earnings decrease from
1992 is primarily attributable to one-time impacts of (a) an increase of
$0.19 per share in June 1992 for earnings associated with NU's acquisition of
Public Service Company of New Hampshire (PSNH), (b) a decrease of $0.14 per
share for the charge to earnings in the third quarter of 1993 for the costs
of the company's employee-reduction program, and (c) a decrease of $0.12 per
share for disallowances ordered by Connecticut regulators in The Connecticut
Light and Power Company (CL&P) rate case. Other items that affected earnings
in 1993 were the additional earnings from PSNH and North Atlantic Energy
Corporation (NAEC) reflecting a full year of merged operations, the approval
of an agreement with the state of New Hampshire that resolves certain issues
that had arisen under the PSNH rate agreement (the Global Settlement) in the
fourth quarter of 1993, increased revenues from recent rate increases in NU
subsidiaries' retail jurisdictions, and the company's continued cost-
management efforts. These increases were partially offset by higher costs
for the recovery of regulatory deferrals and the higher contribution in 1992
of energy transactions with other utilities.
The year 1993 was one of both challenge and success for the company. NU's
work force was reduced about 7 percent in 1993 through an employee-reduction
program that involved early retirements and involuntary terminations. The
1993 composite nuclear capacity factor of 80.8 percent was the highest level
the NU system has ever achieved and far above the national average.
Connecticut regulators approved a three-year rate plan that weakened 1993
earnings but will assure CL&P customers rate stability over the next few
years, which should help to improve CL&P's future earnings and competitive
position.
In 1994, NU will continue to face challenges associated with a lagging
economy and competition. Retail sales for 1993 were flat, as compared to
1992, as a result of a stagnant New England economy. NU's subsidiaries expect
retail sales growth of between 1 and 2 percent in 1994, based on some modest
improvement in the economy.
Competition within the electric utility industry is increasing. In response,
NU has developed, and is continuing to develop, a number of initiatives to
retain and continue to serve its existing customers and to expand its retail
and wholesale customer base. These initiatives are aimed at keeping customers
from either leaving NU's retail service territory or replacing NU's electric
service with alternative energy sources.
The cost of doing business, including the price of electricity, is higher in
the Northeast than in most other parts of the country. Relatively high state
and local taxes, labor costs, and other costs of doing business in New
England also contribute to competitive disadvantages for many industrial and
commercial customers of CL&P, PSNH, and Western Massachusetts Electric
Company (WMECO). These disadvantages have aggravated the pressures on
business customers in the current weakened regional economy. Since 1991,
CL&P and WMECO have worked actively with state development authorities to
package development incentives for a variety of retail and wholesale
customers. These economic development packages typically include both
electric rate discounts and incentive payments for energy-efficient
construction, as well as technical support and energy conservation services.
Targeted rate reductions in effect at the end of 1993 to a limited group of
large customers were successful in preserving NU system revenues of
approximately $50 million. The amount of discounts provided to customers is
expected to increase as each subsidiary intensifies its efforts to retain
existing customers and gain new customers.
As a result of very limited load growth throughout the Northeast and the
operation of several new generating plants in the past five years, wholesale
competition has grown, and a seller's market for electricity has turned into
a buyer's market. The prices the NU system has been able to receive for new
wholesale sales have generally been far lower than
<PAGE>18
the prices prevalent in 1988 and 1989. In future years, competition in the
Northeast is expected to increase, putting further downward pressure on
prices. However, the potential price decreases may be offset somewhat by an
improvement in the region's economy, as well as by the retirement of a number
of the region's existing generating facilities.
The ability of retail customers to select an electricity supplier and then
force the local electric utility to transmit the power to the customer's site
is known as "retail wheeling." While wholesale wheeling is mandated by the
Energy Policy Act of 1992 under certain circumstances, retail wheeling is
generally not required in any of the NU system's jurisdictions. Retail
wheeling is being investigated in some of the NU system's jurisdictions.
NU management has taken steps to make the company more competitive and
profitable in the changing utility environment. A system wide emphasis on
improved customer service is a central focus of the reorganization of NU that
became effective on January 1, 1994. The reorganization entails realignment
of the system into two new core business groups. The first core business
group is devoted to energy resource acquisition and wholesale marketing and
focuses on nuclear, fossil, and hydroelectric generation, wholesale power
marketing, and new business development. The second core business group
oversees all customer service, transmission and distribution operations, and
retail marketing in Connecticut, New Hampshire, and Massachusetts. These two
core business groups are served by various support functions.
In connection with NU's reorganization, the company has begun a corporate
reengineering process which should help it to identify opportunities to
become more competitive, while improving customer service and maintaining
excellent operational performance. NU has aggressive cost-reduction targets
over the next three years, which should enable the company to remain
competitive with vulnerable customers in particular.
To date, the NU system has not been materially affected by competition, and
it does not foresee substantial adverse effect in the near future, unless the
current regulatory structure is substantially altered. NU believes the steps
it is taking will have significant, positive effects in the next few years.
In addition, NU's subsidiaries benefit from a diverse retail base. The NU
system has no significant dependence on any one customer or industry. The NU
system's extensive transmission facilities and diversified generating
keepsake are strong positive factors in the regional wholesale power market.
NU serves about 30 percent of New England's electric needs and is one of the
20 largest electric utility systems in the country.
Achieving measurable improvement in earnings in 1994 will depend, in part, on
the success of NU's wholesale power marketing, customer retention, and
reengineering efforts. These efforts should help increase NU's earnings and,
thereby, lower the dividend payout ratio. (1993 dividends were equal to 87
percent of earnings.)
RATE MATTERS
Deferred charges at December 31, 1993 were $2.9 billion, which includes $1.2
billion for the adoption of Statement of Financial Accounting Standards
(SFAS) No. 109, Accounting for Income Taxes, and $769 million for the PSNH
regulatory asset. The PSNH regulatory asset was established under PSNH's
reorganization plan. A portion of the regulatory asset ($425 million) is
being recovered over a seven-year period, and the remainder is being
recovered over a twenty-year period. The system companies are currently
recovering some amounts of the remaining deferred charges from customers.
Management expects that substantially all of the deferred charges will be
recovered through future rates.
Under SFAS No.109, the company reflected a regulatory asset and a deferred
tax liability for the cumulative amount of income taxes associated with
timing differences for which deferred taxes had not been provided but are
expected to be recovered from customers in the future. The adoption of SFAS
No. 109 has not had a material effect on results of operations.
The company also adopted SFAS No. 106, Employer's Accounting for
Postretirement Benefits Other Than Pensions, in 1993. Adopting SFAS No. 106
has not had a material impact on financial condition or results of operations
because the system companies are currently recovering or expect to recover
these costs in the future.
See the "Notes To Consolidated Financial Statements" for further details on
deferred charges and recently adopted accounting standards.
CONNECTICUT
On June 16,1993, the Department of Public Utility Control (DPUC) issued a
final decision in CL&P's December 1992 retail rate case (the rate decision)
approving a multiyear rate plan which provides for annual rate increases of
$46 million, or 2.01 percent, in July 1993; $47.1 million, or 2.04 percent,
in July 1994; and $48.2 million, or 2.06 percent, in July 1995. The total
cumulative increase granted of $141.3 million, or 6.1 percent, was
approximately 42 percent of CL&P's updated request.
<PAGE>19
In light of the state of Connecticut's concern over economic development and
industrial and commercial rates, one important aspect of the rate decision
was that industrial and manufacturing rates will only rise by about 1.1
percent annually over the three-year period. Other significant aspects of
the rate decision included the reduction of CL&P's return on equity (ROE)
from 12.9 percent to 11.5 percent for the first year of the multiyear plan,
11.6 percent for the second year, and 11.7 percent for the third year, a 32-
month phase-in beginning in 1995 of CL&P's nonpension, postretirement benefit
costs required to be recognized under SFAS No. 106 with amortization of
deferred amounts over five years; the three-year phase-in of the Millstone 2
steam generators; the deferral of cogeneration expenses with carrying costs
of $42.1 million in fiscal year 1994 and $20.9 million in fiscal year 1995
with recovery over five years beginning July 1, 1996; and the full recovery
of the remaining costs of the Millstone 3 and Seabrook phase-ins (balance of
$185.9 million at December 31,1993).
The rate decision used $49 million of prior fuel over recoveries to offset a
similar amount of the unrecovered replacement power costs under CL&P's
Generation Utilization Adjustment Clause (GUAC). The GUAC has been in
operation since 1979 and was designed as a mechanism to recover or to refund
certain fuel costs if the nuclear units do not operate at a predetermined
capacity factor. In January 1994, the DPUC issued a decision ordering CL&P
not to include a GUAC amount in customers' bills through August 1994. The
DPUC found that CL&P overrecovered its fuel costs during the 1992-1993 GUAC
period and offset the amount of the over recovery against the unrecovered
GUAC balance. The effect of the order was a disallowance of $7.9 million.
The DPUC further ordered that any GUAC deferred charges subsequent to July
1993 will be offset by any fuel overrecoveries. There is an unrecovered GUAC
balance at December 31, 1993 of $13.7 million, but there is not expected to
be an unrecovered balance at the end of the GUAC period in August 1994. The
DPUC's decision creates some uncertainty about the future operation of the
GUAC. CL&P has requested further clarification of the decision, and has
appealed it, but does not expect that the decision will have a material
adverse effect on future results of operations.
The rate decision also required CL&P to allocate to customers a portion of
the property tax accounting change made in the first quarter of 1993, which
resulted in a charge against other income of $10.2 million in the second
quarter of 1993.
In August 1993, two appeals were filed from the DPUC's June 1993 rate
decision. CL&P appealed four issues from the rate decision. The second
appeal was filed by the Connecticut Office of Consumer Counsel (OCC) and the
city of Hartford. This appeal challenges the legality of the multiyear plan
accepted by the DPUC. CL&P has filed a motion to dismiss this appeal on
jurisdictional grounds. In addition, the Court rejected the city of
Hartford's and OCC's motion to stay implementation of the second and third
year of the rate plan pending the outcome of their appeal.
Outages that occurred over the period October 1990 through February 1992 at
the Millstone nuclear units have been the subject of five ongoing prudence
reviews in Connecticut. CL&P has received final decisions from the DPUC on
four of the reviews. The OCC has appealed decisions favorable to the company
in two dockets. The exposure under these two dockets is approximately $66
million. The DPUC has suspended a third docket, pending the outcome of one
of the appeals. The exposure under this docket is $26 million. An
additional nuclear outage prudence docket before the DPUC is the docket
established to review the 1992 outage at Millstone 2 to replace the steam
generators. A decision is expected in late 1994. Management believes that
its actions with respect to all of these outages have been prudent, and it
does not expect the outcome of the prudence reviews to result in material
disallowances.
In April 1993, the DPUC issued an order approving a new Conservation
Adjustment Mechanism (CAM), which allowed CL&P to recover conservation and
load-management (C&LM) expenditures over an eight-year period (reduced from
ten years) and reaffirmed program performance incentives. In December 1993,
CL&P filed a proposed CAM settlement with the DPUC. The settlement proposes
1994 C&LM expenditures of $39 million, reduction in the recovery period from
8 to 3.85 years and other changes in program designs, performance incentives,
and cost recovery. Unrecovered C&LM costs at December 31, 1993 were $111.4
million.
NEW HAMPSHIRE
PSNH's rates are determined under a rate agreement executed by the Governor
and the Attorney General of New Hampshire in 1989 and subsequently approved
by the New Hampshire Public Utilities Commission (NHPUC) (the Rate
Agreement). The Rate Agreement sets out a comprehensive plan of rates for
PSNH, providing for seven base rate increases of 5.5 percent per year (the
fixed-rate period) and a comprehensive fuel and purchased power adjustment
clause (FPPAC). The base rate increases are effective annually on each June
1. The fourth base rate increase took place on June 1, 1993.
<PAGE>20
In June 1993, PSNH's base rates increased by 6.2 percent. The increase above
the 5.5 percent under the Rate Agreement reflected a temporary increase to
recover the increased costs associated with recently enacted tax legislation.
Concurrently, the FPPAC rate was lowered resulting in a net average rate
increase of 4.5 percent.
In November 1993, the NHPUC approved a 1.8 percent increase in PSNH's average
retail rates, effective on December 1, 1993, for an increased FPPAC rate.
The increase was attributed primarily to the anticipated costs of a refueling
outage at Seabrook scheduled to begin in March 1994. To mitigate the rate
increase, the NHPUC approved the collection of the refueling outage costs
over 18 months.
In January 1994, the NHPUC approved the Global Settlement between PSNH, NAEC,
Northeast Utilities Service Company (NUSCO), and the Attorney General of the
state of New Hampshire. The Global Settlement addressed changes in tax
legislation in New Hampshire, accounting treatments resulting from adoption
of SFAS No. 106 and SFAS No. 109, and recovery for certain aspects of PSNH's
settlement with the Vermont Electric Generation and Transmission Cooperative,
Inc. (VEG&T), including the purchase by NAEC of VEG&T's approximate 0.4
percent share of Seabrook, among other results. The Global Settlement, as
approved, allowed the accelerated recognition of tax benefits, which will
result in moderate increases in PSNH's earnings in the next several years,
beginning in 1993.
The costs associated with purchases from certain small-power producers (SPPs)
over the level assumed in the Rate Agreement are deferred and recovered over
ten-year periods through the FPPAC. At December 31, 1993, SPP deferrals are
approximately $107.6 million. A majority of these purchases is under long-
term arrangements (20-30 years) at prices significantly higher than PSNH's
current or projected avoided costs. PSNH is attempting to renegotiate these
arrangements and must report to the NHPUC on the results of the negotiations.
In January 1994, PSNH filed agreements reached with certain SPPs with the
NHPUC, which call for PSNH to pay the SPPs a total of $91.8 million. In
return, PSNH would no longer be obligated to buy power from these SPPs, and
the SPPs are barred from attempting to provide service to any customers now
on the PSNH system or on the entire NU system. If approved by the NHPUC, the
agreements will provide benefits to customers over the terms of the
arrangements. Management expects to recover any payments from customers.
The NHPUC will be examining the prudence of PSNH's efforts and considering
the implementation of temporary rates for the SPPs that have not settled with
PSNH.
As prescribed by the Rate Agreement, NAEC is phasing in its $700-million
initial investment in Seabrook 1. As of December 31,1993, NAEC has included
in rates $385 million of its Seabrook investment. The remaining investment
($315 million) will be phased into rates over the next three years beginning
May 15, 1994. The deferred return associated with the amount of investment
that has not been included in rates is $136.3 million through December
31,1993. This amount and the additional deferred amounts associated with the
remaining phase-in will be recovered over the period May 1997 through 2001.
MASSACHUSETTS
As a result of a May 1992 Department of Public Utilities (DPU) decision,
WMECO's annual retail rates increased by approximately $11 million, or 2.7
percent, on July 1,1993. This increase is the second step of a two-year
settlement agreement proposed jointly by WMECO and the Massachusetts Attorney
General's Office and approved by the DPU. The first step went into effect on
July 1, 1992.
WMECO had incurred approximately $17 million in replacement-power costs
associated with Millstone outages that have been the subject of prudence
reviews in Connecticut. Recovery of prudently incurred replacement-power
costs is permitted through a retail fuel adjustment clause. The DPU reviews
the performance of WMECO's generating units on an annual basis. Management
believes that its actions with respect to these outages have been prudent and
does not expect the outcome of the DPU performance program reviews to have a
material adverse effect on WMECO's future earnings.
WMECO has a conservation charge (CC) in effect to recover the cost of C&LM
programs above or below the base rate recovery levels. WMECO filed a new CC
in February 1994. WMECO expects to spend about $14 million in 1994 on C&LM
programs.
ENVIRONMENTAL MATTERS
The company devotes substantial resources to identify and then to meet the
multitude of environmental requirements it faces. The company has active
auditing programs addressing a variety of different regulatory requirements,
including an environmental auditing program to detect and remedy
noncompliance with environmental laws or regulations.
The NU system is potentially liable for environmental cleanup costs at a
number of sites both inside and outside its service territories. To date,
the future estimated
<PAGE>21
environmental remediation costs for the sites for which the system companies
expect to bear some liability have not been material with respect to the
earnings or financial position of the company. At December 31, 1993, the
liability recorded by the system for its estimated environmental remediation
costs, excluding any possible insurance recoveries or recoveries from third
parties, amounted to approximately $4 million. However, while not probable,
it is reasonably possible, these costs could rise to much as $9 million. The
extent of additional future environmental cleanup costs is not estimable due
to factors such as the unknown magnitude of possible contamination and
changes in existing laws and regulatory practices.
The company expects that the implementation of Phase I of the 1990 Clean Air
Act Amendments will require only modest emissions reductions for the NU
system. CL&P's and WMECO's exposure is minimal because of the companies'
investment in nuclear energy in the 1970s and 1980s and the burning of low-
sulfur fuels. PSNH is subject to more stringent emission limits for nitrogen
oxides within the next five years under Phase II requirements. The costs for
meeting Phase II requirements cannot be estimated at this time because the
emission limits have not been determined.
The NU system companies' estimated cost to decommission their shares of
Millstone units 1,2, and 3 and Seabrook is approximately $1.1 billion in
year-end 1993 dollars. In addition, the system companies' estimated cost to
decommission their shares of the regional nuclear generating units is
estimated to be approximately $280-$290 million. These costs are being
recovered and recognized over the lives of the respective units. Yankee
Atomic Electric Company (YAEC) has begun decommissioning its nuclear
facility. The NU system companies' estimated obligation to YAEC has been
recorded on the Consolidated Balance Sheets. Managements expects that the
system companies will continue to be allowed to recover these costs.
For further information regarding nuclear decommissioning, environmental
matters, and other contingencies, see the "Notes To Consolidated Financial
Statements."
NUCLEAR PERFORMANCE
The composite capacity factor of the five nuclear generating units that the
NU system operates (including the Connecticut Yankee nuclear unit) was 80.8
percent for 1993, compared with 63.7 percent for 1992 and a national average
of 70.6 percent for 1993. The lower 1992 capacity factor was primarily the
result of the 1992 Millstone 2 steam generator replacement outage and some
unexpected technical and operating difficulties.
In 1993, NU was informed by the Nuclear Regulatory Commission (NRC) of three
apparent violations related to the circumstances surrounding the repair of a
leaking valve in the reactor coolant system at the Millstone 2 nuclear power
station. Millstone 2 was shut down on August 5, 1993 when extensive repair
efforts proved unsuccessful and the valve began to leak at a level beyond
operating requirements. NU was assessed and paid a civil penalty of $237,500
for the three violations that were identified during the NRC investigation.
NU has initiated a number of immediate and long-term actions designed to
further enhance the safe operation of all the NU nuclear plants. In an effort
to improve nuclear performance, NU management announced a reorganization of
its Connecticut-based nuclear organization in November 1993. The
reorganization, which is based on an overview of NU's future nuclear
operational needs, resulted in a number of personnel changes, including the
appointment of a new senior vice president of Millstone Station, realignment
of engineering operations along unit lines, and management consolidation. In
addition, centralization of the nuclear engineering function at the
generating stations is expected to occur during the summer of 1994. No
material expense will be incurred by the company in connection with the
reorganization.
LIQUIDITY AND CAPITAL RESOURCES
Cash provided from operations increased $258.7 million in 1993, compared with
the same period in 1992, primarily due to the contributions of PSNH and NAEC
and higher cash earnings from CL&P. Cash provided from financing activities
was $1.1 billion lower in 1993, compared with the same period in 1992,
primarily due to the financing activity in 1992 associated with the
acquisition of PSNH and a net decrease in short-term debt. Cash used for
investments was $835.4 million lower in 1993, compared with the same period
in 1992, primarily due to the acquisition of the net assets of PSNH in 1992.
The charts on the next page illustrate the sources and uses of cash
requirements for 1992 and 1993, and the projections for 1994 through 1998.
The NU system companies have been able to shift their focus to refinancing
outstanding high-cost securities. Internally generated cash has generally
been, and is projected to continue to be, more than sufficient to cover
construction costs. The forecast through 1998 shows additional financings
only in years with a large amount of securities maturing. CL&P may need up
to $200 million in 1994 to finance maturing debt and PSNH may need to finance
a buyout of some of its arrangements with the
<PAGE>22
SPPs. The system companies are obligated to meet $1.5 billion of long-term
debt and preferred stock maturities and cash sinking-fund requirements for
the 1994 through 1998 period, including $295.3 million for 1994. Also, $125
million of First Mortgage Bonds outstanding at December 31, 1993 has been
called in December 1993 for redemption in 1994.
Aggressive refinancing of their outstanding high-cost securities has enabled
the system companies to lower their cost of debt. There was no new money
financing in 1993. To take advantage of favorable market conditions during
1993, the system companies refinanced $485 million of First Mortgage Bonds,
$110 million of preferred stock, and $414.1 million of pollution control
bonds, in addition to restructuring the system companies' various credit
lines. It is estimated that the 1993 refinancings and restructuring will
save the company approximately $17 million per year. The system companies
intend, if market conditions permit, to continue to refinance a portion of
their outstanding long-term debt and preferred stock at a lower effective
cost.
On February 17, 1994, CL&P issued two new First Mortgage Bonds, the $140
million 1994 Series A and the $140 million 1994 Series B Bonds, at annual
rates of 5.50 percent and 6.125 percent, respectively. The Series A Bonds
will mature on February 1, 1999 and the Series B Bonds will mature on
February 1, 2004. Proceeds from these issues, together with proceeds from
short-term debt, will be used to redeem $310 million of outstanding bonds
with interest rates ranging from 5.625 percent to 7.625 percent. Savings
from the refinancings are estimated to be approximately $4.7 million per year
in reduced interest rates.
The NU system's construction program expenditures, including Allowance for
Funds Used During Construction (AFUDC), for the period 1994 through 1998 are
estimated to be approximately $1.2 billion, including $267.5 million for
1994. The construction program's main focus is maintaining and upgrading the
existing transmission and distribution system as well as nuclear and fossil-
generating facilities. The company does not foresee the need for new major
generating facilities at least until the year 2007.
CL&P and WMECO utilize a nuclear fuel trust to finance nuclear fuel
requirements for Millstone 1, 2, and 3. Nuclear fuel requirements, including
nuclear fuel financed through the trust, are estimated to be $449.7 million
for the period 1994 through 1988, including $98.4 million for 1994.
RESULTS OF OPERATIONS
A majority of the changes in items affecting results of operations between
1992 and 1993 is due to the inclusion of PSNH and NAEC results for a full
year in 1993 and only seven months in 1992. The fact that PSNH and NAEC were
not part of the NU system in 1991 but were for seven months of 1992, was a
primary contributor to changes in results of operations between 1991 and
1992.
The relative magnitude of the various expenditures incurred by the system's
continuing operations is illustrated in the chart on page 25.
OPERATING REVENUES
The components of the change in operating revenues for the past two years are
provided in the table on the next page.
Operating revenues increased $412.2 million from 1992 to 1993 primarily due
to the additional revenues of PSNH for a full year in 1993. Operating
revenues excluding PSNH increased $45.1 million from 1992 to 1993. Revenues
related to regulatory decisions increased in 1993, primarily
NORTHEAST UTILITIES
SOURCE & USE OF FUNDS
1992-1998
Use of Funds 1992 1993 1994 1995 1996 1997 1998
- ------------ ---- ---- ---- ---- ---- ---- ----
(Percentages)
Construction 15.4 16.2 36.8 46.2 33.8 25.2 34.4
Nuclear Fuel 1.7 4.7 8.8 13.2 18.3 5.5 19.5
Maturities and Sinking Fund 42.0 68.6 39.9 34.2 41.4 36.7 42.0
Repayment of Short-Term Debt 0.0 10.5 14.5 6.4 6.5 32.6 4.1
Acquisition of PSNH 40.9 0.0 0.0 0.0 0.0 0.0 0.0
----- ----- ----- ----- ----- ----- -----
Total Funds Required 100.0 100.0 100.0 100.0 100.0 100.0 100.0
===== ===== ===== ===== ===== ===== =====
Source of Funds 1992 1993 1994 1995 1996 1997 1998
- --------------- ---- ---- ---- ---- ---- ---- ----
(Percentages)
Internally Generated Funds 15.9 35.9 51.4 86.8 82.4 81.1 82.2
Nuclear Fuel Trust 1.7 3.9 8.0 10.6 15.6 4.4 17.8
Long-Term Debt and
Preferred Stock 60.0 59.0 40.6 0.0 0.0 8.8 0.0
Short-Term Debt 9.0 0.0 0.0 0.0 0.0 0.0 0.0
Common Stock 13.4 1.2 0.0 2.6 2.0 5.7 0.0
----- ----- ----- ----- ----- ----- -----
Total Source of Funds 100.0 100.0 100.0 100.0 100.0 100.0 100.0
===== ===== ===== ===== ===== ===== =====
<PAGE>23
<PAGE>
<TABLE> CHANGE IN OPERATING REVENUE
<CAPTION>
Increase/(Decrease) Increase/(Decrease)
- -----------------------------------------------------------------------------
- ---------------
1993 vs. 1992(a) 1992 vs. 1991(b)
- -----------------------------------------------------------------------------
- ---------------
(Millions of Dollars) (Millions of Dollars)
NU Excl. PSNH Total NU Excl. PSNH
Total
PSNH NU PSNH
NU
<S> <C> <C> <C> <C> <C>
<C>
Regulatory decisions $ 46.1 $ 8.6 $ 54.7 $ 95.1 $ 15.8
$110.9
Fuel, purchased power, and
FPPAC cost recoveries (14.9) 154.1 139.2 18.8 151.5
170.3
Sales volume 6.8 188.8 195.6 2.4 242.0
244.4
Other revenues 7.1 15.6 22.7 (91.6) 29.1
(62.5)
----- ------ ------ ----- ------
------
Total revenue change $ 45.1 $367.1 $ 412.2 $ 24.7 $ 438.4
$463.1
===== ====== ====== ===== ======
======
(a) The change in operating revenues from 1992 to 1993 was due primarily to
the inclusion of PSNH's operating revenues for a full year in 1993 and
only seven months in 1992.
(b) The change in operating revenues from 1991 to 1992 was due primarily to
the fact that PSNH was not part of the NU system in 1991 but was
included for seven months in 1992.
</TABLE>
<PAGE>
because of the effects of the June 1993 DPUC retail rate increase for CL&P
and the July 1992 and July 1993 DPU retail rate increases for WMECO. Fuel and
purchased-power cost recoveries decreased primarily due to lower energy costs.
Retail sales for CL&P and WMECO increased only 0.2 percent in 1993 from 1992
sales levels.
Other revenues increased primarily because of the recognition by a nonutility
subsidiary of recoveries for 1993 conservation expenditures.
Operating revenues increased $463.1 million from 1991 to 1992 primarily due
to the addition of PSNH revenues for seven months in 1992. Operating
revenues excluding PSNH increased $24.7 million from 1991 to 1992. Revenues
related to regulatory decisions increased in 1992, primarily because of the
effects of the July 1991 and July 1992 DPU retail rate increases for WMECO
and the August 1991 DPUC retail rate increase for CL&P. Fuel and purchased-
power cost recoveries increased primarily due to timing in the recover of
fuel expenses under the provisions of CL&P's fuel adjustment clauses. Other
revenues decreased primarily because of 1992 sales to other utilities that
took place at lower prices per kilowatt-hour, the 1991 one-time reimbursement
of costs associated with the reactivation of fossil-generating units, and
lower 1992 WMECO recoveries associated with conservation, capacity, and
transmission costs.
FUEL, PURCHASED, AND NET INTERCHANGE POWER
Fuel, purchased, and net interchange power increased $145.2 million in 1993,
as compared to 1992, primarily due to the additional PSNH and NAEC expenses
($99.0 million), the timing in the recovery of fuel expenses under the
provisions of CL&P's fuel adjustment clauses and disallowances of
replacement-power costs as a result of regulatory reviews in Connecticut,
partially offset by lower outside purchases due to better nuclear performance
in 1993.
Fuel, purchased, and net interchange power increased $98.7 million in 1992,
as compared to 1991, primarily due to the addition of PSNH and NAEC expenses
($59.1 million), timing in the recovery of fuel expenses under the provisions
of CL&P's fuel adjustment clauses, and previously deferred replacement-power
costs that are not recoverable as a result of regulatory reviews in
Connecticut.
OTHER OPERATION AND MAINTENANCE EXPENSES
Other operation and maintenance expenses increased $142.5 million in 1993, as
compared to 1992, primarily due to the additional PSNH and NAEC expenses
($105.2 million), the 1993 costs associated with the employee-reduction
program, the 1992 reimbursement of previously expended costs associated with
the PSNH acquisition, and 1993 SFAS No. 106 postretirement benefit costs,
partially offset by lower 1993 costs associated with the operation and
maintenance activities of the nuclear units.
Other operation and maintenance expenses increased $109.1 million in 1992, as
compared to 1991, primarily due to the addition of PSNH and NAEC expenses
($147.8 million) and higher 1992 costs of operation and maintenance
activities at the nuclear units, partially offset by the 1992 reimbursement
of previously expensed costs associated with the PSNH acquisition, the 1991
costs associated with a voluntary early
<PAGE>24
retirement program, and lower 1992 conservation expenses.
DEPRECIATION EXPENSES
Depreciation expenses increased $38.6 million in 1993, as compared to 1992,
and $44.2 million in 1992, as compared to 1991, primarily as a result of the
additional PSNH and NAEC depreciation expense ($26.8 million in 1993 and
$34.4 million in 1992, including Seabrook), higher depreciation rates, and
higher depreciable plant balance.
AMORTIZATION, OF REGULATORY ASSETS, NET
Amortization, of regulatory assets net increased $58.1 million in 1993, as
compared to 1992, and $69.8 million in 1992, as compared to 1991, primarily
because of the additional PSNH amortization of the regulatory asset as
provided for in the Rate Agreement ($37.7 million in 1993 and $51.8 in 1992),
and higher amortization of Millstone 3 and Seabrook deferred return and
expenses. The increase in 1993 is also attributable to the gross-up of taxes
due to SFAS No. 109, and the amortization in 1993 of costs paid by CL&P to
the developers of two wood-to-energy plants as allowed in the recent rate
decision, partially offset by the amortization of the regulatory liability
recognized as a result of the PSNH Global Settlement ($21.9 million).
FEDERAL AND STATE INCOME TAXES
Federal and state income taxes increased $4.5 million in 1993, as compared to
1992, primarily because of an increase in flow-through depreciation combined
with the tax accounting associated with the PSNH Global Settlement partially
offset by the company's change in accounting for its ESOP.
Federal and state income taxes increased $33.8 million in 1992, as compared
to 1991, primarily because of the addition of PSNH and NAEC and higher book
income of the other NU companies.
TAXES OTHER THAN INCOME TAXES
Taxes other than income taxes increased $19.0 million in 1993, as compared to
1992, and $34.8 million in 1992, as compared to 1991, primarily due to the
additional PSNH and NAEC taxes ($20.2 million in 1993 and $27.4 million in
1992, including property taxes on Seabrook).
DEFERRED NUCLEAR PLANTS RETURN
Deferred nuclear plants return increased $18.7 million in 1993, as compared
to 1992, and $15.6 million in 1992, as compared to 1991, primarily because of
deferred return associated with NAEC's ownership share of Seabrook ($30.0
million in 1993 and $22.8 million in 1992), partially offset by a decrease in
Millstone 3 deferred return because additional Millstone 3 investment was
phased into rates.
OTHER INCOME, NET
Other income, net decreased $10.9 million in 1993, as compared to 1992,
primarily because of the allocation to customers of a portion of the property
tax accounting change as ordered by the DPUC in the CL&P rate decision and
lower AFUDC.
INTEREST CHARGES
Interest on long-term debt increased $57.3 million in 1993, as compared to
1992, and $70.2 million in 1992, as compared to 1991, primarily because of
higher debt levels from the addition of PSNH and NAEC ($56.7 million in 1993
and $86.8 million in 1992), partially offset by lower average interest rates
as a result of the substantial refinancing activity. The increase in 1993 is
also due to the absence of an interest expense offset in 1993 for ESOP
dividends due to a change in accounting for ESOPs.
Other interest charges increased $9.6 million in 1993, as compared to 1992,
primarily because of higher interest on short-term borrowings, lower AFUDC,
and interest recognized for a potential Connecticut sales tax audit
assessment.
PREFERRED DIVIDENDS OF SUBSIDIARIES
Preferred dividends of subsidiaries increased $4.4 million in 1992, as
compared to 1991, primarily because of the addition of preferred dividends
for PSNH ($7.5 million), partially offset by lower preferred dividend rates.
TAX BENEFIT OF EMPLOYEE STOCK OWNERSHIP PLAN DIVIDENDS
Tax benefit of ESOP dividends of $7.3 million in 1992 is the result of the
company adopting an ESOP. In 1993, these benefits are reflected as a
reduction to income tax expense. See the "Notes to Consolidated Financial
Statements" for further information regarding ESOP.
1993 DISTRIBUTION OF REVENUE
Percent
-------
Energy Costs 25.4%
Other Operation and Maintenance Expenses 20.4%
Wages and Benefits 13.9%
Taxes 12.5%
Common and Preferred Dividends 7.3%
Other Operating Expenses and Other Income, Net 20.5%
------
Total Revenue Dollars 100.0%
======
<PAGE>25
COMPANY REPORT
The consolidated financial statements of Northeast Utilities and subsidiaries
and other sections of this Annual Report were prepared by the company. These
financial statements, which were audited by Arthur Andersen & Co., were
prepared in accordance with generally accepted accounting principles using
estimates and judgment, where required, and giving consideration to
materiality.
The company has endeavored to establish a control environment that encourages
the maintenance of high standards of conduct in all of its business
activities. The company maintains a system of internal controls over
financial reporting, which is designed to provide reasonable assurance to the
company's management and Board of Trustees regarding the preparation of
reliable published financial statements. The system is supported by an
organization of trained management personnel, policies and procedures, and a
comprehensive program of internal audits. Through established programs, the
company regularly communicates to its management employees their internal
control responsibilities and policies prohibiting conflicts of interest.
The Audit Committee of the Board of Trustees is composed entirely of outside
trustees. This committee meets periodically with management, the internal
auditors, and the independent auditors to review the activities of each and
to discuss audit matters, financial reporting, and the adequacy of internal
controls.
Because of inherent limitations in any system of internal controls, errors or
irregularities may occur and not be detected. The company believes, however,
that its system of internal accounting controls and control environment
provide reasonable assurance that its assets are safeguarded from loss or
unauthorized use and that is financial records, which are the basis for the
preparation of all financial statements, are reliable.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF NORTHEAST UTILITIES:
We have audited the accompanying consolidated balance sheets and consolidated
statements of capitalization of Northeast Utilities (a Massachusetts trust)
and subsidiaries as of December 31, 1993 and 1992, and the related
consolidated statements of income, common shareholders' equity, cash flows,
and income taxes for each of the three years in the period ended December 31,
1993. These financial statements are the responsibility of the company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material aspects, the financial position of Northeast Utilities and
subsidiaries as of December 31, 1993 and 1992, and the results of their
operations and cash flows for each of the three years in the period ended
December 31, 1993, in conformity with generally accepted accounting
principles.
As explained in <F6> Note 1 to the financial statements, "Summary of
Significant Accounting Policies-Accounting Changes," effective January 1,
1993, Northeast Utilities and subsidiaries changed their methods of
accounting for property taxes, postretirement benefits other than pensions,
income taxes, and employee stock ownership plans.
/S/ ARTHUR ANDERSEN & CO.
ARTHUR ANDERSEN & CO.
Hartford, Connecticut
February 18, 1994
<PAGE>26
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME
<CAPTION>
For the Years Ended December 31, 1993 1992
1991
---- ----
----
(Thousands of Dollars,except
share information)
<S> <C> <C>
<C>
OPERATING REVENUES ...................................$ 3,629,093 $ 3,216,874
$ 2,753,803
----------- -----------
-----------
OPERATING EXPENSES:
Operation--
Fuel, purchased and net interchange power........... 917,957 772,804
674,096
Other............................................... 979,403 828,345
763,610
Maintenance.......................................... 265,926 274,495
230,166
Depreciation......................................... 321,359 282,738
238,575
Amortization of regulatory assets, net............... 208,506 150,413
80,643
Federal and state income taxes (See Consolidated
Statements Of Income Taxes)<F6>(Note 1).............. 243,854 246,227
190,556
Taxes other than income taxes ....................... 240,413 221,422
186,645
----------- -----------
-----------
Total operating expenses............................ 3,177,418 2,776,444
2,364,291
----------- -----------
-----------
OPERATING INCOME...................................... 451,675 440,430
389,512
----------- -----------
-----------
OTHER INCOME:
Deferred nuclear plants return--other funds.......... 38,373 45,299
39,477
Equity in earnings of regional nuclear generating
and transmission companies........................ 12,980 15,357
14,431
Other, net........................................... 4,747 15,672
11,712
Income taxes--credit ................................ 29,948 36,787
14,873
----------- -----------
-----------
Other income, net .................................. 86,048 113,115
80,493
----------- -----------
-----------
Income before interest charges...................... 537,723 553,545
470,005
----------- -----------
-----------
INTEREST CHARGES:
Interest on long-term debt........................... 333,163 275,819
205,585
Other interest ...................................... 13,059 3,503
4,145
Deferred nuclear plants return--
borrowed funds <F6>(Note 1)......................... (54,462) (28,838)
(19,023)
----------- ---------
----------
Interest charges, net .............................. 291,760 250,484
190,707
-----------
- ---------- -----------
Income before cumulative effect of accounting change 245,963 303,061
279,298
CUMULATIVE EFFECT OF ACCOUNTING CHANGE <F6>(Note 1) .. 51,681 --
--
----------- -----------
-----------
Income before preferred dividends of subsidiaries 297,644 303,061
279,298
PREFERRED DIVIDENDS OF SUBSIDIARIES .................. 47,691 47,007
42,589
----------- -----------
-----------
NET INCOME ........................................... 249,953 256,054
236,709
Tax benefit of Employee Stock Ownership
Plan dividends <F12>(Note 7)........................ -- 7,348
--
----------- -----------
-----------
EARNINGS FOR COMMON SHARES ........................... $ 249,953 $ 263,402
$ 236,709
=========== ===========
===========
EARNINGS PER COMMON SHARE:
Before cumulative effect of accounting change ........ $ 1.60 $ 2.02
$ 2.12
Cumulative effect of accounting change <F6>(Note 1) .. .42 --
--
-----------
- ----------- -------------
TOTAL EARNINGS PER COMMON SHARE....................... $ 2.02 $ 2.02
$2.12
============
============= =============
COMMON SHARES OUTSTANDING (AVERAGE) <F12>(Note 7) .... 123,947,631 130,403,488
111,453,550
============
============= =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>27
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
For the Years Ended December 31, 1993 1992
1991
---- ----
----
(Thousands of
Dollars)
<S> <C> <C>
<C>
CASH FLOWS FROM OPERATIONS:
Income before preferred dividends of subsidiaries.......... $ 297,644 $
303,061 $ 279,298
Adjusted for the following:
Depreciation.............................................. 331,382
298,528 245,853
Deferred income taxes and investment tax credits, net..... 63,506
103,089 109,820
Deferred nuclear plants return, net of amortization ...... 18,189
(3,619) 4,687
Deferred energy costs, net of amortization ............... 90,063
(52,298) (128,047)
Amortization of regulatory asset--PSNH ................... 89,822
51,836 --
Deferred conservation and load-management,
net of amortization..................................... (23,955)
(31,989) (47,402)
Other sources of cash .................................... 141,766
111,036 60,530
Other uses of cash........................................ (32,694)
(94,192) (34,771)
Changes in working capital:
Receivables and accrued utility revenues................... 2,797
3,162 (57,289)
Fuel, materials, and supplies.............................. 10,126
(9,686) 33,191
Accounts payable........................................... (678)
(38,889) 83,891
Accrued taxes ............................................. (97,789)
(8,627) (46,208)
Other working capital (excludes cash) ..................... 30,010
30,109 29,369
----------
- ---------- ----------
Net cash flows from operations.............................. 920,189
661,521 532,922
----------
- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Common shares.............................................. 22,252
271,128 42,420
Long-term debt............................................. 924,650
1,141,995 197,207
Preferred stock............................................ 80,000
75,000 --
Financing expenses ........................................ (5,868)
(16,234) (2,067)
Net increase (decrease) in short-term debt ................ (179,240)
182,240 (125,615)
Reacquisitions and retirements of long-term debt........... (1,051,501)
(744,771) (112,990)
Reacquisitions and retirements of preferred stock ......... (116,496)
(106,893) (6,498)
Cash dividends on preferred stock.......................... (47,691)
(49,399) (42,589)
Cash dividends on common shares............................ (218,179)
(229,074) (195,056)
----------
- ---------- ----------
Net cash flows from (used for) financing activities......... (592,073)
523,992 (245,188)
----------
- ---------- ----------
INVESTMENT ACTIVITIES:
Investment in plant:
Electric and other utility plant.......................... (275,741)
(311,892) (237,416)
Nuclear fuel.............................................. (33,202)
3,498 (5,097)
----------
- ---------- ----------
Net cash flows used for investments in plant............... (308,943)
(308,394) (242,513)
Acquisition of the net assets of PSNH <F6>(Note 1)......... --
(828,237) --
Other investment activities, net........................... (32,811)
(40,507) (24,252)
----------
- ---------- ----------
Net cash flows used for investments ........................
(341,754)(1,177,138) (266,765)
----------
- ---------- ----------
NET INCREASE (DECREASE) IN CASH FOR THE PERIOD.............. (13,638)
8,375 20,969
Cash and special deposits--beginning of period.............. 45,646
37,271 16,302
----------
- ---------- ----------
Cash and special deposits--end of period ................. $ 32,008 $
45,646 $ 37,271
==========
========== ==========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the year for:
Interest, net of amounts capitalized during construction ..$ 325,552 $
218,515 $ 201,021
==========
========== ===========
Income taxes...............................................$ 142,669 $
96,821 $ 116,334
==========
========== ===========
Increase in obligations:
Niantic Bay Fuel Trust.....................................$ 49,509 $
38,172 $ 18,156
==========
========== ===========
Capital leases.............................................$ 4,696 $
2,985 $ 11,107
==========
========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>28
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME TAXES
<CAPTION>
For the Years Ended December 31, 1993
1992 1991
<F6>(Note
1)
--------
- -------- --------
(Thousands of Dollars)
<S> <C>
<C> <C>
The components of the federal and state income tax provisions
charged to operations are:
Current income taxes:
Federal.............................................................$ 99,591
$ 74,768 $ 44,417
State............................................................... 50,809
31,583 21,446
---------
- --------- ---------
Total current ...................................................... 150,400
106,351 65,863
---------
- --------- ---------
Deferred income taxes, net:
Federal............................................................. 87,105
101,025 88,659
State............................................................... (10,058)
12,550 28,007
---------
- --------- ---------
Total deferred..................................................... 77,047
113,575 116,666
---------
- --------- ---------
Investment tax credits, net.......................................... (13,541)
(8,182) (7,869)
---------
- --------- ---------
Total income tax expense..............................................$ 213,906
$211,744 $174,660
=========
========= =========
The components of total income tax expense are classified as follows:
Income taxes charged to operating expenses ..........................$ 243,854
$246,227 $190,556
Income taxes associated with the amortization of
deferred nuclear plants return--borrowed funds...................... --
(17,566) (15,208)
Income taxes associated with the allowance
for funds used during construction (AFUDC)
and deferred nuclear plants return--borrowed funds ................. --
19,870 14,185
Other income taxes--credit .......................................... (29,948)
(36,787) (14,873)
---------
- --------- ---------
Total income tax expense..............................................$ 213,906
$211,744 $174,660
=========
========= =========
Deferred income taxes are comprised of the tax effects
of temporary differences as follows:
Depreciation, leased nuclear fuel, settlement credits,
and disposal costs..................................................$ 79,288
$ 66,683 $ 55,275
Energy adjustment clauses ........................................... (39,660)
22,484 48,892
Conservation and load management .................................... 8,117
13,635 22,175
Alternative minimum tax ............................................. 2,306
(13,462) --
Early retirement program ............................................ (7,715)
220 (11,612)
Organization costs................................................... --
10,042 (2,231)
Deferred tax asset associated with net operating losses.............. 25,438
9,335 --
Other................................................................ 9,273
4,638 4,167
---------
- -------- ---------
Deferred income taxes, net............................................$ 77,047
$113,575 $116,666
=========
========= =========
A reconciliation between income tax expense and the expected tax expense
at the applicable statutory rates is as follows:
Expected federal income tax at 35 percent of pretax income for
1993 and at 34 percent for 1992 and 1991............................$ 179,043
$175,033 $154,346
Tax effect of differences:
Depreciation differences............................................ 21,319
14,090 9,203
Deferred nuclear plants return--other funds ........................ (13,486)
(15,402) (13,422)
Amortization of deferred Millstone 3 return--other funds............ 21,988
17,367 15,793
Amortization of regulatory asset--PSNH ............................. 23,764
17,624 --
Seabrook intercompany loss ......................................... (19,176)
(11,903) --
Investment tax credit amortization.................................. (13,541)
(8,182) (7,869)
State income taxes, net of federal benefit.......................... 26,488
29,130 32,814
Property tax differences ........................................... (13,514)
(901) 502
Other, net.......................................................... 1,021
(5,112) (16,707)
---------
- --------- ---------
Total income tax expense..............................................$ 213,906
$211,744 $174,660
=========
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>29
<TABLE>
CONSOLIDATED BALANCE SHEETS
<CAPTION>
At December 31, 1993
1992
----
----
(Thousands of
Dollars)
<S> <C>
<C>
ASSETS
UTILITY PLANT, AT ORIGINAL COST:
Electric................................................ $ 9,119,285 $
8,951,305
Other................................................... 146,228
132,755
-----------
- -----------
9,265,513
9,084,060
Less: Accumulated provision for depreciation............. 3,021,987
2,749,034
-----------
- -----------
6,243,526
6,335,026
Construction work in progress ........................... 208,084
164,374
Nuclear fuel, net........................................ 218,051
220,252
-----------
- -----------
Total net utility plant.............................. 6,669,661
6,719,652
-----------
- -----------
OTHER PROPERTY AND INVESTMENTS:
Nuclear decommissioning trusts, at cost.................. 206,179
170,058
Investments in regional nuclear generating
companies, at equity.................................... 81,029
80,619
Investments in transmission companies, at equity......... 26,536
27,655
Other, at cost........................................... 36,882
39,483
-----------
- -----------
350,626
317,815
-----------
- -----------
CURRENT ASSETS:
Cash and special deposits <F6>(Note 1) .................. 32,008
45,646
Receivables, less accumulated provision for uncollectible
accounts of $14,629,000 in 1993 and $13,255,000 in 1992. 357,449
370,834
Accrued utility revenues ................................ 150,794
140,206
Fuel, materials, and supplies, at average cost .......... 194,968
205,094
Recoverable energy costs, net--current portion <F6>(Note 1) 667
75,539
Prepayments and other.................................... 34,611
26,009
-----------
- -----------
770,497
863,328
-----------
- -----------
DEFERRED CHARGES:
Regulatory asset--income taxes, net <F6>(Note 1) ....... 1,183,716
--
Regulatory asset--PSNH <F6>(Note 1) .................... 769,498
868,716
Deferred costs--nuclear plants <F6>(Note 1)............. 294,004
253,212
Unrecovered contract obligation--YAEC <F9>(Note 3)...... 132,826
154,879
Recoverable energy costs, net <F6>(Note 1).............. 148,789
164,598
Deferred conservation and load-management costs......... 111,442
87,487
Deferred DOE assessment <F6>(Note 1).................... 53,476
56,715
Amortizable property investments........................ 34,229
47,921
Unamortized debt expense ............................... 37,444
44,874
Other................................................... 111,956
145,143
-----------
- -----------
2,877,380
1,823,545
-----------
- -----------
TOTAL ASSETS.............................................. $10,668,164 $
9,724,340
===========
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>30
<TABLE>
<CAPTION>
At December 31, 1993
1992
----
- ----
(Thousands of
Dollars)
<S> <C>
<C>
CAPITALIZATION AND LIABILITIES
CAPITALIZATION: (See Consolidated Statements of Capitalization)
Common shareholders' equity (See Note <F4>(a)-Consolidated
Statements Of Common Shareholders' Equity):
Common shares, $5 par value-authorized 225,000,000 shares;
134,207,025 shares issued and 124,326,836 shares outstanding
in 1993 and 133,862,919 shares issued and outstanding in 1992 ..$ 671,035
$ 669,315
Capital surplus, paid in........................................ 901,740
897,317
Deferred benefit plan--employee stock ownership plan <F12>(Note 7) (228,205)
(240,399)
Retained earnings............................................... 879,518
847,744
-----------
-----------
Total common shareholders' equity ........................... 2,224,088
2,173,977
Preferred stock not subject to mandatory redemption............. 239,700
304,696
Preferred stock subject to mandatory redemption................. 380,500
349,500
Long-term debt.................................................. 4,045,468
4,316,678
-----------
-----------
Total capitalization......................................... 6,889,756
7,144,851
-----------
-----------
OBLIGATIONS UNDER CAPITAL LEASES................................ 171,004
188,094
-----------
-----------
CURRENT LIABILITIES:
Notes payable to banks ........................................ 173,500
220,000
Commercial paper .............................................. --
132,740
Long-term debt and preferred stock--current portion............ 420,142
276,741
Obligations under capital leases--current portion ............. 72,756
78,006
Accounts payable............................................... 229,118
229,796
Accrued taxes ................................................. 40,501
138,290
Accrued interest............................................... 69,682
72,749
Accrued pension benefits....................................... 82,513
53,340
Other.......................................................... 83,853
71,514
-----------
-----------
1,172,065
1,273,176
-----------
-----------
DEFERRED CREDITS:
Accumulated deferred income taxes <F6>(Note 1) ................ 1,911,981
567,353
Accumulated deferred investment tax credits.................... 201,635
215,255
Deferred contract obligation--YAEC <F9>(Note 3)................ 132,826
154,879
Deferred DOE obligation <F6>(Note 1)........................... 43,034
56,715
Other.......................................................... 145,863
124,017
-----------
-----------
2,435,339
1,118,219
-----------
-----------
COMMITMENTS AND CONTINGENCIES <F13>(Note 8)
TOTAL CAPITALIZATION AND LIABILITIES ........................... $10,668,164
$ 9,724,340
===========
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>31
<TABLE>
CONSOLIDATED STATEMENTS OF CAPITALIZATION
<CAPTION>
At December 31,
1993 1992
- ---- ----
(Thousands of Dollars)
<S> <C>
<C>
COMMON SHAREHOLDERS' EQUITY (See Consolidated Balance Sheets).............
$2,224,088 $2,173,977
- ---------- ----------
CUMULATIVE PREFERRED STOCK OF SUBSIDIARIES:
$25 par value--authorized 36,600,000 shares at December 31, 1993 and 1992;
outstanding 13,220,000 shares in 1993 and 15,280,000 shares in 1992
$50 par value--authorized 9,000,000 shares at December 31, 1993 and 1992;
outstanding 5,424,000 shares in 1993 and 5,123,925 shares in 1992
$100 par value--authorized 1,000,000 shares at December 31, 1993 and 1992;
outstanding 200,000 shares in 1993 and 1992
Current Redemption Current Shares
Dividend Rates Prices <F1>(a) Outstanding
-------------- ------------------ --------------
NOT SUBJECT TO MANDATORY REDEMPTION:
$25 par value--Adjustable Rate $ 25.00 4,140,000.....
103,500 103,500
$50 par value--$1.90 to $4.48 $ 50.50 to $ 54.00 2,324,000.....
116,200 181,196
$100 par value--$7.72 $103.51 200,000.....
20,000 20,000
- ---------- ----------
Total Preferred Stock Not Subject to Mandatory Redemption...............
239,700 304,696
- ---------- ----------
SUBJECT TO MANDATORY REDEMPTION: <F2>(b)
$25 par value--$1.90 to $2.65 $ 25.00 to $ 26.14 9,080,000.....
227,000 278,500
$50 par value--$2.65 to $3.615 $ 51.00 to $ 52.41 3,100 000.....
155,000 75,000
- ---------- ----------
Total Preferred Stock Subject to Mandatory Redemption...................
382,000 353,500
Less: Preferred Stock to be redeemed within one year....................
1,500 4,000
- ---------- ----------
Preferred Stock Subject to Mandatory Redemption, Net....................
380,500 349,500
- ---------- ----------
LONG-TERM DEBT: <F3>(c)
First Mortgage Bonds--
Maturity Interest Rate
-------- -------------
1993 4.25% to 8.50% ..........................................
-- 140,000
1994 4.25% to 4.50% ..........................................
182,000 182,000
1995 9.25%....................................................
34,650 94,400
1996 8.875%...................................................
172,500 172,500
1997 5.63% to 7.63%...........................................
265,000 265,000
1998 6.50% to 9.17%...........................................
290,000 290,000
1999-2003 5.75% to 9.05% ..........................................
1,065,000 885,000
2004-2008 8.75% to 9.375% .........................................
-- 220,000
2016-2019 7.38% to 10.13% .........................................
303,569 304,235
2023-2025 7.38% to 7.50% ..........................................
225,000 --
- ---------- ----------
Total First Mortgage Bonds ..........................................
2,537,719 2,553,135
- ---------- ----------
Other Long-Term Debt--
Pollution Control Notes and Other Notes--
1996 Adjustable Rate..........................................
235,000 329,000
1998 5.9% ....................................................
-- 7,650
2000-2004 15.23% and Adjustable Rate...............................
205,000 220,000
2005-2007 6.5% to 8.58% ...........................................
245,000 266,000
2013-2017 Adjustable Rate..........................................
23,400 379,500
2018-2022 7.17% to 7.65% and Adjustable Rate.......................
602,785 577,785
2028 Adjustable Rate..........................................
369,300 --
- ---------- ----------
Total Pollution Control Notes and Other Notes........................
1,680,485 1,779,935
Fees and interest due for spent fuel disposal costs....................
168,055 162,981
Other..................................................................
86,731 98,716
- ---------- ----------
Total Other Long-Term Debt...........................................
1,935,271 2,041,632
- ---------- ----------
Unamortized premium and discount, net .................................
(8,880) (5,348)
- ---------- ----------
Total Long-Term Debt..................................................
4,464,110 4,589,419
Less amounts due within one year......................................
418,642 272,741
- ---------- ----------
Long-Term Debt, Net ..................................................
4,045,468 4,316,678
- ---------- ----------
TOTAL CAPITALIZATION....................................................
$6,889,756 $7,144,851
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>32
<PAGE>
NOTES TO CONSOLIDATED STATEMENTS OF CAPITALIZATION
<F1> (a) Each of these series is subject to certain refunding limitations for
the first five years after they were issued. Redemption prices
reduce in future years.
<F2> (b) Changes in Preferred Stock Subject to Mandatory Redemption:
(Thousands of Dollars)
Balance at January 1, 1991 . . . . . . $176,892
Reacquisitions and Retirements . . . (6,498)
--------
Balance at December 31, 1991 . . . . . 170,394
Issues . . . . . . . . . . . . . . . 75,000
PSNH stock transferred . . . . . . . 125,000
Reacquisitions and Retirements . . . (16,894)
--------
Balance at December 31, 1992 . . . . . 353,500
Issues . . . . . . . . . . . . . . . 80,000
Reacquisitions and Retirements . . . (51,500)
--------
Balance at December 31, 1993 . . . . . $382,000
========
The minimum sinking-fund provisions of the series subject to mandatory
redemption aggregate approximately $1,500,000 in 1994, $5,300,000 in 1995
and 1996, $30,300,000 in 1997, and $34,000,000 in 1998. In case of
default on sinking-fund payments, no payments may be made on any junior
stock by way of dividends or otherwise (other than in shares of junior
stock) so long as the default continues. If a subsidiary is in arrears
in the payment of dividends on any outstanding shares of preferred stock,
the subsidiary would be prohibited from redemption or purchase of less
than all of the preferred stock outstanding.
<F3>(c) Long-term debt maturities and cash sinking-fund requirements,
excluding fees and interest due for spent fuel disposal costs, on debt
outstanding at December 31, 1993 for the years 1994 through 1998 are
approximately $293,800,000, $170,900,000, $265,100,000, $314,300,000,
and $329,700,000, respectively. Also, $125,000,000 of first mortgage
bonds outstanding at December 31, 1993 had been called in December 1993
for redemption in 1994. In addition, there are annual 1 percent sinking-
and improvement-fund requirements of approximately $17,100,000 for 1994,
$15,400,000 for 1995, $15,000,000 for 1996 and 1997, and $12,400,000 for
1998. Such sinking- and improvement-fund requirements may be satisfied
by the deposit of cash or bonds or by certification of property additions.
Essentially all utility plant of The Connecticut Light and Power Company
(CL&P), Public Service Company of New Hampshire (PSNH), Western
Massachusetts Electric Company (WMECO), and North Atlantic Energy
Corporation (NAEC), wholly owned subsidiaries of Northeast Utilities
(NU), is subject to the liens of their respective first mortgage bond
indentures. In addition, CL&P and WMECO have secured $369,300,000 of
pollution control notes with second mortgage liens on Millstone 1, junior
to the liens of their respective first mortgage bond indentures. PSNH's
two bank facilities, the Term Loan and the Revolving Credit Facility,
have a second lien, junior to the lien of its first mortgage bond
indenture, on all PSNH property located in New Hampshire. At December
31, 1993, the principal amount outstanding under the Term Loan was
$235,000,000. At December 31, 1993, there were no borrowings under the
Revolving Credit Facility.
The system companies have entered into interest-rate cap contracts to
reduce the potential impact of upward changes in interest rates on
certain variable-rate tax-exempt pollution control revenue bonds held by
CL&P, PSNH, and WMECO, as well as a portion of the PSNH Variable-Rate
Term Loan. Approximately $617,000,000 of total outstanding long-term
variable-rate debt is secured by these interest-rate caps. The total
cost of the interest-rate caps for 1993 was approximately $4,100,000, the
costs of which are amortized over the terms of the contracts, which are
from one to three years. The fair market value of outstanding interest-
rate cap contracts as of December 31, 1993 is approximately $605,000.
Concurrent with the issuance of PSNH's Series A and B First Mortgage
Bonds, PSNH entered into financing arrangements with the Industrial
Development Authority of the state of New Hampshire (IDA). Pursuant to
these arrangements, the IDA issued five series of Pollution Control
Revenue Bonds (PCRBs) and loaned the proceeds to PSNH. At December 31,
1993, $516,500,000 of the PCRBs were outstanding. PSNH's obligation to
repay each series of PCRBs is secured by a series of First Mortgage Bonds
that were issued under its indenture. Each such series of First Mortgage
Bonds contains terms and provisions with respect to maturity, principal
payment, interest rate, and redemption that correspond to those of the
applicable series of PCRBs; for financial reporting purposes, these bonds
would not be considered outstanding unless PSNH fails to meet its
obligations under the PCRBs.
Fees and interest due for spent fuel disposal costs are scheduled to be
paid to the United States Department of Energy just prior to the first
delivery of prior-period spent fuel, which is anticipated to be in 1998.
Until such payment is made, the outstanding balance will continue to
accrue interest at the three-month Treasury Bill Yield Rate. For
additional information, see <F6> Note 1 of the accompanying Notes To
Consolidated Financial Statements.
<PAGE>33
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF COMMON SHAREHOLDERS' EQUITY
<CAPTION>
Deferred
Benefit
Capital Plan-
Retained
Common Surplus, ESOP
Earnings
Shares<F4>(a) Paid In <F12>(Note 7)
<F5>(b) Total
------------ -------- --------
- ---------- -----
(Thousands of Dollars)
<S> <C> <C> <C> <C>
<C>
BALANCE AT JANUARY 1, 1991............ $ 548,080 $ 469,647 $ -- $
773,031 $ 1,790,758
Net income for 1991..................
236,709 236,709
Cash dividends on common shares--
$1.76 per share....................
(195,056) (195,056)
Issuance of 7,608,695 common shares,
$5 par value, to Employee Stock
Ownership Plan (ESOP) Trust....... 38,043 136,957 (175,000)
--
Issuance of 2,029,504 common shares,
$5 par value....................... 10,148 32,272
42,420
Capital stock expenses, net.......... 1,243
1,243
--------- --------- ----------
- -------- ----------
BALANCE AT DECEMBER 31, 1991.......... 596,271 640,119 (175,000)
814,684 1,876,074
Net income for 1992..................
256,054 256,054
Tax benefit of ESOP dividends .......
7,348 7,348
Cash dividends on common shares--
$1.76 per share....................
(229,074) (229,074)
Loss on retirement of
preferred stock....................
(1,268) (1,268)
Issuance of 11,417,305 common shares,
$5 par value....................... 57,087 204,440
261,527
Issuance of 3,191,489 common shares,
$5 par value, to ESOP Trust........ 15,957 59,043 (75,000)
--
Allocation of benefits--ESOP......... 9,601
9,601
Capital stock expenses, net.......... (6,285)
(6,285)
--------- --------- ----------
- -------- ----------
BALANCE AT DECEMBER 31, 1992 ......... 669,315 897,317 (240,399)
847,744 2,173,977
Net income for 1993.................
249,953 249,953
Cash dividends on common shares--
$1.76 per share...................
(218,179) (218,179)
Issuance of 344,106 common shares,
$5 par value...................... 1,720 6,538
8,258
Allocation of benefits--ESOP........ 1,800 12,194
13,994
Capital stock expenses, net......... (3,915)
(3,915)
--------- --------- ---------
- --------- ----------
BALANCE AT DECEMBER 31, 1993 ......... $ 671,035 $ 901,740 $(228,205)
$879,518 $ 2,224,088
========= ========= =========
========== ===========
<F4>(a) Northeast Utilities (NU), as part of its acquisition of Public Service
Company of New
Hampshire (PSNH), issued 8,430,910 warrants to former PSNH equity
security holders. Each
warrant, which will expire on June 5, 1997, entitles the holder to
purchase one share of NU
common at an exercise price of $24 per share. As of December 31, 1993,
455,394 shares had been
purchased through the exercise of warrants.
<F5>(b) Certain consolidated subsidiaries have dividend restrictions imposed by
their long-term debt
agreements. These restrictions also limit the amount of retained
earnings available for NU
common dividends. At December 31, 1993, these restrictions totaled
approximately $609.3
million.
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>34
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<F6>
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
Northeast Utilities (NU or the company) is the parent company of the
Northeast Utilities system (the system). The consolidated financial
statements of the company include the accounts of all wholly owned
subsidiaries. Significant intercompany transactions have been eliminated in
consolidation.
On June 5, 1992 (Acquisition Date), NU acquired Public Service Company of New
Hampshire (PSNH). As part of this transaction, PSNH transferred its 35.6
percent ownership interest in the Seabrook nuclear power plant to North
Atlantic Energy Corporation (NAEC). PSNH and NAEC are now both wholly owned
subsidiaries of NU. On June 29, 1992, North Atlantic Energy Service
Corporation (NAESCO), a wholly owned subsidiary of NU, began management of
the Seabrook 1 power plant as agent for the Seabrook joint owners. The
acquisition of PSNH has been accounted for, in accordance with generally
accepted accounting principles, as a purchase. Effective with the
Acquisition Date, the consolidated financial statements of the company
include, on a prospective basis, the financial position, the results of
operations, and the statements of cash flows for PSNH and NAEC. For the 12
months ended December 31, 1993, PSNH and NAEC increased NU's consolidated
operating revenues and earnings for common shares by $805.5 million and $65.0
million, respectively. For the 12 months ended December 31, 1992, PSNH and
NAEC increased NU's consolidated operating revenues and earnings for common
shares by $438.4 million and $34.6 million, respectively.
ACCOUNTING CHANGES
PROPERTY TAXES: Certain subsidiaries of NU, including The Connecticut Light
and Power Company (CL&P) and Western Massachusetts Electric Company (WMECO),
adopted a one-time change in the method of accounting for municipal property
tax expense for their Connecticut properties. Most municipalities in
Connecticut assess property values as of October 1. Prior to January 1,
1993, the NU system accrued Connecticut property tax expense over the period
October 1 through September 30 based on the lien-date method. In the first
quarter of 1993, these subsidiaries changed their method of accounting for
Connecticut municipal property taxes to recognize the expense from July 1
through June 30, to match the payments and the services provided by the
municipalities. This one-time change increased earnings for common shares
and earnings per common shares by approximately $51.7 million and $0.42,
respectively, in 1993.
INCOME TAXES: The company adopted the provisions of Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes (SFAS 109),"
effective January 1, 1993. For more information on this change, see <F6>
Note 1, "Summary of Significant Accounting Policies - Income Taxes."
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS: The company adopted the
provisions of Statement of Financial Accounting Standards No. 106,
"Employer's Accounting for Postretirement Benefits Other Than Pensions (SFAS
106)," effective January 1, 1993. For information on this change, see <F11>
Note 6, "Postretirement Benefits Other Than Pensions."
EMPLOYEE STOCK OWNERSHIP PLAN: The company adopted the provisions of
Statement of Position 93-6, "Employers' Accounting for Employee Stock
Ownership Plans (SOP 93-6)." For information on this change, see <F12>
Note 7, "Employee Stock Ownership Plan."
ACCOUNTING RECLASSIFICATIONS
Certain amounts in the accompanying consolidated financial statements of the
company for the year ended December 31, 1992 and December 31, 1991 have been
reclassified to conform with the December 31, 1993 presentation.
PUBLIC UTILITY REGULATION
NU is registered with the Securities and Exchange Commission (SEC) as holding
company under the Public Utility Holding Company Act of 1935 (1935 Act), and
it and its subsidiaries are subject to the provisions of the 1935 Act.
Arrangements among the system companies, outside agencies, and other
utilities covering interconnections, interchange of electric power, and sales
of utility property are subject to regulation by the Federal Energy
Regulatory Commission (FERC) and/or the SEC. The operating subsidiaries are
subject to further regulation for rates and other matters by the FERC and/or
applicable state regulatory commissions, and they follow the accounting
policies prescribed by the respective commissions.
REVENUES
Other than special contracts, utility revenues are based on authorized rates
applied to each customer's use of electricity. Rates can be changed only
through a formal proceeding before the appropriate regulatory commission. At
the end of each accounting period, CL&P, PSNH, and WMECO accrue an estimate
for the amount of energy delivered but unbilled.
<PAGE>35
SPENT NUCLEAR FUEL DISPOSAL COSTS
Under the Nuclear Waste Policy Act of 1982, CL&P, PSNH, WMECO, and NAEC must
pay the United States Department of Energy (DOE) for the disposal of spent
nuclear fuel and high-level radioactive waste. Fees for nuclear fuel burned
on or after April 7, 1983 are billed currently to customers and paid to the
DOE on a quarterly basis. For nuclear fuel used to generate electricity
prior to April 7, 1983 (prior-period fuel), payment may be made anytime prior
to the first delivery of spent fuel to the DOE. At December 31, 1993, fees
due to the DOE for the disposal of prior-period fuel were approximately
$168.1 million, including interest costs of $85.9 million. As of December
31, 1993, approximately $166.8 million had been collected through rates.
Under the Energy Policy Act of 1992 (Energy Act), CL&P, PSNH, WMECO, and NAEC
are assessed for their proportionate shares of the costs of decontaminating
and decommissioning uranium enrichment plants operated by the DOE (D&D
assessment). The Energy Act imposes an overall cap of $2.25 billion on the
obligation of the commercial power industry and limits the annual special
assessment to $150 million each year over a 15-year period beginning in 1993.
The Energy Act also requires that regulators treat D&D assessments as a
reasonable and necessary cost of fuel, to be fully recovered in rates, like
any other fuel cost. The cap and annual recovery amounts will be adjusted
annually for inflation. The D&D assessment is allocated among utilities
based upon services purchased in prior years. At December 31, 1993, the
system's remaining share of these costs is estimated to be approximately
$53.5 million. CL&P, PSNH, WMECO, and NAEC have begun to recover these
costs. Accordingly, NU has recognized these costs as a regulatory asset,
with a corresponding obligation, on its Consolidated Balance Sheets.
INVESTMENTS AND JOINTLY OWNED ELECTRIC UTILITY PLANT
REGIONAL NUCLEAR GENERATING COMPANIES: CL&P, PSNH, and WMECO own common
stock of four regional nuclear generating companies (Yankee companies). The
system holds a 49.0 percent ownership interest in Connecticut Yankee Atomic
Power Company (CY); a 38.5 percent ownership interest in Yankee Atomic
Electric Company (YAEC); a 20.0 percent ownership interest in Maine Yankee
Atomic Power Company (MY); and a 16.0 percent ownership interest in Vermont
Yankee Nuclear Power Corporation (VY). The system's investments in the
Yankee companies are accounted for on the equity basis. The electricity
produced by the facilities that are operating is committed to the
participants substantially on the basis of their ownership interests and is
billed pursuant to contractual agreements. For more information on these
agreements, see <F13> Note 8, "Commitments And Contingencies-Purchased Power
Arrangements."
The 173-megawatt (MW) YAEC nuclear power plant was shut down permanently on
February 26, 1992. For more information on the Yankee companies, see <F8>
Note 3, "Nuclear Decommissioning."
MILLSTONE 3: CL&P, PSNH, and WMECO have a 68.02 percent joint-ownership
interest in Millstone 3, a 1,149-MW nuclear generating unit. As of December
31, 1993, plant-in-service and the accumulated provision for depreciation
included approximately $2.4 billion and $460.6 million, respectively, for the
system's share of Millstone 3. The system's share of Millstone 3 expenses is
included in the corresponding operating expenses on the accompanying
Consolidated Statements Of Income.
SEABROOK: As of December 31, 1993, CL&P and NAEC have a 39.63 percent joint-
ownership interest in Seabrook 1, a 1,150-MW nuclear generating unit. NAEC
sells all of its share of the power generated by Seabrook 1 to PSNH under a
long-term contract. As of December 31, 1993, plant-in-service and the
accumulated provision for depreciation included approximately $877.3 million
and $66.4 million, respectively, for the system's share of Seabrook 1. The
system's share of Seabrook 1 expenses is included in the corresponding
operating expenses on the accompanying Consolidated Statements Of Income. In
February 1994, NAEC purchased a 0.4 percent share of Seabrook 1. See <F13>
Note 8, "Commitments and Contingencies-PSNH Rate Agreement" for additional
information.
HYDRO-QUEBEC: NU has a 22.66 percent equity-ownership interest,
approximating $26.5 million, in two companies that transmit electricity
imported from the Hydro-Quebec system in Canada. The two companies own and
operate transmission and terminal facilities, which have the capability of
importing up to 2,000 MW from the Hydro-Quebec system. See <F13> Note 8,
"Commitments and Contingencies-Hydro-Quebec" for additional information about
Hydro-Quebec.
REGULATORY ASSET - PSNH
The regulatory asset-PSNH represents the aggregate value placed by the rate
agreement with the state of New Hampshire (Rate Agreement) on PSNH's assets
in excess of the net book
<PAGE>36
value of PSNH's non-Seabrook assets and the $700- million value assigned to
Seabrook by the Rate Agreement. The regulatory asset-PSNH was valued at
approximately $920.6 million on the Acquisition Date. The Rate Agreement
provides for the recovery, through rates, of the amortization of the
regulatory asset-PSNH with a return each year on the unamortized portion of
the asset. The Rate Agreement provides that $425 million of the regulatory
asset-PSNH be amortized over the first seven years after PSNH's May 16, 1991
reorganization from bankruptcy (Reorganization Date), with the remaining
amount to be amortized over the 20-year period after the Reorganization Date.
In 1993, an adjustment related to certain liabilities associated with the
acquisition reduced the regulatory asset-PSNH by approximately $9.4 million.
At December 31, 1993, the balance of the regulatory asset-PSNH was $769.5
million.
DEPRECIATION
The provision for depreciation is calculated using the straight-line method
based on the estimated remaining lives of depreciable utility plant-in-
service, adjusted for salvage value and removal costs, as approved by the
appropriate regulatory agency. Except for major facilities, depreciation
factors are applied to the average plant-in-service during the period. Major
facilities are depreciated from the time they are placed in service. When
plant is retired from service, the original cost of plant, including costs of
removal, less salvage, is charged to the accumulated provision for
depreciation. For nuclear production plants, the costs of removal, less
salvage, that have been funded through external decommissioning trusts will
be paid with funds from the trusts and charged to the accumulated reserve for
decommissioning included in the accumulated provision for depreciation over
the expected service life of the plants. See <F8> Note 3, "Nuclear
Decommissioning," for additional information.
The depreciation rates for the several classes of electric plant-in-service
are equivalent to a composite rate of 3.6 percent in 1993, 3.5 percent in
1992, and 3.6 percent in 1991.
INCOME TAXES
The tax effect of temporary differences (differences between the periods in
which transactions affect income in the financial statements and the periods
in which they affect the determination of income subject to tax) is accounted
for in accordance with the ratemaking treatment of the applicable regulatory
commissions. See Consolidated Statements Of Income Taxes on page 29 for the
components of income tax expense.
In 1992, the Financial Accounting Standards Board (FASB) issued SFAS 109.
SFAS 109 supersedes previously issued income tax accounting standards. NU
adopted SFAS 109, on a prospective basis, during the first quarter of 1993.
At December 31, 1993, the net deferred tax obligation relating to the
adoption of SFAS 109 approximated $1.2 billion. A valuation reserve was not
established. As it is probable that the increase in deferred tax liabilities
will be recovered from customers through rates, NU also established a
regulatory asset. SFAS 109 does not permit net-of-tax accounting.
Accordingly, the company no longer utilizes net-of-tax accounting for the
deferred nuclear plants return-borrowed funds and allowance for funds used
during construction (AFUDC)--borrowed funds.
The temporary differences which give rise to the accumulated deferred tax
obligation at December 31, 1993, are as follows:
(Thousands of Dollars)
Accelerated depreciation and other
plant-related differences . . . . . . . . $1,472,509
Net operating loss carryforwards . . . . . . (270,612)
The tax effect of net regulatory assets. . . 555,342
Other. . . . . . . . . . . . . . . . . . . . 154,742
----------
$1,911,981
==========
At December 31, 1993, PSNH has a net operating loss (NOL) carryforward of
approximately $788 million, and an Alternative Minimum Tax (AMT) NOL
carryforward of $600 million, both to be used against PSNH's federal taxable
income and expiring between the years 1999 and 2007. PSNH also had
Investment Tax Credit (ITC) carryforwards of $66 million, which expire
between the years 1994 and 2005. The reorganization of PSNH under Chapter 11
of the United States Bankruptcy Code limits its ability to use its NOL and
ITC carryforwards so that some portion may expire unused. Of the
carryforward amounts indicated above, approximately $323 million of the NOL,
$274 million of the AMT NOL, and $35 million of the ITC carryforwards are
available for use subject to applicable limits of the Internal Revenue Code.
ENERGY ADJUSTMENT CLAUSES
CL&P: Retail electric rates include a fuel adjustment clause (FAC) under
which fossil-fuel prices above or below base-rate levels are charged or
credited to customers. Administrative proceedings are required each month to
approve the FAC
<PAGE>37
charges or credits proposed for the following month. Monthly FAC rates are
also subject to retroactive review and appropriate adjustments by the
Connecticut Department of Public Utility Control (DPUC) each quarter after
public hearings.
Beginning in 1979, the DPUC approved the use of a generation utilization
adjustment clause (GUAC), which defers the effect on fuel costs caused by
variations from specified composite nuclear generation capacity factors
embedded in base rates. Generally, at the end of a 12-month period ending
July 31 of each year, these deferrals are refunded to, or collected from,
customers over the subsequent 11-month period beginning in September. Should
the annual composite nuclear capacity factor fall below the 55 percent GUAC
floor, CL&P has to apply to the DPUC for permission to recover the additional
fuel expense associated with nuclear performance below 55 percent.
On January 5, 1994, the DPUC issued a decision which ordered CL&P to offset
GUAC deferred charges against prior fuel overrecoveries. This disallowance
resulted in a zero GUAC rate for the period September 1993 through August
1994. CL&P is considering an appeal of this decision.
The DPUC further ordered that any GUAC deferrals subsequent to July 1993 will
be offset by any fuel overrecoveries whenever the composite nuclear capacity
factor is below the level embedded in base rates. For the period August 1993
to December 1993, there have been no further adjustments necessary as a
result of the DPUC's decision.
The January 5, 1994 DPUC decision creates some uncertainty about the future
operation of the GUAC. CL&P has requested the DPUC to clarify the portion of
the decision related to future calculation of the GUAC rate. Management does
not expect the decision to have a material adverse impact on CL&P's future
results of operations.
PSNH: The Rate Agreement includes a comprehensive fuel and purchased power
adjustment clause (FPPAC) permitting PSNH to pass through to retail
customers, for a ten-year period, the retail portion of differences between
the fuel and purchase power costs assumed in the Rate Agreement and PSNH's
actual costs, which include the costs under the Seabrook Power Contract. The
cost components of the FPPAC are subject to a prudence review by the New
Hampshire Public Utilities Commission (NHPUC).
WMECO: In Massachusetts, all retail fuel costs are collected on a current
basis by means of a separate fuel-charge billing rate. As permitted by the
Massachusetts Department of Public Utilities (DPU), WMECO defers the
difference between forecasted and actual fuel cost recoveries until it is
recovered or refunded quarterly under a retail fuel adjustment clause.
Massachusetts law requires the establishment of an annual performance program
related to fuel procurement and use. The program establishes performance
standards for plants owned and operated by WMECO or plants in which WMECO has
a life-of-unit contract. Therefore, revenues collected under the WMECO
retail fuel adjustment clause are subject to refund pending review by the
DPU. To date, there have been no significant adjustments as a result of this
program.
For additional information, see <F13> Note 8, "Commitments And
Contingencies--Nuclear Performance."
PHASE-IN PLANS
As discussed below,the system's operating companies are phasing into rates
the recoverable portions of their investments in Millstone 3 and Seabrook 1.
All plans are in compliance with Statement of Financial Accounting Standards
No. 92, "Regulated Enterprises--Accounting for Phase-in Plans."
CL&P: As allowed by the DPUC, CL&P is phasing into rate base its allowed
investment in Millstone 3. The DPUC has provided for full deferred earnings
and carrying charges on the portion of CL&P's allowed investment in Millstone
3 not included in rate base. Through December 31, 1993, CL&P had placed into
rate base $1.58 billion, or 90 percent, of its allowed investment in
Millstone 3. The remaining $175.7 million, or 10 percent, is to be phased
into rate base annually in two 5-percent steps beginning January 1, 1994.
The amortization and recovery of deferrals through rates began January 1,
1988 and will end no later than December 31, 1995. As of December 31, 1993,
$349.6 million of the deferred return, including carrying charges, has been
recovered, and $161.9 million of the deferred return to date, plus carrying
charges, remains to be recovered.
As allowed by the DPUC, CL&P phased into rate base its allowed investment in
Seabrook 1. The DPUC provided for full deferred earnings and carrying
charges on the portion of CL&P's allowed investment in Seabrook 1 not
included in rate base. Through December 31, 1993, CL&P has placed into rate
base its full allowed investment in Seabrook 1. The amortization and
recovery of deferrals through rates began September 1, 1991 and will end no
later than August 31, 1996. As of December 31, 1993, $15.8 million of the
deferred return, including carrying
<PAGE>38
charges, has been recovered, and $24.0 million of the deferred return
recorded to date, plus carrying charges,remains to be recovered.
WMECO: As of December 31, 1991, all of WMECO's recoverable investment in
Millstone 3 was in rate base. Beginning in 1986, the DPU has permitted WMECO
to recover the portion of its Millstone 3 investment representing the amount
currently determined to be "unuseful" by the DPU ($23.6 million at December
31, 1993) over a ten-year period, without earning a return. On June 30,
1987, WMECO also began recovering the deferred return, including carrying
charges, on the recoverable but not yet phased-in portion of its investment
in Millstone 3. This recovery is taking place over a nine-year period. As
of December 31, 1993, $65.4 million of the deferred return, including
carrying charges, has been recovered, and $22.7 million of the deferred
return, including carrying charges, remains to be recovered over the period
ending June 30, 1995.
NAEC: As prescribed by the Rate Agreement, NAEC is phasing in its $700-
million initial investment in Seabrook 1 (Initial Investment). As of
December 31, 1993, the portion of the Initial Investment on which NAEC is
entitled to earn a cash return was 55 percent and will increase by 15 percent
in each of the next three years beginning May 15, 1994. Between the
Reorganization Date and the Acquisition Date, PSNH recorded $50.9 million of
deferred return on its investment in Seabrook 1. In accordance with the Rate
Agreement, PSNH transferred the $50.9 million deferred return balance to NAEC
along with the other Seabrook assets. NAEC recorded the $50.9 million as
part of utility plant. From the Acquisition Date through December 31, 1993,
NAEC recorded an additional $85.4 million of deferred return, which is
recorded in deferred costs--nuclear plants on the Consolidated Balance
Sheets. The deferred return on the excluded portion of the Initial
Investment, including the $50.9 million, will be recovered with carrying
charges beginning six months after the end of PSNH's fixed-rate period (which
continues through May 1997) and will be fully recovered by May 15, 2001.
CASH AND SPECIAL DEPOSITS
Cash and special deposits at December 31, 1992 included $25 million in
special deposits that was used to redeem $15 million of Holyoke Water Power
Company's (HWP) Pollution Control Notes and $10 million of CL&P's Pollution
Control Notes in 1993.
<F7>
2. LEASES
CL&P and WMECO have entered into the Niantic Bay Fuel Trust (NBFT) capital
lease agreement to finance up to $530 million of nuclear fuel for Millstone 1
and 2 and their share of the nuclear fuel for Millstone 3. CL&P and WMECO
make quarterly lease payments for the cost of nuclear fuel consumed in the
reactors (based on a units-of-production method at rates which reflect
estimated kilowatt-hours of energy provided) plus financing costs associated
with the fuel in the reactors. Upon permanent discharge from the reactors,
ownership of the nuclear fuel transfers to CL&P and WMECO.
The system companies have also entered into lease agreements, some of which
are capital leases, for the use of substation equipment, data processing and
office equipment, vehicles, nuclear control room simulators, and office
space. The provisions of these lease agreements generally provide for
renewal options.
Capital lease rental payments charged to operating expense were $105,623,000
in 1993, $81,376,000 in 1992, and $69,876,000 in 1991. Interest included in
capital lease rental payments was $16,525,000 in 1993, $20,581,000 in 1992,
and $22,677,000 in 1991. Operating lease rental payments charged to
operating expense were $22,630,000 in 1993, $27,451,000 in 1992, and
$23,571,000 in 1991.
Substantially all of the capital lease rental payments were made pursuant to
the nuclear fuel lease agreement. Future minimum lease payments under the
nuclear fuel capital lease cannot be reasonably estimated on an annual basis
due to variations in the usage of nuclear fuel.
Future minimum rental payments, excluding annual nuclear fuel lease payments
and executory costs, such as property taxes, state use taxes, insurance, and
maintenance, under the long-term noncancelable leases, as of December 31,
1993, are provided on the next page.
<PAGE>39
- -----------------------------------------------------------------------------
Capital Operating
Year Leases Leases
- -----------------------------------------------------------------------------
(Thousands of Dollars)
1994 ......................... $ 9,800 $ 23,800
1995 ......................... 9,400 21,900
1996 ......................... 8,500 19,100
1997 ......................... 7,800 17,800
1998 ......................... 7,700 9,900
After 1998 ................... 57,000 34,000
------- --------
Future minimum lease
payments ................... 100,200 $126,500
========
Less amount representing
interest ................... 49,800
-------
Present value of future
minimum lease payments
for other than nuclear fuel. 50,400
Present value of future nuclear
fuel lease payments ........ 193,400
--------
Total ................... $243,800
========
<F8>
3. NUCLEAR DECOMMISSIONING
The company's 1992 decommissioning study concluded that complete and
immediate dismantlement at retirement continues to be the most viable and
economic method of decommissioning the three Millstone units. A 1991
Seabrook decommissioning study also confirmed that complete and immediate
dismantlement at retirement is the most viable and economic method of
decommissioning Seabrook 1. Decommissioning studies are reviewed and updated
periodically to reflect changes in decommissioning requirements, technology,
and inflation.
The estimated cost of decommissioning Millstone 1 and 2, in year-end 1993
dollars, is $385.8 million and $309.9 million, respectively. The estimated
cost of decommissioning the system's ownership share of Millstone 3 and
Seabrook 1, in year-end 1993 dollars, is $286.6 million and $145.1 million,
respectively. Nuclear decommissioning costs are accrued over the expected
service life of the units and are included in depreciation expense on the
Consolidated Statements Of Income. Nuclear decommissioning costs amounted to
$29.4 million in 1993, $28.1 million in 1992, and $20.8 million in 1991.
Nuclear decommissioning, as a cost of removal, is included in the accumulated
provision for depreciation on the Consolidated Balance Sheets.
CL&P and WMECO have established independent decommissioning trusts for their
portions of the costs of decommissioning Millstone 1, 2, and 3. PSNH makes
payments to an independent decommissioning trust for its portion of the costs
of decommissioning Millstone 3. Under the terms of the Rate Agreement, PSNH
is obligated to pay NAEC's share of Seabrook's decommissioning costs, even if
the unit is shut down prior to the expiration of its operating license. CL&P's
and NAEC's portion of the cost of decommissioning Seabrook 1 is paid to an
independent decommissioning financing fund managed by the state of New
Hampshire.
As of December 31, 1993, CL&P and WMECO have collected, through rates, $148.3
million and $37.6 million, respectively, toward the future decommissioning costs
of their share of the Millstone units, of which $154.4 million has been
transferred to external decommissioning trusts. As of December 31, 1993, PSNH
has collected, through rates, approximately $1.2 million toward the future
decommissioning costs of its share of Millstone 3, which has been transferred
to an external decommissioning trust. As of December 31, 1993, CL&P and NAEC
(including pre-Acquisition Date payments made by PSNH) have paid approximately
$860,000 and $7.3 million, respectively, into Seabrook 1's decommissioning
financing fund. Earnings on the decommissioning trusts and financing fund
increase the decommissioning trust balance and the accumulated reserve for
decommissioning. At December 31, 1993, the balance in the accumulated reserve
for decommissioning amounted to $237.7 million.
Changes in requirements or technology, or adoption of a decommissioning method
other than immediate dismantlement, could change decommissioning cost estimates.
CL&P, PSNH, and WMECO attempt to recover sufficient amounts through their
allowed rates to cover their expected decommissioning costs. Only the portion
of currently estimated total decommissioning costs that has been accepted by
regulatory agencies is reflected in rates of the system companies. Although
allowances for decommissioning have increased significantly in recent years,
ratepayers in future years will need to increase their payments to offset the
effects of any insufficient rate recoveries in previous years.
CL&P, PSNH, and WMECO, along with other New England utilities, have equity
investments in the four Yankee companies. Each Yankee company owns a single
nuclear generating unit. The estimated costs, in year-end 1993 dollars, of
<PAGE>40
decommissioning the system's ownership share of CY and MY are $166.6 million and
$64.7 million, respectively. The cost to decommission VY is currently being
reestimated. The cost of decommissioning the system's ownership share of VY is
projected to range from $48 million to $56 million. As discussed in the
following paragraph, YAEC's owners voted to permanently shut down the YAEC unit
on February 26, 1992. Under the terms of the contracts with the Yankee
companies, the shareholders-sponsors are responsible for their proportionate
share of the operating costs of each unit, including decommissioning. The
nuclear decommissioning costs of the Yankee companies are included as part of
the cost of power by CL&P, PSNH, and WMECO.
YAEC has begun decommissioning its nuclear facility. On June 1, 1992, YAEC
filed a rate filing to obtain FERC authorization to collect the closing and
decommissioning costs and to recover the remaining investment in the YAEC
nuclear power plant over the remaining period of the plant's Nuclear Regulatory
Commission operating license. The bulk of these costs has been agreed to by the
YAEC joint owners and approved, as a settlement, by FERC. At December 31, 1993,
the estimated remaining costs amounted to $345.0 million, of which the NU
system's share was approximately $132.8 million. Management expects that CL&P,
PSNH, and WMECO will continue to be allowed to recover such FERC-approved costs
from their customers. Accordingly, NU has recognized these costs as regulatory
assets, with corresponding obligations, on its Consolidated Balance Sheets. The
system has a 38.5-percent equity investment, approximating $9.3 million, in
YAEC. The system had relied on YAEC for less that 1 percent of its capacity.
<F9>
4. SHORT-TERM DEBT
The system companies have various credit lines, totaling $485 million. NU,
CL&P, WMECO, HWP, Northeast Nuclear Energy Company (NNECO), and The Rocky
River Realty Company (RRR) have established a revolving-credit facility with
a group of 17 banks. Under this facility, the participating companies may
borrow up to an aggregate of $360 million. Individual borrowing limits are
$175 million for NU, $360 million for CL&P, $75 million for WMECO, $8 million
for HWP, $60 million for NNECO, and $25 million for RRR. The system
companies may borrow funds on a short-term revolving basis using either
fixed-rate loans or standby loans. Fixed rates are set using competitive
bidding. Standby-loan rates are based upon several alternative variable
rates. The system companies are obligated to pay a facility fee of 0.20
percent of each bank's total commitment under the three-year portion of the
facility, representing 75 percent of the total facility, plus 0.135 percent
of each bank's total commitment under the 364-day portion of the facility,
representing 25 percent of the total facility. At December 31, 1993, there
were $22.5 million in borrowings under the facility.
PSNH has credit lines totaling $125 million available through a revolving-
credit agreement with a group of 22 banks. PSNH may borrow funds on a short-
term revolving basis using either fixed-rate or standby loans. Fixed rates
are set using competitive bidding. Standby-loan rates are based upon several
alternative variable rates. PSNH is obligated to pay a facility fee of 0.25
percent per annum on the total commitment. At December 31, 1993, there were
no borrowings under the agreement.
Maturities of the system companies' short-term debt obligations were for
periods of three months or less.
The amount of short-term borrowings that may be incurred by the system
companies is subject to periodic approval by the SEC under the 1935 Act. In
addition, the charters of CL&P and WMECO contain provisions restricting the
amount of short-term borrowings. Under the SEC and/or charter restrictions,
NU, CL&P, PSNH, WMECO, and NAEC were authorized, as of January 1, 1993, to
incur short-term borrowings up to a maximum of $175 million, $375 million,
$125 million, $75 million, and $50 million, respectively.
<F10>
5. PENSION BENEFITS
The system's subsidiaries participate in a uniform noncontributory-defined
benefit retirement plan covering all regular system employees. Benefits are
based on years of service and employees' highest eligible compensation during
five consecutive years of employment. Total pension cost, part of which was
charged to utility plant, approximated $29,173,000 in 1993, $9,681,000 in
1992, and $29,517,000 in 1991. Pension costs for 1993 and 1991 include
approximately $27,718,000 and $19,831,000, respectively, related to work
force-reduction programs.
Currently, the subsidiaries fund annually an amount at least equal to that
which will satisfy the requirements of the Employee Retirement Income
Security Act and the Internal Revenue Code. Pension costs are determined
using market-related values of pension assets. Pension assets are invested
primarily in domestic and international equity securities and bonds.
<PAGE>41
The components of net pension cost are:
- -----------------------------------------------------------------------------
For the Years Ended
December 31, 1993 1992 1991
- -----------------------------------------------------------------------------
(Thousands of Dollars)
Service cost ................. $ 59,068 $ 32,662 $ 48,738
Interest cost ................ 81,456 78,092 71,041
Return on plan assets ........ (176,798) (83,371) (198,437)
Net amortization ............. 65,447 (17,702) 108,175
--------- -------- ---------
Net pension cost.............. $ 29,173 $ 9,681 $ 29,517
========= ======== =========
- -----------------------------------------------------------------------------
For calculating pension costs, the following assumptions were used:
- -----------------------------------------------------------------------------
For the Years Ended
December 31, 1993 1992 1991
- -----------------------------------------------------------------------------
Discount rate ................ 8.00% 8.41% 9.00%
Expected long-term rate
of return .................. 8.50 9.00 9.70
Compensation/progression
rate ....................... 5.00 6.56 7.50
- -----------------------------------------------------------------------------
The following table represents the plan's funded status reconciled to the
Consolidated Balance Sheets:
- -----------------------------------------------------------------------------
At December 31, 1993 1992
- -----------------------------------------------------------------------------
(Thousands of Dollars)
Accumulated benefit obligation,
including $817,421,000 of vested
benefits at December 31, 1993 and
$719,608,000 of vested benefits at
December 31, 1992 ................. $ 898,788 $ 764,432
========== ==========
Projected benefit obligation......... $1,141,271 $1,055,295
Less: Market value of
plan assets ....................... 1,340,249 1,226,468
---------- ----------
Market value in excess of projected
benefit obligation 198,978 171,173
Unrecognized transition amount ...... (16,735) (18,277)
Unrecognized prior service costs.... 10,287 8,658
Unrecognized net gain ............... (275,043) (214,894)
---------- ----------
Accrued pension liability ........... $ (82,513) $ (53,340)
========== ===========
- -----------------------------------------------------------------------------
The following actuarial assumptions were used in calculating the plan's year-
end funded status:
- -----------------------------------------------------------------------------
At December 31, 1993 1992
- -----------------------------------------------------------------------------
Discount rate .......................... 7.75% 8.00%
Compensation/progression rate .......... 4.75 5.00
- -----------------------------------------------------------------------------
The discount rate for 1993 was determined by analyzing the interest rates, as
of December 31, 1993, of long-term, high-quality corporate debt securities
having a duration comparable to the 13.8-year duration of the plan.
During 1993, NU's work force was reduced by approximately 7 percent through a
work force-reduction program that involved an early retirement program and
involuntary terminations. The cost of the program, which approximated $38
million, included pension, severance, and other benefits.
<F11>
6. POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
The system's subsidiaries provide certain health care benefits, primarily
medical and dental, and life insurance benefits through a benefit plan to
retired employees. These benefits are available for employees leaving the
system who are otherwise eligible to retire and have met specified service
requirements. Through December 31, 1992, the system recognized the cost of
these benefits as they were paid. In December 1990, the FASB issued SFAS
106. This new standard requires that the expected cost of postretirement
benefits, primarily health and life insurance benefits, must be charged to
expense during the years that eligible employees render service. Effective
January 1, 1993, the system adopted SFAS 106 on a prospective basis. Total
health care and life insurance cost, part of which was deferred or charged to
utility plant, approximated $50,140,000 in 1993, $15,557,000 in 1992, and
$10,815,000 in 1991.
On January 1, 1993, the accumulated postretirement benefit obligation (APBO)
represented the system's prior-service obligation upon the adoption of
SFAS 106. As allowed by SFAS 106, the system is amortizing its APBO of
approximately $338 million over a 20-year period. For current employees and
certain retirees, the total SFAS 106 benefit is limited to two times the 1993
health care costs. The SFAS 106 obligation has been calculated based on this
assumption.
<PAGE>42
During 1993, certain subsidiaries of NU began funding SFAS 106 postretirement
costs through external trusts. The subsidiaries are funding annually amounts
that have been rate recovered and which also are tax-deductible under the
Internal Revenue Code. The trust assets are invested primarily in equity
securities and bonds.
The following table represents the plan's funded status reconciled to the
Consolidated Balance Sheet at December 31, 1993:
- -----------------------------------------------------------------------------
(Thousands of Dollars)
Accumulated postretirement
benefit obligation of:
Retirees .......................... $(242,889)
Fully eligible active employees ... (540)
Active employees not eligible to
retire ............................ (67,955)
---------
Total accumulated postretirement
benefit obligation .................. (311,384)
Less: Market value of plan assets .... 12,642
---------
Accumulated postretirement benefit
obligation in excess of plan assets.. (298,742)
Unrecognized transition amount ........ 287,551
Unrecognized net gain ................. (5,150)
---------
Accrued postretirement benefit liability $ (16,341)
==========
- -----------------------------------------------------------------------------
The components of health care and life insurance costs for the year ended
December 31, 1993 are:
- -----------------------------------------------------------------------------
(Thousands of Dollars)
Service cost .......................... $ 9,175
Interest cost ......................... 25,330
Return on plan assets ................. (220)
Net amortization ...................... 15,855
-------
Net health care and life insurance costs $50,140
=======
- ----------------------------------------------------------------------------
For measurement purposes, an 11.1-percent annual rate of increase in the per
capita cost of covered health care benefits was assumed for 1993; the rate
was assumed to decrease to 5.4 percent for 2002. The effect of increasing
the assumed health care cost trend rates by one percentage point in each year
would increase the accumulated postretirement benefit obligation as of
December 31, 1993 by $22.6 million and the aggregate of the service and
interest cost components of net periodic postretirement benefit cost for the
year then ended by $2.3 million.
The weighted-average discount rate used in determining the accumulated
postretirement benefit obligation was 7.75 percent. The discount rate for
1993 was determined by analyzing the interest rates, as of December 31, 1993,
of long-term, high-quality corporate debt securities having a duration
comparable to that of the plan. The trust holding the plan assets is subject
to federal income taxes at a 35-percent tax rate. The expected long-term
rate of return on plan assets after estimated taxes was 5.00 percent for
health assets and 8.50 percent for life assets.
CL&P and WMECO have received approval from their respective regulators to
defer SFAS 106 postretirement costs. All deferred costs are expected to be
recovered within ten years. PSNH is currently recovering SFAS 106 costs.
<F12>
7. EMPLOYEE STOCK OWNERSHIP PLAN
During December 1991 and March 1992, NU issued a total of $250 million
principal amount of unsecured and amortizing notes. The proceeds of the
notes were loaned to the trustee of the Employee Stock Ownership Plan (ESOP)
in exchange for the ESOP's notes. The ESOP trustee used the proceeds to buy
approximately 10.8 million newly issued NU common shares from the company.
These shares are allocated to employees at the same rate as the principal and
interest on the ESOP notes is being paid. Pursuant to the ESOP trust
agreement, Northeast Utilities Service Company, a wholly owned subsidiary of
NU, directs the ESOP trustee as to the timing, amount, and source of
principal and interest payments on the ESOP notes. Beginning January 1,
1992, NU common shares held by the ESOP trust were allocated to employees
based upon participation in the system's 401(k) plan to a previously
established tax-credit-based employee stock ownership plan (tax credit plan)
using dividend reinvestment. Regular system employees of the company's
subsidiaries are eligible to participate in the 401(k) plan. The tax-credit
plan was merged into the 401(k) plan on March 9, 1992. For the 12-month
period ending December 31, 1993, the ESOP issued approximately 530,000 NU
common shares, with a cost of approximately $14.0 million to the 401(k) plan
and to the tax-credit plan. As of December 31, 1993, the total number of
allocated and unallocated ESOP shares is 899,284 and 9,880,189, respectively,
with a corresponding fair market value of approximately $234.7 million on
unallocated ESOP shares.
During 1993, NU made an additional contribution of approximately $7.6 million
to the ESOP trust. The ESOP trust used approximately $23.7 million in
dividends paid on NU common shares and the $7.6 million contribution from NU
to
<PAGE>43
meet the principal and interest payments on the ESOP notes. During the
12-month period ending December 31, 1993, the ESOP trust incurred
approximately $20.9 million in interest expense.
In November 1993, the American Institute of Certified Public Accountants
issued SOP 93-6. This SOP is effective as of January 1, 1994 and has
significantly changed the accounting for leveraged ESOP plans. This new
standard requires that (1) any income tax benefits associated with the ESOP
be offset directly against income tax expense, (2) dividends on allocated
ESOP shares be charged directly to retained earnings, (3) dividends on
unallocated ESOP shares be excluded from dividends for financial reporting
purposes and, (4) unallocated ESOP shares be excluded from the earnings-per-
common-share calculation.
In the fourth quarter of 1993, NU opted for early implementation of this SOP,
effective as of January 1, 1993. The adoption of SOP 93-6 did not have a
material impact on 1993 earnings per common share; however, 1993 earnings for
common shares decreased by approximately $19.9 million as a result of
adopting the SOP. Had the provisions of SOP 93-6 been applied to 1992
results of operations, the impact on earnings per common share would not have
been material; however, 1992 earnings for common shares would have decreased
by approximately $16.0 million.
<F13>
8. COMMITMENTS AND CONTINGENCIES
CONSTRUCTION PROGRAM
The construction program is subject to periodic review and revision. Actual
construction expenditures may vary from such estimates due to factors such as
revised load estimates, inflation, revised nuclear safety regulations,
delays, difficulties in the licensing process, the availability and cost of
capital, and the granting of timely and adequate rate relief by regulatory
commissions, as well as actions by other regulatory bodies.
The system companies currently forecast construction expenditures (including
AFUDC) of approximately $1.2 billion for the years 1994-1998, including
$267.5 million for 1994. In addition, the system companies estimate that
nuclear fuel requirements, including nuclear fuel financed through the NBFT,
will be $449.7 million for the years 1994-1998, including $98.4 million for
1994. See <F7> Note 2, "Leases," for additional information about the
financing of nuclear fuel.
NUCLEAR PERFORMANCE
Outages that occurred over the period October 1990 through February 1992 at
the Millstone nuclear units have been the subject of five ongoing prudence
reviews in Connecticut. CL&P has received final decisions on four of the
reviews. The Office of Consumer Counsel has appealed decisions favorable to
the company in two dockets. The exposure under these two dockets is
approximately $66 million. The DPUC has suspended a third docket, pending
the outcome of one of the appeals. The exposure under this docket is $26
million. The only remaining nuclear outage prudence docket before the DPUC
is the docket established to review the 1992 outage at Millstone 2 to replace
the steam generators. A decision is expected in late 1994. Management
believes that its actions with respect to these outages have been prudent,
and it does not expect the outcome of the prudence reviews to result in
material disallowances.
PSNH RATE AGREEMENT
The Rate Agreement provided the financial basis for PSNH's Plan of
Reorganization (the Plan). The Rate Agreement calls for seven successive 5.5
percent annual increases in PSNH's base rates for its charges to retail
customers (the Fixed-Rate Period). The first four increases were put into
effect on January 1, 1990, May 16, 1991, June 1, 1992, and June 1, 1993,
respectively. The remaining three increases are scheduled to be put into
effect annually beginning on June 1, 1994. PSNH's base rates, as adjusted to
reflect the 5.5 percent annual increases, are intended to recover assumed
increases in PSNH's costs and to provide PSNH with a reasonable cumulative
return on investment over the Fixed-Rate Period. As discussed in <F6>
Note 1, "Summary of Significant Accounting Policies--Energy Adjustment
Clauses-- PSNH," the FPPAC protects PSNH from changes in fuel and purchased
power costs. Although the Rate Agreement provides an unusually high degree
of certainty as to PSNH's future retail rates, it also entails a risk when
sales are lower than anticipated or if PSNH should experience unexpected
increases in its costs other than those for fuel and purchased power, since
PSNH has agreed that it will not seek additional rate relief during the
Fixed-Rate Period, except in limited circumstances. However, in order to
provide protection from significant variations from the costs assumed in base
rates over the Fixed-Rate Period, the Rate Agreement establishes a return on
equity (ROE) collar to prevent PSNH from earning a ROE in excess of an upper
limit or below a lower limit. To date, PSNH's ROE has been within the limits
of the ROE collar.
<PAGE>44
In January 1994, the NHPUC approved a Memorandum of Understanding (the
Memorandum) between PSNH, NAEC, Northeast Utilities Service Company, and the
Attorney General of the state of New Hampshire relating to certain issues
which had arisen under the Rate Agreement. The Memorandum addressed, among
other things, the tax legislation in New Hampshire, accounting treatments
resulting from adoption of SFAS No. 106 and SFAS No. 109, and recovery for
certain aspects of PSNH's settlement with the Vermont Electric Generation and
Transmission Cooperative, Inc. (VEG&T), including the purchase by NAEC of
VEG&T's 0.4 percent share of Seabrook. The Memorandum also provides for the
establishment of a regulatory liability attributable to significant NOL
carryforwards and establishes that such liability should be amortized over a
six-year period beginning on May 1, 1993.
ENVIRONMENTAL MATTERS
The system is subject to regulation by federal, state, and local authorities
with respect to air and water quality, handling and the disposal of toxic
substances and hazardous and solid wastes, and the handling and use of
chemical products. The system has an active environmental auditing program
to prevent, detect, and remedy noncompliance with environmental laws or
regulations and believes that it is in substantial compliance with current
environmental laws and regulations. Changing environmental requirements
could hinder the construction of new fossil-fuel generating units,
transmission and distribution lines, substations, and other facilities. The
cumulative long-term, economic cost impact of increasingly stringent
environmental requirements cannot be estimated. Changing environmental
requirements could also require extensive and costly modifications to the
system's existing hydro, nuclear, and fossil-fuel generating units, and
transmission and distribution systems, and could raise operating costs
significantly. As a result, the system may incur significant additional
environmental costs, greater than amounts included in cost of removal and
other reserves, in connection with the generation and transmission of
electricity and the storage, transportation, and disposal of by-products and
wastes. The system may also encounter significantly increased costs to
remedy the environmental effects of prior waste handling and disposal
activities.
The system has recorded a liability for what it believes is, based upon
information currently available, its estimated environmental remediation
costs for waste disposal sites for which the system's subsidiaries expect to
bear legal liability. To date, these costs have not been material with
respect to the earnings or financial position of the company. In most cases,
the extent of additional future environmental cleanup costs is not reasonably
estimable due to factors such as the unknown magnitude of possible
contamination, the appropriate remediation method, the possible effects of
future legislation and regulation, the possible effects of technological
changes related to future cleanup, and the difficulty of determining future
liability, if any, for the cleanup of sites at which a system company may be
determined to be legally liable by the federal or state environmental
agencies. In addition, the system cannot estimate the potential liability
for future claims that may be brought against it by private parties.
However, considering known facts and existing laws and regulatory practices,
management does not believe that such matters will have a material adverse
effect on the system's financial position or future results of operations.
At December 31, 1993, the liability recorded by the system for its estimated
environmental remediation costs, excluding any possible insurance recoveries
or recoveries from third parties, amounted to approximately $4 million.
However, in the event that it becomes necessary to effect environmental
remedies that are currently not considered probable, it is reasonably
possible that, based on information currently available and management
intent, that the upper limit of the system's environmental liability range
could increase to approximately $9 million.
NUCLEAR INSURANCE CONTINGENCIES
The Price-Anderson Act currently limits public liability from a single
incident at a nuclear power plant to $9.4 billion. The first $200 million of
liability would be provided by purchasing the maximum amount of commercially
available insurance. Additional coverage of up to a total of $8.8 billion
would be provided by an assessment of $75.5 million per incident, levied on
each of the 116 nuclear units that are currently subject to the Secondary
Financial Protection Program in the United States, subject to a maximum
assessment of $10 million per incident per nuclear unit in any year. In
addition, if the sum of all public liability claims and legal costs arising
from any nuclear incident exceeds the maximum amount of financial protection,
each reactor operator can be assessed an additional 5 percent, up to $3.8
million, or $437.9 million in total, for all 116 nuclear units. The maximum
assessment is to be adjusted at least every five years to reflect
inflationary changes. Based on the ownership interests in Millstone 1, 2,
and 3 and in Seabrook 1, the system's maximum liability would be $243.9
million per incident. In addition, through power purchase contracts with the
four
<PAGE>45
Yankee regional nuclear generating companies, the system would be responsible
for up to an additional $97.9 million per incident. Payments for the
system's ownership interest in nuclear generating facilities would be limited
to a maximum of $43.1 million per incident per year.
Insurance has been purchased from Nuclear Electric Insurance Limited (NEIL)
to cover: (1) certain extra costs incurred in obtaining replacement power
during prolonged accidental outages with respect to the system's ownership
interests in Millstone 1, 2, and 3, Seabrook 1, and CY, and PSNH's Seabrook
Power Contract with NAEC; and (2) the cost of repair, replacement, or
decontamination or premature decommissioning of utility property resulting
from insured occurrences with respect to the system's ownership interests in
Millstone 1, 2, and 3, Seabrook 1, CY, MY, and VY. All companies insured
with NEIL are subject to retroactive assessments if losses exceed the
accumulated funds available to NEIL. The maximum potential assessments
against the system with respect to losses arising during current policy years
are approximately $13.9 million under the replacement power policies and
$29.9 million under the property damage, decontamination, and decommissioning
policies. Although the system has purchased the limits of coverage currently
available from the conventional nuclear insurance pools, the cost of a
nuclear incident could exceed available insurance proceeds.
Insurance has been purchased from American Nuclear Insurers/Mutual Atomic
Energy Liability Underwriters, aggregating $200 million on an industry basis
for coverage of worker claims. All companies insured under this coverage are
subject to retrospective assessments of $3.2 million per reactor. The
maximum potential assessments against the system with respect to losses
arising during the current policy period are approximately $13.9 million.
FINANCING ARRANGEMENTS FOR THE REGIONAL NUCLEAR GENERATING COMPANIES
CL&P, PSNH, and WMECO believe that the regional nuclear generating companies
may require additional external financing in the next several years for
construction expenditures, nuclear fuel, possible refinancings, and other
purposes. Although the ways in which each regional nuclear generating
company will attempt to finance these expenditures have not been determined,
CL&P, PSNH, and WMECO may be asked to provide direct or indirect financial
support for one or more of these companies.
PURCHASED POWER ARRANGEMENTS
CL&P, PSNH, and WMECO purchase a portion of their electricity requirements
pursuant to long-term contracts with the Yankee companies. Under the terms
of their agreements, the companies pay their ownership shares (or entitlement
shares) of generating costs, which include depreciation, operation and
maintenance expenses, the estimated cost of decommissioning, and a return on
invested capital. These costs are recorded as purchased power expense and
recovered through the companies' rates. The total cost of purchases under
these contracts for the units that are operating amounted to $169.0 million
in 1993, $145.4 million in 1992, and $127.5 million in 1991. See <F6>
Note 1, "Summary of Significant Accounting Policies--Investments And Jointly
Owned Electric Utility Plant" and <F8> Note 3, "Nuclear Decommissioning" for
more information on the Yankee companies.
CL&P, PSNH, and WMECO have entered into various arrangements for the purchase
of capacity and energy from nonutility generators. Some of these
arrangements have terms from 10 to 30 years, and require the companies to
purchase the energy at specified prices. For the 12 months ended
December 31, 1993, 14 percent of NU system load requirements was met by
cogenerators and small-power producers. The total cost of purchases under
these arrangements amounted to $426.8 million in 1993, $323.8 million in
1992, and $241.4 million in 1991. These costs are eventually recovered
through the companies' rates.
In an effort to control cost and price increases from nonutility generators,
PSNH is in the process of attempting to negotiate contract buyouts with 13
nonutility generators. Settlement agreements have been reached with certain
nonutility generators and have been filed with the NHPUC for approval.
Negotiations continue with the remaining nonutility generators.
PSNH entered into a buy-back agreement to purchase the capacity and energy of
the New Hampshire Electric Cooperative, Inc. (NHEC) and to pay all of NHEC's
Seabrook costs for a ten-year period which began July 1, 1990. The total
cost of purchases under this agreement was $14.4 million in 1993, $13.8
million in 1992, and $11.6 million in 1991. Part of these costs is collected
currently though the FPPAC and part is deferred for future collection in
accordance with the Rate Agreement. In connection with the agreement, NHEC
agreed to continue as a firm-requirements customer of PSNH for 15 years.
<PAGE>46
The estimated annual cost of the system's significant purchase power
arrangements is provided below:
- -----------------------------------------------------------------------------
1994 1995 1996 1997 1998
- -----------------------------------------------------------------------------
(Millions of Dollars)
Yankee
Companies ............ $162.5 $169.0 $187.4 $172.2 $195.5
Nonutility
Generators ........... 463.2 477.4 491.9 502.7 514.2
NHEC ................. 14.6 15.2 16.2 24.4 32.4
- -----------------------------------------------------------------------------
HYDRO-QUEBEC
Along with other New England utilities, CL&P, PSNH, WMECO, and HWP entered
into agreements to support transmission and terminal facilities to import
electricity from the Hydro-Quebec system in Canada. CL&P, PSNH, WMECO, and
HWP, in the aggregate, are obligated to pay, over a 30-year period, their
proportionate share of the annual operation, maintenance, and capital costs
of these facilities, which are currently forecast to be $172.1 million for
the years 1994-1998, including $37.2 million for 1994.
GREAT BAY POWER CORPORATION
CL&P and The United Illuminating Company, an unaffiliated company, have
agreed to make certain advances up to $20 million to cover shortfalls in the
funding of the 12.13 percent ownership interest in Seabrook 1 of Great Bay
Power Corporation, an unaffiliated company. CL&P's share of this commitment
is limited to 60 percent of the advances, or $12 million. As of December 31,
1993, $1,047,000 of advances from CL&P were outstanding under this agreement.
PROPERTY TAXES
PSNH and CY have significant court appeals pending for property tax
assessments in the towns of Bow, New Hampshire, and Haddam, Connecticut,
respectively, concerning production plant. In each case, the central issue
is the fair market value of utility property. The company believes that
properly derived assessments that recognize the effect of rate regulation
will result in fair market values that approximate net book cost. This is
the assessment level that taxing authorities are predominantly using
throughout Connecticut, Massachusetts, and some of New Hampshire. However,
towns such as Bow and Haddam advocate a method that approximates reproduction
cost. The company estimates that, for the assessments in the towns where the
appeals are pending, the change to a reproduction cost-methodology could
result in property tax valuations approximately three times greater than
values approximating net book cost. Although PSNH and CY are currently
paying property taxes based on the higher assessments, to date, the higher
assessments have not had a material adverse effect on them or the company.
The company believes that assessment levels that approximate net book cost
accurately reflect the fair market value of regulated utility property.
However, because of uncertainties associated with the court appeals and the
potential impact of adverse court decisions on property tax assessment policy
in New Hampshire and Connecticut, the company cannot estimate the potential
effects of adverse court decisions on future results of operations or
financial condition. However, the company believes that, based upon past
regulatory practices, it would be allowed to recover any increased property
tax assessments prospectively beginning at the time new rates are
established.
<F14>
9. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used to estimate the fair value of
each of the following financial instruments:
CASH, SPECIAL DEPOSITS, AND NUCLEAR DECOMMISSIONING TRUSTS: The carrying
amounts approximate fair value.
PREFERRED STOCK AND LONG-TERM DEBT: The fair value of the system's fixed-
rate securities is based upon the quoted market price for those issues or
similar issues. Adjustable rate securities are assumed to have a fair value
equal to their carrying value.
<PAGE>47
The carrying amounts of the system's financial instruments and the estimated
fair values are as follows:
- -----------------------------------------------------------------------------
Carrying Fair
At December 31, 1993 Amount Value
- -----------------------------------------------------------------------------
(Thousands of Dollars)
Preferred stock not subject to
mandatory redemption ................. $ 239,700 $ 202,826
Preferred stock subject to
mandatory redemption ................. 382,000 407,990
Long-term debt --
First Mortgage Bonds ................. 2,537,719 2,632,983
Other long-term debt ................. 1,935,271 2,055,433
- -----------------------------------------------------------------------------
Carrying Fair
At December 31, 1992 Amount Value
- -----------------------------------------------------------------------------
(Thousands of Dollars)
Preferred stock not subject to
mandatory redemption ................. $ 304,696 $ 257,510
Preferred stock subject to
mandatory redemption ................. 353,500 378,730
Long-term debt --
First Mortgage Bonds ................. 2,553,135 2,675,251
Other long-term debt ................. 2,041,632 2,141,154
- -----------------------------------------------------------------------------
The fair values shown above have been reported to meet disclosure
requirements and do not purport to represent the amounts that those
obligations would be settled at.
In May 1993, the FASB issued Statement of Financial Accounting Standards No.
115, "Accounting for Certain Investments in Debt and Equity Securities
(SFAS 115)." SFAS 115 requires companies to disclose the classification of
investments in debt or equity securities based on management's intent and
ability to hold the security. SFAS 115 also requires disclosure of the
aggregate fair value, gross unrealized holding gains, gross unrealized
holding losses and amortized cost basis by major security type. Effective
January 1, 1994, the system will adopt SFAS 115 on a prospective basis. NU
anticipates that the adoption of SFAS 115 will not have a material impact on
future results of operations or financial position.
<PAGE>48
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF QUARTERLY FINANCIAL DATA (UNAUDITED)
<CAPTION>
QUARTER ENDED
1993 <F15>(a) March 31 June 30 September 30
December 31
-------- ------- ------------
- -----------
(Thousands of Dollars, except per share
data)
<S> <C> <C> <C>
<C>
Operating Revenues .............. $958,192 $853,769 $915,239
$901,893
======== ======== ========
========
Operating Income................. $125,079 $ 89,510 $l02,725
$134,361
======== ======== ========
========
Net Income....................... $112,447 $ 14,759 $ 46,421 $
76,326
======== ======== ========
========
Earnings Per Common Share ....... $ 0.91 $ 0.12 $ 0.37 $
0.62
======== ======== ========
========
1992 <F16>(b)
Operating Revenues .............. $762,730 $718,746 $847,873
$887,525
======== ======== ========
========
Operating Income................. $112,690 $104,291 $115,077
$108,372
======== ======== ========
========
Net Income ...................... $ 75,018 $ 64,426 $ 61,355 $
55,255
======== ======== ========
========
Earnings Per Common Share........ $ 0.63 $ 0.50 $ 0.47 $
0.43
======== ======== ========
========
</TABLE>
<TABLE>
CONSOLIDATED GENERAL OPERATING STATISTICS
<CAPTION>
1993 1992<F16>(b) 1991 1990 1989
---- ----------- ---- ---- ----
<S> <C> <C> <C> <C> <C>
System Capability-MW (c)<F17>.. 7,795.3 7,823.2 5,916.2 5,909.6
5,963.7
System Peak Demand-MW.......... 6,191.0 5,781.0 4,999.8 4,753.9
4,858.0
Nuclear Capacity-MW(c)<F17>.... 3,110.0 2,981.1 2,380.0 2,459.5
2,397.1
Nuclear Capacity Factor(%)(d)<F18> 80.8 63.7 50.6 69.4
68.6
Nuclear Contribution to Total
Energy Requirements (%) (c)<F17> 62.1 48.5 43.5 57.5
56.8
<F15>(a) Amounts have been restated from those previously reported due to the
adoption in the fourth
quarter of 1993 of a change in accounting for the company's ESOP,
effective January 1,1993.
<F16>(b) Effective with the June 5, 1992 acquisition of PSNH, the consolidated
financial and
statistical information of NU includes, on a prospective basis, the
operations of PSNH and
NAEC.
<F17>(c) Includes the system's entitlements in regional nuclear generating
companies, net of capacity
sales and purchases.
<F18>(d) Represents the average capacity factor for the nuclear units operated
by the NU system.
</TABLE>
<PAGE>49
<TABLE>
SELECTED CONSOLIDATED FINANCIAL DATA
<CAPTION>
1993 1992<F19>(a) 1991
1990
---- ------------ ----
----
(Thousands of Dollars, except percentages
and share data)
<S> <C> <C> <C>
<C>
BALANCE SHEET DATA:
Net Utility Plant--
Continuing Operations................ $ 6,669,661 $ 6,719,652 $ 5,257,567
$ 5,265,168
Discontinued Gas Plant .............. -- -- --
--
Total Assets ......................... 10,668,164 9,724,340 6,781,746
6,601,371
Total Capitalization <F20>(b)......... 7,309,898 7,421,592 5,138,426
4,965,859
Obligations Under Capital Leases <F20>(b) 243,760 266,100 279,729
319,548
INCOME DATA:
Continuing Operations:
Operating Revenues................... $ 3,629,093 $ 3,216,874 $ 2,753,803
$ 2,616,319
Net Income.......................<F21> 249,953(c) 256,054 236,709
211,007
Earnings per Common Share........<F21> $2.02(c) $2.02 $2.12
$1.94
Discontinued Gas Operations:
Operating Revenues................... $ -- $ -- $ --
$ --
Net Income........................... -- -- --
--
Earnings per Common Share ........... $ -- $ -- $ --
$ --
COMMON SHARE DATA:
Earnings per Share...............<F21> $2.02(c) $2.02 $2.12
$1.94
Dividends per Share ................. $1.76 $1.76 $1.76
$1.76
Payout Ratio (%)..................... 87.1 87.1 83.0
90.7
Number of Shares
Outstanding--Average............<F22> 123,947,631(d)130,403,488 111,453,550
109,003,818
Market Price--High................... $28 7/8 $26 3/4 $24 3/8
$22 5/8
Market Price--Low.................... $22 $22 1/2 $19
$17 7/8
Market Price--Closing Price
(end of year) ..................... $23 3/4 $26 l/2 $23 5/8
$20
Book Value per Share(end of year).... $17.89 $16.24 $15.73
$16.34
Rate of Return Earned on Average
Common Equity (%) ................. 11.4 12.7 13.0
12.0
Dividend Yield (end of year) (%) .... 7.4 6.6 7.4
8.8
Market-to-Book Ratio (end of year)... 1.3 1.6 1.5
1.2
Price-Earnings Ratio (end of year)... 11.8 13.1 11.1
10.3
CAPITALIZATION: <F20> (b)
Common Shareholders' Equity......... $ 2,224,088 $ 2,173,977 $ 1,876,074
$ l,790,758
Preferred Stock Not Subject
to Mandatory Redemption........... 239,700 304,696 394,695
394,695
Preferred Stock Subject to
Mandatory Redemption ............. 382,000 353,500 170,394
176,892
Long-Term Debt...................... 4,464,110 4,589,419 2,697,263
2,603,514
----------- ----------- -----------
-----------
Total Capitalization ............... $ 7,309,898 $ 7,421,592 $ 5,138,426
$ 4,965,859
=========== =========== ===========
===========
<F19>(a) Effective with the June 5, 1992 acquisition of PSNH, the consolidated
financial and
statistical information of NU includes, on a prospective basis, the
operations of PSNH and
NAEC.
<F20>(b) Includes portions due within one year.
<F21>(c) Includes the cumulative effect of change in accounting for municipal
property tax expense.
<F22>(d) Decease in the number of shares results from a change in accounting for
Employee Stock
Ownership Plan shares.
</TABLE>
<PAGE>50
<TABLE>
<CAPTION> 1989 1988 1987
1986
---- ---- ----
----
(Thousands of Dollars, except percentages
and share data)
<S> <C> <C> <C>
<C>
BALANCE SHEET DATA:
Net Utility Plant--
Continuing Operations................ $ 5,237,805 $ 5,267,629 $ 5,229,242
$ 5,120,812
Discontinued Gas Plant .............. -- 254,587 237,903
224,581
Total Assets ......................... 6,523,202 6,764,608 6,663,794
6,299,755
Total Capitalization <F20>(b)......... 4,954,083 5,123,504 4,956,080
4,743,914
Obligations Under Capital Leases <F20>(b) 341,246 410,352 432,714
441,183
INCOME DATA:
Continuing Operations:
Operating Revenues................... $ 2,473,571 $ 2,268,607 $ 2,038,554
$ 2,006,842
Net Income........................... 203,225 224,844 214,529
171,234
Earnings per Common Share............ $1.87 $2.07 $1.97
$1.58
Discontinued Gas Operations:
Operating Revenues................... $ 124,229 $ 200,243 $ 202,816
$ 203,814
Net Income........................... 5,858 9,078 14,616
10,705
Earnings per Common Share ........... $0.05 $0.08 $0.14
$0.10
COMMON SHARE DATA:
Earnings per Share................... $1.92 $2.15 $2.11
$1.68
Dividends per Share ................. $1.76 $1.76 $1.76
$1.68
Payout Ratio (%)..................... 91.7 81.9 83.4
100.0
Number of Shares
Outstanding--Average................ 108,669,106 108,669,106 108,669,106
108,352,517
Market Price--High................... $23 $23 1/8 $28
$28 1/4
Market Price--Low.................... $18 1/2 $18 1/4 $18
$17 3/8
Market Price--Closing Price
(end of year) ..................... $22 1/2 $19 7/8 $20
1/4 $24 1/4
Book Value per Share(end of year).... $16.13 $16.90 $16.53
$16.24
Rate of Return Earned on Average
Common Equity (%) ................. 11.8 13.0 12.8
10.4
Dividend Yield (end of year) (%) .... 7.8 8.9 8.7
6.9
Market-to-Book Ratio (end of year)... 1.4 1.2 1.2
1.5
Price-Earnings Ratio (end of year)... 11.7 9.2 9.6
14.4
CAPITALIZATION: <F20>(b)
Common Shareholders' Equity......... $ 1,752,395 $ 1,837,034 $ 1,796,293
$ l,765,090
Preferred Stock Not Subject
to Mandatory Redemption........... 394,695 344,695 291,195
291,195
Preferred Stock Subject to
Mandatory Redemption ............. 181,892 111,832 205,832
166,832
Long-Term Debt...................... 2,625,101 2,829,943 2,662,760
2,520,797
----------- ----------- -----------
-----------
Total Capitalization ............... $ 4,954,083 $ 5,123,504 $ 4,956,080
$ 4,743,914
=========== =========== ===========
===========
</TABLE>
<PAGE>51.1
<TABLE>
<CAPTION>
1985 1984
---- ----
(Thousands of Dollars, except percentages and share
data)
<S> <C> <C>
BALANCE SHEET DATA:
Net Utility Plant--
Continuing Operations................ $ 5,204,687 $ 4,650,428
Discontinued Gas Plant .............. 214,115 204,187
Total Assets ......................... 6,147,720 5,507,040
Total Capitalization ................. 4,681,995 4,319,404
Obligations Under Capital Leases<F20>(b) 440,587 392,593
INCOME DATA:
Continuing Operations:
Operating Revenues................... $ 1,969,225 $ 2,030,557
Net Income........................... 277,768 276,615
Earnings per Common Share............ $2.62 $2.73
Discontinued Gas Operations:
Operating Revenues................... $ 220,010 $ 224,430
Net Income........................... 10,773 12,323
Earnings per Common Share ........... $0.10 $0.12
COMMON SHARE DATA:
Earnings per Share................... $2.72 $2.85
Dividends per Share ................. $1.58 $1.48
Payout Ratio (%)..................... 58.1 51.9
Number of Shares
Outstanding--Average............... 106,221,131 101,398,235
Market Price--High.................. $18 3/4 $14 3/4
Market Price--Low.................... $13 3/4 $10 5/8
Market Price--Closing Price
(end of year) ..................... $17 3/4 $14 1/4
Book Value per Share(end of year).... $16.21 $15.07
Rate of Return Earned on Average
Common Equity (%) ................. 17.4 19.8
Dividend Yield (end of year) (%) .... 8.9 10.4
Market-to-Book Ratio (end of year)... 1.1 0.9
Price-Earnings Ratio (end of year)... 6.5 5.0
CAPITALIZATION: <F20>(b)
Common Shareholders' Equity......... $ 1,738,871 $ 1,575,705
Preferred Stock Not Subject
to Mandatory Redemption........... 291,195 291,195
Preferred Stock Subject to
Mandatory Redemption ............. 185,833 186,978
Long-Term Debt...................... 2,466,096 2,265,526
----------- -----------
Total Capitalization ............... $ 4,681,995 $ 4,319,404
=========== ===========
</TABLE>
<PAGE>51.2
<TABLE>
CONSOLIDATED ELECTRIC OPERATING STATISTICS
<CAPTION>
1993 1992<F23>(a) 1991
1990
---- ------------ ----
----
<S> <C> <C> <C>
<C>
SOURCE OF ELECTRIC ENERGY:
(kWh-millions) <F24>(b)
Nuclear--Steam........................ 22,965 15,520 11,062
17,724
Fossil--Steam......................... 7,676 6,784 6,179
6,829
Hydro--Conventional................... 1,140 1,076 994
1,174
Hydro--Pumped Storage................. 1,269 1,221 1,173
1,250
Internal Combustion................... 8 9 25
11
Energy Used for Pumping .............. (1,749) (1,671) (1,605)
(1,688)
------ ------ ------
------
Net Generation..................... 31,309 22,939 17,828
25,300
Purchased and Net Interchange......... 10,499 14,165 13,430
6,249
Company Use and Unaccounted for ...... (2,591) (2,028) (1,958)
(1,938)
------ ------ ------
------
Net Energy Sold.................... 39,217 35,076 29,300
29,611
====== ====== ======
======
REVENUE: (thousands)
Residential........................... $1,385,818 $1,213,140 $ 995,098
$ 938,032
Commercial............................ 1,043,125 943,832 828,117
788,478
Industrial............................ 649,876 554,587 419,003
410,125
Other Utilities ...................... 383,129 346,791 366,231
346,087
Streetlighting and Railroads.......... 45,480 43,296 38,656
37,195
Miscellaneous......................... 60,008 59,465 49,539
42,882
---------- ---------- ----------
----------
Total Electric ................... 3,567,436 3,161,111 2,696,644
2,562,799
Other................................. 61,657 55,763 57,159
53,520
---------- ---------- ----------
----------
Total............................. $3,629,093 $3,216,874 $2,753,803
$2,616,319
========== ========== ==========
==========
SALES: (kWh-millions)
Residential.......................... 11,988 10,839 9,518
9,500
Commercial........................... 10,304 9,608 8,900
8,981
Industrial........................... 7,572 6,593 5,208
5,448
Other Utilities ..................... 9,046 7,733 5,388
5,394
Streetlighting and Railroads......... 307 303 286
288
------ ------ ------
------
Total............................ 39,217 35,076 29,300
29,611
====== ====== ======
======
CUSTOMERS: (average)
Residential......................... 1,503,182 1,351,019 1,150,357
1,145,142
Commercial.......................... 155,487 132,680 102,867
102,900
Industrial.......................... 6,272 5,774 5,067
5,114
Other............................... 3,793 3,581 3,305
3,283
--------- --------- ---------
---------
Total............................ 1,668,734 1,493,054 1,261,596
1,256,439
========= ========= =========
=========
AVERAGE ANNUAL USE PER RESIDENTIAL
CUSTOMER (kWh)...................... 7,987 8,129 8,285
8,304
AVERAGE ANNUAL BILL PER RESIDENTIAL
CUSTOMER............................ $923.32 $909.80 $866.20
$819.94
AVERAGE REVENUE PER kWh:
Residential......................... 11.56 cents 11.19 cents 10.45cents
9.87 cents
Commercial.......................... 10.12 9.82 9.30
8.78
Industrial.......................... 8.58 8.41 8.05
7.53
<F23>(a) Effective with the June 5, 1992 acquisition of PSNH, the consolidated
financial and
statistical information of NU includes, on a prospective basis, the
operations of PSNH and
NAEC.
<F24>(b) Generated in system and regional nuclear generating plants.
</TABLE>
<PAGE>52
<TABLE>
<CAPTION>
1989 1988 1987
1986
---- ---- ----
----
<S> <C> <C> <C>
<C>
SOURCE OF ELECTRIC ENERGY:
(kWh-millions)<F24> (b)
Nuclear--Steam........................ 17,119 19,146 18,019
16,624
Fossil--Steam......................... 8,956 8,805 7,912
9,048
Hydro--Conventional................... 956 825 866
895
Hydro--Pumped Storage................. 1,194 1,111 973
950
Internal Combustion................... 77 84 39
33
Energy Used for Pumping .............. (1,629) (1,509) (1,322)
(1,293)
------ ------ ------
------
Net Generation..................... 26,673 28,462 26,487
26,257
Purchased and Net Interchange......... 5,178 2,456 2,585
3,328
Company Use and Unaccounted for ...... (2,304) (2,333) (2,082)
(2,050)
------ ------ ------
------
Net Energy Sold.................... 29,547 28,585 26,990
27,535
====== ====== ======
======
REVENUE: (thousands)
Residential........................... $ 898,471 $ 838,011 $ 780,866
$ 741,838
Commercial............................ 734,709 673,819 630,678
602,924
Industrial............................ 391,661 366,517 353,394
350,310
Other Utilities ...................... 301,045 227,653 203,642
234,222
Streetlighting and Railroads.......... 35,499 33,151 32,318
34,741
Miscellaneous......................... 64,282 82,169 (18,146)
(2,464)
---------- ---------- ----------
----------
Total Electric ................... 2,425,667 2,221,320 1,982,752
1,961,571
Other................................. 47,904 47,287 55,802
45,271
---------- ---------- ----------
----------
Total............................. $2,473,571 $2,268,607 $2,038,554
$2,006,842
========== ========== ==========
==========
SALES: (kWh-millions)
Residential.......................... 9,594 9,412 8,825
8,274
Commercial........................... 8,757 8,585 8,151
7,676
Industrial........................... 5,557 5,535 5,449
5,394
Other Utilities ..................... 5,351 4,771 4,284
5,883
Streetlighting and Railroads......... 288 282 281
308
------ ------ ------
------
Total............................ 29,547 28,585 26,990
27,535
====== ====== ======
======
CUSTOMERS: (average)
Residential......................... 1,134,588 1,117,356 1,091,539
1,063,998
Commercial.......................... 101,301 98,095 94,164
90,924
Industrial.......................... 5,090 5,063 5,084
5,102
Other............................... 3,277 3,222 3,120
3,096
--------- --------- ---------
---------
Total............................ 1,244,256 1,223,736 1,193,907
1,163,120
========= ========= =========
=========
AVERAGE ANNUAL USE PER RESIDENTIAL
CUSTOMER (kWh)...................... 8,460 8,418 8,061
7,746
AVERAGE ANNUAL BILL PER RESIDENTIAL
CUSTOMER............................ $792.28 $749.54 $713.24
$694.51
AVERAGE REVENUE PER kWh:
Residential......................... 9.36 cents 8.90 cents 8.85cents
8.97 cents
Commercial.......................... 8.39 7.85 7.74
7.85
Industrial.......................... 7.05 6.62 6.49
6.49
</TABLE>
<PAGE>53.1
<TABLE>
<CAPTION>
1985 1984
---- ----
<S> <C> <C>
SOURCE OF ELECTRIC ENERGY:
(kWh-millions) <F24>(b)
Nuclear--Steam........................ 11,453 13,711
Fossil--Steam......................... 8,325 9,065
Hydro--Conventional................... 726 840
Hydro--Pumped Storage................. 925 875
Internal Combustion................... 16 34
Energy Used for Pumping .............. (1,287) (1,199)
------ ------
Net Generation..................... 20,158 23,326
Purchased and Net Interchange......... 5,398 2,916
Company Use and Unaccounted for ...... (1,859) (1,793)
------ ------
Net Energy Sold.................... 23,697 24,449
====== ======
REVENUE: (thousands)
Residential........................... $ 750,076 $ 754,075
Commercial............................ 606,414 589,898
Industrial............................ 371,079 381,289
Other Utilities ...................... 165,071 216,227
Streetlighting and Railroads.......... 34,899 32,252
Miscellaneous......................... 9,698 29,340
---------- ----------
Total Electric ................... 1,937,237 2,003,081
Other................................. 31,988 27,476
---------- ----------
Total............................. $1,969,225 $2,030,557
========== ==========
SALES: (kWh-millions)
Residential.......................... 7,837 7,804
Commercial........................... 7,185 6,904
Industrial........................... 5,286 5,374
Other Utilities ..................... 3,094 4,113
Streetlighting and Railroads......... 295 254
------ ------
Total............................ 23,697 24,449
====== ======
CUSTOMERS: (average)
Residential......................... 1,041,254 1,021,871
Commercial.......................... 88,031 85,658
Industrial.......................... 5,087 5,022
Other............................... 3,067 3,025
--------- ---------
Total............................ 1,137,439 1,115,576
========= =========
AVERAGE ANNUAL USE PER RESIDENTIAL
CUSTOMER (kWh)...................... 7,492 7,596
AVERAGE ANNUAL BILL PER RESIDENTIAL
CUSTOMER............................ $717.06 $734.00
AVERAGE REVENUE PER kWh:
Residential......................... 9.57 cents 9.66 cents
Commercial.......................... 8.44 8.54
Industrial.......................... 7.02 7.10
</TABLE>
<PAGE>53.2
<PAGE>
SHAREHOLDER INFORMATION
SHAREHOLDERS
As of January 31, 1994, there were 144,741 common shareholders of
record of Northeast Utilities holding an aggregate of 134,207,604
common shares.
COMMON SHARE INFORMATION
The common shares of Northeast Utilities are listed on the New York Stock
Exchange. The ticker symbol is "NU," although it is frequently presented
as "Noeast Util" in various financial publications. The high and low sales
prices and dividends paid for the past two years, by quarters, are shown
below:
- -------------------------------------------------------
Quarterly
Dividend
Year Quarter High Low Per Share
- -------------------------------------------------------
1993 First $28 7/8 $25 1/2 $0.44
Second 28 3/4 25 1/4 0.44
Third 28 1/8 26 1/4 0.44
Fourth 27 3/8 22 0.44
1992 First $24 7/8 $22 1/2 $0.44
Second 24 3/4 22 3/4 0.44
Third 26 5/8 23 7/8 0.44
Fourth 26 3/4 24 7/8 0.44
- -------------------------------------------------------
DIVIDEND REINVESTMENT PLAN
The company has a Dividend Reinvestment Plan under which common shareholders
may use their dividends to purchase additional common shares.
Northeast Utilities Service Company, Shareholder Services, P.O. Box 5006,
Hartford, Connecticut 06102-5006, is the company's dividend-paying agent and
administers its Dividend Reinvestment Plan.
ANNUAL MEETING
The annual meeting of shareholders of Northeast Utilities will be held on
Tuesday, May 24, 1994, at 10 a.m., at La Renaissance, East Windsor,
Connecticut, which is located at Exit 44 (East Windsor) of Interstate 91.
TRANSFER AGENTS AND REGISTRARS
Northeast Utilities Service Company
Shareholder Services
P.O. Box 5006
Hartford, Connecticut 06102-5006
State Street Bank and Trust Company
Corporate Stock Transfer Department
P.O. Box 8200
Boston, Massachusetts 02266-8200
FORM 10-K
Northeast Utilities will provide shareholders a copy of its 1993
Annual Report to the Securities and Exchange Commission on Form
10-K, including the financial statements and schedules thereto,
without charge, upon receipt of a written request sent to:
Theresa H. Allsop
Assistant Secretary
Northeast Utilities
P.O. Box 270
Hartford, Connecticut 06141-0270
<PAGE>54
Exhibit 13.2
1993
ANNUAL REPORT
---------------------------------------
THE CONNECTICUT LIGHT AND POWER COMPANY
---------------------------------------
1993 Annual Report
The Connecticut Light and Power Company
Index
Contents Page
- -------- ----
Balance Sheets. . . . . . . . . . . . . . . . . . . . . . 1-2
Statements of Income. . . . . . . . . . . . . . . . . . . 3
Statements of Cash Flows. . . . . . . . . . . . . . . . . 4
Statements of Common Stockholder's Equity . . . . . . . . 5
Notes to Financial Statements . . . . . . . . . . . . . . 6-30
Report of Independent Public Accountants. . . . . . . . . 31
Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . 32-39
Selected Financial Data . . . . . . . . . . . . . . . . . 40
Statements of Quarterly Financial Data. . . . . . . . . . 40
Statistics. . . . . . . . . . . . . . . . . . . . . . . . 41
Preferred Stockholder and Bondholder Information. . . . . Back Cover
THE CONNECTICUT LIGHT AND POWER COMPANY
BALANCE SHEETS
<TABLE>
<CAPTION>
At December 31, 1993 1992
- -----------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C>
ASSETS
- ------
Utility Plant, at original cost:
Electric......................................... $5,936,344 $ 5,822,783
Less: Accumulated provision for depreciation.. 2,010,962 1,827,024
----------- -----------
3,925,382 3,995,759
Construction work in progress.................... 121,177 110,081
Nuclear fuel, net................................ 156,878 167,816
----------- -----------
Total net utility plant...................... 4,203,437 4,273,656
----------- -----------
Other Property and Investments:
Nuclear decommissioning trusts, at cost.......... 147,657 121,888
Investments in regional nuclear generating
companies and subsidiary companies, at equity... 53,951 53,717
Other, at cost................................... 14,184 14,198
----------- -----------
215,792 189,803
----------- -----------
Current Assets:
Cash and special deposits <F2>(Note 1).......... 2,283 12,104
Receivables, less accumulated provision for
uncollectible accounts of $10,816,000 in 1993
and $8,358,000 in 1992......................... 210,805 231,614
Receivables from affiliated companies............ 29,687 4,804
Accrued utility revenues......................... 97,662 92,366
Fuel, materials, and supplies, at average cost... 60,247 72,199
Recoverable energy costs, net--current
portion <F2>(Note 1)........................... 9,985 77,002
Prepayments and other............................ 33,697 31,875
----------- -----------
444,366 521,964
----------- -----------
Deferred Charges:
Regulatory asset--income taxes <F2>(Note 1)..... 1,026,046 -
Deferred costs--nuclear plants <F2>(Note 1)...... 185,909 199,914
Unrecovered contract obligation-YAEC <F4>(Note 3) 84,526 98,559
Deferred conservation and load-management costs.. 111,442 87,487
Recoverable energy costs, net <F2>(Note 1)....... 26,311 82,423
Deferred DOE assessment <F2>(Note 1)............. 39,279 41,730
Unamortized debt expense......................... 8,971 10,497
Amortizable property investment.................. 6,228 8,720
Other............................................ 45,073 68,053
----------- -----------
1,533,785 597,383
----------- -----------
Total Assets................................. $6,397,380 $5,582,806
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>1
THE CONNECTICUT LIGHT AND POWER COMPANY
BALANCE SHEETS
<TABLE>
<CAPTION>
At December 31, 1993 1992
- ------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C>
CAPITALIZATION AND LIABILITES
- -----------------------------
Capitalization:
Common stock, $10 par value--authorized
24,500,000 shares; outstanding 12,222,930
shares in 1993 and 1992......................... $ 122,229 $ 122,229
Capital surplus, paid in........................... 630,271 634,851
Retained earnings.................................. 750,719 748,817
----------- -----------
Total common stockholder's equity............ 1,503,219 1,505,897
Cumulative preferred stock--
$50 par value--authorized 9,000,000 shares;
outstanding 5,424,000 shares in 1993 and
5,123,925 in 1992
$25 par value--authorized 8,000,000 shares;
outstanding 5,000,000 shares in 1993 and
7,000,000 shares in 1992
Not subject to mandatory redemption <F6>(Note 5) 166,200 231,196
Subject to mandatory redemption <F7> (Note 6). 230,000 197,500
Long-term debt <F8>(Note 7)....................... 1,743,260 1,930,832
----------- -----------
Total capitalization...................... 3,642,679 3,865,425
----------- -----------
Obligations Under Capital Leases..................... 121,892 136,800
----------- -----------
Current Liabilities:
Notes payable to banks............................. 95,000 96,500
Notes payable to affiliated company................ 1,250 -
Commercial paper................................... - 109,240
Long-term debt and preferred stock--current
portion......................................... 314,020 159,604
Obligations under capital leases--current
portion......................................... 55,526 60,604
Accounts payable................................... 117,858 108,797
Accounts payable to affiliated companies........... 52,179 55,808
Accrued taxes...................................... 36,114 118,132
Accrued interest................................... 29,669 32,829
Other.............................................. 32,287 17,185
----------- -----------
733,903 758,699
----------- -----------
Deferred Credits:
Accumulated deferred income taxes <F2>(Note 1)..... 1,575,965 475,355
Accumulated deferred investment tax credits........ 154,701 165,710
Deferred contract obligation--YAEC <F4>(Note 3).... 84,526 98,559
Deferred DOE obligation <F2>(Note 1)............... 31,523 41,730
Other.............................................. 52,191 40,528
----------- -----------
1,898,906 821,882
----------- -----------
Commitments and Contingencies <F12>(Note 11)
Total Capitalization and Liabilities...... $6,397,380 $5,582,806
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>2
THE CONNECTICUT LIGHT AND POWER COMPANY
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
For the Years Ended December 31, 1993 1992 1991
- -----------------------------------------------------------------------------
- -----------
(Thousands of
Dollars)
<S> <C> <C> <C>
Operating Revenues................................ $2,366,050 $2,316,451
$2,275,737
----------- -----------
- -----------
Operating Expenses:
Operation--
Fuel, purchased and net interchange
power....................................... 657,121 598,287
559,131
Other......................................... 641,402 605,675
614,440
Maintenance..................................... 180,403 197,460
184,727
Depreciation.................................... 219,776 209,884
198,597
Amortization of regulatory assets, net.......... 112,353 73,456
55,693
Federal and state income taxes
<F9>(Note 8).................................. 144,547 172,236
173,102
Taxes other than income taxes................... 170,353 171,642
166,212
----------- -----------
- -----------
Total operating expenses..................... 2,125,955 2,028,640
1,951,902
----------- -----------
- -----------
Operating Income.................................. 240,095 287,811
323,835
----------- -----------
- -----------
Other Income:
Deferred nuclear plants return--
other funds.................................. 23,537 35,396
36,714
Equity in earnings of regional
nuclear generating companies.................. 6,193 8,014
8,021
Other, net...................................... (1,044) 6,964
9,226
Income taxes--credit............................ 4,859 11,171
13,004
----------- -----------
- -----------
Other income, net............................ 33,545 61,545
66,965
----------- -----------
- -----------
Income before interest charges............... 273,640 349,356
390,800
----------- -----------
- -----------
Interest Charges:
Interest on long-term debt...................... 134,263 151,314
166,256
Other interest.................................. 9,654 4,205
1,542
Deferred nuclear plants return--
borrowed funds <F2>(Note 1)................... (13,979) (12,877)
(17,816)
----------- -----------
- -----------
Interest charges, net........................ 129,938 142,642
149,982
----------- -----------
- -----------
Income before cumulative effect of
accounting change............................... 143,702 206,714
240,818
Cumulative effect of accounting change <F2>(Note 1) 47,747 -
-
----------- -----------
- -----------
Net Income........................................ $ 191,449 $ 206,714 $
240,818
=========== ===========
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>3
<TABLE>
The Connecticut Light and Power Company
STATEMENTS OF CASH FLOWS
- -----------------------------------------------------------------------------
- ---------------
<CAPTION>
For the Years Ended December 31, 1993 1992
1991
---------
- --------- ---------
(Thousands
of Dollars)
<S> <C> <C>
<C>
Cash Flows From Operations:
Net Income .............................................. $ 191,449 $
206,714 $ 240,818
Adjusted for the following:
Depreciation............................................ 226,951
223,058 204,534
Deferred income taxes and investment tax credits, net... (20,188)
72,138 107,599
Deferred nuclear plants return, net of amortization..... 58,740
10,071 (3,529)
Deferred energy costs, net of amortization.............. 123,129
(22,408) (119,629)
Deferred conservation and load-management,
net of amortization.................................... (23,955)
(31,989) (47,402)
Other sources of cash................................... 81,386
13,256 37,143
Other uses of cash...................................... (26,431)
(66,494) (38,730)
Changes in working capital:
Receivables and accrued utility revenues............... (9,370)
245 (36,882)
Fuel, materials, and supplies.......................... 11,951
1,296 24,735
Accounts payable....................................... 5,433
(18,067) 52,029
Accrued taxes.......................................... (82,018)
15,344 (42,228)
Other working capital (excludes cash).................. 9,754
7,154 12,462
---------
- --------- ---------
Net Cash Flows From Operations............................. 546,831
410,318 390,920
---------
- --------- ---------
Cash Flows Used For Financing Activities:
Long-term debt........................................... 740,500
491,000 -
Preferred stock.......................................... 80,000
75,000 -
Financing expenses....................................... (2,393)
(9,825) -
Net increase (decrease) in short-term debt............... (109,490)
15,240 108,385
Reacquisitions and retirements of long-term debt.........
and preferred stock.................................... (886,969)
(523,123) (90,877)
Cash dividends on preferred stock........................ (29,182)
(31,977) (34,541)
Cash dividends on common stock........................... (160,365)
(164,277) (172,587)
---------
- --------- ---------
Net cash flows used for financing activities............... (367,899)
(147,962) (189,620)
---------
- --------- ---------
Investment Activities:
Investment in plant (including capital leases):
Electric utility plant................................. (149,308)
(225,901) (178,670)
Nuclear fuel........................................... (13,658)
3,139 (3,432)
---------
- --------- ---------
Net cash flows used for investments in plant........... (162,966)
(222,762) (182,102)
Other investment activities, net....................... (25,787)
(32,181) (18,334)
---------
- --------- ---------
Net cash flows used for investments........................ (188,753)
(254,943) (200,436)
---------
- --------- ---------
Net Increase (Decrease) In Cash for the Period............. (9,821)
7,413 864
Cash and special deposits - beginning of period........ 12,104
4,691 3,827
---------
- --------- ---------
Cash and special deposits - end of period.............. $ 2,283 $
12,104 $ 4,691
=========
========= =========
Supplemental Cash Flow Information:
Cash paid (received) during the year for:
Interest, net of amounts capitalized during
construction............................................. $ 130,592 $
143,957 $ 162,760
=========
========= =========
Income taxes............................................. $ 149,056 $
95,199 $ 92,884
=========
========= =========
Increase in obligations:
Niantic Bay Fuel Trust................................... $ 40,140
30,948 14,713
=========
========= =========
Capital leases........................................... $ - -
10,500
=========
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>4
THE CONNECTICUT LIGHT AND POWER COMPANY
STATEMENTS OF COMMON STOCKHOLDER'S EQUITY
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
- -------
Capital Retained
Common Surplus, Earnings
Stock Paid In <F1>(a) Total
- -----------------------------------------------------------------------------
- -------
(Thousands of Dollars)
<S> <C> <C> <C> <C>
Balance at January 1, 1991.......... $122,229 $636,175 $ 705,303
$1,463,707
Net income for 1991............. 240,818
240,818
Cash dividends on preferred
stock......................... (34,541)
(34,541)
Cash dividends on common stock.. (172,587)
(172,587)
Capital stock expenses, net..... 1,027
1,027
--------- --------- ----------
- -----------
Balance at December 31, 1991........ 122,229 637,202 738,993
1,498,424
Net income for 1992............. 206,714
206,714
Cash dividends on preferred
stock......................... (31,977)
(31,977)
Cash dividends on common stock.. (164,277)
(164,277)
Loss on the retirement of
preferred stock............... (636)
(636)
Capital stock expenses, net..... (2,351)
(2,351)
--------- --------- ----------
- -----------
Balance at December 31, 1992........ 122,229 634,851 748,817
1,505,897
Net income for 1993............. 191,449
191,449
Cash dividends on preferred
stock......................... (29,182)
(29,182)
Cash dividends on common stock.. (160,365)
(160,365)
Capital stock expenses, net..... (4,580)
(4,580)
--------- --------- ----------
- -----------
Balance at December 31, 1993........ $122,229 $630,271 $ 750,719
$1,503,219
========= ========= ==========
===========
</TABLE>
<F1> (a) The company has dividend restrictions imposed by its long-term debt
agreements. At December 31, 1993, these restrictions totaled
approximately
$540.0 million.
The accompanying notes are an integral part of these financial statements.
<PAGE>5
THE CONNECTICUT LIGHT AND POWER COMPANY COMPANY
- ---------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- ---------------------------------------------------------------------
[FN]
<F2>
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
GENERAL
The Connecticut Light and Power Company (CL&P or the company), Western
Massachusetts Electric Company (WMECO), Holyoke Water Power Company (HWP),
Public Service Company of New Hampshire (PSNH), and North Atlantic Energy
Corporation (NAEC) are the operating subsidiaries comprising the Northeast
Utilities system (the system) and are wholly owned by Northeast Utilities
(NU).
Other wholly owned subsidiaries of NU provide substantial support services
to the system. Northeast Utilities Service Company (NUSCO) supplies
centralized accounting, administrative, data processing, engineering,
financial, legal, operational, planning, purchasing, and other services to
the system companies. Northeast Nuclear Energy Company (NNECO) acts as agent
for system companies in operating the Millstone nuclear generating
facilities. Commencing June 29, 1992, North Atlantic Energy Service
Corporation (NAESCO) began acting as agent for CL&P and NAEC in operating the
Seabrook 1 nuclear facility.
All transactions among affiliated companies are on a recovery of cost basis
which may include amounts representing a return on equity, and are subject to
approval by various federal and state regulatory agencies.
ACCOUNTING CHANGES
Property Taxes: CL&P adopted a one-time change in the method of accounting
for municipal property tax expense for their Connecticut properties. Most
municipalities in Connecticut assess property values as of October 1. Prior
to January 1, 1993, CL&P accrued Connecticut property tax expense over the
period October 1 through September 30 based on the lien-date method. In the
first quarter of 1993, these subsidiaries changed their method of accounting
for Connecticut municipal property taxes to recognize the expense from July 1
through June 30, to match the payment and services provided by the
municipalities. This one-time change increased net income by approximately
$47.7 million for CL&P in 1993.
Income Taxes: The company adopted the provisions of Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS 109),
effective January 1, 1993. For more information on this change, see <F2>
Note 1, "Summary of Significant Accounting Policies - Income Taxes."
Postretirement Benefits Other Than Pensions: The company adopted the
provisions of Statement of Financial Accounting Standards No. 106,
Employer's Accounting for Postretirement Benefits Other Than Pensions (SFAS
106), effective January 1, 1993. For more information on this change, see
<F11> Note 10, "Postretirement Benefits Other Than Pensions."
ACCOUNTING RECLASSIFICATIONS
Certain amounts in the accompanying financial statements of CL&P for the
year ended December 31, 1992 and 1991 have been reclassified to conform
with the December 31, 1993 presentation.
PUBLIC UTILITY REGULATION
NU is registered with the Securities and Exchange Commission (SEC) as a
holding company under the Public Utility Holding Company Act of 1935 (1935
Act), and it and its subsidiaries, including the company, are subject to
the provisions of the 1935 Act. Arrangements among the system companies,
outside agencies, and other utilities covering interconnections, interchange
of electric power, and sales
<PAGE>6
of utility property are subject to regulation by the Federal Energy
Regulatory Commission (FERC) and/or the SEC. The company is subject to
further regulation for rates and other matters by the FERC and the
Connecticut Department of Public Utility Control (DPUC), and follows the
accounting policies prescribed by the respective commissions.
REVENUES
Other than special contracts, utility revenues are based on authorized
rates applied to each customer's use of electricity. Rates can be changed
only through a formal proceeding before the appropriate regulatory
commission. At the end of each accounting period, CL&P accrues an estimate
for the amount of energy delivered but unbilled.
SPENT NUCLEAR FUEL DISPOSAL COSTS
Under the Nuclear Waste Policy Act of 1982, CL&P must pay the United States
Department of Energy (DOE) for the disposal of spent nuclear fuel and high-
level radioactive waste. Fees for nuclear fuel burned on or after April 7,
1983 are billed currently to customers and paid to the DOE on a quarterly
basis. For nuclear fuel used to generate electricity prior to April 7,
1983 (prior-period fuel), payment may be made anytime prior to the first
delivery of spent fuel to the DOE. At December 31, 1993, fees due to the
DOE for the disposal of prior-period fuel were approximately $136.1 million,
including interest costs of $69.6 million. As of December 31, 1993,
approximately $134.5 million had been collected through rates.
Under the Energy Policy Act of 1992 (Energy Act), CL&P is assessed for its
proportionate shares of the costs of decontaminating and decommissioning
uranium enrichment plants operated by the DOE (D&D assessment). The Energy
Act imposes an overall cap of $2.25 billion on the obligation of the
commercial power industry and limits the annual special assessment to $150
million each year over a 15-year period beginning in 1993. The Energy Act
also requires that regulators treat D&D assessments as a reasonable and
necessary cost of fuel, to be fully recovered in rates, like any other fuel
cost. The cap and annual recovery amounts will be adjusted annually for
inflation. The D&D assessment is allocated among utilities based upon
services purchased in prior years. At December 31, 1993, CL&P's remaining
share of these costs is estimated to be approximately $39.3 million. CL&P
has begun to recover these costs. Accordingly, CL&P has recognized these
costs as a regulatory asset, with a corresponding obligation, on its
Balance Sheets.
INVESTMENTS AND JOINTLY OWNED ELECTRIC UTILITY PLANT
Regional Nuclear Generating Companies: CL&P owns common stock of four
regional nuclear generating companies (Yankee companies). The Yankee
companies, with the company's ownership interests, are:
- --------------------------------------------------------------------
Connecticut Yankee Atomic Power Company (CY). . . . . 34.5%
Yankee Atomic Electric Company (YAEC) . . . . . . . . 24.5
Maine Yankee Atomic Power Company (MY). . . . . . . . 12.0
Vermont Yankee Nuclear Power Corporation (VY) . . . . 9.5
- --------------------------------------------------------------------
CL&P's investments in the Yankee companies are accounted for on the equity
basis. The electricity produced by these facilities that are operating is
committed to the participants substantially on the basis
<PAGE>7
of their ownership interests and is billed pursuant to
contractual agreements. For more information on these agreements, see <F12>
Note 11, "Commitments and Contingencies - Purchased Power Arrangements."
The 173 megawatt (MW) YAEC nuclear power plant was shut down permanently on
February 26, 1992. For more information on the Yankee companies, see <F4>
Note 3, "Nuclear Decommissioning."
Millstone 1: CL&P has an 81 percent joint-ownership interest in Millstone
1, a 660 MW nuclear generating unit. As of December 31, 1993, plant-in-
service and the accumulated provision for depreciation included approximately
$332 million and $130.8 million, respectively, for CL&P's share of Millstone
1. CL&P's share of Millstone 1 operating expenses is included in the
corresponding operating expenses on the accompanying Statements of Income.
Millstone 2: CL&P has an 81 percent joint-ownership interest in Millstone
2, a 875 MW nuclear generating unit. As of December 31, 1993, plant-in-
service and the accumulated provision for depreciation included
approximately $676 million and $151.5 million, respectively, for CL&P's
share of Millstone 2. CL&P's share of Millstone 2 operating expenses is
included in the corresponding operating expenses on the accompanying
Statements of Income.
Millstone 3: CL&P has a 52.93 percent joint-ownership interest in
Millstone 3, a 1,149 MW nuclear generating unit. As of December 31, 1993,
plant-in-service and the accumulated provision for depreciation included
approximately $1.9 billion and $366.6 million, respectively, for CL&P's
share of Millstone 3. CL&P's share of Millstone 3 expenses is included in
the corresponding operating expenses on the accompanying Statements of
Income.
Seabrook: As of December 31, 1993, CL&P has a 4.06 percent joint-ownership
interest in Seabrook 1, a 1,150 MW nuclear generating unit. As of December
31, 1993, plant-in-service and the accumulated provision for depreciation
included approximately $173.4 million and $17.7 million, respectively, for
CL&P's share of Seabrook 1. CL&P's share of Seabrook 1 expenses is included
in the corresponding operating expenses on the accompanying Statements of
Income.
DEPRECIATION
The provision for depreciation is calculated using the straight-line method
based on estimated remaining lives of depreciable utility plant-in-service,
adjusted for salvage value and removal costs, as approved by the appropriate
regulatory agency. Except for major facilities, depreciation factors are
applied to the average plant-in-service during the period. Major facilities
are depreciated from the time they are placed in service. When plant is
retired from service, the original cost of plant, including costs of removal,
less salvage, is charged to the accumulated provision for depreciation. For
nuclear production plants, the costs of removal, less salvage, that have been
funded through external decommissioning trusts will be paid with funds from
the trusts and charged to the accumulated reserve for decommissioning
included in the accumulated provision for depreciation over the expected
service life of the plants. See <F4> Note 3, "Nuclear Decommissioning," for
additional information.
The depreciation rates for the several classes of electric plant-in-service are
equivalent to a composite rate of 3.8 percent in 1993, 3.7 percent in 1992, and
3.5 percent in 1991.
INCOME TAXES
The tax effect of temporary differences (differences between the periods in
which transactions affect income in the financial statements and the periods
in which they affect the determination of income
<PAGE>8
subject to tax) is accounted for in accordance with the ratemaking treatment
of the applicable regulatory commissions. See <F9> Note 8, "Income Tax
Expense," for the components of income tax expenses.
In 1992, the Financial Accounting Standards Board (FASB) issued SFAS 109.
SFAS 109 supersedes previously issued income tax accounting standards. The
company adopted SFAS 109, on a prospective basis, during the first quarter of
1993. At December 31, 1993, the deferred tax obligation relating to the
adoption of SFAS 109 approximated $1.0 billion. As it is probable that the
increase in deferred tax liabilities will be recovered from customers through
rates, CL&P also established a regulatory asset. SFAS 109 does not permit
net-of-tax accounting. Accordingly, the company no longer utilizes
net-of-tax accounting for the deferred nuclear plants return-borrowed funds
and allowance for funds used during construction (AFUDC) - borrowed funds.
The temporary differences which give rise to the accumulated deferred tax
obligation at December 31, 1993, are as follows:
(Thousands of Dollars)
Accelerated depreciation and other plant-related
differences. . . . . . . . . . . . . . . . . . $1,049,849
The tax effect of net regulatory assets. . . . . 434,894
Other. . . . . . . . . . . . . . . . . . . . . . 91,222
----------
$1,575,965
==========
ENERGY ADJUSTMENT CLAUSES
Retail electric rates include a fuel adjustment clause (FAC) under which
fossil-fuel prices above or below base-rate levels are charged or credited
to customers. Administrative proceedings are required each month to approve
the FAC charges or credits proposed for the following month. Monthly FAC
rates are also subject to retroactive review and appropriate adjustment by
the DPUC each quarter after public hearings.
Beginning in 1979, the DPUC approved the use of a generation utilization
adjustment clause (GUAC), which defers the effect on fuel costs caused by
variations from a specified composite nuclear generation capacity factor
embedded in base rates. Generally, at the end of a 12-month period ending July
31 of each year, these deferrals are refunded to, or collected from, customers
over the subsequent 11-month period beginning in September. Should the annual
composite nuclear capacity factor fall below the 55 percent GUAC floor, CL&P
would have to apply to the DPUC for permission to recover the additional fuel
expense associated with nuclear performance below 55 percent.
On January 5, 1994, the DPUC issued a decision which ordered CL&P to offset
GUAC deferred charges against prior fuel over-recoveries. The disallowance
resulted in a zero GUAC rate for the period September 1993 through August
1994. CL&P is considering an appeal of this decision.
The DPUC further ordered that any GUAC deferrals subsequent to July 1993
will be offset by any fuel overrecoveries whenever the composite nuclear
capacity factor is below the level embedded in base rates. For the period
August 1993 to December 1993, there have been no further adjustments
necessary as a result of the DPUC's decision.
<PAGE>9
The January 5, 1994 DPUC decision creates some uncertainty about the future
operation of the GUAC. CL&P has requested the DPUC to clarify the portion
of the decision related to future calculation of the GUAC rate. Management
does not expect the decision to have a material adverse impact on CL&P's
future results of operations.
For additional information see <F12> Note 11, "Commitments and Contingencies
"Nuclear Performance."
CONSERVATION AND LOAD MANAGEMENT COSTS
Conservation and Load Management (C&LM) costs are recovered through a
Conservation Adjustment Mechanism (CAM). The DPUC issued an order in April
1993, which allowed CL&P to recover C&LM expenditures over an eight-year
period and reaffirmed program performance incentives. In December 1993,
CL&P filed a proposed CAM settlement with the DPUC. The settlement
proposes 1994 C&LM expenditures of $39 million, a reduction in the cost
recovery period from 8 to 3.85 years, and other changes in program designs,
performance incentives, and cost recovery. Unrecovered C&LM costs at
December 31, 1993 were $111.4 million.
PHASE-IN PLANS
As discussed below, CL&P is phasing into rates the recoverable parts of its
investments in Millstone 3 and Seabrook 1. All plans are in compliance
with Statement of Financial Accounting Standards No. 92, Regulated
Enterprises-Accounting for Phase-in Plans.
As allowed by the DPUC, CL&P is phasing into rate base its allowed investment
in Millstone 3. The DPUC has provided for full deferred earnings and carrying
charges on the portion of CL&P's allowed investment in Millstone 3 not included
in rate base. Through December 31, 1993, CL&P had placed into rate base $1.58
billion, or 90 percent, of its allowed investment in Millstone 3. The remaining
$175.7 million, or 10 percent, is to be phased into rate base annually in two
5-percent steps beginning January 1, 1994. The amortization and recovery of
deferrals through rates began January 1, 1988 and will end no later than
December 31, 1995. As of December 31, 1993, $349.6 million of the deferred
return, including carrying charges, has been recovered, and $161.9 million of
the deferred return to date, plus carrying charges, remains to be recovered.
As allowed by the DPUC, CL&P phased into rate base its allowed investment
in Seabrook 1. The DPUC provided for full deferred earnings and carrying
charges on the portion of CL&P's allowed investment in Seabrook 1 not
included in rate base. Through December 31, 1993, CL&P has placed into
rate base its full allowed investment in Seabrook 1. The amortization and
recovery of deferrals through rates began September 1, 1991 and will end no
later than August 31, 1996. As of December 31, 1993, $15.8 million of the
deferred return, including carrying charges, has been recovered, and $24.0
million of the deferred return recorded to date, plus carrying charges,
remains to be recovered.
CASH AND SPECIAL DEPOSITS
Cash and special deposits at December 31, 1992 included $10 million in
special deposits that was used to redeem $10 million of CL&P's Pollution
Control Notes.
<F3>
2. LEASES
CL&P and WMECO have entered into the Niantic Bay Fuel Trust (NBFT) capital
lease agreement to finance up to $530 million of nuclear fuel for Millstone
1 and 2 and their share of the nuclear fuel for Millstone 3. CL&P and
WMECO make quarterly lease payments for the cost of nuclear fuel consumed
<PAGE>10
in the reactors (based on a units-of-production method at rates which
reflect estimated kilowatt-hours of energy provided) plus financing costs
associated with the fuel in the reactors. Upon permanent discharge from
the reactors, ownership of the nuclear fuel transfers to CL&P and WMECO.
CL&P has also entered into lease agreements, some of which are capital
leases, for the use of substation equipment, data processing and office
equipment, vehicles, nuclear control room simulators, and office space.
The provisions of these lease agreements generally provide for renewal
options. The following rental payments have been charged to operating
expense:
Capital Operating
Year Leases Leases
---- ------- ---------
1993. . . . . . . . . . $76,549,000 $24,355,000
1992. . . . . . . . . . 61,795,000 26,919,000
1991. . . . . . . . . . 50,998,000 26,320,000
Interest included in capital lease rental payments was $11,298,000 in 1993,
$14,782,000 in 1992, and $15,974,000 in 1991.
Substantially all of the capital lease rental payments were made pursuant
to the nuclear fuel lease agreement. Future minimum lease payments under
the nuclear fuel capital lease cannot be reasonably estimated on an annual
basis due to variations in the usage of nuclear fuel.
Future minimum rental payments, excluding annual nuclear fuel lease
payments and executory costs, such as property taxes, state use taxes,
insurance, and maintenance, under long-term noncancelable leases, as of
December 31, 1993, are approximately:
<PAGE>11
Capital Operating
Year Leases Leases
---- ------- ---------
(Thousands of Dollars)
1994. . . . . . . . . . . . $ 2,800 $ 20,800
1995. . . . . . . . . . . . 2,800 19,500
1996. . . . . . . . . . . . 2,800 17,900
1997. . . . . . . . . . . . 2,800 17,200
1998. . . . . . . . . . . . 2,800 12,300
After 1998. . . . . . . . . 45,000 75,700
------- --------
Future minimum lease
payments . . . . . . . . . 59,000 $163,400
========
Less amount of representing
interest . . . . . . . . . 38,300
-------
Present value of future
minimum lease payments
for other than nuclear
fuel . . . . . . . . . . . 20,700
Present value of future
nuclear fuel lease
payments . . . . . . . . . 156,700
-------
Total. . . . . . $177,400
========
<F4>
3. NUCLEAR DECOMMISSIONING
The company's 1992 decommissioning study concluded that complete and
immediate dismantlement at retirement continues to be the most viable and
economic method of decommissioning the three Millstone units. A 1991
Seabrook decommissioning study also confirmed that complete and immediate
dismantlement at retirement is the most viable and economic method of
decommissioning Seabrook 1. Decommissioning studies are reviewed and
updated periodically to reflect changes in decommissioning requirements,
technology, and inflation.
The estimated cost of decommissioning CL&P's ownership share of Millstone 1
and 2, in year-end 1993 dollars, is $312.5 million and $251.0 million,
respectively. At December 31, 1993, the estimated cost of decommissioning
CL&P's ownership share of Millstone 3 and Seabrook 1, in year-end 1993
dollars, is $223.0 million and $14.9 million, respectively. Nuclear
decommissioning costs are accrued over the expected service life of the
units and are included in depreciation expense on the Statements of Income.
Nuclear decommissioning costs amounted to $21.9 million in 1993 and 1992,
and $16.2 million in 1991. Nuclear decommissioning, as a cost of removal,
is included in the accumulated provision for depreciation on the Balance
Sheets.
CL&P has established independent decommissioning trusts for its portion of
the costs of decommissioning Millstone 1, 2, and 3. CL&P's portion of the
cost of decommissioning Seabrook 1 is paid to an independent decommissioning
financing fund managed by the state of New Hampshire.
<PAGE>12
As of December 31, 1993, CL&P has collected, through rates, $148.3 million,
toward the future decommissioning costs of its share of the Millstone
units, of which $116.8 million has been transferred to external
decommissioning trusts. As of December 31, 1993, CL&P has paid approximately
$860,000 into Seabrook 1's decommissioning financing fund. Earnings on the
decommissioning trusts and financing fund increase the decommissioning trust
balance and the accumulated reserve for decommissioning. At December 31,
1993, the balance in the accumulated reserve for decommissioning amounted to
$179.1 million.
Changes in requirements or technology, or adoption of a decommissioning
method other than immediate dismantlement, could change decommissioning
cost estimates. CL&P attempts to recover sufficient amounts through its
allowed rates to cover its expected decommissioning costs. Only the
portion of currently estimated total decommissioning costs that has been
accepted by the regulatory agencies is reflected in CL&P's rates.
Although allowances for decommissioning have increased significantly in
recent years, ratepayers in future years will need to increase their
payments to offset the effects of any insufficient rate recoveries in
previous years.
CL&P, along with other New England utilities, has equity investments in the
four Yankee companies. Each Yankee company owns a single nuclear generating
unit. The estimated costs, in year-end 1993 dollars, of decommissioning
CL&P's ownership share of CY and MY, are $117.3 million and $38.8 million,
respectively. The cost to decommission VY is currently being re-estimated.
The cost of decommissioning CL&P's ownership share of VY is projected to
range from $28.5 million to $33.3 million. As discussed in the following
paragraph, YAEC's owners voted to permanently shut down the YAEC unit on
February 26, 1992. Under the terms of the contracts with the Yankee
companies, the shareholders- sponsors are responsible for their proportionate
share of the operating costs of each unit, including decommissioning. The
nuclear decommissioning costs of the Yankee companies are included as part
of CL&P's cost of power.
YAEC has begun decommissioning its nuclear facility. On June 1, 1992, YAEC
filed a rate filing to obtain FERC authorization to collect the closing
and decommissioning costs and to recover the remaining
investment in the
YAEC nuclear power plant, over the remaining period of the plant's Nuclear
Regulatory Commission (NRC) operating license. The bulk of these costs
has been agreed to by the YAEC joint owners and approved, as a settlement,
by FERC. At December 31, 1993, the estimated remaining costs amounted to
$345.0 million, of which CL&P's share was approximately $84.5 million.
Management expects that CL&P will continue to be allowed to recover such
FERC-approved costs from its customers. Accordingly, CL&P has recognized
these costs as a regulatory asset, with a corresponding obligation, on its
Balance Sheets. CL&P has a 24.5 percent equity investment, approximating
$5.9 million, in YAEC. CL&P had relied on YAEC for less than 1 percent of
its capacity.
<F5>
4. SHORT-TERM DEBT
The system companies have various credit lines, totaling $485 million.
NU, CL&P, WMECO, HWP, NNECO, and The Rocky River Realty Company (RRR) have
established a revolving credit facility with a group of 17 banks. Under
this facility, the participating companies may borrow up to an aggregate of
$360 million. Individual borrowing limits are $175 million for NU, $360
million for CL&P, $75 million for WMECO, $8 million for HWP, $60 million
for NNECO, and $25 million for RRR. The system companies may borrow funds
on a short-term revolving basis using either fixed-rate loans or standby
loans. Fixed rates are set using competitive bidding. Standby-loan rates
are based upon several alternative variable rates. The system companies
are obligated to pay a facility fee of 0.20 percent of each bank's total
<PAGE>13
commitment under the three-year portion of the facility, representing 75
percent of the total facility, plus .135 percent of each bank's total
commitment under the 364-day portion of the facility, representing 25
percent of the total facility. At December 31, 1993, there were $22.5
million of borrowings under the facility, $5 million attributable to CL&P.
Certain subsidiaries of NU, including CL&P, are members of the Northeast
Utilities System Money Pool (Pool). The Pool provides a more efficient
use of the cash resources of the system, and reduces outside short-term
borrowings. NUSCO administers the Pool as agent for the member companies.
Short-term borrowing needs of the member companies are first met with
available funds of other member companies, including funds borrowed by NU
parent. NU parent may lend to the Pool but may not borrow. Investing and
borrowing subsidiaries receive or pay interest based on the average daily
Federal Funds rate. Funds may be withdrawn from or repaid to the Pool at
any time without prior notice. However, borrowings based on loans from NU
parent bear interest at NU parent's cost and must be repaid based upon the
terms of NU parent's original borrowing.
Maturities of CL&P's short-term debt obligations are for periods of three
months or less.
The amount of short-term borrowings that may be incurred by the company is
subject to periodic approval by the SEC under the 1935 Act. In addition,
the charter of CL&P contains provisions restricting the amount of short-
term borrowings. Under the SEC and/or charter restrictions, the company
was authorized, as of January 1, 1993, to incur short-term borrowings up
to a maximum of $375 million.
<PAGE>14
<F6>
5. PREFERRED STOCK NOT SUBJECT TO MANDATORY REDEMPTION
Details of preferred stock not subject to mandatory redemption are:
<TABLE>
<CAPTION>
December 31, Shares
1993 Outstanding
December 31,
Redemption December 31
- --------------------------------
Description Price 1993 1993
1992 1991
- -----------------------------------------------------------------------------
- ---------------------
(Thousands
of Dollars)
<S> <C> <C> <C> <C>
<C>
$1.90 Series of 1947. . . . . $52.50 163,912 $ 8,196 $
8,196 $ 8,196
$2.00 Series of 1947. . . . . 54.00 336,088 16,804
16,804 16,804
$2.04 Series of 1949. . . . . 52.00 100,000 5,000
5,000 5,000
$2.06 Series E of 1954. . . . 51.00 200,000 10,000
10,000 10,000
$2.09 Series F of 1955. . . . 51.00 100,000 5,000
5,000 5,000
$2.20 Series of 1949. . . . . 52.50 200,000 10,000
10,000 10,000
$3.24 Series G of 1968. . . . 51.84 300,000 15,000
15,000 15,000
$3.80 Series J of 1971. . . . - - -
20,000 20,000
$4.48 Series H of 1970. . . . - - -
15,000 15,000
$4.48 Series I of 1970. . . . - - -
20,000 20,000
$4.56 Series K of 1974. . . . - - -
- 50,000
3.90% Series of 1949. . . . . 50.50 160,000 8,000
8,000 8,000
4.50% Series of 1956. . . . . 50.75 104,000 5,200
5,200 5,200
4.50% Series of 1963. . . . . 50.50 160,000 8,000
8,000 8,000
4.96% Series of 1958. . . . . 50.50 100,000 5,000
5,000 5,000
5.28% Series of 1967. . . . . 51.43 200,000 10,000
10,000 10,000
6.56% Series of 1968. . . . . 51.44 200,000 10,000
10,000 10,000
7.60% Series of 1971. . . . . - - -
9,996 9,996
9.36% Series of 1970. . . . . - - -
- 10,000
9.60% Series of 1974. . . . . - - -
- 14,999
1989 Adjustable Rate DARTS. . 25.00 2,000,000 50,000
50,000 50,000
-------
- ------- --------
Total preferred stock
not subject to mandatory
redemption. . . . . . . . . . $ 166,200 $
231,196 $ 306,195
========
======== ========
All or any part of each outstanding series of such preferred stock may be
redeemed by the company at any time at established redemption prices plus
accrued dividends to the date
of redemption.
</TABLE>
<PAGE>15
<F7>
6. PREFERRED STOCK SUBJECT TO MANDATORY REDEMPTION
Details of preferred stock subject to mandatory redemption are:
<TABLE>
<CAPTION>
December 31, Shares
1993 Outstanding December
31,
Redemption December 31
- --------------------------------
Description Price* 1993 1993
1992 1991
- -----------------------------------------------------------------------------
- ---------------------
(Thousands
of Dollars)
<S> <C> <C> <C> <C>
<C>
$5.52 Series L of 1975 . . . . $ - $ - $ - $
- $ 1,926
10.48% Series of 1980 . . . . . - - -
- 14,000
11.52% Series of 1975 . . . . . - - -
- 966
9.10% Series of 1987 . . . . . - - -
50,000 50,000
9.00% Series of 1989 . . . . . 26.65 3,000,000 75,000
75,000 75,000
7.23% Series of 1992 . . . . . 52.41 1,500,000 75,000
75,000 -
5.30% Series of 1993 . . . . . 51.00 1,600,000 80,000
- -
--------
- -------- --------
230,000
200,000 141,892
Less preferred stock to be
redeemed within on year . . . . -
2,500 2,500
--------
- -------- --------
Total preferred stock
subject to mandatory
redemption . . . . . . . . . . $230,000
$197,500 $139,392
========
======== ========
*Redemption prices reduce in future years.
</TABLE>
<TABLE>
The following table details redemption and sinking fund activity forpreferred
stock subject to
mandatory redemption:
<CAPTION>
Minimum
Annual Shares Reacquired
Sinking-Fund
- ------------------------------------
Series Requirement 1993 1992
1991
- -----------------------------------------------------------------------------
- ---------
(Thousands of Dollars)
<S> <C> <C> <C>
<C>
$5.52 Series L of 1975 $ - - 38,524
40,000
10.48% Series of 1980 - - 280,000
40,000
11.52% Series of 1975 - - 19,318
20,008
9.10% Series of 1987 - 2,000,000 -
- -
9.00% Series of 1989 (1) 3,750 - -
- -
7.23% Series of 1992 (2) 3,750 - -
- -
5.30% Series of 1993 (3) 16,000 - -
- -
(1) Sinking fund requirements commence October 1, 1995.
(2) Sinking fund requirements commence September 1, 1998.
(3) Sinking fund requirements commence October 1, 1999.
</TABLE>
<PAGE>16
The minimum sinking-fund provisions of the series subject to mandatory
redemption, for the years 1994 through 1998, aggregate approximately $0 in
1994, $3,750,000 in 1995, 1996, and 1997, and $7,500,000 in 1998. In case
of default on sinking-fund payments or the payment of dividends, no payments
may be made on any junior stock by way of dividends or otherwise (other than
in shares of junior stock) so long as the default continues. If the company
is in arrears in the payment of dividends on any outstanding shares of
preferred stock, the company would be prohibited from redemption or purchase
of less than all of the preferred stock outstanding. All or part of each of
the series named above may be redeemed by the company at any time at
established redemption prices plus accrued dividends to the date of
redemption, subject to certain refunding limitations.
<PAGE>17
<F8>
7. LONG-TERM DEBT
Details of long-term debt outstanding are:
- -------------------------------------------------------------------------
December 31,
---------------
1993 1992
- -------------------------------------------------------------------------
(Thousands of Dollars)
First Mortgage Bonds:
4 1/4% Series 1963 due 1993 . . . . $ - $ 15,000
8 1/2% Series PP due 1993 . . . . - 125,000
4 1/2% Series 1964 due 1994 . . . . 12,000 12,000
4 1/4% Series WW due 1994 . . . . 170,000 170,000
5 5/8% Series 1967 due 1997 . . . . 20,000 20,000
6% Series S due 1997 . . . . 30,000 30,000
7 5/8% Series UU due 1997 . . . . 200,000 200,000
6 7/8% Series U due 1998 . . . . 40,000 40,000
7 1/8% Series 1968 due 1998 . . . . 25,000 25,000
6 1/2% Series T due 1998 . . . . 20,000 20,000
6 1/2% Series 1968 due 1998 . . . . 10,000 10,000
7 1/4% Series VV due 1999 . . . . 100,000 100,000
8 3/4% Series V due 2000 . . . . - 40,000
8 7/8% Series W due 2000 . . . . - 40,000
5 3/4% Series XX due 2000 . . . . 200,000 -
7 3/8% Series X due 2001 . . . . 30,000 30,000
7 5/8% Series 1971 due 2001 . . . . 30,000 30,000
7 1/2% Series 1972 due 2002 . . . . 35,000 35,000
7 5/8% Series Y due 2002 . . . . 50,000 50,000
7 5/8% Series Z due 2003 . . . . 50,000 50,000
7 1/2% Series 1973 due 2003 . . . . 40,000 40,000
8 3/4% Series AA due 2004 . . . . - 65,000
9 1/4% Series 1974 due 2004 . . . . - 30,000
8 7/8% Series DD due 2007 . . . . - 45,000
9 1/4% Series EE due 2008 . . . . - 40,000
9 3/8% Series 1978 due 2008 . . . . - 40,000
9 3/4% Series QQ due 2018 . . . . 75,000 75,000
9 1/2% Series RR due 2019 . . . . 75,000 75,000
9 3/8% Series SS due 2019 . . . . 75,000 75,000
7 3/8% Series TT due 2019 . . . . 20,000 20,000
7 1/2% Series YY due 2023 . . . . 100,000 -
7 3/8% Series ZZ due 2025 . . . . 125,000 -
---------- ----------
Total First Mortgage Bonds. . $1,532,000 $1,547,000
<PAGE>18
- ---------------------------------------------------------------------------
December 31,
---------------------------
1993 1992
- ---------------------------------------------------------------------------
(Thousands of Dollars)
Pollution Control Notes:
5.90%, due 1998. . . . . . . . . $ - $ 6,197
6.50%, due 2007. . . . . . . . . - 16,000
Variable rate, due 2013-2022 . . 46,400 350,100
Tax exempt, due 2028 . . . . . . . 315,500 -
Fees and interest due for spent fuel
disposal costs . . . . . . . . . 136,125 132,015
Other. . . . . . . . . . . . . . . 35,417 41,493
Less amounts due within one year . 314,020 157,104
Unamortized premium and
discount, net. . . . . . . . . . (8,162) (4,869)
---------- ----------
Long-term debt, net . . . . . $1,743,260 $1,930,832
========== ==========
Long-term debt maturities and cash sinking-fund requirements on debt
outstanding at December 31, 1993 for the years 1994 through 1998 are
approximately: $189,020,000, $8,111,000, $9,372,000, $260,828,000, and
$95,011,000, respectively. Also, $125 million of first mortgage bonds
outstanding at December 31, 1993 had been called in December 1993 for
redemption in 1994. In addition, there are annual one percent sinking- and
improvement-fund requirements, currently amounting to $13,950,000 for the
year 1994, $12,250,000 for 1995, 1996, and 1997, and $9,750,000 for 1998.
Such sinking- and improvement-fund requirements may be satisfied by the
deposit of cash or bonds or by certification of property additions.
All or any part of each outstanding series of first mortgage bonds may be
redeemed by the company at any time at established redemption prices plus
accrued interest to the date of redemption, except certain series which are
subject to certain refunding limitations during their respective initial
five-year redemption periods.
Essentially all of the company's utility plant is subject to the lien of its
first mortgage bond indenture. As of December 31, 1993, the company has
secured $315.5 million of pollution control notes with second mortgage liens
on Millstone 1, junior to the liens of its first mortgage bond indentures.
CL&P has entered into an interest-rate cap contract to reduce the potential
impact of upward changes in interest rates on certain variable-rate tax-
exempt pollution control revenue bonds. Approximately $340 million of total
outstanding long-term variable-rate debt is secured by this interest rate
cap. The total cost of the interest-rate cap for 1993 was approximately $2.9
million, the cost of which is amortized over the terms of the contract, which
is three years. The fair market value of the interest-rate cap contract as
of December 31, 1993 is approximately $388,000.
Fees and interest due for spent fuel disposal costs are scheduled to be paid
to the United States Department of Energy just prior to the first delivery
of prior-period spent fuel, which is anticipated to be in 1998. Until such
payment is made, the outstanding balance will continue to accrue interest at
the three-month Treasury Bill Yield Rate. For additional information, see
<F2> Note 1 of the accompanying Notes to Financial Statements.
<PAGE>19
<F9>
8. INCOME TAX EXPENSE
The components of the federal and state income tax provisions charged to
operations are:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
- ---------------
For the Years Ended December 31, 1993 <F2>(Note 1) 1992
1991
- -----------------------------------------------------------------------------
- ---------------
(Thousands of Dollars)
<S> <C> <C>
<C>
Current income taxes:
Federal. . . . . . . . . . . . . . . . . $115,403 $ 61,773
$ 33,717
State. . . . . . . . . . . . . . . . . . 44,473 27,153
18,782
-------- --------
- --------
Total current. . . . . . . . . . . . . 159,876 88,926
52,499
-------- --------
- --------
Deferred income taxes, net:
Federal. . . . . . . . . . . . . . . . . 3,808 60,788
88,554
State. . . . . . . . . . . . . . . . . . (12,987) 11,833
26,430
-------- --------
- --------
Total deferred . . . . . . . . . . . . (9,179) 72,621
114,984
-------- --------
- --------
Investment tax credits, net . . . . . . (11,009) (6,230)
(6,230)
-------- ---------
- ---------
Total income tax expense. . . . . . . $139,688 $155,317
$161,253
======== ========
========
The components of total income tax expense are classified as follows:
Income taxes charged to operating
expenses. . . . . . . . . . . . . . . . $144,547 $172,236
$173,102
Income taxes associated with the
amortization of deferred nuclear
plants return - borrowed funds. . . . . - (15,157)
(12,263)
Income taxes associated with AFUDC and
deferred nuclear plants return -
borrowed funds. . . . . . . . . . . . . - 9,409
13,418
Other income taxes - credit. . . . . . . (4,859) (11,171)
(13,004)
-------- --------
---------
Total income tax expense . . . . . . . . $139,688 $155,317
$161,253
======== ========
========
<PAGE>20
Deferred income taxes are comprised of the tax effects of temporary differences
as follows:
- -----------------------------------------------------------------------------
- -----------------
For the Years Ended December 31, 1993 <F2>(Note 1) 1992
1991
- -----------------------------------------------------------------------------
- -----------------
(Thousands of
Dollars)
Depreciation, leased nuclear fuel,
settlement credits, and disposal
costs. . . . . . . . . . . . . . . . . . $ 42,663 $ 43,715
$ 49,636
Conservation and load management. . . . . 9,156 13,506
22,594
Postretirement benefits accrual . . . . . (2,579) -
-
Energy adjustment clauses . . . . . . . . (52,189) 12,627
47,483
AFUDC and deferred nuclear plants
return, net. . . . . . . . . . . . . . . (13,741) (5,748)
1,155
Early retirement program. . . . . . . . . (3,355) 3,988
(9,718)
Pension accrual . . . . . . . . . . . . . 3,553 885
(351)
Settlement, canceled independent
power plants . . . . . . . . . . . . . . - 7,251
-
Loss on bond redemption . . . . . . . . . 8,145 10
-
Other . . . . . . . . . . . . . . . . . . (832) (3,613)
4,185
--------- --------
--------
Deferred income taxes, net. . . . . . $ (9,179) $ 72,621
$114,984
========= ========
========
A reconciliation between income tax expense and the expected tax expense at the
applicable statutory
rate is as follows:
- -----------------------------------------------------------------------------
- -----------------
For the Years Ended December 31, 1993 <F2>(Note 1) 1992
1991
- -----------------------------------------------------------------------------
- -----------------
(Thousands of
Dollars)
Expected federal income tax at
35 percent of pretax income
for 1993 and 34 percent for
1992 and 1991. . . . . . . . . . . . . . $115,898 $123,091
$136,704
Tax effect of differences:
Depreciation differences . . . . . . . . 19,264 15,826
10,647
Deferred nuclear plants return -
other funds . . . . . . . . . . . . . . (8,294) (12,035)
(12,483)
Amortization of nuclear plants return -
other funds . . . . . . . . . . . . . . 18,648 14,511
12,918
Property tax differences . . . . . . . . (12,320) (732)
502
Investment tax credit amortization . . . (11,009) (6,230)
(6,230)
State income taxes, net of federal
benefit . . . . . . . . . . . . . . . . 20,466 25,730
29,987
Adjustment for prior years taxes . . . . (2,330) (3,500)
(7,000)
Other, net . . . . . . . . . . . . . . . (635) (1,344)
(3,792)
-------- --------
- --------
Total income tax expense . . . . . . . $139,688 $155,317
$161,253
======== ========
========
</TABLE>
<PAGE>21
<F10>
9. PENSION BENEFITS
The company participates in a uniform noncontributory defined benefit
retirement plan covering all regular system employees (the Plan). Benefits
are based on years of service and employees' highest eligible compensation
during five consecutive years of employment. The company's direct-allocated
portion of the system's pension cost, part of which was charged to utility
plant, approximated $7.6 million in 1993, ($1.7) million in 1992, and $10.8
million in 1991. The company's pension costs for 1993 and 1991 include
approximately $13.1 million and $10.0 million, respectively, related to work
force reduction programs.
Currently, the company funds annually an amount at least equal to that which
will satisfy the requirements of the Employment Retirement Income Security
Act and the Internal Revenue Code. Pension costs are determined using
market-related values of pension assets. Pension assets are invested
primarily in domestic and international equity securities and bonds.
The components of the Plan's net pension cost for the system (excluding PSNH
and NAESCO in 1992 and 1991) are:
- ----------------------------------------------------------------------------
For the Years Ended December 31, 1993 1992 1991
- ----------------------------------------------------------------------------
(Thousands of Dollars)
Service cost . . . . . . . . . . $ 59,068 $ 27,480 $ 48,738
Interest cost. . . . . . . . . . 81,456 69,746 71,041
Return on plan assets. . . . . . (176,798) (77,232) (198,437)
Net amortization . . . . . . . . 65,447 (16,266) 108,175
-------- -------- --------
Net pension cost . . . . . . . . $ 29,173 $ 3,728 $ 29,517
======== ======== ========
- ----------------------------------------------------------------------------
For calculating pension cost, the following assumptions were used:
- ----------------------------------------------------------------------------
For the Years Ended December 31, 1993 1992 1991
- -----------------------------------------------------------------------------
Discount rate. . . . . . . . . . 8.00% 8.50% 9.00%
Expected long-term rate of
return. . . . . . . . . . . . . 8.50 9.00 9.70
Compensation/progression rate. . 5.00 6.75 7.50
- -----------------------------------------------------------------------------
<PAGE>22
The following table represents the Plan's funded status reconciled to the NU
Consolidated Balance Sheets:
- -----------------------------------------------------------------------------
At December 31, 1993 1992
- -----------------------------------------------------------------------------
(Thousands of Dollars)
Accumulated benefit obligation,
including $817,421,000 of vested
benefits at December 31, 1993 and
$719,608,000 of vested benefits at
December 31, 1992 . . . . . . . . . . $ 898,788 $ 764,432
========== ==========
Projected benefit obligation . . . . . $1,141,271 $1,055,295
Less: Market value of plan assets . . 1,340,249 1,226,468
---------- ----------
Market value in excess of projected
benefit obligation. . . . . . . . . . 198,978 171,173
Unrecognized transition amount . . . . (16,735) (18,277)
Unrecognized prior service costs . . . 10,287 8,658
Unrecognized net gain. . . . . . . . . (275,043) (214,894)
---------- ----------
Accrued pension liability. . . . . . . $ (82,513) $ (53,340)
========== ===========
- -----------------------------------------------------------------------------
The following actuarial assumptions were used in calculating the Plan's year-
end funded status:
- -----------------------------------------------------------------------------
At December 31, 1993 1992
- -----------------------------------------------------------------------------
Discount rate. . . . . . . . . . . . . 7.75% 8.00%
Compensation/progression rate. . . . . 4.75 5.00
The discount rate for 1993 was determined by analyzing the interest rates, as
of December 31, 1993, of long-term high-quality corporate debt securities
having a duration comparable to the 13.8-year duration of the plan.
During 1993, NU's work force was reduced by approximately 7 percent through a
work force reduction program that involved an early retirement program and
involuntary terminations. CL&P's direct cost of the program, which
approximated $14.8 million, included pension, severance, and other benefits.
<F11>
10. POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
The company provides certain health care benefits, primarily medical and
dental, and life insurance benefits through a benefit plan to retired
employees. These benefits are available for employees leaving the company
who are otherwise eligible to retire and have met specified service
requirements. Through December 31, 1992, the company recognized the cost of
these benefits as
<PAGE>23
they were paid. In December 1990, the FASB issued SFAS 106. This new
standard requires that the expected cost of postretirement benefits,
primarily health and life insurance benefits, must be charged to expense
during the years that eligible employees render service. Effective January
1, 1993, the company adopted SFAS 106 on a prospective basis. Total health
care and life insurance cost, part of which were deferred or charged to
utility plant, approximated $23,170,000 in 1993, $8,791,000 in 1992, and
$7,525,000 in 1991.
On January 1, 1993, the accumulated postretirement benefit obligation (APBO)
represented the company's prior-service obligation upon the adoption of SFAS
106. As allowed by SFAS 106, the company is amortizing its APBO of
approximately $164 million over a 20-year period. For current employees and
certain retirees, the total SFAS 106 benefit is limited to two times the 1993
health care costs. The SFAS 106 obligation has been calculated based on this
assumption.
During 1993, the company did not fund SFAS 106 postretirement costs through
external trusts. The company expects to fund annually amounts once they have
been rate recovered and which also are tax-deductible under the Internal
Revenue Code.
The following table represents the plan's funded status reconciled to the
Balance Sheet at December 31, 1993:
- ----------------------------------------------------------------- -----------
(Thousands of Dollars)
Accumulated postretirement
benefit obligation of:
Retirees . . . . . . . . . . . . . . $(119,520)
Fully eligible active employees. . . (288)
Active employees not eligible to
retire. . . . . . . . . . . . . . . (29,270)
---------
Total accumulated postretirement
benefit obligation. . . . . . . . . (149,078)
Unrecognized transition amount . . . 139,539
Unrecognized net gain. . . . . . . . (2,591)
---------
Accrued postretirement benefit
liability . . . . . . . . . . . . . $ (12,130)
=========
- ----------------------------------------------------------------------------
The components of health care and life insurance costs for the year ended
December 31, 1993 are:
- ----------------------------------------------------------------------------
(Thousands of Dollars)
Service cost . . . . . . . . . . . . $ 3,397
Interest cost. . . . . . . . . . . . 12,091
Net amortization . . . . . . . . . . 7,682
-------
Net health care and life insurance
costs . . . . . . . . . . . . . . . $23,170
=======
- ----------------------------------------------------------------- -----------
<PAGE>24
For measurement purposes, an 11.1-percent annual rate of increase in the per
capita cost of covered health care benefits was assumed for 1993; the rate
was assumed to decrease to 5.4 percent for 2002. The effect of increasing
the assumed health care cost trend rates by one percentage point in each year
would increase the accumulated postretirement benefit obligation as of
December 31, 1993 by $10.5 million and the aggregate of the service and
interest cost components of net periodic postretirement benefit cost for the
year then ended by $1.0 million.
The weighted-average discount rate used in determining the accumulated
postretirement benefit obligation was 7.75 percent. The discount rate for
1993 was determined by analyzing the interest rates, as of December 31, 1993,
of the long-term, high-quality corporate debt securities having a duration
comparable to that of the plan.
CL&P has received approval from the DPUC to defer and recover the incremental
SFAS 106 postretirement costs within eight years.
<F12>
11. COMMITMENTS AND CONTINGENCIES
CONSTRUCTION PROGRAM
The construction program is subject to periodic review and revision. Actual
construction expenditures may vary from such estimates due to factors such as
revised load estimates, inflation, revised nuclear safety regulations,
delays, difficulties in the licensing process, the availability and cost of
capital, and the granting of timely and adequate rate relief by regulatory
commissions, as well as actions by other regulatory bodies.
CL&P currently forecasts construction expenditures (including AFUDC) of
approximately $741.8 million for the years 1994-1998, including $157.8
million for 1994. In addition, the company estimates that nuclear fuel
requirements, including nuclear fuel financed through the NBFT, will be
approximately $317.7 million for the years 1994-1998, including $74.6 million
for 1994. See <F3> Note 2, "Leases," for additional information about the
financing of nuclear fuel.
NUCLEAR PERFORMANCE
Outages that occurred over the period October 1990 through February 1992 at
the Millstone nuclear units have been the subject of five ongoing prudence
reviews in Connecticut. CL&P has received final decisions on four of the
reviews. The Office of Consumer Counsel has appealed decisions favorable to
the company in two dockets. The exposure under these two dockets is
approximately $66 million. The DPUC has suspended a third docket, pending
the outcome of one of the appeals. The exposure under this docket is $26
million. The only remaining nuclear outage prudence docket before the DPUC
is the docket established to review the 1992 outage at Millstone 2 to replace
the steam generators. A decision is expected in late 1994. Management
believes that its actions with respect to these outages have been prudent,
and it does not expect the outcome of the prudence reviews to result in
material disallowances.
ENVIRONMENTAL MATTERS
CL&P is subject to regulation by federal, state, and local authorities with
respect to air and water quality, handling and the disposal of toxic
substances and hazardous and solid wastes, and the handling and use of
chemical products. CL&P has an active environmental auditing program to
prevent, detect, and remedy noncompliance with environmental laws or
regulations and believes that it is in substantial compliance with current
environmental laws and regulations. Changing
<PAGE>25
environmental requirements could hinder the construction of new fossil-fuel
environmental generating units, transmission, and distribution lines,
substations, and other facilities. The cumulative long-term economic cost
impact of increasingly stringent environmental requirements cannot be
estimated. Changing environmental requirements could also require extensive
and costly modifications to CL&P's existing hydro, nuclear, and fossil-fuel
generating units, and transmission and distribution systems, and could raise
operating costs significantly. As a result, CL&P may incur significant
additional environmental costs, greater than amounts included in cost of
removal and other reserves, in connection with the generation and
transmission of electricity and the storage, transportation, and disposal of
by-products and wastes. CL&P may also encounter significantly increased
costs to remedy the environmental effects of prior waste handling and
disposal activities.
CL&P has recorded a liability for what it believes is, based upon information
currently available, the estimated environmental remediation costs for waste
disposal sites for which it expects to bear legal liability. To date, these
costs have not been material with respect to the earnings or financial
position of the company. In most cases, the extent of additional future
environmental cleanup costs is not estimable due to factors such as the
unknown magnitude of possible contamination, the appropriate remediation
method, the possible effects of future legislation and regulation, the
possible effects of technological changes related to future cleanup, and the
difficulty of determining future liability, if any, for the cleanup of sites
at which CL&P has been informed that it may be determined to be legally
liable by the federal or state environmental agencies. In addition, CL&P
cannot estimate the potential liability for future claims that may be brought
against it by private parties. However, considering known facts and existing
laws and regulatory practices, management does not believe that such matters
will have a material adverse effect on CL&P's financial position or future
results of operations. At December 31, 1993, the liability recorded by CL&P
for its estimated environmental remediation costs, excluding any possible
insurance recoveries or recoveries from third parties, amounted to $2.9
million. However, in the event that it becomes necessary to effect
environmental remedies that are currently not considered probable for the
sites for which CL&P has recorded a liability, it is reasonably possible
that, based on information currently available and management intent, that
the upper limit of CL&P's environmental liability range could increase to
approximately $5.8 million.
NUCLEAR INSURANCE CONTINGENCIES
The Price-Anderson Act currently limits public liability from a single
incident at a nuclear power plant to $9.4 billion. The first $200 million of
liability would be provided by purchasing the maximum amount of commercially
available insurance. Additional coverage of up to a total of $8.8 billion
would be provided by an assessment of $75.5 million per incident, levied on
each of the 116 nuclear units that are currently subject to the Secondary
Financial Protection Program in the United States, subject to a maximum
assessment of $10 million per incident per nuclear unit in any year. In
addition, if the sum of all public liability claims and legal costs arising
from any nuclear incident exceeds the maximum amount of financial protection,
each reactor operator can be assessed an additional 5 percent, up to $3.8
million, or $437.9 million in total, for all 116 nuclear units. The maximum
assessment is to be adjusted at least every five years to reflect
inflationary changes. Based on CL&P's ownership interests in Millstone 1, 2,
and 3, and Seabrook 1, CL&P's maximum liability would be $173.6 million per
incident. In addition, through CL&P's power purchase contracts with the four
Yankee regional nuclear generating companies, CL&P would be responsible for
up to an additional $63.8 million per incident. Payments for CL&P's
ownership interest in nuclear generating facilities would be limited to a
maximum of $29.9 million per incident per year.
<PAGE>26
Insurance has been purchased from Nuclear Electric Insurance Limited (NEIL)
to cover: (1) certain extra costs incurred in obtaining replacement power
during prolonged accidental outages with respect to CL&P's ownership
interests in Millstone 1, 2, and 3, Seabrook 1, and CY; and (2) the cost of
repair, replacement, or decontamination or premature decommissioning of
utility property resulting from occurrences with respect to CL&P's ownership
interests in Millstone 1, 2, and 3, Seabrook 1, CY, MY, and VY. All
companies insured with NEIL are subject to retroactive assessments if losses
exceed the accumulated funds available to NEIL. The maximum potential
assessments against CL&P, with respect to losses arising during current
policy years are approximately $9.7 million under the replacement power
policies and $18.9 million under the property damage, decontamination, and
decommissioning policies. Although CL&P has purchased the limits of coverage
currently available from the conventional nuclear insurance pools, the cost
of a nuclear incident could exceed available insurance proceeds.
Insurance has been purchased from American Nuclear Insurers/Mutual Atomic
Energy Liability Underwriters, aggregating $200 million on an industry basis
for coverage of worker claims. All companies insured under this coverage are
subject to retrospective assessments of $3.2 million per reactor. The
maximum potential assessments against CL&P with respect to losses arising
during the current policy period are approximately $9.6 million.
FINANCING ARRANGEMENTS FOR THE REGIONAL NUCLEAR GENERATING COMPANIES
CL&P believes that the regional nuclear generating companies may require
additional external financing in the next several years for construction
expenditures, nuclear fuel, possible refinancings, and other purposes.
Although the ways in which each regional nuclear generating company will
attempt to finance these expenditures has not been determined, CL&P may be
asked to provide direct or indirect financial support for one or more of
these companies.
PURCHASED POWER ARRANGEMENTS
CL&P purchases a portion of its electricity requirements pursuant to long-
term contracts with the Yankee companies. Under the terms of its agreements,
the company pays its ownership share (or entitlement share) of generating
costs, which include depreciation, operation and maintenance expenses, the
estimated cost of decommissioning, and a return on invested capital. These
costs are recorded as purchased power expense, and are recovered through the
company's rates. The total cost of purchases under these contracts for the
units that are operating amounted to $112.3 million in 1993, $103.2 million
in 1992, and $99.7 million in 1991. See <F2> Note 1, "Summary Of Significant
Accounting Policies - Investments and Jointly Owned Electric Utility Plant"
and <F4> Note 3, "Nuclear Decommissioning" for more information on the Yankee
companies.
CL&P has entered into various arrangements for the purchase of capacity and
energy from nonutility generators. Some of these arrangements generally have
terms from 10 to 30 years, and require the company to purchase the energy at
specified prices or formula rates. For the 12 months ended December 31,
1993, 14 percent of NU system load requirements was met by cogenerators and
small power producers. The total cost of purchases under these arrangements
amounted to $279.8 million in 1993, $267.3 million in 1992, and $237.6
million in 1991. These costs are eventually recovered through the company's
rates.
<PAGE>27
The estimated annual cost of CL&P's significant purchase power arrangements
is provided below:
(In Millions)
- --------------------------------------------------------------------------
1994 1995 1996 1997 1998
---- ---- ---- ---- ----
Yankee companies $106.6 $109.2 $121.5 $111.8 $126.5
Nonutility generators 293.7 303.3 313.1 318.6 324.9
- --------------------------------------------------------------------------
HYDRO-QUEBEC
Along with other New England utilities, CL&P, PSNH, WMECO, and HWP entered
into agreements to support transmission and terminal facilities to import
electricity from the Hydro-Quebec system in Canada. CL&P, PSNH, WMECO, and
HWP, in the aggregate, are obligated to pay, over a 30-year period, their
proportionate share of the annual operation, maintenance, and capital costs
of these facilities, which are currently forecast to be $172.1 million for
the years 1994-1998, including $37.2 million for 1994.
GREAT BAY POWER CORPORATION
CL&P and The United Illuminating Company, an unaffiliated company, have
agreed to make certain advances up to $20 million to cover shortfalls in the
funding of the 12.13 percent ownership interest in Seabrook 1 of Great Bay
Power Corporation, an unaffiliated company. CL&P's share of this commitment
is limited to 60 percent of the advances, or $12 million. As of December 31,
1993, $1,047,000 of advances from CL&P were outstanding under this agreement.
PROPERTY TAXES
CY has a significant court appeal pending for its property tax assessment in
the town of Haddam, Connecticut, concerning production plant. The central
issue is the fair market value of utility property. The company believes
that a properly derived assessment that recognizes the effect of rate
regulation will result in a fair market value that approximates net book
cost. This is the assessment level that taxing authorities are predominantly
using throughout Connecticut, Massachusetts, and some of New Hampshire.
However, towns such as Haddam advocate a method that approximates
reproduction cost. The company estimates that,for the Haddam assessment, the
change to a reproduction cost-methodology could result in a property tax
valuation approximately three times greater than a value approximating net
book cost. Although CY is currently paying property taxes based on the
higher assessment, to date, the higher assessment has not had a material
adverse effect on it or the company.
The company believes that assessment levels that approximate net book cost
accurately reflect the fair market value of regulated utility property.
However, because of uncertainties associated with the court appeal and the
potential impact of an adverse court decision on property tax assessment
policy in Connecticut, the company cannot estimate the potential effect of an
adverse court decision on future results of operations or financial
condition. However, the company believes that, based upon past regulatory
practices, it would be allowed to recover any increased property tax
assessment prospectively beginning at the time new rates are established.
<PAGE>28
<F13>
12. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used to estimate the fair value of
each of the following financial instruments:
Cash, special deposits, and nuclear decommissioning trusts: The carrying
amounts approximate fair value.
Preferred stock and long-term debt: The fair value of CL&P's fixed rate
securities is based upon the quoted market price for those issues or similar
issues. Adjustable rate securities are assumed to have a fair value equal to
their carrying value.
The carrying amounts of CL&P's financial instruments and the estimated fair
values are as follows:
- ----------------------------------------------------------------------------
Carrying Fair
At December 31, 1993 Amount Value
- ----------------------------------------------------------------------------
(Thousands of Dollars)
Preferred stock not subject to mandatory
redemption . . . . . . . . . . . . . . . . . $ 166,200 $ 128,826
Preferred stock subject to mandatory
redemption . . . . . . . . . . . . . . . . . 230,000 240,400
Long-term debt:
First Mortgage Bonds . . . . . . . . . . . . 1,532,000 1,580,396
Other long-term debt . . . . . . . . . . . . 533,442 539,518
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Carrying Fair
At December 31, 1992 Amount Value
- --------------------------------------------------------------------------
(Thousands of Dollars)
Preferred stock not subject to mandatory
redemption . . . . . . . . . . . . . . . . . $ 231,196 $ 184,910
Preferred stock subject to mandatory
redemption . . . . . . . . . . . . . . . . . 200,000 208,750
Long-term debt:
First Mortgage Bonds . . . . . . . . . . . . 1,547,000 1,594,643
Other long-term debt . . . . . . . . . . . . 545,805 545,805
- --------------------------------------------------------------------------
<PAGE>29
The fair values shown above have been reported to meet disclosure
requirements and do not purport to represent the amounts that those
obligations would be settled at.
In May 1993, the FASB issued Statement of Financial Accounting Standards No.
115, "Accounting for Certain Investments in Debt and Equity Securities (SFAS
115)." SFAS 115 requires companies to disclose the classification of
investments in debt or equity securities based on management's intent and
ability to hold the security. SFAS 115 also requires disclosure of the
aggregate fair value, gross unrealized holding gains, gross unrealized
holding losses and amortized cost basis by major security type. Effective
January 1, 1994, CL&P will adopt SFAS 115 on a prospective basis. CL&P
anticipates that the adoption of SFAS 115 will not have a material impact on
future results of operations or financial position.
<PAGE>30
THE CONNECTICUT LIGHT AND POWER COMPANY
- -----------------------------------------------------------------------------
Report of Independent Public Accountants
- -----------------------------------------------------------------------------
To the Board of Directors
of The Connecticut Light and Power Company:
We have audited the accompanying balance sheets of The Connecticut Light and
Power Company (a Connecticut corporation and a wholly owned subsidiary of
Northeast Utilities) as of December 31, 1993 and 1992, and the related
statements of income, common stockholder's equity and cash flows for each of
the three years in the period ended December 31, 1993. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of The Connecticut Light and
Power Company as of December 31, 1993 and 1992, and the results of its
operations and cash flows for each of the three years in the period ended
December 31, 1993, in conformity with generally accepted accounting
principles.
As discussed in <F2> Note 1 to the Financial Statements, "Summary of
Significant Accounting Policies-Accounting Changes," effective January 1, 1993,
The Connecticut Light and Power Company changed its methods of accounting for
property taxes, income taxes, and postretirement benefits other than
pensions.
/s/Arthur Andersen & Co.
ARTHUR ANDERSEN & CO.
Hartford, Connecticut
February 18, 1994
<PAGE>31
THE CONNECTICUT LIGHT AND POWER COMPANY
- -----------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
- -----------------------------------------------------------------------------
This section contains management's assessment of The Connecticut Light and
Power Company's (CL&P or the company) financial condition and the principal
factors having an impact on the results of operations. The company is a
wholly-owned subsidiary of Northeast Utilities (NU). This discussion should
be read in conjunction with the company's financial statements and footnotes.
FINANCIAL CONDITION
OVERVIEW
The company's net income decreased to $191.4 million in 1993 from $206.7
million in 1992. The 1993 net income reflects the cumulative effect of a
change in the accounting for Connecticut municipal property taxes. The
company adopted a one-time change in the method of accounting for municipal
property tax expense in the first quarter of 1993. This change resulted in a
one-time contribution to net income of $47.7 million.
See the "Notes to Financial Statements" for further information on the
property tax accounting change.
Net income before the cumulative effect of the change in accounting for
property taxes was $143.7 million in 1993. The decrease from 1992 is
primarily attributable to one-time impacts of (a) disallowances ordered by
the Department of Public Utility Control (DPUC) in the 1993 rate case
decision and (b) the $10 million charge to earnings in the third quarter of
1993 for the costs of the company's employee reduction program. Other items
that affected net income in 1993 include increased revenues from the 1993
retail rate increase and the company's continued cost-management efforts.
These increases were offset by higher costs for the recovery of regulatory
deferrals and the higher contribution in 1992 of energy transactions with
other utilities.
The year 1993 was one of both challenge and success for the company. CL&P's
work force was reduced by about 11 percent in 1993 through an employee
reduction program that involved early retirements and involuntary
terminations. The 1993 composite nuclear capacity factor of 80.8 percent was
the highest level the NU system has ever achieved and far above the national
average. The DPUC approved a three-year rate plan that weakened 1993
earnings but will assure CL&P customers rate stability over the next few
years which will help to improve CL&P's future earnings and competitive
position.
In 1994, CL&P will continue to face challenges associated with a lagging
economy and competition. Retail sales for 1993 were flat, as compared to
1992, as a result of a stagnant Connecticut economy. The company expects
retail sales growth of about two percent in 1994, based on some modest
improvement in the economy.
Competition within the electric utility industry is increasing. In response,
CL&P has developed, and is continuing to develop, a number of initiatives to
retain and continue to serve its existing customers and to expand its retail
and wholesale customer base. These initiatives are aimed at keeping
customers from either leaving CL&P's retail service territory or replacing
CL&P's electric service with alternative energy sources.
The cost of doing business, including the price of electricity, is higher in
the Northeast than in most other parts of the country. Relatively high state
and local taxes, labor costs, and other costs of doing business in New
England also contribute to competitive disadvantages for many industrial and
commercial customers of CL&P. These disadvantages have aggravated the
pressures on business customers in the current weakened
<PAGE>32
regional economy. Since 1991, the company has worked actively with the
Connecticut Department of Economic Development to package development
incentives for a variety of retail and wholesale customers. These economic
development packages typically include both electric rate discounts and
incentive payments for energy-efficient construction, as well as technical
support and energy conservation services. Targeted reductions in effect at
the end of 1993 to a limited group of large customers were successful in
preserving CL&P revenues of approximately $28 million. The amount of
discounts provided to customers are expected to increase as the company
intensifies its efforts to retain existing customers and gain new customers.
As a result of very limited load growth throughout the Northeast and the
operation of several new generating plants in the past five years, wholesale
competition has grown, and a seller's market for electricity has turned into
a buyer's market. The prices the company has been able to receive for new
wholesale sales have generally been far lower than the prices prevalent in
1988 and 1989. In future years, competition in the Northeast is expected to
increase, putting further downward pressure on prices. However, the
potential price decreases may be offset somewhat by an
improvement in the region's economy as well as by the retirement of a number
of the region's existing generating facilities.
The ability of retail customers to select an electricity supplier and then
force the local electric utility to transmit the power to the customer's site
is known as "retail wheeling". While wholesale wheeling is mandated by the
Energy Policy Act of 1992 under certain circumstances, retail wheeling is
generally not required in the company's jurisdiction. In Connecticut, the
DPUC has begun an investigation into the viability of retail wheeling.
NU management has taken steps to make the NU system companies, including
CL&P, more competitive and profitable in the changing utility environment. A
systemwide emphasis on improved customer service is a central focus of the
reorganization of NU that became effective on January 1, 1994. The
reorganization entails realignment of the system into two new core business
groups. The first core business group is devoted to energy resource
acquisition and wholesale marketing and focuses on nuclear, fossil, and
hydroelectric generation, wholesale power marketing, and new business
development. The second core business group oversees all customer service,
transmission and distribution operations, and retail marketing in
Connecticut, New Hampshire, and Massachusetts. These two core business
groups are served by various support functions.
In connection with NU's reorganization, a corporate reengineering process has
begun which should help the company to identify opportunities to become more
competitive while improving customer service and maintaining excellent
operational performance. NU has aggressive cost-reduction targets over the
next three years, which should enable the company to remain competitive by
reducing prices to vulnerable customers in particular.
To date, the company has not been materially affected by competition, and it
does not foresee substantial adverse effect in the near future, unless the
current regulatory structure is substantially altered. The company believes
the steps it is taking will have significant, positive effects in the next
few years. In addition, CL&P benefits from a diverse retail base. The
company has no significant dependence on any one customer or industry. The
NU system's extensive transmission facilities and diversified generating
capacity are all strong positive factors in the regional wholesale power
market. NU serves about 30 percent of New England's electric needs and is
one of the 20 largest electric utility systems in the country.
Achieving measurable improvement in earnings in 1994, will depend, in part,
on the success of the company's wholesale power marketing customer retention
and reengineering efforts.
<PAGE>33
RATE MATTERS
Deferred charges at December 31, 1993 were $1.5 billion, which includes $1.0
billion for the adoption in 1993 of Statement of Financial Accounting
Standards (SFAS) No. 109, "Accounting for Income Taxes." Deferred charges,
excluding the regulatory asset for SFAS No. 109 decreased almost $90 million
in 1993. Recoveries for the deferred costs of Millstone 3, Seabrook, and the
Yankee Atomic Electric Company (YAEC) contract obligation and reductions in
deferred energy costs were partially offset by increased deferrals for
conservation and load management costs. The company is currently recovering
some amounts of its remaining deferred charges from customers. Management
expects that substantially all of the deferred charges will be recovered
through future rates.
Under SFAS No. 109, the company reflected a regulatory asset and a deferred
tax liability for the cumulative amount of income taxes associated with
timing differences for which deferred taxes had not been provided but are
expected to be recovered from customers in the future. The adoption of SFAS
No. 109 has not had a material effect on results of operations.
The company also adopted SFAS No. 106, "Employer's Accounting for
Postretirement Benefits Other Than Pensions" in 1993. Adopting SFAS No. 106
has not had a material impact on financial condition or results of
operations, because the company has received approval from the DPUC to defer
these costs and expects to recover these costs in the future.
See the "Notes To Financial Statements" for further details on deferred
charges and recently adopted accounting standards.
On June 16, 1993, the DPUC issued a final decision in CL&P's December 1992
retail rate case (the rate decision) approving a multiyear rate plan which
provides for annual rate increases of $46 million, or 2.01 percent, in July
1993; $47.1 million, or 2.04 percent, in July 1994; and $48.2 million, or
2.06 percent, in July 1995. The total cumulative increase granted of $141.3
million, or 6.1 percent, was approximately 42 percent of CL&P's updated
request.
In light of the State of Connecticut's concern over economic development and
industrial and commercial rates, one important aspect of the rate case was
that industrial and manufacturing rates will only rise by about 1.1 percent
annually over the three year period. Other significant aspects of the rate
decision included the reduction of CL&P's return on equity (ROE) from 12.9
percent to 11.5 percent for the first year of the multiyear plan, 11.6
percent for the second year, and 11.7 percent for the third year; a 32-month
phase-in beginning in 1995 of CL&P's nonpension, postretirement benefit costs
required to be recognized under SFAS No. 106 with amortization of deferred
amounts over five years; the three-year phase-in of the Millstone 2 steam
generators; the deferral of cogeneration expenses with carrying costs of
$42.1 million in fiscal year 1994 and $20.9 million in fiscal year 1995 with
recovery over five years beginning July 1, 1996; and the full recovery of the
remaining costs of the Millstone 3 and Seabrook phase-ins(balance of $185.9
million at December 31, 1993).
The rate decision used $49 million of prior fuel overrecoveries to offset a
similar amount of the unrecovered replacement power costs under CL&P's
Generation Utilization Adjustment Clause (GUAC). The GUAC has been in
operation since 1979 and was designed as a mechanism to recover or to refund
certain fuel costs if the nuclear plants do not operate at a predetermined
capacity factor. In January 1994, the DPUC issued a decision ordering CL&P
not to include a GUAC amount in customers' bills through August 1994. The
DPUC found that CL&P overrecovered its fuel costs during the 1992-1993 GUAC
period and offset the amount of the overrecovery against the unrecovered GUAC
balance. The effect of the order was a disallowance of $7.9 million. The
DPUC further ordered that any GUAC deferred charges subsequent to July 1993
will be offset by any fuel overrecoveries. There is an unrecovered GUAC
balance at December 31, 1993 of $13.7 million but there is not expected to be
an unrecovered balance at the end of the GUAC period in August 1994. The
DPUC's decision creates some uncertainty about the future operation of the
GUAC. CL&P
<PAGE>34
has requested further clarification of the decision, and has appealed it, but
does not expect that the decision will have a material adverse effect on
future results of operations.
The rate decision also required CL&P to allocate to customers a portion of
the property tax accounting change made in the first quarter of 1993, which
resulted in a charge against other income of $10.2 million in the second
quarter of 1993.
In August 1993, two appeals were filed from the DPUC's June 1993 rate
decision. CL&P appealed four issues from the decision. The second appeal
was filed by the Connecticut Office of Consumer Council (OCC) and the City of
Hartford. This appeal challenges the legality of the multi-year plan
accepted by the DPUC. CL&P has filed a motion to dismiss this appeal on
jurisdictional grounds. In addition, the Court rejected the City of
Hartford's and OCC's motion to stay implementation of the second and third
year of the rate plan pending the outcome of their appeal.
Outages that occurred over the period October 1990 through February 1992 at
the Millstone nuclear units have been the subject of five ongoing prudence
reviews in Connecticut. CL&P has received final decisions on four of the
reviews. The OCC has appealed decisions favorable to the company in two
dockets. The exposure under these two dockets is approximately $66 million.
The DPUC has suspended a third docket, pending the outcome of one of the
appeals. The exposure under this docket is $26 million. The only remaining
nuclear outage prudence docket before the DPUC is the docket established to
review the 1992 nuclear outage at Millstone 2 to replace the steam
generators. A decision is expected in late 1994. Management believes that
its actions with respect to these outages have been prudent, and it does not
expect the outcome of the prudence reviews to result in material
disallowances.
In April 1993, the DPUC issued an order approving a new Conservation
Adjustment Mechanism (CAM), which allowed CL&P to recover Conservation and
Load Management (C&LM) expenditures over an eight-year period (reduced from
ten years) and reaffirmed program performance incentives. In December 1993,
CL&P filed a proposed CAM settlement with the DPUC. The settlement proposes
1994 C&LM expenditures of $39 million, reduction in the recovery period from
8 to 3.85 years and other changes in program designs, performance incentives
and cost recovery. Unrecovered C&LM costs at December 31, 1993, were $111.4
million.
ENVIRONMENTAL MATTERS
The NU system devotes substantial resources to identify and then to meet the
multitude of environmental requirements it faces. The system has active
auditing programs addressing a variety of different regulatory requirements,
including an environmental auditing program to detect and remedy
noncompliance with environmental laws or regulations.
The company is potentially liable for environmental cleanup costs at a number
of sites both inside and outside of its service territory. To date, the
future estimated environmental remediation costs for these sites for which
the company expects some legal liability have not been material with respect
to the earnings or financial position of CL&P. At December 31, 1993, the
liability recorded by CL&P for its estimated environmental remediation costs,
excluding any possible insurance recoveries or recoveries from third parties,
amounted to approximately $2.9 million. However, while not probable, it is
reasonably possible that these costs could rise to as much as $5.8 million.
The extent of additional future environmental cleanup costs is not estimable
due to factors such as the unknown magnitude of possible contamination and
changes in existing laws and regulatory practices.
The company expects that the implementation of Phase I of the 1990 Clean Air
Act Amendments will require only modest emissions reductions. CL&P's
exposure is minimal because of its investment in nuclear energy in the 1970s
and 1980s and the burning of low-sulfur fuels. The costs for meeting the
Phase II requirements cannot be estimated at this time because the emission
limits have not been determined.
<PAGE>35
The company's estimated cost of decommissioning its shares of Millstone Units
1, 2, and 3 and Seabrook is approximately $801 million in year end 1993
dollars. In addition, the company's estimated cost to decommission its
shares of the regional nuclear units is estimated to be approximately $185 to
$189 million. Decommissioning costs are recovered and recognized over the
lives of the respective units. YAEC has begun decommissioning its nuclear
facility. The company's estimated obligation to YAEC has been recorded on
its Balance Sheets. Management expects that the company will continue to be
allowed to recover these costs.
For further information regarding nuclear decommissioning, environmental
matters, and other contingencies, see the "Notes to Financial Statements."
NUCLEAR PERFORMANCE
The composite capacity factor of the five nuclear generating units that the
NU system operates (including the Connecticut Yankee nuclear unit) was 80.8
percent for 1993, compared with 63.7 percent in 1992 and a national average
of 70.6 percent for 1993. The lower 1992 capacity factor was primarily the
result of the 1992 Millstone 2 steam generator replacement outage and some
unexpected technical and operating difficulties.
In 1993, NU was informed by the Nuclear Regulatory Commission (NRC) of three
apparent violations related to the circumstances surrounding the repair of a
leaking valve in the reactor coolant system at the Millstone 2 nuclear power
station. Millstone 2 was shutdown on August 5, 1993, when extensive repair
efforts proved unsuccessful and the valve began to leak at a level beyond
operating requirements. NU was assessed and paid a civil penalty of $237,500
for the three violations that were identified during the NRC investigation.
NU has initiated a number of immediate and long-term actions designed to
further enhance the safe operation of all the NU nuclear plants. In an
effort to improve nuclear performance, NU management announced a
reorganization of its Connecticut-based nuclear organization in November
1993. The reorganization, which is based on an overview of NU's future
nuclear operational needs, resulted in a number of personnel changes,
including the appointment of a new senior vice president of Millstone
Station, realignment of engineering operations along unit lines and
management consolidation. In addition, centralization of the nuclear
engineering function at the generating stations is expected to occur during
the summer of 1994. No material expense will be incurred by the company in
connection with the reorganization.
LIQUIDITY AND CAPITAL RESOURCES
Cash provided from operations increased $136.5 million in 1993, compared with
the same period in 1992, primarily due to increased revenues in 1993 from the
rate increase and for the recovery of replacement power costs under the GUAC.
Cash used for financing activities was $219.9 million higher in 1993,
compared with the same period in 1992, primarily due to a net decrease in
short-term debt, long-term debt, and preferred stock. Cash used for
investments was $66.2 million lower in 1993, compared with the same period in
1992, primarily due to lower construction expenditures in 1993.
The company has been able to shift its financing focus to
refinancing
outstanding high-cost securities. Internally generated cash has generally
been, and is projected to continue to be, more than sufficient to cover
construction costs. The forecast through 1998 shows additional new
financings only in years with a large amount of securities maturing. CL&P
may issue up to $200 million in 1994 to finance maturing debt. The company
is obligated to meet $581 million of long-term debt and preferred stock
maturities and cash sinking-fund requirements for the 1994 through 1998
period, including $189 million for 1994. Also, $125 million of First
Mortgage Bonds outstanding at December 31, 1993 has been called in December
1993 for redemption in 1994.
Aggressive refinancing of its outstanding high-cost securities has enabled
the company to lower its cost of debt. There was no new money financing in
1993. To take advantage of favorable market conditions during
<PAGE>36
1993, the company refinanced $425 million of First Mortgage Bonds, $110
million of preferred stock and $135.5 million of pollution control bonds, in
addition to restructuring the company's various credit lines. It is
estimated that the 1993 refinancings and restructuring will save the company
approximately $15 million per year. The company intends, if market
conditions permit, to continue to refinance a portion of its outstanding
long-term debt and preferred stock at lower effective cost.
On February 17, 1994, CL&P issued two new First Mortgage Bonds, the $140
million 1994 Series A and the $140 million 1994 Series B Bonds, at annual
rates of 5.50 percent and 6.125 percent, respectively. The Series A Bond
will mature on February 1, 1999, and the Series B Bond will mature on
February 1, 2004. Proceeds from these issues, together with proceeds from
short-term debt, will be used to redeem $310 million of outstanding bonds
with interest rates ranging from 5.625 percent to 7.625 percent. Savings
from the refinancings are estimated to be approximately $4.5 million per year
in reduced interest rates.
The company's construction program expenditures, including allowance for
funds used during construction (AFUDC), for the period 1994 through 1998 are
estimated to be approximately $742 million, including $158 million for 1994.
The construction program's main focus is maintaining and upgrading the
existing transmission and distribution system as well as the nuclear and
fossil-generating facilities. The company does not foresee the need for new
major generating facilities, at least until the year 2007.
CL&P and WMECO utilize a nuclear fuel trust to finance nuclear fuel
requirements for Millstone 1, 2, and 3. Nuclear fuel requirements, including
nuclear fuel financed through the trust, are estimated to be approximately
$318 million for the period 1994 through 1998, including $75 million for
1994.
<PAGE>37
RESULTS OF OPERATIONS
Change in Operating Revenues
Increase/(Decrease)
- ----------------------------------------------------------------- ------
1993 vs. 1992 1992 vs. 1991
- ----------------------------------------------------------------- ------
(Millions of Dollars)
Regulatory decisions $34.2 $72.7
Fuel and purchased power
cost recoveries 1.9 20.0
Sales volume 3.0 5.4
Other revenues 10.5 (57.4)
----- ------
Total revenue change $49.6 $40.7
===== =====
OPERATING REVENUES
The components of the change in operating revenues for the past two years are
provided in the table above.
Operating revenues increased $49.6 million from 1992 to 1993. Revenues
related to regulatory decisions increased in 1993, primarily because of the
effects of the June 1993 DPUC retail rate increase and higher revenues under
the CAM. Retail sales were essentially flat in 1993. Other revenues
increased primarily because of higher 1993 capacity interchange sales.
Operating revenues increased $40.7 million from 1991 to 1992. Revenues
related to regulatory decisions increased in 1992 primarily because of the
effect of the August 1991 DPUC retail rate increase. Fuel and purchased-
power cost recoveries increased primarily due to the timing in the recovery
of fuel expenses under the provisions of CL&P's fuel adjustment clauses.
Retail sales in 1992 were slightly higher than 1991. Other revenues
decreased primarily because of 1992 capacity sales to other utilities that
took place at lower prices per kilowatt-hour and the 1991 one-time
reimbursement of costs associated with the reactivation of fossil-generating
units.
FUEL, PURCHASED, AND NET INTERCHANGE POWER
Fuel, purchased, and net interchange power increased $58.8 million in 1993,
as compared to 1992, primarily due to the timing in the recovery of fuel
expenses under the provisions of the company's fuel adjustment clauses and
disallowances of replacement power costs deferred under the GUAC, partially
offset by lower outside purchases due to better nuclear performance in 1993.
Fuel, purchased, and net interchange power increased $39.2 million in 1992,
as compared to 1991, primarily due to the timing in the recovery of fuel
expenses under the provisions of the company's fuel adjustment clauses, and
previously deferred replacement power costs that are not recoverable as a
result of regulatory reviews.
OTHER OPERATION AND MAINTENANCE EXPENSES
Other operation and maintenance expenses increased $18.7 million in 1993, as
compared to 1992, primarily due to the one-time costs in 1993 associated with
the employee reduction program and 1993 SFAS No. 106 postretirement benefit
costs prior to the DPUC order allowing the deferral of these costs, partially
offset by lower 1993 costs associated with the operation and maintenance
activities of the nuclear units.
<PAGE>38
Other operation and maintenance expenses increased $4.0 million in 1992, as
compared to 1991, primarily due to higher 1992 costs of operation and
maintenance activities at nuclear units, partially offset by the 1991 costs
associated with a voluntary early retirement program, and lower 1992
conservation expenses.
DEPRECIATION EXPENSES
Depreciation expenses increased $9.9 million in 1993, as compared to 1992,
and $11.3 million in 1992, as compared to 1991, primarily as a result of
higher depreciation rates, higher depreciable plant balances, and higher
decommissioning levels in 1992 as compared to 1991.
AMORTIZATION OF REGULATORY ASSETS, NET
Amortization of regulatory assets, net increased $38.9 million in 1993, as
compared to 1992, and $17.8 million in 1992, as compared to 1991, primarily
because of higher amortization of Millstone 3 and Seabrook deferred costs.
The increase in 1993 is also attributable to the gross-up of taxes due to
SFAS No. 109, and the amortization in 1993 of costs paid by CL&P to the
developers of two wood-to-energy plants as allowed in the recent rate
decision. CL&P was allowed to collect and amortize $17.9 million of
previously deferred costs over the one-year period beginning July 1993.
FEDERAL AND STATE INCOME TAXES
Federal and State income taxes, net decreased $21.4 million in 1993, as
compared to 1992, primarily because of lower book taxable income and higher
investment tax credit amortization, partially offset by an increase in flow-
through depreciation.
TAXES OTHER THAN INCOME TAXES
Taxes other than income taxes increased $5.4 million in 1992, as compared to
1991, primarily due to higher property taxes and higher Connecticut gross
earnings taxes due to higher revenues.
DEFERRED NUCLEAR PLANTS RETURN
Deferred nuclear plants return decreased $10.8 million in 1993, as compared
to 1992, and $6.3 million in 1992, as compared to 1991, primarily because of
a decrease in Millstone 3 deferred return because additional Millstone 3
investment was phased into rates.
OTHER INCOME, NET
Other income, net decreased $8.0 million in 1993, as compared to 1992,
primarily because of the allocation to customers of a portion of the property
tax accounting change as ordered by the DPUC in the rate decision and lower
AFUDC.
INTEREST CHARGES
Interest on long-term debt increased $17.1 million in 1993, as compared to
1992 and $14.9 million in 1992, compared to 1991, primarily because of lower
average interest rates as a result of the substantial refinancing activity.
Other interest charges increased $5.4 million in 1993, as compared to 1992,
primarily because of higher interest on short-term borrowings, lower AFUDC
for borrowed funds and interest recognized for a potential Connecticut sales
tax assessment.
<PAGE>39
THE CONNECTICUT LIGHT AND POWER COMPANY
- -----------------------------------------------------------------------------
- -----------------------
SELECTED FINANCIAL DATA
- -----------------------------------------------------------------------------
- -----------------------
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
- -----------------------
Years Ended December 31, 1993 1992 1991
1990 1989
- -----------------------------------------------------------------------------
- -----------------------
(Thousands of Dollars)
<S> <C> <C> <C> <C>
<C>
Continuing Operations:
Operating Revenues. . . . . . $2,366,050 $2,316,451 $2,275,737
$2,170,087 $2,069,559
Operating Income. . . . . . . 240,095 287,811 323,835
320,641 327,220
Net Income. . . . . . . . . . 191,449 206,714 240,818
224,783 207,875
Discontinued Gas
Operations:
Operating Revenues . . . . . - - -
- 124,229
Operating Income . . . . . . - - -
- 12,563
Net Income . . . . . . . . . - - -
- 6,630
Cash Dividends on
Common Stock. . . . . . . . . 160,365 164,277 172,587
179,921 155,972
Total Assets . . . . . . . . . 6,397,380 5,582,806 5,338,441
5,176,784 5,148,120
Long-Term Debt*. . . . . . . . 2,057,280 2,087,936 2,023,268
2,101,334 2,147,892
Preferred Stock Not
Subject to Mandatory
Redemption. . . . . . . . . . 166,200 231,196 306,195
306,195 306,195
Preferred Stock
Subject to Mandatory
Redemption* . . . . . . . . . 230,000 200,000 141,892
146,892 151,892
Obligations Under
Capital Leases* . . . . . . . 177,418 197,404 208,924
233,919 252,652
*Includes portions due within one year.
</TABLE>
- -----------------------------------------------------------------------------
- -----------------------
STATEMENTS OF QUARTERLY FINANCIAL DATA (Unaudited)
- -----------------------------------------------------------------------------
- -----------------------
<TABLE>
<CAPTION>
Quarter Ended
- -----------------------------------------------------------------------------
- -----------------------
1993 March 31 June 30 September
30 December 31
- -----------------------------------------------------------------------------
- -----------------------
(Thousands of Dollars)
<S> <C> <C> <C>
<C>
Operating Revenues. . . . . . . $627,134 $559,894 $604,343
$574,679
======== ======== ========
========
Operating Income. . . . . . . . $ 67,201 $ 47,775 $58,321
$ 66,798
======== ======== ========
========
Net Income. . . . . . . . . . . $ 91,596 $ 13,775 $39,068
$ 47,010
======== ======== ========
========
1992
- -----------------------------------------------------------------------------
- -----------------------
Operating Revenues. . . . . . . $633,933 $547,010 $554,635
$580,873
======== ======== ========
========
Operating Income. . . . . . . . $ 90,840 $ 58,892 $75,438
$ 62,641
======== ======== ========
========
Net Income. . . . . . . . . . . $ 68,042 $ 40,615 $55,145
$ 42,912
======== ======== ========
========
</TABLE>
<PAGE>40
<TABLE>
THE CONNECTICUT LIGHT AND POWER COMPANY
- -----------------------------------------------------------------------------
- -----------------------
STATISTICS
- -----------------------------------------------------------------------------
- -----------------------
<CAPTION>
Gross Electric Average
Utility Plant Annual
December 31, Use Per Electric
(Thousands of kWh Sales Residential Customers
Employees
Dollars) (Millions) Customer (kWh) (Average)
(December 31,)
- -----------------------------------------------------------------------------
- -----------------------
<S> <C> <C> <C> <C>
<C>
1993 $6,214,399 26,107 8,519 1,078,925
2,676
1992 6,100,680 25,809 8,501 1,075,425
3,028
1991 5,986,269 24,992 8,435 1,069,912
3,364
1990 5,881,499 25,039 8,434 1,064,695
3,517
1989 5,732,850 25,078 8,570 1,054,055
3,556
</TABLE>
<PAGE>41
The Connecticut Light and Power Company
First and Refunding Mortgage Bonds
----------------------------------
Trustee and Interest Paying Agent
Bankers Trust Company, Corporate Trust and Agency Group
P.O. Box 318, Church Street Station, New York, New York 10015
Preferred Stock
---------------
Transfer Agent, Dividend Disbursing Agent and Registrar
Northeast Utilities Service Company Shareholder Services
P.O. Box 5006, Hartford, CT 06102-5006
1994 Dividend Payment Dates
5.28%, 5.30%, 9.00%, $3.24 Series -
January 1, April 1, July 1, and October 1
4.50% (1956), 4.96%, 6.56%
$1.90, $2.00, $2.04, $2.06, $2.09, and $2.20 Series -
February 1, May 1, August 1, and November 1
3.90%, 4.50% (1963), 7.23% Series -
January 12, March 1, June 1, September 1, and December 1
DARTS*
January 12, March 2, April 20, June 8, July 27,
September 14, November 2, December 21
Address General Correspondence in Care of:
Northeast Utilities Service Company
Investor Relations Department
P.O. Box 270
Hartford, Connecticut 06141-0270
Tel. (203) 665-5000
General Office
Selden Street, Berlin, Connecticut 06037-1616
_________________________
*Transfer and Paying Agent:
Bankers Trust Company, Corporate Trust and Agency Group
P.O. Box 318, Church Street Station, New York, New York 10015
The data contained in this Annual Report is submitted for the sole purpose of
providing information to present stockholders about the Company.
<PAGE>
Exhibit 13.3
1993
ANNUAL REPORT
WESTERN MASSACHUSETTS ELECTRIC COMPANY
1993 Annual Report
Western Massachusetts Electric Company
Index
Contents Page
- -------- ----
Balance Sheets . . . . . . . . . . . . . . . . . . . . 1-2
Statements of Income . . . . . . . . . . . . . . . . . 3
Statements of Cash Flows . . . . . . . . . . . . . . . 4
Statements of Common Stockholder's Equity. . . . . . . 5
Notes to Financial Statements. . . . . . . . . . . . . 6-25
Report of Independent Public Accountants . . . . . . . 26
Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . 27-32
Selected Financial Data. . . . . . . . . . . . . . . . 33
Statements of Quarterly Financial Data . . . . . . . . 33
Statistics . . . . . . . . . . . . . . . . . . . . . . 34
Preferred Stockholder and Bondholder Information . . . Back Cover
WESTERN MASSACHUSETTS ELECTRIC COMPANY
BALANCE SHEETS
<TABLE>
<CAPTION>
At December 31, 1993 1992
- ------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C>
ASSETS
- ------
Utility Plant, at original cost:
Electric......................................... $1,183,410 $1,158,160
Less: Accumulated provision for depreciation.. 395,190 364,702
----------- -----------
788,220 793,458
Construction work in progress.................... 23,790 18,522
Nuclear fuel, net................................ 35,727 37,704
----------- -----------
Total net utility plant...................... 847,737 849,684
----------- -----------
Other Property and Investments:
Nuclear decommissioning trusts, at cost.......... 49,155 41,986
Investments in regional nuclear generating
companies, at equity............................ 14,633 14,567
Other, at cost................................... 3,840 3,842
----------- -----------
67,628 60,395
----------- -----------
Current Assets:
Cash and special deposits........................ 185 165
Receivables, less accumulated provision for
uncollectible accounts of $1,997,000 in 1993
and $2,117,000 in 1992......................... 36,437 36,587
Receivables from affiliated companies............ 4,972 2,829
Accrued utility revenues......................... 17,362 15,627
Fuel, materials, and supplies, at average cost... 7,057 9,001
Prepayments and other............................ 9,613 7,572
----------- -----------
75,626 71,781
----------- -----------
Deferred Charges:
Regulatory asset--income taxes <F2>(Note 1)...... 94,414 -
Amortizable property investment--Millstone 3..... 28,001 39,201
Deferred costs--Millstone 3 <F2>(Note 1)......... 22,667 30,497
Unrecovered contract obligation--YAEC <F>(Note 3) 24,150 28,160
Deferred DOE assessment <F2>(Note 1)............. 8,908 9,630
Unamortized debt expense......................... 1,842 2,141
Other............................................ 33,669 39,195
----------- -----------
213,651 148,824
----------- -----------
Total Assets................................. $1,204,642 $1,130,684
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>1
WESTERN MASSACHUSETTS ELECTRIC COMPANY
BALANCE SHEETS
<TABLE>
<CAPTION>
At December 31, 1993 1992
- --------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C>
CAPITALIZATION AND LIABILITIES
- ------------------------------
Capitalization:
Common stock,$25 par value--authorized and
outstanding 1,072,471 shares in 1993 and 1992... $ 26,812 $ 26,812
Capital surplus, paid in........................... 149,319 149,026
Retained earnings.................................. 97,627 91,077
----------- -----------
Total common stockholder's equity............ 273,758 266,915
Cumulative preferred stock--
$100 par value--authorized 1,000,000 shares;
outstanding 200,000 shares in 1993 and 1992;
$25 par value--authorized 3,600,000 shares;
outstanding 3,220,000 shares in 1993
3,280,000 shares in 1992
Not subject to mandatory redemption <F6>(Note 5) 73,500 73,500
Subject to mandatory redemption <F7>(Note 6).. 25,500 27,000
Long-term debt <F8>(Note 7)........................ 393,232 392,824
----------- -----------
Total capitalization...................... 765,990 760,239
----------- -----------
Obligations Under Capital Leases..................... 24,014 27,425
----------- -----------
Current Liabilities:
Notes payable to banks............................. 6,000 18,000
Commercial paper................................... - 23,500
Long-term debt and preferred stock--current
portion......................................... 1,500 1,652
Obligations under capital leases--current
portion......................................... 12,888 14,084
Accounts payable................................... 17,493 16,038
Accounts payable to affiliated companies........... 12,016 15,549
Accrued taxes...................................... 7,022 10,270
Accrued interest................................... 6,478 5,798
Refundable energy costs............................ 8,676 2,082
Other.............................................. 11,727 7,042
----------- -----------
83,800 114,015
----------- -----------
Deferred Credits:
Accumulated deferred income taxes <F2>(Note 1)..... 253,547 144,865
Accumulated deferred investment tax credits........ 36,083 37,512
Deferred contract obligation--YAEC <F4>(Note 3).... 24,150 28,160
Deferred DOE obligation <F2>(Note 1)............... 7,268 9,630
Other.............................................. 9,790 8,838
----------- -----------
330,838 229,005
----------- -----------
Commitments and Contingencies <F12>(Note 11)
Total Capitalization and Liabilities...... $1,204,642 $1,130,684
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>2
WESTERN MASSACHUSETTS ELECTRIC COMPANY
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
For the Years Ended December 31, 1993 1992 1991
- -----------------------------------------------------------------------------
- -----
(Thousands of Dollars)
<S> <C> <C> <C>
Operating Revenues................................ $415,055 $410,720 $409,840
--------- ---------
- ---------
Operating Expenses:
Operation--
Fuel, purchased and net interchange
power...................................... 67,781 86,356 99,717
Other......................................... 142,273 126,060 114,231
Maintenance..................................... 34,259 39,303 36,795
Depreciation.................................... 35,751 34,257 35,636
Amortization of regulatory assets............... 29,700 26,321 24,950
Federal and state income taxes
<F9>(Note 8).................................. 28,173 20,926 22,856
Taxes other than income taxes................... 17,051 16,984 15,932
--------- ---------
- ---------
Total operating expenses..................... 354,988 350,207 350,117
--------- ---------
- ---------
Operating Income.................................. 60,067 60,513 59,723
--------- ---------
- ---------
Other Income:
Deferred Millstone 3 return--other
funds........................................ 1,439 2,119 2,763
Equity in earnings of regional
nuclear generating companies.................. 1,680 2,170 2,181
Other, net...................................... 2,966 2,628 1,895
Income taxes--credit............................ 304 810 1,969
--------- ---------
- ---------
Other income, net............................ 6,389 7,727 8,808
--------- ---------
- ---------
Income before interest charges............... 66,456 68,240 68,531
--------- ---------
- ---------
Interest Charges:
Interest on long-term debt...................... 29,979 31,694 33,557
Other interest.................................. 881 469 1,544
Deferred Millstone 3 return--
borrowed funds <F2>(Note 1)................... (1,076) (945)
(1,207)
--------- ---------
- ---------
Interest charges, net........................ 29,784 31,218 33,894
--------- ---------
- ---------
Income before cumulative effect of
accounting change............................... 36,672 37,022 34,637
Cumulative effect of accounting change <F2>(Note 1) 3,922 - -
--------- ---------
- ---------
Net Income........................................ $ 40,594 $ 37,022 $ 34,637
========= =========
=========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>3
WESTERN MASSACHUSETTS ELECTRIC COMPANY
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION> ---------
- --------- ---------
For the Years Ended December 31, 1993 1992
1991
---------
- --------- ---------
(Thousands
of Dollars)
<S> <C> <C>
<C>
Cash Flows From Operations:
Net Income .............................................. $ 40,594 $
37,022 $ 34,637
Adjusted for the following:
Depreciation............................................ 38,296
36,735 36,984
Deferred income taxes and investment tax credits, net... 918
(785) 3,767
Deferred return - Millstone 3, net of amortization...... 12,252
9,110 8,216
Deferred energy costs, net of amortization.............. 6,594
12,629 (8,418)
Other sources of cash................................... 27,745
24,113 18,977
Other uses of cash...................................... (5,142)
(10,814) (9,662)
Changes in working capital:
Receivables and accrued utility revenues............... (3,728)
12,288 (7,216)
Fuel, materials, and supplies.......................... 1,944
490 3,870
Accounts payable....................................... (2,078)
(5,355) 6,262
Accrued taxes.......................................... (3,248)
(295) 344
Other working capital (excludes cash).................. 2,433
1,932 4,971
---------
- --------- ---------
Net Cash Flows From Operations............................. 116,580
117,070 92,732
---------
- --------- ---------
Cash Flows Used For Financing Activities:
Long-term debt........................................... 113,800
85,000 -
Financing expenses....................................... (359)
(470) -
Net increase (decrease) in short-term debt............... (35,500)
(3,250) 7,750
Reacquisitions and retirements of long-term debt
and preferred stock.................................... (115,770)
(109,169) (21,650)
Cash dividends on preferred stock........................ (5,259)
(7,485) (8,048)
Cash dividends on common stock........................... (28,785)
(29,536) (31,499)
---------
- --------- ---------
Net cash flows used for financing activities............... (71,873)
(64,910) (53,447)
---------
- --------- ---------
Investment Activities:
Investment in plant (including capital leases):
Electric utility plant................................. (34,592)
(46,061) (32,775)
Nuclear fuel........................................... (2,926)
1,003 (570)
---------
- --------- ---------
Net cash flows used for investments in plant........... (37,518)
(45,058) (33,345)
Other investment activities, net....................... (7,169)
(7,101) (5,917)
---------
- --------- ---------
Net cash flows used for investments........................ (44,687)
(52,159) (39,262)
---------
- --------- ---------
Net Increase In Cash for the Period........................ 20
1 23
Cash and special deposits - beginning of period............ 165
164 141
---------
- --------- ---------
Cash and special deposits - end of period.................. $ 185 $
165 $ 164
=========
========== =========
Supplemental Cash Flow Information:
Cash paid (received) during the year for:
Interest, net of amounts capitalized during
construction............................................. $ 27,277 $
30,758 $ 32,616
=========
========= =========
Income taxes............................................. $ 21,200 $
17,711 $ 22,047
=========
========= =========
Increase in obligations:
Niantic Bay Fuel Trust................................... $ 9,369 $
7,224 $ 3,443
=========
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>4
WESTERN MASSACHUSETTS ELECTRIC COMPANY
STATEMENTS OF COMMON STOCKHOLDER'S EQUITY
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
- ----------
Capital Retained
Common Surplus, Earnings
Stock Paid In <F1>(a)
Total
- -----------------------------------------------------------------------------
- ----------
(Thousands of Dollars)
<S> <C> <C> <C>
<C>
Balance at January 1, 1991............... $26,812 $148,401 $ 96,618
$271,831
Net income for 1991.................. 34,637
34,637
Cash dividends on preferred
stock.............................. (8,048)
(8,048)
Cash dividends on common stock....... (31,499)
(31,499)
Capital stock expenses, net.......... 295
295
-------- --------- ---------
- ---------
Balance at December 31, 1991............. 26,812 148,696 91,708
267,216
Net income for 1992.................. 37,022
37,022
Cash dividends on preferred
stock.............................. (7,485)
(7,485)
Cash dividends on common stock....... (29,536)
(29,536)
Loss on the retirement of preferred
stock.............................. (632)
(632)
Capital stock expenses, net.......... 330
330
-------- --------- ---------
- ---------
Balance at December 31, 1992............. 26,812 149,026 91,077
266,915
Net income for 1993.................. 40,594
40,594
Cash dividends on preferred
stock.............................. (5,259)
(5,259)
Cash dividends on common stock....... (28,785)
(28,785)
Capital stock expenses, net.......... 293
293
-------- --------- ---------
- ---------
Balance at December 31, 1993............. $26,812 $149,319 $ 97,627
$273,758
======== ========= =========
=========
</TABLE>
[FN]
<F1> (a) The company has dividend restrictions imposed by its long-term debt
agreements.
At December 31, 1993, these restrictions totaled approximately $71.1
million.
The accompanying notes are an integral part of these financial statements.
<PAGE>5
WESTERN MASSACHUSETTS ELECTRIC COMPANY
- --------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------
[FN]
<F1>1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
GENERAL
Western Massachusetts Electric Company (WMECO or the company), The Connecticut
Light and Power Company (CL&P), Holyoke Water Power Company (HWP), Public
Service Company of New Hampshire (PSNH), and North Atlantic Energy Corporation
(NAEC) are the operating subsidiaries comprising the Northeast Utilities system
(the system) and are wholly owned by Northeast Utilities (NU).
Other wholly owned subsidiaries of NU provide substantial support services
to the system. Northeast Utilities Service Company (NUSCO) supplies centralized
accounting, administrative, data processing, engineering, financial, legal,
operational, planning, purchasing, and other services to the system companies.
Northeast Nuclear Energy Company (NNECO) acts as agent for system companies in
operating the Millstone nuclear generating facilities.
All transactions among affiliated companies are on a recovery of cost basis
which may include amounts representing a return on equity, and are subject to
approval by various federal and state regulatory agencies.
ACCOUNTING CHANGES
Property Taxes: WMECO adopted a one-time change in the method of
accounting for municipal property tax expense for their Connecticut properties.
Most municipalities in Connecticut assess property values as of October 1.
Prior to January 1, 1993, the company accrued Connecticut property tax expense
over the period October 1 through September 30 based on the lien-date method.
During the first quarter of 1993, these subsidiaries changed their method of
accounting for Connecticut municipal property taxes to recognize the expense
from July 1 through June 30, to match the payment and services provided by the
municipalities. This one-time change increased net income by approximately $3.9
million for WMECO in 1993.
Income Taxes: The company adopted the provisions of Statement of Financial
Accounting Standards No. 109, Accounting for Income Taxes (SFAS 109), effective
January 1, 1993. For information on this change, see <F2> Note 1, "Summary of
Significant Accounting Policies - Income Taxes."
Postretirement Benefits Other Than Pensions: The company has adopted the
provisions of Statement of Financial Accounting Standards No. 106, Employer's
Accounting for Postretirement Benefits Other Than Pensions (SFAS 106), effective
January 1, 1993. For information on this change, see <F11> Note 10,
"Postretirement Benefits Other Than Pensions."
ACCOUNTING RECLASSIFICATIONS
Certain amounts in the accompanying financial statements of WMECO for the years
ended December 31, 1992 and 1991 have been reclassified to conform with the
December 31, 1993 presentation.
PUBLIC UTILITY REGULATION
NU is registered with the Securities and Exchange Commission (SEC) as a holding
company under the Public Utility Holding Company Act of 1935 (1935 Act), and it
and its subsidiaries, including the company, are subject to the provisions of
the 1935 Act. Arrangements among the system companies, outside agencies, and
other utilities covering interconnections, interchange of electric power, and
sales of utility property are subject to regulation by the Federal Energy
Regulatory Commission (FERC) and/or the SEC. The company is subject to further
regulation for rates and other matters by the FERC and the
<PAGE>6
Massachusetts Department of Public Utilities (DPU), and follows the accounting
policies prescribed by these commissions.
REVENUES
Other than special contracts, utility revenues are based on authorized rates
applied to each customer's use of electricity. Rates can be changed only
through a formal proceeding before the appropriate regulatory commission. At
the end of each accounting period, WMECO accrues an estimate for the amount of
energy delivered but unbilled.
SPENT NUCLEAR FUEL DISPOSAL COSTS
Under the Nuclear Waste Policy Act of 1982, WMECO must pay the United States
Department of Energy (DOE) for the disposal of spent nuclear fuel and high-level
radioactive waste. Fees for nuclear fuel burned on or after April 7, 1983 are
billed currently to customers and paid to the DOE on a quarterly basis. For
nuclear fuel used to generate electricity prior to April 7, 1983 (prior-period
fuel), payment may be made anytime prior to the first delivery of spent fuel to
the DOE. At December 31, 1993, fees due to the DOE for the disposal of
prior-period fuel were approximately $31.9 million, including interest costs of
$16.3 million. As of December 31, 1993, approximately $32.3 million had been
collected through rates.
Under the Energy Policy Act of 1992 (Energy Act), WMECO is assessed for its
proportionate share of the costs of decontaminating and decommissioning
uranium enrichment plants operated by the DOE (D&D assessment). The Energy Act
imposes an overall cap of $2.25 billion on the obligation of the commercial
power industry and limits the annual special assessment to $150 million each
year over a 15-year period beginning in 1993. The Energy Act also requires that
regulators treat D&D assessments as a reasonable and necessary cost of fuel, to
be fully recovered in rates, like any other fuel cost. The cap and annual
recovery amounts will be adjusted annually for inflation. The D&D assessment
is allocated among utilities based upon services purchased in prior years. At
December 31, 1993, WMECO's remaining share of these costs is estimated to be
approximately $8.9 million. WMECO has begun to recover these costs.
Accordingly, WMECO has recognized these costs as a regulatory asset, with a
corresponding obligation, on its Balance Sheets.
INVESTMENTS AND JOINTLY OWNED ELECTRIC UTILITY PLANT
Regional Nuclear Generating Companies: WMECO owns common stock of four regional
nuclear generating companies (Yankee companies). The Yankee companies, with the
company's ownership interests, are:
Connecticut Yankee Atomic Power Company (CY) . . . . 9.5%
Yankee Atomic Electric Company (YAEC). . . . . . . . 7.0
Maine Yankee Atomic Power Company (MY) . . . . . . . 3.0
Vermont Yankee Nuclear Power Corporation (VY). . . . 2.5
WMECO's investments in the Yankee companies are accounted for on the equity
basis. The electricity produced by these facilities is committed to the
participants substantially on the basis of their ownership interests and is
billed pursuant to contractual agreements. For more information on these
agreements, see <F12> Note 11, "Commitments and Contingencies - Purchased Power
Arrangements."
<PAGE>7
The 173-megawatt (MW) YAEC nuclear power plant was shut down permanently on
February 26, 1992. For more information on the Yankee companies, see <F4>
Note 3, "Nuclear Decommissioning."
Millstone 1: WMECO has a 19 percent joint-ownership interest in Millstone 1,
a 660-MW nuclear generating unit. As of December 31, 1993, plant-in-service and
the accumulated provision for depreciation included approximately $77.6 million
and $30.5 million, respectively, for WMECO's share of Millstone 1. WMECO's
share of Millstone 1 operating expenses is included in the corresponding
operating expenses on the accompanying Statements Of Income.
Millstone 2: WMECO has a 19 percent joint-ownership interest in Millstone 2,
an 875-MW nuclear generating unit. As of December 31, 1993, plant-in-service
and the accumulated provision for depreciation included approximately $158.1
million and $34.8 million, respectively, for WMECO's share of Millstone 2.
WMECO's share of Millstone 2 operating expenses is included in the corresponding
operating expenses on the accompanying Statements Of Income.
Millstone 3: WMECO has a 12.24 percent joint-ownership interest in
Millstone 3, an 1,149-MW nuclear generating unit. As of December 31, 1993,
plant-in-service and the accumulated provision for depreciation included
approximately $375.5 million and $72.9 million, respectively, for WMECO's
proportionate share of Millstone 3. WMECO's share of Millstone 3 expenses
is included in the corresponding operating expenses on the accompanying
Statements Of Income.
DEPRECIATION
The provision for depreciation is calculated using the straight-line method
based on estimated remaining lives of depreciable utility plant-in-service,
adjusted for salvage value and removal costs, as approved by the appropriate
regulatory agency. Except for major facilities, depreciation factors are
applied to the average plant-in-service during the period. Major facilities are
depreciated from the time they are placed in service. When plant is retired
from service, the original cost of plant, including costs of removal, less
salvage, is charged to the accumulated provision for depreciation. For nuclear
production plants, the costs of removal, less salvage, that have been funded
through external decommissioning trusts will be paid with funds from the trusts
and will be charged to the accumulated reserve for decommissioning included in
the accumulated provision for depreciation over the expected service life of the
plants. See <F4> Note 3, "Nuclear Decommissioning," for additional information.
The depreciation rates for the several classes of electric plant-in-service are
equivalent to a composite rate of 3.1 percent in 1993, 3.0 percent in 1992, and
3.3 percent in 1991.
INCOME TAXES
The tax effect of temporary differences (differences between the periods in
which transactions affect income in the financial statements and the
periods in which they affect the determination of income subject to tax) is
accounted for in accordance with the ratemaking treatment of the applicable
regulatory commissions. See <F9> Note 8, "Income Tax Expense," for the
components of income tax expense.
In 1992, the Financial Accounting Standards Board (FASB) issued SFAS 109. SFAS
109 supersedes previously issued income tax accounting standards. WMECO adopted
SFAS 109, on a prospective basis, during the first quarter of 1993. At December
31, 1993, the deferred tax obligation relating to the adoption of SFAS 109
approximated $94 million. As it is probable that the increase in deferred tax
liabilities will be recovered from customers through rates, WMECO also
established a regulatory asset. SFAS 109 does not permit net-of-tax accounting.
Accordingly, the company no longer utilizes net-of-tax
<PAGE>8
accounting for the deferred nuclear plants return-borrowed funds and allowance
for funds used during construction (AFUDC) - borrowed funds.
The temporary differences which give rise to the accumulated deferred tax
obligation at December 31, 1993 are as follows:
(Thousands of Dollars)
Accelerated depreciation and other
plant-related differences . . . . . . . . . $205,030
The tax effect of net regulatory assets. . . 37,258
Other. . . . . . . . . . . . . . . . . . . . 11,259
--------
$253,547
========
ENERGY ADJUSTMENT CLAUSE
In Massachusetts, all retail fuel costs are collected on a current basis by
means of a separate fuel-charge billing rate. As permitted by the DPU,
WMECO defers the difference between forecasted and actual fuel cost recoveries
until it is recovered or refunded quarterly under a retail fuel adjustment
clause. Massachusetts law requires the establishment of an annual performance
program related to fuel procurement and use. The program establishes
performance standards for plants owned and operated by WMECO or plants in which
WMECO has a life-of-unit contract. Therefore, revenues collected under the
WMECO's retail fuel adjustment clause are subject to refund pending review by
the DPU. To date, there have been no significant adjustments as a result of
this program.
For additional information, see <F12> Note 11, "Commitments and
Contingencies--Nuclear Performance."
PHASE-IN PLAN
As of December 31, 1991, all of WMECO's recoverable investment in Millstone 3
was in rate base. Beginning in 1986, the DPU has permitted WMECO to recover the
portion of its Millstone 3 investment representing the amount currently
determined to be "unuseful" by the DPU ($23.6 million at December 31, 1993),
over a ten-year period, without earning a return. On June 30, 1987, WMECO also
began recovering the deferred return, including carrying charges, on the
recoverable but not yet phased-in portion of its investment in Millstone 3.
This recovery is taking place over a nine-year period. As of December 31, 1993,
$65.4 million of the deferred return, including carrying charges, has been
recovered, and $22.7 million of the deferred return, including carrying charges,
remains to be recovered over the period ending June 30, 1995.
<F3>2. LEASES
WMECO and CL&P have entered into the Niantic Bay Fuel Trust (NBFT) capital lease
agreement to finance up to $530 million of nuclear fuel for Millstone 1 and 2
and their share of the nuclear fuel for Millstone 3. WMECO and CL&P make
quarterly lease payments for the cost of nuclear fuel consumed in the reactors
(based on a units-of-production method at rates which reflect estimated
kilowatt-hours
<PAGE>9
of energy provided) plus financing costs associated with the fuel in the
reactors.
Upon permanent discharge from the reactors, ownership of the nuclear fuel
transfers to WMECO and CL&P.
WMECO has also entered into lease agreements, some of which are capital leases,
for the use of substation equipment, data processing and office equipment,
vehicles, nuclear control room simulators, and office space. The provisions of
these lease agreements generally provide for renewal options. The following
rental payments have been charged to operating expense:
Operating Capital
Year Leases Leases
1993. . . . . . . . . . . . $17,158,000 $6,367,000
1992. . . . . . . . . . . . 13,799,000 7,263,000
1991. . . . . . . . . . . . 11,599,000 6,790,000
Interest included in capital lease rental payments was $2,090,000 in 1993,
$2,895,000 in 1992, and $3,434,000 in 1991.
Substantially all of the capital lease rental payments were made pursuant to the
nuclear fuel lease agreement. Future minimum lease payments under the nuclear
fuel capital lease cannot be reasonably estimated on an annual basis due to
variations in the usage of nuclear fuel.
<PAGE>10
Future minimum rental payments, excluding annual nuclear fuel lease payments and
executory costs, such as property taxes, state use taxes, insurance, and
maintenance, under long-term noncancelable leases, as of December 31, 1993, are
approximately:
Capital Operating
Year Leases Leases
---- ------- ---------
(Thousands of Dollars)
1994. . . . . . . . . . . . $ 40 $4,900
1995. . . . . . . . . . . . 40 4,600
1996. . . . . . . . . . . . 40 4,200
1997. . . . . . . . . . . . 40 4,100
1998. . . . . . . . . . . . 40 3,100
After 1998. . . . . . . . . 220 36,300
------- -------
Future minimum lease
payments . . . . . . . . . 420 $57,200
=======
Less amount of representing
interest . . . . . . . . . 120
-------
Present value of future
minimum lease payments
for other than nuclear
fuel . . . . . . . . . . . 300
Present value of future
nuclear fuel lease
payments . . . . . . . . . 36,600
-------
Total. . . . . . $36,900
=======
<F4>3. NUCLEAR DECOMMISSIONING
The company's 1992 decommissioning study concluded that complete and immediate
dismantlement at retirement continues to be the most viable and economic method
of decommissioning the three Millstone units. Decommissioning studies are
reviewed and updated periodically to reflect changes in decommissioning
requirements, technology, and inflation.
The estimated cost of decommissioning WMECO's ownership share of Millstone 1,
2, and 3, in year-end 1993 dollars, is $73.3 million, $58.9 million, and $51.6
million, respectively. Nuclear decommissioning costs are accrued over the
expected service life of the units and are included in depreciation expense on
the Statements Of Income. Nuclear decommissioning costs amounted to $4.6
million in 1993, 1992, and 1991. Nuclear decommissioning, as a cost of removal,
is included in the accumulated provision for depreciation on the Balance Sheets.
WMECO has established independent decommissioning trusts for its portion of the
costs of decommissioning Millstone 1, 2, and 3. As of December 31, 1993, WMECO
has collected, through rates, $37.6 million toward the future decommissioning
costs of its share of the Millstone units, all of which has been transferred to
external decommissioning trusts. Earnings on the decommissioning trusts and
financing fund increase the decommissioning trust balance and the accumulated
reserve for decommissioning. At December 31, 1993, the balance in the
accumulated reserve for decommissioning amounted to $49.2 million.
<PAGE>11
Changes in requirements or technology, or adoption of a decommissioning method
other than immediate dismantlement, could change decommissioning cost estimates.
WMECO attempts to recover sufficient amounts through allowed rates to cover
their expected decommissioning costs. Only the portion of currently estimated
total decommissioning costs that has been accepted by regulatory agencies is
reflected in rates of the company. Although allowances for decommissioning have
increased significantly in recent years, ratepayers in future years will need
to increase their payments to offset the effects of any insufficient rate
recoveries in previous years.
WMECO, along with other New England utilities, has equity investments in the
four Yankee companies. Each Yankee company owns a single nuclear generating
unit. The estimated costs, in year-end 1993 dollars, of decommissioning WMECO's
ownership share of CY and MY are $32.3 million, and $9.7 million, respectively.
The cost to decommission VY is currently being reestimated. The cost of
decommissioning WMECO's ownership share of VY is projected to range from $7.5
million to $8.75 million. As discussed in the following paragraph, YAEC's
owners voted to permanently shut down the YAEC unit on February 26, 1992. Under
the terms of the contracts with the Yankee companies, the shareholders-sponsors
are responsible for their proportionate share of the operating costs of each
unit, including decommissioning. The nuclear decommissioning costs of the
Yankee companies are included as part of the cost of power by WMECO.
YAEC has begun decommissioning its nuclear facility. On June 1, 1992, YAEC
filed a rate filing to obtain FERC authorization to collect the closing and
decommissioning costs and to recover the remaining investment in the YAEC
nuclear power plant over the remaining period of the plant's Nuclear
Regulatory Commission operating license. The bulk of these costs has been
agreed to by the YAEC joint owners and approved, as a settlement, by FERC.
At December 31, 1993, the estimated remaining costs amounted to $345.0 million,
of which WMECO's share was approximately $24.1 million. Management expects that
WMECO will continue to be allowed to recover such FERC-approved costs from its
customers. Accordingly, WMECO has recognized these costs as a regulatory asset,
with a corresponding obligation, on its Balance Sheets. WMECO has a 7.0 percent
equity investment, approximating $1.7 million, in YAEC. WMECO had relied on
YAEC for less than 1 percent of its capacity.
<F5>4. SHORT-TERM DEBT
The system companies have various credit lines, totaling $485 million. NU,
CL&P, WMECO, HWP, NNECO, and The Rocky River Realty Company (RRR) have
established a revolving-credit facility with a group of 17 banks. Under this
facility, the participating companies may borrow up to an aggregate of $360
million. Individual borrowing limits are $175 million for NU, $360 million for
CL&P, $75 million for WMECO, $8 million for HWP, $60 million for NNECO, and $25
million for RRR. The system companies may borrow funds on a short-term
revolving basis using either fixed-rate loans or standby loans. Fixed rates are
set using competitive bidding. Standby-loan rates are based upon several
alternative variable rates. The system companies are obligated to pay a
facility fee of .20 percent of each bank's total commitment under the three-year
portion of the facility, representing 75 percent of the total facility, plus
.135 percent of each bank's total commitment under the 364-day portion of the
facility, representing 25 percent of the total facility. At December 31, 1993,
there were $22.5 million of borrowings under the facility, of which WMECO has
no outstanding borrowings.
Certain subsidiaries of NU, including WMECO, are members of the Northeast
Utilities System Money Pool (Pool). The Pool provides a more efficient use
of the cash resources of the system, and reduces outside short-term borrowings.
NUSCO administers the Pool as agent for the member companies.
<PAGE>12
Short-term borrowing needs of the member companies are first met with available
funds of other member companies, including funds borrowed by NU parent.
NU parent may lend to the Pool but may not borrow. Investing and borrowing
subsidiaries receive or pay interest based on the average daily Federal
Funds rate. Funds may be withdrawn from or repaid to the Pool at any time
without prior notice. However, borrowings based on loans from NU parent
bear interest at NU parent's cost and must be repaid based upon the terms of
NU's original borrowing.
Maturities of WMECO's short-term debt obligations are for periods of three
months or less.
The amount of short-term borrowings that may be incurred by the company is
subject to periodic approval by the SEC under the 1935 Act. In addition,
the charter of WMECO contains provisions restricting the amount of short-term
borrowings. Under the SEC and/or charter restrictions, as of January 1, 1993,
the company was authorized to incur short-term borrowings up to a maximum of $75
million.
<PAGE>13
<TABLE>
<F6>5. PREFERRED STOCK NOT SUBJECT TO MANDATORY REDEMPTION
Details of preferred stock not subject to mandatory redemption are:
<CAPTION>
December 31, Shares
1993 Outstanding
December 31,
Redemption December 31
- --------------------------------
Description Price 1993 1993
1992 1991
- -----------------------------------------------------------------------------
- ---------------------
(Thousands of Dollars)
<S> <C> <C> <C>
<C> <C>
9.60% Series A of 1970 . . . . . $ - - $ -
$ - $15,000
7.72% Series B of 1971 . . . . . 103.51 200,000 20,000
20,000 20,000
1988 Adjustable Rate DARTS . . . 25.00 2,140,000 53,500
53,500 53,500
-------
- ------- -------
Total preferred stock not subject
to mandatory redemption . . . . $73,500
$73,500 $88,500
=======
====== ======
All or any part of each outstanding series of preferred stock may be redeemed
by the company at any time
at established redemption prices plus accrued dividends to the date of
redemption.
</TABLE>
<TABLE>
<F7>6. PREFERRED STOCK SUBJECT TO MANDATORY REDEMPTION
Details of preferred stock subject to mandatory redemption are:
<CAPTION>
December 31, Shares
1993 Outstanding
December 31,
Redemption December 31
- --------------------------------
Description Price* 1993 1993
1992 1991
- -----------------------------------------------------------------------------
- ---------------------
(Thousands of Dollars)
<S> <C> <C> <C>
<C> <C>
7.60% Series of 1987 . . . . . . $26.14 1,080,000 $27,000
$28,500 $28,502
Less preferred stock to be
redeemed within one year,
net of reacquired stock . . . . 1,500
1,500 2
-------
- ------- -------
Total preferred stock subject to mandatory redemption $25,500
$27,000 $28,500
=======
======= =======
*Redemption price reduces in future years.
</TABLE>
The minimum sinking-fund provisions of the 1987 Series subject to mandatory
redemption at December 31, 1993, for the years 1994 through 1998, are $1.5
million per year. In case of default on sinking-fund payments, no payments may
be made on any junior stock by way of dividends or otherwise (other than in
shares of junior stock) so long as the default continues. If the company is in
arrears in the payment of dividends on any outstanding shares of preferred
stock, the company would be prohibited from redemption or purchase of less than
<PAGE>14
all of the preferred stock outstanding. All or part of the 7.60% Series of 1987
may be redeemed by the company at any time at an established redemption price
plus accrued dividends to the date of redemption except that during the initial
five-year redemption period it is subject to certain refunding limitations.
<F8>7. LONG-TERM DEBT
Details of long-term debt outstanding are:
- -------------------------------------------------------------------------
December 31,
-----------------
1993 1992
- -------------------------------------------------------------------------
(Thousands of Dollars)
First Mortgage Bonds:
9 1/4% Series S, due 1995 . . . . . $ - $ 59,400
9 1/4% Series U, due 1995 . . . . . 34,650 35,000
5 3/4% Series F, due 1997 . . . . . 15,000 15,000
7 3/8% Series H, due 1998 . . . . . 15,000 15,000
6 3/4% Series G, due 1998 . . . . . 10,000 10,000
7 3/4% Series J, due 2002 . . . . . 30,000 30,000
7 3/4% Series V, due 2002 . . . . . 85,000 85,000
9 3/4% Series R, due 2016 . . . . . 24,750 25,000
10 1/8% Series T, due 2018 . . . . . 33,819 34,235
6 7/8% Series W, due 2000 . . . . . 60,000 -
-------- --------
Total First Mortgage Bonds . . 308,219 308,635
Pollution Control Notes:
Tax Exempt Series A, due 2028. . . . . . 53,800 -
Variable rate, due 2014-2015 . . . . . . - 52,400
5.9%, due 1998. . . . . . . . . . . . . - 1,454
Fees and interest due for spent fuel
disposal costs. . . . . . . . . . . . . 31,930 30,966
Less: Amounts due within one year . . . - 152
Unamortized premium and discount, net. . (717) (479)
-------- --------
Long-term debt, net. . . . . . . . . . . $393,232 $392,824
======== ========
Long-term debt maturities and cash sinking-fund requirements on debt
outstanding at December 31, 1993 for the years 1994 through 1998 are
approximately: $0 in 1994, $34,650,000 in 1995, $0 in 1996, $15,000,000 in
1997, and $25,000,000 in 1998. In addition, there are annual 1 percent
sinking- and improvement-fund requirements, currently amounting to $3,100,000
in 1994 and 1995, $2,750,000 in 1996 and 1997, and $2,600,000 in 1998. Such
sinking- and improvement-fund requirements may be satisfied by the deposit of
cash or bonds or by certification of property additions.
All or any part of each outstanding series of first mortgage bonds may be
redeemed by the company at any time at established redemption prices plus
accrued interest to the date of redemption, except certain series which are
subject to certain refunding limitations during their respective initial
five-year redemption periods.
<PAGE>15
Essentially all of the company's utility plant is subject to the liens of its
first mortgage bond indentures. As of December 31, 1993, the company has
secured $53.8 million of pollution control notes with second mortgage liens
on Millstone 1, junior to the liens of its first mortgage bond
indentures.
WMECO has entered into an interest rate cap contract to reduce the potential
impact of upward changes in interest rates on certain variable-rate
tax-exempt pollution control revenue bonds held by WMECO. Approximately $52
million of total outstanding long-term variable-rate debt is secured by this
interest rate cap. The total cost of the interest rate cap for 1993 was
approximately $442,000, the cost of which is amortized over the term of the
contract, which is for three years. The fair market value of the outstanding
interest-rate cap contract as of December 31, 1993 is approximately $59,000.
Fees and interest due for spent fuel disposal costs are scheduled to be paid
to the United States Department of Energy just prior to the first delivery of
prior-period spent fuel, which is anticipated to be in 1998. Until such
payment is made, the outstanding balance will continue to accrue interest at
the three-month Treasury Bill Yield Rate. For additional information, see
<F2> Note 1 of the accompanying Notes to Financial Statements.
<PAGE>16
<TABLE>
<F9>8. INCOME TAX EXPENSE
The components of the federal and state income tax provisions are:
<CAPTION>
- -----------------------------------------------------------------------------
- ---------------
For the Years Ended December 31, 1993 <F2>(Note 1) 1992
1991
- -----------------------------------------------------------------------------
- ---------------
(Thousands of Dollars)
<S> <C> <C>
<C>
Current income taxes:
Federal. . . . . . . . . . . . . . . . . $22,239 $16,736
$13,550
State. . . . . . . . . . . . . . . . . . 4,712 4,165
3,570
------- -------
- -------
Total current. . . . . . . . . . . . . 26,951 20,901
17,120
------- -------
- -------
Deferred income taxes, net:
Federal. . . . . . . . . . . . . . . . . 1,683 (1,466)
1,581
State. . . . . . . . . . . . . . . . . . 664 117
1,259
------- -------
- -------
Total deferred . . . . . . . . . . . . 2,347 (1,349)
2,840
------- -------
- -------
Investment tax credits, net . . . . . . (1,429) (1,251)
(1,251)
------- --------
- -------
Total income tax expense. . . . . . . $27,869 $18,301
$18,709
======= =======
=======
The components of total income tax expense are classified as follows:
Income taxes charged to operating
expenses. . . . . . . . . . . . . . . . $28,173 $20,926
$22,856
Income taxes associated with the
amortization of deferred Millstone 3
return - borrowed funds . . . . . . . . - (2,410)
(2,945)
Income taxes associated with AFUDC and
deferred Millstone 3 return -
borrowed funds. . . . . . . . . . . . . - 595
767
Other income taxes - credit. . . . . . . (304) (810)
(1,969)
------- -------
- -------
Total income tax expense . . . . . . . . $27,869 $18,301
$18,709
======= =======
=======
<PAGE>17
Deferred income taxes are comprised of the tax effects of temporary
differences as follows:
- -----------------------------------------------------------------------------
- ---------------
For the Years Ended December 31, 1993 1992
1991
- -----------------------------------------------------------------------------
- ---------------
(Thousands of Dollars)
Depreciation, leased nuclear fuel,
settlement credits, and disposal costs . $6,852 $ 4,070
$ 5,911
Construction overheads . . . . . . . . . . - -
(979)
Energy adjustment clause . . . . . . . . . (2,627) (4,663)
1,409
AFUDC and Deferred Millstone 3 return,
net . . . . . . . . . . . . . . . . . . . (2,191) (1,815)
(2,178)
Deferred refueling cost. . . . . . . . . . 413 666
6
Early retirement program . . . . . . . . . (544) 775
(1,809)
Loss on bond redemption. . . . . . . . . . 1,561 18
527
Conservation and load management . . . . . (712) 394
(419)
Other. . . . . . . . . . . . . . . . . . . (405) (794)
372
------ -------
- -------
Deferred income taxes, net . . . . . . . $2,347 $(1,349)
$ 2,840
====== =======
=======
A reconciliation between income tax expense and the expected tax expense at the
applicable statutory
rates:
- -----------------------------------------------------------------------------
- ---------------
For the Years Ended December 31, 1993 1992
1991
- -----------------------------------------------------------------------------
- ---------------
(Thousands of Dollars)
Expected federal income tax at
35 percent of pretax income for
1993 and 34 percent for 1992
and 1991. . . . . . . . . . . . . . . . . $23,962 $18,810
$18,138
Tax effect of differences:
Depreciation differences . . . . . . . 1,784 (1,584)
(9)
Deferred Millstone 3 return -
other funds . . . . . . . . . . . . . (504) (721)
(940)
Amortization of deferred Millstone 3
return - other funds. . . . . . . . . 3,341 2,856
2,876
Construction overheads . . . . . . . . - -
(979)
Investment tax credit amortization . . (1,429) (1,251)
(1,251)
State income taxes, net of federal
benefit . . . . . . . . . . . . . . . 3,494 2,829
3,215
Adjustment for prior years taxes . . . - (1,500)
(1,000)
Other, net . . . . . . . . . . . . . . (2,779) (1,138)
(1,341)
------- -------
- -------
Total income tax expense. . . . . $27,869 $18,301
$18,709
======= =======
=======
<PAGE>18
</TABLE>
<F10>9. PENSION BENEFITS
The company participates in a uniform noncontributory-defined benefit retirement
plan covering all regular system employees (the Plan). Benefits are based on
years of service and employees' highest eligible compensation during five
consecutive years of employment. The company's direct-allocated portion of the
system's pension cost, part of which was charged to utility plant, approximated
$1.2 million in 1993, ($504,000) in 1992, and $1.9 million in 1991. The
company's pension costs for 1993 and 1991 included approximately $2.7 million,
and $1.9 million, respectively, related to work force reduction programs.
Currently, the company funds annually an amount at least equal to that which
will satisfy the requirements of the Employee Retirement Income Security Act
and the Internal Revenue Code. Pension costs are determined using
market-related values of pension assets. Pension assets are invested
primarily in domestic and international equity securities and bonds.
The components of the Plan's net pension cost for the system (excluding PSNH and
North Atlantic Energy Service Corporation in 1992 and 1991) are:
- ----------------------------------------------------------------------------
For the Years Ended December 31, 1993 1992 1991
- ----------------------------------------------------------------------------
(Thousands of Dollars)
Service cost . . . . . . . . . . $ 59,068 $ 27,480 $ 48,738
Interest cost. . . . . . . . . . 81,456 69,746 71,041
Return on plan assets. . . . . . (176,798) (77,232) (198,437)
Net amortization . . . . . . . . 65,447 (16,266) 108,175
-------- --------- --------
Net pension cost . . . . . . . . $ 29,173 $ 3,728 $ 29,517
======== ========= ========
For calculating pension cost, the following assumptions were used:
- ----------------------------------------------------------------------------
For the Years Ended December 31, 1993 1992 1991
- ----------------------------------------------------------------------------
Discount rate . . . . . . . . . . 8.00% 8.50% 9.00%
Expected long-term rate
of return . . . . . . . . . . . 8.50 9.00 9.70
Compensation/progression rate . . 5.00 6.75 7.50
<PAGE>19
The following table represents the Plan's funded status reconciled to the NU
Consolidated Balance Sheets:
- ----------------------------------------------------------------------------
At December 31, 1993 1992
- ----------------------------------------------------------------------------
(Thousands of Dollars)
Accumulated benefit obligation,
including $817,421,000 of vested
benefits at December 31, 1993 and
$719,608,000 of vested benefits at
December 31, 1992. . . . . . . . . . . . $ 898,788 $ 764,432
========== ==========
Projected benefit obligation. . . . . . . $1,141,271 $1,055,295
Less: Market value of plan assets. . . . 1,340,249 1,226,468
---------- ----------
Market value in excess of projected
benefit obligation . . . . . . . . . . . 198,978 171,173
Unrecognized transition amount. . . . . . (16,735) (18,277)
Unrecognized prior service costs. . . . . 10,287 8,658
Unrecognized net gain . . . . . . . . . . (275,043) (214,894)
---------- ---------
Accrued pension liability . . . . . . . . $ (82,513) $ (53,340)
========== =========
The following actuarial assumptions were used in calculating the Plan's
year-end funded status:
- ----------------------------------------------------------------------------
At December 31, 1993 1992
- ----------------------------------------------------------------------------
Discount rate . . . . . . . . . . . . . . 7.75% 8.00%
Compensation/progression rate . . . . . . 4.75 5.00
The discount rate for 1993 was determined by analyzing the interest rates, as
of December 31, 1993, of long-term, high-quality corporate debt securities
having a duration comparable to the 13.8-year duration of the plan.
During 1993, NU's work force was reduced by approximately 7 percent through a
work force reduction program that involved an early retirement program and
involuntary terminations. WMECO's direct cost of the program, which
approximated $3.0 million, included pension, severance, and other benefits.
<F11>10. POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
The company provides certain health care benefits, primarily medical and
dental, and life insurance benefits through a benefit plan to retired
employees. These benefits are available for employees leaving the company
who are otherwise eligible to retire and have met specified service
requirements. Through December 31, 1992, the company recognized the cost of
these benefits as they were paid. In December 1990, the FASB issued SFAS
106. This new standard requires that the expected cost of postretirement
benefits, primarily health and life insurance benefits, must be charged to
expense during the years that
<PAGE>20
eligible employees render service.
Effective January 1, 1993, the company adopted SFAS 106 on a prospective basis.
Total health care and life insurance cost, part of which were deferred or
charged to utility plant, approximated $5,038,000 in 1993, $2,174,000 in 1992,
and $1,567,000 in 1991.
On January 1, 1993, the accumulated postretirement benefit obligation (APBO)
represented the company's prior-service obligation upon the adoption of SFAS
106. As allowed by SFAS 106, the company is amortizing its APBO of
approximately $36 million over a 20-year period. For current employees and
certain retirees, the total SFAS 106 benefit is limited to two times the 1993
health care costs. The SFAS 106 obligation has been calculated based on this
assumption.
During 1993, the company did not fund SFAS 106 postretirement costs through
external trusts. The company expects to fund annually amounts once they have
been rate recovered and which also are tax-deductible under the Internal Revenue
Code.
The following table represents the plan's funded status reconciled to the
Balance Sheet at December 31, 1993:
(Thousands of Dollars)
Accumulated postretirement
benefit obligation of:
Retirees. . . . . . . . . . . . . . . . $(27,685)
Fully eligible active employees . . . . (38)
Active employees not eligible
to retire . . . . . . . . . . . . . . . (5,488)
--------
Total accumulated postretirement
benefit obligation . . . . . . . . . . (33,211)
Unrecognized transition amount. . . . . 31,183
Unrecognized net gain . . . . . . . . . (587)
---------
Accrued postretirement benefit
liability. . . . . . . . . . . . . . . $ (2,615)
=========
The components of health care and life insurance costs for the year ended
December 31, 1993 are:
(Thousands of Dollars)
Service cost. . . . . . . . . . . . . . $ 659
Interest cost . . . . . . . . . . . . . 2,676
Net amortization. . . . . . . . . . . . 1,703
--------
Net health care and life insurance
costs. . . . . . . . . . . . . . . . . $ 5,038
=======
For measurement purposes, an 11.1-percent annual rate of increase in the per
capita cost of covered health care benefits was assumed for 1993; the rate
was assumed to decrease to 5.4 percent for 2002. The effect of increasing the
assumed health care cost trend rates by one percentage point in each year would
increase the accumulated postretirement benefit obligation as of December 31,
1993 by $2.4
<PAGE>21
million and the aggregate of the service and interest cost components of net
periodic postretirement benefit cost for the year then ended by $227,000.
The weighted-average discount rate used in determining the accumulated
postretirement benefit obligation was 7.75 percent. The discount rate for
1993 was determined by analyzing the interest rates, as of December 31, 1993,
of the long-term, high-quality corporate debt securities having a duration
comparable to that of the Plan.
WMECO has received approval from the DPU to defer the incremental SFAS 106
postretirement costs. All deferred costs are expected to be recovered within
ten years.
<F12>11. COMMITMENTS AND CONTINGENCIES
CONSTRUCTION PROGRAM
The construction program is subject to periodic review and revision. Actual
construction expenditures may vary from such estimates due to factors such as
revised load estimates, inflation, revised nuclear safety regulations, delays,
difficulties in the licensing process, the availability and cost of capital, and
the granting of timely and adequate rate relief by regulatory commissions, as
well as actions by other regulatory bodies.
The company currently forecasts construction expenditures (including AFUDC) of
$170.1 million for the years 1994-1998, including $37.5 million for 1994. In
addition, the company estimates that nuclear fuel requirements, including
nuclear fuel financed through the NBFT, will be $72.7 million for the years
1994-1998, including $17.2 million for 1994. See <F3> Note 2, "Leases" for
additional information about the financing of nuclear fuel.
NUCLEAR PERFORMANCE
WMECO has incurred approximately $17 million in replacement-power costs
associated with Millstone outages that have been the subject of prudence
reviews in Connecticut. Recovery of prudently incurred replacement-power costs
is permitted through a retail fuel adjustment clause. The DPU reviews the
performance of WMECO's generating units on an annual basis. Management believes
that its actions with respect to these outages have been prudent and does not
expect the outcome of the DPU performance program reviews to have a material
adverse effect on WMECO's future earnings.
ENVIRONMENTAL MATTERS
WMECO is subject to regulation by federal, state, and local authorities with
respect to air and water quality, handling and the disposal of toxic
substances and hazardous and solid wastes, and the handling and use of chemical
products. WMECO has an active environmental auditing program to prevent,
detect, and remedy noncompliance with environmental laws or regulations and
believes that it is in substantial compliance with current environmental laws
and regulations. Changing environmental requirements could hinder the
construction of new fossil-fuel environmental generating units, transmission and
distribution lines, substations, and other facilities. The cumulative long-term
economic cost impact of increasingly stringent environmental requirements cannot
be estimated. Changing environmental requirements could also require extensive
and costly modifications to WMECO's existing hydro, nuclear, and fossil-fuel
generating units, and transmission and distribution systems, and could raise
operating costs significantly. As a result, WMECO may incur significant
additional environmental costs, greater than amounts included in cost of removal
and other reserves, in connection with the generation and transmission of
electricity and the storage, transportation, and disposal of by-products
<PAGE>22
and wastes. WMECO may also encounter significantly increased costs to remedy
the environmental effects of prior waste handling and disposal activities.
WMECO has recorded a liability for what it believes is, based upon information
currently available, the estimated environmental remediation costs for waste
disposal sites for which it expects to bear legal liability. To date, these
costs have not been material with respect to the earnings or financial position
of the company. In most cases, the extent of additional future environmental
cleanup costs is not estimable due to factors such as the unknown magnitude of
possible contamination, the appropriate remediation method, the possible effects
of future legislation and regulation, the possible effects of technological
changes related to future cleanup, and the difficulty of determining future
liability, if any, for the cleanup of sites at which WMECO may be determined to
be legally liable by the federal or state environmental agencies. In addition,
WMECO cannot estimate the potential liability for future claims that may be
brought against it by private parties. However, considering known facts and
existing laws and regulatory practices, management does not believe that such
matters will have a material adverse effect on WMECO's financial position or
future results of operations. At December 31, 1993, the liability recorded by
WMECO for its estimated environmental remediation costs, excluding any possible
insurance recoveries from third parties, amounted to $600,000. However, in the
event that it becomes necessary to effect environmental remedies that are
currently not considered probable, it is reasonably possible that, based on
information currently available and management intent, that the upper limit of
WMECO's environmental liability range could increase to approximately $1.5
million.
NUCLEAR INSURANCE CONTINGENCIES
The Price-Anderson Act currently limits public liability from a single incident
at a nuclear power plant to $9.4 billion. The first $200 million of liability
would be provided by purchasing the maximum amount of commercially available
insurance. Additional coverage of up to a total of $8.8 billion would be
provided by an assessment of $75.5 million per incident, levied on each of the
116 nuclear units that are currently subject to the Secondary Financial
Protection Program in the United States, subject to a maximum assessment of $10
million per incident per nuclear unit in any year. In addition, if the sum of
all public liability claims and legal costs arising from any nuclear incident
exceeds the maximum amount of financial protection, each reactor operator can
be assessed an additional 5 percent, up to $3.8 million, or $437.9 million in
total, for all 116 nuclear units. The maximum assessment is to be adjusted at
least every five years to reflect inflationary changes. Based on WMECO's
ownership interests in Millstone 1, 2, and 3, WMECO's maximum liability would
be $39.8 million per incident. In addition, through WMECO's power purchase
contracts with the four Yankee regional nuclear generating companies, WMECO
would be responsible for up to an additional $17.5 million per incident.
Payments for WMECO's ownership interest in nuclear generating facilities would
be limited to a maximum of $7.2 million per incident per year.
Insurance has been purchased from Nuclear Electric Insurance Limited (NEIL) to
cover: (1) certain extra costs incurred in obtaining replacement power during
prolonged accidental outages with respect to WMECO's ownership interests in
Millstone 1, 2, and 3, and CY, and (2) the cost of repair, replacement, or
decontamination or premature decommissioning of utility property resulting from
insured occurrences with respect to WMECO's ownership interests in Millstone 1,
2, and 3, CY, MY, and VY. All companies insured with NEIL are subject to
retroactive assessments if losses exceed the accumulated funds available to
NEIL. The maximum potential assessments against WMECO with respect to losses
arising during current policy years are approximately $2.3 million under the
replacement power policies and $4.5 million under the property damage,
decontamination, and decommissioning policies.
Although WMECO
<PAGE>23
has purchased the limits of coverage currently available from the conventional
nuclear insurance pools, the cost of a nuclear incident could exceed available
insurance proceeds.
Insurance has been purchased from American Nuclear Insurers/Mutual Atomic Energy
Liability Underwriters, aggregating $200 million on an industry basis for
coverage of worker claims. All companies insured under this coverage are
subject to retrospective assessments of $3.2 million per reactor. The
maximum potential assessments against WMECO with respect to losses arising
during the current policy period are approximately $2.3 million.
FINANCING ARRANGEMENTS FOR THE REGIONAL NUCLEAR GENERATING COMPANIES
The company believes that the regional nuclear generating companies may require
additional external financing in the next several years for construction
expenditures, nuclear fuel, and other purposes. Although the ways in which each
regional nuclear generating company will attempt to finance these expenditures
have not been determined, the company expects that it may be asked to provide
direct or indirect financial support for one or more of these companies.
PURCHASED POWER ARRANGEMENTS
WMECO purchases a portion of its electricity requirements pursuant to long-term
contracts with the Yankee companies. Under the terms of its agreements, the
company pays its ownership share (or entitlement share) of generating costs,
which include depreciation, operation and maintenance expenses, the estimated
cost of decommissioning, and a return on invested capital. These costs are
recorded as purchased power expense, and are recovered through the company's
rates. The total cost of purchases under these contracts for the units that are
operating amounted to $30.2 million in 1993, $29.2 million in 1992, and $27.9
million in 1991. See <F2> Note 1, "Summary Of Significant Accounting Policies
- - Investments and Jointly Owned Electric Utility Plant" and <F4> Note 3,
"Nuclear Decommissioning" for more information on the Yankee companies.
WMECO has entered into two arrangements for the purchase of capacity and energy
from nonutility generators. These arrangements have terms of 15 and 25 years,
and require the company to purchase the energy at specified prices or at formula
rates. For the 12 months ended December 31, 1993, 14 percent of NU system load
requirements was met by cogenerators and small power producers. The total cost
of the company's purchases under these arrangements amounted to $13.6 million
in 1993, $4.8 million in 1992, and $3.7 million in 1991. These costs are
recovered through the company's rates.
The estimated annual cost of the significant purchase power arrangements is
provided below:
- --------------------------------------------------------------------------
1994 1995 1996 1997 1998
---- ---- ---- ---- ----
(Millions of Dollars)
Yankee companies. . . . . . $29.5 $30.1 $33.7 $30.9 $35.0
Nonutility generators . . . 27.4 28.7 29.9 31.5 33.1
HYDRO-QUEBEC
Along with other New England utilities, WMECO, CL&P, PSNH, and HWP entered into
agreements to support transmission and terminal facilities to import electricity
from the Hydro-Quebec system in Canada. The company is obligated to pay, over
a 30-year period, its proportionate share of the annual
<PAGE>24
operation, maintenance, and capital costs of these facilities. WMECO's share of
Hydro-Quebec costs are currently forecast to be $19.9 million for the years
1994-1998, including $4.3 million for 1994.
PROPERTY TAXES
CY has a significant court appeal pending for its property tax assessment in the
town of Haddam, Connecticut, concerning production plant. The central issue is
the fair market value of utility property. The company believes that a properly
derived assessment that recognizes the effect of rate regulation will result in
a fair market value that approximates net book cost. This is the assessment
level that taxing authorities are predominantly using throughout Connecticut,
Massachusetts, and some of New Hampshire. However, towns such as Haddam
advocate a method that approximates reproduction cost. The company estimates
that, for the Haddam assessment, the change to a reproduction cost-methodology
could result in a property tax valuation approximately three times greater than
a value approximating net book cost. Although CY is currently paying property
taxes based on the higher assessment, to date, the higher assessment has not had
a material adverse effect on it or the company.
The company believes that assessment levels that approximate net book cost
accurately reflect the fair market value of regulated utility property.
However, because of uncertainties associated with the court appeal and the
potential impact of an adverse court decision on property tax assessment
policy in Connecticut, the company cannot estimate the potential effect of an
adverse court decision on future results of operations or financial
condition. However, the company believes that, based upon past regulatory
practices, it would be allowed to recover any increased property tax
assessment prospectively beginning at the time new rates are established.
<F13>12. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used to estimate the fair value of
each of the following financial instruments:
Cash, special deposits and nuclear decommissioning trusts: The carrying amount
approximates fair value.
Preferred stock and long-term debt: The fair value of WMECO's fixed-rate
securities is based upon the quoted market price for those issues or similar
issues. WMECO's adjustable rate preferred stock is assumed to have a fair value
equal to its carrying value.
The carrying amount of WMECO's financial instruments and the estimated fair
values are as follows:
<PAGE>25
- ----------------------------------------------------------------------------
Carrying Fair
At December 31, 1993 Amount Value
- ----------------------------------------------------------------------------
(Thousands of Dollars)
Preferred stock not subject to
mandatory redemption . . . . . . . . . . . . . $ 73,500 $ 74,000
Preferred stock subject to
mandatory redemption . . . . . . . . . . . . . 27,000 28,215
Long-term debt -
First Mortgage Bonds . . . . . . . . . . . . . 308,219 319,213
Other long-term debt . . . . . . . . . . . . . 85,012 85,012
- ----------------------------------------------------------------------------
Carrying Fair
At December 31, 1992 Amount Value
- ----------------------------------------------------------------------------
(Thousands of Dollars)
Preferred stock not subject to
mandatory redemption . . . . . . . . . . . . . $ 73,500 $ 72,600
Preferred stock subject to
mandatory redemption . . . . . . . . . . . . . 28,500 29,355
Long-term debt -
First Mortgage Bonds . . . . . . . . . . . . . 308,635 325,661
Other long-term debt . . . . . . . . . . . . . 84,820 84,820
The fair values shown above have been reported to meet the disclosure
requirements and do not purport to represent the amounts that those
obligations would be settled at.
In May 1993, the FASB issued Statement of Financial Accounting Standards No.
115, Accounting for Certain Investments in Debt and Equity Securities (SFAS
115). SFAS 115 requires companies to disclose the classification of investments
in debt or equity securities based on management's intent and ability to hold
the security. SFAS 115 also requires disclosure of the aggregate fair value,
gross unrealized holding gains, gross unrealized holding losses, and amortized
cost basis by major security type. Effective January 1, 1994, WMECO will adopt
SFAS 115 on a prospective basis. WMECO anticipates that the adoption of SFAS
115 will not have a material impact on future results of operations or financial
position.
<PAGE>26
WESTERN MASSACHUSETTS ELECTRIC COMPANY
- -----------------------------------------------------------------------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
- -----------------------------------------------------------------------------
To the Board of Directors
of Western Massachusetts Electric Company:
We have audited the accompanying balance sheets of Western Massachusetts
Electric Company (a Massachusetts corporation and a wholly owned subsidiary
of Northeast Utilities) as of December 31, 1993 and 1992, and the related
statements of income, common stockholder's equity, and cash flows for each of
the three years in the period ended December 31, 1993. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Western Massachusetts
Electric Company as of December 31, 1993 and 1992, and the results of its
operations and cash flows for each of the three years in the period ended
December 31, 1993, in conformity with generally accepted accounting principles.
As discussed in <F2> Note 1 to the Financial Statements, "Summary of Significant
Accounting Policies - Accounting Changes," effective January 1, 1993, Western
Massachusetts Electric Company changed its methods of accounting for property
taxes, income taxes, and postretirement benefits other than pensions.
/s/ ARTHUR ANDERSEN & CO.
ARTHUR ANDERSEN & CO.
Hartford, Connecticut
February 18, 1994
<PAGE>27
Western Massachusetts Electric Company
- ----------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
- ----------------------------------------------------------------------------
This section contains management's assessment of Western Massachusetts Electric
Company's (WMECO or the company) financial condition and the principal factors
having an impact on the results of operations. The company is a wholly owned
subsidiary of Northeast Utilities (NU). This discussion should be read in
conjunction with the company's financial statements and footnotes.
FINANCIAL CONDITION
OVERVIEW
The company's net income increased to $40.6 million in 1993 from $37.0 million
in 1992. The 1993 net income includes the impact of a change, in the first
quarter of 1993, in the method of accounting for Connecticut municipal property
taxes. This change resulted in a one-time contribution to net income of $3.9
million. (See the "Notes to Financial Statements" for further information about
this accounting change.)
Net income before the cumulative effect of accounting change was $36.7 million
in 1993. The decrease in net income from 1992 is mainly attributable to a
one-time charge in the third quarter of 1993 for the costs of the company's
employee-reduction program. This one-time charge lowered net income by about
$2 million.
The year 1993 was one of both challenge and success for the company. WMECO's
work force was reduced by about 12 percent in 1993 through an
employee-reduction program that involved early retirements and involuntary
terminations. The 1993 composite nuclear capacity factor of 80.8 percent was the
highest level the NU system has ever achieved and far above the national
average.
In 1994, the company will continue to face challenges associated with a lagging
economy and competition. Retail sales for 1993 were flat, as compared to 1992,
as a result of a stagnant Massachusetts economy. WMECO expects retail sales
growth of about 1.5 percent in 1994, based on some expected modest improvement
in the economy.
Competition within the electric utility industry is increasing. In response,
the company has developed, and is continuing to develop, a number of
initiatives to retain and continue to serve its existing customers and to expand
its retail and wholesale customer base. These initiatives are aimed at keeping
customers from either leaving WMECO's retail service territory or replacing
WMECO's electric service with alternative energy sources.
The cost of doing business, including the price of electricity, is higher in the
Northeast than in most other parts of the country. Relatively high state and
local taxes, labor costs, and other costs of doing business in New England also
contribute to competitive disadvantages for many industrial and commercial
customers of WMECO. These disadvantages have aggravated the pressures on
business customers in the current weakened regional economy. Since 1991, the
company has worked actively with the Massachusetts Office of Business
Development to package development incentives for a variety of retail and
wholesale customers. These economic development packages typically include both
electric rate discounts and incentive payments for energy-efficient
construction, as well as technical support and energy conservation services.
Targeted rate reductions in effect at the end of 1993 to a limited group of
large customers were successful in preserving revenues of approximately $7
million for the company. The amount of discounts provided to customers is
expected to increase as the company intensifies its efforts to retain existing
customers and gain new customers.
<PAGE>28
As a result of very limited load growth throughout the Northeast and the
operation of several new generating plants in the past five years, wholesale
competition has grown, and a seller's market for electricity has turned into a
buyer's market. The prices the company has been able to receive for new
wholesale sales have generally been far lower than the prices prevalent in 1988
and 1989. In future years, competition in the Northeast is expected to
increase, putting further downward pressure on prices. However, the potential
price decreases may be offset somewhat by an improvement in the region's economy
as well as by the retirement of a number of the region's existing generating
facilities.
The ability of retail customers to select an electricity supplier and then force
the local electric utility to transmit the power to the customer's site is known
as "retail wheeling." While wholesale wheeling is mandated by the Energy Policy
Act of 1992 under certain circumstances, retail wheeling is generally not
required in the company's jurisdiction. In Massachusetts, bills being reviewed
by legislative committees would permit limited retail wheeling in economically
distressed areas and to municipal and state-owned facilities.
NU management has taken steps to make the NU system companies, including WMECO,
more competitive and profitable in the changing utility environment. A
systemwide emphasis on improved customer service is a central focus of the
reorganization of NU that became effective on January 1, 1994. The
reorganization entails realignment of the system into two new core business
groups. The first core business group is devoted to energy resource
acquisition and wholesale marketing and focuses on nuclear, fossil, and
hydroelectric generation, wholesale power marketing, and new business
development. The second core business group oversees all customer service,
transmission and distribution operations, and retail marketing in
Massachusetts, Connecticut, and New Hampshire. These two core business groups
are served by various support functions.
In connection with NU's reorganization, the company has begun a corporate
reengineering process which should help it to identify opportunities to
become more competitive while improving customer service and maintaining
excellent operational performance. NU has aggressive cost-reduction targets
over the next three years, which should enable the company to remain competitive
with vulnerable customers in particular.
To date, the company has not been materially affected by competition, and it
does not foresee substantial adverse effect in the near future unless the
current regulatory structure is substantially altered. The company believes the
steps it is taking will have significant, positive effects in the next few
years. In addition, WMECO benefits from a diverse retail base. The company
has no significant dependence on any one customer or industry. The NU system's
extensive transmission facilities and diversified generating capacity are all
strong positive factors in the regional wholesale power market. NU serves about
30 percent of New England's electric needs and is one of the 20 largest electric
utility systems in the country.
Achieving measurable improvement in earnings in 1994 will depend, in part, on
the success of the company's wholesale power marketing, customer retention,
and reengineering efforts. These efforts should help increase WMECO's earnings
and improve the company's competitive position.
RATE MATTERS
Deferred charges at December 31, 1993 were approximately $214 million, which
includes $94 million for the adoption in 1993 of Statement of Financial
Accounting Standards (SFAS) No. 109, Accounting for Income Taxes. Deferred
charges, excluding the regulatory asset for SFAS No. 109, decreased by
approximately $30 million in 1993, primarily as a result of recoveries for the
deferred costs of Millstone 3 and the Yankee Atomic Electric Company (YAEC)
contract obligation. The company is currently recovering some amounts of its
remaining deferred charges from customers. Management expects that
substantially all of the deferred charges will be recovered through future
rates.
Under SFAS No. 109, the company reflected a regulatory asset and a deferred tax
liability for the cumulative amount of income taxes associated with timing
differences for which deferred taxes had not been provided but
<PAGE>29
are expected to be recovered from customers in the future. The adoption of SFAS
No. 109 has not had a material effect on results of operations.
The company also adopted SFAS No. 106, Employer's Accounting for Postretirement
Benefits Other Than Pensions, in 1993. Adopting SFAS No. 106 has not had a
material impact on financial condition or results of operations because the
company has received approval to defer these costs and expects to recover these
costs in the future.
See the "Notes To Financial Statements" for further details on deferred charges
and recently adopted accounting standards.
As a result of a May 1992 Department of Public Utilities (DPU) decision, the
company's annual retail rates increased by approximately $11 million or 2.7
percent on July 1, 1993. This increase is the second step of a two-year
settlement agreement proposed jointly by WMECO and the Massachusetts Attorney
General's Office and approved by the DPU. The first step went into effect on
July 1, 1992.
WMECO has incurred approximately $17 million in replacement- power costs
associated with Millstone outages that occurred over the period October 1990
through February 1992 that have been the subject of prudence reviews in
Connecticut. Recovery of prudently incurred replacement-power costs is
permitted through a retail fuel adjustment clause. The DPU reviews the
performance of WMECO's generating units on an annual basis. Management
believes that its actions with respect to these outages have been prudent and
does not expect the outcome of the DPU performance program reviews to have a
material adverse effect on WMECO's future earnings.
WMECO has a conservation charge (CC) in effect to recover the cost of
Conservation and Load Management (C&LM) programs above or below the base rate
recovery levels. WMECO filed a new CC in February 1994. WMECO expects to
spend about $14 million in 1994 on C&LM programs. The DPU issued a decision
approving the new CC rate effective March 1.
ENVIRONMENTAL MATTERS
The NU system devotes substantial resources to identify and then to meet the
multitude of environmental requirements it faces. The system has active
auditing programs addressing a variety of different regulatory requirements,
including an environmental auditing program to detect and remedy
noncompliance with environmental laws or regulations.
The company is potentially liable for environmental cleanup costs at a number
of sites both inside and outside its service territories. To date, the
future estimated environmental remediation costs for the sites for which the
company expects to bear some liability have not been material with respect to
the earnings or financial position of WMECO. At December 31, 1993, the
liability recorded by WMECO for its estimated environmental remediation
costs, excluding any possible insurance recoveries or recoveries from third
parties, amounted to approximately $600,000. However, while not probable, it
is reasonably possible, these costs could rise as much as $1.5 million. The
extent of additional future environmental cleanup costs is not estimable due
to factors such as the unknown magnitude of possible contamination and changes
in existing laws and regulatory practices.
The company expects that the implementation of Phase I of the 1990 Clean Air Act
Amendments will require only minimal emissions reductions. WMECO's exposure is
minimal because of the company's investment in nuclear energy in the 1970s and
1980s and the burning of low-sulfur fuels. The costs of meeting the Phase II
requirements cannot be estimated at this time because the emission limits have
not been determined.
The company's estimated cost to decommission its share of Millstone Units 1, 2,
and 3, in year-end 1993 dollars is $184 million. In addition, the company's
estimated cost to decommission its share of the regional nuclear generating
<PAGE>30
units is estimated to be approximately $50 million. These costs are being
recovered and recognized over the lives of the respective units. YAEC has begun
decommissioning its nuclear facility. The company's estimated obligation to
YAEC has been recorded on its balance sheets. Management expects that the
company will continue to be allowed to recover these costs.
For further information regarding nuclear decommissioning, environmental
matters, and other contingencies, see the "Notes To Financial Statements."
NUCLEAR PERFORMANCE
The composite capacity factor of the five nuclear generating units that the NU
system operates (including the Connecticut Yankee nuclear unit) was 80.8 percent
for 1993, compared with 63.7 percent in 1992 and a national average of 70.6
percent for 1993. The lower 1992 capacity factor was primarily the result of
the 1992 Millstone 2 steam generator replacement outage and some unexpected
technical and operating difficulties.
In 1993, NU was informed by the Nuclear Regulatory Commission (NRC) of three
apparent violations related to the circumstances surrounding the repair of a
leaking valve in the reactor coolant system at the Millstone 2 nuclear power
station. Millstone 2 was shut down on August 5, 1993 when extensive repair
efforts proved unsuccessful and the valve began to leak at a level beyond
operating requirements. NU was assessed and paid a civil penalty of $237,500
for the three violations that were identified during the NRC investigation.
NU has initiated a number of immediate and long-term actions designed to further
enhance the safe operation of all the NU nuclear plants. In an effort to
improve nuclear performance, NU management announced a reorganization of its
Connecticut-based nuclear organization in November 1993. The reorganization,
which is based on an overview of NU's future nuclear operational needs, resulted
in a number of personnel changes, including the appointment of a new senior vice
president of Millstone Station, realignment of engineering operations along unit
lines, and management consolidation. In addition, centralization of the nuclear
engineering function at the generating stations is expected to occur during the
summer of 1994. No material expense will be incurred by the company in
connection with the reorganization.
LIQUIDITY AND CAPITAL RESOURCES
Cash provided from operations decreased $0.5 million in 1993, compared with the
same period in 1992. Cash used for financing activities was $7.0 million higher
in 1993, compared with the same period in 1992, primarily due to higher
repayment of short-term debt partially offset by a net increase in long-term
debt. Cash used for investments was $7.5 million lower in 1993, compared with
the same period in 1992 due to lower construction expenditures.
The company has been able to shift its financing focus to refinancing
outstanding high-cost securities. Internally generated cash has generally
been, and is projected to continue to be, more than sufficient to cover
construction costs. The forecast through 1998 shows additional new
financings only in years with a large amount of securities maturing. The
company is obligated to meet $82.2 million of long-term debt and preferred
stock maturities and cash sinking-fund requirements for the 1994 through 1988
period, including $1.5 million in 1994. No new financings are planned for
1994.
Aggressive refinancing of its outstanding high-cost securities has enabled the
company to lower its cost of debt, thus lowering electric rates. There was no
new money financing in 1993. To take advantage of favorable market
conditions during 1993, the company refinanced $60 million of First Mortgage
Bonds and $53.8 million of pollution control bonds, in addition to
restructuring the company's various credit lines. The company intends, if
market conditions permit, to continue to refinance a portion of their
outstanding long-term debt and preferred stock at a lower effective cost.
<PAGE>31
The company's construction program expenditures, including allowance for funds
used during construction (AFUDC), for the period 1994 through 1998 are estimated
to be approximately $170 million, including $37.5 million for 1994. The
construction program's main focus is maintaining and upgrading the existing
transmission and distribution system, as well as nuclear and fossil-generating
facilities. The company does not foresee the need for new major generating
facilities until at least the year 2007.
The company and The Connecticut Light and Power Company utilize a nuclear fuel
trust to finance nuclear fuel requirements for their share of Millstone Units
1, 2, and 3. Nuclear fuel requirements for WMECO's share of Millstone Units 1,
2 and 3 of $72.7 million for the years 1994 through 1998, including $17.2
million for 1994, are expected to be financed by the trust.
RESULTS OF OPERATIONS
The components of the change in operating revenues for the past two years are
provided in the table below.
Change in Operating Revenues
(Increase/Decrease)
- -----------------------------------------------------------------------
1993 vs. 1992 1992 vs. 1991
- -----------------------------------------------------------------------
(Millions of Dollars)
Regulatory decisions $12.0 $22.5
Fuel and purchased power
cost recoveries (18.9) (18.3)
Sales volume 3.7 (3.2)
Other revenues 7.5 (0.1)
----- -----
Total revenue change $ 4.3 $ 0.9
===== =====
OPERATING REVENUES
Operating revenues increased $4.3 million from 1992 to 1993. Revenues related
to regulatory decisions increased primarily because of the effects of the
July 1992 and July 1993 retail rate increases. Fuel and purchased-power cost
recoveries decreased primarily due to lower energy costs. Retail sales in
1993 were flat. Other revenues increased primarily because of higher capacity
interchange revenues.
Operating revenues increased $0.9 million from 1991 to 1992. Revenues related
to regulatory decisions increased primarily because of the effects of the July
1991 and July 1992 retail rate increases. Fuel and purchased power cost
recoveries decreased primarily because of lower energy sales to other utilities.
Retail sales decreased 1.6 percent in 1992 as compared to 1991.
FUEL, PURCHASED, AND NET INTERCHANGE POWER
Fuel, purchased, and net interchange power decreased $18.6 million in 1993, as
compared to 1992, primarily because of lower outside purchases as a result of
better nuclear performance in 1993.
Fuel, purchased, and net interchange power decreased $13.4 million in 1992, as
compared to 1991, primarily because of lower interchange purchases.
<PAGE>32
OTHER OPERATION AND MAINTENANCE EXPENSES
Other operation and maintenance expenses increased $11.2 million in 1993, as
compared to 1992, primarily due to higher capacity interchange charges,
increased conservation expenses, and the 1993 one-time costs associated with the
employee-reduction program, partially offset by lower 1993 costs associated with
the operation and maintenance activities of the nuclear units.
Other operation and maintenance expenses increased $14.3 million in 1992, as
compared to 1991, primarily due to higher 1992 costs of operation and
maintenance activities at nuclear and fossil units, partially offset by the 1991
costs associated with a voluntary early retirement program.
AMORTIZATION OF REGULATORY ASSETS
Amortization of regulatory assets increased $3.4 million in 1993, as compared
to 1992, and $1.4 million in 1992, as compared to 1991, primarily because of
higher amortization of Millstone 3 deferred costs. The increase in 1993 is also
attributable to the gross-up of taxes due to SFAS No. 109.
FEDERAL AND STATE INCOME TAXES
Federal and state income taxes increased $7.8 million in 1993, as compared to
1992, primarily because of higher book taxable income and one-time
adjustments in 1992 causing 1992 taxes to be lower than would otherwise be
expected.<PAGE>33
<TABLE>
WESTERN MASSACHUSETTS ELECTRIC COMPANY
- -----------------------------------------------------------------------------
- -----------------------
SELECTED FINANCIAL DATA
- -----------------------------------------------------------------------------
- -----------------------
<CAPTION>
- -----------------------------------------------------------------------------
- -----------------------
1993 1992 1991
1990 1989
- -----------------------------------------------------------------------------
- -----------------------
(Thousands of Dollars)
<S> <C> <C> <C>
<C> <C>
Operating Revenues . . . . . . . $ 415,055 $ 410,720 $ 409,840 $
375,456 $ 348,720
Operating Income . . . . . . . . 60,067 60,513 59,723
57,448 55,483
Net Income . . . . . . . . . . . 40,594 37,022 34,637
35,191 38,578
Cash Dividends on
Common Stock . . . . . . . . . 28,785 29,536 31,499
34,459 28,974
Total Assets . . . . . . . . . . 1,204,642 1,130,684 1,119,593
1,134,986 1,135,096
Long-Term Debt*. . . . . . . . . 393,232 392,976 401,095
419,527 418,093
Preferred Stock Not Subject to
Mandatory Redemption . . . . . 73,500 73,500 88,500
88,500 88,500
Preferred Stock Subject to
Mandatory Redemption<F14>* . . 27,000 28,500 28,502
30,000 30,000
Obligations Under Capital
Leases<F14>*. . . . . . . . . . 36,902 41,509 44,134
52,370 56,730
<F14>*Includes portions due within one year.
</TABLE>
<TABLE>
- -----------------------------------------------------------------------------
- -----------------------
STATEMENTS OF QUARTERLY FINANCIAL DATA (Unaudited)
- -----------------------------------------------------------------------------
- -----------------------
<CAPTION>
Quarter Ended
- -----------------------------------------------------------------
1993 March 31 June 30 September
30 December 31
- -----------------------------------------------------------------------------
- -----------------------
<S> <C> <C> <C>
<C>
Operating Revenues. . . . . . . $108,950 $92,383 $105,510
$108,212
======== ======= ========
========
Operating Income. . . . . . . . $ 17,659 $13,529 $ 13,045
$ 15,834
======== ======= ========
========
Net Income. . . . . . . . . . . $ 15,350 $ 7,316 $ 7,182
$ 10,746
======== ======= ========
========
1992
- -----------------------------------------------------------------------------
- -----------------------
Operating Revenues. . . . . . . $112,897 $95,231 $ 99,524
$103,068
======== ======= =========
=========
Operating Income. . . . . . . . $ 20,965 $ 9,276 $ 11,849
$ 18,423
======== ======= =========
=========
Net Income. . . . . . . . . . . $ 14,427 $ 3,518 $ 6,312
$ 12,765
======== ======= =========
========
</TABLE>
<PAGE>34
<TABLE>
WESTERN MASSACHUSETTS ELECTRIC COMPANY
<CAPTION>
- -----------------------------------------------------------------------------
- -----------------------
STATISTICS
- -----------------------------------------------------------------------------
- -----------------------
Gross Electric Average
Utility Plant Annual
December 31, Use Per Electric
(Thousands of kWh Sales Residential Customers
Employees
Dollars) (Millions) Customer (kWh) (Average)
(December 31,)
- -----------------------------------------------------------------------------
- -----------------------
<S> <C> <C> <C> <C>
<C>
1993 $1,242,927 4,715 7,351 192,542
657
1992 1,214,386 4,155 7,433 191,920
739
1991 1,199,362 3,780 7,494 191,692
797
1990 1,184,285 3,874 7,619 191,759
826
1989 1,147,780 3,975 7,878 190,217
849
</TABLE>
<PAGE>35
Western Massachusetts Electric Company
First Mortgage Bonds
--------------------
Trustee and Interest Paying Agent
The First National Bank of Boston, Corporate Trust Department
P.O. Box 1897, Boston, Massachusetts 02105
Preferred Stock
Transfer Agent, Dividend Disbursing Agent and Registrar
Northeast Utilities Service Company Shareholder Services
P.O. Box 5006, Hartford, CT 06102-5006
1994 Dividend Payment Dates
7.72% Series B -
January 1, April 1, July 1 and October 1
7.60% Series -
February 1, May 1, August 1 and November 1
DARTS*
February 8, March 29, May 17, July 6, August 23,
October 11, and November 29
Address General Correspondence in Care of:
Northeast Utilities Service Company
Investor Relations Department
P.O. Box 270
Hartford, Connecticut 06141-0270
Tel. (203) 665-5000
General Office
174 Brush Hill Avenue, West Springfield, Massachusetts, 01090-0010
_______________________________
*Transfer and Paying Agent:
Bankers Trust Company, Corporate Trust and Agency Group
P.O. Box 318, Church Street Station, New York, New York 10015
The data contained in this Report is submitted for the sole purpose of
providing information to present stockholders about the Company.
<PAGE>
Exhibit 13.4
1993
ANNUAL REPORT
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
<PAGE>
1993 Annual Report
Public Service Company of New Hampshire
Index
Contents Page
Balance Sheets ......................................... 1-2
Statements of Income ................................... 3
Statements of Cash Flows ............................... 4
Statements of Common Equity ............................ 5
Notes to Financial Statements .......................... 6-27
Report of Independent Public Accountants/
Independent Auditors' Report .................... 28-29
Management's Discussion and Analysis of Financial
Condition and Results of Operations ................... 30-35
Selected Financial Data ................................ 37-38
Statistics ............................................. 39
Statements of Quarterly Financial Data ................. 39
Preferred Stockholder and Bondholder Information ....... Back Cover
<PAGE>
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
BALANCE SHEETS
<TABLE>
<CAPTION>
At December 31, 1993 1992
- -------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C>
ASSETS
- ------
Utility Plant, at original cost:
Electric......................................... $1,980,050 $1,887,659
Less: Accumulated provision for depreciation.. 441,076 410,026
----------- -----------
1,538,974 1,477,633
Construction work in progress.................... 8,573 4,363
Nuclear fuel, net................................ 2,107 2,337
----------- -----------
Total net utility plant...................... 1,549,654 1,484,333
----------- -----------
Other Property and Investments:
Nuclear decommissioning trusts, at cost.......... 1,486 1,147
Investments in regional nuclear generating
companies and subsidiary company, at equity..... 19,816 19,917
Other, at cost................................... 429 422
----------- -----------
21,731 21,486
----------- -----------
Current Assets:
Cash and special deposits........................ 5,995 2,328
Receivables, less accumulated provision for
uncollectible accounts of $1,816,000 in 1993
and of $2,780,000 in 1992...................... 76,665 75,094
Receivables from affiliated companies............ 859 2,827
Accrued utility revenues......................... 35,770 32,213
Fuel, materials, and supplies, at average cost... 41,187 45,123
Prepayments and other............................ 10,429 9,261
----------- -----------
170,905 166,846
----------- -----------
Deferred Charges:
Regulatory asset--rate agreement <F1>(Note 1).... 769,498 868,716
Regulatory asset--income taxes, net <F1>(Note 1). 54,250 -
Unrecovered contract obligation--YAEC <F4>(Note 4) 24,150 28,160
Energy adjustment clause <F1>(Note 1)............ 122,478 82,175
Unamortized debt expense......................... 19,643 24,679
Deferred taxes, net.............................. - 66,670
Deferred receivable from affiliated company...... 33,284 32,909
Other............................................ 8,918 17,794
----------- -----------
1,032,221 1,121,103
----------- -----------
Total Assets................................. $2,774,511 $2,793,768
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>1
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
BALANCE SHEETS
<TABLE>
<CAPTION>
At December 31, 1993 1992
- -----------------------------------------------------------------------------
- ------
(Thousands of
Dollars)
<S> <C> <C>
CAPITALIZATION AND LIABILITIES
- ------------------------------
Capitalization:
Common stock, $1 par value--authorized
and outstanding 1,000 shares in 1993 and 1992....... $ 1 $
1
Capital surplus, paid in............................. 421,245
420,762
Retained earnings.................................... 60,840
21,853
-----------
- -----------
Total common equity......................... 482,086
442,616
Cumulative preferred stock subject to mandatory
redemption--$25 par value--authorized 25,000,000 shares;
outstanding 5,000,000 shares in 1993 and 1992.. 125,000
125,000
Long-term debt....................................... 999,985
1,093,985
-----------
- -----------
Total capitalization........................ 1,607,071
1,661,601
-----------
- -----------
Obligations Under Seabrook Power Contract
and Other Capital Leases <F2>(Note 2)............... 815,553
752,866
-----------
- -----------
Current Liabilities:
Notes payable to banks............................... -
35,000
Notes payable to affiliated company.................. 2,500
8,500
Long-term debt--current portion...................... 94,000
94,000
Obligations under Seabrook Power Contract and
other capital leases--current portion <F2>(Note 2).. 41,006
34,960
Accounts payable..................................... 27,119
28,406
Accounts payable to affiliated companies............. 17,576
19,183
Accrued taxes........................................ 122
1,725
Accrued interest..................................... 11,142
11,281
Accrued pension benefits............................. 31,890
30,683
Other................................................ 22,014
23,727
-----------
- -----------
247,369
287,465
-----------
- -----------
Deferred Credits:
Accumulated deferred income taxes <F1>(Note 1)....... 18,076
- -
Accumulated deferred investment tax credits.......... 6,174
6,740
Deferred contract obligation--YAEC <F4>(Note 4)...... 24,150
28,160
Deferred revenue from affiliated company <F11>(Note 11) 33,284
32,909
Other................................................ 22,834
24,027
-----------
- -----------
104,518
91,836
-----------
- -----------
Commitments and Contingencies <F11>(Note 11)
Total Capitalization and Liabilities........ $ 2,774,511 $
2,793,768
===========
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>2
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
- ------------
Jan. 1, June 5, Jan. 1, May 16,
Jan. 1,
1993 1992 1992 1991
1991
to to to to
to
Dec. 31, Dec. 31, June 4, Dec. 31,
May 15,
For the Periods 1993 1992 1992 1991
1991
- -----------------------------------------------------------------------------
- ------------
(Thousands of Dollars)
|
|
<S> <C> <C> | <C> <C>
| <C>
Operating Revenues.................... $864,415 $492,559 |$381,769 $539,827
|$ 246,281
--------- ---------|---------
- ---------|----------
Operating Expenses: |
|
Operation-- |
|
Fuel, purchased and net |
|
interchange power................ 208,023 105,346 | 123,784 139,166
| 95,261
Other............................. 301,534 176,679 | 103,250 119,296
| 80,231
Maintenance......................... 35,427 20,535 | 22,520 42,335
| 19,936
Depreciation........................ 38,580 21,526 | 25,183 36,590
| 28,269
Amortization of regulatory |
|
assets, net........................ 67,379 51,143 | 36,528 53,554
| -
Federal and state income |
|
taxes <F8>(Note 8)................. 73,263 39,197 | 16,449 38,316
| (12,769)
Taxes other than income taxes....... 34,675 16,927 | 19,805 27,815
| 13,737
--------- ---------|---------
- ---------|----------
Total operating expenses........ 758,881 431,353 | 347,519 457,072
| 224,665
--------- ---------|---------
- ---------|----------
Operating Income...................... 105,534 61,206 | 34,250 82,755
| 21,616
--------- ---------|---------
- ---------|----------
Other Income: |
|
Deferred Seabrook return--other |
|
funds.............................. - - | 12,101 15,578
| -
Equity in earnings of regional |
|
nuclear generating companies |
|
and subsidiary company............. 1,371 1,031 | 869 1,426
| 681
Bankruptcy related expenses......... - - | (5,084) (2,574)|
(9,314)
Gain on generating projects......... - - | 6,498 -
| 12,446
Other, net.......................... 1,041 2,519 | 63 8,706
| 3,359
Income taxes - credit............... 23,044 14,254 | 12,814 20,665
| (12,495)
--------- ---------|---------
- ---------|----------
Other income, net............... 25,456 17,804 | 27,261 43,801
| (5,323)
--------- ---------|---------
- ---------|----------
Income before interest charges.. 130,990 79,010 | 61,511 126,556
| 16,293
--------- ---------|---------
- ---------|----------
Interest Charges: |
|
Interest on long-term debt.......... 77,842 47,625 | 54,125 87,620
| 32,423
Post-petition interest.............. - - | - -
| 42,101
Other interest...................... 911 1,987 | 3,913 130
| 3,238
Deferred Seabrook return--borrowed |
|
funds, net of income taxes........ - - | (9,305) (13,888)|
-
--------- ---------|---------
- ---------|----------
Interest charges, net........... 78,753 49,612 | 48,733 73,862
| 77,762
--------- ---------|---------
- ---------|----------
Income (Loss) before extraordinary |
|
loss................................ 52,237 29,398 | 12,778 52,694
| (61,469)
Extraordinary loss from |
|
reorganization...................... - - | - -
| (39,322)
--------- ---------|---------
- ---------|----------
Net Income (Loss)..................... $ 52,237 $ 29,398 |$ 12,778 $ 52,694
|$(100,791)
========= =========|=========
=========|==========
</TABLE>
PSNH was reorganized on May 16, 1991 and became a wholly owned subsidiary of
Northeast Utilities on June 5, 1992.
The accompanying notes are an integral part of these financial statements.
<PAGE>3
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
- ------------
Jan. 1, June 5, Jan. 1, May 16,
Jan. 1,
1993 1992 1992 1991
1991
to to to to
to
Dec. 31, Dec. 31, June 4, Dec. 31,
May 15,
For the Periods 1993 1992 1992 1991
1991
- -----------------------------------------------------------------------------
- ------------
(Thousands of Dollars)
<S> <C> <C> <C> <C>
<C>
Cash Flows From Operations:
Net income (loss)..........................$ 52,237 $ 29,398 |$ 12,778 $ 52,694
|$ (100,791)
Adjusted for the following: |
|
Depreciation.............................. 38,665 21,561 | 25,183 36,590
| 28,269
Deferred income taxes and investment |
|
tax credits, net........................ 50,027 22,543 | 3,141 17,591
| (294)
Deferred return - Seabrook................ - - | (21,406)
(29,466)| -
Deferred energy costs, net of amortization (39,660) (42,520)| 1,469
(38,909)| -
Amortization of regulatory asset<F1>(Note 1)89,822 51,836 | 36,528 53,554
| -
Other sources of cash..................... 15,394 12,088 | 15,967 3,899
| 2,362
Other uses of cash........................ (12,042) (4,825)| (4,355)
(47,117)| (11,364)
Changes in working capital: |
|
Receivables and accrued utility revenues. (3,161) (18,314)| 34,432 44,976
| 7,962
Fuel, materials, and supplies.......... 3,936 459 | (4,945)
(23,187)| 4,482
Accounts payable....................... (2,894) 5,083 | (8,189)
(23,769)| 39,299
Accrued taxes.......................... (1,602) (17,323)| 20,409
(22,693)| 25,232
Other working capital (excludes cash).. (2,224) 12,610 | (26,056)
(55,114)| 27,761
--------- --------|---------
- --------|-----------
Net cash flows from (used for) operations... 188,498 72,596 | 84,956
(30,951)| 22,918
--------- --------|---------
- --------|-----------
Cash Flows From Financing Activities: |
|
Common shares.............................. - 425,000 | - 846
| -
Long-term debt............................. 44,800 75,000 | - -
| 1,331,785
Preferred stock............................ - - | - -
| 125,000
Financing expenses......................... (267) - | (45)
(7,734)| (21,132)
Net increase(decrease) in short-term debt.. (41,000) (64,500)| - 87,200
| (292)
Reacquisitions and retirements of |
|
long-term debt...........................(138,800)(171,000)| (27,000) -
| -
Cash dividends on preferred |
|
stock<F6>(Note 6)........................ (13,250) (9,938)| (3,312)
(8,282)| -
Acquisition settlement <F1>(Note 1)........ - (841,466)| - -
| -
Settlement of bankruptcy claims............ - - | -
(14,412)|(1,505,373)
--------- --------|---------
- --------|-----------
Net cash flows from (used for) |
|
financing activities.................(148,517)(586,904)| (30,357) 57,618
| (70,012)
-------- ---------|---------
- --------|-----------
Investment Activities: |
|
Investments in plant: |
|
Electric utility plant................... (35,360) (15,352)| (25,266)
(22,683)| (19,852)
Nuclear fuel............................. (614) (552)| (9,990)
(3,125)| 3,386
-------- --------|---------
- --------|-----------
Net cash flows used for investments in plant (35,974) (15,904)| (35,256)
(25,808)| (16,466)
Sale of Seabrook assets to NAEC............ - 504,265 | - -
| -
Other investment activities, net .......... (340) (180)| -
30 | (3)
--------- --------|---------
- --------|-----------
Net cash flows from (used for) investments.. (36,314) 488,181 | (35,256)
(25,778)| (16,469)
--------- --------|---------
- --------|-----------
Net Incr.\(Decr.) In Cash for the Period.... 3,667 (26,127)| 19,343 889
| (63,563)
Cash and special deposits - |
|
beginning of period..................... 2,328 28,455 | 9,112 8,223
| 71,786
--------- --------|---------
- --------|-----------
Cash and special deposits - end of period...$ 5,995 $ 2,328 |$ 28,455 $ 9,112
|$ 8,223
========= ========|=========
========|===========
Supplemental Cash Flow Information: |
|
Cash paid during the periods for: |
|
Interest, net of amounts capitalized |
|
during construction......................$ 75,609 $ 35,405 |$ 53,427 $ 71,909
|$ 349,663
========= ========|=========
========|===========
Income taxes..............................$ 2,390 $ 410 |$ 909 $
60 |$ 20
========= ========|=========
========|===========
Increase in obligations: |
|
Seabrook Power Contract...................$ 84,796 $ 37,490 |$ - $ -
|$ -
======== =========|=========
========|===========
Capital leases............................$ 4,696 $ - |$ - $ -
|$ -
========= ========|=========
========|===========
</TABLE>
PSNH was reorganized on May 16, 1991 and became a wholly owned subsidiary of
Northeast Utilities
on June 5, 1992.
The accompanying notes are an integral part of these financial statements.
<PAGE>4
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
STATEMENTS OF COMMON EQUITY
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
- ------------
Capital
Common Surplus, Retained
Stock Paid In Earnings
Total
- -----------------------------------------------------------------------------
- ------------
(Thousands of
Dollars)
<S> <C> <C> <C>
<C>
Balance at January 1, 1991.............. $210,773 $435,420 $(742,207)
$ (96,014)
Net loss............................ (61,469)
(61,469)
--------- --------- ----------
- ----------
Balance at May 15, 1991................. $210,773 $435,420 $(803,676)
$(157,483)
========= ========= ==========
==========
_____________________________________________________________________________
____________
Balance at May 16, 1991................. $ 31,982 $607,366 $ -
$ 639,348
Net income.......................... 52,694
52,694
Cash dividends on preferred stock... (8,282)
(8,282)
Stock dividends on common stock..... 5,470 38,310 (43,780)
-
Issuance of 42,313 shares of
common stock, $1 par value........ 42 622
664
--------- --------- ----------
- ----------
Balance at December 31, 1991............ 37,494 646,298 632
684,424
Net income.......................... 12,778
12,778
Cash dividends on preferred stock... (5,704)
(5,704)
Stock dividends on common stock..... 1,962 16,456 (18,418)
-
Capital stock expenses, net......... (2)
(2)
--------- --------- ----------
- ----------
Balance at June 4, 1992................. $ 39,456 $662,752 $ (10,712)
$ 691,496
========= ========= ==========
==========
_________________________________________________________________
________________________
Balance at June 5, 1992................. $ - $ - $ -
$ -
Net income.......................... 29,398
29,398
Cash dividends on preferred stock... (7,545)
(7,545)
Issuance of 1,000 shares of common
stock, $1 par value............... 1
1
Premium on common stock............. 424,999
424,999
Capital stock expenses, net......... (4,237)
(4,237)
--------- --------- ----------
- ----------
Balance at December 31, 1992............ 1 420,762 21,853
442,616
Net income.......................... 52,237
52,237
Cash dividends on preferred stock... (13,250)
(13,250)
Capital stock expenses, net......... 483
483
--------- --------- ----------
- ----------
Balance at December 31, 1993............ $ 1 $421,245 $ 60,840
$ 482,086
========= ========= ==========
==========
</TABLE>
PSNH was reorganized on May 16, 1991 and became a wholly owned subsidiary of
Northeast Utilities
on June 5, 1992.
The accompanying notes are an integral part of these financial statements.
<PAGE>5
NOTES TO FINANCIAL STATEMENTS
<F1>
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
EMERGENCE FROM BANKRUPTCY AND MERGER WITH NORTHEAST UTILITIES
On January 28, 1988, Public Service Company of New Hampshire (PSNH or
the company) filed a petition for reorganization under Chapter 11 of
the Bankruptcy Code.
On January 2, 1990, Northeast Utilities Service Company (NUSCO) filed
a plan of reorganization (the Plan) on behalf of Northeast Utilities
(NU), the Creditors Committee, the Equity Committee, and various PSNH
bondholders, with the support of the state of New Hampshire. On
April 20, 1990, following a vote by all classes of creditors and equity
security holders of PSNH and hearings in the Bankruptcy Court,the Plan was
confirmed by the Bankruptcy Court. From April 30, 1990 until the June 5,
1992 acquisition date, NUSCO managed PSNH in accordance with a management
services agreement approved by the Bankruptcy Court.
On May 16, 1991 (Reorganization Date) the company emerged from
bankruptcy pursuant to the Plan as a stand-alone company, subject to
a merger agreement (Merger Agreement) with NUSCO and NU Acquisition
Corp. (NUAC). On the Reorganization Date, the company's then existing
security holders and creditors were entitled to receive distributions of cash
and new PSNH securities.
Under the Plan, a distribution totaling approximately $2.3 billion in
cash and securities was made as of May 16, 1991 to former creditors
and equity security holders of the company. Former holders of secured claims
received cash in the full amount of their claims for principal and unpaid
interest. Former holders of unsecured claims received a distribution in the
amount of their claims for principal plus pre-petition interest, less any
applicable original issue discount unamortized at the petition date, and a
total of $110.6 million of post-petition interest. Approximately $593
million of such distribution was made in cash and the balance in shares of
new common stock. Former holders of shares of preferred and common stock of
the company received $205 million principal amount of 15.23 percent Notes,
shares of new common stock and certificates entitling the holder to receive
warrants to purchase NU common shares. Former holders of the company's
outstanding warrants received a total of $1.3 million in cash.
The company accounted for the reorganization using fresh start accounting.
Accordingly, all assets and liabilities were restated to their reorganization
value, which approximated fair value at the Reorganization Date.
On June 5, 1992 (Acquisition Date), NU completed its acquisition of PSNH when
NUAC was merged into PSNH pursuant to the Merger Agreement and the company
became a wholly owned operating subsidiary of NU. In a related transaction,
PSNH's 35.6 percent share of the Seabrook 1 nuclear power plant (Seabrook 1)
and other Seabrook-related assets were transferred to North Atlantic Energy
Corporation (NAEC), another new NU subsidiary, for approximately $504 million
in cash and the assumption of the company's obligations under the $205
million, 15.23 percent Notes.
The total cash required to effect the acquisition of PSNH was approximately
$941 million. The sources of the $941 million were a $425 million equity
investment by NU into PSNH, a $161 million equity investment by NU into NAEC,
and NAEC's issuance and sale of $355 million principal amount of First
Mortgage Bonds. The proceeds were used (a) to make a distribution of $20 per
share, or approximately $789 million in the aggregate, to the holders of the
approximately 39.5 million outstanding shares of the company's new common
stock, (b) to reimburse $45 million of NU acquisition expenses under the
Plan,
<PAGE>6
(c) to provide $49 million to reduce PSNH's Term Loan, (d) to provide
$7 million to meet the tax on the transfer of Seabrook to NAEC, and (e) to
reduce PSNH's short-term borrowings with the balance of funds. The Plan also
called upon NU to issue to former PSNH equity security holders warrants
entitling the holders to purchase approximately 8.4 million NU common shares
at an exercise price of $24 per share. The warrants expire on June 5, 1997.
In accordance with generally accepted accounting principles, the acquisition
of PSNH has been accounted for as a purchase.
On June 29, 1992, PSNH's New Hampshire Yankee Division (NHY) was dissolved
and North Atlantic Energy Service Corporation (NAESCO), a wholly owned
subsidiary of NU, with the approval of the Securities and Exchange Commission
(SEC) and the Nuclear Regulatory Commission (NRC), began management of the
Seabrook 1 power plant as agent for the Seabrook joint owners. On June 29,
1992, all NHY employees became employees of NAESCO.
GENERAL
PSNH, The Connecticut Light and Power Company, Western Massachusetts Electric
Company, NAEC, and Holyoke Water Power Company are the operating subsidiaries
comprising the Northeast Utilities system (the system)and are wholly owned by
NU.
Other wholly owned subsidiaries of NU provide substantial support services to
the system. NUSCO supplies centralized accounting, administrative, data
processing, engineering, financial, legal, operational, planning, purchasing,
and other services to the system companies. Northeast Nuclear Energy Company
acts as agent for system companies in constructing and operating the
Millstone nuclear generating facilities.
All transactions among affiliated companies are on a recovery of cost basis
which may include amounts representing a return on equity, and are subject to
approval by various federal and state regulatory agencies.
ACCOUNTING CHANGES
Income Taxes: The company adopted the provisions of Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes (SFAS 109),"
effective January 1, 1993. For information on this change, see <F1>Note 1,
"Summary of Significant Accounting Policies - Income Taxes."
Postretirement Benefits Other Than Pensions: PSNH adopted the provisions of
Statement of Financial Accounting Standards No. 106, "Employer's Accounting
for Postretirement Benefits Other Than Pensions" (SFAS 106), effective
January 1, 1993. For information on this change, see <F10>Note 10,
"Postretirement Benefits Other Than Pensions."
ACCOUNTING RECLASSIFICATIONS
For periods prior to December 31, 1993, certain amounts in the accompanying
financial statements of PSNH have been reclassified to conform with the
December 31, 1993 presentations.
PUBLIC UTILITY REGULATION
NU is registered with the SEC as a holding company under the Public Utility
Holding Company Act of 1935 (1935 Act), and it and its
subsidiaries, including PSNH, are subject to the provisions of the 1935 Act.
Arrangements among the system companies, outside agencies, and other
utilities covering
<PAGE>7
interconnections, interchange of electric power, and sales of utility
property are subject to regulation by the Federal Energy Regulatory
Commission (FERC) and/or the SEC. The company is subject to further
regulation for rates and other matters by the FERC and the New Hampshire
Public Utilities Commission (NHPUC), and follows the accounting policies
prescribed by the commissions.
REVENUES
Other than special contracts, utility revenues are based on authorized rates
applied to each customer's use of electricity. Rates can be changed only
through a formal proceeding before the appropriate regulatory commission. At
the end of each accounting period, PSNH accrues an estimate for the amount of
energy delivered but unbilled.
For additional information see <F11> Note 11, "Commitments and Contingencies
- - PSNH Rate Agreement."
INVESTMENTS AND JOINTLY OWNED ELECTRIC UTILITY PLANT
Regional Nuclear Generating Companies: PSNH owns common stock of four
regional nuclear generating companies (Yankee companies). The Yankee
companies, with PSNH's ownership interests, are:
Connecticut Yankee Atomic Power Company (CY)....... 5.0%
Yankee Atomic Electric Company (YAEC) ............. 7.0
Maine Yankee Atomic Power Company (MY) ............ 5.0
Vermont Yankee Nuclear Power Corporation (VY) ..... 4.0
PSNH's investments in the Yankee companies are accounted for on the equity
basis. The electricity produced by the facilities that are operating is
committed to the participants substantially on the basis of their ownership
interests and is billed pursuant to contractual agreements. For more
information on these agreements, see <F11>Note 11, "Commitments and
Contingencies - Purchased Power Arrangements."
The 173-megawatt (MW) YAEC nuclear power plant was shut down permanently on
February 26, 1992. For more information on the Yankee companies, see <F4>
Note 4, "Nuclear Decommissioning."
Millstone 3: The company has a 2.85 percent joint ownership interest in
Millstone 3, a 1,149 MW nuclear generating unit. As of December 31, 1993,
plant-in-service and the accumulated provision for depreciation included
approximately $118.1 million and $21.1 million, respectively, for PSNH's
proportionate share of Millstone 3. PSNH's share of Millstone 3 expenses is
included in the corresponding operating expenses on the accompanying
Statements of Income.
Wyman Unit 4: PSNH has a 3.14 percent ownership interest in Wyman Unit 4
(Wyman), a 620 MW oil-fired generating unit. At December 31, 1993,
plant-in-service and the accumulated provision for depreciation included
approximately $6.0 million and $3.1 million, respectively, for PSNH's share
of Wyman. PSNH's share of Wyman expenses are included in the corresponding
operating expenses on the accompanying Statements of Income.
<PAGE>8
REGULATORY ASSET
The regulatory asset represents the aggregate value placed by the rate
agreement with the state of New Hampshire (Rate Agreement) on PSNH's assets
in excess of the net book value of PSNH's non-Seabrook assets and the $700
million value assigned to Seabrook by the Rate Agreement. The regulatory
asset was valued at approximately $920.6 million on the Acquisition Date.
The Rate Agreement provides for the recovery, through rates, of the
amortization of the regulatory asset with a return each year on the
unamortized portion of the asset. The Rate Agreement provides that $425
million of the regulatory asset be amortized over the first seven years after
the Reorganization Date, with the remaining amount to be amortized over
the 20-year period after the Reorganization Date. In 1993, an adjustment
related to certain liabilities associated with the acquisition reduced the
regulatory asset by approximately $9.4 million. In accordance with the Rate
Agreement, approximately $265 million of the remaining regulatory asset is
scheduled to be amortized and recovered through rates by 1998, and the
balance of approximately $504 million is scheduled to be amortized and
recovered through rates by 2011.
DEPRECIATION
The provision for depreciation is calculated using the straight-line method
based on estimated remaining lives of depreciable utility plant-in-service,
adjusted for salvage value and removal costs, as approved by the NHPUC.
Except for major facilities, depreciation factors are applied to the average
plant-in-service during the period. Major facilities are depreciated from
the time they are placed in service. When plant is retired from service, the
original cost of plant, including costs of removal, less salvage, is charged
to the accumulated provision for depreciation. For Millstone 3, the costs of
removal, less salvage, that have been funded through an external
decommissioning trust will be paid with funds from the trust and charged to
the accumulated reserve for decommissioning included in the accumulated
provision for depreciation over the expected service life of the plant. See
<F4> Note 4, "Nuclear Decommissioning," for additional information.
The depreciation rates for the several classes of electric plant-in-service
are equivalent to a composite rate of 3.6 percent for the year ended December
31, 1993, 3.5 percent for the six-month and twenty-six day period ending
December 31, 1992, 3.4 percent for the five-month and four-day period ending
June 4, 1992, 3.4 percent for the seven and one-half months ended December
31, 1991, and 3.1 percent for the four and one-half months ended May 15,
1991.
INCOME TAXES
The tax effect of temporary differences (differences between the periods in
which transactions affect income in the financial statements and the periods
in which they affect the determination of income subject to tax) is accounted
for in accordance with the ratemaking treatment of the applicable regulatory
commissions. See <F8> Note 8, "Income Tax Expense," for the components of
income tax expense.
In 1992, the Financial Accounting Standards Board (FASB) issued SFAS 109.
SFAS 109 supersedes previously issued income tax accounting standards. PSNH
adopted SFAS 109, on a prospective basis, during the first quarter of 1993.
The adoption of SFAS 109 has not had a material effect on the net income or
on the balance sheet of the company. As a result of the adoption of SFAS
109, the company has increased the deferred tax asset for
net-operating-losses (NOLs) previously not recognized. A valuation reserve
was not established. As it is probable that the increase in deferred tax
liabilities will be recovered from customers through rates, PSNH also
established a regulatory asset. SFAS 109 does not permit net-of-tax
accounting.
<PAGE>9
The temporary differences which give rise to the accumuated deferred tax
obligation at December 31, 1993, are as follows:
(Thousands of Dollars)
Net operating loss carryforwards ........... $(270,612)
Accelerated depreciation and
other plant-related differences .......... 150,238
The tax effect of net regulatory assets .... 80,922
Other....................................... 57,528
---------
$ 18,076
=========
At December 31, 1993, PSNH had a NOL carryforward of approximately $788
million, and an Alternative Minimum Tax (AMT) NOL carryforward of $600
million, both to be used against PSNH's federal taxable income and expiring
between the years 1999 and 2007. PSNH also had Investment Tax Credit (ITC)
carryforwards of $66 million, which expire between the years 1994 and 2005.
The reorganization of PSNH under Chapter 11 of the United States Bankruptcy
Code limits its ability to use its remaining NOL and ITC carryforwards so
that some portion may expire unused. Of the carryforward amounts indicated
above, approximately $323 million of the NOL, $274 million of the AMT NOL,
and $35 million of the ITC carryforwards are available for use subject to
applicable limits of the Internal Revenue Code.
ENERGY ADJUSTMENT CLAUSE
The Rate Agreement includes a comprehensive fuel and purchased power
adjustment clause (FPPAC) permitting PSNH to pass through to retail
customers, for a ten-year period, the retail portion of differences between
the fuel and purchased power costs assumed in the Rate Agreement and PSNH's
actual costs, which include the costs under the Seabrook Power Contract. The
cost components of the FPPAC are subject to a prudence review by the NHPUC.
The costs associated with purchases from certain small-power producers (SPPs)
over the level assumed in the Rate Agreement are deferred and recovered over
ten-year periods through the FPPAC. At December 31, 1993, unrecovered SPP
deferrals are $107.6 million. A majority of these purchases are under
long-term arrangements (20-30 years) at prices significantly higher than the
company's current or projected avoided costs.
For additional information, see <F2> Note 2, "Seabrook Power Contract" and
Note 11, "Commitments and Contingencies - Purchased Power Arrangements."
<F2>
2. SEABROOK POWER CONTRACT
On June 5, 1992, NAEC and PSNH entered into the Seabrook Power Contract
(Contract), under which PSNH is obligated to buy from NAEC, and NAEC is
obligated to sell to PSNH, all of NAEC's 35.6 percent ownership share of the
capacity and output of Seabrook 1 for a period equal to the length of the
NRC's full power operating license for Seabrook 1. Accordingly, PSNH has
included its right to buy power from NAEC on its Balance Sheets as part of
utility plant with a corresponding obligation. At December 31, 1993, this
right was valued at approximately $852.2 million. Under the Contract, PSNH
is unconditionally
<PAGE>10
obligated to pay NAEC's cost of service during this period whether or not
Seabrook 1 is operating. NAEC's cost of service includes all of its
Seabrook-related costs, including operation and maintenance expense,
fuel expense, property tax expense, depreciation expense, and certain
overhead and other costs.
The Contract establishes the value of the initial investment in Seabrook
(Initial Investment) at $700 million and the initial investment in nuclear
fuel at $0. NAEC is depreciating its Initial Investment on a straight line
basis over the remaining term of Seabrook's full power operating license.
Any subsequent additions to Seabrook 1 will be depreciated on a straight-line
basis over the remaining term of the Contract at the time the additions are
brought into service. The Contract provides that NAEC's return on its
allowed investment in Seabrook 1 (its investment in working capital, fuel,
capital additions after the date of commercial operation of Seabrook 1 and a
portion of the Initial Investment) is calculated based on NAEC's actual
capitalization from time to time over the term of the Contract, which
includes its actual debt and preferred equity costs, and a common equity cost
of 12.53 percent for the first ten years of the Contract, and thereafter at
an equity rate of return to be fixed in a filing with FERC. The portion of
the Initial Investment which is included in the allowed investment was 40
percent at the Acquisition Date and will increase by 15 percent in each of
the following four years beginning May 15, 1993. Between the Reorganization
Date and the Acquisition Date, PSNH, recorded $50.9 million of deferred
return on its investment in Seabrook 1. In accordance with the Rate
Agreement, PSNH transferred the $50.9 million of deferred return balance to
NAEC along with the other Seabrook assets. NAEC has recorded the $50.9
million as part of utility plant. From the Acquisition Date through December
31, 1993, NAEC recorded an additional $85.4 million of deferred return. The
deferred return on the excluded portion of the Initial Investment, including
the $50.9 million, will be recovered with carrying charges by NAEC through
the Contract beginning six months after the end of PSNH's Fixed Rate Period
and will be fully recovered by May 15, 2001.
If Seabrook 1 is shut down prior to the expiration of the NRC operating
license term, PSNH will be unconditionally required to pay NAEC termination
costs for 39 years, less the period during which Seabrook 1 has operated.
These costs are designed to reimburse NAEC for its share of Seabrook 1
shut-down and decommissioning costs and to pay NAEC a return of and on any
undepreciated balance of its Initial Investment in the plant over the
then-remaining term of the Contract, and the return of and on any capital
additions to the plant made after the Acquisition Date over a period of five
years after shut down (net of any tax benefits to NAEC attributable to such
cancellation).
Contract payments charged to operating expense were $123 million, including
$33 million return on investment, for the year ended December 31, 1993.
On February 15, 1994, NAEC acquired Vermont Electric Generation and
Transmission Cooperative Inc.'s (VEG&T) 0.4 percent ownership interest of
Seabrook for approximately $6.4 million. NAEC will sell the output from the
Seabrook interest purchased from VEG&T on February 15, 1994 to PSNH under an
agreement that has been approved by the FERC and is substantially similar to
the Seabrook Power Contract between PSNH and NAEC that was effective on the
Acquisition Date.
<PAGE>11
Future minimum payments, excluding executory costs, such as property taxes,
state use taxes,insurance, and maintenance, under the terms of the Contract,
as of December 31, 1993, are approximately:
Seabrook Power Contract
-----------------------
(Thousands of Dollars)
1994 . . . . . . . . . . . . . . . $ 63,200
1995 . . . . . . . . . . . . . . . 72,300
1996 . . . . . . . . . . . . . . . 81,200
1997 . . . . . . . . . . . . . . . 91,100
1998 . . . . . . . . . . . . . . . 169,700
After 1998 . . . . . . . . . . . . 1,509,700
----------
Future minimum payments. . . . . . 1,987,200
Less amount representing interest and
return on equity . . . . . . . . 1,135,000
----------
Present value of Seabrook Power
Contract
payments . . . . . . . . . . . . . $ 852,200
==========
<F3>
3. LEASES
PSNH has entered into lease agreements, for the use of substation equipment,
data processing and office equipment, vehicles, and office space. The
provisions of these lease agreements generally provide for renewal options.
Operating lease rental payments charged to operating expense were $6,197,000
in 1993, $8,511,000 in 1992, and $6,875,000 in 1991.
Future minimum rental payments, excluding executory costs, such as property
taxes, state use taxes, insurance, and maintenance, under long-term
noncancelable leases, as of December 31, 1993, are approximately:
Operating Leases
----------------
(Thousands of Dollars)
1994 . . . . . . . . . . . . . . . . . . $ 7,700
1995 . . . . . . . . . . . . . . . . . . 7,100
1996 . . . . . . . . . . . . . . . . . . 6,100
1997 . . . . . . . . . . . . . . . . . . 5,200
1998 . . . . . . . . . . . . . . . . . . 4,100
After 1998 . . . . . . . . . . . . . . . 6,000
-------
Future minimum payments. . . . . . . . . $36,200
=======
<F4>
4. NUCLEAR DECOMMISSIONING
A 1992 decommissioning study concluded that complete and immediate
dismantlement at retirement continues to be the most viable and economic
method of decommissioning Millstone 3. A 1991 Seabrook decommissioning study
also confirmed that complete and immediate dismantlement at retirement is the
most viable and economic method of decommissioning Seabrook 1.
<PAGE>12
Decommissioning studies are reviewed and updated periodically to reflect
changes in decommissioning requirements, technology, and inflation.
The estimated cost of decommissioning PSNH's ownership share of Millstone 3
and NAEC's 36.0 percent share of Seabrook 1, in year-end 1993 dollars, is
$12.0 million and $131.7 million, respectively. PSNH's Millstone 3
decommissioning costs are accrued over the expected service life of the unit
and are included in depreciation expense on its Statements of Income.
Nuclear decommissioning related to PSNH's share of Millstone 3 amounted to
$0.3 million in 1993 and $0.2 million in 1992. Nuclear decommissioning
costs, as a cost of removal, are included in the accumulated provision for
depreciation on PSNH's Balance Sheets.
PSNH makes payments to an independent decommissioning trust for its portion
of the costs of decommissioning Millstone 3. Under the terms of the Rate
Agreement, PSNH is obligated to pay NAEC's share of Seabrook's
decommissioning costs, even if the unit is shut down prior to the expiration
of its operating license. Accordingly, NAEC bills PSNH directly for its
share of the costs of decommissioning Seabrook. PSNH records its Seabrook
decommissioning costs as a component of purchased power expense on its
Statement of Income. Under the Rate Agreement, PSNH's Seabrook
decommissioning costs are recovered through base rates.
As of December 31, 1993, PSNH has collected, through rates, approximately
$1.2 million toward the future decommissioning costs of its share of
Millstone 3, which has been transferred to the external decommissioning
trust. Earnings on the decommissioning trusts and financing fund increase
the decommissioning trust balance and the accumulated reserve for
decommissioning. At December 31, 1993, the balance in the company's
accumulated reserve for decommissioning amounted to $1.5 million.
As of December 31, 1993, NAEC (including pre-Acquisition Date payments made
by PSNH) has paid approximately $7.3 million, into Seabrook 1's
decommissioning financing fund.
Changes in requirements or technology, or adoption of a decommissioning
method other than immediate dismantlement, could change decommissioning cost
estimates. PSNH attempts to recover sufficient amounts through its allowed
rates to cover its expected decommissioning costs. Only the portion of
currently estimated total decommissioning costs that has been accepted by
regulatory agencies is reflected in rates of PSNH. Although allowances for
decommissioning have increased significantly in recent years, ratepayers in
future years will need to increase their payments to offset the effects of
any insufficient rate recoveries in previous years.
PSNH, along with other New England utilities, has equity investments in the
four Yankee companies. Each Yankee company owns a single nuclear generating
unit. The estimated costs, in year-end 1993 dollars, of decommissioning
PSNH's ownership share of CY and MY are $17.0 million and $16.2 million,
respectively. The cost to decommission VY is currently being re-estimated.
The cost of decommissioning PSNH's ownership share of VY is projected to
range from $12 million to $14 million. As discussed in the following
paragraph, YAEC's owners voted to permanently shut down the YAEC unit on
February 26, 1992. Under the terms of the contracts with the companies, the
shareholders-sponsors are responsible for their proportionate share of the
operating costs of each unit, including decommissioning. The nuclear
decommissioning costs of the Yankee companies are included as part of the
cost of power by PSNH.
<PAGE>13
YAEC has begun decommissioning its nuclear facility. On June 1, 1992, YAEC
filed a rate filing to obtain FERC authorization to collect the closing and
decommissioning costs and to recover the remaining investment in the YAEC
nuclear power plant over the remaining period of the plant's NRC operating
license. The bulk of these costs has been agreed to by the YAEC joint owners
and approved, as a settlement, by FERC. At December 31, 1993, the estimated
remaining costs amounted to $345.0 million, of which PSNH's share was
approximately $24.1 million. Management expects that PSNH will continue
to be allowed to recover such FERC-approved costs from its customers.
Accordingly, PSNH has recognized these costs as a regulatory asset, with a
corresponding obligation, on its Balance Sheets. PSNH has a 7.0 percent
equity investment, approximating $1.7 million, in YAEC. PSNH had relied on
YAEC for less than one percent of its capacity.
<F5>
5. SHORT-TERM DEBT
The system companies have various credit lines totaling $485 million. PSNH
has credit lines totaling $125 million available through a revolving-credit
agreement with a group of 22 banks. PSNH may borrow funds on a short-term
revolving basis using either fixed-rate or standby-loans. Fixed rates are
set using competitive bidding. Standby-loan rates are based upon several
alternative variable rates. PSNH is obligated to pay a facility fee of 0.25
percent per annum on the total commitment. At December 31, 1993, there were
no borrowings under the agreement. The company intends to negotiate a two
year extension of the $125 million revolving credit agreement, which is
scheduled to mature on May 14, 1994.
Certain subsidiaries of NU, including PSNH, are members of the Northeast
Utilities System Money Pool (Pool). The Pool provides a more efficient use
of the cash resources of the system, and reduces outside short-term
borrowings. NUSCO administers the Pool as agent for the member companies.
Short-term borrowing needs of the member companies are first met with
available funds of other member companies, including funds borrowed by NU
parent. NU parent may lend to the Pool but may not borrow. Investing and
borrowing subsidiaries receive or pay interest based on the average daily
Federal Funds rate. Funds may be withdrawn from or repaid to the Pool at any
time without prior notice. However, borrowings based on loans from NU parent
bear interest at NU parent's cost and must be repaid based upon the terms of
NU parent's original borrowing.
Maturities of PSNH's short-term debt obligations were for periods of three
months or less.
The amount of short-term borrowings that may be incurred by PSNH is subject
to periodic approval by the SEC under the 1935 Act. Under the SEC
restrictions, PSNH was authorized, as of January 1, 1993, to incur short-term
borrowings up to a maximum of $125 million.
<PAGE>14
<F6>
6. PREFERRED STOCK SUBJECT TO MANDATORY REDEMPTION
Details of preferred stock subject to mandatory redemption are:
December 31, Shares
1993 Outstanding
Redemption December 31, December 31,
Description Price 1993 1993 1992
- -----------------------------------------------------------------------------
(Thousands of Dollars)
10.60% Series A
of 1991. . . . . $25.00 5,000,000 $125,000 $125,000
======== ========
In case of default on dividends or sinking-fund payments, no payments may be
made on any junior stock by way of dividends or otherwise (other than in shares
of junior stock) so long as the default continues. If PSNH is in arrears in the
payment of dividends on any outstanding shares of preferred stock, PSNH would
be prohibited from redemption or purchase of less than all of the preferred
stock outstanding. The Series A Preferred Stock is not subject to optional
redemption by PSNH. It is subject to a sinking fund beginning on June 30, 1997,
sufficient to retire annually 1,000,000 shares at $25 per share.
<F7>
7. LONG-TERM DEBT
Details of long-term debt outstanding are:
- -----------------------------------------------------------------------------
December 31,
-------------------------
1993 1992
- -----------------------------------------------------------------------------
(Thousands of Dollars)
First Mortgage Bonds:
8 7/8% Series A due 1996. . . . . . . . . $172,500 $ 172,500
9.17% Series B due 1998. . . . . . . . . 170,000 170,000
-------- ----------
Total First Mortgage Bonds. . . . . . . . . . . 342,500 342,500
Term Loan/Notes:
Variable Rate due 1996. . . . . . . . . . . . . 235,000 329,000
Pollution Control Revenue Bonds:
7.65% Series A due 2021. . . . . . . . . 66,000 66,000
7.50% Series B due 2021. . . . . . . . . 108,985 108,985
7.65% Series C due 2021. . . . . . . . . 112,500 112,500
Adjustable Rate Series D due 2021 . . . . . . . 39,500 39,500
Adjustable Rate Series E due 2021 . . . . . . . 69,700 114,500
Adjustable Rate, Tax-Exempt, Series D due 2021. 75,000 75,000
Adjustable Rate,Tax-Exempt, Series E due 2021 . 44,800 -
Less: Amounts due within one year. . . . . . . 94,000 94,000
-------- ----------
Long-term debt, net . . . . . . . . . . . . . . $999,985 $1,093,985
======== ==========
<PAGE>15
Long-term debt maturities and cash sinking-fund requirements on debt
outstanding at December 31, 1993 for the years 1994 through 1998 are
approximately $94,000,000 in 1994 and 1995, $219,500,000 in 1996, $0 in 1997,
and $170,000,000 in 1998. Also, there are annual renewal and replacement
fund requirements equal to 2.25 percent of the average of net depreciable
property owned by PSNH at the Reorganization Date, plus cumulative gross
property additions thereafter. PSNH expects to meet its future fund
requirements by certifying property additions. Any deficiency would need to
be satisfied the deposit of cash or bonds.
Essentially, all utility plant of PSNH is subject to the liens of its first
mortgage bond indenture. PSNH's two bank facilities, the Term Loan and
Revolving Credit Facility have a second lien, junior to the lien of
its first mortgage bond indenture, on all PSNH property located in New
Hampshire. At December 31, 1993, the principal amount outstanding under the
Term Loan was $235 million. At December 31, 1993, there were no borrowings
under the Revolving Credit Facility.
The Series A and B First Mortgage Bonds are not redeemable prior to their
maturity except in limited circumstances. The Pollution Control Revenue
Bonds, except for Series D and E, are redeemable on or after May 1, 2001, at
the option of the company with accrued interest and at specified premiums.
Under current interest rate elections by PSNH, the Series D and E Pollution
Control Revenue Bonds are redeemable, at par plus accrued interest at the end
of each interest rate period. Future interest rate elections by PSNH could
significantly defer or eliminate the availability of optional redemptions by
PSNH and could affect costs as well.
PSNH has entered into interest rate cap agreements to reduce the potential
impact of upward changes in interest rates on certain variable rate tax
exempt pollution control revenue bonds and on a portion of its variable rate
Term Loan. At December 31, 1993, $50 million and $100 million of PSNH's
$235 million Term Loan was capped at 4.5 percent and 5 percent, respectively.
$75 million of its taxable Pollution Control Revenue Bonds was capped at 4.5
percent. The total cost of interest rate caps for 1993 was approximately
$836,000, the costs of which are amortized over the terms of the contracts,
which are from one to three years. The fair market value of outstanding
interest rate cap contracts as of December 31, 1993 is approximately
$158,000.
Concurrent with the issuance of PSNH's Series A and B First Mortgage Bonds,
PSNH entered into financing arrangements with the Industrial Development
Authority of the state of New Hampshire (IDA). Pursuant to these
arrangements, the IDA issued five series of Pollution Control Revenue Bonds
(PCRBs) and loaned the proceeds to PSNH. At December 31, 1993, $516.5
million of the PCRBs were outstanding. PSNH's obligation to repay each
series of PCRBs is secured by a series of First Mortgage Bonds that were
issued under its indenture. Each such series of First Mortgage Bonds
contains terms and provisions with respect to maturity, principal payment,
interest rate and redemption that correspond to those of the applicable
series of PCRBs; for financial reporting purposes, these bonds would not be
considered outstanding unless PSNH fails to meet its obligation under the
PCRBs.
<PAGE>16
<F8>
8. INCOME TAX EXPENSE
The components of federal and state income tax provisions are:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
- ---------------------
Jan. 1, 1993 June 5, 1992 Jan. 1, 1992 May 16,
1991 Jan. 1, 1991
to to to to
to
For the Periods Dec. 31, 1993 Dec. 31, 1992 June 4, 1992 Dec. 31,
1991 May 15, 1991
- -----------------------------------------------------------------------------
- ---------------------
<F1>(Note 1) (Thousands of Dollars)
<S> <C> <C> <C> <C>
<C>
Current income taxes:
Federal . . . . . . . . . $ (937) $ 2,400 $ 415 $ -
$ -
State . . . . . . . . . . 1,183 - 79
60 20
-------- -------- ---------
- -------- ---------
Total current. . . . . 246 2,400 494
60 20
-------- -------- ---------
- -------- ---------
Deferred income taxes, net:
Federal . . . . . . . . . 47,407 23,086 8,703 25,342
111
State . . . . . . . . . . 3,131 - - -
-
-------- -------- ---------
- -------- ---------
Total deferred . . . . 50,538 23,086 8,703 25,342
111
-------- -------- ---------
- -------- ---------
Investment tax credits, net (565) (326) (341)
(498) (294)
-------- -------- ---------
- -------- ---------
Total income tax expense $50,219 $25,160 $ 8,856
$24,904 $ (163)
======== ======== =========
======== =========
The components of total income tax expense are classified as follows:
Income taxes charged to
operating expenses . . $73,263 $39,197 $16,449
$38,316 $(12,769)
Income taxes associated
with the deferred return
on Seabrook . . . . . . . - - 4,793
7,155 -
Income taxes associated
with allowance for funds used
during construction (AFUDC)
and the deferred return on
New Hampshire Electric
Cooperative (NHEC)
deferred costs. . . . . . - 217 428
98 111
Other income taxes - credit (23,044) (14,254) (12,814)
(20,665) 12,495
--------- -------- --------
- -------- ---------
Total income tax expense $50,219 $25,160 $ 8,856
$24,904 $ (163)
========= ======== ========
======= =========
</TABLE>
<PAGE>17
<TABLE>
Deferred income taxes are comprised of the tax effects of temporary differences
as follows:
<CAPTION>
- -----------------------------------------------------------------------------
- ------------------------
Jan. 1, 1993 June 5, 1992 Jan. 1, 1992 May 16,
1991 Jan. 1, 1991
to to to
to to
For the Periods Dec. 31, 1993 Dec. 31, 1992 June 4, 1992 Dec.
31, 1991 May 15, 1991
- -----------------------------------------------------------------------------
- ------------------------
<F1>(Note 1) (Thousands of Dollars)
<S> <C> <C> <C> <C>
<C>
Depreciation . . . . . . . .$ 4,549 $ 1,629 $12,333
$21,450 $17,289
Energy adjustment clauses. . 15,155 14,520 (1,359)
14,476 4,628
Deferred tax asset
associated with NOL. . . . 25,438 9,335 (2,317)
(17,149) (81,002)
Alternative minimum tax. . . 1,056 (2,441) (394)
- - -
Amortization of prepaid
deferred taxes . . . . . . 7,667 - -
- - -
Seabrook unsecured interest. - - -
- - 52,058
Deferred return on Seabrook. - - 4,793
7,155 -
Severance benefits . . . . . - 254 (1,020)
- - -
Other . . . .. . . . . . . . (3,327) (211) (3,333)
(590) 7,138
-------- -------- ---------
- -------- ---------
Deferred income taxes, net $50,538 $23,086 $ 8,703
$25,342 $ 111
======== ======== =========
======== =========
</TABLE>
<TABLE>
A reconciliation between income tax expense and the expected tax expense at the
applicable statutory
rates is as follows:
<CAPTION>
- -----------------------------------------------------------------------------
- ----------------------------
Jan. 1, 1993 June 5, 1992 Jan. 1, 1992 May
16, 1991 Jan. 1, 1991
to to to
to to
For the Periods Dec. 31, 1993 Dec. 31, 1992 June 4, 1992 Dec.
31, 1991 May 15, 1991
- -----------------------------------------------------------------------------
- ----------------------------
<F1>(Note 1) (Thousands of Dollars)
<S> <C> <C> <C> <C>
<C>
Expected
federal income
tax at 35 percent pretax
income for 1993 and 34
percent for 1992 and 1991. .$35,860 $18,550 $ 7,356
$26,383 $ (34,324)
Tax effect of differences:
Depreciation differences . 1,593 1,032 (8,314)
(12,455) 1,524
Amortization of Regulatory
Asset - Rate Agreement . . 23,765 17,624 12,477
18,294 -
Seabrook intercompany loss . (19,176) (11,903) -
- - -
Reorganization expenses. . . - 22 1,728
795 5,179
Deferred investment return . - - (3,832)
(5,231) -
Unused book NOL. . . . . . . - - -
- - 22,058
State tax, net of federal
benefit . . . . . . . . . 2,804 - -
- - -
Amortization of prepaid
deferred taxes . . . . . . 7,667 - -
- - -
Other, net . . . . . . . . . (2,294) (165) (559)
(2,882) 5,400
-------- -------- --------
- -------- -----------
Total income tax expense . . $50,219 $25,160 $ 8,856
$24,904 $ (163)
======== ======== ========
======== ===========
</TABLE>
<PAGE>18
<F9>
9. PENSION BENEFITS
The company participates in a uniform noncontributory defined benefit
retirement plan covering all regular system employees (the Plan). Benefits
are based on years of service and employees' highest eligible compensation
during five consecutive years of employment. Effective January 1993, PSNH's
plan was merged into the NU system's uniform noncontributory defined benefit
plan. The company's direct allocated portion of the system's pension cost,
part of which was charged to utility plant, approximated $6,626,000 in 1993,
$4,422,000 for the period January 1, 1992 to June 4, 1992 and $3,467,000 for
the period June 5, 1992 to December 31, 1992 and $13,220,000 in 1991. The
pension cost for June 5, 1992 to December 31, 1992 excludes employees of NHY,
who are now employees of NAESCO. Pension costs for 1993 included
approximately $3,359,000 related to work force reduction programs.
Currently, PSNH funds annually an amount at least equal to that which will
satisfy the requirements of the Employee Retirement Income Security Act and
the Internal Revenue Code. Pension costs are determined using market-related
values of pension assets. Pension assets are invested primarily in
domestic and international equity securities and bonds.
<TABLE>
The components of net pension cost for PSNH are:
<CAPTION>
- -----------------------------------------------------------------------------
- ----------
Jan. 1, 1993 June 5, 1992 Jan. 1, 1992 Jan.
1, 1991
to to to to
For the Periods Dec. 31, 1993 Dec. 31, 1992 June 4, 1992 Dec.
31, 1991
- -----------------------------------------------------------------------------
- ----------
(Thousands of Dollars)
<S> <C> <C> <C> <C>
Service cost . . . . . . $ 7,539 $ 2,889 $ 3,850 $
8,382
Interest cost. . . . . . 11,180 6,810 6,200
12,771
Return on plan assets. . (19,308) (5,026) (4,561)
(45,157)
Net amortization . . . . 7,215 (1,206) (1,067)
37,224
-------- -------- --------
- --------
Net pension cost . . . . $ 6,626 $ 3,467 $ 4,422
$13,220
======== ======== ========
========
</TABLE>
For calculating pension cost, the following assumptions were used:
- -------------------------------------------------------------------------------
Jan. 1, 1993 June 5, 1992 Jan. 1, 1992 Jan. 1, 1991
to to to to
For the Periods Dec. 31, 1993 Dec. 31, 1992 June 4, 1992 Dec. 31, 1991
- --------------------------------------------------------------------------------
Discount rate. . . . . 8.00% 8.00% 8.00% 8.00%
Expected long-term
rate of return . . . 8.50 9.00 9.00 8.50
Compensation/
progression rate . . . 5.00 6.00 6.00 6.00
- --------------------------------------------------------------------------------
<PAGE>19
The following table represents the Plan's funded status reconciled to the
Balance Sheets:
- -----------------------------------------------------------------------
At December 31, 1993 1992
- -----------------------------------------------------------------------
(Thousands of Dollars)
Accumulated benefit obligation,
including $111,691,000 of vested
benefits at December 31, 1993 and
$112,507,000 of vested benefits at
December 31, 1992 . . . . . . . . . . $122,429 $113,485
======== ========
Projected benefit obligation (PBO). . $156,475 $175,891
Less: Market value of plan assets. . 145,536 166,456
--------- ---------
PBO in excess of plan assets. . . . . (10,939) (9,435)
Unrecognized transition amount. . . . 5,338 6,741
Unrecognized prior service costs. . . 4,890 4,870
Unrecognized net gain . . . . . . . . (31,179) (32,859)
--------- ---------
Accrued pension liability . . . . . . $(31,890) $(30,683)
========= =========
The following actuarial assumptions were used in calculating the Plan's
year-end funded status:
- -----------------------------------------------------------------------
At December 31, 1993 1992
- -----------------------------------------------------------------------
Discount rate . . . . . . . . . . . . 7.75% 8.00%
Compensation/progression rate . . . . 4.75 5.00
The discount rate for 1993 was determined by analyzing the interest rates, as
of December 31, 1993, of long-term, high quality corporate debt securities
having a duration comparable to a 13.8-year duration of the plan.
During 1993, NU's work force was reduced by approximately 7 percent through a
work force reduction program that involved a voluntary early retirement program
and involuntary terminations. PSNH's direct cost of the program, which
approximated $4.9 million, included pension, severance, and other
benefits.
<F10>
10. POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
The company provides certain health care benefits, primarily medical and
dental, and life insurance benefits through a benefit plan to retired
employees. These benefits are available for employees leaving the company
who are otherwise eligible to retire and have met specified service
requirements. Through December 31, 1992, the company recognized the cost of
these benefits as they were paid. In December 1990, the FASB issued SFAS
106. This new standard requires that the expected cost of postretirement
benefits, primarily health and life insurance benefits, must be charged to
expense during the years that eligible employees render service. Effective
January 1, 1993, the company adopted SFAS 106 on a prospective basis. Total
health care and life insurance costs, part of which was deferred or charged
to utility plant, approximated $9,106,000 in 1993, $3,290,000 in 1992, and
$2,783,000 in 1991.
<PAGE>20
On January 1, 1993, the accumulated postretirement benefit obligation (APBO)
represented the company's prior-service obligation upon the adoption of SFAS
106. As allowed by SFAS 106, the company is amortizing its APBO of
approximately $63 million over a 20-year period. For current employees and
certain retirees, the total SFAS 106 benefit is limited to two times the 1993
health care costs. The SFAS 106 obligation has been calculated based on this
assumption.
During 1993, the company began funding SFAS 106 postretirement costs through
external trusts. The company is funding annually amounts that have been rate
recovered and which also are tax-deductible under the Internal Revenue Code.
The trust assets are invested primarily in equity securities and bonds.
The following table represents the plan's funded status reconciled to the
Balance Sheet at December 31, 1993:
(Thousands of Dollars)
Accumulated postretirement benefit obligation of:
Retirees . . . . . . . . . . . . . . . . . . . . . . . $(51,832)
Fully eligible active employees. . . . . . . . . . . . (99)
Active employees not eligible to retire . . . . . . . (7,888)
---------
Total accumulated postretirement benefit obligation. . (59,819)
Less: Market value of plan assets . . . . . . . . . . 2,387
---------
Accumulated postretirement benefit
obligation in excess of plan assets . . . . . . . . . . (57,432)
Unrecognized transition amount. . . . . . . . . . . . . 55,870
Unrecognized net gain . . . . . . . . . . . . . . . . . (1,065)
---------
Accrued postretirement benefit liability. . . . . . . . $ (2,627)
=========
The components of health care and life insurance costs for the year ended
December 31, 1993 are:
- -------------------------------------------------------------------------
(Thousands of Dollars)
Service cost . . . . . . . . . . . . . . $1,260
Interest cost. . . . . . . . . . . . . . 4,800
Net amortization . . . . . . . . . . . . 3,046
------
Net health care and life insurance costs $9,106
======
- -------------------------------------------------------------------------
<PAGE>21
For measurement purposes, an 11.1-percent annual rate of increase in the per
capita cost of covered health care benefits was assumed for 1993; the rate
was assumed to decrease to 5.4 percent for 2002. The effect of increasing
the assumed health care cost trend rates by one percentage point in each year
would increase the accumulated postretirement benefit obligation as of
December 31, 1993 by $5.1 million and the aggregate of the service and
interest cost components of net periodic postretirement benefit cost for the
year then ended by $476,000.
The weighted-average discount rate used in determining the accumulated
postretirement benefit obligation was 7.75 percent. The discount rate for
1993 was determined by analyzing the interest rates, as of December 31, 1993,
of long-term, high-quality corporate debt securities having a duration
comparable to that of the plan. The trust holding the plan assets is subject
to federal income taxes at a 35 percent tax rate. The expected long-term
rate of return on plan assets after estimated taxes was 5.00 percent for
health assets and 8.50 percent for life assets.
PSNH is currently recovering SFAS 106 costs.
<F11>
11. COMMITMENTS AND CONTINGENCIES
CONSTRUCTION PROGRAM
The construction program is subject to periodic review and revision. Actual
construction expenditures may vary from estimates due to factors such as
revised load estimates, inflation, revised nuclear safety regulations,
delays, difficulties in the licensing process, the availability and cost of
capital, and the granting of timely and adequate rate relief by regulatory
commissions, as well as actions by other regulatory bodies.
PSNH currently forecasts construction expenditures (including AFUDC) of $172.5
million for the years 1994-1998, including $37.5 million for 1994. In addition,
PSNH estimates that nuclear fuel requirements, for its share of Millstone 3,
will be $5.7 million for the years 1994-1998, including $1.7 million for 1994.
PSNH RATE AGREEMENT
The Rate Agreement provided the financial basis for the Plan. The Rate
Agreement calls for seven successive 5.5 percent annual increases in PSNH's
base rates for its charges to retail customers (the Fixed-Rate Period). The
first four increases were put into effect on January 1, 1990, May 16, 1991,
June 1, 1992 and June 1, 1993, respectively. The remaining three increases
are scheduled to be put into effect annually beginning on June 1, 1994.
PSNH's base rates, as adjusted to reflect the 5.5 percent annual increases,
are intended to recover assumed increases in PSNH's costs and to provide
PSNH with a reasonable cumulative return on investment over the Fixed-Rate
Period. As discussed in <F1>Note 1, "Summary of Significant Accounting
Policies-Energy Adjustment Clause," the FPPAC protects PSNH form changes in
fuel and purchased power costs. Although the Rate Agreement provides an
unusually high degree of certainty as to PSNH's future retail rates, it also
entails a risk when sales are lower than anticipated or if PSNH should
experience unexpected increases in its costs other than those for fuel and
purchased power, since PSNH has agreed that it will not seek additional rate
relief during the Fixed-Rate Period, except in limited circumstances.
However, in order to provide protection from significant variations from the
costs assumed in base rates over the Fixed-Rate Period, the Rate Agreement
establishes a return on equity (ROE) collar to prevent PSNH from earning a
ROE in excess of an upper limit or below a lower limit. To date, PSNH's ROE
has been within the limits of the ROE collar.
<PAGE>22
In January 1994, the NHPUC approved a Memorandum of Understanding (the
Memorandum) between PSNH, NAEC, Northeast Utilities Service Company, and the
Attorney General of the state of New Hampshire relating to certain issues
which had arisen under the Rate Agreement. The Memorandum addressed, among
other things, the tax legislation in New Hampshire, accounting treatments
resulting from adoption of SFAS 106 and SFAS 109, and recovery for certain
aspects of PSNH's settlement with the VEG&T, including the purchase by NAEC
of VEG&T's 0.4 percent share of Seabrook. The Memorandum provides for the
establishment of a regulatory liability attributable to significant NOL
carryforwards and establishes that such liability should be amortized over a
six-year period beginning on May 1, 1993.
ENVIRONMENTAL MATTERS
PSNH is subject to regulation by federal, state, and local authorities with
respect to air and water quality, handling and the disposal of toxic
substances and hazardous and solid wastes, and the handling and use of
chemical products. PSNH has an active environmental auditing program to
prevent, detect, and remedy noncompliance with environmental laws or
regulations and believes that it is in substantial compliance with current
environmental laws and regulations. Changing environmental requirements
could hinder the construction of new fossil-fuel generating units,
transmission and distribution lines, substations, and other facilities. The
cumulative long-term, economic cost impact of increasingly stringent
environmental requirements cannot be estimated. Changing environmental
requirements could also require extensive and costly modifications to PSNH's
existing hydro, nuclear, and fossil-fuel generating units, and transmission
and distribution systems, and could raise operating costs significantly. As
a result, PSNH may incur significant additional environmental costs, greater
than amounts included in cost of removal and other reserves, in connection
with the generation and transmission of electricity and the storage,
transportation, and disposal of by-products and waste. PSNH may also
encounter significantly increased costs to remedy the environmental effects
of prior waste handling and disposal activities.
In most cases, the extent of additional future environmental cleanup costs is
not reasonably estimable due to factors such as the unknown magnitude of
possible contamination, the appropriate remediation method, the possible
effects of future legislation and regulation, the possible effects of
technological changes related to future cleanup, and the difficulty of
determining future liability, if any, for the cleanup of sites at which PSNH
may be determined to be legally liable by federal or state environmental
agencies. In addition, PSNH cannot estimate the potential liability for
future claims that may be brought against it by private parties. However,
considering known facts and existing laws and regulatory practices,
management does not believe that such matters will have a material adverse
effect on PSNH's financial position or future results of operations.
NUCLEAR INSURANCE CONTINGENCIES
The Price-Anderson Act currently limits public liability from a single
incident at a nuclear power plant to $9.4 billion. The first $200 million of
liability would be provided by purchasing the maximum amount of commercially
available insurance. Additional coverage of up to a total of $8.8 billion
would be provided by an assessment of $75.5 million per incident, levied on
each of the 116 nuclear units that are currently subject to the Secondary
Financial Protection Program in the United States, subject to a maximum
assessment of $10 million per incident per nuclear unit in any year. In
addition, if the sum of all public liability claims and legal costs arising
from any nuclear incident exceeds the maximum amount of financial protection,
each reactor operator can be assessed an additional 5 percent, up to $3.8
million, or $437.9 million in total, for all 116 nuclear units. The
maximum assessment is to be adjusted at least every five years to reflect
inflationary changes. Under the terms of the Contract with NAEC, PSNH would
<PAGE>23
be obligated to pay for any assessment charged to NAEC as a "cost of
service." At December 31, 1993, based on PSNH's ownership interests in
Millstone 3, and NAEC's ownership interests in Seabrook 1, PSNH's maximum
liability would be $30.4 million per incident. In addition, through PSNH's
purchased power contracts with the four Yankee regional nuclear generating
companies, PSNH would be responsible for up to an additional $16.7 million
per incident. These payments for PSNH's ownership interest in nuclear
generating facilities and costs resulting from the Contract with NAEC would
be limited to a maximum of $5.9 million per incident per year.
Insurance has been purchased from Nuclear Electric Insurance Limited (NEIL)
to cover (1) certain extra costs incurred in obtaining replacement power
during prolonged accidental outages with respect to PSNH's Contract with
NAEC; and (2) the cost of repair, replacement, or decontamination or
premature decommissioning of utility property resulting from insured
occurrences with respect to PSNH's ownership interests in Millstone 3, CY,
MY, and VY; and NAEC's ownership interest in Seabrook. All companies insured
with NEIL are subject to retroactive assessments if losses exceed the
accumulated funds available to NEIL. The maximum potential assessments
against PSNH (including costs resulting from PSNH's Contract with NAEC) with
respect to losses arising during current policy years are approximately $1.9
million under the replacement power policies and $1.9 million under the
property damage, decontamination, and decommissioning policies. Although
PSNH has purchased the limits of coverage currently available from the
conventional nuclear insurance pools, the cost of a nuclear incident could
exceed available insurance proceeds.
Insurance has been purchased from American Nuclear Insurers/Mutual Atomic
Energy Liability Underwriters, aggregating $200 million on an industry basis
for coverage of worker claims. All companies insured under this coverage are
subject to retrospective assessments of $3.2 million per reactor. The
maximum potential assessments against PSNH (including costs resulting from
PSNH's Contract with NAEC) with respect to losses arising during the current
policy period are approximately $1.9 million.
FINANCING ARRANGEMENTS FOR THE REGIONAL NUCLEAR GENERATING COMPANIES
PSNH believes that the regional nuclear generating companies may require
additional external financing in the next several years for construction
expenditures, nuclear fuel, possible refinancings, and other purposes.
Although the ways in which each regional nuclear generating company will
attempt to finance these expenditures have not been determined, PSNH may be
asked to direct or indirect financial support for one or more of these
companies.
PURCHASED POWER ARRANGEMENTS
PSNH purchases a portion of its electricity requirements pursuant to
long-term contracts with the Yankee companies. Under the terms of its
agreements, the company pays its ownership share (or entitlement share) of
generating costs, which include depreciation, operation and maintenance
expenses, the estimated cost of decommissioning, and a return on invested
capital. These costs are recorded as purchased power expense and recovered
through the company's rates. The total cost of purchases under these
contracts for the units that are operating amounted to $26.5 million in 1993,
$24.8 million in 1992, and $23.9 million in 1991. See <F1>Note 1, "Summary
Of Significant Accounting Policies-Investments and Jointly Owned Electric
Utility Plant" and <F4>Note 4, "Nuclear Decommissioning" for more information
on the Yankee companies.
PSNH has entered into various arrangements for the purchase of capacity and
energy from nonutility generators. Some of these arrangements generally have
terms from 20 to 30 years, and require the
<PAGE>24
company to purchase the energy at specified prices or formula rates. For the
12 months ended December 31, 1993, 14 percent of NU system load requirements
was met by cogenerators and small power producers. The total cost of the
company's purchases under these arrangements amounted to $133.4 million in
1993, $92.1 million in 1992, and $105.7 million in 1991. These costs are
eventually recovered through the company's rates.
In an effort to control cost and price increases from nonutility generators,
PSNH is in the process of attempting to renegotiate new rate orders with 13
nonutility generators. Settlement agreements have been reached with certain
nonutility generators and have been filed with the NHPUC for approval.
Negotiations continue with the remaining nonutility generators.
PSNH entered into a buy-back agreement to purchase the capacity and energy of
the New Hampshire Electric Cooperative, Inc. (NHEC) and to pay all of NHEC's
Seabrook costs for a ten-year period which began July 1, 1990. The total
cost of purchases under this agreement was $14.4 million in 1993, $13.8
million in 1992, and $11.6 million in 1991. Part of these costs is collected
currently through the FPPAC and part is deferred for future collection in
accordance with the Rate Agreement. In connection with the agreement, NHEC
agreed to continue as a firm-requirements customer of PSNH for 15 years.
The estimated annual cost of PSNH's significant purchased power arrangements
is provided below:
- ----------------------------------------------------------------------------
1994 1995 1996 1997 1998
---- ---- ---- ---- ----
(Millions of Dollars)
Yankee companies. . $ 26.5 $ 29.7 $ 32.2 $ 29.4 $ 34.0
Nonutility
generators. . . . 142.7 145.4 148.9 152.5 156.1
NHEC. . . . . . . . 14.6 15.2 16.2 24.4 32.4
- ----------------------------------------------------------------------------
HYDRO-QUEBEC
Along with other New England utilities, PSNH entered into agreements to
support transmission and terminal facilities to import electricity from the
Hydro-Quebec system in Canada. PSNH is obligated to pay, over a 30-year
period, its proportionate share of the annual operation, maintenance, and
capital costs of these facilities, which are currently forecast to be $53.8
million for the years 1994-1998, including $11.6 million for 1994.
PROPERTY TAXES
PSNH and CY have significant court appeals pending for property tax
assessments in the towns of Bow, New Hampshire, and Haddam, Connecticut,
respectively, concerning production plant. In each case, the central issue
is the fair market value of utility property. The company believes that
properly derived assessments that recognize the effect of rate regulation
will result in fair market values that approximate net book cost. This is
the assessment level that taxing authorities are predominantly using
throughout Connecticut, Massachusetts, and some of New Hampshire. However,
towns such as Bow and Haddam advocate a method that approximates reproduction
cost. The company estimates that, for the assessments in the towns where the
appeals are pending, the change to a reproduction cost methodology could
result in property tax valuations approximately three times greater than
values approximating net book cost. Although PSNH and CY are currently
paying property taxes based on the
<PAGE>25
higher assessments, to date, the higher assessments have not had a material
adverse effect on CY or the company.
The company believes that assessment levels that approximate net book cost
accurately reflect the fair market value of regulated utility property.
However, because of uncertainties associated with the court appeals and the
potential impact of adverse court decisions on property tax assessment policy
in New Hampshire and Connecticut, the company cannot estimate the potential
effects of adverse court decisions on future results of operations or
financial condition. However, the company believes that, based upon past
regulatory practices, it would be allowed to recover any increased property
tax assessments prospectively beginning at the time new rates are
established.
DEFERRED RECEIVABLE FROM AFFILIATED COMPANY
At the time PSNH emerged from bankruptcy on May 16, 1991, in accordance with
the phase-in under the Rate Agreement, it began accruing a deferred return on
a portion of its Seabrook investment. From May 16, 1991 to the Acquisition
Date, PSNH accrued a deferred return of $50.9 million. On the Acquisition
Date, PSNH sold the $50.9 million deferred return to NAEC as part of the
Seabrook-related assets.
At the time PSNH transferred the deferred return to NAEC, it realized, for
income tax purposes, a gain that is deferred under the consolidated income
tax rules. This gain will be restored for income tax purposes when the
deferred return of $50.9 million, and the associated income taxes of $32.9
million, are collected by NAEC through the Contract. When NAEC recovers the
$32.9 million in years eight through ten of the Rate Agreement, it is
obligated to make corresponding payments to PSNH.
On the Acquisition Date, PSNH recorded the $32.9 million of income taxes
associated with the deferred return as a deferred receivable from NAEC, with
a corresponding entry to deferred revenue, on its Balance Sheet. In 1993,
due to changes in tax rates, this amount was adjusted to $33.3 million.
<F12>
12. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used to estimate the fair value of
each of the following financial instruments:
Cash, special deposits and nuclear decommissioning trusts: The carrying
amounts approximate fair value.
Preferred stock and long-term debt: The fair value of PSNH's securities is
based upon the quoted market price for those issues or similar issues.
Adjustable rate securities are assumed to have a fair value equal to their
carrying value.
<PAGE>26
The carrying amounts of PSNH's financial instruments and the estimated fair
values are as follows:
- ----------------------------------------------------------------------------
At December 31, 1993 Carrying Amount Fair Value
- ----------------------------------------------------------------------------
(Thousands of Dollars)
Preferred stock subject to
mandatory redemption . . . . . . $125,000 $139,375
Long-term debt -
First Mortgage Bonds . . . . . . 342,500 359,878
Other long-term debt . . . . . . 751,485 783,389
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
At December 31, 1992 Carrying Amount Fair Value
- ----------------------------------------------------------------------------
(Thousands of Dollars)
Preferred stock subject to
mandatory redemption . . . . . . $125,000 $140,625
Long-term debt -
First Mortgage Bonds. . . . . . . 342,500 385,747
Other long-term debt. . . . . . . 845,485 861,297
- ----------------------------------------------------------------------------
The fair values shown above have been reported to meet disclosure
requirements and do not purport to represent the amounts that those
obligations would be settled at.
In May 1993, the FASB issued Statement of Financial Accounting Standards No.
115, "Accounting for Certain Investments in Debt and Equity Securities (SFAS
115)." SFAS 115 requires companies to disclose the classification of
investments in debt or equity securities based on management's intent
and ability to hold the security. SFAS 115 also requires disclosure of the
aggregate fair value, gross unrealized holding gains, gross unrealized
holding losses and amortized cost basis by major security type. Effective
January 1, 1994, PSNH will adopt SFAS 115 on a prospective basis. PSNH
anticipates that the adoption of SFAS 115 will not have a material impact on
future results of operations or financial position.
<PAGE>27
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors
of Public Service Company of New Hampshire:
We have audited the accompanying balance sheets of Public Service Company of
New Hampshire (a New Hampshire corporation and a wholly owned subsidiary of
Northeast Utilities) as of December 31, 1993 and 1992, and the related
statements of income, common equity and cash flows for the year ended
December 31, 1993 and the periods from January 1, 1992 to June 4, 1992 and
June 5, 1992 to December 31, 1992. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Public Service Company of
New Hampshire as of December 31, 1993 and 1992, and the results of its
operations and cash flows for the year ended December 31, 1993 and the
periods from January 1, 1992 to June 4, 1992 and June 5, 1992 to December 31,
1992, in conformity with generally accepted accounting principles.
As discussed in <F1>Note 1 to the financial statements, "Summary of
Significant Accounting Policies - Accounting Changes," effective January 1,
1993, Public Service Company of New Hampshire changed its methods of
accounting for income taxes and postretirement benefits other than pensions.
/S/ ARTHUR ANDERSEN & CO.
ARTHUR ANDERSEN & CO.
Hartford, Connecticut
February 18, 1994
<PAGE>28
INDEPENDENT AUDITOR'S REPORT
The Board of Directors
Public Service Company of New Hampshire
We have audited the balance sheet and statement of capitalization of Public
Service Company of New Hampshire as of December 31, 1991 (not presented
herein), and the related statements of income, cash flows and common stock
equity for the periods January 1, 1991 to May 15, 1991, and May 16, 1991 to
December 31, 1991. These financial statements are the responsibility of
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Public Service Company of
New Hampshire at December 31, 1991 and the results of its operations and its
cash flows for the periods January 1, 1991 to May 15, 1991 and May 16, 1991
to December 31, 1991.
/S/ KPMG Peat Marwick
KPMG Peat Marwick
Boston, Massachusetts
February 7, 1992
<PAGE>29
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This section contains management's assessment of Public Service Company of
New Hampshire's (the company or PSNH) financial condition and the principal
factors having an impact on the results of operations. The company is a
wholly-owned subsidiary of Northeast Utilities (NU). This discussion
should be read in conjunction with the company's financial statements and
footnotes.
FINANCIAL CONDITION
Overview
On June 5, 1992 (the Acquisition Date), NU and PSNH completed an affiliation,
which represented the second step of a two-step bankruptcy court approved plan
(the Plan) that was devised in 1989 to return the then-bankrupt company to
financial health. The first step took place on May 16, 1991 (the Reorganization
Date) when PSNH emerged from bankruptcy as a stand-alone company, subject to a
Merger Agreement (the Merger Agreement) with NU's subsidiaries Northeast
Utilities Service Company and NU Acquisition Corporation (NUAC).
The final step in the affiliation plan occurred on June 5, 1992, when NUAC was
merged into the company pursuant to the Merger Agreement and the company became
a wholly owned operating subsidiary of NU. In a related transaction, the
company's 35.6 percent share of the Seabrook 1 nuclear power plant (Seabrook)
and other Seabrook-related assets were transferred to North Atlantic Energy
Corporation (NAEC), another wholly owned subsidiary of NU. On June 29, 1992,
PSNH's New Hampshire Yankee division was dissolved and North Atlantic Energy
Service Corporation, a wholly owned subsidiary of NU, received approval to
manage Seabrook as agent for the Seabrook joint owners.
At the Acquisition Date, the company and NAEC entered into the Seabrook Power
Contract, under which the company is obligated to buy from NAEC, and NAEC is
obligated to sell to the company, all of NAEC's capacity and output of Seabrook
for a period equal to the length of the Nuclear Regulatory Commission full-power
operating license for Seabrook (through 2026). Under the contract, the company
is unconditionally obligated to pay NAEC's "cost of service" during the period
whether or not Seabrook is operating and without regard to the cost of
alternative sources of power. In addition, the company will be obligated to pay
decommissioning and project cancellation costs after the termination of the
operating license.
NAEC's "cost of service" includes all of its prudently incurred Seabrook-related
costs, including operation and maintenance expense, fuel expense, property tax
expense, depreciation expense, certain overhead and other costs, and a phased-in
return on its Seabrook investment. The Seabrook Power Contract established the
initial recoverable investment at Seabrook at $700 million (Initial Investment),
plus any capital additions, net of depreciation.
The company's net income for the 12 months ended December 31, 1993 was $52.2
million. The 1993 net income reflects a one-time $3 million charge to income
in the third quarter of 1993 for the costs of an employee reduction program.
The company's workforce was reduced by about 18 percent in 1993 through an
employee reduction program that involved early retirements and involuntary
terminations.
Retail sales for 1993 increased 1.4 percent as compared to 1992, as a result of
warmer summer weather which offset the effects of a sluggish New Hampshire
economy. The company expects retail sales growth of about 1 percent in 1994,
based on some expected improvement in the economy.
<PAGE>30
In 1994, the company will continue to face challenges associated with a lagging
economy and competition. Competition within the electric utility industry is
increasing. In response, the company has developed, and is continuing to
develop, a number of initiatives to retain and continue to serve its existing
customers and to expand its retail customer base. These initiatives are aimed
at keeping customers from either leaving the company's retail service territory
or replacing the company's electric service with alternative energy sources.
The cost of doing business, including the price of electricity, is higher in the
Northeast than in most other parts of the country. Relatively high energy and
other costs of doing business in New England also contribute to competitive
disadvantages for many industrial and commercial customers of PSNH. These
disadvantages have aggravated the pressures on business customers in the current
weakened regional economy. The company is working with the New Hampshire Office
of Business and Industrial Development to package development incentives for a
variety of retail and wholesale customers. These economic development packages
may include electric rate discounts, as well as technical support, and energy
conservation services. Targeted rate reductions in effect at the end of 1993
to a limited group of large customers were successful in preserving company
revenues of approximately $15 million. The amount of discounts provided to
customers may increase in the future as the company intensifies its efforts to
retain existing customers and gain new customers.
The ability of retail customers to select an electricity supplier and then force
the local electric utility to transmit the power to the customer's site is known
as "retail wheeling". While wholesale wheeling is mandated by the Energy Policy
Act of 1992, under limited circumstances, retail wheeling is not required in the
company's jurisdictions. In New Hampshire, there have been no legislative
proposals on retail wheeling to date.
NU management has taken steps to make the NU system companies, including
PSNH, more competitive and profitable in the changing utility environment. A
systemwide emphasis on improved customer service is a central focus of the
reorganization of NU that became effective on January 1, 1994. The
reorganization entails realignment of the system into two new core business
groups. The first core business group is devoted to energy resource
acquisition and wholesale marketing and focuses on nuclear, fossil, and
hydroelectric generation, wholesale power marketing, and new business
development. The second core business group oversees all customer service,
transmission and distribution operations, and retail marketing in New
Hampshire, Connecticut, and Massachusetts. These two core business groups
are served by various support functions.
In connection with NU's reorganization, the system companies have begun a
corporate reengineering process which should help PSNH to identify opportunities
to become more competitive while improving customer service and maintaining
excellent operational performance. NU has aggressive cost-reduction targets
over the next three years, which should help enable PSNH to remain competitive.
To date, PSNH has not been materially affected by competition and it does not
foresee substantial adverse effects in the near future unless the current
regulatory structure is substantially altered. The company believes the steps
it is taking will have significant, positive effects in the next few years. In
addition, PSNH benefits from a diverse retail base. The company has no
significant dependence on any one customer or industry. The NU system's
extensive transmission facilities and diversified generating capacity are all
strong positive factors in the regional wholesale power market. NU serves about
30 percent of New England's electric needs and is one of the 20 largest electric
utility systems in the country.
Achieving measurable improvements in earnings in 1994 will depend in part on
the success of the company's wholesale power marketing, customer retention
and reengineering efforts. These efforts should help increase earnings and
improve the company's competitive position.
<PAGE>31
Rate Matters
Deferred charges at December 31, 1993 were $1.0 billion, which includes
$769.5 million for the regulatory asset under the rate agreement with the
state of New Hampshire and $122.5 million for costs deferred under PSNH's
energy adjustment clause. The regulatory asset was established under PSNH's
reorganization plan. The Rate Agreement provides for the recovery of $425
million of the regulatory asset over the seven-year period ending May 1998
with the remaining amount to be amortized over a 20 year period. Management
expects that substantially all of the deferred charges will be recovered
through future rates.
The company adopted Statement of Financial Accounting Standards (SFAS) No.
109, Accounting for Income Taxes, in 1993. Under SFAS No. 109, the company
reflected a regulatory asset of $54.3 million and a deferred tax liability
for the cumulative amount of income taxes associated with timing differences
for which deferred taxes had not been provided but are expected to be
recovered from customers in the future. The adoption of SFAS No. 109 has not
had a material effect on results of operations.
The company also adopted SFAS No. 106, Employers' Accounting for
Postretirement Benefits Other Than Pensions, in 1993. Adopting SFAS No. 106
has not had a material impact on financial condition or results of operations
because the company is currently recovering these costs from customers.
See the "Notes To Financial Statements" for further details on deferred
charges and recently adopted accounting standards.
PSNH's rates are determined under a rate agreement executed by the Governor
and the Attorney General of New Hampshire in 1989 and subsequently approved
by the New Hampshire Public Utilities Commission (NHPUC) (the Rate
Agreement). The Rate Agreement sets out a comprehensive plan of rates for
PSNH, providing for seven base rate increases of 5.5 percent per year (the
fixed-rate period), and a comprehensive fuel and purchased power adjustment
clause (FPPAC). The fourth base rate increase took place on June 1, 1993.
The remaining three base rate increases are scheduled to be put into effect
annually on each June 1.
The FPPAC recovers or refunds the difference between actual prudent energy
and purchased power costs, including the costs incurred under the Seabrook
Power Contract and the costs included in base rates. The FPPAC is reviewed by
the NHPUC every six months and adjusted to reflect actual fuel and purchased
power costs and to anticipate expenditures for the next six-month period.
In June 1993, PSNH's base rates increased by 6.2 percent. The increase above
the 5.5 percent under the Rate Agreement reflected a temporary increase to
recover the increased costs associated with recently enacted tax legislation.
Concurrently, the FPPAC rate was lowered resulting in a net average rate
increase of 4.5 percent.
In November 1993, the NHPUC approved a 1.8 percent increase in PSNH's average
retail rates effective on December 1, 1993 for an increased FPPAC rate. The
increase was attributed primarily to the anticipated costs of a refueling
outage at Seabrook scheduled to begin in March 1994. To mitigate the
rate increase the NHPUC approved the collection of the refueling outage costs
over eighteen months.
In January 1994, the NHPUC approved a Memorandum of Understanding between
PSNH, NAEC, Northeast Utilities Service Company and the Attorney General of
the State of New Hampshire relating to certain issues which had arisen under
the Rate Agreement (the Global Settlement). The Global Settlement addressed
changes in tax legislation in New Hampshire, accounting treatments resulting
from adoption of SFAS No. 106 and SFAS No. 109 and recovery for certain
aspects of PSNH's settlement with the Vermont Electric Generation and
Transmission Cooperative, Inc. (VEG&T), including the purchase by NAEC of
VEG&T's approximately 0.4 percent share of Seabrook among other results. NAEC
will sell the output from the Seabrook interest purchased from VEG&T to PSNH
under an agreement that is substantially similar to the Seabrook Power
Contract. The Global
<PAGE>32
Settlement as approved allowed the accelerated recognition of tax benefits which
will result in moderate increases in PSNH's earnings in the next several years
beginning in 1993.
The costs associated with purchases from certain small-power producers (SPPs)
over the level assumed in the Rate Agreement are deferred and recovered over
ten-year periods through the FPPAC. At December 31, 1993, SPP deferrals are
approximately $107.6 million. A majority of these purchases is under
long-term arrangements (20-30 years) at prices significantly higher than
PSNH's current or projected avoided costs. PSNH is attempting to renegotiate
these arrangements and must report to the NHPUC on the results of the
negotiations.
In January 1994, PSNH filed agreements reached with certain SPPs with the
NHPUC which call for PSNH to pay the SPPs a total of $91.8 million. In
return PSNH would no longer be obligated to buy power from
these SPPs and the SPPs are barred from attempting to provide service to any
customers now on the PSNH system or on the entire NU system. If approved by
the NHPUC, the agreements will provide benefits to customers over the terms
of the arrangements. Management expects to recover any payments from its
customers. The NHPUC will be examining the prudence of PSNH's efforts and
will consider the implementation of temporary rates for the SPPs that have
not settled with PSNH.
As prescribed by the Rate Agreement, NAEC is phasing in its $700 million
initial investment in Seabrook. As of December 31, 1993, NAEC has included
in rates $385 million of its Seabrook investment. The remaining investment
($315 million) will be phased into rates over the next three years beginning
May 15, 1994. The deferred return associated with the amount of investment
that has not been included in rates is $136.3 million through December 31,
1993. This amount and the additional deferred amounts associated with the
remaining phase-in will be billed to PSNH and recovered through the Seabrook
Power Contract over the period 1997 through 2001.
Environmental Matters
The NU system devotes substantial resources to identify and then to meet the
multitude of environmental requirements it faces. PSNH has active auditing
programs addressing a variety of different regulatory requirements, including
an environmental auditing program to detect and remedy noncompliance with
environmental laws or regulations.
PSNH is potentially liable for environmental cleanup costs at a number of
sites both inside and outside of its service territory. To date the future
estimated environmental remediation costs for the sites, which the company
expects to bear legal liability have not been material with respect to the
earnings or financial position of the company. The extent of additional
future environmental cleanup costs is not estimable due to factors such as
the unknown magnitude of possible contamination and changes in existing laws
and regulatory practices.
The company expects that the implementation of Phase 1 of the 1990 Clean Air
Act Amendments will require only minimal emissions reductions for PSNH. The
company has more exposure for stringent emission limits for nitrogen oxides
within the next five years. The costs for meeting Phase II requirements
cannot be estimated at this time because the emission limits have not been
determined.
The estimated cost of decommissioning PSNH's share of Millstone 3 and NAEC's
share of Seabrook is approximately $12 million and $131.7 million,
respectively, in year-end 1993 dollars. Under the terms of the Rate
Agreement, the company is obligated to pay NAEC's share of Seabrook's
decommissioning costs, even if the unit is shut down prior to the expiration
of its operating license. In addition, the company's estimated cost to
decommission its share of the regional nuclear generating units is
estimated to be approximately $46 million. These costs are being recovered
and recognized over the lives of the units. Yankee Atomic Electric Company
(YAEC) has begun decommissioning its nuclear facility. PSNH's estimated
obligation to YAEC has been recorded on the Balance Sheets. Management
expects that the company will continue to be allowed to recover these costs.
<PAGE>33
See the "Notes to Financial Statements" for further information regarding
nuclear decommissioning and other environmental matters.
Seabrook Performance
The Seabrook plant operated at 89.8 percent of capacity for the year ended
December 31, 1993 compared with 77.9 percent in 1992 and a national average
of 70.6 percent for 1993. Seabrook began commercial operation on June 30,
1990. The unit was shut down on September 7, 1992, for refueling and
maintenance and returned to service on November 13, 1992. The next refueling
and maintenance outage is scheduled for March 1994.
Liquidity And Capital Resources
Cash flows from operations provided the primary source of funds for the
period ended December 31, 1993, while the reacquisition and retirement of
long-term debt, repayment of short-term debt, and investment in utility plant
were the primary uses of funds.
As a result of the transactions established by the Plan, the company has a
more leveraged capital structure than most other investor-owned public
utilities and is required to make substantial interest payments. The
company's indebtedness under the Term Loan, Revolving Credit Facility, and
some of the company's pollution control revenue bonds bear interest at
floating rates to be set periodically, causing the company to be sensitive to
prevailing interest rates. The company has entered into interest rate cap
agreements to reduce the potential impact of upward changes in interest rates
on a portion of its variable rate long-term debt. To take advantage of favor
able market conditions during 1993, the company refinanced $45 million of
Pollution Control Bonds. The company expects to refinance a substantial
portion of its Series A and B bonds when they mature in 1996 and 1998,
respectively. In addition, the company's Term Loan must be repaid in 16
quarterly installments of $23.5 million that commenced in August 1992.
PSNH's Series A preferred stock has an annual sinking fund of $25 million
beginning in 1997.
The company's construction program expenditures, including allowance for
funds used during construction (AFUDC), for the period 1994 through 1998 are
estimated to be approximately $172.5 million, including $37.5 million for
1994. The construction program's main focus is maintaining and upgrading the
existing transmission and distribution system, and nuclear and
fossil-generating facilities. The company does not foresee the need for new
major generating facilities until at least the year 2007.
Management believes that, as a result of the annual rate increases provided
for by the Rate Agreement and the FPPAC, cash flow from operations should be
sufficient to cover its cash requirements. The company expects to meet cash
requirements not covered by cash from operations through borrowings under
the Revolving Credit Facility and/or the NU system Money Pool. The Revolving
Credit Facility's final maturity is May 14, 1994. At December 31, 1993,
there were no borrowings under the Revolving Credit Facility and $2.5 million
in borrowings outstanding under the Money Pool. The company may need to
issue new debt in 1994 to finance a buyout of some of its arrangements with
the SPPs.
See the "Notes to Financial Statements" for further information regarding the
Revolving Credit Facility and the Money Pool.
Results of Operations
PSNH's results of operations for the 12 months ended December 31, 1993 and
for the period June 5, 1992 through December 31, 1992 reflect the results
after the acquisition. PSNH's results of operations for the period January
1, 1992 to June 4,1992 and May 16, 1991 to December 31, 1991 reflect the
results of the reorganized
<PAGE>34
company. Prior to May 16, 1991, PSNH was in bankruptcy. The results for each
of these periods are not comparable because of the significant impacts on the
company of the acquisition and reorganization.
Operating Revenues
Operating revenues for the year ended December 31, 1993 decreased $9.9
million, compared to the same period in 1992, primarily due to lower
short-term power sales to other utilities as a result of the
elimination, effective with the acquisition, of sales to NU, and the one-time
impact in 1992 of $15.8 million of revenues released from escrow at the
acquisition date. These decreases were partially offset by increases under
the Rate Agreement and FPPAC. The third and fourth steps of the Rate
Agreement were effective June 1, 1992 and 1993. Retail sales increased 1.4
percent in 1993 over 1992 sales levels.
Operating revenues for the year ended December 31, 1992 increased $88.2
million, compared to the same period in 1991, primarily due to increases
under the Rate Agreement and FPPAC and increased short-term
power sales. Operating revenues for the year ended December 31, 1992,
include $125.4 million in short-term sales, of which $96.0 million was sold
to NU compared to $108.2 million, of which $97.0 million was sold to NU in
1991. In addition, retail sales increased approximately 2 percent.
Operating revenues for the period June 5, 1992 to December 31, 1992, also
include the one-time impact of $15.8 million of revenues released from
escrow.
Fuel, purchased and net interchange power expense decreased $21.1 million for
the year ended December 31, 1993, compared to the same period in 1992,
primarily due to the timing in the recovery of fuel expenses under the FPPAC.
The payments made by PSNH to NAEC under the Seabrook Power Contract
(excluding fuel expense) are reflected as purchased power capacity costs and
are included in other operation expenses. The year ended December 31, 1993,
and the period June 5, 1992 to December 31, 1992, include $115.0 million and
$76.0 million, respectively, of costs associated with the "cost of service"
under the Seabrook Power Contract. Maintenance, depreciation, and taxes
other than income taxes for these periods do not reflect any Seabrook costs
as a result of the transfer of the company's investment in Seabrook to NAEC
and the inclusion of such costs in the Seabrook Power Contract.
Amortization of regulatory assets, net decreased $20 million for the year
ended December 31, 1993 as compared to the same period in 1992 due to the
amortization of the regulatory liability recognized from the PSNH Global
Settlement. Approximately $128 million of pre-acquisition losses are being
amortized over six years.
The company has not recorded a deferred Seabrook return after June 4, 1992
because the company's investment in Seabrook was transferred to NAEC at the
Acquisition Date. Prior to the transfer of Seabrook to NAEC, a deferred
return was calculated on the portion of the Seabrook investment not
reflected in rate base in accordance with the Rate Agreement.
Bankruptcy-related expenses for the period prior to June 5, 1992, represent
costs associated with PSNH's bankruptcy. In 1988, PSNH filed a petition for
reorganization under Chapter 11 of the Bankruptcy Code.
The gain on generating projects of $6.5 million for the period prior to June
5, 1992, represents a first quarter 1992 adjustment related to the settlement
of a Seabrook contractor dispute and a Seabrook property tax abatement.
Interest on long-term debt and other interest are lower for the year ended
December 31, 1993, as compared to the same period in 1992, due to the
assumption by NAEC, at the acquisition date, of the company's obligations
under the 15.23 percent Notes, paydown of the Term Loan and a reduction in
borrowings under the revolving credit facility.
<PAGE>35
(This page left intentionally blank)
<PAGE>36
SELECTED FINANCIAL DATA
- -----------------------------------------------------------------------------
- ------------------------
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
- ------------------------
January 1, 1993 June 5, 1992<F14>* January 1,
1992 May 16, 1991<F15>**
to to to
to
For the Periods December 31, 1993 December 31, 1992 June 4,
1992 December 31, 1991
- -----------------------------------------------------------------------------
- -------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
<C>
Operating Revenues. . . . $864,415 $492,559 $381,769
$539,827
Operating Income. . . . . 105,534 61,206 34,250
82,755
Net Income (Loss) . . . . 52,237 29,398 12,778
52,694
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
- ------------------------
At December 31, 1993 December 31, 1992 June 4,
1992<F14>* December 31, 1991
- -----------------------------------------------------------------------------
- ------------------------
(Thousands of Dollars)
<C> <C> <C>
<C>
Total Assets. . . . . . . . $2,774,511 $2,793,768 $2,693,414
$2,636,525
Long-Term Debt <F13>(a) . . 1,093,985 1,187,985 1,488,985
1,515,985
Liabilities Subject to
Settlement <F13>(a) . . - - -
-
Preferred Stock Subject to
Mandatory Redemption <F13>(a) 125,000 125,000
125,000 125,000
Preferred Stock Not Subject
to Mandatory Redemption . - - -
-
Obligations Under Seabrook
Power Contract and Other
Capital Leases <F13>(a) . 856,559 787,826 -
-
<F13>(a)Includes portions due within one year.
<F14>*PSNH was acquired by NU on June 5, 1992 - See <F1>Note 1 of Notes to
Financial Statements.
<F15>**PSNH was reorganized on May 16, 1991 - See <F1>Note 1 of Notes to
Financial Statements.
</TABLE>
<PAGE>37
SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
- -------
January 1, 1991 January 1, 1990 January 1,
1989
to to to
For the Periods May 15, 1991 December 31, 1990 December 31,
1989
- -----------------------------------------------------------------------------
- -------
(Thousands of Dollars)
<S> <C> <C> <C>
Operating Revenues. . . . $246,281 $660,122 $624,137
Operating Income. . . . . 21,616 63,059 98,126
Net Income (Loss) . . . . (100,791) (210,012) (203,237)
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
- ---------
At May 15, 1991<F15>** December 31, 1990 December
31, 1989
- -----------------------------------------------------------------------------
- ---------
(Thousands of Dollars)
<S> <C> <C> <C>
Total Assets. . . . . . . . $2,502,237 $2,490,534 $2,447,521
Long-Term Debt<F13>(a). . . - - -
Liabilities Subject to
Settlement<F13>(a). . . 1,901,803 1,864,681 1,681,199
Preferred Stock Subject to
Mandatory Redemption<F13>(a) - 420,613 420,613
Preferred Stock Not Subject
to Mandatory Redemption . - 48,587 48,587
Obligations Under Seabrook
Power Contract and Other
Capital Leases<F13>a). . - - -
</TABLE>
<PAGE>38
<TABLE>
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
- -----------------------------------------------------------------------------
- ------------------------
STATISTICS
- -----------------------------------------------------------------------------
- ------------------------
<CAPTION>
Gross Electric Average
Utility Plant Annual
December 31, Use Per Electric
(Thousands of kWh Sales Residential Customers
Employees
Dollars) (Millions) Customer (kWh) (Average) (December
31,)
- -----------------------------------------------------------------------------
- ------------------------
<S> <C> <C> <C> <C> <C>
1993 1,990,730 11,146 6,817 397,277 1,426
1992<F16>* 1,894,359 12,294 6,874 394,046 1,680
1991 1,782,894 11,377 7,184 390,793 2,639
1990 2,585,890 8,324 7,015 336,720 2,766
1989 2,555,404 7,656 7,311 383,497 2,786
</TABLE>
<TABLE>
- -----------------------------------------------------------------------------
- ------------------------
STATEMENTS OF QUARTERLY FINANCIAL DATA (Unaudited)
- -----------------------------------------------------------------------------
- ------------------------
<CAPTION>
- -----------------------------------------------------------------------------
- ------------------------
1993 March 31 June 30 September 30
December 31
- -----------------------------------------------------------------------------
- ------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
<C>
Operating Revenues. . . . . $224,705 $192,360 $222,717
$224,633
======== ======== ========
========
Operating Income. . . . . . $ 30,411 $ 17,133 $ 19,678
$ 38,312
======== ======== ========
========
Net Income (Loss) . . . . . $ 15,558 $ 2,995 $ 8,583
$ 25,101
======== ======== ========
========
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
- ------------------------
April 1 - June 5 -
1992<F16>* March 31 June 4 June 30 Sept.
30 Dec. 31
- -----------------------------------------------------------------------------
- ------------------------
(Thousands of Dollars)
<S> <C> <C> <C> <C>
<C>
Operating Revenues. . . . . $252,707 $129,062 $ 74,182
$204,161 $214,216
======== ======== ========
======== ========
Operating Income. . . . . . $ 34,094 $ 156 $ 17,112 $
22,452 $ 21,642
======== ======== ========
======== ========
Net Income (Loss) . . . . . $ 27,810 $(15,032) $ 12,478 $
10,379 $ 6,541
======== ======== ========
======== ========
<F16>*PSNH was acquired by NU on June 5, 1992 - See <F1>Note 1 of Notes to
Financial Statements.
</TABLE>
<PAGE>39
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
First Mortgage Bonds
--------------------
Trustee and Interest Paying Agent
First Fidelity Bank, N.A., New Jersey
765 Broad Street
Newark, NJ 07102
Preferred Stock
---------------
Transfer Agent, Dividend Disbursing Agent and Registrar
Northeast Utilities Service Company Shareholder Services
P.O. Box 5006, Hartford, Connecticut 06102-5006
1994 Dividend Payment Dates
10.60% Series A
March 31, June 30, September 30, and December 31
Address General Correspondence in Care of:
Northeast Utilities Service Company
Investor Relations Department
P.O. Box 270
Hartford, Connecticut 06141-0270
Tel. (203) 665-5000
General Office
1000 Elm Street
P.O. Box 330
Manchester, New Hampshire 03105
_______________________________
The data contained in this Report is submitted for the sole purpose of
providing information to present stockholders about the Company.
<PAGE>
Exhibit 13.5
1993
ANNUAL REPORT
NORTH ATLANTIC ENERGY CORPORATION
<PAGE>
1993 Annual Report
North Atlantic Energy Corporation
Index
Contents Page
- -------- ----
Balance Sheets . . . . . . . . . . . . . . . . . 1-2
Statements of Income . . . . . . . . . . . . . . 3
Statements of Cash Flows . . . . . . . . . . . . 4
Statements of Common Stockholder's Equity. . . . 5
Notes to Financial Statements. . . . . . . . . . 6-16
Report of Independent Public Accountants . . . . 17
Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . 18-22
Selected Financial Data. . . . . . . . . . . . . 23
Statistics . . . . . . . . . . . . . . . . . . . 23
Statement of Quarterly Financial Data. . . . . . 23
Bondholder Information . . . . . . . . . . . . . Back Cover
<PAGE>
NORTH ATLANTIC ENERGY CORPORATION
BALANCE SHEETS
<TABLE>
<CAPTION>
At December 31, 1993
1992<F1>(a)
- -----------------------------------------------------------------------------
- ---------
(Thousands of
Dollars)
<S> <C>
<C>
ASSETS
- ------
Utility Plant, at original cost:
Electric............................................ $ 758,170 $
756,806
Less: Accumulated provision for depreciation..... 56,649
36,327
------------
- ------------
701,521
720,479
Construction work in progress....................... 7,618
4,775
Nuclear fuel, net................................... 23,339
13,339
------------
- ------------
Total net utility plant......................... 732,478
738,593
------------
- ------------
Other Property and Investments:
Nuclear decommissioning trust, at cost.............. 7,881
5,037
------------
- ------------
Current Assets:
Cash and special deposits........................... 8,404
6,264
Receivables......................................... 3,677
349
Receivables from affiliated companies............... 20,304
22,842
Materials and supplies, at average cost............. 7,353
5,362
Prepayments and other............................... 4,183
4,157
------------
- ------------
43,921
38,974
------------
- ------------
Deferred Charges:
Deferred costs--Seabrook <F4>(Note 1)............... 85,428
22,801
Regulatory asset--income taxes <F4>(Note 1)......... 19,432
-
Unamortized debt expense............................ 5,507
6,179
Deferred DOE assessment <F4>(Note 1)................ 4,905
4,965
Other............................................... 1,269
1,574
------------
- ------------
116,541
35,519
------------
- ------------
Total Assets.................................... $ 900,821 $
818,123
============
============
</TABLE>
<F1>(a) NAEC began operations on June 5, 1992.
The accompanying notes are an integral part of these financial statements.
<PAGE>1
NORTH ATLANTIC ENERGY CORPORATION
BALANCE SHEETS
<TABLE>
<CAPTION>
At December 31, 1993
1992<F1>(a)
- -----------------------------------------------------------------------------
- ---------
(Thousands of
Dollars)
<S> <C>
<C>
CAPITALIZATION AND LIABILITIES
- ------------------------------
Capitalization:
Common stock, $1 par value--authorized
and outstanding 1,000 shares....................... $ 1 $
1
Capital surplus, paid in............................ 160,999
160,999
Retained earnings................................... 38,701
12,703
------------
- -----------
Total common stockholder's equity.......... 199,701
173,703
Long-term debt <F7>(Note 4)......................... 560,000
560,000
------------
- -----------
Total capitalization....................... 759,701
733,703
------------
- -----------
Current Liabilities:
Notes payable to affiliated company................. -
18,500
Accounts payable.................................... 3,999
760
Accounts payable to affiliated companies............ 2,389
602
Accrued interest.................................... 18,288
18,288
Accrued taxes....................................... 127
1
Deferred DOE obligation--current portion <F4>(Note 1) 845
-
------------
- ------------
25,648
38,151
------------
- ------------
Deferred Credits:
Accumulated deferred income taxes <F4>(Note 1)...... 74,772
8,395
Deferred obligation to affiliated company <F9>(Note 6) 33,284
32,909
Deferred DOE obligation <F4>(Note 1)................ 3,941
4,965
Deferred Seabrook tax settlement obligation......... 3,475
-
------------
- ------------
115,472
46,269
------------
- ------------
Commitments and Contingencies <F10>(Note 7)
Total Capitalization and Liabilities............ $ 900,821 $
818,123
============
============
</TABLE>
<F1>(a) NAEC began operations on June 5, 1992.
The accompanying notes are an integral part of these financial statements.
<PAGE>2
NORTH ATLANTIC ENERGY CORPORATION
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
January 1, 1993 June 5,
1992
to to
December 31, December
31,
For the Periods 1993 1992<F1>(a)
- -----------------------------------------------------------------------------
- ----
(Thousands of Dollars)
<S> <C> <C>
Operating Revenues........................... $ 125,408 $ 78,444
----------------
- -------------
Operating Expenses:
Operation--
Fuel..................................... 7,067 1,688
Other.................................... 35,656 25,305
Maintenance................................ 7,858 9,413
Depreciation............................... 22,642 12,905
Federal and state income taxes <F8>(Note 5) 5,673 2,583
Taxes other than income taxes.............. 12,794 10,428
----------------
- -------------
Total operating expenses............. 91,690 62,322
----------------
- -------------
Operating Income............................. 33,718 16,122
----------------
- -------------
Other Income:
Deferred Seabrook return--other funds...... 13,397 7,784
Other, net................................. 1,891 200
Income taxes-credit........................ 1,653 10,428
----------------
- -------------
Other income, net.................... 16,941 18,412
----------------
- -------------
Income before interest charges....... 50,659 34,534
----------------
- -------------
Interest Charges:
Interest on long-term debt................. 64,022 36,647
Other interest............................. 45 200
Deferred Seabrook return--borrowed funds,
<F4>(Note 1)............................ (39,406)
(15,016)
----------------
- -------------
Interest charges, net................ 24,661 21,831
----------------
- -------------
Net Income .................................. $ 25,998 $ 12,703
================
=============
</TABLE>
<F1>(a) NAEC began operations on June 5, 1992.
The accompanying notes are an integral part of these financial statements.
<PAGE>3
NORTH ATLANTIC ENERGY CORPORATION
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the Periods January 1, 1993
June 5, 1992
to
to
December 31,
December 31,
1993
1992 <F1>(a)
- -----------------------------------------------------------------------------
- --------------
(Thousands
of Dollars)
<S>
Cash Flows From Operations: <C>
<C>
Net Income .............................................. $ 25,998
$ 12,703
Adjusted for the following:
Depreciation........................................... 22,861
13,009
Deferred income taxes and investment tax credits, net.. 37,121
8,505
Deferred return - Seabrook............................. (52,803)
(22,802)
Other sources of cash.................................. 8,767
5,387
Other uses of cash..................................... (964)
(8,102)
Changes in working capital:
Receivables and accrued utility revenues.............. (790)
(20,736)
Materials and supplies................................ (1,990)
(2,288)
Accounts payable...................................... 5,026
1,362
Accrued taxes......................................... 126
(4,970)
Other working capital (excludes cash)................. 822
2,330
-------------
-------------
Net cash flows from (used for) operations.................. 44,174
(15,602)
-------------
-------------
Cash Flows From Financing Activities:
Common shares............................................ -
161,000
Long-term debt........................................... -
355,000
Net increase (decrease) in short-term debt............... (18,500)
18,500
-------------
-------------
Net cash flows from (used for) financing activities........ (18,500)
534,500
-------------
-------------
Investment Activities:
Investment in plant:
Investment in Seabrook assets, net..................... -
(504,265)
Electric utility plant................................. (6,707)
(6,307)
Nuclear fuel........................................... (13,983)
(511)
-------------
-------------
Net cash flows used for investments in plant............. (20,690)
(511,083)
Other investment activities, net......................... (2,844)
(1,551)
-------------
-------------
Net cash flows used for investments........................ (23,534)
(512,634)
-------------
-------------
Net Increase In Cash for the Period........................ 2,140
6,264
Cash and special deposits - beginning of period............ 6,264
-
-------------
-------------
Cash and special deposits - end of period.................. $ 8,404
$ 6,264
=============
=============
Supplemental Cash Flow Information:
Cash paid (received) during the period for:
Interest, net of amounts capitalized during
construction................................ $ 63,393
$ 18,166
=============
=============
Income taxes.............................................. $ (32,350)
$ (16,000)
=============
=============
<F1>(a)NAEC began operations on June 5, 1992.
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>4
NORTH ATLANTIC ENERGY CORPORATION
STATEMENTS OF COMMON STOCKHOLDER'S EQUITY
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
- --------
Capital Retained
Common Surplus, Earnings
Stock Paid In <F2>(a)
Total
- -----------------------------------------------------------------------------
- --------
(Thousands of Dollars)
<S> <C> <C> <C> <C>
Balance at June 5, 1992 <F3>(b)......... $ - $ - $ - $
-
Net income for 1992................. 12,703
12,703
Issuance of 1,000 shares of common
stock, $1 par value............... 1
1
Premium on common stock............. 160,999
160,999
----------- ---------- ----------
- ----------
Balance at December 31, 1992............ 1 160,999 12,703
173,703
Net income for 1993................. 25,998
25,998
----------- ---------- ----------
- ----------
Balance at December 31, 1993............ $ 1 $ 160,999 $ 38,701 $
199,701
=========== ========== ==========
==========
<F2>(a) The company had dividend restrictions imposed by its long-term debt
agreement
and was effectively prohibited by the agreement from the distribution
of any
dividends through May 1993. After that time, all retained earnings are
available plus an allowance of $10 million.
<F3>(b) NAEC began operations on June 5, 1992.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>5
NORTH ATLANTIC ENERGY CORPORATION
- ----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- ----------------------------------------------------------------------------
<F4>
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General
North Atlantic Energy Corporation (NAEC or the Company) is a wholly owned
subsidiary of Northeast Utilities (NU). NAEC was incorporated on September
20, 1991 for the purpose of acquiring Public Service Company of New
Hampshire's (PSNH) ownership interest in the Seabrook nuclear project
(Seabrook). The company has no employees. Upon NU's acquisition of PSNH on
June 5, 1992 (Acquisition Date), PSNH's 35.6 percent share of the Seabrook
nuclear power plant (Seabrook 1) and other Seabrook-related assets were
transferred to NAEC for approximately $504 million in cash and the
assumption of PSNH's obligations under the $205 million, 15.23 percent Notes
originally issued by PSNH. The sources of cash were a $161 million equity
investment by NU into NAEC, and NAEC's issuance and sale of $355 million of
9.05 percent First Mortgage Bonds, both of which took place on June 5, 1992.
NAEC also acquired PSNH's 35.6 percent interest in the nuclear fuel for
Seabrook 1 and the cancelled Seabrook 2. In addition, it acquired from PSNH
ownership of the approximately 719 acres of exclusion area land which
surrounds the location of the two Seabrook units. NAEC will not operate
Seabrook 1, which at the Acquisition Date, was being operated by the New
Hampshire Yankee Division (NHY) of PSNH. Effective June 29, 1992, North
Atlantic Energy Service Corporation (NAESCO, another newly formed, wholly
owned, subsidiary of NU), replaced NHY as the managing agent and represents
the Seabrook joint owners, including NAEC, in the operation of Seabrook 1.
On June 29, 1992, all NHY employees became employees of NAESCO.
On February 15, 1994, NAEC acquired Vermont Electric Generation and
Transmission Cooperative, Inc.'s (VEG&T) 0.4 percent ownership interest of
Seabrook for approximately $6.4 million.
The company, The Connecticut Light and Power Company, PSNH, Western
Massachusetts Electric Company, and Holyoke Water Power Company are the
operating subsidiaries comprising the Northeast Utilities system (the system)
and are wholly owned by NU. Other wholly owned subsidiaries of NU provide
substantial support services to the system. Northeast Utilities Service
Company (NUSCO) supplies centralized accounting, administrative, data
processing, engineering, financial, legal, operational, planning, purchasing,
and other services to the system companies. Northeast Nuclear Energy Company
acts as agent for system companies in constructing and operating the
Millstone nuclear generating facilities.
All transactions among affiliated companies are on a recovery of cost basis
which may include amounts representing a return on equity, and are subject to
approval by various federal and state regulatory agencies.
ACCOUNTING CHANGES
Income Taxes: The company adopted the provisions of Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes (SFAS 109),"
effective January 1, 1993. For information on this change, see <F4> Note 1,
"Summary of Significant Accounting Policies - Income Taxes."
ACCOUNTING RECLASSIFICATIONS
Certain amounts in the accompanying financial statements of the company for
the period June 5, 1992 through December 31, 1992 have been classified to
conform with December 31, 1993 presentation.
<PAGE>6
PUBLIC UTILITY REGULATION
NU is registered with the Securities and Exchange Commission (SEC) as a
holding company under the Public Utility Holding Company Act of 1935 (1935
Act), and it and its subsidiaries, including NAEC, are subject to the
provisions of the 1935 Act. Arrangements among the system companies, outside
agencies, and other utilities covering interconnections, interchange of
electric power, and sales of utility property are subject to regulation by
the Federal Energy Regulatory Commission (FERC) and/or the SEC. The company
is subject to further regulation for rates and other matters by the FERC and
the New Hampshire Public Utilities Commission (NHPUC), and follows the
accounting policies prescribed by the commissions.
SEABROOK POWER CONTRACT
On June 5, 1992, NAEC and PSNH entered into the Seabrook Power Contract
(Contract), under which PSNH is obligated to buy from NAEC, and NAEC is
obligated to sell to PSNH, all of NAEC's 35.6 percent ownership share of the
capacity and output of Seabrook 1 for a period equal to the length of the
Nuclear Regulatory Commission's (NRC) full power operating license for
Seabrook 1. The Contract is included as part of the rate agreement between
PSNH and the state of New Hampshire (the Rate Agreement). Under the
Contract, PSNH is unconditionally obligated to pay NAEC's cost of service
during this period whether or not Seabrook 1 is operating. NAEC's cost of
service includes all of its Seabrook-related costs, including operation and
maintenance expense, fuel expense, property tax expense, depreciation
expense, and certain overhead and other costs.
The Contract established the value of the initial investment in Seabrook at
$700-million (Initial Investment) and the initial investment in nuclear fuel
at $0. NAEC is depreciating its Initial Investment on a straight-line basis
over the remaining term of Seabrook 1's full power operating license. Any
subsequent additions to Seabrook 1 will be depreciated on a straight-line
basis over the remaining term of the Contract at the time the additions are
brought into service. The Contract provides that NAEC's return on its
allowed investment in Seabrook 1 (its investment in working capital, fuel,
capital additions after the date of commercial operation of Seabrook 1 and a
portion of the Initial Investment) is calculated based on NAEC's actual
capitalization from time to time over the term of the Contract, which
includes its actual debt and preferred equity costs, and a common equity cost
of 12.53% for the first ten years of the Contract, and thereafter at an
equity rate of return to be fixed in a filing with FERC.
If Seabrook 1 is shut down prior to the expiration of the NRC operating
license term, PSNH will be unconditionally required to pay NAEC termination
costs for 39 years, less the period during which Seabrook 1 has operated.
These costs are designed to reimburse NAEC for its share of Seabrook 1
cancellation and decommissioning costs and to pay NAEC a return of and on any
undepreciated balance of its Initial Investment in the plant over the
then-remaining term of the Contract, and the return of and on any capital
additions to the plant made after the Acquisition Date over a period of five
years after shut down (net of any tax benefits to NAEC attributable to such
shut down).
The portion of NAEC's Initial Investment included in rates is prescribed by
the Contract. The deferred return on the excluded portion of the Initial
Investment will become a component of NAEC's cost of service beginning in the
first year after the end of PSNH's fixed rate period (the Fixed Rate Period),
which continues through May 1997. See <F4> Note 1, "Summary of Significant
Accounting Policies - Phase-In Plan," below, for additional information
regarding NAEC's phase-in plan.
<PAGE>7
NAEC will sell the output from the 0.4 percent Seabrook interest purchased
from VEG&T on February 15, 1994 to PSNH under an agreement that has been
approved by the FERC and is substantially similar to the Seabrook Power
Contract between PSNH and NAEC that was effective on the Acquisition Date.
NUCLEAR FUEL AND SPENT NUCLEAR FUEL DISPOSAL COSTS
The cost of nuclear fuel is amortized to operation expense using a
units-of-production method at rates based on estimated kilowatt-hours of
energy provided.
Under the Nuclear Waste Policy Act of 1982, NAEC must pay the United States
Department of Energy (DOE) for the disposal of spent nuclear fuel and
high-level radioactive waste. Fees are billed currently to customers and
paid to the DOE on a quarterly basis.
Under the Energy Policy Act of 1992 (Energy Act), NAEC is assessed for its
proportionate share of the costs of decontaminating and decommissioning
uranium enrichment plants operated by the DOE (D&D assessment). The Energy
Act imposes an overall cap of $2.25 billion on the obligation of the
commercial power industry and limits the annual special assessment to $150
million each year over a 15-year period beginning in 1993. The Energy Act
also requires that regulators treat D&D assessments as a reasonable
and necessary cost of fuel, to be fully recovered in rates, like any other
fuel cost. The cap and annual recovery amounts will be adjusted annually for
inflation. The D&D assessment is allocated among utilities based upon
services purchased in prior years. As of December 31, 1993, NAEC's remaining
share of these costs is estimated to be approximately $4.9 million. NAEC has
begun to recover these costs. Accordingly, NAEC recognized these costs as a
regulatory asset with a corresponding obligation on its Balance Sheet.
JOINTLY OWNED UTILITY PLANT
As of December 31, 1993, NAEC has a 35.6 percent joint-ownership interest in
Seabrook 1, a 1,150-MW nuclear generating unit. NAEC sells all of its share
of the power generated by Seabrook 1 to PSNH. As of December 31, 1993,
plant-in-service and the accumulated provision for depreciation included
approximately $758.1 million and $56.6 million, respectively, for NAEC's
share of Seabrook 1. NAEC's share of Seabrook 1 expenses is included in the
operating expenses on the accompanying Statement of Income. In February
1994, NAEC purchased an additional 0.4 share of Seabrook 1 from VEG&T.
DEPRECIATION
The provision for depreciation is calculated using the straight-line method
based on estimated remaining lives of depreciable utility plant-in-service,
adjusted for salvage value and removal costs, as approved by the FERC.
Except for major facilities, depreciation factors are applied to the average
plant-in-service during the period. Major facilities are depreciated from
the time they are placed in service. When plant is retired from service, the
original cost of plant, including costs of removal, less salvage, is charged
to the accumulated provision for depreciation. For Seabrook 1, the costs of
removal, less salvage, that have been funded through external decommissioning
trusts will be paid with funds from the trusts and charged to the accumulated
reserve for decommissioning included in the accumulated provision for
depreciation over the expected service life of the plant. See <F5> Note 2,
"Nuclear Decommissioning," for additional information.
The depreciation rates for the several classes of electric plant-in-service
are equivalent to a composite rate of 3.2 percent in 1993 and 1992.
<PAGE>8
INCOME TAXES
The tax effect of temporary differences (differences between the periods in
which transactions affect income in the financial statements and the periods
in which they affect the determination of income subject to tax) is accounted
for in accordance with the ratemaking treatment of the FERC. See <F8>
Note 5, "Income Tax Expense," for the components of income tax expense.
When NU acquired PSNH on June 5, 1992, PSNH and NAEC became parties to the
Tax Allocation Agreement among the members of the NU system. The Tax
Allocation Agreement requires each member of the NU system to pay to NU the
amount, if any, that would have been its federal income tax liability if it
had filed a separate return, with certain adjustments, and requires NU to
distribute the excess of the sum of such payments over the NU system's
consolidated federal income tax liability among those members of the NU
system that had tax items that reduced the NU system's current consolidated
tax liability. A substantial portion of NAEC's cash flow for the first few
years of operations is expected to consist of payments made by NU to NAEC
under the Tax Allocation Agreement. The amount of such payments will
decrease over time but is expected to remain substantial during the first few
years of operations when NAEC is expected to incur losses for tax purposes
due to the accelerated tax depreciation of Seabrook 1. Under the Tax
Allocation Agreement, NAEC's tax losses may be utilized to offset taxable
income of the NU system and NU is required, under the Tax Allocation
Agreement, to pay NAEC for the use of such tax benefits. Such tax losses, if
not fully utilized in the taxable year in which they were incurred, may be
carried back to each of the three taxable years of the NU system preceding
the taxable year in which they are incurred. If the NU system does not have
enough taxable income in the taxable year in which such losses are incurred
or in the preceding taxable years to permit it to take full advantage of such
tax losses, or if the NU system is in an alternative minimum tax position in
any such year, then the amount of payments under the Tax Allocation Agreement
to NAEC will be decreased and NAEC's cash flow will be adversely affected.
No assurance can be given that NAEC's cash flow will not be adversely
affected in subsequent years by the inability of the other members of the NU
system to utilize fully the tax losses expected to be incurred by NAEC.
In 1992, the Financial Accounting Standards Board (FASB) issued SFAS 109.
SFAS 109 supersedes previously issued income tax accounting standards. NAEC
adopted SFAS 109, on a prospective basis, during the first quarter of 1993.
The adoption of SFAS 109 has not had a material effect on the net income or
on the balance sheet of the company. As of December 31, 1993, the deferred
tax obligation related to the adoption of SFAS 109 was approximately $19
million. As it is probable that the increase in deferred tax liabilities
will be recovered from customers through rates, NAEC also established a
regulatory asset. SFAS 109 does not permit net-of-tax accounting.
Accordingly, the company no longer utilizes net-of-tax accounting for the
deferred nuclear plants return-borrowed funds and allowance for funds used
during construction (AFUDC)-borrowed funds associated with Seabrook 1.
The temporary differences which give rise to the accumulated deferred tax
obligation at December 31, 1993 are as follows:
(Thousands of Dollars)
Accelerated depreciation and other
plant-related differences. . . . . . . . . . . $46,184
The tax effect of net regulatory assets . . . . 6,801
Other. . . . . . . . . . . . . . . . . . . . . . 21,787
-------
$74,772
=======
<PAGE>9
PHASE-IN PLAN
As described below, NAEC is phasing into rates its Initial Investment in
Seabrook 1. The plan is in compliance with Statement of Financial Accounting
Standards No. 92, "Regulated Enterprises - Accounting for Phase-In Plans."
As prescribed by the Rate Agreement, NAEC is phasing in its Initial
Investment. As of December 31, 1993, the portion of the Initial Investment
on which NAEC is entitled to earn a cash return was 55 percent and will
increase by 15 percent in each of the next three years beginning May 15,
1994. Between the May 16, 1991 reorganization date of PSNH (Reorganization
Date) and the Acquisition Date, PSNH recorded $50.9 million of deferred
return on its investment in Seabrook 1. In accordance with the Rate
Agreement, PSNH transferred the $50.9 million deferred return balance to NAEC
along with the other Seabrook assets. On the Acquisition Date, NAEC recorded
the $50.9 million deferred return and $32.9 million of income taxes
associated with the deferred return as part of utility plant. From the
Acquisition Date through December 31, 1993, NAEC recorded an additional $85.4
million of deferred return, which is recorded in deferred costs - Seabrook on
the Balance Sheet. The deferred return on the excluded portion of the
Initial Investment, including the $50.9 million, will be recovered with
carrying charges beginning six months after the end of PSNH's Fixed-Rate
Period (which continues through May 1997) and will be fully recovered by May
15, 2001.
CASH AND SPECIAL DEPOSITS
Cash and special deposits at December 31, 1993 and 1992 included $7.3 million
and $6.0 million, respectively, in special deposits that will be used to fund
the company's share of future Seabrook operational costs.
<F5>
2. NUCLEAR DECOMMISSIONING
A 1991 Seabrook decommissioning study confirmed that complete and immediate
dismantlement at retirement is the most viable and economic method of
decommissioning Seabrook 1. Decommissioning studies are reviewed and updated
periodically to reflect changes in decommissioning requirements, technology,
and inflation.
The estimated cost of decommissioning NAEC's 36.0 ownership share of Seabrook
1, in year-end 1993 dollars, is $131.7 million. Nuclear decommissioning
costs are accrued over the expected service life of the unit and are included
in depreciation expense on the Statements of Income. Nuclear decommissioning
costs amounted to $2.6 million in 1993 and $1.4 million in 1992. Nuclear
decommissioning, as a cost of removal, is included in the accumulated
provision for depreciation on the Balance Sheets.
Under the terms of the Rate Agreement, PSNH is obligated to pay NAEC's share
of Seabrook's decommissioning costs, even if the unit is shut down prior to
the expiration of its operating license. NAEC's portion of the cost of
decommissioning Seabrook 1 is paid to an independent decommissioning
financing fund managed by the state of New Hampshire.
As of December 31, 1993, NAEC (including pre-Acquisition Date payments made
by PSNH) has paid approximately $7.3 million into Seabrook 1's
decommissioning financing fund. Earnings on the decommissioning trusts and
financing fund increase the decommissioning trust balance and the accumulated
reserve for decommissioning. At December 31, 1993, the balance in the
accumulated reserve for decommissioning amounted to $7.9 million.
<PAGE>10
Changes in requirements or technology, or adoption of a decommissioning
method other than immediate dismantlement, could change decommissioning cost
estimates. Although allowances for decommissioning have increased
significantly in recent years, ratepayers in future years will need to
increase their payments to offset the effects of any insufficient rate
recoveries in previous years.
<F6> 3. SHORT-TERM DEBT
NAEC is a limited participant in the Northeast Utilities System Money Pool
(Pool). As a limited participant, NAEC is limited to borrowing funds
provided by NU parent. The Pool provides a more efficient use of the cash
resources of the system, and reduces outside short-term borrowings. NUSCO
administers the Pool as agent for the member companies. Short-term borrowing
needs of the member companies are first met with available funds of other
member companies, including funds borrowed by NU parent. NU parent may lend
to the Pool but may not borrow. However, borrowings based on loans
from NU parent bear interest at NU parent's cost and must be repaid based
upon the terms of NU parent's original borrowing. Funds may be withdrawn
from or repaid to the Pool at any time without prior notice. Investing and
borrowing subsidiaries receive or pay interest based on the average daily
Federal Funds rate.
Maturities of NAEC's short-term debt obligations were for periods of three
months or less.
The amount of short-term borrowings that may be incurred by the system
companies is subject to periodic approval by the SEC under the 1935 Act.
Under the SEC restrictions, NAEC was authorized, as of January 1, 1993, to
incur short-term borrowings up to a maximum of $50 million.
<F7>
4. LONG-TERM DEBT
Details of long-term debt outstanding are:
- -------------------------------------------------------------------------
December 31,
---------------
1993 1992
- -------------------------------------------------------------------------
(Thousands of Dollars)
First Mortgage Bonds:
9.05% Series A, due 2002. . . . . . . . $355,000 $355,000
Notes:
15.23% due 2000. . . . . . . . . . . . . 205,000 205,000
-------- --------
Long-term debt, net $560,000 $560,000
======== ========
Long-term debt maturities and cash sinking-fund requirements on debt
outstanding at December 31, 1993 for the years 1994 through 1998 are
approximately $0 in 1994 and $20,000,000 for 1995-1998.
The Series A Bonds are not redeemable prior to maturity except out of
proceeds of sales of property subject to the lien of the Series A First
Mortgage Bond Indenture (Indenture), at general redemption prices established
by the Indenture, and out of condemnation or insurance proceeds and through
the operation of the sinking fund discussed above.
Essentially all of NAEC's utility plant is subject to the lien of its
Indenture.
<PAGE>11
<F8>
5. INCOME TAX EXPENSE
The components of the federal and state income tax provisions are:
- -----------------------------------------------------------------------------
January 1, June 5,
to to
For the Periods December 31, 1993 December 31, 1992
<F4>(Note 1)
- -----------------------------------------------------------------------------
(Thousands of Dollars)
Current income taxes:
Federal. . . . . . . . . . . . $(33,225) $(16,350)
State. . . . . . . . . . . . . 124 -
--------- ---------
Total current . . . . . . . . (33,101) (16,350)
--------- ---------
Deferred income taxes, net:
Federal . . . . . . . . . . . . 37,199 16,240
State . . . . . . . . . . . . . (78) 1,979
--------- ---------
Total deferred . . . . . . . . 37,121 18,219
--------- ---------
Total income tax expense . . . $ 4,020 $ 1,869
========= =========
The components of total income tax expense are classified as follows:
Income taxes charged to
operating expenses. . . . . . . $ 5,673 $ 2,583
Income taxes associated with
allowance for funds used
during construction (AFUDC)
and deferred Seabrook 1
return - borrowed funds. . . . . - 9,714
Other income taxes - credit . . . (1,653) (10,428)
--------- ---------
Total income tax expense. . . . . $ 4,020 $ 1,869
========= =========
Deferred income taxes are comprised of the tax effects of temporary
differences as follows:
- -----------------------------------------------------------------------------
January 1, to June 5,
to to
For the Periods December 31, 1993 December 31, 1992
<F4>(Note 1)
- -----------------------------------------------------------------------------
(Thousands of Dollars)
Depreciation. . . . . . . . . . . $23,000 $16,146
Alternative minimum tax . . . . . 1,250 (7,641)
AFUDC and deferred Seabrook
return, net. . . . . . . . . . . 13,792 9,714
Property taxes. . . . . . . . . . (1,003) -
Other . . . . . . . . . . . . . . 82 -
------- -------
Deferred income taxes, net. . . . $37,121 $18,219
======= =======
<PAGE>12
A reconciliation between income tax expense and the expected tax expense at
the applicable statutory rate is as follows:
- -----------------------------------------------------------------------------
January 1, June 5,
to to
For the Periods December 31, 1993 December 31, 1992
<F4>(Note 1)
- -----------------------------------------------------------------------------
(Thousands of Dollars)
Expected federal income tax at
35 percent of pretax income for
1993 and at 34 percent for
1992 . . . . . . . . . . . . . . $10,506 $ 4,954
Tax effect of differences:
Depreciation differences. . . . . (1,481) (1,546)
Deferred Seabrook return -
other funds. . . . . . . . . . . (4,689) (2,647)
State income taxes, net of federal
benefit. . . . . . . . . . . . . 30 1,306
Other, net. . . . . . . . . . . . (346) (198)
------- -------
Total income tax expense . . $ 4,020 $ 1,869
======= =======
<F9> 6. DEFERRED OBLIGATION - AFFILIATED COMPANY
At the time PSNH emerged from bankruptcy on May 16, 1991, in accordance with
the phase-in under the Contract, it began accruing a deferred return on a
portion of its Seabrook investment. From May 16, 1991 to the Acquisition
Date, PSNH accrued a deferred return of $50.9 million. On the Acquisition
Date, PSNH transferred the $50.9 million deferred return to NAEC as part of
the Seabrook-related assets.
At the time PSNH sold the deferred return to NAEC, it realized, for income
tax purposes, a gain that is deferred under the consolidated income tax
rules. This gain will be restored for income tax purposes when the deferred
return of $50.9 million, and the associated income taxes of $32.9 million,
are collected by NAEC through the Contract. When NAEC recovers the $32.9
million in years eight through ten of the Rate Agreement, it is obligated to
make corresponding payments to PSNH.
On the Acquisition Date, NAEC recorded the $32.9 million of income taxes
associated with the deferred return as an adjustment to the purchase price of
the Seabrook-related assets, with a corresponding obligation to PSNH, on its
Balance Sheet. In 1993, due to changes in tax rates, this amount was
adjusted to $33.3 million.
<F10>
7. COMMITMENTS AND CONTINGENCIES
SEABROOK 1 CONSTRUCTION PROGRAM
The construction program for Seabrook 1 is subject to periodic review and
revision. Actual construction expenditures may vary from such estimates due
to factors such as revised load estimates, inflation, revised nuclear safety
regulations, delays, difficulties in the licensing process, the availability
and cost of capital, and other actions taken by regulatory bodies.
<PAGE>13
NAEC currently forecasts construction expenditures (including AFUDC) for its
share of Seabrook 1 to be $37.8 million for the years 1994-1998, including
$8.2 million for 1994. In addition, NAEC estimates that its share of
Seabrook 1 nuclear fuel requirements will be $53.5 million for the years
1994-1998, including $4.9 million for 1994.
ENVIRONMENTAL MATTERS
NAEC is subject to regulation by federal, state, and local authorities with
respect to air and water quality, handling and the disposal of toxic
substances and hazardous and solid wastes, and the handling and
use of chemical products. NAEC has an active environmental auditing program
to prevent, detect, and remedy noncompliance with environmental laws or
regulations and believes that it is in substantial compliance with current
environmental laws and regulations. Changing environmental requirements
could hinder future construction. The cumulative long-term, economic cost
impact of increasingly stringent environmental requirements cannot be
estimated. Changing environmental requirements could also require extensive
and costly modifications to NAEC's existing investment in Seabrook 1 and
could raise operating costs significantly. As a result, NAEC may incur
significant additional environmental costs, greater than amounts included in
cost of removal and other reserves, in connection with the generation of
electricity and the storage, transportation, and disposal of by-products and
wastes. NAEC may also encounter significantly increased costs to remedy the
environmental effects of prior waste handling and disposal activities.
In most cases, the extent of additional future environmental cleanup costs is
not reasonably estimable due to factors such as the unknown magnitude of
possible contamination, the appropriate remediation method, the possible
effects of future legislation and regulation, the possible effects of
technological changes related to future cleanup, and the difficulty of
determining future liability, if any, for the cleanup of sites at which NAEC
may be determined to be legally liable by the federal or state environmental
agencies. In addition, NAEC cannot estimate the potential liability for
future claims that may be brought against it by private parties. However,
considering known facts and existing laws and regulatory practices,
management does not believe that such matters will have a material adverse
effect on NAEC's financial position or future results of operations.
NUCLEAR INSURANCE CONTINGENCIES
The Price-Anderson Act currently limits public liability from a single
incident at a nuclear power plant to $9.4 billion. The first $200 million of
liability would be provided by purchasing the maximum amount of commercially
available insurance. Additional coverage of up to a total of $8.8 billion
would be provided by an assessment of $75.5 million per incident, levied on
each of the 116 nuclear units that are currently subject to the Secondary
Financial Protection Program in the United States, subject to a maximum
assessment of $10 million per incident per nuclear unit in any year. In
addition, if the sum of all public liability claims and legal costs arising
from any nuclear incident exceeds the maximum amount of financial protection,
each reactor operator can be assessed an additional 5 percent, up to $3.8
million, or $437.9 million in total, for all 116 nuclear units. The maximum
assessment is to be adjusted at least every five years to reflect
inflationary changes. At December 31, 1993, based on NAEC's ownership
interest in Seabrook 1, the maximum liability would be $28.2 million per
incident. Payments for NAEC's ownership interest in Seabrook 1 would be
limited to a maximum of $3.6 million per incident per year.
<PAGE>14
Insurance has been purchased from Nuclear Electric Insurance Limited (NEIL)
to cover the cost of repair, replacement, or decontamination or premature
decommissioning of utility property resulting from insured occurrences with
respect to NAEC's ownership interest in Seabrook 1. All companies insured
with NEIL are subject to retroactive assessments if losses exceed the
accumulated funds available to NEIL. The maximum potential assessments
against NAEC with respect to losses arising during current policy years
are approximately $4.6 million under the property damage, decontamination,
and decommissioning policies. Although NAEC has purchased the limits of
coverage currently available from the conventional nuclear insurance pools,
the cost of a nuclear incident could exceed available insurance proceeds.
Insurance has been purchased from American Nuclear Insurers/Mutual Atomic
Energy Liability Underwriters, aggregating $200 million on an industry basis
for coverage of worker claims. All companies insured under this coverage are
subject to retrospective assessments of $3.2 million per reactor. The
maximum potential assessments against NAEC with respect to losses arising
during the current policy period are approximately $1.2 million.
Under the terms of the Contract, any nuclear insurance assessments described
above would be passed on to PSNH as a "cost of service."
<F11>
8. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used to estimate the fair value of
each of the following financial instruments:
Cash, special deposits and nuclear decommissioning trust: The carrying
amounts approximate fair value.
Long-term debt: The fair value of NAEC's long-term debt is based upon the
quoted market price for those issues or similar issues.
The carrying amounts of NAEC's financial instruments and the estimated fair
values are as follows:
- ----------------------------------------------------------------------------
Carrying Fair
At December 31, 1993 Amount Value
- ----------------------------------------------------------------------------
(Thousands of Dollars)
First Mortgage Bonds. . . . . . . . . . $355,000 $373,496
Other long-term debt. . . . . . . . . . 205,000 254,057
- ----------------------------------------------------------------------------
Carrying Fair
At December 31, 1992 Amount Value
- ----------------------------------------------------------------------------
(Thousands of Dollars)
First Mortgage Bonds. . . . . . . . . . . $355,000 $369,200
Other long-term debt. . . . . . . . . . . 205,000 262,400
<PAGE>15
The fair values shown above have been reported to meet the disclosure
requirements and do not purport to represent the amounts that those
obligations would be settled at.
In May 1993, the FASB issued Statement of Financial Accounting Standards No.
115, "Accounting for Certain Investments in Debt and Equity Securities (SFAS
115)." SFAS 115 requires companies to disclose the classification of
investments in debt or equity securities based on management's intent and
ability to hold the security. SFAS 115 also requires disclosure of the
aggregate fair value, gross unrealized holding gains, gross unrealized
holding losses and amortized cost basis by major security type. Effective
January 1, 1994, NAEC will adopt SFAS 115 on a prospective basis. NAEC
anticipates that the adoption of SFAS 115 will not have a material impact on
future results of operations or financial position.
<PAGE>16
NORTH ATLANTIC ENERGY CORPORATION
- -----------------------------------------------------------------------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
- -----------------------------------------------------------------------------
To the Board of Directors
of North Atlantic Energy Corporation:
We have audited the accompanying balance sheets of North Atlantic Energy
Corporation (a New Hampshire corporation and a wholly owned subsidiary of
Northeast Utilities) as of December 31, 1993 and 1992, and the related
statements of income, common stockholder's equity, and cash flows for the
year ended December 31, 1993 and the period from June 5, 1992 to December 31,
1992. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of North Atlantic Energy
Corporation as of December 31, 1993 and 1992, and the results of its
operations and cash flows for the year ended December 31, 1993 and the period
from June 5, 1992 to December 31, 1992, in conformity with generally accepted
accounting principles.
As discussed in <F4> Note 1 to the Financial Statements, "Summary of
Significant Accounting Policies - Accounting Changes," effective January 1,
1993, North Atlantic Energy Corporation changed its method of accounting for
income taxes.
/s/Arthur Andersen & Co.
ARTHUR ANDERSEN & CO.
Hartford, Connecticut
February 18, 1994
<PAGE>17
NORTH ATLANTIC ENERGY CORPORATION
- ----------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
- ----------------------------------------------------------------------------
This section contains management's assessment of North Atlantic Energy
Corporation (the company or NAEC) financial condition and the principal
factors having an impact on the results of operations. The company is a
wholly-owned subsidiary of Northeast Utilities (NU). This section should be
read in conjunction with the company's financial statements and footnotes.
FINANCIAL CONDITION
Overview
On June 5, 1992 (the Acquisition Date), NU and Public Service Company of New
Hampshire (PSNH) completed an affiliation, which represented the second step
of a two-step bankruptcy court approved plan (the Plan) that was devised in
1989 to return then-bankrupt PSNH to financial health. The first step took
place on May 16, 1991 (the Reorganization Date) when PSNH emerged from
bankruptcy as a stand-alone company, subject to a Merger Agreement (the
Merger Agreement) with NU's subsidiaries Northeast Utilities Service Company
and NU Acquisition Corporation (NUAC). The final step in the affiliation
plan occurred on June 5, 1992, when NUAC merged into PSNH pursuant to the
Merger Agreement and PSNH became a wholly owned operating subsidiary of NU.
In a related transaction, PSNH's 35.6 percent share of the Seabrook 1 nuclear
power plant (Seabrook) and other Seabrook-related assets were transferred to
the company. On June 29, 1992, North Atlantic Energy Service Corporation,
another wholly owned subsidiary of NU, received approval to manage Seabrook
as agent for the Seabrook joint owners.
At the Acquisition Date, PSNH and the company entered into the Seabrook Power
Contract, under which PSNH is obligated to buy from the company, and the
company is obligated to sell to PSNH, all of the company's capacity and
output of Seabrook for a period equal to the length of the Nuclear Regulatory
Commission full-power operating license for Seabrook (through 2026). Under
the contract, PSNH is unconditionally obligated to pay the company's "cost of
service" during the period whether or not Seabrook is operating and without
regard to the cost of alternative sources of power. In addition, PSNH will
be obligated to pay decommissioning and project cancellation costs after the
termination of the operating license.
The company's "cost of service" includes all of its prudently incurred
Seabrook-related costs, including operation and maintenance expense, fuel
expense, property tax expense, depreciation expense, certain overhead and
other costs, and a phased-in return on its Seabrook investment. The Seabrook
Power Contract established the initial recoverable investment in Seabrook at
$700 million (Initial Investment), plus any capital additions, net of
depreciation.
The company's only assets are Seabrook and other Seabrook-related assets and
its only source of revenue is the Seabrook Power Contract. PSNH's
obligations under the Seabrook Power Contract are solely its own and
have not been guaranteed by NU. The Seabrook Power Contract contains no
provisions entitling PSNH to terminate its obligations. If, however, PSNH
were to fail to perform its obligations under the Seabrook Power Contract,
the company would be required to find other purchasers for Seabrook power.
Under the Seabrook Power Contract, the company is not entitled to earn an
immediate cash return on the full amount of its Initial Investment in
Seabrook, but instead is required to phase-in its return on the Initial
Investment. The portion of the Initial Investment on which the company is
entitled to earn a return is 20 percent in the first year after the
Reorganization Date, increasing by 20 percent in the second year and by 15
percent in each of the next
<PAGE>18
four years, resulting in 100 percent recovery in the sixth and each succeeding
year. The company is entitled to earn a noncash deferred return on the portion
of the Initial Investment not yet phased into rates. The company is currently
earning a return on 55 percent of its Seabrook investment.
When PSNH emerged from bankruptcy on May 16, 1991, in accordance with the
phase-in under the Seabrook Power Contract, it began accruing a deferred
return on a portion of its Seabrook investment. From May 16, 1991
to the Acquisition Date, PSNH accrued a deferred return of $50.9 million. On
the Acquisition Date, PSNH transferred the $50.9 million deferred return to
the company as part of the Seabrook-related assets. NAEC recorded the $50.9
million as an adjustment to utility plant. From the Acquisition Date through
December 31, 1993, NAEC recorded an additional $85.4 million of deferred
return, which is recorded in deferred costs--Seabrook on the Balance Sheets.
The deferred return on the excluded portion of the Initial Investment,
including the $50.9 million, will be recovered with carrying charges
beginning six months after the end of PSNH's fixed-rate period (which
continues through May 1997) and will be fully recovered by May 15, 2001.
At the time PSNH transferred the deferred return to NAEC, it realized, for
income tax purposes, a gain that is deferred under the consolidated income
tax rules. This gain will be restored for income tax purposes when the
deferred return of $50.9 million, and the associated income taxes of
$32.9 million, are collected by NAEC from PSNH through the Seabrook Power
Contract over the period beginning six months after the end of PSNH's fixed
rate period through May 15, 2001. When NAEC recovers the $32.9 million, it
is obligated to make corresponding payments to PSNH. On the Acquisition
Date, NAEC recorded on its balance sheet the $32.9 million as an adjustment
to the purchase price of the Seabrook-related assets, with a corresponding
obligation to PSNH.
In 1992, the company recorded a deferred assessment and obligation for the
estimated costs for the company's Seabrook share of an assessment for costs
for the decontamination and decommissioning of uranium enrichment plants
operated by the United States Department of Energy (DOE). The company
expects to recover these amounts from PSNH as part of the cost of Seabrook
fuel.
In 1993, the company adopted Statement of Financial Accounting Standards
(SFAS) No. 109, "Accounting for Income Taxes." Under SFAS No. 109, the
company reflected a regulatory asset and a deferred tax liability for the
cumulative amount of income taxes associated with timing differences for
which deferred taxes had not been provided but are expected to be recovered
from customers in the future. The adoption of SFAS No. 109 has not had a
material effect on results of operations.
See the "Notes to Financial Statements" for further details on deferred
charges and recently adopted accounting standard.
RATE MATTERS
PSNH's rate agreement with the State of New Hampshire (the Rate Agreement)
provides the financial basis for the affiliation plan. It sets out a
comprehensive plan of rates for PSNH, providing for seven base rate increases
of 5.5 percent per year (the Fixed Rate Period) and a comprehensive Fuel and
Purchased Power Adjustment Clause (FPPAC). The first of these base rate
increases was put in effect on January 1, 1990. The remaining three
increases are effective annually on each June 1 beginning in 1994.
The FPPAC allows PSNH to recover from its customers the difference between
actual prudent energy and purchased power costs, including the costs incurred
under the Seabrook Power Contract, and the costs included in base rates.
In January 1994, the NHPUC approved a Memorandum of Understanding between
PSNH, NAEC, Northeast Utilities Service Company (NUSCO), and the Attorney
General of the State of New Hampshire relating to certain issues which had
arisen under the Rate Agreement (the Global Settlement). The Global
Settlement addressed changes in tax legislation in New Hampshire, accounting
treatments for PSNH resulting from adoption of SFAS
<PAGE>19
No. 106, "Employer's Accounting for Postretirement Benefits Other Than Pensions"
and SFAS No. 109 and recovery for certain aspects of PSNH's settlement with the
Vermont Electric Generation and Transmission Cooperative, Inc. (VEG&T),
including the purchase by NAEC of VEG&T's 0.4 percent share of Seabrook.
NAEC became the purchaser of the VEG&T's 0.4 percent share of Seabrook and
entered into a separate power contract with PSNH, under which PSNH is
obligated to buy from NAEC all of the capacity and output of Seabrook
attributable to such interest for a period equal to the length of the NRC
full power operating license for Seabrook. On January 7, 1994, the NRC
approved the transfer of VEG&T's ownership share of Seabrook to NAEC. All
regulatory approvals for NAEC's purchase have been received and the closing
was effective in February 1994.
On April 16, 1993, the Governor of New Hampshire signed into law legislation
that implemented the settlement of a suit concerning a property tax on
Seabrook station (the Seabrook Tax) that was filed with the United States
Supreme Court by Attorneys General of Connecticut, Massachusetts, and Rhode
Island. The legislation made various changes to New Hampshire tax laws. The
change in the tax law required the State of New Hampshire to refund to the
joint owners of Seabrook a total of $8.8 million in each of 1993 and 1994.
NAEC has recognized a receivable and an obligation to PSNH for PSNH and
NAEC's share of the refund. The tax refund is being refunded to PSNH through
the FPPAC.
SEABROOK PERFORMANCE
In 1993 Seabrook operated at a capacity factor of 89.8 percent as compared to
77.9 percent for the same period in 1992 and a national average of 70.6
percent for 1993. The unit was shutdown on September 7, 1992 for refueling
and maintenance and returned to service on November 13, 1992. The unit is
scheduled to begin a 56-day refueling and maintenance outage on March 26,
1994.
NAEC could be affected by the ability of other Seabrook joint owners to fund
their shares of Seabrook costs. Great Bay Power Corporation, an owner of a
12.13 percent entitlement in Seabrook is operating under bankruptcy
protection of Chapter 11 of the Federal Bankruptcy Code. It is expected that
Great Bay or certain companies that Great Bay has agreements with will have
funds sufficient to fund the upcoming Seabrook outage.
ENVIRONMENTAL MATTERS
NAEC is subject to regulation by federal, state, and local authorities with
respect to air and water quality, handling and the disposal of toxic
substances and hazardous and solid wastes, and the handling and use of
chemical products. The cumulative long-term economic cost impact of
increasingly stringent environmental requirements cannot be estimated.
However, NAEC has an active environmental auditing program to detect and
remedy noncompliance with environmental laws or regulations. NAEC may incur
significant additional costs, greater than amounts included in cost of
removal and other reserves, in connection with the generation of electricity
and the storage, transportation, and disposal of by-products and wastes.
NAEC may also encounter significantly increased costs to remedy the
environmental effects of prior waste handling and disposal practices.
The estimated cost of decommissioning NAEC's 36.0 ownership share of
Seabrook, in year-end 1993 dollars, is $131.7 million. Nuclear
decommissioning costs are accrued over the expected service life of the unit
and are included in depreciation expense on the Statements of Income.
Nuclear decommissioning costs amounted to $2.6 million in 1993 and $1.4
million in 1992. Nuclear decommissioning, as a cost of removal, is included
in the accumulated provision for depreciation on the Balance Sheets.
See "Notes to Financial Statements" for further information regarding nuclear
decommissioning and other environmental matters.
<PAGE>20
LIQUIDITY AND CAPITAL RESOURCES
Cash flows from operations provided the primary source of funds for the
period ended December 31, 1993, while repayment of short-term debt and
investment in nuclear fuel and plant were the primary uses of funds. Nuclear
fuel expenditures for the period are high due to higher purchases in 1993 in
preparation for a March 1994 refueling and maintenance outage.
The company had negative cash flow from operations for the period June 5,
1992 through December 31, 1992 due to a substantial portion of its earnings
being noncash.
At the Acquisition Date, NAEC assumed PSNH's obligations under the $205
million of 15.23 percent notes (the Notes) and paid $504 million to PSNH for
the purchase of PSNH's interest in Seabrook. The company financed these
requirements out of the proceeds from the sale of $355 million Series A First
Mortgage Bonds and the sale of its common stock to NU for $161 million. As a
result of these transactions and the assumption of the Notes, the company's
initial capitalization is approximately 78 percent debt and 22 percent common
equity. In addition, the company borrowed amounts under the NU system Money
Pool for ongoing cash requirements. As of December 31, 1993, there are no
borrowings under the Money Pool. (See "Notes to Financial Statements" for
information regarding the Money Pool.)
The company will have ongoing cash requirements for Seabrook-related capital
expenditures, nuclear fuel expenditures, interest and operating expenses.
Capital expenditures for the period 1994 through 1998 are expected to be
approximately $37.8 million (including AFUDC), including $8.2 million for
1994. Nuclear fuel expenditures for the same period are expected to be
approximately $53.5 million (excluding AFUDC), including $4.9 million for
1994. Such cash requirements are expected to be met from payments under the
Seabrook Power Contract and the Tax Allocation Agreement, except that to the
extent some or all of the capital expenditures and nuclear fuel expenditures
may have to be financed, the company expects to borrow under the Money Pool.
A substantial portion of the company's cash flow for the first few years is
expected to consist of payments made by NU to the company under a Tax
Allocation Agreement that the company entered into with NU at the time of
the acquisition. The amount of such payments will decrease over time but is
expected to remain substantial during the first few years when the company is
expected to incur losses for tax purposes due to accelerated tax depreciation
of Seabrook. The company received approximately $33 million from NU for the
period ended December 31, 1993 under this agreement. No assurance can be
given, however, as to the extent of the future benefits, if any, that will
actually accrue to the company under the Tax Allocation Agreement. (See
"Notes to Financial Statements" for further information regarding the Tax
Allocation Agreement.)
RESULTS OF OPERATIONS
The company has no historical results prior to June 5, 1992. Therefore, the
Statements of Income for the periods June 5, 1992 to December 31, 1992 and
January 1, 1993 to December 31, 1993 are not comparable.
Operating revenues represent amounts from PSNH under the terms of the
Seabrook Power Contract and billings to PSNH for decommissioning expense.
Operating expenses represent the costs incurred for the operation of Seabrook
including fuel expense.
The deferred Seabrook return represents the investment return not recovered
currently on the portion of the Seabrook investment not reflected in rate
base.
Income taxes included in other income represent the tax benefits related to
the portion of the Seabrook investment not reflected in rate base.
<PAGE>21
Interest on long-term debt and other interest reflects the interest expenses
on the debt incurred and assumed at the acquisition.
<PAGE>22
NORTH ATLANTIC ENERGY CORPORATION
- -----------------------------------------------------------------------------
SELECTED FINANCIAL DATA
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
1993 1992<F12>*
- -----------------------------------------------------------------------------
(Thousands of Dollars)
Operating Revenues . . . . . . . . $125,408 $ 78,444
======== ========
Operating Income . . . . . . . . . $ 33,718 $ 16,122
======== ========
Net Income . . . . . . . . . . . . $ 25,998 $ 12,703
======== ========
Total Assets . . . . . . . . . . . $900,821 $818,123
======== ========
Long-Term Debt . . . . . . . . . . $560,000 $560,000
======== ========
- -----------------------------------------------------------------------------
STATISTICS 1993 1992<F12>*
- -----------------------------------------------------------------------------
Gross Electric Utility Plant
December 31,
(Thousand of Dollars). . . . . . . $789,127 $774,920
======== ========
kWh Sales (Millions) . . . . . . . 3,218 1,268
======== ========
- -----------------------------------------------------------------------------
STATEMENTS OF QUARTERLY FINANCIAL DATA (Unaudited)
- -----------------------------------------------------------------------------
Quarter Ended
-------------------------------------------------------
1993 March 31 June 30<F13>** September 30 December 31
- -----------------------------------------------------------------------------
(Thousands of Dollars)
Operating Revenues . . $29,153 $29,952 $31,845 $34,458
======= ======= ======= =======
Operating Income . . . $ 6,541 $ 7,964 $ 9,657 $ 9,556
======= ======= ======= =======
Net Income . . . . . . $ 5,185 $ 5,985 $ 7,491 $ 7,337
======= ======= ======= =======
1992
- -----------------------------------------------------------------------------
Operating Revenues . . $ - $ 8,785 $32,439 $37,220
======== ======= ======= =======
Operating Income . . . $ - $ 2,010 $ 6,988 $ 7,124
======== ======= ======= =======
Net Income . . . . . . $ - $ 1,119 $ 6,822 $ 4,762
======== ======= ======= =======
<F12> *The company began commercial operations on June 5, 1992. Information
presented for 1992 covers the period June 5, 1992 through December 31,
1992.
<F13>**In 1992, represents the period June 5, 1992 through June 30,
1992.
<PAGE>23
North Atlantic Energy Corporation
First Mortgage Bonds
--------------------
Trustee and Interest Paying Agent
United States Trust Company of New York
114 West 47th Street
New York, New York 10036
15.23% Notes
------------
Trustee and Interest Paying Agent
United States Trust Company of New York
114 West 47th Street
New York, New York 10036
Address General Correspondence in Care of:
Northeast Utilities Service Company
Investor Relations Department
P.O. Box 270
Hartford, Connecticut 06141-0270
Tel. (203) 665-5000
General Office
1000 Elm Street
P.O. Box 330
Manchester, New Hampshire 03105
_______________________________
<PAGE>
