UNITED STATES OF AMERICA
before the
SECURITIES AND EXCHANGE COMMISSION
)
IN THE MATTER OF )
)
THE CONNECTICUT LIGHT AND POWER )
COMPANY )
)
AND ) CERTIFICATE
) AS TO
WESTERN MASSACHUSETTS ELECTRIC ) CONSUMMATION
COMPANY ) OF
) TRANSACTION
)
File No. 70-8451 )
)
Public Utility Holding Company )
Act of 1935 )
)
Reference is hereby made to the Application/Declaration on Form U-1, as
amended (the "Declaration"), filed by The Connecticut Light and Power Company
("CL&P") and Western Massachusetts Electric Company with the Securities and
Exchange Commission (the "Commission") in the above-referenced proceeding.
Capitalized terms used herein and not otherwise defined are used as defined in
the Declaration.
On January 23, 1995, transactions were consummated (the "Consummated
Transactions") pursuant to which, inter alia, (i) CL&P's Issuing Partnership
(the "CL&P Issuing Partnership") issued and sold to the Underwriters
$100,000,000 in aggregate liquidation preference of its Preferred Partnership
Interests with a distribution rate of 9.30%, (ii) CL&P issued and delivered to
the CL&P Issuing Partnership $103,100,000 in principal amount of related CL&P
Subordinated Debentures with an interest rate of 9.30%, and (iii) CL&P issued
and delivered the CL&P Guaranty with respect to the CL&P Issuing Partnership's
Preferred Partnership Interests.
Pursuant to the Public Utility Holding Company Act of 1935, as amended,
and Rule 24(a) thereunder, CL&P hereby certifies that the Consummated
Transactions have been carried out in accordance with the terms and conditions
of and for the purposes represented by the Declaration, and of the Orders of
the Commission set forth in Release No. 35-26216 (January 12, 1995) and Release
No. 35-26217 (January 13, 1995) permitting the Declaration to become effective.
Submitted with this Certificate are
(i) execution copies of the following exhibits to the Declaration,
which were previously submitted in draft form (exhibit designations
corresponding to those contained in the Declaration):
<PAGE>
-2-
A.1 Amended and Restated Limited Partnership Agreement of the CL&P
Issuing Partnership, including the related form of preferred
limited partnership units;
B.1 CL&P Indenture, including the related form of CL&P Subordinated
Debenture;
B.3 CL&P Guaranty; and
B.5 CL&P Underwriting Agreement;
(ii) the Supplemental Order of the CDPUC with respect to the
transactions of CL&P, which Supplemental Order supplements the Order of
the CDPUC previously filed as Exhibit D.2 to the Declaration and which is
hereby added to and made a part of such Exhibit D.2 as previously filed;
and
(iii) the "past tense" opinion of counsel to CL&P, together with
the supporting opinion of counsel referred to therein, in each case with
respect to the Consummated Transactions.
Dated: January 31, 1995
THE CONNECTICUT LIGHT AND POWER COMPANY
By_________________________/s/Richard J. Wasserman
Richard J. Wasserman
Day, Berry & Howard
CityPlace I
Hartford, Connecticut 06103-3499
Its Attorneys
<PAGE>
File No. 70-8451
INDEX TO EXHIBITS FILED WITH
CERTIFICATE AS TO CONSUMMATION OF TRANSACTION
of
THE CONNECTICUT LIGHT AND POWER COMPANY
A.1 Amended and Restated Limited Partnership Agreement of the CL&P
Issuing Partnership, including the related form of preferred
limited partnership units (execution copy).
B.1 CL&P Indenture, including the related form of CL&P Subordinated
Debenture (execution copy).
B.3 CL&P Guaranty (execution copy).
B.5 CL&P Underwriting Agreement (execution copy).
D.2 Supplemental Order of the CDPUC with respect to the transactions
of CL&P, which Supplemental Order supplements the Order of the
CDPUC previously filed as Exhibit D.2 to the Declaration and
which is hereby added to and made a part of such Exhibit D.2 as
previously filed.
"Past tense" opinion of counsel to CL&P, together with the
supporting opinion of counsel referred to therein, in each case
with respect to the Consummated Transactions.
The Connecticut Light and Power Company
Western Massachusetts Electric Company
File No. 70-8451
Exhibit A.1
(Execution Copy)
_________________________________________________________________
_________________________________________________________________
__________________________________________
AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
CL&P CAPITAL, L.P.
Dated as of January 23, 1995
__________________________________________
_________________________________________________________________
_________________________________________________________________
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I - DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II - CONTINUATION; NAME; PURPOSES; TERM; ETC. . . . . . . . . . . . 5
Section 2.01. Formation . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.02. Name, Place of Business and Registered Agent . . . . . 5
Section 2.03. Purposes . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.04. Term . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.05. Qualification in Other Jurisdictions . . . . . . . . . 6
Section 2.06. Admission of Preferred Partners . . . . . . . . . . . . 6
Section 2.07. Records . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.08. Withdrawal of Class A Limited Partner . . . . . . . . . 6
ARTICLE III - CAPITAL CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . 6
Section 3.01. Capital Contributions . . . . . . . . . . . . . . . . . 6
Section 3.02. Additional Capital Contributions . . . . . . . . . . . 7
Section 3.03. No Interest or Withdrawals . . . . . . . . . . . . . . 7
Section 3.04. Minimum Capital Account Balance of General Partner . . 7
Section 3.05. Partnership Interests . . . . . . . . . . . . . . . . . 7
Section 3.06. Interests . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE IV - CAPITAL ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . 7
Section 4.01. Capital Accounts . . . . . . . . . . . . . . . . . . . 7
Section 4.02. Compliance with Treasury Regulations . . . . . . . . . 7
ARTICLE V - ALLOCATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 5.01. Profits and Losses . . . . . . . . . . . . . . . . . . 8
Section 5.02. Allocation Rules . . . . . . . . . . . . . . . . . . . 8
Section 5.03. Adjustments to Reflect Changes in Interests . . . . . . 8
Section 5.04. Tax Allocations . . . . . . . . . . . . . . . . . . . . 8
Section 5.05. Qualified Income Offset . . . . . . . . . . . . . . . . 9
Section 5.06. Nonrecourse Debt . . . . . . . . . . . . . . . . . . . 9
Section 5.07. Minimum Allocations to General Partner . . . . . . . . 9
Section 5.08. Taxpayer Information . . . . . . . . . . . . . . . . . 9
ARTICLE VI - DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 6.01. Distributions . . . . . . . . . . . . . . . . . . . . . 9
Section 6.02. Certain Distributions Prohibited . . . . . . . . . . . 10
Section 6.03. Withholding. . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE VII - ACCOUNTING MATTERS; BANKING . . . . . . . . . . . . . . . . . 10
Section 7.01. Fiscal Year . . . . . . . . . . . . . . . . . . . . . . 10
Section 7.02. Certain Accounting Matters . . . . . . . . . . . . . . 10
Section 7.03. Banking . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 7.04. Right to Rely on Authority of General Partner . . . . . 11
Section 7.05. Tax Matters Partner . . . . . . . . . . . . . . . . . . 11
ARTICLE VIII - MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 8.01. Management . . . . . . . . . . . . . . . . . . . . . . 11
Section 8.02. Fiduciary Duty . . . . . . . . . . . . . . . . . . . . 12
Section 8.03. Specific Obligations of the General Partner . . . . . . 13
Section 8.04. Powers of the General Partner . . . . . . . . . . . . . 13
Section 8.05. Independent Affairs . . . . . . . . . . . . . . . . . . 14
Section 8.06. Meetings of the Partners . . . . . . . . . . . . . . . 14
Section 8.07. Net Worth of the General Partner . . . . . . . . . . . 15
Section 8.08. Restrictions on General Partner . . . . . . . . . . . . 15
<PAGE>
ARTICLE IX - LIABILITY AND INDEMNIFICATION . . . . . . . . . . . . . . . . 15
Section 9.01. Partnership Expenses and Liabilities . . . . . . . . . 16
Section 9.02. No Liability . . . . . . . . . . . . . . . . . . . . . 16
Section 9.03. Indemnification . . . . . . . . . . . . . . . . . . . . 16
ARTICLE X- WITHDRAWAL; TRANSFER RESTRICTIONS . . . . . . . . . . . . . . . 16
Section 10.01. Transfer by General Partner; Admission of Substituted
General Partner . . . . . . . . . . . . . . . . . . . . 17
Section 10.02. Withdrawal of Limited Partners . . . . . . . . . . . . 17
ARTICLE XI - DISSOLUTION OF THE PARTNERSHIP . . . . . . . . . . . . . . . . 17
Section 11.01. No Dissolution . . . . . . . . . . . . . . . . . . . . 17
Section 11.02. Events Causing Dissolution . . . . . . . . . . . . . . 17
Section 11.03. Notice of Dissolution . . . . . . . . . . . . . . . . . 18
ARTICLE XII - LIQUIDATION OF PARTNERSHIP INTERESTS . . . . . . . . . . . . 18
Section 12.01. Liquidation . . . . . . . . . . . . . . . . . . . . . . 18
Section 12.02. Termination . . . . . . . . . . . . . . . . . . . . . . 19
Section 12.03. Duty of Care . . . . . . . . . . . . . . . . . . . . . 19
Section 12.04. No Liability for Return of Capital . . . . . . . . . . 19
ARTICLE XIII - PREFERRED PARTNER INTERESTS . . . . . . . . . . . . . . . . 19
Section 13.01. Preferred Partner Interests . . . . . . . . . . . . . . 19
Section 13.02. Terms of All Preferred Partner Interests . . . . . . . 21
ARTICLE XIV - TRANSFERS . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 14.01. Transfers of Preferred Partner Interests . . . . . . . 26
Section 14.02. Transfer of Certificates . . . . . . . . . . . . . . . 26
Section 14.03. Persons Deemed Preferred Partners . . . . . . . . . . . 27
Section 14.04. Book Entry Interests . . . . . . . . . . . . . . . . . 27
Section 14.05. Notices to Clearing Agency . . . . . . . . . . . . . . 27
Section 14.06. Definitive Certificates . . . . . . . . . . . . . . . . 28
ARTICLE XV - GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 15.01. Power of Attorney . . . . . . . . . . . . . . . . . . . 28
Section 15.02. Waiver of Partition . . . . . . . . . . . . . . . . . . 29
Section 15.03. Notices . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 15.04. Entire Agreement . . . . . . . . . . . . . . . . . . . 29
Section 15.05. Waivers . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 15.06. Headings . . . . . . . . . . . . . . . . . . . . . . . 30
Section 15.07. Separability . . . . . . . . . . . . . . . . . . . . . 30
Section 15.08. Contract Construction . . . . . . . . . . . . . . . . . 30
Section 15.09. Counterparts . . . . . . . . . . . . . . . . . . . . . 30
Section 15.10. Benefit . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 15.11. Further Actions . . . . . . . . . . . . . . . . . . . . 30
Section 15.12. Governing Law . . . . . . . . . . . . . . . . . . . . . 30
Section 15.13. Amendments . . . . . . . . . . . . . . . . . . . . . . 30
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Exhibit A Form of Certificate
<PAGE>
AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
CL&P CAPITAL, L.P.
This AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT, dated as of
January 23, 1995, of CL&P Capital, L.P., a Delaware limited partnership (the
"Partnership"), is made by and among The Connecticut Light and Power Company
("CL&P"), as general partner of the Partnership, Northeast Utilities Service
Company ("NUSCO") as Class A Limited Partner, and the Persons (as defined
below) who become limited partners of the Partnership in accordance with the
provisions hereof.
WHEREAS, CL&P and NUSCO have heretofore formed a limited partnership
pursuant to the Delaware Act (as defined below) by filing a Certificate of
Limited Partnership (as defined below) with the Secretary of State of the State
of Delaware on November 16, 1994, and entering into a Limited Partnership
Agreement of the Partnership dated as of November 16, 1994 (the "Limited
Partnership Agreement");
WHEREAS, the parties hereto desire to continue the Partnership as a
limited partnership under the Delaware Act and to amend and restate the Limited
Partnership Agreement in its entirety.
NOW, THEREFORE, the parties hereto, intending to be legally bound hereby,
agree to amend and restate the Limited Partnership Agreement in its entirety as
follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement, each of the following terms shall have the
meaning set forth below (such meaning to be equally applicable to both singular
and plural forms of the terms so defined).
"Action" shall have the meaning set forth in Section 13.01(b).
"Affiliate" shall mean, with respect to the Person to which it refers, a
Person that directly or indirectly through one or more intermediaries, controls
or is controlled by, or is under common control with, such subject Person.
"Agreement" shall mean this Amended and Restated Limited Partnership
Agreement, as amended, modified, supplemented, or restated from time to time,
including, without limitation, by any Action establishing a series of Preferred
Partner Interests.
"Book Entry Interests" shall mean a beneficial interest in the
Certificates, ownership and transfers of which shall be made through book
entries by a Clearing Agency as described in Section 14.04.
"Business Day" shall mean any day that is not a Saturday, a Sunday, or a
day on which banking institutions in The City of New York, the State of
Connecticut, or the State of Delaware are authorized or required to close.
"Capital Account" shall have the meaning set forth in Section 4.01.
<PAGE>
"Certificate" shall mean a certificate substantially in the form attached
hereto as Exhibit A, evidencing a Preferred Partner Interest.
"Certificate of Limited Partnership" shall mean the Certificate of Limited
Partnership of the Partnership and any and all amendments thereto and
restatements thereof filed with the Secretary of State of the State of
Delaware.
"Change in 1940 Act Law" shall mean the occurrence of a change, effective
on or after the date of issuance of one or more series of Preferred Partner
Interests, in law or regulation or a change in official interpretation of law
or regulation by any legislative body, court, governmental agency, or
regulatory authority to the effect that the Partnership is or will be
considered an "investment company" which is required to be registered under the
1940 Act.
"Class A Limited Partner" shall mean NUSCO, in its capacity as a limited
partner of the Partnership.
"Clearing Agency" shall mean an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" shall mean a broker, dealer, bank, other
financial institution, or other Person for whom from time to time a Clearing
Agency effects book entry transfers and pledges of securities deposited with
the Clearing Agency.
"CL&P" shall mean The Connecticut Light and Power Company and its
successors.
"Code" shall mean the United States Internal Revenue Code of 1986 and
(unless the context requires otherwise) the rules and regulations promulgated
thereunder, as amended from time to time.
"Commission" shall mean the Securities and Exchange Commission.
"Covered Person" shall mean any Partner, the Special Representative, or
any Affiliate thereof, or any officers, directors, shareholders, partners,
members, employees, representatives or agents of a Partner, the Special
Representative or their respective Affiliates, or any employee or agent of the
Partnership or its Affiliates.
"Definitive Certificate" shall have the meaning set forth in Section
14.04.
"Delaware Act" shall mean the Delaware Revised Uniform Limited Partnership
Act, 6 Del.C. Section 17-101, et seq. as amended from time to time or any
successor statute thereto.
"Economic Risk of Loss" shall mean the "economic risk of loss" that any
Partner is treated as bearing under Treasury Regulation Section 1.752-2 with
respect to any Partnership liability.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Fiscal Year" shall have the meaning set forth in Section 7.01.
"General Partner" shall mean CL&P, in its capacity as general partner of
the Partnership, together with any successor thereto that becomes a general
partner of the Partnership pursuant to the terms of this Agreement.
<PAGE>
"Guaranty" shall mean the Payment and Guaranty Agreement dated as of
January 23, 1995, as amended or supplemented from time to time, of CL&P.
"Indemnified Person" shall mean the General Partner or the Special
Representative, any Affiliate thereof, or any officers, directors,
shareholders, partners, members, employees, representatives, or agents thereof,
or any employee or agent of the Partnership or its Affiliates.
"Indenture" shall mean the Indenture dated as of January 1, 1995, as
amended or supplemented from time to time, between CL&P and Bankers Trust
Company, as Trustee, and any supplemental Indentures thereto entered into by
CL&P pursuant to which Subordinated Debentures of CL&P are to be issued.
"Interest" shall mean the entire partnership interest of a Partner in the
Partnership at any particular time, including the right of such Partner to any
and all benefits to which a Partner may be entitled as provided in this
Agreement, together with the obligations of such Partner to comply with all of
the terms and provisions of this Agreement.
"Investment Company Act Event" shall mean, with respect to any series of
Preferred Partner Interests, the occurrence of a Change in 1940 Act Law without
the Partnership having received, within 45 days after such Change in 1940 Act
Law, an opinion of counsel (which may be regular counsel to CL&P or an
Affiliate, but not an employee thereof) experienced in such matters, to the
effect that CL&P and/or the Partnership has taken reasonable measures within
its discretion to avoid such Change in 1940 Act Law so that notwithstanding
such Change in 1940 Act Law, the Partnership is not required to be registered
as an "investment company" within the meaning of the 1940 Act.
"Limited Partners" shall mean the Class A Limited Partner, if any, and the
Preferred Partners.
"Liquidating Distributions" shall mean distributions of Partnership
property made upon a liquidation and dissolution of the Partnership as provided
in Article XII.
"Liquidating Trustee" shall have the meaning set forth in Section 12.01.
"Liquidation Distribution" shall mean the liquidation preference of each
series of Preferred Partner Interests as set forth in the Action for such
series.
"Loss Items" shall mean, with respect to any fiscal period, items of gross
Partnership loss, deduction, or expense for such period.
"Net Income" or "Net Loss" shall mean, with respect to any Fiscal Year,
the sum of the Partnership's (a) net gain or loss from the sale or exchange of
the Partnership's capital assets during such Fiscal Year, and (b) all other
items of income, gain, loss, deduction, and expense for such Fiscal Year that
are not included in (a). For purposes of determining the Capital Accounts as
set forth in Article IV, "Net Income" and "Net Loss" shall be computed in the
same manner as the Partnership computes its income for United States federal
income tax purposes, except that adjustments shall be made in accordance with
Treasury Regulation Section 1.704-1(b)(2)(iv), which adjustments shall include
any income which is exempt from United States federal income tax, all
Partnership losses and all expenses properly chargeable to the Partnership,
whether deductible or non-deductible and whether described in Section
705(a)(2)(B) of the Code, treated as so described pursuant to Treasury
Regulation Section 1.704-1(b)(2)(iv)(i), or otherwise, and a distribution in
<PAGE>
kind of Partnership property shall be treated as a taxable disposition of such
property for its fair market value (taking into account Section 7701(g) of the
Code) on the date of distribution.
"1940 Act" shall mean the Investment Company Act of 1940, as amended.
"NUSCO" shall mean Northeast Utilities Service Company and its successors.
"Notice of Redemption" shall have the meaning set forth in Section
13.02(b)(i).
"Partners" shall mean the General Partner and the Limited Partners.
"Partnership" shall mean CL&P Capital, L.P., a limited partnership formed
under the laws of the State of Delaware.
"Person" shall mean any individual, general partnership, limited
partnership, corporation, limited liability company, joint venture, trust,
business trust, cooperative, or association, and the heirs, executors,
administrators, legal representatives, successors, and assigns of such Person
where the context so admits.
"Preferred Partner" shall mean a limited partner of the Partnership who
holds one or more Preferred Partner Interests.
"Preferred Partner Distribution" shall have the meaning set forth in
Section 13.02(a)(1).
"Preferred Partner Interest Owner" shall mean, with respect to a Book
Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of
a Person maintaining an account with such Clearing Agency (directly as a
Clearing Agency Participant or as an indirect participant, in each case in
accordance with the rules of such Clearing Agency).
"Preferred Partner Interests" shall mean the Interests described in
Article XIII.
"Purchase Price" shall mean the amount paid to the Partnership for each
Preferred Partner Interest.
"Redemption Price" shall have the meaning set forth in Section
13.01(b)(v).
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Special Representative" shall have the meaning set forth in Section
13.02(d).
"Subordinated Debentures" shall mean the Junior Subordinated Deferrable
Interest Debentures of CL&P issued under the Indenture.
"Successor Securities" shall have the meaning set forth in Section
13.02(e).
"Tax Event" shall mean, with respect to any series of Preferred Partner
Interests, that the Partnership shall have received an opinion of counsel
(which may be regular tax counsel to CL&P or an Affiliate, but not an employee
thereof) experienced in such matters to the effect that, as a result of any
amendment to, or change (including any announced prospective change) in, the
<PAGE>
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein affecting taxation, or as a
result of any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or such interpretation or pronouncement is announced on or after the
date of issuance of such series of Preferred Partner Interests, there is more
than an insubstantial risk that (1) the Partnership is subject to United States
federal income tax with respect to interest received on the related
Subordinated Debentures or the Partnership will otherwise not be taxed as a
Partnership or (2) interest payable by CL&P to the Partnership on the related
Subordinated Debentures is not deductible for United States federal income tax
purposes or (3) the Partnership is subject to more than a de minimis amount of
other taxes, duties, or other governmental charges.
"Tax Matters Partner" shall have the meaning set forth in Section 7.05.
"Transfer" shall mean any transfer, sale, assignment, gift, pledge,
hypothecation, or other disposition or encumbrance of an interest in the
Partnership.
"Treasury Regulations" shall mean the final and temporary income tax
regulations, as well as the procedural and administrative regulations,
promulgated by the United States Department of the Treasury under the Code, as
amended from time to time.
"Trustee" shall mean Bankers Trust Company, or any successor Trustee under
the Indenture.
"Underwriting Agreement" shall mean the Underwriting Agreement dated
January 13, 1995, among the Partnership, CL&P and the underwriters named
therein with regard to the sale of Preferred Partner Interests and related
securities and any additional Underwriting Agreements entered into by the
Partnership and CL&P with regard to the sale of additional Preferred Partner
Interests and related securities.
ARTICLE II
CONTINUATION; NAME; PURPOSES; TERM; ETC.
Section 2.01. Formation. The parties hereto hereby join together to
continue a limited partnership which shall exist under and be governed by the
Delaware Act. The Partnership shall make any and all filings or disclosures
required under the laws of Delaware or otherwise with respect to its
continuation as a limited partnership, its use of a fictitious name, or
otherwise as may be required. The Partnership shall be a limited partnership
among the Partners solely for the purposes specified in Section 2.03 hereof,
and this Agreement shall not be deemed to create a partnership among the
Partners with respect to any activities whatsoever other than the activities
within the business purposes of the Partnership as specified in Section 2.03.
No Partner shall have any power to bind any other Partner with respect to any
matter except as specifically provided in this Agreement. No Partner shall be
responsible or liable for any indebtedness or obligation of any other Partner
incurred either before or after the execution of this Agreement. The assets of
the Partnership shall be owned by the Partnership as an entity, and no Partner
individually shall own any direct interest in the assets of the Partnership.
Section 2.02. Name, Place of Business and Registered Agent. The name of
the Partnership is "CL&P Capital, L.P." The principal place of business of the
Partnership shall be Berlin, Connecticut or at such other place as may be
<PAGE>
selected by the General Partner in its sole discretion. The name and address
of the agent for service of process for the Partnership is:
Corporation Service Company
1013 Centre Road
Wilmington, DE 19805
Section 2.03. Purposes. The sole purposes of the Partnership are to
issue and sell Interests in the Partnership, including, without limitation,
Preferred Partner Interests, and to use the proceeds of all sales of Interests
in the Partnership (as well as all or a portion of the capital contributions to
the Partnership) to purchase Subordinated Debentures issued by CL&P pursuant to
the Indenture and to effect other similar arrangements permitted by this
Agreement, and to engage in any and all activities necessary, convenient,
advisable, or incidental thereto. The Partnership shall not borrow money or
issue debt or mortgage or pledge any of its assets.
Section 2.04. Term. The Partnership was formed on November 16, 1994 and
shall continue without dissolution through November 16, 2093, unless sooner
dissolved as provided in Article XI hereof.
Section 2.05. Qualification in Other Jurisdictions. The General Partner
shall cause the Partnership to be qualified, formed, or registered under
assumed or fictitious name statutes or similar laws in any jurisdiction in
which the Partnership transacts business. The General Partner shall execute,
deliver and file any certificates (and any amendments and/or restatements
thereof) necessary for the Partnership to qualify to do business in any
jurisdiction in which the Partnership may wish to conduct business.
Section 2.06. Admission of Preferred Partners. Upon receipt by a Person
of a Certificate and payment for the Preferred Partner Interest being acquired
by such Person, which shall be deemed to constitute a request by such Person
that the books and records of the Partnership reflect its admission as a
Preferred Partner, such Person shall be admitted to the Partnership as a
Preferred Partner and shall become bound by this Agreement without execution of
this Agreement.
Section 2.07. Records. The name and mailing address of, and the amount
contributed to the capital of the Partnership by, each Partner shall be listed
on the books and records of the Partnership. The Partnership shall keep such
other records as are required by Section 17-305 of the Delaware Act. The
General Partner shall update the books and records from time to time as
necessary to accurately reflect the information therein.
Section 2.08. Withdrawal of Class A Limited Partner. Upon the admission
of at least one Preferred Partner as a limited partner of the Partnership, the
Class A Limited Partner shall be deemed to have withdrawn from the Partnership
as a limited partner of the Partnership, and upon such withdrawal, the Class A
Limited Partner shall have its capital contribution returned to it without any
interest or deduction and shall have no further interest in the Partnership.
ARTICLE III
CAPITAL CONTRIBUTIONS
Section 3.01. Capital Contributions. As of the date of this Agreement,
the General Partner has contributed the amount of $3,100,000 to the capital of
the Partnership and shall make any further contributions required to satisfy
its obligations under Section 3.04. Each Preferred Partner, or its predecessor
<PAGE>
in interest, will contribute to the capital of the Partnership the amount of
the Purchase Price for the Preferred Partner Interests held by it.
Section 3.02. Additional Capital Contributions. No Partner shall be
required to make any additional contributions or advances to the Partnership
except as provided in Section 3.04 or by law. The General Partner may make
additional capital contributions in excess of the amounts required under this
Agreement at any time.
Section 3.03. No Interest or Withdrawals. No interest shall accrue on
any capital contribution made by a Partner, and no Partner shall have the right
to withdraw or to be repaid any portions of its capital contributions so made,
except as specifically provided in this Agreement.
Section 3.04. Minimum Capital Account Balance of General Partner. At all
times throughout the term of the Partnership, the General Partner shall
maintain a Capital Account balance equal to at least 3% of the total positive
Capital Account balances for the Partnership. If necessary, the General
Partner shall immediately make additional contributions to satisfy those
requirements, which shall constitute additional capital contributions made by
the General Partner.
Section 3.05. Partnership Interests. Unless otherwise provided herein,
the percentage interests of the Partners shall be as determined in proportion
to the capital contributions of the Partners.
Section 3.06. Interests. Each Partner's respective Preferred Partner
Interests shall be set forth on the books and records of the Partnership. Each
Partner hereby agrees that its Interests shall for all purposes be personal
property. No Partner has an interest in specific Partnership property. The
Partnership shall not issue any additional interest in the Partnership after
the date hereof other than General Partner Interests or Preferred Partner
Interests.
ARTICLE IV
CAPITAL ACCOUNTS
Section 4.01. Capital Accounts. There shall be established on the books
of the Partnership a capital account (each a "Capital Account") for each
Partner that shall consist of the initial capital contribution to the
Partnership made by such Partner (or such Partner's predecessor in interest),
increased by: (a) any additional capital contributions made by such Partner
(or predecessor thereof), (b) the agreed value of any property subsequently
contributed to the capital of the Partnership by such Partner (or predecessor
thereof); and (c) Net Income allocated to any Partner (or predecessor thereof).
A Partner's Capital Account shall be decreased by: (a) Net Loss allocated to
any Partner (or predecessor thereof); and (b) any distributions made to such
Partner (or predecessor thereof). In addition to and notwithstanding the
foregoing, Capital Accounts shall be maintained at all times in accordance with
the capital account maintenance rules set forth in Treasury Regulation Section
1.704-1(b)(2)(iv).
Section 4.02. Compliance with Treasury Regulations. The foregoing
provisions and the other provisions of this Agreement relating to the
maintenance of Capital Accounts are intended to comply with Section 704(b) of
the Code and Treasury Regulation Section 1.704-1(b) and shall be interpreted
and applied in a manner consistent with such regulations. In the event that
the General Partner shall determine that it is prudent to modify the manner in
which the Capital Accounts, or any debits or credits thereto, are determined in
<PAGE>
order to comply with such regulations, the General Partner may make such
modification.
ARTICLE V
ALLOCATIONS
Section 5.01. Profits and Losses. Each fiscal period, the Net Income of
the Partnership shall be allocated (1) first, to the Preferred Partners, pro
rata in proportion to the number of Preferred Partner Interests held by each
Preferred Partner and at the distribution rate specified in the Action for each
series of Preferred Partner Interests, in an amount equal to the excess of (a)
the Preferred Partner Distributions accrued on such Preferred Partner Interests
since their date of issuance through and including the close of the current
fiscal period (whether or not paid) over (b) the amount of Net Income allocated
to the Preferred Partners pursuant to clause (1) of this Section 5.01 in all
prior fiscal periods; and (2) thereafter, to the General Partner. Except in
connection with the dissolution and liquidation of the Partnership, the Net
Loss of the Partnership shall be allocated each year to the General Partner.
Upon a dissolution and liquidation of the Partnership, Net Loss shall be
allocated to each Preferred Partner in an amount equal to the excess of (a)
such Preferred Partner's Capital Account over (b) such Preferred Partner's
Liquidation Distribution (as defined with respect to each Preferred Partner's
Interest in the Action establishing such Preferred Partner Interests), with any
remaining Net Loss being allocated to the General Partner. Notwithstanding the
foregoing, any and all costs and expenses of the Partnership paid (or required
to be paid) by the General Partner pursuant to Section 8.03(c) shall be
allocated each Fiscal Year to the General Partner.
Section 5.02. Allocation Rules. For purposes of determining the profits,
losses, or any other items allocable to any period, profits, losses, and any
such other items shall be determined on a daily, monthly, or other basis, as
determined by the General Partner in its sole and absolute discretion using any
method that is permissible under Section 706 of the Code and the Treasury
Regulations thereunder. The Partners are aware of the income tax consequences
of the allocations made by this Article V and hereby agree to be bound by the
provisions of this Article V in reporting their shares of Partnership income
and loss for income tax purposes.
Section 5.03. Adjustments to Reflect Changes in Interests.
Notwithstanding the foregoing, with respect to any Fiscal Year during which any
Partner's percentage interest in the Partnership changes, whether by reason of
the admission of a Partner, the withdrawal of a Partner, a non-pro rata
contribution of capital to the Partnership or any other event described in
Section 706(d)(1) of the Code and the Treasury Regulations issued thereunder,
allocations of the items of income, gain, loss, and deduction of the
Partnership shall be adjusted appropriately to take into account the varying
interests of the Partners during such Fiscal Year. The General Partner shall
consult with the Partnership's accountants and other tax advisors and shall
select the method of making such adjustments, which method shall be used
consistently thereafter.
Section 5.04. Tax Allocations. For United States federal, state, and
local income tax purposes, Partnership income, gain, loss, deduction, or credit
(or any item thereof) for each Fiscal Year shall be allocated to and among the
Partners in order to reflect the allocations made pursuant to the provisions of
this Article V for such Fiscal Year (other than allocations of items which are
not deductible or are excluded from taxable income), taking into account any
variation between the adjusted tax basis and book value of Partnership property
in accordance with the principles of Section 704(c) of the Code.
<PAGE>
Section 5.05. Qualified Income Offset. Notwithstanding any other
provision hereof, if any Partner unexpectedly receives an adjustment,
allocation, or distribution described in Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(4), (5), and (6) which creates or increases a deficit in
the Capital Account of such Partner (and, for this purpose, the existence of a
deficit shall be determined by increasing the Partner's Capital Account by any
amounts that the Partner is obligated to restore to the Partnership pursuant to
Treasury Regulation Section 1.704-1(b)(2)(ii)(c) or is deemed to be obligated
to restore pursuant to the penultimate sentence of Treasury Regulation Section
1.704-2(g)(1) and -2(i)(5), and reducing the Partner's Capital Account by the
items described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5),
and (6)), the next available gross income of the Partnership shall be allocated
to the Partners having such deficit balances, in proportion to the deficit
balances, until such deficit balances are eliminated as quickly as possible.
The provisions of this Section 5.05 are intended to constitute a "qualified
income offset" within the meaning of Treasury Regulation Section
1.704-1(b)(2)(ii)(d) and shall be interpreted and implemented as therein
provided.
Section 5.06. Nonrecourse Debt. While this Agreement does not provide
certain provisions required by Treasury Regulations Sections 1.704-1(b) and
1.704-2 because those provisions apply to transactions that are not expected to
occur, the Partners intend that the allocation under this Article V conform to
Treasury Regulations Sections 1.704-1(b) and 1.704-2 (including, without
limitation, the minimum gain chargeback, chargeback of partner nonrecourse debt
minimum gain and partner nonrecourse debt provisions of such Treasury
Regulations), and the General Partner shall make such changes in the
allocations under this Article V as it believes are reasonably necessary to
meet the requirements of such Treasury Regulations.
Section 5.07. Minimum Allocations to General Partner. Notwithstanding
any other provision hereof, other than the provisions of Section 5.05, the
General Partner shall be allocated at least 1% of all items of Net Income and
Net Losses for each Fiscal Year.
Section 5.08. Taxpayer Information. Any Person who holds Preferred
Partner Interests as a nominee for another Person is required to furnish to the
Partnership (a) the name, address, and taxpayer identification number of the
beneficial owner and the nominee; (b) information as to whether the beneficial
owner is (1) a Person that is not a United States Person, (2) a foreign
government, an international organization, or any wholly owned agency or
instrumentality of either of the foregoing, or (3) a tax-exempt entity; (c) the
amount and description of Preferred Partner Interests held, acquired, or
transferred for the beneficial owner; and (d) certain information including the
dates of acquisitions and transfers, means of acquisitions and transfers, and
acquisitions cost for purchases, as well as the amount of net proceeds from
sales.
ARTICLE VI
DISTRIBUTIONS
Section 6.01. Distributions. Preferred Partners shall receive periodic
distributions, if any, in accordance with the terms of the applicable Action
creating the series of Preferred Partner Interests held by them, as and when
determined by the General Partner, out of funds held by the Partnership and
legally available therefor. Subject to the rights of the holders of the
Preferred Partner Interests, the General Partner shall receive such
<PAGE>
distributions, if any, as may be determined from time to time by the General
Partner.
Section 6.02. Certain Distributions Prohibited. Notwithstanding anything
in this Agreement to the contrary, all Partnership distributions shall be
subject to the following limitations:
(a) No distribution shall be made to any Partner if, and to the extent
that, such distribution would not be permitted under Section 17-607 of the
Delaware Act or other applicable law.
(b) No distribution shall be made to any Partner to the extent that such
distribution, if made, would create or increase a deficit balance in the
Capital Account of such Partner.
(c) Other than Liquidating Distributions, no distribution of Partnership
property shall be made in kind. Notwithstanding anything in the Delaware Act
or this Agreement to the contrary, in the event of a Liquidating Distribution,
a Partner may be compelled in accordance with Section 12.01 to accept a
distribution of cash or any other asset in kind from the Partnership even if
the percentage of the asset distributed to it exceeds a percentage of that
asset which is equal to the percentage in which such Partner shares in
distributions from the Partnership.
Section 6.03. Withholding. The Partnership shall comply with all
withholding requirements under United States federal, state and local law. The
Partnership shall request, and the Partners shall provide to the Partnership,
such forms or certificates as are necessary to establish an exemption from
withholding with respect to each Partner, and any representations and forms as
shall reasonably be requested by the Partnership to assist it in determining
the extent of, and in fulfilling, its withholding obligations. The Partnership
shall file required forms with applicable jurisdictions and, unless an
exemption from withholding is properly established by a Partner, shall remit
amounts withheld with respect to the Partners to applicable jurisdictions. To
the extent that the Partnership is required to withhold and pay over any
amounts to any authority with respect to distributions or allocations to any
Partner, the amount withheld shall be deemed to be a distribution in the amount
of the withholding to the Partner. In the event of any claimed
overwithholding, Partners shall be limited to an action against the applicable
jurisdiction. If the amount withheld was not withheld from actual
distributions, the Partnership may reduce subsequent distributions by the
amount of such withholding.
ARTICLE VII
ACCOUNTING MATTERS; BANKING
Section 7.01. Fiscal Year. The fiscal year ("Fiscal Year") of the
Partnership shall be the calendar year, or such other year as is required by
the Code.
Section 7.02. Certain Accounting Matters. (a) At all times during the
existence of the Partnership, the General Partner shall keep, or cause to be
kept, full books of account, records and supporting documents, which shall
reflect in reasonable detail, each transaction of the Partnership. The books
of account shall be maintained on the accrual method of accounting, in
accordance with generally accepted accounting principles, consistently applied.
The Partnership shall use the accrual method of accounting for United States
federal income tax purposes. The books of account and the records of the
Partnership shall be examined by and reported upon as of the end of each Fiscal
<PAGE>
Year by a firm of independent certified public accountants selected by the
General Partner.
(b) The General Partner shall cause to be prepared and delivered to each
of the Partners, within 90 days after the end of each Fiscal Year of the
Partnership, annual financial statements of the Partnership, including a
balance sheet of the Partnership as of the end of such Fiscal Year, and the
related statements of income or loss and a statement indicating such Partner's
share of each item of Partnership income, gain, loss, deduction, or credit for
such Fiscal Year for income tax purposes.
(c) Notwithstanding anything in this Agreement to the contrary, the
General Partner may, to the maximum extent permitted by applicable law, keep
confidential from the Partners for such period of time as the General Partner
deems reasonable any information which the General Partner reasonably believes
to be in the nature of trade secrets or other information the disclosure of
which the General Partner in good faith believes is not in the best interest of
the Partnership or could damage the Partnership or which the Partnership or a
third party is required by law or by an agreement to keep confidential.
(d) The General Partner may make, or revoke, in its sole and absolute
discretion, any elections for the Partnership that are permitted under tax or
other applicable laws, including elections under Section 704(c) of the Code,
provided that the General Partner shall not make any elections pursuant to
Section 754 of the Code.
Section 7.03. Banking. The Partnership shall maintain one or more bank
accounts in the name and for the sole benefit of the Partnership. The sole
signatories for such accounts shall be designated by the General Partner.
Reserve cash, cash held pending the expenditure of funds for the business of
the Partnership, or cash held pending a distribution to one or more of the
Partners may be invested in any manner at the sole and absolute discretion of
the General Partner.
Section 7.04. Right to Rely on Authority of General Partner. No Person
that is not a Partner, in dealing with the General Partner, shall be required
to determine such General Partner's authority to make any commitment or engage
in any undertaking on behalf of the Partnership, or to determine any fact or
circumstance bearing upon the existence of the authority of the General
Partner.
Section 7.05. Tax Matters Partner. The "tax matters partner," as defined
in Section 6231 of the Code, of the Partnership shall be the General Partner
(the "Tax Matters Partner"). The Tax Matters Partner shall receive no
compensation from the Partnership for its services in that capacity. The Tax
Matters Partner is authorized to employ such accountants, attorneys, and agents
as it, in its sole and absolute discretion, deems necessary or desirable. Any
Person who serves as Tax Matters Partner shall not be liable to the Partnership
or to any Partner for any action it takes or fails to take as Tax Matters
Partner with respect to any administrative or judicial proceeding involving
"partnership items" (as defined in Section 6231 of the Code) of the
Partnership.
ARTICLE VIII
MANAGEMENT
Section 8.01. Management. (a) The General Partner shall have full and
exclusive authority with respect to all matters concerning the conduct of the
business and affairs of the Partnership, including without limitation the
<PAGE>
power, without the consent of the Limited Partners, to make all decisions it
deems necessary, advisable, convenient, or desirable to accomplish the purposes
of the Partnership. The Limited Partners shall have no right to remove or
replace the General Partner. The acts of the General Partner acting alone
shall serve to bind the Partnership and shall constitute the acts of the
Partners.
(b) The Limited Partners in their capacity as such shall not take part in
the management, operation, or control of the business of the Partnership or
transact any business in the name of the Partnership. In addition, the Limited
Partners, in their capacity as such, shall not be agents of the Partnership and
shall not have the power to sign or bind the Partnership to any agreement or
document. The Limited Partners shall have the right to vote only with respect
to those matters specifically provided for in this Agreement. Notwithstanding
anything herein to the contrary, the Preferred Partners may exercise all rights
provided to them, if any, under the Indenture and the Guaranty.
(c) The General Partner is authorized and directed to use its best
efforts to conduct the affairs of, and to operate, the Partnership in such a
way that the Partnership would not be deemed to be an "investment company"
required to be registered under the 1940 Act or taxed as a corporation for
United States federal income tax purposes and so that the Subordinated
Debentures will be treated as indebtedness of CL&P for United States federal
income tax purposes. In this connection, the General Partner is authorized to
take any action not inconsistent with applicable law, the Certificate of
Limited Partnership, or this Agreement that does not materially adversely
affect the interests of holders of Preferred Partner Interests that the General
Partner determines in its sole and absolute discretion to be necessary or
desirable for such purposes.
Section 8.02. Fiduciary Duty. (a) To the extent that, at law or in
equity, an Indemnified Person has duties (including fiduciary duties) and
liabilities relating thereto to the Partnership or to any other Covered Person,
an Indemnified Person acting under this Agreement shall not be liable to the
Partnership or to any other Covered Person for its good faith reliance on the
provisions of this Agreement or the advice of counsel selected by the
Indemnified Person in good faith. The provisions of this Agreement, to the
extent that they restrict the duties and liabilities of an Indemnified Person
otherwise existing at law or in equity, are agreed by the parties hereto to
replace such other duties and liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein, (1) whenever a conflict
of interest exists or arises between Covered Persons, or (2) whenever this
Agreement or any other agreement contemplated herein or therein provides that
an Indemnified Person shall act in a manner that is, or provides terms that
are, fair and reasonable to the Partnership or any Partner, the Indemnified
Person shall resolve such conflict of interest, taking such action or providing
such terms, considering in each case the relative interest of each party
(including its own interest) to such conflict, agreement, transaction, or
situation, and the benefits and burdens relating to such interests, any
customary or accepted industry practices, the advice of counsel selected by the
Indemnified Person in good faith, and any applicable generally accepted
accounting practices or principles. In the absence of bad faith by the
Indemnified Person, the resolution, action, or term so made, taken, or provided
by the Indemnified Person shall not constitute a breach of this Agreement or
any other agreement contemplated herein or of any duty or obligation of the
Indemnified Person at law or in equity or otherwise.
(c) Whenever in this Agreement an Indemnified Person is permitted or
required to make a decision (1) in its "discretion" or under a grant of similar
<PAGE>
authority or latitude, the Indemnified Person shall be entitled to consider
only such interests and factors as it desires, including its own interests, and
shall have no duty or obligation to give any consideration to any interest of
or factors affecting the Partnership or any other Person, or (2) in its "good
faith" or under another express standard, the Indemnified Person shall act
under such express standard and shall not be subject to any other or different
standard imposed by this Agreement or other applicable law.
Section 8.03. Specific Obligations of the General Partner. The General
Partner hereby undertakes:
(a) to devote to the affairs of the Partnership so much of its time as
shall be necessary to carry on properly the Partnership's business and its
responsibilities hereunder;
(b) to cause the Partnership (i) to do, or refrain from doing, such acts
as shall be required by Delaware law in order to preserve the valid existence
of the Partnership as a Delaware limited partnership and to preserve the
limited liability of the Limited Partners, and (ii) to refrain from engaging in
any activity that is not consistent with the limited purposes of the
Partnership set forth in Section 2.03 hereof;
(c) to pay directly all (and the Partnership shall not be obligated to
pay, directly or indirectly, any) of the costs and expenses of the Partnership,
including without limitation costs and expenses relating to the organization of
and offering of limited partner interests in the Partnership and costs and
expenses relating to the operation of the Partnership. By way of example and
not of limitation, such costs and expenses include costs and expenses of
accountants, attorneys, statistical or bookkeeping services, computing or
accounting equipment, paying agent(s), registrar(s), transfer agent(s),
duplicating, travel, telephone, and costs and expenses incurred in connection
with the acquisition, financing, and disposition of Partnership assets; and
(d) to timely perform all its duties as General Partner, including its
duty to pay distributions to the Preferred Partners in accordance with Section
6.01 hereof.
Section 8.04. Powers of the General Partner. The General Partner shall
have the right, power and authority, in the management of the business and
affairs of the Partnership, to do or cause to be done any and all acts deemed
by the General Partner to be necessary or desirable to effectuate the business,
purposes, and objectives of the Partnership. Without limiting the generality
of the foregoing, the General Partner shall have the power and authority
without any further act, approval, or vote of any Partner to:
(a) cause the Partnership to issue Interests, including Preferred Partner
Interests, and determine classes and series thereof, in accordance with this
Agreement; provided, however, that the Partnership shall not create or issue
any Interests senior to Preferred Partner Interests;
(b) act as, or appoint another Person to act as, registrar and transfer
agent for the Preferred Partner Interests;
(c) establish a record date with respect to all actions to be taken
hereunder that require a record date to be established, including with respect
to allocations, distributions, and voting rights and declare distributions and
make all other required payments on General Partner, Class A Limited Partner
and Preferred Partner Interests as the Partnership's paying agent;
<PAGE>
(d) enter into and perform one or more Indentures and one or more
Underwriting Agreements and use the proceeds from the issuance of the Interests
to purchase the Subordinated Debentures, in each case on behalf of the
Partnership;
(e) bring and defend on behalf of the Partnership actions and proceedings
at law or in equity before any court or governmental, administrative, or other
regulatory agency, body, or commission or otherwise;
(f) employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;
(g) redeem each series of Preferred Partner Interests (which shall
constitute a return of capital and not a distribution of income) in accordance
with its terms and/or to the extent that the related series of Subordinated
Debentures is redeemed or reaches maturity; and
(h) execute all documents or instruments, perform all duties and powers,
and do all things for and on behalf of the Partnership in all matters
necessary, desirable, convenient, advisable or incidental to the foregoing.
The expression of any power or authority of the General Partner in this
Agreement shall not in any way limit or exclude any other power or authority
which is not specifically or expressly set forth in, or precluded by, this
Agreement.
Section 8.05. Independent Affairs. Any Partner or any Affiliate thereof
may engage in or possess an interest in any other business venture of whatever
nature and description, independently or with others, wherever located and
whether or not comparable to or in competition with the Partnership or the
General Partner, or any Affiliate thereof, and neither the Partnership nor any
of the Partners shall, by virtue of this Agreement, have any rights with
respect to, or interests in, such independent ventures or the income, profits,
or losses derived therefrom. No Partner or Affiliate thereof shall be
obligated to present any particular investment opportunity to the Partnership
even if such opportunity is of a character that, if presented to the
Partnership, could be taken by the Partnership, and any Partner or Affiliate
thereof shall have the right to take for its own account (individually or as a
Partner or fiduciary) or to recommend to others any such particular investment
opportunity.
Section 8.06. Meetings of the Partners. Meetings of the Partners of any
class or series or of all classes or series of the Partnership's Interests may
be called at any time by the Partners holding 10% in liquidation preference of
such class or series of Interests, or of all classes or series of Interests, as
the case may be, or as provided in any Action establishing a series of
Preferred Partner Interests. Except to the extent otherwise provided in any
such Action, the following provisions shall apply to meetings of Partners.
(a) Notice of any meeting shall be given to all Partners not less than 10
Business Days nor more than 60 days prior to the date of such meeting.
Partners may vote in person or by proxy at such meeting. Whenever a vote,
consent, or approval of Partners is permitted or required under this Agreement,
such vote, consent, or approval may be given at a meeting of Partners or by
written consent.
(b) Each Partner may authorize any Person to act for it by proxy on all
matters in which a Partner is entitled to participate, including waiving notice
of any meeting, or voting or participating at a meeting. Every proxy must be
<PAGE>
signed by the Partner or its attorney-in-fact. No proxy shall be valid after
the expiration of 11 months from the date thereof unless otherwise provided in
the proxy. Every proxy shall be revocable at the pleasure of the Partner
executing it.
(c) Each meeting of Partners shall be conducted by the General Partner or
by such other Person that the General Partner may designate.
(d) Subject to the provisions of this Section 8.06, the General Partner,
in its sole and absolute discretion, shall establish all other provisions
relating to meetings of Partners, including notice of the time, place, or
purpose of any meeting at which any matter is to be voted on by any Partners,
waiver of any such notice, action, by consent without a meeting, the
establishment of a record date, quorum requirements, voting in person or by
proxy, or any other matter with respect to the exercise of any such right to
vote; provided, however, that unless the General Partner has established a
lower percentage, a majority of the Partners entitled to vote thereat shall
constitute a quorum at all meetings of the Partners.
Section 8.07. Net Worth of the General Partner. By execution of this
Agreement, the General Partner represents and covenants that (a) as of the date
hereof and at all times during the existence of the Partnership it will
maintain a fair market value net worth of at least 10% of the total
contributions less redemptions to the Partnership, throughout the life of the
Partnership, in accordance with Rev. Proc. 92-88, 1992-2 C.B. 496, or such
other amount as may be required from time to time pursuant to any amendment,
modification, or successor to Rev. Proc. 92-88 (such net worth being computed
excluding any interest in, or receivable due from, the Partnership and
including any income tax liabilities that would become due by the General
Partner upon disposition by the General Partner of all assets included in
determining such net worth), and (b) it will not make any voluntary
dispositions of assets which would reduce the net worth below the amount
described in (a).
Section 8.08. Restrictions on General Partner. So long as any series of
Subordinated Debentures are held by the Partnership, the General Partner,
unless so directed by the Special Representative, shall not (1) direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee, or executing any trust or power conferred on the Trustee with
respect to such series, (2) waive any past default which is available under the
Indenture, (3) exercise any right to rescind or annul a declaration that the
principal of all of a series of Subordinated Debentures shall be due and
payable or (4) consent to any amendment, modification, or termination of the
Indenture, or to a supplemental indenture under the Indenture where such
consent shall be required, without, in each case, obtaining the prior approval
of the holders of not less than 66 2/3% of the aggregate stated liquidation
preference of all series of Preferred Partner Interests affected thereby,
acting as a single class; provided, however, that where a consent under the
Indenture would require the consent of each holder affected thereby, no such
consent shall be given by the General Partner without the prior consent of each
holder of all series of Preferred Partner Interests affected thereby. The
General Partner shall not revoke any action previously authorized or approved
by a vote of any series of Preferred Partner Interests. The General Partner
shall notify all holders of such Preferred Partner Interests of any notice of
default received from the Trustee with respect to such series of Subordinated
Debentures.
ARTICLE IX
LIABILITY AND INDEMNIFICATION
<PAGE>
Section 9.01. Partnership Expenses and Liabilities.
(a) Except as provided in the Delaware Act, the General Partner shall
have the liabilities of a partner in a partnership without limited partners to
Persons other than the Partnership and the other Partners.
(b) Except as otherwise expressly required by law, a Limited Partner, in
its capacity as such, shall have no liability in excess of (1) the amount of
its capital contributions to the Partnership, (2) its share of any assets and
undistributed profits of the Partnership, and (3) the amount of any
distributions wrongfully distributed to it.
Section 9.02. No Liability. Except as otherwise expressly provided in
Section 9.01(a) or by the Delaware Act, no Covered Person shall be liable to
the Partnership or to any other Partner for any act or omission performed or
omitted pursuant to the authority granted to it hereunder or by law, or from a
loss resulting from any mistake or error in judgment on its part or from the
negligence, dishonesty, fraud or bad faith of any employee, independent
contractor, broker or other agent of the Partnership, provided that such act or
omission, such mistake or error in judgment or the selection of such employee,
independent contractor, broker or other agent, as the case may be, did not
result from the willful misconduct, gross negligence or fraud of such Covered
Person. Any Covered Person shall be fully protected in relying in good faith
upon the records of the Partnership and upon such information, opinions,
reports or statements presented to the Partnership by any Person as to matters
the Covered Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable
care by or on behalf of the Partnership, including information, opinions,
reports or statements as to the value and amount of the assets, liabilities,
profits, losses, or any other facts pertinent to the existence and amount of
assets from which distributions to Partners might properly be paid.
Section 9.03. Indemnification. To the fullest extent permitted by
applicable law, except as set forth in Section 8.03(c), an Indemnified Person
shall be entitled to indemnification from the Partnership for any loss, damage
or claim incurred by such Indemnified Person by reason of any act or omission
performed or omitted by such Indemnified Person in good faith on behalf of the
Partnership and in a manner reasonably believed to be within the scope of
authority conferred on such Indemnified Person by this Agreement, except that
no Indemnified Person shall be entitled to be indemnified in respect of any
loss, damage or claim incurred by such Indemnified Person by reason of willful
misconduct, gross negligence or fraud with respect to such acts or omissions;
provided, however, that any indemnity under this Section 9.03 shall be provided
out of and to the extent of Partnership assets only, and except as otherwise
provided by the Delaware Act, no Covered Person shall have any personal
liability on account thereof. To the fullest extent permitted by applicable
law, expenses (including legal fees) incurred by an Indemnified Person in
defending any claim, demand, action, suit or proceeding shall, from time to
time, be advanced by the Partnership prior to the final disposition of such
claim, demand, action, suit or proceeding upon receipt by the Partnership of an
undertaking by or on behalf of the Indemnified Person to repay such amount if
it shall be determined that the Indemnified Person is not entitled to be
indemnified as authorized in this Section 9.03.
ARTICLE X
WITHDRAWAL; TRANSFER RESTRICTIONS
<PAGE>
Section 10.01. Transfer by General Partner; Admission of Substituted
General Partner. The General Partner may not Transfer its Interest (in whole
or in part) to any Person without the consent of all other Partners, provided
that the General Partner may, without the consent of any Partner, Transfer its
Interest to any of its direct or indirect wholly-owned subsidiaries.
Notwithstanding anything else herein, the General Partner may merge with or
into another Person, may permit another Person to merge with or into the
General Partner and may Transfer all or substantially all of its assets to
another Person if the General Partner is the survivor of such merger or the
Person into which the General Partner is merged or to which the General
Partner's assets are transferred is a Person organized under the laws of the
United States or any state thereof or the District of Columbia and the General
Partner shall have the right to admit the assignee or transferee of its
Interest which is permitted hereunder as a substituted or additional general
partner of the Partnership, without the consent of the Limited Partners. Any
such assignee or transferee of all or a part of the Interest of a General
Partner shall be deemed admitted to the Partnership as a general partner of the
Partnership immediately prior to the effective date of such Transfer, and such
additional or successor general partner is hereby authorized to and shall
continue the business of the Partnership without dissolution.
Section 10.02. Withdrawal of Limited Partners. A Preferred Partner may
not withdraw from the Partnership prior to the dissolution, liquidation, or
winding up of the Partnership except upon the assignment of its Preferred
Partner Interests (including any redemption, repurchase, exchange, or other
acquisition by the Partnership), as the case may be, in accordance with the
provisions of this Agreement. Any Person who has been assigned one or more
Interests shall provide the Partnership with a completed Form W-8 or such other
documents or information as are requested by the Partnership for tax reporting
purposes. A withdrawing Preferred Partner shall not be entitled to receive any
distribution and shall not otherwise be entitled to receive the fair value of
its Preferred Partner Interest except as otherwise expressly provided in this
Agreement.
ARTICLE XI
DISSOLUTION OF THE PARTNERSHIP
Section 11.01. No Dissolution. The Partnership shall not be dissolved by
the admission of Partners in accordance with the terms of this Agreement. The
death, withdrawal, incompetency, bankruptcy, dissolution, or other cessation to
exist as a legal entity of a Limited Partner, or the occurrence of any other
event that terminates the Interest of a Limited Partner in the Partnership,
shall not in and of itself cause the Partnership to be dissolved and its
affairs wound up. To the fullest extent permitted by applicable law, upon the
occurrence of any such event, the General Partner, subject to the terms of this
Agreement, may, without any further act, vote, or approval of any Partner,
admit any Person to the Partnership as an additional or substitute Limited
Partner, which admission shall be effective as of the date of the occurrence of
such event, and the business of the Partnership shall be continued without
dissolution.
Section 11.02. Events Causing Dissolution. The Partnership shall be
dissolved and its affairs shall be wound up upon the occurrence of any of the
following events:
(a) The expiration of the term of the Partnership, as provided in Section
2.04 hereof;
<PAGE>
(b) The withdrawal, removal, or bankruptcy of the General Partner or
Transfer (other than a grant of a security interest) by the General Partner of
its entire Interest in the Partnership when the assignee is not admitted to the
Partnership as an additional or successor general partner in accordance with
Section 10.01 hereof, or the occurrence of any other event that results in the
General Partner ceasing to be a general partner of the Partnership under the
Delaware Act, provided, the Partnership shall not be dissolved and required to
be wound up in connection with any of the events specified in this clause (b)
if (1) at the time of the occurrence of such event there is at least one
remaining general partner of the Partnership who is hereby authorized to,
agrees to, and does carry on the business of the Partnership, or (2) within 90
days after the occurrence of such event, a majority in Interest of the
remaining Partners (or such greater percentage in Interest as is required by
the Delaware Act) agree in writing to continue the business of the Partnership
and to the appointment, effective as of the date of such event, if required, of
one or more successor general partners of the Partnership;
(c) The entry of a decree of judicial dissolution under Section 17-802 of
the Delaware Act;
(d) The written consent of the General Partner and all of the Preferred
Partners; or
(e) If a Tax Event or an Investment Company Act Event has occurred,
pursuant to an Action of the General Partner so providing.
Section 11.03. Notice of Dissolution. Upon the dissolution of the
Partnership, the General Partner shall promptly notify the Partners of such
dissolution.
ARTICLE XII
LIQUIDATION OF PARTNERSHIP INTERESTS
Section 12.01. Liquidation. Upon dissolution, liquidation or winding up
of the Partnership, the General Partner, or, in the event that the dissolution,
liquidation or winding up is caused by an event described in Section 11.02(b)
and there is no other general partner of the Partnership, a Person or Persons
who may be approved by Preferred Partners holding not less than a majority in
liquidation preference of the Preferred Partner Interests, as liquidating
trustee (the "Liquidating Trustee"), shall immediately commence to wind up the
Partnership's affairs; provided, however, that a reasonable time shall be
allowed for the orderly liquidation of the assets of the Partnership and the
satisfaction of liabilities to creditors so as to enable the Partners to
minimize the normal losses attendant upon a liquidation. The Preferred
Partners shall continue to share profits and losses during liquidation in the
same proportions, as specified in Articles V and VI hereof, as before
liquidation. The proceeds of liquidation shall be distributed, as realized, in
the following order and priority:
(a) to creditors of the Partnership, including Preferred Partners who are
creditors, to the extent permitted by law, in satisfaction of the liabilities
of the Partnership (whether by payment or the making of reasonable provision
for payment thereof), other than (1) liabilities for which reasonable provision
for payment has been made and (2) liabilities for distributions to Partners;
(b) to the holders of Preferred Partner Interests of each series then
outstanding in accordance with the terms of the Action or Actions for such
series; and
<PAGE>
(c) to all Partners in proportion to their respective positive Capital
Account balances, after giving effect to all contributions, distributions, and
allocations for all periods.
Section 12.02. Termination. The Partnership shall terminate when all of
the assets of the Partnership have been distributed in the manner provided for
in this Article XII, and the Certificate of Limited Partnership shall have been
cancelled in the manner required by the Delaware Act.
Section 12.03. Duty of Care. The General Partner or the Liquidating
Trustee, as the case may be, shall not be liable to the Partnership or any
Partner for any loss attributable to any act or omission of the General Partner
taken in good faith in connection with the liquidation of the Partnership and
distribution of its assets in belief that such course of conduct was in
accordance with this Agreement and in the best interest of the Partnership.
The General Partner or the Liquidating Trustee, as the case may be, may consult
with counsel and accountants with respect to liquidating the Partnership and
distributing its assets and shall be justified in acting or omitting to act in
accordance with the written opinion of such counsel or accountants, provided
they shall have been selected with reasonable care.
Section 12.04. No Liability for Return of Capital. The General Partner and
its respective officers, directors, members, shareholders, employees,
representatives, agents, partners, and Affiliates shall not be personally
liable for the return of the contributions of any Partner to the Partnership.
No Limited Partner shall be obligated to restore to the Partnership any amount
with respect to a negative Capital Account. The General Partner shall be
obligated to restore to the Partnership any deficit balance in its Capital
Account upon the dissolution of the Partnership by the end of the Fiscal Year
of dissolution (or, if later, within 90 days after the date of such
dissolution).
ARTICLE XIII
PREFERRED PARTNER INTERESTS
Section 13.01. Preferred Partner Interests.
(a) The aggregate number of Preferred Partner Interests which the
Partnership shall have authority to issue is unlimited. Each series of
Preferred Partner Interests shall rank equally and all Preferred Partner
Interests shall rank senior to all other Interests in respect of the right to
receive distributions and the right to receive payments out of the assets of
the Partnership upon voluntary or involuntary dissolution and winding up of the
Partnership.
(b) The General Partner on behalf of the Partnership is authorized to
issue Preferred Partner Interests, in one or more series, having such
designations, rights, privileges, restrictions, and other terms and provisions,
whether in regard to distributions, return of capital, or otherwise, as may
from time to time be established in a written action or actions (each, an
"Action") of the General Partner providing for the issue of such series. In
connection with the foregoing, the General Partner is expressly authorized,
prior to issuance, to set forth in an Action or Actions providing for the issue
of such series, the following:
(1) The distinctive designation of such series which shall
distinguish it from other series;
<PAGE>
(2) The number of Preferred Partner Interests included in such
series;
(3) The Preferred Partner Distribution rate (or method of
determining such rate) for Preferred Partner Interests of such series and
the first date upon which such Preferred Partner Distribution shall be
payable; provided, however, that Preferred Partner Distributions shall be
payable on a monthly basis to the holders of the Preferred Securities of
such series as of a record date in each calendar month during which the
Preferred Securities of such series are outstanding;
(4) The amount or amounts which shall be paid out of the assets of
the Partnership to the holders of such series of Preferred Partner
Interests upon voluntary or involuntary dissolution and winding up of the
Partnership;
(5) The price or prices at which (the "Redemption Price"), the
period or periods within which, and the terms and conditions upon which
the Preferred Partner Interests of such series may be redeemed or
purchased, in whole or in part, at the option of the Partnership;
(6) The obligation, if any, of the Partnership to purchase or redeem
Preferred Partner Interests of such series pursuant to a sinking fund or
otherwise and the price or prices at which, the period or periods within
which and the terms and conditions upon which the Preferred Partner
Interests of such series shall be redeemed, in whole or in part, pursuant
to such obligation;
(7) The period or periods within which and the terms and conditions,
if any (including the price or prices or the rate or rates of conversion
or exchange and the terms and conditions of any adjustments thereof), upon
which the Preferred Partner Interests of such series shall be convertible
or exchangeable at the option of the Preferred Partner, or the
Partnership, into any other Interests or securities or other property or
cash or into any other series of Preferred Partner Interests;
(8) The voting rights, if any, of the Preferred Partner Interests of
such series in addition to those required by law or set forth herein, and
any requirement for the approval by the Preferred Partner Interest, or of
the Preferred Partner Interests of one or more series, or of both, as a
condition to specified Action or amendments to this Agreement; and
(9) Any other relative rights, powers, preferences, or limitations
of the Preferred Partner Interests of the series not inconsistent with
this Agreement or with applicable law.
In connection with the foregoing and without limiting the generality
thereof, the General Partner is hereby expressly authorized, without the vote
or approval of any other Partner, to take any Action to create under the
provisions of this Agreement a series of Preferred Partner Interests that was
not previously outstanding. Without the vote or approval of any other Partner,
the General Partner may execute, swear to, acknowledge, deliver, file, and
record whatever documents may be required in connection with the issue from
time to time of Preferred Partner Interests in one or more series as shall be
necessary or desirable to reflect the issue of such series. The General
Partner shall do all things it deems to be necessary or desirable to comply
with the Delaware Act and is authorized and directed to do all permissible
things it deems to be necessary or desirable in connection with any future
issuance, including compliance with any statute, rule, regulation, or guideline
of any federal, state, or other governmental agency or any securities exchange.
<PAGE>
Any Action or Actions taken by the General Partner pursuant to the
provisions of this paragraph (b) shall be deemed an amendment and supplement to
and part of this Agreement.
(c) Except as otherwise provided in this Agreement or in any Action in
respect of any series of the Preferred Partner Interests and as otherwise
required by law, all rights to the management and control of the Partnership
shall be vested exclusively in the General Partner.
(d) No holder of Interests shall be entitled as a matter of right to
subscribe for or purchase, or have any preemptive right with respect to, any
part of any new or additional issue of Interests of any class or series
whatsoever, or of securities convertible into any Interests of any class or
series whatsoever, whether now or hereafter authorized and whether issued for
cash or other consideration or by way of distribution. Any Person acquiring
Preferred Partner Interests shall be admitted to the Partnership as a Preferred
Partner upon compliance with Section 2.06.
Section 13.02. Terms of All Preferred Partner Interests. Notwithstanding
anything else in any Action to the contrary, all Preferred Partner Interests of
the Partnership regardless of series shall have the voting rights, preferences,
participating, optional and other special rights, and the qualifications,
limitations, or restrictions of, and other matters relating to, the Preferred
Partner Interests as set forth below in this Section 13.02.
(a) Distributions.
(1) The Preferred Partners shall be entitled to receive, to the
extent that the Partnership has cash on hand sufficient to permit such
payments and, as determined by the General Partner, funds legally
available therefor, cumulative preferential cash distributions ("Preferred
Partner Distributions") at a rate per annum established by the General
Partner, calculated on the basis of a 360-day year consisting of 12 months
of 30 days each, and for any period shorter than a full monthly
distribution period, Preferred Partner Distributions will be computed on
the basis of the actual number of days elapsed in such period, and payable
in United States dollars monthly in arrears on the last day of each
calendar month of each year. In the event that any date on which
Preferred Partner Distributions are payable is not a Business Day, then
payment of such Preferred Partner Distributions will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay) except that, if such Business Day is
in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and
effect as if made on such date. Such Preferred Partner Distributions will
be cumulative from the date of original issue whether or not there are
profits, surplus, or other funds of the Partnership legally available for
the payment of Preferred Partner Distributions, or whether they are
deferred.
(2) If distributions have not been paid, or set aside for payment,
in full on any series of Preferred Partner Interests, the Partnership may
not:
(A) pay, or set aside for payment, any distributions on any
other series of Preferred Partner Interests, unless the amount of any
distributions paid, or set aside for payment, on any Preferred
Partner Interests is paid on all Preferred Partner Interests then
<PAGE>
outstanding on a pro rata basis, on the date such distributions are
paid, or set aside for payment, so that
(i) (x) the aggregate amount of distributions paid on such
series of Preferred Partner Interests bears to (y) the aggregate
amount of distributions paid on all such Preferred Partner
Interests outstanding the same ratio as
(ii) (x) the aggregate of all accumulated arrears of
unpaid distributions in respect of such series of Preferred
Partner Interests bears to (y) the aggregate of all accumulated
arrears of unpaid distributions in respect of all such Preferred
Partner Interests outstanding;
(B) pay, or set aside for payment, any distribution on the
General Partner's Interest; or
(C) redeem, purchase or otherwise acquire any other Preferred
Partner Interests of such series or any other series then outstanding
or any of the General Partner's Interest;
until, in each case, such time as all accumulated and unpaid distributions
on all series of Preferred Partner Interests shall have been paid in full
for all distribution periods terminating on or prior to, in the case of
clauses (A) and (B), such payment and, in the case of clause (C), the date
of such redemption, purchase, or acquisition.
(b) Redemption Procedures.
(1) Notice of any redemption (a "Notice of Redemption") of the
Preferred Partner Interests will be given by the Partnership by mail or
delivery to each record holder of Preferred Partner Interests to be
redeemed not fewer than 30 nor more than 60 days prior to the date fixed
for redemption thereof, at a redemption price set forth in the related
Action plus an amount equal to accumulated and unpaid Preferred Partner
Distributions. For purposes of the calculation of the date of redemption
and the dates on which notices are given pursuant to this paragraph
(b)(i), a Notice of Redemption shall be deemed to be given on the day such
notice is first mailed by first-class mail, postage prepaid, or on the
date it was delivered in person, receipt acknowledged, to the holders of
such Preferred Partner Interests. Each Notice of Redemption shall be
addressed to the record holders of the Preferred Partner Interests at the
address of the holder appearing in the books and records of the
Partnership. Each Notice of Redemption may state that it is subject to
receipt by the Partnership of redemption monies on or before the date
fixed for redemption, and which notice shall be of no effect unless such
monies are so received prior to such date. No defect in the Notice of
Redemption or in the mailing or delivery thereof or publication of its
contents shall affect the validity of the redemption proceedings.
(2) The Partnership may not redeem any Preferred Partner Interests
unless all accumulated and unpaid distributions have been paid on all
Preferred Partner Interests for all monthly distribution periods
terminating on or prior to the date of redemption. In the case of a
partial redemption resulting from a Tax Event, the Partnership will (A)
cause the global certificates representing all of such series of Preferred
Partner Interests to be withdrawn from The Depository Trust Company or its
successor securities depository, (B) issue certificates in definitive form
representing such series of Preferred Partner Interests, and (C) redeem
<PAGE>
the series or portion of the series of Preferred Partner Interests subject
to such Tax Event. Subject to applicable law, CL&P or its subsidiaries
may at any time and from time to time purchase outstanding Preferred
Partner Interests by tender, in the open market, or by private agreement.
In the event that CL&P or its subsidiary surrenders any Preferred Partner
Interests to the Partnership, the Partnership will distribute, to or upon
order by CL&P, Subordinated Debentures of the corresponding series in
aggregate principal amount equal to the aggregate liquidation preference
of the Preferred Securities so surrendered. If a partial redemption of
outstanding Preferred Partner Interests would result in a delisting of a
series of Preferred Partner Interests from any national securities
exchange on which the series of Preferred Partner Interests is then
listed, the Partnership may then only redeem the series of Preferred
Partner Interests in whole.
(3) If Notice of Redemption shall have been given and payment shall
have been made by the Partnership to the record holders of the Preferred
Partner Interests, then upon the date of such payment, all rights of the
Preferred Partner Interest Owners or holders of such Preferred Partner
Interests so called for redemption will cease, except the right of the
holders of such securities to receive the Redemption Price, but without
interest. In the event that any date fixed for redemption of Preferred
Partner Interests is not a Business Day, then payment of the Redemption
Price payable on such date will be made on the next succeeding day which
is a Business Day (and without any interest or other payment in respect of
any such delay), except that, if such Business Day falls in the next
succeeding calendar year, such payment will be made on the immediately
preceding Business Day (in each case with the same force and effect as if
made on such day). In the event that payment of the Redemption Price in
respect of Preferred Partner Interests is not made either by the
Partnership or by CL&P pursuant to the Guaranty, distributions on such
Preferred Partner Interests will continue to accrue at the then applicable
rate, from the original redemption date to the date of payment, in which
case the actual payment date will be considered the date fixed for
redemption for purposes of calculating the Redemption Price.
(c) Liquidation Distribution. If, upon any liquidation, the Liquidation
Distribution on any series of Preferred Partner Interests can be paid only in
part because the Partnership has insufficient assets available to pay in full
the aggregate Liquidation Distribution on all Preferred Partner Interests, then
the amounts payable directly by the Partnership on such series of Preferred
Partner Interests and on all other series of Preferred Partner Interests shall
be paid on a pro rata basis, so that
(1) (A) the aggregate amount actually paid in respect of the
Liquidation Distribution on such series bears to (B) the aggregate amount
actually paid as liquidation distributions on all other Preferred Partner
Interests the same ratio as
(2) (A) the aggregate Liquidation Distribution on such series bears
to (B) the aggregate maximum liquidation distributions on all other
Preferred Partner Interests.
(d) Voting Rights. The Limited Partners shall not have any right to vote
on matters concerning the Partnership except as specifically set forth in this
Agreement, in the Guaranty, or as otherwise required by law. If (1) the
Partnership fails to pay distributions in full on any series of Preferred
Partner Interests for 18 consecutive months; (2) an Event of Default under the
Indenture occurs and is continuing; or (3) CL&P is in default on any of its
payment or other obligations under the Guaranty, then the holders of all series
<PAGE>
of the Preferred Partner Interests outstanding, acting as a single class, will
be entitled, by a vote of the majority of the aggregate stated liquidation
preference of outstanding Preferred Partner Interests, to appoint and authorize
a special representative (the "Special Representative") to enforce the
Partnership's creditor rights under the Subordinated Debentures and the
Indenture against CL&P and enforce the obligations undertaken by CL&P under the
Guaranty, including (but only after failure to pay distributions for 60
consecutive monthly distribution periods) to declare and pay distributions on
such series of Preferred Partner Interests, the General Partner agreeing to
execute and deliver such documents as may be necessary or desirable for the
Special Representative to enforce such rights and obligations. Notwithstanding
anything else herein, the Special Representative shall not be admitted as a
partner of the Partnership and shall have no liability for the debts,
obligations, or liabilities of the Partnership, except to the extent otherwise
required by applicable law in order for such Special Representative to enforce
the Partnership's rights under the Subordinated Debentures and the Indenture
and fulfill its other duties hereunder.
In furtherance of the foregoing, and without limiting the powers of any
Special Representative so appointed and for the avoidance of any doubt
concerning the powers of the Special Representative, any Special
Representative, in its own name and as trustee of an express trust, may
institute a proceeding, including, without limitation, any suit in equity, an
action at law, or other judicial or administrative proceeding, to enforce the
Partnership's creditor rights pursuant to the Indenture and the Guaranty
directly against CL&P or any other obligor in connection with such obligations
to the same extent as the Partnership and on behalf of the Partnership, and may
pursue such proceeding to judgment or final decree, and enforce the same
against CL&P or any other obligor in connection with such obligations and
collect, out of the property, wherever situated, of CL&P or any such other
obligor upon such obligations, the monies adjudged or decreed to be payable in
the manner provided by law.
For purposes of determining whether the Partnership has failed to pay
distributions in full for 18 consecutive monthly distribution periods,
distributions shall be deemed to remain in arrears, notwithstanding any
payments in respect thereof, until full cumulative distributions have been or
contemporaneously are declared and paid with respect to all monthly
distribution periods terminating on or prior to the date of payment of such
full cumulative distributions on all Preferred Partner Interests. Subject to
the requirements of applicable law, not later than 30 days after such right to
appoint a Special Representative arises, the General Partner will convene a
general meeting for the above purpose. If the General Partner fails to convene
such meeting within such 30-day period, the Preferred Partners who hold 10% of
the aggregate stated liquidation preference of the outstanding Preferred
Partner Interests will be entitled to convene such meeting. The provisions of
this Agreement relating to the convening and conduct of general meetings of
Partners will apply with respect to any such meeting. Any Special
Representative so appointed shall cease to act in such capacity immediately if
the Partnership (or CL&P pursuant to the Guaranty) shall have paid in full all
accumulated and unpaid distributions on the Preferred Partner Interests or such
default or breach, as the case may be, shall have been cured. Notwithstanding
the appointment of any such Special Representative, CL&P retains all rights
under the Indenture, including the right to extend the interest payment period
on the Subordinated Debentures.
If any proposed amendment of this Agreement provides for, or the General
Partner otherwise proposes to effect (pursuant to an Action or otherwise), any
action which would materially adversely affect the powers, preferences, or
special rights of any series of Preferred Partner Interests, then holders of
<PAGE>
such series of outstanding Preferred Partner Interests will be entitled to vote
on such amendment or action of the General Partner (but not on any other
amendment or action) and, in the case of an amendment which would equally
adversely affect the powers, preferences, or special rights of any other series
of Preferred Partner Interests, all holders of such series of Preferred Partner
Interests, shall vote together as a class on such amendment or action of the
General Partner (but not on any other amendment or action), and such amendment
or action shall not be effective except with the approval of Preferred Partners
holding not less than 66 2/3% of the aggregate stated liquidation preference of
such outstanding series of Preferred Partner Interests. Except as otherwise
provided under Section 11.02 or the Delaware Act, the Partnership will be
dissolved and wound up only with the consent of the holders of all outstanding
Preferred Partner Interests.
The powers, preferences, or special rights of any Preferred Partner
Interests will be deemed not to be adversely affected by the creation or issue
of, and no vote will be required for the creation or issuance of, any
additional series of Preferred Partner Interests or additional general partner
Interests.
Any required approval of Preferred Partner Interests may be given at a
separate meeting of such holders convened for such purpose, at a meeting of the
holders of all series of Preferred Partner Interests or pursuant to written
consent. The Partnership will cause a notice of any meeting at which holders
of any Preferred Partner Interests are entitled to vote, or of any matter upon
which action by written consent of such holders is to be taken, to be mailed to
each holder of Preferred Partner Interests. Each such notice will include a
statement setting forth (a) the date of such meeting or the date by which such
action is to be taken, (b) a description of any resolution proposed for
adoption at such meeting on which such holders are entitled to vote or of such
matter upon which written consent is sought, and (c) instructions for the
delivery of proxies or consents.
No vote or consent of the holders of the Preferred Partner Interests will
be required for the Partnership to redeem and cancel the Preferred Partner
Interests in accordance with this Agreement.
Notwithstanding that holders of Preferred Partner Interests are entitled
to vote or consent under any of the circumstances described above, any of the
Preferred Partner Interests that are owned by CL&P or any entity owned more
than 50% by CL&P, either directly or indirectly, shall not be entitled to vote
or consent and shall, for the purposes of such vote or consent, be treated as
if they were not outstanding.
(e) Mergers. The Partnership shall not consolidate, amalgamate, merge
with or into, or be replaced by, or convey, transfer, or lease its properties
and assets substantially as an entirety, to any corporation or other entity,
except with the approval of the General Partner and the holders of 66 2/3% in
aggregate stated liquidation preference of all outstanding Preferred Partner
Interests or as otherwise described below. The General Partner may, without
the consent of the holders of the Preferred Partner Interests, cause the
Partnership to consolidate, amalgamate, merge with or into, or be replaced by,
or convey, transfer, or lease its properties and assets substantially as an
entirety to, a corporation, a limited liability company, limited partnership,
trust, or other entity organized as such under the laws of any state of the
United States of America or the District of Columbia, provided that (1) such
successor entity either (A) expressly assumes all of the obligations of the
Partnership under the Preferred Partner Interests and the other obligations of
the Partnership or (B) substitutes for the Preferred Partner Interests other
securities having substantially the same terms as the Preferred Partner
<PAGE>
Interests (the "Successor Securities") so long as the Successor Securities
rank, as regards participation in the profits and assets of the successor
entity, at least as high as the Preferred Partner Interests rank, as regards
participation in the profits and assets of the Partnership, (2) CL&P confirms
in writing its obligations under the Guaranty with regard to the Successor
Securities, if any are issued, (3) such consolidation, amalgamation, merger,
replacement, conveyance, transfer, or lease does not cause the Preferred
Partner Interests or Successor Securities to be delisted by any national
securities exchange or other organization on which the Preferred Partner
Interests are then listed, (4) such merger, consolidation, amalgamation,
replacement, conveyance, transfer, or lease does not cause the Preferred
Partner Interests or Successor Securities to be downgraded by any "nationally
recognized statistical rating organization," as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Securities Act, (5) such
merger, consolidation, amalgamation, replacement, conveyance, transfer, or
lease does not adversely affect the powers, preferences, and special rights of
holders of Preferred Partner Interests or Successor Securities in any material
respect, (6) such successor entity has a purpose substantially identical to
that of the Partnership, and (7) prior to such merger, consolidation,
amalgamation, replacement, conveyance, transfer, or lease CL&P has received an
opinion of counsel (which may be regular counsel to CL&P or an Affiliate, but
not an employee thereof) experienced in such matters to the effect that (A)
holders of outstanding Preferred Partner Interests will not recognize any gain
or loss for United States federal income tax purposes as a result of the
merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease, (B) such successor entity will be treated as a partnership for United
States federal income tax purposes, (C) following such consolidation,
amalgamation, merger, replacement, conveyance, transfer, or lease, CL&P and
such successor entity will be in compliance with the 1940 Act without
registering thereunder as an "investment company," and (D) such merger,
consolidation, amalgamation, replacement, conveyance, transfer, or lease will
not adversely affect the limited liability of holders of Preferred Partner
Interests or Successor Securities.
ARTICLE XIV
TRANSFERS
Section 14.01. Transfers of Preferred Partner Interests. Preferred
Partner Interests may be freely transferred by a Preferred Partner in
accordance with the terms and conditions set forth in this Agreement. Any
transfer or purported transfer of any Interest not made in accordance with this
Agreement shall be null and void.
Section 14.02. Transfer of Certificates. The General Partner shall
provide for the registration of Certificates. Upon surrender for registration
of transfer of any Certificate, the General Partner shall cause one or more new
Certificates to be issued in the name of the designated transferee or
transferees. Every Certificate surrendered for registration of transfer shall
be accompanied by a written instrument of transfer and agreement to be bound by
the terms of this Agreement in form satisfactory to the General Partner duly
executed by the Preferred Partner or his attorney duly authorized in writing.
Each Certificate surrendered for registration of transfer shall be cancelled by
the General Partner. A transferee of a Certificate shall provide the
Partnership with a completed Form W-8 or such other documents or information as
are requested by the Partnership for tax reporting purposes and thereafter
shall be admitted to the Partnership as a Preferred Partner and shall be
entitled to the rights and subject to the obligations of a Preferred Partner
hereunder upon the receipt by such transferee of a Certificate. The transferor
of a Certificate shall cease to be a Limited Partner at the time that the
<PAGE>
transferee of the Certificate is admitted to the Partnership as a Preferred
Partner in accordance with this Section 14.02.
Section 14.03. Persons Deemed Preferred Partners. The Partnership may
treat the Person in whose name any Certificate shall be registered on the books
and records of the Partnership as the Preferred Partner and the sole holder of
such Certificate for purposes of receiving distributions and for all other
purposes whatsoever and, accordingly, shall not be bound to recognize any
equitable or other claims to or interest in such Certificate on the part of any
other Person, whether or not the Partnership shall have actual or other notice
thereof.
Section 14.04. Book Entry Interests. The Certificates, on original
issuance, will be issued in the form of a typewritten Certificate or
Certificates representing the Book Entry Interests to be delivered to The
Depository Trust Company, the initial Clearing Agency, by, or on behalf of, the
Partnership. Such Certificates shall initially be registered on the books and
records of the Partnership in the name of Cede & Co., the nominee of the
initial Clearing Agency, and no Preferred Partner Interest Owner will receive a
definitive Certificate representing such Preferred Partner Interest Owner's
interests in such Certificate, except as provided in Section 14.06. Unless and
until definitive, fully registered Certificates (the "Definitive Certificates")
have been issued to the Preferred Partner Interest Owners pursuant to Section
14.06:
(a) The provisions of this Section shall be in full force and effect;
(b) The Partnership and the General Partner shall be entitled to deal
with the Clearing Agency for all purposes of this Agreement (including the
payment of distributions on the Certificates and receiving approvals, votes, or
consents hereunder) and shall consider such clearing agency as the Preferred
Partner and sole holder of the Certificates and shall have no obligations to
the Preferred Partner Interest Owners;
(c) The rights of the Preferred Partner Interest Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Preferred Partner Interest
Owners and the Clearing Agency and/or the Clearing Agency Participants. Unless
or until the Definitive Certificates are issued pursuant to Section 14.06, the
initial Clearing Agency will make book entry transfers among the Clearing
Agency Participants and receive and transmit payments of distributions on the
Certificates to such Clearing Agency Participants;
(d) To the extent that the provisions of this Section conflict with any
other provisions of this Agreement, the provisions of this Section shall
control; and
(e) Whenever this Agreement requires or permits actions to be taken based
upon approvals, votes, or consents of a percentage of the Preferred Partners,
the Clearing Agency shall be deemed to represent such percentage only to the
extent that it has received instructions to such effect from the Preferred
Partner Interest Owners and/or Clearing Agency participants owning or
representing, respectively, such required percentage of the beneficial
interests in the Certificates and has delivered such instructions to the
General Partner.
Section 14.05. Notices to Clearing Agency. Whenever a notice or other
communication to the Preferred Partners is required under this Agreement,
unless and until Definitive Certificates shall have been issued pursuant to
Section 14.06, the General Partner shall give all such notices and
<PAGE>
communications specified herein to be given to the Preferred Partners to the
Clearing Agency, and shall have no obligations to the Preferred Partner
Interest Owners.
Section 14.06. Definitive Certificates. If (1) the Clearing Agency elects
to discontinue its services as securities depository and gives reasonable
notice to the Partnership and a successor Clearing Agency is not obtained by
the Partnership to act as securities depository, or (2) the Partnership elects
to terminate the book entry system through the initial Clearing Agency or any
successor Clearing Agency, then the Definitive Certificates shall be prepared
by the Partnership. Upon surrender of the typewritten Certificate or
Certificates representing the Book Entry Interests by the Clearing Agency,
accompanied by registration instructions, the General Partner shall cause the
Definitive Certificates to be delivered to the Preferred Partner Interest
Owners in accordance with the instructions of the Clearing Agency. The General
Partner shall not be liable for any delay in delivery of such instructions and
may conclusively rely on, and shall be protected in relying on, such
instructions. Any Person receiving a Definitive Certificate in accordance with
this Article XIV shall be admitted to the Partnership as a Preferred Partner
upon receipt of such Definitive Certificate. The Clearing Agency or the
nominee of the Clearing Agency, as the case may be, shall cease to be a Limited
Partner of the Partnership under this Section 14.06 at the time that at least
one additional Person is admitted to the Partnership as a Preferred Partner in
accordance with this Section 14.06. The Definitive Certificates shall be
printed, lithographed, or engraved or may be produced in any other manner as is
reasonably acceptable to the General Partner, as evidenced by its execution
thereof.
In the event that the Partnership exercises its option to redeem only a
portion of the Preferred Partner Interests of any series, the Partnership may
cause the Certificate or certificates representing the Book Entry Interests to
be withdrawn from the Clearing Agency and issue Definitive Certificates
representing the Preferred Partner Interests of such series. The General
Partner will appoint a registrar, transfer agent, and paying agent for
Preferred Partner Interests represented by Definitive Certificates.
Registration of transfers of Preferred Partner Interests represented by
Definitive Certificates will be effected without charge by or on behalf of the
Partnership, but upon payment of any tax or other governmental charges which
may be imposed in relation to it. The Partnership will not be required to
register or cause to be registered the transfer of Preferred Partner Interests
represented by Definitive Certificates after such Preferred Partner Interests
have been called for redemption.
ARTICLE XV
GENERAL
Section 15.01. Power of Attorney. (a) The Class A Limited Partner and
each Preferred Partner constitutes and appoints the General Partner and the
Liquidating Trustee as its true and lawful representative and attorney-in-fact,
in its name, place, and stead, to make, execute, sign, acknowledge, and deliver
or file (1) all instruments, documents, and certificates which may from time to
time be required by any law to effectuate, implement and continue the valid and
subsisting existence of the Partnership, (2) all instruments, documents, and
certificates that may be required to effectuate the dissolution and termination
of the Partnership in accordance with the provisions hereof and Delaware law,
(3) all other amendments of this Agreement or the Certificate of Limited
Partnership and other filings contemplated by this Agreement, including without
limitation amendments reflecting the withdrawal of the General Partner, or the
return, in whole or in part, of the contribution of any Partner, or the
<PAGE>
addition, substitution, or increased contribution of any Partner, or any action
of the Partners duly taken pursuant to this Agreement whether or not such
Partner voted in favor of or otherwise approved such action, and (4) any other
instrument, certificate, or document required from time to time to admit a
Partner, to effect its substitution as a Partner, to effect the substitution of
the Partner's assignee as a Partner, or to reflect any action of the Partners
provided for in this Agreement.
(b) The powers of attorney granted herein (1) shall be deemed to be
coupled with an interest, shall be irrevocable, and shall survive the death,
insanity, incompetency, or incapacity (or, in the case of a Partner that is a
corporation, association, partnership, limited liability company or trust,
shall survive the merger, dissolution, or other termination of existence) of
the Partner and (2) shall survive the assignment by the Partner of the whole or
any portion of his Interest, except that where the assignee of the whole or any
portion thereof has furnished a power of attorney, this power of attorney shall
survive such assignment for the sole purpose of enabling the General Partner
and the Liquidating Trustee to execute, acknowledge, and file any instrument
necessary to effect any permitted substitution of the assignee for the assignor
as a Partner and shall thereafter terminate. In the event that the appointment
conferred in this Section 15.01 would not constitute a legal and valid
appointment by any Partner under the laws of the jurisdiction in which such
Partner is incorporated, established, or resident, upon the request of the
General Partner or the Liquidating Trustee, such Partner shall deliver to the
General Partner or the Liquidating Trustee a properly authenticated and duly
executed document constituting a legal and valid power of attorney under the
laws of the appropriate jurisdiction covering the matters set forth in this
Section 15.01.
(c) The General Partner may require a power of attorney to be executed by
a transferee of a Partner as a condition of its admission as a substitute
Partner.
Section 15.02. Waiver of Partition. Each Partner hereby irrevocably
waives any and all rights that it may have to maintain an action for partition
(or any action in the nature of partition) of any of the Partnership's property
or assets.
Section 15.03. Notices. Any notice or communication to a Partner
permitted or required to be given hereunder shall be in writing and delivered
in person or mailed by first-class mail, postage prepaid. Any such notice or
communication shall be deemed given if in writing and delivered (1) on the date
it was delivered in person to a Partner, receipt acknowledged, at its address
appearing on the books and records of the Partnership, or (2) on the day it is
first mailed to a Partner by first class mail, postage prepaid.
Section 15.04. Entire Agreement. This Agreement, including the exhibits
annexed hereto and incorporated by reference herein, contains the entire
agreement of the parties hereto and supersedes all prior agreements and
understandings, oral or otherwise, among the parties hereto with respect to the
matters contained herein.
Section 15.05. Waivers. Except as otherwise expressly provided herein, no
purported waiver by any party of any breach by another party of any of his
obligations, agreements, or covenants hereunder, or any part thereof, shall be
effective unless made in a writing executed by the party or parties sought to
be bound thereby, and no failure to pursue or elect any remedy with respect to
any default under or breach of any provision of this Agreement, or any part
hereof, shall be deemed to be a waiver of any other subsequent similar or
different default or breach, or any election of remedies available in
<PAGE>
connection therewith, nor shall the acceptance or receipt by any party of any
money or other consideration due him under this Agreement, with or without
knowledge of any breach hereunder, constitute a waiver of any provision of this
Agreement with respect to such or any other breach.
Section 15.06. Headings. The section headings herein contained have been
inserted only as a matter of convenience of reference and in no way define,
limit, or describe the scope or intent of any provisions of this Agreement nor
in any way affect any such provisions.
Section 15.07. Separability. Each provision of this Agreement shall be
considered to be separable, and if, for any reason, any such provision or
provisions, or any part thereof, is determined to be invalid and contrary to
any existing or future applicable law, such invalidity shall not impair the
operation of, or affect, those portions of this Agreement which are valid, and
this Agreement shall be construed and enforced in all respects as if such
invalid or unenforceable provision or provisions had been omitted.
Section 15.08. Contract Construction. Whenever the content of this
Agreement permits, the masculine gender shall include the feminine and neuter
genders, and reference to singular or plural shall be interchangeable with the
other. References in this Agreement to particular sections of the Code or to
provisions of the Delaware Act shall be deemed to refer to such sections or
provisions as they may be amended after the date of this Agreement.
Section 15.09. Counterparts. This Agreement may be executed in one or
more counterparts and each of such counterparts for all purposes shall be
deemed to be an original, but all of such counterparts, when taken together,
shall constitute but one and the same instrument, binding upon all parties
hereto, notwithstanding that all of such parties may not have executed the same
counterpart.
Section 15.10. Benefit. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns,
but shall not be deemed for the benefit of creditors or any other Persons, nor
shall it be deemed to permit any assignment by a Partner of any of its rights
or obligations hereunder except as expressly provided herein.
Section 15.11. Further Actions. Each of the Partners hereby agrees that
it shall hereafter execute and deliver such further instruments and do such
further acts and things as may be required or useful to carry out the intent
and purposes of this Agreement and as are not inconsistent with the terms
hereof.
Section 15.12. Governing Law. This Agreement shall be governed by and
construed in accordance with the substantive laws of the State of Delaware,
without regard to conflicts of laws.
Section 15.13. Amendments. Except as otherwise expressly provided herein
or as otherwise required by law, this Agreement may only be amended by a
written instrument executed by the General Partner; provided, however, that any
amendment which would adversely affect the powers, preferences, or special
rights of any series of Preferred Partner Interests may be effected only as
permitted by the terms of such series of Preferred Partner Interests.
<PAGE>
SIGNATURES
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.
General Partner:
THE CONNECTICUT LIGHT AND POWER
COMPANY
By /s/John B. Keane
Name: John B. Keane
Title: Vice President and Treasurer
Class A Limited Partner,
solely to reflect its withdrawal from the Partnership:
NORTHEAST UTILITIES SERVICE COMPANY
By /s/John B. Keane
Name: John B. Keane
Title: Vice President and Treasurer
<PAGE>
Exhibit A
Certificate No. _____ CUSIP No. _____
Certificate Evidencing Preferred Partner Interests
of
CL&P Capital, L.P.
9.30% Cumulative Monthly Income Preferred Securities,
Series A
Liquidation preference $25 per Preferred Partner Interest
CL&P Capital, L.P., a Delaware limited partnership (the "Partnership"),
hereby certifies that Cede & Co. (the "Holder") is the registered owner of Four
Million (4,000,000) fully paid Preferred Partner Interests of the Partnership
designated the 9.30% Cumulative Monthly Income Preferred Securities, Series A
(liquidation preference $25 per Preferred Partner Interest) (the "Series A
Preferred Partner Interests") representing preferred limited partner interests
in the Partnership transferable on the books and records of the Partnership, in
person or by a duly authorized attorney, upon surrender of this Certificate
duly endorsed and in proper form for transfer. The powers, preferences and
special rights and limitations of the Series A Preferred Partner Interests are
set forth in, and this Certificate and the Series A Preferred Partner Interests
represented hereby are issued and shall in all respects be subject to the terms
and provisions of, the Amended and Restated Limited Partnership Agreement dated
as of January 23, 1995 of the Partnership as the same may, from time to time,
be amended (the "Partnership Agreement") authorizing the issuance of the Series
A Preferred Partner Interests and determining, along with any actions of the
General Partner of the Partnership as authorized under the Partnership
Agreement, the powers, preferences, and other special rights and limitations,
regarding distributions, voting, redemption, and otherwise and other matters
relating to the Series A Preferred Partner Interests. The Partnership will
furnish a copy of the Partnership Agreement to the Holder without charge upon
written request to the Partnership at its principal place of business or
registered office. The Holder is entitled to the benefits of the Payment and
Guaranty Agreement of The Connecticut Light and Power Company, dated as of
January 23, 1995 (the "Guaranty") relating to the Preferred Partner Interests,
and of the Indenture between The Connecticut Light and Power Company and
Bankers Trust Company, as Trustee, dated as of January 1, 1995 (the
"Indenture"), under and pursuant to which the related series of Subordinated
Debentures are issued and outstanding, in either case to the extent provided
therein. The Holder is further entitled to enforce such rights of the
Partnership under the Indenture to the extent provided therein and in the
Partnership Agreement. The Partnership will furnish a copy of the Guaranty and
the Indenture to the Holder without charge upon written request to the
Partnership at its principal place of business or registered office.
<PAGE>
The Holder, by accepting this Certificate, is deemed to have (1) agreed
that the Subordinated Debentures issued pursuant to the Indenture are
subordinate and junior in right of payment to all general liabilities of The
Connecticut Light and Power Company as and to the extent provided in the
Indenture and (2) agreed that the Guaranty is subordinate and junior in right
of payment to all general liabilities of The Connecticut Light and Power
Company. Upon receipt of this Certificate, the Holder is admitted to the
Partnership as a Preferred Partner, is bound by the Partnership Agreement and
is entitled to the benefits thereunder.
Capitalized terms used herein but not defined shall have the meaning given
them in the Partnership Agreement.
IN WITNESS WHEREOF, the Partnership has executed this Certificate this
____ day of ________________, 199__.
CL&P CAPITAL, L.P.
By The Connecticut Light and Power Company,
its General Partner
By_________________________________
Name:
Title:
<PAGE>
ACTION BY THE GENERAL PARTNER OF
CL&P CAPITAL, L.P.
CREATING THE 9.30% CUMULATIVE MONTHLY INCOME
PREFERRED SECURITIES, SERIES A
Dated as of January 23, 1995
Pursuant to Section 13.01 of the Amended and Restated Limited Partnership
Agreement of CL&P Capital, L.P. dated January 23, 1995 (as amended from time to
time, the "Partnership Agreement"), The Connecticut Light and Power Company
("CL&P"), as general partner (the "General Partner") of CL&P Capital, L.P. (the
"Partnership"), desiring to state the designations, rights, privileges,
restrictions, preferences, voting rights, and other terms and conditions of a
new series of Preferred Partner Interests, hereby authorizes and establishes
such new series of Preferred Partner Interests having the designations, rights,
privileges, restrictions, and other terms and provisions set forth below. Each
capitalized term used but not defined herein shall have the meaning set forth
in the Partnership Agreement.
(a) Designation. Four million (4,000,000) of the Preferred Partner
Interests of the Partnership, with an aggregate liquidation preference of
$100,000,000, and a liquidation preference of $25 per Preferred Partner
Interest, are hereby designated as "9.30% Cumulative Monthly Income Preferred
Securities, Series A" (hereinafter the "Series A Preferred Partner Interests").
The Certificates evidencing the Series A Preferred Partner Interests shall be
substantially in the form attached hereto as Exhibit A. The proceeds of the
Series A Preferred Partner Interests shall be loaned to CL&P in return for the
9.30% Subordinated Debentures, Series A, due 2044 of CL&P issued pursuant to an
Indenture dated as of January 1, 1995 between CL&P and Bankers Trust Company,
as Trustee (the "Indenture") and bearing interest at an annual rate equal to
the annual distribution rate on the Series A Preferred Partner Interests and
having certain payment and redemption provisions which correspond to the
payment and redemption provisions of the Series A Preferred Partner Interests
(the "Series A Debentures").
(b) Distributions on the Series A Preferred Partner Interests.
(1) The Preferred Partners who hold the Series A Preferred
Partner Interests shall be entitled to receive, to the extent set
forth in paragraph (b)(2) hereof, cumulative, preferential cash
distributions at a rate per annum of 9.30% of the stated liquidation
preference of $25 per Series A Preferred Partner Interest, calculated
in accordance with Section 13.02(a)(1) of the Partnership Agreement
("Series A Preferred Partner Distributions"). Series A Preferred
Partner Distributions will be payable in United States dollars
monthly in arrears on the last day of each calendar month of each
year; provided, however, that in the event that any date on which
Series A Preferred Partner Distributions are payable is not a
Business Day, then payment of such Series A Preferred Partner
Distributions will be made on the next succeeding day which is a
Business Day (and without any interest or other payment in respect of
any such delay) except that, if such Business Day is in the next
<PAGE>
succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force
and effect as if made on such date. The Series A Preferred Partner
Distributions will be cumulative from the date of original issue, and
the cumulative portion from such date to January 31, 1995 shall be
payable on January 31, 1995.
(2) Series A Preferred Partner Distributions shall be paid to
the extent that the Partnership has (x) funds on hand legally
available therefor, as determined by the General Partner, and (y)
cash on hand sufficient to permit such payments. Series A Preferred
Partner Distributions will be deferred if and for so long as CL&P
defers interest payments to the Partnership on the Series A
Debentures. Accrued and unpaid Series A Preferred Partner
Distributions will accrue additional distributions after the
scheduled payment date therefor ("Additional Distributions") in
respect thereof, to the extent permitted by law, at the distribution
rate per annum for the Series A Preferred Partner Interests. Such
Additional Distributions shall be payable at the time the related
deferred Series A Preferred Partner Distribution is paid, but in any
event by the end of such deferral period. Series A Preferred Partner
Distributions will be payable to the Series A Preferred Partners as
they appear on the books and records of the Partnership on the
relevant record dates, which will be one Business Day prior to the
relevant payment dates; provided, however, that if the Series A
Preferred Partner Interests are not held by a securities depositary,
the General Partner shall have the right to change such record dates.
(c) Redemption.
(1) The Series A Preferred Partner Interests are subject to
redemption at the option of the General Partner, in whole or in part,
from time to time, on or after January 31, 2000, at the redemption
price of $25 per Series A Preferred Partner Interest plus accumulated
and unpaid Series A Preferred Partner Distributions to the date fixed
for redemption, together with any accrued Additional Distributions
thereon (the "Redemption Price").
(2) Upon redemption or payment at maturity of the Series A
Debentures, the proceeds from such redemption or payment of the
Series A Debentures shall be applied to redeem the Series A Preferred
Partner Interests at the Redemption Price.
(3) If at any time after the issuance of the Series A Preferred
Partner Interests, an Investment Company Act Event shall occur and be
continuing, the General Partner shall (A) cause the Partnership to
redeem the Series A Preferred Partner Interests at the Redemption
Price, within 90 days following the occurrence of such Special Event,
or (B) dissolve the Partnership and cause the Partnership to
distribute the Series A Debentures to Holders of Series A Preferred
Partner Interests in liquidation of the Partnership within 90 days
following the occurrence of such Special Event; provided, however,
that in the case of clause (B) above, the Partnership shall have
received an opinion of counsel (which may be regular tax counsel to
the Partnership or an affiliate, but not an employee thereof) to the
effect that such Holders will not recognize any gain or loss for
United States federal income tax purposes as a result of such
distribution.
<PAGE>
(4) If at any time after the issuance of the Series A Preferred
Partner Interests, a Tax Event shall occur and be continuing, the
General Partner may (A) cause the Partnership to redeem the Series A
Preferred Partner Interests at the Redemption Price, within 90 days
following the occurrence of such Special Event, or (B) dissolve the
Partnership and cause the Partnership to distribute the Series A
Debentures to Holders of Series A Preferred Partner Interests in
liquidation of the Partnership within 90 days following the
occurrence of such Special Event; provided, however, that in the case
of clause (B) above, the Partnership shall have received an opinion
of counsel (which may be regular tax counsel to the Partnership or an
affiliate, but not an employee thereof) to the effect that such
Holders will not recognize any gain or loss for United States federal
income tax purposes as a result of such distribution.
(d) Liquidation Distribution.
(1) In the event of any voluntary or involuntary dissolution,
liquidation or winding up of the Partnership, holders of the Series A
Preferred Partner Interests at the time outstanding will be entitled
to receive out of the assets of the Partnership available for
distribution to holders of Preferred Partner Interests, after
satisfaction of liabilities to creditors as required by the Delaware
Act and before any distribution of assets is made to holders of the
general partner interests, but together with holders of every other
series of Preferred Partner Interests outstanding, an amount equal
to, in the case of holders of Series A Preferred Partner Interests,
the aggregate of the stated liquidation preference of $25 per Series
A Preferred Partner Interest plus accumulated and unpaid
distributions and Additional Distributions to the date of payment
(the "Liquidation Distribution").
(2) Notwithstanding the foregoing, the General Partner may
distribute the Series A Debentures to Holders of Series A Preferred
Partner Interests in liquidation of the Partnership pursuant to
paragraph (c)(3)(B) or (c)(4)(B) hereof. After the date fixed for
any such distribution, upon dissolution of the Partnership, (i) the
Series A Preferred Partner Interests will no longer be deemed to be
outstanding, (ii) DTC or its nominee, as the record Holder of the
Series A Preferred Partner Interests, will return the registered
global certificate or certificates representing the Series A
Preferred Partner Interests and will receive a registered global
certificate or certificates representing the Series A Debentures to
be delivered upon such distribution, and (iii) any certificates
representing Series A Preferred Partner Interests not held by DTC or
its nominee will be deemed to represent Series A Debentures having a
principal amount and accrued and unpaid interest equal to the
aggregate of the stated liquidation preference of, and accrued and
unpaid Distributions on, such Series A Preferred Partner Interests
until such certificates are presented to the General Partner or its
agent for transfer or reissuance.
(e) Voting Rights. The holders of the Series A Preferred Partner
Interests shall have no voting rights except as provided in the Partnership
Agreement.
(f) Withholding. All payments by the Partnership in respect of the
Series A Preferred Partner Interests will be made without withholding or
deduction on account of any present or future taxes, duties or assessments
<PAGE>
imposed by the United States or any state thereof, unless such withholding or
deduction is required by law.
(g) Subordination. The holders of Series A Preferred Partner Interests
are deemed, by acceptance of such Interests, to have (1) agreed that the Series
A Debentures issued pursuant to the Indenture are subordinate and junior in
right of payment to all general liabilities of CL&P as and to the extent
provided in the Indenture and (2) agreed that the Guaranty relating to the
Series A Preferred Partner Interests is subordinated and junior in right of
payment to all general liabilities of CL&P.
<PAGE>
IN WITNESS WHEREOF, the General Partner has executed this Action as of the
date and year first above written.
THE CONNECTICUT LIGHT AND POWER COMPANY,
as General Partner
By /s/ John B. Keane
Name: John B. Keane
Title: Vice President and Treasurer
<PAGE>
Exhibit A
Certificate No. _____ CUSIP No. _____
Certificate Evidencing Preferred Partner Interests
of
CL&P Capital, L.P.
9.30% Cumulative Monthly Income Preferred Securities,
Series A
Liquidation preference $25 per Preferred Partner Interest
CL&P Capital, L.P., a Delaware limited partnership (the "Partnership"),
hereby certifies that Cede & Co. (the "Holder") is the registered owner of Four
Million (4,000,000) fully paid Preferred Partner Interests of the Partnership
designated the 9.30% Cumulative Monthly Income Preferred Securities, Series A
(liquidation preference $25 per Preferred Partner Interest) (the "Series A
Preferred Partner Interests") representing preferred limited partner interests
in the Partnership transferable on the books and records of the Partnership, in
person or by a duly authorized attorney, upon surrender of this Certificate
duly endorsed and in proper form for transfer. The powers, preferences and
special rights and limitations of the Series A Preferred Partner Interests are
set forth in, and this Certificate and the Series A Preferred Partner Interests
represented hereby are issued and shall in all respects be subject to the terms
and provisions of, the Amended and Restated Limited Partnership Agreement dated
as of January 23, 1995 of the Partnership as the same may, from time to time,
be amended (the "Partnership Agreement") authorizing the issuance of the Series
A Preferred Partner Interests and determining, along with any actions of the
General Partner of the Partnership as authorized under the Partnership
Agreement, the powers, preferences, and other special rights and limitations,
regarding distributions, voting, redemption, and otherwise and other matters
relating to the Series A Preferred Partner Interests. The Partnership will
furnish a copy of the Partnership Agreement to the Holder without charge upon
written request to the Partnership at its principal place of business or
registered office. The Holder is entitled to the benefits of the Payment and
Guaranty Agreement of The Connecticut Light and Power Company, dated as of
January 23, 1995 (the "Guaranty") relating to the Preferred Partner Interests,
and of the Indenture between The Connecticut Light and Power Company and
Bankers Trust Company, as Trustee, dated as of January 1, 1995 (the
"Indenture"), under and pursuant to which the related series of Subordinated
Debentures are issued and outstanding, in either case to the extent provided
therein. The Holder is further entitled to enforce such rights of the
Partnership under the Indenture to the extent provided therein and in the
Partnership Agreement. The Partnership will furnish a copy of the Guaranty and
the Indenture to the Holder without charge upon written request to the
Partnership at its principal place of business or registered office.
<PAGE>
The Holder, by accepting this Certificate, is deemed to have (1) agreed
that the Subordinated Debentures issued pursuant to the Indenture are
subordinate and junior in right of payment to all general liabilities of The
Connecticut Light and Power Company as and to the extent provided in the
Indenture and (2) agreed that the Guaranty is subordinate and junior in right
of payment to all general liabilities of The Connecticut Light and Power
Company. Upon receipt of this Certificate, the Holder is admitted to the
Partnership as a Preferred Partner, is bound by the Partnership Agreement and
is entitled to the benefits thereunder.
Capitalized terms used herein but not defined shall have the meaning given
them in the Partnership Agreement.
IN WITNESS WHEREOF, the Partnership has executed this Certificate this
____ day of ________________, 199__.
CL&P CAPITAL, L.P.
By The Connecticut Light and Power Company,
its General Partner
By_________________________________
Name:
Title:
The Connecticut Light and Power Company
Western Massachusetts Electric Company
File No. 70-8451
Exhibit B.1
(Execution Copy)
_________________________________________________________________
_________________________________________________________________
INDENTURE
Dated as of January 1, 1995
By and Between
THE CONNECTICUT LIGHT AND POWER COMPANY
and
BANKERS TRUST COMPANY,
as Trustee
Providing for the Issuance of
Junior Subordinated Deferrable Interest Debentures in Series
and for
9.30% Junior Subordinated Deferrable Interest Debentures, Series A
_________________________________________________________________
_________________________________________________________________
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE. . . . . . . 1
Section 1.01 Definitions . . . . . . . . . . . . . . . . . . . . . 1
Section 1.02 Incorporation By Reference Of Trust Indenture Act . . 6
Section 1.03 Rules Of Construction . . . . . . . . . . . . . . . . 6
Section 1.04 Acts Of Holders . . . . . . . . . . . . . . . . . . . 6
ARTICLE 2
THE DEBENTURES; THE SERIES A DEBENTURES . . . . . . . 7
Section 2.01 Issue Of Debentures Generally . . . . . . . . . . . . 7
Section 2.02 Form Of The Series A Debentures; Denominations. . . . 8
Section 2.03 Payment Of Principal And Interest . . . . . . . . . . 9
Section 2.04 Execution And Authentication. . . . . . . . . . . . . 9
Section 2.05 Registrar And Paying Agent. . . . . . . . . . . . . . 10
Section 2.06 Paying Agent To Hold Money In Trust . . . . . . . . . 11
Section 2.07 Debentureholder Lists . . . . . . . . . . . . . . . . 11
Section 2.08 Transfer And Exchange . . . . . . . . . . . . . . . . 11
Section 2.09 Replacement Debentures. . . . . . . . . . . . . . . . 12
Section 2.10 Outstanding Debentures; Determinations Of Holders'
Action. . . . . . . . . . . . . . . . . . . . . . . . 12
Section 2.11 Temporary Debentures. . . . . . . . . . . . . . . . . 13
Section 2.12 Cancellation. . . . . . . . . . . . . . . . . . . . . 13
Section 2.13 Defaulted Interest. . . . . . . . . . . . . . . . . . 14
ARTICLE 3
REDEMPTION. . . . . . . . . . . . . . . 14
Section 3.01 Redemption; Notice To Trustee. . . . . . . . . . . . 14
Section 3.02 Selection Of Debentures To Be Redeemed . . . . . . . 14
Section 3.03 Notice Of Redemption . . . . . . . . . . . . . . . . 15
Section 3.04 Effect Of Notice Of Redemption . . . . . . . . . . . 15
Section 3.05 Deposit Of Redemption Price. . . . . . . . . . . . . 16
Section 3.06 Debentures Redeemed In Part. . . . . . . . . . . . . 16
ARTICLE 4
COVENANTS. . . . . . . . . . . . . . . 16
Section 4.01 Payment Of Debentures. . . . . . . . . . . . . . . . 16
Section 4.02 Prohibition Against Dividends, Etc. During An Event
Of Default Or An Extension Period. . . . . . . . . . 17
Section 4.03 SEC Reports. . . . . . . . . . . . . . . . . . . . . 17
Section 4.04 Compliance Certificates. . . . . . . . . . . . . . . 17
Section 4.05 Relationship With CL&P Capital . . . . . . . . . . . 18
Section 4.06 Further Instruments And Acts . . . . . . . . . . . . 18
Section 4.07 Payments For Consents. . . . . . . . . . . . . . . . 18
ARTICLE 5
SUCCESSOR CORPORATION. . . . . . . . . . . . 18
Section 5.01 When The Company May Merge, Etc. . . . . . . . . . . 18
ARTICLE 6
DEFAULTS AND REMEDIES. . . . . . . . . . . . 19
Section 6.01 Events Of Default. . . . . . . . . . . . . . . . . . 19
Section 6.02 Acceleration . . . . . . . . . . . . . . . . . . . . 20
Section 6.03 Other Remedies . . . . . . . . . . . . . . . . . . . 21
Section 6.04 Waiver Of Past Defaults. . . . . . . . . . . . . . . 21
Section 6.05 Control By Majority Or The Special Representatives . 21
<PAGE>
Section 6.06 Limitation On Suits. . . . . . . . . . . . . . . . . 21
Section 6.07 Rights Of Holders To Receive Payment . . . . . . . . 22
Section 6.08 Collection Suit By The Trustee . . . . . . . . . . . 22
Section 6.09 The Trustee May File Proofs Of Claim . . . . . . . . 22
Section 6.10 Priorities . . . . . . . . . . . . . . . . . . . . . 23
Section 6.11 Undertaking For Costs. . . . . . . . . . . . . . . . 23
Section 6.12 Waiver Of Stay, Extension, Or Usury Laws . . . . . . 23
ARTICLE 7
THE TRUSTEE . . . . . . . . . . . . . . 24
Section 7.01 Duties Of The Trustee. . . . . . . . . . . . . . . . 24
Section 7.02 Rights Of The Trustee. . . . . . . . . . . . . . . . 25
Section 7.03 Individual Rights Of The Trustee . . . . . . . . . . 25
Section 7.04 The Trustee's Disclaimer . . . . . . . . . . . . . . 25
Section 7.05 Notice Of Defaults . . . . . . . . . . . . . . . . . 26
Section 7.06 Reports By Trustee To Holders. . . . . . . . . . . . 26
Section 7.07 Compensation And Indemnity . . . . . . . . . . . . . 26
Section 7.08 Replacement Of Trustee . . . . . . . . . . . . . . . 27
Section 7.09 Successor Trustee By Merger. . . . . . . . . . . . . 28
Section 7.10 Eligibility; Disqualification. . . . . . . . . . . . 28
Section 7.11 Preferential Collection Of Claims Against The
Company. . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE;
DEFEASANCE OF CERTAIN OBLIGATIONS; UNCLAIMED MONIES . . . . 28
Section 8.01 Satisfaction And Discharge Of Indenture. . . . . . . 28
Section 8.02 Application By Trustee Of Funds Deposited For
Payment Of Debentures. . . . . . . . . . . . . . . . 29
Section 8.03 Repayment Of Monies Held By Paying Agent . . . . . . 29
Section 8.04 Return Of Monies Held By The Trustee And Paying
Agent Unclaimed For Three Years. . . . . . . . . . . 29
ARTICLE 9
AMENDMENTS. . . . . . . . . . . . . . . 30
Section 9.01 Without Consent Of Holders . . . . . . . . . . . . . 30
Section 9.02 With Consent Of Holders. . . . . . . . . . . . . . . 30
Section 9.03 Compliance With Trust Indenture Act. . . . . . . . . 31
Section 9.04 Revocation And Effect Of Consents, Waivers And
Actions. . . . . . . . . . . . . . . . . . . . . . . 31
Section 9.05 Notation On Or Exchange Of Debentures. . . . . . . . 32
Section 9.06 Trustee To Sign Supplemental Indentures. . . . . . . 32
Section 9.07 Effect Of Supplemental Indentures. . . . . . . . . . 32
ARTICLE 10
SUBORDINATION. . . . . . . . . . . . . . 32
Section 10.01 Debentures Subordinated To Senior Indebtedness . . . 32
Section 10.02 Priority And Payment Of Proceeds In Certain Events;
Remedies Standstill. . . . . . . . . . . . . . . . . 32
Section 10.03 Payments Which May Be Made Prior To Notice.. . . . . 33
Section 10.04 Rights Of Holders Of Senior Indebtedness Not To Be
Impaired . . . . . . . . . . . . . . . . . . . . . . 34
Section 10.05 Trustee May Take Action To Effectuate Subordination. 34
Section 10.06 Subrogation. . . . . . . . . . . . . . . . . . . . . 34
Section 10.07 Obligations Of Company Unconditional; Reinstatement. 35
Section 10.08 Trustee Entitled To Assume Payments Not Prohibited
In Absence Of Notice . . . . . . . . . . . . . . . . 35
Section 10.09 Right Of Trustee To Hold Senior Indebtedness . . . . 36
<PAGE>
ARTICLE 11
MISCELLANEOUS. . . . . . . . . . . . . . 36
Section 11.01 Trust Indenture Act Controls . . . . . . . . . . . . 36
Section 11.02 Notices. . . . . . . . . . . . . . . . . . . . . . . 36
Section 11.03 Communication By Holders With Other Holders. . . . . 37
Section 11.04 Certificate And Opinion As To Conditions Precedent . 37
Section 11.05 Statements Required In Certificate Or Opinion. . . . 37
Section 11.06 Severability Clause. . . . . . . . . . . . . . . . . 38
Section 11.07 Rules By Trustee, Paying Agent And Registrar . . . . 38
Section 11.08 Legal Holidays . . . . . . . . . . . . . . . . . . . 38
Section 11.09 Governing Law. . . . . . . . . . . . . . . . . . . . 38
Section 11.10 No Recourse Against Others . . . . . . . . . . . . . 39
Section 11.11 Successors . . . . . . . . . . . . . . . . . . . . . 39
Section 11.12 Multiple Original Copies Of This Indenture . . . . . 39
Section 11.13 No Adverse Interpretation Of Other Agreements. . . . 39
Section 11.14 Table Of Contents; Headings, Etc . . . . . . . . . . 39
Section 11.15 Benefits Of The Indenture. . . . . . . . . . . . . . 39
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
EXHIBIT A--FORM OF DEBENTURE
<PAGE>
<TABLE>
<CAPTION>
TRUST INDENTURE PROVISION OF
ACT SECTION INDENTURE
--------------- ------------
<S> <S> <S>
Section 310 (a)(1) 7.10
(a)(2) 7.10
(a)(3) Not Applicable
(a)(4) Not Applicable
(a)(5) Not Applicable
(b) 7.08; 7.10; 11.01
(c) Not Applicable
Section 311 (a) 7.11
(b) 7.11
(c) Not Applicable
Section 312 (a) 2.07
(b) 11.03
(c) 11.03
Section 313 (a) 7.06
(b)(1) Not Applicable
(b)(2) 7.06
(c) 7.06; 11.02
(d) 7.06
Section 314 (a) 4.03; 4.04; 11.02
(b) Not Applicable
(c)(1) 2.02; 11.04
(c)(2) 2.02; 11.04
(c)(3) Not Applicable
(d) Not Applicable
(e) 11.05
(f) Not Applicable
Section 315 (a) 7.01(2)
(b) 7.05; 11.02
(c) 7.01(1)
(d) 7.01(3)
(e) 6.11
Section 316 (a)(1)(A) 6.05
(a)(1)(B) 6.04
(a)(2) Not Applicable
(a)(last sentence) 2.10
(b) 6.07
(c) 1.04
Section 317 (a)(1) 6.08
(a)(2) 6.09
(b) 2.06
Section 318 (a) 11.01
</TABLE>
Note: This Cross-Reference Table shall not, for any purpose, be deemed
to be part of the Indenture.
<PAGE>
INDENTURE
INDENTURE, dated as of January 1, 1995 by and between The Connecticut
Light and Power Company, a Connecticut corporation (together with its
permitted successors and assigns, the "Company"), and Bankers Trust
Company, a New York corporation, as trustee (the "Trustee").
WHEREAS, the Company is the general partner of CL&P Capital, L.P., a
Delaware limited partnership, which intends to issue in series from time
to time its limited partner interests and to loan the proceeds thereof,
together with the investment by the Company in CL&P Capital, L.P., to
the Company.
WHEREAS, in order to evidence its intention to make such loans and to
accept the Debentures (as hereinafter defined) as evidence of such
loans, and its approval of the terms of the Series A Debentures (as
hereinafter defined), CL&P Capital, L.P. has joined in this Indenture.
WHEREAS, the Company has authorized the issuance of the Series A
Debentures to evidence its obligations with respect to a loan from CL&P
Capital, L.P. of the proceeds of a series of its preferred limited
partner interests designated 9.30% Cumulative Monthly Income Preferred
Securities, Series A, and the related investment by the Company in CL&P
Capital, L.P., and to provide therefor, the Company has duly authorized
the execution and delivery of this Indenture, all things necessary to
make the Series A Debentures, when duly issued and executed by the
Company and authenticated and delivered hereunder, the valid obligations
of the Company, and to make this Indenture a valid and binding agreement
of the Company, in accordance with its terms, having been done.
NOW THEREFORE:
The Company and the Trustee, intending to be legally bound hereby,
each agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the Holders of the securities issued
hereunder, including the Series A Debentures:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01 Definitions.
For purposes of this Indenture, each of the following terms shall have
the meaning set forth below:
"Act" has the meaning specified in Section 1.04 hereof.
"Additional Interest" means, with respect to the Series A Debentures,
any amounts which CL&P Capital would be required to pay as taxes,
duties, assessments, or governmental charges of whatever nature (other
than withholding taxes) imposed by the United States, or any other
taxing authority, with respect to the Series A Debentures. With respect
to any other series of Debentures, "Additional Interest" shall have the
meaning set forth in the supplemental indenture creating such series.
"Affiliate" of any specified Person means any other Person, directly
or indirectly, controlling or controlled by or under direct or indirect
<PAGE>
common control with such specified Person. When used with respect to
any Person, "control" means the power to direct the management and
policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the
foregoing.
"Bankruptcy Law" means Title 11, United States Code, or any similar
Federal or state law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company or
any committee thereof duly authorized to act on behalf of such Board.
"Business Day" means any day that is not a Saturday, a Sunday, or a
day on which banking institutions in The City of New York, the State of
Connecticut, or the State of Delaware are authorized or required to
close.
"Capital Lease Obligations" of a Person means any obligation which is
required to be classified and accounted for as a capital lease on the
face of a balance sheet of such Person prepared in accordance with GAAP.
"Capital Stock" means any and all shares, interests, rights to
purchase, warrants, options, participations, or other equivalents of or
interests in (however designated) corporate stock, including any
preferred stock.
"CL&P Capital" means CL&P Capital, L.P., a Delaware limited
partnership.
"Company" means The Connecticut Light and Power Company, a Connecticut
corporation, together with its permitted successors and assigns.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator, custodian, or similar official under any Bankruptcy Law.
"Debentureholder" or "Holder" means a Person in whose name a Debenture
is registered on the Registrar's books.
"Debentures" shall mean any of the securities of any series issued,
authenticated, and delivered under this Indenture.
"Default" means any event which is, or after notice or passage of
time, or both, would be, an Event of Default pursuant to Section 6.01
hereof.
"Event of Default" has the meaning specified in Section 6.01 hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Extension Period" means a period, up to 60 consecutive months, in
which the Company elects to extend the interest payment period on the
Debentures pursuant to Section 4.01(b) hereof; provided that no
Extension Period shall extend beyond the Stated Maturity date or the
date of redemption of any series of Subordinated Debentures.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board.
<PAGE>
"General Partner" means the Company, as the general partner of CL&P
Capital, or any successor general partner of CL&P Capital pursuant to
the Limited Partnership Agreement.
"Guaranty Agreement" means that certain Payment and Guaranty Agreement
issued by the Company to irrevocably and unconditionally agree to pay
Guaranty Payments (as defined in the Guaranty Agreement) to the holders
of the Preferred Securities.
"Holder" or "Debentureholder" means any Person in whose name a
Debenture is registered on the Registrar's books.
"Indebtedness" means, without duplication, (i) the principal of and
premium, if any, in respect of (A) indebtedness of the Company for money
borrowed and (B) indebtedness evidenced by securities, debentures,
bonds, or other similar instruments issued by the Company; (ii) all
Capital Lease Obligations of the Company; (iii) all obligations of the
Company issued or assumed as the deferred purchase price of property,
all conditional sale obligations of the Company, and all obligations of
the Company under any title retention agreement (but excluding trade
accounts payable arising in the ordinary course of business); (iv) all
obligations of the Company for the reimbursement of any obligor on any
letter of credit, banker's acceptance, security purchase facility, or
similar credit transaction (other than obligations with respect to
letters of credit securing obligations (other than obligations described
in (i) through (iii) above) entered into in the ordinary course of
business of the Company to the extent such letters of credit are not
drawn upon or, if and to the extent drawn upon, such drawing is
reimbursed no later than the third Business Day following receipt by the
Company of a demand for reimbursement following payment on the letter of
credit); (v) all obligations of the type referred to in clauses (i)
through (iv) of other Persons and all dividends of other Persons (other
than the Preferred Securities) for the payment of which, in either case,
the Company is responsible or liable as obligor, guarantor, or
otherwise; and (vi) all obligations of the type referred to in clauses
(i) through (v) of other Persons secured by any lien on any property or
asset of the Company (whether or not such obligation is assumed by the
Company), the amount of such obligation being deemed to be the lesser of
the value of such property or assets or the amount of the obligation so
secured; provided, however, that Indebtedness will not include
endorsements of negotiable instruments for collection in the ordinary
course of business.
"Indenture" means this indenture, as amended or supplemented from time
to time in accordance with the terms hereof, including the provisions of
the TIA that are deemed to be a part hereof.
"Issue Date" means, with respect to a series of Debentures, the date
on which the Debentures of such series are originally issued.
"Legal Holiday" has the meaning specified in Section 11.08 hereof.
"Limited Partnership Agreement" means the Amended and Restated Limited
Partnership Agreement of CL&P Capital dated as of January 23, 1995, as
it may be amended from time to time.
"Notice of Default" has the meaning specified in Section 6.01 hereof.
"Officer" means, with respect to any corporation, the Chairman of the
<PAGE>
Board, the Chief Executive Officer, the President, any Vice President,
the Treasurer, any Assistant Treasurer, the Secretary, or any Assistant
Secretary of such corporation.
"Officer's Certificate" means a written certificate containing the
applicable information specified in Sections 11.04 and 11.05 hereof,
signed in the name of the Company by any one of its Officers, and
delivered to the Trustee.
"Opinion of Counsel" means a written opinion containing the applicable
information specified in Sections 11.04 and 11.05 hereof, by legal
counsel who is reasonably acceptable to the Trustee.
"Paying Agent" has the meaning specified in Section 2.05 hereof.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company,
trust, unincorporated organization, government or any agency or
political subdivision thereof, or any other entity.
"Preferred Securities" means the limited partner interests issued from
time to time in series by CL&P Capital.
"Record Date", with respect to any series of the Debentures, means the
date set to determine the Holders of such series entitled to payment of
interest or principal or to vote, consent, make a request, or exercise
any other right associated with such series.
"Redemption Date", with respect to any Debenture to be redeemed, means
the date specified for the redemption of such Debenture in accordance
with the terms thereof and Article 3 hereof.
"Redemption Price", with respect to any Debenture to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture
and such Debenture.
"Register" has the meaning specified in Section 2.05 hereof.
"Registrar" has the meaning specified in Section 2.05 hereof.
"Regular Record Date", with respect to an interest payment on the
Debentures of a series, means the date set forth in the Debentures of
such series for the determination of Holders entitled to receive payment
of interest on the next succeeding interest payment date.
"SEC" or "Commission" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Indebtedness" means all Indebtedness, except for Indebtedness
that is by its terms subordinated to or pari passu with the Debentures.
Notwithstanding anything to the contrary in the foregoing, Senior
Indebtedness shall not include any Indebtedness between or among the
Company and any Affiliates.
"Series A Debentures" means any of the Company's 9.30% Junior
Subordinated Deferrable Interest Debentures, Series A issued under this
Indenture.
"Series A Preferred Securities" means the 9.30% Cumulative Monthly
<PAGE>
Income Preferred Securities, Series A, issued by CL&P Capital.
"Special Representative" means a special representative appointed by
the holders of the Preferred Securities pursuant to Section 13.02(d) of
the Limited Partnership Agreement.
"Stated Maturity", with respect to any Debenture, means the date
specified in the Debenture as the fixed date on which the principal of
the Debenture is due and payable.
"Subsidiary" means any corporation, association, partnership, or other
business entity of which more than 50% of the total voting power of
shares of Capital Stock or other interests (including partnership
interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers, or trustees
thereof is at the time owned or controlled, directly or indirectly, by
(i) the Company, (ii) the Company and one or more Subsidiaries, or (iii)
one or more Subsidiaries.
"Successor" has the meaning specified in Section 5.01 hereof.
"TIA" means the Trust Indenture Act of 1939, as amended and as in
effect on the date of the execution and delivery of this Indenture;
provided, however, that if the TIA is amended after such date, TIA
means, to the extent required by any such amendment, the TIA as so
amended.
"Trust Officer" means, when used with respect to the Trustee, the
chairman or vice-chairman of the board of directors, the chairman or
vice-chairman of the executive committee of the board of directors, the
president, any vice president, any assistant vice president, the
secretary, any assistant secretary, the treasurer, any assistant
treasurer, the cashier, any assistant cashier, any account officer or
assistant account officer, the controller and any assistant controller,
or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any
other officer to whom such matter is referred because of his or her
knowledge of and familiarity with the particular subject.
"Trustee" means the party named as the "Trustee" in the first
paragraph of this Indenture until a successor replaces it pursuant to
the applicable provisions of this Indenture and, thereafter, shall mean
such successor.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of
the United States of America (including any agency or instrumentality
thereof) for the payment of which the full faith and credit of the
United States of America is pledged and which are not callable at the
issuer's option.
"Voting Stock" means, with respect to a corporation, all classes of
Capital Stock then outstanding of such corporation normally entitled to
vote in elections of directors.
"Wholly Owned Subsidiary" means a Subsidiary all the Capital Stock of
which (other than directors' qualifying shares) is owned by the Company
or another Wholly Owned Subsidiary.
<PAGE>
Section 1.02 Incorporation By Reference Of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, such
provision is incorporated by reference in and made a part of this
Indenture. When so incorporated, the following TIA terms in such
provisions correspond to the terms used in this Indenture as follows:
The "Commission" means the SEC.
The "indenture securities" means the Debentures.
An "indenture security holder" means a Debentureholder.
The "indenture to be qualified" means this Indenture.
The "indenture trustee" or the "institutional trustee" means the
Trustee.
The "obligor" on the indenture securities means the Company and any
other obligor on the Debentures.
All other TIA terms used in this Indenture that are defined in the
TIA, either directly or by reference therein, or defined by SEC rule,
have the meanings assigned to them by such definitions.
Section 1.03 Rules Of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including, without limitation;
(5) words in the singular include the plural, and words in the plural
include the singular; and
(6) unless used with a particular Article, Section, or other
subdivision, "herein," "hereof," and other words of similar
import refer to this Indenture as a whole and not to any
particular Article, Section, or other subdivision.
Section 1.04 Acts Of Holders.
Any request, demand, authorization, direction, notice, consent,
waiver, or other action provided by this Indenture to be given or taken
by Holders, may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Holders in person or by an
agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such
instrument or instruments are delivered to the Trustee and, where it is
hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are
herein sometimes referred to as the "Act" of Holders signing such
instrument or instruments. Proof of execution of any such instrument or
of a writing appointing any such agent shall be sufficient for any
<PAGE>
purpose of this Indenture and conclusive in favor of the Trustee and the
Company, if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Trustee
deems sufficient.
The ownership of Debentures shall be proved by the Register.
Any request, demand, authorization, direction, notice, consent,
waiver, or other Act of the Holder of any Debenture shall bind every
future Holder of the same Debenture and the holder of every Debenture
issued upon the registration of transfer thereof or in exchange therefor
or in lieu thereof in respect of anything done, omitted, or suffered to
be done by the Trustee or the Company in reliance thereon, whether or
not notation of such action is made upon such Debenture.
If the Company solicits from the Holders any request, demand,
authorization, direction, notice, consent, waiver, or other Act, the
Company may, at its option, by or pursuant to a resolution of its Board
of Directors, fix in advance a Record Date for the determination of
Holders entitled to give such request, demand, authorization, direction,
notice, consent, waiver, or other Act, but the Company shall have no
obligation to do so. If such a Record Date is fixed, such request,
demand, authorization, direction, notice, consent, waiver, or other Act
may be given before or after such Record Date, but only Holders of
record at the close of business on such Record Date shall be deemed to
be Holders for the purposes of determining whether Holders of the
requisite proportion of outstanding Debentures have authorized or agreed
or consented to such request, demand, authorization, direction, notice,
consent, waiver, or other Act, and for that purpose the outstanding
Debentures shall be computed as of such Record Date.
ARTICLE 2
THE DEBENTURES; THE SERIES A DEBENTURES
Section 2.01 Issue Of Debentures Generally.
The aggregate principal amount of the Debentures which may be
authenticated and delivered under this Indenture is limited to the
aggregate stated liquidation preference of the Preferred Securities plus
the capital contributions to CL&P Capital by its General Partner.
The Debentures may be issued in one or more series as from time to
time shall be authorized by the Board of Directors.
The Debentures of each series and the Trustee's certificate of
authentication shall be substantially in the forms to be attached as
exhibits to this Indenture or the supplemental indenture providing for
their issuance, with such insertions, omissions, substitutions, and
other variations as are required or permitted by this Indenture, and may
have such letters, numbers, or other marks of identification or
designation and such legends or endorsements printed, lithographed, or
engraved thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Indenture, or as may be
required to comply with any law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any securities
exchange on which the Debentures may be listed, or to conform to usage.
<PAGE>
Each Debenture shall be dated the date of its authentication.
The several series of Debentures may differ from the Series A
Debentures, and as and between series, in respect of any or all of the
following matters:
(1) designation;
(2) date or dates of maturity, which may be serial;
(3) interest rate or method of determination of the interest rate and
whether Additional Interest will be payable;
(4) interest payment dates and the Regular Record Dates therefor;
(5) Issue Date;
(6) authorized denominations;
(7) the place or places for the payment of principal (and premium, if
any) and for the payment of interest;
(8) limitation upon the aggregate principal amount of Debentures of
the series which may be issued;
(9) the optional and mandatory redemption provisions, if any;
(10) provisions, if any, for any sinking or analogous fund with
respect to the Debentures of such series; and
(11) any other provisions expressing or referring to the terms and
conditions upon which the Debentures of such series are to be
issued under this Indenture which are not in conflict with the
provisions of this Indenture;
in each case as determined and specified by the Board of Directors. The
Trustee shall not authenticate and deliver Debentures of any series
(other than the Series A Debentures) upon initial issue unless the terms
and conditions of such series shall have been set forth in a
supplemental indenture entered into between the Company and the Trustee
as provided in Section 9.01 hereof.
Section 2.02 Form Of The Series A Debentures; Denominations.
The Series A Debentures and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A attached
hereto. The terms and provisions contained in the Series A Debentures,
as set forth in such Exhibit A, shall constitute, and are hereby
expressly made, a part of this Indenture. The Company and the Trustee,
by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby.
The Trustee shall authenticate and make available for delivery Series
A Debentures for original issue in the aggregate principal amount of
$103,100,000 to evidence the Company's obligation with respect to the
loan from CL&P Capital, upon a resolution of the Board of Directors and
a written order of the Company signed by two Officers of the Company,
but without any further action by the Company. Such order shall specify
the amount of the Series A Debentures to be authenticated and the date
on which the original issue of Debentures is to be authenticated and
<PAGE>
delivered. The aggregate principal amount of Series A Debentures
outstanding at any time may not exceed $103,100,000, except as provided
in Section 2.09 hereof.
The Series A Debentures shall be issuable only in registered form
without coupons and only in denominations of $25.00 and any integral
multiple thereof.
Section 2.03 Payment Of Principal And Interest.
The principal of and interest on the Debentures of any series, as well
as any premium thereon in the case of redemption thereof prior to
maturity, shall be payable at the office of the Paying Agent in the coin
or currency of the United States of America which at the time is legal
tender for public and private debts. Each Debenture shall be dated its
Issue Date. Interest on the Debentures shall be computed on the basis of
a 360-day year composed of twelve 30-day months.
The interest on any Debenture which is payable and is punctually paid
or duly provided for on any interest payment date for Debentures of that
series shall be paid to the person in whose name the Debenture is
registered at the close of business on the Regular Record Date therefor.
In the event that any Debenture of a particular series or portion
thereof is called for redemption, and the Redemption Date is subsequent
to the Regular Record Date with respect to any interest payment date and
prior to such interest payment date, interest on such Debenture will be
paid upon presentation and surrender of such Debenture to the Paying
Agent.
Section 2.04 Execution And Authentication.
The Debentures shall be executed on behalf of the Company by its Chief
Executive Officer, its President, or one of its Vice Presidents, under
its corporate seal imprinted or reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any
such Officer on the Debentures may be manual or facsimile.
Debentures bearing the manual or facsimile signatures of individuals
who were at any time the proper Officers of the Company shall bind the
Company, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of
such Debentures or did not hold such offices at the date of such
Debentures.
No Debenture shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such
Debenture a certificate of authentication duly executed by the Trustee
by manual signature of an authorized officer, and such certificate upon
any Debenture shall be conclusive evidence, and the only evidence, that
such Debenture has been duly authenticated and made available for
delivery hereunder.
The Trustee shall act as the initial authenticating agent. Thereafter,
the Trustee may appoint an authenticating agent. An authenticating
agent may authenticate Debentures whenever the Trustee may do so. Each
reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same
rights as a Paying Agent to deal with the Company or an Affiliate of the
Company.
<PAGE>
Section 2.05 Registrar And Paying Agent.
The Company shall maintain or cause to be maintained, within or
outside the State of Connecticut an office or agency where the
Debentures may be presented for registration of transfer or for exchange
(the "Registrar"), an office or agency where Debentures may be presented
or surrendered for purchase or payment (the "Paying Agent"), and an
office or agency where notices and demands to or upon the Company in
respect of the Debentures and this Indenture may be served. The
Registrar shall keep a register (the "Register") of the Debentures and
of their transfer and exchange. The Company may have one or more
co-Registrars and one or more additional Paying Agents. The term Paying
Agent includes any additional paying agent. The corporate trust office
of the Trustee at Four Albany Street, New York, New York 10006,
Attention: Corporate Trust Department, shall initially be the Registrar
and agent for service of notice or demands on the Company, and the
Company shall initially be the Paying Agent.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent, or co-Registrar (if not the Trustee or the
Company). The agreement shall implement the provisions of this
Indenture that relate to such agent. The Company shall give prompt
written notice to the Trustee of any change of location of such office
or agency. If at any time the Company shall fail to maintain or cause
to be maintained any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations,
surrenders, notices, and demands may be made or served at the address of
the Trustee set forth in Section 11.02 hereof. The Company shall notify
the Trustee of the name and address of any such agent. If the Company
fails to maintain a Registrar, Paying Agent, or agent for service of
notices or demands, the Trustee shall act as such and shall be entitled
to appropriate compensation therefor pursuant to Section 7.07 hereof.
The Company or any Affiliate of the Company may act as Paying Agent,
Registrar or co-Registrar, or agent for service of notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where the Debentures may be presented or surrendered
for any or all such purposes and may from time to time rescind such
designations. The Company will give prompt written notice to the
Trustee of any such designation or rescission and of any change in
location of any such other office or agency.
Section 2.06 Paying Agent To Hold Money In Trust.
Except as otherwise provided herein, prior to each due date of the
principal and interest on any Debenture, the Company shall deposit with
the Paying Agent a sum of money sufficient to pay such principal,
premium (if any), and interest so becoming due. The Company shall
require each Paying Agent (other than the Trustee or the Company) to
agree in writing that such Paying Agent shall hold in trust for the
benefit of Holders or the Trustee all money held by the Paying Agent for
the payment of principal, premium, if any, and interest on the
Debentures and shall notify the Trustee of any default by the Company in
making any such payment. At any time during the continuance of any such
default, the Paying Agent shall, upon the request of the Trustee,
forthwith pay to the Trustee all money so held in trust and account for
any money disbursed by it. The Company at any time may require a Paying
Agent to pay all money held by it to the Trustee and to account for any
money disbursed by it. Upon doing so, the Paying Agent shall have no
further liability for the money so paid over to the Trustee. If the
<PAGE>
Company, a Subsidiary, or an Affiliate of either of them acts as Paying
Agent, it shall segregate the money held by it as Paying Agent and hold
it as a separate trust fund.
Section 2.07 Debentureholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and
addresses of Debentureholders. If the Trustee is not the Registrar, the
Company shall cause to be furnished to the Trustee on or before the
Record Date for each interest payment date and at such other times as
the Trustee may request in writing, within five Business Days of such
request, a list in such form as the Trustee may reasonably require of
the names and addresses of Debentureholders, provided that during any
deferral period, such information will be provided every six months and
upon request of the Trustee.
Section 2.08 Transfer And Exchange.
When Debentures are presented to the Registrar or a co-Registrar with
a request to register the transfer or to exchange them for an equal
principal amount of Debentures of the same series of other authorized
denominations, the Registrar shall register the transfer or make the
exchange as requested if its requirements for such transactions are met.
To permit registrations of transfer and exchanges, the Company shall
execute and the Trustee shall authenticate Debentures, all at the
Registrar's request.
Every Debenture presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Trustee) be
duly endorsed, or be accompanied by a written instrument of transfer in
form satisfactory to the Company and the Registrar duly executed by the
Holder or his attorney duly authorized in writing.
The Company shall not charge a service charge for any registration of
transfer or exchange, but the Company may require payment of a sum
sufficient to pay all taxes, assessments, or other governmental charges
that may be imposed in connection with the transfer or exchange of the
Debentures from the Debentureholder requesting such transfer or exchange
(other than any exchange of a temporary Debenture for a definitive
Debenture not involving any change in ownership).
The Company shall not be required to make, and the Registrar need not
register, transfers or exchanges of (1) any Debenture for a period
beginning at the opening of business 15 days before the mailing of a
notice of redemption of Debentures and ending at the close of business
on the day of such mailing, or (2) any Debenture selected, called, or
being called for redemption, except, in the case of any Debenture to be
redeemed in part, the portion thereof not to be redeemed.
Section 2.09 Replacement Debentures.
If (1) any mutilated Debenture is surrendered to the Company or the
Trustee, or (2) the Company and the Trustee receive evidence to their
satisfaction of the destruction, loss, or theft of any Debenture, and
there is delivered to the Company and the Trustee such Debenture or
indemnity as may be required by them to save each of them harmless,
then, in the absence of notice to the Company or the Trustee that such
Debenture has been acquired by a bona fide purchaser, the Company shall
execute in exchange for any such mutilated Debenture or in lieu of any
<PAGE>
such destroyed, lost, or stolen Debenture, a new Debenture of like tenor
and principal amount, bearing a number not contemporaneously
outstanding, and the Trustee shall authenticate and make such new
Debenture available for delivery.
In case any such mutilated, destroyed, lost, or stolen Debenture has
become or is about to become due and payable, or is about to be redeemed
by the Company pursuant to Article 3 hereof, the Company in its
discretion may, instead of issuing a new Debenture, pay or purchase such
Debenture, as the case may be.
Upon the issuance of any new Debentures under this Section 2.09, the
Company may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the Trustee) in
connection therewith.
Every new Debenture issued pursuant to this Section 2.09 in lieu of
any mutilated, destroyed, lost, or stolen Debenture shall constitute an
original additional contractual obligation of the Company whether or not
the mutilated, destroyed, lost, or stolen Debenture shall be at any time
enforceable by anyone, and shall be entitled to all benefits of this
Indenture equally and ratably with any and all other Debentures duly
issued hereunder.
The provisions of this Section 2.09 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost, or stolen
Debentures.
Section 2.10 Outstanding Debentures; Determinations Of Holders'
Action.
Debentures outstanding at any time are all the Debentures
authenticated by the Trustee except for those canceled by it, those
delivered to it for cancellation, those mutilated, destroyed, lost, or
stolen Debentures referred to in Section 2.09 hereof, those redeemed by
the Company pursuant to Article 3 hereof, and those described in this
Section 2.10 as not outstanding. A Debenture does not cease to be
outstanding because the Company or a Subsidiary or Affiliate thereof
holds the Debenture; provided, however, that in determining whether the
Holders of the requisite principal amount of Debentures have given or
concurred in any request, demand, authorization, direction, notice,
consent, or waiver hereunder, Debentures owned by the Company, a
Subsidiary, or an Affiliate shall be disregarded and deemed not to be
outstanding.
Subject to the foregoing, only Debentures outstanding at the time of
such determination shall be considered in any such determination
(including determinations pursuant to Articles 3, 6 and 9 hereof).
If a Debenture is replaced pursuant to Section 2.09 hereof, it ceases
to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Debenture is held by a bona fide purchaser.
If the Paying Agent (other than the Company) holds, in accordance with
this Indenture, at maturity or on a Redemption Date, money sufficient to
pay the Debentures payable on that date, then immediately on the date of
maturity or such Redemption Date, as the case may be, such Debentures
shall cease to be outstanding, and interest, if any, on such Debentures
<PAGE>
shall cease to accrue.
Section 2.11 Temporary Debentures.
So long as CL&P Capital shall hold all of the Debentures, the Company
may execute temporary Debentures, and upon the Company's written
request, signed by two Officers of the Company, the Trustee shall
authenticate and make such temporary Debentures available for delivery.
Temporary Debentures shall be printed, lithographed, typewritten,
mimeographed, or otherwise produced in any authorized denomination,
substantially of the tenor of the definitive Debentures in lieu of which
they are issued and with such appropriate insertions, omissions,
substitutions, and other variations as the Officers of the Company
executing such Debentures may determine, as conclusively evidenced by
their execution of such Debentures.
After the preparation of definitive Debentures, the temporary
Debentures shall be exchangeable for definitive Debentures of the same
series upon surrender of the temporary Debentures at the office or
agency of the Company designated for such purpose pursuant to Section
2.05 hereof, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Debentures, the Company shall
execute a like principal amount of definitive Debentures of authorized
denominations, and the Trustee, upon written request of the Company
signed by two Officers of the Company, shall authenticate and make such
Debentures available for delivery in exchange therefor. Until so
exchanged, the temporary Debentures shall in all respects be entitled to
the same benefits under this Indenture as definitive Debentures.
Section 2.12 Cancellation.
All Debentures surrendered for payment, redemption by the Company
pursuant to Article 3 hereof, or registration of transfer or exchange
shall, if surrendered to any Person other than the Trustee, be delivered
to the Trustee and shall be promptly canceled by the Trustee. The
Company may at any time deliver to the Trustee for cancellation any
Debentures previously authenticated and made available for delivery
hereunder which the Company may have acquired in any manner whatsoever,
and all Debentures so delivered shall be promptly canceled by the
Trustee. The Company may not reissue or issue new Debentures to replace
Debentures it has paid or delivered to the Trustee for cancellation. No
Debentures shall be authenticated in lieu of or in exchange for any
Debentures canceled as provided in this Section 2.12, except as
expressly permitted by this Indenture. All canceled Debentures held by
the Trustee shall be destroyed by the Trustee, and the Trustee shall
deliver a certificate of destruction to the Company.
Section 2.13 Defaulted Interest.
If the Company defaults in a payment of interest on the Debentures, it
shall pay the defaulted interest to the Persons who are Holders on a
subsequent special Record Date, and such special Record Date, as used in
this Section 2.13 with respect to the payment of any defaulted interest,
shall mean the 15th day next preceding the date fixed by the Company for
the payment of defaulted interest, whether or not such day is a Business
Day. At least 15 days before the subsequent special Record Date, the
Company shall mail to each Holder and to the Trustee a notice that
states the subsequent special Record Date, the payment date, and the
amount of defaulted interest to be paid.
<PAGE>
The Company may also pay defaulted interest in any other lawful
manner.
ARTICLE 3
REDEMPTION
Section 3.01 Redemption; Notice To Trustee.
(a) The Series A Debentures are subject to redemption prior to
maturity as provided in the form thereof.
(b) The redemption terms for any additional series of Debentures
shall be as specified in the supplemental indenture creating such series
of Debentures.
(c) If any or all of the Debentures are to be redeemed pursuant to
paragraphs (a) or (b) above, the Company shall give notice by first
class mail, postage prepaid, to the Trustee not less 45 days prior to
the date of such redemption. Any such notice of redemption shall state
the date and price of redemption.
Section 3.02 Selection Of Debentures To Be Redeemed.
If less than all the outstanding Debentures are to be redeemed at any
time, the Trustee shall select the Debentures to be redeemed on a pro
rata basis, by lot or any other method the Trustee considers fair and
appropriate. The Trustee shall make the selection at least 30 but not
more than 60 days before the Redemption Date from outstanding Debentures
not previously called for redemption. Provisions of this Indenture that
apply to Debentures called for redemption also apply to portions of
Debentures called for redemption. The Trustee shall notify the Company
promptly of the Debentures or portions of Debentures to be redeemed.
Notwithstanding the foregoing, the Company shall not effect any partial
redemption that would result in the delisting of a series of the
Preferred Securities by any national securities exchange or other
organization on which such series is then listed.
Section 3.03 Notice Of Redemption.
So long as CL&P Capital remains the sole Debentureholder, no notice of
any redemption of Debentures will be required. In the event and at such
time that CL&P Capital ceases to be the sole Debentureholder, at least
30 days but not more than 60 days prior to a Redemption Date, the
Trustee shall, at the expense of the Company, mail or cause to be mailed
a notice of redemption by first-class mail, postage prepaid, to each
Holder of Debentures to be redeemed at the Holder's last address, as it
appears on the Register.
The notice shall identify the Debentures to be redeemed, the provision
of the Debentures or this Indenture pursuant to which the Debentures
called for redemption are being redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the name and address of the Paying Agent;
(4) that Debentures called for redemption must be surrendered to the
<PAGE>
Paying Agent to collect the Redemption Price;
(5) if fewer than all the outstanding Debentures are to be redeemed,
the identification and principal amounts of the particular Debentures to
be redeemed and that, on and after the Redemption Date, upon surrender
of such Debentures, a new Debenture or Debentures in principal amount
equal to the unredeemed portion thereof will be issued; and
(6) that, unless the Company does not make such redemption payment,
interest will cease to accrue on Debentures called for redemption on and
after the Redemption Date.
The notice may state that it is subject to the deposit or segregation
of the redemption monies on or before the date fixed for redemption in
accordance with Section 3.05, and which notice shall be of no effect
unless such monies are so deposited or segregated on or before such
date.
Section 3.04 Effect Of Notice Of Redemption.
If (1) the notice of redemption is not conditioned upon the deposit or
segregation of the redemption monies on or before the date fixed for
redemption, or (2) the notice of redemption is conditioned upon such
deposit or segregation of redemption monies and such monies are so
deposited or segregated, then the Debentures called for redemption shall
become due and payable on the Redemption Date and at the Redemption
Price and such Debentures shall, upon the later of the Redemption Date
and the date such Debentures are surrendered to the Paying Agent, be
paid at the Redemption Price, plus accrued interest to the Redemption
Date.
Section 3.05 Deposit Of Redemption Price.
On or prior to a Redemption Date, the Company shall deposit with the
Paying Agent (or if the Company or an Affiliate is the Paying Agent,
shall segregate and hold in trust or cause such Affiliate to segregate
and hold in trust) money sufficient to pay the Redemption Price of, and
accrued interest on, all Debentures to be redeemed on that date. The
Paying Agent shall return to the Company any money not required for the
purpose stated in this Section 3.05.
Section 3.06 Debentures Redeemed In Part.
Upon surrender of a Debenture that is redeemed in part, the Trustee
shall authenticate for the Holder a new Debenture equal in principal
amount to the unredeemed portion of such Debenture.
ARTICLE 4
COVENANTS
Section 4.01 Payment Of Debentures.
(a) The Company shall pay the principal of and premium, if any, and
interest (including Additional Interest, if any, and interest accruing
on or after the filing of a petition in bankruptcy or reorganization
relating to the Company, whether or not a claim for post-filing interest
is allowed in such proceeding) on the Debentures on (or prior to) the
dates and in the manner provided in the Debentures and/or pursuant to
<PAGE>
this Indenture. An installment of principal or interest shall be
considered paid on the applicable date due if on such date the Trustee
or the Paying Agent holds, in accordance with this Indenture, money
sufficient to pay all of such installment then due, provided that if the
Paying Agent is the Company or an Affiliate of the Company, such money
shall be segregated and held in trust for the Debentureholders before
such installment shall be considered paid. The Company shall pay
interest on overdue principal and interest on overdue installments of
interest (including Additional Interest, if any, and interest accruing
during an Extension Period and/or on or after the filing of a petition
in bankruptcy or reorganization relating to the Company, whether or not
a claim for post-filing interest is allowed in such proceeding), to the
extent permitted by applicable law, at the rate per annum borne by the
Debentures, which interest on overdue interest shall accrue from the
date such amounts became overdue.
(b) Notwithstanding paragraph (a) of this Section 4.01 or any other
provision herein or in the Debentures to the contrary, the Company shall
have the right in its sole and absolute discretion at any time and from
time to time while the Debentures are outstanding, so long as no Event
of Default has occurred and is continuing, to extend the interest
payment period for one or more series of the Debentures for up to 60
consecutive months, provided that such Extension Period shall not extend
beyond the Stated Maturity, or acceleration thereof, or any date of
redemption, of the Debentures, and provided further that at the end of
each Extension Period the Company shall pay all interest, including
Additional Interest, if any, then accrued and unpaid (together with
interest thereon compounded monthly at the rate specified for the
applicable series of Debentures, to the extent permitted by applicable
law). Prior to the termination of an Extension Period, the Company may
shorten or may further extend the interest payment period, provided that
such Extension Period together with all such further extensions may not
exceed 60 consecutive months. Upon the termination of any Extension
Period and the payment of all amounts then due, the Company may select a
new Extension Period subject to the above requirements. The Company
shall give the Trustee notice of its selection of such extended or
shortened interest payment period on or prior to the earliest of (1) one
Business Day prior to the date on which the related distribution by CL&P
Capital on the Preferred Securities would otherwise be payable, (2) one
Business Day prior to the date CL&P Capital is required to give notice
of the record or payment date of such related distribution to any
national securities exchange on which the Preferred Securities are then
listed or other applicable self-regulatory organization, and (3) two
Business Days prior to such record date. The Company shall give or
cause the Trustee to give such notice of the Company's selection of such
extended interest payment period to the Holders and, if CL&P Capital is
the sole holder of such series of the Subordinated Debentures, to the
holders of the corresponding series of the Preferred Securities.
Section 4.02 Prohibition Against Dividends, Etc. During An Event Of
Default Or An Extension Period.
Neither the Company nor any Subsidiary shall declare or pay any
dividend on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of its Capital Stock (other than dividends paid by
a Wholly Owned Subsidiary) during an Extension Period or if at such time
there shall have occurred and be continuing any Default or Event of
Default or if the Company shall be in default with respect to its
payment obligations under the Guaranty Agreement.
<PAGE>
Section 4.03 SEC Reports.
The Company shall file with the Trustee, within 15 days after it files
them with the SEC, copies of its annual report and of the information,
documents, and other reports (or copies of such portions of any of the
foregoing as the SEC may by rules and regulations prescribe) which the
Company is required to file with the SEC pursuant to Section 13 or 15(d)
of the Exchange Act. If the Company is not subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, the Company
shall file with the Trustee such information, documents, and other
reports (or copies of such portions of any of the foregoing as the SEC
may by rules and regulations prescribe) which are specified in Sections
13 of the Exchange Act. The Company shall also comply with the
provisions of Section 314(a) of the TIA.
Section 4.04 Compliance Certificates.
(a) The Company shall deliver to the Trustee within 90 days after the
end of each of the Company's fiscal years an Officer's Certificate,
stating whether or not the signer knows of any Default or Event of
Default. Such certificate shall contain a certification from the
principal executive officer, principal financial officer, or principal
accounting officer of the Company as to his or her knowledge of the
Company's compliance with all conditions and covenants under this
Indenture. For purposes of this Section 4.04(a), such compliance shall
be determined without regard to any period of grace or requirement of
notice provided under this Indenture. If such Officer does know of such
a Default or Event of Default, the certificate shall describe any such
Default or Event of Default and its status.
(b) The Company shall deliver to the Trustee any information
reasonably requested by the Trustee in connection with the compliance by
the Trustee or the Company with the TIA.
Section 4.05 Relationship With CL&P Capital.
The Company agrees (i) to maintain, directly or indirectly through a
Wholly Owned Subsidiary, 100% ownership of the general partnership
interests in CL&P Capital; (ii) to cause the General Partner to maintain
a capital account balance in CL&P Capital equal to at least 3% of the
total positive capital account balances for CL&P Capital and, if
necessary, to make additional contributions to satisfy this requirement;
(iii) to timely perform or cause to be timely performed all of the
duties of the General Partner of CL&P Capital (including the duty to pay
distributions on the Preferred Securities); and (iv) to use its
reasonable efforts to cause CL&P Capital to remain a limited partnership
and otherwise continue to be treated as a partnership for United States
federal income tax purposes.
Section 4.06 Further Instruments And Acts.
Upon request of the Trustee, the Company shall execute and deliver
such further instruments and do such further acts as may be reasonably
necessary or proper to carry out more effectively the purposes of this
Indenture.
Section 4.07 Payments For Consents.
Neither the Company nor any Subsidiary shall, directly or indirectly,
pay or cause to be paid any consideration, whether by way of interest,
<PAGE>
fee, or otherwise, to any Debentureholder for or as an inducement to any
consent, waiver, or amendment of any of the terms or provisions of this
Indenture or the Debentures unless such consideration is offered to be
paid or agreed to be paid to all Debentureholders who so consent, waive,
or agree to amend in the time frame set forth in the documents
soliciting such consent, waiver, or agreement.
ARTICLE 5
SUCCESSOR CORPORATION
Section 5.01 When The Company May Merge, Etc.
The Company may not consolidate with or merge with or into, or sell,
convey, transfer, or lease all or substantially all of its assets
(either in one transaction or a series of transactions) to, any Person
unless:
(1) the Person formed by or surviving such consolidation or
merger or to which such sale, conveyance, transfer, or lease shall
have been made (the "Successor"), if other than the Company, (a) is
organized and existing under the laws of the United States of America
or any State thereof or the District of Columbia, and (b) shall
expressly assume by a supplemental indenture, executed and delivered
to the Trustee, in form reasonably satisfactory to the Trustee, all
the obligations of the Company under the Debentures and this
Indenture;
(2) immediately prior to and after giving effect to such
transaction (and treating any Indebtedness which becomes an obligation
of the Successor as a result of such transaction as having been
incurred by the Successor at the time of such transaction), no Default
or Event of Default shall have occurred and be continuing; and
(3) the Company delivers to the Trustee an Officer's Certificate
and an Opinion of Counsel, each stating that such consolidation,
merger, sale, conveyance, transfer, or lease and such supplemental
indenture comply with this Indenture.
The Successor will be the successor to the Company, and will be
substituted for, and may exercise every right and power and become the
obligor on the Debentures with the same effect as if the Successor had
been named as the Company herein, but, in the case of a sale,
conveyance, transfer, or lease of all or substantially all of the assets
of the Company, the predecessor Company will not be released from its
obligation to pay the principal of, premium, if any, and interest on the
Debentures.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01 Events Of Default.
An "Event of Default" occurs if one of the following shall have
occurred and be continuing:
(1) The Company defaults in the payment, when due and payable,
<PAGE>
of (a) interest, including Additional Interest, on any Debenture and
the default continues for a period of 10 days (whether or not payment
is prohibited by the provisions of Article 10 hereof or otherwise);
provided, that during an Extension Period, interest shall not be due
and payable and failure to pay interest on the Debentures shall not
constitute a Default or Event of Default hereunder, or (b) the
principal of, or premium, if any, on any Debentures when the same
becomes due and payable at maturity, acceleration, on any Redemption
Date, or otherwise (whether or not payment is prohibited by the
provisions of Article 10 hereof or otherwise);
(2) The Company defaults in the performance of, or fails to
comply with, any of its other covenants or agreements in the
Debentures or this Indenture and such default or failure continues for
60 days after receipt by the Company of a "Notice of Default";
(3) The Company, pursuant to or within the meaning of any
Bankruptcy Law:
(a) commences a voluntary case or proceeding;
(b) consents to the entry of an order for relief against it
in an involuntary case or proceeding;
(c) consents to the appointment of a Custodian of it or for
all or substantially all of its property, and such
Custodian is not discharged within 60 days;
(d) makes a general assignment for the benefit of its
creditors; or
(e) admits in writing its inability to pay its debts
generally as they become due; or
(4) A court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(a) is for relief against the Company in an involuntary
case or proceeding;
(b) appoints a Custodian of the Company for all or
substantially all of its properties; or
(c) orders the liquidation of the Company;
and in each case the order or decree remains unstayed and in effect for
60 days.
The foregoing will constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary
or is effected by operation of law or pursuant to any judgment, decree,
or order of any court or any order, rule, or regulation of any
administrative or governmental body.
A Default under clause (2) above is not an Event of Default until the
Trustee notifies the Company or the Holders of at least a majority in
aggregate principal amount of the Debentures at the time outstanding or
the Special Representative notifies the Company and the Trustee of the
Default and the Company does not cure such Default within the time
specified in clause (2) above after receipt of such notice. Any such
<PAGE>
notice must specify the Default, demand that it be remedied and state
that such notice is a "Notice of Default."
Section 6.02 Acceleration.
If any Event of Default, other than an Event of Default specified in
clause (3) or (4) occurs and is continuing, the Trustee, the Holders of
not less than 25% in principal amount of the Debentures then
outstanding, or the Special Representative, may declare the principal of
all such Debentures due and payable. Upon such a declaration, such
principal and interest shall be due and payable immediately.
If an Event of Default specified in clause (3) or (4) occurs, the
principal of and interest on all the Debentures shall ipso facto become
and be immediately due and payable without any declaration or other act
on the part of the Trustee or any Debentureholders.
The Special Representative or Holders of a majority in aggregate
principal amount of the Debentures at the time outstanding by notice to
the Trustee may rescind an acceleration and its consequences if the
rescission would not conflict with any judgment or decree and if all
existing Events of Default have been cured or waived except nonpayment
of principal or interest that has become due solely because of
acceleration. No such rescission shall affect any subsequent Default or
impair any right consequent thereto.
Section 6.03 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may, in
its own name or as trustee of an express trust, institute, pursue and
prosecute any proceeding, including any action at law or suit in equity
or other judicial or administrative proceeding, to collect the payment
of principal of, premium, if any, or interest on, the Debentures, to
enforce the performance of any provision of the Debentures or this
Indenture or to obtain any other available remedy.
The Trustee may maintain a proceeding even if it does not possess any
of the Debentures or does not produce any of the Debentures in the
proceeding. A delay or omission by the Trustee, the Special
Representative, or any Debentureholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of, or acquiescence in, the Event of Default. No
remedy is exclusive of any other remedy. All available remedies are
cumulative.
Section 6.04 Waiver Of Past Defaults.
The Special Representative or the Holders of 66 2/3% in aggregate
principal amount of the Debentures at the time outstanding, by notice to
the Trustee, the Company, and CL&P Capital, may waive any Default or
Event of Default that has occurred and its consequences. When a Default
or Event of Default is waived, it is deemed cured and shall cease to
exist, but no such waiver shall extend to any subsequent or other
Default or Event of Default or impair any consequent right.
Section 6.05 Control By Majority Or The Special Representatives.
The Holders of a majority in aggregate principal amount of the
Debentures then outstanding or the Special Representative may direct the
time, method, and place of conducting any proceeding for any remedy
<PAGE>
available to the Trustee or of exercising any trust or power conferred
on the Trustee. However, the Trustee may refuse to follow any direction
that conflicts with law or this Indenture or that the Trustee determines
in good faith is unduly prejudicial to the rights of other
Debentureholders or would involve the Trustee in personal liability.
The Trustee may take any other action deemed proper by the Trustee which
is not inconsistent with such direction, including withholding notice to
the Holders of the Debentures of any series of any continuing Default
(except in the payment of the principal (other than any mandatory
sinking fund payment) of, premium, if any, or interest on, any
Debentures of such series) if the Trustee considers it in the interest
of the Holders of such series of Debentures to do so.
Section 6.06 Limitation On Suits.
Except as provided in Section 6.07 hereof, the Holders and the Special
Representative may not pursue any remedy with respect to this Indenture
or the Debentures unless:
(1) the Holders or the Special Representative gives to the
Trustee written notice stating that an Event of Default is continuing;
(2) the Holders or the Special Representative provides to the
Trustee reasonable security and indemnity against any loss, liability,
or expense satisfactory to the Trustee;
(3) the Trustee does not comply with the request within 60 days
after receipt of the notice, the request and the offer of security and
indemnity; and
(4) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the outstanding Debentures;
it being understood and intended that no one or more Holders shall have
any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb, or prejudice the rights
of any other Holders, or to obtain or to seek to obtain priority or
preference over any other Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and
ratable benefit of all the Holders.
Section 6.07 Rights Of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the right of
any Holder to receive payment of the principal amount of or interest on
the Debentures held by such Holder, on or after the respective due dates
expressed in the Debentures (in the case of interest, as the same may be
extended pursuant to Section 4.01(b)) or any Redemption Date, or to
bring suit for the enforcement of any such payment on or after such
respective dates shall not be impaired or affected adversely without the
consent of each such Holder.
Section 6.08 Collection Suit By The Trustee.
If an Event of Default described in Section 6.01(1) hereof occurs and
is continuing, the Trustee may, in its own name and as trustee of an
express trust, recover judgment against the Company or any other obligor
upon the Debentures for the whole amount owing with respect to the
Debentures and the amounts provided for in Section 6.07 hereof.
<PAGE>
Section 6.09 The Trustee May File Proofs Of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition, or
other judicial proceeding relative to the Company or its properties or
assets, the Trustee shall be entitled and empowered, by intervention in
such proceeding or otherwise:
(1) to file and prove a claim for the whole amount of the
principal, premium, if any, and interest on the Debentures and to file
such other papers or documents as may be necessary or advisable in
order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements, and advances of the
Trustee, its agents, and counsel) and of the Holders allowed in such
judicial proceeding; and
(2) to collect and receive any monies or other property payable
or deliverable on any such claims and to distribute the same; and any
Custodian in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the
Holders, to pay the Trustee any amount due it for the reasonable
compensation, expenses, disbursements, and advances of the Trustee,
its agents, and counsel, and any other amounts due the Trustee under
Section 7.07 hereof.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any
plan of reorganization, arrangement, adjustment, or composition
affecting the Debentures or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in
any such proceeding.
Section 6.10 Priorities.
If the Trustee collects any money pursuant to this Article 6, it shall
pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section 7.07
hereof;
SECOND: to Debentureholders for amounts due and unpaid on
the Debentures for the principal amount, Redemption Price, or
interest, if any, as the case may be, ratably, without preference
or priority of any kind, according to such amounts due and
payable on the Debentures; and
THIRD: the balance, if any, to the Company.
The Trustee may fix a Record Date and payment date for any payment to
Debentureholders pursuant to this Section 6.10.
Section 6.11 Undertaking For Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or
omitted by it as Trustee, a court in its discretion may require the
filing by any party litigant (other than the Trustee) in the suit of an
undertaking to pay the costs of the suit, and the court in its
<PAGE>
discretion may assess reasonable costs, including reasonable attorneys'
fees and expenses, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by
the party litigant. This Section 6.11 does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 6.07 hereof or a suit by
Holders of more than 10% in aggregate principal amount of the Debentures
at the time outstanding, or a suit by the Special Representative.
Section 6.12 Waiver Of Stay, Extension, Or Usury Laws.
The Company covenants (to the extent permitted by applicable law) that
it will not at any time insist upon, or plead or in any manner
whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury or other law wherever enacted, now or at any
time hereafter in force, that would prohibit or forgive the Company from
paying all or any portion of the principal or premium, if any, or
interest on, the Debentures as contemplated herein or affect the
covenants or the performance by the Company of its obligations under
this Indenture; and the Company (to the extent permitted by applicable
law) hereby expressly waives all benefit or advantage of any such law,
and covenants that it will not hinder, delay, or impede the execution of
any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
ARTICLE 7
THE TRUSTEE
Section 7.01 Duties Of The Trustee.
(1) If an Event of Default has occurred and is continuing, the
Trustee shall exercise the rights and powers vested in it by this
Indenture and use the same degree of care and skill in its exercise as a
prudent person would exercise or use under the circumstances in the
conduct of his or her own affairs.
(2) Except during the continuance of an Event of Default, (a) the
Trustee need perform only those duties that are specifically set forth
in this Indenture and no others; and (b) in the absence of bad faith on
its part, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture. However, in the case of any
certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall examine the
certificates and opinions to determine whether or not they conform to
the requirements of this Indenture.
(3) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(a) this paragraph (3) does not limit the effect of paragraph
(2) of this Section 7.01;
(b) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
<PAGE>
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(4) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (1), (2), (3) and (5) of this Section
7.01 and to Section 7.02 hereof.
(5) The Trustee may refuse to perform any duty or exercise any right
or power or extend or risk its own funds or otherwise incur any
financial liability unless it receives security and indemnity reasonably
satisfactory to it against any loss, liability, or expense.
(6) Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The
Trustee shall not be liable for interest on any money held by it
hereunder.
Section 7.02 Rights Of The Trustee.
(1) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper person. The Trustee
need not investigate any fact or matter stated in the document.
(2) Before the Trustee acts or refrains from acting, it may require
an Officer's Certificate and, if appropriate, an Opinion of Counsel.
The Trustee shall not be liable for any action it takes or omits to take
in good faith in reliance on such Officer's Certificate and Opinion of
Counsel.
(3) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
(4) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it reasonably believes to be authorized or
within its rights or powers.
(5) The Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered, or omitted by it hereunder in good faith and in reliance
thereon.
(6) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or
direction of any of the Holders or the Special Representative pursuant
to this Indenture, unless such Holders or the Special Representative
shall have offered to the Trustee reasonable security and indemnity
against the costs, expenses, and liabilities which might be incurred by
it in compliance with such request or direction.
Section 7.03 Individual Rights Of The Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Debentures and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not
Trustee. Any Paying Agent, Registrar, or co-Registrar may do the same
with like rights. However, the Trustee must comply with Sections 7.10
and 7.11 hereof.
Section 7.04 The Trustee's Disclaimer.
<PAGE>
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Debentures, it shall not be accountable for the
Company's use of the proceeds from the Debentures, and it shall not be
responsible for any statement in this Indenture or the Debentures or any
report or certificate issued by the Company hereunder or any
registration statement relating to the Debentures (other than the
Trustee's certificate of authentication), or the determination as to
which beneficial owners are entitled to receive any notices hereunder.
Section 7.05 Notice Of Defaults.
The Trustee shall mail to the Debentureholders, as their names and
addresses appear on the Register, notice of all Defaults known to the
Trustee, within 90 days after the occurrence thereof; provided, however,
that in the case of a Default described in Section 6.01(1) hereof, the
Trustee may withhold such notice if and so long as a committee of Trust
Officers in good faith determines that the withholding of such notice is
in the interests of Debentureholders. The second sentence of this
Section 7.05 shall be in lieu of the proviso to TIA Section 315(b).
Said proviso is hereby expressly excluded from this Indenture, as
permitted by the TIA.
Section 7.06 Reports By Trustee To Holders.
Within 60 days after each May 31 beginning with the May 31 next
following the date of the execution and delivery of this Indenture, the
Trustee shall transmit by mail, postage prepaid, to (i) each
Debentureholder, (ii) such other holders that have submitted their names
to the Trustee for such purpose, and (iii) any other persons identified
in the list of holders that the Company has provided to the Trustee
pursuant to Section 2.07 hereof, a brief report dated as of such May 31
in accordance with and to the extent required under TIA Section 313.
A copy of each report at the time of its mailing to Debentureholders
shall be filed with the Company, the SEC, and each securities exchange
on which the Debentures are listed. The Company agrees to promptly
notify the Trustee whenever the Debentures become listed on any
securities exchange and of any subsequent change in such listing.
Section 7.07 Compensation And Indemnity.
The Company agrees:
(1) to pay to the Trustee from time to time such compensation as
shall be agreed in writing between the Company and the Trustee for all
services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(2) to reimburse the Trustee upon its request for all reasonable
expenses, disbursements, and advances incurred or made by the Trustee
in accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and advances of its agents
and counsel), including all reasonable expenses and advances incurred
or made by the Trustee in connection with any Event of Default or any
membership on any creditors' committee, except any such expense or
advance as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee, its officers, directors, and
<PAGE>
shareholders for, and to hold it harmless against, any and all loss,
liability, or expense, incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of
defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder.
Before, after, or during an Event of Default, the Trustee shall have a
claim and lien prior to the Debentures as to all property and funds held
by it hereunder for any amount owing it or any predecessor Trustee
pursuant to this Section 7.07, except with respect to funds held in
trust for the payment of principal of, premium, if any, or interest on,
particular Debentures.
The Company's payment obligations pursuant to this Section 7.07 are
not subject to Article 10 of this Indenture and shall survive the
discharge of this Indenture. When the Trustee renders services or
incurs expenses after the occurrence of an Event of Default specified in
Section 6.01 hereof, the compensation for services and expenses are
intended to constitute expenses of administration under any Bankruptcy
Law.
Section 7.08 Replacement Of Trustee.
The Trustee may resign by so notifying the Company in writing at least
30 days prior to the date of the proposed resignation; provided,
however, no such resignation shall be effective until a successor
Trustee has accepted its appointment pursuant to this Section 7.08. The
Special Representative or the Holders of a majority in aggregate
principal amount of the Debentures at the time outstanding may remove
the Trustee by so notifying the Trustee in writing and may appoint a
successor Trustee, which shall be subject to the consent of the Company
unless an Event of Default has occurred and is continuing. The Trustee
shall resign if:
(1) the Trustee fails to comply with Section 7.10 hereof;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or public officer takes charge of the Trustee or
its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. A successor Trustee shall deliver a written
acceptance of its appointment to the retiring Trustee and to the
Company. Thereupon, the resignation or removal of the retiring Trustee
shall become effective, and the successor Trustee shall have all the
rights, powers, and duties of the Trustee under this Indenture. The
successor Trustee shall mail a notice of its succession to
Debentureholders. Subject to payment of all amounts owing to the
Trustee under Section 7.07 hereof and subject further to its lien under
Section 7.07 hereof, the retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee. If a successor
Trustee does not take office within 30 days after the retiring Trustee
resigns or is removed, the retiring Trustee, the Company, the Special
Representative, or the Holders of a majority in aggregate principal
amount of the Debentures at the time outstanding may petition any court
<PAGE>
of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10 hereof, any
Debentureholder may petition any court of competent jurisdiction for its
removal and the appointment of a successor Trustee.
Section 7.09 Successor Trustee By Merger.
If the Trustee consolidates with, merges, or converts into, or
transfers all or substantially all its corporate trust business or
assets (including this Trusteeship) to another corporation, the
resulting, surviving or transferee corporation without any further act
shall be the successor Trustee.
Section 7.10 Eligibility; Disqualification.
The Trustee shall at all times satisfy the requirements of TIA
Sections 310(a)(1) and 310(a)(2). The Trustee (or any Affiliate thereof
which has unconditionally guaranteed the obligations of the Trustee
hereunder) shall have a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of
condition. The Trustee shall comply with TIA Section 310(b). In
determining whether the Trustee has conflicting interests as defined in
TIA Section 310(b)(l), the provisions contained in the proviso to TIA
Section 310(b)(1) shall be deemed incorporated herein.
Section 7.11 Preferential Collection Of Claims Against The Company.
If and when the Trustee shall be or become a creditor of the Company,
the Trustee shall be subject to the provisions of the TIA regarding the
collection of claims against the Company.
ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE;
DEFEASANCE OF CERTAIN OBLIGATIONS; UNCLAIMED MONIES
Section 8.01 Satisfaction And Discharge Of Indenture.
The Company shall be deemed to have paid and discharged the entire
indebtedness on any series of the Debentures outstanding on the date the
Company has irrevocably deposited or caused to be irrevocably deposited
with the Trustee or any Paying Agent as trust funds in trust,
specifically pledged as security for, and dedicated solely to, the
benefit of the Holders (1) cash in an amount, or (2) U.S. Government
Obligations, maturing as to principal and interest at such times and in
such amounts as will ensure the availability of cash, or (3) a
combination thereof, sufficient to pay the principal of, premium, if
any, and interest on all Debentures then outstanding, and on such date
the provisions of this Indenture with respect to the Debentures shall no
longer be in effect (except as to (1) the rights of registration of
transfer, substitution, and exchange of Debentures, (2) the replacement
of apparently mutilated, defaced, destroyed, lost, or stolen Debentures,
(3) the rights of the Holders to receive payments of principal thereof
and interest thereon, (4) the rights of the Holders as beneficiaries
hereof with respect to the property so deposited with the Trustee
payable to all or any of them, (5) the obligation of the Company to
maintain an office or agency for payments on and registration of
transfer of the Debentures, and (6) the rights, obligations, and
<PAGE>
immunities of the Trustee hereunder); and the Trustee shall, at the
request and expense of the Company, execute proper instruments
acknowledging the same; provided that:
(A) no Default or Event of Default with respect to the
Debentures shall have occurred and be continuing on the date of such
deposit or would occur as a result of such deposit;
(B) the Company shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all
conditions precedent relating to the defeasance contemplated by this
provision have been complied with; and
(C) the Company shall have delivered to the Trustee (i) either a
private Internal Revenue Service ruling or an Opinion of Counsel, in
either case to the effect that the Holders will not recognize income,
gain, or loss for United States federal income tax purposes as a
result of such deposit, defeasance, and discharge and will be subject
to United States federal income tax on the same amount and in the
manner and at the same times as would have been the case if such
deposit, defeasance, and discharge had not occurred; and (ii) an
Opinion of Counsel to the effect that (a) the deposit shall not result
in the Company, the Trustee, or the trust being deemed to be an
"investment company" under the Investment Company Act of 1940, as
amended, and (b) such deposit creates a valid trust in which such
Holders of the Debentures have the sole beneficial ownership interest
or in which such Holders of the Debentures have a nonavoidable first
priority security interest.
Section 8.02 Application By Trustee Of Funds Deposited For Payment
Of Debentures.
Subject to Section 8.04 and Article 10 hereof, all monies deposited
with the Trustee pursuant to Section 8.01 hereof shall be held in trust
and applied by it to the payment, either directly or through any Paying
Agent (including the Company acting as its own Paying Agent), to the
Holders for the payment or redemption of which such monies have been
deposited with the Trustee, of all sums due and to become due thereon
for principal and interest; but such money need not be segregated from
other funds except to the extent required by law.
Section 8.03 Repayment Of Monies Held By Paying Agent.
In connection with the satisfaction and discharge of this Indenture,
all monies then held by any Paying Agent under this Indenture shall,
upon demand of the Company, be repaid to it or paid to the Trustee, and
thereupon such Paying Agent shall be released from all further liability
with respect to such monies.
Section 8.04 Return Of Monies Held By The Trustee And Paying Agent
Unclaimed For Three Years.
Any monies deposited with or paid to the Trustee or any Paying Agent
for the payment of the principal, premium, if any, or interest on, any
Debenture and not applied but remaining unclaimed for three years after
the date when such principal, premium, if any, or interest shall have
become due and payable shall unless otherwise required by mandatory
provisions of applicable escheat or abandoned or unclaimed property law,
be repaid to the Company by the Trustee or such Paying Agent, and the
Holder of such Debenture shall, unless otherwise required by mandatory
<PAGE>
provisions of applicable escheat or abandoned or unclaimed property
laws, thereafter look only to the Company for any payment which such
Holder may be entitled to collect, and all liability of the Trustee or
any Paying Agent with respect to such monies shall thereupon cease.
ARTICLE 9
AMENDMENTS
Section 9.01 Without Consent Of Holders.
From time to time, when authorized by a resolution of the Board of
Directors, the Company and the Trustee, without notice to or the consent
of any Debentureholders or the Special Representative, may amend or
supplement this Indenture or the Debentures.
(1) to cure any ambiguity, defect, or inconsistency;
(2) to comply with Article 5 hereof;
(3) to provide for uncertificated Debentures in addition to or
in place of certificated Debentures;
(4) to make any other change that does not adversely affect the
rights of any Debentureholder;
(5) to comply with any requirement of the SEC in connection with
the qualification of this Indenture under the TIA; and
(6) to set forth the terms and conditions, which shall not be
inconsistent with this Indenture, of the series of
Debentures (other than the Series A Debentures) that are to
be issued hereunder and the form of Debentures of such
series.
Section 9.02 With Consent Of Holders.
With written consent of the Special Representative or the Holders of
at least 66 2/3% in aggregate principal amount of Debentures at the time
outstanding and affected by such amendment or waiver, the Company and
the Trustee may amend this Indenture or the Debentures or may waive
future compliance by the Company with any provisions of this Indenture
or the Debentures. However, without the consent of each Debentureholder
affected, such an amendment or waiver may not:
(1) reduce the principal amount of the Debentures the Holders of
which must consent to an amendment of the Indenture or a waiver;
(2) change the Stated Maturity of the principal of, or the
interest or rate of interest on, the Debentures, change adversely to
the Holders the redemption provisions of Article 3 hereof, or impair
the right to institute suit for the enforcement of any such payment or
make any Debenture payable in money or securities other than that
stated in the Debenture;
(3) make any change in Article 10 hereof that adversely affects
the rights of the Holders of the Debentures or any change to any other
section hereof that adversely affects their rights under Article 10
hereof;
<PAGE>
(4) waive a Default in the payment of the principal of, premium,
if any, or interest on, any Debenture; or
(5) change Section 6.07 hereof.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment,
but it shall be sufficient if such consent approves the substance
thereof.
If certain Holders agree to defer or waive certain obligations of the
Company hereunder with respect to Debentures held by them, such deferral
or waiver shall not affect the rights of any other Holder to receive the
payment or performance required hereunder in a timely manner.
After an amendment or waiver under this Section 9.02 becomes
effective, the Company shall mail to the Special Representative and to
each Holder a notice briefly describing the amendment or waiver. Any
failure of the Company to mail such notices, or any defect therein,
shall not, however, in any way impair or affect the validity of such
amendment or waiver.
Section 9.03 Compliance With Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article 9 shall
comply with the TIA.
Section 9.04 Revocation And Effect Of Consents, Waivers And Actions.
Until an amendment, waiver, or other action by Holders becomes
effective, a consent to it or any other action by a Holder of a
Debenture hereunder is a continuing consent by the Holder and every
subsequent Holder of that Debenture or portion of the Debenture that
evidences the same obligation as the consenting Holder's Debenture, even
if notation of the consent, waiver, or action is not made on the
Debenture. However, any such Holder or subsequent Holder may revoke the
consent, waiver, or action as to such Holder's Debenture or portion of
the Debenture if the Trustee receives the notice of revocation before
the consent of the requisite aggregate principal amount of the
Debentures then outstanding has been obtained and not revoked. After an
amendment, waiver, or action becomes effective, it shall bind every
Debentureholder, except as provided in Section 9.02 hereof.
The Company may, but shall not be obligated to, fix a Record Date for
the purpose of determining the Holders entitled to consent to any
amendment or waiver. If a Record Date is fixed, then, notwithstanding
the first two sentences of the immediately preceding paragraph, those
Persons who were Holders at such Record Date or their duly designated
proxies, and only those Persons, shall be entitled to consent to such
amendment, supplement, or waiver, or to revoke any consent previously
given, whether or not such Persons continue to be Holders after such
Record Date. No such consent shall be valid or effective for more than
90 days after such Record Date.
Section 9.05 Notation On Or Exchange Of Debentures.
Debentures authenticated and made available for delivery after the
execution of any supplemental indenture pursuant to this Article 9 may,
and shall, if required by the Trustee, bear a notation in form approved
by the Trustee as to any matter provided for in such supplemental
<PAGE>
indenture. If the Company shall so determine, new Debentures so
modified as to conform, in the opinion of the Trustee and the Board of
Directors, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and made available for
delivery by the Trustee in exchange for outstanding Debentures.
Section 9.06 Trustee To Sign Supplemental Indentures.
The Trustee shall sign any supplemental indenture authorized pursuant
to this Article 9 if the supplemental indenture does not adversely
affect the rights, duties, liabilities, or immunities of the Trustee.
If it does, the Trustee may, but need not, sign it. In signing such
amendment the Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Officer's Certificate and Opinion of
Counsel stating that such supplemental indenture is authorized or
permitted by this Indenture.
Section 9.07 Effect Of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article 9,
this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all
purposes and every Holder of Debentures theretofore or thereafter
authenticated and made available for delivery hereunder shall be bound
thereby.
ARTICLE 10
SUBORDINATION
Section 10.01 Debentures Subordinated To Senior Indebtedness.
Notwithstanding the provisions of Section 6.01 hereof or any other
provision herein or in the Debentures, the Company, the Trustee and each
Holder by his acceptance of a Debenture (a) covenant and agree that all
payments by the Company of the principal of, premium, if any, and
interest on the Debentures shall be subordinated in accordance with the
provisions of this Article 10 to the prior payment in full, in cash or
cash equivalents, of all amounts payable on, under, or in connection
with present or future Senior Indebtedness, and (b) acknowledge that
holders of Senior Indebtedness may rely on this Article 10.
Section 10.02 Priority And Payment Of Proceeds In Certain Events;
Remedies Standstill.
(1) Upon any payment or distribution of assets or securities of the
Company, as the case may be, of any kind or character, whether in cash,
property, or securities, upon any dissolution or winding up or total or
partial liquidation or reorganization of the Company, whether voluntary
or involuntary, or in bankruptcy, insolvency, receivership, or other
proceedings, all amounts payable on, under, or in connection with Senior
Indebtedness (including any interest accruing on such Senior
Indebtedness subsequent to the commencement of a bankruptcy, insolvency,
or similar proceeding) shall first be paid in full in cash, or payment
provided for in cash or cash equivalents, before the Holders or the
Trustee on behalf of the Holders shall be entitled to receive from the
Company any payment of principal of or interest on or any other amounts
in respect of the Debentures or distribution of any assets or
securities.
<PAGE>
(2) No direct or indirect payment by or on behalf of the Company of
principal of or interest on the Debentures, whether pursuant to the
terms of the Debentures or upon acceleration or otherwise, shall be made
if, at the time of such payment, there exists (a) a default in the
payment of all or any portion of any Senior Indebtedness, and the
Trustee has received written notice thereof from the Company, one or
more holders of Senior Indebtedness, or from any trustee,
representative, or agent therefor, or (b) any other default affecting
Senior Indebtedness permitting its acceleration, as the result of which
the maturity of Senior Indebtedness has been accelerated, and the
Trustee has received written notice from any trustee, representative, or
agent for the holders of the Senior Indebtedness or the holders of at
least a majority in principal amount of the Senior Indebtedness then
outstanding of such default and acceleration, and such default shall not
have been cured or waived by or on behalf of the holders of such Senior
Indebtedness.
(3) If, notwithstanding the foregoing provision prohibiting such
payment or distribution, the Trustee or any Holder shall have received
any payment on account of the principal of or interest on the Debentures
(other than as permitted by subsections (1) and (2) of this Section
10.02) when such payment is prohibited by this Section 10.02 and before
all amounts payable on, under, or in connection with Senior Indebtedness
are paid in full in cash or cash equivalents, then and in such event
(subject to the provisions of Section 10.08 hereof) such payment or
distribution shall be received and held in trust for the holders of
Senior Indebtedness and shall be paid over or delivered first to the
holders of the Senior Indebtedness remaining unpaid to the extent
necessary to pay such Senior Indebtedness in full in cash or cash
equivalents.
(4) Upon any payment or distribution of assets or securities referred
to in this Article 10, the Trustee and the Holders shall be entitled to
rely upon any order or decree of a court of competent jurisdiction in
which such dissolution, winding up, liquidation, or reorganization
proceedings are pending, and upon a certificate of the receiver, trustee
in bankruptcy, liquidating trustee, agent, or other Person making any
such payment or distribution, delivered to the Trustee for the purpose
of ascertaining the Persons entitled to participate in such
distribution, the holders of Senior Indebtedness and other Indebtedness
of the Company, the amount thereof or payable thereon, the amount or
amounts paid or distributed thereon, and all other facts pertinent
thereto or to this Article 10.
Section 10.03 Payments Which May Be Made Prior To Notice.
Nothing in this Article 10 or elsewhere in this Indenture shall
prevent (1) the Company, except under the conditions described in
Section 10.02 hereof, from making payments of principal of and interest
on the Debentures or from depositing with the Trustee any monies for
such payments, or (2) the application by the Trustee of any monies
deposited with it for the purpose of making such payments of principal
of and interest on the Debentures, to the Holders entitled thereto,
unless at least one day prior to the date when such payment would
otherwise (except for the prohibitions contained in Section 10.02
hereof) become due and payable, the Trustee shall have received the
written notice provided for in Section 10.02(2) hereof.
Section 10.04 Rights Of Holders Of Senior Indebtedness Not To Be
<PAGE>
Impaired.
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time or in any way
be prejudiced or impaired by any act or failure to act in good faith by
any such holder, or by any noncompliance by the Company with the terms
and provisions and covenants herein regardless of any knowledge thereof
any such holder may have or otherwise be charged with.
The provisions of this Article 10 are intended to be for the benefit
of, and shall be enforceable directly by, the holders of Senior
Indebtedness.
Notwithstanding anything to the contrary in this Article 10, to the
extent any Holders or the Trustee have paid over or delivered to any
holder of Senior Indebtedness any payment or distribution received on
account of the principal of or interest on the Debentures to which any
other holder of Senior Indebtedness shall be entitled to share in
accordance with Section 10.02 hereof, no holder of Senior Indebtedness
shall have a claim or right against any Debentureholders or the Trustee
with respect to any such payment or distribution or as a result of the
failure to make payments or distributions to such other holder of Senior
Indebtedness.
Section 10.05 Trustee May Take Action To Effectuate Subordination.
Each Debentureholder by his acceptance thereof authorizes and directs
the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate, as between the holders of Senior Indebtedness
and such Debentureholders, the subordination as provided in this Article
10 and appoints the Trustee as such Debentureholder's attorney-in-fact
for any and all such purposes.
Section 10.06 Subrogation.
Upon the payment in full, in cash or cash equivalents, of all Senior
Indebtedness, any Debentureholder shall be subrogated to the rights of
the holders of such Senior Indebtedness to receive payments or
distributions of assets of the Company made on such Senior Indebtedness
until the principal of and all accrued interest on the Debentures shall
be paid in full; and for the purposes of such subrogation, no payments
or distributions to holders of such Senior Indebtedness of any cash,
property, or securities to which such Debentureholders would be entitled
except for this Article 10, and no payment pursuant to this Article 10
to holders of such Senior Indebtedness by such Debentureholders shall,
as between the Company, its creditors other than holders of such Senior
Indebtedness, and such Debentureholders, be deemed to be a payment by
the Company to or on account of such Senior Indebtedness, it being
understood that the provisions of this Article 10 are solely for the
purpose of defining the relative rights of the holders of such Senior
Indebtedness, on the one hand, and such Debentureholders, on the other
hand.
If any payment or distribution to which such Debentureholders would
otherwise have been entitled but for the provisions of this Article 10
shall have been applied, pursuant to this Article 10, to the payment of
any Senior Indebtedness, then and in such case, such Debentureholders
shall be entitled to receive from the holders of such Senior
Indebtedness at the time outstanding any payments or distributions
received by such holders of Senior Indebtedness in excess of the amount
<PAGE>
sufficient to pay, in cash or cash equivalents, all such Senior
Indebtedness in full.
Section 10.07 Obligations Of Company Unconditional; Reinstatement.
Nothing in this Article 10, or elsewhere in this Indenture or in any
Debenture, is intended to or shall impair, as between the Company and
Debentureholders, the obligations of the Company, which are absolute and
unconditional, to pay to such Debentureholders the principal of and
interest on the Debentures as and when the same shall become due and
payable in accordance with their terms, or is intended to or shall
affect the relative rights of such Debentureholders and creditors of the
Company other than the holders of the Senior Indebtedness, nor shall
anything herein or therein prevent the Trustee, the Special
Representative, or any Debentureholder from exercising all remedies
otherwise permitted by applicable law upon Default under this Indenture,
subject to the rights, if any, under this Article 10 of the holders of
such Senior Indebtedness in respect of cash, property, or securities of
the Company received upon the exercise of any such remedy.
The failure to make a scheduled payment of principal of, or interest
on, the Debentures by reason of Section 10.02 shall not be construed as
preventing the occurrence of an Event of Default under Section 6.01
hereof; provided, however, that if (i) the conditions preventing the
making of such payment no longer exist, and (ii) such Debentureholders
are made whole with respect to such omitted payments, the Event of
Default relating thereto (including any failure to pay any accelerated
amounts) shall be automatically waived, and the provisions of the
Indenture shall be reinstated as if no such Event of Default had
occurred.
Section 10.08 Trustee Entitled To Assume Payments Not Prohibited In
Absence Of Notice.
The Trustee or Paying Agent (provided the Paying Agent is not the
Company or an Affiliate of the Company) shall not be charged with the
knowledge of the existence of any facts which would prohibit the making
of any payment to or by the Trustee or such Paying Agent, unless and
until the Trustee or such Paying Agent shall have received written
notice thereof from the Company or one or more holders of Senior
Indebtedness or from any trustee or agent therefor or unless the Trustee
or such Paying Agent otherwise had actual knowledge thereof; and, prior
to the receipt of any such written notice or actual knowledge, the
Trustee or such Paying Agent may conclusively assume that no such facts
exist.
Unless at least one day prior to the date when by the terms of this
Indenture any monies are to be deposited by the Company with the Trustee
or any Paying Agent for any purpose (including, without limitation, the
payment of the principal of or the interest on any Debenture), the
Trustee or Paying Agent shall, except where no notice is necessary, have
received with respect to such monies the notice provided for in the
preceding sentence, the Trustee or Paying Agent shall have full power
and authority to receive and apply such monies to the purpose for which
they were received. Neither of them shall be affected by any notice to
the contrary, which may be received by either on or after such date.
The foregoing shall not apply to the Paying Agent if the Company is
acting as Paying Agent. Nothing in this Section 10.08 shall limit the
right of the holders of Senior Indebtedness to recover payments as
contemplated by Section 10.02 hereof. The Trustee or Paying Agent shall
<PAGE>
be entitled to rely on the delivery to it of a written notice by a
Person representing himself, herself or itself to be a holder of such
Senior Indebtedness (or a trustee on behalf of, or other representative
of, such holder) to establish that such notice has been given by a
holder of such Senior Indebtedness or a trustee or representative on
behalf of any such holder. The Trustee shall not be deemed to have any
duty to the holders of Senior Indebtedness.
Section 10.09 Right Of Trustee To Hold Senior Indebtedness.
The Trustee and any Paying Agent shall be entitled to all of the
rights set forth in this Article 10 in respect of any Senior
Indebtedness at any time held by them to the same extent as any other
holder of such Senior Indebtedness, and nothing in this Indenture shall
be construed to deprive the Trustee or any Paying Agent of any of its
rights as such holder.
ARTICLE 11
MISCELLANEOUS
Section 11.01 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies, or conflicts
with the duties imposed by operation of subsection (c) of Section 318 of
the TIA, the imposed duties shall control. The provisions of Sections
310 to 317, inclusive, of the TIA that impose duties on any Person
(including provisions automatically deemed included in an indenture
unless the indenture provides that such provisions are excluded) are a
part of and govern this Indenture, except as, and to the extent, they
are expressly excluded from this Indenture, as permitted by the TIA.
Section 11.02 Notices.
Any notice or communication shall be in writing and delivered in
person or mailed by first-class mail, postage prepaid, addressed as
follows:
if to the Company:
The Connecticut Light and Power Company
Selden Street
Berlin, Connecticut 06037
Attention: John B. Keane, Vice President and Treasurer
if to the Trustee:
Bankers Trust Company
Four Albany Street
New York, New York 10006
Attention: Corporate Trust Department
The Company or the Trustee, by giving notice to the other, may
designate additional or different addresses for subsequent notices of
communications. The Company shall notify the holder, if any, of Senior
Indebtedness of any such additional or different addresses of which the
Company receives notice from the Trustee.
<PAGE>
Any notice or communication given to a Debentureholder other than CL&P
Capital shall be mailed to the Debentureholder at the Debentureholder's
address as it appears on the Register of the Registrar and shall be
sufficiently given if mailed within the time prescribed.
Failure to mail a notice or communication to a Debentureholder or any
defect in it shall not affect its sufficiency with respect to other
Debentureholders. If a notice or communication is mailed in the manner
provided above, it is duly given, whether or not received by the
addressee.
If the Company mails a notice or communication to the
Debentureholders, it shall mail a copy to the Trustee and each
Registrar, Paying Agent, or co-Registrar.
Section 11.03 Communication By Holders With Other Holders.
Debentureholders may communicate, pursuant to TIA Section 312(b), with
other Debentureholders with respect to their rights under this Indenture
or the Debentures. The Trustee, the Company, the Registrar, the Paying
Agent, and anyone else shall have the protection afforded to the Trustee
in TIA Section 312(c).
Section 11.04 Certificate And Opinion As To Conditions Precedent.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the
Trustee:
(1) an Officer's Certificate (complying with Section 11.05 hereof)
stating that, in the opinion of such Officer, all conditions precedent
to the taking of such action have been complied with; and
(2) if appropriate, an Opinion of Counsel (complying with Section
11.05 hereof) stating that, in the opinion of such counsel, all such
conditions precedent to the taking of such action have been complied
with.
Section 11.05 Statements Required In Certificate Or Opinion.
Each Officer's Certificate and Opinion of Counsel with respect to
compliance with a covenant or condition provided for in this Indenture
shall include:
(1) a statement that each Person making such Officer's Certificate or
Opinion of Counsel has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
Officer's Certificate or Opinion of Counsel are based;
(3) a statement that, in the opinion of each such Person, he has made
such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement that, in the opinion of such Person, such covenant or
condition has been complied with; provided, however, that with respect
to matters of fact not involving any legal conclusion, an Opinion of
<PAGE>
Counsel may rely on an Officer's Certificate or certificates of public
officials.
Section 11.06 Severability Clause.
If any provision in this Indenture or in the Debentures shall be
invalid, illegal, or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
Section 11.07 Rules By Trustee, Paying Agent And Registrar.
The Trustee may make reasonable rules for action by or a meeting of
Debentureholders. The Registrar and Paying Agent may make reasonable
rules for their functions.
Section 11.08 Legal Holidays.
A "Legal Holiday" is any day other than a Business Day. If any
specified date (including a date for giving notice) is a Legal Holiday,
the action to be taken on such date shall be taken on the next
succeeding day that is not a Legal Holiday, and if such action is a
payment in respect of the Debentures, no principal or interest
installment shall accrue for the intervening period; except that if any
interest payment is due on a Legal Holiday and the next succeeding day
is in the next succeeding calendar year, such payment shall be made on
the Business Day immediately preceding such Legal Holiday.
Section 11.09 Governing Law.
This Indenture and the Debentures shall be governed by and construed
in accordance with the laws of the State of Connecticut as applied to
contracts made and performed within the State of Connecticut, without
regard to its principles of conflicts of laws; provided, however, that
the obligations of the Trustee under this Indenture shall be governed by
the laws of the State of New York as applied to contracts made and
performed within the State of New York, without regard to its principles
of conflicts of laws.
Section 11.10 No Recourse Against Others.
No director, officer, employee, or stockholder, as such, of the
Company shall have any liability for any obligations of the Company
under the Debentures or this Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation. By
accepting a Debenture, each Debentureholder shall waive and release all
such liability. The waiver and release shall be part of the
consideration for the issue of the Debentures.
Section 11.11 Successors.
All agreements of the Company in this Indenture and the Debentures
shall bind its successors and assigns. All agreements of the Trustee in
this Indenture shall bind its successors and assigns.
Section 11.12 Multiple Original Copies Of This Indenture.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the
same agreement. Any signed copy shall be sufficient proof of this
<PAGE>
Indenture.
Section 11.13 No Adverse Interpretation Of Other Agreements.
This Indenture may not be used to interpret another indenture, loan,
or debt agreement of the Company or any Subsidiary. Any such indenture,
loan, or debt agreement may not be used to interpret this Indenture.
Section 11.14 Table Of Contents; Headings, Etc.
The Table of Contents, Cross-Reference Table, and headings of the
Articles and Sections of this Indenture have been inserted for
convenience of reference only, are not to be considered a part hereof,
and shall in no way modify or restrict any of the terms or provisions
hereof.
Section 11.15 Benefits Of The Indenture.
Except as expressly provided in Article 10 hereof, nothing in this
Indenture or in the Debentures, express or implied, shall give to any
person, other than the parties hereto and their successors hereunder,
the Holders, and the Special Representative, any benefit or any legal or
equitable right, remedy, or claim under this Indenture.
<PAGE>
SIGNATURES
IN WITNESS WHEREOF, the undersigned, being duly authorized, have
executed this Indenture on behalf of the respective parties hereto as of
the date first above written.
THE CONNECTICUT LIGHT AND POWER COMPANY
By:/s/John B. Keane
-----------------------------------
Name: John B. Keane
Title: Vice President and Treasurer
BANKERS TRUST COMPANY,
as Trustee
By:/s/Scott Thiel
------------------------------------
Name: Scott Thiel
Title: Assistant Treasurer
CL&P CAPITAL, L.P.
By: The Connecticut Light and Power Company,
Its General Partner
By:/s/John B. Keane
-----------------------------------
Name: John B. Keane
Title: Vice President and Treasurer
Solely for the purposes stated
in the recitals hereto.
<PAGE>
EXHIBIT A
[FORM OF DEBENTURE]
9.30% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES,
SERIES A DUE 2044
No. _________ $_______________
The Connecticut Light and Power Company, a Connecticut corporation
(the "Company," which term includes any successor corporation under the
Indenture hereinafter referred to), for value received, hereby promises
to pay to _____________________ or registered assigns, the principal sum
of __________________ Dollars on January 31, 2044 and to pay interest on
said principal sum from _______ __, ____ or from the most recent
interest payment date (each such date, an "Interest Payment Date") to
which interest has been paid or duly provided for, monthly in arrears on
the last day of each calendar month of each year commencing _______ __,
____ at the rate of 9.30% per annum plus Additional Interest, if any,
until the principal hereof shall have become due and payable, and on any
overdue principal and premium, if any, and (to the extent that payment
of such interest is permitted by applicable law) on any overdue
installment of interest at the same rate per annum.
The amount of interest payable on any Interest Payment Date shall be
computed on the basis of a 360-day year composed of twelve 30-day
months. In the event that any date on which interest is payable on this
Debenture is not a Business Day, then payment of interest payable on
such date will be made on the next succeeding day which is a Business
Day (and without any interest or other payment in respect of any such
delay), except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on
such date. The interest installment so payable, and punctually paid or
duly provided for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the person in whose name this Debenture is
registered at the close of business on the Regular Record Date for such
interest installment, which shall be the close of business on the
Business Day next preceding such Interest Payment Date. Any such
interest installment not punctually paid or duly provided for shall
forthwith cease to be payable to the registered holders on such Regular
Record Date, and may be paid to the person in whose name this Debenture
is registered at the close of business on a special Record Date to be
fixed by the Trustee for the payment of such defaulted interest, notice
whereof shall be given to the registered holders of this series of
Debentures not less than 10 days prior to such special Record Date, as
more fully provided in the Indenture hereinafter referred to. The
principal of, premium, if any, and the interest on, this Debenture shall
be payable at the office or agency of the Company maintained for that
purpose pursuant to the Indenture in any coin or currency of the United
States of America which at the time of payment is legal tender for
payment of public and private debts; provided, however, that payment of
interest may be made at the option of the Company by check mailed to the
registered holder at such address as shall appear in the Register.
Notwithstanding the foregoing, so long as the holder of this Debenture
is CL&P Capital, the payment of the principal of, premium, if any, and
interest (including Additional Interest, if any) pursuant to this
Debenture will be made at such place and to such account as may be
designated by CL&P Capital.
<PAGE>
The indebtedness evidenced by this Debenture is, to the extent
provided in the Indenture hereinafter referred to, subordinate and
subject in right of payment to the prior payment in full of all Senior
Indebtedness, and this Debenture is issued subject to the provisions of
such Indenture with respect thereto. Each Holder of this Debenture, by
accepting the same, (a) agrees to and shall be bound by such provisions,
(b) authorizes and directs the Trustee on such Holder's behalf to take
such action as may be necessary or appropriate to acknowledge or
effectuate the subordination so provided, and (c) appoints the Trustee
as such Holder's attorney-in-fact for any and all such purposes. Each
Holder hereof, by such Holder's acceptance hereof, hereby waives all
notice of the acceptance of the subordination provisions contained
herein and in the Indenture by each holder of Senior Indebtedness,
whether now outstanding or hereafter incurred, and waives reliance by
each such holder upon said provisions.
This Debenture is one of a duly authorized series of Debentures of the
Company (herein sometimes referred to as the "Series A Debentures"),
issued under and pursuant to, and limited in aggregate principal amount
as specified in, an Indenture dated as of January 1, 1995 (the
"Indenture"), executed and delivered between the Company and Bankers
Trust Company, as trustee (the "Trustee"), to which reference is made
for a description of the rights, limitations of rights, obligations,
duties and immunities thereunder of the Trustee, the Company, and the
holders of the Series A Debentures and any other series of debentures
issued thereunder (collectively with the Series A Debentures, the
"Debentures"). By the terms of the Indenture, Debentures are issuable
in series which may vary as to amount, date of maturity, rate of
interest, and in other respects as in the Indenture provided.
The Series A Debentures are subject to redemption prior to maturity at
the option of the Company at the price of 100% of the principal amount
thereof plus accrued interest to the redemption date in whole or in part
(i) from time to time on or after January 31, 2000, (ii) from time to
time upon or after the dissolution of CL&P Capital, or (iii) from time
to time if the Company shall be required to pay Additional Interest
thereon.
The Series A Debentures are subject to mandatory redemption prior to
maturity at the price of 100% of the principal amount thereof plus
accrued interest to the redemption date in whole or in part upon a
redemption of the Series A Preferred Securities (as defined in the
Indenture), but if in part, in an aggregate principal amount equal to
the aggregate stated liquidation preference of the Series A Preferred
Securities redeemed.
In the event of redemption of this Debenture in part only, a new
Debenture or Debentures of this series for the unredeemed portion hereof
will be issued in the name of the Holder hereof upon the cancellation
hereof.
In case an Event of Default shall have occurred and be continuing, the
principal of all of the Debentures may be declared, and upon such
declaration shall become, due and payable, in the manner, with the
effect, and subject to the conditions provided in the Indenture.
The Indenture contains provisions for defeasance at any time of the
entire indebtedness of this Debenture upon compliance by the Company
with certain conditions set forth therein.
<PAGE>
Subject to certain exceptions in the Indenture which require the
consent of every Holder, (i) the Indenture or the Series A Debentures
may be amended with the written consent of the Holders of 66 2/3% in
aggregate principal amount of the Series A Debentures at the time
outstanding, and (ii) certain defaults or noncompliance with certain
provisions may be waived by the written consent of the Holders of 66
2/3% in aggregate principal amount of the Series A Debentures at the
time outstanding; provided, however, that if any other series of the
Debentures is at the time outstanding, then such written consents shall
be by Holders of 66 2/3% in aggregate principal amount of all Debentures
at the time outstanding and affected by such amendment or waiver.
Subject to certain exceptions in the Indenture, without the consent of
any Debentureholder, the Company and the Trustee may amend the Indenture
or the Debentures to cure any ambiguity, defect, or inconsistency, to
bind a successor to the Company to the obligations of the Indenture, to
provide for uncertificated Debentures in addition to or in place of
certificated Debentures, to comply with any requirements of the
Securities and Exchange Commission in connection with the qualification
of the Indenture under the TIA, or to make any change that does not
adversely affect the rights of any Debentureholder. Amendments bind all
Holders and subsequent Holders.
No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligation of
the Company, which is absolute and unconditional, to pay the principal
of and premium, if any, and interest on this Debenture at the time and
place and at the rate and in the money herein prescribed.
The Company shall have the right at any time during the term of the
Series A Debentures, from time to time to extend the interest payment
period of such Debentures to up to 60 months (the "Extension Period"),
provided that such Extension Period may not extend beyond the stated
maturity date or the date of redemption of the Debentures, and provided
further that at the end of each Extension Period the Company shall pay
all interest then accrued and unpaid (together with interest thereon
compounded monthly at the rate specified for the applicable series of
Debentures, to the extent permitted by applicable law). During an
Extension Period the Company shall not declare or pay any dividend on,
redeem, or purchase any of its capital stock. Prior to the termination
of any Extension Period, the Company may shorten or further extend the
interest payment period, provided that such Extension Period together
with all such further extensions thereof shall not exceed 60 consecutive
months. At the termination of any such Extension Period and upon the
payment of all accrued and unpaid interest and any additional amounts
then due, the Company may select a new Extension Period.
As provided in the Indenture and subject to certain limitations
therein set forth, this Debenture is transferable by the registered
holder hereof on the Debenture Register of the Company, upon surrender
of this Debenture for registration of transfer at the office or agency
of the Trustee accompanied by a written instrument or instruments of
transfer in form satisfactory to the Company or the Trustee duly
executed by the registered holder hereof or his attorney duly authorized
in writing, and thereupon one or more new Debentures of authorized
denominations and for the same aggregate principal amount and series
will be issued to the designated transferee or transferees. No service
charge will be made for any such transfer, but the Company may require
payment of a sum sufficient to cover any tax or other governmental
charge payable in relation thereto.
<PAGE>
Prior to presentment for registration of transfer of this Debenture,
the Company, the Trustee, any paying agent, and any Registrar may deem
and treat the registered holder hereof as the absolute owner hereof
(whether or not this Debenture shall be overdue and notwithstanding any
notice of ownership or writing hereon made by anyone other than the
Registrar) for the purpose of receiving payment of or on account of the
principal hereof and premium, if any, and interest due hereon and for
all other purposes, and neither the Company nor the Trustee nor any
payment agent nor any Registrar shall be affected by any notice to the
contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Debenture, or for any claim based hereon, or otherwise
in respect hereof, or based on or in respect of the Indenture, against
any incorporator, stockholder, officer or director, past, present or
future, as such, of the Company or of any predecessor or successor
corporation, whether by virtue of any constitution, statute or rule of
law, or by the enforcement of any assessment or penalty or otherwise,
all such liability being, by the acceptance hereof and as part of the
consideration for the issuance hereof, expressly waived and released.
Debentures of this series so issued are issuable only in registered form
without coupons in denominations of $25 and any integral multiple
thereof. As provided in the Indenture and subject to certain
limitations therein set forth, Debentures of this series are
exchangeable for a like aggregate principal amount of Debentures of this
series of a different authorized denomination, as requested by the
Holder surrendering the same.
All terms used in this Debenture which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
This Debenture shall not be valid until an authorized officer of the
Trustee manually signs the Trustee's Certificate of Authentication
below.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Debenture to be signed
manually or by facsimile by its duly authorized officers and a facsimile
of its corporate seal to be affixed hereto or imprinted hereon.
THE CONNECTICUT LIGHT AND POWER COMPANY
By:
-------------------------------------
Name:
Title:
Dated:____________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This Is One Of The Debentures Referred
To In The Within-mentioned Indenture.
BANKERS TRUST COMPANY
By:
Authorized Signatory
<PAGE>
ASSIGNMENT FORM
To assign this Debenture, fill in the form below: (I) or (we) assign
and transfer this Debenture to:
- ------------------------------------------------------------
(Insert assignee's social security or tax I.D. number)
- ------------------------------------------------------------
(Print or type assignee's name, address, and zip code)
and irrevocably appoint _________________________________ agent to
transfer this Debenture on the books of the Company. The agent may
substitute another to act for him.
Dated:________________ Signature:_______________________________
(Sign exactly as your name appears
on this Debenture)
Signature Guaranty:_______________________
The Connecticut Light and Power Company
Western Massachusetts Electric Company
File No. 70-8451
Exhibit B.3
(Execution Copy)
_________________________________________________________________
_________________________________________________________________
__________________________________________
PAYMENT AND GUARANTY AGREEMENT
of
THE CONNECTICUT LIGHT AND POWER COMPANY
Dated as of January 23, 1995
__________________________________________
_________________________________________________________________
_________________________________________________________________
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.01. Guarantor's Obligation to Pay. . . . . . . . . . . . 2
Section 2.02. Waiver of Notice Etc.. . . . . . . . . . . . . . . . 3
Section 2.03. No Impairment of Guarantor's Obligations . . . . . . 3
Section 2.04. Guaranty Agreement for the Benefit of Holders. . . . 3
Section 2.05. Enforcement Directly Against the Guarantor . . . . . 4
Section 2.06. Subrogation. . . . . . . . . . . . . . . . . . . . . 4
Section 2.07. Obligation Independent . . . . . . . . . . . . . . . 4
ARTICLE III. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.01. Restriction on Distributions . . . . . . . . . . . . 5
Section 3.02. Consolidation, Merger, Etc . . . . . . . . . . . . . 5
Section 3.03. Subordination. . . . . . . . . . . . . . . . . . . . 5
ARTICLE IV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE V. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 5.01. Successors, Assigns, Etc . . . . . . . . . . . . . . 5
Section 5.02. Amendment. . . . . . . . . . . . . . . . . . . . . . 5
Section 5.03. Notices. . . . . . . . . . . . . . . . . . . . . . . 6
Section 5.04. Guaranty Inseparable from the Preferred Securities . 6
Section 5.05. Governing Law. . . . . . . . . . . . . . . . . . . . 6
SIGNATURE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
<PAGE>
PAYMENT AND GUARANTY AGREEMENT
THIS PAYMENT AND GUARANTY AGREEMENT ("Guaranty Agreement"), dated as
of January 23, 1995, is executed and delivered by The Connecticut Light
and Power Company, a Connecticut corporation (the "Guarantor"), for the
benefit of the Holders (as defined below) from time to time of the
Preferred Securities (as defined below) of CL&P Capital, L.P., a
Delaware limited partnership ("CL&P Capital").
WHEREAS, pursuant to the Amended and Restated Limited Partnership
Agreement, dated as of the date hereof, of CL&P Capital (the
"Partnership Agreement"), CL&P Capital may issue one or more series of
Cumulative Monthly Income Preferred Securities (the "Preferred
Securities"); and
WHEREAS, pursuant to the Partnership Agreement, CL&P Capital will loan
the proceeds from the issuance and sale of the Preferred Securities and
the capital contribution of the General Partner (as defined below) to
CL&P Capital to the Guarantor, and the Guarantor will issue subordinated
debentures (the "Debentures") in accordance with the Indenture (as
defined below) to evidence such loan; and
WHEREAS, the Guarantor desires to irrevocably and unconditionally
agree, to the extent set forth herein, to pay to the Holders (as defined
below) the Guaranty Payments (as defined below) and to make certain
other undertakings on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and other
consideration, receipt of which is hereby acknowledged, the Guarantor,
intending to be legally bound hereby, agrees as follows:
ARTICLE I
As used in this Guaranty Agreement, each term set forth below shall,
unless the context otherwise requires, have the following meaning. Each
capitalized term used but not otherwise defined herein shall have the
meaning assigned to such term in the Partnership Agreement.
"Capital Stock" means any and all shares, interests, rights to
purchase, warrants, options, participations, or other equivalents of or
interests in (however designated) corporate stock, including any
preferred stock.
"General Partner" shall mean the Guarantor or its successor(s) as
general partner of CL&P Capital.
"Guaranty Payments" shall mean the following payments, without
duplication, to the extent not paid by CL&P Capital: (i) any accumulated
and unpaid monthly distributions on the Preferred Securities out of
monies legally available therefor held by CL&P Capital, (ii) the
Redemption Price (as defined below) payable with respect to any
Preferred Securities required to be redeemed by CL&P Capital out of
monies legally available therefor held by CL&P Capital, and (iii) upon a
liquidation of CL&P Capital, the lesser of (a) the Liquidation
Distribution (as defined below) and (b) the amount of assets of CL&P
Capital available for distribution to Holders in liquidation of CL&P
Capital.
<PAGE>
"Holder" shall mean any person in whose name a Preferred Security is
registered on the registration books maintained by CL&P Capital;
provided, however, that in determining whether the Holders of the
requisite percentage of Preferred Securities have given any request,
notice, consent, or waiver hereunder, "Holder" shall not include the
Guarantor or any corporation, association, partnership, or other
business entity of which more than 50% of the total voting power of
shares of Capital Stock or other interests (including partnership
interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers, or trustees
thereof is at the time owned or controlled, directly or indirectly, by
(i) the Guarantor, (ii) the Guarantor and one or more Subsidiaries, or
(iii) one or more Subsidiaries.
"Indenture" shall mean the Indenture, dated January 1, 1995, between
the Guarantor and Bankers Trust Company, as trustee, governing the
issuance by Guarantor of the Debentures.
"Liquidation Distribution" shall mean the aggregate of the stated
liquidation preference of $25 per Preferred Security and all accumulated
and unpaid distributions to the date of payment.
"Redemption Price" shall mean the aggregate of $25 per Preferred
Security and all accumulated and unpaid distributions to the date fixed
for redemption.
"Special Representative" shall mean any representative of the Holders
appointed pursuant to Section 13.02(d) of the Partnership Agreement.
"Subsidiary" means any corporation, association, partnership, or other
business entity of which more than 50% of the total voting power of
shares of Capital Stock or other interests (including partnership
interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers, or trustees
thereof is at the time owned or controlled, directly or indirectly, by
(i) the Guarantor, (ii) the Guarantor and one or more Subsidiaries, or
(iii) one or more Subsidiaries.
ARTICLE II
Section 2.01. Guarantor's Obligation to Pay. The Guarantor hereby
irrevocably and unconditionally agrees to pay in full to the Holders the
Guaranty Payments, as and when due (except to the extent paid by CL&P
Capital), to the fullest extent permitted by law, regardless of any
defense, right of set-off, or counterclaim which the Guarantor may have
or assert against CL&P Capital or the General Partner. The Guarantor's
obligation to make a Guaranty Payment may be satisfied by direct payment
by the Guarantor to the Holders or by payment of such amounts by CL&P
Capital to the Holders. Notwithstanding anything to the contrary
herein, the Guarantor retains all of its rights under Section 4.01(b) of
the Indenture to extend the interest payment period on the Debentures
(an "Extension Period") and the Guarantor shall not be obligated
hereunder to pay during any Extension Period any monthly distributions
on the Preferred Securities which are not paid by CL&P Capital during
such Extension Period.
Section 2.02. Waiver of Notice Etc. The Guarantor hereby waives
notice of acceptance of this Guaranty Agreement and of any liability to
which it applies or may apply, presentment, demand for payment, protest,
notice of nonpayment, notice of dishonor, notice of redemption, and all
<PAGE>
other notices and demands.
Section 2.03. No Impairment of Guarantor's Obligations. Except as
otherwise set forth herein, the obligations, covenants, agreements, and
duties of the Guarantor under this Guaranty Agreement shall in no way be
affected or impaired by reason of the happening from time to time of any
of the following:
(1) the release or waiver, by operation of law or otherwise, of
the performance or observance by CL&P Capital of any express or
implied agreement, covenant, term, or condition relating to the
Preferred Securities to be performed or observed by CL&P Capital;
(2) the extension of time for the payment by CL&P Capital of all
or any portion of the distributions, Redemption Price, Liquidation
Distribution, or any other sums payable under the terms of the
Preferred Securities or the extension of time for the performance of
any other obligation under, arising out of, or in connection with, the
Preferred Securities;
(3) any failure, omission, delay, or lack of diligence on the
part of the Holders or the Special Representative to enforce, assert,
or exercise any right, privilege, power, or remedy conferred on the
Holders or the Special Representative pursuant to the terms of the
Preferred Securities, or any action on the part of CL&P Capital
granting indulgence or extension of any kind;
(4) the voluntary or involuntary liquidation, dissolution,
receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition, or readjustment
of debt of, or other similar proceedings affecting, CL&P Capital or
any of the assets of CL&P Capital;
(5) any invalidity of, or defect or deficiency in, any of the
Preferred Securities; or
(6) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred.
There shall be no obligation to the Holders to give notice to or obtain
the consent of the Guarantor with respect to the occurrence of any of
the foregoing.
Section 2.04. Guaranty Agreement for the Benefit of Holders. The
Guarantor expressly acknowledges that (i) this Guaranty Agreement will
be deposited with the General Partner to be held for the benefit of the
Holders; (ii) in the event of the appointment of a Special
Representative, the Special Representative may enforce this Guaranty
Agreement for such purpose; (iii) if no Special Representative has been
appointed, the General Partner has the right to enforce this Guaranty
Agreement on behalf of the Holders; (iv) the Holders of not less than
10% in aggregate stated liquidation preference of the Preferred
Securities have the right to direct the time, method, and place of
conducting any proceeding for any remedy available in respect of this
Guaranty Agreement including the giving of directions to the General
Partner or the Special Representative as the case may be; and (v) if the
General Partner or the Special Representative fails to enforce this
Guaranty Agreement as above provided, any Holder may institute a legal
proceeding directly against the Guarantor to enforce its rights under
this Guaranty Agreement, without first instituting a legal proceeding
<PAGE>
against CL&P Capital or any other person or entity.
Section 2.05. Enforcement Directly Against the Guarantor. This is a
guaranty of payment and not of collection. A Holder or the Special
Representative may enforce this Guaranty Agreement directly against the
Guarantor, and the Guarantor will waive any right or remedy to require
that any action be brought against CL&P Capital or any other person or
entity before proceeding against the Guarantor. The Guarantor agrees
that this Guaranty Agreement shall not be discharged except by payment
of the Guaranty Payments in full (to the extent not paid by CL&P
Capital) and by complete performance of all obligations of the Guarantor
contained in this Guaranty Agreement.
Section 2.06. Subrogation. The Guarantor will be subrogated to all
rights of the Holders against CL&P Capital in respect of any amounts
paid to the Holders by the Guarantor under this Guaranty Agreement;
provided, however, that the Guarantor hereby releases the Holders from
all, and agrees not to assert or enforce (whether by or in a legal or
equitable proceeding or otherwise) any, "claims" (as defined in Section
101(5) of the United States Bankruptcy Code) against CL&P Capital,
whether arising under applicable law or otherwise, to which the
Guarantor is or would at any time be entitled (by virtue of its
obligations hereunder or any payment made pursuant hereto, including any
such claims to which the Guarantor may be entitled as a result of any
right of subrogation or any indemnity, reimbursement or other
agreement); provided further that to the extent such rights are not so
released, the Guarantor shall not (except to the extent required by
mandatory provisions of law) exercise any such rights (including by way
of subrogation or any indemnity, reimbursement or other agreement), in
all cases as a result of a payment under this Guaranty Agreement, if, at
the time of any such payment, any amounts are due and unpaid under this
Guaranty Agreement. To the extent that any amounts shall be paid to the
Guarantor in violation of the preceding sentence, such amounts shall be
held in trust by the Guarantor for the benefit of the Holders and not
commingled with any of the Guarantor's other funds and the Guarantor
agrees to pay over such amounts to the Holders.
Section 2.07. Obligation Independent. The Guarantor acknowledges
that its obligations hereunder are independent of the obligations of
CL&P Capital with respect to the Preferred Securities and that the
Guarantor shall be liable as principal and sole debtor hereunder to make
Guaranty Payments pursuant to the terms of this Guaranty Agreement
notwithstanding the occurrence of any event referred to in subsections
(1) through (6), inclusive, of Section 2.03 hereof.
ARTICLE III
Section 3.01. Restriction on Distributions. So long as any Preferred
Securities remain outstanding, neither the Guarantor nor any Subsidiary
shall declare or pay any dividend on, or redeem, purchase, acquire, or
make a liquidation payment with respect to, any of its Capital Stock
(other than dividends paid by a wholly-owned Subsidiary) if at such time
the Guarantor shall be in default with respect to its payment or other
obligations hereunder or if there shall have occurred and be continuing
any Default or Event of Default under the Indenture. The Guarantor
shall take all actions necessary to ensure the compliance of any
Subsidiaries with this Section 3.01.
Section 3.02. Consolidation, Merger, Etc. So long as any Preferred
Securities are outstanding, the Guarantor agrees to maintain its
<PAGE>
corporate existence; provided that the Guarantor may consolidate with or
merge with or into, or sell, convey, transfer, or lease all or
substantially all of its assets (either in one transaction or a series
of transactions) to, any person, corporation, partnership, limited
liability company, joint venture association, joint stock company,
trust, or unincorporated association if such entity formed by or
surviving such consolidation or merger or to which such sale,
conveyance, transfer, or lease shall have been made, if other than the
Guarantor, (i) is organized and existing under the laws of the United
States of America or any state thereof or the District of Columbia, and
(ii) shall expressly assume all the obligations of the Guarantor under
this Agreement.
Section 3.03. Subordination. This Guaranty Agreement will constitute
an unsecured obligation of the Guarantor and will rank subordinate and
junior in right of payment to all general liabilities of the Guarantor.
ARTICLE IV
This Guaranty Agreement shall terminate and be of no further force and
effect upon full payment of the Redemption Price of all Preferred
Securities then outstanding or upon full payment of the amounts payable
to the Holders upon liquidation of CL&P Capital; provided, however, that
this Guaranty Agreement shall continue to be effective or shall be
reinstated, as the case may be, if at any time any Holder must restore
payments of any sums paid under the Preferred Securities or under this
Guaranty Agreement for any reason whatsoever.
ARTICLE V
Section 5.01. Successors, Assigns, Etc. All guaranties and
agreements contained in this Guaranty Agreement shall bind the
successors, assigns, receivers, trustees, and representatives of the
Guarantor and shall inure to the benefit of the Holders. Except as
provided in Section 3.02, Guarantor may not assign its obligations
hereunder without the prior approval of the Holders of not less than 66
2/3% of the aggregate stated liquidation preference of all Preferred
Securities then outstanding.
Section 5.02. Amendment. This Guaranty Agreement may only be amended
by a written instrument executed by the Guarantor; provided that, so
long as any of the Preferred Securities remain outstanding, any such
amendment that adversely affects the Holders, any termination of this
Guaranty Agreement, and any waiver of compliance with any covenant
hereunder shall be effected only with the prior approval of the Holders
of not less than 66 2/3% of the aggregate liquidation preference of all
Preferred Securities then outstanding.
Section 5.03. Notices. Any notice or communication to the Guarantor
shall be in writing and delivered in person or mailed by first-class
mail, postage prepaid, addressed as follows:
The Connecticut Light and Power Company
Selden Street
Berlin, Connecticut 06037
Attention: John B. Keane, Vice President and Treasurer
The Guarantor, by giving notice to the General Partner or Special
Representative, may designate additional or different addresses for
subsequent notices or communications.
<PAGE>
All notices, requests, or other communications required or permitted
to be given hereunder to the Holders shall be deemed given if in writing
and delivered by the Guarantor in the same manner as notices sent by
CL&P Capital to the Holders.
Section 5.04. Guaranty Inseparable from the Preferred Securities.
This Guaranty Agreement is solely for the benefit of the Holders and is
not separately transferable from the Preferred Securities.
Section 5.05. Governing Law. This Guaranty Agreement shall be
governed by and construed and interpreted in accordance with the laws of
the State of Connecticut without giving effect to conflict of law
principles thereof.
<PAGE>
THIS GUARANTY AGREEMENT is executed as of the day and year first above
written.
THE CONNECTICUT LIGHT AND POWER COMPANY
By /s/John B. Keane
------------------------------------
Name: John B. Keane
Title: Vice President and Treasurer
The Connecticut Light and Power Company
Western Massachusetts Electric Company
File No. 70-8451
Exhibit B.5
(Execution Copy)
CL&P CAPITAL, L.P.
Preferred Securities
representing limited partner interests
guaranteed to the extent described in
the applicable Pricing Agreement
by The Connecticut Light and Power Company
Underwriting Agreement
January 13, 1995
Goldman, Sachs & Co.
Salomon Brothers Inc
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Morgan Stanley & Co. Incorporated
Prudential Securities Incorporated
Smith Barney Inc.
c/o Goldman, Sachs & Co.
85 Broad Street,
New York, New York 10004.
To the Representatives of the several
Underwriters named in the respective
Pricing Agreements hereinafter described.
Ladies and Gentlemen:
From time to time CL&P Capital, L.P. ("CL&P Capital"), a limited
partnership formed under the laws of the State of Delaware, as issuer, and The
Connecticut Light and Power Company, a Connecticut corporation, as guarantor
(the "Guarantor"), each proposes to enter into one or more Pricing Agreements
(each a "Pricing Agreement") in the form of Annex I hereto, with such additions
and deletions as the parties thereto may determine, and, subject to the terms
and conditions stated herein and therein, to issue and sell to the firms named
in Schedule I to the applicable Pricing Agreement (such firms constituting the
"Underwriters" with respect to such Pricing Agreement and the securities
specified therein) certain preferred securities representing limited partner
interests in CL&P Capital (liquidation preference $25 per preferred partner
interest) (the "Preferred Securities") specified in Schedule II to such Pricing
Agreement (with respect to such Pricing Agreement, the "Designated Preferred
Securities"), guaranteed by the Guarantor as to the payment of distributions,
to the extent CL&P Capital has cash on hand sufficient to permit such payments
and funds legally available therefor, and as to payments on liquidation or
redemption to the extent set forth in the Prospectus (as defined below) with
respect to such Preferred Securities (the "Guaranty"). The Designated
Preferred Securities and the Guaranty are herein collectively referred to as
the "Designated Securities".
The terms and rights of any particular issuance of Designated Securities
shall be as specified in the Pricing Agreement relating thereto.
<PAGE>
1. Particular sales of Designated Securities may be made from time to time
to the Underwriters of such Designated Securities, for whom the firms
designated as representatives of the Underwriters of such Designated Securities
in the Pricing Agreement relating thereto will act as representatives (the
"Representatives"). The term "Representatives" also refers to a single firm
acting as sole representative of the Underwriters and to Underwriters who act
without any firm being designated as their representative. This Underwriting
Agreement shall not be construed as an obligation of CL&P Capital to sell any
of the Preferred Securities or as an obligation of any of the Underwriters to
purchase any of the Preferred Securities. The obligation of CL&P Capital to
issue and sell any of the Preferred Securities and the obligation of any of the
Underwriters to purchase any of the Preferred Securities shall be evidenced by
the Pricing Agreement with respect to the Designated Securities specified
therein. Each Pricing Agreement shall specify the aggregate amount of
Designated Securities, the initial public offering price of such Designated
Securities or the manner of determining such price, the terms of the Designated
Securities, the purchase price to the Underwriters of such Designated
Securities, the names of the Underwriters of such Designated Securities, the
names of the Representatives of such Underwriters, the amount of such
Designated Securities to be purchased by each Underwriter and the commission,
if any, payable to the Underwriters with respect thereto and shall set forth
the date, time and manner of delivery of such Designated Securities, if any,
and payment therefor. The Pricing Agreement shall also specify (to the extent
not set forth in the registration statement and prospectus with respect
thereto) the terms of such Designated Securities. A Pricing Agreement shall be
in the form of an executed writing (which may be in counterparts), and may be
evidenced by an exchange of telegraphic communications or any other rapid
transmission device designed to produce a written record of communications
transmitted. The obligations of the Underwriters under this Agreement and each
Pricing Agreement shall be several and not joint.
2. Each of CL&P Capital and the Guarantor, jointly and severally,
represents and warrants to, and agrees with, each of the Underwriters that:
(a) A registration statement on Form S-3 (File No. 33-56537) in respect
of the Preferred Securities, the Guaranty and the Junior Subordinated
Deferrable Interest Debentures of the Guarantor (the "Debt Securities") has
been filed with the Securities and Exchange Commission (the "Commission");
such registration statement and any post-effective amendment thereto, each in
the form heretofore delivered or to be delivered to the Representatives and,
excluding exhibits to such registration statement, but including all
documents incorporated by reference in the prospectus included therein, to
the Representatives for each of the other Underwriters have been declared
effective by the Commission in such form; no other document with respect to
such registration statement or document incorporated by reference therein has
heretofore been filed, or transmitted for filing, with the Commission (other
than prospectuses filed pursuant to Rule 424(b) of the rules and regulations
of the Commission under the Securities Act of 1933, as amended (the "Act")
each in the form heretofore delivered to the Representatives); and no stop
order suspending the effectiveness of such registration statement has been
issued and no proceeding for that purpose has been initiated or threatened by
the Commission (any preliminary prospectus included in such registration
statement or filed with the Commission pursuant to Rule 424(a) under the Act,
is hereinafter called a "Preliminary Prospectus"; the various parts of such
registration statement, including all exhibits thereto and the documents
incorporated by reference in the prospectus contained in the registration
statement at the time such part of the registration statement became
effective but excluding Form T-1, each as amended at the time such part of
the registration statement became effective, are hereinafter collectively
<PAGE>
called the "Registration Statement"; the prospectus relating to the Preferred
Securities, the Guaranty and the Debt Securities, in the form in which it has
most recently been filed, or transmitted for filing, with the Commission on
or prior to the date of this Agreement, is hereinafter called the
"Prospectus"; any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents incorporated
by reference therein pursuant to the applicable form under the Act, as of the
date of such Preliminary Prospectus or Prospectus, as the case may be; any
reference to any amendment or supplement to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any documents filed after
the date of such Preliminary Prospectus or Prospectus, as the case may be,
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and incorporated by reference in such Preliminary Prospectus or Prospectus,
as the case may be; any reference to any amendment to the Registration
Statement shall be deemed to refer to and include any annual report of CL&P
Capital and the Guarantor filed pursuant to Section 13(a) or 15(d) of the
Exchange Act after the effective date of the Registration Statement that is
incorporated by reference in the Registration Statement; and any reference to
the Prospectus as amended or supplemented shall be deemed to refer to the
Prospectus as amended or supplemented in relation to the applicable
Designated Securities in the form in which it is filed with the Commission
pursuant to Rule 424(b) under the Act in accordance with Section 5(a) hereof,
including any documents incorporated by reference therein as of the date of
such filing);
(b) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and any
further documents so filed and incorporated by reference in the Prospectus or
any further amendment or supplement thereto, when such documents become
effective or are filed with the Commission, as the case may be, will conform
in all material respects to the requirements of the Act or the Exchange Act,
as applicable, and the rules and regulations of the Commission thereunder and
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in writing
to CL&P Capital by an Underwriter of Designated Preferred Securities through
the Representatives expressly for use in the Prospectus as amended or
supplemented relating to such Preferred Securities;
(c) The Registration Statement and the Prospectus conform, and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of the
Act and the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act") and the rules and regulations of the Commission thereunder and do not
and will not, as of the applicable effective date as to the Registration
Statement and any amendment thereto and as of the applicable filing date as
to the Prospectus and any amendment or supplement thereto, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply to
any statements or omissions made in reliance upon and in conformity with
information furnished in writing to CL&P Capital by an Underwriter of
Designated Preferred Securities through the Representatives expressly for use
<PAGE>
in the Prospectus as amended or supplemented relating to such Preferred
Securities;
(d) Neither CL&P Capital, the Guarantor nor any of the Guarantor's
subsidiaries has sustained since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus any
material loss or interference with its business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as
set forth or contemplated in the Prospectus; and, since the respective dates
as of which information is given in the Registration Statement and the
Prospectus, there has not been any change in the capital stock or long-term
debt of the Guarantor or any of its subsidiaries or any change in the capital
accounts or long-term debt of CL&P Capital or any material adverse change, or
any development involving a prospective material adverse change, in or
affecting (i) the general affairs, management, financial position,
stockholders equity or results of operations of the Guarantor and its
subsidiaries or (ii) the general affairs, management, financial position,
capital accounts or results of operations of CL&P Capital, otherwise than as
set forth or contemplated in the Prospectus;
(e) CL&P Capital has been duly formed and is validly existing as a
limited partnership in good standing under the Delaware Revised Uniform
Limited Partnership Act, as amended (the "Partnership Act"); CL&P Capital has
no subsidiaries; CL&P Capital is a special purpose limited partnership as
described in the Prospectus and has conducted and will conduct no business
other than the transactions contemplated by this Agreement and described in
the Prospectus; CL&P Capital is not a party to or bound by any agreement or
instrument other than its limited partnership agreement (in the form filed as
an exhibit to the Registration Statement, the "Limited Partnership
Agreement") and, solely for the purposes stated in the recitals thereto, the
Indenture (as defined in subsection (p) below); CL&P Capital has no
liabilities or obligations other than those arising out of the transactions
contemplated by this Agreement and described in the Prospectus; and CL&P
Capital is not a party to or subject to any action, suit or proceeding of any
nature;
(f) The Guarantor has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Connecticut,
with power and authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus; the Guarantor has been
duly qualified as a foreign corporation for the transaction of business and
is in good standing under the laws of each other jurisdiction in which it
owns or leases properties, or conducts any business, so as to require such
qualification;
(g) The Guarantor has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of common stock of the Guarantor
have been duly and validly authorized and issued and are fully paid and
non-assessable and are owned directly or indirectly by Northeast Utilities
("NU"), free and clear of all liens, encumbrances, equities or claims;
(h) The Preferred Securities have been duly and validly authorized,
and, when the Designated Securities are issued and delivered pursuant to this
Agreement and the Pricing Agreement with respect to such Designated
Securities, such Designated Securities will be duly and validly issued and
fully paid and non-assessable; the Preferred Securities conform in all
material respects to the description thereof contained in the Registration
Statement and the Designated Securities will conform in all material respects
to the description thereof contained in the Prospectus as amended or
<PAGE>
supplemented with respect to such Designated Securities;
(i) The Limited Partnership Agreement has been duly authorized by the
Guarantor and constitutes a valid and legally binding obligation of the
Guarantor, in its capacity as general partner of CL&P Capital, enforceable in
accordance with its terms, subject to bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium and other laws of general applicability
relating to or affecting creditors' rights and to general equity principles;
(j) The Guarantor is the sole general partner of CL&P Capital;
Northeast Utilities Service Company, a Connecticut corporation, is the sole
Class A Limited Partner of CL&P Capital (the "Class A Limited Partner"); and
the Class A Limited Partner has been duly incorporated and is validly
existing in good standing as a corporation under the laws of the State of
Connecticut, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus; and all
of the issued general and limited partner interests of CL&P Capital are owned
by the Guarantor and the Class A Limited Partner, respectively, and have been
duly and validly authorized and validly issued, free and clear of all liens,
encumbrances, equities or claims;
(k) The issue and sale of the Preferred Securities and the compliance
by CL&P Capital and the Guarantor with all of the provisions of this
Agreement, any Pricing Agreement, the Indenture (as defined in subsection (p)
below) and the Guaranty, and the consummation of the transactions
contemplated herein and therein will not conflict with or result in a breach
or violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which CL&P Capital or the Guarantor is a party or
by which CL&P Capital and the Guarantor is bound or to which any of the
property or assets of CL&P Capital or the Guarantor is subject, which
conflict, breach, violation or default would have a material adverse effect
on CL&P Capital or the Guarantor, nor will such action result in any
violation of the provisions of the Certificate of Incorporation or By-laws of
the Guarantor or the Certificate of Limited Partnership of CL&P Capital or
any statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over CL&P Capital or the Guarantor or any
of its properties, which violation would have a material adverse effect on
CL&P Capital or the Guarantor; and no consent, approval, authorization,
order, registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the
Preferred Securities or the consummation by the CL&P Capital or the Guarantor
of the transactions contemplated by this Agreement or any Pricing Agreement
or the Indenture or the Guaranty, except such as have been, or will have been
prior to each Time of Delivery (as defined in Section 4 hereof), obtained
under the Act and the Trust Indenture Act, the approval of the Commission
under the Public Utility Holding Company Act of 1935, as amended (the
"Holding Company Act") and the approval of the Connecticut Department of
Public Utility Control (the "DPUC"), and such consents, approvals,
authorizations, registrations or qualifications as may be required under
state securities or Blue Sky laws in connection with the purchase and
distribution of the Preferred Securities by the Underwriters;
(l) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which CL&P Capital, the Guarantor or any
of the Guarantor's subsidiaries is a party or of which any of their
properties is subject, which, if determined adversely to CL&P Capital, the
Guarantor or any of the Guarantor's subsidiaries, as the case may be, would
individually or in the aggregate have a material adverse effect on (i) the
current or future financial position, capital accounts or results of
<PAGE>
operations of CL&P Capital or (ii) the current or future consolidated
financial position, stockholders' equity or results of operations of the
Guarantor or any of its subsidiaries; and, to the best of CL&P Capital's and
the Guarantor's knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others;
(m) Neither the Guarantor nor any of its subsidiaries is in violation
of its Certificate of Incorporation or By-laws; CL&P Capital is not in
violation of its Certificate of Limited Partnership or the Limited
Partnership Agreement; and neither CL&P Capital, the Guarantor nor any of the
Guarantor's subsidiaries is in default in the performance or observance of
any material obligation, agreement, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, lease or other agreement
or instrument to which it is a party or by which it or any of its properties
may be bound;
(n) The statements set forth in the Prospectus under the captions
"Description of the Preferred Securities," "Description of the Subordinated
Debentures," and "Description of the Guaranty", insofar as they purport to
constitute a summary of the terms of the Preferred Securities, the Debt
Securities and the Guaranty, respectively, under the caption "United States
Taxation", and under the caption "Underwriting", insofar as they purport to
describe the provisions of the laws and documents referred to therein, are
accurate, complete and fair in all material respects;
(o) Neither CL&P Capital nor the Guarantor is and, after giving effect
to the offering and sale of the Preferred Securities, neither will be an
"investment company" or an entity "controlled" by an "investment company", as
such terms are defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(p) The Indenture to be dated as of January 1, 1995 between the
Guarantor and Bankers Trust Company, as trustee (the "Indenture") and the
Debt Securities to be issued thereunder, have been duly authorized; the
Indenture has been duly qualified under the Trust Indenture Act and, at the
Time of Delivery (as defined herein), will have been duly executed and
delivered and will constitute, and the Debt Securities, when duly executed
and authenticated in accordance with the Indenture and issued and delivered
under the circumstances provided in the Prospectus, as amended or
supplemented, will constitute, valid and legally binding obligations of the
Guarantor enforceable in accordance with their terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium or similar
laws of general equity principles, and will conform in all material respects
to the descriptions thereof contained in the Registration Statement and the
Prospectus, as amended or supplemented;
(q) The Guaranty has been duly authorized and, when issued and
delivered by the Guarantor pursuant to this Agreement, will have been duly
executed, authenticated, issued and delivered and will constitute a valid and
legally binding obligation of the Guarantor entitled to the benefits provided
by the Payment and Guaranty Agreement by the Guarantor to be dated
January , 1995 (the "Guaranty Agreement"); and the Guarantee will conform
in all material respects to the description thereof in the Prospectus;
(r) Neither CL&P Capital, the Guarantor, nor any of their affiliates
does business with the government of Cuba or with any person or affiliate
located in Cuba within the meaning of Section 517.075, Florida Statutes;
(s) Arthur Andersen LLP, who have certified certain financial
statements of CL&P Capital and the Guarantor and the Guarantor's
<PAGE>
subsidiaries, are independent public accountants as required by the Act and
the rules and regulations of the Commission thereunder; and
(t) The Guarantor possesses such franchises, certificates, including
certificates of public convenience and necessity, authorities, permits and
easements issued by the appropriate state, federal or foreign regulatory
agencies or bodies necessary to conduct the business now operated by it
and/or own, operate and maintain its properties as described in the
Prospectus, and it has not received notice of proceedings relating to the
revocation or modification of any such franchise, certificate, authority,
permit or easement which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would materially and adversely
affect the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Guarantor.
3. Upon the execution of the Pricing Agreement applicable to any Designated
Securities and authorization by the Representatives of the release of such
Designated Securities, the several Underwriters propose to offer such
Designated Securities for sale upon the terms and conditions set forth in the
Prospectus as amended or supplemented.
4. Certificates for the Designated Securities to be purchased by each
Underwriter pursuant to the Pricing Agreement relating thereto, in the form
specified in such Pricing Agreement, and in such authorized denominations and
registered in such names as the Representatives may request upon at least
forty-eight hours" prior notice to CL&P Capital, shall be delivered by or on
behalf of CL&P Capital to the Representatives for the account of such
Underwriter, against payment by such Underwriter or on its behalf of the
purchase price therefor by certified or official bank check or checks, payable
to the order of CL&P Capital in the funds specified in such Pricing Agreement,
all in the manner and at the place and time and date specified in such Pricing
Agreement or at such other place and time and date as the Representatives and
CL&P Capital may agree upon in writing, such time and date being herein called
the "Time of Delivery".
5. Each of CL&P Capital and the Guarantor, jointly and severally, agrees
with each of the Underwriters of any Designated Securities:
(a) To prepare the Prospectus as amended and supplemented in relation
to the applicable Designated Securities in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under the
Act not later than the Commission"s close of business on the second business
day following the execution and delivery of the Pricing Agreement relating to
the applicable Designated Securities or, if applicable, such earlier time as
may be required by Rule 424(b); to make no further amendment or any
supplement to the Registration Statement or Prospectus as amended or
supplemented after the date of the Pricing Agreement relating to such
Preferred Securities and prior to any Time of Delivery for such Preferred
Securities which shall be disapproved by the Representatives for such
Preferred Securities promptly after reasonable notice thereof; to advise the
Representatives promptly of any such amendment or supplement after any Time
of Delivery for such Preferred Securities and furnish the Representatives
with copies thereof; to file promptly all reports and any definitive proxy or
information statements required to be filed by CL&P Capital or the Guarantor
with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act for so long as the delivery of a prospectus is required in
connection with the offering or sale of such Preferred Securities, and during
such same period to advise the Representatives, promptly after it receives
notice thereof, of the time when any amendment to the Registration Statement
<PAGE>
has been filed or becomes effective or any supplement to the Prospectus or
any amended Prospectus has been filed with the Commission, of the issuance by
the Commission of any stop order or of any order preventing or suspending the
use of any prospectus relating to the Preferred Securities, of the suspension
of the qualification of such Preferred Securities for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for additional
information; and, in the event of the issuance of any such stop order or of
any such order preventing or suspending the use of any prospectus relating to
the Preferred Securities or suspending any such qualification, promptly to
use its best efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Preferred Securities
for offering and sale under the securities laws of such jurisdictions as the
Representatives may request and to comply with such laws so as to permit the
continuance of sales and dealings therein in such jurisdictions for as long
as may be necessary to complete the distribution of such Shares, provided
that in connection therewith neither CL&P Capital nor the Guarantor shall be
required to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction;
(c) To furnish the Underwriters with copies of the Prospectus as
amended or supplemented in such quantities as the Representatives may from
time to time reasonably request, and, if the delivery of a prospectus is
required at any time in connection with the offering or sale of the Preferred
Securities or the Debt Securities and if at such time any event shall have
occurred as a result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall be necessary
during such same period to amend or supplement the Prospectus or to file
under the Exchange Act any document incorporated by reference in the
Prospectus in order to comply with the Act or the Exchange Act, to notify the
Representatives and upon their request to file such document and to prepare
and furnish without charge to each Underwriter and to any dealer in
securities as many copies as the Representatives may from time to time
reasonably request of an amended Prospectus or a supplement to the Prospectus
which will correct such statement or omission or effect such compliance;
(d) To make generally available to its security holders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c) under
the Act), an earnings statement of the Guarantor and the Guarantor's
subsidiaries (which need not be audited) complying with Section 11(a) of the
Act and the rules and regulations of the Commission thereunder (including, at
the option of the Guarantor, Rule 158);
(e) During the period beginning from the date of the Pricing Agreement
for such Designated Securities and continuing to and including the earlier of
(i) the date, after the Time of Delivery, on which the distribution of the
Designated Securities ceases, as determined by Goldman Sachs & Co., or (ii)
the date which is 90 days after the Time of Delivery for such Designated
Securities, not to offer, sell, contract to sell or otherwise dispose of,
except as provided hereunder, any Designated Securities, any limited partner
interests of CL&P Capital or any preferred stock or any other securities of
CL&P Capital or the Guarantor that are substantially similar to the
Designated Securities, or any securities that are convertible into or
<PAGE>
exchangeable for Designated Securities, limited partner interests, preferred
stock or other substantially similar securities of CL&P Capital or the
Guarantor without the prior written consent of Goldman, Sachs & Co.;
(f) To use its best efforts to list, subject to notice of issuance, the
Preferred Securities and, upon issuance thereof to the holders of Preferred
Securities, the Debt Securities on the New York Stock Exchange (the
"Exchange");
(g) To furnish to the holders of the Preferred Securities as soon as
practicable after the end of each fiscal year an annual report (including a
balance sheet and statements of income, shareholder's equity and cash flows
of the Guarantor and its consolidated subsidiaries audited by independent
public accountants) and, as soon as practicable after the end of each of the
first three quarters of each fiscal year (beginning with the first such
fiscal quarter ending after the effective date of the Registration
Statement), consolidated summary financial information of the Guarantor and
its subsidiaries for such quarter in reasonable detail;
(h) During a period of five years from the date of this Agreement to
furnish to you copies of all reports or other communications (financial and
other) furnished to holders of common stock of the Guarantor, and deliver to
you (i) as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any national
securities exchange on which any class of securities of the Guarantor or CL&P
Capital are listed; and (ii) such additional information concerning the
business and financial condition of Guarantor as the Representatives may from
time to time reasonably request;
(i) In the case of the Guarantor, to issue the Guaranty concurrently
with the issue and sale of the Preferred Securities as contemplated herein;
and
(j) To use the net proceeds received by it from the sale of the
Designated Securities pursuant to this Agreement in the manner specified in
the applicable Prospectus as amended or supplemented under the caption "Use
of Proceeds".
6. Each of CL&P Capital and the Guarantor jointly and severally covenants
and agrees with the several Underwriters that CL&P Capital and the Guarantor
will pay or cause to be paid the following: (i) the fees, disbursements and
expenses of CL&P Capital's and the Guarantor's counsel and accountants in
connection with the registration of the Preferred Securities, the Debt
Securities and the Guaranty under the Act and all other expenses in connection
with the preparation, printing and filing of the Registration Statement, any
Preliminary Prospectus and the Prospectus and amendments and supplements
thereto and the mailing and delivering of copies thereof to the Underwriters
and dealers; (ii) the cost of printing or producing any Agreement among
Underwriters, this Agreement, any Pricing Agreement, the Indenture, the
Preferred Securities, the Debt Securities any Blue Sky Memorandum, closing
documents (including any compilations thereof) and any other documents in
connection with the offering, purchase, sale and delivery of the Preferred
Securities; (iii) all expenses in connection with the qualification of the
Preferred Securities and the Guaranty for offering and sale under state
securities laws as provided in Section 5(b) hereof, including the reasonable
fees and disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky survey(s); (iv) any fees
charged by securities rating services for rating the Preferred Securities; (v)
any filing fees incident to, and the reasonable fees and disbursements of
counsel for the Underwriters in connection with, any required reviews by the
<PAGE>
National Association of Securities Dealers, Inc. of the terms of the sale of
the Preferred Securities; (vi) any fees and expenses in connection with listing
the Preferred Securities and the Debt Securities; (vii) the cost of preparing
certificates for the Preferred Securities; (viii) the cost and charges of any
transfer agent or registrar or dividend disbursing agent; (ix) the cost of
qualifying the Preferred Securities for delivery in book-entry only form; (x)
the fees and expenses of any Trustee and any agent of any Trustee and the
reasonable fees or disbursements of counsel for any Trustee in connection with
the Indenture and the Debt Securities; and (xi) all other costs and expenses
incident to the performance of its obligations hereunder which are not
otherwise specifically provided for in this Section. It is understood, however,
that, except as provided in this Section, and Sections 8 and 11 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees
of their counsel, transfer taxes on resale of any of the Preferred Securities
by them, and any advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters of any Designated Securities under
the Pricing Agreement relating to such Designated Securities shall be subject,
in the discretion of the Representatives, to the condition that all
representations and warranties and other statements of CL&P Capital and the
Guarantor in or incorporated by reference in the Pricing Agreement relating to
such Designated Securities are, at and as of the Time of Delivery for such
Designated Securities, true and correct, the condition that CL&P Capital and
the Guarantor shall have performed all of their respective obligations
hereunder theretofore to be performed, and the following additional conditions:
(a) The Prospectus as amended or supplemented in relation to such
Designated Securities shall have been filed with the Commission pursuant to
Rule 424(b) within the applicable time period prescribed for such filing by
the rules and regulations under the Act and in accordance with Section 5(a)
hereof; no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding for
that purpose shall have been initiated or threatened by the Commission; and
all requests for additional information on the part of the Commission shall
have been complied with to the Representatives" reasonable satisfaction;
(b) Winthrop, Stimson, Putnam & Roberts, counsel for the Underwriters
shall have furnished to the Representatives such opinion or opinions, dated
the Time of Delivery for such Designated Securities, with respect to the
matters covered in paragraphs (i), (ii), (iv), (viii), (ix), (x) and (xi) of
subsection (c) below as well as such other related matters as the
Representatives may reasonably request, and such counsel shall have received
such papers and information as they may reasonably request to enable them to
pass upon such matters;
(c) Day, Berry & Howard, counsel for CL&P Capital and the Guarantor,
shall have furnished to the Representatives their written opinion or
opinions, dated the Time of Delivery for such Designated Securities,
respectively, in form and substance satisfactory to the Representatives, to
the effect that:
(i) CL&P Capital has been duly formed and is validly existing as a
limited partnership in good standing under the Partnership Act; CL&P
Capital has no subsidiaries; CL&P Capital is a special purpose limited
partnership as described in the Prospectus as amended or supplemented
and has conducted and will conduct no business other than the
transactions contemplated by this Agreement and described in the
Prospectus as amended or supplemented; CL&P Capital is not a party to or
bound by any agreement or instrument other than the Limited Partnership
Agreement and, solely for the purposes stated in the recitals thereto,
<PAGE>
the Indenture; CL&P Capital has no liabilities or obligations other than
those arising out of the transactions contemplated by this Agreement and
described in the Prospectus as amended or supplemented; CL&P Capital is
not a party to or subject to any action, suit or proceeding of any
nature; the Guarantor has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of
Connecticut with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus as
amended or supplemented; and the Guarantor has been duly qualified as a
foreign corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it owns or
leases properties, or conducts any business, so as to require such
qualification;
(ii) The Guarantor has an authorized capitalization as set forth in the
Prospectus as amended or supplemented, and all of the issued shares of
capital stock of the Guarantor have been duly and validly authorized and
issued and are fully paid and non-assessable and are owned directly or
indirectly by NU, free and clear of all liens, encumbrances, equities or
claims; the Guarantor is the sole general partner of CL&P Capital; the
Class A Limited Partner is the sole Class A Limited Partner of CL&P
Capital; and the Class A Limited Partner has been duly incorporated and
is validly existing in good standing as a corporation under the laws of
the State of Connecticut, with power and authority (corporate and other)
to own its properties and conduct its business as described in the
Prospectus as amended or supplemented; and all of the issued general and
limited partner interests of CL&P Capital are owned by the Guarantor and
the Class A Limited Partner, respectively, and have been duly and
validly authorized and validly issued, free and clear of all liens,
encumbrances, equities or claims;
(iii) To the best of such counsel"s knowledge and other than as set
forth in the Prospectus as amended or supplemented, there are no legal
or governmental proceedings pending to which CL&P Capital, the Guarantor
or any of the Guarantor's subsidiaries is a party or of which any
property of CL&P Capital, the Guarantor or any of the Guarantor's
subsidiaries is the subject which, if determined adversely to CL&P
Capital, the Guarantor or any of the Guarantor's subsidiaries, would
individually or in the aggregate have a material adverse effect on (x)
the current or future consolidated financial position, capital accounts
or results of operations of CL&P Capital or (y) the current or future
consolidated financial position, stockholders" equity or results of
operations of the Guarantor and its subsidiaries; and to the best of
such counsel"s knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(iv) This Agreement and the Pricing Agreement with respect to the
Designated Securities have been duly authorized, executed and delivered
by CL&P Capital and the Guarantor;
(v) The issue and sale of the Designated Preferred Securities being
delivered at such Time of Delivery and the compliance by CL&P Capital
and the Guarantor with all of the provisions of this Agreement, the
Pricing Agreement, the Indenture and the Guaranty with respect to the
Designated Preferred Securities and the consummation of the transactions
herein and therein contemplated will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute
a default under, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument known to such counsel to which CL&P
Capital or the Guarantor or any of the Guarantor's subsidiaries is a
<PAGE>
party or by which CL&P Capital or the Guarantor is bound or to which any
of the property or assets of CL&P Capital or the Guarantor or any of the
Guarantor's subsidiaries is subject, which conflict, breach, violation
or default would have a material adverse effect on CL&P Capital, the
Guarantor, or any of the Guarantor's subsidiaries, nor will such action
result in any violation of the provisions of the Certificate of Limited
Partnership or Limited Partnership Agreement of CL&P Capital or the
Certificate of Incorporation or By-laws of the Guarantor or any statute
or any order, rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over CL&P Capital or the
Guarantor or any of the Guarantor's subsidiaries or any of their
properties, which violation would have a material adverse effect on CL&P
Capital, the Guarantor, or any subsidiary of the Guarantor;
(vi) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body
is required for the issue and sale of the Designated Preferred
Securities being delivered at such Time of Delivery or the consummation
by CL&P Capital or the Guarantor of the transactions contemplated by
this Agreement or such Pricing Agreement, including the issuance and
delivery of the Guaranty and the Designated Debt Securities, except such
as have been obtained under the Act and the Trust Indenture Act, the
approval of the Commission under the Holding Company Act and the
approval of the DPUC, and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Designated Preferred Securities by the Underwriters;
(vii) Neither the Guarantor nor any of its subsidiaries is in
violation of its Certificate of Incorporation or By-laws; CL&P Capital
is not in violation of its Certificate of Limited Partnership or the
Limited Partnership Agreement; and neither CL&P Capital, the Guarantor
nor any of the Guarantor's subsidiaries is in default in the performance
or observance of any material obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which it is a party
or by which it or any of its properties may be bound;
(viii) The statements set forth in the Prospectus under the captions
"Description of the Preferred Securities," "Description of the
Subordinated Debentures," and "Description of the Guaranty", insofar as
they purport to constitute a summary of the terms of the Preferred
Securities, the Guaranty and the Debt Securities, and under the caption
"United States Taxation", insofar as they purport to describe the
provisions of the laws and documents referred to therein, are accurate,
complete and fair in all material respects;
(ix) The Preferred Securities have been duly and validly authorized and
are validly issued and, subject to the qualifications set forth in
Section 7(e)(iv) hereof, are fully paid and non-assessable limited
partner interests in CL&P Capital; and the Designated Preferred
Securities conform in all material respects to the description thereof
contained in the Prospectus as amended or supplemented;
(x) The Indenture and the Debt Securities have been duly authorized by
the Guarantor; the Indenture has been duly qualified under the Trust
Indenture Act; the Indenture has been duly executed and delivered by the
Guarantor and, assuming that it has been duly authorized, executed and
delivered by the Trustee, constitutes, and the Debt Securities have been
duly executed by the Guarantor in accordance with the Indenture and
<PAGE>
delivered by the Guarantor under the circumstances provided in the
Prospectus as amended or supplemented and, assuming they have been duly
authenticated by the Trustee, constitute the valid and legally binding
obligations of the Guarantor enforceable against the Guarantor in
accordance with their terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization, moratorium or similar laws of general equity
principles; and the Indenture and the Debt Securities conform in all
material respects to the descriptions thereof contained in the
Prospectus as amended or supplemented;
(xi) The Guaranty has been duly authorized, executed, issued and
delivered by the Guarantor and constitutes a valid and legally binding
obligation of the Guarantor entitled to the benefits provided by the
Guaranty Agreement; and the Guaranty conforms in all material respects
to the description thereof contained in the Prospectus as amended or
supplemented;
(xii) Neither CL&P Capital nor the Guarantor is and, after giving
effect to the offering and sale of the Designated Securities, neither
will be an "investment company" or an entity "controlled" by an
"investment company", as such terms are defined in the Investment
Company Act;
(xiii) The Guarantor possesses such franchises, certificates,
including certificates of public convenience and necessity, authorities,
permits and easements issued by the appropriate state, federal or
foreign regulatory agencies or bodies necessary to conduct the business
now operated by it and/or own, operate and maintain its properties as
described in the Prospectus, and, to the knowledge of such counsel, it
has not received notice of proceedings relating to the revocation or
modification of any such franchise, certificate, authority, permit or
easement which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would materially and adversely
affect the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Guarantor;
(xiv) The documents incorporated by reference in the Prospectus as
amended or supplemented (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion),
when they were filed with the Commission, complied as to form in all
material respects with the requirements of the Exchange Act and the
rules and regulations of the Commission thereunder; and they have no
reason to believe that any of such documents, when they were so filed,
contained an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such
documents were so filed, not misleading;
(xv) The Registration Statement and the Prospectus as amended or
supplemented, and any further amendments and supplements thereto made by
CL&P Capital or the Guarantor prior to such Time of Delivery (other than
the financial statements and related schedules therein, as to which such
counsel need express no opinion), comply as to form in all material
respects with the requirements of the Act and the rules and regulations
thereunder; although they do not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, except for those referred to
in the opinion in subsection (viii) of this Section 7(c), they have no
reason to believe that, as of its effective date, the Registration
Statement or any further amendment thereto made by CL&P Capital or the
<PAGE>
Guarantor prior to such Time of Delivery (other than the financial
statements and related schedules therein, as to which such counsel need
express no opinion) contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that, as of
its date, the Prospectus as amended or supplemented or any further
amendment or supplement thereto made by CL&P Capital or the Guarantor
prior to such Time of Delivery (other than the financial statements and
related schedules therein, as to which such counsel need express no
opinion) contained an untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading or
that, as of such Time of Delivery, either the Registration Statement or
the Prospectus as amended or supplemented or any further amendment or
supplement thereto made by CL&P Capital or the Guarantor prior to such
Time of Delivery (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion)
contains an untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; and they
do not know of any amendment to the Registration Statement required to
be filed or any contracts or other documents of a character required to
be filed as an exhibit to the Registration Statement or required to be
incorporated by reference into the Prospectus as amended or supplemented
or required to be described in the Registration Statement or the
Prospectus as amended or supplemented which are not filed or
incorporated by reference or described as required; and
(xvi) The Limited Partnership Agreement has been duly authorized,
executed and delivered by the Guarantor and constitutes a valid and
legally binding obligation of the Guarantor, in its capacity as general
partner of CL&P Capital, enforceable against the Guarantor in accordance
with its terms, subject to bankruptcy, insolvency, moratorium,
fraudulent conveyance, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general
equity principles.
In rendering their opinion, such counsel may rely, as to certain matters
relating to the Class A Limited Partner, the Guarantor and the Guarantor's
subsidiaries, upon the opinion of Jeffrey C. Miller, Esq., Assistant General
Counsel of the Class A Limited Partner, which opinion shall be addressed to,
or shall otherwise permit reliance thereon by, the Representatives.
(d) Day, Berry & Howard, special tax counsel for CL&P Capital and the
Guarantor, shall have furnished to you their written opinion, dated the Time
of Delivery, in form and substance satisfactory to you, to the effect that
such counsel confirms its opinion as set forth under "United States Taxation"
in the Prospectus as amended and supplemented;
(e) Day, Berry & Howard, counsel for CL&P Capital and the Guarantor,
shall have furnished to you their written opinion, dated the Time of
Delivery, in form and substance satisfactory to you, to the effect that:
(i) CL&P Capital has been duly formed and is validly existing in good
standing as a limited partnership under the Partnership Act;
(ii) Under the Limited Partnership Agreement and the Partnership Act,
CL&P Capital has all necessary partnership power and authority to own
its properties and conduct its business, all as described in the
Prospectus as amended or supplemented;
<PAGE>
(iii) The general partner and limited partner interests in CL&P
Capital issued to the Guarantor and the Class A Limited Partner,
respectively, have been duly and validly authorized and are validly
issued;
(iv) The Preferred Securities issued to the limited partners of CL&P
Capital who hold the Preferred Securities (the "Preferred Security
Holders") have been duly and validly authorized and are validly issued
and, subject to the qualifications set forth herein, are fully paid and
nonassessable limited partner interests in CL&P Capital, as to which,
assuming that the Preferred Security Holders, as limited partners of
CL&P Capital, do not participate in the control of the business of CL&P
Capital, the Preferred Security Holders, as limited partners of CL&P
Capital, will have no liability in excess of their obligations to make
payments provided for in the Limited Partnership Agreement and their
share of CL&P Capital's assets and undistributed profits (subject to the
obligation of a Preferred Security Holder to repay any funds wrongfully
distributed to it);
(v) There are no provisions in the Limited Partnership Agreement the
inclusion of which, subject to the terms and conditions therein, or,
assuming that the Preferred Security Holders, as limited partners of
CL&P Capital, take no action other than actions permitted by the Limited
Partnership Agreement, the exercise of which, in accordance with the
terms and conditions therein, would cause the Preferred Security
Holders, as limited partners of CL&P Capital, to be deemed to be
participating in the control of the business of CL&P Capital;
(vi) The Limited Partnership Agreement has been duly authorized,
executed and delivered by the Guarantor, constitutes a legal, valid and
binding agreement of the Guarantor, and is enforceable against the
Guarantor, in its capacity as general partner of CL&P Capital, in
accordance with its terms subject to bankruptcy, insolvency, moratorium,
fraudulent conveyance, receivership, reorganization, liquidation and
other similar laws relating to or affecting the rights and remedies of
creditors generally and to principles of equity (regardless of whether
considered and applied in a proceeding in equity or at law);
(vii) Under the Limited Partnership Agreement and the Partnership
Act, CL&P Capital has all necessary partnership power and authority to
execute and deliver, and to perform its obligations under, this
Agreement;
(viii) Under the Limited Partnership Agreement and the Partnership
Act, the execution and delivery by CL&P Capital of this Agreement, and
the performance by CL&P Capital of its obligations hereunder, have been
duly authorized by all necessary partnership action on the part of CL&P
Capital;
(ix) The issuance and sale by CL&P Capital of the Preferred Securities
pursuant to this Agreement and the execution, delivery and performance
by CL&P Capital of this Agreement will not result in any violation of
(i) any Delaware statute, rule or regulation, which violation will have
a material adverse effect on CL&P Capital, or (ii) the Certificate of
Limited Partnership of CL&P Capital or the Limited Partnership
Agreement;
(x) No consent, approval, authorization, order, registration or
qualification of or with any Delaware court or Delaware governmental
<PAGE>
agency or body is required solely as a result of the issuance and sale
by CL&P Capital of the Preferred Securities pursuant to this Agreement,
the execution, delivery and performance by CL&P Capital of this
Agreement or the consummation of the transactions contemplated in this
Agreement;
(xi) Such counsel has reviewed the statements in the Prospectus as
amended or supplemented under the caption "CL&P Capital" and, insofar as
it contains statements of Delaware law, such statements are fairly
presented in all material respects; and
(xii) Assuming that CL&P Capital is treated as a partnership for
Federal income tax purposes, and assuming that CL&P Capital derives no
income from or connected with sources within the State of Delaware and
has no assets, activities (other than the maintenance of a registered
office and registered agent in the State of Delaware and the filing of
documents with the Delaware Secretary of State) or employees in the
State of Delaware, the Preferred Security Holders (other than those
Preferred Security Holders who reside or are domiciled in the State of
Delaware), will have no liability for Delaware income taxes solely as a
result of their participation in CL&P Capital, and CL&P Capital will not
be liable for any Delaware income tax.
(f) On the date of the Pricing Agreement for such Designated Securities
at a time prior to the execution of the Pricing Agreement with respect to the
Designated Securities and at each Time of Delivery for such Designated
Securities, Arthur Andersen LLP, the independent accountants of CL&P Capital
and the Guarantor who have certified the financial statements of CL&P Capital
and the Guarantor and the Guarantor's subsidiaries included or incorporated
by reference in the Registration Statement shall have furnished to the
Representatives a letter, dated the effective date of the Registration
Statement or the date of the most recent report filed with the Commission
containing financial statements and incorporated by reference in the
Registration Statement, if the date of such report is later than such
effective date, and a letter dated such Time of Delivery, respectively, to
the effect set forth in Annex II hereto, and with respect to such letter
dated such Time of Delivery, as to such other matters as the Representatives
may reasonably request and in form and substance satisfactory to the
Representatives;
(g) (i) Neither CL&P Capital, the Guarantor nor any of the Guarantor's
subsidiaries shall have sustained since the date of the latest audited
financial statements included or incorporated by reference in the Prospectus
as amended prior to the date of the Pricing Agreement relating to the
Designated Securities any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus as amended
prior to the date of the Pricing Agreement relating to the Designated
Securities, and (ii) since the respective dates as of which information is
given in the Prospectus as amended prior to the date of the Pricing Agreement
relating to the Designated Securities there shall not have been any change in
the capital accounts or long-term debt of CL&P Capital or capital stock or
long-term debt of the Guarantor or any of its subsidiaries or any change, or
any development involving a prospective change, in or affecting (x) the
general affairs, management, financial position, capital accounts or results
of operations of CL&P Capital or (y) the general affairs, management,
financial position, stockholders" equity or results of operations of the
Guarantor and its subsidiaries, otherwise than as set forth or contemplated
in the Prospectus as amended prior to the date of the Pricing Agreement
<PAGE>
relating to the Designated Preferred Securities, the effect of which, in any
such case described in Clause (i) or (ii), is in the judgment of the
Representatives so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Designated Preferred Securities on the terms and in the manner contemplated
in the Prospectus as amended relating to the Designated Preferred Securities;
(h) On or after the date of the Pricing Agreement relating to the
Designated Preferred Securities (i) no downgrading shall have occurred in the
rating accorded any Preferred Securities or any of the Guarantor"s debt
securities or preferred stock by any "nationally recognized statistical
rating organization", as that term is defined by the Commission for purposes
of Rule 436(g)(2) under the Act, and (ii) no such organization shall have
publicly announced that it has under surveillance or review, with possible
negative implications, its rating of any Preferred Securities or any of the
Guarantor"s debt securities or preferred stock;
(i) On or after the date of the Pricing Agreement relating to the
Designated Shares there shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on the
New York Stock Exchange; (ii) a suspension or material limitation in trading
in CL&P Capital"s or the Guarantor"s securities on the New York Stock
Exchange; (iii) a general moratorium on commercial banking activities
declared by either Federal or New York State authorities; or (iv) the
outbreak or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if the
effect of any such event specified in this Clause (iv) in the judgment of the
Representatives makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Designated Securities on the terms and
in the manner contemplated in the Prospectus as first amended or supplemented
relating to the Designated Securities;
(j) The Designated Securities at the Time of Delivery shall have been
duly listed, subject to notice of issuance, on the New York Stock Exchange;
(k) CL&P Capital and the Guarantor shall have furnished or caused to be
furnished to the Representatives at the Time of Delivery for the Designated
Securities certificates of officers of CL&P Capital and the Guarantor,
respectively, satisfactory to the Representatives as to the accuracy of the
respective representations and warranties of CL&P Capital and the Guarantor
herein at and as of such Time of Delivery, as to the performance by CL&P
Capital and the Guarantor of all of its respective obligations hereunder to
be performed at or prior to such Time of Delivery, as to the matters set
forth in subsections (a) and (e) of this Section and as to such other matters
as the Representatives may reasonably request;
(l) The Limited Partnership Agreement, the Guaranty and the Indenture
shall have been executed and delivered, in each case in a form reasonably
satisfactory to the Representatives; and
(m) Neither a Tax Event nor an Investment Company Event (each as
defined in the Prospectus as amended or supplemented) shall have occurred and
be continuing.
8. (a) CL&P Capital and the Guarantor, jointly and severally, will
indemnify and hold harmless each Underwriter against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in
<PAGE>
any Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus as amended or supplemented and any other
prospectus relating to the Shares, or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each Underwriter for any
legal or other expenses reasonably incurred by such Underwriter in connection
with investigating or defending any such action or claim as such expenses are
incurred; provided, however, that neither CL&P Capital nor the Guarantor shall
be liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary Prospectus,
any preliminary prospectus supplement, the Registration Statement, the
Prospectus as amended or supplemented and any other prospectus relating to the
Preferred Securities, or any such amendment or supplement in reliance upon and
in conformity with written information furnished to CL&P Capital by any
Underwriter of Designated Securities through the Representatives expressly for
use in the Prospectus as amended or supplemented relating to such Preferred
Securities.
(b) Each Underwriter will indemnify and hold harmless CL&P Capital and the
Guarantor against any losses, claims, damages or liabilities to which CL&P
Capital may become subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Preferred Securities, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented and any other prospectus
relating to the Preferred Securities, or any such amendment or supplement in
reliance upon and in conformity with written information furnished to CL&P
Capital and the Guarantor by such Underwriter through the Representatives
expressly for use therein; and will reimburse CL&P Capital and the Guarantor
for any legal or other expenses reasonably incurred by CL&P Capital in
connection with investigating or defending any such action or claim as such
expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against an indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify such indemnifying party
shall not relieve it from any liability which it may have to any indemnified
party otherwise than under such subsection. In case any such action shall be
brought against any indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party (who shall not, except with
the consent of the indemnified party, be counsel to the indemnifying party),
and, after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses
of other counsel or any other expenses, in each case subsequently incurred by
<PAGE>
such indemnified party, in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from
all liability arising out of such action or claim and (ii) does not include any
statement as to, or an admission of, fault, culpability or a failure to act, by
or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by CL&P Capital and the Guarantor on the one hand and the Underwriters of the
Designated Securities on the other from the offering of the Designated
Securities to which such loss, claim, damage or liability (or action in respect
thereof) relates. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under subsection (c) above, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of CL&P Capital and the Guarantor
on the one hand and the Underwriters of the Designated Securities on the other
in connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by
CL&P Capital and the Guarantor on the one hand and such Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from such offering (before deducting expenses) received by CL&P Capital and the
Guarantor bear to the total underwriting discounts and commissions received by
such Underwriters. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by CL&P Capital and the Guarantor on the one
hand or such Underwriters on the other and the parties" relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. CL&P Capital, the Guarantor and the Underwriters agree
that it would not be just and equitable if contributions pursuant to this
subsection (d) were determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this subsection (d). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the applicable Designated Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
<PAGE>
guilty of such fraudulent misrepresentation. The obligations of the
Underwriters of Designated Securities in this subsection (d) to contribute are
several in proportion to their respective underwriting obligations with respect
to such Designated Securities and not joint.
(e) The obligations of CL&P Capital under this Section 8 shall be in
addition to any liability which CL&P Capital and the Guarantor may otherwise
have and shall extend, upon the same terms and conditions, to each person, if
any, who controls any Underwriter within the meaning of the Act; and the
obligations of the Underwriters under this Section 8 shall be in addition to
any liability which the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each officer and director of
CL&P Capital and the Guarantor and to each person, if any, who controls CL&P
Capital and the Guarantor within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase the
Designated Securities which it has agreed to purchase under the Pricing
Agreement relating to such Designated Securities, the Representatives may in
their discretion arrange for themselves or another party or other parties to
purchase such Designated Securities on the terms contained herein. If within
forty-eight hours after such default by any Underwriter the Representatives do
not arrange for the purchase of such Designated Securities, as the case may be,
then CL&P Capital shall be entitled to a further period of forty-eight hours
within which to procure another party or other parties satisfactory to the
Representatives to purchase such Designated Securities on such terms. In the
event that, within the respective prescribed period, the Representatives notify
CL&P Capital that they have so arranged for the purchase of such Designated
Securities, or CL&P Capital notifies the Representatives that it has so
arranged for the purchase of such Designated Securities, the Representatives or
CL&P Capital shall have the right to postpone a Time of Delivery for such
Designated Securities for a period of not more than seven days, in order to
effect whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus as amended or supplemented, or in any other
documents or arrangements, and CL&P Capital agrees to file promptly any
amendments or supplements to the Registration Statement or the Prospectus which
in the opinion of the Representatives may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to the Pricing Agreement with respect to such Designated Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Designated Securities, as the case may be, of a defaulting Underwriter or
Underwriters by the Representatives and CL&P Capital as provided in subsection
(a) above, the aggregate amount of such Designated Securities which remains
unpurchased does not exceed one-eleventh of the aggregate amount of the
Designated Securities to be purchased at the Time of Delivery, then CL&P
Capital shall have the right to require each non-defaulting Underwriter to
purchase the amount of Designated Securities which such Underwriter agreed to
purchase under the Pricing Agreement relating to such Designated Securities
and, in addition, to require each non-defaulting Underwriter to purchase its
pro rata share (based on the amount of Designated Securities which such
Underwriter agreed to purchase under such Pricing Agreement) of the Designated
Securities, of such defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and CL&P Capital as provided in subsection (a) above, the
aggregate amount of Designated Securities which remains unpurchased exceeds
<PAGE>
one-eleventh of the aggregate amount of Designated Securities to be purchased
at the Time of Delivery, as referred to in subsection (b) above, or if CL&P
Capital shall not exercise the right described in subsection (b) above to
require non-defaulting Underwriters to purchase the Designated Securities of a
defaulting Underwriter or Underwriters, then the Pricing Agreement relating to
such Designated Securities shall thereupon terminate, without liability on the
part of any non-defaulting Underwriter or CL&P Capital or the Guarantor, except
for the expenses to be borne by CL&P Capital and the Guarantor and the
Underwriters as provided in Section 6 hereof and the indemnity and contribution
agreements in Section 8 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties and
other statements of CL&P Capital or the Guarantor and the several Underwriters,
as set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless
of any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, or CL&P
Capital or the Guarantor, or any officer or director or controlling person of
CL&P Capital or the Guarantor, and shall survive delivery of and payment for
any Designated Securities.
11. If any Pricing Agreement shall be terminated pursuant to Section 9
hereof, neither CL&P Capital nor the Guarantor shall then be under any
liability to any Underwriter with respect to the Designated Securities with
respect to which such Pricing Agreement shall have been terminated except as
provided in Sections 6 and 8 hereof; but, if for any other reason, Designated
Securities are not delivered by or on behalf of CL&P Capital or the Guarantor
as provided herein, CL&P Capital will reimburse the Underwriters through the
Representatives for all out-of-pocket expenses approved in writing by the
Representatives, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of such Designated Securities, but CL&P Capital or the Guarantor shall
then be under no further liability to any Underwriter with respect to such
Designated Securities except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, the Representatives of the Underwriters of
Designated Securities shall act on behalf of each of such Underwriters, and the
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex
or facsimile transmission to the address of the Representatives as set forth in
the Pricing Agreement; and if to CL&P Capital or the Guarantor shall be
delivered or sent by mail, telex or facsimile transmission to the address of
CL&P Capital or the Guarantor, respectively set forth in the Registration
Statement, Attention: Secretary; provided, however, that any notice to an
Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by mail,
telex or facsimile transmission to such Underwriter at its address set forth in
its Underwriters" Questionnaire, or telex constituting such Questionnaire,
which address will be supplied to CL&P Capital and the Guarantor by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
13. This Agreement and each Pricing Agreement shall be binding upon, and
inure solely to the benefit of, the Underwriters, CL&P Capital, the Guarantor
and, to the extent provided in Sections 8 and 10 hereof, the officers and
<PAGE>
directors of CL&P Capital, the Guarantor and each person who controls CL&P
Capital or the Guarantor or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement or any such
Pricing Agreement. No purchaser of any of the Preferred Securities from any
Underwriter shall be deemed a successor or assign by reason merely of such
purchase.
14. Time shall be of the essence of each Pricing Agreement. As used herein,
the term "business day" shall mean any day when the Commission"s office in
Washington, D.C. is open for business.
15. This Agreement and each Pricing Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
16. This Agreement and each Pricing Agreement may be executed by any one or
more of the parties hereto and thereto in any number of counterparts, each of
which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.
<PAGE>
If the foregoing is in accordance with your understanding, please sign and
return to us one for CL&P Capital and one for each of the Representatives plus
one for each counsel counterparts hereof.
Very truly yours,
CL&P CAPITAL, L. P.
By: The Connecticut Light and Power Company,
its General Partner
By:/s/John B. Keane
Name: John B. Keane
Title: Vice President and Treasurer
THE CONNECTICUT LIGHT AND POWER COMPANY
By:/s/John B. Keane
Name: John B. Keane
Title: Vice President and Treasurer
Accepted as of the date hereof:
Goldman, Sachs & Co.
Salomon Brothers Inc
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Morgan Stanley & Co. Incorporated
Prudential Securities Incorporated
Smith Barney Inc.
By:/s/Goldman, Sachs & Co.
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
<PAGE>
Pricing Agreement
Goldman, Sachs & Co.
Salomon Brothers Inc
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Morgan Stanley & Co. Incorporated
Prudential Securities Incorporated
Smith Barney Inc.
As Representatives of the several
Underwriters named in Schedule I hereto,
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
January 13, 1995
Ladies and Gentlemen:
CL&P Capital, L.P., a Delaware limited partnership ("CL&P Capital"), as
issuer, and The Connecticut Light and Power Company, a Connecticut corporation,
as guarantor (the "Guarantor"), each proposes, subject to the terms and
conditions stated herein and in the Underwriting Agreement, dated January 13,
1995 (the "Underwriting Agreement"), between CL&P Capital and the Guarantor on
the one hand and Goldman, Sachs & Co., Salomon Brothers Inc, Merrill Lynch &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co.
Incorporated, Prudential Securities Incorporated and Smith Barney Inc. on the
other hand, to issue and sell to the Underwriters named in Schedule I hereto
(the "Underwriters") the Preferred Securities specified in Schedule II hereto
(the "Designated Preferred Securities"). The Designated Preferred Securities
will be guaranteed by the Guarantor to the extent described in the Prospectus.
Each of the provisions of the Underwriting Agreement is incorporated herein by
reference in its entirety, and shall be deemed to be a part of this Agreement
to the same extent as if such provisions had been set forth in full herein; and
each of the representations and warranties set forth therein shall be deemed to
have been made at and as of the date of this Pricing Agreement, except that
each representation and warranty which refers to the Registration Statement or
Prospectus (each as defined in the Underwriting Agreement) in Section 2 of the
Underwriting Agreement shall be deemed to be a representation or warranty as of
the date of the Underwriting Agreement in relation to the Registration
Statement or Prospectus, and also a representation and warranty as of the date
of this Pricing Agreement in relation to the Registration Statement or
Prospectus as amended or supplemented relating to the Designated Preferred
Securities which are the subject of this Pricing Agreement. Each reference to
the Representatives herein and in the provisions of the Underwriting Agreement
so incorporated by reference shall be deemed to refer to you. Unless otherwise
defined herein, terms defined in the Underwriting Agreement are used herein as
therein defined. The Representatives designated to act on behalf of the
Representatives and on behalf of each of the Underwriters of the Designated
Preferred Securities pursuant to Section 12 of the Underwriting Agreement and
the address of the Representatives referred to in such Section 12 are set forth
in Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
<PAGE>
Prospectus, as the case may be, relating to the Designated Preferred
Securities, in the form heretofore delivered to you is now proposed to be filed
with the Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, CL&P Capital agrees to
issue and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from CL&P Capital, at the time
and place and at the purchase price to the Underwriters set forth in Schedule
II hereto, the amount of Preferred Securities set forth opposite the name of
such Underwriter in Schedule I hereto.
<PAGE>
If the foregoing is in accordance with your understanding, please sign and
return to us one each for CL&P Capital and the Guarantor and one for each of
the Representatives plus one for each counsel counterparts hereof, and upon
acceptance hereof by you, on behalf of each of the Underwriters, this letter
and such acceptance hereof, including the provisions of the Underwriting
Agreement incorporated herein by reference, shall constitute a binding
agreement between each of the Underwriters and CL&P Capital and the Guarantor.
It is understood that your acceptance of this letter on behalf of each of the
Underwriters is or will be pursuant to the authority set forth in a form of
Agreement among Underwriters, the form of which shall be submitted to CL&P
Capital for examination and the Guarantor, upon request, but without warranty
on the part of the Representatives as to the authority of the signers thereof.
Very truly yours,
CL&P CAPITAL, L. P.
By: The Connecticut Light and Power Company,
its General Partner
By:_____________________________________________
Name: John B. Keane
Title: Vice President and Treasurer
THE CONNECTICUT LIGHT AND POWER COMPANY
By:_____________________________________________
Name: John B. Keane
Title: Vice President and Treasurer
Accepted as of the date hereof:
Goldman, Sachs & Co.
Salomon Brothers Inc
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Morgan Stanley & Co. Incorporated
Prudential Securities Incorporated
Smith Barney Inc.
By:_________________________________________
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
<PAGE>
<TABLE>
SCHEDULE I
<CAPTION>
Amount of
Preferred
Securities
to be
Underwriters Purchased
<S> <C>
Goldman, Sachs & Co. 538,000
Salomon Brothers Inc 538,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated 538,000
Morgan Stanley & Co. Incorporated 538,000
Prudential Securities Incorporated 538,000
Smith Barney Inc. 538,000
Advest, Inc. 56,000
Dillon, Read & Co. Inc. 56,000
Donaldson, Lufkin & Jenrette Securities Corporation 56,000
A.G. Edwards & Sons, Inc. 56,000
Lehman Brothers Inc. 56,000
PaineWebber Incorporated 56,000
SBCI Swiss Bank Corporation Investment banking Inc. 56,000
J.C. Bradford & Co. 20,000
Crowell, Weedon & Co. 20,000
Dain Bosworth Incorporated 20,000
Fahnestock & Co. Inc. 20,000
First Albany Corporation 20,000
Furman Selz Incorporated 20,000
Interstate/Johnson Lane Corporation 20,000
Janney Montgomery Scott Inc. 20,000
Josephthal Lyon & Ross Incorporated 20,000
Legg Mason Wood Walker Incorporated 20,000
McDonald & Company Securities, Inc. 20,000
Morgan, Keegan & Company, Inc. 20,000
Olde Discount Corporation 20,000
Piper Jaffray Inc. 20,000
The Robinson-Humphrey Company, Inc. 20,000
Muriel Siebert & Co., Inc. 20,000
Tucker Anthony Incorporated 20,000
U.S. Securities, Inc. 20,000
Wheat, First Securities, Inc. 20,000
TOTAL 4,000,000
</TABLE>
<PAGE>
SCHEDULE II
Title of Designated Preferred Securities: 9.30% Cumulative Monthly Income
Securities,
Series A
Number of Preferred Securities:
4,000,000
Initial Offering Price to Public:
$25.00 per security
Purchase Price by Underwriters:
$25.00 per security
Commission Payable to Underwriters:
$0.7875 per security in next-day funds
Form of Designated Preferred Securities:
Book-entry only form represented by one or more global securities deposited
with The Depository Trust Company ("DTC") or its designated custodian, to be
made available for checking by the Representatives at least twenty-four hours
prior to the Time of Delivery at the office of DTC.
Specified Funds for Payment of Purchase Price: next-day funds
Blackout provisions with respect to the Designated Preferred Securities: As set
forth in Section 5(e) of the Underwriting Agreement
Time of Delivery:
10 a.m. (New York City time), January 23, 1995
<PAGE>
Closing Location: Day, Berry & Howard, CityPlace, Hartford, CT 06103-3499, or
as agreed to by the parties
Names and addresses of Representatives:
Designated Representatives: Goldman, Sachs & Co.
Salomon Brothers Inc
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Morgan Stanley & Co. Incorporated
Prudential Securities Incorporated
Smith Barney Inc.
Address for Notices, etc.: c/o Goldman, Sachs & Co., 85 Broad Street,
New York, NY 10004
Attention: Registration Department
Other Terms: As set forth in the Prospectus
<PAGE>
ANNEX II
Pursuant to Section 7(f) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect
to the Guarantor and its subsidiaries within the meaning of the Act and
the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable,
financial forecasts and/or pro forma financial information) audited by
them and included or incorporated by reference in the Registration
Statement or the Prospectus comply as to form in all material respects
with the applicable accounting requirements of the Act or the Exchange
Act, as applicable, and the related published rules and regulations
thereunder; and, if applicable, they have made a review in accordance with
standards established by the American Institute of Certified Public
Accountants of the consolidated interim financial statements, selected
financial data, pro forma financial information, financial forecasts
and/or condensed financial statements derived from audited financial
statements of the Guarantor for the periods specified in such letter, as
indicated in their reports thereon, copies of which have been furnished to
the representatives of the Underwriters (the "Representatives") and are
attached hereto;
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of
the unaudited condensed consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included in the
Prospectus and/or included in the Guarantor"s quarterly reports on Form
10-Q incorporated by reference into the Prospectus; and on the basis of
specified procedures including inquiries of officials of the Guarantor who
have responsibility for financial and accounting matters regarding whether
the unaudited condensed consolidated financial statements referred to in
paragraph (v)(A)(i) below comply as to form in all material respects with
the applicable accounting requirements of the Act and the Exchange Act and
the related published rules and regulations, nothing came to their
attention that caused them to believe that the unaudited condensed
consolidated financial statements do not comply as to form in all material
respects with the applicable accounting requirements of the Act and the
Exchange Act and the related published rules and regulations;
(iv) The unaudited selected financial information with respect to
the consolidated results of operations and financial position of the
Guarantor for the five most recent fiscal years included in the Prospectus
and included or incorporated by reference in Item 6 of the Guarantor"s
Annual Report on Form 10-K for the most recent fiscal year agrees with the
corresponding amounts (after restatement where applicable) in the audited
consolidated financial statements for such five fiscal years which were
included or incorporated by reference in the Guarantor"s Annual Reports on
Form 10-K for such fiscal years;
(v) On the basis of limited procedures, not constituting an audit
in accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements and other information
referred to below, a reading of the latest available interim financial
statements of the Guarantor and its subsidiaries, inspection of the minute
books of the Guarantor and its subsidiaries since the date of the latest
<PAGE>
audited financial statements included or incorporated by reference in the
Prospectus, inquiries of officials of the Guarantor and its subsidiaries
responsible for financial and accounting matters and such other inquiries
and procedures as may be specified in such letter, nothing came to their
attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash
flows included in the Prospectus and/or included or incorporated by
reference in the Guarantor"s Quarterly Reports on Form 10-Q
incorporated by reference in the Prospectus do not comply as to form
in all material respects with the applicable accounting requirements
of the Exchange Act and the related published rules and regulations,
or (ii) any material modifications should be made to the unaudited
condensed consolidated statements of income, consolidated balance
sheets and consolidated statements of cash flows included in the
Prospectus or included in the Guarantor"s Quarterly Reports on Form
10-Q incorporated by reference in the Prospectus, for them to be in
conformity with generally accepted accounting principles;
(B) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the corresponding
items in the unaudited consolidated financial statements from which
such data and items were derived, and any such unaudited data and
items were not determined on a basis substantially consistent with
the basis for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in the
Guarantor"s Annual Report on Form 10-K for the most recent fiscal
year;
(C) the unaudited financial statements which were not included in
the Prospectus but from which were derived the unaudited condensed
financial statements referred to in clause (A) and any unaudited
income statement data and balance sheet items included in the
Prospectus and referred to in clause (B) were not determined on a
basis substantially consistent with the basis for the audited
financial statements included or incorporated by reference in the
Guarantor"s Annual Report on Form 10-K for the most recent fiscal
year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus
do not comply as to form in all material respects with the
applicable accounting requirements of the Act and the published
rules and regulations thereunder or the pro forma adjustments have
not been properly applied to the historical amounts in the
compilation of those statements;
(E) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the consolidated
capital stock (other than issuances of capital stock upon exercise
of options and stock appreciation rights, upon earn-outs of
performance shares and upon conversions of convertible securities,
in each case which were outstanding on the date of the latest
balance sheet included or incorporated by reference in the
Prospectus) or any increase in the consolidated long-term debt of
the Guarantor and its subsidiaries, or any decreases in consolidated
net current assets or stockholders" equity or other items specified
by the Representatives, or any increases in any items specified by
the Representatives, in each case as compared with amounts shown in
<PAGE>
the latest balance sheet included or incorporated by reference in
the Prospectus, except in each case for changes, increases or
decreases which the Prospectus discloses have occurred or may occur
or which are described in such letter; and
(F) for the twelve-month period ended on the specified date
referred to in Clause (E) there were any decreases in consolidated
net revenues or operating profit or the total or per share amounts
of consolidated net income or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with the comparable period
of the preceding year and with any other period of corresponding
length specified by the Representatives, except in each case for
increases or decreases which the Prospectus discloses have occurred
or may occur or which are described in such letter; and
(vi) In addition to the examination referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii) and (v) above, they have carried out
certain specified procedures, not constituting an examination in
accordance with generally accepted auditing standards, with respect to
certain amounts, percentages and financial information specified by the
Representatives which are derived from the general accounting records of
the Guarantor and its subsidiaries, which appear in the Prospectus
(excluding documents incorporated by reference), or in Part II of, or in
exhibits and schedules to, the Registration Statement specified by the
Representatives or in documents incorporated by reference in the
Prospectus specified by the Representatives, and have compared certain of
such amounts, percentages and financial information with the accounting
records of the Guarantor and its subsidiaries and have found them to be in
agreement.
All references in this Annex II to the Prospectus shall be deemed to refer
to the Prospectus (including the documents incorporated by reference therein)
as defined in the Underwriting Agreement as of the date of the letter delivered
on the date of the Pricing Agreement for purposes of such letter and to the
Prospectus as amended or supplemented (including the documents incorporated by
reference therein) in relation to the applicable Designated Preferred
Securities for purposes of the letter delivered at the Time of Delivery for
such Designated Preferred Securities.
The Connecticut Light and Power Company
Western Massachusetts Electric Company
File No. 70-8451
Exhibit D.2
(Supplemental)
STATE OF CONNECTICUT
DEPARTMENT OF PUBLIC UTILITY CONTROL
ONE CENTRAL PARK PLAZA
NEW BRITAIN, CT 06051
DOCKET NO. 94-10-09 APPLICATION OF THE CONNECTICUT LIGHT AND POWER COMPANY
WITH RESPECT TO THE ISSUANCE OF MONTHLY INCOME PREFERRED
SECURITIES AND RELATED TRANSACTIONS
January 13, 1995
By the following Commissioners:
Reginald J. Smith
Thomas M. Benedict
Heather F. Hunt
SUPPLEMENTAL DECISION
<PAGE>
SUPPLEMENTAL DECISION
I. INTRODUCTION
A. Applicant's Proposal
By Decision dated November 16, 1994, the Department of Public Utility Control
(Department) approved the application of The Connecticut Light and Power
Company (Company or CL&P), to issue and sell up to $150 million of monthly
income preferred securities (MIPS). In addition and related to this, the
Department approved the formation by CL&P of an affiliated limited partnership
(CL&P Capital, L.P.), the issuance of the MIPS by the limited partnership, and
the use by the limited partnership of the proceeds from such issuance to
purchase subordinated debentures to be issued by CL&P. Associated with this,
the Department also approved the equitable spreading of the unamortized balance
of issuance expenses with respect to the refunded securities, including but not
limited to call and market premiums (collectively Related Transactions). The
issuance of the MIPS and the Related Transactions was subject to the condition
that prior to the issue and sale thereof, the Company shall obtain further
approval of the Department with respect to the specific terms of the MIPS.
B. Conduct of The Proceeding
Pursuant to the notice of hearing and special meeting dated January 10, 1995,
a public hearing was held on January 13, 1995, in the Department's offices in
New Britiain, Connecticut.
II. PETITIONER'S EVIDENCE
By addenda dated January 12, 1995, filed on January 12, 1995, marked Late
Filed Exhibit No. 1 and Late Filed Exhibit No. 2 and Late Filed Exhibit No. 3
dated January 13, 1995, filed on January 13, 1995 (collectively Addenda) the
Company indicated:
(a) Aggregate principal amount of the issuance.
MIPS: $100,000,000 (aggregate liquidation preference)
Subordinated
Debentures: approximately $103,100,000 (sold to CL&P Capital,
L.P.)
(b) Outstanding securities to be refunded.
$50,000,000 principal amount of 1989 Series, DARTS
$75,000,000 principal amount of 1989 Series, 9.0% Preferred Stock
The above amount in excess of the net proceeds to CL&P will be refunded
with short-term debt.
(c) Distribution rate applicable to MIPS.
9.30%
Interest rate applicable to Subordinated Debentures.
Same as rate applicable to MIPS.
(d) Effective distribution rate applicable to MIPS.
9.60% with an underwriting fee of 3.15%.
Effective interest rate applicable to Subordinated Debentures.
Same as rate applicable to MIPS.
<PAGE>
(e) Date of issuance.
On or about Friday, January 20, 1995.
Years to maturity.
Approximately 49.
(f) Purchase discount.
None. However, CL&P will pay the Underwriters an underwriting fee equal
to 3.15%, or $3,150,000.
(g) Spread over comparable U.S. Treasury securities.
A comparable 49-year Treasury rate is not available. However, the 30-
year Treasury closed with a yield of 7.87% as of Wednesday, January 11,
1995.
(h) Sinking fund and redemption provisions and any other features of the
Subordinated Debentures.
Neither the MIPS nor the Subordinated Debentures will be entitled to a
sinking fund.
The MIPS and the Subordinated Debentures will be callable after five
years. Otherwise, the redemption and other features of the MIPS and the
Subordinated Debentures will be as described in the Application, the
prefiled testimony, and the exhibits filed therewith.
(i) Issuance costs.
Estimated at $325,000, which does not include the underwriting fee
described in (f) above.
(j) Net proceeds.
To CL&P Capital, L.P.: $100,000,000
To CL&P: $96,850,000, with an underwriting fee of 3.15%.
(k) Breakeven rates for refunded securities.
The historical average rate that CL&P has paid on its DARTS was 5.3%
through September 30, 1994. However, the current CL&P DARTS rate is
5.85%, and the August, 1994 DRI projections show that the 3-month
Commercial Paper composite rate over the next five years is expected to
average 5.66%.
The breakeven rate for the 1989 Series, 9.0% Preferred Stock is 7.25%
assuming redemption in the first quarter of 1995.
(l) Impact on CL&P's rate of return and capital structure.
Filed as Attachment 1.
(m) Quotes of competative bids.
Not applicable.
(n) Marketing method.
CL&P has concluded, based upon its discussions with the Underwriters,
that the benefits of the proposed transaction, as described in the
Application and the prefiled testimony, could not be achieved without
use of the MIPS structure. Consequently, the MIPS will be marketed
publicly and the Subordinated Debentures will be sold to CL&P Capital,
L.P., as described in the Application.
<PAGE>
(o) Revenue requirement impact.
Net reduction to revenue requirements of approximately $3.85 million.
III. DEPARTMENT ANALYSIS
The hearing of January 13, 1995, was conducted pursuant to the Decision
issued in this docket on November 16, 1995. That Decision approved up to $150
million in MIPS to be issued and sold, through the issuance of contemporaneous
Subordinated Debentures, with the proceeds to be used to redeem or otherwise
reacquire a portion of its outstanding fixed rate preferred stock and/or Dutch
Rate Transferable Securities (DARTS). This approval was contingent upon the
further approval specified above.
The purpose of CL&P's MIPS issuance and contemperaneous Subordinated
Debentures is to reduce its cost of debt through the use of these tax
advantaged financial products. Therefore, Department staff analyzed the
distribution rate on the MIPS of 9.30% on an after-tax basis. Using an
effective tax rate of 41.5% the after-tax range is 5.44%. In order to analyze
the propriety of redeeming debt, a comparison of the after-tax payments that
CL&P will make on the MIPS versus the effective cost of the preferred stock,
after factoring into account redemption premiums on the preferred stock and the
issuance costs of the MIPS results in a break-even rate. The breakeven rate is
the rate on a new issuance at which the present value of the cash flow change
from the issuance is zero. This breakeven rate is the distribution rate below
which it is economical for CL&P to use MIPS to refund outstanding preferred
stock. For the 1989 Series, 9.0% Preferred Stock the breakeven rate is 7.25%
and as such it is economical to redeem this series. (Interogatory EL-6 and
Late Filed Exhibit No. 1) Since the DARTS are a variable rate security a
similar breakeven calculation was not done. A breakeven rate for the DARTS is
conservatively assumed to equal the historical DARTS rate of 5.3% through
September 30, 1994. The current DARTS rate is 5.85% and with the August, 1994
DRI projections showing that the 3-month Commercial Paper composite rate over
the next five years forecasted to average 5.66%, which is used as a proxy for
DARTS, it is economical to refund the DARTS with the MIPS. (Interogatory EL-
8, Late Filed Exhibit No. 1, and Late Filed Exhibit No. 2)
Department staff analyzed the effect on the capital structure of CL&P and
revenue requirements. Department staff concludes the Company's capital
structure is enhanced and revenue requirements decreased. At a distribution
rate of 9.30%, for the MIPS, the overall weighted cost of capital is decreased
by approximately .125%. (Late Filed Exhibit No. 1, Attachment 2) Revenue
requirements are decreased by approximately $3.85 million, using the 13-month
average rate base as filed with the Department on November 1, 1994 and the
.115% decrease in weighted average cost of capital as shown by the following
calculation: (Late Filed Exhibit No. 1, Attachment 2)
$3,350,567,000 x .115% = $3,853,152
In addition, in December 1994 CL&P confirmed with the major rating agencies
that using the MIPS to refund the DARTS would improve the quality of CL&P's
capital structure. (Late Filed Exhibit No. 2) The rating agencies look upon
MIPS as having equity like characteristics when compared to DARTS. (Keane,
PFT, Pages 6 and 7)
The terms of the MIPS as indicated in the Addenda are within the parameters
that are economical for CL&P to issue the MIPS and reflects the lowest
financing cost available to CL&P.
IV. FINDINGS OF FACT
<PAGE>
1. The Company will use the net proceeds of the MIPS issuance to refund 1989
Series, DARTS and 1989 Series, 9% Preferred Stock.
2. The lowest cost financing available has been achieved by the Company.
3. The revenue requirement impact of the MIPS and contemperaneous Subordinated
Debentures is a net reduction to revenue requirements of approximately $3.85
million.
V. CONCLUSIONS AND ORDERS
A. Conclusion
The proposed financing and its effect on the Company's financial structure is
reasonable, and approval of this application is in the public interest. Upon
consideration of all the evidence presented in this proceeding and discussed
herein, the application is approved subject to the following orders.
B. Orders
For the following Orders, please submit an original and ten (10) copies of
the requested material to the Executive Secretary, identified by Docket Number,
Title, and Order Number.
1. The terms and conditions under which the MIPS and/or Subordinated Debentures
are to be issued and sold shall be substantially as specified by CL&P in its
application and no further material written or oral supplements to or
material modifications to the terms and conditions shall be executed without
prior approval of the Department. CL&P shall notify the Department within 60
days from the issuance date of the MIPS and/or Subordinated Debentures that
no material modifications were made to the terms and conditions under which
the MIPS and/or Subordinated Debentures were issued and sold.
2. The proceeds from the issue and sale of the MIPS and/or Subordinated
Debentures, after payment of expenses related to the issuance, shall be used
by the Company for purposes specified in its application. The Company shall
furnish to the Department within 60 days from the issuance date of the MIPS
and/or Subordinated Debentures a statement reflecting how the proceeds of
such financings were utilized.
Within 90 days from the issuance and sale of the MIPS and/or Subordinated
Debentures, CL&P shall submit to the Department an itemization of all expenses
incurred in the transaction.
<PAGE>
DOCKET NO. 94-10-09 APPLICATION OF THE CONNECTICUT LIGHT AND POWER COMPANY
WITH RESPECT TO THE ISSUANCE OF MONTHLY INCOME PREFERRED
SECURITIES AND RELATED TRANSACTIONS
This Decision is adopted by the following Commissioners:
Reginald J. Smith
Thomas M. Benedict
Heather F. Hunt
CERTIFICATE OF SERVICE
The foregoing is a true and correct copy of the Decision issued by the
Department of Public Utility Control, State of Connecticut, and was forwarded
by Certified Mail to all parties of record in this proceeding on the date
indicated.
/s/ Robert J. Murphy/DM 1/13/95
Robert J. Murphy Date
Executive Secretary
Department of Public Utility Control
January 31, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: File No. 70-8451
Application/Declaration with Respect to the Organization of Limited
Partnerships, the Issuance of Preferred Limited Partnership Interests
and Subordinated Debentures, and Related Transactions
Ladies and Gentlemen:
As counsel to The Connecticut Light and Power Company ("CL&P"), we are
furnishing this opinion in connection with the Certificate as to Consummation
of Transaction (the "Certificate") delivered on the date hereof pursuant to the
Public Utility Holding Company Act of 1935, as amended, and Rule 24(a)
thereunder, and relating to the Application/Declaration on Form U-1, as amended
(the "Declaration"), filed by CL&P and Western Massachusetts Electric Company
with the Securities and Exchange Commission (the "Commission") in File No. 70-
8451. The Commission permitted the Declaration to become effective by its
Orders set forth in Release No. 35-26216 (January 12, 1995) and Release No. 35-
26217 (January 13, 1995) (the "Orders"). Capitalized terms used herein and not
otherwise defined are used as defined in the Declaration.
The Certificate is with respect to transactions consummated on January 23,
1995 (the "Consummated Transactions"), pursuant to which, inter alia, (i)
CL&P's Issuing Partnership (the "CL&P Issuing Partnership") issued and sold to
the Underwriters $100,000,000 in aggregate liquidation preference of its
Preferred Partnership Interests with a distribution rate of 9.30%, (ii) CL&P
issued and delivered to the CL&P Issuing Partnership $103,100,000 in principal
amount of related CL&P Subordinated Debentures with an interest rate of 9.30%,
and (iii) CL&P issued and delivered the CL&P Guaranty with respect to the CL&P
Issuing Partnership's Preferred Partnership Interests.
We have previously furnished our opinion dated December 6, 1994, filed as
Exhibits F.1 and F.2 to the Declaration (the "Opinion"). In addition to our
examination set forth in the Opinion, we have examined the Orders, the
Certificate, and executed copies of the financing documents described in the
Declaration, and we have examined or caused to be examined such other papers,
documents, and records, and have made such examination of law and have
satisfied ourselves as to such other matters as we have deemed relevant or
necessary for the purpose of this opinion. We have assumed the authenticity of
all documents submitted to us as originals, the genuineness of all signatures,
the legal capacity of natural persons, and the conformity to originals of all
documents submitted to us as copies.
Based upon the foregoing, we are of the opinion that:
<PAGE>
(a) All state laws applicable to CL&P in connection with the
Consummated Transactions have been complied with.
(b) (i)
(A) CL&P is validly organized and duly existing under the
laws of the State of Connecticut; and
(B) the CL&P Issuing Partnership is validly organized and
duly existing under the laws of the State of Delaware;
(ii) the CL&P Issuing Partnership's Preferred Partnership
Interests are validly issued, fully paid, and nonassessable limited
partner interests in the CL&P Issuing Partnership, and the holders
thereof are entitled to the rights and privileges appertaining thereto
set forth in the CL&P Partnership Agreement; and
(iii)
(A) the CL&P Subordinated Debentures are valid and binding
obligations of CL&P in accordance with their terms; and
(B) the obligations of CL&P under the CL&P Guaranty are valid
and binding obligations of CL&P in accordance with its terms.
(c) The CL&P Issuing Partnership legally acquired the CL&P Subordinated
Debentures.
(d) The consummation by CL&P of the Consummated Transactions did not
violate the legal rights of the holders of any securities issued by CL&P or
any associate company thereof.
The opinions expressed herein are qualified in their entirety as follows:
(i) no opinion is expressed with respect to laws other than those of (A) the
United States of America, (B) the State of Connecticut, and (C) the State of
Delaware; and (ii) to the extent that the opinions relate to the enforceability
of any agreement or other document referred to herein, the opinions (A) assume
that such agreements or documents were duly authorized, executed, and delivered
by all parties thereto other than CL&P and CL&P Capital, (B) are subject to the
effect of bankruptcy, insolvency, moratorium, and other similar laws affecting
creditors' rights generally, general principles of equity, and certain laws and
judicial decisions that may affect the enforceability of certain rights and
remedies provided in the CL&P Indenture and the CL&P Guaranty, none of which
laws and judicial decisions, however, making the rights and remedies provided
in the CL&P Indenture and the CL&P Guaranty, taken as a whole, inadequate for
the practical realization of the benefits provided for in the CL&P Indenture
and the CL&P Guaranty, and (C) are qualified in that indemnification against
violations of securities laws may be subject to matters of public policy.
In rendering the opinion contained in paragraph (d) above, we have relied
solely upon the opinion of Jeffrey C. Miller, Esq., Assistant General Counsel
of Northeast Utilities Service Company, dated the date hereof, a copy of which
is attached hereto, and such opinion in paragraph (d) above is subject to the
qualifications set forth in such opinion of Mr. Miller.
We hereby consent to the use of this opinion in connection with the filing of
the Certificate.
Very truly yours,
<PAGE>
/s/Day, Berry & Howard
RJW/KHE
<PAGE>
January 31, 1995
Day, Berry & Howard
CityPlace
Hartford, CT 06103-3499
Re: File No. 70-8451
Application/Declaration with Respect to the Organization of Limited
Partnerships, the Issuance of Preferred Limited Partnership Interests
and Subordinated Debentures, and Related Transactions
Ladies and Gentlemen:
I am Assistant General Counsel of Northeast Utilities Service Company
("NUSCO"), a service company subsidiary of Northeast Utilities ("NU"), and I am
furnishing this opinion to you to enable you to render your opinion to the
Securities and Exchange Commission (the "Commission") in connection with the
Certificate as to Consummation of Transaction (the "Certificate") delivered on
the date hereof pursuant to the Public Utility Holding Company Act of 1935, as
amended, and Rule 24(a) thereunder, and relating to the Application/Declaration
on Form U-1, as amended (the "Declaration"), filed by The Connecticut Light and
Power Company ("CL&P") and Western Massachusetts Electric Company, subsidiaries
of NU, with the Commission in File No. 70-8451. The Commission permitted the
Declaration to become effective by its Orders set forth in Release No. 35-
26216 (January 12, 1995) and Release No. 35-26217 (January 13, 1995) (the
"Orders"). Capitalized terms used herein and not otherwise defined are used as
defined in the Declaration.
The Certificate is with respect to transactions consummated on January 23,
1995 (the "Consummated Transactions"), pursuant to which, inter alia, (i)
CL&P's Issuing Partnership (the "CL&P Issuing Partnership") issued and sold to
the Underwriters $100,000,000 in aggregate liquidation preference of its
Preferred Partnership Interests with a distribution rate of 9.30%, (ii) CL&P
issued and delivered to the CL&P Issuing Partnership $103,100,000 in principal
amount of related CL&P Subordinated Debentures with an interest rate of 9.30%,
and (iii) CL&P issued and delivered the CL&P Guaranty with respect to the CL&P
Issuing Partnership's Preferred Partnership Interests.
I have previously furnished to you my opinion dated December 6, 1994 (the
"Opinion"), to enable you to render your opinion to the Commission filed as
Exhibits F.1 and F.2 to the Declaration. In addition to my examination set
forth in the Opinion, I have examined the Orders and the Certificate, and I
have examined or caused to be examined by counsel associated with or engaged by
me, including counsel who are employed by NUSCO, such papers, documents, and
records, and have made such examination of law and have satisfied myself as to
such other matters as I have deemed relevant or necessary for the purpose of
this opinion. I have assumed the authenticity of all documents submitted to me
as originals, the genuineness of all signatures, the legal capacity of natural
<PAGE>
persons, and the conformity to originals of all documents submitted to me as
copies.
The opinions set forth herein are limited to the laws of the State of
Connecticut and the federal laws of the United States. I am a member of the
bar of the State of New York. I am not a member of the bar of the State of
Connecticut, and do not hold myself out as an expert in the laws of such
jurisdiction, although I have made a study of relevant laws of such
jurisdiction. In expressing opinions about matters governed by the laws of the
State of Connecticut, I have consulted with counsel who are employed by NUSCO
and are members of the bar of such jurisdiction.
Based upon and subject to the foregoing, I am of the opinion that the
consummation by CL&P of the Consummated Transactions did not violate the legal
rights of the holders of any securities issued by CL&P or any associate company
thereof.
I hereby consent to your filing of this opinion with the Commission as an
attachment to the opinion that you will file with the Certificate.
Very truly yours,
/s/Jeffrey C. Miller
