FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _____ to _____
Commission Registrant; State of Incorporation; I.R.S. Employer
File Number Address; and Telephone Number Identification No.
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1-5324 NORTHEAST UTILITIES 04-2147929
(a Massachusetts voluntary association)
174 Brush Hill Avenue
West Springfield, Massachusetts 01090-0010
Telephone: (413) 785-5871
0-404 THE CONNECTICUT LIGHT AND POWER COMPANY 06-0303850
(a Connecticut corporation)
Selden Street
Berlin, Connecticut 06037-1616
Telephone: (203) 665-5000
1-6392 PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE 02-0181050
(a New Hampshire corporation)
1000 Elm Street
Manchester, New Hampshire 03105
Telephone: (603) 669-4000
0-7624 WESTERN MASSACHUSETTS ELECTRIC COMPANY 04-1961130
(a Massachusetts corporation)
174 Brush Hill Avenue
West Springfield, Massachusetts 01090-0010
Telephone: (413) 785-5871
33-43508 NORTH ATLANTIC ENERGY CORPORATION 06-1339460
(a New Hampshire corporation)
1000 Elm Street
Manchester, New Hampshire 03105
Telephone: (603) 669-4000
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Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Registrant Title of Each Class On Which Registered
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NORTHEAST UTILITIES Common Shares, $5.00 par value New York Stock
Exchange, Inc.
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Securities registered pursuant to Section 12(g) of the Act:
Registrant Title of Class
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NORTHEAST UTILITIES Common Share Warrants, no par value, exercisable
at $ 24 per share
THE CONNECTICUT LIGHT Preferred Stock, par value $50.00 per share, issuable
AND POWER COMPANY in series, of which the following series are
outstanding:
$1.90 Series of 1947 4.96% Series of 1958
$2.00 Series of 1947 4.50% Series of 1963
$2.04 Series of 1949 5.28% Series of 1967
$2.20 Series of 1949 6.56% Series of 1968
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3.90% Series of 1949 $3.24 Series G of 1968 $2.06 Series E of 1954 7.23% Series of 1992 $2.09 Series F of 1955 5.30% Series of 1993 4.50% Series of 1956
Class A Preferred Stock, par value $25.00 per share, issuable in series, of which the following series are outstanding:
9.00% Series of 1989
Dutch Auction Rate Transferable Securities,
1989 Series
PUBLIC SERVICE COMPANY Preferred Stock, par value $25.00 per share, issuable
OF NEW HAMPSHIRE in series, of which the following series are
outstanding:
10.60% Series A of 1991
WESTERN MASSACHUSETTS Preferred Stock, par value $100.00 per share,
ELECTRIC COMPANY issuable in series, of which the following series are
outstanding:
7.72% Series B of 1971
Class A Preferred Stock, par value $25.00 per share,
issuable in series, of which the following series are
outstanding:
7.60% Series of 1987
Dutch Auction Rate Transferable Securities,
1988 Series
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Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days.
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrants' knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ X ]
The aggregate market value of NORTHEAST UTILITIES' Common Shares, $5.00 Par Value, held by nonaffiliates, was $ 2,907,287,878, based on a closing sales price of $ 23.375 per share for the 124,375,952 common shares outstanding on February 28, 1994. NORTHEAST UTILITIES holds all of the 12,222,930 shares, 1,000 shares, 1,072,471 shares and 1,000 shares of the outstanding common stock of THE CONNECTICUT LIGHT AND POWER COMPANY, PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE, WESTERN MASSACHUSETTS ELECTRIC COMPANY and NORTH ATLANTIC ENERGY CORPORATION, respectively.
Documents Incorporated by Reference:
Part of Form 10-K
Into Which Document
Description is Incorporated
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Portions of Annual Reports to Shareholders of the following companies for the year ended December 31, 1993:
Northeast Utilities Part II The Connecticut Light and Power Company Part II Public Service Company of New Hampshire Part II Western Massachusetts Electric Company Part II North Atlantic Energy Corporation Part II Portions of the Northeast Utilities Proxy Statement dated April 1, 1994 Part III |
NORTHEAST UTILITIES
THE CONNECTICUT LIGHT AND POWER COMPANY
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
WESTERN MASSACHUSETTS ELECTRIC COMPANY
NORTH ATLANTIC ENERGY CORPORATION
1993 Form 10-K Annual Report
Table of Contents
PART I
Page
Item 1. Business. . . . . . . . . . . . . . . . . . . 1
The Northeast Utilities System . . . . . . . . . . 1
Competition and Marketing. . . . . . . . . . . . . 2
Economic Development. . . . . . . . . . . . . 2
Business Retention/Business Recovery. . . . . 3
Competitive Generation. . . . . . . . . . . . 4
Retail Wheeling . . . . . . . . . . . . . . . 4
Fuel Switching/Electrotechnologies. . . . . . 5
Wholesale Marketing . . . . . . . . . . . . . 6
Rates. . . . . . . . . . . . . . . . . . . . . . . 7
Connecticut Retail Rates. . . . . . . . . . . 7
New Hampshire Retail Rates. . . . . . . . . . 12
Massachusetts Retail Rates. . . . . . . . . . 16
Wholesale Rates . . . . . . . . . . . . . . . 19
Resource Plans . . . . . . . . . . . . . . . . . . 21
Construction. . . . . . . . . . . . . . . . . 21
Future Needs. . . . . . . . . . . . . . . . . 22
Financing Program. . . . . . . . . . . . . . . . . 24
1993 Financings . . . . . . . . . . . . . . . 24
Financing Nuclear Fuel. . . . . . . . . . . . 25
1994 Financing Requirements . . . . . . . . . 26
1994 Financing Plans. . . . . . . . . . . . . 27
Financing Limitations . . . . . . . . . . . . 27
Electric Operations. . . . . . . . . . . . . . . . 30
Distribution and Load . . . . . . . . . . . . 30
Generation and Transmission . . . . . . . . . 33
Hydro-Quebec. . . . . . . . . . . . . . . . . 34
Fossil Fuels. . . . . . . . . . . . . . . . . 35
Nuclear Generation. . . . . . . . . . . . . . 37
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Non-Utility Businesses . . . . . . . . . . . . . . 53
General . . . . . . . . . . . . . . . . . . . 53
Private Power Development . . . . . . . . . . 53
Energy Management Services. . . . . . . . . . 54
Regulatory and Environmental Matters . . . . . . . 55
Public Utility Regulation . . . . . . . . . . 55
NRC Nuclear Plant Licensing . . . . . . . . . 56
Environmental Regulation. . . . . . . . . . . 57
Electric and Magnetic Fields. . . . . . . . . 68
FERC Hydro Project Licensing. . . . . . . . . 69
Employees. . . . . . . . . . . . . . . . . . . . . 70
Item 2. Properties. . . . . . . . . . . . . . . . . . 72
Electric Properties. . . . . . . . . . . . . . . . 73
Franchises . . . . . . . . . . . . . . . . . . . . 78
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Item 3. Legal Proceedings . . . . . . . . . . . . . . 80
Item 4. Submission of Matters to a Vote of Security
Holders (Fourth Quarter 1993) . . . . . . . . 85
PART II
Item 5. Market for Registrants' Common Equity and
Related Shareholder Matters . . . . . . . . . 87
Item 6. Selected Financial Data . . . . . . . . . . . 87
Item 7. Discussion and Analysis of Financial
Condition and Results of Operations . . . . . 87
Item 8. Financial Statements and Supplementary Data . 88
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure . . . 89
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PART III
Item 10. Directors and Executive Officers of the
Registrants . . . . . . . . . . . . . . . . . 90
Item 11. Executive Compensation. . . . . . . . . . . . 94
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Item 12. Security Ownership of Certain Beneficial
Owners and Management . . . . . . . . . . . . 98
Item 13. Certain Relationships and Related
Transactions. . . . . . . . . . . . . . . . . 100
PART IV
Item 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K . . . . . . . . . . . 101
GLOSSARY OF TERMS
The following is a glossary of frequently used abbreviations or acronyms that are found throughout this report:
COMPANIES
NU. . . . . . . . . . . . . . Northeast Utilities
CL&P . . . . . . . . . . . . The Connecticut Light and Power Company
Charter Oak . . . . . . . . . Charter Oak Energy, Inc.
WMECO . . . . . . . . . . . . Western Massachusetts Electric Company
HWP . . . . . . . . . . . . . Holyoke Water Power Company
NUSCO or the Service Company. Northeast Utilities Service Company
NNECO . . . . . . . . . . . . Northeast Nuclear Energy Company
NAEC. . . . . . . . . . . . . North Atlantic Energy Corporation
NAESCO or North Atlantic. . . North Atlantic Energy Service
Corporation
PSNH. . . . . . . . . . . . . Public Service Company of New Hampshire
RRR . . . . . . . . . . . . The Rocky River Realty Company
the System. . . . . . . . . . the Northeast Utilities System
CYAPC . . . . . . . . . . . . Connecticut Yankee Atomic Power Company
MYAPC . . . . . . . . . . . . Maine Yankee Atomic Power Company
VYNPC . . . . . . . . . . . . Vermont Yankee Nuclear Power
Corporation
YAEC. . . . . . . . . . . . . Yankee Atomic Electric Company
GENERATING UNITS
Millstone 1 . . . . . . . . . Millstone Unit No. 1, a 659.5-MW
nuclear electric generating unit
completed in 1970
Millstone 2 . . . . . . . . . Millstone Unit No. 2, an 862-MW
nuclear electric generating unit
completed in 1975
Millstone 3 . . . . . . . . . Millstone Unit No. 3, a 1,149-MW
nuclear electric generating unit
completed in 1986
Seabrook or Seabrook 1. . . . Seabrook Unit No. 1, a 1,150-MW
nuclear electric generating unit
completed in 1986. Seabrook 1 went
into service in 1990.
REGULATORS
DOE . . . . . . . . . . . . . U.S. Department of Energy
DPU . . . . . . . . . . . . . Massachusetts Department of Public
Utilities
DPUC. . . . . . . . . . . . . Connecticut Department of Public
Utility Control
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GLOSSARY OF TERMS
REGULATORS (Continued)
MDEP. . . . . . . . . . . . . Massachusetts Department of
Environmental Protection
CDEP. . . . . . . . . . . . . Connecticut Department of
Environmental Protection
EPA . . . . . . . . . . . . . U.S. Environmental Protection Agency
FASB. . . . . . . . . . . . . Financial Accounting Standards Board
FERC. . . . . . . . . . . . . Federal Energy Regulatory Commission
NHDES . . . . . . . . . . . . New Hampshire Department of
Environmental Services
NHPUC . . . . . . . . . . . . New Hampshire Public Utilities
Commission
NRC . . . . . . . . . . . . . Nuclear Regulatory Commission
SEC . . . . . . . . . . . . . Securities and Exchange Commission
OTHER
1935 Act. . . . . . . . . . . Public Utility Holding Company Act of
1935
AFUDC . . . . . . . . . . . . Allowance for funds used during
construction
CC. . . . . . . . . . . . . . Conservation charge
C&LM. . . . . . . . . . . . . Conservation and load management
CWIP. . . . . . . . . . . . . Construction work in progress
Energy Policy Act . . . . . . Energy Policy Act of 1992
FAC . . . . . . . . . . . . . Fossil-fuel adjustment clause
FPPAC . . . . . . . . . . . . Fuel and purchased power adjustment
clause (PSNH)
GUAC. . . . . . . . . . . . . Generation utilization adjustment
clause (CL&P)
IRM . . . . . . . . . . . . . Integrated resource management
MW. . . . . . . . . . . . . . Megawatt
NBFT. . . . . . . . . . . . . Niantic Bay Fuel Trust, lessor of
nuclear fuel used by CL&P and WMECO
NEPOOL. . . . . . . . . . . . New England Power Pool
NUG&T . . . . . . . . . . . . Northeast Utilities Generation and
Transmission Agreement
IPPs. . . . . . . . . . . . . Independent power producers
QFs . . . . . . . . . . . . . Qualifying cogeneration and small
power production facilities
ROE . . . . . . . . . . . . . Return on equity
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NORTHEAST UTILITIES
THE CONNECTICUT LIGHT AND POWER COMPANY
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
WESTERN MASSACHUSETTS ELECTRIC COMPANY
NORTH ATLANTIC ENERGY CORPORATION
PART I
ITEM 1. BUSINESS
THE NORTHEAST UTILITIES SYSTEM
Northeast Utilities (NU) is the parent company of the Northeast
Utilities system (the System). It is not itself an operating company.
Through four of NU's wholly-owned subsidiaries (The Connecticut Light and
Power Company [CL&P], Public Service Company of New Hampshire [PSNH], Western
Massachusetts Electric Company [WMECO] and Holyoke Water Power Company
[HWP]), the System furnishes electric service in Connecticut, New Hampshire
and western Massachusetts. In addition to their retail electric service,
CL&P, PSNH, WMECO and HWP (including its wholly-owned subsidiary Holyoke
Power and Electric Company) together furnish firm wholesale electric service
to eight municipalities and utilities. The System companies also supply
other wholesale electric services to various municipalities and other
utilities. NU serves about 30 percent of New England's electric needs and is
one of the 20 largest electric utility systems in the country.
NU acquired PSNH, the largest electric utility in New Hampshire, in June 1992. PSNH was in bankruptcy reorganization proceedings from January 1988 to May 1991, when it emerged from bankruptcy in the first step of an NU- sponsored two-step plan of reorganization. NU's acquisition of PSNH was the second step of the reorganization plan. On October 1, 1993, the Bankruptcy Court in New Hampshire formally terminated the bankruptcy proceeding. See Item 3, Legal Proceedings. PSNH continues to operate its core electric utility business, but pursuant to the reorganization plan, PSNH transferred its 35.6 percent interest in the Seabrook nuclear generating facility (Seabrook) in Seabrook, New Hampshire to North Atlantic Energy Corporation (NAEC), a special purpose subsidiary of NU which sells the capacity and output of that unit to PSNH under two life-of-unit, full cost recovery contracts. In June 1992, NU's subsidiary North Atlantic Energy Service Corporation (North Atlantic) assumed operational responsibility for Seabrook. Before that, Seabrook had been operated by a division of PSNH.
Other wholly-owned subsidiaries of NU provide support services for the System companies and, in some cases, for other New England utilities. Northeast Utilities Service Company (NUSCO or the Service Company) provides centralized accounting, administrative, data processing, engineering, financial, legal, operational, planning, purchasing and other services to the System companies. Northeast Nuclear Energy Company (NNECO) acts as agent for the System companies and other New England utilities in operating nuclear generating facilities in Connecticut. North Atlantic acts as agent for the System companies and other New England utilities in operating Seabrook. Two other subsidiaries construct, acquire or lease some of the property and facilities used by the System companies.
NU has two other principal subsidiaries, Charter Oak Energy, Inc. (Charter Oak) and HEC Inc. (HEC), which have non-utility businesses. Directly and through subsidiaries, Charter Oak develops and invests in cogeneration, small power production and independent power production facilities. HEC provides energy management services for commercial, industrial and institutional electric customers. See "Non-Utility
Businesses."
COMPETITION AND MARKETING
Competition within the electric utility industry is increasing. In response, NU has developed, and is continuing to develop, a number of initiatives to retain and continue to serve its existing customers and to expand its retail and wholesale customer base. These initiatives are aimed at keeping customers from either leaving NU's retail service territory or replacing NU's electric service with alternative energy sources and at attracting new customers. Management believes that CL&P, PSNH and WMECO must continue to be responsive to their business customers, in particular, in dealing with the price of electricity and to recognize that many business customers have alternatives such as fuel switching, relocation and self- generation if the price of electricity is not competitive.
A System-wide emphasis on improved customer service is a central focus of the reorganization of NU that became effective on January 1, 1994. The reorganization entails realignment of the System into two new core business groups. The first core business group, the energy resources group, is devoted to energy resource acquisition and wholesale marketing and focuses on nuclear, fossil and hydroelectric generation, wholesale power marketing and new business development. The second core business group, the retail business group, oversees all customer service, transmission and distribution operations and retail marketing in Connecticut, New Hampshire and Massachusetts. These two core business groups are served by various support functions known collectively as the corporate center. In connection with NU's reorganization, the System has begun a corporate reengineering process which should help it to identify opportunities to become more competitive while improving customer service and maintaining a high level of operational performance.
ECONOMIC DEVELOPMENT
The cost of doing business, including the price of electricity, is higher in the System's service area, and the Northeast generally, than in most other parts of the country. Relatively high state and local taxes, labor costs and other costs of doing business in New England also contribute to competitive disadvantages for many industrial and commercial customers of CL&P, PSNH and WMECO. These disadvantages have aggravated the pressures on business customers in the current weakened regional economy. As a result, state and local governments in the region frequently offer incentives to attract new business development to, and to expand existing businesses within, their states. Since 1991, CL&P and WMECO have worked actively with state and local economic development authorities to package incentives for a variety of prospective or expanding customers. These economic development packages typically include both electric rate discounts and incentive payments for energy efficient construction, as well as technical support and energy conservation services.
In general, electric rate discounts are phased out over varying periods generally not in excess of ten years. From September 1991 through March 1, 1994, economic development rate agreements had been reached with approximately 45 industrial and commercial customers in the three states served by the System, including 38 customers in CL&P's service territory, one customer in PSNH's service territory and six customers in WMECO's service territory.
As an adjunct to their economic development efforts, CL&P and WMECO have also developed programs which provide incentives to customers planning to construct or significantly renovate commercial or industrial buildings within the System's service territory. Approximately 40 percent of all such construction qualifies for incentive payments for the installation or retrofitting of energy-efficient equipment designed to result in permanent savings for the customer in addition to any savings that result from the rate discounts.
The business expansion-related rate agreements cover small-to- medium-sized industrial companies and a few medium-sized commercial business relocations. In all cases where economic development rates are in effect, the additional load and associated revenues, even though received under discounted rates, result in a net benefit to the System by making a contribution towards the System's fixed costs. During 1993, 28 customers were on economic development rate riders, including 24 CL&P customers and four WMECO customers. The net benefit to the System during 1993 as a result of these agreements was approximately $300,000.
BUSINESS RETENTION/BUSINESS RECOVERY
From 1983 through 1989, the System's retail kilowatt-hour sales grew by an annual average rate of 3.8 percent. Since the end of 1989, retail sales have been level, except for the addition of PSNH's electric load as a result of NU's acquisition of PSNH, effective in June 1992. The leveling effect has resulted in part from the System's conservation and load management (C&LM) efforts, but is largely due to the region's persistent weak economy. Management expects a modest improvement in the economy in 1994 and moderate electric sales growth is anticipated.
To spur economic activity, NU's subsidiaries have worked in concert with state and local authorities to retain businesses that are considering relocating outside of the NU service territory. C&LM incentives are used with temporary rate reductions to produce both short-term and long-term cost savings for customers. These reductions are generally limited to five years but may be for as long as ten years. As of the end of 1993, 25 System customers received such reductions, including 19 CL&P customers, two PSNH customers and five WMECO customers. These customers in the aggregate represented less than 0.5 percent of System revenues.
The NU operating subsidiaries also offer rate reductions to business entities that can demonstrate that they are encountering financial problems threatening their viability but have reasonable prospects for improvement. These "business recovery" reductions can be brief in duration, sometimes lasting only a few months, or may extend for up to five years. From the time these rates became available in late 1991 through the end of 1993, 23 CL&P customers, two PSNH customers and eight WMECO customers have been granted such rate reductions. The CL&P customers provided approximately $10 million in annual revenues; the PSNH customers provided approximately $10 million in annual revenues and the WMECO customers provided approximately $1.5 million in annual revenues.
The bulk of the cost of the presently estimated discounts has been anticipated in base rates. The cost of the C&LM program is also collected from ratepayers.
COMPETITIVE GENERATION
A growing source of competition in the electric utility industry comes from companies that are marketing co-generation systems, primarily to those customers who can use both the electricity and the steam created by such systems. See "Regulatory and Environmental Matters - Public Utility Regulation." For instance, the Pratt & Whitney Aircraft Division of United Technologies Corporation, the System's largest industrial customer, put into service a 25-megawatt generating system in January 1993, reducing CL&P's industrial sales by approximately 1.5 percent, or $8 million, during 1993. While only a few other such systems have been installed in the System's service territory to date, the extent of growth of further self-generation cannot be predicted.
To help convince retail customers not to generate their own power, CL&P, PSNH and WMECO have offered a competitive generation rate or special rate contracts that typically provide for up to ten years of rate reductions in return for a commitment not to self-generate. Two of CL&P's largest customers, together accounting for approximately $12 million of annual revenues in 1993, are operating under these arrangements. The New Hampshire Public Utilities Commission (NHPUC) also approved a special PSNH rate available for operators of sawmills to help prevent those customers from installing diesel generation. Altogether, approximately 28 System customers were on some type of competitive generation rate or special contract at the end of 1993, consisting of two CL&P customers, 20 PSNH customers and six WMECO customers. The PSNH customers provided approximately $3 million in annual revenues and the WMECO customers provided approximately $1.5 million in annual revenues.
Overall, all types of flexible rate riders and special contracts offered by the System have preserved System revenues of approximately $50 million. As each subsidiary intensifies its efforts to retain existing customers and gain new customers, the number of customers covered under such flexible rates, and the number and amount of overall discounts, are expected to rise moderately over the next few years.
RETAIL WHEELING
In principle, retail wheeling would enable a retail customer to select an electricity supplier and force the local electric utility to transmit the power to the customer's site. While wholesale wheeling was mandated by the Energy Policy Act of 1992 (Energy Policy Act) under certain circumstances, retail wheeling is generally not required in any of the System's jurisdictions. See "Regulatory and Environmental Matters - Public Utility Regulation." In Connecticut, the Department of Public Utility Control (DPUC) has begun an investigation into the desirability of retail wheeling; a similar DPUC study undertaken in 1987 concluded that full-scale ail wheeling was not in the public interest at that time. See "Rates-Connecticut Retail Rates."
In New Hampshire, there have been no legislative proposals on full- scale retail wheeling to date.
In Massachusetts, bills being reviewed by legislative committees could permit limited retail wheeling in economically distressed areas and to municipal and state-owned facilities.
FUEL SWITCHING/ELECTROTECHNOLOGIES
A customer's ability to switch to or from electricity as an energy source for heating, cooling or industrial processes (fuel switching) will continue to provide the System with both opportunities and risks over the coming years.
While it is an important load, residential electric space heating makes up only five percent of the System's retail sales. In Connecticut and Massachusetts, the risk of fuel switching among residential customers is concentrated in the area of electric to natural gas conversions with lesser risks of oil and propane conversions, while in New Hampshire, conversions to oil and propane are more common. During 1993, approximately three percent of WMECO and PSNH space heating customers converted their heating systems from electric resistance or baseboard heating. Conversion activity in CL&P's service territory was minimal during 1993 and the net number of electric space heating customers in CL&P's territory increased during 1993. Since 1992, space heating conversions on the System have not represented more than a 0.1 percent loss of annual retail sales. Nonetheless, the System operating companies have implemented a number of programs to mitigate these losses. In New Hampshire, a new thermal energy storage program is being reviewed for approval by the NHPUC. In Connecticut and Massachusetts, programs are in place to encourage the use of ground source and advanced air-to-air heat pumps in both new and existing construction. In addition, in 1993 WMECO lowered rates for its electric space heating cusomters by approximately five percent with permission from the Massachusetts Department of Public Utilities (DPU) to address the competitive threat. Because of these programs and other initiatives, NU forecasts a continued increase in the net number of electric space heating customers.
With respect to residential sales, central air conditioning continues to become more common in the System's service territory. The System has also begun to test the use of electric vehicles in all three of its service territories and is working to promote the manufacture of electric vehicles and their components in the System's service area. The System's energy conservation programs which target electric heat and hot water customers can be effective in lowering electric bills substantially. In 1993, the System embarked upon two aggressive field testing programs involving heat pumps to provide residential heating, cooling and hot water heating in cost effective ways. These programs, in Massachusetts and at Heritage Village in Southbury, Connecticut, are intended to demonstrate that the combination of cost effective conservation and the use of heat pumps will provide lower cost heating, cooling and water heating than other available fuels.
The System also faces commercial load loss because of fuel switching, such as in the area of electrically heated commercial buildings. Additionally, natural gas distribution companies have been actively marketing gas-fired chillers to commercial and industrial customers. Electric space and hot water heating and air conditioning have come under increasing pressure in recent years from aggressive campaigns by natural gas distribution companies seeking to add new customers. In Connecticut and Massachusetts, NU's subsidiaries have initiated market driven heating, ventilating and air-conditioning (HVAC) incentive programs, which include some design assistance, to promote efficient, nonchlorofluorocarbon refrigerant electric chillers.
In response to the threat of load loss due to alternative fuel sources, the System's marketing and customer service staff works proactively to compare relative costs of alternative fuels. In most instances, accurate
cost comparisons and energy conservation programs allow the System to preserve most of each customer's load by assisting the customer to achieve a more efficient use of its electric energy.
WHOLESALE MARKETING
In general and subject to existing contractual restrictions, the System's wholesale customers, both within and outside the System's retail service area, are free to select any supplier they choose. NU's subsidiaries do not have an exclusive franchise right to serve such customers. Thus, the wholesale segment of the System's business is highly competitive.
As a result of very limited load growth throughout the Northeast in the past five years and the operation of several new generating plants, competition has grown, and a seller's market for electricity has turned into a buyer's market. Of the approximately 2,000 - 3,000 megawatts of surplus capacity in New England, the System's total is approximately 1,000 megawatts.
The prices the System has been able to receive for new wholesale contracts have generally been far lower than the prices prevalent in recent years.
Nevertheless, in 1993, the System sold a monthly average of 350 megawatts on a daily and short-term basis and 1,150 megawatts under preexisting long-term commitments of capacity to over 20 utilities throughout the Northeast. These sales resulted in approximately $150 million of capacity revenues. The majority of these revenues have been recognized in System company base rates.
In addition, System companies entered into approximately 11 long- term sales contracts in 1993 with both new and existing customers. These contracts are expected to increase sales by a yearly average of 60 megawatts from late 1993 through 2005. The new wholesale customers include the municipal electric systems in Georgetown, Middletown, South Hadley, Princeton, Danvers, Littleton and Mansfield, all in Massachusetts. Including these new sales, the System currently has capacity sales commitments with other New England utilities to sell an aggregate 4,000 megawatt-years of capacity from 1994 through 2008. The net benefits after costs from these sales are estimated at approximately $550 million over the remaining life of the contracts. Most of these benefits will be realized over the next few years. In addition, a contract for the sale of approximately 450 megawatt- years to the municipal electric system in Madison, Maine has been signed and is awaiting certain approvals. For information on competitive pressures affecting wholesale transmission, see "Electric Operations - Generation and Transmission."
Over the next five years, intense competition in the Northeast market is expected to continue as new generating facilities, located for the most part outside the System's retail service areas and contracted to sell to others, become operational. See "Regulatory and Environmental Matters - Public Utility Regulation." This increase in power supply sources could put further downward pressure on prices, but the potential price decreases may be somewhat offset by an improvement in the region's economy and the retirement of a number of the region's existing generating plants. See "Electric Operations - Generation and Transmission."
SUMMARY
To date, the System has not been materially affected by competition, and it does not foresee substantial adverse effect in the near future unless the current regulatory structure or practice is substantially altered. The rate, service, business development and conservation initiatives described above, portions of which are funded in base rates, plus other cost containment efforts described below, have been adequate to date in retaining customers, preventing fuel switching and attracting new customers at a level sufficient to maintain the System's revenue and profit base and should have significant positive effects in the next few years. As noted above, however, the DPUC has begun a retail wheeling investigation in Connecticut, and its outcome is uncertain at this time. In Massachusetts, retail wheeling legislation is under consideration. To date, no such initiatives are underway in New Hampshire. NU's subsidiaries benefit from a diverse retail base, and the System has no significant dependance on any one customer or industry. The System's extensive transmission facilities and diversified generating capacity position it to be a strong factor in the regional wholesale power market for the foreseeable future. The System's wholesale power business should further cushion the financial effects of competitive inroads within its service area. The System believes that the corporate reengineering process initiated in early 1994 and structural reorganization effective January 1, 1994 should better position it to compete in the retail and wholesale electric businesses in the future.
RATES
CONNECTICUT RETAIL RATES
GENERAL
CL&P's retail electric rate schedules are subject to the jurisdiction of the DPUC. Connecticut law provides that increased rates may not be put into effect without the prior approval of the DPUC, which has 150 days to act upon a proposed rate increase, with one 30-day extension possible. If the DPUC does not act within that period, the proposed rates may be put into effect subject to refund.
Connecticut law authorizes the DPUC to order a rate reduction before holding a full-scale rate proceeding if it finds that (i) a utility's earnings exceed authorized levels by one percentage point or more for six consecutive months, (ii) tax law changes significantly increase the utility's profits, or (iii) the utility may be collecting rates that are more than just and reasonable. The law requires the DPUC to give notice to the utility and any customers affected by the interim decrease. The utility would be afforded a hearing. If final rates set after a full rate proceeding or court appeal are higher, customers would be surcharged to make up the difference.
1992-1993 CL&P RETAIL RATE CASE
In December 1992, CL&P filed an application for rate relief with the DPUC. The updated request sought to increase CL&P's revenues by $344 million or 15.4 percent in total over three years. That increase incorporated requested annual increases of $130 million, $104 million and $110 million starting in May 1993. As an alternative to the multi-year plan, CL&P also proposed a one-time increase totaling about $280 million, or 13.9 percent.
On June 16, 1993, the DPUC issued a decision (Decision) approving the multi-year plan and providing for annual rate increases of $46.0 million, or 2.01 percent, in July 1993, $47.1 million, or 2.04 percent, in July 1994 and $48.2 million, or 2.06 percent, in July 1995. The total increase granted of $141.3 million, or 6.11 percent, is approximately 42 percent of CL&P's updated request.
In light of the State of Connecticut's concern over economic development and industrial and commercial rates, one important aspect of the Decision was that industrial and manufacturing rates will rise only about 1.1 percent anually over the three-year period.
Other significant aspects of the Decision include the reduction of CL&P's return on equity (ROE) from 12.9 percent (CL&P had sought to continue its ROE at that level) to 11.5 percent for the first year of the multi-year plan, 11.6 percent for the second year and 11.7 percent for the third year; recognition in CL&P's rates, by 1998, of non-pension, post-retirement benefit cost accruals required under Statement of Financial Accounting Standards (SFAS) No. 106; the identification of $49 million of prior fuel overrecoveries and the use of that amount to offset a similar amount of the unrecovered balance in CL&P's generation utilization adjustment clause (GUAC); the reduction of CL&P's projected operating and maintenance expense for contingency funding by approximately $53.6 million spread over three years; and the deferral of cogeneration expenses projected for 1994 and 1995 and the future recovery of those deferred amounts (approximately $63 million in total) plus carrying costs over five years beginning July 1, 1996.
The Decision also required CL&P to allocate to customers $10 million of after tax earnings from a $47.7 million property tax accounting change made in the first quarter of 1993. CL&P recorded this $10 million adjustment as a reduction to second quarter net income.
On August 2, 1993, two appeals were filed from the Decision. CL&P filed an appeal on four issues. The second appeal was filed by the Connecticut Office of Consumer Counsel (OCC) and the City of Hartford, challenging the legality of the multi-year plan approved by the DPUC. The two appeals were consolidated. CL&P moved to dismiss the appeal by the City of Hartford and the OCC on jurisdictional grounds. Oral arguments were held on October 15, 1993 and February 14, 1994 on CL&P's motion to dismiss the appeals challenging the multi-year rate plan. It is not known when a decision on CL&P's motion will be issued. In addition, the Court rejected (without prejudice to renewal) the City of Hartford's and the OCC's motion to stay implementation of the second and third year of the rate plan pending the outcome of their appeal. The City of Hartford and the OCC could renew a request for a stay following the outcome of their appeal.
CL&P ADJUSTMENT CLAUSES
CL&P has a fossil fuel adjustment clause and a GUAC applicable to its retail electric rates. In Connecticut, the DPUC is required to approve each month the charges or credits proposed for the following month under the fossil fuel adjustment clause. These charges and credits are designed to recover or refund changes in purchased power (energy) and fossil fuel prices from those set in base rates. Monthly fossil fuel charges or credits are also subject to review and appropriate adjustment by the DPUC each quarter after full public hearings. The Connecticut clause allows CL&P to recover substantially all prudently incurred fossil fuel expenses.
CL&P's current retail electric base rate schedules assume that the nuclear units in which CL&P has entitlements will operate at a 72 percent
composite capacity factor. The GUAC levels the effect on rates of fuel costs incurred or avoided due to variations in nuclear generation above and below that performance level. When actual nuclear performance is above the specified level, net fuel costs are lower than the costs reflected in base rates, and when nuclear performance is below the specified level, net fuel costs are higher than the costs reflected in base rates. At the end of a twelve-month period ending July 31 of each year, with DPUC approval, these net variations from the costs reflected in base rates are generally refunded to or collected from customers over the subsequent eleven-month period beginning September 1. This clause, however, does not permit automatic collection from customers to the extent the capacity factor is less than 55 percent for the twelve-month period. When and to the extent the annual nuclear capacity factor is less than 55 percent, it is necessary for CL&P to apply to the DPUC for permission to recover the additional fuel expense.
In the Decision, the DPUC disallowed recovery of $41.5 million, the GUAC deferral balance associated with operation at a nuclear capacity factor below 55 percent during the 12-month GUAC period ending July 31, 1992. In the same Decision, the DPUC also disallowed $7.5 million of the $96 million deferral balance, representing operation at a nuclear capacity factor above 55 percent for that period, which had already been approved for collection from customers through December 31, 1993. The reason given for the disallowances was CL&P's $49 million overrecovery of fuel costs through base rates and the fuel adjustment clauses for the period August 1991 to July 1992.
The Decision also cut short the previously allowed recovery of $96 million in GUAC deferrals by four months. The DPUC ordered the remaining unrecovered GUAC balance of $24.6 million to be "trued-up" against the deferral for the 1992-93 GUAC year. As result of two previous prudence decisions imposing disallowances for outages at the nuclear unit (CY) operated by the Connecticut Yankee Atomic Power Company (CYAPC) and Millstone I, the DPUC also ordered CL&P to refund to customers a total of $5.1 million in the GUAC billing period beginning September 1, 1993.
In the most recent GUAC period, which ended July 31, 1993, the actual level of nuclear generating performance was 72.6 percent, resulting in a GUAC deferral of $4.0 million to be credited to customers beginning in September 1993. The GUAC rate filed by CL&P for the September 1993 - August 1994 GUAC billing period had five components: the $7.5 million disallowance from the rate case, the $5.1 million of prudence disallowances, the $4.0 million credit deferral for the most recent GUAC period, and the $24.6 million debit of previously unrecovered GUAC deferrals, for a total of $7.9 million.
On September 1, 1993, the DPUC issued an interim order setting a GUAC rate of zero beginning September 1, 1993, subject to a proceeding to consider further CL&P's GUAC rate for the period September 1, 1993 to July 31, 1994. On January 5, 1994, the DPUC issued a decision fixing the GUAC rate at zero through August 31, 1994 and disallowing recovery of $7.9 million through the GUAC. The disallowance was based on a comparison of fuel revenues with fuel expenses, in the August 1992 - July 1993 period. On January 24, 1994, CL&P requested the DPUC to clarify its January 5, 1994 decision with respect to future application of the GUAC. Based on management's interpretation of the January 5, 1994 decision, CL&P does not expect that any future DPUC review using this methodology will have a material adverse impact on its future earnings. On March 4, 1994, CL&P appealed the January 5 GUAC decision to Connecticut Superior Court.
For the 1984-1991 GUAC periods, CL&P refunded more than $112 million to its customers through the GUAC mechanism. For the five months ended December 31, 1993, the composite nuclear generation capacity factor was 66.7 percent. For the full twelve-month period ending July 31, 1994, the factor is projected to be approximately 74.7 percent.
The DPUC has opened a docket to review the prudence of the 1992 outage related to the Millstone 2 steam generator replacement project. Discovery and filing of testimony is expected to continue through May 1994 and hearings, if required, will be held in the summer of 1994.
CL&P incurred approximately $88 million in replacement power costs associated with Millstone outages that occurred during the period October 1990 - February 1992. These outages were the subject of several separate prudence reviews conducted by the DPUC, three of which are either on appeal or still pending at the DPUC.
On May 19, 1993, the DPUC issued a final decision allowing recovery of costs related to the July 1991 shutdown of Millstone 3 caused by mussel- fouling of the heat exchangers. Approximately $0.9 million of replacement power costs are at issue. The OCC has appealed that decision to the Connecticut Superior Court.
On September 1, 1993, the DPUC issued a final decision in the prudence investigation of outages at all four Connecticut nuclear plants resulting from an erosion/corrosion-induced pipe rupture at Millstone 2 on November 6, 1991. The decision concluded that CL&P's management of its erosion/corrosion program was reasonable and prudent and that expenses incurred as a result of the outages, which total approximately $65 million ($51 million of which represents replacement power costs) for CL&P, should be allowed. The OCC has also appealed this decision to the Connecticut Superior Court.
The third ongoing prudence investigation involves a Millstone 3 outage caused by repairs to the service water piping in the fall of 1991. The OCC's witness filed testimony that, as a result of the DPUC's decision finding that the concurrent mussel-fouling outage was prudent, and the fact that the mussel-fouling outage continued at least as long as the service water outage, there was no economic impact on ratepayers from the service water outage. On September 23, 1993, the DPUC suspended the service water docket pending the outcome of OCC's appeal of the decision on the mussel- fouling outage. Approximately $26 million of replacement power costs are at issue. For further information on the shutdowns of Millstone units currently under review by the DPUC, see "Electric Operations -- Nuclear Generation -- Millstone Units."
Some portion of the replacement power costs reflected in the three Millstone outages, as to which the DPUC has not completed its review or as to which the DPUC's decision has been appealed, may be disallowed. However, management believes that its actions with respect to these outages have been prudent, and it does not expect the outcome of the prudence reviews to result in material disallowances.
CL&P has recognized that it will not recover in rates approximately $9.4 million in replacement power costs resulting from two other shutdowns at Millstone 1: one related to the unit's licensed operators failing requalification exams and the other related to seaweed blockage at the intake structure.
CL&P owns 34.5 percent of the common stock of CYAPC, a regional nuclear generating company. During the 1987-1988 refueling outage, repairs were made to CY's thermal shield. During an extended 1989-1990 refueling outage, the thermal shield was removed due to continued degradation.
The DPUC reviewed these outages. In a report issued in 1990, the DPUC's auditors concluded that the actions of CYAPC's personnel and its contractors were reasonable with respect to the thermal shield's repair and removal. However, the auditors also concluded that the failure to clean the entire refueling cavity during the 1987-1988 outage was the most likely cause of debris left in the cavity that subsequently resulted in the additional damage that was repaired during the 1989-1990 outage.
In October 1992, the DPUC disallowed CL&P's recovery of $3 million in replacement power costs and $230,000 of related operating and maintenance costs resulting from CY's 1989-1990 extended outage. CL&P appealed the DPUC's decision. On December 2, 1993, the Connecticut Superior Court issued a decision reversing the DPUC, in part, and upholding it in part. The court ruled in favor of CL&P by reversing the $230,000 disallowance and in favor of the DPUC by upholding the $3 million disallowance of replacement power costs.
The partial reversal in favor of CL&P was based on the principle of federal preemption and is an important legal precedent for future CYAPC matters.
CONSERVATION AND LOAD MANAGEMENT
CL&P participates in a collaborative process for the development and implementation of C&LM programs for its residential, commercial and industrial customers.
In September 1992, the DPUC approved a Conservation Adjustment Mechanism (CAM) that allows CL&P to recover C&LM costs to the extent not recovered through current base rates. The CAM authorized continued recovery of C&LM costs over a ten-year period with a return on the unrecovered costs. In December 1992, CL&P filed an application with the DPUC for approval of budgeted C&LM expenditures for 1993 of $47.5 million and a proposed CAM for 1993. On April 14, 1993, the DPUC issued an order approving a new CAM rate, which allows CL&P to recover $24 million of its budgeted $47 million C&LM expenditures during 1993 and associated true-ups of past C&LM expenditures. The order also provided that any unrecovered expenditures would be recovered over eight years. CL&P's actual 1993 C&LM expenditures were approximately $42.8 million. The unrecovered C&LM costs at December 31, 1993 excluding carrying costs were $116.2 million.
On December 30, 1993, CL&P and the other participants in the collaborative process filed an offer of settlement with the DPUC regarding CL&P's 1994 C&LM expenditures, program designs, performance incentive and lost fixed cost revenue recovery. The settlement proposed a budget level of $39 million for 1994 C&LM and a reduction in the amortization period for new expenditures from eight to 3.85 years. CL&P expects additional 1994 C&LM expenditures of approximately $1 million for state facilities. The DPUC began hearings on the proposed settlement during March 1994.
NEW HAMPSHIRE RETAIL RATES
RATE AGREEMENT AND FPPAC
NU acquired PSNH, the largest electric utility in New Hampshire, in June 1992. See "The Northeast Utilities System." PSNH's 1989 Rate Agreement (Rate Agreement) provides the financial basis for the plan under which PSNH was reorganized and became an NU subsidiary. The Rate Agreement sets out a comprehensive plan of retail rates for PSNH, providing for seven base rate increases of 5.5 percent per year and a comprehensive fuel and purchased power adjustment clause (FPPAC). The first of these base retail rate increases was put into effect in January 1990. The second rate increase took place on May 16, 1991, when PSNH reorganized as an interim, stand-alone company; the third rate increase occurred on June 1, 1992, just before NU's acquisition of PSNH; and the fourth rate increase went into effect on June 1, 1993. The remaining three increases are to be placed in effect by the NHPUC annually beginning June 1, 1994, concurrently with a semi-annual adjustment in the FPPAC.
The Rate Agreement also provides for the recovery by PSNH through rates of a regulatory asset, which is the aggregate value placed by PSNH's reorganization plan on PSNH's assets in excess of the net book value of PSNH's non-Seabrook assets and the value assigned to Seabrook. In accordance with the Rate Agreement, approximately $265 million of the remaining regulatory asset is scheduled to be amortized and recovered through rates by 1998, and the remaining amount, approximately $504 million, is scheduled to be amortized and recovered through rates by 2011. PSNH is entitled to a return each year on the unamortized portion of the asset. The unrecovered balance of the regulatory asset at December 31, 1993 was approximately $769.5 million. In order to provide protection from significant variations from the costs assumed in the base rates over the period of the seven base rate increases (Fixed Rate Period), the Rate Agreement established a return on equity (ROE) collar to prevent PSNH from earning an ROE in excess of an upper limit or below a lower limit. To date, PSNH's ROE has been within the limits of the ROE collar.
The FPPAC provides for the recovery or refund by PSNH, for the ten- year period beginning on May 16, 1991, of the difference between the actual prudent energy and purchased power costs and the costs included in base rates. The rate is calculated for a six-month period based on forecasted data and is reconciled to actual data in subsequent FPPAC billing periods. PSNH costs included in the FPPAC calculation are the cost of fuel used at its generating plants and purchased power, energy savings and support payments associated with PSNH's participation in the Hydro-Quebec arrangements, the Seabrook Power Contract costs billed to PSNH from NAEC, NEPOOL Interchange expense and savings, fifty percent of the joint dispatch energy expense savings resulting from the combination of PSNH and the System companies as a single pool participant, purchased capacity costs associated with other System power and unit contract capacity purchases excluding the Yankee nuclear companies and the cost to amortize capital expenditures for, and to operate, environmental or safety backfits or fuel switching. The FPPAC also provides for the recovery of a portion of the payments made currently to qualifying facilities and a portion of the costs associated with the PSNH buyback of the New Hampshire Electric Cooperative, Inc. (NHEC) entitlement in Seabrook. For information on NHEC's 1991 filing for bankruptcy and its subsequent reorganization, see "Rates - Wholesale Rates." The balance of the current payments to qualifying facilities, representing a part of the payments made currently to eight specific small power producers (SPPs), are deferred each year and amortized and recovered over the succeeding ten years.
A portion of the current payments to NHEC is also deferred and will be recovered either through the FPPAC during the fixed rate period or through base rates after the fixed rate period. Recovery of the NHEC deferral through the FPPAC occurs only if the FPPAC rate is negative; in such instance, deferred NHEC costs would be recovered to the extent required to bring the FPPAC rate to zero. From June to November 1992, the FPPAC rate, which would otherwise have been negative, was set at zero, and some NHEC deferrals were amortized. The operation of the FPPAC during this period resulted in an overrecovery, which was also netted against NHEC deferrals in December 1992 and March 1993. As of December 31, 1993, SPP and NHEC deferrals totaled approximately $107.6 and $14.8 million, respectively.
Under the Rate Agreement, PSNH has an obligation to use its best efforts to renegotiate the purchase power arrangements with 13 specified SPPs that were selling their output to PSNH under long term rate orders. Agreements have been reached with all five of the hydroelectric facilities under which the rates PSNH pays for their output would be reduced but the term of years for sales from the hydro producers would be extended by five years. The NHPUC held a hearing concerning these agreements on February 25, 1994. PSNH has also reached agreements with three of the eight wood-fired qualifying facilities with long term rate orders. Under each agreement, PSNH would pay each operator a lump sum in exchange for canceling the operator's right to sell its output to PSNH under rate orders. The total payment to the three operators would be approximately $91.8 million (covering approximately 35 MW of capacity). The three wood operators' agreements will be considered in hearings before the NHPUC in late spring 1994. PSNH is unable to predict if any or all of these agreements will be consummated.
Although the Rate Agreement provides an unusually high degree of certainty about PSNH's future retail rates, it also entails a risk if sales are lower than anticipated, as they were in 1991 and 1992, or if PSNH should experience unexpected increases in its costs other than those for fuel and purchased power, since PSNH has agreed that it will not seek additional rate relief before 1997, except in limited circumstances. Even if allowed under the Rate Agreement, any additional increases above 5.5 percent per year are subject to political and economic pressures that tend to limit overall retail rate increases, including FPPAC increases.
In accordance with the Rate Agreement, PSNH increased its average retail electric rates by about 4.5 percent in June 1993 and by 1.8 percent on December 1, 1993. The 4.5 percent increase in June resulted from the combined effect of decreasing to $.00110 per kilowatthour the FPPAC charge at the same time that (1) the fourth of the seven increases in base electric rates of 5.5 percent and (2) a temporary increase associated with recently enacted legislation associated with the settlement of the Seabrook tax suit described below took effect. The decrease in the FPPAC charge also reflected lower costs paid by PSNH through the Seabrook Power Contract for Seabrook property tax imposed on NAEC. The December 1993 increase resulted from an increase in the FPPAC rate.
In its decision on the June 1, 1993 increase, the NHPUC disallowed replacement power costs for three Seabrook outages totalling about $0.4 million. On August 16, 1993, the NHPUC affirmed its decision to disallow that amount. In the August 16 decision, the NHPUC also rejected a request by the New Hampshire Office of Consumer Advocate (OCA) to allow access to certain confidential, self-critical documents generated at Seabrook station by plant personnel following outages and power reductions. PSNH has been providing summary analyses of the circumstances surrounding outages; however, it declined to provide the original self-critical documents in an effort to
maintain an atmosphere in which employees would be encouraged to report and comment on all possible problems. The OCA filed an appeal of the NHPUC's decision on its request for access to these documents with the New Hampshire Supreme Court on November 16, 1993. On February 8, 1994, the court accepted the appeal.
On September 14, 1993, PSNH filed a request for an increase in its FPPAC rate for the period December 1, 1993 through May 31, 1994. The increase of one percent of the average retail rate was expected to produce less than the revenues necessary to cover PSNH's FPPAC costs over these six months, a period during which Seabrook will undergo a two-month refueling outage. PSNH waived its right to immediate collection and proposed to defer about $13 million of FPPAC costs for later collection in order to limit its total rate increases for 1993 to 5.5 percent. Hearings on the FPPAC rate request were held on November 9 and 10, 1993. On November 29, 1993, the NHPUC approved a higher FPPAC rate than the rate requested by PSNH. The increase was 1.8 percent higher than rates previously in effect and allowed PSNH to recover a deferral of $10.5 million over a twelve month period beginning June 1, 1994, which ends prior to the next scheduled Seabrook refueling outage.
In its June 1992 decision concerning PSNH's FPPAC rate, the NHPUC had determined that PSNH should not be entitled to recover approximately $1.3 million with respect to wholesale power agreements with two New England utilities. Also, the NHPUC had questioned the prudence of a series of short term contractual agreements (SWAP Agreements) for energy and capacity exchanges entered into between the System and PSNH prior to the merger and the allocation of savings resulting from the SWAP Agreements. In November 1992, PSNH entered into proposed settlements with the NHPUC staff and the OCA to settle these issues. The settlements proposed disallowances of approximately $500,000 for the two wholesale power agreements and $250,000 for the SWAP Agreements. On March 23, 1993, the NHPUC approved the settlements.
SETTLEMENT OF THE SEABROOK TAX SUIT
On April 16, 1993, the Governor of New Hampshire signed into law legislation that implemented the settlement of a suit concerning property tax on Seabrook station (the Seabrook Tax) that was filed with the United States Supreme Court by Attorneys General of Connecticut, Massachusetts and Rhode Island. The legislation made various changes to New Hampshire tax laws, resulting in taxes of approximately $5.8 million to be paid by NU on a consolidated basis in each of 1993 and 1994 and $3.0 million in 1995, a reduction from the $9.5 million paid by NU on a consolidated basis in 1992. Of such amounts to be paid, CL&P's portion will be approximately $0.6 million in each of 1993 and 1994 and approximately $0.3 million in 1995 and NAEC's portion will be approximately $5.2 million in each of 1993 and 1994 and approximately $2.7 million in 1995.
MEMORANDUM OF UNDERSTANDING
On May 6, 1993, PSNH, NAEC, NUSCO and the Attorney General of the State of New Hampshire entered into a Memorandum of Understanding (Memorandum) relating to certain issues which had arisen under the Rate Agreement. In part, the issues addressed relate to the enactment of the legislation implementing the settlement of the Seabrook Tax lawsuit. Pursuant to the Memorandum, tax changes imposed by the legislation will not increase PSNH's overall ratepayer charges, but will be reflected in PSNH rates pursuant to the Rate Agreement through offsetting adjustments to PSNH's
base rates and FPPAC charges. On June 1, 1993, PSNH put into effect a temporary increase of $0.00074 per kilowatthour in base rates designed to recover the increased costs associated with the enactment of the legislation.
A corresponding decrease in the FPPAC costs collected after June 1, 1993 offset the base rate increase. The FPPAC decrease reflected the reduction of the Seabrook property tax resulting from the legislation.
The Memorandum also addresses the implementation of new accounting standards imposed by SFAS 106 and SFAS 109. The Memorandum establishes the method of accounting under SFAS 106 for employees' post-retirement benefits other than pensions for PSNH ratemaking purposes. Under SFAS 109, companies may recognize as a deferred tax asset the value of certain tax attributes. The Memorandum provides for the establishment of a regulatory liability attributable to significant net operating loss carryforwards and establishes that such liability should be amortized over a six-year period beginning on May 1, 1993.
Other provisions of the Memorandum cover:
NAEC's acquisition of the Vermont Electric Generation and Transmission Cooperative's (VEG&T) 0.41259% interest in Seabrook for approximately $6.4 million and NAEC's sale of the output to PSNH. All necessary regulatory approvals for NAEC's acquisition have been received and NAEC acquired VEG&T's interest on February 15, 1994. The Rate Agreement will be amended to ensure that this acquisition will not impact PSNH rates during the fixed rate period.
The Rate Agreement's ROE collar floor provisions were amended to provide for the adjustment by PSNH of its revenue received from James River Corporation and Wausau Papers of New Hampshire by the amount of the demand charge discount previously approved by the NHPUC.
The Rate Agreement was also amended to provide that any adjustments to the amount of PSNH's liability under the Seabrook Power Contract to reimburse NAEC for payments to the Seabrook Nuclear Decommissioning Financing Fund (a fund administered by the State of New Hampshire to finance decommissioning of Seabrook) will be recovered through adjustments to PSNH's base rates; however, such adjustments will not be subject to the annual 5.5 percent increases established under the Rate Agreement. See "Electric Operations - Nuclear Generation - Decommissioning" for further information on decommissioning costs for Seabrook station and other nuclear units that the System owns or participates in.
On May 11, 1993, PSNH and the State of New Hampshire filed a petition with the NHPUC seeking approval of the Memorandum. As required for implementation, PSNH's lenders approved the Memorandum. The NHPUC hearing on the petition seeking approval of the Memorandum and a request to make the June 1, 1993, temporary base rate increase permanent was held on December 2, 1993. PSNH entered into a stipulation with the NHPUC staff and the OCA which modified the Memorandum slightly, clarifying terms of the NAEC power contract applicable to the VEG&T interest in Seabrook. The NHPUC approved the Memorandum as modified by the stipulation, the permanent base rate increase and the Third Amendment to the Rate Agreement on January 3, 1994.
As a result of the approval of the Memorandum, PSNH's earnings in 1993 increased by $10 million. The cumulative impact of the issues resolved by the Memorandum is not expected to have a significant impact on PSNH's future earnings.
SEABROOK POWER CONTRACT
PSNH and NAEC entered into the Seabrook Power Contract (Contract) on June 5, 1992. Under the terms of the Contract, PSNH is obligated to purchase NAEC's initial 35.56942% ownership share of the capacity and output of Seabrook 1 for the term of Seabrook's NRC operating license and to pay NAEC's "cost of service" during this period, whether or not Seabrook 1 continues to operate. NAEC's cost of service includes all of its prudently incurred Seabrook-related costs, including maintenance and operation expenses, cost of fuel, depreciation of NAEC's recoverable investment in Seabrook 1 and a phased-in return on that investment. The payments by PSNH to NAEC under the Contract constitute purchased power costs for purposes of the FPPAC and are recovered from customers under the Rate Agreement. Decommissioning costs are separately collected by PSNH in its base rates. See "Rates - New Hampshire Retail Rates - Rate Agreement and FPPAC" for information relating to the Rate Agreement.
If Seabrook 1 is retired prior to the expiration of the Nuclear Regulatory Commission (NRC) operating license term, NAEC will continue to be entitled under the Contract to recover its remaining Seabrook investment and a return of that investment and its other Seabrook-related costs for 39 years, less the period during which Seabrook 1 has operated. At December 31, 1993, NAEC's net utility plant investment in Seabrook 1 was $732 million.
The Contract provides that NAEC's return on its "allowed investment" in Seabrook 1 (its investment in working capital, fuel, capital additions after the date of commercial operation of Seabrook 1 and a portion of the initial investment) is calculated based on NAEC's actual capitalization from time to time over the term of the Contract, its actual debt and preferred equity costs, and a common equity cost of 12.53 percent for the first ten years of the Contract, and thereafter at an equity rate of return to be fixed in a filing with the FERC. The portion of the initial investment which is included in the "allowed investment" was 20 percent for the twelve months commencing May 16, 1991, increasing by 20 percent in the second year and by 15 percent in each of the next four years, resulting in 100 percent in the sixth and each succeeding year. As of December 31, 1993, 55 percent of the investment was included in rates.
NAEC is entitled to earn a deferred return on the portion of the initial investment not yet phased into rates. The deferred return on the excluded portion of the initial investment will be recovered, together with a return on it, beginning in the first year after PSNH's Fixed Rate Period, and will be fully recovered prior to the tenth anniversary of PSNH's reorganization date.
Effective February 15, 1994, NAEC also owns the 0.41259% share of capacity and output of Seabrook it purchased from VEG&T. NAEC sells that share to PSNH under an agreement that has been approved by FERC and is substantially similar to the Contract; however, the agreement does not provide for a phase-in of allowed investment and associated deferrals of capital recovery.
MASSACHUSETTS RETAIL RATES
GENERAL
WMECO's retail electric rate schedules are subject to the jurisdiction of the DPU. The rates charged under HWP's contracts with industrial customers are not subject to the ratemaking jurisdiction of any state or federal regulatory agency.
Massachusetts law allows the DPU to suspend a proposed rate increase for up to six months. If the DPU does not act within the suspension period, the proposed rates may be put into effect.
Under present rate-making standards, the DPU allows few adjustments to historic test year expenses to reflect the conditions anticipated by a company during the first year amended rate schedules are to be in effect. The principal adjustments that are permitted are inflation adjustments to historic test year non-fuel operation and maintenance expenses. Rate base is based on test year-end levels, and capital structure is based on test year-end levels adjusted for known and measurable changes. Current DPU practices permit WMECO to normalize most income tax timing differences.
In Holyoke, Massachusetts, where HWP and Holyoke Gas and Electric Department, a municipal utility, operate side-by-side, approximately 30 HWP industrial customers sought bids as a group in 1993 for future electric service. HWP retained the load and has a 10-year contract, at substantially lower rates than in the past, to supply the group.
WMECO REGULATORY ACTIVITY
In December 1991, WMECO filed an application with the DPU for a retail rate increase of approximately $36 million or 9.1 percent. In April 1992, WMECO and the Massachusetts Attorney General filed a partial settlement agreement for approval by the DPU. Also in April 1992, a settlement agreement on WMECO's C&LM program budget was filed with the DPU jointly by WMECO, the Massachusetts Attorney General, Massachusetts Division of Energy Resources (DOER), the Conservation Law Foundation, Inc. (CLF) and the DPU's Settlement Intervention Staff. The settlement agreement covered WMECO's C&LM program through 1993 and included an annual budget of $17 million for both years. The parties also agreed that all expenditures and other charges relating to C&LM would be collected through a conservation charge (CC).
In May 1992, the DPU accepted the WMECO retail rate case and the C&LM settlement agreements. As a result, WMECO's annual retail rates increased by $12 million, or three percent, on July 1, 1992, and by a further $11 million, or 2.7 percent, on July 1, 1993. In June 1992, the DPU resolved the remaining issues in the rate case filed in December 1991, when it issued an order on WMECO's rate design. The DPU order required the first and second year base revenue increases to be allocated so that all classes contribute the same percentage increase.
In July 1992, the DPU approved an amended settlement agreement for 1992 and 1993 C&LM programs that established a CC that promoted rate stability by spreading the costs and subsequent recovery of 1992 and 1993 C&LM programs over the 18-month period from July 1, 1992 through December 31, 1993. The CC includes incremental C&LM program costs above or below base rate recovery levels, C&LM fixed cost recovery adjustments, and the provision for a C&LM incentive mechanism. In January 1993, WMECO filed with the DPU a request to reduce the CC rate by an aggregate of $3 million in 1993. On February 5, 1993, the DPU directed WMECO to file a revised CC to be effective on March 1, 1993 based on actual 1992 expenditures and the preapproved 1993 budget. The DPU approved the new CC on February 26, 1993. A motion for reconsideration was filed by certain of the parties to the original settlement. The DPU rejected that motion on July 9, 1993. WMECO filed for approval of a new CC on February 2, 1994. The DPU held a hearing on the proposed new CC on February 18, 1994.
In October 1992, the DPU approved an Integrated Resource Management (IRM) settlement agreement that had been proposed by WMECO, the Attorney General, CLF, DOER and the Massachusetts Public Interest Research Group (MASSPIRG) concerning WMECO's IRM. The settlement required WMECO to submit its C&LM programs for 1994, 1995 and a portion of 1996 for approval by the DPU prior to October 1993, and to file its next IRM draft initial filing on January 3, 1994. The settlement also requires WMECO to prepare a competitive resource solicitation at least six months before its C&LM filing for any new C&LM programs it proposes.
On March 16, 1993 WMECO filed a motion with the DPU to request authority to eliminate the separate (and higher) rates for residential electric heating customers by placing those customers on the same rates as the residential non-electric heating customers. WMECO proposed this change in order to be more competitive and to stem its losses of electric heating customers. On April 30, 1993, the DPU denied WMECO's request to eliminate the separate rates for residential electric heating customers but reduced the customer and energy charges for the electric heating customers to equal the comparable charges for non-electric heating customers.
In November 1993, WMECO submitted its C&LM filing required in the settlement of the IRM proceeding, along with a settlement offer from WMECO, the Attorney General, DOER, CLF and MASSPIRG. The settlement offer incorporated preapproved C&LM funding levels for 1994 and 1995 of $14.2 million and $15.8 million, respectively. The settlement also provides for the recovery of lost fixed revenue and a bonus incentive if certain implementation objectives are met. On January 21, 1994, the DPU approved the settlement.
On January 3, 1994, WMECO submitted its next draft initial IRM filing required by the October 1992 settlement to the DPU. The filing indicates the System does not need additional resources until at least the year 2007 and, therefore, WMECO does not intend to issue any solicitation for additional resources anytime in the foreseeable future. WMECO is presently participating in settlement discussions concerning this IRM filing. Should no settlement be reached, WMECO is scheduled to submit its initial IRM filing to the DPU in April 1994.
WMECO ADJUSTMENT CLAUSE
In Massachusetts, all fuel costs are collected on a current basis by means of a forecasted quarterly fuel clause. The DPU must hold public hearings before permitting quarterly adjustments in WMECO's retail fuel adjustment clause. In addition to energy costs, the fuel adjustment clause includes capacity and transmission charges and credits that result from short-term transactions with other utilities and from the operation of the Northeast Utilities Generation and Transmission Agreement (NUG&T). The NUG&T is the FERC-approved contract among the System operating companies, other than PSNH, that provides for the sharing among the companies of system-wide costs of generation and transmission and serves as the basis for planning and operating the System's bulk power supply system on a unified basis.
Massachusetts law establishes an annual performance program related to fuel procurement and use, and requires the DPU to review generating unit performance and related fuel costs if a utility fails to meet the fuel procurement and use performance goals set for that utility. Goals are established for equivalent availability factor, availability factor, capacity factor, forced outage rate and heat rate. Fuel clause revenues collected in
Massachusetts are subject to potential refund, pending the DPU's examination of the actual performance of WMECO's generating units.
Currently pending before the DPU are investigations into the performance of WMECO's generating units for the 12-month periods ending May 31, 1992 and May 31, 1993. The DPU held a hearing on February 1, 1994 on WMECO's non-nuclear performance for the 12-month period ending May 31, 1992. Except for the order concerning CYAPC discussed below, the DPU has completed investigations of, but not yet issued decisions reviewing WMECO's actual generating unit performance for the program years between June 1987 and May 1991.
The DPU has consistently set performance goals for generating units that are not wholly-owned and operated by the company whose goals are being set. The DPU has found that possession of a minority ownership interest in a generating plant does not relieve a company of its responsibilities for the prudent operation of that plant. Accordingly, the DPU has established goals, as discussed above, for the three Millstone units and for the three regional nuclear generating units (the Yankee plants) in which WMECO has minority ownership interests.
The total amount of WMECO retail replacement power costs attributable to the major outages in the 1991 performance year -- the Millstone 3 July 1991 outage (mussel-fouling and service water), the Millstone 1 October 1991 outage (operator requalification examinations) and the November 1991 outages to perform pipe inspections, analysis and repair -- is approximately $17 million. In December 1992, WMECO notified the DPU that it will forego recovery of $1.2 million in replacement power costs associated with the October 1991 Millstone 1 operator requalification examination outage. The total amount of WMECO retail replacement power costs attributable to outages in the 1992-1993 performance year is approximately $17 million. Management believes that some portion of these replacement power costs may be subject to refund upon completion of the DPU's performance program reviews. However, management believes that its actions with respect to these outages have been prudent and does not expect the outcome of the DPU review to have a material adverse impact on WMECO's future earnings.
In September 1992, the DPU issued a partial order pertaining to CY's extended 1989-1990 refueling outage (discussed above), disallowing the recovery of $0.6 million of incremental replacement power costs that could be attributable to the outage. WMECO filed a motion for reconsideration with the DPU in the same month, which motion is pending before the DPU.
WHOLESALE RATES
CL&P currently furnishes firm wholesale electric service to one Connecticut municipal electric system. PSNH serves NHEC, three New Hampshire municipal electric systems and one investor-owned utility in Vermont. HWP and its wholly-owned subsidiary, Holyoke Power and Electric Company, serve one Massachusetts municipal electric system. WMECO serves one New York investor-owned electric utility. The System's 1993 firm wholesale load was approximately 275 megawatts (MW). In 1993, firm wholesale electric service accounted for approximately 2.5 percent of the System's consolidated electric operating revenues (approximately 1.2 percent of CL&P's operating revenue, 6.0 percent of PSNH's operating revenue, 0.1 percent of WMECO's operating revenue and 21.5 percent of HWP's operating revenue).
NHEC, PSNH's largest customer, representing 5.9 percent of its revenues for 1993, filed a petition for reorganization in 1991 under Chapter 11 of the
United States Bankruptcy Code. A plan of reorganization for NHEC, which was confirmed by the Bankruptcy Court in March 1992 and became effective on December 1, 1993, resolves a series of disputes between PSNH and NHEC and provides for PSNH to continue to serve NHEC. The contract covering this continued service has been filed with and accepted by FERC.
In addition to firm service, the System engages in numerous other bulk supply transactions that reduce retail customer costs, at rates that are subject to FERC jurisdiction, and it transmits power for other utilities at FERC-regulated rates. See "Electric Operations - Generation and Transmission" for further information on those bulk supply transactions and for information on pending FERC proceedings relating to transmission service. All of the wholesale electric transactions of CL&P, PSNH, WMECO, NAEC and HWP are subject to the jurisdiction of the FERC.
For a discussion of certain FERC-regulated sales of power by CL&P, PSNH, WMECO and HWP to other utilities, see "Electric Operations -- Distribution and Load." For a discussion of sales of power by NAEC to PSNH, see "Rates - Seabrook Power Contract." For a discussion of the effects of competition on the System, see "Competition and Marketing."
RESOURCE PLANS
CONSTRUCTION
The System's construction program expenditures, including allowance for funds used during construction (AFUDC), in the period 1994 through 1998 are estimated to be as follows:
1994 1995 1996 1997 1998
(Millions of Dollars)
PRODUCTION
CL&P . . . . . $ 60.9 $54.5 $44.3 $41.5 $39.6
PSNH . . . . . 10.5 7.0 13.3 8.7 15.8
WMECO . . . . 17.3 13.5 10.1 9.3 17.4
NAEC . . . . . 8.2 8.5 8.3 7.0 5.8
Other . . . . 16.2 3.0 2.0 0.7 0.5
System Total . 113.1 86.5 78.0 67.2 79.1
SUBSTATIONS AND
TRANSMISSION LINES
CL&P . . . . . 12.2 9.4 11.6 12.3 14.6
PSNH . . . . . 3.0 6.9 9.9 6.1 6.7
WMECO. . . . . 0.8 0.4 0.5 0.8 1.3
NAEC . . . . . 0.0 0.0 0.0 0.0 0.0
Other . . . . 0.0 0.0 0.0 0.0 0.0
System Total 16.0 16.7 22.0 19.2 22.6
DISTRIBUTION OPERATIONS
CL&P . . . . . 76.1 78.8 80.9 84.1 85.5
PSNH . . . . . 22.0 11.7 10.6 14.5 14.2
WMECO. . . . . 17.4 19.3 17.3 17.2 18.7
NAEC . . . . . 0.0 0.0 0.0 0.0 0.0
Other . . . . 0.4 0.2 0.2 0.2 0.2
System Total 115.9 110.0 109.0 116.0 118.6
GENERAL
CL&P . . . . . 8.6 8.8 7.2 5.8 5.1
PSNH . . . . . 2.0 3.3 1.9 2.4 2.0
WMECO . . . . 2.0 2.1 1.9 1.5 1.3
NAEC . . . . . 0.0 0.0 0.0 0.0 0.0
Other . . . . 9.9 7.4 7.8 9.8 9.8
System Total 22.5 21.6 18.8 19.5 18.2
TOTAL CONSTRUCTION
CL&P . . . . . 157.8 151.5 144.0 143.7 144.8
PSNH . . . . . 37.5 28.9 35.7 31.7 38.7
WMECO . . . . 37.5 35.3 29.8 28.8 38.7
NAEC . . . . . 8.2 8.5 8.3 7.0 5.8
Other . . . . 26.5 10.6 10.0 10.7 10.5
System Total $267.5 $234.8 $227.8 $221.9 $238.5
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The construction program data shown above include all anticipated capital costs necessary for committed projects and for those reasonably expected to become committed, regardless of whether the need for the project arises from environmental compliance, nuclear safety, improved reliability or other causes.
The construction program data shown above generally include the anticipated capital costs necessary for fossil generating units to operate at least until their scheduled retirement dates. Whether a unit will be operated beyond its scheduled retirement date, be deactivated or be retired on or before its scheduled retirement date is regularly evaluated in light of the System's needs for resources at the time, the cost and availability of alternatives, and the costs and benefits of operating the unit compared with the costs and benefits of retiring the unit. Retirement of certain of the units could, in turn, require substantial compensating expenditures for other parts of the System's bulk power supply system. Those compensating capital expenditures have not been fully identified or evaluated and are not included in the table.
FUTURE NEEDS
The System's integrated demand and supply planning process is the means by which the System periodically updates its long-range resource needs. The current resource plan identifies a need for new resources beginning in 2007.
Because New England and the System have surplus generating capacity and are forecasting low load growth over the next several years, the System has no current plans to construct or to contract for any new generating units. Additional capacity beyond 2007, the projected System year of need, can come from a variety of sources. The design and implementation of new C&LM programs, the timely development of economic, reliable and efficient qualifying cogeneration and small power production facilities (QFs) or independent power producer (IPP) capacity through state-sanctioned resource acquisition processes, economic utility-sponsored generating resources (including the possibility of repowering retired power plants) and purchases from other utilities will all receive consideration in the System's integrated resource planning process.
With respect to demand-side management measures, the System's long- term plans rely, in part, on encouraging additional C&LM by customers. These measures, including installations to date, are projected to lower the System summer peak load in 2007 by over 1000 MW. In addition, System companies have long-term arrangements to purchase the output from QFs and IPPs under federal and state laws, regulations and orders mandating such purchases. CL&P's, PSNH's and WMECO's plans anticipate the development of QFs and IPPs supplying 710 MW of firm capacity by 1995, of which approximately 695 MW was operational in 1993. See "New Hampshire Retail Rates -- Rate Agreement and FPPAC" for information concerning PSNH's efforts to renegotiate its agreements with thirteen QFs.
CL&P and WMECO filed applications with the U.S. Environmental Protection Agency to receive 203 SO2 allowances for C&LM activity as authorized by the Clean Air Act Amendments. See "Regulatory and Environmental Matters - Environmental Regulation - Air Quality Requirements."
The DPUC has issued regulations establishing competitive bidding systems for future purchases by Connecticut electric utilities from QFs and IPPs and from C&LM vendors. The regulations also implement a state law which provides that a utility may seek a premium of between one and five percentage points above its most recently authorized rate of return for each multi-year C&LM program requiring capital investment by the utility. In April 1993, CL&P submitted its eighth annual filing to the DPUC on private power production, C&LM, projected avoided costs and related matters. CL&P stated that the
System's existing and committed resources are expected to be sufficient to meet System capacity requirements until 2007, and therefore, CL&P did not solicit new capacity from QFs or C&LM vendors in 1993. In December 1993, the DPUC issued its final decision approving CL&P's avoided cost estimates as filed.
In 1993, regulatory preapproval was obtained for all 1993 C&LM expenditures in each of the three retail jurisdictions. In addition, the DPUC authorized a maximum of 3 percent premium rate of return (after tax) on CL&P C&LM investment in 1993. WMECO is currently projected to earn $1.2 million of incentive (after tax) based on 1993 program savings. See "Rates - Connecticut Retail Rates - Conservation and Load Management" and "Rates - Massachusetts Retail Rates -WMECO Regulatory Activity" for information about rate treatment of C&LM costs.
In 1988, the DPU adopted regulations requiring preapproval of Massachusetts utilities' major investments in electric generating facilities, including life extensions. In 1990, the DPU adopted new IRM regulations, which established procedures by which additional resources are planned, solicited and processed to provide for reliable electric service in a least- cost manner. The regulations provide a mechanism for preapproval (rather than after-the-fact review) of utility plant construction, procurement of non-utility generation (QFs and IPPs), and C&LM programs. The regulations specifically require that environmental externalities be considered in the evaluation of resource alternatives.
In January 1994, WMECO filed its initial draft IRM filing, stating that WMECO's year of need is estimated to be 2007, and that no new capacity need be solicited at this time. WMECO is presently in settlement discussions. See "Rates-Massachusetts Retail Rates - WMECO Regulatory Activity" for further information relating to WMECO C&LM issues.
In 1993, the NHPUC approved a settlement agreement related to PSNH's 1992 least cost planning filing, which defers various planning issues to PSNH's April 1, 1994 filing.
In addition to the contributions from C&LM, QFs and IPPs, the System's long-term resource plan includes consideration of continued operation of certain of the System's fossil generating units beyond their current book retirement dates to the extent that it is economic, and possibly repowering certain of the System's older fossil plants. Continued operation of existing fossil units past their book retirement dates (and replacing certain critically located peaking units if they fail) is expected by 2007 to provide approximately 1,400 MW of resources that would otherwise have been retired. Repowering of some of the System's retired generating plants could make available an additional 900 MW of capacity. The capacity could be brought on line in various increments timed with the year of need. The System's need for new resources may be affected by any additional retirements of the System's existing generating units.
The System companies periodically study the economics of their generating units as part of their overall resource planning process. In 1992, the DPUC ordered CL&P to submit economic analyses of the continued operation of 11 fossil steam units by April 1, 1993, and of Millstone Units 1 and 2 and CY, of which the System companies own 49 percent) by April 1, 1994. In 1993, the DPUC reviewed the continued unit operation (CUO) studies submitted by CL&P for the eleven fossil units in Connecticut and
Massachusetts in its annual review of Integrated Resource Planning. The DPUC concluded that a decision was inappropriate at that time and that it would review the issue again in its management audit of CL&P and in CL&P's 1994 integrated resource planning docket. For Millstone 1 and 2 and CY, the CUO studies are in progress. Preliminary indications are that the operation of the units continues to be economic for customers. Final analyses for CY and the Millstone units will be filed with the DPUC in 1994.
For planning and budgetary purposes, the System assumes that CL&P's Montville Station (497.5 MW) will be deactivated from November 1994 through October 1998. A final decision is expected to be made in 1994. Since reactivation is expected to occur in 1998, the System year of need of 2007 is unaffected. The System year of need of 2007 assumes PSNH's Merrimack 2 continues to operate. However, Merrimack 2's continued operation is in question because Merrimack 2 produces significant NOx emissions. The concern has been raised as to whether the emissions can be lowered to acceptable levels in the short and long term. In 1993, PSNH worked successfully with local, state and federal interests to arrive at a solution for Merrimack 2 NOx compliance by 1995, while deferring a decision on continued unit operation beyond 1999 to the future. For information regarding the agreement concerning NOX emissions at the Merrimack units, see "Regulatory and Environmental Matters - Environmental Regulation - Air Quality Requirements."
See "Regulatory and Environmental Matters -- NRC Nuclear Plant Licensing" for further information on the NRC rule on nuclear plant operating license renewal and information on the expiration dates of the operating licenses of the nuclear plants in which System companies have interests. Before the System can make any decisions about whether license extensions for any of its nuclear units are feasible, detailed technical and economic studies will be needed.
FINANCING PROGRAM
1993 FINANCINGS
In January 1993, WMECO issued $60 million in principal amount of 6 7/8 percent first mortgage bonds due in 2000. In July 1993, CL&P issued $200 million and $100 million, respectively, of 5 3/4 percent and 7 1/2 percent first mortgage bonds due in 2000 and 2023, respectively. In December 1993, CL&P issued $125 million of 7 3/8 percent first mortgage bonds due in 2025. The proceeds from the foregoing issues were used to redeem outstanding bonds with interest rates ranging from 8 3/4 percent to 9 3/4 percent.
In October 1993, CL&P issued $80 million of 5.30 percent preferred stock, $50 par value. The proceeds of this issuance, together with $30 million of short-term debt, were used to redeem $110 million of preferred stock with dividend rates ranging from 7.6 percent to 9.1 percent.
In September 1993, the Connecticut Development Authority (CDA) issued, on behalf of CL&P, two tax-exempt variable rate pollution control revenue bonds (PCRBs) in the amounts of $245.5 million and $70 million, respectively. At the same time, the CDA issued, on behalf of WMECO, $53.8 million of tax-exempt variable rate PCRBs. The proceeds of these issues were used to redeem like amounts of tax-exempt PCRBs having less favorable structures. These refinancings will result in savings from the extension of maturities, the redemption of two issues of fixed-rate bonds with proceeds of the
issuance of variable-rate bonds, the improved credit ratings of new supporting letter of credit banks and associated administrative savings. In December 1993, the New Hampshire Business Finance Authority (BFA) issued, on behalf of PSNH, $44.8 million of tax-exempt variable rate PCRBs. The proceeds of this issue were used to redeem a like amount of taxable PCRBs. Taxable BFA bonds issued on behalf of PSNH in the amount of $109.2 million are outstanding and may be refinanced with tax-exempt bonds upon the receipt of an allocation of the state's private activity volume allocation.
In January 1993, CL&P, PSNH and WMECO purchased $340 million, $75 million and $52 million, respectively, of three-year variable rate debt caps. The caps were purchased to hedge the interest rate risk of the companies' respective variable rate PCRBs and were sized to approximate each respective company's then-current tax-exempt variable rate PCRB issuances. If the interest rate, based on the J. J. Kenny index, exceeds 4.5 percent (the strike rate), each company will receive payments under the terms of its respective interest rate cap agreement. In June 1993, PSNH purchased a $50 million six-month interest rate cap, a $50 million 12 month cap and a $100 million 18 month cap to hedge its interest rate exposure on its variable rate term note. The six-month and 12 month caps have a strike rate of 4.5 percent and the 18 month cap has a strike rate of 5.0 percent, all based on 90 day LIBOR. These caps were sized to approximate portions of a PSNH term note which has a quarterly sinking fund of $23.5 million.
In February 1993, NU, CL&P, WMECO and the Niantic Bay Fuel Trust (NBFT) began a co-managed commercial paper program with two commercial paper dealers. Prior to this time, each company's commercial paper program was managed by one commercial paper dealer. The co-managed program was implemented to promote competition between commercial paper dealers, to increase the investor universe and to increase the range of maturities available to the issuers. On December 31, 1993, $113.0 million commercial paper was outstanding under these programs.
In December 1993, NNECO issued $25 million of 7.17 percent unsecured amortizing notes maturing in 2019. The proceeds of this issuance are being used to finance the construction of a new building at Millstone station to house various administrative and technical support functions.
FINANCING NUCLEAR FUEL
The System requires nuclear fuel for the three Millstone units and for Seabrook 1. The requirements for the Millstone 1, Millstone 2 and CL&P's and WMECO's share of the Millstone 3 units are financed through a third party trust financing arrangement described below. All nuclear fuel for NAEC's and CL&P's shares of Seabrook 1 and PSNH's share of Millstone 3 is owned and financed directly by the respective companies. For the period 1994 through 1998, NAEC's and CL&P's shares of the cost of nuclear fuel for Seabrook 1 are estimated at $56.8 million and $6.4 million, respectively, excluding AFUDC. For the same period, PSNH's share of the cost of nuclear fuel for Millstone 3 is estimated at $6 million, excluding AFUDC.
In 1982, CL&P and WMECO entered into arrangements under which NBFT owns and finances the nuclear fuel for Millstone 1 and 2 and CL&P's and WMECO's share of the nuclear fuel for Millstone 3. NBFT finances the fuel from the time uranium is acquired, during the off-site processing stages and through its use in the units' reactors. NBFT obtains funds from bank loans, the sale of commercial paper and the sale of intermediate term notes. The fuel is leased to CL&P and WMECO by the trust while it is used in the reactors, and
ownership of the fuel is transferred to CL&P and WMECO when it is permanently discharged from the reactors. CL&P and WMECO are severally obligated to make quarterly lease payments, to pay all expenses incurred by NBFT in connection with the fuel and the financing arrangements, to purchase the fuel under certain circumstances and to indemnify all the parties to the transactions.
The trust arrangements presently allow up to $530 million to be financed by NBFT with bank loans and commercial paper (up to $230 million) and with intermediate term notes (up to $300 million). The arrangements with the banks are in effect until February 19, 1996, and can be extended for an additional three years if the parties so agree. On December 31, 1993, NBFT had $80 million of intermediate term notes and $113 million of commercial paper outstanding.
As of December 31, 1993, NBFT's investment in nuclear fuel, net of the fourth quarter 1993 lease payment made on January 31, 1994, for all three Millstone units was $172.1 million, as follows:
Total
CL&P WMECO System
(Millions of Dollars)
In process.......... $20.3 $4.7 $25.0
In stock............ 8.0 1.9 9.9
In reactor.......... 111.2 26.0 137.2
Total.......... $139.5 $32.6 $172.1
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For the period 1994 through 1998, CL&P and WMECO's share of the cost of nuclear fuel for the three Millstone units that will be acquired through NBFT will be $313.5 million and $73.2 million, respectively, excluding AFUDC.
Nuclear fuel costs and a provision for spent fuel disposal costs are being recovered through rates as the fuel is consumed in reactors.
1994 FINANCING REQUIREMENTS
In addition to financing the construction requirements described under "Resource Plans - Construction," the System companies are obligated to meet $1,373.8 million of long-term debt maturities and cash sinking fund requirements and $76.4 million of preferred stock cash sinking fund requirements in 1994 through 1998. In 1994, long-term debt maturity and cash sinking fund requirements will be $295.3 million, consisting of $182 million of long-term debt maturities and $7 million of debt cash sinking fund requirements to be met by CL&P, $94 million of cash sinking fund requirements to be met by PSNH, $1.5 million of cash sinking funds to be met by WMECO and $10.7 million of cash sinking fund requirements to be met by other subsidiaries. These figures do not include $125 million of long-term debt redeemed by CL&P on January 7, 1994 with the proceeds of its issuance of $125 million mortgage bonds in December 1993. See "Financing Program - 1993 Financings."
See "Electric Operations -- Nuclear Generation -- Operations -- Seabrook" for information on CL&P's commitment to advance funds to cover payments that a 12 percent Seabrook owner might be unable to pay with respect to Seabrook project costs.
The System's aggregate capital requirements for 1994, exclusive of requirements under NBFT, are as follows:
Total
CL&P PSNH WMECO NAEC Other System
(Millions of Dollars)
Construction
(including AFUDC)..... $157.8 $37.5 $37.5 $ 8.2 $26.5 $267.5
Nuclear Fuel
(excluding AFUDC). (.3) 1.8 (.2) 5.8 - 7.1
Maturities......... 182.0 - - - - 182.0
Cash Sinking Funds. 7.0 94.0 1.5 - 10.7 113.2
Total.......... $346.5 $133.3 $38.8 $14.0 $37.2 $569.8
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1994 FINANCING PLANS
The System companies, other than CL&P, currently expect to finance their 1994 requirements through internally generated funds. CL&P may issue up to $200 million of long-term debt, primarily to finance maturing securities. This estimate excludes the nuclear fuel requirements financed through the NBFT. See "Financing Nuclear Fuel" above for information on the NBFT. In addition to financing their 1994 requirements, the System companies intend, if market conditions permit, to continue to refinance a portion of their outstanding long-term debt and preferred stock, if that can be done at a lower effective cost.
On February 17, 1994, CL&P issued $140 million in principal amount of 5 1/2 percent first mortgage bonds due in 1999 and $140 million in principal amount of 6 1/2 percent first mortgage bonds due in 2004. The net proceeds were used to redeem higher cost first mortgage bonds.
On March 8, 1994, WMECO contracted to issue $40 million principal amount of 6 1/4 percent first mortgage bonds due in 1999 and $50 million in principal amount of 7 3/4 percent first mortgage bonds due in 2024. The net proceeds will be used to redeem higher cost first mortgage bonds.
FINANCING LIMITATIONS
The amounts of short-term borrowings that may be incurred by NU, CL&P, PSNH, WMECO, HWP, NAEC, NNECO, The Rocky River Realty Company (RRR), The Quinnehtuk Company (Quinnehtuk) (RRR and Quinnehtuk are real estate subsidiaries), and HEC are subject to periodic approval by the SEC under the Public Utility Holding Company Act of 1935 (1935 Act).
The following table shows the amount of short-term borrowings authorized by the SEC for each company and the amounts of outstanding short term debt of those companies at the end of 1993.
Maximum Authorized Short-Term Debt
Short-Term Debt Outstanding at 12/31/93*
(Millions of Dollars)
NU.................. $ 175.0 $ 72.5
CL&P ............... 375.0 96.2
PSNH ............... 125.0 2.5
WMECO............... 75.0 6.0
HWP................. 8.0 -
NAEC................ 50.0 -
NNECO............... 65.0 -
RRR................. 25.0 16.5
Quinnehtuk.......... 8.0 4.3
HEC................. 11.0 2.9
______
$200.9
_________________
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* This column includes borrowings of various System companies from NU and other System companies through the Northeast Utilities System Money Pool (Money Pool). Total System short term indebtedness to unaffiliated lenders was $173.5 million at December 31, 1993.
The supplemental indentures under which NU issued $175 million in principal amount of 8.58 percent amortizing notes in December 1991 and $75 million in principal amount of 8.38 percent amortizing notes in March 1992 contain restrictions on dispositions of certain System companies' stock, limitations of liens on NU assets and restrictions on distributions on and acquisitions of NU stock. Under these provisions, neither NU, CL&P, PSNH nor WMECO may dispose of voting stock of CL&P, PSNH or WMECO other than to NU or another System company, except that CL&P may sell voting stock for cash to third persons if so ordered by a regulatory agency so long as the amount sold is not more than 19 percent of CL&P's voting stock after the sale. The restrictions also generally prohibit NU from pledging voting stock of CL&P, PSNH or WMECO or granting liens on its other assets in amounts greater than five percent of the total common equity of NU. As of March 1, 1994, no NU debt was secured by liens on NU assets. Finally, NU may not declare or make distributions on its capital stock, acquire its capital stock (or rights thereto), or permit a System company to do the same, at times when there is an Event of Default under the supplemental indentures under which the amortizing notes were issued.
The charters of CL&P and WMECO contain preferred stock provisions restricting the amount of short term or other unsecured borrowings those companies may incur. As of December 31, 1993, CL&P's charter would permit CL&P to incur an additional $570 million of unsecured debt and WMECO's charter would permit it to incur an additional $141.1 million of unsecured debt.
In connection with NU's acquisition of PSNH, certain financial conditions intended to prevent NU from relying on CL&P resources if the PSNH acquisition strains NU's financial condition were imposed by the DPUC. The principal conditions provide for a DPUC review if CL&P's common equity falls to 36 percent or below, require NU to obtain DPUC approval to secure NU financings with CL&P stock or assets, and obligate NU to use its best efforts to sell CL&P preferred or common stock to the public if NU cannot meet CL&P's need for equity capital. At December 31, 1993, CL&P's common equity ratio was 39.1 percent.
While not directly restricting the amount of short-term debt that CL&P, WMECO, RRR, NNECO and NU may incur, credit agreements to which CL&P, WMECO, HWP, RRR, NNECO and NU are parties provide that the lenders are not required
to make additional loans, or that the maturity of indebtedness can be accelerated, if NU (on a consolidated basis) does not meet a common equity ratio that requires, in effect, that the NU consolidated common equity (as defined) be at least 27 percent for three consecutive quarters. At December 31, 1993, NU's common equity ratio was 30.9 percent. Credit agreements to which PSNH is a party forbid its incurrence of additional debt unless it is able to demonstrate, on a pro forma basis for the prior quarter and going forward, that its equity ratio (as defined) will be at least 21 percent of total capitalization (as defined) through June 30, 1994, 23 percent through June 30, 1995 and 25 percent thereafter. In addition, PSNH must demonstrate that its ratio of operating income to interest expense will be at least 1.5 to 1 for each period of four fiscal quarters ending after June 30, 1993 through June 30, 1994 and 1.75 to 1 thereafter. At December 31, 1993, PSNH's common equity ratio was 28.2 percent and its operating income to interest expense ratio was 2.27 to 1.
See "Short-Term Debt" in the notes to NU's, CL&P's, PSNH's and WMECO's financial statements for information about credit lines available to System companies.
The indentures securing the outstanding first mortgage bonds of CL&P, PSNH, WMECO and NAEC provide that additional bonds may not be issued, except for certain refunding purposes, unless earnings (as defined in each indenture, and before income taxes, and, in the case of PSNH, without deducting the amortization of PSNH's regulatory asset) are at least twice the pro forma annual interest charges on outstanding bonds and certain prior lien obligations and the bonds to be issued.
The preferred stock provisions of CL&P's, WMECO's and PSNH's charters also prohibit the issuance of additional preferred stock (except for refinancing purposes) unless income before interest charges (as defined and after income taxes and depreciation) is at least 1.5 times the pro forma annual interest charges on indebtedness and the annual dividend requirements on preferred stock that will be outstanding after the additional stock is issued.
Beginning with the dividends paid on NU common shares by NU in June 1990, NU's Dividend Reinvestment Plan (DRP) was amended to authorize the dividends and optional cash purchases of participating shareholders to be reinvested in NU common shares purchased either in the open market or directly from NU. NU received approximately $42.4 million in 1991 and approximately $35.6 million in 1992 of new common shareholders' equity from the reinvestment of dividends and voluntary cash investments. No funds have been raised by NU through DRP since August 1992, when management ended direct purchases and caused shares to be purchased for DRP participants in the open market.
As part of the PSNH acquisition in June 1992, NU issued warrants for the purchase of NU common stock at a price of $24 per share. In 1993, NU received $8.3 million from the exercise of these warrants. As of December 31, 1993, warrants for 7,975,516 shares of NU common stock remained unexercised.
NU is dependent on the earnings of, and dividends received from, its subsidiaries to meet its own financial requirements, including the payment of dividends on NU common shares. At the current indicated annual dividend of $1.76 per share, NU's aggregate annual dividends on common shares outstanding at December 31, 1993, including unallocated shares held by the ESOP trust, would be approximately $236.2 million. Dividends are payable on common shares only if, and in the amounts, declared by the NU Board of Trustees.
SEC rules under the 1935 Act require that dividends on NU's shares be based on the amounts of dividends received from subsidiaries, not on the undistributed retained earnings of subsidiaries. The SEC's order approving NU's acquisition of PSNH under the 1935 Act approved NU's request for a waiver of this requirement through June 1997. PSNH and NAEC were effectively prohibited from paying dividends to NU through May 1993. Through the remainder of 1993, PSNH and NAEC did not pay dividends to permit them to build up the common equity portion of their capitalizations. Until PSNH and NAEC can begin to fund a part of NU's dividend requirements, NU expects to fund that portion of its dividend requirements with the proceeds of borrowings.
The supplemental indentures under which CL&P's and WMECO's first mortgage bonds and the indenture under which PSNH's first mortgage bonds have been issued limit the amount of cash dividends and other distributions these subsidiaries can make to NU out of their retained earnings. As of December 31, 1993, CL&P had $210.6 million, WMECO had $26.5 million and PSNH had $60.8 million of unrestricted retained earnings. PSNH's preferred stock provisions also limit the amount of cash dividends and other distributions PSNH can make to NU if after taking the dividend or other distribution into account, PSNH's common stock equity is less than 25 percent of total capitalization. The indenture under which NAEC's Series A Bonds have been issued also limits the amount of cash dividends or distributions NAEC can make to NU to retained earnings plus $10 million. At December 31, 1993, $48.7 million was available to be paid under this provision.
PSNH's credit agreements prohibit PSNH from declaring or paying any cash dividends or distributions on any of its capital stock, except for dividends on the preferred stock, unless minimum interest coverage and common equity ratio tests are satisfied.
Certain subsidiaries of NU established the Money Pool to provide a more effective use of the cash resources of the System, and to reduce outside short term borrowings. The Service Company administers the Money Pool as agent for the participating companies. Short term borrowing needs of the participating companies (except NU) are first met with available funds of other member companies, including funds borrowed by NU from third parties. NU may lend to, but not borrow from, the Money Pool. Investing and borrowing subsidiaries receive or pay interest based on the average daily Federal Funds rate, except that borrowings based on loans from NU bear interest at NU cost. Funds may be withdrawn or repaid to the Money Pool at any time without prior notice.
ELECTRIC OPERATIONS
DISTRIBUTION AND LOAD
The System operating companies own and operate a fully-integrated electric utility business. The System operating companies' retail electric service territories cover approximately 11,335 square miles (4,400 in CL&P's service area, 5,445 in PSNH's service area and 1,490 in WMECO's service area) and have an estimated total population of approximately 3.7 million (2.5 million in Connecticut, 780,000 in New Hampshire and 450,000 in Massachusetts). The companies furnish retail electric service in 149, 198 and 59 cities and towns in Connecticut, New Hampshire and Massachusetts, respectively. In December 1993, CL&P furnished retail electric service to approximately 1.085 million customers in Connecticut, PSNH provided retail electric service to approximately 397,000 customers in New Hampshire and
WMECO served approximately 193,000 retail electric customers in Massachusetts. HWP serves approximately 25 customers in a portion of the town of Holyoke, Massachusetts.
The following table shows the sources of 1993 electric revenues based on categories of customers:
CL&P PSNH WMECO NAEC Total System
Residential........... 39% 35% 38% - 39%
Commercial............ 33 17 30 - 29
Industrial ........... 14 28 20 - 18
Wholesale* ........... 11 17 8 100% 11
Other ................ 3 3 4 - 3
____ ____ ____ ____ ____
Total ................ 100% 100% 100% 100% 100%
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* Includes capacity sales.
NAEC's 1993 electric revenues were derived entirely from sales to PSNH under the Seabrook Power Contract. See "Rates - Seabrook Power Contract" for a discussion of the contract.
Through December 31, 1993, the all-time maximum demand on the System was 6,191 MW, which occurred on July 8, 1993. At the time of the peak, the System's generating capacity, including capacity purchases, was 8,965 MW. The System was also selling approximately 1,431 MW of capacity to other utilities at that time.
In 1993, System energy requirements were met 62 percent by nuclear units, nine percent by oil burning units, 10 percent by coal burning units, three percent by hydroelectric units, two percent by natural gas burning units and 14 percent by cogenerators and small power producers. By comparison, in 1992 the System's energy requirements were met 48 percent by nuclear units, 24 percent by oil burning units, 10 percent by coal burning units, four percent by hydroelectric units, one percent by natural gas burning units and 13 percent by cogenerators and small power producers. See "Electric Operations-Generation and Transmission" for further information.
The actual changes in kWh sales for the last two years and the forecasted sales growth estimates for the 10-year period 1993 through 2003, in each case exclusive of bulk power sales, for the System, CL&P, PSNH and WMECO are set forth below:
1993 over 1992 over Forecast 1993-2003
(under) 1992 (under) 1991 Compound Rate of Growth
System......... 10.9%(1) 15.3%(1) 1.4%
CL&P........... (0.3)% 0.2% 1.3%
PSNH........... 1.0% 1.1% 1.7%
WMECO....... 0.1% (1.6)% 1.1%
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(1) The percent increase in System 1992 sales over 1991 sales and 1993 sales over 1992 sales is due to the inclusion of PSNH sales beginning in June 1992.
In 1990, FERC required the reclassification of bulk power sales from "purchased power" to "sales for resale" for the 1990 and later reporting years. Bulk power sales are not included in the development of any long-term forecasted growth rates. The actual changes in kWh sales for the last two years, adjusted for bulk power sales (by adding back the bulk power sales), for the System, CL&P, PSNH and WMECO are set forth below:
1993 over (under) 1992 1992 over (under) 1991
System ................... 11.8%(1) 19.7%(1)
CL&P ..................... 1.2% 3.3%
PSNH ..................... (9.3)% 6.7%
WMECO .................... 13.5% 9.9%
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(1) System sales percentages reflect the inclusion of PSNH sales beginning in June 1992.
Despite a warmer than normal summer that added to cooling requirements, sales showed negligible growth in 1993. Widespread economic recovery throughout the System's service territory did not occur in 1993, but there were mixed pockets of regional economic growth aided by very favorable interest rates. Curtailments in defense spending continue to affect the Connecticut, New Hampshire and western Massachusetts economies, which are heavily dependent on defense-related industries. Competition in various forms may also adversely affect the projected growth rate of sales over the next ten years. Where energy costs are a significant part of operating expenses, business customers may turn to self-generation, switch fuel sources, or relocate to other states and countries which have aggressive programs to attract new businesses. For further information on the effect of competition on sales growth rates, see "Marketing and Competition."
The forecasted load growth for the System as a whole is significantly below historic rates in part because of forecasted savings from NU-sponsored C&LM programs, which are designed to minimize operating expenses for System customers and postpone the need for new capacity on the System. The forecasted ten-year growth rate of System sales would be approximately 1.8 percent instead of 1.4 percent if the System did not pursue C&LM savings. See "Resource Plans - Future Needs" for an estimate of the impact of C&LM programs on the System's need for new generating resources and for information about C&LM cost impacts and cost recovery. See "Rates - Connecticut Retail Rates" and "Rates - Massachusetts Retail Rates" for information about rate treatment of C&LM costs.
With the System's generating capacity of 8,268 MW as of January 1, 1994 (including the net of capacity sales to and purchases from other utilities, and approximately 690 MW of capacity to be purchased from QFs and IPPs under existing contracts and contracts under negotiation), the System expects to meet its projected annual peak load growth of 1.3 percent reliably until at least the year 2007.
The availability of new resources and reduced demand for electricity have combined to place the System and most other New England electric utilities in a surplus capacity situation. The principal resource changes were Seabrook 1's commercial operation, the full operation of the second phase of the Hydro-Quebec project, and increased availability of power from QF and IPP projects. As a consequence, the competition from capacity-long
utilities as sellers and the loss of utilities that are no longer capacity- short as buyers have adversely affected the System companies' efforts to sell additional surplus capacity at the price levels that prevailed in the late 1980s. Taking into account projected load growth for the System and committed capacity sales, but not taking into account future potential capacity sales to other utilities that are not subject to firm commitments, the System's surplus capacity is expected to be approximately 1,000 MW in 1994.
For further information on the effect of competition on sales of surplus capacity, see "Competition and Marketing."
The System operating companies operate and dispatch their generation as provided in the New England Power Pool (NEPOOL) Agreement. In 1993, the peak demand on the NEPOOL system was 19,570 MW, which occurred in July, above the 1992 peak load of 18,853 MW in January of that year. NEPOOL has projected that there will be an increase in demand in 1994 and estimates that the summer 1994 peak load could reach 19,800 MW. NEPOOL projects that sufficient capacity will be available to meet this anticipated demand.
GENERATION AND TRANSMISSION
The System operating companies and most other New England utilities with electric generating facilities are parties to the NEPOOL Agreement. Under the NEPOOL Agreement, the region's generation and transmission facilities are planned and operated as part of the regional New England bulk power system. System transmission lines form part of the New England transmission system linking System generating plants with one another and with the facilities of other utilities in the northeastern United States and Canada. The generating facilities of all NEPOOL participants are dispatched as a single system through the New England Power Exchange, a central dispatch facility. The NEPOOL Agreement provides for a determination of the generating capacity responsibilities of participants and certain transmission rights and responsibilities. Pool dispatch results in substantial purchases and sales of electric energy by pool participants, including the System companies, at prices determined in accordance with the NEPOOL Agreement.
The System operating companies, except PSNH, pool their electric production costs and the costs of their principal transmission facilities under the NUG&T agreement. In addition, a ten-year agreement between PSNH and CL&P, WMECO and HWP provides for a sharing of the capability responsibility savings and energy expense savings resulting from a single system dispatch.
In connection with NU's acquisition of PSNH, the System proposed a comprehensive plan for opening up a transmission corridor between northern and southern New England for use in "wheeling" power of other utilities. The plan was designed to accomplish a level of access to transmission resources of the PSNH and New England Electric System (NEES) systems that could formerly be accomplished only after a series of multilateral negotiations. The plan includes provisions to (i) make 452 MW of long term transmission service available across the PSNH system from Maine to Massachusetts, Rhode Island, Connecticut and Vermont at embedded cost rates, (ii) make 200 MW of long term transmission service available by NEES for those utilities requiring deliveries across NEES's system in order to make use of access to the PSNH system, and (iii) construct new facilities as needed to expand the corridor from Maine to Massachusetts, if the cost of expansion is supported and if regulatory approvals for the expansion are received. Further, NU committed to make access to the combined NU-PSNH transmission system available for third-party wheeling transactions whenever capacity is available, and to expand the system when expansion is feasible. The
principal constraints are that NU and PSNH have reserved a priority on the use of their transmission systems to serve the reliability needs of their own native load customers, and the commitment to expand would be subject to obtaining all necessary approvals. This plan became effective in October 1992, subject to the outcome of a hearing ordered by FERC in this proceeding, and the Commission's final decision in the compliance phase of the merger proceeding discussed below. NU and NEES filed offers of settlement in this proceeding in May and June 1993, respectively, and the Presiding Administrative Law Judge certified both settlement offers to the Commission in July 1993. The only contested issue was the refund and surcharge provision that was included in both offers of settlement. The Commission has not yet acted on these settlement offers.
These commitments, and the entire issue of access to the NU and PSNH transmission systems by other utilities and non-utility generators, were the subject of extensive controversy in New England. On January 29, 1992, FERC issued a decision approving the acquisition and allowing NU and PSNH customers to be held harmless if other utilities and non-utility generators need to use the NU-PSNH transmission to buy or sell electricity. In accordance with the January 29 decision, on April 23, 1992 and August 4, 1992, NU made compliance filings, including transmission tariffs implementing the FERC's conditions. All tariffs have been accepted by FERC and were effective as of the merger date. FERC has issued summary determinations (without hearing) and NU has filed for rehearing of FERC's compliance tariff order in an effort to reinstate the originally proposed rates. FERC has not yet acted on NU's rehearing petition.
FERC's approval of NU's acquisition of PSNH was appealed to the United States Court of Appeals for the First Circuit. On May 19, 1993, the First Circuit Court affirmed FERC's decision approving the merger but remanded to FERC one issue brought by NU related to FERC's ability to change the terms of the Seabrook Power Contract. FERC filed for en banc (full court) review by the First Circuit Court on the Seabrook Power Contract issue, which was denied. No petitions for review were filed in the U.S. Supreme Court, therefore, the First Circuit Court's decision is final. FERC has yet to initiate any proceeding on the court's remand, which would address whether FERC could modify the Seabrook Power Contract under a more stringent "public interest standard."
On December 21, 1993, NU filed an appeal in the United States Court of Appeals for the District of Columbia Circuit of a FERC order directing NU to put itself on its own transmission tariffs in connection with all NU sales of wholesale power. NU had committed, as part of the PSNH merger, to place itself on its tariff when it was competing with other wholesale power suppliers to make a sale in order to "level the playing field." In its order, FERC expanded NU's merger commitment to include all transactions, regardless of whether or not NU's competitors need to use the NU transmission system.
The controversy about the terms on which wheeling transactions are to be effected in New England has stimulated a series of negotiations among utilities, regulators and non-utility generators, directed at the possible development of new regional transmission arrangements. While an original draft regional transmission arrangement was not supported by all parties, there have been negotiations on a less comprehensive arrangement. Any arrangement would be subject to approval by NEPOOL members and FERC.
HYDRO-QUEBEC
Along with other New England utility companies, CL&P, PSNH, WMECO and
HWP is each a participant in agreements to finance, construct, and operate the United States portion of direct current transmission circuits between New England and Quebec, Canada. The project was built in two phases, and now provides 2,000 MW of rated transfer capacity with Canadian facilities constructed and owned by Hydro-Quebec, a Canadian utility system. Phase 1, which entered into commercial operation in 1986, initially provided 690 MW of North-South transfer capacity. In Phase 2, the transmission line was extended to a new converter station in eastern Massachusetts. Phase 2 entered into full operation in 1991. The actual transfers over the interconnection to date have averaged in the 1,400 to 1,800 MW range.
The interconnection permits a reduction in oil consumption in New England and has the potential to produce cost savings to customers through the purchase of power from Hydro-Quebec's hydroelectric generating facilities. The interconnection also reduces the level of reserves New England utilities must carry to assure that pool reliability criteria are met.
The System companies are obligated to pay 34.22 percent of the annual costs of the Phase 1 facilities and 32.78 percent of the annual cost of the Phase 2 facilities. They are entitled, on the basis of a composite of these percentages, to use the capacity of the facilities for their own transactions and to share in the savings from pool energy transactions with Hydro-Quebec. The Phase 1 total project cost was $141 million and the Phase 2 total project cost was approximately $495 million. Phase 2 was constructed and is owned and operated by two companies in which NU has a 22.66 percent equity ownership interest. As an equity participant, NU guarantees certain obligations in connection with the debt financing of certain other participants that have lower credit ratings, and it receives compensation for such undertakings.
When the Phase 2 facilities became fully operational in 1991, a contract covering the purchase by the New England utilities of 70 terawatthours of energy from Hydro-Quebec over a period of approximately ten years came into effect. While transactions under this contract are expected to constitute the principal use of the interconnection during the 1990s, the interconnection is also available for other energy transactions and for the "banking" of energy in Canada during off-peak hours in New England, with equivalent amounts of energy available to New England during peak hours.
FOSSIL FUELS
OIL
The System's residual oil-fired generation stations used approximately 5.89 million barrels of oil in 1993. The System obtained the majority of its oil requirements in 1993 through contracts with three large, independent oil companies. Those contracts allow for some spot purchases when market conditions warrant, but spot purchases represented less than 15 percent of the System's fuel oil purchases in 1993. The contracts expire annually or biennially.
The average 1993 price paid for fuel oil used for electric generation was approximately $14 per barrel, which was the same as the average 1992 price. No. 6 fuel oil prices were high during the first quarter of 1993 due to increased demand and firm crude oil prices. Fuel oil prices declined slightly during the second and third quarters, weakened in the fourth quarter due to weak crude prices associated with OPEC over-production and then firmed in the first quarter of 1994 due to severe weather in the Northeast. On
February 1, 1994, the weighted average price being paid for the System's fuel oil had increased to $17 per barrel.
The System-wide fuel oil storage capacity is approximately 2.5 million barrels. In 1993, inventories were maintained at levels between 40 - 60 percent of capacity. This inventory constitutes approximately 13 days of full load operation.
GAS
Currently, three system generating units, PSNH's Newington unit, WMECO's West Springfield Unit 3 and CL&P's Montville 5, can burn either residual oil or natural gas as economics dictate. The System is currently in the process of converting CL&P's Devon Units 7 & 8 into oil and gas dual-fuel generating units. Devon Unit 8's boiler conversion, which gave it gas burning capability, was completed in December 1993. Devon Unit 7's boiler conversion is scheduled for completion during its upcoming April 1994 outage. The System plans to have both units operational by the end of July 1994.
Annual gas consumption depends on factors such as oil prices, gas prices and unit availability. In 1993, gas was used sparingly at the System's dual-fuel units because of the attractiveness of oil prices relative to those for natural gas. CL&P, PSNH and WMECO all have contracts with the local gas distribution companies where the Montville, Newington and West Springfield units are located, under which natural gas is made available by those companies on an interruptible basis. While WMECO and PSNH meet all of their gas supply needs for the West Springfield and Newington units through purchases from the local gas distribution company, CL&P can supply its Montville unit either by purchasing gas from the local gas distribution company at a DPUC-approved rate or by purchasing gas directly from producers or brokers and transporting that gas through the interstate pipeline system and the local gas distribution system. In 1993, all of the gas burned at Montville Unit 5 was purchased from a local gas distribution company. It is expected that gas for the Devon units will be purchased directly from producers or brokers on an interruptible basis and transported through the interstate pipeline system and the local gas distribution company.
The System expects that interruptible natural gas will continue to be available for its dual-fuel electric generating units and will continue to supplement fuel oil requirements. The Iroquois Gas Transportation System, which became fully operational in November 1992, is expected to increase New England's gas supplies by at least 35 percent by November 1994. The increased availability of gas may make the option of converting other oil- burning electric generating units to gas on an interruptible dual-fuel basis more attractive to the System.
COAL
Currently, coal is purchased for HWP's Mt. Tom Station and for PSNH's Merrimack Units 1 and 2 and its coal-oil Schiller Units 4, 5 and 6. Mt. Tom Station received approximately 314,000 tons of coal in 1993 at an average delivered coal price of $ 43.40 per ton, which is down from the average 1992 coal price of $44.25 per ton. In 1993, HWP extended an existing contract for the majority of the coal to be supplied to Mt. Tom Station. This contract provides the System with assurance of coal supply and the flexibility to purchase some coal on the spot market. In the future, the System will evaluate whether to continue to purchase coal by contract or return to the spot market.
The coal inventory for Mt. Tom Station varies between a minimum level of 30 days fuel and a maximum of approximately 100 days fuel. Typically, the higher level is achieved in December, when deliveries are suspended for the winter. The stockpile provides the plant's operating fuel until deliveries are resumed in March. Because of changes in federal and state air quality requirements, by 1995 HWP will need to change the kinds of coal that it purchases for use at Mt. Tom Station. The potential impact of changing air quality requirements on coal supplies is being evaluated, and HWP is testing various types of coal to meet these requirements. See "Regulatory and Environmental Matters - Environmental Regulation-Air Quality Requirements."
In December 1991, PSNH executed a contract for the purchase of up to 100 percent of the coal requirements for PSNH's Merrimack Units 1 and 2 through December 31, 1993. This contract has been extended through December 31, 1994. Under this agreement, PSNH may also purchase coal on the spot market. In 1993, Merrimack Station received approximately 1.1 million tons of coal. The average delivered coal price in 1993 was $43.00 per ton. The coal inventory at Merrimack Station varies between a minimum of 60 days and a maximum of 90 days of fuel.
Schiller Units 4, 5 and 6, PSNH's dual-fuel coal and oil fired units, are dispatched on the most economical fuel in accordance with the provisions of the NEPOOL Agreement. Schiller Station consumed approximately 236,000 tons of coal in 1993 at an average delivered price of $39.40 per ton. Schiller's 1993 coal requirements were fulfilled through three primary contracts, pursuant to which 77 percent was provided by foreign suppliers and the remaining 23 percent by a domestic supplier.
FOSSIL PLANT RETIREMENTS
In 1991, the System retired seven of the System's oldest, least used, and most costly oil-fired steam generating units. In 1992, five oil-burning combustion turbines were retired. The decision to retire these units reflected both the surplus of generating capacity in New England and the System's continuing efforts to reduce operation and maintenance costs. There were no significant fossil plant retirements in 1993, but the System's plan calls for deactivating, by the end of 1994 Montville Units 5 and 6, which have a capacity of 82 MW and 410 MW, respectively. A final decision on the future of these units will be made following the completion of further economic evaluations and consideration of possible alternatives.
NUCLEAR GENERATION
GENERAL
The System companies have interests in seven operating nuclear units:
Millstone 1, 2 and 3, Seabrook 1 and three other units owned by regional
nuclear generating companies (the Yankee companies). System companies
operate the three Millstone units, Seabrook 1 and CY. The System companies
also have interests in the owned by the Yankee Atomic Electric Company
(Yankee Rowe), which was permanently removed from service in 1992.
CL&P and WMECO own 100 percent of Millstone 1 and 2 as tenants in common. Their respective ownership interests are 81 percent and 19 percent.
CL&P, PSNH and WMECO have agreements with other New England utilities covering their joint ownership as tenants in common of Millstone 3. CL&P's ownership interest in the unit is 52.9330 percent (608 MW), PSNH's ownership interest in the unit is 2.8475 percent (32.7 MW) and WMECO's interest is 12.2385 percent (140.6 MW). NAEC and CL&P are parties to an
agreement, similar to the Millstone 3 agreements, with respect to their 35.98201 percent (413.8 MW) and 4.05985 percent (46.7 MW) interests, respectively, in Seabrook. The agreements all provide for pro rata sharing of the construction and operating costs and the electrical output of each unit by the owners, as well as associated transmission costs.
CL&P, PSNH, WMECO and other New England electric utilities are the stockholders of the Yankee companies. Each Yankee company owns a single nuclear generating unit. The stockholder-sponsors of a Yankee company are responsible for proportional shares of the operating costs of the Yankee company and are entitled to proportional shares of the electrical output. The relative rights and obligations with respect to the Yankee companies are approximately proportional to the stockholders' percentage stock holdings, but vary slightly to reflect arrangements under which non-stockholder electric utilities have contractual rights to some of the output of particular units. The Yankee companies and CL&P's, PSNH's and WMECO's stock ownership percentages and approximate MW entitlements in each are set forth below:
CL&P PSNH WMECO System
% MW % MW % MW % MW
Connecticut Yankee Atomic
Power Company (CYAPC) ...... 34.5 204 5.0 29 9.5 56 49.0 289
Maine Yankee Atomic Power
Company (MYAPC) ............ 12.0 95 5.0 39 3.0 24 20.0 158
Vermont Yankee Nuclear
Power Corporation (VYNPC)... 9.5 44 4.0 19 2.5 12 16.0 75
Yankee Atomic Electric
Company (YAEC)* ............ 24.5 - 7.0 - 7.0 - 38.5 -
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* See "Yankee Units" for information about the permanent shutdown of the unit owned and operated by YAEC.
CL&P, PSNH and WMECO are obligated to provide their percentages of any additional equity capital necessary for the Yankee companies. CL&P, PSNH and WMECO believe that the Yankee companies, excluding YAEC, will require additional external financing in the next several years to finance construction expenditures and nuclear fuel and for other purposes. Although the ways in which each Yankee company will attempt to finance these expenditures have not been determined, CL&P, PSNH and WMECO could be asked to provide direct or indirect financial support for one or more Yankee companies.
OPERATIONS
Capacity factor is a ratio that compares a unit's actual generating output for a period with the unit's maximum potential output. In 1993, the nuclear units in which the System companies have entitlements achieved an actual composite (weighted by entitlement) capacity factor of 79.9 percent. The five nuclear units operated by the System had a composite capacity factor of 80.3 percent based on normal winter claimed capability. The average capacity factor for operating nuclear units in the United States was 73.2 percent for January through September 1993 and 80.4 percent for the five System nuclear units operated in 1993, in each case using the design electrical rating method rather than normal winter claimed capability.
When the nuclear units in which they have interests are out of service, CL&P, PSNH and WMECO need to generate and/or purchase replacement power. Recovery of prudently incurred replacement power costs is permitted, with limitations, through the GUAC for CL&P, through a retail fuel adjustment clause for WMECO and through a comprehensive fuel and purchased power adjustment clause (FPPAC) for PSNH. For the status of regulatory and legal proceedings related to recovery of replacement power costs for the 1990-1993 period, see "Rates - Connecticut Retail Rates," "Rates-Massachusetts Retail Rates" and "Rates - New Hampshire Retail Rates."
MILLSTONE UNITS
The 1993 overall performance of the three nuclear electric generating units located at Millstone station and operated by the System was substantially better than in 1992. For the twelve months ended December 31, 1993, the three units' composite capacity factor was 79.3 percent, compared with a composite capacity factor of 53.1 percent for the twelve months ended December 31, 1992 and 38.4 percent for the same period in 1991.
In 1993 Millstone 1 operated at a 92.4 percent capacity factor with no extended outages. The unit began a planned refueling and maintenance outage on January 15, 1994 that is expected to last seventy-one days. Major work includes replacement of the main condenser tubes and installation of a new low pressure turbine. These modifications are intended to reduce the number of unplanned outages and improve the overall plant efficiency.
In 1993 Millstone 2 operated at a 82.5 percent capacity factor. On January 13, 1993, the plant returned to service following a refueling outage that commenced on May 29, 1992. During that outage, both steam generators were replaced. The DPUC has opened a docket to review CL&P's performance in replacing Millstone 2's steam generators. See "Rates-Connecticut Retail Rates" for further information on the steam generator replacement docket. In addition to several short outages during 1993, Millstone 2 was shut down for two unplanned outages of significant duration. The first such outage began on August 5, 1993, to replace a leaking primary system valve. That outage lasted ten days. For more information on this outage, see "Electric Operations - Nuclear Generation - Operations - NRC Regulation." The second significant unplanned outage lasted twenty-six days, commencing on September 15, 1993, and was necessary to upgrade the motor-operated feedwater isolation valves. Millstone 2 is scheduled to begin a refueling and maintenance outage on July 30, 1994. The outage is currently planned for a 63-day duration. Major work activities will include a reactor vessel in-service inspection, erosion/corrosion piping inspections, motor-operated valve testing and service water piping replacement.
In 1993 Millstone 3 operated at a 64.8 percent capacity factor. The unit began a refueling and maintenance outage on July 31, 1993 and completed it in 99 days. During the outage two significant issues were identified and resolved. Each of these issues resulted in an outage extension beyond original plans. The first issue required replacement of all four reactor coolant pumps due to concerns over turning vane cap screw and locking cup integrity. The second issue related to problems identified during inspection and testing of the supplementary leak collection and release system (SLCRS) and the auxiliary building ventilation system (ABVS), which provide secondary protection against radiological releases to the atmosphere. For more information on this issue, see "Electric Operations - Nuclear Generation - Operations - NRC Regulation." Resolution of these problems necessitated various modifications to these systems. No refueling or maintenance outages are planned for Millstone 3 during 1994.
NUCLEAR PERFORMANCE IMPROVEMENT INITIATIVES
The System's nuclear organization is taking major steps to correct identified performance weaknesses. For instance, on a 1992 to 1995 cumulative basis, NU anticipates total expenditures of approximately $2.3 billion for operation and maintenance and $440 million in capital improvements for the five plants that it operates.
In addition, the comprehensive Performance Enhancement Program (PEP), authorized in 1992, continues to be one of the major initiatives that the nuclear organization is implementing to improve its overall performance. The program, in conjunction with other actions to address the long-term performance of the nuclear group, is designed to correct the root causes of the declining performance trend noted in the early 1990's. The PEP is organized into four major areas of activities, each focusing on a particular aspect of nuclear operations. The areas are management practices, programs and processes, performance assessments and functional programs. These areas were established based on an internal self-assessment completed in 1992. Detailed action plans have been prepared to address the specific activities. At the end of 1992, six of the forty-two action plans were completed and validated. An additional fourteen action plans were completed in 1993 and are awaiting validation. Seven action plans are to be completed in 1994, leaving fifteen action plans to complete during the remainder of the program. The 1993 PEP budget was $32.9 million.
The System also announced a major reorganization of its Connecticut-based nuclear organization on November 8, 1993. The primary focus was realignment of engineering services along unit lines. The changes also included the appointment of a new senior vice president for Millstone station, some management consolidation, and a reorganization of the nuclear plant maintenance staff. See "Employees." In addition, most of the nuclear support staff currently located in Berlin, Connecticut will be centralized at the generating stations by the summer of 1994. To support these efforts, the System is constructing a five-story office building at Millstone station. This building will replace several temporary modular buildings and will house most of the nuclear technical support staff that is now located at various System locations. The prudence of this construction project is the subject of an ongoing inquiry by the DPUC.
SEABROOK
In 1993 Seabrook 1 operated at a capacity factor of 89.8 percent. The unit is currently in an 18-month operating cycle that began in November 1992.
The unit is scheduled to begin a 57-day refueling and maintenance outage on April 16, 1994. During this outage, the main plant computer will be replaced.
CL&P, PSNH and NAEC could be affected by the ability of other Seabrook joint owners to fund their share of Seabrook costs. Great Bay Power Corporation (GBPC), a former subsidiary of Eastern Utilities Associates and owner of 12.13 percent of Seabrook, has been in bankruptcy since February 1991. The Bankruptcy Court confirmed GBPC's reorganization plan on March 5, 1993 and approvals are required from NRC, FERC and NHPUC to consummate the plan. CL&P has committed to advance GBPC up to $12 million, secured by a high priority lien on GBPC's share of Seabrook, to cover GBPC's shortfalls in funding its share of the operation of Seabrook through June 30, 1994. As of March 1, 1994, CL&P was lending approximately $2 million to GBPC under this arrangement. GBPC has advised CL&P that it expects to consummate its
reorganization plan, emerge from bankruptcy and repay CL&P for all advances by June 30, 1994. CL&P is unable to predict what impact, if any, failure of the reorganization plan to become effective will have on the operating license for Seabrook or what actions CL&P and the other joint owners of the unit may be required to take.
On May 6, 1991, NHEC, PSNH's largest customer and one of the joint owners of Seabrook, filed a petition for reorganization under Chapter 11 of the Federal Bankruptcy Code. The plan of reorganization for NHEC was confirmed by the United States Bankruptcy Court on March 20, 1992 and wholesale power arrangements were accepted by FERC on July 22, 1992. On October 5, 1992, the NHPUC released an order approving NHEC's plan of reorganization. Under the plan of reorganization, NHEC will remain a customer of PSNH. The plan also provides that PSNH will purchase the capacity and energy of NHEC's 2.2 percent ownership interest in Seabrook 1 and pay all of NHEC's Seabrook costs for a ten-year period, which began July 1, 1990. On December 1, 1993, the United States Bankruptcy Court for the District of New Hampshire declared the NHEC reorganization plan effective as of that date. See "Rates--Wholesale Rates" for further information on the bankruptcy and subsequent reorganization of NHEC.
At certain times, VEG&T failed to pay its share of Seabrook costs. Certain joint owners, including PSNH and CL&P, provided funds against future payments due from VEG&T to assure that funds were available to meet its ownership share of Seabrook costs. PSNH initially participated in such payments, but ceased providing such funds in January 1988, when it commenced bankruptcy proceedings under Chapter 11 of the Bankruptcy Code. The total amount contributed by PSNH until then was $976,000. The total amount contributed by CL&P was $265,000.
As part of an agreement to resolve issues raised during the bankruptcy of PSNH, PSNH agreed that it or its designee would purchase the VEG&T 0.41259 percent interest in Seabrook for approximately $6.4 million. NAEC, the current owner of PSNH's ownership share in Seabrook, agreed to purchase the interest and to enter into a separate power contract with PSNH, under which PSNH would be obligated to buy from NAEC all of the capacity and output of Seabrook attributable to such interest for a period equal to the length of the NRC full power operating license for Seabrook. On January 7, 1994, the NRC approved the transfer of VEG&T's ownership share of Seabrook to NAEC. All other regulatory approvals for NAEC's purchase were received and the acquisition became effective on February 15, 1994. In settlement of their claims against VEG&T for advances, PSNH and CL&P received payment of the amounts advanced, $1.78 million and $390,000, respectively, out of proceeds of the sale, with interest thereon, for the period each advance was outstanding at the prime rate. See "Rates-New Hampshire Retail Rates-Memorandum of Understanding" and "Rates-New Hampshire Retail Rates-Seabrook Power Contract" for further information on NAEC's acquisition of VEG&T's share of Seabrook.
In 1989, as part of a comprehensive settlement of Seabrook issues, PSNH agreed to make certain payments totaling $16 million to Massachusetts Municipal Wholesale Electric Company during the first eight years of Seabrook operation. As of December 31, 1993, PSNH had made approximately $7.2 million of these payments.
YANKEE UNITS
CY, the nuclear unit owned by MYAPC (MY) and the nuclear unit owned by VYAPC (VY) operated in 1993 at capacity factors of 73.1 percent, 74.3 percent and 74.1 percent, respectively, based on normal winter claimed capability.
Yankee Rowe has not operated since October 1991.
CY. As of December 31, 1993, CY, since it began commercial operation in 1968, had generated over 99 billion kWh (gross) of electricity, making it one of the most productive nuclear generating units in the United States.
The unit completed, on schedule, a 66-day refueling and maintenance outage that began on May 15, 1993. The second reload of fuel clad with zircalloy was installed during this outage to replace the stainless steel clad fuel. There is one more phase to this upgrade project that, when completed, will make the operation of the reactor core more economical by allowing longer operating cycles. CY's next refueling and maintenance outage is scheduled to begin on November 12, 1994 and is expected to last 54 days. Major work activities will include auxiliary feedwater system modifications and motor-operated valve testing. The start date and length of this refueling outage may be impacted by an unplanned shutdown which occurred on February 12, 1994, when the plant was required to come off line to address integrity concerns in the safety-related service water system. CYAPC is reviewing the scope of work required and schedule for returning the unit to service from the unplanned outage.
In October 1992, CYAPC filed an application with the FERC for wholesale rate relief. CYAPC requested the increase to become effective on January 1, 1993. The filing requested an increase in estimated decommissioning cost collections from $130 million to $309.1 million (in July 1992 dollars) and also proposed to adjust decommissioning accruals automatically on an annual basis beginning January 1, 1993. In December 1992, FERC accepted CYAPC's increased rates for filing, to become effective on June 1, 1993, subject to refund, and rejected the proposal to automatically adjust decommissioning accruals. A settlement between all the parties was reached in 1992 and was accepted by FERC in 1993. This included an accrual level for decommissioning of $294.2 million in 1992 dollars and an automatic increase of 5.5% annually in the decommissioning accrual for each of the next five years.
MY. MY began a refueling and maintenance outage on July 31, 1993 and completed it in 75 days. During the outage, repairs were made to the reactor vessel thermal shield.
VY. VY began a refueling and maintenance outage on August 27, 1993, and completed it in 59 days, including recovery from a dropped fuel bundle that suspended fuel movement for approximately 20 days.
Yankee Rowe. In February 1992, YAEC's owners voted to shut down Yankee Rowe permanently and to begin preparations for an orderly decommissioning of the facility. The decision to close the generating plant eight years before the end of its operating license was based on an economic evaluation of the cost of a proposed safety review, the reduced demand for electricity in New England, the price of alternative energy sources and uncertainty about the regulatory requirements that the unit would need to meet in order to restart.
See "Electric Operations-Nuclear Generation-Operations-Decommissioning" for information on YAEC's filing with FERC to collect for shutdown and decommissioning costs and the recovery of the remaining investment in the Yankee Rowe plant.
The power contracts between CL&P, PSNH and WMECO and YAEC permit YAEC to recover from each its proportional share of these costs from CL&P, PSNH and WMECO. Management believes that, although Yankee Rowe was shut down eight years before the end of the unit's current license, CL&P, PSNH and
WMECO will recover their investments in YAEC, along with any other costs associated with the shutdown and decommissioning of Yankee Rowe. Accordingly,
the System has recognized these costs as a regulatory asset on its consolidated balance sheet and as a corresponding obligation to YAEC.
NRC REGULATION
As holders of licenses to operate nuclear reactors, CL&P, PSNH, WMECO, NAEC, North Atlantic, NNECO and the Yankee companies are subject to the jurisdiction of the NRC. The NRC has broad jurisdiction over the design, construction and operation of nuclear generating stations, including matters of public health and safety, financial qualifications, antitrust considerations and environmental impact.
In its latest Systematic Assessment of Licensee Performance Report (SALP report) issued on October 19, 1993, the NRC gave the three Millstone nuclear plants a Category 1 rating in the area of radiological controls and a Category 2 rating in five of the seven areas rated: plant operations, maintenance/surveillance, emergency preparedness, security and engineering/technical support. The Millstone units received a Category 3 rating in the area of safety assessment/quality verification. Category 1 indicates "a superior level of performance," Category 2 indicates "a good level of performance" and Category 3 denotes "an acceptable level of performance." The evaluation covered plant activities for the period February 16, 1992 through April 3, 1993. Management expects to continue to improve performance, thereby raising these scores.
The NRC issued its latest SALP report for Seabrook 1 on November 18, 1993. The report covered the interval from March 1, 1992 through August 28, 1993. This report reflects the recent revisions to the SALP program in which the number of functional evaluation areas has been reduced from seven to four: plant operations, maintenance, engineering and plant support. The evaluation rated Seabrook 1 a Category 1 in the engineering and plant support areas. In the areas of plant operations and maintenance, the unit was rated a Category 2.
The NRC issued its latest SALP report for CY on May 21, 1993. The report covered the interval from July 14, 1991 through January 9, 1993. This evaluation recognized the superior performance of CY by awarding the unit a Category 1 in six of the seven areas rated: plant operations, emergency preparedness, security, engineering/technical support, safety assessment/quality verification and radiological controls. In the final area, maintenance/surveillance, CY was rated as a Category 2.
Despite the overall improved performance of the Millstone units, there were a number of regulatory enforcement actions taken by the NRC in 1993. On May 4, 1993, the NRC issued to NNECO a Notice of Violation (NOV) identifying two potential violations. The first violation concerned NRC findings that a former employee was subjected to harassment and intimidation in 1989 for raising a nuclear safety concern and that senior management was not effective in dealing with the situation. The second violation involved NRC concerns that an employee may have deliberately delayed the processing of a contemplated substantial safety hazard evaluation conducted to fulfill the requirements of federal law. Following NNECO's response to the NOV, the NRC withdrew the second violation. To resolve this matter, NNECO paid a fine of $100,000 in connection with the first violation.
On August 5, 1993, Millstone Unit 2 was shut down by plant personnel after extensive efforts to repair a leaking primary system valve proved
unsuccessful, and a sudden increase in the leak rate was experienced. Following replacement of the damaged valve, the unit was returned to service on August 16, 1993. Recognizing the seriousness of this event and the potentially severe consequences of the failed repair efforts, NNECO performed a detailed evaluation of this event to consider potential deficiencies and identify the actions needed to prevent recurrence. The NRC also conducted a special investigation of this event and on September 22, 1993, identified to NNECO three apparent violations, related to work control planning and implementation, which were being considered for escalated enforcement. On December 3, 1993, the NRC informed NNECO that it was imposing a civil penalty of $237,500 for the three violations. NNECO has since paid the fine.
On September 10, 1993, NNECO was informed by the NRC that, as a result of an investigation by the NRC Office of Investigation and a routine safety inspection of the Millstone Unit 1 nuclear power plant, two apparent violations arising from 1989 events were being considered for possible civil monetary penalties. The first issue concerned the alleged failure to initiate and perform a required engineering analysis to determine the operability of safety-related system in a timely manner. The second issue relates to allegations that the engineer who identified the system as being potentially inoperable was harassed and discriminated against in retaliation for the findings of his technical evaluations. These matters were investigated between early 1992 and June 1993 by a grand jury acting under the direction of the U.S. Attorney's Office in Bridgeport, Connecticut. The U.S. Attorney's office issued a letter on June 30, 1993, stating that no prosecutorial action would be initiated. On March 17, 1994, the NRC informed NNECO that further enforcement action with respect to this matter was not planned, because their review had determined that there was insufficient evidence to support the apparent violations.
On September 20, 1993, the NRC issued to NNECO an NOV concerning two violations at the Millstone Station identified during its evaluation of the licensed operator requalification training (LORT) program. The first violation concerned an inspection finding that various licensed operators at Millstone 1 and 2 did not fully complete the LORT program for the 1991 and 1992 training periods. The second violation cited the failure of NNECO's internal nuclear review board to perform comprehensive audits of the training, retaining, requalification, and performance of the operations staff at Millstone 2 and 3. NNECO chose not to contest the violations nor the imposition of a $50,000 civil penalty.
On December 15, 1993, the NRC issued an inspection report concerning the SLCRS and ABVS systems deficiencies that were identified during the 1993 Millstone 3 refueling outage. The report identified two apparent violations that are being considered for escalated enforcement. The apparent violations involve the inability of the systems to provide the necessary drawdown of secondary containment following a postulated accident and NNECO's failure to fully resolve these problems earlier, as a result of previous similar violations identified in September 1992. On March 11, 1994, the NRC notified NNECO that it proposed to impose a civil penalty of $50,000 in respect of these violations. NNECO has 30 days to respond to the NRC.
In January 1994, the NRC issued a report finding that the overall Millstone 1 operator requalification training program was satisfactory. The NRC had previously found the program to be unsatisfactory. The recent conclusion was based on the results of a number of NRC inspections and the operator examinations conducted in September 1993. The NRC reviewed NNECO's corrective actions and determined that all actions necessary to obtain and maintain a satisfactory requalification training program had been completed
and verified.
INDUSTRY-WIDE NUCLEAR ISSUES
The NRC regularly conducts generic reviews of technical and other issues, a number of which may affect the nuclear plants in which System companies have interests. Issues currently under review include individual plant examination programs to evaluate the likelihood and effects of severe accidents at operating nuclear plants, pipe crack phenomena, post-accident measures for controlling hydrogen, reactor vessel embrittlement, upgrading of emergency response facilities and communications, the ability of plants to cope with a total loss of power, emergency response planning, fitness for duty policies, operator requalification training, reactor containment suitability, maintenance adequacy, motor-operated valve testing, design basis reconstitution, diesel generator reliability, life extension, equipment procurement, electrical distribution system adequacy, reactor coolant pump seal integrity, plant risk during shutdown and low power operation, technical specification improvements, accident management, component aging, steam generator degradation phenomena, service water system adequacy, seismic qualification of equipment and other issues. At present, the outcome of the NRC's reviews of these and other technical issues, and the ways in which the different nuclear plants in which System companies have interests may be affected, cannot be determined. The cost of complying with any new requirements that may result from these reviews cannot be estimated at this time, but such costs could be substantial. Further, the NRC is currently evaluating a staff report on the reporting of nuclear safety concerns, which may result in changes in the way such concerns are addressed. The NRC has authorized the conduct of various regulatory activities designed to lower costs to its licensees while maintaining or improving public safety.
Public controversy concerning nuclear power could affect the nuclear units in which System companies have ownership interests. Over the past decade, proposals to force the premature shutdown of nuclear units have become issues of serious and recurring attention in Maine, Massachusetts, Vermont and New Hampshire. States' efforts to deal with the siting of low level radioactive waste repositories have also stimulated negative reactions in communities being considered for those facilities. The continuing controversy about nuclear power may affect the cost of operating the nuclear units in which System companies have interests.
While much of the public policy debate about nuclear power has been critical in the past, some trends in the energy environment have stimulated renewed support for nuclear power in the northeastern United States. Among these trends are the growing national environmental concerns and legislation about acid rain, air quality and global warming associated with fossil fuels.
These concerns particularly affect the densely populated areas in the Northeast, downwind of coal-burning regions like the Midwest and mid-Atlantic states. In addition, at times when the price and availability of fuel oil have been volatile, the System's commitment to nuclear power has allowed it to minimize the oil-related rise in customers' bills. While the public controversy about nuclear power is not expected to disappear, recent trends suggest a more balanced public policy debate about the impacts of fossil fuel generation as well.
NUCLEAR INSURANCE
The NRC's nuclear property insurance rule requires nuclear plant licensees to obtain a minimum of $1.06 billion in insurance coverage. The
rule requires that, although such policies may provide traditional property coverage, proceeds from the policy following an accident in which estimated stabilization and decontamination expenses exceed $100 million will first be applied to pay such expenses. The insurance carried by the licensees of the Millstone units, Seabrook 1, CY, MY and VY meets the requirements of this rule. YAEC has obtained an exemption for the Yankee Rowe plant from the $1.06 billion requirement and currently carries $25 million of insurance that otherwise meets the requirements of the rule.
The Price-Anderson Act currently limits public liability from a single incident at a nuclear power plant to $9.4 billion. The first $200 million of liability would be provided by purchasing the maximum amount of commercially available insurance. Additional coverage of up to $8.8 billion would be provided by an assessment of $75.5 million per incident, levied on each of the 116 United States nuclear units that are currently subject to the secondary financial protection program, subject to a maximum assessment of $10 million per incident per nuclear unit in any year. In addition, if the sum of all public liability claims and legal costs arising from any nuclear incident exceeds the maximum amount of financial protection, each reactor operator can be assessed an additional five percent, up to $3.8 million or $437.9 million in total for all 116 reactors. The maximum assessment is to be adjusted for inflation at least every five years.
Based on CL&P's, PSNH's and WMECO's ownership interests in the three Millstone units and CL&P's and NAEC's interests in Seabrook 1, the System's current maximum direct liability would be $244.2 million per incident. In addition, through CL&P's, PSNH's and WMECO's power purchase contracts with the four Yankee regional nuclear electric generating companies, the System would be responsible for up to an additional $97.9 million per incident. These payments would be limited to a maximum in any year of $43.2 million per incident.
Insurance has been purchased from Nuclear Electric Insurance Limited (NEIL) to cover: (1) certain extra costs incurred in obtaining replacement power during prolonged accidental outages with respect to CL&P's and WMECO's ownership interests in Millstone 1, 2, 3, and CY, CL&P's ownership interest in Seabrook, and PSNH's Seabrook Power Contract with NAEC; and (2) the cost of repair, replacement, or decontamination or premature decommissioning of utility property resulting from insured occurrences with respect to CL&P's ownership interests in Millstone 1, 2, 3, CY, MY, VY, and Seabrook 1; WMECO's ownership interests in Millstone 1, 2, 3, CY, MY, and VY; PSNH's ownership interest in Millstone 3, CY, MY and VY; and NAEC's ownership interest in Seabrook 1. All companies insured with NEIL are subject to retroactive assessments if losses exceed the accumulated funds available to NEIL. The maximum potential assessments against CL&P, PSNH, WMECO, and NAEC with respect to losses arising during current policy years are approximately $13.9 million under the replacement power policies and $29.9 million under the property damage, decontamination, and decommissioning policies. Although CL&P, PSNH, WMECO, and NAEC have purchased the limits of coverage currently available from the conventional nuclear insurance pools, the cost of a nuclear incident could exceed available insurance proceeds.
Insurance has been purchased from American Nuclear Insurers/Mutual Atomic Energy Liability Underwriters, aggregating $200 million on an industry basis, for coverage of worker claims. All companies insured under this coverage are subject to retrospective assessments of $3.2 million per reactor. The maximum potential assessments against CL&P, PSNH, WMECO, and NAEC with respect to losses arising during the current policy period are approximately $13.9 million.
CYAPC expects that it will receive an insurance recovery for costs related to the CY thermal shield repair which occurred during the 1987 outage, and the removal which occurred during the 1989 outage, but the amount and time of payment are not certain. See "Rates-Connecticut Retail Rates-Adjustment Clauses."
NUCLEAR FUEL
The supply of nuclear fuel for the System's existing units requires the procurement of uranium concentrates, followed by the conversion, enrichment and fabrication of the uranium into fuel assemblies suitable for use in the System's units. These materials and services are available from a number of domestic and foreign sources. The System companies have predominantly relied on long term contracts with both domestic and foreign suppliers, supplemented with short term contracts and market purchases, to satisfy the units' requirements. Although the System has increased the use of foreign suppliers, domestic suppliers still provide the majority of the materials and services. The System companies have maintained diversified sources of supply, relying on no single source of supply for any one component of the fuel cycle, with the exception of enrichment services of which the majority of the System companies' requirements are provided under a long term contract with the U.S. Enrichment Corporation, a wholly-owned government corporation, established on July 1, 1993, in accordance with the Energy Policy Act and the successor to the U.S. DOE Uranium Enrichment Enterprise. The System expects that uranium concentrates and related services for the units operated by the System and for the other units in which the System companies are participating, that are not covered by existing contracts, will be available for the foreseeable future on reasonable terms and prices.
As a result of the Energy Policy Act, the U.S. utility industry is required to pay to the DOE, via a special assessment for the costs of the decontamination and decommissioning of uranium enrichment plants operated by the DOE, $150 million each U.S. Government fiscal year for 15 years beginning in 1993. Each domestic utility will make a payment proportioned on its past purchases from the DOE's Uranium Enrichment Enterprise. Each year, the DOE will adjust the annual assessment using the Consumer Price Index. The Energy Policy Act provides that the assessments are to be treated as reasonable and necessary current costs of fuel, which costs shall be fully recoverable in rates in all jurisdictions. The System's total share of the estimated assessment was approximately $56.7 million. Management believes that the DOE assessments against CL&P, WMECO, PSNH and NAEC will be recoverable in future rates. Accordingly, each of these companies has recognized these costs as regulatory asset, with corresponding obligation on its balance sheet.
Costs associated with nuclear plant operations include amounts for disposal of nuclear wastes, including spent fuel, and for the ultimate decommissioning of the plants. The System companies include in their nuclear fuel expense spent fuel disposal costs accepted by the DPUC, the NHPUC and the DPU in rate case or fuel adjustment decisions. Spent fuel disposal costs are also reflected in wholesale charges. Such provisions include amortization and recovery in rates of previously unrecovered disposal costs of accumulated spent nuclear fuel.
HIGH-LEVEL RADIOACTIVE WASTES
Under the Nuclear Waste Policy Act of 1982, the DOE is required to design, license, construct and operate a permanent repository for high level
radioactive wastes and spent nuclear fuel. The act requires the DOE to provide, beginning in 1998, for the disposal of spent nuclear fuel and high level radioactive waste from commercial nuclear plants through contracts with the owners and generators of such waste. The System companies have entered into such contracts with the DOE with respect to Millstone 1, 2 and 3 and Seabrook 1, and have been advised that the Yankee companies have entered into similar contracts.
The DOE has established disposal fees to be paid to the federal government by electric utilities owning or operating nuclear generating units. The System companies have been paying for such services for fuel burned starting in April 1983 on a quarterly basis since July 1983 in accordance with the contracts; the DPUC, the NHPUC and the DPU permit the fee to be recovered through rates.
The disposal fee for fuel burned before April 1983 (previously burned fuel) is determined in accordance with a fee structure based on fuel burnup. Under the contract payment option selected, the System companies anticipate making payment to the DOE for disposal of previously burned fuel just before the first delivery of spent fuel to the DOE. That payment obligation is not a funded obligation. The liability under the selected payment option for previously burned fuel, including interest, through December 31, 1993, and the amounts recovered through rates for previously burned fuel through the end of 1993 for Millstone 1 and 2, are as follows:
Previously Burned Fuel Liability, Amounts Recovered for Previously
Including Interest, Thru 12/31/93 Burned Fuel Thru 12/31/93
(Millions)
CL&P $136.1 $134.5
WMECO 31.9 32.3
Total $168.0 $166.8
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Because Millstone 3 and Seabrook 1 went into service after 1983, there is no previously burned fuel liability for those units.
In return for payment of the fees prescribed by the Nuclear Waste Policy
Act, the federal government is to take title to and dispose of the utilities'
high level wastes and spent nuclear fuel beginning no later than 1998. Until
the federal government begins receiving such materials, operating nuclear
generating plants will need to retain high-level wastes and spent fuel on-site
or make some other provisions for their storage. With the addition of new
storage racks or through fuel consolidation, storage facilities for Millstone
3 and CY are expected to be adequate for the projected life of the units. With
the storage facilities for Millstone 1 and 2 are expected to be adequate
(maintaining the capacity to accommodate a full-core discharge from the reactor)
until 2000. Fuel consolidation, which has been licensed for Millstone 2, could
provide adequate storage capability for the projected lives of Millstone 1 and
2. In addition, other licensed technologies, such as dry storage casks or
on-site transfers, are being considered to accommodate spent fuel storage
requirements. With the addition of new racks, Seabrook 1 is expected to have
spent fuel storage capacity until at least 2010.
Under the terms of a license amendment approved by the NRC in 1984, MY's present storage capacity of the spent fuel pool at the unit will be reached in 1999, and after 1996 the available capacity of the pool will not accommodate a full-core removal. After consideration of available technologies, MYAPC elected to provide additional capacity by replacing the fuel racks in the spent fuel pool at the unit and, on January 25, 1993, filed with the NRC seeking authorization to implement the plan. MYAPC believes
that the replacement of the fuel racks, if approved, will provide adequate storage capacity through the unit's licensed operating life. While no intervention has occurred, MYAPC cannot predict with certainty whether the NRC authorization will be granted or whether or to what extent the storage capacity limitation at the unit will affect the operation of the unit or the future cost of disposal.
Under the terms of a license amendment approved by the NRC in 1991, the storage capacity of the spent fuel pool at VY is expected to be reached in 2003, and the available capacity of the pool is not expected to be able to accommodate a full-core removal after 1998.
Because the Yankee Rowe plant was permanently shut down effective February 26, 1992, YAEC is planning to construct a temporary facility to store the spent nuclear fuel produced by the Yankee Rowe plant over its operating lifetime until that fuel is removed by the DOE. See "Electric Operations - Nuclear Generation - Decommissioning" for further information on the closing and decommissioning of Yankee Rowe.
LOW-LEVEL RADIOACTIVE WASTES
Disposal costs for low-level radioactive wastes (LLRW) have continued to rise in recent years despite significant reductions in volume. Approximately $7.65 million was spent on LLRW disposal for the Millstone units and CY in 1993.
In accordance with the provisions of the federal Low-Level Radioactive Waste Policy Act of 1980, as amended (the Waste Policy Act), on December 31, 1992 the disposal site at Beatty, Nevada closed, and the Richland, Washington facility closed to disposal of LLRW from outside its compact region. During 1992, the Barnwell, South Carolina site announced its intention to remain open for disposal of out-of-region LLRW until June 30, 1994. In November 1992, the Northeast Compact commission entered into an agreement with the Southeast Interstate Low-Level Radioactive Waste Management Compact (the Southeast Compact) commission providing for continued access to the Barnwell facility until June 30, 1994 by Connecticut LLRW generators, and the System agreed to pay, in addition to disposal fees, an access fee of $220 per cubic foot, with a minimum of $4.73 million, for the right to dispose of LLRW at Barnwell during this period.
The Connecticut Hazardous Waste Management Service (the Service), a state quasi-public corporation, is charged with coordinating the establishment of a facility for disposal of LLRW originating in Connecticut. In June 1991, the Service announced that it had selected three potential sites in north-central Connecticut for further study. The Service's announcement provoked intense controversy in the affected municipalities and resulted in legislative action to stop the selection process. On February 1, 1993, the Service presented the legislature with a new site selection plan under which communities are urged to volunteer a site for a facility in return for financial and other incentives. The volunteer process is being continued in 1994. The Service's activities in this regard are funded by assessments on Connecticut's LLRW generators. The System was assessed approximately $1.8 million for the state's 1992-1993 fiscal year. Due to the change to a volunteer process, there was no assessment for the 1993-1994 fiscal year and the state projects no assessment for the 1994-1995 and 1995-1996 fiscal years.
The System has plans to acquire or construct additional LLRW storage capacity at the Millstone and CY sites to provide for temporary storage of LLRW should that become necessary. The System can manage its Connecticut LLRW by volume reduction, storage or shipment at least through 1999. Management cannot predict whether and when a disposal site will be designated in Connecticut.
Since January 1, 1989, the State of New Hampshire has been barred from shipping Seabrook LLRW to the operating disposal facilities in South Carolina, Nevada and Washington for failure to meet the milestones required by the Waste Policy Act. Seabrook 1 has never shipped LLRW but has capacity to store at least five years' worth of the LLRW generated on-site, with the capability to expand this on-site capacity if necessary. The Seabrook station accrued approximately $1.3 million in off-site disposal costs in 1993. New Hampshire is pursuing options for out-of-state disposal of LLRW generated at Seabrook.
Massachusetts and Vermont have arranged for continued access to the Barnwell facility until mid-1994 for the nuclear waste generators in their states. YAEC is currently disposing of its LLRW at the Barnwell facility. MY has been storing its LLRW on-site since January 1993. VY and MY each has on-site storage capacity for at least five years' production of LLRW from its respective plants. Maine and Vermont are in the process of finalizing an agreement with the state of Texas to provide access to a facility that will be developed in that state.
DECOMMISSIONING
The System's most recent comprehensive site-specific updates of the decommissioning costs for each of the three Millstone units were completed in 1992 and for Seabrook was completed in 1991. The recommended decommissioning method reflected in the cost estimates continues to be immediate and complete dismantlement of those units at their retirement. The table below sets forth the estimated Millstone and Seabrook decommissioning costs for the System companies. The estimates are based on the latest site studies, escalated to December 31, 1993 dollars, and include costs allocable to NAEC's share of Seabrook recently acquired from VEG&T.
CL&P PSNH WMECO NAEC NU System
(Millions)
Millstone 1 $312.5 $ - $ 73.3 $ - $385.8
Millstone 2 251.0 - 58.9 - $309.9
Millstone 3 223.0 12.0 51.6 - 286.6
Seabrook 1 14.9 - - 131.7 146.6
Total $801.4 $12.0 $183.8 $131.7 $1,128.9
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Pursuant to Connecticut law, CL&P has periodically filed plans with the DPUC for financing the decommissioning of the three Millstone units. In 1986, the DPUC approved the establishment of separate external trusts for the currently tax-deductible portions of decommissioning expense accruals for Millstone 1 and 2 and for all expense accruals for Millstone 3. In its 1993 CL&P multi-year rate case decision, the DPUC allowed CL&P's full decommissioning estimate for the three Millstone units to be collected from customers. This estimate includes an approximately 16 percent contingency factor for each unit. The estimated aggregate cost of decommissioning the Millstone units is $1.1 billion in December 1993 dollars.
WMECO has established independent trusts to hold all decommissioning expense collections from customers. In its 1990 WMECO multi-year rate case decision, the DPU allowed WMECO's decommissioning estimate for the three
Millstone units ($840 million in December 1990 dollars) to be collected from customers. Due to the settlement in the 1992 WMECO rate case, the aggregate decommissioning estimate for the three Millstone units remains unchanged.
The decommissioning cost estimates for the Millstone units are reviewed and updated regularly to reflect inflation and changes in decommissioning requirements and technology. Changes in requirements or technology, or adoption of a decommissioning method other than immediate dismantlement, could change these estimates. CL&P, PSNH and WMECO attempt to recover sufficient amounts through their allowed rates to cover their expected decommissioning costs. Only the portion of currently estimated total decommissioning costs that has been accepted by regulatory agencies is reflected in rates of the System companies. Although allowances for decommissioning have increased significantly in recent years, ratepayers in future years will need to increase their payments to offset the effects of any insufficient rate recoveries in previous years.
New Hampshire enacted a law in 1981 requiring the creation of a state-managed fund to finance decommissioning of any units in that state. In 1992, the New Hampshire Nuclear Decommissioning Financing Committee (NDFC) established approximately $323 million (in 1991 dollars) as the decommissioning cost estimate for immediate and complete dismantlement of Seabrook 1 upon its retirement. On March 10, 1993, FERC approved this estimate. The estimated total decommissioning cost for Seabrook 1 is $366 million in December 1993 dollars.
The NHPUC is authorized to permit the utilities subject to its jurisdiction that own an interest in Seabrook 1 to recover from their customers on a per-kilowatt-hour basis amounts paid into the decommissioning fund over a period of years. NAEC's costs for decommissioning are billed by it to PSNH and recovered by PSNH under the Rate Agreement. Under the Rate Agreement, PSNH is entitled to a base rate increase to recover increased decommissioning costs. See "Rates - New Hampshire Retail Rates" for further information on the Rate Agreement.
North Atlantic submitted its annual update of the 1991 Decommissioning Study and Funding Schedule to the NDFC on March 31, 1993. It included an updated estimate for the prompt removal and dismantling of Seabrook station in 2026 at the end of licensed life and a review of the assumptions on inflation and rate-of-return on fund investments used to develop the joint owner contribution schedule. North Atlantic concluded that the 1991 estimate, escalated in accordance with these assumptions to 1993 dollars, is still valid. Although a schedule has not been set by the NDFC, public hearings on the decommissioning estimate and funding schedule will probably be held in the third quarter of 1994.
The new Investment Guidelines for the Seabrook Nuclear Decommissioning Financing Fund, which were approved by the New Hampshire State Treasurer and would have gone into effect on November 1, 1993, have been put on hold by a recent decision of FERC. The October 20, 1993 FERC order effectively reinstated the so-called "black lung" investment restrictions on decommissioning funds subject to its jurisdiction, although Congress, in the Energy Policy Act, had repealed the IRS regulation which mandated them. Under these restrictions, investments are limited to public debt securities that are fully backed by the U.S. government, tax exempt obligations of state or local governments and time deposits with a bank or insured credit union. The new guidelines would allow equity holdings by the joint owners of Seabrook, beginning with a limit of 10 percent in 1994 and gradually increasing to a limit of 40 percent in 1997. The strategies also call for a gradual reduction in the equity position as the plant approaches the end of
its licensed life. Implementation of new investment guidelines for the Millstone units and CY have also been delayed because of the FERC decision. The System is party to petitions filed with FERC in November 1993, seeking reconsideration of the FERC decision.
As of December 31, 1993, the balances (at cost) in the external decommissioning trust funds were as follows:
Millstone 1 Millstone 2 Millstone 3 Seabrook 1
(Millions of Dollars)
CL&P........... $70.4 $45.5 $30.9 $ .9
PSNH........... * * 1.5 *
WMECO.......... 24.0 16.5 8.6 *
NAEC........... * * * 7.9
_____ _____ _____ ____
Total........ $94.4 $62.0 $41.0 $8.8
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*PSNH has no ownership interest in the Millstone 1 and 2 units. WMECO has no ownership interest in Seabrook 1. NAEC's only ownership interest is in Seabrook 1.
YAEC, MYAPC, VYNPC and CYAPC are all collecting revenues for decommissioning from their power purchasers. The table below sets forth the estimated decommissioning costs of the Yankee units for the System companies.
The estimates are based on the latest site studies, escalated to December 31, 1993 dollars. For information on the equity ownership of the System companies in each of the Yankee units, see "Electric Operations - Nuclear Generation - General."
CL&P PSNH WMECO NU System
(Millions)
CY $117.3 $17.0 $32.3 $166.6
MY 38.8 16.2 9.7 64.7
VY * * * *
Yankee Rowe 68.7 19.6 19.6 107.9
______ _____ _____ ______
Total $255.3 $65.6 $69.6 $390.5
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*VYNPC is currently reestimating the cost of decommissioning VY. Based on recent estimates for comparable units, the projected cost is expected to fall into the $300 - $350 million range. The System's share of these costs is expected to be between $48 million and $56 million. The results of the VYNPC study are expected to be available in the spring of 1994.
In June 1992, YAEC filed a rate filing to obtain FERC authorization for an increase in rates to cover the costs of closing and decommissioning the Yankee Rowe plant and for the recovery of the remaining investment in the unit over the remaining period of its NRC operating license. At December 31, 1993, the System's share of these estimated costs was approximately $132.8 million. A settlement agreement among YAEC, the FERC staff and intervenors to the FERC proceeding addressing all issues has been filed with and accepted by FERC. YAEC has submitted its decommissioning plan to the NRC for approval.
Due to the unexpected continued availability of the low level waste disposal facility in Barnwell, South Carolina, YAEC requested NRC permission to use decommissioning funds prior to final NRC approval of the complete
plan. On April 16, 1993, the NRC approved YAEC's request to use funds for removal of the steam generators, pressurizer and reactor internals. By December 31, 1993, all major components were successfully disposed of at Barnwell and only a small number of internals shipments remain to be made.
YAEC will continue its dismantling of the plant in 1994. The NRC's review of the decommissioning plan is expected to be completed by December
31, 1994 at which time YAEC will, depending upon the availability of a low level waste site, move to completely dismantle the facility.
CYAPC accrues decommissioning costs on the basis of immediate dismantlement at retirement. The most current estimated decommissioning cost, based on a 1992 study, is approximately $339.9 million in year-end 1993 dollars. As a result of a 1987 study approved by FERC, CYAPC has been accruing expenses based on an estimated decommissioning level of $130 million. On October 30, 1992, CYAPC filed with FERC a proposed change in rates to recover the increase in estimated decommissioning costs. On May 11, 1993, FERC approved a settlement agreement allowing a decommissioning estimate of $294.2 million (in July 1992 dollars) to be recovered in rates effective June 1, 1993. See "Electric Operations - Nuclear Generation - Operations - Yankee Units."
In 1984, CYAPC established an independent irrevocable decommissioning trust fund, which was modified for tax purposes in 1987 to create two trusts.
Each month, CYAPC's sponsors are billed for their proportionate share of decommissioning expense as allowed by FERC and payments are made directly to the trust. The combined balance of the trusts at December 31, 1993 was $137.8 million. The trust balances must be used exclusively to discharge decommissioning costs as incurred.
MYAPC estimates the cost of decommissioning MY at $323.7 million in December 31, 1993 dollars based on a study completed in July 1993.
NON-UTILITY BUSINESSES
GENERAL
In addition to its core electric utility businesses in Connecticut, New
Hampshire and Massachusetts, in recent years the System has begun a
diversification of its business activities into two energy-related fields:
private power development and energy management services.
PRIVATE POWER DEVELOPMENT
In 1988, NU organized a new subsidiary corporation, Charter Oak, through
which the System participates as a developer and investor in domestic and
international private power projects. With the passage of the Energy Policy
Act, Charter Oak can invest in cogeneration and small power production (SPP)
facilities anywhere in the world. This legislation also expands Charter
Oak's permissible involvement in exempt wholesale generators (EWGs) to
include development, construction and ownership. Management currently does
not permit Charter Oak to invest in facilities which are located within the
System service territory or to sell its electric output to any of the System
electric utility companies. For a discussion of certain highlights of the
Energy Policy Act relating to EWGs, see "Regulatory and Environmental Matters
- - Public Utility Regulation."
Under the Public Utility Regulatory Policies Act of 1978 (PURPA), as a subsidiary of an electric utility holding company, Charter Oak is effectively limited to no more than 50 percent ownership in a QF within the United States. To work within this constraint, Charter Oak has made strategic alliances with several experienced developers to pursue development opportunities. Through these relationships, Charter Oak is pursuing development opportunities nationwide and internationally.
Although Charter Oak has no full-time employees, eight NUSCO employees are dedicated to Charter Oak activities on a full-time basis. Other NUSCO employees provide services as required.
Charter Oak owns, through a wholly-owned special purpose subsidiary, a ten percent equity interest in a 220 MW natural gas-fired combined cycle cogeneration QF in Texas which provides steam to Campbell Soup Company's Paris, Texas manufacturing facility and electricity to Texas Utilities Electric Company. Charter Oak also owns 56 MW of the 1,875 MW Teesside natural gas-fired cogeneration facility in the United Kingdom. Charter Oak is pursuing other project development opportunities in both the domestic and international markets with a combined capacity over 1,000 MW. Charter Oak is currently participating in the development stage of projects in Texas, the West Coast, the Midwest, Latin America and the Pacific Rim.
NU's total investment in Charter Oak was approximately $23.0 million as of December 31, 1993. NU, Charter Oak and its subsidiary, Charter Oak Energy Development, have received approval from the SEC to increase NU's authorized investment in Charter Oak to up to $100 million and to increase Charter Oak's authorized investment in COE Development to up to $100 million for preliminary development activities in QFs, IPPs, EWGs and foreign utility companies.
ENERGY MANAGEMENT SERVICES
In 1990, NU organized a new subsidiary corporation, HEC, which acquired substantially all of the assets and personnel of an existing, non-affiliated energy management services company. In general, the energy management services that HEC provides are performed for customers pursuant to contracts to reduce the customers' overall energy consumption and reduce energy costs and/or conserve energy resources. HEC also provides demand side management consulting services to utilities. HEC's energy management and consulting services are directed primarily to the commercial, industrial and institutional markets and utilities in New England and New York, although the SEC's order under the 1935 Act that authorized NU to operate HEC also permits HEC to serve customers outside that area, so long as over half of its revenues are attributable to customers in New England and New York.
NU's initial equity investment in HEC was approximately $4 million and NU has made additional capital contributions of approximately $300,000 through March 1, 1994. Under the SEC order authorizing HEC's participation in the Money Pool, HEC may borrow up to $11 million from the Money Pool. At December 31, 1993, HEC had $2.9 million outstanding from its borrowings from the Money Pool.
REGULATORY AND ENVIRONMENTAL MATTERS
PUBLIC UTILITY REGULATION
NU is registered with the SEC as an electric utility holding company under the 1935 Act. Under the 1935 Act, the SEC has jurisdiction over NU and its subsidiaries with respect to, among other things, securities issues, sales and acquisitions of securities and utility assets, intercompany loans, services performed by and for associated companies, accounts and records, involvement in non-utility operations and dividends.
The Energy Policy Act amended the 1935 Act to give registered holding companies, like NU, broadened authority to invest in small power production facilities qualifying under PURPA and to own a new class of IPPs known as EWGs. An EWG is an entity exclusively in the business of owning and/or operating generating facilities that sell electricity at wholesale. EWGs are exempt from most regulation under the 1935 Act. A registered holding company may also invest in foreign utility companies with SEC approval. EWGs, however, are subject to state regulation with respect to siting and financial regulation to prevent cross-subsidies and self-dealing among utilities and affiliated EWGs.
The Energy Policy Act also amended the Federal Power Act to authorize FERC to order wholesale transmission wheeling services, including the enlargement of transmission capacity necessary to provide such services, unless such transmission would unreasonably impair the reliability of the electric systems affected or the utility ordered to provide transmission is unable to obtain necessary governmental approvals or property rights. Rates for transmission ordered under the Energy Policy Act are to be designed to protect the wheeling utilities' existing customers. FERC's authority to order wheeling does not extend to retail wheeling, and FERC may not issue a wheeling order that is inconsistent with state franchise laws.
CL&P is subject to regulation by the DPUC, which has jurisdiction over, among other things, retail rates, accounting procedures, certain dispositions of property and plant, mergers and consolidations, securities issues, standards of service, management efficiency and construction and operation of generation, transmission and distribution facilities. Because of their ownership interests in the Millstone units, PSNH and WMECO are also subject to the jurisdiction of the DPUC with respect to their activities in Connecticut and their securities issues.
PSNH and NAEC are subject to regulation by the NHPUC, which has jurisdiction over retail rates, accounting procedures, certain dispositions of property and plant, quality of service, securities issues, acquisitions of securities of other utilities, mortgages of property, declaration of dividends, contracts with affiliates, management efficiency, construction and operation of generation, transmission and distribution facilities, integrated resource planning and other matters. Although the Seabrook Power Contract between PSNH and NAEC is a wholesale contract subject to the jurisdiction of FERC, pursuant to the terms of the Rate Agreement, the NHPUC has the right to review the prudence of costs incurred by NAEC to determine whether they should be passed on to ratepayers through FPPAC, and the NHPUC and the State of New Hampshire have additional rights and limited jurisdiction over certain other Seabrook Power Contract issues.
NU and its subsidiaries are subject to the general supervision of the NHPUC with respect to all dealings with PSNH and NAEC. Based upon PSNH's ownership of generating and transmission facilities in Maine and transmission
and hydroelectric facilities in Vermont, PSNH is also subject to limited regulatory jurisdiction in those states.
WMECO is subject to regulation by the DPU, which has jurisdiction over retail rates, accounting procedures, quality of service, contracts for the purchase of electricity, mergers, securities issues and other matters. The DPU has adopted regulations that provide for DPU preapproval of utility plant construction, procurement of non-utility generation (QFs and IPPs), and C&LM programs. HWP is subject to regulation by the DPU with respect to certain contracts and quality of service. NU and its subsidiaries are subject to the general supervision of the DPU with respect to all dealings with WMECO and HWP.
CL&P is subject to the jurisdiction of the NHPUC for limited purposes in connection with its ownership interest in Seabrook.
CL&P, PSNH, WMECO, NAEC and HWP are public utilities under Part II of the Federal Power Act and are subject to regulation by the FERC with respect to, among other things, interconnection and coordination of facilities, wholesale rates and accounting procedures.
The System incurs substantial capital expenditures and operating expenses to identify and comply with environmental, energy, licensing and other regulatory requirements, including those described in the following subsections, and it expects to incur additional costs to satisfy further requirements in these and other areas of regulation. Because of the continually changing nature of regulations affecting the System, the total amount of these costs is not determinable.
The System has active auditing programs addressing a variety of legal and regulatory areas, including an environmental auditing program. To the extent it is determined that a System operation or facility is not in full compliance with applicable environmental or other laws or regulations, the System attempts to resolve non-compliance through the auditing response process or other management processes. Compliance with existing and proposed regulations also affects the time needed to complete new facilities or to modify present facilities, and it affects System companies' rates, sales, revenues and net income, all in ways that may be substantial but are not readily calculable.
NRC NUCLEAR PLANT LICENSING
The operators of the Millstone 1, 2 and 3 units, the CY, MY and VY and Seabrook 1 all have full term full power operating licenses from the NRC. The following table sets forth the current license expiration dates for each unit:
Operating License
Unit Expiration Date (*)
Millstone 1 October 6, 2010
Millstone 2 July 31, 2015
Millstone 3 November 25, 2025
Seabrook 1 October 17, 2026
CY June 29, 2007
MY October 21, 2008
VY March 21, 2012
_________________________
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(*) For all units except Seabrook 1 and MY, the current operating
license expires 40 years from the date the operating licensee was issued. The Seabrook license expires 40 years from the date on which the NRC issued a license for the unit to load nuclear fuel, which was about 3 1/2 years before the full power operating license was issued. MY's operating license expires 40 years from the date the construction license was issued, which was about four years before the operating license was issued. The System will determine at the appropriate time whether to seek to recapture these periods and add them to the operating license terms for those units.
YAEC had been working with the NRC on a preliminary analysis to extend the license expiration date for Yankee Rowe from 2000 to 2020, but that effort was suspended when the unit was shut down for evaluation. YAEC received a "possession only" license from the NRC in August 1992. See "Electric Operations - Nuclear Generation - Operations - Yankee Units" for further information on the decision to shut down the Yankee Rowe unit permanently.
Currently the NRC issues 40-year operating licenses to nuclear units. In December 1991, the NRC issued a final rule that establishes the requirements that must be met by an applicant for renewal of a nuclear power plant operating license, the information that must be submitted to the NRC for review, so that the agency can determine whether those requirements have in fact been met, and the application procedures that must be used to obtain an extension of a nuclear plant operating license beyond 40 years. A renewal license may be granted for not more than 20 years beyond the current licensed life. The licensing requirements for a nuclear plant during the renewal term will consist of the plant's current licensing requirements and new commitments to monitor, manage, and correct age-related degradation of plant systems, structures, and components that is unique to the license renewal term but will not encompass the higher licensing standards imposed on new plants. An opportunity for a formal public hearing is provided to permit interested persons to raise contentions on the adequacy of the renewal applicant's proposals to address age-related degradation and compliance with applicable requirements relating to an environmental impact statement. The NRC rule was challenged on antitrust grounds and upheld in the District of Columbia Court of Appeals.
ENVIRONMENTAL REGULATION
GENERAL
The National Environmental Policy Act (NEPA) requires that detailed statements of the environmental effects of major federal actions be prepared by federal agencies. Major federal actions can include licenses or permits issued to the System by FERC, NRC and other federal agencies for construction or operation of generation and transmission facilities. NEPA requires that federal licensing agencies make an independent evaluation of the alternatives and environmental impacts of the proposed actions.
Under Connecticut law, major generation or transmission facilities may not be constructed or significantly modified without a certificate of environmental compatibility and public need from the Connecticut Siting Council (CSC). After public hearings, CSC may issue the certificate, which addresses the public need for the facility and probable environmental impact of the facility and may impose specific conditions for protection of the environment.
In New Hampshire, construction of major new generation or transmission facilities, or sizeable additions to existing facilities, requires a
certificate of site and facility from the New Hampshire Site Evaluation Committee (NHSEC) and NHPUC under the state's energy facility siting law. In addition to review by all state agencies having jurisdiction over any aspect of the construction or operation of the proposed facility, the law requires full review by NHSEC of the environmental impact of the proposed site or route after allowing for public comment and conducting public hearings. Issuance of a certificate requires, among other findings, a finding that the proposed site and facility will not have an unreasonable adverse effect on environmental values.
Massachusetts law requires all state agencies to determine the environmental impact of any projects proposed by private companies requiring state permits, or involving state funding or participation. Massachusetts state agencies are required to make a finding that all feasible measures have been taken to avoid or minimize the environmental impact of the project. In certain instances, Massachusetts law also requires the preparation and dissemination, among various state agencies, of an environmental impact report for the proposed project. Major generation or transmission facilities may not be constructed or significantly modified without approval by the Massachusetts Energy Facilities Siting Board; new transmission facilities also require approval by the DPU.
The System anticipates that additional environmental legislation will be seriously considered by Congress and state legislatures in the coming years. The issues of global warming, air pollution, hazardous waste handling and disposal and water pollution control are receiving a significant amount of public and political attention and are likely areas for federal or state legislative activity in the near future. Until and unless any such legislation is enacted and implementing regulations are issued, the effects on the System cannot be determined. Compliance with environmental laws and regulations, particularly air and water pollution control requirements, may limit operations or require substantial investments in new equipment at existing facilities. Such laws and regulations may also require substantial investments that are not included in the estimated construction budget set forth herein. See "Resource Plans" for a discussion of the System's construction plans.
SURFACE WATER QUALITY REQUIREMENTS
The federal Clean Water Act (CWA) provides that every "point source" discharger of pollutants into navigable waters must obtain a National Pollutant Discharge Elimination System (NPDES) permit from EPA specifying the allowable quantity and characteristics of its effluent. To obtain an NPDES permit, a discharger must meet technology-based and biologically-based effluent standards and must also demonstrate that its effluent will not cause a violation of established standards for the quality of the receiving waters. Connecticut, Massachusetts and New Hampshire regulations contain similar permit requirements and these states can impose more stringent requirements.
All of the System's steam-electric generating plants have NPDES permits in effect. Any of the permits may be reopened to incorporate more stringent regulations adopted by EPA or state environmental agencies. Compliance with NPDES and state water discharge permit requirements has necessitated substantial expenditures and may require further expenditures because of additional requirements that could be imposed in the future.
The CWA requires EPA and state permitting authorities to approve the cooling water intake structure design and thermal discharge of steam-electric generating plants. All System steam-electric plants have received these
approvals. In the renewed discharge permit for the three Millstone nuclear units, issued in 1992, CDEP included a condition requiring a feasibility study of various structural or operational modifications of the cooling water intake system to reduce the entrainment of winter flounder larvae. This study was submitted to CDEP in January 1993 and includes analyses of the costs and benefits of each alternative considered. The costs ranged from $1.8 million to $519 million. The study concluded that the substantial incremental costs of each of the alternatives studied are not justified by the small benefits to the winter flounder population. In a letter dated January 14, 1994, CDEP approved the report requiring only that Millstone station continue efforts to schedule refueling outages to coincide with the period of high winter flounder larvae abundance and that the station continue to monitor the Niantic River winter flounder population in accordance with existing NPDES permit conditions.
Merrimack station's NHDES discharge permit requires site work to isolate adjacent wetlands from the station's waste water system. Plans have been approved by the New Hampshire Department of Environmental Services (NHDES), and PSNH is now preparing a permit application to begin construction. The new permit may require PSNH to perform further biological studies because significant numbers of migratory fish are being restored to lower reaches of the Merrimack River. Should the studies indicate that Merrimack Station's once-through cooling system interferes with the establishment of a balanced aquatic community, PSNH could be required to construct a partially enclosed cooling water system for Merrimack station. The amount of capital expenditures relating to the foregoing cannot be determined at this time. However, if such expenditures were to be required, they would likely be substantial and a reduction of Merrimack station's net generation capability could result.
The ultimate cost impact of the CWA and state water quality regulations on the System cannot be estimated because of uncertainties such as the impact of changes to the effluent guidelines or water quality standards. Additional modifications, in some cases extensive and involving substantial cost, may ultimately be required for some or all of the System's generating facilities.
In response to several major oil spills in recent years, Congress passed the Oil Pollution Act of 1990 (OPA 90). OPA 90 sets out the requirements for facility response plans and periodic inspections of spill response equipment at certain facilities. The requirements apply to facilities that can cause substantial harm or significant and substantial harm to the environment by discharging oil or hazardous substances into the navigable waters of the United States and adjoining shorelines. Pursuant to OPA 90, EPA has authority to regulate non-transportation-related fixed onshore facilities and the Coast Guard has the authority to regulate transportation-related onshore facilities.
Response plans were filed for all System facilities believed to be subject to this requirement. EPA and the Coast Guard have reviewed these plans and accepted the information provided in them as certification of contracted resources for response to a worst case discharge. The Coast Guard expects to complete its review process by February 17, 1995, and EPA by August 18, 1995. Both agencies have authorized continued operation pending final plan approval.
OPA 90 includes limits on the liability that may be imposed on persons deemed responsible for release of oil. The limits do not apply to oil spills caused by negligence or violation of laws or regulations. OPA 90 also does not preempt state laws regarding liability for oil spills. In general, the laws of the states in which the System owns facilities and through which the
System transports oil could be interpreted to impose strict liability for the cost of remediating releases of oil and for damages caused by releases. The System and its principal oil transporter currently carry a total of $890 million in insurance coverage for oil spills.
AIR QUALITY REQUIREMENTS
Under the federal Clean Air Act, EPA has promulgated national ambient air quality standards for certain air pollutants, including sulfur dioxide, particulate matter, nitrogen oxides and ozone. EPA has approved a Connecticut implementation plan prepared by CDEP, a New Hampshire plan prepared by NHDES and a Massachusetts plan prepared by MDEP for the achievement and maintenance of these standards. The Connecticut, New Hampshire and Massachusetts plans impose limits on the amounts of various airborne pollutants that can be emitted from utility boilers.
Under the Clean Air Act, emissions from new or substantially modified sources are limited by new source performance standards and very strict technology-based emission limits.
The Clean Air Act Amendments of 1990 (CAAA) made extensive revisions and additions to the Clean Air Act and imposed many stringent new requirements on air emissions sources. The CAAA contains provisions further regulating emissions of sulfur dioxide (SO2) and nitrogen oxides (NOX) for the purpose of controlling acid rain, toxic air pollutants and other pollutants, requiring installation of continuous emissions monitors (CEMs) and expanding permitting provisions.
Existing and additional federal and state air quality regulations could hinder or possibly preclude the construction of new, or modification of existing, fossil units in the System's service area, could raise the capital and operating cost of existing units, and may affect the operations of the System's work centers and other facilities. The ultimate cost impact of these requirements on the System cannot be estimated because of uncertainties about how EPA and the states will implement various requirements of the CAAA.
NOX. The CAAA identifies NOX emissions as a precursor of ambient ozone for the northeastern region of the United States, much of which is in violation of the ambient air quality standard for ozone. Pursuant to the CAAA, Connecticut, New Hampshire and Massachusetts must implement plans to address ozone nonattainment. Probable actions include additional NOX controls that could impose costs on the System's generating units. The capital cost to comply with 1995's anticipated Phase I requirements is expected to approximate $10 million for CL&P, $11 million for PSNH, $1 million for WMECO and $3 million for HWP, while compliance costs for Phase II, effective in 1999, could be substantially higher depending on the level of NOX reductions required. Costs for meeting the 1999 NOX emission reduction requirements cannot be estimated at this time.
Connecticut and New Hampshire have not as yet issued final regulations to implement NOX reduction requirements, although both have previously indicated that they will attempt to achieve NOX reduction requirements at the lowest possible costs. The System companies are in the process of reviewing compliance strategies and costs and of providing input to state environmental regulators. Massachusetts issued final NOX Reasonably Available Control Technology (RACT) rules in September, 1993.
In December 1993, PSNH reached a revised agreement regarding NOX emissions with various environmental groups and the New Hampshire Business
and Industrial Association. The agreement has been submitted to the New Hampshire Air Resources Division (NHARD) in the form of proposed regulations.
The agreement provides for aggressive unit specific NOX emission rate limits for PSNH's generating facilities, effective May 31, 1995. The agreement no longer requires a PSNH commitment to retire or repower Merrimack Unit 2 by May 15, 1999, however more stringent emission rate limits equivalent to the range of 0.1 to 0.4 pounds of NOX per million Btu are required for the unit by that date.
PSNH recently received an amendment to its Permit to Operate for Merrimack Unit 1 from NHARD to allow the testing of wood chips as a fuel. Testing has begun and if it is successful it may assist PSNH in compliance with the CAAA.
SO2. The CAAA mandates reductions in sulfur dioxide (SO2) emissions to control acid rain. These reductions are to occur in two phases. First, high SO2 emitting plants are required to reduce their emissions beginning January 1, 1995. The only System units subject to the Phase I reduction requirements are PSNH's Merrimack Units 1 and 2. Management plans to meet the requirements of both Phase I and Phase II by burning low sulfur fuels and substituting (i.e. adding) Newington and Mt. Tom stations as Phase I units, if allowed by EPA regulations.
On January 1, 2000, the start of Phase II, a nationwide cap of 8.9 million tons per year of utility SO2 emissions will be imposed and existing units will be granted allowances to emit SO2. These allowances are freely tradable. One allowance entitles a source to emit one ton of SO2 in a year. No unit may emit more SO2 in a particular year than the amount for which it has allowances. The System expects to be allocated allowances by EPA that substantially exceed its expected SO2 emissions for 2000 and subsequent years. In 1993, the System agreed to donate, subject to regulatory approval, 10,000 of its surplus SO2 allowances to the American Lung Association thereby effectively preventing 10,000 tons of SO2 from being emitted into the atmosphere. The System expects to be able to sell some of its surplus allowances. The price of allowances depends on the market. The amount of surplus allowances and the allocation of the revenues received from such sales between ratepayers and shareholders have not been determined.
On February 15, 1993, as required by the CAAA, PSNH filed Phase I Acid Rain Permit Applications for Merrimack Station. In addition, as allowed by the CAAA, PSNH designated its Newington station unit, and HWP designated its Mt. Tom unit, as conditional Phase I substitution units. EPA is currently reviewing whether it will accept Newington and Mt. Tom as substitution units and the number of allowances each will be awarded. All Phase I units, including substitution units accepted by EPA, will be allocated SO2 allowances for the period 1995-1999.
On December 31, 1992, pursuant to Connecticut Public Act 92-106, CL&P filed a report with the Energy and Public Utilities Committee of the Connecticut General Assembly and the DPUC describing its plan for allocation of revenues from sale of SO2 allowances. CL&P proposed that its shareholders receive 20 percent of the proceeds from sales of allowances to compensate for the risks they have taken to reduce CL&P's SO2 emissions and to provide appropriate incentive to CL&P to sell allowances at the maximum price. In 1993 the DPUC approved a proposal by The United Illuminating Company (UI) to grant an option to another utility for the purchase of SO2 allowances, and ruled that shareholders would receive 15 percent of the proceeds from the eventual sale. The DPUC opened a docket and held hearings to review the reports filed by CL&P and UI. This review is addressing development of a
policy on allocation between shareholders and ratepayers of SO2 allowance proceeds as well as CL&P's allowance donation.
CDEP's air quality regulations permit CL&P to burn 1.0 percent sulfur oil at oil-fired generating stations in Connecticut, except that 0.5 percent sulfur oil must be burned at Middletown station. Current CDEP policy requires CL&P to use 0.5 percent or lower sulfur oil when replacing older (1.0 percent sulfur oil fueled) plant auxiliary boilers needed for unit start-up and plant space heating. The regulations also permit the burning of coal with a sulfur content of up to 0.7 percent at CL&P's plants, or up to 1.0 percent if a special permit is obtained.
New Hampshire air quality regulations permit PSNH to emit 55,150 tons of SO2 annually. The New Hampshire acid rain control law required a 25 percent reduction in SO2 emissions from the 1979-1982 baseline emissions at PSNH's units, which has been achieved. Compliance with New Hampshire's acid rain control law has brought PSNH very close to compliance with the SO2 emission limits of Phase I of the CAAA. PSNH may need to install additional pollution control equipment or use fuel with lower sulfur content in order to meet the requirements of the CAAA.
The EPA has issued an order requiring modeling of the impact on ambient air quality of SO2 emissions from Merrimack Station. Work on this study has begun and the final results of the modeling are expected to be available in mid-1995. If the modeling study indicates that compliance with the primary ambient air quality standards for SO2 is not being achieved, additional control strategies, possibly including the addition of emission control devices or a higher stack, will be required. Management cannot at this time predict the results of the modeling or estimate the cost of any additional control strategies that may be required.
The Massachusetts air quality regulations permit HWP to burn 1.5 percent sulfur coal with an ash content up to 9 percent at Mt. Tom Station. Coal with a higher ash content can be burned with MDEP approval. Mt. Tom Station is required to reduce sulfur emissions to the equivalent of 1.0 percent sulfur oil if certain air quality monitors show levels of SO2 approaching ambient air quality limits. WMECO's West Springfield station currently burns 1.0 percent sulfur oil or natural gas.
The Massachusetts acid rain control law requires MDEP to adopt regulations to limit future sulfur dioxide emissions. These regulations limit the allowable SO2 emissions from utility power plants and other major fuel burning sources to 1.2 pounds per million BTUs averaged over all of the System's Massachusetts plants, effective January 1, 1995. The System's generating plants in Massachusetts on average emit approximately 1.9 pounds of SO2 per million BTUs. The System expects to meet the new sulfur dioxide limitation by using natural gas and lower sulfur oil and coal in its plants. The System could incur additional costs for the lower sulfur fuels it may burn to meet the requirements of this legislation.
Under the existing fuel adjustment clauses in Connecticut, New Hampshire and Massachusetts, the System would be able to recover the additional fuel costs of compliance with the CAAA and state laws from its customers. Management does not believe that the acid rain provisions of the CAAA will have a significant impact on the System's overall costs or rates due to the very strict limits on SO2 emissions already imposed by Connecticut, New Hampshire and Massachusetts and on NOX limitations imposed by Connecticut and New Hampshire.
EPA, Connecticut, New Hampshire and Massachusetts regulations also include other air quality standards, emission standards and monitoring, and testing and reporting requirements that apply to the System's generating stations. They require that new or modified fossil fuel-fired electric generating units operate within stringent emission limits.
Air Toxics. Title III of the CAAA imposes new stringent discharge limitations on hazardous air pollutants. EPA is required to study toxic emissions and mercury emissions from power plants. Pending completion of these studies, power plants are exempt from the hazardous air pollutant requirements. Should EPA or Congress determine that power plant emissions must be controlled to the same extent as emissions from other sources under Title III, the System could be required to make substantial capital expenditures to upgrade or replace pollution control equipment, but the amount of these expenditures cannot be readily estimated.
Connecticut and New Hampshire have enacted, and Massachusetts is considering, toxic air pollution regulations limiting emissions of numerous substances that may extend beyond those regulated under federal law.
TOXIC SUBSTANCES AND HAZARDOUS WASTE REGULATIONS
PCBs. Under the federal Toxic Substances Control Act of 1976 (TSCA), EPA has issued regulations that control the use and disposal of polychlorinated biphenyls (PCBs). PCBs had been widely used as insulating fluids in many electric utility transformers and capacitors before TSCA prohibited any further manufacture of such PCB equipment. System companies have taken numerous steps to comply with these regulations and have incurred increased costs for disposal of used fluids and equipment that are subject to the regulations. One disposal measure involves the System's burning of some waste oil with a low level of PCB contamination (up to 500 parts per million (ppm)) as supplemental fuel at CL&P's Middletown station Unit 3. EPA and CDEP have approved this disposal method.
In general, the System sends fluids with concentrations of PCBs equal to or higher than 500 ppm but lower than 8,500 ppm to an unaffiliated company to dispose of using a chemical treatment process. Electrical capacitors that contain PCB fluid are sent offsite to dispose of through burning in high temperature incinerators approved by EPA. Currently, there are only four such approved incinerators operating in the United States, which has resulted in a sharp rise in the price of disposal through these facilities. The System disposes of solid wastes containing PCBs in secure chemical waste landfills. In 1993, the System incurred costs of approximately $450,000 for disposal of materials at these facilities.
Asbestos. Federal, Connecticut, New Hampshire and Massachusetts asbestos regulations have required the System to expend significant sums on removal of asbestos including measures to protect the health of workers and the general public and to properly dispose of asbestos wastes. Areas of the System currently undergoing removal of asbestos include nuclear, fossil/hydro production, transmission and distribution and facilities operations. The System expects to expend approximately $3.4 million in 1994 on the removal of asbestos in nuclear units, fossil and hydro generating stations and buildings. Even greater costs are likely to be incurred annually in the future if federal and state asbestos regulations become more stringent and the System's need to remove asbestos grows.
RCRA. Under the federal Resource Conservation and Recovery Act of 1976, as amended (RCRA), the generation, transportation, treatment, storage and
disposal of hazardous wastes are subject to EPA regulations. Connecticut, New Hampshire and Massachusetts have adopted state regulations that parallel RCRA regulations but in some cases are more stringent. A change in interpretation of RCRA by EPA now requires that nuclear facilities obtain EPA permits to handle radioactive wastes that are also hazardous under RCRA (so-called mixed wastes). The notifications and applications required by these regulations have been made by all units to which these regulations apply. The procedures by which System companies handle, store, treat and dispose of hazardous wastes are regularly revised, where necessary, to comply with these regulations.
CL&P has discontinued operation of surface impoundments in its four Connecticut wastewater treatment facilities used to treat hazardous waste. This is because CL&P was unable to obtain variances from EPA to exempt the facilities from the double lining requirement under the 1984 RCRA amendments.
CL&P has constructed replacement above-ground concrete tanks at an estimated cost of approximately $22 million. It is expected that in early 1994, EPA and DEP will approve clean closure for CL&P's Montville Station's impoundment. Accordingly, CL&P will no longer be required to maintain liability insurance or financial assurance for closure and post-closure for this former impoundment site. EPA's final approval of the closure of the remaining three surface impoundments is pending. The System estimates that it will incur approximately $2 million in costs of monitoring and closure of the container storage areas for these sites in the future, but the ultimate amount will depend on EPA's final disposition.
Underground Storage Tanks. Federal and state regulations regulate underground tanks storing petroleum products or hazardous substances. The System has about 130 underground storage tanks that are used primarily for gasoline, diesel, house-heating and fuel oil. To reduce its environmental and financial liabilities, the System has begun implementing a policy calling for the permanent removal of all non-essential underground vehicle fueling tanks. Costs for this program are not substantial.
Hazardous Waste Liability. As many other industrial companies have done in the past, System companies have disposed of residues from operations by depositing or burying such materials on-site or disposing of them at off-site landfills or facilities. Typical materials disposed of include coal gasification waste and oils that might contain PCBs. In recent years it has been determined that deposited or buried wastes, under certain circumstances, could cause groundwater contamination or other environmental harm. The System continues to evaluate the environmental impact of its former disposal practices. Under federal and state law, government agencies and private parties can attempt to impose liability on System companies for such past disposal.
Under the federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, commonly known as Superfund, EPA has the authority to clean up hazardous waste sites and to impose the cleanup costs on parties deemed responsible for the hazardous waste activities on the sites. Responsible parties include the current owner of a site, past owners of a site at the time of waste disposal, waste transporters and waste generators. It is EPA's position that all responsible parties are jointly and severally liable, so that any single responsible party can be required to pay the entire costs of cleaning up the site. As a practical matter, however, the costs of cleanup are usually allocated by agreement of the parties, or by the courts on an equitable basis among the parties deemed responsible, and several recent federal appellate court decisions have rejected EPA's position on strict joint and several liability. Superfund
also contains provisions that require System companies to report releases of specified quantities of hazardous materials and require notification of known hazardous waste disposal sites. Management believes that the System companies are in compliance with these reporting and notification requirements.
The System is or has recently been involved in eight Superfund sites. Three of these sites are in Connecticut, one is in Kentucky, one is in West Virginia and three are in New Hampshire. The level of study of each site and the information about the waste contributed to the site by the System and other parties differs from site to site. Where reliable information is available that permits the System to make a reasonable estimate of the expected total costs of remedial action and/or the System's likely share of remediation costs for a particular site, those cost estimates are provided below. All cost estimates were made, in accordance with Financial Accounting Standards Board Statement No. 5, where remediation costs were probable and reasonably estimable. Any estimated costs disclosed for cleaning up the sites discussed below were determined without consideration of possible recoveries from third parties, including insurance recoveries. Where the System has not accrued a liability, the costs either were not material or there was insufficient information to accurately assess the System's exposure.
At two Connecticut sites, the Beacon Heights and Laurel Park landfills, the major parties formed coalitions to clean the sites and settled their suits with EPA and CDEP. The coalitions then attempted to join as defendants a large number of potential contributors, including "Northeast Utilities (Connecticut Light and Power)." Litigation on both sites was consolidated in a single case in the federal district court. In January 1993, Judge Dorsey denied the motion of the Laurel Park Coalition to join NU (CL&P). In December 1993, Judge Dorsey dismissed the claims of Beacon Heights Coalition against many of the defendants and directed the coalition to indicate which remaining defendants it intended to pursue claims against. In January 1994, the Beacon Heights Coalition filed a response listing NU (CL&P) as a defendant they would not continue to pursue. As a result of Judge Dorsey's rulings and the coalition's actions, it is not likely that CL&P will incur any cleanup costs for these sites.
In June, 1993, EPA notified the System that it was a Potentially Responsible Party (PRP) at the Solvents Recovery Service of New England site in Southington, Connecticut. PSNH is a de minimis PRP at this site and does not expect its cost to be substantial.
At the Maxey Flats nuclear waste disposal site in Fleming County, Kentucky, EPA has issued a notice of potential liability to NNECO and CYAPC. The System had sent a substantial volume of LLRW from Millstone 1, Millstone 2 and CY to this site. CL&P and WMECO had previously recorded a liability for future remediation costs for this site based on System estimates. To date, the costs have not been material with respect to their earnings or financial positions.
In September 1991, EPA issued its record of decision for the Maxey Flats nuclear waste disposal site. The EPA-approved remedy requires pumping and treatment of leachate, installing of an initial cap, allowing materials in the trenches to settle and ultimately constructing a permanent cap. EPA estimated that the cost of the remedy is approximately $33.5 million. Based on that estimate and the volume contributed, the System's share would be approximately $0.5 million. However, the System believes that the cost of the remedy could be substantially higher. The System estimates that its total cost for cleanup could be approximately $1-$2 million. EPA provided an opportunity for PRPs, including certain System companies, to enter into a
consent decree with EPA under which each PRP would reimburse EPA for its past costs and would undertake remedial action at the site or pay the costs of EPA undertaking remedial action.
On October 20, 1992, PRPs that are members of the Maxey Flats PRP Steering Committee, including System companies, and several federal government agencies, including DOE and the Department of Defense, made a settlement offer to EPA involving a commitment to perform a substantial portion of the remedial work required by EPA in its record of decision. On that same date, the Commonwealth of Kentucky made a settlement offer. EPA rejected the settlement offers in December 1992, but gave the parties an additional 60 days to make a "good faith" offer. On March 16, 1993, the PRP Steering Committee and the federal government agencies made a revised offer to EPA. Since then all parties have been actively involved in settlement negotiations.
PSNH has settled with EPA and other PRPs at sites in West Virginia and Kingston, New Hampshire. PSNH paid approximately $33,700 to cash out of these sites.
PSNH has committed approximately $280,000 as its share of the costs to clean up municipal landfills in Dover and North Hampton, New Hampshire. Some additional costs may be incurred at these sites but they are not expected to be significant.
Other New Hampshire sites include municipal landfills in Somersworth and Peterborough, and the Dover Point site owned by PSNH in Dover, New Hampshire.
PSNH's liability at the landfills is not expected to be significant and its liability at the Dover Point site cannot be estimated at this time.
PSNH contacted NHDES in December 1993 concerning possible coal tar contamination in the headwater of Lake Winnipesaukee near an area where PSNH formerly owned and operated a coal gasification plant which was sold in 1945. PSNH agreed to conduct an historical review and provide a report to NHDES in February 1994. PSNH, along with two other identified PRPs, most likely will be conducting a site investigation in the spring of 1994.
In 1987, CDEP published a list of 567 hazardous waste disposal sites in Connecticut. The System owns two sites on this list. The System has spent approximately $0.5 million to date completing investigations at these sites. Both sites were formerly used by CL&P predecessor companies for the manufacture of coal gas (also known as town gas sites) from the late 1800s to the 1950s. This process resulted in the production of coal tar residues, which, when not sold for roofing or road construction, were frequently deposited on or near the production facilities. Site investigations are being carried out to gain an understanding of the environmental and health risks of these sites. Should future site remediation become necessary, the level of cleanup will be established in cooperation with CDEP. Connecticut is currently developing cleanup standards and guidelines for soil and groundwater.
One of the sites is a 25.8 acre site located in the south end of Stamford, Connecticut. Site investigations have located coal tar deposits covering approximately 5.5 acres and having a volume of approximately 45,000 cubic yards. A final risk assessment report for the site was completed in January 1994. Several remedial options are currently being evaluated to clean up the site; however, CL&P is focusing on institutional and engineering controls, such as capping and paving, which would reduce the potential health risks and secure the site. The estimated costs of institutional controls
range from $2 million to $3 million.
As part of the 1989 divestiture of CL&P's gas business, site investigations were performed for properties that were transferred to Yankee Gas Services Company (Yankee Gas). As a result of those investigations, ten properties were identified for which negative declarations under the Property Transfer Act could not be filed. A negative declaration is a statement that there has been no discharge of hazardous wastes at the site, or that if there was such a discharge, it has been cleaned up or determined to pose no threat to health, safety or the environment and is being managed lawfully. Of the ten sites, CL&P agreed to accept liability for required cleanup for the three sites it retained. At one location, CL&P and Yankee Gas share the site and any liability for any required cleanup. Yankee Gas accepted liability for any required cleanup of the other sites. CL&P and Yankee Gas will share the costs of cleanup of sites formerly used in CL&P's gas business but not currently owned by either of them.
In Massachusetts, System companies have been designated by MDEP as PRPs for ten sites under MDEP's hazardous waste and spill remediation program. The System does not expect that its share of the remaining remediation costs for any of these sites will be material. At some of these sites, the System is responsible for only a small portion or none of the hazardous wastes. For some of these and for other sites, the total remediation costs are not expected to be material. At one of the sites, the System has spent approximately $2 million for cleanup and it expects to incur approximately $250,000 for the remaining remediation costs.
HWP has been identified by MDEP as a PRP in a coal tar site in Holyoke, Massachusetts. HWP owned and operated the Holyoke Gas Works from 1859 to 1902. It was sold to the city of Holyoke and operated by its Gas and Electric Department (HG&E) from 1902 to 1951. Currently, one third of the two acre property is owned by HG&E, with the remaining portion owned by a construction company. The site is located on the west side of Holyoke, adjacent to the Connecticut River and immediately downstream of HWP's Hadley Falls Station. MDEP has classified both the land and river deposit areas as Tier I priority waste disposal sites. Due to the presence of tar patches in the vicinity of the spawning habitat of the shortnose sturgeon (SNS) - an endangered species - the National Oceanographic and Atmospheric Administration (NOAA) and National Marine Fisheries Service have taken an active role in overseeing site activities. Although HWP denies that it is a PRP, it has cooperated with the agencies in investigating this problem. Both MDEP and NOAA have indicated they may require the removal of tar deposits from the vicinity of the SNS spawning habitat. To date, HWP has spent approximately $200,000 for river studies and construction costs for an oil containment boom to prevent leaching hydrocarbons from entering the Hadley Falls tailrace and the Connecticut River.
The System has received other claims from government agencies and third parties for the cost of remediating sites not currently owned by the System but affected by past System disposal activities and expects to receive more such claims in the future. The System expects that the costs of resolving claims for remediating sites about which it has been notified will not be material, but cannot estimate the costs with respect to sites about which it has not been notified. If the System, regulatory agencies or courts determine that remedial actions must be taken in relation to past disposal practices on property owned or used for disposal by the System in the past, the System could incur substantial costs.
ELECTRIC AND MAGNETIC FIELDS
In recent years, published reports have discussed the possibility of adverse health effects from electric and magnetic fields (EMF) associated with electric transmission and distribution facilities and appliances and wiring in buildings and homes. On the basis of scientific reviews of these reports conducted by various state, federal and international panels, management does not believe that a causal relationship has been established or that significant capital expenditures are appropriate to minimize unsubstantiated risks. The System supports further research into the subject and is participating in the funding of the National EMF Research and Public Information Dissemination Program and other industry-sponsored studies. If further investigation were to demonstrate that the present electricity delivery system is contributing to increased risk of cancer or other health problems, the industry could be faced with the difficult problem of delivering reliable electric service in a cost-effective manner while managing EMF exposures. In addition, if the courts were to conclude that individuals have been harmed and that utilities are liable for damages, the potential monetary exposure for all utilities, including the System companies, could be enormous. Without definitive scientific evidence of a causal relationship between EMF and health effects, and without reliable information about the kinds of changes in utilities' transmission and distribution systems that might be needed to address the problem, if one is found, no estimates of the cost impacts of remedial actions and liability awards are available.
Epidemiological studies, rather than laboratory studies, have been primarily responsible for increased scientific interest in and public concern over EMF exposures in the past decade. New epidemiological study results from international researchers were released and publicized in late-1992 and in 1993, but these only added to a picture of inconsistency from previous studies. Researchers from Sweden and Denmark concluded that their statistical results support the hypothesis that EMF may be a causative factor in certain types of cancer (although they disagreed on which types), while researchers from Finland and Greece found no evidence to support such a hypothesis. These researchers, as well as scientific review panels considering all significant EMF epidemiological and laboratory research to date, all agree that current information remains inconclusive, inconsistent and insufficient for risk assessment of EMF exposures. NU is closely monitoring research and government policy developments.
In 1993, there were several notable events on the federal government level regarding EMF. The EPA has indefinitely postponed completion of a report on EMF, citing as its reasons high costs and the unlikelihood of shedding new light on the issue. Instead, it now plans to issue a 30-page "summary of science" in early 1994. In a related development, the Department of Energy has initiated a scientific review of EMF research by the National Academy of Sciences. Also on the federal level, the National EMF Research and Public Information Dissemination Program (created by the Energy Policy Act) moved forward in 1993 by establishing a federal interagency committee and an advisory committee, and by soliciting the required non-federal matching funds (through The Edison Electric Institute, NU will be making a voluntary contribution of approximately $62,000 for each year of the five-year program).
The Connecticut Interagency EMF Task Force (Task Force) provided reports to the state legislature in March 1993 and in January 1994. The Task Force recognizes and supports the need for more research, and has suggested a policy of "voluntary exposure control," which involves providing people with information to enable them to make individual decisions about EMF exposure.
Neither the Task Force, nor any Connecticut state agency, has recommended changes to the existing electrical supply system. Finally, the Connecticut Siting Council adopted a set of EMF "best management practices" in February 1993, which must now be considered in the justification, siting and design of new transmission lines and substations. EMF has become increasingly important as a factor in facility siting decisions in many states.
Several bills were introduced in Massachusetts in January 1993, and were last reported to be pending before various legislative committees. It is not known whether there will be further action on the bills, which would require certain disclosures to real estate purchasers and utility employees, a scientific literature review, establishment of a fund to reduce certain field exposures, identification of schools and day care centers within 500 feet of transmission lines and development of EMF regulations. No action was taken on EMF bills previously pending in 1992.
CL&P has been the focus of media reports charging that EMF associated with a CL&P substation and related distribution lines in Guilford, Connecticut, is linked with various cancers and other illnesses in several nearby residents. See Item 3, Legal Proceedings, for information about two suits brought by plaintiffs who now live or formerly lived near that substation.
FERC HYDRO PROJECT LICENSING
Federal Power Act licenses may be issued for hydroelectric projects for terms of up to 50 years as determined by FERC. Any hydroelectric project so licensed is subject to recapture by the United States for licensing to others after expiration of the license upon payment to the licensee of the lesser of fair value or the net investment in the project plus severance damages less certain amounts earned by the licensee in excess of a reasonable rate of return. Licenses are customarily conditioned on the licensee's development of recreational and other non-power uses at each licensed project. Conditions may be imposed with respect to low flow augmentation of streams and fish passage facilities.
On September 28, 1993, the United States Fish and Wildlife Service (FWS) was petitioned to list the anadromous Atlantic salmon (Salmo salar) as an endangered species in the United States. After a 90-day review, the petition was found to be complete and was accepted. The National Marine Fisheries Service and FWS were given joint jurisdiction over this petition. Within the next 12 months, these agencies will decide if the petition is warranted. If salmon are listed as an endangered species, the System may be required to take a number of actions including increasing spillage over some dams during the salmon migration period resulting in loss of generation capacity at the affected hydroelectric facilities; modifying spillways to accommodate safe fish passage; curtailing pumping at Northfield Mountain during the salmon migration period; improving upstream and downstream passage facilities at all hydroelectric dams on the Connecticut and Merrimack Rivers; and modifying intake structures and curtailing operations during salmon migration periods at certain of the System's thermal structures. Although these are all possible implications of a listing, the System cannot estimate the impact on System facilities at this time.
The System is continuing to conduct studies on the Connecticut River in fulfillment of the Memorandum of Agreement (MOA) concerning downstream passage of anadromous fishes (Atlantic salmon, American shad and blueback herring). The MOA was signed by the System and the Connecticut River Atlantic Salmon Commission and its member agencies in 1990. The System conducted studies in 1991 and 1992 of the entrainment of salmon smolts and
juvenile shad and herring in water pumped to the upper reservoir of the Northfield Mountain Pumped Storage Project. Studies of entrainment of shad and herring indicated that Northfield's impact on these species is low, and further studies have not been conducted.
Studies of salmon smolts, however, indicated the potential for unacceptable losses of smolts due to entrainment, but the results also indicated that firm conclusions could not be drawn. Accordingly, the System conducted a more definitive study indicating that about 10 percent of the 1993 smolt run was entrained at Northfield. The System will continue to pursue practical techniques to reduce salmon smolt entrainment at Northfield and has agreed to alter its 1994 maintenance schedule to reduce the amount of time when all four pump/turbine units will be pumping simultaneously during the smolt migration period. Should the system be unable to reduce smolt entrainment through operational changes or practical exclusion techniques, substantial additional costs are possible. The total cost cannot be determined at this time.
The System operating companies hold licenses granted under Part I of the Federal Power Act for the operation and maintenance of thirteen existing hydroelectric projects, four of which are in Massachusetts (Northfield, Turners Falls, Gardners Falls and Holyoke [river and canal units]), three of which are in Connecticut (Scotland, Housatonic [encompassing Bulls Bridge, Rocky River, Shepaug and Stevenson] and Falls Village) and six of which are in New Hampshire (Merrimack [encompassing Garvins Falls, Hooksett and Amoskeag], Smith, Ayers Island, Eastman Falls, Canaan and Gorham).
In 1992, FERC issued orders exempting from licensing WMECO's four Chicopee River projects: Dwight, Indian Orchard, Putts Bridge and Red Bridge. To date, FERC has not claimed jurisdiction over CL&P's Bantam, Robertsville, Taftville and Tunnel Projects or PSNH's Jackman project.
Four of the System's FERC licenses expired at the end of 1993 (Gardners Falls, Ayers Island, Gorham and Smith). Relicensing efforts have been under way for these projects for several years. As no third parties have filed competing license applications with FERC for these projects, it is highly likely that FERC will grant renewal licenses for these projects to the System.
However, certain operating, environmental and/or recreational conditions may be placed on these licenses. Because FERC was unable to complete its relicensing process prior to the December 31, 1993 expiration of these licenses, under the provision of section 15 of the Federal Power Act, FERC has issued one-year extensions to each of these licensees. FERC will continue to issue annual licenses until it completes the relicensing process.
EMPLOYEES
As of December 31, 1993, the System companies had approximately 9,697 full and part time employees on their payrolls, of which approximately 2,697 were employed by CL&P, approximately 1,452 by PSNH, approximately 656 by WMECO, approximately 119 by HWP, approximately 1,252 by NNECO, approximately 2,584 by NUSCO and approximately 937 by North Atlantic. NU and NAEC have no employees. Approximately 2,242 employees of CL&P, PSNH, WMECO and HWP are covered by union agreements, which expire between October 1994 and May 1996. Certain employees of North Atlantic negotiated a union contract in 1993.
On August 3, 1993, the System announced that it intended to reduce its total workforce by 600 to 700 positions and offered a voluntary early
retirement program to about 800 eligible employees. The program was available generally to all nonbargaining unit employees of NU's subsidiaries, NUSCO, CL&P, WMECO, HWP, PSNH and NAESCO, who would be at least age 55 with ten years of service as of November 1, 1993. Most nuclear-related job classifications at NUSCO and NAESCO were not eligible. The program enhanced pension benefits by adding an additional three years to age and service for the purpose of calculating pension benefits and early retirement reduction factors, as well as providing a supplemental payment to employees who retired prior to becoming eligible for social security benefits. Each program participant has retired or will retire on a date to be established by the employer between November 1, 1993 and November 1, 1994. A similar program was offered to approximately 300 bargaining unit employees working for System companies and 12 employees of NEPOOL/NEPEX. The workforce reduction affected approximately 811 employees, of which 498 individuals accepted the early retirement program and another 313 individuals who were involuntarily terminated. Involuntarily terminated employees were eligible to receive a lump sum severance payment of up to a maximum of 52 weeks salary, depending on years of credited service. In addition, as part of the System's reorganization of its Connecticut-based nuclear organization, 32 employees were involuntarily terminated through January 12, 1994. For more information on the reorganization see "Nuclear Generation - Operations - Nuclear Performance Improvement Initiatives." The total cost of the workforce reduction program and the nuclear reorganization was approximately $38 million, including pension, severance and other benefits.
Item 2. Properties
The physical properties of the System are owned or leased by subsidiaries of NU. CL&P's principal plants and other properties are located either on land which is owned in fee or on land, as to which CL&P owns perpetual occupancy rights adequate to exclude all parties except possibly state and federal governments, which has been reclaimed and filled pursuant to permits issued by the United States Army Corps of Engineers. The principal properties of PSNH are held by it in fee. In addition, PSNH leases space in an office building under a 30-year lease expiring in 2002. WMECO's principal plants and a major portion of its other properties are owned in fee, although one hydroelectric plant is leased. NAEC owns a 35.98201 percent interest in Seabrook 1, and approximately 719 acres of exclusion area land located around the unit. In addition, CL&P, PSNH, and WMECO have certain substation equipment, data processing equipment, nuclear fuel, nuclear control room simulators, vehicles, and office space that are leased. With few exceptions, the System's companies' lines are located on or under streets or highways, or on properties either owned, leased, or in which the company has appropriate rights, easements, or permits from the owners.
CL&P's properties are subject to the liens of CL&P's first mortgage indenture and, with respect to properties formerly owned by The Hartford Electric Light Company (HELCO), to the lien of HELCO's first mortgage indenture. PSNH's properties are subject to the lien of its first mortgage indenture. In addition, PSNH's outstanding term loan and revolving credit agreement borrowings are secured by a second lien, junior to the lien of the first mortgage indenture, on PSNH property located in New Hampshire. WMECO's properties are subject to the lien of its first mortgage indenture. NAEC's First Mortgage Bond are secured by a lien on the Seabrook 1 interest described above, and all rights of NAEC under the Seabrook Power Contract. In addition, CL&P's and WMECO's interests in Millstone 1 are subject to second liens for the benefit of lenders under agreements related to pollution control revenue bonds. Various ones of these properties are also subject to minor encumbrances which do not substantially impair the usefulness of the properties to the owning company.
The System companies' properties are well maintained and are in good operating condition.
ELECTRIC PROPERTIES
The following represents the miles of electric lines operated and other
physical data as of December 31, 1993, for the System companies:
Total
CL&P PSNH WMECO HWP System
---- ---- ----- --- ------
TRANSMISSION SYSTEM:
Substations
-----------
Number 37 49 15 1 102
Aggregate Capacity
(kVA) 16,329,857 4,991,221 3,507,152 197,000 25,025,230
Overhead Lines
--------------
(Circuit Miles)
345 kV 392 252 105 - 749
230 kV - 9 - - 9
115 kV 1,131 713 328 15 2,187
69 kV 101 - 35 - 136
Underground Lines
-----------------
(Cable Miles)
138 kV 41 - - - 41
115 kV 117 - 28 - 145
69 kV 8 - - - 8
DISTRIBUTION SYSTEM:
Substations
Number 243 134 51 6 434
Aggregate Capacity 6,873,752 776,310 1,407,705 142,350 9,200,117
(kVA)
Overhead Lines
--------------
Pole Miles 18,130 10,574 3,592 19 32,315
Underground Lines
-----------------
Conduit Bank Miles 710 880 262 3 1,855
OTHER PHYSICAL DATA:
Line Transformers
-----------------
Number in Service 217,642 121,634 37,705 151 377,132
Aggregate Capacity
(kVA) 9,857,000 4,057,000 1,716,000 81,000 15,711,000
|
As of December 31, 1993, the electric generating plants of the System
operating companies and the System companies' entitlements from the generating
plants of the three operating Yankee regional nuclear generating companies were as follows:
|
Name Plate Claimed
Year Rating Capability
Name, Owner, Town, Location Type Installed (Kilowatts) (Kilowatts)
- --------------------------- ---- --------- ----------- -----------
(Winter
Ratings)
System Generating Plants:
- ------------------------
Millstone Plant (Waterford-Long Island Sound)
CL&P's Portion -
81% Ownership of Unit 1 Nuclear 1970 535,815 524,637
81% Ownership of Unit 2 Nuclear 1975 737,019 708,345
52.9330% Ownership of Unit 3 Nuclear 1986 663,303 608,041
--------- ---------
1,936,137 1,841,023
PSNH's Portion -
2.8475% Ownership of Unit 3 Nuclear 1986 35,682 32,709
WMECO's Portion -
19% Ownership of Unit 1 Nuclear 1970 125,685 123,063
19% Ownership of Unit 2 Nuclear 1975 172,881 166,155
12.2385% Ownership of Unit 3 Nuclear 1986 153,361 140,584
--------- ---------
451,927 429,802
Total Millstone Plant
100% Ownership of Unit 1 Nuclear 1970 661,500 647,700
100% Ownership of Unit 2 Nuclear 1975 909,900 874,500
68.0190% Ownership of Unit 3 Nuclear 1986 852,346 781,334
--------- ---------
2,423,746 2,303,534
Seabrook Plant
(Seabrook, New Hampshire)
CL&P's 4.05985% Ownership Portion Nuclear 1990 50,423 46,688
NAEC's 35.56942% Ownership Portion <F1>(a) Nuclear 1990 441,772 409,048
--------- ---------
Total Seabrook Plant 492,195 455,736
Northfield Plant (Northfield
and Erving - Connecticut River)
CL&P's 81% Ownership Portion Pumped Storage 1972-1973 685,260 874,800
WMECO's 19% Ownership Portion Pumped Storage 1972-1973 160,740 205,200
--------- ---------
Total Northfield Plant 846,000 1,080,000
Middletown Plant (CL&P) Steam 1958-1973 767,896 765,000
(Middletown - Connecticut River) Gas Turbine 1966 18,594 22,000
--------- ---------
Total Middletown Plant 786,490 787,000
Montville Plant (CL&P) Steam 1954-1971 489,900 492,000
(Montville - Thames River) 2 Diesels 1967 5,500 5,500
--------- ---------
Total Montville Plant 495,400 497,500
|
Name Plate Claimed
Year Rating Capability
Name, Owner, Town, Location Type Installed (Kilowatts) (Kilowatts)
- --------------------------- ---- --------- ----------- -----------
(Winter
Ratings)
Norwalk Harbor Plant (CL&P) Steam 1960-1963 326,400 336,000
(Norwalk - Long Island Sound) Gas Turbine 1966 16,320 17,000
--------- ---------
Total Norwalk Plant 342,720 353,000
Devon Plant (CL&P) Steam 1956-1958 207,000 218,000
(Milford - Housatonic River) Gas Turbine 1986 18,594 19,200
--------- ---------
Total Devon Plant 225,594 237,200
South Meadow Plant (CL&P) 4 Gas Turbines 1970 167,400 195,600
(Hartford - Connecticut River)
Shepaug Plant (CL&P) Hydro 1955 37,200 43,400
(Southbury - Housatonic River)
Rocky River Plant (CL&P) Pumped 1928-1929 31,000 30,350
(New Milford - Housatonic River) Storage
Stevenson Plant (CL&P) Hydro 1919-1936 30,500 28,900
(Monroe - Housatonic River)
Amoskeag Plant (PSNH) Hydro 1922-1924 16,000 17,500
(Manchester - Merrimack River)
Garvins Falls Plant (PSNH) Hydro 1925-1981 12,400 10,560
(Bow - Merrimack River)
Lost Nation Plant (PSNH) Combustion
(Northumberland) Turbine 1969 18,000 18,300
Merrimack Plant (PSNH) Steam 1960-1968 433,600 433,500
(Bow - Merrimack River) 2 Combustion
Turbines 1968-1969 37,200 44,600
--------- ---------
Total Merrimack Plant 470,800 478,100
Schiller Plant (PSNH) Steam 1952-1957 150,000 145,100
(Portsmouth - Piscataqua River) Combustion
Turbine 1970 21,250 22,000
--------- ---------
Total Schiller Plant 171,250 167,100
|
NamePlate Claimed
Year Rating Capability
Name, Owner, Town, Location Type Installed (Kilowatts) (Kilowatts)
- --------------------------- ---- --------- ----------- -----------
(Winter
Ratings)
Wyman #4 Plant
(Yarmouth, ME)
PSNH's 3.1433% Ownership Portion Steam 1978 19,900 19,465
Smith Plant (PSNH) Hydro 1948 15,000 15,170
(Berlin - Androscoggin River)
White Lake Plant (PSNH) Combustion
(Tamworth) Turbine 1968 18,600 22,150
Newington Plant (PSNH) Steam 1974 414,000 406,000
(Newington - Piscataqua River)
Turners Falls Plant (WMECO) Hydro 1905-1917 56,573 59,250
(Montague - Connecticut River)
West Springfield Plant (WMECO) Steam 1957 113,636 107,000
(West Springfield - Connecticut River) Gas Turbine 1968 18,594 22,000
--------- ---------
Total West Springfield Plant 132,230 129,000
Cobble Mountain Plant (WMECO)<F2>(b) Hydro 1930 33,000 33,960
(Granville - Westfield Little River)
Mt. Tom Plant (HWP) Steam 1960 136,000 147,000
(Holyoke - Connecticut River)
Hadley Falls Plant (HWP) Hydro 1952-1983 30,800 31,500
(Holyoke - Connecticut River)
23 Small Hydro Plants 74,156 80,570
7 Internal Combustion Plants
(gas turbine, combustion turbine, and jet) 175,314 196,600
--------- ---------
Total System Generating Plants 7,672,268 7,844,445
--------- ---------
|
NamePlate Claimed
Year Rating Capability
Name, Owner, Town, Location Type Installed (Kilowatts) (Kilowatts)
- --------------------------- ---- --------- ----------- -----------
(Winter
Ratings)
Regional Nuclear Generating Plants <F3>(c)
Connecticut Yankee Atomic Power Company Nuclear 1968
(Haddam, Connecticut)
CL&P's 34.5% Ownership Portion 207,104 201,204
PSNH's 5.0% Ownership Portion 30,015 29,160
WMECO's 9.5% Ownership Portion 57,028 55,404
--------- ---------
294,147 285,768
--------- ---------
Maine Yankee Atomic Power Company Nuclear 1972
(Wiscasset, Maine)
CL&P's 12.0% Ownership Portion 87,289 94,832
PSNH's 5.0% Ownership Portion 36,371 39,514
WMECO's 3.0% Ownership Portion 21,822 23,708
--------- ---------
145,482 158,054
--------- ---------
Vermont Yankee Nuclear Power
Corporation Nuclear 1972
(Vernon, Vermont)
CL&P's 9.5% Ownership Portion 48,120 44,356
PSNH's 4.0% Ownership Portion 20,231 18,648
WMECO's 2.5% Ownership Portion 12,677 11,685
--------- ---------
81,028 74,689
--------- ---------
Total Regional Nuclear Generating Plants 520,657 518,511
--------- ---------
TOTAL GENERATING PLANTS 8,192,925 8,362,956
========= =========
Summary
CL&P 5,291,543 5,456,703
PSNH 1,301,149 1,298,536
NAEC 441,772 409,048
WMECO 978,705 1,008,109
HWP 179,756 190,560
--------- ---------
TOTAL GENERATING PLANTS 8,192,925 8,362,956
========= =========
_________________________
<F1>(a) In February 1994, NAEC purchased VEG&T's 0.41259% ownership share of
Seabrook, representing a current capability of 4,745 kW. If NAEC had owned this
additional share of Seabrook at December 31, 1993, NAEC's and the NU system's
ownership shareof Seabrook would have been 35.98201% and 40.04186%, respectively, representing
current generating capability of 413,793 kW and 460,481 kW, respectively. In addition,
the current generating capability for the NU system and total capability including
Yankee regional nuclear generating companies would have been 7,849,190 kW and 8,367,701
kW, respectively. For more information concerning VEG&T, see "Item 1. Business, Electric
Operations - Nuclear Generation, Seabrook."
<F2>(b) The Cobble Mountain plant is leased from the City of Springfield,
Massachusetts.
<F3>(c) Represents CL&P's, PSNH's, and WMECO's entitlements in the generating
plants of the three operating Yankee regional nuclear generating companies.
|
Franchises
NU's operating subsidiaries hold numerous franchises in the
territories served by them. See also "Competition and Marketing -
Retail Wheeling" and "Legal Proceedings."
CL&P. Subject to the power of alteration, amendment or repeal by
the General Assembly of Connecticut and subject to certain approvals,
permits and consents of public authority and others prescribed by
statute, CL&P has, subject to certain exceptions not deemed material,
valid franchises free from burdensome restrictions to sell electricity
in the respective areas in which it is now supplying such service.
In addition to the right to sell electricity as set forth above,
the franchises of CL&P include, among others, rights and powers to
manufacture, generate, purchase, transmit and distribute electricity,
to sell electricity at wholesale to other utility companies and
municipalities and to erect and maintain certain facilities on public
highways and grounds, all subject to such consents and approvals of
public authority and others as may be required by law. The franchises
of CL&P include the power of eminent domain.
PSNH. Subject to the power of alteration, amendment or repeal by
the General Court of the State of New Hampshire and subject to certain
approvals, permits and consents of public authority and others
prescribed by statute, PSNH has, subject to certain exceptions not
deemed material, valid franchises free from burdensome restrictions to
sell electricity in the respective areas in which it is now supplying
such service.
In addition to the right to sell electricity as set forth above,
the franchises of PSNH include, among others, rights and powers to
manufacture, generate, purchase, transmit and distribute electricity,
to sell electricity at wholesale to other utility companies and
municipalities and to erect and maintain certain facilities on certain
public highways and grounds, all subject to such consents and
approvals of public authority and others as may be required by law.
The franchises of PSNH include the power of eminent domain.
NNECO. Subject to the power of alteration, amendment or repeal
by the General Assembly of Connecticut and subject to certain
approvals, permits and consents of public authority and others
prescribed by statute, NNECO has a valid franchise free from
burdensome restrictions to sell electricity to utility companies doing
an electric business in Connecticut and other states.
In addition to the right to sell electricity as set forth above,
the franchise of NNECO includes, among others, rights and powers to
manufacture, generate and transmit electricity, and to erect and
maintain facilities on certain public highways and grounds, all
subject to such consents and approvals of public authority and others
as may be required by law.
WMECO. WMECO is authorized by its charter to conduct itselectric
business in the territories served by it, and has
locations in the public highways for transmission and distribution
lines. Such locations are granted pursuant to the laws of
Massachusetts by the Department of Public Works of Massachusetts or
local municipal authorities and are of unlimited duration, but the
|
rights thereby granted are not vested. Such locations are for
specific lines only, and for extensions of lines in public highways
further similar locations must be obtained from the Department of
Public Works of Massachusetts or the local municipal authorities. In
addition, WMECO has been granted easements for its lines in the
Massachusetts Turnpike by the Massachusetts Turnpike Authority.
HWP and Holyoke Power and Electric Company (HP&E). HWP, and its
wholly owned subsidiary HP&E, are authorized by their charters to
conduct their businesses in the territories served by them. HWP's
electric business is subject to the restriction that sales be made by
written contract in amounts of not less than 100 horsepower, except
for municipal customers in the counties of Hampden or Hampshire,
Massachusetts and except for customers who occupy property in which
HWP has a financial interest, by ownership or purchase money mortgage.
HWP also has certain dam and canal and related rights, all subject to
such consents and approvals of public authorities and others as may be
required by law. The two companies have locations in the public
highways for their trans-mission and distribution lines. Such
locations are granted pursuant to the laws of Massachusetts by the
Department of Public Works of Massachusetts or local municipal
authorities and are of unlimited duration, but the rights thereby
granted are not vested. Such locations are for specific lines only
and, for extensions of lines in public highways, further similar
locations must be obtained from the Department of Public Works of
Massachusetts or the local municipal authorities. The two companies
have no other utility franchises.
NAEC. NAEC is authorized to own and operate its interest in
Seabrook 1.
|
ITEM 3 - LEGAL PROCEEDINGS
1. Litigation Relating to Electric and Magnetic Fields
On December 9, 1991, NU and CL&P were sued in Connecticut Superior Court
by Melissa Bullock, a nineteen year old woman, and her mother Suzanne
Bullock, both residents of 28 Meadow Street in Guilford, Connecticut. The
plaintiffs allege that they have lived in close proximity to CL&P's Meadow
Street substation and distribution lines since 1979. The suit claims that
Melissa Bullock suffers from a form of brain cancer, and that the cancer and
related physical and psychological injuries were "brought on as a result of
exposure in her home to electromagnetic radiation generated by the
defendants." Suzanne Bullock claims various physical and psychological
injuries, and a diminution in the value of her property. The various counts
against NU and CL&P include allegations of negligence, products liability,
nuisance, unfair trade practices and strict liability. The suit seeks
monetary damages, both compensatory and punitive, in as-yet unspecified
amounts, as well as an injunction to cease emission of "dangerous levels" of
electric and magnetic fields (EMF) into the plaintiffs' home.
The plaintiffs are represented in part by counsel with a nationwide
emphasis on similar litigation, and management considers this lawsuit to be a
test case. The case is presently in the pre-trial discovery process, with
trial anticipated in 1995.
On January 14, 1992, a second lawsuit involving two other plaintiffs was
served on NU and CL&P, also alleging cancer from EMF emanating from CL&P's
Meadow Street substation and distribution lines (the Walston case). The
plaintiffs in the Walston case also live or lived on Meadow Street. They are
represented by the same counsel as the Bullocks, and the claims are nearly
identical to the Bullocks' suit. In a decision issued on October 21, 1993,
the court granted the Company's motion to strike certain counts of the
plaintiff's complaint alleging causes of action based on ultrahazardous
activity and unfair trade practices. This case is also in the pretrial
discovery process; a trial date is not yet known.
Management believes that the allegations that EMF caused or contributed
to the plaintiffs' illnesses are not supported by current scientific studies.
NU and CL&P intend to defend the lawsuits vigorously. For information on EMF
studies and state and federal initiatives, see "Item 1 Business -
Regulatory and Environmental Matters - Electric and Magnetic Fields."
2. Massachusetts Municipal Wholesale Electric Company
On January 8, 1992, a suit was filed in Massachusetts Superior Court by
Massachusetts Municipal Wholesale Electric Company and a number of its
member municipalities, all of which are members of NEPOOL, against other
members of NEPOOL alleging, in summary, that the plaintiffs have been damaged
by NEPOOL's establishment of a minimum size for generating units to be
considered for designation as "Pool-Planned" units. That designation
entitles the owners of an interest in a unit to have their shares of the
output of the unit transmitted to them under a transmission rate that is
generally more favorable than the rates that would be available to them in
the absence of such a designation. The complaint names NU's operating
subsidiaries, CL&P, PSNH, WMECO, HWP and HP&E, as defendants.
After settlement negotiations broke down in April 1993, the defendants
|
moved to dismiss the suit on jurisdictional and other grounds. On December
1, 1993, the Superior Court held that it had jurisdiction to decide the
plaintiffs' claims, but ordered the plaintiffs to join additional NEPOOL
Participants as parties in this action. The defendants are presently
awaiting the court's decision on their motion to dismiss the suit for failure
to state a claim.
In an effort to respond to the concerns that prompted the complaint, the
defendants proposed the 30th Amendment to the NEPOOL Agreement. On June 21,
1993, the plaintiffs moved to enjoin the defendants from filing the 30th
Amendment with state or federal regulatory authorities. The Superior Court
entered the preliminary injunction on July 2, 1993. The defendants
petitioned a Single Justice of the Appeals court for relief from the Order of
the Superior Court, and on September 22, 1993, the Single Justice vacated the
preliminary injunction. The plaintiffs have appealed the Order of the Single
Justice, and their appeal is presently pending before the full bench of the
Appeals Court. After the preliminary injunction was vacated, 29 participants
that were also defendants in the Massachusetts litigation filed the 30th
Amendment with FERC. The Commission has requested additional information
concerning the 30th Amendment, and the Amendment has not yet become
effective.
3. "Municipal Rate" Litigation
CL&P has initiated a challenge in federal court to the DPUC's approval
of an electricity purchase contract for a 13.85 MW resource recovery facility
under Connecticut's so-called "municipal rate law." Under this law, CL&P
would be required to purchase electricity from the resource recovery facility
at a rate equal to the retail rate that CL&P charges municipalities for
electricity, which is significantly higher than CL&P's avoided costs. The
DPUC ordered CL&P to pay the municipal rate for electricity generated from
trash of towns that are CL&P customers. CL&P filed a Federal District Court
action challenging the validity of the municipal rate statute in January
1990. In May 1993, the judge informed the parties that he would require the
parties to ask FERC to resolve the issues in this case. On July 12, 1993,
CL&P filed a Request for Declaratory Ruling with FERC asking FERC to
determine that the municipal rate law was invalid. The FERC has not taken
any action on CL&P's petition.
4. CL&P's Connecticut DPUC Rate Proceeding
In June, 1993 the DPUC approved a multi-year rate plan for CL&P with
increases of 2.01, 2.04 and 2.06 percent, totaling $141.3 million in
additional revenues over three years, beginning July 1, 1993. Two appeals
(one by the City of Hartford and the Connecticut Office of Consumer Counsel
on the multi-year plan and one by CL&P on four issues) filed in the case have
been consolidated in Hartford Superior Court. Oral arguments were held on
October 15, 1993 and February 14, 1994 on CL&P's motion to dismiss the
Hartford/OCC appeal on jurisdictional grounds. Establishment of a briefing
schedule is awaiting a decision on CL&P's motion to dismiss. For additional
information on CL&P's 1992-1993 retail rate case, see Item 1, "Business -
Rates - Connecticut Retail Rates".
5. Housatonic Railroad
Housatonic Railroad (Housatonic) owns and operates an independent
freight and tourist service rail line extending from New Milford to Canaan,
Connecticut. Housatonic is suing CL&P and NUSCO for damages allegedly
|
arising from the partial collapse of a canal at CL&P's Falls Village
hydroelectric facility in 1989. Housatonic claims that the resultant flood
rendered its rail line inoperable. The complaint alleges that CL&P and NUSCO
promised to restore the railroad to operating condition within a few weeks to
a few months and, in any event, before completing the restoration of the
canal. Housatonic maintains that, despite these alleged representations and
the cooperation of Housatonic in the restoration project, CL&P and NUSCO
completely reconstructed the canal before restoring the railroad to operating
condition. Rail service was allegedly interrupted for a year. Housatonic
claims that this interruption deprived the railroad of "growth and
development" it would have otherwise experienced.
Housatonic is seeking relief on the common law grounds of negligence,
strict liability for ultrahazardous activity, nuisance, trespass,
and unjust enrichment. Housatonic alleges damages of $2-$4 million for its
unjust enrichment claim. The case is currently in discovery. NUSCO and
CL&P intend to defend this case vigorously.
6. Connecticut Indian Land Claims
Numerous lawsuits asserting land claims in Connecticut have been either
filed in state and federal court or threatened by a group called the Golden
Hill Paugussett Tribe of Indians (the "Paugussetts"). These actions could
impact the title of certain NU system companies named in the suits to certain
real estate in eight Connecticut towns. Title to the properties of thousands
of other owners, including homeowners, has been similarly threatened. To date,
CL&P has been specifically named as a defendant in only one case, a class
action suit affecting approximately 1,500 property owners in Southbury. On
October 28, 1993, this action was dismissed; however, the dismissal has been
appealed. The outcome of the present or potential litigation either by the
Paugussetts or by other groups claiming to be "Indian tribes" cannot be
predicted at this time. However, a number of possible defenses exist to
Indian land claims in Connecticut, and the Paugussetts' success on the merits
appears unlikely.
7. Litigation Relating to the Reorganization of PSNH
An appeal has been filed against PSNH, et al., by three of PSNH's former
common shareholders, Messrs. Richards, Kaufman and Rochman (RKR), from a
judgment rendered by the U.S. Bankruptcy Court for the District of New
Hampshire. The judgment enjoined RKR and their fellow participants from
commencing a threatened class action against NU and its subsidiaries and
others. RKR's action alleged violations of the Securities Exchange Act of
1934 and sought damages in the amount of $300 million in connection with the
reorganization of PSNH.
After entry of the judgment, another shareholder, Mr. Mascioni, Trustee,
represented by Richards from the RKR group, commenced a class action in U.S.
District Court for the Southern District of New York against the System and
certain of its employees and advisors, alleging the same claims and seeking
the same damages earlier threatened by RKR. An Order of Contempt was
obtained from the Bankruptcy Court directing Mascioni and Richards to
withdraw the action, which they have done. Mascioni and Richards have filed
an appeal from the Order of Contempt. If RKR or Mascioni are successful in
reversing the Judgment or the Order of Contempt, they have stated that they
will commence an action against the System and certain of its employees and
advisors. The System intends vigorously to defend the appeals and if either
|
appeal is successful, it intends vigorously to defend any action by RKR or
Mascioni.
8. Litigation Challenging New Hampshire Property Tax
On January 27, 1992, the United States Supreme Court agreed to exercise
its "original jurisdiction" to hear a suit filed by Attorneys General from
Connecticut, Massachusetts and Rhode Island that asked the Court to overturn
a new property tax on Seabrook. A Special Master, appointed by the U.S.
Supreme Court, rendered his opinion that the New Hampshire law, which created
the Seabrook Tax and granted a credit for the amount paid in Seabrook Tax
against any Business Profits Tax owed, is unconstitutional.
In April, 1993 the matter was settled by the parties before the
United States Supreme Court acted on the report of the Special Master. The
settlement provided for a full refund to all the parties taxed over a two-
year period. The credit for the tax against the New Hampshire Business
Profits Tax was repealed.
9. Termination of the PSNH Chapter 11 Case
PSNH filed a petition for reorganization under Chapter 11 of the
Bankruptcy Code on January 28, 1988. PSNH's reorganization was substantially
completed by NU's acquisition of PSNH on June 5, 1992.
Since the acquisition, five remaining final fee applications have been
pending before the U.S. Bankruptcy Court for the District of New Hampshire,
seeking final fees, expenses and enhancements from PSNH in connection with
the PSNH Chapter 11 bankruptcy case. The law firm of Stutman Treister &
Glatt was seeking an enhancement of $3,155,293 over the $4,344,707 in fees
and $363,928 in expenses billed for legal representation of PSNH, and First
Boston Corp. was seeking $4,500,000 for merger and acquisition services
rendered to PSNH. Paul L. Gioia sought an enhancement of $200,000 over and
above the $268,875 in fees allowed based on his hourly rates under the court
order authorizing his employment as examiner. The United Illuminating
Company was seeking a "benefit to the estate" allowance to cover its costs
and expenses of making its competing bid for PSNH. Rothchild, Inc.,
financial advisor to the Official Committee of Equity Security Holders, was
seeking an enhancement of $1,000,000 over and above the $2,090,000 paid to it
in fees under the order authorizing its retention.
On August 30, 1993, the United States Bankruptcy Court for the District
of New Hampshire issued an "Omnibus Order on Final Fee Awards and Related
Matters". The Order allowed Stutman Treister and Glatt the fees and expenses
they had billed for representation of PSNH over the term of the case in the
amount of $4,344,707 in fees and $363,928 in expenses and denied any
additional fees, including the requested fee enhancement. First Boston Corp.
was denied any additional fees beyond those already collected by it as a
financial advisor during the course of the bankruptcy proceedings. Paul L.
Gioia was awarded an additional $200,000 for his services as examiner during
the proceedings. The United Illuminating Company was denied any fees as an
unsuccessful bidder for PSNH. Rothchild, Inc. was awarded the $1,000,000
enhancement requested on the grounds that exceptional results were obtained
for the equity holders under the circumstances of the PSNH bankruptcy. On
October 1, 1993 the Bankruptcy Court granted PSNH's Application for Final
Decree, closing the bankruptcy proceeding.
|
10. Utility Property - Tax Appeal Matters
On October 15, 1993, the Merrimack County Superior Court issued a
decision dismissing PSNH's appeals of the property taxes assessed against it
by the Town of Bow, New Hampshire for the years 1988, 1989, 1990 and 1991.
The decision rejects the "unit method" of valuation (essentially book cost),
which is the method predominantly used for PSNH's property throughout New
Hampshire, and approves the "reproduction cost method" of valuation. This
change in methodology would result in property tax valuations approximately
three times greater than net book cost, with a commensurate rise in property
taxes in Bow. PSNH has two generating facilities in the Town of Bow:
Merrimack Station, consisting of two coal-fired units with a total capacity
of 459 megawatts, and the Garvins Falls hydroelectric station with an
installed capacity of 12.1 megawatts. PSNH filed an appeal with the New
Hampshire Supreme Court on October 5, 1993. The appeal was accepted by the
New Hampshire Supreme Court on January 26, 1994, with the Company's briefs
due March 7, 1994.
In another property tax matter, Connecticut statues require that every
town revalue all property on its "grand list" at least once every ten years.
In late 1991, the Town of Haddam, Connecticut, where Connecticut Yankee is
located, performed its grand list revaluation. In preparation for this
revaluation, NUSCO property tax personnel had a series of meetings with
the town's Assessor in an attempt to reach an agreement concerning
Connecticut Yankee's value for property tax purposes. In October 1991, the
town's valuation contractor, United Appraisal, toured the Connecticut Yankee
facility. United Appraisal placed a fair market value of $433 million on
Connecticut Yankee. In January 1992, the town's selectmen appropriated funds
to perform a second appraisal of Connecticut Yankee by an engineering
consulting firm.. The town engaged the engineering firm of Dean and
Associates to perform this second valuation. Following a tour of Connecticut
Yankee and receipt of written material from NU, the Dean report was completed
on February 27, 1992. Dean placed a fair market value of $840 million on CY.
The town Assessor accepted Dean's fair market value.
The Company appealed the Assessor's decision to the Haddam Board of
Tax Review. It is Connecticut Yankee's position that the fair value of
Connecticut Yankee is best approximated by the facility's net book value of
$243 million. On May 21, 1992, following a March 18, 1992, hearing, the
Board of Tax Review rejected Connecticut Yankee's appeal and upheld the
Assessor's decision.
Based upon an estimate of the town's mill rate, as valued, Connecticut
Yankee's annual property tax payment is approximately $7.8 million. If
valued at net book value, the tax would be approximately $2.3 million.
The Company appealed the Board of Tax Review's decision to the
Connecticut Superior Court on July 15, 1992. The case is currently in
discovery and no trial schedule has been established.
11. Other Legal Proceedings
The following sections of Item 1 "Business" discuss additional legal
proceedings: "Rates" for information about rate and fuel adjustment clause
proceedings and the reorganization of PSNH's largest customer, NHEC;
"Resource Plans -- Future Needs" for information on proceedings involving
integrated resource planning; "Electric Operations -- Generation and
|
Transmission" for information about proceedings relating to power
transmission issues; "Electric Operations -- Nuclear Generation" for
information related to various Seabrook joint owners, high-level and low-
level radioactive waste disposal, decommissioning matters and NRC regulation;
and "Regulatory and Environmental Matters" for information about proceedings
involving surface water and air quality, toxic substances and hazardous
waste, electric and magnetic fields, licensing of hydroelectric projects, and
other matters.
ITEM 4. Submission of Matters to a Vote of Security Holders (Fourth
Quarter 1993)
A special meeting of Common, Preferred and Class A Preferred
Shareholders of CL&P was held on December 15, 1993, to vote on (1) a
proposal to amend the Certificate of Incorporation as it relates to issuance
or assumption of unsecured indebtedness that would permanently eliminate the
10% limitation on unsecured borrowings for securities with maturities of
less than 10 years and (2) a proposal to consent to the issuance or
assumption of unsecured indebtedness that would authorize the Company to
continue for a period ending March 31, 2004 to issue or assume unsecured
indebtedness in an amount up to 20% of aggregate capitalization.
The votes cast at the meeting were as follows:
FOR AGAINST ABSTAIN
Proposal (1) Common Stock 12,222,930 0 0
Senior Stock 8,468,442 4,174,126 139,210
Proposal (2) Senior Stock 10,503,710 1,581,318 696,750
A special meeting of Common, Preferred and Class A Preferred
Shareholders of WMECO was held on December 15, 1993, to vote on (1) a
proposal to amend the By-laws and Articles of Organization as they relate to
(1) a proposal to amend the Certificate of Incorporation as it relates to
issuance or assumption of unsecured indebtedness that would permanently
eliminate the 10% limitation on unsecured borrowings for securities with
maturities of less than 10 years, (2) a proposal to consent to the issuance
or assumption of unsecured indebtedness that would authorize the Company to
continue for a period ending February 10, 2004 to issue or assume unsecured
indebtedness in an amount up to 20% of aggregate capitalization and (3) a
proposal regarding the location of shareholder meetings .
The votes cast at the meeting were as follows:
FOR AGAINST ABSTAIN
Proposal (1) Common Stock 1,072,471 0 0
Senior Stock 2,485,059 1,096,056 12,865
Proposal (2) Senior Stock 2,680,268 795,767 117,945
Proposal (3) Common Stock 1,072,471 0 0
Senior Stock 2,878,229 625,453 112,074
|
Each Proposal 1 failed to attain the necessary two-thirds approving vote
of all outstanding shares of each class of stock voting, and thus failed to
carry. Each Proposal 2 attained the necessary approving vote of a majority
of all outstanding shares of Senior Stock, and thus carried.
In the case of WMECO's Proposal 3, it attained the necessary two-thirds
approving vote of all outstanding shares of each class of stock voting, and
thus carried.
|
PART II
Item 5. Market for the Registrants' Common Stock and Related
Shareholder Matters
NU. NU declared and paid quarterly dividends of $0.44 in 1993
and $0.44 in 1992. On January 24, 1994, the Board of Trustees
declared a dividend of $0.44 per share, payable on March 31, 1994 to
holders of record on March 1, 1994. The declaration of future
dividends may vary depending on capital requirements and income as
well as financial and other conditions existing at the time.
Information with respect to dividend restrictions for NU and its
subsidiaries is contained in Item 1. Business under the caption
"Financing Program--Financing Limitations" and in Note (b) to the
"Consolidated Statements of Common Shareholders' Equity" on page 34 of
NU's 1993 Annual Report to Shareholders and additional information
with respect to common shares is contained under the caption
"Shareholder Information" on page 54 of NU's 1993 Annual Report to
Shareholders, which information is incorporated herein by reference.
CL&P, PSNH, WMECO, and NAEC. The information required by this
item is not applicable because the common stock of CL&P, PSNH, WMECO,
and NAEC is held solely by NU.
Item 6. Selected Financial Data
NU. Reference is made to information under the heading "Selected
Consolidated Financial Data" contained on pages 50 and 51 of NU's 1993
Annual Report to Shareholders, which information is incorporated
herein by reference.
CL&P. Reference is made to information under the heading
"Selected Financial Data" contained on page 40 of CL&P's 1993 Annual
Report, which information is incorporated herein by reference.
PSNH. Reference is made to information under the heading
"Selected Financial Data" contained on pages 37 and 38 of PSNH's 1993
Annual Report, which information is incorporated herein by reference.
WMECO. Reference is made to information under the heading
"Selected Financial Data" contained on page 34 of WMECO's 1993 Annual
Report, which information is incorporated herein by reference.
NAEC. Reference is made to information under the heading
"Selected Financial Data" contained on page 23 of NAEC's 1993 Annual
Report, which information is incorporated herein by
reference.
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations
NU. Reference is made to information under the heading
"Management's Discussion and Analysis" contained on pages 18 through
25 in NU's 1993 Annual Report to Shareholders, which information is
incorporated herein by reference.
|
CL&P. Reference is made to information under the heading
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" contained on pages 32 through 39 in CL&P's 1993
Annual Report, which information is incorporated herein by reference.
PSNH. Reference is made to information under the heading
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" contained on pages 30 through 35 in PSNH's 1993
Annual Report, which information is incorporated herein by reference.
WMECO. Reference is made to information under the heading
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" contained on pages 28 through 33 in WMECO's
1993 Annual Report, which information is incorporated herein by
reference.
NAEC. Reference is made to information under the heading
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" contained on pages 18 through 22 in NAEC's 1993
Annual Report, which information is incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data
NU. Reference is made to information under the headings "Company
Report," "Report of Independent Public Accountants," "Consolidated
Statements of Income," "Consolidated Statements of Cash Flows,"
"Consolidated Statements of Income Taxes," "Consolidated Balance
Sheets," "Consolidated Statements of Capitalization," "Consolidated
Statements of Common Shareholders' Equity," "Notes to Consolidated
Financial Statements," and "Consolidated Statements of Quarterly
Financial Data" contained on pages 26 through 49 in NU's 1993 Annual
Report to Shareholders, which information is incorporated herein by
reference.
CL&P. Reference is made to information under the headings
"Balance Sheets," "Statements of Income," "Statements of Cash Flows,"
"Statements of Common Stockholder's Equity," "Notes to Financial
Statements," "Report of Independent Public Accountants," and
"Statements of Quarterly Financial Data" contained on pages 1 through
31 and page 40 in CL&P's 1993 Annual Report, which information is
incorporated herein by reference.
PSNH. Reference is made to information under the headings
"Balance Sheets," "Statements of Income," "Statements of Cash Flows,"
Statements of Common Equity," "Notes to Financial Statements," "Report
of Independent Public Accountants," "Independent Auditors' Report,"
and "Statements of Quarterly Financial Data" contained on pages 1
through 29 and page 39 in PSNH's 1993 Annual Report, which information
is incorporated herein by reference.
WMECO. Reference is made to information under the headings
"Balance Sheets," "Statements of Income," "Statements of Cash Flows,"
"Statements of Common Stockholder's Equity," "Notes to Financial
Statements," "Report of Independent Public Accountants," and
"Statements of Quarterly Financial Data" contained on pages 1 through
27 and page 34 in WMECO's 1993 Annual Report, which information is
incorporated herein by reference.
|
NAEC. Reference is made to information under the headings
"Balance Sheet," "Statement of Income," "Statement of Cash Flows,"
"Statement of Common Stockholder's Equity," "Notes to Financial
Statements," "Report of Independent Public Accountants," and
"Statement of Quarterly Financial Data" contained on pages 1 through
17 and page 23 in NAEC's 1993 Annual Report which information is
incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
No event that would be described in response to this item has
occurred with respect to NU, CL&P, PSNH, WMECO, or NAEC.
|
PART III
Item 10. Directors and Executive Officers of the Registrants
NU.
In addition to the information provided below concerning the executive
officers of NU, incorporated herein by reference are pages 1 through 12 of
the definitive proxy statement for solicitation of proxies by NU's Board of
Trustees, dated April 1, 1994 and filed with the Commission pursuant to Rule
14a-6 under the Securities Exchange Act of 1934 (the Act).
First First
Positions Elected Elected
Name Held an Officer a Trustee
William B. Ellis CHB, T 06/15/76 04/26/77
Bernard M. Fox P, CEO, T 05/01/83 05/20/86
CL&P.
First First
Positions Elected Elected
Name Held an Officer a Director
Robert G. Abair D - 01/01/89
Robert E. Busch EVP, CFO, D 06/01/87 06/01/87
John P. Cagnetta SVP, D 06/17/81 05/09/83
William B. Ellis CH, D 06/15/76 06/15/76
Bernard M. Fox VC, D 05/15/81 05/01/83
William T. Frain, Jr. D - 02/01/94
Cheryl W. Grise SVP, D 06/01/91 01/01/94
John B. Keane D - 08/01/92
Francis L. Kinney SVP 04/24/74 -
Frank R. Locke (1) D 10/01/83 05/01/83
Hugh C. MacKenzie P, D 07/01/88 06/06/90
John W. Noyes VP, CONT 07/01/87 -
John F. Opeka D - 06/10/85
PSNH.
First First
Positions Elected Elected
Name Held an Officer a Director
Robert E. Busch EVP, CFO, D 06/05/92 06/05/92
John C. Collins D - 10/19/92
William B. Ellis CH, D 06/05/92 06/05/92
William T. Frain, Jr. P, COO, D 03/18/71 02/01/94
Bernard M. Fox VC, CEO, D 06/05/92 06/05/92
Gerald Letendre D - 10/19/92
Frank R. Locke (1) P, COO, D 06/05/92 06/05/92
Hugh C. MacKenzie D - 02/01/94
Jane E. Newman D - 10/19/92
Dale F. Nitzschke D - 10/19/92
John W. Noyes VP, CONT 06/05/92 -
Robert P. Wax D - 02/01/93
|
WMECO.
First First
Positions Elected Elected
Name Held an Officer a Director
Robert G. Abair D - 01/01/89
Robert E. Busch EVP, CFO, D 06/01/87 06/01/87
John P. Cagnetta SVP, D 06/17/81 05/09/83
William B. Ellis CH, D 06/15/76 06/15/76
Bernard M. Fox VC, D 05/15/81 05/01/83
William T. Frain D - 02/01/94
Cheryl W. Grise SVP, D 06/01/91 01/01/94
John B. Keane D - 08/01/92
Francis L. Kinney SVP 04/24/74 -
Frank R. Locke (1) D - 05/01/83
Hugh C. MacKenzie P, D 07/01/88 06/06/90
John W. Noyes VP, CONT 04/01/92 -
John F. Opeka D - 06/10/85
NAEC.
First First
Positions Elected Elected
Name Held an Officer a Director
Robert E. Busch P, CFO, D 10/21/91 10/16/91
John P. Cagnetta SVP, D 10/21/91 10/16/91
William B. Ellis CH, D 10/21/91 10/16/91
Ted C. Feigenbaum SVP, D 10/21/91 10/16/91
Bernard M. Fox VC, CEO, D 10/21/91 10/16/91
William T. Frain, Jr. D - 02/01/94
Cheryl W. Grise SVP, D 10/21/91 01/01/94
Francis L. Kinney SVP 10/21/91 -
John B. Keane D - 08/01/92
Frank R. Locke (1) SVP, CAO, D 10/21/91 10/16/91
Hugh C. MacKenzie D - 01/01/94
John W. Noyes VP, CONT 10/21/91 -
John F. Opeka EVP, D 10/21/91 10/16/91
KEY: CAO - Chief Administrative Officer EVP - Executive Vice President
CEO - Chief Executive Officer P - President
CFO - Chief Financial Officer SVP - Senior Vice President
CH - Chairman T - Trustee
CHB - Chairman of the Board VC - Vice Chairman
COO - Chief Operating Officer VP - Vice President
CONT - Controller
D - Director
(1) Resigned effective February 1, 1994.
|
Name Age Business Experience During Past 5 Years
Robert G. Abair (1) 55 Elected Vice President and Chief Administrative
Officer of WMECO in 1988.
Robert E. Busch (2) 47 Elected President and Chief Financial Officer
of NAEC in 1994; elected Executive Vice
President and Chief Financial Officer of NU,
CL&P, PSNH, and WMECO in 1992; previously
Executive Vice President and Chief Financial
Officer of NAEC since 1992; Senior Vice
President and Chief Financial Officer of NU,
CL&P and WMECO since 1990.
John P. Cagnetta (3) 61 Elected Senior Vice President of CL&P and WMECO
in 1987 and of NAEC in 1991.
John C. Collins (4) 49 Chief Executive Officer, The Hitchcock Clinic,
Dartmouth - Hitchcock Medical Center since
1977.
William B. Ellis 53 Elected Chairman of the Board of NU in 1993;
elected Chairman of CL&P, NAEC, PSNH and WMECO
in 1993; previously Chairman of the Board and
Chief Executive Officer of NU and Chairman and
Chief Executive Officer of CL&P and WMECO since
1987, NAEC since 1991 and PSNH since 1992.
Ted C. Feigenbaum 43 Elected Senior Vice President of NAEC in 1991;
previously Senior Vice President and Chief
Nuclear Officer of PSNH June, 1992 to
August, 1992; previously President and Chief
Executive Officer - New Hampshire Yankee
Division of PSNHOctober, 1990 to June, 1992 and
Chief Nuclear Production Officer of PSNH
January, 1990 to June, 1992; Senior Vice
President and Chief Operating Officer - New
Hampshire Yankee Division of PSNH (1989-1990)
and Vice President (1987-1989) - New Hampshire
Yankee Division of PSNH.
Bernard M. Fox (5) 51 Elected Vice Chairman of CL&P and WMECO, and
Vice Chairman and Chief Executive Officer of
NAEC, in 1994; previously Chief Executive
Officer of NU, CL&P, PSNH, WMECO and NAEC
in 1993; previously President and Chief
Operating Officer of NU, CL&P and WMECO in 1990
and NAEC since 1991; Vice Chairman of PSNH
since 1992; previously President and Chief
Operating and Financial Officer of NU, CL&P and
WMECO since 1987.
William T. Frain, Jr.(6) 52 Elected President and Chief Operating Officer
of PSNH in 1994; previously Senior Vice
President of PSNH since 1992; previously
Treasurer of PSNH since 1991 and Vice President
of PSNH since 1982.
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Cheryl W. Grise 41 Elected Senior Vice President-Human Resources
and Administrative Services of CL&P, WMECO and
NAEC in 1994; previously Vice President-
Human Resources of NAEC since 1992 and of CL&P
and WMECO since 1991.
John B. Keane (7) 47 Elected Vice President and Treasurer of NU,
CL&P, PSNH, WMECO and NAEC in 1993; previously
Vice President, Secretary and General
Counsel-Corporate of NU, CL&P, PSNH, WMECO and
NAEC since February 1, 1993; previously Vice
President, Assistant Secretary and General
Counsel-Corporate of PSNH and NAEC, Vice
President, Secretary and General
Counsel-Corporate of NU and CL&P, and Vice
President, Secretary, Assistant Clerk and
General Counsel-Corporate of WMECO since 1992;
previously Associate General Counsel of NUSCO
since 1985.
Francis L. Kinney (8) 61 Elected Senior Vice President-
Governmental Affairs of CL&P, WMECO and NAEC in
1994; previously Vice President-Public Affairs
of NAEC since 1992 and of CL&P and WMECO since
1978.
Gerald Letendre 52 President, Diamond Casting & Machine Co., Inc.
since 1972.
Frank R. Locke 66 Resigned effective February 1, 1994; previously
President and Chief Operating Officer of PSNH
since in 1992 and Senior Vice President and
Chief Administrative Officer-New Hampshire of
NAEC since 1991; and of NUSCO since
1990; previously Senior Vice President of
NUSCO since 1988.
Hugh C. MacKenzie (9) 51 Elected President of CL&P and WMECO in 1994;
previously Senior Vice President-Customer
Service Operations of CL&P and WMECO since
1990; previously Vice President of CL&P and
WMECO since 1988.
Jane E. Newman (10) 48 President, Coastal Broadcasting Corporation
since 1992; previously Assistant to the
President of the United States for Management
and Administration from 1989 to 1991 and
President of the Business and Industry
Association of New Hampshire from 1985 to 1988.
Dale F. Nitzschke 56 President, University of New Hampshire, Durham,
New Hampshire since 1990; previously President,
Marshall University, Huntington, West Virginia
from 1984 to 1990.
John W. Noyes 46 Elected Vice President and Controller of NU,
CL&P, PSNH, WMECO and NAEC in 1992; previously
Vice President of CL&P and WMECO since 1987.
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John F. Opeka (11) 53 Elected Executive Vice President - Nuclear of
NAEC in 1991 and of NUSCO in 1986, previously
Executive Vice President - Nuclear of CL&P
and WMECO from 1986 to 1993.
Robert P. Wax 45 Elected Vice President, Secretary and General
Counsel of NU and CL&P, Vice President,
Secretary, Assistant Clerk and General Counsel
of WMECO and Vice President, Assistant
Secretary and General Counsel of PSNH and NAEC
in 1993; previously Vice President and General
Counsel-Regulatory of NU, CL&P, PSNH, WMECO and
NAEC since 1992; previously Associate General
Counsel of NUSCO since 1985.
_____________________
(1) Trustee of Easthampton Savings Bank.
(2) Director Connecticut Yankee Atomic Power Company.
(3) Director of Connecticut Yankee Atomic Power Company.
(4) Director of Fleet Bank - New Hampshire.
(5) Chairman of the Board of The Institute of Living, and a Director of
Shawmut Bank Connecticut, N.A., Shawmut Bank, N.A. and Shawmut National
Corp., Mount Holyoke College, Connecticut Yankee Atomic Power Company and
The Dexter Corporation.
(6) Director of Connecticut Yankee Atomic Power Company, Maine Yankee Atomic
Power Company and Yankee Atomic Power Company.
(7) Director of Maine Yankee Atomic Power Company, Vermont Yankee Nuclear
Power Corporation and Yankee Atomic Power Company.
(8) Director of Mid-Conn Bank.
(9) Director of Connecticut Yankee Atomic Power Company.
(10) Director of Fleet Bank - New Hampshire, Perini Corporation and New
England Telephone.
(11) Director of Connecticut Yankee Atomic Power Company, Maine Yankee Atomic
Power Company, Vermont Yankee Nuclear Power Corporation and Yankee
Atomic Electric Company.
There are no family relationships between any director or executive
officer and any other director or executive officer of NU, CL&P, PSNH, WMECO
or NAEC.
Item 11. Executive Compensation
NU.
Incorporated herein by reference are pages 7 through 12 of the definitive
proxy statement for solicitation of proxies by NU's Board of Trustees, dated
April 1, 1994 and filed with the Commission pursuant to Rule 14a-6 under the
Act.
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SUMMARY COMPENSATION TABLE
CL&P, PSNH, WMECO, and NAEC.
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
The following table presents the cash and non-cash compensation received
by the five highest-paid executive officers of CL&P, PSNH, WMECO and NAEC, in
accordance with rules of the Securities and Exchange Commission (SEC):
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Annual Compensation Long Term Compensation
------------------------------ ----------------------------------------
Awards Payouts
----------------------- ----------------
Name and Year Salary Bonus ($) Other Restricted Options/ Long All Other
Principal Position ($) (Note 1) Annual Award(s) Stock Term Compensa-
Compen- ($) Apprecia- Incentive tion ($)
sation (Note 1) tion Program (Note 3)
($) (Note 2) Rights(#) Payouts
($)
- ---------------- ------- ------- ---------- ------- ---------- --------- -------- ---------
Bernard M. Fox 1993 478,775 (Note 4) None None None 61,155 7,033
President and 1992 424,517 54,340 None None None 19,493 6,860
Chief Executive 1991 402,333 103,872 None 38,173 None 15,398 3,380
Officer (Note 5)
- --------------------------------------------------------------------------------------------------------
William B. Ellis 1993 521,250 (Note 4) None None None 87,363 None
Chairman 1992 522,212 97,029 None None None 30,707 None
(Note 5) 1991 500,000 185,519 None 54,608 None 24,451 None
- --------------------------------------------------------------------------------------------------------
John F. Opeka 1993 277,304 (Note 4) None None None 40,014 6,875
Executive Vice 1992 268,958 19,644 None None None 14,017 6,813
President 1991 260,600 49,676 None 28,498 None 11,184 3,385
- --------------------------------------------------------------------------------------------------------
Robert E. Busch 1993 255,915 (Note 4) None None None 32,337 7,072
Executive Vice 1992 236,654 27,934 None None None 10,040 6,866
President 1991 212,333 46,597 None 23,026 None 7,444 3,185
- --------------------------------------------------------------------------------------------------------
John P. Cagnetta 1993 208,900 (Note 4) None None None 29,679 6,134
Senior Vice 1992 200,462 21,635 None None None 10,730 6,014
President 1991 194,266 35,446 None 17,893 None 8,909 2,913
- --------------------------------------------------------------------------------------------------------
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Notes:
1. Until 1991, awards under the short-term programs of the Northeast tilities Executive Incentive Compensation Program (EICP) were made in restricted stock. In 1991, the Northeast Utilities Executive Incentive Plan (EIP) was adopted, which did not require restricted stock awards. Awards under the 1991 and 1992 short-term programs under the EIP were paid in 1992 and 1993, respectively, in the form of unrestricted stock and, in accordance with the requirements of the SEC, are included as "bonus" in the years earned.
2. The five executive officers listed in the table above each received an award of restricted stock in May, 1991 (which vested in January, 1993), under the EICP. The number of shares in each such award is shown below. All restricted stock awards under the EICP vested prior to December 31, 1993.
Name Shares B. M. Fox 1,807 W. B. Ellis 2,585 J. F. Opeka 1,349 R. E. Busch 1,090 J. P. Cagnetta 847 |
3. "All Other Compensation" consists of employer matching contributions under the Northeast Utilities Service Company Supplemental Retirement and Savings Plan (401(k) Plan), generally available to all eligible employees. In 1993, the employer match for non-union employees was 100 percent of the first three percent of compensation contributed on a before-tax basis.
4. Awards under the short-term program of the EIP have typically been made by NU's Committee on Organization, Compensation and Board Affairs in April each year. Based on preliminary estimates of corporate performance, and assuming that the individual performance levels of Messrs. Opeka, Busch and Cagnetta approximate those of other system officers, it is estimated that the five executive officers listed in the table above would receive the following awards: Mr. Fox - $180,780; Mr. Ellis - $160,693; Mr. Busch - $64,946; Mr. Opeka - $64,946; and Dr. Cagnetta - $43,828.
5. Mr. Fox served as President and Chief Operating Officer of CL&P, NAEC and WMECO and Vice Chairman and Chief Operating Officers of PSNH until July 1, 1993, when he became President and Chief Executive Officer of CL&P, NAEC and WMECO and Vice Chairman and Chief Executive Officer of PSNH. Mr. Ellis served as Chairman and Chief Executive Officer of these companies until July 1, 1993, when he became Chairman. Amounts listed in the "Long Term Incentive Program" column of the Summary Compensation Table for 1993 were received by these individuals prior to their change in responsibilities. $267,500 of Mr. Ellis's 1993 salary was paid prior to July 1, 1993, while he was Chief Executive Officer, and $253,750 was paid after July 1, 1993. $217,500 of Mr. Fox's 1993 salary was paid prior to July 1, 1993, and $261,275 was paid after Mr. Fox became Chief Executive Officer on July 1, 1993.
PENSION BENEFITS
The following table shows the estimated annual retirement benefits payable to an executive officer of NU, CL&P, WMECO, PSNH and NAEC upon retirement, assuming that retirement occurs at age 65 and that the officer is at that time not only eligible for a pension benefit under the Northeast Utilities Service Company Retirement Plan (the Retirement Plan) but also eligible for the "make-whole benefit" and the "target benefit" under the Supplemental Executive Retirement Plan for Officers of Northeast Utilities System Companies (the Supplemental Plan). The Supplemental Plan is a non-qualified pension plan providing supplemental retirement income to System officers. The "make-whole benefit" under the Supplemental Plan makes up for benefits lost through application of certain tax code limitations on the benefits that may be provided under the Retirement Plan, and is available to all officers. The "target benefit" further supplements these benefits and is available to officers at the Senior Vice President level and higher who are selected by the NU Board of Trustees to participate in the target benefit and who remain in the employ of NU companies until at least age 60 (unless the NU Board of Trustees sets an earlier age). Each of the executive officers of NU, CL&P, WMECO, PSNH and NAEC named in the summary compensation table above is currently eligible for a target benefit. If an executive officer were not eligible for a target benefit at the time of retirement, a lower level of retirement benefits would be paid.
The benefits presented are based on a straight life annuity beginning at age 65 and do not take into account any reduction for joint and survivorship annuity payments.
Years of Credited Service
Final Average ------------------------------------------------------
Compensation 15 20 25 30 35
- ------------------ ------------------------------------------------------
$ 125,000 $ 45,000 $ 60,000 $ 75,000 $ 75,000 $ 75,000
$ 150,000 $ 54,000 $ 72,000 $ 90,000 $ 90,000 $ 90,000
$ 175,000 $ 63,000 $ 84,000 $105,000 $105,000 $105,000
$ 200,000 $ 72,000 $ 96,000 $120,000 $120,000 $120,000
$ 225,000 $ 81,000 $108,000 $135,000 $135,000 $135,000
$ 250,000 $ 90,000 $120,000 $150,000 $150,000 $150,000
$ 300,000 $108,000 $144,000 $180,000 $180,000 $180,000
$ 350,000 $126,000 $168,000 $210,000 $210,000 $210,000
$ 400,000 $144,000 $192,000 $240,000 $240,000 $240,000
$ 450,000 $162,000 $216,000 $270,000 $270,000 $270,000
$ 500,000 $180,000 $240,000 $300,000 $300,000 $300,000
$ 600,000 $216,000 $288,000 $360,000 $360,000 $360,000
$ 700,000 $252,000 $336,000 $420,000 $420,000 $420,000
$ 800,000 $288,000 $384,000 $480,000 $480,000 $480,000
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Final average compensation for purposes of calculating the "target benefit" is the highest average annual compensation of the participant during any 36 consecutive months compensation was earned. Compensation taken into account under the "target benefit" described above includes salary, bonus, restricted stock awards, and long-term incentive payouts shown in the Summary Compensation Table above, but does not include employer matching contributions under the Northeast Utilities Service Company Supplemental Retirement and Savings Plan (401(k)) Plan. In the event that an officer's employment terminates because of disability, the retirement benefits shown above would be offset by the amount of any disability benefits payable to the recipient that are attributable to contributions made by NU and its subsidiaries under long term disability plans and policies.
As of December 31, 1993, the five executive officers named in the Summary Compensation Table above had the following years of credited service for retirement compensation purposes: Mr. Fox - 29, Mr. Ellis - 17, Mr. Opeka - 23, Mr. Busch - 20 and Dr. Cagnetta - 21. Assuming that retirement were to occur at age 65 for these officers, retirement would occur with 43, 29, 35, 38 and 25 years of credited service, respectively.
NU has entered into agreements with Messrs. Ellis and Fox to provide for an orderly management succession. The agreement with Mr. Ellis calls for him to work with the NU Board of Trustees and Mr. Fox to effect the orderly transition of his responsibilities to Mr. Fox. In accordance with the agreement, Mr. Ellis stepped down as Chief Executive Officer of NU, CL&P, WMECO, PSNH and NAEC as of July 1, 1993. The agreement anticipates his retirement as of August 1, 1995.
The agreement provides that, upon his retirement, Mr. Ellis will be entitled to receive from NU and its subsidiaries a target benefit under the Supplemental Plan. His target benefit will be based on the greater of his actual final average compensation or an amount determined as if his salary had increased each year since 1991 at a rate equal to the average rate of the increases of all other target benefit participants and as if he had received incentive awards each year based on this modified salary, but with the same performance as the Chief Executive Officer at the time. The agreement also provides specified death and disability benefits for the period before Mr. Ellis's 1995 retirement.
The agreement with Mr. Fox states that if he is terminated as Chief
Executive Officer without cause, he will be entitled to specified severance pay
and benefits. Those benefits consist primarily of (i) two years' base pay,
medical, dental and life insurance benefits, (ii) a supplemental retirement
benefit equal to the difference between the target benefit he would be entitled
to receive if he had reached the age of 55 on the termination date and the
actual target benefit to which he is entitled as of the termination date, and
(iii) a target benefit under the Supplemental Plan, notwithstanding that he
might not have reached age 60 on the termination date and notwithstanding other
forfeiture provisions of that plan. The agreement also provides specified death
and disability benefits. The agreement terminates two years after NU gives
Mr. Fox a notice of termination, but no earlier than the date he becomes 55.
The agreements do not address the officers' normal compensation and benefits, which are to be determined by NU's Committee on Organization, Compensation and Board Affairs and the NU Board of Trustees in accordance with their customary practices.
Item 12. Security Ownership of Certain Beneficial Owners and Management
NU.
Incorporated herein by reference are pages 5 through 12 of the definitive proxy statement for solicitation of proxies by NU's Board of Trustees, dated April 1, 1994 and filed with the Commission pursuant to Rule 14a-6 under the Act.
CL&P, PSNH, WMECO and NAEC.
As of February 28, 1994, the Directors of CL&P, PSNH, WMECO and NAEC, beneficially owned the following number of shares of each class of equity securities of NU. No equity securities of CL&P, PSNH or WMECO are owned by the Directors and Executive Officers.
CL&P, PSNH, WMECO, and NAEC DIRECTORS AND NAMED EXECUTIVE OFFICERS
Amount and
Nature of
Title Of Name of Beneficial Percent of
Class Beneficial Owner Ownership (1) Class (2)
NU Common Robert G. Abair (3) (621) 4,271 shares
NU Common Robert E. Busch (772) 6,054 shares
NU Common John P. Cagnetta (4) (581) 3,979 shares
NU Common John C. Collins (5) 0 shares
NU Common William B. Ellis (6) (1,259) 14,837 shares
NU Common Ted C. Feigenbaum(7) 151 shares
NU Common Bernard M. Fox (8) (1,072) 17,428 shares
NU Common William T. Frain, Jr. 885 shares
NU Common Cheryl W. Grise (221) 1,349 shares
NU Common John B. Keane (9) (368) 1,146 shares
NU Common Francis L. Kinney (10) (303) 3,781 shares
NU Common Gerald Letendre (5) 0 shares
NU Common Hugh C. MacKenzie (4)(11) (779) 4,277 shares
NU Common Jane E. Newman (5) 0 shares
NU Common Dale F. Nitzschke (5) 0 shares
NU Common John W. Noyes (658) 2,789 shares
NU Common John F. Opeka (4)(12) (1,075) 16,463 shares
NU Common Robert P. Wax (5) (651) 1,436 shares
Amount beneficially owned by Directors
and Executive Officers as a group - CL&P (7,709) 77,259 shares
- PSNH (6,790) 69,299 shares
- WMECO (7,709) 77,259 shares
- NAEC (7,088) 73,139 shares
|
(1) Unless otherwise noted, each Director and Executive Officer of CL&P, PSNH, WMECO and NAEC has sole voting and investment power with respect to the listed shares. The numbers in parentheses reflect the number of shares owned by each Director and Executive Officer under the Northeast Utilities Service Company Supplemental Retirement and Savings Plan (401(k) Plan), as to which the Officer has no investment power.
(2) As of February 28, 1994 there were 134,208,461 common shares of NU outstanding. The percentage of such shares beneficially owned by any Director or Executive Officer, or by all Directors and Executive Officers of CL&P, PSNH, WMECO and NAEC as a group, does not exceed one percent.
(3) Mr. Abair is a Director of CL&P and WMECO only.
(4) Mr. Opeka and Dr. Cagnetta are not officers of PSNH, but each in his capacity as an officer (with the stated title) of NUSCO, an affiliate of PSNH, performs policy-making functions for PSNH.
(5) Messrs. Collins, Letendre, Nitzschke and Wax and Ms. Newman areDirectors of PSNH only.
(6) Mr. Ellis shares voting and investment power with his wife for 1,117 shares.
(7) Mr. Feigenbaum is a Director and an Executive Officer of NAEC only.
(8) Mr. Fox shares voting and investment power with his wife for 3,031 of these shares. In addition, Mr. Fox's wife has sole voting and investment power for 140 shares, as to which Mr. Fox disclaims beneficial ownership.
(9) Mr. Keane is a Director of CL&P, WMECO and NAEC only.
(10) Mr. Kinney shares voting and investment power with his wife for 2,155 shares.
(11) Mr. MacKenzie shares voting and investment power with his wife for 1,259 shares.
(12) Mr. Opeka shares voting and investment power with his wife for 1,718 shares.
Item 13. Certain Relationships and Related Transactions
NU.
Incorporated herein by reference is page 14 of the definitive proxy statement for solicitation of proxies by NU's Board of Trustees, dated April 1, 1994 and filed with the Commission pursuant to Rule 14a-6 under the Act.
CL&P, PSNH, WMECO and NAEC.
No relationships or transactions that would be described in response to this item exist now or existed during 1993 with respect to CL&P, PSNH, WMECO and NAEC.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K
(a) 1. Financial Statements:
The Report of Independent Public Accountants and financial statements of NU, CL&P, PSNH, WMECO, and NAEC are hereby incorporated by reference and made a part of this report (see "Item 8. Financial Statements and Supplementary Data").
Reports of Independent Public Accountants
on Schedules S-1
Consents of Independent Public Accountants S-3
2. Schedules:
Financial Statement Schedules for NU
(Parent), NU and Subsidiaries, CL&P,
PSNH, WMECO, and NAEC are listed
in the Index to Financial Statement
Schedules S-5
3. Exhibits Index E-1
(b) Reports on Form 8-K:
During the fourth quarter of 1993, the companies
filed Form 8-Ks dated December 2, 1993 disclosing
the following:
o On December 2, 1993, the Northeast Utilities
system announced a reorganization of its corporate
structure.
o On December 3, 1993, NNECO was informed by the NRC
that it was being assessed a civil penalty in
response to repair activities at Millstone 2.
In addition, the Form 8-K dated December 2, 1993 which
was filed by PSNH also discussed the following:
o On June 8, 1992, PSNH changed its independent
public accountant.
|
NORTHEAST UTILITIES
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: March 18, 1994 By /s/ William B. Ellis
-------------- ---------------------------
William B. Ellis
Chairman of the Board
|
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Date Title Signature
---- ----- ---------
March 18, 1994 Trustee and Chairman /s/ William B. Ellis
- -------------- of the Board -------------------------
William B. Ellis
March 18, 1994 Trustee, President /s/ Bernard M. Fox
- -------------- and Chief Executive -------------------------
Officer Bernard M. Fox
March 18, 1994 Executive Vice /s/ Robert E. Busch
- -------------- President and Chief -------------------------
Financial Officer Robert E. Busch
March 18, 1994 Vice President and /s/ John B. Keane
- -------------- Treasurer -------------------------
John B. Keane
March 18, 1994 Vice President and /s/ John W. Noyes
- -------------- Controller -------------------------
John W. Noyes
|
NORTHEAST UTILITIES
SIGNATURES (CONT'D)
Date Title Signature
---- ----- ---------
March 18, 1994 Trustee /s/ Cotton Mather Cleveland
- -------------- ---------------------------
Cotton Mather Cleveland
March 18, 1994 Trustee /s/ George David
- -------------- ---------------------------
George David
March 18, 1994 Trustee /s/ Donald J. Donahue
- -------------- ---------------------------
Donald J. Donahue
March 18, 1994 Trustee /s/ Eugene D. Jones
- -------------- ---------------------------
Eugene D. Jones
March 18, 1994 Trustee /s/ Elizabeth T. Kennan
- -------------- ---------------------------
Elizabeth T. Kennan
Trustee
- -------------- ---------------------------
Denham C. Lunt, Jr.
March 18, 1994 Trustee /s/ William J. Pape II
- -------------- ---------------------------
William J. Pape II
March 18, 1994 Trustee /s/ Robert E. Patricelli
- -------------- ---------------------------
Robert E. Patricelli
Trustee
- -------------- ---------------------------
Norman C. Rasmussen
Trustee
- -------------- ---------------------------
John F. Swope
|
THE CONNECTICUT LIGHT AND POWER COMPANY
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: March 18, 1994 By /s/ William B. Ellis
-------------- ---------------------
William B. Ellis
Chairman
|
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Date Title Signature
---- ----- ---------
March 18, 1994 Chairman and Director /s/ William B. Ellis
- -------------- --------------------------
William B. Ellis
March 18, 1994 Vice Chairman and /s/ Bernard M. Fox
- -------------- Director --------------------------
Bernard M. Fox
March 18, 1994 President and Director /s/ Hugh C. MacKenzie
- -------------- --------------------------
Hugh C. MacKenzie
March 18, 1994 Executive Vice /s/ Robert E. Busch
- -------------- President, Chief --------------------------
Financial Officer Robert E. Busch
and Director
March 18, 1994 Vice President and /s/ John W. Noyes
- -------------- Controller --------------------------
John W. Noyes
|
THE CONNECTICUT LIGHT AND POWER COMPANY
SIGNATURES (CONT'D)
Date Title Signature
---- ----- ---------
- ------------------- Director --------------------------
Robert G. Abair
March 18, 1994 Director /s/ John P. Cagnetta
- ------------------- --------------------------
John P. Cagnetta
March 18, 1994 Director /s/ William T. Frain, Jr.
- ------------------- --------------------------
William T. Frain, Jr.
March 18, 1994 Director /s/ Cheryl W. Grise
- ------------------- -----------------------
Cheryl W. Grise
March 18, 1994 Director /s/ John B. Keane
- ------------------- -----------------------
John B. Keane
March 18, 1994 Director /s/ John F. Opeka
- ------------------- -----------------------
John F. Opeka
|
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: March 18, 1994 By /s/ William B. Ellis
-------------- -------------------------
William B. Ellis
Chairman
|
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Date Title Signature
---- ----- ---------
March 18, 1994 Chairman and Director /s/ William B. Ellis
- -------------- --------------------------
William B. Ellis
March 18, 1994 Vice Chairman, Chief /s/ Bernard M. Fox
- -------------- Executive Officer and --------------------------
Director Bernard M. Fox
March 18, 1994 President, Chief /s/ William T. Frain, Jr.
- -------------- Operating Officer --------------------------
and Director William T. Frain, Jr.
March 18, 1994 Executive Vice /s/ Robert E. Busch
- -------------- President, Chief --------------------------
Financial Officer Robert E. Busch
and Director
March 18, 1994 Vice President and /s/ John W. Noyes
- -------------- Controller --------------------------
John W. Noyes
|
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
SIGNATURES (CONT'D)
Date Title Signature
---- ----- ---------
March 18, 1994 Director /s/ John C. Collins
- ------------------- --------------------------
John C. Collins
March 18, 1994 Director /s/ Gerald Letendre
- ------------------- --------------------------
Gerald Letendre
March 18, 1994 Director /s/ Hugh C. MacKenzie
- ------------------- --------------------------
Hugh C. MacKenzie
March 18, 1994 Director /s/ Jane E. Newman
- ------------------- --------------------------
Jane E. Newman
March 18, 1994 Director /s/ Dale S. Nitzschke
- ------------------- --------------------------
Dale S. Nitzschke
March 18, 1994 Director /s/ Robert P. Wax
- ------------------- --------------------------
Robert P. Wax
|
WESTERN MASSACHUSETTS ELECTRIC COMPANY
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: March 18, 1994 By /s/ William B. Ellis
-------------- --------------------
William B. Ellis
Chairman
|
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Date Title Signature
---- ----- ---------
March 18, 1994 Chairman and Director /s/ William B. Ellis
- -------------- --------------------------
William B. Ellis
March 18, 1994 Vice Chairman and /s/ Bernard M. Fox
- -------------- Director --------------------------
Bernard M. Fox
March 18, 1994 President and Director /s/ Hugh C. MacKenzie
- -------------- --------------------------
Hugh C. MacKenzie
March 18, 1994 Executive Vice /s/ Robert E. Busch
- -------------- President, Chief --------------------------
Financial Officer Robert E. Busch
and Director
March 18, 1994 Vice President and /s/ John W. Noyes
- -------------- Controller --------------------------
John W. Noyes
|
WESTERN MASSACHUSETTS ELECTRIC COMPANY
SIGNATURES (CONT'D)
Date Title Signature
---- ----- ---------
- ------------------- Director --------------------------
Robert G. Abair
March 18, 1994 Director /s/ John P. Cagnetta
- ------------------- --------------------------
John P. Cagnetta
March 18, 1994 Director /s/ William T. Frain, Jr.
- ------------------- --------------------------
William T. Frain, Jr.
March 18, 1994 Director /s/ Cheryl W. Grise
- ------------------- -----------------------
Cheryl W. Grise
March 18, 1994 Director /s/ John B. Keane
- ------------------- -----------------------
John B. Keane
March 18, 1994 Director /s/ John F. Opeka
- ------------------- -----------------------
John F. Opeka
|
NORTH ATLANTIC ENERGY CORPORATION
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: March 18, 1994 By /s/ William B. Ellis
-------------- ---------------------
William B. Ellis
Chairman
|
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Date Title Signature
---- ----- ---------
March 18, 1994 Chairman and Director /s/ William B. Ellis
- -------------- --------------------------
William B. Ellis
March 18, 1994 Vice Chairman, Chief /s/ Bernard M. Fox
- -------------- Executive Officer and --------------------------
Director Bernard M. Fox
March 18, 1994 President, Chief /s/ Robert E. Busch
- -------------- Operating Officer --------------------------
and Director Robert E. Busch
March 18, 1994 Vice President and /s/ John W. Noyes
- -------------- Controller --------------------------
John W. Noyes
|
NORTH ATLANTIC ENERGY CORPORATION
SIGNATURES (CONT'D)
Date Title Signature
---- ----- ---------
March 18, 1994 Director /s/ John P. Cagnetta
- -------------- --------------------------
John P. Cagnetta
- -------------- Director --------------------------
Ted C. Feigenbaum
March 18, 1994 Director /s/ William T. Frain. Jr.
- -------------- --------------------------
William T. Frain, Jr.
March 18, 1994 Director /s/ Cheryl W. Grise
- -------------- --------------------------
Cheryl W. Grise
March 18, 1994 Director /s/ John B. Keane
- -------------- --------------------------
John B. Keane
March 18, 1994 Director /s/ Hugh C. MacKenzie
- -------------- --------------------------
Hugh C. MacKenzie
March 18, 1994 Director /s/ John F. Opeka
- -------------- --------------------------
John F. Opeka
|
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULES
We have audited in accordance with generally accepted auditing standards, the financial statements included in Northeast Utilities' annual report to shareholders and The Connecticut Light and Power Company's, Western Massachusetts Electric Company's, North Atlantic Energy Corporation's, and Public Service Company of New Hampshire's annual reports, incorporated by reference in this Form 10-K, and have issued our reports thereon dated February 18, 1994. Our reports on the financial statements include an explanatory paragraph with respect to the change in methods of accounting for property taxes, postretirement benefits other than pensions, income taxes, and employee stock ownership plans, as applicable to each company, as explained in Note 1 to the related company's financial statements. Our audits were made for the purpose of forming an opinion on each company's statements taken as a whole. The schedules listed in the index to financial statement schedules are the responsibility of each company's management and are presented for purposes of complying with the Securities and Exchange Commission's rules and are not part of each company's basic financial statements. The schedules have been subjected to the auditing procedures applied in the audits of each company's basic financial statements and, in our opinion, fairly state in all material respects the financial data required to be set forth therein in relation to each company's basic financial statements taken as a whole.
/s/ ARTHUR ANDERSEN & CO.
ARTHUR ANDERSEN & CO.
Hartford, Connecticut
February 18, 1994
|
INDEPENDENT AUDITORS' REPORT ON SCHEDULES
The Board of Directors
Public Service Company of New Hampshire:
Under date of February 7, 1992, we reported on the balance sheet and statement of capitalization of Public Service Company of New Hampshire as of December 31, 1991 (not presented in the 1993 annual report to stockholders) and the related statements of income, cash flows and common stock equity for the periods January 1, 1991 to May 15, 1991 and May 16, 1991 to December 31, 1991, as contained in the annual report to stockholders of Public Service Company for the year 1993. These financial statements and our report thereon are incorporated by reference herein. In connection with our audits of the aforementioned financial statements, we have also audited the related financial statement schedules as listed in the accompanying index. These financial statement schedules are the responsibility of the Company's management. Our responsiblity is to express an opinion on these financial statement schedules based on our audit.
In our opinion, such financial statement schedules, when considered in relation to the basic financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.
/s/ KPMG Peat Marwick
KPMG Peat Marwick
Boston, Massachusetts
February 7, 1992
|
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by reference of our reports in this Form 10-K, into previously filed Registration Statement No. 33-13444, No. 33-46291 , No. 33-59430, and No. 33-50853 of The Connecticut Light and Power Company, No. 33-34886, No. 33-51185 and No. 33-25619 of Western Massachusetts Electric Company, and No. 33-34622 and No. 33-40156 of Northeast Utilities.
/s/ ARTHUR ANDERSEN & CO.
ARTHUR ANDERSEN & CO.
Hartford, Connecticut
March 18, 1994
|
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Public Service Company of New Hampshire:
We consent to the use of our reports included or incorporated by reference herein.
/s/ KPMG Peat Marwick
KPMG Peat Marwick
Boston, Massaschusetts
March 18, 1994
|
INDEX TO FINANCIAL STATEMENT SCHEDULES
Schedule Page
- -------- ----
III. Financial Information of Registrant:
Northeast Utilities (Parent) Balance
Sheets 1993 and 1992 S-7
Northeast Utilities (Parent) Statements
of Income 1993, 1992, and 1991 S-8
Northeast Utilities (Parent) Statements
of Cash Flows 1993, 1992, and 1991 S-9
V. Utility Plant 1993, 1992, and 1991:
Northeast Utilities and Subsidiaries S-10 -- S-12
The Connecticut Light and Power Company S-13 -- S-15
Public Service Company of New Hampshire S-16 -- S-20
Western Massachusetts Electric Company S-21 -- S-23
North Atlantic Energy Corporation S-24 -- S-25
V. Nuclear Fuel 1993, 1992, and 1991:
Northeast Utilities and Subsidiaries S-26 -- S-28
The Connecticut Light and Power Company S-29 -- S-31
Public Service Company of New Hampshire S-32 -- S-36
Western Massachusetts Electric Company S-37 -- S-39
North Atlantic Energy Corporation S-40 -- S-41
VI. Accumulated Provision for Depreciation
of Utility Plant 1993, 1992, and 1991:
Northeast Utilities and Subsidiaries S-42 -- S-44
The Connecticut Light and Power Company S-45
Public Service Company of New Hampshire S-46 -- S-48
Western Massachusetts Electric Company S-49
North Atlantic Energy Corporation S-50
VIII. Valuation and Qualifying Accounts and Reserves
1993, 1992, and 1991:
Northeast Utilities and Subsidiaries S-51 -- S-53
The Connecticut Light and Power Company S-54 -- S-56
Public Service Company of New Hampshire S-57 -- S-61
Western Massachusetts Electric Company S-62 -- S-64
|
Schedule Page
- -------- ----
IX. Short-Term Borrowings 1993, 1992, and 1991:
Northeast Utilities and Subsidiaries S-65
The Connecticut Light and Power Company S-66
Public Service Company of New Hampshire S-67
Western Massachusetts Electric Company S-68
North Atlantic Energy Corporation S-69
X. Supplementary Income Statement Information
1993, 1992, and 1991:
Northeast Utilities and Subsidiaries S-70
The Connecticut Light and Power Company S-71
Public Service Company of New Hampshire S-72
Western Massachusetts Electric Company S-73
North Atlantic Energy Corporation S-74
|
All other schedules of the companies' for which provision is made in the applicable regulations of the Securities and Exchange Commission are not required under the related instructions or are not applicable, and therefore have been omitted.
1993 1992
---------- ----------
ASSETS
- ------
Other Property and Investments:
Investments in subsidiary companies, at
equity............................................... $2,505,950 $2,428,669
Investments in transmission companies, at equity...... 26,535 27,655
Other, at cost........................................ 1,710 1,742
----------- -----------
2,534,195 2,458,066
----------- -----------
Current Assets:
Cash and special deposits............................. 72 73
Notes receivable from affiliated companies............ 19,625 52,600
Taxes receivable...................................... 485 -
Receivables from affiliated companies................. 32,638 7,626
Prepayments........................................... 73 11
----------- -----------
52,893 60,310
----------- -----------
Deferred Charges:
Accumulated deferred income taxes..................... 5,859 2,660
Unamortized debt expense.............................. 45 50
Other................................................. 42 165
----------- -----------
5,946 2,875
----------- -----------
Total Assets..................................... $2,593,034 $2,521,251
=========== ===========
CAPITALIZATION AND LIABILITIES
- ------------------------------
Capitalization:
Common Shareholders' Equity:
Common shares, $5 par value--Authorized
225,000,000 shares; 134,207,025 shares issued and
124,326,836 shares outstanding in 1993 and
133,862,919 shares issued and outstanding in 1992... $ 671,035 $ 669,315
Capital surplus, paid in.............................. 901,740 897,317
Deferred benefit plan--employee stock ownership plan.. (228,205) (240,399)
Retained earnings..................................... 879,518 847,744
----------- -----------
Total common shareholders' equity................... 2,224,088 2,173,977
Long-term debt........................................ 236,000 245,000
----------- -----------
Total capitalization................................ 2,460,088 2,418,977
----------- -----------
Current Liabilities:
Notes payable to banks................................ 72,500 70,500
Long-term debt and preferred stock--current portion... 9,000 5,000
Accounts payable...................................... 5,048 6,107
Accounts payable to affiliated companies.............. 42,459 14,334
Accrued taxes......................................... - 2,283
Accrued interest...................................... 3,311 3,491
Other................................................. 13 13
----------- -----------
132,331 101,728
----------- -----------
Other Deferred Credits.................................. 615 546
----------- -----------
Total Capitalization and Liabilities $2,593,034 $2,521,251
=========== ===========
|
1993 1992 1991
------------- ------------- -------------
Operating Revenues............... $ - $ - $ -
------------- ------------- -------------
Operating Expenses:
Other.......................... 2,677 (22,915) 3,128
Federal income taxes........... (7,564) 12,736 (2,231)
------------- ------------- -------------
Total operating epenses....... (4,887) (10,179) 897
------------- ------------- -------------
Operating Income (Loss).......... 4,887 10,179 (897)
------------- ------------- -------------
Other Income:
Equity in earnings of
subsidiaries.................. 263,725 238,624 234,552
Equity in earnings of
transmission companies........ 3,736 4,141 4,229
Other, net..................... 1,302 6,439 1,959
------------- ------------- -------------
Other income, net............ 268,763 249,204 240,740
------------- ------------- -------------
Income before interest
charges..................... 273,650 259,383 239,843
------------- ------------- -------------
Interest Charges................. 23,697 3,329 3,134
------------- ------------- -------------
Net Income ...................... 249,953 256,054 236,709
Tax benefit of Employee Stock
Ownership Plan dividends........ - 7,348 -
------------- ------------- -------------
Earnings For Common Shares....... $ 249,953 $ 263,402 $ 236,709
============= ============= =============
Earnings Per Common Share........ $ 2.02 $ 2.02 $ 2.12
============= ============= =============
Common Shares Outstanding
(average)....................... 123,947,631 130,403,488 111,453,550
============= ============= =============
|
SCHEDULE III
NORTHEAST UTILITIES (PARENT)
FINANCIAL INFORMATION OF REGISTRANT
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
(Thousands of Dollars)
1993 1992 1991
CASH FLOWS FROM OPERATIONS:
Net income . . . . . . . . . . . . . . $ 249,953 $ 256,054 $ 236,709
Adjusted for the following:
Equity in earnings of subsidiary
companies . . . . . . . . . . . . . (263,725) (238,624) (234,552)
Cash dividends received from
subsidiary companies. . . . . . . . 191,297 196,267 207,319
Deferred income taxes. . . . . . . . (3,199) 7,382 (2,232)
Other sources of cash. . . . . . . . 197 19,244 4,332
Other uses of cash . . . . . . . . . (3,915) (1,346) (4,292)
Changes in working capital:
Accounts receivable. . . . . . . . 7,963 165,021 (174,631)
Accounts payable . . . . . . . . . 27,066 (4,528) 19,392
Other working capital
(excludes cash) . . . . . . . . . (3,010) (4,203) 1,776
-------- --------- --------
Net cash flows from operations. . . . 202,627 395,267 53,821
-------- --------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Common shares. . . . . . . . . . . . 22,252 271,128 42,420
Long-term debt . . . . . . . . . . . (5,000) 75,000 175,000
Financing expenses . . . . . . . . . - (4,597) -
Net increase (decrease) in
short-term debt. . . . . . . . . . 2,000 70,500 (67,000)
Cash dividends paid on common
shares. . . . . . . . . . . . . . . (218,179) (229,074) (195,056)
-------- -------- --------
Net cash flows from (used for) financing
activities. . . . . . . . . . . . . . (198,927) 182,957 (44,636)
-------- -------- --------
INVESTMENT ACTIVITIES:
Investments in subsidiaries. . . . . (4,853) (592,715) (2,601)
Other, at cost. . . . . . . . . . . 1,152 (83) -
-------- -------- --------
Net cash flows used for investment
activities. . . . . . . . . . . . . (3,701) (592,798) (2,601)
-------- -------- --------
NET INCREASE IN CASH (DECREASE):
For the Period . . . . . . . . . . . (1) (14,574) 6,584
Cash beginning of period . . . . . . 73 14,647 8,063
-------- -------- --------
Cash end of period . . . . . . . . . $ 72 $ 73 $ 14,647
======== ======== ========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid (received) during the year
for interest . . . . . . . . . . . . . $ 23,808 $ (11,419) $ 2,118
======== ======== ========
Income tax refund . . . . . . . . . . . $ - $ (4,277) $ -
======== ======== ========
|
NORTHEAST UTILITIES AND SUBSIDIARIES SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR FUEL)
YEAR ENDED DECEMBER 31, 1993
(THOUSANDS OF DOLLARS)
- --------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct) at close
Classification of period at Cost Retirements describe of period
- --------------------------------------------------------------------------------------------------
Utility Plant in Service
Electric $ 8,945,429 $ 231,332 $ 59,917 $ (2,768)<F1> $ 9,114,133
(8)<F2>
65 <F3>
Other 132,537 7,054 1,273 (1,185)<F1> 146,011
184<F4>
8,694<F6>
Construction Work in Progress
Electric 140,967 37,326 - (603)<F200> 177,690
Other 23,407 7,647 - (184)<F4> 30,394
(476)<F2>
Utility Plant Held for Future Use
Electric 5,876 - - (725)<F5> 5,151
Other 218 - - - 218
----------- ---------- ---------- ---------- -----------
TOTAL $ 9,248,434 $ 283,359 $ 61,190 $ 2,994 $ 9,473,597
=========== ========== ========== ========== ===========
<F1> Amortization of capital leases charged to expense and construction overheads.
<F2> Adjust COE additions.
<F3> Correction of prior retirements.
<F4> Transfers between Utility Plant in Service and Constructin Work in Progress.
<F5> Transfer of land associated with two cancelled qualifying cogeneration facilities
to deferred debits.
<F6> Transfer between Utility Plant in Service and Miscellaneous Balance Sheet Accounts.
<F200>Transfer between Construction Work in Progress and Miscellaneous Balance
Sheet accounts.
|
NORTHEAST UTILITIES AND SUBSIDIARIES SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR FUEL)
YEAR ENDED DECEMBER 31, 1992
(THOUSANDS OF DOLLARS)
- ----------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct) at close
Classification of period at Cost Retirements describe of period
- ----------------------------------------------------------------------------------------------------
Utility Plant in Service
Electric $6,898,392 $ 334,367 $ 120,319 $ 1,837,120 <F7> $ 8,945,429
(1,198)<F8>
(2,137)<F9>
(796)<F10>
Other 103,561 27,781 2 (740)<F9> 132,537
1,937 <F10>
Construction Work in Progress
Electric 164,264 (34,196) - 9,522 <F7> 140,967
774 <F10>
603 <F201>
Other 36,579 (11,204) - (1,968)<F10> 23,407
Utility Plant Held for Future Use
Electric 527 662 - 4,687 <F7> 5,876
Other 218 - - - 218
---------- ----------- ----------- ----------- -----------
TOTAL $7,203,541 $ 317,410 $ 120,321 $ 1,847,804 $ 9,248,434
========== =========== =========== =========== ===========
<F7> Plant assets - Public Service Company of New Hampshire acquisition.
<F8> Sale of plant assets.
<F9> Amortization of capital leases charged to expense and construction overheads.
<F10> Transfers between Utility Plant in Service and Construction Work in Progress.
<F201>Transfers between Construction Work in Progress and Miscellaneous Balance
Sheet accounts.
|
NORTHEAST UTILITIES AND SUBSIDIARIES SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR FUEL)
YEAR ENDED DECEMBER 31, 1991
(THOUSANDS OF DOLLARS)
- -------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct) at close
Classification of period at Cost Retirements describe of period
- -------------------------------------------------------------------------------------------------
Utility Plant in Service
Electric $ 6,752,985 $ 226,378 $ 79,159 $ (1,914)<F11> $ 6,898,392
18 <F12>
161 <F13>
(77)<F14>
Other 100,634 5,846 4,279 (1,685)<F11> 103,561
3,052 <F12>
(7)<F14>
Construction Work in Progress
Electric 163,561 732 - (18)<F12> 164,264
(11)<F14>
Other 20,990 17,526 - (3,052)<F12> 36,579
1,115 <F15>
Utility Plant Held for Future Use
Electric 527 - - - 527
Other 218 - - - 218
----------- ---------- ---------- ----------- -----------
TOTAL $ 7,038,915 $ 250,482 $ 83,438 $ (2,418) $ 7,203,541
=========== ========== ========== =========== ===========
<F11> Amortization of capital leases charged to expense and construction overheads.
<F12> Transfer between Utility Plant in Service and Construction Work in Progress.
<F13> Transfer between Utility Plant in Service and Accumulated Provision for Depreciation.
<F14> Transfer between Utility Plant in Service and Miscellaneous Balance Sheet Accounts.
<F15> Transfer between Construction Work in Progress and Miscellaneous Balance Sheet Accounts.
|
THE CONNECTICUT LIGHT AND POWER COMPANY SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR FUEL)
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
- --------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of Period
- --------------------------------------------------------------------------------------------------
Utility Plant in Service
Electric $ 5,821,900 $ 138,104 $ 23,451 $ (367)<F16> $ 5,936,186
Construction Work in Progress
Electric 110,081 11,096 - - 121,177
Utility Plant Held for Future Use
Electric 883 - - (725)<F17> 158
----------- ---------- ---------- ---------- -----------
TOTAL $ 5,932,864 $ 149,200 $ 23,451 $ (1,092) $ 6,057,521
=========== ========== ========== ========== ===========
<F16> Amortization of capital leases charged to expense and construction overheads.
<F17> Transfer of land associated with two cancelled qualifying cogeneration facilities
to deferred debits.
|
THE CONNECTICUT LIGHT AND POWER COMPANY SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR FUEL)
YEAR ENDED DECEMBER 31, 1992
(THOUSANDS OF DOLLARS)
- ---------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct) at close
Classification of period at Cost Retirements describe of period
- ---------------------------------------------------------------------------------------------------
Utility Plant in Service
Electric $ 5,660,946 $ 249,042 $ 87,127 $ (333)<F18> $ 5,821,900
(628)<F19>
Construction Work in Progress
Electric 131,600 (22,147) - 628 <F19> 110,081
Utility Plant Held for Future Use
Electric 159 724 - - 883
----------- ---------- ---------- ---------- -------------
TOTAL $ 5,792,705 $ 227,619 $ 87,127 $ (333) $ 5,932,864
=========== ========== ========== ========== =============
<F18> Amortization of capital leases charged to expense and construction overheads.
<F19> Transfer between Utility Plant in Service and Construction Work in Progress.
|
THE CONNECTICUT LIGHT AND POWER COMPANY SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR FUEL)
YEAR ENDED DECEMBER 31, 1991
(THOUSANDS OF DOLLARS)
- --------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of Period
- --------------------------------------------------------------------------------------------------
Utility Plant in Service
Electric $ 5,534,947 $ 191,364 $ 65,147 $ (287)<F20> $ 5,660,946
19 <F21>
160 <F22>
(110)<F23>
Construction Work in Progress
Electric 132,006 (387) - (19)<F21> 131,600
Utility Plant Held for Future Use
Electric 159 - - - 159
----------- ---------- ---------- ----------- -----------
TOTAL $ 5,667,112 $ 190,977 $ 65,147 $ (237) $ 5,792,705
=========== ========== ========== =========== ===========
<F20> Amortization of capital leases charged to expense and construction overheads.
<F21> Transfer between Utility Plant in Service and Construction Work in Progress.
<F22> Transfer between Utility Plant in Service and Accumulated Provision for Depreciation.
<F23> Transfer between Utility Plant in Service and Miscellaneous Balance Sheet accounts.
|
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR FUEL)
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
- -------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of Period
- -------------------------------------------------------------------------------------------------
Utility Plant in Service
Electric $1,883,035 $ 120,494 $ 27,770 $ (398)<F24> $ 1,975,426
65 <F25>
Construction Work in Progress
Electric 4,363 4,210 - - 8,573
Utility Plant Held for Future Use
Electric 4,624 - - - 4,624
--------- --------- --------- --------- -----------
TOTAL $1,892,022 $ 124,704 $ 27,770 $ (333) $ 1,988,623
========= ========= ========= ========= ===========
<F24> Amortization of capital leases charged to expense and construction overheads.
<F25> Correction of Prior Retirements.
|
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR FUEL)
FOR THE PERIOD JUNE 5, 1992 THROUGH DECEMBER 31, 1992
(Thousands of Dollars)
- --------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct)- at close
Classification of period<F26> at Cost Retirements describe of Period
- --------------------------------------------------------------------------------------------------
Utility Plant in Service
Electric $ 1,784,431 $ 56,506 $ 6,649 $ (701,336)<F27> $ 1,883,035
(188)<F30>
760,425 <F28>
(10,154)<F29>
Construction Work in Progress
Electric 9,522 (3,597) - (1,562)<F27> 4,363
Utility Plant Held for Future Use
Electric 4,686 (62) - - 4,624
----------- ---------- ---------- ---------- ------------
TOTAL $ 1,798,639 $ 52,847 $ 6,649 $ 47,185 $ 1,892,022
=========== ========== ========== ========== ============
<F26> Public Service Company of New Hampshire was acquired by Northeast Utilities on June 5, 1992.
<F27> Transferred to North Atlantic Energy Corporation.
<F28> Seabrook Power Contract.
<F29> Amortization of Seabrook Power Contract charged to expense.
<F30> Transferred to North Atlantic Energy Service Corporation.
|
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR FUEL)
FOR THE PERIOD JANUARY 1, 1992 THROUGH JUNE 4, 1992
(Thousands of Dollars)
- ------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of Period
- ------------------------------------------------------------------------------------------------------
Utility Plant in Service
Electric $ 1,764,828 $ 23,430 $ 3,827 $ - $ 1,784,431
Construction Work in Progress
Electric 7,697 1,825 - - 9,522
Utility Plant Held for Future Use
Electric 4,686 - - - 4,686
----------- ---------- ---------- ---------- -----------
TOTAL $ 1,777,211 $ 25,255 $ 3,827 $ - $ 1,798,639
=========== ========== ========== ========== ===========
|
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR FUEL)
FOR THE PERIOD MAY 16, 1991 THROUGH DECEMBER 31, 1991
(Thousands of Dollars)
- -----------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other change Balance
beginning Additions add (deduct) at close
Classification of period<F28> at Cost Retirements describe of Period
- -----------------------------------------------------------------------------------------------------
Utility Plant in Service
Electric $ 1,745,493 $ 31,251 $ 11,916 $ - $ 1,764,828
Construction Work in Progress
Electric 16,514 (8,817) - - 7,697
Utility Plant Held for Future Use
Electric 4,253 433 - - 4,686
----------- ---------- ---------- ---------- -----------
TOTAL $ 1,766,260 $ 22,867 $ 11,916 $ - $ 1,777,211
=========== ========== ========== ========== ===========
<F28> Public Service Company of New Hampshire was reorganized on May 16, 1991.
|
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR FUEL
FOR THE PERIOD JANUARY 1, 1991 THROUGH MAY 15, 1991
(Thousands of Dollars)
- --------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of Period
- --------------------------------------------------------------------------------------------------
Utility Plant in Service
Electric $2,489,492 $ 9,931 $ 1,942 $ - $ 2,497,481
Construction Work in Progress
Electric 6,764 11,116 - - 17,880
Utility Plant Held for Future Use
Electric 4,254 - - (1)<F29> 4,253
--------- --------- --------- ------- -----------
TOTAL $2,500,510 $ 21,047 $ 1,942 $ (1) $ 2,519,614
========== ========= ========= ======= ===========
<F29> Reserve associated with plant held for future use.
|
WESTERN MASSACHUSETTS ELECTRIC COMPANY SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
- ----------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of Period
- ----------------------------------------------------------------------------------------------
Utility Plant in Service
Electric $1,157,792 $ 29,574 $ 4,314 $ (10)<F30> $ 1,183,042
Construction Work in Progress
18,522 5,268 - - 23,790
Utility Plant Held for Future Use
Electric 368 - - - 368
---------- --------- --------- ---------- -----------
TOTAL $1,176,682 $ 34,842 $ 4,314 $ (10) $ 1,207,200
========== ========= ========= ========== ===========
<F30> Amortization of capital leases charged to expense and construction overheads.
|
WESTERN MASSACHUSETTS ELECTRIC COMPANY SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR
YEAR ENDED DECEMBER 31, 1992
(Thousands of Dollars)
- ---------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of Period
- --------------------------------------------------------------------------------------------------
Utility Plant in Service
Electric $1,128,710 $ 55,282 $ 26,023 $ (10)<F31> $ 1,157,792
(167)<F32>
Construction Work in Progress
Electric 27,094 (8,717) - 145<F32> 18,522
Utility Plant Held for Future Use
Electric 368 - - - 368
---------- --------- --------- --------- -----------
TOTAL $1,156,172 $ 46,565 $ 26,023 $ (32) $ 1,176,682
========== ========= ========= ========= ===========
<F31> Amortization of capital leases charged to expense and construction overheads.
<F32> Transfer between Utility Plant in Service and Construction Work in Progress.
|
WESTERN MASSACHUSETTS ELECTRIC COMPANY SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR
YEAR ENDED DECEMBER 31, 1991
(Thousands of Dollars)
- ---------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of Period
- ---------------------------------------------------------------------------------------------
Utility Plant in Service
Electric $1,110,711 $ 31,777 $ 13,802 $ (9)<F33> $ 1,128,710
33 <F34>
Construction Work in Progress
Electric 26,091 1,003 - - 27,094
Utility Plant Held for Future Use
Electric 368 - - - 368
---------- --------- --------- ------ -----------
TOTAL $1,137,170 $ 32,780 $ 13,802 $ 24 $ 1,156,172
========== ========= ========= ====== ===========
<F33> Amortization of capital leases charged to expense and construction overheads.
<F34> Transfer between Utility Plant in Service and Amortiable Property Investment.
|
NORTH ATLANTIC ENERGY CORPORATION SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR FUE
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
- --------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of Period
- --------------------------------------------------------------------------------------------
Utility Plant in Service
Electric $ 756,806 $ 3,964 $ 2,600 $ - $ 758,170
Construction Work in Progress
Electric 4,775 2,843 - - 7,618
--------- --------- --------- --------- -----------
TOTAL $ 761,581 $ 6,807 $ 2,600 $ - $ 765,788
========= ========= ========= ========= ===========
|
NORTH ATLANTIC ENERGY CORPORATION SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR FUEL
FOR THE PERIOD JUNE 5, 1992 THROUGH DECEMBER 31, 1992
(Thousands of Dollars)
- ----------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of Period
- ----------------------------------------------------------------------------------------------
Utility Plant in Service
Electric $ - $ 3,138 $ 168 $ 701,336 <F36> $ 756,806
52,500 <F37>
Construction Work in Progress
Electric - 3,213 - 1,562 <F35> 4,775
--------- --------- --------- --------- -----------
TOTAL $ - $ 6,351 $ 168 $ 755,398 $ 761,581
========= ========= ========= ========= ===========
<F35> North Atlantic Energy Corporation began operations on June 5, 1992.
<F36> Acquired from Public Service Company of New Hampshire.
<F37> Charged to other balance sheet accounts.
|
NORTHEAST UTILITIES AND SUBSIDIARIES SCHEDULE V
NUCLEAR FUEL
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
- --------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes Balance
beginning Additions add (deduct)- at close
Classification of period at cost Retirements describe of period
- --------------------------------------------------------------------------------------
Nuclear fuel in process
of refinement,
conversion, enrichment,
and fabrication
and nuclear fuel
materials and
assemblies -
stock account $ 2,041 $ 67,245 $ - $ (36,818)<F50>$ 32,468
Nuclear fuel assemblies
in reactor 26,210 - - 669 <F50> 26,879
Spent nuclear fuel 698,721 - - 93,975 <F50> 792,696
Accumulated provision for
amortization of nuclear
fuel assemblies (709,450) - - (92,949)<F50> (806,066)
(7,550)<F51>
3,883<F250>
Leased nuclear fuel 202,730 13,103 - 35,123 <F50> 172,074
(78,882)<F51>
------------ --------- ----------- --------- -----------
TOTAL $ 220,252 $ 80,348 $ - $ (82,549) $ 218,051
============ ========= =========== ========= ===========
<F50> Transfers between nuclear fuel accounts.
<F51> Amortization of nuclear fuel assemblies charged to expense.
<F250>Transfer to deferred credits.
|
NORTHEAST UTILITIES AND SUBSIDIARIES
NUCLEAR FUEL
YEAR ENDED DECEMBER 31, 1992
(Thousands of Dollars)
- ---------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes Balance
beginning Additions add (deduct)- at close
Classification of period at cost Retirements describe of period
- ---------------------------------------------------------------------------------------------
Nuclear fuel in process
of refinement,
conversion, enrichment,
and fabrication
and nuclear fuel
materials and
and assemblies -
stock account $ 7,705 $ 14,086 $ - 13,248 <F44> $ 2,041
(33,059)<F45>
61 <F251>
Nuclear fuel assemblies
in reactor 11,065 - - 4,431 <F44> 26,210
10,714 <F45>
Spent nuclear fuel 689,025 - - 4,935 <F44> 698,721
4,761 <F45>
Accumulated provision for
amortization of nuclear
fuel assemblies (693,797) - - (6,941) <F44> (709,450)
(3,883) <F252>
(4,829) <F46>
Leased nuclear fuel 222,172 20,589 - 17,584 <F45> 202,730
(57,615) <F46>
------------ --------- ----------- --------- -----------
TOTAL $ 236,170 $ 34,675 - $(50,593) $ 220,252
============ ========= =========== ========= ===========
<F44> Public Service Company of New Hampshire acquisition.
<F45> Transfers between nuclear fuel accounts.
<F46> Amortization of nuclear fuel assemblies charged to expense.
<F251>Transfer between miscellaneous balance sheet accounts.
<F252>Department of energy credits.
|
NORTHEAST UTILITIES AND SUBSIDIARIES SCHEDULE V
NUCLEAR FUEL
YEAR ENDED DECEMBER 31, 1991
(Thousands of Dollars)
- -------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of period
- -------------------------------------------------------------------------------------
Nuclear fuel in process
of refinement,
conversion, enrichment,
and fabrication
and nuclear fuel
materials and
assemblies -
stock account $ 3,876 $ 19,510 $ - $ (15,681)<F47>$ 7,705
Nuclear fuel assemblies
in reactor 5,033 - - 6,032 <F47> 11,065
Spent nuclear fuel 588,337 - - 100,688 <F47> 689,025
Accumulated provision for
amortization of nuclear
fuel assemblies (584,461) - - (105,452)<F47> (693,797)
(4,937)<F48>
1,053 <F49>
Leased nuclear fuel 247,036 3,743 - 14,413 <F47> 222,172
(43,020)<F48>
------------ --------- ----------- --------- -----------
TOTAL $ 259,821 $ 23,253 $ - $ (46,904) $ 236,170
============ ========= =========== ========= ===========
<F47> Transfers between nuclear fuel accounts.
<F48> Amortization of nuclear fuel assemblies charged to expense.
<F49> Insurance settlement.
|
THE CONNECTICUT LIGHT AND POWER COMPANY SCHEDULE V
NUCLEAR FUEL
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
- -------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of period
- -------------------------------------------------------------------------------------
Nuclear fuel in process
of refinement,
conversion, enrichment
and fabrication
and nuclear fuel
materials and
assemblies -
stock account $ 993 $ 42,107 $ - $ (28,820)<F52>$ 14,280
Nuclear fuel assemblies
in reactor 9,470 - - 910 <F52> 10,380
Spent nuclear fuel 563,628 - - 74,803 <F52> 638,431
Accumulated provision for
amortization of nuclear
fuel assemblies (570,598) - - (75,342)<F52> (645,701)
3,029 <F253>
(2,790)<F53>
Leased nuclear fuel 164,323 11,691 - 28,449 <F52> 139,488
(64,975)<F53>
------------ --------- ----------- --------- -----------
TOTAL $ 167,816 53,798 - (64,736) 156,878
============ ========= =========== ========= ===========
<F52> Transferred between nuclear fuel accounts.
<F53> Amortization of nuclear fuel assemblies charged to expense.
<F253>Transfer to deferred credits.
|
THE CONNECTICUT LIGHT AND POWER COMPANY SCHEDULE V
NUCLEAR FUEL
YEAR ENDED DECEMBER 31, 1992
(Thousands of Dollars)
- -------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes Balance
beginning Additions add (deduct)- at close
Classification of period<F52> at Cost Retirements describe of period
- -------------------------------------------------------------------------------------
Nuclear fuel in process
of refinement,
conversion, enrichment
and fabrication
and nuclear fuel
materials and
assemblies -
stock account $ 7,089 $ 11,131 $ - $ (17,227)<F54>$ 993
Nuclear fuel assemblies
in reactor 11,273 - - (1,803)<F54> 9,470
Spent nuclear fuel 558,868 - - 4,760 <F54> 563,628
Accumulated provision for
amortization of nuclear
fuel assemblies (563,752) - - (3,029)<F55> (570,598)
(3,817)<F254>
Leased nuclear fuel 180,086 16,678 - 14,270 <F54> 164,323
(46,711)<F254>
------------ --------- ----------- --------- -----------
TOTAL $ 193,564 $ 27,809 $ - $ (53,557) $ 167,816
============ ========= =========== ========= ===========
<F54> Transfers between nuclear fuel accounts.
<F55> Amortization of nuclear fuel assemblies charged to expense.
<F254>Department of Energy Credits.
|
THE CONNECTICUT LIGHT AND POWER COMPANY SCHEDULE V
NUCLEAR FUEL
YEAR ENDED DECEMBER 31, 1991
(Thousands of Dollars)
- -------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes Balance
beginning Additions add (deduct)- at close
Classification of period<F54> at Cost Retirements describe of period
- -------------------------------------------------------------------------------------
Nuclear fuel in process
of refinement,
conversion, enrichment
and fabrication
and nuclear fuel
materials and
assemblies -
stock account $ 5,183 $ 15,110 $ - $ (13,204)<F56>$ 7,089
Nuclear fuel assemblies
in reactor 6,481 - - 4,792 <F56> 11,273
Spent nuclear fuel 476,656 - - 82,212 <F56> 558,868
Accumulated provision for
amortizatiion of nuclear
fuel assemblies (474,171) - - (85,478)<F56> (563,752)
(4,956)<F57>
853 <F58>
Leased nuclear fuel 200,238 3,034 - 11,678 <F56> 180,086
(34,864)<F57>
------------ --------- ----------- --------- -----------
TOTAL $ 214,387 $ 18,144 $ - $ (38,967) $ 193,564
============ ========= =========== ========= ===========
<F56> Transfers between nuclear fuel accounts.
<F57> Amortization of nuclear fuel assemblies charged to expense.
<F58> Insurance settlement.
|
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE V
NUCLEAR FUEL
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
- -------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of period
- -------------------------------------------------------------------------------------
Nuclear fuel in process
of refinement
conversion, enrichment
and fabrication,
and nuclear fuel
materials and
assemblies -
stock account $ 668 $ 614 $ - $ (1,261)<F82>$ 21
Nuclear fuel assemblies
in reactor 4,162 - - (512)<F82> 3,650
Spent nuclear fuel 4,936 - - 1,773 <F82> 6,709
Accumulated provision for
amortization of nuclear
fuel assemblies (7,429) - - 149 <F82> (8,273)
(993)<F83>
------------ --------- ----------- --------- -----------
TOTAL $ 2,337 $ 614 $ - $ (844) $ 2,107
============ ========= =========== ========= ===========
<F82> Transfers between nuclear fuel accounts.
<F83> Amortization of nuclear fuel assemblies charged to expense.
|
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE V
NUCLEAR FUEL
FOR THE PERIOD JUNE 5, 1992 THROUGH DECEMER 31, 1992
(Thousands of Dollars)
- -------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of period
- -------------------------------------------------------------------------------------
Nuclear fuel in process
of refinement,
conversion, enrichment
and fabrication,
and nuclear fuel
materials and
assemblies -
stock account $ 13,248 $ 552 $ - $ (13,132)<F65>$ 668
Nuclear fuel assemblies
in reactor 4,431 - - (269)<F66> 4,162
Spent nuclear fuel 4,936 - - - 4,936
Accumulated provision for
amortization of nuclear
fuel assemblies (6,941) - - 82 <F66> (7,429)
(570)<F67>
------------ --------- ----------- --------- -----------
TOTAL $ 15,674 $ 552 $ - $ (13,889) $ 2,337
============ ========= =========== ========= ===========
<F65> Public Service Company of New Hampshire was acquired by Northeast Utilities
on June 5, 1992.
<F66> Transfers to North Atlantic Energy Corporation.
<F67> Amortization of nuclear fuel assemblies charged to expense.
|
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE V
NUCLEAR FUEL
FOR THE PERIOD JANUARY 1, 1992 THROUGH JUNE 4, 1992
(Thousands of Dollars)
- -------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of period
- -------------------------------------------------------------------------------------
Nuclear fuel in process
of refinement,
conversion, enrichment
and fabrication,
and nuclear fuel
materials and
assemblies -
stock account $ 2,859 $ 9,990 $ - $ 399 <F59> $ 13,248
Nuclear fuel assemblies
in reactor 4,431 - - - 4,431
Spent nuclear fuel 4,936 - - - 4,936
Accumulated provision for
amortization of nuclear
fuel assemblies (6,543) - - (398)<F59> (6,941)
------------ --------- ----------- --------- -----------
TOTAL $ 5,683 $ 9,990 $ - $ 1 $ 15,674
============ ========= =========== ========= ===========
<F59> Miscellaneous transfers.
|
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE V
NUCLEAR FUEL
FOR THE PERIOD MAY 16, 1991 THROUGH DECEMBER 31, 1991
(Thousands of Dollars)
- -------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes Balance
beginning Additions add (deduct)- at close
Classification of period<F60> at Cost Retirements describe of period
- -------------------------------------------------------------------------------------
Nuclear fuel in process
of refinement,
conversion, enrichment
and fabrication,
and nuclear fuel
materials and
assemblies -
stock account $ 207 $ 3,125 $ - $ (473)<F61>$ 2,859
Nuclear fuel assemblies
in reactor 5,586 - - 473 <F61> 4,431
(1,628)<F61>
Spent nuclear fuel 3,308 - - 1,628 <F61> 4,936
Accumulated provision for
amortization of nuclear
fuel assemblies (6,299) - - (244)<F62> (6,543)
------------ --------- ----------- --------- -----------
TOTAL $ 2,802 $ 3,125 $ - $ (244) $ 5,683
============ ========= =========== ========= ===========
<F60> Public Service Company of New Hampshire was reorganized on May 16, 1991.
<F61> Transfers between nuclear fuel accounts.
<F62> Amortization of nuclear fuel assemblies charged to expense.
|
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE V
NUCLEAR FUEL
FOR THE PERIOD JANUARY 1, 1991 THROUGH MAY 15, 1991
(Thousands of Dollars)
- -------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of period
- -------------------------------------------------------------------------------------
Nuclear fuel in process
of refinement
conversion, enrichment
and fabrication,
and nuclear fuel
materials and
assemblies -
stock account $ 40,943 $ 4,264 $ - $ (1,741)<F63> 43,466
Nuclear fuel assemblies
in reactor 41,129 - - 1,741 <F63> 42,870
Spent nuclear fuel 3,308 - - - 3,308
Accumulated provision for
amortization of nuclear
fuel assemblies (15,564) - - (7,649)<F64> (23,213)
------------ --------- ----------- --------- -----------
TOTAL $ 69,816 $ 4,264 $ - $ (7,649) $ 66,431
============ ========= =========== ========= ===========
<F63> Transfers between nuclear fuel accounts.
<F64> Amortization of nuclear fuel assemblies charged to expense.
|
WESTERN MASSACHUSETTS ELECTRIC COMPANY SCHEDULE V
NUCLEAR FUEL
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
- -------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of period
- -------------------------------------------------------------------------------------
Nuclear fuel in process
of refinement
conversion, enrichment
and fabrication,
and nuclear fuel
materials and
assemblies -
stock account $ 197 $ 9,598 $ - $ (6,737)<F73>$ 3,058
Nuclear fuel assemblies
in reactor (208) - - 272 <F73> 64
Spent nuclear fuel 130,157 - - 17,398 <F73> 147,555
Accumulated provision for
amortization of nuclear
fuel assemblies (130,848) - - 854 <F254> (147,535)
(17,607)<F73>
66 <F74>
Leased nuclear fuel 38,406 2,697 - 6,674 <F73> 32,585
(15,192)<F254>
------------ --------- ----------- --------- -----------
TOTAL $ 37,704 $ 12,295 $ - $ (14,272) $ 35,727
============ ========= =========== ========= ===========
<F73> Transfers between nuclear fuel accounts.
<F74> Amortization of nuclear fuel assemblies charged to expense.
<F254>Transfer to deferred credits.
|
WESTERN MASSACHUSETTS ELECTRIC COMPANY SCHEDULE V
NUCLEAR FUEL
YEAR ENDED DECEMBER 31, 1992
(Thousands of Dollars)
- ----------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of period
- ----------------------------------------------------------------------------------
Nuclear fuel in process of
of refinement,
conversion, enrichment
and fabrication,
and nuclear fuel
materials and
assemblies -
stock account $ 1,200 $ 2,310 $ - $ (3,313)<F68>$ 197
Nuclear fuel assemblies
in reactor (208) - - - (208)
Spent nuclear fuel 130,157 - - - 130,157
Accumulated provision for
amortization of nuclear
fuel assemblies (130,045) - - (854)<F69> (130,848)
51 <F255>
Leased nuclear fuel 42,086 3,911 - (10,904)<F255> 38,406
3,313 <F68>
--------- --------- ----------- --------- -----------
TOTAL $ 43,190 $ 6,221 $ - $ (11,707)<F69>$ 37,704
========= ========= =========== ========= ===========
<F68> Transfers between nuclear fuel accounts.
<F69> Amortization of nuclear fuel assemblies charged to expense.
<F255>Department of Energy Credits.
|
WESTERN MASSACHUSETTS ELECTRIC COMPANY SCHEDULE V
NUCLEAR FUEL
YEAR ENDED DECEMBER 31, 1991
(Thousands of Dollars)
- --------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of period
- --------------------------------------------------------------------------------------
Nuclear fuel in process
of refinement
conversion, enrichment
and fabrication,
and nuclear fuel
materials and
assemblies -
stock account $ 373 $ 3,304 $ - $ (2,477)<F70>$ 1,200
Nuclear fuel assemblies
in reactor (1,448) - - 1,240 <F70> (208)
Spent nuclear fuel 111,681 - - 18,476 <F70> 130,157
Accumulated provision for
amortization of nuclear
fuel assemblies (110,289) - - (19,974)<F70> (130,045)
18 <F71>
200 <F72>
Leased nuclear fuel 46,798 709 - 2,735 <F70> 42,086
(8,156)<F71>
------------ --------- ----------- --------- -----------
TOTAL 47,115 4,013 - (7,938)<F71>$ 43,190
============ ========= =========== ========= ===========
<F70> Transfers between nuclear fuel accounts.
<F71> Amortization of nuclear fuel assemblies charged to expense.
<F72> Insurance settlements.
|
NORTH ATLANTIC ENERGY CORPORATION SCHEDULE V
NUCLEAR FUEL
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
- -------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes Balance
beginning Additions add (deduct)- at close
Classification of period<F79> at Cost Retirements describe of period
- -------------------------------------------------------------------------------------
Nuclear fuel in process
of refinement
conversion, enrichment
and fabrication,
and nuclear fuel
materials and
assemblies -
stock account $ 1,126 $ 13,983 $ - $ - $ 15,109
Nuclear fuel assemblies
in reactor 12,786 - - - 12,786
Spent nuclear fuel - - - - 0
Accumulated provision for
amortization of nuclear
fuel assemblies (573) - - (3,983)<F81> (4,556)
------------ --------- ----------- --------- -----------
TOTAL $ 13,339 $ 13,983 $ - $ (3,983) $ 23,339
============ ========= =========== ========= ===========
<F79> North Atlantic Energy Corporation began operations on June 5, 1992.
<F81> Amortization of nuclear fuel assemblies charged to expense.
|
NORTH ATLANTIC ENERGY CORPORATION SCHEDULE V
NUCLEAR FUEL
FOR THE PERIOD JUNE 5, 1992 THROUGH DECEMBER 31, 1992
(Thousands of Dollars)
- -------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes Balance
beginning Additions add (deduct)- at close
Classification of period<F75> at Cost Retirements describe of period
- -------------------------------------------------------------------------------------
Nuclear fuel in process
of refinement,
conversion, enrichment
and fabrication,
and nuclear fuel
materials and
assemblies -
stock account $ - $ 511 $ - $ 13,132 <F76>$ 1,126
(12,517)<F77>
Nuclear fuel assemblies
in reactor - - - 269 <F76> 12,786
12,517 <F77>
Spent nuclear fuel - - - - -
Accumulated provision for
amortization of nuclear
fuel assemblies - - - (82)<F76> (573)
(491)<F78>
------------ --------- ----------- --------- -----------
TOTAL $ - $ 511 $ - $ 12,828 $ 13,339
============ ========= =========== ========= ===========
<F75> North Atlantic Energy Corporation began operations on June 5, 1992.
<F76> Acquired from Public Service Company of New Hampshire.
<F77> Transfers between nuclear fuel accounts.
<F78> Amortization of nuclear fuel assemblies charged to expense.
|
NORTHEAST UTILITIES AND SUBSIDIARIES SCHEDULE VI
ACCUMULATED PROVISION FOR DEPRECIATION OF UTILITY PLANT
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
- ------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Additions
Balance at charged to Other changes- Balance
beginning of costs and add (deduct)- at close
Description period expenses Retirements describe of period
- ------------------------------------------------------------------------------------------------------
Electric $ 2,675,731 $ 325,935 $ 58,049 $ 613<F87>$ 2,944,230
Other 73,303 5,501 1,047 - 77,757
------------ ------------ ------------ ------------ ------------
TOTAL $ 2,749,034 $ 331,436 $ 59,096 $ 613 $ 3,021,987
============ ============ ============ ============ ============
<F87> Depreciation charged to Clearing, Fuel Stock, Stores, and Other Accounts.
|
NORTHEAST UTILITIES AND SUBSIDIARIES SCHEDULE VI
ACCUMULATED PROVISION FOR DEPRECIATION OF UTILITY PLANT
YEAR ENDED DECEMBER 31, 1992
(Thousands of Dollars)
- ------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Additions
Balance at charged to Other changes- Balance
beginning of costs and add (deduct)- at close
Description period expenses Retirements describe of period
- ------------------------------------------------------------------------------------------------------
Electric $ 2,113,908 $ 289,798 $ 148,122 $ 419,436<F84>$ 2,675,731
711<F85>
Other 68,236 5,205 138 - 73,303
------------ ------------ ------------ ------------ ------------
TOTAL $ 2,182,144 $ 295,003 $ 148,260 $ 420,147 $ 2,749,034
============ ============ ============ ============ ============
<F84> Accumulated provision for depreciation - Public Service Company of New Hampshire acquisition.
<F85> Depreciation charged to Clearing, Fuel Stock, Stores, and Other Accounts.
|
NORTHEAST UTILITIES AND SUBSIDIARIES SCHEDULE VI
ACCUMULATED PROVISION FOR DEPRECIATION OF UTILITY PLANT
YEAR ENDED DECEMBER 31, 1991
(Thousands of Dollars)
- ------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Additions
Balance at charged to Other changes- Balance
beginning of costs and add (deduct)- at close
Description period expenses Retirements describe of period
- ------------------------------------------------------------------------------------------------------
Electric $ 1,976,327 $ 231,862 $ 103,598 $ 9,317<F86>$ 2,113,908
Other 57,241 11,595 600 - 68,236
------------ ------------ ------------ ------------ ------------
TOTAL $ 2,033,568 $ 243,457 $ 104,198 $ 9,317 $ 2,182,144
============ ============ ============ ============ ============
<F86> Depreciation charged to Clearing, Fuel Stock, Stores, and Other Accounts.
|
THE CONNECTICUT LIGHT AND POWER COMPANY SCHEDULE VI
ACCUMULATED PROVISION FOR DEPRECIATION OF UTILITY PLANT
YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
(Thousands of Dollars)
- ------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Additions
Balance at charged to Other changes- Balance
beginning of costs and add (deduct)- at close
Description period expenses Retirements describe of period
- ------------------------------------------------------------------------------------------------------
Year Ended December 31, 1993
Electric $ 1,827,024 $ 222,245 $ 38,392 $ 85<F88>$ 2,010,962
============ ============ ============ ============ ============
Year Ended December 31, 1992
Electric $ 1,724,673 $ 216,755 $ 114,511 $ 107<F88>$ 1,827,024
============ ============ ============ ============ ============
Year Ended December 31, 1991
Electric $ 1,608,784 $ 201,377 $ 85,549 $ 61<F88>$ 1,724,673
============ ============ ============ ============ ============
<F88> Depreciation charged to Transportation Clearing, Fuel Stock, Stores, and Other Accounts.
|
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE VI
ACCUMULATED PROVISION FOR DEPRECIATION OF UTILITY PLANT
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
- ------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Additions
Balance at charged to Other changes- Balance
beginning of costs and add (deduct)- at close
Description period expenses Retirements describe of period
- ------------------------------------------------------------------------------------------------------
Electric $ 410,026 $ 38,664 $ 8,007 $ 393<F96>$ 441,076
============ ============ ============ =========== ============
<F96> Depreciation charged to Clearing and Other Accounts.
|
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE VI
ACCUMULATED PROVISION FOR DEPRECIATION OF UTILITY PLANT
FOR THE PERIODS JUNE 5, 1992 THROUGH DECEMBER 31, 1992 AND JANUARY 1, 1992 THROUGH JUNE 4, 1992
(Thousands of Dollars)
- -----------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Additions
Balance at charged to Other changes- Balance
beginning of costs and add (deduct)- at close
Description period expenses Retirements describe of period
- ------------------------------------------------------------------------------------------------------
For the Period June 5, 1992
through December 31, 1992
Electric $ 419,436<F89>$ 21,526 $ 6,837 $ (23,316)<F90> $ 410,026
257 <F91>
(1,040)<F92>
-----------
$ (24,099)
=========== =========== =========== =========== =========
For the Period January 1, 1992
through June 4, 1992 $ 398,334 $ 25,183 $ 2,461 $ 243 <F91> $ 419,436
(1,863)<F92>
-----------
$ (1,620)
=========== =========== =========== =========== =========
<F89> Public Service Company of New Hampshire was acquired by Northeast Utilities on June 5, 1992
<F90> Transfer of Seabrook to North Atlantic Energy Corporation.
<F91> Depreciation charged to Clearing and Other Accounts.
<F92> Net salvage.
|
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE VI
ACCUMULATED PROVISION FOR DEPRECIATION OF UTILITY PLANT
FOR THE PERIODS MAY 16, 1991 THROUGH DECEMBER 31, 1991 AND JANUARY 1, 1991 THROUGH MAY 15, 1991
(Thousands of Dollars)
- ------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Additions
Balance at charged to Other changes- Balance
beginning of costs and add (deduct)- at close
Description period expenses Retirements describe of period
- ------------------------------------------------------------------------------------------------------
For the Period May 16, 1991
through December 31, 1991
Electric $ 376,103<F93>$ 36,590 $ 12,377 $ 482 (b) $ 398,334
(2,464)(c)
-----------
$ (1,982)
=========== =========== =========== =========== ==========
For the Period January 1, 1991
through May 15, 1991
Electric $ 382,565 $ 28,269 $ 1,945 $ 1,705 (b) $ 409,831
(763)(c)
-----------
$ 942
=========== =========== =========== =========== ===========
<F93> Public Service Company of New Hampshire was reorganized on May 16, 1991.
<F94> Depreciation charged Clearing and Other Accounts.
<F95> Net salvage.
|
WESTERN MASSACHUSETTS ELECTRIC COMPANY SCHEDULE VI
ACCUMULATED PROVISION FOR DEPRECIATION OF UTILITY PLANT
YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
(Thousands of Dollars)
- ------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Additions
Balance at charged to Other changes- Balance
beginning of costs and add (deduct)- at close
Description period expenses Retirements describe of period
- ------------------------------------------------------------------------------------------------------
Year Ended December 31, 1993
Electric $ 364,702 $ 38,271 $ 7,801 $ 18<F97>$ 395,190
============ ============ ============ =========== ============
Year Ended December 31, 1992
Electric $ 352,855 $ 36,707 $ 24,886 $ 26<F97>$ 364,702
============ ============ ============ =========== ============
Year Ended December 31, 1991
Electric $ 332,472 $ 37,800 $ 17,429 $ 12<F97>$ 352,855
============ ============ ============ =========== ============
<F97> Depreciation charged to Transportation Clearing, Fuel Stock, and Other Accounts.
|
NORTH ATLANTIC ENERGY CORPORATION SCHEDULE VI
ACCUMULATED PROVISION FOR DEPRECIATION OF UTILITY PLANT
YEARS ENDED DECEMBER 31, 1993 AND 1992
(Thousands of Dollars)
- ------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Additions
Balance at charged to Other changes- Balance
beginning of costs and add (deduct)- at close
Description period<F98> expenses Retirements describe of period
- ------------------------------------------------------------------------------------------------------
Year Ended Dcember 31, 1993
Electric $ 36,327 $ 22,862 $ 2,540 $ - $ 56,649
=========== =========== =========== ============== ===========
Year Ended Dcember 31, 1992
Electric $ - $ 12,981 $ (30) $ 23,316<F99>$ 36,327
=========== =========== =========== ============== ===========
<F98> North Atlantic Energy Corporation began operations on June 5, 1992.
<F99> Acquired from Public Service Company of New Hampshire.
|
NORTHEAST UTILITIES AND SUBSIDIARIES SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
- ----------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
Additions
--------------------
(1) (2)
Charged to
Balance at Charged to other Balance
beginning costs and accounts- Deductions- at end
Description of period expenses describe describe of period
- ----------------------------------------------------------------------------------------------------
RESERVES DEDUCTED FROM ASSETS
TO WHICH THEY APPLY:
Reserves for uncollectible accounts $ 13,255 $ 22,342 $ - $ 20,968<F100>$ 14,629
========= ========= ========= ========= ========
RESERVES NOT APPLIED AGAINST ASSETS:
Injuries and damages <F101> $ 14,059 $ 9,231 $ - $ 7,572<F102>$ 15,718
========= ========= ========= ========= ========
Medical insurance <F103> $ 9,430 $ 42,442 $ - $ 43,215<F104>$ 8,657
========= ========= ========= ========= ========
<F100> Amounts written off, net of recoveries.
<F101> Provided to cover claims for injuries to employees, workmen's compensation, bodily injury to
others, and property damage.
<F102> Principally payments for various injuries and damages and expenses in connection therewith.
<F103> Provided to cover claims for employee medical insurance.
<F104> Principally payments for various employee medical expenses and expenses in connection
therewith.
|
NORTHEAST UTILITIES AND SUBSIDIARIES SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
YEAR ENDED DECEMBER 31, 1992
(Thousands of Dollars)
- -------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
Additions
-------------------
(1) (2)
Charged to
Balance at Charged to other Balance
beginning costs and accounts- Deductions- at end
Description of period expenses describe describe of period
- -------------------------------------------------------------------------------------------------
RESERVES DEDUCTED FROM ASSETS
TO WHICH THEY APPLY:
Reserves for uncollectible accounts $ 11,607 $ 20,005 $ 2,826<F105>$ 21,183<F106>$ 13,255
========= ========= ======== ======== ========
RESERVES NOT APPLIED AGAINST ASSETS:
Injuries and damages <F107> $ 9,465 $ 8,275 $ 3,138<F105>$ 6,819<F108>$ 14,059
========= ========= ======== ========= ========
Medical insurance <F109> $ 6,869 $ 39,693 $ 1,150<F105>$ 38,282<F110>$ 9,430
========= ========= ======== ======== ========
<F105> Acquired as part of Northeast Utilities acquisition of Public Service Company of New Hampshire
on June 5, 1992.
<F106> Amounts charged off as uncollectible after deducting customers' deposits and recoveries
of accounts previously charged off.
<F107> Provided to cover claims for injuries to employees, workmen's compensation,
bodily injury to others, and property damage.
<F108> Principally payments for various injuries and damages and expenses in connection therewith.
<F109> Provided to cover claims for employee medical insurance.
<F110> Principally payments for various employee medical expenses and expenses in connection
therewith.
|
NORTHEAST UTILITIES AND SUBSIDIARIES SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
YEAR ENDED DECEMBER 31, 1991
(Thousands of Dollars)
- ---------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
Additions
--------------------
(1) (2)
Charged to
Balance at Charged to other Balance
beginning costs and accounts- Deductions- at end
Description of period expenses describe describe of period
- ----------------------------------------------------------------------------------------------------
RESERVES DEDUCTED FROM ASSETS
TO WHICH THEY APPLY:
Reserves for uncollectible accounts $ 10,588 $ 16,593 $ - $ 15,574<F111>$ 11,607
========= ========= ========= ========= ========
RESERVES NOT APPLIED AGAINST ASSETS:
Injuries and damages <F112> $ 6,238 $ 10,211 $ - $ 6,984<F113> 9,465
Medical insurance <F114> 6,157 41,327 - 40,615<F115> 6,869
Other <F116> 7,028 2,393 488<F117> 11,686<F118> (1,777)
--------- --------- --------- --------- --------
TOTAL $ 19,423 $ 53,931 $ 488 $ 59,285 $ 14,557
========= ========= ========= ========= =========
<F111> Amounts charged off as uncollectible after deducting customers' deposits and recoveries of
accounts previously charged off.
<F112> Provided to cover claims for injuries to employees, workmen's compensation, bodily injury to
others, and property damage.
<F113> Principally payments for various injuries and damages and expenses in connection therewith.
<F114> Provided to cover claims for employee medical insurance.
<F115> Principally payments for various employee medical expenses and expenses in connection
therewith.
<F116> Consists of a long-term disability insurance reserve, a supplemental executive retirement plan
reserve, an early retirement incentive reserve, a storm damage reserve, and a reserve for
nuclear materials and supplies remaining at decommissioning.
<F117> Employee contributions related to the long-term disability plan.
<F118> Payments under a long-term disability plan, supplemental executive retirement plan, an early
retirement incentive plan and a storm damage reserve.
|
THE CONNECTICUT LIGHT AND POWER COMPANY SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
- ------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
Additions
--------------------
(1) (2)
Charged to
Balance at Charged to other Balance
beginning costs and accounts- Deductions- at end
Description of period expenses describe describe of period
- ------------------------------------------------------------------------------------------------
RESERVES DEDUCTED FROM ASSETS
TO WHICH THEY APPLY:
Reserves for uncollectible accounts $ 8,358 $ 16,366 $ - $ 13,908<F119>$ 10,816
========= ========= ========= ========= ========
RESERVES NOT APPLIED AGAINST ASSETS:
Injuries and damages <F120> $ 8,359 $ 7,115 $ - $ 5,821<F121>$ 9,653
========= ========= ========= ========= ========
Medical insurance <F122> $ 3,496 $ 19,846 $ - $ 20,975<F123>$ 2,367
========= ========= ========= ========= ========
<F119> Amounts charged off as uncollectible after deducting customers' deposits and recoveries of
accounts previously charged off.
<F120> Provided to cover claims for injuries to employees, workmen's compensation, bodily injury to
others, and property damage.
<F121> Principally payments for various injuries and damages and expenses in connection therewith.
<F122> Provided to cover claims for employee medical insurance.
<F123> Principally payments for various employee medical expenses and expenses in connection
therewith.
|
THE CONNECTICUT LIGHT AND POWER COMPANY SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
YEAR ENDED DECEMBER 31, 1992
(Thousands of Dollars)
- -------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
Additions
--------------------
(1) (2)
Charged to
Balance at Charged to other Balance
beginning costs and accounts- Deductions- at end
Description of period expenses describe describe of period
- --------------------------------------------------------------------------------------------------
RESERVES DEDUCTED FROM ASSETS
TO WHICH THEY APPLY:
Reserves for uncollectible accounts $ 9,560 $ 14,837 $ - $ 16,039<F124>$ 8,358
========= ========= ========= ========= ========
RESERVES NOT APPLIED AGAINST ASSETS:
Injuries and damages <F125> $ 7,369 $ 6,600 $ - $ 5,610<F126>$ 8,359
========= ========= ========= ========= ========
Medical insurance <F127> $ 3,429 $ 19,770 $ - $ 19,703<F128>$ 3,496
========= ========= ========= ========= ========
<F124> Amounts charged off as uncollectible after deducting customers' deposits and recoveries of
accounts previously charged off.
<F125> Provided to cover claims for injuries to employees, workmen's compensation, bodily injury to
others, and property damage.
<F126> Principally payments for various injuries and damages and expenses in connection therewith.
<F127> Provided to cover claims for employee medical insurance.
<F128> Principally payments for various employee medical expenses and expenses in connection
therewith.
|
THE CONNECTICUT LIGHT AND POWER COMPANY SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
YEAR ENDED DECEMBER 31, 1991
(Thousands of Dollars)
- ---------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
Additions
--------------------
(1) (2)
Charged to
Balance at Charged to other Balance
beginning costs and accounts- Deductions- at end
Description of period expenses describe describe of period
- ---------------------------------------------------------------------------------------------------
RESERVES DEDUCTED FROM ASSETS
TO WHICH THEY APPLY:
Reserves for uncollectible accounts $ 8,610 $ 12,804 $ - $ 11,854<F129>$ 9,560
========= ========= ========= ========= =========
RESERVES NOT APPLIED AGAINST ASSETS:
Injuries and damages <F130> $ 4,781 $ 8,460 $ - $ 5,872<F131>$ 7,369
Medical insurance <F132> 3,167 20,990 - 20,728<F133>$ 3,429
Other <F134> 3,279 1,186 97<F135> 11,373<F136>$ (6,811)
--------- --------- --------- --------- ---------
TOTAL $ 11,227 $ 30,636 $ 97 $ 37,973 $ 3,987
========= ========= ========= ========= ==========
<F129> Amounts charged off as uncollectible after deducting customers' deposits and recoveries of
accounts previously charged off.
<F130> Provided to cover claims for injuries to employees, workmen's compensation,
bodily injury to others and property damage.
<F131> Principally payments for various injuries and damages and expenses in connection therewith.
<F132> Provided to cover claims for employee medical insurance.
<F133> Principally payments for various employee medical expenses and expenses in connection
therewith.
<F134> Consists of a long-term disability insurance reserve, a supplemental executive retirement
plan, an early retirement incentive reserve, a storm damage reserve, and a reserve for nuclear
materials and supplies remaining at decommissioning.
<F135> Employeee contributions related to the long-term disability plan.
<F136> Payments under a long-term disability plan, supplemental executive retirement plan, an early
retirement incentive plan, and a storm damage reserve.
|
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
- ------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
Additions
--------------------
(1) (2)
Charged to
Balance at Charged to other Balance
beginning costs and accounts- Deductions- at end
Description of period expenses describe describe of period
- ------------------------------------------------------------------------------------------------
RESERVES DEDUCTED FROM ASSETS
TO WHICH THEY APPLY:
Reserves for uncollectible accounts $ 2,780 $ 1,771 $ - $ 2,735<F137>$ 1,816
========= ========= ========= ========= =======
RESERVES NOT APPLIED AGAINST ASSETS:
Injuries and damages $ 2,770 $ 192 $ - 917<F138>$ 2,045
========= ========= ========= ========= ========
Medical insurance $ 1,650 $ 265 $ - $ - $ 1,915
========= ========= ========= ========= ========
<F137> Amounts written off, net of recoveries.
<F138> Principally payments for various injuries and damages and expenses in connection therewith.
|
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE PERIOD June 5, 1992 THROUGH DECEMBER 31, 1992
(Thousands of Dollars)
- -------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
Additions
--------------------
(1) (2)
Charged to
Balance at Charged to other Balance
beginning costs and accounts- Deductions- at end
Description of period<F147> expenses describe describe of period
- --------------------------------------------------------------------------------------------------
RESERVES DEDUCTED FROM ASSETS
TO WHICH THEY APPLY:
Reserves for uncollectible accounts $ 2,826 $ 1,617 $ - $ 1,663<F148> $ 2,780
========= ========= ========= ========= =========
RESERVES NOT APPLIED AGAINST ASSETS:
Injuries and damages $ 3,138 $ (277) $ - $ 91<F149> $ 2,770
========= ========= ========= ========= =========
Medical Insurance $ 1,150 $ 500 $ - $ - $ 1,650
========= ========= ========= ========= =========
<F147> Public Service Company of New Hampshire was acquired by Northeast Utilities
on June 5, 1992.
<F148> Amounts written off, net of recoveries.
<F149> Nonoperating reserve transferred to operating.
|
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE PERIOD JANUARY 1, 1992 THROUGH JUNE 4, 1992
(Thousands of Dollars)
- --------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
Additions
-----------------
(1) (2)
Charged to
Balance at Charged to other Balance
beginning costs and accounts- Deductions- at end
Description of period expenses describe describe of period
- --------------------------------------------------------------------------------------------------
RESERVES DEDUCTED FROM ASSETS
TO WHICH THEY APPLY:
Reserves for uncollectible accounts $ 2,834 $ 1,581 $ - $ 1,589<F139>$ 2,826
========= ========= ========= ========== ========
RESERVES NOT APPLIED AGAINST ASSETS:
Injuries and damages $ 1,615 $ 1,618 $ - $ 95<F140>$ 3,138
========= ========= ========= ========= ========
Medical insurance $ 1,050 $ 100 $ - $ - $ 1,150
========= ========= ========= ========= ========
<F139> Amounts written off, net of recoveries.
<F140> Nonoperating reserve transferred to operating.
|
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE PERIOD MAY 16, 1991 THROUGH DECEMBER 31, 1991
(Thousands of Dollars)
- --------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
Additions
--------------------
(1) (2)
Charged to
Balance at Charged to other Balance
beginning costs and accounts- Deductions- at end
Description of period<F141> expenses describe describe of period
- --------------------------------------------------------------------------------------------------
RESERVES DEDUCTED FROM ASSETS
TO WHICH THEY APPLY:
Reserves for uncollectible accounts $ 2,827 $ 2,267 $ - $ 2,260<F142> $ 2,834
========= ========= ========= ========= =======
RESERVES NOT APPLIED AGAINST ASSETS:
Injuries and damages $ 1,777 $ 325 $ - $ 487<F143> $ 1,615
========= ========= ========= ========= ========
<F141> Public Service Company of New Hampshire was reorganized on May 15, 1991.
<F142> Accounts written off, net of recoveries.
<F143> Nonoperating reserve transferred to operating.
|
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE PERIOD JANUARY 1, 1991 THROUGH MAY 15, 1991
(Thousands of Dollars)
- ---------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
Additions
--------------------
(1) (2)
Charged to
Balance at Charged to other Balance
beginning costs and accounts- Deductions- at end
Description of period expenses describe describe of period
- ------------------------------------------------------------------------------------------------------
RESERVES DEDUCTED FROM ASSETS
TO WHICH THEY APPLY:
Reserves for uncollectible accounts $ 2,361 $ 1,340 $ - $ 874<F144> $ 2,827
========= ========= ========= ========= =========
RESERVES NOT APPLIED AGAINST ASSETS:
Estimated cancellation costs
for Seabrook 2 $ 12,465 $ - $ (12,465)<F145> $ - -
========= ========= ========= ========= =========
Injuries and damages $ 1,812 $ 257 $ - $ 292<F146> $ 1,777
========= ========= ========= ========= =========
<F144> Amounts written off, net of recoveries.
<F145> Write-off of reserve to Account 426.6.
<F146> Nonoperating reserve transferred to operating.
|
WESTERN MASSACHUSETTS ELECTRIC COMPANY SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
YEAR-ENDED DECEMBER 31, 1993
(Thousands of Dollars)
- ------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
Additions
----------------------
(1) (2)
Charged to
Balance at Charged to other Balance
beginning costs and accounts- Deductions- at end
Description of period expenses describe describe of period
- ------------------------------------------------------------------------------------------------------
RESERVES DEDUCTED FROM ASSETS
TO WHICH THEY APPLY:
Reserves for uncollectible accounts $ 2,117 $ 2,812 $ - $ 2,932<F150> $ 1,997
========== ========== ========== ========== =========
RESERVES NOT APPLIED AGAINST ASSETS:
Injuries and damages <F151> $ 1,612 $ 1,750 $ - $ 602<F152> $ 2,760
========== ========== ========== ========== =========
Medical Insurance <F153> $ 741 $ 4,017 $ - $ 4,291<F154> $ 467
========== ========== ========== ========== =========
<F150> Amounts written off, net of recoveries.
<F151> Provided to cover claims for injuries to employees, workmen's compensation, bodily injury to
others, and property damage.
<F152> Principally payments for various injuries and damages and expenses in connection therewith.
<F153> Provided to cover claims for employee medical insurance.
<F154> Principally payments for various employee medical expenses and expenses in connection
therewith.
|
WESTERN MASSACHUSETTS ELECTRIC COMPANY SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
YEAR ENDED DECEMBER 31, 1992
(Thousands of Dollars)
- ------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
Additions
----------------------
(1) (2)
Charged to
Balance at Charged to other Balance
beginning costs and accounts- Deductions- at end
Description of period expenses describe describe of period
- ------------------------------------------------------------------------------------------------------
RESERVES DEDUCTED FROM ASSETS
TO WHICH THEY APPLY:
Reserves for uncollectible accounts $ 1,977 $ 3,303 $ - $ 3,163<F163> $ 2,117
========= ========== ========== ========== ========
RESERVES NOT APPLIED AGAINST ASSETS:
Injuries and damages <F164> $ 1,496 $ 1,200 $ - $ 1,084<F165> $ 1,612
========= ========== ========== ========== ========
Medical insurance <F166> $ 667 $ 3,916 $ - $ 3,842<F167> $ 741
========= ========== ========== ========== ========
<F163> Amounts charged off as uncollectible after deducting customers' deposits and recoveries of
accounts previously charged off.
<F164> Provided to cover claims for injuries to employees, workmen's compensation, bodily injury to
others, and property damage.
<F165> Principally payments for various injuries and damages and expenses in connection therewith.
<F166> Provided to cover claims for employee medical insurance.
<F167> Principally payments for various employee medical expenses and expenses in connection
therewith.
|
WESTERN MASSACHUSETTS ELECTRIC COMPANY SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
YEAR ENDED DECEMBER 31, 1991
(Thousands of Dollars)
- ----------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
Additions
--------------------
(1) (2)
Charged to
Balance at Charged to other Balance
beginning costs and accounts- Deductions- at end
Description of period expenses describe describe of period
- ------------------------------------------------------------------------------------------------------
RESERVES DEDUCTED FROM ASSETS
TO WHICH THEY APPLY:
Reserves for uncollectible accounts $ 1,909 $ 3,789 $ - $ 3,721<F155> $ 1,977
========= ========= ======== ========= =========
RESERVES NOT APPLIED AGAINST ASSETS:
Injuries and damages <F156> $ 986 $ 1,200 $ - $ 690<F157> $ 1,496
Medical insurance <F158> 629 4,178 - 4,140<F159> 667
Other <F160> 738 397 19<F161> 150<F162> 1,004
---------- ---------- -------- --------- ---------
TOTAL $ 2,353 $ 5,775 $ 19 $ 4,980 $ 3,167
========= ========= ======== ========= =========
<F155> Amounts charged off as uncollectible after deducting customers' deposits and recoveries of
accounts previously charged off.
<F156> Provided to cover claims for injuries to employees, workmen's compensation, bodily injury to
others, and property damage.
<F157> Principally payments for various injuries and damages and expenses in connection therewith.
<F158> Provided to cover claims for employee medical insurance.
<F159> Principally payments for various employee medical expenses and expenses in connection
therewith.
<F160> Consists of a long-term disability insurance reserve, a supplemental executive retirement plan
reserve, an early retirement incentive reserve, and a reserve for nuclear materials and
supplies remaining at decommissioning.
<F161> Employee contributions related to the long-term disability plan.
<F162> Payments under a long-term disability plan, supplemental executive retirement plan, and early
retirement incentives.
|
NORTHEAST UTILITIES AND SUBSIDIARIES SCHEDULE IX
SHORT-TERM BORROWINGS
YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
(Thousands of Dollars)
- ----------------------------------------------------------------------------------------------------
Column A Column B Column C <F161> Column D Column E <F162> Column<F163>
Category of Balance Weighted Maximum Average Weighted
aggregate at end of average amount amount average
short-term period interest outstanding outstanding interest rate
borrowings rate at end during the during the during the
of period period period period
- ------------------------------------------------------------------------------------------------------
December 31, 1993
- -------------------------
Notes Payable to Banks $ 173,500 3.3 % $ 254,000 $ 169,081 4.0 %
Commercial Paper $ - - % $ 203,500 $ 91,031 3.4 %
December 31, 1992
- -------------------------
Notes Payable to Banks $ 220,000 4.0 % $ 245,000 $ 84,285 5.0 %
Commercial Paper $ 132,740 4.1 % $ 138,000 $ 36,507 3.7 %
December 31, 1991
- -------------------------
Notes Payable to Banks $ 62,500 5.2 % $ 218,500 $ 114,225 7.0 %
Commercial Paper $ - - % $ 115,000 $ 38,669 6.4 %
<F161> Excludes the effect of commitment fees.
<F162> Average daily balance during the period.
<F163> Based on the daily amounts outstanding including commitmentfees.
|
THE CONNECTICUT LIGHT AND POWER COMPANY SCHEDULE IX
SHORT-TERM BORROWINGS
YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
(Thousands of Dollars)
- -----------------------------------------------------------------------------------------------
Column A Column B Column C <F164> Column D Column E <F165> Column F <F166>
Category of Balance Weighted Maximum Average Weighted
aggregate at end of average amount amount average
short-term period interest outstanding outstanding interest rate
borrowings rate at end during the during the during the
of period period period period
- -----------------------------------------------------------------------------------------------
December 31, 1993
- -------------------------
Notes Payable to Banks $ 95,000 3.3 % $ 145,500 $ 86,101 3.8 %
Commercial Paper $ - - % $ 197,500 $ 83,660 3.4 %
NU System Money Pool $ 1,250 2.9 % $ 28,500 $ 6,801 3.0 %
December 31, 1992
- -------------------------
Notes Payable to Banks $ 96,500 4.0 % $ 193,000 $ 43,314 4.8 %
Commercial Paper $ 109,240 4.1 % $ 118,000 $ 27,911 3.7 %
NU System Money Pool $ - - % $ 272,750 $ 80,473 3.9 %
December 31, 1991
- -------------------------
Notes Payable to Banks $ 53,500 5.2 % $ 174,000 $ 75,355 6.8 %
Commercial Paper $ - - % $ 114,000 $ 18,166 6.0 %
NU System Money Pool $ 137,000 4.1 % $ 142,500 $ 11,573 4.6 %
<F164> Excludes the effect of commitment fees.
<F165> Average daily balance during the period.
<F166> Based on the daily amounts outstanding including commitmentfees.
|
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE IX
SHORT-TERM BORROWINGS
FOR THE YEAR ENDED DECEMBER 31, 1993, THE PERIOD JUNE 5,1992 THROUGH DECEMBER 31, 1992,
THE PERIOD JANUARY 1, 1992 THROUGH JUNE 4, 1992
(Thousands of Dollars)
- -----------------------------------------------------------------------------------------------------
Column A Column B Column C <F167> ColumnD Column E <F168> Column F<F169>
Category of Balance Weighted Maximum Average Weighted
aggregate at end of average amount amount average
short-term period interest outstanding outstanding interest rate
borrowings rate at end during the during the during the
of period period period period
- -----------------------------------------------------------------------------------------------------
December 31, 1993 <F170>
- -------------------------------
Notes Payable to Banks $ - - % $ 35,000 $ 4,205 12.3 %
NU System Money Pool $ 2,500 2.9 % $ 17,500 N/A <F171> N/A <F171>%
For the Period June 5, 1992
through December 31, 1992 <F170>
- ------------------------------
Notes Payable to Banks $ 35,000 5.0 % $ 108,000 $ 8,767 6.7 %
NU System Money Pool $ 8,500 2.7 % $ 25,000 N/A <F171> N/A <F171>
For the Period January 1, 1992
through June 4, 1992
- ------------------------------
Notes Payable to Banks $ 108,000 5.6 % $ 128,000 $ 99,013 5.6 %
<F167> Excludes the effect of commitment fees.
<F168> Average daily balance during the period.
<F169> Based on the daily amounts outstanding including commitmentfees.
<F170> Public Service Company of New Hampshire was acquired byNortheast Utilities on June 5, 1992.
<F171> Average money pool investments were greater than averagemoney pool borrowings during the
period.
|
WESTERN MASSACHUSETTS ELECTRICCOMPANY SCHEDULE IX
SHORT-TERM BORROWINGS
YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
(Thousands of Dollars)
- -------------------------------------------------------------------------------------------------
Column A Column B Column C <F172> Column D Column E <F173> Column F <F174>
Category of Balance Weighted Maximum Average Weighted
aggregate at end of average amount amount average
short-term period interest outstanding outstanding interest rate
borrowings rate at end during the during the during the
of period period period period
- -------------------------------------------------------------------------------------------------
December 31, 1993
- -------------------------
Notes Payable to Banks $ 6,000 3.3 % $ 25,000 $ 6,705 4.5 %
Commercial Paper $ - - % $ 23,500 $ 5,727 3.5 %
NU System Money Pool $ - - % $ 28,000 $ N/A <F175> N/A <F175> %
December 31, 1992
- -------------------------
Notes Payable to Banks $ 18,000 3.8 % $ 30,000 $ 2,142 10.6 %
Commercial Paper $ 23,500 4.2 % $ 30,000 $ 8,596 3.7 %
NU System Money Pool $ - - % $ 42,500 $ 10,202 4.2 %
December 31, 1991
- -------------------------
Notes Payable to Banks $ 9,000 5.3 % $ 49,000 $ 19,504 7.1 %
Commercial Paper $ - - % $ 37,000 $ 13,466 6.5 %
NU System Money Pool $ 35,750 4.1 % $ 38,000 $ 4,933 5.1 %
<F172> Excludes the effect of commitment fees.
<F173> Average daily balance during the period.
<F174> Based on the daily amounts outstanding including commitmentfees of compensating balances.
<F175> Average money pool investments were greater than averagemoney pool borrowings
during the period.
|
NORTH ATLANTIC ENERGY CORPORATION SCHEDULE IX
SHORT-TERM BORROWINGS
FOR THE YEAR ENDED DECEMBER 31, 1993 AND THE PERIOD JUNE 5, 1992
THROUGH DECEMBER 31, 1992
(Thousands of Dollars)
- ------------------------------------------------------------------------------------------------------
Column A Column B Column C <F176> ColumnD Column E <F177> Column F <F178>
Category o Balance Weighted Maximum Average Weighted
aggregate at end of average amount amount average
short-term period interest outstanding outstanding interest rate
borrowings rate at end duringthe during the during the
of period period period period
- -----------------------------------------------------------------------------------------------------
December 31, 1993
- -----------------------------
NU System Money Pool $ - - % $ 34,500 $ 14,835 3.2 %
For the Period June 5, 1992
through December 31, 1992 <F176>
- -----------------------------
NU System Money Pool $ 18,500 2.7 % $ 35,500 $ 21,234 3.2 %
<F176> Atlantic Energy Corporation began operations on June 5, 1992.
<F177> Average daily balance during the period.
|
NORTHEAST UTILITIES AND SUBSIDIARIES SCHEDULE X
SUPPLEMENTARY INCOME STATEMENT INFORMATION
YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
(Thousands of Dollars)
- ----------------------------------------------------------------------------------------------------
Column A Column B
Item Charged to Expenses
- ----------------------------------------------------------------------------------------------------
1993 1992 1991
---------------- ---------------- ----------------
Taxes, other than payroll and
income taxes:
State gross receipts $ 94,199 $ 87,695 $ 87,240
Real and personal property 113,253 98,279 75,416
---------------- ---------------- ----------------
TOTAL $ 207,452 $ 185,974 $ 162,656
================ ================ ================
|
THE CONNECTICUT LIGHT AND POWER COMPANY SCHEDULE X
SUPPLEMENTARY INCOME STATEMENT INFORMATION
YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
(Thousands of Dollars)
- -----------------------------------------------------------------------------------------------------
Column A Column B
Item Charged to Expense
- -----------------------------------------------------------------------------------------------------
1993 1992 1991
---------------- ---------------- ----------------
Taxes, other than payroll and
income taxes:
State gross receipts $ 94,047 $ 87,532 $ 87,095
Real and personal property 63,551 64,054 61,344
---------------- ---------------- -----------------
TOTAL $ 157,598 $ 151,586 $ 148,439
================ ================ =================
|
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE X
SUPPLEMENTARY INCOME STATEMENT INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1993 AND THE PERIODS JUNE 5, 1992
THROUGH DECEMBER 31, 1992 AND JANUARY 1, 1992 THROUGH JUNE 4, 1992
(Thousands of Dollars)
- --------------------------------------------------------------------------------------------------
Column A Column B
Item Charged to Expenses
- --------------------------------------------------------------------------------------------------
December 31, 1993
- --------------------------------
Taxes, other than payroll and
income taxes:
Real and personal property $ 25,020
================
TOTAL
June 5, 1992 - December 31, 1992 <F178>
- --------------------------------
Taxes, other than payroll and
income taxes:
Real and personal property $ 13,827
================
TOTAL
January 1, 1992 - June 4, 1992
- --------------------------------
Taxes, other than payroll and
income taxes:
Real and personal property $ 16,588
================
<F178> Public Service Company of New Hampshire was acquired by Northeast Utilities on June 5, 1992.
|
WESTERN MASSACHUSETTS ELECTRIC COMPANY SCHEDULE X
SUPPLEMENTARY INCOME STATEMENT INFORMATION
YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
(Thousands of Dollars)
- ----------------------------------------------------------------------------------------------------
Column A Column B
Item Charged to Expense
- ----------------------------------------------------------------------------------------------------
1993 1992 1991
---------------- ---------------- ----------------
Taxes, other than payroll and
income taxes:
Real and personal property $ 14,279 $ 12,947 $ 11,814
================ ================ ================
TOTAL
|
NORTH ATLANTIC ENERGY CORPORATION SCHEDULE X
SUPPLEMENTARY INCOME STATEMENT INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1993 AND
FOR THE PERIOD JUNE 5, 1992 THROUGH DECEMBER 31, 1992<F179>
(Thousands of Dollars)
- --------------------------------------------------------------------------------------
Column A Column B
Item Charged to Expense
- --------------------------------------------------------------------------------------
December 31, 1993
- ------------------------------
Taxes, other than payroll and
income taxes:
Real and personal property $ 7,549
============
TOTAL
June 5, 1992 - December 31, 1992
- ----------------------------------------
Taxes, other than payroll and
income taxes:
Real and personal property $ 4,528
============
TOTAL
<F179>North Atlantic Energy Corporation began operations on June 5, 1992.
|
EXHIBIT INDEX
Each document described below is incorporated by reference to the files of the Securities and Exchange Commission, unless the reference to the document is marked as follows:
* - Filed with the 1993 Annual Report on Form 10-K for NU and herein
incorporated by reference from the 1993 NU Form 10-K, File
No. 1-5324 into the 1993 Annual Reports on Form 10-K for CL&P,
PSNH, WMECO and NAEC.
# - Filed with the 1993 Annual Report on Form 10-K for NU and herein incorporated by reference from the 1993 NU Form 10-K, File No. 1-5324 into the 1993 Annual Report on Form 10-K for CL&P.
@ - Filed with the 1993 Annual Report on Form 10-K for NU and herein incorporated by reference from the 1993 NU Form 10-K, File No. 1-5324 into the 1993 Annual Report on Form 10-K for PSNH.
** - Filed with the 1993 Annual Report on Form 10-K for NU and herein incorporated by reference from the 1993 NU Form 10-K, File No. 1-5324 into the 1993 Annual Report on Form 10-K for WMECO.
## - Filed with the 1993 Annual Report on Form 10-K for NU and herein incorporated by reference from the 1993 Form 10-K, File No. 1-5324 into the 1993 Annual Report on Form 10-K for NAEC.
Exhibit
Number Description
3 Articles of Incorporation and By-Laws
3.1 Northeast Utilities
3.1.1 Declaration of Trust of NU, as amended through May 24, 1988.
(Exhibit 3.1.1, 1988 NU Form 10-K, File No. 1-5324)
3.2 The Connecticut Light and Power Company
# 3.2.1 Certificate of Incorporation of CL&P, restated to
March 22, 1994.
# 3.2.2 By-laws of CL&P, as amended to March 1, 1982.
3.3 Public Service Company of New Hampshire
|
@ 3.3.1 Articles of Incorporation, as amended to May 16, 1991.
@ 3.3.2 By-laws of PSNH, as amended to November 1, 1993.
3.4 Western Massachusetts Electric Company
3.4.1 Certificate of Organization of WMECO, as amended, to
August 31, 1954. (Exhibit 3.1, File No. 2-11114)
3.4.2 Amendments to Certificate of Organization of WMECO of
May 19, 1966 and of December 5, 1967. (Exhibit 3.2, File
No. 2-30534)
|
3.4.3 Articles of Amendment dated December 9, 1981. (Exhibit
3.1.2, 1981 WMECO Form 10-K, File No. 0-7624)
3.4.4 Certificate of Vote of Directors Establishing a Series of a
Class of Stock, dated December 16, 1981. (Exhibit 3.1.3,
1981 WMECO Form 10-K, File No. 0-7624)
3.4.5 Articles of Amendment dated April 7, 1983. (Exhibit 3.3.5,
1983 NU Form 10-K, File No. 1-5324)
3.4.6 Certificate of Vote of Directors Establishing a Series of a
Class of Stock, dated April 12, 1983. (Exhibit 3.3.6, 1983
NU Form 10-K, File No. 1-5324)
3.4.7 Articles of Amendment dated January 29, 1987. (Exhibit
3.3.7, 1986 NU Form 10-K, File No. 1-5324)
3.4.8 Articles of Amendment dated February 11, 1987. (Exhibit
3.3.8, 1986 NU Form 10-K, File No. 1-5324)
3.4.9 Articles of Amendment dated February 19, 1988. (Exhibit
3.3.9, 1987 NU Form 10-K, File No. 1-5324)
|
3.4.10 Certificate of Vote of Directors Establishing a Series of a Class of Stock, dated February 23, 1988. (Exhibit 3.3.10, 1987 NU Form 10-K, File No. 1-5324)
** 3.4.11 By-laws of WMECO, as amended to February 24, 1988.
3.5 North Atlantic Energy Corporation
## 3.5.1 Articles of Incorporation of NAEC dated September 20, 1991.
## 3.5.2 Articles of Amendment dated October 16, 1991 and June 2,
1992 to Articles of Incorporation of NAEC.
## 3.5.3 By-laws of NAEC, as amended to November 8, 1993.
|
4 Instruments defining the rights of security holders, including indentures
4.1 Northeast Utilities
4.1.1 Indenture dated as of December 1, 1991 between Northeast
Utilities and IBJ Schroder Bank & Trust Company, with
respect to the issuance of Debt Securities. (Exhibit 4.1.1,
1991 NU Form 10-K, File No. 1-5324)
4.1.2 First Supplemental Indenture dated as of December 1, 1991
between Northeast Utilities and IBJ Schroder Bank & Trust
Company, with respect to the issuance of Series A Notes.
(Exhibit 4.1.2, 1991 NU Form 10-K, File No. 1-5324)
4.1.3 Second Supplemental Indenture dated as of March 1, 1992
between Northeast Utilities and IBJ Schroder Bank & Trust
Company with respect to the issuance of 8.38% Amortizing
Notes. (Exhibit 4.1.3, 1992 NU Form 10-K, File No. 1-5324)
|
4.1.4 Warrant Agreement dated as of June 5, 1992 between Northeast
Utilities and the Service Company. (Exhibit 4.1.4, 1992 NU
Form 10-K, File No. 1-5324)
4.1.4.1 Additional Warrant Agent Agreement dated as of
June 5, 1992 between Northeast Utilities and
State Street Bank and Trust Company. (Exhibit
4.1.4.1, 1992 NU Form 10-K, File No. 1-5324)
4.1.4.2 Exchange and Disbursing Agent Agreement dated as
of June 5, 1992 among Northeast Utilities,
Public Service Company of New Hampshire and
State Street Bank and Trust Company. (Exhibit
4.1.4.2, 1992 NU Form 10-K, File No. 1-5324)
4.1.5 Credit Agreements among CL&P, NU, WMECO, NUSCO
(as Agent) and 19 Commercial Banks dated
December 3, 1992 (364 Day and Three-Year
Facilities). (Exhibit C.2.38, 1992 NU Form U5S,
File No. 30-246)
4.1.6 Credit Agreements among CL&P, WMECO, NU, Holyoke
Water Power Company, RRR, NNECO and NUSCO (as
Agent) dated December 3, 1992 (364 Day and
Three-Year Facilities). (Exhibit C.2.39, 1992 NU
Form U5S, File No. 30-246)
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4.2 The Connecticut Light and Power Company
4.2.1 Indenture of Mortgage and Deed of Trust between CL&P and
Bankers Trust Company, Trustee, dated as of May 1, 1921.
(Composite including all twenty-four amendments to May 1,
1967.) (Exhibit 4.1.1, 1989 NU Form 10-K, File No. 1-5324)
Supplemental Indentures to the Composite May 1, 1921
Indenture of Mortgage and Deed of Trust between CL&P and
Bankers Trust Company, dated as of:
4.2.2 April 1, 1967. (Exhibit 4.16, File No. 2-60806)
4.2.3 January 1, 1968. (Exhibit 4.18, File No. 2-60806)
4.2.4 December 1, 1969. (Exhibit 4.20, File No. 2-60806)
4.2.5 June 30, 1982. (Exhibit 4.33, File No. 2-79235)
4.2.6 June 1, 1989. (Exhibit 4.1.24, 1989 NU Form 10-K, File No.
1-5324)
4.2.7 September 1, 1989. (Exhibit 4.1.25, 1989 NU Form 10-K, File
No. 1-5324)
4.2.8 December 1, 1989. (Exhibit 4.1.26, 1989 NU Form 10-K, File
No. 1-5324)
4.2.9 April 1, 1992. (Exhibit 4.30, File No. 33-59430)
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4.2.10 July 1, 1992. (Exhibit 4.31, File No. 33-59430)
4.2.11 October 1, 1992. (Exhibit 4.32, File No. 33-59430)
4.2.12 July 1, 1993. (Exhibit A.10(b), File No. 70-8249)
4.2.13 July 1, 1993. (Exhibit A.10(b), File No. 70-8249)
# 4.2.14 December 1, 1993.
# 4.2.15 February 1, 1994.
# 4.2.16 February 1, 1994.
4.2.17 Financing Agreement between Industrial Development Authority of the State of New Hampshire and CL&P (Pollution Control Bonds) dated as of December 1, 1986. (Exhibit C.1.47, 1986 NU Form U5S, File No. 30-246)
4.2.18 Financing Agreement between Industrial Development Authority of the State of New Hampshire and CL&P (Pollution Control Bonds) dated as of October 1, 1988. (Exhibit C.1.55, 1988 NU Form U5S, File No. 30-246)
4.2.19 Financing Agreement between Industrial Development Authority of the State of New Hampshire and CL&P (Pollution Control Bonds) dated as of December 1, 1989. (Exhibit C.1.39, 1989 NU Form U5S, File No. 30-246)
4.2.20 Loan and Trust Agreement among Business Finance Authority of the State of New Hampshire and CL&P (Pollution Control Bonds) dated as of December 1, 1992. (Exhibit C.2.33, 1992 NU Form U5S, File No. 30-246)
# 4.2.21 Series A (Tax Exempt Refunding) PCRB Loan Agreement between Connecticut Development Authority and CL&P (Pollution Control Bonds) dated as of September 1, 1993.
# 4.2.22 Series B (Tax Exempt Refunding) PCRB Loan Agreement between Connecticut Development Authority and CL&P (Pollution Control Bonds) dated as of September 1, 1993.
# 4.2.23 Series A (Tax Exempt Refunding) PCRB Letter of Credit and Reimbursement Agreement (Pollution Control Bonds) dated as of September 1, 1993.
# 4.2.24 Series B (Tax Exempt Refunding) PCRB Letter of Credit and Reimbursement Agreement (Pollution Control Bonds) dated as of September 1, 1993.
4.3 Public Service Company of New Hampshire
4.3.1 First Mortgage Indenture dated as of August 15, 1978 between
PSNH and First Fidelity Bank, National Association, New
Jersey, Trustee, (Composite including all amendments to May
16, 1991). (Exhibit 4.4.1, 1992 NU Form 10-K, File No. 1-
5324)
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4.3.1.1 Tenth Supplemental Indenture dated as of May 1,
1991 between PSNH and First Fidelity Bank,
National Association. (Exhibit 4.1, PSNH Current
Report on Form 8-K dated February 10, 1992, File
No. 1-6392).
4.3.2 Revolving Credit Agreement dated as May 1, 1991. (Exhibit
4.12, PSNH Current Report on Form 8-K dated February 10,
1992, File No. 1-6392)
4.3.3 Term Credit Agreement dated as of May 1, 1991. (Exhibit
4.11, PSNH Current Report on Form 8-K dated February 10,
1992, File No. 1-6392)
4.3.4 Series A (Tax Exempt New Issue) PCRB Loan and Trust
Agreement dated as of May 1, 1991. (Exhibit 4.2, PSNH
Current Report on Form 8-K dated February 10, 1992, File No.
1-6392)
4.3.5 Series B (Tax Exempt Refunding) PCRB Loan and Trust
Agreement dated as of May 1, 1991. (Exhibit 4.3, PSNH
Current Report on Form 8-K dated February 10, 1992, File No.
1-6392)
4.3.6 Series C (Tax Exempt Refunding) PCRB Loan and Trust
Agreement dated as of May 1, 1991. (Exhibit 4.4, PSNH
Current Report on Form 8-K dated February 10, 1992, File No.
1-6392)
4.3.7 Series D (Taxable New Issue) PCRB Loan and Trust Agreement
dated as of May 1, 1991. (Exhibit 4.5, PSNH Current Report
on Form 8-K dated February 10, 1992, File No. 1-6392)
4.3.7.1 First Supplement to Series D (Tax Exempt
Refunding Issue) PCRB Loan and Trust Agreement
dated as of December 1, 1992. (Exhibit 4.4.5.1,
1992 NU Form 10-K, File No. 1-5324)
4.3.8 Series E (Taxable New Issue) PCRB Loan and Trust Agreement
dated as of May 1, 1991. (Exhibit 4.6, PSNH Current Report
on Form 8-K dated February 10, 1992, File No. 1-6392)
@ 4.3.8.1 First Supplement to Series E (Tax Exempt
Refunding Issue) PCRB Loan and Trust Agreement
dated as of December 1, 1993.
@ 4.3.9 Series D (May 1, 1991 Taxable New Issue and December 1, 1992
Tax Exempt Refunding Issue) PCRB Letter of Credit and
Reimbursement Agreement dated as of October 1, 1992.
@ 4.3.9.1 Amended and Restated Letter of Credit dated
December 17, 1992.
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4.3.10 Series E (May 1, 1991 Taxable New Issue and December 1, 1993 Tax Exempt Refunding Issue) PCRB Letter of Credit and Reimbursement Agreement dated as of May 1, 1991. (Exhibit 4.8, PSNH Current Report on Form 8-K dated February 10, 1992, File No. 1-6392)
@ 4.3.10.1 Amended and Restated Letter of Credit dated December 15, 1993.
4.4 Western Massachusetts Electric Company
** 4.4.1 First Mortgage Indenture and Deed of Trust between WMECO and
Old Colony Trust Company, Trustee, dated as of August 1,
1954.
Supplemental Indentures thereto dated as of:
4.4.2 March 1, 1967. (Exhibit 2.5, File No. 2-68808)
4.4.3 March 1, 1968. (Exhibit 2.6, File No. 2-68808)
4.4.4 December 1, 1968. (Exhibit 2.7, File No. 2-68808)
4.4.5 July 1, 1972. (Exhibit 2.9, File No. 2-68808)
4.4.6 May 1, 1986. (Exhibit 4.3.18, 1986 NU Form 10-K, File No.
1-5324)
4.4.7 December 1, 1988. (Exhibit 4.3.20, 1988 NU Form 10-K, File
No. 1-5324.)
4.4.8 September 1, 1990. (Exhibit 4.3.15, 1990 NU Form 10-K, File
No. 1-5324.)
4.4.9 December 1, 1992. (Exhibit 4.15, File No. 33-55772)
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4.4.10 January 1, 1993. (Exhibit 4.5.13, 1992 NU Form 10-K, File No. 1-5324)
** 4.4.11 March 1, 1994.
** 4.4.12 March 1, 1994.
** 4.4.13 Series A (Tax Exempt Refunding) PCRB Loan Agreement between Connecticut Development Authority and WMECO (Pollution Control Bonds) dated as of September 1, 1993.
** 4.4.14 Series A (Tax Exempt Refunding) PCRB Letter of Credit and Reimbursement Agreement (Pollution Control Bonds) dated as of September 1, 1993.
4.5 North Atlantic Energy Corporation
4.5.1 First Mortgage Indenture and Deed of Trust between NAEC and
United States Trust Company of New York, Trustee, dated as
of June 1, 1992. (Exhibit 4.6.1, 1992 NU Form 10-K, File
No. 1-5324)
4.5.2 Note Indenture dated as of May 15, 1991. (Exhibit 4.10,
PSNH Current Report on Form 8-K dated February 10, 1992,
File No. 1-6392)
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4.5.3 First Supplemental Indenture dated as of June 5, 1992
between NAEC, PSNH and United States Trust Company of New
York, Trustee. (Exhibit 4.6.3, 1992 NU Form 10-K, File No.
1-5324)
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10 Material Contracts
10.1 Stockholder Agreement dated as of July 1, 1964 among the
stockholders of Connecticut Yankee Atomic Power Company (CYAPC).
(Exhibit 13.1, File No. 2-22958)
10.2 Form of Power Contract dated as of July 1, 1964 between CYAPC and each of CL&P, HELCO, PSNH and WMECO. (Exhibit 13.2, File No. 2-22958)
10.2.1 Form of Additional Power Contract dated as of April 30,
1984, between CYAPC and each of CL&P, PSNH and WMECO.
(Exhibit 10.2.4, 1984 NU Form 10-K, File No. 1-5324)
10.2.2 Form of 1987 Supplementary Power Contract dated as of April
1, 1987, between CYAPC and each of CL&P, PSNH and WMECO.
(Exhibit 10.2.6, 1987 NU Form 10-K, File No. 1-5324)
10.3 Capital Funds Agreement dated as of September 1, 1964 between CYAPC and CL&P, HELCO, PSNH and WMECO. (Exhibit 13.3, File No. 2-22958)
#@** 10.4 Stockholder Agreement dated December 10, 1958 between Yankee Atomic Electric Company (YAEC) and CL&P, HELCO, PSNH and WMECO.
10.5 Form of Amendment No. 3, dated as of April 1, 1985, to Power Contract between YAEC and each of CL&P, PSNH and WMECO, including a composite restatement of original Power Contract dated June 30, 1959 and Amendment No. 1 dated April 1, 1975 and Amendment No. 2 dated October 1, 1980. (Exhibit 10.5, 1988 NU Form 10-K, File No. 1-5324.)
10.5.1 Form of Amendment No. 4 to Power Contract, dated May 6,
1988, between YAEC and each of CL&P, PSNH and WMECO.
(Exhibit 10.5.1, 1989 NU Form 10-K, File No. 1-5324)
10.5.2 Form of Amendment No. 5 to Power Contract, dated June 26,
1989, between YAEC and each of CL&P, PSNH and WMECO.
(Exhibit 10.5.2, 1989 NU Form 10-K, File No. 1-5324)
10.5.3 Form of Amendment No. 6 to Power Contract, dated July 1,
1989, between YAEC and each of CL&P, PSNH and WMECO.
(Exhibit 10.5.3, 1989 NU Form 10-K, File No. 1-5324)
#@** 10.5.4 Form of Amendment No. 7 to Power Contract, dated February 1, 1992, between YAEC and each of CL&P, PSNH and WMECO.
10.6 Stockholder Agreement dated as of May 20, 1968 among stockholders of MYAPC. (Exhibit 4.15, File No. 2-30018)
10.7 Form of Power Contract dated as of May 20, 1968 between MYAPC and each of CL&P, HELCO, PSNH and WMECO. (Exhibit 4.14, File No. 2-30018)
#@** 10.7.1 Form of Amendment No. 1 to Power Contract dated as of March 1, 1983 between MYAPC and each of CL&P, PSNH and WMECO.
#@** 10.7.2 Form of Amendment No. 2 to Power Contract dated as of January 1, 1984 between MYAPC and each of CL&P, PSNH and WMECO.
10.7.3 Form of Amendment No. 3 to Power Contract dated as of October 1, 1984 between MYAPC and each of CL&P, PSNH and WMECO. (Exhibit 10.7.3, 1985 NU Form 10-K, File No. 1-5324)
#@** 10.7.4 Form of Additional Power Contract dated as of February 1, 1984 between MYAPC and each of CL&P, PSNH and WMECO.
10.8 Capital Funds Agreement dated as of May 20, 1968 between Maine Yankee Atomic Power Company (MYAPC) and CL&P, PSNH, HELCO and WMECO. (Exhibit 4.13, File No. 2-30018)
10.8.1 Amendment No. 1 to Capital Funds Agreement, dated as of
August 1, 1985, between MYAPC, CL&P, PSNH and WMECO.
(Exhibit 10.6.1, 1985 NU Form 10-K, File No. 1-5324)
10.9 Sponsor Agreement dated as of August 1, 1968 among the sponsors of VYNPC. (Exhibit 4.16, File No. 2-30285)
10.10 Form of Power Contract dated as of February 1, 1968 between VYNPC and each of CL&P, HELCO, PSNH and WMECO. (Exhibit 4.18, File No. 2-30018)
10.10.1 Form of Amendment to Power Contract dated as of June
1, 1972 between VYNPC and each of CL&P, HELCO, PSNH
and WMECO. (Exhibit 5.22, File No. 2-47038)
#@** 10.10.2 Form of Second Amendment to Power Contract dated as of
April 15, 1983 between VYNPC and each of CL&P, PSNH
and WMECO.
10.10.3 Form of Third Amendment to Power Contract dated as of
April 24, 1985 between VYNPC and each of CL&P, PSNH
and WMECO. (Exhibit 10.10.3, 1986 NU Form 10-K, File
No. 1-5324)
10.10.4 Form of Fourth Amendment to Power Contract dated as of
June 1, 1985 between VYNPC and each of CL&P, PSNH and
WMECO. (Exhibit 10.10.4, 1986 NU Form 10-K, File No.
1-5324)
10.10.5 Form of Fifth Amendment to Power Contract dated as of
May 6, 1988 between VYNPC and each of CL&P, PSNH and
WMECO. (Exhibit 10.10.5, 1990 NU Form 10-K, File
No. 1-5324)
10.10.6 Form of Sixth Amendment to Power Contract dated as of
May 6, 1988 between VYNPC and each of CL&P, PSNH and
WMECO. (Exhibit 10.10.6, 1990 NU Form 10-K, File No.
1-5324)
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10.10.7 Form of Seventh Amendment to Power Contract dated as
of June 15, 1989 between VYNPC and each of CL&P, PSNH
and WMECO. (Exhibit 10.10.7, 1990 NU Form 10-K, File
No. 1-5324)
10.10.8 Form of Eighth Amendment to Power Contract dated as of
December 1, 1989 between VYNPC and each of CL&P, PSNH
and WMECO. (Exhibit 10.10.8, 1990 NU Form 10-K, File
No. 1-5324)
#@** 10.10.9 Form of Additional Power Contract dated as of February
1, 1984 between VYNPC and each of CL&P, PSNH and
WMECO.
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10.11 Capital Funds Agreement dated as of February 1, 1968 between Vermont Yankee Nuclear Power Corporation (VYNPC) and CL&P, HELCO, PSNH and WMECO. (Exhibit 4.16, File No. 2-30018)
10.11.1 Form of First Amendment to Capital Funds Agreement
dated as of March 12, 1968 between VYNPC and CL&P,
HELCO, PSNH and WMECO. (Exhibit 4.17, File
No. 2-30018)
#@** 10.11.2 Form of Second Amendment to Capital Funds Agreement
dated as of September 1, 1993 between VYNPC and CL&P,
HELCO, PSNH and WMECO.
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10.12 Amended and Restated Millstone Plant Agreement dated as of December 1, 1984 by and among CL&P, WMECO and Northeast Nuclear Energy Company (NNECO). (Exhibit 10.17, 1985 NU Form 10-K, File No. 1-5324)
10.13 Sharing Agreement dated as of September 1, 1973 with respect
to 1979 Connecticut nuclear generating unit (Millstone 3).
(Exhibit 6.43, File No. 2-50142)
10.13.1 Amendment dated August 1, 1974 to Sharing Agreement -
1979 Connecticut Nuclear Unit. (Exhibit 5.45, File
No. 2-52392)
10.13.2 Amendment dated December 15, 1975 to Sharing Agreement
- 1979 Connecticut Nuclear Unit. (Exhibit 7.47, File
No. 2-60806)
10.13.3 Amendment dated April 1, 1986 to Sharing Agreement -
1979 Connecticut Nuclear Unit. (Exhibit 10.17.3, 1990
NU Form 10-K, File No. 1-5324)
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10.14 Agreement dated July 19, 1990, among NAESCO and Seabrook
Joint owners with respect to operation of Seabrook.
(Exhibit 10.53, 1990 NU Form 10-K, File No. 1-5324)
10.15 Sharing Agreement between CL&P, WMECO, HP&E, HWP and PSNH dated as of June 1, 1992. (Exhibit 10.17, 1992 NU Form 10- K, File No. 1-5324)
10.16 Form of Seabrook Power Contract between PSNH and NAEC, as amended and restated. (Exhibit 10.45, NU 1992 Form 10-K, File No. 1-5324)
10.17 Agreement for joint ownership, construction and operation of New Hampshire nuclear generating units dated as of May 1, 1973. (Exhibit 13-57, File No. 2-48966)
10.17.1 Amendments to Exhibit 10.17 dated May 24, 1974, June
21, 1974 and September 25, 1974. (Exhibit 5.15, File
No. 2-51999)
10.17.2 Amendments to Exhibit 10.17 dated October 25, 1974 and
January 31, 1975. (Exhibit 5.23, File No. 2-54646)
10.17.3 Sixth Amendment to Exhibit 10.17 dated as of April 18,
1979. (Exhibit 5.4.3, File No. 2-64294)
10.17.4 Seventh Amendment to Exhibit 10.17 dated as of April
18, 1979. (Exhibit 5.4.4, File No. 2-64294)
10.17.5 Eighth Amendment to Exhibit 10.17 dated as of April
25, 1979. (Exhibit 5.4.5, File No. 2-64815)
10.17.6 Ninth Amendment to Exhibit 10.17 dated as of June 8,
1979. (Exhibit 5.4.6, File No. 2-64815)
10.17.7 Tenth Amendment to Exhibit 10.17 dated as of October
10, 1979. (Exhibit 5.4.2, File No. 2-66334)
10.17.8 Eleventh Amendment to Exhibit 10.17 dated as of
December 15, 1979. (Exhibit 5.4.8, File No. 2-66492)
10.17.9 Twelfth Amendment to Exhibit 10.17 dated as of June
16, 1980. (Exhibit 5.4.9, File No. 2-68168)
10.17.10 Thirteenth Amendment to Exhibit 10.17 dated as of
December 31, 1980. (Exhibit 10.6, File No. 2-70579)
* 10.17.11 Fourteenth Amendment to Exhibit 10.17 dated as of June
1, 1982.
10.17.12 Fifteenth Amendment to Exhibit 10.17 dated as of April
27, 1984. (Exhibit 10.14.12, 1984 NU Form 10-K, File
No. 1-5324)
10.17.13 Sixteenth Amendment to Exhibit 10.17 dated as of June
15, 1984. (Exhibit 10.14.13, 1984 NU Form 10-K, File
No. 1-5324)
10.17.14 Seventeenth Amendment to Exhibit 10.17 dated as of
March 8, 1985. (Exhibit 10.13.14, 1985 NU Form 10-K,
File No. 1-5324)
10.17.15 Eighteenth Amendment to Exhibit 10.17 dated as of
March 14, 1986. (Exhibit 10.13.15, 1986 NU Form 10-K,
File No. 1-5324)
10.17.16 Nineteenth Amendment to Exhibit 10.17 dated as of May
1, 1986. (Exhibit 10.13.16, 1986 NU Form 10-K, File
No. 1-5324)
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10.17.17 Twentieth Amendment to Exhibit 10.17 dated as of July
15, 1986. (Exhibit 10.13.17, 1986 NU Form 10-K, File
No. 1-5324)
10.17.18 Twenty-first Amendment to Exhibit 10.17 dated as of
November 12, 1987. (Exhibit 10.13.18, 1987 NU Form
10-K, File No. 1-5324)
10.17.19 Twenty-second Amendment to Exhibit 10.17 dated as of
January 13, 1989. (Exhibit 10.13.19, 1989 NU Form
10-K, File No. 1-5324)
10.17.20 Twenty-third Amendment to Exhibit 10.17 dated as of
November 1, 1990. (Exhibit 10.13.20, 1990 NU Form 10-
K, File No. 1-5324)
10.17.21 Memorandum of Understanding dated November 7, 1988
between PSNH and Massachusetts Municipal Wholesale
Electric Company (Exhibit 10.17, PSNH 1989 Form 10-K,
File No. 1-6392)
10.17.22 Agreement of Settlement among Joint Owners dated as of
January 13, 1989. (Exhibit 10.13.21, 1988 NU Form 10-
K, File No. 1-5324)
10.17.22.1 Supplement to Settlement Agreement, dated as of
February 7, 1989, between PSNH and Central Maine
Power Company. (Exhibit 10.18.1, PSNH 1989 Form
10-K, File No. 1-6392)
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10.18 Amended and Restated Agreement for Seabrook Project Disbursing Agent dated as of November 1, 1990. (Exhibit 10.4.7, File No. 33-35312)
10.18.1 Form of First Amendment to Exhibit 10.18. (Exhibit
10.4.8, File No. 33-35312)
* 10.18.2 Form (Composite) of Second Amendment to Exhibit 10.18.
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10.19 Agreement dated November 1, 1974 for Joint Ownership,
Construction and Operation of William F. Wyman Unit No. 4
among PSNH, Central Maine Power Company and other utilities.
(Exhibit 5.16 , File No. 2-52900)
10.19.1 Amendment to Exhibit 10.19 dated June 30, 1975.
(Exhibit 5.48, File No. 2-55458)
10.19.2 Amendment to Exhibit 10.19 dated as of August 16,
1976. (Exhibit 5.19, File No. 2-58251)
10.19.3 Amendment to Exhibit 10.19 dated as of December 31,
1978. (Exhibit 5.10.3, File No. 2-64294)
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#** 10.20 Form of Service Contract dated as of July 1, 1966 between each of NU, CL&P and WMECO and the Service Company.
10.20.1 Service Contract dated as of June 5, 1992 between PSNH
and the Service Company. (Exhibit 10.12.4, 1992 NU
Form 10-K, File No. 1-5324)
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10.20.2 Service Contract dated as of June 5, 1992 between NAEC
and the Service Company. (Exhibit 10.12.5, 1992 NU
Form 10-K, File No. 1-5324)
* 10.20.3 Form of Annual Renewal of Service Contract.
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10.21 Memorandum of Understanding between CL&P, HELCO, Holyoke Power and Electric Company (HP&E), Holyoke Water Power Company (HWP) and WMECO dated as of June 1, 1970 with respect to pooling of generation and transmission. (Exhibit 13.32, File No. 2-38177)
#** 10.21.1 Amendment to Memorandum of Understanding between CL&P,
HELCO, HP&E, HWP and WMECO dated as of February 2,
1982 with respect to pooling of generation and
transmission.
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10.22 New England Power Pool Agreement effective as of November 1, 1971, as amended to November 1, 1988. (Exhibit 10.15, 1988 NU Form 10-K, File No. 1-5324.)
10.22.1 Twenty-sixth Amendment to Exhibit 10.22 dated as of
March 15, 1989. (Exhibit 10.15.1, 1990 NU Form 10-K,
File No. 1-5324)
10.22.2 Twenty-seventh Amendment to Exhibit 10.22 dated as of
October 1, 1990. (Exhibit 10.15.2, 1991 NU Form 10-K,
File No. 1-5324)
10.22.3 Twenty-eighth Amendment to Exhibit 10.22 dated as of
September 15, 1992. (Exhibit 10.18.3, 1992 NU Form
10-K, File No. 1-5324)
* 10.22.4 Twenty-ninth Amendment to Exhibit 10.22 dated as of
May 1, 1993.
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10.23 Agreements among New England Utilities with respect to the Hydro-Quebec interconnection projects. (See Exhibits 10(u) and 10(v); 10(w), 10(x), and 10(y), 1990 and 1988, respectively, Form 10-K of New England Electric System, File No. 1-3446.)
10.24 Trust Agreement dated February 11, 1992, between State Street Bank and Trust Company of Connecticut, as Trustor, and Bankers Trust Company, as Trustee, and CL&P and WMECO, with respect to NBFT. (Exhibit 10.23, 1991 NU Form 10-K, File No. 1-5324)
10.24.1 Nuclear Fuel Lease Agreement dated as of February 11,
1992, between Bankers Trust Company, Trustee, as
Lessor, and CL&P and WMECO, as Lessees. (Exhibit
10.23.1, 1991 NU Form 10-K, File No. 1-5324)
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10.25 Simulator Financing Lease Agreement, dated as of February 1, 1985, by and between ComPlan and NNECO. (Exhibit 10.52, 1985 NU Form 10-K, File No. 1-5324)
10.26 Simulator Financing Lease Agreement, dated as of May 2, 1985, by and between The Prudential Insurance Company of America and NNECO. (Exhibit 10.53, 1985 NU Form 10-K, File No. 1-5324)
10.27 Lease dated as of April 14, 1992 between The Rocky River Realty Company (RRR) and Northeast Utilities Service Company (NUSCO) with respect to the Berlin, Connecticut headquarters (office lease). (Exhibit 10.29, 1992 NU Form 10-K, File No. 1-5324)
10.27.1 Lease date as of April 14, 1992 between RRR and NUSCO
with respect to the Berlin, Connecticut headquarters
(project lease). (Exhibit 10.29.1, 1992 NU Form 10-K,
File No. 1-5324)
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* 10.28 Millstone Technical Building Note Agreement dated as of December 21, 1993 between, by and between The Prudential Insurance Company of America and NNECO.
10.29 Lease and Agreement, dated as of December 15, 1988, by and between WMECO and Bank of New England, N.A., with BNE Realty Leasing Corporation of North Carolina. (Exhibit 10.63, 1988 NU Form 10-K, File No. 1-5324.)
10.30 Note Agreement dated April 14, 1992, by and between The Rocky River Realty Company (RRR) and Purchasers named therein (Connecticut General Life Insurance Company, Life Insurance Company of North America, INA Life Insurance Company of New York, Life Insurance Company of Georgia), with respect to RRR's sale of $15 million of guaranteed senior secured notes due 2007 and $28 million of guaranteed senior secured notes due 2017. (Exhibit 10.52, 1992 NU Form 10-K, File No. 1-5324)
10.30.1 Note Guaranty dated April 14, 1992 by Northeast
Utilities pursuant to Note Agreement dated April 14,
1992 between RRR and Note Purchasers, for the benefit
of The Connecticut National Bank as Trustee, the
Purchasers and the owners of the notes. (Exhibit
10.52.1, 1992 NU Form 10-K, File No. 1-5324)
10.30.2 Assignment of Leases, Rents and Profits, Security
Agreement and Negative Pledge, dated as of April 14,
1992 among RRR, NUSCO and The Connecticut National
Bank as Trustee, securing notes sold by RRR pursuant
to April 14, 1992 Note Agreement. (Exhibit 10.52.2,
1992 NU Form 10-K, File No. 1-5324)
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10.31 Master Trust Agreement dated as of September 2, 1986 between
CL&P and WMECO and Colonial Bank as Trustee, with respect to
reserve funds for Millstone 1 decommissioning costs.
(Exhibit 10.80, 1986 NU Form 10-K, File No. 1-5324)
10.31.1 Notice of Appointment of Mellon Bank, N.A. as
Successor Trustee, dated November 20, 1990, and
Acceptance of Appointment. (Exhibit 10.41.1, 1992 NU
Form 10-K, File No. 1-5324)
|
10.32 Master Trust Agreement dated as of September 2, 1986 between
CL&P and WMECO and Colonial Bank as Trustee, with respect to
reserve funds for Millstone 2 decommissioning costs.
(Exhibit 10.81, 1986 NU Form 10-K, File No. 1-5324)
10.32.1 Notice of Appointment of Mellon Bank, N.A. as
Successor Trustee, dated November 20, 1990, and
Acceptance of Appointment. (Exhibit 10.42.1, 1992 NU
Form 10-K, File No. 1-5324)
|
10.33 Master Trust Agreement dated as of April 23, 1986 between
CL&P and WMECO and Colonial Bank as Trustee, with respect to
reserve funds for Millstone 3 decommissioning costs.
(Exhibit 10.82, 1986 NU Form 10-K, File No. 1-5324)
10.33.1 Notice of Appointment of Mellon Bank, N.A. as
Successor Trustee, dated November 20, 1990, and
Acceptance of Appointment. (Exhibit 10.43.1, 1992 NU
Form 10-K, File No. 1-5324)
|
10.34 NU Executive Incentive Plan, effective as of January 1, 1991. (Exhibit 10.44, NU 1991 Form 10-K, File No. 1-5324)
10.35 Supplemental Executive Retirement Plan for Officers of NU System Companies, Amended and Restated effective as of January 1, 1992. (Exhibit 10.45.1, NU Form 10-Q for the Quarter Ended June 30, 1992, File No. 1-5324)
* 10.35.1 Amendment 1 to Exhibit 10.35, effective as of August 1, 1993.
* 10.35.2 Amendment 2 to Exhibit 10.35, effective as of January 1, 1994.
10.36 Loan Agreement dated as of December 2, 1991, by and between NU and Mellon Bank, N.A., as Trustee, with respect to NU's loan of $175 million to an ESOP Trust. (Exhibit 10.46, NU 1991 Form 10-K, File No. 1-5324)
* 10.36.1 First Amendment to Exhibit 10.36 dated February 7,
1992.
10.36.2 Loan Agreement dated as of March 19, 1992 by and
between NU and Mellon Bank, N.A., as Trustee, with
respect to NU's loan of $75 million to the ESOP Trust.
(Exhibit 10.49.1, 1992 NU Form 10-K, File No. 1-5324)
* 10.36.3 Second Amendment to Exhibit 10.36 dated April 9, 1992.
|
10.37 Management Succession Agreement. (Exhibit 10.47, NU Form 10-Q for the Quarter Ended June 30, 1992, File No. 1-5324)
10.38 Employment Agreement. (Exhibit 10.48, NU Form 10-Q for the Quarter Ended June 30, 1992, File No. 1-5324)
13 Annual Report to Security Holders (Each of the Annual Reports is filed only with the Form 10-K of that respective registrant.)
* 13.1 Portions of the Annual Report to Security Holders of NU (pages 17 - 54) that have been incorporated by reference into this Form 10-K.
13.2 Annual Report of CL&P.
13.3 Annual Report of WMECO.
13.4 Annual Report of PSNH.
13.5 Annual Report of NAEC.
21 Subsidiaries of the Registrant (Exhibit 22, 1992 NU Form 10-K, File 1-5324)
CERTIFICATE RESTATING
CERTIFICATE OF INCORPORATION OF
THE CONNECTICUT LIGHT AND POWER COMPANY
BY ACTION OF THE BOARD OF DIRECTORS
Pursuant to CONN. GEN. STAT. Section 33-362 (1993), the following document entitled "Restated Certificate of Incorporation of The Connecticut Light and Power Company", which integrates into one document the certificate of incorporation of The Connecticut Light and Power Company, restates but does not change the provisions of the original certificate of incorporation as supplemented and amended and there is no discrepancy between such provisions and the provisions of the restated certificate of incorporation.
The Restated Certificate of Incorporation of The Connecticut Light and Power Company shall be executed by the Company and be filed in accordance with the provisions of CONN. GEN. STAT. Section 33-285 (1993).
RESTATED CERTIFICATE OF INCORPORATION OF
THE CONNECTICUT LIGHT AND POWER COMPANY
ARTICLE I
NAME OF CORPORATION
The name of this company shall be THE CONNECTICUT LIGHT AND POWER
COMPANY.
ARTICLE II
PRINCIPAL PLACE OF BUSINESS
The principal place of business of the Company shall be located at 107 Selden Street, Berlin, Connecticut.
ARTICLE III
NATURE OF BUSINESS
The nature of the business to be transacted by the Company shall be that of an electric company and any other business permitted to a corporation formed under the Stock Corporation Act of the State of Connecticut, as amended from time to time, and the Company may engage in any lawful act or activity for which corporations may be formed under the Stock Corporation Act of the State of Connecticut, as amended from time to time. The Company shall have all of the powers granted to stock corporations under the Stock Corporation Act of the State of Connecticut, as amended from time to time. In addition, the Company shall have all of the powers, rights and franchises granted to Connecticut public service companies or electric companies generally, or specially granted to the Company or its predecessor companies, by the provisions of the General Statutes or Special Acts of Connecticut, including, without limitation, the powers, rights and franchises, whether of a public or private nature, and the special rights, privileges and immunities, to engage in any business and to carry on its business in any area granted to the Company or its predecessor companies by the provisions of the Connecticut Special Acts listed in Exhibit A to this Restated Certificate of Incorporation, and the Company shall continue to be entitled to such franchises and special rights, privileges and immunities without reciting such provisions in this Restated Certificate of Incorporation.
ARTICLE IV
CAPITAL STOCK
PART I
AMOUNT AND CLASSES OF AUTHORIZED STOCK
The capital stock of the Company shall consist of three classes designated, respectively, "Preferred Stock," "Class A Preferred Stock" and "Common Stock." The authorized number of shares of Preferred Stock is 9,000,000 shares of the par value of $50 per share. The authorized number of shares of Class A Preferred Stock is 8,000,000 shares of the par value of $25 per share. The authorized number of shares of Common Stock is 24,500,000 shares of the par value of $10 per share.
The Preferred Stock and the Class A Preferred Stock are hereinafter for convenience of reference sometimes collectively referred to as the "Senior Stock," and either class may hereinafter individually be referred to as "Senior Stock." Shares of Preferred Stock and shares of Class A Preferred Stock shall rank on a parity in respect of dividends or payment in case of liquidation, and, to the extent not fixed and determined by these Sections or otherwise required by law, shall have the same rights, preferences and powers.
PART TWO
PROVISIONS WITH RESPECT TO THE CLASSES OF SENIOR STOCK
Shares of the class of Preferred Stock and shares of the class of Class A Preferred Stock shall be issued in accordance with, and the general terms, limitations and relative rights and preferences of each share of either said class shall be as set out in, the following Sections:
SECTION I ISSUANCE OF SENIOR STOCK
Shares of Preferred Stock may be issued from time to time in one or more series, in such amounts, on such terms and for such consideration as may be determined by the Board of Directors. Shares of Class A Preferred Stock may be issued from time to time in one or more series, in such amounts, on such terms and for such consideration as may be determined by the Board of Directors. To the extent not fixed and determined by these Sections, the series designation, dividend rate, redemption prices, and sinking funds, conversion, participation and other special rights, if any, of each series of either class of Senior Stock shall be determined by the Board of Directors at the time of its vote to issue such class and series.
SECTION II DIVIDENDS
Section 1. The holders of any series of either class of the Senior Stock shall receive, when declared by the Board of Directors, preferential dividends at such rate and payable on such dividend payment dates in each year as said Board may determine at the time of its vote to issue said class and series, such dividends to be payable to Senior Stockholders of record on such dates as may be fixed by said Board, but not more than 45 days before each dividend date, provided, however, that dividends shall not be declared and set apart for payment, or paid, on Senior Stock of any one class and series, for any dividend period, unless dividends have been or are contemporaneously declared and set apart for payment, or paid, on the Senior Stock of all series for all dividend periods terminating on the same or an earlier date.
Section 2. Dividends on each share of the Senior Stock shall be cumulative from the date of issue thereof or from such earlier date as the Board of Directors may determine at the time of its vote to issue such share.
Section 3. Unless full cumulative dividends to the last preceding dividend date shall have been paid or set apart for payment on all outstanding shares of Senior Stock no dividend shall be paid on any junior stock. The term "junior stock" as used in these Sections means Common Stock and any other stock of the Company subordinate to the Senior Stock in respect of dividends or payment in case of liquidation.
Section 4. So long as any shares of Senior Stock are outstanding, the Company shall not declare any dividends or make any other distributions in respect of outstanding shares of any junior stock of the Company, other than dividends or distributions in shares of junior stock, or purchase or otherwise acquire for value any outstanding shares of junior stock (the declaration of any such dividend or the making of any such distribution, purchase or acquisition being herein called a "junior stock payment") in contravention of the following:
(a) If and so long as the junior stock equity (hereinafter defined), adjusted to reflect the proposed junior stock payment, at the end of the calendar month immediately preceding the calendar month in which the proposed junior stock payment is to be made is less than 20% of total capitalization (hereinafter defined) at that date, the Company shall not make such junior stock payment in an amount which, together with all other junior stock payments made within the year ending with and including the date on which the proposed junior stock payment is to be made, exceeds 50% of the net income of the Company available for dividends on junior stock for the 12 full calendar months immediately preceding the calendar month in which such junior stock payment is made, except in an amount not exceeding the aggregate of junior stock payments which under the restrictions set forth above in this subsection (a) could have been, and have not been, made.
(b) If and so long as the junior stock equity, adjusted to reflect the proposed junior stock payment, at the end of the calendar month immediately preceding the calendar month in which the proposed junior stock payment is to be made is less than 25% but not less than 20% of the total capitalization at that date, the Company shall not make such junior stock payment in an amount which, together with all other junior stock payments made within the year ending with and including the date on which the proposed junior stock payment is to be made, exceeds 75% of the net income of the Company available for dividends on the junior stock for the 12 full calendar months immediately preceding the calendar month in which such junior stock payment is made, except in an amount not exceeding the aggregate of junior stock payments which under the restrictions set forth above in this subsection (b) could have been, and have not been, made.
Section 5. The term "junior stock equity" as used in these Sections means the aggregate of the par value of, or stated capital represented by, the outstanding shares of junior stock, all earned surplus, capital or paid-in surplus, and any premiums on the junior stock then carried on the books of the Company, less:
(a) the excess, if any, of the aggregate amount payable on
involuntary liquidation of the Company upon all outstanding shares of the Senior
Stock over the sum of (i) the aggregate par or stated value of such shares and
(ii) any premiums thereon;
(b) any amounts on the books of the Company known, or estimated if known, to represent the excess, if any, of recorded value over original cost of used or useful utility plant; and
(c) any intangible items set forth on the asset side of the balance sheet of the Company as a result of accounting convention, such as unamortized debt discount and expense, provided, however, that no deductions shall be required to be made in respect of items referred to in subsections (b) and (c) of this Section 5 in cases in which such items are being amortized or are provided for, or are being provided for, by reserves.
Section 6. The term "total capitalization" as used in these Sections means the aggregate of:
(a) the principal amount of all outstanding indebtedness of the Company maturing more than 12 months after the date of issue thereof, and
(b) the par value or stated capital represented by, and any premiums carried on the books of the Company in respect of, the outstanding shares of all classes of the capital stock of the Company, earned surplus, and capital or paid-in surplus, less any amounts required to be deducted pursuant to subsections (b) and (c) of Section 5 of this Section II in the determination of junior stock equity.
SECTION III REDEMPTION OR PURCHASE OF SENIOR STOCK
Section 1. All or any part of any series of the Senior Stock at any time outstanding may be called by vote of the Board of Directors for redemption at any time and in the manner hereinbelow provided. If less than all of any series of the Senior Stock is so called, the Transfer Agent shall determine by lot, or in some other proper manner approved by the Board of Directors, the shares of such series of Senior Stock to be called. The redemption prices with respect to any series of the Senior Stock shall be determined by the Board of Directors at the time of its vote to issue said series.
Section 2. No call for redemption of less than all of the Senior Stock outstanding shall be made if the Company shall be in arrears with respect to payment of dividends on any shares of the Senior Stock outstanding.
Section 3. Subject to the provisions of Section 2 of this Section III, all or any part of any series of the Senior Stock may be called for redemption without calling any part or all of any other series of the Senior Stock.
Section 4. The sums payable in respect of any Senior Stock so called shall be payable at the office of an incorporated bank or trust company in good standing. Notice of such call, stating the redemption date and the place where the stock so called is payable shall be mailed not less than 30 days before the redemption date to each holder of stock so called at his address as it appears upon the books of the Company.
Section 5. The Company shall, before the redemption date, deposit with said bank or trust company all sums payable with respect to the Senior Stock so called. After such mailing and deposit the holders of the Senior Stock so called for redemption shall cease to have any right to future dividends or other rights or privileges as stockholders in respect of such stock and shall be entitled only to the payment on the redemption date of the sums so deposited with said bank or trust company for their respective accounts. Stock so redeemed may be reissued but only subject to the limitations imposed by these Sections upon the issue of Senior Stock.
Section 6. The Company may at any time purchase all or any of the then
outstanding shares of the Senior Stock of any class and series upon the best
terms reasonably obtainable, but not exceeding the then current redemption price
of such shares, except that no such purchase shall be made if the Company shall
be in arrears with respect to payment of dividends on any shares of the Senior
Stock outstanding or if there shall exist an event of default as defined in
Section V hereof.
SECTION IV AMOUNTS PAYABLE ON LIQUIDATION
The holders of any series of the Senior Stock shall receive upon any voluntary liquidation, dissolution or winding up of the Company the then current redemption price of such series and, if such action is involuntary, $50 per share in the case of the Preferred Stock and $25 per share in the case of the Class A Preferred Stock, plus in each case all dividends accrued and unpaid to the date of such payment, before any payment in liquidation is made on any junior stock. If the net assets of the Company shall be insufficient to pay said amounts in full, then the entire net assets of the Company shall be distributed among the holders of the Senior Stock, who shall receive a common percentage of the full respective preferential amounts.
SECTION V VOTING POWERS
Section 1. Except as provided in these Sections and as provided by law, the holders of the Senior Stock shall have no voting power or right to notice of any meeting.
Section 2. Whenever the holders of the Senior Stock shall have the right to vote or consent to an action as provided in these Sections or as provided by law, both classes of Senior Stock shall (except as provided below) vote together as a single class, each outstanding share of Preferred Stock entitled to vote and each outstanding share of Class A Preferred Stock entitled to vote having such voting rights as are proportionate to the ratio of (i) the par value represented by such share to (ii) the par value represented by all shares of Senior Stock then outstanding. Whenever only one class of the Senior Stock shall have the right to vote or consent to an action as provided in these Sections or as provided by law, or whenever each class of the Senior Stock shall be entitled or be required to vote as a separate class on a matter, each outstanding share of such class entitled to vote shall be entitled to one vote on each such matter.
Section 3. Whenever dividends on any share of the Senior Stock shall be in arrears in an amount equal to or exceeding full dividends for one year thereon, or whenever there shall have occurred some default in the observance of any of the provisions of these Sections, or some default on which action has been taken by the bondholders or the trustees of any indenture of mortgage or deed of trust of the Company, or whenever the Company shall have been declared bankrupt or a receiver of its property shall have been appointed (said conditions being herein called "events of default"), then the holders of the Senior Stock shall be given notice of all stockholders' meetings and shall have the right voting together as a class to elect the smallest number of directors necessary to constitute a majority of the Board of Directors of the Company and the exclusive right voting together as a class to amend the By-Laws to make such appropriate increase in the number of directorships as may be required to effect such election. When all such arrears of dividends shall have been paid and such event of default shall have terminated, all the rights and powers of the holders of the Senior Stock to receive notice and to vote shall cease, subject to being again revived on any subsequent event of default.
Section 4. Whenever the right to elect directors shall have accrued to the holders of the Senior Stock, the Company shall call a meeting for the election of directors and, if necessary, the amendment of the By-Laws to permit the holders of the Senior Stock to exercise their rights pursuant to Section 3 of this Section V, such meeting to be held not less than 45 days and not more than 90 days after the accrual of such rights. When such rights shall cease, the Company shall, within seven days from the delivery to the Company of a written request therefor by any stockholder, cause a meeting of the stockholders to be held within 30 days from the delivery of such request for the purpose of electing a new Board of Directors. Forthwith, upon the election of such new Board of Directors, the directors in office immediately prior to such election (other than persons elected directors in such election) shall be deemed removed from office without further action by the Company.
SECTION VI
ACTION REQUIRING CERTAIN CONSENT OF
SENIOR STOCKHOLDERS
Section 1. Except with the consent of the holders of at least two-thirds
(2/3) of the Senior Stock at the time outstanding, or at least two-thirds (2/3)
of the class of Senior Stock affected if only one such class is affected, given
in writing or by vote at a meeting duly called and held for the purpose, the
Company shall not authorize or issue any class of capital stock having a
priority over the Senior Stock in respect of the payment of dividends or
payments in case of liquidation, dissolution or winding up of the Company or
issue any shares of any such prior ranking stock more than 12 months after the
date of such authorization.
Section 2. Except with the consent of the holders of at least two-thirds
(2/3) of the Senior Stock at the time outstanding, or at least two-thirds (2/3)
of the class of Senior Stock affected if only one such class is affected, given
in writing or by vote at a meeting duly called and held for the purpose, the
Company shall not amend, alter, or repeal any of the rights, preferences or
powers of the holders of the Senior Stock or either class of the Senior Stock
so as to affect adversely any such rights, preferences or powers; provided,
however, that no reduction of the dividend rate, the redemption prices, or the
amount to be paid on liquidation with respect to any share of the Senior Stock
or either class of the Senior Stock may be made without the consent of the
holder thereof and no such reduction with respect to the shares of any
particular series of the Senior Stock shall be made without the consent of all
the holders of shares of such series.
Section 3. So long as any of the Senior Stock is outstanding neither the authorized total number of shares nor the authorized aggregate of stated value or par value of the Senior Stock and stock ranking on a parity with the Senior Stock in respect of the payment of dividends or payments in case of liquidation, dissolution or winding up of the Company shall be increased beyond 9,000,000 shares of Preferred Stock, 8,000,000 shares of Class A Preferred Stock, $450,000,000 aggregate of stated value or par value of Preferred Stock and $200,000,000 aggregate of stated value or par value of Class A Preferred Stock, unless such increase is approved, at a stockholders' meeting duly called and held, by the affirmative vote of the holders of at least two-thirds (2/3) of the Senior Stock, or at least two-thirds (2/3) of the class of Senior Stock affected if only one such class is affected, represented in person or by proxy at said meeting or of such larger number of shares as the then applicable statutes of the State of Connecticut may require for such purpose.
Section 4. Except with the consent of the holders of a majority of the Senior Stock at the time outstanding, given in writing or by vote at a meeting duly called and held for the purpose, the Company shall not:
1. Issue or assume any unsecured notes, unsecured debentures or other securities representing unsecured debt (other than for the purpose of refunding or renewing outstanding unsecured securities issued or assumed by the Company resulting in equal or longer maturities or redeeming or otherwise retiring all outstanding shares of the Senior Stock) if immediately after such issue or assumption (a) the total outstanding principal amount of all unsecured notes, unsecured debentures or other securities representing unsecured debt of the Company will thereby exceed 20% of the aggregate of all outstanding secured debt of the Company and the capital stock, premiums thereon, and surplus of the Company, as stated on its books, or (b) the total outstanding principal amount of all unsecured notes, unsecured debentures or other securities representing unsecured debt of the Company of maturities of less than 10 years will thereby exceed 10% of the aggregate of all outstanding secured debt of the Company and the capital stock, premiums thereon, and surplus of the Company, as stated on its books. For the purposes of this subsection (1), the payment due upon the maturity of unsecured debt having an original single stated maturity of 10 years or more shall not be regarded as unsecured debt with a maturity of less than 10 years until within three years of the maturity thereof, and none of the payments due upon any unsecured serial debt having an original stated maturity for the final serial payment of 10 years or more shall be regarded as unsecured debt of a maturity of less than 10 years until within three years of the maturity of the final serial payment.
2. Issue, sell or otherwise dispose of any shares of the then authorized but unissued Senior Stock or any other stock ranking on a parity with or having a priority over the Senior Stock in respect of dividends or payment in case of liquidation, or reissue, sell or otherwise dispose of any reacquired shares of Senior Stock or such other stock, other than to refinance an equal par value or stated value of Senior Stock or of stock ranking on a parity with the Senior Stock in respect of dividends or payment in case of liquidation,
(i) if, for a period of 12 consecutive calendar months within 15 calendar months immediately preceding the calendar month in which any such shares shall be issued, the Income before Interest Charges of the Company for said period available for the payment of interest, determined in accordance with the systems of accounts then prescribed for the Company by the Department of Public Utility Control of the State of Connecticut (or by such other official body as may then have authority to prescribe such systems of accounts), but in any event after deducting taxes including taxes based on income and the amount charged by the Company on its books to depreciation expense, (including, in any case in which such stock is to be issued, sold or otherwise disposed of in connection with the acquisition of any property, the Income before Interest Charges of the property to be so acquired, computed as nearly as practicable in the manner specified above) shall not have been at least one and one-half (1 1/2) times the sum of (a) the interest charges for one year on all indebtedness which shall then be outstanding (including any indebtedness proposed to be created in connection with the issue, sale or other disposition of such shares, but not including any indebtedness proposed to be retired in connection with such issue, sale or other disposition or indebtedness held by or for the account of the Company) and (b) such rental charges as shall not be deducted in such determination of Income before Interest Charges and (c) an amount equal to all annual dividend requirements on all outstanding shares of the Senior Stock and all other stock, if any, ranking on a parity with or having priority over the Senior Stock as to dividends or payment in case of liquidation, including the shares proposed to be issued, but not including any shares proposed to be retired in connection with such issue, sale or other disposition; or
(ii) if such issue, sale or disposition would bring the aggregate of the amount payable in connection with an involuntary liquidation of the Company with respect to all shares of the Senior Stock and all shares of stock, if any, ranking on a parity with or having priority over the Senior Stock as to dividends or payment in case of liquidation to an amount in excess of the sum of the junior stock equity. If for the purposes of meeting the requirements of this clause (ii), it shall have been necessary to take into consideration any earned surplus of the Company, the Company shall not thereafter pay any dividends on or make any distributions in respect of, or make any payment for the purchase or other acquisition of junior stock which would result in reducing the junior stock equity to an amount less than the amount payable on involuntary liquidation of the Company with respect to the Senior Stock and all shares ranking on a parity with or having a priority over the Senior Stock in respect of dividends or payment in case of liquidation at the time outstanding.
If during the period for which Income before Interest Charges is to be determined for the purpose set forth in this subsection (2), the amount, if any, required to be expended by the Company during such period for property additions pursuant to a renewal and replacement fund or similar fund established under any indenture of mortgage or deed of trust of the Company shall exceed the amount deducted during such period in the determination of such Income before Interest Charges on account of depreciation and amortization of electric and gas plant acquisition adjustments, such excess shall also be deducted in determining such Income before Interest Charges.
If, pursuant to this Section 4, holders of one-third (1/3) of the aggregate voting rights represented by the shares of the Senior Stock then outstanding dissent in writing from or vote against any proposed action, action shall not be taken unless subsequently authorized in compliance with all provisions of this Section 4, including this sentence.
Section 5. No share of Senior Stock shall be deemed to be "outstanding" within the meaning of this Section VI or of Section VII if, at or prior to the time when the consent or approval herein or therein referred to would otherwise be required, provision shall be made for its redemption, including a deposit complying with the requirements of Section 5 of Section III.
SECTION VII MERGER, CONSOLIDATION OR SALE OF ALL ASSETS
Except with the consent of the holders of a majority of the Senior Stock at the time outstanding, given in writing or by vote at a meeting duly called and held for the purpose, the Company shall not merge or consolidate with or into any other corporation or sell or otherwise dispose of all or substantially all of its assets (except by mortgage or pledge) unless such merger, consolidation, sale or other disposition, or the issuance or assumption of securities in the effectuation thereof shall have been ordered, approved or permitted under the Public Utility Holding Company Act of 1935.
SECTION VIII NO PREEMPTIVE RIGHT
The holders of the Senior Stock shall have no preemptive right to subscribe to any future issue of additional shares of the Senior Stock or of any other preferred stock or any other class of stock now or hereafter authorized, nor for any future issue of bonds, notes or other evidence of indebtedness convertible into stock.
SECTION IX
IMMUNITY OF DIRECTORS
OFFICERS AND AGENTS
No director, officer or agent of the Company shall be held personally responsible for any action taken in good faith though subsequently adjudged to be in violation of these Sections.
SECTION X TRANSFER AGENT
The Company shall always have at least one Transfer Agent for the Senior Stock, which shall be an incorporated bank or trust company of good standing.
PART THREE
PROVISIONS WITH RESPECT TO THE SERIES OF PREFERRED STOCK
SECTION I
There shall be a series of Preferred Stock designated "$2.00 Preferred Stock" and consisting of 336,088 shares with an aggregate par value of $16,804,000 and a par value per share of $50.00. The dividend rate, redemption prices and amounts payable on liquidation, dissolution or winding up of the Company as to said $2.00 Preferred Stock shall be as follows:
(a) Dividends on said $2.00 Preferred Stock shall be at the rate of $2.00 per share per annum, and no more, and shall be cumulative from May 1, 1947. Said dividends, when declared, shall be payable on the first days of February, May, August and November in each year.
(b) Redemption Prices of said $2.00 Preferred Stock shall be $55.50 per share if redeemed on or before May 1, 1952, $54.50 per share if redeemed after May 1, 1952 and on or before May 1, 1957, and $54.00 per share if redeemed after May 1, 1957, plus in all cases that portion of the quarterly dividend accrued thereon to the redemption date and all unpaid dividends thereon, if any.
(c) Amounts Payable on Liquidation to each holder of said $2.00 Preferred Stock upon any voluntary liquidation, dissolution or winding up of the Company shall be the then current redemption price thereof and, if such action is involuntary, $50.00 per share, plus in each case all dividends accrued and unpaid to date of such payment.
SECTION II
There shall be a series of Preferred Stock designated "$1.90 Preferred Stock" and consisting of 163,912 shares with an aggregate par value of $8,195,600 and a par value per share of $50.00. The dividend rate, redemption prices and amounts payable on liquidation, dissolution or winding up of the Company as to said $1.90 Preferred Stock shall be as follows:
(a) Dividends on said $1.90 Preferred Stock shall be at the rate of $1.90 per share per annum, and no more, and shall be cumulative from May 1, 1947. Said dividends, when declared, shall be payable on the first days of February, May, August and November in each year.
(b) Redemption Prices of said $1.90 Preferred Stock shall be $54.00 per share if redeemed on or before May 1, 1952, $53.00 per share if redeemed after May 1, 1952 and on or before May 1, 1957, and $52.50 per share if redeemed after May 1, 1957, plus in all cases that portion of the quarterly dividend accrued thereon to the redemption date and all unpaid dividends thereon, if any.
(c) Amounts Payable on Liquidation to each holder of said $1.90 Preferred Stock upon any voluntary liquidation, dissolution or winding up of the Company shall be the then current redemption price thereof and, if such action is involuntary, $50.00 per share, plus in each case all dividends accrued and unpaid to date of such payment.
SECTION III
There shall be a series of Preferred Stock designated "$2.20 Preferred Stock" and consisting of 200,000 shares with an aggregate par value of $10,000,000 and a par value per share of $50.00. The dividend rate, redemption prices and amounts payable on liquidation, dissolution or winding up of the Company as to said $2.20 Preferred Stock shall be as follows:
(a) Dividends on said $2.20 Preferred Stock, shall be at the rate of $2.20 per share per annum, and no more, and shall be cumulative from May 1, 1949. Said dividends, when declared, shall be payable on the first days of February, May, August and November in each year.
(b) Redemption Prices of said $2.20 Preferred Stock shall be $54.00 per share if redeemed on or before May 1, 1954, $53.00 per share if redeemed after May 1, 1954 and on or before May 1, 1959, and $52.50 per share if redeemed after May 1, 1959, plus in all cases that portion of the quarterly dividend accrued thereon to the redemption date and all unpaid dividends thereon, if any.
(c) Amounts Payable on Liquidation to each holder of said $2.20 Preferred Stock upon any voluntary liquidation, dissolution or winding up of the Company shall be the then current redemption price thereof and, if such action is involuntary, $50.00 per share, plus in each case all dividends accrued and unpaid to date of such payment.
SECTION IV
There shall be a series of Preferred Stock designated "$2.04 Preferred Stock" and consisting of 100,000 shares with an aggregate par value of $5,000,000 and a par value per share of $50.00. The dividend rate, redemption prices and amounts payable on liquidation, dissolution or winding up of the Company as to said $2.04 Preferred Stock shall be as follows:
(a) Dividends on said $2.04 Preferred Stock shall be at the rate of $2.04 per share per annum, and no more, and shall be cumulative from November 1, 1949. Said dividends, when declared, shall be payable on the first days of February, May, August and November in each year.
(b) Redemption Prices of said $2.04 Preferred Stock shall be $54.50 per share if redeemed on or before November 1, 1954, $52.50 per share if redeemed after November 1, 1954 and on or before November 1, 1959, and $52.00 per share if redeemed after November 1, 1959, plus in all cases that portion of the quarterly dividend accrued thereon to the redemption date and all unpaid dividends thereon, if any.
(c) Amounts Payable on Liquidation to each holder of said $2.04 Preferred Stock upon any voluntary liquidation, dissolution or winding up of the Company shall be the then current redemption price thereof and, if such action is involuntary, $50.00 per share, plus in each case all dividends accrued and unpaid to date of such payment.
SECTION V
There shall be a series of Preferred Stock designated "$2.06 Preferred Stock-Series E" and consisting of 200,000 shares with an aggregate par value of $10,000,000 and a par value per share of $50.00. The dividend rate redemption prices and amounts payable on liquidation, dissolution or winding up of the Company as to said $2.06 Preferred Stock-Series E shall be as follows:
(a) Dividends on said $2.06 Preferred Stock-Series E shall be the rate of $2.06 per share per annum, and no more, and shall be cumulative from May 1, 1954. Said dividends, when declared, shall be payable on the first days of February, May, August and November in each year.
(b) Redemption Prices of said $2.06 Preferred Stock-Series E shall be $52.00 per share if redeemed on or before May 1, 1959, $51.50 per share if redeemed after May 1, 1959 and on or before May 1, 1964, and $51.00 per share if redeemed after May 1, 1964, plus in all cases that portion of the quarterly dividend accrued thereon to the redemption date and all unpaid dividends thereon, if any.
(c) Amounts Payable on Liquidation to each holder of said $2.06 Preferred Stock-Series E upon any voluntary liquidation, dissolution or winding up of the Company shall be the then current redemption price thereof and, if such action is involuntary, $50.00 per share, plus in each case all dividends accrued and unpaid to date of such payment.
SECTION VI
There shall be a series of Preferred Stock designated "$2.09 Preferred Stock-Series F" and consisting of 100,000 shares with an aggregate par value of $5,000,000 and a par value per share of $50.00. The dividend rate, redemption prices and amounts payable on liquidation, dissolution or winding up of the Company as to said $2.09 Preferred Stock-Series F shall be as follows:
(a) Dividends on said $2.09 Preferred Stock-Series F shall be at the rate of $2.09 per share per annum, and no more, and shall be cumulative from November 1, 1955. Said dividends, when declared, shall be payable on the first days of February, May, August and November in each year.
(b) Redemption Prices of said $2.09 Preferred Stock-Series F shall be $52.00 per share if redeemed on or before November 1, 1960, $51.50 per share if redeemed after November 1, 1960 and on or before November 1, 1965, and $51.00 per share if redeemed after November 1, 1965, plus in all cases that portion of the quarterly dividend accrued thereon to the redemption date and all unpaid dividends thereon, if any.
(c) Amounts Payable on Liquidation to each holder of said $2.09 Preferred Stock-Series F upon any voluntary liquidation, dissolution or winding up of the Company shall be the then current redemption price thereof and, if such action is involuntary, $50.00 per share, plus in each case all dividends accrued and unpaid to date of such payment.
SECTION VII
There shall be a series of Preferred Stock designated "$3.24 Preferred Stock-Series G" and consisting of 300,000 shares with an aggregate par value of $15,000,000 and a par value per share of $50.00. The dividend rate and redemption prices of said $3.24 Preferred Stock-Series G shall be as follows:
(a) Dividends on said $3.24 Preferred Stock-Series G shall be at the rate of $3.24 per share per annum, and no more, and shall be cumulative from January 1, 1968. Said dividends, when declared, shall be payable on the first days of January, April, July and October in each year.
(b) Redemption Prices of said $3.24 Preferred Stock-Series G shall be $54.27 per share if redeemed on or before January 1, 1973, $53.46 per share if redeemed after January 1, 1973 and on or before January 1, 1978, $52.65 per share if redeemed after January 1, 1978 and on or before January 1, 1983 and $51.84 per share if redeemed after January 1, 1983, plus in all cases that portion of the quarterly dividend accrued thereon to the redemption date and all unpaid dividends thereon, if any.
SECTION VIII
There shall be a series of Preferred Stock designated "3.90% Preferred Stock" and consisting of 160,000 shares with an aggregate par value of $8,000,000 and a par value per share of $50.00. The dividend rate and redemption prices of said series of Preferred Stock shall be as follows:
(a) Dividends on said 3.90% Preferred Stock shall be at the rate of 3.90% per share per annum and no more, and shall be cumulative from September 1, 1949. Said dividends, when declared, shall be payable on the first days of March, June, September and December in each year.
(b) Redemption Prices of said 3.90% Preferred Stock shall be $50.50 per share, plus that portion of the quarterly dividend accrued thereon up to the redemption date and all unpaid dividends thereon, if any.
SECTION IX
There shall be a series of Preferred Stock designated "4.50% Preferred Stock" and consisting of 104,000 shares with an aggregate par value of $5,200,000 and a par value per share of $50.00. The dividend rate and redemption prices of said series of Preferred Stock shall be as follows:
(a) Dividends on said 4.50% Preferred Stock shall be at the rate of 4.50% per share per annum and no more and shall be cumulative from November 1, 1957. Said dividends, when declared, shall be payable on the first days of February, May, August and November in each year.
(b) Redemption Prices of said 4.50% Preferred Stock shall be $50.75 per share, plus that portion of the quarterly dividend accrued thereon up to the redemption date and all unpaid dividends thereon, if any.
SECTION X
There shall be a series of Preferred Stock designated "4.96% Preferred Stock" and consisting of 100,000 shares with an aggregate par value of $5,000,000 and a par value per share of $50.00. The dividend rate and redemption prices of said series of Preferred Stock shall be as follows:
(a) Dividends on said 4.96% Preferred Stock shall be at the rate of 4.96% per share per annum and no more, and shall be cumulative from November 6, 1958. Said dividends, when declared, shall be payable on the first days of February, May, August and November in each year.
(b) Redemption Prices of said 4.96% Preferred Stock shall be $50.50 per share, plus that portion of the quarterly dividend accrued thereon up to the redemption date and all unpaid dividends thereon, if any.
SECTION XI
There shall be a series of Preferred Stock designated "4.50% Preferred Stock, 1963 Series" and consisting of 160,000 shares with an aggregate par value of $8,000,000 and a par value per share of $50.00. The dividend rate and redemption prices of said series of Preferred Stock shall be as follows:
(a) Dividends on said 4.50% Preferred Stock, 1963 Series, shall be at the rate of 4.50% of the par value per share per annum and no more, and shall be cumulative from the date of issue thereof. Said dividends, when declared, shall be payable on the first days of March, June, September and December in each year.
(b) Redemption prices of said 4.50% Preferred Stock, 1963 Series, shall be $50.50 per share, plus that portion of the quarterly dividend accrued thereon up to the redemption date and all unpaid dividends thereon, if any.
SECTION XII
There shall be a series of Preferred Stock designated "5.28% Preferred Stock, 1967 Series" and consisting of 200,000 shares with an aggregate par value of $10,000,000 and a par value per share of $50.00. The dividend rate and redemption prices of said series of Preferred Stock shall be as follows:
(a) Dividends on said 5.28% Preferred Stock, 1967 Series, shall be at the rate of 5.28% of the par value per share per annum and no more, and shall be cumulative from April 1, 1967. Said dividends, when declared, shall be payable on the first days of January, April, July and October in each year.
(b) Redemption Prices of said 5.28% Preferred Stock, 1967 Series shall be $52.09 per share if redeemed on or before April 1, 1982, and $51.43 per share if redeemed after April 1, 1982, plus in all cases that portion of the quarterly dividend accrued thereon up to the redemption date and all unpaid dividends thereon, if any.
SECTION XIII
There shall be a series of Preferred Stock designated "6.56% Preferred Stock, 1968 Series" and consisting of 200,000 shares with an aggregate par value of $10,000,000 and a par value per share of $50.00. The dividend rate and redemption prices of said Preferred Stock shall be as follows:
(a) Dividends of said 6.56% Preferred Stock, 1968 Series, shall be at the rate of 6.56% of the par value per share per annum and no more, and shall be cumulative from February 1, 1968. Said dividends, when declared, shall be payable on the first days of February, May, August and November in each year.
(b) Redemption Prices of said 6.56% Preferred Stock, 1968 Series, shall be $52.26 per share if redeemed on or before February 1, 1983, and $51.44 per share if redeemed after February 1, 1983, plus in all cases that portion of the quarterly dividend accrued thereon up to the redemption date and all unpaid dividends thereon, if any.
SECTION XIV
There shall be a series of Preferred Stock designated 7.23% Preferred Stock, 1992 Series, and consisting of 1,500,000 shares with an aggregate par value of $75,000,000 and a par value per share of $50. The dividend rate and redemption prices as to said 7.23% Preferred Stock, 1992 Series, shall be as follows:
(a) Dividends on said 7.23% Preferred Stock, 1992 Series, shall be at the rate of 7.23% per annum per share, and no more, and shall be cumulative from the date of issuance. Said dividends, when declared, shall be payable on the first day of March, June, September, and December in each year, commencing December 1, 1992.
(b) The redemption prices of the 7.23% Preferred Stock, 1992 Series, shall be as follows:
(i) if redeemed through operation of the sinking fund hereinafter provided, or upon any voluntary liquidation, dissolution or winding up of the Company before September 1, 1997, at the price of $50.00 per share,
(ii) if redeemed otherwise than through operation of the sinking fund, for each of the twelve-month periods commencing September 1, 1997, the redemption prices of said 7.23% Preferred Stock, 1992 Series, shall be the amount per share set forth below:
Twelve Twelve Months Redemption Months Redemption Beginning Price Beginning Price September 1 Per Share September 1 Per Share ----------- ---------- ----------- ---------- 1997 $52.41 2007 $50.00 1998 52.17 2008 50.00 1999 51.93 2009 50.00 2000 51.69 2010 50.00 2001 51.45 2011 50.00 2002 51.21 2012 50.00 2003 50.97 2013 50.00 2004 50.73 2014 50.00 2005 50.49 2015 50.00 2006 50.25 2016 50.00 |
plus in all cases that portion of the quarterly dividend accrued thereon to the redemption date and all unpaid dividends thereon, if any, provided, however, that none of the 7.23% Preferred Stock, 1992 Series, shall be redeemed prior to September 1, 1997.
(c) As and for a sinking fund for said 7.23% Preferred Stock, 1992
Series, commencing on September 1, 1998, and on each September 1 in each
year thereafter so long as any shares of the 7.23% Preferred Stock, 1992
Series, remain outstanding, the Company shall, to the extent of any funds
of the Company legally available therefor and except as otherwise
restricted by the Company's Amended and Restated Provisions with Respect
to Capital Stock, redeem 75,000 shares of 7.23% Preferred Stock, 1992
Series (or such lesser number of such shares as remain outstanding) at the
sinking fund redemption price, plus accrued dividends to the date of
redemption; provided, however, that if in any year the Company does not
redeem the full number of shares of 7.23% Preferred Stock, 1992 Series,
required to be redeemed pursuant to this sinking fund, the deficiency
shall be made good on the next succeeding September 1 on which the
Company has funds legally available for, and is otherwise permitted to
effect, the redemption of shares of 7.23% Preferred Stock, 1992 Series,
pursuant to this sinking fund. At the option of the Company, the number
of shares purchased and canceled by the Company during the preceding
twelve-month period or redeemed during such period pursuant to clause
(ii) of subsection (b) hereof. Any shares so redeemed or purchased and
canceled may be given the status of authorized but unissued shares of
Senior Stock, but none of such shares shall be reissued as shares of 7.23%
Preferred Stock, 1992 Series. The Company shall have the option, which
shall be noncumulative, to redeem on September 1, 1998 and on each
September 1 thereafter up to an additional 75,000 shares of 7.23%
Preferred Stock, 1992 Series, at the sinking fund redemption price, plus
accrued dividends to the date of redemption. No such optional sinking
fund shall operate to reduce the number of shares of the 7.23% Preferred
Stock, 1992 Series, required to be redeemed pursuant to the mandatory
sinking fund provisions hereinabove set forth. If the Company shall at
any time fail to make a full mandatory sinking fund payment on any sinking
fund payment date, the Company shall not pay any dividends or make any
other distributions in respect of outstanding shares of any junior stock
(as that term is defined in Section II, Section 3 of Part Two hereof) of
the Company, other than dividends or distributions in shares of junior
stock, or purchase or otherwise acquire for value any outstanding shares
of junior stock, until all such payments have been made.
SECTION XV
There shall be a series of Preferred Stock designated 5.30% Preferred Stock, 1993 Series, and consisting of 1,600,000 shares with an aggregate par value of $80,000,000 and a par value per share of $50. The dividend rate and redemption prices as to said 5.30% Preferred Stock, 1993 Series, shall be as follows:
(a) Dividends on said 5.30% Preferred Stock, 1993 Series, shall be at the rate of 5.30% per annum per share, and no more, and shall be cumulative from the date of issuance. Said dividends, when declared, shall be payable on the first day of January, April, July and October in each year, commencing January, 1994.
(b) The redemption prices of the 5.30% Preferred Stock, 1993 Series, shall be as follows:
(i) if redeemed through operation of the sinking fund hereinafter provided, or upon any voluntary liquidation, dissolution or winding up of the Company before October 1, 1998, at the price of $50 per share,
(ii) if redeemed otherwise than through operation of the sinking fund, for each of the twelve-month periods commencing October 1, 1998, the redemption prices of said 5.30% Preferred Stock, 1993 Series, shall be the amount per share set forth below:
Twelve Months Redemption Beginning Price October 1 Per Share --------- ---------- 1998 $51.00 1999 50.67 2000 50.34 2001 50.00 2002 50.00 |
plus in all cases that portion of the quarterly dividend accrued thereon to the redemption date and all unpaid dividends thereon, if any, provided, however, that none of the 5.30% Preferred Stock, 1993 Series, shall be redeemed prior to October 1, 1998. The notice of redemption required by Part II, Section III, Section 4 hereof may state that it is subject to the receipt of redemption moneys by the paying agent before the date fixed for redemption and that such notice shall be of no effect unless such moneys are so received before such date.
(c) As and for a sinking fund for said 5.30% Preferred Stock, 1993 Series, commencing on October 1, 1999, and on each October 1 in each year thereafter so long as any shares of the 5.30% Preferred Stock, 1993 Series, remain outstanding, the Company shall, to the extent of any funds of the Company legally available therefor and except as otherwise restricted by the Company's Amended and Restated Provisions with Respect to Capital Stock, redeem 320,000 shares of 5.30% Preferred Stock, 1993 Series (or such lesser number of such shares as remain outstanding) at the sinking fund redemption price, plus accrued dividends to the date of redemption; provided, however, that if in any year the Company does not redeem the full number of shares of 5.30% Preferred Stock, 1993 Series, required to be redeemed pursuant to this sinking fund, the deficiency shall be made good on the next succeeding October 1 on which the Company has funds legally available for, and is otherwise permitted to effect, the redemption of shares of 5.30% Preferred Stock, 1993 Series, pursuant to this sinking fund. At the option of the Company, the number of shares of 5.30% Preferred Stock, 1993 Series, redeemed on any October 1 may be reduced by the number of such shares purchased and canceled by the Company during the preceding twelve-month period or redeemed during such period pursuant to clause (ii) of subsection (b) hereof. Any shares so redeemed or purchased and canceled may be given the status of authorized but unissued shares of Senior Stock, but none of such shares shall be reissued as shares of 5.30% Preferred Stock, 1993 Series. The Company shall have the option, which shall be noncumulative, to redeem on October 1, 1999 and on each October 1 thereafter up to an additional 320,000 shares of 5.30% Preferred Stock, 1993 Series, at the sinking fund redemption price, plus accrued dividends to the date of redemption. No such optional sinking fund shall operate to reduce the number of shares of the 5.30% Preferred Stock, 1993 Series, required to be redeemed pursuant to the mandatory sinking fund provisions hereinabove set forth. If the Company shall at any time fail to make a full mandatory sinking fund payment on any sinking fund payment date, the Company shall not pay any dividends or make any other distributions in respect of outstanding shares of any junior stock (as that term is defined in Section II, Section 3 of Part Two hereof) of the Company, other than dividends or distributions in shares of junior stock, or purchase or otherwise acquire for value any outstanding shares of junior stock, until all such payments have been made.
PART FOUR
PROVISIONS WITH RESPECT TO THE
SERIES OF CLASS A PREFERRED STOCK
SECTION I
There shall be a series of Class A Preferred Stock designated "Dutch Auction Rate Transferable Securities Class A Preferred Stock, 1989 Series" (the "1989 DARTS") consisting of 2,000,000 shares with an aggregate par value of $50,000,000 and a par value per share of $25. The provisions governing the issue and sale of the 1989 DARTS in Units, certification, dividend rights, redemption, reacquisition, auction procedures, and other preferences, qualifications and special or relative rights or privileges with respect to the 1989 DARTS shall be as follows:
(1) Units
The 1989 DARTS shall be issued and sold by the Company only in units of 4,000 shares per unit ("Units"). No partial Units shall be issued and sold by the Company, and no fractional shares of the 1989 DARTS shall be issued and sold, no transfer of the 1989 DARTS in less than whole Units shall be made, nor shall any transfer in less than whole Units be registered on the transfer books of the Company or be effective for any purpose.
(2) Certification
Except as otherwise provided by law, all outstanding 1989 DARTS shall be represented by a certificate or certificates registered in the name of a nominee of the Securities Depository (as defined in Section 6(a)(xxi) below), and no person acquiring Units shall be entitled to receive a certificate representing the 1989 DARTS. The nominee of the Securities Depository shall be the sole holder of record of the 1989 DARTS. Each purchaser of Units will receive dividends, distributions and notices according to the procedures of the Securities Depository and, if such purchaser is not a member of the Securities Depository, of such purchaser's Agent Member (as defined in Section (6)(a)(ii) below).
(3) Dividend Rights
(a) Dividends on the 1989 DARTS shall be paid, when, as and if declared by the Board of Directors of the Company out of funds legally available therefor, at the rate per annum determined as set forth below in subsection (c) of this Section (3) and no more (the "Applicable Rate"), payable on the respective dates set forth below.
(b) Dividends on the 1989 DARTS shall accrue from the date of original issuance and shall be payable commencing on March 15, 1989, and on each succeeding seventh Wednesday thereafter, except that if any of such Wednesday, the Tuesday preceding such Wednesday, or the Thursday following such Wednesday is not a Business Day (as defined below), then (i) the dividend payment date shall be the first Business Day after such Wednesday that is immediately followed by a Business Day and is preceded by a Business Day that is the preceding Tuesday or a day after such Tuesday, or (ii) if the Securities Depository shall make available to its participants and members, in funds immediately available in New York City on dividend payment dates, the amount due as dividends on such dividend payment dates (and the Securities Depository shall have so advised the Trust Company (as defined in Section (6)(a)(xxx) below)), then the dividend payment date shall be the first Business Day on or after such Wednesday that is preceded by a Business Day that is the preceding Tuesday or a day after such Tuesday. "Business Day" means a day on which the New York Stock Exchange is open for trading and which is not a day on which banks in New York City are authorized by law to close. Each dividend payment date determined as provided above is referred to herein as the "Dividend Payment Date." Although any particular Dividend Payment Date may not occur on the originally scheduled Wednesday because of the exceptions discussed above, the next succeeding Dividend Payment Date shall be, subject to such exceptions, the seventh Wednesday following the originally designated Wednesday Dividend Payment Date for the prior Dividend Period. As used herein, Dividend Period means the period commencing on a Dividend Payment Date for the 1989 DARTS and ending on the day next preceding the next Dividend Payment Date. Notwithstanding the foregoing, in the event of a change in law altering the minimum holding period (currently found in Section 246(c) of the Internal Revenue Code of 1986, as amended (the "Code")) required for taxpayers to be entitled to the dividends received deduction on preferred stock held by non-affiliated corporations (currently found in Section 243(a) of the Code), the Company shall adjust the period of time between Dividend Payment Dates so as to adjust uniformly the number of days (such number of days without giving effect to the exceptions referred to above being hereinafter referred to as "Dividend Period Days") in Dividend Periods commencing after the date of such change in law to equal or exceed the then current minimum holding period; provided that the number of Dividend Period Days shall not exceed by more than nine days the length of such then current minimum holding period and shall be evenly divisible by seven, and the maximum number of Dividend Period Days in no event shall exceed 98 days. Upon any such change in the number of Dividend Period Days as a result of a change in law, the Company shall give notice of such change to all Existing Holders of Units.
(c) The dividend rate on shares of the 1989 DARTS during the initial
dividend period (the "Initial Dividend Period"), from and after the date of
original issuance to March 15, 1989 (the "Initial Dividend Payment Date") shall
be 7.60 percent per annum. Commencing on the Initial Dividend Payment Date, the
dividend rate on shares of the 1989 DARTS for each subsequent Dividend Period
(normally a period of 49 days, subject to certain exceptions as set forth above)
shall be at a rate per annum that results from the implementation of the Auction
procedures set forth in Section (6) below.
The amount of dividends per Unit for the 1989 DARTS payable for each Dividend Period shall be computed by multiplying the dividend rate for such series for each Dividend Period determined in accordance with subsection (c) above by a fraction the numerator of which shall be the number of days in such Dividend Period (calculated by counting the first day thereof but excluding the last day thereof) such Unit was outstanding and the denominator of which shall be 360, and multiplying the amount so obtained by $100,000 per Unit.
(d) Prior to each Dividend Payment Date, the Company shall pay to the Trust Company sufficient funds for the payment of declared dividends.
(e) For the purpose of determining whether and when holders of the Senior Stock are entitled to the rights to elect certain directors of the Company, described under Part Two, Section V, Section 3 of the Capital Stock Provisions of this Certificate of Incorporation, dividends on the 1989 DARTS shall be deemed to be in arrears "in an amount equal to or exceeding four quarterly dividend payments," if, at the time dividends are in arrears for four quarterly dividend payments for Senior Stock having quarterly dividend payments, dividends on the 1989 DARTS are in arrears for each Dividend Period beginning on or after the first day of the first of the four quarterly dividend periods as to which dividends on the Senior Stock having quarterly dividends are in arrears.
(4) Redemption Provisions
(a) At the option of the Company, the Units may be redeemed out of funds legally available therefor in whole or from time to time in part on any Dividend Payment Date at a redemption price of $25 per share of the 1989 DARTS ($100,000 per Unit) plus accrued and unpaid dividends (whether or not earned or declared) to the redemption date. Only whole Units may be redeemed. See Section (5) below for restrictions on the reissue of Units after redemption.
(b) In accordance with Part Two, Section III, Section 4 of the Capital
Stock Provisions of this Certificate of Incorporation, notice of redemption
shall be mailed to each record holder of Units and to the Trust Company not less
than 30 days prior to the date fixed for redemption thereof. Each notice of
redemption shall include a statement setting forth: (i) the redemption date,
(ii) the number of Units to be redeemed, (iii) the redemption price, (iv) the
place or places where Units are to be surrendered for payment of the redemption
price, and (v) that dividends of the Units to be redeemed will cease to accrue
on such redemption date. No defect in the notice of redemption or in the
mailing thereof shall affect the validity of the redemption proceedings, except
as required by applicable law.
(c) If less than all of the outstanding Units are to be redeemed, the
number of Units to be redeemed shall be determined by the Company and
communicated to the Trust Company. In accordance with Part Two, Section III,
Section 1 of the Capital Stock Provisions of this Certificate of Incorporation,
the Trust Company shall give notice to the Securities Depository and the
Securities Depository will determine by lot under its usual operating procedures
the number of Units, if any, to be redeemed from the account of the Agent Member
of each Existing Holder. An Agent Member may determine to redeem Units from
some Existing Holders without redeeming Units from the accounts of other
Existing Holders.
(5) Reacquisition
Except in an Auction (as defined in Section (6)(a)(iii) below), the Company
shall have the right, in accordance with Part Two, Section III, Section 6 of the
Capital Stock Provisions of this Certificate of Incorporation and where
permitted by applicable law, to purchase or otherwise acquire Units upon the
best terms reasonably obtainable, but not exceeding the then current redemption
price of such Units, except that no such purchase shall be made if the Company
shall be in arrears in respect to payment of dividends on any shares of Senior
Stock outstanding or if there shall exist an event of default as defined in Part
Two, Section V, Section 3 of the Capital Stock Provisions of this Certificate
of Incorporation. Notwithstanding the provisions of Part Two, Section III,
Section 5 of the Capital Stock Provisions of this Certificate of Incorporation,
Units that have been redeemed, purchased or otherwise acquired by the Company
shall not be reissued as 1989 DARTS and shall either be restored to authorized
but unissued shares of the Company's Class A Preferred Stock or canceled at the
Company's option.
(6) Auction Procedures
(a) Certain Definitions. As used in these provisions establishing and designating the 1989 DARTS the following terms shall have the following meanings, unless the context otherwise requires:
(i) "Affiliate" shall mean any Person known to the Trust Company to be controlled by, in control of, or under common control with the Company.
(ii) "Agent Member" shall mean the member of the Securities Depository that will act on behalf of a Bidder and is identified as such in such Bidder's Purchaser's Letter.
(iii) "Auction" shall mean the periodic operation of the procedures set forth herein.
(iv) "Auction Date" shall mean the Business Day next preceding the Dividend Payment Date for the prior Dividend Period.
(v) "Available Units" shall have the meaning specified in paragraph
(d)(i)(A) below.
(vi) "Bid" shall have the meaning specified in paragraph (b)(i) below.
(vii) "Bidder" shall have the meaning specified in paragraph
(b)(i) below.
(viii) "Board of Directors" shall mean the Board of Directors of the Company.
(ix) "Broker-Dealer" shall mean any broker-dealer, or other entity permitted by law to perform the functions required of a Broker-Dealer herein, that has been selected by the Company and has entered into a Broker-Dealer Agreement with the Trust Company that remains effective.
(x) "Broker-Dealer Agreement" shall mean an agreement between the Trust Company and a Broker-Dealer pursuant to which such Broker-Dealer agrees to follow the procedures specified herein.
(xi) "DARTS" or "1989 DARTS" shall mean the 2,000,000 shares of Dutch Auction Rate Transferable Securities Class A Preferred Stock, 1989 Series, $25 par value, of the Company.
(xii) "Existing Holder," when used with respect to Units, shall mean a Person who has signed a Purchaser's Letter and is listed as the beneficial owner of such Units in the records of the Trust Company.
(xiii) "Hold Order" shall have the meaning specified in paragraph
(b)(i) below.
(xiv) "Maximum Applicable Rate," on any Auction Date, shall mean the percentage of the 60-day "AA" Composite Commercial Paper Rate (as defined below) in effect on such Auction Date, determined as set forth below based on the prevailing rating of the DARTS in effect at the close of business on the day preceding such Auction Date:
Prevailing Rating Percentage ----------------- ---------- AA/aa or Above..................... 110% A/a................................ 125% BBB/baa............................ 150% Below BBB/baa...................... 200% |
For purposes of this definition, the "prevailing rating" of the DARTS shall be (i) AA/aa or Above, if the DARTS have a rating of AA- or better by Standard & Poor's Corporation or its successor ("S&P") and aa3 or better by Moody's Investors Service, Inc. or its successor ("Moody's"), or the equivalent of both of such ratings by such agencies or a substitute rating agency or substitute rating agencies selected as provided below, (ii) if not AA/aa or Above, then A/a, if the DARTS have a rating of A- or better by S&P and a3 or better by Moody's or the equivalent of both of such ratings by such agencies or a substitute rating agency or substitute rating agencies selected as provided below, (iii) if not AA/aa or Above or A/a, then BBB/Baa, if the DARTS have a rating of BBB- or better by S&P and baa3 or better by Moody's, or the equivalent of both of such ratings by such agencies or a substitute rating agency or substitute rating agencies selected as provided below, and (iv) if not AA/aa or Above, A/a or BBB/baa, then BBB/baa. The Company shall take all reasonable action necessary to enable S&P and Moody's to provide a rating for the DARTS. If either S&P or Moody's shall not make such a rating available, or neither S&P nor Moody's shall make such a rating available, Salomon Brothers Inc and Morgan Stanley & Co. Incorporated, or their successors, shall select a nationally recognized securities rating agency or two nationally recognized securities rating agencies to act as a substitute rating agency or substitute rating agencies, as the case may be.
(xv) "Minimum Applicable Rate," on any Auction Date, shall mean 59% of the 60-day "AA" Composite Commercial Paper Rate in effect on such Auction Date.
(xvi) "Order" shall have the meaning specified in paragraph (b)(i) below.
(xvii) "Outstanding" shall mean, as of any date, the DARTS theretofore issued by the Company except, without duplication, (A) any DARTS theretofore canceled or delivered to the Trust Company for cancellation, or redeemed by the Company, or as to which a notice of redemption shall have been given by the Company, (B) any DARTS as to which the Company or any Affiliate thereof shall be an Existing Holder and (C) any DARTS represented by any certificate in lieu of which a new certificate has been executed and delivered by the Company.
(xviii) "Person" shall mean and include an individual, a partnership, a corporation, a trust, an unincorporated association, a joint venture or other entity or a government or any agency or political subdivision thereof.
(xix) "Potential Holder" shall mean any Person, including any Existing Holder, (A) who shall have executed and delivered or caused to be delivered a Purchaser's Letter to the Trust Company and (B) who may be interested in acquiring Units (or, in the case of an Existing Holder, additional Units).
(xx) "Purchaser's Letter" shall mean a letter addressed to the Company, the Trust Company, Broker-Dealer and other persons in which a Person agrees, among other things, to offer to purchase, offer to sell and/or sell Units as set forth herein.
(xxi) "Securities Depository" shall mean The Depository Trust Company and its successors and assigns or any other securities depository selected by the Company which agrees to follow the procedures required to be followed by such securities depository in connection with the DARTS.
(xxii) "Sell Order" shall have the meaning specified in paragraph
(b)(i) below.
(xxiii) "60-day 'AA' Composite Commercial Paper Rate," on any date, means (i) the interest equivalent of the 60-day rate on commercial paper placed on behalf of issuers whose corporate bonds are rated "AA" by S&P or the equivalent of such rating by S&P or another rating agency, as such 60-day rate is made available on a discount basis or otherwise by the Federal Reserve Bank of New York for the Business Day immediately preceding such date, or (ii) in the event that the Federal Reserve Bank of New York does not make available such a rate, then the interest equivalent of the 60-day rate on commercial paper placed on behalf of such issuers, as quoted on a discount basis or otherwise by Morgan Stanley & Co. Incorporated or, in lieu thereof, any affiliates or successor thereof (the "Commercial Paper Dealer"), to the Trust Company for the close of business on the Business Day immediately preceding such date. If the Commercial Paper Dealer does not quote a rate required to determine the 60-day "AA" Composite Commercial Rate, the 60-day "AA" Composite Commercial Paper Rate shall be determined on the basis of the quotation or quotations furnished by any Substitute Commercial Paper Dealer or Substitute Commercial Paper Dealers selected by the Company to provide such rate. If the Company, however, shall adjust the number of Dividend Period Days in the event of a change in the dividends received reduction minimum holding period contained in the Internal Revenue Code of 1986, as amended, with the result that (i) the Dividend Period Days shall be fewer than 70 days, such rate shall be the interest equivalent of the 60-day rate on such commercial paper, (ii) the Dividend Period Days shall be 70 or more days but fewer than 85 days, such rate shall be the arithmetic average of the interest equivalent of the 60-day and 90-day rates on such commercial paper, and (iii) the Dividend Period Days shall be 85 or more days but 98 or fewer days, such rate shall be the interest equivalent of the 90-day rate on such commercial paper. For the purposes of such definition, "interest equivalent" means the equivalent yield on a 360-day basis of a discount basis security to an interest-bearing security and "Substitute Commercial Paper Dealer" shall mean any commercial paper dealer that is a leading dealer in the commercial paper market, provided that neither such dealer nor any of its affiliates is a Commercial Paper Dealer.
(xxiv) "Submission Deadline" shall mean 12:30 P.M., New York City time, on any Auction Date or such other time on any Auction Date by which Broker-Dealers are required to submit Orders to the Trust Company as specified by the Trust Company from time to time.
(xxv) "Submitted Bid" shall have the meaning specified in paragraph (d)(i) below.
(xxvi) "Submitted Hold Order" shall have the meaning specified in paragraph (d)(i) below.
(xxvii) "Submitted Order" shall have the meaning specified in paragraph (d)(i) below.
(xxviii) "Submitted Sell Order" shall have the meaning specified in paragraph (d)(i) below.
(xxvix) "Sufficient Clearing Bids" shall have the meaning specified in paragraph (d)(i) below.
(xxx) "Trust Company" shall mean Bankers Trust Company and its
successor, and assigns or any other bank, trust company or other entity selected
by the Company which agrees to follow the Auction Procedures described in this
Section (6) for the purposes of determining the Applicable Rate for the DARTS.
(xxxi) "Winning Bid Rate" shall have the meaning specified in paragraph (d)(i) below.
(b) Orders by Existing Holders and Potential Holders
(i) On or prior to each Auction Date:
(A) each Existing Holder may submit to a Broker-Dealer information as to:
(1) the number of Outstanding Units, if any, held by such Existing Holder which such Existing Holder desires to continue to hold without regard to the Applicable Rate for the next succeeding Dividend Period;
(2) the number of Outstanding Units, if any, held by such Existing Holder which such Existing Holder desires to continue to hold, provided that the Applicable Rate for the next succeeding Dividend Period shall not be less than the rate per annum specified by such Existing Holder; and/or
(3) the number of Outstanding Units, if any, held by such Existing Holder which such Existing Holder offers to sell without regard to the Applicable Rate for the next succeeding Dividend Period; and
(B) Each Broker-Dealer, using a list of a Potential Holders that shall be maintained in good faith for the purpose of conducting a competitive Auction shall contact Potential Holders, including Persons that are not Existing Holders, on such list to determine the number of Outstanding Units, if any, which each such Potential Holder offers to purchase, provided that the Applicable Rate for the next succeeding Dividend Period shall not be less than the rate per annum specified by such Potential Holder.
For the purposes hereof, the communication to a Broker-Dealer of information referred to in clause (A) or (B) of this paragraph (b)(i) is hereinafter referred to as an "Order" and each Existing Holder and each Potential Holder placing an Order is hereinafter referred to as a "Bidder"; and Order containing the information referred to in clause (A)(1) of this paragraph (b)(i) is hereinafter referred to as a "Hold Order"; an Order containing the information referred to in clause (A)(2) or (B) of this paragraph (b)(i) is hereinafter referred to as a "Bid"; and an Order containing the information referred to in clause (A)(3) of this paragraph (b)(i) is hereinafter referred to as a "Sell Order."
(ii) (A) A Bid by an Existing Holder shall constitute an irrevocable offer to sell:
(1) the number of Outstanding Units specified in such Bid if the Applicable Rate determined on such Auction Date shall be less than the rate specified therein; or
(2) such number or a lesser number of Outstanding Units to be determined as set forth in paragraph (e)(i)(D) if the Applicable Rate determined on such Auction Date shall be equal to the rate specified therein; or
(3) a lesser number of Outstanding Units to be determined as set forth in paragraph (e)(ii)(C) if such specified rate shall be higher than Maximum Applicable Rate and Sufficient Clearing Bids do not exist.
(B) A Sell Order by an Existing Holder shall constitute an irrevocable offer to sell:
(1) the number of Outstanding Units specified in such Sell Order; or
(2) such number or a lesser number of Outstanding Units to be determined as set forth in paragraph (e)(ii)(C) if Sufficient Clearing Bids do not exist.
(C) A Bid by a Potential Holder shall constitute an irrevocable offer to purchase:
(1) the number of Outstanding Units specified in such Bid if the Applicable Rate determined on such Auction Date shall be higher than the rate specified therein; or
(2) such number of a lesser number of Outstanding Units to be determined as set forth in paragraph (e)(i)(E) if the Applicable Rate determined on such Auction Date shall be equal to the rate specified therein.
(c) Submission of Orders by Broker-Dealers to Trust Company
(i) Each Broker-Dealer shall submit in writing to the Trust Company prior to the Submission Deadline on each Auction Date all Orders obtained by such Broker-Dealer and specifying with respect to each Order:
(A) the name of the Bidder placing such Order;
(B) the aggregate number of Outstanding Units that are subject of such Order;
(C) to the extent that such Bidder is an Existing Holder:
(1) the number of Outstanding Units, if any, subject to any Hold Order placed by such Existing Holder;
(2) the number of Outstanding Units, if any, subject to any Bid placed by such Existing Holder and the rate specified in such Bid; and
(3) the number of Outstanding Units, if any, subject to any Sell Order placed by such Existing Holder; and
(D) to the extent such Bidder is a Potential Holder, the rate specified in such Potential Holder's Bid.
(ii) If any rate specified in any Bid contains more than three figures to the right of the decimal point, the Trust Company shall round such rate up to the next highest one-thousandth (.001) of 1%.
(iii) If an Order or Orders covering all of the Outstanding Units held by an Existing Holder is not submitted to the Trust Company prior to the Submission Deadline, the Trust Company shall deem a Hold Order to have been submitted on behalf of such Existing Holder covering the number of Outstanding Units held by such Existing Holder and not subject to Orders submitted to the Trust Company.
(iv) If one or more Orders covering in the aggregate more than the number of Outstanding Units held by an Existing Holder are submitted to the Trust Company, such Orders shall be considered valid as follows and in the following order or priority:
(A) any Hold Order submitted on behalf of such Existing Holder shall be considered valid up to and including the number of Outstanding Units held by such Existing Holder; provided that if more than one Hold Order is submitted on behalf of such Existing Holder and the number of Units subject to such Hold Orders exceeds the number of Outstanding Units held by such Existing Holder, the number of Units subject to such Hold Orders shall be reduced pro rata so that such Hold Orders shall cover the number of Outstanding Units held by such Existing Holder;
(B) (1) any Bid shall be considered valid up to and including the
excess of the number of Outstanding Units held by such Existing Holder
over number of Units subject to Hold Orders referred to in paragraph
(c)(iv)(A);
(2) subject to clause (1) above, if more than one Bid with the same rate is submitted on behalf of such Existing Holder and the number of Outstanding Units subject to such Bids is greater than such excess, the number of Outstanding Units subject to such Bids shall be reduced pro rata so that such Bids shall cover the number of Outstanding Units equal to such excess; and
(3) subject to clause (1) above, if more than one Bid with different rates is submitted on behalf of such Existing Holder, such Bids shall be considered valid in the ascending order of their respective rates and in any such event the number, if any, of such Outstanding Units subject to Bids not valid under this clause (B) shall be treated as the subject of a Bid by a potential Holder; and
(C) any Sell Order shall be considered valid up to and including the excess of the number of Outstanding Units held by such Existing Holder over the number of Outstanding Units subject to Hold Orders referred to in paragraph (c)(iv)(A) and Bids referred to in paragraph (c)(iv)(B).
(v) If more than one Bid is submitted on behalf of any Potential Holder, each Bid submitted shall be a separate Bid with the rate and Units therein specified.
(vi) If any rate specified in any Bid is lower than the Minimum Applicable Rate for the Dividend Period to which such Bid relates, such Bid shall be deemed to be a Bid specifying a rate equal to such Minimum Applicable Rate.
(vii) Orders by Existing Holders and Potential Holders must specify numbers of Units in whole Units. Any Order that specifies a number of Units other than in whole units will be invalid and will not be considered a Submitted Order for purposes of an Auction.
(d) Determination of Sufficient Clearing Bids, Winning Bid Rate and Applicable Rate
(i) Not earlier than the Submission Deadline on each Auction Date, the Trust Company shall assemble all Orders submitted or deemed submitted to it by the Broker- Dealers (each such Order as submitted or deemed submitted by a Broker-Dealer being hereinafter referred to individually as a "Submitted Hold Order" a "Submitted Bid" or a "Submitted Sell Order," as the case may be, or as a "Submitted Order") and shall determine:
(A) the excess of the total number of Outstanding Units over the number of Outstanding Units that are the subject of Submitted Hold Orders (such excess being hereinafter referred to as the "Available Units");
(B) from the Submitted Orders, whether:
(1) the number of Outstanding Units that are the subject of Submitted Bids by Potential Holders specifying one or more rates equal to or lower than the Maximum Applicable Rate exceeds or is equal to the sum of:
(2) [a] the number of Outstanding Units that are the subject of Submitted Bids by Existing Holders specifying one or more rates higher than the Maximum Applicable Rate, and
[b] the number of Outstanding Units that are subject to Submitted Sell Orders (if such excess of such equality exists (other than because the number of Outstanding Units in clauses [a] and [b] above are each zero because all of the Outstanding Units are the subject of Submitted Hold Orders), such Submitted Bids in clause (1) above being hereinafter referred to collectively as "Sufficient Clearing Bids"); and
(C) if Sufficient Clearing Bids exist, the lowest rate specified in the Submitted Bids (the "Winning Bid Rate"), which if:
(1) each Submitted Bid from Existing Holders specifying the Winning Bid Rate and all other Submitted Bids from Existing Holders specifying lower rates were rejected, thus entitling such Existing Holders to continue to hold the Units that are the subject of such Submitted Bids, and
(2) each Submitted Bid from Potential Holders specifying the Winning Bid Rate and all other Submitted Bids from Potential Holders specifying lower rates were accepted, thus entitling the Potential Holders to purchase the Units that are the subject of such Submitted Bids, would result in the number of shares subject to all Submitted Bids specifying the Winning Bid Rate or a lower rate being at least equal to the Available Units.
(ii) Promptly after the Trust Company has made the determinations pursuant to paragraph (d)(i), the Trust Company shall advise the Company of the Maximum Applicable Rate and the Minimum Applicable Rate and, based on such determinations, the Applicable Rate for the next succeeding Dividend Period as follows:
(A) if Sufficient Clearing Bids exist, that the Applicable Rate for the next succeeding Dividend Period shall be equal to the Winning Bid Rate so determined;
(B) if Sufficient Clearing Bids do not exist (other than because all of the Outstanding Units are the subject of Submitted Hold Orders), that the Applicable Rate for the next succeeding Dividend Period shall be equal to the Maximum Applicable Rate; or
(C) if all the Outstanding Units are the subject of Submitted Hold Orders, that the Applicable Rate for the next succeeding Dividend Period shall be equal to the Minimum Applicable Rate.
(e) Acceptance and Rejection of Submitted Bids and Submitted Sell Orders and Allocation of Shares
Based on the determinations made pursuant to paragraph (d)(i), the Submitted Bids and Submitted Sell Orders shall be accepted or rejected and the Trust Company shall take such other action as set forth below:
(i) If Sufficient Clearing Bids have been made, subject to the provisions of paragraphs (e)(iii) and ((e)(iv), Submitted Bids and Submitted Sell Orders shall be accepted or rejected in the following order or priority and all other Submitted bids shall be rejected:
(A) the Submitted Sell Orders of Existing Holders shall be accepted and the Submitted Bid of each of the Existing Holders specifying any rate that is higher then the Winning Bid Rate shall be rejected, thus requiring each such Existing Holder to sell the Outstanding Units that are the subject of such Submitted Bid;
(B) the Submitted Bid of each of the Existing Holders specifying any rate that is lower than the Winning Bid Rate shall be accepted, thus entitling each such Existing Holder to continue to hold the Outstanding Units that are the subject of such Submitted Bid;
(C) the Submitted Bid of each of the Potential Holders specifying any rate that is lower than the Winning Bid Rate shall be accepted;
(D) the Submitted Bid of each of the Existing Holders specifying a rate that is equal to the Winning Bid Rate shall be accepted, thus entitling each such Existing Holder to continue to hold the Outstanding Units that are the subject of such Submitted Bids, unless the number of Outstanding Units subject to all such Submitted Bids shall be greater than the number of Outstanding Units ("remaining shares") equal to the excess of the Available Units over the number of Outstanding Units subject to Submitted Bids described in paragraphs (e)(i)(B) and (e)(i)(C), in which event the Submitted Bids of each such Existing Holder shall be rejected, and each such Existing Holder shall be required to sell Outstanding Units, but only in an amount equal to the difference between (1) the number of Outstanding Units then held by such Existing Holder subject to such Submitted Bid and (2) the number of Units obtained by multiplying (x) the number of remaining shares by (y) a fraction the numerator of which shall be the number of Outstanding Units held by such Existing Holder subject to such Submitted Bid and the denominator of which shall be the sum of the number of Outstanding Units subject to such Submitted Bids made by all such Existing Holders that specified a rate equal to the Winning Bid Rate; and
(E) the Submitted Bid of each of the Potential Holders specifying a
rate that is equal to the Winning Bid Rate shall be accepted but only in
an amount equal to the number of Outstanding Units obtained by multiplying
(x) the difference between the Available Units and the number of
Outstanding Units subject to the Submitted Bids described in paragraphs
(e)(i)(B), (e)(i)(C) and (e)(i)(D) by (y) a fraction the numerator of
which shall be the number of Outstanding shares of Units subject to such
Submitted Bid and the denominator of which shall be the sum of the number
of Outstanding Units subject to such Submitted Bids made by all such
Potential Holders that specified rates equal to the Winning Bid Rate.
(ii) If Sufficient Clearing Bids have not been made (other than because all of the Outstanding Units are subject to Submitted Hold Orders), subject to the provisions of paragraphs (e)(iii) and (e)(iv), Submitted Orders shall be accepted or rejected as follows in the following order of priority and all other Submitted Bids shall be rejected:
(A) the Submitted Bid of each Existing Holder specifying any rate that is equal to or lower than the Maximum Applicable Rate shall be accepted, thus entitling such Existing Holder to continue to hold the Outstanding Units that are the subject of such Submitted Bid;
(B) the Submitted Bid of each Potential Holder specifying any rate that is equal to or lower than the Maximum Applicable Rate shall be accepted, thus requiring such Potential Holder to purchase the Outstanding Units that are the subject of such Submitted Bid; and
(C) the Submitted Bids of each Existing Holder specifying any rate that is higher than the Maximum Applicable Rate shall be rejected and the Submitted Sell Orders of each Existing Holder shall be accepted, in both cases only in an amount equal to the difference between (1) the number of Outstanding Units then held by such Existing Holder subject to such Submitted Bid or Submitted Sell Order and (2) the number of Units obtained by multiplying (x) the difference between the Available Units and the aggregate number of Outstanding Units subject to Submitted Bids described in paragraphs (e)(ii)(A) and (e)(ii)(B) by (y) a fraction the numerator of which shall be the number of Outstanding Units held by such Existing Holder subject to such Submitted Bid or Submitted Sell Order and the denominator of which shall be the number of Outstanding Units subject to all such Submitted Bids and Submitted Sell Orders.
(iii) If, as a result of the procedures described in paragraph
(e)(i) or (e)(ii), any Existing Holder would be entitled or required to sell,
or any Potential Holder would be entitled or required to purchase, a fraction
of a Unit on any Auction Date, the Trust Company shall, in such manner as, in
its sole discretion, it shall determine, round up or down the number of Units
to be purchased or sold by any Existing Holder or Potential Holder on such
Auction Date so that the number of Outstanding Units purchased or sold by each
Existing Holder or Potential Holder on such Auction Date shall be whole Units.
(iv) If, as a result of the procedures described in paragraph (e)(i), any Potential Holder would be entitled or required to purchase less than a whole Unit on any Auction Date, the Trust Company shall, in such manner as, in its sole discretion, it shall determine, allocate Units for purchase among Potential Holders so that only whole Units are purchased on such Auction Date by any Potential Holder, even if such allocation results in one or more of such Potential Holders not purchasing Units on such Auction Date.
(v) Based on the results of each Auction, the Trust Company shall determine the aggregate number of Outstanding Units to be purchased and the aggregate number of Outstanding Units to be sold by Potential Holders and Existing Holders on whose behalf each Broker-Dealer submitted Bids or Sell Orders, and, with respect to each Broker-Dealer, to the extent that such aggregate number of Outstanding Units to be purchased and such aggregate number of Outstanding Units to be sold differ, determine to which other Broker- Dealer or Broker-Dealers acting for one or more purchasers such Broker-Dealer shall deliver, or from which other Broker-Dealer or Broker-Dealers acting for one or more sellers such Broker-Dealer shall receive, as the case may be, Outstanding Units.
(f) Miscellaneous
The Board of Directors may interpret the provisions of these Auction Procedures to resolve any inconsistency or ambiguity, and may remedy any formal defect or make any other change or modification which does not adversely affect the rights of Existing Holders of Units. An Existing Holder (A) may sell, transfer or otherwise dispose of Units only pursuant to a Bid or Sell Order in accordance with the procedures described in this paragraph or to or through a Broker-Dealer or to a Person that has delivered a signed copy of a Purchaser's Letter to the Trust Company, provided that in the case of all transfers other than pursuant to Auctions such Existing Holder, its Broker-Dealer or its Agent Member advises the Trust Company of such transfer and (B) shall have the ownership of the Units held by it maintained in book entry form by the Securities Depository in the account of its Agent Member, which in turn will maintain records of such Existing Holder's beneficial ownership. Neither the Company nor any Affiliate shall submit an Order, either directly or indirectly, in any Auction. Except as otherwise provided by law, all of the Outstanding Units shall be represented by a certificate registered in the name of the nominee of the Securities Depository an no Person acquiring Units shall be entitled to receive a certificate representing such Units.
(g) Headings of Subdivisions
The headings of the various subdivisions of these Auction Procedures are for convenience of reference only and shall not affect the interpretation of any of the provisions hereof.
SECTION II
There shall be a series of Class A Preferred Stock designated "9% Class A Preferred Stock, 1989 Series," and consisting of 3,000,000 shares with an aggregate par value of $75,000,000 and a par value per share of $25. The dividend rate and redemption prices as to said 9% Class A Preferred Stock, 1989 Series, shall be as follows:
(a) Dividends on said 9% Class A Preferred Stock, 1989 Series, shall be at the rate of 9% per annum per share, and no more, and shall be cumulative from the date of issuance. Said dividends, when declared, shall be payable on the first day of January, April, July and October in each year, commencing January 1, 1990.
(b) The redemption prices of the 9% Class A Preferred Stock, 1989 Series, shall be as follows:
(i) if redeemed through operation of the sinking fund hereinafter provided, at the price of $25.00 per share,
(ii) if redeemed otherwise than through operation of the sinking fund, for each of the twelve-month periods commencing October 1, 1989, the redemption prices of said 9% Class A Preferred Stock, 1989 Series, shall be the amount per share set forth below:
Twelve Twelve Months Redemption Months Redemption Beginning Price Beginning Price October 1 Per Share October 1 Per Share --------- ---------- --------- ---------- 1989 $27.25 2002 $25.30 1990 27.10 2003 25.15 1991 26.95 2004 25.00 1992 26.80 2005 25.00 1993 26.65 2006 25.00 1994 26.50 2007 25.00 1995 26.35 2008 25.00 1996 26.20 2009 25.00 1997 26.05 2010 25.00 1998 25.90 2011 25.00 1999 25.75 2012 25.00 2000 25.60 2013 25.00 2001 25.45 |
plus in all cases that portion of the quarterly dividend accrued thereon to the redemption date and all unpaid dividends hereon, if any; provided, however, that none of the 9% Class A Preferred Stock, 1989 Series, shall be redeemed prior to October 1, 1994, if such redemption is for the purpose of or in anticipation of refunding such 9% Class A Preferred Stock, 1989 Series, through the use, directly or indirectly, of funds borrowed by the Company or of the proceeds of the issue by the Company of shares of any stock ranking prior to or on a parity with the 9% Class A preferred Stock, 1989 Series, as to dividends or assets, if such borrowed funds or such shares have an effective interest cost or effective dividend cost to the Company (computed in accordance with generally accepted financial principles), as the case may be, of less than 9.24% per annum.
(c) As and for a sinking fund for said 9% Class A Preferred Stock,
1989 Series, commencing on October 1, 1995, and on each October 1 in each year
thereafter so long as any shares of the 9% Class A Preferred Stock, 1989 Series,
remain outstanding, the Company shall, to the extent of any funds of the Company
legally available therefor and except as otherwise restricted by the Company's
Amended and Restated Certificate of Incorporation, redeem 150,000 shares of 9%
Class A Preferred Stock, 1989 Series, (or such lesser number of such shares as
remain outstanding) at the sinking fund redemption price, plus accrued dividends
to the date fo redemption; provided, however, that if in any year the Company
does not redeem the full number of shares of 9% Class A Preferred Stock, 1989
Series, required to be redeemed pursuant to this sinking fund, the deficiency
shall be made good on the next succeeding October 1 on which the Company has
funds legally available for, and is otherwise permitted to effect, the
redemption of shares of 9% Class A Preferred Stock, 1989 Series, pursuant to
this sinking fund. At the option of the Company, the number of shares of 9%
Class A Preferred Stock, 1989 Series, redeemed on any October 1 may be reduced
by the number of such shares purchased and canceled by the Company during the
preceding twelve-month period or redeemed during such period pursuant to clause
(ii) of subsection (b) hereof. Any shares so redeemed or purchased and canceled
may be given the status of authorized but unissued shares of Senior Stock, but
none of such shares shall be reissued as shares of 9% Class A Preferred Stock,
1989 Series. The Company shall have the option, which shall be noncumulative,
to redeem on October 1, 1995 and on each October 1 thereafter up to an
additional 150,000 shares of 9% Class A Preferred Stock, 1989 Series, at the
sinking fund redemption price, plus accrued dividends to the date of redemption.
No such optional sinking fund shall operate to reduce the number of shares of the 9% Class A Preferred Stock, 1989 Series, required to be redeemed pursuant to the mandatory sinking fund provisions hereinabove set forth. If the Company shall at any time fail to make a full mandatory sinking fund payment on any sinking fund payment date, the Company shall not pay any dividends or make any other distributions in respect of outstanding shares of any junior stock (as that term is defined in Section II, Section 3 of Part Two hereof) of the Company, other than dividends or distributions in shares of junior stock, or purchase or otherwise acquire for value any outstanding shares of junior stock, until all such payments have been made.
RESOLVED, that the officers of the Company are severally authorized and directed to make, sign, swear to and cause to be filed any and all certificates and other documents required to make effective the amendment of the Company's Certificate of Incorporation adopted by the Board at this meeting.
PART FIVE
PROVISIONS WITH RESPECT TO THE CLASS OF COMMON STOCK
Subject to the rights of holders of Senior Stock, the holders of Common Stock shall have the dividend, voting, liquidation, preemptive and other rights to which they are entitled under the general corporation law of the State of Connecticut, as from time to time in effect, except as otherwise provided herein. The holders of the Common Stock shall have no preemptive right to subscribe to any future issues of Senior Stock shall have no preemptive right to subscribe to any future issues of Senior Stock or any other preferred stock of any class now or hereafter authorized (other than Senior Stock or other preferred stock which is convertible into Common Stock) nor to any future issues of bonds, notes or other evidences of indebtedness which may be convertible into preferred stock. As used in this paragraph, the term "preferred stock" shall mean stock which has, as against the Common Stock, preferential rights to the Company's assets in the event of liquidation or preferential rights in respect of dividends or other distributions, and shall include the aforementioned classed of Preferred Stock and Class A Preferred Stock.
The Board of Directors shall have the power to issue and dispose of, from time to time, shares of the authorized and unissued Common Stock at such times, in such amounts, upon such terms, and in such manner as it may determine, either for cash or property, or for securities convertible into Common Stock, and to fix the amount of money or the actual value of the consideration for which such authorized and unissued Common Stock shall be issued.
EXHIBIT A TO
RESTATED
CERTIFICATE OF
INCORPORATION
TABLE OF CONNECTICUT SPECIAL ACTS
GRANTING RIGHTS, POWERS AND
FRANCHISES TO THE CONNECTICUT
LIGHT AND POWER COMPANY AND
ITS PREDECESSORS
TITLE DATE OF VOLUME PAGE
APPROVAL OF THE COMPILED
SPECIAL LAWS OF
CONNECTICUT OR
CONNECTICUT
SPECIAL ACTS
|
A - THE CONNECTICUT LIGHT AND POWER
COMPANY, FORMERLY THE ROCKY
RIVER POWER COMPANY
1. Incorporating the 6/22/1905 Vol. XIV P. 860 Rocky River Power Company
2. Amending the Charter 8/17/1909 Vol. XV P. 1093 of the Rocky River Power Company
3. Amending the Charter 3/29/1917 Vol. XVII P. 833 of The Housatonic Power Company
4. Amending the Charter 4/9/1919 Vol. XVIII P. 97 of The Connecticut Light and Power Company
5. Amending the Charter 4/15/1919 Vol. XVIII P. 106 of The Connecticut Light and Power Company
6. Amending the Charter 5/16/1923 Vol. XIX P. 180 of The Connecticut Light and Power Company
7. Amending the Charter 4/26/1927 Vol. XX P. 223 of The Connecticut Light and Power Company (Sections 2 and 3 only)
8. Authorizing The 5/23/1927 Vol. XX P. 297 Connecticut Light and Power Company to Acquire the Franchises and Property of The Bristol and Plainville Electric Company
B - PREDECESSORS OF THE CONNECTICUT
LIGHT AND POWER COMPANY
1. Housatonic Power Company
1. Incorporating The 3/24/1893 Vol. XI P. 111 Housatonic Power Company
2. Amending the Charter 6/27/1893 Vol. XI P. 868 of The Housatonic Power Company
3. Concerning the 3/14/1895 Vol. XII P. 27 Organization of The Housatonic Power Company
4. Amending the Charter 5/3/1895 Vol. XII P. 247 of The Housatonic Power Company
5. Extending the Time for 3/10/1897 Vol. XII P. 692 the Organization of The Housatonic Power Company
6. Amending the Charter 3/9/1899 Vol. XIII P. 23 of The Housatonic Power Company
7. Amending the Charter 8/29/1911 Vol. XVI P. 499 of The Housatonic Power Company
8. Concerning The 6/6/1913 Vol. XVI P. 1032 Housatonic Power Company
2. The New Milford Power Company
1. Incorporating The New 4/20/1893 Vol. XI P. 288 Milford Power Company
2. Amending the Charter 3/14/1895 Vol. XII P. 28 of The New Milford Power Company
3. Amending the Charter 5/21/1903 Vol. XIV P. 252 of The New Milford Power Company
4. Amending the Charter 7/13/1905 Vol. XIV P. 997 of The New Milford Power Company
3. The Branford Lighting and Water Company
(formerly The Branford Electric Company)
1. Incorporating The 3/28/1895 Vol. XII P. 104 Branford Electric Company
2. Amending the Charter 4/7/1897 Vol. XII P. 846 of The Branford Electric Company
3. Amending the Charter 6/1/1899 Vol. XIII P. 334 of The Branford Electric Company
4. Amending the Charter 5/8/1901 Vol. XIII P. 791 of The Branford Lighting and Water Company
5. Amending the Charter 5/15/1903 Vol. XIV P. 204 of The Branford Lighting and Water Company
6. Amending the Charter 5/9/1905 Vol. XIV P. 652 of The Branford Lighting and Water Company
4. The United Electric Light and Water Company
1. Incorporating The 6/10/1901 Vol. XIII P. 995 United Electric Light and Water Company
2. Amending the Charter 5/27/1903 Vol. XIV P. 239 of The United Electric Light and Water Company
3. Amending the Charter 6/3/1913 Vol. XVI P. 933 of The United Electric Light and Water Company
4. Amending the Charter 5/16/1917 Vol. XVII P. 1051 of The United Electric Light and Water Company
5. The Seymour Electric Light Company
1. Incorporating The 5/21/1889 Vol. X P. 1133 Seymour Electric Light Company
2. Amending the Charter 3/29/1905 Vol. XIV P. 549 of The Seymour Electric Light Company
3. Amending the Charter 5/1/1917 Vol. XVII P. 949 of The Seymour Electric Light Company
6. The Meriden Electric Light Company
1. Incorporating The 4/20/1887 Vol. X P. 684 Meriden Electric Light Company
2. Authorizing The 6/14/1907 Vol. XV P. 255 Meriden Electric Light Company to Increase Its Capital Stock and to Issue Bonds
3. Authorizing The 5/7/1917 Vol. XVII P. 993 Meriden Electric Light Company to Increase Its Capital Stock
4. Amending the Charter 4/9/1925 Vol. XIX P. 678 of The Meriden Electric Light Company
7. The Meriden Gas-Light Company
1. Incorporating the 6/12/1860 Vol. V P. 362 Meriden Gas-Light Company
2. Authorizing the 5/31/1867 Vol. VI P. 154 Meriden Gas Light Company to Increase its Capital Stock
3. Amending the Charter 6/11/1868 Vol. VI P. 320 of the Meriden Gas Light Company
4. Amending the Charter 3/4/1878 Vol. VIII P. 149
of the Meriden Gas
Light Company
5. Empowering the Meriden 2/28/1883 Vol. IX P. 707
Gas Light Company to
Increase its Capital
Stock
6. Amending the Charter 4/7/1887 Vol. X P. 614
of the Meriden Gas
Light Company
7. Amending the Charter 5/18/1893 Vol. XI P. 473
of the Meriden Gas
Light Company
8. Authorizing the 4/25/1899 Vol. XIII P. 187
Meriden Gas Light
Company to Increase
its Capital Stock and
to Issue Bonds
9. Amending The Charter 4/21/1909 Vol. XV P. 681
of the Meriden Gas
Light Company
10. Authorizing the 6/5/1913 Vol. XVI P. 888
Meriden Gas Light
Company to Increase
its Capital Stock
11. Amending the Charter 4/9/1925 Vol. XIX P. 675
of the Meriden Gas
Light Company
|
8. The Woodbury Electric Company (formerly The Woodbury and Southbury Electric Railway Company)
1. Incorporating The 6/14/1893 Vol. XI P. 720 Woodbury and Southbury Electric Railway Company
2. Re-enacting and 4/7/1897 Vol. XII P. 851 Amending the Charter of The Woodbury and Southbury Electric Railway Company
3. Amending the Charter 4/23/1925 Vol. XIX P. 715 of The Woodbury Electric Company
9. The Westport Electric Company
1. Incorporating The 4/2/1925 Vol. XIX P. 621 Westport Electric Company
10. The Westport Water Company
1. Incorporating The 5/15/1889 Vol. X P. 1063 Westport Water Company
2. Amending the Charter 3/2/1893 Vol. XI P. 33 of The Westport Water Company
3. Amending the Charter 6/30/1893 Vol. XI P. 1099 of The Westport Water Company
4. Incorporating the 7/3/1895 Vol. XII P. 601 United Water and Light Company
5. Extending the Time for 4/22/1897 Vol. XII P. 904 the Organization of the United Water and Light Company
6. Amending the Charter 6/21/1905 Vol. XIV P. 847 of The Westport Water Company
11. The New Milford Electric Light Company
1. Incorporating The New 5/27/1893 Vol. XI P. 575 Milford Electric Light Company
2. Amending the Charter 5/16/1911 Vol. XVI P. 190 of The New Milford Electric Light Company
3. Authorizing The New 3/26/1919 Vol. XVIII P. 29 Milford Electric Light Company to Increase Its Capital Stock
4. Authorizing The New 5/3/1921 Vol. XVIII P. 524 Milford Electric Light Company to Increase Its Capital Stock
5. Amending the Charter 4/23/1925 Vol. XIX P. 714 of The New Milford Electric Light Company
6. Concerning an 5/8/1929 Vol. XX P. 848 Amendment to the Charter of The New Milford Electric Light Company
12. The Waterbury and Milldale Tramway Company
1. Incorporating The 6/5/1907 Vol. XV P. 180 Waterbury and Milldale Tramway Company
2. Amending the Charter 6/2/1927 Vol. XX P. 444 of The Waterbury and Milldale Tramway Company
13. Bristol and Plainville Electric Company
(formerly Bristol and Plainville Tramway Company)
1. Incorporating the 6/14/1893 Vol. XI P. 730 Bristol and Plainville Tramway
2. Merging The Bristol 3/31/1897 Vol. XII P. 822 Electric Light Company in the Bristol and Plainville Tramway Company
3. Amending the Charter 4/7/1897 Vol. XII P. 874 of the Bristol and Plainville Tramway Company
4. Amending the Charter 6/13/1899 Vol. XIII P. 284 of the Bristol and Plainville Tramway Company
5. Amending the Charter 5/15/1903 Vol. XIV P. 185 of the Bristol and Plainville Tramway Company
6. Amending the Charter 7/8/1909 Vol. XV P. 888 of the Bristol and Plainville Tramway Company
7. Amending the Charter 5/3/1921 Vol. XVIII P. 500 of the Bristol and Plainville Tramway Company
(VALIDATED: PUBLIC ACTS, 1923, CHAPTER 276, APPROVED 6/21/1923)
8. Authorizing the 3/20/1925 Vol. XIX P. 61 Directors of the Bristol and Plainville Electric Company to Change the Par Value of Its Stock
14. The Bristol Electric Light Company
1. Incorporating The 2/24/1886 Vol. X P. 221 Bristol Electric Light Company
15. The Middletown Gas Light Company
1. Incorporating "The Passed Vol. III P. 571
Middletown Gas Light 1853
Company"
2. Amending the Charter 7/3/1867 Vol. VI P. 219
of the Middletown Gas
Light Company
3. Amending the Charter 6/11/1873 Vol. VII P. 472
of the Middletown Gas
Light Company
4. Amending the Charter 3/18/1881 Vol. IX P. 69
of The Middletown Gas
Light Company
|
5. Amending the Charter 3/15/1895 Vol. XII P. 30 of The Middletown Gas Light Company
6. Amending the Charter 6/6/1913 Vol. XVI P. 1116 of The Middletown Gas Light Company
7. Amending the Charter 5/6/1927 Vol. XX P. 288 of The Middletown Gas Light Company
16. The Eastern Connecticut Power Company
1. Incorporated on -- -- -- 8/28/1917 under General Laws
2. Concerning the Sale of 5/8/1919 Vol. XVIII P. 180 Gas and Electricity in Norwich
3. Authorizing The Shore 5/8/1919 Vol. XVIII P. 204 Line Electric Railway Company to Sell Certain Rights and Property to The Eastern Connecticut Power Company
3. Amending the Charter 6/3/1921 Vol. XVIII P. 883 of The Eastern Connecticut Power Company
4. Concerning The Eastern 4/4/1923 Vol. XIX P. 133 Connecticut Power Company
5. Authorizing The 5/23/1927 Vol. XX P. 310 Eastern Connecticut Power Company to Acquire the Franchises and Property of The Putnam Light and Power Company, The Danielson and Plainfield Gas and Electric Company and The Lyme Electric Power Company
17. The Shore Line Electric Railway Company
1. Incorporating The 6/6/1905 Vol. XIV P. 719 Shore Line Electric Railway Company
2. Amending the Charter 6/10/1909 Vol. XV P. 810 of The Shore Line Electric Railway Company and Extending the Time for Constructing its Lines.
3. Concerning Bonds of 6/29/1911 Vol. XVI P. 289 The Shore Line Electric Railway Company
4. Amending the Charter 8/22/1911 Vol. XVI P. 439
of The Shore Line
Electric Railway
Company
5. Amending the Charter 6/4/1913 Vol. XVI P. 945
of The Shore Line
Electric Railway
Company
6. Amending the Charter 5/16/1917 Vol. XVII P. 1035 of The Shore Line Electric Railway Company
18. The Groton and Stonington Street Railway Company
1. Incorporating The 5/11/1903 Vol. XIV P. 151 Groton and Stonington Street Railway Company
2. Amending the Charter 7/25/1907 Vol. XV P. 310 of The Groton and Stonington Street Railway Company
19. The Norwich & Westerly Traction Company (formerly The Norwich & Westerly Railway Company, also The Norwich, Mystic and Westerly Street Railway Company)
1. Incorporating The 5/11/1903 Vol. XIV P. 158 Norwich, Mystic and Westerly Street Railway Company
2. Granting Additional 4/21/1909 Vol. XV P. 660 Powers to The Norwich, Mystic and Westerly Street Railway Company
3. Amending the Charter 6/6/1913 Vol. XVI P. 989 of The Norwich & Westerly Traction Company
20. The Putnam Light and Power Company
(formerly Putnam Gas Light Company)
1. Incorporating the 3/10/1886 Vol. X P. 276
Putnam Gas Light
Company
2. Reducing the Capital 3/4/1887 Vol. X P. 448
Stock of the Putnam
Gas Light Company
3. Amending the Charter 4/20/1887 Vol. X P. 694
of the Putnam Gas
Light Company
4. Validating an 5/29/1889 Vol. X P. 1176
Amendment to the
Charter of Putnam Gas
Light Company and
Changing Its Corporate
Name
5. Amending the Charter 4/3/1903 Vol. XIV P. 49
of The Putnam Light
and Power Company
6. Amending the Charter 3/16/1905 Vol. XIV P. 528
of The Putnam Light
and Power Company
7. Amending the Charter 3/16/1905 Vol. XIV P. 528
of The Pomfret Club
8. Extending the Time for 5/1/1907 Vol. XV P. 117
the Acceptance of an
Amendment to the
Charter of The Putnam
Light and Power
Company
9. Authorizing The Putnam 4/6/1911 Vol. XVI P. 104
Light and Power
Company to Distribute
and Sell Electricity
in the Town of
Woodstock
10. Amending the Charter 4/6/1911 Vol. XVI P. 116
of The Putnam Light
and Power Company
11. Amending the Charter 4/24/1917 Vol. XVII P. 867
of The Putnam Light
and Power Company
12. Amending the Charter 6/3/1921 Vol. XVIII P. 877
of The Putnam Light
and Power Company
|
21. The Lyme Electric Power Company
1. Incorporating The Lyme 7/5/1907 Vol. XV P. 331 Electric Power Company
2. Extending the Time for 7/14/1909 Vol. XV P. 898 the Organization of The Lyme Electric Power Company
3. Amending the Charter 3/30/1915 Vol. XVII P. 69 of The Lyme Electric Power Company
22. The Danielson and Plainfield Gas and Electric Company (formerly The Nashawaug Electric Power Company)
1. Incorporating The 6/28/1893 Vol. XI P. 882 Nashawaug Electric Power Company
2. Authorizing the Merger 3/19/1919 Vol. XVIII P. 24 of The People's Light and Power Company and The Danielson and Plainfield Gas and Electric Company, under the Name of The Danielson and Plainfield Gas and Electric Company
3. Extending the Time for 5/1/1923 Vol. XIX P. 153 the Acceptance of an Amendment to the Charters of The People's Light and Power Company and The Danielson and Plainfield Gas and Electric Company
23. The People's Light and Power Company
1. Incorporating The 4/5/1893 Vol. XI P. 178 People's Light and Power Company
2. Amending the Charter 4/23/1903 Vol. XIV P. 99 of The People's Light and Power Company
3. Amending the Charter 3/16/1905 Vol. XIV P. 529 of The People's Light and Power Company
4. Extending the Time for 5/1/1907 Vol. XV P. 104 the Acceptance of an Amendment to the Charter of The People's Light and Power Company
24. The Gaylordsville Electric Company
1. Incorporating The 5/25/1923 Vol. XIX P. 318 Gaylordsville Electric Company
25. The Uncas Power Company
1. Incorporating The 7/18/1905 Vol. XIV P. 1082 Uncas Power Company
2. Amending the Charter 6/28/1907 Vol. XV P. 281 of The Uncas Power Company
3. Amending the Charter 8/24/1909 Vol. XV P. 1116 of The Uncas Power Company
26. The Kent Electric Light and Gas Company
1. Incorporating The Kent 5/22/1913 Vol. XVI P. 861 Electric Light and Gas Company
27. The Beacon Falls Electric Company
(formerly The Beacon Falls Rubber Shoe Company)
1. Incorporating The 3/15/1899 Vol. XIII P. 37 Beacon Falls Rubber Shoe Company
28. The Waterbury Gas Light Company
1. Incorporating "The Passed Vol. III P. 591
Waterbury Gas Light 1854
Company"
2. Amending the Charter 5/29/1873 Vol. VII P. 465
of "The Waterbury Gas
Light Company"
3. Amending the Charter 3/5/1884 Vol. IX P. 922
of The Waterbury Gas
Light Company
4. Amending the Charter 3/26/1884 Vol. IX P. 994
of The Waterbury Gas
Light Company
5. Amending the Charter 3/12/1895 Vol. XII P. 17
of The Waterbury Gas
Light Company
6. Amending the Charter 6/13/1895 Vol. XII P. 386
of The Waterbury Gas
Light Company
7. Validating the 3/1/1897 Vol. XII P. 673
Amendments to the
Charter of The
Waterbury Gas Light
Company
8. Amending the Charter 4/14/1903 Vol. XIV P. 53
of The Waterbury Gas
Light Company
9. Amending the Charter 9/19/1911 Vol. XVI P. 640
of The Waterbury Gas
Light Company and
Authorizing it to
Increase its Capital
Stock and to Issue
Bonds
10. Amending the Charter 9/20/1911 Vol. XVI P. 646
of The Waterbury Gas
Light Company
11. Amending the Charter 5/20/1915 Vol. XVII P. 502
of The Waterbury Gas
Light Company
12. Amending the Charter 4/2/1919 Vol. XVIII P. 52
of The Waterbury Gas
Light Company
13. Amending the Charter 4/16/1925 Vol. XIX P. 685
of The Waterbury Gas
Light Company
14. Concerning the Charter 6/22/1927 Vol. XX P. 385
of The Waterbury Gas
Light Company
15. Amending the Charter 6/12/1929 Vol. XX P. 933
of The Waterbury Gas
Light Company
|
29. Naugatuck Electric Light Company
1. Incorporating the 4/16/1887 Vol. X P. 650 Naugatuck Electric Light Company
2. Validating the Charter 5/25/1893 Vol. XI P. 560 of the Naugatuck Electric Light Company
3. Authorizing the 5/25/1893 Vol. XI P. 561 Naugatuck Electric Light Company to Issue Bonds
4. Validating the Charter 3/26/1895 Vol. XII P. 67 and Amendments Thereto of the Naugatuck Electric Light Company
5. Authorizing the 3/2/1899 Vol. XIII P. 17 Naugatuck Electric Light Company to Issue Bonds
30. The Watertown Gas Company
1. Incorporating The 6/6/1911 Vol. XVI P. 249 Watertown Gas Company
31. Winsted Gas Company
1. Incorporating the 5/30/1860 Vol. V P. 348 Winsted Gas Company
2. Increasing the Capital 6/17/1874 Vol. VII P. 670 Stock of the Winsted Gas Company
3. Amending the Charter 4/13/1887 Vol. X P. 636 of the Winsted Gas Company
4. Amending the Charter 5/17/1899 Vol. XIII P. 255 of the Winsted Gas Company
5. Amending the Charter 5/10/1901 Vol. XIII P. 799 of The Winsted Gas Company
6. Amending the Charter 4/9/1919 Vol. XVIII P. 90 of the Winsted Gas Company
32. Central Connecticut Power and Light Company
(formerly The East Haddam Electric Light Company)
1. Incorporating The East 5/18/1893 Vol. XI P. 519 Haddam Electric Light Company
2. Extending the Time for 7/2/1895 Vol. XII P. 572 Organization of The East Haddam Electric Light Company
3. Amending the Charter 2/18/1897 Vol. XII P. 664 of The East Haddam Electric Light Company
4. Amending the Charter 5/20/1915 Vol. XVII P. 497 of The East Haddam Electric Light Company
5. Changing the Name of 3/29/1917 Vol. XVII P. 863 The East Haddam Electric Light Company to Central Connecticut Power and Light Company
6. Amending the Charter 5/17/1921 Vol. XVIII P. 596 of the Central Connecticut Power and Light Company
7. Providing for the 6/24/1921 Vol. XVIII P. 1012 Rescission of the Contract Between the State and the Central Connecticut Power and Light Company
8. Amending the Charter 6/15/1925 Vol. XIX P. 805 of the Central Connecticut Power and Light Company
33. The Colchester Electric Light Company
1. Incorporating The 5/9/1893 Vol. XI P. 348 Colchester Electric Light Company
2. Reviving the Charter 8/10/1909 Vol. XV P. 1089 of The Colchester Electric Light Company
34. The Essex Light and Power Company
1. Incorporating The 5/17/1899 Vol. XIII P. 221 Essex Light and Power Company
2. Amending the Charter 7/25/1911 Vol. XVI P. 381 of The Essex Light and Power Company
35. The Rockville-Willimantic Lighting Company (formerly The Willimantic and Stafford Street Railway Company)
1. Incorporating The 7/18/1905 Vol. XIV P. 1096 Willimantic and Stafford Street Railway Company
2. Extending the Time for 5/13/1909 Vol. XV P. 737 The Willimantic and Stafford Street Railway Company to Construct its Tracks
3. Authorizing the Laying 5/10/1915 Vol. XVII P. 244 of Certain Gas Pipes Across Land of the State in Willimantic
4. Authorizing The 6/2/1921 Vol. XVIII P. 862 Rockville-Willimantic Lighting Company to Issue First and Refunding Mortgage Bonds and Preferred Stock
5. Defining the 7/22/1925 Vol. XIX P. 898 Territorial Limits of The Rockville- Willimantic Lighting Company
6. Amending an Act 5/24/1927 Vol. XX P. 299 Authorizing The Rockville-Willimantic Lighting Company to Issue First and Refunding Mortgage Bonds and Preferred Stock
7. Amending the Charter 5/8/1929 Vol. XX P. 761 of The Rockville- Willimantic Lighting Company
8. Extending the 6/18/1929 Vol. XX P. 1005 Territorial Limits of The Rockville- Willimantic Lighting Company
36. The Rockville Gas and Electric Company (formerly The Rockville and Ellington Street Railway Company)
1. Incorporating The 6/30/1893 Vol. XI P. 997 Rockville and Ellington Street Railway Company
2. Amending the Charter 3/31/1897 Vol. XII P. 820 of The Rockville and Ellington Street Railway Company, and Changing Its Name to The Rockville Gas and Electric Company
37. The Rockville Gas and Electric Company
(formerly The Rockville Gas Light Company)
1. Incorporating The 7/2/1863 Vol. V P. 554 Rockville Gas Light Company
2. Amending Charter of 3/28/1883 Vol. IX P. 762 The Rockville Gas Light Company
3. Amending the Charter 4/12/1893 Vol. XI P. 231 of The Rockville Gas Light Company
38. The Stafford Springs Electric Light and Gas Company
1. Incorporating The 4/27/1887 Vol. X P. 713 Stafford Springs Electric Light and Gas Company
2. Extending the Time for 6/5/1889 Vol. X P. 1219 Organizing The Stafford Springs Electric Light and Gas Company
3. Amending the Charter 7/11/1907 Vol. XV P. 359 of The Stafford Springs Electric Light and Gas Company
39. Willimantic Gas and Electric Light Company
1. Incorporating the 6/20/1899 Vol. XIII P. 550 Willimantic Gas and Electric Light Company
2. Amending the Charter 6/4/1901 Vol. XIII P. 935 of the Willimantic Gas and Electric Light Company
3. Amending the Charter 4/3/1903 Vol. XIV P. 49 of the Willimantic Gas and Electric Light Company
4. Amending the Charter 8/13/1909 Vol. XV P. 1095 of the Willimantic Gas and Electric Light Company
5. Amending the Charter 5/9/1911 Vol. XVI P. 159 of the Willimantic Gas and Electric Light Company
40. Willimantic Electric Light Company
1. Incorporating the 4/15/1887 Vol. X P. 643 Willimantic Electric Light Company
41. The Citizens' Gas Light Company of Willimantic
1. Incorporating The 6/30/1893 Vol. XI P. 1093 Citizens' Gas Light Company of Willimantic
2. Validating the 3/1/1897 Vol. XII P. 675 Acceptance of an Amendment to the Charter of The Citizens' Gas Light Company of Willimantic
42. The Monroe Electric Light Company
1. Incorporating The 5/27/1921 Vol. XVIII P. 675 Monroe Electric Light Company
43. The Connecticut Electric Service Company
1. Incorporating The 6/15/1925 Vol. XIX P. 834 Connecticut Electric Service Company
2. Amending the Charter 6/20/1927 Vol. XX P. 377 of The Connecticut Electric Service Company
3. Amending the Charter 4/30/1929 Vol. XX P. 838 of The Connecticut Electric Service Company
44. The Connecticut Electric Securities Company
1. Incorporated on -- -- -- 2/18/1929 under General Laws.
45. The Northern Connecticut Power Company (1926)
(NO SPECIAL ACTS)
FORMED BY MERGER AND CONSOLIDATION EFFECTIVE ON 4/1/1926
46. The Northern Connecticut Power Company (1905)
1. Incorporating The 6/21/1905 Vol. XIV P. 827 Northern Connecticut Power Company
47. Connecticut River Company
THE CHARTER RIGHTS OF THE FORMER CONNECTICUT RIVER COMPANY WERE NOT ACQUIRED BY THE CONNECTICUT LIGHT AND POWER COMPANY AND ARE NOT INCLUDED HEREIN, BUT REMAIN WITH THE NORTHERN CONNECTICUT POWER COMPANY.
48. The Northern Connecticut Light and Power Company (formerly The Enfield Gas Company, also The Pynchon Land and Construction Company)
1. Incorporating The 4/22/1897 Vol. XII P. 900 Pynchon Land and Construction Company
2. Extending the Time for 5/17/1899 Vol. XIII P. 187 the Organization of The Pynchon Land and Construction Company
3. Amending the Charter 6/17/1901 Vol. XIII P. 1223 of The Pynchon Land and Construction Company and Extending the Time for Its Organization
4. Extending the Time for 4/14/1903 Vol. XIV P. 51 the Organization of The Pynchon Land and Construction Company
5. Amending the Charter 5/5/1905 Vol. XIV P. 635 of The Pynchon Land and Construction Company and Changing Its Name to The Enfield Gas Company
6. Amending the Charter 5/15/1907 Vol. XV P. 149 of The Northern Connecticut Light and Power Company
7. Amending the Charter 7/26/1909 Vol. XV P. 966 of The Northern Connecticut Light and Power Company
8. Amending the Charter 5/20/1915 Vol. XVII P. 603 of The Northern Connecticut Light and Power Company
49. Windsor Locks Electric Lighting Company
1. Incorporating the 3/17/1886 Vol. X P. 293 Windsor Locks Electric Lighting Company
2. Amending the Charter 2/12/1889 Vol. X P. 779 of the Windsor Locks Electric Lighting Company
3. Authorizing the 4/19/1893 Vol. XI P. 267 Windsor Locks Electric Lighting Company to Issue Bonds
4. Extending the Time for 4/24/1895 Vol. XII P. 203 the Issue of Bonds by the Windsor Locks Electric Lighting Company
5. Amending the Charter 5/29/1901 Vol. XIII P. 903 of the Windsor Locks Electric Lighting Company
50. Enfield Electric Light and Power Company
1. Incorporating the 6/11/1889 Vol. X P. 1270 Enfield Electric Light and Power Company
51. The Somers Water Company
(formerly The Somers Electric Company)
1. Incorporating The 6/18/1903 Vol. XIV P. 467 Somers Electric Company
52. The Village Water Company of Suffield
1. Amending the Charter 5/17/1901 Vol. XIII P. 854 of The Village Water Company of Suffield
2. Amending the Charter 5/11/1903 Vol. XIV P. 183 of The Village Water Company of Suffield
53. The Suffield Electric Light Company
1. Incorporating The 5/3/1895 Vol. XII P. 238 Suffield Electric Light Company
2. Authorizing The 5/31/1899 Vol. XIII P. 128 Suffield Electric Light Company to Increase Its Capital Stock
54. The Talcott Brothers Company
1. Authorizing The 6/3/1925 Vol. XIX P. 915 Talcott Brothers Company to Maintain Transmission Lines For the Purchase and Sale of Electricity
(Property pertaining to the electric business only.)
ON 6/28/1936, SOLD ENTIRE ELECTRIC TRANSMISSION AND DISTRIBUTION
SYSTEMS TO THE CONNECTICUT LIGHT AND POWER COMPANY.
55. The Baltic Mills Company
(formerly The Baltic Power Company)
1. Incorporating The 6/21/1893 Vol. XI P. 833 Baltic Power Company
2. Amending the Charter 5/23/1895 Vol. XII P. 319 of The Baltic Power Company
56. The Meriden, Southington and Compounce Tramway Company
1. Incorporating The 4/7/1897 Vol. XII P. 683 Meriden, Southington and Compounce Tramway Company
2. Amending the Charter 6/16/1899 Vol. XIII P. 386 of The Meriden, Southington and Compounce Tramway Company
3. Amending the Charter 6/17/1901 Vol. XIII P. 1217 of The Meriden, Southington and Compounce Tramway Company
4. Amending the Charter 6/22/1903 Vol. XIV P. 471 of The Meriden, Southington and Compounce Tramway Company
5. Amending the Charter 7/18/1905 Vol. XIV P. 1088 of The Meriden, Southington and Compounce Tramway Company and Extending the Time Within Which Said Company May Construct Its Tracks
57. The Waterbury and Pomperaug Valley Railway Company (formerly The Woodbury and Seymour Street Railway Company)
1. Incorporating The 5/13/1903 Vol. XIV P. 187 Woodbury and Seymour Street Railway Company
58. The Woodbury and Waterbury Street Railway Company
1. Incorporating The 6/11/1903 Vol. XIV P. 315 Woodbury and Waterbury Street Railway Company
59. The Litchfield Electric Light and Power Company
1. Incorporating The 3/24/1897 Vol. XII P. 799 Litchfield Electric Light and Power Company
2. Extending the Time for 3/7/1901 Vol. XIII P. 596 Filing the Certificate of Organization of The Litchfield Electric Light and Power Company
3. Amending the Charter 4/3/1903 Vol. XIV P. 51 of The Litchfield Electric Light and Power Company
4. Amending the Charter 4/19/1905 Vol. XIV P. 622 of The Litchfield Electric Light and Power Company
5. Extending the Time for 5/25/1905 Vol. XIV P. 700 the Acceptance of the Amendment to the Charter of The Litchfield Electric Light and Power Company
6. Amending the Charter 5/3/1921 Vol. XVIII P. 525 of The Litchfield Electric Light and Power Company
7. Extending the Time 4/5/1923 Vol. XIX P. 80 Within Which The Litchfield Electric Light and Power Company May Accept an Amendment to Its Charter, and Validating Acts of Said Corporation
8. Amending the Charter 4/9/1925 Vol. XIX P. 678 of The Litchfield Electric Light and Power Company
9. Amending the Charter 6/22/1927 Vol. XX P. 422 of The Litchfield Electric Light and Power Company
10. Authorizing The 5/12/1937 Vol. XXII P. 685 Litchfield Electric Light and Power Company to Exercise Its Corporate Rights in a Portion of the Town of Harwinton
11. Validating Certain 4/12/1939 Vol. XXIII P. 86
Mergers or
Consolidations of or
Between The Litchfield
Electric Light and
Power Company and The
Washington Electric
Light and Power
Company and The
Litchfield Electric
Light and Power
Company and The
Ridgefield Electric
Light and Power
Company
12. Amending the Charter 4/12/1939 Vol. XXIII P. 95
of The Litchfield
Electric Light & Power
Company, Regarding The
Issuance of Mortgage
Bonds
|
13. Extending the Time 6/16/1939 Vol. XXIII P. 608
Within Which the
Litchfield Electric
Light & Power Company
May Accept an
Amendment to Its
Charter
14. Amending the Charter 5/9/1945 Vol. XXIV P. 552
of The Litchfield
Electric Light and
Power Company
|
60. The Washington Electric Light and Power Company
1. Incorporating The 6/13/1907 Vol. XV P. 237 Washington Electric Light and Power Company
61. The Ridgefield Electric Company
1. Incorporating The 4/24/1901 Vol. XIII P. 732 Ridgefield Electric Company
2. Amending the Charter 5/14/1907 Vol. XV P. 153 of The Ridgefield Electric Company
62. The Clinton Electric Light and Power Company
1. Incorporating The 5/14/1901 Vol. XIII P. 821 Clinton Electric Light and Power Company
2. Amending the Charter 5/16/1917 Vol. XVII P. 1053 of The Clinton Electric Light and Power Company
3. Amending the Charter 4/15/1919 Vol. XVIII P. 110 of The Clinton Electric Light and Power Company
4. Amending the Charter 6/22/1927 Vol. XX P. 445 of The Clinton Electric Light and Power Company
5. Amending the Charter 5/8/1953 Vol. XXVI P. 864 of The Clinton Electric Light and Power Company
63. The Housatonic Public Service Company (formerly The Derby Gas and Electric Corporation of Connecticut)
1. Incorporating The 6/21/1935 Vol. XXII P. 351 Derby Gas and Electric Corporation of Connecticut
2. Amending the Charter 6/16/1937 Vol. XXII P. 892 of The Derby Gas and Electric Corporation of Connecticut and Changing Its Name to Derby Gas & Electric Company
3. Amending the Charter 6/20/1939 Vol. XXIII P. 589 of The Derby Gas and Electric Company of Connecticut
4. Amending the Charter 4/30/1953 Vol. XXVI P. 859 of The Derby Gas and Electric Corporation of Connecticut and Changing Its Name to The Housatonic Public Service Company
5. Amending the Charter 6/29/1955 Vol. XXVII P. 327 of The Housatonic Public Service Company
6. Amending the Charter 4/12/1957 Vol. XXVIII P. 125 of The Housatonic Public Service Company
7. Amending the Charter 4/25/1958 Vol. XXIX P. 32 of The Housatonic Public Service Company
64. The Derby Gas and Electric Company
(formerly Derby Gas Company, also
The Birmingham Gas Light Company)
1. Incorporating the 5/20/1859 Vol. V P. 223
Birmingham Gas Light
Company
2. Amending the Charter 7/1/1869 Vol. VI P. 668
of the Birmingham Gas
Light Company
3. Amending the Charter 6/14/1871 Vol. VII P. 14
of Birmingham Gas
Light Company
4. Amending the Charter 3/16/1881 Vol. IX P. 49
of the Derby Gas
Company
5. Amending the Charter 2/19/1886 Vol. X P. 214
of the Derby Gas
Company
6. Amending the Charter 3/7/1889 Vol. X P. 818
of the Derby Gas
Company
7. Amending the Charter 5/18/1893 Vol. XI P. 533
of the Derby Gas
Company
8. Amending the Charter 3/23/1897 Vol. XII P. 778
of The Derby Gas
Company
9. Amending the Charter 4/2/1901 Vol. XIII P. 652
of the Derby Gas
Company
10. Amending the Charter 3/29/1905 Vol. XIV P. 545
of The Derby Gas
Company
11. Authorizing The Derby 6/6/1913 Vol. XVI P. 988
Gas Company to
Increase Its Capital
Stock
12. Amending the Charter 4/21/1915 Vol. XVII P. 181
of The Derby Gas
Company
13. Changing the Name of 3/9/1921 Vol. XVIII P. 349
The Derby Gas Company
to The Derby Gas and
Electric Company and
Authorizing Said
Company to Increase
Its Capital Stock
14. Amending the Charter 5/21/1925 Vol. XIX P. 768
of The Derby Gas and
Electric Company
15. Amending the Charter 7/22/1945 Vol. XXIV P. 635
of The Derby Gas and
Electric Company and
Authorizing It to
Increase Its Capital
Stock
16. Amending the Charter 5/24/1949 Vol. XXV P. 876
of The Derby Gas and
Electric Company
|
65. The Wallingford Gas Light Company
1. Incorporating The 4/14/1881 Vol. IX P. 246 Wallingford Gas Light Company
2. Amending the Charter 3/14/1883 Vol. IX P. 725 of The Wallingford Gas-Light Company
3. Validating Amendments 5/16/1889 Vol. X P. 1125 to the Charter of the Wallingford Gas Light Company
4. Amending the Charter 5/4/1903 Vol. XIV P. 134 of The Wallingford Gas Light Company
5. Amending the Charter 7/31/1907 Vol. XV P. 576 of The Wallingford Gas Light Company
6. Authorizing The 4/20/1921 Vol. XVIII P. 468 Wallingford Gas Light Company to Issue Mortgage Bonds
7. Amending the Charter 4/26/1923 Vol. XIX P. 150 of The Wallingford Gas Light Company
8. Amending the Charter 5/24/1949 Vol. XXV P. 877 of The Wallingford Gas Light Company
66. The Danbury and Bethel Gas and Electric Light
Company (formerly the Danbury Gas Light Company)
1. Incorporating the Passed Vol. III P. 566
Danbury Gas Light 1854
Company
2. Amending The Charter 4/13/1887 Vol. X P. 642
of The Danbury Gas
Light Company and
Changing Its Name to
The Danbury and Bethel
Gas and Electric Light
Company
3. Authorizing The 6/27/1907 Vol. XV P. 280
Danbury and Bethel Gas
and Electric Light
Company to Increase
Its Capital Stock and
to Issue Bonds
4. Amending the Charter 6/21/1911 Vol. XVI P. 276
of The Danbury and
Bethel Gas and
Electric Light Company
5. Amending the Charter 5/26/1913 Vol. XVI P. 881
of The Danbury and
Bethel Gas and
Electric Light Company
6. Authorizing The 5/16/1917 Vol. XVII P. 1096
Danbury and Bethel Gas
and Electric Light
Company to Increase
Its Capital Stock and
to Issue Bonds
7. Authorizing The 6/12/1929 Vol. XX P. 964
Danbury and Bethel Gas
and Electric Light
Company to Increase
Its Capital Stock to
Issue Bonds
8. Reimbursing The 4/2/1941 Vol. XXIII P. 731
Danbury and Bethel Gas
and Electric Light
Company for Money Paid
to the State in Error
|
9. Authorizing The 6/10/1941 Vol. XXIII P. 1143
Danbury and Bethel Gas
and Electric Light
Company to Purchase
the Franchises of The
Litchfield Electric
Light and Power
Company
10. Amending The Charter 6/24/1941 Vol. XXIII P. 1287
of the Danbury and
Bethel Gas and
Electric Light Company
11. Extending the Time for 3/15/1943 Vol. XXIV P. 24
Filing Certificates of
Acceptance of Charter
Amendments by Certain
Corporations
12. Amending The Charter 7/22/1945 Vol. XXIV P. 634
of the Danbury and
Bethel Gas and
Electric Light Company
13. Authorizing The 6/30/1947 Vol. XXV P. 381
Danbury and Bethel Gas
and Electric Light
Company to Increase
Its Capital Stock
|
67. The Danbury Power and Transportation Company
(formerly The Danbury and Bethel Traction Company)
1. Incorporating The 5/13/1919 Vol. XVIII P. 305 Danbury and Bethel Traction Company
2. Extending the Time for 4/20/1921 Vol. XVIII P. 446 The Organization of The Danbury and Bethel Traction Company
3. Extending the Time for 4/3/1923 Vol. XIX P. 63 The Organization of The Danbury and Bethel Traction Company
68. Danbury and Bethel Street Railway Company (formerly Danbury and Bethel Horse Railway Company)
1. Incorporating the 3/31/1885 Vol. X P. 81 Danbury and Bethel Horse Railway Company
2. Amending the Charter 3/11/1886 Vol. X P. 275
of the Danbury and
Bethel Horse Railway
Company
3. Legalizing Bonds 3/8/1887 Vol. X P. 452
Issued by the Danbury
and Bethel Horse
Railway Company
4. Amending the Charter 5/4/1887 Vol. X P. 718
of the Danbury and
Bethel Horse Railway
Company
5. Amending the Charter 6/5/1889 Vol. X P. 1219
of the Danbury and
Bethel Horse Railway
Company
6. Amending the Charter 6/21/1893 Vol. XI P. 830
of the Danbury and
Bethel Horse Railway
Company
7. Amending the Charter 5/3/1895 Vol. XII P. 236
of the Danbury and
Bethel Horse Railway
Company
8. Amending the Charter 4/30/1901 Vol. XII P. 748
of the Danbury and
Bethel Street Railway
Company
9. Amending the Charter 6/18/1903 Vol. XIV P. 433
of the Danbury and
Bethel Street Railway
Company
10. Extending the Time for 3/29/1905 Vol. XIV P. 551
the Acceptance by the
Danbury and Bethel
Street Railway Company
of the Amendment to
Its Charter
11. Amending the Charter 7/8/1909 Vol. XV P. 880
of the Danbury and
Bethel Street Railway
Company
12. Extending the Time for 9/19/1911 Vol. XVI P. 644
Constructing Lines of
the Danbury and Bethel
Street Railway Company
|
13. Amending the Charter 4/30/1913 Vol. XVI P. 777
of the Danbury and
Bethel Street Railway
Company
14. Extending the Time 5/10/1915 Vol. XVII P. 250
Within Which The
Danbury and Bethel
Street Railway Company
May Construct Its
Lines
15. Amending the Charter 5/16/1917 Vol. XVII P. 1031
of the Danbury and
Bethel Street Railway
Company
16. Amending the Charter 5/21/1919 Vol. XVIII P. 221
of the Danbury and
Bethel Street Railway
Company, Relating to
Fares
17. Amending the Charter 4/20/1921 Vol. XVIII P. 441
of the Danbury and
Bethel Street Railway
Company
|
69. The Bridgeport and Danbury Electric Railway Company
1. Incorporating The 6/25/1907 Vol. XV P. 184 Bridgeport and Danbury Electric Railway Company
2. Amending the Charter 8/31/1911 Vol. XVI P. 595 of The Bridgeport and Danbury Electric Railway Company and Extending the Time for Constructing Its Tracks
3. Reviving and Extending 6/6/1913 Vol. XVI P. 1150
the Rights of The
Bridgeport and Danbury
Electric Railway
Company
70. The Fletcher Electric Light Company, Inc.
1. Incorporating The 5/8/1986 1986 Conn. Acts 27 (Reg. Sess.) Fletcher Electric Light Company
C - THE HARTFORD ELECTRIC LIGHT COMPANY
1. Incorporating The 4/12/1881 Vol. IX P. 212
Hartford Electric
Light Company
2. Amending the Charter 4/24/1883 Vol. IX P. 820
of The Hartford
Electric Light Company
3. Amending the Charter 5/4/1893 Vol. XI P. 332
of The Hartford
Electric Light Company
4. Authorizing The 3/3/1897 Vol. XII P. 691
Hartford Electric
Light Company to
Purchase or Lease the
Franchises and
Property of The
Hartford Light and
Power Company, and
Amending the Charter
of The Hartford Light
and Power Company
5. Amending the Charter 3/10/1897 Vol. XII P. 697
of The Hartford
Electric Light Company
6. Amending the Charter 4/19/1899 Vol. XIII P. 157
of The Hartford
Electric Light Company
7. Amending the Charter 5/11/1905 Vol. XIV P. 644
of The Hartford
Electric Light Company
8. Amending the Charter 6/15/1905 Vol. XIV P. 763
of The Hartford
Electric Light Company
9. Amending the Charter 7/25/1907 Vol. XV P. 422
of The Hartford
Electric Light Company
10. Amending the Charter 4/6/1911 Vol. XVI P. 116
of The Hartford
Electric Light Company
11. Amending the Charter 3/8/1917 Vol. XVII P. 733
of The Hartford
Electric Light Company
12. Amending the Charter 3/21/1917 Vol. XVII P. 753
of The Hartford
Electric Light Company
13. Amending the Charter 4/10/1917 Vol. XVII P. 936
of The Hartford
Electric Light Company
14. Amending the Charter 4/20/1921 Vol. XVIII P. 473
of The Hartford
Electric Light Company
15. Amending the Charter 5/24/1923 Vol. XIX P. 248
of The Hartford
Electric Light Company
16. Amending the Charter 6/3/1927 Vol. XX P. 299
of The Hartford
Electric Light Company
17. Amending the Charter 6/18/1929 Vol. XX P. 1024
of The Hartford
Electric Light Company
18. Amending the Charter 5/10/1943 Vol. XXIV P. 196
of The Hartford
Electric Light Company
Concerning the
Purchase of Property
19. Amending the Charter 5/10/1943 Vol. XXIV P. 196
of The Hartford
Electric Light Company
Concerning Merger or
Consolidation
20. Amending the Charter 5/10/1943 Vol. XXIV P. 197
of The Hartford
Electric Light Company
Concerning the Sale or
Purchase of Power
21. Amending the Charter 5/28/1947 Vol. XXV P. 202
of The Hartford
Electric Light Company
22. Amending the Charter 5/28/1947 Vol. XXV P. 207
of The Hartford
Electric Light Company
23. Removing the 7/12/1949 Vol. XXV P. 1062
Limitation on Capital
Stock of The Hartford
Electric Light Company
24. Concerning Offering of 7/12/1949 Vol. XXV P. 1062
Stock of The Hartford
Electric Light Company
to Stockholders
25. Amending the Charter 5/28/1953 Vol. XXVI P. 991
of The Hartford
Electric Light Company
26. Amending the Charter 4/22/1959 Vol. XXIX P. 64
of The Hartford
Electric Light Company
|
D - PREDECESSORS OF THE HARTFORD
ELECTRIC LIGHT COMPANY
1. The East Hartland Improvement Company
1. Incorporated on -- -- -- 8/7/1928 under General Laws
2. Authorizing The East 4/18/1929 Vol. XX P. 660 Hartland Improvement Company to Purchase and Distribute Electricity
3. Amending the Charter 4/9/1937 Vol. XXII P. 596 of The East Hartland Improvement Company
2. The Hartford Light and Power Company
1. Incorporating The 4/25/1887 Vol. X P. 701 Hartford Light and Power Company
2. Authorizing The 4/22/1897 Vol. XII P. 904 Hartford Light and Power Company to Take Up Its Outstanding Bonds
3. The Simsbury Electric Company
1. Incorporating The 5/24/1899 Vol. XIII P. 74 Simsbury Electric Company
2. Amending the Charter 4/6/1911 Vol. XVI P. 101 of The Simsbury Electric Company
3. Amending the Charter 4/9/1925 Vol. XIX P. 666 of The Simsbury Electric Company
4. Amending the Charter 5/25/1931 Vol. XXI P. 514 of The Simsbury Electric Company
5. Amending the Charter 6/29/1939 Vol. XXIII P. 643 of The Simsbury Electric Company
E - THE CONNECTICUT POWER COMPANY,
FORMERLY THE MARINE POWER COMPANY
1. Incorporating the 5/23/1899 Vol. XIII P. 266 Marine Power Company
2. Extending the Time of 3/28/1901 Vol. XIII P. 641 the Charter of the Marine Power Company
3. Extending the Time for 6/17/1901 Vol. XIII P. 1188 Organizing the Marine Power Company
4. Extending the Time for 5/4/1903 Vol. XIV P. 136 Organizing the Marine Power Company
5. Amending the Charter 9/5/1911 Vol. XVI P. 597 of The Connecticut Power Company
6. Amending the Charter 6/3/1927 Vol. XX P. 331 of The Connecticut Power Company
7. Amending the Charter 7/26/1949 Vol. XXV P. 1139 of The Connecticut Power Company to Remove Requirement That Capital Stock be Offered to Stockholders
8. Amending the Charter 7/26/1949 Vol. XXV P. 1139 of The Connecticut Power Company to Remove the Limitation on Issuance of Capital Stock
9. Amending the Charter 5/28/1953 Vol. XXVI P. 1008 of The Connecticut Power Company
F - PREDECESSORS OF THE CONNECTICUT
POWER COMPANY
1. The Berkshire Power Company
1. Incorporated on -- -- -- 12/9/1904 under General Laws
2. Authorizing The 6/22/1905 Vol. XIV P. 865 Berkshire Power Company to Erect a Dam and Take Land Flooded Thereby
2. The Bolton Electric Company
1. Incorporating The 4/23/1925 Vol. XIX P. 688 Bolton Electric Company
3. The Eastern Connecticut Electric Power Company
1. Incorporating The 6/5/1903 Vol. XIV P. 297 Eastern Connecticut Electric Power Company
2. Amending the Charter 7/13/1905 Vol. XIV 1047 of The Eastern Connecticut Electric Power Company
4. The Manchester Electric Company
1. Incorporating The 6/14/1893 Vol. XI P. 752 South Manchester Light, Power, and Tramway Company
2. Amending the Charter 4/26/1917 Vol. XVII P. 944 of The South Manchester Light, Power and Tramway Company
3. Amending the Charter 5/3/1921 Vol. XVIII P. 524 of The Manchester Electric Company
4. Authorizing The 4/19/1923 Vol. XIX P. 132 Manchester Electric Company to Increase Its Capital Stock and to Issue Bonds
5. Authorizing The 6/12/1929 Vol. XX P. 935 Manchester Electric Company to Increase Its Capital Stock
5. The Manchester Light and Power Company
1. Incorporating The 3/10/1893 Vol. XI P. 44
Manchester Light and
Power Company
6. The Middletown Electric Light Company
1. Incorporating The 4/19/1887 Vol. X P. 666 Middletown Electric Light Company
2. Amending the Charter 4/21/1909 Vol. XV P. 685 of The Middletown Electric Light Company
3. Amending the Charter 4/25/1911 Vol. XVI P. 145 of The Middletown Electric Light Company
7. The New Hartford Electric Company
1. Incorporating The New 6/17/1901 Vol. XIII P. 1228 Hartford Electric Company
2. Amending the Charter 6/7/1927 Vol. XX P. 303 of The New Hartford Electric Company
3. Validating the Filing 6/18/1929 Vol. XX P. 1020 of Acceptance of an Act Amending the Charter of The New Hartford Electric Company
4. Authorizing The New 6/18/1929 Vol. XX P. 1021 Hartford Electric Company to Increase Its Capital Stock
8. New London Gas and Electric Company
1. Incorporating the New 3/10/1897 Vol. XII P. 702 London Gas and Electric Company
2. Amending the Charter 3/10/1897 Vol. XII P. 705 of the New London Gas and Electric Company
3. Authorizing the New 3/2/1899 Vol. XIII P. 12 London Gas and Electric Company to Issue Additional Bonds
4. Amending the Charter 6/11/1901 Vol. XIII P. 1029 of the New London Gas and Electric Company
5. Amending the Charter 5/12/1903 Vol. XIV P. 204
of the New London Gas
and Electric Company
6. Amending the Charter 4/11/1911 Vol. XVI P. 119
of the New London Gas
and Electric Company
9. The New London Gas Light Company
1. Incorporating The New Passed Vol. III P. 578 London Gas Light 1853 Company
10. The Norfolk Electric Light Company
1. Incorporating The 3/10/1897 Vol. XII P. 660 Norfolk Electric Light Company
11. Oneco Manufacturing Company
1. Incorporating the 5/9/1893 Vol. XI P. 436 Oneco Manufacturing Company
12. The Sharon Electric Light Company
1. Incorporating The 5/29/1889 Vol. X P. 1174 Sharon Electric Light Company
2. Amending the Charter 5/18/1893 Vol. XI P. 516 of The Sharon Electric Light Company
3. Amending the Charter 5/13/1897 Vol. XII P. 1026 of The Sharon Electric Light Company
4. Amending the Charter 6/22/1905 Vol. XIV P. 863 of The Sharon Electric Light Company
5. Amending the Charter 6/2/1913 Vol. XVI P. 907 of The Sharon Electric Light Company
13. Stamford Electric Lighting Company
1. Incorporating Stamford 4/8/1881 Vol. IX P. 199 Electric Lighting Company
14. The Stamford Gas and Electric Company
1. Incorporating The 6/14/1893 Vol. XI P. 717
Stamford Gas and
Electric Company
2. Authorizing The 4/23/1897 Vol. XII P. 922
Stamford Gas and
Electric Company to
Issue Additional Bonds
3. Amending the Charter 6/6/1913 Vol. XVI P. 1120 of The Stamford Gas and Electric Company
4. Amending the Charter 3/19/1915 Vol. XVII P. 38 of The Stamford Gas and Electric Company
5. Amending a Resolution 4/2/1919 Vol. XVIII P. 70 Incorporating The Stamford Gas and Electric Company
6. Authorizing The 6/3/1927 Vol. XX P. 297 Stamford Gas and Electric Company to Increase Its Capital Stock
7. Amending the Charter 4/23/1929 Vol. XX P. 860 of The Stamford Gas and Electric Company
15. The Stamford Gas Light Company
1. Incorporating The Passed Vol. III P. 586
Stamford Gas Light 1854
Company
2. Amending the Charter 6/12/1860 Vol. V P. 364
of The Stamford Gas-
Light Company
3. Amending the Charter 6/22/1865 Vol. V P. 684
of The Stamford Gas
Light Company
4. Authorizing The 5/27/1869 Vol. VI P. 575
Stamford Gas Light
Company to Increase
Its Capital Stock
5. To Increase the Number 3/24/1880 Vol. VIII P. 398
of Directors of The
Stamford Gas Company
6. Authorizing The 3/8/1881 Vol. IX P. 31
Stamford Gas Light
Company to Accept
Amendment to Its
Charter
7. Amending the Charter 4/2/1889 Vol. X P. 918
of The Stamford Gas-
Light Company
|
16. The Thomaston Electric Light Company
1. Incorporating The 4/10/1889 Vol. X P. 947 Thomaston Electric Light Company
17. The Torrington Electric Light Company
1. Incorporating The 4/13/1887 Vol. X P. 625 Torrington Electric Light Company
2. Amending the Charter 3/2/1899 Vol. XIII P. 13 of The Torrington Electric Light Company
3. Amending the Charter 6/22/1905 Vol. XIV P. 856 of The Torrington Electric Light Company
4. Authorizing The 5/1/1907 Vol. XV P. 111 Torrington Electric Light Company to Increase Its Capital Stock
5. Amending the Charter 4/9/1915 Vol. XVII P. 131 of The Torrington Electric Light Company
6. Amending the Charter 6/3/1921 Vol. XVIII P. 888 of The Torrington Electric Light Company
7. Amending the Charter 3/9/1923 Vol. XIX P. 28 of The Torrington Electric Light Company
8. Authorizing The 4/2/1925 Vol. XIX P. 632 Torrington Electric Light Company to Increase Its Capital Stock
9. Amending the Charter 6/9/1933 Vol. XXI P. 1145 of The Torrington Electric Light Company
18. The Union Electric Light and Power Company
1. Incorporating The 5/10/1901 Vol. XIII P. 794 Union Electric Light and Power Company
2. Amending the Charter 3/27/1907 Vol. XV P. 50 of The Union Electric Light and Power Company
3. Amending the Charter 5/7/1907 Vol. XV P. 131 of The Union Electric Light and Power Company
4. Amending the Charter 5/20/1909 Vol. XV P. 762 of The Union Electric Light and Power Company
5. Amending the Charter 6/6/1913 Vol. XVI P. 999 of The Union Electric Light and Power Company
6. Amending the Charter 3/9/1923 Vol. XIX P. 28 of The Union Electric Light and Power Company
7. Authorizing The Union 6/7/1927 Vol. XX P. 308 Electric Light and Power Company to Increase Its Capital Stock and Amending Its Charter
8. Validating the Filing 6/12/1929 Vol. XX P. 936 of Acceptance of an Act Amending the Charter of The Union Electric Light and Power Company
G - CONNECTICUT RAILWAY AND LIGHTING
COMPANY, FORMERLY THE GAS SUPPLY COMPANY
1. Incorporating The Gas 7/2/1895 Vol. XII P. 586 Supply Company
2. Amending the Charter 3/2/1899 Vol. XIII P. 17 of The Gas Supply Company
3. Amending the Charter 4/30/1901 Vol. XIII P. 752 of the Connecticut Railway and Lighting Company
4. Amending the Charter 3/18/1903 Vol. XIV P. 13 of the Connecticut Railway and Lighting Company
5. Amending the Charter 4/23/1903 Vol. XIV P. 103 of the Connecticut Railway and Lighting Company
6. Amending the Charter 4/29/1903 Vol. XIV P. 120 of the Connecticut Railway and Lighting Company
7. Amending the Charter 5/4/1903 Vol. XIV P. 135 of the Connecticut Railway and Lighting Company
8. Confirming the Right 5/15/1903 Vol. XIV P. 178
of the Connecticut
Railway and Lighting
Company to Construct
Its Railway Along
North Main Street in
Ansonia
9. Amending the Charter 3/16/1905 Vol. XIV P. 530
of the Connecticut
Railway and Lighting
Company
10. Amending the Charter 3/16/1905 Vol. XIV P. 530
of the Connecticut
Railway and Lighting
Company
11. Amending the Charter 5/2/1905 Vol. XIV P. 624
of the Connecticut
Railway and Lighting
Company
12. Amending the Charter 5/25/1905 Vol. XIV P. 703
of the Connecticut
Railway and Lighting
Company
13. Amending the Charter 7/31/1907 Vol. XV P. 571
of the Connecticut
Railway and Lighting
Company
14. Amending the Charter 8/10/1909 Vol. XV P. 1073
of the Connecticut
Railway and Lighting
Company
15. Amending the Charter 8/10/1909 Vol. XV P. 1073
of the Connecticut
Railway and Lighting
Company
16. Amending the Charter 8/13/1909 Vol. XV P. 1081
of the Connecticut
Railway and Lighting
Company
17. Extending the Time 8/13/1909 Vol. XV P. 1082
Within Which the
Connecticut Railway
and Lighting Company
May Construct Its Line
in Bridgeport and
Stratford
18. Amending the Charter 8/29/1911 Vol. XVI P. 496
of the Connecticut
Railway and Lighting
Company
19. Amending the Charter 6/5/1913 Vol. XVI P. 1224
of the Connecticut
Railway and Lighting
Company
20. Amending the Charter 5/14/1915 Vol. XVII P. 283
of the Connecticut
Railway and Lighting
Company
21. Amending the Charter 5/17/1917 Vol. XVII P. 1056
of the Connecticut
Railway and Lighting
Company
22. Amending the Charter 5/16/1917 Vol. XVII P. 1093
of the Connecticut
Railway and Lighting
Company
23. Amending the Charter 5/1/1919 Vol. XVIII P. 137
of the Connecticut
Railway and Lighting
Company
|
24. Amending the Charter 5/5/1927 Vol. XX P. 390 of the Connecticut Railway and Lighting Company
H - PREDECESSORS OF CONNECTICUT
RAILWAY AND LIGHTING COMPANY
1. The Norwalk and South Norwalk Electric Light Company
1. Incorporating The 4/20/1887 Vol. X P. 682 Norwalk and South Norwalk Electric Light Company
2. The Norwalk Gas Light Company
1. Incorporating The Passed Vol. III P. 580
Norwalk Gas Light 1856
Company
2. Amending the Charter 5/30/1866 Vol. VI P. 11
of The Norwalk Gas
Light Company
3. Amending the Charter 4/7/1887 Vol. X P. 613
of The Norwalk Gas
Light Company
|
3. The Greenwich Gas and Electric Lighting Company
1. Incorporating The 3/13/1885 Vol. X P. 34 Greenwich Gas and Electric Lighting Company
2. Validating the 4/20/1887 Vol. X P. 695 Organization of The Greenwich Gas and Electric Lighting Company
3. Amending the Charter 5/23/1889 Vol. X P. 1117 of The Greenwich Gas and Electric Lighting Company
4. Amending the Charter 5/31/1893 Vol. XI P. 604 of The Greenwich Gas and Electric Lighting Company
5. Authorizing The 4/24/1895 Vol. XII P. 201 Greenwich Gas and Electric Lighting Company to Maintain a Wharf and Construct Sea-walls
4. Naugatuck Electric Light Company
1. Incorporating the 4/16/1887 Vol. X P. 650 Naugatuck Electric Light Company
2. Validating the Charter 5/25/1893 Vol. XI P. 560 of the Naugatuck Electric Light Company
3. Authorizing the 5/25/1893 Vol. XI P. 561 Naugatuck Electric Light Company to Issue Bonds
4. Validating the Charter 3/26/1895 Vol. XII P. 67 and Amendments Thereto of the Naugatuck Electric Light Company
5. Authorizing the 3/2/1899 Vol. XIII P. 17 Naugatuck Electric Light Company to Issue Bonds
5. Central Railway and Electric Company
(formerly The New Britain Tramway Company)
1. Incorporating The New 2/24/1886 Vol. X P. 233 Britain Tramway Company
2. Amending the Charter 5/4/1887 Vol. X P. 721 of The New Britain Tramway Company
3. Amending the Charter 5/18/1887 Vol. X P. 745 of The New Britain Tramway Company
4. Amending the Charter 6/15/1893 Vol. XI P. 774 of The New Britain Tramway Company
5. Amending the Charter 6/28/1893 Vol. XI P. 893 of the Central Railway and Electric Company
6. Amending the Charter 3/1/1897 Vol. XII P. 683 of the Central Railway and Electric Company
6. New Britain Electric Light Company (formerly The New Britain Schuyler Electric Light Company)
1. Incorporating The New 4/27/1887 Vol. X P. 708 Britain Schuyler Electric Light Company
2. Changing the Name of 4/2/1889 Vol. X P. 906 The New Britain Schuyler Electric Light Company
7. Plainville Electric Light and Power Company
1. Incorporating the 5/31/1893 Vol. XI P. 602 Plainville Electric Light and Power Company
8. The Newington Tramway Company
1. Incorporating The 6/30/1893 Vol. XI P. 1035 Newington Tramway Company
2. Amending the Charter 3/1/1897 Vol. XII P. 686 of The Newington Tramway Company
9. The Norwalk Street Railway Company
(formerly the Norwalk Horse Railroad Company)
1. Incorporating the 6/28/1862 Vol. V P. 487 Norwalk Horse Railroad Company
2. Amending the Charter 6/24/1864 Vol. V P. 586 of the Norwalk Horse Railroad Company
3. Authorizing the 6/25/1869 Vol. VI P. 656
Norwalk Horse Railroad
Company to increase
its Capital Stock
4. Amending the Charter 6/21/1870 Vol. VI P. 828
of the Norwalk Horse
Railroad Company
5. Amending the Charter 7/27/1871 Vol. VII P. 146
of the Norwalk Horse
Railroad Company
6. Amending the Charter 7/30/1872 Vol. VII P. 380
of the Norwalk Horse
Railway Company
7. Amending the Charter 3/30/1886 Vol. X P. 330
of the Norwalk Horse
Railroad Company
8. Amending the Charter 6/30/1893 Vol. XI P. 1045
of the Norwalk Horse
Railroad Company
9. Amending the Charter 6/19/1895 Vol. XII P. 426
of The Norwalk Street
Railway Company
10. Amending the Charters 6/25/1895 Vol. XII P. 474
of The Norwalk Street
Railway Company and
The Norwalk Tramway
Company
11. Amending the Charter 5/25/1899 Vol. XIII P. 207
of The Norwalk Street
Railway Company
|
10. Bridgeport Traction Company
1. Formed by -- -- -- Consolidation of Bridgeport Railway Company, The Bridgeport Horse Railroad Company and East End Railway Company under General Laws on 7/20/1893
2. Amending the Charter 5/18/1897 Vol. XII P. 1036 of the Bridgeport Traction Company
3. Amending the Charter 6/1/1899 Vol. XIII P. 286 of the Bridgeport Traction Company
4. Amending the Charter 4/9/1901 Vol. XIII P. 678 of the Bridgeport Traction Company
11. Bridgeport Railway Company
1. Incorporating the 6/28/1893 Vol. XI P. 872 Bridgeport Railway Company
12. The Bridgeport Horse Railroad Company
1. Incorporating The 6/30/1864 Vol. V P. 607 Bridgeport Horse Railroad Company
2. Amending the Charter 6/6/1866 Vol. VI P. 28 of the Bridgeport Horse Railroad Company
3. Amending the Charter 2/24/1886 Vol. X P. 233 of the Bridgeport Horse Railroad Company
4. Amending the Charter 5/16/1889 Vol. X P. 1118 of the Bridgeport Horse Railroad Company
5. Authorizing the 5/25/1893 Vol. XI P. 575 Bridgeport Horse Railroad Company to Cross Steam Railroad at Grade
6. Amending the Charter 6/28/1893 Vol. XI P. 879 of the Bridgeport Horse Railroad Company
7. Amending the Charter 7/1/1893 Vol. XI P. 975 of the Bridgeport Horse Railroad Company
13. East End Railway Company (formerly The Bridgeport and West Stratford Horse Railroad Company)
1. Incorporating The 4/22/1885 Vol. X P. 168 Bridgeport and West Stratford Horse Railroad Company
2. Amending the Charter 3/2/1886 Vol. X P. 247 of the Bridgeport and West Stratford Horse Railroad Company
3. Amending the Charter 5/9/1889 Vol. X P. 1098 of the Bridgeport and West Stratford Horse Railroad Company and Changing Its Name
4. Amending the Charter 5/5/1893 Vol. XI P. 422 of The East End Railway Company
5. Amending the Charter 6/28/1893 Vol. XI P. 878 of The East End Railway Company
14. Milford Street Railway Company
1. Incorporating the 6/13/1895 Vol. XII P. 387 Milford Street Railway Company
2. Amending the Charter 3/24/1897 Vol. XII P. 788 of the Milford Street Railway Company
3. Amending the Charter 5/19/1899 Vol. XIII P. 298 of the Milford Street Railway Company
4. Amending the Charter 4/9/1901 Vol. XIII P. 678 of the Milford Street Railway Company
15. Southington and Plantsville Tramway Company
1. Incorporating the 4/16/1887 Vol. X P. 655 Southington and Plantsville Tramway Company
2. Amending the Charter 3/12/1889 Vol. X P. 827 of the Southington and Plantsville Tramway Company
3. Abating Taxes of The 5/9/1895 Vol. XII P. 290 Southington and Plantsville Tramway Company
4. Amending the Charter 4/7/1897 Vol. XII P. 862 of the Southington and Plantsville Tramway Company
16. The Waterbury Traction Company
(formerly Waterbury Horse Railroad Company)
1. Incorporating the 3/18/1884 Vol. IX P. 941 Waterbury Horse Railroad Company
2. Amending the Charter 2/24/1886 Vol. X P. 242 of the Waterbury Horse Railroad Company
3. Amending the Charter 6/14/1893 Vol. XI P. 724 and Changing the Name of the Waterbury Horse Railroad Company
4. Amending the Charter 6/27/1893 Vol. XI P. 868 of The Waterbury Traction Company
5. Amending the Charter 6/20/1895 Vol. XII P. 390 of The Waterbury Traction Company
6. Amending the Charter 5/12/1897 Vol. XII P. 1016 of The Waterbury Traction Company
17. The Connecticut Electric Company (formerly The Connecticut District Telegraph and Electric Company)
1. Incorporated on -- -- -- 11/26/1883 under General Laws
2. Incorporating The 4/13/1887 Vol. X P. 620 Connecticut Electric Company
18. The Norwalk Tramway Company
1. Incorporating The 5/6/1889 Vol. X P. 1067 Norwalk Tramway Company
2. Amending the Charter 6/29/1893 Vol. XI P. 971 of the Norwalk Tramway Company
3. Amending the Charters 6/25/1895 Vol. XII P. 474 of The Norwalk Street Railway Company and The Norwalk Tramway Company
4. Amending the Charter 7/3/1895 Vol. XII P. 600 of the Norwalk Tramway Company
5. Amending the Charter 6/2/1897 Vol. XII P. 1175 of the Norwalk Tramway Company
6. Amending the Charter 6/20/1899 Vol. XIII P. 480 of The Norwalk Tramway Company
7. Amending the Charter 4/24/1901 Vol. XIII P. 725 of The Norwalk Tramway Company
19. The Shelton Street Railway Company
1. Incorporating The 6/21/1893 Vol. XI P. 830 Shelton Street Railway Company
2. Extending the Time for 5/2/1895 Vol. XII P. 285 the Organization of The Shelton Street Railway Company, and for the Construction of Its Railway
3. Amending the Charter 3/1/1897 Vol. XII P. 684 of The Shelton Street Railway Company
4. Amending the Charter 5/23/1899 Vol. XIII P. 277 of the Shelton Street Railway Company
5. Amending the Charter 4/9/1901 Vol. XIII P. 678 of The Shelton Street Railway Company
6. Granting The Shelton 5/14/1901 Vol. XIII P. 824 Street Railway Company the Right to Build and Maintain a Dam Across Far Mill River
20. The Westport and Saugatuck Street Railway Company (formerly The Westport and Saugatuck Horse Railroad Company)
1. Authorizing and 6/8/1876 Vol. VIII P. 7 empowering the Westport and Saugatuck Horse Railroad Company to construct, operate, and maintain a Horse Railroad
2. Amending the Charter 7/6/1895 Vol. XII P. 622 of The Westport and Saugatuck Horse Railroad Company
3. Amending the Charter 7/6/1895 Vol. XII P. 621 of The Westport and Saugatuck Street Railway Company
4. Amending the Charter 6/2/1897 Vol. XII P. 1176 of the Westport and Saugatuck Street Railway Company
5. Amending the Charter 6/14/1899 Vol. XIII P. 350 of the Westport and Saugatuck Street Railway Company
6. Amending the Charter 4/9/1901 Vol. XIII P. 678 of The Westport and Saugatuck Street Railway Company
21. Derby Street Railway Company
(formerly The Derby Horse Railway Company)
1. Incorporating The 3/19/1885 Vol. X P. 55 Derby Horse Railway Company
2. Amending the Charter 3/16/1887 Vol. X P. 501 of The Derby Horse Railway Company
3. Amending the Charter 6/21/1889 Vol. X P. 1331 of the Derby Horse Railway Company
4. Amending the Charter 6/30/1893 Vol. XI P. 1061
of The Derby Street
Railway Company
5. Extending the Time for 3/31/1897 Vol. XII P. 824
the Construction of
the Road of The Derby
Street Railway Company
6. Amending the Charter 3/15/1899 Vol. XIII P. 36 of the Derby Street Railway Company
7. Amending the Charter 4/11/1901 Vol. XIII P. 687 of the Derby Street Railway Company and Extending Time for Construction of Tracks
22. Derby and Ansonia Street Railway Company (formerly The Birmingham and Ansonia Horse Railroad Company)
1. Incorporating the 6/27/1876 Vol. VIII P. 49 Birmingham and Ansonia Horse Railroad Company
2. Authorizing The 4/5/1887 Vol. X P. 590 Birmingham and Ansonia Horse Railroad Company to Issue Bonds
3. Amending the Charter 6/30/1893 Vol. XI P. 1058 and Changing the Name of The Birmingham and Ansonia Horse Railroad Company
23. Thomaston and Watertown Electric Railway Company
1. Incorporating the 4/30/1901 Vol. XIII P. 741 Thomaston and Watertown Electric Railway Company
2. Extending the Time for 6/3/1903 Vol. XIV P. 280 Organizing The Norwalk, Bridgeport, and Bethel Traction Company and the Thomaston and Watertown Electric Railway Company
3. Extending the Time for 4/19/1905 Vol. XIV P. 612 Organizing The Thomaston and Watertown Electric Railway Company and for Building Its Lines
4. Amending the Charter 7/31/1907 Vol. XV P. 577 of The Thomaston and Watertown Electric Railway Company
24. The Thomaston Tramway Company
1. Incorporating The 7/18/1905 Vol. XIV P. 1077 Thomaston Tramway Company
2. Amending the Charter 7/17/1907 Vol. XV P. 399 of The Thomaston Tramway Company
25. Cheshire Street Railway Company
1. Incorporating the 6/17/1901 Vol. XIII P. 1181 Cheshire Street Railway Company
2. Amending the Charter 4/23/1903 Vol. XIV P. 104 of the Cheshire Street Railway Company
3. Extending the Time 3/16/1905 Vol. XIV P. 530 Within Which the Cheshire Street Railway Company May Build Its Lines of Street Railway
4. Extending the Time 7/25/1907 Vol. XV P. 404 Within Which the Cheshire Street Railway Company May Construct Its Tracks
26. The Naugatuck Valley Electric Railway Company
1. Incorporating The 3/25/1903 Vol. XIV P. 26 Naugatuck Valley Electric Railway Company
2. Extending the Time 4/17/1907 Vol. XV P. 92 Within Which The Naugatuck Valley Electric Railway Company May Construct Its Tracks
27. The Meriden, Southington and Compounce Tramway Company
1. Incorporating The 4/7/1897 Vol. XII P. 863 Meriden, Southington, and Compounce Tramway Company
2. Amending the Charter 6/6/1899 Vol. XIII P. 386 of The Meriden, Southington, and Compounce Tramway Company
3. Amending the Charter 6/17/1901 Vol. XIII P. 1217 of The Meriden, Southington, and Compounce Tramway Company
4. Amending the Charter 6/22/1903 Vol. XIV P. 471 of The Meriden, Southington, and Compounce Tramway Company
5. Amending the Charter 7/18/1905 Vol. XIV P. 1088 of The Meriden, Southington, and Compounce Tramway Company and Extending the Time Within Which Said Company May Construct Its Tracks
Exhibit 3.2.2
BY-LAWS
THE CONNECTICUT LIGHT AND POWER COMPANY
Amended
January 18, 1961
April 15, 1964
July 1, 1966
March 1, 1982
THE CONNECTICUT LIGHT AND POWER COMPANY
BY-LAWS
ARTICLE I
MEETINGS OF SHAREHOLDERS
Section 1. Meetings of the shareholders may be held at any place in the State of Connecticut fixed by the Board of Directors.
Section 2. The Annual Meeting of Shareholders for the election of Directors and the transaction of such other business as may properly be brought before the meeting shall be held in March, April, May, June or July in each year on the day and at the hour designated by the Board of Directors.
Section 3. Notice of all meetings of shareholders, stating the day, hour and place thereof, shall be given by a written or printed notice, delivered or sent by mail, at least ten days but not more than fifty days prior to the meeting, to each shareholder of record on the books of the Company and entitled to vote at such meeting, at the address appearing on such books, unless such shareholder shall waive notice or be in attendance at the meeting. Notice of a special meeting of shareholders shall state also the general purpose or purposes of such meeting and no business other than that of which notice has been so given shall be transacted at such meeting.
Section 4. At all meetings of shareholders each share of stock entitled to vote, and represented in person or by proxy, shall be entitled to one vote.
Section 5. The Board of Directors may fix a date as the record date for the purpose of determining shareholders entitled to notice of and to vote at any meeting of shareholders or any adjournment thereof, such date in any case to be not earlier than the date such action is taken by the Board of Directors and not more than seventy days and not less than ten days immediately preceding the date of such meeting. In such case only such shareholders or their legal representatives as shall be shareholders on the record date so fixed shall be entitled to such notice and to vote at such meeting or any adjournment thereof, notwithstanding the transfer of any shares of stock on the books of the Company after any such record date so fixed.
ARTICLE II
DIRECTORS
Section 1. The business, property and affairs of the Company shall be managed by a Board of not less than three nor more than sixteen Directors. Within these limits, the number of positions on the Board of Directors for any year shall be the number fixed by resolution of the shareholders or of the Board of Directors, or, in the absence of such a resolution, shall be the number of Directors elected at the preceding Annual Meeting of Shareholders. The Directors so elected shall continue in office until their successors have been elected and qualified.
Section 2. The Board of Directors shall have power to fill vacancies that may occur in the Board, or any other office, by death, resignation or otherwise, by a majority vote of the remaining members of the Board, and the person so chosen shall hold the office until the next Annual Meeting and until his successor shall be elected and qualified.
Section 3. The Board of Directors shall have power to employ such and so many agents and factors or employees as the interests of the Company may require, and to fix the compensation and define the duties of all of the officers, agents, factors and employees of the Company. All the officers, agents, factors and employees of the Company shall be subject to the order of said Board, shall hold their offices at the pleasure of said Board, and may be removed at any time by said Board at its discretion.
Section 4. The Board of Directors shall have power to fix from time to time the compensation of the Directors and the method of payment thereof.
ARTICLE III
MEETINGS OF DIRECTORS
Section 1. A regular meeting of the Board of Directors shall, if a quorum is present, be held without notice immediately after the adjournment of the Annual Meeting of stockholders, or as soon thereafter as convenient, for the purpose of organization. At such organization meeting or at any subsequent meeting, the Directors shall elect the officers of the Company provided for in Article IV of these By-Laws, who shall hold their offices (subject to the provisions of Section 3, Article II, of these By-Laws) for the ensuing year, or until the next such organization meeting and until their successors are chosen and qualified.
Section 2. All other regular meetings of the Board of Directors may be held at such time and place within or without the State of Connecticut as said Board may determine.
Section 3. Special meetings of the Board of Directors may be held at any place within or without the State of Connecticut upon call by the Chairman or, if the Chairman shall be absent or unable to perform the duties of his office, the President, or by the Secretary upon written request of five or more Directors.
Section 4. Oral, written or printed notice of a special meeting of the Board of Directors shall be given to each Director personally, or by telephone, mail or telegraph, at least two days prior to the meeting unless each Director shall, in writing or by telegraph, waive such notice or be in attendance at such meeting.
Section 5. One-third of the directorships as fixed in accordance with Article II, Section 1 of these By-Laws shall constitute a quorum, except that no quorum shall consist of less than two Directors. A less number than a quorum may adjourn from time to time until a quorum is present. In the event of such an adjournment, notice of the adjourned meeting shall be given to all Directors.
Section 6. Except as otherwise provided by these By-Laws, all questions shall be decided by vote of a majority of the Directors present at any meeting of the Board at which a quorum is present. The yeas and nays on any question shall be taken and recorded on the minutes at the request of any Directors.
ARTICLE IV
OFFICERS
Section 1. The officers of this Company shall consist of a President, one or more Vice Presidents, a Secretary, a Treasurer, and, at the discretion of the Board of Directors, a Chairman, and the Board of Directors may elect one or more Assistant Secretaries, one or more Assistant Treasurers, and such other officers as they may deem advisable. The President and Chairman shall be Directors.
Section 2. The same person shall not hold the offices of both President and Secretary and no officer shall execute, acknowledge or verify any instrument in more than one capacity.
Section 3. The officers of the Company shall be elected by the Board of Directors as provided in Section 1, Article III of these By-Laws.
ARTICLE V
CHAIRMAN AND PRESIDENT
Section 1. The Chairman, if such office shall be filled by the Directors, shall, when present, preside at all meetings of said Board and of the stockholders. He shall have such other authority and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors.
Section 2. The President shall be the chief executive officer of the Company and shall be responsible for the general supervision, direction and control of the business and affairs of the Company. If the Chairman shall be absent or unable to perform the duties of his office, or if the office of Chairman shall not have been filled by the Directors, the President shall preside at meetings of the Board of Directors and of the stockholders. He shall have such other authority and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors.
ARTICLE VI
VICE PRESIDENTS
Section 1. The Vice Presidents shall have such powers and duties as may be assigned to them from time to time by the Board of Directors or the President. One of such Vice Presidents may be designated by said Board as Executive Vice President and, if so designated, shall exercise the powers and perform the duties of the President in the absence of the President or if the President is unable to perform the duties of his office. The Board of Directors may also designate one or more of such Vice Presidents as Senior Vice Presidents.
ARTICLE VII
SECRETARY
Section 1. The Secretary shall keep the minutes of all meetings of the stockholders and of the Board of Directors. He shall give notice of all meetings of the stockholders and of said Board. He shall record all votes taken at such meetings. He shall be custodian of all contracts, leases, assignments, deeds and other instruments in writing and documents not properly belonging to the office of the Treasurer, and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors, the Chairman, the President or by law.
Section 2. He shall have the custody of the Corporate Seal of the Company and shall affix the same to all instruments requiring a seal except as otherwise provided in these By-Laws.
ARTICLE VIII
ASSISTANT SECRETARY
Section 1. An Assistant Secretary shall perform the duties of the Secretary if the Secretary shall be absent or unable to perform the duties of his office. An Assistant Secretary shall perform such additional duties as may be assigned to him from time to time by the Board of Directors, the Chairman, the President or the Secretary.
ARTICLE IX
TREASURER
Section 1. The Treasurer shall have charge of all receipts and disbursements of the Company, and shall be the custodian of the Company's funds. He shall have full authority to receive and give receipts for all moneys due and payable to the Company from any source whatever, and give full discharge for the same, and to endorse checks, drafts and warrants in its name and on its behalf. He shall sign all checks, notes, drafts and similar instruments, except as otherwise provided for by the Board of Directors.
Section 2. He shall perform such additional duties as may be assigned to him from time to time by the Board of Directors, the Chairman, the President or by law.
ARTICLE X
ASSISTANT TREASURER
Section 1. An Assistant Treasurer shall perform the duties of the Treasurer if the Treasurer shall be absent or unable to perform the duties of his office. An Assistant Treasurer shall perform such additional duties as may be assigned to him from time to time by the Board of Directors, the Chairman, the President or the Treasurer.
ARTICLE XI
COMMITTEES
Section 1. The Board of Directors, by the affirmative vote of Directors holding a majority of the number of directorships (as fixed for the current year in accordance with Article II, Section 1, of these By-Laws), may appoint such committees as it may deem proper, and may delegate to such committees any of the powers possessed by said Board. A majority of any committee shall have the power to act. Committees shall keep full records of their proceedings, and shall report the same to the next regular meeting of said Board, or when called upon by said Board.
ARTICLE XII
INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHER PERSONS
Section 1. The Board of Directors may, as and to the extent permitted by law, indemnify and reimburse each Director, officer or employee of this Company, and any person engaged to perform services for this Company as an independent contractor, and the heirs, executors or administrators of any such Director, officer, employee or independent contractor, for expenses, including attorneys' fees, and such amount of any judgment, money decree, fine, penalty or settlement for which he may become liable as the Board of Directors deems reasonable, incurred by him in connection with the defense or reasonable settlement of any action, suit or proceeding in which he is made a party by reason of his being, or having been, a Director, officer or employee of this Company, or such an independent contractor.
ARTICLE XIII
STOCK CERTIFICATES
Section 1. All stock certificates, Common and Preferred, may bear the facsimile signatures of the President or a Vice President and the Treasurer or an Assistant Treasurer and a facsimile seal of the Company, or may be signed by the President or a Vice President and the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary, and may be sealed by any one of such officers.
ARTICLE XIV
CORPORATE SEAL
Section 1. The Corporate Seal of the Company shall be circular in form, with the name of the Company inscribed thereon.
ARTICLE XV
AMENDMENTS
Section 1. These By-Laws may be altered, amended, added to or
repealed at any meeting of stockholders, or of the Board of Directors,
provided the notice of such meeting states that such action is to be
proposed. Such action by the stockholders shall require the affirmative
vote of the holders of a majority of the voting power of shares entitled to
vote thereon. Such action by the Board of Directors shall require the
affirmative vote of Directors holding a majority of the number of
directorships (as fixed for the current year in accordance with Article II,
Section 1 of these By-Laws). This Section 1 of Article XV may be amended
only at a meeting of stockholders.
Exhibit 3.3.1
Public Service Company of New Hampshire
Organized Under the Laws of New Hampshire
August, 1926
ARTICLES OF INCORPORATION
As in effect May 16, 1991
AMENDED ARTICLES OF INCORPORATION OF
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
ARTICLE I
NAME OF CORPORATION
The name of this corporation shall be PUBLIC SERVICE COMPANY OF NEW
HAMPSHIRE.
ARTICLE II
CORPORATE POWERS
The objects for which this corporation is established are to carry on the business of an electric utility within the state of New Hampshire or elsewhere, and to transact any and all lawful business for which corporations may be incorporated under New Hampshire Revised Statutes Annotated Chapter 293-A.
ARTICLE III
PRINCIPAL PLACE OF BUSINESS
The principal place of business of the corporation shall be located in Manchester in the County of Hillsborough and State of New Hampshire, but the corporation may carry on any portion of its business at other places, either within or without the State of New Hampshire.
ARTICLE IV
AMOUNT AND CLASSES OF THE AUTHORIZED STOCK
1. The capital stock of the corporation shall consist of two classes designated, respectively, "Preferred Stock" and "Common Stock." The total number of authorized shares shall be twenty-five million (25,000,000) shares of Preferred Stock, $25.00 par value, and one hundred million (100,000,000) shares of Common Stock, Sl par value.
2. No nonvoting equity securities of the corporation shall be issued;
this provision is included in these Amended and Restated Articles of
Incorporation in compliance with Section 1123 of the United States Federal
Bankruptcy Code, 11 U.S.C. Section 1123, and shall have no further force
and effect beyond that required by such Section and for so long as such
Section is in effect and applicable to the corporation.
ARTICLE V
ISSUANCE AND TERMS OF THE PREFERRED STOCK
lA. Shares of the Preferred Stock, authorized but not issued, may be issued from time to time in one or more series, in such amounts, on such terms, for such consideration and to such persons as may be determined by the Board of Directors at the time of its vote to issue such series, in its discretion; provided that all shares of the Preferred Stock shall be identical, except in the case of the following relative rights and preferences, as to which there may be variations between series of the Preferred Stock: (a) the rate of dividend, including the extent to which all or any portion of any dividend may be paid in additional shares of Preferred Stock in lieu of cash; (b) the prices, terms and conditions of redemption; (c) the amount payable upon shares in event of voluntary liquidation; (d) sinking fund provisions, if any, for the redemption or purchase of shares; and (e) the terms and conditions, if any, on which shares may be converted.
lB. In order for the Board of Directors to establish a series of the Preferred Stock, the Board of Directors shall adopt a resolution setting forth the number of shares and designation of such series of the Preferred Stock and fixing and determining the relative rights and preferences of such series; and upon the filing by the Secretary of State of the State of New Hampshire of the statement required by the New Hampshire Business Corporation Act, the resolution shall become effective and shall constitute an amendment of these Articles of Incorporation.
DIVIDENDS
2A. The holders of any series of the Preferred Stock shall receive, when declared by the Board of Directors, preferential dividends at such rate and payable on such dividend payment dates in each year as said Board may determine at the time of its vote to issue said series, such dividends to be payable out of funds legally available therefor to the Preferred Stockholders of record on such dates as may be fixed by said Board, provided, however, that dividends shall not be declared and set apart for payment, or paid, on the Preferred Stock of any one series, for any dividend period, unless like proportionate dividends, ratably in proportion to the respective dividend rates, have been or are contemporaneously declared and set apart for payment, or paid, on the Preferred Stock of all series for all dividend periods terminating on the same or an earlier date.
2B. Dividends on the shares of each series of the Preferred Stock shall be cumulative from the date of original issue of such series or from such other date as the Board of Directors may determine at the time of its vote to issue the shares of such series .
2C. Unless full cumulative dividends to the last preceding dividend payment date shall have been declared and paid or set apart for payment on all outstanding shares of the Preferred Stock, all mandatory redemption payments then due in respect of all outstanding shares of the Preferred Stock shall have been made or funds for the payment thereof set apart and no event of default (as hereinafter defined) has occurred and is continuing, no junior stock payment (as hereinafter defined) shall be paid on any junior stock. The term "junior stock" as used in these Articles means Common Stock and any other stock of the corporation subordinate to the Preferred Stock in respect of dividends or payment in case of liquidation.
2D. So long as any shares of the Preferred Stock are outstanding, the corporation shall not declare any dividends or make any other distributions in respect of outstanding shares of any junior stock, other than dividends or distributions in shares of junior stock, or purchase or otherwise acquire for value any outstanding shares of junior stock (the declaration of any such dividend or the making of any such distribution (other than dividends or distributions in shares of junior stock), purchase or acquisition being herein called a "junior stock payment") in contravention of the following:
(a) If and so long as the junior stock equity (hereinafter defined), adjusted to reflect the proposed junior stock payment, at the end of the calendar month immediately preceding the calendar month in which the proposed junior stock payment is to be made is less than 20% of total capitalization (hereinafter defined) at that date, the corporation shall not make such junior stock payment in an amount which, together with all other junior stock payments made within the year ending with and including the date on which the proposed junior stock payment is to be made, exceeds 50% of the net income of the corporation available for dividends on junior stock for the 12 full calendar months immediately preceding the calendar month in which such junior stock payment is to be made, except in an amount not exceeding the aggregate of junior stock payments which under the restrictions set forth above in this subsection (a) could have been, and have not been, made.
(b) If and so long as the junior stock equity, adjusted to reflect the proposed junior stock payment, at the end of the calendar month immediately preceding the calendar month in which the proposed junior stock payment is to be made is less than 25% but not less than 20% of the total capitalization at that date, the corporation shall not make such junior stock payment in an amount which, together with all other junior stock payments made within the year ending with and including the date on which the proposed junior stock payment is to be made, exceeds 75% of the net income of the corporation available .or dividends on the junior stock for the 12 full calendar months immediately preceding the calendar month in which such junior stock payment is to be made, except in an amount not exceeding the aggregate of junior stock payments which under the restrictions set forth above in this subsection (b) could have been, and have not been, made.
2E. The term "junior stock equity" as used in these Articles means the aggregate of the par value of, or stated capital represented by, the outstanding shares of junior stock, all earned surplus, capital or paid-in surplus, and any premiums on the junior stock then carried on the books of the corporation, less:
(a) the excess, if any, of the aggregate amount payable on involuntary liquidation of the corporation upon all outstanding shares of the Preferred Stock over the sum of (i) the aggregate par or stated value of such shares and (ii) any premiums thereon;
(b) any amounts on the books of the corporation known, or estimated if not known, to represent the excess, if any, of recorded value over original cost of used or useful utility plant, and
(c) any intangible items set forth on the asset side of the balance sheet of the corporation as a result of accounting convention, such as unamortized debt discount and expense; provided, however, that no deductions shall be required to be made in respect of items referred to in subsections (b) and (c) of this subdivision 2E in cases in which such items are being amortized or are provided for, or are being provided for, by reserves, including, without limitation, the acquisition premium of approximately eight hundred million dollars ($800,000,000) which the corporation is permitted to recover through rates under the agreement dated as of November 22, 1989, as amended, between Northeast Utilities Service Company ("NUSCO"), a Connecticut corporation, on behalf of its parent, Northeast Utilities ("NU"), an unincorporated voluntary business association organized under the laws of the Commonwealth of Massachusetts, and the Governor and Attorney General of New Hampshire, acting on behalf of the State of New Hampshire.
F. The term "total capitalization" as used in these Articles means the aggregate of:
(a) the principal amount of all outstanding indebtedness for borrowed money of the corporation maturing more than 12 months after the date of issue thereof, and
(b) the par value or stated capital represented by, and any premiums carried on the books of the corporation in respect of, the outstanding shares of all classes of the capital stock of the corporation, earned surplus, and capital or paid-in surplus, less any amounts required to be deducted pursuant to subsections (b) and (c) of subdivision 2E above in the determination of junior stock equity.
REDEMPTION OR PURCHASE OF THE PREFERRED STOCK
3A. Except as otherwise provided with respect to a particular series of the Preferred Stock, all or any part of any series of the Preferred Stock at any time outstanding may be called by vote of the Board of Directors for redemption at any time and in the manner herein below provided. If less than all of any series of the Preferred Stock is so called, the Transfer Agent shall determine by lot, or in some other proper manner approved by the Board of Directors, the shares of such series of the Preferred Stock to be called.
3B. No call for redemption of less than all of the Preferred Stock outstanding shall be made if the corporation shall be in arrears with respect to payment of dividends on or mandatory redemption of or an event of default (as hereinafter defined) shall exist with respect to any shares of the Preferred Stock outstanding.
3C. Subject to the provisions of subdivision 3B, all or any part of any series of the Preferred Stock may be called for redemption without calling any part or all of any other series of the Preferred Stock.
3D. Except as otherwise provided with respect to a particular series of the Preferred Stock, the sums payable in respect of any of the Preferred Stock so called shall be payable out of funds legally available therefor at the office of an incorporated bank or trust company in good standing selected by the corporation. Notice of such call, stating the redemption date and the place where the stock so called is payable, shall be sent by first class mail, postage prepaid, not fewer than 30 nor more than 50 days prior to the redemption date to the holders of stock so called at their respective addresses as they appear upon the books of the corporation.
3E. Except as otherwise provided with respect to a particular series of the Preferred Stock, the corporation shall, on or before the redemption date, deposit with said bank or trust company all sums payable with respect to the Preferred Stock so called. After such mailing and deposit the holders of the Preferred Stock so called for redemption shall cease to have any right to future dividends or other rights or privileges as stockholders in respect of such stock and shall be entitled only to the payment on the redemption date of the sums so deposited with said bank or trust company for their respective accounts. Stock so redeemed may be reissued but only subject to the limitations imposed by this Article V upon the issue of the Preferred Stock.
3F. The corporation may at any time purchase all or any of the then outstanding shares of the Preferred Stock of any series upon the best terms reasonably obtainable, except that no such purchase shall be made if the corporation shall be in arrears with respect to the declaration and payment of dividends on or mandatory redemption of any shares of the Preferred Stock outstanding or if there shall exist an event of default as defined in subdivision 5B of this Article V.
AMOUNTS PAYABLE ON LIQUIDATION
4. The holders of any series of the Preferred Stock shall receive upon any voluntary liquidation, dissolution or winding up of the corporation the then current redemption price of such series and if such action is involuntary $25 per share plus in each case all dividends accrued and unpaid (whether or not such dividends have been declared) to the date of such payment, before any payment in liquidation is made on any junior stock. If the net assets of the corporation shall be insufficient to pay said amounts in full, then the entire amount of such net assets shall be distributed among the holders of the Preferred Stock, who shall receive a common percentage of the full respective preferential amounts.
VOTING POWERS
5A. Except as provided in this Article V and as provided by law, the holders of the Preferred Stock shall have no voting power or right to notice of any meeting.
5B. Whenever dividends on any share of the Preferred Stock shall be in arrears in an amount equal to or exceeding full dividends for one year thereon, or whenever all mandatory redemption payments then due in respect of all outstanding shares of the Preferred Stock shall not have been declared and paid when due, or whenever there shall have occurred some default in the observance of any of the provisions of this Article V, or some default on which action has been taken by the bondholders or the trustee of any indenture of mortgage or deed of trust of the corporation, or whenever the corporation shall have been declared bankrupt or a receiver of its property shall have been appointed (said conditions being herein called "events of default"), then the holders of the Preferred Stock shall be given notice of all stockholders' meetings and shall have the right voting together as a class to elect the smallest number of additional directors necessary to constitute a majority of the Board of Directors of the corporation and the exclusive right voting together as a class to amend the By-Laws to make such appropriate increase in the number of directorships as may be required to effect such election. When all such arrears of dividends shall have been paid and such events of default shall no longer be continuing, all the rights and powers of the holders of the Preferred Stock to receive notice and to vote shall cease, subject to being again revived on any subsequent event of default.
5C. Whenever the right to elect directors shall have accrued to the holders of the Preferred Stock, the corporation shall call a meeting for the election of directors and, if necessary, the amendment of the By-Laws to permit the holders of the Preferred Stock to exercise their rights pursuant to subdivision 5B above, such meeting to be held not less than 45 days and not more than 90 days after the accrual of such rights. When such rights shall cease, then forthwith the terms of the directors who were elected by the holders of the Preferred Stock shall terminate and the number of directors constituting the Board of Directors of the corporation shall be reduced by the number of directors whose terms shall have so terminated.
ACTION REQUIRING CERTAIN CONSENT OF
PREFERRED STOCKHOLDERS
6A. Except with the consent of the holders of at least two- thirds (2/3) of the Preferred Stock at the time outstanding, given by vote at a meeting duly called and held for the purpose, or given in such other manner as may be authorized by law, the corporation shall not (a) authorize, create or issue any class of capital stock having a priority over the Preferred Stock in respect of the payment of dividends or payments in case of liquidation, dissolution or winding up of the corporation, (b) increase the rights and preferences or number of authorized shares of any such prior ranking stock, or (c) issue any shares of any such prior ranking stock more than 12 months after the date of such authorization.
6B. Except with the consent of the holders of at least two- thirds (2/3) of the Preferred Stock at the time outstanding, or at least two-thirds (2/3) of the series of the Preferred Stock affected if only one such series is affected, given by vote at a meeting duly called and held for the purpose, or, given in such other manner as may be authorized by law, the corporation shall not amend, alter, or repeal any of the rights, preferences or powers of the holders of the Preferred Stock so as to affect adversely any such rights, preferences or powers; provided, however, that no reduction of the dividend rate, redemption price, or the amount to be paid on liquidation, dissolution or winding up with respect to any share of the Preferred Stock may be made without the consent of the holder thereof and no such reduction with respect to the shares of any particular series of the Preferred Stock shall be made without the consent of all the holders of shares of such series.
6C. Except with the consent of the holders of a majority of the shares of the Preferred Stock at the time outstanding, given in writing or by vote at a meeting duly called and held for the purpose, the corporation shall not issue, sell or otherwise dispose of authorized but unissued shares of the Preferred Stock (except at a time when no shares of Preferred Stock are outstanding) or any other stock ranking on a parity with the Preferred Stock in respect of dividends or payment in case of liquidation, dissolution or winding up of the corporation, or reissue, sell or otherwise dispose of any reacquired shares of the Preferred Stock or such other stock, other than (a) to refinance an equal par value or stated value of the Preferred Stock or of stock at the time outstandinq ranking prior to or on a parity with the Preferred Stock in respect of dividends or payment in case of liquidation, dissolution or winding up of the corporation or (b) Preferred Stock issued as dividends on outstanding shares of Preferred Stock the terms of which expressly permit or require the corporation to pay such dividends in additional shares of Preferred Stock, at any time prior to May 16, 1992, nor at any time thereafter:
1. unless, for a period of 12 consecutive calendar months within the 15 conseCutive calendar months immediately preceding the calendar month in which any such shares shall be issued (but in no event including any month prior to May 16, 1391), the Income before Interest Charges of the corporation for said 12-month period available for the payment of interest, determined in accordance with the systems of accounts then prescribed for the corporation by the State of New Hampshire Public Utilities Commission (or by such other official body as may then have authority to prescribe such systems of accounts), but in any event after deducting taxes including taxes based on income and the amount charged by the corporation on its books to depreciation expense, (including, in any case in which such stock is to be issued, sold or otherwise disposed of in connection with the acquisition of any property (including property directly or indirectly acquired or disposed of by the corporation, whether consisting of stock or other ownership interests, partnership participation or otherwise), the Income before Interest Charges of the property to be so acquired, computed as nearly as practicable in the manner specified above) is at least one and one-half (1 1/2) times the sum of (a) the interest charges for one year on all indebtedness which shall then be outstanding (includinq any indebtedness proposed to be created in connection with the issue, sale or other disposition of such shares, but not including any indebtedness proposed to be retired in connection with such issue, sale or other disposition or indebtedness held by or for the account of the corporation), calculated, in the case of floating rate indebtedness, as if the rate in effect on the date of the computation is the applicable rate for the entire period, and (b) such annual rental charges as shall not be deducted in such determination of Income before Interest Charges and (c) an amount equal to all annual dividend requirements on all outstanding shares of the Preferred Stock and all other stock, if any, ranking on a parity with or having priority over the Preferred Stock as to dividends or payments in case of liquidation, dissolution or winding up of the corporation, including the shares proposed to be issued, but not including any shares proposed to be retired in connection with such issue, sale or other disposition; or
2. if such issue, sale or disposition would bring the aggregate of the amount payable in connection with an involuntary liquidation of the corporation with respect to all shares of the Preferred Stock and all shares of stock, if any, ranking on a parity with or having priority over the Preferred Stock as to dividends or payments in case of liquidation, dissolution or winding up of the corporation to an amount in excess of the sum of the junior stock equity. If for the purposes of meeting the requirements of this clause 2, it shall have been necessary to take into consideration any earned surplus of the corporation, the corporation shall not thereafter pay any dividends on or make any distributions in respect of, or make any payment for the purchase or other acquisition of, junior stock which would result in reducing the junior stock equity to an amount less than the amount payable on involuntary liquidation of the corporation with respect to the Preferred Stock and all shares ranking on a parity with or having a priority over the Preferred Stock in respect of dividends or payments in case of liquidation, dissolution or winding up of the corporation at the time outstanding.
If during the period for which Income before Interest Charges is to be determined for the purpose set forth in this subdivision 6C the amount, if any, required to be expended by the corporation during such period for property additions pursuant to a renewal and replacement fund or similar fund established under any indenture of mortgage or deed of trust of the corporation shall exceed the amount deducted during such period in the determination of such Income before Interest Charges on account of depreciation and amortization of electric plant acquisition adjustments (including for this purpose any amount deducted on account of the acquisition premium referred to in subdivision 2E of this Article V), such excess shall also be deducted in determining such Income before Interest Charges.
6D. No share of the Preferred Stock shall be deemed to be "outstanding" within the meaning of this subdivision 6 or of subdivision 7, if, (a) such share is held by the corporation or an affiliate of the corporation or (b) at or prior to the time when the consent or approval herein or therein referred to would otherwise be required, provision shall be made for its redemption, including a deposit complying with the requirements of subdivision 3E.
MERGER, CONSOLIDATION OR SALE OF ALL ASSETS
7. The provisions of this Paragraph 7 shall become effective as of the date of the merger (the "Merger") of Northeast Utilities AcquisitiOn Corp. ("NUAC"), a New Hampshire Corporation, with and into the corporation pursuant to the joint plan (the "Joint Plan") for the reorganization of the corporation filed by NUSCO on behalf of its parent and by others in Bankruptcy Case No. BK88-00043 in the United States Bankruptcy Court for the District of New Hampshire and confirmed by the Court by order dated April 20, 1990 (the "Confirmation Order"). Except with the consent of the holders of a majority of the Preferred Stock at the time outstanding, given in writing or by vote at a meeting duly called and held for the purpose, the corporation shall not merge or consolidate with or into any other corporation or sell or otherwise dispose of all or substantially all of its assets (except by mortgage or pledge) (collectively, a "Transfer") unless such Transfer or other disposition, or the issuance or assumption of securities in the effectuation thereof shall have been ordered, approved or permitted under the Public Utility Holding Company Act of 1935; provided, however, that no such consent shall be required (i) for the Merger, (ii) for the transfer of the corporation's "interest in the Seabrook project," including, without limitation, its interest in Seabrook Unit No. 1, certain nuclear fuel and the balance of the Seabrook site, to North Atlantic Energy Corporation pursuant to the Joint Plan, or (iii) for any transfer of the corporation's New Hampshire Yankee Division and/or the assets, liabilities and employees of the New Hampshire Yankee Division pursuant to the Joint Plan.
NO PREEMPTIVE RIGHT
8. The holders of the Preferred Stock shall have no preemptive right to subscribe to any future issue of additional shares of the Common Stock or the Preferred Stock or of any other class of stock (preferred or otherwise) now or hereafter authorized, nor for any future issue of bonds, notes or other evidence of indebtedness convertible into stock or other securities exchangeable for stock.
TRANSFER AGENT
9. The corporation shall always have at least one Transfer Agent for the Preferred Stock, which may be the corporation or an affiliate of the corporation.
TERMS OF 10.60% CUMULATIVE PREFERRED STOCK, SERIES A
10A. There shall be established a series of the corporation's Preferred Stock designated as "10.60% Cumulative Preferred Stock, Series A,~ consisting of 5,000,000 shares.
10B. The special relative rights and preferences of the 10.60% Cumulative Preferred Stock, Series A, shall be as set forth below:
(1) Cumulative dividends shall be payable on shares of 10.60% Cumulative Preferred Stock, Series A, at the rate of 10.60% per annum, payable quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing on June 30, 1991.
(2) Except to the extent that it may be prevented from doing so by law or by the terms of any agreement, contract. mortgage, Indenture or, by the terms of the corporation's Amended Axticles of Incorporation or any other instrument to which the corporation is a party, the corporation shall, on June 30, 1997 and on each June 30 thereafter, redeem 1,000,000 shares of 10.60% Cumulative Preferred Stock, Series A (or all of such shares outstanding, if there are fewer than 1,000,000 -shares outstanding), at a sinking fund redemption price equal to $25.00 per share. together with accrued but unpaid dividends thereon to-the date fixed for redemption (the failure by the corporation to so redeem such shares, regardless of whether it is prevented from doing so for any of the reasons enumerated above, shall constitute an "event of default" under Article V, subdivision 5B of the corporation's Amended Articles of Incorporation). The obligation of the corporation to redeem shares of 10.60% Cumulative Preferred Stock, Series A. pursuant to this paragraph shall be cumulative.
(3) The 10.60% cumulative Preferred Stock, Series A, shall not be subject to optional redemption by the corporation.
Except as specially provided for above, the 5,000,000 shares of the corporation's 10.60~ Cumulative Preferred Stock Series A, shall constitute part of and have the general terms, limitations and relative rights and preferences of the corporation~s Preferred Stock.
ARTICLE VI
DIRECTORS
1. The property and affairs of the corporation shall be managed, subject to the applicable terms of the Confirmation order, these Articles of Incorporation, the Corporation's By-Laws and the vote of the stockholders, by a Board of Directors constituted in accordance with the Confirmation Order and the By- Laws. The corporation shall enter into such agreements, including a management services agreement between the corporation and NUSCO, as may be required from time to time by the Confirmation Order.
2. Notwithstanding any other provision of New Hampshire Law or these Articles of Incorporation, the Board of Directors shall take such action as may be necessary, without obtaining any vote, approval or consent of the corporation's stockholders, to cause the corporation to carry out, fulfill, comply with or otherwise effect the terms of the Confirmation Order.
3. To the fullest extent permissible under the New Hampshire Business Corporation Law, as same exists or may hereafter be amended from time to time, no officer or director of the corporation shall be personally liable for money damages to the corporation or any of its shareholders for breach of fiduciary duty as a director, an officer, or both.
Any repeal or modification of this paragraph 3 of this Article VI by the shareholders of the corporation shall not, unless otherwise required by law, adversely affect any right or protection of a director or officer existing at the time of such repeal or modification with respect to acts or omissions occurring prior to such repeal or modification.
ARTICLE VII PREEMPTIVE RIGHTS
The holders of the Common Stock shall have no preemptive riqht to subscribe to any future issue of additional shares of the Common Stock or the Preferred Stock or any other class of stock now or hereafter authorized, nor for any future issue of bonds, notes or other evidence of indebtedness convertible into stock or other securities exchangeable for stock.
ARTICLE VIII DISSENTERS' RIGHTS
The holders of Common Stock shall be deemed to have each voted in favor of the Merger in connection with the approval o~ the Joint Plan, the entry of the Confirmation Order and the issuance of the shares of Common Stock as provided in the Joint Plan. Notwithstanding any other provision of New Hampshire law, no shareholder of the corporation shall have any right to dissent from or to obtain payment for his shares in the event of the occurrence of the Merger, other than the right to receive those payments provided for under the terms of such Merger.
ARTICLE I
The first meeting of the incorporators shall be held at the office of Demondi Woodworth, Sulloway & Rogers, 77 North Main Street, in Concord, New Hampshire, on the fourteenth day of August, 1926, at eleven o'clock in the forenoon.
Dated at Concord, New Hampshire, this fourteenth day of August, 1926.
Name Post Office Address
EDWARD K. WOODWORTH Concord, N.H.
JONATHAN PIPER Concord, N.H.
WILLOUGHBY A. COLBY Concord, N.H.
ARTICLE
DURATION
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1. The period of duration of the corporation is perpetual.
Exhibit 3.3.2
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
Organized Under the Laws of New Hampshire
August, 1926
BY-LAWS
As in effect November 1, 1993
BY-LAWS OF
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
ARTICLE I.
Articles of Incorporation; Offices.
SECTION 1. These By-Laws shall be subject to the Articles of Agreement or Articles of Incorporation of the corporation, whichever should then be in effect, and all references in these By-Laws to the Articles of Incorporation shall be construed to mean the Articles of Agreement or Articles of Incorporation of the corporation as from time to time amended.
SECTION 2. The corporation shall maintain its principal office in Manchester, New Hampshire, and may maintain offices at such other places as the Board of Directors (the "Board") may, from time to time, appoint.
ARTICLE II.
Seal.
The initial corporate seal shall have inscribed thereon the name of the corporation and words and figures indicating the state and year of its incorporation. The seal shall otherwise be in such form as the Board may determine. After the merger of the corporation with and into Public Service Company of New Hampshire, the corporate seal shall have inscribed thereon the name Public Service Company of New Hampshire, the state of the corporation's incorporation, and 1926, the year of Public Service Company of New Hampshire's incorporation, and shall otherwise be in such form as the Board may determine. If the seal of the corporation is at any time not available, a wafer seal may be used.
ARTICLE III.
Capital Stock and Transfers.
SECTION 1. The amount and classes of capital stock that may be issued by the corporation, and the designations, preferences, rights, privileges, voting powers, restrictions and qualifications of each class thereof, shall be as set forth in or pursuant to the Articles of Incorporation.
SECTION 2. Each holder of fully paid stock shall be entitled to a certificate or certificates of stock having plainly written or printed upon its face that the corporation is organized under the laws of The State of New Hampshire, the name of the person to whom issued and the number and class of shares represented by such certificate, and the designation of the series where a class is divided into series. Stock certificates shall otherwise be in such form as the Board may from time to time prescribe; provided, however, that so long as the corporation is authorized to issue shares of more than one class each certificate shall set forth upon the face or back of the certificate, or shall state that the corporation will furnish to any shareholder upon request and without charge, a full statement of the designations, preferences, limitations, and relative rights of the shares of each class authorized to be issued and as to preferred shares, the variations in the relative rights and preferences between the shares of each series so far as the rights and preferences have been fixed and determined, and the authority of the Board to fix and determine the relative rights and preferences of subsequent series. All stock certificates shall be sealed with the corporate seal, shall be signed by the President or any Vice President and by the Secretary or any Assistant Secretary of the corporation, and shall also be countersigned and registered by a Registrar to be appointed by the Board, and be countersigned by a Transfer Agent to be appointed by the Board; except that pending the preparation of permanent certificates the Board may cause temporary certificates to be issued; and except that the signatures of the above-named officers, and the corporate seal, and the signatures of the Transfer Agent or the Registrar, or both, may be facsimiles, engraved or printed.
SECTION 3. Shares of stock may be transferred by the owner by a writing upon the back of the certificate by him signed, or by a separate instrument of assignment, and the assignee, upon producing and surrendering to the corporation the former certificate so transferred or the certificate accompanied by such instrument, shall be entitled to a new certificate if no liens upon the stock against the former owner have attached. The delivery of a stock certificate to a bona fide purchaser or pledgee for value, together with a written transfer of the same or a power of attorney to sell, assign and transfer the same, signed by the owner of the certificate, shall be a sufficient delivery to transfer the title; but no such transfer shall affect the right of the corporation to treat the stockholder of record as the stockholder in fact until the old certificate is surrendered and a new certificate is issued to the person entitled thereto. Except as hereinafter provided, or as may be required by law or by the order of a court in appropriate proceedings, shares of stock shall be transferred on the books of the corporation only upon the proper assignment and surrender of the certificates issued therefor. If an owner of stock claims that an outstanding stock certificate has been lost, destroyed, or wrongfully taken, such owner may upon request to the corporation have a new certificate issued to him provided he files with the corporation a sufficient indemnity bond or satisfies any other reasonable requirements imposed by the corporation.
SECTION 4. The transfer books may be closed by order of the Board for short periods, not exceeding twenty-five days at any one time, for the purpose of paying a dividend, or holding a meeting of stockholders, or for any other legal purpose, as the Board shall deem advisable.
SECTION 5. If default shall be made in the prompt payment when due of any sum payable to the corporation upon any subscription for stock of the corporation, and if such default shall continue for a period of thirty days after written demand has been made, then all rights under the subscription in and to the stock subscribed for shall, upon the expiration of such period, cease and determine and become and be forfeited to the corporation; provided that if at the expiration of such thirty-day period such right shall belong to the estate of a decedent, it may be forfeited only by resolution of the Board declaring forfeiture. The corporation shall, within thirty-days after such forfeiture, cause such stock to be sold at private or public sale, at its market value at the time of sale, and shall, out of the net proceeds of sale and upon surrender of any outstanding Stock Subscription Receipt issued to evidence the subscription, pay to the recorded holder of such receipt the amount paid on the subscription prior to forfeiture, less the amount, if any, by which the total subscription price of the stock exceeded the net proceeds of sale.
ARTICLE IV.
Meetings of Stockholders.
SECTION 1. All meetings of the stockholders shall be held at the principal office of the corporation or at such other place within or without the State of New Hampshire as shall be designated in the call therefor. An annual meeting shall be held each year on the second Thursday of May, or on such other date as the Board shall determine, but in no case later than June 30, at the time designated in the call, for the election of directors and the transaction of such other business as may come before it.
SECTION 2. Special meetings of the stockholders may be called by vote of the Board, or on written request of stockholders holding not less than one-tenth in number of the total outstanding shares of capital stock of the corporation entitled to vote at the meeting, or as provided in the Articles of Incorporation, or in such other manner as may be provided by statute. In case an annual meeting shall be omitted through inadvertence or otherwise, the business of such meeting may be transacted at a special meeting duly called for the purpose and in such case all references to the annual meetings in these By-Laws, except in Section 1 and this Section 2 of this Article IV, shall be deemed to refer to such special meeting held in place of the annual meeting.
SECTION 3. Notice of the time and place of each annual meeting shall be sent by mail to the recorded address of each stockholder entitled to vote thereat, or delivered in person to each such stockholder, not less than ten days nor more than fifty days (including the day of mailing or delivery) before the date of the meeting. Like notice shall be given of all special meetings, except in cases where other special method of notice may be required by statute, in all which cases the statutory method shall be followed. Except as otherwise provided in the Articles of Incorporation, notice of a stockholders' meeting need not be sent to any class of stockholders not entitled to vote upon any question to be acted upon or at any election of officers or directors to be held at such meeting. The notice of stockholders' meeting shall state the objects of the meeting. Less than ten days' notice of any stockholders' meeting shall be sufficient if all the stockholders entitled to vote at such meeting consent in writing to the notice actually given; and any meeting held without the notice herein provided for, and all action taken at such meeting, shall be legal and valid if all the stockholders entitled to notice thereof (a) are present in person or represented by proxy thereat and no objection is made by anyone so present, (b) waive notice thereof in writing, or (c) sign a written consent to the records thereof.
SECTION 4. At any meeting of stockholders, except where a different quorum is required by law, by the Articles of Incorporation or by these By-Laws, a representation in person or by proxy of a majority of the number of shares of stock outstanding and entitled to vote upon a question to be considered or at any election of officers or directors or a class of directors to be held at the meeting, shall be necessary to constitute a quorum for the consideration of such question or for such election, and in case a class of stock is entitled to vote upon a question or at an election as a separate class a representation of a majority of the number of outstanding shares of that class shall be necessary to constitute a quorum for action by that class, except that a majority vote of whatever stock shall be represented shall be sufficient for (a) adjourning from time to time until a quorum shall be obtained or (b) adjourning sine die.
SECTION 5. When a quorum for the consideration of a question is present at any meeting a majority in interest of the stock represented at the meeting and entitled to vote upon the question shall decide the question, or in case two or more classes of stock are entitled to vote as separate classes upon such question a majority interest of the stock represented at the meeting of each such class shall determine the action of that class except in either case where a larger vote is specifically required by law, by the Articles of Incorporation or by these By-Laws. When a quorum for an election is present at any meeting a plurality of the votes cast for any office shall elect to such office except where a larger vote is specifically required by law, by the Articles of Incorporation or by these By-Laws.
SECTION 6. Except as specifically provided in the Articles of Incorporation and these By-Laws, stockholders shall have one vote for each share of stock owned and entitled to vote. Stockholders may vote either in person or by proxy in writing dated not more than eleven months before the meeting named therein which shall be filed with the Secretary at the meeting or any adjournment thereof before being voted. Such proxies shall entitle the holders thereof to vote at any adjournment of such meeting but shall not be valid after the final adjournment of such meeting. Every proxy shall be revocable at the pleasure of the stockholder executing it, except as otherwise provided therein and as permitted by law.
ARTICLE V.
Directors.
SECTION 1. The property and business of the corporation shall be managed, subject to the terms of the Articles of Incorporation, these By-Laws and the votes of the shareholders, under the direction of a Board of not less than five nor more than twenty-one, who may or may not be stockholders. Directors shall be elected by ballot, by a plurality vote of the stockholders entitled to vote and present in person or represented by proxy at each election, except (i) as otherwise provided in the Articles of Incorporation, (ii) as hereinafter provided with respect to the filling of vacancies, and (iii) for the election of directors by the holders of the Preferred Stock, when, in accordance with the Articles of Incorporation, they, voting separately as one class, shall be entitled to elect additional directors. The number of positions on the Board of Directors for any year shall be fixed by resolution of the shareholders or of the Board of Directors, or, in the absence of such a resolution, shall be the number elected at the preceding Annual Meeting of Shareholders. Except as otherwise provided in the Articles of Incorporation, each director shall hold office until the next annual meeting when chosen otherwise than at an annual meeting, and for the term of one year when chosen at an annual meeting, and in either case until his successor shall be elected and shall qualify. The Board shall have and may exercise all its powers notwithstanding the existence of one or more vacancies in its number.
SECTION 2. Any vacancy in the Board shall be filled by the affirmative vote of a majority of its remaining members though less than a quorum and each director so appointed shall hold office until his successor shall be elected by the stockholders, who may so elect a successor at the next annual meeting or at any duly called special meeting prior thereto, and shall qualify.
SECTION 3. The Board may hold its meetings and may have one or more offices, and may keep the books of the corporation (except such records and books as by the laws of New Hampshire are required to be kept within that State) within or outside of New Hampshire, at such places as it may from time to time determine. In addition to the powers and authorities by these By-Laws, the Articles of Incorporation, and applicable law expressly conferred upon it, the Board may exercise all such powers of the corporation, and do all such lawful acts and things as are not by law, by the Articles of Incorporation or by these By-Laws required to be exercised or done by the stockholders.
SECTION 4. Without prejudice to the general powers conferred by, and subject to the limitations mentioned in, the last sentence of Section 3 of this Article V, it is hereby expressly declared that the Board shall have the following powers, that is to say:
1. From time to time to make and change rules and regulations, not inconsistent with these By-laws, for the management of the corporation's business and affairs.
2. From time to time, as and when and upon such terms and conditions as it may determine, to authorize the corporation to issue any part of the authorized capital stock of the corporation and fix the consideration for the issue and disposal thereof.
3. To cause the corporation to purchase, or otherwise acquire for the corporation, any property, right or privilege which the corporation is authorized to acquire at such price or consideration, and generally on such terms or conditions as it shall think fit.
4. At its discretion to cause the corporation to pay for any property or rights acquired, by the corporation, either wholly or partly in money, stock, bonds, debentures or other securities of the corporation.
5. To cause the corporation to borrow money, to create, make and issue mortgages, bonds, deeds of trust, trust agreements and negotiable or transferable instruments and securities, secured by mortgage or otherwise, and to do every other act and thing necessary to effectuate the same.
6. To appoint, and at its discretion remove or suspend, any and all officers, employees and agents, permanently or temporarily, as it may think fit and to the fullest extent permitted by then applicable law, and to determine their duties and fix and from time to time change their duties, salaries and emoluments, and to require security in such instances and in such amounts as it thinks fit.
7. To confer by resolution upon any officer of the corporation, the power to choose, remove or suspend subordinate officers, employees and agents.
8. To appoint any person or corporation to accept and hold in trust for the corporation, any property belonging to the corporation, or in which it is interested, or for any other purpose, and to execute and do all such deeds and things as may be requisite in relation to any such trust.
9. To determine who shall be authorized on the corporation's behalf, to sign bills, notes, receipts, acceptances, endorsements, checks, releases, contracts and other paper and documents.
10. To sell or otherwise dispose of any property of the corporation, the sale or disposal of which does not require a vote of the stockholders under the laws of The State of New Hampshire.
11. To delegate any of the powers of the board in the course of the current business of the corporation to any standing or special committee, or to appoint any persons to be the agents of the corporation with such powers (including the powers to sub-delegate) and upon such terms as it shall think fit, to the fullest extent permitted by then applicable law.
12. To fix in advance a date not exceeding fifty days and not less
than ten days prior to the date of (1) any meeting of stockholders, (2) the
payment of any dividend, (3) the making of any distribution to
stockholders, (4) the last day upon which the consent or dissent of
stockholders may be effectively expressed for any purpose, or (5) the
delivery of evidences of rights or interests arising out of any issue,
change, conversion or exchange of capital stock, as a record date for the
determination of the stockholders entitled (a) to notice of and to vote at
any meeting and any adjournment thereof, (b) to receive any dividend,
(c) to receive any distribution to stockholders, (d) to consent or dissent
for any purpose, or (e) to receive delivery of evidences of rights or
interests arising out of any issue, change, conversion or exchange of
capital stock, and in such case only stockholders of record on such record
date shall have such rights notwithstanding any transfer of stock upon the
books of the corporation after the record date.
13. To direct the use of facsimile signatures of corporate officers of the corporation and a facsimile of the corporate seal, if any, upon bonds or other corporate obligations of the corporation for the payment of money where such bond or other obligation is authenticated or certified by a Trustee.
ARTICLE VI.
Meetings of the Board.
SECTION 1. Regular meetings of the Board shall be held at such place and time as may be designated from time to time by the Board; and such meetings, and a regular meeting immediately following and at the same place as each annual meeting of the stockholders, may be held without notice. Special meetings of the Board may be called by the Chairman, if any, the Vice Chairman, if any, the President, or by any two directors. Oral or written notice of the time and place of each special meeting of the Board of Directors shall be given to each director personally or by telephone, or by mail or facsimile at his last-known post office address, at least twenty-four hours prior to the time of the meeting, provided that any director may waive such notice in writing or by facsimile or by attendance at such meeting.
SECTION 2. One-third of the Board then in office shall constitute a quorum for the transaction of business at any meeting of the Board, but no quorum shall consist of fewer than two directors. A lesser number may adjourn any meeting from time to time, until a quorum is obtained, or may adjourn sine die.
SECTION 3. In all meetings of the Board a majority vote of the members in attendance shall be decisive of all questions before the meeting, except as may be otherwise provided by law or by the Articles of Incorporation. The Board shall keep minutes of the proceedings at its meetings.
SECTION 4. Any resolution in writing concerning action to be taken by the Company, which resolution is approved and signed by all of the Directors, severally or collectively, whose number shall constitute a quorum for such action, shall have the same force and effect as if such action were authorized at a meeting of the Board of Directors duly called and held for that purpose, and such resolution, together with the Directors' written approval thereof, shall be recorded by the Secretary in the minute book of the Company.
SECTION 5. A Director or a member of a committee of the Board of Directors may participate in a meeting of the Board of Directors or of such committee by means of conference telephone or similar communications equipment enabling all Directors participating in the meeting to hear one another, and participation in a meeting in such manner shall constitute presence in person at such meeting.
SECTION 6. Directors of the corporation shall receive such salaries for services and such fees and expenses for attendance at meetings as may be fixed by resolution of the Board, and directors shall be entitled to be reimbursed for all actual expenses incurred for travel related to attendance at such meetings; provided, however, that no director, who is either an officer or a regular employee of the corporation and who receives compensation therefor, shall receive any compensation for service as a director or for attendance at meetings and provided further, that nothing herein contained shall be construed to preclude any director from serving the corporation in any other capacity, and receiving compensation therefor.
ARTICLE VII.
Executive Committee.
SECTION 1. The Board may, by resolution passed by a majority of the whole Board, designate from its members an Executive Committee of such number, not less than three, as the Board may fix from time to time. The Executive Committee may make its own rules of procedure and shall meet where and as provided by such rules, or by resolution of the Board. One-third of the members of the Executive Committee shall constitute a quorum for the transaction of business. During the intervals between the meetings of the Board, and except as provided by Section 8.25 of the New Hampshire Business Corporation Act, the Executive Committee shall have all the powers of the Board in the management of the business and affairs of the corporation, including power to authorize the seal of the corporation to be affixed to all papers which may require it, and, by majority vote of a quorum of its members, exercise any and all such powers in such manner as the Executive Committee shall deem best for the interests of the corporation, in all cases in which specific directions shall not have been given by the Board, and in which the vote of a quorum of the full Board is not required by law or by these By-Laws.
SECTION 2. The Executive Committee shall keep regular minutes of its proceedings and report the same to the Board when required. The Board shall have power to rescind any vote or resolution of the Executive Committee, but no such rescission shall have retroactive effect.
ARTICLE VIII.
Officers.
SECTION 1. In each year there shall be elected by the Board (i) a President, (ii) one or more Vice Presidents, (iii) a Secretary, (iv) one or more Assistant Secretaries, (v) a Treasurer, (vi) one or more Assistant Treasurers, and (vii) a Controller; and the Board may provide for and elect a Chairman, a Vice Chairman and such other officers and assistants and prescribe such duties for them as in its judgment may, from time to time, be required to conduct the business of the corporation. The offices of President, Treasurer and/or Secretary may be held by the same person, and one person may be both an assistant Treasurer and assistant Secretary. All officers shall hold their respective offices for a term prescribed by the Board, and until their successors, willing to serve, shall have been elected and, in the case of the Secretary, qualified, unless sooner removed; but they, and any of them may be removed from their respective offices at the pleasure of the Board. Vacancies arising in any office from any cause shall be filled by the Board; and the persons chosen to fill vacancies shall serve for the balance of the unexpired term and until their successors shall have been elected and, in the case of the Secretary, qualified.
SECTION 2. The Board of Directors may provide for and elect a Chairman from its members and, if a Chairman is elected, the Board may designate whether the Chairman is to be an officer of the Company. The Chairman, if and when elected, may elect, when present, to preside at meetings of the Board of Directors and of the Executive Committee. He may attend any meeting of any committee of the Board, whether or not he is a member of such committee. The Chairman, if an officer of the Company and when also elected or designated chief executive officer, shall have general supervision of the Company's affairs, and shall have such other powers and duties as may be prescribed by the Board of Directors. Until a Chairman be elected or in case of the absence, death, resignation or removal from office of the Chairman, the powers and duties as such Chairman shall, for the time being, be exercised by the President, unless otherwise ordered by the Board of Directors.
SECTION 3. A Vice Chairman, if and when elected, shall have such powers and duties as may from time to time be prescribed by the Board of Directors. If the Chairman is unable at any time to attend to the duties of the office of Chairman, or in case of the Chairman's death, resignation or removal from office, the powers and duties of the Chairman shall, except as the Board of Directors may otherwise provide, devolve upon the Vice Chairman or, if more than one Vice Chairman is elected, the most senior Vice Chairman, and shall be exercised by such Vice Chairman during such inability of the Chairman or until the vacancy in the office of Chairman shall be filled.
SECTION 4. Unless otherwise provided by the Board, the President shall have the general management and direction, subject to the control of the Board of Directors and of the Executive Committee and of the Chief Executive Officer or Chief Operating Officer, if such officers shall have been elected, of the business of the Company, including the power to appoint and to remove and discharge any and all agents and employees of the Company not elected or appointed directly by the Board of Directors. He may, with the approval of the Board of Directors, appoint, to aid him in his duties, an assistant or assistants to be known by such title or titles as he may designate, and may assign to such assistant or assistants such duties as he shall think advisable, not inconsistent with the By-Laws of the Company.
SECTION 5. The Vice President, or Vice Presidents, if there shall be more than one, shall have such powers and duties as may from time to time be prescribed by the Board. In case the President from absence or any other cause shall be unable at any time to attend to the duties of the office of President requiring attention, or in case of his death, resignation, or removal from office, the powers and duties of the President shall, except as the Board may otherwise provide, temporarily devolve upon the Vice President, if he shall be able to serve, if there shall be but one Vice President, or upon the highest ranking Vice President able to serve, if there shall be more than one, and shall be exercised by such Vice President as acting President during such inability of the President, or until the vacancy in the office of President shall be filled. In case of the absence, disability, death, resignation or removal from office of both the President and the Vice Presidents, the Board shall elect one of its members to exercise the powers and duties of the President during such absence or disability, or until the vacancy in one of said offices shall be filled.
SECTION 6. The Secretary shall be sworn each year to the faithful discharge of his duties, shall attend the meetings of and record all votes and proceedings of the stockholders and of the Board, shall make a record of all instruments and papers required to be recorded in his office and shall have the custody and care of the corporate seal, records and minutes of the corporation. He shall keep or cause to be kept a suitable record of the addresses of stockholders and shall issue all notices for meetings of stockholders. Whenever requested by the Chairman, if any, the Board or stockholders to give notice for a meeting of stockholders, he shall give such notice, as requested, and the notice shall state at whose request the notice is given. Whenever requested by the Chairman, if any, the Vice Chairman, if any, the President, or by any two directors to give notice for a meeting of the Board, he shall give such notice, as requested, and the notice shall state at whose request the notice is given. He shall sign all mortgages, and all other documents and papers to which his signature may be necessary or appropriate, shall affix the seal of the corporation to all instruments requiring the seal, and shall have such other powers and duties as are commonly incidental to the office of the Secretary, or as may be prescribed for him. In the absence of the Secretary or an Assistant Secretary from any meeting of the stockholders or of the board, a Secretary pro tempore, who shall be similarly sworn, may be chosen to record the votes and proceedings thereat.
SECTION 7. The Treasurer shall have charge of, and be responsible for, the collection, receipt, custody and disbursement of the funds of the corporation, and shall deposit its funds in the name of the corporation, in, and shall transfer such funds so deposited between, such banks, trust companies, or safe deposit vaults as the Board may direct. He shall have the custody of such books, receipted vouchers, and other books and papers as in the practical business operations of the corporation shall naturally belong in the office or custody of the Treasurer, or as shall be placed in his custody by the Board, by the Executive Committee, by the President, or by a Vice President when acting as President. He shall also have charge of the safekeeping of all stock, bonds, mortgages, and other securities belonging to the corporation, but such stocks, bonds, mortgages, and other securities shall be deposited for safekeeping in a safe deposit vault to be approved by the Board or by the Executive Committee, in a box or boxes, access to which shall be had as may be provided by resolution of the Board or Executive Committee. He shall have such powers and duties as are commonly incidental to the office of Treasurer, or as may be prescribed for him. He may be required to give bond to the corporation for the faithful discharge of his duties in such form and to such amount and with such sureties as shall be determined by the Board.
SECTION 8. The duties of the Controller shall be to maintain adequate records of all assets, liabilities, and transactions of the corporation; to see that adequate audits thereof are currently and regularly made; and, in conjunction with other officers and department heads, to initiate and enforce measures and procedures whereby the business of the corporation shall be conducted with the maximum safety, efficiency and economy. Upon request of any member of the Board, he shall attend any meeting of the Board. Upon request of any member of the Executive Committee, he shall attend any meeting of the Executive Committee.
SECTION 9. Assistant Secretaries, Treasurers or Controllers, when elected, shall assist the Secretary, the Treasurer or the Controller, as the case may be, in the performance of the respective duties assigned to such principal officers; and the powers and duties of any such principal officer, shall, except as otherwise ordered by the Board, temporarily devolve upon his assistant in case of the absence, disability, death, resignation or removal from office of such principal officer. They shall perform such other duties as may be assigned to them from time to time.
SECTION 10. In addition to the powers and duties of officers prescribed in these By-Laws and by law, and in addition to such powers and duties as the Board of Directors may prescribe but subject to such limitations as the Board of Directors may establish, each officer shall have the powers and perform the duties which by general usage pertain to the officer's particular office.
ARTICLE IX.
Miscellaneous.
SECTION 1. Notes of the corporation shall be signed by the President or a Vice President and by the Treasurer or an Assistant Treasurer or by such officers or persons as may be designated from time to time by the Board.
SECTION 2. No debts or obligations shall be contracted by any person on behalf of the corporation, unless authorized by the Board or the Executive Committee, except those incurred in the usual course of the business of the corporation.
SECTION 3. All dividends shall be payable at such time as may be fixed by the Board or by the Articles of Incorporation. Before payment of any dividend or making any distribution of profits, there shall be set aside, out of the surplus or net profits of the corporation, such sum or sums as the Board from time to time, in its absolute discretion, thinks proper as a reserve fund to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the Board shall think conducive to the interest of the corporation.
SECTION 4. The fiscal year of the corporation shall be the calendar year unless otherwise determined by the Board.
SECTION 5. The corporation shall indemnify, to the fullest extent permitted by applicable law, each person made or threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person or such person's testator or intestate is or was a director or officer of the corporation, or is or was serving, at the request of the corporation, for another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise in any capacity while he or she was such a director or officer, (hereinafter referred to as "Indemnified Person"), against expenses, including attorneys' fees, judgments, fines, penalties and amounts paid in settlement, actually and reasonably incurred in connection with such action or proceeding, or any appeal therein.
The corporation shall advance or promptly reimburse upon request any Indemnified Person for all expenses, including attorneys' fees, actually and reasonably incurred in defending any action or proceeding in advance of the final disposition thereof upon receipt of any undertaking then required by applicable law by or on behalf of such Indemnified Person.
Determinations with respect to indemnification and reimbursement of a
person (unless ordered by a court) shall be made: (1) by the Board acting
(a) by majority vote or action of a disinterested quorum of directors; or
(b) if such quorum is not obtainable, as directed by a majority vote or
action of a committee of the Board, duly designated to act in the matter by
a majority vote or action of the full Board (in which designation directors
who are parties may participate), consisting solely of two or more
directors not at the time parties to such proceeding; or (2) by independent
legal counsel, selected by the Board or a committee thereof by vote or
action as set forth in clauses (a) and (b) of clause (1), or if the
requisite quorum of the full Board cannot be obtained therefor and such
committee cannot be established, by a majority vote or action of the full
Board (in which selection directors who are parties may participate); or
(3) by a majority vote of the holders of the outstanding stock at the time
entitled to vote for directors, voting as a single class; or (4) by any
other method of determination selected by the Board (in which selection
directors who are parties may participate).
Nothing herein shall limit or affect any right of any Indemnified Person otherwise than hereunder to indemnification or expenses, including attorneys' fees, under any statute, rule, regulation, certificate of incorporation, by-law, insurance policy, contract or otherwise.
Anything in these By-Laws to the contrary notwithstanding, no elimination of this By-Law, and no amendment of this By-Law adversely affecting the right of any Indemnified Person to indemnification or advancement or reimbursement of expenses hereunder, shall be effective until the 60th day following the taking of such action, and no elimination of or amendment to this By-Law shall thereafter deprive any Indemnified Person of his or her rights hereunder arising out of alleged or actual occurrences, acts or failures to act occurring prior to such 60th day. Upon taking any such action the corporation shall promptly notify all Indemnified Parties, which notification shall be sufficient if mailed, postage prepaid, to each such Indemnified Person at their last known address.
The corporation shall not, except by elimination or amendment of this By-Law in a manner consistent with the preceding paragraph and Article X of these By-Laws, and except by making any determination required by Section 5, IV, of the New Hampshire Business Corporation Act take any corporate action or enter into any agreement which prohibits, or otherwise limits the rights of any Indemnified Person to, indemnification in accordance with the provisions of this By-Law. The indemnification of any Indemnified Person provided by this By-Law shall be deemed to be a contract between the corporation and such Indemnified Person and shall continue after such Indemnified Person has ceased to be a director or officer of the corporation and shall inure to the benefit of such Indemnified Person's heirs, executors, administrators and legal representatives. If the corporation fails timely to make any payment pursuant to the indemnification and advancement or reimbursement of expenses provisions of this Article IX Section 5 and an Indemnified Person commences an action or proceeding to recover such payment, the corporation in addition shall reimburse such Indemnified Person for the legal fees and other expenses of such action or proceeding if the Indemnified Party shall prevail in such action or proceeding.
In case any provision in this By-Law shall be determined at any time to be unenforceable in any respect, the other provisions shall not in any way be affected or impaired thereby.
For purposes of this By-Law, the corporation shall be deemed to have requested an Indemnified Person to serve an employee benefit plan where the performance by such Indemnified Person of his or her duties to the corporation also imposes duties on, or otherwise involves services by, such Indemnified Person to the plan or participants or beneficiaries of the plan. Such Indemnified Person shall be indemnified against excise taxes assessed on him or her with respect to an employee benefit plan pursuant to applicable law. For purposes of this Section 5 of Article IX of these By-Laws, the term "corporation" shall include any legal successor to the corporation, including any corporation which acquires all or substantially all of the assets of the corporation in one or more transactions.
ARTICLE X.
Amendment.
The Board shall have the power to alter, amend or repeal these By-Laws or to adopt new By-Laws; provided, however, that any such action shall be subject to repeal or change by action of the shareholders; and provided further that the unanimous vote of the Board shall be required to alter, amend, or repeal Article IX, Section 5 of these By-Laws. The By-Laws may contain any provisions for the regulation and management of the affairs of the corporation not inconsistent with law, or the Articles of Incorporation. Action by the Board to alter, amend or repeal these By-Laws shall be by the affirmative vote of such number of directors as is equal to a majority of the full Board.
Exhibit 3.4.11
BY-LAWS
WESTERN MASSACHUSETTS ELECTRIC COMPANY
Adopted
February 11, 1937
Amended
February 18, 1942
January 13, 1943
October 19, 1945
January 15, 1947
August 18, 1948
November 17, 1954
February 26, 1960
September 9, 1960
February 27, 1962
July 8, 1964
May 19, 1966
December 5, 1967
June 3, 1970
August 2, 1971
October 13, 1971
October 20, 1975
December 16, 1981
March 1, 1982
April 12, 1983
December 15, 1983
(effective
November 13, 1986)
February 11, 1987
February 24, 1988
WESTERN MASSACHUSETTS ELECTRIC COMPANY
BY-LAWS
ARTICLE I
STOCKHOLDERS' MEETINGS
The annual meeting of the stockholders shall be held on the first Wednesday of March in each year, and special meetings of the stockholders shall be held whenever the Chairman of the Board, the President, or two Directors shall so order, or whenever called in any other manner as provided by law.
Each meeting of the stockholders, annual or special, shall be held at such hour of the day, and at such place in Boston or in such other place in Massachusetts, as may be designated by the Board of Directors, by the Chairman of the Board or by the President. Notice of the time and place of every such meeting shall be given by the Clerk by mailing a notice to each stockholder of record at his address as shown on the books of the corporation not less than seven (7) days before the day named for the meeting. No business shall be in order at a special meeting except such as shall have been indicated in the notice of such meeting.
In the event of any failure to call and hold the annual meeting as herein provided, a special meeting may be called and held in lieu of and for the purposes of such annual meeting. Any election had or business done at such substitute meeting shall be as valid and effectual as if had or done at a meeting called as an annual meeting and duly held on said date.
A majority in interest of all the shares of stock of the corporation outstanding present in person or by proxy shall constitute a quorum for the transaction of business but less than a quorum may adjourn either sine die or to a date certain.
No meeting of the stockholders shall be deemed to be invalid for want of notice provided every stockholder waives notice thereof by a writing filed either before or after such meeting with the records thereof.
ARTICLE II
OFFICERS
The officers of the corporation shall be a Chairman of the Board of Directors, a President, an Executive Vice-president, one or more Vice- presidents, a Treasurer, a Clerk, a Board of not less than five (5) nor more than twenty-five (25) Directors, such other officers as the Board of Directors may appoint, including, if the Directors see fit, a Secretary and one or more Assistant Treasurers. The officers need not be stockholders. No two of the following offices may be held by the same person: Chairman of the Board of Directors, President, Executive Vice-president, and Vice- president, and the Treasurer shall not be an Assistant Treasurer.
The business, property and affairs of the Company shall be managed by a Board of not less than three nor more than sixteen Directors. Within these limits, the number of positions on the Board of Directors for any year shall be the number fixed by resolution of the shareholders or of the Board of Directors, or, in the absence of such a resolution, shall be the number of Directors elected at the preceding Annual Meeting of Shareholders. The Directors so elected shall continue in office until their successors have been elected and qualified.
ARTICLE III
ELECTION OF OFFICERS
The Directors, the clerk, and the Treasurer shall be elected by ballot each year at the annual meeting of the stockholders. The Chairman of the Board, the President, the Executive Vice-president, and each Vice- president shall be elected annually by, and the Chairman of the Board and the President shall be elected from, The Board of Directors. All such other officers as the Directors may appoint, as provided in Article II, shall be elected annually by the Board of Directors.
Any vacancy in the office of Chairman of the Board, President, Executive Vice-president, Vice-president, Directors, Treasurer, Assistant Treasurer, or Clerk arising from non-election, resignation, declination, death, or any other cause, may be filled by the Board of Directors, except that whenever the number of Directors shall be increased at any special meeting of the stockholders the additional Directors so provided for shall be elected by ballot by the stockholders at the same meeting. Said Board may also elect an officer pro tempore to serve during the disability or absence of any officer. Officers chosen to fill vacancies shall hold their offices until new officers are duly chosen by the stockholders or Directors, as the case may be.
ARTICLE IV
DIRECTORS
Meetings of the Board of Directors may be held at any time and place at the call of the Chairman of the Board, the President, or any two Directors. Notice of each meeting shall be given to each Director either by notice mailed to him at least forty-eight (48) hours before the time of such meeting, or by a telephone or telegraphic message sent to his place of business or residence, or other form of notice actually given to him twenty-four (24) hours before the time of such meetings. However, any meeting of the Board and all business transacted thereat shall be legal and valid without such notice if each member of the Board is present in person or waives notice thereof by writing filed with the records of the meeting or assents in writing to the recorded proceedings of the meeting.
One-third of the directors then in office shall constitute a quorum, except that no quorum shall consist of less than two Directors. A number less than a quorum may adjourn from time to time until a quorum is present.
In the event of such an adjournment, notice of the adjourned meeting shall be given to all Directors.
The Board of Directors may at any time elect by ballot not less than five (5) of their members who shall constitute an Executive committee of the Board, and if such an Executive Committee is elected the Board of Directors shall make regulations defining the powers and duties of such Executive Committee and may delegate to it any or all of their powers in management of the property, business and affairs of the corporation except so far as is incompatible with these By-laws or with the laws of the Commonwealth. A majority of the Executive Committee shall constitute a quorum.
Such Executive Committee shall elect a Chairman and Secretary and shall keep a record of its doings which at all reasonable times shall be open to inspection by each member of the Board of Directors. The Chairman of the Executive Committee shall submit its records to the Board of Directors at each regular or special meeting of the Board for such action as said Board may deem proper.
The Directors as a Board shall have the management of the property, business and affairs of the corporation and they are hereby invested in such management with all the powers which the corporation itself possesses so far as such investing is not incompatible with the provisions of these By-laws or the laws of the Commonwealth. However, so long as the holders of the outstanding shares of the corporation's preferred stock voting as a class have not exercised their right to elect a majority of the Board of Directors of the corporation on the happening of any of the events of default specified in the preferred stock provisions of these By-laws, any right of the corporation to terminate, amend, rescind, waive, discharge, or in any other way alter or change the obligations of the corporation under any contract with Northeast Nuclear Energy Company covering the maintaining of an inventory of nuclear core elements for Unit Nos. 1, 2 or 3 of the Millstone Nuclear Power Station, including, without limitation, the Fuel Supply Contract dated as of December 1, 1972, (as it is to be amended by a Contract of Amendment to be dated as of October 1, 1975), by and among the corporation, The Hartford Electric Light Company, and the Connecticut Light and Power Company and Northeast Nuclear Energy Company, shall be reserved to the common stockholders of the corporation.
They may appoint and remove at pleasure such subordinate officers and employees as may see to them wise.
They may assign such powers and duties to any officers or subordinate officers or employees as may not be inconsistent with Laws or these By-laws.
They shall have access to the books, vouchers and funds of the corporation in the custody of the Treasurer, shall determine upon the form of the corporate seal and of the certificates of stock, shall fix the salaries of the officers, and shall declare dividends from time to time as they may deem for the best interests of the corporation.
They may make contributions to corporations, trusts, funds or foundations organized and operated exclusively for charitable, scientific or educational purposes, no part of the earnings of which inures to the benefit of any private shareholder or individual, in such amounts as they may deem reasonable up to but not exceeding in any fiscal year in the aggregate one-half of one percent of the capital and surplus of the corporation as at the close of the fiscal year last preceding the making of any such contribution.
The Company shall indemnify each of its Directors and officers (including persons who serve at its request as Directors, officers, or in any other similar capacity of another organization in which it has any interest as a shareholder, creditor or otherwise) against all liabilities and expenses, including amounts paid in satisfaction of judgments, in compromise or as fines and penalties, and counsel fees, reasonably incurred by him in connection with the defense or disposition of any action, suit or other proceeding, whether civil or criminal, in which he may be involved or with which he may be threatened, while in office or thereafter, by reason of his being or having been such a Director or officer, except with respect to any matter as to which he shall have been adjudicated in such action, suit or proceeding not to have acted in good faith in the reasonable belief that his action was in the best interests of the corporation; provided, however, that as to any matter disposed of by a compromise payment by such Director or officer pursuant to a consent decree or otherwise, no indemnification either for said payment or for any other expenses shall be provided unless such compromise shall be approved as in the best interests of the corporation, after notice that it involves such indemnification, (a) by a disinterested majority of the Directors then in office; or (b) by a majority of the disinterested Directors then in office, provided that there has been obtained an opinion in writing of independent legal counsel to the effect that such Director or officer appears to have acted in good faith in the reasonable belief that his action was in the best interests of the corporation; or (c) by the holders of majority of the outstanding stock at the time entitled to vote for Directors, voting as a single class, exclusive of any stock owned by an interested Director or officer. In discharging his duty any such Director or officer, when acting in good faith, may rely upon the books of account of the corporation or of such other organization, reports made to the corporation or to such other organization by any of its officers or employees or by counsel, accountants, appraisers or other experts selected with reasonable care by the Board of Directors or officers, or upon other records of the corporation or of such other organization. Expenses incurred with respect to any such action, suit or proceeding may be advanced by the corporation prior to the final disposition of such action, suit or proceeding, upon receipt of an undertaking by or on behalf of the recipient to repay such amount unless it is ultimately determined that he is entitled to indemnification. The right of indemnification hereby provided shall not be exclusive of or affect any other right to which any Director or officer may be entitled. As used in this paragraph, the terms "Director" and "officer" include their respective heirs, executors and administrators, and an "interested" Director or officer is one against whom in such capacity the proceedings in question or another proceeding on the same or similar grounds is then pending. Nothing contained in this Article shall be found, in any action, suit or proceeding to be invalid or ineffective, the validity and the effect of the remaining parts shall not be affected.
ARTICLE V
CHAIRMAN OF THE BOARD OF DIRECTORS
The Chairman of the Board of Directors shall preside at the meetings of the Board and shall act in a general advisory capacity to the Board in regard to all activities of the corporation, and shall have such other powers and perform such other duties as may from time to time be determined by the Board.
ARTICLE VI
THE PRESIDENT
The President shall preside at all meetings of the stockholders and in the absence of the Chairman of the Board at all meetings of the Board of Directors. The President shall be the chief executive officer of the corporation and shall have full charge of its business and affairs and shall perform all the duties of this office prescribed by law and all powers and duties given him by the Board of Directors.
ARTICLE VII
ECUTIVE VICE-PRESIDENT AND VICE-PRESIDENTS
The Executive Vice-president shall have such powers and perform such duties as may be assigned to him by the Board of Directors or as may be delegated to him by the President. In the absence or disability of the President, or in case of an unfilled vacancy in that office, the Executive Vice-president shall perform the duties and exercise the powers of the President.
The Vice-president or Vice-presidents shall perform such duties of a general or special nature as may be assigned to him or them by the Board of Directors or as may be delegated to him or them by or through the President. In case of the absence or disability of the Executive Vice-president, a Vice-president shall perform all the duties and have all the powers of the Executive Vice-president. If there are at any time two or more Vice-presidents, the one to act in place of the Executive Vice-president shall be selected by the Board of Directors, provided, however, that prior to the making of such selection by said Board a Vice-president to act as aforesaid may be appointed by the President, or if he is unable to make such appointment or fails to do so, by the Chairman of the Board, and the Vice-president so appointed shall continue to act as aforesaid until another Vice-president has been appointed for that purpose by the Board of Directors.
ARTICLE VIII
THE SECRETARY AND THE CLERK
The Secretary shall have such duties as may from time to time be delegated to him by the Board of Directors.
The Clerk shall be a resident of Massachusetts. He shall be sworn, and shall record all votes of the corporation in a book to be kept for the purpose. He shall attend all meetings of stockholders, of the Board of Directors, and of the Executive Committee. In the absence of the Clerk or if at any such meeting he shall be otherwise engaged, an Assistant Clerk if present shall record the votes taken at the meeting, and if no Assistant Clerk shall be present, a Clerk pro tempore shall be chosen for that purpose. The Clerk or any Assistant Clerk may furnish certified copies of any portion of the records of the corporation under its corporate seal.
All Assistant Clerks shall be sworn.
ARTICLE IX
THE TREASURER
The Treasurer when required by the Directors shall give bond with sureties acceptable to them for the faithful discharge of his duties and in such sum as the Directors may determine, and the premium may, by vote of the Board of Directors, be paid from the funds of the corporation.
He shall be the transfer agent of the stock of the corporation unless a special transfer agent is appointed by the Directors, shall keep a record of the names and residences of all the stockholders, shall have the custody of the corporate seal and of all the moneys, funds and valuable papers and documents of the corporation except his own bond which shall be in the custody of the President.
He shall deposit all the funds of the corporation in such bank or banks as the Directors shall designate to the credit of the corporation by its corporate name, subject to the checks of the corporation signed by its Treasurer or an Assistant Treasurer or such other officer or employee as may be designated for that purpose by the vote of the Directors, but with such requirements, if any, as to joint signatures and such other limitations, if any, of the authority as aforesaid of any signing officer or employee as the Directors may see fit to impose.
He shall issue notes and accept drafts on behalf of the corporation only when authorized thereto by the Directors.
He shall keep accurate books of account of the corporation's transactions which shall be the property of the corporation, which together with all its property in his custody shall be subject at all times to inspection and control of the Directors.
ARTICLE X
ASSISTANT TREASURER
Each Assistant Treasurer, if any, shall have such powers and duties as may be given him by the Directors and shall give bond when required by the Directors with sureties acceptable to them for the faithful discharge of his duties in such sum as the Directors may determine, and the premiums may, by vote of the Board of Directors, be paid by the corporation.
ARTICLE XI
SALES, LEASES, AND CONVEYANCES OF REAL ESTATE
The President and Treasurer may in their discretion, to the extent authorized by law and by vote of the Directors or of the Executive Committee, lease for any term of time and convey all of its real estate including water power and release or modify easements and other rights in real estate whether granted to or by the corporation; and all deeds, conveyances and leases of real estate including water power and releases and modifications of easements and of other rights in real estate of the corporation, unless otherwise provided by vote of the corporation, shall be made in the name of the corporation under its corporate seal, and be signed by the President, the Executive Vice-president, or any Vice-president thereto authorized by a vote of the Directors or of the Executive Committee and may be acknowledged by any person signing as aforesaid.
ARTICLE XII
CERTIFICATES OF STOCK-TRANSFERS
Certificates of stock may be signed by the President or a Vice-president and the Treasurer or an Assistant Treasurer. Such certificates shall be in such form as the Directors may approve, and shall also bear the seal of the corporation which shall be in the form theretofore used by the corporation, or in a newer form adopted by the Directors.
Shares of stock may be transferred by assignment thereof in writing, accompanied by delivery of the certificates; but no such transfer of stock shall affect the right of the corporation to pay any dividend thereon or to treat the holder of record as the holder in fact until the transfer has been recorded upon the books of the corporation or a new certificate has been issued to the person to whom the stock has been transferred.
In case of the loss of a certificate, a duplicate may be issued on such reasonable terms as the Directors shall prescribe.
ARTICLE XIII
CLOSING OF TRANSFER BOOKS
The transfer books of the corporation may be closed for not exceeding fifteen (15) days next prior to any meeting of the stock-holders and at such other times and for such reasonable periods as may be determined by the Board of Directors.
ARTICLE XIV
FISCAL YEAR
The fiscal year of the corporation shall end on the thirty-first day of December in each year.
ARTICLE XV
TRANSFER AGENT AND REGISTRAR
If the Board of Directors deem it advisable to have a transfer agent other than the Treasurer, they may appoint any Bank or Trust Company to that office. They may appoint the same or any other Bank or Trust Company as Registrar of stock certificates if it appear desirable to have the stock registered. They may terminate the authority of any Bank acting in either capacity whenever it shall seem wise.
ARTICLE XVI
SENIOR STOCK PROVISIONS
The Company's capital stock includes a class of capital stock designated "Common Stock," a class of capital stock designated "Preferred Stock," and a class of capital stock designated "Class A Preferred Stock." The authorized shares of Common Stock, Preferred Stock and Class A Preferred Stock are the number of shares authorized in the Company's articles of organization, as amended from time to time. The Preferred Stock and the Class A Preferred Stock are hereinafter for convenience of reference sometimes collectively referred to as the "Senior Stock," and either class may hereinafter individually be referred to as "Senior Stock."
Shares of Preferred Stock and shares of Class A Preferred Stock shall rank on a parity in respect of dividends or payment in case of liquidation, and, to the extent not fixed and determined by these by-laws or the Company's articles of organization or otherwise by law, shall have the same rights, preferences and powers. The general terms, limitations and relative rights and preferences of each share of Preferred Stock and each share of Class A Preferred Stock shall be determined in accordance with the following Sections:
Section 1. Issuance of Senior Stock
Shares of Preferred Stock may be issued from time to time in one or more series on such terms and for such consideration as may be determined by the Board of Directors. Shares of Class A Preferred Stock may be issued from time to time in one or more series on such terms and for such consideration as may be determined by the Board of Directors. The series designation, dividend rate, redemption prices, and any other terms, limitations and relative rights and preferences of each series of either class of Senior Stock shall be determined by the Board of Directors to the extent not fixed and determined by this Article or the Company's articles of organization.
Section 2. Dividends
A. The holders of either class of the Senior Stock shall receive, but only when and as declared by the Board of Directors, cumulative dividends at the rate provided for the particular series and payable on such dividend payment dates in each year as said Board may determine, such dividends to be payable to holders of record on such dates as may be fixed by said Board but not more than 45 days before each dividend date, provided, however, that dividends shall not be declared and set apart for payment, or paid, on Senior Stock of any one class and series, for any dividend period, unless dividends have been or are contemporaneously declared and set apart for payment, or paid, on Senior Stock of all series for all dividend periods terminating on the same or an earlier date.
B. Dividends on each share of Senior Stock shall be cumulative from the date of issue thereof or from such earlier date as the Board of Directors may determine therefor. Unless full cumulative dividends to the last preceding dividend date shall have been paid or set apart for payment on all outstanding shares of Senior Stock, no dividend shall be paid on any junior stock. The term "junior stock" means Common Stock or any other stock of the Company subordinate to the Senior Stock in respect of dividends or payments in liquidation.
C. So long as any shares of Senior Stock are outstanding, the Company shall not declare any dividends or make any other distributions in respect of outstanding shares of any junior stock of the Company, other than dividends or distributions in shares of junior stock, or purchase or otherwise acquire for value any outstanding shares of junior stock (the declaration of any such dividend or the making of any such distribution, purchase or acquisition being herein called a "junior stock payment") in contravention of the following:
(1) If and so long as the junior stock equity (hereinafter defined), adjusted to reflect the proposed junior stock payment, at the end of the calendar month immediately preceding the calendar month in which the proposed junior stock payment is to be made is less than 20% of total capitalization (hereinafter defined) at that date, as so adjusted, the Company shall not make such junior stock payment in an amount which, together with all other junior stock payments made within the year ending with and including the date on which the proposed junior stock payment is to be made, exceeds 50% of the net income of the Company available for dividends on junior stock for the 12 full calendar months immediately preceding the calendar month in which such junior stock payment is made, except in an amount not exceeding the aggregate of junior stock payments which under the restrictions set forth above in this paragraph (1) could have been, and have not been, made.
(2) If and so long as the junior stock equity, adjusted to reflect the proposed junior stock payment, at the end of the calendar month immediately preceding the calendar month in which the proposed junior stock payment is to be made, is less than 25% but not less than 20% of the total capitalization at that date, as so adjusted, the Company shall not make such junior stock payment in an amount which, together with all other junior stock payments made within the year ending with and including the date on which the proposed junior stock payment is to be made, exceeds 75% of the net income of the Company available for dividends on the junior stock for the 12 full calendar months immediately preceding the calendar month in which such junior stock payment is made, except in an amount not exceeding the aggregate of junior stock payments which under the restrictions set forth above in this paragraph (2) could have been, and have not been, made.
D. The term "junior stock equity" means the aggregate of the part value of or stated capital represented by, the outstanding shares of junior stock, all earned surplus, capital or paid-in surplus, and any premiums on the junior stock then carried on the books of the Company, less:
(1) the excess, if any, of the aggregate amount payable on involuntary liquidation of the Company upon all outstanding shares of Senior Stock over the sum of (i) the aggregate par or stated value of such shares and (ii) any premiums thereon;
(2) any amounts on the books of the Company known, or estimated if not known, to represent the excess, if any, of recorded value over original cost of used or useful utility plant; and
(3) any intangible items set forth on the asset side of the balance sheet of the Company as a result of accounting convention, such as unamortized debt discount and expense; provided, however, that no deductions shall be required to be made in respect of items referred to in clauses (2) and (3) of this subsection D in cases in which such items are being amortized or are provided for, or are being provided for, by reserves.
E. The term "total capitalization" means the aggregate of:
(1) the principal amount of all outstanding indebtedness of the
Company maturing more than 12 months after the date of issue thereof; and
(2) the par value or stated capital represented by, and any premiums carried on the books of the Company in respect of, the outstanding shares of all classes of the capital stock of the Company, earned surplus, and capital or paid-in surplus, less any amounts required to be deducted pursuant to clauses (2) and (3) of subsection D of this Section 2 in the determination of junior stock equity.
Section 3. Redemption or Purchase of Senior Stock
A. All or any part of any series of Senior Stock may by vote of
the Board of Directors be called for redemption at any time at the
redemption price provided for the particular series and in the manner
hereinbelow provided. Subject to the provisions of subsection B of this
Section 3, all or any part of any series of Senior Stock may be called for
redemption without calling all or any part of any other series of Senior
Stock. If less than all of any series of Senior Stock is so called, the
Transfer Agent shall determine by lot or in some other manner approved by
the Board of Directors the shares of such series of Senior Stock to be
called.
B. No call for redemption of less than all shares of Senior Stock outstanding shall be made if the Company shall be in arrears in respect of payment of dividends on any shares of Senior Stock outstanding.
C. The sums payable in respect of any shares of Senior Stock so called shall be payable at the office of an incorporated bank or trust company in good standing. Notice of such call stating the redemption date shall be mailed not less than 30 days before the redemption date to each holder of record of shares of Senior Stock so called at his address as it appears upon the books of the Company.
D. The Company shall, before the redemption date, deposit with said bank or trust company all sums payable with respect to shares of Senior Stock so called. After such mailing and deposit the holders of shares of Senior Stock so called for redemption shall cease to have any right to future dividends or other rights or privileges as stockholders in respect of such shares and shall be entitled to look for payment on and after the redemption date only to the sums so deposited with said bank or trust company for their respective amounts. Shares so redeemed may be reissued but only subject to the limitations imposed upon the issue of Senior Stock.
E. The Company may at any time purchase all or any of the then outstanding shares of Senior Stock of any class and series upon the best terms reasonably obtainable, but not exceeding the then current redemption price of such shares, except that no such purchase shall be made if the Company shall be in arrears in respect of payment of dividends on any shares of Senior Stock outstanding or if there shall exist an event of default as defined in Section 5 hereof.
Section 4. Amounts Payable on Liquidation
A. The holders of any series of Senior Stock shall receive upon any voluntary liquidation, dissolution or winding up of the Company the then current redemption price of the particular series and if such action is involuntary $100 per share in the case of the Preferred Stock and $25 per share in the case of the Class A Preferred Stock, plus in each case all dividends accrued and unpaid to the date of such payment, before any payment in liquidation is made on any junior stock.
B. If the net assets of the Company available for distribution on liquidation to the holders of Senior Stock shall be insufficient to pay said amounts in full, then such net assets shall be distributed among the holders of Senior Stock, who shall receive a common percentage of the full respective preferential amounts.
Section 5. Voting Powers
A. Except as provided in this Article or in the Company's articles of organization and as provided by law, the holders of Senior Stock shall have no voting power or right to notice of any meeting.
B. Whenever the holders of the Senior Stock shall have the right to vote or consent to an action as provided in these Articles or the Company's articles of organization or as provided by law, both classes of Senior Stock shall (except as provided below) vote together as a single class, each outstanding share of Preferred Stock entitled to vote and each outstanding share of Class A Preferred Stock entitled to vote having such voting rights as are proportionate to the ratio of (i) the par value represented by such share to (ii) the par value represented by all shares of Senior Stock then outstanding. Whenever only one class of the Senior Stock shall have the right to vote or consent to an action as provided in these Articles or the Company's articles of organization or as provided by law, or whenever each class of the Senior Stock shall be entitled or be required to vote as a separate class on a matter, each outstanding share of such class entitled to vote shall be entitled to one vote on each such matter.
C. Whenever dividends on any share of Senior Stock shall be in arrears in an amount equal to or exceeding four quarterly dividend payments, or whenever there shall have occurred some default in the observance of any of the provisions of this Article, or some default on which action has been taken by debentureholders, bondholders or the trustee of any deed of trust or mortgage of the Company, or whenever the Company shall have been declared bankrupt or a receiver of its property shall have been appointed (any of said conditions being herein called an "event of default"), then the holders of Senior Stock shall be given notice of all stockholders' meetings and shall have the right voting together as a class to elect the smallest number of directors necessary to constitute a majority of the Board of Directors of the Company and the exclusive right voting together as a class to amend the by-laws to make such appropriate increase in the number of directorships as may be required to effect such election. When all arrears of dividends shall have been paid and such event of default shall have been terminated, all the rights and powers of the holders of Senior Stock to receive notice and to vote shall cease, subject to being again revived on any subsequent event of default.
D. Whenever the right to elect directors shall have accrued to the holders of Senior Stock the Company shall call a meeting of stockholders for the election of directors and, if necessary, the amendment of the by-laws to permit the holders of Senior Stock to exercise their rights pursuant to subsection C of this Section 5, such meeting to be held not less than 45 days and not more than 90 days after the accrual of such rights. When such rights shall cease, the Company shall, within seven days from the delivery to the Company of a written request therefor by any stockholder, cause a meeting of the stockholders to be held within 30 days from the delivery of such request for the purpose of electing a new Board of Directors. Forthwith, upon the election of such new Board of Directors, the directors in office immediately prior to such election (other than persons elected directors in such election) shall be deemed removed from office without further action by the Company.
Section 6. Action Requiring Certain Consent of Senior Stockholders
A. So long as any Senior Stock is outstanding, the Company, without the affirmative vote or written consent of at least a majority in interest of the Senior Stock then outstanding voting or giving consent together as a class shall not:
(1) Issue or assume any unsecured notes, unsecured debentures or other securities representing unsecured debt (other than for the purpose of refunding or renewing outstanding unsecured securities issued or assumed by the Company resulting in equal or longer maturities or redeeming or otherwise retiring all outstanding shares of Senior Stock) if immediately after such issue or assumption (a) the total outstanding principal amount of all unsecured notes, unsecured debentures or other securities representing unsecured debt of the Company will thereby exceed 20% of the aggregate of all outstanding secured debt of the Company and the capital stock, premiums thereon, and surplus of the Company, as stated on its books, or (b) the total outstanding principal amount of all unsecured debt of the Company of maturities of less than 10 years will thereby exceed 10% of the aggregate of all outstanding secured debt of the Company and the capital stock, premiums thereon, and surplus of the Company, as stated on its books. For the purposes of this subsection A, the payment due upon the maturity of unsecured debt having an original single stated maturity of 10 years or more shall not be regarded as unsecured debt with a maturity of less than 10 years until within three years of the maturity thereof, and none of the payments due upon any unsecured serial debt having an original stated maturity for the final serial payment of 10 years or more shall be regarded as unsecured debt of a maturity of less than 10 years until within three years of the maturity of the final serial payment.
(2) Issue, sell or otherwise dispose of any shares of the then authorized but unissued Senior Stock or any other stock ranking on a parity with or having a priority over Senior Stock in respect of dividends or of payments in liquidation, or reissue, sell or otherwise dispose of any reacquired shares of Senior Stock or such other stock, other than to refinance an equal par value or stated value of Senior Stock or of stock ranking on a parity with or having priority over Senior Stock in respect of dividends or of payments in liquidation, if:
(a) For a period of 12 consecutive calendar months within 15 calendar months immediately preceding the calendar month in which any such shares shall be issued, the Income before Interest Charges of the Company for said period available for the payment of interest determined in accordance with the systems of accounts then prescribed for the Company by the Department of Public Utilities of the Commonwealth of Massachusetts (or by such other official body as may then have authority to prescribe such systems of accounts) but in any event after deducting depreciation charges and taxes (including income taxes) and including, in any case in which such stock is to be issued, sold or otherwise disposed of in connection with the acquisition of any property, the Income before Interest Charges of the property to be so acquired, computed as nearly as practicable in the manner specified above, shall not have been at least one and one-half (1 1/2) times the sum of (i) the interest charges for one year on all indebtedness which shall then be outstanding (excluding interest charges on any indebtedness, proposed to be retired in connection with the issue, sale or other disposition of such shares), and (ii) an amount equal to all annual dividend requirements on all outstanding shares of Senior Stock and all other stock, if any, ranking on a parity with or having priority over Senior Stock in respect of dividends or of payments in liquidation, including the shares proposed to be issued, but not including any shares proposed to be retired in connection with such issue, sale or other disposition; or if
(b) Such issue, sale or disposition would bring the aggregate of the amount payable in connection with an involuntary liquidation of the Company with respect to all shares of Senior Stock and all shares of stock, if any, ranking on a parity with or having priority over Senior Stock in respect of dividends or of payments in liquidation to an amount in excess of the sum of the junior stock equity. If for the purposes of meeting the requirements of this clause (b), it shall have been necessary to take into consideration any earned surplus of the Company, the Company shall not thereafter pay any dividends on or make any distributions in respect of, or make any payment for the purchase or other acquisition of, junior stock which would result in reducing the junior stock equity to an amount less than the amount payable on involuntary liquidation of the Company in respect of Senior Stock and all shares ranking on a parity with or having a priority over Senior Stock in respect of dividends or of payments in liquidation at the time outstanding.
If during the period for which Income before Interest Charges is to be determined for the purpose set forth in this paragraph (2), the amount, if any, required to be expended by the Company during such period for property additions pursuant to a renewal and replacement fund or similar fund established under any indenture of mortgage or deed of trust of the Company shall exceed the amount deducted during such period in the determination of such Income before Interest Charges on account of depreciation and amortization of electric plan acquisition adjustments, such excess shall also be deducted in determining such Income before Interest Charges.
B. So long as any Senior Stock is outstanding, the Company, without the affirmative vote or written consent of at least two-thirds in interest of the Senior Stock then outstanding voting or giving consent together as a class shall not authorize any shares of any class of stock having a priority over the Senior Stock in respect of dividends or of payments in liquidation or issue any shares of any such prior ranking stock more than 12 months after the date of the vote or consent authorizing such prior ranking stock.
C. The provisions of this Article may be changed only by the affirmative vote or written consent of at least two-thirds in interest of the issued and outstanding shares of each class of capital stock of the Company voting or giving their consent in each case separately as a class; provided, however, that if any such change or proposed change would affect only one class of Senior Stock, then such change may be effected only by the affirmative vote or written consent of at least two-thirds in interest of the issued and outstanding shares of Common Stock and at least two-thirds in interest of the issued and outstanding shares of the class of Senior Stock that is affected, voting or giving their consent in each case separately as a class; and provided further, however, the holders of Senior Stock shall not be entitled to vote on an increase in the number of authorized shares of Preferred Stock or Class A Preferred Stock. In no event shall any reduction of the dividend rate or of the amounts payable upon redemption or liquidation with respect to any share of Senior Stock be made without the consent of the holder thereof, and no such reduction in
respect of the shares of any particular series of Senior Stock shall be made without the consent of all the holders of shares of such series.
D. No share of Senior Stock shall be deemed to be "outstanding" within the meaning of this Section 6 or of Section 7 if, at or prior to the time when the approval herein or therein referred to would otherwise be required, provision shall be made for its redemption, including a deposit complying with the requirements of subsection D of Section 3.
Section 7. Merger, Consolidation or Sale of All Assets Except with the affirmative vote or written consent of a majority in interest of Senior Stock then outstanding voting or giving consent together as a class, the Company shall not merge or consolidate with or into any other corporation or sell or otherwise dispose of all or substantially all of its assets (except by mortgage or pledge) unless such merger, consolidation, sale or other disposition, or the issuance or assumption of securities in the effectuation thereof shall have been ordered, approved or permitted under the Public Utility Holding Company Act of 1935.
Section 8. No Preemptive Right
Except as otherwise expressly provided by law, the holders of Senior Stock shall have no preemptive right to subscribe to any further issue of additional shares of Senior Stock or of any other class of stock now or hereafter authorized, nor for any future issue of bonds, debentures, notes or other evidence of indebtedness or other security convertible into stock.
If it is expressly required by law that, notwithstanding the provisions of the preceding sentence, any such further or future issue be offered proportionately to the stockholders, the holders of Preferred Stock only shall be entitled to subscribe for new or additional Preferred Stock, the holders of Class A Preferred Stock only shall be entitled to subscribe for new or additional Class A Preferred Stock and the holders of Common Stock only shall be entitled to subscribe for new or additional Common Stock; and notice of such increase as required by law need be given and the new shares need be offered proportionately only to the stockholders who are so entitled to subscribe.
Section 9. Immunity of Directors, Officers and Agents No director, officer or agent of the Company shall be held personally responsible for any action taken in good faith though subsequently adjudged to be in violation of this Article.
Section 10. Transfer Agent
The Company shall always have at least one transfer agent for Senior Stock, which shall be an incorporated bank or trust company of good standing.
ARTICLE XVII
PROVISIONS WITH RESPECT TO THE SERIES OF PREFERRED STOCK
1. 9.60% Preferred Stock, Series A
There shall be a series of Preferred Stock designated "9.60% Preferred Stock, Series A," and consisting of 150,000 shares with an aggregate par value of $15,000,000 and a par value per share of $100. The dividend rate and redemption prices as to said 9.60% Preferred Stock, Series A, shall be as follows:
(a) Dividends on said 9.60% Preferred Stock, Series A, shall be at the rate of 9.60% per share per annum, and no more, and shall be cumulative from June 1, 1970. Said dividends, when declared, shall be payable on the first days of March, June, September and December in each year.
(b) Redemption Prices of said 9.60% Preferred Stock, Series A, shall be $111.19 per share if redeemed on or before June 1, 1975, $108.79 per share if redeemed after June 1, 1975 and on or before June 1, 1980, $106.39 per share if redeemed after June 1, 1980 and on or before June 1, 1985, and $103.99 per share if redeemed after June 1, 1985, plus in all cases that portion of the quarterly dividend accrued thereon to the redemption date and all unpaid dividends thereon, if any.
2. 7.72% Preferred Stock, Series B
There shall be a series of Preferred Stock designated "7.72% Preferred Stock, Series B," and consisting of 200,000 shares with an aggregate par value of $20,000,000 and a par value per share of $100. The dividend rate and redemption prices as to said 7.72% Preferred Stock, Series B, shall be as follows:
(a)Dividends on said 7.72% Preferred Stock, Series B, shall be at the rate of 7.72% per share per annum, and no more, and shall be cumulative from October 1, 1971. Said dividends, when declared, shall be payable on the first days of January, April, July and October in each year.
(b)Redemption Prices of said 7.72% Preferred Stock, Series B, shall be $109.30 per share if redeemed on or before October 1, 1976, $107.37 per share if redeemed after October 1, 1976 and on or before October 1, 1981, $105.44 per share if redeemed after October 1, 1981 and on or before October 1, 1986, and $103.51 per share if redeemed after October 1, 1986, plus in all cases that portion of the quarterly dividend accrued thereon to the redemption date and all unpaid dividends thereon, if any, provided, however, that none of the 7.72% Preferred Stock, Series B shall be redeemed prior to October 1, 1976, if such redemption is for the purpose
of or in anticipation of refunding such 7.72% Preferred Stock, Series B through the use, directly or indirectly, of finds borrowed by the Company or of the proceeds of the issue by the Company of shares of any stock ranking prior to or on a parity with the 7.72% Preferred Stock, Series B as to dividends or assets, if such borrowed funds or such shares have an effective interest cost or effective dividend cost to the Company (computed in accordance with generally accepted financial principles), as the case may be, of less than 7.69% per annum.
3. 16% Preferred Stock, Series C
There shall be a series of Preferred Stock designated "16% Preferred
Stock, Series C," and consisting of 150,000 shares with an aggregate par
value of $15,000,000 and a par value per share of $100. The dividend rate
and redemption prices as to said 16% Preferred Stock, Series C, shall be as
follows:
(a)Dividends on said 16% Preferred Stock, Series C, shall be at
the rate of 16% per share per annum, and no more, and shall be cumulative
from date of issuance. Said dividends, when declared, shall be payable on
the first days of March, June, September and December in each year,
commencing March 1, 1982.
(b)Redemption Prices of said 16% Preferred Stock, Series C, shall be $116.00 per share if redeemed on or before December 1, 1986, $112.00 per share if redeemed after December 1, 1986 and on or before December 1, 1991, $108.00 per share if redeemed after December 1, 1991 and on or before December 1, 1996, $104.00 per share if redeemed after December 1, 1996 and on or before December 1, 2001, and at $101.60 per share if redeemed after December 1, 2001, plus in all cases that portion of the quarterly dividend accrued thereon to the redemption date and all unpaid dividends thereon, if any; provided, however, that none of the 16% Preferred Stock, Series C shall be redeemed prior to December 1, 1986, if such redemption is for the purpose of or in anticipation of refunding such 16% Preferred Stock, Series C through the use, directly or indirectly, of funds borrowed by the Company or of the proceeds of the issue by the company of shares of any stock ranking prior to or on a parity with the 16% Preferred Stock, Series C as to dividends or assets, if such borrowed funds or such shares have an effective interest cost or effective dividend cost to the Company (computed in accordance with generally accepted financial principles), as the case may be, of less than 16.59% per annum.
(c)As and for a sinking fund for said 16% Preferred Stock, Series C, commencing on December 1, 1986 and on or before each December 1 in each year thereafter so long as any shares of the 16% Preferred Stock, Series C remain outstanding, the Company shall, to the extent of any funds of the Company legally available therefor and except as otherwise restricted by the Company's Statement of Preferred Stock Provisions, redeem 7,500 shares of 16% Preferred Stock, Series C (or such lesser number of such shares as remain outstanding) at $100 per share plus accrued dividends to the date of redemption; provided, however, that if in any year the Company does not redeem the full number of shares of 16% Preferred Stock, Series C required to be redeemed pursuant to this sinking fund, the deficiency shall be made good on the next December 1 on which the Company has funds legally available for, and is otherwise permitted to effect, the redemption of shares of 16% Preferred Stock, Series C, pursuant to this sinking fund. The number of shares of 16% Preferred Stock, Series C, redeemed on any December 1 shall be reduced by the number of such shares purchased and cancelled by the Company during the preceding twelve-month period or redeemed during such period pursuant to subsection (b) hereof. Any shares so redeemed or purchased or cancelled may be given the status of authorized but unissued shares or Preferred Stock, but none of such shares shall be reissued as shares of 16% Preferred Stock, Series C. The Company shall have the option, which shall be noncumulative, to redeem on December 1, 1986 and on each December 1 thereafter up to an additional 7,500 shares of 16% Preferred Stock, Series C, at the sinking fund redemption price. No such optional sinking fund shall operate to reduce the number of shares of the 15% Preferred Stock, Series C, required to be redeemed pursuant to the mandatory sinking fund provisions hereinabove set forth. In the event that the Company shall at any time fail to make a full mandatory sinking fund payment on any sinking fund payment date, the Company shall not pay any dividends or make any other distributions in respect of outstanding shares of any junior stock (as that term is defined in Subsection A of Section of Article XVI of the by-laws of the Company) of the Company, other than dividends or distributions in shares of junior stock, or purchase or otherwise acquire for value any out-standing shares of junior stock, until all such payments have been made.
4. Adjustable Rate Preferred Stock, Series D
There shall be a series of Preferred Stock designated "Adjustable Rate Preferred Stock, Series D", and consisting of 350,000 shares with an aggregate par value of $35,000,000 and a par value per share of $100. The dividend rate provisions, redemption prices and sinking fund provisions as to said Adjustable Rate Preferred Stock, Series D, shall be as follows:
(a)The dividend per share on said Adjustable Rate Preferred
Stock, Series D, shall be (1) at the rate of 12% per annum per share for
the Initial Dividend Payment Period (as herein defined) (2) at the rate of
forty-one hundredth (40/100th) of one percentage point above the Applicable
Rate (as herein defined), from time to time in effect, for each subsequent
quarterly Dividend Period (as herein defined); provided, however, the
dividend rate for any Dividend Period (including the Initial Dividend
Payment Period) shall not be at a rate of less than 8% per annum per share
or greater than 13% per annum per share. Dividends shall be cumulative
from the date of issuance. Except as provided below in this paragraph,
the "Applicable Rate" for any Dividend Period shall be the highest of (i)
the Treasury Bill Rate, (ii) the Ten Year Constant Maturity Rate and (iii)
the Twenty Year Constant Maturity Rate (each as hereinafter defined) for
such Dividend Period. If the Company determines in good faith that for any
reason one or more of such rates cannot be determined for a particular
Dividend Period, then the Applicable Rate for such Dividend Period shall be
the higher of whichever of such rates can be so determined. If the Company
determines in good faith that none of such rates can be determined for a
particular Dividend Period, then the Applicable Rate in effect for the
preceding Dividend Period shall be continued for such Dividend Period.
Except as provided below in this paragraph, the "Treasury Bill
Rate" for each Dividend Period shall be the arithmetic average of the two
most recent weekly per annum market discount rates (or the one weekly per
annum market discount rate, if only one such rate shall be published during
the relevant Calendar Period (as defined below)) for three-month U.S.
Treasury bills, as published weekly by the Federal Reserve Board or its
successor agency during the Calendar Period immediately prior to the ten
calendar days immediately preceding the Dividend Payment Date for the
dividend period immediately prior to the Dividend Period for which the
dividend rate on the Adjustable Rate Preferred Stock, Series D is being
determined. If the Federal Reserve Board or its successor agency does not
publish such a weekly per annum market discount rate during such Calendar
Period, then the Treasury Bill Rate for such Dividend Period shall be the
arithmetic average of the two most recent weekly per annum market discount
rates (or the one weekly per annum market discount rate, if one such rate
shall be published during the relevant Calendar Period) for three-month
U.S. Treasury bills, as published weekly during such Calendar Period by any
Federal Reserve Bank or by any U.S. Government department or agency
selected by the Company. If a per annum market discount rate for
three-month U.S. Treasury bills shall not be published by the Federal
Reserve Board or its successor agency or by any Federal Reserve Bank or by
any U.S. Government department or agency during such Calendar Period, then
the Treasury Bill Rate for such Dividend Period shall be the arithmetic
average of the two most recent weekly per annum market discount rates (or
the one weekly per annum market discount rate, if one such rate shall be
published during the relevant Calendar Period) for all of the U.S. Treasury
bills then having maturities of not less than 80 nor more than 100 days, as
published during such Calendar Period by the Federal Reserve Board or its
successor agency or, if the Federal Reserve Board or its successor agency
shall not publish such rates, by any Federal Reserve Bank or by any U.S.
Government department or agency selected by the Company. If the Company
determines in good faith that for any reason no such U.S. Treasury bill
rates are published as provided above during such Calendar Period, then the
Treasury Bill Rate for such Dividend Period shall be the arithmetic average
of the per annum market discount rates based upon the closing bids during
such Calendar Period for each of the issues of marketable non-interest
bearing U.S. Treasury securities with a maturity of not less than 80 nor
more than 100 days from the date of each such quotation, as quoted daily
for each business day in New York City (or less frequently if daily
quotations shall not be generally available) to the Company by at least
three recognized U.S. Government securities dealers selected by the
Company. If the Company determines in good faith that for any reason the
Company cannot determine the Treasury Bill Rate for any Dividend Period as
provided above in this paragraph, the Treasury Bill Rate for such Dividend
Period shall be the arithmetic average of the per annum market discount
rates based upon the closing bids during the related Calendar Period for
each of the issues of marketable interest-bearing U.S. Treasury securities
with a maturity of not less than 80 nor more than 100 days from the date of
each such quotation, as quoted daily for each business day in New York City
(or less frequently if daily quotations shall not be generally available)
to the Company by at least three recognized U.S. Government securities
dealers selected by the Company.
Except as provided below in this paragraph, the "Ten Year Constant Maturity Rate" for each Dividend Period shall be the arithmetic average of the two most recent weekly per annum Ten Year Average Yields (or the one weekly per annum Ten Year Average Yield, if only one such Yield shall be published during the relevant Calendar Period as provided below), as published weekly by the Federal Reserve Board or its successor agency during the Calendar Period immediately prior to the ten calendar days immediately preceding the Dividend Payment Date prior to the Dividend Period for which the dividend rate on the Adjustable Rate Preferred Stock, Series D is being determined. If the Federal Reserve Board or its successor agency does not publish such a weekly per annum Ten Year Average Yield during such Calendar Period, then the Ten Year Constant Maturity Rate for such Dividend Period shall be the arithmetic average of the two most recent weekly per annum Ten Year Average Yields (or the one weekly per annum Ten Year Average Yield, if only one such Yield shall be published during such Calendar Period), as published weekly during such Calendar Period by any Federal Reserve Bank or by any U.S. Government department or agency selected by the Company. If a per annum Ten Year Average Yield shall not be published by the Federal Reserve Board or its successor agency or by any Federal Reserve Bank or by any U.S. Government department or agency during such Calendar Period, then the Ten Year Constant Maturity Rate for such Dividend Period shall be the arithmetic average of the two most recent weekly per annum average yields to maturity (or the one weekly average yield to maturity, if only one such yield shall be published during such Calendar Period) for all of the actively traded marketable U.S. Treasury fixed interest rate securities (other than Special Securities (as defined below)) then having maturities of not less than eight nor more than twelve years, as published during such Calendar Period by the Federal Reserve Board or its successor agency or, if the Federal Reserve Board or its successor agency shall not publish such yields, by any Federal Reserve Bank or by any U.S. Government department or agency selected by the Company. If the Company determines in good faith that for any reason the Company cannot determine the Ten Year Constant Maturity Rate for any Dividend Period as provided above in this paragraph, then the Ten Year Constant Maturity Rate for such Dividend Period shall be the arithmetic average of the per annum average yields to maturity based upon the closing bids during such Calendar Period for each of the issues of actively traded marketable U.S. Treasury fixed interest rate securities (other than Special Securities) with a final maturity date not less than eight nor more than twelve years from the date of each such quotation, as quoted daily for each business day in New York City (or less frequently if daily quotations shall not be generally available) to the Company by at least three recognized U.S. Government securities dealers selected by the Company.
Except as provided below in this paragraph, the "Twenty Year Constant Maturity Rate" for each Dividend Period shall be the arithmetic average of the two most recent weekly per annum Twenty Year Average Yields (or the one weekly per annum Twenty Year Average Yield, if only one such Yield shall be published during the relevant Calendar Period), as published weekly by the Federal Reserve Board or its successor agency during the Calendar Period immediately prior to the ten calendar days immediately preceding the Dividend Payment Date prior to the Dividend Period for which the dividend rate on the Adjustable Rate Preferred Stock, Series D is being determined. If the Federal Reserve Board or its successor agency does not publish such a weekly per annum Twenty Year Average Yield during such Calendar Period, then the Twenty Year Constant Maturity Rate for such Dividend Period shall be the arithmetic average of the two most recent weekly per annum Twenty Year Average Yields (or the one weekly per annum Twenty Year Average Yield, if only one such Yield shall be published during such Calendar Period), as published weekly during such Calendar Period by any Federal Reserve Bank or by any U.S. Government department or agency selected by the Company. If a per annum Twenty Year Average Yield shall not be published by the Federal Reserve Board or its successor agency or by any Federal Reserve Bank or by any U.S. Government department or agency during such Calendar Period, then the Twenty Year Constant Maturity Rate for such Dividend Period shall be the arithmetic average of the two most recent weekly per annum average yields to maturity (or the one weekly average yield to maturity, if only one such yield shall be published during such Calendar Period) for all of the actively traded marketable U.S. Treasury fixed interest rate securities (other than Special Securities) then having maturities of not less than eighteen nor more than twenty-two years, as published during such Calendar Period by the Federal Reserve Board or its successor agency or, if the Federal Reserve Board or its successor agency shall not publish such yields, by any Federal Reserve Bank or by any U.S. Government department or agency selected by the Company. If the Company determines in good faith that for any reason the Company cannot determine the Twenty Year Constant Maturity Rate for any Dividend Period as provided above in this paragraph, then the Twenty Year Constant Maturity Rate for such Dividend Period shall be the arithmetic average of the per annum average yields to maturity based upon the closing bids during such Calendar Period for each of the issues of actively traded marketable U.S. Treasury fixed interest rate securities (other than Special Securities) with a final maturity date not less than eighteen nor more than twenty-two years from the date of each such quotation, as quoted daily for each business day in New York City (or less frequently if daily quotations shall not be generally available) to the Company by at least three recognized U.S. Government securities dealers selected by the Company.
The Treasury Bill Rate, the Ten Year Constant Maturity Rate and the Twenty Year Constant Maturity Rate shall each be rounded to the nearest five one-hundredths of a percentage point.
The "Initial Dividend Payment Period" shall be that period beginning on April 19, 1983 (the date of issuance) and continuing through and including June 30, 1983. The initial dividend payment date shall be July 1, 1983.
A "Dividend Period" shall mean the three month period beginning April 1, July 1, October 1, and January 1 in each year. A "Dividend Payment Date" shall mean the first day of April, July, October, and January in each year, commencing October 1, 1983.
The amount of dividends per share payable for each Dividend Period shall be computed by dividing the dividend rate for such Dividend Period by four and applying such rate against the par value per share of the Adjustable Rate Preferred Stock, Series D. The amount of dividends payable for the Initial Dividend Period or any period shorter than a full quarterly Dividend Period shall be computed on the basis of 30-day months, a 360-day year and the actual number of days elapsed in such period.
The dividend rate with respect to each Dividend Period will be calculated as promptly as practicable by the Company according to the appropriate method described herein. The mathematical accuracy of each such calculation will be confirmed in writing by independent accountants of recognized standing. The Company will cause each dividend rate to be published in a newspaper of general circulation in New York City prior to the commencement of the new Dividend Period to which it applies and will cause notice of such dividend rate to be enclosed with the dividend payment checks next mailed to the holders of the Adjustable Rate Preferred Stock, Series D.
As used herein, the term "Calendar Period" means a period of fourteen calendar days; the term "Special Securities" means securities which can, at the option of the holder, be surrendered at face value in payment of any Federal estate tax or which provide tax benefits to the holder and are priced to reflect such tax benefits or which were originally issued at a deep or substantial discount; the term "Ten Year Average Yield" means the average yield to maturity for actively traded marketable U.S. Treasury fixed interest rate securities (adjusted to constant maturities of ten years); and the term "Twenty Year Average Yield" means the average yield to maturity for actively traded marketable U.S. Treasury fixed interest rate securities (adjusted to constant maturities of twenty years).
(b)The redemption prices of the Adjustable Rate Preferred Stock, Series D, shall be $112.00 per share if redeemed on or before April 1, 1988, $103.00 per share if redeemed after April 1, 1988 but on or before April 1, 1993, or $100.00 per share if redeemed after April 1, 1993. In each case the redemption price will also include accrued dividends to the date of redemption. None of the Adjustable Rate Preferred Stock, Series D shall be redeemed prior to April 1, 1988 if such redemption is for the purpose of or in anticipation of refunding the Adjustable Rate Preferred Stock, Series D through the use, directly or indirectly, of borrowed funds or of the proceeds of the issue by the Company of shares of any stock ranking prior to or on a parity with the Adjustable Rate Preferred Stock, Series D as to dividends or assets, if such borrowed funds or such shares have an effective interest cost or effective dividend cost (computed in accordance with generally accepted financial principles), as the case may be, of less than 12.36 % per annum per share.
(c) As and for a sinking fund for the Adjustable Rate Preferred Stock, Series D, commencing on April 1, 1988 and on or before each April 1 in each year thereafter so long as any shares of the Adjustable Rate Preferred Stock, Series D remain outstanding, the Company shall, to the extent of any funds of the Company legally available therefor and except as otherwise restricted by the Company's Statement of Preferred Stock Provisions, redeem 17,500 shares of Adjustable Rate Preferred Stock, Series D (or such lesser number of such shares as remain outstanding) at $100 per share plus accrued dividends to the date of redemption; provided, however, that if in any year the Company does not redeem the full number of shares of Adjustable Rate Preferred Stock, Series D required to be redeemed pursuant to this sinking fund, the deficiency shall be made good on the next April 1 on which the Company has funds legally available for, and is otherwise permitted to effect, the redemption of shares of Adjustable Rate Preferred Stock, Series D, pursuant to this sinking fund. The number of shares of Adjustable Rate Preferred Stock, Series D, redeemed on any April 1 shall be reduced by the number of such shares purchased and cancelled by the Company during the preceding twelve-month period or redeemed during such period pursuant to subsection (b) hereof. Any shares so redeemed or purchased or cancelled may be given the status of authorized but unissued shares of Preferred Stock, but none of such shares shall be reissued as shares of Adjustable Rate Preferred Stock, Series D. The Company shall have the option, which shall be noncumulative, to redeem on April 1, 1988 and on each April 1 thereafter up to an additional 17,500 shares of Adjustable Rate Preferred Stock, Series D, at the sinking fund redemption price. No such optional sinking fund shall operate to reduce the number of shares of the Adjustable Rate Preferred Stock, Series D, required to be redeemed pursuant to the mandatory sinking fund provisions hereinabove set forth. In the event that the Company shall at any time fail to make a full mandatory sinking fund payment on any sinking fund payment date, the Company shall not pay any dividends or make any other distributions in respect of outstanding shares of any junior stock (as that term is defined in Subsection A of Section of Article XVI of the by-laws of the Company) of the Company, other than dividends or distributions in shares of junior stock, or purchase or otherwise acquire for value any outstanding shares of junior stock, until all such payments have been made.
5. 7.60% Class A Preferred Stock, 1987 Series
There shall be a series of Preferred Stock designated "7.60% Class A Preferred Stock, 1987 Series," and consisting of 1,200,000 shares with an aggregate par value of $30,000,000 and a par value per share of $25. The dividend rate and redemption prices as to said 7.60% Class A Preferred Stock, 1987 Series, shall be as follows:
(a) Dividends on said 7.60% Class A Preferred Stock, 1987 Series, shall be at the rate of 7.60% per share per annum, and no more, and shall be cumulative from the date of issuance. Said dividends, when declared, shall be payable on the first days of February, May, August and November in each year, commencing May 1, 1987.
(b) For each of the twelve month periods commencing February 1, 1987, the redemption prices of said 7.60% Class A Preferred Stock, 1987 Series, shall be the amount per share set forth below:
Twelve Twelve Months Redemption Months Redemption Beginning Price Beginning Price February 1 Per Share February 1 Per Share 1987 $26.90 2000 $25.26 1988 26.90 2001 25.13 1989 26.90 2002 25.00 1990 26.90 2003 25.00 1991 26.90 2004 25.00 1992 26.27 2005 25.00 1993 26.14 2006 25.00 1994 26.02 2007 25.00 1995 25.89 2008 25.00 1996 25.76 2009 25.00 1997 25.64 2010 25.00 1998 25.51 2011 25.00 1999 25.38 |
plus in all cases that portion of the quarterly dividend accrued thereon to the redemption date and all unpaid dividends thereon, if any; provided, however, that none of the 7.60% Class A Preferred Stock, 1987 Series, shall be redeemed prior to February 1, 1992, if such redemption is for the purpose of or in anticipation of refunding such 7.60% Class A Preferred Stock, 1987 Series, through the use, directly or indirectly, of funds borrowed by the Company or of the proceeds of the issue by the Company of shares of any stock ranking prior to or on a parity with the 7.60% Class A Preferred Stock, 1987 Series, as to dividends or assets, if such borrowed funds or such shares have an effective interest cost or effective dividend cost to the Company (computed in accordance with generally accepted financial principles), as the case may be, of less than 7.69% per annum.
(c) As and for a sinking fund for said 7.60% Class A Preferred Stock, 1987 Series, commencing on February 1, 1992, and on each February 1 in each year thereafter so long as any shares of the 7.60% Class A Preferred Stock, 1987 Series, remain outstanding, the Company shall, to the extent of any funds of the Company legally available therefor and except as otherwise restricted by the Company's Statement of Preferred Stock Provisions, redeem 60,000 shares of 7.60% Class A Preferred Stock, 1987 Series (or such lesser number of such shares as remain outstanding) at $25 per share plus accrued dividends to the date of redemption; provided, however, that if in any year the Company does not redeem the full number of shares of 7.60% Class A Preferred Stock, 1987 Series, required to be redeemed pursuant to this sinking fund, the deficiency shall be made good on the next succeeding February 1 on which the Company has funds legally available for, and is otherwise permitted to effect, the redemption of shares of 7.60% Class A Preferred Stock, 1987 Series, pursuant to this sinking fund. At the option of the Company, the number of shares of 7.60% Class A Preferred Stock, 1987 Series, redeemed on any February 1 may be reduced by the number of such shares purchased and canceled by the Company during the preceding twelve-month period or redeemed during such period pursuant to subsection (b) hereof. Any shares so redeemed or purchased and canceled may be given the status of authorized but unissued shares of Senior Stock, but none of such shares shall be reissued as shares of 7.60% Class A Preferred Stock, 1987 Series. The Company shall have the option, which shall be noncumulative, to redeem on February 1, 1992 and on each February 1 thereafter up to an additional 60,000 shares of 7.60% Class A Preferred Stock, 1987 Series, at the sinking fund redemption price. No such optional sinking fund shall operate to reduce the number of shares of the 7.60% Class A Preferred Stock, 1987 Series, required to be redeemed pursuant to the mandatory sinking fund provisions hereinabove set forth. In the event that the Company shall at any time fail to make a full mandatory sinking fund payment on any sinking fund payment date, the Company shall not pay any dividends or make any other distributions in respect of outstanding shares of any junior stock (as that term is defined in Subsection 2D of Section 2 of Article XVI of the by-laws of the Company) of the Company, other than dividends or distributions in shares of junior stock, or purchase or otherwise acquire for value any outstanding shares of junior stock, until all such payments have been made.
6. Dutch Auction Rate Transferable Securities Class A Preferred Stock, 1988 Series
There shall be a series of Class A Preferred Stock designated "Dutch Auction Rate Transferable Securities Class A Preferred Stock, 1988 Series" (the "1988 DARTS") consisting of 2,140,000 shares with an aggregate par value of $53,500,000 and a par value per share of $25. The provisions governing the issue and sale of the 1988 DARTS in Units, certification, dividend rights, redemption, reacquisition, auction procedures, and other preferences, qualifications and special or relative rights or privileges with respect to the 1988 DARTS shall be as follows:
(1) Units
The 1988 DARTS shall be issued and sold by the Company only in units of 4,000 shares per unit ("Units"). No partial Units shall be issued and sold by the Company, and no fractional shares of the 1988 DARTS shall be issued and sold, no transfer of the 1988 DARTS in less than whole Units shall be made, nor shall any transfer in less than whole Units be registered on the transfer books of the Company or be effective for any purpose.
(2) Certification
Except as otherwise provided by law, all outstanding DARTS shall be represented by a certificate or certificates registered in the name of a nominee of the Securities Depository (as defined in Section (6)(a)(xxi) below), and no person acquiring Units shall be entitled to receive a certificate representing the 1988 DARTS. The nominee of the Securities Depository shall be the sole holder of record of the 1988 DARTS. Each purchaser of Units will receive dividends, distributions and notices according to the procedures of the Securities Depository and, if such purchaser is not a member of the Securities Depository, of such purchaser's Agent Member (as defined in Section (6)(a)(ii) below).
(3) Dividend Rights
(a) Dividends on the 1988 DARTS shall be paid, when, as and if declared by the Board of Directors of the Company out of funds legally available therefor, at the rate per annum determined as set forth below in subsection (c) of this Section (3) and no more (the "Applicable Rate"), payable on the respective dates set forth below.
(b) Dividends on the 1988 DARTS shall accrue from the date of original issuance and shall be payable commencing on May 3, 1988, and on each succeeding seventh Tuesday thereafter, except that if any of such Tuesday, the Monday preceding such Tuesday, or the Wednesday following such Tuesday is not a Business Day (as defined below), then (i) the dividend payment date shall be the first Business Day after such Tuesday that is immediately followed by a Business Day and is preceded by a Business Day that is the preceding Monday or a day after such Monday, or (ii) if the Securities Depository shall make available to its participants and members, in funds immediately available in New York City on dividend payment dates, the amount due as dividends on such dividend payment dates (and the Securities Depository shall have so advised the Trust Company (as defined in Section (6)(a)(xxx) below)), then the dividend payment date shall be the first Business Day on or after such Tuesday that is preceded by a Business Day that is the preceding Monday or a day after such Monday. "Business Day" means a day on which the New York Stock Exchange is open for trading and which is not a day on which banks in New York City are authorized by law to close. Each dividend payment date determined as provided above is referred to herein as the "Dividend Payment Date." Although any particular Dividend Payment Date may not occur on the originally scheduled Tuesday because of the exceptions discussed above, the next succeeding Dividend Payment Date shall be, subject to such exceptions, the seventh Tuesday following the originally designated Tuesday Dividend Payment Date for the prior Dividend Period. As used herein, Dividend Period means the period commencing on a Dividend Payment Date for DARTS and ending on the day next preceding the next Dividend Payment Date. Notwithstanding the foregoing, in the event of a change in law altering the minimum holding period (currently found in Section 246(c) of the Internal Revenue Code of 1986, as amended (the "Code")) required for taxpayers to be entitled to the dividends received deduction on preferred stock held by non-affiliated corporations (currently found in Section 243(a) of the Code), the Company shall adjust the period of time between Dividend Payment Dates so as to adjust uniformly the number of days (such number of days without giving effect to the exceptions referred to above being hereinafter referred to as "Dividend Period Days") in Dividend Periods commencing after the date of such change in law to equal or exceed the then current minimum holding period; provided that the number of Dividend Period Days shall not exceed by more than nine days the length of such then current minimum holding period and shall be evenly divisible by seven, and the maximum number of Dividend Period Days in no event shall exceed 98 days. Upon any such change in the number of Dividend Period Days as a result of a change in law, the Company shall give notice of such change to all Existing Holders of Units.
(c) The dividend rate on shares of the 1988 DARTS during the period from and after the date of original issuance to the Initial Dividend Payment Date (the "Initial Dividend Period") shall be 6.375 percent per annum. Commencing on the Initial Dividend Payment Date, the dividend rate on shares of the 1988 DARTS for each subsequent Dividend Period shall be at a rate per annum that results from the implementation of the Auction procedures set forth in Section (6) below.
The amount of dividends per Unit for the 1988 DARTS payable for each
Dividend Period shall be computed by multiplying the dividend rate for such
series for each Dividend Period determined in accordance with subsection
(c) above by a fraction the numerator of which shall be the number of days
in such Dividend Period (calculated by counting the first day thereof but
excluding the last day thereof) such Unit was outstanding and the
denominator of which shall be 360, and multiplying the amount so obtained
by $100,000 per Unit.
(d) Prior to each Dividend Payment Date, the Company shall pay to the Trust Company sufficient funds for the payment of declared dividends.
(e) For the purpose of determining whether and when holders of the Senior Stock are entitled to the rights to elect certain directors of the Company, described under Article XVI, Section 5(c) of these By-laws, dividends on the DARTS shall be deemed to be in arrears "in an amount equal to or exceeding four quarterly dividend payments," if, at the time dividends are in arrears for four quarterly dividend payments for Senior Stock having quarterly dividend payments, dividends on the 1988 DARTS are in arrears for each Dividend Period beginning on or after the first day of the first of the four quarterly dividend periods as to which dividends on the Senior Stock having quarterly dividends are in arrears.
(4) Redemption Provisions
(a) At the option of the Company, the Units may be redeemed out of funds legally available therefor in whole on any Dividend Payment Date at a redemption price of $25 per share of the 1988 DARTS ($100,000 per Unit) plus accrued and unpaid dividends (whether or not earned or declared) to the redemption date. Only whole Units may be redeemed. See Section (5) below for restrictions on the reissue of Units after redemption.
(b) In accordance with Article XVI, Section 3 of these By-laws, notice of redemption shall be mailed to each record holder of Units and to the Trust Company not less than 30 days prior to the date fixed for redemption thereof. Each notice of redemption shall include a statement setting forth: (i) the redemption date, (ii) the number of Units to be redeemed, (iii) the redemption price, (iv) the place or places where Units are to be surrendered for payment of the redemption price, and (v) that dividends of the Units to be redeemed will cease to accrue on such redemption date. No defect in the notice of redemption or in the mailing thereof shall affect the validity of the redemption proceedings, except as required by applicable law.
(c) If less than all of the outstanding Units are to be redeemed, the number of Units to be redeemed shall be determined by the Company and communicated to the Trust Company. In accordance with Article XVI, Section 3A of these By-laws, the Trust Company shall give notice to the Securities Depository and the Securities Depository will determine by lot under its usual operating procedures the number of Units, if any, to be redeemed from the account of the Agent Member of each Existing Holder. An Agent Member may determine to redeem Units from some Existing Holders without redeeming Units from the accounts of other Existing Holders.
(5) Reacquisition
Except in an Auction (as defined in Section (6)(a)(iii) below), the Company shall have the right, in accordance with Article XVI, Section 3E of these By-laws, and where permitted by applicable law, to purchase or otherwise acquire Units upon the best terms reasonably obtainable, but not exceeding the then current redemption price of such Units, except that no such purchase shall be made if the Company shall be in arrears in respect to payment of dividends on any shares of Senior Stock outstanding or if there shall exist an event of default as defined in Article XVI, Section 5 of these By-laws. Notwithstanding the provisions of Article XVI, Section 3D of these By-laws, Units that have been redeemed, purchased or otherwise acquired by the Company shall not be reissued as 1988 DARTS and shall either be restored to authorized but unissued shares of the Company's Class A Preferred Stock or canceled at the Company's option.
(6) Auction Procedures
(a) Certain Definitions. As used in this Section 6 of these Provisions with Respect to the series of Senior Stock, the following terms shall have the following meanings, unless the context otherwise requires:
(i) "Affiliate" shall mean any Person known to the Trust Company to be controlled by, in control of, or under common control with the Company.
(ii) "Agent Member" shall mean the member of the Securities Depository that will act on behalf of a Bidder and is identified as such in such Bidder's Purchaser's Letter.
(iii) "Auction" shall mean the periodic operation of the procedures set forth herein.
(iv) "Auction Date" shall mean the Business Day next preceding a Dividend Payment Date.
(v) "Available Units" shall have the meaning specified in paragraph (d)(i)(A) below.
(vi) "Bid" shall have the meaning specified in paragraph
(b)(i) below.
(vii) "Bidder" shall have the meaning specified in paragraph
(b)(i) below.
(viii) "Board of Directors" shall mean the Board of Directors of the Company.
(ix) "Broker-Dealer" shall mean any broker-dealer, or other entity permitted by law to perform the functions required of a Broker-Dealer herein, that has been selected by the Company and has entered into a Broker-Dealer Agreement with the Trust Company that remains effective.
(x) "Broker-Dealer Agreement" shall mean an agreement between the Trust Company and a Broker-Dealer pursuant to which such Broker-Dealer agrees to follow the procedures specified herein.
(xi) "DARTS" or "1988 DARTS" shall mean the 2,140,000 shares of Dutch Auction Rate Transferable Securities Class A Preferred Stock, 1988 Series, $25 Par Value, of the Company.
(xii) "Existing Holder," when used with respect to Units, shall mean a Person who has signed a Purchaser's Letter and is listed as the beneficial owner of such Units in the records of the Trust Company.
(xiii) "Hold Order" shall have the meaning specified in paragraph (b)(i) below.
(xiv) "Maximum Applicable Rate," on any Auction Date, shall mean the percentage of the 60-day "AA" Composite Commercial Paper Rate (as defined below) in effect on such Auction Date, determined as set forth below based on the prevailing rating of the DARTS in effect at the close of business on the day preceding such Auction Date:
Prevailing Rating Percentage AA/aa or Above........................... 110% A/a...................................... 120% BBB/baa.................................. 130% BB/ba.................................... 175% Below BB/ba.............................. 200% |
For purposes of this definition, the "prevailing rating" of
the DARTS shall be (i) AA/aa or Above, if the DARTS have a rating of AA- or
better by Standard & Poor's Corporation or its successor ("S&P") and aa3 or
better by Moody's Investors Service, Inc. or its successor ("Moody's"), or
the equivalent of both of such ratings by such agencies or a substitute
rating agency or substitute rating agencies selected as provided below,
(ii) if not AA/aa or Above, then A/a, if the DARTS have a rating of A- or
better by S&P and a3 or better by Moody's or the equivalent of both of such ratings by such agencies or a substitute rating agency or substitute rating agencies selected as provided below, (iii) if not AA/aa or Above or A/a, then BBB/Baa, if the DARTS have a rating of BBB- or better by S&P and baa3 or better by Moody's or the equivalent of both of such ratings by such agencies or a substitute rating agency or substitute rating agencies selected as provided below, and (iv) if not AA/aa or Above, A/a or BBB/baa, then BB/ba, if the DARTS have a rating of BB- or better by S&P and Ba3 or better by Moody's, or the equivalent of both of such ratings by such agencies or a substitute rating agency or substitute rating agencies selected as provided below, and (v) if not AA/aa or Above, A/a, BBB/baa or BB/ba, then Below BB/ba. The Company shall take all reasonable action necessary to enable S&P and Moody's to provide a rating for the DARTS. If either S&P or Moody's shall not make such a rating available, or neither S&P nor Moody's shall make such a rating available, Salomon Brothers Inc and Morgan Stanley & Co. Incorporated, or their successors shall select a nationally recognized securities rating agency or two nationally recognized
securities rating agencies to act as substitute rating agency or substitute rating agencies, as the case may be.
(xv) "Minimum Applicable Rate," on any Auction Date, shall mean 59% of the 60-day "AA" Composite Commercial Paper Rate in effect on such Auction Date.
(xvi) "Order" shall have the meaning specified in paragraph(b)(i) below.
(xvii) "Outstanding" shall mean, as of any date, the DARTS theretofore issued by the Company except, without duplication, (A) any DARTS theretofore canceled or delivered to the Trust Company for cancellation, or redeemed by the Company, or as to which a notice of redemption shall have been given by the Company, (B) any DARTS as to which the Company or any Affiliate thereof shall be an Existing Holder and (C) any DARTS represented by any certificate in lieu of which a new certificate has been executed and delivered by the Company.
(xviii) "Person" shall mean and include an individual, a partnership, a corporation, a trust, an unincorporated association, a joint venture or other entity or a government or any agency or political subdivision thereof.
(xix) "Potential Holder" shall mean any Person, including any Existing Holder, (A) who shall have executed and delivered or caused to be delivered a Purchaser's Letter to the Trust Company and (B) who may be interested in acquiring Units (or, in the case of an Existing Holder, additional Units).
(xx) "Purchaser's Letter" shall mean a letter addressed to the Company, the Trust Company, Broker-Dealer and other persons in which a Person agrees, among other things, to offer to purchase, purchase, offer to sell and/or sell Units as set forth herein.
(xxi) "Securities Depository" shall mean The Depository Trust Company and its successors and assigns or any other securities depository selected by the Company which agrees to follow the procedures required to be followed by such securities depository in connection with the DARTS.
(xxii) "Sell Order" shall have the meaning specified in paragraph
(b)(i) below.
(xxiii) "60-day 'AA' Composite Commercial Paper Rate," on any date, means (i) the interest equivalent of the 60-day rate on commercial paper placed on behalf of issuers whose corporate bonds are rated "AA" by S&P or the equivalent of such rating by S&P or another rating agency, as such 60-day rate is made available on a discount basis or otherwise by the Federal Reserve Bank of New York for the Business Day immediately preceding such date, or (ii) in the event that the Federal Reserve Bank of New York does not make available such a rate, then the interest equivalent of the 60-day rate on commercial paper placed on behalf of such issuers, as quoted on a discount basis or otherwise by Morgan Stanley & Co. Incorporated or, in lieu thereof, any affiliates or successor thereof (the "Commercial Paper Dealer"), to the Trust Company for the close of business on the Business Day immediately preceding such date. If the Commercial Paper Dealer does not quote a rate required to determine the 60-day "AA" Composite Commercial Rate, the 60-day "AA" Composite Commercial Paper Rate shall be determined on the basis of the quotation or quotations furnished by any Substitute Commercial Paper Dealer or Substitute Commercial Paper Dealers selected by the Company to provide such rate. If the Company, however, shall adjust the number of Dividend Period Days in the event of a change in the dividends received deduction minimum holding period contained in the Internal Revenue Code of 1986, as amended, with the result that (i) the Dividend Period Days shall be fewer than 70 days, such rate shall be the interest equivalent of the 60-day rate on such commercial paper, (ii) the Dividend Period Days shall be 70 or more days but fewer than 85 days, such rate shall be the arithmetic average of the interest equivalent of the 60-day and 90-day rates on such commercial paper, and (iii) the Dividend Period Days shall be 85 or more days but 98 or fewer days, such rate shall be the interest equivalent of the 90-day rate on such commercial paper. For the purposes of such definition, "interest equivalent" means the equivalent yield on a 360-day basis of a discount basis security to an interest-bearing security and "Substitute Commercial Paper Dealer" shall mean any commercial paper dealer that is a leading dealer in the commercial paper market, provided that neither such dealer nor any of its affiliates is a Commercial Paper Dealer.
(xxiv) "Submission Deadline" shall mean 12:30 P.M., New York City time, on any Auction Date or such other time on any Auction Date by which Broker-Dealers are required to submit Orders to the Trust Company as specified by the Trust Company from time to time.
(xxv) "Submitted Bid" shall have the meaning specified inparagraph (d)(i) below.
(xxvi) "Submitted Hold Order" shall have the meaning specified in paragraph (d)(i) below.
(xxvii) "Submitted Order" shall have the meaning specified in paragraph (d)(i) below.
(xxviii) "Submitted Sell Order" shall have the meaning specified in paragraph (d)(i) below.
(xxvix) "Sufficient Clearing Bids" shall have the meaning specified in paragraph (d)(i) below.
(xxx) "Trust Company" shall mean Bankers Trust Company and its successor, and assigns or any other bank, trust company or other entity selected by the Company which agrees to follow the Auction Procedures described in this Section (6) for the purposes of determining the Applicable Rate for the DARTS.
(xxxi) "Winning Bid Rate" shall have the meaning specified in paragraph (d)(i) below.
(b) Orders by Existing Holders and Potential Holders
(i) On or prior to each Auction Date:
(A) each Existing Holder may submit to a Broker-Dealer information as to:
(1) the number of Outstanding Units, if any, held by such Existing Holder which such Existing Holder desires to continue to hold without regard to the Applicable Rate for the next succeeding Dividend Period;
(2) the number of Outstanding Units, if any, held by such Existing Holder which such Existing Holder desires to continue to hold, provided that the Applicable Rate for the next succeeding Dividend Period
shall not be less than the rate per annum specified by such Existing Holder; and/or (3) the number of Outstanding Units, if any, held by such Existing Holder which such Existing Holder offers to sell without regard to the Applicable Rate for the next succeeding Dividend Period; and
(B) Each Broker-Dealer, using a list of Potential Holders that shall be maintained in good faith for the purpose of conducting a competitive Auction shall contact Potential Holders, including Persons that are not Existing Holders, on such list to determine the number of Outstanding Units, if any, which each such Potential Holder offers to purchase, provided that the Applicable Rate for the next succeeding Dividend Period shall not be less than the rate per annum specified by such Potential Holder.
For the purposes hereof, the communication to a Broker-Dealer of information referred to in clause (A) or (B) of this paragraph (b)(i) is hereinafter referred to as an "Order" and each Existing Holder and each Potential Holder placing an Order is hereinafter referred to as a "Bidder"; and Order containing the information referred to in clause (A)(1) of this
paragraph (b)(i) is hereinafter referred to as a "Hold Order"; an Order
containing the information referred to in clause (A)(2) or (B) of this
paragraph (b)(i) is hereinafter referred to as a "Bid"; and an Order
containing the information referred to in clause (A)(3) of this paragraph
(b)(i) is hereinafter referred to as a "Sell Order."
(ii) (A) A Bid by an Existing Holder shall constitute an irrevocable offer to sell:
(1) the number of Outstanding Units specified in such Bid if the Applicable Rate determined on such Auction Date shall be less than the rate specified therein; or
(2) such number or a lesser number of Outstanding
Units to be determined as set forth in paragraph (e)(i)(D) if the Applicable Rate determined on such Auction Date shall be equal to the rate specified therein; or
(3) a lesser number of Outstanding Units to be determined as set forth in paragraph (e)(ii)(C) if such specified rate shall be higher than Maximum Applicable Rate and Sufficient Clearing Bids do not exist.
(B) A Sell Order by an Existing Holder shall constitute an irrevocable offer to sell:
(1) the number of Outstanding Units specified in such Sell Order; or
(2) such number or a lesser number of Outstanding Units to be determined as set forth in paragraph (e)(ii)(C) if Sufficient Clearing Bids do not exist.
(C) A Bid by a Potential Holder shall constitute an irrevocable offer to purchase:
(1) the number of Outstanding Units specified in such Bid if the Applicable Rate determined on such Auction Date shall be higher than the rate specified therein; or
(2) such number of a lesser number of Outstanding Units to be determined as set forth in paragraph (e)(i)(E) if the Applicable Rate determined on such Auction Date shall be equal to the rate specified therein.
(c) Submission of Orders by Broker-Dealers to Trust Company (i) Each Broker-Dealer shall submit in writing to the Trust Company prior to the Submission Deadline on each Auction Date all Orders obtained by such Broker-Dealer and specifying with respect to each Order:
(A) the name of the Bidder placing such Order;
(B) the aggregate number of Outstanding Units that are subject of such Order;
(C) to the extent that such Bidder is an Existing Holder:
(1) the number of Outstanding Units, if any, subject to any Hold Order placed by such Existing Holder;
(2) the number of Outstanding Units, if any, subject to any Bid placed by such Existing Holder and the rate specified in such Bid; and
(3) the number of Outstanding Units, if any, subject to any Sell Order placed by such Existing Holder; and
(D) to the extent such Bidder is a Potential Holder, the rate specified in such Potential Holder's Bid.
(ii) If any rate specified in any Bid contains more than three figures to the right of the decimal point, the Trust Company shall round such rate up to the next highest one-thousandth (.001) of 1%.
(iii) If an Order or Orders covering all of the Outstanding Units held by an Existing Holder is not submitted to the Trust Company prior to the Submission Deadline, the Trust Company shall deem a Hold Order to have been submitted on behalf of such Existing Holder covering the number of Outstanding Units held by such Existing Holder and not subject to Orders submitted to the Trust Company.
(iv) If one or more Orders covering in the aggregate more than the number of Outstanding Units held by an Existing Holder are submitted to the Trust Company, such Orders shall be considered valid as follows and in the following order or priority:
(A) any Hold Order submitted on behalf of such Existing Holder shall be considered valid up to and including the number of Outstanding Units held by such Existing Holder; provided that if more than one Hold Order is submitted on behalf of such Existing Holder and the number of Units subject to such Hold Orders exceeds the number of Outstanding Units held by such Existing Holder, the number of Units subject to such Hold Orders shall be reduced pro rata so that such Hold Orders shall cover the number of Outstanding Units held by such Existing Holder;
(B) (1) any Bid shall be considered valid up to and including
the excess of the number of Outstanding Units held by such Existing Holder
over the number of Units subject to Hold Orders referred to in paragraph
(c)(iv)(A);
(2) subject to clause (1) above, if more than one Bid with the same rate is submitted on behalf of such Existing Holder and the number of Outstanding Units subject to such Bids is greater than such excess, the number of Outstanding Units subject to such Bids shall be reduced pro rata so that such Bids shall cover the number of Outstanding Units equal to such excess; and
(3) subject to clause (1) above, if more than one Bid with different rates is submitted on behalf of such Existing Holder, such Bids shall be considered valid in the ascending order of their respective rates and in any such event the number, if any, of such Outstanding shares subject to Bids not valid under this clause (B) shall be treated as the
subject of a Bid by a Potential Holder; and (C) any Sell Order shall be
considered valid up to and including the excess of the number of
Outstanding Units held by such Existing Holder over the number of
Outstanding Units subject to Hold Orders referred to in paragraph
(c)(iv)(A) and Bids referred to in paragraph (c)(iv)(B).
(v) If more than one Bid is submitted on behalf of any Potential Holder, each Bid submitted shall be a separate Bid with the rate and Units therein specified.
(vi) If any rate specified in any Bid is lower than the Minimum Applicable Rate for the Dividend Period to which such Bid relates, such Bid shall be deemed to be a Bid specifying a rate equal to such Minimum Applicable Rate.
(vii) Orders by Existing Holders and Potential Holders must specify numbers of Units in whole Units. Any Order that specifies a number of Units other than in whole shares will be invalid and will not be considered a Submitted Order for purposes of an Auction.
(d) Determination of Sufficient Clearing Bids, Winning Bid Rate and Applicable Rate (i) Not earlier than the Submission Deadline on each Auction Date, the Trust Company shall assemble all Orders submitted or deemed submitted to it by the Broker-Dealers (each such Order as submitted or deemed submitted by a Broker-Dealer being hereinafter referred to individually as a "Submitted Hold Order" a "Submitted Bid" or a "Submitted Sell Order," as the case may be, or as a "Submitted Order") and shall determine:
(A) the excess of the total number of Outstanding Units over the number of Outstanding Units that are the subject of Submitted Hold Orders (such excess being hereinafter referred to as the "Available Units");
(B) from the Submitted Orders, whether:
(1) the number of Outstanding Units that are the subject of Submitted Bids by Potential Holders specifying one or more rates equal to or lower than the Maximum Applicable Rate exceeds or is equal to the sum of:
(2) [a] the number of Outstanding Units that are the
subject of Submitted Bids by Existing Holders specifying one or more rates higher than the Maximum Applicable Rate, and [b] the number of Outstanding Units that are subject to Submitted Sell Orders (if such excess of such equality exists (other than because the number of Outstanding Units in clauses [a] and [b] above are each zero because all of the Outstanding Units are the subject of Submitted Hold Orders), such Submitted Bids in clause (1) above being hereinafter referred to collectively as "Sufficient Clearing Bids"); and (C) if Sufficient Clearing Bids exist, the lowest rate specified in the Submitted Bids (the "Winning Bid Rate"), which if:
(1) each Submitted Bid from Existing Holders specifying the
Winning Bid Rate and all other Submitted Bids from Existing Holders specifying lower rates were rejected, thus entitling such Existing Holders to continue to hold the Units that are the subject of such Submitted Bids, and (2) each Submitted Bid from Potential Holders specifying the Winning Bid Rate and all other Submitted Bids from Potential Holders specifying lower rates were accepted, thus entitling the Potential Holders to purchase the Units that are the subject of such Submitted Bids, would result in the number of shares subject to all Submitted Bids specifying the Winning Bid Rate or a lower rate being at least equal to the Available Units.
(ii) Promptly after the Trust Company has made the determinations pursuant to paragraph (d)(i), the Trust Company shall advise the Company of the Maximum Applicable Rate and the Minimum Applicable Rate and, based on such determinations, the Applicable Rate for the next succeeding Dividend Period as follows:
(A) if Sufficient Clearing Bids exist, that the Applicable Rate for the next succeeding Dividend Period shall be equal to the Winning Bid Rate so determined;
(B) if Sufficient Clearing Bids do not exist (other than because all of the Outstanding Units are the subject of Submitted Hold Orders), that the Applicable Rate for the next succeeding Dividend Period shall be equal to the Maximum Applicable Rate; or (C) if all the Outstanding Units are the subject of Submitted Hold Orders, that the Applicable Rate for the next succeeding Dividend Period shall be equal to the Minimum Applicable Rate.
(e) Acceptance and Rejection of Submitted Bids and Submitted Sell Orders and Allocation of Shares Based on the determinations made pursuant to paragraph (d)(i), the Submitted Bids and Submitted Sell Orders shall be accepted or rejected and the Trust Company shall take such other action as set forth below:
(i) If Sufficient Clearing Bids have been made, subject to the provisions of paragraphs (e)(iii) and (e)(iv), Submitted Bids and Submitted Sell Orders shall be accepted or rejected in the following order or priority and all other Submitted bids shall be rejected:
(A) the Submitted Sell Orders of Existing Holders shall be accepted and the Submitted Bid of each of the Existing Holders specifying any rate that is higher than the Winning Bid Rate shall be rejected, thus requiring each such Existing Holder to sell the Outstanding Units that are the subject of such Submitted Bid;
(B) the Submitted Bid of each of the Existing Holders specifying any rate that is lower than the Winning Bid Rate shall be accepted, thus entitling each such Existing Holder to continue to hold the Outstanding Units that are the subject of such Submitted Bid;
(C) the Submitted Bid of each of the Potential Holders specifying any rate that is lower than the Winning Bid Rate shall be accepted;
(D) the Submitted Bid of each of the Existing Holders
specifying a rate that is equal to the Winning Bid Rate shall be accepted,
thus entitling each such Existing Holder to continue to hold the
Outstanding Units that are the subject of such Submitted Bid, unless the
number of Outstanding Units subject to all such Submitted Bids shallbe
greater than the number of Outstanding Units ("remaining shares") equal to
the excess of the Available Units over the number of Outstanding Units
subject to Submitted Bids described in paragraphs (e)(i)(B) and (e)(i)(C),
in which event the Submitted Bids of each such Existing Holder shall be
rejected, and each such Existing Holder shall be required to sell
Outstanding Units, but only in an amount equal to the difference between
(1) the number of Outstanding Units then held by such Existing Holder
subject to such Submitted Bid and (2) the number of Units obtained by
multiplying (x) the number of remaining shares by (y) a fraction the
numerator of which shall be the number of Outstanding Units held by such
Existing Holder subject to such Submitted Bid and the denominator of which
shall be the sum of the number of Outstanding Units subject to such
Submitted Bids made by all such Existing Holders that specified a rate
equal to the Winning Bid Rate; and
(E) the Submitted Bid of each of the Potential Holders
specifying a rate that is equal to the Winning Bid Rate shall be accepted
but only in an amount equal to the number of Outstanding Units obtained by
multiplying (x) the difference between the Available Units and the number
of Outstanding Units subject to the Submitted Bids described inparagraphs
(e)(i)(B), (e)(i)(C) and (e)(i)(D) by (y) a fraction the numerator of which
shall be the number of Outstanding shares of Units subject to such
Submitted Bid and the denominator of which shall be the sum of the number
of Outstanding Units subject to such Submitted Bids made by all such
Potential Holders that specified rates equal to the Winning Bid Rate.
(ii) If Sufficient Clearing Bids have been made (other than because all of the Outstanding Units are subject to Submitted Hold Orders), subject to the provisions of paragraphs (e)(iii) and (e)(iv), Submitted Orders shall be accepted or rejected as follows in the following order of priority and all other Submitted Bids shall be rejected:
(A) the Submitted Bid of each Existing Holder specifying any rate that is equal to or lower than the Maximum Applicable Rate shall be accepted, thus entitling such Existing Holder to continue to hold the Outstanding Units that are the subject of such Submitted Bid;
(B) the Submitted Bid of each Potential Holder specifying any rate that is equal to or lower than the Maximum Applicable Rate shall be accepted, thus requiring such Potential Holder to purchase the Outstanding Units that are the subject of such Submitted Bid; and
(C) the Submitted Bids of each Existing Holder specifying any rate that is higher than the Maximum Applicable Rate shall be rejected and the Submitted Sell Orders of each Existing Holder shall be accepted, in both cases only in an amount equal to the difference between (1) the number of Outstanding Units then held by such Existing Holder subject to such Submitted Bid or Submitted Sell Order and (2) the number of Units obtained by multiplying (x) the difference between the Available Units and the aggregate number of Outstanding Units subject to Submitted Bids described in paragraphs (e)(ii)(A) and (e)(ii)(B) by (y) a fraction the numerator of which shall be the number of Outstanding Units held by such Existing Holder subject to such Submitted Bid or Submitted Sell Order and the denominator of which shall be the number of Outstanding Units subject to all such Submitted Bids and Submitted Sell Orders.
(iii) If, as a result of the procedures described in paragraph (e)(i) or (e)(ii), any Existing Holder would be entitled or required to sell, or any Potential Holder would be entitled or required to purchase, a fraction of a Unit on any Auction Date, the Trust Company shall, in such manner as, in its sole discretion, it shall determine, round up or down the number of Units to be purchased or sold by any Existing Holder or Potential Holder on such Auction Date so that the number of Outstanding shares purchased or sold by each Existing Holder or Potential Holder on such Auction Date shall be whole Units.
(iv) If, as a result of the procedures described in paragraph
(e)(i), any Potential Holder would be entitled or required to purchase less
than a whole Unit on any Auction Date, the Trust Company shall, in such
manner as, in its sole discretion, it shall determine, allocate Units for
purchase among Potential Holders so that only whole Units are purchased on
such Auction Date by any Potential Holder, even if such allocation results
in one or more of such Potential Holders not purchasing Units on such
Auction Date.
(v) Based on the results of each Auction, the Trust Company shall determine the aggregate number of Outstanding Units to be purchased and the aggregate number of Outstanding Units to be sold by Potential Holders and Existing Holders on whose behalf each Broker-Dealer submitted Bids or Sell Orders, and, with respect to each Broker-Dealer, to the extent that such aggregate number of Outstanding shares to be purchased and such aggregate number of Outstanding shares to be sold differ, determine to which other Broker-Dealer or Broker-Dealers acting for one or more purchasers such Broker-Dealer shall deliver, or from which other Broker-Dealer or Broker-Dealers acting for one or more sellers such Broker-Dealer shall receive, as the case may be, Outstanding Units.
(f) Miscellaneous
The Board of Directors may interpret the provisions of these Auction Procedures to resolve any inconsistency or ambiguity, and may remedy any formal defect or make any other change or modification which does not adversely affect the rights of Existing Holders of Units. An Existing Holder (A) may sell, transfer or otherwise dispose of Units only pursuant to a Bid or Sell Order in accordance with the procedures described in this paragraph or to or through a Broker-Dealer or to a Person that has delivered a signed copy of a Purchaser's Letter to the Trust Company, provided that in the case of all transfers other than pursuant to Auctions such Existing Holder, its Broker-Dealer or its Agent Member advises the Trust Company of such transfer and (B) shall have the ownership of the Units held by it maintained in book entry form by the Securities Depository in the account of its Agent Member, which in turn will maintain records of such Existing Holder's beneficial ownership. Neither the Company nor any Affiliate shall submit an Order, either directly or indirectly, in any Auction. Except as otherwise provided by law, all of the Outstanding Units shall be represented by a certificate registered in the name of the nominee of the Securities Depository and no Person acquiring Units shall be entitled to receive a certificate representing such shares.
(g) Headings of Subdivisions
The headings of the various subdivisions of these Auction Procedures are for convenience of reference only and shall not affect the interpretation of any of the provisions hereof.
ARTICLE XVIII
AMENDMENTS
Except as otherwise provided in Article XVI hereof, these By-Laws may be altered, amended or repealed at any meeting of the stockholders called for the purpose by vote of a majority of stock present and voting thereon or at any meeting of the Board of Directors called for the purpose by vote of a majority of the Board of Directors.
Exhibit 3.5.1
ARTICLES OF INCORPORATION
OF
NORTH ATLANTIC ENERGY CORPORATION
THE UNDERSIGNED, ACTING AS INCORPORATOR OF A CORPORATION UNDER THE NEW HAMPSHIRE BUSINESS CORPORATION ACT, ADOPTS THE FOLLOWING ARTICLES OF INCORPORATION FOR SUCH CORPORATION:
ARTICLE I
The name of the corporation is North Atlantic Energy Corporation.
ARTICLE II
The period of its duration is perpetual.
ARTICLE III
The corporation is empowered to transact any and all lawful business for which corporations may be incorporated under RSA 293-A. The principal purpose for which the corporation is organized is to own a joint ownership interest in the Seabrook nuclear power project and to sell electricity generated by the Seabrook project.
ARTICLE IV
The aggregate number of shares which the corporation shall have authority to issue is 1000 shares of Common Stock with a par value of $1 per share.
ARTICLE V
The capital stock will be sold or offered for sale within the meaning of RSA 421-B (New Hampshire Securities Act).
ARTICLE VI
Shareholders shall have no preemptive rights to acquire unissued or treasury shares or securities convertible into such shares or carrying a right to subscribe or acquire such shares.
ARTICLE VII
Provisions for the regulation of the internal affairs of the corporation shall be set forth in the By-Laws of the corporation.
ARTICLE VIII
The address of the initial registered office of the corporation is Rath, Young, Pignatelli and Oyer, P.A., Two Capital Plaza, P.O. Box 854, Concord, NH 03302-0854 and the name of the initial registered agent at such address is Thomas D. Rath.
ARTICLE IX
The number of directors constituting the initial board of directors of the corporation is one, and the name and address of the person who is to serve as director until the first annual meeting of shareholders or until his successor is elected and shall qualify is:
Name Address
Thomas D. Rath Rath, Young, Pignatelli and Oyer, P.A.
Two Capital Plaza, P.O. Box 854
Concord, NH 03302-0854
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ARTICLE X
The name and address of the incorporator is:
Thomas D. Rath Rath, Young, Pignatelli and Oyer, P.A.
Two Capital Plaza, P.O. Box 854
Concord, NH 03302-0854
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ARTICLE XI
The directors and officers of the corporation shall not be liable to the corporation or its shareholders for monetary damages for breach of fiduciary duty as a director or officer except with respect to:
1) any breach of the director's and/or officer's duty of loyalty to the corporation or its shareholders;
2) acts or omissions which are not in good faith or which involve intentional misconduct or a knowing violation of law;
3) actions for which a director may be liable under RSA 293-A:48; or
4) any transaction from which the director or officer derived an improper personal benefit.
Dated: September 20, 1991
/S/Thomas D. Rath
Thomas D. Rath
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Exhibit 3.5.2
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
NORTH ATLANTIC ENERGY CORPORATION
PURSUANT TO THE PROVISIONS OF SECTION 61 OF THE NEW HAMPSHIRE BUSINESS CORPORATION ACT, THE UNDERSIGNED CORPORATION ADOPTS THE FOLLOWING ARTICLES OF AMENDMENT TO ITS ARTICLES OF INCORPORATION:
FIRST: The name of the corporation is North Atlantic Energy
Corporation.
SECOND: The following amendments of the Articles of Incorporation
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were adopted by resolution of the board of directors of the corporation on October 16, 1991, in the manner prescribed by the New Hampshire Business Corporation Act:
That the Articles of Incorporation of the corporation be amended by deleting the current Article IX and inserting a new Article IX as follows:
The number of directors constituting the initial board of directors of the corporation is nine, and the names and addresses of the persons who are to serve as directors until the first annual meeting of shareholders or until their successors are elected and shall qualify are:
Bernard M. Fox 29 St. Andrews Drive
Avon, CT 06001
Robert E. Busch 292 Foot Hills Road
Higganum, CT 06441
John P. Cagnetta 97 Butternut Circle
Wethersfield, CT 06109
John F. Opeka 10 Nottingham Drive
Old Lyme, CT 06371
Lawrence H. Shay 21 Goodwin Street
Niantic, CT 06357
Walter F. Torrance, Jr. 575A Heritage Village
Southbury, CT 06488
William B. Ellis 31 Pound Foolish Lane
Glastonbury, CT 06033
Frank R. Locke 9 Chickadee Court
Bedford, NH 03110
Ted C. Feigenbaum 8 Evergreen Way
Stratham, NH 03885
NORTH ATLANTIC ENERGY CORPORATION
Dated: October 16, 1991 By: /S/Thomas D. Rath
Thomas D. Rath, President
and
By: /S/Thomas D. Rath
Thomas D. Rath, Secretary
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
NORTH ATLANTIC ENERGY CORPORATION
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PURSUANT TO THE PROVISIONS OF SECTION 61 OF THE NEW HAMPSHIRE BUSINESS CORPORATION ACT, THE UNDERSIGNED CORPORATION ADOPTS THE FOLLOWING ARTICLES OF AMENDMENT TO ITS ARTICLES OF INCORPORATION:
FIRST: The name of the corporation is North Atlantic Energy
Corporation.
SECOND: The following amendments of the Articles of Incorporation
|
were adopted by resolution of the board of directors of the corporation on June 1, 1992, in the manner prescribed by the New Hampshire Business Corporation Act:
That the Articles of Incorporation of the corporation be amended by adding the following language to Article IV:
No nonvoting equity securities of the corporation shall be issued; this provision is included in these Articles of Incorporation in compliance with Section 1123 of the United States Federal Bankruptcy Code, 11 U.S.C. Section 1123, and shall have no further force and effect beyond that required by such Section and for so long as such Section is in effect and applicable to the corporation.
THIRD: No shares of the corporation were outstanding at the time of adoption of the foregoing amendment.
NORTH ATLANTIC ENERGY CORPORATION
Dated: June 2, 1992 By: /S/Robert E. Busch
Robert E. Busch
Executive Vice-President
By: /S/John B. Keane
John B. Keane
Assistant Secretary
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Exhibit 3.5.3
NORTH ATLANTIC ENERGY CORPORATION
BY-LAWS
AS AMENDED TO NOVEMBER 8, 1993
ARTICLE I
MEETINGS OF SHAREHOLDERS
Section 1. Meetings of the shareholders may be held at such place either within or without the State of New Hampshire as may be designated by the Board of Directors.
Section 2. The Annual Meeting of Shareholders for the election of Directors and the transaction of such other business as may properly be brought before the meeting shall be held in March, April, May, June or July in each year on the day and at the hour designated by the Board of Directors.
Section 3. Notice of all meetings of shareholders, stating the day, hour and place thereof, shall be given by a written or printed notice, delivered or sent by mail, at least ten days but not more than fifty days before the date of the meeting, to each shareholder of record on the books of the Company and entitled to vote at such meeting, at the address appearing on such books, unless such shareholder shall waive notice in writing. Notice of a special meeting of shareholders shall state also the general purpose or purposes of such meeting and no business other than that of which notice has been so given shall be transacted at such meeting.
Section 4. At all meetings of shareholders each share of Common Stock entitled to vote, and represented in person or by proxy, shall be entitled to one vote.
Section 5. The Board of Directors may fix a date as the record date for the purpose of determining shareholders entitled to notice of and to vote at any meeting of shareholders or any adjournment thereof, such date in any case to be not earlier than the date such action is taken by the Board of Directors and not more than fifty days and not less than ten days immediately preceding the date of such meeting. In such case only such shareholders or their legal representatives as shall be shareholders on the record date so fixed shall be entitled to such notice and to vote at such meeting or any adjournment thereof, notwithstanding the transfer of any shares of stock on the books of the Company after any such record date so fixed.
ARTICLE II
DIRECTORS
Section 1. The business, property and affairs of the Company shall be
managed by a Board of not less than three nor more than sixteen Directors.
Within these limits, the number of positions on the Board of Directors for
any year shall be the number fixed by resolution of the shareholders or of
the Board of Directors, or, in the absence of such a resolution, shall be
the number of Directors elected at the preceding Annual Meeting of
Shareholders. The Directors so elected shall continue in office until
their successors have been elected and qualified, except that a Director
shall cease to be in office upon his death, resignation, lawful removal or
court order decreeing that he is
no longer a Director in office.
Section 2. The Board of Directors shall have power to fill vacancies that may occur in the Board, or any other office, by death, resignation or otherwise, by a majority vote of the remaining members of the Board, and the person so chosen shall hold the office until the next Annual Meeting of Shareholders and until his successor shall be elected and qualified.
Section 3. The Board of Directors shall have power to employ such and so many agents and factors or employees as the interests of the Company may require, and to fix the compensation and define the duties of all of the officers, agents, factors and employees of the Company. All the officers, agents, factors and employees of the Company shall be subject to the order of said Board, shall hold their offices at the pleasure of said Board, and may be removed at any time by said Board at its discretion.
Section 4. Any one or more Directors may be removed from office at a meeting of Shareholders expressly called for that purpose with or without any showing of cause by an affirmative vote of the holders of a majority of the Company's issued and outstanding shares entitled to vote.
ARTICLE III
MEETINGS OF DIRECTORS
Section 1. A regular meeting of the Board of Directors shall be held annually, without notice, directly following the annual meeting of the shareholders, or as soon as practicable thereafter, for the election of officers and the transaction of other business.
Section 2. All other regular meetings of the Board of Directors may be held at such time and place as the Board may from time to time determine. Special meetings of the Board may be held at any place upon call of the Chairman (if there be one) or the President, or, in the event of the absence or inability of either to act, of a Vice President, or upon call of any three or more directors.
Section 3. Oral or written notice of the time and place of each special meeting of the Board of Directors shall be given to each director personally or by telephone, or by mail or telegraph at his last-known post office address, at least twenty-four hours prior to the time of the meeting, provided that any director may waive such notice in writing or by telegraph or by attendance at such meeting.
Section 4. One-third of the number of directors as fixed in accordance with Section 1 of Article II of these By-Laws shall constitute a quorum. A number less than a quorum may adjourn from time to time until a quorum is present. In the event of such an adjournment, notice of the adjourned meeting shall be given to all Directors.
Section 5. Except as otherwise provided by these By-Laws, the act of a majority of the Directors present at a meeting at which a quorum is present at the time of the act shall be the act of the Board of Directors.
Section 6. Any resolution in writing concerning action to be taken by the Company, which resolution is approved and signed by all of the Directors, severally and collectively, shall have the same force and effect as if such action were authorized at a meeting of the Board of Directors duly called and held for that purpose, and such resolution, together with the Directors'written approval thereof, shall be recorded by the Secretary in the minute book of the Company.
Section 7. One or more Directors or members of a committee of the Board of Directors may participate in a meeting of the Board of Directors or of such committee by means of conference telephone or similar communications equipment enabling all Directors participating in the meeting to hear one another, and participation in a meeting in such manner shall constitute presence in person at such meeting.
ARTICLE IV
OFFICERS
Section 1. At its annual meeting, the Board of Directors shall elect
a President, one or more Vice Presidents, a Secretary, a Treasurer, one or
more Assistant Secretaries, one or more Assistant Treasurers, and, if the
Board shall so determine, a Chairman, each of whom shall, subject to the
provisions of Article IV, Section 3, hereof, hold office until the next
annual election of officers and until his successor shall have been elected
and qualified. Any two or more offices may be held by the same person
except that the offices of the President and Secretary may not be
simultaneously held by the same person. The Board shall also elect at such
meeting, and, may elect at any regular or special meeting, such other
officers as it may deem
necessary for the prompt and orderly transaction of the business of the
Company. Any vacancy occurring in any office may be filled at any regular
meeting of the Board or at any special meeting of the Board held for that
purpose.
Section 2. In addition to such powers and duties as these By-Laws and the Board of Directors may prescribe, and except as may be otherwise provided by the Board, each officer shall have the powers and perform the duties which by law and general usage appertain to his particular office.
Section 3. Any officer may be removed, with or without cause, at any time by the Board in its discretion. Vacancies among the officers by reason of death, resignation, removal (with or without cause) or other reason shall be filled by the Board of Directors.
ARTICLE V
CHAIRMAN AND PRESIDENT
Section 1. The Chairman, if such office shall be filled by the Directors, shall, when present, preside at all meetings of said Board and of the stockholders. He shall have such other authority and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors.
Section 2. If the Chairman shall be absent or unable to perform the duties of his office, or if the office of the Chairman shall not have been filled by the Directors, the President shall preside at meetings of the Board of Directors and of the stockholders. He shall have such other authority and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors.
ARTICLE VI
VICE PRESIDENTS
Section 1. The Vice Presidents shall have such powers and duties as may be assigned to them from time to time by the Board of Directors or the President. One of such Vice Presidents may be designated by said Board as Executive Vice President and, if so designated, shall exercise the powers and perform the duties of the President in the absence of the President or if the President is unable to perform the duties of his office. The Board of Directors may also designate one or more of such Vice Presidents as Senior Vice President(s).
ARTICLE VII
SECRETARY
Section 1. The Secretary shall keep the minutes of all meetings of the stockholders and of the Board of Directors. He shall give notice of all meetings of the stockholders and of said Board. He shall record all votes taken at such meetings. He shall be custodian of all contracts, leases, assignments, deeds and other instruments in writing and documents not properly belonging to the office of the Treasurer, and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors, the Chairman, the President or by law. He shall be the registered agent of the Company.
Section 2. He shall have the custody of the Corporate Seal of the Company and shall affix the same to all instruments requiring a seal except as otherwise provided in these By-Laws.
ARTICLE VIII
ASSISTANT SECRETARIES
Section 1. One or more Assistant Secretaries shall perform the duties of the Secretary if the Secretary shall be absent or unable to perform the duties of his office. The Assistant Secretaries shall perform such additional duties as may be assigned to them from time to time by the Board of Directors, the Chairman, the President or the Secretary.
ARTICLE IX
TREASURER
Section 1. The Treasurer shall have charge of all receipts and disbursements of the Company, and shall be the custodian of the Company's funds. He shall have full authority to receive and give receipts for all moneys due and payable to the Company from any source whatever, and give full discharge for the same, and to endorse checks, drafts and warrants in its name and on its behalf. He shall sign all checks, notes, drafts and similar instruments, except as otherwise provided for by the Board of Directors.
Section 2. He shall perform such additional duties as may be assigned to him from time to time by the Board of Directors, the Chairman, the President or by law.
ARTICLE X
ASSISTANT TREASURERS
Section 1. One or more Assistant Treasurers shall perform the duties of the Treasurer if the Treasurer shall be absent or unable to perform the duties of his office. The Assistant Treasurers shall perform such additional duties as may be assigned to them from time to time by the Board of Directors, the Chairman, the President or the Treasurer.
ARTICLE XI
COMMITTEES
Section 1. The Board of Directors may designate, by resolution adopted by a majority of the full Board of Directors, two or more Directors to constitute an executive committee or other committees, which committees shall have and may exercise all such authority of the Board of Directors as may be delegated to such committees in accordance with law. At the time of such appointment, the Board of Directors may also appoint, in respect to each member of any such committee, another Director to serve as his alternate at any meeting of such committee which such member is unable to attend. Each alternate shall have, during his attendance at a meeting of such committee, all the rights and obligations of a regular member thereof.
Any vacancy on any committee or among alternate members thereof shall be filled by the Board of Directors.
ARTICLE XII
STOCK CERTIFICATES
Section 1. All stock certificates may bear the facsimile signatures of the President or a Vice President and the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer and a facsimile seal of the Company, or may be signed by the President or a Vice President and the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer and may be sealed by one of such officers.
ARTICLE XIII
CORPORATE SEAL
Section 1. The corporate seal of the Company shall be circular in form with the name of the Company inscribed therein.
ARTICLE XIV
INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES
AND AGENTS
Section 1. The Board of Directors may, as and to the extent permitted by law, indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys' fees, actually and reasonably incurred by him in connection with the defense or settlement of the action or suit.
ARTICLE XV
AMENDMENTS
Section 1. These By-Laws may be altered, amended, added to or repealed from time to time by an affirmative vote of the holders of a majority of the voting powers of shares entitled to vote thereon at any meeting of the shareholders called for the purpose or by an affirmative vote of Directors holding a majority of the number of directorships at any meeting of the Board of Directors called for that purpose.
Exhibit 4.2.14
SUPPLEMENTAL INDENTURE
Dated as of December 1, 1993
TO
Indenture of Mortgage and Deed of Trust
Dated as of May 1, 1921
THE CONNECTICUT LIGHT AND POWER COMPANY
TO
BANKERS TRUST COMPANY, Trustee
Series ZZ Bonds, Due December 1, 2025
THE CONNECTICUT LIGHT AND POWER COMPANY
Supplemental Indenture, Dated as of December 1, 1993
TABLE OF CONTENTS
PAGE
Parties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Granting Clauses . . . . . . . . . . . . . . . . . . . . . . . . . 2
Habendum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Grant in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 1.
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FORM AND PROVISIONS OF BONDS OF SERIES ZZ
SECTION 1.01. Designation; Amount. . . . . . . . . . . . . . . . . 3
SECTION 1.02. Form of Bonds of Series ZZ . . . . . . . . . . . . . 3
SECTION 1.03. Provisions of Bonds of Series ZZ; Interest Accrual . 3
SECTION 1.04. Transfer and Exchange of Bonds of Series ZZ. . . . . 4
SECTION 1.05. Sinking and Improvement Fund . . . . . . . . . . . . 4
ARTICLE 2.
REDEMPTION OF BONDS OF SERIES ZZ . . . . . . 4
ARTICLE 3.
MISCELLANEOUS
SECTION 3.01. Benefits of Supplemental Indenture and
Bonds of Series ZZ. . . . . . . . . . . . . . . . . 5
SECTION 3.02. Effect of Table of Contents and Headings . . . . . . 5
SECTION 3.03. Counterparts . . . . . . . . . . . . . . . . . . . . 5
TESTIMONIUM. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ACKNOWLEDGMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . 6
SCHEDULE A - Form of Bond of Series ZZ, Form of
Trustee's Certificate. . . . . . . . . . . . . . . . . . 7
SCHEDULE B - Property Subject to the Lien of the Mortgage. . . . . 13
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SUPPLEMENTAL INDENTURE, dated as of the first day of December, 1993, between THE CONNECTICUT LIGHT AND POWER COMPANY, a corporation organized and existing under the laws of the State of Connecticut (hereinafter called "Company") and BANKERS TRUST COMPANY, a corporation organized and existing under the laws of the State of New York (hereinafter called "Trustee").
WHEREAS, the Company heretofore duly executed, acknowledged and delivered to the Trustee a certain Indenture of Mortgage and Deed of Trust dated as of May 1, 1921, and fifty-eight Supplemental Indentures thereto dated respectively as of May 1, 1921, February 1, 1924, July 1, 1926, October 20, 1936, December 1, 1936, December 1, 1938, August 31, 1944, September 1, 1944, May 1, 1945, October 1, 1945, November 1, 1949, December 1, 1952, December 1, 1955, January 1, 1958, February 1, 1960, April 1, 1961, September 1, 1963, April 1, 1967, May 1, 1967, January 1, 1968, October 1, 1968, December 1, 1969, January 1, 1970, October 1, 1970, December 1, 1971, August 1, 1972, April 1, 1973, March 1, 1974, February 1, 1975, September 1, 1975, May 1, 1977, March 1, 1978, September 1, 1980, October 1, 1981, June 30, 1982, July 1, 1983, January 1, 1984, October 1, 1985, September 1, 1986, April 1, 1987, October 1, 1987, November 1, 1987, April 1, 1988, November 1, 1988, June 1, 1989, September 1, 1989, December 1, 1989, April 1, 1992, July 1, 1992, October 1, 1992, July 1, 1993, and July 1, 1993 (said Indenture of Mortgage and Deed of Trust (i) as heretofore amended, being hereinafter generally called the "Mortgage Indenture," and (ii) together with said Supplemental Indentures thereto, being hereinafter generally called the "Mortgage"), all of which have been duly recorded as required by law, for the purpose of securing its First and Refunding Mortgage Bonds (of which $1,407,000,000 aggregate principal amount are outstanding at the date of this Supplemental Indenture) to an unlimited amount, issued and to be issued for the purposes and in the manner therein provided, of which Mortgage this Supplemental Indenture is intended to be made a part, as fully as if therein recited at length;
WHEREAS, the Company by appropriate and sufficient corporate action in conformity with the provisions of the Mortgage has duly determined to create a further series of bonds under the Mortgage to be designated "First and Refunding Mortgage 7-3/8% Bonds, Series ZZ" (hereinafter generally referred to as the "bonds of Series ZZ"), to consist of fully registered bonds containing terms and provisions duly fixed and determined by the Board of Directors of the Company and expressed in this Supplemental Indenture, such fully registered bonds and the Trustee's certificate of its authentication thereof to be substantially in the forms thereof respectively set forth in Schedule A appended hereto and made a part hereof; and
WHEREAS, the execution and delivery of this Supplemental Indenture and the issue of not exceeding one hundred and twenty-five million dollars ($125,000,000) in aggregate principal amount of bonds of Series ZZ and other necessary actions have been duly authorized by the Board of Directors of the Company; and
WHEREAS, the Company proposes to execute and deliver this Supplemental Indenture to provide for the issue of the bonds of Series ZZ and to confirm the lien of the Mortgage on the property referred to below, all as permitted by Section 14.01 of the Mortgage Indenture; and
WHEREAS, all acts and things necessary to constitute this Supplemental Indenture a valid, binding and legal instrument and to make the bonds of Series ZZ, when executed by the Company and authenticated by the Trustee valid, binding and legal obligations of the Company have been authorized and performed;
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE OF MORTGAGE AND DEED OF
TRUST WITNESSETH:
That in order to secure the payment of the principal of and interest on all bonds issued and to be issued under the Mortgage, according to their tenor and effect, and according to the terms of the Mortgage and this Supplemental Indenture, and to secure the performance of the covenants and obligations in said bonds and in the Mortgage and this Supplemental Indenture respectively contained, and for the better assuring and confirming unto the Trustee, its successor or successors and its or their assigns, upon the trusts and for the purposes expressed in the Mortgage and this Supplemental Indenture, all and singular the hereditament, premises, estates and property of the Company thereby conveyed or assigned or intended so to be, or which the Company may thereafter have become bound to convey or assign to the Trustee, as security for said bonds (except such hereditament, premises, estates and property as shall have been disposed of or released or withdrawn from the lien of the Mortgage and this Supplemental Indenture, in accordance with the provisions thereof and subject to alterations, modifications and changes in said hereditament, premises, estates and property as permitted under the provisions thereof), the Company, for and in consideration of the premises and the sum of One Dollar ($1.00) to it in hand paid by the Trustee, the receipt whereof is hereby acknowledged, and of other valuable considerations, has granted, bargained, sold, assigned, mortgaged, pledged, transferred, set over, aliened, enfeoffed, released, conveyed and confirmed, and by these presents does grant, bargain, sell, assign, mortgage, pledge, transfer, set over, alien, enfeoff, release, convey and confirm unto said Bankers Trust Company, as Trustee, and its successor or successors in the trusts created by the Mortgage and this Supplemental Indenture, and its and their assigns, all of said hereditament, premises, estates and property (except and subject as aforesaid), as fully as though described at length herein, including, without limitation of the foregoing, the property, rights and privileges of the Company described or referred to in Schedule B hereto.
Together with all plants, buildings, structures, improvements and machinery located upon said real estate or any portion thereof, and all rights, privileges and easements of every kind and nature appurtenant thereto, and all and singular the tenements, hereditament and appurtenances belonging to the real estate or any part thereof described or referred to in Schedule B or intended so to be, or in any wise appertaining thereto, and the reversions, remainders, rents, issues and profits thereof, and also all the estate, right, title, interest, property, possession, claim and demand whatsoever, as well in law as in equity, of the Company, of, in and to the same and any and every part thereof, with the appurtenances; except and subject as aforesaid.
TO HAVE AND TO HOLD all and singular the property, rights and privileges hereby granted or mentioned or intended so to be, together with all and singular the reversions, remainders, rents, revenues, income, issues and profits, privileges and appurtenances, now or hereafter belonging or in any way appertaining thereto, unto the Trustee and its successor or successors in the trust created by the Mortgage and this Supplemental Indenture, and its and their assigns, forever, and with like effect as if the above described property, rights and privileges had been specifically described at length in the Mortgage and this Supplemental Indenture.
Subject, however, to permitted liens, as defined in the Mortgage
Indenture.
IN TRUST, NEVERTHELESS, upon the terms and trusts of the Mortgage and
this Supplemental Indenture for those who shall hold the bonds and coupons
issued and to be issued thereunder, or any of them, without preference,
priority or distinction as to lien of any of said bonds and coupons over
any others thereof by reason of priority in the time of the issue or
negotiation thereof, or otherwise howsoever, subject, however, to the
provisions in reference to extended, transferred or pledged coupons and
claims for interest set forth in the Mortgage and this Supplemental
Indenture (and subject to any sinking fund that may heretofore have been or
hereafter be created for the benefit of any particular series).
And it is hereby covenanted that all such bonds of Series ZZ are to be issued, authenticated and delivered, and that the mortgaged premises are to be held by the Trustee, upon and subject to the trusts, covenants, provisions and conditions and for the uses and purposes set forth in the Mortgage and this Supplemental Indenture and upon and subject to the further covenants, provisions and conditions and for the uses and purposes hereinafter set forth, as follows, to wit:
ARTICLE 1.
FORM AND PROVISIONS OF BONDS OF SERIES ZZ
SECTION 1.01. Designation; Amount. The bonds of Series ZZ shall be designated "First and Refunding Mortgage 7-3/8% Bonds, Series ZZ" and, subject to Section 2.08 of the Mortgage Indenture, shall not exceed one hundred and twenty-five million dollars ($125,000,000) in aggregate principal amount at any one time outstanding. The initial issue of the bonds of Series ZZ may be effected upon compliance with the applicable provisions of the Mortgage Indenture.
SECTION 1.02. Form of Bonds of Series ZZ. The bonds of Series ZZ shall be issued only in fully registered form without coupons in denominations of one thousand dollars ($1,000) and multiples thereof.
The bonds of Series ZZ and the certificate of the Trustee upon said bonds shall be substantially in the forms thereof respectively set forth in Schedule A appended hereto.
SECTION 1.03. Provisions of Bonds of Series ZZ; Interest Accrual. The bonds of Series ZZ shall mature on December 1, 2025 and shall bear interest, payable semiannually on the first days of June and December of each year, commencing June 1, 1994, at the rate specified in their title, until the Company's obligation in respect of the principal thereof shall be discharged; and shall be payable both as to principal and interest at the office or agency of the Company in the Borough of Manhattan, New York, New York, in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. The interest on the bonds of Series ZZ, whether in temporary or definitive form, shall be payable without presentation of such bonds; and only to or upon the written order of the registered holders thereof of record at the applicable record date. The bonds of Series ZZ shall be callable for redemption in whole or in part according to the terms and provisions provided herein in Article 2.
Each bond of Series ZZ shall be dated as of December 1, 1993 and shall bear interest on the principal amount thereof from the interest payment date next preceding the date of authentication thereof by the Trustee to which interest has been paid on the bonds of Series ZZ, or if the date of authentication thereof is prior to May 16, 1994, then from the date of original issuance, or if the date of authentication thereof be an interest payment date to which interest is being paid or a date between the record date for any such interest payment date and such interest payment date, then from such interest payment date.
The person in whose name any bond of Series ZZ is registered at the close of business on any record date (as hereinafter defined) with respect to any interest payment date shall be entitled to receive the interest payable on such interest payment date notwithstanding the cancellation of such bond upon any registration of transfer or exchange thereof subsequent to the record date and prior to such interest payment date, except that if and to the extent the Company shall default in the payment of the interest due on such interest payment date, then such defaulted interest shall be paid to the person in whose name such bond is registered on a subsequent record date for the payment of defaulted interest if one shall have been established as hereinafter provided and otherwise on the date of payment of such defaulted interest. A subsequent record date may be established by the Company by notice mailed to the owners of bonds of Series ZZ not less than ten days preceding such record date, which record date shall not be more than thirty days prior to the subsequent interest payment date. The term "record date" as used in this Section with respect to any regular interest payment (i.e., June 1 or December 1) shall mean the May 15 or November 15, as the case may be, next preceding such interest payment date, or if such May 15 or November 15 shall be a legal holiday or a day on which banking institutions in the Borough of Manhattan, New York, New York are authorized by law to close, the next preceding day which shall not be a legal holiday or a day on which such institutions are so authorized to close.
SECTION 1.04. Transfer and Exchange of Bonds of Series ZZ. The bonds
of Series ZZ may be surrendered for registration of transfer as provided in
Section 2.06 of the Mortgage Indenture at the office or agency of the
Company in the Borough of Manhattan, New York, New York, and may be
surrendered at said office for exchange for a like aggregate principal
amount of bonds of Series ZZ of other authorized denominations.
Notwithstanding the provisions of Section 2.06 of the Mortgage Indenture,
no charge, except for taxes or other governmental charges, shall be made by
the Company for any registration of transfer of bonds of Series ZZ or for
the exchange of any bonds of Series ZZ for such bonds of other authorized
denominations.
SECTION 1.05. Sinking and Improvement Fund. Each holder of a bond of Series ZZ, solely by virtue of its acquisition thereof, shall have and be deemed to have consented, without the need for any further action or consent by such holder, to any and all amendments to the Mortgage Indenture which are intended to eliminate or modify in any manner the requirements of the sinking and improvement fund as provided for in Section 6.14 thereof.
ARTICLE 2.
REDEMPTION OF BONDS OF SERIES ZZ.
The bonds of Series ZZ are not subject to redemption at the option of the Company prior to December 1, 1998. Thereafter, the bonds of Series ZZ shall be redeemable as a whole at any time or in part from time to time in accordance with the provisions of the Mortgage and upon not less than thirty (30) days' prior notice given by mail as provided in the Mortgage (which notice may state that it is subject to the receipt of the redemption moneys by the Trustee on or before the date fixed for redemption and which notice shall be of no effect unless such moneys are so received on or before such date), either at the option of the Company, or for the purpose of any applicable provision of the Mortgage, at the following prices:
(a) if redeemed with trust moneys deposited with or received by the Trustee pursuant to Section 3.55 or Section 6.06 or Section 6.09 or
Section 6.14 or Article 8.5 of the Mortgage Indenture, then at the applicable special redemption price, stated as a percentage of the principal amount, specified under the column headed Special Redemption Price in the form of bond of Series ZZ set forth in Schedule A appended hereto, together in every case with accrued and unpaid interest thereon to the date fixed for redemption; and
(b) otherwise, at the applicable general redemption price, stated as a percentage of the principal amount, specified under the column headed General Redemption Price in the form of bond of Series ZZ set forth in Schedule A appended hereto, together in every case with accrued and unpaid interest thereon to the date fixed for redemption.
ARTICLE 3.
MISCELLANEOUS.
SECTION 3.01. Benefits of Supplemental Indenture and Bonds of Series ZZ. Nothing in this Supplemental Indenture, or in the bonds of Series ZZ, expressed or implied, is intended to or shall be construed to give to any person or corporation other than the Company, the Trustee and the holders of the bonds and interest obligations secured by the Mortgage and this Supplemental Indenture, any legal or equitable right, remedy or claim under or in respect of this Supplemental Indenture or of any covenant, condition or provision herein contained. All the covenants, conditions and provisions hereof are and shall be held to be for the sole and exclusive benefit of the Company, the Trustee and the holders of the bonds and interest obligations secured by the Mortgage and this Supplemental Indenture.
SECTION 3.02. Effect of Table of Contents and Headings. The table of contents and the descriptive headings of the several Articles and Sections of this Supplemental Indenture are inserted for convenience of reference only and are not to be taken to be any part of this Supplemental Indenture or to control or affect the meaning, construction or effect of the same.
SECTION 3.03. Counterparts. For the purpose of facilitating the recording hereof, this Supplemental Indenture may be executed in any number of counterparts, each of which shall be and shall be taken to be an original and all collectively but one instrument.
IN WITNESS WHEREOF, The Connecticut Light and Power Company has caused these presents to be executed by a Vice President and its corporate seal to be hereunto affixed, duly attested by its Secretary or an Assistant Secretary, and Bankers Trust Company has caused these presents to be executed by a Vice President or Assistant Vice President and its corporate seal to be hereunto affixed, duly attested by one of its Assistant Treasurers, as of the day and year first above written.
THE CONNECTICUT LIGHT AND POWER
COMPANY
Attest:
/s/ Mark A. Joyse By /s/ John B. Keane
Mark A. Joyse John B. Keane
Assistant Secretary Vice President
(SEAL) Signed, sealed and delivered
in the presence of:
/s/ Judith D. Boucher
/s/ Lisa M. DiMano
BANKERS TRUST COMPANY
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Attest:
/s/ M. Lisa Morrone By /s/ Robert Gorman
M. Lisa Morrone Robert Gorman
Assistant Treasurer Vice President
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(SEAL) Signed, sealed and delivered in the presence of:
/s/ J. Florio
J. Florio
/s/ Shikha Dombek
Shikha Dombek
|
STATE OF CONNECTICUT )
) SS.: BERLIN
COUNTY OF HARTFORD )
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On this 13th day of December 1993, before me, Rose Valintakonis, the undersigned officer, personally appeared John B. Keane and Mark A. Joyse, who acknowledged themselves to be Vice President and Assistant Secretary, respectively, of THE CONNECTICUT LIGHT AND POWER COMPANY, a corporation, and that they, as such Vice President and such Assistant Secretary, being authorized so to do, executed the foregoing instrument for the purpose therein contained, by signing the name of the corporation by themselves as Vice President and Assistant Secretary, and as their free act and deed.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Rose Valintakonis
Rose Valintakonis
Notary Public
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My commission expires March 31, 1994
(SEAL)
STATE OF NEW YORK )
) SS.: NEW YORK
COUNTY OF NEW YORK )
On this 8th day of December, 1993, before me, /s/ Sharon V. Alston, the
undersigned officer, personally appeared Robert Gorman and M. Lisa Morrone,
who acknowledged themselves to be Vice President and Assistant Treasurer,
respectively, of BANKERS TRUST COMPANY, a corporation, and that they, as
such Vice President and such Assistant Treasurer, being authorized so to
do, executed the foregoing instrument for the purposes therein contained,
by signing the name of the corporation by themselves as Vice President and
Assistant Treasurer, and as their free act and deed.
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IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Sharon V. Alston
Notary Public
My Commission expires May 7, 1994
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(SEAL)
SCHEDULE A
[FORM OF BONDS OF SERIES ZZ]
No. $
THE CONNECTICUT LIGHT AND POWER COMPANY
Incorporated under the Laws of the State of Connecticut
FIRST AND REFUNDING MORTGAGE 7-3/8% BOND, SERIES ZZ
PRINCIPAL DUE DECEMBER 1, 2025
FOR VALUE RECEIVED, THE CONNECTICUT LIGHT AND POWER COMPANY, a corporation organized and existing under the laws of the State of Connecticut (hereinafter called the Company), hereby promises to pay to
, or registered assigns, the principal sum of
dollars, on the first day of December, 2025 and to pay interest on said sum, semiannually on the first days of June and December in each year, commencing June 1, 1994, until the Company's obligation with respect to said principal sum shall be discharged, at the rate per annum specified in the title of this bond from the interest payment date next preceding the date of authentication hereof to which interest has been paid on the bonds of this series, or if the date of authentication hereof is prior to May 16, 1994, then from the date of original issuance, or if the date of authentication hereof is an interest payment date to which interest is being paid or a date between the record date for any such interest payment date and such interest payment date, then from such interest payment date. Both principal and interest shall be payable at the office or agency of the Company in the Borough of Manhattan, New York, New York, in such coin or currency of the United States of America as at the time of payment is legal tender for the payment of public and private debts.
Each installment of interest hereon (other than overdue interest) shall be payable to the person who shall be the registered owner of this bond at the close of business on the record date, which shall be the May 15 or November 15, as the case may be, next preceding the interest payment date, or, if such May 15 or November 15 shall be a legal holiday or a day on which banking institutions in the Borough of Manhattan, New York, New York, are authorized by law to close, the next preceding day which shall not be a legal holiday or a day on which such institutions are so authorized to close.
Reference is hereby made to the further provisions of this bond set forth on the reverse hereof, including without limitation provisions in regard to the call and redemption and the registration of transfer and exchangeability of this bond, and such further provisions shall for all purposes have the same effect as though fully set forth in this place.
This bond shall not become or be valid or obligatory until the certificate of authentication hereon shall have been signed by Bankers Trust Company (hereinafter with its successors as defined in the Mortgage hereinafter referred to, generally called the Trustee), or by such a successor.
IN WITNESS WHEREOF, The Connecticut Light and Power Company has caused this bond to be executed in its corporate name and on its behalf by its President by his signature or a facsimile thereof, and its corporate seal to be affixed or imprinted hereon and attested by the manual or facsimile signature of its Secretary.
Dated as of December 1, 1993.
THE CONNECTICUT LIGHT AND POWER COMPANY
By
President
Attest:
Secretary
[FORM OF TRUSTEE'S CERTIFICATE]
Bankers Trust Company hereby certifies that this bond is one of the bonds described in the within mentioned Mortgage.
BANKERS TRUST COMPANY, TRUSTEE
By
Authorized Officer
Dated:
[FORM OF BOND]
[REVERSE]
THE CONNECTICUT LIGHT AND POWER COMPANY
FIRST AND REFUNDING MORTGAGE 7-3/8% BOND, SERIES ZZ
This bond is one of an issue of bonds of the Company, of an unlimited authorized amount of coupon bonds or registered bonds without coupons, or both, known as its First and Refunding Mortgage Bonds, all issued or to be issued in one or more series, and is one of a series of said bonds limited in principal amount to one hundred and twenty-five million dollars ($125,000,000), consisting only of registered bonds without coupons and designated "First and Refunding Mortgage 7-3/8% Bonds, Series ZZ," all of which bonds are issued or are to be issued under, and equally and ratably secured by, a certain Indenture of Mortgage and Deed and Trust dated as of May 1, 1921, and by fifty-nine Supplemental Indentures dated respectively as of May 1, 1921, February 1, 1924, July 1, 1926, June 20, 1928, June 1, 1932, July 1, 1932, July 1, 1935, September 1, 1936, October 20, 1936, December 1, 1936, December 1, 1938, August 31, 1944, September 1, 1944, May 1, 1945, October 1, 1945, November 1, 1949, December 1, 1952, December 1, 1955, January 1, 1958, February 1, 1960, April 1, 1961, September 1, 1963, April 1, 1967, May 1, 1967, January 1, 1968, October 1, 1968, December 1, 1969, January 1, 1970, October 1, 1970, December 1, 1971, August 1, 1972, April 1, 1973, March 1, 1974, February 1, 1975, September 1, 1975, May 1, 1977, March 1, 1978, September 1, 1980, October 1, 1981, June 30, 1982, October 1, 1982, July 1, 1983, January 1, 1984, October 1, 1985, September 1, 1986, April 1, 1987, October 1, 1987, November 1, 1987, April 1, 1988, November 1, 1988, June 1, 1989, September 1, 1989, December 1, 1989, April 1, 1992, July 1, 1992, October 1, 1992, July 1, 1993, July 1, 1993 and December 1, 1993 (said Indenture of Mortgage and Deed of Trust and Supplemental Indentures being collectively referred to herein as the "Mortgage"), all executed by the Company to Bankers Trust Company, as Trustee, all as provided in the Mortgage to which reference is made for a statement of the property mortgaged and pledged, the nature and extent of the security, the rights of the holders of the bonds in respect thereof and the terms and conditions upon which the bonds may be issued and are secured; but neither the foregoing reference to the Mortgage nor any provision of this bond or of the Mortgage shall affect or impair the obligation of the Company, which is absolute, unconditional and unalterable, to pay at the maturities herein provided the principal of and interest on this bond as herein provided. The principal of this bond may be declared or may become due on the conditions, in the manner and at the time set forth in the Mortgage, upon the happening of an event of default as in the Mortgage provided.
This bond is transferable by the registered holder hereof in person or by attorney upon surrender hereof at the office or agency of the Company in the Borough of Manhattan, New York, New York, together with a written instrument of transfer in approved form, signed by the holder, and a new bond or bonds of this series for a like principal amount in authorized denominations will be issued in exchange, all as provided in the Mortgage.
Prior to due presentment for registration of transfer of this bond the
Company and the Trustee may deem and treat the registered owner hereof as
the absolute owner hereof, whether or not this bond be overdue, for the
purpose of receiving payment and for all other purposes, and neither the
Company nor the Trustee shall be affected by any notice to the contrary.
This bond is exchangeable at the option of the registered holder
hereof upon surrender hereof, at the office or agency of the Company in the
Borough of Manhattan, New York, New York, for an equal principal amount of
bonds of this series of other authorized denominations, in the manner and
on the terms provided in the Mortgage.
Bonds of this series are to be issued initially under a book-entry only system and, except as hereinafter provided, registered in the name of The Depository Trust Company, New York, New York ("DTC") or its nominee, which shall be considered to be the holder of all bonds of this series for all purposes of the Mortgage, including, without limitation, payment by the Company of principal of and interest on such bonds of this series and receipt of notices and exercise of rights of holders of such bonds of this series. There shall be a single bond of this series which shall be immobilized in the custody of DTC with the owners of book-entry interests in bonds of this series ("Book-Entry Interests") having no right to receive bonds of this series in the form of physical securities or certificates. Ownership of Book-Entry Interests shall be shown by book-entry on the system maintained and operated by DTC, its participants (the "Participants") and certain persons acting through the Participants. Transfers of ownership of Book-Entry Interests are to be made only by DTC and the Participants by that book-entry system, the Company and the Trustee having no responsibility therefor so long as bonds of this series are registered in the name of DTC or its nominee. DTC is to maintain records of positions of Participants in bonds of this series, and the Participants and persons acting through Participants are to maintain records of the purchasers and owners of Book-Entry Interests. If DTC or its nominee determines not to continue to act as a depository for the bonds of this series in connection with a book-entry only system, another depository, if available, may act instead and the single bond of this series will be transferred into the name of such other depository or its nominee, in which case the above provisions will continue to apply to the new depository. If the book-entry only system for bonds of this series is discontinued for any reason, upon surrender and cancellation of the single bond of this series registered in the name of the then depository or its nominee, new registered bonds of this series will be issued in authorized denominations to the holders of Book-Entry Interests in principal amounts coinciding with the amounts of Book-Entry Interests shown on the book-entry system immediately prior to the discontinuance thereof. Neither the Trustee nor the Company shall be responsible for the accuracy of the interests shown on that system.
The bonds of this series are not subject to redemption at the option of the Company prior to December 1, 1998. Thereafter, the bonds of this series are subject to redemption prior to maturity as a whole at any time or in part from time to time in accordance with the provisions of the Mortgage, upon not less than thirty (30) days' prior notice (which notice may be made subject to the deposit of redemption moneys with the Trustee before the date fixed for redemption) given by mail as provided in the Mortgage, either at the option of the Company, or for the purposes of any applicable provision of the Mortgage, at the following prices, together in every case with accrued and unpaid interest thereon to the date fixed for redemption:
(a) if redeemed with trust moneys deposited with or received by
the Trustee pursuant to specified provisions of the Mortgage, then at the applicable special redemption price, stated as a percentage of the principal amount, set forth below; and
(b) otherwise, at the applicable general redemption price, stated as a percentage of the principal amount, set forth below:
If date fixed for General Special
redemption falls Redemption Redemption
within twelve months' Price (% Price (%
period ending the of principal of principal
last day of November amount called) amount called)
1999 104.47% 100.00%
2000 104.17 100.00
2001 103.88 100.00
2002 103.58 100.00
2003 103.28 100.00
2004 102.98 100.00
2005 102.68 100.00
2006 102.39 100.00
2007 102.09 100.00
2008 101.79 100.00
2009 101.49 100.00
2010 101.20 100.00
2011 100.90 100.00
2012 100.60 100.00
2013 100.30 100.00
2014 100.00 100.00
2015 100.00 100.00
2016 100.00 100.00
2017 100.00 100.00
2018 100.00 100.00
2019 100.00 100.00
2020 100.00 100.00
2021 100.00 100.00
2022 100.00 100.00
2023 100.00 100.00
2024 100.00 100.00
2025 100.00 100.00
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The Mortgage provides that the Company and the Trustee, with consent of the holders of not less than 66-2/3% in aggregate principal amount of the bonds at the time outstanding which would be affected by the action proposed to be taken, may by supplemental indenture add any provisions to or change or eliminate any of the provisions of the Mortgage or modify the rights of the holders of the bonds and coupons issued thereunder; provided, however, that without the consent of the holder hereof no such supplemental indenture shall affect the terms of payment of the principal of or interest or premium on this bond, or reduce the aforesaid percentage of the bonds the holders of which are required to consent to such a supplemental indenture, or permit the creation by the Company of any mortgage or pledge or lien in the nature thereof ranking prior to or equal with the lien of the Mortgage or deprive the holder hereof of the lien of the Mortgage on any of the property which is subject to the lien thereof.
As set forth in the Supplemental Indenture establishing the terms and series of the bonds of this series, each holder of this bond, solely by virtue of its acquisition thereof, shall have and be deemed to have consented, without the need for any further action or consent by such holder, to any and all amendments to the Mortgage which are intended to eliminate or modify in any manner the requirements of the sinking and improvement fund as set forth in Section 6.14 of the Mortgage.
No recourse shall be had for the payment of the principal of or the interest on this bond, or any part thereof, or for any claim based thereon or otherwise in respect thereof, to any incorporator, or any past, present or future stockholder, officer or director of the Company, either directly or indirectly, by virtue of any statute or by enforcement of any assessment or otherwise, and any and all liability of the said incorporators, stockholders, officers or directors of the Company in respect to this bond is hereby expressly waived and released by every holder hereof.
[This page intentionally left blank]
SCHEDULE B
PROPERTY SUBJECT TO THE LIEN OF THE MORTGAGE
IN CONNECTICUT
TOWN OF ANDOVER
All the following described rights, privileges and easements situated in the Town of Andover, County of Tolland and State of Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(1) Lynn M. Wytas et al. August 12, 1993 59 588
(2) Joseph A. Toce August 16, 1993 59 590
(3) Jessee Person et al. September 29, 1993 59 873
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TOWN OF ASHFORD
All the following described rights, privileges and easements situated in the Town of Ashford, County of Windham and State of Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(4) State of Connecticut September 16, 1985 78 894
(5) Colonial Builders of New December 13, 1985 79 220
England, Inc.
(6) Trade Craftsmen, Inc. September 21, 1993 102 516
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TOWN OF AVON
All the following described rights, privileges and easements situated in the Town of Avon, County of Hartford and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(7) Avon Park Properties June 24, 1993 280 150
(8) Orchard Farm Development, Inc. June 23, 1993 280 120
TOWN OF BERLIN
All the following described rights, privileges and easements situated in the Town of Berlin, County of Hartford and State of Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(9) Louis F. Grabowski et al. July 8, 1993 349 370
(10) Kenneth J. Dorio June 21, 1993 349 372
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TOWN OF BRISTOL
All the following described rights, privileges and easements situated in the Town of Bristol, County of Hartford and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(11) East View Farm Associates August 5, 1993 1100 872
TOWN OF CHAPLIN
All the following described rights, privileges and easements situated in the Town of Chaplin, County of Windham and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(12) Raymond B. Bettencourt et al. February 17, 1987 44 191
TOWN OF CHESHIRE
All the following described rights, privileges and easements situated in the Town of Cheshire, County of New Haven and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(13) Copper Valley Estates, Inc. August 23, 1993 998 33
(14) Orchard View Construction Co., August 17, 1993 998 163
Inc.
TOWN OF COLCHESTER
All the following described rights, privileges and easements situated in the Town of Colchester, County of New London and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(15) William R. Swenson November 19, 1992 333 319
TOWN OF COLUMBIA
All the following described rights, privileges and easements situated in the Town of Columbia, County of Tolland and State of Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(16) Francis G. Kosowicz March 25, 1987 75 137
(17) Randazzo Associates October 8, 1993 100 225
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TOWN OF COVENTRY
All the following described rights, privileges and easements situated in the Town of Coventry, County of Tolland and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(18) Frank Infante July 1, 1993 492 246
(19) Country Place Associates, Inc. July 13, 1987 345 331
(20) Gerald P. Rothman September 29, 1988 382 66
(21) Paxton Development Group July 2, 1993 492 108
Limited Partnership
(22) Paxton Development Group July 10, 1993 493 98
Limited Partnership et al.
TOWN OF EASTFORD
All the following described rights, privileges and easements situated in the Town of Eastford, County of Windham and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(23) Evelyn Day Warren August 12, 1993 34 197
TOWN OF ELLINGTON
All the following described rights, privileges and easements situated in the Town of Ellington, County of Tolland and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(24) The Apostolic Christian Church July 19, 1993 201 62
of Ellington, Inc.
(25) Robert A. Ludwig et al. August 25, 1978 111 258
(26) Gardner L. Chapman July 28, 1986 142 112
(27) Evandro S. Santini October 21, 1985 135 919
(28) Michael J. Stosonis et al. August 7, 1978 111 260
(29) I-86 Co. October 8, 1993 203 477
TOWN OF ENFIELD
All the following described rights, privileges and easements situated in the Town of Enfield, County of Hartford and State of Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(30) Maine State Retirement System June 11, 1993 788 127
(31) Betty Ann Reilly May 28, 1993 795 314
(32) Charles R. Garrow et al. August 19, 1993 809 162
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TOWN OF FARMINGTON
All the following described rights, privileges and easements situated in the Town of Farmington, County of Hartford and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(33) Lawrence F. Webster July 15, 1993 465 705
TOWN OF FRANKLIN
All the following described rights, privileges and easements situated in the Town of Franklin, County of New London and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(34) Crossen Builders, Inc. December 24, 1986 35 17
TOWN OF KILLINGLY
All the following described rights, privileges and easements situated in the Town of Killingly, County of Windham and State of Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(35) Edith B. Hughes et al. August 27, 1993 581 275
(36) Robert A. Mineau et al. September 22, 1993 583 204
(37) Green Hollow Associates September 16, 1993 583 201
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TOWN OF LEBANON
All the following described rights, privileges and easements situated in the Town of Lebanon, County of New London and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(38) Michael S. Block September 28, 1993 154 799
TOWN OF MANCHESTER
All the following described rights, privileges and easements situated in the Town of Manchester, County of Hartford and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(39) Downeast Associates Limited August 20, 1993 1626 298
*Partnership
*Inter alia - South Windsor
TOWN OF MANSFIELD
All the following described rights, privileges and easements situated in the Town of Mansfield, County of Tolland and State of Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(40) Lodi Associates et al. July 13, 1993 338 67
(41) Joseph Glasser December 5, 1986 245 480
(42) Mansfield Cooperative, Inc. August 13, 1993 340 4
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(43) Mansfield Retirement Community, July 14, 1993 341 154 Inc.
TOWN OF NAUGATUCK
All the following described rights, privileges and easements situated in the Town of Naugatuck, County of New Haven and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(44) Richard F. Bushka et al. April 6, 1993 374 79
TOWN OF NEWINGTON
All the following described rights, privileges and easements situated in the Town of Newington, County of Hartford and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(45) Ramblewood, Incorporated September 2, 1993 931 228
TOWN OF NEWTOWN
All the following described rights, privileges and easements situated in the Town of Newtown, County of Fairfield and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(46) Russett Road Developers, Inc. June 15, 1993 471 39
(47) Kevin F. Braun et al. August 6, 1992 453 665
(48) Craig M. Berger January 30, 1991 428 104
TOWN OF NEWTOWN
All the following described pieces or parcels of land with any improvements thereon situated in the Town of Newtown, County of Fairfield and State of Connecticut, viz:
(49) A certain piece of parcel of land located in the Town of Newtown, County of Fairfield and State of Connecticut, containing 6.06 acres, acquired from Craig M. Berger, in deed dated January 30, 1991, recorded in Volume 428, Page 78 of the Newtown land records.
TOWN OF PLAINFIELD
All the following described rights, privileges and easements situated in the Town of Plainfield, County of Windham and State of Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(50) Dow Road Associates, Inc. October 1, 1993 218 504
(51) Alice C. Ferrance October 14, 1993 218 548
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TOWN OF PLAINVILLE
All the following described rights, privileges and easements situated in the Town of Plainville, County of Hartford and State of Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(52) Brian J. Corriveau et al. June 17, 1993 301 636
(53) Stephen Martino et al. June 17, 1993 301 645
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TOWN OF POMFRET
All the following described rights, privileges and easements situated in the Town of Pomfret, County of Windham and State of Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(54) The W. B. Lambot Lumber & November 20, 1986 62 278
Supply Co.
(55) Burt-Fanning Salmon et al. November 20, 1986 62 282
(56) Richard G. Whipple November 20, 1986 62 280
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TOWN OF PUTNAM
All the following described rights, privileges and easements situated in the Town of Putnam, County of Windham and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(57) David E. Nichols August 31, 1993 250 158*
*Inter alia - Thompson
TOWN OF ROCKY HILL
All the following described rights, privileges and easements situated in the Town of Rocky Hill, County of Hartford and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(58) Brookwood Village Condominium August 31, 1993 269 971 Association, Inc.
TOWN OF SIMSBURY
All the following described rights, privileges and easements situated in the Town of Simsbury, County of Hartford and State of Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(59) S. J. Fish & Sons, Incorporated July 12, 1993 414 247
(60) Patrick V. McCue et al. August 2, 1993 415 92
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TOWN OF SOUTHINGTON
All the following described rights, privileges and easements situated in the Town of Southington, County of Hartford and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(61) Xhemali Fazo April 12, 1993 563 875
(62) The Robert L. Jacks and Ted J.April 14, 1993 563 879
Crew Partnership
(63) National Auto/Truckstops, Inc.April 22, 1993 563 885
(64) John E. Valentine August 18, 1993 573 739
TOWN OF SOUTH WINDSOR
All the following described rights, privileges and easements situated in the Town of South Windsor, County of Hartford and State of Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(65) Downeast Associates Limited August 20, 1993 738 21*
Partnership
(66) R. Squared, Inc. September 22, 1993 747 86
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*Inter alia - Manchester
TOWN OF SPRAGUE
All the following described rights, privileges and easements situated in the Town of Sprague, County of New London and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(67) Gail L. Whitney et al. August 3, 1993 47 619
TOWN OF STAFFORD
All the following described rights, privileges and easements situated in the Town of Stafford, County of Tolland and State of Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(68) Glenville Development April 14, 1987 238 248
Corporation
(69) Condevco, Inc. December 20, 1983 204 477
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TOWN OF STERLING
All the following described rights, privileges and easements situated in the Town of Sterling, County of Windham and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(70) Charles T. Camp et al. November 6, 1986 52 210
TOWN OF THOMPSON
All the following described rights, privileges and easements situated in the Town of Thompson, County of Windham and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(71) David E. Nichols August 31, 1993 303 340*
*Inter alia - Putnam
TOWN OF TOLLAND
All the following described rights, privileges and easements situated in the Town of Tolland, County of Tolland and State of Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(72) Lee & Lamont Realty June 18, 1993 457 3
(73) Thomas E. Sayers et al. July 26, 1993 459 275
(74) Joseph Mihaliak July 23, 1981 204 122
(75) FRI Land Equities, Inc. January 28, 1987 294 28
(76) Vincent A. Vivenzio et al. September 27, 1993 467 356
(77) Brian M. Furbish et al. September 24, 1993 467 358
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TOWN OF TORRINGTON
All the following described rights, privileges and easements situated in the Town of Torrington, County of Litchfield and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(78) Stanley M. Lessler, Trustee June 25, 1993 577 1039
TOWN OF UNION
All the following described rights, privileges and easements situated in the Town of Union, County of Tolland and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(79) Joseph P. Pikul et al. August 31, 1993 36 575*
*Inter alia - Woodstock
TOWN OF VERNON
All the following described rights, privileges and easements situated in the Town of Vernon, County of Tolland and State of Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(80) Anita Jane Giuletti et al. May 6, 1993 931 251
(81) Courtside Associates, Inc. June 21, 1983 461 17
(82) The Madrid Corporation May 10, 1985 528 96
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(83) Samuel P. Belsito, Jr. et al. October 30, 1986 597 347
(84) 155 West Main Street January 28, 1987 614 43
Associates Limited Partnership
TOWN OF WASHINGTON
All the following described pieces or parcels of land with any improvements thereon situated in the Town of Washington, County of Litchfield and State of Connecticut, viz:
(85) A certain piece or parcel of land with buildings thereon, located in the Town of Washington, County of Litchfield and State of Connecticut, containing 3.00 acres more or less, acquired from Edward R. Lerner and Leila Lerner, in deed dated April 30, 1993, recorded in Volume 122, Page 1059 of the Washington land records.
TOWN OF WATERBURY
All the following described rights, privileges and easements situated in the Town of Waterbury, County of New Haven and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(86) Peter Carmody et al. April 15, 1993 2969 192
TOWN OF WETHERSFIELD
All the following described rights, privileges and easements situated in the Town of Wethersfield, County of Hartford and State of Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(87) Drisdelle Builders, Inc. July 16, 1993 551 641
(88) Mark O'Connor et al. June 24, 1993 557 73
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TOWN OF WINDHAM
All the following described rights, privileges and easements situated in the Town of Windham, County of Windham and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(89) Wal-Mart Stores, Inc. February 18, 1993 420 262
TOWN OF WINDSOR
All the following described rights, privileges and easements situated in the Town of Windsor, County of Hartford and State of Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(90) Joseph Misky, Jr. June 22, 1993 949 177
(91) The Estate of Benjamin D. July 15, 1992 929 288
Sasportas
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(92) T & M Building Company, Inc. February 16, 1993 929 230
(93) Culbro Homes II, Inc. July 16, 1993 963 295
TOWN OF WINDSOR LOCKS
All the following described rights, privileges and easements situated in the Town of Windsor Locks, County of Hartford and State of Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(94) Cortland Group, Inc. July 1, 1993 215 882
(95) Henry L. Graziani et al. July 31, 1992 217 488
(96) Sales Development Company June 6, 1993 217 491
(97) Jacqueline F. Smith May 21, 1993 217 494
(98) Susan M. Montemerlo September 16, 1993 217 496
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TOWN OF WOODBURY
All the following described rights, privileges and easements situated in the Town of Woodbury, County of Litchfield and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(99) Mark K. Zielke August 23, 1993 196 404
TOWN OF WOODSTOCK
All the following described rights, privileges and easements situated in the Town of Woodstock, County of Windham and State of Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(100) Philip L. Corrow May 14, 1987 168 37
(101) Alexander J. Parrow et al. August 24, 1990 204 199
(102) Kim Staveski Mack et al. June 28, 1989 193 196
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(103) Woodstock Building Associates August 27, 1993 237 352
(104) Thomas P. Laskey July 20, 1993 236 483
(105) Joseph P. Pikul et al. August 31, 1993 237 363*
(106) Henry L. Bugden et al August 31, 1993 237 365
(107) Lawrence O'Neill et al. December 14, 1990 236 212
*Inter alia - Union
Exhibit 4.2.15
SUPPLEMENTAL INDENTURE
Dated as of February 1, 1994
TO
Indenture of Mortgage and Deed of Trust
Dated as of May 1, 1921
THE CONNECTICUT LIGHT AND POWER COMPANY
TO
BANKERS TRUST COMPANY, Trustee
1994 Series A Bonds, Due February 1, 1999
THE CONNECTICUT LIGHT AND POWER COMPANY
Supplemental Indenture, Dated as of February 1, 1994
TABLE OF CONTENTS
PAGE
Parties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Granting Clauses . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Habendum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Grant in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 1.
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FORM AND PROVISIONS OF BONDS OF SERIES A
SECTION 1.01. Designation; Amount. . . . . . . . . . . . . . . . . . . 3
SECTION 1.02. Form of Bonds of Series A. . . . . . . . . . . . . . . . 3
SECTION 1.03. Provisions of Bonds of Series A; Interest Accrual. . . . 3
SECTION 1.04. Transfer and Exchange of Bonds of Series A . . . . . . . 4
SECTION 1.05. Sinking and Improvement Fund . . . . . . . . . . . . . . 4
ARTICLE 2.
REDEMPTION OF BONDS OF SERIES A. . . . . . . . . 4
ARTICLE 3.
MISCELLANEOUS
SECTION 3.01. Benefits of Supplemental Indenture and
Bonds of Series A . . . . . . . . . . . . . . . . . . . 4
SECTION 3.02. Effect of Table of Contents and Headings . . . . . . . . 4
SECTION 3.03. Counterparts . . . . . . . . . . . . . . . . . . . . . . 4
TESTIMONIUM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ACKNOWLEDGMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SCHEDULE A - Form of Bond of Series A, Form of
Trustee's Certificate. . . . . . . . . . . . . . . . . . . . 8
SCHEDULE B - Property Subject to the Lien of the Mortgage. . . . . . .13
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SUPPLEMENTAL INDENTURE, dated as of the first day of February, 1994, between THE CONNECTICUT LIGHT AND POWER COMPANY, a corporation organized and existing under the laws of the State of Connecticut (hereinafter called "Company") and BANKERS TRUST COMPANY, a corporation organized and existing under the laws of the State of New York (hereinafter called "Trustee").
WHEREAS, the Company heretofore duly executed, acknowledged and delivered to the Trustee a certain Indenture of Mortgage and Deed of Trust dated as of May 1, 1921, and fifty-nine Supplemental Indentures thereto dated respectively as of May 1, 1921, February 1, 1924, July 1, 1926, October 20, 1936, December 1, 1936, December 1, 1938, August 31, 1944, September 1, 1944, May 1, 1945, October 1, 1945, November 1, 1949, December 1, 1952, December 1, 1955, January 1, 1958, February 1, 1960, April 1, 1961, September 1, 1963, April 1, 1967, May 1, 1967, January 1, 1968, October 1, 1968, December 1, 1969, January 1, 1970, October 1, 1970, December 1, 1971, August 1, 1972, April 1, 1973, March 1, 1974, February 1, 1975, September 1, 1975, May 1, 1977, March 1, 1978, September 1, 1980, October 1, 1981, June 30, 1982, July 1, 1983, January 1, 1984, October 1, 1985, September 1, 1986, April 1, 1987, October 1, 1987, November 1, 1987, April 1, 1988, November 1, 1988, June 1, 1989, September 1, 1989, December 1, 1989, April 1, 1992, July 1, 1992, October 1, 1992, July 1, 1993, July 1, 1993 and December 1, 1993 (said Indenture of Mortgage and Deed of Trust (i) as heretofore amended, being hereinafter generally called the "Mortgage Indenture," and (ii) together with said Supplemental Indentures thereto, being hereinafter generally called the "Mortgage"), all of which have been duly recorded as required by law, for the purpose of securing its First and Refunding Mortgage Bonds (of which $1,235,000,000 aggregate principal amount are outstanding at the date of this Supplemental Indenture) to an unlimited amount, issued and to be issued for the purposes and in the manner therein provided, of which Mortgage this Supplemental Indenture is intended to be made a part, as fully as if therein recited at length;
WHEREAS, the Company by appropriate and sufficient corporate action in conformity with the provisions of the Mortgage has duly determined to create a further series of bonds under the Mortgage to be designated "First and Refunding Mortgage 5-1/2% Bonds, 1994 Series A" (hereinafter generally referred to as the "bonds of Series A"), to consist of fully registered bonds containing terms and provisions duly fixed and determined by the Board of Directors of the Company and expressed in this Supplemental Indenture, such fully registered bonds and the Trustee's certificate of its authentication thereof to be substantially in the forms thereof respectively set forth in Schedule A appended hereto and made a part hereof; and
WHEREAS, the execution and delivery of this Supplemental Indenture and the issue of not exceeding one hundred and forty million dollars ($140,000,000) in aggregate principal amount of bonds of Series A and other necessary actions have been duly authorized by the Board of Directors of the Company; and
WHEREAS, the Company proposes to execute and deliver this Supplemental Indenture to provide for the issue of the bonds of Series A and to confirm the lien of the Mortgage on the property referred to below, all as permitted by Section 14.01 of the Mortgage Indenture; and
WHEREAS, all acts and things necessary to constitute this Supplemental Indenture a valid, binding and legal instrument and to make the bonds of Series A, when executed by the Company and authenticated by the Trustee valid, binding and legal obligations of the Company have been authorized and performed;
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE OF MORTGAGE AND DEED OF
TRUST WITNESSETH:
That in order to secure the payment of the principal of and interest on all bonds issued and to be issued under the Mortgage, according to their tenor and effect, and according to the terms of the Mortgage and this Supplemental Indenture, and to secure the performance of the covenants and obligations in said bonds and in the Mortgage and this Supplemental Indenture respectively contained, and for the better assuring and confirming unto the Trustee, its successor or successors and its or their assigns, upon the trusts and for the purposes expressed in the Mortgage and this Supplemental Indenture, all and singular the hereditament, premises, estates and property of the Company thereby conveyed or assigned or intended so to be, or which the Company may thereafter have become bound to convey or assign to the Trustee, as security for said bonds (except such hereditament, premises, estates and property as shall have been disposed of or released or withdrawn from the lien of the Mortgage and this Supplemental Indenture, in accordance with the provisions thereof and subject to alterations, modifications and changes in said hereditament, premises, estates and property as permitted under the provisions thereof), the Company, for and in consideration of the premises and the sum of One Dollar ($1.00) to it in hand paid by the Trustee, the receipt whereof is hereby acknowledged, and of other valuable considerations, has granted, bargained, sold, assigned, mortgaged, pledged, transferred, set over, aliened, enfeoffed, released, conveyed and confirmed, and by these presents does grant, bargain, sell, assign, mortgage, pledge, transfer, set over, alien, enfeoff, release, convey and confirm unto said Bankers Trust Company, as Trustee, and its successor or successors in the trusts created by the Mortgage and this Supplemental Indenture, and its and their assigns, all of said hereditament, premises, estates and property (except and subject as aforesaid), as fully as though described at length herein, including, without limitation of the foregoing, the property, rights and privileges of the Company described or referred to in Schedule B hereto.
Together with all plants, buildings, structures, improvements and machinery located upon said real estate or any portion thereof, and all rights, privileges and easements of every kind and nature appurtenant thereto, and all and singular the tenements, hereditament and appurtenances belonging to the real estate or any part thereof described or referred to in Schedule B or intended so to be, or in any wise appertaining thereto, and the reversions, remainders, rents, issues and profits thereof, and also all the estate, right, title, interest, property, possession, claim and demand whatsoever, as well in law as in equity, of the Company, of, in and to the same and any and every part thereof, with the appurtenances; except and subject as aforesaid.
TO HAVE AND TO HOLD all and singular the property, rights and privileges hereby granted or mentioned or intended so to be, together with all and singular the reversions, remainders, rents, revenues, income, issues and profits, privileges and appurtenances, now or hereafter belonging or in any way appertaining thereto, unto the Trustee and its successor or successors in the trust created by the Mortgage and this Supplemental Indenture, and its and their assigns, forever, and with like effect as if the above described property, rights and privileges had been specifically described at length in the Mortgage and this Supplemental Indenture.
Subject, however, to permitted liens, as defined in the Mortgage Indenture.
IN TRUST, NEVERTHELESS, upon the terms and trusts of the Mortgage and this Supplemental Indenture for those who shall hold the bonds and coupons issued and to be issued thereunder, or any of them, without preference, priority or distinction as to lien of any of said bonds and coupons over any others thereof by reason of priority in the time of the issue or negotiation thereof, or otherwise howsoever, subject, however, to the provisions in reference to extended, transferred or pledged coupons and claims for interest set forth in the Mortgage and this Supplemental
Indenture (and subject to any sinking fund that may heretofore have been or hereafter be created for the benefit of any particular series).
And it is hereby covenanted that all such bonds of Series A are to be issued, authenticated and delivered, and that the mortgaged premises are to be held by the Trustee, upon and subject to the trusts, covenants, provisions and conditions and for the uses and purposes set forth in the Mortgage and this Supplemental Indenture and upon and subject to the further covenants, provisions and conditions and for the uses and purposes hereinafter set forth, as follows, to wit:
ARTICLE 1.
FORM AND PROVISIONS OF BONDS OF SERIES A
SECTION 1.01. Designation; Amount. The bonds of Series A shall be designated "First and Refunding Mortgage 5-1/2% Bonds, 1994 Series A" and, subject to Section 2.08 of the Mortgage Indenture, shall not exceed one hundred and forty million dollars ($140,000,000) in aggregate principal amount at any one time outstanding. The initial issue of the bonds of Series A may be effected upon compliance with the applicable provisions of the Mortgage Indenture.
SECTION 1.02. Form of Bonds of Series A. The bonds of Series A shall be issued only in fully registered form without coupons in denominations of one thousand dollars ($1,000) and multiples thereof.
The bonds of Series A and the certificate of the Trustee upon said bonds shall be substantially in the forms thereof respectively set forth in Schedule A appended hereto.
SECTION 1.03. Provisions of Bonds of Series A; Interest Accrual. The bonds of Series A shall mature on February 1, 1999 and shall bear interest, payable semiannually on the first days of February and August of each year, commencing August 1, 1994, at the rate specified in their title, until the Company's obligation in respect of the principal thereof shall be discharged; and shall be payable both as to principal and interest at the office or agency of the Company in the Borough of Manhattan, New York, New York, in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. The interest on the bonds of Series A, whether in temporary or definitive form, shall be payable without presentation of such bonds; and only to or upon the written order of the registered holders thereof of record at the applicable record date. The bonds of Series A shall be callable for redemption in whole or in part according to the terms and provisions provided herein in Article 2.
Each bond of Series A shall be dated as of February 1, 1994 and shall bear interest on the principal amount thereof from the interest payment date next preceding the date of authentication thereof by the Trustee to which interest has been paid on the bonds of Series A, or if the date of authentication thereof is prior to July 16, 1994, then from the date of original issuance, or if the date of authentication thereof be an interest payment date to which interest is being paid or a date between the record date for any such interest payment date and such interest payment date, then from such interest payment date.
The person in whose name any bond of Series A is registered at the close of business on any record date (as hereinafter defined) with respect to any interest payment date shall be entitled to receive the interest payable on such interest payment date notwithstanding the cancellation of such bond upon any registration of transfer or exchange thereof subsequent to the record date and prior to such interest payment date, except that if and to the extent the Company shall default in the payment of the interest due on such interest payment date, then such defaulted interest shall be paid to the person in whose name such bond is registered on a subsequent record date for the payment of defaulted interest if one shall have been established as hereinafter provided and otherwise on the date of payment of such defaulted interest. A subsequent record date may be established by the Company by notice mailed to the owners of bonds of Series A not less than ten days preceding such record date, which record date shall not be more than thirty days prior to the subsequent interest payment date. The term "record date" as used in this Section with respect to any regular interest payment (i.e., February 1 or August 1) shall mean the January 15 or July 15, as the case may be, next preceding such interest payment date, or if such January 15 or July 15 shall be a legal holiday or a day on which banking institutions in the Borough of Manhattan, New York, New York are authorized by law to close, the next preceding day which shall not be a legal holiday or a day on which such institutions are so authorized to close.
SECTION 1.04. Transfer and Exchange of Bonds of Series A. The bonds
of Series A may be surrendered for registration of transfer as provided in
Section 2.06 of the Mortgage Indenture at the office or agency of the
Company in the Borough of Manhattan, New York, New York, and may be
surrendered at said office for exchange for a like aggregate principal
amount of bonds of Series A of other authorized denominations.
Notwithstanding the provisions of Section 2.06 of the Mortgage Indenture,
no charge, except for taxes or other governmental charges, shall be made by
the Company for any registration of transfer of bonds of Series A or for
the exchange of any bonds of Series A for such bonds of other authorized
denominations.
SECTION 1.05. Sinking and Improvement Fund. Each holder of a bond of Series A, solely by virtue of its acquisition thereof, shall have and be deemed to have consented, without the need for any further action or consent by such holder, to any and all amendments to the Mortgage Indenture which are intended to eliminate or modify in any manner the requirements of the sinking and improvement fund as provided for in Section 6.14 thereof.
ARTICLE 2.
REDEMPTION OF BONDS OF SERIES A.
The bonds of Series A shall not be redeembable as a whole or in part at any time.
ARTICLE 3.
MISCELLANEOUS.
SECTION 3.01. Benefits of Supplemental Indenture and Bonds of Series
A. Nothing in this Supplemental Indenture, or in the bonds of Series A,
expressed or implied, is intended to or shall be construed to give to any
person or corporation other than the Company, the Trustee and the holders
of the bonds and interest obligations secured by the Mortgage and this
Supplemental Indenture, any legal or equitable right, remedy or claim under
or in respect of this Supplemental Indenture or of any covenant, condition
or provision herein contained. All the covenants, conditions and
provisions hereof are and shall be held to be for the sole and exclusive
benefit of the Company, the Trustee and the holders of the bonds and
interest obligations secured by the Mortgage and this Supplemental
Indenture.
SECTION 3.02. Effect of Table of Contents and Headings. The table of contents and the descriptive headings of the several Articles and Sections of this Supplemental Indenture are inserted for convenience of reference only and are not to be taken to be any part of this Supplemental Indenture or to control or affect the meaning, construction or effect of the same.
SECTION 3.03. Counterparts. For the purpose of facilitating the recording hereof, this Supplemental Indenture may be executed in any number of counterparts, each of which shall be and shall be taken to be an original and all collectively but one instrument.
IN WITNESS WHEREOF, The Connecticut Light and Power Company has caused these presents to be executed by a Vice President and its corporate seal to be hereunto affixed, duly attested by its Secretary or an Assistant Secretary, and Bankers Trust Company has caused these presents to be executed by a Vice President or Assistant Vice President and its corporate seal to be hereunto affixed, duly attested by one of its Assistant Treasurers, as of the day and year first above written.
THE CONNECTICUT LIGHT AND POWER
COMPANY
Attest:
/s/ Mark A. Joyse By /s/ John B. Keane
Mark A. Joyse John B. Keane
Assistant Secretary Vice President
(SEAL) Signed, sealed and delivered
in the presence of:
/s/ Tracy DeCredico
/s/ Shelley O. Peters
BANKERS TRUST COMPANY
Attest:
/s/M. Lisa Morrone By /s/ Robert Corporale
M. Lisa Morrone Robert Caporale
Assistant Treasurer Vice President
(SEAL) Signed, sealed and delivered
in the presence of:
/s/Denise Mitchell
Denise Mitchell
/s/Michael Weber
Michael Weber
STATE OF CONNECTICUT )
) SS.: BERLIN
COUNTY OF HARTFORD )
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On this 4th day of February 1994, before me, Maureen J. Rothwell, the undersigned officer, personally appeared John B. Keane and Mark A. Joyse, who acknowledged themselves to be Vice President and Assistant Secretary, respectively, of THE CONNECTICUT LIGHT AND POWER COMPANY, a corporation, and that they, as such Vice President and such Assistant Secretary, being authorized so to do, executed the foregoing instrument for the purpose therein contained, by signing the name of the corporation by themselves as Vice President and Assistant Secretary, and as their free act and deed.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Maureen J. Rothwell Maureen J. Rothwell Notary Public |
My commission expires May 31, 1996
(SEAL)
STATE OF NEW YORK )
) SS.: NEW YORK
COUNTY OF NEW YORK )
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On this 3rd day of February, 1994, before me, John Florio, the undersigned officer, personally appeared Robert Caporale and M. Lisa Morrone, who acknowledged themselves to be Vice President and Assistant Treasurer, respectively, of BANKERS TRUST COMPANY, a corporation, and that they, as such Vice President and such Assistant Treasurer, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of the corporation by themselves as Vice President and Assistant Treasurer, and as their free act and deed.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ John Florio
John Florio
Notary Public, State of New York
No. 01FL5021631
Qualified in New York County
My Commission Expires December 20, 1995
(SEAL)
SCHEDULE A
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[FORM OF BONDS OF SERIES A]
No. $
THE CONNECTICUT LIGHT AND POWER COMPANY
Incorporated under the Laws of the State of Connecticut
FIRST AND REFUNDING MORTGAGE 5-1/2% BOND, 1994 SERIES A
PRINCIPAL DUE FEBRUARY 1, 1999
FOR VALUE RECEIVED, THE CONNECTICUT LIGHT AND POWER COMPANY, a corporation organized and existing under the laws of the State of Connecticut (hereinafter called the Company), hereby promises to pay to , or registered assigns, the principal sum of dollars, on the first day of February, 1999 and to pay interest on said sum, semiannually on the first days of February and August in each year, commencing August 1, 1994, until the Company's obligation with respect to said principal sum shall be discharged, at the rate per annum specified in the title of this bond from the interest payment date next preceding the date of authentication hereof to which interest has been paid on the bonds of this series, or if the date of authentication hereof is prior to July 16, 1994, then from the date of original issuance, or if the date of authentication hereof is an interest payment date to which interest is being paid or a date between the record date for any such interest payment date and such interest payment date, then from such interest payment date. Both principal and interest shall be payable at the office or agency of the Company in the Borough of Manhattan, New York, New York, in such coin or currency of the United States of America as at the time of payment is legal tender for the payment of public and private debts.
Each installment of interest hereon (other than overdue interest) shall be payable to the person who shall be the registered owner of this bond at the close of business on the record date, which shall be the January 15 or July 15, as the case may be, next preceding the interest payment date, or, if such January 15 or July 15 shall be a legal holiday or a day on which banking institutions in the Borough of Manhattan, New York, New York, are authorized by law to close, the next preceding day which shall not be a legal holiday or a day on which such institutions are so authorized to close.
Reference is hereby made to the further provisions of this bond set forth on the reverse hereof, including without limitation provisions in regard to the call and redemption and the registration of transfer and exchangeability of this bond, and such further provisions shall for all purposes have the same effect as though fully set forth in this place.
This bond shall not become or be valid or obligatory until the certificate of authentication hereon shall have been signed by Bankers Trust Company (hereinafter with its successors as defined in the Mortgage hereinafter referred to, generally called the Trustee), or by such a successor.
IN WITNESS WHEREOF, The Connecticut Light and Power Company has caused this bond to be executed in its corporate name and on its behalf by its President by his signature or a facsimile thereof, and its corporate seal to be affixed or imprinted hereon and attested by the manual or facsimile signature of its Secretary.
Dated as of February 1, 1994.
THE CONNECTICUT LIGHT AND POWER COMPANY
By
President
Attest:
Secretary
[FORM OF TRUSTEE'S CERTIFICATE]
Bankers Trust Company hereby certifies that this bond is one of the bonds described in the within mentioned Mortgage.
BANKERS TRUST COMPANY, TRUSTEE
By
Authorized Officer
Dated:
[FORM OF BOND]
[REVERSE]
THE CONNECTICUT LIGHT AND POWER COMPANY
FIRST AND REFUNDING MORTGAGE 5-1/2% BOND, 1994 SERIES A
This bond is one of an issue of bonds of the Company, of an unlimited authorized amount of coupon bonds or registered bonds without coupons, or both, known as its First and Refunding Mortgage Bonds, all issued or to be issued in one or more series, and is one of a series of said bonds limited in principal amount to one hundred and forty million dollars ($140,000,000), consisting only of registered bonds without coupons and designated "First and Refunding Mortgage 5 1/2% Bonds, 1994 Series A," all of which bonds are issued or are to be issued under, and equally and ratably secured by, a certain Indenture of Mortgage and Deed and Trust dated as of May 1, 1921, and by sixty Supplemental Indentures dated respectively as of May 1, 1921, February 1, 1924, July 1, 1926, June 20, 1928, June 1, 1932, July 1, 1932, July 1, 1935, September 1, 1936, October 20, 1936, December 1, 1936, December 1, 1938, August 31, 1944, September 1, 1944, May 1, 1945, October 1, 1945, November 1, 1949, December 1, 1952, December 1, 1955, January 1, 1958, February 1, 1960, April 1, 1961, September 1, 1963, April 1, 1967, May 1, 1967, January 1, 1968, October 1, 1968, December 1, 1969, January 1, 1970, October 1, 1970, December 1, 1971, August 1, 1972, April 1, 1973, March 1, 1974, February 1, 1975, September 1, 1975, May 1, 1977, March 1, 1978, September 1, 1980, October 1, 1981, June 30, 1982, October 1, 1982, July 1, 1983, January 1, 1984, October 1, 1985, September 1, 1986, April 1, 1987, October 1, 1987, November 1, 1987, April 1, 1988, November 1, 1988, June 1, 1989, September 1, 1989, December 1, 1989, April 1, 1992, July 1, 1992, October 1, 1992, July 1, 1993, July 1, 1993, December 1, 1993 and February 1, 1994 (said Indenture of Mortgage and Deed of Trust and Supplemental Indentures being collectively referred to herein as the "Mortgage"), all executed by the Company to Bankers Trust Company, as Trustee, all as provided in the Mortgage to which reference is made for a statement of the property mortgaged and pledged, the nature and extent of the security, the rights of the holders of the bonds in respect thereof and the terms and conditions upon which the bonds may be issued and are secured; but neither the foregoing reference to the Mortgage nor any provision of this bond or of the Mortgage shall affect or impair the obligation of the Company, which is absolute, unconditional and unalterable, to pay at the maturities herein provided the principal of and interest on this bond as herein provided. The principal of this bond may be declared or may become due on the conditions, in the manner and at the time set forth in the Mortgage, upon the happening of an event of default as in the Mortgage provided.
This bond is transferable by the registered holder hereof in person or by attorney upon surrender hereof at the office or agency of the Company in the Borough of Manhattan, New York, New York, together with a written instrument of transfer in approved form, signed by the holder, and a new bond or bonds of this series for a like principal amount in authorized denominations will be issued in exchange, all as provided in the Mortgage.
Prior to due presentment for registration of transfer of this bond the Company and the Trustee may deem and treat the registered owner hereof as the absolute owner hereof, whether or not this bond be overdue, for the purpose of receiving payment and for all other purposes, and neither the Company nor the Trustee shall be affected by any notice to the contrary.
This bond is exchangeable at the option of the registered holder hereof upon surrender hereof, at the office or agency of the Company in the Borough of Manhattan, New York, New York, for an equal principal amount of bonds of this series of other authorized denominations, in the manner and on the terms provided in the Mortgage.
Bonds of this series are to be issued initially under a book-entry only system and, except as hereinafter provided, registered in the name of The Depository Trust Company, New York, New York ("DTC") or its nominee, which shall be considered to be the holder of all bonds of this series for all purposed of the Mortgage, including, without limitation, payment by the Company of principal of and interest on such bonds of this series and receipt of notices and exercise of rights of holders of such bonds of this series. There shall be a single bond of this series which shall be immobilized in the custody of DTC with the owners of book-entry interests in bonds of this series ("Book-Entry Interests") having no right to receive bonds of this series in the form of physical securities or certificates. Ownership of Book-Entry Interests shall be shown by book-entry on the system maintained and operated by DTC, its participants (the "Participants") and certain persons acting through the Participants. Transfer of ownership of Book-Entry Interests are to be made only by DTC and the Participants by that book-entry system, the Company and the Trustee having no responsibility therefor so long as bonds of this series are registered in the name of DTC or its nominee. DTC is to maintain records of positions of Participants in bonds of this series, and the Participants and persons acting through Participants are to maintain records of the purchasers and owners of Book-Entry Interests. If DTC or its nominees determines not to continue to act as a depository for the bonds of this series in connection with a book-entry only system, another depository, if available, may act instead and the single bond of this series will be transferred into the name of such other depository or its nominee, in which case the above provisions will continue to apply but to the new depository.
If the book-entry only system for bonds of this series is discontinued for any reason upon surrender and cancellation of the single bond of this series registered in the name of the then depository or its nominee, new registered bonds of this series will be issued in authorized denominations to the holder of Book-Entry Interests shown on the book-entry system immediately prior to the discontinuance thereof. Neither the Trustee nor the Company shall be responsible for the accuracy of the interests shown on that system.
The bonds of this series are not subject to redemption as a whole or in part prior to maturity.
The Mortgage provides that the Company and the Trustee, with consent of the holders of not less than 66-2/3% in aggregate principal amount of the bonds at the time outstanding which would be affected by the action proposed to be taken, may by supplemental indenture add any provisions to or change or eliminate any of the provisions of the Mortgage or modify the rights of the holders of the bonds and coupons issued thereunder; provided, however, that without the consent of the holder hereof no such supplemental indenture shall affect the terms of payment of the principal of or interest or premium on this bond, or reduce the aforesaid percentage of the bonds the holders of which are required to consent to such a supplemental indenture, or permit the creation by the Company of any mortgage or pledge or lien in the nature thereof ranking prior to or equal with the lien of the Mortgage or deprive the holder hereof of the lien of the Mortgage on any of the property which is subject to the lien thereof.
As set forth in the Supplemental Indenture establishing the terms and series of the bonds of this series, each holder of this bond, solely by virtue of its acquisition thereof, shall have and be deemed to have consented, without the need for any further action or consent such holder, to any and all amendments to the Mortgage which are intended to eliminate or modify in any manner the requirements of the sinking and improvement fund as set forth in Section 6.14 of the Mortgage.
No recourse shall be had for the payment of the principal of or the interest on this bond, or any part thereof, or for any claim based thereon or otherwise in respect thereof, to any incorporator, or any past, present or future stockholder, officer or director of the Company, either directly or indirectly, by virtue of any statute or by enforcement of any assessment or otherwise, and any and all liability of the said incorporators, stockholders, officers or directors of the Company in respect to this bond is hereby expressly waived and released by every holder hereof.
SCHEDULE B
PROPERTY SUBJECT TO THE LIEN OF THE MORTGAGE
IN CONNECTICUT
TOWN OF ASHFORD
All of the following described rights, privileges and easements situated in the Town of Ashford, County of Windham and State of Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(1) C & M Developers November 8, 1993 103 32
(2) Crossen Builders, Inc. November 8, 1993 103 29
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TOWN OF BRISTOL
All of the following described rights, privileges and easements situated in the Town of Bristol, County of Hartford and State of Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(3) Hart Street Development September 22, 1993 1103 617
Group, Inc.
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TOWN OF BROOKLYN
All of the following described rights, privileges and easements situated in the Town of Brooklyn, County of Windham and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(4) Edward B. Ross et al. November 10, 1993 145 11
TOWN OF CHAPLIN
All of the following described rights, privileges and easements situated in the Town of Chaplin, County of Windham and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(5) Paul V. Carlson December 2, 1993 57 256
TOWN OF CHESHIRE
All of the following described rights, privileges and easements situated in the Town of Cheshire, County of New Haven and State of Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(6) The Ginger Group November 17, 1993 1018 222
(7) Anderson-Wilcox, Inc. May 6, 1993 976 25
(8) James B. Sweeney May 4, 1993 976 27
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TOWN OF CLINTON
All of the following described rights, privileges and easements situated in the Town of Clinton, County of Middlesex and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(9) Moran Builders, Inc. October 13, 1993 226 1034
TOWN OF EAST GRANBY
All of the following described rights, privileges and easements situated in the Town of East Granby, County of Hartford and State of Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(10) Deer Run Corporation July 30, 1993 101 646
(11) Halmar, Incorporated November 17, 1993 102 39
(12) William H. Wilson November 11, 1993 102 156
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TOWN OF EAST HARTFORD
All of the following described rights, privileges and easements situated in the Town of East Hartford, County of Hartford and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(13) Sally Realty Inc. et al. September 29, 1993 1476 206
TOWN OF FARMINGTON
All of the following described rights, privileges and easements situated in the Town of Farmington, County of Hartford and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(14) The Town of Farmington November 17, 1993 471 1018
TOWN OF LEBANON
All of the following described rights, privileges and easements situated in the Town of Lebanon, County of New London and State of Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(15) Robert G. Avery et al. November 1, 1993 155 614
(16) Joyce N. Hoek November 8, 1993 155 616
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(17) Alexander P. McDonnell et al. October 30, 1993 155 619
TOWN OF MANCHESTER
All of the following described rights, privileges and easements situated in the Town of Manchester, County of Hartford and State of Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(18) Rail Line Associates April 13, 1993 1590 83
(19) Manchester Crossroads I September 23, 1993 1643 205
Associates Limited
Partnership et al.
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TOWN OF PLAINVILLE
All of the following described rights, privileges and easements situated in the Town of Plainville, County of Hartford and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(20) R & C Construction, Inc. October 15, 1993 306 715
TOWN OF POMFRET
All of the following described rights, privileges and easements situated in the Town of Pomfret, County of Windham and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(21) Raynham, Inc. October 21, 1993 110 93
TOWN OF SIMSBURY
All of the following described rights, privileges and easements situated in the Town of Simsbury, County of Hartford and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(22) Louis A. Sperandio et al. October 12, 1993 419 484
(23) C.G.R. Developers, Inc. October 25, 1993 420 927
TOWN OF SOUTH WINDSOR
All of the following described rights, privileges and easements situated in the Town of South Windsor, County of Hartford and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(24) Maple Leaf Construction, Inc. November 3, 1993 755 73
TOWN OF THOMPSON
All of the following described rights, privileges and easements situated in the Town of Thompson, County of Windham and State of Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(25) Lemanda Corporation November 11, 1993 308 123
(26) David G. Mossy December 6, 1993 309 219
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TOWN OF WINDSOR
All of the following described rights, privileges and easements situated in the Town of Windsor, County of Hartford and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(27) Culbro Land Resources, Inc. October 11, 1993 969 335
(28) AP Property & Standard October 18, 1993 969 337
Exchange, Inc.
TOWN OF WOODSTOCK
All of the following described rights, privileges and easements situated in the Town of Woodstock, County of Windham and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(29) Nelson E. Douglas et al. July 7, 1993 239 366
Exhibit 4.2.16
SUPPLEMENTAL INDENTURE
Dated as of February 1, 1994
TO
Indenture of Mortgage and Deed of Trust
Dated as of May 1, 1921
THE CONNECTICUT LIGHT AND POWER COMPANY
TO
BANKERS TRUST COMPANY, Trustee
1994 Series B Bonds, Due February 1, 2004
THE CONNECTICUT LIGHT AND POWER COMPANY
Supplemental Indenture, Dated as of February 1, 1994
TABLE OF CONTENTS
PAGE
Parties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Granting Clauses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Habendum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Grant in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 1.
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FORM AND PROVISIONS OF BONDS OF SERIES B
SECTION 1.01. Designation; Amount. . . . . . . . . . . . . . . . . . . . 3
SECTION 1.02. Form of Bonds of Series B. . . . . . . . . . . . . . . . . 3
SECTION 1.03. Provisions of Bonds of Series B; Interest Accrual. . . . . 3
SECTION 1.04. Transfer and Exchange of Bonds of Series B . . . . . . . . 4
SECTION 1.05. Sinking and Improvement Fund . . . . . . . . . . . . . . . 4
ARTICLE 2.
REDEMPTION OF BONDS OF SERIES B. . . . . . . . . . 4
ARTICLE 3.
MISCELLANEOUS
SECTION 3.01. Benefits of Supplemental Indenture and
Bonds of Series B . . . . . . . . . . . . . . . . . . . . 5
SECTION 3.02. Effect of Table of Contents and Headings . . . . . . . . . 5
SECTION 3.03. Counterparts . . . . . . . . . . . . . . . . . . . . . . . 5
TESTIMONIUM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ACKNOWLEDGMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SCHEDULE A - Form of Bond of Series B, Form of
Trustee's Certificate. . . . . . . . . . . . . . . . . . . . . . . . . 7
SCHEDULE B - Property Subject to the Lien of the Mortgage. . . . . . . .12
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SUPPLEMENTAL INDENTURE, dated as of the first day of February, 1994, between THE CONNECTICUT LIGHT AND POWER COMPANY, a corporation organized and existing under the laws of the State of Connecticut (hereinafter called "Company") and BANKERS TRUST COMPANY, a corporation organized and existing under the laws of the State of New York (hereinafter called "Trustee").
WHEREAS, the Company heretofore duly executed, acknowledged and delivered to the Trustee a certain Indenture of Mortgage and Deed of Trust dated as of May 1, 1921, and sixty Supplemental Indentures thereto dated respectively as of May 1, 1921, February 1, 1924, July 1, 1926, October 20, 1936, December 1, 1936, December 1, 1938, August 31, 1944, September 1, 1944, May 1, 1945, October 1, 1945, November 1, 1949, December 1, 1952, December 1, 1955, January 1, 1958, February 1, 1960, April 1, 1961, September 1, 1963, April 1, 1967, May 1, 1967, January 1, 1968, October 1, 1968, December 1, 1969, January 1, 1970, October 1, 1970, December 1, 1971, August 1, 1972, April 1, 1973, March 1, 1974, February 1, 1975, September 1, 1975, May 1, 1977, March 1, 1978, September 1, 1980, October 1, 1981, June 30, 1982, July 1, 1983, January 1, 1984, October 1, 1985, September 1, 1986, April 1, 1987, October 1, 1987, November 1, 1987, April 1, 1988, November 1, 1988, June 1, 1989, September 1, 1989, December 1, 1989, April 1, 1992, July 1, 1992, October 1, 1992, July 1, 1993, July 1, 1993, December 1, 1993 and February 1, 1994 (said Indenture of Mortgage and Deed of Trust (i) as heretofore amended, being hereinafter generally called the "Mortgage Indenture," and (ii) together with said Supplemental Indentures thereto, being hereinafter generally called the "Mortgage"), all of which have been duly recorded as required by law, for the purpose of securing its First and Refunding Mortgage Bonds (of which $1,235,000,000 aggregate principal amount are outstanding at the date of this Supplemental Indenture) to an unlimited amount, issued and to be issued for the purposes and in the manner therein provided, of which Mortgage this Supplemental Indenture is intended to be made a part, as fully as if therein recited at length;
WHEREAS, the Company by appropriate and sufficient corporate action in conformity with the provisions of the Mortgage has duly determined to create a further series of bonds under the Mortgage to be designated "First and Refunding Mortgage 6-1/8% Bonds, 1994 Series B" (hereinafter generally referred to as the "bonds of Series B"), to consist of fully registered bonds containing terms and provisions duly fixed and determined by the Board of Directors of the Company and expressed in this Supplemental Indenture, such fully registered bonds and the Trustee's certificate of its authentication thereof to be substantially in the forms thereof respectively set forth in Schedule A appended hereto and made a part hereof; and
WHEREAS, the execution and delivery of this Supplemental Indenture and the issue of not exceeding one hundred and forty million dollars ($140,000,000) in aggregate principal amount of bonds of Series B and other necessary actions have been duly authorized by the Board of Directors of the Company; and WHEREAS, the Company proposes to execute and deliver this Supplemental Indenture to provide for the issue of the bonds of Series B and to confirm the lien of the Mortgage on the property referred to below, all as permitted by Section 14.01 of the Mortgage Indenture; and
WHEREAS, all acts and things necessary to constitute this Supplemental Indenture a valid, binding and legal instrument and to make the bonds of Series B, when executed by the Company and authenticated by the Trustee valid, binding and legal obligations of the Company have been authorized and performed;
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE OF MORTGAGE AND DEED OF
TRUST WITNESSETH:
That in order to secure the payment of the principal of and interest on all bonds issued and to be issued under the Mortgage, according to their tenor and effect, and according to the terms of the Mortgage and this Supplemental Indenture, and to secure the performance of the covenants and obligations in said bonds and in the Mortgage and this Supplemental Indenture respectively contained, and for the better assuring and confirming unto the Trustee, its successor or successors and its or their assigns, upon the trusts and for the purposes expressed in the Mortgage and this Supplemental Indenture, all and singular the hereditament, premises, estates and property of the Company thereby conveyed or assigned or intended so to be, or which the Company may thereafter have become bound to convey or assign to the Trustee, as security for said bonds (except such hereditament, premises, estates and property as shall have been disposed of or released or withdrawn from the lien of the Mortgage and this Supplemental Indenture, in accordance with the provisions thereof and subject to alterations, modifications and changes in said hereditament, premises, estates and property as permitted under the provisions thereof), the Company, for and in consideration of the premises and the sum of One Dollar ($1.00) to it in hand paid by the Trustee, the receipt whereof is hereby acknowledged, and of other valuable considerations, has granted, bargained, sold, assigned, mortgaged, pledged, transferred, set over, aliened, enfeoffed, released, conveyed and confirmed, and by these presents does grant, bargain, sell, assign, mortgage, pledge, transfer, set over, alien, enfeoff, release, convey and confirm unto said Bankers Trust Company, as Trustee, and its successor or successors in the trusts created by the Mortgage and this Supplemental Indenture, and its and their assigns, all of said hereditament, premises, estates and property (except and subject as aforesaid), as fully as though described at length herein,including, without limitation of the foregoing, the property, rights and privileges of the Company described or referred to in Schedule B hereto.
Together with all plants, buildings, structures, improvements and machinery located upon said real estate or any portion thereof, and all rights, privileges and easements of every kind and nature appurtenant thereto, and all and singular the tenements, hereditament and appurtenances belonging to the real estate or any part thereof described or referred to in Schedule B or intended so to be, or in any wise appertaining thereto, and the reversions, remainders, rents, issues and profits thereof, and also all the estate, right, title, interest, property, possession, claim and demand whatsoever, as well in law as in equity, of the Company, of, in and to the same and any and every part thereof, with the appurtenances; except and subject as aforesaid.
TO HAVE AND TO HOLD all and singular the property, rights and privileges hereby granted or mentioned or intended so to be, together with all and singular the reversions, remainders, rents, revenues, income, issues and profits, privileges and appurtenances, now or hereafter belonging or in any way appertaining thereto, unto the Trustee and its successor or successors in the trust created by the Mortgage and this Supplemental Indenture, and its and their assigns, forever, and with like effect as if the above described property, rights and privileges had been specifically described at length in the Mortgage and this Supplemental Indenture.
Subject, however, to permitted liens, as defined in the Mortgage Indenture.
IN TRUST, NEVERTHELESS, upon the terms and trusts of the Mortgage and this Supplemental Indenture for those who shall hold the bonds and coupons issued and to be issued thereunder, or any of them, without preference, priority or distinction as to lien of any of said bonds and coupons over any others thereof by reason of priority in the time of the issue or negotiation thereof, or otherwise howsoever, subject, however, to the provisions in reference to extended, transferred or pledged coupons and claims for interest set forth in the Mortgage and this Supplemental Indenture (and subject to any sinking fund that may heretofore have been or hereafter be created for the benefit of any particular series).
And it is hereby covenanted that all such bonds of Series B are to be issued, authenticated and delivered, and that the mortgaged premises are to be held by the Trustee, upon and subject to the trusts, covenants, provisions and conditions and for the uses and purposes set forth in the Mortgage and this Supplemental Indenture and upon and subject to the further covenants, provisions and conditions and for the uses and purposes hereinafter set forth, as follows, to wit:
ARTICLE 1.
FORM AND PROVISIONS OF BONDS OF SERIES B
SECTION 1.01. Designation; Amount. The bonds of Series B shall be designated "First and Refunding Mortgage 6-1/8% Bonds, 1994 Series B" and, subject to Section 2.08 of the Mortgage Indenture, shall not exceed one hundred and forty million dollars ($140,000,000) in aggregate principal amount at any one time outstanding. The initial issue of the bonds of Series B may be effected upon compliance with the applicable provisions of the Mortgage Indenture.
SECTION 1.02. Form of Bonds of Series B. The bonds of Series B shall be issued only in fully registered form without coupons in denominations of one thousand dollars ($1,000) and multiples thereof.
The bonds of Series B and the certificate of the Trustee upon said bonds shall be substantially in the forms thereof respectively set forth in Schedule A appended hereto.
SECTION 1.03. Provisions of Bonds of Series B; Interest Accrual. The bonds of Series B shall mature on February 1, 2004 and shall bear interest, payable semiannually on the first days of February and August of each year, commencing August 1, 1994, at the rate specified in their title, until the Company's obligation in respect of the principal thereof shall be discharged; and shall be payable both as to principal and interest at the office or agency of the Company in the Borough of Manhattan, New York, New York, in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. The interest on the bonds of Series B, whether in temporary or definitive form, shall be payable without presentation of such bonds; and only to or upon the written order of the registered holders thereof of record at the applicable record date. The bonds of Series B shall be callable for redemption in whole or in part according to the terms and provisions provided herein in Article 2.
Each bond of Series B shall be dated as of February 1, 1994 and shall bear interest on the principal amount thereof from the interest payment date next preceding the date of authentication thereof by the Trustee to which interest has been paid on the bonds of Series B, or if the date of authentication thereof is prior to July 16, 1994, then from the date of original issuance, or if the date of authentication thereof be an interest payment date to which interest is being paid or a date between the record date for any such interest payment date and such interest payment date, then from such interest payment date.
The person in whose name any bond of Series B is registered at the close of business on any record date (as hereinafter defined) with respect to any interest payment date shall be entitled to receive the interest payable on such interest payment date notwithstanding the cancellation of such bond upon any registration of transfer or exchange thereof subsequent to the record date and prior to such interest payment date, except that if and to the extent the Company shall default in the payment of the interest due on such interest payment date, then such defaulted interest shall be paid to the person in whose name such bond is registered on a subsequent record date for the payment of defaulted interest if one shall have been established as hereinafter provided and otherwise on the date of payment of such defaulted interest. A subsequent record date may be established by the Company by notice mailed to the owners of bonds of Series B not less than ten days preceding such record date, which record date shall not be more than thirty days prior to the subsequent interest payment date. The term "record date" as used in this Section with respect to any regular interest payment (i.e., February 1 or August 1) shall mean the January 15 or July 15, as the case may be, next preceding such interest payment date, or if such January 15 or July 15 shall be a legal holiday or a day on which banking institutions in the Borough of Manhattan, New York, New York are authorized by law to close, the next preceding day which shall not be a legal holiday or a day on which such institutions are so authorized to close.
SECTION 1.04. Transfer and Exchange of Bonds of Series B. The bonds
of Series B may be surrendered for registration of transfer as provided in
Section 2.06 of the Mortgage Indenture at the office or agency of the
Company in the Borough of Manhattan, New York, New York, and may be
surrendered at said office for exchange for a like aggregate principal
amount of bonds of Series B of other authorized denominations.
Notwithstanding the provisions of Section 2.06 of the Mortgage Indenture,
no charge, except for taxes or other governmental charges, shall be made by
the Company for any registration of transfer of bonds of Series B or for
the exchange of any bonds of Series B for such bonds of other authorized
denominations.
SECTION 1.05. Sinking and Improvement Fund. Each holder of a bond of Series B, solely by virtue of its acquisition thereof, shall have and be deemed to have consented, without the need for any further action or consent by such holder, to any and all amendments to the Mortgage Indenture which are intended to eliminate or modify in any manner the requirements of the sinking and improvement fund as provided for in Section 6.14 thereof.
ARTICLE 2.
REDEMPTION OF BONDS OF SERIES B.
The bonds of Series B are not subject to redemption at the option of the Company prior to February 1, 1999. Thereafter, the bonds of Series B shall be redeemable as a whole at any time or in part from time to time in accordance with the provisions of the Mortgage and upon not less than thirty (30) days' prior notice given by mail as provided in the Mortgage (which notice may state that it is subject to the receipt of the redemption moneys by the Trustee on or before the date fixed for redemption and which notice shall be of no effect unless such moneys are so received on or before such date), either at the option of the Company, or for the purpose of any applicable provision of the Mortgage, at the following prices:
(a) if redeemed with trust moneys deposited with or received by
the Trustee pursuant to Section 3.55 or Section 6.06 or Section 6.09 or
Section 6.14 or Article 8.5 of the Mortgage Indenture, then at the
applicable special redemption price, stated as a percentage of the
principal amount, specified under the column headed Special Redemption
Price in the form of bond of Series B set forth in Schedule A appended
hereto, together in every case with accrued and unpaid interest thereon to
the date fixed for redemption; and
(b) otherwise, at the applicable general redemption price, stated as a percentage of the principal amount, specified under the column headed General Redemption Price in the form of bond of Series B set forth in Schedule A appended hereto, together in every case with accrued and unpaid interest thereon to the date fixed for redemption.
ARTICLE 3.
MISCELLANEOUS.
SECTION 3.01. Benefits of Supplemental Indenture and Bonds of Series
B. Nothing in this Supplemental Indenture, or in the bonds of Series B,
expressed or implied, is intended to or shall be construed to give to any
person or corporation other than the Company, the Trustee and the holders
of the bonds and interest obligations secured by the Mortgage and this
Supplemental Indenture, any legal or equitable right, remedy or claim under
or in respect of this Supplemental Indenture or of any covenant, condition
or provision herein contained. All the covenants, conditions and
provisions hereof are and shall be held to be for the sole and exclusive
benefit of the Company, the Trustee and the holders of the bonds and
interest obligations secured by the Mortgage and this Supplemental
Indenture.
SECTION 3.02. Effect of Table of Contents and Headings. The table of contents and the descriptive headings of the several Articles and Sections of this Supplemental Indenture are inserted for convenience of reference only and are not to be taken to be any part of this Supplemental Indenture or to control or affect the meaning, construction or effect of the same.
SECTION 3.03. Counterparts. For the purpose of facilitating the recording hereof, this Supplemental Indenture may be executed in any number of counterparts, each of which shall be and shall be taken to be an original and all collectively but one instrument.
IN WITNESS WHEREOF, The Connecticut Light and Power Company has caused these presents to be executed by a Vice President and its corporate seal to be hereunto affixed, duly attested by its Secretary or an Assistant Secretary, and Bankers Trust Company has caused these presents to be executed by a Vice President or Assistant Vice President and its corporate seal to be hereunto affixed, duly attested by one of its Assistant Treasurers, as of the day and year first above written.
THE CONNECTICUT LIGHT AND POWER
COMPANY
Attest:
/s/ Mark A. Joyse By /s/ John B. Keane
Mark A. Joyse John B. Keane
Assistant Secretary Vice President
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(SEAL) Signed, sealed and delivered in the presence of:
/s/ Tracy A. DeCredico
/s/ Shelly O. Peters
BANKERS TRUST COMPANY
Attest:
/s/ Lisa Morrone By /s/ Robert Caporale
M. Lisa Morrone Robert Caporale
Assistant Treasurer Vice President
(SEAL) Signed, sealed and delivered
in the presence of:
/s/ Dennis Mitchell
Denise Mitchell
/s/ Michael Weber
Michael Weber
STATE OF CONNECTICUT )
) SS.: BERLIN
COUNTY OF HARTFORD )
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On this 4th day of February 1994, before me, Maureen J. Rothwell, the undersigned officer, personally appeared John B. Keane and Mark A. Joyse, who acknowledged themselves to be Vice President and Assistant Secretary, respectively, of THE CONNECTICUT LIGHT AND POWER COMPANY, a corporation, and that they, as such Vice President and such Assistant Secretary, being authorized so to do, executed the foregoing instrument for the purpose therein contained, by signing the name of the corporation by themselves as Vice President and Assistant Secretary, and as their free act and deed.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Maureen Rothwell
Maureen J. Rothwell
Notary Public
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My commission expires May 31, 1996
(SEAL)
STATE OF NEW YORK )
) SS.: NEW YORK
COUNTY OF NEW YORK )
On this 3rd day of February, 1994, before me, John Florio, the undersigned officer, personally appeared Robert Caporale and M. Lisa Morrone, who acknowledged themselves to be Vice President and Assistant Treasurer, respectively, of BANKERS TRUST COMPANY, a corporation, and that they, as such Vice President and such Assistant Treasurer, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of the corporation by themselves as Vice President and Assistant Treasurer, and as their free act and deed.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ John Florio John Florio Notary Public, State of New York No. 01FL5021631 Qualified in New York County My Commission Expires December 20, 1995 |
(SEAL)
SCHEDULE A
[FORM OF BONDS OF SERIES B]
No. $
THE CONNECTICUT LIGHT AND POWER COMPANY
Incorporated under the Laws of the State of Connecticut
FIRST AND REFUNDING MORTGAGE 6-1/8% BOND, 1994 SERIES B
PRINCIPAL DUE FEBRUARY 1, 2004
FOR VALUE RECEIVED, THE CONNECTICUT LIGHT AND POWER COMPANY, a corporation organized and existing under the laws of the State of Connecticut (hereinafter called the Company), hereby promises to pay to , or registered assigns, the principal sum of dollars, on the first day of February, 2004 and to pay interest on said sum, semiannually on the first days of February and August in each year, commencing August 1, 1994, until the Company's obligation with respect to said principal sum shall be discharged, at the rate per annum specified in the title of this bond from the interest payment date next preceding the date of authentication hereof to which interest has been paid on the bonds of this series, or if the date of authentication hereof is prior to July 16, 1994, then from the date of original issuance, or if the date of authentication hereof is an interest payment date to which interest is being paid or a date between the record date for any such interest payment date and such interest payment date, then from such interest payment date. Both principal and interest shall be payable at the office or agency of the Company in the Borough of Manhattan, New York, New York, in such coin or currency of the United States of America as at the time of payment is legal tender for the payment of public and private debts.
Each installment of interest hereon (other than overdue interest) shall be payable to the person who shall be the registered owner of this bond at the close of business on the record date, which shall be the January 15 or July 15, as the case may be, next preceding the interest payment date, or, if such January 15 or July 15 shall be a legal holiday or a day on which banking institutions in the Borough of Manhattan, New York, New York, are authorized by law to close, the next preceding day which shall not be a legal holiday or a day on which such institutions are so authorized to close.
Reference is hereby made to the further provisions of this bond set forth on the reverse hereof, including without limitation provisions in regard to the call and redemption and the registration of transfer and exchangeability of this bond, and such further provisions shall for all purposes have the same effect as though fully set forth in this place.
This bond shall not become or be valid or obligatory until the certificate of authentication hereon shall have been signed by Bankers Trust Company (hereinafter with its successors as defined in the Mortgage hereinafter referred to, generally called the Trustee), or by such a successor.
IN WITNESS WHEREOF, The Connecticut Light and Power Company has caused this bond to be executed in its corporate name and on its behalf by its President by his signature or a facsimile thereof, and its corporate seal to be affixed or imprinted hereon and attested by the manual or facsimile signature of its Secretary.
Dated as of February 1, 1994.
THE CONNECTICUT LIGHT AND POWER COMPANY
By
President
Attest:
Secretary
[FORM OF TRUSTEE'S CERTIFICATE]
Bankers Trust Company hereby certifies that this bond is one of the bonds described in the within mentioned Mortgage.
BANKERS TRUST COMPANY, TRUSTEE
By Authorized Officer
Dated:
[FORM OF BOND]
[REVERSE]
THE CONNECTICUT LIGHT AND POWER COMPANY
FIRST AND REFUNDING MORTGAGE 6-1/8% BOND, 1994 SERIES B
This bond is one of an issue of bonds of the Company, of an unlimited authorized amount of coupon bonds or registered bonds without coupons, or both, known as its First and Refunding Mortgage Bonds, all issued or to be issued in one or more series, and is one of a series of said bonds limited in principal amount to one hundred and forty million dollars ($140,000,000), consisting only of registered bonds without coupons and designated "First and Refunding Mortgage 6-1/8% Bonds, 1994 Series B," all of which bonds are issued or are to be issued under, and equally and ratably secured by, a certain Indenture of Mortgage and Deed and Trust dated as of May 1, 1921, and by sixty-one Supplemental Indentures dated respectively as of May 1, 1921, February 1, 1924, July 1, 1926, June 20, 1928, June 1, 1932, July 1, 1932, July 1, 1935, September 1, 1936, October 20, 1936, December 1, 1936, December 1, 1938, August 31, 1944, September 1, 1944, May 1, 1945, October 1, 1945, November 1, 1949, December 1, 1952, December 1, 1955, January 1, 1958, February 1, 1960, April 1, 1961, September 1, 1963, April 1, 1967, May 1, 1967, January 1, 1968, October 1, 1968, December 1, 1969, January 1, 1970, October 1, 1970, December 1, 1971, August 1, 1972, April 1, 1973, March 1, 1974, February 1, 1975, September 1, 1975, May 1, 1977, March 1, 1978, September 1, 1980, October 1, 1981, June 30, 1982, October 1, 1982, July 1, 1983, January 1, 1984, October 1, 1985, September 1, 1986, April 1, 1987, October 1, 1987, November 1, 1987, April 1, 1988, November 1, 1988, June 1, 1989, September 1, 1989, December 1, 1989, April 1, 1992, July 1, 1992, October 1, 1992, July 1, 1993, July 1, 1993, December 1, 1993, February 1, 1994 and February 1, 1994 (said Indenture of Mortgage and Deed of Trust and Supplemental Indentures being collectively referred to herein as the "Mortgage"), all executed by the Company to Bankers Trust Company, as Trustee, all as provided in the Mortgage to which reference is made for a statement of the property mortgaged and pledged, the nature and extent of the security, the rights of the holders of the bonds in respect thereof and the terms and conditions upon which the bonds may be issued and are secured; but neither the foregoing reference to the Mortgage nor any provision of this bond or of the Mortgage shall affect or impair the obligation of the Company, which is absolute, unconditional and unalterable, to pay at the maturities herein provided the principal of and interest on this bond as herein provided. The principal of this bond may be declared or may become due on the conditions, in the manner and at the time set forth in the Mortgage, upon the happening of an event of default as in the Mortgage provided.
This bond is transferable by the registered holder hereof in person or by attorney upon surrender hereof at the office or agency of the Company in the Borough of Manhattan, New York, New York, together with a written instrument of transfer in approved form, signed by the holder, and a new bond or bonds of this series for a like principal amount in authorized denominations will be issued in exchange, all as provided in the Mortgage. Prior to due presentment for registration of transfer of this bond the Company and the Trustee may deem and treat the registered owner hereof as the absolute owner hereof, whether or not this bond be overdue, for the purpose of receiving payment and for all other purposes, and neither the Company nor the Trustee shall be affected by any notice to the contrary.
This bond is exchangeable at the option of the registered holder hereof upon surrender hereof, at the office or agency of the Company in the Borough of Manhattan, New York, New York, for an equal principal amount of bonds of this series of other authorized denominations, in the manner and on the terms provided in the Mortgage.
Bonds of this series are to be issued initially under a book-entry only system and, except as hereinafter provided, registered in the name of The Depository Trust Company, New York, New York ("DTC") or its nominee, which shall be considered to be the holder of all bonds of this series for all purposed of the Mortgage, including, without limitation, payment by the Company of principal of and interest on such bonds of this series and receipt of notices and exercise of rights of holders of such bonds of this series. There shall be a single bond of this series which shall be immobilized in the custody of DTC with the owners of book-entry interests in bonds of this series ("Book-Entry Interests") having no right to receive bonds of this series in the form of physical securities or certificates. Ownership of Book-Entry Interests shall be shown by book-entry on the system maintained and operated by DTC, its participants (the "Participants") and certain persons acting through the Participants. Transfer of ownership of Book-Entry Interests are to be made only by DTC and the Participants by that book-entry system, the Company and the Trustee having no responsibility therefor so long as bonds of this series are registered in the name of DTC or its nominee. DTC is to maintain records of positions of Participants in bonds of this series, and the Participants and persons acting through Participants are to maintain records of the purchasers and owners of Book-Entry Interests. If DTC or its nominees determines not to continue to act as a depository for the bonds of this series in connection with a book-entry only system, another depository, if available, may act instead and the single bond of this series will be transferred into the name of such other depository or its nominee, in which case the above provisions will continue to apply but to the new depository.
If the book-entry only system for bonds of this series is discontinued for any reason upon surrender and cancellation of the single bond of this series registered in the name of the then depository or its nominee, new registered bonds of this series will be issued in authorized denominations to the holder of Book-Entry Interests shown on the book-entry system immediately prior to the discontinuance thereof. Neither the Trustee nor the Company shall be responsible for the accuracy of the interests shown on that system.
The bonds of this series are not subject to redemption at the option of the Company prior to February 1, 1999. Thereafter, the bonds of this series are subject to redemption prior to maturity as a whole at any time or in part from time to time in accordance with the provisions of the Mortgage, upon not less than thirty (30) days' prior notice (which notice may be made subject to the deposit of redemption moneys with the Trustee before the date fixed for redemption) given by mail as provided in the Mortgage, either at the option of the Company, or for the purposes of any applicable provision of the Mortgage, at the following prices, together in every case with accrued and unpaid interest thereon to the date fixed for redemption:
(a) if redeemed with trust moneys deposited with or received by the Trustee pursuant to specified provisions of the Mortgage, then at the applicable special redemption price, stated as a percentage of the principal amount, set forth below; and
(b) otherwise, at the applicable general redemption price, stated as a percentage of the principal amount, set forth below:
If date fixed for General Special
redemption falls Redemption Redemption
within twelve months' Price (% Price (%
period ending the of principal of principal
last day of January amount called) amount called)
2000 101.68% 100.00%
2001 101.12 100.00
2002 100.56 100.00
2003 100.00 100.00
2004 100.00 100.00
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The Mortgage provides that the Company and the Trustee, with consent of the holders of not less than 66-2/3% in aggregate principal amount of the bonds at the time outstanding which would be affected by the action proposed to be taken, may by supplemental indenture add any provisions to or change or eliminate any of the provisions of the Mortgage or modify the rights of the holders of the bonds and coupons issued thereunder; provided, however, that without the consent of the holder hereof no such supplemental indenture shall affect the terms of payment of the principal of or interest or premium on this bond, or reduce the aforesaid percentage of the bonds the holders of which are required to consent to such a supplemental indenture, or permit the creation by the Company of any mortgage or pledge or lien in the nature thereof ranking prior to or equal with the lien of the Mortgage or deprive the holder hereof of the lien of the Mortgage on any of the property which is subject to the lien thereof.
As set forth in the Supplemental Indenture establishing the terms and series of the bonds of this series, each holder of this bond, solely by virtue of its acquisition thereof, shall have and be deemed to have consented, without the need for any further action or consent such holder, to any and all amendments to the Mortgage which are intended to eliminate or modify in any manner the requirements of the sinking and improvement fund as set forth in Section 6.14 of the Mortgage.
No recourse shall be had for the payment of the principal of or the interest on this bond, or any part thereof, or for any claim based thereon or otherwise in respect thereof, to any incorporator, or any past, present or future stockholder, officer or director of the Company, either directly or indirectly, by virtue of any statute or by enforcement of any assessment or otherwise, and any and all liability of the said incorporators, stockholders, officers or directors of the Company in respect to this bond is hereby expressly waived and released by every holder hereof.
SCHEDULE B
PROPERTY SUBJECT TO THE LIEN OF THE MORTGAGE
IN CONNECTICUT
TOWN OF ASHFORD
All of the following described rights, privileges and easements situated in the Town of Ashford, County of Windham and State of Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(1) C & M Developers November 8, 1993 103 32
(2) Crossen Builders, Inc. November 8, 1993 103 29
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TOWN OF BRISTOL
All of the following described rights, privileges and easements situated in the Town of Bristol, County of Hartford and State of Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(3) Hart Street Development September 22, 1993 1103 617
Group, Inc.
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TOWN OF BROOKLYN
All of the following described rights, privileges and easements situated in the Town of Brooklyn, County of Windham and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(4) Edward B. Ross et al. November 10, 1993 145 11
TOWN OF CHAPLIN
All of the following described rights, privileges and easements situated in the Town of Chaplin, County of Windham and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(5) Paul V. Carlson December 2, 1993 57 256
TOWN OF CHESHIRE
All of the following described rights, privileges and easements situated in the Town of Cheshire, County of New Haven and State of Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(6) The Ginger Group November 17, 1993 1018 222
(7) Anderson-Wilcox, Inc. May 6, 1993 976 25
(8) James B. Sweeney May 4, 1993 976 27
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TOWN OF CLINTON
All of the following described rights, privileges and easements situated in the Town of Clinton, County of Middlesex and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(9) Moran Builders, Inc. October 13, 1993 226 1034
TOWN OF EAST GRANBY
All of the following described rights, privileges and easements situated in the Town of East Granby, County of Hartford and State of Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(10) Deer Run Corporation July 30, 1993 101 646
(11) Halmar, Incorporated November 17, 1993 102 39
(12) William H. Wilson November 11, 1993 102 156
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TOWN OF EAST HARTFORD
All of the following described rights, privileges and easements situated in the Town of East Hartford, County of Hartford and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(13) Sally Realty Inc. et al. September 29, 1993 1476 206
TOWN OF FARMINGTON
All of the following described rights, privileges and easements situated in the Town of Farmington, County of Hartford and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(14) The Town of Farmington November 17, 1993 471 1018
TOWN OF LEBANON
All of the following described rights, privileges and easements situated in the Town of Lebanon, County of New London and State of Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(15) Robert G. Avery et al. November 1, 1993 155 614
(16) Joyce N. Hoek November 8, 1993 155 616
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(17) Alexander P. McDonnell et al. October 30, 1993 155 619
TOWN OF MANCHESTER
All of the following described rights, privileges and easements situated in the Town of Manchester, County of Hartford and State of Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(18) Rail Line Associates April 13, 1993 1590 83
(19) Manchester Crossroads I September 23, 1993 1643 205
Associates Limited
Partnership et al.
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TOWN OF PLAINVILLE
All of the following described rights, privileges and easements situated in the Town of Plainville, County of Hartford and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(20) R & C Construction, Inc. October 15, 1993 306 715
TOWN OF POMFRET
All of the following described rights, privileges and easements situated in the Town of Pomfret, County of Windham and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(21) Raynham, Inc. October 21, 1993 110 93
TOWN OF SIMSBURY
All of the following described rights, privileges and easements situated in the Town of Simsbury, County of Hartford and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(22) Louis A. Sperandio et al. October 12, 1993 419 484
(23) C.G.R. Developers, Inc. October 25, 1993 420 927
TOWN OF SOUTH WINDSOR
All of the following described rights, privileges and easements situated in the Town of South Windsor, County of Hartford and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(24) Maple Leaf Construction, Inc. November 3, 1993 755 73
TOWN OF THOMPSON
All of the following described rights, privileges and easements situated in the Town of Thompson, County of Windham and State of Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(25) Lemanda Corporation November 11, 1993 308 123
(26) David G. Mossy December 6, 1993 309 219
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TOWN OF WINDSOR
All of the following described rights, privileges and easements situated in the Town of Windsor, County of Hartford and State of Connecticut, more particularly described in the following deeds, viz:
Recorded
Grantor Date of Instrument Volume Page
(27) Culbro Land Resources, Inc. October 11, 1993 969 335
(28) AP Property & Standard October 18, 1993 969 337
Exchange, Inc.
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TOWN OF WOODSTOCK
All of the following described rights, privileges and easements situated in the Town of Woodstock, County of Windham and State of Connecticut, more particularly described in the following deeds, viz:
Recorded Grantor Date of Instrument Volume Page
(29) Nelson E. Douglas et al. July 7, 1993 239 366
Exhibit 4.2.21
Connecticut Development Authority
and
The Connecticut Light and Power Company
LOAN AGREEMENT
Dated as of September 1, 1993
Connecticut Development Authority
$245,500,000 Pollution Control Revenue Refunding Bonds
(The Connecticut Light and Power Company Project - 1993A Series)
TABLE OF CONTENTS
Page
PREAMBLE ................................................ 1
ARTICLE I DEFINITIONS AND INTERPRETATION
Section 1.1. Definitions.......................... 5
Section 1.2. Interpretation....................... 13
ARTICLE II REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations by the Authority..... 15
Section 2.2. Limitation of Control by Borrower.... 16
Section 2.3. Representations by the Borrower...... 17
ARTICLE III THE LOAN
Section 3.1. Loan Clauses......................... 20
Section 3.2. Other Amounts Payable................ 21
Section 3.3. Manner of Payment.................... 22
Section 3.4. Obligation Unconditional............. 22
Section 3.5. Security Clauses..................... 22
Section 3.6. Issuance of Bonds.................... 22
Section 3.7. Use of Priority Amounts.............. 22
Section 3.8. Effect of Drawing Under Letter
of Credit............................ 23
Section 3.9. Effective Date and Term.............. 23
Section 3.10. Borrower's Purchase of Bonds......... 23
Section 3.11. Letter of Credit..................... 24
Section 3.12. Requirements for Delivery of a
Substitute Credit Facility........... 24
Section 3.13. Securities Laws...................... 26
Section 3.14. New York Paying Agent................ 26
ARTICLE IV THE PROJECT
Section 4.1. Completion of the Project............ 27
Section 4.2. No Warranty Regarding Condition,
Suitability or Cost of Project....... 27
Section 4.3. Taxes................................ 27
Section 4.4. Insurance............................ 28
Section 4.5. Compliance with Law.................. 28
Section 4.6. Maintenance and Repair............... 28
ARTICLE V CONDEMNATION DAMAGE AND DESTRUCTION
Section 5.1. No Abatement of Payments Hereunder... 30
Section 5.2. Project Disposition Upon Condemnation,
Damage or Destruction................ 30
Section 5.3. Application of Net Proceeds of
Insurance or Condemnation............ 30
ARTICLE VI COVENANTS
Section 6.1. The Borrower to Maintain its
Corporate Existence; Conditions under
which Exceptions Permitted........... 31
Section 6.2. Indemnification, Payment of Expenses,
and Advances......................... 31
Section 6.3. Incorporation of Tax Regulatory
Agreement; Payments Upon Taxability.. 34
Section 6.4. Covenant as to Project Use........... 35
Section 6.5. Further Assurances and Corrective
Instruments.......................... 37
Section 6.6. Covenant by Borrower as to Compliance
with Indenture....................... 37
Section 6.7. Assignment of Agreement or Note...... 37
Section 6.8. Inspection........................... 37
Section 6.9. Default Notification................. 38
Section 6.10. Covenant Against Discrimination...... 38
Section 6.11. Authority Costs and Expenses......... 38
ARTICLE VII EVENTS OF DEFAULT AND REMEDIES
Section 7.1. Events of Default.................... 39
Section 7.2. Remedies on Default.................. 40
Section 7.3. Remedies Upon Project Use Default.... 41
Section 7.4. No Duty to Mitigate Damages.......... 41
Section 7.5. Remedies Cumulative.................. 42
ARTICLE VIII PREPAYMENT PROVISIONS
Section 8.1. Optional Prepayment.................. 43
Section 8.2. Notice by the Borrower of Optional
Prepayment........................... 45
Section 8.3. Mandatory Prepayment on Taxability... 45
Section 8.4. Mandatory Prepayment Upon Occurrence
of Certain Events.................... 45
ARTICLE IX GENERAL
Section 9.1. Indenture............................ 46
Section 9.2. Benefit of and Enforcement by
Bondholders.......................... 46
Section 9.3. Force Majeure........................ 46
Section 9.4. Amendments........................... 47
Section 9.5. Notices.............................. 47
Section 9.6. Prior Agreements Superseded.......... 47
Section 9.7. Execution of Counterparts............ 48
Section 9.8. Time................................. 48
APPENDICES
Appendix A - Form of Promissory Note
Appendix B - Description of Project
Connecticut Development Authority
The Connecticut Light and Power Company
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LOAN AGREEMENT
THIS LOAN AGREEMENT, made and dated as of September 1, 1993 by and between the Connecticut Development Authority, a body corporate and politic constituting a public instrumentality and political subdivision of the State of Connecticut, and The Connecticut Light and Power Company, a corporation organized and existing under the laws of the State of Connecticut,
WITNESSETH THAT:
WHEREAS, the State Commerce Act, constituting Connecticut General Statutes, Sections 32-la through 32-23ss, as amended (the "Act"), declares that there is a continuing need in the State (1) for economic development and activity to provide and maintain employment and tax revenues and to control, abate and prevent pollution to protect the public health and safety and (2) for assistance to public service businesses providing transportation and utility services in the State, and that the availability of financial assistance and suitable facilities are important inducements to industrial and commercial enterprises to remain or locate in the State and to provide industrial, recreation, urban and public service projects; and
WHEREAS, the Act provides that (1) the term "project" as used therein means any facility, plant, works, system, building, structure, utility, fixture or other real property improvement located in the State, and the land on which it is located or which is reasonably necessary in connection therewith, which is of a nature or which is to be used or occupied by any person for purposes which would constitute it as an economic development project, recreation project, urban project, public service project or health care project, and any real property improvement reasonably related thereto, and (2) that a project may also include or consist exclusively of machinery, equipment or fixtures; and
WHEREAS, the Act defines economic development project to include "any project which is to be used or occupied by any person for . . . (2) controlling, abating, preventing or disposing of land, water, air or other environmental pollution . . . or (3) the conservation of energy or the utilization of cogeneration technology or solar, wind, hydro, biomass or other renewable sources to produce energy for any industrial or commercial application."
WHEREAS, the Act provides that the Authority shall have power (1) to determine the location and character of any project to be financed under the provisions of the Act; (2) to purchase, receive by gift or otherwise, lease, exchange, or otherwise acquire, and construct, reconstruct, improve, maintain, equip and furnish one or more projects, including all real and personal property which the Authority may deem necessary therewith, and to enter into a contract with a person therefor upon such terms and conditions as the Authority shall determine to be reasonable, including but not limited to reimbursement for the planning, designing, financing, construction, reconstruction, improvement, equipping, furnishing, operation and maintenance of reserve and insurance funds with respect to the financing of the project; (3) to extend credit or make loans to any person for the planning, designing, financing, acquiring, constructing, reconstructing, improving, equipping and furnishing of a project and for the refinancing of existing indebtedness with respect to any facility or part thereof which would qualify as a project in order to facilitate substantial improvements thereto, which credits or loans may be secured by loan agreements, mortgages, contracts and all other instruments or fees and charges, upon such terms and conditions as the Authority shall determine to be reasonable in connection with such loans, including provision for the establishment and maintenance of reserve and insurance funds and in the exercise of powers granted in the the Act in connection with a project for such person, to require the inclusion in any contract, loan agreement or other instrument, such provisions for the construction, use, operation and maintenance and financing of a project as the Authority may deem necessary or desirable; (4) to issue its bonds for such purposes, subject to the approval of the Treasurer of the State; and, (5) as security for the payment of the principal or redemption price, if any, of and interest on any such bonds, to pledge or assign such a loan, lease or sale agreement and the revenues and receipts derived by the Authority from such a project; and
WHEREAS, by resolutions adopted October 24, 1973; June 14, 1977; July 10, 1984 and March 12, 1985, the Authority has authorized the issuance of $11,650,000 principal amount of its Pollution Control Revenue Bonds (Millstone Point Project - 1973 Series) (of which $9,436,500 was for the benefit of The Connecticut Light and Power Company (the "Borrower") and The Hartford Electric Light Company, which merged with and into the Borrower in 1982); $16,000,000 principal amount of its Pollution Control Revenue Bonds (The Connecticut Light and Power Company and The Hartford Electric Light Company Projects - 1977 Series); $69,800,000 principal amount of its Pollution Control Revenue Par Value Demand Bonds (The Connecticut Light and Power Company Project - 1984 Series); $39,700,000 principal amount of its Pollution Control Revenue Par Value Demand Bonds (The Connecticut Light and Power Company Project - 1985 Series); and $60,700,000 principal amount of its Pollution Control Revenue Par Value Demand Bonds (The Connecticut Light and Power Company - 1985 Series B); and $53,500,000 principal amount of its Pollution Control Revenue Par Value Demand Bonds (The Connecticut Light and Power Company Project - 1985 Series C) (the "Prior Obligations") for the purposes of providing funds for the financing of construction of and additions to the pollution control facilities of the Borrower; and
WHEREAS, the Borrower currently owns certain individual interests in existing facilities within certain municipalities in the State and, by resolution adopted in furtherance of the purposes of the Act, the Authority has accepted the application of the Borrower for assistance in the financing of facilities for the control, abatement or prevention of environmental pollution deriving from the operation of certain nuclear and fossil fuel electric generating facilities (the "Project"); and
WHEREAS, the Authority has by a further resolution adopted September 8, 1993, authorized the issuance of $245,500,000 principal amount of its Pollution Control Revenue Refunding Bonds (The Connecticut Light and Power Company Project - 1993A Series) for the purposes of providing funds for the refunding of the Prior Obligations; and
WHEREAS, pursuant to such resolution the Bonds (as hereinafter defined) are to be secured by an Indenture of Trust of even date herewith, by and between the Authority and Shawmut Bank Connecticut, National Association, as Trustee; and
WHEREAS, in order to further secure the Bonds, the Borrower concurrently with the execution hereof has arranged the delivery to the Paying Agent of an irrevocable Letter of Credit, dated the date of delivery of the Bonds, issued by Deutsche Bank AG, New York Branch, for the account of the Borrower in favor of the Paying Agent as beneficiary on behalf of the owners of the Bonds; and
WHEREAS, the Borrower and Deutsche Bank AG, New York Branch, entered into a Letter of Credit and Reimbursement Agreement dated as of September 1, 1993 obligating the Borrower inter alia to repay all amounts drawn under the Letter of Credit together with interest, if any, thereon; and
WHEREAS, the Bonds shall be special obligations of the Authority, payable solely from the revenues or other receipts, funds or monies to be derived by the Authority under this Agreement or the Indenture and from any amounts otherwise available under the Indenture for the payment of the Bonds; and
WHEREAS, all federal and State agencies having jurisdiction in the premises have certified that the portion of the Project that constitutes pollution control Facilities, as designed, is in furtherance of the purpose of controlling, abating or preventing such pollution at the Project; and
WHEREAS, the Authority proposes with the proceeds of the Bonds to make a loan to the Borrower and the Borrower proposes to borrow such proceeds from the Authority for the purpose of refunding the Prior Obligations issued by the Authority to finance and refinance a portion of the cost of undertaking and completing the Project; and
WHEREAS, the Borrower acknowledges that the Authority is providing financing for the Project in furtherance of the Authority's corporate purposes under the Act, that the accomplishment of these purposes is dependent upon the compliance of the Borrower with its covenants contained in this Agreement, that the Authority has a resulting beneficial interest in the Project, and that the Borrower's use of and interest in the Project as provided hereby are in furtherance of the discharge of a public purpose; and
WHEREAS, the Connecticut Department of Public Utility Control has approved the issuance of the Note;
NOW, THEREFORE, in consideration of the premises and of the mutual representations, covenants and agreements herein set forth, the Authority and the Borrower, each binding itself, its successors and assigns, do mutually promise, covenant and agree as follows (provided that in the performance of the agreements of the Authority herein contained, any obligation it may incur for the payment of money shall not be an obligation, debt or liability of the State or any municipality thereof and neither the State nor any municipality thereof shall be liable on any obligation so incurred, but any such obligation shall be payable solely out of the revenues or other receipts, funds or monies to be derived by the Authority under this Agreement or the Indenture and from any amounts otherwise available under the Indenture for the payment of the Bonds):
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1. Definitions. For the purposes of this Agreement, the following words and terms shall have the respective meanings set forth as follows, and any capitalized word or term used but not defined herein is used as defined in the Indenture:
"Act" means the State Commerce Act, constituting Connecticut General Statutes, Sections 32-la through 32-23ss, as amended.
"Agreement" means this Loan Agreement and any amendments and supplements hereto.
"Authority" means the Connecticut Development Authority, a body corporate and politic constituting a public instrumentality and political subdivision of the State of Connecticut duly organized and existing under the laws of the State, and any body, board, authority, agency or other political subdivision or instrumentality of the State which shall hereafter succeed to the powers, duties and functions thereof.
"Authorized Representative" means, in the case of the Authority, the Chairman or Vice Chairman, the President, the Executive Vice President or any Senior Vice President or any Vice President thereof and, in the case of the Borrower, the Chairman, Vice Chairman, President, any Vice President, Chief Financial Officer, Treasurer, Assistant Treasurer, Secretary or Assistant Secretary thereof and, when used with reference to the performance of any act, the discharge of any duty or the execution of any certificate or other document, any officer, employee or other person authorized to perform such act, discharge such duty or execute such certificate or other document.
"Bank" means Deutsche Bank AG, New York Branch, in its capacity as issuer of the Letter of Credit and any other issuer of a Credit Facility.
"Beneficial Owner" shall have the meaning specified in Section 2.3(F) of the Indenture. If any person claims to the Trustee to be a Beneficial Owner, for purposes of Section 2.4(C) of the Indenture, such person shall prove such claim to the satisfaction of the Trustee with such documentation and signature guaranties as the Trustee may request.
"Bonds" means the $245,500,000 Pollution Control Revenue Refunding Bonds (The Connecticut Light and Power Company Project - 1993A Series) authorized and issued pursuant to Section 2.3 of the Indenture.
"Bond Counsel" means Whitman & Ransom or such other nationally recognized bond counsel selected by the Authority and reasonably satisfactory to the Borrower and the Trustee.
"Borrower" means (i) The Connecticut Light and Power Company, a corporation organized and existing under the laws of the State of Connecticut, and its successors and assigns and (ii) any surviving resulting or transferee corporation as provided in Section 6.1 hereof.
"Business Day" means any day (i) that is not a Saturday or Sunday,
(ii) that is a day on which banks located in Hartford, Connecticut and New
York, New York are not required or authorized to remain closed, (iii) that
is a day on which banking institutions in all of the cities in which the
principal offices of the Trustee and the Paying Agent and, if applicable,
the Remarketing Agent and the Bank are located and are not required or
authorized to remain closed and (iv) that is a day on which the New York
Stock Exchange, Inc. is not closed.
"Code" means the Internal Revenue Code of 1986, as amended and regulations promulgated thereunder.
"Conversion Date" means the date on which a new Mode becomes effective with respect to a Bond, and with respect to a Bond in the Multiannual Mode, the date on which a new Rate Period becomes effective.
"Credit Facility" means the Letter of Credit and any substitute irrevocable transferable letter of credit delivered to the Paying Agent pursuant to the Indenture and this Agreement and then in effect. More than one Credit Facility may be in effect from time to time.
"Debt Service Fund" means the special trust fund so designated, established pursuant to Section 5.1 of the Indenture.
"DTC" or "The Depository Trust Company" shall mean the limited-purpose trust company organized under the laws of the State of New York which shall act as securities depository for the Bonds, and any successor thereto.
"Determination of Taxability" means (1) a published revenue ruling by
the Internal Revenue Service and an opinion of Bond Counsel, unless the
Borrower timely requests the Authority to proceed in accordance with
Section 6.3(H) of this Agreement and proceedings pursuant to such section
are continuing, (2)(a)(i) a private ruling specifically applicable to the
Bonds or (ii) the receipt by any Bondowner of a notice of assessment and
demand for payment from the Internal Revenue Service and (b)(i) the
expiration of the appeal period provided therein if no appeal is taken or
(ii) if an appeal is taken, a final unappealable decision by a court of
competent jurisdiction; provided that in the case of an event described in
clause (2) that the Authority or the Bondowner, as the case may be, has
given the Borrower and the Trustee prompt written notice of any application
for such a private ruling or, as the case may be, any proposed assertion of
taxability by the Internal Revenue Service and, if the Borrower agrees to
pay all expenses in connection therewith, permits the Borrower to contest
such action, either directly or in the name of the registered owner,
through any level of appeal determined by the Borrower, or (3) the
admission in writing by the Borrower, in the case of clause (1), (2) and
(3) to the effect that the interest on the Bonds is includable in the gross
income for federal income tax purposes (other than for purposes of any
alternative minimum tax, environmental tax or foreign branch profits tax)
of an owner or former owner thereof, other than for a period during which
such owner or former owner is or was a "Substantial User" of the Project or
a "Related Person" as such terms are defined in the Code. For purposes of
this definition, the term owner or Bondowner means the Beneficial Owner of
the Bonds so long as the Book-Entry Only System (as defined in Section
23(F) of the Indenture) is in effect.
"Event of Default" means an Event of Default as defined in Section 7.1 hereof.
"Financing Documents" means this Agreement, the Tax Regulatory Agreement and the Note.
"Indenture" means the Indenture of Trust, of even date herewith, by and between the Authority and the Trustee, together with all indentures supplemental thereto made and entered into in accordance therewith.
"Interest Payment Date" shall mean each date on which interest is payable on the Bonds as provided in the forms of the Bonds.
"Letter of Credit" means the $249,133,000 irrevocable letter of credit dated the date of the initial delivery of the Bonds and issued by Deutsche Bank AG, New York Branch, for the benefit of the Paying Agent.
"Mortgage Indentures" means (i) that certain Indenture of Mortgage and Deed of Trust dated as of May 1, 1921, by and between the Borrower and Bankers Trust Company, as trustee, as amended and supplemented, (ii) that certain First Mortgage Indenture and Deed of Trust dated as of January 1, 1958, by and between The Hartford Electric Light Company (which merged with and into the Borrower as of June 30, 1982) and Old Colony Trust Company (which merged into First National Bank of Boston by merger effective January 4, 1971), as trustee, as amended and supplemented, and (iii) any other mortgage indenture which may hereafter be created so long as such mortgage indenture covers the property pledged under the indentures named in (i) and (ii) above or otherwise covers substantially all of the property of the Borrower.
"Moody's" means Moody's Investors Services, Inc., a corporation organized and existing under the laws of the State of Delaware, its successors and their assigns, and if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, "Moody's" shall be deemed to refer to any other nationally recognized securities rating agency designated by the Authority, at the direction of the Borrower, by notice to the Trustee and the Borrower.
"Net Proceeds" when used with respect to any insurance or condemnation award, means the gross proceeds from such award less all expenses (including attorney's fees and expenses and any extraordinary expenses) incurred in the collection thereof.
"1954 Code" means the Internal Revenue Code of 1954, as amended, as in effect on August 1, 1986.
"Note" means the promissory note of the Borrower to the Authority, dated the initial date of delivery of the Bonds in the form attached as an Appendix to this Agreement, and any amendments or supplements made in conformity with this Agreement and the Indenture.
"Outstanding", when used with reference to a Bond or Bonds, as of any particular date, means all Bonds which have been authenticated and delivered under the Indenture, except:
(1) any Bonds cancelled by the Trustee because of payment or redemption prior to maturity or surrendered to the Trustee for cancellation;
(2) any Bond (or portion of a Bond) paid or redeemed or for the payment or redemption of which there has been separately set aside and held in the Debt Service Fund either:
(a) monies in an amount sufficient to effect payment of the principal or applicable Redemption Price thereof, together with accrued interest on such Bond to the payment or redemption date, which payment or redemption date shall be specified in irrevocable instructions given to the Trustee to apply such monies to such payment on the date so specified; or
(b) obligations of the kind described in subsection 12.1(A) of the Indenture in such principal amounts, of such maturities, bearing such interest and otherwise having such terms and qualifications as shall be necessary to provide monies in an amount sufficient to effect payment of the principal or applicable Redemption Price of such Bond, together with accrued interest on such Bond to the payment or redemption date, which payment or redemption date shall be specified in irrevocable instructions given to the Trustee to apply such obligations to such payment on the date so specified; or
(c) any combination of (a) and (b) above;
(3) Bonds deemed tendered for purchase and not delivered to the Paying Agent on the Purchase Date, provided sufficient funds for payment of the Purchase Price are on deposit with the Paying Agent;
(4) Bonds in exchange for or in lieu of which other Bonds shall have been authenticated and delivered under Article III of the Indenture; and
(5) any Bond deemed to have been paid as provided in subsection 12.1 of the Indenture.
"Paying Agent" means any paying agent for the Bonds appointed pursuant to Section 9.10 of the Indenture (and may include the Trustee), and its successor or successors and any other corporation which may at any time be substituted in its place in accordance with the Indenture.
"Permitted Encumbrances" mean, as of any particular date, (i) the
lien of the Mortgage Indentures, (ii) liens and encumbrances permitted by
the Mortgage Indentures, (iii) liens for taxes not yet due and payable,
(iv) any lien created by this Agreement and the Indenture, (v) utility,
access and other easements and rights-of-way, that will not interfere with
or impair the value or use of the Project as herein provided, (vi) any
mechanic's, laborer's, materialman's, supplier's or vendor's lien or right
in respect thereof if payment is not yet due and payable and for which
statutory lien rights exist, and (vii) such minor defects, irregularities,
easements, and, rights-of-way (including agreements with any railroad the
purpose of which is to service the railroad siding) as normally exist with
respect to property similar in character to the Project and which do not
materially impair the value or use of the property affected thereby for the
purpose for which it was acquired hereunder.
"Plants" means, collectively, the nuclear or fossil fuel electric generating plants at which the various portions of the Project are located, including the Millstone 1, Millstone 2, and Millstone 3 nuclear electric generating plants in Waterford, Connecticut, the Devon fossil fuel electric generating plant in Milford, Connecticut, the Montville fossil fuel electric generating plant in Uncasville, Connecticut, the Norwalk Harbor fossil fuel electric generating plant in Norwalk, Connecticut, and the Middletown fossil fuel electric generating plant in Middletown, Connecticut, and as used in the singular form shall mean any one of them.
"Principal User" means any principal user of the Project within the meaning of Section 144(a)(2)(B) of the Code, or 103(b)(6)(B) of the 1954 Code, as applicable, including without limitation any person who is a greater-than-10-percent-owner (or if none, the person(s) who holds the largest ownership interest in the Project), lessee or user of more than 10% of the Project measured either by occupiable space or fair rental value under any formal or informal agreement or, under the particular facts and circumstances, anyone who is a principal customer of the Project. The term "principal customer" means any person, who purchases output of the Project under a contract if the percentage of output taken or to be taken by such person, multiplied by a fraction the numerator of which is the term of such contract and the denominator of which is the economic life of the Project, exceeds 10%. In the case of a person who purchases output of an electric or thermal energy, gas, water or other similar facility, such person is a principal customer if the total output purchased by such person during any one-year period beginning with the date the facility is placed in service is more than 10 percent of the facility's output during each such period. Co-owners or co-lessees who are shareholders in a corporation or who are collectively treated as a partnership subject to subchapter K under section 761(a) of the Code are not treated as Principal Users merely by reason of their ownership of corporate or partnership interests.
"Prior Obligations" means the Authority's $11,650,000 principal amount of Pollution Control Revenue Bonds (Millstone Point Project - 1973 Series) (of which $9,436,500 was for the benefit of The Connecticut Light and Power Company (the "Borrower") and The Hartford Electric Light Company, which merged with and into the Borrower in 1982); $16,000,000 principal amount of Pollution Control Revenue Bonds (The Connecticut Light and Power Company and The Hartford Electric Company Projects - 1977 Series); $69,800,000 principal amount of Pollution Control Revenue Par Value Demand Bonds (The Connecticut Light and Power Company Project - 1984 Series); $39,700,000 principal amount of Pollution Control Revenue Par Value Demand Bonds (The Connecticut Light and Power Company Project - 1985 Series); and $60,700,000 principal amount of its Pollution Control Revenue Par Value Demand Bond (The Connecticut Light and Power Company - 1985 Series B); and $53,500,000 principal amount Pollution Control Revenue Par Value Demand Bonds (The Connecticut Light and Power Company Project - 1985 Series C).
"Project" means the Borrower's interest in the realty and other interests in the real property, and in all personal property, goods, leasehold improvements, machinery, equipment, furnishings, furniture, fixtures, tools and attachments wherever located and whether now owned or hereafter acquired, acquired or financed in whole or in part with the proceeds of the Prior Obligations or the proceeds of tax-exempt securities refunded by the Prior Obligations, and any additions and accessions thereto, substitutions therefor and replacements, improvements, extensions and restorations thereof, described in Appendix B to this Agreement, as amended from time to time in accordance with this Agreement.
"Redemption Price" means, when used with respect to a Bond or a portion thereof, the principal amount of such Bond or portion thereof plus the applicable premium, if any, payable upon redemption thereof pursuant to the Indenture.
"Refunding Fund" means the special trust fund so designated, established pursuant to Section 5.1 of the Indenture.
"Reimbursement Agreement" means the Letter of Credit and Reimbursement Agreement dated as of September 1, 1993 among the Borrower, Deutsche Bank AG, New York Branch, as agent and issuing bank thereunder, and the participating banks referred to therein, and any other agreement between the Borrower and a Bank under which the Borrower is obligated to reimburse the Bank for payments made by the Bank under a Credit Facility.
"Related Person" means, with respect to any Principal User, a person
which is a related person (as defined in Section 144(a)(3) of the Code, or
Section 103(b)(6)(B) of the 1954 Code, as applicable, and by reference to
Sections 267, 707(b) and 1563(a) of the Code, except that 50% is to be
substituted for 80% in Section 1563(a)).
"Sharing Agreement" means the Sharing Agreement - 1979 Connecticut Nuclear Unit dated as of September 1, 1973, among the Borrower and the other participants from time to time in ownership of the Millstone 3 nuclear electric generating plant in Waterford, Connecticut, pertaining to the ownership, construction and operation of Millstone 3, as such agreement has been or may be amended from time to time.
"S&P" means Standard & Poor's Corporation, a corporation organized and existing under the laws of the State of New York, its successors and their assigns and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, "S&P" shall be deemed to refer to any other nationally recognized securities rating agency designated by the Trustee at the direction of the Borrower.
"State" means the State of Connecticut.
"Substantial User" means any substantial user of the Project within the meaning of Section 147(a) of the Code or Section 103(b)(13) of the 1954 Code, as applicable.
"Supplemental Indenture" means any indenture supplemental to the Indenture or amendatory of the Indenture, adopted by the Authority in accordance with Article X of the Indenture.
"Tax Incidence Date" means the date as of which interest on the Bonds becomes or became includable in the gross income of the recipient thereof (other than the Borrower or another Substantial User or Related Person) for federal income tax purposes for any cause, as determined by a Determination of Taxability.
"Tax Regulatory Agreement" means the Tax Regulatory Agreement, dated as of the date of initial issuance and delivery of the Bonds, among the Authority, the Borrower and the Trustee, and any amendments and supplements thereto.
"Term", when used with reference to this Agreement, means the term of this Agreement determined as provided in Article III hereof. "Trustee" means Shawmut Bank Connecticut, National Association, and its successor or successors hereafter appointed in the manner provided in the Indenture.
Section 1.2. Interpretation. In this Agreement:
(1) The terms "hereby", "hereof", "hereto", "herein", "hereunder" and any similar terms, as used in this Agreement, refer to this Agreement, and the term "hereafter" means after, and the term "heretofore" means before, the date of this Agreement.
(2) Words of the masculine gender mean and include correlative words of the feminine and neuter genders and words importing the singular number mean and include the plural number and vice versa.
(3) Words importing persons include firms, associations, partnerships (including limited partnerships), trusts, corporations and other legal entities, including public bodies, as well as natural persons.
(4) Any headings preceding the texts of the several Articles and Sections of this Agreement, and any table of contents appended to copies hereof, shall be solely for convenience of reference and shall not constitute a part of this Agreement, nor shall they affect its meaning, construction or effect.
(5) Nothing contained in this Agreement shall be construed to cause the Borrower to become the agent for the Authority or the Trustee for any purpose whatsoever, nor shall the Authority or the Trustee be responsible for any shortage, discrepancy, damage, loss or destruction of any part of the Project wherever located or for whatever cause.
(6) All approvals, consents and acceptances required to be given or made by any person or party hereunder shall be at the sole discretion of the party whose approval, consent or acceptance is required.
(7) All notices to be given hereunder shall be given in writing within a reasonable time unless otherwise specifically provided.
(8) This Agreement shall be governed by and construed in accordance with the applicable laws of the State.
(9) If any provision of this Agreement shall be ruled invalid by any court of competent jurisdiction, the invalidity of such provision shall not affect any of the remaining provisions hereof.
(10) From and after the date upon which there is no Credit Facility in effect, upon receipt by the Trustee of a certificate from the Bank stating that all amounts payable to the Bank under the Reimbursement Agreement have been paid in full, all references to the Bank, the Reimbursement Agreement or the Credit Facility in this Agreement, the Note, the Indenture, and the Bonds shall be ineffective.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations by the Authority. The Authority represents and warrants that:
(1) It is a body corporate and politic constituting a public instrumentality and political subdivision of the State, duly organized and existing under the laws of the State including the Act. The Authority is authorized to issue the Bonds in accordance with the Act and to use the proceeds thereof to refinance the Project.
(2) The Authority has complied with the provisions of the Act and has full power and authority pursuant to the Act to consummate all transactions contemplated by the Bonds, the Indenture and the Financing Documents.
(3) By resolution duly adopted by the Authority and still in full force and effect, the Authority has authorized the execution, delivery and due performance of the Bonds, the Indenture and the Financing Documents, and the taking of any and all action as may be required on the part of the Authority to carry out, give effect to and consummate the transactions contemplated by this Agreement and the Indenture, and all approvals necessary in connection with the foregoing have been received.
(4) The Bonds have been duly authorized, executed, authenticated, issued and delivered, constitute valid and binding special obligations of the Authority payable solely from revenues or other receipts, funds or monies pledged therefor under the Indenture and from any amounts otherwise available under the Indenture, and are entitled to the benefit of the Indenture. Neither the State nor any municipality thereof is obligated to pay the Bonds or the interest thereon. Neither the faith and credit nor the taxing power of the State nor any municipality thereof is pledged for the payment of the principal, and premium, if any, of and interest on the Bonds.
(5) The execution and delivery of the Bonds, the Indenture and the Financing Documents and compliance with the provisions thereof, will not conflict with or constitute on the part of the Authority a violation of, breach of or default under its by-laws or any statute, indenture, mortgage, deed of trust, note agreement or other agreement or instrument to which the Authority is a party or by which the Authority is bound, or, to the knowledge of the Authority, any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Authority or any of its activities or properties, and all consents, approvals, authorizations and orders of governmental or regulatory authorities which are required for the consummation by the Authority of the transactions contemplated thereby have been obtained.
(6) Subject to the provisions of this Agreement and the Indenture, the Authority will apply the proceeds of the Bonds to the purposes specified in the Indenture and the Financing Documents.
(7) There is no action, suit, proceeding or investigation at law or in equity before or by any court, public board or body pending or threatened against or affecting the Authority, or to the best knowledge of the Authority, any basis therefor, wherein an unfavorable decision, ruling or finding would adversely affect the transactions contemplated hereby or by the Indenture, or which, in any way, would adversely affect the validity of the Bonds, or the validity of or enforceability of the Indenture or the Financing Documents, or any agreement or instrument to which the Authority is a party and which is used or contemplated for use in consummation of the transactions contemplated hereby and by the Indenture.
(8) It has not made any commitment or taken any action which will result in a valid claim for any finders or similar fees or commitments in respect of the transactions contemplated by this Agreement.
(9) The representations of the Authority set forth in the Tax Regulatory Agreement are by this reference incorporated in this Agreement as though fully set forth herein.
Section 2.2 Limitation of Control by Borrower. Pursuant to the
Sharing Agreement, the Borrower is the owner of a 52.933% undivided
interest in the Millstone 3 nuclear electric generating plant in Waterford,
Connecticut, at which a portion of the Project is located. The Sharing
Agreement designates the Borrower as one of two lead participants and,
together with such other lead participant, the Borrower has sole
responsibility for operation and maintenance of Millstone 3, subject to the
provisions of the Sharing Agreement. Every obligation of the Borrower
hereunder with respect to that portion of the Project located at Millstone
3 (other than the continuing obligation of the Borrower to pay, at the
times and in the amounts set forth herein, its loan obligation pursuant to
this Agreement) is subject to and limited by the provisions of such Sharing
Agreement. The Borrower agrees, however, subject to the representations
set forth in this Section, to exercise all rights granted to it pursuant to
the Sharing Agreement and its rights as to matters otherwise within the
Borrower's control, and to take all reasonable actions in the prudent
exercise of business judgment, to cause the covenants of the Borrower
contained in this Agreement to be performed to the full extent of the
Borrower's ability during the Term of this Agreement.
Section 2.3. Representations by the Borrower. The Borrower represents and warrants that:
(1) The Borrower has been duly incorporated and validly exists as a corporation in good standing under the laws of the State of Connecticut, is not in violation of any provision of its certificate of incorporation or its by-laws, has corporate power to enter into and perform the Financing Documents, and by proper corporate action has duly authorized the execution and delivery of the Financing Documents.
(2) The Financing Documents constitute valid and legally binding obligations of the Borrower, enforceable in accordance with their respective terms, except to the extent that such enforceability may be limited by bankruptcy or insolvency or other laws affecting creditors' rights generally or by general principles of equity.
(3) Neither the execution and delivery of the Financing Documents, the consummation of the transactions contemplated thereby, nor the fulfillment by the Borrower of or compliance by the Borrower with the terms and conditions thereof is prevented or limited by or conflicts with or results in a breach of, or default under the terms, conditions or provisions of any contractual or other restriction of the Borrower, evidence of its indebtedness or agreement or instrument of whatever nature to which the Borrower is now a party or by which it is bound, or constitutes a default under any of the foregoing. No event has occurred and no condition exists which, upon the execution and delivery of any Financing Documents, constitutes an Event of Default hereunder or an event of default thereunder or, but for the lapse of time or the giving of notice, would constitute an Event of Default hereunder or an event of default thereunder.
(4) There is no action or proceeding pending or, to the knowledge of the Borrower, threatened against the Borrower before any court, administrative agency or arbitration board that will materially and adversely affect the ability of the Borrower to perform its obligations under the Financing Documents except as disclosed in the Borrower's Annual Report on Form 10-K for the fiscal year ended December 31, 1992, the Borrower's Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 1993 and June 30, 1993, and the Borrower's Current Reports on Form 8-K dated June 3, 1993, June 30, 1993 and September 10, 1993; and all authorizations, consents and approvals of governmental bodies or agencies required in connection with the execution and delivery of the Financing Documents and in connection with the performance of the Borrower's obligations hereunder or thereunder have been obtained.
(5) The execution, delivery and performance of the Financing Documents and any other instrument delivered by the Borrower pursuant to the terms hereof or thereof are within the corporate powers of the Borrower and have been duly authorized and approved by the board of directors of the Borrower and are not in contravention of law or of the Borrower's certificate of incorporation or by-laws, as amended to date, or of any undertaking or agreement to which the Borrower is a party or by which it is bound.
(6) The Borrower represents that it has not made any commitment or taken any action which will result in a valid claim for any finders' or similar fees or commitments in respect of the transactions described in this Agreement other than the fees to various parties to the transactions contemplated hereby which have been heretofore paid or provided.
(7) The Project is included within the definition of a "project" in the Act, and its estimated cost is equal to or in excess of $245,500,000. The Borrower intends the Project to be and continue to be an authorized project under the Act during the Term of this Agreement.
(8) All amounts shown in Schedule D of the Tax Regulatory Agreement are eligible costs of a project financed by bonds issued by the Authority under the Act, and may be financed by amounts in the Refunding Fund under the Indenture. None of the proceeds of the Bonds will be used directly or indirectly as working capital or to finance inventory.
(9) The Project is in compliance with all applicable federal, State and local laws and ordinances (including rules and regulations) relating to zoning, building, safety and environmental quality the non-compliance with which would materially adversely affect the performance by the Borrower of any of its obligations hereunder.
(10) The Borrower has obtained all necessary material approvals from any and all governmental agencies requisite to the Project, and has also obtained all material occupancy permits and authorizations from appropriate authorities authorizing the occupancy and use of the Project for the purposes contemplated hereby. The Borrower further represents and warrants that it has completed the Project in accordance with all material federal, State and local laws, ordinances and regulations applicable thereto.
(11) The availability of financial assistance from the Authority as provided herein and in the Indenture has induced the Borrower to locate the Project in the State. The Borrower does not presently intend to lease the project.
(12) The Borrower will not take or omit to take any action which action or omission will in any way cause the proceeds of the Bonds to be applied in a manner contrary to that provided in the Indenture and the Financing Documents as in force from time to time.
(13) The Borrower has not taken and will not take any action and
knows of no action that any other person, firm or corporation has taken or
intends to take, which would cause interest on the Bonds to be includable
in the gross income of the recipients thereof for federal income tax
purposes. The representations, certifications and statements of reasonable
expectation made by the Borrower in the Tax Regulatory Agreement and
relating to Project description, composite issues, bond maturity and
average asset economic life, use of Bond proceeds, arbitrage and related
matters are hereby incorporated by this reference as though fully set forth
herein.
(14) The Borrower has good and marketable or good and
merchantable title to the Project subject only to Permitted Encumbrances
and to irregularities or defects in title which may exist which do not
materially impair the use of such properties in the Borrower's business.
(15) The Borrower will use all of the proceeds of the Bonds to refund the Prior Obligations.
ARTICLE III
THE LOAN
Section 3.1. Loan Clauses. (A) Subject to the conditions and in accordance with the terms of this Agreement, the Authority agrees to make a loan to the Borrower from the proceeds of the Bonds in the amount of $245,500,000 and the Borrower agrees to borrow such amount from the Authority.
(B) The loan shall be made at the time of delivery of the Bonds and receipt of payment therefor by the Authority against receipt by the Authority of the Note duly executed and delivered to evidence the pecuniary indebtedness of the Borrower hereunder. As and for the loan the Authority shall apply the proceeds of the Bonds as provided in the Indenture on the terms and conditions therein prescribed.
(C) The Borrower shall make payments in immediately available
funds to the Trustee for deposit in the Debt Service Fund no later than
12:00 Noon on the date on which such payment of principal (including
principal called for redemption) of, premium, if any, or interest on Bonds
shall become due in an amount equal to the payment then coming due on such
Bonds less the amounts, if any, (i) then held in the Debt Service Fund and
available to pay the same, and (ii) amounts received by the Paying Agent to
pay the same from a draw under a Credit Facility. The Borrower may make
payments to the Debt Service Fund earlier than required by this section,
but such payments shall not affect the accrual of interest. In addition,
the Borrower shall pay to the Trustee, as and when the same shall become
due, all other amounts due under the Financing Documents, together with
interest thereon at the then applicable rate as set forth herein in Section
6.2(G). The Borrower shall have the option to prepay its loan obligation in
whole or in part at the times and in the manner provided in Article VIII
hereof.
(D) The payments to be made under Section 3.1(C) shall be appropriately adjusted to reflect the date of issue of Bonds, accrued interest deposited in the Debt Service Fund, if any, and any purchase or redemption of Bonds so that there will be available on each payment date the amount necessary to pay the interest and principal due or coming due on the Bonds and so that accrued interest will be applied to the installments of interest to which it is applicable.
(E) At any time when any principal of the Bonds is overdue, the Borrower shall also have a continuing obligation to pay to the Trustee for deposit in the Debt Service Fund an amount equal to interest on the overdue principal but the installment payments required under this section shall not otherwise bear interest. Redemption premiums shall not bear interest.
(F) The payment obligations of the Borrower in this Section 3.1 are subject in all respects to the provisions of Sections 3.7 and 3.8 hereof regarding the use of Priority Amounts and the effect of drawings under the Credit Facility.
(G) In the event the Borrower should fail to make any of the payments required under the foregoing provisions of this Section 3.1, the item or installment so in default shall continue as an obligation of the Borrower until the amount in default shall have been fully paid, and the Borrower agrees to pay or cause to be paid the same with interest thereon
at the rate determined in accordance with Article II of the Indenture until paid in accordance herewith and with the Indenture.
Section 3.2. Other Amounts Payable. (A) The Borrower hereby further expressly agrees to pay to the Trustee as and when the same shall become due, (i) an amount equal to the initial and annual fees of the Trustee for the ordinary services of the Trustee rendered and its ordinary expenses incurred under the Indenture, including fees and expenses as Paying Agent and the fees and expenses of Trustee's counsel, including fees and expenses as registrar and in connection with preparation and delivery of new Bonds upon exchanges or transfers, (ii) the reasonable fees and expenses of the Trustee and any Paying Agents on the Bonds for acting as paying agents as provided in the Indenture, including fees and expenses of the Paying Agent as registrar and in connection with the preparation of new Bonds upon exchanges, transfers or redemptions, (iii) the reasonable fees and expenses of the Bank and the Remarketing Agent for the performance of their duties as provided in the Indenture, including the reasonable fees of their counsel and other expenses the Remarketing Agent may incur in providing for accurate offering documents in connection therewith, (iv) the reasonable fees and charges of the Trustee for extraordinary services rendered by it and extraordinary expenses incurred by it under the Indenture, including reasonable counsel fees and expenses, and (v) fees and expenses of Bond Counsel and the Authority for any future action requested of either.
(B) The Borrower also agrees to pay all amounts payable by it under the Financing Documents at the time and in the manner therein provided.
Section 3.3. Manner of Payment. The payments provided for in
Section 3.1 hereof shall be made by any reasonable method providing
immediately available funds at the time and place of payment directly to
the Trustee for the account of the Authority and shall be deposited in the
Debt Service Fund. The additional payments provided for in Section 3.2
shall be made in the same manner directly to the entitled party or to the
Trustee for its own use or disbursement to the Paying Agents, as the case
may be.
Section 3.4. Obligation Unconditional. The obligations of the Borrower under the Financing Documents shall be absolute and unconditional, irrespective of any defense or any rights of setoff, recoupment or counterclaim it might otherwise have against the Authority or the Trustee. The Borrower will not suspend or discontinue any such payment or terminate this Agreement (other than in the manner provided for hereunder) for any cause, including, without limiting the generality of the foregoing, any acts or circumstances that may constitute failure of consideration, failure of title, or commercial frustration of purpose, or any damage to or destruction of the Project, or the taking by eminent domain of title to or the right of temporary use of all or any part of the Project, or any change in the tax or other laws of the United States, the State or any political subdivision of either thereof, or any failure of the Authority or the Trustee to perform and observe any agreement or covenant, whether expressed or implied, or any duty, liability or obligation arising out of or connected with the Financing Documents.
Section 3.5. Security Clauses. The Authority hereby notifies the Borrower and the Borrower acknowledges that, among other things, the Borrower's loan payments and all of the Authority's right, title and interest under the Financing Documents to which it is a party (except its rights under Section 6.2 hereof) are being concurrently with the execution and delivery hereof endorsed, pledged and assigned without recourse by the Authority to the Trustee as security for the Bonds as provided in the Indenture.
Section 3.6. Issuance of Bonds. The Authority has concurrently with the execution and delivery hereof sold and delivered the Bonds under and pursuant to a resolution adopted by the Authority on September 8, 1993, authorizing their issuance under and pursuant to the Indenture. The proceeds of sale of the Bonds shall be applied as provided in Articles IV and V of the Indenture.
Section 3.7. Use of Priority Amounts. The Borrower and the Authority acknowledge their intention to minimize the risk that any payment made to a Bondowner from amounts provided by or on behalf of the Borrower may be determined by a bankruptcy court to constitute a preference. To this end the parties agree that payments to Bondowners on Bonds supported by a Credit Facility shall be made only from Priority Amounts, except when and to the extent no Priority Amounts are available for the purpose as provided in Section 5.8(e) of the Indenture.
Section 3.8. Effect of Drawings Under Credit Facility. The payment of obligations of the Borrower under this Agreement and the Note with respect to the Bonds shall be completely satisfied to the extent of all drawings made under the Credit Facility for the purpose of satisfying such obligations.
Section 3.9. Effective Date and Term. (A) This Agreement shall become effective upon its execution and delivery by the parties hereto, shall remain in full force from such date and, subject to the provisions hereof (including particularly Articles VII and VIII), shall expire on such date as the Indenture shall be discharged and satisfied in accordance with the provisions of subsection 12.1(A) thereof. The Borrower's obligations under Sections 6.2 and 6.3 hereof, however, shall survive the expiration of this Agreement.
(B) Within 60 days of such expiration the Authority shall deliver to the Borrower any documents and take or cause the Trustee, at the Borrower's expense, to take any such reasonable actions as may be necessary to effect the cancellation, release and satisfaction of the Indenture and the Financing Documents.
Section 3.10. Borrower's Purchase of Bonds. Pursuant to Section 5.8(F) of the Indenture, if the amount drawn on the Credit Facility and deposited with the Paying Agent, together with all other amounts (including remarketing proceeds) received by the Paying Agent for the purchase of Bonds supported by a Credit Facility and tendered pursuant to Section 2.3(G)(1)(c) or 2.3(G)(2)(c) or (d) of the Indenture, is not sufficient to pay the Purchase Price of such Bonds on the Purchase Date, the Paying Agent shall before 3:30 P.M. on such Purchase Date, notify the Borrower, the Remarketing Agent and the Trustee of such deficiency by telephone promptly confirmed in writing. The Borrower shall pay to the Paying Agent in immediately available funds by 4:00 P.M. on the Purchase Date an amount equal to the Purchase Price of such Bonds less the amount, if any, available to pay the Purchase Price in accordance with Section 9.18 of the Indenture from the proceeds of the remarketing of such Bonds or from drawings on the Credit Facility, as reported by the Paying Agent. Bonds so purchased with moneys furnished by the Borrower shall be Borrower Bonds.
Section 3.11. Letter of Credit. The Borrower has arranged, concurrently with the original issuance and authentication of the Bonds, for the delivery to the Paying Agent of the Letter of Credit having a term expiring three years from the date of issuance, and providing for the Paying Agent to be entitled to draw on or prior to the Termination Date (as defined therein), an amount that is not less than the sum of the aggregate principal amount (or that portion of the purchase price corresponding to principal) of the Outstanding Bonds and the aggregate amount of interest accrued on such Bonds (or that portion of the purchase price corresponding to interest).
Section 3.12. Requirements for Delivery of a Substitute Credit
Facility. (A) The Borrower may, upon satisfaction of the requirements set
forth in this Section, at its option (except during the period between the
giving of notice of mandatory tender for purchase on account of the
expiration of the Credit Facility and the Purchase Date), provide for the
delivery to the Paying Agent of a substitute Credit Facility; provided,
however, that (1) the Credit Facility being replaced shall in no event be
terminated or released until the Borrower has given not less than
forty-five (45) days' written notice to the Authority, the Trustee, the
Paying Agent and the Remarketing Agent, and further the Paying Agent has
received the proceeds of all outstanding drawings on the Credit Facility
being replaced, (2) if any Bonds supported by the Credit Facility being
replaced are in the Weekly Mode, the Paying Agent has given not less than
(30) days' written notice of the termination or release of the Credit
Facility to owners of such Bonds in the Weekly Mode and (3) if any of the
Bonds supported by the Credit Facility being replaced are in the Flexible
Mode, such Credit Facility shall in no event be terminated or released
earlier than on the second Business Day after an Effective Date for all
such Bonds or such earlier day on or after such Effective Date on which the
full Purchase Price for such Bonds is received by the Paying Agent. Any
notice given pursuant to clause (1) or (2) above shall specify the
expiration date of the Credit Facility and the name of the entity providing
the substitute Credit Facility and shall advise that the Credit Facility
will terminate on the date stated in such notice.
(B) Each Credit Facility must:
(i) be an irrevocable, unconditional obligation of a financial institution;
(ii) be on terms no less favorable to the Paying Agent than the Letter of Credit and entitle the Paying Agent to draw upon or demand payment and receive in immediately available funds an amount equal to the sum of the principal amount of the Bonds supported by the Credit Facility, any premium applicable thereto, and (A) forty-five (45) days' accrued interest at the Maximum Interest Rate on the principal amount of Bonds then Outstanding in the Weekly Mode, or (B) thirty-eight (38) days' accrued interest at the Maximum Interest Rate on the principal amount of Bonds then Outstanding in the Flexible Mode; and (iii) provide for a term which may not expire in less than 360 days and which may not expire or be terminated prior to the fifth Business Day after the mandatory tender for purchase as provided in Section 2.3(G)(1)(c) or 2.3(G)(2)(d) of theIndenture. The Borrower shall not enter into any Reimbursement Agreement or agree to any amendment of a Reimbursement Agreement which in any way limits the obligation of the Bank to provide funds under the Credit Facility without the prior written consent of 100% of the principal amount of the Bonds Outstanding and entitled to the benefit thereof.
(C) No substitute Credit Facility may be delivered to the Trustee for any purpose under this Agreement or the Indenture unless accompanied by the following documents: (i) an opinion of counsel for the issuer of the substitute Credit Facility to the effect that it constitutes a legal, valid and binding obligation of the issuer enforceable in accordance with its terms; (ii) an opinion of Bond Counsel to the effect that the issuance of a substitute Credit Facility will not adversely affect the exclusion of interest on the Bonds from gross income for federal income tax purposes and that such Credit Facility is permitted under the Indenture; (iii) an opinion of counsel to the Borrower, satisfactory to the Trustee stating that the delivery of such substitute Credit Facility is authorized under this Agreement and complies with the terms hereof; (iv) a certificate of the Bank that all amounts due under the Reimbursement Agreement have been paid and that the Company has fulfilled all its obligations arising out of such Agreement; (v) an executed copy of the Reimbursement Agreement entered into with respect to the substitute Credit Facility; (vi) copies of any other documents, agreements or arrangements entered into directly or indirectly between the Borrower and the entity issuing the substitute Credit Facility with respect to the transactions contemplated by the substitute Credit Facility and related Reimbursement Agreement; and (vii) such other documents and opinions as the Trustee or the Authority may reasonably request. Notice of the substitution, replacement, termination or extension of a Credit Facility shall be sent by the Paying Agent to Moody's and S&P and shall include the new expiration date of the Credit Facility and the name of the entity providing the substitute Credit Facility.
The substitute Credit Facility, related Reimbursement Agreement and other documents, agreements and arrangements entered into and delivered with respect to the delivery of a substitute Credit Facility shall not include any provisions less favorable to the owners of the Bonds than the provisions of the Credit Facility and related Reimbursement Agreement, documents, agreements and arrangements, including provisions regarding the acceleration of the Bonds, any right of setoff of assets of the account party by the entity issuing the substitute Credit Facility, and any direct or indirect pledge of collateral which is not pledged on a priority or parity basis to the owners of the Bonds.
Section 3.13. Securities Laws. In any remarketing of Bonds under this Agreement, the Borrower shall at all times comply with applicable federal and state securities laws.
Section 3.14. New York Paying Agent. The Borrower agrees that if at any time it becomes necessary or desirable to have a Paying Agent capable of performing in New York, New York, it shall remove Shawmut Bank Connecticut, National Association as Paying Agent and a successor shall be appointed pursuant to Section 9.11 of the Indenture.
ARTICLE IV
THE PROJECT
Section 4.1. Completion of the Project. (A) The Borrower represents and warrants that the Project has been completed.
(B) The Borrower affirms that it shall bear all of the costs and expenses in connection with the preparation of the Financing Documents and the Indenture, the preparation and delivery of any legal instruments and documents necessary in connection therewith and their filing and recording, if required, and all taxes and charges payable in connection with any of the foregoing. Such costs and all other costs of the Project shall be paid by the Borrower or from the Refunding Fund in the manner and to the extent provided in the Indenture.
Section 4.2. No Warranty Regarding Condition, Suitability or Cost of Project. Neither the Authority, nor the Trustee, nor any Bondholder makes any warranty, either expressed or implied, as to the Project or its condition or that it will be suitable for the Borrower's purposes or needs, or that the insurance required hereunder will be adequate to protect the Borrower's business or interest, or that the proceeds of the Bonds will be sufficient to refund the Prior Obligations.
Section 4.3. Taxes. (A) The Borrower will pay when due all material
(1) taxes, assessments, water rates and sewer use or rental charges, (2)
payments in lieu thereof which may be required by law, and (3) governmental
charges and impositions of any kind whatsoever which may now or hereafter
be lawfully assessed or levied upon the Project or any part thereof, or
upon the rents, issues, or profits thereof, whether directly or indirectly.
With respect to special assessments or other governmental charges that may
lawfully be paid in installments over a period of years, the Borrower shall
be obligated to pay only such installments as are required to be paid
during the Term.
(B) The Borrower may, at its expense and in its own name, in good faith contest any such taxes, assessments and other charges and payments in lieu of taxes including assessments and, in the event of such contest, may permit the taxes, assessments or other charges or payments in lieu of taxes, including assessments so contested to remain unpaid, provided prior written notice thereof has been given to the Trustee and reserves to the extent required by the Reimbursement Agreement are maintained, during the period of such contest and any appeal therefrom. Nothing herein shall preclude the Borrower, at its expense and in its own name and behalf, from applying for any tax exemption allowed by the federal government, the State or any political or taxing subdivision thereof under any existing or future provision of law which grants or may grant such tax exemption.
Section 4.4. Insurance. (A) The Borrower shall insure the Project against loss or damage by fire, flood, lightning, windstorm, vandalism and malicious mischief and other hazards, casualties, contingencies and extended coverage risks in such amounts and in such manner as is required by applicable federal or state law and shall pay when due the premiums thereon.
(B) The Borrower further agrees that it will at all times carry public liability insurance with respect to the Project to the extent required by applicable federal or state law.
(C) As an alternative to the hazard insurance and public liability insurance requirements of subsections (A) or (B) above the Borrower may self-insure against hazard or public liability risks.
(D) The insurance coverage required by this Section may be effected under overall blanket or excess coverage policies of the Borrower or any affiliate and may be carried with any insurer other than an unauthorized insurer under the Connecticut Unauthorized Insurers Act. The Borrower shall furnish evidence satisfactory to the Authority or the Trustee, promptly upon the request of either, that the required insurance coverage is valid and in force.
Section 4.5. Compliance with Law. The Borrower will observe and comply with all material laws, regulations, ordinances, rules, and orders (including without limitation those relating to zoning, land use, environmental protection, air, water and land pollution, wetlands, health, equal opportunity, minimum wages, worker's compensation and employment practices) of any federal, state, municipal or other governmental authority relating to the Project except during any period during which the Borrower at its expense and in its name shall be in good faith contesting its obligation to comply therewith.
Section 4.6. Maintenance and Repair. At its own expense, the
Borrower will keep and maintain or cause the Project to be kept and
maintained in accordance with sound utility operating practice and in good
condition, working order and repair, will not commit or suffer any waste
thereon, and will make all material repairs and replacements thereto which
may be required in connection therewith. Nothing in this Section 4.6 shall
(1) apply to any portion of the Project beyond its useful or economic life
or (2) apply to the use and disposition by the Borrower of any part of the
Project in the ordinary course of its business.
ARTICLE V
CONDEMNATION
DAMAGE AND DESTRUCTION
Section 5.1. No Abatement of Payments Hereunder. If the Project shall be damaged or either partially or totally destroyed, or if title to or the temporary use of the whole or any part thereof shall be taken or condemned by a competent authority for any public use or purpose, there shall be no abatement or reduction in the amounts payable by the Borrower hereunder and the Borrower shall continue to be obligated to make such payments. In any such case the Borrower shall promptly give written notice thereof to the Authority and the Trustee.
Section 5.2. Project Disposition Upon Condemnation, Damage or Destruction. In the event of any such condemnation, damage or destruction the Borrower shall:
(1) Comply with the applicable provisions of the Mortgage Indentures and the Sharing Agreement concerning the repair, reconstruction or restoration of the Project or give notice to the Authority of its decision not to so comply; and/or
(2) If and as permitted by Section 8.1 hereof, exercise its option to prepay its loan obligation in full.
Section 5.3. Application of Net Proceeds of Insurance or Condemnation. The Net Proceeds from any insurance or condemnation award with respect to the Project shall be applied as provided in the Mortgage Indentures, or, in the event that the Mortgage Indentures have been discharged or are no longer in effect, shall be applied at the direction of the Borrower with the approval of the Authority.
ARTICLE VI
COVENANTS
Section 6.1. The Borrower to Maintain its Corporate Existence; Conditions under which Exceptions Permitted. (A) The Borrower covenants and agrees that, during the Term of this Agreement it will maintain its corporate existence, will continue to be a corporation either organized under the laws of or duly qualified to do business as a foreign corporation in the State and in all jurisdictions necessary in the operation of its business, will not dissolve or otherwise dispose of all or substantially all of its assets and will not consolidate with or merge into another corporation or permit one or more other corporations to consolidate with or merge into it.
(B) The Borrower may, however, without violating the agreements contained in this Section, consolidate with or merge into another corporation or permit one or more other corporations to consolidate with or merge into it, or sell or otherwise transfer to another corporation all or substantially all of its assets as an entity and thereafter liquidate or dissolve, if (a) the Borrower is the surviving, resulting or transferee corporation, as the case may be, or (b) in the event the Borrower is not the surviving, resulting or transferee corporation, as the case may be, such corporation (i) is a solvent corporation either organized under the laws of or duly qualified to do business as a foreign corporation subject to service of process in the State and (ii) assumes in writing all of the obligations of the Borrower herein, and under the Note.
Section 6.2. Indemnification, Payment of Expenses, and Advances. (A) The Borrower agrees to protect, defend and hold harmless the Trustee, the Paying Agent, the Authority, the State, agencies of the State and the members, servants, agents, officers, employees and directors of the Trustee, the Paying Agent, the Authority or the State (the "Indemnified Parties"), from any claim, demand, suit, action or other proceeding and any liabilities, costs, and expenses whatsoever by any person or entity whatsoever, arising or purportedly arising from or in connection with the Financing Documents, the Indenture, the Bonds, or the transactions contemplated thereby or actions taken thereunder by any person (including without limitation the filing of any information, form or statement with the Internal Revenue Service), except for any wilful and material misrepresentation, wilful misconduct or gross negligence on the part of the Indemnified Parties and except for any bad faith on the part of any Indemnified Party other than the Authority.
The Borrower agrees to indemnify and hold harmless any Indemnified Party against any and all claims, demands, suits, actions or other proceedings and all liabilities, costs and expenses whatsoever caused by any untrue statement or misleading statement or alleged untrue statement or alleged misleading statement of a material fact contained in the written information provided by the Borrower in connection with the issuance of the Bonds or incorporated by reference therein or caused by any omission or alleged omission from such information of any material fact required to be stated therein or necessary in order to make the statements made therein in the light of the circumstances under which they were made, not misleading.
(B) The Authority and the Trustee shall not be liable for any damage or injury to the persons or property of the Borrower or its members, directors, officers, agents, servants or employees, or any other person who may be about the Project due to any act or omission of any person other than the Authority or the Trustee or their respective members, directors, officers, agents, servants and employees.
(C) The Borrower releases each Indemnified Party from, agrees that no Indemnified Party shall be liable for, and agrees to hold each Indemnified Party harmless against, any attorney fees and expenses, expenses or damages incurred because of any investigation, review or lawsuit commenced by the Trustee or the Authority in good faith with respect to the Financing Documents, the Indenture, the Bonds and the Project Realty and the Project Equipment, and the Authority or the Trustee shall promptly give written notice to the Borrower with respect thereto.
(D) All covenants, stipulations, promises, agreements and obligations of the Authority and the Trustee contained herein shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the Authority and the Trustee and not of any member, director, officer or employee of the Authority or the Trustee in its individual capacity, and no recourse shall be had for the payment of the Bonds or for any claim based thereon or hereunder against any member, director, officer or employee of the Authority or the Trustee or any natural person executing the Bonds.
(E) In case any action shall be brought against one or more of the Indemnified Parties based upon any of the above and in respect of which indemnity may be sought against the Borrower, such Indemnified Party shall promptly notify the Borrower in writing, enclosing a copy of all papers served, but the omission so to notify the Borrower of any such action shall not relieve it of any liability which it may have to any Indemnified Party otherwise than under this Section 6.2. In case any such action shall be brought against any Indemnified Party and it shall notify the Borrower of the commencement thereof, the Borrower shall be entitled to participate in and, to the extent that it shall wish, to assume the defense thereof with counsel satisfactory to such Indemnified Party, and after notice from the Borrower to such Indemnified Party of the Borrower's election so to assume the defense thereof, the Borrower shall not be liable to such Indemnified Party for any subsequent legal or other expenses attributable to such defense, except as set forth below, other than reasonable costs of investigation subsequently incurred by such Indemnified Party in connection with the defense thereof. The Indemnified Party shall have the right to employ its own counsel in any such action, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless (i) the employment of counsel by such Indemnified Party has been authorized by the Borrower; (ii) the Indemnified Party shall have reasonably concluded that there may be a conflict of interest between the Borrower and the Indemnified Party in the conduct of the defense of such action (in which case the Borrower shall not have the right to direct the defense of such action on behalf of the Indemnified Party); or (iii) the Borrower shall not in fact have employed counsel reasonably satisfactory to the Indemnified Party to assume defense of such action; provided, however, that Borrower shall not be responsible for the fees and expenses of more than one such law firm unless an Indemnified Party shall have reasonably concluded that there may be a conflict of interest between such Indemnified Party and any other Indemnified Party requiring the use of separate counsel, or Borrower has not employed counsel which is satisfactory to each Indemnified Party. The Borrower shall not be liable for any settlement of any action or claim effected without its consent.
(F) The Borrower also agrees to pay all reasonable or necessary out-of-pocket expenses of the Authority in connection with the issuance of the Bonds, the administration of the Financing Documents and the enforcement of its rights thereunder.
(G) In the event the Borrower fails to pay any amount or perform any act under the Financing Documents, the Trustee or the Authority may pay the amount or perform the act, in which event the costs, disbursements, expenses and reasonable counsel fees and expenses thereof, together with interest thereon from the date the expense is paid or incurred at the prime interest rate generally prevailing among banks in the State on the date of the advance plus 1% shall be an additional obligation hereunder payable upon demand by the Authority or the Trustee.
(H) Any obligation of the Borrower to the Authority under this
Section shall be separate from and independent of the other obligations of
the Borrower hereunder, and may be enforced directly by the Authority
against the Borrower irrespective of any action taken by or on behalf of
the owners of the Bonds.
(I) The obligations of the Borrower under this section, notwithstanding any other provisions contained in the Financing Documents, shall survive the termination of this Agreement and shall be recourse to the Borrower, and for the enforcement thereof any Indemnified Party shall have recourse to the general credit of the Borrower.
Section 6.3. Incorporation of Tax Regulatory Agreement; Payments Upon Taxability. (A) For purpose of this Section, the term owner means the Beneficial Owner of the Bonds so long as the Book-Entry System is in effect.
(B) The representations, warranties, covenants and statements of expectation of the Borrower set forth in the Tax Regulatory Agreement are by this reference incorporated in this Agreement as though fully set forth herein.
(C) If any owner of the Bonds receives from the Internal Revenue Service a notice of assessment and demand for payment with respect to interest on any Bond (except a notice and demand based upon the assertion that the owner of the Bonds is a Substantial User or Related Person), an appeal may be taken by the owner of the Bonds at the option of the Borrower. Without limiting the generality of the foregoing, the Borrower shall have the right to direct the Trustee to direct the owner of the Bonds to take such appeal or not to take such appeal. In either case all expenses of the appeal including reasonable counsel fees and expenses shall be paid by the Borrower, and the owner of the Bonds and the Borrower shall cooperate and consult with each other in all matters pertaining to any such appeal, except that no owner of the Bonds shall be required to disclose or furnish any non-publicly disclosed information, including, without limitation, financial information and tax returns.
(D) Not later than 90 days following a Determination of Taxability, the Borrower shall pay to the Trustee an amount sufficient, when added to the amount then in the Debt Service Fund and available for such purpose, to retire and redeem all Bonds then Outstanding, in accordance with Section 2.4 of the Indenture.
(E) The obligation of the Borrower to make the payments provided for in this Section shall be absolute and unconditional, and the failure of the Authority or the Trustee to execute or deliver or cause to be executed or delivered any documents or to take any action required under this Agreement or otherwise shall not relieve the Borrower of its obligation under this Section. Notwithstanding any other provision of this Agreement or the Indenture, the Borrower's obligations under this Section shall survive the termination of this Agreement and the Indenture.
(F) The Borrower's payment obligations under this Section are further subject in all respects to the provisions of Section 3.7 and 3.8 hereof regarding the use of Priority Amounts and the effect of drawings under the Letter of Credit.
(G) The occurrence of a Determination of Taxability shall not be an Event of Default hereunder but shall require only the performance of the obligations of the Borrower stated in this Section, the breach of which shall constitute an Event of Default as provided in Section 7.1 hereof.
(H) At any time after the issuance of the Bonds, the Authority shall, upon (1) the release of a published Revenue Ruling by the Internal Revenue Service and the receipt by the Authority of an opinion of Bond Counsel to the effect that such ruling may adversely affect the exclusion of interest on the Bonds from gross income for federal income tax purposes, and (2) receipt from the Borrower, within 30 days after the Authority has mailed copies of such ruling and such opinion to the Borrower, of a written request to proceed in accordance with this Section, proceed to apply for and use its best efforts to obtain a ruling from the Internal Revenue Service, pursuant to Revenue Procedure 88-33 or any other procedures subsequently established by the Internal Revenue Service, as to the qualification or continued qualification of interest on the Bonds for exclusion from gross income for federal income tax purposes. The Authority and the Borrower shall cooperate and consult with each other in all matters pertaining to such ruling request. All expenses of the Authority in connection with such application including reasonable counsel fees shall be paid by the Borrower.
Section 6.4. Covenant as to Project Use. (A) The Borrower agrees that it shall promptly notify the Authority and the Trustee upon the occurrence of any of the following events, in each case, whether as a result of a determination by the Borrower, the Connecticut Department of Public Utility Control or the United States Nuclear Regulatory Commission or its successors,
(1) Abandonment of a substantial portion of the Project at any one time or in the aggregate;
(2) Any disposition of all or any part of the Borrower's ownership interest in the Project other than (i) to a company which is part of Northeast Utilities, (ii) in connection with a merger, consolidation, or sale of assets permitted by Section 6.1(B) hereof, (iii) in connection with any form of financing (including without limitation the grant of a mortgage or security interest or sale in connectin with a sale and lease back) by the Borrower, (iv) in any case in which the remaining aggregate ownership interest of Northeast Utilities is greater than 50 percent, (v) of any portion of the Project beyond its useful or economic life, or (vi) in the ordinary course of the Borrower's business. For purposes of this paragraph, "Northeast Utilities" means Northeast Utilities, its subsidiaries (whether direct or indirect) and their successors and assigns; or (3) Any determination, following damage or destruction of all or substantially all of the Project, not to repair, reconstruct, relocate or replace the Project.
(B) In the event that the Authority receives notice from the Borrower of the occurrence of any event described in subsection (A) of this Section 6.4, the Borrower agrees that the Authority may, not later than one year after the receipt of such notice from the Borrower, declare that payment of all amounts due under the Financing Documents shall be accelerated by notice to the Borrower and the Trustee stating that such amounts are due and payable by the Borrower in full on a date selected by the Borrower and set forth in a notice to the Trustee and the Authority, which date shall be not later than three years from the date of mailing of the Authority's acceleration notice to the Borrower.
(C) Any failure of the Borrower to comply with the provisions of this Section shall be subject to the provisions of Section 7.3 hereof.
Section 6.5. Further Assurances and Corrective Instruments. The Authority and the Borrower agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may reasonably be required for correcting any inadequate or incorrect description of the Project Realty or Project Equipment or for carrying out the intention of or facilitating the performance of this Agreement.
Section 6.6. Covenant by Borrower as to Compliance with Indenture. The Borrower covenants and agrees that it will comply with the provisions of the Indenture with respect to the Borrower and that the Trustee and the Bondholders shall have the power and authority provided in the Indenture. The Borrower further agrees to aid in the furnishing to the Authority or the Trustee of opinions that may be required under the Indenture. The Borrower covenants and agrees that the Trustee shall be entitled to and shall have all the rights, including the right to enforce against the Borrower the provisions of the Financing Documents, pertaining to the Trustee notwithstanding the fact that the Trustee is not a party to the Financing Documents.
Section 6.7. Assignment of Agreement or Note. (A) The Borrower may not assign its rights, interests or obligations hereunder or under the Note except as may be permitted pursuant to Section 6.1(B) hereof.
(B) The Authority agrees that it will not assign or transfer any of the Financing Documents or the revenues and other receipts, funds and monies to be received thereunder during the Term except to the Trustee as provided in this Agreement and the Indenture.
Section 6.8. Inspection. The Authority, the Trustee and their duly authorized agents shall have (1) the right at all reasonable times to enter upon and to examine and inspect the Project and (2) such rights of access thereto as may be reasonably necessary for the proper maintenance and repair thereof in the event of failure by the Borrower to perform its obligations under this Agreement, subject, in each case, to all applicable laws, rules, regulations, orders and guidelines. The Authority and the Trustee shall also be permitted, at all reasonable times, to examine the books and records of the Borrower with respect to the Project.
Section 6.9. Default Notification. Within seven (7) days after becoming aware of any condition or event which constitutes, or with the giving of notice or the passage of time would constitute, an Event of Default or an "Event of Default" under Section 8.1 of the Indenture, the Borrower shall deliver to the Authority, the Bank, if any, the Remarketing Agent, the Paying Agent and the Trustee a notice stating the existence and nature thereof and specifying the corrective steps, if any, the Borrower is taking with respect thereto.
Section 6.10. Covenant Against Discrimination. (A) The Borrower in the performance of this Agreement will not discriminate or permit discrimination against any person or group of persons on the grounds of race, color, religion, national origin, age, sex, sexual orientation, marital status, physical or learning disability, political beliefs, mental retardation or history of mental disorder in any manner prohibited by the laws of the United States or of the State.
(B) The Borrower will comply with the provisions of the resolution adopted by the Authority on June 14, 1977, as amended, and the policy of the Authority implemented pursuant thereto concerning the promotion of equal employment opportunity through affirmative action plans. The resolution requires that all borrowers receiving financial assistance from the Authority adopt and implement an affirmative action plan prior to the closing of the loan. The plan shall be updated annually as long as the Bonds remain Outstanding.
Section 6.11. Authority Costs and Expenses. The Authority agrees that it shall in all instances act in good faith in incurring costs, expenses and legal fees in connection with the transactions contemplated by this Agreement and the Indenture.
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.1. Events of Default. Any one or more of the following shall constitute an "Event of Default" hereunder:
(1) Any material representation or warranty made by the Borrower in the Financing Documents or any certificate, statement, data or information furnished in writing to the Authority or the Trustee by the Borrower in connection with the closing of the initial issue of the Bonds or included by the Borrower in its application to the Authority for assistance proves at any time to have been incorrect when made in any material respect.
(2) Failure by the Borrower to pay any amount that has become due and payable with respect to the Bonds or any other amount due and payable pursuant to the Financing Documents and the continuance of such failure for more than five Business Days.
(3) Failure by the Borrower to comply with the default notification provisions of Section 6.9 hereof.
(4) The occurrence of an "Event of Default" under Section 8.1(A) of the Indenture (other than an occurrence under Section 8.1(A)(2)(a)).
(5) Failure by the Borrower to observe or perform any covenant, condition or agreement hereunder or under the Financing Documents (except those referred to above) and (a) continuance of such failure for a period of sixty days after receipt by the Borrower of written notice specifying the nature of such failure or
(b) if by reason of the nature of such failure the same cannot be remedied within the sixty day period, the Borrower fails to proceed with reasonable diligence after receipt of the notice to cure the failure.
(6) The Borrower shall
(a) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian or the like of itself or of its property, (b) admit in writing its inability to pay its debts generally as they become due, (c) make a general assignment for the benefit of creditors, (d) be adjudicated a bankrupt or insolvent, or (e) commence a voluntary case under the Federal bankruptcy laws of the United States of America or file a voluntary petition or answer seeking reorganization, an arrangement with creditors or an order for relief or seeking to take advantage of any insolvency law or file an answer admitting the material allegations of a petition filed against it in any bankruptcy, reorganization or insolvency proceeding; or corporate action shall be taken by it for the purpose of effecting any of the foregoing; or if without the application, approval or consent of the
Borrower, a proceeding shall be instituted in any court of competent jurisdiction, seeking in respect of the Borrower an adjudication in bankruptcy, reorganization, dissolution, winding up, liquidation, a composition or arrangement with creditors, a readjustment of debts, the appointment of a trustee, receiver, liquidator or custodian or the like of the Borrower or of all or any substantial part of its assets, or other like relief in respect thereof under any bankruptcy or insolvency law, and, if such proceeding is being contested by the Borrower in good faith, the same shall continue undismissed, or pending and unstayed, for any period of 90 consecutive days.
Section 7.2. Remedies on Default. (A) Whenever any Event of Default shall have occurred, the Trustee, or the Authority where so provided herein, may take any one or more of the following actions:
(1) The Trustee, as and to the extent provided in Article VIII of the Indenture, may cause all amounts payable under the Financing, Documents to be immediately due and payable without notice or demand of any kind, whereupon the same shall become immediately due and payable.
(2) The Authority, without the consent of the Trustee or any Bondholder, may proceed to enforce the obligations of the Borrower to the Authority under this Agreement.
(3) The Trustee may take whatever action at law or in equity it may have to collect the amounts then due and thereafter to become due, or to enforce the performance or observance of the obligations, agreements, and covenants of the Borrower under theFinancing Documents.
(B) In the event that any Event of Default or any proceeding taken by the Authority (or by the Trustee on behalf of the Authority) thereon shall be waived or determined adversely to the Authority, then the Event of Default shall be annulled and the Authority and the Borrower shall be restored to their former rights hereunder, but no such waiver or determination shall extend to any subsequent or other default or impair any right consequent thereon.
Section 7.3 Remedies Upon Project Use Default. (A) If the Borrower shall fail to notify the Authority of the occurrence of any event set forth in Section 6.4(A) hereof within 60 days of the determination thereof as provided in Section 6.4(A), the Authority may, not later than one year after obtaining knowledge of such determination and so long as such failure is continuing, send a notice to the Trustee and the Borrower calling for the acceleration of all of the Borrower's obligations under the Financing Documents and for the redemption of all of the Bonds Outstanding.
Any such notice (i) shall set forth in reasonable detail the event giving rise to the Borrower's obligation under Section 6.4(A), (ii) shall be accompanied by such evidence thereof as shall be acceptable to the Trustee, and (iii) shall specify the dates upon which (a) notice of redemption of the Bonds is to be given by the Trustee (which shall not be less than 180 days from the date of the notice being given to the Trustee by the Authority) and (b) the date redemption of Bonds is to occur (which shall be a date at least thirty days after notice of redemption is to be given by the Trustee).
(B) If, after receipt of notice from the Authority as
provided in Section 6.4(B), the Borrower shall fail to select a date for
redemption of all Outstanding Bonds, the Authority may, not earlier than 60
days prior to the date which is three years after the date notice was
mailed to the Borrower as provided in Section 6.4(B), send a notice to the
Trustee and the Borrower calling for the redemption of all of the Bonds
then Outstanding. Any such notice shall specify the date that notice of
redemption is to be given by the Trustee and the date that such redemption
is to occur.
(C) On or before the redemption date specified by the
Trustee in its notice of redemption pursuant to this Section, the Borrower
shall pay, as a final loan payment hereunder, a sum sufficient, together
with other funds on deposit with the Trustee and available for such
purpose, to redeem all Bonds then Outstanding under the Indenture at 100%
of the principal amount thereof plus accrued interest to the redemption
date. The Borrower shall also pay or provide for all reasonable and
necessary fees of the Trustee and any Paying Agent accrued and to accrue
through the date of redemption of the Bonds and all other amounts due or to
become due under the Financing Documents.
Section 7.4. No Duty to Mitigate Damages. Unless otherwise required by law, neither the Authority, the Trustee nor any Bondholder shall be obligated to do any act whatsoever or exercise any diligence whatsoever to mitigate the damages to the Borrower if an Event of Default shall occur.
Section 7.5. Remedies Cumulative. No remedy herein conferred upon or reserved to the Authority or the Trustee is intended to be exclusive of any other available remedy or remedies but each and every such remedy shall be cumulative and shall be in addition to every remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. Delay or omission to exercise any right or power accruing upon any default or failure by the Authority or the Trustee to insist upon the strict performance of any of the covenants and agreements herein set forth or to exercise any rights or remedies upon default by the Borrower hereunder shall not impair any such right or power or be considered or taken as a waiver or relinquishment for the future of the right to insist upon and to enforce, by injunction or other appropriate legal or equitable remedy, strict compliance by the Borrower with all of the covenants and conditions hereof, or of the right to exercise any such rights or remedies, if such default by the Borrower be continued or repeated.
ARTICLE VIII
PREPAYMENT PROVISIONS
Section 8.1. Optional Prepayment. (A) The Borrower shall have, and
is hereby granted, the option to prepay its loan obligation and to cause
the corresponding optional redemption of the Bonds pursuant to Section
2.4(A) of the Indenture at such times, in such amounts, and with such
premium, if any, for such optional redemption as set forth in the forms of
the Bonds, by delivering a written notice to the Trustee in accordance with
Section 8.2 hereof, with a copy to the Authority, setting forth the amount
to be prepaid, the amount of Bonds requested to be redeemed with the
proceeds of such prepayment, and the date on which such Bonds are to be
redeemed. Such prepayment must be sufficient to provide monies for the
payment of interest and Redemption Price in accordance with the terms of
the Bonds requested to be redeemed with such prepayment and all other
amounts then due under the Financing Documents. In the event of any
complete prepayment of its loan obligation, the Borrower shall, at the time
of such prepayment, also pay or provide for the payment of all reasonable
or necessary fees and expenses of the Authority, the Trustee and the Paying
Agent accrued and to accrue through the final payment of all the Bonds.
Any such prepayments shall be applied to the redemption of Bonds in the
manner provided in Section 2.4(A) of the Indenture, and credited against
payments due hereunder in the same manner.
(B) The Borrower shall have, and is hereby granted, the option to prepay its loan obligation in full at any time without premium if any of the following events shall have occurred, as evidenced in each case by the filing with the Trustee of a certificate of an Authorized Representative of the Borrower to the effect that one of such events has occurred and is continuing, and describing the same:
(1) Damage or destruction to any of the Plants or the Project
to such extent that in the opinion of the Borrower (expressed in a
resolution adopted by the Board of Directors of the Borrower (a "Board
Resolution")) and of an architect or engineer acceptable to the Borrower
(who may be an employee of the Borrower), both filed with the Authority and
the Trustee, (1) any of the Plants or the Project, as the case may be,
cannot be reasonably repaired, rebuilt, or restored within a period of six
(6) months to their condition immediately preceding such damage or
destruction, or (2) normal operations are thereby prevented from being
carried on at any of the Plants for a period of not less than six (6)
months.
(2) Loss of title to or use of a substantial part of any of the Plants or the Project as a result of the exercise of the power of eminent domain which, in the opinion of the Borrower (expressed in a Board Resolution) and of an architect or engineer acceptable to the Borrower (who may be an employee of the Borrower), both filed with the Authority and the Trustee, prevents or is likely to prevent normal operations from being carried on at any of the Plants for a period of not less than six (6) months.
(3) A substantial part of any of the Plants or the Project shall become obsolete in the opinion of the Borrower (expressed in a Board Resolution).
(4) A change in the Constitution of the State of Connecticut or of the United States of America or legislative or executive action (whether local, state, or federal) or a final decree, judgment or order of any court or administrative body (whether local, state, or federal) that causes this Agreement to become void or unenforceable or impossible of performance in accordance with the intent and purpose of the parties as expressed herein or, imposes unreasonable burdens or excessive liabilities upon the Borrower with respect to any of the Plants or the Project or the operation thereof.
(5) The operation of any of the Plants or the Project shall have been enjoined or shall otherwise have been prohibited by any order, decree, rule or regulation of any court or of any local, state, or federal regulatory body, administrative agency or other governmental body for a period of not less than six (6) months.
(6) Changes which the Borrower cannot reasonably control in the economic availability of fuel, materials, supplies, labor, equipment, or other properties or things necessary for the efficient operation of any of the Plants or the Project shall have occurred which, in the judgment of the Borrower (expressed in a Board Resolution), render the continued operation of any of the Plants uneconomical. In any such case the final loan payment shall be a sum sufficient, together with other funds deposited with Trustee and available for such purpose, to redeem all Bonds then outstanding under the Indenture at the redemption price of 100% of the principal amount thereof plus accrued interest to the redemption date or dates and all other amounts then due under the Financing Documents, and the Borrower shall also pay or provide for all reasonable or necessary fees and expenses of the Trustee and Paying Agent and the Remarketing Agent accrued and to accrue through final payment for the Bonds. The Borrower shall deliver a written notice to the Trustee, with a copy to the Authority, requesting the redemption of the Bonds under the Indenture, which notice shall have attached thereto the applicable certificate of the Authorized Representative of the Borrower. The Borrower's right to so request the redemption of the Bonds upon the occurrence of any single event listed in this Section 8.1(B) shall expire six (6) months, and any such redemption shall occur within nine (9) months, after such event occurs.
Section 8.2. Notice by the Borrower of Optional Prepayment. The
Borrower shall exercise its option to prepay its loan obligation pursuant
to Section 8.1(A) or (B) by giving written notice signed by an Authorized
Representative of the Borrower to the Trustee, the Authority, the Paying
Agent, and the Remarketing Agent at least five (5) days before the
prepayment date if Bonds to be redeemed with the amounts to prepaid
pursuant to the Indenture are then in the Flexible Mode, and forty-five
(45) days before the prepayment date if Bonds to be redeemed with the
amounts so prepaid pursuant to the Indenture are then in any other Mode.
Section 8.3. Mandatory Prepayment on Taxability. The Borrower shall pay or cause the prepayment of its loan obligation following a Determination of Taxability in the manner provided in Section 6.3 of this Agreement.
Section 8.4. Mandatory Prepayment Upon Occurrence of Certain Events. The Borrower shall pay or cause the prepayment of its loan obligation, prior to the maturity of the Bonds, on a date selected by the Borrower, which date shall be not later than three years after the date of mailing to the Borrower of notice from the Authority of the Authority's election to accelerate the Borrower's loan obligation hereunder as provided in Sections 6.4 and 7.3 hereof.
ARTICLE IX
GENERAL
Section 9.1. Indenture. (A) Monies received from the sale of the Bonds and all loan payments made by the Borrower and all other monies received by the Authority or the Trustee under the Financing Documents shall be applied solely and exclusively in the manner and for the purposes expressed and specified in the Indenture and in the Bonds and as provided in this Agreement.
(B) The Borrower shall have and may exercise all the rights, powers and authority given the Borrower in the Indenture and in the Bonds, and the Indenture and the Bonds shall not be modified, altered or amended in any manner which adversely affects such rights, powers and authority or otherwise adversely affects the Borrower without the prior written consent of the Borrower.
Section 9.2. Benefit of and Enforcement by Bondholders. The Authority and the Borrower agree that this Agreement is executed in part to induce the purchase by others of the Bonds and for the further securing of the Bonds, and accordingly that all covenants and agreements on the part of the Authority and the Borrower as to the amounts payable with respect to the Bonds hereunder are hereby declared to be for the benefit of the holders from time to time of the Bonds and may be enforced as provided in the Indenture on behalf of the Bondholders by the Trustee.
Section 9.3. Force Majeure. In case by reason of force majeure either party hereto shall be rendered unable wholly or in part to carry out its obligations under this Agreement, then except as otherwise expressly provided in this Agreement, if such party shall give notice and full particulars of such force majeure in writing to the other party within a reasonable time after occurrence of the event or cause relied on, the obligations of the party giving such notice, other than the obligation of the Borrower to make the payments required under the terms hereof or of the Note, so far as they are affected by such force majeure, shall be suspended during the continuance of the inability then claimed which shall include a reasonable time for the removal of the effect thereof, but for no longer period, and such parties shall endeavor to remove or overcome such inability with all reasonable dispatch. The term "force majeure", as employed herein, means acts of God, strikes, lockouts or other industrial disturbances, acts of the public enemy, orders of any kind of the Government of the United States, of the State or any civil or military authority, insurrections, riots, epidemics, landslides, lightning, earthquakes, volcanoes, fires, hurricanes, tornadoes, storms, floods, washouts, droughts, arrests, restraining of government and people, civil disturbances, explosions, partial or entire failure of utilities, shortages of labor, material, supplies or transportation, or any other similar or different cause not reasonably within the control of the party claiming such inability. It is understood and agreed that the settlement of existing or impending strikes, lockouts or other industrial disturbances shall be entirely within the discretion of the party having the difficulty and that the above requirements that any force majeure shall be reasonably beyond the control of the party and shall be remedied with all reasonable dispatch shall be deemed to be fulfilled even though such existing or impending strikes, lockouts and other industrial disturbances may not be settled and could have been settled by acceding to the demands of the opposing person or persons.
Section 9.4. Amendments. This Agreement may be amended only with the concurring written consent of the Trustee and, if required by the Indenture, of the owners of the Bonds given in accordance with the provisions of the Indenture.
Section 9.5. Notices. All notices, certificates or other communications hereunder shall be sufficiently given and shall be deemed given when delivered or when mailed by registered or certified mail, postage prepaid, addressed as follows: if to the Authority, at 845 Brook Street, Rocky Hill, Connecticut 06067, Attention: Program Manager - Loan Administration; if to the Borrower, c/o Northeast Utilities Service Company at 107 Selden Street, Berlin, Connecticut 06037, Attention: Assistant Treasurer; if to the Remarketing Agent, Morgan Stanley & Co., Inc., 1221 Avenue of the Americas, New York, New York 10020, Attention: Short Term Sales and Trading - Tax Exempt Securities Department; if to the Paying Agent, Shawmut Bank Connecticut, National Association, 777 Main Street, Hartford, Connecticut 06115, Attention: Corporate Trust Department; and if to the Trustee, Shawmut Bank Connecticut, National Association, 777 Main Street, Hartford, Connecticut 06115, Attention: Corporate Trust Department. A duplicate copy of each notice, certificate or other communication given hereunder by either the Authority or the Borrower to the other shall also be given to the Trustee. The Authority, the Borrower, the Remarketing Agent, the Paying Agent and the Trustee may, by notice given hereunder, designate any further or different addresses to which subsequent notices, certificates or other communications shall be sent.
Section 9.6. Prior Agreements Superseded. This Agreement, together with all agreements executed by the parties concurrently herewith or in conjunction with the sale of the Bonds, shall completely and fully supersede all other prior understandings or agreements, both written and oral, between the Authority and the Borrower relating to the lending of money and the Project, including those contained in any commitment letter executed in anticipation of the issuance of the Bonds.
Section 9.7. Execution of Counterparts. This Agreement may be executed simultaneously in several counterparts each of which shall be an original and all of which shall constitute but one and the same instrument.
Section 9.8. Time. All references to times of day in this Agreement are references to New York City time.
IN WITNESS WHEREOF, the Authority has caused this Agreement to be executed in its corporate name by a duly Authorized Representative, and the Borrower has caused this Agreement to be executed in its corporate name by its duly authorized officer all as of the date first above written.
Connecticut Development Authority
By/s/ Stanley R. Killinger Name: Stanley R. Killinger Authorized Representative |
The Connecticut Light and Power Company
By /s/ Bruce F. Garelick Name: Bruce F. Garelick Title: Assistant Treasurer |
APPENDIX B
Description of Project Equipment and Project Realty
Exhibit 4.2.22
Connecticut Development Authority
and
The Connecticut Light and Power Company
LOAN AGREEMENT
Dated as of September 1, 1993
Connecticut Development Authority
$70,000,000 Pollution Control Revenue Refunding Bonds
(The Connecticut Light and Power Company Project - 1993B Series)
TABLE OF CONTENTS
Page
PREAMBLE .............................................. 1
ARTICLE I DEFINITIONS AND INTERPRETATION
Section 1.1. Definitions.......................... 5
Section 1.2. Interpretation....................... 12
ARTICLE II REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations by the Authority..... 14
Section 2.2. Limitation of Control by Borrower.... 15
Section 2.3. Representations by the Borrower...... 16
ARTICLE III THE LOAN
Section 3.1. Loan Clauses......................... 19
Section 3.2. Other Amounts Payable................ 20
Section 3.3. Manner of Payment.................... 21
Section 3.4. Obligation Unconditional............. 21
Section 3.5. Security Clauses..................... 21
Section 3.6. Issuance of Bonds.................... 21
Section 3.7. Use of Priority Amounts.............. 21
Section 3.8. Effect of Drawing Under Letter
of Credit............................ 22
Section 3.9. Effective Date and Term.............. 22
Section 3.10. Borrower's Purchase of Bonds......... 22
Section 3.11. Letter of Credit..................... 23
Section 3.12. Requirements for Delivery of a
Substitute Credit Facility........... 23
Section 3.13. Securities Laws...................... 25
Section 3.14. New York Paying Agent................ 25
ARTICLE IV THE PROJECT
Section 4.1. Completion of the Project............ 26
Section 4.2. No Warranty Regarding Condition,
Suitability or Cost of Project....... 26
Section 4.3. Taxes................................ 26
Section 4.4. Insurance............................ 27
Section 4.5. Compliance with Law.................. 27
Section 4.6. Maintenance and Repair............... 27
ARTICLE V CONDEMNATION DAMAGE AND DESTRUCTION
Section 5.1. No Abatement of Payments Hereunder... 29
Section 5.2. Project Disposition Upon Condemnation,
Damage or Destruction................ 29
Section 5.3. Application of Net Proceeds of
Insurance or Condemnation............ 29
ARTICLE VI COVENANTS
Section 6.1. The Borrower to Maintain its
Corporate Existence; Conditions under
which Exceptions Permitted........... 30
Section 6.2. Indemnification, Payment of Expenses,
and Advances......................... 30
Section 6.3. Incorporation of Tax Regulatory
Agreement; Payments Upon Taxability.. 33
Section 6.4. Covenant as to Project Use........... 34
Section 6.5. Further Assurances and Corrective
Instruments.......................... 36
Section 6.6. Covenant by Borrower as to Compliance
with Indenture....................... 36
Section 6.7. Assignment of Agreement or Note...... 36
Section 6.8. Inspection........................... 36
Section 6.9. Default Notification................. 36
Section 6.10. Covenant Against Discrimination...... 37
Section 6.11. Authority Costs and Expenses......... 37
ARTICLE VII EVENTS OF DEFAULT AND REMEDIES
Section 7.1. Events of Default.................... 38
Section 7.2. Remedies on Default.................. 72
Section 7.3. Remedies Upon Project Use Default.... 40
Section 7.4. No Duty to Mitigate Damages.......... 40
Section 7.5. Remedies Cumulative.................. 41
ARTICLE VIII PREPAYMENT PROVISIONS
Section 8.1. Optional Prepayment.................. 42
Section 8.2. Notice by the Borrower of Optional
Prepayment........................... 44
Section 8.3. Mandatory Prepayment on Taxability... 44
Section 8.4. Mandatory Prepayment Upon Occurrence
of Certain Events.................... 44
ARTICLE IX GENERAL
Section 9.1. Indenture............................ 45
Section 9.2. Benefit of and Enforcement by
Bondholders.......................... 45
Section 9.3. Force Majeure........................ 45
Section 9.4. Amendments........................... 46
Section 9.5. Notices.............................. 46
Section 9.6. Prior Agreements Superseded.......... 46
Section 9.7. Execution of Counterparts............ 47
Section 9.8. Time................................. 47
APPENDICES
Appendix A - Form of Promissory Note
Appendix B - Description of Project
Connecticut Development Authority
The Connecticut Light and Power Company
|
LOAN AGREEMENT
THIS LOAN AGREEMENT, made and dated as of September 1, 1993 by and
between the Connecticut Development Authority, a body corporate and politic
constituting a public instrumentality and political subdivision of the
State of Connecticut, and The Connecticut Light and Power Company, a
corporation organized and existing under the laws of the State of
Connecticut,
WITNESSETH THAT:
WHEREAS, the State Commerce Act, constituting Connecticut General Statutes, Sections 32-la through 32-23ss, as amended (the "Act"), declares that there is a continuing need in the State (1) for economic development and activity to provide and maintain employment and tax revenues and to control, abate and prevent pollution to protect the public health and safety and (2) for assistance to public service businesses providing transportation and utility services in the State, and that the availability of financial assistance and suitable facilities are important inducements to industrial and commercial enterprises to remain or locate in the State and to provide industrial, recreation, urban and public service projects; and
WHEREAS, the Act provides that (1) the term "project" as used therein means any facility, plant, works, system, building, structure, utility, fixture or other real property improvement located in the State, and the land on which it is located or which is reasonably necessary in connection therewith, which is of a nature or which is to be used or occupied by any person for purposes which would constitute it as an economic development project, recreation project, urban project, public service project or health care project, and any real property improvement reasonably related thereto, and (2) that a project may also include or consist exclusively of machinery, equipment or fixtures; and
WHEREAS, the Act defines economic development project to include "any project which is to be used or occupied by any person for . . . (2) controlling, abating, preventing or disposing of land, water, air or other environmental pollution . . . or (3) the conservation of energy or the utilization of cogeneration technology or solar, wind, hydro, biomass or other renewable sources to produce energy for any industrial or commercial application."
WHEREAS, the Act provides that the Authority shall have power (1) to determine the location and character of any project to be financed under the provisions of the Act; (2) to purchase, receive by gift or otherwise, lease, exchange, or otherwise acquire, and construct, reconstruct, improve, maintain, equip and furnish one or more projects, including all real and personal property which the Authority may deem necessary therewith, and to enter into a contract with a person therefor upon such terms and conditions as the Authority shall determine to be reasonable, including but not limited to reimbursement for the planning, designing, financing, construction, reconstruction, improvement, equipping, furnishing, operation and maintenance of reserve and insurance funds with respect to the financing of the project; (3) to extend credit or make loans to any person for the planning, designing, financing, acquiring, constructing, reconstructing, improving, equipping and furnishing of a project and for the refinancing of existing indebtedness with respect to any facility or part thereof which would qualify as a project in order to facilitate substantial improvements thereto, which credits or loans may be secured by loan agreements, mortgages, contracts and all other instruments or fees and charges, upon such terms and conditions as the Authority shall determine to be reasonable in connection with such loans, including provision for the establishment and maintenance of reserve and insurance funds and in the exercise of powers granted in the the Act in connection with a project for such person, to require the inclusion in any contract, loan agreement or other instrument, such provisions for the construction, use, operation and maintenance and financing of a project as the Authority may deem necessary or desirable; (4) to issue its bonds for such purposes, subject to the approval of the Treasurer of the State; and, (5) as security for the payment of the principal or redemption price, if any, of and interest on any such bonds, to pledge or assign such a loan, lease or sale agreement and the revenues and receipts derived by the Authority from such a project; and
WHEREAS, by resolutions adopted December 9, 1986 and December 8, 1987, the Authority has authorized the issuance of $30,000,000 principal amount of its Pollution Control Revenue Par Value Demand Bonds (The Connecticut Light and Power Company Project - 1986 Series A) and $40,000,000 principal amount of its Pollution Control Revenue Par Value Demand Bonds (The Connecticut Light and Power Company Project - 1987 Series A) (the "Prior Obligations") for the purposes of providing funds for the financing of construction of and additions to the pollution control facilities of the Borrower; and
WHEREAS, the Borrower currently owns certain individual interests in existing facilities within certain municipalities in the State and, by resolution adopted in furtherance of the purposes of the Act, the Authority has accepted the application of the Borrower for assistance in the financing of facilities for the control, abatement or prevention of environmental pollution deriving from the operation of certain nuclear electric generating facilities (the "Project"); and
WHEREAS, the Authority has by a further resolution adopted September 8, 1993, authorized the issuance of $70,000,000 principal amount of its Pollution Control Revenue Refunding Bonds (The Connecticut Light and Power Company Project - 1993B Series) for the purposes of providing funds for the refunding of the Prior Obligations; and
WHEREAS, pursuant to such resolution the Bonds (as hereinafter defined) are to be secured by an Indenture of Trust of even date herewith, by and between the Authority and Shawmut Bank Connecticut, National Association, as Trustee; and
WHEREAS, in order to further secure the Bonds, the Borrower concurrently with the execution hereof has arranged the delivery to the Paying Agent of an irrevocable Letter of Credit, dated the date of delivery of the Bonds, issued by Union Bank of Switzerland, New York Branch, for the account of the Borrower in favor of the Paying Agent as beneficiary on behalf of the owners of the Bonds; and
WHEREAS, the Borrower and Union Bank of Switzerland, New York Branch, entered into a Letter of Credit and Reimbursement Agreement dated as of September 1, 1993 obligating the Borrower inter alia to repay all amounts drawn under the Letter of Credit together with interest, if any, thereon; and
WHEREAS, the Bonds shall be special obligations of the Authority, payable solely from the revenues or other receipts, funds or monies to be derived by the Authority under this Agreement or the Indenture and from any amounts otherwise available under the Indenture for the payment of the Bonds; and
WHEREAS, all federal and State agencies having jurisdiction in the premises have certified that the portion of the Project that constitutes pollution control Facilities, as designed, is in furtherance of the purpose of controlling, abating or preventing such pollution at the Project; and
WHEREAS, the Authority proposes with the proceeds of the Bonds to make a loan to the Borrower and the Borrower proposes to borrow such proceeds from the Authority for the purpose of refunding the Prior Obligations issued by the Authority to finance and refinance a portion of the cost of undertaking and completing the Project; and
WHEREAS, the Borrower acknowledges that the Authority is providing financing for the Project in furtherance of the Authority's corporate purposes under the Act, that the accomplishment of these purposes is dependent upon the compliance of the Borrower with its covenants contained in this Agreement, that the Authority has a resulting beneficial interest in the Project, and that the Borrower's use of and interest in the Project as provided hereby are in furtherance of the discharge of a public purpose; and
WHEREAS, the Connecticut Department of Public Utility Control has approved the issuance of the Note;
NOW, THEREFORE, in consideration of the premises and of the mutual representations, covenants and agreements herein set forth, the Authority and the Borrower, each binding itself, its successors and assigns, do mutually promise, covenant and agree as follows (provided that in the performance of the agreements of the Authority herein contained, any obligation it may incur for the payment of money shall not be an obligation, debt or liability of the State or any municipality thereof and neither the State nor any municipality thereof shall be liable on any obligation so incurred, but any such obligation shall be payable solely out of the revenues or other receipts, funds or monies to be derived by the Authority under this Agreement or the Indenture and from any amounts otherwise available under the Indenture for the payment of the Bonds):
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1. Definitions. For the purposes of this Agreement, the following words and terms shall have the respective meanings set forth as follows, and any capitalized word or term used but not defined herein is used as defined in the Indenture:
"Act" means the State Commerce Act, constituting Connecticut General Statutes, Sections 32-la through 32-23ss, as amended.
"Agreement" means this Loan Agreement and any amendments and supplements hereto.
"Authority" means the Connecticut Development Authority, a body corporate and politic constituting a public instrumentality and political subdivision of the State of Connecticut duly organized and existing under the laws of the State, and any body, board, authority, agency or other political subdivision or instrumentality of the State which shall hereafter succeed to the powers, duties and functions thereof.
"Authorized Representative" means, in the case of the Authority, the Chairman or Vice Chairman, the President, the Executive Vice President or any Senior Vice President or any Vice President thereof and, in the case of the Borrower, the Chairman, Vice Chairman, President, any Vice President, Chief Financial Officer, Treasurer, Assistant Treasurer, Secretary or Assistant Secretary thereof and, when used with reference to the performance of any act, the discharge of any duty or the execution of any certificate or other document, any officer, employee or other person authorized to perform such act, discharge such duty or execute such certificate or other document.
"Bank" means Union Bank of Switzerland, New York Branch, in its capacity as issuer of the Letter of Credit and any other issuer of a Credit Facility.
"Beneficial Owner" shall have the meaning specified in Section 2.3(F) of the Indenture. If any person claims to the Trustee to be a Beneficial Owner, for purposes of Section 2.4(C) of the Indenture, such person shall prove such claim to the satisfaction of the Trustee with such documentation and signature guaranties as the Trustee may request.
"Bonds" means the $70,000,000 Pollution Control Revenue Refunding Bonds (The Connecticut Light and Power Company Project - 1993B Series) authorized and issued pursuant to Section 2.3 of the Indenture.
"Bond Counsel" means Whitman & Ransom or such other nationally recognized bond counsel selected by the Authority and reasonably satisfactory to the Borrower and the Trustee.
"Borrower" means (i) The Connecticut Light and Power Company, a corporation organized and existing under the laws of the State of Connecticut, and its successors and assigns and (ii) any surviving resulting or transferee corporation as provided in Section 6.1 hereof.
"Business Day" means any day (i) that is not a Saturday or Sunday, (ii) that is a day on which banks located in Hartford, Connecticut and New York, New York are not required or authorized to remain closed, (iii) that is a day on which banking institutions in all of the cities in which the principal offices of the Trustee and the Paying Agent and, if applicable, the Remarketing Agent and the Bank are located and are not required or authorized to remain closed and (iv) that is a day on which the New York Stock Exchange, Inc. is not closed.
"Code" means the Internal Revenue Code of 1986, as amended and regulations promulgated thereunder.
"Conversion Date" means the date on which a new Mode becomes effective with respect to a Bond, and with respect to a Bond in the Multiannual Mode, the date on which a new Rate Period becomes effective.
"Credit Facility" means the Letter of Credit and any substitute irrevocable transferable letter of credit delivered to the Paying Agent pursuant to the Indenture and this Agreement and then in effect. More than one Credit Facility may be in effect from time to time.
"Debt Service Fund" means the special trust fund so designated, established pursuant to Section 5.1 of the Indenture.
"DTC" or "The Depository Trust Company" shall mean the limited-purpose trust company organized under the laws of the State of New York which shall act as securities depository for the Bonds, and any successor thereto.
"Determination of Taxability" means (1) a published revenue ruling by
the Internal Revenue Service and an opinion of Bond Counsel, unless the
Borrower timely requests the Authority to proceed in accordance with
Section 6.3(H) of this Agreement and proceedings pursuant to such section
are continuing, (2)(a)(i) a private ruling specifically applicable to the
Bonds or (ii) the receipt by any Bondowner of a notice of assessment and
demand for payment from the Internal Revenue Service and (b)(i) the
expiration of the appeal period provided therein if no appeal is taken or
(ii) if an appeal is taken, a final unappealable decision by a court of
competent jurisdiction; provided that in the case of an event described in
clause (2) that the Authority or the Bondowner, as the case may be, has
given the Borrower and the Trustee prompt written notice of any application
for such a private ruling or, as the case may be, any proposed assertion of
taxability by the Internal Revenue Service and, if the Borrower agrees to
pay all expenses in connection therewith, permits the Borrower to contest
such action, either directly or in the name of the registered owner,
through any level of appeal determined by the Borrower, or (3) the
admission in writing by the Borrower, in the case of clause (1), (2) and
(3) to the effect that the interest on the Bonds is includable in the gross
income for federal income tax purposes (other than for purposes of any
alternative minimum tax, environmental tax or foreign branch profits tax)
of an owner or former owner thereof, other than for a period during which
such owner or former owner is or was a "Substantial User" of the Project or
a "Related Person" as such terms are defined in the Code. For purposes of
this definition, the term owner or Bondowner means the Beneficial Owner of
the Bonds so long as the Book-Entry Only System (as defined in Section
23(F) of the Indenture is in effect.
"Event of Default" means an Event of Default as defined in Section 7.1 hereof.
"Financing Documents" means this Agreement, the Tax Regulatory Agreement and the Note.
"Indenture" means the Indenture of Trust, of even date herewith, by and between the Authority and the Trustee, together with all indentures supplemental thereto made and entered into in accordance therewith.
"Interest Payment Date" shall mean each date on which interest is payable on the Bonds as provided in the forms of the Bonds.
"Letter of Credit" means the $71,036,000 irrevocable letter of credit dated the date of the initial delivery of the Bonds and issued by Union Bank of Switzerland, New York Branch, for the benefit of the Paying Agent.
"Mortgage Indentures" means (i) that certain Indenture of Mortgage and Deed of Trust dated as of May 1, 1921, by and between the Borrower and Bankers Trust Company, as trustee, as amended and supplemented, (ii) that certain First Mortgage Indenture and Deed of Trust dated as of January 1, 1958, by and between The Hartford Electric Light Company (which merged with and into the Borrower as of June 30, 1982) and Old Colony Trust Company (which merged into First National Bank of Boston by merger effective January 4, 1971), as trustee, as amended and supplemented, and (iii) any other mortgage indenture which may hereafter be created so long as such mortgage indenture covers the property pledged under the indentures named in (i) and (ii) above or otherwise covers substantially all of the property of the Borrower.
"Moody's" means Moody's Investors Services, Inc., a corporation organized and existing under the laws of the State of Delaware, its successors and their assigns, and if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, "Moody's" shall be deemed to refer to any other nationally recognized securities rating agency designated by the Authority, at the direction of the Borrower, by notice to the Trustee and the Borrower.
"Net Proceeds" when used with respect to any insurance or condemnation
award, means the gross proceeds from such award less all expenses
(including attorney's fees and expenses and any extraordinary expenses)
incurred in the collection thereof.
"1954 Code" means the Internal Revenue Code of 1954, as amended, as in effect on August 1, 1986.
"Note" means the promissory note of the Borrower to the Authority, dated the date of initial delivery of the Bonds in the form attached as an Appendix to this Agreement, and any amendments or supplements made in conformity with this Agreement and the Indenture.
"Outstanding", when used with reference to a Bond or Bonds, as of any particular date, means all Bonds which have been authenticated and delivered under the Indenture, except:
(1) any Bonds cancelled by the Trustee because of payment or redemption prior to maturity or surrendered to the Trustee for cancellation;
(2) any Bond (or portion of a Bond) paid or redeemed or for the payment or redemption of which there has been separately set aside and held in the Debt Service Fund either:
(a) monies in an amount sufficient to effect payment of the principal or applicable Redemption Price thereof, together with accrued interest on such Bond to the payment or redemption date, which payment or redemption date shall be specified in irrevocable instructions given to the Trustee to apply such monies to such payment on the date so specified; or
(b) obligations of the kind described in subsection 12.1(A)
of the Indenture in such principal amounts, of such maturities, bearing such interest and otherwise having such terms and qualifications as shall be necessary to provide monies in an amount sufficient to effect payment of the principal or applicable Redemption Price of such Bond, together with accrued interest on such Bond to the payment or redemption date, which
payment or redemption date shall be specified in irrevocable instructions given to the Trustee to apply such obligations to such payment on the date so specified; or
(c) any combination of (a) and (b) above;
(3) Bonds deemed tendered for purchase and not delivered to the Paying Agent on the Purchase Date, provided sufficient funds for payment of the Purchase Price are on deposit with the Paying Agent;
(4) Bonds in exchange for or in lieu of which other Bonds shall have been authenticated and delivered under Article III of the Indenture; and
(5) any Bond deemed to have been paid as provided in subsection 12.1 of the Indenture.
"Paying Agent" means any paying agent for the Bonds appointed pursuant to Section 9.10 of the Indenture (and may include the Trustee), and its successor or successors and any other corporation which may at any time be substituted in its place in accordance with the Indenture.
"Permitted Encumbrances" mean, as of any particular date, (i) the lien of the Mortgage Indentures, (ii) liens and encumbrances permitted by the Mortgage Indentures, (iii) liens for taxes not yet due and payable, (iv) any lien created by this Agreement and the Indenture, (v) utility, access and other easements and rights-of-way, that will not interfere with or impair the value or use of the Project as herein provided, (vi) any mechanic's, laborer's, materialman's, supplier's or vendor's lien or right in respect thereof if payment is not yet due and payable and for which statutory lien rights exist, and (vii) such minor defects, irregularities, easements, and, rights-of-way (including agreements with any railroad the purpose of which is to service the railroad siding) as normally exist with respect to property similar in character to the Project and which do not materially impair the value or use of the property affected thereby for the purpose for which it was acquired hereunder.
"Plants" means, collectively, the nuclear electric generating plants at which the various portions of the Project are located, including the Millstone 1, Millstone 2, and Millstone 3 plants in Waterford, Connecticut, and as used in the singular form shall mean any one of them.
"Principal User" means any principal user of the Project within the meaning of Section 144(a)(2)(B) of the Code, or 103(b)(6)(B) of the 1954 Code, as applicable, including without limitation any person who is a greater-than-10-percent-owner (or if none, the person(s) who holds the largest ownership interest in the Project), lessee or user of more than 10% of the Project measured either by occupiable space or fair rental value under any formal or informal agreement or, under the particular facts and circumstances, anyone who is a principal customer of the Project. The term "principal customer" means any person, who purchases output of the Project under a contract if the percentage of output taken or to be taken by such person, multiplied by a fraction the numerator of which is the term of such contract and the denominator of which is the economic life of the Project, exceeds 10%. In the case of a person who purchases output of an electric or thermal energy, gas, water or other similar facility, such person is a principal customer if the total output purchased by such person during any one-year period beginning with the date the facility is placed in service is more than 10 percent of the facility's output during each such period. Co-owners or co-lessees who are shareholders in a corporation or who are collectively treated as a partnership subject to subchapter K under section 761(a) of the Code are not treated as Principal Users merely by reason of their ownership of corporate or partnership interests.
"Prior Obligations" means the Authority's $30,000,000 principal amount of Pollution Control Revenue Par Value Demand Bonds (The Connecticut Light and Power Company Project - 1986 Series A) and $40,000,000 principal amount of Pollution Control Revenue Par Value Demand Bonds (The Connecticut Light and Power Company Project - 1987 Series A).
"Project" means the Borrower's interest in the realty and other interests in the real property, and in all personal property, goods, leasehold improvements, machinery, equipment, furnishings, furniture, fixtures, tools and attachments wherever located and whether now owned or hereafter acquired, acquired or financed in whole or in part with the proceeds of the Prior Obligations or the proceeds of tax-exempt securities refunded by the Prior Obligations, and any additions and accessions thereto, substitutions therefor and replacements, improvements, extensions and restorations thereof, described in Appendix B to this Agreement, as amended from time to time in accordance with this Agreement.
"Redemption Price" means, when used with respect to a Bond or a portion thereof, the principal amount of such Bond or portion thereof plus the applicable premium, if any, payable upon redemption thereof pursuant to the Indenture.
"Refunding Fund" means the special trust fund so designated, established pursuant to Section 5.1 of the Indenture.
"Reimbursement Agreement" means the Letter of Credit and Reimbursement Agreement dated as of September 1, 1993 among the Borrower, Union Bank of Switzerland, New York Branch, as agent and issuing bank thereunder, and the participating banks referred to therein, and any other agreement between the Borrower and a Bank under which the Borrower is obligated to reimburse the Bank for payments made by the Bank under a Credit Facility.
"Related Person" means, with respect to any Principal User, a person
which is a related person (as defined in Section 144(a)(3) of the Code, or
Section 103(b)(6)(B) of the 1954 Code, as applicable, and by reference to
Sections 267, 707(b) and 1563(a) of the Code, except that 50% is to be
substituted for 80% in Section 1563(a)).
"Sharing Agreement" means the Sharing Agreement - 1979 Connecticut Nuclear Unit dated as of September 1, 1973, among the Borrower and the other participants from time to time in ownership of the Millstone 3 nuclear electric generating plant in Waterford, Connecticut, pertaining to the ownership, construction and operation of Millstone 3, as such agreement has been or may be amended from time to time.
"S&P" means Standard & Poor's Corporation, a corporation organized and existing under the laws of the State of New York, its successors and their assigns and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, "S&P" shall be deemed to refer to any other nationally recognized securities rating agency designated by the Trustee at the direction of the Borrower.
"State" means the State of Connecticut.
"Substantial User" means any substantial user of the Project within the meaning of Section 147(a) of the Code or Section 103(b)(13) of the 1954 Code, as applicable.
"Supplemental Indenture" means any indenture supplemental to the Indenture or amendatory of the Indenture, adopted by the Authority in accordance with Article X of the Indenture.
"Tax Incidence Date" means the date as of which interest on the Bonds becomes or became includable in the gross income of the recipient thereof (other than the Borrower or another Substantial User or Related Person) for federal income tax purposes for any cause, as determined by a Determination of Taxability.
"Tax Regulatory Agreement" means the Tax Regulatory Agreement, dated as of the date of initial issuance and delivery of the Bonds, among the Authority, the Borrower and the Trustee, and any amendments and supplements thereto.
"Term", when used with reference to this Agreement, means the term of this Agreement determined as provided in Article III hereof.
"Trustee" means Shawmut Bank Connecticut, National Association, and
its successor or successors hereafter appointed in the manner provided in
the
Indenture.
Section 1.2. Interpretation. In this Agreement:
(1) The terms "hereby", "hereof", "hereto", "herein", "hereunder" and any similar terms, as used in this Agreement, refer to this Agreement, and the term "hereafter" means after, and the term "heretofore" means before, the date of this Agreement.
(2) Words of the masculine gender mean and include correlative words of the feminine and neuter genders and words importing the singular number mean and include the plural number and vice versa.
(3) Words importing persons include firms, associations, partnerships (including limited partnerships), trusts, corporations and other legal entities, including public bodies, as well as natural persons.
(4) Any headings preceding the texts of the several Articles and Sections of this Agreement, and any table of contents appended to copies hereof, shall be solely for convenience of reference and shall not constitute a part of this Agreement, nor shall they affect its meaning, construction or effect.
(5) Nothing contained in this Agreement shall be construed to cause the Borrower to become the agent for the Authority or the Trustee for any purpose whatsoever, nor shall the Authority or the Trustee be responsible for any shortage, discrepancy, damage, loss or destruction of any part of the Project wherever located or for whatever cause.
(6) All approvals, consents and acceptances required to be given or made by any person or party hereunder shall be at the sole discretion of the party whose approval, consent or acceptance is required.
(7) All notices to be given hereunder shall be given in writing within a reasonable time unless otherwise specifically provided.
(8) This Agreement shall be governed by and construed in accordance with the applicable laws of the State.
(9) If any provision of this Agreement shall be ruled invalid by any court of competent jurisdiction, the invalidity of such provision shall not affect any of the remaining provisions hereof.
(10) From and after the date upon which there is no Credit Facility in effect, upon receipt by the Trustee of a certificate from the Bank stating that all amounts payable to the Bank under the Reimbursement Agreement have been paid in full, all references to the Bank, the Reimbursement Agreement or the Credit Facility in this Agreement, the Note, the Indenture, and the Bonds shall be ineffective.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations by the Authority. The Authority represents and warrants that:
(1) It is a body corporate and politic constituting a public instrumentality and political subdivision of the State, duly organized and existing under the laws of the State including the Act. The Authority is authorized to issue the Bonds in accordance with the Act and to use the proceeds thereof to refinance the Project.
(2) The Authority has complied with the provisions of the Act and has full power and authority pursuant to the Act to consummate all transactions contemplated by the Bonds, the Indenture and the Financing Documents.
(3) By resolution duly adopted by the Authority and still in full force and effect, the Authority has authorized the execution, delivery and due performance of the Bonds, the Indenture and the Financing Documents, and the taking of any and all action as may be required on the part of the Authority to carry out, give effect to and consummate the transactions contemplated by this Agreement and the Indenture, and all approvals necessary in connection with the foregoing have been received.
(4) The Bonds have been duly authorized, executed, authenticated, issued and delivered, constitute valid and binding special obligations of the Authority payable solely from revenues or other receipts, funds or monies pledged therefor under the Indenture and from any amounts otherwise available under the Indenture, and are entitled to the benefit of the Indenture. Neither the State nor any municipality thereof is obligated to pay the Bonds or the interest thereon. Neither the faith and credit nor the taxing power of the State nor any municipality thereof is pledged for the payment of the principal, and premium, if any, of and interest on the Bonds.
(5) The execution and delivery of the Bonds, the Indenture and the Financing Documents and compliance with the provisions thereof, will not conflict with or constitute on the part of the Authority a violation of, breach of or default under its by-laws or any statute, indenture, mortgage, deed of trust, note agreement or other agreement or instrument to which the Authority is a party or by which the Authority is bound, or, to the knowledge of the Authority, any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Authority or any of its activities or properties, and all consents, approvals, authorizations and orders of governmental or regulatory authorities which are required for the consummation by the Authority of the transactions contemplated thereby have been obtained.
(6) Subject to the provisions of this Agreement and the Indenture, the Authority will apply the proceeds of the Bonds to the purposes specified in the Indenture and the Financing Documents.
(7) There is no action, suit, proceeding or investigation at law or in equity before or by any court, public board or body pending or threatened against or affecting the Authority, or to the best knowledge of the Authority, any basis therefor, wherein an unfavorable decision, ruling or finding would adversely affect the transactions contemplated hereby or by the Indenture, or which, in any way, would dversely affect the validity of the Bonds, or the validity of or enforceability of the Indenture or the Financing Documents, or any agreement or instrument to which the Authority is a party and which is used or contemplated for use in consummation of the transactions contemplated hereby and by the Indenture.
(8) It has not made any commitment or taken any action which will result in a valid claim for any finders or similar fees or commitments in respect of the transactions contemplated by this Agreement.
(9) The representations of the Authority set forth in the Tax Regulatory Agreement are by this reference incorporated in this Agreement as though fully set forth herein.
Section 2.2 Limitation of Control by Borrower. Pursuant to the
Sharing Agreement, the Borrower is the owner of a 52.933% undivided
interest in the Millstone 3 nuclear electric generating plant in Waterford,
Connecticut, at which a portion of the Project is located. The Sharing
Agreement designates the Borrower as one of two lead participants and,
together with such other lead participant, the Borrower has sole
responsibility for operation and maintenance of Millstone 3, subject to the
provisions of the Sharing Agreement. Every obligation of the Borrower
hereunder with respect to that portion of the Project located at Millstone
3 (other than the continuing obligation of the Borrower to pay, at the
times and in the amounts set forth herein, its loan obligation pursuant to
this Agreement) is subject to and limited by the provisions of such Sharing
Agreement. The Borrower agrees, however, subject to the representations
set forth in this Section, to exercise all rights granted to it pursuant to
the Sharing Agreement and its rights as to matters otherwise within the
Borrower's control, and to take all reasonable actions in the prudent
exercise of business judgment, to cause the covenants of the Borrower
contained in this Agreement to be performed to the full extent of the
Borrower's ability during the Term of this Agreement.
Section 2.3. Representations by the Borrower. The Borrower represents and warrants that:
(1) The Borrower has been duly incorporated and validly exists as a corporation in good standing under the laws of the State of Connecticut, is not in violation of any provision of its certificate of incorporation or its by-laws, has corporate power to enter into and perform the Financing Documents, and by proper corporate action has duly authorized the execution and delivery of the Financing Documents.
(2) The Financing Documents constitute valid and legally binding obligations of the Borrower, enforceable in accordance with their respective terms, except to the extent that such enforceability may be limited by bankruptcy or insolvency or other laws affecting creditors' rights generally or by general principles of equity.
(3) Neither the execution and delivery of the Financing Documents, the consummation of the transactions contemplated thereby, nor the fulfillment by the Borrower of or compliance by the Borrower with the terms and conditions thereof is prevented or limited by or conflicts with or results in a breach of, or default under the terms, conditions or provisions of any contractual or other restriction of the Borrower, evidence of its indebtedness or agreement or instrument of whatever nature to which the Borrower is now a party or by which it is bound, or constitutes a default under any of the foregoing. No event has occurred and no condition exists which, upon the execution and delivery of any Financing Documents, constitutes an Event of Default hereunder or an event of default thereunder or, but for the lapse of time or the giving of notice, would constitute an Event of Default hereunder or an event of default thereunder.
(4) There is no action or proceeding pending or, to the knowledge of the Borrower, threatened against the Borrower before any court, administrative agency or arbitration board that will materially and adversely affect the ability of the Borrower to perform its obligations under the Financing Documents except as disclosed in the Borrower's Annual Report on Form 10-K for the fiscal year ended December 31, 1992, the Borrower's Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 1993 and June 30, 1993, and the Borrower's Current Reports on Form 8-K dated June 3, 1993, June 30, 1993 and September 10, 1993; and all authorizations, consents and approvals of governmental bodies or agencies required in connection with the execution and delivery of the Financing Documents and in connection with the performance of the Borrower's obligations hereunder or thereunder have been obtained.
(5) The execution, delivery and performance of the Financing Documents and any other instrument delivered by the Borrower pursuant to the terms hereof or thereof are within the corporate powers of the Borrower and have been duly authorized and approved by the board of directors of the Borrower and are not in contravention of law or of the Borrower's certificate of incorporation or by-laws, as amended to date, or of any undertaking or agreement to which the Borrower is a party or by which it is bound.
(6) The Borrower represents that it has not made any commitment or taken any action which will result in a valid claim for any finders' or similar fees or commitments in respect of the transactions described in this Agreement other than the fees to various parties to the transactions contemplated hereby which have been heretofore paid or provided.
(7) The Project is included within the definition of a "project" in the Act, and its estimated cost is equal to or in excess of $70,000,000. The Borrower intends the Project to be and continue to be an authorized project under the Act during the Term of this Agreement.
(8) All amounts shown in Schedule D of the Tax Regulatory
Agreement are eligible costs of a project financed by bonds issued by
the Authority under the Act, and may be financed by amounts in the
Refunding Fund under the Indenture. None of the proceeds of the Bonds
will be used directly or indirectly as working capital or to finance
inventory.
(9) The Project is in compliance with all applicable federal,
State and local laws and ordinances (including rules and regulations)
relating to zoning, building, safety and environmental quality the
non-compliance with which would materially adversely affect the
performance by the Borrower of any of its obligations hereunder.
(10) The Borrower has obtained all necessary material approvals from any and all governmental agencies requisite to the Project, and has also obtained all material occupancy permits and authorizations from appropriate authorities authorizing the occupancy and use of the Project for the purposes contemplated hereby. The Borrower further represents and warrants that it has completed the Project in accordance with all material federal, State and local laws, ordinances and regulations applicable thereto.
(11) The availability of financial assistance from the Authority as provided herein and in the Indenture has induced the Borrower to locate the Project in the State. The Borrower does not presently intend to lease the project.
(12) The Borrower will not take or omit to take any action which action or omission will in any way cause the proceeds of the Bonds to be applied in a manner contrary to that provided in the Indenture and the Financing Documents as in force from time to time.
(13) The Borrower has not taken and will not take any action and knows of no action that any other person, firm or corporation has taken or intends to take, which would cause interest on the Bonds to be includable in the gross income of the recipients thereof for federal income tax purposes. The representations, certifications and statements of reasonable expectation made by the Borrower in the Tax Regulatory Agreement and relating to Project description, composite issues, bond maturity and average asset economic life, use of Bond proceeds, arbitrage and related matters are hereby incorporated by this reference as though fully set forth herein.
(14) The Borrower has good and marketable or good and merchantable title to the Project subject only to Permitted Encumbrances and to regularities or defects in title which may exist which do not materially impair the use of such properties in the Borrower's business.
(15) The Borrower will use all of the proceeds of the Bonds to refund the Prior Obligations.
ARTICLE III
THE LOAN
Section 3.1. Loan Clauses. (A) Subject to the conditions and in accordance with the terms of this Agreement, the Authority agrees to make a loan to the Borrower from the proceeds of the Bonds in the amount of $70,000,000 and the Borrower agrees to borrow such amount from the Authority.
(B) The loan shall be made at the time of delivery of the Bonds and receipt of payment therefor by the Authority against receipt by the Authority of the Note duly executed and delivered to evidence the pecuniary indebtedness of the Borrower hereunder. As and for the loan the Authority shall apply the proceeds of the Bonds as provided in the Indenture on the terms and conditions therein prescribed.
(C) The Borrower shall make payments in immediately available
funds to the Trustee for deposit in the Debt Service Fund no later than
12:00 Noon on the date on which such payment of principal (including
principal called for redemption) of, premium, if any, or interest on Bonds
shall become due in an amount equal to the payment then coming due on such
Bonds less the amounts, if any, (i) then held in the Debt Service Fund and
available to pay the same, and (ii) amounts received by the Paying Agent to
pay the same from a draw under a Credit Facility. The Borrower may make
payments to the Debt Service Fund earlier than required by this section,
but such payments shall not affect the accrual of interest. In addition,
the Borrower shall pay to the Trustee, as and when the same shall become
due, all other amounts due under the Financing Documents, together with
interest thereon at the then applicable rate as set forth herein in Section
6.2(G). The Borrower shall have the option to prepay its loan obligation in
whole or in part at the times and in the manner provided in Article VIII
hereof.
(D) The payments to be made under Section 3.1(C) shall be appropriately adjusted to reflect the date of issue of Bonds, accrued interest deposited in the Debt Service Fund, if any, and any purchase or redemption of Bonds so that there will be available on each payment date the amount necessary to pay the interest and principal due or coming due on the Bonds and so that accrued interest will be applied to the installments of interest to which it is applicable.
(E) At any time when any principal of the Bonds is overdue, the Borrower shall also have a continuing obligation to pay to the Trustee for deposit in the Debt Service Fund an amount equal to interest on the overdue principal but the installment payments required under this section shall not otherwise bear interest. Redemption premiums shall not bear interest.
(F) The payment obligations of the Borrower in this Section 3.1 are subject in all respects to the provisions of Sections 3.7 and 3.8 hereof regarding the use of Priority Amounts and the effect of drawings under the Credit Facility.
(G) In the event the Borrower should fail to make any of the payments required under the foregoing provisions of this Section 3.1, the item or installment so in default shall continue as an obligation of the Borrower until the amount in default shall have been fully paid, and the Borrower agrees to pay or cause to be paid the same with interest thereon at the rate determined in accordance with Article II of the Indenture until paid in accordance herewith and with the Indenture.
Section 3.2. Other Amounts Payable. (A) The Borrower hereby further expressly agrees to pay to the Trustee as and when the same shall become due, (i) an amount equal to the initial and annual fees of the Trustee for the ordinary services of the Trustee rendered and its ordinary expenses incurred under the Indenture, including fees and expenses as Paying Agent and the fees and expenses of Trustee's counsel, including fees and expenses as registrar and in connection with preparation and delivery of new Bonds upon exchanges or transfers, (ii) the reasonable fees and expenses of the Trustee and any Paying Agents on the Bonds for acting as paying agents as provided in the Indenture, including fees and expenses of the Paying Agent as registrar and in connection with the preparation of new Bonds upon exchanges, transfers or redemptions, (iii) the reasonable fees and expenses of the Bank and the Remarketing Agent for the performance of their duties as provided in the Indenture, including the reasonable fees of their counsel and other expenses the Remarketing Agent may incur in providing for accurate offering documents in connection therewith, (iv) the reasonable fees and charges of the Trustee for extraordinary services rendered by it and extraordinary expenses incurred by it under the Indenture, including reasonable counsel fees and expenses, and (v) fees and expenses of Bond Counsel and the Authority for any future action requested of either.
(B) The Borrower also agrees to pay all amounts payable by it under the Financing Documents at the time and in the manner therein provided.
Section 3.3. Manner of Payment. The payments provided for in Section 3.1 hereof shall be made by any reasonable method providing immediately available funds at the time and place of payment directly to the Trustee for the account of the Authority and shall be deposited in the Debt Service Fund. The additional payments provided for in Section 3.2 shall be made in the same manner directly to the entitled party or to the Trustee for its own use or disbursement to the Paying Agents, as the case may be.
Section 3.4. Obligation Unconditional. The obligations of the Borrower under the Financing Documents shall be absolute and unconditional, irrespective of any defense or any rights of setoff, recoupment or counterclaim it might otherwise have against the Authority or the Trustee. The Borrower will not suspend or discontinue any such payment or terminate this Agreement (other than in the manner provided for hereunder) for any cause, including, without limiting the generality of the foregoing, any acts or circumstances that may constitute failure of consideration, failure of title, or commercial frustration of purpose, or any damage to or destruction of the Project, or the taking by eminent domain of title to or the right of temporary use of all or any part of the Project, or any change in the tax or other laws of the United States, the State or any political subdivision of either thereof, or any failure of the Authority or the Trustee to perform and observe any agreement or covenant, whether expressed or implied, or any duty, liability or obligation arising out of or connected with the Financing Documents.
Section 3.5. Security Clauses. The Authority hereby notifies the Borrower and the Borrower acknowledges that, among other things, the Borrower's loan payments and all of the Authority's right, title and interest under the Financing Documents to which it is a party (except its rights under Section 6.2 hereof) are being concurrently with the execution and delivery hereof endorsed, pledged and assigned without recourse by the Authority to the Trustee as security for the Bonds as provided in the Indenture.
Section 3.6. Issuance of Bonds. The Authority has concurrently with the execution and delivery hereof sold and delivered the Bonds under and pursuant to a resolution adopted by the Authority on September 8, 1993, authorizing their issuance under and pursuant to the Indenture. The proceeds of sale of the Bonds shall be applied as provided in Articles IV and V of the Indenture.
Section 3.7. Use of Priority Amounts. The Borrower and the Authority acknowledge their intention to minimize the risk that any payment made to a Bondowner from amounts provided by or on behalf of the Borrower may be determined by a bankruptcy court to constitute a preference. To this end the parties agree that payments to Bondowners on Bonds supported by a Credit Facility shall be made only from Priority Amounts, except when and to the extent no Priority Amounts are available for the purpose as provided in Section 5.8(e) of the Indenture.
Section 3.8. Effect of Drawings Under Credit Facility. The payment of obligations of the Borrower under this Agreement and the Note with respect to the Bonds shall be completely satisfied to the extent of all drawings made under the Credit Facility for the purpose of satisfying such obligations.
Section 3.9. Effective Date and Term. (A) This Agreement shall become effective upon its execution and delivery by the parties hereto, shall remain in full force from such date and, subject to the provisions hereof (including particularly Articles VII and VIII), shall expire on such date as the Indenture shall be discharged and satisfied in accordance with the provisions of subsection 12.1(A) thereof. The Borrower's obligations under Sections 6.2 and 6.3 hereof, however, shall survive the expiration of this Agreement.
(B) Within 60 days of such expiration the Authority shall deliver to the Borrower any documents and take or cause the Trustee, at the Borrower's expense, to take any such reasonable actions as may be necessary to effect the cancellation, release and satisfaction of the Indenture and the Financing Documents.
Section 3.10. Borrower's Purchase of Bonds. Pursuant to Section 5.8(F) of the Indenture, if the amount drawn on the Credit Facility and deposited with the Paying Agent, together with all other amounts (including remarketing proceeds) received by the Paying Agent for the purchase of Bonds supported by a Credit Facility and tendered pursuant to Section 2.3(G)(1)(c) or 2.3(G)(2)(c) or (d) of the Indenture, is not sufficient to pay the Purchase Price of such Bonds on the Purchase Date, the Paying Agent shall before 3:30 P.M. on such Purchase Date, notify the Borrower, the Remarketing Agent and the Trustee of such deficiency by telephone promptly confirmed in writing. The Borrower shall pay to the Paying Agent in immediately available funds by 4:00 P.M. on the Purchase Date an amount equal to the Purchase Price of such Bonds less the amount, if any, available to pay the Purchase Price in accordance with Section 9.18 of the Indenture from the proceeds of the remarketing of such Bonds or from drawings on the Credit Facility, as reported by the Paying Agent. Bonds so purchased with moneys furnished by the Borrower shall be Borrower Bonds.
Section 3.11. Letter of Credit. The Borrower has arranged, concurrently with the original issuance and authentication of the Bonds, for the delivery to the Paying Agent of the Letter of Credit having a term expiring three years from the date of issuance, and providing for the Paying Agent to be entitled to draw on or prior to the Termination Date (as defined therein), an amount that is not less than the sum of the aggregate principal amount (or that portion of the purchase price corresponding to principal) of the Outstanding Bonds and the aggregate amount of interest accrued on such Bonds (or that portion of the purchase price corresponding to interest).
Section 3.12. Requirements for Delivery of a Substitute Credit
Facility. (A) The Borrower may, upon satisfaction of the requirements set
forth in this Section, at its option (except during the period between the
giving of notice of mandatory tender for purchase on account of the
expiration of the Credit Facility and the Purchase Date), provide for the
delivery to the Paying Agent of a substitute Credit Facility; provided,
however, that (1) the Credit Facility being replaced shall in no event be
terminated or released until the Borrower has given not less than
forty-five (45) days' written notice to the Authority, the Trustee, the
Paying Agent and the Remarketing Agent, and further the Paying Agent has
received the proceeds of all outstanding drawings on the Credit Facility
being replaced, (2) if any Bonds supported by the Credit Facility being
replaced are in the Weekly Mode, the Paying Agent has given not less than
(30) days' written notice of the termination or release of the Credit
Facility to owners of such Bonds in the Weekly Mode and (3) if any of the
Bonds supported by the Credit Facility being replaced are in the Flexible
Mode, such Credit Facility shall in no event be terminated or released
earlier than on the second Business Day after an Effective Date for all
such Bonds or such earlier day on or after such Effective Date on which the
full Purchase Price for such Bonds is received by the Paying Agent. Any
notice given pursuant to clause (1) or (2) above shall specify the
expiration date of the Credit Facility and the name of the entity providing
the substitute Credit Facility and shall advise that the Credit Facility
will terminate on the date stated in such notice.
(B) Each Credit Facility must:
(i) be an irrevocable, unconditional obligation of a financial institution;
(ii) be on terms no less favorable to the Paying Agent than the Letter of Credit and entitle the Paying Agent to draw upon or demand payment and receive in immediately available funds an amount equal to the sum of the principal amount of the Bonds supported by the Credit Facility, any premium applicable thereto, and (A) forty-five (45) days' accrued interest at the Maximum Interest Rate on the principal amount of Bonds then Outstanding in the Weekly Mode, or (B) thirty-eight (38) days' accrued interest at the Maximum Interest Rate on the principal amount of Bonds then Outstanding in the Flexible Mode; and
(iii) provide for a term which may not expire in less than 360 days and which may not expire or be terminated prior to the fifth Business Day after the mandatory tender for purchase as provided in Section 2.3(G)(1)(c) or 2.3(G)(2)(d) of the Indenture. The Borrower shall not enter into any Reimbursement Agreement or agree to any amendment of a Reimbursement Agreement which in any way limits the obligation of the Bank to provide funds under the Credit Facility without the prior written consent of 100% of the principal amount of the Bonds Outstanding and entitled to the benefit thereof.
(C) No substitute Credit Facility may be delivered to the Trustee for any purpose under this Agreement or the Indenture unless accompanied by the following documents: (i) an opinion of counsel for the issuer of the substitute Credit Facility to the effect that it constitutes a legal, valid and binding obligation of the issuer enforceable in accordance with its terms; (ii) an opinion of Bond Counsel to the effect that the issuance of a substitute Credit Facility will not adversely affect the exclusion of interest on the Bonds from gross income for federal income tax purposes and that such Credit Facility is permitted under the Indenture; (iii) an opinion of counsel to the Borrower, satisfactory to the Trustee stating that the delivery of such substitute Credit Facility is authorized under this Agreement and complies with the terms hereof; (iv) a certificate of the Bank that all amounts due under the Reimbursement Agreement have been paid and that the Company has fulfilled all its obligations arising out of such Agreement; (v) an executed copy of the Reimbursement Agreement entered into with respect to the substitute Credit Facility; (vi) copies of any other documents, agreements or arrangements entered into directly or indirectly between the Borrower and the entity issuing the substitute Credit Facility with respect to the transactions contemplated by the substitute Credit Facility and related Reimbursement Agreement; and (vii) such other documents and opinions as the Trustee or the Authority may reasonably request. Notice of the substitution, replacement, termination or extension of a Credit Facility shall be sent by the Paying Agent to Moody's and S&P and shall include the new expiration date of the Credit Facility and the name of the entity providing the substitute Credit Facility.
The substitute Credit Facility, related Reimbursement Agreement and other documents, agreements and arrangements entered into and delivered with respect to the delivery of a substitute Credit Facility shall not include any provisions less favorable to the owners of the Bonds than the provisions of the Credit Facility and related Reimbursement Agreement, documents, agreements and arrangements, including provisions regarding the acceleration of the Bonds, any right of setoff of assets of the account party by the entity issuing the substitute Credit Facility, and any direct or indirect pledge of collateral which is not pledged on a priority or parity basis to the owners of the Bonds.
Section 3.13. Securities Laws. In any remarketing of Bonds under this Agreement, the Borrower shall at all times comply with applicable federal and state securities laws.
Section 3.14. New York Paying Agent. The Borrower agrees that if at any time it becomes necessary or desirable to have a Paying Agent capable of performing in New York, New York, it shall remove Shawmut Bank Connecticut, National Association as Paying Agent and a successor shall be appointed pursuant to Section 9.11 of the Indenture.
ARTICLE IV
THE PROJECT
Section 4.1. Completion of the Project. (A) The Borrower represents and warrants that the Project has been completed.
(B) The Borrower affirms that it shall bear all of the costs and expenses in connection with the preparation of the Financing Documents and the Indenture, the preparation and delivery of any legal instruments and documents necessary in connection therewith and their filing and recording, if required, and all taxes and charges payable in connection with any of the foregoing. Such costs and all other costs of the Project shall be paid by the Borrower or from the Refunding Fund in the manner and to the extent provided in the Indenture.
Section 4.2. No Warranty Regarding Condition, Suitability or Cost of Project. Neither the Authority, nor the Trustee, nor any Bondholder makes any warranty, either expressed or implied, as to the Project or its condition or that it will be suitable for the Borrower's purposes or needs, or that the insurance required hereunder will be adequate to protect the Borrower's business or interest, or that the proceeds of the Bonds will be sufficient to refund the Prior Obligations.
Section 4.3. Taxes. (A) The Borrower will pay when due all material
(1) taxes, assessments, water rates and sewer use or rental charges, (2)
payments in lieu thereof which may be required by law, and (3) governmental
charges and impositions of any kind whatsoever which may now or hereafter
be lawfully assessed or levied upon the Project or any part thereof, or
upon the rents, issues, or profits thereof, whether directly or indirectly.
With respect to special assessments or other governmental charges that may
lawfully be paid in installments over a period of years, the Borrower shall
be obligated to pay only such installments as are required to be paid
during the Term.
(B) The Borrower may, at its expense and in its own name, in good faith contest any such taxes, assessments and other charges and payments in lieu of taxes including assessments and, in the event of such contest, may permit the taxes, assessments or other charges or payments in lieu of taxes, including assessments so contested to remain unpaid, provided prior written notice thereof has been given to the Trustee and reserves to the extent required by the Reimbursement Agreement are maintained, during the period of such contest and any appeal therefrom. Nothing herein shall preclude the Borrower, at its expense and in its own name and behalf, from applying for any tax exemption allowed by the federal government, the State or any political or taxing subdivision thereof under any existing or future provision of law which grants or may grant such tax exemption.
Section 4.4. Insurance. (A) The Borrower shall insure the Project against loss or damage by fire, flood, lightning, windstorm, vandalism and malicious mischief and other hazards, casualties, contingencies and extended coverage risks in such amounts and in such manner as is required by applicable federal or state law and shall pay when due the premiums thereon.
(B) The Borrower further agrees that it will at all times carry public liability insurance with respect to the Project to the extent required by applicable federal or state law.
(C) As an alternative to the hazard insurance and public liability insurance requirements of subsections (A) or (B) above the Borrower may self-insure against hazard or public liability risks.
(D) The insurance coverage required by this Section may be effected under overall blanket or excess coverage policies of the Borrower or any affiliate and may be carried with any insurer other than an unauthorized insurer under the Connecticut Unauthorized Insurers Act. The Borrower shall furnish evidence satisfactory to the Authority or the Trustee, promptly upon the request of either, that the required insurance coverage is valid and in force.
Section 4.5. Compliance with Law. The Borrower will observe and comply with all material laws, regulations, ordinances, rules, and orders (including without limitation those relating to zoning, land use, environmental protection, air, water and land pollution, wetlands, health, equal opportunity, minimum wages, worker's compensation and employment practices) of any federal, state, municipal or other governmental authority relating to the Project except during any period during which the Borrower at its expense and in its name shall be in good faith contesting its obligation to comply therewith.
Section 4.6. Maintenance and Repair. At its own expense, the Borrower
will keep and maintain or cause the Project to be kept and maintained in
accordance with sound utility operating practice and in good condition,
working order and repair, will not commit or suffer any waste thereon, and
will make all material repairs and replacements thereto which may be
required in connection therewith. Nothing in this Section 4.6 shall (1)
apply to any portion of the Project beyond its useful or economic life or
(2) apply to the use and disposition by the Borrower of any part of the
Project in the ordinary course of its business.
ARTICLE V
CONDEMNATION
DAMAGE AND DESTRUCTION
Section 5.1. No Abatement of Payments Hereunder. If the Project shall be damaged or either partially or totally destroyed, or if title to or the temporary use of the whole or any part thereof shall be taken or condemned by a competent authority for any public use or purpose, there shall be no abatement or reduction in the amounts payable by the Borrower hereunder and the Borrower shall continue to be obligated to make such payments. In any such case the Borrower shall promptly give written notice thereof to the Authority and the Trustee.
Section 5.2. Project Disposition Upon Condemnation, Damage or Destruction. In the event of any such condemnation, damage or destruction the Borrower shall:
(1) Comply with the applicable provisions of the Mortgage Indentures and the Sharing Agreement concerning the repair, reconstruction or restoration of the Project or give notice to the Authority of its decision not to so comply; and/or
(2) If and as permitted by Section 8.1 hereof, exercise its option to prepay its loan obligation in full.
Section 5.3. Application of Net Proceeds of Insurance or Condemnation. The Net Proceeds from any insurance or condemnation award with respect to the Project shall be applied as provided in the Mortgage Indentures, or, in the event that the Mortgage Indentures have been discharged or are no longer in effect, shall be applied at the direction of the Borrower with the approval of the Authority.
ARTICLE VI
COVENANTS
Section 6.1. The Borrower to Maintain its Corporate Existence; Conditions under which Exceptions Permitted. (A) The Borrower covenants and agrees that, during the Term of this Agreement it will maintain its corporate existence, will continue to be a corporation either organized under the laws of or duly qualified to do business as a foreign corporation in the State and in all jurisdictions necessary in the operation of its business, will not dissolve or otherwise dispose of all or substantially all of its assets and will not consolidate with or merge into another corporation or permit one or more other corporations to consolidate with or merge into it.
(B) The Borrower may, however, without violating the agreements contained in this Section, consolidate with or merge into another corporation or permit one or more other corporations to consolidate with or merge into it, or sell or otherwise transfer to another corporation all or substantially all of its assets as an entity and thereafter liquidate or dissolve, if (a) the Borrower is the surviving, resulting or transferee corporation, as the case may be, or (b) in the event the Borrower is not the surviving, resulting or transferee corporation, as the case may be, such corporation (i) is a solvent corporation either organized under the laws of or duly qualified to do business as a foreign corporation subject to service of process in the State and (ii) assumes in writing all of the obligations of the Borrower herein, and under the Note.
Section 6.2. Indemnification, Payment of Expenses, and Advances. (A) The Borrower agrees to protect, defend and hold harmless the Authority, the State, agencies of the State and their members, servants, agents, directors, officers and employees (the "Authority Indemnified Parties"), and the Paying Agent, the Trustee and their officers, directors and employees (the "Indemnified Parties") from any claim, demand, suit, action or other proceeding and any liabilities, costs, and expenses whatsoever by any person or entity whatsoever, arising or purportedly arising from or in connection with the Financing Documents, the Indenture, the Bonds, or the transactions contemplated thereby or actions taken thereunder by any person (including without limitation the filing of any information, form or statement with the Internal Revenue Service), except for any wilful and material misrepresentation, wilful misconduct or gross negligence on the part of the Authority Indemnified Parties or the Indemnified Parties and except for any bad faith on the part of any Indemnified Party other than an Authority Indemnified Party.
The Borrower agrees to indemnify and hold harmless any Indemnified Party against any and all claims, demands, suits, actions or other proceedings and all liabilities, costs and expenses whatsoever caused by any untrue statement or misleading statement or alleged untrue statement or alleged misleading statement of a material fact contained in the written information provided by the Borrower in connection with the issuance of the Bonds or incorporated by reference therein or caused by any omission or alleged omission from such information of any material fact required to be stated therein or necessary in order to make the statements made therein in the light of the circumstances under which they were made, not misleading.
(B) The Authority and the Trustee shall not be liable for any damage or injury to the persons or property of the Borrower or its members, directors, officers, agents, servants or employees, or any other person who may be about the Project due to any act or omission of any person other than the Authority or the Trustee or their respective members, directors, officers, agents, servants and employees.
(C) The Borrower releases each Indemnified Party from, agrees that no Indemnified Party shall be liable for, and agrees to hold each Indemnified Party harmless against, any attorney fees and expenses, expenses or damages incurred because of any investigation, review or lawsuit commenced by the Trustee or the Authority in good faith with respect to the Financing Documents, the Indenture, the Bonds and the Project Realty and the Project Equipment, and the Authority or the Trustee shall promptly give written notice to the Borrower with respect thereto.
(D) All covenants, stipulations, promises, agreements and obligations of the Authority and the Trustee contained herein shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the Authority and the Trustee and not of any member, director, officer or employee of the Authority or the Trustee in its individual capacity, and no recourse shall be had for the payment of the Bonds or for any claim based thereon or hereunder against any member, director, officer or employee of the Authority or the Trustee or any natural person executing the Bonds.
(E) In case any action shall be brought against one or more of the Indemnified Parties based upon any of the above and in respect of which indemnity may be sought against the Borrower, such Indemnified Party shall promptly notify the Borrower in writing, enclosing a copy of all papers served, but the omission so to notify the Borrower of any such action shall not relieve it of any liability which it may have to any Indemnified Party otherwise than under this Section 6.2. In case any such action shall be brought against any Indemnified Party and it shall notify the Borrower of the commencement thereof, the Borrower shall be entitled to participate in and, to the extent that it shall wish, to assume the defense thereof with counsel satisfactory to such Indemnified Party, and after notice from the Borrower to such Indemnified Party of the Borrower's election so to assume the defense thereof, the Borrower shall not be liable to such Indemnified Party for any subsequent legal or other expenses attributable to such defense, except as set forth below, other than reasonable costs of investigation subsequently incurred by such Indemnified Party in connection with the defense thereof. The Indemnified Party shall have the right to employ its own counsel in any such action, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless (i) the employment of counsel by such Indemnified Party has been authorized by the Borrower; (ii) the Indemnified Party shall have reasonably concluded that there may be a conflict of interest between the Borrower and the Indemnified Party in the conduct of the defense of such action (in which case the Borrower shall not have the right to direct the defense of such action on behalf of the Indemnified Party); or (iii) the Borrower shall not in fact have employed counsel reasonably satisfactory to the Indemnified Party to assume defense of such action; provided, however, that Borrower shall not be responsible for the fees and expenses of more than one such law firm unless an Indemnified Party shall have reasonably concluded that there may be a conflict of interest between such Indemnified Party and any other Indemnified Party requiring the use of separate counsel, or Borrower has not employed counsel which is satisfactory to each Indemnified Party. The Borrower shall not be liable for any settlement of any action or claim effected without its consent.
(F) The Borrower also agrees to pay all reasonable or necessary out-of-pocket expenses of the Authority in connection with the issuance of the Bonds, the administration of the Financing Documents and the enforcement of its rights thereunder.
(G) In the event the Borrower fails to pay any amount or perform any act under the Financing Documents, the Trustee or the Authority may pay the amount or perform the act, in which event the costs, disbursements, expenses and reasonable counsel fees and expenses thereof, together with interest thereon from the date the expense is paid or incurred at the prime interest rate generally prevailing among banks in the State on the date of the advance plus 1% shall be an additional obligation hereunder payable upon demand by the Authority or the Trustee.
(H) Any obligation of the Borrower to the Authority under this
Section shall be separate from and independent of the other obligations of
the Borrower hereunder, and may be enforced directly by the Authority
against the Borrower irrespective of any action taken by or on behalf of
the owners of the Bonds.
(I) The obligations of the Borrower under this section, notwithstanding any other provisions contained in the Financing Documents, shall survive the termination of this Agreement and shall be recourse to the Borrower, and for the enforcement thereof any Indemnified Party shall have recourse to the general credit of the Borrower.
Section 6.3. Incorporation of Tax Regulatory Agreement; Payments Upon Taxability. (A) For purpose of this Section, the term owner means the Beneficial Owner of the Bonds so long as the Book-Entry System is in effect.
(B) The representations, warranties, covenants and statements of expectation of the Borrower set forth in the Tax Regulatory Agreement are by this reference incorporated in this Agreement as though fully set forth herein.
(C) If any owner of the Bonds receives from the Internal Revenue Service a notice of assessment and demand for payment with respect to interest on any Bond (except a notice and demand based upon the assertion that the owner of the Bonds is a Substantial User or Related Person), an appeal may be taken by the owner of the Bonds at the option of the Borrower. Without limiting the generality of the foregoing, the Borrower shall have the right to direct the Trustee to direct the owner of the Bonds to take such appeal or not to take such appeal. In either case all expenses of the appeal including reasonable counsel fees and expenses shall be paid by the Borrower, and the owner of the Bonds and the Borrower shall cooperate and consult with each other in all matters pertaining to any such appeal, except that no owner of the Bonds shall be required to disclose or furnish any non-publicly disclosed information, including, without limitation, financial information and tax returns.
(D) Not later than 90 days following a Determination of Taxability, the Borrower shall pay to the Trustee an amount sufficient, when added to the amount then in the Debt Service Fund and available for such purpose, to retire and redeem all Bonds then Outstanding, in accordance with Section 2.4 of the Indenture.
(E) The obligation of the Borrower to make the payments provided for in this Section shall be absolute and unconditional, and the failure of the Authority or the Trustee to execute or deliver or cause to be executed or delivered any documents or to take any action required under this Agreement or otherwise shall not relieve the Borrower of its obligation under this Section. Notwithstanding any other provision of this Agreement or the Indenture, the Borrower's obligations under this Section shall survive the termination of this Agreement and the Indenture.
(F) The Borrower's payment obligations under this Section are further subject in all respects to the provisions of Section 3.7 and 3.8 hereof regarding the use of Priority Amounts and the effect of drawings under the Letter of Credit.
(G) The occurrence of a Determination of Taxability shall not be an Event of Default hereunder but shall require only the performance of the obligations of the Borrower stated in this Section, the breach of which shall constitute an Event of Default as provided in Section 7.1 hereof.
(H) At any time after the issuance of the Bonds, the Authority shall, upon (1) the release of a published Revenue Ruling by the Internal Revenue Service and the receipt by the Authority of an opinion of Bond Counsel to the effect that such ruling may adversely affect the exclusion of interest on the Bonds from gross income for federal income tax purposes, and (2) receipt from the Borrower, within 30 days after the Authority has mailed copies of such ruling and such opinion to the Borrower, of a written request to proceed in accordance with this Section, proceed to apply for and use its best efforts to obtain a ruling from the Internal Revenue Service, pursuant to Revenue Procedure 88-33 or any other procedures subsequently established by the Internal Revenue Service, as to the qualification or continued qualification of interest on the Bonds for exclusion from gross income for federal income tax purposes. The Authority and the Borrower shall cooperate and consult with each other in all matters pertaining to such ruling request. All expenses of the Authority in connection with such application including reasonable counsel fees shall be paid by the Borrower.
Section 6.4. Covenant as to Project Use. (A) The Borrower agrees that it shall promptly notify the Authority and the Trustee upon the occurrence of any of the following events, in each case, whether as a result of a determination by the Borrower, the Connecticut Department of Public Utility Control or the United States Nuclear Regulatory Commission or its successors,
(1) Abandonment of a substantial portion of the Project at any one time or in the aggregate;
(2) Any disposition of all or any part of the Borrower's ownership interest in the Project other than (i) to a company which is part of Northeast Utilities, (ii) in connection with a merger, consolidation, or sale of assets permitted by Section 6.1(B) hereof, (iii) in connection with any form of financing (including without limitation the grant of a mortgage or security interest or sale in connectin with a sale and lease back) by the Borrower, (iv) in any case in which the remaining aggregate ownership interest of Northeast Utilities is greater than 50 percent, (v) of any portion of the Project beyond its useful or economic life, or (vi) in the ordinary course of the Borrower's business. For purposes of this paragraph, "Northeast Utilities" means Northeast Utilities, its subsidiaries (whether direct or indirect) and their successors and assigns; or
(3) Any determination, following damage or destruction of all or substantially all of the Project, not to repair, reconstruct, relocate or replace the Project.
(B) In the event that the Authority receives notice from the
Borrower of the occurrence of any event described in subsection (A) of this
Section 6.4, the Borrower agrees that the Authority may, not later than one
year after the receipt of such notice from the Borrower, declare that
payment of all amounts due under the Financing Documents shall be
accelerated by notice to the Borrower and the Trustee stating that such
amounts are due and payable by the Borrower in full on a date selected by
the Borrower and set forth in a notice to the Trustee and the Authority,
which date shall be not later than three years from the date of mailing of
the Authority's acceleration notice to the Borrower.
(C) Any failure of the Borrower to comply with the provisions of this Section shall be subject to the provisions of Section 7.3 hereof.
Section 6.5. Further Assurances and Corrective Instruments. The Authority and the Borrower agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may reasonably be required for correcting any inadequate or incorrect description of the Project Realty or Project Equipment or for carrying out the intention of or facilitating the performance of this Agreement.
Section 6.6. Covenant by Borrower as to Compliance with Indenture. The Borrower covenants and agrees that it will comply with the provisions of the Indenture with respect to the Borrower and that the Trustee and the Bondholders shall have the power and authority provided in the Indenture. The Borrower further agrees to aid in the furnishing to the Authority or the Trustee of opinions that may be required under the Indenture. The Borrower covenants and agrees that the Trustee shall be entitled to and shall have all the rights, including the right to enforce against the Borrower the provisions of the Financing Documents, pertaining to the Trustee notwithstanding the fact that the Trustee is not a party to the Financing Documents.
Section 6.7. Assignment of Agreement or Note. (A) The Borrower may not assign its rights, interests or obligations hereunder or under the Note except as may be permitted pursuant to Section 6.1(B) hereof.
(B) The Authority agrees that it will not assign or transfer any of the Financing Documents or the revenues and other receipts, funds and monies to be received thereunder during the Term except to the Trustee as provided in this Agreement and the Indenture.
Section 6.8. Inspection. The Authority, the Trustee and their duly authorized agents shall have (1) the right at all reasonable times to enter upon and to examine and inspect the Project and (2) such rights of access thereto as may be reasonably necessary for the proper maintenance and repair thereof in the event of failure by the Borrower to perform its obligations under this Agreement, subject, in each case, to all applicable laws, rules, regulations, orders and guidelines. The Authority and the Trustee shall also be permitted, at all reasonable times, to examine the books and records of the Borrower with respect to the Project.
Section 6.9. Default Notification. Within seven (7) days after becoming aware of any condition or event which constitutes, or with the giving of notice or the passage of time would constitute, an Event of Default or an "Event of Default" under Section 8.1 of the Indenture, the Borrower shall deliver to the Authority, the Bank, if any, the Remarketing Agent, the Paying Agent and the Trustee a notice stating the existence and nature thereof and specifying the corrective steps, if any, the Borrower is taking with respect thereto.
Section 6.10. Covenant Against Discrimination. (A) The Borrower in the performance of this Agreement will not discriminate or permit discrimination against any person or group of persons on the grounds of race, color, religion, national origin, age, sex, sexual orientation, marital status, physical or learning disability, political beliefs, mental retardation or history of mental disorder in any manner prohibited by the laws of the United States or of the State.
(B) The Borrower will comply with the provisions of the resolution adopted by the Authority on June 14, 1977, as amended, and the policy of the Authority implemented pursuant thereto concerning the promotion of equal employment opportunity through affirmative action plans. The resolution requires that all borrowers receiving financial assistance from the Authority adopt and implement an affirmative action plan prior to the closing of the loan. The plan shall be updated annually as long as the Bonds remain Outstanding.
Section 6.11. Authority Costs and Expenses. The Authority agrees that it shall in all instances act in good faith in incurring costs, expenses and legal fees in connection with the transactions contemplated by this Agreement and the Indenture.
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.1. Events of Default. Any one or more of the following shall constitute an "Event of Default" hereunder:
(1) Any material representation or warranty made by the Borrower in the Financing Documents or any certificate, statement, data or information furnished in writing to the Authority or the Trustee by the Borrower in connection with the closing of the initial issue of the Bonds or included by the Borrower in its application to the Authority for assistance proves at any time to have been incorrect when made in any material respect.
(2) Failure by the Borrower to pay any amount that has become due and payable with respect to the Bonds or any other amount due and payable pursuant to the Financing Documents and the continuance of such failure for more than five Business Days.
(3) Failure by the Borrower to comply with the default notification provisions of Section 6.9 hereof.
(4) The occurrence of an "Event of Default" under Section 8.1(A) of the Indenture (other than an occurrence under Section 8.1(A)(2)(a)).
(5) Failure by the Borrower to observe or perform any covenant, condition or agreement hereunder or under the Financing Documents except those referred to above) and (a) continuance of such failure for a period of sixty days after receipt by the Borrower of written notice specifying the nature of such failure or (b) if by reason of the nature of such failure the same cannot be remedied within the sixty day period, the Borrower fails to proceed with reasonable diligence after receipt of the notice to cure the failure.
(6) The Borrower shall (a) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian or the like of itself or of its property, (b) admit in writing its inability to pay its debts generally as they become due, (c) make a general assignment for the benefit of creditors, (d) be adjudicated a bankrupt or insolvent, or (e) commence a voluntary case under the Federal bankruptcy laws of the United States of America or file a voluntary petition or answer seeking reorganization, an arrangement with creditors or an order for relief or seeking to take advantage of any insolvency law or file an answer admitting the material allegations of a petition filed against it in any bankruptcy, reorganization or insolvency proceeding; or corporate action shall be taken by it for the purpose of effecting any of the foregoing; or if without the application, approval or consent of the Borrower, a proceeding shall be instituted in any court of competent jurisdiction, seeking in respect of the Borrower an adjudication in bankruptcy, reorganization, dissolution, winding up, liquidation, a composition or arrangement with creditors, a readjustment of debts, the appointment of a trustee, receiver, liquidator or custodian or the like of the Borrower or of all or any substantial part of its assets, or other like relief in respect thereof under any bankruptcy or insolvency law, and, if such proceeding is being contested by the Borrower in good faith, the same shall continue undismissed, or pending and unstayed, for any period of 90 consecutive days.
Section 7.2. Remedies on Default. (A) Whenever any Event of Default shall have occurred, the Trustee, or the Authority where so provided herein, may take any one or more of the following actions:
(1) The Trustee, as and to the extent provided in Article VIII of the Indenture, may cause all amounts payable under the Financing Documents to be immediately due and payable without notice or demand of any kind, whereupon the same shall become immediately due and payable.
(2) The Authority, without the consent of the Trustee or any Bondholder, may proceed to enforce the obligations of the Borrower to the Authority under this Agreement.
(3) The Trustee may take whatever action at law or in equity it may have to collect the amounts then due and thereafter to become due, or to enforce the performance or observance of the obligations, agreements, and covenants of the Borrower under the Financing Documents.
(B) In the event that any Event of Default or any proceeding taken by the Authority (or by the Trustee on behalf of the Authority) thereon shall be waived or determined adversely to the Authority, then the Event of Default shall be annulled and the Authority and the Borrower shall be restored to their former rights hereunder, but no such waiver or determination shall extend to any subsequent or other default or impair any right consequent thereon.
Section 7.3 Remedies Upon Project Use Default. (A) If the Borrower shall fail to notify the Authority of the occurrence of any event set forth in Section 6.4(A) hereof within 60 days of the determination thereof as provided in Section 6.4(A), the Authority may, not later than one year after obtaining knowledge of such determination and so long as such failure is continuing, send a notice to the Trustee and the Borrower calling for the acceleration of all of the Borrower's obligations under the Financing Documents and for the redemption of all of the Bonds Outstanding. Any such notice (i) shall set forth in reasonable detail the event giving rise to the Borrower's obligation under Section 6.4(A), (ii) shall be accompanied by such evidence thereof as shall be acceptable to the Trustee, and (iii) shall specify the dates upon which (a) notice of redemption of the Bonds is to be given by the Trustee (which shall not be less than 180 days from the date of the notice being given to the Trustee by the Authority) and (b) the date redemption of Bonds is to occur (which shall be a date at least thirty days after notice of redemption is to be given by the Trustee).
(B) If, after receipt of notice from the Authority as provided in Section 6.4(B), the Borrower shall fail to select a date for redemption of all Outstanding Bonds, the Authority may, not earlier than 60 days prior to the date which is three years after the date notice was mailed to the Borrower as provided in Section 6.4(B), send a notice to the Trustee and the Borrower calling for the redemption of all of the Bonds then Outstanding. Any such notice shall specify the date that notice of redemption is to be given by the Trustee and the date that such redemption is to occur.
(C) On or before the redemption date specified by the Trustee in its notice of redemption pursuant to this Section, the Borrower shall pay, as a final loan payment hereunder, a sum sufficient, together with other funds on deposit with the Trustee and available for such purpose, to redeem all Bonds then Outstanding under the Indenture at 100% of the principal amount thereof plus accrued interest to the redemption date. The Borrower shall also pay or provide for all reasonable and necessary fees of the Trustee and any Paying Agent accrued and to accrue through the date of redemption of the Bonds and all other amounts due or to become due under the Financing Documents.
Section 7.4. No Duty to Mitigate Damages. Unless otherwise required by law, neither the Authority, the Trustee nor any Bondholder shall be obligated to do any act whatsoever or exercise any diligence whatsoever to mitigate the damages to the Borrower if an Event of Default shall occur.
Section 7.5. Remedies Cumulative. No remedy herein conferred upon or reserved to the Authority or the Trustee is intended to be exclusive of any other available remedy or remedies but each and every such remedy shall be cumulative and shall be in addition to every remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. Delay or omission to exercise any right or power accruing upon any default or failure by the Authority or the Trustee to insist upon the strict performance of any of the covenants and agreements herein set forth or to exercise any rights or remedies upon default by the Borrower hereunder shall not impair any such right or power or be considered or taken as a waiver or relinquishment for the future of the right to insist upon and to enforce, by injunction or other appropriate legal or equitable remedy, strict compliance by the Borrower with all of the covenants and conditions hereof, or of the right to exercise any such rights or remedies, if such default by the Borrower be continued or repeated.
ARTICLE VIII
PREPAYMENT PROVISIONS
Section 8.1. Optional Prepayment. (A) The Borrower shall have, and is hereby granted, the option to prepay its loan obligation and to cause the corresponding optional redemption of the Bonds pursuant to Section 2.4(A) of the Indenture at such times, in such amounts, and with such premium, if any, for such optional redemption as set forth in the forms of the Bonds, by delivering a written notice to the Trustee in accordance with Section 8.2 hereof, with a copy to the Authority, setting forth the amount to be prepaid, the amount of Bonds requested to be redeemed with the proceeds of such prepayment, and the date on which such Bonds are to be redeemed. Such prepayment must be sufficient to provide monies for the payment of interest and Redemption Price in accordance with the terms of the Bonds requested to be redeemed with such prepayment and all other amounts then due under the Financing Documents. In the event of any complete prepayment of its loan obligation, the Borrower shall, at the time of such prepayment, also pay or provide for the payment of all reasonable or necessary fees and expenses of the Authority, the Trustee and the Paying Agent accrued and to accrue through the final payment of all the Bonds. Any such prepayments shall be applied to the redemption of Bonds in the manner provided in Section 2.4(A) of the Indenture, and credited against payments due hereunder in the same manner.
(B) The Borrower shall have, and is hereby granted, the option to prepay its loan obligation in full at any time without premium if any of the following events shall have occurred, as evidenced in each case by the filing with the Trustee of a certificate of an Authorized Representative of the Borrower to the effect that one of such events has occurred and is continuing, and describing the same:
(1) Damage or destruction to any of the Plants or the Project to
such extent that in the opinion of the Borrower (expressed in a resolution
adopted by the Board of Directors of the Borrower (a "Board Resolution"))
and of an architect or engineer acceptable to the Borrower (who may be an
employee of the Borrower), both filed with the Authority and the Trustee,
(1) any of the Plants or the Project, as the case may be, cannot be
reasonably repaired, rebuilt, or restored within a period of six (6) months
to their condition immediately preceding such damage or destruction, or (2)
normal operations are thereby prevented from being carried on at any of the
Plants for a period of not less than six (6) months.
(2) Loss of title to or use of a substantial part of any of the Plants or the Project as a result of the exercise of the power of eminent domain which, in the opinion of the Borrower (expressed in a Board Resolution) and of an architect or engineer acceptable to the Borrower (who may be an employee of the Borrower), both filed with the Authority and the Trustee, prevents or is likely to prevent normal operations from being carried on at any of the Plants for a period of not less than six (6) months.
(3) A substantial part of any of the Plants or the Project shall become obsolete in the opinion of the Borrower (expressed in a Board Resolution).
(4) A change in the Constitution of the State of Connecticut or of the United States of America or legislative or executive action (whether local, state, or federal) or a final decree, judgment or order of any court or administrative body (whether local, state, or federal) that causes this Agreement to become void or unenforceable or impossible of performance in accordance with the intent and purpose of the parties as expressed herein or, imposes unreasonable burdens or excessive liabilities upon the Borrower with respect to any of the Plants or the Project or the operation thereof.
(5) The operation of any of the Plants or the Project shall have been enjoined or shall otherwise have been prohibited by any order, decree, rule or regulation of any court or of any local, state, or federal regulatory body, administrative agency or other governmental body for a period of not less than six (6) months.
(6) Changes which the Borrower cannot reasonably control in the economic availability of fuel, materials, supplies, labor, equipment, or other properties or things necessary for the efficient operation of any of the Plants or the Project shall have occurred which, in the judgment of the Borrower (expressed in a Board Resolution), render the continued operation of any of the Plants uneconomical.
In any such case the final loan payment shall be a sum sufficient, together with other funds deposited with Trustee and available for such purpose, to redeem all Bonds then outstanding under the Indenture at the redemption price of 100% of the principal amount thereof plus accrued interest to the redemption date or dates and all other amounts then due under the Financing Documents, and the Borrower shall also pay or provide for all reasonable or necessary fees and expenses of the Trustee and Paying Agent and the Remarketing Agent accrued and to accrue through final payment for the Bonds. The Borrower shall deliver a written notice to the Trustee, with a copy to the Authority, requesting the redemption of the Bonds under the Indenture, which notice shall have attached thereto the applicable certificate of the Authorized Representative of the Borrower. The Borrower's right to so request the redemption of the Bonds upon the occurrence of any single event listed in this Section 8.1(B) shall expire six (6) months, and any such redemption shall occur within nine (9) months, after such event occurs.
Section 8.2. Notice by the Borrower of Optional Prepayment. The
Borrower shall exercise its option to prepay its loan obligation pursuant
to Section 8.1(A) or (B) by giving written notice signed by an Authorized
Representative of the Borrower to the Trustee, the Authority, the Paying
Agent, and the Remarketing Agent at least five (5) days before the
prepayment date if Bonds to be redeemed with the amounts to prepaid
pursuant to the Indenture are then in the Flexible Mode, and forty-five
(45) days before the prepayment date if Bonds to be redeemed with the
amounts so prepaid pursuant to the Indenture are then in any other Mode.
Section 8.3. Mandatory Prepayment on Taxability. The Borrower shall pay or cause the prepayment of its loan obligation following a Determination of Taxability in the manner provided in Section 6.3 of this Agreement.
Section 8.4. Mandatory Prepayment Upon Occurrence of Certain Events. The Borrower shall pay or cause the prepayment of its loan obligation, prior to the maturity of the Bonds, on a date selected by the Borrower, which date shall be not later than three years after the date of mailing to the Borrower of notice from the Authority of the Authority's election to accelerate the Borrower's loan obligation hereunder as provided in Sections 6.4 and 7.3 hereof.
ARTICLE IX
GENERAL
Section 9.1. Indenture. (A) Monies received from the sale of the Bonds and all loan payments made by the Borrower and all other monies received by the Authority or the Trustee under the Financing Documents shall be applied solely and exclusively in the manner and for the purposes expressed and specified in the Indenture and in the Bonds and as provided in this Agreement.
(B) The Borrower shall have and may exercise all the rights, powers and authority given the Borrower in the Indenture and in the Bonds, and the Indenture and the Bonds shall not be modified, altered or amended in any manner which adversely affects such rights, powers and authority or otherwise adversely affects the Borrower without the prior written consent of the Borrower.
Section 9.2. Benefit of and Enforcement by Bondholders. The Authority and the Borrower agree that this Agreement is executed in part to induce the purchase by others of the Bonds and for the further securing of the Bonds, and accordingly that all covenants and agreements on the part of the Authority and the Borrower as to the amounts payable with respect to the Bonds hereunder are hereby declared to be for the benefit of the holders from time to time of the Bonds and may be enforced as provided in the Indenture on behalf of the Bondholders by the Trustee.
Section 9.3. Force Majeure. In case by reason of force majeure either party hereto shall be rendered unable wholly or in part to carry out its obligations under this Agreement, then except as otherwise expressly provided in this Agreement, if such party shall give notice and full particulars of such force majeure in writing to the other party within a reasonable time after occurrence of the event or cause relied on, the obligations of the party giving such notice, other than the obligation of the Borrower to make the payments required under the terms hereof or of the Note, so far as they are affected by such force majeure, shall be suspended during the continuance of the inability then claimed which shall include a reasonable time for the removal of the effect thereof, but for no longer period, and such parties shall endeavor to remove or overcome such inability with all reasonable dispatch. The term "force majeure", as employed herein, means acts of God, strikes, lockouts or other industrial disturbances, acts of the public enemy, orders of any kind of the Government of the United States, of the State or any civil or military authority, insurrections, riots, epidemics, landslides, lightning, earthquakes, volcanoes, fires, hurricanes, tornadoes, storms, floods, washouts, droughts, arrests, restraining of government and people, civil disturbances, explosions, partial or entire failure of utilities, shortages of labor, material, supplies or transportation, or any other similar or different cause not reasonably within the control of the party claiming such inability. It is understood and agreed that the settlement of existing or impending strikes, lockouts or other industrial disturbances shall be entirely within the discretion of the party having the difficulty and that the above requirements that any force majeure shall be reasonably beyond the control of the party and shall be remedied with all reasonable dispatch shall be deemed to be fulfilled even though such existing or impending strikes, lockouts and other industrial disturbances may not be settled and could have been settled by acceding to the demands of the opposing person or persons.
Section 9.4. Amendments. This Agreement may be amended only with the concurring written consent of the Trustee and, if required by the Indenture, of the owners of the Bonds given in accordance with the provisions of the Indenture.
Section 9.5. Notices. All notices, certificates or other
communications hereunder shall be sufficiently given and shall be deemed
given when delivered or when mailed by registered or certified mail,
postage prepaid, addressed as follows: if to the Authority, at 845 Brook
Street, Rocky Hill, Connecticut 06067, Attention: Program Manager - Loan
Administration; if to the Borrower, c/o Northeast Utilities Service Company
at 107 Selden Street, Berlin, Connecticut 06037, Attention: Assistant
Treasurer; if to the Remarketing Agent, Goldman Sachs & Co., 85 Broad
Street, New York, New York 10004, Attention: Municipal Bond Department; if
to the Paying Agent, Shawmut Bank Connecticut, National Association, 777
Main Street, Hartford, Connecticut 06115, Attention: Corporate Trust
Department; and if to the Trustee, Shawmut Bank Connecticut, National
Association, 777 Main Street, Hartford, Connecticut 06115, Attention:
Corporate Trust Department. A duplicate copy of each notice, certificate
or other communication given hereunder by either the Authority or the
Borrower to the other shall also be given to the Trustee. The Authority,
the Borrower, the Remarketing Agent, the Paying Agent and the Trustee may,
by notice given hereunder, designate any further or different addresses to
which subsequent notices, certificates or other communications shall be
sent.
Section 9.6. Prior Agreements Superseded. This Agreement, together with all agreements executed by the parties concurrently herewith or in conjunction with the sale of the Bonds, shall completely and fully supersede all other prior understandings or agreements, both written and oral, between the Authority and the Borrower relating to the lending of money and the Project, including those contained in any commitment letter executed in anticipation of the issuance of the Bonds.
Section 9.7. Execution of Counterparts. This Agreement may be executed simultaneously in several counterparts each of which shall be an original and all of which shall constitute but one and the same instrument.
Section 9.8. Time. All references to times of day in this Agreement are references to New York City time.
IN WITNESS WHEREOF, the Authority has caused this Agreement to be executed in its corporate name by a duly Authorized Representative, and the Borrower has caused this Agreement to be executed in its corporate name by its duly authorized officer all as of the date first above written.
Connecticut Development Authority
By /s/ Stanley R. Killinger Name: Stanley R. Killinger Authorized Representative |
The Connecticut Light and Power Company
By /s/ Bruce F. Garelick Name: Bruce F. Garelick Title: Assistant Treasurer |
APPENDIX B
Description of Project Equipment and Project Realty
Exhibit 4.2.23
LETTER OF CREDIT
AND REIMBURSEMENT AGREEMENT
Dated as of September 1, 1993
Among
THE CONNECTICUT LIGHT AND
POWER COMPANY
as Account Party
DEUTSCHE BANK AG, NEW YORK BRANCH
as Issuing Bank and as Agent
BANK OF MONTREAL
CREDIT SUISSE
as Co-Agents
and
THE PARTICIPATING BANKS
REFERRED TO HEREIN
Relating to
Connecticut Development Authority
$245,500,000 Pollution Control Revenue Refunding Bonds
(The Connecticut Light and Power Company Project - 1993A Series)
TABLE OF CONTENTS
Section Page
PRELIMINARY STATEMENT
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01 Certain Defined Terms . . . . . . . . . . . . 2
1.02 Computation of Time Periods . . . . . . . . . 15
1.03 Accounting Terms. . . . . . . . . . . . . . . 15
1.04 Computations of Outstandings. . . . . . . . . 15
ARTICLE II
THE LETTER OF CREDIT
2.01 The Letter of Credit. . . . . . . . . . . . . 16
2.02 Termination of the Commitments. . . . . . . . 16
2.03 Commissions and Fees . . . . . . . . . . . . 16
2.04 Reinstatement of the Letter of Credit . . . . 16
2.05 Extension of the Stated Termination Date. . . 18
ARTICLE III
REIMBURSEMENT AND ADVANCES
3.01 Reimbursement on Demand . . . . . . . . . . . 18
3.02 Advances . . . . . . . . . . . . . . . . . . 19
3.03 Interest on Advances. . . . . . . . . . . . . 20
3.04 Conversion of Term Advances . . . . . . . . . 22
3.05 Other Terms Relating to the
Making and Conversion of Advances . . . . . . 22
3.06 Prepayment of Advances. . . . . . . . . . . . 23
3.07 Participation; Reimbursement of Issuing Bank. 24
ARTICLE IV
PAYMENTS
4.01 Payments and Computations . . . . . . . . . . 26
4.02 Default Interest. . . . . . . . . . . . . . . 28
4.03 Yield Protection. . . . . . . . . . . . . . . 28
4.04 Sharing of Payments, Etc. . . . . . . . . . . 33
4.05 Taxes . . . . . . . . . . . . . . . . . . . . 34
4.06 Obligations Absolute. . . . . . . . . . . . . 36
4.07 Evidence of Indebtedness . . . . . . . . . . 37
ARTICLE V
CONDITIONS PRECEDENT
5.01 Conditions Precedent to the Issuance of
the Letter of Credit . . . . . . . . . . . . 38
5.02 Additional Conditions Precedent to the Issuance of
the Letter of Credit . . . . . . . . . . . . 41
5.03 Conditions Precedent to Initial Advances
and Conversions of Advances . . . . . . . . 42
5.04 Conditions Precedent to Term Advances . . . . 42
5.05 Reliance on Certificates. . . . . . . . . . . 43
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.01 Representations and Warranties of the Account Party 43
ARTICLE VII
COVENANTS OF THE ACCOUNT PARTY
7.01 Affirmative Covenants . . . . . . . . . . . . 48
7.02 Negative Covenants. . . . . . . . . . . . . . 51
7.03 Reporting Obligations . . . . . . . . . . . . 56
ARTICLE VIII
DEFAULTS
8.01 Events of Default . . . . . . . . . . . . . . 59
8.02 Remedies Upon Events of Default . . . . . . . 61
ARTICLE IX
THE AGENT, THE CO-AGENTS, THE PARTICIPATING BANKS
AND THE ISSUING BANK
9.01 Authorization of Agent; Actions of Agent
and Issuing Bank . . . . . . . . . . . . . . 63
9.02 Reliance, Etc.. . . . . . . . . . . . . . . . 63
9.03 The Agent, the Co-Agents, the Issuing Bank and Affiliates
64
9.04 Participating Bank Credit Decision. . . . . . 64
9.05 Indemnification . . . . . . . . . . . . . . . 65
9.06 Successor Agent . . . . . . . . . . . . . . . 65
9.07 Issuing Bank. . . . . . . . . . . . . . . . . 65
ARTICLE X
MISCELLANEOUS
10.01 Amendments, Etc.. . . . . . . . . . . . . . . 66
10.02 Notices, Etc. . . . . . . . . . . . . . . . . 67
10.03 No Waiver of Remedies . . . . . . . . . . . . 68
10.04 Costs, Expenses and Indemnification . . . . . 68
10.05 Right of Set-Off. . . . . . . . . . . . . . . 70
10.06 Binding Effect; Assignments and Participants. 71
10.07 Relation of the Parties; No Beneficiary . . . 72
10.08 Issuing Bank Not Liable . . . . . . . . . . . 72
10.09 Confidentiality . . . . . . . . . . . . . . . 73
10.10 Waiver of Jury Trial. . . . . . . . . . . . . 74
10.11 Governing Law . . . . . . . . . . . . . . . . 74
10.12 Execution in Counterparts . . . . . . . . . . 75
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SCHEDULES
Schedule I - Applicable Lending Offices Schedule II - Pending Actions
EXHIBITS
Exhibit 1.01A - Form of Letter of Credit
Exhibit 1.01B - Form of Participation Assignment
Exhibit 1.01C - Form of Pledge Amendment
Exhibit 5.01A - Form of Opinion of Day, Berry & Howard,
counsel to the Account Party
Exhibit 5.01B - Form of Opinion of King & Spalding,
special New York counsel to the Agent and the
Issuing Bank
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LETTER OF CREDIT AND
REIMBURSEMENT AGREEMENT
Dated as of September 1, 1993
THIS LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT (this Agreement ) is
made by and among:
(i) THE CONNECTICUT LIGHT AND POWER COMPANY, a corporation duly organized and validly existing under the laws of the State of Connecticut (the Account Party );
(ii) DEUTSCHE BANK AG, NEW YORK BRANCH ( Deutsche Bank ), as issuer of the Letter of Credit (the Issuing Bank );
(iii) BANK OF MONTREAL and CREDIT SUISSE, as Co-Agents (the Co- Agents );
(iv) The Participating Banks (as hereinafter defined) from time to time party hereto; and
(v) Deutsche Bank as agent (together with any successor agent hereunder, the Agent ) for such Participating Banks and the Issuing Bank.
PRELIMINARY STATEMENT
The Connecticut Development Authority (the Issuer ) proposes to issue, pursuant to an Indenture of Trust, dated as of September 1, 1993 (as supplemented or amended from time to time with the written consent of the Issuing Bank, the Indenture ), made to Shawmut Bank Connecticut, National Association, as trustee (such entity, or its successor as trustee, being the Trustee ), $245,500,000 aggregate principal amount of its Pollution Control Revenue Refunding Bonds (The Connecticut Light and Power Company Project - 1993A Series) (the Bonds ). Pursuant to the Indenture and the Loan Agreement, dated as of September 1, 1993, between the Issuer and the Account Party (the Loan Agreement ), the Account Party has requested the Issuing Bank to issue its irrevocable letter of credit in favor of the Paying Agent (as defined below), in substantially the form of Exhibit 1.01A hereto (such letter of credit, as it may from time to time be extended or modified pursuant to the terms of this Agreement, being the Letter of Credit ), in the amount of $249,133,000 (the Stated Amount ), of which (i) $245,500,000 shall support the payment of principal of the Bonds (or the portion of the purchase or redemption price of the Bonds corresponding to principal), (ii) $3,633,000 shall support the payment of up to 45 days' interest on the principal amount of the Bonds (or the portion of the purchase or redemption price of the Bonds corresponding to interest), computed at a maximum interest rate of 12% per annum on the basis of the actual days elapsed and a year of 365 or 366 days (as applicable) and (iii) $0.00 shall support the payment of premium on the Bonds. The Issuing Bank has agreed to issue the Letter of Credit subject to the terms and conditions set forth herein (including the terms and conditions relating to the rights and obligations of the Participating Banks).
NOW, THEREFORE, in consideration of the premises and in order to induce the Issuing Bank to issue the Letter of Credit and the Participating Banks to participate in the Letter of Credit and make advances hereunder, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. In addition to the terms defined in the Preliminary Statement hereto, as used in this Agreement, the following terms shall have the following meanings (such meanings to be applicable to the singular and plural forms of the terms defined):
Advances means Initial Advances and Term Advances, without differentiation; individually, an Advance .
Affiliate means, with respect to any Person, any other Person directly or indirectly controlling (including, but not limited to all directors and officers of such Person), controlled by, or under direct or indirect common control with such Person. A Person shall be deemed to control another entity if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such entity, whether through the ownership of voting securities, by contract or otherwise.
Alternate Base Rate means, for any Interest Period or any other period, a fluctuating interest rate per annum equal at all times to the highest from time to time of:
(a) the rate of interest announced publicly by Deutsche Bank in New York, New York, from time to time, as Deutsche Bank's prime rate; and
(b) 1/2 of one percent per annum above the Federal Funds Rate from time to time.
Each change in the Alternate Base Rate shall take effect concurrently with any change in such prime rate or Federal Funds Rate, as the case may be.
Applicable Lending Office means, with respect to each Participating Bank, (i)(A) such Participating Bank's Domestic Lending Office in the case of a Base Rate Advance and (B) such Participating Bank's Eurodollar Lending Office in the case of a Eurodollar Rate Advance, in each case as specified opposite such Participating Bank's name on Schedule I hereto (in the case of a Participating Bank initially party to this Agreement) or in the Participation Assignment pursuant to which such Participating Bank became a Participating Bank (in the case of any other Participating Bank), or (ii) such other office or affiliate of such Participating Bank as such Participating Bank may from time to time specify to the Account Party and the Agent.
Available Amount in effect at any time means the maximum aggregate amount available to be drawn at such time under the Letter of Credit, the determination of such maximum amount to assume compliance with all conditions for drawing and no reduction for (i) any amount drawn by the Paying Agent to make a regularly scheduled payment of interest on the Bonds (unless such amount will not be reinstated under the Letter of Credit) or (ii) any amount not available to be drawn because Bonds are held by or for the account of the Account Party and/or in pledge for the benefit of the Issuing Bank.
Base Rate Advance means an Advance in respect of which the Account Party has selected in accordance with Article III hereof, or this Agreement otherwise provides for, interest to be computed on the basis of the Alternate Base Rate.
Bonds has the meaning assigned to that term in the Preliminary Statement.
Business Day means a day of the year that is not a Saturday or Sunday or a day on which banks are authorized to close in New York City and, (i) if the applicable Business Day relates to any Eurodollar Rate Advance, is a day on which dealings are carried on in the London interbank market and/or (ii) if the applicable Business Day relates to any action to be taken by, or notice furnished to or by, or payment to be made to or by, the Trustee, the Paying Agent or the Remarketing Agent, is a day on which (A) banks located in Hartford, Connecticut and New York, New York are not required or authorized to remain closed, (B) banking institutions in all of the cities in which the principal offices of the Issuing Bank, the Trustee, the Paying Agent and, if applicable, the Remarketing Agent are located are not required or authorized to remain closed and (C) the New York Stock Exchange, Inc. is not closed.
CL&P Indenture has the meaning assigned to that term
in Section 7.02(a)(i)(A) hereof.
Closing Date means the Business Day upon which each of
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the conditions precedent enumerated in Sections 5.01 and 5.02 hereof shall be fulfilled to the satisfaction of the Agent, the Issuing Bank, the Participating Banks and the Account Party. All transactions contemplated to occur on the Closing Date shall occur contemporaneously on or prior to November 15, 1993, at the offices of King & Spalding, 120 West 45th Street, New York, New York 10036, at 10:00 A.M. (New York City time), or at such other place and time as the parties hereto may mutually agree.
Collateral means all of the collateral in which liens, mortgages or security interests are purported to be granted by any or all of the Security Documents.
Commitment means, for each Participating Bank, such Participating Bank's Participation Percentage of the Available Amount. Commitments shall refer to the aggregate of the Commitments.
Confidential Information has the meaning assigned to that term in Section 10.09 hereof.
Consolidated Capitalization means, for any period, the
aggregate of all amounts that would, in accordance with generally accepted
accounting principles and consistent with those applied in the preparation
of the Account Party's consolidated financial statements included in its
Annual Report on Form 10-K for the year ended December 31, 1992, appear on
the Account Party's consolidated balance sheet as the sum of (i) the total
principal amount of all long-term Debt of the Account Party and its
Subsidiaries (excluding, however, Debt not to exceed $400,000,000 existing
under any nuclear fuel financing so long as the proceeds of such Debt are
used solely to finance the purchase and carrying of nuclear fuel and so
long as the appropriate regulatory authorities have not taken any action
which would not allow the costs with respect to such financing to be
recovered through the rate making process), (ii) the aggregate of the par
value of, or stated capital represented by, the outstanding shares of all
classes of common and preferred shares of the Account Party and its
Subsidiaries, (iii) the consolidated surplus of the Account Party and its
Subsidiaries, paid-in, earned and other, if any, and (iv) the excess, if
any, of (A) the aggregate unpaid principal amount of all short-term Debt of
the Account Party and its Subsidiaries over (B) 10% of the sum of clauses
(i), (ii) and (iii) above.
Consolidated Common Equity means, for any period, an amount equal to the sum of the aggregate of the par value of, or stated capital represented by, the outstanding common shares of the Account Party and its Subsidiaries and the surplus, paid-in, earned and other, if any, of the Account Party and its Subsidiaries as determined on a consolidated basis in accordance with generally accepted accounting principles.
Conversion , Convert or Converted each refers to a conversion of Term Advances pursuant to Section 3.04 hereof, including, but not limited to any selection of a longer or shorter Interest Period to be applicable to such Term Advances or any conversion of a Term Advance as described in Section 3.04(c) hereof.
Credit Termination Date means the date on which the Letter of Credit shall terminate in accordance with its terms.
Debt means, for any Person, without duplication, (i) indebtedness of such Person for borrowed money, including but not limited to obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (ii) obligations of such Person to pay the deferred purchase price of property or services (excluding any obligation of such Person to the United States Department of Energy or its successor with respect to disposition of spent nuclear fuel burned prior to April 3, 1983), (iii) obligations of such Person as lessee under leases which shall have been or should be, in accordance with generally accepted accounting principles, recorded as capital leases, (iv) obligations under direct or indirect guaranties in respect of, and obligations (contingent or otherwise) to purchase or otherwise acquire, or otherwise to assure a creditor against loss in respect of, indebtedness or obligations of others of the kinds referred to in clauses (i) through (iii), above, and (v) liabilities in respect of unfunded vested benefits under ERISA Plans.
Default Rate means a fluctuating interest rate equal at all times to 2% per annum above the Alternate Base Rate in effect from time to time.
ERISA means the Employee Retirement Income Security Act of 1974, as amended from time to time.
ERISA Affiliate means, with respect to any Person, any trade or business (whether or not incorporated) which is a commonly controlled entity of the Account Party within the meaning of the regulations under Section 414 of the Internal Revenue Code of 1986, as amended from time to time.
ERISA Multiemployer Plan means a multiemployer plan subject to Title IV of ERISA.
ERISA Plan means an employee benefit plan (other than an ERISA Multiemployer Plan) maintained for employees of the Account Party or any ERISA Affiliate and covered by Title IV of ERISA.
ERISA Plan Termination Event means (i) a Reportable
Event described in Section 4043 of ERISA and the regulations issued
thereunder (other than a Reportable Event not subject to the provision for
30-day notice to the PBGC under such regulations) with respect to an ERISA
Plan or an ERISA Multiemployer Plan, or (ii) the withdrawal of the Account
Party or any of its ERISA Affiliates from an ERISA Plan or an ERISA
Multiemployer Plan during a plan year in which it was a substantial
employer as defined in Section 4001(a)(2) of ERISA, or (iii) the filing of
a notice of intent to terminate an ERISA Plan or an ERISA Multiemployer
Plan or the treatment of an ERISA Plan or an ERISA Multiemployer Plan under
Section 4041 of ERISA, or (iv) the institution of proceedings to terminate
an ERISA Plan or an ERISA Multiemployer Plan by the PBGC, or (v) any other
event or condition which might constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any ERISA Plan or ERISA Multiemployer Plan.
Eurocurrency Liabilities has the meaning assigned to that term in Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time.
Eurodollar Rate means for any Interest Period for any Eurodollar Rate Advances comprising part of the same Term Borrowing, an interest rate per annum equal at all times during such Interest Period to the sum of:
(i) the rate per annum (rounded upward to the
nearest whole multiple of 1/100 of 1% per annum, if such rate is not such a
multiple) determined by the Agent at which deposits in United States
dollars in amounts comparable to the Eurodollar Rate Advance of Deutsche
Bank comprising part of such Term Borrowing and for comparable periods as
such Interest Period are offered by the principal office of Deutsche Bank
in London, England to prime banks in the London interbank market at 11:00
A.M. (London time) two Business Days before the first day of such Interest
Period, plus
(ii) 0.625% per annum.
Eurodollar Rate Advance means an Advance in respect of which the Account Party has selected in accordance with Article III hereof, and this Agreement provides for, interest to be computed on the basis of the Eurodollar Rate.
Eurodollar Reserve Percentage of any Participating Bank for each Interest Period for each Eurodollar Rate Advance means the reserve percentage applicable during such Interest Period (or if more than one such percentage shall be so applicable, the daily average of such percentages for those days in such Interest Period during which any such percentage shall be so applicable) under Regulation D or other regulations issued from time to time by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement, without benefit of or credit for proration, exemptions or offsets) for such Participating Bank with respect to liabilities or assets consisting of or including eurocurrency liabilities having a term equal to such Interest Period.
Event of Default has the meaning assigned to that term
in Section 8.01.
Federal Funds Rate means, for any period, a
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fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published on the next succeeding Business Day, the average of the quotations for such day on such transactions received by the Agent from three Federal funds brokers of recognized standing selected by it.
FERC means the Federal Energy Regulatory Commission.
Governmental Approval means any authorization,
consent, approval, license, permit, certificate, exemption of, or filing or
registration with, any governmental authority or other legal or regulatory
body (including, without limitation, the Securities and Exchange
Commission, the FERC, the Nuclear Regulatory Commission and the Connecticut
Department of Public Utility Control), required in connection with either
(i) the execution, delivery or performance of any Loan Document or Related
Document or the grant and perfection of any lien or security interest
contemplated by the Security Documents or (ii) the nature of the Account
Party's or any Principal Subsidiary's business as conducted or the nature
of the property owned or leased by it.
Hazardous Substance means any waste, substance or material identified as hazardous, dangerous or toxic by any office, agency, department, commission, board, bureau or instrumentality of the United States of America or of the State or locality in which the same is located having or exercising jurisdiction over such waste, substance or material.
Indemnified Person has the meaning assigned to that term in Section 10.04(b) hereof.
Indenture has the meaning assigned to that term in the Preliminary Statement.
Indenture Documents means, collectively, the Indenture and the Loan Agreement, together with all amendments, modifications and supplements thereto; individually, an Indenture Document .
Information Memorandum means the Confidential Information Memorandum, dated August 1993 regarding the Account Party and the facilities provided for herein as distributed to the Issuing Bank and the Participating Banks, including, without limitation, the financial information concerning the Account Party set forth therein.
Initial Advance has the meaning assigned to that term in Section 3.02(a) hereof.
Initial Repayment Date has the meaning assigned to
that term in Section 3.02(a) hereof.
Interest Component has the meaning assigned to that
term in the Letter of Credit.
Interest Drawing has the meaning assigned to that term
in the Letter of Credit.
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Interest Period has the meaning assigned to that term in Section 3.03(b) hereof.
Issuer has the meaning assigned to that term in the Preliminary Statement.
Issuer Resolution means the resolution adopted by the Issuer that authorized the issuance of the Bonds, approved the terms and provisions of the Bonds, and approved those of the documents related to the Bonds to which the Issuer is a party.
Letter of Credit has the meaning assigned to that term in the Preliminary Statement.
Lien has the meaning assigned to that term in Section
7.02(a) hereof.
Loan Agreement has the meaning assigned to that term
in the Preliminary Statement.
Loan Documents means this Agreement and the Security
Documents.
Majority Lenders means on any date of determination,
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(i) the Issuing Bank and (ii) Participating Banks who, collectively, on such date, have Participation Percentages in the aggregate of at least 66-2/3%. Determination of those Participating Banks satisfying the criteria specified above for action by the Majority Lenders shall be made by the Agent and shall be conclusive and binding on all parties absent manifest error.
Moody's means Moody's Investors Service, Inc. or any successor thereto.
NU means Northeast Utilities, an unincorporated voluntary business association organized under the laws of the Commonwealth of Massachusetts.
Participant shall have the meaning assigned to that term in Section 10.06(b) hereof.
Participating Banks means the Persons listed on the signature pages hereof following the heading Participating Banks and any other Person who becomes a party hereto pursuant to Section 10.06 hereof.
Participation Assignment means a participation assignment entered into pursuant to Section 10.06 hereof by any Participating Bank and an assignee, in substantially the form of Exhibit 1.01B hereto.
Participation Percentage means, as of any date of
determination (i) with respect to a Participating Bank initially a party
hereto, the percentage set forth opposite such Participating Bank's name on
the signature pages hereof, except as provided in clause (iii), below, (ii)
with respect to a Participating Bank that became a party hereto by
operation of Section 10.06(a) hereof, the Participation Percentage stated
to be assumed by such assignee Participating Bank in the relevant
Participation Assignment, except as provided in clause (iii), below, and
(iii) with respect to any Participating Bank described in clauses (i) and
(ii), above, that assigns a percentage of its interests in accordance with
Section 10.06(a) hereof, its Participation Percentage as reduced by the
percentage so assigned.
Paying Agent means (i) Shawmut Bank Connecticut, National Association, as the initial paying agent for the Bonds under the Indenture Documents, and (ii) any successor paying agent for the Bonds under the Indenture Documents.
PBGC means the Pension Benefit Guaranty Corporation (or any successor entity) established under ERISA.
Person means an individual, partnership, corporation (including a business trust), joint stock company, trust, estate, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof.
Pledge Agreement means the Pledge Agreement, dated as of September 1, 1993, by the Account Party in favor of the Issuing Bank for the benefit of the Agent, the Co-Agents and the Participating Banks, in substantially the form of Exhibit 1.01C hereto, and as the same may from time to time be amended, modified or supplemented.
Pledged Bonds shall have the meaning assigned to that
term in the Pledge Agreement.
Premium Component has the meaning assigned to that
term in the Letter of Credit.
Principal Component has the meaning assigned to that
term in the Letter of Credit.
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Principal Subsidiary means a Subsidiary, whether owned directly or indirectly by the Account Party, which, with respect to the Account Party and its Subsidiaries taken as a whole, represents a material portion of the Account Party's consolidated assets or consolidated net income (or loss), (it being understood that, as of the date of this Agreement, the Account Party has no Principal Subsidiaries).
Purchase Contract means the Bond Purchase Agreement, dated September 21, 1993, among the Issuer, the Account Party and Goldman, Sachs & Co., Individually and as Representative of Advest, Inc., Greenwich Partners, Inc. and U.S. Securities, Inc.
Recipient has the meaning assigned to that term in
Section 10.09 hereto.
Regulatory Transaction means any merger or consolidation of the Account Party with or into, or any purchase or acquisition by the Account Party of the assets of (and any related assumption by the Account Party of the liabilities of) any utility company or utility-related company, if such transaction is undertaken pursuant to an order or request of, or otherwise in fulfillment of the stated goals of, a utility regulatory agency having jurisdiction over NU or any of its Subsidiaries.
Regulatory Transaction Entity means any utility company or utility-related company (other than the Account Party) that is the subject of a Regulatory Transaction.
Related Documents means the Letter of Credit, the Bonds, the Indenture Documents, any Remarketing Agreement and the Purchase Contract.
Remarketing Agent has the meaning assigned to that term in the Indenture Documents.
Remarketing Agreement means (i) the Remarketing Agreement, dated as of September 1, 1993, among the Issuer, the Account Party and Morgan Stanley & Co. Incorporated, as the same may be amended from time to time; and (ii) any successor remarketing agreement between the Account Party and a successor Remarketing Agent as shall be in effect from time to time in accordance with the terms of the Indenture Documents.
S&P means Standard and Poor's Corporation or any successor thereto.
Second Mortgage means the Open End Mortgage and Trust Agreement made as of October 1, 1986, by and between the Account Party and Bank of Boston Connecticut, as trustee, as amended through the date hereof to secure the obligations of the Account Party hereunder and as the same may be further amended, modified or supplemented from time to time.
Security Documents means the Pledge Agreement and the Indenture Documents, but shall not include the Second Mortgage.
Stated Amount has the meaning assigned to that term in the Preliminary Statement hereto.
Stated Termination Date means the expiration date specified in clause (i) of the first paragraph of Paragraph (1) of the Letter of Credit, as such date may be extended pursuant to Section 2.05 hereof.
Subsidiary shall mean, with respect to any Person (the Parent ), any corporation, association or other business entity of which securities or other ownership interests representing 50% or more of the ordinary voting power are, at the time as of which any determination is being made, owned or controlled by the Parent or one or more Subsidiaries of the Parent or by the Parent and one or more Subsidiaries of the Parent.
Tender Drawing has the meaning assigned to that term
in the Letter of Credit.
Term Advance has the meaning assigned to that term in
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Section 3.02(b) hereof, and refers to a Base Rate Advance or a Eurodollar Rate Advance (each of which shall be a Type of Term Advance). The Type of a Term Advance may change from time to time when such Term Advance is Converted. For purposes of this Agreement, all Term Advances of a Participating Bank (or portions thereof) made as, or Converted to, the same Type and Interest Period on the same day shall be deemed a single Term Advance by such Participating Bank until repaid or next Converted.
Term Borrowing means a borrowing consisting of Term Advances of the same Type and Interest Period made on the same day by the Participating Banks, ratably in accordance with their respective Participation Percentages. A Term Borrowing may be referred to herein as being a Type of Term Borrowing, corresponding to the Type of Term Advances comprising such Term Borrowing. For purposes of this Agreement, all Term Advances made as, or Converted to, the same Type and Interest Period on the same day shall be deemed a single Term Borrowing until repaid or next Converted.
Termination Date means the Credit Termination Date or the earlier date of termination of the Commitments pursuant to Sections 2.02 or 8.02 hereunder.
Trustee has the meaning assigned to that term in the Preliminary Statement hereto.
Type has the meaning assigned to such term in the definitions of Term Advance and Term Borrowing herein.
Unmatured Default means the occurrence and continuance of an event which, with the giving of notice or lapse of time or both, would constitute an Event of Default.
SECTION 1.02. Computation of Time Periods. In the computation of periods of time under this Agreement any period of a specified number of days or months shall be computed by including the first day or month occurring during such period and excluding the last such day or month. In the case of a period of time from a specified date to or until a later specified date, the word from means from and including and the words to and until each means to but excluding .
SECTION 1.03. Accounting Terms. All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles applied on a basis consistent with the application employed in the preparation of the Account Party's consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 1992.
SECTION 1.04. Computations of Outstandings. Whenever reference is made in this Agreement to the principal amount outstanding on any date under this Agreement, such reference shall refer to the sum of (i) the Available Amount on such date, (ii) the aggregate principal amount of all Advances outstanding on such date and (iii) the aggregate amount of all demand loans under Section 3.01 hereunder on such date, in each case after giving effect to all transactions to be made on such date and the application of the proceeds thereof.
ARTICLE II
THE LETTER OF CREDIT
SECTION 2.01. The Letter of Credit. The Issuing Bank agrees, on the terms and conditions hereinafter set forth (including, without limitation, the applicable conditions precedent set forth in Article V hereof), to issue the Letter of Credit to the Paying Agent, upon not less than three Business Days prior notice from the Account Party, on the Closing Date.
SECTION 2.02. Termination of the Commitments. The obligation of the Issuing Bank to issue the Letter of Credit shall automatically terminate if not issued on or before 5:00 P.M. (New York City time) on November 15, 1993.
SECTION 2.03. Commissions and Fees. (a) The Account Party hereby agrees to pay to the Agent, for the account of the Participating Banks ratably in accordance with their respective Participation Percentages, a letter of credit commission on the Available Amount in effect from time to time from the date of issuance of the Letter of Credit until the Termination Date (disregarding for such purpose any temporary diminution thereof arising from drawings under the Letter of Credit to pay interest (or purchase price corresponding to interest) on the Bonds, regardless of whether the amount so drawn shall be thereafter reinstated), at a rate equal to 0.40% per annum, payable quarterly in arrears on the first day of March, June, September and December in each year, commencing on the first such date to occur following the date of issuance of the Letter of Credit, and on the Credit Termination Date.
(b) The Account Party also agrees to pay to the Agent, for the account of the Agent and the Issuing Bank, such other fees as may be agreed upon from time to time by the Account Party and the Agent and the Issuing Bank.
SECTION 2.04. Reinstatement of the Letter of Credit. (a) The Interest Component and the Principal Component shall, from time to time, be reinstated by the Issuing Bank in accordance with, and only to the extent provided in, the Letter of Credit. In no event shall reductions in the Premium Component be reinstated.
(b) Interest Component. With respect to reinstatement of reductions in the Interest Component resulting from Interest Drawings:
(i) The Issuing Bank may only deliver to the Paying Agent any notice of non-reinstatement pursuant to Paragraph 5(i)(A) of the Letter of Credit if (A) the Issuing Bank and/or the Participating Banks have not been reimbursed in full by the Account Party for one or more drawings, together with interest, if any, owing thereon pursuant to this Agreement, or (B) an Event of Default has occurred and is then continuing.
(ii) If, subsequent to any such delivery of a notice of non-reinstatement, the circumstances giving rise to the delivery of such notice of non-reinstatement shall have ceased to exist (whether as a result of reimbursement of unreimbursed drawings, or waiver or cure of an Event of Default, or otherwise), then, provided that no other Event of Default shall have occurred and be continuing, the Issuing Bank shall deliver to the Paying Agent, by hand delivery or facsimile transmission, a Notice of Reinstatement in the form of Exhibit 5 to the Letter of Credit reinstating that portion of the Interest Component in respect of which such notice of non-reinstatement was given.
(c) Principal Component. With respect to reinstatement of a reduction in the Principal Component resulting from any Tender Drawing, IF:
(i) such reduction has not been reinstated pursuant to Paragraph 5(ii)(A) of the Letter of Credit;
(ii) the Issuing Bank and/or the Participating Banks shall have been reimbursed by the Account Party for such Tender Drawing;
(iii) any demand loan(s) and Advance(s) made in respect of such Tender Drawing shall have been repaid by the Account Party, together with any interest thereon and any other amounts payable hereunder in connection therewith; AND
(iv) no Event of Default shall have occurred and then be continuing;
THEN, the Issuing Bank shall deliver to the Paying Agent, by hand delivery or facsimile transmission, a Notice of Reinstatement in the form of Exhibit 5 to the Letter of Credit reinstating the Principal Component to the extent of such Tender Drawing.
SECTION 2.05. Extension of the Stated Termination Date. Unless the Letter of Credit shall have previously expired in accordance with its terms, at least 60 days but not more than 90 days before each anniversary date of this Agreement, the Account Party may, by notice to the Agent (any such notice being irrevocable), request the Issuing Bank and the Participating Banks to extend the Stated Termination Date of the Letter of Credit for a period of one year. If the Account Party shall make such request, the Agent shall promptly inform the Issuing Bank and the Participating Banks and, no later than 15 days prior to such anniversary date, the Agent shall notify the Account Party in writing (with a copy of such notice to the Trustee and the Paying Agent) if the Issuing Bank and all of the Participating Banks consent to such request and the conditions of such consent (including conditions relating to legal documentation). If such consent is granted, the Stated Termination Date as theretofore in effect shall be extended for one year, such extension to take effect on such anniversary date. The granting of any such consent shall be in the sole and absolute discretion of the Issuing Bank and all of the Participating Banks, and if the Agent shall not so notify the Account Party, such lack of notification shall be deemed to be a determination not to consent to such request.
ARTICLE III
REIMBURSEMENT AND ADVANCES
SECTION 3.01. Reimbursement on Demand. Subject to the provisions of Section 3.02 hereof, the Account Party hereby agrees to pay (whether with the proceeds of Initial Advances made pursuant to this Agreement or otherwise) to the Issuing Bank on demand (a) on and after each date on which the Issuing Bank shall pay any amount under the Letter of Credit pursuant to any draft, but only after so paid by the Issuing Bank, a sum equal to such amount so paid (which sum shall constitute a demand loan from the Issuing Bank to the Account Party from the date of such payment by the Issuing Bank until so paid by the Account Party), plus (b) interest on any amount remaining unpaid by the Account Party to the Issuing Bank under clause (a), above, from the date such amount becomes payable on demand until payment in full, at the Default Rate in effect from time to time. No reinstatement of the Interest Component or the Principal Component despite the failure by the Account Party to reimburse the Issuing Bank for any previous drawing to pay interest on the Bonds shall limit or impair the Account Party's obligations under this Section 3.01.
SECTION 3.02. Advances. Each Participating Bank agrees to make Initial Advances and Term Advances for the account of the Account Party from time to time upon the terms and subject to the conditions set forth in this Agreement.
(a) Initial Advances; Repayment of Initial Advances. If the
Issuing Bank shall honor any Tender Drawing and if the conditions precedent
set forth in Section 5.03 of this Agreement have been satisfied as of the
date of such honor, then, each Participating Bank's payment made to the
Issuing Bank pursuant to Section 3.07 hereof in respect of such Tender
Drawing shall be deemed to constitute an advance made for the account of
the Account Party by such Participating Bank (each such advance being an
Initial Advance made by such Participating Bank). Each Initial Advance
shall be made as a Base Rate Advance, shall bear interest at the Alternate
Base Rate and shall not be entitled to be Converted. Subject to Article
VIII of this Agreement, each Initial Advance and all interest thereon shall
be due and payable on the earlier to occur of (i) the date 30 days from the
date of such Initial Advance (such repayment date being the Initial
Repayment Date for such Initial Advance) and (ii) the Termination Date.
The Account Party may repay the principal amount of any Initial Advance
with (and to the extent of) the proceeds of a Term Advance made pursuant to
subsection (b), below, and may prepay Initial Advances in accordance with
Section 3.06 hereof.
(b) Term Advances; Repayment. Subject to the satisfaction
of the conditions precedent set forth in Section 5.04 hereof and the other
conditions of this subsection (b), each Participating Bank agrees to make
one or more advances for the account of the Account Party ( Term Advances )
on each Initial Repayment Date in an aggregate principal amount equal to
the amount of such Participating Bank's Initial Advances maturing on such
Initial Repayment Date. All Term Advances comprising a single Term
Borrowing shall be made upon written notice given by the Account Party to
the Agent not later than 11:00 A.M. (New York City time) (A) in the case of
a Term Borrowing comprised of Base Rate Advances, on the Business Day of
such proposed Term Borrowing and (B) in the case of a Term Borrowing
comprised of Eurodollar Rate Advances, three Business Days prior to the
date of such proposed Term Borrowing. The Agent shall notify each
Participating Bank of the contents of such notice promptly after receipt
thereof. Each such notice shall specify therein the following information:
(W) the date on which such Term Borrowing is to be made, (X) the principal
amount of Term Advances comprising such Term Borrowing, (Y) the Type of
Term Borrowing and (Z) the duration of the initial Interest Period, if
applicable, proposed to apply to the Term Advances comprising such Term
Borrowing. The proceeds of each Participating Bank's Term Advances shall
be applied solely to the repayment of the Initial Advances made by such
Participating Bank and shall in no event be made available to the Account
Party. The principal amount of each Term Advance, together with all
accrued and unpaid interest thereon, shall be due and payable on the
earlier to occur of (x) the same calendar date occurring 35 months
following the date upon which such Term Advance is made (or, if such month
does not have a corresponding date, on the last day of such month) and (y)
the Termination Date.
SECTION 3.03. Interest on Advances. The Account Party shall pay interest on the unpaid principal amount of each Advance from the date of such Advance until such principal amount is paid in full at the applicable rate set forth below:
(a) Alternate Base Rate. Except to the extent that the Account Party shall elect to pay interest on any Advance for any Interest Period pursuant to paragraph (c) of this Section 3.03, the Account Party shall pay interest on each Advance (including all Initial Advances) from the date thereof until the date such Advance is due, at a fluctuating interest rate per annum in effect from time to time equal to the Alternate Base Rate in effect from time to time. The Account Party shall pay interest on each Advance bearing interest in accordance with this subsection quarterly in arrears on the first day of March, June, September and December in each year and on the Termination Date or the earlier date for repayment of such Advance (including the Initial Repayment Date therefor, in the case of an Initial Advance).
(b) Interest Periods. Subject to the other requirements
of this Section 3.03, the Account Party may from time to time elect to have
the interest on all Term Advances comprising part of the same Term
Borrowing determined and payable for a specified period (an Interest
Period for such Term Advances) in accordance with paragraph (c) of this
Section 3.03. The first day of an Interest Period for such Term Advances
shall be the date such Advance is made or most recently Converted, which
shall be a Business Day. All Interest Periods shall end on or prior to the
Stated Termination Date. Any Interest Period for a Term Advance that would
otherwise end after the Termination Date or earlier date for the repayment
of such Advance shall be deemed to end on the Termination Date or such
earlier repayment date, as the case may be.
(c) Eurodollar Rate. Subject to the requirements of this Section 3.03 and Article V hereof, the Account Party may from time to time elect to have any Term Advances comprising part of the same Term Borrowing made as, or Converted to, Eurodollar Rate Advances. The Interest Period applicable to such Eurodollar Rate Advances shall be of one, two or three whole months' duration, as the Account Party shall select in its notice delivered to the Agent pursuant to Section 3.02(b) or 3.04 hereof, as applicable. If the Account Party shall have made such election, the Account Party shall pay interest on such Eurodollar Rate Advances at the Eurodollar Rate, for the applicable Interest Period for such Eurodollar Rate Advances, which interest shall be payable on the last day of such Interest Period and on the date for repayment or prepayment for such Eurodollar Rate Advances. Any Interest Period pertaining to Eurodollar Rate Advances that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of a calendar month.
(d) Interest Rate Determinations. The Agent shall give prompt notice to the Account Party and the Participating Banks of the Eurodollar Rate determined from time to time by the Agent to be applicable to each Eurodollar Rate Advance.
SECTION 3.04. Conversion of Term Advances. Subject to the satisfaction of the conditions precedent set forth in Section 5.03 hereof, the Account Party may elect to Convert one or more Term Advances of any Type to one or more Term Advances of the same or any other Type on the following terms and subject to the following conditions:
(a) Each Conversion shall be made as to all Term Advances comprising a single Term Borrowing upon written notice given by the Account Party to the Agent not later than 11:00 A.M. (New York City time) on the third Business Day prior to the date of the proposed Conversion. The Agent shall notify each Participating Bank of the contents of such notice promptly after receipt thereof. Each such notice shall specify therein the following information: (A) the date of such proposed Conversion (which in the case of Eurodollar Rate Advances shall be the last day of the Interest Period then applicable to such Term Advances to be Converted), (B) Type of, and Interest Period, if any, applicable to the Term Advances proposed to be Converted, (C) the aggregate principal amount of Term Advances proposed to be Converted, and (D) the Type of Term Advances to which such Term Advances are proposed to be Converted and the Interest Period, if any, to be applicable thereto.
(b) During the continuance of an Unmatured Default or an Event of Default, the right of the Account Party to Convert Term Advances to Eurodollar Rate Advances shall be suspended, and all Eurodollar Rate Advances then outstanding shall be Converted to Base Rate Advances on the last day of the Interest Period then in effect, if, on such day, an Unmatured Default or an Event of Default shall be continuing.
(c) If no notice of Conversion is received by the Agent as provided in subsection (a) above with respect to any outstanding Eurodollar Rate Advances, the Agent shall treat such absence of notice as a deemed notice of Conversion providing for such Advances to be Converted to Base Rate Advances on the last day of the Interest Period then in effect for such Eurodollar Rate Advances.
SECTION 3.05. Other Terms Relating to the Making and Conversion of Advances. (a) Notwithstanding anything in Section 3.02, 3.03 or 3.04, above, to the contrary:
(i) at no time shall more than six different Term Borrowings be outstanding hereunder; and
(ii) each Term Borrowing consisting of Eurodollar Rate Advances shall be in the aggregate principal amount of $10,000,000 or an integral multiple of $1,000,000 in excess thereof.
(b) Each notice of borrowing pursuant to Section 3.02(b) hereof and each notice of Conversion pursuant to Section 3.04 hereof shall be irrevocable and binding on the Account Party.
SECTION 3.06. Prepayment of Advances. (a) The Account Party shall have no right to prepay any principal amount of any Advances except in accordance with subsections (b) and (c) below.
(b) The Account Party may, upon at least one Business Day's
notice to the Agent stating the proposed date and aggregate principal
amount of the prepayment and the specific Initial Advances or Term
Borrowing(s) to be prepaid, and if such notice is given, the Account Party
shall, prepay, in whole or ratably in part, together with accrued interest
to the date of such prepayment on the principal amount prepaid and any
amounts due pursuant to Section 4.03, the outstanding principal amount of
(i) all Initial Advances made on the same date or (ii) all Term Advances
comprising the same Term Borrowing, in each case as the Account Party shall
designate in such notice; provided, however, that each partial prepayment
shall be in an aggregate principal amount not less than $10,000,000, or, if
less, the aggregate principal amount of all Advances then outstanding.
(c) Prior to or simultaneously with the resale of all of the Bonds purchased with the proceeds of a Tender Drawing, the Account Party shall prepay, or cause to be prepaid, in full, the then outstanding principal amount of all Initial Advances and of all Term Advances comprising the same Term Borrowing(s) arising pursuant to such Tender Drawing, together with all interest thereon to the date of such prepayment. If less than all of such Bonds are resold, then prior to or simultaneously with such resale the Account Party shall prepay or cause to be prepaid that portion of such Advances, together with all interest thereon to the date of such prepayment, equal to the then outstanding principal amount thereof multiplied by a fraction, the numerator of which shall be the principal amount of the Bonds resold and the denominator of which shall be the principal amount of all of the Bonds purchased with the proceeds of the relevant Tender Drawing.
SECTION 3.07. Participation; Reimbursement of Issuing Bank. (a)
The Issuing Bank hereby sells and transfers to each Participating Bank, and
each Participating Bank hereby acquires from the Issuing Bank, an undivided
interest and participation to the extent of such Participating Bank's
Participation Percentage in and to (i) the Letter of Credit, including the
obligations of the Issuing Bank under and in respect thereof and the
Account Party's reimbursement and other obligations in respect thereof and
(ii) each demand loan or deemed demand loan made by the Issuing Bank,
whether now existing or hereafter arising.
(b) If the Issuing Bank (i) shall not have been reimbursed in full for any payment made by the Issuing Bank under the Letter of Credit on the date of such payment or (ii) shall make any demand loan to the Account Party, the Issuing Bank shall promptly notify the Agent and the Agent shall promptly notify each Participating Bank of such non-reimbursement or demand loan and the amount thereof. Upon receipt of such notice from the Agent, each Participating Bank shall pay to the Issuing Bank, directly, an amount equal to such Participating Bank's ratable portion (according to such Participating Bank's Participation Percentage) of such unreimbursed amount or demand loan paid or made by the Issuing Bank, plus interest on such amount at a rate per annum equal to the Federal Funds Rate from the date of such payment by the Issuing Bank to the date of payment to the Issuing Bank by such Participating Bank. All such payments by each Participating Bank shall be made in United States dollars and in same day funds:
(x) not later than 2:45 P.M. (New York City time) on the day such notice is received by such Participating Bank if such notice is received at or prior to 12:30 P.M. (New York City time) on a Business Day; or
(y) not later than 12:00 Noon (New York City time) on the Business Day next succeeding the day such notice is received by such Participating Bank, if such notice is received after 12:30 P.M. (New York City time) on a Business Day.
If a Participating Bank shall have paid to the Issuing Bank its ratable portion of any unreimbursed amount or demand loan paid or made by the Issuing Bank, together with all interest thereon required by the second sentence of this subsection (b), such Participating Bank shall be entitled to receive its ratable share of all interest paid by the Account Party in respect of such unreimbursed amount or demand loan from the date paid or made by the Issuing Bank. If such Participating Bank shall have made such payment to the Issuing Bank, but without all such interest thereon required by the second sentence of this subsection (b), such Participating Bank shall be entitled to receive its ratable share of the interest paid by the Account Party in respect of such unreimbursed amount or demand loan only from the date it shall have paid all interest required by the second sentence of this subsection (b).
(c) Each Participating Bank's obligation to make each
payment to the Issuing Bank, and the Issuing Bank's right to receive the
same, shall be absolute and unconditional and shall not be affected by any
circumstance whatsoever, including, without limitation, the foregoing or
Section 4.06 hereof, or the occurrence or continuance of an Event of
Default, or the non- satisfaction of any condition precedent set forth in
Sections 5.03 or 5.04 hereof, or the failure of any other Participating
Bank to make any payment under this Section 3.07. Each Participating Bank
further agrees that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever.
(d) The failure of any Participating Bank to make any payment to the Issuing Bank in accordance with subsection (b) above, shall not relieve any other Participating Bank of its obligation to make payment, but neither the Issuing Bank nor any Participating Bank shall be responsible for the failure of any other Participating Bank to make such payment. If any Participating Bank shall fail to make any payment to the Issuing Bank in accordance with subsection (b) above, then such Participating Bank shall pay to the Issuing Bank forthwith on demand such corresponding amount together with interest thereon, for each day until the date such amount is repaid to the Issuing Bank at the Federal Funds Rate. Nothing herein shall in any way limit, waive or otherwise reduce any claims that any party hereto may have against any non-performing Participating Bank.
(e) If any Participating Bank shall fail to make any payment to the Issuing Bank in accordance with subsection (b) above, then, in addition to other rights and remedies which the Issuing Bank may have, the Agent is hereby authorized, at the request of the Issuing Bank, to withhold and to apply to the payment of such amounts owing by such Participating Bank to the Issuing Bank and any related interest, that portion of any payment received by the Agent that would otherwise be payable to such Participating Bank. In furtherance of the foregoing, if any Participating Bank shall fail to make any payment to the Issuing Bank in accordance with subsection (b), above, and such failure shall continue for five Business Days following written notice of such failure from the Issuing Bank to such Participating Bank, the Issuing Bank may acquire, or transfer to a third party in exchange for the sum or sums due from such Participating Bank, such Participating Bank's interest in the related unreimbursed amounts and demand loans and all other rights of such Participating Bank hereunder in respect thereof, without, however, relieving such Participating Bank from any liability for damages, costs and expenses suffered by the Issuing Bank as a result of such failure. The purchaser of any such interest shall be deemed to have acquired an interest senior to the interest of such Participating Bank and shall be entitled to receive all subsequent payments which the Issuing Bank or the Agent would otherwise have made hereunder to such Participating Bank in respect of such interest.
ARTICLE IV
PAYMENTS
SECTION 4.01. Payments and Computations. (a) The Account Party shall make each payment hereunder (i) in the case of reimbursement obligations pursuant to Section 3.01 hereof (excluding any portion thereof in respect of which an Initial Advance is to be made), not later than 2:30 P.M. (New York City time) on the day the related drawing under the Letter of Credit is paid by the Issuing Bank, and (ii) in all other cases, not later than 12:30 P.M. (New York City time) on the day when due, in each case in lawful money of the United States of America to the Agent at its address referred to in Section 10.02 hereof in immediately available funds. The Agent will promptly thereafter cause to be distributed like funds relating to the payment of reimbursements, principal, interest, fees or other amounts payable to the Issuing Bank and the Participating Banks to whom the same are payable, ratably and without offset or counterclaim except as provided in Section 3.07, at its address set forth in Section 10.02 hereof (in the case of the Issuing Bank) or for the account of their respective Applicable Lending Offices (in the case of the Participating Banks), in each case to be applied in accordance with the terms of this Agreement.
(b) The Account Party hereby authorizes the Issuing Bank, and each Participating Bank, if and to the extent payment owed to the Issuing Bank, or such Participating Bank, as the case may be, is not made when due hereunder, to charge from time to time against any or all of the Account Party's accounts with the Issuing Bank or such Participating Bank, as the case may be, any amount so due.
(c) All computations of interest based on the Alternate Base Rate when based on Deutsche Bank's prime rate referred to in the definition of Alternate Base Rate shall be made by the Agent on the basis of a year of 365 or 366 days, as the case may be. All other computations of interest hereunder (including computations of interest based on the Eurodollar Rate and the Federal Funds Rate (including the Alternate Base Rate if and so long as such Rate is based on the Federal Funds Rate)), and of all fees, commissions and other amounts payable hereunder shall be made by the Agent or the party claiming such other amounts, as the case may be, on the basis of a year of 360 days. In each such case, such computation shall be made for the actual number of days (including the first day, but excluding the last day) occurring in the period for which such interest, fees, commissions or other amounts are payable. Each such determination by the Agent or a Participating Bank, as the case may be, shall be conclusive and binding for all purposes, absent manifest error.
(d) Whenever any payment hereunder shall be stated to be due, or the last day of an Interest Period hereunder shall be stated to occur, on a day other than a Business Day, such payment shall be made and the last day of such Interest Period shall occur on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest, commissions and fees hereunder; provided, however, that if such extension would cause payment of interest on or principal of Eurodollar Rate Advances to be made, or the last day of an Interest Period for a Eurodollar Rate Advance to occur, in the next following calendar month, such payment shall be made on the next preceding Business Day and such reduction of time shall in such case be included in the computation of payment of interest hereunder.
(e) Unless the Agent shall have received notice from the Account Party prior to the date on which any payment is due to the Issuing Bank or the Participating Banks hereunder that the Account Party will not make such payment in full, the Agent may assume that the Account Party has made such payment in full to the Agent on such date and the Agent may, in reliance upon such assumption, cause to be distributed to the Issuing Bank and/or each Participating Bank on such due date an amount equal to the amount then due the Issuing Bank and/or such Participating Bank. If and to the extent the Account Party shall not have so made such payment in full to the Agent, the Issuing Bank and/or each such Participating Bank shall repay to the Agent forthwith on demand such amount distributed to the Issuing Bank and/or such Participating Bank, together with interest thereon, for each day from the date such amount is distributed to the Issuing Bank and/or such Participating Bank until the date the Issuing Bank and/or such Participating Bank repays such amount to the Agent, at the Federal Funds Rate.
(f) If, after the Agent has paid to the Issuing Bank or any Participating Bank any amount pursuant to subsection (a) above, such payment is rescinded or must otherwise be returned or must be paid over by the Agent or the Issuing Bank to any Person, whether pursuant to any bankruptcy or insolvency law, Section 4.04 hereof or otherwise, such Participating Bank shall, at the request of the Agent or the Issuing Bank, promptly repay to the Agent or the Issuing Bank, as the case may be, an amount equal to its ratable share of such payment, together with any interest required to be paid by the Agent or the Issuing Bank with respect to such payment.
SECTION 4.02. Default Interest. Any amounts payable by the Account Party hereunder that are not paid when due shall (to the fullest extent permitted by law) bear interest, from the date when due until paid in full, at the Default Rate, payable on demand.
SECTION 4.03. Yield Protection. (a) Change in Circumstances.
Notwithstanding any other provision herein, if after the date hereof, the
adoption of or any change in applicable law or regulation or in the
interpretation or administration thereof by any governmental authority
charged with the interpretation or administration thereof (whether or not
having the force of law) (i) shall change the basis of taxation of payments
to the Issuing Bank or any Participating Bank of the principal of or
interest on any Eurodollar Rate Advance made by such Participating Bank or
any fees or other amounts payable hereunder (other than changes in respect
of taxes imposed on the overall net income of the Issuing Bank or such
Participating Bank, or its Applicable Lending Office, by the jurisdiction
in which the Issuing Bank or such Participating Bank has its principal
office or in which such Applicable Lending Office is located or by any
political subdivision or taxing authority therein), or (ii) shall impose,
modify or deem applicable any reserve, special deposit or similar
requirement against letters of credit (or participatory interests therein)
issued by, commitments or assets of, deposits with or for the account of,
or credit extended by, the Issuing Bank or such Participating Bank, or
(iii) shall impose on the Issuing Bank or such Participating Bank any other
condition affecting this Agreement, the Letter of Credit or participatory
interests therein or Eurodollar Rate Advances, and the result of any of the
foregoing shall be (A) to increase the cost to the Issuing Bank or such
Participating Bank of issuing, maintaining or participating in this
Agreement or the Letter of Credit or of agreeing to make, making or
maintaining any Advance or (B) to reduce the amount of any sum received or
receivable by the Issuing Bank or such Participating Bank hereunder
(whether of principal, interest or otherwise), then the Account Party will
pay to the Issuing Bank or such Participating Bank, upon demand, such
additional amount or amounts as will compensate the Issuing Bank or such
Participating Bank for such additional costs incurred or reduction
suffered.
(b) Capital. If the Issuing Bank or any Participating Bank shall have determined that the adoption after the date hereof of any law, rule, regulation or guideline regarding capital adequacy, or any change therein or in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by the Issuing Bank or any Participating Bank (or any Applicable Lending Office of the Issuing Bank or such Participating Bank), or any holding company of any such entity, with any request or directive regarding capital adequacy not in effect on the date hereof (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect (i) of reducing the rate of return on such entity's capital or on the capital of such entity's holding company, if any, as a consequence of this Agreement, the Letter of Credit or such entity's participatory interest therein, any Commitment hereunder or the portion of the Advances made by such entity pursuant hereto to a level below that which such entity or such entity's holding company could have achieved, but for such applicability, adoption, change or compliance (taking into consideration such entity's policies and the policies of such entity's holding company with respect to capital adequacy), or (ii) of increasing or otherwise determining the amount of capital required or expected to be maintained by such entity or such entity's holding company based upon the existence of this Agreement, the Letter of Credit or such entity's participatory interest therein, any Commitment hereunder, the portion of the Advances made by such entity pursuant hereto and other similar such credits, participations, commitments, agreements or assets, then from time to time the Account Party shall pay to the Issuing Bank or such Participating Bank, upon demand, such additional amount or amounts as will compensate such entity or such entity's holding company for any such reduction or allocable capital cost suffered.
(c) Eurodollar Reserves. The Account Party shall pay to each Participating Bank upon demand, so long as such Participating Bank shall be required under regulations of the Board of Governors of the Federal Reserve System to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency Liabilities, additional interest on the unpaid principal amount of such Participating Bank's portion of each Eurodollar Rate Advance, from the date of such Advance until such principal amount is paid in full, at an interest rate per annum equal at all times to the remainder obtained by subtracting (i) the rate described in clause (i) of the definition of Eurodollar Rate for the Interest Period for such Advance from (ii) the rate obtained by dividing such rate by a percentage equal to 100% minus the Eurodollar Reserve Percentage of such Participating Bank for such Interest Period. Such additional interest shall be determined by such Participating Bank and notified to the Account Party and the Issuing Bank.
(d) Breakage Indemnity. The Account Party shall indemnify
each Participating Bank against any loss, cost or reasonable expense which
such Participating Bank may sustain or incur as a consequence of (i) any
failure by the Account Party to fulfill on the date of any Advance or
Conversion hereunder the applicable conditions set forth in Articles III
and V, (ii) any failure by the Account Party to Convert any Advance
hereunder after irrevocable notice of Conversion has been given pursuant to
Section 3.04 hereof, (iii) any payment, prepayment or Conversion of a
Eurodollar Rate Advance required or permitted by any other provision of
this Agreement or otherwise made or deemed made on a date other than the
last day of the Interest Period applicable thereto, (iv) any default in
payment or prepayment of the principal amount of any Advance or any part
thereof or interest accrued thereon, as and when due and payable (at the
due date thereof, by irrevocable notice of prepayment or otherwise) or (v)
the occurrence of any Event of Default, including, in each such case, any
loss or reasonable expense sustained or incurred or to be sustained or
incurred in liquidating or employing deposits from third parties acquired
to effect or maintain such Advance or any part thereof as a Eurodollar Rate
Advance. Such loss, cost or reasonable expense shall include an amount
equal to the excess, if any, as reasonably determined by such Participating
Bank, of (A) its cost of obtaining the funds for the Advance being paid,
prepaid, Converted or not borrowed (based on the Eurodollar Rate) for the
period from the date of such payment, prepayment, Conversion or failure to
borrow to the last day of the Interest Period for such Advance (or, in the
case of a failure to borrow, the Interest Period for such Advance which
would have commenced on the date of such failure) over (B) the amount of
interest (as reasonably determined by such Participating Bank) that would
be realized by such Participating Bank in reemploying the funds so paid,
prepaid, Converted or not borrowed for such period or Interest Period, as
the case may be. For purposes of this subsection (d), it shall be presumed
that each Participating Bank shall have funded each such Advance with a
fixed-rate instrument bearing the rates and maturities designated in the
determination of the applicable interest rate for such Advance.
(e) Notices. A certificate of the Issuing Bank or any Participating Bank setting forth such entity's claim for compensation hereunder and the amount necessary to compensate such entity or its holding company pursuant to subsections (a) through (d) of this Section 4.03 shall be submitted to the Account Party and the Issuing Bank and shall be conclusive and binding for all purposes, absent manifest error. The Account Party shall pay the Issuing Bank or such Participating Bank directly the amount shown as due on any such certificate within ten days after its receipt of the same. The failure of any entity to provide such notice or to make demand for payment under this Section 4.03 shall not constitute a waiver of such Participating Bank's rights hereunder; provided, that such entity shall not be entitled to demand payment pursuant to subsections (a) through (d) of this Section 4.03 in respect of any loss, cost, expense, reduction or reserve if such demand is made more than one year following the later of such entity's incurrence or sufferance thereof or such entity's actual knowledge of the event giving rise to such entity's rights pursuant to such subsections. The protections of this Section 4.03 shall be available to the Issuing Bank and each Participating Bank regardless of any possible contention of the invalidity or inapplicability of the law, rule, regulation, guideline or other change or condition which shall have occurred or been imposed and shall survive the Termination Date and the payment of all other amounts hereunder.
(f) Change in Legality. Notwithstanding any other provision herein, if the adoption of or any change in any law or regulation or in the interpretation or administration thereof by any governmental authority charged with the administration or interpretation thereof shall make it unlawful for any Participating Bank to make or maintain any Eurodollar Rate Advance or to give effect to its obligations as contemplated hereby with respect to any Eurodollar Rate Advance, then, by written notice to the Account Party and the Issuing Bank, such Participating Bank may:
(i) declare that Eurodollar Rate Advances will not thereafter be made by such Participating Bank hereunder, whereupon the right of the Account Party to select Eurodollar Rate Advances for any Advance or Conversion shall be forthwith suspended until such Participating Bank shall withdraw such notice as provided hereinbelow or shall cease to be a Participating Bank hereunder; and
(ii) require that all outstanding Eurodollar Rate Advances be Converted to Base Rate Advances, in which event all Eurodollar Rate Advances shall be automatically Converted to Base Rate Advances as of the effective date of such notice as provided hereinbelow.
Upon receipt of any such notice, the Agent shall promptly notify the
Participating Banks thereof. Promptly upon becoming aware that the
circumstances that caused such Participating Bank to deliver such notice no
longer exist, such Participating Bank shall deliver notice thereof to the
Account Party and the Agent withdrawing such prior notice (but the failure
to do so shall impose no liability upon such Participating Bank). Promptly
upon receipt of such withdrawing notice from such Participating Bank, the
Agent shall deliver notice thereof to the Account Party and the
Participating Banks and such suspension shall terminate. Prior to any
Participating Bank giving notice to the Account Party under this subsection
(f), such Participating Bank shall use reasonable efforts to change the
jurisdiction of its Applicable Lending Office, if such change would avoid
such unlawfulness and would not, in the sole determination of such
Participating Bank, be otherwise disadvantageous to such Participating
Bank. Any notice to the Account Party by any Participating Bank shall be
effective as to each Eurodollar Rate Advance on the last day of the
Interest Period currently applicable to such Eurodollar Rate Advance;
provided that if such notice shall state that the maintenance of such
Advance until such last day would be unlawful, such notice shall be
effective on the date of receipt by the Account Party and the Agent.
(g) Market Rate Disruptions. If, (i) the Agent determines that an adequate basis does not exist for the determination of the Eurodollar Rate for Eurodollar Rate Advances or (ii) if the Majority Lenders shall notify the Agent that the Eurodollar Rate will not adequately reflect the cost to such Majority Lenders of making, funding or maintaining their respective Eurodollar Rate Advances, the right of the Account Party to select or receive or Convert into such Type of Advances shall be forthwith suspended until the Agent shall notify the Account Party and the Participating Banks that the circumstances causing such suspension no longer exist, and until such notification from the Agent, each request for or Conversion into such Type of Advance hereunder shall be deemed to be a request for or Conversion into Base Rate Advances.
SECTION 4.04. Sharing of Payments, Etc. If any Participating
Bank shall obtain any payment (whether voluntary, involuntary, through the
exercise of any right of set-off, or otherwise, but excluding any proceeds
received by assignments or sales of participations in accordance with
Section 10.06 hereof to a Person that is not an Affiliate of the Account
Party) on account of the Advances owing to it (other than pursuant to
Section 4.03 hereof) in excess of its ratable share of payments on account
of the Advances obtained by all the Participating Banks, such Participating
Bank shall forthwith purchase from the other Participating Banks such
participation in the portions of the Advances owing to them as shall be
necessary to cause such purchasing Participating Bank to share the excess
payment ratably with each of them; provided, however, that if all or any
portion of such excess payment is thereafter recovered from such purchasing
Participating Bank, such purchase from each Participating Bank shall be
rescinded and such Participating Bank shall repay to the purchasing
Participating Bank the purchase price to the extent of such recovery
together with an amount equal to such Participating Bank's ratable share
(according to the proportion of (i) the amount of such Participating Bank's
required repayment to (ii) the total amount so recovered from the
purchasing Participating Bank) of any interest or other amount paid or
payable by the purchasing Participating Bank in respect of the total amount
so recovered. The Account Party agrees that any Participating Bank so
purchasing a participation from another Participating Bank pursuant to this
Section 4.04 may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of set-off) with respect to such
participation as fully as if such Participating Bank were the direct
creditor of the Account Party in the amount of such participation.
Notwithstanding the foregoing, if any Participating Bank shall obtain any
such excess payment involuntarily, such Participating Bank may, in lieu of
purchasing participations from the other Participating Banks in accordance
with this Section 4.04, on the date of receipt of such excess payment,
return such excess payment to the Agent for distribution in accordance with
Section 4.01(a) hereof.
SECTION 4.05. Taxes. (a) All payments by the Account Party hereunder shall be made in accordance with Section 4.01, free and clear of and without deduction for all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding, in the case of each Participating Bank and the Issuing Bank, taxes imposed on its overall net income, and franchise taxes imposed on it, by the jurisdiction under the laws of which such Participating Bank or the Issuing Bank (as the case may be) is organized or any political subdivision thereof and, in the case of each Participating Bank, taxes imposed on its overall net income, and franchise taxes imposed on it, by the jurisdiction of such Participating Bank's Applicable Lending Office or any political subdivision thereof (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as Taxes ). If the Account Party shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder to any Participating Bank or the Issuing Bank, (i) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 4.05) such Participating Bank or the Issuing Bank (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Account Party shall make such deductions and (iii) the Account Party shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law.
(b) In addition, the Account Party agrees to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies that arise from any payment made hereunder or from the execution, delivery or registration of, or otherwise with respect to, this Agreement (hereinafter referred to as Other Taxes ).
(c) The Account Party will indemnify each Participating Bank and the Issuing Bank for the full amount of Taxes and Other Taxes (including, without limitation, any Taxes and any Other Taxes imposed by any jurisdiction on amounts payable under this Section 4.05) paid by such Participating Bank or the Issuing Bank (as the case may be) and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted. This indemnification shall be made within 30 days from the date such Participating Bank or the Issuing Bank (as the case may be) makes written demand therefor. If any Taxes or Other Taxes for which a Participating Bank or the Issuing Bank has received payments from the Account Party hereunder shall be finally determined to have been incorrectly or illegally asserted and are refunded to such Participating Bank, such Participating Bank shall promptly forward to the Account Party any such refunded amount. The Account Party's, the Issuing Bank's and each Participating Bank's obligations under this Section 4.05 shall survive the Termination Date and the payment of all other amounts hereunder.
(d) Within 30 days after the date of any payment of Taxes, the Account Party will furnish to the Issuing Bank, at its address referred to in Section 10.02 hereof, the original or a certified copy of a receipt evidencing payment thereof.
(e) Each Participating Bank not incorporated in the United States or a jurisdiction within the United States shall, on or prior to the date it becomes a Participating Bank hereunder, deliver to the Account Party and the Issuing Bank such certificates, documents or other evidence, as required by the Internal Revenue Code of 1986, as amended from time to time (the Code ), or treasury regulations issued pursuant thereto, including Internal Revenue Service Form 4224 and any other certificate or statement of exemption required by Treasury Regulation Section 1.1441-1(a) or Section 1.1441-6(c) or any subsequent version thereof, properly completed and duly executed by such Participating Bank establishing that it is (i) not subject to withholding under the Code or (ii) totally exempt from United States of America tax under a provision of an applicable tax treaty. Each Participating Bank shall promptly notify the Account Party and the Issuing Bank of any change in its Applicable Lending Office and shall deliver to the Account Party and the Issuing Bank together with such notice such certificates, documents or other evidence referred to in the immediately preceding sentence. Unless the Account Party and the Issuing Bank have received forms or other documents satisfactory to them indicating that payments hereunder are not subject to United States of America withholding tax or are subject to such tax at a rate reduced by an applicable tax treaty, the Account Party or the Issuing Bank shall withhold taxes from such payments at the applicable statutory rate in the case of payments to or for any Participating Bank organized under the laws of a jurisdiction outside the United States of America. Each Participating Bank represents and warrants that each such form supplied by it to the Issuing Bank and the Account Party pursuant to this Section 4.05, and not superseded by another form supplied by it, is or will be, as the case may be, complete and accurate.
(f) Any Participating Bank claiming any additional amounts payable pursuant to this Section 4.05 shall use reasonable efforts (consistent with legal and regulatory restrictions) to file any certificate or document requested by the Account Party or to change the jurisdiction of its Applicable Lending Office if the making of such a filing or change would avoid the need for or reduce the amount of any such additional amounts which may thereafter accrue and would not, in the sole determination of such Participating Bank, be otherwise disadvantageous to such Participating Bank.
SECTION 4.06. Obligations Absolute. The obligations of the Account Party under this Agreement shall be unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement (as the same may be amended from time to time) under all circumstances, including, without limitation, the following circumstances:
(i) any lack of validity or enforceability of this Agreement, the Second Mortgage or any of the Security Documents or Related Documents or any document or agreement delivered in connection therewith;
(ii) any change in the time, manner or place of payment of, or in any other term of, all or any of the obligations of the Account Party in respect of the Letter of Credit or any other amendment or waiver of or any consent to departure from all or any of the Loan Documents, the Second Mortgage or the Related Documents or any document or agreement delivered in connection therewith;
(iii) the existence of any claim, set-off, defense or other right which the Account Party may have at any time against the Paying Agent, the Trustee or any other beneficiary, or any transferee, of the Letter of Credit (or any persons or entities for whom the Paying Agent, the Trustee, any such beneficiary or any such transferee may be acting), the Agent, the Issuing Bank, or any other person or entity, whether in connection with this Agreement, the transactions contemplated in any of the Loan Documents, the Second Mortgage or the Related Documents, or any unrelated transaction;
(iv) any statement or any other document presented under the Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect, except to the extent that a court of competent jurisdiction shall determine that the Issuing Bank shall have engaged in gross negligence or willful misconduct with respect thereto;
(v) payment by the Issuing Bank under the Letter of Credit against presentation of a draft or certificate which does not comply with the terms of the Letter of Credit, except to the extent that a court of competent jurisdiction shall determine that the Issuing Bank shall have engaged in gross negligence or willful misconduct with respect thereto;
(vi) any exchange of, release of or non-perfection of any interest in any collateral, or any release or amendment or waiver of or consent to departure from any guarantee, for all or any of the obligations of the Account Party in respect of the Letter of Credit; or
(vii) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing.
SECTION 4.07. Evidence of Indebtedness. The Issuing Bank and each Participating Bank shall maintain, in accordance with their usual practice, an account or accounts evidencing the indebtedness of the Account Party resulting from each drawing under the Letter of Credit (in the case of the Issuing Bank) and from each Advance (in the case of each Participating Bank) made from time to time hereunder and the amounts of principal and interest payable and paid from time to time hereunder. In any legal action or proceeding in respect of this Agreement, the entries made in such account or accounts shall, in the absence of manifest error, be conclusive evidence of the existence and amounts of the obligations of the Account Party therein recorded.
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.01. Conditions Precedent to the Issuance of the Letter of Credit. The obligation of the Issuing Bank to issue the Letter of Credit and of each Participating Bank to make the Advances to be made by it is subject to the fulfillment of the conditions precedent that the Agent shall have received on or before the day of such issuance the following, each dated such day (except where specified otherwise below), in form and substance satisfactory to each Participating Bank (except where specified otherwise below) and in sufficient copies for each Participating Bank:
(a) Agreements:
(i) Counterparts of this Agreement, duly executed and delivered by the Account Party, the Agent, the Issuing Bank and each Participating Bank listed on the signature pages hereto.
(ii) Counterparts of the Pledge Agreement, duly executed by the Account Party, the Agent and the Issuing Bank.
(iii) Executed copies (or duplicate copies thereof certified as of the Closing Date by the Account Party in a manner satisfactory to the Agent to be a true copy) of the Indenture and the Loan Agreement, duly executed by the parties thereto.
(iv) Executed copies (or duplicate copies thereof certified as of the Closing Date by the Account Party in a manner satisfactory to the Agent to be a true copy) of the Second Mortgage, duly executed by the parties thereto.
(v) A letter of credit application in the standard form prescribed by the Issuing Bank, duly completed and executed by the Account Party.
(b) Corporate Matters:
(i) A certificate of the Secretary or an Assistant Secretary of the Account Party certifying that attached thereto are (A) a true and correct listing of the documents comprising the Articles of Incorporation of the Account Party and a true and correct copy of the By-laws of the Account Party, in each case as in effect on the Closing Date and (B) true and correct copies of the resolutions of the Board of Directors of the Account Party approving, if and to the extent necessary, this Agreement, the other Loan Documents, the Related Documents to which it is a party and the other documents to be delivered by or on behalf of the Account Party hereunder and thereunder, and of all documents evidencing other necessary corporate action, if any, with respect to the execution, delivery and performance by or on behalf of the Account Party of this Agreement, the other Loan Documents and such Related Documents and certifying that such resolutions and other corporate actions, if any, are in full force and effect and have not been revoked, rescinded or modified.
(ii) A certificate of the Secretary or an Assistant Secretary of the Account Party certifying the names and true signatures of the officers of the Account Party authorized to sign this Agreement, the other Loan Documents, the Related Documents to which it is a party and the other documents to be delivered hereunder and thereunder.
(c) Governmental Approvals:
(i) A certificate of a duly authorized officer of the Account Party certifying that attached thereto are true and correct copies of all Governmental Approvals referred to in clause (i) of the definition of Governmental Approval required to be obtained or made by the Account Party.
(d) Financial, Accounting and Compliance Matters:
(i) A certificate signed by the Treasurer or Assistant Treasurer of the Account Party, certifying as to the absence of any material adverse change in the financial condition, operations, properties or prospects of the Account Party since December 31, 1992, except to the extent, if any, described in the Account Party's Quarterly Reports on Form 10-Q for the periods ended March 31 and/or June 30, 1993 or in the Account Party's Current Reports on Form 8-K dated June 3, 1993, June 30, 1993 and/or September 10, 1993.
(ii) A certificate of a duly authorized officer of the Account Party to the effect that:
(A) the representations and warranties contained in
Section 6.01 are correct in all material respects on and as of the Closing
Date before and after giving effect to the issuance of the Letter of
Credit; and
(B) no event has occurred and is continuing which constitutes an Event of Default or Unmatured Default, or would result from the issuance of the Letter of Credit.
(e) Relating to the Issuance of the Bonds:
(i) An executed copy (or a duplicate copy thereof certified by the Account Party in a manner satisfactory to the Agent to be a true copy) of the Remarketing Agreement, duly executed by the Issuer, the Remarketing Agent and the Account Party.
(ii) An executed copy (or a duplicate copy thereof certified by the Account Party in a manner satisfactory to the Agent to be a true copy) of the Purchase Contract, duly executed by Goldman, Sachs & Co., Individually and as Representative of Advest, Inc., Greenwich Partners, Inc. and U.S. Securities, Inc., the Issuer and the Account Party.
(iii) A letter from Whitman & Ransom, counsel to the Issuer, addressed to the Agent, the Issuing Bank and the Participating Banks and stating therein that the Agent, the Issuing Bank and the Participating Banks may rely on the opinion of such firm in the form of Appendix C to the Official Statement relating to the Bonds and delivered pursuant to Section 14(i)(2)(G) of the Purchase Contract, together with copies of such opinion.
(iv) Copies of the Preliminary Official Statement and Official Statement used in connection with the offering and remarketing of the Bonds, and any amendments, supplements or "stickers" thereto.
(v) Copies of the Issuer Resolution, and, to the extent not otherwise referenced in this Section 5.01(e), of all other agreements, documents, certificates and opinions delivered in connection with the issuance of the Bonds.
(f) Opinions of Counsel:
Favorable opinions of:
(i) Day, Berry & Howard, counsel to the Account Party, in substantially the form of Exhibit 5.01A and as to such other matters as the Majority Lenders, through the Agent, may reasonably request; and
(ii) King & Spalding, special New York counsel to the Agent and the Issuing Bank, in substantially the form of Exhibit 5.01B.
(g) Miscellaneous:
(i) Letters from S&P and Moody's to the effect that the Bonds have been rated A-1+ and VMIG-1, respectively, such letters to be in form and substance satisfactory to the Issuing Bank.
(ii) Such other approvals, opinions and documents as the Majority Lenders, through the Issuing Bank, may reasonably request as to the legality, validity, binding effect or enforceability of the Loan Documents or the financial condition, properties, operations or prospects of the Account Party.
SECTION 5.02. Additional Conditions Precedent to the Issuance of the Letter of Credit. The obligation of the Issuing Bank to issue the Letter of Credit and of each Participating Bank to make the Advances to be made by it shall be subject to the further conditions precedent that, on the date of the issuance of the Letter of Credit:
(a) the representations and warranties contained in
Section 6.01 shall be correct in all material respects on and as of the
Closing Date before and after giving effect to the issuance of the Letter
of Credit;
(b) no event shall have occurred and be continuing which constitutes an Event of Default or Unmatured Default, or would result from the issuance of the Letter of Credit; and
(c) The Account Party shall have paid all fees under or referenced in Section 2.03 hereof, to the extent then due and payable.
SECTION 5.03. Conditions Precedent to Initial Advances and Conversions of Advances. The obligation of each Participating Bank to make any Initial Advance or to Convert any Term Advance shall be subject to the conditions precedent that, on the date of such Initial Advance or Conversion, the following statements shall be true:
(a) the representations and warranties contained in
Section 6.01 of this Agreement (other than the last sentence of subsection
(f) and clause (ii) of subsection (g) thereof) are true and correct on and
as of the date of such Initial Advance or Conversion, before and after
giving effect to such Initial Advance or Conversion and to the application
of the proceeds (if any) therefrom, as though made on and as of such date;
and
(b) no event has occurred and is continuing which constitutes an Event of Default.
Unless the Account Party shall have previously advised the Agent in writing that one or more of the statements contained in subsections (a) and (b) of this Section 5.03 is no longer true, the Account Party shall be deemed to have represented and warranted, on and as of the date of any Initial Advance or Conversion, that the above statements are true.
SECTION 5.04. Conditions Precedent to Term Advances. The obligation of each Participating Bank to make any Term Advance shall be subject to the conditions precedent that, on the date of such Term Advance the following statements shall be true:
(a) the representations and warranties contained in
Section 6.01 of this Agreement (including the last sentence of subsection
(f) and clause (ii) of subsection (g) thereof) are true and correct on and
as of the date of such Term Advance, before and after giving effect to such
Term Advance and to the application of the proceeds therefrom, as though
made on and as of such date; and
(b) no event has occurred and is continuing which constitutes an Event of Default or an Unmatured Default.
Unless the Account Party shall have previously advised the Agent in writing that one or more of the statements contained in subsections (a) and (b) of this Section 5.04 is no longer true, the Account Party shall be deemed to have represented and warranted, on and as of the date of any Term Advance, that the above statements are true.
SECTION 5.05. Reliance on Certificates. The Agent, the Issuing Bank and the Participating Banks shall be entitled to rely conclusively upon the certificates delivered from time to time by officers of the Account Party, NU and the other parties to the Loan Documents and Related Documents as to the names, incumbency, authority and signatures of the respective persons named therein until such time as the Agent may receive a replacement certificate, in form acceptable to the Agent, from an officer of such Person identified to the Agent as having authority to deliver such certificate, setting forth the names and true signatures of the officers and other representatives of such Person thereafter authorized to act on behalf of such Person.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01. Representations and Warranties of the Account Party. The Account Party represents and warrants as follows:
(a) Each of the Account Party and its Principal Subsidiaries is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, has the requisite corporate power and authority to own its property and assets and to carry on its business as now conducted and is qualified to do business in every jurisdiction where, because of the nature of its business or property, such qualification is required, except where the failure so to qualify would not have a material adverse effect on the financial condition, properties, prospects or operations of the Account Party or of the Account Party and its Principal Subsidiaries taken as a whole. The Account Party has the corporate power to execute, deliver and perform its obligations under this Agreement, each other Loan Document and each Related Document to which it will be a party.
(b) The execution, delivery and performance by the Account Party of each Loan Document and Related Document to which it is a party are within the Account Party's corporate powers, have been duly authorized by all necessary corporate action, and do not and will not contravene (i) the Account Party's charter or by-laws or any law or legal restriction or (ii) any contractual restriction binding on or affecting the Account Party or its properties or any of its Principal Subsidiaries or its properties.
(c) Each of the Account Party and its Principal Subsidiaries is not in violation of any law, or in default with respect to any judgment, writ, injunction, decree, rule or regulation of any court or governmental agency or instrumentality, where such violation or default would have a material adverse effect on the financial condition, properties, prospects or operations of the Account Party or of the Account Party and its Principal Subsidiaries taken as a whole.
(d) All Governmental Approvals referred to in clause (i) in the definition of Governmental Approvals have been duly obtained or made, and all applicable periods of time for review, rehearing or appeal with respect thereto have expired, except as described below. If the period for appeal of the order of the Securities and Exchange Commission approving the transactions contemplated hereby has not expired, the filing of an appeal of such order will not affect the validity of said transactions, unless such order has been otherwise stayed or any of the parties hereto has actual knowledge that any of such transactions constitutes a violation of the Public Utility Holding Company Act of 1935 or any rule or regulation thereunder. No such stay exists and the Account Party has no reason to believe that any of such transactions constitutes any such violation. If the period for appeal of the decision of the Connecticut Department of Public Utility Control (the CDPUC ) approving the transactions contemplated hereby has not expired, the filing of an appeal of such decision will not affect the validity of said transactions, unless operation of such decision has been stayed or suspended by the CDPUC or a reviewing court prior to the consummation of such transactions. No such stay or suspension exists. No representation or warranty is made concerning the applicable period of time for review, rehearing or appeal with respect to Governmental Approvals of the Issuer in connection with the issuance of the Bonds. The Account Party and each of its Principal Subsidiaries have obtained or made all Governmental Approvals referred to in clause (ii) of the definition of Governmental Approvals , except (i) those which are not yet required but which are obtainable in the ordinary course of business as and when required, (ii) those the absence of which would not materially adversely affect the financial condition, properties, prospects or operations of the Account Party or any Principal Subsidiary and (iii) those which the Account Party is diligently attempting in good faith to obtain, renew or extend, or the requirement for which the Account Party is contesting in good faith by appropriate proceedings or by other appropriate means; in each case described in the foregoing clause (iii), such attempt or contest, and any delay resulting therefrom, is not reasonably expected to have a material adverse effect on the financial condition, properties, prospects or operations of the Account Party or any Principal Subsidiary or to magnify to any significant degree any such material adverse effect that would reasonably be expected to result from the absence of such Governmental Approval.
(e) This Agreement, each other Loan Document and each Related Document to which the Account Party is a party have been duly executed and delivered by or on behalf of the Account Party and are legal, valid and binding obligations of the Account Party enforceable against the Account Party in accordance with their respective terms; subject to the qualifications, however, that the enforcement of the rights and remedies herein and therein is subject to bankruptcy and other similar laws of general application affecting rights and remedies of creditors and the application of general principles of equity (regardless of whether considered in a proceeding in equity or at law) and that indemnification against violations of securities and similar laws may be subject to matters of public policy.
(f) (i) The audited balance sheet of the Account Party as at December 31, 1992, and the audited statements of income and cash flows of the Account Party for the fiscal year then ended as set forth in the Account Party's Annual Report on Form 10-K for such fiscal year and (ii) the unaudited balance sheet of the Account Party as at June 30, 1993 and the unaudited statements of income and cash flows of the Account Party for the six-month period then ended as set forth in the Account Party's Quarterly Report on Form 10-Q for the period then ended, fairly present in all material respects the financial condition and results of operations of the Account Party at and for the respective periods ended on such dates, and have been prepared in accordance with generally accepted accounting principles consistently applied. Since December 31, 1992, there has been no material adverse change in the financial condition, operations, properties or prospects of the Account Party and its Subsidiaries, if any, taken as a whole, except to the extent, if any, described in the Account Party's Quarterly Reports on Form 10-Q for the periods ended March 31, 1993 and/or June 30, 1993, or in the Account Party's Current Reports on Form 8-K dated June 3, 1993, June 30, 1993 and/or September 10, 1993 or in Schedule II hereto.
(g) There is no pending or known threatened action or proceeding (including, without limitation, any action or proceeding relating to any environmental protection laws or regulations) affecting the Account Party or its properties, or any of its Principal Subsidiaries or its properties, before any court, governmental agency or arbitrator (i) which affects or purports to affect the legality, validity or enforceability of the Loan Documents or the Related Documents or any of them or (ii) as to which there is a reasonable possibility of an adverse determination and which, if adversely determined, would materially adversely affect the financial condition, properties, prospects or operations of the Account Party and its Principal Subsidiaries taken as a whole; except, for purposes of clause (ii) only, such as is described in the Account Party's Annual Report on Form 10-K for the fiscal year ended December 31, 1992, in the Account Party's Quarterly Reports on Form 10-Q for the periods ended March 31, 1993 or June 30, 1993, or in the Account Party's Current Reports on Form 8-K, dated June 3, 1993, June 30, 1993 and/or September 10, 1993 or in Schedule II hereto.
(h) No ERISA Plan Termination Event has occurred nor is reasonably expected to occur with respect to any ERISA Plan which would materially adversely affect the financial condition, properties, prospects or operations of the Account Party and its Subsidiaries taken as a whole, except as disclosed to and consented to in writing by the Majority Lenders. Since the date of the most recent Schedule B (Actuarial Information) to the annual report of each such ERISA Plan (Form 5500 Series), there has been no material adverse change in the funding status of the ERISA Plans referred to therein, and no prohibited transaction has occurred with respect thereto that, singly or in the aggregate with all other prohibited transactions and after giving effect to all likely consequences thereof, would be reasonably expected to have a material adverse effect on the financial condition, properties, prospects or operations of the Account Party and its Subsidiaries taken as a whole. Neither the Account Party nor any of its ERISA Affiliates has incurred nor reasonably expects to incur any material withdrawal liability under ERISA to any ERISA Multiemployer Plan, except as disclosed to all Lenders and consented to in writing by the Majority Lenders.
(i) The Account Party or one of its Principal Subsidiaries
has good and marketable title (or, in the case of personal property, valid
title) or valid leasehold interests in the electric generating plants of
which it is named as owner in Item 2 of the Account Party's Annual Report
on Form 10-K for the fiscal year ended December 31, 1992 under the caption
System Generating Plants , except for minor defects in title that do not
interfere with the ability of the Account Party or any of its Principal
Subsidiaries to conduct its business as now conducted. All such assets and
properties are free and clear of any Lien, other than Liens permitted under
Section 7.02(a) hereof.
(j) All outstanding shares of capital stock having ordinary voting power for the election of directors of the Account Party have been validly issued, are fully paid and nonassessable and are owned beneficially by NU, free and clear of any Lien. NU is a holding company (as defined in the Public Utility Holding Company Act of 1935, as amended).
(k) The Account Party and each of its Principal Subsidiaries has filed all tax returns (Federal, state and local) required to be filed and paid taxes shown thereon to be due, including interest and penalties, or, to the extent the Account Party or any of its Principal Subsidiaries is contesting in good faith an assertion of liability based on such returns, has provided adequate reserves in accordance with generally accepted accounting principles for payment thereof.
(l) The Information Memorandum did not contain when made any material misstatement of fact or omit to state any material fact necessary to make the statements contained therein not misleading in light of the circumstances under which they were made; and no other exhibit, schedule, report or other written information provided by or on behalf of the Account Party or its agents to the Agent, the Issuing Bank or the Participating Banks in connection with the negotiation, execution and closing of this Agreement, the other Loan Documents or the Related Documents knowingly contained when made any material misstatement of fact or knowingly omitted to state any material fact necessary to make the statements contained therein not misleading in light of the circumstances under which they were made.
(m) No proceeds of any Advance will be used in violation of, or in any manner that would result in a violation by any party hereto of, Regulations G, T, U or X promulgated by the Board of Governors of the Federal Reserve System or any successor regulations. The Account Party (A) is not an investment company within the meaning ascribed to that term in the Investment Company Act of 1940 and (B) is not engaged in the business of extending credit for the purpose of buying or carrying margin stock.
ARTICLE VII
COVENANTS OF THE ACCOUNT PARTY
SECTION 7.01. Affirmative Covenants. So long as any amounts shall remain available to be drawn under the Letter of Credit or any Advance or other amounts shall remain unpaid hereunder or any Participating Bank shall have any Commitment, the Account Party will, unless the Majority Lenders shall otherwise consent in writing:
(a) Use of Proceeds. Apply all proceeds of each Advance solely as specified in Section 3.02 and Section 6.01(m) hereof.
(b) Payment of Taxes, Etc. Pay and discharge before the same shall become delinquent, and cause each of its Principal Subsidiaries to pay and discharge before the same shall become delinquent, all taxes, assessments and governmental charges, royalties or levies imposed upon it or upon its property except to the extent the Account Party or any of its Principal Subsidiaries is contesting the same in good faith by appropriate proceedings and has set aside adequate reserves in accordance with generally accepted accounting principles for the payment thereof.
(c) Maintenance of Insurance. Maintain, or cause to be maintained, insurance (including appropriate plans of self-insurance) covering the Account Party, its Principal Subsidiaries and their respective properties, in effect at all times in such amounts and covering such risks as may be required by law and in addition as is usually carried by companies engaged in similar businesses and owning similar properties.
(d) Preservation of Existence, Etc. Subject at all times to
Section 7.02(b) hereof, preserve and maintain, and cause each of its
Principal Subsidiaries to preserve and maintain, its existence, corporate
or otherwise, material rights (statutory and otherwise) and franchises
except for such rights and franchises which do not materially adversely
affect the financial condition, properties, prospects or operations of the
Account Party or any of its Principal Subsidiaries.
(e) Compliance with Laws, Etc.. Comply, and cause each of its Principal Subsidiaries to comply, in all material respects with the requirements of all applicable laws, rules, regulations and orders of any governmental authority, including, without limitation, any such laws, rules, regulations and orders issued by the Securities and Exchange Commission or relating to zoning, environmental protection, use and disposal of Hazardous Substances, land use, construction and building restrictions, ERISA and employee safety and health matters relating to business operations, except to the extent (i) that the Account Party or any of its Principal Subsidiaries is contesting the same in good faith by appropriate proceedings or (ii) that any such non-compliance, and the enforcement or correction thereof, would not materially adversely affect the financial condition, properties, prospects or operations of the Account Party or any of its Principal Subsidiaries.
(f) Inspection Rights. At any time and from time to time upon reasonable notice, permit the Issuing Bank and its agents and representatives to examine the records and books of account of, and the properties of, the Account Party and any of its Principal Subsidiaries.
(g) Keeping of Books. Keep proper records and books of account, in which full and correct entries shall be made of all financial transactions of the Account Party and its Principal Subsidiaries and the assets and business of the Account Party and its Principal Subsidiaries, in accordance with generally accepted accounting practices consistently applied.
(h) Conduct of Business. Conduct its primary business, and cause each of its Principal Subsidiaries to conduct its primary business, in substantially the same manner and in substantially the same fields as such business is conducted on the Closing Date.
(i) Maintenance of Properties, Etc. (i) As to properties
of the type described in Section 6.01(i) hereof, subject at all times to
Section 7.02(b) hereof, maintain, and cause its Principal Subsidiaries to
maintain, title of the quality described therein; and (ii) preserve,
maintain, develop, and operate, and cause its Principal Subsidiaries to
preserve, maintain, develop and operate, in substantial conformity with all
laws, material contractual obligations and prudent practices prevailing in
the industry, all of its properties which are used or useful in the conduct
of its or its Principal Subsidiaries' respective businesses in good working
order and condition, ordinary wear and tear excepted, except to the extent
such non- conformity would not materially adversely affect the financial
condition, properties, prospects or operations of the Account Party or any
of its Principal Subsidiaries; provided, however, that the Account Party or
any Principal Subsidiary will not be prevented from discontinuing the
operation and maintenance of any such properties if such discontinuance is,
in the judgment of the Account Party or such Principal Subsidiary,
desirable in the operation or maintenance of its business and would not
materially adversely affect the financial condition, properties, prospects
or operations of the Account Party or such Principal Subsidiary.
(j) Governmental Approvals. Duly obtain, and cause each of
its Principal Subsidiaries to duly obtain, on or prior to such date as the
same may become legally required, and thereafter maintain in effect at all
times, all Governmental Approvals on its or such Principal Subsidiary's
part to be obtained, except with respect to those Governmental Approvals
referred to in clause (ii) of the definition of Governmental Approvals ,
(i) those the absence of which would not materially adversely affect the
financial condition, properties, prospects or operations of the Account
Party or any Principal Subsidiary and (ii) those which the Account Party is
diligently attempting in good faith to obtain, renew or extend, or the
requirement for which the Account Party is contesting in good faith by
appropriate proceedings or by other appropriate means; provided, however,
that the exception afforded by clause (ii), above, shall be available only
if and for so long as such attempt or contest, and any delay resulting
therefrom, does not have a material adverse effect on the financial
condition, properties, prospects or operations of the Account Party or any
Principal Subsidiary and does not magnify to any significant degree any
such material adverse effect that would reasonably be expected to result
from the absence of such Governmental Approval.
(k) Further Assurances. Promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary or that any Participating Bank through the Issuing Bank may reasonably request in order to fully give effect to the interests and properties purported to be covered by the Security Documents.
(l) Related Documents. Perform and comply in all material respects with each of the provisions of each Related Document to which it is a party.
(m) Ratings. Maintain at all times ratings in respect of the Bonds of at least two nationally-recognized rating services, of which at least one shall be S&P or Moody's.
SECTION 7.02. Negative Covenants. So long as any amount shall remain available to be drawn under the Letter of Credit or any Advance or other amounts shall remain unpaid hereunder or any Participating Bank shall have any Commitment, the Account Party will not, without the written consent of the Majority Lenders:
(a) Liens, Etc. Create, incur, assume or suffer to exist any lien, security interest, or other charge or encumbrance (including the lien or retained security title of a conditional vendor) of any kind, or any other type of preferential arrangement the intent or effect of which is to assure a creditor against loss or to prefer one creditor over another creditor upon or with respect to any of its properties or assets (any of the foregoing being referred to herein as a Lien ), excluding, however, from the operation of the foregoing restrictions the Liens created or perfected under or in connection with the Pledge Agreement, and the following, whether now existing or hereafter created or perfected:
(i) Liens created by (A) the Indenture of Mortgage and Deed of Trust dated as of May 1, 1921, from the Account Party to Bankers Trust Company, as Trustee, as amended and supplemented (the CL&P Indenture ), or (B) the First Mortgage Indenture and Deed of Trust dated as of January 1, 1958, from the Hartford Electric Light Company ( HELCO ) to the First National Bank of Boston, as Successor Trustee, as amended and supplemented (the HELCO Indenture );
(ii) Liens on the Account Party's interest in the Millstone Unit No. 1, Millstone Unit No. 2 or Millstone Unit No. 3 nuclear generating units in Waterford, Connecticut, or nuclear fuel for any or all nuclear units in which the Account Party has an interest (including, without limitation, Millstone Unit No. 1, Millstone Unit No.2 and Millstone Unit No. 3);
(iii) Permitted Liens or Permitted Encumbrances under the CL&P Indenture or the HELCO Indenture;
(iv) any Lien on assets of any of its Subsidiaries created or assumed to secure Debt owing by any of its Subsidiaries to the Account Party or to any wholly-owned Subsidiary of the Account Party;
(v) any purchase money Lien or construction mortgage on assets hereafter acquired or constructed by the Account Party or any of its Subsidiaries and any Lien on any assets existing at the time of acquisition thereof by the Account Party or any of its Subsidiaries, or created within 180 days from the date of completion of such acquisition or construction; provided that such Lien shall at all times be confined solely to the assets so acquired or constructed and any additions thereto;
(vi) any existing Liens on assets now owned by the Account Party or any of its Subsidiaries; Liens on assets or stock of any class of, or any partnership or joint venture interest in, any of its Subsidiaries existing at the time it becomes a Subsidiary of the Account Party, and liens existing on assets of a corporation or other going concern when it is merged into or with the Account Party or a Subsidiary of the Account Party, or when substantially all of its assets are acquired by the Account Party or a Subsidiary of the Account Party; provided that such Liens shall at all times be confined solely to such assets, or if such assets constitute a utility system, additions to or substitutions for such assets;
(vii) Liens resulting from legal proceedings being contested in good faith by appropriate legal or administrative proceedings by the Account Party or any of its Subsidiaries, and as to which the Account Party or any of its Subsidiaries, as the case may be, to the extent required by generally accepted accounting principles applied on a consistent basis, shall have set aside on its books adequate reserves;
(viii) Liens created in favor of the other contracting party in connection with advance or progress payments;
(ix) any Liens in favor of any state of the United States or any political subdivision of any such state, or any agency of any such state or political subdivisions, or trustee acting on behalf of holders of obligations issued by any of the foregoing or any financial institutions lending to or purchasing obligations of any of the foregoing, which Lien is created or assumed for the purpose of financing all or part of the cost of acquiring or constructing the property subject thereto;
(x) Liens resulting from conditional sale agreements, capital leases or other title retention agreements;
(xi) Liens on property of the Account Party or any of its Subsidiaries related to the financing of pollution control facilities;
(xii) Liens on accounts receivable and power contracts resulting from financing transactions;
(xiii) any other Liens incurred in the ordinary course of business otherwise than to secure Debt; and
(xiv) any extension, renewal or replacement of Liens permitted by clauses (i) through (vi) and (viii) through (xiii); provided, however, that the principal amount of Debt secured thereby shall not, at the time of such extension, renewal or replacement, exceed the principal amount of Debt so secured and that such extension, renewal or replacement shall be limited to all or a part of the property which secured the Lien so extended, renewed or replaced;
(b) Mergers, and Sales of Assets, Etc. Merge with or into or consolidate with or into, any Person, or permit any of its Subsidiaries to be a party to, any merger or consolidation, or purchase or otherwise acquire all or substantially all of the assets or stock of any class of, or any partnership or joint venture interest in, any other Person or entity, or sell, transfer, convey or lease all or any substantial part of its assets (other than sales, transfers or conveyances of receivables and power contracts), except for, and then only after receipt of all necessary corporate and governmental or regulatory approvals and provided, that, before and after giving effect to any such merger, consolidation, purchase, acquisition, sale, transfer, conveyance or lease, no Event of Default or Unmatured Default shall have occurred and be continuing:
(i) any such merger or consolidation, sale, transfer, conveyance, lease or assignment of or by any wholly-owned Subsidiary of the Account Party into the Account Party or into, with or to any other wholly- owned Subsidiary of the Account Party and any such purchase or other acquisition by the Account Party or any wholly-owned Subsidiary of the Account Party of the assets or stock of any wholly-owned Subsidiary of the Account Party;
(ii) any such sale of assets (other than stock) which comprise all or any part of its interest in a nuclear power generating plant (whether completed or under construction);
(iii) any such merger or consolidation of the Account
Party with or into another wholly-owned Subsidiary of NU and/or a
Regulatory Transaction Entity and/or an entity owning a cogeneration or
independent power project, pursuant to step-in or similar rights granted
pursuant to a pre-existing power purchase contract, if (but only if): (A)
the successor or surviving corporation, if not the Account Party, shall
have assumed or succeeded to all of the liabilities of the Account Party
(including the liabilities of the Account Party under this Agreement), and
(B) the Agent shall have received the favorable written opinion of counsel
to the Account Party, in form and substance satisfactory to the Agent and
the Majority Lenders, to the effect of the foregoing subclause (A);
provided, however, in the event of a merger or consolidation with a
Regulatory Transaction Entity, if the purchase price plus the amount of any
liabilities assumed in connection with such merger or consolidation exceeds
$100,000,000, the Account Party shall deliver to the Agent with sufficient
copies for each Participating Bank 30 days prior to such merger or
consolidation, a certificate of a duly authorized officer of the Account
Party demonstrating projected compliance with the ratio set forth in
Section 7.02(d) hereof for and as of each of the three consecutive fiscal
quarters immediately succeeding such merger or consolidation and certifying
that such projections were prepared in good faith and on reasonable
assumptions;
(iv) any purchase or acquisition of all or substantially all of the assets of or stock of any class of, or any partnership or joint venture interest in (and any assumption of the related liabilities) (A) an entity owning a cogeneration or independent power project, pursuant to step- in or similar rights granted pursuant to a pre-existing power purchase contract; (B) a Regulatory Transaction Entity; or (C) any other Person if the purchase price of such acquisition plus the amount of any liabilities assumed by the Account Party in connection therewith does not exceed $50,000,000 in the aggregate; provided, however, in the event of a purchase or acquisition of a Regulatory Transaction Entity, if the purchase price plus the amount of any liabilities assumed in connection with such purchase or acquisition exceeds in the aggregate $100,000,000, the Account Party shall deliver to the Agent with sufficient copies for each Participating Bank 30 days prior to such purchase or acquisition, a certificate of a duly authorized officer of the Account Party demonstrating projected compliance with the ratio set forth in Section 7.02(d) hereof for and as of each of the three consecutive fiscal quarters immediately succeeding such purchase or acquisition and certifying that such projections were prepared in good faith and on reasonable assumptions; or
(v) any purchase or acquisition of a joint venture interest in a generating and/or transmission facility or in a mutual insurance company providing nuclear liability or nuclear property or replacement power insurance.
(c) Compliance with ERISA. (i) Terminate, or permit any ERISA Affiliate to terminate, any ERISA Plan so as to result in any liability of the Account Party or any Principal Subsidiary to the PBGC in an amount greater than $1,000,000, or (ii) permit to exist any occurrence of any Reportable Event (as defined in Title IV of ERISA) which, alone or together with any other Reportable Event with respect to the same or another ERISA Plan, has a reasonable possibility of resulting in liability of the Account Party or any Subsidiary to the PBGC in an aggregate amount exceeding $1,000,000, or any other event or condition, which presents a material risk of such a termination by the PBGC of any ERISA Plan or has a reasonable possibility of resulting in a liability of the Account Party or any Subsidiary to the PBGC in an aggregate amount exceeding $1,000,000.
(d) Common Equity Ratio. Permit the ratio (expressed as a percentage) of Consolidated Common Equity to Consolidated Capitalization to be less than 30% for any three consecutive fiscal quarters.
SECTION 7.03. Reporting Obligations. So long as any amount shall remain available to be drawn under the Letter of Credit or any Advance or other amounts shall remain unpaid hereunder or any Participating Bank shall have any Commitment, the Account Party will, unless the Majority Lenders shall otherwise consent in writing, furnish to the Agent in sufficient copies for the Issuing Bank and each Participating Bank, the following:
(i) as soon as possible and in any event within ten days after the occurrence of each Event of Default or Unmatured Default continuing on the date of such statement, a statement of the Chief Financial Officer, Treasurer or Assistant Treasurer of the Account Party setting forth details of such Event of Default or Unmatured Default and the action which the Account Party proposes to take with respect thereto;
(ii) as soon as available and in any event within 50 days after the end of each of the first three quarters of each fiscal year of the Account Party, a copy of the Account Party's Quarterly Report on Form 10-Q, if any, submitted to the Securities and Exchange Commission with respect to such quarter, containing financial statements in reasonable detail and duly certified (subject to year-end audit adjustments) by the Chief Financial Officer, Treasurer, Assistant Treasurer or Comptroller of the Account Party as having been prepared in accordance with the system of management financial reports of the Account Party applied on a basis consistent with the financial statements referred to in Section 6.01(f) hereof and accompanied by a certificate of a duly authorized officer of the Account Party (X) stating that no Event of Default or Unmatured Default has occurred and is continuing or, if an Event of Default or Unmatured Default has occurred and is continuing, describing the nature thereof and the action which the Account Party proposes to take with respect thereto and (Y) demonstrating compliance with Section 7.02(d) hereof for and as of the end of such fiscal quarter, such demonstration to be in a schedule (in form satisfactory to the Agent) which sets forth the computations used in determining such compliance;
(iii) as soon as available and in any event within 105 days after the end of each fiscal year of the Account Party, a copy of the Account Party's Annual Report on Form 10-K submitted to the Securities and Exchange Commission with respect to such year, containing financial statements certified by a nationally-recognized independent public accountant and to be accompanied by a certificate of the Chief Financial Officer, Treasurer, Assistant Treasurer or Comptroller of the Account Party (X) stating that no Event of Default or Unmatured Default has occurred and is continuing, or if an Event of Default or Unmatured Default has occurred and is continuing, describing the nature thereof and the action which the Account Party proposes to take with respect thereto and (Y) demonstrating compliance with Section 7.02(d) hereof for and as of the end of such fiscal year, such demonstration to be in a schedule (in form satisfactory to the Agent) which sets forth the computations used in determining such compliance;
(iv) as soon as possible and in any event (A) within 30 days after the Chief Financial Officer, Treasurer or any Assistant Treasurer of the Account Party knows or has reason to know that any ERISA Plan Termination Event described in clause (i) of the definition of ERISA Plan Termination Event with respect to any ERISA Plan or ERISA Multiemployer Plan has occurred and (B) within 10 days after the Account Party knows or has reason to know that any other ERISA Plan Termination Event with respect to any ERISA Plan or ERISA Multiemployer Plan has occurred, a statement of the Chief Financial Officer, Treasurer or Assistant Treasurer of the Account Party describing such ERISA Plan Termination Event and the action, if any, which the Account Party proposes to take with respect thereto;
(v) promptly after receipt thereof by the Account Party or any of its ERISA Affiliates from the PBGC, copies of each notice received by the Account Party or any such ERISA Affiliate of the PBGC's intention to terminate any ERISA Plan or ERISA Multiemployer Plan or to have a trustee appointed to administer any ERISA Plan or ERISA Multiemployer Plan;
(vi) promptly after receipt thereof by the Account Party or any of its ERISA Affiliates from an ERISA Multiemployer Plan sponsor, a copy of each notice received by the Account Party or any of its ERISA Affiliates concerning the imposition or amount of withdrawal liability in an aggregate principal amount of at least $1,000,000 pursuant to Section 4202 of ERISA in respect of which the Account Party may be liable;
(vii) promptly after the Account Party or any
Subsidiary becomes aware of the commencement thereof, notice of all
actions, suits, proceedings or other events of the type described in
Section 6.01(g) hereof;
(viii) promptly after the filing thereof, copies of each prospectus (excluding any prospectus contained in any Form S-8) and Current Report on Form 8-K, if any, which the Account Party or any Principal Subsidiary files with the Securities and Exchange Commission or any governmental authority which may be substituted therefor;
(ix) promptly after receipt thereof, any assertion of the character described in Section 8.01(h) hereof and the action the Account Party proposes to take with respect thereto; and
(x) promptly after requested, such other information respecting the financial condition, operations, properties, prospects or otherwise, of the Account Party or its Subsidiaries as the Agent on behalf of the Majority Lenders may from time to time reasonably request in writing.
ARTICLE VIII
DEFAULTS
SECTION 8.01. Events of Default. The following events shall each constitute an Event of Default if the same shall occur and be continuing after the grace period and notice requirement (if any) applicable thereto:
(a) The Account Party shall fail to pay any interest on any Advance or pursuant to Section 4.02 hereof within two days after the same becomes due; or the Account Party shall fail to reimburse the Issuing Bank for any Interest Drawing (as defined in the Letter of Credit) within two days after such reimbursement becomes due; or the Account Party shall fail to pay any fees or commissions hereunder within five days after the same becomes due; or the Account Party shall fail to make any other payment required to be made pursuant to Article II or Article III hereof when due; or
(b) Any representation or warranty made by the Account Party (or any of its officers or agents) in this Agreement, the Pledge Agreement or the Purchase Contract, or in any certificate or other writing delivered pursuant to this Agreement or the Purchase Contract, shall prove to have been incorrect in any material respect when made or deemed made; or
(c) The Account Party shall fail to perform or observe any term or covenant on its part to be performed or observed contained in Sections 7.01(d), Section 7.02(b) or (d), or Section 7.03(i) hereof; or
(d) The Account Party shall fail to perform or observe any other term or covenant on its part to be performed or observed contained in this Agreement or the Pledge Agreement and any such failure shall remain unremedied, after the earlier of written notice having been given to the Account Party by the Agent, the Issuing Bank or any Participating Bank, and actual knowledge thereof by the Account Party, for a period of 30 days; or
(e) The Account Party or any Principal Subsidiary shall fail to pay any of its Debt when due (including any interest or premium thereon but excluding Debt arising hereunder and excluding other Debt aggregating in no event more than $10,000,000 in principal amount at any one time) whether by scheduled maturity, required prepayment, acceleration, demand or otherwise, and such failure shall continue after the applicable grace period, if any, specified in any agreement or instrument relating to such Debt; or any other default under any agreement or instrument relating to any such Debt, or any other event, shall occur and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such default or event is to accelerate, or to permit the acceleration of, the maturity of such Debt; or any such Debt shall be declared to be due and payable, or required to be prepaid (other than by a regularly scheduled required prepayment or as a result of the Account Party's or such Principal Subsidiary's exercise of a prepayment option) prior to the stated maturity thereof; or
(f) The Account Party or any Principal Subsidiary shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall make an assignment for the benefit of creditors; or any proceeding shall be instituted by or against the Account Party or such Principal Subsidiary seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of its debts under any law relating to bankruptcy, insolvency, or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, or other similar official for it or for any substantial part of its property and, in the case of a proceeding instituted against the Account Party or such Principal Subsidiary, either the Account Party or such Principal Subsidiary shall consent thereto or such proceeding shall remain undismissed or unstayed for a period of 90 days or any of the actions sought in such proceeding (including without limitation the entry of an order for relief against the Account Party or such Principal Subsidiary or the appointment of a receiver, trustee, custodian or other similar official for the Account Party or such Principal Subsidiary or any of its property) shall occur; or the Account Party or such Principal Subsidiary shall take any corporate or other action to authorize any of the actions set forth above in this subsection (f); or
(g) Any judgment or order for the payment of money in excess of $10,000,000 shall be rendered against the Account Party or its properties, or any Principal Subsidiary or its properties, and either (i) enforcement proceedings shall have been commenced by any creditor upon such judgment or order and shall not have been stayed or (ii) there shall be any period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or
(h) Any material provision of any Loan Document or any
Related Document shall for any reason other than the express terms thereof
or the exercise of any right or option expressly contained therein cease to
be valid and binding on the Account Party, or shall be determined to be
invalid or unenforceable by any court, governmental agency or authority
having jurisdiction over the Account Party, or the Account Party shall deny
that it has any further liability or obligation under this Agreement or any
Related Document, or any party to a Related Document shall so assert in
writing; provided, that in the case of any party other than the Account
Party making such assertion in respect of any Related Document, such
assertion shall not in and of itself constitute an Event of Default
hereunder until (i) such asserting party shall cease to perform under and
in compliance with such Related Document, (ii) the Account Party shall fail
to diligently prosecute, by appropriate action or proceedings, a rescission
of such assertion or a binding determination as to the merits thereof or
(iii) such a binding determination shall have been made in favor of such
asserting party's position; or
(i) The Security Documents shall for any reason, except to the extent permitted by the terms thereof, fail or cease to create valid and perfected Liens (to the extent purported to be granted by such documents and subject to the exceptions permitted thereunder) in any of the Collateral (other than Liens in favor of the Trustee with respect to the interests of the Issuer under the Indenture Documents), provided, that such failure or cessation relating to any non-material portion of such Collateral shall not constitute an Event of Default hereunder unless the same shall not have been corrected within 30 days after the Account Party becomes aware thereof; or
(j) NU shall cease to own 100% of the issued and outstanding shares of the capital stock of the Account Party having ordinary voting power for the election of directors, free and clear of any Liens; or
(k) An event of default (as defined therein) shall have occurred and be continuing under the Indenture Documents.
SECTION 8.02. Remedies Upon Events of Default. Upon the
occurrence and during the continuance of any Event of Default, then, and in
any such event, the Agent with the concurrence of the Issuing Bank and the
Majority Lenders may, and upon the direction of the Issuing Bank and the
Majority Lenders the Agent shall (i) if the Letter of Credit shall not have
been issued, instruct the Issuing Bank to (whereupon the Issuing Bank
shall) by notice to the Account Party declare its commitment to issue the
Letter of Credit to be terminated, whereupon the same shall forthwith
terminate, (ii) if the Letter of Credit shall have been issued, instruct
the Issuing Bank to (whereupon the Issuing Bank shall) furnish to the
Trustee and the Paying Agent, at their respective corporate trust offices
as provided in the Indenture Documents, written notice of such Event of
Default in accordance with Section 8.1(A)(4)(1) of the Indenture and of the
Issuing Bank's determination to terminate the Letter of Credit on the fifth
business day (as defined in the Indenture) following the Trustee's and
Paying Agent's receipt of such written notice, (iii) if the Letter of
Credit shall have been issued, instruct the Issuing Bank to (whereupon the
Issuing Bank shall) furnish to the Trustee and the Paying Agent written
notice that the Interest Component will not be reinstated in the amount of
one or more Interest Drawings, all as provided in the Letter of Credit;
(iv) declare the Advances and all other principal amounts outstanding
hereunder, all interest thereon and all other amounts payable hereunder to
be forthwith due and payable, whereupon the Advances and all other
principal amounts outstanding hereunder, all such interest and all such
other amounts shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Account Party, and (v) instruct the
Issuing Bank to (whereupon the Issuing Bank shall) exercise all the rights
and remedies provided herein and under and in respect of the Security
Documents; provided, however, that in the event of the occurrence of any
Event of Default described in Section 8.01(f) with respect to the Account
Party, (A) the commitment of the Issuing Bank to issue the Letter of Credit
and the Commitments and the obligations of the Participating Banks to make
Advances shall automatically be terminated, and (B) the Advances and all
other principal amounts outstanding hereunder, all interest accrued and
unpaid thereon and all other amounts payable hereunder shall automatically
become due and payable, without presentment, demand, protest or any notice
of any kind, all of which are hereby expressly waived by the Account Party.
ARTICLE I
X THE AGENT, THE CO-AGENTS, THE PARTICIPATING BANKS AND THE ISSUING BANK
SECTION 9.01. Authorization of Agent; Actions of Agent and Issuing Bank. The Issuing Bank and each Participating Bank hereby appoint and authorize the Agent to take such action as agent on their behalf and to exercise such powers under this Agreement as are delegated to the Agent by the terms hereof, together with such powers as are reasonably incidental thereto; provided, however, that neither the Agent nor the Issuing Bank shall be required to take any action which exposes the Agent or the Issuing Bank to personal liability or which is contrary to this Agreement or applicable law. As to any matters not expressly provided for by any Related Document (including, without limitation, enforcement or collection thereof), neither the Agent nor the Issuing Bank shall be required to exercise any discretion or take any action. The Agent agrees to deliver promptly (i) to the Issuing Bank and each Participating Bank copies of each notice delivered to it by the Account Party and (ii) to each Participating Bank copies of each notice delivered to it by the Issuing Bank, in each case pursuant to the terms of this Agreement.
SECTION 9.02. Reliance, Etc. Neither the Agent, the Issuing Bank, nor any of their directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by it or them under or in connection with this Agreement or any Related Document, except for its or their own gross negligence or willful misconduct as determined by a court of competent jurisdiction. Without limitation of the generality of the foregoing, each of the Agent and the Issuing Bank (i) may consult with legal counsel (including counsel for the Account Party), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (ii) makes no warranty or representation to any Participating Bank and shall not be responsible to any Participating Bank for any statements, warranties or representations made in or in connection with this Agreement or any Related Document; (iii) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement or any Related Document on the part of the Account Party to be performed or observed, or to inspect any property (including the books and records) of the Account Party; (iv) shall not be responsible to any Participating Bank for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any Related Document or any other instrument or document furnished pursuant hereto and thereto; and (v) shall incur no liability under or in respect of this Agreement or any Related Document by acting upon any notice, consent, certificate or other instrument or writing (which may be by telegram, cable or telex), including, without limitation, any thereof from time to time purporting to be from the Trustee, believed by it to be genuine and signed or sent by the proper party or parties.
SECTION 9.03. The Agent, the Co-Agents, the Issuing Bank and Affiliates. The Agent, the Co-Agents and the Issuing Bank shall have the same rights and powers under this Agreement as any other Participating Bank and may exercise (or omit from exercising) the same as though they were not the Agent, the Co-Agents and the Issuing Bank, respectively, and the term Participating Bank shall, unless otherwise expressly indicated, include Deutsche Bank in its individual capacity. The Agent, the Co-Agents, the Issuing Bank and their respective Affiliates may accept deposits from, lend money to, act as trustee under indentures of, and generally engage in any kind of business with, the Account Party, any of its subsidiaries and any Person who may do business with or own securities of the Account Party or any such subsidiary, all as if Deutsche Bank was not the Agent or the Issuing Bank or Bank of Montreal and Credit Suisse were not the Co-Agents, and without any duty to account therefor to the Participating Banks.
SECTION 9.04. Participating Bank Credit Decision. Each of the Issuing Bank and each Participating Bank acknowledges that it has, independently and without reliance upon the Agent, the Co-Agents, the Issuing Bank or any other Participating Bank and based on the financial information referred to in Section 6.01(f) hereof and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each of the Issuing Bank and each Participating Bank also acknowledges that it will, independently and without reliance upon the Agent, the Co-Agents, the Issuing Bank or any other Participating Bank and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement.
SECTION 9.05. Indemnification. The Participating Banks agree to indemnify the Agent and the Issuing Bank (to the extent not reimbursed by the Account Party), ratably according to their respective Participation Percentages, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against the Agent or the Issuing Bank in any way relating to or arising out of this Agreement or any action taken or omitted by the Agent or the Issuing Bank under this Agreement, provided that no Participating Bank shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the Agent's or the Issuing Bank's gross negligence or willful misconduct. Without limitation of the foregoing, each Participating Bank agrees to reimburse the Agent and the Issuing Bank promptly upon demand for its ratable share of any amounts for which the Agent and the Issuing Bank are entitled to reimbursement or indemnity pursuant to Section 10.04 hereof but are not reimbursed by the Account Party.
SECTION 9.06. Successor Agent. The Agent may resign at any time
by giving written notice thereof to the Issuing Bank, the Participating
Banks and the Account Party, with any such resignation to become effective
only upon the appointment of a successor Agent pursuant to this Section
9.06. Upon any such resignation, the Issuing Bank shall have the right to
appoint a successor Agent, which shall be another commercial bank or trust
company reasonably acceptable to the Account Party, organized or licensed
under the laws of the United States, or of any State thereof. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent and
the execution and delivery by the Account Party and the successor Agent of
an agreement relating to the fees, if any, to be paid to the successor
Agent in connection with its acting as Agent hereunder, such successor
Agent shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Agent, and the retiring Agent
shall be discharged from its duties and obligations under this Agreement.
After any retiring Agent's resignation hereunder as Agent, the provisions
of this Article IX shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under this Agreement.
SECTION 9.07. Issuing Bank. (a) All notices received by the Issuing Bank pursuant to this Agreement or any Related Document (other than the Letter of Credit) shall be promptly delivered to the Agent for distribution to the Participating Banks.
(b) The Issuing Bank shall not amend or waive any provision or consent to the amendment or waiver of any Related Document without the written consent of the Majority Lenders.
(c) Upon receipt by the Issuing Bank from time to time of any amount pursuant to the terms of any Related Document (other than pursuant to the terms of this Agreement), the Issuing Bank shall promptly deliver to the Agent such amount.
ARTICLE
X MISCELLANEOUS
SECTION 10.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Pledge Agreement, nor consent to any
departure by the Account Party therefrom, shall in any event be effective
unless the same shall be in writing and signed by the Majority Lenders, and
then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided, however,
that no amendment, waiver or consent shall, unless in writing and signed by
the Issuing Bank and all the Participating Banks, do any of the following:
(a) waive, modify or eliminate any of the conditions specified in Article
V, (b) increase the Commitments of the Participating Banks that may be
maintained hereunder or subject the Participating Banks to any additional
obligations, (c) reduce the principal of, or interest on, the Advances, any
amount reimbursable on demand pursuant to Section 3.01, or any fees or
other amounts payable hereunder, (d) postpone any date fixed for any
payment of principal of, or interest on, the Advances, such reimbursable
amounts or any fees or other amounts payable hereunder (other than fees
payable to the Issuing Bank or the Agent pursuant to Section 2.03(b)
hereof), (e) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Advances, or the number of Participating
Banks which shall be required for the Participating Banks or any of them to
take any action hereunder, (f) amend this Agreement or the Pledge Agreement
in a manner intended to prefer one or more Participating Banks over any
other Participating Banks, (g) amend this Section 10.01, or (h) release any
of the Collateral otherwise than in accordance with any provisions for such
release contained in the Security Documents, or change any provision of any
Security Document providing for the release of all or substantially all of
the Collateral; and provided, further, that no amendment, waiver or consent
shall, unless in writing and signed by the Issuing Bank or the Agent in
addition to the Participating Banks required above to take such action,
affect the rights or duties of the Issuing Bank or the Agent, as the case
may be, under this Agreement or the Pledge Agreement.
SECTION 10.02. Notices, Etc. All notices and other communications provided for hereunder and under the other Loan Documents shall be in writing (including telegraphic, telex, telecopy or cable communication) and mailed, telegraphed, telexed, telecopied, cabled or delivered:
(i) if to the Account Party, to it in care of Northeast Utilities Service Company at 107 Selden Street, Berlin, Connecticut 06037 (telecopy: (203) 665-5457), Attention: Assistant Treasurer;
(ii) if to the Issuing Bank or the Agent, to it at its address at 31 West 52nd Street, New York, New York 10019 Attention: E. Scott Medla, (telephone: (212) 474-8025, telecopy: (212) 474-8256) with a copy to: Peter Sonza, telephone: (212) 474-8112, telecopy: (212) 474-7048).
(iii) if to any Participating Bank, to it at its address set forth on the signature pages hereof or in the Participation Assignment pursuant to which it became a Participating Bank; or
as to each party other than any Participating Bank, at such other address as shall be designated by such party in a written notice to the other parties, and, as to any Participating Bank, at such other address as shall be designated by such Participating Bank in a written notice to the Account Party and the Agent. All such notices and communications shall, when mailed, telegraphed, telexed, telecopied or cabled, be effective five days after when deposited in the mails, or when delivered to the telegraph company, confirmed by telex answerback, telecopied or delivered to the cable company, respectively, except that notices and communications to the Agent or the Issuing Bank pursuant to Article II, III or IV shall not be effective until received by the Agent or the Issuing Bank, as the case may be.
SECTION 10.03. No Waiver of Remedies. No failure on the part of any Participating Bank or the Issuing Bank to exercise, and no delay in exercising, any right hereunder or under any Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.
SECTION 10.04. Costs, Expenses and Indemnification. (a) The Account Party agrees to pay on demand all costs and expenses, if any (including, without limitation, reasonable counsel fees and expenses including, in the case of clause (ii) below, the reasonable allocated cost of internal counsel), of (i) the Agent and the Issuing Bank in connection with the preparation, negotiation, execution and delivery of the Loan Documents and the administration of the Loan Documents, the care and custody of any and all collateral, and any proposed modification, amendment, or consent relating thereto; and (ii) the Agent, the Co-Agents, the Issuing Bank and each Participating Bank in connection with the enforcement (whether through negotiations, legal proceedings or otherwise) of this Agreement, the Second Mortgage or any other Loan Document.
(b) The Account Party hereby agrees to indemnify and hold the Agent, the Co-Agents, the Issuing Bank and each Participating Bank and their respective officers, directors, employees, professional advisors and affiliates (each, an Indemnified Person ) harmless from and against any and all claims, damages, losses, liabilities, costs or expenses (including reasonable attorney's fees and expenses, whether or not such Indemnified Person is named as a party to any proceeding or investigation or is otherwise subjected to judicial or legal process arising from any such proceeding or investigation) which any of them may incur or which may be claimed against any of them by any person or entity (except to the extent such claims, damages, losses, liabilities, costs or expenses arise from the gross negligence or willful misconduct of the Indemnified Person):
(i) by reason of or in connection with the execution, delivery or performance of any of the Loan Documents, the Second Mortgage or the Related Documents or any transaction contemplated thereby, or the use by the Account Party of the proceeds of any Advance or the use by the Paying Agent or the Trustee of the proceeds of any drawing under the Letter of Credit;
(ii) in connection with or resulting from the utilization, storage, disposal, treatment, generation, transportation, release or ownership of any Hazardous Substance (A) at, upon or under any property of the Account Party or any of its Affiliates or (B) by or on behalf of the Account Party or any of its Affiliates at any time and in any place;
(iii) in connection with any documentary taxes, assessments or charges made by any governmental authority by reason of the execution and delivery of any of the Loan Documents or the Second Mortgage;
(iv) by reason of or in connection with the execution and delivery or transfer of, or payment or failure to make payment under, the Letter of Credit; provided, however, that the Account Party shall not be required to indemnify the Agent, the Co-Agents, the Issuing Bank or any Participating Bank pursuant to this Section for any claims, damages, losses, liabilities, costs or expenses to the extent caused by (A) the Issuing Bank's willful misconduct or gross negligence, as determined by a court of competent jurisdiction, in determining whether documents presented under the Letter of Credit are genuine or comply with the terms of the Letter of Credit or (B) the Issuing Bank's willful or grossly negligent failure, as determined by a court of competent jurisdiction, to make lawful payment under the Letter of Credit after the presentation to it by the Paying Agent of a draft and certificate strictly complying with the terms and conditions of the Letter of Credit; or
(v) by reason of any inaccuracy or alleged inaccuracy in any material respect, or any untrue statement or alleged untrue statement of any material fact, contained in the Information Memorandum or in any Preliminary Official Statement or Official Statement relating to the Bonds or any amendment or supplement thereto, except to the extent contained in or arising from information in the Information Memorandum or any Preliminary Official Statement or Official Statement relating to the Bonds supplied in writing by and describing the Issuing Bank.
(c) Nothing contained in this Section 10.04 is intended to limit the Account Party's obligations set forth in Articles II, III and IV. The Account Party's obligations under this Section 10.04 shall survive the creation and sale of any participation interest pursuant to Section 10.06 hereof and shall survive as well the repayment of all amounts owing to the Agent, the Co-Agents, the Issuing Bank and the Participating Banks under the Loan Documents and the termination of the Commitments. If and to the extent that the obligations of the Account Party under this Section 10.04 are unenforceable for any reason, the Account Party agrees to make the maximum contribution to the payment and satisfaction thereof which is permissible under applicable law.
SECTION 10.05. Right of Set-off. (a) Upon (i) the occurrence
and during the continuance of any Event of Default and (ii) the taking of
any action or the giving of any instruction by the Agent as specified by
Section 8.02 hereof, the Issuing Bank and each Participating Bank are
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by the Issuing Bank or such Participating
Bank to or for the credit or the account of the Account Party against any
and all of the obligations of the Account Party now or hereafter existing
under this Agreement in favor of the Issuing Bank or such Participating
Bank, irrespective of whether or not the Issuing Bank or such Participating
Bank shall have made any demand under this Agreement and although such
obligations may be unmatured. The Issuing Bank and each Participating Bank
agrees promptly to notify the Account Party after any such set-off and
application provided that the failure to give such notice shall not affect
the validity of such set-off and application. The rights of the Issuing
Bank and each Participating Bank under this Section are in addition to
other rights and remedies (including, without limitation, other rights of
set-off) which the Issuing Bank and/or such Participating Bank may have.
(b) The Account Party agrees that it shall have no right of off-set, deduction or counterclaim in respect of its obligations hereunder, and that the obligations of the Issuing Bank and of the several Participating Banks hereunder are several and not joint. Nothing contained herein shall constitute a relinquishment or waiver of the Account Party's rights to any independent claim that the Account Party may have against the Issuing Bank or any Participating Bank, but no Participating Bank shall be liable for the conduct of the Issuing Bank or any other Participating Bank, and the Issuing Bank shall not be liable for the conduct of any Participating Bank.
SECTION 10.06. Binding Effect; Assignments and Participants.
(a) This Agreement shall become effective when it shall have been executed
and delivered by the Account Party, the Agent, the Co-Agents, the Issuing
Bank and each Participating Bank named on the signature pages hereto and
thereafter shall be binding upon and inure to the benefit of the Account
Party, the Agent, the Co-Agents, the Issuing Bank and each Participating
Bank and their respective successors and assigns, except that the Account
Party shall not have the right to assign its rights hereunder or any
interest herein nor transfer any of its obligations without the prior
written consent of the Issuing Bank and each Participating Bank, and the
Issuing Bank may not assign its commitment to issue the Letter of Credit or
its obligations under or in respect of the Letter of Credit.
(b) Each Participating Bank may assign all or any portion of its rights and transfer its obligations under this Agreement, under the Letter of Credit or in any security hereunder, including, without limitation, any instruments securing the Account Party's obligations hereunder; provided that (i) no assignment by any Participating Bank may be made to any Person, except with the prior written consent of (A) the Account Party (which consent shall not be unreasonably withheld and, in the case of an assignment to another Participating Bank or to an Affiliate of a Participating Bank, shall not be required) and (B) the Issuing Bank, (ii) any assignment shall be of a constant and not a varying percentage of all of the assignor's rights and obligations hereunder and (iii) the parties to each such assignment shall execute and deliver to the Agent a Participation Assignment, together with a processing fee of $3,000. Upon receipt of a completed Participation Assignment and the processing fee, the Agent will record in a register maintained for such purpose the name of the assignee and the percentage participation interest assigned by the assignor and assumed by the assignee for purposes of the determination of such assignor's and assignee's respective Participation Percentages. Upon such execution, delivery, acceptance and recording, from and after the effective date specified in each Participation Assignment, which effective date shall be at least five Business Days after the execution thereof, the assignee shall, to the extent of such assignment, become a party hereto and have all of the rights and obligations of a Participating Bank hereunder and, to the extent of such assignment, such assigning Participating Bank shall be released from its obligations hereunder (without relieving such Participating Bank from any liability for damages, costs and expenses suffered by the Issuing Bank or the Account Party as a result of the failure by such Participating Bank to perform its obligations hereunder).
(c) Each Participating Bank may grant participations to one
or more Persons in all or any part of, or any interest (undivided or
divided) in, such Participating Bank's rights and obligations under this
Agreement (any such Person being referred to hereinafter as a Participant
and such interests are collectively, referred to hereinafter as the Rights
); provided, however, that (i) such Participating Bank's obligations under
this Agreement shall remain unchanged; (ii) any such Participant shall be
entitled to the benefits and cost protections provided for in Section 4.03
hereof on the same basis as if it were a Participating Bank hereunder;
(iii) the Account Party, the Agent and the Issuing Bank shall continue to
deal solely and directly with such Participating Bank in connection with
such Participating Bank's rights and obligations under this Agreement; and
(iv) no such Participant, other than an Affiliate of such Participating
Bank, shall be entitled to require such Participating Bank to take or omit
to take any action hereunder, unless such action or omission would have an
effect of the type described in subsections (c), (d) or (h) of Section
10.01 hereof.
(d) Notwithstanding anything contained in this Section 10.06 to the contrary, the Issuing Bank and any Participating Bank may assign and pledge all or any portion of the Advances (or participating interests therein) owing to the Issuing Bank or such Participating Bank to any Federal Reserve Bank (and its transferees) as collateral security pursuant to Regulation A of the Board of Governors of the Federal Reserve System and any Operating Circular issued by such Federal Reserve Bank. No such assignment shall release the Issuing Bank or such Participating Bank from its obligations hereunder.
SECTION 10.07. Relation of the Parties; No Beneficiary. No term, provision or requirement, whether express or implied, of any Loan Document, or actions taken or to be taken by any party thereunder, shall be construed to create a partnership, association, or joint venture between such parties or any of them. No term or provision of the Loan Documents shall be construed to confer a benefit upon, or grant a right or privilege to, any Person other than the parties hereto.
SECTION 10.08. Issuing Bank Not Liable. As between the Agent,
the Co-Agents, the Issuing Bank and the Participating Banks on the one
hand, and the Account Party on the other, the Account Party assumes all
risks of the acts or omissions of the Paying Agent, the Trustee and any
other beneficiary or transferee of the Letter of Credit with respect to its
use of the Letter of Credit. Neither the Agent, the Co-Agents, the Issuing
Bank, any Participating Bank, nor any of their respective officers or
directors shall be liable or responsible for: (a) the use which may be made
of the Letter of Credit or any acts or omissions of the Paying Agent, the
Trustee and any other beneficiary or transferee in connection therewith;
(b) the validity, sufficiency or genuineness of documents, or of any
endorsement thereon, even if such documents should prove to be in any or
all respects invalid, insufficient, fraudulent or forged; (c) payment by
the Issuing Bank against presentation of documents which do not comply with
the terms of the Letter of Credit, including failure of any documents to
bear any reference or adequate reference to the Letter of Credit; or (d)
any other circumstances whatsoever in making or failing to make payment
under the Letter of Credit, except that the Account Party shall have a
claim against the Issuing Bank, and the Issuing Bank shall be liable to the
Account Party, to the extent of any direct, as opposed to consequential,
damages suffered by the Account Party which the Account Party proves were
caused by (i) the Issuing Bank's willful misconduct or gross negligence, as
determined by a court of competent jurisdiction, in determining whether
documents presented under the Letter of Credit are genuine or comply with
the terms of the Letter of Credit or (ii) the Issuing Bank's willful or
grossly negligent failure, as determined by a court of competent
jurisdiction, to make lawful payment under the Letter of Credit after the
presentation to it by the Paying Agent of a draft and certificate strictly
complying with the terms and conditions of the Letter of Credit. In
furtherance and not in limitation of the foregoing, the Issuing Bank may
accept original or facsimile (including telecopy) sight drafts and
accompanying certificates presented under the Letter of Credit that appear
on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary.
SECTION 10.09. Confidentiality. In connection with the negotiation and administration of this Agreement and the other Loan Documents, the Account Party has furnished and will from time to time furnish to the Agent, the Co-Agents, the Issuing Bank and the Participating Banks (each, a Recipient ) written information which is identified to the Recipient when delivered as confidential (such information, other than any such information which (i) was publicly available, or otherwise known to the Recipient, at the time of disclosure, (ii) subsequently becomes publicly available other than through any act or omission by the Recipient or (iii) otherwise subsequently becomes known to the Recipient other than through a Person whom the Recipient knows to be acting in violation of his or its obligations to the Account Party, being hereinafter referred to as Confidential Information ). The Recipient will not knowingly disclose any such Confidential Information to any third party (other than to those Persons who have a confidential relationship with the Recipient), and will take all reasonable steps to restrict access to such information in a manner designed to maintain the confidential nature of such information, in each case until such time as the same ceases to be Confidential Information or as the Account Party may otherwise instruct. It is understood, however, that the foregoing will not restrict the Recipient's ability to freely exchange such Confidential Information with prospective assignees of or participants in the Recipient's position herein, but the Recipient's ability to so exchange Confidential Information shall be conditioned upon any such prospective assignee's or participant's entering into an understanding as to confidentiality similar to this provision. It is further understood that the foregoing will not prohibit the disclosure of any or all Confidential Information in any litigation or proceedings between the Account Party and such Recipient and/or if and to the extent that such disclosure may be required (i) by a regulatory agency or otherwise in connection with an examination of the Recipient's records by appropriate authorities, (ii) pursuant to court order, subpoena or other legal process or (iii) otherwise, as required by law; in the event of any required disclosure under clause (ii) or (iii), above, the Recipient agrees to use reasonable efforts to inform the Account Party as promptly as practicable unless the Recipient is prohibited from doing so by court order, subpoena or other legal process.
SECTION 10.10 Waiver of Jury Trial. The Account Party, the Agent, the Co-Agents, the Issuing Bank, and the Participating Banks each hereby irrevocably waives all right to trial by jury in any action, proceeding or counterclaim arising out of or relating to this Agreement or any other Loan Document, or any other instrument or document delivered hereunder or thereunder.
SECTION 10.11. Governing Law. This Agreement and the Pledge Agreement shall be governed by, and construed in accordance with, the laws of the State of New York. The Account Party, the Agent, the Co-Agents, the Issuing Bank and each Participating Bank each (i) irrevocably submits to the jurisdiction of any New York State court or Federal court sitting in New York City in any action arising out of any Loan Document, (ii) agrees that all claims in such action may be decided in such court, (iii) waives, to the fullest extent it may effectively do so, the defense of an inconvenient forum and (iv) consents to the service of process by mail. A final judgment in any such action shall be conclusive and may be enforced in other jurisdictions. Nothing herein shall affect the right of any party to serve legal process in any manner permitted by law or affect its right to bring any action in any other court.
SECTION 10.12. Execution in Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
THE ACCOUNT PARTY:
THE CONNECTICUT LIGHT AND
POWER COMPANY
By /s/ Bruce F. Garelick Title: Assistant Treasurer THE AGENT AND ISSUING BANK: |
DEUTSCHE BANK AG, NEW YORK
BRANCH and/or CAYMAN ISLANDS
BRANCH,
as Agent and as Issuing Bank
By /s/Thomas L. Newberry Title: Vice President By /s/ E. Scott Medla Title: Vice President |
THE PARTICIPATING BANKS:
DEUTSCHE BANK AG, NEW YORK
BRANCH and/or CAYMAN ISLANDS
BRANCH
By /s/Thomas L. Newberry Title: Vice President By /s/ E. Scott Medla Title: Vice President |
Participation Percentage: 23.73552%
Address for Notices
Deutsche Bank AG, New York Branch
31 West 52nd Street
New York, New York 10019
Attention: E. Scott Medla
Telephone: 212.474.8025
Fax: 212.474.8256
BANK OF MONTREAL,
as Participating Bank and Co-Agent
By /s/Joseph M. Longpre Title: Managing Director |
Participation Percentage: 14.04872%
Address for Notices
Bank of Montreal
430 Park Avenue, 16th floor
New York, New York 10022
Attention: John L. Smith
Telephone: 212.605.1617
Fax: 212.605.1648
CREDIT SUISSE,
as Participating Bank and Co-Agent
By /s/Juerg Johner Title: By/s/Robert C. Rubino Title: |
Participation Percentage: 14.04872%
Address for Notices
Credit Suisse
12 E. 49th Street, 44th floor
New York, New York 10017
Attention: Juerg Johner
Telephone: 212.238.5404
Fax: 212.238.5439
BANK OF AMERICA NT & SA
By /s/Paul Farrell Title: Vice President |
Participation Percentage: 6.02088%
Address for Notices
Bank of America NT & SA
335 Madison Avenue
New York, New York 10017
Attention: John Jordan
Telephone: 212.503.7558
Fax: 212.503.7066
THE BANK OF NEW YORK
By /s/Mary Lou Bradley Title: Vice President |
Participation Percentage: 6.02088%
Address for Notices
The Bank of New York
1 Wall Street, 19th floor
New York, New York 10286
Attention: Mary Lou Bradley
Telephone: 212.635.7605
Fax: 212.635.7923
THE BANK OF NOVA SCOTIA
By /s/ T.M. Pitcher Title: Vice President |
Participation Percentage: 6.02088%
Address for Notices
The Bank of Nova Scotia
101 Federal Street, 16th floor
Boston, Massachusetts 02208
Attention: Carolyn Lopez
Telephone: 617.737.6313
Fax: 617.951.2177
FLEET BANK, N.A.
By /s/Suresh Chivukula Title: Vice President |
Participation Percentage: 6.02088%
Address for Notices
Fleet Bank, N.A.
One Constitution Plaza
Hartford, Connecticut 06115
Attention: Suresh V. Chivukula
Telephone: 203.244.6038
Fax: 203.244.5391
THE INDUSTRIAL BANK OF JAPAN,
LIMITED, NEW YORK BRANCH
By /s/Robert W. Ramage, Jr. Title: Senior Vice President |
Participation Percentage: 6.02088%
Address for Notices
The Industrial Bank of Japan
245 Park Avenue
New York, New York 10167
Attention: Steven Pottle
Telephone: 212.309.6443
Fax: 212.856.9450
THE LONG-TERM CREDIT BANK
OF JAPAN
By /s/Rikuichi Yoshisue Title: Joint General Manager |
Participation Percentage: 6.02088%
Address for Notices
The Long-Term Credit Bank of Japan
165 Broadway
New York, New York 10006
Attention: Yumiko Noda
Telephone: 212.335.4515
Fax: 212.608.2371/2529
MELLON BANK, N.A.
By /s/Mary Ellen Usher Title: Vice President |
Participation Percentage: 6.02088%
Address for Notices
Mellon Bank, N.A.
One Mellon Bank Center, Room 4425
Pittsburgh, Pennsylvania 15258-0001
Attention: Mary Ellen Usher
Telephone: 412.236.1203
Fax: 412.234.6375
SOCIETE GENERALE
By /s/Gordon N. Eadon Title: Vice President By /s/G. St. Denis Title: Assistant Vice President |
Participation Percentage: 6.02088%
Address for Notices
Societe Generale
50 Rockefeller Plaza
New York, New York 10020
Attention: Gordon St. Denis
Telephone: 212.830.7141
Fax: 212.581.8752
SCHEDULE I
APPLICABLE LENDING OFFICES
Name of Domestic Eurodollar
Participating Bank Lending Office Lending Office
Bank of America NT & SA 1850 Gateway Boulevard Same as Domestic
1850 Gateway Boulevard Concord, CA 94520 Tel: Lending Office
(510) 675-7755 Fax:
(510) 675- 7531/7532
Bank of Montreal 430 Park Avenue Same as Domestic
New York, NY 10022 Lending Office
Tel: (212) 605-1436
Fax: (212) 605-1525
The Bank of New York 101 Barclay Street Same as Domestic
New York, NY 10286 Lending Office, c/o
Attn: Commercial Loans Eurodollar/Cayman
Dept. Funding Area
The Bank of Nova Scotia 101 Federal Street Same as Domestic
Boston, MA 02110 Lending Office
Tel: (617) 737-6300
Fax: (617) 951-2177
Credit Suisse 12 East 49th Street Same as Domestic
44th Floor Lending Office
New York, NY 10017
Tel: (212) 238-5404
Fax: (212) 238-5439
Deutsche Bank AG, 31 West 52 Street New York Branch
New York Branch New York, NY 10019 and/or Cayman
Tel: (212) 474-8025 Islands Branch
Fax: (212) 474-8256 31 West 52 Street
New York, NY 10019
Fleet Bank, N.A. One Constitution Plaza Same as Domestic
CTHMMO3G Lending Office
Hartford, CT 06115
Tel: (203) 244-6038
Fax: (203) 244-5391
The Industrial Bank of 245 Park Avenue Same as Domestic
Japan, New York, NY 10167 Lending Office
Limited, New York Branch Tel: (212) 309-6449
Fax: (212) 949-0134
The Long-Term Credit Bank 165 Broadway Same as Domestic
of Japan New York, NY 10006 Lending Office
Tel: (212) 335-4801
Fax: (212) 608-3452
Mellon Bank, N.A. Loan Administration 153-2303 Same as Domestic
P.O. Box 656 Lending Office
Pittsburgh, PA 15230-9972
Attn: Sue Cooke
Tel: (412) 234-8285 Fax:
(412) 236-2028/
234- 5049
Societe Generale 50 Rockefeller Plaza Same as Domestic
New York, NY 10020 Lending Office
Tel: (212) 830-7141
Fax: (212) 581-8752
|
SCHEDULE II
PENDING ACTIONS
NONE
[Form of Letter of Credit - CDA/CL&P SERIES A]
EXHIBIT 1.01A
IRREVOCABLE LETTER OF CREDIT
NO. 83952561
September 22, 1993
Shawmut Bank Connecticut, National Association
777 Main Street
Hartford, Connecticut 06115
Attention: Corporate Trust Department
Dear Sir or Madam:
We hereby establish, at the request and for the account of The Connecticut Light and Power Company (the "Account Party"), in your favor, as Paying Agent (the "Paying Agent") under that certain Indenture of Trust, dated as of September 1, 1993 (the "Indenture"), by and between the Connecticut Development Authority (the "Issuer") and Shawmut Bank Connecticut, National Association, as trustee (the "Trustee"), pursuant to which $245,500,000 in aggregate principal amount of the Issuer's Pollution Control Revenue Refunding Bonds (The Connecticut Light and Power Company Project - 1993A Series) (the "Bonds"), are being issued, our Irrevocable Letter of Credit No. 83952561, in the amount of US$249,133,000.00 (TWO HUNDRED FORTY-NINE MILLION ONE HUNDRED THIRTY-THREE THOUSAND AND NO ONE- HUNDREDTHS UNITED STATES DOLLARS) (subject to reduction and reinstatement as provided below).
(1) Credit Termination Date. This Letter of Credit shall expire on
the earliest to occur of (i) September 22, 1996 (the "Stated Termination
Date"), (ii) the date upon which we honor a draft accompanying a written
and completed certificate signed by you in substantially the form of
Exhibit 2 attached hereto, and stating therein that such draft is the final
draft to be drawn under this Letter of Credit and that, upon the honoring
of such draft, this Letter of Credit will expire in accordance with its
terms, (iii) the date upon which we receive a written certificate signed by
you and stating therein that no Bonds entitled to the benefits of this
Letter of Credit (as determined in accordance with the Indenture)
("Eligible Bonds") are "Outstanding" under (and as defined in) the
Indenture, (iv) the fifth business day following receipt by you and the
Trustee of written notice from us that an Event of Default (as defined
below) has occurred under the Reimbursement Agreement (as defined below)
and of our determination to terminate this Letter of Credit on such fifth
business day and (v) the date upon which we receive a written certificate
signed by you and stating therein that a substitute or replacement Credit
Facility (as defined in the Indenture) has been provided pursuant to
Section 3.12 of the "Agreement referred to (and as defined) in the
Indenture (such earliest date being the "Credit Termination Date").
As used herein, the term "business day" shall mean any day of the year
(i) that is not a Saturday or Sunday, (ii) that is a day on which banks
located in Hartford, Connecticut and New York, New York are not required or
authorized to remain closed and (iii) that is a day on which banking
institutions in all of the cities in which the principal offices of the
Trustee, the Paying Agent and the Remarketing Agent (as defined in the
Indenture) are located are not required or authorized to remain closed and
(iv) that is a day on which the New York Stock Exchange, Inc. is not
closed.
As used herein "Reimbursement Agreement" shall mean the Letter of Credit and Reimbursement Agreement, dated as of September 1, 1993, between the Account Party, us and certain Co-Agents and Participating Banks referred to therein, and the term "Event of Default" shall mean an "Event of Default" as that term is defined in the Reimbursement Agreement.
(2) Principal, Interest and Premium Components. The aggregate amount which may be drawn under this Letter of Credit, subject to reductions in amount and reinstatement as provided below, is US$249,133,000.00 (TWO HUNDRED FORTY-NINE MILLION ONE HUNDRED THIRTY-THREE THOUSAND AND NO ONE- HUNDREDTHS UNITED STATES DOLLARS), of which the aggregate amounts set forth below may be drawn as indicated.
(i) An aggregate amount not exceeding US$245,500,000.00 (TWO
HUNDRED FORTY-FIVE MILLION FIVE HUNDRED THOUSAND AND NO ONE-HUNDREDTHS
UNITED STATES DOLLARS), as such amount may be reduced and reinstated
as provided below, may be drawn in respect of payment of principal
(whether upon scheduled or accelerated maturity, or upon redemption)
of Eligible Bonds or the portion of the purchase price of Eligible
Bonds corresponding to principal (the "Principal Component").
(ii) An aggregate amount not exceeding US$3,633,000.00 (THREE MILLION SIX HUNDRED THIRTY-THREE THOUSAND AND NO ONE-HUNDREDTHS UNITED STATES DOLLARS), as such amount may be reduced and reinstated as provided below, may be drawn in respect of payment of (A) accrued and unpaid interest on Eligible Bonds not in the Flexible Mode (as defined in the Indenture) or that portion of the redemption price or purchase price of such Eligible Bonds corresponding to accrued and unpaid interest, but not more than an amount equal to accrued and unpaid interest on such Eligible Bonds for up to a maximum of 45 days immediately preceding the date of such drawing and (B) unpaid interest (whether accrued or to accrue) on Eligible Bonds in the Flexible Mode or that portion of the redemption price or purchase price of such Eligible Bonds corresponding to such interest, but not more than an amount equal to such interest on such Eligible Bonds for up to a maximum of 45 days immediately preceding the next Purchase Date (as defined in the Indenture) for each such Eligible Bond (or, if interest on any such Eligible Bond was not paid on the most recent Purchase Date for such Bond, for up to a maximum of 45 days immediately preceding the date of such drawing), calculated, in each case referred to in the foregoing clause (A) or clause (B) at a maximum rate of twelve percent (12%) per annum, or such lesser rate of interest as shall equal the Maximum Interest Rate (as defined in the Indenture) in effect under the Indenture with respect to such Eligible Bonds, and in any case calculated on the basis of a year of 365 or 366 days (as applicable) for the actual days elapsed (the "Interest Component").
(iii) An aggregate amount not exceeding US$0.00 (ZERO UNITED STATES DOLLARS) may be drawn in respect of premium on Eligible Bonds (the "Premium Component"). If, subsequent to the date hereof, the Premium Component shall be increased by us at the request of the Account Party, the Premium Component shall be subject to reduction as provided below, and amounts drawn in respect thereof shall not be subject to reinstatement.
(3) Drawings. Funds under this Letter of Credit are available to you against (i) your draft, stating on its face: "Drawn under Irrevocable Letter of Credit No. 83952561, dated September 22, 1993", and (ii) the appropriate certificate specified below, purportedly executed by you and appropriately completed.
Exhibit Setting Forth
Type of Drawing Form of Certificate Required
Tender Drawing Exhibit 1
(as hereinafter defined)
Redemption/Mandatory Exhibit 2
Purchase Drawing
(as hereinafter defined)
Interest Drawing Exhibit 3
(as hereinafter
defined)
|
Drafts and certificates hereunder shall be dated the date of presentation and shall be presented at our office located at 31 West 52nd Street, New York, New York 10019 Attention: Volker Fischer or James Roces, Trade Finance, 6th Floor (telephone: (212) 474-7978) (or at such other office as we may designate by written notice to you). Presentation of such drafts and certificates may be made (a) by physical presentation of such drafts and certificates or (b) by facsimile transmission of such drafts and certificates received by us at (212) 474-7989 with a copy to Peter Sonza at (FAX) (212) 474-7048 (or at such other number as we may designate by written notice to you) with prior telephone notice to us at (212) 474-7978, Attention: Volker Fischer or James Roces, (or at such other number as we may designate by written notice to you) that such presentation is to be made by facsimile transmission and with the original executed drafts and certificates to be received by us not later than our close of business on the next business day, it being understood that payments hereunder shall be made upon receipt by us of such facsimile transmission; provided, however, that presentations of drafts and certificates relating to Tender Drawings in respect of Eligible Bonds in the Flexible Mode shall in all instances be made in accordance with the foregoing clause (b). Drafts drawn under and in strict compliance with the terms of this Letter of Credit will be duly honored by us upon presentation thereof in accordance with this Paragraph 3 if presented on or prior to 4:00 P.M. (New York City time) on the Credit Termination Date as follows:
(i) Tender Drawings; Flexible Mode. In the case of drafts and certificates relating to Tender Drawings in respect of Eligible Bonds in the Flexible Mode presented in accordance with the foregoing clause (b):
(A) if such drafts and certificates are presented as aforesaid at or prior to 1:30 P.M. (New York City time) on a business day, and provided that such drafts and certificates strictly conform to the requirements of this Letter of Credit, we will initiate a wire transfer of the amount so drawn to your account indicated below at or prior to 3:30 P.M. (New York City time) on the same business day;
(B) if such drafts and certificates are presented as aforesaid after 1:30 P.M. but at or prior to 4:00 P.M. (New York City time) on a business day, and provided that such drafts and certificates strictly conform to the requirements of this Letter of Credit, we will initiate a wire transfer of the amount so drawn to your account indicated below at or prior to 10:00 A.M. on the business day next succeeding the business day on which such drafts and certificates were presented (notwithstanding that such day of presentation may have been the Credit Termination Date); and
(C) if such drafts and certificates are presented as aforesaid after 4:00 P.M. (New York City time) on a business day, and provided that such drafts and certificates strictly conform to the requirements of this Letter of Credit, we will initiate a wire transfer of the amount so drawn to your account indicated below at or prior to 1:00 P.M. (New York City time) on the business day next succeeding the business day on which such drafts and certificates were presented (notwithstanding that such day of presentation may have been the Credit Termination Date);
and
(ii) All Other Drawings: In the case of any other drafts and certificates:
(A) if such drafts and certificates are presented as aforesaid at or prior to 4:00 P.M. (New York City time) on a business day, and provided that such drafts strictly conform to the requirements of this Letter of Credit, we will initiate a wire transfer of the amount so drawn to your account indicated below at or prior to 10:00 A.M. (New York City time) on the business day next succeeding the business day on which such drafts and certificates were presented (notwithstanding that such day of presentation may have been the Credit Termination Date); and
(B) if such drafts and certificates are presented as aforesaid after 4:00 P.M. (New York City time) on a business day, and provided that such drafts and certificates strictly conform to the requirements of this Letter of Credit, we will initiate a wire transfer of the amount so drawn to your account indicated below at or prior to 1:00 P.M. (New York City time) on the business day next succeeding the business day on which such drafts and certificates were presented (notwithstanding that such day of presentation may have been the Credit Termination Date).
Wire transfers of funds paid in respect of any drawing hereunder shall be made to you at Shawmut Bank Connecticut, National Association, Hartford, Connecticut, ABA# 011900445, Account No. 0067548290 Corporate Trust Admin. Wire Account, Attention: K. Larimore, Reference: CDA/CL&P Series 1993A, or to such other account as you may from time to time specify to us in writing. All payments made by us under this Letter of Credit will be made with our own funds and not with any funds of the Account Party or the Issuer.
(4) Reductions. The Interest Component shall be reduced immediately
following our honoring any draft drawn hereunder to pay unpaid interest on
Eligible Bonds or to pay that portion of the purchase price or redemption
price corresponding to unpaid interest on Eligible Bonds, in each case by
an amount equal to the amount of such draft (any such drawing being an
"Interest Drawing"). The Principal Component shall be reduced immediately
following our honoring any draft drawn hereunder: (i) pursuant to Section
5.8(B) of the Indenture to pay that portion of purchase price corresponding
to principal of Eligible Bonds that are (A) subject to mandatory tender for
purchase pursuant to Section 2.3(G)(1)(c) or 2.3(G)(2)(d)(ii) of the
Indenture or (B) tendered for purchase by the holders thereof pursuant to
2.3(G)(2)(c) of the Indenture, (ii) pursuant to Section 5.8(C) of the
Indenture to pay that portion of purchase price corresponding to principal
of Eligible Bonds that are the subject of a failed conversion pursuant to
Section 2.3(G)(1)(b) or 2.3(G)(2)(b) of the Indenture, as appropriate (any
such drawing in respect of the circumstances referred to in the foregoing
clause (i) or this clause (ii) being a "(Tender Drawing)", (iii) pursuant
to Section 5.8(A) of the Indenture to pay the principal of Eligible Bonds
or that portion of the redemption price of Eligible Bonds corresponding to
principal, whether at stated maturity, upon acceleration or upon
redemption, or (iv) pursuant to Section 5.8(B) of the Indenture to pay that
portion of the purchase price corresponding to principal of Eligible Bonds
that are subject to mandatory tender for purchase pursuant to Section
2.3(G)(2)(d)(i) of the Indenture (any such drawing in respect of the
circumstances referred to in the foregoing clause (iii) or in this clause
(iv) being a "Redemption/Mandatory Purchase Drawing"), in each such case by
an amount equal to the amount of such draft. The Premium Component shall
be reduced immediately following our honoring any draft drawn hereunder to
pay premium on Eligible Bonds in connection with a Redemption/Mandatory
Purchase Drawing, by an amount equal to the amount of such draft.
Additionally, upon receipt of a Notice of Reduction in the form of Exhibit 4 to this Letter of Credit purportedly executed by you, we will reduce the Principal Component, Interest Component and Premium Component to the amounts therein stated.
(5) Reinstatement. The Interest Component and the Principal
Component shall, from time to time, be reinstated by us in accordance with,
and only to the extent provided in, the following subparagraphs (i) and
(ii). In no event shall reductions in the Premium Component be reinstated.
(i) Interest Component. Reductions in the Interest Component resulting from Interest Drawings shall be reinstated as follows:
(A) Immediately following each drawing hereunder to pay unpaid interest on Eligible Bonds in the Flexible Mode or to pay that portion of purchase price, but not redemption price, corresponding to unpaid interest on Eligible Bonds in the Flexible Mode, the amount so drawn shall be automatically reinstated to the Interest Component unless, not later than the business day preceding such drawing you shall have received written notice from us that we will not reinstate the Interest Component in the amount of such drawing. On the fifth day following each drawing hereunder to pay accrued and unpaid interest on Eligible Bonds that are not in the Flexible Mode, or to pay that portion of purchase price, but not redemption price, corresponding to accrued and unpaid interest on Eligible Bonds that are not in the Flexible Mode, the amount so drawn shall be automatically reinstated to the Interest Component, unless you shall have theretofore received written notice from us that we will not reinstate the Interest Component in the amount of such drawing. Any notice of non-reinstatement delivered pursuant to this subparagraph (i)(A) shall be in writing and shall be delivered to you by hand delivery or facsimile transmission.
(B) If, subsequent to any such delivery of a notice of non- reinstatement as aforesaid, we shall deliver to you, by hand delivery or facsimile transmission, a Notice of Reinstatement in the form of Exhibit 5 hereto, then, upon such delivery to you, the Interest Component shall be immediately reinstated to the extent specified in such Notice of Reinstatement.
(C) In no event shall the Interest Component be reinstated to an amount in excess of 45 days' interest on Eligible Bonds, computed at the rate of 12% per annum on the basis of a year of 365 or 366 days (as applicable) for the actual days elapsed, or such lesser rate of interest as shall equal the Maximum Interest Rate (as defined in the Indenture) in effect under the Indenture with respect to such Eligible Bonds.
(ii) Principal Component. Reductions in the Principal Component resulting from Redemption/Mandatory Purchase Drawings shall in no event be reinstated. Reductions in the Principal Component resulting from Tender Drawings shall be reinstated as follows:
(A) Immediately upon receipt by us of proceeds from the remarketing of Pledged Bonds (as defined in the Indenture), or of written notice from you that you have received such proceeds (or a window receipt guaranteeing same day payment in immediately available funds of such proceeds as contemplated by Section 9.19(A) of the Indenture), the Principal Component shall be reinstated automatically by the amount of such proceeds.
(B) Immediately upon your receipt from us, by hand delivery or facsimile transmission, of a Notice of Reinstatement in the form of Exhibit 5 hereto, the Principal Component shall be immediately reinstated to the extent specified in such Notice of Reinstatement.
(C) In no event shall the Principal Component be reinstated to an amount in excess of the aggregate principal amount of Eligible Bonds then outstanding under the Indenture.
Any Notice of Reinstatement delivered to you in the form set forth in Exhibit 5 hereto, whether delivered pursuant to subparagraph (i) or subparagraph (ii), above, may be combined, in a single such Notice, with any other Notice of Reinstatement delivered pursuant to the other such subparagraph.
(6) Notices. Communications (other than drawings) with respect to this Letter of Credit shall be in writing and shall be addressed to us at 31 West 52nd Street, New York, New York 10019, Attention: E. Scott Medla (telephone: (212) 474-8025, telecopy: (212) 474-8256) with a copy to: Peter Sonza (telephone: (212) 474-8112, telecopy: (212) 474-7048) (or at such other office as we may designate by written notice to you), specifically referring to the number of this Letter of Credit.
(7) Transfer. This Letter of Credit is transferable in its entirety (but not in part) to any transferee who has succeeded you as Paying Agent under the Indenture and may be successively so transferred. Transfer of the available balance under this Letter of Credit to such transferee shall be effected by the presentation to us of this Letter of Credit accompanied by a certificate substantially in form set forth in Exhibit 6.
(8) Governing Law, Etc. Except as otherwise provided herein, this Letter of Credit shall be governed by and construed in accordance with the Uniform Customs and Practices for Documentary Credits (1983 Revision) Publication No. 400 of the International Chamber of Commerce ("UCP") and, to the extent not inconsistent with the UCP, the laws of the State of New York, including the Uniform Commercial Code as in effect in the State of New York. This Letter of Credit sets forth in full our undertaking, and, except as expressly set forth herein, such undertaking shall not in any way be modified, amended, amplified or limited by reference to any document, instrument or agreement referred to herein (including, without limitation, the Bonds, the Indenture and the Reimbursement Agreement), except only the certificates and the drafts referred to herein; and any such reference shall not be deemed to incorporate herein by reference any document, instrument or agreement except for such certificates and such drafts. Whenever and wherever the terms of this Letter of Credit shall refer to the purpose of a draft hereunder, or the provisions of any agreement or document pursuant to which such draft may be presented hereunder, such purpose or provisions shall be conclusively determined by reference to the certificate accompanying such draft; in furtherance of this sentence, whether any drawing is in respect of payment of regularly scheduled interest on the Bonds or of principal of or interest on the Bonds upon scheduled or accelerated maturity or is a Tender Drawing or a Redemption/Mandatory Purchase Drawing shall be conclusively determined by reference to the certificate accompanying such drawing.
Very truly yours,
DEUTSCHE BANK AG, NEW YORK BRANCH
By _______________________________
Title:
By _______________________________
Title:
EXHIBIT 1
TO THE LETTER OF CREDIT
CERTIFICATE FOR TENDER DRAWING
The undersigned, a duly authorized officer of __________________________, (the "Paying Agent"), hereby certifies as follows to DEUTSCHE BANK AG, NEW YORK BRANCH (the "Bank"), with reference to Irrevocable Letter of Credit No. 83952561 (the "Letter of Credit") issued by the Bank in favor of the Paying Agent. Terms defined in the Letter of Credit and used but not defined herein shall have the meanings given them in the Letter of Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for the holders of the Bonds.
(2) The Paying Agent is making a Tender Drawing under the Letter of Credit in the amount of $________ pursuant to Section 5.8 of the Indenture to pay that portion of the purchase price corresponding to principal of Eligible Bonds that are
[subject to mandatory tender for purchase pursuant to Section
[2.3(G)(1)(c)] [2.3(G)(2)(d)(ii)] of the Indenture.]
[tendered for purchase by the holders thereof pursuant to Section 2.3(G)(2)(c) of the Indenture.]
[the subject of a failed conversion pursuant to Section 2.3(G)(1)(b) or 2.3(G)(2)(b) of the Indenture.]
(3) The amount of purchase price corresponding to principal of Eligible Bonds and with respect to the payment of which the Paying Agent, pursuant to the foregoing Sections of the Indenture, is drawing under the Letter of Credit, is as follows, and the amount of the draft accompanying this Certificate does not exceed such amount:
Principal: $_______________________________
(4) The amount of the draft accompanying this Certificate being drawn in respect of purchase price corresponding to principal of Eligible Bonds, as indicated in paragraph (3), above, does not exceed the Principal Component of the Letter of Credit. The amount of the draft accompanying this Certificate in respect of purchase price corresponding to principal of such Bonds has been computed in accordance with the terms and conditions of such Eligible Bonds and the Indenture.
(5) No proceeds of this drawing will be applied to the payment of purchase price of any Bonds that are not Eligible Bonds, including any Pledged Bonds (as defined in the Indenture), any Borrower Bonds (as defined in the Indenture) and any Bonds in the Fixed Rate Mode (as defined in the Indenture).
[(6) The Eligible Bonds in respect of which this drawing is being made are Eligible Bonds in the Flexible Mode, and payment of this drawing shall be made in accordance with Paragraph 3(i) of the Letter of Credit.]
[(6) The Eligible Bonds in respect of which this drawing is being made are not Eligible Bonds in the Flexible Mode, and payment of this drawing shall be made in accordance with Paragraph 3(ii) of the Letter of Credit].
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this Certificate as of the ____ day of _____________, 19__.
[NAME OF PAYING AGENT],
as Paying Agent
By _______________________________
Title:
EXHIBIT 2
TO THE LETTER OF CREDIT
CERTIFICATE FOR REDEMPTION/
MANDATORY PURCHASE DRAWING
The undersigned, a duly authorized officer of ________, (the "Paying Agent"), hereby certifies as follows to DEUTSCHE BANK AG, NEW YORK BRANCH (the "Bank"), with reference to Irrevocable Letter of Credit No. 83952561 (the "Letter of Credit") issued by the Bank in favor of the Paying Agent. Terms defined in the Letter of Credit and used but not defined herein shall have the meanings given them in the Letter of Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for the holders of the Bonds.
(2) The Paying Agent is making a Redemption/Mandatory Purchase Drawing under the Letter of Credit in the amount of $______________
[pursuant to Section 5.8(A) and Section 8.5 of the Indenture to pay the principal of Eligible Bonds due pursuant to the Indenture upon maturity or as a result of acceleration of such Eligible Bonds in accordance with the Indenture and the terms of such Eligible Bonds.]
[pursuant to Section 5.8(A) of the Indenture to pay that portion of the redemption price corresponding to principal of [and premium on] Eligible Bonds due pursuant to the Indenture upon redemption of such Eligible Bonds in accordance with the Indenture and the terms of such Eligible Bonds.]
[pursuant to Section 5.8(B) of the Indenture to pay that portion of the purchase price of Eligible Bonds corresponding to principal that are subject to mandatory tender for purchase pursuant to Section 2.3(G)(2)(d)(i) of the Indenture.]
(3) The amount of [principal of] [redemption price corresponding to principal of] [and premium on] [purchase price corresponding to principal of] Eligible Bonds which is due and payable and with respect to the payment of which the Paying Agent, pursuant to the foregoing Section[s] of the Indenture, is to draw under the Letter of Credit is as follows, and the amount of the draft accompanying this Certificate does not exceed such amount:
Principal: $ _____________
[Premium: $ _____________
(4) The amount of the draft accompanying this Certificate being drawn
in respect of payment of [principal] [redemption price corresponding to
principal] [purchase price corresponding to principal] of Eligible Bonds,
as indicated in paragraph (3), above, does not exceed the Principal
Component of the Letter of Credit. [The amount of the draft accompanying
this Certificate being drawn in respect of that portion of the redemption
price of Eligible Bonds corresponding to premium, as indicated in paragraph
(3), above, does not exceed the Premium Component of the Letter of Credit.]
The amount of the draft accompanying this Certificate in respect of payment
of [principal] [redemption price corresponding to principal] [and premium]
[purchase price corresponding to principal] of such Eligible Bonds has been
computed in accordance with the terms and conditions of such Eligible Bonds
and the Indenture.
(5) No proceeds of this drawing will be applied to the payment of principal, redemption price (including premium, if any) or purchase price of any Bonds that are not Eligible Bonds, including any Pledged Bonds (as defined in the Indenture), any Borrower Bonds (as defined in the Indenture), and any Bonds in the Fixed Rate Mode (as defined in the Indenture).
(6) Payment of this drawing shall be made in accordance with Paragraph 3(ii) of the Letter of Credit.
[(7) The draft accompanying this Certificate is the final draft to be drawn under the Letter of Credit, and, upon the honoring of such draft, the Letter of Credit will expire in accordance with its terms.]
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this Certificate as of the __________ day of __________________, 19__.
[NAME OF PAYING AGENT], as Paying Agent
By ___________________________ Title:
EXHIBIT 3
TO THE LETTER OF CREDIT
CERTIFICATE FOR INTEREST DRAWING
The undersigned, a duly authorized officer of ______, (the "Paying Agent"), hereby certifies as follows to DEUTSCHE BANK AG, NEW YORK BRANCH (the "Bank"), with reference to Irrevocable Letter of Credit No. 83952561 (the "Letter of Credit") issued by the Bank in favor of the Paying Agent. Terms defined in the Letter of Credit and used but not defined herein shall have the meanings given them in the Letter of Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for the holders of the Bonds.
(2) The Paying Agent is making a drawing under the Letter of Credit in the amount of $______ with respect to [the payment of interest] [the payment of the portion of redemption price corresponding to interest] [the payment of the portion of purchase price corresponding to interest] on Eligible Bonds in accordance with the Indenture.
(3) The amount of [interest] [redemption price corresponding to interest] [purchase price corresponding to interest] on Eligible Bonds that is due and owing is as follows, and the amount of the draft accompanying this Certificate does not exceed such amount:
Interest: ______________________
(4) The amount of the draft accompanying this Certificate being drawn in respect of payment of [interest] [redemption price corresponding to interest] [purchase price corresponding to interest] on Eligible Bonds, as indicated in paragraph (3), above, does not exceed the Interest Component of the Letter of Credit. The amount of the draft accompanying this Certificate in respect of payment of [interest] [redemption price corresponding to interest] [purchase price corresponding to interest] on Eligible Bonds has been computed in accordance with the terms and conditions of such Eligible Bonds and the Indenture.
(5) Payment of this drawing shall be made in accordance with Paragraph 3(ii) of the Letter of Credit.
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this Certificate as of the _____ day of ___________, 19__.
[NAME OF PAYING AGENT],
as Paying Agent
By ___________________________
Title:
EXHIBIT 4
TO THE LETTER OF CREDIT
NOTICE OF REDUCTION
The undersigned, a duly authorized officer of _____________________, (the "Paying Agent"), hereby certifies as follows to DEUTSCHE BANK AG, NEW YORK BRANCH (the "Bank"), with reference to Irrevocable Letter of Credit No. 83952561 (the "Letter of Credit") issued by the Bank in favor of the Paying Agent. Terms defined in the Letter of Credit and used but not defined herein shall have the meanings given them in the Letter of Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for the holders of the Bonds.
(2) As of the date hereof, the aggregate principal amount of Eligible Bonds (including for this purpose all Pledged Bonds and all Borrower Bonds) outstanding is
Principal: $___________________________
(3) You are hereby directed to reduce the [Principal] [Premium]
[and] [Interest] Components of the Letter of Credit as follows:
[The Principal Component of the Letter of Credit is reduced to $____________.]
[The Premium Component of the Letter of Credit is reduced to $_____________.]
[The Interest Component of the Letter of Credit is reduced to $_____________.]
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this Certificate as of the ____ day of __________, 19__.
[NAME OF PAYING AGENT],
as Paying Agent
By __________________________
Title:
EXHIBIT 5
TO THE LETTER OF CREDIT
NOTICE OF REINSTATEMENT
The undersigned, a duly authorized officer of DEUTSCHE BANK AG, NEW YORK BRANCH (the "Bank"), hereby gives the following notice to _________________, as paying agent (the "Paying Agent"), with reference to Irrevocable Letter of Credit No. 83952561 (the "Letter of Credit") issued by the Bank in favor of the Paying Agent. Terms defined in the Letter of Credit and used but not defined herein have the meanings given them in the Letter of Credit.
The Bank hereby notifies you that:
[1.] [Pursuant to Paragraph 5(i)(B) of the Letter of Credit and Section 2.04(b)(ii) of the Reimbursement Agreement, the Interest Component has been reinstated by $________________.]
[2.] [Pursuant to Paragraph 5(ii)(B) of the Letter of Credit and Section 2.04(c) of the Reimbursement Agreement, the Principal Component has been reinstated by $_________________.]
IN WITNESS WHEREOF, the Bank has executed and delivered this Notice of Reinstatement as of the ____ day of ______________, 19__.
DEUTSCHE BANK AG,
NEW YORK BRANCH
By ______________________
Title:
By ______________________
Title:
EXHIBIT 6
TO THE LETTER OF CREDIT
INSTRUCTIONS TO TRANSFER
_____________, 19__
Re: Irrevocable Letter of Credit No. 83952561
Gentlemen:
The undersigned, as Paying Agent under that certain Indenture of Trust, dated as of September 1, 1993 (the "Indenture"), by and between the Connecticut Development Authority (the "Issuer") and Shawmut Bank Connecticut, National Association, as Trustee, is named as beneficiary in the Letter of Credit referred to above (the "Letter of Credit"). The Transferee named below has succeeded the undersigned as Paying Agent under such Indenture.
Therefore, for value received, the undersigned hereby irrevocably instructs you to transfer to such Transferee all rights of the undersigned to draw under the Letter of Credit.
Such Transferee shall hereafter have the sole rights as beneficiary under the Letter of Credit; provided, however, that no rights shall be deemed to have been transferred to such Transferee until such transfer complies with the requirements of the Letter of Credit pertaining to transfers.
IN WITNESS WHEREOF, the undersigned has executed and delivered this Certificate as of the ____ day of ______________, 19__.
[NAME OF RETIRING PAYING AGENT],
as Paying Agent
By______________________
Title:
The undersigned, [Name of Transferee], hereby accepts the foregoing transfer of rights under the Letter of Credit.
[Name of Transferee]
By ______________________ Title:
Address of Principal Corporate Trust Office:
[insert address]
EXHIBIT 1.01B
Form of
PARTICIPATION ASSIGNMENT
Dated _________________, 19__
Reference is made to the Letter of Credit and Reimbursement Agreement, dated as of September 1, 1993 (said Agreement, as it may hereafter be amended or otherwise modified from time to time, being the "Agreement"; unless otherwise defined herein terms defined in the Agreement are used herein with the same meaning), among The Connecticut Light and Power Company (the "Account Party"), Deutsche Bank AG, New York Branch ("Deutsche Bank"), as Issuing Bank, the Co-Agents and Participating Banks named therein and from time to time parties thereto, and Deutsche Bank, as Agent. Pursuant to the Agreement, ______________ (the "Assignor") has purchased a participation from the Issuing Bank in and to the Letter of Credit and each payment thereunder and demand loan made by the Issuing Bank and has committed to make Advances to the Account Party.
The Assignor and ________________ (the "Assignee") agree as follows:
2. The Assignor hereby sells and assigns, without recourse, to the
Assignee, and the Assignee hereby purchases and assumes from the Assignor,
without recourse to the Assignor that portion set forth in Section 1(c) of
Schedule 1 hereto (the "Assigned Interest") of the Assignor's rights and
obligations under the Agreement and the Pledge Agreement, including,
without limitation, the participation purchased by the Assignor pursuant to
Section 3.07 of the Agreement in respect of unreimbursed amounts and demand
loans owing from time to time to the Issuing Bank, the Commitment of the
Assignor to make Advances and the Advances outstanding on the Effective
Date (as hereinafter defined). Such Assigned Interest represents the
percentage interest specified in Section 2(b) of Schedule 1 of all
outstanding rights and obligations of the Participating Banks under the
Agreement, and, after giving effect to such sale and assignment, the
Assignee's and Assignor's Participation Percentages will be as set forth in
Sections 2(b) and 2(c), respectively, of Schedule 1. The effective date of
this sale and assignment shall be the date specified in Section 3 of
Schedule 1 (the "Effective Date").
2. On the Effective Date, the Assignee will pay to the Assignor, in same day funds, at such address and account as the Assignor shall advise the Assignee, an amount equal to (1) the aggregate amount of unreimbursed letter of credit payments, demand loans and Advances outstanding (as set forth in Section 1 of Schedule 1) times (2) the Assigned Interest. From and after the Effective Date, the Assignor agrees that the Assignee shall be entitled to all rights, powers and privileges of the Assignor under the Agreement and the Pledge Agreement to the extent of the Assigned Interest, including without limitation (i) the right to receive all payments in respect of the Assigned Interest for the period from and after the Effective Date, whether on account of reimbursements, principal, interest, fees, indemnities in respect of claims arising after the Effective Date, increased costs, additional amounts or otherwise; (ii) the right to vote and to instruct the Agent and the Issuing Bank under the Agreement based on the Assigned Interest; (iii) the right to set-off and to appropriate and apply deposits of the Account Party as set forth in the Agreement; and (iv) the right to receive notices, requests, demands and other communications. The Assignor agrees that it will promptly remit to the Assignee any amount received by it in respect of the Assigned Interest (whether from the Account Party, the Agent or otherwise) in the same funds in which such amount is received by the Assignor.
3. The Assignor (i) represents and warrants that it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim; (ii) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Agreement or the Related Documents or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Agreement, the Related Documents or any other instrument or document furnished pursuant thereto; and (iii) makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Account Party or the performance or observance by the Account Party of any of its obligations under the Agreement, the Related Documents or any other instrument or document furnished pursuant thereto.
4. The Assignee (i) confirms that it has received a copy of the
Agreement, together with copies of the financial statements referred to in
Section 6.01(f) thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter
into this Assignment; (ii) agrees that it will, independently and without
reliance upon the Agent, the Issuing Bank, the Assignor or any other
Participating Bank and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Agreement and the Related Documents;
(iii) appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers under the Agreement and the Pledge
Agreement as are delegated to the Agent by the terms thereof, together with
such powers as are reasonably incidental thereto; (iv) agrees that it will
perform in accordance with its terms all of the obligations which by the
terms of the Agreement are required to be performed by it as a
Participating Bank and (v) confirms that it has paid the processing fee
referred to in subsection 10.06(b) of the Agreement.
5. Following the execution of this Assignment, it will be delivered to the Agent for acceptance and recording by the Agent. Upon such acceptance and recording and receipt of the consent of the Issuing Bank required pursuant to Section 10.06(b) of the Agreement (which shall be evidenced by the Issuing Bank's execution of this Assignment on the appropriate space on Schedule 1), as of the Effective Date, (i) the Assignee shall be a party to the Agreement and, to the extent provided in this Assignment, have the rights and obligations of a Participating Bank thereunder and under the Pledge Agreement and (ii) the Assignor shall, to the extent provided in this Assignment, relinquish its rights and be released from its obligations under the Agreement and the Pledge Agreement.
6. Upon such acceptance, recording and consent, from and after the Effective Date, the Agent shall make all payments under the Agreement in respect of the interest assigned hereby (including, without limitation, all payments of principal, interest and fees with respect thereto) to the Assignee at its address set forth on Schedule 1 hereto. The Assignor and Assignee shall make all appropriate adjustments in payments under the Agreement for periods prior to the Effective Date directly between themselves.
7. This Assignment shall be governed by, and construed in accordance with, the laws of the State of New York.
8. This Assignment may be executed in counterparts by the parties hereto, each of which counterpart when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment to be executed by their respective officers thereunto duly authorized, as of the date first above written, such execution being made on Schedule 1 hereto.
Schedule 1
to
Participation Assignment
Dated ____________, 19__
Section 1.
(a) Total Unreimbursed
Payments and demand loans $__________
(b) Total Advances: $__________
(c) Assigned Interest: __________%
|
Specify percentage to no more than 8 decimal points.
Section 2.
(a) Assignor's Participation
Percentage (immediately
prior to the effectiveness
of this Assignment) ___________%
(b) Assignee's Participation
Percentage2 (upon the
effectiveness of this
Assignment) ___________%
(c) Assignor's Participation
Percentage (upon
the effectiveness of
this Assignment)
|
The sum of the percentages set forth in Section 2(b) and (c) shall equal the percentage set forth in Section 2(a). ___________%
Section 3.
Effective Date:__________, 19__
Such date shall be at least 5 Business Days after the execution of this
Assignment.
[NAME OF ASSIGNOR]
By______________________________
Title:
[NAME OF ASSIGNEE]
By______________________________
Title:
[Address]
Telecopier No._______________
Attention:___________________
Consented to this __ day
of ______________, ___
DEUTSCHE BANK AG, NEW YORK
BRANCH,
as Issuing Bank
By ______________________
Title:
By ______________________
Title:
Accepted this __ day
of _____________, ___
Not to be accepted without proof of Account Party's consent pursuant to
Section 10.06(b) of the Reimbursement Agreement.
DEUTSCHE BANK AG, NEW YORK
BRANCH,
as Agent
By ______________________
Title:
By ______________________
Title:
APPLICABLE LENDING OFFICES
The Assignee's Applicable Lending Offices are as follows:
Domestic Lending Office:
Eurodollar Lending Office:
EXHIBIT 1.01C
Form of
PLEDGE AGREEMENT
Dated as of September 1, 1993
THIS PLEDGE AGREEMENT ("this Agreement") is made by and between:
(i) THE CONNECTICUT LIGHT AND POWER COMPANY, a corporation duly organized and validly existing under the laws of the State of Connecticut (the "Account Party"); and
(ii) DEUTSCHE BANK AG, NEW YORK BRANCH, as issuer of the Letter of Credit (the "Issuing Bank");
for the benefit of the Issuing Bank and
(iii) The Agent (as defined therein), the Co-Agents (as defined therein) and the Participating Banks (as defined therein) from time to time party to the Reimbursement Agreement hereinafter referred to.
PRELIMINARY STATEMENT
The Connecticut Development Authority (the "Issuer") proposes to issue, pursuant to an Indenture of Trust, dated as of September 1, 1993 (as supplemented or amended from time to time with the written consent of the Issuing Bank, the "Indenture"), made to Shawmut Bank Connecticut, National Association, as trustee (such entity, or its successor as trustee, being the "Trustee"), $245,500,000 aggregate principal amount of its Pollution Control Revenue Refunding Bonds (The Connecticut Light and Power Company Project - 1993A Series) (the "Bonds"). Pursuant to the Indenture and the Loan Agreement, dated as of September 1, 1993, between the Issuer and the Account Party, the Account Party has requested the Issuing Bank to issue the letter of credit referred to therein in favor of the Paying Agent described therein.
The Issuing Bank has agreed to issue such letter of credit subject to the terms and conditions set forth in that certain Letter of Credit and Reimbursement Agreement, of even date herewith, among the Account Party, the Issuing Bank, the Agent and the Co-Agents and Participating Banks referred to therein and relating to the Bonds (said Letter of Credit and Reimbursement Agreement, as it may hereafter be amended, modified or supplemented from time to time, being hereinafter referred to as the "Reimbursement Agreement").
It is a condition precedent to the obligation of the Issuing Bank to issue such letter of credit and of the Participating Banks to make the Advances described in the Reimbursement Agreement that the Account Party shall have made the pledge described in this Agreement.
NOW THEREFORE, in consideration of the premises and to induce the Issuing Bank to issue such letter of credit and to induce the Participating Banks to make such Advances, the Account Party hereby agrees as follows (capitalized terms used herein and not otherwise defined herein having the meanings assigned them in the Reimbursement Agreement):
SECTION 1. Pledge. The Account Party hereby pledges to the Issuing Bank for the benefit of the Agent and the Participating Banks, and grants to the Issuing Bank for the benefit of the Agent and the Participating Banks a security interest in, the following (the "Pledged Collateral"):
(i) the Pledged Bonds (as defined in the Indenture) and the instruments, if any, evidencing the Pledged Bonds, and all interest, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the Pledged Bonds; and
(ii) all proceeds (other than the proceeds of the initial sale upon issuance of the Pledged Bonds) of any and all of the foregoing collateral (including, without limitation, proceeds that constitute property of the types described above).
SECTION 2. Security for Obligations. This Agreement secures the payment of all obligations of the Account Party now or hereafter existing under the Reimbursement Agreement, whether for reimbursement, principal, interest, fees, expenses or otherwise, and all obligations of the Account Party now or hereafter existing under this Agreement (all such obligations of the Account Party being the "Obligations"). Without limiting the generality of the foregoing, this Agreement secures the payment of all amounts which constitute part of the Obligations and would be owed by the Account Party to the Issuing Bank, the Agent or any Participating Bank under the Reimbursement Agreement but for the fact that they are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving the Account Party.
SECTION 3. Delivery of Pledged Collateral. (a) All certificates or instruments representing or evidencing the Pledged Collateral shall be delivered to the Paying Agent and held by the Paying Agent on behalf of the Issuing Bank pursuant hereto and shall be in suitable form for transfer by delivery, or shall be accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance satisfactory to the Issuing Bank. For the better perfection of the Issuing Bank's, the Agent's and the Participating Banks' rights in and to the Pledged Collateral, the Account Party shall forthwith, upon the pledge of any Pledged Collateral hereunder, cause such Pledged Collateral to be registered in the name of such nominee or nominees of the Issuing Bank as the Issuing Bank shall direct.
(b) If, prior to the payment in full of the Obligations and the termination of the Letter of Credit, the Account Party shall become entitled to receive or shall receive any payment in respect of the Pledged Collateral, the Account Party agrees to accept the same as the agent of the Issuing Bank, the Agent and the Participating Banks, to hold the same in trust for the Issuing Bank, the Agent and the Participating Banks and to deliver the same to the Issuing Bank. All such sums so received by the Issuing Bank shall be credited against the Obligations in such order as the Agent shall, in its sole discretion, elect.
(c) Notwithstanding the foregoing subsection (a), if and for so long as the Bonds are to be held in the Book-Entry Only System (as defined in the Indenture), the Account Party's obligations under such subsection shall be deemed satisfied if such Pledged Bonds are (i) registered in the name of DTC (as defined in the Indenture) in accordance with the Book-Entry Only System, (ii) credited on the books of DTC to the account of the Paying Agent (or its nominee) and (iii) further credited on the books of the Paying Agent (or such nominee) to the account of the Issuing Bank (or its nominee).
SECTION 4. Representations and Warranties. The Account Party represents and warrants as follows:
(a) The pledge of the Pledged Collateral pursuant to this
Agreement creates, upon the Paying Agent's taking possession of the Pledged
Bonds pursuant to Section 3 hereof (whether by physical possession or by
means of registration to DTC and book-entry credit as described in subsection
(c) thereof), a valid and perfected first priority security interest in the
Pledged Collateral, securing the payment of the Obligations.
(b) No consent of any other person or entity and no authorization, approval, or other action by, and no notice to or filing with, any governmental authority or regulatory body is required (i) for the pledge by the Account Party of the Pledged Collateral pursuant to this Agreement or for the execution, delivery or performance of this Agreement by the Account Party, (ii) for the perfection or maintenance of the security interest created hereby (including the first priority nature of such security interest), other than any filings of Uniform Commercial Code financing statements that may be required for such perfection with respect to any "proceeds" of the Pledged Bonds, or (iii) for the exercise by the Issuing Bank of the voting or other rights provided for in this Agreement or the remedies in respect of the Pledged Collateral pursuant to this Agreement (except as may be required in connection with any disposition of any portion of the Pledged Collateral by laws affecting the offering and sale of securities generally and except for such as have already been obtained and are in full force and effect).
SECTION 5. Further Assurances. The Account Party agrees that at any time and from time to time, at the expense of the Account Party, the Account Party will promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary or desirable, or that the Issuing Bank may reasonably request, in order to perfect and protect any security interest granted or purported to be granted hereby or to enable the Issuing Bank to exercise and enforce its rights and remedies hereunder with respect to any Pledged Collateral.
SECTION 6. Release. In the event that any Pledged Bonds are subsequently remarketed by the Remarketing Agent and the proceeds thereof, when added to any amounts paid to the Issuing Bank and/or the Agent by the Account Party, are sufficient to (a) reimburse the Issuing Bank and the Participating Banks in full for the drawing under the Letter of Credit pursuant to which such Pledged Bonds became Pledged Bonds, (b) repay or prepay any demand loan or Advance made in respect thereof and (c) pay all interest, fees and other amounts accrued in respect thereof pursuant to the Reimbursement Agreement, the lien of this Agreement shall be released as to such Pledged Bonds (but not as to any other Pledged Bonds).
SECTION 7. Transfers and Other Liens. The Account Party agrees that it will not (i) sell, assign or otherwise dispose of, or grant any option with respect to, any of the Pledged Collateral, or (ii) create or permit to exist any lien, security interest, option or other charge or encumbrance upon or with respect to any of the Pledged Collateral, except for the security interest under this Agreement.
SECTION 8. Bank Appointed Attorney-in-Fact. The Account Party hereby appoints the Issuing Bank the Account Party's attorney-in-fact, with full authority in the place and stead of the Account Party and in the name of the Account Party or otherwise, from time to time in the Issuing Bank's discretion to take any action and to execute any instrument which the Issuing Bank may deem necessary or advisable to accomplish the purposes of this Agreement, including, without limitation, to receive, indorse and collect all instruments made payable to the Account Party representing any interest payment or other distribution in respect of the Pledged Collateral or any part thereof and to give full discharge for the same.
SECTION 9. Bank May Perform. If the Account Party fails to
perform any agreement contained herein, the Issuing Bank may itself perform,
or cause performance of, such agreement, and the expenses of the Issuing Bank
incurred in connection therewith shall be payable by the Account Party under
Section 10.04 of the Reimbursement Agreement.
SECTION 10. The Issuing Bank's Duties. The powers conferred on the Issuing Bank hereunder are solely to protect its interest in the Pledged Collateral and shall not impose any duty upon it to exercise any such powers.
Except for the safe custody of any Pledged Collateral in its actual possession and the accounting for moneys actually received by it hereunder, the Issuing Bank shall have no duty as to any Pledged Collateral, as to ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters relative to any Pledged Collateral, whether or not the Issuing Bank has or is deemed to have knowledge of such matters, or as to the taking of any necessary steps to preserve rights against any parties or any other rights pertaining to any Pledged Collateral.
The Issuing Bank shall be deemed to have exercised reasonable care in the custody and preservation of any Pledged Collateral in its actual possession if such Pledged Collateral is accorded treatment substantially equal to that which the Issuing Bank accords its own property.
SECTION 11. Remedies upon Default. If any Event of Default shall have occurred and be continuing:
(a) The Issuing Bank may exercise in respect of the Pledged Collateral, in addition to other rights and remedies provided for herein or otherwise available to it, all the rights and remedies of a secured party on default under the Uniform Commercial Code in effect in the State of New York at that time (the "Code") (whether or not the Code applies to the affected Pledged Collateral), and may also, without notice except as specified below, sell the Pledged Collateral or any part thereof in one or more parcels at public or private sale, at any exchange, broker's board or at any of the Issuing Bank's offices or elsewhere, for cash, on credit or for future delivery, and upon such other terms as the Issuing Bank may deem commercially reasonable. The Account Party agrees that, to the extent notice of sale shall be required by law, at least ten days' notice to the Account Party of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification. The Issuing Bank shall not be obligated to make any sale of Pledged Collateral regardless of notice of sale having been given. The Issuing Bank may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned.
(b) Any cash held by the Issuing Bank as Pledged Collateral and all cash proceeds received by the Issuing Bank in respect of any sale of, collection from, or other realization upon all or any part of the Pledged Collateral may, in the discretion of the Issuing Bank, be held by the Issuing Bank as collateral for, and/or then or at any time thereafter be applied (after payment of any amounts payable to the Issuing Bank pursuant to Section 9 hereof and/or Section 10.04 of the Reimbursement Agreement) in whole or in part by the Issuing Bank against, all or any part of the Obligations in such order as the Issuing Bank shall elect. Any surplus of such cash or cash proceeds held by the Issuing Bank and remaining after payment in full of all the Obligations shall be paid over to the Account Party or to whomsoever may be lawfully entitled to receive such surplus.
SECTION 12. Continuing Security Interest; Assignments. This
Agreement shall create a continuing security interest in the Pledged
Collateral and shall (i) remain in full force and effect until the later of
(x) the payment in full of the Obligations and all other amounts payable
under this Agreement and (y) the expiration or termination of the
Commitments, (ii) be binding upon the Account Party, its successors and
assigns, and (iii) inure to the benefit of, and be enforceable by, the
Issuing Bank, the Agent, the Participating Banks and their respective
successors, transferees and assigns. Without limiting the generality of the
foregoing clause (iii), any Participating Bank may, subject to Section 10.06
of the Reimbursement Agreement, assign or otherwise transfer all or any
portion of its rights and obligations under the Reimbursement Agreement
(including, without limitation, all or any portion of its Commitment and the
Advances owing to it) to any other person or entity, and such other person or
entity shall thereupon become vested with all the benefits in respect thereof
granted to such Participating Bank herein or otherwise. Upon the later of
the payment in full of the Obligations and all other amounts payable under
this Agreement and the expiration or termination of the Commitments, the
security interest granted hereby shall terminate and all rights to the
Pledged Collateral shall revert to the Account Party. Upon any such
termination, the Issuing Bank will, at the Account Party's expense, return to
the Account Party such of the Pledged Collateral as shall not have been sold
or otherwise applied pursuant to the terms hereof and execute and deliver to
the Account Party such documents as the Account Party shall reasonably
request to evidence such termination.
IN WITNESS WHEREOF, the Account Party has caused this Agreement to be duly executed and delivered by its officer thereunto duly authorized as of the date first above written.
THE CONNECTICUT LIGHT AND
POWER COMPANY, as Account Party and
pledgor
By ______________________
Title:
DEUTSCHE BANK AG,
NEW YORK BRANCH,
as Issuing Bank and pledgee
By ______________________
Title:
By ______________________
Title:
[Form of Opinion of King & Spalding - CDA/CL&P SERIES A]
EXHIBIT 5.01B
September 22, 1993
To Deutsche Bank AG, New York Branch,
as Agent and as Issuing Bank under
the Reimbursement Agreement referred
to below, and to each Co-Agent and
Participating Bank thereunder
Re: The Connecticut Light and Power Company
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 5.01(f)(ii) of the Letter of Credit and Reimbursement Agreement, dated as of September 1, 1993 (the "Reimbursement Agreement"), among The Connecticut Light and Power Company (the "Company"), Deutsche Bank AG, New York Branch, as the Agent (the "Agent") and Issuing Bank (the "Issuing Bank") thereunder, and the Co-Agents and Participating Banks referred to therein. Unless otherwise defined herein, terms defined in the Reimbursement Agreement are used herein as therein defined.
We have acted as special New York counsel to the Agent and the Issuing Bank in connection with the preparation, execution and delivery of the Reimbursement Agreement and the issuance by the Issuing Bank of the Letter of Credit referred to therein.
In that connection, we have examined the following documents:
(a) The Reimbursement Agreement, executed by each of the parties thereto; and
(b) The documents furnished to you today pursuant to Section 5.01 of the Reimbursement Agreement, including the opinion of counsel delivered pursuant to Section 5.01(f)(i) of the Reimbursement Agreement (the "Opinion").
In our examination of the documents referred to above, we have assumed the authenticity of all such documents submitted to us as originals, the genuineness of all signatures, the due authority of the parties executing such documents and the conformity to the originals of all such documents submitted to us as copies or telecopies. We have also assumed that the Agent, the Issuing Bank and each Participating Bank have duly executed and delivered, with all necessary power and authority (corporate and otherwise), the Reimbursement Agreement.
To the extent that our opinions expressed below involve conclusions as to matters governed by laws other than the laws of the State of New York, we have relied upon the Opinion and have assumed without independent investigation the correctness of the matters set forth therein, our opinions expressed below being subject to the assumptions, qualifications and limitations set forth in the Opinion. As to matters of fact, we have relied solely upon the documents we have examined.
Based upon the foregoing, and subject to the qualifications set forth below, we are of the opinion that:
4. The Reimbursement Agreement is in substantially acceptable legal form.
5. The Opinion and the other documents referred to in item (b), above, are substantially responsive to the requirements of the Sections of the Reimbursement Agreement pursuant to which the same have been delivered.
The foregoing opinions are solely for your benefit and may not be relied upon by any other person, other than any person that may become a Participating Bank under the Reimbursement Agreement after the date hereof.
Very truly yours,
Exhibit 4.2.24
LETTER OF CREDIT
AND REIMBURSEMENT AGREEMENT
Dated as of September 1, 1993
Among
THE CONNECTICUT LIGHT AND
POWER COMPANY
as Account Party
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH
as Issuing Bank and as Agent
and
THE PARTICIPATING BANKS
REFERRED TO HEREIN
Relating to
Connecticut Development Authority
$70,000,000 Pollution Control Revenue Refunding Bonds
(The Connecticut Light and Power Company Project - 1993B Series)
TABLE OF CONTENTS
Section Page
PRELIMINARY STATEMENT
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01 Certain Defined Terms . . . . . . . . . . 2
1.02 Computation of Time Periods . . . . . . . 13
1.03 Accounting Terms. . . . . . . . . . . . . 13
1.04 Computations of Outstandings. . . . . . . 14
ARTICLE II
THE LETTER OF CREDIT
2.01 The Letter of Credit. . . . . . . . . . . 14
2.02 Termination of the Commitments. . . . . . 14
2.03 Commissions and Fees . . . . . . . . . . 14
2.04 Reinstatement of the Letter of Credit . . 15
2.05 Extension of the Stated Termination Date. 16
ARTICLE III
REIMBURSEMENT AND ADVANCES
3.01 Reimbursement on Demand . . . . . . . . . 17
3.02 Advances . . . . . . . . . . . . . . . . 17
3.03 Interest on Advances. . . . . . . . . . . 18
3.04 Prepayment of Advances. . . . . . . . . . 18
3.05 Participation; Reimbursement of . . . . . 19
Issuing Bank
ARTICLE IV
PAYMENTS
4.01 Payments and Computations . . . . . . . . 22
4.02 Default Interest. . . . . . . . . . . . . 24
4.03 Yield Protection. . . . . . . . . . . . . 24
4.04 Sharing of Payments, Etc. . . . . . . . . 26
4.05 Taxes . . . . . . . . . . . . . . . . . . 26
4.06 Obligations Absolute. . . . . . . . . . . 29
4.07 Evidence of Indebtedness . . . . . . . . 30
ARTICLE V
CONDITIONS PRECEDENT
5.01 Conditions Precedent to the Issuance of
the Letter of Credit . . . . . . . . . . 30
5.02 Additional Conditions Precedent to the
Issuance of the Letter of Credi. . . . . 34
5.03 Conditions Precedent to Initial Advances. 34
5.04 Conditions Precedent to Term Advances . . 35
5.05 Reliance on Certificates. . . . . . . . . 35
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.01 Representations and Warranties of
the Account Party . . . . . . . . . . . . 36
ARTICLE VII
COVENANTS OF THE ACCOUNT PARTY
7.01 Affirmative Covenants . . . . . . . . . . 40
7.02 Negative Covenants. . . . . . . . . . . . 43
7.03 Reporting Obligations . . . . . . . . . . 48
ARTICLE VIII
DEFAULTS
8.01 Events of Default . . . . . . . . . . . . 51
8.02 Remedies Upon Events of Default . . . . . 54
ARTICLE IX
THE AGENT, THE PARTICIPATING BANKS
AND THE ISSUING BANK
9.01 Authorization of Agent; Actions of Agent
and Issuing Bank . . . . . . . . . . . . 55
9.02 Reliance, Etc.. . . . . . . . . . . . . . 55
9.03 The Agent, the Issuing Bank and Affiliates 56
9.04 Participating Bank Credit Decision. . . . 56
9.05 Indemnification . . . . . . . . . . . . . 57
9.06 Successor Agent . . . . . . . . . . . . . 57
9.07 Issuing Bank. . . . . . . . . . . . . . . 58
ARTICLE X
MISCELLANEOUS
10.01 Amendments, Etc.. . . . . . . . . . . . . 58
10.02 Notices, Etc. . . . . . . . . . . . . . . 59
10.03 No Waiver of Remedies . . . . . . . . . . 60
10.04 Costs, Expenses and Indemnification . . . 60
10.05 Right of Set-Off. . . . . . . . . . . . . 62
10.06 Binding Effect; Assignments and Participants 63
10.07 Relation of the Parties; No Beneficiary . 64
10.08 Issuing Bank Not Liable . . . . . . . . . 65
10.09 Confidentiality . . . . . . . . . . . . . 66
10.10 Waiver of Jury Trial. . . . . . . . . . . 66
10.11 Governing Law . . . . . . . . . . . . . . 67
10.12 Execution in Counterparts . . . . . . . . 67
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SCHEDULES
Schedule I - Applicable Lending Offices Schedule II - Pending Actions
EXHIBITS
Exhibit 1.01A - Form of Letter of Credit
Exhibit 1.01B - Form of Participation Assignment
Exhibit 1.01C - Form of Pledge Amendment
Exhibit 5.01A - Form of Opinion of Day, Berry & Howard,
counsel to the Account Party
Exhibit 5.01B - Form of Opinion of King & Spalding,
special New York counsel to the Agent and the
Issuing Bank
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LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
Dated as of September 1, 1993
THIS LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT (this Agreement ) is
made by and among:
(i) THE CONNECTICUT LIGHT AND POWER COMPANY, a corporation duly organized and validly existing under the laws of the State of Connecticut (the Account Party );
(ii) UNION BANK OF SWITZERLAND, NEW YORK BRANCH ( UBS ), as issuer of
the Letter of Credit (the Issuing Bank );
(iii) The Participating Banks (as hereinafter defined) from time to time party hereto; and
(iv) UBS as agent (together with any successor agent hereunder, the Agent) for such Participating Banks and the Issuing Bank.
PRELIMINARY STATEMENT
The Connecticut Development Authority (the Issuer ) proposes to issue, pursuant to an Indenture of Trust, dated as of September 1, 1993 (as supplemented or amended from time to time with the written consent of the Issuing Bank, the Indenture ), made to Shawmut Bank Connecticut, National Association, as trustee (such entity, or its successor as trustee, being the Trustee ), $70,000,000 aggregate principal amount of its Pollution Control Revenue Refunding Bonds (The Connecticut Light and Power Company Project - 1993B Series) (the Bonds ). Pursuant to the Indenture and the Loan Agreement, dated as of September 1, 1993, between the Issuer and the Account Party (the Loan Agreement ), the Account Party has requested the Issuing Bank to issue its irrevocable letter of credit in favor of the Paying Agent (as defined below), in substantially the form of Exhibit 1.01A hereto (such letter of credit, as it may from time to time be extended or modified pursuant to the terms of this Agreement, being the Letter of Credit ), in the amount of $71,036,000 (the Stated Amount ), of which (i) $70,000,000 shall support the payment of principal of the Bonds (or the portion of the purchase or redemption price of the Bonds corresponding to principal), (ii) $1,036,000 shall support the payment of up to 45 days' interest on the principal amount of the Bonds (or the portion of the purchase or redemption price of the Bonds corresponding to interest), computed at a maximum interest rate of 12% per annum on the basis of the actual days elapsed and a year of 365 or 366 days (as applicable) and (iii) $0.00 shall support the payment of premium on the Bonds. The Issuing Bank has agreed to issue the Letter of Credit subject to the terms and conditions set forth herein (including the terms and conditions relating to the rights and obligations of the Participating Banks).
NOW, THEREFORE, in consideration of the premises and in order to induce the Issuing Bank to issue the Letter of Credit and the Participating Banks to participate in the Letter of Credit and make advances hereunder, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. In addition to the terms defined in the Preliminary Statement hereto, as used in this Agreement, the following terms shall have the following meanings (such meanings to be applicable to the singular and plural forms of the terms defined):
Advances means Initial Advances and Term Advances, without differentiation; individually, an Advance .
Affiliate means, with respect to any Person, any other Person directly or indirectly controlling (including, but not limited to all directors and officers of such Person), controlled by, or under direct or indirect common control with such Person. A Person shall be deemed to control another entity if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such entity, whether through the ownership of voting securities, by contract or otherwise.
Alternate Base Rate means a fluctuating interest rate per annum equal at all times to the highest from time to time of:
(a) the rate of interest announced publicly by UBS in New York, New York, from time to time, as UBS's prime rate; and
(b) 1/2 of one percent per annum above the Federal Funds Rate from time to time.
Each change in the Alternate Base Rate shall take effect concurrently with any change in such prime rate or Federal Funds Rate, as the case may be.
Applicable Commission means, for any period, the percentage set forth below corresponding to the ratings then assigned by Moody's and S&P to the Account Party's first mortgage bonds (or other senior secured debt) not supported by letters of credit or other credit enhancement facilities, the Applicable Commission to change as when such ratings change; in the event of a split rating, the lower rating shall govern:
Moody's S&P Applicable Commission
A3 or Higher A- or Higher 0.35%
Baa1 and Baa2 BBB+ and BBB 0.40%
Baa3 BBB- 0.55%
Ba1 or Below BB+ or Below 0.70%
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Applicable Lending Office means, with respect to each Participating Bank, such Participating Bank's Domestic Lending Office as specified opposite such Participating Bank's name on Schedule I hereto (in the case of a Participating Bank initially party to this Agreement) or in the Participation Assignment pursuant to which such Participating Bank became a Participating Bank (in the case of any other Participating Bank), or such other office or affiliate of such Participating Bank as such Participating Bank may from time to time specify to the Account Party and the Agent.
Available Amount in effect at any time means the maximum
aggregate amount available to be drawn at such time under the Letter of
Credit, the determination of such maximum amount to assume compliance with
all conditions for drawing and no reduction for (i) any amount drawn by the
Paying Agent to make a regularly scheduled payment of interest on the Bonds
(unless such amount will not be reinstated under the Letter of Credit) or
(ii) any amount not available to be drawn because Bonds are held by or for
the account of the Account Party and/or in pledge for the benefit of the
Issuing Bank.
Bonds has the meaning assigned to that term in the Preliminary Statement.
Business Day means a day of the year that is not a Saturday or Sunday or a day on which banks are authorized to close in New York City and, if the applicable Business Day relates to any action to be taken by, or notice furnished to or by, or payment to be made to or by, the Trustee, the Paying Agent or the Remarketing Agent, is a day on which (A) banks located in Hartford, Connecticut and New York, New York are not required or authorized to remain closed, (B) banking institutions in all of the cities in which the principal offices of the Issuing Bank, the Trustee, the Paying Agent and, if applicable, the Remarketing Agent are located are not required or authorized to remain closed and (C) the New York Stock Exchange, Inc. is not closed.
CL&P Indenture has the meaning assigned to that term in Section
7.02(a)(i)(A) hereof.
Closing Date means the Business Day upon which each of the
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conditions precedent enumerated in Sections 5.01 and 5.02 hereof shall be fulfilled to the satisfaction of the Agent, the Issuing Bank, the Participating Banks and the Account Party. All transactions contemplated to occur on the Closing Date shall occur contemporaneously on or prior to November 15, 1993, at the offices of King & Spalding, 120 West 45th Street, New York, New York 10036, at 10:00 A.M. (New York City time), or at such other place and time as the parties hereto may mutually agree.
Collateral means all of the collateral in which liens, mortgages or security interests are purported to be granted by any or all of the Security Documents.
Commitment means, for each Participating Bank, such Participating Bank's Participation Percentage of the Available Amount. Commitments shall refer to the aggregate of the Commitments.
Confidential Information has the meaning assigned to that term in Section 10.09 hereof.
Consolidated Capitalization means, for any period, the aggregate
of all amounts that would, in accordance with generally accepted accounting
principles and consistent with those applied in the preparation of the
Account Party's consolidated financial statements included in its Annual
Report on Form 10-K for the year ended December 31, 1992, appear on the
Account Party's consolidated balance sheet as the sum of (i) the total
principal amount of all long-term Debt of the Account Party and its
Subsidiaries (excluding, however, Debt not to exceed $400,000,000 existing
under any nuclear fuel financing so long as the proceeds of such Debt are
used solely to finance the purchase and carrying of nuclear fuel and so
long as the appropriate regulatory authorities have not taken any action
which would not allow the costs with respect to such financing to be
recovered through the rate making process), (ii) the aggregate of the par
value of, or stated capital represented by, the outstanding shares of all
classes of common and preferred shares of the Account Party and its
Subsidiaries, (iii) the consolidated surplus of the Account Party and its
Subsidiaries, paid-in, earned and other, if any, and (iv) the excess, if
any, of (A) the aggregate unpaid principal amount of all short-term Debt of
the Account Party and its Subsidiaries over (B) 10% of the sum of clauses
(i), (ii) and (iii) above.
Consolidated Common Equity means, for any period, an amount equal to the sum of the aggregate of the par value of, or stated capital represented by, the outstanding common shares of the Account Party and its Subsidiaries and the surplus, paid-in, earned and other, if any, of the Account Party and its Subsidiaries as determined on a consolidated basis in accordance with generally accepted accounting principles.
Credit Termination Date means the date on which the Letter of Credit shall terminate in accordance with its terms.
Debt means, for any Person, without duplication, (i) indebtedness of such Person for borrowed money, including but not limited to obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (ii) obligations of such Person to pay the deferred purchase price of property or services (excluding any obligation of such Person to the United States Department of Energy or its successor with respect to disposition of spent nuclear fuel burned prior to April 3, 1983), (iii) obligations of such Person as lessee under leases which shall have been or should be, in accordance with generally accepted accounting principles, recorded as capital leases, (iv) obligations under direct or indirect guaranties in respect of, and obligations (contingent or otherwise) to purchase or otherwise acquire, or otherwise to assure a creditor against loss in respect of, indebtedness or obligations of others of the kinds referred to in clauses (i) through (iii), above, and (v) liabilities in respect of unfunded vested benefits under ERISA Plans.
Default Rate means a fluctuating interest rate equal at all times to two percent (2.00%) per annum above the Alternate Base Rate in effect from time to time.
ERISA means the Employee Retirement Income Security Act of 1974, as amended from time to time.
ERISA Affiliate means, with respect to any Person, any trade or
business (whether or not incorporated) which is a commonly controlled
entity of the Account Party within the meaning of the regulations under
Section 414 of the Internal Revenue Code of 1986, as amended from time to
time.
ERISA Multiemployer Plan means a multiemployer plan subject to Title IV of ERISA.
ERISA Plan means an employee benefit plan (other than an ERISA Multiemployer Plan) maintained for employees of the Account Party or any ERISA Affiliate and covered by Title IV of ERISA.
ERISA Plan Termination Event means (i) a Reportable Event described in Section 4043 of ERISA and the regulations issued thereunder (other than a Reportable Event not subject to the provision for 30-day notice to the PBGC under such regulations) with respect to an ERISA Plan or an ERISA Multiemployer Plan, or (ii) the withdrawal of the Account Party or any of its ERISA Affiliates from an ERISA Plan or an ERISA Multiemployer Plan during a plan year in which it was a substantial employer as defined in Section 4001(a)(2) of ERISA, or (iii) the filing of a notice of intent to terminate an ERISA Plan or an ERISA Multiemployer Plan or the treatment of an ERISA Plan or an ERISA Multiemployer Plan under Section 4041 of ERISA, or (iv) the institution of proceedings to terminate an ERISA Plan or an ERISA Multiemployer Plan by the PBGC, or (v) any other event or condition which might constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any ERISA Plan or ERISA Multiemployer Plan.
Event of Default has the meaning assigned to that term in
Section 8.01.
Federal Funds Rate means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published on the next succeeding Business Day, the average of the quotations for such day on such transactions received by the Agent from three Federal funds brokers of recognized standing selected by it.
FERC means the Federal Energy Regulatory Commission.
Governmental Approval means any authorization, consent,
approval, license, permit, certificate, exemption of, or filing or
registration with, any governmental authority or other legal or regulatory
body (including, without limitation, the Securities and Exchange
Commission, the FERC, the Nuclear Regulatory Commission and the Connecticut
Department of Public Utility Control), required in connection with either
(i) the execution, delivery or performance of any Loan Document or Related
Document or the grant and perfection of any lien or security interest
contemplated by the Security Documents or (ii) the nature of the Account
Party's or any Principal Subsidiary's business as conducted or the nature
of the property owned or leased by it.
Hazardous Substance means any waste, substance or material identified as hazardous, dangerous or toxic by any office, agency, department, commission, board, bureau or instrumentality of the United States of America or of the State or locality in which the same is located having or exercising jurisdiction over such waste, substance or material.
Indemnified Person has the meaning assigned to that term in
Section 10.04(b) hereof.
Indenture has the meaning assigned to that term in the Preliminary Statement.
Indenture Documents means, collectively, the Indenture and the Loan Agreement, together with all amendments, modifications and supplements thereto; individually, an Indenture Document .
Initial Advance has the meaning assigned to that term in Section 3.02(a) hereof.
Initial Repayment Date has the meaning assigned to that term in
Section 3.02(a) hereof.
Interest Component has the meaning assigned to that term in the
Letter of Credit.
Interest Drawing has the meaning assigned to that term in the
Letter of Credit.
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Issuer has the meaning assigned to that term in the Preliminary Statement.
Issuer Resolution means the resolution adopted by the Issuer that authorized the issuance of the Bonds, approved the terms and provisions of the Bonds, and approved those of the documents related to the Bonds to which the Issuer is a party.
Letter of Credit has the meaning assigned to that term in the Preliminary Statement.
Lien has the meaning assigned to that term in Section 7.02(a) hereof.
Loan Agreement has the meaning assigned to that term in the
Preliminary Statement.
Loan Documents means this Agreement and the Security Documents.
Majority Lenders means on any date of determination, (i) the
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Issuing Bank and (ii) Participating Banks who, collectively, on such date, have Participation Percentages in the aggregate of at least 66-2/3%. Determination of those Participating Banks satisfying the criteria specified above for action by the Majority Lenders shall be made by the Agent and shall be conclusive and binding on all parties absent manifest error.
Moody's means Moody's Investors Service, Inc. or any successor thereto.
NU means Northeast Utilities, an unincorporated voluntary business association organized under the laws of the Commonwealth of Massachusetts.
Participant shall have the meaning assigned to that term in
Section 10.06(b) hereof.
Participating Banks means the Persons listed on the signature pages hereof following the heading Participating Banks and any other Person who becomes a party hereto pursuant to Section 10.06 hereof.
Participation Assignment means a participation assignment entered into pursuant to Section 10.06 hereof by any Participating Bank and an assignee, in substantially the form of Exhibit 1.01B hereto.
Participation Percentage means, as of any date of determination
(i) with respect to a Participating Bank initially a party hereto, the
percentage set forth opposite such Participating Bank's name on the
signature pages hereof, except as provided in clause (iii), below, (ii)
with respect to a Participating Bank that became a party hereto by
operation of Section 10.06(a) hereof, the Participation Percentage stated
to be assumed by such assignee Participating Bank in the relevant
Participation Assignment, except as provided in clause (iii), below, and
(iii) with respect to any Participating Bank described in clauses (i) and
(ii), above, that assigns a percentage of its interests in accordance with
Section 10.06(a) hereof, its Participation Percentage as reduced by the
percentage so assigned.
Paying Agent means (i) Shawmut Bank Connecticut, National Association, as the initial paying agent for the Bonds under the Indenture Documents, and (ii) any successor paying agent for the Bonds under the Indenture Documents.
PBGC means the Pension Benefit Guaranty Corporation (or any successor entity) established under ERISA.
Person means an individual, partnership, corporation (including a business trust), joint stock company, trust, estate, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof.
Pledge Agreement means the Pledge Agreement, dated as of September 1, 1993, by the Account Party in favor of the Issuing Bank for the benefit of the Agent and the Participating Banks, in substantially the form of Exhibit 1.01C hereto, and as the same may from time to time be amended, modified or supplemented.
Pledged Bonds shall have the meaning assigned to that term in the Pledge Agreement.
Premium Component has the meaning assigned to that term in the
Letter of Credit.
Principal Component has the meaning assigned to that term in the
Letter of Credit.
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Principal Subsidiary means a Subsidiary, whether owned directly or indirectly by the Account Party, which, with respect to the Account Party and its Subsidiaries taken as a whole, represents a material portion of the Account Party's consolidated assets or consolidated net income (or loss), (it being understood that, as of the date of this Agreement, the Account Party has no Principal Subsidiaries).
Purchase Contract means the Bond Purchase Agreement, dated September 21, 1993, among the Issuer, the Account Party and Goldman, Sachs & Co., Individually and as Representative of Advest, Inc., Greenwich Partners, Inc. and U.S. Securities, Inc.
Recipient has the meaning assigned to that term in Section 10.09 hereto.
Regulatory Transaction means any merger or consolidation of the Account Party with or into, or any purchase or acquisition by the Account Party of the assets of (and any related assumption by the Account Party of the liabilities of) any utility company or utility- related company, if such transaction is undertaken pursuant to an order or request of, or otherwise in fulfillment of the stated goals of, a utility regulatory agency having jurisdiction over NU or any of its Subsidiaries.
Regulatory Transaction Entity means any utility company or utility-related company (other than the Account Party) that is the subject of a Regulatory Transaction.
Related Documents means the Letter of Credit, the Bonds, the Indenture Documents, any Remarketing Agreement and the Purchase Contract.
Remarketing Agent has the meaning assigned to that term in the Indenture Documents.
Remarketing Agreement means (i) the Remarketing Agreement, dated as of September 1, 1993, among the Issuer, the Account Party and Goldman, Sachs & Co., as the same may be amended from time to time; and (ii) any successor remarketing agreement between the Account Party and a successor Remarketing Agent as shall be in effect from time to time in accordance with the terms of the Indenture Documents.
S&P means Standard and Poor's Corporation or any successor thereto.
Second Mortgage means the Open End Mortgage and Trust Agreement made as of October 1, 1986, by and between the Account Party and Bank of Boston Connecticut, as trustee, as amended through the date hereof to secure the obligations of the Account Party hereunder and as the same may be further amended, modified or supplemented from time to time.
Security Documents means the Pledge Agreement and the Indenture Documents, but shall not include the Second Mortgage.
Stated Amount has the meaning assigned to that term in the Preliminary Statement hereto.
Stated Termination Date means the expiration date specified in clause (i) of the first paragraph of Paragraph (1) of the Letter of Credit, as such date may be extended pursuant to Section 2.05 hereof.
Subsidiary shall mean, with respect to any Person (the Parent), any corporation, association or other business entity of which securities or other ownership interests representing 50% or more of the ordinary voting power are, at the time as of which any determination is being made, owned or controlled by the Parent or one or more Subsidiaries of the Parent or by the Parent and one or more Subsidiaries of the Parent.
Tender Drawing has the meaning assigned to that term in the
Letter of Credit.
Term Advance has the meaning assigned to that term in Section
3.02(b) hereof.
Term Borrowing means a borrowing consisting of Term Advances made
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on the same day by the Participating Banks, ratably in accordance with their respective Participation Percentages.
Termination Date means the Credit Termination Date or the earlier date of termination of the Commitments pursuant to Sections 2.02 or 8.02 hereunder.
Trustee has the meaning assigned to that term in the Preliminary Statement hereto.
Unmatured Default means the occurrence and continuance of an event which, with the giving of notice or lapse of time or both, would constitute an Event of Default.
SECTION 1.02. Computation of Time Periods. In the computation of periods of time under this Agreement any period of a specified number of days or months shall be computed by including the first day or month occurring during such period and excluding the last such day or month. In the case of a period of time from a specified date to or until a later specified date, the word from means from and including and the words to and until each means to but excluding .
SECTION 1.03. Accounting Terms. All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles applied on a basis consistent with the application employed in the preparation of the Account Party's consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 1992.
SECTION 1.04. Computations of Outstandings. Whenever reference is made in this Agreement to the principal amount outstanding on any date under this Agreement, such reference shall refer to the sum of (i) the Available Amount on such date, (ii) the aggregate principal amount of all Advances outstanding on such date and (iii) the aggregate amount of all demand loans under Section 3.01 hereunder on such date, in each case after giving effect to all transactions to be made on such date and the application of the proceeds thereof.
ARTICLE II
THE LETTER OF CREDIT
SECTION 2.01. The Letter of Credit. The Issuing Bank agrees, on the terms and conditions hereinafter set forth (including, without limitation, the applicable conditions precedent set forth in Article V hereof), to issue the Letter of Credit to the Paying Agent, upon not less than three Business Days prior notice from the Account Party, on the Closing Date.
SECTION 2.02. Termination of the Commitments. The obligation of the Issuing Bank to issue the Letter of Credit shall automatically terminate if not issued on or before 5:00 P.M. (New York City time) on November 15, 1993.
SECTION 2.03. Commissions and Fees. (a) The Account Party hereby agrees to pay to the Agent, for the account of the Participating Banks ratably in accordance with their respective Participation Percentages, a letter of credit commission on the Available Amount in effect from time to time from the date of issuance of the Letter of Credit until the Termination Date (disregarding for such purpose any temporary diminution thereof arising from drawings under the Letter of Credit to pay interest (or purchase price corresponding to interest) on the Bonds, regardless of whether the amount so drawn shall be thereafter reinstated), at a rate per annum equal to the Applicable Commission, payable quarterly in arrears on the first day of March, June, September and December in each year, commencing on the first such date to occur following the date of issuance of the Letter of Credit, and on the Credit Termination Date.
(b) The Account Party also agrees to pay to the Agent, for the account of the Agent and the Issuing Bank, such other fees as may be agreed upon from time to time by the Account Party and the Agent and the Issuing Bank.
SECTION 2.04. Reinstatement of the Letter of Credit. (a) The Interest Component and the Principal Component shall, from time to time, be reinstated by the Issuing Bank in accordance with, and only to the extent provided in, the Letter of Credit. In no event shall reductions in the Premium Component be reinstated.
(b) Interest Component. With respect to reinstatement of reductions in the Interest Component resulting from Interest Drawings:
(i) The Issuing Bank may only deliver to the Paying Agent any notice of non-reinstatement pursuant to Paragraph 5(i)(A) of the Letter of Credit if (A) the Issuing Bank and/or the Participating Banks have not been reimbursed in full by the Account Party for one or more drawings, together with interest, if any, owing thereon pursuant to this Agreement, or (B) an Event of Default has occurred and is then continuing.
(ii) If, subsequent to any such delivery of a notice of non-reinstatement, the circumstances giving rise to the delivery of such notice of non-reinstatement shall have ceased to exist (whether as a result of reimbursement of unreimbursed drawings, or waiver or cure of an Event of Default, or otherwise), then, provided that no other Event of Default shall have occurred and be continuing, the Issuing Bank shall deliver to the Paying Agent, by hand delivery or facsimile transmission, a Notice of Reinstatement in the form of Exhibit 5 to the Letter of Credit reinstating that portion of the Interest Component in respect of which such notice of non-reinstatement was given.
(c) Principal Component. With respect to reinstatement of a reduction in the Principal Component resulting from any Tender Drawing, IF:
(i) such reduction has not been reinstated pursuant to Paragraph 5(ii)(A) of the Letter of Credit;
(ii) the Issuing Bank and/or the Participating Banks shall have been reimbursed by the Account Party for such Tender Drawing;
(iii) any demand loan(s) and Advance(s) made in respect of such Tender Drawing shall have been repaid by the Account Party, together with any interest thereon and any other amounts payable hereunder in connection therewith; AND
(iv) no Event of Default shall have occurred and then be continuing;
THEN, the Issuing Bank shall deliver to the Paying Agent, by hand delivery or facsimile transmission, a Notice of Reinstatement in the form of Exhibit 5 to the Letter of Credit reinstating the Principal Component to the extent of such Tender Drawing.
SECTION 2.05. Extension of the Stated Termination Date. Unless the Letter of Credit shall have previously expired in accordance with its terms, at least 60 days but not more than 90 days before each anniversary date of this Agreement, the Account Party may, by notice to the Agent (any such notice being irrevocable), request the Issuing Bank and the Participating Banks to extend the Stated Termination Date of the Letter of Credit for a period of one year. If the Account Party shall make such request, the Agent shall promptly inform the Issuing Bank and the Participating Banks and, no later than 15 days prior to such anniversary date, the Agent shall notify the Account Party in writing (with a copy of such notice to the Trustee and the Paying Agent) if the Issuing Bank and all of the Participating Banks consent to such request and the conditions of such consent (including conditions relating to legal documentation). If such consent is granted, the Stated Termination Date as theretofore in effect shall be extended for one year, such extension to take effect on such anniversary date. The granting of any such consent shall be in the sole and absolute discretion of the Issuing Bank and all of the Participating Banks, and if the Agent shall not so notify the Account Party, such lack of notification shall be deemed to be a determination not to consent to such request.
ARTICLE III
REIMBURSEMENT AND ADVANCES
SECTION 3.01. Reimbursement on Demand. Subject to the provisions of Section 3.02 hereof, the Account Party hereby agrees to pay (whether with the proceeds of Initial Advances made pursuant to this Agreement or otherwise) to the Issuing Bank on demand (a) on and after each date on which the Issuing Bank shall pay any amount under the Letter of Credit pursuant to any draft, but only after so paid by the Issuing Bank, a sum equal to such amount so paid (which sum shall constitute a demand loan from the Issuing Bank to the Account Party from the date of such payment by the Issuing Bank until so paid by the Account Party), plus (b) interest on any amount remaining unpaid by the Account Party to the Issuing Bank under clause (a), above, from the date such amount becomes payable on demand until payment in full, at the Default Rate in effect from time to time. No reinstatement of the Interest Component or the Principal Component despite the failure by the Account Party to reimburse the Issuing Bank for any previous drawing to pay interest on the Bonds shall limit or impair the Account Party's obligations under this Section 3.01.
SECTION 3.02. Advances. Each Participating Bank agrees to make Initial Advances and Term Advances for the account of the Account Party from time to time upon the terms and subject to the conditions set forth in this Agreement.
(a) Initial Advances; Repayment of Initial Advances. If the Issuing
Bank shall honor any Tender Drawing and if the conditions precedent set
forth in Section 5.03 of this Agreement have been satisfied as of the date
of such honor, then, each Participating Bank's payment made to the Issuing
Bank pursuant to Section 3.05 hereof in respect of such Tender Drawing
shall be deemed to constitute an advance made for the account of the
Account Party by such Participating Bank (each such advance being an
Initial Advance made by such Participating Bank). Subject to Article VIII
of this Agreement, each Initial Advance and all interest thereon shall be
due and payable on the earlier to occur of (i) the date 30 days from the
date of such Initial Advance (such repayment date being the Initial
Repayment Date for such Initial Advance) and (ii) the Termination Date.
The Account Party may repay the principal amount of any Initial Advance
with (and to the extent of) the proceeds of a Term Advance made pursuant to
subsection (b), below, and may prepay Initial Advances in accordance with
Section 3.04 hereof.
(b) Term Advances; Repayment. Subject to the satisfaction of the conditions precedent set forth in Section 5.04 hereof and the other conditions of this subsection (b), each Participating Bank agrees to make one or more advances for the account of the Account Party ( Term Advances ) on each Initial Repayment Date in an aggregate principal amount equal to the amount of such Participating Bank's Initial Advances maturing on such Initial Repayment Date. All Term Advances comprising a single Term Borrowing shall be made upon written notice given by the Account Party to the Agent not later than 11:00 A.M. (New York City time) on the Business Day of such proposed Term Borrowing. The Agent shall notify each Participating Bank of the contents of such notice promptly after receipt thereof. Each such notice shall specify therein the date on which such Term Borrowing is to be made and the principal amount of Term Advances comprising such Term Borrowing. The proceeds of each Participating Bank's Term Advances shall be applied solely to the repayment of the Initial Advances made by such Participating Bank and shall in no event be made available to the Account Party. The principal amount of each Term Advance, together with all accrued and unpaid interest thereon, shall be due and payable on the earlier to occur of (x) the same calendar date occurring 35 months following the date upon which such Term Advance is made (or, if such month does not have a corresponding date, on the last day of such month) and (y) the Termination Date.
SECTION 3.03. Interest on Advances. The Account Party shall pay interest on the unpaid principal amount of each Advance from the date of such Advance until such principal amount is paid in full at a fluctuating interest rate per annum equal to the Alternate Base Rate in effect from time to time. The Account Party shall pay interest on each Advance quarterly in arrears on the first day of March, June, September and December in each year and on the Termination Date or the earlier date for repayment of such Advance (including the Initial Repayment Date therefor, in the case of an Initial Advance).
SECTION 3.04. Prepayment of Advances. (a) The Account Party shall have no right to prepay any principal amount of any Advances except in accordance with subsections (b) and (c) below.
(b) The Account Party may, upon at least one Business Day's notice to the Agent stating the proposed date and aggregate principal amount of the prepayment and the specific Initial Advances or Term Borrowing(s) to be prepaid, and if such notice is given, the Account Party shall, prepay, in whole or ratably in part, together with accrued interest to the date of such prepayment on the principal amount prepaid, the outstanding principal amount of (i) all Initial Advances made on the same date or (ii) all Term Advances comprising the same Term Borrowing, in each case as the Account Party shall designate in such notice; provided, however, that each partial prepayment shall be in an aggregate principal amount not less than $10,000,000, or, if less, the aggregate principal amount of all Advances then outstanding.
(c) Prior to or simultaneously with the resale of all of the Bonds purchased with the proceeds of a Tender Drawing, the Account Party shall prepay, or cause to be prepaid, in full, the then outstanding principal amount of all Initial Advances and of all Term Advances comprising the same Term Borrowing(s) arising pursuant to such Tender Drawing, together with all interest thereon to the date of such prepayment. If less than all of such Bonds are resold, then prior to or simultaneously with such resale the Account Party shall prepay or cause to be prepaid that portion of such Advances, together with all interest thereon to the date of such prepayment, equal to the then outstanding principal amount thereof multiplied by a fraction, the numerator of which shall be the principal amount of the Bonds resold and the denominator of which shall be the principal amount of all of the Bonds purchased with the proceeds of the relevant Tender Drawing.
SECTION 3.05. Participation; Reimbursement of Issuing Bank. (a)
The Issuing Bank hereby sells and transfers to each Participating Bank, and
each Participating Bank hereby acquires from the Issuing Bank, an undivided
interest and participation to the extent of such Participating Bank's
Participation Percentage in and to (i) the Letter of Credit, including the
obligations of the Issuing Bank under and in respect thereof and the
Account Party's reimbursement and other obligations in respect thereof and
(ii) each demand loan or deemed demand loan made by the Issuing Bank,
whether now existing or hereafter arising.
(b) If the Issuing Bank (i) shall not have been reimbursed in full for any payment made by the Issuing Bank under the Letter of Credit on the date of such payment or (ii) shall make any demand loan to the Account Party, the Issuing Bank shall promptly notify the Agent and the Agent shall promptly notify each Participating Bank of such non-reimbursement or demand loan and the amount thereof. Upon receipt of such notice from the Agent, each Participating Bank shall pay to the Issuing Bank, directly, an amount equal to such Participating Bank's ratable portion (according to such Participating Bank's Participation Percentage) of such unreimbursed amount or demand loan paid or made by the Issuing Bank, plus interest on such amount at a rate per annum equal to the Federal Funds Rate from the date of such payment by the Issuing Bank to the date of payment to the Issuing Bank by such Participating Bank. All such payments by each Participating Bank shall be made in United States dollars and in same day funds:
(x) not later than 2:45 P.M. (New York City time) on the day such notice is received by such Participating Bank if such notice is received at or prior to 12:30 P.M. (New York City time) on a Business Day; or
(y) not later than 12:00 Noon (New York City time) on the Business Day next succeeding the day such notice is received by such Participating Bank, if such notice is received after 12:30 P.M. (New York City time) on a Business Day.
If a Participating Bank shall have paid to the Issuing Bank its ratable portion of any unreimbursed amount or demand loan paid or made by the Issuing Bank, together with all interest thereon required by the second sentence of this subsection (b), such Participating Bank shall be entitled to receive its ratable share of all interest paid by the Account Party in respect of such unreimbursed amount or demand loan from the date paid or made by the Issuing Bank. If such Participating Bank shall have made such payment to the Issuing Bank, but without all such interest thereon required by the second sentence of this subsection (b), such Participating Bank shall be entitled to receive its ratable share of the interest paid by the Account Party in respect of such unreimbursed amount or demand loan only from the date it shall have paid all interest required by the second sentence of this subsection (b).
(c) Each Participating Bank's obligation to make each payment
to the Issuing Bank, and the Issuing Bank's right to receive the same,
shall be absolute and unconditional and shall not be affected by any
circumstance whatsoever, including, without limitation, the foregoing or
Section 4.06 hereof, or the occurrence or continuance of an Event of
Default, or the non-satisfaction of any condition precedent set forth in
Sections 5.03 or 5.04 hereof, or the failure of any other Participating
Bank to make any payment under this Section 3.05. Each Participating Bank
further agrees that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever.
(d) The failure of any Participating Bank to make any payment to the Issuing Bank in accordance with subsection (b) above, shall not relieve any other Participating Bank of its obligation to make payment, but neither the Issuing Bank nor any Participating Bank shall be responsible for the failure of any other Participating Bank to make such payment. If any Participating Bank shall fail to make any payment to the Issuing Bank in accordance with subsection (b) above, then such Participating Bank shall pay to the Issuing Bank forthwith on demand such corresponding amount together with interest thereon, for each day until the date such amount is repaid to the Issuing Bank at the Federal Funds Rate. Nothing herein shall in any way limit, waive or otherwise reduce any claims that any party hereto may have against any non-performing Participating Bank.
(e) If any Participating Bank shall fail to make any payment to
the Issuing Bank in accordance with subsection (b) above, then, in addition
to other rights and remedies which the Issuing Bank may have, the Agent is
hereby authorized, at the request of the Issuing Bank, to withhold and to
apply to the payment of such amounts owing by such Participating Bank to
the Issuing Bank and any related interest, that portion of any payment
received by the Agent that would otherwise be payable to such Participating
Bank. In furtherance of the foregoing, if any Participating Bank shall
fail to make any payment to the Issuing Bank in accordance with subsection
(b), above, and such failure shall continue for five Business Days
following written notice of such failure from the Issuing Bank to such
Participating Bank, the Issuing Bank may acquire, or transfer to a third
party in exchange for the sum or sums due from such Participating Bank,
such Participating Bank's interest in the related unreimbursed amounts and
demand loans and all other rights of such Participating Bank hereunder in
respect thereof, without, however, relieving such Participating Bank from
any liability for damages, costs and expenses suffered by the Issuing Bank
as a result of such failure. The purchaser of any such interest shall be
deemed to have acquired an interest senior to the interest of such
Participating Bank and shall be entitled to receive all subsequent payments
which the Issuing Bank or the Agent would otherwise have made hereunder to
such Participating Bank in respect of such interest.
ARTICLE IV
PAYMENTS
SECTION 4.01. Payments and Computations. (a) The Account Party shall make each payment hereunder (i) in the case of reimbursement obligations pursuant to Section 3.01 hereof (excluding any portion thereof in respect of which an Initial Advance is to be made), not later than 2:30 P.M. (New York City time) on the day the related drawing under the Letter of Credit is paid by the Issuing Bank, and (ii) in all other cases, not later than 12:30 P.M. (New York City time) on the day when due, in each case in lawful money of the United States of America to the Agent at its address referred to in Section 10.02 hereof in immediately available funds.
The Agent will promptly thereafter cause to be distributed like funds relating to the payment of reimbursements, principal, interest, fees or other amounts payable to the Issuing Bank and the Participating Banks to whom the same are payable, ratably and without offset or counterclaim except as provided in Section 3.05, at its address set forth in Section 10.02 hereof (in the case of the Issuing Bank) or for the account of their respective Applicable Lending Offices (in the case of the Participating Banks), in each case to be applied in accordance with the terms of this Agreement.
(b) The Account Party hereby authorizes the Issuing Bank, and each Participating Bank, if and to the extent payment owed to the Issuing Bank, or such Participating Bank, as the case may be, is not made when due hereunder, to charge from time to time against any or all of the Account Party's accounts with the Issuing Bank or such Participating Bank, as the case may be, any amount so due.
(c) All computations of interest based on the Alternate Base Rate when based on UBS's prime rate referred to in the definition of Alternate Base Rate shall be made by the Agent on the basis of a year of 365 or 366 days, as the case may be. All other computations of interest hereunder (including computations of interest based on the Federal Funds Rate (including the Alternate Base Rate if and so long as such Rate is based on the Federal Funds Rate)), and of all fees, commissions, and other amounts payable hereunder shall be made by the Agent or the party claiming such other amounts, as the case may be, on the basis of a year of 360 days. In each such case, such computation shall be made for the actual number of days (including the first day, but excluding the last day) occurring in the period for which such interest, fees, commissions or other amounts are payable. Each such determination by the Agent or a Participating Bank, as the case may be, shall be conclusive and binding for all purposes, absent manifest error.
(d) Whenever any payment hereunder shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest, commissions and fees hereunder.
(e) Unless the Agent shall have received notice from the Account Party prior to the date on which any payment is due to the Issuing Bank or the Participating Banks hereunder that the Account Party will not make such payment in full, the Agent may assume that the Account Party has made such payment in full to the Agent on such date and the Agent may, in reliance upon such assumption, cause to be distributed to the Issuing Bank and/or each Participating Bank on such due date an amount equal to the amount then due the Issuing Bank and/or such Participating Bank. If and to the extent the Account Party shall not have so made such payment in full to the Agent, the Issuing Bank and/or each such Participating Bank shall repay to the Agent forthwith on demand such amount distributed to the Issuing Bank and/or such Participating Bank, together with interest thereon, for each day from the date such amount is distributed to the Issuing Bank and/or such Participating Bank until the date the Issuing Bank and/or such Participating Bank repays such amount to the Agent, at the Federal Funds Rate.
(f) If, after the Agent has paid to the Issuing Bank or any Participating Bank any amount pursuant to subsection (a) above, such payment is rescinded or must otherwise be returned or must be paid over by the Agent or the Issuing Bank to any Person, whether pursuant to any bankruptcy or insolvency law, Section 4.04 hereof or otherwise, such Participating Bank shall, at the request of the Agent or the Issuing Bank, promptly repay to the Agent or the Issuing Bank, as the case may be, an amount equal to its ratable share of such payment, together with any interest required to be paid by the Agent or the Issuing Bank with respect to such payment.
SECTION 4.02. Default Interest. Any amounts payable by the Account Party hereunder that are not paid when due shall (to the fullest extent permitted by law) bear interest, from the date when due until paid in full, at the Default Rate, payable on demand.
SECTION 4.03. Yield Protection. (a) Change in Circumstances. Notwithstanding any other provision herein, if after the date hereof, the adoption of or any change in applicable law or regulation or in the interpretation or administration thereof by any governmental authority charged with the interpretation or administration thereof (whether or not having the force of law) (i) shall impose, modify or deem applicable any reserve, special deposit or similar requirement against letters of credit (or participatory interests therein) issued by, commitments or assets of, deposits with or for the account of, or credit extended by, the Issuing Bank or any Participating Bank, or (ii) shall impose on the Issuing Bank or such Participating Bank any other condition affecting this Agreement, the Letter of Credit or participatory interests therein, and the result of any of the foregoing shall be (A) to increase the cost to the Issuing Bank or such Participating Bank of issuing, maintaining or participating in this Agreement or the Letter of Credit or of agreeing to make, making or maintaining any Advance or (B) to reduce the amount of any sum received or receivable by the Issuing Bank or such Participating Bank hereunder (whether of principal, interest or otherwise), then the Account Party will pay to the Issuing Bank or such Participating Bank, upon demand, such additional amount or amounts as will compensate the Issuing Bank or such Participating Bank for such additional costs incurred or reduction suffered.
(b) Capital. If the Issuing Bank or any Participating Bank shall have determined that the adoption after the date hereof of any law, rule, regulation or guideline regarding capital adequacy, or any change therein or in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by the Issuing Bank or any Participating Bank (or any Applicable Lending Office of the Issuing Bank or such Participating Bank), or any holding company of any such entity, with any request or directive regarding capital adequacy not in effect on the date hereof (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect (i) of reducing the rate of return on such entity's capital or on the capital of such entity's holding company, if any, as a consequence of this Agreement, the Letter of Credit or such entity's participatory interest therein, any Commitment hereunder or the portion of the Advances made by such entity pursuant hereto to a level below that which such entity or such entity's holding company could have achieved, but for such applicability, adoption, change or compliance (taking into consideration such entity's policies and the policies of such entity's holding company with respect to capital adequacy), or (ii) of increasing or otherwise determining the amount of capital required or expected to be maintained by such entity or such entity's holding company based upon the existence of this Agreement, the Letter of Credit or such entity's participatory interest therein, any Commitment hereunder, the portion of the Advances made by such entity pursuant hereto and other similar such credits, participations, commitments, agreements or assets, then from time to time the Account Party shall pay to the Issuing Bank or such Participating Bank, upon demand, such additional amount or amounts as will compensate such entity or such entity's holding company for any such reduction or allocable capital cost suffered.
(c) Notices. A certificate of the Issuing Bank or any Participating Bank setting forth such entity's claim for compensation hereunder and the amount necessary to compensate such entity or its holding company pursuant to subsection (a) or (b) of this Section 4.03 shall be submitted to the Account Party and the Issuing Bank and shall be conclusive and binding for all purposes, absent manifest error. The Account Party shall pay the Issuing Bank or such Participating Bank directly the amount shown as due on any such certificate within ten days after its receipt of the same. The failure of any entity to provide such notice or to make demand for payment under this Section 4.03 shall not constitute a waiver of such Participating Bank's rights hereunder; provided, that such entity shall not be entitled to demand payment pursuant to subsections (a) or (b) of this Section 4.03 in respect of any loss, cost, expense, reduction or reserve if such demand is made more than one year following the later of such entity's incurrence or sufferance thereof or such entity's actual knowledge of the event giving rise to such entity's rights pursuant to such subsections. The protections of this Section 4.03 shall be available to the Issuing Bank and each Participating Bank regardless of any possible contention of the invalidity or inapplicability of the law, rule, regulation, guideline or other change or condition which shall have occurred or been imposed and shall survive the Termination Date and the payment of all other amounts hereunder.
SECTION 4.04. Sharing of Payments, Etc. If any Participating Bank shall
obtain any payment (whether voluntary, involuntary, through the exercise of
any right of set-off, or otherwise, but excluding any proceeds received by
assignments or sales of participations in accordance with Section 10.06
hereof to a Person that is not an Affiliate of the Account Party) on
account of the Advances owing to it (other than pursuant to Section 4.03
hereof) in excess of its ratable share of payments on account of the
Advances obtained by all the Participating Banks, such Participating Bank
shall forthwith purchase from the other Participating Banks such
participation in the portions of the Advances owing to them as shall be
necessary to cause such purchasing Participating Bank to share the excess
payment ratably with each of them; provided, however, that if all or any
portion of such excess payment is thereafter recovered from such purchasing
Participating Bank, such purchase from each Participating Bank shall be
rescinded and such Participating Bank shall repay to the purchasing
Participating Bank the purchase price to the extent of such recovery
together with an amount equal to such Participating Bank's ratable share
(according to the proportion of (i) the amount of such Participating Bank's
required repayment to (ii) the total amount so recovered from the
purchasing Participating Bank) of any interest or other amount paid or
payable by the purchasing Participating Bank in respect of the total amount
so recovered. The Account Party agrees that any Participating Bank so
purchasing a participation from another Participating Bank pursuant to this
Section 4.04 may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of set-off) with respect to such
participation as fully as if such Participating Bank were the direct
creditor of the Account Party in the amount of such participation.
Notwithstanding the foregoing, if any Participating Bank shall obtain any
such excess payment involuntarily, such Participating Bank may, in lieu of
purchasing participations from the other Participating Banks in accordance
with this Section 4.04, on the date of receipt of such excess payment,
return such excess payment to the Agent for distribution in accordance with
Section 4.01(a) hereof.
SECTION 4.05. Taxes. (a) All payments by the Account Party hereunder shall be made in accordance with Section 4.01, free and clear of and without deduction for all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding, in the case of each Participating Bank and the Issuing Bank, taxes imposed on its overall net income, and franchise taxes imposed on it, by the jurisdiction under the laws of which such Participating Bank or the Issuing Bank (as the case may be) is organized or any political subdivision thereof and, in the case of each Participating Bank, taxes imposed on its overall net income, and franchise taxes imposed on it, by the jurisdiction of such Participating Bank's Applicable Lending Office or any political subdivision thereof (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as Taxes ). If the Account Party shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder to any Participating Bank or the Issuing Bank, (i) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 4.05) such Participating Bank or the Issuing Bank (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Account Party shall make such deductions and (iii) the Account Party shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law.
(b) In addition, the Account Party agrees to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies that arise from any payment made hereunder or from the execution, delivery or registration of, or otherwise with respect to, this Agreement (hereinafter referred to as Other Taxes ).
(c) The Account Party will indemnify each Participating Bank and the Issuing Bank for the full amount of Taxes and Other Taxes (including, without limitation, any Taxes and any Other Taxes imposed by any jurisdiction on amounts payable under this Section 4.05) paid by such Participating Bank or the Issuing Bank (as the case may be) and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted. This indemnification shall be made within 30 days from the date such Participating Bank or the Issuing Bank (as the case may be) makes written demand therefor. If any Taxes or Other Taxes for which a Participating Bank or the Issuing Bank has received payments from the Account Party hereunder shall be finally determined to have been incorrectly or illegally asserted and are refunded to such Participating Bank, such Participating Bank shall promptly forward to the Account Party any such refunded amount. The Account Party's, the Issuing Bank's and each Participating Bank's obligations under this Section 4.05 shall survive the Termination Date and the payment of all other amounts hereunder.
(d) Within 30 days after the date of any payment of Taxes, the Account Party will furnish to the Issuing Bank, at its address referred to in Section 10.02 hereof, the original or a certified copy of a receipt evidencing payment thereof.
(e) Each Participating Bank not incorporated in the United States or a jurisdiction within the United States shall, on or prior to the date it becomes a Participating Bank hereunder, deliver to the Account Party and the Issuing Bank such certificates, documents or other evidence, as required by the Internal Revenue Code of 1986, as amended from time to time (the Code ), or treasury regulations issued pursuant thereto, including Internal Revenue Service Form 4224 and any other certificate or statement of exemption required by Treasury Regulation Section 1.1441-1(a) or Section 1.1441-6(c) or any subsequent version thereof, properly completed and duly executed by such Participating Bank establishing that it is (i) not subject to withholding under the Code or (ii) totally exempt from United States of America tax under a provision of an applicable tax treaty. Each Participating Bank shall promptly notify the Account Party and the Issuing Bank of any change in its Applicable Lending Office and shall deliver to the Account Party and the Issuing Bank together with such notice such certificates, documents or other evidence referred to in the immediately preceding sentence. Unless the Account Party and the Issuing Bank have received forms or other documents satisfactory to them indicating that payments hereunder are not subject to United States of America withholding tax or are subject to such tax at a rate reduced by an applicable tax treaty, the Account Party or the Issuing Bank shall withhold taxes from such payments at the applicable statutory rate in the case of payments to or for any Participating Bank organized under the laws of a jurisdiction outside the United States of America. Each Participating Bank represents and warrants that each such form supplied by it to the Issuing Bank and the Account Party pursuant to this Section 4.05, and not superseded by another form supplied by it, is or will be, as the case may be, complete and accurate.
(f) Any Participating Bank claiming any additional amounts payable pursuant to this Section 4.05 shall use reasonable efforts (consistent with legal and regulatory restrictions) to file any certificate or document requested by the Account Party or to change the jurisdiction of its Applicable Lending Office if the making of such a filing or change would avoid the need for or reduce the amount of any such additional amounts which may thereafter accrue and would not, in the sole determination of such Participating Bank, be otherwise disadvantageous to such Participating Bank.
SECTION 4.06. Obligations Absolute. The obligations of the Account Party under this Agreement shall be unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement (as the same may be amended from time to time) under all circumstances, including, without limitation, the following circumstances:
(i) any lack of validity or enforceability of this Agreement, the Second Mortgage or any of the Security Documents or Related Documents or any document or agreement delivered in connection therewith;
(ii) any change in the time, manner or place of payment of, or in any other term of, all or any of the obligations of the Account Party in respect of the Letter of Credit or any other amendment or waiver of or any consent to departure from all or any of the Loan Documents, the Second Mortgage or the Related Documents or any document or agreement delivered in connection therewith;
(iii) the existence of any claim, set-off, defense or other right which the Account Party may have at any time against the Paying Agent, the Trustee or any other beneficiary, or any transferee, of the Letter of Credit (or any persons or entities for whom the Paying Agent, the Trustee, any such beneficiary or any such transferee may be acting), the Agent, the Issuing Bank, or any other person or entity, whether in connection with this Agreement, the transactions contemplated in any of the Loan Documents, the Second Mortgage or the Related Documents, or any unrelated transaction;
(iv) any statement or any other document presented under the Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect, except to the extent that a court of competent jurisdiction shall determine that the Issuing Bank shall have engaged in gross negligence or willful misconduct with respect thereto;
(v) payment by the Issuing Bank under the Letter of Credit against presentation of a draft or certificate which does not comply with the terms of the Letter of Credit, except to the extent that a court of competent jurisdiction shall determine that the Issuing Bank shall have engaged in gross negligence or willful misconduct with respect thereto;
(vi) any exchange of, release of or non-perfection of any interest in any collateral, or any release or amendment or waiver of or consent to departure from any guarantee, for all or any of the obligations of the Account Party in respect of the Letter of Credit; or
(vii) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing.
SECTION 4.07. Evidence of Indebtedness. The Issuing Bank and each Participating Bank shall maintain, in accordance with their usual practice, an account or accounts evidencing the indebtedness of the Account Party resulting from each drawing under the Letter of Credit (in the case of the Issuing Bank) and from each Advance (in the case of each Participating Bank) made from time to time hereunder and the amounts of principal and interest payable and paid from time to time hereunder. In any legal action or proceeding in respect of this Agreement, the entries made in such account or accounts shall, in the absence of manifest error, be conclusive evidence of the existence and amounts of the obligations of the Account Party therein recorded.
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.01. Conditions Precedent to the Issuance of the Letter of Credit. The obligation of the Issuing Bank to issue the Letter of Credit and of each Participating Bank to make the Advances to be made by it is subject to the fulfillment of the conditions precedent that the Agent shall have received on or before the day of such issuance the following, each dated such day (except where specified otherwise below), in form and substance satisfactory to each Participating Bank (except where specified otherwise below) and in sufficient copies for each Participating Bank:
(a) Agreements:
(i) Counterparts of this Agreement, duly executed and delivered by the Account Party, the Agent, the Issuing Bank and each Participating Bank listed on the signature pages hereto.
(ii) Counterparts of the Pledge Agreement, duly executed by the Account Party, the Agent and the Issuing Bank.
(iii) Executed copies (or duplicate copies thereof certified as of the Closing Date by the Account Party in a manner satisfactory to the Agent to be a true copy) of the Indenture and the Loan Agreement, duly executed by the parties thereto.
(iv) Executed copies (or duplicate copies thereof certified as of the Closing Date by the Account Party in a manner satisfactory to the Agent to be a true copy) of the Second Mortgage, duly executed by the parties thereto.
(b) Corporate Matters:
(i) A certificate of the Secretary or an Assistant Secretary of the Account Party certifying that attached thereto are (A) a true and correct listing of the documents comprising the Articles of Incorporation of the Account Party and a true and correct copy of the By-laws of the Account Party, in each case as in effect on the Closing Date and (B) true and correct copies of the resolutions of the Board of Directors of the Account Party approving, if and to the extent necessary, this Agreement, the other Loan Documents, the Related Documents to which it is a party and the other documents to be delivered by or on behalf of the Account Party hereunder and thereunder, and of all documents evidencing other necessary corporate action, if any, with respect to the execution, delivery and performance by or on behalf of the Account Party of this Agreement, the other Loan Documents and such Related Documents and certifying that such resolutions and other corporate actions, if any, are in full force and effect and have not been revoked, rescinded or modified.
(ii) A certificate of the Secretary or an Assistant Secretary of the Account Party certifying the names and true signatures of the officers of the Account Party authorized to sign this Agreement, the other Loan Documents, the Related Documents to which it is a party and the other documents to be delivered hereunder and thereunder.
(c) Governmental Approvals:
(i) A certificate of a duly authorized officer of the Account Party certifying that attached thereto are true and correct copies of all Governmental Approvals referred to in clause (i) of the definition of Governmental Approval required to be obtained or made by the Account Party.
(d) Financial, Accounting and Compliance Matters:
(i) A certificate signed by the Treasurer or Assistant Treasurer of the Account Party, certifying as to the absence of any material adverse change in the financial condition, operations, properties or prospects of the Account Party since December 31, 1992, except to the extent, if any, described in the Account Party's Quarterly Reports on Form 10-Q for the periods ended March 31 and/or June 30, 1993 or in the Account Party's Current Reports on Form 8-K dated June 3, 1993, June 30, 1993 and/or September 10, 1993.
(ii) A certificate of a duly authorized officer of the Account Party to the effect that:
(A) the representations and warranties contained in Section 6.01 are correct in all material respects on and as of the Closing Date before and after giving effect to the issuance of the Letter of Credit; and
(B) no event has occurred and is continuing which constitutes an Event of Default or Unmatured Default, or would result from the issuance of the Letter of Credit.
(e) Relating to the Issuance of the Bonds:
(i) An executed copy (or a duplicate copy thereof certified by the Account Party in a manner satisfactory to the Agent to be a true copy) of the Remarketing Agreement, duly executed by the Issuer, the Remarketing Agent and the Account Party.
(ii) An executed copy (or a duplicate copy thereof certified by the Account Party in a manner satisfactory to the Agent to be a true copy) of the Purchase Contract, duly executed by Goldman, Sachs & Co., Individually and as Representative of Advest, Inc., Greenwich Partners, Inc. and U.S. Securities, Inc., the Issuer and the Account Party.
(iii) A letter from Whitman & Ransom, counsel to the Issuer, addressed to the Agent, the Issuing Bank and the Participating Banks and stating therein that the Agent, the Issuing Bank and the Participating Banks may rely on the opinion of such firm in the form of Appendix C to the Official Statement relating to the Bonds and delivered pursuant to Section 14(i)(2)(F) of the Purchase Contract, together with copies of such opinion.
(iv) Copies of the Preliminary Official Statement and Official Statement used in connection with the offering and remarketing of the Bonds, and any amendments, supplements or "stickers" thereto.
(v) Copies of the Issuer Resolution, and, to the extent not otherwise referenced in this Section 5.01(e), of all other agreements, documents, certificates and opinions delivered in connection with the issuance of the Bonds.
(f) Opinions of Counsel:
Favorable opinions of:
(i) Day, Berry & Howard, counsel to the Account Party, in substantially the form of Exhibit 5.01A and as to such other matters as the Majority Lenders, through the Agent, may reasonably request; and
(ii) King & Spalding, special New York counsel to the Agent and the Issuing Bank, in substantially the form of Exhibit 5.01B.
(g) Miscellaneous:
(i) Letters from S&P and Moody's to the effect that the Bonds have been rated A-1+ and VMIG-1, respectively, such letters to be in form and substance satisfactory to the Issuing Bank.
(ii) Such other approvals, opinions and documents as the Majority Lenders, through the Issuing Bank, may reasonably request as to the legality, validity, binding effect or enforceability of the Loan Documents or the financial condition, properties, operations or prospects of the Account Party.
SECTION 5.02. Additional Conditions Precedent to the Issuance of the Letter of Credit. The obligation of the Issuing Bank to issue the Letter of Credit and of each Participating Bank to make the Advances to be made by it shall be subject to the further conditions precedent that, on the date of the issuance of the Letter of Credit:
(a) the representations and warranties contained in Section 6.01 shall be correct in all material respects on and as of the Closing Date before and after giving effect to the issuance of the Letter of Credit;
(b) no event shall have occurred and be continuing which constitutes an Event of Default or Unmatured Default, or would result from the issuance of the Letter of Credit; and
(c) The Account Party shall have paid all fees under or referenced in Section 2.03 hereof, to the extent then due and payable.
SECTION 5.03. Conditions Precedent to Initial Advances. The obligation of each Participating Bank to make any Initial Advance shall be subject to the conditions precedent that, on the date of such Initial Advance, the following statements shall be true:
(a) the representations and warranties contained in Section 6.01 of this Agreement (other than the last sentence of subsection (f) and clause (ii) of subsection (g) thereof) are true and correct on and as of the date of such Initial Advance, before and after giving effect to such Initial Advance and to the application of the proceeds (if any) therefrom, as though made on and as of such date; and
(b) no event has occurred and is continuing which constitutes an Event of Default.
Unless the Account Party shall have previously advised the Agent in writing that one or more of the statements contained in subsections (a) and (b) of this Section 5.03 is no longer true, the Account Party shall be deemed to have represented and warranted, on and as of the date of any Initial Advance, that the above statements are true.
SECTION 5.04. Conditions Precedent to Term Advances. The obligation of each Participating Bank to make any Term Advance shall be subject to the conditions precedent that, on the date of such Term Advance the following statements shall be true:
(a) the representations and warranties contained in Section 6.01 of this Agreement (including the last sentence of subsection (f) and clause (ii) of subsection (g) thereof) are true and correct on and as of the date of such Term Advance, before and after giving effect to such Term Advance and to the application of the proceeds therefrom, as though made on and as of such date; and
(b) no event has occurred and is continuing which constitutes an Event of Default or an Unmatured Default.
Unless the Account Party shall have previously advised the Agent in writing that one or more of the statements contained in subsections (a) and (b) of this Section 5.04 is no longer true, the Account Party shall be deemed to have represented and warranted, on and as of the date of any Term Advance, that the above statements are true.
SECTION 5.05. Reliance on Certificates. The Agent, the Issuing Bank and the Participating Banks shall be entitled to rely conclusively upon the certificates delivered from time to time by officers of the Account Party, NU and the other parties to the Loan Documents and Related Documents as to the names, incumbency, authority and signatures of the respective persons named therein until such time as the Agent may receive a replacement certificate, in form acceptable to the Agent, from an officer of such Person identified to the Agent as having authority to deliver such certificate, setting forth the names and true signatures of the officers and other representatives of such Person thereafter authorized to act on behalf of such Person.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01. Representations and Warranties of the Account Party. The Account Party represents and warrants as follows:
(a) Each of the Account Party and its Principal Subsidiaries is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, has the requisite corporate power and authority to own its property and assets and to carry on its business as now conducted and is qualified to do business in every jurisdiction where, because of the nature of its business or property, such qualification is required, except where the failure so to qualify would not have a material adverse effect on the financial condition, properties, prospects or operations of the Account Party or of the Account Party and its Principal Subsidiaries taken as a whole. The Account Party has the corporate power to execute, deliver and perform its obligations under this Agreement, each other Loan Document and each Related Document to which it will be a party.
(b) The execution, delivery and performance by the Account Party of each Loan Document and Related Document to which it is a party are within the Account Party's corporate powers, have been duly authorized by all necessary corporate action, and do not and will not contravene (i) the Account Party's charter or by-laws or any law or legal restriction or (ii) any contractual restriction binding on or affecting the Account Party or its properties or any of its Principal Subsidiaries or its properties.
(c) Each of the Account Party and its Principal Subsidiaries is not in violation of any law, or in default with respect to any judgment, writ, injunction, decree, rule or regulation of any court or governmental agency or instrumentality, where such violation or default would have a material adverse effect on the financial condition, properties, prospects or operations of the Account Party or of the Account Party and its Principal Subsidiaries taken as a whole.
(d) All Governmental Approvals referred to in clause (i) in the definition of Governmental Approvals have been duly obtained or made, and all applicable periods of time for review, rehearing or appeal with respect thereto have expired, except as described below. If the period for appeal of the order of the Securities and Exchange Commission approving the transactions contemplated hereby has not expired, the filing of an appeal of such order will not affect the validity of said transactions, unless such order has been otherwise stayed or any of the parties hereto has actual knowledge that any of such transactions constitutes a violation of the Public Utility Holding Company Act of 1935 or any rule or regulation thereunder. No such stay exists and the Account Party has no reason to believe that any of such transactions constitutes any such violation. If the period for appeal of the decision of the Connecticut Department of Public Utility Control (the CDPUC ) approving the transactions contemplated hereby has not expired, the filing of an appeal of such decision will not affect the validity of said transactions, unless operation of such decision has been stayed or suspended by the CDPUC or a reviewing court prior to the consummation of such transactions. No such stay or suspension exists. No representation or warranty is made concerning the applicable period of time for review, rehearing or appeal with respect to Governmental Approvals of the Issuer in connection with the issuance of the Bonds. The Account Party and each of its Principal Subsidiaries have obtained or made all Governmental Approvals referred to in clause (ii) of the definition of Governmental Approvals , except (i) those which are not yet required but which are obtainable in the ordinary course of business as and when required, (ii) those the absence of which would not materially adversely affect the financial condition, properties, prospects or operations of the Account Party or any Principal Subsidiary and (iii) those which the Account Party is diligently attempting in good faith to obtain, renew or extend, or the requirement for which the Account Party is contesting in good faith by appropriate proceedings or by other appropriate means; in each case described in the foregoing clause (iii), such attempt or contest, and any delay resulting therefrom, is not reasonably expected to have a material adverse effect on the financial condition, properties, prospects or operations of the Account Party or any Principal Subsidiary or to magnify to any significant degree any such material adverse effect that would reasonably be expected to result from the absence of such Governmental Approval.
(e) This Agreement, each other Loan Document and each Related Document to which the Account Party is a party have been duly executed and delivered by or on behalf of the Account Party and are legal, valid and binding obligations of the Account Party enforceable against the Account Party in accordance with their respective terms; subject to the qualifications, however, that the enforcement of the rights and remedies herein and therein is subject to bankruptcy and other similar laws of general application affecting rights and remedies of creditors and the application of general principles of equity (regardless of whether considered in a proceeding in equity or at law) and that indemnification against violations of securities and similar laws may be subject to matters of public policy.
(f) (i) The audited balance sheet of the Account Party as at December 31, 1992, and the audited statements of income and cash flows of the Account Party for the fiscal year then ended as set forth in the Account Party's Annual Report on Form 10-K for such fiscal year and (ii) the unaudited balance sheet of the Account Party as at June 30, 1993 and the unaudited statements of income and cash flows of the Account Party for the six-month period then ended as set forth in the Account Party's Quarterly Report on Form 10-Q for the period then ended, fairly present in all material respects the financial condition and results of operations of the Account Party at and for the respective periods ended on such dates, and have been prepared in accordance with generally accepted accounting principles consistently applied. Since December 31, 1992, there has been no material adverse change in the financial condition, operations, properties or prospects of the Account Party and its Subsidiaries, if any, taken as a whole, except to the extent, if any, described in the Account Party's Quarterly Reports on Form 10-Q for the periods ended March 31, 1993 and/or June 30, 1993, or in the Account Party's Current Reports on Form 8-K dated June 3, 1993, June 30, 1993 and/or September 10, 1993 or in Schedule II hereto.
(g) There is no pending or known threatened action or proceeding
(including, without limitation, any action or proceeding relating to any
environmental protection laws or regulations) affecting the Account Party
or its properties, or any of its Principal Subsidiaries or its properties,
before any court, governmental agency or arbitrator (i) which affects or
purports to affect the legality, validity or enforceability of the Loan
Documents or the Related Documents or any of them or (ii) as to which there
is a reasonable possibility of an adverse determination and which, if
adversely determined, would materially adversely affect the financial
condition, properties, prospects or operations of the Account Party and its
Principal Subsidiaries taken as a whole; except, for purposes of clause
(ii) only, such as is described in the Account Party's Annual Report on
Form 10-K for the fiscal year ended December 31, 1992, in the Account
Party's Quarterly Reports on Form 10-Q for the periods ended March 31, 1993
or June 30, 1993, or in the Account Party's Current Reports on Form 8-K,
dated June 3, 1993, June 30, 1993 and/or September 10, 1993 or in Schedule
II hereto.
(h) No ERISA Plan Termination Event has occurred nor is reasonably expected to occur with respect to any ERISA Plan which would materially adversely affect the financial condition, properties, prospects or operations of the Account Party and its Subsidiaries taken as a whole, except as disclosed to and consented to in writing by the Majority Lenders.
Since the date of the most recent Schedule B (Actuarial Information) to the annual report of each such ERISA Plan (Form 5500 Series), there has been no material adverse change in the funding status of the ERISA Plans referred to therein, and no prohibited transaction has occurred with respect thereto that, singly or in the aggregate with all other prohibited transactions and after giving effect to all likely consequences thereof, would be reasonably expected to have a material adverse effect on the financial condition, properties, prospects or operations of the Account Party and its Subsidiaries taken as a whole. Neither the Account Party nor any of its ERISA Affiliates has incurred nor reasonably expects to incur any material withdrawal liability under ERISA to any ERISA Multiemployer Plan, except as disclosed to all Lenders and consented to in writing by the Majority Lenders.
(i) The Account Party or one of its Principal Subsidiaries has good and marketable title (or, in the case of personal property, valid title) or valid leasehold interests in the electric generating plants of which it is named as owner in Item 2 of the Account Party's Annual Report on Form 10-K for the fiscal year ended December 31, 1992 under the caption System Generating Plants , except for minor defects in title that do not interfere with the ability of the Account Party or any of its Principal Subsidiaries to conduct its business as now conducted. All such assets and properties are free and clear of any Lien, other than Liens permitted under Section 7.02(a) hereof.
(j) All outstanding shares of capital stock having ordinary voting power for the election of directors of the Account Party have been validly issued, are fully paid and nonassessable and are owned beneficially by NU, free and clear of any Lien. NU is a holding company (as defined in the Public Utility Holding Company Act of 1935, as amended).
(k) The Account Party and each of its Principal Subsidiaries has filed all tax returns (Federal, state and local) required to be filed and paid taxes shown thereon to be due, including interest and penalties, or, to the extent the Account Party or any of its Principal Subsidiaries is contesting in good faith an assertion of liability based on such returns, has provided adequate reserves in accordance with generally accepted accounting principles for payment thereof.
(l) No exhibit, schedule, report or other written information provided by or on behalf of the Account Party or its agents to the Agent, the Issuing Bank or the Participating Banks in connection with the negotiation, execution and closing of this Agreement, the other Loan Documents or the Related Documents knowingly contained when made any material misstatement of fact or knowingly omitted to state any material fact necessary to make the statements contained therein not misleading in light of the circumstances under which they were made.
(m) No proceeds of any Advance will be used in violation of, or in any manner that would result in a violation by any party hereto of, Regulations G, T, U or X promulgated by the Board of Governors of the Federal Reserve System or any successor regulations. The Account Party (A) is not an investment company within the meaning ascribed to that term in the Investment Company Act of 1940 and (B) is not engaged in the business of extending credit for the purpose of buying or carrying margin stock.
ARTICLE VII
COVENANTS OF THE ACCOUNT PARTY
SECTION 7.01. Affirmative Covenants. So long as any amounts shall remain available to be drawn under the Letter of Credit or any Advance or other amounts shall remain unpaid hereunder or any Participating Bank shall have any Commitment, the Account Party will, unless the Majority Lenders shall otherwise consent in writing:
(a) Use of Proceeds. Apply all proceeds of each Advance solely as specified in Section 3.02 and Section 6.01(m) hereof.
(b) Payment of Taxes, Etc. Pay and discharge before the same shall become delinquent, and cause each of its Principal Subsidiaries to pay and discharge before the same shall become delinquent, all taxes, assessments and governmental charges, royalties or levies imposed upon it or upon its property except to the extent the Account Party or any of its Principal Subsidiaries is contesting the same in good faith by appropriate proceedings and has set aside adequate reserves in accordance with generally accepted accounting principles for the payment thereof.
(c) Maintenance of Insurance. Maintain, or cause to be maintained, insurance (including appropriate plans of self-insurance) covering the Account Party, its Principal Subsidiaries and their respective properties, in effect at all times in such amounts and covering such risks as may be required by law and in addition as is usually carried by companies engaged in similar businesses and owning similar properties.
(d) Preservation of Existence, Etc. Subject at all times to Section 7.02(b) hereof, preserve and maintain, and cause each of its Principal Subsidiaries to preserve and maintain, its existence, corporate or otherwise, material rights (statutory and otherwise) and franchises except for such rights and franchises which do not materially adversely affect the financial condition, properties, prospects or operations of the Account Party or any of its Principal Subsidiaries.
(e) Compliance with Laws, Etc.. Comply, and cause each of its Principal Subsidiaries to comply, in all material respects with the requirements of all applicable laws, rules, regulations and orders of any governmental authority, including, without limitation, any such laws, rules, regulations and orders issued by the Securities and Exchange Commission or relating to zoning, environmental protection, use and disposal of Hazardous Substances, land use, construction and building restrictions, ERISA and employee safety and health matters relating to business operations, except to the extent (i) that the Account Party or any of its Principal Subsidiaries is contesting the same in good faith by appropriate proceedings or (ii) that any such non-compliance, and the enforcement or correction thereof, would not materially adversely affect the financial condition, properties, prospects or operations of the Account Party or any of its Principal Subsidiaries.
(f) Inspection Rights. At any time and from time to time upon reasonable notice, permit the Issuing Bank and its agents and representatives to examine the records and books of account of, and the properties of, the Account Party and any of its Principal Subsidiaries.
(g) Keeping of Books. Keep proper records and books of account, in which full and correct entries shall be made of all financial transactions of the Account Party and its Principal Subsidiaries and the assets and business of the Account Party and its Principal Subsidiaries, in accordance with generally accepted accounting practices consistently applied.
(h) Conduct of Business. Conduct its primary business, and cause each of its Principal Subsidiaries to conduct its primary business, in substantially the same manner and in substantially the same fields as such business is conducted on the Closing Date.
(i) Maintenance of Properties, Etc. (i) As to properties of the type described in Section 6.01(i) hereof, subject at all times to Section 7.02(b) hereof, maintain, and cause its Principal Subsidiaries to maintain, title of the quality described therein; and (ii) preserve, maintain, develop, and operate, and cause its Principal Subsidiaries to preserve, maintain, develop and operate, in substantial conformity with all laws, material contractual obligations and prudent practices prevailing in the industry, all of its properties which are used or useful in the conduct of its or its Principal Subsidiaries' respective businesses in good working order and condition, ordinary wear and tear excepted, except to the extent such non-conformity would not materially adversely affect the financial condition, properties, prospects or operations of the Account Party or any of its Principal Subsidiaries; provided, however, that the Account Party or any Principal Subsidiary will not be prevented from discontinuing the operation and maintenance of any such properties if such discontinuance is, in the judgment of the Account Party or such Principal Subsidiary, desirable in the operation or maintenance of its business and would not materially adversely affect the financial condition, properties, prospects or operations of the Account Party or such Principal Subsidiary.
(j) Governmental Approvals. Duly obtain, and cause each of its
Principal Subsidiaries to duly obtain, on or prior to such date as the same
may become legally required, and thereafter maintain in effect at all
times, all Governmental Approvals on its or such Principal Subsidiary's
part to be obtained, except with respect to those Governmental Approvals
referred to in clause (ii) of the definition of Governmental Approvals ,
(i) those the absence of which would not materially adversely affect the
financial condition, properties, prospects or operations of the Account
Party or any Principal Subsidiary and (ii) those which the Account Party is
diligently attempting in good faith to obtain, renew or extend, or the
requirement for which the Account Party is contesting in good faith by
appropriate proceedings or by other appropriate means; provided, however,
that the exception afforded by clause (ii), above, shall be available only
if and for so long as such attempt or contest, and any delay resulting
therefrom, does not have a material adverse effect on the financial
condition, properties, prospects or operations of the Account Party or any
Principal Subsidiary and does not magnify to any significant degree any
such material adverse effect that would reasonably be expected to result
from the absence of such Governmental Approval.
(k) Further Assurances. Promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary or that any Participating Bank through the Issuing Bank may reasonably request in order to fully give effect to the interests and properties purported to be covered by the Security Documents.
(l) Related Documents. Perform and comply in all material respects with each of the provisions of each Related Document to which it is a party.
(m) Ratings. Maintain at all times ratings in respect of the Bonds of at least two nationally-recognized rating services, at least one of which shall be S&P or Moody's.
SECTION 7.02. Negative Covenants. So long as any amount shall remain available to be drawn under the Letter of Credit or any Advance or other amounts shall remain unpaid hereunder or any Participating Bank shall have any Commitment, the Account Party will not, without the written consent of the Majority Lenders:
(a) Liens, Etc. Create, incur, assume or suffer to exist any lien, security interest, or other charge or encumbrance (including the lien or retained security title of a conditional vendor) of any kind, or any other type of preferential arrangement the intent or effect of which is to assure a creditor against loss or to prefer one creditor over another creditor upon or with respect to any of its properties or assets (any of the foregoing being referred to herein as a Lien ), excluding, however, from the operation of the foregoing restrictions the Liens created or perfected under or in connection with the Pledge Agreement, and the following, whether now existing or hereafter created or perfected:
(i) Liens created by (A) the Indenture of Mortgage and Deed of Trust dated as of May 1, 1921, from the Account Party to Bankers Trust Company, as Trustee, as amended and supplemented (the CL&P Indenture ), or (B) the First Mortgage Indenture and Deed of Trust dated as of January 1, 1958, from the Hartford Electric Light Company ( HELCO ) to the First National Bank of Boston, as Successor Trustee, as amended and supplemented (the HELCO Indenture );
(ii) Liens on the Account Party's interest in the Millstone Unit No. 1, Millstone Unit No. 2 or Millstone Unit No. 3 nuclear generating units in Waterford, Connecticut, or nuclear fuel for any or all nuclear units in which the Account Party has an interest (including, without limitation, Millstone Unit No. 1, Millstone Unit No.2 and Millstone Unit No. 3);
(iii) Permitted Liens or Permitted Encumbrances under the CL&P Indenture or the HELCO Indenture;
(iv) any Lien on assets of any of its Subsidiaries created or assumed to secure Debt owing by any of its Subsidiaries to the Account Party or to any wholly-owned Subsidiary of the Account Party;
(v) any purchase money Lien or construction mortgage on assets hereafter acquired or constructed by the Account Party or any of its Subsidiaries and any Lien on any assets existing at the time of acquisition thereof by the Account Party or any of its Subsidiaries, or created within 180 days from the date of completion of such acquisition or construction; provided that such Lien shall at all times be confined solely to the assets so acquired or constructed and any additions thereto;
(vi) any existing Liens on assets now owned by the Account Party or any of its Subsidiaries; Liens on assets or stock of any class of, or any partnership or joint venture interest in, any of its Subsidiaries existing at the time it becomes a Subsidiary of the Account Party, and liens existing on assets of a corporation or other going concern when it is merged into or with the Account Party or a Subsidiary of the Account Party, or when substantially all of its assets are acquired by the Account Party or a Subsidiary of the Account Party; provided that such Liens shall at all times be confined solely to such assets, or if such assets constitute a utility system, additions to or substitutions for such assets;
(vii) Liens resulting from legal proceedings being contested in good faith by appropriate legal or administrative proceedings by the Account Party or any of its Subsidiaries, and as to which the Account Party or any of its Subsidiaries, as the case may be, to the extent required by generally accepted accounting principles applied on a consistent basis, shall have set aside on its books adequate reserves;
(viii) Liens created in favor of the other contracting party in connection with advance or progress payments;
(ix) any Liens in favor of any state of the United States or any political subdivision of any such state, or any agency of any such state or political subdivisions, or trustee acting on behalf of holders of obligations issued by any of the foregoing or any financial institutions lending to or purchasing obligations of any of the foregoing, which Lien is created or assumed for the purpose of financing all or part of the cost of acquiring or constructing the property subject thereto;
(x) Liens resulting from conditional sale agreements, capital leases or other title retention agreements;
(xi) Liens on property of the Account Party or any of its Subsidiaries related to the financing of pollution control facilities;
(xii) Liens on accounts receivable and power contracts resulting from financing transactions;
(xiii) any other Liens incurred in the ordinary course of business otherwise than to secure Debt; and
(xiv) any extension, renewal or replacement of Liens permitted by clauses (i) through (vi) and (viii) through (xiii); provided, however, that the principal amount of Debt secured thereby shall not, at the time of such extension, renewal or replacement, exceed the principal amount of Debt so secured and that such extension, renewal or replacement shall be limited to all or a part of the property which secured the Lien so extended, renewed or replaced;
(b) Mergers, and Sales of Assets, Etc. Merge with or into or consolidate with or into, any Person, or permit any of its Subsidiaries to be a party to, any merger or consolidation, or purchase or otherwise acquire all or substantially all of the assets or stock of any class of, or any partnership or joint venture interest in, any other Person or entity, or sell, transfer, convey or lease all or any substantial part of its assets (other than sales, transfers or conveyances of receivables and power contracts), except for, and then only after receipt of all necessary corporate and governmental or regulatory approvals and provided, that, before and after giving effect to any such merger, consolidation, purchase, acquisition, sale, transfer, conveyance or lease, no Event of Default or Unmatured Default shall have occurred and be continuing:
(i) any such merger or consolidation, sale, transfer, conveyance, lease or assignment of or by any wholly-owned Subsidiary of the Account Party into the Account Party or into, with or to any other wholly-owned Subsidiary of the Account Party and any such purchase or other acquisition by the Account Party or any wholly- owned Subsidiary of the Account Party of the assets or stock of any wholly- owned Subsidiary of the Account Party;
(ii) any such sale of assets (other than stock) which comprise all or any part of its interest in a nuclear power generating plant (whether completed or under construction);
(iii) any such merger or consolidation of the Account Party with or into another wholly- owned Subsidiary of NU and/or a Regulatory Transaction Entity and/or an entity owning a cogeneration or independent power project, pursuant to step- in or similar rights granted pursuant to a pre-existing power purchase contract, if (but only if): (A) the successor or surviving corporation, if not the Account Party, shall have assumed or succeeded to all of the liabilities of the Account Party (including the liabilities of the Account Party under this Agreement), and (B) the Agent shall have received the favorable written opinion of counsel to the Account Party, in form and substance satisfactory to the Agent and the Majority Lenders, to the effect of the foregoing subclause (A); provided, however, in the event of a merger or consolidation with a Regulatory Transaction Entity, if the purchase price plus the amount of any liabilities assumed in connection with such merger or consolidation exceeds $100,000,000, the Account Party shall deliver to the Agent with sufficient copies for each Participating Bank 30 days prior to such merger or consolidation, a certificate of a duly authorized officer of the Account Party demonstrating projected compliance with the ratio set forth in Section 7.02(d) hereof for and as of each of the three consecutive fiscal quarters immediately succeeding such merger or consolidation and certifying that such projections were prepared in good faith and on reasonable assumptions;
(iv) any purchase or acquisition of all or substantially all of the assets of or stock of any class of, or any partnership or joint venture interest in (and any assumption of the related liabilities) (A) an entity owning a cogeneration or independent power project, pursuant to step-in or similar rights granted pursuant to a pre- existing power purchase contract; (B) a Regulatory Transaction Entity; or (C) any other Person if the purchase price of such acquisition plus the amount of any liabilities assumed by the Account Party in connection therewith does not exceed $50,000,000 in the aggregate; provided, however, in the event of a purchase or acquisition of a Regulatory Transaction Entity, if the purchase price plus the amount of any liabilities assumed in connection with such purchase or acquisition exceeds in the aggregate $100,000,000, the Account Party shall deliver to the Agent with sufficient copies for each Participating Bank 30 days prior to such purchase or acquisition, a certificate of a duly authorized officer of the Account Party demonstrating projected compliance with the ratio set forth in Section 7.02(d) hereof for and as of each of the three consecutive fiscal quarters immediately succeeding such purchase or acquisition and certifying that such projections were prepared in good faith and on reasonable assumptions; or
(v) any purchase or acquisition of a joint venture interest in a generating and/or transmission facility or in a mutual insurance company providing nuclear liability or nuclear property or replacement power insurance.
(c) Compliance with ERISA. (i) Terminate, or permit any ERISA Affiliate to terminate, any ERISA Plan so as to result in any liability of the Account Party or any Principal Subsidiary to the PBGC in an amount greater than $1,000,000, or (ii) permit to exist any occurrence of any Reportable Event (as defined in Title IV of ERISA) which, alone or together with any other Reportable Event with respect to the same or another ERISA Plan, has a reasonable possibility of resulting in liability of the Account Party or any Subsidiary to the PBGC in an aggregate amount exceeding $1,000,000, or any other event or condition, which presents a material risk of such a termination by the PBGC of any ERISA Plan or has a reasonable possibility of resulting in a liability of the Account Party or any Subsidiary to the PBGC in an aggregate amount exceeding $1,000,000.
(d) Common Equity Ratio. Permit the ratio (expressed as a percentage) of Consolidated Common Equity to Consolidated Capitalization to be less than 30% for any three consecutive fiscal quarters.
SECTION 7.03. Reporting Obligations. So long as any amount shall remain available to be drawn under the Letter of Credit or any Advance or other amounts shall remain unpaid hereunder or any Participating Bank shall have any Commitment, the Account Party will, unless the Majority Lenders shall otherwise consent in writing, furnish to the Agent in sufficient copies for the Issuing Bank and each Participating Bank, the following:
(i) as soon as possible and in any event within ten days after the occurrence of each Event of Default or Unmatured Default continuing on the date of such statement, a statement of the Chief Financial Officer, Treasurer or Assistant Treasurer of the Account Party setting forth details of such Event of Default or Unmatured Default and the action which the Account Party proposes to take with respect thereto;
(ii) as soon as available and in any event within 50 days after the end of each of the first three quarters of each fiscal year of the Account Party, a copy of the Account Party's Quarterly Report on Form 10-Q, if any, submitted to the Securities and Exchange Commission with respect to such quarter, containing financial statements in reasonable detail and duly certified (subject to year-end audit adjustments) by the Chief Financial Officer, Treasurer, Assistant Treasurer or Comptroller of the Account Party as having been prepared in accordance with the system of management financial reports of the Account Party applied on a basis consistent with the financial statements referred to in Section 6.01(f) hereof and accompanied by a certificate of a duly authorized officer of the Account Party (X) stating that no Event of Default or Unmatured Default has occurred and is continuing or, if an Event of Default or Unmatured Default has occurred and is continuing, describing the nature thereof and the action which the Account Party proposes to take with respect thereto and (Y) demonstrating compliance with Section 7.02(d) hereof for and as of the end of such fiscal quarter, such demonstration to be in a schedule (in form satisfactory to the Agent) which sets forth the computations used in determining such compliance;
(iii) as soon as available and in any event within 105 days after the
end of each fiscal year of the Account Party, a copy of the Account Party's
Annual Report on Form 10-K submitted to the Securities and Exchange
Commission with respect to such year, containing financial statements
certified by a nationally-recognized independent public accountant and to
be accompanied by a certificate of the Chief Financial Officer, Treasurer,
Assistant Treasurer or Comptroller of the Account Party (X) stating that no
Event of Default or Unmatured Default has occurred and is continuing, or if
an Event of Default or Unmatured Default has occurred and is continuing,
describing the nature thereof and the action which the Account Party
proposes to take with respect thereto and (Y) demonstrating compliance with
Section 7.02(d) hereof for and as of the end of such fiscal year, such
demonstration to be in a schedule (in form satisfactory to the Agent) which
sets forth the computations used in determining such compliance;
(iv) as soon as possible and in any event (A) within 30 days after the Chief Financial Officer, Treasurer or any Assistant Treasurer of the Account Party knows or has reason to know that any ERISA Plan Termination Event described in clause (i) of the definition of ERISA Plan Termination Event with respect to any ERISA Plan or ERISA Multiemployer Plan has occurred and (B) within 10 days after the Account Party knows or has reason to know that any other ERISA Plan Termination Event with respect to any ERISA Plan or ERISA Multiemployer Plan has occurred, a statement of the Chief Financial Officer, Treasurer or Assistant Treasurer of the Account Party describing such ERISA Plan Termination Event and the action, if any, which the Account Party proposes to take with respect thereto;
(v) promptly after receipt thereof by the Account Party or any of its ERISA Affiliates from the PBGC, copies of each notice received by the Account Party or any such ERISA Affiliate of the PBGC's intention to terminate any ERISA Plan or ERISA Multiemployer Plan or to have a trustee appointed to administer any ERISA Plan or ERISA Multiemployer Plan;
(vi) promptly after receipt thereof by the Account Party or any of its ERISA Affiliates from an ERISA Multiemployer Plan sponsor, a copy of each notice received by the Account Party or any of its ERISA Affiliates concerning the imposition or amount of withdrawal liability in an aggregate principal amount of at least $1,000,000 pursuant to Section 4202 of ERISA in respect of which the Account Party may be liable;
(vii) promptly after the Account Party or any Subsidiary becomes aware of the commencement thereof, notice of all actions, suits, proceedings or other events of the type described in Section 6.01(g) hereof;
(viii) promptly after the filing thereof, copies of each prospectus (excluding any prospectus contained in any Form S-8) and Current Report on Form 8-K, if any, which the Account Party or any Principal Subsidiary files with the Securities and Exchange Commission or any governmental authority which may be substituted therefor;
(ix) promptly after receipt thereof, any assertion of the character described in Section 8.01(h) hereof and the action the Account Party proposes to take with respect thereto; and
(x) promptly after requested, such other information respecting the financial condition, operations, properties, prospects or otherwise, of the Account Party or its Subsidiaries as the Agent on behalf of the Majority Lenders may from time to time reasonably request in writing.
ARTICLE VIII
DEFAULTS
SECTION 8.01. Events of Default. The following events shall each constitute an Event of Default if the same shall occur and be continuing after the grace period and notice requirement (if any) applicable thereto:
(a) The Account Party shall fail to pay any interest on any Advance or pursuant to Section 4.02 hereof within two days after the same becomes due; or the Account Party shall fail to reimburse the Issuing Bank for any Interest Drawing (as defined in the Letter of Credit) within two days after such reimbursement becomes due; or the Account Party shall fail to pay any fees or commissions hereunder within five days after the same becomes due; or the Account Party shall fail to make any other payment required to be made pursuant to Article II or Article III hereof when due; or
(b) Any representation or warranty made by the Account Party (or
any of its officers or agents) in this Agreement, the Pledge Agreement or
the Purchase Contract, or in any certificate or other writing delivered
pursuant to this Agreement or the Purchase Contract, shall prove to have
been incorrect in any material respect when made or deemed made; or
(c) The Account Party shall fail to perform or observe any
term or covenant on its part to be performed or observed contained in
Sections 7.01(d), Section 7.02(b) or (d), or Section 7.03(i) hereof; or
(d) The Account Party shall fail to perform or observe any other term or covenant on its part to be performed or observed contained in this Agreement or the Pledge Agreement and any such failure shall remain unremedied, after the earlier of written notice having been given to the Account Party by the Agent, the Issuing Bank or any Participating Bank, and actual knowledge thereof by the Account Party, for a period of 30 days; or
(e) The Account Party or any Principal Subsidiary shall fail to pay any of its Debt when due (including any interest or premium thereon but excluding Debt arising hereunder and excluding other Debt aggregating in no event more than $10,000,000 in principal amount at any one time) whether by scheduled maturity, required prepayment, acceleration, demand or otherwise, and such failure shall continue after the applicable grace period, if any, specified in any agreement or instrument relating to such Debt; or any other default under any agreement or instrument relating to any such Debt, or any other event, shall occur and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such default or event is to accelerate, or to permit the acceleration of, the maturity of such Debt; or any such Debt shall be declared to be due and payable, or required to be prepaid (other than by a regularly scheduled required prepayment or as a result of the Account Party's or such Principal Subsidiary's exercise of a prepayment option) prior to the stated maturity thereof; or
(f) The Account Party or any Principal Subsidiary shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall make an assignment for the benefit of creditors; or any proceeding shall be instituted by or against the Account Party or such Principal Subsidiary seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of its debts under any law relating to bankruptcy, insolvency, or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, or other similar official for it or for any substantial part of its property and, in the case of a proceeding instituted against the Account Party or such Principal Subsidiary, either the Account Party or such Principal Subsidiary shall consent thereto or such proceeding shall remain undismissed or unstayed for a period of 90 days or any of the actions sought in such proceeding (including without limitation the entry of an order for relief against the Account Party or such Principal Subsidiary or the appointment of a receiver, trustee, custodian or other similar official for the Account Party or such Principal Subsidiary or any of its property) shall occur; or the Account Party or such Principal Subsidiary shall take any corporate or other action to authorize any of the actions set forth above in this subsection (f); or
(g) Any judgment or order for the payment of money in excess of $10,000,000 shall be rendered against the Account Party or its properties, or any Principal Subsidiary or its properties, and either (i) enforcement proceedings shall have been commenced by any creditor upon such judgment or order and shall not have been stayed or (ii) there shall be any period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or
(h) Any material provision of any Loan Document or any Related
Document shall for any reason other than the express terms thereof or the
exercise of any right or option expressly contained therein cease to be
valid and binding on the Account Party, or shall be determined to be
invalid or unenforceable by any court, governmental agency or authority
having jurisdiction over the Account Party, or the Account Party shall deny
that it has any further liability or obligation under this Agreement or any
Related Document, or any party to a Related Document shall so assert in
writing; provided, that in the case of any party other than the Account
Party making such assertion in respect of any Related Document, such
assertion shall not in and of itself constitute an Event of Default
hereunder until (i) such asserting party shall cease to perform under and
in compliance with such Related Document, (ii) the Account Party shall fail
to diligently prosecute, by appropriate action or proceedings, a rescission
of such assertion or a binding determination as to the merits thereof or
(iii) such a binding determination shall have been made in favor of such
asserting party's position; or
(i) The Security Documents shall for any reason, except to the extent permitted by the terms thereof, fail or cease to create valid and perfected Liens (to the extent purported to be granted by such documents and subject to the exceptions permitted thereunder) in any of the Collateral (other than Liens in favor of the Trustee with respect to the interests of the Issuer under the Indenture Documents), provided, that such failure or cessation relating to any non-material portion of such Collateral shall not constitute an Event of Default hereunder unless the same shall not have been corrected within 30 days after the Account Party becomes aware thereof; or
(j) NU shall cease to own 100% of the issued and outstanding shares of the capital stock of the Account Party having ordinary voting power for the election of directors, free and clear of any Liens; or
(k) An event of default (as defined therein) shall have occurred and be continuing under the Indenture Documents.
SECTION 8.02. Remedies Upon Events of Default. Upon the
occurrence and during the continuance of any Event of Default, then, and in
any such event, the Agent with the concurrence of the Issuing Bank and the
Majority Lenders may, and upon the direction of the Issuing Bank and the
Majority Lenders the Agent shall (i) if the Letter of Credit shall not have
been issued, instruct the Issuing Bank to (whereupon the Issuing Bank
shall) by notice to the Account Party declare its commitment to issue the
Letter of Credit to be terminated, whereupon the same shall forthwith
terminate, (ii) if the Letter of Credit shall have been issued, instruct
the Issuing Bank to (whereupon the Issuing Bank shall) furnish to the
Trustee and the Paying Agent, at their respective corporate trust offices
as provided in the Indenture Documents, written notice of such Event of
Default in accordance with Section 8.1(A)(4)(1) of the Indenture and of the
Issuing Bank's determination to terminate the Letter of Credit on the fifth
business day (as defined in the Indenture) following the Trustee's and
Paying Agent's receipt of such written notice, (iii) if the Letter of
Credit shall have been issued, instruct the Issuing Bank to (whereupon the
Issuing Bank shall) furnish to the Trustee and the Paying Agent written
notice that the Interest Component will not be reinstated in the amount of
one or more Interest Drawings, all as provided in the Letter of Credit;
(iv) declare the Advances and all other principal amounts outstanding
hereunder, all interest thereon and all other amounts payable hereunder to
be forthwith due and payable, whereupon the Advances and all other
principal amounts outstanding hereunder, all such interest and all such
other amounts shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Account Party, and (v) instruct the
Issuing Bank to (whereupon the Issuing Bank shall) exercise all the rights
and remedies provided herein and under and in respect of the Security
Documents; provided, however, that in the event of the occurrence of any
Event of Default described in Section 8.01(f) with respect to the Account
Party, (A) the commitment of the Issuing Bank to issue the Letter of Credit
and the Commitments and the obligations of the Participating Banks to make
Advances shall automatically be terminated, and (B) the Advances and all
other principal amounts outstanding hereunder, all interest accrued and
unpaid thereon and all other amounts payable hereunder shall automatically
become due and payable, without presentment, demand, protest or any notice
of any kind, all of which are hereby expressly waived by the Account Party.
ARTICLE IX
THE AGENT, THE PARTICIPATING BANKS AND THE ISSUING BANKX
SECTION 9.01. Authorization of Agent; Actions of Agent and Issuing Bank. The Issuing Bank and each Participating Bank hereby appoint and authorize the Agent to take such action as agent on their behalf and to exercise such powers under this Agreement as are delegated to the Agent by the terms hereof, together with such powers as are reasonably incidental thereto; provided, however, that neither the Agent nor the Issuing Bank shall be required to take any action which exposes the Agent or the Issuing Bank to personal liability or which is contrary to this Agreement or applicable law. As to any matters not expressly provided for by any Related Document (including, without limitation, enforcement or collection thereof), neither the Agent nor the Issuing Bank shall be required to exercise any discretion or take any action. The Agent agrees to deliver promptly (i) to the Issuing Bank and each Participating Bank copies of each notice delivered to it by the Account Party and (ii) to each Participating Bank copies of each notice delivered to it by the Issuing Bank, in each case pursuant to the terms of this Agreement.
SECTION 9.02. Reliance, Etc. Neither the Agent, the Issuing Bank, nor any of their directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by it or them under or in connection with this Agreement or any Related Document, except for its or their own gross negligence or willful misconduct as determined by a court of competent jurisdiction. Without limitation of the generality of the foregoing, each of the Agent and the Issuing Bank (i) may consult with legal counsel (including counsel for the Account Party), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (ii) makes no warranty or representation to any Participating Bank and shall not be responsible to any Participating Bank for any statements, warranties or representations made in or in connection with this Agreement or any Related Document; (iii) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement or any Related Document on the part of the Account Party to be performed or observed, or to inspect any property (including the books and records) of the Account Party; (iv) shall not be responsible to any Participating Bank for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any Related Document or any other instrument or document furnished pursuant hereto and thereto; and (v) shall incur no liability under or in respect of this Agreement or any Related Document by acting upon any notice, consent, certificate or other instrument or writing (which may be by telegram, cable or telex), including, without limitation, any thereof from time to time purporting to be from the Trustee, believed by it to be genuine and signed or sent by the proper party or parties.
SECTION 9.03. The Agent, the Issuing Bank and Affiliates. The Agent and the Issuing Bank shall have the same rights and powers under this Agreement as any other Participating Bank and may exercise (or omit from exercising) the same as though they were not the Agent and the Issuing Bank, respectively, and the term Participating Bank shall, unless otherwise expressly indicated, include UBS in its individual capacity. The Agent, the Issuing Bank and their respective Affiliates may accept deposits from, lend money to, act as trustee under indentures of, and generally engage in any kind of business with, the Account Party, any of its subsidiaries and any Person who may do business with or own securities of the Account Party or any such subsidiary, all as if UBS was not the Agent or the Issuing Bank, and without any duty to account therefor to the Participating Banks.
SECTION 9.04. Participating Bank Credit Decision. Each of the Issuing Bank and each Participating Bank acknowledges that it has, independently and without reliance upon the Agent, the Issuing Bank or any other Participating Bank and based on the financial information referred to in Section 6.01(f) hereof and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each of the Issuing Bank and each Participating Bank also acknowledges that it will, independently and without reliance upon the Agent, the Issuing Bank or any other Participating Bank and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement.
SECTION 9.05. Indemnification. The Participating Banks agree to indemnify the Agent and the Issuing Bank (to the extent not reimbursed by the Account Party), ratably according to their respective Participation Percentages, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against the Agent or the Issuing Bank in any way relating to or arising out of this Agreement or any action taken or omitted by the Agent or the Issuing Bank under this Agreement, provided that no Participating Bank shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the Agent's or the Issuing Bank's gross negligence or willful misconduct. Without limitation of the foregoing, each Participating Bank agrees to reimburse the Agent and the Issuing Bank promptly upon demand for its ratable share of any amounts for which the Agent and the Issuing Bank are entitled to reimbursement or indemnity pursuant to Section 10.04 hereof but are not reimbursed by the Account Party.
SECTION 9.06. Successor Agent. The Agent may resign at any time
by giving written notice thereof to the Issuing Bank, the Participating
Banks and the Account Party, with any such resignation to become effective
only upon the appointment of a successor Agent pursuant to this Section
9.06. Upon any such resignation, the Issuing Bank shall have the right to
appoint a successor Agent, which shall be another commercial bank or trust
company reasonably acceptable to the Account Party, organized or licensed
under the laws of the United States, or of any State thereof. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent and
the execution and delivery by the Account Party and the successor Agent of
an agreement relating to the fees, if any, to be paid to the successor
Agent in connection with its acting as Agent hereunder, such successor
Agent shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Agent, and the retiring Agent
shall be discharged from its duties and obligations under this Agreement.
After any retiring Agent's resignation hereunder as Agent, the provisions
of this Article IX shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under this Agreement.
SECTION 9.07. Issuing Bank. (a) All notices received by the Issuing Bank pursuant to this Agreement or any Related Document (other than the Letter of Credit) shall be promptly delivered to the Agent for distribution to the Participating Banks.
(b) The Issuing Bank shall not amend or waive any provision or consent to the amendment or waiver of any Related Document without the written consent of the Majority Lenders.
(c) Upon receipt by the Issuing Bank from time to time of any amount pursuant to the terms of any Related Document (other than pursuant to the terms of this Agreement), the Issuing Bank shall promptly deliver to the Agent such amount.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Pledge Agreement, nor consent to any
departure by the Account Party therefrom, shall in any event be effective
unless the same shall be in writing and signed by the Majority Lenders, and
then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided, however,
that no amendment, waiver or consent shall, unless in writing and signed by
the Issuing Bank and all the Participating Banks, do any of the following:
(a) waive, modify or eliminate any of the conditions specified in Article
V, (b) increase the Commitments of the Participating Banks that may be
maintained hereunder or subject the Participating Banks to any additional
obligations, (c) reduce the principal of, or interest on, the Advances, any
amount reimbursable on demand pursuant to Section 3.01, or any fees or
other amounts payable hereunder, (d) postpone any date fixed for any
payment of principal of, or interest on, the Advances, such reimbursable
amounts or any fees or other amounts payable hereunder (other than fees
payable to the Issuing Bank or the Agent pursuant to Section 2.03(b)
hereof), (e) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Advances, or the number of Participating
Banks which shall be required for the Participating Banks or any of them to
take any action hereunder, (f) amend this Agreement or the Pledge Agreement
in a manner intended to prefer one or more Participating Banks over any
other Participating Banks, (g) amend this Section 10.01, or (h) release any
of the Collateral otherwise than in accordance with any provisions for such
release contained in the Security Documents, or change any provision of any
Security Document providing for the release of all or substantially all of
the Collateral; and provided, further, that no amendment, waiver or consent
shall, unless in writing and signed by the Issuing Bank or the Agent in
addition to the Participating Banks required above to take such action,
affect the rights or duties of the Issuing Bank or the Agent, as the case
may be, under this Agreement or the Pledge Agreement.
SECTION 10.02. Notices, Etc. All notices and other communications provided for hereunder and under the other Loan Documents shall be in writing (including telegraphic, telex, telecopy or cable communication) and mailed, telegraphed, telexed, telecopied, cabled or delivered:
(i) if to the Account Party, to it in care of Northeast Utilities Service Company at 107 Selden Street, Berlin, Connecticut 06037 (telecopy: (203) 665-5457), Attention: Assistant Treasurer;
(ii) if to the Issuing Bank or the Agent, to it at its
address at 299 Park Avenue, New York, New York 10171-0026 Attention: Loan
Servicing Department, James Brodus (telephone: (212) 715-3227, telecopy:
(212) 715-3891), with a copy to Christopher W. Criswell, (telephone: (212)
715-3317, telecopy: (212) 715- 3878);
(iii) if to any Participating Bank, to it at its address set forth on the signature pages hereof or in the Participation Assignment pursuant to which it became a Participating Bank; or as to each party other than any Participating Bank, at such other address as shall be designated by such party in a written notice to the other parties, and, as to any Participating Bank, at such other address as shall be designated by such Participating Bank in a written notice to the Account Party and the Agent. All such notices and communications shall, when mailed, telegraphed, telexed, telecopied or cabled, be effective five days after when deposited in the mails, or when delivered to the telegraph company, confirmed by telex answerback, telecopied or delivered to the cable company, respectively, except that notices and communications to the Agent or the Issuing Bank pursuant to Article II, III or IV shall not be effective until received by the Agent or the Issuing Bank, as the case may be.
SECTION 10.03. No Waiver of Remedies. No failure on the part of any Participating Bank or the Issuing Bank to exercise, and no delay in exercising, any right hereunder or under any Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.
SECTION 10.04. Costs, Expenses and Indemnification. (a) The Account Party agrees to pay on demand all costs and expenses, if any (including, without limitation, reasonable counsel fees and expenses including, in the case of clause (ii) below, the reasonable allocated cost of internal counsel), of (i) the Agent and the Issuing Bank in connection with the preparation, negotiation, execution and delivery of the Loan Documents and the administration of the Loan Documents, the care and custody of any and all collateral, and any proposed modification, amendment, or consent relating thereto; and (ii) the Agent, the Issuing Bank and each Participating Bank in connection with the enforcement (whether through negotiations, legal proceedings or otherwise) of this Agreement, the Second Mortgage or any other Loan Document.
(b) The Account Party hereby agrees to indemnify and hold the Agent, the Issuing Bank and each Participating Bank and their respective officers, directors, employees, professional advisors and affiliates (each, an Indemnified Person ) harmless from and against any and all claims, damages, losses, liabilities, costs or expenses (including reasonable attorney's fees and expenses, whether or not such Indemnified Person is named as a party to any proceeding or investigation or is otherwise subjected to judicial or legal process arising from any such proceeding or investigation) which any of them may incur or which may be claimed against any of them by any person or entity (except to the extent such claims, damages, losses, liabilities, costs or expenses arise from the gross negligence or willful misconduct of the Indemnified Person):
(i) by reason of or in connection with the execution, delivery or performance of any of the Loan Documents, the Second Mortgage or the Related Documents or any transaction contemplated thereby, or the use by the Account Party of the proceeds of any Advance or the use by the Paying Agent or the Trustee of the proceeds of any drawing under the Letter of Credit;
(ii) in connection with or resulting from the utilization, storage, disposal, treatment, generation, transportation, release or ownership of any Hazardous Substance (A) at, upon or under any property of the Account Party or any of its Affiliates or (B) by or on behalf of the Account Party or any of its Affiliates at any time and in any place;
(iii) in connection with any documentary taxes, assessments or charges made by any governmental authority by reason of the execution and delivery of any of the Loan Documents or the Second Mortgage;
(iv) by reason of or in connection with the execution and delivery or transfer of, or payment or failure to make payment under, the Letter of Credit; provided, however, that the Account Party shall not be required to indemnify the Agent, the Issuing Bank or any Participating Bank pursuant to this Section for any claims, damages, losses, liabilities, costs or expenses to the extent caused by (A) the Issuing Bank's willful misconduct or gross negligence, as determined by a court of competent jurisdiction, in determining whether documents presented under the Letter of Credit are genuine or comply with the terms of the Letter of Credit or (B) the Issuing Bank's willful or grossly negligent failure, as determined by a court of competent jurisdiction, to make lawful payment under the Letter of Credit after the presentation to it by the Paying Agent of a draft and certificate strictly complying with the terms and conditions of the Letter of Credit; or
(v) by reason of any inaccuracy or alleged inaccuracy in any material respect, or any untrue statement or alleged untrue statement of any material fact, contained in any Preliminary Official Statement or Official Statement relating to the Bonds or any amendment or supplement thereto, except to the extent contained in or arising from information in any Preliminary Official Statement or Official Statement relating to the Bonds supplied in writing by and describing the Issuing Bank.
(c) Nothing contained in this Section 10.04 is intended to limit the Account Party's obligations set forth in Articles II, III and IV. The Account Party's obligations under this Section 10.04 shall survive the creation and sale of any participation interest pursuant to Section 10.06 hereof and shall survive as well the repayment of all amounts owing to the Agent, the Issuing Bank and the Participating Banks under the Loan Documents and the termination of the Commitments. If and to the extent that the obligations of the Account Party under this Section 10.04 are unenforceable for any reason, the Account Party agrees to make the maximum contribution to the payment and satisfaction thereof which is permissible under applicable law.
SECTION 10.05. Right of Set-off. (a) Upon (i) the occurrence
and during the continuance of any Event of Default and (ii) the taking of
any action or the giving of any instruction by the Agent as specified by
Section 8.02 hereof, the Issuing Bank and each Participating Bank are
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by the Issuing Bank or such Participating
Bank to or for the credit or the account of the Account Party against any
and all of the obligations of the Account Party now or hereafter existing
under this Agreement in favor of the Issuing Bank or such Participating
Bank, irrespective of whether or not the Issuing Bank or such Participating
Bank shall have made any demand under this Agreement and although such
obligations may be unmatured. The Issuing Bank and each Participating Bank
agrees promptly to notify the Account Party after any such set-off and
application provided that the failure to give such notice shall not affect
the validity of such set-off and application. The rights of the Issuing
Bank and each Participating Bank under this Section are in addition to
other rights and remedies (including, without limitation, other rights of
set-off) which the Issuing Bank and/or such Participating Bank may have.
(b) The Account Party agrees that it shall have no right of off-set, deduction or counterclaim in respect of its obligations hereunder, and that the obligations of the Issuing Bank and of the several Participating Banks hereunder are several and not joint. Nothing contained herein shall constitute a relinquishment or waiver of the Account Party's rights to any independent claim that the Account Party may have against the Issuing Bank or any Participating Bank, but no Participating Bank shall be liable for the conduct of the Issuing Bank or any other Participating Bank, and the Issuing Bank shall not be liable for the conduct of any Participating Bank.
SECTION 10.06. Binding Effect; Assignments and Participants.
(a) This Agreement shall become effective when it shall have been executed
and delivered by the Account Party, the Agent, the Issuing Bank and each
Participating Bank named on the signature pages hereto and thereafter shall
be binding upon and inure to the benefit of the Account Party, the Agent,
the Issuing Bank and each Participating Bank and their respective
successors and assigns, except that the Account Party shall not have the
right to assign its rights hereunder or any interest herein nor transfer
any of its obligations without the prior written consent of the Issuing
Bank and each Participating Bank, and the Issuing Bank may not assign its
commitment to issue the Letter of Credit or its obligations under or in
respect of the Letter of Credit.
(b) Each Participating Bank may assign all or any portion of its rights and transfer its obligations under this Agreement, under the Letter of Credit or in any security hereunder, including, without limitation, any instruments securing the Account Party's obligations hereunder; provided that (i) no assignment by any Participating Bank may be made to any Person, except with the prior written consent of (A) the Account Party (which consent shall not be unreasonably withheld and, in the case of an assignment to another Participating Bank or to an Affiliate of a Participating Bank, shall not be required) and (B) the Issuing Bank, (ii) any assignment shall be of a constant and not a varying percentage of all of the assignor's rights and obligations hereunder and (iii) the parties to each such assignment shall execute and deliver to the Agent a Participation Assignment, together with a processing fee of $3,000. Upon receipt of a completed Participation Assignment and the processing fee, the Agent will record in a register maintained for such purpose the name of the assignee and the percentage participation interest assigned by the assignor and assumed by the assignee for purposes of the determination of such assignor's and assignee's respective Participation Percentages. Upon such execution, delivery, acceptance and recording, from and after the effective date specified in each Participation Assignment, which effective date shall be at least five Business Days after the execution thereof, the assignee shall, to the extent of such assignment, become a party hereto and have all of the rights and obligations of a Participating Bank hereunder and, to the extent of such assignment, such assigning Participating Bank shall be released from its obligations hereunder (without relieving such Participating Bank from any liability for damages, costs and expenses suffered by the Issuing Bank or the Account Party as a result of the failure by such Participating Bank to perform its obligations hereunder).
(c) Each Participating Bank may grant participations to one or
more Persons in all or any part of, or any interest (undivided or divided)
in, such Participating Bank's rights and obligations under this Agreement
(any such Person being referred to hereinafter as a Participant and such
interests are collectively, referred to hereinafter as the Rights );
provided, however, that (i) such Participating Bank's obligations under
this Agreement shall remain unchanged; (ii) any such Participant shall be
entitled to the benefits and cost protections provided for in Section 4.03
hereof on the same basis as if it were a Participating Bank hereunder;
(iii) the Account Party, the Agent and the Issuing Bank shall continue to
deal solely and directly with such Participating Bank in connection with
such Participating Bank's rights and obligations under this Agreement; and
(iv) no such Participant, other than an Affiliate of such Participating
Bank, shall be entitled to require such Participating Bank to take or omit
to take any action hereunder, unless such action or omission would have an
effect of the type described in subsections (c), (d) or (h) of Section
10.01 hereof.
(d) Notwithstanding anything contained in this Section 10.06 to the contrary, the Issuing Bank and any Participating Bank may assign and pledge all or any portion of the Advances (or participating interests therein) owing to the Issuing Bank or such Participating Bank to any Federal Reserve Bank (and its transferees) as collateral security pursuant to Regulation A of the Board of Governors of the Federal Reserve System and any Operating Circular issued by such Federal Reserve Bank. No such assignment shall release the Issuing Bank or such Participating Bank from its obligations hereunder.
SECTION 10.07. Relation of the Parties; No Beneficiary. No term, provision or requirement, whether express or implied, of any Loan Document, or actions taken or to be taken by any party thereunder, shall be construed to create a partnership, association, or joint venture between such parties or any of them. No term or provision of the Loan Documents shall be construed to confer a benefit upon, or grant a right or privilege to, any Person other than the parties hereto.
SECTION 10.08. Issuing Bank Not Liable. As between the Agent, the Issuing Bank and the Participating Banks on the one hand, and the Account Party on the other, the Account Party assumes all risks of the acts or omissions of the Paying Agent, the Trustee and any other beneficiary or transferee of the Letter of Credit with respect to its use of the Letter of Credit. Neither the Agent, the Issuing Bank, any Participating Bank, nor any of their respective officers or directors shall be liable or responsible for: (a) the use which may be made of the Letter of Credit or any acts or omissions of the Paying Agent, the Trustee and any other beneficiary or transferee in connection therewith; (b) the validity, sufficiency or genuineness of documents, or of any endorsement thereon, even if such documents should prove to be in any or all respects invalid, insufficient, fraudulent or forged; (c) payment by the Issuing Bank against presentation of documents which do not comply with the terms of the Letter of Credit, including failure of any documents to bear any reference or adequate reference to the Letter of Credit; or (d) any other circumstances whatsoever in making or failing to make payment under the Letter of Credit, except that the Account Party shall have a claim against the Issuing Bank, and the Issuing Bank shall be liable to the Account Party, to the extent of any direct, as opposed to consequential, damages suffered by the Account Party which the Account Party proves were caused by (i) the Issuing Bank's willful misconduct or gross negligence, as determined by a court of competent jurisdiction, in determining whether documents presented under the Letter of Credit are genuine or comply with the terms of the Letter of Credit or (ii) the Issuing Bank's willful or grossly negligent failure, as determined by a court of competent jurisdiction, to make lawful payment under the Letter of Credit after the presentation to it by the Paying Agent of a draft and certificate strictly complying with the terms and conditions of the Letter of Credit. In furtherance and not in limitation of the foregoing, the Issuing Bank may accept original or facsimile (including telecopy) sight drafts and accompanying certificates presented under the Letter of Credit that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary.
SECTION 10.09. Confidentiality. In connection with the negotiation and administration of this Agreement and the other Loan Documents, the Account Party has furnished and will from time to time furnish to the Agent, the Issuing Bank and the Participating Banks (each, a
Recipient ) written information which is identified to the Recipient when delivered as confidential (such information, other than any such information which (i) was publicly available, or otherwise known to the Recipient, at the time of disclosure, (ii) subsequently becomes publicly available other than through any act or omission by the Recipient or (iii) otherwise subsequently becomes known to the Recipient other than through a Person whom the Recipient knows to be acting in violation of his or its obligations to the Account Party, being hereinafter referred to as Confidential Information ). The Recipient will not knowingly disclose any such Confidential Information to any third party (other than to those Persons who have a confidential relationship with the Recipient), and will take all reasonable steps to restrict access to such information in a manner designed to maintain the confidential nature of such information, in each case until such time as the same ceases to be Confidential Information or as the Account Party may otherwise instruct. It is understood, however, that the foregoing will not restrict the Recipient's ability to freely exchange such Confidential Information with prospective assignees of or participants in the Recipient's position herein, but the Recipient's ability to so exchange Confidential Information shall be conditioned upon any such prospective assignee's or participant's entering into an understanding as to confidentiality similar to this provision. It is further understood that the foregoing will not prohibit the disclosure of any or all Confidential Information in any litigation or proceedings between the Account Party and such Recipient and/or if and to the extent that such disclosure may be required (i) by a regulatory agency or otherwise in connection with an examination of the Recipient's records by appropriate authorities, (ii) pursuant to court order, subpoena or other legal process or (iii) otherwise, as required by law; in the event of any required disclosure under clause (ii) or (iii), above, the Recipient agrees to use reasonable efforts to inform the Account Party as promptly as practicable unless the Recipient is prohibited from doing so by court order, subpoena or other legal process.
SECTION 10.10 Waiver of Jury Trial. The Account Party, the Agent, the Issuing Bank, and the Participating Banks each hereby irrevocably waives all right to trial by jury in any action, proceeding or counterclaim arising out of or relating to this Agreement or any other Loan Document, or any other instrument or document delivered hereunder or thereunder.
SECTION 10.11. Governing Law. This Agreement and the Pledge Agreement shall be governed by, and construed in accordance with, the laws of the State of New York. The Account Party, the Agent, the Issuing Bank and each Participating Bank each (i) irrevocably submits to the jurisdiction of any New York State court or Federal court sitting in New York City in any action arising out of any Loan Document, (ii) agrees that all claims in such action may be decided in such court, (iii) waives, to the fullest extent it may effectively do so, the defense of an inconvenient forum and (iv) consents to the service of process by mail. A final judgment in any such action shall be conclusive and may be enforced in other jurisdictions. Nothing herein shall affect the right of any party to serve legal process in any manner permitted by law or affect its right to bring any action in any other court.
SECTION 10.12. Execution in Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
THE ACCOUNT PARTY:
THE CONNECTICUT LIGHT AND
POWER COMPANY
By /s/Bruce F. Garelick Title: Assistant Treasurer |
THE AGENT AND ISSUING BANK:
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH,
as Agent and as Issuing Bank
By /s/Christopher W. Criswell Title: Vice President By /s/Laura Monroe Singer Title: Assistant Treasurer |
THE PARTICIPATING BANKS:
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH
By /s/Christopher W. Criswell Title: Vice President By /s/Laura Monroe Singer Title: Assistant Treasurer |
Participation Percentage: 100%
Address for Notices
Union Bank of Switzerland,
New York Branch
299 Park Avenue
New York, New York 10171-0026
Attention: Loan Servicing
Dept., James Brodus
Telephone: (212) 715-3227
Fax: (212) 715-3891
With a Copy To:
Attention: Christopher W. Criswell
Telephone: (212) 715-3317
Fax: (212) 715-3878
SCHEDULE I
APPLICABLE LENDING OFFICES
Name of Domestic
Participating Bank Lending Office
Union Bank of Switzerland, 299 Park Avenue
New York Branch New York, NY 10022
Attn: Loan Servicing
Dept., James Brodus
Tel: (212) 715-3227
Fax: (212) 715-3891
with a copy to:
Christopher W. Criswell
Tel: (212) 715-3317
Fax: (212) 715-3878
|
SCHEDULE II
PENDING ACTIONS
NONE
[Form of Letter of Credit - CDA/CL&P SERIES B]
EXHIBIT 1.01A
IRREVOCABLE LETTER OF CREDIT
NO. SBY502181
September 22, 1993
Shawmut Bank Connecticut, National Association
777 Main Street
Hartford, Connecticut 06115
Attention: Corporate Trust Department
Dear Sir or Madam:
We hereby establish, at the request and for the account of The
Connecticut Light and Power Company (the "Account Party"), in your favor,
as Paying Agent (the "Paying Agent") under that certain Indenture of Trust,
dated as of September 1, 1993 (the "Indenture"), by and between the
Connecticut Development Authority (the "Issuer") and Shawmut Bank
Connecticut, National Association, as trustee (the "Trustee"), pursuant to
which $70,000,000 in aggregate principal amount of the Issuer's Pollution
Control Revenue Refunding Bonds (The Connecticut Light and Power Company
Project - 1993B Series) (the "Bonds"), are being issued, our Irrevocable
Letter of Credit No. SBY502181, in the amount of US$71,036,000.00 (SEVENTY-
ONE MILLION THIRTY-SIX THOUSAND AND NO ONE-HUNDREDTHS UNITED STATES
DOLLARS) (subject to reduction and reinstatement as provided below).
(1) Credit Termination Date. This Letter of Credit shall expire on
the earliest to occur of (i) September 22, 1996 (the "Stated Termination
Date"), (ii) the date upon which we honor a draft accompanying a written
and completed certificate signed by you in substantially the form of
Exhibit 2 attached hereto, and stating therein that such draft is the final
draft to be drawn under this Letter of Credit and that, upon the honoring
of such draft, this Letter of Credit will expire in accordance with its
terms, (iii) the date upon which we receive a written certificate signed by
you and stating therein that no Bonds entitled to the benefits of this
Letter of Credit (as determined in accordance with the Indenture)
("Eligible Bonds") are "Outstanding" under (and as defined in) the
Indenture, (iv) the fifth business day following receipt by you and the
Trustee of written notice from us that an Event of Default (as defined
below) has occurred under the Reimbursement Agreement (as defined below)
and of our determination to terminate this Letter of Credit on such fifth
business day and (v) the date upon which we receive a written certificate
signed by you and stating therein that a substitute or replacement Credit
Facility (as defined in the Indenture) has been provided pursuant to
Section 3.12 of the "Agreement" referred to (and as defined) in the
Indenture (such earliest date being the "Credit Termination Date").
As used herein, the term "business day" shall mean any day of the year
(i) that is not a Saturday or Sunday, (ii) that is a day on which banks
located in Hartford, Connecticut and New York, New York are not required or
authorized to remain closed and (iii) that is a day on which banking
institutions in all of the cities in which the principal offices of the
Trustee, the Paying Agent and the Remarketing Agent (as defined in the
Indenture) are located are not required or authorized to remain closed and
(iv) that is a day on which the New York Stock Exchange, Inc. is not
closed.
As used herein "Reimbursement Agreement" shall mean the Letter of Credit and Reimbursement Agreement, dated as of September 1, 1993, between the Account Party, us and certain Participating Banks referred to therein, and the term "Event of Default" shall mean an "Event of Default" as that term is defined in the Reimbursement Agreement.
(2) Principal, Interest and Premium Components. The aggregate amount which may be drawn under this Letter of Credit, subject to reductions in amount and reinstatement as provided below, is US$71,036,000.00 (SEVENTY- ONE MILLION THIRTY-SIX THOUSAND AND NO ONE-HUNDREDTHS UNITED STATES DOLLARS), of which the aggregate amounts set forth below may be drawn as indicated.
(i) An aggregate amount not exceeding US$70,000,000.00 ( SEVENTY MILLION AND NO ONE-HUNDREDTHS UNITED STATES DOLLARS), as such amount may be reduced and reinstated as provided below, may be drawn in respect of payment of principal (whether upon scheduled or accelerated maturity, or upon redemption) of Eligible Bonds or the portion of the purchase price of Eligible Bonds corresponding to principal (the "Principal Component").
(ii) An aggregate amount not exceeding US$1,036,000.00 (ONE MILLION THIRTY-SIX THOUSAND AND NO ONE-HUNDREDTHS UNITED STATES DOLLARS), as such amount may be reduced and reinstated as provided below, may be drawn in respect of payment of (A) accrued and unpaid interest on Eligible Bonds not in the Flexible Mode (as defined in the Indenture) or that portion of the redemption price or purchase price of such Eligible Bonds corresponding to accrued and unpaid interest, but not more than an amount equal to accrued and unpaid interest on such Eligible Bonds for up to a maximum of 45 days immediately preceding the date of such drawing and (B) unpaid interest (whether accrued or to accrue) on Eligible Bonds in the Flexible Mode or that portion of the redemption price or purchase price of such Eligible Bonds corresponding to such interest, but not more than an amount equal to such interest on such Eligible Bonds for up to a maximum of 45 days immediately preceding the next Purchase Date (as defined in the Indenture) for each such Eligible Bond (or, if interest on any such Eligible Bond was not paid on the most recent Purchase Date for such Bond, for up to a maximum of 45 days immediately preceding the date of such drawing), calculated, in each case referred to in the foregoing clause (A) or clause (B) at a maximum rate of twelve percent (12%) per annum, or such lesser rate of interest as shall equal the Maximum Interest Rate (as defined in the Indenture) in effect under the Indenture with respect to such Eligible Bonds, and in any case calculated on the basis of a year of 365 or 366 days (as applicable) for the actual days elapsed (the "Interest Component").
(iii) An aggregate amount not exceeding US$0.00 (ZERO UNITED STATES DOLLARS) may be drawn in respect of premium on Eligible Bonds (the "Premium Component"). If, subsequent to the date hereof, the Premium Component shall be increased by us at the request of the Account Party, the Premium Component shall be subject to reduction as provided below, and amounts drawn in respect thereof shall not be subject to reinstatement.
(3) Drawings. Funds under this Letter of Credit are available to you against (i) your draft, stating on its face: "Drawn under Irrevocable Letter of Credit No. SBY502181, dated September 22, 1993", and (ii) the appropriate certificate specified below, purportedly executed by you and appropriately completed.
Exhibit Setting Forth
Type of Drawing Form of Certificate Required
Tender Drawing Exhibit 1
(as hereinafter defined)
Redemption/Mandatory Exhibit 2
Purchase Drawing
(as hereinafter defined)
Interest Drawing Exhibit 3
(as hereinafter
defined)
|
Drafts and certificates hereunder shall be dated the date of presentation and shall be presented at our office located at 299 Park Avenue, New York, New York 10171-0026 Attention: Loan Servicing Department, James Brodus (telephone: (212) 715-3227) (or at such other office as we may designate by written notice to you) with a copy to Christopher W. Criswell (telephone: (212) 715-3317), FAX: (212) 715-3878). Presentation of such drafts and certificates may be made (a) by physical presentation of such drafts and certificates or (b) by facsimile transmission of such drafts and certificates received by us at (212) 715- 3891 (or at such other number as we may designate by written notice to you) with prior telephone notice to us at (212) 715-3227, Attention: James Brodus, (or at such other number as we may designate by written notice to you; in any event with a copy to Christopher W. Criswell as aforesaid) that such presentation is to be made by facsimile transmission and with the original executed drafts and certificates to be received by us not later than our close of business on the next business day, it being understood that payments hereunder shall be made upon receipt by us of such facsimile transmission; provided, however, that presentations of drafts and certificates relating to Tender Drawings in respect of Eligible Bonds in the Flexible Mode shall in all instances be made in accordance with the foregoing clause (b). Drafts drawn under and in strict compliance with the terms of this Letter of Credit will be duly honored by us upon presentation thereof in accordance with this Paragraph 3 if presented on or prior to 4:00 P.M. (New York City time) on the Credit Termination Date as follows:
(i) Tender Drawings; Flexible Mode. In the case of drafts and certificates relating to Tender Drawings in respect of Eligible Bonds in the Flexible Mode presented in accordance with the foregoing clause (b):
(A) if such drafts and certificates are presented as aforesaid at or prior to 1:30 P.M. (New York City time) on a business day, and provided that such drafts and certificates strictly conform to the requirements of this Letter of Credit, we will initiate a wire transfer of the amount so drawn to your account indicated below at or prior to 3:30 P.M. (New York City time) on the same business day;
(B) if such drafts and certificates are presented as aforesaid after 1:30 P.M. but at or prior to 4:00 P.M. (New York City time) on a business day, and provided that such drafts and certificates strictly conform to the requirements of this Letter of Credit, we will initiate a wire transfer of the amount so drawn to your account indicated below at or prior to 10:00 A.M. on the business day next succeeding the business day on which such drafts and certificates were presented (notwithstanding that such day of presentation may have been the Credit Termination Date); and
(C) if such drafts and certificates are presented as aforesaid after 4:00 P.M. (New York City time) on a business day, and provided that such drafts and certificates strictly conform to the requirements of this Letter of Credit, we will initiate a wire transfer of the amount so drawn to your account indicated below at or prior to 1:00 P.M. (New York City time) on the business day next succeeding the business day on which such drafts and certificates were presented (notwithstanding that such day of presentation may have been the Credit Termination Date);
and
(ii) All Other Drawings: In the case of any other drafts and certificates:
(A) if such drafts and certificates are presented as aforesaid at or prior to 4:00 P.M. (New York City time) on a business day, and provided that such drafts strictly conform to the requirements of this Letter of Credit, we will initiate a wire transfer of the amount so drawn to your account indicated below at or prior to 10:00 A.M. (New York City time) on the business day next succeeding the business day on which such drafts and certificates were presented (notwithstanding that such day of presentation may have been the Credit Termination Date); and
(B) if such drafts and certificates are presented as aforesaid after 4:00 P.M. (New York City time) on a business day, and provided that such drafts and certificates strictly conform to the requirements of this Letter of Credit, we will initiate a wire transfer of the amount so drawn to your account indicated below at or prior to 1:00 P.M. (New York City time) on the business day next succeeding the business day on which such drafts and certificates were presented (notwithstanding that such day of presentation may have been the Credit Termination Date).
Wire transfers of funds paid in respect of any drawing hereunder shall be made to you at Shawmut Bank Connecticut, National Association, Hartford, Connecticut, ABA# 011900445, Account No. 0067548290 Corporate Trust Admin. Wire Account, Attention: K. Larimore, Reference: CDA/CL&P Series 1993B, or to such other account as you may from time to time specify to us in writing. All payments made by us under this Letter of Credit will be made with our own funds and not with any funds of the Account Party or the Issuer.
(4) Reductions. The Interest Component shall be reduced immediately
following our honoring any draft drawn hereunder to pay unpaid interest on
Eligible Bonds or to pay that portion of the purchase price or redemption
price corresponding to unpaid interest on Eligible Bonds, in each case by
an amount equal to the amount of such draft (any such drawing being an
"Interest Drawing"). The Principal Component shall be reduced immediately
following our honoring any draft drawn hereunder: (i) pursuant to Section
5.8(B) of the Indenture to pay that portion of purchase price corresponding
to principal of Eligible Bonds that are (A) subject to mandatory tender for
purchase pursuant to Section 2.3(G)(1)(c) or 2.3(G)(2)(d)(ii) of the
Indenture or (B) tendered for purchase by the holders thereof pursuant to
2.3(G)(2)(c) of the Indenture, (ii) pursuant to Section 5.8(C) of the
Indenture to pay that portion of purchase price corresponding to principal
of Eligible Bonds that are the subject of a failed conversion pursuant to
Section 2.3(G)(1)(b) or 2.3(G)(2)(b) of the Indenture, as appropriate (any
such drawing in respect of the circumstances referred to in the foregoing
clause (i) or this clause (ii) being a "Tender Drawing"), (iii) pursuant to
Section 5.8(A) of the Indenture to pay the principal of Eligible Bonds or
that portion of the redemption price of Eligible Bonds corresponding to
principal, whether at stated maturity, upon acceleration or upon
redemption, or (iv) pursuant to Section 5.8(B) of the Indenture to pay that
portion of the purchase price corresponding to principal of Eligible Bonds
that are subject to mandatory tender for purchase pursuant to Section
2.3(G)(2)(d)(i) of the Indenture (any such drawing in respect of the
circumstances referred to in the foregoing clause (iii) or in this clause
(iv) being a "Redemption/Mandatory Purchase Drawing"), in each such case by
an amount equal to the amount of such draft. The Premium Component shall
be reduced immediately following our honoring any draft drawn hereunder to
pay premium on Eligible Bonds in connection with a Redemption/Mandatory
Purchase Drawing, by an amount equal to the amount of such draft.
Additionally, upon receipt of a Notice of Reduction in the form of Exhibit 4 to this Letter of Credit purportedly executed by you, we will reduce the Principal Component, Interest Component and Premium Component to the amounts therein stated.
(5) Reinstatement. The Interest Component and the Principal
Component shall, from time to time, be reinstated by us in accordance with,
and only to the extent provided in, the following subparagraphs (i) and
(ii). In no event shall reductions in the Premium Component be reinstated.
(i) Interest Component. Reductions in the Interest Component resulting from Interest Drawings shall be reinstated as follows:
(A) Immediately following each drawing hereunder to pay unpaid interest on Eligible Bonds in the Flexible Mode or to pay that portion of purchase price, but not redemption price, corresponding to unpaid interest on Eligible Bonds in the Flexible Mode, the amount so drawn shall be automatically reinstated to the Interest Component unless, not later than the business day preceding such drawing you shall have received written notice from us that we will not reinstate the Interest Component in the amount of such drawing. On the fifth day following each drawing hereunder to pay accrued and unpaid interest on Eligible Bonds that are not in the Flexible Mode, or to pay that portion of purchase price, but not redemption price, corresponding to accrued and unpaid interest on Eligible Bonds that are not in the Flexible Mode, the amount so drawn shall be automatically reinstated to the Interest Component, unless you shall have theretofore received written notice from us that we will not reinstate the Interest Component in the amount of such drawing. Any notice of non-reinstatement delivered pursuant to this subparagraph (i)(A) shall be in writing and shall be delivered to you by hand delivery or facsimile transmission.
(B) If, subsequent to any such delivery of a notice of non- reinstatement as aforesaid, we shall deliver to you, by hand delivery or facsimile transmission, a Notice of Reinstatement in the form of Exhibit 5 hereto, then, upon such delivery to you, the Interest Component shall be immediately reinstated to the extent specified in such Notice of Reinstatement.
(C) In no event shall the Interest Component be reinstated to an amount in excess of 45 days' interest on Eligible Bonds, computed at the rate of 12% per annum on the basis of a year of 365 or 366 days (as applicable) for the actual days elapsed, or such lesser rate of interest as shall equal the Maximum Interest Rate (as defined in the Indenture) in effect under the Indenture with respect to such Eligible Bonds.
(ii) Principal Component. Reductions in the Principal Component resulting from Redemption/Mandatory Purchase Drawings shall in no event be reinstated. Reductions in the Principal Component resulting from Tender Drawings shall be reinstated as follows:
(A) Immediately upon receipt by us of proceeds from the remarketing of Pledged Bonds (as defined in the Indenture), or of written notice from you that you have received such proceeds (or a window receipt guaranteeing same day payment in immediately available funds of such proceeds as contemplated by Section 9.19(A) of the Indenture), the Principal Component shall be reinstated automatically by the amount of such proceeds.
(B) Immediately upon your receipt from us, by hand delivery or facsimile transmission, of a Notice of Reinstatement in the form of Exhibit 5 hereto, the Principal Component shall be immediately reinstated to the extent specified in such Notice of Reinstatement.
(C) In no event shall the Principal Component be reinstated to an amount in excess of the aggregate principal amount of Eligible Bonds then outstanding under the Indenture.
Any Notice of Reinstatement delivered to you in the form set forth in Exhibit 5 hereto, whether delivered pursuant to subparagraph (i) or subparagraph (ii), above, may be combined, in a single such Notice, with any other Notice of Reinstatement delivered pursuant to the other such subparagraph.
(6) Notices. Communications (other than drawings) with respect to this Letter of Credit shall be in writing and shall be addressed to us at 299 Park Avenue, New York, New York 10171-0026, Attention: Loan Servicing Department, James Brodus (telephone: (212) 715-3227, telecopy: (212) 715- 3891), with a copy to Christopher W. Criswell, (telephone: (212) 715-3317, telecopy: (212) 715-3878), (or at such other office as we may designate by written notice to you), specifically referring to the number of this Letter of Credit.
(7) Transfer. This Letter of Credit is transferable in its entirety (but not in part) to any transferee who has succeeded you as Paying Agent under the Indenture and may be successively so transferred. Transfer of the available balance under this Letter of Credit to such transferee shall be effected by the presentation to us of this Letter of Credit accompanied by a certificate substantially in form set forth in Exhibit 6.
(8) Governing Law, Etc. Except as otherwise provided herein, this Letter of Credit shall be governed by and construed in accordance with the Uniform Customs and Practices for Documentary Credits (1983 Revision) Publication No. 400 of the International Chamber of Commerce ("UCP") and, to the extent not inconsistent with the UCP, the laws of the State of New York, including the Uniform Commercial Code as in effect in the State of New York. This Letter of Credit sets forth in full our undertaking, and, except as expressly set forth herein, such undertaking shall not in any way be modified, amended, amplified or limited by reference to any document, instrument or agreement referred to herein (including, without limitation, the Bonds, the Indenture and the Reimbursement Agreement), except only the certificates and the drafts referred to herein; and any such reference shall not be deemed to incorporate herein by reference any document, instrument or agreement except for such certificates and such drafts. Whenever and wherever the terms of this Letter of Credit shall refer to the purpose of a draft hereunder, or the provisions of any agreement or document pursuant to which such draft may be presented hereunder, such purpose or provisions shall be conclusively determined by reference to the certificate accompanying such draft; in furtherance of this sentence, whether any drawing is in respect of payment of regularly scheduled interest on the Bonds or of principal of or interest on the Bonds upon scheduled or accelerated maturity or is a Tender Drawing or a Redemption/Mandatory Purchase Drawing shall be conclusively determined by reference to the certificate accompanying such drawing.
Very truly yours,
UNION BANK OF SWITZERLAND, NEW
YORK BRANCH
By ___________________________________
Title:
By ___________________________________
Title:
EXHIBIT 1
TO THE LETTER OF CREDIT
CERTIFICATE FOR TENDER DRAWING
The undersigned, a duly authorized officer of ____________________, (the "Paying Agent"), hereby certifies as follows to UNION BANK OF SWITZERLAND, NEW YORK BRANCH (the "Bank"), with reference to Irrevocable Letter of Credit No. SBY502181 (the "Letter of Credit") issued by the Bank in favor of the Paying Agent. Terms defined in the Letter of Credit and used but not defined herein shall have the meanings given them in the Letter of Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for the holders of the Bonds.
(2) The Paying Agent is making a Tender Drawing under the Letter of Credit in the amount of $____________ pursuant to Section 5.8 of the Indenture to pay that portion of the purchase price corresponding to principal of Eligible Bonds that are
[subject to mandatory tender for purchase pursuant to Section
[2.3(G)(1)(c)] [2.3(G)(2)(d)(ii)] of the Indenture.]
[tendered for purchase by the holders thereof pursuant to Section 2.3(G)(2)(c) of the Indenture.]
[the subject of a failed conversion pursuant to Section 2.3(G)(1)(b) or 2.3(G)(2)(b) of the Indenture.]
(3) The amount of purchase price corresponding to principal of Eligible Bonds and with respect to the payment of which the Paying Agent, pursuant to the foregoing Sections of the Indenture, is drawing under the Letter of Credit, is as follows, and the amount of the draft accompanying this Certificate does not exceed such amount:
Principal: $__________________
(4) The amount of the draft accompanying this Certificate being drawn in respect of purchase price corresponding to principal of Eligible Bonds, as indicated in paragraph (3), above, does not exceed the Principal Component of the Letter of Credit. The amount of the draft accompanying this Certificate in respect of purchase price corresponding to principal of such Bonds has been computed in accordance with the terms and conditions of such Eligible Bonds and the Indenture.
(5) No proceeds of this drawing will be applied to the payment of purchase price of any Bonds that are not Eligible Bonds, including any Pledged Bonds (as defined in the Indenture), any Borrower Bonds (as defined in the Indenture) and any Bonds in the Fixed Rate Mode (as defined in the Indenture).
[(6) The Eligible Bonds in respect of which this drawing is being made are Eligible Bonds in the Flexible Mode, and payment of this drawing shall be made in accordance with Paragraph 3(i) of the Letter of Credit.]
[(6) The Eligible Bonds in respect of which this drawing is being made are not Eligible Bonds in the Flexible Mode, and payment of this drawing shall be made in accordance with Paragraph 3(ii) of the Letter of Credit].
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this Certificate as of the ________ day of _______________, 19___.
[NAME OF PAYING AGENT],
as Paying Agent
By ___________________________________
Title:
EXHIBIT 2
TO THE LETTER OF CREDIT
CERTIFICATE FOR REDEMPTION/
MANDATORY PURCHASE DRAWING
The undersigned, a duly authorized officer of __________________, (the "Paying Agent"), hereby certifies as follows to UNION BANK OF SWITZERLAND, NEW YORK BRANCH (the "Bank"), with reference to Irrevocable Letter of Credit No. SBY502181 (the "Letter of Credit") issued by the Bank in favor of the Paying Agent. Terms defined in the Letter of Credit and used but not defined herein shall have the meanings given them in the Letter of Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for the holders of the Bonds.
(2) The Paying Agent is making a Redemption/Mandatory Purchase Drawing under the Letter of Credit in the amount of $______________
[pursuant to Section 5.8(A) and Section 8.5 of the Indenture to pay the principal of Eligible Bonds due pursuant to the Indenture upon maturity or as a result of acceleration of such Eligible Bonds in accordance with the Indenture and the terms of such Eligible Bonds.]
[pursuant to Section 5.8(A) of the Indenture to pay that portion of the redemption price corresponding to principal of [and premium on] Eligible Bonds due pursuant to the Indenture upon redemption of such Eligible Bonds in accordance with the Indenture and the terms of such Eligible Bonds.]
[pursuant to Section 5.8(B) of the Indenture to pay that portion of the purchase price of Eligible Bonds corresponding to principal that are subject to mandatory tender for purchase pursuant to Section 2.3(G)(2)(d)(i) of the Indenture.]
(3) The amount of [principal of] [redemption price corresponding to principal of] [and premium on] [purchase price corresponding to principal of] Eligible Bonds which is due and payable and with respect to the payment of which the Paying Agent, pursuant to the foregoing Section[s] of the Indenture, is to draw under the Letter of Credit is as follows, and the amount of the draft accompanying this Certificate does not exceed such amount:
Principal: $__________________
[Premium: $__________________]
(4) The amount of the draft accompanying this Certificate being drawn
in respect of payment of [principal] [redemption price corresponding to
principal] [purchase price corresponding to principal] of Eligible Bonds,
as indicated in paragraph (3), above, does not exceed the Principal
Component of the Letter of Credit. [The amount of the draft accompanying
this Certificate being drawn in respect of that portion of the redemption
price of Eligible Bonds corresponding to premium, as indicated in paragraph
(3), above, does not exceed the Premium Component of the Letter of Credit.]
The amount of the draft accompanying this Certificate in respect of payment
of [principal] [redemption price corresponding to principal] [and premium]
[purchase price corresponding to principal] of such Eligible Bonds has been
computed in accordance with the terms and conditions of such Eligible Bonds
and the Indenture.
(5) No proceeds of this drawing will be applied to the payment of principal, redemption price (including premium, if any) or purchase price of any Bonds that are not Eligible Bonds, including any Pledged Bonds (as defined in the Indenture), any Borrower Bonds (as defined in the Indenture), and any Bonds in the Fixed Rate Mode (as defined in the Indenture).
(6) Payment of this drawing shall be made in accordance with Paragraph 3(ii) of the Letter of Credit.
[(7) The draft accompanying this Certificate is the final draft to be drawn under the Letter of Credit, and, upon the honoring of such draft, the Letter of Credit will expire in accordance with its terms.]
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this Certificate as of the ________ day of _______________, 19___.
[NAME OF PAYING AGENT],
as Paying Agent
By ___________________________________
Title:
EXHIBIT 3
TO THE LETTER OF CREDIT
CERTIFICATE FOR INTEREST DRAWING
The undersigned, a duly authorized officer of __________________, (the "Paying Agent"), hereby certifies as follows to UNION BANK OF SWITZERLAND, NEW YORK BRANCH (the "Bank"), with reference to Irrevocable Letter of Credit No. SBY502181 (the "Letter of Credit") issued by the Bank in favor of the Paying Agent. Terms defined in the Letter of Credit and used but not defined herein shall have the meanings given them in the Letter of Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for the holders of the Bonds.
(2) The Paying Agent is making a drawing under the Letter of Credit
in the amount of $____________ with respect to [the payment of interest]
[the payment of the portion of redemption price corresponding to interest]
[the payment of the portion of purchase price corresponding to interest] on
Eligible Bonds in accordance with the Indenture.
(3) The amount of [interest] [redemption price corresponding to interest] [purchase price corresponding to interest] on Eligible Bonds that is due and owing is as follows, and the amount of the draft accompanying this Certificate does not exceed such amount:
Interest: __________________
(4) The amount of the draft accompanying this Certificate being drawn in respect of payment of [interest] [redemption price corresponding to interest] [purchase price corresponding to interest] on Eligible Bonds, as indicated in paragraph (3), above, does not exceed the Interest Component of the Letter of Credit. The amount of the draft accompanying this Certificate in respect of payment of [interest] [redemption price corresponding to interest] [purchase price corresponding to interest] on Eligible Bonds has been computed in accordance with the terms and conditions of such Eligible Bonds and the Indenture.
(5) Payment of this drawing shall be made in accordance with Paragraph 3(ii) of the Letter of Credit.
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this Certificate as of the ________ day of _______________, 19___.
[NAME OF PAYING AGENT],
as Paying Agent
By ___________________________________
Title:
EXHIBIT 4
TO THE LETTER OF CREDIT
NOTICE OF REDUCTION
The undersigned, a duly authorized officer of _____________________, (the "Paying Agent"), hereby certifies as follows to UNION BANK OF SWITZERLAND, NEW YORK BRANCH (the "Bank"), with reference to Irrevocable Letter of Credit No. SBY502181 (the "Letter of Credit") issued by the Bank in favor of the Paying Agent. Terms defined in the Letter of Credit and used but not defined herein shall have the meanings given them in the Letter of Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for the holders of the Bonds.
(2) As of the date hereof, the aggregate principal amount of Eligible Bonds (including for this purpose all Pledged Bonds and all Borrower Bonds) outstanding is
Principal: $__________________
(3) You are hereby directed to reduce the [Principal] [Premium]
[and] [Interest] Components of the Letter of Credit as follows:
[The Principal Component of the Letter of Credit is reduced to $__________________.]
[The Premium Component of the Letter of Credit is reduced to $__________________.]
[The Interest Component of the Letter of Credit is reduced to $__________________.]
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this Certificate as of the ________day of _______________, 19___.
[NAME OF PAYING AGENT],
as Paying Agent
By ___________________________________
Title:
EXHIBIT 5
TO THE LETTER OF CREDIT
NOTICE OF REINSTATEMENT
The undersigned, a duly authorized officer of UNION BANK OF SWITZERLAND, NEW YORK BRANCH (the "Bank"), hereby gives the following notice to _________________, as paying agent (the "Paying Agent"), with reference to Irrevocable Letter of Credit No. SBY502181 (the "Letter of Credit") issued by the Bank in favor of the Paying Agent. Terms defined in the Letter of Credit and used but not defined herein have the meanings given them in the Letter of Credit.
The Bank hereby notifies you that:
[1.] [Pursuant to Paragraph 5(i)(B) of the Letter of Credit and Section 2.04(b)(ii) of the Reimbursement Agreement, the Interest Component has been reinstated by $________________.]
[2.] [Pursuant to Paragraph 5(ii)(B) of the Letter of Credit and Section 2.04(c) of the Reimbursement Agreement, the Principal Component has been reinstated by $_________________.]
IN WITNESS WHEREOF, the Bank has executed and delivered this Notice of Reinstatement as of the ________ day of _______________, 19___
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH
By ___________________________________
Title:
EXHIBIT 6
TO THE LETTER OF CREDIT
INSTRUCTIONS TO TRANSFER
__________________, 19___
Re: Irrevocable Letter of Credit No. SBY502181
Gentlemen:
The undersigned, as Paying Agent under that certain Indenture of Trust, dated as of September 1, 1993 (the "Indenture"), by and between the Connecticut Development Authority (the "Issuer") and Shawmut Bank Connecticut, National Association, as Trustee, is named as beneficiary in the Letter of Credit referred to above (the "Letter of Credit"). The Transferee named below has succeeded the undersigned as Paying Agent under such Indenture.
Therefore, for value received, the undersigned hereby irrevocably instructs you to transfer to such Transferee all rights of the undersigned to draw under the Letter of Credit.
Such Transferee shall hereafter have the sole rights as beneficiary under the Letter of Credit; provided, however, that no rights shall be deemed to have been transferred to such Transferee until such transfer complies with the requirements of the Letter of Credit pertaining to transfers.
IN WITNESS WHEREOF, the undersigned has executed and delivered this Certificate as of the ________ day of _______________, 19___.
[NAME OF RETIRING PAYING AGENT],
as Paying Agent
By ___________________________________
Title:
The undersigned, [Name of Transferee], hereby accepts the foregoing transfer of rights under the Letter of Credit.
[Name of Transferee]
By ___________________________________ Title:
Address of Principal Corporate Trust Office:
[insert address]
EXHIBIT 1.01B
Form of
PARTICIPATION ASSIGNMENT
Dated _________________, 19__
Reference is made to the Letter of Credit and Reimbursement Agreement, dated as of September 1, 1993 (said Agreement, as it may hereafter be amended or otherwise modified from time to time, being the "Agreement"; unless otherwise defined herein terms defined in the Agreement are used herein with the same meaning), among The Connecticut Light and Power Company (the "Account Party"), Union Bank of Switzerland, New York Branch ("UBS"), as Issuing Bank, the Participating Banks named therein and from time to time parties thereto, and UBS as Agent. Pursuant to the Agreement, ______________ (the "Assignor") has purchased a participation from the Issuing Bank in and to the Letter of Credit and each payment thereunder and demand loan made by the Issuing Bank and has committed to make Advances to the Account Party.
The Assignor and ________________ (the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns, without recourse, to the
Assignee, and the Assignee hereby purchases and assumes from the Assignor,
without recourse to the Assignor that portion set forth in Section 1(c) of
Schedule 1 hereto (the "Assigned Interest") of the Assignor's rights and
obligations under the Agreement and the Pledge Agreement, including,
without limitation, the participation purchased by the Assignor pursuant to
Section 3.07 of the Agreement in respect of unreimbursed amounts and demand
loans owing from time to time to the Issuing Bank, the Commitment of the
Assignor to make Advances and the Advances outstanding on the Effective
Date (as hereinafter defined). Such Assigned Interest represents the
percentage interest specified in Section 2(b) of Schedule 1 of all
outstanding rights and obligations of the Participating Banks under the
Agreement, and, after giving effect to such sale and assignment, the
Assignee's and Assignor's Participation Percentages will be as set forth in
Sections 2(b) and 2(c), respectively, of Schedule 1. The effective date of
this sale and assignment shall be the date specified in Section 3 of
Schedule 1 (the "Effective Date").
2. On the Effective Date, the Assignee will pay to the Assignor, in same day funds, at such address and account as the Assignor shall advise the Assignee, an amount equal to (1) the aggregate amount of unreimbursed letter of credit payments, demand loans and Advances outstanding (as set forth in Section 1 of Schedule 1) times (2) the Assigned Interest. From and after the Effective Date, the Assignor agrees that the Assignee shall be entitled to all rights, powers and privileges of the Assignor under the Agreement and the Pledge Agreement to the extent of the Assigned Interest, including without limitation (i) the right to receive all payments in respect of the Assigned Interest for the period from and after the Effective Date, whether on account of reimbursements, principal, interest, fees, indemnities in respect of claims arising after the Effective Date, increased costs, additional amounts or otherwise; (ii) the right to vote and to instruct the Agent and the Issuing Bank under the Agreement based on the Assigned Interest; (iii) the right to set-off and to appropriate and apply deposits of the Account Party as set forth in the Agreement; and (iv) the right to receive notices, requests, demands and other communications. The Assignor agrees that it will promptly remit to the Assignee any amount received by it in respect of the Assigned Interest (whether from the Account Party, the Agent or otherwise) in the same funds in which such amount is received by the Assignor.
3. The Assignor (i) represents and warrants that it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim; (ii) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Agreement or the Related Documents or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Agreement, the Related Documents or any other instrument or document furnished pursuant thereto; and (iii) makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Account Party or the performance or observance by the Account Party of any of its obligations under the Agreement, the Related Documents or any other instrument or document furnished pursuant thereto.
4. The Assignee (i) confirms that it has received a copy of the
Agreement, together with copies of the financial statements referred to in
Section 6.01(f) thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter
into this Assignment; (ii) agrees that it will, independently and without
reliance upon the Agent, the Issuing Bank, the Assignor or any other
Participating Bank and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Agreement and the Related Documents;
(iii) appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers under the Agreement and the Pledge
Agreement as are delegated to the Agent by the terms thereof, together with
such powers as are reasonably incidental thereto; (vi) agrees that it will
perform in accordance with its terms all of the obligations which by the
terms of the Agreement are required to be performed by it as a
Participating Bank and (v) confirms that it has paid the processing fee
referred to in subsection 10.06(b) of the Agreement.
5. Following the execution of this Assignment, it will be delivered to the Agent for acceptance and recording by the Agent. Upon such acceptance and recording and receipt of the consent of the Issuing Bank required pursuant to Section 10.06(b) of the Agreement (which shall be evidenced by the Issuing Bank's execution of this Assignment on the appropriate space on Schedule 1), as of the Effective Date, (i) the Assignee shall be a party to the Agreement and, to the extent provided in this Assignment, have the rights and obligations of a Participating Bank thereunder and under the Pledge Agreement and (ii) the Assignor shall, to the extent provided in this Assignment, relinquish its rights and be released from its obligations under the Agreement and the Pledge Agreement.
6. Upon such acceptance, recording and consent, from and after the Effective Date, the Agent shall make all payments under the Agreement in respect of the interest assigned hereby (including, without limitation, all payments of principal, interest and fees with respect thereto) to the Assignee at its address set forth on Schedule 1 hereto. The Assignor and Assignee shall make all appropriate adjustments in payments under the Agreement for periods prior to the Effective Date directly between themselves.
7. This Assignment shall be governed by, and construed in accordance with, the laws of the State of New York.
8. This Assignment may be executed in counterparts by the parties hereto, each of which counterpart when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment to be executed by their respective officers thereunto duly authorized, as of the date first above written, such execution being made on Schedule 1 hereto.
Schedule 1
to
Participation Assignment
Dated ____________, 19__
Section 1.
(a) Total Unreimbursed
Payments and demand loans $__________
(b) Total Advances: $__________
(c) Assigned Interest:1 __________%
|
1 Specify percentage to no more than 8 decimal points.
Section 2.
(a) Assignor's Participation
Percentage (immediately
prior to the effectiveness
of this Assignment) ___________%
(b) Assignee's Participation
Percentage2 (upon the
effectiveness of this
Assignment) ___________%
(c) Assignor's Participation
Percentage2 (upon
the effectiveness of
this Assignment) ___________%
|
2 The sum of the percentages set forth in Section 2(b) and (c) shall
equal
the percentage set forth in Section 2(a).
Section 3.
Effective Date:3__________, 19__
3 Such date shall be at least 5 Business Days after the execution of
this
Assignment.
[NAME OF ASSIGNOR]
By______________________________
Title:
[NAME OF ASSIGNEE]
By______________________________
Title:
[Address]
Telecopier No._______________
Attention:___________________
Consented to this __ day
of ______________, ___
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH,
as Issuing Bank
By ___________________________________
Title:
By ___________________________________
Title:
Accepted this __ day4
of _____________, ___
4 Not to be accepted without proof of Account Party's consent pursuant
to
Section 10.06(b) of the Reimbursement Agreement.
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH,
as Agent
By ___________________________________
Title:
By ___________________________________
Title:
APPLICABLE LENDING OFFICE
The Assignee's Applicable Lending Office is as follows:
EXHIBIT 1.01C
Form of
PLEDGE AGREEMENT
Dated as of September 1, 1993
THIS PLEDGE AGREEMENT ("this Agreement") is made by and between:
(i) The Connecticut Light and Power Company, a corporation duly organized and validly existing under the laws of the State of Connecticut (the "Account Party"); and
(ii) UNION BANK OF SWITZERLAND, NEW YORK BRANCH, as issuer of the Letter of Credit (the "Issuing Bank");
for the benefit of the Issuing Bank and
(iii) The Agent (as defined therein) and the Participating Banks (as defined therein) from time to time party to the Reimbursement Agreement hereinafter referred to.
PRELIMINARY STATEMENT
The Connecticut Development Authority (the "Issuer") proposes to
issue,
pursuant to an Indenture of Trust, dated as of September 1, 1993 (as
supplemented or amended from time to time with the written consent of the
Issuing Bank, the "Indenture"), made to Shawmut Bank Connecticut, National
Association, as trustee (such entity, or its successor as trustee, being
the
"Trustee"), $70,000,000 aggregate principal amount of its Pollution Control
Revenue Refunding Bonds (The Connecticut Light and Power Company Project -
1993B Series) (the "Bonds"). Pursuant to the Indenture and the Loan
Agreement, dated as of September 1, 1993, between the Issuer and the
Account
Party, the Account Party has requested the Issuing Bank to issue the letter
of credit referred to therein in favor of the Paying Agent described
therein.
The Issuing Bank has agreed to issue such letter of credit subject to the
terms and conditions set forth in that certain Letter of Credit and
Reimbursement Agreement, of even date herewith, among the Account Party,
the Issuing Bank, the Agent and the Participating Banks referred to therein
and
relating to the Bonds (said Letter of Credit and Reimbursement Agreement,
as it may hereafter be amended, modified or supplemented from time to time,
being hereinafter referred to as the "Reimbursement Agreement").
It is a condition precedent to the obligation of the Issuing Bank to issue such letter of credit and of the Participating Banks to make the Advances described in the Reimbursement Agreement that the Account Party shall have made the pledge described in this Agreement.
NOW THEREFORE, in consideration of the premises and to induce the Issuing Bank to issue such letter of credit and to induce the Participating Banks to make such Advances, the Account Party hereby agrees as follows (capitalized terms used herein and not otherwise defined herein having the meanings assigned them in the Reimbursement Agreement):
SECTION 1. Pledge. The Account Party hereby pledges to the Issuing Bank for the benefit of the Agent and the Participating Banks, and grants to the Issuing Bank for the benefit of the Agent and the Participating Banks a security interest in, the following (the "Pledged Collateral"):
(i) the Pledged Bonds (as defined in the Indenture) and the instruments, if any, evidencing the Pledged Bonds, and all interest, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the Pledged Bonds; and
(ii) all proceeds (other than the proceeds of the initial sale upon issuance of the Pledged Bonds) of any and all of the foregoing collateral (including, without limitation, proceeds that constitute property of the types described above).
SECTION 2. Security for Obligations. This Agreement secures the payment of all obligations of the Account Party now or hereafter existing under the Reimbursement Agreement, whether for reimbursement, principal, interest, fees, expenses or otherwise, and all obligations of the Account Party now or hereafter existing under this Agreement (all such obligations of the Account Party being the "Obligations"). Without limiting the generality of the foregoing, this Agreement secures the payment of all amounts which constitute part of the Obligations and would be owed by the Account Party to the Issuing Bank, the Agent or any Participating Bank under the Reimbursement Agreement but for the fact that they are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving the Account Party.
SECTION 3. Delivery of Pledged Collateral. (a) All certificates or instruments representing or evidencing the Pledged Collateral shall be delivered to the Paying Agent and held by the Paying Agent on behalf of the Issuing Bank pursuant hereto and shall be in suitable form for transfer by delivery, or shall be accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance satisfactory to the Issuing Bank. For the better perfection of the Issuing Bank's, the Agent's and the Participating Banks' rights in and to the Pledged Collateral, the Account Party shall forthwith, upon the pledge of any Pledged Collateral hereunder, cause such Pledged Collateral to be registered in the name of such nominee or nominees of the Issuing Bank as the Issuing Bank shall direct.
(b) If, prior to the payment in full of the Obligations and the termination of the Letter of Credit, the Account Party shall become entitled to receive or shall receive any payment in respect of the Pledged Collateral, the Account Party agrees to accept the same as the agent of the Issuing Bank, the Agent and the Participating Banks, to hold the same in trust for the Issuing Bank, the Agent and the Participating Banks and to deliver the same to the Issuing Bank. All such sums so received by the Issuing Bank shall be credited against the Obligations in such order as the Agent shall, in its sole discretion, elect.
(c) Notwithstanding the foregoing subsection (a), if and for so long as the Bonds are to be held in the Book-Entry Only System (as defined in the Indenture), the Account Party's obligations under such subsection shall be deemed satisfied if such Pledged Bonds are (i) registered in the name of DTC (as defined in the Indenture) in accordance with the Book-Entry Only System, (ii) credited on the books of DTC to the account of the Paying Agent (or its nominee) and (iii) further credited on the books of the Paying Agent (or such nominee) to the account of the Issuing Bank (or its nominee).
SECTION 4. Representations and Warranties. The Account Party represents and warrants as follows:
(a) The pledge of the Pledged Collateral pursuant to this Agreement creates, upon the Paying Agent's taking possession of the Pledged Bonds pursuant to Section 3 hereof (whether by physical possession or by means of registration to DTC and book-entry credit as described in subsection (c) thereof), a valid and perfected first priority security interest in the Pledged Collateral, securing the payment of the Obligations.
(b) No consent of any other person or entity and no authorization, approval, or other action by, and no notice to or filing with, any governmental authority or regulatory body is required (i) for the pledge by the Account Party of the Pledged Collateral pursuant to this Agreement or for the execution, delivery or performance of this Agreement by the Account Party, (ii) for the perfection or maintenance of the security interest created hereby (including the first priority nature of such security interest), other than any filings of Uniform Commercial Code financing statements that may be required for such perfection with respect to any "proceeds" of the Pledged Bonds, or (iii) for the exercise by the Issuing Bank of the voting or other rights provided for in this Agreement or the remedies in respect of the Pledged Collateral pursuant to this Agreement (except as may be required in connection with any disposition of any portion of the Pledged Collateral by laws affecting the offering and sale of securities generally and except for such as have already been obtained and are in full force and effect).
SECTION 5. Further Assurances. The Account Party agrees that at any time and from time to time, at the expense of the Account Party, the Account Party will promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary or desirable, or that the Issuing Bank may reasonably request, in order to perfect and protect any security interest granted or purported to be granted hereby or to enable the Issuing Bank to exercise and enforce its rights and remedies hereunder with respect to any Pledged Collateral.
SECTION 6. Release. In the event that any Pledged Bonds are subsequently remarketed by the Remarketing Agent and the proceeds thereof, when added to any amounts paid to the Issuing Bank and/or the Agent by the Account Party, are sufficient to (a) reimburse the Issuing Bank and the Participating Banks in full for the drawing under the Letter of Credit pursuant to which such Pledged Bonds became Pledged Bonds, (b) repay or prepay any demand loan or Advance made in respect thereof and (c) pay all interest, fees and other amounts accrued in respect thereof pursuant to the Reimbursement Agreement, the lien of this Agreement shall be released as to such Pledged Bonds (but not as to any other Pledged Bonds).
SECTION 7. Transfers and Other Liens. The Account Party agrees that it will not (i) sell, assign or otherwise dispose of, or grant any option with respect to, any of the Pledged Collateral, or (ii) create or permit to exist any lien, security interest, option or other charge or encumbrance upon or with respect to any of the Pledged Collateral, except for the security interest under this Agreement.
SECTION 8. Bank Appointed Attorney-in-Fact. The Account Party hereby appoints the Issuing Bank the Account Party's attorney-in-fact, with full authority in the place and stead of the Account Party and in the name of the Account Party or otherwise, from time to time in the Issuing Bank's discretion to take any action and to execute any instrument which the Issuing Bank may deem necessary or advisable to accomplish the purposes of this Agreement, including, without limitation, to receive, indorse and collect all instruments made payable to the Account Party representing any interest payment or other distribution in respect of the Pledged Collateral or any part thereof and to give full discharge for the same.
SECTION 9. Bank May Perform. If the Account Party fails to perform any agreement contained herein, the Issuing Bank may itself perform, or cause performance of, such agreement, and the expenses of the Issuing Bank incurred in connection therewith shall be payable by the Account Party under Section 10.04 of the Reimbursement Agreement.
SECTION 10. The Issuing Bank's Duties. The powers conferred on the Issuing Bank hereunder are solely to protect its interest in the Pledged Collateral and shall not impose any duty upon it to exercise any such powers. Except for the safe custody of any Pledged Collateral in its actual possession and the accounting for moneys actually received by it hereunder, the Issuing Bank shall have no duty as to any Pledged Collateral, as to ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters relative to any Pledged Collateral, whether or not the Issuing Bank has or is deemed to have knowledge of such matters, or as to the taking of any necessary steps to preserve rights against any parties or any other rights pertaining to any Pledged Collateral.
The Issuing Bank shall be deemed to have exercised reasonable care in the custody and preservation of any Pledged Collateral in its actual possession if such Pledged Collateral is accorded treatment substantially equal to that which the Issuing Bank accords its own property.
SECTION 11. Remedies upon Default. If any Event of Default shall have occurred and be continuing:
(a) The Issuing Bank may exercise in respect of the Pledged Collateral, in addition to other rights and remedies provided for herein or otherwise available to it, all the rights and remedies of a secured party on default under the Uniform Commercial Code in effect in the State of New York at that time (the "Code") (whether or not the Code applies to the affected Pledged Collateral), and may also, without notice except as specified below, sell the Pledged Collateral or any part thereof in one or more parcels at public or private sale, at any exchange, broker's board or at any of the Issuing Bank's offices or elsewhere, for cash, on credit or for future delivery, and upon such other terms as the Issuing Bank may deem commercially reasonable. The Account Party agrees that, to the extent notice of sale shall be required by law, at least ten days' notice to the Account Party of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification. The Issuing Bank shall not be obligated to make any sale of Pledged Collateral regardless of notice of sale having been given. The Issuing Bank may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned.
(b) Any cash held by the Issuing Bank as Pledged Collateral and all cash proceeds received by the Issuing Bank in respect of any sale of, collection from, or other realization upon all or any part of the Pledged Collateral may, in the discretion of the Issuing Bank, be held by the Issuing Bank as collateral for, and/or then or at any time thereafter be applied (after payment of any amounts payable to the Issuing Bank pursuant to Section 9 hereof and/or Section 10.04 of the Reimbursement Agreement) in whole or in part by the Issuing Bank against, all or any part of the Obligations in such order as the Issuing Bank shall elect. Any surplus of such cash or cash proceeds held by the Issuing Bank and remaining after payment in full of all the Obligations shall be paid over to the Account Party or to whomsoever may be lawfully entitled to receive such surplus.
SECTION 12. Continuing Security Interest; Assignments. This
Agreement shall create a continuing security interest in the Pledged
Collateral and shall (i) remain in full force and effect until the later of
(x) the payment in full of the Obligations and all other amounts payable
under this Agreement and (y) the expiration or termination of the
Commitments, (ii) be binding upon the Account Party, its successors and
assigns, and (iii) inure to the benefit of, and be enforceable by, the
Issuing Bank, the Agent, the Participating Banks and their respective
successors, transferees and assigns. Without limiting the generality of
the foregoing clause (iii), any Participating Bank may, subject to Section
10.06 of the Reimbursement Agreement, assign or otherwise transfer all or any
portion of its rights and obligations under the Reimbursement Agreement
(including, without limitation, all or any portion of its Commitment and
the advances owing to it) to any other person or entity, and such other
person or entity shall thereupon become vested with all the benefits in
respect thereof granted to such Participating Bank herein or otherwise. Upon
the later of the payment in full of the Obligations and all other amounts
payable under this Agreement and the expiration or termination of the
Commitments, the security interest granted hereby shall terminate and all
rights to the Pledged Collateral shall revert to the Account Party. Upon any
such termination, the Issuing Bank will, at the Account Party's expense,
return to the Account Party such of the Pledged Collateral as shall not have
been sold or otherwise applied pursuant to the terms hereof and execute and
deliver to the Account Party such documents as the Account Party shall
reasonably request to evidence such termination.
IN WITNESS WHEREOF, the Account Party has caused this Agreement to be duly executed and delivered by its officer thereunto duly authorized as of the date first above written.
THE CONNECTICUT LIGHT AND
POWER COMPANY, as Account Party and
pledgor
By ________________________________________
Title:
UNION BANK OF SWITZERLAND, NEW
YORK BRANCH, as Issuing Bank and pledgee
By ________________________________________
Title:
By ________________________________________
Title:
[Form of Opinion of King & Spalding - CDA/CL&P SERIES B]
EXHIBIT 5.01B
September 22, 1993
To Union Bank of Switzerland, New York Branch,
as Agent and as Issuing Bank under
the Reimbursement Agreement referred
to below, and to each Participating
Bank thereunder
Re: The Connecticut Light and Power Company
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 5.01(f)(ii) of
the Letter of Credit and Reimbursement Agreement, dated as of September 1,
1993
(the "Reimbursement Agreement"), among The Connecticut Light and Power
Company (the "Company"), Union Bank of Switzerland, New York Branch, as the
Agent (the "Agent") and Issuing Bank (the "Issuing Bank") thereunder, and
the Participating Banks referred to therein. Unless otherwise defined
herein,
terms defined in the Reimbursement Agreement are used herein as therein
defined.
We have acted as special New York counsel to the Agent and the Issuing Bank in connection with the preparation, execution and delivery of the Reimbursement Agreement and the issuance by the Issuing Bank of the Letter of Credit referred to therein.
In that connection, we have examined the following documents:
(a) The Reimbursement Agreement, executed by each of the parties thereto; and
(b) The documents furnished to you today pursuant to Section 5.01 of the Reimbursement Agreement, including the opinion of counsel delivered pursuant to Section 5.01(f)(i) of the Reimbursement Agreement (the "Opinion").
In our examination of the documents referred to above, we have assumed the authenticity of all such documents submitted to us as originals, the genuineness of all signatures, the due authority of the parties executing such documents and the conformity to the originals of all such documents submitted to us as copies or telecopies. We have also assumed that the Agent, the Issuing Bank and each Participating Bank have duly executed and delivered, with all necessary power and authority (corporate and otherwise), the Reimbursement Agreement.
To the extent that our opinions expressed below involve conclusions as to matters governed by laws other than the laws of the State of New York, we have relied upon the Opinion and have assumed without independent investigation the correctness of the matters set forth therein, our opinions expressed below being subject to the assumptions, qualifications and limitations set forth in the Opinion. As to matters of fact, we have relied solely upon the documents we have examined.
Based upon the foregoing, and subject to the qualifications set forth below, we are of the opinion that:
4. The Reimbursement Agreement is in substantially acceptable legal form.
5. The Opinion and the other documents referred to in item (b), above, are substantially responsive to the requirements of the Sections of the Reimbursement Agreement pursuant to which the same have been delivered.
The foregoing opinions are solely for your benefit and may not be relied upon by any other person, other than any person that may become a Participating Bank under the Reimbursement Agreement after the date hereof.
Very truly yours,
Exhibit 4.3.8.1
FIRST SUPPLEMENT
Dated as of December 1, 1993
among
BUSINESS FINANCE AUTHORITY OF THE
STATE OF NEW HAMPSHIRE
and
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
and
STATE STREET BANK AND TRUST COMPANY, as Trustee
Supplementing and Amending the Series E Loan and Trust Agreement Dated as of May 1, 1991 and Providing for the Issue of:
$44,800,000
Business Finance Authority of the State of New Hampshire Pollution Control Refunding Revenue Bonds (Public Service Company of New Hampshire Project - 1993 Tax-Exempt Series E)
TABLE OF CONTENTS
ARTICLE I: INTRODUCTION AND DEFINITIONS. . . . . . . . . . . . . . . . 1
Section 101. Description of the Agreement and the
Parties. . . . . . . . . . . . . . . . . . . . . . . 1
Section 102. Definitions. . . . . . . . . . . . . . . . . . . . . 2
(a) Words. . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II: LOAN OF 1993 SERIES E BOND PROCEEDS;
CONFIRMATION OF PLEDGE . . . . . . . . . . . . . . . . . . 3
Section 201. Pledge of Series G First Mortgage Bonds. . . . . . . 3
ARTICLE III: THE 1993 SERIES E BONDS . . . . . . . . . . . . . . . . . 4
Section 301. Forms of 1993 Series E Bonds . . . . . . . . . . . . 4
(a) Form of Flexible Bond. . . . . . . . . . . . . . . . . . 4
(b) Form of Weekly Bond. . . . . . . . . . . . . . . . . . . 13
(c) Form of Multiannual Bond . . . . . . . . . . . . . . . . 26
(d) Form of Fixed Rate Bond. . . . . . . . . . . . . . . . . 38
Section 302. Details of the 1993 Series E Bonds . . . . . . . . . 45
Section 303. Registration of Bonds in the Book-Entry
Only System. . . . . . . . . . . . . . . . . . . . . 46
Section 304. Application of 1993 Series E Bond
Proceeds . . . . . . . . . . . . . . . . . . . . . . 49
Section 305. Maximum Interest Rate for 1993 Series E
Bonds. . . . . . . . . . . . . . . . . . . . . . . . 49
Section 306. Additional Limitations on Conversions to
New Modes. . . . . . . . . . . . . . . . . . . . . . 49
(a) Conversions to Multiannual Mode. . . . . . . . . . . . . 49
(b) Conversions from Multiannual Mode to Flexible or Weekly
Mode . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 307. Subsection 310(c) of Original Agreement
Amended. . . . . . . . . . . . . . . . . . . . . . . 50
Section 308. Subsection 310(e) of Original Agreement
Amended. . . . . . . . . . . . . . . . . . . . . . . 50
Section 309. Tax Status of 1993 Series E Bonds. . . . . . . . . . 50
Section 310. Amendment of Credit Facility . . . . . . . . . . . . 51
(a) Issuance of Amended and Restated Credit Facility . . . . 51
(b) Paragraph 102(a)(13) of Original Agreement Amended . . . 51
Section 311. Subsection 301(e) of Original Agreement
Amended. . . . . . . . . . . . . . . . . . . . . . . 51
(a) Paragraph 301(e)(ii) Amended . . . . . . . . . . . . . . 51
(b) Subparagraph 301(e)(iv)(A) Amended . . . . . . . . . . . 51
Section 312. Subsection 308(c) of Original Agreement
Amended. . . . . . . . . . . . . . . . . . . . . . . 52
(a) Paragraph 308(c)(i) Amended. . . . . . . . . . . . . . . 52
(b) Paragraph 308(c)(iii) of Original Agreement Amended. . . 52
(c) Paragraph 308(c)(iv) Added to Original Agreement . . . . 52
Section 313. Subsection 311(c) Added. . . . . . . . . . . . . . . 52
Section 314. Subsection 312(a) Amended. . . . . . . . . . . . . . 52
Section 315. Section 405 of Original Agreement
Amended. . . . . . . . . . . . . . . . . . . . . . . 53
ARTICLE IV: MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . 53
Section 401. Original Agreement Affirmed. . . . . . . . . . . . . 53
Section 402. Company's Agreement to Chapter 263 . . . . . . . . . 53
Section 403. Severability . . . . . . . . . . . . . . . . . . . . 53
Section 404. Counterparts . . . . . . . . . . . . . . . . . . . . 54
Section 405. Receipt of Documents . . . . . . . . . . . . . . . . 54
Section 406. Captions . . . . . . . . . . . . . . . . . . . . . . 54
Section 407. Governing Law. . . . . . . . . . . . . . . . . . . . 54
SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
EXHIBIT A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
ARTICLE I: INTRODUCTION AND DEFINITIONS
|
Section 101. Description of the Agreement and the Parties. This FIRST SUPPLEMENT (the "First Supplement") is entered into as of December 1, 1993 by the Business Finance Authority of the State of New Hampshire (with its successors, the "Authority"), a body corporate and politic created under New Hampshire Revised Statutes Annotated 162-A:3 formerly known as The Industrial Development Authority of the State of New Hampshire; Public Service Company of New Hampshire (with its successors, the "Company"), a New Hampshire corporation, and State Street Bank and Trust Company, a Massachusetts trust company, as Trustee (with its successors, the "Trustee"). This First Supplement supplements and amends the Series E Loan and Trust Agreement dated as of May 1, 1991 (the "Original Agreement") among the Authority, the Company and the Trustee and is entered into pursuant to Article IV and Clauses 1101(a)(v), (vii) and (viii) of the Original Agreement. The Agreement is a financing document combined with a security document as one instrument in accordance with New Hampshire Revised Statutes Annotated Chapter 162-I (the "Act") and relates to industrial facilities as defined in Paragraphs 2, VII(d) and (e) of the Act and located in the Town of Seabrook, Rockingham County, New Hampshire.
This First Supplement, in conjunction with the Original Agreement, provides for the following transactions:
(a) the Authority's issue of the 1993 Series E Bonds, which are to be Tax-Exempt Refunding Bonds as provided for in the Original Agreement;
(b) the Authority's loan of the proceeds of the 1993 Series E Bonds to the Company for the purpose of refunding the principal of $44,800,000 of the Authority's 1991 Series E Bonds;
(c) the Company's repayment of the loan of 1993 Series E Bond proceeds from the Authority through payment to the Trustee of all amounts necessary to pay the 1993 Series E Bonds issued by the Authority;
(d) the Company's confirmation of its agreement to evidence and secure its repayment obligations hereunder and its reimbursement obligations under the Reimbursement Agreement with the Series G First Mortgage Bonds; and
(e) the amendment and restatement, at the time the 1993 Series E Bonds are issued, of the irrevocable, transferable Letter of Credit of Citibank, N.A. issued to the Paying Agent so that it may be drawn upon to pay the Purchase Price of, principal of, premium, if any, and interest on the 1993 Series E Bonds as well as the 1991 Series E Bonds that remain Outstanding.
In consideration of the mutual promises contained in this First Supplement, the rights conferred and the obligations assumed hereby, and other good and valuable consideration, the receipt of which is hereby acknowledged, each of the Company, the Authority and the Trustee agree, assign, covenant, grant, pledge, promise, represent and warrant as set forth herein for their own benefit and for the benefit of the Bondowners and the Bank.
Section 102. Definitions. (a) Words. Unless otherwise defined in this First Supplement, or unless the context otherwise requires, the terms defined in the Original Agreement shall have the same meaning in this First Supplement. In addition to terms defined in the Original Agreement and elsewhere in this First Supplement, the following terms have the following meanings in the Agreement, unless the context otherwise requires:
(1) "Agreement" means the Original Agreement, as supplemented and amended by this First Supplement and as may be subsequently amended or supplemented from time to time.
(2) "Assumption Agreement" means the Assumption Agreement dated as of June 5, 1992 among the parties hereto and the Seabrook Transferee.
(3) "Authority's Service Charge" means with respect to the 1993
Series E Bonds, payments to the Authority for its own use which consist of
(i) a payment of $37,333.33 on the date of the issue of the 1993 Series E
Bonds and (ii) annual payments commencing on the first anniversary of the
date of this First Supplement and continuing on each subsequent anniversary,
which are each equal to 1/20th of 1% of the average principal balance of the
1993 Series E Bonds on which interest was accruing during the prior twelve-
month period, or $250, whichever is greater, with a final payment due upon
the redemption or payment of the 1993 Series E Bonds in full prorated to the
date of such redemption or payment, as the case may be.
(4) "First Supplemental Federal Tax Statement" means the Statement as to Tax Status of Bonds executed by the Company and the Seabrook Transferee in connection with the original issuance of the 1993 Series E Bonds and delivered to the Trustee.
(5) Except in the 1993 Series E Bonds, "here" in such words as "hereby," "herein," "hereof" or "hereunder" means the Agreement as a whole rather than this First Supplement, or the particular section, subsection, paragraph, subparagraph, clause or subclause in which the word appears; and in the 1993 Series E Bonds it refers thereto.
(6) "Letter of Credit" means the $119,129,000 irrevocable letter of credit No. NY0389-30008830, as amended and restated, issued by Citibank, N.A. for the benefit of the Paying Agent.
(7) "1993 Series E Bonds" means the $44,800,000 principal amount of Business Finance Authority of the State of New Hampshire Pollution Control Refunding Revenue Bonds (Public Service Company of New Hampshire Project - 1993 Tax-Exempt Series E).
(8) "Paying Agent" means BankAmerica National Trust Company (formerly known as Security Pacific National Trust Company (New York)) or any successor or successors designated from time to time pursuant to Section 313 of the Original Agreement.
(9) "Reimbursement Agreement" means the Series E Letter of Credit and Reimbursement Agreement dated as of May 1, 1991, among the Company, Citibank, N.A., as issuing bank thereunder, and the participating banks referred to therein, and any other agreement between the Company and a Bank under which the Company is obligated to reimburse the Bank for payments made by the Bank under a Credit Facility.
(10) "Representation Letter" has the meaning given such term in Section 303 of this First Supplement.
(11) "Seabrook Transferee" means North Atlantic Energy Corporation, the transferee of the Project Facilities pursuant to the Seabrook Transfer, and its successors.
ARTICLE II: LOAN OF 1993 SERIES E BOND PROCEEDS;
CONFIRMATION OF PLEDGE
Section 201. Pledge of Series G First Mortgage Bonds. The Authority shall issue the 1993 Series E Bonds pursuant to the Act in the amount, in the form and with the terms provided herein, and shall loan to the Company such amount (the "First Supplemental Loan") to refund the principal of $44,800,000 of the 1991 Series E Bonds as hereinafter provided. The Company agrees to repay the First Supplemental Loan of the aggregate principal amount of the 1993 Series E Bonds in the amounts and at the times necessary to pay principal of, premium, if any, and interest on the Bonds by making the payments required under Section 308 of the Original Agreement, and for such purpose the First Supplemental Loan is to be treated as part of the Loan made pursuant to the Original Agreement. To evidence and secure the Company's obligation to repay the Loan, including the First Supplemental Loan, and to secure the Company's reimbursement and certain other obligations under the Reimbursement Agreement, the Company issued and delivered to the Trustee on the date of issuance of the 1991 Series E Bonds a like aggregate principal amount of its Series G First Mortgage Bonds. The Company hereby confirms that the Series G First Mortgage Bonds evidence and secure the Company's obligations to make payments in amounts and at times necessary to pay principal of, premium, if any, and interest on all of the Outstanding Bonds, including the Outstanding 1993 Series E Bonds and the Outstanding 1991 Series E Bonds and the Company's reimbursement and certain other obligations under the Reimbursement Agreement.
ARTICLE III: THE 1993 SERIES E BONDS
Section 301. Forms of 1993 Series E Bonds.
The 1993 Series E Bonds shall be issued in substantially the following forms for the various Modes:
(a) Form of Flexible Bond. The 1993 Series E Bonds may be issued in the Flexible Mode in substantially the form prescribed below.
$____________ No. R-
ANY BONDOWNER WHO FAILS TO DELIVER A BOND FOR PURCHASE AT THE TIMES AND AT THE PLACE REQUIRED HEREIN SHALL HAVE NO FURTHER RIGHTS HEREUNDER EXCEPT THE RIGHT TO RECEIVE THE PURCHASE PRICE HEREOF UPON PRESENTATION AND SURRENDER OF THIS BOND TO THE PAYING AGENT AS DESCRIBED HEREIN, AND SHALL HOLD THIS BOND AS AGENT FOR THE PAYING AGENT.
UNITED STATES OF AMERICA
STATE OF NEW HAMPSHIRE
BUSINESS FINANCE AUTHORITY
OF THE STATE OF NEW HAMPSHIRE
Pollution Control Refunding Revenue Bond (Public Service Company of New Hampshire Project - 1993 Tax-Exempt Series E)
REGISTERED OWNER:
PRINCIPAL AMOUNT: DOLLARS
INTEREST DUE: $
(on the Next Purchase Date)
INTEREST RATE:
(to the Next Purchase Date)
NEXT PURCHASE DATE:
COMMENCEMENT DATE OF RATE PERIOD:
MATURITY DATE: May 1, 2021
CUSIP:
DATE OF THIS BOND:
(Date as of which Bonds of this
series were initially issued.)
MODE: Flexible
THIS BOND DOES NOT CONSTITUTE AN INDEBTEDNESS OF THE STATE OF NEW HAMPSHIRE OR OF THE AUTHORITY EXCEPT TO THE EXTENT PERMITTED BY NEW HAMPSHIRE RSA CHAPTER 162-I. ALL AMOUNTS OWED HEREUNDER ARE PAYABLE ONLY FROM THE SOURCES PROVIDED IN THE LOAN AND TRUST AGREEMENT DESCRIBED BELOW, AND NO PUBLIC FUNDS MAY BE USED FOR THAT PURPOSE.
The Business Finance Authority of the State of New Hampshire (the "Authority"), for value received, promises to pay to the REGISTERED OWNER, or registered assigns, but solely from the moneys to be provided under the Agreement mentioned below, upon presentation and surrender hereof, in lawful money of the United States of America, the PRINCIPAL AMOUNT on the MATURITY DATE, unless paid earlier as provided below, with interest from the most recent Interest Payment Date, as defined below, to which interest has been paid or duly provided for or, if no interest has been paid, from the DATE OF THIS BOND set forth above, until paid in full, at the rates set forth below, payable on each Interest Payment Date. So long as this bond is in the Flexible Mode, interest shall be due on this bond on each Purchase Date (as defined below) and on the MATURITY DATE, and when this bond is in any other Mode interest shall be due on the dates provided in the Agreement (the "Interest Payment Dates"). Until conversion to the Weekly, Multiannual or Fixed Rate Mode as provided below, this bond shall bear interest at the Flexible Rate. The Flexible Rate for this bond shall be the rate of interest determined by the Remarketing Agent designated as provided in the Agreement (herein, with its successors, the "Remarketing Agent"), for each Rate Period, as defined below, to be the lowest rate which in its judgment, on the basis of prevailing financial market conditions, is necessary on and as of the Effective Date, as defined below, to remarket each Bond having such Rate Period in a secondary market transaction at a price equal to the principal amount thereof, but not in excess of the Maximum Interest Rate. If this bond is converted to the Weekly, Multiannual or Fixed Rate Mode it shall bear interest at the Weekly, Multiannual or Fixed Rate, as the case may be, as defined in the Agreement. The Remarketing Agent shall determine the initial Flexible Rate on or before the date of issue in or of conversion to the Flexible Mode, which rate shall remain in effect as provided in the Agreement. Thereafter, the Remarketing Agent shall redetermine the Flexible Rate for each Rate Period as provided below. The amount of interest due on any Interest Payment Date shall be the amount of unpaid interest accrued on this bond through the day preceding such Interest Payment Date or, if such Interest Payment Date is not a Business Day, through the day preceding the first Business Day succeeding such Interest Payment Date.
This bond is one of a series of Pollution Control Refunding Revenue Bonds (Public Service Company of New Hampshire Project - 1993 Tax-Exempt Series E) (the "Bonds") in the aggregate principal amount of $44,800,000 issued under New Hampshire RSA Chapter 162-I (the "Act"). The proceeds of the Bonds are being loaned to Public Service Company of New Hampshire (the "Company"), a New Hampshire corporation, pursuant to a Series E Loan and Trust Agreement dated as of May 1, 1991, as supplemented and amended by a First Supplement dated as of December 1, 1993 (the "Agreement") among the Company, the Authority and State Street Bank and Trust Company, as Trustee (the "Trustee") to refund a like principal amount of the Authority's $114,500,000 Pollution Control Revenue Bonds (Public Service Company of New Hampshire Project - 1991 Taxable Series E) (the "1991 Bonds"), which were originally issued to finance certain costs associated with the Company's ownership interest in air or water pollution control and sewage or solid waste disposal facilities installed for use by Unit No. 1 at the nuclear electric generating station (the "Station") in Seabrook, New Hampshire (the "Project Facilities"). Pursuant to the Agreement, the Company has unconditionally agreed to repay such loan in the amounts and at the times necessary to pay the principal of, premium, if any, and interest on the Bonds when due. To evidence and secure such loan and the Company's reimbursement and certain other obligations under the Reimbursement Agreement (as defined below), the Company has issued and delivered to the Trustee its First Mortgage Bonds, Series G (the "Series G First Mortgage Bonds") issued under the First Mortgage Indenture dated as of August 15, 1978, as amended, and the Tenth Supplemental Indenture thereto dated as of May 1, 1991 between the Company and First Fidelity Bank, National Association, New Jersey, as Trustee (as amended and supplemented from time to time, the "First Mortgage Bond Indenture") in an aggregate principal amount, and with an interest rate, maturity date and redemption provisions corresponding to those of the Bonds and certain other bonds issued under the Agreement, including the 1991 Bonds. As provided in the Agreement, payments of principal of, and premium, if any, and interest on the Series G First Mortgage Bonds shall, upon receipt by the Trustee, be deemed to constitute payments in corresponding amounts by the Company in respect of the Bonds and certain other bonds issued under the Agreement, including the 1991 Bonds. Reference is hereby made to the Agreement for the provisions thereof with respect to the rights, limitations of rights, duties, obligations and immunities of the Company, the Authority, the Trustee, the Paying Agent, and the Bondowners, including the order of payments in the event of insufficient funds, the disposition of unclaimed moneys held by the Trustee and restrictions on the rights of owners of the Bonds to bring suit. The Agreement may be amended to the extent and in the manner provided therein. Copies of the Agreement are available for inspection at the corporate trust office of the Trustee.
The Purchase Price (as defined below) and principal of and interest on this bond while it is in the Flexible Mode is also payable from moneys drawn by the Paying Agent on an irrevocable letter of credit for the Bonds and certain other bonds issued under the Agreement, including the 1991 Bonds (together with any extensions, amendments and renewals thereof, the "Letter of Credit"), issued by ________________, pursuant to the terms of a Reimbursement Agreement dated as of __________________ (the "Reimbursement Agreement") by and between the Company and _____________________________ (together with any other issuer of a Credit Facility, the "Bank"). The Letter of Credit initially expires on _______________ but may be terminated earlier upon the occurrence of certain events set forth in the Agreement and the Reimbursement Agreement or extended as provided in the Reimbursement Agreement. The Company may substitute the Letter of Credit in whole or in part with one or more new letters of credit (collectively with the Letter of Credit, a "Credit Facility") as provided in the Agreement and the Reimbursement Agreement. The Company may substitute a new Credit Facility as provided in the Agreement.
Unless otherwise defined herein, capitalized terms used in this bond shall have the meaning given them in the Agreement. The following terms are defined as follows:
"Business Day" means a day (i) that is not a Sunday or legal holiday or a day on which banking institutions are authorized pursuant to law to close, (ii) that is not a day on which the corporate trust office of the First Mortgage Bond Trustee is not open for business, (iii) that is a day on which banks are not required or authorized to close in New York, New York, and (iv) that is a day on which banking institutions in all of the cities in which the principal offices of the Trustee and the Paying Agent and, if applicable, the Remarketing Agent and the Bank are located are not required or authorized to remain closed and on which the New York Stock Exchange is not closed.
"Effective Date" means, with respect to a Bond in the Flexible, Weekly and Multiannual Modes, the date on which a new Rate Period for that Bond takes effect.
"Mode" means the period for and the manner in which the interest rates on the Bonds are set and includes the Flexible Mode, the Weekly Mode, the Multiannual Mode and the Fixed Rate Mode.
"Purchase Date" means, while this bond is in the Flexible Mode, the date on which this bond shall be required to be purchased pursuant to a mandatory tender in accordance with the provisions hereof.
"Rate Period" or "Period" means, when used with respect to any particular rate of interest for a Bond in the Flexible, Weekly or Multiannual Mode, the period during which such rate of interest determined for such Bond will remain in effect as described herein.
At the option of the Company and upon certain conditions provided for in the Agreement described below, all or a portion of the Bonds (a) may be converted or reconverted from time to time to or from the Weekly Mode or Multiannual Mode, which means that the Rate Period is, respectively, one week or one year or any multiple of one year, (b) may be converted or reconverted from time to time to or from the Flexible Mode, and will have Rate Periods of from one to 270 days as provided herein, or (c) may be converted to the Fixed Rate Mode; provided, however, that in the Multiannual Mode the first rate period occurring after conversion to such Mode may be shorter than the applicable multiple of one year as provided in the Agreement. While this bond is in the Flexible Mode, a new interest rate shall take effect on the date such Mode takes effect, and on the Effective Date of the next Flexible Rate Period, as defined herein, applicable to this bond.
While this bond is in the Flexible Mode, conversions to any other Mode may take place only on an Effective Date. Conversion of this bond to another Mode shall be subject to certain conditions set forth in the Agreement. In the event that the conditions for a proposed conversion to a new Mode are not met (i) such new Mode shall not take effect on the proposed conversion date, notwithstanding any prior notice to the Bondowners of such conversion and (ii) this bond shall remain in the Flexible Mode with a Rate Period of one day. In no event shall the failure of this bond to be converted to another Mode be deemed to be a Default or an Event of Default under the Agreement as long as the Purchase Price (as defined below) is made available on the failed conversion date to owners of all Bonds that were to have been converted.
While Bonds bear interest at Flexible Rates, the interest rate for each particular Bond in the Flexible Mode will be determined by the Remarketing Agent and will remain in effect from and including the Effective Date of the Rate Period selected for that Bond by the Remarketing Agent through the last date thereof. While the Bonds are in the Flexible Mode, Bonds may have successive Rate Periods of any duration up to 270 days each and ending on a Business Day and any Bond may bear interest at a rate and for a period different from any other Bond.
In the event that the Remarketing Agent no longer determines, or fails to determine when required, any Rate Period or any Flexible Rate for any Bonds, or if for any reason such manner of determination shall be determined to be invalid or unenforceable, the Rate Period for any such Bond shall be deemed to be a Flexible Rate Period with a duration of one day and the Flexible Rate shall be determined as provided in the Agreement.
While this bond is in the Flexible Mode it is subject to mandatory tender for purchase on each applicable Effective Date at a price (the "Purchase Price") of par plus accrued interest to the Effective Date. THE OWNER OF THIS BOND, BY ACCEPTANCE HEREOF, AGREES TO SELL AND SURRENDER THIS BOND IN ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT AND, ON THE PURCHASE DATE, TO SURRENDER THIS BOND TO THE PAYING AGENT FOR PAYMENT OF THE PURCHASE PRICE. UPON DEPOSIT OF THE PURCHASE PRICE WITH THE PAYING AGENT ON THE PURCHASE DATE, THIS BOND SHALL BE DEEMED TENDERED FOR PURCHASE AND SHALL CEASE TO BE OUTSTANDING UNDER THE AGREEMENT, INTEREST HEREON SHALL CEASE TO ACCRUE AS OF THE PURCHASE DATE, AND THE REGISTERED OWNER HEREOF SHALL BE ENTITLED ONLY TO RECEIVE THE PURCHASE PRICE SO DEPOSITED WITH THE PAYING AGENT UPON SURRENDER OF THIS CERTIFICATE TO THE PAYING AGENT. The Purchase Price shall be paid on the Delivery Date, which shall be the Effective Date or any subsequent Business Day on which this bond is delivered to the Paying Agent. The Purchase Price of this bond shall be paid only upon surrender of this bond to the Paying Agent as provided herein. From and after the Effective Date, no further interest shall be payable to the REGISTERED OWNER during the preceding Rate Period, provided that there are sufficient funds available on the Effective Date to pay the Purchase Price.
Each determination and redetermination of the Flexible Rate shall be conclusive and binding on the Authority, the Trustee, the Paying Agent, the Bank, the Company and the Bondowners.
While this bond is in the Flexible Mode, interest shall be computed on the basis of actual days elapsed divided by 365 or 366, as appropriate. From and after the date on which this bond becomes due, any unpaid principal will bear interest at the then effective interest rate until paid or duly provided for.
While this bond is in the Flexible Mode, the principal of and interest on this bond due on the MATURITY DATE are payable when due by wire or bank transfer of immediately available funds within the continental United States to the REGISTERED OWNER hereof but only upon presentation and surrender of this bond at the offices of __________________________, __________, _________, as Paying Agent (with its successors in such capacity, the "Paying Agent"). While this bond is in the Flexible Mode, the Purchase Price of this bond (which includes accrued interest to the Purchase Date) tendered for purchase is payable by wire or bank transfer within the continental United States from the Paying Agent to the REGISTERED OWNER at its address shown on the registration books maintained by the Paying Agent. Payment of the Purchase Price of this bond to such owner shall be made on the Purchase Date if presentation and surrender of this bond is made prior to 11:00 A.M., New York City time, on the Purchase Date or on such later Business Day upon which presentation and surrender of this bond is made prior to 11:00 A.M., New York City time. The Purchase Price of this bond shall be paid in immediately available funds. Overdue interest on this bond, or interest on overdue principal while in the Flexible Mode is payable in immediately available funds by wire or bank transfer within the continental United States from the Paying Agent to the REGISTERED OWNER, determined as of the close of business on the applicable special record date as determined by the Trustee, at its address as shown on the registration books maintained by the Paying Agent. The special record date may be not more than thirty (30) days before the date set for payment. The Paying Agent will mail notice of a special record date to the Bondowners at least ten (10) days before the special record date. The Paying Agent will promptly certify to the Authority, the Trustee and the Remarketing Agent that it has mailed such notice to all Bondowners, and such certificate will be conclusive evidence that notice was given in the manner required hereby.
The Bonds are subject to mandatory redemption at any time at a redemption price of 100% of the principal amount of the Bonds so redeemed plus accrued interest in the event (i) the Company delivers to the Trustee an opinion of nationally recognized bond counsel selected by the Company and reasonably satisfactory to the Trustee ("Bond Counsel") stating that interest on the Bonds is or will become includable in gross income of the owners thereof for federal income tax purposes, or (ii) it is finally determined by the Internal Revenue Service or a court of competent jurisdiction, as a result of (A) a proceeding in which the Company has participated or been given notice and an opportunity to participate, and, (B) either (1) a failure by the Company (or the Seabrook Transferee as defined in the Agreement) to observe any covenant or agreement undertaken in or pursuant to the Agreement, or the inaccuracy of any representation made by the Company (or the Seabrook Transferee) in or pursuant to the Agreement, or (2) the Seabrook Transfer (as defined in the Agreement), that interest payable on the Bonds is includable for federal income tax purposes in the gross income of any owner thereof (other than an owner which is a "substantial user" or a "related person" within the meaning of Section 147(a) of the Internal Revenue Code of 1986). Any determination under clause (ii) above will not be considered final for this purpose until the earliest of the conclusion of any appellate review, the denial of appellate review or the expiration of the period for seeking appellate review. Redemption under this paragraph shall be in whole unless not less than forty-five (45) days prior to the redemption date the Company delivers to the Trustee an opinion of Bond Counsel reasonably satisfactory to the Trustee to the effect that a redemption of less than all of the Bonds will preserve the tax-exempt status of interest on the remaining Bonds outstanding subsequent to such redemption. Except as provided in the next sentence, any such redemption shall be made on the 90th day after the date on which the opinion described in clause (i) is delivered or the determination described in clause (ii) becomes final or on such earlier date as the Company may designate by notice given to the Trustee at least forty-five (45) days prior to such designated date. Any Bond in the Flexible Mode that has a Purchase Date prior to the redemption date established for that Bond pursuant to the preceding sentence shall be redeemed on that Purchase Date. If such redemption shall occur in accordance with the terms of the Agreement, then such failure by the Company (or the Seabrook Transferee as described above) to observe such covenant or agreement, or the inaccuracy of any such representation will not, in and of itself, constitute a default thereunder.
If the Trustee receives written notice from any Bondowner stating that
(i) such Bondowner has been notified in writing by the Internal Revenue
Service that it proposes to include the interest on the Bonds in the gross
income of such owner for federal income tax purposes, or any other
proceeding has been instituted against such owner which may lead to a like
determination, and (ii) such owner will afford the Company the opportunity
to participate at its own expense in the proceeding, either directly or in
the name of such owner, until the conclusion of any appellate review, and
the Trustee has examined such written notice and it appears to be accurate
on its face, then the Trustee shall promptly give notice thereof to the
Company, the Authority, and each Bondowner whose Bonds may be affected.
The Trustee shall thereafter keep itself reasonably informed of the
progress of any administrative proceedings or litigation relating to such
notice. Under the Agreement the Company is required to give the Trustee
written notice of such a final determination within forty-five (45) days of
such final determination.
If the Purchase Date of this bond is after the redemption date, notice of redemption of this bond will be given by first class mail, postage prepaid, not more than forty-five (45) nor less than thirty (30) days prior to the redemption date to the REGISTERED OWNER at its registered address. Failure to mail notice to the owner of any other Bond or any defect in the notice to such other owner shall not affect the redemption of this bond.
This bond is transferable by the REGISTERED OWNER, in person or by its attorney duly authorized in writing, at the office of the Paying Agent, upon surrender of this bond to the Paying Agent for cancellation. Upon the transfer, a new Bond or Bonds in authorized denominations of the same aggregate principal amount will be issued to the transferee at the same office. No transfer will be effective unless represented by such surrender and reissue. This bond may also be exchanged at the office of the Paying Agent for a new Bond or Bonds in authorized denominations of the same aggregate principal amount without transfer to a new registered owner. Exchanges and transfers will be without expense to the owner except for applicable taxes or other governmental charges, if any.
The Bonds are issuable only in fully registered form and while in the Flexible Mode shall be in denominations of $100,000 or any multiple of $1,000 in excess of $100,000.
The Authority, the Trustee, the Paying Agent and the Company may treat the REGISTERED OWNER as the absolute owner of this bond for all purposes, notwithstanding any notice to the contrary.
No director, officer, employee or agent of the Authority nor any person executing this bond (by facsimile signature or otherwise) shall be personally liable, either jointly or severally, hereon or be subject to any personal liability or accountability by reason of the issuance hereof.
This bond will not be valid until the Certificate of Authentication has been signed by the Trustee or the Paying Agent.
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND ON THE BACK,
WHICH HAVE THE SAME EFFECT AS IF SET FORTH HERE.
BUSINESS FINANCE AUTHORITY
OF THE STATE OF NEW HAMPSHIRE
(Seal) By:________________________________
Title:
By:________________________________
|
Title:
Certificate of Authentication
This bond is one of the Bonds described in the Agreement.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
Date of Registration:
By:____________________________, or
Authorized Signature
By:___________________________________,
as Paying Agent
By:______________________________
Authorized Signature
Assignment
For value received the undersigned sells, assigns and transfers this bond to
and irrevocably appoints ________________________________ attorney-in-fact to transfer it on the books kept for registration of the bond, with full power of substitution.
Dated:
Signature Guaranteed:
By:_____________________________
Authorized Signature
The following abbreviations, when used in the inscription on the face of this bond, shall be construed as though they were written out in full according to applicable law.
TEN COM - as tenants in common UNIF GIFT MIN ACT -
TEN ENT - as tenants by the entirety ______ Custodian _______
JT TEN - as joint tenants with rights (Cust) (Minor)
of survivorship and not as
tenants in common
Act ____________________
(State)
Additional abbreviations may also be used though not set forth in the list above.
(b) Form of Weekly Bond. The 1993 Series E Bonds may be issued in the Weekly Mode in substantially the form prescribed below.
$____________ No. R-
ANY BONDOWNER WHO FAILS TO DELIVER A BOND FOR PURCHASE AT THE TIMES AND AT THE PLACE REQUIRED HEREIN SHALL HAVE NO FURTHER RIGHTS HEREUNDER EXCEPT THE RIGHT TO RECEIVE THE PURCHASE PRICE HEREOF UPON PRESENTATION AND SURRENDER OF THIS BOND TO THE PAYING AGENT AS DESCRIBED HEREIN, AND SHALL HOLD THIS BOND AS AGENT FOR THE PAYING AGENT.
UNITED STATES OF AMERICA
STATE OF NEW HAMPSHIRE
BUSINESS FINANCE AUTHORITY
OF THE STATE OF NEW HAMPSHIRE
Pollution Control Refunding Revenue Bond (Public Service Company of New Hampshire Project - 1993 Tax-Exempt Series E)
REGISTERED OWNER:
PRINCIPAL AMOUNT: DOLLARS
INTEREST PAYMENT DATES: (i) the first Business Day of each calendar
month, and (ii) the Maturity Date.
|
MATURITY DATE: May 1, 2021
DATE OF THIS BOND:
(Date as of which Bonds of this
series were initially issued.)
MODE: Weekly
CUSIP:
THIS BOND DOES NOT CONSTITUTE AN INDEBTEDNESS OF THE STATE OF NEW HAMPSHIRE OR OF THE AUTHORITY EXCEPT TO THE EXTENT PERMITTED BY NEW HAMPSHIRE RSA CHAPTER 162-I. ALL AMOUNTS OWED HEREUNDER ARE PAYABLE ONLY FROM THE SOURCES PROVIDED IN THE LOAN AND TRUST AGREEMENT DESCRIBED BELOW, AND NO PUBLIC FUNDS MAY BE USED FOR THAT PURPOSE.
The Business Finance Authority of the State of New Hampshire (the "Authority"), for value received, promises to pay to the REGISTERED OWNER, or registered assigns, but solely from the moneys to be provided under the Agreement mentioned below, upon presentation and surrender hereof, in lawful money of the United States of America, the PRINCIPAL AMOUNT on the MATURITY DATE, unless paid earlier as provided below, with interest from the most recent INTEREST PAYMENT DATE to which interest has been paid or duly provided for or, if no interest has been paid, from the DATE OF THIS BOND set forth above, until paid in full, at the rates set forth below, payable on each INTEREST PAYMENT DATE. Until conversion to the Flexible, Multiannual or Fixed Rate Mode as provided below, this bond shall bear interest at the Weekly Rate. The Weekly Rate for this bond shall be the rate of interest determined by the Remarketing Agent designated as provided in the Agreement (herein, with its successors, the "Remarketing Agent"), for each Rate Period, as defined below, to be the lowest rate which in its judgment, on the basis of prevailing financial market conditions, would permit the sale of the Bonds (as defined below) in the Weekly Mode at par plus accrued interest on and as of the Effective Date, as defined below, but not in excess of the Maximum Interest Rate. If this bond is converted to the Flexible, Multiannual or Fixed Rate Mode it shall bear interest at the Flexible, Multiannual or Fixed Rate, as the case may be, as defined in the Agreement. The Remarketing Agent shall determine the initial Weekly Rate on or before the date of issue in or of conversion to the Weekly Mode, which rate shall remain in effect as provided in the Agreement. Thereafter, the Remarketing Agent shall redetermine the Weekly Rate for each Rate Period as provided below. The amount of interest due on any INTEREST PAYMENT DATE shall be the amount of unpaid interest accrued on this bond through the day preceding such INTEREST PAYMENT DATE.
This bond is one of a series of Pollution Control Refunding Revenue Bonds (Public Service Company of New Hampshire Project - 1993 Tax-Exempt Series E) (the "Bonds") in the aggregate principal amount of $44,800,000 issued under New Hampshire RSA Chapter 162-I (the "Act"). The proceeds of the Bonds are being loaned to Public Service Company of New Hampshire (the "Company"), a New Hampshire corporation, pursuant to a Series E Loan and Trust Agreement dated as of May 1, 1991, as supplemented and amended by a First Supplement dated as of December 1, 1993 (the "Agreement") among the Company, the Authority and State Street Bank and Trust Company, as Trustee (the "Trustee") to refund a like principal amount of the Authority's $114,500,000 Pollution Control Revenue Bonds (Public Service Company of New Hampshire Project - 1991 Taxable Series E) (the "1991 Bonds"), which were originally issued to finance certain costs associated with the Company's ownership interest in air or water pollution control and sewage or solid waste disposal facilities installed for use by Unit No. 1 at the nuclear electric generating station (the "Station") in Seabrook, New Hampshire (the "Project Facilities"). Pursuant to the Agreement, the Company has unconditionally agreed to repay such loan in the amounts and at the times necessary to pay the principal of, premium, if any, and interest on the Bonds when due. To evidence and secure such loan and the Company's reimbursement and certain other obligations under the Reimbursement Agreement (as defined below), the Company has issued and delivered to the Trustee its First Mortgage Bonds, Series G (the "Series G First Mortgage Bonds") issued under the First Mortgage Indenture dated as of August 15, 1978, as amended, and the Tenth Supplemental Indenture thereto dated as of May 1, 1991 between the Company and First Fidelity Bank, National Association, New Jersey, as Trustee (as amended and supplemented from time to time, the "First Mortgage Bond Indenture") in an aggregate principal amount, and with an interest rate, maturity date and redemption provisions corresponding to those of the Bonds and certain other bonds issued under the Agreement, including the 1991 Bonds. As provided in the Agreement, payments of principal of, and premium, if any, and interest on the Series G First Mortgage Bonds shall, upon receipt by the Trustee, be deemed to constitute payments in corresponding amounts by the Company in respect of the Bonds and certain other bonds issued under the Agreement, including the 1991 Bonds. Reference is hereby made to the Agreement for the provisions thereof with respect to the rights, limitations of rights, duties, obligations and immunities of the Company, the Authority, the Trustee, the Paying Agent, and the Bondowners, including the order of payments in the event of insufficient funds, the disposition of unclaimed moneys held by the Trustee and restrictions on the rights of owners of the Bonds to bring suit. The Agreement may be amended to the extent and in the manner provided therein. Copies of the Agreement are available for inspection at the corporate trust office of the Trustee.
The Purchase Price (as defined below) and principal of and interest on
this bond while it is in the Weekly Mode is also payable from moneys drawn
by the Paying Agent on an irrevocable letter of credit for the Bonds and
certain other bonds issued under the Agreement, including the 1991 Bonds
(together with any extensions, amendments, and renewals thereof, the
"Letter of Credit"), issued by Citibank, N.A. pursuant to the terms of a
Series E Letter of Credit and Reimbursement Agreement dated as of May 1,
1991 (the "Reimbursement Agreement") by and among the Company, Citibank,
N.A. (together with any other issuer of a Credit Facility, the "Bank") and
the participating banks named therein. The Paying Agent may draw on the
Letter of Credit presently in place for the payment of up to forty-five
(45) days' interest for Bonds in the Weekly Mode. The Letter of Credit
initially expires on May 16, 1995 but may be terminated earlier upon the
occurrence of certain events set forth in the Agreement and the
Reimbursement Agreement or extended as provided in the Reimbursement
Agreement. Unless the Letter of Credit is extended or renewed or a
substitute letter of credit (collectively with the Letter of Credit, a
"Credit Facility") is provided in accordance with the Agreement, the Bonds
will become subject to mandatory purchase as described below. The Company
may substitute a new Credit Facility as provided in the Agreement.
In case any Event of Default occurs and is continuing, the principal amount of this bond together with accrued interest may become or be declared immediately due and payable in the manner and with the effect provided in the Agreement.
Unless otherwise defined herein, capitalized terms used in this bond shall have the meaning given them in the Agreement. The following terms are defined as follows:
"Business Day" means a day (i) that is not a Sunday or legal holiday or a day on which banking institutions are authorized pursuant to law to close, (ii) that is not a day on which the corporate trust office of the First Mortgage Bond Trustee is not open for business, (iii) that is a day on which banks are not required or authorized to close in New York, New York, and (iv) that is a day on which banking institutions in all of the cities in which the principal offices of the Trustee and the Paying Agent and, if applicable, the Remarketing Agent and the Bank are located are not required or authorized to remain closed and on which the New York Stock Exchange is not closed.
"Effective Date" means, with respect to a Bond in the Flexible, Weekly and Multiannual Modes, the date on which a new Rate Period for that Bond takes effect.
"Mode" means the period for and the manner in which the interest rates on the Bonds are set and includes the Flexible Mode, the Weekly Mode, the Multiannual Mode and the Fixed Rate Mode.
"Purchase Date" means, while this bond is in the Weekly Mode, the date on which this bond shall be required to be purchased pursuant to a mandatory or optional tender in accordance with the provisions hereof.
"Rate Period" or "Period" means, when used with respect to any particular rate of interest for a Bond in the Flexible, Weekly or Multiannual Mode, the period during which such rate of interest determined for such Bond will remain in effect as described herein. While this bond is in the Weekly Mode, a new interest rate shall take effect on the date such Mode takes effect and thereafter on each Wednesday.
At the option of the Company and upon certain conditions provided for in the Agreement described below, all or a portion of the Bonds (a) may be converted or reconverted from time to time to or from the Weekly Mode or Multiannual Mode, which means that the Rate Period is, respectively, one week or one year or any multiple of one year, (b) may be converted or reconverted from time to time to or from the Flexible Mode, and will have Rate Periods of from one to 270 days as provided herein, or (c) may be converted to the Fixed Rate Mode; provided, however, that in the Multiannual Mode the first rate period occurring after conversion to such Mode may be shorter than the applicable multiple of one year as provided in the Agreement.
While this bond is in the Weekly Mode, conversions to any other Mode may take place only on the first Business Day of any calendar month upon thirty (30) days' prior written notice from the Paying Agent to the REGISTERED OWNER of this bond. Conversion of this bond to another Mode shall be subject to the conditions set forth in the Agreement. In the event that the conditions for a proposed conversion to a new Mode are not met (i) such new Mode shall not take effect on the proposed conversion date, notwithstanding any prior notice to the Bondowners of such conversion, (ii) this bond shall automatically convert to the Flexible Mode with a Rate Period of one day, and (iii) this bond shall be subject to mandatory tender for purchase as provided below. In no event shall the failure of this bond to be converted to another Mode be deemed to be a Default or an Event of Default under the Agreement as long as the Purchase Price (as defined below) is made available on the failed conversion date to owners of all Bonds that were to have been converted.
When this bond is in the Weekly Mode, the Weekly Rate in effect for each Rate Period (the "Effective Rate" for such Period) shall be determined not later than the Business Day next preceding the Effective Date. If the Remarketing Agent fails to make such determination or fails to announce the Effective Rate as required with respect to any Bonds in the Weekly Mode, or if for any reason such manner of determination shall be determined to be invalid or unenforceable, the rate on such Bonds to take effect on that Effective Date shall be the Weekly Rate in effect on the day preceding such date. The Remarketing Agent shall announce the Effective Rate by telephone to the Paying Agent on the date of determination thereof, and shall promptly confirm such notice in writing. While this bond is in the Weekly Mode, any Bondowner may ascertain the Effective Rate at any time by contacting the Paying Agent or the Remarketing Agent.
Each determination and redetermination of the Weekly Rate shall be conclusive and binding on the Authority, the Trustee, the Paying Agent, the Bank, the Company and the Bondowners.
While this bond is in the Weekly Mode, interest shall be computed on the basis of a 365- or 366-day year, as appropriate, and actual days elapsed. From and after the date on which this bond becomes due, any unpaid principal will bear interest at the then effective interest rate until paid or duly provided for.
While this bond is in the Weekly Mode the principal of this bond is payable when due by wire or bank transfer of immediately available funds within the continental United States to the REGISTERED OWNER hereof but only upon presentation and surrender of this bond at the office of BankAmerica National Trust Company, New York, New York, as Paying Agent, (with its successors in such capacity, the "Paying Agent"). Interest on this bond while in the Weekly Mode is payable in immediately available funds by wire or bank transfer within the continental United States from the Paying Agent to the REGISTERED OWNER, determined as of the close of business on the applicable record date, at its address as shown on the registration books maintained by the Paying Agent. The Purchase Price (as defined below) of Bonds tendered for purchase shall be paid as provided below.
The record date for payment of interest while this bond is in the Weekly Mode is the Business Day preceding the date on which interest is to be paid. With respect to overdue interest or interest payable on redemption of this bond other than on an INTEREST PAYMENT DATE or interest on any overdue amount, the Trustee may establish a special record date. The special record date may be not more than thirty (30) days before the date set for payment. The Paying Agent will mail notice of a special record date to the Bondowners at least ten (10) days before the special record date. The Paying Agent will promptly certify to the Authority, the Trustee and the Remarketing Agent that it has mailed such notice to all Bondowners, and such certificate will be conclusive evidence that notice was given in the manner required hereby.
While this bond is in the Weekly Mode, the REGISTERED OWNER shall have the right to tender this bond for purchase in multiples of $100,000 at a price (the "Purchase Price") equal to 100% of the principal amount thereof, plus accrued interest, if any, to the Purchase Date, upon compliance with the conditions described below, provided that if the Purchase Date is an INTEREST PAYMENT DATE, accrued interest shall be paid separately, and not as part of the Purchase Price on such date. In order to exercise the right to tender, the REGISTERED OWNER must deliver to the Paying Agent a written irrevocable notice of tender substantially in the form of the Bondowner's Election Notice set forth hereon or such other form as may be satisfactory to the Paying Agent. While this bond is in the Weekly Mode, it will be purchased on the Business Day specified in such Bondowner's Election Notice, provided such date is at least seven calendar days after receipt by the Paying Agent of such notice. If the REGISTERED OWNER of this bond has elected to require purchase as provided above, the REGISTERED OWNER shall be deemed, by such election, to have agreed irrevocably to sell this bond to any purchaser determined in accordance with the provisions of the Agreement on the date fixed for purchase at the Purchase Price.
Tender of this bond will not be effective and this bond will not be
purchased if at the time fixed for purchase an acceleration of the maturity
of the Bonds shall have occurred and not have been annulled in accordance
with the Agreement. Notice of tender of this bond is irrevocable. All
notices of tender of Bonds shall be made to the Paying Agent at 2 Rector
Street, New York, New York, or such other address specified in writing by
the Paying Agent to the Bondowners. All deliveries of tendered Bonds,
including deliveries of Bonds subject to mandatory tender, shall be made to
the Paying Agent at 2 Rector Street, New York, New York, Attention:
Corporate Trust Department, or such other address specified in writing by
the Paying Agent to the Bondowners.
This bond is subject to mandatory tender for purchase at the Purchase
Price (i) on the date of conversion or proposed conversion from one Mode to
another Mode and (ii) on (a) the effective date of a substitute Credit
Facility unless the Trustee receives written evidence from Moody's (if this
bond is rated by Moody's) and S&P (if this bond is rated by S&P) that such
substitution will not result in a withdrawal or reduction (excluding a
withdrawal or reduction resulting from a change in Modes) of the rating of
this bond or (b) a date that is not more than fifteen (15) or less than ten
(10) days prior to the expiration or termination of the Credit Facility
other than upon conversion to a new Mode. Notice of mandatory tender shall
be given or caused to be given by the Paying Agent in writing to the
REGISTERED OWNER at least thirty (30) days prior to the mandatory Purchase
Date. THE OWNER OF THIS BOND, BY ACCEPTANCE HEREOF, AGREES TO SELL AND
SURRENDER THIS BOND AT SUCH PRICE TO ANY PURCHASER DETERMINED IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT IN THE EVENT OF SUCH MANDATORY TENDER
AND, ON SUCH PURCHASE DATE, TO SURRENDER THIS BOND TO THE PAYING AGENT FOR
PAYMENT OF THE PURCHASE PRICE. From and after the Purchase Date, no
further interest on this bond shall be payable to the REGISTERED OWNER,
provided that there are sufficient funds available on the Effective Date to
pay the Purchase Price.
The Purchase Price of this bond shall be paid to the REGISTERED OWNER by the Paying Agent on the Delivery Date, which shall be the Purchase Date or any subsequent Business Day on which this bond is delivered to the Paying Agent. The Purchase Price of this bond shall be paid only upon surrender of this bond to the Paying Agent as provided herein. From and after the Purchase Date, no further interest on this bond shall be payable to the REGISTERED OWNER who gave notice of tender for purchase, provided that there are sufficient funds available on the Purchase Date to pay the Purchase Price. The Purchase Price of Bonds tendered for purchase is payable for Bonds in the Weekly Mode by wire or bank transfer within the continental United States in immediately available funds from the Paying Agent to the REGISTERED OWNER at its address shown on the registration books maintained by the Paying Agent. If on any date this bond is subject to mandatory tender for purchase or is required to be purchased at the election of the REGISTERED OWNER, payment of the Purchase Price of this bond to such owner shall be made on the Purchase Date if presentation and surrender of this bond is made prior to 11:00 A.M., New York City time, on the Purchase Date or on such later Business Day upon which presentation and surrender of this bond is made prior to 11:00 A.M., New York City time.
Bonds in the Weekly Mode are subject to redemption in whole or in part at the direction of the Company on any INTEREST PAYMENT DATE at a redemption price of par plus accrued interest.
The Bonds are subject to mandatory redemption at any time at a redemption price of 100% of the principal amount of the Bonds so redeemed plus accrued interest in the event (i) the Company delivers to the Trustee an opinion of nationally recognized bond counsel selected by the Company and reasonably satisfactory to the Trustee ("Bond Counsel") stating that interest on the Bonds is or will become includable in gross income of the owners thereof for federal income tax purposes, or (ii) it is finally determined by the Internal Revenue Service or a court of competent jurisdiction, as a result of (A) a proceeding in which the Company has participated or been given notice and an opportunity to participate, and, (B) either (1) a failure by the Company (or the Seabrook Transferee as defined in the Agreement) to observe any covenant or agreement undertaken in or pursuant to the Agreement, or the inaccuracy of any representation made by the Company (or the Seabrook Transferee) in or pursuant to the Agreement, or (2) the Seabrook Transfer (as defined in the Agreement), that interest payable on the Bonds is includable for federal income tax purposes in the gross income of any owner thereof (other than an owner which is a "substantial user" or a "related person" within the meaning of Section 147(a) of the Internal Revenue Code of 1986). Any determination under clause (ii) above will not be considered final for this purpose until the earliest of the conclusion of any appellate review, the denial of appellate review or the expiration of the period for seeking appellate review. Redemption under this paragraph shall be in whole unless not less than forty-five (45) days prior to the redemption date the Company delivers to the Trustee an opinion of Bond Counsel reasonably satisfactory to the Trustee to the effect that a redemption of less than all of the Bonds will preserve the tax-exempt status of interest on the remaining Bonds outstanding subsequent to such redemption. Except as provided in the next sentence, any such redemption shall be made on the 90th day after the date on which the opinion described in clause (i) is delivered or the determination described in clause (ii) becomes final or on such earlier date as the Company may designate by notice given to the Trustee at least forty-five (45) days prior to such designated date. Any Bond in the Flexible Mode that has a Purchase Date prior to the redemption date established for that Bond pursuant to the preceding sentence shall be redeemed on that Purchase Date. If such redemption shall occur in accordance with the terms of the Agreement, then such failure by the Company (or the Seabrook Transferee as described above) to observe such covenant or agreement, or the inaccuracy of any such representation will not, in and of itself, constitute a default thereunder.
If the Trustee receives written notice from any Bondowner stating that
(i) such Bondowner has been notified in writing by the Internal Revenue
Service that it proposes to include the interest on the Bonds in the gross
income of such owner for federal income tax purposes, or any other
proceeding has been instituted against such owner which may lead to a like
determination, and (ii) such owner will afford the Company the opportunity
to participate at its own expense in the proceeding, either directly or in
the name of such owner, until the conclusion of any appellate review, and
the Trustee has examined such written notice and it appears to be accurate
on its face, then the Trustee shall promptly give notice thereof to the
Company, the Authority, and each Bondowner whose Bonds may be affected.
The Trustee shall thereafter keep itself reasonably informed of the
progress of any administrative proceedings or litigation relating to such
notice. Under the Agreement the Company is required to give the Trustee
written notice of such a final determination within forty-five (45) days of
such final determination.
If less than all of the Outstanding Bonds are to be called for redem- ption, the Bonds (or portions thereof) to be redeemed shall be selected as provided in the Agreement with Bonds in the Weekly Mode being redeemed in units of $100,000.
In the event this bond is selected for redemption, notice will be mailed no more than forty-five (45) nor less than thirty (30) days prior to the redemption date to the REGISTERED OWNER at its address shown on the registration books maintained by the Paying Agent. Failure to mail notice to the owner of any other Bond or any defect in the notice to such an owner shall not affect the redemption of this bond.
If this bond is of a denomination in excess of one hundred thousand dollars ($100,000), portions of the principal amount in the amount of one hundred thousand dollars ($100,000) or any multiple thereof may be redeemed. If less than all of the principal amount is to be redeemed, upon surrender of this bond to the Paying Agent, there will be issued to the REGISTERED OWNER, without charge, a new Bond or Bonds, at the option of the REGISTERED OWNER, for the unredeemed principal amount.
Notice of redemption having been duly mailed, this bond, or the portion called for redemption, will become due and payable on the redemption date at the applicable redemption price and, moneys for the redemption having been deposited with the Paying Agent, from and after the date fixed for redemption, interest on this bond (or such portion) will no longer accrue.
IN CERTAIN CIRCUMSTANCES SET OUT HEREIN, THIS BOND (OR PORTION HEREOF) IS SUBJECT TO PURCHASE OR REDEMPTION, IN EACH CASE UPON NOTICE TO OR FROM THE OWNER HEREOF AS OF A DATE PRIOR TO SUCH PURCHASE OR REDEMPTION. IN EACH SUCH EVENT AND UPON DEPOSIT OF THE PURCHASE OR REDEMPTION PRICE WITH THE PAYING AGENT ON THE PURCHASE OR REDEMPTION DATE, AS THE CASE MAY BE, THIS BOND (OR PORTION HEREOF) SHALL CEASE TO BE OUTSTANDING UNDER THE AGREEMENT, INTEREST HEREON SHALL CEASE TO ACCRUE AS OF THE PURCHASE OR REDEMPTION DATE, AND THE REGISTERED OWNER HEREOF SHALL BE ENTITLED ONLY TO RECEIVE THE PURCHASE OR REDEMPTION PRICE SO DEPOSITED WITH THE PAYING AGENT UPON SURRENDER OF THIS CERTIFICATE TO THE PAYING AGENT.
This bond is transferable by the REGISTERED OWNER, in person or by its attorney duly authorized in writing, at the office of the Paying Agent, upon surrender of this bond to the Paying Agent for cancellation. Upon the transfer, a new Bond or Bonds in authorized denominations of the same aggregate principal amount will be issued to the transferee at the same office. No transfer will be effective unless represented by such surrender and reissue. This bond may also be exchanged at the office of the Paying Agent for a new Bond or Bonds in authorized denominations of the same aggregate principal amount without transfer to a new registered owner. Exchanges and transfers will be without expense to the owner except for applicable taxes or other governmental charges, if any. The Paying Agent will not be required to make an exchange or transfer of this bond (except in connection with any optional or mandatory tender of this bond) (i) if this bond (or any portion thereof) has been selected for redemption or (ii) during the fifteen (15) days preceding any date fixed for selection for redemption if this bond (or any portion thereof) is eligible to be selected for redemption.
The Bonds are issuable only in fully registered form and while in the Weekly Mode shall be in denominations of $100,000 or any multiple thereof.
The Authority, the Trustee, the Paying Agent and the Company may treat the REGISTERED OWNER as the absolute owner of this bond for all purposes, notwithstanding any notice to the contrary.
No director, officer, employee or agent of the Authority nor any person executing this bond (by facsimile signature or otherwise) shall be personally liable, either jointly or severally, hereon or be subject to any personal liability or accountability by reason of the issuance hereof.
This bond will not be valid until the Certificate of Authentication has been signed by the Trustee or the Paying Agent.
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND ON THE BACK,
WHICH HAVE THE SAME EFFECT AS IF SET FORTH HERE.
BUSINESS FINANCE AUTHORITY
OF THE STATE OF NEW HAMPSHIRE
(Seal) By:________________________________
Title:
By:________________________________
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Title:
Certificate of Authentication
This bond is one of the Bonds described in the Agreement.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
Date of Registration: By:____________________________, or
Authorized Signature
By: BANKAMERICA NATIONAL TRUST COMPANY, as
Paying Agent
By: __________________________
Authorized Signature
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Assignment
For value received the undersigned sells, assigns and transfers this bond to
and irrevocably appoints ________________________________ attorney-in-fact to transfer it on the books kept for registration of the bond, with full power of substitution.
Dated:
Signature Guaranteed:
By:_________________________________
Authorized Signature
The following abbreviations, when used in the inscription on the face of this bond, shall be construed as though they were written out in full according to applicable law.
TEN COM - as tenants in common UNIF GIFT MIN ACT -
TEN ENT - as tenants by the entirety ______ Custodian _______
JT TEN - as joint tenants with rights (Cust) (Minor)
of survivorship and not as
tenants in common
Act ____________________
(State)
Additional abbreviations may also be used though not set forth in the list above.
The following is the Bondowner's Election Notice described herein:
BONDOWNER'S ELECTION NOTICE
Business Finance Authority of the State of New Hampshire Pollution Control Refunding Revenue Bonds (Public Service Company of New Hampshire Project - 1993 Tax-Exempt Series E)
Principal Principal Amount Bond Purchase Amount CUSIP Tendered for Purchase Numbers Date
The undersigned hereby certifies that it is the registered owner of the Bonds described above (the "Tendered Bonds"), all of which are in the Weekly Mode, and hereby agrees that the delivery of this instrument of transfer to the Paying Agent constitutes an irrevocable offer to sell the Tendered Bonds to the Company or its designee on the Purchase Date, which shall be a Business Day at least seven (7) calendar days following delivery of this instrument, at a purchase price equal to the unpaid principal balance thereof plus accrued and unpaid interest thereon to the Purchase Date (the "Purchase Price"). The undersigned acknowledges and agrees that this election notice is irrevocable and that the undersigned will have no further rights with respect to the Tendered Bonds except payment, upon presentation and surrender of the Tendered Bonds, of the Purchase Price by payment by wire or bank transfer within the continental United States from the Paying Agent to the undersigned at its address as shown on the registration books of the Paying Agent (i) on the Purchase Date if the Tendered Bonds shall have been surrendered to the Paying Agent prior to 11:00 A.M., New York City time, on the Purchase Date or (ii) on any Delivery Date subsequent to the Purchase Date on which Tendered Bonds are delivered to the Paying Agent by 11:00 A.M., New York City time, provided that for so long as the Bonds are in the Book-Entry Only System, physical surrender of the Bonds to the Paying Agent shall not be required and the Bonds shall be tendered pursuant to the procedures described in Subsection 303(g) of the First Supplement referred to below.
Except as otherwise indicated herein and unless the context otherwise requires, the terms used herein shall have the meanings set forth in the Series E Loan and Trust Agreement dated as of May 1, 1991 and in the First Supplement dated as of December 1, 1993 relating to the Bonds.
Date: _________________ Signature(s)
IMPORTANT: The above signature(s) must correspond with the name(s) as set forth on the face of the Tendered Bond(s) with respect to which this Bondowner's Election Notice is being delivered without any change wha- tsoever. If this notice is signed by a person other than the registered owner of any Tendered Bond(s), the Tendered Bond(s) must be either endorsed on the Assignment appearing on each Bond or accompanied by appropriate bond powers, in each case signed exactly as the name or names of the registered owner or owners appear on the bond register. The method of presenting this notice to the Paying Agent is the choice of the person making such presentation. If it is made by mail, it should be by registered mail with return receipt requested.
* * *
(c) Form of Multiannual Bond. The 1993 Series E Bonds may be issued in the Multiannual Mode in substantially the form prescribed below.
$____________ No. R-
ANY BONDOWNER WHO FAILS TO DELIVER A BOND FOR PURCHASE AT THE TIMES AND AT THE PLACE REQUIRED HEREIN SHALL HAVE NO FURTHER RIGHTS HEREUNDER EXCEPT THE RIGHT TO RECEIVE THE PURCHASE PRICE HEREOF UPON PRESENTATION AND SURRENDER OF THIS BOND TO THE PAYING AGENT AS DESCRIBED HEREIN, AND SHALL HOLD THIS BOND AS AGENT FOR THE PAYING AGENT.
UNITED STATES OF AMERICA
STATE OF NEW HAMPSHIRE
BUSINESS FINANCE AUTHORITY
OF THE STATE OF NEW HAMPSHIRE
Pollution Control Refunding Revenue Bond (Public Service Company of New Hampshire Project - 1993 Tax-Exempt Series E)
REGISTERED OWNER:
PRINCIPAL AMOUNT: DOLLARS
INTEREST PAYMENT DATES: (i) the first day of the sixth full calendar
month after the Mode takes effect and the
first day of each sixth calendar month there-
after, and (ii) the Maturity Date.
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CURRENT EFFECTIVE DATE:
INTEREST RATE:
(To Next Purchase Date)
NEXT PURCHASE DATE:
COMMENCEMENT DATE OF RATE PERIOD:
MATURITY DATE: May 1, 2021
DATE OF THIS BOND:
(Date as of which Bonds of this
series were initially issued.)
MODE: Multiannual
CUSIP:
THIS BOND DOES NOT CONSTITUTE AN INDEBTEDNESS OF THE STATE OF NEW HAMPSHIRE OR OF THE AUTHORITY EXCEPT TO THE EXTENT PERMITTED BY NEW HAMPSHIRE RSA CHAPTER 162-I. ALL AMOUNTS OWED HEREUNDER ARE PAYABLE ONLY FROM THE SOURCES PROVIDED IN THE LOAN AND TRUST AGREEMENT DESCRIBED BELOW, AND NO PUBLIC FUNDS MAY BE USED FOR THAT PURPOSE.
The Business Finance Authority of the State of New Hampshire (the "Authority"), for value received, promises to pay to the REGISTERED OWNER, or registered assigns, but solely from the moneys to be provided under the Agreement mentioned below, upon presentation and surrender hereof, in lawful money of the United States of America, the PRINCIPAL AMOUNT on the MATURITY DATE, unless paid earlier as provided below, with interest from the most recent INTEREST PAYMENT DATE to which interest has been paid or duly provided for or, if no interest has been paid, from the DATE OF THIS BOND set forth above, until paid in full, at the rates set forth below, payable on each INTEREST PAYMENT DATE. Until conversion to the Flexible, Weekly or Fixed Rate as provided below, this bond shall bear interest at the Multiannual Rate. The Multiannual Rate shall be the rate of interest determined by the Remarketing Agent designated as provided in the Agreement (herein, with its successors, the "Remarketing Agent"), for each Rate Period, as defined below, to be the lowest rate which in its judgment, on the basis of prevailing financial market conditions, would permit the sale of the Bonds (as defined below) with the same Rate Period at par plus accrued interest on and as of the Effective Date, as defined below. If this bond is converted to the Flexible, Weekly, or Fixed Rate Mode it shall bear interest at the Flexible, Weekly or Fixed Rate, as the case may be, as defined in the Agreement. The Remarketing Agent shall determine the initial Multiannual Rate on or before the date of issue in or of conversion to the Multiannual Mode, which rate shall remain in effect as provided in the Agreement. Thereafter, the Remarketing Agent shall redetermine the Multiannual Rate for each Rate Period as provided below. If any payment, redemption or maturity date for principal, premium or interest shall not be a Business Day, then the payment thereof may be made on the next succeeding Business Day with the same force and effect as if made on the specified payment date and no interest shall accrue for the period after the specified payment date.
This bond is one of a series of Pollution Control Refunding Revenue Bonds (Public Service Company of New Hampshire Project - 1993 Tax-Exempt Series E) (the "Bonds") in the aggregate principal amount of $44,800,000 issued under New Hampshire RSA Chapter 162-I (the "Act"). The proceeds of the Bonds are being loaned to Public Service Company of New Hampshire (the "Company"), a New Hampshire corporation, pursuant to a Series E Loan and Trust Agreement dated as of May 1, 1991, as supplemented and amended by a First Supplement dated as of December 1, 1993 (the "Agreement") among the Company, the Authority and State Street Bank and Trust Company, as Trustee (the "Trustee") to refund a like principal amount of the Authority's $114,500,000 Pollution Control Revenue Bonds (Public Service Company of New Hampshire Project - 1991 Taxable Series E) (the "1991 Bonds"), which were originally issued to finance certain costs associated with the Company's ownership interest in air or water pollution control and sewage or solid waste disposal facilities installed for use by Unit No. 1 at the nuclear electric generating station (the "Station") in Seabrook, New Hampshire (the "Project Facilities"). Pursuant to the Agreement, the Company has unconditionally agreed to repay such loan in the amounts and at the times necessary to pay the principal of, premium, if any, and interest on the Bonds when due. To evidence and secure such loan and the Company's reimbursement and certain other obligations, if any, under the Reimbursement Agreement, (as defined in the Agreement), the Company has issued and delivered to the Trustee its First Mortgage Bonds, Series G (the "Series G First Mortgage Bonds") issued under the First Mortgage Indenture dated as of August 15, 1978, as amended, and the Tenth Supplemental Indenture thereto dated as of May 1, 1991 between the Company and First Fidelity Bank, National Association, New Jersey, as Trustee (as amended and supplemented from time to time, the "First Mortgage Bond Indenture") in an aggregate principal amount, and with an interest rate, maturity date and redemption provisions corresponding to those of the Bonds and certain other bonds issued under the Agreement, including the 1991 Bonds. As provided in the Agreement, payments of principal of, and premium, if any, and interest on the Series G First Mortgage Bonds shall, upon receipt by the Trustee, be deemed to constitute payments in corresponding amounts by the Company in respect of the Bonds and certain other bonds issued under the Agreement, including the 1991 Bonds. Reference is hereby made to the Agreement for the provisions thereof with respect to the rights, limitations of rights, duties, obligations and immunities of the Company, the Authority, the Trustee, the Paying Agent, and the Bondowners, including the order of payments in the event of insufficient funds, the disposition of unclaimed moneys held by the Trustee and restrictions on the rights of owners of the Bonds to bring suit. The Agreement may be amended to the extent and in the manner provided therein. Copies of the Agreement are available for inspection at the corporate trust office of the Trustee.
In case any Event of Default occurs and is continuing, the principal amount of this bond together with accrued interest may become or be declared immediately due and payable in the manner and with the effect provided in the Agreement.
Unless otherwise defined herein, capitalized terms used in this bond shall have the meaning given them in the Agreement. The following terms are defined as follows:
"Business Day" means a day (i) that is not a Sunday or legal holiday or a day on which banking institutions are authorized pursuant to law to close, (ii) that is not a day on which the corporate trust office of the First Mortgage Bond Trustee is not open for business, (iii) that is a day on which banks are not required or authorized to close in New York, New York, and (iv) that is a day on which banking institutions in all of the cities in which the principal offices of the Trustee and the Paying Agent and, if applicable, the Remarketing Agent and the Bank (as defined in the Agreement) are located are not required or authorized to remain closed and on which the New York Stock Exchange is not closed.
"Effective Date" means, with respect to a Bond in the Flexible, Weekly and Multiannual Modes, the date on which a new Rate Period for that Bond takes effect.
"Mode" means the period for and the manner in which the interest rates on the Bonds are set and includes the Flexible Mode, the Weekly Mode, the Multiannual Mode and the Fixed Rate Mode.
"Purchase Date" means, while this bond is in a Multiannual Mode, the date on which this bond shall be required to be purchased pursuant to a mandatory tender in accordance with the provisions hereof.
"Rate Period" or "Period" means, when used with respect to any particular rate of interest for a Bond in the Flexible, Weekly or Multiannual Mode, the period during which such rate of interest determined for such Bond will remain in effect as described herein.
At the option of the Company and upon certain conditions provided for in the Agreement described below, all or a portion of the Bonds (a) may be converted or reconverted from time to time to or from the Weekly Mode or Multiannual Mode, which means that the Rate Period is, respectively, one week or one year or any multiple of one year, (b) may be converted or reconverted from time to time to or from the Flexible Mode, and will have Rate Periods of from one to 270 days as provided herein, or (c) may be converted to the Fixed Rate Mode; provided, however, that in the Multiannual Mode the first rate period occurring after conversion to such Mode may be shorter or longer than the applicable multiple of one year as provided in the Agreement. While this bond is in the Multiannual Mode, a new interest rate shall take effect on the date such Mode takes effect and thereafter on the INTEREST PAYMENT DATE ending the Rate Period designated by the Company.
While this bond is in the Multiannual Mode, conversions to any other Mode, or conversions to new Rate Periods of the same or different lengths while in the Multiannual Mode, may take place only on a date which would have been an Effective Date for this bond, or if conversion is to the Flexible or Weekly Mode and such day is not a Business Day, the first Business Day thereafter. Conversion of this bond to another Mode, or to a new Rate Period in the Multiannual Mode of the same or a different length, shall be subject to the conditions set forth in the Agreement. In the event that the conditions for a proposed conversion to a new Mode, or to a new Rate Period in the Multiannual Mode of the same or different length, are not met (i) such new Mode or Rate Period shall not take effect on the proposed conversion date, notwithstanding any prior notice to the Bondowners of such conversion and (ii) this bond shall automatically convert to the Flexible Mode with a Rate Period of one day. In no event shall the failure of this bond to be converted to another Mode or Rate Period be deemed to be a Default or an Event of Default under the Agreement as long as the Purchase Price (as defined below) is made available on the failed conversion date to owners of all Bonds that were to have been converted.
When this bond is in any Multiannual Mode, the Multiannual Rate in effect for each Rate Period (the "Effective Rate" for such Period) shall be determined not later than two (2) Business Days prior to the Effective Date. If the Remarketing Agent fails to make such determination or fails to announce the Effective Rate as required with respect to any Bonds in the Multiannual Mode, or if for any reason such manner of determination shall be determined to be invalid or unenforceable, the rate to take effect on any Effective Date shall be automatically converted to the Flexible Mode with a Rate Period of one day. The Remarketing Agent shall announce the Effective Rate by telephone to the Paying Agent on the date of determination thereof, and shall promptly confirm such notice in writing.
Each determination and redetermination of the Multiannual Rate shall be conclusive and binding on the Authority, the Trustee, the Paying Agent, the Company, the Bondowners and, if applicable, the Bank.
While this bond is in the Multiannual Mode, interest shall be computed on the basis of a 360-day year consisting of twelve 30-day months. From and after the date on which this bond becomes due, any unpaid principal will bear interest at the then effective interest rate until paid or duly provided for.
While this bond is in the Multiannual Mode, the principal of and premium, if any, on this bond are payable when due by check or draft in clearinghouse funds to the REGISTERED OWNER hereof but only upon presentation and surrender of this bond at the office of _______________________________, ____________________, ______________________, as Paying Agent, (with its successors in such capacity, the "Paying Agent"). Interest on this bond while in the Multiannual Mode is payable by check or draft in clearinghouse funds mailed on the applicable payment date by the Paying Agent to the REGISTERED OWNER, determined as of the close of business on the applicable record date, at its address as shown on the registration books. The Purchase Price (as defined below) of Bonds tendered for purchase shall be paid as provided below.
The record date for payment of interest while this bond is in the Multiannual Mode is the fifteenth day of the month immediately preceding the date on which the interest is to be paid, provided that with respect to overdue interest or interest payable on redemption of this bond other than on an INTEREST PAYMENT DATE or interest on any overdue amount, the Trustee may establish a special record date. The special record date may be not more than thirty (30) days before the date set for payment. The Paying Agent will mail notice of a special record date to the Bondowners at least ten (10) days before the special record date. The Paying Agent will promptly certify to the Authority, the Trustee and the Remarketing Agent that it has mailed such notice to all Bondowners, and such certificate will be conclusive evidence that notice was given in the manner required hereby.
While this bond is in the Multiannual Mode, this bond is subject to mandatory tender for purchase at a price (the "Purchase Price") equal to 100% of the principal amount thereof, plus accrued interest, if any, on each Effective Date. THE OWNER OF THIS BOND, BY ACCEPTANCE HEREOF, AGREES TO SELL AND SURRENDER THIS BOND IN ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT AND, ON THE PURCHASE DATE, TO SURRENDER THIS BOND TO THE PAYING AGENT FOR PAYMENT OF THE PURCHASE PRICE. UPON DEPOSIT OF THE PURCHASE PRICE WITH THE PAYING AGENT ON THE PURCHASE DATE, THIS BOND SHALL BE DEEMED TENDERED FOR PURCHASE AND SHALL CEASE TO BE OUTSTANDING UNDER THE AGREEMENT, INTEREST HEREON SHALL CEASE TO ACCRUE AS OF THE PURCHASE DATE, AND THE REGISTERED OWNER HEREOF SHALL BE ENTITLED ONLY TO RECEIVE THE PURCHASE PRICE SO DEPOSITED WITH THE PAYING AGENT UPON SURRENDER OF THIS CERTIFICATE TO THE PAYING AGENT. All deliveries of tendered Bonds shall be made to the Paying Agent at ________________, New York, New York, Attention: ______________, or such other address specified in writing by the Paying Agent to the Bondowners.
The Purchase Price of this bond shall be paid to the REGISTERED OWNER by the Paying Agent on the Delivery Date, which shall be the Purchase Date or any subsequent Business Day on which this bond is delivered to the Paying Agent. The Purchase Price of this bond shall be paid only upon surrender of this bond to the Paying Agent as provided herein. From and after the Purchase Date, no further interest on this bond shall be payable to the REGISTERED OWNER, provided that there are sufficient funds available on the Purchase Date to pay the Purchase Price. The Purchase Price of Bonds is payable for Bonds in the Multiannual Mode by check or draft in clearinghouse funds from the Paying Agent to the REGISTERED OWNER at its address shown on the registration books maintained by the Paying Agent. If on any date this bond is subject to mandatory tender for purchase, payment of the Purchase Price of this bond to such owner shall be made on the Purchase Date if presentation and surrender of this bond is made prior to 11:00 A.M., New York City time, on the Purchase Date or on such later Business Day upon which presentation and surrender of this bond is made prior to 11:00 A.M., New York City time.
In the Multiannual Mode and after the expiration of the applicable No Call Period (measured from the COMMENCEMENT DATE OF RATE PERIOD) set forth in the following schedule, the Bonds shall be subject to redemption at the direction of the Company in whole or in part at any time at the following redemption prices expressed as a percentage of the principal amount redeemed, plus interest accrued to the redemption date:
Length of
Multiannual Redemption
Rate Period No Call Period Price
Greater than 15 years 10 years 102%, declining by 1/2%
on each succeeding anni-
versary of the end of the
no call period until
reaching 100% and
thereafter at 100%
Greater than 10, but not 8 years 101 1/2%, declining
greater than 15 years by 1/2% on each suc-
ceeding anniversary of
the end of the no call
period until reaching
100% and thereafter at
100%
Greater than 5, but not 5 years 101%, declining by
greater than 10 years 1/2% on the next
anniversary of the end of
the no call period and
there-after at 100%
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5 years or less Bonds not subject to
optional redemption
until commencement of
next Rate Period.
In addition, at the option of the Company, the Bonds in the Multiannual Mode are subject to redemption prior to maturity as a whole at any time at 100% of the principal amount thereof, plus accrued interest to the redemption date, within nine (9) months of the occurrence of certain extraordinary events consisting of (a) damage or destruction, or loss of title by eminent domain, to the Station or the Project Facilities, (b) changes in law affecting the enforceability of the Agreement or imposing unreasonable burdens or excessive liabilities on the Company relating to the Station or the Project Facilities or their operation, (c) the enjoining or prohibiting of the operation of the Station or the Project Facilities, or (d) changes in the economic availability of fuel, materials, supplies, labor, equipment or other properties or things rendering the continued operation of the Station uneconomical, all as more fully described in the Agreement. The Company's right to direct the redemption of the Bonds in the Multiannual Mode upon the occurrence of any event listed above shall expire six (6) months after such event occurs.
The Bonds are subject to mandatory redemption at any time at a redemption price of 100% of the principal amount of the Bonds so redeemed plus accrued interest in the event (i) the Company delivers to the Trustee an opinion of nationally recognized bond counsel selected by the Company and reasonably satisfactory to the Trustee ("Bond Counsel") stating that interest on the Bonds is or will become includable in gross income of the owners thereof for federal income tax purposes, or (ii) it is finally determined by the Internal Revenue Service or a court of competent jurisdiction, as a result of (A) a proceeding in which the Company has participated or been given notice and an opportunity to participate, and, (B) either (1) a failure by the Company (or the Seabrook Transferee as defined in the Agreement) to observe any covenant or agreement undertaken in or pursuant to the Agreement, or the inaccuracy of any representation made by the Company (or the Seabrook Transferee) in or pursuant to the Agreement, or (2) the Seabrook Transfer (as defined in the Agreement), that interest payable on the Bonds is includable for federal income tax purposes in the gross income of any owner thereof (other than an owner which is a "substantial user" or a "related person" within the meaning of Section 147(a) of the Internal Revenue Code of 1986). Any determination under clause (ii) above will not be considered final for this purpose until the earliest of the conclusion of any appellate review, the denial of appellate review or the expiration of the period for seeking appellate review. Redemption under this paragraph shall be in whole unless not less than forty-five (45) days prior to the redemption date the Company delivers to the Trustee an opinion of Bond Counsel reasonably satisfactory to the Trustee to the effect that a redemption of less than all of the Bonds will preserve the tax-exempt status of interest on the remaining Bonds outstanding subsequent to such redemption. Except as provided in the next sentence, any such redemption shall be made on the 90th day after the date on which the opinion described in clause (i) is delivered or the determination described in clause (ii) becomes final or on such earlier date as the Company may designate by notice given to the Trustee at least forty-five (45) days prior to such designated date. Any Bond in the Flexible Mode that has a Purchase Date prior to the redemption date established for that Bond pursuant to the preceding sentence shall be redeemed on that Purchase Date. If such redemption shall occur in accordance with the terms of the Agreement, then such failure by the Company (or the Seabrook Transferee as described above) to observe such covenant or agreement, or the inaccuracy of any such representation will not, in and of itself, constitute a default thereunder.
If the Trustee receives written notice from any Bondowner stating that
(i) such Bondowner has been notified in writing by the Internal Revenue
Service that it proposes to include the interest on the Bonds in the gross
income of such owner for federal income tax purposes, or any other
proceeding has been instituted against such owner which may lead to a like
determination, and (ii) such owner will afford the Company the opportunity
to participate at its own expense in the proceeding, either directly or in
the name of such owner, until the conclusion of any appellate review, and
the Trustee has examined such written notice and it appears to be accurate
on its face, then the Trustee shall promptly give notice thereof to the
Company, the Authority, and each Bondowner whose Bonds may be affected.
The Trustee shall thereafter keep itself reasonably informed of the
progress of any administrative proceedings or litigation relating to such
notice. Under the Agreement the Company is required to give the Trustee
written notice of such a final determination within forty-five (45) days of
such final determination.
If less than all of the outstanding Bonds are to be called for redem- ption, the Bonds (or portions thereof) to be redeemed shall be selected as provided in the Agreement with Bonds in the Multiannual Mode being redeemed in units of $5,000.
In the event this bond is selected for redemption, notice will be mailed no more than forty-five (45) nor less than thirty (30) days prior to the redemption date to the REGISTERED OWNER at its address shown on the registration books maintained by the Paying Agent. Failure to mail notice to the owner of any other Bond or any defect in the notice to such an owner shall not affect the redemption of this bond.
If this bond is of a denomination in excess of five thousand dollars ($5,000), portions of the principal amount in the amount of five thousand dollars ($5,000) or any multiple thereof may be redeemed. If less than all of the principal amount is to be redeemed, upon surrender of this bond to the Paying Agent, there will be issued to the REGISTERED OWNER, without charge, a new Bond or Bonds, at the option of the REGISTERED OWNER, for the unredeemed principal amount.
Notice of redemption having been duly mailed, this bond, or the portion called for redemption, will become due and payable on the redemption date at the applicable redemption price and, moneys for the redemption having been deposited with the Paying Agent, from and after the date fixed for redemption, interest on this bond (or such portion) will no longer accrue.
IN CERTAIN CIRCUMSTANCES SET OUT HEREIN, THIS BOND (OR PORTION HEREOF) IS SUBJECT TO PURCHASE OR REDEMPTION. IN EACH SUCH EVENT AND UPON DEPOSIT OF THE PURCHASE OR REDEMPTION PRICE WITH THE PAYING AGENT ON THE PURCHASE OR REDEMPTION DATE, AS THE CASE MAY BE, THIS BOND (OR PORTION HEREOF) SHALL CEASE TO BE DEEMED TO BE OUTSTANDING UNDER THE AGREEMENT, INTEREST HEREON SHALL CEASE TO ACCRUE AS OF THE PURCHASE OR REDEMPTION DATE, AND THE REGISTERED OWNER HEREOF SHALL BE ENTITLED ONLY TO RECEIVE THE PURCHASE OR REDEMPTION PRICE SO DEPOSITED WITH THE PAYING AGENT ONLY UPON SURRENDER OF THIS CERTIFICATE TO THE PAYING AGENT.
This bond is transferable by the REGISTERED OWNER, in person or by its attorney duly authorized in writing, at the office of the Paying Agent, upon surrender of this bond to the Paying Agent for cancellation. Upon the transfer, a new Bond or Bonds in authorized denominations of the same aggregate principal amount will be issued to the transferee at the same office. No transfer will be effective unless represented by such surrender and reissue. This bond may also be exchanged at the office of the Paying Agent for a new Bond or Bonds in authorized denominations of the same aggregate principal amount without transfer to a new registered owner. Exchanges and transfers will be without expense to the owner except for applicable taxes or other governmental charges, if any. The Paying Agent will not be required to make an exchange or transfer of this bond (except in connection with any optional or mandatory tender of this bond) (i) if this bond (or any portion thereof) has been selected for redemption or (ii) during the fifteen (15) days preceding any date fixed for selection for redemption if this bond (or any portion thereof) is eligible to be selected for redemption.
The Bonds are issuable only in fully registered form in denominations of five thousand dollars ($5,000) or any multiple thereof.
The Authority, the Trustee, the Paying Agent and the Company may treat the REGISTERED OWNER as the absolute owner of this bond for all purposes, notwithstanding any notice to the contrary.
No director, officer, employee or agent of the Authority nor any person executing this bond (by facsimile signature or otherwise) shall be personally liable, either jointly or severally, hereon or be subject to any personal liability or accountability by reason of the issuance hereof.
This bond will not be valid until the Certificate of Authentication has been signed by the Trustee or the Paying Agent.
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND ON THE BACK,
WHICH HAVE THE SAME EFFECT AS IF SET FORTH HERE.
BUSINESS FINANCE AUTHORITY
OF THE STATE OF NEW HAMPSHIRE
(Seal)
By:________________________________
Title:
By:________________________________ Title:
Certificate of Authentication
This bond is one of the Bonds described in the Agreement.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
Date of Registration: By:____________________________, or
Authorized Signature
By: _____________________________, as Paying
Agent
By: __________________________
Authorized Signature
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Assignment
For value received the undersigned sells, assigns and transfers this bond to
and irrevocably appoints ________________________________ attorney-in-fact to transfer it on the books kept for registration of the bond, with full power of substitution.
Dated:
Signature Guaranteed:
By:_________________________________
Authorized Signature
The following abbreviations, when used in the inscription on the face of this bond, shall be construed as though they were written out in full according to applicable law.
TEN COM - as tenants in common UNIF GIFT MIN ACT -
TEN ENT - as tenants by the entirety ______ Custodian _______
JT TEN - as joint tenants with rights (Cust) (Minor)
of survivorship and not as
tenants in common
Act ____________________
(State)
Additional abbreviations may also be used though not set forth in the list above.
(d) Form of Fixed Rate Bond. The 1993 Series E Bonds may be issued in the Fixed Rate Mode in substantially the form prescribed below.
$____________ No. R-
UNITED STATES OF AMERICA
STATE OF NEW HAMPSHIRE
BUSINESS FINANCE AUTHORITY
OF THE STATE OF NEW HAMPSHIRE
Pollution Control Refunding Revenue Bond (Public Service Company of New Hampshire Project - 1993 Tax-Exempt Series E)
INTEREST RATE: CUSIP:
MATURITY DATE: May 1, 2021
DATE OF THIS BOND:
(Date as of which Bonds of this
series were initially issued.)
INTEREST PAYMENT DATES: May 1 and November 1 (but not before ______, ____)
REGISTERED OWNER:
PRINCIPAL AMOUNT: DOLLARS
THIS BOND DOES NOT CONSTITUTE AN INDEBTEDNESS OF THE STATE OF NEW HAMPSHIRE OR OF THE AUTHORITY EXCEPT TO THE EXTENT PERMITTED BY NEW HAMPSHIRE RSA CHAPTER 162-I. ALL AMOUNTS OWED HEREUNDER ARE PAYABLE ONLY FROM THE SOURCES PROVIDED IN THE LOAN AND TRUST AGREEMENT DESCRIBED BELOW, AND NO PUBLIC FUNDS MAY BE USED FOR THAT PURPOSE.
The Business Finance Authority of the State of New Hampshire (the "Authority"), for value received promises to pay to the REGISTERED OWNER, or registered assigns, but solely from the moneys to be provided under the Agreement mentioned below, upon presentation and surrender hereof, in lawful money of the United States of America, the PRINCIPAL AMOUNT on the MATURITY DATE, unless paid earlier as provided below, with interest (computed on the basis of a 360-day year consisting of twelve 30-day months) from the most recent INTEREST PAYMENT DATE to which interest has been paid or duly provided for or, if no interest has been paid, from the DATE OF THIS BOND, at the INTEREST RATE per annum, payable semiannually on the INTEREST PAYMENT DATES, until the date on which this bond becomes due, whether at maturity or by acceleration or redemption. From and after that date, any unpaid principal will bear interest at the same rate until paid or duly provided for. The principal and premium, if any, of this bond is payable in clearinghouse funds at the office of _____________________________, as Paying Agent (with its successors, the "Paying Agent"). Interest is payable by check or draft in clearinghouse funds mailed by the Paying Agent to the REGISTERED OWNER of this bond (or of one or more predecessor or successor Bonds (as defined below)), determined as of the close of business on the applicable record date, at its address as shown on the registration books maintained by the Paying Agent. If any payment, redemption or maturity date for principal, premium or interest shall be (i) a Sunday or a legal holiday, or (ii) a day on which banking institutions are authorized pursuant to law to close and on which the corporate trust office of the Trustee or the First Mortgage Bond Trustee is not open for business, then the payment thereof may be made on the next succeeding day not a day specified in (i) or (ii) with the same force and effect as if made on the specified payment date and no interest shall accrue for the period after the specified payment date.
The record date for payment of interest is the fifteenth day of the month preceding the date on which the interest is to be paid, provided that, with respect to overdue interest or interest payable on redemption of this bond other than on an INTEREST PAYMENT DATE or interest on any overdue amount, the Trustee (as defined below) may establish a special record date. The special record date may be not more than thirty (30) days before the date set for payment. The Paying Agent will mail notice of a special record date to the registered owners of the Bonds (the "Bondowners") at least ten (10) days before the special record date. The Paying Agent will promptly certify to the Authority and the Trustee that it has mailed such notice to all Bondowners, and such certificate will be conclusive evidence that such notice was given in the manner required hereby.
This bond is one of a series of Pollution Control Refunding Revenue Bonds (Public Service Company of New Hampshire Project - 1993 Tax-Exempt Series E) (the "Bonds") in the aggregate principal amount of $44,800,000 issued under New Hampshire RSA Chapter 162-I (the "Act"). The proceeds of the Bonds are being loaned to Public Service Company of New Hampshire (the "Company"), a New Hampshire corporation, pursuant to a Series E Loan and Trust Agreement dated as of May 1, 1991, as supplemented and amended by a First Supplement dated as of December 1, 1993 (the "Agreement") among the Company, the Authority and State Street Bank and Trust Company, as Trustee (the "Trustee") to refund a like principal amount of the Authority's $114,500,000 Pollution Control Revenue Bonds (Public Service Company of New Hampshire Project - 1991 Taxable Series E) (the "1991 Bonds"), which were originally issued to finance certain costs associated with the Company's ownership interest in air or water pollution control and sewage or solid waste disposal facilities installed for use by Unit No. 1 at the nuclear electric generating station (the "Station") in Seabrook, New Hampshire (the "Project Facilities"). Pursuant to the Agreement, the Company has unconditionally agreed to repay such loan in the amounts and at the times necessary to pay the principal of, premium, if any, and interest on the Bonds when due. To evidence and secure such loan and the Company's reimbursement and certain other obligations, if any, under the Reimbursement Agreement (as defined in the Agreement), the Company has issued and delivered to the Trustee its First Mortgage Bonds, Series G (the "Series G First Mortgage Bonds") issued under the First Mortgage Indenture dated as of August 15, 1978, as amended, and the Tenth Supplemental Indenture thereto dated as of May 1, 1991 between the Company and First Fidelity Bank, National Association, New Jersey, as Trustee (as amended and supplemented from time to time, the "First Mortgage Bond Indenture") in an aggregate principal amount, and with an interest rate, maturity date and redemption provisions corresponding to those of the Bonds and certain other bonds issued under the Agreement, including the 1991 Bonds. As provided in the Agreement, payments of principal of, and premium, if any, and interest on the Series G First Mortgage Bonds shall, upon receipt by the Trustee, be deemed to constitute payments in corresponding amounts by the Company in respect of the Bonds and certain other bonds issued under the Agreement, including the 1991 Bonds. Reference is hereby made to the Agreement for the provisions thereof with respect to the rights, limitations of rights, duties, obligations and immunities of the Company, the Authority, the Trustee, the Paying Agent, and the Bondowners, including the order of payments in the event of insufficient funds, the disposition of unclaimed moneys held by the Trustee and restrictions on the rights of owners of the Bonds to bring suit. The Agreement may be amended to the extent and in the manner provided therein. Copies of the Agreement are available for inspection at the corporate trust office of the Trustee.
In case any Event of Default (as defined in the Agreement) occurs and is continuing, the principal amount of this bond together with accrued interest may be declared due and payable in the manner and with the effect provided in the Agreement.
The Bonds are redeemable pursuant to the Agreement prior to maturity beginning on _________, ____, at the option of the Authority by direction of the Company, as a whole or in part at any time, at the following prices expressed in percentages of their principal amount, plus accrued interest to the redemption date:
Period During Which Redeemed Redemption Price
%
[Table to be prepared upon Fixed Rate conversion. The table shall be based on redemption schedule established for the bond in the Multiannual Mode.]
In addition, at the option of the Company, this bond is subject to redemption prior to maturity at 100% of the principal amount thereof, plus accrued interest to the redemption date within nine (9) months of the occurrence of certain extraordinary events consisting of (a) damage or destruction, or loss of title by eminent domain, to the Station or the Project Facilities, (b) changes in law affecting the enforceability of the Agreement or imposing unreasonable burdens or excessive liabilities on the Company relating to the Station or the Project Facilities or their operation, (c) the enjoining or prohibiting of the operation of the Station or the Project Facilities, or (d) changes in the economic availability of fuel, materials, supplies, labor, equipment or other properties or things rendering the continued operation of the Station uneconomical, all as more fully described in the Agreement. The Company's right to direct the redemption of this bond upon the occurrence of any event listed above shall expire six (6) months after such event occurs.
The Bonds are subject to mandatory redemption at any time at a redemption price of 100% of the principal amount of the Bonds so redeemed plus accrued interest in the event (i) the Company delivers to the Trustee an opinion of nationally recognized bond counsel selected by the Company and reasonably satisfactory to the Trustee ("Bond Counsel") stating that interest on the Bonds is or will become includable in gross income of the owners thereof for federal income tax purposes, or (ii) it is finally determined by the Internal Revenue Service or a court of competent jurisdiction, as a result of (A) a proceeding in which the Company has participated or been given notice and an opportunity to participate, and, (B) either (1) a failure by the Company (or the Seabrook Transferee as defined in the Agreement) to observe any covenant or agreement undertaken in or pursuant to the Agreement, or the inaccuracy of any representation made by the Company (or the Seabrook Transferee) in or pursuant to the Agreement, or (2) the Seabrook Transfer (as defined in the Agreement), that interest payable on the Bonds is includable for federal income tax purposes in the gross income of any owner thereof (other than an owner which is a "substantial user" or a "related person" within the meaning of Section 147(a) of the Internal Revenue Code of 1986). Any determination under clause (ii) above will not be considered final for this purpose until the earliest of the conclusion of any appellate review, the denial of appellate review or the expiration of the period for seeking appellate review. Redemption under this paragraph shall be in whole unless not less than forty-five (45) days prior to the redemption date the Company delivers to the Trustee an opinion of Bond Counsel reasonably satisfactory to the Trustee to the effect that a redemption of less than all of the Bonds will preserve the tax-exempt status of interest on the remaining Bonds outstanding subsequent to such redemption. Except as provided in the next sentence, any such redemption shall be made on the 90th day after the date on which the opinion described in clause (i) is delivered or the determination described in clause (ii) becomes final or on such earlier date as the Company may designate by notice given to the Trustee at least forty-five (45) days prior to such designated date. Any Bond in the Flexible Mode that has a Purchase Date prior to the redemption date established for that Bond pursuant to the preceding sentence shall be redeemed on that Purchase Date. If such redemption shall occur in accordance with the terms of the Agreement, then such failure by the Company (or the Seabrook Transferee as described above) to observe such covenant or agreement, or the inaccuracy of any such representation will not, in and of itself, constitute a default thereunder.
If the Trustee receives written notice from any Bondowner stating that
(i) such Bondowner has been notified in writing by the Internal Revenue
Service that it proposes to include the interest on the Bonds in the gross
income of such owner for federal income tax purposes, or any other
proceeding has been instituted against such owner which may lead to a like
determination, and (ii) such owner will afford the Company the opportunity
to participate at its own expense in the proceeding, either directly or in
the name of such owner, until the conclusion of any appellate review, and
the Trustee has examined such written notice and it appears to be accurate
on its face, then the Trustee shall promptly give notice thereof to the
Company, the Authority, and each Bondowner whose Bonds may be affected.
The Trustee shall thereafter keep itself reasonably informed of the
progress of any administrative proceedings or litigation relating to such
notice. Under the Agreement the Company is required to give the Trustee
written notice of such a final determination within forty-five (45) days of
such final determination.
If less than all of the outstanding Bonds are to be called for redemption, the Bonds (or portions thereof) to be redeemed shall be selected as provided in the Agreement.
In the event this bond is selected for redemption, notice will be mailed no more than forty-five (45) nor less than thirty (30) days prior to the redemption date to the REGISTERED OWNER at its address shown on the registration books maintained by the Paying Agent. Failure to mail notice to the owner of any other Bond or any defect in the notice to such an owner shall not affect the redemption of this bond.
If this bond is of a denomination in excess of five thousand dollars ($5,000), portions of the principal amount in the amount of five thousand dollars ($5,000) or any multiple thereof may be redeemed. If less than all of the principal amount is to be redeemed, upon surrender of this bond to the Paying Agent, there will be issued to the REGISTERED OWNER, without charge, a new Bond or Bonds, at the option of the REGISTERED OWNER, for the unredeemed principal amount.
Notice of redemption having been duly mailed, this bond, or the portion called for redemption, will become due and payable on the redemption date at the applicable redemption price and, moneys for the redemption having been deposited with the Paying Agent, from and after the date fixed for redemption, interest on this bond (or such portion) will no longer accrue.
This bond is transferable by the REGISTERED OWNER, in person or by its attorney duly authorized in writing, at the office of the Paying Agent, upon surrender of this Bond to the Paying Agent for cancellation. Upon the transfer, a new Bond or Bonds in authorized denominations of the same aggregate principal amount will be issued to the transferee at the same office. No transfer will be effective unless represented by such surrender and reissue. This bond may also be exchanged at the office of the Paying Agent for a new Bond or Bonds of the same aggregate principal amount without transfer to a new registered owner. Exchanges and transfers will be without expense to the holder except for applicable taxes or other governmental charges, if any. The Paying Agent will not be required to make an exchange or transfer of this bond during the fifteen (15) days preceding any date fixed for selection for redemption if this bond (or any part thereof) is eligible to be selected or has been selected for the redemption.
This bond is issuable only in fully registered form in the denominations of five thousand dollars ($5,000) or any multiple thereof.
The Authority, the Trustee, the Paying Agent and the Company may treat the REGISTERED OWNER as the absolute owner of this bond for all purposes, notwithstanding any notice to the contrary.
No director, officer, employee or agent of the Authority nor any person executing this bond (by facsimile signature or otherwise) shall be personally liable, either jointly or severally, hereon or be subject to any personal liability or accountability by reason of the issuance hereof.
This bond will not be valid until the Certificate of Authentication has been signed by the Trustee or the Paying Agent.
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND ON THE BACK,
WHICH HAVE THE SAME EFFECT AS IF SET FORTH HERE.
BUSINESS FINANCE AUTHORITY
OF THE STATE OF NEW HAMPSHIRE
(Seal)
By: _____________________________
Title:
By: _____________________________ Title:
Certificate of Authentication
This bond is one of the Bonds described in the Agreement.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
Date of Registration: By:____________________________, or
Authorized Signature
By:_________________________________,
as Paying Agent
By:___________________________
Authorized Signature
|
Assignment
For value received the undersigned sells, assigns and transfers this bond to
and irrevocably appoints ________________________________ attorney-in-fact to transfer it on the books kept for registration of the bond, with full power of substitution.
Dated:
Signature Guaranteed:
By: ________________________________
Authorized Signature
The following abbreviations, when used in the inscription on the face of this bond, shall be construed as though they were written out in full according to applicable law.
TEN COM - as tenants in common UNIF GIFT MIN ACT -
TEN ENT - as tenants by the entirety ______ Custodian _______
JT TEN - as joint tenants with rights (Cust) (Minor)
of survivorship and not as
tenants in common
Act ____________________
(State)
Additional abbreviations may also be used though not set forth in the list above.
Section 302. Details of the 1993 Series E Bonds.
The 1993 Series E Bonds shall be signed on behalf of the Authority by the manual or facsimile signatures of any two of the Chairman, Vice Chairman, Treasurer and Executive Director and the corporate seal of the Authority or a facsimile thereof shall be impressed, engraved or otherwise reproduced thereon. The Certificate of Authentication shall be manually signed by the Trustee or the Paying Agent.
In case any officer whose manual or facsimile signature shall appear on any 1993 Series E Bond shall cease to be such officer before the delivery thereof, such manual or facsimile signature shall nevertheless be valid and sufficient for all purposes as if he or she had remained in office until after such delivery.
The 1993 Series E Bonds shall be issued in fully registered form and shall be numbered from 1 upwards in the order of their issuance, or in any other manner deemed appropriate by the Paying Agent and the Trustee. The 1993 Series E Bonds shall be in the denomination of $100,000 or any multiple of $1,000 in excess of $100,000 in the Flexible Mode, $5,000 or any multiple thereof in the Fixed Rate and Multiannual Modes and $100,000 or any multiple thereof in the Weekly Mode. The 1993 Series E Bonds shall be dated the date of original delivery thereof and shall mature on May 1, 2021. The interest on 1993 Series E Bonds until they come due shall be payable on the interest payment dates applicable to the Mode the Bonds are in from time to time. Interest on overdue principal of any Bond shall bear interest at the rate last established for that Bond before the principal became overdue until duly paid or provided for. All of the 1993 Series E Bonds shall be initially in the Weekly Mode.
The 1993 Series E Bonds are subject to redemption as described in Sections 310 and 405 of the Original Agreement and in the forms of 1993 Series E Bonds.
Section 303. Registration of Bonds in the Book-Entry Only System.
(a) Notwithstanding any provision herein to the contrary, the provisions
of this Subsection 303 and the Representation Letter (as defined below)
shall apply with respect to any 1993 Series E Bond registered to CEDE & CO.
or any other nominee of The Depository Trust Company ("DTC") while the
Book-Entry Only System (meaning the system of registration described in
Section 303) is in effect. The Book-Entry Only System shall be in effect
for any Mode or Rate Period within the Multiannual Mode if so specified by
the Company prior to conversion to that Mode or Rate Period, subject to the
provisions below concerning termination of the Book-Entry Only System.
Until it revokes such specification in its discretion, the Company hereby
specifies that the Book-Entry Only System shall be in effect while the 1993
Series E Bonds are in Weekly, Multiannual and Fixed Rate Modes.
(b) The 1993 Series E Bonds in or to be in the Book-Entry Only System shall be issued in the form of a separate single authenticated fully registered 1993 Series E Bond for each separate Mode or Rate Period in substantially the forms provided for in Section 301. Any legend required to be on the Bonds by DTC may be added by the Trustee or Paying Agent. On the date of original delivery thereof or date of conversion of the 1993 Series E Bonds to a Mode or Rate Period in which the Book-Entry Only System is in effect, as applicable, the 1993 Series E Bonds shall be registered in the registry books of the Paying Agent in the name of CEDE & CO., as nominee of The Depository Trust Company as agent for the Authority in maintaining the Book-Entry Only System. With respect to 1993 Series E Bonds registered in the registry books kept by the Paying Agent in the name of CEDE & CO., as nominee of DTC, the Authority, the Paying Agent, the Company, the Remarketing Agent and the Trustee shall have no responsibility or obligation to any Participant (which means securities brokers and dealers, banks, trust companies, clearing corporations and various other entities, some of whom or their representatives own DTC) or to any Beneficial Owner (which means, when used with reference to the Book-Entry Only System, the person who is considered the beneficial owner of the 1993 Series E Bonds pursuant to the arrangements for book entry determination of ownership applicable to DTC) with respect to the following: (A) the accuracy of the records of DTC, CEDE & CO. or any Participant with respect to any ownership interest in the 1993 Series E Bonds, (B) the delivery to or from any Participant, any Beneficial Owner or any other person, other than DTC, of any notice with respect to the 1993 Series E Bonds, including any notice of redemption or tender (whether mandatory or optional), or (C) the payment to any Participant, any Beneficial Owner or any other person, other than DTC, of any amount with respect to the principal or premium, if any, or interest on the 1993 Series E Bonds. The Paying Agent shall pay all principal of and premium, if any, and interest on the 1993 Series E Bonds only to or upon the order of DTC, and all such payments shall be valid and effective fully to satisfy and discharge the Authority's obligations with respect to the principal of and premium, if any, and interest on 1993 Series E Bonds to the extent of the sum or sums so paid. No person other than DTC shall be entitled to receive an authenticated 1993 Series E Bond evidencing the obligation of the Authority to make payments of principal and premium, if any, and interest pursuant to this Agreement. Upon delivery by DTC to the Paying Agent of written notice to the effect that DTC has determined to substitute a new nominee in place of CEDE & CO., the words "CEDE & CO." in this Agreement shall refer to such new nominee of DTC.
(c) Upon receipt by the Trustee or the Paying Agent of written notice from DTC to the effect that DTC is unable or unwilling to discharge its responsibilities, the Authority shall issue and the Paying Agent shall transfer and exchange 1993 Series E Bonds as requested by DTC in appropriate amounts and in authorized denominations, and whenever DTC requests the Authority, the Paying Agent and the Trustee to do so, the Trustee, the Paying Agent and the Authority will, at the expense of the Company, cooperate with DTC in taking appropriate action after reasonable notice (A) to arrange for a substitute bond depository willing and able upon reasonable and customary terms to maintain custody of the 1993 Series E Bonds or (B) to make available for transfer and exchange 1993 Series E Bonds registered in whatever name or names and in whatever authorized denominations as DTC shall designate.
(d) In the event the Company determines that the Beneficial Owners should be able to obtain 1993 Series E Bond certificates, the Company may so notify DTC, the Paying Agent and the Trustee, whereupon DTC will notify the Participants of the availability through DTC of 1993 Series E Bond certificates. In such event, the Authority shall issue and the Paying Agent shall transfer and exchange 1993 Series E Bond certificates as requested by DTC in appropriate amounts and in authorized denominations. Whenever DTC requests the Paying Agent to do so, the Paying Agent will cooperate with DTC in taking appropriate action after reasonable notice to make available for transfer and exchange 1993 Series E Bonds registered in whatever name or names and in whatever authorized denominations as DTC shall designate.
(e) Notwithstanding any other provision of the Agreement to the contrary, so long as any 1993 Series E Bond is registered in the name of CEDE & CO., as nominee of DTC, all payments with respect to the principal of, Purchase Price, premium, if any, and interest on such 1993 Series E Bond and all notices with respect to such 1993 Series E Bond shall be made and given, respectively, to DTC as provided in the Letter of Representation (the "Representation Letter"), the form of which is included as Exhibit A attached to this First Supplement. The form of such Representation Letter may be modified in a manner consistent with the provisions of the Agreement upon conversion or reconversion of the 1993 Series E Bonds to a Mode or Rate Period in which the Book-Entry Only System is in effect.
(f) Notwithstanding any provision in Subsection 301(h) or Section 310 of the Original Agreement to the contrary, so long as any of the 1993 Series E Bonds outstanding are held in the Book-Entry Only System, if less than all of such 1993 Series E Bonds are to be converted or redeemed upon any conversion or redemption of 1993 Series E Bonds hereunder, the particular 1993 Series E Bonds or portions of 1993 Series E Bonds to be converted or redeemed shall be selected by DTC in such manner as DTC may determine.
(g) So long as the Book-Entry Only System is in effect, a Beneficial Owner who elects to have its 1993 Series E Bonds purchased or tendered pursuant to the Agreement shall effect delivery by causing a Participant to transfer the Beneficial Owner's interest in the 1993 Series E Bonds pursuant to the Book-Entry Only System. The requirement for physical delivery of 1993 Series E Bonds in connection with a demand for purchase or a mandatory purchase will be deemed satisfied when the ownership rights in the 1993 Series E Bonds are transferred in accordance with the Book-Entry Only System.
(h) So long as the Book-Entry Only System is in effect, the Remarketing Agent shall communicate to DTC information concerning the purchasers of Tendered Bonds as may be necessary or appropriate, and, notwithstanding any provision in the Representation Letter to the contrary, the Remarketing Agent shall continue to remit to the Paying Agent interest rate determination information pursuant to the terms of this Agreement.
Section 304. Application of 1993 Series E Bond Proceeds. The Authority shall loan the proceeds of the 1993 Series E Bonds to the Company by promptly causing (A) an amount equal to the accrued interest, if any, to be deposited in the Bond Fund and (B) $44,800,000 to be deposited with the Trustee, in each case in immediately available funds. Upon receipt by the Paying Agent in respect of a drawing on the Letter of Credit of an amount necessary to pay the Purchase Price due on $44,800,000 principal amount of 1991 Series E Bonds, the Paying Agent shall immediately notify the Trustee that it has received sufficient draw proceeds to pay such Purchase Price, and upon the Trustee's receipt of such notice the Trustee shall pay to the Bank the $44,800,000 deposited with the Trustee by the Authority under clause (B) of this section as partial reimbursement for such drawing. If the Trustee receives such notice from the Paying Agent before 12:00 Noon on any Business Day it shall transmit a payment order for the above-described payment by wire transfer in immediately available funds to the Bank by 2:30 P.M. on the same day, and if the Trustee receives such notice after 12:00 Noon it shall make such payment by wire transfer in immediately available funds to the Bank by 11:00 A.M. on the next Business Day. In connection with the reimbursement of the Bank, the Company represents and warrants that (i) not less than 95% of the proceeds of the 1991 Series E Bonds were spent to reimburse the Company for Project Costs; (ii) such Project Costs were incurred by and were chargeable to the capital account of the Company; (iii) such Project Costs were costs of "sewage or solid waste disposal facilities" or "air or water pollution control facilities" within the meaning of Section 103(b)(4)(E) or (F) of the 1954 Code incurred and paid after January 14, 1976; (iv) such Project Costs were for an "industrial facility" within the meaning of Paragraphs 2, VII (d) and (e) of the Act; and (v) such Project Costs were costs of a facility described in Section 1312(a) of the Tax Reform Act of 1986.
Section 305. Maximum Interest Rate for 1993 Series E Bonds. The Maximum Interest Rate for the 1993 Series E Bonds shall be initially 12% per annum, subject to adjustment as provided in Paragraph 102(a)(33) of the Original Agreement.
Section 306. Additional Limitations on Conversions to New Modes.
(a) Conversions to Multiannual Mode. 1993 Series E Bonds converted to the Multiannual Mode shall not be supported by a Credit Facility.
(b) Conversions from Multiannual Mode to Flexible or Weekly Mode. Any Bank issuing a Credit Facility in connection with a conversion of 1993 Series E Bonds from the Multiannual Mode to the Flexible or Weekly Mode shall have a long-term corporate debt rating of Aa from Moody's or AA from S&P, or their equivalent.
Section 307. Subsection 310(c) of Original Agreement Amended. Subsection 310(c) of the Original Agreement is amended to read as follows:
(c) Notice by the Company. The Company shall exercise its option to have Bonds redeemed under Subsection 310(a) or (b) by giving notice to the Trustee, the Authority, the Paying Agent, and the Remarketing Agent at least five (5) days before the redemption date in the case of Bonds in the Flexible Mode, and forty-five (45) days before the redemption date in the case of Bonds in any other Mode.
Section 308. Subsection 310(e) of Original Agreement Amended. Subsection 310(e) of the Original Agreement is amended to read as follows:
(e) Notice of Redemption. When Bonds are to be redeemed, the Paying Agent shall give notice to the Bondowners in the name of the Authority, which notice shall identify the Bonds to be redeemed, state the date fixed for redemption and specify the office of the Paying Agent at which such Bonds will be redeemed. The notice shall further state that on such date there shall become due and payable upon each Bond to be redeemed the redemption price thereof, together with interest accrued to the redemption date, and that moneys therefor having been deposited with the Paying Agent, from and after such date, interest thereon shall cease to accrue and that the Bonds or portions thereof called for redemption shall cease to be entitled to any benefit under this Agreement except the right to receive payment of the redemption price. The Paying Agent shall mail the redemption notice the number of days prior to the date fixed for redemption provided in the forms of Bond for the Mode the Bonds are in, to the registered owners of any Bonds which are to be redeemed, at their addresses shown on the registration books maintained by the Paying Agent. Failure to mail notice to a particular Bondowner, or any defect in the notice to such Bondowner, shall not affect the redemption of any other Bond. No notice shall be given of redemption of Bonds in the Flexible Mode, except for such redemption pursuant to Section 405 as and when provided in the form of Flexible Bonds.
Section 309. Tax Status of 1993 Series E Bonds. The Company will perform its obligations and agreements contained in the First Supplemental Federal Tax Statement as if they were set forth herein. All representations of the Company in the First Supplemental Federal Tax Statement shall be treated as if they were set forth herein. Any covenants, agreements or representations made by the Company or the Seabrook Transferee in the Assumption Agreement shall be performed and treated as if set forth herein.
Section 310. Amendment of Credit Facility.
(a) Issuance of Amended and Restated Credit Facility. Contemporaneously with the issuance of the 1993 Series E Bonds, the Company shall cause the irrevocable letter of credit No. NY0389-30008830 of Citibank, N.A. in the maximum aggregate amount of $121,014,000 issued to the Paying Agent to be amended by the delivery to the Paying Agent of an amended and restated Letter of Credit substantially in the form attached as Exhibit II to the Pentagonal Agreement dated as of December 1, 1993 among the Company, the Trustee, the Paying Agent, the Remarketing Agent and the Bank, and shall cause to be delivered to the Trustee, the Authority and the Paying Agent an opinion or opinions of counsel for the issuer of such letter of credit substantially to the effect that such letter of credit, as amended and restated, is a legal, valid and binding obligation of the issuer enforceable in accordance with its terms.
Paragraph 102(a)(13) of Original Agreement Amended. The definition of the term "Credit Facility" appearing in Paragraph 102(a)(13) of the Original Agreement shall be amended by the addition of the following phrase at the end of the first sentence thereof:
", as each may be amended from time to time pursuant to the terms of this Agreement or any amendment or supplement to this Agreement."
Section 311. Subsection 301(e) of Original Agreement Amended.
(a) Paragraph 301(e)(ii) Amended. The first sentence of Paragraph 301(e)(ii) of the Original Agreement is amended by striking the phrase "any Effective Date" and inserting in lieu thereof "the first Business Day of any calendar month."
(b) Subparagraph 301(e)(iv)(A) Amended. The last sentence of Subparagraph 301(e)(iv)(A) of the Original Agreement is amended to read as follows:
At least forty (40) days prior to the mandatory tender date, the Trustee shall give notice to the Paying Agent as to whether or not it has received the notices described in the immediately preceding sentence from Moody's and S&P, and if the Trustee has not received such notices or if the Credit Facility is expiring without substitution or replacement, the Paying Agent shall give notice to the Bondowners of the mandatory tender of the Bonds at least thirty (30) days prior to the mandatory tender date.
Section 312. Subsection 308(c) of Original Agreement Amended.
(a) Paragraph 308(c)(i) Amended. The first sentence of Paragraph 308(c)(i) of the Original Agreement is amended by inserting after the phrase "whether at maturity," and before the phrase "by acceleration," the phrase "on an interest payment date,".
(b) Paragraph 308(c)(iii) of Original Agreement Amended. Paragraph 308(c)(iii) of the Original Agreement is amended to read as follows:
(iii) Use of Credit Facility. All amounts received by the Paying Agent under any Credit Facility shall be held in a fund separate and apart from all other amounts held by the Paying Agent, shall remain uninvested and used solely to pay the Purchase Price or principal of, premium, if any, and interest on the Bonds for which the Credit Facility is available. Principal and Purchase Price of, premium, if any, and interest on Company Bonds, Pledged Bonds and Bonds not supported by a Credit Facility shall not be paid from amounts drawn on a Credit Facility.
(c) Paragraph 308(c)(iv) Added to Original Agreement. A new Paragraph 308(c)(iv) is added to the Original Agreement, which shall read as follows:
(iv) Failed Conversion. Whenever there is a failed
conversion of Bonds supported by a Credit Facility, the Paying
Agent shall draw on the Credit Facility as provided in Paragraph
301(d)(ii), 301(e)(ii) or 301(f)(ii), as appropriate.
Section 313. Subsection 311(c) Added. A new Subsection 311(c) is added to the Original Agreement, which shall read as follows:
(c) Commencement of New Mode or Rate Period. Whenever Bonds in the Flexible or Multiannual Mode are subject to mandatory tender for purchase on an Effective Date, the new Rate Period for the Bonds (including a new Rate Period in a new Mode) shall commence immediately upon the Bonds becoming subject to mandatory tender for purchase.
Section 314. Subsection 312(a) Amended. The fifth sentence of the second paragraph of Subsection 312(a) is amended to read as follows:
Upon receipt by the Paying Agent of notice from the Remarketing Agent that a purchaser has been found for Pledged Bonds or Company Bonds held by the Paying Agent, the Paying Agent shall register and deliver such Bonds to such purchaser (at which time such Bonds shall cease to be Pledged Bonds or Company Bonds) upon receipt by the Paying Agent of the Purchase Price of such Bonds, provided, however, that no Pledged Bond or Company Bond shall be so registered and delivered unless the Paying Agent has received from the Bank a written notice of the reinstatement of the principal and interest component of the Credit Facility, or if prior to or simultaneously with such registration or delivery, the amount available to be drawn under the Credit Facility is otherwise less than the amount described in Paragraph 317(b)(ii) determined as if Bonds which are to continue as Pledged Bonds were not Outstanding.
Section 315. Section 405 of Original Agreement Amended. Section 405 of the Original Agreement is amended by adding at the end thereof the following sentence:
At least forty (40) days prior to any redemption pursuant to this
Section 405, the Trustee shall notify the Paying Agent of the
redemption date and the principal amount of Tax-Exempt Refunding
Bonds to be redeemed.
ARTICLE IV: MISCELLANEOUS
Section 401. Original Agreement Affirmed. Except as otherwise expressly supplemented and amended by this First Supplement, the provisions of the Original Agreement and the Assumption Agreement remain unchanged, binding, and in full force and effect.
Section 402. Company's Agreement to Chapter 263. To the extent
required by 1993 New Hampshire Laws 263:4, the Company agrees to the
provisions of 1993 New Hampshire Laws 263:2 and 3. The Company further
agrees that it shall apply 100% of the savings that result from the
issuance of the 1993 Series E Bonds and that are generated until the end of
the fixed rate period (within the meaning of 1993 New Hampshire Laws 263:2,
I) pursuant to an investment plan approved by the New Hampshire Public
Utilities Commission under which the Company shall make expenditures for
one or all of the purposes described in 1993 New Hampshire Laws 263:2,
I(a)-(c).
Section 403. Severability. In the event that any provision of this First Supplement shall be held to be invalid in any circumstance, such invalidity shall not affect any other provisions or circumstances.
Section 404. Counterparts. This First Supplement may be executed and delivered in any number of counterparts, each of which shall be deemed to be an original, but such counterparts together shall constitute one and the same instrument.
Section 405. Receipt of Documents. By its execution and delivery of this First Supplement the Trustee acknowledges receipt of the items listed in Section 402 of the Original Agreement as conditions precedent to the authentication of the 1993 Series E Bonds and the opinion of Bond Counsel required to accompany this First Supplement pursuant to Subsection 1101(c) of the Original Agreement.
Section 406. Captions. The captions and table of contents of this First Supplement are for convenience only and shall not affect the construction hereof.
Section 407. Governing Law. This instrument shall be governed by the laws of State of New Hampshire.
IN WITNESS WHEREOF, the Business Finance Authority of the State of New Hampshire has caused this Agreement to be signed and its official seal to be impressed hereon by its Executive Director; Public Service Company of New Hampshire has caused this Agreement to be signed and its corporate seal to be impressed hereon by an authorized officer; and State Street Bank and Trust Company, as Trustee, has caused this Agreement to be signed and its corporate seal to be impressed hereon by an authorized officer.
BUSINESS FINANCE AUTHORITY OF THE STATE OF
NEW HAMPSHIRE
(Seal)
By:______________________________ Jack Donovan Executive Director
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
(Seal)
By:______________________________ John B. Keane Treasurer
STATE STREET BANK AND TRUST COMPANY,
as Trustee
(Seal)
By:/s/ Daniel Golden
Daniel Golden
Assistant Vice President
|
The undersigned hereby consents
to this First Supplement.
CITIBANK, N.A.
By: /s/Paul T. Addison_
Paul T. Addison
Vice President
|
Exhibit 4.3.9
SERIES D LETTER OF CREDIT
AND REIMBURSEMENT AGREEMENT
Dated as of October 1, 1992
Among
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
as Account Party
BARCLAYS BANK PLC, NEW YORK BRANCH
as Issuing Bank and as Agent
and
THE PARTICIPATING BANKS
REFERRED TO HEREIN
Relating to
The Industrial Development Authority of the State of New Hampshire Pollution Control Revenue Bonds (Public Service Company of New Hampshire Project - 1991 Taxable Series D)
TABLE OF CONTENTS
Section Page
PRELIMINARY STATEMENT
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01 Certain Defined Terms. . . . . . . . . . . . . . .3
1.02 Computation of Time Periods. . . . . . . . . . . 21
1.03 Accounting Terms . . . . . . . . . . . . . . . . 21
1.04 Computations of Outstandings . . . . . . . . . . 22
ARTICLE II
THE LETTER OF CREDIT
2.01 The Letter of Credit . . . . . . . . . . . . . . 22
2.02 Termination of the Commitments . . . . . . . . . 22
2.03 Commissions and Fees . . . . . . . . . . . . . . 22
2.04 Reinstatement of the Letter of Credit. . . . . . 23
2.05 Extension of the Stated Termination Date . . . . 24
2.06 Modification of the Letter of Credit . . . . . . 25
ARTICLE III
REIMBURSEMENT AND ADVANCES
3.01 Reimbursement on Demand . . . . . . . . . . . . 26
3.02 Advances . . . . . . . . . . . . . . . . . . . . 26
3.03 Interest on Advances . . . . . . . . . . . . . . 27
3.04 Conversion of Term Advances . . . . . . . . . . 29
3.05 Other Terms Relating to the
Making and Conversion of Advances . . . . . 30
3.06 Prepayment of Advances . . . . . . . . . . . . . 31
3.07 Participation; Reimbursement of Issuing Bank . . 31
ARTICLE IV
PAYMENTS
4.01 Payments and Computations. . . . . . . . . . . . 34
4.02 Default Interest . . . . . . . . . . . . . . . . 36
4.03 Yield Protection . . . . . . . . . . . . . . . . 36
4.04 Sharing of Payments, Etc.. . . . . . . . . . . . 41
4.05 Taxes. . . . . . . . . . . . . . . . . . . . . . 41
4.06 Obligations Absolute . . . . . . . . . . . . . . 44
4.07 Evidence of Indebtedness . . . . . . . . . . . . 45
ARTICLE V
CONDITIONS PRECEDENT
5.01 Conditions Precedent to the Issuance of
the Letter of Credit. . . . . . . . . . . . . . 45
5.02 Additional Conditions Precedent to the
Issuance of Letter of Credit . . . . . . . . . 53
5.03 Conditions Precedent to Initial Advances
and Conversions of Advances . . . . . . . . . . 54
5.04 Conditions Precedent to Term Advances. . . . . . 54
5.05 Reliance on Certificates . . . . . . . . . . . . 55
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.01 Representations and Warranties of the
Account Party . . . . . . . . . . . . . . . . . 55
ARTICLE VII
COVENANTS OF THE ACCOUNT PARTY
7.01 Affirmative Covenants. . . . . . . . . . . . . . 59
7.02 Negative Covenants . . . . . . . . . . . . . . . 62
7.03 Reporting Obligations. . . . . . . . . . . . . . 67
ARTICLE VIII
DEFAULTS
8.01 Events of Default. . . . . . . . . . . . . . . . 72
8.02 Remedies Upon Events of Default. . . . . . . . . 75
8.03 Issuing Bank to Notify First Mortgage
Trustee, Others. . . . . . . . . . . . . . . . . 76
ARTICLE IX
THE AGENT, THE PARTICIPATING BANKS
AND THE ISSUING BANK
9.01 Authorization of Agent; Actions of Agent
and Issuing Bank. . . . . . . . . . . . . . . . 77
9.02 Reliance, Etc. . . . . . . . . . . . . . . . . . 77
9.03 The Agent, the Issuing Bank and Affiliates . . . 78
9.04 Participating Bank Credit Decision . . . . . . . 78
9.05 Indemnification. . . . . . . . . . . . . . . . . 79
9.06 Successor Agent. . . . . . . . . . . . . . . . . 79
9.07 Issuing Bank . . . . . . . . . . . . . . . . . . 80
ARTICLE X
MISCELLANEOUS
10.01 Amendments, Etc. . . . . . . . . . . . . . . . . 80
10.02 Notices, Etc.. . . . . . . . . . . . . . . . . . 81
10.03 No Waiver of Remedies. . . . . . . . . . . . . . 82
10.04 Costs, Expenses and Indemnification. . . . . . . 82
10.05 Right of Set-Off . . . . . . . . . . . . . . . . 84
10.06 Binding Effect; Assignments and Participants . . 85
10.07 Relation of the Parties; No Beneficiary. . . . . 86
10.08 Issuing Bank Not Liable . . . . . . . . . . . . 86
10.09 Confidentiality. . . . . . . . . . . . . . . . . 87
10.10 Waiver of Jury Trial . . . . . . . . . . . . . . 88
10.11 Governing Law. . . . . . . . . . . . . . . . . . 88
10.12 Execution in Counterparts. . . . . . . . . . . . 89
|
SCHEDULES
Schedule I - Applicable Lending Offices Schedule II - [Reserved] Schedule III - Investments Schedule IV - Pending Actions |
EXHIBITS
Exhibit 1.01A - Form of Letter of Credit
Exhibit 1.01B - Form of Participation Assignment
Exhibit 1.01C - Form of Pledge Amendment
Exhibit 5.01A - Form of Opinion of Day, Berry & Howard,
counsel to the Account Party
Exhibit 5.01B - Form of Opinion of Rath, Young, Pignatelli and Oyer,
P.A., special New Hampshire counsel to the Account
Party
Exhibit 5.01C - Form of Opinion of Pierre O. Caron,
Assistant General Counsel of the Account Party
Exhibit 5.01D - Form of Opinion of Drummond Woodsum Plimpton &
MacMahon, special Maine counsel to the Account Party
Exhibit 5.01E - Form of Opinion of Zuccaro Willis & Bent, special
Vermont counsel to the Account Party
Exhibit 5.01F - Form of Opinion of Porter & Travers,
counsel to the Agent and the Issuing Bank
SERIES D LETTER OF CREDIT
AND REIMBURSEMENT AGREEMENT
|
Dated as of October 1, 1992
THIS SERIES D LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
(this "Agreement") is made by and among:
(1) Public Service Company of New Hampshire, a corporation duly organized and validly existing under the laws of the State of New Hampshire (the "Account Party");
(2) Barclays Bank PLC, New York Branch ("Barclays"), as issuer of the Letter of Credit (the "Issuing Bank");
(3) The Participating Banks (as hereinafter defined) from time to time party hereto; and
(4) Barclays as agent (together with any successor agent hereunder, the "Agent") for such Participating Banks and the Issuing Bank.
PRELIMINARY STATEMENT
The Account Party was previously reorganized under Chapter 11 of the Bankruptcy Code pursuant to that certain Third Amended Joint Plan of Reorganization of the Account Party, dated December 28, 1989 (the "Plan") as confirmed by order of the United States Bankruptcy Court for the District of New Hampshire (the "Bankruptcy Court") on April 20, 1990. Such reorganization (the "Reorganization") became effective on May 16, 1991 (the "Plan Effective Date"). Terms used herein are defined in Section 1.01, below.
In order to finance the Reorganization, the Account Party entered into the following agreements (collectively, the "Financing Agreements"):
(i) a $452,000,000 Term Credit Agreement among the Account Party, the Banks and Co-Agents named therein and Citibank, N.A., as Administrative Agent; and
(ii) a $200,000,000 Revolving Credit Agreement among the Account Party, the Banks and Co-Agents named therein, and Chemical Bank, as Administrative Agent.
In addition to the Financing Agreements, the following additional sources of capital were utilized by the Account Party:
(x) the issuance and sale of First Mortgage Bonds (including First Mortgage Bonds securing the Bonds referred to hereinafter and First Mortgage Bonds securing other Pollution Control Revenue Bonds of the Issuer for which the Account Party is liable) in an aggregate principal amount of $858,985,000 (the "Initial First Mortgage Bonds"); and
(y) the issuance and sale of $125,000,000 of Preferred Stock of the Account Party.
Additionally, the Account Party has become bound by, and is entitled to the full rights and benefits of, the Rate Agreement (subject to any Governmental Approvals required from time to time as contemplated thereby) and has entered into the other Significant Contracts in connection with the effectiveness of the Plan and the Merger.
The Business Finance Authority (formerly The Industrial Development Authority) of the State of New Hampshire (the "Issuer") has issued, pursuant to a Series D Loan and Trust Agreement, dated as of May 1, 1991 (as supplemented or amended from time to time with the written consent of the Issuing Bank, the "Indenture"), by and among the Issuer, the Account Party and State Street Bank and Trust Company, as trustee (such entity, or its successor as trustee, being the "Trustee"), $114,500,000 aggregate principal amount of The Industrial Development Authority of the State of New Hampshire Pollution Control Revenue Bonds (Public Service Company of New Hampshire Project - 1991 Taxable Series D) (such Bonds, together with any Tax-Exempt Refunding Bonds (as defined in the Indenture) issued to refund such bonds as provided in Article IV of the Indenture, being hereinafter referred to, collectively, as the "Bonds") and, pursuant to the Indenture, the Account Party has previously caused Citibank, N.A. ("Citibank") to issue the letter of credit referred to therein in favor of the Paying Agent.
The Account Party now wishes to substitute a letter of credit issued by the Issuing Bank for the letter of credit previously issued by Citibank, and, in furtherance thereof, the Account Party has requested the Issuing Bank to issue its irrevocable letter of credit in favor of the Paying Agent, in substantially the form of Exhibit 1.01A hereto (such letter of credit of the Issuing Bank, as it may from time to time be extended or modified pursuant to the terms of this Agreement, being the "Letter of Credit"), in the amount of $121,014,000 (the "Stated Amount"), of which (i) $114,500,000 shall support the payment of principal of the Bonds (or the portion of the purchase or redemption price of the Bonds corresponding to principal), (ii) $6,514,000 shall support the payment of up to 128 days' interest on the principal amount of the Bonds (or the portion of the purchase or redemption price of the Bonds corresponding to interest), computed at a maximum interest rate of 16% per annum on the basis of the actual days elapsed and a year of 360 days, subject to modification as provided in Section 2.06 hereof, and (iii) $0.00 shall support the payment of premium on the Bonds. The Issuing Bank has agreed to issue the Letter of Credit subject to the terms and conditions set forth herein (including the terms and conditions relating to the rights and obligations of the Participating Banks).
NOW, THEREFORE, in consideration of the premises and in order to induce the Issuing Bank to issue the Letter of Credit and the Participating Banks to participate in the Letter of Credit and make advances hereunder, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.A. Certain Defined Terms. In addition to the terms defined in the Preliminary Statement hereto, as used in this Agreement, the following terms shall have the following meanings (such meanings to be applicable to the singular and plural forms of the terms defined):
"Adjustment" at any time and for any purpose means whichever of the following, if any, is applicable at such time:
(1) an increase of 0.25% per annum in the event that, and at all times during which, the First Mortgage Bonds (or if no First Mortgage Bonds are then outstanding, the senior secured long-term Debt of the Account Party not entitled to the benefits of a letter of credit or other credit enhancement facility) (the "Senior Debt") are rated Ba1 (or lower) by Moody's or BB+ (or lower) by S&P; or
(2) a decrease of 0.125% per annum in the event that, and at all times during which, the Senior Debt is rated Baa2 (or higher) by Moody's and BBB (or higher) by S&P;
The Adjustment shall be redetermined upon any change in the rating of the Senior Debt by either Moody's or S&P, and shall be effective from the date of such change.
"Advances" means Initial Advances and Term Advances, without differentiation; individually, an "Advance".
"Affiliate" means, with respect to any Person, any other Person directly or indirectly controlling (including, but not limited to all directors and officers of such Person), controlled by, or under direct or indirect common control with such Person. A Person shall be deemed to control another entity if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such entity, whether through the ownership of voting securities, by contract or otherwise.
"Agreement for Capacity Transfer" means the Agreement for Capacity Transfer, dated as of December 1, 1989, between The Connecticut Light and Power Company ("CL&P") and the Account Party, as amended by the First Amendment to Agreement for Capacity Transfer, dated as of May 1, 1992 between CL&P and the Account Party, which provides for capacity transfers from the Account Party to CL&P.
"Alternate Base Rate" means, for any Interest Period or any other period, a fluctuating interest rate per annum equal at all times to the highest from time to time of:
(a) the rate of interest announced publicly by Barclays in New York, New York, from time to time, as Barclays' prime rate; and
(b) 1/2 of one percent per annum above the Federal Funds Rate from time to time.
Each change in the Alternate Base Rate shall take effect concurrently with any change in such prime rate or Federal Funds Rate, as the case may be.
"Applicable Lending Office" means, with respect to each Participating Bank, (i)(A) such Participating Bank's "Domestic Lending Office" in the case of a Base Rate Advance, (B) such Participating Bank's "CD Lending Office" in the case of a CD Rate Advance and (C) such Participating Bank's "Eurodollar Lending Office" in the case of a Eurodollar Rate Advance, in each case as specified opposite such Participating Bank's name on Schedule I hereto (in the case of a Participating Bank initially party to this Agreement) or in the Participation Assignment pursuant to which such Participating Bank became a Participating Bank (in the case of any other Participating Bank), or (ii) such other office or affiliate of such Participating Bank as such Participating Bank may from time to time specify to the Account Party and the Agent.
"Assessment Rate" means, for any Interest Period or any other period, the annual assessment rate per annum estimated by the Agent on the first day of such Interest Period or such other period, as the case may be, for determining the then average current annual assessment payable by insured banks to the Federal Deposit Insurance Corporation (or any successor) for insuring U.S. dollar deposits in the United States. The "Assessment Rate" shall be adjusted automatically on and as of the effective date of each change in any such rate.
"Available Amount" in effect at any time means the maximum aggregate amount available to be drawn at such time under the Letter of Credit, the determination of such maximum amount to assume compliance with all conditions for drawing and no reduction for (i) any amount drawn by the Paying Agent to make a regularly scheduled payment of interest on the Bonds (unless such amount will not be reinstated under the Letter of Credit) or (ii) any amount not available to be drawn because Bonds are held by or for the account of the Account Party and/or in pledge for the benefit of the Issuing Bank, but after giving effect, nevertheless, to any reduction in the Stated Amount effected pursuant to Section 2.06 hereof.
"Bankruptcy Court" has the meaning assigned to that term in the Preliminary Statement.
"Base Rate Advance" means an Advance in respect of which the Account Party has selected in accordance with Article III hereof, or this Agreement otherwise provides for, interest to be computed on the basis of the Alternate Base Rate.
"Bonds" has the meaning assigned to that term in the Preliminary Statement.
"Business Day" means a day of the year that is not a Sunday or legal holiday or a day on which banks are authorized to close in New York City and, (i) if the applicable Business Day relates to any Eurodollar Rate Advance, is a day on which dealings are carried on in the London interbank market and/or (ii) if the applicable Business Day relates to any action to be taken by, or notice furnished to or by, or payment to be made to or by, the Trustee, the Paying Agent, the Remarketing Agent or the First Mortgage Trustee, is a day on which (A) banking institutions are not authorized pursuant to law to close, (B) the corporate trust office of the First Mortgage Trustee is open for business, (C) banking institutions in all of the cities in which the principal offices of the Issuing Bank, the Trustee, the Paying Agent, the First Mortgage Trustee and, if applicable, the Remarketing Agent are located are not required or authorized to remain closed and (D) the New York Stock Exchange is not closed.
"CD Rate" means for any Interest Period for any CD Rate Advances comprising part of the same Term Borrowing, an interest rate per annum equal at all times during such Interest Period to the sum of:
(i) the rate per annum obtained by dividing (x) the consensus bid rate determined by the Agent to be the average (rounded upward to the nearest whole multiple of 1/100 of 1% per annum, if such average is not such a multiple) of the bid rates per annum, at 9:00 A.M. (New York City time) (or as soon thereafter as practicable) on the first day of such Interest Period, of three New York certificate of deposit dealers of recognized standing selected by the Agent for the purchase at face value of certificates of deposit of Barclays in an aggregate amount substantially equal to the CD Rate Advance of Barclays comprising part of the same Term Borrowing and with a maturity equal to such Interest Period, by (y) a percentage equal to 100% minus the Domestic Reserve Percentage for such Interest Period, plus
(ii) 0.875% per annum; plus
(iii) the Assessment Rate for such Interest Period.
"CD Rate Advance" means an Advance in respect of which the Account Party has selected in accordance with Article III hereof, and this Agreement provides for, interest to be computed on the basis of the CD Rate.
"Closing Date" means the Business Day upon which each of the conditions precedent enumerated in Sections 5.01 and 5.02 hereof shall be fulfilled to the satisfaction of the Agent, the Issuing Bank, the Participating Banks and the Account Party. All transactions contemplated to occur on the Closing Date shall occur contemporaneously on or prior to October 5, 1992, at the offices of Porter & Travers, 120 West 45th Street, New York, New York 10036, at 10:00 A.M. (New York City time), or at such other place and time as the parties hereto may mutually agree.
"CL&P" has the meaning assigned to that term in the definition of Agreement for Capacity Transfer.
"Collateral" means all of the collateral in which liens, mortgages or security interests are purported to be granted by any or all of the Security Documents.
"Commitment" means, for each Participating Bank, such Participating Bank's Percentage of the Available Amount. "Commitments" shall refer to the aggregate of the Commitments.
"Common Equity" means, at any date, an amount equal to the sum of the aggregate of the par value of, or stated capital represented by, the outstanding shares of common stock of the Account Party and the surplus, paid-in, earned and other, if any, of the Account Party.
"Confidential Information" has the meaning assigned to that term in Section 10.09 hereof.
"Conversion", "Convert" or "Converted" each refers to a conversion of Term Advances pursuant to Section 3.04 hereof, including, but not limited to any selection of a longer or shorter Interest Period to be applicable to such Term Advances or any conversion of a Term Advance as described in Section 3.04(c) hereof.
"Credit Termination Date" means the date on which the Letter of Credit shall terminate in accordance with its terms.
"Debt" means, for any Person, without duplication, (i)
indebtedness of such Person for borrowed money, (ii) obligations of
such Person evidenced by bonds, debentures, notes or other similar
instruments, (iii) obligations of such Person to pay the deferred
purchase price of property or services, (iv) obligations of such
Person as lessee under leases which shall have been or should be, in
accordance with generally accepted accounting principles, recorded as
capital leases (not including the Unit Contract), (v) obligations
(contingent or otherwise) of such Person under reimbursement or
similar agreements with respect to the issuance of letters of credit,
(vi) net obligations (contingent or otherwise) of such Person under
interest rate swap, "cap", "collar" or other hedging agreements, (vii)
obligations of such person to pay rent or other amounts under leases
entered into in connection with sale and leaseback transactions
involving assets of such Person being sold in connection therewith,
(viii) obligations under direct or indirect guaranties in respect of,
and obligations (contingent or otherwise) to purchase or otherwise
acquire, or otherwise to assure a creditor against loss in respect of,
indebtedness or obligations of others of the kinds referred to in
clauses (i) through (vii), above, and (ix) liabilities in respect of
unfunded vested benefits under ERISA Plans.
"Default Rate" means a fluctuating interest rate equal at all times to 2% per annum above the Alternate Base Rate in effect from time to time.
"Domestic Reserve Percentage" means, for any Interest Period or any other period, the reserve percentage applicable on the first day of such Interest Period or such other period, as the case may be, under regulations issued from time to time by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement (including, but not limited to, any emergency, supplemental or other marginal reserve requirement) for Barclays with respect to liabilities consisting of or including (among other liabilities) U.S. dollar nonpersonal time deposits in the United States and with a maturity equal to such Interest Period or such other period, as the case may be. The "Domestic Reserve Percentage" shall be determined from time to time by the Agent and shall be adjusted automatically on and as of the effective date of each change in any reserve requirement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time.
"ERISA Affiliate" means, with respect to any Person, any trade or business (whether or not incorporated) which is a "commonly controlled entity" of the Account Party within the meaning of the regulations under Section 414 of the Internal Revenue Code of 1986, as amended from time to time.
"ERISA Multiemployer Plan" means a "multiemployer plan" subject to Title IV of ERISA.
"ERISA Plan" means an employee benefit plan (other than an ERISA Multiemployer Plan) maintained for employees of the Account Party or any ERISA Affiliate and covered by Title IV of ERISA.
"ERISA Plan Termination Event" means (i) a Reportable Event
described in Section 4043 of ERISA and the regulations issued
thereunder (other than a Reportable Event not subject to the provision
for 30-day notice to the PBGC under such regulations) with respect to
an ERISA Plan or an ERISA Multiemployer Plan, or (ii) the withdrawal
of the Account Party or any of its ERISA Affiliates from an ERISA Plan
or an ERISA Multiemployer Plan during a plan year in which it was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA, or
(iii) the filing of a notice of intent to terminate an ERISA Plan or
an ERISA Multiemployer Plan or the treatment of an ERISA Plan or an
ERISA Multiemployer Plan under Section 4041 of ERISA, or (iv) the
institution of proceedings to terminate an ERISA Plan or an ERISA
Multiemployer Plan by the PBGC, or (v) any other event or condition
which might constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any
ERISA Plan or ERISA Multiemployer Plan.
"Eurocurrency Liabilities" has the meaning assigned to that term in Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time.
"Eurodollar Rate" means for any Interest Period for any Eurodollar Rate Advances comprising part of the same Term Borrowing, an interest rate per annum equal at all times during such Interest Period to the sum of:
(i) the rate per annum (rounded upward to the nearest whole multiple of 1/100 of 1% per annum, if such rate is not such a multiple) determined by the Agent at which deposits in United States dollars in amounts comparable to the Eurodollar Rate Advance of Barclays comprising part of such Term Borrowing and for comparable periods as such Interest Period are offered by the principal office of Barclays in London, England to prime banks in the London interbank market at 11:00 A.M. (London time) two Business Days before the first day of such Interest Period, plus
(ii) 0.75% per annum.
"Eurodollar Rate Advance" means an Advance in respect of which the Account Party has selected in accordance with Article III hereof, and this Agreement provides for, interest to be computed on the basis of the Eurodollar Rate.
"Eurodollar Reserve Percentage" of any Participating Bank for each Interest Period for each Eurodollar Rate Advance means the reserve percentage applicable during such Interest Period (or if more than one such percentage shall be so applicable, the daily average of such percentages for those days in such Interest Period during which any such percentage shall be so applicable) under Regulation D or other regulations issued from time to time by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement, without benefit of or credit for proration, exemptions or offsets) for such Participating Bank with respect to liabilities or assets consisting of or including "eurocurrency liabilities" having a term equal to such Interest Period.
"Event of Default" has the meaning assigned to that term in
Section 8.01.
"Federal Funds Rate" means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published on the next succeeding Business Day, the average of the quotations for such day on such transactions received by the Agent from three Federal funds brokers of recognized standing selected by it.
"Financing Agreements" has the meaning assigned to that term in the Preliminary Statement.
"First Mortgage Bonds" means first mortgage bonds issued or to be issued by the Account Party and secured, directly or indirectly, collectively or severally, by one or more first-priority liens on all or part of the Indenture Assets pursuant to the First Mortgage Indenture or another indenture in form and substance satisfactory to the Majority Lenders. For purposes hereof, all or part of the First Mortgage Bonds may be issued as collateral for pollution control revenue bonds or industrial revenue bonds, whether taxable or tax exempt issued by the Account Party or by a governmental authority at the Account Party's request.
"First Mortgage Indenture" means the General and Refunding Mortgage Indenture, between the Account Party and New England Merchants National Bank, as trustee and to which First Fidelity Bank, National Association, New Jersey, is to be successor trustee, dated as of August 15, 1978, as amended through the Plan Effective Date, and as the same may thereafter be amended, supplemented or modified from time to time.
"First Mortgage Trustee" means the trustee from time to time under the First Mortgage Indenture.
"Governmental Approval" means any authorization, consent, approval, license, permit, certificate, exemption of, or filing or registration with, any governmental authority or other legal or regulatory body (including, without limitation, the Bankruptcy Court), required in connection with either (i) the execution, delivery or performance of the Rate Agreement, any Loan Document, Related Document, Financing Agreement or Significant Contract, (ii) the grant and perfection of any security interest, lien or mortgage contemplated by the Security Documents, or (iii) the nature of the Account Party's business as conducted or the nature of the property owned or leased by it. For purposes of this Agreement, Chapter 362-C of the Revised Statutes Annotated of New Hampshire, in effect on the date hereof, shall be deemed to be a Governmental Approval.
"Hazardous Substance" means any waste, substance or material identified as hazardous, dangerous or toxic by any office, agency, department, commission, board, bureau or instrumentality of the United States of America or of the State or locality in which the same is located having or exercising jurisdiction over such waste, substance or material.
"Indemnified Person" has the meaning assigned to that term in
Section 10.04(b) hereof.
"Indenture" has the meaning assigned to that term in the Preliminary Statement.
"Indenture Assets" means fixed assets of the Account Party (including related Governmental Approvals and regulatory assets) which from time to time are subject to the first-priority lien under the First Mortgage Indenture.
"Information Memorandum" means the syndication memorandum, dated May 1992 regarding the Account Party and NU, as distributed to the Issuing Bank and the Participating Banks, including, without limitation, the Annual Reports of the Account Party and NU on Form 10- K for the fiscal year ended December 31, 1991.
"Initial Advance" has the meaning assigned to that term in
Section 3.02(a) hereof.
"Initial First Mortgage Bonds" has the meaning assigned to that term in the Preliminary Statement.
"Initial Repayment Date" has the meaning assigned to that term in
Section 3.02(a) hereof.
"Interest Component" has the meaning assigned to that term in the Letter of Credit.
"Interest Drawing" has the meaning assigned to that term in the Letter of Credit.
"Interest Period" has the meaning assigned to that term in
Section 3.03(b) hereof.
"Issuer" has the meaning assigned to that term in the Preliminary Statement.
"Issuer Resolution" means the resolution adopted by the Issuer that authorized the issuance of the Bonds, approved the terms and provisions of the Bonds, and approved those of the documents related to the Bonds to which the Issuer is a party.
"Letter of Credit" has the meaning assigned to that term in the Preliminary Statement.
"Lien" has the meaning assigned to that term in Section 7.02(a) hereof.
"Loan Documents" means this Agreement and the Security Documents.
"Major Electric Generating Plants" means the following nuclear, combustion turbine and coal, oil or diesel-fired generating stations of the Account Party: the Merrimack generating station located in Bow, New Hampshire; the Newington generating station located in Newington, New Hampshire; the Schiller generating station located in Portsmouth, New Hampshire; the White Lake combustion turbine located in Tamworth, New Hampshire; the Millstone Unit No. 3 generating station located in Waterford, Connecticut, and the Wyman Unit No. 4 generating station located in Yarmouth, Maine.
"Majority Lenders" means on any date of determination, (i) the Issuing Bank and (ii) Participating Banks who, collectively, on such date, have Percentages in the aggregate of at least 66-2/3%. Determination of those Participating Banks satisfying the criteria specified above for action by the Majority Lenders shall be made by the Agent and shall be conclusive and binding on all parties absent manifest error.
"Merger" means (i) the merger on June 5, 1992 of NU Acquisition Corp., a wholly-owned subsidiary of NU, with and into the Account Party and (ii) the transfer on the same date by the Account Party, as so merged, to NAEC of the Seabrook Interests in accordance with the Plan and the Rate Agreement.
"Moody's" means Moody's Investors Service, Inc. or any successor thereto.
"NAEC" means North Atlantic Energy Corporation, a corporation wholly-owned by NU for the sole purpose of acquiring the Seabrook Interests, which were acquired by NAEC from the Account Party on June 5, 1992.
"NU" means Northeast Utilities, an unincorporated voluntary business association organized under the laws of the Commonwealth of Massachusetts.
"NUSCO" means Northeast Utilities Service Company, a Connecticut corporation and a wholly-owned subsidiary of NU.
"Original Reimbursement Agreement" means the Series D Letter of Credit and Reimbursement Agreement, dated as of May 1, 1991, among the Account Party, Citibank and the Participating Banks referred to therein relating to the Issuer's Pollution Control Revenue Bonds (Public Service Company of New Hampshire Project-1991 Taxable Series D).
"Participant" shall have the meaning assigned to that term in
Section 10.06(b) hereof.
"Participating Banks" means the Persons listed on the signature pages hereof following the heading "Participating Banks" and any other Person who becomes a party hereto pursuant to Section 10.06 hereof.
"Participation Assignment" means a participation assignment entered into pursuant to Section 10.06 hereof by any Participating Bank and an assignee, in substantially the form of Exhibit 1.01B hereto.
"Participation Percentage" means, as of any date of determination
(i) with respect to a Participating Bank initially a party hereto, the
percentage set forth opposite such Participating Bank's name on the
signature pages hereof, except as provided in clause (iii), below,
(ii) with respect to a Participating Bank that became a party hereto
by operation of Section 10.06(a) hereof, the Participation Percentage
stated to be assumed by such assignee Participating Bank in the
relevant Participation Assignment, except as provided in clause (iii),
below, and (iii) with respect to any Participating Bank described in
clauses (i) and (ii), above, that assigns a percentage of its
interests in accordance with Section 10.06(a) hereof, its
participation percentage as reduced by the percentage so assigned.
"Paying Agent" means (i) Security Pacific National Trust Company (New York), as the initial paying agent for the Bonds under the Indenture, and (ii) any successor paying agent for the Bonds under the Indenture.
"PBGC" means the Pension Benefit Guaranty Corporation (or any successor entity) established under ERISA.
"Permitted Investments" means each and any of the following so long as (A) with respect to Permitted Investments held or maintained by the Issuing Bank as collateral security, if any, no such Permitted Investment shall have a final maturity later than one month from the date of investment therein and (B) with respect to all other Permitted Investments, no such Permitted Investment shall have a final maturity later than 12 months from the date of investment therein and all such Permitted Investments, collectively, shall have a dollar-weighted average maturity no later than six months from any date of determination:
(i) direct obligations of the United States of America, or obligations guaranteed as to principal and interest by the United States of America;
(ii) subject to any more stringent requirement contained in the Financing Agreements, certificates of deposit, eurodollar certificates of deposit or bankers' acceptances issued, or time deposits held, or investment contracts guaranteed, by (a) any Participating Bank or any of the "Banks" under the Financing Agreements; or (b) any other commercial bank, trust company, savings and loan association or savings bank organized under the laws of the United States of America, or any State thereof, or of any other country which is a member of the Organization for Economic Cooperation and Development (or a political subdivision of any such country) having outstanding unsecured indebtedness that is rated (on the date of acquisition thereof) AA- or better by Standard & Poor's Corporation or Aa3 or better by Moody's Investors Service, Inc. (or an equivalent rating by another nationally recognized credit rating agency of similar standing if neither of such corporations is then in the business of rating unsecured bank indebtedness);
(iii) subject to any more stringent requirement contained in the Financing Agreements, obligations with any Participating Bank, any of such Banks or any other bank or trust company described in clause (ii), above, in respect of the repurchase of obligations of the type described in clause (i), above, provided that such repurchase obligations shall be fully secured by obligations of the type described in said clause (i) and the possession of such obligations shall be transferred to, and segregated from other obligations owned by, such Participating Bank, Bank or other bank or trust company;
(iv) commercial paper rated (on the date of acquisition thereof) A-1 or P-1 or better by S&P or Moody's, respectively (or an equivalent rating by another nationally recognized credit rating agency of similar standing if neither of such corporations is then in the business of rating commercial paper); and
(v) obligations of NU or any Affiliate of NU held or maintained in accordance with NUSCO intercompany lending arrangements.
"Person" means an individual, partnership, corporation (including a business trust), joint stock company, trust, estate, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof.
"Plan" has the meaning assigned to that term in the Preliminary Statement.
"Plan Effective Date" has the meaning assigned to that term in the Preliminary Statement.
"Pledge Agreement" means the Series D Pledge Agreement, dated as of May 1, 1991, by the Account Party in favor of Citibank, as amended by a First Amendment thereto (the "Pledge Amendment") in substantially the form of Exhibit 1.01C hereto, and as the same may from time to time be amended, modified or supplemented.
"Pledged Bonds" shall have the meaning assigned to that term in the Pledge Agreement.
"Preferred Stock" means 5,000,000 shares of Series A Preferred Stock of the Account Party (par value $25).
"Premium Component" has the meaning assigned to that term in the Letter of Credit.
"Principal Component" has the meaning assigned to that term in the Letter of Credit.
"PSNH Mortgage" has the meaning assigned to that term in the Financing Agreements.
"Purchase Contract" means the Series D and E Bond Purchase Agreement, dated May 15, 1991, among the Issuer, the Account Party, Goldman, Sachs & Co. and Morgan Stanley & Co. Incorporated.
"Rate Agreement" means the Agreement dated as of November 22, 1989, as amended by the First Amendatory Agreement dated as of December 5, 1989, and the Second Amendatory Agreement dated as of December 12, 1989, among NUSCO, the Governor and Attorney General of the State of New Hampshire and adopted by the Account Party as of July 10, 1990 (without giving effect to any deemed modification effected pursuant to Section 2(c) thereof except and to the extent the Majority Lenders shall have consented thereto in writing, and excluding the Unit Contract appended as Exhibit A thereto subsequent to the effectiveness of such contract).
"Recipient" has the meaning assigned to that term in Section 10.09 hereto.
"Related Documents" means the Letter of Credit, the Bonds, the Indenture, any Remarketing Agreement and the Purchase Contract.
"Remarketing Agent" has the meaning assigned to that term in the Indenture.
"Remarketing Agreement" means (i) the Remarketing Agreement,
dated as of May 1, 1991, between the Account Party and Goldman, Sachs
Money Markets Inc., as the same may be amended from time to time; and
(ii) any successor remarketing agreement between the Account Party and
a successor Remarketing Agent as shall be in effect from time to time
in accordance with the terms of the Indenture.
"Restricted Payment" has the meaning assigned to that term in
Section 7.02(f) hereof.
"S&P" means Standard and Poor's Corporation or any successor thereto.
"Seabrook" means the nuclear-fueled, steam-electric generating plant at a site located in Seabrook, New Hampshire, and the related real property interests, fixtures, and other fixed assets.
"Seabrook Interests" means all right, title and interest of the Account Party, prior to the Merger, in and to the fixed assets of Seabrook, nuclear fuel relating to Seabrook and Governmental Approvals relating thereto, including the undeveloped land adjacent to Seabrook then wholly-owned by the Account Party and described as the "Adjacent Property" in Schedule D to the PSNH Mortgage.
"Security Documents" means the Pledge Agreement, the Indenture, the First Mortgage Indenture and the Series F First Mortgage Bonds.
"Series E Reimbursement Agreement" means (i) the Series E Letter
of Credit and Reimbursement Agreement, dated as of May 1, 1991, among
the Account Party, Citibank and the Participating Banks referred to
therein relating to the Issuer's Pollution Control Revenue Bonds
(Public Service Company of New Hampshire Project-1991 Taxable Series
E), as the same may from time to time be amended, modified or
supplemented or (ii) any reimbursement agreement or similar agreement
relating to a substitute Credit Facility applicable to such bonds.
"Series F First Mortgage Bonds" means the Account Party's Series F First Mortgage Bonds.
"Sharing Agreement" means the Sharing Agreement, dated as of June 1, 1992, among CL&P, Western Massachusetts Electric Company, Holyoke Water Power Company, Holyoke Power and Electric Company, the Account Party and NUSCO.
"Significant Contracts" means the following contracts, in each case as the same may be amended, modified or supplemented from time to time in accordance with this Agreement:
(i) the Agreement for Capacity Transfer;
(ii) the Sharing Agreement;
(iii) the Tax Allocation Agreement; and
(iv) the Unit Contract.
"Stated Amount" has the meaning assigned to that term in the Preliminary Statement hereto.
"Stated Termination Date" means the expiration date specified in clause (i) of the first paragraph of Paragraph (1) of the Letter of Credit, as such date may be extended pursuant to Section 2.05 hereof.
"Tax Allocation Agreement" means the Amended and Restated Tax Allocation Agreement, dated as of January 1, 1990, among NU and the members of the consolidated group of which NU is the common parent, including, without limitation, the Account Party.
"Tender Drawing" has the meaning assigned to that term in the Letter of Credit.
"Term Advance" has the meaning assigned to that term in Section 3.02(b) hereof, and refers to a Base Rate Advance, a CD Rate Advance or a Eurodollar Rate Advance (each of which shall be a "Type" of Term Advance). The Type of a Term Advance may change from time to time when such Term Advance is Converted. For purposes of this Agreement, all Term Advances of a Participating Bank (or portions thereof) made as, or Converted to, the same Type and Interest Period on the same day shall be deemed a single Term Advance by such Participating Bank until repaid or next Converted.
"Term Borrowing" means a borrowing consisting of Term Advances of the same Type and Interest Period made on the same day by the Participating Banks, ratably in accordance with their respective Participation Percentages. A Term Borrowing may be referred to herein as being a "Type" of Term Borrowing, corresponding to the Type of Term Advances comprising such Term Borrowing. For purposes of this Agreement, all Term Advances made as, or Converted to, the same Type and Interest Period on the same day shall be deemed a single Term Borrowing until repaid or next Converted.
"Termination Date" means the Stated Termination Date or the earlier date of termination of the Commitments pursuant to Sections 2.02 or 8.02 hereunder.
"Total Capitalization" means, as of any day, the aggregate of all amounts that would, in accordance with generally accepted accounting principles applied on a basis consistent with the standards referred to in Section 1.03 hereof, appear on the balance sheet of the Account Party as at such day as the sum of (i) the principal amount of all long-term Debt of the Account Party on such day, (ii) the par value of, or stated capital represented by, the outstanding shares of all classes of common and preferred shares of the Account Party on such day, (iii) the surplus of the Account Party, paid-in, earned and other, if any, on such day and (iv) the unpaid principal amount of all short-term Debt of the Account Party on such day.
"Trustee" has the meaning assigned to that term in the Preliminary Statement hereto.
"Type" has the meaning assigned to such term in the definitions of "Term Advance" and "Term Borrowing" herein.
"Unit Contract" means the Unit Contract, dated as of June 1, 1992, between the Account Party and NAEC.
"Unmatured Default" means the occurrence and continuance of an event which, with the giving of notice or lapse of time or both, would constitute an Event of Default.
SECTION 1.B. Computation of Time Periods. In the computation of periods of time under this Agreement any period of a specified number of days or months shall be computed by including the first day or month occurring during such period and excluding the last such day or month. In the case of a period of time "from" a specified date "to" or "until" a later specified date, the word "from" means "from and including" and the words "to" and "until" each means "to but excluding".
SECTION 1.C. Accounting Terms. All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles applied on a basis consistent with the application employed in the preparation of the financial projections and pro-formas referred to in Section 5.01 hereof.
SECTION 1.D. Computations of Outstandings. Whenever reference is made in this Agreement to the principal amount outstanding on any date under this Agreement, such reference shall refer to the sum of (i) the Available Amount on such date, (ii) the aggregate principal amount of all Advances outstanding on such date and (iii) the aggregate amount of all demand loans under Section 3.01 hereunder on such date, in each case after giving effect to all transactions to be made on such date and the application of the proceeds thereof.
ARTICLE II
THE LETTER OF CREDIT
SECTION 2.01. The Letter of Credit. The Issuing Bank agrees, on the terms and conditions hereinafter set forth (including, without limitation, the applicable conditions precedent set forth in Article V hereof), to issue the Letter of Credit to the Paying Agent, upon not less than three Business Days prior notice from the Account Party, on the Closing Date.
SECTION 2.02. Termination of the Commitments. The obligation of the Issuing Bank to issue the Letter of Credit shall automatically terminate if unexercised at 5:00 P.M. (New York City time) on October 15, 1992.
SECTION 2.03. Commissions and Fees. (a) The Account Party hereby agrees to pay to the Agent, for the account of the Participating Banks ratably in accordance with their respective Participation Percentages, a letter of credit commission on the Available Amount in effect from time to time from the date of issuance of the Letter of Credit until the Termination Date (disregarding for such purpose any temporary diminution thereof arising from drawings under the Letter of Credit to pay interest (or purchase price corresponding to interest) on the Bonds, regardless of whether the amount so drawn shall be thereafter reinstated), at a rate equal to 0.725% per annum as increased or decreased by the Adjustment, payable quarterly in arrears on the first day of October, January, April and July in each year, commencing on the first such date to occur following the date of issuance of the Letter of Credit, and on the Credit Termination Date.
(b) The Account Party also agrees to pay to the Agent for the account of the Participating Banks ratably in accordance with their respective Participation Percentages, a one-time participation fee in the amount agreed upon by the Agent and the Account Party, such participation fee to be payable in full simultaneously with the issuance of the Letter of Credit.
(c) The Account Party also agrees to pay to the Agent, for the account of the Issuing Bank, such other fees as have been agreed upon by the Account Party and the Issuing Bank.
(d) The Account Party also agrees to pay to the Agent, for its own account, such other fees as have been agreed upon by the Account Party and the Agent.
SECTION 2.04. Reinstatement of the Letter of Credit. (a) The Interest Component and the Principal Component shall, from time to time, be reinstated by the Issuing Bank in accordance with, and only to the extent provided in, the Letter of Credit. In no event shall reductions in the Premium Component be reinstated.
(b) Interest Component. With respect to reinstatement of reductions in the Interest Component resulting from Interest Drawings:
(i) The Issuing Bank may only deliver to the Paying Agent any notice of non-reinstatement pursuant to Paragraph 5(i)(A) of the Letter of Credit if (A) the Issuing Bank and/or the Participating Banks have not been reimbursed in full by the Account Party for one or more drawings, together with interest, if any, owing thereon pursuant to this Agreement, or (B) an Event of Default has occurred and is then continuing.
(ii) If, subsequent to any such delivery of a notice of non- reinstatement, the circumstances giving rise to the delivery of such notice of non-reinstatement shall have ceased to exist (whether as a result of reimbursement of unreimbursed drawings, or waiver or cure of an Event of Default, or otherwise), then, provided that no other Event of Default shall have occurred and be continuing, the Issuing Bank shall deliver to the Paying Agent, by hand delivery or facsimile transmission, a Notice of Reinstatement in the form of Exhibit 5 to the Letter of Credit reinstating that portion of the Interest Component in respect of which such notice of non-reinstatement was given.
(c) Principal Component. With respect to reinstatement of a reduction in the Principal Component resulting from any Tender Drawing, IF:
(i) such reduction has not been reinstated pursuant to Paragraph 5(ii)(A) of the Letter of Credit;
(ii) the Issuing Bank and/or the Participating Banks shall have been reimbursed by the Account Party for such Tender Drawing;
(iii) any demand loan(s) and Advance(s) made in respect of such Tender Drawing shall have been repaid by the Account Party, together with any interest thereon and any other amounts payable hereunder in connection therewith; AND
(iv) no Event of Default shall have occurred and then be continuing;
THEN, the Issuing Bank shall deliver to the Paying Agent, by hand delivery or facsimile transmission, a Notice of Reinstatement in the form of Exhibit 5 to the Letter of Credit reinstating the Principal Component to the extent of such Tender Drawing.
SECTION 2.05. Extension of the Stated Termination Date. Unless the Letter of Credit shall have previously expired in accordance with its terms, at least 105 days but not more than 120 days before the Stated Termination Date, the Account Party may, by notice to the Agent (any such notice being irrevocable), request the Issuing Bank and the Participating Banks to extend the Stated Termination Date of the Letter of Credit for a period of one year. If the Account Party shall make such request, the Agent shall promptly inform the Issuing Bank and the Participating Banks and, no later than 60 days prior to the Stated Termination Date, the Agent shall notify the Account Party in writing (with a copy of such notice to the Trustee and the Paying Agent) if the Issuing Bank and the Participating Banks consent to such request and the conditions of such consent (including conditions relating to legal documentation). The granting of any such consent shall be in the sole and absolute discretion of the Issuing Bank and the Participating Banks, and if the Agent shall not so notify the Account Party, such lack of notification shall be deemed to be a determination not to consent to such request.
SECTION 2.06. Modification of the Letter of Credit. In the event that the Account Party elects to cause the issuance of Tax-Exempt Refunding Bonds (as defined in the Indenture) pursuant to Article IV of the Indenture, the Account Party may, but shall not be obligated to, propose amendments to the Letter of Credit to change the method of computing the Interest Component or such other terms thereof as may be necessary or appropriate in connection with such issuance. Any such proposal shall be furnished to the Issuing Bank in writing not later than 60 days prior to the date proposed for such issuance. If the Issuing Bank shall consent to such amendments (which consent, subject to the provisions of the next succeeding sentence, shall not be unreasonably withheld) the Issuing Bank shall, upon surrender of the Letter of Credit by the beneficiary thereof for amendment (or replacement, as the Issuing Bank may elect), amend the Letter of Credit accordingly (or issue a replacement Letter of Credit therefor reflecting such amendments but otherwise identical to the Letter of Credit so surrendered). Notwithstanding the foregoing, the Issuing Bank shall not be obligated to consent to any amendment or amendments that (i) increase the Stated Amount or the then-existing Available Amount, (ii) change or modify in any respect the Credit Termination Date or any provision for determining the expiry or other termination of the Letter of Credit, (iii) change or modify in any respect the times, places or manner at or in which drawings under the Letter of Credit are to be presented or paid, (iv) change or modify in any respect the forms of drawing certificates and other annexes to the Letter of Credit, (v) change the beneficiary of the Letter of Credit or the method prescribed therein for the transfer of the Letter of Credit or (vi) as determined in the good faith discretion of the Issuing Bank and its counsel, increase or enlarge the scope, or modify the nature, of the Issuing Bank's and the Participating Banks' credit exposure to the Account Party or any legal risks related thereto or expose the Issuing Bank to any additional liability. In furtherance of the foregoing, the Issuing Bank may condition the granting of such consent on the receipt by the Issuing Bank of such certificates, opinions of counsel and other assurances of the Account Party and its counsel, or bond counsel or the Trustee or Paying Agent, as the Issuing Bank may reasonably require. Each Participating Bank, by its execution of this Agreement, or of the Participation Assignment pursuant to which it became a Participating Bank, consents to, ratifies and affirms all actions taken and to be taken by the Issuing Bank pursuant to this Section 2.06.
ARTICLE III
REIMBURSEMENT AND ADVANCES
SECTION 3.01. Reimbursement on Demand. Subject to the provisions of
Section 3.02 hereof, the Account Party hereby agrees to pay (whether with
the proceeds of Initial Advances made pursuant to this Agreement or
otherwise) to the Issuing Bank on demand (a) on and after each date on
which the Issuing Bank shall pay any amount under the Letter of Credit
pursuant to any draft, but only after so paid by the Issuing Bank, a sum
equal to such amount so paid (which sum shall constitute a demand loan from
the Issuing Bank to the Account Party from the date of such payment by the
Issuing Bank until so paid by the Account Party), plus (b) interest on any
amount remaining unpaid by the Account Party to the Issuing Bank under
clause (a), above, from the date such amount becomes payable on demand
until payment in full, at the Default Rate in effect from time to time. No
reinstatement of the Interest Component or the Principal Component despite
the failure by the Account Party to reimburse the Issuing Bank for any
previous drawing to pay interest on the Bonds shall limit or impair the
Account Party's obligations under this Section 3.01.
SECTION 3.02. Advances. Each Participating Bank agrees to make Initial Advances and Term Advances for the account of the Account Party from time to time upon the terms and subject to the conditions set forth in this Agreement.
(a) Initial Advances; Repayment of Initial Advances. If the Issuing
Bank shall honor any Tender Drawing and if the conditions precedent set
forth in Section 5.03 of this Agreement have been satisfied as of the date
of such honor, then, each Participating Bank's payment made to the Issuing
Bank pursuant to Section 3.07 hereof in respect of such Tender Drawing
shall be deemed to constitute an advance made for the account of the
Account Party by such Participating Bank (each such advance being an
"Initial Advance" made by such Participating Bank). Each Initial Advance
shall be made as a Base Rate Advance, shall bear interest at the Alternate
Base Rate and shall not be entitled to be Converted. Subject to Article
VIII of this Agreement, each Initial Advance and all interest thereon shall
be due and payable on the earlier to occur of (i) the date 30 days from the
date of such Initial Advance (such repayment date being the "Initial
Repayment Date" for such Initial Advance) and (ii) the Termination Date.
The Account Party may repay the principal amount of any Initial Advance
with (and to the extent of) the proceeds of a Term Advance made pursuant to
subsection (b), below, and may prepay Initial Advances in accordance with
Section 3.06 hereof.
(b) Term Advances; Repayment. Subject to the satisfaction of the conditions precedent set forth in Section 5.04 hereof and the other conditions of this subsection (b), each Participating Bank agrees to make one or more advances for the account of the Account Party ("Term Advances") on each Initial Repayment Date in an aggregate principal amount equal to the amount of such Participating Bank's Initial Advances maturing on such Initial Repayment Date. All Term Advances comprising a single Term Borrowing shall be made upon written notice given by the Account Party to the Agent not later than 11:00 A.M. (New York City time) (A) in the case of a Term Borrowing comprised of Base Rate Advances, on the Business Day of such proposed Term Borrowing, (B) in the case of a Term Borrowing comprised of CD Rate Advances, two Business Days prior to the date of such Term Borrowing and (C) in the case of a Term Borrowing comprised of Eurodollar Rate Advances, three Business Days prior to the date of such proposed Term Borrowing. The Agent shall notify each Participating Bank of the contents of such notice promptly after receipt thereof. Each such notice shall specify therein the following information: (W) the date on which such Term Borrowing is to be made, (X) the principal amount of Term Advances comprising such Term Borrowing, (Y) the Type of Term Borrowing and (Z) the duration of the initial Interest Period, if applicable, proposed to apply to the Term Advances comprising such Term Borrowing. The proceeds of each Participating Bank's Term Advances shall be applied solely to the repayment of the Initial Advances made by such Participating Bank and shall in no event be made available to the Account Party. The principal amount of each Term Advance, together with all accrued and unpaid interest thereon, shall be due and payable on the earlier to occur of (x) the same calendar date occurring 35 months following the date upon which such Term Advance is made (or, if such month does not have a corresponding date, on the last day of such month) and (y) the Termination Date.
SECTION 3.03. Interest on Advances. The Account Party shall pay interest on the unpaid principal amount of each Advance from the date of such Advance until such principal amount is paid in full at the applicable rate set forth below:
(a) Alternate Base Rate. Except to the extent that the Account Party shall elect to pay interest on any Advance for any Interest Period pursuant to paragraph (c) or (d) of this Section 3.03, the Account Party shall pay interest on each Advance (including all Initial Advances) from the date thereof until the date such Advance is due, at a fluctuating interest rate per annum in effect from time to time equal to the Alternate Base Rate in effect from time to time. The Account Party shall pay interest on each Advance bearing interest in accordance with this subsection quarterly in arrears on the first day of October, January, April and July in each year and on the Termination Date or the earlier date for repayment of such Advance (including the Initial Repayment Date therefor, in the case of an Initial Advance).
(b) Interest Periods. Subject to the other requirements of
this Section 3.03, the Account Party may from time to time elect to
have the interest on all Term Advances comprising part of the same
Term Borrowing determined and payable for a specified period (an
"Interest Period" for such Term Advances) in accordance with paragraph
(c) or (d) of this Section 3.03. The first day of an Interest Period
for such Term Advances shall be the date such Advance is made or most
recently Converted, which shall be a Business Day. All Interest
Periods shall end on or prior to the Stated Termination Date. Any
Interest Period for a Term Advance that would otherwise end after the
Termination Date or earlier date for the repayment of such Advance
shall be deemed to end on the Termination Date or such earlier
repayment date, as the case may be.
(c) CD Rate. Subject to the requirements of this Section 3.03 and Article V hereof, the Account Party may from time to time elect to have any Term Advances comprising part of the same Term Borrowing made as, or Converted to, CD Rate Advances. The Interest Period applicable to such CD Rate Advances shall be of 30, 60, 90 or 180 days' duration, as the Account Party shall select in its notice delivered to the Agent pursuant to Section 3.02(b) or 3.04 hereof, as applicable. If the Account Party shall have made such election, the Account Party shall pay interest on such CD Rate Advances at the CD Rate, for the applicable Interest Period for such CD Rate Advances, which interest shall be payable on the last day of such Interest Period, on the date for repayment for such CD Rate Advances and also, in the case of any Interest Period of 180 days' duration, on the 90th day of such Interest Period.
(d) Eurodollar Rate. Subject to the requirements of this
Section 3.03 and Article V hereof, the Account Party may from time to
time elect to have any Term Advances comprising part of the same Term
Borrowing made as, or Converted to, Eurodollar Rate Advances. The
Interest Period applicable to such Eurodollar Rate Advances shall be
of one, two, three or six whole months' duration, as the Account Party
shall select in its notice delivered to the Agent pursuant to Section
3.02(b) or 3.04 hereof, as applicable. If the Account Party shall
have made such election, the Account Party shall pay interest on such
Eurodollar Rate Advances at the Eurodollar Rate, for the applicable
Interest Period for such Eurodollar Rate Advances, which interest
shall be payable on the last day of such Interest Period, on the date
for repayment for such Eurodollar Rate Advances and also, in the case
of any Interest Period of six months' duration, on that day of the
third month of such Interest Period which corresponds with the first
day of such Interest Period (or, if any such month does not have a
corresponding day, then on the last day of such month). Any Interest
Period pertaining to Eurodollar Rate Advances that begins on the last
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of a calendar
month.
(e) Interest Rate Determinations. The Agent shall give prompt notice to the Account Party and the Participating Banks of the Eurodollar Rate or CD Rate determined from time to time by the Agent to be applicable to each Eurodollar Rate Advance or CD Rate Advance, as the case may be.
SECTION 3.04. Conversion of Term Advances. Subject to the satisfaction of the conditions precedent set forth in Section 5.03 hereof, the Account Party may elect to Convert one or more Term Advances of any Type to one or more Term Advances of the same or any other Type on the following terms and subject to the following conditions:
(a) Each Conversion shall be made as to all Term Advances comprising a single Term Borrowing upon written notice given by the Account Party to the Agent not later than 11:00 A.M. (New York City time) on the third Business Day prior to the date of the proposed Conversion. The Agent shall notify each Participating Bank of the contents of such notice promptly after receipt thereof. Each such notice shall specify therein the following information: (A) the date of such proposed Conversion (which in the case of CD Rate Advances or Eurodollar Rate Advances shall be the last day of the Interest Period then applicable to such Term Advances to be Converted), (B) Type of, and Interest Period, if any, applicable to the Term Advances proposed to be Converted, (C) the aggregate principal amount of Term Advances proposed to be Converted, and (D) the Type of Term Advances to which such Term Advances are proposed to be Converted and the Interest Period, if any, to be applicable thereto.
(b) During the continuance of an Unmatured Default or an Event of Default, the right of the Account Party to Convert Term Advances to CD Rate Advances or to Eurodollar Rate Advances shall be suspended, and all CD Rate Advances and Eurodollar Rate Advances then outstanding shall be Converted to Base Rate Advances on the last day of the Interest Period then in effect, if, on such day, an Unmatured Default or an Event of Default shall be continuing.
(c) If no notice of Conversion is received by the Agent as provided in subsection (a) above with respect to any outstanding CD Rate Advances or Eurodollar Rate Advances, the Agent shall treat such absence of notice as a deemed notice of Conversion providing for such Advances to be Converted to Base Rate Advances on the last day of the Interest Period then in effect for such CD Rate Advances or Eurodollar Rate Advances.
SECTION 3.05. Other Terms Relating to the Making and Conversion of Advances. (a) Notwithstanding anything in Section 3.02, 3.03 or 3.04, above, to the contrary:
(i) at no time shall more than six different Term Borrowings be outstanding hereunder; and
(ii) each Term Borrowing consisting of CD Rate Advances or Eurodollar Rate Advances shall be in the aggregate principal amount of $10,000,000 or an integral multiple of $1,000,000 in excess thereof.
(b) Each notice of borrowing pursuant to Section 3.02(b) hereof and each notice of Conversion pursuant to Section 3.04 hereof shall be irrevocable and binding on the Account Party.
SECTION 3.06. Prepayment of Advances. (a) The Account Party shall have no right to prepay any principal amount of any Advances except in accordance with subsections (b) and (c) below.
(b) The Account Party may, upon at least one Business Day's notice to the Agent stating the proposed date and aggregate principal amount of the prepayment (and if such notice is given the Account Party shall), prepay, in whole or ratably in part, together with accrued interest to the date of such prepayment on the principal amount prepaid, the outstanding principal amount of (i) all Initial Advances made on the same date or (ii) all Term Advances comprising the same Term Borrowing, in each case as the Account Party shall designate in such notice; provided, however, that each partial prepayment shall be in an aggregate principal amount not less than $10,000,000, or, if less, the aggregate principal amount of all Advances then outstanding.
(c) Prior to or simultaneously with the resale of all of the Bonds purchased with the proceeds of a Tender Drawing, the Account Party shall prepay, or cause to be prepaid, in full, the then outstanding principal amount of all Initial Advances and of all Term Advances comprising the same Term Borrowing(s) arising pursuant to such Tender Drawing, together with all interest thereon to the date of such prepayment. If less than all of such Bonds are resold, then prior to or simultaneously with such resale the Account Party shall prepay or cause to be prepaid that portion of such Advances, together with all interest thereon to the date of such prepayment, equal to the then outstanding principal amount thereof multiplied by a fraction, the numerator of which shall be the principal amount of the Bonds resold and the denominator of which shall be the principal amount of all of the Bonds purchased with the proceeds of the relevant Tender Drawing.
SECTION 3.07. Participation; Reimbursement of Issuing Bank. (a) The
Issuing Bank hereby sells and transfers to each Participating Bank, and
each Participating Bank hereby acquires from the Issuing Bank, an undivided
interest and participation to the extent of such Participating Bank's
Participation Percentage in and to (i) the Letter of Credit, including the
obligations of the Issuing Bank under and in respect thereof and the
Account Party's reimbursement and other obligations in respect thereof and
(ii) each demand loan or deemed demand loan made by the Issuing Bank,
whether now existing or hereafter arising.
(b) If the Issuing Bank (i) shall not have been reimbursed in full for any payment made by the Issuing Bank under the Letter of Credit on the date of such payment or (ii) shall make any demand loan to the Account Party, the Issuing Bank shall promptly notify the Agent and the Agent shall promptly notify each Participating Bank of such non-reimbursement or demand loan and the amount thereof. Upon receipt of such notice from the Agent, each Participating Bank shall pay to the Issuing Bank, directly, an amount equal to such Participating Bank's ratable portion (according to such Participating Bank's Participation Percentage) of such unreimbursed amount or demand loan paid or made by the Issuing Bank, plus interest on such amount at a rate per annum equal to the Federal Funds Rate from the date of such payment by the Issuing Bank to the date of payment to the Issuing Bank by such Participating Bank. All such payments by each Participating Bank shall be made in United States dollars and in same day funds:
(x) not later than 2:45 P.M. (New York City time) on the day such notice is received by such Participating Bank if such notice is received at or prior to 12:30 P.M. (New York City time) on a Business Day; or
(y) not later than 12:00 Noon (New York City time) on the Business Day next succeeding the day such notice is received by such Participating Bank, if such notice is received after 12:30 P.M. (New York City time) on a Business Day.
If a Participating Bank shall have paid to the Issuing Bank its ratable portion of any unreimbursed amount or demand loan paid or made by the Issuing Bank, together with all interest thereon required by the second sentence of this subsection (b), such Participating Bank shall be entitled to receive its ratable share of all interest paid by the Account Party in respect of such unreimbursed amount or demand loan from the date paid or made by the Issuing Bank. If such Participating Bank shall have made such payment to the Issuing Bank, but without all such interest thereon required by the second sentence of this subsection (b), such Participating Bank shall be entitled to receive its ratable share of the interest paid by the Account Party in respect of such unreimbursed amount or demand loan only from the date it shall have paid all interest required by the second sentence of this subsection (b).
(c) Each Participating Bank's obligation to make each payment to the Issuing Bank, and the Issuing Bank's right to receive the same, shall be absolute and unconditional and shall not be affected by any circumstance whatsoever, including, without limitation, the foregoing or Section 4.06 hereof, or the occurrence or continuance of an Event of Default, or the non-satisfaction of any condition precedent set forth in Sections 5.03 or 5.04 hereof, or the failure of any other Participating Bank to make any payment under this Section 3.07. Each Participating Bank further agrees that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.
(d) The failure of any Participating Bank to make any payment to the Issuing Bank in accordance with subsection (b) above, shall not relieve any other Participating Bank of its obligation to make payment, but neither the Issuing Bank nor any Participating Bank shall be responsible for the failure of any other Participating Bank to make such payment. If any Participating Bank shall fail to make any payment to the Issuing Bank in accordance with subsection (b) above, then such Participating Bank shall pay to the Issuing Bank forthwith on demand such corresponding amount together with interest thereon, for each day until the date such amount is repaid to the Issuing Bank at the Federal Funds Rate. Nothing herein shall in any way limit, waive or otherwise reduce any claims that any party hereto may have against any non-performing Participating Bank.
(e) If any Participating Bank shall fail to make any payment to the Issuing Bank in accordance with subsection (b) above, then, in addition to other rights and remedies which the Issuing Bank may have, the Agent is hereby authorized, at the request of the Issuing Bank, to withhold and to apply the payment of such amounts owing to such Participating Bank to the Issuing Bank and any related interest, that portion of any payment received by the Agent that would otherwise be payable to such Participating Bank. In furtherance of the foregoing, if any Participating Bank shall fail to make any payment to the Issuing Bank in accordance with subsection (b), above, and such failure shall continue for five Business Days following written notice of such failure from the Issuing Bank to such Participating Bank, the Issuing Bank may acquire, or transfer to a third party in exchange for the sum or sums due from such Participating Bank, such Participating Bank's interest in the related unreimbursed amounts and demand loans and all other rights of such Participating Bank hereunder in respect thereof, without, however, relieving such Participating Bank from any liability for damages, costs and expenses suffered by the Issuing Bank as a result of such failure. The purchaser of any such interest shall be deemed to have acquired an interest senior to the interest of such Participating Bank and shall be entitled to receive all subsequent payments which the Issuing Bank or the Agent would otherwise have made hereunder to such Participating Bank in respect of such interest.
ARTICLE IV
PAYMENTS
SECTION 4.01. Payments and Computations. (a) The Account Party shall make each payment hereunder (i) in the case of reimbursement obligations pursuant to Section 3.01 hereof (excluding any portion thereof in respect of which an Initial Advance is to be made), not later than 2:30 P.M. (New York City time) on the day the related drawing under the Letter of Credit is paid by the Issuing Bank, and (ii) in all other cases, not later than 12:30 P.M. (New York City time) on the day when due, in each case in lawful money of the United States of America to the Agent at its address referred to in Section 10.02 hereof in same day funds. The Agent will promptly thereafter cause to be distributed like funds relating to the payment of reimbursements, principal, interest, fees or other amounts payable to the Issuing Bank and the Participating Banks to whom the same are payable, ratably, at its address set forth in Section 10.02 hereof (in the case of the Issuing Bank) or for the account of their respective Applicable Lending Offices (in the case of the Participating Banks), in each case to be applied in accordance with the terms of this Agreement.
(b) The Account Party hereby authorizes the Issuing Bank, and each Participating Bank, if and to the extent payment owed to the Issuing Bank, or such Participating Bank, as the case may be, is not made when due hereunder, to charge from time to time against any or all of the Account Party's accounts with the Issuing Bank or such Participating Bank, as the case may be, any amount so due.
(c) All computations of interest based on the Alternate Base Rate when based on Barclays' prime rate referred to in the definition of "Alternate Base Rate" and all computations of commissions and fees hereunder shall be made by the Agent on the basis of a year of 365 or 366 days, as the case may be. All other computations of interest hereunder (including computations of interest based on the CD Rate, the Eurodollar Rate and the Federal Funds Rate (including the Alternate Base Rate if and so long as such Rate is based on the Federal Funds Rate)), and of other amounts pursuant to Section 4.03 hereof, shall be made by the Agent or the party claiming such other amounts, as the case may be, on the basis of a year of 360 days. In each such case, such computation shall be made for the actual number of days (including the first day, but excluding the last day) occurring in the period for which such interest, commissions or fees are payable. Each such determination by the Agent or a Participating Bank, as the case may be, shall be conclusive and binding for all purposes, absent manifest error.
(d) Whenever any payment hereunder shall be stated to be due, or the last day of an Interest Period hereunder shall be stated to occur, on a day other than a Business Day, such payment shall be made and the last day of such Interest Period shall occur on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest, commissions and fees hereunder; provided, however, that if such extension would cause payment of interest on or principal of Eurodollar Rate Advances to be made, or the last day of an Interest Period for a Eurodollar Rate Advance to occur, in the next following calendar month, such payment shall be made on the next preceding Business Day and such reduction of time shall in such case be included in the computation of payment of interest hereunder.
(e) Unless the Agent shall have received notice from the Account Party prior to the date on which any payment is due to the Issuing Bank or the Participating Banks hereunder that the Account Party will not make such payment in full, the Agent may assume that the Account Party has made such payment in full to the Agent on such date and the Agent may, in reliance upon such assumption, cause to be distributed to the Issuing Bank and/or each Participating Bank on such due date an amount equal to the amount then due the Issuing Bank and/or such Participating Bank. If and to the extent the Account Party shall not have so made such payment in full to the Agent, the Issuing Bank and/or each such Participating Bank shall repay to the Agent forthwith on demand such amount distributed to the Issuing Bank and/or such Participating Bank, together with interest thereon, for each day from the date such amount is distributed to the Issuing Bank and/or such Participating Bank until the date the Issuing Bank and/or such Participating Bank repays such amount to the Agent, at the Federal Funds Rate.
(f) If, after the Agent has paid to the Issuing Bank or any Participating Bank any amount pursuant to subsection (a) above, such payment is rescinded or must otherwise be returned or must be paid over by the Agent or the Issuing Bank to any Person, whether pursuant to any bankruptcy or insolvency law, Section 4.04 hereof or otherwise, such Participating Bank shall, at the request of the Agent or the Issuing Bank, promptly repay to the Agent or the Issuing Bank, as the case may be, an amount equal to its ratable share of such payment, together with any interest required to be paid by the Agent or the Issuing Bank with respect to such payment.
SECTION 4.02. Default Interest. Any amounts payable hereunder that are not paid when due shall (to the fullest extent permitted by law) bear interest, from the date when due until paid in full, at the Default Rate, payable on demand.
SECTION 4.03. Yield Protection. (a) Change in Circumstances.
Notwithstanding any other provision herein, if after the date hereof, the
adoption of or any change in applicable law or regulation or in the
interpretation or administration thereof by any governmental authority
charged with the interpretation or administration thereof (whether or not
having the force of law) shall (i) change the basis of taxation of payments
to the Issuing Bank or any Participating Bank of the principal of or
interest on any Eurodollar Rate Advance or CD Rate Advance made by such
Participating Bank or any fees or other amounts payable hereunder (other
than changes in respect of taxes imposed on the overall net income of the
Issuing Bank or such Participating Bank, or its Applicable Lending Office,
by the jurisdiction in which the Issuing Bank or such Participating Bank
has its principal office or in which such Applicable Lending Office is
located or by any political subdivision or taxing authority therein), or
(ii) shall impose, modify or deem applicable any reserve, special deposit
or similar requirement against letters of credit (or participatory
interests therein) issued by, commitments or assets of, deposits with or
for the account of, or credit extended by, the Issuing Bank or such
Participating Bank (excluding, in the case of CD Rate Advances, any such
requirement included in the CD Rate), or (iii) shall impose on the Issuing
Bank or such Participating Bank any other condition affecting this
Agreement, the Letter of Credit or participatory interests therein or
Eurodollar Rate Advances or CD Rate Advances, and the result of any of the
foregoing shall be (A) to increase the cost to the Issuing Bank or such
Participating Bank of issuing, maintaining or participating in this
Agreement or the Letter of Credit or of agreeing to make, making or
maintaining any Advance or (B) to reduce the amount of any sum received or
receivable by the Issuing Bank or such Participating Bank hereunder
(whether of principal, interest or otherwise), then the Account Party will
pay to the Issuing Bank or such Participating Bank, upon demand, such
additional amount or amounts as will compensate the Issuing Bank or such
Participating Bank for such additional costs incurred or reduction
suffered.
(b) Capital. If the Issuing Bank or any Participating Bank shall have determined that the applicability of any law, rule, regulation or guideline adopted pursuant to or arising out of the July 1988 report of the Basle Committee on Banking Regulations and Supervisory Practices entitled "International Convergence of Capital Measurement and Capital Standards", or the adoption after the date hereof of any law, rule, regulation or guideline regarding capital adequacy, or any change in any of the foregoing or in the interpretation or administration of any of the foregoing by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by the Issuing Bank or any Participating Bank (or any Applicable Lending Office of the Issuing Bank or such Participating Bank), or any holding company of any such entity, with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect (i) of reducing the rate of return on such entity's capital or on the capital of such entity's holding company, if any, as a consequence of this Agreement, the Letter of Credit or such entity's participatory interest therein, any Commitment hereunder or the portion of the Advances made by such entity pursuant hereto to a level below that which such entity or such entity's holding company could have achieved, but for such applicability, adoption, change or compliance (taking into consideration such entity's policies and the policies of such entity's holding company with respect to capital adequacy), or (ii) of increasing or otherwise determining the amount of capital required or expected to be maintained by such entity or such entity's holding company based upon the existence of this Agreement, the Letter of Credit or such entity's participatory interest therein, any Commitment hereunder, the portion of the Advances made by such entity pursuant hereto and other similar such credits, participations, commitments, agreements or assets, then from time to time the Account Party shall pay to the Issuing Bank or such Participating Bank, upon demand, such additional amount or amounts as will compensate such entity or such entity's holding company for any such reduction or allocable capital cost suffered.
(c) Eurodollar Reserves. The Account Party shall pay to each Participating Bank upon demand, so long as such Participating Bank shall be required under regulations of the Board of Governors of the Federal Reserve System to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency Liabilities, additional interest on the unpaid principal amount of such Participating Bank's portion of each Eurodollar Rate Advance, from the date of such Advance until such principal amount is paid in full, at an interest rate per annum equal at all times to the remainder obtained by subtracting (i) the rate described in clause (i) of the definition of "Eurodollar Rate" for the Interest Period for such Advance from (ii) the rate obtained by dividing such rate by a percentage equal to 100% minus the Eurodollar Reserve Percentage of such Participating Bank for such Interest Period. Such additional interest shall be determined by such Participating Bank and notified to the Account Party and the Issuing Bank.
(d) Breakage Indemnity. The Account Party shall indemnify each
Participating Bank against any loss, cost or reasonable expense which such
Participating Bank may sustain or incur as a consequence of (i) any failure
by the Account Party to fulfill on the date of any Advance or Conversion
hereunder the applicable conditions set forth in Articles III and V,
(ii) any failure by the Account Party to Convert any Advance hereunder
after irrevocable notice of Conversion has been given pursuant to
Section 3.04 hereof, (iii) any payment, prepayment or Conversion of a
Eurodollar Rate Advance or CD Rate Advance required or permitted by any
other provision of this Agreement or otherwise made or deemed made on a
date other than the last day of the Interest Period applicable thereto,
(iv) any default in payment or prepayment of the principal amount of any
Advance or any part thereof or interest accrued thereon, as and when due
and payable (at the due date thereof, by irrevocable notice of prepayment
or otherwise) or (v) the occurrence of any Event of Default, including, in
each such case, any loss or reasonable expense sustained or incurred or to
be sustained or incurred in liquidating or employing deposits from third
parties acquired to effect or maintain such Advance or any part thereof as
a Eurodollar Rate Advance or CD Rate Advance. Such loss, cost or
reasonable expense shall include an amount equal to the excess, if any, as
reasonably determined by such Participating Bank, of (A) its cost of
obtaining the funds for the Advance being paid, prepaid, Converted or not
borrowed (based on the Eurodollar Rate or CD Rate) for the period from the
date of such payment, prepayment, Conversion or failure to borrow to the
last day of the Interest Period for such Advance (or, in the case of a
failure to borrow, the Interest Period for such Advance which would have
commenced on the date of such failure) over (B) the amount of interest (as
reasonably determined by such Participating Bank) that would be realized by
such Participating Bank in reemploying the funds so paid, prepaid,
Converted or not borrowed for such period or Interest Period, as the case
may be. For purposes of this subsection (d), it shall be presumed that
each Participating Bank shall have funded each such Advance with a
fixed-rate instrument bearing the rates and maturities designated in the
determination of the applicable interest rate for such Advance.
(e) Notices. A certificate of the Issuing Bank or any Participating Bank setting forth such entity's claim for compensation hereunder and the amount necessary to compensate such entity or its holding company pursuant to subsections (a) through (d) of this Section 4.03 shall be submitted to the Account Party and the Issuing Bank and shall be conclusive and binding for all purposes, absent manifest error. The Account Party shall pay the Issuing Bank or such Participating Bank directly the amount shown as due on any such certificate within ten days after its receipt of the same. The failure of any entity to provide such notice or to make demand for payment under this Section 4.03 shall not constitute a waiver of such Participating Bank's rights hereunder; provided, that such entity shall not be entitled to demand payment pursuant to subsections (a) through (d) of this Section 4.03 in respect of any loss, cost, expense, reduction or reserve if such demand is made more than one year following the later of such entity's incurrence or sufferance thereof or such entity's actual knowledge of the event giving rise to such entity's rights pursuant to such subsections. The protection of this Section 4.03 shall be available to the Issuing Bank and each Participating Bank regardless of any possible contention of the invalidity or inapplicability of the law, rule, regulation, guideline or other change or condition which shall have occurred or been imposed.
(f) Change in Legality. Notwithstanding any other provision herein, if the adoption of or any change in any law or regulation or in the interpretation or administration thereof by any governmental authority charged with the administration or interpretation thereof shall make it unlawful for any Participating Bank to make or maintain any Eurodollar Rate Advance or to give effect to its obligations as contemplated hereby with respect to any Eurodollar Rate Advance, then, by written notice to the Account Party and the Issuing Bank, such Participating Bank may:
(i) declare that Eurodollar Rate Advances will not thereafter be made by such Participating Bank hereunder, whereupon the right of the Account Party to select Eurodollar Rate Advances for any Advance or Conversion shall be forthwith suspended until such Participating Bank shall withdraw such notice as provided hereinbelow or shall cease to be a Participating Bank hereunder; and
(ii) require that all outstanding Eurodollar Rate Advances be Converted to Base Rate Advances, in which event all Eurodollar Rate Advances shall be automatically Converted to Base Rate Advances as of the effective date of such notice as provided hereinbelow.
Upon receipt of any such notice, the Agent shall promptly notify the
Participating Banks thereof. Promptly upon becoming aware that the
circumstances that caused such Participating Bank to deliver such notice no
longer exist, such Participating Bank shall deliver notice thereof to the
Account Party and the Agent withdrawing such prior notice (but the failure
to do so shall impose no liability upon such Participating Bank). Promptly
upon receipt of such withdrawing notice from such Participating Bank, the
Agent shall deliver notice thereof to the Account Party and the
Participating Banks and such suspension shall terminate. Prior to any
Participating Bank giving notice to the Account Party under this subsection
(f), such Participating Bank shall use reasonable efforts to change the
jurisdiction of its Applicable Lending Office, if such change would avoid
such unlawfulness and would not, in the sole determination of such
Participating Bank, be otherwise disadvantageous to such Participating
Bank. Any notice to the Account Party by any Participating Bank shall be
effective as to each Eurodollar Rate Advance on the last day of the
Interest Period currently applicable to such Eurodollar Rate Advance;
provided that if such notice shall state that the maintenance of such
Advance until such last day would be unlawful, such notice shall be
effective on the date of receipt by the Account Party and the Agent.
(g) Market Rate Disruptions. If, (i) the Agent determines that an
adequate basis does not exist for the determination of the CD Rate for CD
Rate Advances, or the Eurodollar Rate for Eurodollar Rate Advances or
(ii) if the Majority Lenders shall notify the Agent that the Eurodollar
Rate or CD Rate, as the case may be, will not adequately reflect the cost
to such Majority Lenders of making, funding or maintaining their respective
Eurodollar Rate Advances or CD Rate Advances, the right of the Account
Party to select or receive or Convert into such Type of Advances shall be
forthwith suspended until the Agent shall notify the Account Party and the
Participating Banks that the circumstances causing such suspension no
longer exist, and until such notification from the Agent, each request for
or Conversion into such Type of Advance hereunder shall be deemed to be a
request for or Conversion into Base Rate Advances.
SECTION 4.04. Sharing of Payments, Etc. If any Participating Bank
shall obtain any payment (whether voluntary, involuntary, through the
exercise of any right of set-off, or otherwise, but excluding any proceeds
received by assignments or sales of participations in accordance with
Section 10.06 hereof to a Person that is not an Affiliate of the Account
Party) on account of the Advances owing to it (other than pursuant to
Section 4.03 hereof) in excess of its ratable share of payments on account
of the Advances obtained by all the Participating Banks, such Participating
Bank shall forthwith purchase from the other Participating Banks such
participation in the portions of the Advances owing to them as shall be
necessary to cause such purchasing Participating Bank to share the excess
payment ratably with each of them; provided, however, that if all or any
portion of such excess payment is thereafter recovered from such purchasing
Participating Bank, such purchase from each Participating Bank shall be
rescinded and such Participating Bank shall repay to the purchasing
Participating Bank the purchase price to the extent of such recovery
together with an amount equal to such Participating Bank's ratable share
(according to the proportion of (i) the amount of such Participating Bank's
required repayment to (ii) the total amount so recovered from the
purchasing Participating Bank) of any interest or other amount paid or
payable by the purchasing Participating Bank in respect of the total amount
so recovered. The Account Party agrees that any Participating Bank so
purchasing a participation from another Participating Bank pursuant to this
Section 4.04 may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of set-off) with respect to such
participation as fully as if such Participating Bank were the direct
creditor of the Account Party in the amount of such participation.
Notwithstanding the foregoing, if any Participating Bank shall obtain any
such excess payment involuntarily, such Participating Bank may, in lieu of
purchasing participation from the other Participating Banks in accordance
with this Section 4.04, on the date of receipt of such excess payment,
return such excess payment to the Agent for distribution in accordance with
Section 4.01(a) hereof.
SECTION 4.05. Taxes. (a) All payments by the Account Party hereunder shall be made in accordance with Section 4.01, free and clear of and without deduction for all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding, in the case of each Participating Bank and the Issuing Bank, taxes imposed on its overall net income, and franchise taxes imposed on it, by the jurisdiction under the laws of which such Participating Bank or the Issuing Bank (as the case may be) is organized or any political subdivision thereof and, in the case of each Participating Bank, taxes imposed on its overall net income, and franchise taxes imposed on it, by the jurisdiction of such Participating Bank's Applicable Lending Office or any political subdivision thereof (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as "Taxes"). If the Account Party shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder to any Participating Bank or the Issuing Bank, (i) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 4.05) such Participating Bank or the Issuing Bank (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Account Party shall make such deductions and (iii) the Account Party shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law.
(b) In addition, the Account Party agrees to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies that arise from any payment made hereunder or from the execution, delivery or registration of, or otherwise with respect to, this Agreement (hereinafter referred to as "Other Taxes").
(c) The Account Party will indemnify each Participating Bank and the Issuing Bank for the full amount of Taxes and Other Taxes (including, without limitation, any Taxes and any Other Taxes imposed by any jurisdiction on amounts payable under this Section 4.05) paid by such Participating Bank or the Issuing Bank (as the case may be) and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted. This indemnification shall be made within 30 days from the date such Participating Bank or the Issuing Bank (as the case may be) makes written demand therefor. If any Taxes or Other Taxes for which a Participating Bank or the Issuing Bank has received payments from the Account Party hereunder shall be finally determined to have been incorrectly or illegally asserted and are refunded to such Participating Bank, such Participating Bank shall promptly forward to the Account Party any such refunded amount. The Account Party's, the Issuing Bank's and each Participating Bank's obligations under this Section 4.05 shall survive the payment in full of the Advances.
(d) Within 30 days after the date of any payment of Taxes, the Account Party will furnish to the Issuing Bank, at its address referred to in Section 10.02 hereof, the original or a certified copy of a receipt evidencing payment thereof.
(e) Each Participating Bank not incorporated in the United States or
a jurisdiction within the United States shall, on or prior to the date it
becomes a Participating Bank hereunder, deliver to the Account Party and
the Issuing Bank such certificates, documents or other evidence, as
required by the Internal Revenue Code of 1986, as amended from time to time
(the "Code"), or treasury regulations issued pursuant thereto, including
Internal Revenue Service Form 4224 and any other certificate or statement
of exemption required by Treasury Regulation Section 1.1441-1(a) or
Section 1.1441-6(c) or any subsequent version thereof, properly completed
and duly executed by such Participating Bank establishing that it is
(i) not subject to withholding under the Code or (ii) totally exempt from
United States of America tax under a provision of an applicable tax treaty.
Each Participating Bank shall promptly notify the Account Party and the
Issuing Bank of any change in its Applicable Lending Office and shall
deliver to the Account Party and the Issuing Bank together with such notice
such certificates, documents or other evidence referred to in the
immediately preceding sentence. Unless the Account Party and the Issuing
Bank have received forms or other documents satisfactory to them indicating
that payments hereunder are not subject to United States of America
withholding tax or are subject to such tax at a rate reduced by an
applicable tax treaty, the Account Party or the Issuing Bank shall withhold
taxes from such payments at the applicable statutory rate in the case of
payments to or for any Participating Bank organized under the laws of a
jurisdiction outside the United States of America. Each Participating Bank
represents and warrants that each such form supplied by it to the Issuing
Bank and the Account Party pursuant to this Section 4.05, and not
superseded by another form supplied by it, is or will be, as the case may
be, complete and accurate.
(f) Any Participating Bank claiming any additional amounts payable pursuant to this Section 4.05 shall use reasonable efforts (consistent with legal and regulatory restrictions) to file any certificate or document requested by the Account Party or to change the jurisdiction of its Applicable Lending Office if the making of such a filing or change would avoid the need for or reduce the amount of any such additional amounts which may thereafter accrue and would not, in the sole determination of such Participating Bank, be otherwise disadvantageous to such Participating Bank.
SECTION 4.06. Obligations Absolute. The obligations of the Account Party under this Agreement shall be unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement (as the same may be amended from time to time) under all circumstances, including, without limitation, the following circumstances:
(i) any lack of validity or enforceability of this Agreement or any of the Security Documents or Related Documents or any document or agreement delivered in connection therewith;
(ii) any change in the time, manner or place of payment of, or in any other term of, all or any of the obligations of the Account Party in respect of the Letter of Credit or any other amendment or waiver of or any consent to departure from all or any of the Loan Documents or the Related Documents or any document or agreement delivered in connection therewith;
(iii) the existence of any claim, set-off, defense or other right which the Account Party may have at any time against the Paying Agent, the Trustee or any other beneficiary, or any transferee, of the Letter of Credit (or any persons or entities for whom the Paying Agent, the Trustee, any such beneficiary or any such transferee may be acting), the Agent, the Issuing Bank, or any other person or entity, whether in connection with this Agreement, the transactions contemplated in any of the Loan Documents or the Related Documents, or any unrelated transaction;
(iv) any statement or any other document presented under the Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect, except to the extent that a court of competent jurisdiction shall determine that the Issuing Bank shall have engaged in gross negligence or willful misconduct with respect thereto;
(v) payment by the Issuing Bank under the Letter of Credit against presentation of a draft or certificate which does not comply with the terms of the Letter of Credit, except to the extent that a court of competent jurisdiction shall determine that the Issuing Bank shall have engaged in gross negligence or willful misconduct with respect thereto;
(vi) any exchange of, release of or non-perfection of any interest in any collateral, or any release or amendment or waiver of or consent to departure from any guarantee, for all or any of the obligations of the Account Party in respect of the Letter of Credit; or
(vii) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing.
SECTION 4.07. Evidence of Indebtedness. The Issuing Bank and each Participating Bank shall maintain, in accordance with their usual practice, an account or accounts evidencing the indebtedness of the Account Party resulting from each drawing under the Letter of Credit (in the case of the Issuing Bank) and from each Advance (in the case of each Participating Bank) made from time to time hereunder and the amounts of principal and interest payable and paid from time to time hereunder. In any legal action or proceeding in respect of this Agreement, the entries made in such account or accounts shall, in the absence of manifest error, be conclusive evidence of the existence and amounts of the obligations of the Account Party therein recorded.
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.01. Conditions Precedent to the Issuance of the Letter of Credit. The obligation of the Issuing Bank to issue the Letter of Credit and of each Participating Bank to make the Advances to be made by it is subject to the fulfillment of the conditions precedent that the Agent shall have received on or before the day of such issuance the following, each dated such day (except where specified otherwise below), in form and substance satisfactory to each Participating Bank (except where specified otherwise below) and in sufficient copies for each Participating Bank:
(a) Agreements:
(i) Counterparts of this Agreement, duly executed and delivered by the Account Party, the Agent, the Issuing Bank and each Participating Bank listed on the signature pages hereto.
(ii) Counterparts of the Pledge Amendment, duly executed by the Account Party, Citibank, the Agent and the Issuing Bank, and copies of the Pledge Agreement.
(iii) Executed copies (or duplicate copies thereof certified as of the Closing Date by the Account Party in a manner satisfactory to the Agent to be a true copy) of each other Security Document, duly executed by the parties thereto.
(iv) For each Participating Bank who shall so request, executed copies (or duplicate copies thereof certified as of the Closing Date by the Account Party in a manner satisfactory to the Agent to be a true copy) of each of the Financing Agreements, together with all amendments, modifications and supplements thereto, in each such case duly executed by the respective parties thereto.
(v) For each Participating Bank who shall so request, executed copies (or duplicate copies thereof certified as of the Closing Date by the Account Party in a manner satisfactory to the Agent to be a true copy) of the Rate Agreement and each Significant Contract and all amendments, modifications and supplements thereto, in each such case duly executed by the respective parties thereto.
(b) Corporate Matters:
(i) A certificate of the Secretary of the Account Party certifying (as to the Account Party) and of the Secretary of NUSCO certifying (as to NUSCO) that attached thereto are (A) true and correct copies of the Articles of Incorporation of the Account Party and the By-laws of the Account Party, in each case as in effect on the Closing Date and (B) true and correct copies of the resolutions of the Boards of Directors of the Account Party and of NUSCO approving, if and to the extent necessary, this Agreement, the other Loan Documents, the Related Documents to which it is a party and the other documents to be delivered by or on behalf of the Account Party hereunder and thereunder, and of all documents evidencing other necessary corporate action, if any, with respect to the execution, delivery and performance by or on behalf of the Account Party of this Agreement, the other Loan Documents and such Related Documents and certifying that such resolutions and other corporate actions, if any, are in full force and effect and have not been revoked, rescinded or modified.
(ii) A certificate of the Secretary of the Account Party certifying (as to the Account Party) and of the Secretary of NUSCO certifying (as to NUSCO) the names and true signatures of the officers of the Account Party and/or NUSCO authorized to sign this Agreement, the other Loan Documents, the Related Documents to which it is a party and the other documents to be delivered hereunder and thereunder.
(c) Governmental Approvals, Litigation and the Merger:
(i) A certificate of a duly authorized officer of the Account Party certifying that Schedule IV hereto includes a description of all pending or known threatened actions or proceedings affecting the Account Party or its properties before any court, governmental agency or arbitrator, which may, if adversely determined (i) purport to affect the legality, validity or enforceability of the Plan, the Rate Agreement, any Loan Document, any Related Document or any Significant Contract or (ii) materially adversely affect the financial condition, properties, prospects or operations of the Account Party.
(ii) A certificate signed by the Assistant General Counsel of the Account Party certifying that no court shall have granted a motion for stay or any request for similar relief in connection with the Plan, the Merger, the Loan Documents, the Related Documents, the Initial First Mortgage Bonds, the Preferred Stock or the transactions contemplated thereunder.
(iii) Certificates signed by duly authorized officers of the Account Party and NU to the effect that all conditions to the occurrence of the Merger were satisfied or waived and the Merger was consummated on June 5, 1992.
(iv) For each Participating Bank who shall so request, true and complete photocopies of all documents delivered by the Account Party pursuant to the Financing Agreements in connection with the consummation of the Merger.
(d) Financial, Accounting and Compliance Matters:
(i) An audited balance sheet of the Account Party as at December 31, 1991 and the related statements of the Account Party's results of operations, retained earnings and cash flows for and as of the year then ended, and an unaudited balance sheet of the Account Party as at June 30, 1992 and the related unaudited statements of the Account Party's results of operations, retained earnings and cash flows for and as of the quarter then ended.
(ii) A certificate signed by the Treasurer or Assistant Treasurer of the Account Party, certifying as to the absence of any material adverse change in the financial condition, operations, properties or prospects of the Account Party since December 31, 1991.
(iii) Financial projections, on assumptions acceptable to the
Participating Banks, demonstrating projected compliance with
Section 7.01(j) hereof and the terms of this Agreement and the
Financing Agreements.
(iv) A certificate signed by the Chief Financial Officer, Treasurer or Assistant Treasurer of NU, certifying as to the absence of any material adverse change in the financial condition, operations, properties or prospects of NU since December 31, 1991.
(v) A certificate of a duly authorized officer of the Account Party describing in reasonable detail all insurance policies and self- insurance programs maintained by the Account Party relating to property insurance and liability insurance, which shall comply with the requirements of Section 7.01(c) hereof, and certifying that all such policies are fully paid and in full force and effect.
(vi) A certificate of a duly authorized officer of the Account Party to the effect that:
(A) the representations and warranties contained in Section 6.01 are correct in all material respects on and as of the Closing Date before and after giving effect to the issuance of the Letter of Credit;
(B) no event has occurred and is continuing which constitutes an Event of Default or Unmatured Default, or would result from the issuance of the Letter of Credit;
(C) The Financing Agreements are in full force and effect and no "Event of Default" or "Unmatured Default" (as defined therein) has occurred and is continuing;
(D) The Initial First Mortgage Bonds have been issued and are outstanding, and no "Event of Default" (as defined in the First Mortgage Indenture) has occurred and is continuing; and
(E) The Series F First Mortgage Bonds have been duly issued to the Trustee in accordance with the Indenture, are presently outstanding, and no "Event of Default" (as defined in the First Mortgage Indenture) has occurred and is continuing.
(e) Relating to the Issuance of the Bonds and the Substitution of the Letter of Credit:
(i) An executed copy (or a duplicate copy thereof certified by the Account Party in a manner satisfactory to the Agent to be a true copy) of the Remarketing Agreement, duly executed by the Remarketing Agent and the Account Party.
(ii) An executed copy (or a duplicate copy thereof certified by the Account Party in a manner satisfactory to the Agent to be a true copy) of the Purchase Contract, duly executed by Goldman, Sachs & Co., Morgan Stanley & Co. Incorporated, the Issuer and the Account Party.
(iii) An executed copy (or a duplicate copy thereof certified by the Account Party in a manner satisfactory to the Agent to be a true copy) of the certificate from the Issuer delivered pursuant to Section 7(a)(iii) of the Purchase Contract, together with a certified copy of the Issuer Resolution and copies of all other proceedings of the Issuer relative to the issuance of the Bonds.
(iv) An executed copy (or a duplicate copy thereof certified by
the Account Party in a manner satisfactory to the Agent to be a true
copy) of the certificate from the Account Party delivered pursuant to
Section 7(c)(iv) of the Purchase Contract.
(v) An executed copy (or a duplicate copy thereof certified by the Account Party in a manner satisfactory to the Agent to be a true copy) of the certificates from each of NU and NUSCO delivered pursuant to Section 7(d)(ii)(A) and Section 7(d)(ii)(B), respectively, of the Purchase Contract.
(vi) A letter from Palmer & Dodge, Bond Counsel, addressed to the Agent, the Issuing Bank and the Participating Banks and stating therein that the Agent, the Issuing Bank and the Participating Banks may rely on the opinion of such firm in the form of Exhibit A-1 to the Purchase Contract and delivered pursuant to Section 7(k)(i) of the Purchase Contract, together with a copy of such opinion.
(vii) A letter from Palmer & Dodge, counsel to the Issuer, addressed to the Agent, the Issuing Bank and the Participating Banks and stating therein that the Agent, the Issuing Bank and the Participating Banks may rely on the opinions of such firm in the form of Exhibits B-1 and B-2 to the Purchase Contract and delivered pursuant to Section 7(k)(ii) of the Purchase Contract, together with copies of such opinions.
(viii) A letter from Sulloway & Hollis, New Hampshire counsel to the Account Party, addressed to the Agent, the Issuing Bank and the Participating Banks and stating therein that the Agent, the Issuing Bank and the Participating Banks may rely on the opinion of such firm in the form of Exhibit C-1 to the Purchase Contract and delivered pursuant to Section 7(k)(iii) of the Purchase Contract, and the opinion of such firm in the form of Exhibit 5.02B of the Original Reimbursement Agreement and delivered pursuant to Section 5.02(a)(xxxii)(B) of the Original Reimbursement Agreement, together with copies of such opinions.
(ix) A letter from Day, Berry & Howard, counsel to NU and NUSCO,
addressed to the Agent, the Issuing Bank and the Participating Banks
and stating therein that the Agent, the Issuing Bank and the
Participating Banks may rely on the opinion of such firm in the form
of Exhibit C-2 to the Purchase Contract and delivered pursuant to
Section 7(k)(iii) of the Purchase Contract, and the opinion of such
firm in the form of Exhibit 5.02A of the Original Reimbursement
Agreement and delivered pursuant to Section 5.02(a)(xxxii)(A) of the
Original Reimbursement Agreement, together with copies of such
opinions.
(x) A letter from Pierre O. Caron, Assistant General Counsel of the Account Party, addressed to the Agent, the Issuing Bank and the Participating Banks and stating therein that the Agent, the Issuing Bank and the Participating Banks may rely on the opinion of such individual in the form of Exhibit C-3 to the Purchase Contract and delivered pursuant to Section 7(k)(iii) of the Purchase Contract, and the opinion of such firm in the form of Exhibit 5.02C of the Original Reimbursement Agreement and delivered pursuant to Section 5.02(a)(xxxii)(C) of the Original Reimbursement Agreement, together with copies of such opinion.
(xi) A letter from Drummond Woodsum Plimpton & MacMahon, special Maine counsel to the Account Party, addressed to the Agent, the Issuing Bank and the Participating Banks and stating therein that the Agent, the Issuing Bank and the Participating Banks may rely on the opinion of such firm in the form of Exhibit 5.02D of the Original Reimbursement Agreement and delivered pursuant to Section 5.02(a)(xxxii)(D) of the Original Reimbursement Agreement, together with a copy of such opinion.
(xii) A letter from Zuccaro, Willis & Bent, special Vermont counsel to the Account Party, addressed to the Agent, the Issuing Bank and the Participating Banks and stating therein that the Agent, the Issuing Bank and the Participating Banks may rely on the opinion of such firm in the form of Exhibit 5.02E of the Original Reimbursement Agreement and delivered pursuant to Section 5.02(a)(xxxii)(E) of the Original Reimbursement Agreement, together with a copy of such opinion.
(xiii) A letter from Palmer & Dodge, addressed to the Agent, the Issuing Bank and the Participating Banks and stating therein that the Agent, the Issuing Bank and the Participating Banks may rely on any opinion delivered by such firm pursuant to Section 7(k)(vi) of the Purchase Contract, together with a copy of such opinion.
(xiv) Copies of the Official Statement used, and of any amendment, supplement or "sticker" to the Official Statement to be used, in connection with the offering and remarketing of the Bonds.
(xv) Copies of all such documents and materials (including opinions of counsel or reliance letters in respect thereof) as the Agent, the Issuing Bank or any Participating Bank may reasonably request relating to the issuance, offering and sale of the Series F First Mortgage Bonds.
(f) Opinions of Counsel:
Favorable opinions of:
(i) Day, Berry & Howard, counsel to the Account Party, in substantially the form of Exhibit 5.01A and as to such other matters as the Majority Lenders, through the Agent, may reasonably request;
(ii) Rath, Young, Pignatelli and Oyer, P.A., special New Hampshire counsel to the Account Party, in substantially the form of Exhibit 5.01B and as to such other matters as the Majority Lenders, through the Agent, may reasonably request;
(iii) Pierre O. Caron, Assistant General Counsel of the Account Party, in substantially the form of Exhibit 5.01C and as to such other matters as the Majority Lenders, through the Agent, may reasonably request;
(iv) Drummond Woodsum Plimpton & MacMahon, special Maine counsel to the Account Party, in substantially the form of Exhibit 5.01D and as to such other matters as the Majority Lenders, through the Agent, may reasonably request;
(v) Zuccaro Willis & Bent, special Vermont counsel to the Account Party, in substantially the form of Exhibit 5.02E and as to such other matters as the Majority Lenders, through the Agent, may reasonably request; and
(vi) Porter & Travers, special New York counsel to the Agent and the Issuing Bank, in substantially the form of Exhibit 5.01F.
(g) Miscellaneous:
(i) A certificate of Citibank to the effect that (A) all amounts payable to it in connection with the Original Reimbursement Agreement and the letter of credit issued thereunder have been paid to it and (B) it thereby surrenders any and all rights it may have under the Related Documents arising in connection with the Original Reimbursement Agreement and the letter of credit issued thereunder, except for any such rights it may have as an indemnified party thereunder.
(ii) Letters from S&P and Moody's to the effect that the Bonds have been rated A-1+ and P-1, respectively, such letters to be in form and substance satisfactory to the Issuing Bank.
(iii) Such other approvals, opinions and documents as the Majority Lenders, through the Issuing Bank, may reasonably request as to the legality, validity, binding effect or enforceability of the Loan Documents or the financial condition, properties, operations or prospects of the Account Party.
SECTION 5.02. Additional Conditions Precedent to the Issuance of the Letter of Credit. The obligation of the Issuing Bank to issue the Letter of Credit and of each Participating Bank to make the Advances to be made by it shall be subject to the further conditions precedent that, on the date of the issuance of the Letter of Credit:
(a) the representations and warranties contained in Section 6.01 shall be correct in all material respects on and as of the Closing Date before and after giving effect to the issuance of the Letter of Credit;
(b) no event shall have occurred and be continuing which constitutes an Event of Default or Unmatured Default, or would result from the issuance of the Letter of Credit;
(c) The Financing Agreements shall be in full force and effect and no "Event of Default" or "Unmatured Default" (as defined therein) shall have occurred and be continuing;
(d) The Initial First Mortgage Bonds shall have been issued and be outstanding, and no "Event of Default" (as defined in the First Mortgage Indenture) shall have occurred and be continuing;
(e) The Series F First Mortgage Bonds shall have been duly issued to the Trustee in accordance with the Indenture, and be outstanding, and no "Event of Default" (as defined in the First Mortgage Indenture) shall have occurred and be continuing; and
(f) The Account Party shall have paid all fees under or referenced in Section 2.03 hereof, to the extent then due and payable.
SECTION 5.03. Conditions Precedent to Initial Advances and Conversions of Advances. The obligation of each Participating Bank to make any Initial Advance or to Convert any Term Advance shall be subject to the conditions precedent that, on the date of such Initial Advance or Conversion, the following statements shall be true:
(a) the representations and warranties contained in
Section 6.01 of this Agreement (other than the last sentence of
subsection (e) and clause (ii) of subsection (f) thereof) are true and
correct on and as of the date of such Initial Advance or Conversion,
before and after giving effect to such Initial Advance or Conversion
and to the application of the proceeds (if any) therefrom, as though
made on and as of such date; and
(b) no event has occurred and is continuing which constitutes an Event of Default.
Unless the Account Party shall have previously advised the Agent in
writing that one or more of the statements contained in subsections (a) and
(b) of this Section 5.03 is no longer true, the Account Party shall be
deemed to have represented and warranted, on and as of the date of any
Initial Advance or Conversion, that the above statements are true.
SECTION 5.04. Conditions Precedent to Term Advances. The obligation of each Participating Bank to make any Term Advance shall be subject to the conditions precedent that, on the date of such Term Advance the following statements shall be true:
(a) the representations and warranties contained in Section 6.01 of this Agreement (including the last sentence of subsection (e) and clause (ii) of subsection (f) thereof) are true and correct on and as of the date of such Term Advance, before and after giving effect to such Term Advance and to the application of the proceeds therefrom, as though made on and as of such date; and
(b) no event has occurred and is continuing which constitutes an Event of Default or an Unmatured Default.
Unless the Account Party shall have previously advised the Agent in writing that one or more of the statements contained in subsections (a) and (b) of this Section 5.04 is no longer true, the Account Party shall be deemed to have represented and warranted, on and as of the date of any Term Advance, that the above statements are true.
SECTION 5.05. Reliance on Certificates. The Agent, the Issuing Bank and the Participating Banks shall be entitled to rely conclusively upon the certificates delivered from time to time by officers of the Account Party, NU, NUSCO and the other parties to the Loan Documents, Related Documents and the Significant Contracts as to the names, incumbency, authority and signatures of the respective persons named therein until such time as the Agent may receive a replacement certificate, in form acceptable to the Agent, from an officer of such Person identified to the Agent as having authority to deliver such certificate, setting forth the names and true signatures of the officers and other representatives of such Person thereafter authorized to act on behalf of such Person.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01. Representations and Warranties of the Account Party. The Account Party represents and warrants as follows:
(a) The Account Party is a corporation duly organized and validly existing under the laws of the State of New Hampshire. The Account Party is duly qualified to do business in, and is in good standing in, all other jurisdictions where the nature of its business or the nature of property owned or used by it makes such qualifications necessary.
(b) The execution, delivery and performance by the Account Party of the Rate Agreement and of each Loan Document, Related Document and Significant Contract to which it is a party, are within the Account Party's corporate powers, have been duly authorized by all necessary corporate action, and do not and will not contravene (i) the Account Party's charter or by-laws or (ii) any law or legal or contractual restriction binding on or affecting the Account Party; and such execution, delivery and performance do not or will not result in or require the creation of any Lien (other than pursuant to the Security Documents) upon or with respect to any of its properties.
(c) No Governmental Approval referred to in clauses (i) and (ii) in the definition of "Governmental Approvals" is required, or if required, has been duly obtained or made, and is in full force and effect; and except as set forth in Schedule IV hereto, all applicable periods of time for review, rehearing or appeal with respect thereto have expired; and the Account Party has obtained all Governmental Approvals referred to in clause (iii) in the definition of "Governmental Approvals", except those not yet required but which are obtainable in the ordinary course of business as and when required and those the absence of which would not materially adversely affect the financial condition, properties, prospects or operations of the Account Party as a whole.
(d) This Agreement, the Rate Agreement, each other Loan Document, Related Document and each Significant Contract to which the Account Party is a party have been duly executed and delivered by or on behalf of the Account Party and are legal, valid and binding obligations of the Account Party enforceable against the Account Party in accordance with their respective terms; subject to the qualifications, however, that the enforcement of the rights and remedies herein and therein is subject to bankruptcy and other similar laws of general application affecting rights and remedies of creditors, that the remedy of specific performance or of injunctive relief is subject to the discretion of the court before which any proceedings therefor may be brought, and that indemnification against violations of securities and similar laws may be subject to matters of public policy.
(e) The audited balance sheet of the Account Party as at December 31, 1991, the unaudited balance sheet of the Account Party as at June 30, 1992 and the related statements of the Account Party setting forth the results of operations, retained earnings and cash flows of the Account Party for the fiscal year and fiscal quarter, respectively, then ended, copies of which have been furnished to each Participating Bank, fairly present in all material respects the financial condition, results of operations, retained earnings and cash flows of the Account Party at and for the year and fiscal quarter, respectively, ended on such dates, and have been prepared in accordance with generally accepted accounting principles consistently applied (subject, in the case of such unaudited statements, to normal year- end audit adjustments). Except as reflected in such financial statements, the Account Party has no material non-contingent liabilities, and all contingent liabilities have been appropriately reserved. The financial projections referred to in Section 5.01(d)(iii) hereof, have been prepared in good faith and on reasonable assumptions. Since December 31, 1991, there has been no material adverse change in the Account Party's financial condition, operations, properties or prospects.
(f) Except as set forth in Schedule IV hereto or in the certificate
referred to in Section 5.01(c)(i) hereof, there is no pending or known
threatened action or proceeding (including, without limitation, any action
or proceeding relating to any environmental protection laws or regulations)
affecting the Account Party or its properties before any court,
governmental agency or arbitrator, which may, if adversely determined,
(i) purport to affect the legality, validity or enforceability of the Rate
Agreement, any Loan Document or Related Document or any Significant
Contract or (ii) materially adversely affect the financial condition,
properties, prospects or operations of the Account Party as a whole.
(g) All insurance required by Section 7.01(c) hereof is in full force and effect.
(h) No ERISA Plan Termination Event has occurred nor is reasonably expected to occur with respect to any ERISA Plan which would materially adversely affect the financial condition, properties, prospects or operations of the Account Party, except as disclosed to and consented by the Majority Lenders in writing. Since the date of the most recent Schedule B (Actuarial Information) to the annual report of the Account Party (Form 5500 Series), if any, there has been no material adverse change in the funding status of the ERISA Plans referred to therein and no "prohibited transaction" has occurred with respect thereto, except as described in the Account Party's Annual Report on Form 10-K for the year ended December 31, 1991. Neither the Account Party nor any of its ERISA Affiliates has incurred nor reasonably expects to incur any material withdrawal liability under ERISA to any ERISA Multiemployer Plan, except as disclosed to and consented by the Majority Lenders in writing.
(i) The Major Electric Generating Plants are on land in which the Account Party owns a full or an undivided fee interest subject only to Liens permitted by Section 7.02(a) hereof, which do not materially impair the usefulness to the Account Party of such properties; the electric transmission and distribution lines of the Account Party in the main are located in New Hampshire and on land owned in fee by the Account Party or over which the Account Party has easements, or are in or over public highways or public waters pursuant to adequate statutory or regulatory authority, and any defects in the title to such transmission and distribution lands or easements are in the main curable by the exercise of the Account Party's right of eminent domain upon a finding that such eminent domain proceedings are necessary to meet the reasonable requirements of service to the public; the Account Party enjoys peaceful and undisturbed possession under all of the leases under which it is operating, none of which contains any unusual or burdensome provision which will materially affect or impair the operation of the Account Party; and the Security Documents will create valid Liens in the Collateral, subject only to Liens permitted by Section 7.02(a) hereof, and all filings and other actions necessary to perfect and protect such security interests (to the extent such security interests may be perfected or protected by filing) have been taken; provided, however, that no representation is made as to any Lien purported to be created in favor of the Trustee with respect to any interest of the Issuer in the Indenture.
(j) No material part of the properties, business or operations of the Account Party are materially adversely affected by any fire, explosion, accident, strike, lockout or other labor disputes, drought, storm, hail, earthquake, embargo, act of God or of the public enemy or other casualty (except for any such circumstance, if any, which is covered by insurance which coverage has been confirmed and not disputed by the relevant insurer or by fully-funded self-insurance programs).
(k) The Account Party has filed all tax returns (Federal, state and local) required to be filed and paid taxes shown thereon to be due, including interest and penalties, or, to the extent the Account Party is contesting in good faith an assertion of liability based on such returns, has provided adequate reserves in accordance with generally accepted accounting principles for payment thereof.
(l) No exhibit, schedule, report or other written information provided by the Account Party or its agents to the Agent, the Issuing Bank or the Participating Banks in connection with the negotiation, execution and closing of this Agreement (including, without limitation, the Information Memorandum and the Official Statement) knowingly contained when made any material misstatement of fact or knowingly omitted to state any material fact necessary to make the statements contained therein not misleading in light of the circumstances under which they were made.
(m) No event has occurred and is continuing which constitutes a material default under the Rate Agreement or any Significant Contract.
(n) No proceeds of any Advance will be used (i) to acquire any equity security of a class which is registered pursuant to Section 12 of the Securities Exchange Act of 1934 or (ii) to buy or carry any margin stock (within the meaning of Regulation U issued by the Board of Governors of the Federal Reserve System) or to extend credit to others for such purpose. The Account Party (X) is not an "investment company" within the meaning ascribed to that term in the Investment Company Act of 1940 or (Y) is not engaged in the business of extending credit for the purpose of buying or carrying margin stock.
ARTICLE VII
COVENANTS OF THE ACCOUNT PARTY
SECTION 7.01. Affirmative Covenants. So long as any amounts shall remain available to be drawn under the Letter of Credit or any Advance or other amounts shall remain unpaid hereunder or any Participating Bank shall have any Commitment, the Account Party will, unless the Majority Lenders shall otherwise consent in writing:
(a) Use of Proceeds. Apply all proceeds of each Advance solely as specified in Section 3.02 and Section 6.01(n) hereof.
(b) Payment of Taxes, Etc. Pay and discharge before the same shall become delinquent, all taxes, assessments and governmental charges, royalties or levies imposed upon it or upon its property except to the extent the Account Party is contesting the same in good faith by appropriate proceedings and has set aside adequate reserves for the payment thereof.
(c) Maintenance of Insurance. Maintain, or cause to be maintained, insurance (including appropriate plans of self-insurance) covering the Account Party and its properties in effect at all times in such amounts and covering such risks as may be required by law and in addition as is usually carried by companies engaged in similar businesses and owning similar properties.
(d) Preservation of Existence, Etc. Preserve and maintain its corporate existence, material rights (statutory and otherwise) and franchises except as otherwise expressly provided in the Plan or in the Pledge Agreement, the PSNH Mortgage, or the Collateral Agency Agreement referred to in the Financing Agreements.
(e) Compliance with Laws, Etc. Comply in all material respects with the requirements of all applicable laws, rules, regulations and orders of any governmental authority, including without limitation any such laws, rules, regulations and orders relating to utilities, zoning, environmental protection, use and disposal of Hazardous Substances, land use, construction and building restrictions, and employee safety and health matters relating to business operations, except to the extent (i) that the Account Party is contesting the same in good faith by appropriate proceedings or (ii) that any such non-compliance, and the enforcement or correction thereof, would not materially adversely affect the financial condition, properties, prospects or operations of the Account Party as a whole.
(f) Inspection Rights. At any time and from time to time upon reasonable notice, permit the Issuing Bank and its agents and representatives to examine and make copies of and abstracts from the records and books of account of, and the properties of, the Account Party and to discuss the affairs, finances and accounts of the Account Party with the Account Party and of its officers, directors and accountants.
(g) Keeping of Books. Keep proper records and books of account, in which full and correct entries shall be made of all financial transactions of the Account Party and the assets and business of the Account Party, in accordance with good accounting practices consistently applied.
(h) Performance of Related Agreements. Perform and observe all material terms and provisions of the Rate Agreement and each Significant Contract to be performed or observed by the Account Party and take all reasonable steps to enforce such agreements substantially in accordance with their terms and to preserve the rights of the Account Party thereunder; provided, that the foregoing provisions of this Section 7.01(h) shall not preclude the Account Party from any waiver, amendment, modification, consent or termination permitted under Section 7.02(h) hereof.
(i) Collection of Accounts Receivable. Promptly bill, and diligently pursue collection of, in accordance with customary utility practices, all accounts receivable owing to the Account Party and all other amounts that may from time to time be owing to the Account Party for services rendered or goods sold.
(j) Common Equity to Total Capitalization Ratio. Maintain at all times a ratio of Common Equity to Total Capitalization of not less than the respective ratio specified below:
Period Ratio Closing Date through and including June 30, 1993 0.20:1 July 1, 1993 through and including June 30, 1994 0.21:1 July 1, 1994 through and including June 30, 1995 0.23:1 July 1, 1995 through and including the Termination Date 0.25:1 |
(k) Maintenance of Properties, Etc. (i) As to properties of the type described in Section 6.01(i) hereof, maintain title of the quality described therein; and (ii) preserve, maintain, develop, and operate in substantial conformity with all laws, material contractual obligations and prudent practices prevailing in the industry, all of its properties which are used or useful in the conduct of its business in good working order and condition, ordinary wear and tear excepted, except to the extent such non- conformity would not materially adversely affect the financial condition, properties, prospects or operations of the Account Party as a whole.
(l) Governmental Approvals. Duly obtain on or prior to such date as the same may become legally required, and thereafter maintain in effect at all times, all Governmental Approvals on its part to be obtained, except those the absence of which would not materially adversely affect the financial condition, properties, prospects or operations of the Account Party as a whole.
(m) Further Assurances. Promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary or that any Participating Bank through the Issuing Bank may reasonably request in order to fully give effect to the interests and properties purported to be covered by the Security Documents.
(n) Related Documents. Perform and comply in all material respects with each of the provisions of each Related Document to which it is a party.
SECTION 7.02. Negative Covenants. So long as any amount shall remain available to be drawn under the Letter of Credit or any Advance or other amounts shall remain unpaid hereunder or any Participating Bank shall have any Commitment, the Account Party will not, without the written consent of the Majority Lenders:
(a) Liens, Etc. Create, incur, assume or suffer to exist any lien, security interest, or other charge or encumbrance (including the lien or retained security title of a conditional vendor) of any kind, or any other type of preferential arrangement the intent or effect of which is to assure a creditor against loss or to prefer one creditor over another creditor upon or with respect to any of its properties of any character (any of the foregoing being referred to herein as a "Lien") whether now owned or hereafter acquired, or sign or file under the Uniform Commercial Code of any jurisdiction a financing statement which names the Account Party as debtor, sign any security agreement authorizing any secured party thereunder to file such financing statement, or assign accounts, excluding, however, from the operation of the foregoing restrictions the Liens created or perfected under or in connection with the Pledge Agreement, the Pledge Agreement (as defined in the Series E Reimbursement Agreement), the Financing Agreements, the Notes and the Collateral Agency Agreement referred to in the Financing Agreements, the PSNH Mortgage, and the following, whether now existing or hereafter created or perfected:
(i) Liens on Property specifically reserved, excepted and excluded by subparagraphs (c) through (g) and subparagraph (j) following the Granting Clauses section of the First Mortgage Indenture;
(ii) Permitted Encumbrances (as defined in the PSNH Mortgage) on
the Indenture Assets (except Liens referred to in paragraphs (s) and
(t) of Schedule C to the PSNH Mortgage hereafter directly created by
the Account Party, provided, however, that the Account Party may
create any such Lien with the consent of the Majority Lenders (as
defined in the Financing Agreements) if such Lien would not materially
adversely affect the security granted under the PSNH Mortgage, as
determined by the Majority Lenders (as defined in the Financing
Agreements) in their reasonable discretion), provided that in no event
shall the outstanding principal amount of the First Mortgage Bonds
exceed at any time the First Mortgage Bond Amount (as defined in the
Financing Agreements); and
(iii) Liens referred to in paragraphs (b) through (t) of Schedule C to the PSNH Mortgage on realty or personalty that is subject to the Lien of the First Mortgage Indenture but is not also subject to the Lien of the PSNH Mortgage; provided, however, that the aggregate principal amount of the Debt at any one time outstanding secured by purchase money Liens permitted by paragraph (m) of Schedule C to the PSNH Mortgage, including Liens of a conditional vendor that are the functional equivalent of purchase money liens, shall not exceed $20,000,000.
(b) Debt. Create, incur or assume any Debt unless, after giving effect thereto, (i) no Event of Default or Unmatured Default shall have occurred and be continuing on the date of such creation, incurrence or assumption and (ii) the Account Party shall have determined that, on the basis of the assumptions and forecasts set forth in the most recent operating budget/forecast of operations delivered pursuant to Section 7.03(iv) hereof (which the Account Party continues to believe to be reasonable), the Account Party will continue to be in compliance at all times with the provisions of Section 7.01(j) hereof. The Account Party will furnish evidence of its compliance with this subsection (b) for each fiscal quarter pursuant to Section 7.03(ii) hereof.
(c) Mergers, Etc. Merge with or into or consolidate with or into, or acquire all or substantially all of the assets of, any Person.
(d) Sales, Etc., of Assets. Sell, lease, transfer or otherwise dispose of all or any substantial part of its assets (whether in a single transaction or series of transactions during any consecutive 12-month period) other than in the ordinary course of the Account Party's business in accordance with ordinary and customary terms and conditions.
For purposes of this subsection (d):
(i) all sales, leases, transfers or dispositions of receivables of the Account Party to any unaffiliated third party, except for collection in the ordinary course of the Account Party's business of delinquent accounts, shall be deemed to be substantial and outside of the ordinary course of the Account Party's business; and
(ii) any transaction or series of transactions during any consecutive 12-month period shall be deemed to involve a "substantial part" of the Account Party's assets if, in the aggregate, (A) the value of such assets equals or exceeds 10% of the total assets of the Account Party reflected in the financial statements of the Account Party delivered pursuant to Section 7.03(ii) or 7.03(iii) hereof in respect of the fiscal quarter or year ending on or immediately prior to the commencement of such 12-month period or (B) for the four calendar quarters ending on or immediately prior to commencement of such 12-month period, the gross revenue derived by the Account Party from such assets shall equal or exceed 10% of the total gross revenue of the Account Party.
(e) Investments in Other Persons. Make any loan or advance to any Person or purchase or otherwise acquire any capital stock, obligations or other securities of, make any capital contribution to, or otherwise invest in, any Person other than Permitted Investments and loans, advances, purchases and investments listed on Schedule III hereto.
(f) Restricted Payments. Declare or pay any dividend, or make any payment or other distribution of assets, properties, cash, rights, obligations or securities on account of any share of any class of capital stock of the Account Party (other than stock splits and dividends payable solely in equity securities of the Account Party), or purchase, redeem, retire, or otherwise acquire for value any shares of any class of capital stock of the Account Party or any warrants, rights, or options to acquire any such Debt or shares, now or hereafter outstanding, or make any distribution of assets to any of its shareholders (any such transaction being a "Restricted Payment") except for Restricted Payments made in compliance with the following conditions:
(i) The Account Party may not make any Restricted Payments if an Event of Default or Unmatured Default shall have occurred and be continuing.
(ii) The Account Party may not make any Restricted Payments during any fiscal quarter if, after giving effect thereto (and to the other computations set forth below in this clause (ii)), the Account Party would not be in full compliance with Section 7.01(j) hereof. For purposes of determining compliance with Section 7.01(j) under this clause (ii), computations under Section 7.01(j) shall be made as of the date of such Restricted Payment, except that, retained earnings shall be determined as of the last day of the immediately preceding fiscal quarter (adjusted for all Restricted Payments made after the last day of such preceding fiscal quarter).
(iii) The Account Party may not make any Restricted Payments unless, after giving effect thereto, the Account Party shall have determined that, on the basis of the assumptions and forecasts set forth in the most recent operating budget/forecast of operations delivered pursuant to Section 7.03(iv) hereof (which the Account Party continues to believe to be reasonable) the Account Party will continue to be in compliance at all times with the provisions of Section 7.01(j) hereof.
(iv) On or prior to May 16, 1993, the Account Party may make no Restricted Payments except out of that portion of earned surplus accumulated after May 16, 1991 in excess of $75,000,000 (determined in accordance with generally accepted accounting principles and without giving effect to charges to earned surplus on account of Restricted Payments or on account of transfers from earned surplus to capital surplus or capital stock accounts).
Notwithstanding anything contrary contained in this Section 7.02(f), the Account Party may declare and pay regularly scheduled quarterly dividends on the Preferred Stock and declare and pay into escrow, prior to the date required to be paid to holders of Preferred Stock, with respect to the fifth and sixth dividend periods following May 16, 1991 all or any part of the dividends scheduled to accrue during such periods, if, immediately prior to and after giving effect to any such payment, no Event of Default or Unmatured Default shall have occurred and be continuing.
(g) Compliance with ERISA. (i) Terminate, or permit any ERISA Affiliate to terminate, any ERISA Plan so as to result in any material (in the opinion of the Majority Lenders) liability of the Account Party to the PBGC, or (ii) permit to exist any occurrence of any Reportable Event (as defined in Title IV of ERISA), or any other event or condition, which presents a material (in the opinion of the Majority Lenders) risk of such a termination by the PBGC of any ERISA Plan and such a material liability to the Account Party.
(h) Related Agreements.
(i) Amendments. Amend, modify or supplement or give any consent, acceptance or approval to any amendment, modification or supplement or deviation by any party from the terms of, the Rate Agreement or any Significant Contract, except, with respect only to the Significant Contracts, any amendment, modification or supplement to such agreement that would not reduce the rights or entitlements of the Account Party thereunder in any material way.
(ii) Termination. Cancel or terminate (or consent to any cancellation or termination of) the Rate Agreement or any Significant Contract prior to the expiration of its stated term, provided that this subsection (ii) shall not restrict the rights of the Account Party to enforce any remedy against any obligor under any Significant Contract in the event of a material breach or default by such obligor thereunder if and so long as the Account Party shall have provided to the Issuing Bank at least 30 days prior written notice of the enforcement action proposed to be undertaken by the Account Party.
(i) Change in Nature of Business. Engage in any material business activity other than those established and engaged in on the date hereof or described in the Third Amended Disclosure Statement of NU, dated December 28, 1989 and filed with the Bankruptcy Court.
(j) Ownership in Seabrook and Nuclear Plants. Acquire, directly or indirectly, any ownership interest or any additional ownership interest of any kind in any nuclear-powered electric generating plant, except such additional ownership interest in Seabrook as may be acquired from the Vermont Electric Generation and Transmission Cooperative, Inc.
(k) Subsidiaries. Create or suffer to exist any active subsidiaries other than Properties, Inc., a New Hampshire corporation; or permit any material assets or business to be maintained at or conducted by any subsidiary except for the assets owned by Properties, Inc. not exceeding $20,000,000.
SECTION 7.03. Reporting Obligations. So long as any amount shall remain available to be drawn under the Letter of Credit or any Advance or other amounts shall remain unpaid hereunder or any Participating Bank shall have any Commitment, the Account Party will, unless the Majority Lenders shall otherwise consent in writing, furnish to the Agent in sufficient copies for the Issuing Bank and each Participating Bank, the following:
(i) as soon as possible and in any event within five (5) days after the occurrence of each Event of Default or Unmatured Default continuing on the date of such statement, a statement of the Chief Financial Officer, Treasurer or Assistant Treasurer of the Account Party setting forth details of such Event of Default or Unmatured Default and the action which the Account Party proposes to take with respect thereto;
(ii) as soon as available and in any event within fifty
(50) days after the end of each of the first three quarters of
each fiscal year of the Account Party, (A) if and so long as the
Account Party is required to submit to the Securities and
Exchange Commission a report on Form 10-Q, a copy of the Account
Party's report on Form 10-Q submitted to the Securities and
Exchange Commission with respect to such quarter and (B) if the
Account Party ceases to be required to submit such report, a
balance sheet of the Account Party as of the end of such quarter
and statements of income and retained earnings and of cash flows
of the Account Party for the period commencing at the end of the
previous fiscal year and ending with the end of such quarter, all
in reasonable detail and duly certified (subject to year-end
audit adjustments) by the Chief Financial Officer, Treasurer or
Assistant Treasurer of the Account Party as having been prepared
in accordance with generally accepted accounting principles
consistent with those applied in the preparation of the financial
statements referred to in Section 6.01(e) hereof, in each such
case, delivered together with a certificate of said officer
(x) stating that no Event of Default or Unmatured Default has
occurred and is continuing or, if an Event of Default or
Unmatured Default has occurred and is continuing, a statement as
to the nature thereof and the action which the Account Party
proposes to take with respect thereto, (y) demonstrating
compliance with Section 7.01(j) hereof for and as of the end of
such fiscal quarter and compliance with Sections 7.02(b) and (f)
hereof, as of the dates on which any Debt was created, incurred
or assumed (using the Account Party's most recent annual
actuarial determinations in the computation of Debt referred to
in clause (ix) in the definition of "Debt") or any Restricted
Payment was made during such quarter, and (z) demonstrating,
after giving effect to the incurrence of any Debt created,
incurred or assumed during such fiscal quarter (using the Account
Party's most recent annual actuarial determinations in the
computation of Debt referred to in clause (ix) in the definition
of "Debt") and after giving effect to any Restricted Payment made
during such fiscal quarter, compliance with Section 7.01(j)
hereof for the remainder of the fiscal year of the Account Party
based on the operating budget/forecast of operations delivered
pursuant to Section 7.03(iv) hereof for such fiscal year, such
demonstrations to be in a schedule (in form satisfactory to the
Majority Lenders) which sets forth the computations used by the
Account Party in determining such compliance;
(iii) as soon as available and in any event within 105
days after the end of each fiscal year of the Account Party,
(A) if and so long as the Account Party is required to submit to
the Securities and Exchange Commission a report on Form 10-K, a
copy of the Account Party's report on Form 10-K submitted to the
Securities and Exchange Commission with respect to such year and
(B) if the Account Party ceases to be required to submit such
report, a copy of the annual audit report for such year for the
Account Party including therein a balance sheet of the Account
Party as of the end of such fiscal year and statements of income
and retained earnings and of cash flows of the Account Party for
such fiscal year, in each case certified by a
nationally-recognized independent public accountant, in each such
case delivered together with a certificate of the Chief Financial
Officer, Treasurer or Assistant Treasurer (x) stating that the
financial statements were prepared in accordance with generally
accepted accounting principles consistent with those applied in
the preparation of financial statements referred to in Section
6.01(e) hereof, and that no Event of Default or Unmatured Default
has occurred and is continuing, or if an Event of Default or
Unmatured Default has occurred and is continuing, stating the
nature thereof and the action which the Account Party proposes to
take with respect thereto and (y) demonstrating compliance with
Section 7.01(j) hereof for and as of the end of such fiscal year
and compliance with Sections 7.02(b) and (f) hereof, as of the
dates on which any Debt was created, incurred or assumed (using
the Account Party's most recent annual actuarial determinations
in the computation of Debt referred to in clause (ix) in the
definition of "Debt") or any Restricted Payment was made during
the last fiscal quarter of the Account Party, such demonstrations
to be in a schedule (in form satisfactory to the Majority
Lenders) which sets forth the computations used by the Account
Party in determining such compliance.
(iv) as soon as available and in any event before March 31 of each fiscal year, a copy of an operating budget/forecast of operations of the Account Party as approved by the Board of Directors of the Account Party in form satisfactory to the Participating Banks for such fiscal year of the Account Party, together with a certificate of the Chief Financial Officer, Treasurer or Assistant Treasurer of the Account Party stating that such budget/forecast was prepared in good faith and on reasonable assumptions;
(v) as soon as available and in any event no later than the New Hampshire Public Utilities Commission shall have received the Account Party's annual submission, if any, relating to the "return on equity collar" referred to in the Rate Agreement, a copy of such annual submission of the Account Party;
(vi) as soon as possible and in any event (A) within 30 days after the Account Party knows or has reason to know that any ERISA Plan Termination Event described in clause (i) of the definition of ERISA Plan Termination Event with respect to any ERISA Plan or ERISA Multiemployer Plan has occurred and (B) within 10 days after the Account Party knows or has reason to know that any other ERISA Plan Termination Event with respect to any ERISA Plan or ERISA Multiemployer Plan has occurred, a statement of the Chief Financial Officer, Treasurer or Assistant Treasurer of the Account Party describing such ERISA Plan Termination Event and the action, if any, which the Account Party proposes to take with respect thereto;
(vii) promptly after receipt thereof by the Account Party or any of its ERISA Affiliates from the PBGC, copies of each notice received by the Account Party or any such ERISA Affiliate of the PBGC's intention to terminate any ERISA Plan or ERISA Multiemployer Plan or to have a trustee appointed to administer any ERISA Plan or ERISA Multiemployer Plan;
(viii) promptly and in any event within 30 days after the filing thereof with the Internal Revenue Service, copies of each Schedule B (Actuarial Information) to the annual report (Form 5500 Series) with respect to each ERISA Plan (if any) to which the Account Party is a contributing employer;
(ix) promptly after receipt thereof by the Account Party or any of its ERISA Affiliates from an ERISA Multiemployer Plan sponsor, a copy of each notice received by the Account Party or any of its ERISA Affiliates concerning the imposition or amount of withdrawal liability in an aggregate principal amount of at least $10,000,000 pursuant to Section 4202 of ERISA in respect of which the Account Party may be liable;
(x) promptly after the Account Party becomes aware of the occurrence thereof, notice of all actions, suits, proceedings or other events (A) of the type described in Section 6.01(f), or (B) which purport to affect the legality, validity or enforceability of any of the Loan Documents or Significant Contracts;
(xi) promptly after the sending or filing thereof, copies of all such proxy statements, financial statements, and reports which the Account Party sends to its public security holders (if any) or files with, and copies of all regular, periodic and special reports and all registration statements and periodic or special reports, if any, which the Account Party files with, the Securities and Exchange Commission or any governmental authority which may be substituted therefor, or with any national securities exchange;
(xii) promptly after receipt thereof, any assertion of the character described in Section 8.01(h) hereof and the action the Account Party proposes to take with respect thereto;
(xiii) promptly after knowledge of any material default under the Rate Agreement or any Significant Contract, notice of such default and the action the Account Party proposes to take with respect thereto;
(xiv) promptly after knowledge of any amendment, modification, or other change to the Rate Agreement or any Significant Contract or to any Governmental Approval affecting the Rate Agreement, notice of such amendment, modification or other change, it being understood that for purposes of this clause (xiv) any filing by the Account Party in the ordinary course of the Account Party's business with, or order issued or action taken by, a governmental authority or regulatory body after May 16, 1991 to implement the terms of the Rate Agreement shall not be considered an amendment, modification or change to a Governmental Approval affecting the Rate Agreement; and
(xv) promptly after requested, such other information respecting the financial condition, operations, properties, prospects or otherwise, of the Account Party as the Issuing Bank or Majority Lenders may from time to time reasonably request in writing.
ARTICLE VIII
DEFAULTS
SECTION 8.01. Events of Default. The following events shall each constitute an "Event of Default" if the same shall occur and be continuing after the grace period and notice requirement (if any) applicable thereto:
(a) The Account Party shall fail to pay any interest on any Advance or pursuant to Section 4.02 hereof within two days after the same becomes due; the Account Party shall fail to reimburse the Issuing Bank for any Interest Drawing (as defined in the Letter of Credit) within two days after such reimbursement becomes due; or the Account Party shall fail to make any other payment required to be made pursuant to Article II or Article III hereof when due; or
(b) Any representation or warranty made by the Account Party or NU (or any of their respective officers or agents) in this Agreement, the Pledge Agreement or the Purchase Contract, or in any certificate or other writing delivered pursuant to this Agreement or Section 7 of the Purchase Contract, shall prove to have been incorrect in any material respect when made or deemed made; or
(c) The Account Party shall fail to perform or observe any term or covenant on its part to be performed or observed contained in Sections 7.01(a), (d) or, (j), Section 7.02 or Section 7.03(i) hereof; or
(d) The Account Party shall fail to perform or observe any other term or covenant on its part to be performed or observed contained in this Agreement or the Pledge Agreement and such failure shall remain unremedied, after written notice thereof shall have been given to the Account Party by the Agent, the Issuing Bank or any Participating Bank, for a period of 30 days; or
(e) The Account Party shall fail to pay any of its Debt when due (including any interest or premium thereon but excluding Debt arising hereunder or under or in connection with the Financing Agreements and excluding other Debt aggregating in no event more than $10,000,000 in principal amount at any one time) whether by scheduled maturity, required prepayment, acceleration, demand or otherwise, and such failure shall continue after the applicable grace period, if any, specified in any agreement or instrument relating to such Debt; or any other default under any agreement or instrument relating to any such Debt, or any other event, shall occur and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such default or event is to accelerate, or to permit the acceleration of, the maturity of such Debt; or any such Debt (including, for purposes of this clause and the next succeeding clause of this Section 8.01(e), the Debt arising under or in connection with the Financing Agreements) shall be declared to be due and payable, or required to be prepaid (other than by a regularly scheduled required prepayment or as a result of the Account Party's exercise of a prepayment option) prior to the stated maturity thereof; unless in each such case the obligee under or holder of such Debt or the trustee with respect to such Debt shall have waived in writing such circumstance without consideration having been paid by the Account Party so that such circumstance is no longer continuing; or
(f) The Account Party shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall make an assignment for the benefit of creditors; or any proceeding shall be instituted by or against the Account Party seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of its debts under any law relating to bankruptcy, insolvency,or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, or other similar official for it or for any substantial part of its property and, in the case of a proceeding instituted against the Account Party, either the Account Party shall consent thereto or such proceeding shall remain undismissed or unstayed for a period of 90 days or any of the actions sought in such proceeding (including without limitation the entry of an order for relief against the Account Party or the appointment of a receiver, trustee, custodian or other similar official for the Account Party or any of its property) shall occur; or the Account Party shall take any corporate or other action to authorize any of the actions set forth above in this subsection (f); or
(g) Any judgment or order for the payment of money in excess of $10,000,000 shall be rendered against the Account Party or its properties and either enforcement proceedings shall have been commenced by any creditor upon such judgment or order and shall not have been stayed or there shall be any period of 15 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or
(h) Any material provision of any Loan Document, any Related Document, the Rate Agreement or any Significant Contract shall for any reason other than the express terms thereof or the exercise of any right or option expressly contained therein cease to be valid and binding on any party thereto except as otherwise expressly permitted by the exceptions and provisos contained in Section 7.02(h) hereof; or any party thereto other than the Participating Banks shall so assert in writing, provided that in the case of any party other than the Account Party making such assertion in respect of any Related Document, the Rate Agreement or any Significant Contract, such assertion shall not in and of itself constitute an Event of Default hereunder until (i) such asserting party shall cease to perform under and in compliance with such Related Document, the Rate Agreement or such Significant Contract, (ii) the Account Party shall fail to diligently prosecute, by appropriate action or proceedings, a rescission of such assertion or a binding determination as to the merits thereof or (iii) such a binding determination shall have been made in favor of such asserting party's position; or
(i) The Security Documents shall for any reason, except to the extent permitted by the terms thereof, fail or cease to create valid and perfected Liens (to the extent purported to be granted by such documents and subject to the exceptions permitted thereunder) in any of the Collateral (other than Liens in favor of the Trustee with respect to the interests of the Issuer under the Indenture), provided, that such failure or cessation relating to any non-material portion of such Collateral shall not constitute an Event of Default hereunder unless the same shall not have been corrected within 30 days after the Account Party becomes aware thereof; or
(j) The Account Party shall not have in full force and effect any or all insurance required under Section 7.01(c) hereof or there shall be incurred any uninsured damage, loss or destruction of or to the Account Party's properties in an amount not covered by insurance (including fully- funded self-insurance programs) which the Majority Lenders consider to be material; or
(k) A default by the Account Party shall have occurred under the Rate Agreement and shall not have been effectively cured within the time period specified therein for such cure (or, if no such time period is specified therein, 10 days); or a default by any party shall have occurred under any Significant Contract and such default shall not have been effectively cured within 30 days after notice from the Agent to the Account Party stating that, in the opinion of the Majority Lenders, such default may have a material adverse effect upon the financial condition, operations, properties or prospects of the Account Party as a whole; or
(l) Any Governmental Approval (whether federal, state or local) required to give effect to the Rate Agreement (including, without limitation, Chapter 362-C of the New Hampshire Revised Statutes and the enabling order of The New Hampshire Public Utilities Commission issued pursuant thereto) shall be amended, modified or supplemented, or any other regulatory or legislative action or change (whether federal, state or local) having the effect, directly or indirectly, of modifying the benefits or entitlements of the Account Party under the Rate Agreement shall occur, and in any such case such amendment, modification, supplement, action or change may have, in the opinion of the Majority Lenders, a material adverse effect upon the financial condition, operations, properties or prospects of the Account Party as a whole; or
(m) NU shall cease to own all of the outstanding common stock of the Account Party, free and clear of any Liens; or
(n) An event of default (as defined therein) shall have occurred and be continuing under the Indenture or the First Mortgage Indenture.
(o) An event of default (as defined therein) shall have occurred and be continuing under the Series E Reimbursement Agreement.
SECTION 8.02. Remedies Upon Events of Default. Upon the occurrence
and during the continuance of any Event of Default, then, and in any such
event, the Agent with the concurrence of the Issuing Bank may, and upon the
direction of the Majority Lenders the Agent shall (i) if the Letter of
Credit shall not have been issued, instruct the Issuing Bank to (whereupon
the Issuing Bank shall) by notice to the Account Party declare its
commitment to issue the Letter of Credit to be terminated, whereupon the
same shall forthwith terminate, (ii) if the Letter of Credit shall have
been issued, instruct the Issuing Bank to (whereupon the Issuing Bank
shall) furnish to the Trustee and the Paying Agent written notice of such
Event of Default in accordance with Section 6.01(a)(iv) of the Indenture
and of the Issuing Bank's determination to terminate the Letter of Credit
on the fifth business day (as defined in the Indenture) following the
Trustee's and Paying Agent's receipt of such notice, (iii) if the Letter of
Credit shall have been issued, instruct the Issuing Bank to (whereupon the
Issuing Bank shall) furnish to the Trustee and the Paying Agent written
notice that the Interest Component will not be reinstated in the amount of
one or more Interest Drawings, all as provided in the Letter of Credit;
(iv) declare the Advances and all other principal amounts outstanding
hereunder, all interest thereon and all other amounts payable hereunder to
be forthwith due and payable, whereupon the Advances and all other
principal amounts outstanding hereunder, all such interest and all such
other amounts shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Account Party, and (v) instruct the
Issuing Bank to (whereupon the Issuing Bank shall) exercise all the rights
and remedies provided herein and under and in respect of the Security
Documents; provided, however, that in the event of an actual or deemed
entry of an order for relief with respect to the Account Party under the
Federal Bankruptcy Code, (A) the commitment of the Issuing Bank to issue
the Letter of Credit, the Commitments and the obligations of the
Participating Banks to make Advances shall automatically be terminated, and
(B) the Advances and all other principal amounts outstanding hereunder, all
interest accrued and unpaid thereon and all other amounts payable hereunder
shall automatically become due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived
by the Account Party.
SECTION 8.03. Issuing Bank to Notify First Mortgage Trustee, Others.
The Issuing Bank shall promptly notify the First Mortgage Trustee by
telephone, confirmed in writing, of the occurrence of any Event of Default.
In addition, the Issuing Bank shall furnish to the Agent, the Account
Party, the Paying Agent and the Issuer a copy of (a) any notice furnished
to the First Mortgage Trustee pursuant to the preceding sentence and (b)
any notice delivered to the Trustee pursuant to clause (ii) or clause (iii)
of Section 8.02. Notwithstanding the foregoing, no failure of the Issuing
Bank to give any notice (or copy of a notice) as contemplated by this
Section 8.03 shall limit or impair any rights of the Issuing Bank, the
Agent or any Participating Bank or the exercise of any remedy hereunder,
nor shall the Issuing Bank, the Agent or any Participating Bank incur any
liability as a result of any such failure.
ARTICLE IX
THE AGENT, THE PARTICIPATING
BANKS AND THE ISSUING BANK
SECTION 9.01. Authorization of Agent; Actions of Agent and Issuing Bank. The Issuing Bank and each Participating Bank hereby appoint and authorize the Agent to take such action as agent on their behalf and to exercise such powers under this Agreement as are delegated to the Agent by the terms hereof, together with such powers as are reasonably incidental thereto; provided, however, that neither the Agent nor the Issuing Bank shall be required to take any action which exposes the Agent or the Issuing Bank to personal liability or which is contrary to this Agreement or applicable law. As to any matters not expressly provided for by any Related Document (including, without limitation, enforcement or collection thereof), neither the Agent nor the Issuing Bank shall be required to exercise any discretion or take any action. The Agent agrees to deliver promptly (i) to the Issuing Bank and each Participating Bank copies of each notice delivered to it by the Account Party and (ii) to each Participating Bank copies of each notice delivered to it by the Issuing Bank, in each case pursuant to the terms of this Agreement.
SECTION 9.02. Reliance, Etc. Neither the Agent, the Issuing Bank, nor any of their directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by it or them under or in connection with this Agreement or any Related Document, except for its or their own gross negligence or willful misconduct as determined by a court of competent jurisdiction. Without limitation of the generality of the foregoing, each of the Agent and the Issuing Bank (i) may consult with legal counsel (including counsel for the Account Party), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (ii) makes no warranty or representation to any Participating Bank and shall not be responsible to any Participating Bank for any statements, warranties or representations made in or in connection with this Agreement or any Related Document; (iii) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement or any Related Document on the part of the Account Party to be performed or observed, or to inspect any property (including the books and records) of the Account Party; (iv) shall not be responsible to any Participating Bank for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any Related Document or any other instrument or document furnished pursuant hereto and thereto; and (v) shall incur no liability under or in respect of this Agreement or any Related Document by acting upon any notice, consent, certificate or other instrument or writing (which may be by telegram, cable or telex), including, without limitation, any thereof from time to time purporting to be from the Trustee, believed by it to be genuine and signed or sent by the proper party or parties.
SECTION 9.03. The Agent, the Issuing Bank and Affiliates. The Agent and the Issuing Bank shall have the same rights and powers under this Agreement as any other Participating Bank and may exercise (or omit from exercising) the same as though they were not the Agent and the Issuing Bank, respectively, and the term "Participating Bank" shall, unless otherwise expressly indicated, include Barclays in its individual capacity. The Agent, the Issuing Bank and their respective Affiliates may accept deposits from, lend money to, act as trustee under indentures of, and generally engage in any kind of business with, the Account Party, any of its subsidiaries and any Person who may do business with or own securities of the Account Party or any such subsidiary, all as if Barclays was not the Agent or the Issuing Bank, and without any duty to account therefor to the Participating Banks.
SECTION 9.04. Participating Bank Credit Decision. Each of the Issuing Bank and each Participating Bank acknowledges that it has, independently and without reliance upon the Agent, the Issuing Bank or any other Participating Bank and based on the financial information referred to in Section 6.01(e) hereof and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement, including, without limitation, in the case of the Issuing Bank and the Participating Banks, with respect to the determination as to whether to classify the transactions evidenced by this Agreement as an "HLT" (as defined in Banking Circular BC-242, issued by the Comptroller of the Currency on October 30, 1989, as supplemented from time to time, or any successor concept). Each of the Issuing Bank and each Participating Bank also acknowledges that it will, independently and without reliance upon the Agent, the Issuing Bank or any other Participating Bank and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement. In that regard, the Issuing Bank, the Participating Banks and the Agent acknowledge that none of them has classified the transactions evidenced hereby as an "HLT", and agree with each other that, in the event that any of them shall subsequently determine to classify such transactions as an "HLT", it will provide notice to such effect to the Issuing Bank, the Participating Banks and the Agent, as applicable, prior to or promptly following effecting such classification.
SECTION 9.05. Indemnification. The Participating Banks agree to indemnify the Agent and the Issuing Bank (to the extent not reimbursed by the Account Party), ratably according to their respective Participation Percentages, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against the Agent or the Issuing Bank in any way relating to or arising out of this Agreement or any action taken or omitted by the Agent or the Issuing Bank under this Agreement, provided that no Participating Bank shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the Agent's or the Issuing Bank's gross negligence or willful misconduct. Without limitation of the foregoing, each Participating Bank agrees to reimburse the Agent and the Issuing Bank promptly upon demand for its ratable share of any out-of- pocket expenses (including counsel fees) incurred by the Agent and the Issuing Bank in connection with the preparation, execution, delivery, administration, modification, amendment, waiver or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement to the extent that the Agent and the Issuing Bank are entitled to reimbursement for such expenses pursuant to Section 10.04 hereof but are not reimbursed for such expenses by the Account Party.
SECTION 9.06. Successor Agent. The Agent may resign at any time by giving written notice thereof to the Issuing Bank, the Participating Banks and the Account Party, with any such resignation to become effective only upon the appointment of a successor Agent pursuant to this Section 9.06. Upon any such resignation, the Issuing Bank shall have the right to appoint a successor Agent, which shall be another commercial bank or trust company reasonably acceptable to the Account Party, organized or licensed under the laws of the United States, or of any State thereof. Upon the acceptance of any appointment as Agent hereunder by a successor Agent and the execution and delivery by the Account Party and the successor Agent of an agreement relating to the fees, if any, to be paid to the successor Agent in connection with its acting as Agent hereunder, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations under this Agreement. After any retiring Agent's resignation hereunder as Agent, the provisions of this Article IX shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement.
SECTION 9.07. Issuing Bank. (a) All notices received by the Issuing Bank pursuant to this Agreement or any Related Document (other than the Letter of Credit) shall be promptly delivered to the Agent for distribution to the Participating Banks.
(b) The Issuing Bank shall not amend or waive any provision or consent to the amendment or waiver of any Related Document without the written consent of the Majority Lenders.
(c) Upon receipt by the Issuing Bank from time to time of any amount pursuant to the terms of any Related Document (other than pursuant to the terms of this Agreement), the Issuing Bank shall promptly deliver to the Agent such amount.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Pledge Agreement, nor consent to any
departure by the Account Party therefrom, shall in any event be effective
unless the same shall be in writing and signed by the Majority Lenders, and
then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided, however,
that no amendment, waiver or consent shall, unless in writing and signed by
the Issuing Bank and all the Participating Banks, do any of the following:
(a) waive, modify or eliminate any of the conditions specified in
Article V, (b) increase the Commitments of the Participating Banks that may
be maintained hereunder or subject the Participating Banks to any
additional obligations, (c) reduce the principal of, or interest on, the
Advances, any amount reimbursable on demand pursuant to Section 3.01, or
any fees or other amounts payable hereunder, (d) postpone any date fixed
for any payment of principal of, or interest on, the Advances, such
reimbursable amounts or any fees or other amounts payable hereunder (other
than fees payable to the Issuing Bank or the Agent pursuant to Section
2.03(b) or (c) hereof), (e) change the percentage of the Commitments or of
the aggregate unpaid principal amount of the Advances, or the number of
Participating Banks which shall be required for the Participating Banks or
any of them to take any action hereunder, (f) amend this Agreement or the
Pledge Agreement in a manner intended to prefer one or more Participating
Banks over any other Participating Banks, (g) amend this Section 10.01, or
(h) release any of the Collateral otherwise than in accordance with any
provisions for such release contained in the Security Documents, or change
any provision of any Security Document providing for the release of all or
substantially all of the Collateral; and provided, further, that no
amendment, waiver or consent shall, unless in writing and signed by the
Issuing Bank or the Agent in addition to the Participating Banks required
above to take such action, affect the rights or duties of the Issuing Bank
or the Agent, as the case may be, under this Agreement or the Pledge
Agreement.
SECTION 10.02. Notices, Etc. All notices and other communications provided for hereunder and under the other Loan Documents shall be in writing (including telegraphic, telex, telecopy or cable communication) and mailed, telegraphed, telexed, telecopied, cabled or delivered:
(i) if to the Account Party, to it in care of NUSCO at NUSCO's
address at 107 Selden Street, Berlin, Connecticut 06037 (telecopy:
(203) 665-5457), Attention: Assistant Treasurer;
(ii) if to the Issuing Bank or the Agent, to it at its address at
222 Broadway, 12th Floor, New York, New York 10038, Attention:
Customer Service Unit, (telephone: (212) 412-3363, telecopy: (212)
412-3080, Telex: 12-6946), with a copy to: Utilities Finance Group,
(telephone (212) 412-2551, telecopy: (212) 412-7575) and with a
further copy to Credit Enhancement Unit (telephone (212) 412-3578,
telecopy (212) 412-6969);
(iii) if to any Participating Bank, to it at its address set forth on the signature pages hereof or in the Participation Assignment pursuant to which it became a Participating Bank; or
as to each party other than any Participating Bank, at such other address as shall be designated by such party in a written notice to the other parties, and, as to any Participating Bank, at such other address as shall be designated by such Participating Bank in a written notice to the Account Party and the Agent. All such notices and communications shall, when mailed, telegraphed, telexed, telecopied or cabled, be effective five days after when deposited in the mails, or when delivered to the telegraph company, confirmed by telex answerback, telecopied or delivered to the cable company, respectively, except that notices and communications to the Agent or the Issuing Bank pursuant to Article II, III or IV shall not be effective until received by the Agent or the Issuing Bank, as the case may be.
SECTION 10.03. No Waiver of Remedies. No failure on the part of any Participating Bank or the Issuing Bank to exercise, and no delay in exercising, any right hereunder or under any Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.
SECTION 10.04. Costs, Expenses and Indemnification. (a) The Account Party agrees to pay on demand all costs and expenses, if any (including, without limitation, reasonable counsel fees and expenses), of (i) the Agent and the Issuing Bank in connection with the preparation, negotiation, execution and delivery of the Loan Documents and the administration of the Loan Documents, the care and custody of any and all collateral, and any proposed modification, amendment, or consent relating thereto; and (ii) the Agent, the Issuing Bank and each Participating Bank in connection with the enforcement (whether through negotiations, legal proceedings or otherwise) of this Agreement or any other Loan Document.
(b) The Account Party hereby agrees to indemnify and hold the Agent, the Issuing Bank and each Participating Bank and their respective officers, directors, employees, professional advisors and affiliates (each, an "Indemnified Person") harmless from and against any and all claims, damages, losses, liabilities, costs or expenses (including reasonable attorney's fees and expenses, whether or not such Indemnified Person is named as a party to any proceeding or investigation or is otherwise subjected to judicial or legal process arising from any such proceeding or investigation) which any of them may incur or which may be claimed against any of them by any person or entity (except to the extent such claims, damages, losses, liabilities, costs or expenses arise from the gross negligence or willful misconduct of the Indemnified Person):
(i) by reason of or in connection with the execution, delivery or performance of any of the Loan Documents or the Related Documents or any transaction contemplated thereby, or the use by the Account Party of the proceeds of any Advance or the use by the Paying Agent or the Trustee of the proceeds of any drawing under the Letter of Credit;
(ii) in connection with or resulting from the utilization, storage, disposal, treatment, generation, transportation, release or ownership of any Hazardous Substance (A) at, upon or under any property of the Account Party or any of its Affiliates or (B) by or on behalf of the Account Party or any of its Affiliates at any time and in any place;
(iii) in connection with any documentary taxes, assessments or charges made by any governmental authority by reason of the execution and delivery of any of the Loan Documents;
(iv) by reason of or in connection with the execution and delivery or transfer of, or payment or failure to make payment under, the Letter of Credit; provided, however, that the Account Party shall not be required to indemnify the Agent, the Issuing Bank or any Participating Bank pursuant to this Section for any claims, damages, losses, liabilities, costs or expenses to the extent caused by (A) the Issuing Bank's willful misconduct or gross negligence, as determined by a court of competent jurisdiction, in determining whether documents presented under the Letter of Credit are genuine or comply with the terms of the Letter of Credit or (B) the Issuing Bank's willful or grossly negligent failure, as determined by a court of competent jurisdiction, to make lawful payment under the Letter of Credit after the presentation to it by the Paying Agent of a draft and certificate strictly complying with the terms and conditions of the Letter of Credit; or
(v) by reason of any inaccuracy or alleged inaccuracy in any material respect, or any untrue statement or alleged untrue statement of any material fact, contained in any preliminary official statement relating to the Bonds or in the Official Statement relating to the Bonds or any amendment or supplement thereto, except to the extent contained in or arising from information in the Official Statement relating to the Bonds supplied in writing by and describing the Issuing Bank.
(c) Nothing contained in this Section 10.04 is intended to limit the Account Party's obligations set forth in Articles II, III and IV. The Account Party's obligations under this Section 10.04 shall survive the creation and sale of any participation interest pursuant to Section 10.06 hereof and shall survive as well the repayment of all amounts owing to the Agent, the Issuing Bank and the Participating Banks under the Loan Documents and the termination of the Commitments. If and to the extent that the obligations of the Account Party under this Section 10.04 are unenforceable for any reason, the Account Party agrees to make the maximum contribution to the payment and satisfaction thereof which is permissible under applicable law.
SECTION 10.05. Right of Set-off. (a) Upon (i) the occurrence and
during the continuance of any Event of Default and (ii) the taking of any
action or the giving of any instruction by the Agent as specified by
Section 8.02 hereof, the Issuing Bank and each Participating Bank are
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by the Issuing Bank or such Participating
Bank to or for the credit or the account of the Account Party against any
and all of the obligations of the Account Party now or hereafter existing
under this Agreement in favor of the Issuing Bank or such Participating
Bank, irrespective of whether or not the Issuing Bank or such Participating
Bank shall have made any demand under this Agreement and although such
obligations may be unmatured. The Issuing Bank and each Participating Bank
agrees promptly to notify the Account Party after any such set-off and
application provided that the failure to give such notice shall not affect
the validity of such set-off and application. The rights of the Issuing
Bank and each Participating Bank under this Section are in addition to
other rights and remedies (including, without limitation, other rights of
set-off) which the Issuing Bank and/or such Participating Bank may have.
(b) The Account Party agrees that it shall have no right of off-set, deduction or counterclaim in respect of its obligations hereunder, and that the obligations of the Issuing Bank and of the several Participating Banks hereunder are several and not joint. Nothing contained herein shall constitute a relinquishment or waiver of the Account Party's rights to any independent claim that the Account Party may have against the Issuing Bank or any Participating Bank, but no Participating Bank shall be liable for the conduct of the Issuing Bank or any other Participating Bank, and the Issuing Bank shall not be liable for the conduct of any Participating Bank.
SECTION 10.06. Binding Effect; Assignments and Participants. (a) This Agreement shall become effective when it shall have been executed and delivered by the Account Party, the Agent, the Issuing Bank and each Participating Bank named on the signature pages hereto and thereafter shall be binding upon and inure to the benefit of the Account Party, the Agent, the Issuing Bank and each Participating Bank and their respective successors and assigns, except that the Account Party shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of the Issuing Bank and each Participating Bank, and the Issuing Bank may not assign its commitment to issue the Letter of Credit or its obligations under or in respect of the Letter of Credit.
(b) Each Participating Bank may assign all or any portion of its rights under this Agreement, under the Letter of Credit or in any security hereunder, including, without limitation, any instruments securing the Account Party's obligations hereunder; provided that (i) no assignment by any Participating Bank may be made to any Person, other than to another Participating Bank, except with the prior written consent of the Issuing Bank and the Account Party (which consent, in the case of the Account Party, shall not be unreasonably withheld), (ii) any assignment shall be of a constant and not a varying percentage of all of the assignor's rights and obligations hereunder and (iii) the parties to each such assignment shall execute and deliver to the Agent a Participation Assignment, together with a processing fee of $3,000. Upon receipt of a completed Participation Assignment and the processing fee, the Agent will record in a register maintained for such purpose the name of the assignee and the percentage participation interest assigned by the assignor and assumed by the assignee for purposes of the determination of such assignor's and assignee's respective Participation Percentages. Upon such execution, delivery, acceptance and recording, from and after the effective date specified in each Participation Assignment, which effective date shall be at least five Business Days after the execution thereof, the assignee shall, to the extent of such assignment, become a party hereto and have all of the rights and obligations of a Participating Bank hereunder and, to the extent of such assignment, such assigning Participating Bank shall be released from its obligations hereunder (without relieving such Participating Bank from any liability for damages, costs and expenses suffered by the Issuing Bank or the Account Party as a result of the failure by such Participating Bank to perform its obligations hereunder).
(c) Each Participating Bank may grant participations to one or more
Persons in all or any part of, or any interest (undivided or divided) in,
such Participating Bank's rights and obligations under this Agreement (any
such Person being referred to hereinafter as a "Participant" and such
interests are collectively, referred to hereinafter as the "Rights");
provided, however, that (i) such Participating Bank's obligations under
this Agreement shall remain unchanged; (ii) any such Participant shall be
entitled to the benefits and cost protections provided for in Section 4.03
hereof on the same basis as if it were a Participating Bank hereunder;
(iii) the Account Party, the Agent and the Issuing Bank shall continue to
deal solely and directly with such Participating Bank in connection with
such Participating Bank's rights and obligations under this Agreement; and
(iv) no such Participant, other than an Affiliate of such Participating
Bank, shall be entitled to require such Participating Bank to take or omit
to take any action hereunder, unless such action or omission would have an
effect of the type described in subsections (c), (d) or (h) of Section
10.01 hereof.
(d) Notwithstanding anything contained in this Section 10.06 to the contrary, the Issuing Bank and any Participating Bank may assign and pledge all or any portion of the Advances (or participating interests therein) owing to the Issuing Bank or such Participating Bank to any Federal Reserve Bank (and its transferees) as collateral security pursuant to Regulation A of the Board of Governors of the Federal Reserve System and any Operating Circular issued by such Federal Reserve Bank. No such assignment shall release the Issuing Bank or such Participating Bank from its obligations hereunder.
SECTION 10.07. Relation of the Parties; No Beneficiary. No term, provision or requirement, whether express or implied, of any Loan Document, or actions taken or to be taken by any party thereunder, shall be construed to create a partnership, association, or joint venture between such parties or any of them. No term or provision of the Loan Documents shall be construed to confer a benefit upon, or grant a right or privilege to, any Person other than the parties hereto.
SECTION 10.08. Issuing Bank Not Liable. As between the Agent, the Issuing Bank and the Participating Banks on the one hand, and the Account Party on the other, the Account Party assumes all risks of the acts or omissions of the Paying Agent, the Trustee and any other beneficiary or transferee of the Letter of Credit with respect to its use of the Letter of Credit. Neither the Agent, the Issuing Bank, any Participating Bank, nor any of their respective officers or directors shall be liable or responsible for: (a) the use which may be made of the Letter of Credit or any acts or omissions of the Paying Agent, the Trustee and any other beneficiary or transferee in connection therewith; (b) the validity, sufficiency or genuineness of documents, or of any endorsement thereon, even if such documents should prove to be in any or all respects invalid, insufficient, fraudulent or forged; (c) payment by the Issuing Bank against presentation of documents which do not comply with the terms of the Letter of Credit, including failure of any documents to bear any reference or adequate reference to the Letter of Credit; or (d) any other circumstances whatsoever in making or failing to make payment under the Letter of Credit, except that the Account Party shall have a claim against the Issuing Bank, and the Issuing Bank shall be liable to the Account Party, to the extent of any direct, as opposed to consequential, damages suffered by the Account Party which the Account Party proves were caused by (i) the Issuing Bank's willful misconduct or gross negligence, as determined by a court of competent jurisdiction, in determining whether documents presented under the Letter of Credit are genuine or comply with the terms of the Letter of Credit or (ii) the Issuing Bank's willful or grossly negligent failure, as determined by a court of competent jurisdiction, to make lawful payment under the Letter of Credit after the presentation to it by the Paying Agent of a draft and certificate strictly complying with the terms and conditions of the Letter of Credit. In furtherance and not in limitation of the foregoing, the Issuing Bank may accept original or facsimile (including telecopy) sight drafts and accompanying certificates presented under the Letter of Credit that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary.
SECTION 10.09. Confidentiality. In connection with the negotiation
and administration of this Agreement and the other Loan Documents, the
Account Party has furnished and will from time to time furnish to the
Agent, the Issuing Bank and the Participating Banks (each, a "Recipient")
written information which is identified to the Recipient when delivered as
confidential (such information, other than any such information which
(i) was publicly available, or otherwise known to the Recipient, at the
time of disclosure, (ii) subsequently becomes publicly available other than
through any act or omission by the Recipient or (iii) otherwise
subsequently becomes known to the Recipient other than through a Person
whom the Recipient knows to be acting in violation of his or its
obligations to the Account Party, being hereinafter referred to as
"Confidential Information"). The Recipient will not knowingly disclose any
such Confidential Information to any third party (other than to those
persons who have a confidential relationship with the Recipient), and will
take all reasonable steps to restrict access to such information in a
manner designed to maintain the confidential nature of such information, in
each case until such time as the same ceases to be Confidential Information
or as the Account Party may otherwise instruct. It is understood, however,
that the foregoing will not restrict the Recipient's ability to freely
exchange such Confidential Information with prospective assignees of or
participants in the Recipient's position herein, but the Recipient's
ability to so exchange Confidential Information shall be conditioned upon
any such prospective assignee's or participant's entering into an
understanding as to confidentiality similar to this provision. It is
further understood that the foregoing will not prohibit the disclosure of
any or all Confidential Information if and to the extent that such
disclosure may be required (i) by a regulatory agency or otherwise in
connection with an examination of the Recipient's records by appropriate
authorities, (ii) pursuant to court order, subpoena or other legal process
or (iii) otherwise, as required by law; in the event of any required
disclosure under clause (ii) or (iii), above, the Recipient agrees to use
reasonable efforts to inform the Account Party as promptly as practicable.
SECTION 10.10 Waiver of Jury Trial. The Account Party, the Agent, the Issuing Bank, and the Participating Banks each hereby irrevocably waives all right to trial by jury in any action, proceeding or counterclaim arising out of or relating to this Agreement or any other Loan Document, or any other instrument or document delivered hereunder or thereunder.
SECTION 10.11. Governing Law. This Agreement and the Pledge Agreement shall be governed by, and construed in accordance with, the laws of the State of New York. The Account Party, the Agent, the Issuing Bank and each Participating Bank each (i) irrevocably submits to the jurisdiction of any New York State Court or Federal court sitting in New York City in any action arising out of any Loan Document, (ii) agrees that all claims in such action may be decided in such court, (iii) waives, to the fullest extent it may effectively do so, the defense of an inconvenient forum and (iv) consents to the service of process by mail. A final judgment in any such action shall be conclusive and may be enforced in other jurisdictions. Nothing herein shall affect the right of any party to serve legal process in any manner permitted by law or affect its right to bring any action in any other court.
SECTION 10.12. Execution in Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
THE ACCOUNT PARTY:
PUBLIC SERVICE COMPANY OF
NEW HAMPSHIRE
By /s/E.G. Vertefeuille Title: Assistant Treasurer |
THE AGENT AND ISSUING BANK:
BARCLAYS BANK PLC,
NEW YORK BRANCH,
as Agent and as Issuing Bank
By /s/Elizabeth Dempsey Title: Associate Director |
THE PARTICIPATING BANKS:
BARCLAYS BANK PLC,
NEW YORK BRANCH
By /s/Elizabeth Dempsey Title: Associate Director Participation Percentage: 12.406828962% |
Address for Notices
Barclays Bank PLC
222 Broadway
New York, New York 10038
Attention: Elizabeth Dempsey
Telephone: (212) 412-2589
Fax: (212) 412-7575
THE BANK OF NOVA SCOTIA
By /s/Carolyn A. Lopez Title: Representative Participation Percentage: 12.395260053% |
Address for Notices
The Bank of Nova Scotia
101 Federal Street
16th Floor
Boston, Massachusetts 02208
Attention: Carolyn Lopez
Telephone: (617) 737-6313
Fax: (617) 951-2177
CITIBANK, N.A.
By /s/S.J. Dimmick Title: Vice President Participation Percentage: 17.353364074% |
Address for Notices
Citibank, N.A.
399 Park Avenue
4th Floor, Zone 21
New York, New York 10043
Attention: Susan Dimmick
Telephone: (212) 559-4205
Fax: (212) 832-9859
THE FIRST NATIONAL
BANK OF BOSTON
By /s/F.T. Smith Title: Director Participation Percentage: 20.658766754% |
Address for Notices
The First National Bank of Boston
100 Federal Street
Mail Stop 01-15-04
Boston, Massachusetts 02110
Attention: Frank T. Smith
Telephone: (617) 434-3271
Fax: (617) 434-3652
Telex: 4996527
Answerback: NNBBUS33
UNION BANK
By /s/John C. Erickson Title:Vice President Participation Percentage: 8.263506702% |
Address for Notices
Union Bank
445 S. Figueroa Street
15th Floor
Los Angeles, California 90071
Attention: John C. Erickson
Telephone: (213) 236-5224
Fax: (213) 236-4096
Telex: 188612
Answerback: UnionBk UT
WESTPAC BANKING CORP.
By /s/ Paul Miller Title:Vice President Participation Percentage: 20.658766754% |
Address for Notices
Westpac Banking Corp.
225 West Washington Street
28th Floor
Chicago, Illinois 60606
Attention: Paul Miller
Telephone: (312) 630-5695
Fax: (312) 332-3527
Telex: 210103 VIA RCA
Answerback:
YASUDA TRUST AND
BANKING CO., LTD.,
NEW YORK BRANCH
By /s/Michael G. Haggarty Title: Vice President Participation Percentage: 8.263506702% |
Address for Notices
Yasuda Trust and Banking Co., Ltd.
New York Branch
One World Trade Center
Suite 8871
New York, New York 10048
Attention: Denise M. Furey
Telephone: (212) 432-6780
Fax: (212) 432-0289
Telex: 12445
Answerback: YASUDA
SCHEDULE I
APPLICABLE LENDING OFFICES
Name of Parti- Domestic CD Lending Eurodollar
cipating Bank Lending Office Office Lending Office
Barclays Bank PLC 75 Wall Street Same as Barclays Bank
PLC,
New York Branch New York, NY 10265 Domestic Nassau Branch
Att: Customer Service Lending c/o Barclays Bank
Unit Office PLC,
Tel: (212) 412-3363 New York Branch
Fax: (212) 412-3080 75 Wall Street
New York, NY
10265
Citibank, N.A. 399 Park Avenue Same as Same as Domestic
New York, NY 10043 Domestic Lending Office
Att: Susan Dimmick Lending
Tel: (212) 559-4205 Office
Fax: (212) 832-9859
The Bank of 101 Federal Street 165 Broadway Same as Domestic
Nova Scotia 16th Floor New York, NY Lending Office
Boston, MA 02208 10006
Fax: (617) 951-2177
The First 100 Federal Street Same as Same as Domestic
National Bank Boston, MA 02106 Domestic Lending Office
of Boston Att: Debbie Dobbins Lending
Tel: (617) 434-5455 Office
Fax: (617) 434-3652
Union Bank 445 South Figueroa Same as Same as Domestic
Street Domestic Lending Office
Los Angeles, CA Lending
90071 Office
Att: Chris A. Behrman
Tel: (213) 236-7285
Fax: (213) 236-4096
Westpac Banking 225 West Washington Same as Same as Domestic
Corporation Street Domestic Lending Office
28th Floor Lending
Chicago, IL 60606 Office
Tel: (312) 630-7887
Fax: (312) 332-3527
Yasuda Trust and One World Trade Ctr. Same as Same as Domestic
Banking Co., Ltd. Suite 8871 Domestic Lending Office
New York Branch New York, NY 10048 Lending
Att: Administration Office
Dept.
SCHEDULE III
INVESTMENTS
|
SCHEDULE IV
PENDING ACTIONS
EXHIBIT 1.01A
FORM OF
IRREVOCABLE LETTER OF CREDIT
NO. _________________
October __, 1992
Security Pacific National Trust Company (New York)
2 Rector Street
New York, New York 10006
Attention: Corporate Trust Division
Dear Sir or Madam:
We hereby establish, at the request and for the account of Public Service Company of New Hampshire (the "Account Party"), in your favor, as paying agent (the "Paying Agent") under that certain Series D Loan and Trust Agreement, dated as of May 1, 1991 (the "Indenture"), by and among the Business Finance Authority (formerly The Industrial Development Authority) of the State of New Hampshire (the "Issuer"), the Account Party and State Street Bank and Trust Company, as trustee (the "Trustee"), pursuant to which $114,500,000 in aggregate principal amount of the Issuer's Pollution Control Revenue Bonds (Public Service Company of New Hampshire Project - 1991 Taxable Series D) (the "Bonds"), have been issued, our Irrevocable Letter of Credit No. _______________, in the amount of US$121,014,000.00 (ONE HUNDRED TWENTY-ONE MILLION FOURTEEN THOUSAND AND NO ONE-HUNDREDTHS UNITED STATES DOLLARS) (subject to reduction and reinstatement as provided below).
(1) Credit Termination Date. This Letter of Credit shall expire on the earliest to occur of (i) October 1, 1995 (the "Stated Termination Date"), (ii) the date upon which we honor a draft accompanying a written and completed certificate signed by you in substantially the form of Exhibit 2 attached hereto, and stating therein that such draft is the final draft to be drawn under this Letter of Credit and that, upon the honoring of such draft, this Letter of Credit will expire in accordance with its terms, (iii) the date upon which we receive a written certificate signed by you and stating therein that no Bonds entitled to the benefits of this Letter of Credit (as determined in accordance with the Indenture) ("Eligible Bonds") are "outstanding" under the Indenture, (iv) the fifth business day following receipt by you and the Trustee of written notice from us that an Event of Default (as defined below) has occurred under the Reimbursement Agreement (as defined below) and of our determination to terminate this Letter of Credit on such fifth business day and (v) the date upon which we receive a written certificate signed by you and stating therein that a substitute or replacement Credit Facility (as defined in the Indenture) has been provided pursuant to Section 317 of the Indenture (such earliest date being the "Credit Termination Date").
As used herein, the term "business day" shall mean any day of the year
(i) that is not a Sunday or legal holiday or a day on which banking
institutions are authorized pursuant to law to close, (ii) that is not a
day on which the corporate trust office of the First Mortgage Bond Trustee
(as defined in the Indenture) is not open for business, (iii) that is a day
on which banks are not required or authorized to close in New York City and
(iv) that is a day on which banking institutions in all of the cities in
which the principal offices of the Trustee, the Paying Agent and the
Remarketing Agent (as defined in the Indenture) are located are not
required or authorized to remain closed and on which the New York Stock
Exchange is not closed.
As used herein "Reimbursement Agreement" shall mean the Series D Letter of Credit and Reimbursement Agreement, dated as of October 1, 1992, between the Account Party, us and certain Participating Banks referred to therein, and the term "Event of Default" shall mean an "Event of Default" as that term is defined in the Reimbursement Agreement.
(2) Principal, Interest and Premium Components. The aggregate amount which may be drawn under this Letter of Credit, subject to reductions in amount and reinstatement as provided below, is US$121,014,000.00 (ONE HUNDRED TWENTY-ONE MILLION FOURTEEN THOUSAND AND NO ONE-HUNDREDTHS UNITED STATES DOLLARS), of which the aggregate amounts set forth below may be drawn as indicated.
(i) An aggregate amount not exceeding US$114,500,000.00 (ONE
HUNDRED FOURTEEN MILLION FIVE HUNDRED THOUSAND AND NO ONE-HUNDREDTHS
UNITED STATES DOLLARS), as such amount may be reduced and reinstated
as provided below, may be drawn in respect of payment of principal
(whether upon scheduled or accelerated maturity, or upon redemption)
of Eligible Bonds or the portion of the purchase price of Eligible
Bonds corresponding to principal (the "Principal Component").
(ii) An aggregate amount not exceeding US$6,514,000.00 (SIX MILLION FIVE HUNDRED FOURTEEN THOUSAND AND NO ONE-HUNDREDTHS UNITED STATES DOLLARS), as such amount may be reduced and reinstated as provided below, may be drawn in respect of payment of (A) accrued and unpaid interest on Eligible Bonds not in the Flexible Mode (as defined in the Indenture) or that portion of the redemption price or purchase price of such Eligible Bonds corresponding to accrued and unpaid interest, but not more than an amount equal to accrued and unpaid interest on such Eligible Bonds for up to a maximum of 128 days immediately preceding the date of such drawing and (B) unpaid interest (whether accrued or to accrue) on Eligible Bonds in the Flexible Mode or that portion of the redemption price or purchase price of such Eligible Bonds corresponding to such interest, but not more than an amount equal to such interest on such Eligible Bonds for up to a maximum of 128 days immediately preceding the next Purchase Date (as defined in the Indenture) for each such Eligible Bond (or, if interest on any such Eligible Bond was not paid on the most recent Purchase Date for such Bond, for up to a maximum of 128 days immediately preceding the date of such drawing), calculated, in each case referred to in the foregoing clause (A) or clause (B) at a maximum rate of sixteen percent (16%) per annum, or such lesser rate of interest as shall equal the Maximum Interest Rate (as defined in the Indenture) in effect under the Indenture with respect to such Eligible Bonds, and in any case calculated on the basis of actual days elapsed divided by 360 (the "Interest Component").
(iii) An aggregate amount not exceeding US$0.00 (ZERO UNITED STATES DOLLARS) may be drawn in respect of premium on Eligible Bonds (the "Premium Component"). If, subsequent to the date hereof, the Premium Component shall be increased by us at the request of the Account Party, the Premium Component shall be subject to reduction as provided below, and amounts drawn in respect thereof shall not be subject to reinstatement.
(3) Drawings. Funds under this Letter of Credit are available to you against (i) your draft, stating on its face: "Drawn under Irrevocable Letter of Credit No. __________________, dated October __, 1992", and (ii) the appropriate certificate specified below, purportedly executed by you and appropriately completed.
Exhibit Setting Forth
Type of Drawing Form of Certificate Required
Tender Drawing Exhibit 1
(as hereinafter defined)
Redemption/Mandatory Exhibit 2
Purchase Drawing
(as hereinafter defined)
Interest Drawing Exhibit 3
(as hereinafter
defined)
|
Drafts and certificates hereunder shall be dated the date of
presentation and shall be presented at our office located at 222 Broadway,
12th Floor, New York, New York 10038, Attention: Central Loan
Administration Department (or at such other office as we may designate by
written notice to you). Presentation of such drafts and certificates may
be made (a) by physical presentation of such drafts and certificates or (b)
by facsimile transmission of such drafts and certificates received by us at
(212) 412-3080 (or at such other number as we may designate by written
notice to you) with prior telephone notice to us at (212) _____________,
Attention: ______________________, (or at such other number as we may
designate by written notice to you) that such presentation is to be made by
facsimile transmission and with the original executed drafts and
certificates to be received by us not later than our close of business on
the next business day, it being understood that payments hereunder shall be
made upon receipt by us of such facsimile transmission; provided, however,
that presentations of drafts and certificates relating to Tender Drawings
in respect of Eligible Bonds in the Flexible Mode shall in all instances be
made in accordance with the foregoing clause (b). Drafts drawn under and
in strict compliance with the terms of this Letter of Credit will be duly
honored by us upon presentation thereof in accordance with this Paragraph 3
if presented on or prior to 4:00 P.M. (New York City time) on the Credit
Termination Date as follows:
(i) Tender Drawings; Flexible Mode. In the case of drafts and certificates relating to Tender Drawings in respect of Eligible Bonds in the Flexible Mode presented in accordance with the foregoing clause (b):
(A) if such drafts and certificates are presented as aforesaid at or prior to 1:30 P.M. (New York City time) on a business day, and provided that such drafts and certificates strictly conform to the requirements of this Letter of Credit, we will initiate a wire transfer of the amount so drawn to your account indicated below at or prior to 3:30 P.M. (New York City time) on the same business day;
(B) if such drafts and certificates are presented as aforesaid after 1:30 P.M. but at or prior to 4:00 P.M. (New York City time) on a business day, and provided that such drafts and certificates strictly conform to the requirements of this Letter of Credit, we will initiate a wire transfer of the amount so drawn to your account indicated below at or prior to 10:00 A.M. on the business day next succeeding the business day on which such drafts and certificates were presented (notwithstanding that such day of presentation may have been the Credit Termination Date); and
(C) if such drafts and certificates are presented as aforesaid after 4:00 P.M. (New York City time) on a business day, and provided that such drafts and certificates strictly conform to the requirements of this Letter of Credit, we will initiate a wire transfer of the amount so drawn to your account indicated below at or prior to 1:00 P.M. (New York City time) on the business day next succeeding the business day on which such drafts and certificates were presented (notwithstanding that such day of presentation may have been the Credit Termination Date);
and
(ii) All Other Drawings: In the case of any other drafts and certificates:
(A) if such drafts and certificates are presented as aforesaid at or prior to 4:00 P.M. (New York City time) on a business day, and provided that such drafts strictly conform to the requirements of this Letter of Credit, we will initiate a wire transfer of the amount so drawn to your account indicated below at or prior to 10:00 A.M. (New York City time) on the business day next succeeding the business day on which such drafts and certificates were presented (notwithstanding that such day of presentation may have been the Credit Termination Date); and
(B) if such drafts and certificates are presented as aforesaid after 4:00 P.M. (New York City time) on a business day, and provided that such drafts and certificates strictly conform to the requirements of this Letter of Credit, we will initiate a wire transfer of the amount so drawn to your account indicated below at or prior to 1:00 P.M. (New York City time) on the business day next succeeding the business day on which such drafts and certificates were presented (notwithstanding that such day of presentation may have been the Credit Termination Date).
Wire transfers of funds paid in respect of any drawing hereunder shall be made to your Account No. ____________ at ____________________________, reference: _________________________, Attention: _________________, or to such other account as you may from time to time specify to us in writing. All payments made by us under this Letter of Credit will be made with our own funds and not with any funds of the Account Party or the Issuer.
(4) Reductions. The Interest Component shall be reduced immediately
following our honoring any draft drawn hereunder to pay unpaid interest on
Eligible Bonds or to pay that portion of the purchase price or redemption
price corresponding to unpaid interest on Eligible Bonds, in each case by
an amount equal to the amount of such draft (any such drawing being an
"Interest Drawing"). The Principal Component shall be reduced immediately
following our honoring any draft drawn hereunder: (i) pursuant to Section
308(c)(ii) of the Indenture to pay that portion of purchase price
corresponding to principal of Eligible Bonds that are (A) subject to
mandatory tender for purchase pursuant to Section 301(d)(iii),
301(e)(iv)(B) or 301(f)(iii) of the Indenture or (B) tendered for purchase
by the holders thereof pursuant to Section 301(e)(iii) of the Indenture
(any such drawing in respect of the circumstances referred to in this
clause (i) being a "Tender Drawing"), (ii) pursuant to Section 308(c)(i) of
the Indenture to pay the principal of Eligible Bonds or that portion of the
redemption price of Eligible Bonds corresponding to principal, whether at
stated maturity, upon acceleration or upon redemption, or (iii) pursuant to
Section 308(c)(ii) of the Indenture to pay that portion of the purchase
price corresponding to principal of Eligible Bonds that are subject to
mandatory tender for purchase pursuant to Section 301(e)(iv)(A) of the
Indenture (any such drawing in respect of the circumstances referred to in
the foregoing clause (ii) or in this clause (iii) being a
"Redemption/Mandatory Purchase Drawing"), in each such case by an amount
equal to the amount of such draft. The Premium Component shall be reduced
immediately following our honoring any draft drawn hereunder to pay premium
on Eligible Bonds in connection with a Redemption/Mandatory Purchase
Drawing, by an amount equal to the amount of such draft.
Additionally, upon receipt of a Notice of Reduction in the form of Exhibit 4 to this Letter of Credit purportedly executed by you, we will reduce the Principal Component, Interest Component and Premium Component to the amounts therein stated.
(5) Reinstatement. The Interest Component and the Principal
Component shall, from time to time, be reinstated by us in accordance with,
and only to the extent provided in, the following subparagraphs (i) and
(ii). In no event shall reductions in the Premium Component be reinstated.
(i) Interest Component. Reductions in the Interest Component resulting from Interest Drawings shall be reinstated as follows:
(A) Immediately following each drawing hereunder to pay unpaid interest on Eligible Bonds in the Flexible Mode or to pay that portion of purchase price, but not redemption price, corresponding to unpaid interest on Eligible Bonds in the Flexible Mode, the amount so drawn shall be automatically reinstated to the Interest Component unless, not later than the business day preceding such drawing you shall have received written notice from us that we will not reinstate the Interest Component in the amount of such drawing. On the fifth day following each drawing hereunder to pay accrued and unpaid interest on Eligible Bonds that are not in the Flexible Mode, or to pay that portion of purchase price, but not redemption price, corresponding to accrued and unpaid interest on Eligible Bonds that are not in the Flexible Mode, the amount so drawn shall be automatically reinstated to the Interest Component, unless you shall have theretofore received written notice from us that we will not reinstate the Interest Component in the amount of such drawing. Any notice of non-reinstatement delivered pursuant to this subparagraph (i)(A) shall be in writing and shall be delivered to you by hand delivery or facsimile transmission.
(B) If, subsequent to any such delivery of a notice of non- reinstatement as aforesaid, we shall deliver to you, by hand delivery or facsimile transmission, a Notice of Reinstatement in the form of Exhibit 5 hereto, then, upon such delivery to you, the Interest Component shall be immediately reinstated to the extent specified in such Notice of Reinstatement.
(C) In no event shall the Interest Component be reinstated to an amount in excess of 128 days' interest on Eligible Bonds, computed at the rate of 16% per annum, or such lesser rate of interest as shall equal the Maximum Interest Rate (as defined in the Indenture) in effect under the Indenture with respect to such Eligible Bonds, in any case on the basis of actual days elapsed divided by 360.
(ii) Principal Component. Reductions in the Principal Component resulting from Redemption/Mandatory Purchase Drawings shall in no event be reinstated. Reductions in the Principal Component resulting from Tender Drawings shall be reinstated as follows:
(A) Immediately upon receipt by us of proceeds from the remarketing of Pledged Bonds (as defined in the Indenture), or of written notice from you that you have received such proceeds (or a window receipt guaranteeing same day payment in immediately available funds of such proceeds as contemplated by Section 312(a) of the Indenture), the Principal Component shall be reinstated automatically by the amount of such proceeds.
(B) Immediately upon your receipt from us, by hand delivery or facsimile transmission, of a Notice of Reinstatement in the form of Exhibit 5 hereto, the Principal Component shall be immediately reinstated to the extent specified in such Notice of Reinstatement.
(C) In no event shall the Principal Component be reinstated to an amount in excess of the aggregate principal amount of Eligible Bonds then outstanding under the Indenture.
Any Notice of Reinstatement delivered to you in the form set forth in Exhibit 5 hereto, whether delivered pursuant to subparagraph (i) or subparagraph (ii), above, may be combined, in a single such Notice, with any other Notice of Reinstatement delivered pursuant to the other such subparagraph.
(6) Notices. Communications (other than drawings) with respect to
this Letter of Credit shall be in writing and shall be addressed to us at
222 Broadway, 12th Floor, New York, New York 10038, Attention: Central
Loan Administration Department (or at such other office as we may designate
by written notice to you) or by facsimile transmission received by us at:
(212) 412-3080 (or at such other telephone number as we may designate by
written notice to you) specifically referring to the number of this Letter
of Credit.
(7) Transfer. This Letter of Credit is transferable in its entirety (but not in part) to any transferee who has succeeded you as Paying Agent under the Indenture and may be successively so transferred. Transfer of the available balance under this Letter of Credit to such transferee shall be effected by the presentation to us of this Letter of Credit accompanied by a certificate substantially in form set forth in Exhibit 6.
(8) Governing Law, Etc. Except as otherwise provided herein, this Letter of Credit shall be governed by and construed in accordance with the Uniform Customs and Practices for Documentary Credits (1983 Revision) Publication No. 400 of the International Chamber of Commerce ("UCP") and, to the extent not inconsistent with the UCP, the laws of the State of New York, including the Uniform Commercial Code as in effect in the State of New York. This Letter of Credit sets forth in full our undertaking, and, except as expressly set forth herein, such undertaking shall not in any way be modified, amended, amplified or limited by reference to any document, instrument or agreement referred to herein (including, without limitation, the Bonds, the Indenture and the Reimbursement Agreement), except only the certificates and the drafts referred to herein; and any such reference shall not be deemed to incorporate herein by reference any document, instrument or agreement except for such certificates and such drafts. Whenever and wherever the terms of this Letter of Credit shall refer to the purpose of a draft hereunder, or the provisions of any agreement or document pursuant to which such draft may be presented hereunder, such purpose or provisions shall be conclusively determined by reference to the certificate accompanying such draft; in furtherance of this sentence, whether any drawing is in respect of payment of regularly scheduled interest on the Bonds or of principal of or interest on the Bonds upon scheduled or accelerated maturity or is a Tender Drawing or a Redemption/Mandatory Purchase Drawing shall be conclusively determined by reference to the certificate accompanying such drawing.
Very truly yours,
BARCLAYS BANK PLC,
NEW YORK BRANCH
By ___________________________________
Title:
By ___________________________________
Title:
EXHIBIT 1
TO THE LETTER OF CREDIT
CERTIFICATE FOR TENDER DRAWING
The undersigned, a duly authorized officer of __________________, (the "Paying Agent"), hereby certifies as follows to Barclays Bank PLC, New York Branch (the "Bank"), with reference to Irrevocable Letter of Credit No. _________________ (the "Letter of Credit") issued by the Bank in favor of the Paying Agent. Terms defined in the Letter of Credit and used but not defined herein shall have the meanings given them in the Letter of Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for the holders of the Bonds.
(2) The Paying Agent is making a Tender Drawing under the Letter of Credit in the amount of $_______________ pursuant to Section 308(c)(ii) of the Indenture to pay that portion of the purchase price corresponding to principal of Eligible Bonds that are
[subject to mandatory tender for purchase pursuant to Section
[301(d)(iii)] [301(e)(iv)(B)] [301(f)(iii)] of the Indenture.]
[tendered for purchase by the holders thereof pursuant to Section 301(e)(iii) of the Indenture.]
(3) The amount of purchase price corresponding to principal of Eligible Bonds and with respect to the payment of which the Paying Agent, pursuant to the foregoing Sections of the Indenture, is drawing under the Letter of Credit, is as follows, and the amount of the draft accompanying this Certificate does not exceed such amount:
Principal: $__________________
(4) The amount of the draft accompanying this Certificate being drawn in respect of purchase price corresponding to principal of Eligible Bonds, as indicated in paragraph (3), above, does not exceed the Principal Component of the Letter of Credit. The amount of the draft accompanying this Certificate in respect of purchase price corresponding to principal of such Bonds has been computed in accordance with the terms and conditions of such Eligible Bonds and the Indenture.
(5) No proceeds of this drawing will be applied to the payment of purchase price of any Bonds that are not Eligible Bonds, including any Pledged Bonds (as defined in the Indenture), any Company Bonds (as defined in the Indenture) and any Bonds in the Fixed Rate Mode (as defined in the Indenture).
[(6) The Eligible Bonds in respect of which this drawing is being made are Eligible Bonds in the Flexible Mode, and payment of this drawing shall be made in accordance with Paragraph 3(i) of the Letter of Credit.]
[(6) The Eligible Bonds in respect of which this drawing is being made are not Eligible Bonds in the Flexible Mode, and payment of this drawing shall be made in accordance with Paragraph 3(ii) of the Letter of Credit].
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this Certificate as of the ________ day of _______________, 19___.
[NAME OF PAYING AGENT],
as Paying Agent
By ___________________________________
Title:
EXHIBIT 2
TO THE LETTER OF CREDIT
CERTIFICATE FOR REDEMPTION/
MANDATORY PURCHASE DRAWING
The undersigned, a duly authorized officer of __________________, (the "Paying Agent"), hereby certifies as follows to Barclays Bank PLC, New York Branch (the "Bank"), with reference to Irrevocable Letter of Credit No. _____________________ (the "Letter of Credit") issued by the Bank in favor of the Paying Agent. Terms defined in the Letter of Credit and used but not defined herein shall have the meanings given them in the Letter of Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for the holders of the Bonds.
(2) The Paying Agent is making a Redemption/Mandatory Purchase Drawing under the Letter of Credit in the amount of $______________
[pursuant to Section 308(c)(i) and Section 605 of the Indenture to pay the principal of Eligible Bonds due pursuant to the Indenture upon maturity or as a result of acceleration of such Eligible Bonds in accordance with the Indenture and the terms of such Eligible Bonds.]
[pursuant to Section 308(c)(i) of the Indenture to pay that
portion of the redemption price corresponding to principal of
[and premium on] Eligible Bonds due pursuant to the Indenture
upon redemption of such Eligible Bonds in accordance with the
Indenture and the terms of such Eligible Bonds.]
[pursuant to Section 308(c)(ii) of the Indenture to pay that portion of the purchase price of Eligible Bonds corresponding to principal that are subject to mandatory tender for purchase pursuant to Section 301(e)(iv)(A) of the Indenture.]
(3) The amount of [principal of] [redemption price corresponding to principal of] [and premium on] [purchase price corresponding to principal of] Eligible Bonds which is due and payable and with respect to the payment of which the Paying Agent, pursuant to the foregoing Section[s] of the Indenture, is to draw under the Letter of Credit is as follows, and the amount of the draft accompanying this Certificate does not exceed such amount:
Principal: $__________________
[Premium: $__________________]
(4) The amount of the draft accompanying this Certificate being drawn
in respect of payment of [principal] [redemption price corresponding to
principal] [purchase price corresponding to principal] of Eligible Bonds,
as indicated in paragraph (3), above, does not exceed the Principal
Component of the Letter of Credit. [The amount of the draft accompanying
this Certificate being drawn in respect of that portion of the redemption
price of Eligible Bonds corresponding to premium, as indicated in paragraph
(3), above, does not exceed the Premium Component of the Letter of Credit.]
The amount of the draft accompanying this Certificate in respect of payment
of [principal] [redemption price corresponding to principal] [and premium]
[purchase price corresponding to principal] of such Eligible Bonds has been
computed in accordance with the terms and conditions of such Eligible Bonds
and the Indenture.
(5) No proceeds of this drawing will be applied to the payment of principal, redemption price (including premium, if any) or purchase price of any Bonds that are not Eligible Bonds, including any Pledged Bonds (as defined in the Indenture), any Company Bonds (as defined in the Indenture), and any Bonds in the Fixed Rate Mode (as defined in the Indenture).
(6) Payment of this drawing shall be made in accordance with Paragraph 3(ii) of the Letter of Credit.
[(7) The draft accompanying this Certificate is the final draft to be drawn under the Letter of Credit, and, upon the honoring of such draft, the Letter of Credit will expire in accordance with its terms.]
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this Certificate as of the ________ day of _______________, 19___.
[NAME OF PAYING AGENT],
as Paying Agent
By ___________________________________
Title:
EXHIBIT 3
TO THE LETTER OF CREDIT
CERTIFICATE FOR INTEREST DRAWING
The undersigned, a duly authorized officer of __________________, (the "Paying Agent"), hereby certifies as follows to Barclays Bank PLC, New York Branch (the "Bank"), with reference to Irrevocable Letter of Credit No. ___________ (the "Letter of Credit") issued by the Bank in favor of the Paying Agent. Terms defined in the Letter of Credit and used but not defined herein shall have the meanings given them in the Letter of Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for the holders of the Bonds.
(2) The Paying Agent is making a drawing under the Letter of Credit
in the amount of $_______________ with respect to [the payment of interest]
[the payment of the portion of redemption price corresponding to interest]
[the payment of the portion of purchase price corresponding to interest] on
Eligible Bonds in accordance with the Indenture.
(3) The amount of [interest] [redemption price corresponding to interest] [purchase price corresponding to interest] on Eligible Bonds that is due and owing is as follows, and the amount of the draft accompanying this Certificate does not exceed such amount:
Interest: __________________
(4) The amount of the draft accompanying this Certificate being drawn in respect of payment of [interest] [redemption price corresponding to interest] [purchase price corresponding to interest] on Eligible Bonds, as indicated in paragraph (3), above, does not exceed the Interest Component of the Letter of Credit. The amount of the draft accompanying this Certificate in respect of payment of [interest] [redemption price corresponding to interest] [purchase price corresponding to interest] on Eligible Bonds has been computed in accordance with the terms and conditions of such Eligible Bonds and the Indenture.
(5) Payment of this drawing shall be made in accordance with Paragraph 3(ii) of the Letter of Credit.
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this Certificate as of the ________ day of _______________, 19___.
[NAME OF PAYING AGENT],
as Paying Agent
By ___________________________________
Title:
EXHIBIT 4
TO THE LETTER OF CREDIT
NOTICE OF REDUCTION
The undersigned, a duly authorized officer of _____________________, (the "Paying Agent"), hereby certifies as follows to Barclays Bank PLC, New York Branch (the "Bank"), with reference to Irrevocable Letter of Credit No. _____________________ (the "Letter of Credit") issued by the Bank in favor of the Paying Agent. Terms defined in the Letter of Credit and used but not defined herein shall have the meanings given them in the Letter of Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for the holders of the Bonds.
(2) As of the date hereof, the aggregate principal amount of Eligible Bonds (including for this purpose all Pledged Bonds and all Company Bonds) outstanding is
Principal: $__________________
(3) You are hereby directed to reduce the [Principal] [Premium]
[and] [Interest] Components of the Letter of Credit as follows:
[The Principal Component of the Letter of Credit is reduced to $__________________.]
[The Premium Component of the Letter of Credit is reduced to $__________________.]
[The Interest Component of the Letter of Credit is reduced to $__________________.]
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this Certificate as of the ________ day of _______________, 19___.
[NAME OF PAYING AGENT],
as Paying Agent
By ___________________________________
Title:
EXHIBIT 5
TO THE LETTER OF CREDIT
NOTICE OF REINSTATEMENT
The undersigned, a duly authorized officer of Barclays Bank PLC, New York Branch (the "Bank"), hereby gives the following notice to _________________, as paying agent (the "Paying Agent"), with reference to Irrevocable Letter of Credit No. __________________ (the "Letter of Credit") issued by the Bank in favor of the Paying Agent. Terms defined in the Letter of Credit and used but not defined herein have the meanings given them in the Letter of Credit.
The Bank hereby notifies you that:
[1.] [Pursuant to Paragraph 5(i)(B) of the Letter of Credit and Section 2.04(b)(ii) of the Reimbursement Agreement, the Interest Component has been reinstated by $________________.]
[2.] [Pursuant to Paragraph 5(ii)(B) of the Letter of Credit and Section 2.04(c) of the Reimbursement Agreement, the Principal Component has been reinstated by $_________________.]
IN WITNESS WHEREOF, the Bank has executed and delivered this Notice of Reinstatement as of the ________ day of _______________, 19___
BARCLAYS BANK PLC,
NEW YORK BRANCH
By ___________________________________
Title:
EXHIBIT 6
TO THE LETTER OF CREDIT
INSTRUCTIONS TO TRANSFER
__________________, 19___
Re: Irrevocable Letter of Credit No. __________________
Gentlemen:
The undersigned, as Paying Agent under that certain Series D Loan and Trust Agreement, dated as of May 1, 1991 (the "Indenture"), by and among the Business Finance Authority (formerly The Industrial Development Authority) of the State of New Hampshire (the "Issuer"), Public Service Company of New Hampshire and the State Street Bank and Trust Company, as Trustee, is named as beneficiary in the Letter of Credit referred to above (the "Letter of Credit"). The Transferee named below has succeeded the undersigned as Paying Agent under such Indenture.
Therefore, for value received, the undersigned hereby irrevocably instructs you to transfer to such Transferee all rights of the undersigned to draw under the Letter of Credit.
Such Transferee shall hereafter have the sole rights as beneficiary under the Letter of Credit; provided, however, that no rights shall be deemed to have been transferred to such Transferee until such transfer complies with the requirements of the Letter of Credit pertaining to transfers.
IN WITNESS WHEREOF, the undersigned has executed and delivered this Certificate as of the ________ day _______________, 19___.
[NAME OF RETIRING PAYING AGENT],
as Paying Agent
By ___________________________________
Title:
The undersigned, [Name of Transferee], hereby accepts the foregoing transfer of rights under the Letter of Credit.
[Name of Transferee]
By ___________________________________ Title:
Address of Principal Corporate Trust Office:
[insert address]
EXHIBIT 1.01B
PARTICIPATION ASSIGNMENT
Dated _________________, 19__
Reference is made to the Letter of Credit and Reimbursement Agreement, dated as of October 1, 1992 (said Agreement, as it may hereafter be amended or otherwise modified from time to time, being the "Agreement"; unless otherwise defined herein terms defined in the Agreement are used herein with the same meaning), among Public Service Company of New Hampshire (the "Account Party"), Barclays Bank PLC, New York Branch ("Barclays"), as Issuing Bank, the Participating Banks named therein and from time to time parties thereto, and Barclays, as Agent. Pursuant to the Agreement, ______________ (the "Assignor") has purchased a participation from the Issuing Bank in and to the Letter of Credit and each payment thereunder and demand loan made by the Issuing Bank and has committed to make Advances to the Account Party.
The Assignor and ________________ (the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns, without recourse, to the
Assignee, and the Assignee hereby purchases and assumes from the Assignor,
without recourse to the Assignor that portion set forth in Section 1(c) of
Schedule 1 hereto (the "Assigned Interest") of the Assignor's rights and
obligations under the Agreement and the Pledge Agreement, including,
without limitation, the participation purchased by the Assignor pursuant to
Section 3.07 of the Agreement in respect of unreimbursed amounts and demand
loans owing from time to time to the Issuing Bank, the Commitment of the
Assignor to make Advances and the Advances outstanding on the Effective
Date (as hereinafter defined). Such Assigned Interest represents the
percentage interest specified in Section 2(b) of Schedule 1 of all
outstanding rights and obligations of the Participating Banks under the
Agreement, and, after giving effect to such sale and assignment, the
Assignee's and Assignor's Participation Percentages will be as set forth in
Sections 2(b) and 2(c), respectively, of Schedule 1. The effective date of
this sale and assignment shall be the date specified in Section 3 of
Schedule 1 (the "Effective Date").
2. On the Effective Date, the Assignee will pay to the Assignor, in same day funds, at such address and account as the Assignor shall advise the Assignee, an amount equal to (1) the aggregate amount of unreimbursed letter of credit payments, demand loans and Advances outstanding (as set forth in Section 1 of Schedule 1) times (2) the Assigned Interest. From and after the Effective Date, the Assignor agrees that the Assignee shall be entitled to all rights, powers and privileges of the Assignor under the Agreement and the Pledge Agreement to the extent of the Assigned Interest, including without limitation (i) the right to receive all payments in respect of the Assigned Interest for the period from and after the Effective Date, whether on account of reimbursements, principal, interest, fees, indemnities in respect of claims arising after the Effective Date, increased costs, additional amounts or otherwise; (ii) the right to vote and to instruct the Agent and the Issuing Bank under the Agreement based on the Assigned Interest; (iii) the right to set-off and to appropriate and apply deposits of the Account Party as set forth in the Agreement; and (iv) the right to receive notices, requests, demands and other communications. The Assignor agrees that it will promptly remit to the Assignee any amount received by it in respect of the Assigned Interest (whether from the Account Party, the Agent or otherwise) in the same funds in which such amount is received by the Assignor.
3. The Assignor (i) represents and warrants that it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim; (ii) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Agreement or the Related Documents or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Agreement, the Related Documents or any other instrument or document furnished pursuant thereto; and (iii) makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Account Party or the performance or observance by the Account Party of any of its obligations under the Agreement, the Related Documents or any other instrument or document furnished pursuant thereto.
4. The Assignee (i) confirms that it has received a copy of the
Agreement, together with copies of the financial statements referred to in
Section 6.01(e) thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter
into this Assignment; (ii) agrees that it will, independently and without
reliance upon the Agent, the Issuing Bank, the Assignor or any other
Participating Bank and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Agreement and the Related Documents;
(iii) appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers under the Agreement and the Pledge
Agreement as are delegated to the Agent by the terms thereof, together with
such powers as are reasonably incidental thereto; (iv) agrees that it will
perform in accordance with its terms all of the obligations which by the
terms of the Agreement are required to be performed by it as a
Participating Bank and (v) confirms that it has paid the processing fee
referred to in subsection 10.06(b) of the Agreement.
5. Following the execution of this Assignment, it will be delivered to the Agent for acceptance and recording by the Agent. Upon such acceptance and recording and receipt of the consent of the Issuing Bank required pursuant to Section 10.06(b) of the Agreement (which shall be evidenced by the Issuing Bank's execution of this Assignment on the appropriate space on Schedule 1), as of the Effective Date, (i) the Assignee shall be a party to the Agreement and, to the extent provided in this Assignment, have the rights and obligations of a Participating Bank thereunder and under the Pledge Agreement and (ii) the Assignor shall, to the extent provided in this Assignment, relinquish its rights and be released from its obligations under the Agreement and the Pledge Agreement.
6. Upon such acceptance, recording and consent, from and after the Effective Date, the Agent shall make all payments under the Agreement in respect of the interest assigned hereby (including, without limitation, all payments of principal, interest and fees with respect thereto) to the Assignee at its address set forth on Schedule 1 hereto. The Assignor and Assignee shall make all appropriate adjustments in payments under the Agreement for periods prior to the Effective Date directly between themselves.
7. This Assignment shall be governed by, and construed in accordance with, the laws of the State of New York.
8. This Assignment may be executed in counterparts by the parties hereto, each of which counterpart when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment to
be executed by their respective officers thereunto duly authorized, as of
the date first above written, such execution being made on Schedule 1
hereto.
Schedule 1
to
Participation Assignment
Dated ____________, 19__
Section 1.
(a) Total Unreimbursed
Payments and demand loans $__________
(b) Total Advances: $__________
(c) Assigned Interest:1 __________%
|
1 Specify percentage to no more than 8 decimal points.
Section 2.
(a) Assignor's Participation
Percentage (immediately
prior to the effectiveness
of this Assignment) ___________%
(b) Assignee's Participation
Percentage2 (upon the
effectiveness of this
Assignment) ___________%
(c) Assignor's Participation
Percentage2 (upon
the effectiveness of
this Assignment) ___________%
|
2 The sum of the percentages set forth in Section 2(b) and (c) shall equal the percentage set forth in Section 2(a).
Section 3.
Effective Date:3 __________, 19__
3 Such date shall be at least 5 Business Days after the execution of this Assignment.
[NAME OF ASSIGNOR]
By______________________________
Title:
[NAME OF ASSIGNEE]
By______________________________
Title:
[Address]
Telecopier No._______________
Attention:___________________
Consented to this __ day
of ______________, ___
BARCLAYS BANK, PLC
NEW YORK BRANCH
as Issuing Bank
By__________________________
Title:
Accepted this __ day4
of _____________, ___
4 Not to be accepted without proof of Account Party's consent pursuant to
Section 10.06(b) of the Reimbursement Agreement.
BARCLAYS BANK, PLC,
New York Branch,
as Agent
By__________________________
Title:
APPLICABLE LENDING OFFICES
The Assignee's Applicable Lending Offices are as follows:
Domestic Lending Office:
CD Lending Office:
Eurodollar Lending Office:
EXHIBIT 1.01C
FIRST AMENDMENT
TO
SERIES D PLEDGE AGREEMENT
This FIRST AMENDMENT, dated as of October 1, 1992 (this "Amendment"), to the SERIES D PLEDGE AGREEMENT, dated as of May 1, 1991 ("the Existing Agreement", and, as amended by this Amendment, the "Amended Agreement") is made by and among:
(i) Public Service Company of New Hampshire, a corporation duly organized and validly existing under the laws of the State of New Hampshire (the "Account Party");
(ii) Citibank, N.A., as the "Issuing Bank" under the Existing Agreement (the "Retiring Issuing Bank"); and
(iii) Barclays Bank PLC, New York Branch ("Barclays"), as the "Issuing Bank" under the Reimbursement Agreement hereinafter referred to (the "Issuing Bank");
for the benefit of the Issuing Bank and
(iv) The Agent (as defined therein) and the Participating Banks (as defined therein) from time to time party to such Reimbursement Agreement.
PRELIMINARY STATEMENT
The Account Party was previously reorganized under Chapter 11 of the Bankruptcy Code pursuant to that certain Third Amended Joint Plan of Reorganization of the Account Party, dated December 28, 1989 as confirmed by order of the United States Bankruptcy Court for the District of New Hampshire on April 20, 1990. Such reorganization (the "Reorganization") became effective on May 16, 1991.
In order to finance, in part, the Reorganization, the Business Finance
Authority (formerly The Industrial Development Authority) of the State of New
Hampshire (the "Issuer") has issued, pursuant to a Series D Loan and Trust
Agreement, dated as of May 1, 1991 (as supplemented or amended from time to
time with the written consent of the Issuing Bank, the "Indenture"), by and
among the Issuer, the Account Party and State Street Bank and Trust Company,
as trustee (such entity, or its successor as trustee, being the "Trustee"),
$114,500,000 aggregate principal amount of The Industrial Development
Authority of the State of New Hampshire Pollution Control Revenue Bonds
(Public Service Company of New Hampshire Project - 1991 Taxable Series D)
(such Bonds, together with any Tax-Exempt Refunding Bonds (as defined in the
Indenture) issued to refund such bonds as provided in Article IV of the
Indenture, being hereinafter referred to, collectively, as the "Bonds") and,
pursuant to the Indenture, the Account Party has previously caused the
Retiring Issuing Bank to issue the letter of credit referred to therein in
favor of the Paying Agent described therein. For the purposes stated in the
recitals to the Existing Agreement, the Account Party has previously entered
into the Existing Agreement and pledged the Pledged Collateral (as defined in
the Existing Agreement) to the Retiring Issuing Bank;
The Account Party now wishes to substitute a letter of credit issued by the Issuing Bank for the letter of credit previously issued by the Retiring Issuing Bank, and in furtherance thereof, the Account Party has requested the Issuing Bank to issue its irrevocable letter of credit in favor of the Paying Agent. The Issuing Bank has agreed to issue such letter of credit subject to the terms and conditions set forth in that certain Series D Letter of Credit and Reimbursement Agreement, of even date herewith, among the Account Party, the Issuing Bank, the Agent and the Participating Banks referred to therein and relating to the Bonds (said Series D Letter of Credit and Reimbursement Agreement, as it may be hereafter be amended, modified or supplemented from time to time, being hereinafter referred to as the "Reimbursement Agreement").
It is a condition precedent to the obligation of the Issuing Bank to issue such letter of credit and of the Participating Banks to make the Advances described in the Reimbursement Agreement that the parties execute and deliver this Amendment and effect the assignment provided for herein;
NOW THEREFORE, the Account Party, the Retiring Issuing Bank and the Issuing Bank hereby agree as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.01. Definitions. For the purposes of this Amendment and the Amended Agreement, terms defined in the Reimbursement Agreement and used but not otherwise defined in this Amendment have the meanings given them in the Reimbursement Agreement.
ARTICLE II.
ASSIGNMENT
In consideration of the premises and for other good and valuable consideration, receipt of which is hereby acknowledged, the Retiring Issuing Bank hereby assigns, transfers, sets over and conveys, to the Issuing Bank for the benefit of the Agent and the Participating Banks, without recourse of any kind, all of the Retiring Issuing Bank's right, title and interest in and to the Existing Agreement, the security interests created thereby and the Pledged Collateral described therein. The Retiring Issuing Bank further agrees to execute and deliver all such other documents and to take all such other actions, as in each case may be reasonably requested by the Issuing Bank to further evidence or perfect the foregoing assignment; provided, however, that the Retiring Issuing Bank shall not be required to incur any liability or expend any funds in connection with the foregoing unless indemnified to its reasonable satisfaction. By execution and delivery of this Amendment, (i) the Issuing Bank hereby accepts such assignment, transfer and conveyance and (ii) the Account Party consents thereto.
ARTICLE III.
AMENDMENTS TO EXISTING AGREEMENT
SECTION 3.01. Restatement of Grant of Security Interest. Section 1 of the Existing Agreement is hereby amended and restated to read in its entirety as follows:
SECTION 1. Pledge. The Account Party hereby pledges to the Issuing Bank for the benefit of the Agent and the Participating Banks, and grants to the Issuing Bank for the benefit of the Agent and the Participating Banks a security interest in, the following (the "Pledged Collateral"):
(i) the Pledged Bonds (as defined in the Indenture) and the instruments, if any, evidencing the Pledged Bonds, and all interest, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the Pledged Bonds; and
(ii) all proceeds (other than the proceeds of the initial sale upon issuance of the Pledged Bonds) of any and all of the foregoing collateral (including, without limitation, proceeds that constitute property of the types described above).
SECTION 3.02. Restatement of Security for Obligations. Section 2 of the Existing Agreement is hereby amended and restated to read in its entirety as follows:
SECTION 2. Security for Obligations. This Agreement secures the payment of all obligations of the Account Party now or hereafter existing under the Reimbursement Agreement, whether for reimbursement, principal, interest, fees, expenses or otherwise, and all obligations of the Account Party now or hereafter existing under this Agreement (all such obligations of the Account Party being the "Obligations"). Without limiting the generality of the foregoing, this Agreement secures the payment of all amounts which constitute part of the Obligations and would be owed by the Account Party to the Issuing Bank, the Agent or any Participating Bank under the Reimbursement Agreement but for the fact that they are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving the Account Party.
SECTION 3.03. Certain Cross-References. The references in Sections 9 and 11(b) of the Existing Agreement to "Section 9.04 of the Reimbursement Agreement" are hereby amended by substituting therefor the words "Section 10.04 of the Reimbursement Agreement".
SECTION 3.04. Restatement of Section 12. Section 12 of the Existing Agreement is hereby amended and restated to read in its entirety as follows:
SECTION 12. Continuing Security Interest; Assignments. This Agreement shall create a continuing security interest in the Pledged Collateral and shall (i) remain in full force and effect until the later of (x) the payment in full of the Obligations and all other amounts payable under this Agreement and (y) the expiration or termination of the Commitments, (ii) be binding upon the Account Party, its successors and assigns, and (iii) inure to the benefit of, and be enforceable by, the Issuing Bank, the Agent, the Participating Banks and their respective successors, transferees and assigns. Without limiting the generality of the foregoing clause (iii), any Participating Bank may, subject to Section 10.06 of the Reimbursement Agreement, assign or otherwise transfer all or any portion of its rights and obligations under the Reimbursement Agreement (including, without limitation, all or any portion of its Commitment and the Advances owing to it) to any other person or entity, and such other person or entity shall thereupon become vested with all the benefits in respect thereof granted to such Participating Bank herein or otherwise. Upon the later of the payment in full of the Obligations and all other amounts payable under this Agreement and the expiration or termination of the Commitments, the security interest granted hereby shall terminate and all rights to the Pledged Collateral shall revert to the Account Party. Upon any such termination, the Issuing Bank will, at the Account Party's expense, return to the Account Party such of the Pledged Collateral as shall not have been sold or otherwise applied pursuant to the terms hereof and execute and deliver to the Account Party such documents as the Account Party shall reasonably request to evidence such termination.
ARTICLE IV.
MISCELLANEOUS
SECTION 4.01. Effectiveness; Effect on Existing Agreement. This Amendment shall become effective when, and only when, (a) the Agent shall have received counterparts of this Amendment duly executed by all the parties hereto and (b) the Letter of Credit shall have been issued pursuant to the Reimbursement Agreement. Upon the effectiveness of this Amendment, (x) each reference in the Existing Agreement to "the Reimbursement Agreement", "the Series D Reimbursement Agreement", "thereunder", "thereof" or words of like import referring to the Original Reimbursement Agreement, shall mean and be a reference to the Reimbursement Agreement, and (y) each reference in the Existing Agreement to "this Agreement", "hereunder", "hereof" or words of like import referring to the Existing Agreement, and each reference in the Related Documents to "the Pledge Agreement", "the Series D Pledge Agreement", "thereunder", "thereof" or words of like import referring to the Existing Agreement, shall mean and be a reference to the Amended Agreement. Except as expressly amended hereby, all provisions of the Existing Agreement shall remain in full force and effect and are hereby in all respects ratified and confirmed.
SECTION 4.02. Counterparts. This Amendment may be executed in counterparts, and such counterparts taken together shall be deemed to constitute one and the same agreement.
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed and delivered as of the date first above written.
PUBLIC SERVICE COMPANY
OF NEW HAMPSHIRE
By ____________________________
Title:
CITIBANK, N.A.
By ____________________________
Title:
BARCLAYS BANK PLC,
NEW YORK BRANCH,
as Issuing Bank and as Agent
By ____________________________
Title:
EXHIBIT 5.01A
[Form of Opinion of Day, Berry & Howard]
[Closing Date]
To Barclays Bank PLC, New York Branch,
as Agent and as Issuing Bank under the
Reimbursement Agreement referred to below,
and to each Participating Bank thereunder
Public Service Company of New Hampshire
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 5.01(f)(i) of the Series D Letter of Credit and Reimbursement Agreement, dated as of October 1, 1992 (the "Reimbursement Agreement"), among Public Service Company of New Hampshire (the "Company"), Barclays Bank PLC, New York Branch, as the Agent (the "Agent") and Issuing Bank (the "Issuing Bank") thereunder, and the Participating Banks referred to therein. Unless otherwise defined herein, terms defined in the Reimbursement Agreement are used herein as therein defined.
We have acted as counsel for the Company in connection with the preparation, execution and delivery of:
(1) the Reimbursement Agreement;
(2) the Series D Loan and Trust Agreement, dated as of May 1, 1991 (the "Loan and Trust Agreement"), among the Company, the Business Finance Authority (formerly The Industrial Development Authority) of the State of New Hampshire ("NHIDA") and State Street Bank and Trust Company, as trustee (the "Trustee"), pursuant to which NHIDA has issued, for the benefit of the Company, its Pollution Control Revenue Bonds (Public Service Company of New Hampshire Project - 1991 Taxable Series D);
(3) the Series D and Series E Bond Purchase Agreement, dated May 15, 1991, among NHIDA, the Company, Goldman, Sachs & Co. and Morgan Stanley & Co. Incorporated;
(4) Irrevocable Letter of Credit No. _____________, dated October 5, 1992 (the "Letter of Credit"), issued by the Issuing Bank;
(5) the Series D Pledge Agreement, dated as of May 1, 1991, between the Company and Citibank, N.A., as amended by a First Amendment thereto, dated as of October 1, 1992 (the "Pledge Amendment") among the Company, Citibank, N.A. and the Issuing Bank (such Series D Pledge Agreement, as amended by the Pledge Amendment, being herein referred to as the "Pledge Agreement"); and
(6) the Series D Remarketing Agreement, dated as of May 1, 1991, between the Company and Goldman, Sachs Money Markets Inc. (the "Remarketing Agreement").
In that connection, we have examined:
(a) The Reimbursement Agreement, the Loan and Trust Agreement, the Pledge Agreement and the Remarketing Agreement (hereinafter the "Documents").
(b) The Letter of Credit.
(c) The First Mortgage Indenture and the Series F First Mortgage Bonds.
(d) The articles of incorporation of the Company and all amendments thereto including the Articles of Merger governing the merger of NU Acquisition Corp. into the Company (collectively; the "Charter") and the by- laws of the Company and all amendments thereto (the "By-laws"), in each case as in effect on the date hereof.
(e) True and complete photocopies of the Rate Agreement and the Significant Contracts, and all amendments, modifications and supplements thereto.
(f) The other documents furnished by the Company pursuant to Section 5.01 of the Reimbursement Agreement.
(g) A certificate of the Secretary of State of Connecticut, dated September ___, 1992, attesting to the qualification as a foreign corporation and good standing of the Company in that State.
In addition, we have examined the originals, or copies certified to our satisfaction, of such other corporate records of the Company, certificates of public officials and of officers of the Company, and agreements, instruments and other documents, as we have deemed necessary as a basis for the opinions expressed below. In our examination of such agreements, instruments and documents, we have assumed the genuineness of all signatures (other than those of the Company), the authenticity of all agreements, instruments and documents submitted to us as originals, and the conformity to original agreements, instruments and documents of all agreements, instruments and documents submitted to us as certified, conformed or photostatic copies and the authenticity of the originals of such copies. As to questions of fact material to such opinions, we have assumed without verification and relied upon the accuracy of the representations as to factual matters set forth in the Documents and each other Loan Document and in certificates of the Company or its officers or of public officials. Nothing has come to our attention, however, calling into question the accuracy of such representations.
We are qualified to practice law in the State of Connecticut and for purposes of this opinion we do not purport to be experts on any laws other than the laws of the States of Connecticut and New York and the Federal laws of the United States.
Based upon the foregoing and upon such investigation as we have deemed necessary, we are of the following opinion:
1. The execution, delivery and performance by the Company of each Document and each Significant Contract are within the Company's corporate powers, have been duly authorized by all necessary corporate action, and do not and will not contravene (i) the Company's Charter or By-laws or (ii) any law (other than the state securities or "Blue Sky" laws of any jurisdiction, as to which we express no opinion) or, to the best of our knowledge, contractual restriction contained in any material agreement binding on or affecting the Company; and such execution, delivery and performance do not and will not result in or require the creation of any Lien (other than pursuant to the Loan Documents) upon or with respect to any of its properties. Each Document and each Significant Contract has been duly executed and delivered by the Company. The Merger was duly consummated on June 5, 1992, in accordance with the Plan and all requirements of law.
2, No authorization, consent, approval, license, permit,
certificate, exemption of, or filing or registration with, any
governmental authority or other legal or regulatory body (including,
without limitation, the Bankruptcy Court but other than in connection
with or in compliance with the provisions of the state securities or
"Blue Sky" laws of any jurisdiction, as to which we express no opinion)
is required in connection with either (i) the execution, delivery or
performance of the Reimbursement Agreement, the Pledge Amendment or any
Significant Contract or the performance of the Pledge Agreement or (ii)
the grant and perfection of any security interest or lien contemplated
by the Pledge Amendment, or if required, has been duly obtained or made
and is in full force and effect; and except as set forth in Schedule IV
to the Reimbursement Agreement or in the certificate referred to in
Section 5.01(c)(i) to the Reimbursement Agreement, all applicable
periods of time for review, rehearing or appeal with respect thereto
have expired.
3. The Reimbursement Agreement, the Pledge Agreement and each Significant Contract are (a) the legal, valid and binding obligations of the Company enforceable against the Company in accordance with their respective terms and (b) in full force and effect as to the Company, NU and its other Affiliates parties thereto.
4. Except as set forth in Schedule IV to the Reimbursement Agreement or in the certificate referred to in Section 5.01(c)(i) of the Reimbursement Agreement, to the best of our knowledge there is no pending or threatened action or proceeding affecting the Company or its properties before any court, governmental agency or arbitrator, which may, if adversely determined, purport to affect the legality, validity or enforceability of the Rate Agreement, any Document, any other Loan Document or any Significant Contract.
5. To the best of our knowledge, no event has occurred and is continuing which constitutes a material default under the Rate Agreement or any Significant Contract.
6. None of the Issuing Bank, the Agent nor any Participating Bank is required to qualify to do business in the State of Connecticut, or to comply with the requirement of any foreign lender statute in the State of Connecticut, by virtue solely of the execution, delivery, performance or enforcement of the Letter of Credit or the Reimbursement Agreement or as a condition or requirement to avail itself of the remedies provided by the Loan Documents.
7. The Company is a corporation duly qualified to do business in, and is in good standing in, the State of Connecticut.
The opinions set forth above are subject to the following qualifications:
(a) With respect to our opinions in paragraphs 1 and 3, insofar as such opinions relate to the laws of the State of New Hampshire, we have relied on the opinion of Rath, Young, Pignatelli and Oyer, P.A. delivered to you.
(b) With respect to our opinion in paragraph 1, insofar as such opinion relates to the laws of the States of Maine and Vermont, we have relied on the opinions of Drummond Woodsum Plimpton & MacMahon and Zuccaro, Willis & Bent, respectively, delivered to you.
(c) With respect to our opinion in paragraph 2, insofar as such opinion relates to any Governmental Approval required by any (i) New Hampshire governmental authority, or other New Hampshire state court or regulatory body, we have relied on the opinion of Rath, Young, Pignatelli and Oyer, P.A. delivered to you, (ii) Maine governmental authority, or other Maine state court or regulatory body, we have relied on the opinion of Drummond Woodsum Plimpton & MacMahon delivered to you and (iii) Vermont governmental authority, or other Vermont state court or regulatory body, we have relied on the opinion of Zuccaro, Willis & Bent delivered to you.
(d) Our opinion in paragraph 3 above (i) is subject to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar law affecting creditors' rights generally, to the effect of general principles of equity, including (without limitation) concepts of materiality, reasonableness, good faith and fair dealing (regardless of whether considered in a proceeding in equity or at law) and to the effect of certain laws and judicial decisions that may affect the enforceability of certain rights and remedies provided in the Pledge Agreement, none of which laws and judicial decisions, however, will make the rights and remedies provided in the Pledge Agreement inadequate for the practical realization of the benefits provided in the Pledge Agreement and (ii) assumes the binding effect of all documents referred to therein on all parties thereto other than the Company, NUSCO and NU and its other Affiliates.
(e) With respect to our opinion in paragraph 6, we have assumed
(or, in the case of clause (ii) below, have relied on the fact) that (i)
the Issuing Bank's, the Agent's and each Participating Bank's decision
to enter into the transactions contemplated by the Reimbursement
Agreement was not made in the State of Connecticut, (ii) the execution
and delivery of the Letter of Credit and the Reimbursement Agreement by
the Issuing Bank, the Agent and each Participating Bank did not take
place in the State of Connecticut, (iii) any funds disbursed by the
Issuing Bank, the Agent or any Participating Bank pursuant to the Letter
of Credit or the Reimbursement Agreement will be disbursed outside of
the State of Connecticut, (iv) all payments to the Issuing Bank, the
Agent or any Participating Bank pursuant to the Reimbursement Agreement
will be made to a bank account or bank accounts established at a branch
office or branch offices located outside of the State of Connecticut and
(v) the Issuing Bank, the Agent and each Participating Bank does not
have an office in Connecticut, and does not have officers or agents in
Connecticut for the solicitation of business. In addition, our opinion
in paragraph 6 is qualified with respect to the ability of the Issuing
Bank, the Agent or any Participating Bank to avail itself of the
remedies provided by the Loan Documents as follows. The Issuing Bank,
the Agent or any Participating Bank will be permitted to hold property
in Connecticut that it acquires by foreclosure or otherwise in payment
of debts due it without being considered to be transacting business in
Connecticut unless the Issuing Bank, the Agent or such Participating
Bank has engaged in any other activities or transactions that either
alone or in connection with the activities and transactions pursuant to
the Reimbursement Agreement would constitute "transacting business" in
the State of Connecticut for purposes of Section 36-5a of the
Connecticut General Statutes. The holding of any such property should
be conducted, however, with a view to, and in a manner reasonably
calculated to do nothing more than, preserve the value of the property
pending its resale by the Issuing Bank, the Agent or any Participating
Bank. In our view, the Connecticut courts likely would hold that the
active management and operation of such property by the Issuing Bank,
the Agent or any Participating Bank prior to the resale of the property
may constitute "transacting business" in Connecticut. While no
particular holding period may be specified, such period should not be
any longer than reasonably necessary for the prudent resale of the
property acquired in foreclosure.
(f) We express no opinion as to the validity of the Liens in the Collateral or the perfection or priority of such Liens.
(g) We note further that, in addition to the effect of general principles of equity described in subparagraph (d) above, courts have imposed an obligation on contracting parties to act reasonably and in good faith in the exercise of their contractual rights and remedies, and may also apply public policy considerations in limiting the right of parties seeking to obtain indemnification under circumstances where the conduct of such parties in the circumstances in question is determined to have constituted negligence.
(h) We express no opinion herein as to (i) Section 10.05 of the
Reimbursement Agreement, (ii) the enforceability of provisions
purporting to grant to a party conclusive rights of determination, (iii)
the availability of specific performance or other equitable remedies and
(iv) the enforceability of waivers by parties of their respective rights
and remedies under law.
We are aware that Rath, Young, Pignatelli and Oyer, P.A. will rely upon the opinion set forth in paragraph 7 of this opinion and that Porter & Travers will rely upon the opinions set forth in paragraphs 1, 2, and 4 of this opinion in rendering their opinions furnished pursuant to Sections 5.01(f)(ii) and 5.01(f)(vi), respectively, of the Reimbursement Agreement, and we hereby authorize such reliance.
Very truly yours,
EXHIBIT 5.01B
[Form of Opinion of Rath, Young, Pignatelli and Oyer, P.A.]
[Closing Date]
To Barclays Bank PLC, New York Branch,
as Agent and as Issuing Bank under the
Reimbursement Agreement referred to below,
and to each Participating Bank thereunder
Public Service Company of New Hampshire
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 5.01(f)(ii) of the Series D Letter of Credit and Reimbursement Agreement, dated as of October 1, 1992 (the "Reimbursement Agreement"), among Public Service Company of New Hampshire (the "Company"), Barclays Bank PLC, New York Branch, as the Agent (the "Agent") and Issuing Bank (the "Issuing Bank") thereunder, and the Participating Banks referred to therein. Unless otherwise defined herein, terms defined in the Reimbursement Agreement are used herein as therein defined.
We have acted as special New Hampshire counsel to the Company in connection with the execution and delivery of:
(1) the Reimbursement Agreement;
(2) Irrevocable Letter of Credit No. _____________, dated October 5, 1992 (the "Letter of Credit"), issued by the Issuing Bank; and
(3) the First Amendment, dated as of October 1, 1992 (the "Pledge Amendment") among the Company, Citibank, N.A. and the Issuing Bank, to the Series D Pledge Agreement, dated as of May 1, 1991, between the Company and Citibank, N.A. (such Series D Pledge Agreement being herein referred to as the "Original Pledge Agreement;" the Original Pledge Agreement, as amended by the Pledge Amendment, being herein referred to as the "Pledge Agreement").
In that connection, we have examined:
(a) The Reimbursement Agreement and the Pledge Agreement (hereinafter the "Documents").
(b) The Letter of Credit.
(c) The articles of incorporation of the Company and all amendments thereto including the Articles of Merger governing the merger of NU Acquisition Corp. into the Company (collectively; the "Charter") and the by- laws of the Company and all amendments thereto (the "By-laws"), in each case as in effect on the date hereof.
(d) True and complete photocopies of the Rate Agreement and the Significant Contracts, and all amendments, modifications and supplements thereto.
(e) A certificate of the Secretary of State of New Hampshire, dated September ___, 1992, attesting to the continued corporate existence and good standing of the Company in that State.
In addition, we have examined the originals, or copies certified to our satisfaction, of such other corporate records of the Company, certificates of public officials and of officers of the Company, and agreements, instruments and other documents, as we have deemed necessary as a basis for the opinions expressed below. In our examination of such agreements, instruments and documents, we have assumed the genuineness of all signatures (other than those of the Company), the authenticity of all agreements, instruments and documents submitted to us as originals, and the conformity to original agreements, instruments and documents of all agreements, instruments and documents submitted to us as certified, conformed or photostatic copies and the authenticity of the originals of such copies. Our knowledge as to factual matters is based only upon certificates of officers of the Company that have been delivered to us and a review of our files, and we have assumed without verification and relied upon the accuracy of the representations as to factual matters set forth in the Documents and in certificates of the Company or its officers or of public officials. Nothing has come to our attention, however, calling into question the accuracy of such representations.
We are qualified to practice law in the State of New Hampshire and for purposes of this opinion we do not purport to be experts on any laws other than the laws of the State of New Hampshire, including any political subdivision thereof ("New Hampshire").
Based upon the foregoing and upon such investigation as we have deemed necessary, we are of the following opinion:
1. The Company is a corporation duly organized, validly existing and in good standing under the laws of New Hampshire, and is duly qualified to do business in, and is in good standing in, all other jurisdictions where the nature of its business or the nature of property owned or used by it makes such qualification necessary.
2. The execution, delivery and performance by the Company of each Document and each Significant Contract are within the Company's corporate powers, have been duly authorized by all necessary corporate action, and do not and will not contravene (i) the Company's Charter or By-laws or (ii) any New Hampshire law (other than the state securities or "Blue Sky" laws of New Hampshire, as to which we express no opinion) or, to the best of our knowledge, contractual restriction contained in any material agreement binding on or affecting the Company; and such execution, delivery and performance do not and will not result in or require the creation of any Lien (other than pursuant to the Loan Documents) upon or with respect to any of its properties. Each Document and each Significant Contract has been duly executed and delivered by the Company. The Merger was duly consummated on June 5, 1992, in accordance with the Plan and all requirements of New Hampshire law.
3. No authorization, consent, approval, license, permit,
certificate, exemption of, or filing or registration with any New
Hampshire governmental authority or other New Hampshire legal or
regulatory body (which does not include the United States Bankruptcy
Court for the District of New Hampshire and other than in connection
with or in compliance with the provisions of the state securities or
"Blue Sky" laws of any jurisdiction, as to which we express no opinion)
is required in connection with either (i) the execution, delivery or
performance of the Reimbursement Agreement, the Pledge Amendment or any
Significant Contract or the performance of the Pledge Agreement or (ii)
the grant and perfection of any security interest or lien contemplated
by the Pledge Amendment, or, if required, has been duly obtained or made
and is in full force and effect; and except as set forth in Schedule IV
to the Reimbursement Agreement or in the certificate referred to in
Section 5.01(c)(i) to the Reimbursement Agreement, all applicable
periods of time for review, rehearing or appeal with respect thereto
have expired.
4. The Reimbursement Agreement, the Pledge Agreement and each Significant Contract are (a) the legal, valid and binding obligations of the Company enforceable against the Company (to the extent such enforceability is a matter of New Hampshire law) in accordance with their respective terms and (b) in full force and effect as to the Company.
5. Except as set forth in Schedule IV to the Reimbursement Agreement or in the certificate referred to in Section 5.01(c)(i) of the Reimbursement Agreement, to the best of our knowledge there is no pending or threatened action or proceeding affecting the Company or its properties before any New Hampshire court, governmental agency or arbitrator, which may, if adversely determined, purport to affect the legality, validity or enforceability of the Rate Agreement, any Document, any other Loan Document or any Significant Contract.
6. To the best of our knowledge, no event has occurred and is continuing which constitutes a material default by the Company under the Rate Agreement or any Significant Contract.
7. In any action or proceeding arising out of or relating to the Reimbursement Agreement or the Pledge Agreement in any court in New Hampshire, such court would recognize and give effect to the provisions of the Reimbursement Agreement or the Pledge Agreement, as the case may be, wherein the parties thereto agreed that the Reimbursement Agreement or the Pledge Agreement, as the case may be, shall be governed by, and construed in accordance with, the laws of the State of New York. However, if a court were to hold that the Reimbursement Agreement or the Pledge Agreement is governed by, and to be construed in accordance with, the laws of New Hampshire, the Reimbursement Agreement or the Pledge Agreement, as the case may be, would, under the laws of New Hampshire, constitute a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to the qualifications that are set forth in subparagraphs (b), (c) and (d) contained in the penultimate paragraph hereof.
8. None of the Issuing Bank, the Agent nor any Participating Bank is required to qualify to do business in New Hampshire, or to comply with the requirement of any foreign lender statute in New Hampshire, by virtue solely of the execution, delivery, performance or enforcement of the Letter of Credit or the Reimbursement Agreement or as a condition or requirement to avail itself of the remedies provided by the Loan Documents; nor will the Issuing Bank, the Agent or any such Participating Bank be subject to taxation in New Hampshire solely by virtue of any such circumstance.
The opinions set forth above are subject to the following qualifications:
(a) With respect to our opinion in paragraph 1, insofar as such opinion relates to the laws of the States of Connecticut, Maine and Vermont, we have relied on the opinions of Day, Berry & Howard, Drummond Woodsum Plimpton & MacMahon and Zuccaro, Willis & Bent, respectively, delivered to you.
(b) Our opinions in paragraphs 4 and 7 above are subject to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar law affecting creditors' rights generally.
(c) Our opinions in paragraphs 4 and 7 above are subject to the effect of general principles of equity, including (without limitation) concepts of materiality, reasonableness, good faith and fair dealing (regardless of whether considered in a proceeding in equity or at law).
(d) Our opinions in paragraphs 4 and 7 above are subject to the effect of certain laws and judicial decisions that may affect the enforceability of certain rights and remedies provided in the Pledge Agreement, none of which laws and judicial decisions, however, will make the rights and remedies provided in the Pledge Agreement inadequate for the practical realization of the benefits provided in the Pledge Agreement, and assume the binding affect of all documents referred to therein on all parties thereto other than the Company.
(e) We express no opinion herein as to (i) Section 10.05 of the
Reimbursement Agreement, (ii) the enforceability of provisions
purporting to grant to a party conclusive rights of determination, (iii)
the availability of specific performance or other equitable remedies and
(iv) the enforceability of waivers by parties of their respective rights
and remedies under law.
(f) We note further that, in addition to the effect of general principles of equity described in subparagraph (c) above, courts have imposed an obligation on contracting parties to act reasonably and in good faith in the exercise of their contractual rights and remedies, and may also apply public policy considerations in limiting the right of parties seeking to obtain indemnification under circumstances where the conduct of such parties in the circumstances in question is determined to have constituted negligence.
(g) With respect to our opinion in paragraph 4 of this opinion, we note that the Tax Allocation Agreement and the Sharing Agreement provide that they are governed by Connecticut law, and the Reimbursement Agreement and the Pledge Agreement provide that they are governed by New York law.
(h) Our opinions assume that the execution and delivery by the Company of the Original Pledge Agreement was within the Company's corporate powers, was duly authorized by all necessary corporate action and was duly executed and delivered by the Company.
(i) We express no opinion as to the validity of the Liens in the Collateral or the perfection or priority of such Liens.
We are aware that Day, Berry & Howard will rely upon the opinions set forth in paragraphs 2, 3 and 4 of this opinion and that Porter & Travers will rely upon the opinions set forth in paragraphs 1, 2, 3 and 5 of this opinion in rendering their opinions furnished pursuant to Section 5.01(f)(i) and 5.01(f)(vi), respectively, of the Reimbursement Agreement, and we hereby authorize such reliance. This opinion is otherwise furnished to you solely for your use and the use of the Company and, unless authorized by us in writing, may not be relied upon or used by any other party.
Very truly yours,
EXHIBIT 5.01C
[Form of Opinion of Pierre O. Caron, Esq.]
[Closing Date]
To Barclays Bank PLC, New York Branch,
as Agent and as Issuing Bank under the
Reimbursement Agreement referred to below,
and to each Participating Bank thereunder
Public Service Company of New Hampshire
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 5.01(f)(iii) of the Series D Letter of Credit and Reimbursement Agreement, dated as of October 1, 1992 (the "Reimbursement Agreement"), among Public Service Company of New Hampshire (the "Company"), Barclays Bank PLC, New York Branch, as the Agent (the "Agent") and Issuing Bank (the "Issuing Bank") thereunder, and the Participating Banks referred to therein. Unless otherwise defined herein, terms defined in the Reimbursement Agreement are used herein as therein defined.
I am Assistant General Counsel of the Company and am the head of the Company's Law Department, which is responsible for obtaining and maintaining all Governmental Approvals of the type referred to in clause (iii) in the definition of "Governmental Approvals" contained in the Reimbursement Agreement.
Based upon such investigation as I have deemed necessary, including, without limitation, conversations with other responsible officers of the Company, I am of the following opinion:
1. The Company has obtained all Governmental Approvals referred to in clause (iii) in the definition of "Governmental Approvals" contained in the Reimbursement Agreement, except those not yet required but which are obtainable in the ordinary course of business as and when required and those the absence of which would not materially adversely affect the financial condition, properties, prospects or operations of the Company as a whole.
2. Except as set forth in Schedule IV to the Reimbursement Agreement or in the certificate referred to in Section 5.01(c)(i) of the Reimbursement Agreement, to the best of my knowledge there is no pending or threatened action or proceeding affecting the Company or its properties before any New Hampshire court, governmental agency or arbitrator, which may, if adversely determined, materially adversely affect the financial condition, properties, prospects or operations of the Company as a whole.
Very truly yours,
EXHIBIT 5.01D
[Form of Opinion of Drummond
Woodsum Plimpton & MacMahon]
[Closing Date]
To Barclays Bank PLC, New York Branch,
as Agent and as Issuing Bank under the
Reimbursement Agreement referred to below,
and to each Participating Bank thereunder
Public Service Company of New Hampshire
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 5.01(f)(iv) of the Series D Letter of Credit and Reimbursement Agreement, dated as of October 1, 1992 (the "Reimbursement Agreement"), among Public Service Company of New Hampshire (the "Company"), Barclays Bank PLC, New York Branch, as the Agent (the "Agent") and Issuing Bank (the "Issuing Bank") thereunder, and the Participating Banks referred to therein. Unless otherwise defined herein, terms defined in the Reimbursement Agreement are used herein as therein defined.
We have acted as special Maine counsel for the Company in connection with the transactions contemplated under the Reimbursement Agreement.
In connection with this opinion, we have examined:
(1) the Reimbursement Agreement;
(2) the Series D Loan and Trust Agreement, dated as of May 1, 1991 (the "Loan and Trust Agreement"), among the Company, the Business Finance Authority (formerly The Industrial Development Authority) of the State of New Hampshire ("NHIDA") and State Street Bank and Trust Company, as trustee (the "Trustee"), pursuant to which NHIDA has issued, for the benefit of the Company, its Pollution Control Revenue Bonds (Public Service Company of New Hampshire Project - 1991 Taxable Series D);
(3) the Series D and Series E Bond Purchase Agreement, dated May 15, 1991, among NHIDA, the Company, Goldman, Sachs & Co. and Morgan Stanley & Co. Incorporated;
(4) Irrevocable Letter of Credit No. _____________, dated October 5, 1992 (the "Letter of Credit"), issued by the Issuing Bank;
(5) the Series D Pledge Agreement, dated as of May 1, 1991, between the Company and Citibank, N.A., as amended by a First Amendment thereto, dated as of October 1, 1992 (the "Pledge Amendment") among the Company, Citibank, N.A. and the Issuing Bank (such Series D Pledge Agreement, as amended by the Pledge Amendment, being herein referred to as the "Pledge Agreement");
(6) the Series D Remarketing Agreement, dated as of May 1, 1991, between the Company and Goldman, Sachs Money Markets Inc. (the "Remarketing Agreement"); and
(7) a certificate of the Secretary of State of Maine, dated September ___, 1992, attesting to the authorization to do business and good standing of the Company in Maine.
We have also examined the other Loan Documents, the Rate Agreement the Significant Contracts, the originals or copies certified to our satisfaction of such corporate records of the Company, such certificates of public officials and officers of the Company, and such other agreements, instruments and documents as we have deemed necessary as a basis for the opinions expressed below. In our examination of such agreements, instruments and documents, we have assumed the genuineness of all signatures, the authenticity of all agreements, instruments and documents submitted to us as originals, and the conformity to original agreements, instruments and documents of all agreements, instruments and documents submitted to us as certified, conformed or photostatic copies and the authenticity of the originals of such copies.
As to questions of fact material to such opinions, we have, when relevant facts were not independently established by us, relied upon certificates of the Company or its officers or of public officials.
We are assuming, for purposes of this opinion, that the Company is a corporation organized and existing under the laws of the State of New Hampshire and has, under its articles of incorporation, all requisite corporate power and authority to own and operate its properties and carry on its business as presently conducted, including without limitation the power to make, generate, sell, distribute and supply electricity at wholesale and retail.
We are qualified to practice law in the State of Maine and we do not purport to be experts on any laws other than the laws of the State of Maine.
Based upon the foregoing and upon such investigation as we deemed necessary, we are of the opinion that:
1. The Company is a corporation duly qualified to do business in, and is in good standing in, the State of Maine.
2. The execution, delivery and performance by the Company of the Rate Agreement, the Reimbursement Agreement, the Loan and Trust Agreement, the Pledge Agreement, the Remarketing Agreement, each other Loan Document and each Significant Contract do not and will not contravene the laws of the State of Maine (other than the state securities or "Blue Sky" laws of Maine, as to which we express no opinion).
3. No Governmental Approval of the types referred to in clauses
(i) and (ii) in the definition of "Governmental Approvals" contained in
the Reimbursement Agreement by any governmental authority in the State
of Maine or by any legal or regulatory body in the State of Maine (other
than in connection with or in compliance with the state securities or
"Blue Sky" laws of Maine, as to which we express no opinion) is
required, or if required, has been duly obtained or made, and is in full
force and effect; and except as set forth in Schedule IV to the
Reimbursement Agreement or in the certificate referred to in Section
5.01(c)(i) to the Reimbursement Agreement, all applicable periods of
time for review, rehearing or appeal with respect thereto have expired.
4. To the best of our knowledge there is no pending or threatened
action or proceeding in the State of Maine affecting the Company or its
properties before any court, governmental agency or arbitrator, which
may, if adversely determined, purport to affect the legality, validity
or enforceability of the Rate Agreement, the Reimbursement Agreement,
the Loan and Trust Agreement, the Pledge Agreement, the Remarketing
Agreement, any other Loan Document or any Significant Contract.
We are aware that Day, Berry & Howard, Rath, Young, Pignatelli and Oyer, P.A. and Porter & Travers will rely upon the opinions set forth above in rendering their opinions furnished pursuant to Section 5.01(f)(i), Section 5.01(f)(ii) and Section 5.01(f)(vi), respectively, of the Reimbursement Agreement, and we hereby authorize such reliance.
Very truly yours,
EXHIBIT 5.01E
[Form of Opinion of Zuccaro, Willis & Bent]
[Closing Date]
To Barclays Bank PLC, New York Branch,
as Agent and as Issuing Bank under the
Reimbursement Agreement referred to below,
and to each Participating Bank thereunder
Public Service Company of New Hampshire
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 5.01(f)(v) of the Series D Letter of Credit and Reimbursement Agreement, dated as of October 1, 1992 (the "Reimbursement Agreement"), among Public Service Company of New Hampshire (the "Company"), Barclays Bank PLC, New York Branch, as the Agent (the "Agent") and Issuing Bank (the "Issuing Bank") thereunder, and the Participating Banks referred to therein. Unless otherwise defined herein, terms defined in the Reimbursement Agreement are used herein as therein defined.
We have acted as special Vermont counsel for the Company in connection with the transactions contemplated under the Reimbursement Agreement.
In connection with this opinion, we have examined:
(1) the Reimbursement Agreement;
(2) the Series D Loan and Trust Agreement, dated as of May 1, 1991 (the "Loan and Trust Agreement"), among the Company, the Business Finance Authority (formerly The Industrial Development Authority) of the State of New Hampshire ("NHIDA") and State Street Bank and Trust Company, as trustee (the "Trustee"), pursuant to which NHIDA has issued, for the benefit of the Company, its Pollution Control Revenue Bonds (Public Service Company of New Hampshire Project - 1991 Taxable Series D);
(3) the Series D and Series E Bond Purchase Agreement, dated May 15, 1991, among NHIDA, the Company, Goldman, Sachs & Co. and Morgan Stanley & Co. Incorporated;
(4) Irrevocable Letter of Credit No. _____________, dated October 5, 1992 (the "Letter of Credit"), issued by the Issuing Bank;
(5) the Series D Pledge Agreement, dated as of May 1, 1991, between the Company and Citibank, N.A., as amended by a First Amendment thereto, dated as of October 1, 1992 (the "Pledge Amendment") among the Company, Citibank, N.A. and the Issuing Bank (such Series D Pledge Agreement, as amended by the Pledge Amendment, being herein referred to as the "Pledge Agreement"); and
(6) the Series D Remarketing Agreement, dated as of May 1, 1991, between the Company and Goldman, Sachs Money Markets Inc. (the "Remarketing Agreement").
(7) Certificate of the Secretary of State of Vermont, dated September ___, 1992, attesting to the authorization to do business and good standing of the Company in Vermont.
We have also examined the other Loan Documents, the Rate Agreement, the Significant Contracts, the originals or copies certified to our satisfaction of such corporate records of the Company, such certificates of public officials and officers of the Company, and such other agreements, instruments and documents as we have deemed necessary as a basis for the opinions expressed below. In our examination of such agreements, instruments and documents, we have assumed the genuineness of all signatures, the authenticity of all agreements, instruments and documents submitted to us as originals, and the conformity to original agreements, instruments and documents of all agreements, instruments and documents submitted to us as certified, conformed or photostatic copies and the authenticity of the originals of such copies.
As to questions of fact material to such opinions, we have, when relevant facts were not independently established by us, relied upon certificates of the Company or its officers or of public officials.
We are assuming, for purposes of this opinion, that the Company is a corporation organized and existing under the laws of the State of New Hampshire and has, under its articles of incorporation, all requisite corporate power and authority to own and operate its properties and carry on its business as presently conducted, including without limitation the power to make, generate, sell, distribute and supply electricity at wholesale and retail.
We are qualified to practice law in the State of Vermont and we do not purport to be experts on any laws other than the laws of the State of Vermont.
Based upon the foregoing and upon such investigation as we deemed necessary, we are of the opinion that:
1. The Company is a corporation duly qualified to do business in, and is in good standing in, the State of Vermont.
2. The execution, delivery and performance by the Company of the Rate Agreement, the Reimbursement Agreement, the Loan and Trust Agreement, the Pledge Agreement, the Remarketing Agreement, each other Loan Document and each Significant Contract do not and will not contravene the laws of the State of Vermont (other than the state securities or "Blue Sky" laws of Vermont, as to which we express no opinion).
3. No Governmental Approval of the types referred to in clauses
(i) and (ii) in the definition of "Governmental Approvals" contained in
the Reimbursement Agreement by any governmental authority in the State
of Vermont or by any legal or regulatory body in the State of Vermont
(other than in connection with or in compliance with the state
securities or "Blue Sky" laws of Vermont, as to which we express no
opinion) is required, or if required, has been duly obtained or made,
and is in full force and effect; and except as set forth in Schedule IV
to the Reimbursement Agreement or in the certificate referred to in
Section 5.01(c)(i) to the Reimbursement Agreement, all applicable
periods of time for review, rehearing or appeal with respect thereto
have expired.
4. To the best of our knowledge there is no pending or threatened action or proceeding in the State of Vermont affecting the Company or its properties before any court, governmental agency or arbitrator, which may, if adversely determined, purport to affect the legality, validity or enforceability of the Rate Agreement, the Reimbursement Agreement, the Loan and Trust Agreement, the Pledge Agreement, the Remarketing Agreement, any other Loan Document or any Significant Contract.
We are aware that Day, Berry & Howard, Rath, Young, Pignatelli and Oyer, P.A. and Porter & Travers will rely upon the opinions set forth above in rendering their opinions furnished pursuant to Section 5.01(f)(i), Section 5.01(f)(ii) and Section 5.01(f)(vi), respectively, of the Reimbursement Agreement, and we hereby authorize such reliance.
Very truly yours,
EXHIBIT 5.01F
[Form of Opinion of Porter & Travers]
October 5, 1992
To Barclays Bank PLC, New York Branch,
as Agent and as Issuing Bank under the
Reimbursement Agreement referred to below,
and to each Participating Bank thereunder
Public Service Company of New Hampshire
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 5.01(f)(vi) of the Series D Letter of Credit and Reimbursement Agreement, dated as of October 1, 1992 (the "Reimbursement Agreement"), among Public Service Company of New Hampshire (the "Company"), Barclays Bank PLC, New York Branch, as the Agent (the "Agent") and Issuing Bank (the "Issuing Bank") thereunder, and the Participating Banks referred to therein. Unless otherwise defined herein, terms defined in the Reimbursement Agreement are used herein as therein defined.
We have acted as special New York counsel to the Agent and the Issuing Bank in connection with the preparation, execution and delivery of the Reimbursement Agreement and the issuance by the Issuing Bank of the Letter of Credit referred to therein.
In that connection, we have examined the following documents:
(a) The Reimbursement Agreement, executed by each of the parties thereto; and
(b) The documents furnished to you today pursuant to Section 5.01 of the Reimbursement Agreement, including the opinions of counsel delivered pursuant to Sections 5.01(f)(i) through (v) of the Reimbursement Agreement (collectively, the "Opinions").
In our examination of the documents referred to above, we have assumed the authenticity of all such documents submitted to us as originals, the genuineness of all signatures, the due authority of the parties executing such documents and the conformity to the originals of all such documents submitted to us as copies or telecopies. We have also assumed that the Agent, the Issuing Bank and each Participating Bank have duly executed and delivered, with all necessary power and authority (corporate and otherwise), the Reimbursement Agreement and that all requisite consents of Participating Banks have been obtained under Sections 5.01 of the Reimbursement Agreement.
To the extent that our opinions expressed below involve conclusions as to matters governed by laws other than the laws of the State of New York, we have relied upon the Opinions and have assumed without independent investigation the correctness of the matters set forth therein, our opinions expressed below being subject to the assumptions, qualifications and limitations set forth in the Opinions. As to matters of fact, we have relied solely upon the documents we have examined.
Based upon the foregoing, and subject to the qualifications set forth below, we are of the opinion that:
5. The Reimbursement Agreement is the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms.
6. The Opinions and the other documents referred to in paragraph
(b), above, are substantially responsive to the requirements of the
sections of the Reimbursement Agreement pursuant to which the same have
been delivered.
Our opinions are subject to the following qualifications:
(a) Our opinion in paragraph 1, above, is subject to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar law affecting creditors' rights generally.
(b) Our opinion in paragraph 1, above, is subject to the effect of general principles of equity, including (without limitation) concepts of materiality, reasonableness, good faith and fair dealing (regardless of whether considered in a proceeding in equity or at law).
(c) We note further that, in addition to the application of equitable principles described above, courts have imposed an obligation on contracting parties to act reasonably and in good faith in the exercise of their contractual rights and remedies, and may also apply public policy considerations in limiting the right of parties seeking to obtain indemnification.
(d) We express no opinion herein as to (i) Section 10.05 of the
Reimbursement Agreement, (ii) the enforceability of provisions
purporting to grant to a party conclusive rights of determination, (iii)
the availability of specific performance or other equitable remedies and
(iv) the enforceability of waivers by parties of their respective rights
and remedies under law.
(e) Our opinions expressed above are limited to the law of the State of New York and the Federal law of the United States, and we do not express any opinion herein concerning any other law. Without limiting the generality of the foregoing, we express no opinion as to the effect of the law of any jurisdiction other than the State of New York wherein the Issuing Bank, the Agent or any Participating Bank may be located or wherein enforcement of the Reimbursement Agreement may be sought which limits the rates of interest legally chargeable or collectible.
Very truly yours,
Exhibit 4.3.9.1
AMENDED AND RESTATED
IRREVOCABLE LETTER OF CREDIT
NO. 833162
December 17, 1992
Security Pacific National Trust Company (New York)
2 Rector Street
New York, New York 10006
Attention: Corporate Trust Division
Dear Sir or Madam:
We hereby establish, at the request and for the account of Public
Service Company of New Hampshire (the "Account Party"), in your favor, as
paying agent (the "Paying Agent") under that certain Series D Loan and
Trust Agreement, dated as of May 1, 1991, as supplemented by a First
Supplement thereto dated as of December 1, 1992, (as so supplemented, the
"Indenture"), by and among the Business Finance Authority (formerly The
Industrial Development Authority) of the State of New Hampshire (the
"Issuer"), the Account Party and State Street Bank and Trust Company, as
trustee (the "Trustee"), pursuant to which $39,500,000 in outstanding
aggregate principal amount of the Issuer's Pollution Control Revenue Bonds
(Public Service Company of New Hampshire Project - 1991 Taxable Series D)
and $75,000,000 in outstanding aggregate principal amount of the Issuer's
Pollution Control Refunding Revenue Bonds (Public Service Company of New
Hampshire Project - 1992 Tax-Exempt Series D) (such 1991 Taxable Series D
and 1992 Tax-Exempt Series D bonds being hereinafter referred to,
collectively, as the "Bonds"), have been issued, our Amended and Restated
Irrevocable Letter of Credit No. 833162, in the amount of US$117,858,000
(ONE HUNDRED SEVENTEEN MILLION EIGHT HUNDRED FIFTY-EIGHT THOUSAND AND NO
ONE-HUNDREDTHS UNITED STATES DOLLARS), subject to reduction and
reinstatement as provided below. This Amended and Restated Irrevocable
Letter of Credit No. 833162 amends, restates and supersedes our Irrevocable
Letter of Credit No. 833162 issued to you on October 5, 1992.
(1) Credit Termination Date. This Letter of Credit shall expire on the earliest to occur of (i) October 1, 1995 (the "Stated Termination Date"), (ii) the date upon which we honor a draft accompanying a written and completed certificate signed by you in substantially the form of Exhibit 2 attached hereto, and stating therein that such draft is the final draft to be drawn under this Letter of Credit and that, upon the honoring of such draft, this Letter of Credit will expire in accordance with its terms, (iii) the date upon which we receive a written certificate signed by you and stating therein that no Bonds entitled to the benefits of this Letter of Credit (as determined in accordance with the Indenture) ("Eligible Bonds") are "outstanding" under the Indenture, (iv) the fifth business day following receipt by you and the Trustee of written notice from us that an Event of Default (as defined below) has occurred under the Reimbursement Agreement (as defined below) and of our determination to terminate this Letter of Credit on such fifth business day and (v) the date upon which we receive a written certificate signed by you and stating therein that a substitute or replacement Credit Facility (as defined in the Indenture) has been provided pursuant to Section 317 of the Indenture (such earliest date being the "Credit Termination Date").
As used herein, the term "business day" shall mean any day of the year
(i) that is not a Sunday or legal holiday or a day on which banking
institutions are authorized pursuant to law to close, (ii) that is not a
day on which the corporate trust office of the First Mortgage Bond Trustee
(as defined in the Indenture) is not open for business, (iii) that is a day
on which banks are not required or authorized to close in New York City and
(iv) that is a day on which banking institutions in all of the cities in
which the principal offices of the Trustee, the Paying Agent and the
Remarketing Agent (as defined in the Indenture) are located are not
required or authorized to remain closed and on which the New York Stock
Exchange is not closed.
As used herein "Reimbursement Agreement" shall mean the Series D Letter of Credit and Reimbursement Agreement, dated as of October 1, 1992, between the Account Party, us and certain Participating Banks referred to therein, and the term "Event of Default" shall mean an "Event of Default" as that term is defined in the Reimbursement Agreement.
(2) Principal, Interest and Premium Components. The aggregate amount which may be drawn under this Letter of Credit, subject to reductions in amount and reinstatement as provided below, is US$117,858,000.00 (ONE HUNDRED SEVENTEEN MILLION EIGHT HUNDRED FIFTY-EIGHT THOUSAND AND NO ONE- HUNDREDTHS UNITED STATES DOLLARS), of which the aggregate amounts set forth below may be drawn as indicated.
(i) An aggregate amount not exceeding US$114,500,000.00 (ONE HUNDRED FOURTEEN MILLION FIVE HUNDRED THOUSAND AND NO ONE-HUNDREDTHS UNITED STATES DOLLARS), as such amount may be reduced and reinstated as provided below, (the "Principal Component") may be drawn in respect of payment of principal (whether upon scheduled or accelerated maturity, or upon redemption) of Eligible Bonds or the portion of the purchase price of Eligible Bonds corresponding to principal.
(ii) An aggregate amount not exceeding US$3,358,000.00 (THREE MILLION THREE HUNDRED FIFTY-EIGHT THOUSAND AND NO ONE-HUNDREDTHS UNITED STATES DOLLARS), as such amount may be reduced and reinstated as provided below, (the "Interest Component") may be drawn in respect of payment of:
(A) accrued and unpaid interest on Eligible Bonds not in the Flexible Mode (as defined in the Indenture) or that portion of the redemption price or purchase price of such Eligible Bonds corresponding to accrued and unpaid interest, but not more than an amount equal to accrued and unpaid interest on such Eligible Bonds for up to a maximum of 1) 128 days immediately preceding the date of such drawing (in the case of Eligible Bonds that are 1991 Taxable Series D Bonds) and 2) 45 days immediately preceding the date of such drawing (in the case of Eligible Bonds that are 1992 Tax-Exempt Series D Bonds); and
(B) unpaid interest (whether accrued or to accrue) on Eligible Bonds in the Flexible Mode or that portion of the redemption price or purchase price of such Eligible Bonds corresponding to such interest, but not more than an amount equal to such interest on such Eligible Bonds for up to a maximum of 1) 128 days immediately preceding the next Purchase Date (as defined in the Indenture) for each such Eligible Bond (in the case of Eligible Bonds that are 1991 Taxable Series D Bonds) (or, if interest on any such Eligible Bond was not paid on the most recent Purchase Date for such Bond, for up to a maximum of 128 days immediately preceding the date of such drawing) and 2) 45 days immediately preceding such Purchase Date (in the case of Eligible Bonds that are 1992 Tax-Exempt Series D Bonds) (or, if interest on any such Eligible Bond was not paid on the most recent Purchase Date for such Bond, for up to a maximum of 45 days immediately preceding the date of such drawing);
calculated, in each case referred to in the foregoing clause (A) or clause (B) at a maximum rate of:
(X) sixteen percent (16%) per annum on the basis of a year of 360 days for the actual days elapsed, or such lesser rate of interest as shall equal the Maximum Interest Rate (as defined in the Indenture) in effect under the Indenture with respect to such Eligible Bonds that are 1991 Taxable Series D Bonds (whether or not in the Flexible Mode); and
(Y) twelve percent (12%) per annum on the basis of a year of 365 or 366 days (as applicable) for the actual days elapsed, or such lesser rate of interest as shall equal the Maximum Interest Rate in effect under the Indenture with respect to such Eligible Bonds that are 1992 Tax-Exempt Series D Bonds (whether or not in the Flexible Mode).
(iii) An aggregate amount not exceeding US$0.00 (ZERO UNITED STATES DOLLARS) may be drawn in respect of premium on Eligible Bonds (the "Premium Component"). If, subsequent to the date hereof, the Premium Component shall be increased by us at the request of the Account Party, the Premium Component shall be subject to reduction as provided below, and amounts drawn in respect thereof shall not be subject to reinstatement.
(3) Drawings. Funds under this Letter of Credit are available to you against (i) your draft, stating on its face: "Drawn under Amended and Restated Irrevocable Letter of Credit No. 833162, dated December 17, 1992", and (ii) the appropriate certificate specified below, purportedly executed by you and appropriately completed.
Exhibit Setting Forth
Type of Drawing Form of Certificate Required
Tender Drawing Exhibit 1
(as hereinafter defined)
Redemption/Mandatory Exhibit 2
Purchase Drawing
(as hereinafter defined)
Interest Drawing Exhibit 3
(as hereinafter
defined)
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Drafts and certificates hereunder shall be dated the date of presentation and shall be presented at our office located at 75 Wall Street, 17th Floor, New York, New York 10265, Attention: Trade Services Group (or at such other office as we may designate by written notice to you). Presentation of such drafts and certificates may be made (a) by physical presentation of such drafts and certificates or (b) by facsimile transmission of such drafts and certificates received by us at (212) 412- 5111 (or at such other number as we may designate by written notice to you) with prior telephone notice to us at (212) 412-5121/22, Attention: Dawn Townsend or Pamela Seeley, (or at such other number as we may designate by written notice to you) that such presentation is to be made by facsimile transmission and with the original executed drafts and certificates to be received by us not later than our close of business on the next business day, it being understood that payments hereunder shall be made upon receipt by us of such facsimile transmission; provided, however, that presentations of drafts and certificates relating to Tender Drawings in respect of Eligible Bonds in the Flexible Mode shall in all instances be made in accordance with the foregoing clause (b). Drafts drawn under and in strict compliance with the terms of this Letter of Credit will be duly honored by us upon presentation thereof in accordance with this Paragraph 3 if presented on or prior to 4:00 P.M. (New York City time) on the Credit Termination Date as follows:
(i) Tender Drawings; Flexible Mode: In the case of drafts and certificates relating to Tender Drawings in respect of Eligible Bonds in the Flexible Mode presented in accordance with the foregoing clause (b):
(A) if such drafts and certificates are presented as aforesaid at or prior to 1:30 P.M. (New York City time) on a business day, and provided that such drafts and certificates strictly conform to the requirements of this Letter of Credit, we will initiate a wire transfer of the amount so drawn to your account indicated below at or prior to 3:30 P.M. (New York City time) on the same business day;
(B) if such drafts and certificates are presented as aforesaid after 1:30 P.M. but at or prior to 4:00 P.M. (New York City time) on a business day, and provided that such drafts and certificates strictly conform to the requirements of this Letter of Credit, we will initiate a wire transfer of the amount so drawn to your account indicated below at or prior to 10:00 A.M. on the business day next succeeding the business day on which such drafts and certificates were presented (notwithstanding that such day of presentation may have been the Credit Termination Date); and
(C) if such drafts and certificates are presented as aforesaid after 4:00 P.M. (New York City time) on a business day, and provided that such drafts and certificates strictly conform to the requirements of this Letter of Credit, we will initiate a wire transfer of the amount so drawn to your account indicated below at or prior to 1:00 P.M. (New York City time) on the business day next succeeding the business day on which such drafts and certificates were presented (notwithstanding that such day of presentation may have been the Credit Termination Date);
and
(ii) All Other Drawings: In the case of any other drafts and certificates:
(A) if such drafts and certificates are presented as aforesaid at or prior to 4:00 P.M. (New York City time) on a business day, and provided that such drafts strictly conform to the requirements of this Letter of Credit, we will initiate a wire transfer of the amount so drawn to your account indicated below at or prior to 10:00 A.M. (New York City time) on the business day next succeeding the business day on which such drafts and certificates were presented (notwithstanding that such day of presentation may have been the Credit Termination Date); and
(B) if such drafts and certificates are presented as aforesaid after 4:00 P.M. (New York City time) on a business day, and provided that such drafts and certificates strictly conform to the requirements of this Letter of Credit, we will initiate a wire transfer of the amount so drawn to your account indicated below at or prior to 1:00 P.M. (New York City time) on the business day next succeeding the business day on which such drafts and certificates were presented (notwithstanding that such day of presentation may have been the Credit Termination Date).
Wire transfers of funds paid in respect of any drawing hereunder shall be made to your Account No. 1000-551 at Security N.Y.C. (ABA #0260-05885), reference: Corporate Trust Department, Attention: Stephen Bruce, or to such other account as you may from time to time specify to us in writing. All payments made by us under this Letter of Credit will be made with our own funds and not with any funds of the Account Party or the Issuer.
(4) Reductions. The Interest Component shall be reduced immediately
following our honoring any draft drawn hereunder to pay unpaid interest on
Eligible Bonds or to pay that portion of the purchase price or redemption
price corresponding to unpaid interest on Eligible Bonds, in each case by
an amount equal to the amount of such draft (any such drawing being an
"Interest Drawing"). The Principal Component shall be reduced immediately
following our honoring any draft drawn hereunder: (i) pursuant to Section
308(c)(ii) of the Indenture to pay that portion of purchase price
corresponding to principal of Eligible Bonds that are (A) subject to
mandatory tender for purchase pursuant to Section 301(d)(iii),
301(e)(iv)(B) or 301(f)(iii) of the Indenture or (B) tendered for purchase
by the holders thereof pursuant to Section 301(e)(iii) of the Indenture
(any such drawing in respect of the circumstances referred to in this
clause (i) being a "Tender Drawing"), (ii) pursuant to Section 308(c)(i) of
the Indenture to pay the principal of Eligible Bonds or that portion of the
redemption price of Eligible Bonds corresponding to principal, whether at
stated maturity, upon acceleration or upon redemption, or (iii) pursuant to
Section 308(c)(ii) of the Indenture to pay that portion of the purchase
price corresponding to principal of Eligible Bonds that are subject to
mandatory tender for purchase pursuant to Section 301(e)(iv)(A) of the
Indenture (any such drawing in respect of the circumstances referred to in
the foregoing clause (ii) or in this clause (iii) being a
"Redemption/Mandatory Purchase Drawing"), in each such case by an amount
equal to the amount of such draft. The Premium Component shall be reduced
immediately following our honoring any draft drawn hereunder to pay premium
on Eligible Bonds in connection with a Redemption/Mandatory Purchase
Drawing, by an amount equal to the amount of such draft.
Additionally, upon receipt of a Notice of Reduction in the form of Exhibit 4 to this Letter of Credit purportedly executed by you, we will reduce the Principal Component, Interest Component and Premium Component to the amounts therein stated.
(5) Reinstatement. The Interest Component and the Principal
Component shall, from time to time, be reinstated by us in accordance with,
and only to the extent provided in, the following subparagraphs (i) and
(ii). In no event shall reductions in the Premium Component be reinstated.
(i) Interest Component. Reductions in the Interest Component resulting from Interest Drawings shall be reinstated as follows:
(A) Immediately following each drawing hereunder to pay unpaid interest on Eligible Bonds in the Flexible Mode or to pay that portion of purchase price, but not redemption price, corresponding to unpaid interest on Eligible Bonds in the Flexible Mode, the amount so drawn shall be automatically reinstated to the Interest Component unless, not later than the business day preceding such drawing you shall have received written notice from us that we will not reinstate the Interest Component in the amount of such drawing. On the fifth day following each drawing hereunder to pay accrued and unpaid interest on Eligible Bonds that are not in the Flexible Mode, or to pay that portion of purchase price, but not redemption price, corresponding to accrued and unpaid interest on Eligible Bonds that are not in the Flexible Mode, the amount so drawn shall be automatically reinstated to the Interest Component, unless you shall have theretofore received written notice from us that we will not reinstate the Interest Component in the amount of such drawing. Any notice of non-reinstatement delivered pursuant to this subparagraph (i)(A) shall be in writing and shall be delivered to you by hand delivery or facsimile transmission.
(B) If, subsequent to any such delivery of a notice of non- reinstatement as aforesaid, we shall deliver to you, by hand delivery or facsimile transmission, a Notice of Reinstatement in the form of Exhibit 5 hereto, then, upon such delivery to you, the Interest Component shall be immediately reinstated to the extent specified in such Notice of Reinstatement.
(C) In no event shall the Interest Component be reinstated to an amount in excess of the sum of: 1) 128 days' interest on all Eligible Bonds that are 1991 Taxable Series D Bonds, computed at the rate of 16% per annum on the basis of a year of 360 days for the actual days elapsed, or such lesser rate of interest as shall equal the Maximum Interest Rate (as defined in the Indenture) in effect under the Indenture with respect to such Eligible Bonds and 2) 45 days' interest on all Eligible Bonds that are 1992 Tax-Exempt Series D Bonds, computed at the rate of 12% per annum on the basis of a year of 365 or 366 days (as applicable) for the actual days elapsed, or such lesser rate of interest as shall equal the Maximum Interest Rate in effect under the Indenture with respect to such Eligible Bonds.
(ii) Principal Component. Reductions in the Principal Component resulting from Redemption/Mandatory Purchase Drawings shall in no event be reinstated. Reductions in the Principal Component resulting from Tender Drawings shall be reinstated as follows:
(A) Immediately upon receipt by us of proceeds from the remarketing of Pledged Bonds (as defined in the Indenture), or of written notice from you that you have received such proceeds (or a window receipt guaranteeing same day payment in immediately available funds of such proceeds as contemplated by Section 312(a) of the Indenture), the Principal Component shall be reinstated automatically by the amount of such proceeds.
(B) Immediately upon your receipt from us, by hand delivery or facsimile transmission, of a Notice of Reinstatement in the form of Exhibit 5 hereto, the Principal Component shall be immediately reinstated to the extent specified in such Notice of Reinstatement.
(C) In no event shall the Principal Component be reinstated to an amount in excess of the aggregate principal amount of Eligible Bonds then outstanding under the Indenture.
Any Notice of Reinstatement delivered to you in the form set forth in Exhibit 5 hereto, whether delivered pursuant to subparagraph (i) or subparagraph (ii), above, may be combined, in a single such Notice, with any other Notice of Reinstatement delivered pursuant to the other such subparagraph.
(6) Notices. Communications (other than drawings) with respect to this Letter of Credit shall be in writing and shall be addressed to us at 222 Broadway, 12th Floor, New York, New York 10038, Attention: Utilities Finance Group (or at such other office as we may designate by written notice to you) or by facsimile transmission received by us at: (212) 412- 7575, with a copy to Credit Enhancement Unit (telecopy (212) 412-6969) (or at such other telephone number as we may designate by written notice to you) specifically referring to the number of this Letter of Credit.
(7) Transfer. This Letter of Credit is transferable in its entirety (but not in part) to any transferee who has succeeded you as Paying Agent under the Indenture and may be successively so transferred. Transfer of the available balance under this Letter of Credit to such transferee shall be effected by the presentation to us of this Letter of Credit accompanied by a certificate substantially in form set forth in Exhibit 6.
(8) Governing Law, Etc. Except as otherwise provided herein, this Letter of Credit shall be governed by and construed in accordance with the Uniform Customs and Practices for Documentary Credits (1983 Revision) Publication No. 400 of the International Chamber of Commerce ("UCP") and, to the extent not inconsistent with the UCP, the laws of the State of New York, including the Uniform Commercial Code as in effect in the State of New York. This Letter of Credit sets forth in full our undertaking, and, except as expressly set forth herein, such undertaking shall not in any way be modified, amended, amplified or limited by reference to any document, instrument or agreement referred to herein (including, without limitation, the Bonds, the Indenture and the Reimbursement Agreement), except only the certificates and the drafts referred to herein; and any such reference shall not be deemed to incorporate herein by reference any document, instrument or agreement except for such certificates and such drafts. Whenever and wherever the terms of this Letter of Credit shall refer to the purpose of a draft hereunder, or the provisions of any agreement or document pursuant to which such draft may be presented hereunder, such purpose or provisions shall be conclusively determined by reference to the certificate accompanying such draft; in furtherance of this sentence, whether any drawing is in respect of payment of regularly scheduled interest on the Bonds or of principal of or interest on the Bonds upon scheduled or accelerated maturity or is a Tender Drawing or a Redemption/Mandatory Purchase Drawing shall be conclusively determined by reference to the certificate accompanying such drawing.
Very truly yours,
BARCLAYS BANK PLC,
NEW YORK BRANCH
By /s/Elizabeth Dempsey
Title:Associate Director
By /s/Joseph Carlani
Title: Associate Director
EXHIBIT 1
TO THE LETTER OF CREDIT
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CERTIFICATE FOR TENDER DRAWING
The undersigned, a duly authorized officer of __________________ , (the "Paying Agent"), hereby certifies as follows to Barclays Bank PLC, New York Branch (the "Bank"), with reference to Amended and Restated Irrevocable Letter of Credit No. _________________ (the "Letter of Credit") issued by the Bank in favor of the Paying Agent. Terms defined in the Letter of Credit and used but not defined herein shall have the meanings given them in the Letter of Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for the holders of the Bonds.
(2) The Paying Agent is making a Tender Drawing under the Letter of Credit in the amount of $_______________ pursuant to Section 308(c)(ii) of the Indenture to pay that portion of the purchase price corresponding to principal of Eligible Bonds that are
[subject to mandatory tender for purchase pursuant to Section
[301(d)(iii)] [301(e)(iv)(B)] [301(f)(iii)] of the Indenture.]
[tendered for purchase by the holders thereof pursuant to Section 301(e)(iii) of the Indenture.]
(3) The amount of purchase price corresponding to principal of Eligible Bonds and with respect to the payment of which the Paying Agent, pursuant to the foregoing Sections of the Indenture, is drawing under the Letter of Credit, is as follows, and the amount of the draft accompanying this Certificate does not exceed such amount:
Principal: $__________________
(4) The amount of the draft accompanying this Certificate being drawn in respect of purchase price corresponding to principal of Eligible Bonds, as indicated in paragraph (3), above, does not exceed the Principal Component of the Letter of Credit. The amount of the draft accompanying this Certificate in respect of purchase price corresponding to principal of such Bonds has been computed in accordance with the terms and conditions of such Eligible Bonds and the Indenture.
(5) No proceeds of this drawing will be applied to the payment of purchase price of any Bonds that are not Eligible Bonds, including any Pledged Bonds (as defined in the Indenture), any Company Bonds (as defined in the Indenture) and any Bonds in the Fixed Rate Mode (as defined in the Indenture).
[(6) The Eligible Bonds in respect of which this drawing is being made are Eligible Bonds in the Flexible Mode, and payment of this drawing shall be made in accordance with Paragraph 3(i) of the Letter of Credit.]
[(6) The Eligible Bonds in respect of which this drawing is being made
are not Eligible Bonds in the Flexible Mode, and payment of this drawing
shall be made in accordance with Paragraph 3(ii) of the Letter of Credit].
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this
Certificate as of the ________ day of _______________, 19___.
[NAME OF PAYING AGENT],
as Paying Agent
By ___________________________________
Title:
EXHIBIT 2
TO THE LETTER OF CREDIT
CERTIFICATE FOR REDEMPTION/
MANDATORY PURCHASE DRAWING
The undersigned, a duly authorized officer of __________________, (the "Paying Agent"), hereby certifies as follows to Barclays Bank PLC, New York Branch (the "Bank"), with reference to Amended and Restated Irrevocable Letter of Credit No. _____________________ (the "Letter of Credit") issued by the Bank in favor of the Paying Agent. Terms defined in the Letter of Credit and used but not defined herein shall have the meanings given them in the Letter of Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for the holders of the Bonds.
(2) The Paying Agent is making a Redemption/Mandatory Purchase Drawing under the Letter of Credit in the amount of $______________
[pursuant to Section 308(c)(i) and Section 605 of the Indenture to pay the principal of Eligible Bonds due pursuant to the Indenture upon maturity or as a result of acceleration of such Eligible Bonds in accordance with the Indenture and the terms of such Eligible Bonds.]
[pursuant to Section 308(c)(i) of the Indenture to pay that
portion of the redemption price corresponding to principal of
[and premium on] Eligible Bonds due pursuant to the Indenture
upon redemption of such Eligible Bonds in accordance with the
Indenture and the terms of such Eligible Bonds.]
[pursuant to Section 308(c)(ii) of the Indenture to pay that portion of the purchase price of Eligible Bonds corresponding to principal that are subject to mandatory tender for purchase pursuant to Section 301(e)(iv)(A) of the Indenture.]
(3) The amount of [principal of] [redemption price corresponding to principal of] [and premium on] [purchase price corresponding to principal of] Eligible Bonds which is due and payable and with respect to the payment of which the Paying Agent, pursuant to the foregoing Section[s] of the Indenture, is to draw under the Letter of Credit is as follows, and the amount of the draft accompanying this Certificate does not exceed such amount:
Principal: $__________________
[Premium: $__________________]
(4) The amount of the draft accompanying this Certificate being drawn
in respect of payment of [principal] [redemption price corresponding to
principal] [purchase price corresponding to principal] of Eligible Bonds,
as indicated in paragraph (3), above, does not exceed the Principal
Component of the Letter of Credit. [The amount of the draft accompanying
this Certificate being drawn in respect of that portion of the redemption
price of Eligible Bonds corresponding to premium, as indicated in paragraph
(3), above, does not exceed the Premium Component of the Letter of Credit.]
The amount of the draft accompanying this Certificate in respect of payment
of [principal] [redemption price corresponding to principal] [and premium]
[purchase price corresponding to principal] of such Eligible Bonds has been
computed in accordance with the terms and conditions of such Eligible Bonds
and the Indenture.
(5) No proceeds of this drawing will be applied to the payment of principal, redemption price (including premium, if any) or purchase price of any Bonds that are not Eligible Bonds, including any Pledged Bonds (as defined in the Indenture), any Company Bonds (as defined in the Indenture), and any Bonds in the Fixed Rate Mode (as defined in the Indenture).
(6) Payment of this drawing shall be made in accordance with Paragraph 3(ii) of the Letter of Credit.
[(7) The draft accompanying this Certificate is the final draft to be drawn under the Letter of Credit, and, upon the honoring of such draft, the Letter of Credit will expire in accordance with its terms.]
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this Certificate as of the ________day of _______________, 19___.
[NAME OF PAYING AGENT],
as Paying Agent
By ___________________________________
Title:
EXHIBIT 3
TO THE LETTER OF CREDIT
CERTIFICATE FOR INTEREST DRAWING
The undersigned, a duly authorized officer of __________________, (the "Paying Agent"), hereby certifies as follows to Barclays Bank PLC, New York Branch (the "Bank"), with reference to Amended and Restated Irrevocable Letter of Credit No. ___________ (the "Letter of Credit") issued by the Bank in favor of the Paying Agent. Terms defined in the Letter of Credit and used but not defined herein shall have the meanings given them in the Letter of Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for the holders of the Bonds.
(2) The Paying Agent is making a drawing under the Letter of Credit
in the amount of $_______________ with respect to [the payment of interest]
[the payment of the portion of redemption price corresponding to interest]
[the payment of the portion of purchase price corresponding to interest] on
Eligible Bonds in accordance with the Indenture.
(3) The amount of [interest] [redemption price corresponding to interest] [purchase price corresponding to interest] on Eligible Bonds that is due and owing is as follows, and the amount of the draft accompanying this Certificate does not exceed such amount:
Interest: __________________
(4) The amount of the draft accompanying this Certificate being drawn in respect of payment of [interest] [redemption price corresponding to interest] [purchase price corresponding to interest] on Eligible Bonds, as indicated in paragraph (3), above, does not exceed the Interest Component of the Letter of Credit. The amount of the draft accompanying this Certificate in respect of payment of [interest] [redemption price corresponding to interest] [purchase price corresponding to interest] on Eligible Bonds has been computed in accordance with the terms and conditions of such Eligible Bonds and the Indenture.
(5) Payment of this drawing shall be made in accordance with Paragraph 3(ii) of the Letter of Credit.
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this Certificate as of the ________ day of _______________, 19___.
[NAME OF PAYING AGENT],
as Paying Agent
By ___________________________________
Title:
EXHIBIT 4
TO THE LETTER OF CREDIT
NOTICE OF REDUCTION
The undersigned, a duly authorized officer of _____________________, (the "Paying Agent"), hereby certifies as follows to Barclays Bank PLC, New York Branch (the "Bank"), with reference to Amended and Restated Irrevocable Letter of Credit No. _____________________ (the "Letter of Credit") issued by the Bank in favor of the Paying Agent. Terms defined in the Letter of Credit and used but not defined herein shall have the meanings given them in the Letter of Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for the holders of the Bonds.
(2) As of the date hereof, the aggregate principal amount of Eligible Bonds (including for this purpose all Pledged Bonds and all Company Bonds) outstanding is
Principal: $__________________
(3) You are hereby directed to reduce the [Principal] [Premium]
[and] [Interest] Components of the Letter of Credit as follows:
[The Principal Component of the Letter of Credit is reduced to $__________________.]
[The Premium Component of the Letter of Credit is reduced to $__________________.]
[The Interest Component of the Letter of Credit is reduced to $__________________.]
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this Certificate as of the ________ day of _______________, 19___.
[NAME OF PAYING AGENT],
as Paying Agent
By ___________________________________
Title:
EXHIBIT 5
TO THE LETTER OF CREDIT
NOTICE OF REINSTATEMENT
The undersigned, a duly authorized officer of Barclays Bank PLC, New York Branch (the "Bank"), hereby gives the following notice to _________________, as paying agent (the "Paying Agent"), with reference to Amended and Restated Irrevocable Letter of Credit No. __________________ (the "Letter of Credit") issued by the Bank in favor of the Paying Agent. Terms defined in the Letter of Credit and used but not defined herein have the meanings given them in the Letter of Credit.
The Bank hereby notifies you that:
[1.] [Pursuant to Paragraph 5(i)(B) of the Letter of Credit and Section 2.04(b)(ii) of the Reimbursement Agreement, the Interest Component has been reinstated by $________________.]
[2.] [Pursuant to Paragraph 5(ii)(B) of the Letter of Credit and Section 2.04(c) of the Reimbursement Agreement, the Principal Component has been reinstated by $_________________.]
IN WITNESS WHEREOF, the Bank has executed and delivered this Notice of Reinstatement as of the ________ day of _______________, 19___
BARCLAYS BANK PLC,
NEW YORK BRANCH
By ___________________________________
Title:
EXHIBIT 6
TO THE LETTER OF CREDIT
INSTRUCTIONS TO TRANSFER
__________________, 19___
Re: Amended and Restated Irrevocable Letter of Credit No. __________________
Gentlemen:
The undersigned, as Paying Agent under that certain Series D Loan and Trust Agreement, dated as of May 1, 1991, as supplemented by a First Supplement thereto dated as of December 1, 1992 (as so supplemented, the "Indenture"), by and among the Business Finance Authority (formerly The Industrial Development Authority) of the State of New Hampshire (the "Issuer"), Public Service Company of New Hampshire and the State Street Bank and Trust Company, as Trustee, is named as beneficiary in the Letter of Credit referred to above (the "Letter of Credit"). The Transferee named below has succeeded the undersigned as Paying Agent under such Indenture.
Therefore, for value received, the undersigned hereby irrevocably instructs you to transfer to such Transferee all rights of the undersigned to draw under the Letter of Credit.
Such Transferee shall hereafter have the sole rights as beneficiary under the Letter of Credit; provided, however, that no rights shall be deemed to have been transferred to such Transferee until such transfer complies with the requirements of the Letter of Credit pertaining to transfers.
IN WITNESS WHEREOF, the undersigned has executed and delivered this Certificate as of the ________ day _______________, 19___.
[NAME OF RETIRING PAYING AGENT],
as Paying Agent
By ___________________________________
Title:
The undersigned, [Name of Transferee], hereby accepts the foregoing transfer of rights under the Letter of Credit.
[Name of Transferee]
By ___________________________________ Title:
Address of Principal Corporate Trust Office:
[insert address]
111 Wall Street New York, New York 10005
Exhibit 4.3.10.1
AMENDED AND RESTATED
IRREVOCABLE LETTER OF CREDIT
NO. NY0389-30008830
December 15, 1993
BankAmerica National Trust Company
2 Rector Street
New York, New York 10006
Attention: Corporate Trust Division
Dear Sir or Madam:
We hereby establish, at the request and for the account of Public
Service Company of New Hampshire (the "Account Party"), in your favor, as
paying agent (the "Paying Agent") under that certain Series E Loan and
Trust Agreement, dated as of May 1, 1991, as supplemented by a First
Supplement thereto dated as of December 1, 1993, (as so supplemented, the
"Indenture"), by and among the Business Finance Authority (formerly The
Industrial Development Authority) of the State of New Hampshire (the
"Issuer"), the Account Party and State Street Bank and Trust Company, as
trustee (the "Trustee"), pursuant to which $69,700,000 in outstanding
aggregate principal amount of the Issuer's Pollution Control Revenue Bonds
(Public Service Company of New Hampshire Project - 1991 Taxable Series E)
and $44,800,000 in outstanding aggregate principal amount of the Issuer's
Pollution Control Refunding Revenue Bonds (Public Service Company of New
Hampshire Project - 1993 Tax-Exempt Series E) (such 1991 Taxable Series E
and 1993 Tax-Exempt Series E bonds being hereinafter referred to,
collectively, as the "Bonds"), have been issued, our Amended and Restated
Irrevocable Letter of Credit No. NY0389-30008830, in the amount of
US$119,129,000 (ONE HUNDRED NINETEEN MILLION ONE HUNDRED TWENTY-NINE
THOUSAND AND NO ONE-HUNDREDTHS UNITED STATES DOLLARS), subject to reduction
and reinstatement as provided below. This Amended and Restated Irrevocable
Letter of Credit No. NY0389-30008830 amends, restates and supersedes our
Irrevocable Letter of Credit No. NY0389-30008830 issued to you on May 16,
1991.
(1) Credit Termination Date. This Letter of Credit shall expire on
the earliest to occur of (i) May 16, 1995 (the "Stated Termination Date"),
(ii) the date upon which we honor a draft accompanying a written and
completed certificate signed by you in substantially the form of Exhibit 2
attached hereto, and stating therein that such draft is the final draft to
be drawn under this Letter of Credit and that, upon the honoring of such
draft, this Letter of Credit will expire in accordance with its terms,
(iii) the date upon which we receive a written certificate signed by you
and stating therein that no Bonds entitled to the benefits of this Letter
of Credit (as determined in accordance with the Indenture) ("Eligible
Bonds") are "outstanding" under the Indenture, (iv) the fifth business day
following receipt by you and the Trustee of written notice from us that an
Event of Default (as defined below) has occurred under the Reimbursement
Agreement (as defined below) and of our determination to terminate this
Letter of Credit on such fifth business day and (v) the date upon which we
receive a written certificate signed by you and stating therein that a
substitute or replacement Credit Facility (as defined in the Indenture) has
been provided pursuant to Section 317 of the Indenture (such earliest date
being the "Credit Termination Date").
As used herein, the term "business day" shall mean any day of the year
(i) that is not a Sunday or legal holiday or a day on which banking
institutions are authorized pursuant to law to close, (ii) that is not a
day on which the corporate trust office of the First Mortgage Bond Trustee
(as defined in the Indenture) is not open for business, (iii) that is a day
on which banks are not required or authorized to close in New York City and
(iv) that is a day on which banking institutions in all of the cities in
which the principal offices of the Trustee, the Paying Agent and the
Remarketing Agent (as defined in the Indenture) are located are not
required or authorized to remain closed and on which the New York Stock
Exchange is not closed.
As used herein "Reimbursement Agreement" shall mean the Series E Letter of Credit and Reimbursement Agreement, dated as of May 1, 1991, between the Account Party, us and certain Participating Banks referred to therein, and the term "Event of Default" shall mean an "Event of Default" as that term is defined in the Reimbursement Agreement.
(2) Principal, Interest and Premium Components. The aggregate amount which may be drawn under this Letter of Credit, subject to reductions in amount and reinstatement as provided below, is US$119,129,000.00 (ONE HUNDRED NINETEEN MILLION ONE HUNDRED TWENTY-NINE THOUSAND AND NO ONE- HUNDREDTHS UNITED STATES DOLLARS), of which the aggregate amounts set forth below may be drawn as indicated.
(i) An aggregate amount not exceeding US$114,500,000.00 (ONE HUNDRED FOURTEEN MILLION FIVE HUNDRED THOUSAND AND NO ONE-HUNDREDTHS UNITED STATES DOLLARS), as such amount may be reduced and reinstated as provided below, (the "Principal Component") may be drawn in respect of payment of principal (whether upon scheduled or accelerated maturity, or upon redemption) of Eligible Bonds or the portion of the purchase price of Eligible Bonds corresponding to principal.
(ii) An aggregate amount not exceeding US$4,629,000.00 (FOUR MILLION SIX HUNDRED TWENTY-NINE THOUSAND AND NO ONE-HUNDREDTHS UNITED STATES DOLLARS), as such amount may be reduced and reinstated as provided below, (the "Interest Component") may be drawn in respect of payment of:
(A) accrued and unpaid interest on Eligible Bonds not in the Flexible Mode (as defined in the Indenture) or that portion of the redemption price or purchase price of such Eligible Bonds corresponding to accrued and unpaid interest, but not more than an amount equal to accrued and unpaid interest on such Eligible Bonds for up to a maximum of 1) 128 days immediately preceding the date of such drawing (in the case of Eligible Bonds that are 1991 Taxable Series E Bonds) and 2) 45 days immediately preceding the date of such drawing (in the case of Eligible Bonds that are 1993 Tax-Exempt Series E Bonds); and
(B) unpaid interest (whether accrued or to accrue) on Eligible Bonds in the Flexible Mode or that portion of the redemption price or purchase price of such Eligible Bonds corresponding to such interest, but not more than an amount equal to such interest on such Eligible Bonds for up to a maximum of 1) 128 days immediately preceding the next Purchase Date (as defined in the Indenture) for each such Eligible Bond (in the case of Eligible Bonds that are 1991 Taxable Series E Bonds) (or, if interest on any such Eligible Bond was not paid on the most recent Purchase Date for such Bond, for up to a maximum of 128 days immediately preceding the date of such drawing) and 2) 45 days immediately preceding such Purchase Date (in the case of Eligible Bonds that are 1993 Tax-Exempt Series E Bonds) (or, if interest on any such Eligible Bond was not paid on the most recent Purchase Date for such Bond, for up to a maximum of 45 days immediately preceding the date of such drawing);
calculated, in each case referred to in the foregoing clause (A) or clause (B) at a maximum rate of:
(X) sixteen percent (16%) per annum on the basis of a year of 360 days for the actual days elapsed, or such lesser rate of interest as shall equal the Maximum Interest Rate (as defined in the Indenture) in effect under the Indenture with respect to such Eligible Bonds that are 1991 Taxable Series E Bonds (whether or not in the Flexible Mode); and
(Y) twelve percent (12%) per annum on the basis of a year of 365 or 366 days (as applicable) for the actual days elapsed, or such lesser rate of interest as shall equal the Maximum Interest Rate in effect under the Indenture with respect to such Eligible Bonds that are 1993 Tax-Exempt Series E Bonds (whether or not in the Flexible Mode).
(iii) An aggregate amount not exceeding US$0.00 (ZERO UNITED STATES DOLLARS) may be drawn in respect of premium on Eligible Bonds (the "Premium Component"). If, subsequent to the date hereof, the Premium Component shall be increased by us at the request of the Account Party, the Premium Component shall be subject to reduction as provided below, and amounts drawn in respect thereof shall not be subject to reinstatement.
(3) Drawings. Funds under this Letter of Credit are available to you against (i) your draft, stating on its face: "Drawn under Amended and Restated Irrevocable Letter of Credit No. NY0389-30008830, dated December 15, 1993", and (ii) the appropriate certificate specified below, purportedly executed by you and appropriately completed.
Exhibit Setting Forth
Type of Drawing Form of Certificate Required
Tender Drawing Exhibit 1
(as hereinafter defined)
Redemption/Mandatory Exhibit 2
Purchase Drawing
(as hereinafter defined)
Interest Drawing Exhibit 3
(as hereinafter
defined)
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Drafts and certificates hereunder shall be dated the date of presentation and shall be presented at our office located at 111 Wall Street, 16th Floor, New York, New York, Attention: Letter of Credit Department (or at such other office as we may designate by written notice to you). Presentation of such drafts and certificates may be made (a) by physical presentation of such drafts and certificates or (b) by facsimile transmission of such drafts and certificates received by us at (212) 344- 3378 or (212) 269-9657 (or at such other number as we may designate by written notice to you) with prior telephone notice to us at (212) 657-9554, Attention: Joseph Jaklitsch, Trade Services (or at such other number as we may designate by written notice to you) that such presentation is to be made by facsimile transmission and with the original executed drafts and certificates to be received by us not later than our close of business on the next business day, it being understood that payments hereunder shall be made upon receipt by us of such facsimile transmission; provided, however, that presentations of drafts and certificates relating to Tender Drawings in respect of Eligible Bonds in the Flexible Mode shall in all instances be made in accordance with the foregoing clause (b). Drafts drawn under and in strict compliance with the terms of this Letter of Credit will be duly honored by us upon presentation thereof in accordance with this Paragraph 3 if presented on or prior to 4:00 P.M. (New York City time) on the Credit Termination Date as follows:
(i) Tender Drawings; Flexible Mode: In the case of drafts and certificates relating to Tender Drawings in respect of Eligible Bonds in the Flexible Mode presented in accordance with the foregoing clause (b):
(A) if such drafts and certificates are presented as aforesaid at or prior to 1:30 P.M. (New York City time) on a business day, and provided that such drafts and certificates strictly conform to the requirements of this Letter of Credit, we will initiate a wire transfer of the amount so drawn to your account indicated below at or prior to 3:30 P.M. (New York City time) on the same business day;
(B) if such drafts and certificates are presented as aforesaid after 1:30 P.M. but at or prior to 4:00 P.M. (New York City time) on a business day, and provided that such drafts and certificates strictly conform to the requirements of this Letter of Credit, we will initiate a wire transfer of the amount so drawn to your account indicated below at or prior to 10:00 A.M. on the business day next succeeding the business day on which such drafts and certificates were presented (notwithstanding that such day of presentation may have been the Credit Termination Date); and
(C) if such drafts and certificates are presented as aforesaid after 4:00 P.M. (New York City time) on a business day, and provided that such drafts and certificates strictly conform to the requirements of this Letter of Credit, we will initiate a wire transfer of the amount so drawn to your account indicated below at or prior to 1:00 P.M. (New York City time) on the business day next succeeding the business day on which such drafts and certificates were presented (notwithstanding that such day of presentation may have been the Credit Termination Date);
and
(ii) All Other Drawings: In the case of any other drafts and certificates:
(A) if such drafts and certificates are presented as aforesaid at or prior to 4:00 P.M. (New York City time) on a business day, and provided that such drafts strictly conform to the requirements of this Letter of Credit, we will initiate a wire transfer of the amount so drawn to your account indicated below at or prior to 10:00 A.M. (New York City time) on the business day next succeeding the business day on which such drafts and certificates were presented (notwithstanding that such day of presentation may have been the Credit Termination Date); and
(B) if such drafts and certificates are presented as aforesaid after 4:00 P.M. (New York City time) on a business day, and provided that such drafts and certificates strictly conform to the requirements of this Letter of Credit, we will initiate a wire transfer of the amount so drawn to your account indicated below at or prior to 1:00 P.M. (New York City time) on the business day next succeeding the business day on which such drafts and certificates were presented (notwithstanding that such day of presentation may have been the Credit Termination Date).
Wire transfers of funds paid in respect of any drawing hereunder shall be
made to your Account No. 1000-551 at BK AMER (ABA #0260-05885), reference:
Corporate Trust Department, Attention: Stephen Bruce, or to such other
account as you may from time to time specify to us in writing. All
payments made by us under this Letter of Credit will be made with our own
funds and not with any funds of the Account Party or the Issuer.
(4) Reductions. The Interest Component shall be reduced immediately
following our honoring any draft drawn hereunder to pay unpaid interest on
Eligible Bonds or to pay that portion of the purchase price or redemption
price corresponding to unpaid interest on Eligible Bonds, in each case by
an amount equal to the amount of such draft (any such drawing being an
"Interest Drawing"). The Principal Component shall be reduced immediately
following our honoring any draft drawn hereunder: (i) pursuant to Section
308(c)(ii) of the Indenture to pay that portion of purchase price
corresponding to principal of Eligible Bonds that are (A) subject to
mandatory tender for purchase pursuant to Section 301(d)(iii),
301(e)(iv)(B) or 301(f)(iii) of the Indenture or (B) tendered for purchase
by the holders thereof pursuant to Section 301(e)(iii) of the Indenture
(any such drawing in respect of the circumstances referred to in this
clause (i) being a "Tender Drawing"), (ii) pursuant to Section 308(c)(i) of
the Indenture to pay the principal of Eligible Bonds or that portion of the
redemption price of Eligible Bonds corresponding to principal, whether at
stated maturity, upon acceleration or upon redemption, or (iii) pursuant to
Section 308(c)(ii) of the Indenture to pay that portion of the purchase
price corresponding to principal of Eligible Bonds that are subject to
mandatory tender for purchase pursuant to Section 301(e)(iv)(A) of the
Indenture (any such drawing in respect of the circumstances referred to in
the foregoing clause (ii) or in this clause (iii) being a
"Redemption/Mandatory Purchase Drawing"), in each such case by an amount
equal to the amount of such draft. The Premium Component shall be reduced
immediately following our honoring any draft drawn hereunder to pay premium
on Eligible Bonds in connection with a Redemption/Mandatory Purchase
Drawing, by an amount equal to the amount of such draft.
Additionally, upon receipt of a Notice of Reduction in the form of Exhibit 4 to this Letter of Credit purportedly executed by you, we will reduce the Principal Component, Interest Component and Premium Component to the amounts therein stated.
(5) Reinstatement. The Interest Component and the Principal
Component shall, from time to time, be reinstated by us in accordance with,
and only to the extent provided in, the following subparagraphs (i) and
(ii). In no event shall reductions in the Premium Component be reinstated.
(i) Interest Component. Reductions in the Interest Component resulting from Interest Drawings shall be reinstated as follows:
(A) Immediately following each drawing hereunder to pay unpaid interest on Eligible Bonds in the Flexible Mode or to pay that portion of purchase price, but not redemption price, corresponding to unpaid interest on Eligible Bonds in the Flexible Mode, the amount so drawn shall be automatically reinstated to the Interest Component unless, not later than the business day preceding such drawing you shall have received written notice from us that we will not reinstate the Interest Component in the amount of such drawing. On the fifth day following each drawing hereunder to pay accrued and unpaid interest on Eligible Bonds that are not in the Flexible Mode, or to pay that portion of purchase price, but not redemption price, corresponding to accrued and unpaid interest on Eligible Bonds that are not in the Flexible Mode, the amount so drawn shall be automatically reinstated to the Interest Component, unless you shall have theretofore received written notice from us that we will not reinstate the Interest Component in the amount of such drawing. Any notice of non-reinstatement delivered pursuant to this subparagraph (i)(A) shall be in writing and shall be delivered to you by hand delivery or facsimile transmission.
(B) If, subsequent to any such delivery of a notice of non- reinstatement as aforesaid, we shall deliver to you, by hand delivery or facsimile transmission, a Notice of Reinstatement in the form of Exhibit 5 hereto, then, upon such delivery to you, the Interest Component shall be immediately reinstated to the extent specified in such Notice of Reinstatement.
(C) In no event shall the Interest Component be reinstated to an amount in excess of the sum of: 1) 128 days' interest on all Eligible Bonds that are 1991 Taxable Series E Bonds, computed at the rate of 16% per annum on the basis of a year of 360 days for the actual days elapsed, or such lesser rate of interest as shall equal the Maximum Interest Rate (as defined in the Indenture) in effect under the Indenture with respect to such Eligible Bonds and 2) 45 days' interest on all Eligible Bonds that are 1993 Tax-Exempt Series E Bonds, computed at the rate of 12% per annum on the basis of a year of 365 or 366 days (as applicable) for the actual days elapsed, or such lesser rate of interest as shall equal the Maximum Interest Rate in effect under the Indenture with respect to such Eligible Bonds.
(ii) Principal Component. Reductions in the Principal Component resulting from Redemption/Mandatory Purchase Drawings shall in no event be reinstated. Reductions in the Principal Component resulting from Tender Drawings shall be reinstated as follows:
(A) Immediately upon receipt by us of proceeds from the remarketing of Pledged Bonds (as defined in the Indenture), or of written notice from you that you have received such proceeds (or a window receipt guaranteeing same day payment in immediately available funds of such proceeds as contemplated by Section 312(a) of the Indenture), the Principal Component shall be reinstated automatically by the amount of such proceeds.
(B) Immediately upon your receipt from us, by hand delivery or facsimile transmission, of a Notice of Reinstatement in the form of Exhibit 5 hereto, the Principal Component shall be immediately reinstated to the extent specified in such Notice of Reinstatement.
(C) In no event shall the Principal Component be reinstated to an amount in excess of the aggregate principal amount of Eligible Bonds then outstanding under the Indenture.
Any Notice of Reinstatement delivered to you in the form set forth in Exhibit 5 hereto, whether delivered pursuant to subparagraph (i) or subparagraph (ii), above, may be combined, in a single such Notice, with any other Notice of Reinstatement delivered pursuant to the other such subparagraph.
(6) Notices. Communications (other than drawings) with respect to this Letter of Credit shall be in writing and shall be addressed to us at 111 Wall Street, New York, New York 10005, Attention: Letter of Credit Department (or at such other office as we may designate by written notice to you) or by facsimile transmission received by us at one of the following telephone numbers: (212) 344-3378 or (212) 269-9657 (or at such other telephone number as we may designate by written notice to you) specifically referring to the number of this Letter of Credit.
(7) Transfer. This Letter of Credit is transferable in its entirety (but not in part) to any transferee who has succeeded you as Paying Agent under the Indenture and may be successively so transferred. Transfer of the available balance under this Letter of Credit to such transferee shall be effected by the presentation to us of this Letter of Credit accompanied by a certificate substantially in form set forth in Exhibit 6.
(8) Governing Law, Etc. Except as otherwise provided herein, this Letter of Credit shall be governed by and construed in accordance with the Uniform Customs and Practices for Documentary Credits (1983 Revision) Publication No. 400 of the International Chamber of Commerce ("UCP") and, to the extent not inconsistent with the UCP, the laws of the State of New York, including the Uniform Commercial Code as in effect in the State of New York. This Letter of Credit sets forth in full our undertaking, and, except as expressly set forth herein, such undertaking shall not in any way be modified, amended, amplified or limited by reference to any document, instrument or agreement referred to herein (including, without limitation, the Bonds, the Indenture and the Reimbursement Agreement), except only the certificates and the drafts referred to herein; and any such reference shall not be deemed to incorporate herein by reference any document, instrument or agreement except for such certificates and such drafts. Whenever and wherever the terms of this Letter of Credit shall refer to the purpose of a draft hereunder, or the provisions of any agreement or document pursuant to which such draft may be presented hereunder, such purpose or provisions shall be conclusively determined by reference to the certificate accompanying such draft; in furtherance of this sentence, whether any drawing is in respect of payment of regularly scheduled interest on the Bonds or of principal of or interest on the Bonds upon scheduled or accelerated maturity or is a Tender Drawing or a Redemption/Mandatory Purchase Drawing shall be conclusively determined by reference to the certificate accompanying such drawing.
Very truly yours,
CITIBANK, N.A.
By /s/Paul T. Addison
Title:Attorney in Fact
EXHIBIT 1
TO THE LETTER OF CREDIT
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CERTIFICATE FOR TENDER DRAWING
The undersigned, a duly authorized officer of __________________, (the "Paying Agent"), hereby certifies as follows to Citibank, N.A. (the "Bank"), with reference to Amended and Restated Irrevocable Letter of Credit No. _________________ (the "Letter of Credit") issued by the Bank in favor of the Paying Agent. Terms defined in the Letter of Credit and used but not defined herein shall have the meanings given them in the Letter of Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for the holders of the Bonds.
(2) The Paying Agent is making a Tender Drawing under the Letter of Credit in the amount of $_______________ pursuant to Section 308(c)(ii) of the Indenture to pay that portion of the purchase price corresponding to principal of Eligible Bonds that are
[subject to mandatory tender for purchase pursuant to Section
[301(d)(iii)] [301(e)(iv)(B)] [301(f)(iii)] of the Indenture.]
[tendered for purchase by the holders thereof pursuant to Section 301(e)(iii) of the Indenture.]
(3) The amount of purchase price corresponding to principal of Eligible Bonds and with respect to the payment of which the Paying Agent, pursuant to the foregoing Sections of the Indenture, is drawing under the Letter of Credit, is as follows, and the amount of the draft accompanying this Certificate does not exceed such amount:
Principal: $__________________
(4) The amount of the draft accompanying this Certificate being drawn in respect of purchase price corresponding to principal of Eligible Bonds, as indicated in paragraph (3), above, does not exceed the Principal Component of the Letter of Credit. The amount of the draft accompanying this Certificate in respect of purchase price corresponding to principal of such Bonds has been computed in accordance with the terms and conditions of such Eligible Bonds and the Indenture.
(5) No proceeds of this drawing will be applied to the payment of purchase price of any Bonds that are not Eligible Bonds, including any Pledged Bonds (as defined in the Indenture), any Company Bonds (as defined in the Indenture) and any Bonds in the Fixed Rate Mode (as defined in the Indenture).
[(6) The Eligible Bonds in respect of which this drawing is being made are Eligible Bonds in the Flexible Mode, and payment of this drawing shall be made in accordance with Paragraph 3(i) of the Letter of Credit.]
[(6) The Eligible Bonds in respect of which this drawing is being made are not Eligible Bonds in the Flexible Mode, and payment of this drawing shall be made in accordance with Paragraph 3(ii) of the Letter of Credit].
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this Certificate as of the ________ day of _______________, 19___.
[NAME OF PAYING AGENT],
as Paying Agent
By ___________________________________
Title:
EXHIBIT 2
TO THE LETTER OF CREDIT
CERTIFICATE FOR REDEMPTION/
MANDATORY PURCHASE DRAWING
The undersigned, a duly authorized officer of __________________, (the "Paying Agent"), hereby certifies as follows to Citibank, N.A. (the "Bank"), with reference to Amended and Restated Irrevocable Letter of Credit No. _____________________ (the "Letter of Credit") issued by the Bank in favor of the Paying Agent. Terms defined in the Letter of Credit and used but not defined herein shall have the meanings given them in the Letter of Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for the holders of the Bonds.
(2) The Paying Agent is making a Redemption/Mandatory Purchase Drawing under the Letter of Credit in the amount of $______________
[pursuant to Section 308(c)(i) and Section 605 of the Indenture to pay the principal of Eligible Bonds due pursuant to the Indenture upon maturity or as a result of acceleration of such Eligible Bonds in accordance with the Indenture and the terms of such Eligible Bonds.]
[pursuant to Section 308(c)(i) of the Indenture to pay that
portion of the redemption price corresponding to principal of
[and premium on] Eligible Bonds due pursuant to the Indenture
upon redemption of such Eligible Bonds in accordance with the
Indenture and the terms of such Eligible Bonds.]
[pursuant to Section 308(c)(ii) of the Indenture to pay that portion of the purchase price of Eligible Bonds corresponding to principal that are subject to mandatory tender for purchase pursuant to Section 301(e)(iv)(A) of the Indenture.]
(3) The amount of [principal of] [redemption price corresponding to principal of] [and premium on] [purchase price corresponding to principal of] Eligible Bonds which is due and payable and with respect to the payment of which the Paying Agent, pursuant to the foregoing Section[s] of the Indenture, is to draw under the Letter of Credit is as follows, and the amount of the draft accompanying this Certificate does not exceed such amount:
Principal: $__________________
[Premium: $__________________]
(4) The amount of the draft accompanying this Certificate being drawn
in respect of payment of [principal] [redemption price corresponding to
principal] [purchase price corresponding to principal] of Eligible Bonds,
as indicated in paragraph (3), above, does not exceed the Principal
Component of the Letter of Credit. [The amount of the draft accompanying
this Certificate being drawn in respect of that portion of the redemption
price of Eligible Bonds corresponding to premium, as indicated in paragraph
(3), above, does not exceed the Premium Component of the Letter of Credit.]
The amount of the draft accompanying this Certificate in respect of payment
of [principal] [redemption price corresponding to principal] [and premium]
[purchase price corresponding to principal] of such Eligible Bonds has been
computed in accordance with the terms and conditions of such Eligible Bonds
and the Indenture.
(5) No proceeds of this drawing will be applied to the payment of principal, redemption price (including premium, if any) or purchase price of any Bonds that are not Eligible Bonds, including any Pledged Bonds (as defined in the Indenture), any Company Bonds (as defined in the Indenture), and any Bonds in the Fixed Rate Mode (as defined in the Indenture).
(6) Payment of this drawing shall be made in accordance with Paragraph 3(ii) of the Letter of Credit.
[(7) The draft accompanying this Certificate is the final draft to be drawn under the Letter of Credit, and, upon the honoring of such draft, the Letter of Credit will expire in accordance with its terms.]
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this Certificate as of the ________ day of _______________, 19___.
[NAME OF PAYING AGENT],
as Paying Agent
By ___________________________________
Title:
EXHIBIT 3
TO THE LETTER OF CREDIT
CERTIFICATE FOR INTEREST DRAWING
The undersigned, a duly authorized officer of __________________, (the "Paying Agent"), hereby certifies as follows to Citibank, N.A. (the "Bank"), with reference to Amended and Restated Irrevocable Letter of Credit No. ___________ (the "Letter of Credit") issued by the Bank in favor of the Paying Agent. Terms defined in the Letter of Credit and used but not defined herein shall have the meanings given them in the Letter of Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for the holders of the Bonds.
(2) The Paying Agent is making a drawing under the Letter of Credit
in the amount of $_______________ with respect to [the payment of interest]
[the payment of the portion of redemption price corresponding to interest]
[the payment of the portion of purchase price corresponding to interest] on
Eligible Bonds in accordance with the Indenture.
(3) The amount of [interest] [redemption price corresponding to interest] [purchase price corresponding to interest] on Eligible Bonds that is due and owing is as follows, and the amount of the draft accompanying this Certificate does not exceed such amount:
Interest: __________________
(4) The amount of the draft accompanying this Certificate being drawn in respect of payment of [interest] [redemption price corresponding to interest] [purchase price corresponding to interest] on Eligible Bonds, as indicated in paragraph (3), above, does not exceed the Interest Component of the Letter of Credit. The amount of the draft accompanying this Certificate in respect of payment of [interest] [redemption price corresponding to interest] [purchase price corresponding to interest] on Eligible Bonds has been computed in accordance with the terms and conditions of such Eligible Bonds and the Indenture.
(5) Payment of this drawing shall be made in accordance with Paragraph 3(ii) of the Letter of Credit.
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this Certificate as of the ________ day of _______________, 19___.
[NAME OF PAYING AGENT],
as Paying Agent
By ___________________________________
Title:
EXHIBIT 4
TO THE LETTER OF CREDIT
NOTICE OF REDUCTION
The undersigned, a duly authorized officer of _____________________, (the "Paying Agent"), hereby certifies as follows to Citibank, N.A. (the "Bank"), with reference to Amended and Restated Irrevocable Letter of Credit No. _____________________ (the "Letter of Credit") issued by the Bank in favor of the Paying Agent. Terms defined in the Letter of Credit and used but not defined herein shall have the meanings given them in the Letter of Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for the holders of the Bonds.
(2) As of the date hereof, the aggregate principal amount of Eligible Bonds (including for this purpose all Pledged Bonds and all Company Bonds) outstanding is
Principal: $__________________
(3) You are hereby directed to reduce the [Principal] [Premium]
[and] [Interest] Components of the Letter of Credit as follows:
[The Principal Component of the Letter of Credit is reduced to $__________________.]
[The Premium Component of the Letter of Credit is reduced to $__________________.]
[The Interest Component of the Letter of Credit is reduced to $__________________.]
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this Certificate as of the ________ day of _______________, 19___.
[NAME OF PAYING AGENT],
as Paying Agent
By ___________________________________
Title:
EXHIBIT 5
TO THE LETTER OF CREDIT
NOTICE OF REINSTATEMENT
The undersigned, a duly authorized officer of Citibank, N.A. (the "Bank"), hereby gives the following notice to _________________, as paying agent (the "Paying Agent"), with reference to Amended and Restated Irrevocable Letter of Credit No. __________________ (the "Letter of Credit") issued by the Bank in favor of the Paying Agent. Terms defined in the Letter of Credit and used but not defined herein have the meanings given them in the Letter of Credit.
The Bank hereby notifies you that:
[1.] [Pursuant to Paragraph 5(i)(B) of the Letter of Credit and Section 2.04(b)(ii) of the Reimbursement Agreement, the Interest Component has been reinstated by $________________.]
[2.] [Pursuant to Paragraph 5(ii)(B) of the Letter of Credit and Section 2.04(c) of the Reimbursement Agreement, the Principal Component has been reinstated by $_________________.]
IN WITNESS WHEREOF, the Bank has executed and delivered this Notice of Reinstatement as of the ________ day of _______________, 19___
CITIBANK, N.A.
By ___________________________________
Title:
EXHIBIT 6
TO THE LETTER OF CREDIT
INSTRUCTIONS TO TRANSFER
__________________, 19___
Re: Amended and Restated Irrevocable Letter of Credit No. __________________
Gentlemen:
The undersigned, as Paying Agent under that certain Series E Loan and Trust Agreement, dated as of May 1, 1991, as supplemented by a First Supplement thereto dated as of December 1, 1993 (as so supplemented, the "Indenture"), by and among the Business Finance Authority (formerly The Industrial Development Authority) of the State of New Hampshire (the "Issuer"), Public Service Company of New Hampshire and the State Street Bank and Trust Company, as Trustee, is named as beneficiary in the Letter of Credit referred to above (the "Letter of Credit"). The Transferee named below has succeeded the undersigned as Paying Agent under such Indenture.
Therefore, for value received, the undersigned hereby irrevocably instructs you to transfer to such Transferee all rights of the undersigned to draw under the Letter of Credit.
Such Transferee shall hereafter have the sole rights as beneficiary under the Letter of Credit; provided, however, that no rights shall be deemed to have been transferred to such Transferee until such transfer complies with the requirements of the Letter of Credit pertaining to transfers.
IN WITNESS WHEREOF, the undersigned has executed and delivered this Certificate as of the ________ day _______________, 19___.
[NAME OF RETIRING PAYING AGENT],
as Paying Agent
By ___________________________________
Title:
The undersigned, [Name of Transferee], hereby accepts the foregoing transfer of rights under the Letter of Credit.
[Name of Transferee]
By ___________________________________ Title:
Address of Principal Corporate Trust Office:
[insert address]
Exhibit 4.4.1
WESTERN MASSACHUSETTS ELECTRIC COMPANY
to
OLD COLONY TRUST COMPANY,
Trustee
FIRST MORTGAGE INDENTURE AND DEED OF TRUST
Dated as of August 1, 1954
$11,000,000
initial issue
First Mortgage Bonds, Series A, 2.95% due October 1, 1973.
WESTERN MASSACHUSETTS ELECTRIC COMPANY
INDENTURE
Dated as of August 1, 1954
TABLE OF CONTENTS
(Not part of the Indenture)
Page
Caption ............................................................ 1
Recitals ........................................................... 1
Form of Series A Fully Registered Bond ....................... 2
Form of Trustee's certificate of authentication .......... 6
Form of Transfer......................................... 7
Form of Series A Coupon Bond ................................. 7
Form of coupon .......................................... 12
Form of Trustee's certificate of authentication ......... 12
Form of registration .................................... 12
Form of Stamp Tax Legend ..................................... 13
Granting Clauses ................................................... 13
Recital of consideration ..................................... 13
Grant ........................................................ 14
Reservations and exceptions .................................. 16
Habendum ..................................................... 17
Declaration of trust ......................................... 17
Condition .................................................... 18
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ARTICLE I.
Definitions
1.01 Explanatory preamble ......................................... 19
1.02 (1) "Indenture" ............................................. 19
(2) "herein", "hereof", etc.................................. 19
(3) "Supplemental Indenture", etc............................ 19
(4) "Company" ............................................... 20
(5) "Obligor" ............................................... 20
(6) "person" ................................................ 20
(7) "Corporation" ........................................... 20
(8) "Affiliate", "Control", etc. ............................ 20
(9) "Trustee" ............................................... 21
(10) "Responsible Officer", etc. ............................. 21
(11) "Bond", "Bondholder", etc. .............................. 21
(12) "Cancellation", "Cancelled" etc. ........................ 21
(13) "Outstanding ............................................ 22
(14) "excluding Company-owned Bonds" ......................... 22
(15) "Bondholders' Notice", "Bondholders' Request" ........... 23
(16) "Lien of this Indenture", "Lien hereof" ................. 23
(17) "Excepted Property" ..................................... 24
(18) "Permitted Encumbrances" ................................ 24
(19) "Directors' Resolution" ................................. 25
(20) "Officers' Certificate" ................................. 25
(21) "Engineer" .............................................. 25
(22) "Accountant" ............................................ 26
(23) "Engineer's Certificate", "Accountant's Certificate" .... 26
(24) "Independent" ........................................... 26
(25) "Independent Engineer's Certificate", "Independent
Accountant's Certificate" ........................... 26
(26) "Opinion of Counsel" .................................... 27
(27) "Evidence of Approval by Trustee" ....................... 27
(28) "Fundable Property" ..................................... 27
(29) "Cost" .................................................. 29
(30) "Fair Value" ............................................ 30
(31) "Property Additions" .................................... 31
(32) "Property Retirement" ................................... 31
(33) "Net Property Additions" ................................ 32
(34) "Made the Basis of Action or Credit hereunder" .......... 32
(35) "Earnings Certificate" .................................. 32
(36) "Commission Orders" ..................................... 34
(37) "Published Notice" ...................................... 35
1.03 Form of Corticate of Available Net Property Additions ........ 35
ARTICLE II.
Form, Execution, Registration, and Exchange of Bonds
2.01 General provisions ........................................... 38
2.02 Characteristics of Bonds ..................................... 39
2.03 Execution of Bonds and authentication of coupons ............. 40
2.04 Certification and delivery of Bonds .......................... 40
2.05 Temporary Bonds .............................................. 41
2.06 Registration, transfer, and exchange ......................... 42
2.07 Books for registration, transfer and exchange ................ 42
2.08 Registration of Coupon Bonds as to principal and transfer
of Fully Registered Bonds ............................... 42
2.09 Exchanges of Series A Bonds .................................. 43
2.10 Exchanges of Bonds of other series pursuant to Supplemental
Indenture................................................ 44
(a) Exchanges for Bonds of same or different series ......... 44
(b) Coupon Bonds exchanged for Fully Registered Bonds ....... 44
(c) Fully Registered Bonds exchanged for Coupon Bonds ....... 44
2.11 Charges on transfers or exchanges ............................ 45
2.12 Negotiability ................................................. 45
2.13 Mutilated, lost, stolen, or destroyed Bonds or coupons ....... 46
2.14 Status of Bonds held or acquired by Company .................. 47
ARTICLE III.
Issue of Bonds
3.01 Aggregate principal amount issuable and Outstanding
at any given time ....................................... 48
3.02 Issue of Series A Bonds ...................................... 48
3.03 Issue of Series B Bonds ...................................... 48
(a) Directors' resolution ................................... 49
(b) Stockholders' resolution if necessary .................... 49
(c) Supplemental Indenture if new series .................... 49
(d) Earnings Certificate .................................... 49
(e) Officers' Certificate ................................... 49
(f) Commission Orders ....................................... 50
(g) Opinion of Counsel ...................................... 50
3.04 Issue of Bond against retirement of Bonds .................... 50
(a) Directors' resolution .................................... 51
(b) Stockholders' resolution if necessary .................... 52
(c) Supplemental Indenture ................................... 52
(d) Officers' Certificate .................................... 52
(e) Commission Orders ......................................... 53
(f) Bonds to be surrendered .................................. 54
(g) Opinion of Counsel ....................................... 54
(h) Earnings Certificate if required ......................... 54
3.05 Issue of Bonds against cash .................................. 55
(a) Directors' resolution ................................... 55
(b) Stockholders' resolution if necessary ................... 55
(c) Supplemental Indenture .................................. 56
(d) Officers' Certificate ................................... 56
(e) Deposit of cash ......................................... 56
(f) Commission Orders ....................................... 56
(g) Earnings Certificate .................................... 56
(h) Opinion of Counsel ...................................... 56
3.06 Withdrawal of deposited cash ................................. 57
3.07 Application of deposited cash not withdrawn .................. 57
3.08 Issue of Bonds against 60% of Net Property Additions ......... 58
(a) Directors' resolutions ................................... 58
(b) Stockholders' resolution if necessary ................... 58
(c) Supplemental Indenture .................................. 59
(d) Officers' Certificate ................................... 59
(e) Certificate of available Net Property Additions ......... 59
(f) Accountant's Certificate ................................ 59
(g) Engineer's Certificate .................................. 60
(h) Commission Orders ....................................... 60
(i) Earnings Certificate .................................... 60
(j) Opinion of Counsel ...................................... 60
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and Independent Engineers Certificate as to Fair Value to Company
of property used or operated by others, when required ... 61
3.09 Distinguishing features of various series .................... 62
ARTICLE IV.
Particular Covenants of the Company
4.01 Prompt payment of principal and interest; deposit in trust ... 62
4.02 No extension of time for payment of coupon or interest ....... 63
4.03 (a) Filing of vacancy in office of Trustee .................. 63
(b) Transfer offices to be maintained ....................... 64
(c) Paying agents ........................................... 64
(d) If Company acts as paying agent ......................... 65
(e) Payments to Trustee held in trust ....................... 65
(f) Payments to Trustee subject to 15.02 .................... 65
(g) Trustee appointed Registrar ............................. 65
4.04 Prompt payment of taxes and other charges and discharge of liens 65
4.05 Insurance of Mortgaged Property .............................. 66
4.06 Maintenance of Mortgaged Property ............................ 68
4.07 Conduct of Company's business ................................ 68
4.08 Corporate existence and authority to create and issue Bonds .. 69
4.09 Seisin, good right to convey, general warranty, recording,
after-required property ................................. 69
4.10 Against encumbrances and liens ............................... 71
4.11 Books and records ............................................ 71
4.12 Entries charging current earnings and crediting depreciation
reserve ................................................. 72
4.13 Compliance with conditions on merger, etc. ................... 72
4.15 No default to be suffered permitted .......................... 74
4.16 Advances by Trustee, etc. .................................... 74
4.17 Contents of Certificate of Available Net Property Additions ... 75
ARTICLE V.
Redemption of Bonds
5.01 General provision; redemption prices of Series A Bonds ........ 75
5.02 Notice of redemption ......................................... 76
5.03 Rescinding of election to redeem .............................. 77
5.04 Deposit of redemption price .................................. 78
5.05 Effect of notice and deposit ................................. 79
5.06 No Call for redemption if in default on Bonds Outstanding .... 80
5.07 Provisions for redemption and prepayment of Bonds of
future series ........................................... 80
ARTICLE VI.
Improvement Fund
6.01 Improvement Fund for Series A Bonds .......................... 80
6.02 Determination of amount to be paid into Improvement Fund ..... 81
(a) Form of Improvement Fund Application ................... 81
(b) Allocation of 60% of Net Property Additions ............. 82
(1) Directors' Resolution ............................... 82
(2) Supplemental Indenture .............................. 82
(3) Certificate of Available Net Property Additions ..... 82
(4) Accountant's Certificate ............................ 82
(5) Engineer's Certificate .............................. 82
(6) Opinion of Counsel .................................. 82
6.03 Application of cash to redemption by Trustee ................. 83
6.04 Sinking Fund Etc. for Bonds of other series .................. 84
ARTICLE VII.
Possession, Use, and Release of Mortgaged Property
7.01 Possession and use prior to default .......................... 84
7.02 Releases without consent of Trustee; application of proceeds 84
(a) abandonment of unserviceable parts of Mortgaged Property 85
(b) disposition of unserviceable poles, machinery, etc. ..... 85
(c) changes in contracts, etc. .............................. 85
(d) grant of easements and rights of way .................... 85
(e) leases of Mortgaged Property ............................ 86
(f) standing timber ......................................... 86
(h) indentures and agreements modifying or extinguishing
existing indentures and agreements .................. 86
7.03 Releases by Trustee on disposal of property .................. 86
(a) Directors' resolution ................................... 87
(b) Officers' Certificate ................................... 87
(c) Engineer's Certificate .................................. 88
(d) Consideration ........................................... 88
(e) Assignment of mortgages; or cash ........................ 89
(f) Supplemental Indenture, when required ................... 89
(g) Instrument of partial release ........................... 89
(h) Opinion of Counsel ...................................... 89
7.04 Releases by Trustee on disposal of real estate for cash ...... 90
(a) Officers' Certificate ................................... 91
(b) Engineer's Certificate .................................. 91
(c) Instrument of partial release ........................... 91
(d) Cash .................................................... 91
(e) Opinion of Counsel ...................................... 91
7.05 Taking by eminent domain, etc. ............................... 91
(a) Officers' Certificate ................................... 92
(b) Instrument of partial release ........................... 92
(c) Money ................................................... 92
(d) Supplemental Indenture, when required ................... 92
(e) Engineer's Certificate .................................. 92
(f) Opinion of Counsel ...................................... 93
7.06 Independent Engineer's Certificate as to Fair Value of property
released, when required ................................. 93
7.07 Release by Trustee of purchase money obligations on receipt of
value ................................................... 94
7.08 Disposition of moneys received by Trustee .................... 94
7.09 Sale of Excepted Property .................................... 94
(a) Officers' Certificate ................................... 94
(b) Instrument of partial release ........................... 94
(c) Opinion of Counsel ...................................... 94
7.10 Rights of purchasers of released property .................... 95
7.11 Sections 7.02, 7.03 and 7.04 not limitation of one another ... 95
7.12 Trustee may execute partial release though default has occurred 95
7.13 Rights of receiver, etc. ..................................... 95
ARTICLE VIII.
Disposition of Money in the Hands of the Trustee
8.01 General provisions relating to disposition of money deposited
for various purposes .................................... 96
8.02 Application of insurance moneys and cash received from sale of
Mortgaged Property, eminent domain, etc. ............... 96
8.03 Moneys deposited in 8.02 applied to
(a) redemption of Bonds ..................................... 97
(b) payment to Company against Net Property Additions ....... 98
(1) Directors' resolution ............................... 98
(2) Supplemental Indenture .............................. 98
(3) Officers' Certificate ............................... 98
(4) Certificate of Available Net Property Additions ..... 98
(5) Accountant's Certificate ............................ 98
(6) Engineer's Certificate...... ........................ 99
(7) Opinion of Counsel .................................. 99
(c) reimbursement to Company for taxes paid on profits from
sale of Mortgaged Property .......................... 99
(d) payment to Company for Bonds surrendered ................ 100
(e) payment of matured Bonds ................................ 100
(f) purchase of Bonds entitled to benefits of Sinking Fund,
etc. .................................................... 100
8.04 Moneys in excess of $250,000 after three years to be held for
redemption of Bonds; call for redemption ................ 101
8.05 Application of proceeds if all Mortgaged Property taken by
eminent domain .......................................... 102
8.06 Investment of moneys in hands of Trustee ..................... 102
ARTICLE IX.
Defaults and Remedies
9.01 Defaults; principal of Bonds may be declared due and payable . 103
9.02 Notice of default to Bondholders ............................. 106
9.03 Powers of Trustee on default ................................. 106
(1) entry on Mortgaged Property .............................. 106
(2) collection of purchase money obligations ................ 108
(3) sale of Mortgaged Property .............................. 108
(4) suit for foreclosure, etc. .............................. 109
9.04 Right to legal remedies; appointment of receiver ............. 109
9.05 Sale of Mortgaged Property as an entirety .................... 109
9.06 Notice of sale ............................................... 110
9.07 Rights of purchaser on sale .................................. 110
9.08 Conveyance by Trustee; power of attorney to Trustee;
confirmation by Company; Company forever barred;
receipt for purchase money .............................. 111
9.09 Application of purchase money ................................ 112
9.10 Principal accelerated on sale ................................ 113
9.11 Rights of Trustee to collect principal and interest of Bonds;
recovery of judgment; application of amount collected ... 113
9.12 Trustee's right to maintain suits to protect security ........ 116
9.13 Right of receiver or Bondholders to make payments for account
of Company .............................................. 116
9.14 Waiver of stays or extensions or redemption laws .............. 117
9.15 Waiver of service of process, etc. ........................... 117
9.16 Powers of majority in interest of Bondholders ................ 118
9.17 Powers of majority in interest of Bondholders of various series 118
9.18 Restrictions on right of Bondholders to enforce Indenture .... 119
9.19 Remedies not exclusive ....................................... 120
9.20 Delay not a waiver of rights; Trustee may act without
possession of Bonds ..................................... 120
9.21 Trustee represents all Bondholders ........................... 120
ARTICLE X.
Evidence of Rights of Bondholders and Ownership of Bonds
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10.01 Execution of requests and evidence of bondholding ............. 121
ARTICLE XI.
Immunity of Incorporators, Stockholders, Officers and Directors
11.01 Waiver of personal liability ................................. 122
ARTICLE XII.
Bondholders' List and Reports by the Company and the Trustee
12.01 Information as to Bondholders to be furnished by Company ..... 123
12.02 (a) Preservation of information by Trustee .................. 123
(b) Information to be furnished to Bondholders .............. 124
12.03 Reports to be filed by Company with Trustee and Securities
and Exchange Commission; summaries to Bondholders ....... 125
12.04 Reports by Trustee to Bondholders ............................ 126
ARTICLE XIII.
Concerning the Trustee and Its Paying Agents
13.01 Qualification of Trustee ..................................... 128
13.02 Trustee's undertaking prior to and after default ............. 129
13.03 Trustee released from certain liabilities .................... 129
13.04 Recitals by Company, not Trustee ............................. 130
13.05 Trustee not personally liable in case of entry ............... 131
13.06 Reliance by Trustee on documents; right to consult counsel, etc.131
13.07 Trustee's responsibility for selection of independent experts;
Trustee not required to risk own funds .................. 131
13.08 Trustee or paying agent may own Bonds ........................ 132
13.09 Funds held in trust .......................................... 132
13.10 Trustee entitled to compensation ............................. 132
13.11 Prior right of Trustee to compensation and reimbursement ...... 136
13.12 Reliance on Officers' Certificates ........................... 135
13.13 Notices by Trustee ........................................... 136
13.14 Conflicting interest of Trustee .............................. 136
(a) Must eliminate such interest or resign .................. 136
(b) Notice to Bondholders of failure to remove conflicting
interests or resign ................................. 136
(c) Bondholders may require resignation ..................... 136
(d) Definition of conflicting interest ...................... 137
13.15 Trustee as creditor .......................................... 142
(a) Apportionment of preferential collection on debt arising
within four months prior to default; exceptions; applica-
tion on resignation ..................................... 142
(b) Situation excluded from apportionment requirement ....... 145
13.16 Resignation of Trustee ....................................... 146
13.17 Removal of Trustee ........................................... 147
13.18 Appointment of successor Trustee ............................. 147
13.19 Acceptance of trust by successor Trustee; conveyance to
successor Trustee ....................................... 149
13.20 Effect of merger or consolidation of Trustee ................. 149
13.21 Relationship of Trustee and Bondholder governed by
Massachusetts law ....................................... 150
13.22 Paying agents ................................................ 150
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ARTICLE XIV.
Effects of Consolidation, Merger, Sale or Lease
14.01 Terms on which Company may consolidate, merge, sell or lease
Mortgaged Property ...................................... 151
14.02 Compliance with conditions precedent ......................... 154
14.03 Extent of Lien of Indenture on property of successor ......... 155
14.04 Rights of successor under Indenture .......................... 156
14.05 Stamping of Bonds issued by successor ........................ 157
ARTICLE XV.
Defeasance
15.01 Discharge of Indenture ....................................... 158
15.02 Disposition of money deposited with Trustee .................. 159
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ARTICLE XVI.
Supplemental Indentures
16.01 Supplemental Indentures without consent of Bondholders;
purposes for which permitted ............................. 160
16.02 Supplemental Indentures amending Indenture; consent of
Bondholders required .................................... 162
16.03 Discretion of Trustee concerning acceptance of Supplemental
Indentures ............................................. 164
16.04 Supplemental Indentures become part of this Indenture; must
comply with Trust Indenture Act of 1939 ................. 164
ARTICLE XVII.
Miscellaneous
17.01 Indenture for benefit of parties and Bondholders solely....... 165
17.02 Required statement in certificates and opinions; basis of
certificates and opinions ............................... 165
17.03 Notices ...................................................... 166
17.04 Consent to undertaking for costs ............................. 166
17.06 Provisions required by Trust Indenture Act of 1939 control ... 167
17.06 Trust Indenture Act of 1939 means as Act existed on date
Indenture ............................................... 167
17.07 Parties include successors and assigns ....................... 167
17.08 Invalidity of any provision of Indenture shall not affect
other provisions ........................................ 167
17.09 Date of Indenture ............................................ 167
17.10 Cover, headings, etc. ........................................ 167
17.11 United States Internal Revenue stamp tax paid ................ 168
17.12 Original counterparts ........................................ 168
Testimonium ........................................................ 168
Signatures ......................................................... 169
Schedule A ........................................................ 183
Acknowledgements - Western Massachusetts Electric Company ......... 183
Old Colony Trust Company ....................... 184
Certificate of Votes ............................................... 185
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THIS FIRST MORTGAGE INDENTURE AND DEED OF TRUST dated as of the first day of August, 1954, made and entered into by and between WESTERN MASSACHUSETTS ELECTRIC COMPANY, a corporation organized under the laws of the Commonwealth of Massachusetts having principal places of business at Greenfield and Turners Falls in the County of Franklin, Springfield in the County of Hampden, Pittsfield in the County of Berkshire, and Boston in the County of Suffolk, all in said Commonwealth, (hereinafter called the Company) and OLD COLONY TRUST COMPANY, a corporation organized under the laws of the Commonwealth of Massachusetts, and having its principal office and usual place of business in said Boston, (hereinafter called the Trustee).
WITNESSETH That:
WHEREAS the Company is authorized and empowered by law to borrow money for its proper corporate purposes, to issue its bonds for money so borrowed, and to secure the payment of said bonds by mortgage of its franchises and property hereinafter described; and
WHEREAS the Company has deemed it necessary to borrow money for such purposes and to that end, pursuant to votes or resolutions duly and legally adopted by its Board of Directors, by its Executive Committee and by its stockholder at meetings duly and regularly called and held for the purpose, has duly authorized and directed the execution and delivery of this Indenture under which Bonds to an amount limited only by the terms of this Indenture and by law, may be issued and secured, the said Bonds so to be issued being known generally as its First Mortgage Bonds (hereinafter called the Bonds) to be issued in one or more series, the Bonds of each series to be identical, so far as may be, in tenor, except that the Bonds of any series may be in coupon form with coupons attached or may be registerable as to principal only, or may be in fully registered form; to mature on such dates; to bear interest at such rates; to be payable in such currency; and to contain such other provisions required or permitted by this Indenture as may be determined from time to time by the stockholder or stockholders and/or the Board of Directors of the Company; and
WHEREAS the Company, at said meetings, has authorized an original issue of Bonds under this Indenture limited in aggregate amount (except as provided in 2.13 hereof) to eleven million dollars ($11,000,000), said Bonds being originally issued in fully registered form, maturing on October 1, 1973, bearing interest from the date thereof at the rate of two and ninety-five hundredths percentum (2.95%) per annum payable semi-annually, and being known as its "First Mortgage Bonds, Series A, 2.95%, due October 1, 1973" (hereinafter called the 2.95% Bonds); and
WHEREAS the Department of Public Utilities of the Commonwealth of Massachusetts has in due form of law authorized the issue of said 2.95% Bonds hereunder in the aggregate principal amount of eleven million dollars ($11,000,000) by its Order dated July 29, 1954; and
WHEREAS the permanent form of said 2.95% Bonds, in fully registered form without coupons, of the certificate of authentication thereof, of the transfer thereof, and the permanent form of said 2.95% Bonds in coupon form for which the said 2.95% Bonds in fully registered form are exchangeable as hereinafter provided, and of the coupons thereon, of the certificate of authentication thereof, of the transfer thereof, and the form of the stamp tax legend to be affixed to said 2.95% Bonds in either form shall be substantially in the following form; to wit:
Form of Fully Registered Bond
No. AR $...........
WESTERN MASSACHUSETTS ELECTRIC COMPANY
First Mortgage Bond, Series A, 2.95%, due October 1, 1973
FOB VALUE RECEIVED, WESTERN MASSACHUSETTS ELECTRIC COMPANY, a corporation of the Commonwealth of Massachusetts, (hereinafter called the Company) hereby promises to pay to , or registered assigns, the sum of dollars ($ ), on the first day of October, 1973, and semi-annually on the first days of April and October in each year to pay interest on said sum at the rate of two and ninety-five hundredths percentum (2.95%) per annum from the date hereof until the Company's obligation with respect to said sum shall be discharged. Both principal and interest shall be payable at the principal office in Boston in the County of Suffolk and said Commonwealth of Old Colony Trust Company, a corporation organized under the laws of said Commonwealth (hereinafter with its successors, as defined in the Indenture mentioned below, generally called the Trustee), or of such successors in such coin or currency of the United States of America as at the time of payment is legal tender for public and private debts.
This Bond is one of a series of Bonds known as the "First Mortgage Bonds, Series A, 2.95%, due October 1, 1973" of the Company, being either in the form of coupon Bonds registerable as to principal only or in fully registered form, limited to eleven million dollars ($11,000,000) in principal amount (except as provided by the terms of 2.13 of the Indenture mentioned below), and issued under and secured by a First Mortgage Indenture and Deed of Trust (hereinafter with all indentures stated to be supplemental thereto to which the Trustee shall be a party, generally called the Indenture) between the Company and said Old Colony Trust Company dated as of August 1, 1954, an executed counterpart of which is on file at the principal office of the Trustee, to which Indenture reference is hereby made for a description of the nature and extent of the security, the rights thereunder of the bearers or registered owners of Bonds issued and to be issued thereunder, the rights, duties, and immunities thereunder of the Trustee, the rights and obligations thereunder of the Company, and the terms and conditions upon which said Bonds, and other and further Bonds of other series, are issued and are to be issued.
The fully registered Bonds of this series in permanent form are issuable in denominations of one thousand dollars ($1,000) and any multiple thereof.
This Bond is transferable by the registered owner hereof in person or by his duly authorized attorney at the principal office of the Trustee upon surrender and cancellation thereof, and thereupon a new Bond or Bonds of this series for a like principal amount will be issued in exchange, all as provided in said Indenture. The Company and the Trustee may deem and treat the registered owner hereof as the absolute owner hereof, whether or not this Bond be overdue, for the purpose of receiving payment and for all other purposes, and neither the Company nor the Trustee shall be affected by any notice to the contrary.
This Bond is exchangeable at the option of the registered owner hereof at the principal office of the Trustee for coupon Bonds of this series of an equal principal amount, upon transfer and surrender hereof to the Trustee as hereinbefore provided, in the manner and on the terms provided in said Indenture, and upon such transfer and surrender, coupon Bonds of this series, with all coupons for interest unpaid hereon and none others attached, will be issued in lieu hereof.
This Bond is also exchangeable at the option of the registered owner hereof at the principal office of the Trustee for an equal principal amount of fully registered Bonds of this series of other denominations, in the manner and on the terms provided in said Indenture.
The Bonds of this series are subject to redemption prior to maturity upon not less than thirty (30) days' prior notice, as a whole at any time, or in part from time to time, at the option of the Company, in the manner and with the effect provided in said Indenture, at the principal amount of the Bonds so to be redeemed and interest accrued thereon to the date fixed for redemption, together (unless redeemed in the twelve months' period ending September 30, 1973) with a premium equal to the percentage of the principal amount thereof hereinafter set forth:
If redeemed on or at any time prior to September 30, 1956, 2-1/2%
If redeemed thereafter and on or at any time prior to September 30, 1960,
2%
If redeemed thereafter and on or at any time prior to September 30, 1964,
1-1/2%
If redeemed thereafter and on or at any time prior to September 30, 1968,
1%
If redeemed thereafter and on or at any time prior to September 30, 1972,
1/2%
The Bonds of this series are also subject to redemption to the extent provided in the Indenture by the operation of the Improvement Fund provisions of said Indenture at the principal amount thereof and interest accrued thereon to the date fixed for redemption.
Notice of redemption as aforesaid shall be given by publication at least once in each of three (3) successive weeks, the first publication to be at least thirty (30) days before the date set for redemption, in at least two daily newspapers of general circulation printed in the English language one of which shall be published in said Boston, and by mailing, at least thirty (30) days prior to the date set for redemption, by registered mail to the registered owners of all fully registered Bonds and to the registered owners of all coupon Bonds registered as to principal, which have been called for redemption, a copy of said notice (provided, however, that if all of said Bonds shall be fully registered at any time not more than forty-five (45) and not less than thirty (30) days prior to the date set for redemption, notice by publication may be dispensed with).
If this Bond, or a part hereof, shall be called for redemption, or provision for such call shall have been made, as provided in said Indenture, and payment of the redemption price shall have been duly provided for by the Company, interest shall cease to accrue hereon, or on such called part, from and after the redemption date, the Company shall from the time provided in said Indenture be under no further liability in respect of the principal of, or premium, if any, or interest on, this Bond, or such called part, and the registered owner hereof shall from and after such time look for payment hereof solely to the money so provided.
The said Indenture contains provisions permitting the Company and the Trustee with the consent of the bearers or registered owners of not less than seventy percentum (70%) in principal amount of the Bonds at the time outstanding, (except Bonds held by or for the benefit of the Company) including, if more than one series of Bonds shall be at the time outstanding, not less than seventy percentum (70%) in principal amount of the Bonds except Bonds held by or for the benefit of the Company) of each series affected differently from those of other series, to effect by supplemental indenture modifications or alterations of said Indenture and of the rights and obligations of the Company and of the bearers and registered owners of the Bonds; but no such modification or alteration shall be made which, without the written approval or consent of the registered owner hereof, will extend the maturity hereof or reduce the rate or extend the time for payment of interest hereon or reduce the amount of the principal hereof or of any premium payable on the redemption hereof, or which will reduce the percentage of the principal amount of Bonds required for the adoption of the modifications or alterations as aforesaid, or authorize the creation by the Company, except as expressly authorized by the Indenture, of any mortgage, pledge or lien upon the property subjected thereto ranking prior to or on an equality with the lien thereof.
If a default, as defined in said Indenture shall occur, the principal of this Bond may become or be declared due and payable before maturity, in the manner and with the effect provided in the Indenture; but any default and the consequences thereof may be waived by certain percentages of the bearers or registered owners of Bonds, all as provided in said Indenture.
No recourse shall be had for the payment of the principal of or the interest on this Bond or for any claim based hereon or otherwise in respect hereof or of the said Indenture against any incorporator, stockholder, director, or officer, past, present, or future, as such, of the Company or of any predecessor or successor corporation under any constitution, statute, or rule of law, or by the enforcement of any assessment, penalty or otherwise, all such liability being waived and released by the holder hereof by the acceptance of this Bond.
This Bond shall take effect as a sealed instrument.
This Bond shall not become or be valid or obligatory until the certificate of authentication hereon shall have been signed by the Trustee.
IN WITNESS WHEREOF, WESTERN MASSACHUSETTS ELECTRIC COMPANY has caused this Bond to be executed in its name and on its behalf and under its corporate seal by its and , thereunto duly authorized, as of the day of , 19
WESTERN MASSACHUSETTS ELECTRIC COMPANY
By _______________________________
and
By _______________________________
Certificate of Authentication
This Bond is one of the First Mortgage Bonds, Series A, 2.95%, due October 1, 1973, described and provided for in the within mentioned Indenture.
OLD COLONY TRUST COMPANY, TRUSTEE
By _______________________________
Authorized Officer
Form for Transfer
FOR VALUE RECEIVE hereby sell, assign,
and transfer the within Bond to and hereby
irrevocably constitute and appoint attorney to
|
transfer said Bond on the books of the Company with full power of substitution in the premises.
Dated this day of , 19
In presence of:
Form of Coupon Bond
No. AM $1,000
WESTERN MASSACHUSETTS ELECTRIC COMPANY
First Mortgage Bond, Series A, 2.95%, due October 1, 1973
FOR VALUE RECEIVED, WESTERN MASSACHUSETTS ELECTRIC COMPANY, a corporation of the Commonwealth of Massachusetts, (hereinafter called the Company) hereby promises to pay to the bearer, or, if this Bond be registered as to principal otherwise than to bearer, then to the registered owner hereof, the sum of one thousand dollars ($1,000) on the first day of October, 1973, and semi-annually on the first days of April and October in each year to pay interest on said sum at the rate of two and ninety-five hundredths percentum (2.95%) per annum from the date hereof until the Company obligation in respect of said sum shall be discharged, but until maturity, only upon presentation and surrender of the annexed coupons as they severally mature. Both principal and interest shall be payable at the principal office in Boston in the County of Suffolk and said Commonwealth of Old Colony Trust Company, a corporation organized under the laws of said Commonwealth, (hereinafter with its successors, as defined in the Indenture mentioned below, generally called the Trustee), or of such successors, in such coin or currency of the United States of America as at the time of payment is legal tender for public and private debts.
This Bond is one of a series of Bonds known as the "First Mortgage Bonds, Series A, 2.95%, due October 1, 1973" of the Company, being either in the form of coupon Bonds registerable as to principal only or in fully registered form, limited to eleven million dollars ($11,000,000) in principal amount (except as provided by the terms of 2.13 of the Indenture mentioned below), and issued under and secured by a First Mortgage Indenture and Deed of Trust (hereinafter, with all indentures stated to be supplemental thereto to which the Trustee shall be a party, generally called the Indenture) between the Company and said Old Colony Trust Company dated as of August 1, 1954, an executed counterpart of which is on file at the principal office of the Trustee, to which Indenture reference is hereby made for a description of the nature and extent of the security, the rights thereunder of the bearers or registered owners of Bonds issued and to be issued thereunder and of the coupons appertaining thereto, the rights, duties, and immunities thereunder of the Trustee, the rights and obligations thereunder of the Company, and the terms and conditions upon which said Bonds, and other and further Bonds of other series, are issued and are to be issued.
The coupon Bonds of this series in permanent form are issuable in the denomination of one thousand dollars ($1,000).
This Bond, singly or together with other coupon Bonds of this series, may be exchanged at the option of the bearer or registered owner for fully registered Bonds of this series of an equal principal amount, in the manner and on the terms provided in said Indenture.
This Bond, except while registered as to principal, and the coupons annexed hereto shall be transferable by delivery. The bearer hereof may have the ownership of the principal of this Bond registered upon presentation hereof for that purpose at the principal office of the Trustee, such registration to be noted hereon. After such registration no transfer hereof shall be valid unless made on the registration books at said office by the registered owner in person or by his duly authorized attorney and similarly noted hereon; but this Bond may be discharged from registry by like transfer to bearer similarly registered and noted hereon, and thereupon transferability by delivery shall be restored and this Bond may again and from time to time be registered or transferred as before. The coupons annexed hereto, whether or not this Bond be registered as to principal, shall remain payable to bearer and shall continue to be transferable by delivery. The Company and the Trustee may deem and treat the bearer of this Bond, if it be not then registered as to principal, or, if this Bond be registered as to principal as herein authorized, the person in whose name the same is registered, as the absolute owner hereof and the bearer of any coupon hereto appertaining as the absolute owner thereof, whether or not this Bond or such coupon shall be overdue, for the purpose of receiving payment and for all other purposes, and neither the Company nor the Trustee shall be affected by any notice to the contrary.
The Bonds of this series are subject to redemption prior to maturity upon not less than thirty (30) days' prior notice, as a whole at any time, or in part from time to time, at the option of the Company, in the manner and with the effect provided in said Indenture, at the principal amount of the Bonds so to be redeemed and interest accrued thereon to the date fixed for redemption, together (unless redeemed in the twelve months' period ending September 30, 1973) with a premium equal to the percentage of the principal amount thereof hereinafter set forth:
If redeemed on or at any time prior to September 30, 1956, 2-1/2 %
If redeemed thereafter and on or at any time prior to September 30, 1960,
2%
If redeemed thereafter and on or at any time prior to September 30, 1964,
1-1/2%
If redeemed thereafter and on or at any time prior to September 30, 1968,
1%
Ii redeemed thereafter and on or at any time prior to September 30, 1972,
1/2%
The Bonds of this series are also subject to redemption to the extent provided in the Indenture by the operation of the Improvement Fund provisions of said Indenture at the principal amount thereof and interest accrued thereon to the date fixed for redemption.
Notice of redemption as aforesaid shall be given by publication at least once in each of three (3) successive weeks, the first publication to be at least thirty (30) days before the date set for redemption, in at least two daily newspapers of general circulation printed in the English language one of which shall be published in said Boston, and by mailing, at least thirty (30) days prior to the date set for redemption, by registered mail, to the registered owners of all fully registered Bonds and to the registered owners of all coupon Bonds registered as to principal, which have been called for redemption, a copy of said notice (provided, however, that if all of said Bonds shall be fully registered at any time not more than forty-five (45) and not less than thirty (30) days prior to the date set for redemption, notice by publication may be dispensed with).
If this Bond shall be called for redemption, or provision for such call shall have been made, as provided in said Indenture, and payment of the redemption price shall have been duly provided for by the Company, interest shall cease to accrue hereon from and after the redemption date, the coupons appertaining hereto thereafter maturing shall be void, the Company shall from the time provided in said Indenture be under no further liability in respect of the principal of, or premium, if any, or interest on, this Bond and the bearer or registered owner hereof shall from and after such time look for payment hereof solely to the money so provided.
The said Indenture contains provisions permitting the Company and the Trustee with the consent of the bearers or registered owners of not less than seventy percentum (70%) in principal amount of the Bonds at the time outstanding, (except Bonds held by or for the benefit of the Company) including if more than one series of Bonds shall be at the time outstanding, not less than seventy percentum (70%) in principal amount of the Bonds (except Bonds held by or for the benefit of the Company) of each series affected differently from those of other series, to effect by supplemental indenture modifications or alterations of said Indenture and of the rights and obligations of the Company and of the bearers and registered owners of the Bonds and coupons; but no such modification or alteration shall be made which, without the written approval or consent of the bearer or registered owner hereof, will extend the maturity hereof or reduce the rate or extend the time for payment of interest hereon or reduce the amount of the principal hereof or of any premium payable on the redemption hereof, or which will reduce the percentage of the principal amount of Bonds required for the adoption of the modifications or alterations as aforesaid, or authorize the creation by the Company, except as expressly authorized by the Indenture, of any mortgage, pledge or lien upon the property subjected thereto ranking prior to or on an equality with the lien thereof.
If a default as defined in said Indenture shall occur, the principal of this Bond may become or be declared due and payable before maturity, in the manner and with the effect provided in the Indenture; but an default and the consequences thereof may be waived by certain percentages of the bearers or registered owners of Bonds, all as provided in said Indenture.
No recourse shall be had for the payment of the principal of or the interest on this Bond or for any claim based hereon or otherwise in respect hereof or of the said Indenture against any incorporator, stockholder, director, or officer, past, present, or future, as such, of the Company or of any predecessor or successor corporation under any constitution, statute, or rule of law, or by the enforcement of any assessment, penalty, or otherwise, all such liability being waived and released by the holder hereof by the acceptance of this Bond.
This Bond shall take effect as a sealed instrument.
Neither this Bond nor any of the annexed coupons shall become or be valid or obligatory until the certificate of authentication hereon shall have been signed by the Trustee.
IN WITNESS WHEREOF, WESTERN MASSACHUSETTS ELECTRIC COMPANY has caused this Bond to be executed in its name and on its behalf, and under its corporate seal by its and , thereunto duly authorized, and the coupons annexed thereto to bear the facsimile signature of its Treasurer, as of the first day of August, 1954.
WESTERN MASSACHUSETTS ELECTRIC COMPANY
By ___________________________________
and
By ___________________________________
Form of Coupon
On , 19 , WESTERN MASSACHUSETTS ELECTRIC COMPANY upon surrender hereof, unless the Bond hereinafter mentioned shall have been called for previous redemption and payment duly provided therefor, will pay to the bearer, at the principal office in Boston, Massachusetts, of Old Colony Trust Company or of any successor as Trustee under the Indenture securing said Bond, and /100 dollars, in any coin or currency of the United States of America which at the time of such payment is legal tender for public and private debt, being ( ) months' interest on its First Mortgage Bond, Series A 2.95%, due October 1, 1973, Numbered
Treasurer
Certificate of Authentication
This Bond is one of the First Mortgage Bonds, Series A, 2.95%, due October 1, 1973, described and provided for in the within mentioned Indenture.
OLD COLONY TRUST COMPANY, TRUSTEE
By _______________________________
Authorized Officer
Form for Registration
Notice: No writing below except by a duly authorized officer of the Registrar.
Form of Stamp Tax Legend
Any Federal Revenue Tax on the issue of this Bond has been paid by affixing to an original counterpart of the Indenture under which it is issued, and duly cancelling, the required stamps.
AND WHEREAS the Bonds of each series, other than the 2.95% Bonds, and the coupons, if any, to be attached thereto are to be substantially in the forms above set forth, with such modifications thereof and additions thereto or eliminations therefrom authorized or permitted by this Indenture as to any particular series as in the opinion of the stockholder or stockholders and/or the Board of Directors and/or the Executive Committee of the Company may at the time be necessary or proper by reason of the terms on which the Bonds of any such series are issued; and
WHEREAS all requirements of law and of the Certificate of Incor- poration as amended, and of the By-Laws of the Company, including all requisite action on the part of directors and officers, and all things nec- essary to make said 2.95% Bonds originally issued hereunder, when duly executed by the Company and delivered, the valid, binding, and legal obligations of the Company, and the covenants and stipulations herein contained valid and binding obligations of the Company, have been done and performed, and the execution and delivery hereof have been in all respects duly authorized;
NOW, THEREFORE, THIS INDENTURE AND DEED OF TRUST WITNESSETH: In consideration of the premises and of the mutual covenants herein contained and of the purchase and acceptance by the bearers and registered owners thereof of the Bonds at any time issued hereunder, and of one (1) dollar duly paid to the Company by the Trustee and for other good and valuable considerations, the receipt whereof at or before the ensealing and delivery of these presents is hereby acknowledged, and in order to secure the payment of the principal of and premium, if any, and interest on all Bonds from time to time outstanding hereunder according to their tenor and effect, and to secure the performance and observance of all the covenants and conditions therein and herein contained, and to declare the terms and conditions upon and subject to which the Bonds are to be issued and secured, the Company has executed and delivered this Indenture, and has granted, bargained, sold, conveyed, assigned, transferred, mortgaged, and confirmed, and by these presents does grant, bargain, sell, convey, assign, transfer, mortgage, and confirm unto Old Colony Trust Company as Trustee, its successors in the trust hereof, and its and their assigns, all and singular the franchised and properties hereinafter described in Clauses 1 to 4 inclusive (hereinafter called the Mortgaged Property), that is to say:
CLAUSE 1.
All the property, real, personal, or mixed, of every kind, character, and description, which is described in Schedule A hereto attached and hereby made a part of this Clause as fully as if set forth at length herein.
CLAUSE 2.
Without in any way limiting, or derogating from the inclusiveness of the description of the property described in Clause 1, or hereinafter described in Clauses 3 and 4, all and singular the franchises and the lands, real estate, interests and rights in land, rights of way, agreements for rights of way, locations, leaseholds, grants, easements, servitudes, rights pursuant to ordinances, rights in private ways, flowage and riparian rights and rights of drainage, percolation, seepage, and erosion, licenses, immunities, privileges, permits; dams, wings, retaining walls, canals, gates, reservoirs, dam sites, power houses, power plants, water wheels, engines, boilers, dynamos, generators, motors, pumps, valves, and other structures, erections, apparatus and appurtenances for generating and storing electrical energy; stations and substations, transmission lines, towers, cables, wires, poles, fractional interests in poles, distribution and supply lines, conduits, drains and systems, transformers, meters, lamps, and apparatus and appurtenances for the distribution and sale of electrical energy or steam; other appliances and apparatus and physical property used or useful in the business of generating, storing, transmitting or circulating and selling electric energy or steam; and office building, shops, garages, laboratories, and the physical equipment therein, which, in respect of all the foregoing, now are owned by the Company; together with all and singular the tenements, hereditaments, and appurtenances belonging or in any wise appertaining to the aforesaid property or any part thereof; with the reversion and reversions, remainder and remainders, and all tolls, earnings, revenues, rents, issues, profits and other income thereof, and all the estate, right, title, interest, and claim whatsoever at law as well as in equity, which the Company now has or may hereafter acquire in and to the aforesaid property and every part and parcel thereof.
The conveyance, transfer, and assignment of property described in Clauses 1 and 2 hereof are made subject, however, (1) to the specific liens, encumbrances, reservations, restrictions, conditions, limitations, covenants, interests, and exceptions to the extent set forth or referred to in Schedule A aforesaid and in the deeds, grants, and conveyances therein described; (2) to Permitted Encumbrances; and (3) to any and all existing leases or tenancies for camp sites, fishing, swimming, or hunting rights, rights to cut wood, rights of way whether of necessity or by prescription or otherwise, and other similar rights and privileges given, granted, permitted, or acquiesced in by the Company in respect of any of said property, no one of which leases, tenancies, rights, or privileges substantially interferes with the use and enjoyment of said properties by the Company for its general and ordinary business.
CLAUSE 3.
The franchise or franchises of the Company as that term is used in
Section 13 of Chapter 164 of the General Laws (Ter. Ed.) of the Com-
monwealth of Massachusetts, together with all the rights of the Company,
but subject to the obligations of the Company, relative to the erection,
maintenance, and operation of the Company's mains, conduits, poles, wires,
fixtures, and other apparatus in, over, under, or across public ways.
CLAUSE 4.
Any and all other franchises and property, real, personal, or mixed, and wheresoever situated, in character and kind like or similar to the property hereinbefore described in Clauses 2 and 3 which may be at any time hereafter acquired by the Company (except as provided in 14.01 and 14.03 in respect of property acquired by consolidation or merger), it being the intention hereof that all such franchises and property acquired by the Company (except as aforesaid) shall be as fully embraced within and subject to the lien hereof as if such property were now owned by the Company and were specifically described herein and conveyed hereby.
The conveyance, transfer, and assignment of the property acquired by the Company after the execution hereof, pursuant to this Clause 4, is subject to Permitted Encumbrances and to any mortgages, liens, or other encumbrances thereon of the character described in 4.10 existing at the time of the acquisition thereof by the Company and to any mortgages of such character which may be placed thereon at the time of the acquisition thereof to secure or to raise a part of the purchase price thereof and to any renewals or extensions of such encumbrances or mortgages.
There is furthermore expressly excepted and excluded from the lien and operation of this Indenture, and from the definition of Mortgaged Property anything in Clauses 1 to 4, both inclusive, notwithstanding, the following described property of the Company, whether owned at the time of the execution hereof and otherwise hereby conveyed, transferred, and assigned, or hereafter acquired by it:
A. All cash now and hereafter on hand and in banks, all present and future contracts and other choses in action, bills, notes, and accounts receivable, trade acceptances, claims for damage in tort, or for breach of contract whether or not to the property hereby conveyed, transferred, and assigned or intended to be; claims for refunds of taxes of every sort and description; judgments obtained by or in the name of the Company; and the interest of the Company in any present or future funds or obligations comprised in any retirement or pension plan to which the Company is or may be a party;
B. Office furniture, equipment and supplies, books, records, documents, and papers now or hereafter belonging to the Company;
C. Vehicles of every sort and description now or hereafter belonging to the Company, together with all equipment and supplies necessary to the operation and maintenance thereof;
D. All present and future material and supplies, coal, oil, fuel and other personal property which is consumable (otherwise than by ordinary wear and tear) in the physical operation of the plants and systems of the Company; and all present and future materials or supplies used as components in the construction of electric utility or steam plant and held in advance of use thereof for such purpose.
E. Goods, wares, merchandise, appliances, materials, and supplies now or hereafter manufactured, produced, purchased, or acquired by the Company for the purpose of sale, display or lease in the ordinary conduct of its business;
F. Shares of stock, notes, debentures, bonds, or other certifi- cates or evidences of indebtedness and other securities now or here- after owned by the Company excepting however purchase money obligations acquired pursuant to the provisions of 7.03;
G. All property, leasehold interests, permits, licenses, fran- chises, and rights whether now owned or hereafter acquired by the Company which are intended to be hereby conveyed, transferred, or assigned and which may not legally be so conveyed, transferred or assigned, or which cannot be so conveyed, transferred, or assigned without the consent of other parties whose consent is not secured, or without subjecting the Trustee to a liability not otherwise contemplated by the provisions hereof or which otherwise may not be, or are not, hereby lawfully and/or effectively granted, conveyed, mortgaged, transferred and assigned by the Company;
H. The last day of the term of each leasehold estate (oral or written and/or any agreement therefor) now or hereafter enjoyed by the Company whether falling within a general or a particular description of property herein;
I. Any property which pursuant to the terms of Article XIV is excepted from the lien hereof;
J. All small tools and equipment and machinery of portable size.
TO HAVE AND TO HOLD all and singular the above described properties unto the said Old Colony Trust Company as Trustee hereunder, its successors in the trusts hereof, and its and their assigns, to its and their own use forever.
BUT IN TRUST, NEVERTHELESS, upon the terms and trusts herein set
forth for the equal pro rata benefit, security, and protection of the
bearers or registered owners of the Bonds from time to time certified,
issued, and outstanding hereunder, without any discrimination, preference,
priority, or distinction of any Bond or coupon over any other Bond or
coupon by reason of series, priority in the time of issue, sale, or
negotiation thereof, or otherwise howsoever, except that the bearers of (1)
coupons for the payment of which money has been deposited with the Trustee,
and (2) coupons extended or transferred or pledged apart from the Bonds to
which they appertain, and the bearers and/or registered owners of (3) Bonds
which have been called for redemption or have otherwise become due and for
the payment of which money has been deposited with the Trustee, (4) Bonds
tenders for the sale of which to any Sinking Fund, Maintenance and Renewal
Fund, Improvement Fund, or any analogous fund established pursuant to any
Indenture Supplemental hereto have been accepted by the Trustee, (5) Bonds
and coupons held by or for the benefit of the Company, (6) Bonds or coupons
purportedly lost, destroyed, or stolen not held by a bona fide purchaser,
(7) Bonds and coupons entitled to particular security by reason of the
establishment for the benefit of the holders thereof of a sinking or other
fund in accordance with the provisions hereof, and (8) Bonds the holders of
which have consented to any alteration of the rights, powers, and
privileges pursuant to the terms of any supplemental indenture executed
pursuant to the terms of 16.02 hereof shall in each case be entitled to the
particular status, whether preferential or deferred, hereinafter and/or in
any such supplemental indentures set forth in respect of such particular
Bonds or coupons;
PROVIDED HOWEVER, and these presents are upon the condition that, if the Company, its successors or assigns, shall pay or cause to be paid the principal of and the premium, if any, and interest on the Bonds at the times and in the manner stipulated therein and herein and shall keep, perform, and observe all and singular the covenants and promises in said Bonds and in this Indenture expressed to be kept, performed, and observed by and on the part of the Company, then this Indenture and the estate and rights hereby granted shall, pursuant to the provisions of Article XV hereof, cease, determine, and be void; otherwise to be and remain in full force and effect.
The Company hereby declares that it holds and will hold all property described in the foregoing clauses G and H as specifically reserved and excepted, upon the trusts herein set forth and as the Trustee (or any purchaser thereof upon any sale thereof hereunder) shall for such purpose direct from time to time, to the fullest extent permitted by law or in equity, as fully as is the same could be and had been hereby granted, conveyed, mortgaged, transferred and assigned to and vested in the Trustee.
AND IT IS HEREBY COVENANTED, DECLARED, AND AGREED by and between the parties hereto that all Bonds and the coupons appertaining thereto are to be issued, certified, delivered, and held and that the above described property is to be held subject to the further covenants, conditions, uses, and trusts hereinafter set forth, and the Company, for itself and its successors and assigns, does hereby covenant and agree to and with the Trustee and its successor or successors in such trust for the benefit of those who shall hold said Bonds and Coupons or any of them as follows:
ARTICLE I.
Definitions
1.01. Unless the context requires some other meaning, the words
and terms defined in this Article I, and their equivalents, shall have the
following meanings whenever used in this Indenture, such definitions to be
equally applicable to both singular and plural forms. All other terms used
in this Indenture which are defined in the Trust Indenture Act of 1939 or
which are defined therein by reference to the Securities Act of 1933
(except as herein otherwise expressly provided) shall have the meanings
assigned to such terms in said Trust Indenture Act and in said Securities
Act as they were in force on the date of the execution of this Indenture.
Definitions of certain other words, terms, or phrases used in a particular
Section or in particular Sections hereof only, will be found in that
Section or in one of those Sections.
1.02.
(1) Indenture
The word "Indenture" shall include and mean not only this Indenture as originally executed but also this Indenture as it may be from time to time supplemented, modified, or amended by any Supplemental Indenture.
(2) Herein, hereof, etc.
The words "herein", "hereof", "hereunder", "hereby", "hereinbefore", "hereinafter", and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section, or other subdivision thereof.
(3) Supplemental Indenture
The terms "Supplemental Indenture", or "Indenture Supplemental hereto" shall mean any indenture hereafter duly authorized and entered into between the Company and the Trustee in accordance with the provisions of this Indenture, and duly acknowledged by the officers of the Company executing the same, in form proper for recording or filing.
(4) Company
The word "Company" shall mean the party of the first part hereto, Western Massachusetts Electric Company, and also any successor corporation which shall become such in the manner prescribed in Article XIV but subject to the provisions of said Article XIV.
(5) Obligor
The word "Obligor", when used with respect to Bonds issued or issuable under this Indenture shall mean every person who is liable thereon.
(6) Person
The word "person" shall mean an individual, a corporation, a partnership, an association, a joint stock company, a trust, an unincorporated organization, or a government or any agency or political subdivision thereof.
(7) Corporation
The word "Corporation" shall also include any voluntary association, joint stock company, business trust or other similar organization including in particular Western Massachusetts Companies, a voluntary association organized under a declaration of trust, dated January 15, 1927, as amended.
(8) Affiliate, Control
The word "Affiliate" as used with respect to any person shall mean any other person, who or which, directly or indirectly, controls or is controlled by or is under common control with such person. The word "Control" as used with respect to any person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such person, whether through the ownership of voting securities or by contract, or otherwise. The words and terms "Affiliated", "Affiliation", "Controlling", "Controlled by", and "under common Control with" shall have meanings correlative with the foregoing.
(9) Trustee
The word "Trustee" shall mean Old Colony Trust Company and also any successor Trustee which shall become such in the manner prescribed in Article XIII.
(10) Responsible Officer, Responsible Officers
The terms "Responsible Officer" or "Responsible Officers" when used with respect to the Trustee shall mean and include the chairman and vice-chairman of the board of directors, the president, every vice president, the secretary, the secretary of the board of directors, the treasurer, every assistant vice-president, every trust officer, the cashier, and any other officer or assistant officer of the Trustee with supervisory powers who customarily performs functions similar to those performed by any of the foregoing individuals or to whom any corporate trust matter is referred because of his knowledge of and familiarity with a particular subject.
(11) Bond, Bonds, Bondholder, Bondholders
The words "Bond" or "Bonds" shall include one or more, as the case may be, coupon Bonds, fully registered Bonds and temporary Bonds and, to the extent applicable, the coupons and claims for interest appertaining thereto.
The words "Bondholder" or "Bondholders" and the words "holder" and "holders" and other similar words or terms shall mean the bearer or bearers of coupon Bonds not registered as to principal, or not so registered otherwise than to bearer, the bearer or bearers of coupons and the registered owners of Bonds at the time outstanding hereunder, subject, however, to the extent applicable, to the provisions of 2.13 and 4.02.
The words "Registered Bond" or "Registered Bonds" shall mean one or more coupon Bonds registered as to principal otherwise than to bearer and one or more fully registered Bonds.
(12) Cancellation, Cancelled
The words "Cancellation", "Cancel" and "Cancelled", in respect of Bonds or coupons, shall, at the option of the Trustee, include any cus- tomary cremation approved by the Trustee, and any requirement of this Indenture for the delivery of cancelled Bonds shall be satisfied by the delivery of any customary cremation certificate so approved; any Bonds which are cancelled shall be delivered to the Company unless the Company shall in writing otherwise direct.
(13) Outstanding
The word "Outstanding" when used with reference to Bonds issued hereunder shall mean all Bonds theretofore certified and delivered hereunder, except
(a) Bonds theretofore paid or otherwise acquired by the Company and surrendered to the Trustee for Cancellation; or
(b) Bonds for the purchase, payment or redemption of which the necessary money shall have been deposited with, or shall then be held by, the Trustee, and in the case of Bonds called for redemption, if, and only if, notice of redemption shall have been duly given, or irrevocable power of attorney to give such notice shall have been delivered to the Trustee or other arrangements for so doing have been made satisfactory to the Trustee; or
(c) Bonds surrendered to the Trustee by the holders thereof in exchange for other Bonds of the same aggregate principal amount; or
(d) Bonds allegedly lost, stolen, or destroyed, and mutilated Bonds surrendered to the Trustee in lieu of or in substitution for which other Bonds shall have been issued hereunder, pursuant to 2.13.
(14) (excluding Company-owned Bonds)
The phrase "(excluding Company-owned Bonds)" occurring after or in connection with the mention of "Bonds Outstanding" or "Outstanding Bonds" shall be held to exclude therefrom in connection with the determination of the percentage of the aggregate principal amount of Bonds Outstanding or of the Bonds of a particular series Outstanding, Bonds owned by the Company, or by any other Obligor upon the Bonds, or by any Affiliate of the Company or of such other Obligor, except that for the purpose of determining whether the Trustee shall be protected in relying on any such action, direction, concurrence, or consent, only Bonds which the Trustee knows are so owned shall be so excluded. Bonds so owned which have been pledged in good faith may be regarded as Outstanding, regardless of the above phrase, if the pledgee shall establish to the satisfaction of the Trustee the pledgee's right to act as aforesaid in respect of such Bonds and that the pledgee is not an Affiliate of the Company or of any such other Obligor. In case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be fall protection to the Trustee.
(15) Bondholders' Notice; Bondholders' Request
The term "Bondholders' Notice" shall mean a written notice and the words "Bondholders' Request" shall mean a written request, in each case filed with and satisfactory to the Trustee, from Bondholders (whose ownership of Bonds shall, from time to time, if and when requested by the Trustee, be established by proof satisfactory to the Trustee) of such part, if any, of Bonds as may be specifically provided for in respect of a particular matter by any of the provisions hereof, or, in respect of any matter as to which no such specific provision is made herein, of not less than:
(a) in respect of each such notice, ten per cent (10%) in prin- cipal amount of all Bonds Outstanding (excluding Company-owned Bonds) at the time of such notice, and
(b) in respect of each such request, twenty-five per cent (25%) in principal amount of all Bonds Outstanding (excluding Company-owned Bonds) at the time of such request,
setting forth to the satisfaction of the Trustee, in respect of each such notice, particulars of any existing default and of the continuance thereof, and of all, if any, other matters covered by such notice, and, in respect of each such request, particulars of all matters covered by such request, and in the latter case also specifying any action requested or contemplated, under this Indenture, or any Bond, with respect to which such request was filed.
(16) Lien of this Indenture, Lien hereof
The terms "Lien of this Indenture" and "Lien hereof" shall mean the lien created by this Indenture (including the after-acquired property clause hereof) and the lien created by any subsequent conveyance or delivery to the Trustee or otherwise created, effectively constituting any property a part of the security held by the Trustee upon the terms and trust and subject to the covenants, conditions, and uses specified in the Indenture.
(17) Excepted Property
The term "Excepted Property" shall mean property of the character described as included in paragraphs A to J, both inclusive, of the foregoing description of the property conveyed by these presents to the Trustee.
(18) Permitted Encumbrances
The term "Permitted Encumbrances" shall mean, as of any particular time, any of the following:
(a) the Lien of this Indenture upon the Mortgaged Property and all liens and encumbrances thereon junior hereto;
(b) liens for taxes, assessments, or governmental charges not then delinquent, on the Mortgaged Property, or any part of it, or, if delinquent, in the course of contest in good faith;
(c) liens arising out of proceedings in court in course of con- test in good faith;
(d) liens or charges, if any, incidental to current construction or current operation;
(e) liens securing indebtedness neither payable by, nor assumed or guaranteed by, the Company, nor on which it customarily pays interest, existing either at the date of the execution of these presents as to the Mortgaged Property, or, as to property thereafter acquired, at the time of acquisition by the Company, upon real estate or right in or relating to real estate acquired by the Company for substation, transmission line, distribution line, or right of way purposes;
(f) defects in title to rights of way for transmission and dis- tribution lines over public or private property;
(g) easements, rights of way, licenses, restrictions, exceptions, reservations, or other interests in or against any property and/or rights of way of the Company created, reserved, or existing for the purpose of public highways, private roads, railroads, railroad sidetrack, transmission and distribution lines, telegraph and telephone lines, and other like purposes which do not materially impair the use of such property and/or rights of way for the purposes for which such property and/or right of way are held by the Company;
(h) zoning ordinances and other similar rights reserved to or vested in any municipality, or official, commission, or board thereof, or other public authority to control or regulate the property of the Company provided that the use of such property by the Company for the purposes for which it is held by the Company is not materially interfered with thereby;
(i) rights reserved to or vested in the United States of America or any state, municipality, or public authority by the terms of any franchise, grant, license, or permit or by any provision of law to take, purchase or recapture, or to designate a purchaser for, any of the properties of the Company;
(j) rights reserved to or vested in the United States of America or any state, municipality, or public authority to use, control or regulate any property of the Company;
(k) any obligations or duties of the Company to the United States of America or any state, municipality, or public authority with respect to any franchise, grant, license, or permit.
(19) Directors' Resolution
The term "Directors' Resolution" shall mean a resolution of the Board of Directors or of the Executive Committee of the Company filed with the Trustee, certified by the Clerk or the Assistant Clerk of the Company to have been duly adopted by said Board or Committee and to be in full force and effect on the date of its certification.
(20) Officers' Certificate
The term "Officers' Certificate" shall mean a certificate or opinion filed with the Trustee complying with the provisions of 17.02, signed by the President or a Vice President and the Treasurer or an Assistant Treasurer of the Company.
(21) Engineer
The word "Engineer" shall mean an individual who is an engineer, appraiser, or other expert, or a co-partnership or a corporation engaged in such business, who or which, unless required to be independent, may be regularly employed by the Company.
(22) Accountant
The word "Accountant" shall mean any accountant or accounting firm, who or which need not be certified, licensed, or public, and, unless required to be independent, may be an officer or employee of the Company.
(23) Engineer's Certificate, Accountant's Certificate
The terms "Engineer's Certificate" and "Accountant's Certificate" shall mean a certificate conforming to the requirements of 17.02 signed by an Engineer or by an Accountant, as the case may be, appointed and paid by the Company and approved by the Trustee in the exercise of reasonable care.
With respect to the Cost of Property Additions or of Property Retirements included in any Accountant's Certificate which have been included in a previous Accountant's Certificate, the Accountant making such Certificate may rely upon the figures as to Cost contained in such previous Certificate.
(24) Independent
The word "Independent" when applied to any engineer, appraiser, accountant, or other expert shall mean a person who (1) is in fact independent, (2) does not have any substantial interest, direct or indirect, in the Company or in any other Obligor upon the Bonds or in any Affiliate of the Company or of any such other Obligor, and (3) is not connected with the Company or any such other Obligor or any Affiliate of the Company or of any such other Obligor as an officer, employee, promoter, underwriter, trustee, partner, director, or person performing similar functions. The Trustee is entitled to require an Officers' Certificate, satisfactory to it, as to the independence of any Engineer or Accountant.
(25) Independent Engineer's Certificate, Independent Accountant's Certificate
The terms "Independent Engineer's Certificate" and "Independent Accountant's Certificate" shall mean a certificate corresponding with an Engineer's Certificate or an Accountant's Certificate, respectively, in all respects except that the Engineer or the Accountant shall be Independent. Each such Certificate shall state that the signer thereof has read the definition of the word "Independent" herein and that the signer is independent within the meaning of that definition.
Whenever the Company is required to furnish to the Trustee pursuant hereto an Independent Engineer's Certificate or an Independent Accountant's Certificate, the signer thereof must be appointed by the President or Treasurer of the Company and approved by the Trustee in the exercise of reasonable care.
(26) Opinion of Counsel
The term "Opinion of Counsel" shall mean a written opinion complying with the provisions of 17.02 filed with the Trustee by counsel (who may be counsel or of counsel to the Company) selected by the Company and approved by the Trustee, or selected by the Trustee in the exercise of reasonable care.
(27) Evidence of Approval by Trustee
The acceptance by the Trustee of any one of the foregoing Cer- tificates or of an Opinion of Counsel shall be sufficient evidence that the signer or signers have been approved by, or are satisfactory to, the Trustee, as the case may be.
(28) Fundable Property
The term "Fundable Property" shall mean property of the character hereinafter described, but excluding Excepted Property, which the Company shall (1) acquire or construct after May 31, 1954 (including, if in process of construction, any property in so far as actually constructed subsequent to said May 31), (2) be entitled by its corporate powers, franchises, or other legal rights to own, possess, operate and use in the ordinary conduct of its business, and (3) have good and marketable title to, subject only to Permitted Encumbrances, and subject to, or to be immediately made subject to, the Lien of this Indenture; provided however that Fundable Property shall also include, to the extent permitted by Article XIV hereof, property otherwise complying with this definition of Fundable Property acquired and held by the Company pursuant to any merger or consolidation permitted by 14.01; provided further that in case of property acquired or constructed in connection with hydro-electric works for the maintenance and operation of which the Company shall not have obtained a license under the Federal Power Act or other similar legislation, the Company shall be deemed to have complied with the requirements of clause (2) above in respect of such property if an Opinion of Counsel shall be filed with the Trustee covering such situation, in the manner specified in subparagraph (j) of 3.08 hereof; and provided further that if any property at any time subject to the Lien hereof shall be or shall have been retired from service subsequent to May 31, 1954, and shall consist solely of materials or supplies usable as components in the construction of electric utility or steam plant, and the Cost thereof (less any credit for salvage value actually received) shall have been charged to the depreciation reserve, the reserve for contributions to extensions, or the surplus account of the Company and such property shall thereafter be put into service again and shall otherwise comply with this definition of Fundable Property, it shall be held to be Fundable Property even though originally acquired prior to said May 31, 1954.
Such property shall consist only of property (including additional or partly completed construction work) used or planned to be used in the business of operating the Company's electric utility and steam systems and acquired or constructed by the Company and properly charged to its electric utility and steam accounts (including work-in-progress accounts) in accordance with any system of accounting required by law, or by regulatory or other public authorities having jurisdiction, to be followed by the Company or, in the absence of such requirement, in accordance with sound accounting practice then current. Property held jointly with others shall be includable in such property provided that only the right, title, and interest of the Company therein shall be included in determining Cost or Fair Value. Such property, however, shall not include
(i) leasehold interests, or any extensions, improvements, or additions of or to any property in which the Company shall hold only a leasehold interest unless the Company shall have the right under the provisions of the agreement creating said leasehold interest to remove such extensions, improvements, or additions on or prior to the expiration of the term thereof;
(ii) real estate unless owned in fee simple or rights in real estate unless owned in perpetuity;
(iii) going concern value or good will, as such.
No portion of any property shall be excluded by the requirements of this subdivision for the reason that any other portion of such property would be excluded by said requirements, but the exclusion of such other portion shall be considered in determining the Cost or Fair Value of the unexcluded portion.
(29) Cost
The word "Cost" shall mean
(a) as to any property owned by the Company on May 31, 1954 the book value thereof on the books of the Company as of that date without deducting therefrom applicable reserves for depreciation and/or retirements as of that date;
(b) as to any property acquired or constructed after May 31,
1954, the sum of (i) any cash expenditures made or agreed to be made
by the Company therefor; (ii) the fair market value in cash (as of
the date of delivery) of any securities or other property delivered
by the Company as consideration therefor; (iii) whichever shall be
the lesser of (1) an amount equivalent to the principal amount of any
indebtedness (whether or not assumed by the Company) secured by prior
lien upon such property outstanding at the time of, or reserved by
the vendor or created by the Company, at the time of, the acquisition
of such property or (2) the aggregate amounts (exclusive of premium
or interest) expended by the Company to pay off said indebtedness or
to release the property from said lien; (iv) in respect of property
constructed by or for the Company, such allowances or charges for
interest during construction, taxes, engineering, legal expenses,
superintendence, casualty insurance, and other items during
construction as in the opinion of the signers of any Certificate
hereunder wherein the Cost of such property is required to be stated,
shall be proper under sound accounting practice then current in
respect of the particular property specified in such Certificate; (v)
general overhead expenses to the extent that they are properly
chargeable under sound accounting practice then current to the cost
of the property, whether acquired or constructed by the Company; and
(vi) the amount of any unsecured indebtedness (other than
indebtedness described under (iii) above) issued or assumed by the
Company as consideration for the acquisition or construction of such
property, provided however that in any case where property shall have
been acquired by the Company, without the payment of cash, property,
or securities or the issue, assumption, or payment of indebtedness,
no determination of Cost shall be required, and the word Cost shall
in any such case mean an amount equal to the Fair Value thereof at
the time of acquisition by the Company;
(c) as to any materials and supplies at any time subject to the Lien hereof which shall have been or shall be retired from service by the Company subsequent to May 31, 1954 and the Cost thereof (less any credit for salvage value actually received) charged to the depreciation reserve, the reserve for contributions to extensions or the surplus account of the Company, and which shall subsequently be put into service again, the Fair Value of such property at the time when again put into service, or the value at which such property was previously retired, whichever shall be lower.
(d) as to any property owned by a Corporation merging or consolidating with the Company pursuant to the provisions of Article XIV, the book value thereof less any reserve for depreciation applicable thereto as recorded on the books of said Corporation at the date of said merger or consolidation.
In determining Cost in cases in which property acquired consists partly of Fundable Property and partly of other property or in cases in which Cost is not allocated between various items of property, Cost may be allocated to the various parts or items of property in any manner which the signers of the Certificate in which the Cost of such parts or items is required to be stated shall deem reasonable and in accordance with sound accounting practice.
In the event that the Company shall acquire an electric utility system or electric utility systems as a whole without the payment of separate or distinct consideration for the acquisition of any rights or intangible property acquired simultaneously therewith or as a part thereof, the term Cost as applied to the Fundable Property so acquired may be held to include such part of the total consideration paid therefor as shall be both reasonable and proportionate, but shall be held to exclude any value based on going concern value or good will.
(30) Fair Value
The term "Fair Value" of property shall mean the price which a willing buyer thereof would pay to a willing seller at private sale, taking into consideration its location, condition, and adaptability for the purposes for which it is designed, but not exceeding the reproduction cost new of such property less observed depreciation, which reproduction cost may, for property under construction, include estimates for items during construction described in clauses (iv) and (v) of subparagraph (b) of the definition of Cost, but no other items of intangible value.
Unless otherwise expressly provided, the term "Fair Value" when applied to Property Additions shall mean the Fair Value to the Company of such Property Additions at the date of the acquisition thereof by the Company and the term "Fair Value" in all other cases shall apply as of the date of the Certificate to be furnished in respect thereof.
(31) Property Additions
The term "Property Additions" shall mean Fundable Property which is to be Made the Basis for Action or Credit hereunder, and shall include Fundable Property purchased, constructed, or otherwise acquired by the Company to renew, replace, or to substitute for old, worn out, retired, discontinued or abandoned property or property otherwise no longer used or useful, the retirement of which has been charged against the depreciation reserve, the reserve for contributions to extensions, or the surplus account of the Company, but shall exclude any property made or constructed by the Company in keeping or maintaining the Mortgaged Property in good repair, working order and condition, the cost of which is not properly chargeable to electric utility or steam plant account.
(32) Property Retirements
The term "Property Retirements" shall mean any of the property of the Company of the character described in the final paragraph of the description of Fundable Property, but excluding Excepted Property, which shall have become worn out or become permanently unserviceable, or shall have been lost, sold, destroyed, abandoned, surrendered on lapse of title, or retired from service for any reason, or shall have permanently ceased to be used or useful in the business of the Company, but in each case only to the extent that the Cost (less any credit for salvage value actually received) thereof has been previously charged to the depreciation reserve, the reserve for contributions to extensions, or the surplus account of the Company, subsequent to May 31, 1954, or in the event that such property shall have been sold, to the extent that the Cost thereof, or any balance of the Cost thereof, not charged as above provided, shall have been credited to the plant and equipment (devoted to utility operation) account of the Company, subsequent to May 31, 1954.
(33) Net Property Addition
The term "Net Property Additions" shall mean the total of all Property Additions less the total of all Property Retirements.
(34) Made the Basis for Action or Credit hereunder
The phrase "Made the Basis for Action or Credit hereunder" shall mean when applied to Property Additions, Property Retirements or Net Property Additions, any thereof
(i) which have been made the basis for the withdrawal of moneys from the hands of the Trustee;
(ii) which shall have been made the basis for any credit to the Improvement Fund, or to a Sinking Fund, Maintenance and Renewal Fund, Improvement Fund, or any analogous fund established in accordance with the provisions of any Supplemental Indenture; or
(iii) which have been made the basis for the issue of additional Bonds.
(35) Earnings Certificate
The term "Earnings Certificate" shall mean an Officers' Certificate (which, unless one of the Officers signing the same is an Accountant, shall also be signed by an Accountant) dated not more than thirty (30) days prior to the date of the application to the Trustee to which the Earnings Certificate shall pertain, setting forth in reasonable detail
(a) the net earnings available for interest, computed as here- inafter provided, of the Company for a period of twelve (12) con- secutive calendar months within the fifteen (15) calendar months immediately preceding the first day of the month in which the said application to the Trustee is made;
(b) the annual interest charges on (i) Bonds Outstanding at the date of said Certificate, except Bonds for the payment, retirement, or redemption of which Bonds to be issued pursuant to such application are to be issued, (ii) Bonds proposed to be issued pur- suant to such application and (iii) any obligations (whether or not the payment of the principal or of the interest thereon is assumed by the Company) secured by or proposed to be secured by any mortgage, charge, encumbrance or lien upon the Mortgaged Property superior to or on a parity with the Lien of this Indenture;
(c) that such net earnings available for interest are at least twice the aggregate of the annual interest charges on all said indebtedness; and
(d) that such net earnings available for interest have been computed as provided in this Section.
The net earnings available for interest in any such twelve (12) month
period shall be computed on an accrual basis in accordance with sound
accounting practice then current by deducting from total operating revenues
for such period the total operating expenses for such period, including (a)
all taxes, other than Federal income taxes, excess profits taxes, and any
other taxes imposed on or measured by gross or net income or earnings or
undistributed earnings or income or surplus, (b) all charges on the
Company's books to expense or income to provide for depreciation (but
excluding charges to income for the amortization of plant and equipment
(devoted to utility operation) account or amounts transferred therefrom),
(c) charges for maintenance, and (d) interest, other than interest on any
Bonds, on obligations secured by any mortgage, charge, encumbrance or lien
upon the Mortgaged Property superior to or on a parity with the Lien
hereof, and on any debentures, notes or other evidences of indebtedness for
the payment, retirement or redemption of which, or in exchange for which,
Bonds to be issued pursuant to such application are to be issued, but
excluding, however, any charges or provision for the Improvement Fund or
for any Sinking Fund, Maintenance and Renewal Fund, Improvement Fund or
analogous fund established pursuant to the terms of any Supplemental
Indenture for the retirement of debt or for the amortization of any debt
discount and expense during said period, and also excluding any profits and
losses from the sale or other disposition of capital assets made in said
period.
If any property of the Company owned by it at the time of making any Earnings Certificate shall consist of a plant or system which shall have been acquired during or after any period for which net earnings are to be computed, the actual net earnings or net losses of such property (computed in the manner specified in the definition for the computation of the net earnings of the Company, but eliminating all intercompany items, if any) during such period, or such part of such period as shall have preceded the acquisition thereof, to the extent that the same have not otherwise been included, shall be treated as the net earnings or net losses of the Company for the purposes of an Earnings Certificate. The net earnings or net losses of any property of the Company consisting of a plant or system which shall have been disposed of by the Company during or after any period for which net earnings are to be computed shall not be treated as any part of the net earnings of the Company for the purposes of an Earnings Certificate.
If the Company shall be consolidated or merged into another Corporation, or if another Corporation shall be merged into the Company in accordance with the provisions of Article XIV hereof at any time within fifteen (15) months prior to the first day of a month in which an application to the Trustee to which an Earnings Certificate shall pertain shall be made, the said Earnings Certificate shall include as a part of the net earnings of the Company the net earnings of the said other Corporation for a period identical with the period for which the Company's net earnings shall be determined, computed as hereinbefore in this subparagraph provided, except that if said other Corporation shall have issued indebtedness secured by a first or other mortgage pledge lien or encumbrance upon its property and maturing more than twelve (12) months from the date of the issue thereof which shall be Outstanding at the time of the making of such Earnings Certificate, and which is not to be paid retired or redeemed with the proceeds of, or exchanged for, the Bonds to be issued pursuant to such application such indebtedness shall be considered for the purpose of said Earnings Certificate as if it consisted of Bonds issued hereunder, and thereafter in determining the net earnings of the Corporation resulting from such merger or consolidation for the purposes of any subsequent Earnings Certificate any such indebtedness shall likewise be considered as if it consisted of Bonds issued hereunder.
(36) Commission Orders
The term "Commission Orders" shall mean duly and properly certified copies (except in cases where until such copies can be made available it is customary to accept temporarily telegrams or like informal written evidences; and in any such cases duly and properly certified copies as soon as available) delivered to the Trustee of all orders consents, permissions, or authorizations issued by the Department of Public Utilities of Massachusetts, or by the Securities and Exchange Commission, or by any Board, Department or official succeeding in whole or in part to the duties of either, or by any governmental agency which shall then have jurisdiction over the issue, sale, or negotiation of any Bonds issuable hereunder, ordering, consenting to, permitting or authorizing to the full extent required by law the issue, sale, or negotiation of the particular Bonds in respect of which said orders, consent, permissions, or authorizations are legally necessary.
(37) Published Notice
The term "Published Notice" shall mean a notice given by publication not less than once a week for not less than two (2) successive weeks (or with such other frequency and duration, if any, as may be specifically provided for in respect of a particular publication by any of the provisions hereof) in at least two (2) daily newspapers printed in the English language, published and of general circulation, one being in the City of Boston, Massachusetts.
1.03 For the purpose of evidencing to the Trustee Net Property
Additions from time to time available as a basis for the withdrawal of
moneys from the hands of the Trustee pursuant to 3.06 or 8.03(b), the issue
of additional Bonds pursuant to 3.08, or as a basis for credit against the
annual Improvement Fund obligation payable under 6.01 or against any
obligation under any analogous fund or under any Sinking Fund established
by any Supplemental Indenture for the benefit of any Bonds issuable
hereunder, the Company shall file with the Trustee an Officers' Certificate
(hereinafter called Certificate of Available Net Property Additions)
conforming to the requirements of 17.02 substantially in the following
form:
WESTERN MASSACHUSETTS ELECTRIC COMPANY
To Old Colony Trust Company, Trustee Under Indenture dated as of August 1, 1954.
Certificate No. of Available Net Property Additions
The undersigned, in conformity with the provisions of the above described Indenture, hereby certify in connection with the application of the Company dated , 19
[for the issue of additional
(here describe the issue of Bonds applied for) in the aggregate principal
amount of , pursuant to 3.08 thereof]
(or)
[for the withdrawal by the Company of cash in the sum of $ (here insert the amount of cash desired to be withdrawn) held by the Trustee pursuant to 3.06 or 8.03(b) thereof] (omit inapplicable section)
(or)
[for credit in the amount of $ against the Improvement Fund pursuant to 6.01 thereof (if credit be sought against the obligation of any Sinking Fund, Maintenance and Renewal Fund, Improvement Fund or analogous fund, the name of such fund should be substituted) payable by the Company in the sum of $ on , 19 , pursuant to section thereof] (omit whichever purpose is inapplicable) as follows:
A. That the Cost or Fair Value, whichever is less, of all Property Additions made by the Company subsequent to May 31, 1954, and on or prior to , 19 (here insert the terminal date specified in the last previous Certificate of Available Net Property Additions) is $____________________________
(Omit Item A in first Certificate)
B. That the Cost or Fair Value, whichever is less, of all Property Additions made by the Company subsequent to , 19 , (here insert in the first Certificate May 31, 1954, and in each subsequent Certificate the date inserted in the space in Item A) and on or prior to , 19 , (here insert a date not more than 60 days prior to the date of the application hereinbefore referred to) is $_________________________________
C. Constituting the Cost or Fair Value, whichever is less, of all Property Additions $_____________________
(Item A plus Item B)
D. That the Cost of all Property Retirements made by the Company after May 31, 1954, and on or prior to , 19 , (here insert the date inserted in the second space in Item B) is $________________________
E. That the total of all Net Property Additions heretofore made the basis for the withdrawal of money from the hands of the Trustee pursuant to the provisions of 3.06 or of 8.03(b), or the issue of additional Bonds pursuant to 3.08, or irrevocably allocated for credit against the Improvement Fund pursuant to the provisions of 6.01, or (here insert the name of any Sinking Fund, Maintenance and Renewal Fund, Improvement Fund or analogous fund created by Supplemental Indenture against the obligations of which Net Property Additions have been heretofore credited) is $____________________________
F. Leaving as Available Net Property Additions $____________________________
(Item C less the total of Items D and E)
G. That the Available Net Property Additions now made the basis for the application in connection with which this Certificate is filed is $
Dated: , 19
ARTICLE II.
Form, Execution, Registration and Exchange of Bonds
2.01 At the option of the Company the Bonds issued hereunder may be issued from time to time in any number of different series. All Bonds of the same series shall be identical in tenor and effect, except for number and for necessary or proper variations between temporary Bonds, coupon Bonds, and fully registered Bonds, or Bonds of different denominations, and in the case of Bonds of serial maturity, in date of maturity, rate of interest, and price, terms, and conditions of redemption. The form of each series shall be distinguished by such designation or descriptive title as the Board of Directors or the Executive Committee of the Company may select for such series and as may be approved by the Trustee and each Bond issued hereunder shall bear upon the face thereof the designation or descriptive title so selected for the series to which it belongs.
All coupon Bonds of the same series shall bear the same date. Each fully registered Bond shall bear interest from its date and shall be dated as of the interest payment date next preceding the date of issue, unless issued on the date as of which the Bonds of that series were originally issued, or on an interest payment date, in either of which cases it shall bear interest from and shall be dated as of such date; provided however - that if the Company shall be in default in the payment of interest on any series of Bonds at the time of the issue or transfer of a fully registered Bond of such series, such fully registered Bond if issued in exchange for a coupon Bond or Bonds of the same series surrendered together with all unpaid coupons appertaining thereto, shall be dated as of the date of the commencement of the period for which such interest shall be in default.
Upon the issue of any fully registered Bond in permanent form the Trustee may reserve unissued a coupon Bond or coupon Bonds of the same series in an aggregate amount equal to the face of such fully registered Bond and in such event shall endorse on such fully registered Bond the number or numbers of the coupon Bond or Bonds so reserved, but, in lieu of reserving coupon Bonds as in this Section above provided, the Trustee may endorse on each such fully registered Bond a number or numbers such as would have been endorsed thereon if coupon Bonds had been reserved against each such Bond as hereinabove provided.
Coupon Bonds, other than the 2.95% Bonds and the coupons thereto appertaining, shall be substantially in the form heretofore recited for the 2.95% Bonds in coupon form, with such omissions, variations, and insertions as are permitted by this indenture, and the fully registered Bonds of any such series shall follow the form of the coupon Bonds of that series with only such changes as are necessitated by the change from a coupon Bond with appurtenant coupons to a duly registered Bond of the same issue.
2.02 The permanent 2.95% Bonds shall be substantially in the forms hereinbefore set forth, with such changes therein as shall be approved by the Company and the Trustee, shall be designated as the First Mortgage Bonds, Series A, 2.95%, due October 1, 1973, of the Company, shall be issuable hereunder in the aggregate principal amount of eleven million dollars ($11,000,000) and no more except as provided in 2.13 hereof, if in coupon form shall be dated as of August 1, 1954, shall mature October 1, 1973, shall bear interest at the rate of two and ninety-five hundredths percentum (2.95%) per annum from the date thereof to the date of payment, payable semi-annually on the first days of April and October in each year (the principal, premium, if any, and the interest thereon being payable in coin or currency of the United States of America which at the time of payment is legal tender for public and private debts), shall be issued in coupon form registerable as to principal only, in the denomination of one thousand dollars ($1,000) each, and in fully registered form in denominations of one thousand dollars ($1,000) and any multiple thereof, and shall be redeemable at the times and in the manner provided in Article V and Article VI hereof.
The Bonds of every series other than the 2.95% Bonds shall be printed in the English language and shall (1) bear such date, (2) be payable as to both principal and interest in such coin or currency and at such time or times (which shall include the right to issue serial Bonds) and at such place or places, (3) bear interest at such rate, (4) be in such denominations, (5) be in fully registered form or be coupon Bonds registerable as to principal or not, (6) contain such provisions and con- ditions, if any, with respect to exchangeability for Bonds of another series, tax exemption, tax reimbursements redemption, sinking, amorti- zation, improvement, renewal, maintenance, or other fund, or limitation of the aggregate principal amount of Bonds of such series issuable, (7) be entitled to be convertible at the option of the holders into other securities so far as permitted by law, and (8) have such other charac- teristics not in conflict with the terms hereof as the Board of Directors or the Executive Committee of the Company shall determine with respect to the Bonds of such series prior to the issue of any of the Bonds thereof. The Bonds of any series may bear such legends or other variations in form as may be required to comply with the rules of any stock exchange or to conform to any usage or law.
The forms of Bonds of such other series and the applicable charac- teristics referred to in (6), (7) and (8) in this Section shall be set forth in the Supplemental Indenture authorizing the issue of said Bonds.
2.03 All Bonds from time to time issued hereunder shall be executed in the name and on behalf of the Company, and under its corporate seal impressed or imprinted thereon, by its President or a Vice President and its Treasurer or an Assistant Treasurer or by such other form of execution permitted by law as may be prescribed by a Directors' Resolution and shall be expressed to take effect as sealed instruments. In case any officer of the Company who shall have signed or sealed any Bond shall cease to be such officer of the Company before the Bond so signed or sealed shall have been actually delivered, such Bond, nevertheless, may be delivered and issued with the same force and effect as though the person or persons who had signed or sealed such Bond had not ceased to be an officer or officers of the Company. Furthermore, any Bond may be signed and sealed on behalf of the Company by such persons as at the actual date of the execution of such Bond shall be the proper officers of the Company, although at the date of such Bond such persons shall not have been officers of the Company. The coupons to be attached to any coupon Bond shall be authenticated by the facsimile signature of the present or any future Treasurer of the Company. The Company may adopt and use for that purpose the facsimile signature of any person who shall have been such Treasurer notwithstanding the fact that he may not have been such Treasurer at the date of such Bond or that he may have ceased to be such Treasurer at the time when such Bond shall be actually delivered.
2.04 Bonds when executed shall be delivered to the Trustee for certification by it; and the Trustee shall certify and deliver said Bonds as in this Indenture provided and not otherwise. Before certifying and delivering any coupon Bond, the Trustee shall detach and Cancel all coupons thereto appertaining then matured representing installments of interest on said Bond which have been paid or for which payments shall have been provided, except that coupon Bonds issued upon exchanges shall bear such coupons as may be necessary in order that no gain or loss of interest shall result from any exchange of a fully registered or temporary Bond for a coupon Bond or the exchange or substitution of a new Bond for a Bond mutilated or purportedly lost, destroyed, or stolen.
No Bond and no coupon thereto appertaining shall be or become valid or obligatory for any purpose or entitled to any benefit under this Indenture until the Trustee's certification thereupon shall have been signed by the Trustee, and such certification by the Trustee upon any Bond shall be conclusive evidence that such Bond has been duly certified and delivered hereunder and is valid, obligatory, and entitled to the benefit of this Indenture.
2.05 Until Bonds in permanent form are ready for delivery, there may be issued, certified and delivered, in lieu thereof and subject to the same provisions, limitations, and conditions, one or more Bonds of any series authorized to be issued under this Indenture in temporary form, which may be typewritten, printed, or lithographed, may be of any authorized denomination or denominations satisfactory to the Company and approved by the Trustee, and otherwise shall be substantially of the tenor of the Bonds of such series, with or without one or more coupons, in fully registered form or in coupon form, and with or without provision for the registration thereof as to principal, and with or without a recital of specific redemption prices, and with such other omissions and with such other insertions and variations as the officers executing such Bonds may determine. The temporary Bonds shall be entitled to the security and benefit of this Indenture to the same extent as permanent Bonds of the same series and maturity certified and delivered hereunder. The Company shall without unreasonable delay, at its own expense, prepare, execute and deliver to the Trustee, and thereupon the Trustee, upon presentation and surrender of the temporary Bonds with all unmatured coupons, if any, appertaining thereto, shall certify and deliver in exchange therefor, engraved or lithographed or printed permanent Bonds of the same series and for the same aggregate principal amount. Temporary Bonds so surrendered for exchange shall be considered as having been surrendered for Cancellation. Upon such exchange, which the Company shall make at its own expense and without making any charge therefor, the Trustee shall forthwith Cancel the surrendered temporary Bonds.
2.06 The Trustee is hereby authorized by the Company to certify all Bonds issued hereunder by the Company which are presented to it for certification by the Company. The Trustee is also hereby appointed Registrar of the Company and hereby authorized and empowered to register all Bonds in fully registered form issued by the Company, and the transfers thereof, to certify new Bonds in fully registered form issued by the Company pursuant to such transfers, to register, transfer, and discharge from registry the principal of all coupon Bonds issued hereunder presented to it by the bearers or registered owners thereof, for such register, transfer, or discharge, and to make exchanges of Bonds of any one series of any denomination for an equal principal amount of Bonds of the same series of any other denomination, of fully registered Bonds for coupon Bonds of the same series, of coupon Bonds for fully registered Bonds of the same series, of temporary Bonds for permanent Bonds of the same series, and of mutilated Bonds and/or coupons for Bonds or coupons issued in substitution therefor.
2.07 The Company shall keep at the principal office of the Registrar, and at such other offices or agencies of the Trustee or of the Company as may be specified in the Bonds of any series, or in any Supplemental Indenture securing them, books for the registration, and transfer, and for the exchange of fully registered Bonds, and for the registration, transfer, and discharge from registry, and for the exchange of coupon Bonds issued hereunder.
The Company shall also keep at any other office or agency of the Trustee or of the Company required to be maintained for such purpose in order to comply with the regulations of any stock exchange on which the Bonds may at any time be listed, like books to the extent necessary to comply with such regulations.
2.08 The bearer of any coupon Bond issued hereunder which is expressed to be registerable as to principal may have the ownership thereof registered as to principal at the principal office of the Trustee (or at such other agency as may be provided in respect of a particular series) and such registration shall be noted on the Bond. After such registration no transfer of said Bond shall be valid unless made at said office or agency by the registered owner in person or by his duly authorized attorney and similarly noted on the Bond; but such Bond may be discharged from registration by being in like manner transferred to bearer, and thereupon transferability by delivery shall be restored, but such Bond may again and from time to time be registered or transferred as before. Such registration, however, shall not affect the negotiability of the coupons, but every such coupon shall continue to be transferable by delivery merely, and shall remain payable to bearer, and payment thereof to bearer shall fully discharge the Company in respect of the interest therein mentioned, whether or not the Bond be registered as to principal.
The registered owner of any fully registered Bond issued hereunder may transfer the ownership of said Bond at the principal office of the Trustee (or at such other agency as may be provided in respect of a particular series) by surrendering said Bond for transfer accompanied by a written instrument of transfer signed by him or his duly authorized attorney, all in form satisfactory to the Trustee or to such agent, and thereupon the Company shall issue and the Trustee shall certify and register a new fully registered Bond or new fully registered Bonds of the same series and maturity date as the Bond or Bonds surrendered and in the same aggregate principal amount in the name or names designated by the transferor. The fully registered Bond or Bonds so surrendered shall be considered as having been surrendered for Cancellation and shall be forthwith Cancelled by the Trustee.
2.09 The 2.95% Bonds in fully registered form may be exchanged at the principal office of the Trustee for a like aggregate principal amount of 2.95% Bonds in fully registered form of other denominations and, upon surrender to the Trustee for exchange of one or more of such 2.95% Bonds, the Company shall execute and the Trustee shall certify and shall deliver in exchange therefor a like aggregate principal amount of such 2.95% Bonds of other denominations. Bonds so surrendered for exchange shall be considered as having been surrendered for Cancellation and shall be forthwith Cancelled by the Trustee.
The 2.95% Bonds in fully registered form may also be exchanged for 2.95% Bonds in coupon form of a like aggregate principal amount, and upon surrender at the principal office of the Trustee of any such Bond or Bonds accompanied by a written instrument of transfer signed by the registered owner thereof or by his duly authorized attorney, in form satisfactory to the Trustee, the Company shall issue and the Trustee shall certify (unless coupon Bonds previously certified shall be available) and deliver in exchange therefor 2.95% Bonds in coupon form in a like aggregate principal amount, with such coupons annexed thereto as may be necessary in order that no gain or loss of interest shall result from such exchange.
The 2.95% Bonds in coupon form may be exchanged for 2.95% Bonds in fully registered form of a like aggregate principal amount, and upon surrender at the principal office of the Trustee of any such Bond or Bonds with all unpaid coupons appertaining thereto, the Company shall issue and the Trustee shall certify and deliver in exchange therefor one or more fully registered 2.95% Bonds in a like aggregate principal amount in the name or names designated by the holder of the coupon Bond or Bonds so surrendered.
2.10 If and to the extent that the Company by a Supplemental Indenture shall so provide, either at the time of the creation of any series of Bonds other than the 2.95% Bonds, or at any time thereafter
(a) Bonds of any series other than the 2.95% Bonds may, at the option of the holders thereof and upon surrender thereof to the Trustee, or otherwise as in said Supplemental Indenture provided, be exchanged for Bonds of the same or of a different series and maturity, of the same aggregate principal amount, but of different authorized denomination or denominations;
(b) Coupon Bonds of any series other than the 2.95% Bonds may, at the option of the holder thereof and upon the surrender thereof to the Trustee or otherwise as in said Supplemental Indenture provided, be exchanged for fully registered Bonds without coupons of the same or of a different series and maturity, of the same aggregate principal amount, and of the same or of a different authorized denomination or denominations; and
(c) Fully registered Bonds without coupons of any series other than the 2.95% Bonds may, at the option of the registered owners thereof and upon the surrender thereof to the Trustee or otherwise as in said Supplemental Indenture provided, be exchanged for coupon Bonds of the same or of a different series and maturity, of the same or of a different authorized denomination or denominations.
All Bonds and coupons so surrendered shall be considered as having been surrendered for Cancellation, shall be forthwith Cancelled by the Trustee.
2.11 For any exchange of Bonds, including the 2.95% Bonds, for Bonds of another denomination or of coupon Bonds for fully registered Bonds, or of fully registered Bonds for coupon Bonds, or for any transfer of a fully registered Bond, the Company, at its option, may require the payment of a sum sufficient to reimburse it for any stamp tax or other governmental charge incident thereto, and, in addition thereto, a further sum not exceeding two dollars ($2) for each new Bond, if any, issued upon such exchange or transfer. No charge except for taxes or governmental charges shall be made against the holder for the registration or transfer of coupon Bonds.
2.12 The Bonds shall be treated as negotiable, subject to the pro- visions for registration and transfer therein and in this Indenture con- tained, and the coupon Bonds, except while registered as to principal otherwise than to bearer, shall pass by delivery; registration of any coupon Bond as to principal shall not affect the negotiability of its coupons, which shall remain payable to bearer, be treated as negotiable, and pass by delivery whether or not the Bond to which any coupon appertains is registered. The Company, the Trustee and any paying agent may deem and treat the bearer of any coupon Bond, or of any temporary Bond with or without coupons, which shall not at the time be registered as to principal, and the bearer of any coupon for interest appertaining to any Bond, whether or not such Bond shall be registered, as the absolute owner of said Bond or coupon, as the case may be, for the purpose of receiving payment thereof or on account thereof and for all other purposes whatsoever, whether or not such Bond or coupon shall be overdue, and neither the Company nor the Trustee, nor any paying agent shall be affected by any notice to the contrary.
As to all coupon Bonds registered as to principal and all fully reg- istered Bonds, temporary or permanent, the person in whose name the same shall be registered shall be deemed and treated as the absolute owner thereof for all purposes of this Indenture, and payment of or on account of the principal of such Bond if it be a coupon Bond registered as to principal and of the principal and interest if it be a fully registered Bond, shall be made only to or upon the order, in writing of such registered owner thereof and all such payments so made to any such reg- istered owner or upon his order shall be valid and effectual to satisfy and discharge the liability of the Company upon such Bond to the extent of the sum or sums so paid, and neither the Company nor the Trustee shall be affected by any notice to the contrary.
2.13 In case any Bond, with the coupons, if any, belonging thereto, or any coupon shall become mutilated or be lost, stolen, or destroyed, then upon the surrender to the Trustee for exchange and Cancellation of such mutilated Bond, together with all unmatured coupons appertaining thereto, or of any such mutilated coupon, or upon the receipt of evidence satisfactory to the Company and the Trustee of the loss, theft, or destruction of such Bond and its coupons, if any, or of such coupon, and of the ownership and authenticity thereof, and upon receipt also of indemnity (naming as obligees both the Company and the Trustee) in a sum and with a surety company thereon deemed satisfactory by the Company and the Trustee, the Company, in its discretion, may execute and the Trustee shall certify and deliver a new Bond of the same series, denomination, and maturity date, in exchange for, and upon Cancellation of the mutilated Bond and its coupons (if any), or, in lieu of the Bond and its coupons (if any) so lost, stolen, or destroyed, or if a coupon or coupons only have been mutilated or have been lost, stolen, or destroyed, the Company, in its discretion, may execute and the Trustee shall certify and deliver in exchange for and upon surrender and Cancellation of the Bond to which such coupon or coupons appertain and of all coupons appertaining thereto not lost, stolen, or destroyed, a new Bond of the same series, denomination, and maturity with coupons appurtenant thereto of the same maturities as the coupons surrendered and the coupons lost, stolen, or destroyed, or, if any such mutilated, lost, stolen, or destroyed Bond or any of its coupons or such mutilated, lost, stolen or destroyed coupon shall have matured or shall be about to mature, instead of issuing a substitute Bond or of issuing a substitute Bond with such matured coupons attached, the Company with the consent of the Trustee may pay the same and in such event, to the extent that it shall pay coupons appertaining to any Bond so mutilated or so purportedly lost, stolen, or destroyed, the Trustee shall cut off and Cancel the corresponding coupons on the substituted Bond before delivering the same.
Any such Bonds and coupons issued pursuant to this Section in substitution for Bonds or coupons purportedly lost, stolen, or destroyed shall constitute original additional contractual obligations of the Company whether or not the Bonds and coupons purportedly lost, stolen, or destroyed be at any time enforceable by anyone and shall (subject to the provisions of 2.14 and 4.02) be equally and ratably entitled to the benefits of this Indenture with all other Bonds and coupons issued hereunder. The Company and the Trustee, in their discretion, may place upon any such substituted Bond a distinguishing mark or a legend, but such mark or legend shall in no wise affect the validity of such substituted Bond. The Company may, at its option, require the payment of a sum sufficient to reimburse it for any stamp tax or other governmental charge and any expense incurred by the Company or the Trustee in connection with the issue of any such substituted Bond and also a further sum not exceeding two dollars ($2) for each such substituted Bond.
All Bonds are held and owned upon the express condition that the foregoing provisions are exclusive in respect of the replacement of muti- lated, lost, stolen, or destroyed Bonds and shall preclude any and all other rights and remedies, any law or statute now existing or hereafter enacted to the contrary notwithstanding.
2.14 Bonds pledged by the Company, upon being released from pledge, or Bonds purchased or otherwise acquired by the Company may be sold, pledged, or otherwise disposed of before maturity by the Company prior to the occurrence of an event of default hereunder without reexecution or recertification, but the benefit of this Indenture shall be suspended in respect of Bonds, coupons, or claims for interest while held by or for the benefit of the Company. Subject to the provisions of 2.12 hereof, Bonds and coupons and claims for interest transferred by or from the Company while in default in the payment of principal or interest, or premium, if any, or any Sinking Fund, Maintenance and Renewal, Improvement or other analogous fund instalment hereunder, so long as such default shall continue, shall not be deemed Outstanding under the Indenture in connection with (a) any com- putation of percentages of Bonds outstanding hereunder for the purpose of any action by Bondholders, or (b) any provision for the enforcement of any rights or remedies hereunder or under the Bonds, or (c) any distribution of proceeds or payment of the purchase price upon any sale hereunder, or upon any other such enforcement, except after the prior payment in full of all Bonds and coupons and claims for interest not so held or transferred, provided, however, that for the purpose of determining whether the Trustee shall be protected in relying on any direction or consent of Bondholders only Bonds which the Trustee knows to be so held or to have been so transferred shall be so deemed not to be Outstanding.
ARTICLE III.
Issue of Bonds
3.01 The aggregate principal amount of Bonds which may be issued by the Company under this Indenture and may be Outstanding at any one time shall not, in any event, exceed the amount at the time permitted by law, but otherwise, except as in 3.02 and 3.03 provided, is unlimited; provided however that the aggregate principal amount of Bonds, or the aggregate principal amount of Bonds of any one series, which may be issued hereunder may, at any time at the election of the Company as evidenced by a Supplemental Indenture, be limited to such definite aggregate principal amount as may be specified in such Supplemental Indenture.
3.02 First Mortgage Bonds, Series A, 2.95%, due October 1, 1973, limited in aggregate principal amount to eleven million dollars ($11,000,000) and in denominations authorized hereunder may forthwith upon the execution and delivery of this Indenture be executed by the Company and delivered to the Trustee for certification, and thereupon may be certified by the Trustee, and delivered to or upon the written order of the Treasurer or an Assistant Treasurer of the Company without the necessity of awaiting the filing or recording hereof.
3.03 Bonds, when authorized by a Supplemental Indenture, of one or more series, other than the series constituting the 2.95% Bonds, (in this Article III called Series B Bonds) may from time to time be executed by the Company and shall be delivered to the Trustee for certification and thereupon shall be certified by the Trustee and delivered to or upon the written order of the Treasurer or an Assistant Treasurer of the Company to an aggregate principal amount not exceeding twenty-one million dollars ($21,000,000), less the total of the aggregate principal amount of Series B Bonds theretofore certified and delivered upon original issue. Series B Bonds shall be certified and delivered by the Trustee only after the Trustee has received the following:
(a) a Directors' Resolution determining the series of the said Bonds and, if a new series, distinguishing the same by descriptive title pursuant to 2.01, establishing in respect thereof the applicable characteristics described in 2.02, authorizing the execution of the Bonds and of the Supplemental Indenture securing them, in form satisfactory to the Trustee, and the issue of said Bonds, and also requesting the certification and the delivery of the said Bonds by the Trustee all in the principal amount therein specified, but not exceeding the maximum amount which may be issued by the Company and certified and delivered by the Trustee under the provisions of this Section;
(b) Unless in the Opinion of Counsel described in subparagraph
(g) of this Section it is stated that no vote or resolution of the
stockholders of the Company is required in order that the issue and
sale or other disposition of said Series B Bonds shall be legal, a
certified copy of a vote by the stockholder or by the stockholders
holding the requisite number of shares of the Company taken at a
meeting duly called and held, authorizing the said Directors'
Resolution and said request, and the execution, certification and
delivery of said Bonds, and the execution and delivery of said
Supplemental Indenture;
(c) said Supplemental Indenture duly executed by the Company and by the Trustee, in as many counterparts as the Trustee shall require;
(d) an Earnings Certificate;
(e) an Officers' Certificate stating
(1) that to the best knowledge and belief of such officers the Company is not in default in the performance and observance of any of the terms, covenants, and conditions of this In- denture;
(2) that all conditions precedent provided for herein (in- cluding any covenants hereof compliance with which constitutes a condition precedent) have been complied with; and
(3) the aggregate principal amount of Series B Bonds theretofore certified and delivered upon original issue;
(f) Commission Orders to the extent required by law; and
(g) an Opinion of Counsel to the effect that all corporate action prerequisite to or necessary for the authorization, execution, issue, certification, sale or other disposition, and delivery of the said Bonds, and the execution and delivery of the Supplemental Indenture, has been duly and properly taken, or, if no action by stockholders is necessary therefor, stating such fact; that the Commission Orders furnished to the Trustee are proper and legal, and order, consent to, permit and authorize to the full extent required by law the issue, sale, or negotiation of the said Bonds (or that no, or no other, Commission Orders are required by law); that all conditions hereof precedent to the issue of such Bonds (including any covenants hereof compliance with which constitutes a condition precedent) have been complied with; that said Bonds when delivered by the Company will be in all respect valid and enforceable obligations of the Company in accordance with their terms and entitled to the benefit and security of this Indenture; that the aggregate principal amount of Series B Bonds (as previously limited in this Section) then to be issued under this Section does not exceed the aggregate principal amount then issuable under this Section; and that upon the issue of said Bonds, the aggregate principal amount of Bonds issued hereunder and then Outstanding will not exceed the amount permissible hereunder and permissible by law; and that all recording and filing in respect of said Supplemental Indenture necessary for the security of any or all of said Bonds has been or will be completed.
3.04 Bonds, when authorized by a Supplemental Indenture, of one or
more series, other than the series constituting the 2.95% Bonds and in
addition thereto and to the Series B Bonds, may from time to time be
executed by the Company and shall be delivered to the Trustee for
certification and thereupon shall be certified and delivered by the Trustee
to or upon the written order of the Treasurer or an Assistant Treasurer of
the Company in an aggregate principal amount equal to the aggregate
principal amount of any Bonds which hare been paid, retired, redeemed,
Cancelled, surrendered to the Trustee or to the Company for Cancellation,
or for the payment or redemption of which moneys in the necessary amount
shall have been deposited with or shall then be held by the Trustee (with
irrevocable direction and authorization satisfactory to the Trustee so to
apply the same, and as regards Bonds to be redeemed, either with proof
satisfactory to the Trustee that notice of redemption has been duly given
or with irrevocable power of attorney to the Trustee to give such notice);
provided however that, unless all 2.95% Bonds and all Bonds of any other
series issued prior to the issue of the Bonds then to be issued under this
Section shall have ceased to be Outstanding hereunder, no Bonds shall be
issuable under the provisions of this Section in respect of Bonds which
have been or are contemporaneously to be paid, retired, redeemed,
Cancelled, or surrendered to the Trustee for Cancellation (a) by the use of
moneys received by the Trustee as or from the proceeds of any part of the
Mortgaged Property sold, taken by eminent domain, or otherwise disposed of,
or as the proceeds of any policies of insurance upon the Mortgaged
Property, or by the use of any other moneys held by the Trustee as
described in 8.02, (b) by the use of moneys deposited with the Trustee upon
the issue of Bonds pursuant to the provisions of 3.05, (c) in lieu of the
payment to the Trustee of moneys pursuant to the terms of any Sinking Fund,
Maintenance and Renewal Fund, Improvement Fund, or any analogous fund
established by a Supplemental Indenture then in force, or (d) by the use by
the Trustee of moneys paid to it pursuant to the terms of any such fund,
unless, in either case, the provisions establishing such fund shall
expressly permit the issue of Bonds under this Section in respect of Bonds
paid, retired, redeemed, Cancelled, or surrendered for Cancellation as a
part of the operation of such fund.
Bonds issuable under this Section shall be certified and delivered by the Trustee only after the Trustee has received the following:
(a) a Directors' Resolution determining the series of the Bonds, and, if a new series, distinguishing said series by descriptive title pursuant to 2.01, and establishing in respect thereof the applicable characteristics enumerated in 2.02, authorizing the execution of the Bonds and of a Supplemental Indenture securing them, in form satisfactory to the Trustee and the issue of the said Bonds, and also requesting the certification and the delivery of the said Bonds by the Trustee, in such aggregate principal amount as the Board of Directors or the Executive Committee shall determine, but not exceeding the maximum amount which may be issued by the Company and certified and delivered by the Trustee under the provisions of this Section;
(b) unless in the opinion of Counsel described in subparagraph
(g) of this Section it is stated that no vote or resolution of the
stockholders of the Company is required in order that the issue and
sale or other disposition of said Bonds shall be legal, a certified
copy of a vote by the stockholder or by the stockholders holding the
requisite number of shares of the Company taken at a meeting duly
called and held, authorizing the said Directors' Resolution and said
request and the execution, certification and delivery of said Bonds
and the execution and delivery of said Supplemental Indenture;
(c) said Supplemental Indenture duly executed by the Company and by the Trustee, in as many counterparts as the Trustee shall require;
(d) an Officers' Certificate stating
(1) that to the best knowledge and belief of such officers the Company is not in default in the performance and observance of any of the terms, covenants, and conditions of this Indenture;
(2) that all Bonds theretofore issued under this Indenture have been paid, retired, redeemed, or Cancelled, or surrendered to the Trustee for Cancellation, or concurrently with the cer- tification and delivery of the requested Bonds will be surren- dered to the Trustee for Cancellation, or that moneys in the necessary amount for the payment or redemption of all Bonds not so paid, retired, redeemed, or surrendered have been deposited with, or shall then be held by the Trustee (with irrevocable directions and authorization satisfactory to the Trustee to apply the same to such payment or redemption, and as regards Bonds to be redeemed, either with proof satisfactory to the Trustee that notice of redemption has already been duly given or with irrevocable power of attorney to the Trustee to give such notice); or
that Bonds theretofore issued under this Indenture of a specific aggregate principal amount (not less than the aggregate principal amount of Bonds then to be issued under this Section) have been or will be paid, retired, redeemed, or Cancelled, or surrendered to the Trustee for Cancellation and that money in the amount necessary therefor is then held by the Trustee or will be deposited with it prior to or concurrently with the certification and delivery of the Bonds so requested (with irrevocable authorization satisfactory to the Trustee so to apply the same to such payment or redemption, and as regards Bonds to be redeemed, either with proof satisfactory to the Trustee that notice of redemption has been duly given, or with irrevocable power of attorney to the Trustee to give such notice), and that no part of said Bonds theretofore issued has been or will be paid, retired, redeemed, or Cancelled, or surrendered to the Trustee for Cancellation, either by the use of moneys received by the Trustee as or from the proceeds of any part of the Mortgaged Property sold, taken by eminent domain, or otherwise disposed of, or as the proceeds of any policies of insurance upon the Mortgaged Property, or by the use of any other moneys held by the Trustee as described in 8.02, or by the use of moneys deposited with the Trustee upon the issue of Bonds pursuant to the provisions of 3.05, or (unless one or more Sink- ing, Maintenance and Renewal, Improvement, or analogous funds created by Supplemental Indenture then in force permit the issue of Bonds under this Section in respect of Bonds paid, retired, redeemed, Cancelled or surrendered for Cancellation as a part of the operation of any such fund) in lieu of the payment to the Trustee of moneys pursuant to the terms of any such fund, or by the use by the Trustee of moneys paid to it pursuant to the terms of any such fund provided however that in the event that a Sinking Fund, Maintenance and Renewal Fund, Improvement Fund or other analogous fund created by a Supplemental Indenture then in effect may in respect of such fund relax the foregoing pro- visions, they may be modified to the extent necessary to comply with the terms of such Supplemental Indenture;
(3) that all conditions precedent provided for herein (including any covenants hereof compliance with which consti- tutes a condition precedent) have been complied with;
(e) Commission Orders to the extent required by law;
(f) all Bonds previously issued, surrender of which is to be made contemporaneously with the issue by the Company and the certification and delivery by the Trustee of the Bonds to be issued under this Section, together with all unmatured coupons thereto ap- pertaining, and all cash necessary to pay the principal and interest or the redemption price of all Bonds previously issued, the payment or redemption of which, respectively, is made the basis for the issue of the Bonds so requested;
(g) an Opinion of Counsel to the effect that all corporate action prerequisite or necessary for the authorization, execution, issue, certification, sale or other disposition, and delivery of the said Bonds, and the execution and delivery of the Supplemental Inden- ture, have been duly and properly taken, or, if no action by stock- holders is necessary therefor, stating such fact; that the payment, retirement, redemption, Cancellation, or surrender for Cancellation of Bonds previously issued, as set forth in the Officers' Certificate hereinbefore in this Section described, constitute a basis for the issue of the aggregate principal amount of said Bonds then to be issued under this Section; that the Commission Orders furnished to the Trustee are proper and legal, and order, consent to, permit and authorize to the full extent required by law the issue, sale, or negotiation of the said Bonds (or that no, or no other, Commission Orders are required by law); that all conditions hereof precedent to the issue of such Bonds (including any covenants compliance with which constitutes a condition precedent) have been complied with; that said Bonds when delivered by the Company will be in all respects valid and enforceable obligations of the Company in accordance with their terms and entitled to the benefit and security of this Indenture; that the aggregate principal amount of said Bonds then to be issued under this Section does not exceed the aggregate principal amount then issuable under this Section; that upon the issue of said Bonds the aggregate principal amount of Bonds issued hereunder and then Outstanding will not exceed the amount permissible hereunder and permissible by law; and that all recording and filing in respect of said Supplemental Indenture necessary for the security of any or all of said Bonds has been or will be completed; and
(h) in the event that the total annual interest requirements of the Bonds then to be issued under this section exceeds the total annual interest requirements on the Bonds in respect of the payment, retirement, redemption, Cancellation or surrender to the Trustee for Cancellation of which said Bonds are then to be issued, an Earnings Certificate.
All Bonds paid, retired, redeemed, or otherwise acquired which form the basis for the issue of Bonds pursuant to this Section shall be delivered to the Trustee for Cancellation and Cancelled by it.
3.05 Bonds, when authorized by a Supplemental Indenture, of one or more series, other than the series constituting the 2.95% Bonds and in addition thereto and to the Series B Bonds, may from time to time be executed by the Company and delivered to the Trustee for certification and thereupon shall be certified and delivered by the Trustee to or upon the written order of the Treasurer or an Assistant Treasurer of the Company in any aggregate principal amount permissible hereunder and permissible by law which shall be equal to the amount of cash paid to the Trustee in exchange therefor.
Bonds issuable under this Section shall be certified and delivered by the Trustee only after the Trustee has received the following:
(a) a Directors' Resolution determining the series of the Bonds, and, if a new series, distinguishing said series by descriptive title, pursuant to 2.01, and establishing in respect thereof the characteristics enumerated in 2.02, authorizing the execution of the Bonds and of a Supplemental Indenture securing them, in form satisfactory to the Trustee, and the issue of the said Bonds, and also requesting the certification and delivery of the said Bonds in such aggregate principal amount as the Board of Directors or the Executive Committee shall determine, but not exceeding the maximum amount which may be issued by the Company and certified and delivered by the Trustee under the provisions of this Section;
(b) unless in the Opinion of Counsel described in subparagraph
(h) of this Section it is stated that no vote or resolution of the
stockholders of the Company is required in order that the issue and
sale or other disposition of said Bonds shall be legal, a certified
copy of a vote by the stockholder or by the stockholders holding the
requisite number of shares of the Company taken at a meeting duly
called and held, authorizing the said Directors' Resolution and said
request, and the execution, certification and delivery of said Bonds
and the execution and delivery of said Supplemental Indenture;
(c) said Supplemental Indenture duly executed by the Company and by the Trustee, in as many counterparts as the Trustee shall require;
(d) an Officers' Certificate stating
(1) that to the best knowledge and belief of such officers the Company is not in default in the performance and observance of any of the terms, covenants, and conditions of the Indenture; and
(2) that all conditions precedent provided for herein (including any covenants hereof compliance with which con- stitutes a condition precedent) have been complied with;
(e) a sum of cash equal to the aggregate principal amount of the Bonds the issue of which is requested pursuant to the terms of this Section;
(f) Commission Orders to the extent required by law;
(g) an Earnings Certificate; and
(h) an Opinion of Counsel to the effect that all corporate action prerequisite or necessary for the authorization, execution, issue, certification, sale or other disposition, and delivery of the said Bonds, and the execution and delivery of the Supplemental Indenture, has been duly and properly taken, or, if no action by stockholders is necessary therefor, stating such fact; that the Com- mission Orders furnished to the Trustee are proper and legal, and order, consent to, permit and authorize to the full extent required by law the issue, sale, or negotiation of the said Bonds (or that no, or no other, Commission Orders are required by law); that all conditions hereof precedent to the issue of such Bonds (including any covenants hereof compliance with which constitutes a condition precedent) have been complied with; that said Bonds when delivered by the Company will be in all respects valid and enforceable obligations of the Company in accordance with their terms and entitled to the benefit and security of this Indenture; that upon the issue of said Bonds, the aggregate principal amount of Bonds issued hereunder and then Outstanding will not exceed the amount permissible hereunder and permissible by law; and that all recording and filing in respect of said Supplemental Indenture necessary for the security of any or all of said Bonds has been or will be completed.
3.06 All cash paid to the Trustee pursuant to the provisions of 3.05
shall, so long as held by it, be held as part of the Mortgaged Property but
whenever the Company shall become entitled to certification and delivery of
Bonds against Available Net Property Additions pursuant to the provisions
of 3.08, the Trustee, upon the application of the Company and upon compli-
ance by the Company with all requirements of said 3.08 (except as
hereinafter in this Section provided, and with such additions, omissions,
and variations as may be appropriate by reason of the fact that application
is being made for the withdrawal of cash and not for the certification and
delivery of Bonds) necessary to obtain certification and delivery of Bonds
under that Section, shall pay over, in lieu of the Bonds to which the
Company would be otherwise entitled to receive pursuant to that Section, an
amount of said cash equal to the aggregate principal amount of said Bonds,
or if the Trustee shall then hold less than such amount of cash, the
greatest amount which will leave in its hands less than one thousand
(1,000) dollars thereof. Any withdrawal of an amount of cash under this
Section shall be in lieu of the right of the Company to the certification
and delivery of Bonds under 3.08 in an equal aggregate principal amount,
but shall not otherwise affect the right to the certification and delivery
of Bonds to which it might otherwise be entitled under the provisions of
that Section.
The Company shall not be required to furnish in connection with the withdrawal of the cash held by the Trustee pursuant to this Section, so much of the Directors' Resolution, Officers' Certificate, or Opinion of Counsel described in 3.08 as shall relate to the authorization, certification, or issue of Bonds, or any certificate relating to action by stockholders or any Commission Orders unless required by law, or an Earnings Certificate.
3.07 Any sums deposited with the Trustee under the provisions of 3.05 in respect of which no application under the provisions of 3.06 shall have been made within three (3) years of the date of the deposit thereof, or in respect of which the Company shall at any time have notified the Trustee in writing that it will make no application under that Section, may be applied by the Company at any time to the discharge of the entire indebtedness on all Bonds Outstanding hereunder pursuant to the provisions of 15.01(A) and if not so applied shall be used and applied by the Trustee to the redemption of Bonds of the series in respect of the issue of which it was so deposited, pursuant to the provisions of the Supplemental Indenture applicable thereto. Bonds so redeemed shall not thereafter be made the basis for the issue of Bonds or the withdrawal of cash under any provisions of the Indenture.
3.08 Bonds, when authorized by a Supplemental Indenture, of one or more series, other than the series constituting the 2.95% Bonds and in addition thereto and to the Series B Bonds, may from time to time be executed by the Company and shall be delivered to the Trustee for certification and thereupon shall be certified and delivered by the Trustee to or upon the written order of the Treasurer or an Assistant Treasurer of the Company in the aggregate principal amount requested by the Company, but not in excess of sixty percentum (60%) of Available Net Property Additions set forth in Item G of the Certificate of Available Net Property Additions filed, as hereinafter in this Section provided, in connection with such request for the issue of additional Bonds under this Section.
Bonds issuable under this Section shall be certified and delivered by the Trustee only after the Trustee has received the following:
(a) a Directors' Resolution determining the series of the Bonds, and, if a new series, distinguishing said series by descriptive title pursuant to 2.01 and establishing in respect thereof the applicable characteristics enumerated in 2.02, authorizing the execution of the Bonds and the Supplemental Indenture securing them, in form satisfactory to the Trustee, and the issue of said Bonds, which Supplemental Indenture shall also convey, transfer and/or assign to the Trustee all Fundable Property not previously so conveyed, transferred and/or assigned, and also requesting the certification and the delivery by the Trustee of the said Bonds, in such aggregate principal amount as the Board of Directors or the Executive Committee shall determine, but not exceeding the maximum amount which may be issued by the Company and certified and delivered by the Trustee under the provisions of this Section;
(b) unless in the Opinion of Counsel described in subparagraph
(j) of this Section it is stated that no vote or resolution of the
stockholders of the Company is required in order that the issue and
sale or other disposition of said Bonds shall be legal, a certified
copy of a vote by the stockholder or by the stockholders holding the
requisite number of shares of the Company taken at a meeting duly
called and held, authorizing the said Directors' Resolution and said
request, and the execution certification and delivery of said Bonds
and the execution and delivery of said Supplemental Indenture;
(c) said Supplemental Indenture duly executed by the Company and by the Trustee, in as many counterparts as the Trustee shall require;
(d) an Officers' Certificate stating
(1) that to the best knowledge and belief of such officers the Company is not in default in the performance and observance of any of the terms, covenants, and conditions of the Indenture; and
(2) that all conditions precedent provided herein (including any covenants hereof compliance with which constitutes a condition precedent) have been complied with; and
(3) the aggregate principal amount of all Bonds then issuable under this Section;
(e) a Certificate of Available Net Property Additions;
(f) an Accountant's Certificate to the effect that the said Certificate of Available Net Property Additions accurately states the figures in prior Certificates which are reflected therein; stating the Cost of all Property Additions referred to in Item B of the said Certificate and that the Cost thereof has been compiled in said Certificate in accordance with the definition of Cost contained herein; that said Property Additions have not theretofore been Made the Basis for Action or Credit hereunder; stating that the Property Retirements referred to in Item D of said Certificate include all Property Retirements required to be reflected on the books of the Company pursuant to the provisions hereof and that all Property Retirements so included are such within the definition thereof contained herein, and that the Cost thereof has been compiled in said Certificate in accordance with said definition of Cost; in the event that any securities or other property have been included in the Cost of any Property additions includable in said Accountant's Certifi- cate, brief describing said securities or said other property and stating the date of delivery or transfer thereof; in the event that any of said Property Additions when required were subject to a prior lien or were subjected thereto at the time of acquisition, stating that such prior lien has been discharged, the principal amount of the indebtedness secured thereby on the date of its acquisition by the Company, the aggregate amounts (exclusive of premium or interest) expended by the Company in discharge of said indebtedness or release of said Property Additions from said lien, and the date or dates when the indebtedness was paid and said lien released; in the event that any of said Property Additions were acquired by the issue or assumption by the Company of any unsecured indebtedness, the amount thereof at the time of the signing of said Certificate; and in the event that any of said Property Additions were acquired without the payment of cash, property, or securities, or the issue, assumption, or payment of indebtedness, describing in reasonable detail any such Property Additions and the manner in and the time as of which the Fair Value thereof was determined; and in the event that said Property Additions include any electrical utility system or systems, stating the extent to which Cost includes any part of the Cost of any rights and intangible property and whether, in his opinion, any included item is reasonable and proportionate, and, if not, the extent of the inclusion which is either disproportionate or unreasonable, and further stating that Cost does not include any value based on going concern value or good will;
(g) an Engineer's Certificate describing in reasonable detail all Property Additions referred to in Item B of the aforesaid Cer- tificate of Available Net Property Additions and stating that all said Property Additions are Fundable Property within the definition thereof contained herein and are desirable for use in the proper conduct of the business of the Company; stating the Fair Value of said Property Additions and that the Fair Value thereof has been determined in accordance with the definition of Fair Value contained herein;
(h) Commission Orders to the extent required by law;
(i) an Earnings Certificate; and
(j) an Opinion of Counsel to the effect that all corporate
action prerequisite or necessary for the authorization, execution,
issue, sale or other disposition, and delivery of the Bonds, and the
execution and delivery of the Supplemental Indenture, has been duly
and properly taken, or, if no action by stockholders is necessary
therefor, stating such fact; that the Property Additions described in
Item B of the Certificate of Available Net Property Additions are
Fundable Property within the definition thereof contained herein;
that in case any such Property Additions shall be acquired or con-
structed in connection with any hydro-electric works, for the main-
tenance and operation of which the Company has not obtained a license
under the Federal Power Act, or other similar legislation, and no
proceedings shall then have been instituted by any governmental
authority having jurisdiction to require the Company either to apply
for such a license or to remove such hydro-electric works, it shall
be a sufficient compliance with the requirement of this subparagraph
(j) as to the Company's power and right to operate under the Federal
Power Act, or similar legislation, for such Opinion of Counsel to
state the circumstances as to such situation and that in his opinion
based thereon either there is no reasonable ground for believing that
such a license upon reasonable terms would not be issued, whenever
application therefor should be made, or there is no legal necessity
for obtaining such a license; that the Commission Orders furnished
to the Trustee are proper and legal, and order, consent to, permit
and authorize to the full extent required by law the issue, sale, or
negotiation of the said Bonds (or that no, or no other, Commission
Orders are required by law); that all conditions hereof precedent to
the issue of said Bonds (including any covenants hereof compliance
with which constitutes a condition precedent) have been complied
with; that said Bonds when delivered by the Company will be in all
respects valid and enforceable obligations of the Company in
accordance with their terms and entitled to the benefit and security
of this Indenture; that the aggregate principal amount of said Bonds
then to be issued under this Section does not exceed the aggregate
principal amount then issuable under this Section; and that upon the
issue of said Bonds the aggregate principal amount of Bonds issued
hereunder and then Outstanding will not exceed the amount permissible
hereunder and permissible by law; and that all recording and filing
in respect of said Supplemental Indenture necessary for the security
of any and all of said Bonds has been or will be completed.
If the Property Additions shall include any property which, within
six (6) months prior to the date of acquisition thereof by the Company, has
been used or operated by a person or persons other than the Company in a
business similar to that in which it has been or is to be used or operated
by the Company, and if the Fair Value to the Company of such property is
not less than twenty-five thousand dollars ($25,000) and not less than one
(1) percentum of the aggregate principal amount of the Bonds then
Outstanding hereunder, the Company shall also file an Independent
Engineer's Certificate stating the Fair Value to the Company of such
property and of any other such property so used or operated which, since
the commencement of the then calendar year, has been subjected to the Lien
of this Indenture as the basis for the certification and delivery of Bonds,
the withdrawal of cash constituting a part of the trust estate, or the
release of property subject to the Lien of this Indenture, and as to which
an Independent Engineer's Certificate has not previously been furnished.
3.09 Bonds issued pursuant to 3.03, 3.04, 3.05 or 3.08 may be issued in whole or in part as a single separate series, or in several series, each such series bearing such alphabetical designation as will distinguish it from all other series issued hereunder, and Bond issued under 3.03 may be issued in whole or in part with and as a part of and under the same designation as that of any other series of Bonds, other than the 2.95% Bonds, issued contemporaneously therewith or prior thereto.
ARTICLE IV.
Particular Covenants of the Company
The Company hereby covenants and agrees with the Trustee and with the respective bearers and owners of the Bonds issued hereunder as follows:
4.01 That the Company will duly and punctually pay the principal of, and interest on, and premium, if any, upon, all the Bonds at any time issued hereunder, according to the terms thereof; that the interest on all coupon Bonds shall until the maturity of such Bonds be payable only upon presentation and surrender of the several coupons for such interest as they respectively mature. The interest on fully registered Bonds shall be paid to or upon the order of the registered owners thereof. Except as provided in 2.13, the principal of each Bond shall be payable only upon the presentation and surrender of the Bond. The Company prior to each date on which the principal of and any premium or interest on any of the Bonds shall become due and payable, whether at the date of maturity thereof, by call for redemption, by declaration, or otherwise, will deposit or cause to be deposited with the Trustee (with arrangements for transfers of such deposits between the Trustee and any paying agent, if a paying agent shall be hereafter appointed) the full amount necessary to make such payment. When and as paid in full, all Bonds and all coupons shall be surrendered to and Cancelled by the Trustee and thereafter delivered to the Company upon its written request.
Except as otherwise provided in 15.02, moneys deposited with the Trustee or with any paying agent appointed pursuant to the terms of any Supplemental Indenture for the purpose of paying the principal of or interest (or premium, if any) on any Bonds issued under this Indenture shall constitute a trust fund for such purpose and for no other purpose whatever, subject to the provisions of 13.09.
4.02 That so long as Bonds duly issued hereunder shall remain Outstanding and unpaid, the Company will not directly or indirectly extend or consent to the extension of the time for the payment of any coupon or claim for interest of or upon any Bond, and will not, directly or indirectly, become a party to any such extension or approve any arrangement therefor, either by purchasing or refunding or in any manner keeping alive any such interest coupon or claim for interest or otherwise; that in case the payment of any such interest coupon or claim for interest shall be so extended or kept alive by, or with or without, the consent of the Company, or in case any such coupon or claim for interest shall in any way at or after maturity have been transferred or pledged, separate or apart from the Bond to which it relates, then, anything in this Indenture contained to the contrary notwithstanding, any such interest coupon or claim for interest so extended or kept alive or so transferred or pledged shall not be entitled, in case of a default hereunder, to any benefit of or under this Indenture except after the prior payment in full of the principal of the Bonds Outstanding hereunder and of all coupons and claims for interest not so transferred, pledged, kept alive, or extended.
4.03
(a) That whenever necessary to avoid or fill a vacancy in the office of the Trustee, the Company will, in the manner provided in 13.18 hereof, appoint a Trustee so that there shall at all times be a Trustee hereunder, which shall at all times be a bank or trust company having its principal office and place of business in the City of Boston, Massachusetts, if there be such bank or trust company willing and able to accept the trust upon reasonable or customary terms, and which shall at all times be a corporation organized and doing business under the laws of the United States or any State or Territory or of the District of Columbia with a combined capital and surplus of at least five million (5,000,000) dollars and authorized under such laws to exercise corporate trust powers and subject to supervision or examination by Federal, State, Territorial, or District of Columbia authority.
(b) That the Company will register, transfer, and/or exchange at the principal office of the Trustee, (and at such other offices or agencies of the Trustee or the Company as may be specified in the Bonds and in any Supplemental Indenture securing them, or as may hereafter be established or maintained in order to comply with any requirements to that end contained in any regulations of any stock exchange on which the Bonds issued hereunder may hereafter be listed on application of the Company) any 2.95% Bonds (and any Bonds of any other series issued hereunder and entitled by the provisions thereof or hereof to registration, transfer, and/or exchange, at said office or said offices) when presented for that purpose pursuant to the provisions of said 2.95% Bonds (or said Bonds of any other series) and of this Indenture; and that the Company will maintain any such office or agency, at which any such Bonds may be presented for registration, transfer, and/or exchange, and at which such Bonds and the coupons or claims for interest appertaining thereto may be presented for payment and at which notices or demands in respect of said Bonds, coupons, or claims for interest may be served pursuant to any provision therefor contained in any of said Bonds or in this Indenture; and that the Company will file with the Trustee notice in writing of the location, and of any change in location, of any such office or agency; and that in case the Company having once established any such office or agency shall fail to maintain the same, or shall fail to give notice of the location or change of the location thereof, then presentation and demand may be made and notices may be served at the office of the Trustee.
(c) That if the Company shall appoint a paying agent other than
the Trustee, it will cause such paying agent to execute and deliver
to the Trustee an instrument in which it shall agree, subject to the
provisions of this Section, (1) that such paying agent shall hold in
trust for the benefit of the Bondholders entitled thereto, or the
Trustee, all sums held by such paying agent for the payment of the
principal of or interest on the Bonds (and premium, if any) and
(2) that such paying agent shall give the Trustee notice of any
default by the Company or any other Obligor on the Bonds in the
making of any deposit with it for the payment of the principal of or
interest (and premium, if any) on the Bonds, and of any default in
the making of such payment. While the Trustee shall be a paying
agent the Trustee shall hold in trust, as provided in 4.01, for the
benefit of the Bondholders entitled thereto all sums held by it as
such paying agent for the payment of the principal of or interest on
the Bonds.
(d) That if the Company shall act as its own paying agent, it will, on or before each due date of each instalment of principal of or interest on the Bonds set aside and segregate and hold in trust for the benefit of the Bondholders entitled thereto or for the Trustee a sum sufficient to pay such principal or interest so becoming due on the Bonds (and premium, if any) and will notify the Trustee of such action or of any failure to take such action.
(e) Anything in this Section to the contrary notwithstanding, the Company may at any time, for the purpose of obtaining a release or satisfaction of this Indenture or for any other reason, pay or cause to be paid to the Trustee all sums held in trust by it or any paying agent as required by this Section, such sums to be held by the Trustee upon the trusts herein contained.
(f) Anything in this Section to the contrary notwithstanding, the agreement to hold sums in trust as provided in this Section is subject to the provisions of 15.02.
(g) That for the purpose of registering, transferring, and/or exchanging Bonds the Company will maintain Old Colony Trust Company or its successor as Trustee hereunder as Registrar of the Bonds issued hereunder.
4.04 That the Company will duly pay and discharge, or cause to be
paid and discharged, as the same shall become due and payable all taxes,
water rates, assessments, and governmental and other charges lawfully
levied, imposed, or assessed upon the Mortgaged Property or any part
thereof or upon or measured by the franchises, business, or income of the
Company, and will duly observe, and conform to all valid requirements of
any governmental authority relative to any part of the Mortgaged Property,
and will not suffer any mechanics', laborers', statutory, or other lien to
be hereafter created upon any part thereof now owned or hereafter acquired,
or the income therefrom, prior to the Lien hereof, except Permitted
Encumbrances; provided however that the acquisition and ownership by the
Company of property hereafter acquired subject to mortgage or other lien,
whether existing at the time of acquisition or contemporaneously created to
secure a part of the purchase price thereof to the extent permitted by
4.10, or the refunding or extension thereof, shall not be deemed a viola-
tion of the foregoing covenant, but no such property shall be Made the
Basis for Action or Credit hereunder unless the mortgage or other lien to
which it shall have been subject has theretofore been or is
contemporaneously discharged; and provided further that nothing in this
Section contained shall require the Company to pay, acquire, or make
provision for any tax assessment, lien, or charge so long as the Company in
good faith and by appropriate legal proceedings shall contest the validity
thereof, unless thereby any of the Mortgaged Property will be lost or
forfeited.
That the Company will duly and punctually perform all the conditions and obligations imposed on it by the terms of any lien upon its property acquired after the date of execution of these presents, and will not permit any default in any such obligation if thereby the protection afforded by this Section be materially impaired or endangered.
4.05 That the Company will keep or cause to be kept all the Mortgaged Property of a character usually insured by companies similarly situated insured against loss or damage by fire and against such other risks as such property is usually insured against and in such amounts as such property is usually insured for by companies similarly situated, either by means of policies issued by reputable insurance companies, or, at the Company's election, with respect to all or any part of the property by means of an adequate insurance fund set aside and maintained by it out of its own earnings, or, in conjunction with other companies through an insurance fund, trust, or other agreement (the adequacy of such insurance fund, trust, or other agreement to be evidenced by a certificate, to be filed with the Trustee, of an actuary or other person selected by the Board of Directors or the Executive Committee of the Company and satisfactory to the Trustee in the exercise of reasonable care), the loss if any, except to the person or property of others, and except as to Excepted Property, and except any loss less than twenty-five thousand (25,000) dollars, to be made payable to the Trustee as the interest of the Trustee may appear and to be paid to the Trustee and to be held by it and applied as hereinafter in 8.02, 8.03 and 8.04 hereof provided. As soon as practicable after the execution of these presents, but not later than December 31, 1954, and thereafter once in each year, and at any other time upon the written request of the Trustee, the Company will furnish to the Trustee an Officers' Certificate to the effect that the Company has complied with the terms and conditions of this Section, and with the terms and conditions of all insurance policies, and containing a detailed statement of the insurance then in effect upon the property of the Company on a date therein specified (which date shall be within thirty (30) days of the filing of such Certificate), and, except in respect of property insured by means of an insurance fund, trust, or other agreement as permitted by this Section, showing the numbers of the policies of insurance in effect, the names of the issuing companies, the amounts and expiration dates of such policies, and the property covered by such policies; and in case any of the property shall at the time be insured by means of an insurance fund, trust, or other agreement, as permitted by this Section, the Company shall at the time of furnishing each such Certificate also furnish to the Trustee a further Officers' Certificate with respect to the adequacy of such insurance fund, trust, or other agreement. The Trustee shall, subject to the provisions of 13.02 and 13.03, be entitled to accept any such Officers' Certificate or further Officers' Certificate, if required, as satisfactory evidence of compliance by the Company with the provisions of this Section, and shall, subject to the provisions of 13.02 and 13.03, be under no duty with respect to any such Certificate or further Certificate except to exhibit the same to any Bondholder upon request.
If any part of the Mortgaged Property hereafter acquired shall be subject to a prior lien, purchase money mortgage, or other encumbrance, the Company may include in any policy of insurance the interest of the holder of said prior lien, mortgage, or other encumbrance or may provide for his interest in any such insurance fund, trust, or other agreement, but such fact and the details of the rights of such holder in said policies or under such insurance fund, trust, or other agreement shall be set forth in each Officers' Certificate filed with the Trustee as in this Section heretofore provided, and in the event that a check for the amount of any loss covered by insurance on any property subject to such lien, mortgage or other encumbrance shall be drawn by an insurer payable to the order, among others, of the Trustee and the holder of such lien, mortgage, or encum- brance, the Trustee shall endorse said check, without recourse, and deliver the same, so endorsed, to such holder.
Upon request of the Trustee, the Company shall deliver to it any policies of insurance upon the Mortgaged Property. If the proceeds of any insurance on account of any one loss do not exceed the sum of twenty-five thousand (25,000) dollars, such proceeds, if coming into the hands of the Trustee, shall be paid by it forthwith to the Company and the Trustee shall not be obligated to see to the application thereof. In case of any loss covered by any policy of insurance, any adjustment thereof and settlement which may be agreed upon by the Company and the insurer or insurers shall be accepted by the Trustee.
4.06 That the Company, irrespective of any obligation undertaken in Article VI hereof, will at all times maintain, preserve, and keep its Mortgaged Property as an operating system or systems in good repair, working order, and condition, and will from time to time make all needful and proper repairs, replacements, and renewals thereto and thereof. Nothing in this Section contained shall be held to prevent the Company from permanently discontinuing the operation of or reducing the capacity of any of its plants or properties or any part thereof if, in the judgment of the Board of Directors or the Executive Committee of the Company, any such action is necessary or desirable in the conduct of the business of the Company, or, if the Company is ordered so to do by regulatory authority having jurisdiction over the Company, or, if the Company intends to sell or dispose of the same, and within a reasonable time shall endeavor to effectuate such sale; nor shall anything in this Section contained be construed to prevent the Company from taking such action with respect to the use of its plants, works, and properties as is proper under the circum- stances, including the cessation of or omission to exercise rights, permits, licenses, privileges, or franchises which, in the judgment of the Company, can no longer be properly exercised or availed of.
4.07 That the Company will, except only as interrupted by causes beyond its control or except upon compliance with the provisions of Article XIV, continually conduct and carry on its usual business in an efficient and proper manner.
4.08 That the Company is duly organized and existing under the laws of the Commonwealth of Massachusetts and is duly authorized by law to create and issue the Bonds from time to time issued hereunder and to execute the Indenture, and that all corporate action on its part for the creation and issue of the 2.95% Bonds, as herein provided, and for the execution and delivery of this Indenture has been taken; and that, subject to the provisions of Article XIV, it will at all times do or cause to be done all things necessary to maintain its corporate existence and to preserve and keep in full force and effect all its rights, permits, licenses, privileges, and franchises, except such as can, in the judgment of the Company, no longer be properly exercised or availed of.
4.09 That, except as to after-acquired property, the Company is lawfully seized and possessed of the Mortgaged Property, that it has good and marketable title thereto; that it has good right and lawful authority to mortgage the same, as provided in and by this Indenture, free from all liens and encumbrances except those specified, described or referred to in the description contained in the granting clauses hereof and in Schedule A; that it will forever warrant and defend the title to the Mortgaged Property, including all property at any time intended to be included therein under the provisions of Clause 4 of the granting clauses of this Indenture, and every part thereof, to the Trustee, its successors and assigns, against all claims and demands whatsoever, except such liens and encumbrances as are specified described or referred to in the granting clauses hereof or in Schedule A or are otherwise permitted under any of the provisions hereof; provided that nothing in this Indenture contained shall prevent the Company from hereafter acquiring any property subject to a prior lien or purchase money mortgage or other encumbrance of the character described in 4.10.
That the Company will cause this Indenture and all Supplemental Indentures to be at all times properly recorded and filed and rerecorded and refiled in such manner and in such places as may be required by law and will do such other acts as may be necessary in order fully to preserve and protect the security of the Bondholders and the rights of the Trustee and to establish and maintain the superior lien hereof upon the Mortgaged Property, subject however to the provisos and exceptions in this Section before set forth and to the provisions of 4.10 and of Article XIV.
That the Company will, upon reasonable request by the Trustee, execute and deliver such Supplemental Indentures and other instruments and do such further acts as may be necessary or proper to carry out more effectually the purposes of this Indenture, especially to subject to the Lien hereof any property now owned or hereafter acquired by it which it is herein provided shall be subject to the Lien hereof, and to transfer to any new trustee the estates, powers, instruments, and funds held in trust hereunder.
That the Company will furnish to the Trustee:
(a) Promptly after the execution and delivery of this Indenture and of each Supplemental Indenture or other instrument granting or confirming to the Trustee title to any of the Mortgaged Property an Opinion of Counsel either stating that in the opinion of such counsel this Indenture or such Supplemental Indenture or other instrument has been properly recorded and filed so as to make effective the Lien intended to be created thereby, and reciting the details of such action, or stating that in the opinion of such counsel no such action is necessary to make such Lien effective. It shall be a compliance with this sub-section (a) if (i) such Opinion of Counsel shall state that this Indenture or such Supplemental Indenture or other instrument has been received for record or filing in each jurisdiction in which it is required to be recorded or filed, and that, in the opinion of such counsel, (if such is the case) such receipt for record or filing makes effective the Lien intended to be created by this Indenture or such Supplemental Indenture or other instrument, and (ii) such Opinion of Counsel is delivered to the Trustee within such time, following the date of the execution and delivery of this Indenture, or such Supplemental Indenture or other instrument, as shall be practicable, having due regard to the number and distance of the jurisdictions in which this Indenture or such Supplemental Indenture or other instrument is required to be recorded or filed;
(b) At least annually after the execution and delivery of this Indenture, an Opinion of Counsel either stating that in the opinion of such counsel such action has been taken with respect to the re- cording, filing, re-recording, and refiling of this Indenture and of each Supplemental Indenture or other instrument granting or con- firming to the Trustee title to any of the Mortgaged Property as is necessary to maintain the Lien thereof, and reciting the details of such action, or stating that in the opinion of such counsel no such action is necessary to maintain such Lien. Such opinion shall be delivered to the Trustee within three (3) months after each anniversary of the execution and delivery of this Indenture.
4.10 That the Company will not create or suffer any other mortgage, charge, encumbrance, or lien, of any kind, superior to or on a parity with the Lien of this Indenture upon any of the Mortgaged Property whether now owned or hereafter acquired, excepting only those specified, described, or referred to in the description contained in the granting clauses hereof and in Schedule A, and, in respect of Mortgaged Property hereafter acquired, excepting also mortgages or other encumbrances or liens on any part or portion thereof (including renewals and extensions thereof) whether existing at the time of the acquisition of such part or portion (and whether or not the obligations secured thereby are assumed in connection with such acquisition) or created contemporaneously to secure or to raise a part of the purchase price thereof, provided however that the total of all obligations secured by any such mortgage, encumbrance, or lien upon such part or portion shall not exceed sixty (60) per centum of the Cost thereof or of the Fair Value thereof, whichever is less, and provided further that an Earnings Certificate dated not more than sixty (60) days prior to the acquisition of such part or portion shall be delivered to the Trustee contemporaneously with said acquisition.
4.11 That the Company will keep proper books of account and records to which the Trustee or its duly authorized representatives may have access at all reasonable times; will not charge to its property plant, and equipment accounts any expenditures which are properly chargeable to maintenance or repairs or to any other expense account in accordance with any system of accounting required by law, or by any regulatory or other public authorities having jurisdiction, to be followed by the Company, or, in the absence of such requirement, in accordance with sound accounting practice then current; will promptly charge to the depreciation reserve, the reserve for contributions to extensions, and/or the surplus account of the Company all property which has become worn out or become permanently unserviceable, or has been lost, sold, destroyed, abandoned, surrendered on lapse of title, or retired from service for any reason, or has permanently ceased to be used or useful in the business of the Company, except that property which has been abandoned consequent upon an act of God or other unavoidable casualty may be retired over a period in accordance with orders or decrees of any regulatory authority having jurisdiction over the Company; and will furnish to the Trustee, as soon as practicable after the close of each fiscal year and in any event not later than one hundred and twenty (120) days thereafter, an income statement, analysis of surplus and balance sheet of the Company, for such year, all in such detail as the Trustee shall require, which shall be certified by an Independent Accountant, who shall be a certified or public Accountant, and will give to the Trustee full information pertinent to any provision thereof.
4.12 That the Company in each fiscal year will make entries on its books charging to current earnings and crediting to depreciation reserve an amount not less than two and one-tenth percentum (2.1%) of the average of the beginning and ending balances for such year of the total plant and equipment (devoted to utility operation) account of the Company, exclusive of land, flowage rights, rights of way, water rights, and other like undepreciable real estate and rights in real estate, and of unfinished construction.
4.13 That the Company will not, except in accordance with the provisions of Article XIV hereof, sell, convey, transfer, or lease the Mortgaged Property as a whole or substantially as a whole and no other person shall, by consolidation, merger, grant lease, or otherwise, be vested with the title thereto as a whole or substantially as a whole, except upon compliance with the conditions prescribed in said Article XIV and the Company will not dispose of any part of the Mortgaged Property not in the hands of the Trustee except in accordance with the provisions of Article VII hereof; provided however that nothing contained in this Section shall prevent the Company from selling, exchanging, or disposing of the Mortgaged Property in conformity with the provisions of said Article VII or from demolishing, abandoning dismantling, discontinuing, or retiring parts of the Mortgaged Property if such action shall seem to the Company to be in its best interests.
4.14 That so long as any of the 2.95% Bonds shall be Outstanding, the Company will not on or after August 1, 1954, declare or pay a dividend upon its capital stock (other than a dividend payable in shares of its capital stock) or make any other distribution on any shares of its capital stock, or purchase any shares of its capital stock in an amount or amounts exceeding the Dividend Fund hereinafter described, as constituted at the time of the declaration or payment of such dividend or distribution or at the time of such purchase.
The Dividend Fund shall be computed by adding to
(a) the sum of $2,639,760.58
(b) the net earnings of the Company, determined as hereinafter defined, for the period, considered as a unit, from January 1, 1954, to the close of that quarter which last precedes the date of the declaration of any such proposed dividend or distribution, or date of such purchase;
and by subtracting from the total thereof
(c) the aggregate amounts theretofore paid out or declared or agreed to be paid out during said period in respect of such dividends, distributions, or purchases.
For the purposes of this Section, the net earnings of the Company for any such period shall be computed on an accrual basis in accordance with sound accounting practice then current by deducting from the total revenues for such period the total operating expenses and other proper charges to income for such period, including (without in any respect limiting the generality of the foregoing) all taxes, interest on all outstanding indebtedness, amortization of debt discount and expense, amortization of all other deferred charges properly subject to amortization, all charges on the Company's books to expense or income to provide for depreciation and all charges for maintenance, but excluding any provision for the Improvement Fund or any Sinking or similar funds for the retirement of debt and any profits and losses from the sale or other disposition of capital assets made in said period; provided however that
(1) the charge to earnings and credit to depreciation reserve for said period shall comply with the provisions of 4.12 hereof, except that for any period less than a year the charge for such period shall be apportioned, at a rate which shall not be less than the annual rate required by 4.12 hereof, on the balance of the depre- ciable property as described in said Section owned by the Company at the beginning of said year; and
(2) net earnings shall be adjusted by debits, or credits thereto which are offset by adjustments of the hydro-equalization reserve of the Company and, except for said adjustments, net earnings shall not reflect as revenues or as a deduction from revenues any adjustment made during such period (whether made through surplus or income accounts) properly attributable to operations prior to January 1, 1954.
In the event that the Company shall merge or consolidate with any other corporation or corporations pursuant to Article XIV, the Dividend Fund shall not be increased or diminished by the surplus or deficit of such other corporation or corporations or by its or their earnings, dividends, distributions, or purchases prior to the date of such merger.
4.15 That the Company will not issue or permit to be issued any Bonds hereunder in any manner other than in accordance with the provisions of this Indenture, and will not suffer or permit any default to occur under this Indenture, but will faithfully observe and perform all the conditions, covenants, and requirements of this Indenture and of the Bonds issued hereunder; and that on or before July 1, 1955, and on or before July 1 in each calendar year thereafter, or on or before such other day in each calendar year as the Company and the Trustee may from time to time agree upon it will deliver to the Trustee an Officers' Certificate in respect of compliance or non-compliance by the Company with the covenants contained in sections 4.01, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.17, 6.01 and 8.03 (a), (b), (c) and (d).
4.16 That if the Company shall fail to perform any of the covenant contained in sections 4.04, 4.05, and 4.06, the Trustee, or any receiver or trustee appointed hereunder pursuant to the laws of the United States relating to bankruptcy, may (but subject to 13.02 and 13.03 hereof shall not be required to) make advances to perform the same in behalf of the Company; and the Company hereby agrees to repay all sums so advanced on demand, with interest at the rate of four (4) percentum per annum after demand, and all sums so advanced, with interest as aforesaid, shall be secured hereby in priority to the indebtedness evidenced by said Bonds and coupons; but no such advance shall be deemed to relieve the Company from any default hereunder.
4.17 That in every Certificate of Available Net Property Additions filed with the Trustee for any purpose under this Indenture, all Property Additions, and all Property Retirements, the Cost or Fair Value of which is included in any such Certificate will comply with the definition herein of Property Additions and Property Retirements, respectively; that the Cost and Fair Value of all such Property Additions and the Cost of all such Property Retirements will be compiled in accordance with the definitions herein of Cost and Fair Value respectively; that no property which is not Fundable Property will be included in Item A or Item B of any such Certificate; and that no Property Additions which have once been Made the Basis for Action or Credit hereunder will thereafter be Made the Basis for Action or Credit hereunder, provided however that property at any time subject to the Lien hereof consisting solely of materials or supplies usable as components in the construction of electric utility or steam plant, and which has once been Made the Basis for Action or Credit hereunder may again be Made the Basis for subsequent Action or Credit hereunder when restored to service if it shall in the meantime have been retired from service and the Cost thereof (less any credit for salvage value actually received) shall then have been charged to the depreciation reserve, the reserve for contributions to extensions, or to the surplus account of the Company and such charge shall have been reflected in Item D of any Certificate of Available Net Property Additions filed with the Trustee pursuant to the provisions of 3.06, 3.08, 6.02(b) or 8.03(b).
ARTICLE V.
Redemption of Bonds
5.01 Subject to the provisions of 5.06, all or any part of any series of the Bonds Outstanding hereunder or any part of the principal amount of any such fully registered Bond constituting one thousand dollars ($1,000) or a multiple thereof may, at the election of the Company to be exercised by resolution of its Board of Directors or of its Executive Committee, be called for redemption and prepayment at any time, or from time to time, upon not less than thirty (30) days' prior Notice, at a redemption price in respect of each Bond or part thereof so called for redemption set forth in said Bond and in respect of the Bonds of any series other than the 2.95% Bonds in the Supplemental Indenture securing such Bonds. In respect of the 2.95% Bonds the redemption price shall consist of the principal amount thereof or if less than the principal amount of a fully registered Bond shall be called then the principal amount so called, together with interest accrued thereon to the date filed for redemption, and (unless redeemed in the twelve months' period ending September 30, 1973) with a premium equal to the percentage of said principal amount hereinafter set forth:
If redeemed on or at any time prior to September 30, 1956, 2-1/2%
If redeemed thereafter and on or at any time prior to September 30, 1960,
2%
If redeemed thereafter and on or at any time prior to September 30, 1964,
1-1/2% If redeemed thereafter and on or at any time prior to September 30,
1968, 1%
If redeemed thereafter and on or at any time prior to September 30, 1972,
1/2%
5.02 Unless otherwise specifically provided in a Supplemental
Indenture relating to a subsequent series of Bonds issued hereunder, the
prior notice of the call for redemption of any Bonds issued hereunder shall
consist of a Published Notice published not less than once a week in each
of three successive weeks, the first publication to be at least thirty (30)
days before the date set for redemption, and by mailing, at least thirty
(30) days prior to the date set for redemption, by registered mail, postage
prepaid, to the registered owners of all fully registered Bonds and to the
registered owners of all coupon Bonds registered as to principal which have
been called for redemption, a copy of said notice, provided however that if
at any time not more than forty-five (45) and not less than thirty (30)
days prior to the date set for redemption the entire issue of 2.95% Bonds
then Outstanding shall be in fully registered form, notice by publication
as aforesaid may be dispensed with. Unless all the said 2.95% Bonds then
Outstanding shall be in fully registered form, failure by the Company to
give such notice by mail, as aforesaid, shall not invalidate or affect the
validity of the redemption proceedings. The notice aforesaid shall state
the redemption price, the date set for redemption, the place of payment
(which shall be the principal office of the Trustee and shall include any
paying agent if the Company shall appoint one or more paying agents
pursuant to the provisions of 4.03), and, in case of the redemption of a
part only of any series of Bonds including said 2.95% Bonds, the numbers of
the particular Bonds so called for redemption and payment, and if less than
the whole principal amount of any fully registered Bond shall be so
redeemed, the number of each fully registered Bond so called only in part,
and the portion of the principal amount thereof so called, and in such last
event stating also that, upon presentation of each such fully registered
Bond for redemption, there will be issued in lieu of the unredeemed portion
of the principal amount thereof one or more Bonds of the series so-called
for redemption in coupon or in fully registered form, for an aggregate
principal amount equal to such unredeemed portion. Said notice shall also
state that if the redemption price of all Bonds, or parts thereof, called
for redemption shall be duly provided by the Company, from and after the
redemption date interest shall cease to accrue thereon, coupons, if any,
appertaining thereto thereafter maturing shall be void, and the bearers or
registered owners thereof shall look for payment thereof solely to the
money so provided by the Company. If the Company shall have provided for
immediate prepayment pursuant to the provisions of 5.05, the notice shall
also state the full terms of such right of prepayment. In case of the
redemption of less than all the Bonds of any series, including the 2.95%
Bonds, the Company shall, at least fifteen (15) days prior to the date upon
which the notice is first required to be given, notify the Trustee in
writing of the aggregate principal amount of said Bonds to be redeemed and
furnish to it an Officers' Certificate pursuant to the provisions of 5.06,
and thereupon the Trustee shall draw by lot, in such manner as it shall
deem proper, the Bonds (or the portion of a fully registered Bond) to be so
redeemed and shall, within seven (7) days after receiving such notice from
the Company, notify the Company in writing of the numbers so drawn (and in
the case of the partial redemption of a fully registered Bond the amount to
be redeemed), and the Company shall insert such numbers and such amounts,
if any, in the notice, provided however that in respect of a partial
redemption of the 2.95% Bonds such determination of the particular Bond or
Bonds to be redeemed may be made in accordance with the provisions of any
agreement, satisfactory to the Trustee, to which the registered holders of
all the 2.95% Bonds then Outstanding are parties.
5.03 Any election of the Company to redeem the Bonds of any series, including the 2.95% Bonds, may be rescinded by the Company at any time prior to the first publication of the said notice or the mailing thereof to the holders of Bonds, either fully registered or registered as to principal only.
5.04 At least three (3) days prior to the date set for redemption and payment of any Bonds, the Company shall deposit with the Trustee, in coin or currency of the United States of America which at the time of such deposit shall be legal tender for the payment of public and private debts, a sum of money which, together with so much of any moneys then held by the Trustee as a part of the Mortgaged Property under 8.02 as may be available hereunder for such redemption and as the Company may desire to apply to the redemption of said Bonds, shall be sufficient to redeem all the Bonds so called for payment at the redemption price thereof. If the Company shall deposit and/or apply such sum of money, and if notice as provided in 5.02 or in any Supplemental Indenture shall have been duly given, then on and after the date set for redemption Bonds so called shall be paid by the Trustee (or in the event that the Company shall have appointed one or more paying agents pursuant to the provisions of 4.03 by any such paying agent, and the Trustee shall make necessary arrangements for transfer of funds so that each paying agent shall be enabled to make payment) upon presentation and surrender of such Bonds with all unmatured coupons, if any, appertaining thereto attached, and if any such Bonds be in fully registered form or be registered as to principal, accompanied by instruments of assignment in form satisfactory to the Trustee (or to any paying agent making the payment) duly executed by the registered owner or by his duly authorized attorney and in the event that less than the entire principal amount of any fully registered Bond shall be called for redemption, the Company shall issue and the Trustee shall certify and deliver one or more Bonds of the same series in coupon or in fully registered form for an aggregate principal amount equal to the uncalled and unpaid remainder of the principal amount of each such fully registered Bond so presented and surrendered for partial redemption; provided however that at the request of the Company the Trustee may prepay Bonds so called for redemption on such terms as the Company may determine by resolution of its Board of Directors or Executive Committee. All Bonds redeemed and paid as aforesaid shall be forthwith Cancelled by the Trustee.
The money so deposited with the Trustee and so much of the moneys held by the Trustee as a part of the Mortgaged Property under 8.02 as shall be applied by the Company to the payment of the redemption price of Bonds called for redemption shall be held by the Trustee, subject to the provisions of 13.09, from and after the date when notice by publication shall first have been given, or if the Trustee shall have been given irrevocable power of attorney to give such notice by publication pursuant to the provisions of 5.05, then from the moment of the delivery of said power of attorney to the Trustee, in trust for the exclusive benefit of the bearers and registered owners of the Bonds so called or to be called for redemption.
5.05 Upon deposit of the redemption price of the 2.95% Bonds as aforesaid or of the redemption price of Bonds of any other series made pursuant hereto and if notice as provided in 5.02 or in any Supplemental Indenture shall have been duly given, said Bonds shall no longer be entitled to the benefit and security of this Indenture, and from and after the date set for redemption all Bonds, or parts thereof, so called for redemption shall cease to bear interest, the coupons, if any, appertaining thereto thereafter maturing shall be void, the Company shall be under no further liability in respect of the principal of, or premium, if any, or interest on, said Bonds, or the called parts thereof, and the bearers or registered owners thereof shall look for payment of their Bonds, or the called parts thereof, solely to the money on deposit with the Trustee, provided however that if there shall have been deposited with the Trustee all sums necessary to redeem and pay all Bonds Outstanding irrespective of series, or all Bonds Outstanding of any one or more series but not of all series Outstanding, in either case at the full redemption price or prices current at a future date for redemption and payment therefor set by resolution of the Board of Directors or the Executive Committee of the Company, and if all other sums due or to become due to the Trustee shall have been paid or duly provided for to its satisfaction, and if the Trustee shall have been duly and legally given irrevocable power or powers of attorney in form satisfactory to the Trustee to call all said Bonds Outstanding, or all said Bonds Outstanding of any one or more series, as the case may be, in full conformity with any and all provisions hereof relating to call and redemption, and if said resolution shall provide that the bearers and registered owners of the Bonds to be redeemed may receive payment of the redemption price, including accrued interest to the redemption date, from and after the moment when all said sums have been deposited and said power or powers of attorney have been delivered to the Trustee, then from said moment the Company shall be under no further liability in respect of said Bonds or the Bonds of said series as the case may be, said Bonds or the Bonds of said series, as the case may be, shall no longer be entitled to the security and benefit of this Indenture, and the bearers or registered owners thereof shall look for payment of their Bonds solely to the money so on deposit with the Trustee and in no event to the Company, but said Bonds or the Bonds of said series shall still bear interest to the date set for redemption, and only coupons, if any, apper- taining thereto maturing after said redemption date shall be void.
5.06 The Company covenants with the Trustee and with the respective bearers and registered owners of the Bonds issued and to be issued hereunder that it will not call for redemption less than all the Bonds Outstanding hereunder if it shall then be in default in the payment of the principal of or interest on any Bonds Outstanding hereunder, or in the performance of the covenants contained in 6.01, or in covenants of like character or imposing a Sinking Fund obligation or the obligation of a Maintenance and Renewal Fund or Improvement Fund or any analogous fund established pursuant to a Supplemental Indenture for the benefit of Bonds issued hereunder of a series other than the 2.95% Bonds. An Officers' Certificate to the effect that no one of such defaults then exists shall be filed with the Trustee as provided in 5.02.
5.07 The Company may, in connection with the authorization and issue of any series of Bonds hereunder other than the 2.95% Bonds, provide for the redemption and prepayment of the Bonds of any such series at such premiums, on such notice, and on such other terms and conditions as the Company may, subject to the terms hereof, determine, subject to the provisions of 5.06 and 5.06 and to the approval of the Trustee in respect of any and all provisions relating to moneys in its hands.
ARTICLE VI.
Improvement Fund
6.01 The Company covenants that so long as any 2.95% Bonds are Outstanding hereunder it will on the first day of November, 1954, and on the first day of November in each calendar year thereafter pay to the Trustee the sum of one hundred and ten thousand dollars ($110,000), as an Improvement Fund to be held and applied by the Trustee pursuant to the terms of 6.03; provided however, that the Company may, at its option, irrevocably allocate, upon filing the application and other documents described in 6.02, Net Property Additions towards the satisfaction of the obligation aforesaid in an amount equal to sixty percentum (60%) of the Available Net Property Additions as set forth in Item G of the Certificate of Available Net Property Additions filed in connection with said application.
6.02 For the purpose of determining the amount of money, if any, to be paid to the Trustee pursuant to the provisions of 6.01, the Company shall file with the Trustee on or before each said first day of November the following:
(a) an application consisting of an Officers' Certificate conforming to the requirements of 17.02 substantially in the following form:
WESTERN MASSACHUSETTS ELECTRIC COMPANY
To Old Colony Trust Company, Trustee
under Indenture dated as of August 1, 1954.
Improvement Fund Application
filed November , 19
In conformity with the provisions of Article VI of the above de- scribed Indenture providing for an annual Improvement Fund in the amount of $110,000 for the benefit of the holders or registered owners of the First Mortgage Bonds, Series A, 2.95%, due October 1, 1973, of the aforesaid Company issued under the aforesaid Indenture, we hereby certify that the sum of $110,000 is due at this time from the Company to you as Trustee as aforesaid on account of said Improvement Fund obligation now due and payable.
(If irrevocable allocation of Net Property Additions is in full satisfaction of the Improvement Fund obligation then current, the following should be used)
Application is hereby made irrevocably to allocate in the amount of $183,333.34 the Available Net Property Additions set forth in Item G of the accompanying Certificate of Available Net Property Additions in full satisfaction of said obligation.
(If in partial satisfaction, the following should be used)
Application is hereby made irrevocably to allocate Net Property Additions shown in the accompanying Certificate of Available Net Property Additions, in partial satisfaction of said obligation, by application of an amount equal to sixty percentum (60%) of the Available Net Property Additions set forth in Item G of said Certificate, the balance of $ being transmitted herewith in cash in full satisfaction of said obligation.
(If there is no allocation of Net Property Additions the follow- ing should be used)
The sum of $110,000 is transmitted herewith in cash in full satis- faction of said obligation.
(b) if irrevocable allocation of any Net Property Additions be made
(1) a Directors Resolution authorizing the execution of a Supplemental Indenture in form satisfactory to the Trustee conveying, transferring and/or assigning to the Trustee all Fundable Property not previously so conveyed, transferred and/or assigned;
(2) said Supplemental Indenture duly executed by the Com- pany, and if necessary by the Trustee, in as many counterparts as the Trustee shall require;
(3) a Certificate of Available Net Property Additions;
(4) an Accountant's Certificate similar, except for necessary variations, to the Accountant's Certificate described in subparagraph (f) of 3.08;
(5) an Engineer's Certificate similar, except for necessary variations, to the Engineer's Certificate described in subparagraph (g) of 3.08;
(6) an Opinion of Counsel to the effect that the amount of
the Improvement Fund obligation then due is correctly stated in
said application, and that the documents described in this
Section and/or the sum of money paid to the Trustee pursuant to
this Section fully satisfy the liability of the Company upon the
Improvement Fund obligation then due and if any Fundable
Property be conveyed, assigned, and/or transferred to the
Trustee, that all corporate action prerequisite or necessary for
the execution and delivery of the Supplemental Indenture has
been taken; that the Property Additions described in Item B of
said Certificate are Fundable Property within the definition
thereof contained herein; and that all recording and filing in
respect of said Supplemental Indenture necessary for the
security of any and all Bonds has been or will be completed.
The Company shall also pay to the Trustee with the documents aforesaid the sum of money, if any, set forth in the said application.
6.03 If at the close of the first day of November, 1954, and of the first day of November in any calendar year thereafter, there shall be in the hands of the Trustee any cash paid to the Trustee pursuant to the provisions of 6.02, in the aggregate amount of five thousand dollars ($5,000) or more, said cash shall be set aside by the Trustee for the call and redemption of 2.95% Bonds then Outstanding and the Trustee, on behalf of and in the name of the Company and at the Company's expense, shall call for redemption on or prior to the next succeeding thirty-first day of December, at a redemption price in respect of each Bond so called for redemption consisting of the principal amount thereof and interest accrued thereon to the date fixed for redemption, 2.95% Bonds to a principal amount sufficient (exclusive of accrued interest) to exhaust as nearly as may be the cash so set aside. Notice to bearers or registered owners of the 2.95% Bonds called for redemption under this Section shall be given in the manner provided in 5.02 hereof and such 2.95% Bonds shall be presented for payment, and paid, in the manner provided in 5.04 hereof; the particular 2.95% Bonds to be redeemed shall unless they shall include all the 2.95% Bonds then Outstanding, be chosen by lot as provided in 5.02; provided however that the determination of the particular 2.95% Bond or Bonds to be redeemed may be made in accordance with the provisions of any agreement, satisfactory to the Trustee, to which the registered holders of all the 2.95% Bonds then Outstanding are parties; and the provisions of 5.05 hereof shall be applicable to the redemption of such 2.95% Bonds and all matters related thereto.
The Company shall reimburse the Trustee, forthwith upon its request, for all sums paid or to be paid out as interest upon 2.95% Bonds redeemed pursuant to the provisions of this Section.
6.04 The Company may, in connection with the authorization and issue of any series of Bonds hereunder other than the 2.95% Bonds, establish for the benefit of such other series of Bonds any Sinking Fund, Maintenance and Renewal Fund, Improvement Fund, or analogous fund, with such terms and conditions in respect of the amount, character, and description thereof as the Company may, subject to the terms hereof, determine, subject however to the approval of the Trustee in respect of any and all provisions relating to money in its hands.
ARTICLE VII.
Possession, Use, and Release of Mortgaged Property
7.01 Unless and until one or more of the events of default specified in 9.01 shall have occurred and the Trustee shall have taken action authorized in such case by Article IX hereof, and after any such event of default so occurring shall have been cured or waived pursuant to the provisions of said Article IX, then, until the re-occurrence of an event of default and the taking of said action by the Trustee consequent thereon the Company shall be suffered and permitted to possess, use, and enjoy the Mortgaged Property (other than any money, choses in action, or other personal property deposited with or required to be deposited with the Trustee under any provision hereof) and to operate its plants and transmission and distribution systems with the franchises, rights, and privileges appertaining thereto, and to receive and use the rents, revenues, issues, earnings, income, products, and profits thereof, in- cluding interest or dividends on or other income from purchase money or other obligations, stocks, or other securities held by the Trustee, with power in the ordinary course of business freely and without let or hindrance on the part of the Trustee or of the Bondholders to alter, repair, add to, and change the location of any of its plants, buildings, works, structures, transmission and distribution systems, or any part or portion thereof, and the appliances appertaining to or used in connection therewith, and to replace or renew any of its equipment, machinery, or other property, whether any of the same shall now be constructed or owned or shall be hereafter constructed or acquired by the Company.
7.02 Unless and until one or more of the events of default specified in 9.01 shall have occurred and the Trustee shall have taken action authorized in such case by Article IX hereof, and after any such event of default so occurring shall have been cured or waived pursuant to the provisions of said Article IX, then, until the re-occurrence of any event of default and the taking of said action by the Trustee consequent thereon, the Company may at any time and from time to time without any release, consent, or other action by the Trustee
(a) in the ordinary course of business demolish, dismantle, tear down, or abandon any part of the Mortgaged Property which has become old, worn out, unserviceable, undesirable, or unnecessary for use in the conduct of the Company's business;
(b) sell, exchange, or otherwise dispose of, free from the lien of this Indenture, any poles, fractional interests in poles, machinery, equipment, apparatus, tools, or other tangible property, subject to the Lien of this Indenture, which shall have become old, worn out, unserviceable, undesirable, or unnecessary for use in the conduct of the Company's business, provided that the Company shall within a reasonable time thereafter replace the same with, or sub- stitute for the same, new poles, fractional interests in poles, machinery, equipment, apparatus, tools, or other tangible property, not necessarily of the same character, or located in the same place or physical position, but of a value at least equal to that of the property so sold, exchanged, or disposed of, which shall, without further action by the Company or the Trustee, be and become subject to the Lien hereof;
(c) cancel, surrender, terminate, release, abandon, or make changes, amendments, or alterations in, or substitutions for, any and all contracts, leases, easements or rights of way, grants, locations, permits, licenses, franchises, consents, agreements concerning fractional interests in any poles in which the Company has or shall have such interest, or similar rights; provided that such action is necessary, desirable, or advisable in the conduct of the business of the Company;
(d) grant or convey easements or rights of way or of passage over, on, or in respect of any part of the Mortgaged Property, in- cluding the right to grant fractional interests in any poles of the Company and the right to the joint use with the Company of such interests by the grantee, provided that such grant or conveyance will not materially impair the usefulness of such part or any other part of the Mortgaged Property in the conduct of the business of the Company;
(e) lease any of the Mortgaged Property which shall be, in the opinion of the Company as evidenced by a Directors' Resolution, neither essential nor desirable for the operation of any of the Mortgaged Property, and such lease may provide that it shall remain in force and effect even after the happening of an event of default hereunder, and if it so provides and also provides against any anticipation of rental payments, it shall have such force and effect;
(f) cut and sell, and license others to, and remove standing timber of any sort upon any land forming part of the Mortgaged Property.
(g) make and enter into such indentures and agreements as the Company shall consider necessary, desirable, or advisable in the conduct of its business, in modification or extinguishment of existing indentures and agreements with other parties under which such other parties now have the right to draw and use water from the canal of the Company at Turners Falls in the Town of Montague;
In the event that as a result of action taken by the Company under subsection (b) of this Section any Fundable Property shall be acquired by the Company, it shall be subject to the Lien of this Indenture and if the Trustee shall so request in writing, shall be forthwith conveyed, transferred, or assigned to the Trustee in the manner substantially similar except for necessary variations to that provided in sub-paragraphs (1), (2) and (6) of 6.02(b).
7.03 Unless and until one or more of the events of default specified in 9.01 shall have occurred and the Trustee shall have taken action authorized in such case by Article IX hereof, and after any such event of default so occurring shall have been cured or waived pursuant to the provisions of said Article IX, then, until the re-occurrence of an event of default and the taking of said action by the Trustee consequent thereon, the Company shall have the right at any time and from time to time to sell or exchange any part of the Mortgaged Property. The consideration received for such part of the Mortgaged Property so sold or exchanged may be (i) cash and/or (ii) an obligation or obligations secured by a closed purchase money mortgage on such property provided that such obligation or obligations shall not exceed sixty (60) per centum of the Cost or Fair Value, whichever is less, of the property so sold or exchanged (established as in subsection (c) of this Section provided) and provided further that the total principal amount payable on all such obligations when added to the aggregate principal amount then payable on all other obligations secured by purchase money mortgages held by the Trustee shall not exceed twenty (20) per centum of the aggregate principal amount of Bonds issued hereunder and then Outstanding and/or (iii) Fundable Property. The Trustee shall release any such part of the Mortgaged Property so sold or exchanged only on receipt of
(a) a Directors' Resolution requesting such release, identifying the property to be released and describing the consideration to be received therefor;
(b) an Officers' Certificate dated not more than ten (10) days prior to the delivery to the Trustee of the Directors' Resolution stating
(1) that to the best of the knowledge and belief of such officers the Company is not in default in the performance and observance of any of the terms, covenants, and conditions of the Indenture;
(2) that all conditions precedent provided herein (includ- ing any covenants compliance with which constitutes a condition precedent) have been complied with;
(3) that the sale or exchange of such property is desirable in the conduct of the business of the Company;
(4) that the Company has sold or exchanged, or contracted to sell or exchange, the property so to be released, the con- sideration to be received therefor, and, if such consideration shall be in part an obligation or obligations secured by a purchase money mortgage or purchase money mortgages or in whole or in part Fundable Property, describing such consideration in detail;
(5) if such consideration shall be in part an obligation or obligations secured by a purchase money mortgage or purchase money mortgages the aggregate principal amount then payable on all other obligations then secured by purchase money mortgages held by the Trustee and the aggregate principal amount of Bonds issued hereunder and then Outstanding;
(c) an Engineer's Certificate (accompanied with such Independent Engineer's Certificate as may be required pursuant to 7.06 hereof in respect of property to be sold or exchanged and/or to the last paragraph of 3.08 hereof in respect of any Fundable Property to be received under this Section) dated not earlier than sixty (60) days prior to the date of delivery of such Officers' Certificate stating the Fair Value of the property to be sold or exchanged, that the release of such property from the Lien hereof will not impair the security under this Indenture in contravention of the provisions hereof; in case the property to be sold or exchanged shall be subject to a prior lien at the time of sale or exchange, stating the actual value of the obligation or obligations secured by such prior lien; in case the consideration to be received shall consist of an obligation or obligations secured by a purchase money mortgage or purchase money mortgages, stating that the actual value of the said obligation or obligations does not exceed sixty per centum (60%) of the Cost or Fair Value, whichever is less, of the property so sold or exchanged and that the total of such actual value plus the other considerations received for such property so sold or exchanged is at least equal to the Fair Value thereof; and in case the consideration to be received shall consist in whole or in part of Fundable Property, stating that such Fundable Property complies with the definition of Fundable Property contained herein, that the Fair Value to the Company of such Fundable Property plus the other consideration, if any, received is at least equal to the Fair Value of the property so sold or exchanged and stating the Fair Value to the Company of any Fundable Property forming said consideration or a part thereof;
(d) a sum of money which shall be equal to the Fair Value of the property so sold or exchanged after deducting therefrom the actual value of any prior lien existing thereon at the time of sale or exchange, the actual value of every obligation secured by a purchase money mortgage or mortgages received as part consideration therefor and/or the Fair Value to the Company of any Fundable Property received as part consideration therefor, in all cases as set forth in the foregoing Engineer's Certificate, and also all necessary out of pocket expenses incurred in connection with said sale or exchange;
(e) an assignment or transfer to the Trustee, in form satis- factory to it, of every obligation secured by any purchase money mortgage or mortgages which shall form part of the consideration for the sale of any such property so sold or exchanged, and a like assignment of any such mortgage; provided however that the Company may at its option retain any such obligation so secured, and said mortgage or mortgages and substitute therefor cash in an amount equal to the full principal amount thereof;
(f) if Fundable Property be received as consideration or as part consideration for any of said property so sold or exchanged, a Supplemental Indenture conveying, transferring, or assigning such Fundable Property to the Trustee as a part of the Mortgaged Property, accompanied by a Directors' Resolution authorizing the execution and delivery thereof to the Trustee;
(g) an instrument of partial release of the property so sold or exchanged, or agreed to be so sold or exchanged, for execution by the Trustee, in form satisfactory to it,
(h) an Opinion of Counsel to the effect that the Certificates, instruments, or other documents and cash which have been or are therewith delivered to the Trustee conform to and comply with the requirements of the Indenture and constitute sufficient authority hereunder to the Trustee to execute the instrument of partial release, and that the said instrument, itself, is in proper form and will adequately release the property so sold or exchanged by the Company; in the event that an obligation or obligations secured by any purchase money mortgage or mortgages shall form part of the consideration for the property so released, that the total principal amount payable thereon when added to the aggregate principal amount then payable on all other obligations secured by purchase money mortgages then held by the Trustee does not exceed twenty (20) per centum of the aggregate principal amount of Bonds issued thereunder and then Outstanding, that the said obligation or obligations and the assignment or transfer thereof are valid, and are properly and legally secured by such mortgage or mortgages, that the assignment or transfer thereof to the Trustee is valid and that such mortgage or mortgages constitute a direct lien on the property so sold or exchanged, subject to no lien prior thereto except such as shall have existed thereon as liens prior to the Lien hereof immediately before the release of the said property, describing any such liens, if any, and the effect thereof upon the said obligation or obligations assigned to the Trustee, and stating that all recording and filing in respect of said mortgage or mortgages and the assignment or transfer thereof necessary for the security of any or all of said Bonds has been or will be completed; and, in case the Trustee is requested to release any such rights as are described in Clause 3 of the granting clauses of these presents, that such release will not impair the right of the Company to operate any remaining portion of the Mortgaged Property; and, in case Fundable Property shall be received as consideration for the exchange of said property, stating that the property so received complies with the definition of Fundable Property herein, that all corporate action prerequisite or necessary for the execution and delivery of the Supplemental Indenture granting, transferring, or assigning to the Trustee said property so received has been duly and properly taken, that the said Supplemental Indenture is adequate and complete to grant, transfer, or assign said property to the Trustee as part of the Mortgaged Property, that all conditions precedent to the release by the Trustee of the property so sold or exchanged, or agreed so to be, have been complied with, and that all recording and filing in respect of said Supplemental Indenture necessary for the security of any or all of said Bonds has been or will be completed.
7.04 Unless and until one or more of the events of default specified in 9.01 shall have occurred and the Trustee shall have taken action authorized in such case by Article IX hereof, and after any such event of default so occurring shall have been cured or waived pursuant to the provisions of said Article IX, then, until the re-occurrence of an event of default and the taking of said action by the Trustee consequent thereon, the Company shall have the right at any time and from time to time to sell and dispose of for cash real estate forming part of the Mortgaged Property of a Fair Value not in excess in the aggregate of one hundred thousand (100,000) dollars in any one calendar year, the sale of which is desirable in the conduct of the business of the Company. The Trustee shall release any such part of the Mortgaged Property so sold only on receipt of
(a) an Officers' Certificate requesting the release of any real estate comprised in the Mortgaged Property, describing the same in reasonable detail, stating the Fair Value thereof and of each other parcel of real estate forming part of the Mortgaged Property previously released pursuant to the provisions of this Section during the then current calendar year, the total thereof, and that such total does not exceed one hundred thousand (100,000) dollars;
(b) an Engineer's Certificate, (accompanied with such Inde- pendent Engineer's Certificate as may be required pursuant to 7.06 hereof) dated not earlier than sixty (60) days prior to the date of delivery of such Officers' Certificate, stating the Fair Value of the property requested to be released in said Officers' Certificate, and that the sale thereof is desirable in the conduct of the business of the Company and will not impair the security under this Indenture in contravention of the provisions hereof;
(c) an instrument of partial release of the property so sold or agreed to be so sold for execution by the Trustee, in form satis- factory to it;
(d) a sum of cash equal to the Fair Value of the said property;
(e) an Opinion of Counsel that the Certificates, instruments, and cash which have been or are therewith delivered to the Trustee conform to and comply with the requirements of this Indenture and constitute sufficient authority hereunder to the Trustee to execute the instrument of partial release, and that said instrument is in proper form and will adequately release the property so sold by the Company.
7.05 Should any of the Mortgaged Property be taken by exercise of the power of eminent domain, or should any governmental or public body, agency, authority, or instrumentality exercise at any time any right, power, or authority which it may have to purchase or to designate a purchaser for any part of the Mortgaged Property, or should the Board of Directors of the Company determine upon a sale or conveyance in lieu of or in reasonable anticipation of any such taking or exercise, the Trustee shall release the property so taken or sold upon being furnished with
(a) an Officers' Certificate describing in reasonable detail the
property so taken or sold and stating the amount and character of the
compensation therefor or proceeds therefrom and the method or manner
by or in which the property has been taken or sold and that such
taking or sale has been in conformity with the provisions of this
Section and, if a sale, was for the best interests of the Company
under the circumstances;
(b) an instrument of partial release of the property so taken or sold for execution by the Trustee, in form satisfactory to it;
(c) a sum of money equal to the amount of the compensation paid for the property if taken, or, the proceeds of the sale thereof if sold, to the extent that the compensation paid for the property, if taken, or, the proceeds of the sale thereof, if sold, shall consist of cash, together with any amount paid to the Company in connection with the taking or sale as severance damages to other Mortgaged Property not so taken, after deducting the net adjustments incurred in connection with said taking or said sale, which shall be established to be such to the satisfaction of the Trustee; provided however that unless a Directors' Resolution shall otherwise provide, the amount to be deposited with the Trustee shall not exceed the redemption price then current for redemption at the option of the Company of all Bonds then Outstanding hereunder;
(d) to the extent that the compensation received for the prop- erty, if taken, shall consist of rights of way or of other rights in land, a Supplemental Indenture in form satisfactory to the Trustee conveying, transferring, and/or assigning to the Trustee the rights of way or the rights in land so conveyed, transferred, and/or assigned to the Company;
(e) an Engineer's Certificate (accompanied with such Independent Engineer's Certificate as may be required pursuant to 7.06 hereof), dated not earlier than sixty (60) days prior to the date of the delivery of such Officer's Certificate, stating the Fair Value of the property taken or sold, and if rights of way or other rights in land be conveyed, transferred, and/or assigned to the Trustee by a Supplemental Indenture as a part of the compensation for the property taken, if it be taken, briefly describing the same and stating also the Fair Value of such rights of way or other rights in land and that the Fair Value thereof has been determined pursuant to the definition herein of Fair Value;
(f) an Opinion of Counsel to the effect that the property has been taken in pursuance of and in accordance with the power of eminent domain or similar right or power or sold to, or to a pur- chaser designated by, a governmental or public body, agency, authority, or instrumentality having the right to exercise such power or similar right, in lieu of or in reasonable anticipation of the exercise by it of such power or right; that all corporate action requisite or necessary for the execution of the Supplemental In- denture has been properly taken; that the Certificates, instruments of partial release, amounts or proceeds, and/or the Supplemental Indenture, if any, which have been or are therewith delivered to the Trustee, conform to and/or comply with the requirements of the Indenture and constitute sufficient authority hereunder to the Trustee to execute the instrument of partial release; that the said instrument, itself, is in proper form and will adequately release the property so taken or sold; and that all recording and filing in respect of said Supplemental Indenture necessary for the security of any and all of said Bonds has been or will be completed.
7.06 If the Fair Value of any property to be sold or exchanged pursuant to the provisions of 7.03, 7.04 and 7.05 hereof and of all other property released from the Lien of this Indenture since the commencement of the then current calendar year, as set forth in the Certificates required pursuant to this Article VII, is ten percentum (10%) or more of the aggregate principal amount of the Bonds then Outstanding hereunder, unless the Fair Value of the property to be released, as set forth in the Engineer's Certificate required to be filed with the Trustee in accordance with the provisions of this Article VII, is less than twenty-five thousand dollars ($25,000) or less than one percentum (1%) of the aggregate principal amount of Bonds at the time Outstanding, the Engineer's Certificate shall be accompanied by an Independent Engineer's Certificate dated not earlier than sixty (60) days prior to the date of delivery of such Certificate, stating (i) the Fair Value, in the opinion of the signer, of the property to be released and (ii) that in the opinion of the signer such release will not impair the security under this Indenture in contravention of the provisions hereof.
7.07 Any purchase money obligation received by the Trustee pursuant to the provisions of 7.03 may be released to the Company upon payment by the Company to the Trustee of the actual value thereof less any payments on the principal thereof received by the Trustee. All sums of money received by the Trustee in respect of the principal of any such obligation shall be held and disposed of by the Trustee as provided in 7.08, and any sum of money received by the Trustee in respect of the interest thereon shall, unless an event of default as specified in 9.01 shall have occurred and shall be continuing, be paid forthwith to the Company. The Trustee may take any action which in its judgment may be desirable or necessary for the collection of any such obligation or for the enforcement of the security therefor.
7.08 Any sums of money received by the Trustee pursuant to the terms of 7.03, 7.04, 7.05, or 7.07 shall be held, paid out, or applied by it pursuant to the provisions of Article VIII hereof.
7.09 In case the Company proposes to sell or has sold any Excepted Property or any property which the Company is entitled to sell or dispose of pursuant to the provisions of 7.02 and the purchaser thereof shall request the Company to furnish an instrument in the form of a partial release by the Trustee releasing any claim to or interest in such property which the Trustee might have hereunder, then the Trustee shall execute such instrument upon receipt of
(a) an Officers' Certificate requesting such release, describing such property, and stating that such property is either Excepted Property or property which the Company is entitled to sell or dispose of pursuant to the provisions of 7.02, and that the purchaser thereof has requested such partial release by the Trustee;
(b) such instrument of partial release for execution by the Trustee, in form satisfactory to it; and
(c) an Opinion of Counsel to the effect that such property is Excepted Property or property which the Company is entitled to sell or dispose of pursuant to the provisions of 7.02, that said property may be properly sold or disposed of by the Company in conformity with the terms hereof, and that all conditions precedent provided herein (including any covenants compliance with which constitutes a condition precedent) have been complied with; and that the instrument of partial release is in all respects proper for the purposes of this Section, and in form proper for execution by the Trustee.
7.10 No purchaser in good faith of any property purporting to be released hereunder shall be bound to ascertain the authority of the Trustee to execute the instrument of partial release thereof or to inquire as to the existence of any conditions required by the provisions hereof for the exercise of such authority; nor shall any purchaser or grantee of any property or rights permitted by this Article VII to be sold, exchanged, or otherwise disposed of by the Company be under any obligation to ascertain or inquire into the authority of the Company to make any such sale, exchange, or other disposition or to look to the application of the purchase money.
7.11 The provisions of 7.02, 7.03, and 7.04 shall not be construed as being in limitation of one another but as separate and distinct methods of releasing, selling, or otherwise disposing of Mortgaged Property.
7.12 The Trustee, subject to the provisions of 13.02 and 13.03, may in its absolute discretion (but shall not be bound to) execute any instrument of partial release pursuant to the provisions of 7.02, 7.03, 7.04, 7.05 and 7.09 notwithstanding the fact that an event of default as specified in 9.01 shall have occurred and shall be continuing.
7.13 In case a receiver or a trustee of the Company or of all or a substantial part of the Mortgaged Property or business of the Company shall be lawfully appointed, all acts or requests which the Company may do or make under the foregoing provisions of this Article VII or under the provisions of Article VIII hereof may be done or made by such receiver or trustee with the consent of the Trustee, which may, subject to the provisions of 13.02 and 13.03, give or withhold such consent as it may in its discretion determine. In case the Trustee shall be in possession of the Mortgaged Property pursuant to any of the provisions hereof, the Trustee may, subject as aforesaid, without any action or request by the Company, or any receiver or trustee, take any action authorized by any provision of this Indenture to be taken by the Company alone, by the Company and the Trustee, or by the Trustee, or by the Trustee at the request of the Company.
ARTICLE VIII.
Disposition of Money in the Hands of the Trustee
8.01 Moneys deposited with the Trustee in exchange for Bonds issued pursuant to 3.05 shall be held and disposed of as provided in 3.06 and 3.07; moneys deposited with the Trustee for payment of principal of or interest on Bonds issued hereunder shall be held and disposed of as provided in 4.01; moneys deposited with the Trustee for the redemption of Bonds issued hereunder, moneys deposited with the Trustee in fulfillment of the Company's obligation in respect of the Improvement Fund pursuant to 6.01, and moneys held by the Trustee as a part of the Mortgaged Property under 8.02 and applied by the Company to the redemption of Bonds shall be held and disposed of as provided in 5.04; and moneys deposited with the Trustee in fulfillment of any Sinking Fund, Maintenance and Renewal Fund, Improvement Fund or analogous obligation established pursuant to the terms of a Supplemental Indenture shall be held and disposed of as provided in said Supplemental Indenture.
8.02 Insurance moneys paid to the Trustee on account of policies made payable to the Trustee pursuant to 4.05, all moneys received from the sale of any part of the Mortgaged Property pursuant to 7.03, and 7.04, any moneys received by the Trustee as compensation for property taken by exercise of the power of eminent domain pursuant to 7.05, and any moneys received by the Trustee either from the Company, or in payment of the principal of any purchase money obligation held by the Trustee, pursuant to 7.07 and any other moneys received by the Trustee, other than moneys the disposition of which is elsewhere herein specifically provided for, shall be held by the Trustee as part of the Mortgaged Property and all or any part of said money at the request and election of the Company may be withdrawn from, and/or shall be applied by, the Trustee from time to time as provided in 8.03, 8.04 and 8.05, provided, however, that in the event of a taking by the exercise of the power of eminent domain or of a sale as permitted by 7.05, in either case of all or substantially all of the Mortgaged Property, any award paid for the property taken or the proceeds of said sale and any amount paid in connection therewith as severance damages, shall, whether or not interest on any Bonds then Outstanding hereunder shall be due and unpaid and whether or not any of the events of default specified in 9.01 shall have occurred, be applied by the Trustee to the retirement of Bonds issued hereunder and then Outstanding pursuant to the provisions of 8.05, and if the money received by the Trustee as such award or such proceeds and as such severance damages, if any, together with other moneys then in the hands of the Trustee and available for the purpose is not sufficient to effect the retirement of all the Bonds then Outstanding, it shall be applied to the retirement of Bonds as aforesaid only upon the deposit by the Company with the Trustee (and the Company covenants to make such deposit) of an amount sufficient, together with such moneys, so to effect the retirement of all Bonds then Outstanding.
8.03 Subject to the provisions of 8.02, and, unless and until one or more of the events of default specified in 9.01 shall have occurred and the Trustee shall have taken action authorized in such case by Article IX hereof, and after any such event of default so occurring shall have been cured or waived pursuant to the provisions of said Article IX then, until the re-occurrence of an event of default and the taking of said action consequent thereon, the Trustee shall apply any or all of the moneys described in 8.02 then in its possession as follows:
(a) Upon receipt by the Trustee of a Directors' Resolution to the effect that the Company has called for redemption in accordance with 5.01 or with any Supplemental Indenture executed in pursuance of the provisions of 5.07 all or any part of the Bonds of any series Outstanding, and stating the principal amount of Bonds so called for redemption, the amount of money necessary to redeem said principal amount of Bonds at the redemption price thereof, the amount of money deposited or to be deposited to pay the interest accrued to the date of redemption on all Bonds called for redemption and the additional money, if any, necessary for such redemption and requesting that the Trustee apply from the moneys of the character described in 8.02 then in its hands a sum which together with such amount so deposited or to be so deposited shall be sufficient to redeem at such total redemption price the Bonds so called for redemption, (but in no event in excess of such moneys then in its hands) the Trustee shall, from and after the deposit of such amount, apply the sum so requested to such redemption pursuant to the provisions of 5.04, or to the provisions of said Supplemental Indenture, as the case may be, and the sum so applied shall thereafter be held and disposed of by the Trustee as an integral part of the amount so deposited as provided in said Section or in said Supplemental Indenture as the case may be
provided however that the Trustee may not make such application if the Company shall then be in default in the payment of the principal of or interest on any Bonds then Outstanding hereunder or in the performance of the covenants contained in 6.01 or in covenants of like character or imposing a Sinking Fund obligation or the obligation of a Maintenance and Renewal Fund or Improvement Fund or any analogous fund established pursuant to a Supplemental Indenture for the benefit of Bonds issued hereunder of a series other than the 2.96% Bonds unless all Bonds then Outstanding hereunder are to be redeemed.
(b) Upon receipt by the Trustee of
(1) a Directors' Resolution to the effect that the Company has determined irrevocably to allocate Net Property Additions as a basis for the withdrawal from the hands of the Trustee of moneys of the character described in 8.02, and authorizing the execution of a Supplemental Indenture, in form satisfactory to the Trustee, conveying, transferring and/or assigning to the Trustee all Fundable Property not previously so conveyed, transferred and/or assigned;
(2) said Supplemental Indenture duly executed by the Company and if necessary by the Trustee, in as many counterparts as the Trustee shall require;
(3) an Officers' Certificate stating
(i) that to the best of the knowledge and belief of such officers the Company is not in default in the perform- ance and observance of any of the terms, covenants, and conditions of the Indenture;
(ii) that all conditions precedent provided herein (in- cluding any covenants hereof compliance with which con- stitutes a condition precedent) have been complied with;
(4) a Certificate of Available Net Property Additions;
(5) an Accountant's Certificate similar, except for neces- sary variations, to the Accountant's Certificate described in subparagraph (f) 3.08;
(6) an Engineer's Certificate (accompanied with such Independent Engineer's Certificate as may be required pursuant to the last paragraph of 3.08 hereof with respect to Property Additions) similar, except for necessary variations, to the Engineer's Certificate described in subparagraph (g) of 3.08;
(7) an Opinion of Counsel to the effect that all corporate action prerequisite or necessary for the execution and delivery of the Supplemental Indenture has been taken; that the Property Additions described in Item B of the said Certificate of Available Net Property Additions are Fundable Property within the definition thereof contained herein; and that all recording and filing in respect of said Supplemental Indenture necessary for the security of any and all Bonds has been or will be completed;
the Trustee shall pay over to the Company a sum of money (but in no event in excess of the moneys then held by it of the character described in 8.02) equal to one hundred per centum (100%) of the Available Net Property Additions set forth in Item G of said Certificate of Available Net Property Additions;
(c) Upon receipt by the Trustee of an Officers' Certificate to the effect that the Company has paid a specified amount of Federal and/or State taxes based on profits derived from the sale or other disposition of Mortgaged Property released from the Lien of this Indenture pursuant to the provisions of Article VII hereof, and requesting the payment to it of such amount, and stating that no part thereof has been theretofore reimbursed to the Company out of moneys in the hands of the Trustee, and stating in addition
(1) that to the best of the knowledge and belief of such officers the Company is not in default in the performance and observance of any of the terms, covenants, and conditions of the Indenture; and
(2) that all conditions precedent provided herein (including any covenants hereof compliance with which constitutes a condition precedent) have been complied with;
the Trustee shall pay over to the Company the sum of money so requested provided that such sum shall not exceed the moneys then held by it of the character described in 8.02;
(d) Upon receipt by the Trustee of Bonds issued hereunder
surrendered by the Company, together with all unmatured coupons
appurtenant thereto, for Cancellation by the Trustee, and of an
Officers' Certificate containing the statements set forth in clauses
(1) and (2) of subparagraph (c) of this Section, the Trustee shall
pay over to the Company from moneys held by it of the character
described in 8.02 a sum of money (not in excess of such moneys then
held by it) equal to the principal amount of Bonds so surrendered to
it by the Company for Cancellation;
(e) Upon receipt by the Trustee of an Officers' Certificate requesting the Trustee to apply a sum of money of the character described in 8.02, then held by the Trustee, to the payment at matu- rity of any Bonds issued hereunder, the Trustee shall, if said Bonds to be paid are the only Bonds then Outstanding hereunder, apply whatever such moneys the Company shall request to be so applied (not in excess of such moneys then held by it) to such payment, but if said Bonds to be paid are not the only Bonds then Outstanding hereunder, the Trustee shall make such application only if the Officers' Certificate shall in addition contain the statements set forth in clauses (1) and (2) of subparagraph (c) of this Section;
(f) Upon receipt by the Trustee of an Officers' Certificate
requesting that the Trustee apply a sum of money of the character
described in 8.02, then held by the Trustee, to the purchase of Bonds
issued hereunder and then currently entitled to the benefit of any
Sinking Fund, Maintenance and Renewal Fund, Improvement Fund or
analogous fund established pursuant to the terms of a Supplemental
Indenture securing such Bonds, at prices not in excess of the then
current redemption price established by such Supplemental Indenture
for redemption of Bonds through the operation of such fund or of such
lesser price as the Certificate shall specify, either in the open
market or pursuant to tenders invited in pursuance of the provisions
of said Supplemental Indenture, as the Company shall direct by said
Certificate and containing the statements set forth in clauses (1)
and (2) of subparagraph (c) of this Section, the Trustee shall apply
so much of said sum as can be applied pursuant to such request to
such purchases, (but not in excess of such money then in its hands)
provided however that the receipt by the Trustee of a Directors'
Resolution or Officers' Certificate pursuant to subparagraphs (a),
(b), (c), or (e) of this Section shall be held to be a withdrawal and
cancellation of any request theretofore made to the Trustee under
this subparagraph (f) to the extent that such request shall not have
then been complied with or completed.
Bonds surrendered to the Trustee pursuant to subparagraph (d) or purchased by the Trustee pursuant to subparagraph (f) of this Section shall be treated as paid for all purposes hereof, shall be Cancelled by the Trustee and no Bond shall ever be issued in the place of any such Bond.
8.04 Any moneys paid out by the Trustee in accordance with the provisions of 8.03 shall be held to have been paid from or out of money then longest in its hands. Any moneys of the character described in 8.02 which shall remain in the hands of the Trustee for a period in excess of three (3) years shall, if such amount shall exceed the sum of two hundred fifty thousand (250,000) dollars, be applied by the Trustee (if the Company shall not be in default in the payment of the principal of or interest on any Bonds Outstanding hereunder, or in the performance of the covenants contained in 6.01 or in covenants of like character securing Bonds issued hereunder belonging to a series other than the 2.95% Bonds or the satisfaction of the requirements of any Sinking Fund, Maintenance and Renewal Fund, Improvement Fund or analogous fund established by a Supplemental Indenture securing Bonds issued hereunder) to the redemption at the regular redemption price then current for the redemption at the option of the Company of Bonds of that series then Outstanding which shall first mature, provided however that if the Company shall have filed with the Trustee prior to the first publication of call for redemption a written plan for the definite expenditure of such moneys for Fundable Property, or an Officers' Certificate stating that the expenditure of such moneys has been prevented or delayed by acts of God, strikes, civil disturbances, or restrictions imposed by reason of a state of war and requesting in either case an extension of time, the Trustee may postpone the call for redemption for such period as it may deem proper.
Call for redemption shall be made in the manner provided in 5.02 unless in respect of Bonds of any series other than the 2.95% Bonds a different manner shall have been provided in the Supplemental Indenture securing such Bonds, and the Trustee shall pay, Cancel, and deliver Bonds and hold and apply the money for the payment thereof substantially in the manner provided in 5.04, unless a different manner shall have been provided in the Supplemental Indenture securing the Bonds of a series other than the 2.95% Bonds. The provisions of 5.05 shall control the rights of the holders of the Bonds so called for redemption unless different provisions in a Supplemental Indenture securing a series of Bonds other than the 2.95% Bonds shall control the rights of the holders of such Bonds.
8.05 In the event of a taking by the exercise of the power of eminent domain or of a sale as permitted by 7.05, in either case of all or substantially all of the Mortgaged Property, and of the deposit with the Trustee pursuant to 8.02 of sums sufficient together with moneys in the hands of the Trustee and available for the purpose to effect the retirement of all the Bonds then Outstanding, the Trustee, whether or not interest on any Bonds then Outstanding shall be due and unpaid and whether or not any of the events of default specified in 9.01 shall have occurred, shall as soon as reasonably possible call for the redemption at the lowest redemption price then current applicable to each series of Bonds so called, all the Bonds then Outstanding for payment. The provisions of 8.04 shall control the call for redemption, payment, and Cancellation of Bonds, delivery of Cancelled Bonds, and the rights of the holders of Bonds called for redemption hereunder.
8.06 Any cash of the character described in 8.02 while held by the Trustee (prior to any application thereof pursuant to either 8.03 or 8.04) shall upon receipt of a Directors' Resolution requesting such action be invested or reinvested by the Trustee to the extent permitted by law in any bonds or other obligations of the United States of America designated in said Directors' Resolution. Until one or more of the events of default specified in 9.01 shall have occurred, any interest on such bonds or other obligations which may be received by the Trustee shall be forthwith paid to the Company, except that if any of such bonds or other obligations shall have been purchased by the Trustee at an amount in excess of the principal amount thereof, all interest received upon such bonds or other obligations shall be retained by the Trustee until the amount of such interest so received and retained shall be equal to the amount of such excess thus paid by the Trustee. Such bonds or other obligations shall be held by the Trustee as a part of the Mortgaged Property. Any or all of such bonds or other obligations so held by the Trustee shall upon receipt of a Directors' Resolution requesting such action, or without the receipt of any such Directors' Resolution whenever the Trustee in its discretion shall deem such action advisable, be sold by the Trustee, but the Trustee shall be under no obligation to make any such sale unless requested by the Company. The proceeds of any such sale shall be held by the Trustee as a part of the Mortgaged Property and shall be considered as being of the character described in 8.02. In case the net proceeds (excluding any interest received by the Company and including any interest received and retained by the Trustee) realized upon any sale shall amount to less than the amount paid by the Trustee in or on account of the purchase of the bonds or obligations so sold, the Trustee shall within five (5) days after such sale notify the Company in writing thereof and within five (5) days thereafter the Company shall pay to the Trustee the amount of the difference between the amount so paid by the Trustee and such net proceeds and the amount so paid shall be held by the Trustee in like manner and subject to the same rights and obligations as the proceeds realized upon such sale. However, in case such net proceeds shall amount to more than the amount so paid by the Trustee, the Trustee shall within five (5) days of such sale pay to the Company the difference between such net proceeds and such amount so paid up to but not exceeding the total amount of interest on such bonds or obligations so sold received and retained by the Trustee.
The Trustee shall not be held responsible for any diminution in the value of any bonds or other obligations of the United States of America in which cash of the character described in 8.02 shall be invested, or for any realized loss arising from any sale or other disposition thereof.
ARTICLE IX.
Defaults and Remedies
9.01 If any one or more of the following events (herein generally termed, singly, an event of default, and as regards any two or more, or all collectively, events of default) shall occur, namely
(1) if default shall be made in the payment of any installment of interest on any of the Bonds, when and as the same shall become due and payable, as therein and herein expressed, and such default shall continue for a period of thirty (30) days; or
(2) if default shall be made in the payment of the principal of or any premium on any of the Bonds, when and as the same shall become due and payable, whether at maturity, by call for redemption, by declaration, or otherwise; or
(3) If default shall be made in the payment of any Improvement Fund installment or in the payment of any installment payable in respect of any Sinking Fund, Maintenance and Renewal Fund, Improvement Fund, or analogous fund established pursuant to the terms of any Supplemental Indenture, when and as the same shall become due and payable, as herein or therein expressed, and such default shall continue for a period of sixty (60) days; or
(4) if default shall be made by the Company in the performance or observance of any other covenant, agreement, or condition on its part to be performed or observed as expressed in the Indenture or in the Bonds, and such default shall continue for a period of sixty (60) days after written notice delivered to the Company by the Trustee, or to the Company and the Trustee by the holders of not less than twenty-five per cent (25%) in principal amount of the Bonds then Outstanding (excluding Company-owned Bonds), or forthwith upon such notice and without lapse of time if the Company shall waive the same in writing; or
(5) if the Company shall be dissolved, or shall lose its charter by forfeiture or otherwise, or shall admit in writing its inability to pay its debts generally as they become due, or shall make a general assignment for the benefit of creditors, or shall file a voluntary petition in bankruptcy or under the corporate reorganization provisions of the National Bankruptcy Act (as now or hereafter amended), or an answer admitting the material allegations of a petition filed against the Company under such provisions, or shall, by voluntary petition, answer, or consent, seek relief under the provisions of any other now existing or future bankruptcy or other law providing for the reorganization, dissolution, liquidation, or winding up of corporations on the ground of insolvency; or
(6) if an order, judgment, or decree shall be entered by any court of competent jurisdiction without the consent of the Company, adjudicating the Company to be a bankrupt or insolvent, or appointing a trustee or receiver of the Company or of the whole or any substantial part of the Mortgaged Property, and such adjudication shall not have been vacated or set aside, or the trustee or the receiver so appointed shall not have been removed or discharged, as the case may be, within sixty (60) days thereafter; or if the Company shall consent to a petition or application for its adjudication as bankrupt or insolvent, or for the appointment of a trustee or receiver of itself or the whole or any substantial part of the Mortgaged Property; or
(7) if a petition against the Company in proceedings under the corporate reorganization provisions of the National Bankruptcy Act (as now or hereafter amended) shall be approved by any court of competent jurisdiction and such approval shall not be withdrawn and the proceedings dismissed within sixty (60) days thereafter; or, if under the provisions of any other now existing or future bankruptcy or other law providing for the reorganization, dissolution, liquidation, or winding up of corporations on the ground of insolvency, any court of competent jurisdiction shall assume jurisdiction, custody, or control of the Company, or of the whole or any substantial part of the Mortgaged Property, and such jurisdiction, custody, or control shall not be relinquished or terminated within sixty (60) days thereafter;
then, if and so long as any such default shall continue to exist, the Trustee by notice in writing given to the Company, or the holders of not less than twenty-five per cent (25%) in principal amount of the Bonds then Outstanding (excluding Company-owned Bonds) by notice in writing to the Company and to the Trustee, may declare the principal of all the Bonds then Outstanding, if not already due and payable, to be immediately due and payable together with all accrued and unpaid interest thereon, and upon any such declaration, the same shall become and be immediately due and payable, anything in this Indenture or in any of the Bonds contained to the contrary notwithstanding.
This provision is subject to the condition that if, at any time after the principal shall have been so declared due and payable and before any sale of the Mortgaged Property shall have been made, all arrears of interest upon all the Bonds (with interest at the rate specified therein on any overdue installment of interest, so far as the same may be legally enforceable) and the expenses of the Trustee, its agents or attorneys shall either be paid by the Company or be collected and paid out of the Mortgaged Property, and all defaults as aforesaid (other than the payment of principal which has been declared due and payable) shall have been cured or secured or adequately provided for to the satisfaction of the Trustee, then, and in every such case, the Trustee may, and upon request of the holders of not less than a majority of the Bonds then Outstanding (excluding Company-owned Bonds) shall, waive such default and its consequences and rescind such declaration; but no such waiver shall extend to or affect any subsequent default or impair or exhaust any right or power consequent thereon. In the event of such waiver and rescission, the Mortgaged Property if in the hands of the Trustee or of a receiver appointed hereunder, shall be returned to the Company.
9.02 The Trustee shall give to the Bondholders, in the manner and to the extent provided in subsection (G) of 12.04 hereof, notice of all defaults known to the Trustee, within ninety (90) days after the occurrence thereof, unless such defaults shall have been cured or waived before the giving of such notice (the word "defaults" for the purposes of this Section being hereby defined to be the events of default specified in 9.01 hereof without waiting for the expiration of any period of grace); provided that, except in the case of default in the payment of the principal of or interest on any of the Bonds, or in the payment of any Improvement Fund installment, or in the payment of any installment payable in respect of any Maintenance and Renewal Fund, Improvement Fund or analogous fund established pursuant to the terms of any Supplemental Indenture, the Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee, or a trust committee of directors and/or Responsible Officers, of the Trustee in good faith determine that the withholding of such notice is in the interest of the Bondholders.
9.03 In case one or more of the events of default enumerated in 9.01 shall exist, then and in each and every such case the Trustee, personally or by its attorneys or agents, is hereby authorized and empowered, whether or not the principal of the Bonds shall have matured or been declared due, to exercise any one or more of the following remedies, and to do or cause to be done any or all of the following acts and things, namely:
(1) The Trustee, by its agents or attorneys, may (provided such action shall not at the time be in violation of any laws applicable to the Company or its properties) enter into and upon and take possession of any or all of the Mortgaged Property and each and every part thereof (and the books, papers, and accounts of the Company), and may exclude the Company, its successors or assigns, its or their agents, servants, and employees wholly therefrom, and have, hold, use, operate, manage, and control the same and each and every part thereof and, in the name of the Company or otherwise as the Trustee shall deem best, conduct the business thereof and exercise the franchises pertaining thereto and all the rights and powers of the Company, and from time to time, maintain, restore, insure, and keep insured the properties, plants, equipment, and apparatus provided or required for use in connection with such business and likewise, from time to time, make all such necessary or proper repairs, renewals, and replacements, and all such useful alterations, additions, betterments, and improvements as to the Trustee may seem judicious, and collect and receive all tolls, earnings, revenues, rents, issues, profits, and other income of the same and of every part thereof, and pay therefrom all proper costs and expenses of operation and all expenses incurred hereunder and all other proper outlays herein authorized, and all payments which may be made for taxes and assessments and for such other liens prior hereto and charges upon the Mortgaged Property or any part thereof as the Trustee may deem it wise to pay, and the just and reasonable compensation for the services of the Trustee and for the services of such attorneys, agents, and assistants as it may in the exercise of its discretion employ for any of the purposes aforesaid, and shall apply the rest and residue of such moneys received by it as follows:
(a) In case the principal of none of the Bonds shall have become due, to the payment of the interest in default, in the order of the maturity of the installments of such interest, with interest, so far as the same may be legally enforceable, on the overdue installments thereof at the same rates, respectively, as were borne by the Bonds on which such interest shall be in default, such payments to be made ratably to the parties en- titled thereto without discrimination or preference, subject, however, to the provisions of 2.14 and 4.02.
(b) In case the principal of any, but not all, of the Bonds, shall have become due, first to the payment of the interest in default, in the order of the maturity of the installments thereof, with interest, so far as the same may be legally enforceable, on the overdue installments thereof at the same rates, respectively, as were borne by the Bonds on which such interest shall be in default, and next to the payment of the principal of all Bonds then due, with interest on the overdue principal at the rates specified in the respective Bonds, such payments to be made ratably to the parties entitled thereto without discrimination or preference, subject, however, to the provisions of 2.14 and 4.02.
(c) In case the principal of all of the Bonds shall have become due, by declaration or otherwise, then as provided in Paragraph Second of 9.09, but subject to the condition set forth in the proviso at the close of said Section.
In case all payments provided for in paragraphs (a) and (b) above and payment of whatever may be payable for any other purpose required by any provisions of this Indenture shall have been paid in full, and no sale shall have been made as hereinafter provided, and all other defaults under this Indenture made good, the Trustee shall restore the possession of the Mortgaged Property (other than any cash and/or purchase money obligations required to be deposited with the Trustee) to the Company or whosoever shall be entitled thereto; the same right of entry to exist upon any subsequent event of default however.
(2) The Trustee may, with or without entry, collect or enforce the collection of all interest and principal payable in respect of any purchase money obligation which may at the time be held by the Trustee hereunder. Any sums so collected or received by the Trustee shall be held and applied by the Trustee in like manner as is provided in the foregoing subdivision (1) of this Section in respect of tolls, earnings, revenues, rents, issues, profits, and other income collected or received by the Trustee from or on account of the Mortgaged Property.
(3) The Trustee may (if such action shall at the time be authorized by law), with or without entry, sell, subject to the prior liens, if any, then existing thereon or free from such of said liens as the Trustee in its discretion may elect to discharge, to the highest and best bidder, all and singular the Mortgaged Property and the right, title, interest, claim, and demand of the Company therein and thereto, and the right of redemption thereof, at public auction, at such times and places and upon such conditions as to upset or reserve bids or prices and as to terms of payment and other terms of sale as the Trustee may fix and briefly specify in the notice of sale to be given as hereinafter provided, or as may be required by law, including power and authority to the Trustee to rescind or vary any contract of sale that may be entered into and to resell under the powers herein conferred.
(4) The Trustee may proceed to protect and enforce its rights and the rights of the Bondholders under this Indenture by a suit or suits in equity or at law, whether for the specific performance of any covenant or agreement contained in this Indenture, or in aid of the execution of any power granted in this Indenture, or for the foreclosure of this Indenture, or for the enforcement of any other appropriate legal or equitable remedy as the Trustee being advised by counsel, shall, subject to the provisions of 13.02 and 13.03, deem most effectual to protect and enforce any of the rights aforesaid.
9.04 Upon filing a bill in equity or upon other commencement of judicial proceedings by the Trustee to enforce any right under this Indenture, the Trustee shall be entitled to exercise any and all other rights and powers herein conferred and provided to be exercised by the Trustee upon the occurrence of an event of default as defined in 9.01; and, as a matter of right, without notice or demand and without regard to the adequacy of the security for the Bonds, the Trustee shall be entitled to the appointment of a receiver of the Mortgaged Property, and of the tolls, earnings, revenues, rents, issues, profits, and other income thereof, with all such powers as the court or courts making such appointment shall confer; but notwithstanding the appointment of any receiver, the Trustee shall be entitled to retain possession and control of, and to collect and receive the income from, any moneys or purchase money obligations which may at the time be held by it hereunder.
9.05 In the event of any such sale, whether made under the power of sale herein conferred, or under or by virtue of judicial proceedings, the whole of the Mortgaged Property shall be sold in one parcel as an entirety, including the franchises and business of the Company and the right to use its corporate name, unless such sale as an entirety is, in the judgment of the Trustee, impracticable by reason of some statute or other reason, or unless the holders of a majority in principal amount of the Bonds then Outstanding (excluding Company-owned Bonds) shall file with the Trustee a Bondholders' Request from the holders of not less than the majority of such Bonds to cause the Mortgaged Property to be sold in parcels, in which case, unless prevented by statute or some other cause, the sale shall be made in such parcels and in such order as may be specified in such Request. The Company for itself and all persons and corporations hereafter claiming from, through, or under it or who may at any time hereafter become holders of liens junior to the Lien of this Indenture, hereby expressly waives and releases all right to have the Mortgaged Property marshalled upon any foreclosure or other enforcement hereof, and the Trustee, or any court in which the foreclosure of this Indenture or administration of the trusts hereby created is sought, shall have the right as aforesaid to sell the Mortgaged Property as a whole in a single parcel.
9.06 Notice of any sale pursuant to the provisions of this Indenture shall state the time and place when and where the same is to be held, shall contain a brief description of the property to be sold, and shall briefly state the terms of sale, and shall be sufficient if given by Published Notice once a week for four successive weeks prior to such sale, the first publication to be not less than thirty (30) days prior to such sale, and in such other manner as may be required by law. The Trustee may adjourn from time to time any such sale by announcement at the time and place appointed for such sale, or for such adjourned sale or sales; and without further notice or publication (unless otherwise required by law) it may make such sale at the time and place to which the same shall be so adjourned or readjourned.
9.07 Upon any sale, as aforesaid, whether made under the power of sale hereby conferred or under or by virtue of judicial proceedings, any Bondholders or the Trustee may bid for and purchase the property offered for sale, or any part thereof, and upon compliance with the terms of sale, may hold and dispose of such property in their own or its own absolute right, without further accountability; and any purchaser at any such sale, for the purpose of making settlement or payment for the property purchased, shall be entitled to use and apply any Bonds then Outstanding, and any matured and unpaid coupons appertaining thereto or claims for interest thereon, by presenting the same so that there may be credited, as paid thereon, the sums payable out of the net proceeds of such sale to the holder of such Bonds and coupons or claims as his ratable share of such net proceeds after allowing for the proportions of the total purchase price required to be paid in cash for the cost and expenses of the sale, compensation, and other charges; and thereupon such purchaser shall be credited on account of such purchase price payable by him with that portion of such net proceeds which shall be applicable to the payment of, and which shall have been credited upon, the Bonds and coupons and claims so presented. The provisions of this Section are subject to the provisions of 2.14 and 4.02.
9.08 Upon the completion of any sale or sales under or by virtue of this Indenture, the Trustee shall execute and deliver to the accepted purchaser or purchasers a good and sufficient deed or deeds of conveyance, sale, and transfer of all the property sold; and the Trustee, or its successor for the time being, is hereby irrevocably appointed the true and lawful attorney of the Company, its successors or assigns, in its or their name or names and stead, to make all necessary deeds, conveyances, assignments, and transfers of the property thus sold; and for that purpose it may execute all necessary deeds and instruments of assignment and transfer, and may substitute one or more persons with like power, the Company for itself, its successors or assigns, hereby ratifying and confirming all that its said attorney, or such substitute or substitutes, shall lawfully do by virtue hereof. Nevertheless, if so requested by the Trustee, the Company shall ratify and confirm any such sale or transfer by executing and delivering to the Trustee or to such purchaser or purchasers all such instruments as may be necessary or in the judgment of the Trustee proper for the purpose and as may be designated in any such request.
Any such sale or sales made under or by virtue of this Indenture, whether under the power of sale herein granted or by virtue of judicial proceedings, shall, to the extent permitted by law, operate to divest all right, title, interest, claim, and demand whatsoever, either at law or in equity, of the Company, in and to the property so sold, and shall be a perpetual bar, both at law and in equity, against the Company, its successors and assigns, and against any and all persons claiming or who may claim the property sold, or any part thereof, from, through, or under the Company, or its successors and assigns.
The receipt of the Trustee, or of the court officer conducting any such sale, for the purchase money paid at or under any such sale, shall be a full and sufficient discharge to any purchaser of any property sold as aforesaid; and no purchaser, or his representatives, grantees, or assigns, after paying such purchase money and receiving such receipt, shall be bound to see to the application of such purchase money upon or for any trust or purpose of this Indenture, or in any manner whatsoever be answerable for any loss, misapplication, or non-application of any such purchase money or any part thereof, or be bound to inquire as to the authorization, necessity, expediency, or regularity of any such sale.
9.09 The purchase money, proceeds, and avails of any sale, whether made under the power of sale herein granted or pursuant to judicial proceedings, together with any such sums which then may be held by the Trustee under any provision of this Indenture as part of the Mortgaged Property, shall be applied in the following order:
First. To or towards the payment of the costs and expenses of such sale and reasonable compensation of the Trustee, its agents, attorneys, and counsel, and of all necessary or proper expenses, liabilities, and advances made or incurred by the Trustee, without negligence or bad faith, under this Indenture or in executing any power or trust hereunder, and to the payment of all taxes, assess- ments, or liens superior to the Lien of this Indenture, except any taxes, assessments, or other superior liens subject to which such sale shall have been made.
Second. To the payment of the whole amount due and unpaid at the time of distribution upon the Bonds then Outstanding for principal and any premium which shall have become payable on any Bonds theretofore called for redemption, and interest, with interest, so far as the same may be legally enforceable, on overdue principal and overdue installments of interest at the same rates, respectively, as were borne by the respective Bonds, and, in case such proceeds shall be insufficient to pay in full the whole amount so due and unpaid upon the Bonds, then to the payment of such principal (but not including any premium) and interest, without preference or priority of principal over interest, or of interest over principal, or of any installment of interest over any other installment of interest, or of the Bonds of any series over the Bonds of any other series, ratably to the aggregate of such principal and unpaid interest, subject, however, to the provisions of 2.14 and 4.02, and any balance then remaining to the payment ratably of any such premiums. Such payments shall be made on the date fixed therefor by the Trustee upon presentation of the several Bonds and coupons and stamping such payment thereon, if partly paid, and upon surrender and cancellation thereof, if fully paid; and
Third. To the payment of the surplus, if any, to the Company, its successors or assigns, or to whosoever may be lawfully entitled to receive the same, or as a court of competent jurisdiction may direct;
provided, however, that if at the time of any such application by the Trustee any Bonds shall be Outstanding, and if the Trustee shall have in its hands Sinking Fund, Maintenance and Renewal Fund, Improvement Fund, or analogous fund moneys for the benefit of any particular series of Bonds then Outstanding hereunder, such moneys shall be added to the amount or amounts otherwise distributable pursuant to Paragraph Second hereof to the holders of the Bonds of such particular series, (but not to an amount such that said holders shall receive a sum in excess of the whole amount due and unpaid at the time of distribution upon Bonds held by them) and shall be divided ratably among them, subject however, to the provisions of 2.14 and 4.02.
9.10 In case of any sale of the Mortgaged Property, or any part thereof, under this Article IX, whether made under the power of sale herein granted, or by virtue of judicial proceedings, the principal of and accrued interest on all the Bonds then Outstanding, if not already due, shall immediately become due and payable, anything in the Bonds or in this Indenture to the contrary not withstanding.
9.11 The Company covenants that
(1) in case it shall fail to pay interest on any Bond for a period of thirty (30) days after such interest shall have become due and payable; or
(2) in case it shall fail to pay the principal or premium, if any, of any Bond when and as the same shall become due and payable, whether by the terms thereof or otherwise as herein provided,
then, and upon demand of the Trustee, the Company will pay to the Trustee at its office, for the benefit of the holders of the Bonds and coupons then Outstanding, the whole amount then due and unpaid thereon, for principal, premium, or interest, as the case may be, with interest at the rate specified in such Bonds upon the overdue principal and the overdue installments of interest, so far as the same may be legally enforceable, and, in case the Company shall fail to pay the same forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, shall be entitled to recover judgment against the Company for the whole amount of such principal, premium, and interest remaining unpaid.
The Trustee shall be entitled and empowered either in its own name and as trustee of an express trust, or as attorney-in-fact for the bearers or registered owners of the Bonds and coupons, or in any one or more such capacities, to make and file such proofs of debt, amendments to proofs of debt, claims, petitions, or other documents as may be necessary or advisable in order to have the claims of the bearers or registered owners of the Bonds and coupons allowed in any equity receivership, insolvency, bankruptcy, liquidation, readjustment, reorganization, or other proceeding involving any distribution of the assets of the Company or any other Obligor upon the Bonds to its creditors, or in any judicial proceedings relative to the Company or such other Obligor, its creditors, or its property.
The Trustee is hereby irrevocably appointed (and the successive bearers or registered owners of the Bonds and coupons issued hereunder, by taking and holding the same, shall be conclusively deemed to have so appointed the Trustee) the true and lawful attorney-in-fact of the respective bearers and registered owners of the Bonds and coupons issued hereunder, with authority to make and file in any judicial proceeding, either in the respective names of the bearers and registered owners of the Bonds and/or coupons, or on behalf of all the bearers and registered owners of the Bonds and/or coupons as a class (subject to deduction from any such claim of the amounts of any claims filed by any of the bearers and registered owners of the Bonds and/or coupons themselves), any proof of debt, amendment to proof of debt, claim, petition, or other document; to receive payment of any sums becoming distributable on account thereof; and to execute any other papers and documents and to do and perform any and all such acts and things as may be necessary or advisable in the opinion of the Trustee in order to have the respective claims of the bearers and registered owners of the Bonds and/or coupons against the Company or any other Obligor upon the Bonds allowed in any equity receivership, insolvency, bankruptcy, liquidation, or other proceedings to which the Company or any such other Obligor shall be a party or which relates to the Company or any such other Obligor, or to the creditors or property of the Company or any such other Obligor. The Trustee shall have full power of substitution and delegation in respect of any such powers.
Nothing herein shall be deemed, however, to give power to the Trustee to vote the claims of the holders of the Bonds or coupons in any such proceedings, or to accept or consent to any plan of reorganization, readjustment, arrangement, or composition or other like plan, or by other action of any character in any such proceeding to waive or change any right of any holder of the Bonds or coupons.
The Trustee shall be entitled to recover judgment or make or file proof of debt as aforesaid either before or after or during the pendency of any proceedings for the enforcement of the Lien of this Indenture, and the right of the Trustee to recover such judgment or make such proof of debt shall not be affected by any entry or sale hereunder or by the exercise of any other right, power, or remedy for the enforcement of the provisions of this Indenture or the foreclosure of the Lien hereof. In case of a sale of the Mortgaged Property and of the application of the proceeds of sale to the payment of the Bonds, the Trustee, in its own name and as trustee of an express trust, shall be entitled to enforce payment of, and to receive, all amounts then remaining due and unpaid upon any and all of the Bonds and coupons then Outstanding, for the benefit of the holders thereof, and shall be entitled to recover judgment or make or file proof of debt for any portion of the same remaining unpaid, with interest as aforesaid. No recovery of any such judgment by the Trustee or any attachment or levy of execution under any such judgment upon the Mortgaged Property or any part thereof, or upon any other property, nor any such proof of debt, shall in any manner or to any extent affect the Lien of this Indenture upon the Mortgaged Property or any part thereof or any lien, rights, powers, or remedies of the Trustee hereunder or of the holders of the Bonds; but such Lien, lien, rights, powers, and remedies shall continue unimpaired as before.
All moneys collected by the Trustee under this Section shall be applied as follows:
First. To the payment of the costs and expenses of the pro- ceedings resulting in the collection of such moneys, the reasonable compensation of the Trustee, its agents, attorneys, and counsel and of necessary or proper expenses, liabilities, and advances made or incurred by the Trustee, without negligence or bad faith, under this Indenture or in executing any trust or power hereunder; and
Second. To the payment of the amounts then due and unpaid upon the Bonds for principal, premium (if any) and interest in respect whereof such moneys shall have been collected, ratably and without any preference or priority of any kind (except as provided in 2.14 and 4.02) according to the amounts due and payable upon such Bonds and for interest, respectively, to the date filed by the Trustee for the distribution of such moneys, upon presentation of the several Bonds and coupons, if any, and stamping such payment thereon, if partly paid, and upon surrender and cancellation thereof, if fully paid.
9.12 The Trustee shall have power to institute and to maintain such suits and proceedings as the Trustee being advised by counsel may deem necessary or expedient to prevent any impairment of the security hereunder by any acts of the Company which are in violation of this Indenture or are unlawful, or as the Trustee being advised by counsel may deem necessary or expedient to preserve or protect its interest and the interests of the Bondholders in respect of the Mortgaged Property, and in respect of the tolls, earnings, revenues, rents, issues, profits and other income arising therefrom, including the power to institute and to maintain suits or proceedings to restrain the enforcement of, or compliance with, or the observance of, any legislative, municipal, or other governmental enactment, rule, or order that may be unconstitutional or otherwise invalid, if the enforcement of, compliance with, or observance of, such enactment, rule, or order would impair the security hereunder or be prejudicial to the interests of the Bondholders or of the Trustee.
9.13 Upon failure of the Company so to do, either any receiver appointed hereunder, or the holders of not less than twenty-five percent (25%) in principal amount of the Bonds then Outstanding (excluding Company-owned Bonds) may make any payment (other than of the principal or interest in respect of the Bonds and/or sums due pursuant to the Improvement Fund, or to the terms of any Sinking Fund, Maintenance and Renewal Fund, Improvement Fund or any analogous fund if any, in respect of the Bonds) which the Company by any provision of this Indenture agrees to make or cause to be made, and the Company covenants and agrees that it will forthwith repay to such receiver or to the Bondholders all moneys which such receiver or the Bondholders shall so pay, and will pay interest thereon from the date of such payment by such receiver or the Bondholders until the repayment thereof at the current rate for time loans; and until so paid, such advances shall be secured by a lien under and by virtue of this Indenture upon the Mortgaged Property, in preference to the Bonds and coupons issued hereunder. No such payment by any such receiver or by the Bond holders shall be deemed to relieve the Company from the consequence of any default hereunder.
9.14 In case of a default on its part, neither the Company nor any one claiming from, through, or under it shall or will take advantage of any appraisement, valuation, stay, extension, or redemption laws now or hereafter in force in any locality where any property subject to the Lien hereof may be situated, in order to prevent or hinder the enforcement or foreclosure of this Indenture, or the absolute sale of the Mortgaged Property, or the final and absolute putting into possession thereof, immediately after such sale, of the purchaser or purchasers thereat, and the Company, for itself and all who may claim through or under it, hereby waives the benefit of all such laws, and the Company covenants it will not hinder, delay, or impede the execution of any power herein granted or delegated to the Trustee, or which the Trustee may otherwise have, but that the Company will suffer and permit the execution of every such power, as though no such law or laws had been made or enacted.
9.15 The Company, for itself, its successors and assigns, hereby expressly covenants to and with the Trustee that, at and immediately upon the commencement of any action, suit, or other legal proceeding by the Trustee (1) to obtain possession of the Mortgaged Property, or any part thereof, the Company, its successors and assigns, shall and will, severally, waiving the issuance and service of process, enter its or their voluntary appearance in such action, suit, or proceeding, and consent to the entry of a judgment for the recovery and possession of the Mortgaged Property and every part thereof; (2) for the foreclosure of the Lien of this Indenture, the Company, its successors and assigns, shall and will, severally, waiving the issuance and service of process, enter its or their voluntary appearance in such action, suit, or proceeding and consent to the appointment of a receiver of the Mortgaged Property and the tolls, earnings, revenues, rents, issues, profits, and other income thereof for the sole benefit of the holders of the Bonds; and (3) pursuant to the provisions hereof, to obtain judgment for the principal of or interest on any of the Bonds or for both, or to obtain a judgment or decree of any other nature in aid of the enforcement of the Bonds or coupons or any of them, or of this Indenture, the Company, its successors or assigns, shall and will, severally, waiving the issuance and service of process, enter its or their voluntary appearance in such action, suit, or proceeding and consent to the entry of a judgment for such principal and/or interest, with interest on overdue principal and installments of interest, so far as the same may be legally enforceable, and for the lawful costs and expenses and compensation of the Trustee and its agents and attorneys and for such other relief as the Trustee may be entitled to under the provisions hereof.
9.16 In the event of default, anything in this Indenture to the contrary notwithstanding, the holders of not less than a majority in aggregate principal amount of the Bonds then Outstanding (excluding Company-owned Bonds) shall, upon filing with the Trustee a Bondholders' Notice and a Bondholders' Request from the holders of such majority of such Bonds, have the right (1) to require the Trustee to proceed to enforce the Lien of this Indenture, either by suit or suits at law or in equity for the enforcement of the payment of the Bonds then Outstanding hereunder and for the foreclosure of this Indenture and for the sale of the Mortgaged Property under the judgment or decree of a court of competent jurisdiction, or at the election of the Trustee by exercise of its powers with respect to entry or sale, and (2) to direct and control the time, method, and place of conducting any and all proceedings hereby authorized for any sale of the Mortgaged Property, or any adjournment thereof, or for the foreclosure of this Indenture, or for the appointment of a receiver, or any other action or proceeding hereunder instituted by the Trustee, provided, however, that such direction shall not be otherwise than in accordance with the provisions of law and this Indenture, and the Trustee shall not be responsible to anyone for any action taken or omitted by it in good faith pursuant to any such direction; and, provided further, that, subject to the provisions of 13.02 and 13.03, the Trustee shall have the right to decline to follow any such requirement or direction if it shall be advised by counsel that the action or proceeding so directed may not be lawfully taken or if the Trustee in good faith shall by Responsible Officers determine that the action or proceeding so directed would involve it in personal liability or be unjustifiably prejudicial to the non-assenting Bondholders, or that it will not be sufficiently indemnified for any expenditures in any action or proceeding so directed.
9.17 In so far as not contrary to any Bondholders' Notice and Bondholders' Request pursuant to 9.16, but notwithstanding anything else in this Indenture to the contrary, in case more than one series of Bonds be Outstanding hereunder and an event of default shall have happened because of any default in the payment of the principal of, or of the interest on, or of any Sinking Fund, Maintenance and Renewal Fund, Improvement Fund, or analogous fund installment in respect of, the Bonds of any one or more of such series and not in respect of the Bonds of one or more of the other series, and such event of default shall be subsisting, then whatever action in this article it is provided may or shall be taken upon the happening of such an event of default (continuing or subsisting as in this Indenture provided) by or upon the request of the holders of a specified percentage in principal amount of Bonds then Outstanding (excluding Company-owned Bonds), may or shall be taken, in respect of the Bonds then Outstanding of the series as to which such default shall have been made, by or upon the request of the holders of a majority in principal amount of the Bonds then Outstanding (excluding Company-owned Bonds) of the series as to which such default shall have been made.
9.18 No holder of any Bond, or of any coupon or claim for interest thereto appertaining, shall have the right to institute any suit, action, or proceeding at law or in equity for the foreclosure of this Indenture or for the execution of any trust or power hereof or for the appointment of a receiver or for the enforcement of any other remedy hereunder unless there shall previously have been filed with the Trustee a Bondholders' Notice and a Bondholders' Request pertaining to enforcement of this Indenture by the Trustee and unless there shall have been offered to the Trustee security and indemnity satisfactory to it against the costs, expenses, and liabilities to be incurred pursuant to such Notice and Request without negligence or bad faith and unless the Trustee shall have failed to act after a reasonable period, not exceeding sixty (60) days after receipt of such Notice and Request, and such Notice and Request are hereby declared to be conditions precedent to any such action or proceedings, all to the end that the rights of the Trustee and the equal and ratable rights of every holder of the Bonds shall be protected and multiplicity of suits shall be avoided. Notwithstanding any other provisions hereof, the right of any Bondholder to receive payment of the principal of and interest on any of his Bonds on or after the respective due dates expressed in the Bonds and coupons, or to institute suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such holder; provided, however, that no Bondholder may institute any such suit if and to the extent that the institution or prosecution thereof or the entry of judgment herein would, under applicable law, result in the surrender, impairment, waiver, or loss of the Lien of this Indenture on any property subject to such Lien.
For the enforcement of the foregoing provisions of this Section and for the protection of their rights hereunder, each and every holder of Bonds, and the Trustee, shall be entitled to such relief as can be given either at law or in equity.
9.19 Except as herein expressly provided to the contrary, no remedy herein conferred upon or reserved to the Trustee or to the holders of the Bonds is intended to be exclusive of any other remedy, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute; and the employment of any remedy hereunder or otherwise shall not prevent the concurrent employment of any other appropriate remedy or remedies.
9.20 No delay or omission of the Trustee or of any holder of Bonds to exercise any right or power upon the happening of any event of default (as defined in 9.01) shall impair any such right or power or shall be construed to be a waiver thereof or an acquiescence therein, nor shall the action of the Trustee, or of the Bondholders, in case of any event of default and the subsequent waiver thereof, affect or impair the rights of the Trustee, or of such holders, in respect of any subsequent event of default on the part of the Company or impair any right resulting therefrom; and every right, power, and remedy given by this article to the Trustee, or to the Bondholders, respectively, may, subject to the provisions of 9.18, be exercised from time to time and as often as may be deemed expedient by the Trustee, or by the Bondholders.
All rights of action under this Indenture (including the making and filing of proofs of debt, and taking any action necessary or advisable in order to have the claims of bearers and registered owners of Bonds allowed in any proceedings) may be enforced by the Trustee without the possession of any of the Bonds or coupons or the production thereof on the trial or other proceedings, and any such suit or proceedings instituted by the Trustee shall be brought in its name.
9.21 In any proceeding in law or equity brought by the Trustee (including also any proceeding involving the interpretation of any provision of this Indenture to which the Trustee shall be a party), the Trustee shall be held to represent all the holders of Bonds and coupons secured by this Indenture, and it shall not be necessary to make such holders parties to any such proceeding.
ARTICLE X.
Evidence of Rights of Bondholders and Ownership of Bonds
10.01 Any Request, Notice, declaration, or other instrument, which this Indenture may require or permit to be signed and executed by the Bondholders, may be in any number of concurrent instruments of similar tenor, and may be signed or executed by such Bondholders in person or by attorney appointed in writing. Proof of the execution of any such Request or other instrument, or of a writing appointing any such attorney, or of the holding by any person of the Bonds or coupons appertaining thereto, may be accepted by the Company or by the Trustee, as sufficient for any purpose of this Indenture if made in the following manner:
(a) The fact and date of the execution by any person of such Request or other instrument or writing may be proved by the cer- tificate under his official seal of any notary public, or other officer authorized to take acknowledgments of deeds to be recorded in the jurisdiction wherein he purports to act, that the person signing such Request or other instrument acknowledged to him the execution thereof, or by an affidavit of a witness of such execution;
(b) The amount of Bonds transferable by delivery held by any person executing such Request or other instrument as a Bondholder, and the series and serial numbers thereof held by such person and the date of his holding the same, may be proven by a certificate executed by any trust company, bank, banker, or other depositary wherever situated, if such certificate shall be deemed by the Trustee to be satisfactory, showing that at the date therein mentioned such person had on deposit with such depositary the Bonds described in such certificate, and such holding may be deemed by the Trustee and the Company to continue until written notice to the contrary is served upon the Trustee. The Company and the Trustee may nevertheless in their separate discretion require further proof in cases where they deem further proof desirable. The ownership of registered Bonds (whether fully registered, or registered as to principal only) shall be proved by the registry books.
Any Request, Notice, consent or vote of the holder of any Bond shall bind all future holders of the same Bond or any Bond or Bonds issued in lieu thereof, in respect of anything done or suffered by the Company or by the Trustee in pursuance thereof or in reliance thereon.
ARTICLE XI.
Immunity of Incorporators, Stockholders, Officers and Directors
11.01 No recourse under or upon any obligation, covenant, or agreement contained in this Indenture, or in any Bond or coupon hereby secured, for the payment of the principal of, premium, if any, or interest on, any of the Bonds hereby secured, or for any claim based thereon, or otherwise in any manner in respect thereof, shall be had against any incorporator, stockholder, subscriber to capital stock, officer, or director, as such, former, present, or future, of the Company, or of any successor corporation, either directly, or indirectly through the Company or any predecessor or successor corporation or the Trustee by the enforcement of any assessment or by any legal or equitable proceeding by virtue of any constitution, statute, or otherwise (including without limiting the generality of the foregoing, any proceeding to enforce any claimed liability of stockholders of the Company, based upon any theory that the Company was acting as the agent or instrumentality of the stock- holders); it being expressly agreed and understood that this Indenture, and the obligations hereby secured, are solely corporate obligations, and that no personal liability whatever shall attach to, or be incurred by, the incorporators, stockholders, subscribers to capital stock, officers, or directors, as such, of the Company, or of any successor corporation, or any of them, on account of the indebtedness hereby authorized, or under or by reason of any of the obligations, covenants, or agreements contained in this Indenture or in any of the Bonds or coupons hereby secured, or implied therefrom, and that any and all such personal liability of every name and nature, and any and all such rights and claims against every such incorporator, stockholder, subscriber to capital stock, officer, or director, as such, whether arising at common law or in equity, or created by constitution, statute, contract of subscription, or otherwise, are expressly released and waived as a condition of, and as part of the consideration for, the execution of this Indenture and the issue of the Bonds and interest obligations secured hereby.
ARTICLE XII.
Bondholders' Lists and Reports by the Company and the Trustee
12.01 The Company covenants and agrees that it will furnish or
cause to be furnished to the Trustee not less than forty-five (45) nor more
than sixty (60) days after each interest payment date on Bonds of each
series from time to time Outstanding, and at such other times as the
Trustee may request in writing, a list in such form as the Trustee may
reasonably require containing all the information in the possession or
control of the Company or of any of its paying agents other than the
Trustee, as to the names and addresses of the holders of Bonds of the
series on which interest was payable not less than forty-five (45) nor more
than sixty (60) days prior to such filing obtained since the date as of
which the next previous list, if any, relating to Bonds of that series was
furnished. Any such list may be dated as of a date not more than fifteen
(15) days prior to the time such information is furnished or caused to be
furnished, and need not include information received after such date.
12.02
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses
of the holders of Bonds (1) contained in the most recent list
furnished to it as provided in 12.01, (2) received by it in the
capacity of paying agent hereunder if and when acting in such
capacity, and (3) filed with it within the two (2) preceding years
pursuant to the provisions of paragraph (2) of subsection (c) of
12.04. The Trustee may (1) destroy any list furnished to it as
provided in 12.01 upon receipt of a new list so furnished;
(2) destroy any information received by it as paying agent for any
series of Bonds upon delivering to itself as Trustee, not earlier
than forty-five (45) days after an interest payment date of the Bonds
of such series, a list containing the names and addresses of the
holders of Bonds obtained from such information since the delivery of
the next previous list, if any, with respect to such series;
(3) destroy any list delivered to itself as Trustee which was
compiled from information received by it as such paying agent upon
the receipt of a new list so delivered with respect to the same
series; and (4) destroy any information received by it pursuant to
the provisions of paragraph (2) of subsection (c) of 12.04, but not
until two (2) years after such information has been filed with it.
(b) In case three or more holders of Bonds (hereinafter in this
subsection referred to as "applicants") apply in writing to the
Trustee, and furnish to the Trustee reasonable proof that each such
applicant has owned one or more Bonds for a period of at least six
(6) months preceding the date of such application, and such
application states that the applicants desire to communicate with
other holders of Bonds with respect to their rights under this
Indenture or under the Bonds, and is accompanied by a copy of the
form of proxy or other communication which such applicants propose to
transmit, then the Trustee shall, within five (5) business days after
the receipt of such application, at its election either
(1) afford to such applicants access to the information preserved at the time by the Trustee in accordance with the provisions of subsection (a) of this Section; or
(2) inform such applicants as to the approximate number of holders of Bonds whose names and addresses appear in the infor- mation preserved at the time by the Trustee, in accordance with the provisions of subsection (a) of this Section, and as to the approximate cost of mailing to such Bondholders the form of proxy or other communication, if any, specified in such application.
If the Trustee shall elect not to afford to such applicants access to such information, the Trustee shall, upon the written request of such applicants, mail to each Bondholder whose name and address appear in the information preserved at the time by the Trustee in accordance with the provisions of subsection (a) of this Section, a copy of the form of proxy or other communication which is specified in such request, with reasonable promptness after a tender to the Trustee of the material to be mailed and of payment or provision for the payment of the reasonable expenses of mailing, unless within five (5) days after such tender the Trustee shall mail to such applicants and file with the Securities and Exchange Commission, together with a copy of the material to be mailed, a written statement to the effect that, in the opinion of the Trustee, such mailing would be contrary to the best interests of the holders of Bonds, or would be in violation of applicable law. Such written statement shall specify the basis of such opinion. If said Commission, after opportunity for a hearing upon the objections specified in the written statement so filed, shall enter an order refusing to sustain any of such objections or if, after the entry of an order sustaining one or more of such objections, said Commission shall find, after notice and opportunity for a hearing, that all objections so sustained have been met and shall enter an order so declaring, the Trustee shall mail copies of such material to all such Bondholders with reasonable promptness after the entry of such order and the renewal of such tender; otherwise the Trustee shall be relieved of any obligation or duty to such applicants respecting their application.
(c) The Trustee shall not be held accountable by reason of the
mailing of any material pursuant to any request made under subsection
(b) of this Section or the disclosure of any information as to the
names and addresses of the holders of Bonds in accordance with the
provisions of said subsection (b), regardless of the source from
which such information was derived.
12.03 The Company covenants and agrees
(1) to file with the Trustee, within fifteen (15) days after the Company is required to file the same with the Securities and Exchange Commission, copies of the annual reports and of the information, documents, and other reports (or copies of such portions of any of the foregoing as such Commission may from time to time by rules and regulations prescribe) which the Company may be required to file with such Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934; or, if the Company is not required to file information, documents, or reports pursuant to either of such Sections, then to file with the Trustee and the Securities and Exchange Commission, in accordance with such rules and regulations as may be prescribed from time to time by said Commission, such of the supplementary and periodic information, documents, and reports which may be required pursuant to Section 13 of the Securities Exchange Act of 1934 in respect of a security listed and registered on a national securities exchange as may be prescribed from time to time by such rules and regulations;
(2) to file with the Trustee and the Securities and Exchange Commission, in accordance with the rules and regulations prescribed from time to time by said Commission, such additional information, documents, and reports with respect to compliance by the Company with the conditions and covenants provided for in this Indenture as may be required from time to time by such rules and regulations; and
(3) to transmit to the holders of Bonds in the manner and to the extent provided in subsection (c) of 12.04 with respect to reports pursuant to subsection (a) of 12.04, such summaries of any information, documents, and reports required to be filed by the Company pursuant to subsections (1) and (2) of this Section as may be required by the rules and regulations prescribed from time to time by the Securities and Exchange Commission.
12.04
(a) The Trustee shall transmit within sixty (60) days after May 15 in each year beginning with the year 1955, to the Bondholders as hereinafter in this Section provided, a brief report dated as of such May 15 with respect to
(1) its eligibility and qualifications under 4.03(a), 13.01 and 13.14 or in lieu thereof, if to the best of its knowledge the Trustee has continued to be eligible and qualified under such Sections, a written statement to such effect;
(2) the character and amount of any advances (and if the Trustee elects so to state, the circumstances surrounding the making thereof) made by the Trustee as such which remain unpaid on the date of such report, and for the reimbursement of which the Trustee claims or may claim a lien or charge prior to that of the Bonds on the Mortgaged Property or on property or funds held or collected by it as Trustee, except that the Trustee shall not be required (but may elect) to state such advances if such advances so remaining unpaid aggregate not more than one-half of one percentum (1/2%) of the principal amount of the Bonds outstanding on the date of such report;
(3) the amount, interest rate, and maturity date of all other indebtedness owing by the Company or any other Obligor on the Bonds to the Trustee in its individual capacity on the date of such report, with a brief description of any property held as collateral security therefor, except an indebtedness based upon a creditor relationship arising in any manner described in subparagraphs (2), (3), (4) or (6) of subsection (b) of 13.15;
(4) the property and funds physically in the possession of the Trustee, as such, or of a depositary for the Trustee, on the date of such report;
(5) any release, or release and substitution, of property subject to the lien of this Indenture (and the consideration therefor, if any) which it has not previously reported; provided, however, that to the extent that the aggregate value as shown by the release papers of any or all of such released properties does not exceed an amount equal to one percentum (1%) of the aggregate principal amount of Bonds then outstanding, the report need only indicate the number of such releases, the total value of property released as shown by the release papers, the aggregate amount of cash and obligations secured by purchase money mortgages received and the aggregate value of property received in substitution therefor as shown by the release papers;
(6) any additional issue of Bonds which it has not previously reported; and
(7) any action taken by the Trustee in the performance of its duties under this Indenture which it has not previously reported and which in its opinion materially affect the Bonds or the Mortgaged Property, except action in respect of a default notice of which has been or is to be withheld by it in accordance with the provisions of 9.02.
(b) The Trustee shall transmit to the Bondholders as hereinafter provided, within ninety (90) days after the making of any release, release and substitution, or advance as hereinafter specified, a brief report with respect to
(1) the release, or release and substitution of property subject to the Lien of this Indenture (and the consideration therefor, if any) unless the Fair Value of such property, as set forth in the certificates or opinions required by 7.03, 7.04, or 7.05, is less than ten percentum (10%) of the principal amount of Bonds outstanding at the time of such release, or release and substitution; and
(2) the character and amount of any advances (and if the Trustee elects so to state, the circumstances surrounding the making thereof) made by the Trustee, as such, since the date of the last report transmitted pursuant to the provisions of subsection (a) of this Section (or if no such report has yet been so transmitted, since the date of execution of this Indenture), for the reimbursement of which the Trustee claims or may claim a lien or charge prior to that of the Bonds on the Mortgaged Property or on property or funds held or collected by it as Trustee, and which it has not previously reported pursuant to this paragraph, except that the Trustee shall not be required (but may elect) to report such advances if such advances remaining unpaid at any time aggregate not more than ten percentum (10%) of the principal amount of Bonds outstanding at such time.
(c) Reports pursuant to this Section shall be transmitted by mail
(1) to all registered holders of Bonds, as the names and addresses of such holders appear upon the registration books of the Company;
(2) to such holders of Bonds as have, within two (2) years preceding such transmission, filed their names and addresses with the Trustee for that purpose; and
(3) except in the case of reports pursuant to subsection
(b) of this Section, to each Bondholder whose name and address
is preserved at the time by the Trustee as provided in
subsection (a) of 12.02.
(d) At the time of the transmission to the Bondholders of any report pursuant to this Section, a copy of such report shall be filed by the Trustee with each securities exchange upon which the Bonds are listed, and also with the Securities and Exchange Commission and with the Company. The Company covenants that it will immediately notify the Trustee of the name and address of each securities exchange upon which the Bonds of any series shall be listed.
(e) For the purposes of this Section all Bonds which have been certified and delivered and not returned to the Trustee and Cancelled shall be deemed to be Outstanding.
ARTICLE XIII.
Concerning the Trustee and Its Paying Agents
13.01 The Trustee shall at all times be a bank or trust company eligible under 4.03(a) and having a combined capital and surplus of at least five million dollars ($5,000,000). If the Trustee publishes reports of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority referred to in 4.03(a), then for the purposes of this Section the combined capital and surplus of the Trustee shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. No bond shall be required of the Trustee unless ordered by a court having jurisdiction and for cause shown.
13.02 The Trustee hereby accepts the trust hereby created. The Trustee undertakes, prior to an event of default as defined in 9.01 and after all events of default which may have occurred shall have ceased to be continuing or shall have been waived, to perform such duties and only such duties as are specifically set forth in this Indenture, and after and during the continuance of such an event of default which shall not have been waived, to exercise such of the rights and powers vested in it by this Indenture and to use the same degree of care and skill in their exercise as a prudent man would exercise or use under the circumstances in the conduct of his own affairs.
For the purposes of this 13.02 and of 13.03, a default shall be deemed to have ceased to be continuing when the act or omission or other event giving rise to such default shall have been cured, remedied or terminated. If a default is waived as provided in 9.01 such default shall be deemed to have been cured.
The Trustee, upon receipt of evidence furnished to it by or on behalf of the Company pursuant to any provision of this Indenture, shall examine the same to determine whether or not such evidence conforms to the requirements of this Indenture.
13.03 No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own wilful misconduct, except that
(a) prior to the occurrence of an event of default hereunder and after all events of default which may have occurred shall have ceased to be continuing or shall have been waived the Trustee shall not be liable except for the performance of such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee, but the duties and obligations of the Trustee, prior to the occurrence of an event of default and after all events of default which may have occurred shall have ceased to be continuing or shall have been waived, shall be determined solely by the express provisions of this Indenture;
(b) prior to the occurrence of an event of default hereunder and after all events of default which may have occurred shall have ceased to be continuing or shall have been waived, and in the absence of bad faith on the part of the Trustee, the Trustee may conclusively rely as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions conforming to the requirements of this Indenture; but in the case of any such certificate or opinion which by any provision hereof is specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not it conforms to the requirements of this Indenture;
(c) the Trustee shall not be personally liable for any error of judgment made in good faith by a Responsible Officer or Responsible Officers of the Trustee, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; and
(d) the Trustee shall not be personally liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the holders of not less than a majority in aggregate principal amount of the Bonds at the time Outstanding (excluding Company-owned Bonds) relating to the time, method, and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred upon the Trustee under this Indenture.
13.04 The recitals of fact contained herein and in the Bonds (other than the Trustee's certification) shall be taken as the statements of the Company, and the Trustee assumes no responsibility for the correctness of the same. The Trustee makes no representations as to the value of the Mortgaged Property or any part thereof, or as to the title of the Company thereto, or as to the validity or adequacy of the security afforded thereby and by this Indenture, or as to the validity of this Indenture or of the Bonds or coupons issued hereunder. The Trustee shall be under no responsibility or duty with respect to the making, executing, acknowledging, recording, or filing hereof, or of any Supplemental Indenture as a mortgage or conveyance of real or personal property, or the transfer of any property acquired by the Company after the date of the recording of these presents, or with respect to the disposition by the Company of any Bonds certified and delivered hereunder or the application of the proceeds thereof or the applications of any moneys paid to the Company under any of the provisions hereof.
13.05 Subject to the provisions of 13.02 and 13.03 the Trustee shall not be personally liable in case of entry by it upon the Mortgaged Property for debts contracted or liability or damages incurred in the management or operation of said property.
13.06 To the extent permitted by 13.02 and 13.03:
(1) The Trustee may rely and shall be protected in acting upon any resolution, certificate, opinion, notice, request, consent, order, appraisal, report, Bond, or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;
(2) The Trustee may consult with counsel, who may be of counsel to the Company, and the opinion of such counsel shall be fall and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance with the opinion of such counsel; and
(3) The Trustee shall not be liable for any action taken by it in good faith and believed by it to be authorized or within the discretion or power conferred upon it by this Indenture.
13.07 The Trustee shall not be under any responsibility for the selection, appointment, or approval of any engineer, accountant, or other expert for any of the purposes expressed in this Indenture, except that nothing in this Section contained shall relieve the Trustee of its obligation to exercise reasonable care with respect to the selection, appointment, or approval of independent experts who may furnish opinions or certificates to the Trustee pursuant to any provision of this Indenture.
Nothing contained in this Section shall be deemed to modify the obligation of the Trustee to exercise after the occurrence of an event of default the rights and powers vested in it by this Indenture with the degree of care and skill specified in 13.02.
None of the provisions in this Indenture contained shall require the Trustee to advance or expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if there is reasonable ground for believing that the repayment of such funds or liability is not reasonably assured to it by the security afforded to it by the terms of this Indenture.
13.08 Subject to the provisions of 13.14 and 13.15 the Trustee or any paying agent in its individual or any other capacity may become the owner or pledgee of Bonds or coupons with the same rights it would have if it were not Trustee or paying agent.
13.09 Subject to the provisions of 15.02, all moneys received by the Trustee, whether as Trustee or paying agent, shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need not be segregated from other funds except to the extent required by law and all such moneys, other than those described in 8.01, shall be held by the Trustee, until so used or applied, as a part of the Mortgaged Property. The Trustee may allow and credit to the Company interest on any moneys received by it hereunder at such rate, if any, as may be agreed upon with the Company from time to time and as may be permitted by law. After compliance with any applicable legal requirement, the Trustee may deposit all or any part of such moneys (including moneys described in 8.01) on a certificate of deposit or otherwise to its credit as Trustee hereunder, in its own banking department, or in any bank or trust company approved by the Trustee having a capital, surplus, and un- divided profits of not less than five million (5,000,000) dollars, or the Trustee, after such compliance, may so deposit such moneys, together with moneys of like nature held by it under other indentures or trust instruments, to its credit as trustee of all moneys deposited in each such account, respectively.
13.10 The Company covenants and agrees to pay to the Trustee from time to time, and the Trustee shall be entitled to, reasonable compensation for all services rendered by it in the execution of the trusts hereby created and in the exercise and performance of any of the powers and duties hereunder of the Trustee, which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust, and the Company will reimburse the Trustee for all advances made by the Trustee and will pay to the Trustee from time to time its expenses and disbursements, including the reasonable compensation and the expenses and disbursements of its counsel and of all persons not regularly in its employ, incurred without negligence or bad faith. The Company also covenants to indemnify the Trustee for, and to hold it harmless against, any loss, liability, or expense incurred without negligence or bad faith on the part of the Trustee, arising out of or in connection with the acceptance or administration of this trust, including the costs and expenses of defending against any claim of liability in the premises. The Company further covenants and agrees to pay interest to the Trustee at the rate of four percentum (4%) per annum upon all amounts paid, advanced, or disbursed by the Trustee for which it is entitled to reimbursement or indemnity as herein provided. The obligations of the Company to the Trustee under this Section shall constitute additional indebtedness secured hereby. For the performance of the obligations of the Company under this Section, the Trustee shall have (in addition to any other rights under this Indenture) a lien prior to the Bonds on the Mortgaged Property, including all property or funds held or collected by the Trustee, as such, except funds held in trust for the benefit of the holders of particular Bonds or coupons.
In order to further assure the Trustee that it will be compensated, reimbursed, and indemnified as provided in this Section and that the prior lien provided for in this Section upon the trust estate to secure the payment of such compensation, reimbursement, and indemnity will be enforced for the benefit of the Trustee, all parties to this Indenture agree, and each holder or owner of any Bond by his acceptance thereof shall be deemed to have agreed that in the event of
(1) the adjudication of the Company as a bankrupt by any court of competent jurisdiction,
(2) the filing of any petition seeking the reorganization of the Company under the Federal Bankruptcy Laws or any other applicable law or statute of the United States of America or of any State thereof,
(3) the appointment of one or more trustees or receivers of all or substantially all the property of the Company,
(4) the filing of any bill to foreclose this Indenture,
(5) the filing by the Company of a petition to take advantage of any insolvency act, or
(6) the institution of any other proceeding wherein it shall become necessary or desirable to file or present claims against the Company,
the Trustee may file from time to time in any such proceeding or proceedings one or more claims, supplemental claims, and amended claims as a secured creditor for its reasonable compensation for all services rendered by it (including services rendered during the course of any such proceeding or proceedings) and for reimbursement for all advances, expenses, and disbursements (including the reasonable compensation and the expenses and disbursements of its counsel and of all persons not regularly in its employ) made or incurred by it in the execution of the trusts hereby created and in the exercise and performance of any of the powers and duties herein of the Trustee, and for any and all amounts to which the Trustee is entitled as indemnity as provided in this Section; and the Trustee and its counsel and agents may file in any such proceeding or proceedings applications or petitions for compensation for such services rendered, for reimbursement for such advances, expenses, and disbursements, and for such indemnity. The claim or claims of the Trustee filed in any such proceeding or proceedings shall be reduced by the amount of compensation for services, reimbursement for advances, expenses, and disbursements, and indemnity paid to it following final allowance to it and to its counsel and agents by the court in any such proceeding as an expense of administration or in connection with a plan of reorganization or readjustment. To the extent that compensation, reimbursement, and indemnity are denied to the Trustee or to its counsel or other agents because of not being rendered or incurred in connection with the Administration of an estate in a proceeding or in connection with a plan of reorganization or readjustment, approved as required by law, because such services were not rendered in the interests of and with benefit to the estate of the Company as a whole but in the interests of and with benefit to the holders of the Bonds, in the execution of the trusts hereby created or in the exercise and performance of any of the powers and duties hereunder of the Trustee or because of any other reason, the court may to the extent permitted by law allow such claim, as supplemented and amended, in any such proceeding or proceedings and for the purposes of any plan of reorganization or readjustment of the Company's obligations, classify the Trustee as a secured creditor of a class separate and distinct from that of other creditors and of a class having priority and precedence over the class in which the holders of Bonds are placed by reason of having a lien, prior and superior to that of the holders of the Bonds, upon the trust estate, including all property or funds held or collected by the Trustee as such. The amount of the claim or claims of the Trustee for service rendered and for advances, expenses, and disbursements, including the reasonable compensation and the expenses and disbursements of its counsel and of all persons not regularly in its employ which are not allowed and paid in any such proceeding, but for which the Trustee is entitled to the allowance of a secured claim as herein provided, may be fixed by the court or judge in any such proceeding or proceedings to the extent that such court or judge has or exercises jurisdiction over the amount of any such claim or claims.
13.11 If, and to the extent that the Trustee and its counsel and other persons not regularly in its employ do not receive compensation for services rendered, reimbursement of its or their advances, expenses, and disbursements, or indemnity, as herein provided, as the result of allowances made in any reorganization, bankruptcy, receivership, liquidation, or other proceeding or by any plan of reorganization or readjustment of obligations of the Company, the Trustee shall be entitled, to the extent permitted by law in priority to the holders of the Bonds, to receive any distributions of any securities, dividends, or other disbursements which would otherwise be made to the holders of Bonds in any such proceeding or proceedings and the Trustee is hereby constituted and appointed, irrevocably, the attorney in fact for the holders of the Bonds and each of them to collect and receive, in their name, place, and stead, such distributions, dividends, or other disbursements, to deduct therefrom the amounts due to the Trustee, its counsel, and other persons not regularly in its employ on account of services rendered, advances, expenses, and disbursements made or incurred, or indemnity, and to pay and distribute the balance, pro rata, except as provided in 2.14 and 4.02 hereof to the holders of the Bonds. The Trustee shall have a lien upon any securities or other considerations to which the holders of Bonds may become entitled pursuant to any such plan of reorganization or readjustment of obligations, or in any such proceeding or proceedings; and the court or judge in any such proceeding or proceedings may determine the terms and conditions under which any such lien shall exist and be enforced.
13.12 Whenever in the administration of the trusts of this In- denture, prior to the occurrence of an event of default hereunder and after all events of default which may have occurred shall have ceased to be continuing or shall have been waived, the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, each matter (unless other evidence in respect thereof be herein specifically prescribed) may to the extent permitted by 13.02 and 13.03 hereof be deemed to be conclusively proved and established by an Officers' Certificate and such Certificate shall be full warrant to the Trustee for any action taken or suffered by it under the provisions of this Indenture upon the faith thereof.
13.13 Whenever it is provided in this Indenture that the Trustee shall take any action upon the happening of a specified event or upon the fulfillment of any condition or upon the request of the Company or of Bondholders, the Trustee in taking such action shall have full power to give any and all notices and to do any and all acts and things incidental to such action.
13.14
(a) If the Trustee has or acquires any conflicting interest, as defined by subsection (d) of this Section, the Trustee shall within ninety (90) days after ascertaining that it has such conflicting interest, either eliminate such conflicting interest or resign by giving written notice to the Company, but such resignation shall not become effective until the appointment of a successor trustee and such successor's acceptance of such appointment. The Company covenants to take prompt steps to have a successor appointed in the manner hereinafter provided in 13.18. Upon giving such notice of resignation, the resigning Trustee shall give Published Notice thereof, once in each of three (3) successive calendar weeks, in each case on any business day of the week. If the resigning Trustee fails to give such Published Notice within ten (10) days after giving written notice of its resignation to the Company, the Company shall give such Published Notice.
(b) In the event that the Trustee shall fail to comply with the provisions of the preceding subsection (a) of this Section, it shall within ten (10) days after the expiration of such ninety (90) day period transmit notice of such failure to the Bondholders, in the manner and to the extent provided in subsection (c) of 12.04 with respect to reports pursuant to subsection (a) of 12.04.
(c) Subject to the provisions of 17.04 any Bondholder who has been a bona fide holder of a Bond or Bonds for at least six (6) months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor if the Trustee fails, after written request therefor by such holder, to comply with the provisions of subsection (a) of this Section.
(d) For the purposes of this Section, the Trustee shall be deemed to have a conflicting interest if
(1) the Trustee is trustee under another indenture under
which any other securities, or certificates of interest or
participation in any other securities, of the Company, are
outstanding, unless such other indenture is a collateral trust
indenture under which the only collateral consists of Bonds
issued under this Indenture; provided that there shall be
excluded from the operation of this paragraph any other
indenture or indentures under which other securities, or
certificates of interest or participation in other securities,
of the Company are outstanding, if the Company pursuant to
Section 310(b) of the Trust Indenture Act of 1939, shall have
sustained the burden of proving, on application to the Securi-
ties and Exchange Commission and after opportunity for hearing
thereon, that the trusteeship under this Indenture and such
other indenture is not so likely to involve a material conflict
of interest as to make it necessary in the public interest or
for the protection of investors to disqualify the Trustee from
acting as such under one of such indentures;
(2) the Trustee or any of its directors or executive officers is an Obligor upon the Bonds or an underwriter for the Company;
(3) the Trustee directly or indirectly controls or is directly or indirectly controlled by or is under direct or indirect common control with the Company or an underwriter for the Company;
(4) the Trustee or any of its directors or executive
officers is a director, officer, partner, employee, appointee,
or representative of the Company, or of an underwriter (other
than the Trustee itself) for the Company, who is currently
engaged in the business of underwriting, except that (A) one
individual may be a director and/or an executive officer of the
Trustee and a director and/or an executive officer of the
Company, but may not be at the same time an executive officer of
both the Trustee and the Company; (B) if and so long as the
number of directors of the Trustee in office is more than nine
(9), one additional individual may be a director and/or an
executive officer of the Trustee and a director of the Company;
and (C) the Trustee may be designated by the Company, or by any
underwriter for the Company, to act in the capacity of transfer
agent, registrar, custodian, paying agent, fiscal agent, escrow
agent or depositary or in any other similar capacity, or subject
to the provisions of paragraph (1) of this subsection (d), to
act as trustee, whether under an indenture or otherwise;
(5) ten percentum (10%) or more of the voting securities of the Trustee is beneficially owned either by the Company or by any director, partner, or executive officer thereof, or twenty percentum (20%) or more of such voting securities is beneficially owned, collectively, by any two or more of such persons; or ten percentum (10%) or more of the voting securities of the Trustee is beneficially owned either by an underwriter for the Company or by any director, partner, or executive officer thereof, or is beneficially owned, collectively, by any two or more such persons;
(6) the Trustee is the beneficial owner of, or holds as collateral security for an obligation which is in default as in this subsection (d) defined, (A) five percentum (5%) or more of the voting securities, or ten percentum (10%) or more of any other class of security, of the Company, not including the Bonds issued under this Indenture and securities issued under any other indenture under which the Trustee is also trustee, or (B) ten percentum (10%) or more of any class of security of an underwriter for the Company;
(7) the Trustee is the beneficial owner of, or holds as collateral security for an obligation which is in default as in this subsection (d) defined, five percentum (5%) or more of the voting securities of any Person who, to the knowledge of the Trustee, owns ten percentum (10%) or more of the voting securities of, or controls directly or indirectly or is under direct or indirect common control with, the Company;
(8) the Trustee is the beneficial owner of, or holds as collateral security for an obligation which is in default as in this subsection (d) defined, ten percentum (10%) or more of any class of security of any Person who, to the knowledge of the Trustee, owns fifty percentum (50%) or more of the voting securities of the Company; or
(9) the Trustee owns, on May 15 in any calendar year in the capacity of executor, administrator, testamentary or inter vivos trustee, guardian, committee or conservator, or in any other similar capacity, an aggregate of twenty-five percentum (25%) or more of the voting securities, or of any class of security, of any Person, the beneficial ownership of a specified percentage of which would have constituted a conflicting interest under paragraphs (6), (7) or (8) of this subsection (d). As to any such securities of which the Trustee acquired ownership through becoming executor, administrator, or testamentary trustee of an estate which included them, the provisions of the preceding sentence shall not apply for a period of two (2) years from the date of such acquisition, to the extent that such securities included in such estate do not exceed twenty-five percentum (25%) of such voting securities or twenty-five percentum (25) of any such class of security. Promptly after May 15, in each calendar year, the Trustee shall make a check of its holdings of such securities in any of the above-mentioned capacities as of May 15. If the Company fails to make payment in full of principal or interest upon the Bonds when and as the same become due and payable, and such failure continues for thirty (30) days thereafter, the Trustee shall make a prompt check of its holdings of such securities in any of the above-mentioned capacities as of the date of the expiration of such thirty day period, and after such date, notwithstanding the foregoing provisions of this paragraph, all such securities so held by the Trustee, with sole or joint control of such securities vested in it, shall, but only so long as such failure shall continue, be considered as though beneficially owned by the Trustee for the purposes of paragraphs (6), (7) and (8) of this subsection (d)
The specifications of percentages in paragraphs (5) to (9), in- clusive, of this subsection (d) shall not be construed as indicating that the ownership of such percentages of the securities of a person is or is not necessary or sufficient to constitute direct or indirect control for the purpose of paragraph (3) or (7) of this subsection (d).
For the purposes of paragraphs (6), (7), (8) and (9) of this subsection (d) only, (A) the terms "security" and "securities" shall include only such securities as are generally known as corporate securities, but shall not include any note or other evidence of indebtedness issued to evidence an obligation to repay moneys lent to a person by one or more banks, trust companies, or banking firms, or any certificate of interest or participation in any such note or evidence of indebtedness; (B) an obligation shall be deemed to be in default when a default in payment of principal shall have continued for thirty (30) days or more and shall not have been cured; and (C) the Trustee shall not be deemed to be the owner or holder of (i) any security which it holds as collateral security (as trustee or otherwise) for an obligation which is not in default as above defined, or (ii) any security which it holds as collateral security under this Indenture, irrespective of any default hereunder, or (iii) any security which it holds as agent for collection, or as custodian, escrow agent, or depositary, or in any similar representative capacity.
The percentages of voting securities and other securities specified in this subsection (d) shall be calculated in accordance with the following provisions:
(a) A specified percentage of the voting securities of the Trustee, the Company or any other Person referred to in this Section (each of whom is referred to as a "person" in this paragraph and in the following paragraph) means such amount of the outstanding voting securities of such person as entitles the holder or holders thereof to cast such specified percentage of the aggregate votes which the holders of all the outstanding voting securities of such person as entitles to cast in the direction or management of the affairs of such person.
(b) specified percentage of a class of securities of a person means such percentage of the aggregate amount of securities of the class outstanding
(c) The term "amount", when used in regard to securities, means the principal amount if relating to evidences of indebtedness, the number of shares if relating to capital shares, and the number of units, if relating to any other kind of security.
(d) The term "outstanding" means issued and not held by or for the account of the issuer. The following securities shall not be deemed outstanding within the meaning of this definition:
(1) Securities of an issuer held in a sinking fund relating to securities of the issuer of the same class;
(2) Securities of an issuer held in a sinking fund relating to another class of securities of the issuer, if the obligation evidenced by such other class of securities is not in default as to principal or interest or otherwise;
(3) Securities pledged by the issuer thereof as security for an obligation of the issuer not in default as to principal or interest or otherwise;
(4) Securities held in escrow if placed in escrow by the issuer thereof;
provided, however, that any voting securities of an issuer shall be deemed outstanding if any person other than the issuer is entitled to exercise the voting rights thereof.
(e) A security shall be deemed to be of the same class as another security if both securities confer upon the holder or holders thereof substantially the same rights and privileges, provided, however, that, in the case of secured evidences of indebtedness, all of which are issued under a single indenture, differences in the interest rates or maturity dates of various series thereof shall not be deemed sufficient to constitute such series different classes, and provided further, that, in the case of unsecured evidences of indebtedness, differences in the interest rates or maturity dates thereof shall not be deemed sufficient to constitute them securities of different classes, whether or not they are issued under a single indenture.
For the purposes of this Section, the term "voting security" means any security presently entitling the owner or holder thereof to vote in the direction or management of the affairs of a person, or any security issued under or pursuant to any trust, agreement, or arrangement whereby a trustee or trustees or agent or agents for the owner or holder of such security are presently entitled to vote in the direction or management of the affairs of a person; the term "director" means any director of a corporation, or any individual performing similar functions with respect to any organization whether incorporated or unincorporated; the term "executive officer" means the president, every vice president, every trust officer, the cashier, the secretary, and the treasurer of a corporation, and any individual customarily performing similar functions with respect to any organization whether incorporated or unincorporated, but shall not include the chairman of the board of directors; the term "underwriter" when used with reference to the Company means every person who, within three (3) years prior to the time as of which the determination is made, has purchased from the Company with a view to, or has sold for the Company in connection with, the distribution of any security of the Company outstanding at such time, or has participated or has had a direct or indirect participation in any such undertaking, or has participated or has had a participation in the direct or indirect underwriting of any such undertaking, but such term shall not include a person whose interest was limited to a commission from an underwriter or dealer not in excess of the usual and customary distributors' or sellers' commission; and the term "the Company" shall include any Obligor upon the Bonds.
13.15 (a) Subject to the provisions of subsection (b) of this Section, if the Trustee shall be or shall become a creditor, directly or indirectly, secured or unsecured, of the Company within four (4) months prior to a default (as defined in the last paragraph of this subsection), or subsequent to such a default, then, unless and until such default shall be cured, the Trustee shall set apart and hold in a special account for the benefit of the Trustee individually, the Bondholders, and the holders of other indenture securities (as defined in the last paragraph of this subsection)
(1) an amount equal to any and all reductions in the amount due and owing upon any claim as such creditor in respect of principal or interest, effected after the beginning of such four months' period and valid as against the Company and its other creditors, except any such reduction resulting from the receipt or disposition of any property described in paragraph (2) of this subsection (a), or from the exercise of any right of set-off which the Trustee could have exercised if a petition in bankruptcy had been filed by or against the Company upon the date of such default; and
(2) all property received by the Trustee in respect of any claim
as such creditor, either as security therefor, or in satisfaction or
composition thereof, or otherwise, after the beginning of such four
(4) months' period, or an amount equal to the proceeds of any such
property, if disposed of, subject, however, to the rights, if any, of
the Company and its other creditors in such property or such
proceeds.
Nothing herein contained, however, shall affect the right of the Trustee
(A) to retain for its or his own account (i) payments made on account of any such claim by any person (other than the Company) who is liable thereon, and (ii) the proceeds of the bona fide sale of any such claim by the Trustee to a third person, and (iii) distributions made in cash, securities, or other Property in respect of claims filed against the Company in bankruptcy or receivership or in proceedings for reorganization pursuant to the Bankruptcy Act or applicable State law;
(B) to realize, for its own account, upon any property held by it as security for any such claim, if such property was so held prior to the beginning of such four (4) months' period;
(C) to realize, for its own account, but only to the extent of the claim hereinafter mentioned, upon any property held by it as security for any such claim, if such claim was created after the beginning of such four (4) months' period and such property was received as security therefor simultaneously with the creation thereof, and if the Trustee shall sustain the burden of proving that at the time such property was so received the Trustee had no reasonable cause to believe that a default as defined in the last paragraph of this subsection (a) would occur within four (4) months; or
(D) to receive payment on any claim referred to in paragraph (B)
or (C) of this subsection (a) against the release of any property
held as security for such claim as provided in paragraph (B) or (C),
as the case may be, of this subsection (a), to the extent of the fair
value of such property.
For the purposes of paragraphs (B), (C) and (D) of this subsection
(a), property substituted after the beginning of such four (4) months'
period for property held as security at the time of such substitution
shall, to the extent of the fair value of the property released, have the
same status as the property released, and, to the extent that any claim
referred to in any of such paragraphs is created in renewal of or in
substitution for or for the purpose of repaying or refunding any
pre-existing claim of the Trustee as such creditor, such claim shall have
the same status as such pre-existing claim.
If the Trustee shall be required to account, the funds and property held in such special account and the proceeds thereof shall be apportioned between the Trustee, the Bondholders, and the holders of other indenture securities in such manner that the Trustee, the Bondholders, and the holders of other indenture securities realize, as a result of payments from such special account and payments of dividends on claims filed against the Company in bankruptcy or receivership or in proceedings for reorganization pursuant to the Bankruptcy Act or applicable State law, the same percentage of their respective claims, figured before crediting to the claim of the Trustee anything on account of the receipt by it from the Company of the funds and property in such special account and before crediting to the respective claims of the Trustee, the Bondholders, and the holders of other indenture securities dividends on claims filed against the Company in bankruptcy or receivership or in proceedings for reorganization pursuant to the Bankruptcy Act or applicable State law, but after crediting thereon receipts on account of the indebtedness represented by their respective claims from all sources other than from such dividends and from the funds and property so held in such special account. As used in this paragraph, with respect to any claim, the term "dividends" shall include any distribution with respect to such claim, in bankruptcy or receivership or in proceedings for reorganization pursuant to the Bankruptcy Act or applicable State law, whether such distribution is made in cash, securities, or other property, but shall not include any such distribution with respect to the secured portion, if any, of such claim. The court in which such bankruptcy, receivership, or proceeding for reorganization is pending shall have jurisdiction (i) to apportion between the Trustee, the Bondholders, and the holders of other indenture securities, in accordance with the provisions of this paragraph, the funds and property held in such special account and the proceeds thereof, or (ii) in lieu of such apportionment, in whole or in part, to give to the provisions of this paragraph due consideration in determining the fairness of the distri- butions to be made to the Trustee, the Bondholders, and the holders of other indenture securities, with respect to their respective claims, in which event it shall not be necessary to liquidate or to appraise the value of any securities or other property held in such special account or as security for any such claim, or to make a specific allocation of such distributions as between the secured and unsecured portions of such claims, or otherwise to apply the provisions of this paragraph as a mathematical formula.
If the Trustee shall have resigned or been removed after the be- ginning of such four (4) months' period, it shall be subject to the pro- visions of this subsection as though such resignation or removal had not occurred. If the Trustee has resigned or been removed prior to the beginning of such four (4) months' period, it shall be subject to the provisions of this subsection (a) if and only if the following conditions exist:
(i) the receipt of property or reduction of claim which would have given rise to the obligation to account, if the Trustee had con- tinued as trustee, occurred after the beginning of such four (4) months' period; and
(ii) such receipt of property or reduction of claim occurred within four (4) months after such resignation or removal.
As used in this Section, the term "default" means any failure to make payment in full of the principal of or interest upon the Bonds or upon the other indenture securities when and as such principal or interest becomes due and payable; and the term "other indenture securities" means securities upon which the Company is an obligor (as defined in the Trust Indenture Act of 1939) outstanding under any other indenture (a) under which the Trustee is also trustee, (b) which contains provisions substantially similar to the provisions of this subsection (a), and (c) under which a default exists at the time of the apportionment of the funds and property held in said special account.
(b) There shall be excluded from the operation of subsection (a) of this Section a creditor relationship arising from
(1) the ownership or acquisition of securities issued under any indenture, or any security or securities having a maturity of one year or more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court of competent jurisdiction or by this Indenture for the purpose of preserving the property subject to the Lien of this Indenture or of discharging tax liens or other prior liens or encumbrances on the Mortgaged Property, if notice of such advance and of the circumstances surrounding the making thereof is given to the Bondholders as provided in subsections (a), (b) and (c) of 12.04 hereof with respect to advances by the Trustee as such;
(3) disbursements made in the ordinary course of business in the capacity of trustee under an indenture, transfer agent, registrar, custodian, paying agent, fiscal agent or depositary, or other similar capacity;
(4) an indebtedness created as a result of services rendered or premises rented; or an indebtedness created as a result of goods or securities sold in a cash transaction as defined in the last para- graph of this subsection (b);
(5) the ownership of stock or of other securities of a corpora- tion organized under the provisions of Section 25 (a) of the Federal Reserve Act, as amended, which is directly or indirectly a creditor of the Company; or
(6) the acquisition, ownership, acceptance or negotiation of any drafts, bills of exchange, acceptances, or obligations which fall within the classification of self-liquidating paper as defined in the last paragraph of this subsection (b).
As used in this 13.15, the term "security" shall have the meaning assigned to such terms in the Securities Act of 1933, as amended and in force on the date of the execution-of this Indenture; the term "cash transaction" shall mean any transaction in which full payment for goods or securities sold is made within seven (7) days after delivery of the goods or securities in currency or in checks or other orders drawn upon banks or bankers and payable upon demand; and the term "self-liquidating paper" shall mean any draft, bill of exchange, acceptance or obligation which is made, drawn, negotiated or incurred by the Company for the purpose of financing the purchase, processing, manufacture, shipment, storage or sale of goods, wares, or merchandise and which is secured by documents evidencing title to, possession of, or a lien upon, the goods, wares, or merchandise or the receivables or proceeds arising from the sale of the goods, wares, or merchandise previously constituting the security, provided the security is received by the Trustee simultaneously with the creation of the creditor relationship with the Company arising from the making, drawing, negotiating or incurring of the draft, bill of exchange, acceptance or obligation; the term "Trustee" shall include the Trustee and any separate trustee or co-trustee hereafter appointed; and the term "the Company" shall include any Obligor upon the Bonds.
13.16 The Trustee may at any time resign and be discharged of the trusts hereby created by giving written notice to the Company specifying the day upon which such resignation shall take effect and thereafter giving Published Notice thereof, once in each of three (3) successive calendar weeks, in each case on any business day of the week, and such resignation shall take effect upon the day specified in such Notice unless previously a successor trustee shall have been appointed by the Bondholders or the Company in the manner hereinafter provided in 13.18, and in such event such resignation shall take effect immediately on the appointment of such successor trustee. This Section shall not be applicable to resignations pursuant to 13.14.
13.17 The Trustee may be removed at any time by an instrument or concurrent instruments in writing filed with the Trustee and signed and acknowledged by the holders of a majority in aggregate principal amount of the Bonds then Outstanding (excluding Company-owned Bonds) or by their attorneys in fact duly authorized.
In case at any time the Trustee shall cease to be eligible in ac- cordance with the provisions of 4.03(a) and 13.01, then the Trustee shall resign immediately in the manner and with the effect specified in 13.16; and in the event that the Trustee does not resign immediately in such case, then it may be removed forthwith by an instrument or concurrent instruments in writing filed with the Trustee and either (a) signed by the President or a Vice President of the Company with its corporate seal attested by a Clerk or an Assistant Clerk of the Company or (b) signed and acknowledged by the holders of a majority in aggregate principal amount of the Bonds then Outstanding (excluding Company-owned Bonds) or by their attorneys in fact duly authorized.
13.18 In case at any time the Trustee shall resign or shall be removed (unless the Trustee shall be removed as provided in subsection (a) of 13.14 in which event the vacancy shall be filed as provided in said subsection) or shall become incapable of acting or shall be adjudged a bankrupt or insolvent, or if a receiver of the Trustee or of its property shall be appointed, or if any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation, or liquidation, a vacancy shall be deemed to exist in the office of Trustee, and a successor or successors may be appointed by the holders of a majority in aggregate principal amount of the Bonds then Outstanding hereunder (excluding Company-owned Bonds), by an instrument or concurrent instruments in writing signed and acknowledged by such Bondholders or by their attorneys in fact duly authorized, and delivered to such new Trustee, notification thereof being given to the Company and the retiring Trustee; provided, nevertheless, that until a new Trustee shall be appointed by the Bondholders as aforesaid, the Company, by instrument executed by order of its Board of Directors and duly acknowledged by its President or a Vice President, may appoint a Trustee to fill such vacancy until a new Trustee shall be appointed by the Bondholders as herein authorized. The Company shall publish notice of any such appointment made by it in the manner provided in 13.16. Any new Trustee appointed by the Company shall, immediately and without further act, be superseded by a Trustee appointed by the Bondholders, as above provided, if such appointment by the Bondholders be made prior to the expiration of one year after the first publication of notice of the appointment of the new Trustee by the Company. The Company shall cause notice of any such appointment made by the Bondholders to be published in the manner provided in 13.16.
If in a proper case no appointment of a successor Trustee shall be made pursuant to the foregoing provisions of this Section within six (6) months after a vacancy shall have occurred in the office of Trustee, the holder of any Bond Outstanding hereunder or any retiring Trustee may apply to any court of competent jurisdiction to appoint a successor Trustee. Said court may thereupon after such notice, if any, as such court may deem proper and prescribe, appoint a successor Trustee.
If the Trustee resigns because of a conflicting interest as provided in subsection (a) of 13.14 and a successor has not been appointed by the Company or the Bondholders or, if appointed, has not accepted the appointment within thirty (30) days after the date of such resignation, the resigning Trustee may apply to any court of competent jurisdiction for the appointment of a successor Trustee, and appointment may be made by such court pursuant to the procedure set forth in the preceding paragraph of this Section.
Any Trustee appointed under the provisions of this Section in succession to a Trustee shall be a bank or trust company eligible under 4.03(a) and 13.01 and not disqualified under 13.14.
Any Trustee which has resigned or been removed shall nevertheless retain the lien upon the Mortgaged Property, including all property or funds held or collected by the Trustee as such (except funds held in trust for the benefit or particular Bonds or coupons), to secure the amounts due to such Trustee as compensation, reimbursement, expenses and indemnity afforded to it by 13.10 and shall retain the rights afforded to it by 13.11.
13.19 Any successor trustee appointed hereunder shall execute, acknowledge, and deliver to its predecessor trustee, and also to the Company, an instrument accepting such appointment hereunder, and thereupon such successor trustee, without any further act, deed, or conveyance shall become fully vested with all the estates, properties, rights, powers, trusts, duties, and obligations of its predecessor in trust hereunder, with like effect as if originally named as trustee herein; but the trustee ceasing to act shall nevertheless, on the written request of the Company, or of the successor trustee, or of the holders of ten percentum (10%) in aggregate principal amount of the Bonds then Outstanding hereunder, execute, acknowledge, and deliver such instruments of conveyance and further assurance and do such other things as may reasonably be required for more fully and certainly vesting and confirming in such successor trustee all the right, title, and interest of the trustee to which it succeeds, in and to the Mortgaged Property and such rights, powers, trusts, duties, and obligations, and the trustee ceasing to act shall also, upon like request, pay over, assign, and deliver to the successor trustee any money or other property which may then be in its possession subject to the Lien of this Indenture, including any purchase money mortgage or other like indebtedness which may then be in its possession provided always that the Trustee ceasing to act shall retain its prior lien upon the Mortgaged Property until compensated, reimbursed or indemnified as herein provided. Should any deed, conveyance, or instrument in writing from the Company be required by the new trustee for more fully and certainly vesting in and confirming to such new trustee such estates, properties, rights, powers, trusts, duties, and obligations, any and all such deeds, conveyances, and instruments in writing shall, on request, be executed, acknowledged, and delivered by the Company.
13.20 Any corporation into which the Trustee may be merged or with which it may be consolidated or any corporation resulting from any merger or consolidation to which the Trustee shall be a party or any corporation to which substantially all the business and assets of the Trustee may be transferred, provided such corporation shall be eligible under the provisions of 4.03(a) and 13.01 hereof and qualified under 13.14 hereof, shall be the successor Trustee under this Indenture, without the execution or filing of any paper or the performance of any further act on the part of any other parties hereto, anything herein to the contrary notwithstanding. In case any of the Bonds contemplated to be issued hereunder shall have been certified but not delivered, any such successor to the Trustee may, subject to the same terms and conditions as though such successor had itself certified such Bonds, adopt the certification of the original Trustee or of any successor to it as trustee hereunder, and deliver the said Bonds so certified; and in case any of such Bonds shall not have been certified, any successor to the Trustee may certify such Bonds either in the name of any predecessor hereunder or in the name of the successor Trustee, and in all such cases such certificate shall have the full force which it is anywhere in said Bonds or in this Indenture provided that the certificate of the Trustee shall have; provided, however, that the right to certify Bonds in the name of the original Trustee shall apply only to its successor or successors by merger or consolidation or sale as aforesaid.
13.21 The duties, liabilities, rights, privileges, and immunities of the Trustee in relation to the holders of the Bonds shall be governed exclusively by the laws of the Commonwealth of Massachusetts.
13.22 Each office, agency, corporation, or firm specified in or on any of the Bonds or in any Directors' Resolution as a place of paying the principal thereof, or the interest thereon, is included in the term "paying agents" for all purposes hereof. If any of the paying agents, as above defined, shall be dissolved, or cease to carry on business, or if any of the paying agents shall resign hereunder by writing filed with the Trustee, or if the Company shall remove any paying agent by a Directors' Resolution filed with the Trustee and with the paying agent so removed, or if a receiver of any paying agent be appointed or its property or affairs be taken over by any public officer or officers, or if it be adjudged bankrupt or insolvent, or if a vacancy for any cause occur at any time in the office of any paying agent, then all the rights and duties conferred upon such paying agent by this Indenture or by any Directors' Resolution shall be exercised by the Trustee, and in such case, subject to the provisions of 13.02 and 13.03, the Trustee shall incur no liability for any action taken by it in such capacity save for loss or damage resulting from its negligence or wilful default; provided, however, that in lieu of such exercise of rights and powers by the Trustee, in each or any such case the Company may, by a Directors' Resolution, appoint some other person or persons, natural or corporate, as successor to, and with all the rights and powers of, such predecessor paying agent.
Each of the paying agents, in respect of all moneys paid to or held by each hereunder or under the Bonds, shall be subject to the trusts specified in 4.03 (c) hereof.
ARTICLE XIV.
Effect of Consolidation, Merger, Sale, or Lease
14.01 Nothing contained in this Indenture or in any Bond issued or to be issued hereunder shall prevent any consolidation with the Company, or merger into the Company, of any other Corporation, or any consolidation with or merger by the Company into any other Corporation having corporate powers to carry on the business then being carried on by the Company, or the sale or lease (subject to the continuing Lien of this Indenture and to all the provisions hereof) of all or substantially all of the Mortgaged Property as an entirety to any Corporation lawfully entitled to acquire or lease and operate the same, or prevent successive similar consolidations, mergers, sales, and leases to which the Company or any other such Corporation shall be a party, provided, however, that
A. any such merger or consolidation shall be consummated only in conformity with the following conditions precedent thereto:
(1) that if any property owned by the Corporation to be consolidated with the Company or merged into it or into which the Company shall be merged (in this Article XIV called the other Corporation) shall after such merger or consolidation be subject to one or more mortgages or liens which shall be prior to the Lien hereof and which shall secure any indebtedness not then called for redemption and payment (and deposit actually and irrevocably made of the entire redemption price), (a) then the aggregate principal amount of all such indebtedness shall not exceed sixty percentum (60%) of the Cost or Fair Value, whichever is less, of said property, and (b) the net earnings of said other Corporation, computed as provided in subparagraph 35 of 1.02 hereof, (excluding the final paragraph thereof) during a period of twelve (12) consecutive calendar months ending within ninety (90) days next preceding the date of such consolidation or merger shall have been a sum at least equal to twice the annual interest on said indebtedness, and
(2) that if the Corporation resulting from any such merger or consolidation (herein in this Article XIV called the successor corporation) shall have outstanding at the time of such merger or consolidation any indebtedness not then called for redemption and payment (and deposit actually and irrevocably made of the entire redemption price) or proposes to issue in connection with such consolidation or merger any indebtedness in either case secured by a mortgage, lien, or pledge on its property, whether or not any of said property shall have been previously owned by the Company, said successor corporation shall have made effective provision to establish as prior and superior to the mortgage, lien, or pledge securing the said indebtedness the Lien hereof upon the Mortgaged Property owned by the Company immediately prior to said merger or consolidation and upon all property thereafter to be acquired by the successor corporation (other than property of the character described herein under the definition of Excepted Property) or the franchises necessary for the operation thereof, which, if acquired by the Company, would constitute betterment, extensions, improvements, additions, repairs, renewals, replacements, substitutions, and alterations of or to the Mortgaged Property as constituted immediately prior to said merger or consolidation, and, if the Trustee shall so require, shall in addition have made effective provision that the lien of said mortgage or pledge upon the property of said successor corporation of the character described herein under the definition of Excepted Property shall in no wise be superior to the Lien hereof on any such property;
B. any such merger or consolidation and any such sale shall be consummated only if the successor corporation or the purchaser, as the case may be, shall also covenant with the Trustee in a Supplemental Indenture, in form satisfactory to the Trustee, to be duly recorded and filed either prior to or substantially simultaneously with any such merger, consolidation or sale in all registries or other offices where this Indenture is then recorded and/or filed
(1) that such consolidation, merger, or sale shall be on such terms as in no respect to impair the rights or powers of the Trustee or of the Bondholders or the Lien hereof upon the Mortgaged Property owned by the Company immediately prior to said merger, consolidation, or sale, or upon any property thereafter to be acquired by the successor corporation or the purchaser, as the case may be, (other than property of the character described herein under the definition of Excepted Property), or the franchises necessary for the operation thereof, which, if acquired by the Company, would constitute betterment, extensions, improvements, additions, repairs, renewals, replacements, substitutions, and alterations of or to the Mortgaged Property as constituted immediately prior to said merger, consolidation, or sale; and
(2) to assume the due and punctual payment of the principal of and interest on all the Bonds then Outstanding hereunder according to their tenor and the due and punctual performance of all the covenants hereof to be kept or performed by the Company; and
(3) fully to preserve and protect the franchises of the Company so far as they relate to the Mortgaged Property im- mediately prior to said merger, consolidation, or sale, subject however to the provisions of 7.02(c);
and any such Supplemental Indenture shall also contain:
(a) a grant confirming the Lien hereof upon the Mortgaged Property owned by the Company immediately prior to said merger, consolidation or sale, and upon all property thereafter to be acquired by the successor corporation or the purchaser, as the case may be, (other than property of the character described herein under the definition of Excepted Property), or the franchises necessary for the operation thereof, which would constitute betterment, extensions, improvements, additions, repairs, renewals, replacements, substitutions, and alterations of or to the Mortgaged Property so owned, and
(b) a covenant to keep the Mortgaged Property so owned and all said after acquired property and the earnings, income, and profits therefrom so segregated as to be capable of identification;
C. any such lease shall be consummated only if at the time of the execution of said lease no event of default hereunder shall have occurred or if, having occurred, shall not then be continuing, and only if the lessee shall furnish to the Trustee an indenture, in form satisfactory to the Trustee, to be duly recorded and filed in all registries or other offices where this Indenture is then recorded and/or filed, containing covenants substantially identical with those described in subparagraphs B(2) and B(3) of this Section (except that the lessee shall not be obliged to covenant to perform any covenant hereof or hereunder after the expiration date of such lease) and a further covenant that such lease shall be made expressly subject, at any time after default shall be made in said covenants or after the occurrence of an event of default hereunder, to immediate termination either by the Company or by the Trustee, or by the purchaser of the Mortgaged Property or any substantial part thereof at any sale thereof made hereunder, whether such sale be made under the power of sale hereby conferred or under judicial proceedings.
14.02 The Company shall furnish or cause to be furnished to the Trustee prior to the consummation of any such consolidation, merger, sale or lease, as the case may be, (1) in order to establish that the conditions precedent set forth in subparagraph A of 14.01 have been fully complied with (a) an Independent Accountant's Certificate setting forth the net earnings, during a period of twelve (12) consecutive calendar months ending as required by (1) of said subparagraph A, of the Corporation to be consolidated with the Company or merged into it or into which the Company shall be merged or consolidated, stating that said net earnings have been computed in accordance with the provisions of (1) of said subparagraph, and that they are at least equal to twice the annual interest upon all the indebtedness of said Corporation secured by mortgages or liens of the character therein referred to; and (b) an Independent Engineer's Certificate stating that the aggregate principal amount of the indebtedness secured by mortgages or liens of the character described in (1) of said subparagraph A of said other Corporation does not exceed sixty per centum (60%) of the said Cost or Fair Value, whichever is less, of the property securing said indebtedness; (2) in order to establish the non-occurrence or non-continuance of an event of default as provided in subparagraph C of 14.01, an Officers' Certificate to that effect; and, (3) in order to establish the performance of all other pertinent requirements set forth in 14.01 and the fulfillment of the conditions contained in 14.03, an Opinion of Counsel to the effect that all such pertinent requirements have been fully met and complied with and subject to the provisions of 13.02 and 13.03 such Opinion of Counsel shall protect the Trustee in approving or consenting to any such consolidation, merger, sale or lease. The Independent Engineer's Certificate shall also describe in reasonable detail the property of said other Corporation of the character defined in the second paragraph of the definition of Fundable Property and state the Cost thereof or the Fair Value thereof as of the date of said merger, consolidation or sale, whichever is less, and that said Cost or Fair Value has been determined in accordance with the definitions of said terms.
14.03 No such consolidation, merger, or sale, and no indenture made requisite by the pertinent requirements of 14.01 shall, in the absence of an express grant by the successor corporation or purchaser, subject to the Lien hereof any of the properties of the character described in Clause 2 of the granting clauses hereof or any of the franchises of any such successor corporation or purchaser, except those acquired by it from the Company and except further any property thereafter acquired by it (other than property of the character described herein under the definition of Excepted Property), or the franchises necessary for the operation thereof, which would have constituted betterment, extensions, improvements, additions, repairs, renewals, replacements, substitutions, or alterations of or to the Mortgaged Property so acquired as constituted immediately prior to such consolidation, merger or sale; provided however that notwithstanding any such consolidation, merger or sale, this Indenture shall constitute a lien on all the Mortgaged Property as so constituted and on the above described after-acquired property, and on any other property acquired from the Company of the character described herein under the definition of Excepted Property if the Trustee shall so require pursuant to the provisions of subparagraph A (2) of 14.01 and on any other property which, pursuant to the terms of 14.04, shall be Made the Basis for Action or Credit hereunder by such successor corporation or purchaser, or which shall consist of repairs or additions to or replacements or restorations of any part of said Mortgaged Property or said after-acquired property made by the application of the proceeds of insurance thereon not paid to the Trustee, or which shall consist of machinery, equipment, apparatus, or other tangible property substituted for any old, worn out, unserviceable, undesirable, or unnecessary property previously a part of said Mortgaged Property, or said after-acquired property pursuant to the provisions of 7.02(b).
14.04 In case the Company, pursuant to 14.01 and 14.02, shall be consolidated with or merged into any other Corporation or shall sell, subject to the Lien hereof, the Mortgaged Property as aforesaid, the Successor Corporation, or the purchaser, as the case may be, upon compliance with the applicable provisions of 14.01, shall succeed to and be substituted for the Company with the same effect as if it had been named herein as the mortgagor company, and shall have and may exercise under this Indenture the same powers and rights as those of the Company hereunder, and without prejudice to the generality of the foregoing, such successor corporation or purchaser may thereafter
A. issue Bonds hereunder in accordance with the provisions of Article III hereof, including Bonds which the Company was entitled to issue but had not issued hereunder, but subject to all the terms, conditions, and restrictions herein prescribed, and for this purpose may use any Bonds theretofore executed by the Company or any intermediate successor corporation or purchaser or may cause to be signed, issued, and delivered, either in its own name or in the name of Western Massachusetts Electric Company or in the name of any intermediate successor corporation or purchaser, any or all Bonds which shall not theretofore have been signed by the Company or any intermediate successor corporation or purchaser and which have not been certified by the Trustee; and upon the application of the successor corporation or the purchaser, in lieu of the Company, and subject to all the terms, conditions, and restrictions herein prescribed in respect of the certification and delivery of Bonds, the Trustee shall certify and deliver any of such bonds which shall have been previously signed and delivered by the officers of the Company or of any intermediate successor corporation or purchaser to the Trustee for certification, and any of such Bonds which the successor corporation or purchaser shall thereafter, in accordance with the provisions of this Indenture, cause to be signed by its appropriate officers and delivered to the Trustee for such purpose;
B. possess, use, enjoy, and obtain the release of Mortgaged Property (including all property subjected to the Lien hereof sub- sequent to any such consolidation, merger, or sale) in accordance with the provisions of Article VII;
C. withdraw money from the hands of the Trustee (including money in its hands at the time of such merger, consolidation, or Sale) in accordance with the provisions of Article VIII and 3.06 and 3.07;
D. irrevocably allocate Net Property Additions in accordance with the provisions of Article VI; and
E. call for redemption and redeem Bonds at any time Outstanding hereunder in accordance with the provisions of Article V;
provided however that if property owned by the other Corporation prior to any merger or consolidation, being or having become Fundable Property hereunder, shall be Made the Basis for Action or Credit hereunder, such property shall be subjected to the Lien hereof by Supplemental Indenture and the Cost or Fair Value thereof as stated in the Independent Engineer's Certificate described in 14.02 shall be the Cost thereof or the Fair Value thereof as of the date of such merger or consolidation.
All Bonds of any one series issued pursuant to the provisions of this
Section shall in all respects have the same legal rank and security as the
Bonds of said series theretofore or thereafter issued in accordance with
the terms of this Indenture.
14.05 The Company covenants that if Bonds at any time be issued in any new name the Company will provide for the stamping, or for the exchange, of any Bonds previously issued for Bonds of the same tenor and amounts issued in any such new name, at the option of the holders and without expense to them, and the Trustee shall also do such acts as may be necessary on its part to that end, including certification of the Bonds so to be issued in exchange.
ARTICLE XV.
Defeasance
15.01 If the Company shall pay and discharge the entire in- debtedness on all Bonds Outstanding hereunder in any one or more of the following ways, to wit:
A. if, when the principal of all the Bonds at the time Out- standing hereunder shall have become due and payable or will become due and payable within two (2) years, by their terms, on redemption, by declaration, or in any other manner, the Company shall pay or cause to be paid the whole amount of the principal of said Bonds and of the interest to the stated or accelerated maturity or maturities thereof (as the case may be) due or to become due on said Bonds with interest on overdue principal and overdue interest (so far as the same may be legally enforceable) at the rate or rates borne by the respective Bonds, and the premium if any due in respect of any Bonds called for redemption, or shall deposit or cause to be deposited with the Trustee for the account of the holders of said Bonds and of the holders of the coupons, if any, appertaining thereto representing such interest a sum which, together with so much of any moneys in the hands of the Trustee or of any other paying agent hereunder (not held for the benefit of the holders of other Bonds previously Outstanding hereunder or of overdue coupons not previously presented for payment) as the Company shall be permitted to apply to the purpose and shall elect so to do, shall be sufficient to pay the whole amount of such principal, interest, interest on overdue payments, and premium, and in case any or all of said Bonds have been or are about to be called for redemption the Company shall have furnished to the Trustee proof satisfactory to it that the notice of redemption of all of said Bonds has been duly given or has given to the Trustee irrevocable power or powers of attorney in conformity with 5.05 to call all of said Bonds; or
B. if the Company shall surrender to the Trustee for cancella- tion by it all Bonds Outstanding hereunder together with all unpaid coupons thereto appertaining;
and shall also pay or cause to be paid all other sums payable
hereunder by the Company (except in respect of any refund or
reimbursement of taxes, assessments, or other governmental charges as
to Bonds of any series for which the holders of Bonds shall look only
to the Company), then and in any such case immediately or at any time
after such payment, deposit, or surrender and, in the case of the
redemption of Bonds, such furnishing of proof or giving of
irrevocable power of attorney, but subject to the provisions of
15.02, said Bonds shall cease to be entitled to any benefit or
security hereunder, the estate, right, title and interest of the
Trustee hereby created shall determine, and, upon the request and at
the cost of the Company, and upon the receipt by the Trustee of an
Officers' Certificate stating that the conditions hereinabove in this
Section specified have been fully performed and complied with and an
Opinion of Counsel stating that the instruments which have been or
are therewith delivered to the Trustee conform to the requirements
hereof and constitute sufficient authority hereunder for the Trustee
to release and discharge the Lien hereof, and stating that the
conditions hereinabove in this Section specified have been fully
performed and complied with, the Trustee shall execute to the Company
a good and sufficient release and discharge of this Indenture and of
the Lien hereby created, and shall surrender possession to the
Company of any property of which it shall have taken possession
hereunder and which shall not have been, or shall not be required to
be, sold or disposed of under and by virtue of this Indenture; and
the Trustee shall thereupon pay to the Company all moneys, if any,
then remaining in the possession of the Trustee, which are not
required to discharge any obligation of the Company under any of the
provisions hereof or of the Bonds and shall transfer and assign to
the Company any purchase money obligations or other indebtedness, and
the security therefor held by the Trustee hereunder as part of the
Mortgaged Property; but otherwise, and until such payment and
performance, this Indenture shall be and remain in full force and
effect.
15.02 Notwithstanding the release and discharge hereof, any moneys deposited by the Company with the Trustee, whether for the payment of interest, interest on overdue interest, principal, or premium on any Bond or coupon at any time Outstanding hereunder, shall be held in trust for the exclusive benefit of the holders or registered owners of said Bonds or the holders of said coupons respectively; provided however that any moneys deposited with the Trustee or any paying agent for the payment of principal, premium, or interest on Bonds at any time issued hereunder and not applied to such payment within six (6) years after the date on which the same shall have become due shall be repaid by the Trustee or such paying agent to the Company, and thereafter Bondholders shall be entitled to look only to the Company for payment, and then only to the extent of the amount so repaid, and the Company shall not be liable for any interest thereon and shall not be regarded as a trustee of such money; provided, however, that the Trustee, before being required to make any such repayment shall, at the expense of the Company, give Published Notice of the fact that such moneys have not been so applied and that after a date specified therein any unclaimed balance of said moneys then remaining will be repaid to the Company.
ARTICLE XVI.
Supplemental Indentures
16.01 In addition to any Supplemental Indenture otherwise au- thorized by this Indenture, the Company, when authorized by resolution of its Board of Directors, or of its Executive Committee and the Trustee, at any time and from time to time, subject to the conditions, provisions, and restrictions herein contained, may enter into an Indenture or Indentures Supplemental hereto and which shall thereafter form a part hereof, for any one or more or all of the following purposes:
(a) To close the Indenture against the issue of additional Bonds or to add to the conditions, limitations, and restrictions on the authorized amount, terms, provisions, purposes of issue, cer- tification and delivery of Bonds specified in Articles II and III hereof, other conditions, limitations, and restrictions thereafter to be observed;
(b) To add to the covenants and agreements of the Company in this Indenture contained, other covenants and agreements thereafter to be observed, which the Board of Directors or the Executive Committee of the Company shall consider to be for the protection of the Mortgaged Property and of the holders of the Bonds, although the freedom of action of the Company may be materially restricted thereby, and/or to surrender any right or power herein reserved to, or conferred upon, the Company, or to or upon any successor Corporation;
(c) To correct or amplify the description of any property hereby conveyed, assigned, or pledged or intended so to be, or to convey, transfer, and/or assign to the Trustee, and to subject to or confirm the Lien of this Indenture upon, with the same force and effect as though included in the granting clauses' hereof, additional properties and franchises hereafter acquired by the Company through consolidation or merger, or by purchase or otherwise;
(d) To include in the Mortgaged Property any assets of the Company now classified as Excepted Property;
(e) To evidence the succession of another Corporation to the Company, or successive successions, and the assumption by such successor Corporation of the covenants, agreements, and obligations of the Company under this Indenture and to provide for the execution, certification, and issue of Bonds hereunder pursuant to 14.04;
(f) For the purpose of curing any ambiguity, or of curing, correcting, or supplementing any defective or inconsistent provision contained herein or in any Supplemental Indenture;
(g) For the appointment of a separate trustee or a co-trustee to act under this Indenture and/or under any Supplemental Indenture;
(h) To provide the terms and conditions of Bonds of a new series or for the exchange of Bonds of one series for Bonds of another series; or for the conversion of Bonds of any series into capital stock, or other securities and the terms and conditions of such conversion;
(i) To provide for meetings of Bondholders;
(j) To amend this Indenture by modifying, eliminating, or amending any provision contained therein which is required by the Trust Indenture Act of 1939, to be included in an indenture to be qualified under said Act so long as the Indenture, as so amended, shall comply with the provisions of said Act in effect at the time of any such amendment; to eliminate all such required provisions in the event said Act shall no longer be in effect; or to insert in this Indenture any provision which shall be required by the provisions of said Act then in effect; provided, however, that no such modification, elimination, or amendment of any such provision or provisions which would adversely affect any Bonds theretofore issued and then Outstanding under this Indenture shall be made;
(k) To modify any of the provisions of this Indenture for the purpose of relieving the Company from any of the obligations, conditions, or restrictions herein contained; provided that no such modification shall be or become operative or effective, or in any manner impair any of the rights of the Bondholders or of the Trustee, while any Bonds of any series established prior to the execution of such Supplemental Indenture shall remain Outstanding; and provided, further, that such Supplemental Indenture shall be specifically referred to in the test of all Bonds of any series established after the execution of such Supplemental Indenture; and provided also, that the Trustee may in its uncontrolled discretion decline to enter into any such Supplemental Indenture which, in its opinion, may not afford adequate protection to the Trustee when the same shall become operative;
(l) For any other purpose not inconsistent with the terms of this Indenture.
Any Supplemental Indenture authorized by the provisions of this
Section may be executed by the Company and the Trustee without the consent
of the holders of any of the Bonds at the time Outstanding notwithstanding
any of the provisions of 16.02.
16.02 The Company and the Trustee, at any time and from time to time, may also enter into one or more Supplemental Indentures for the purpose of modifying, amending, suspending, or rescinding any of the provisions of this Indenture, or inserting any provision therein, if such modification, amendment, suspension, rescission, or insertion shall be approved by resolution of the Board of Directors of the Company and by the written consent, filed with the Trustee, of the holders of not less than seventy percentum (70%) in principal amount of the Bonds at the time Outstanding (excluding Company-owned Bonds); provided, however:
(1) that, before any such Supplemental Indenture shall be executed by the Trustee or be of any effect, there shall be filed with the Trustee an Officers' Certificate to the effect that Published Notice has been given for not less than four (4) successive calendar weeks, stating in general terms the substance of any modification, amendment, suspension, rescission, or insertion embodied in any such Supplemental Indenture presented to the Trustee for execution, and that a similar notice has been mailed, postage prepaid, at least thirty (30) days prior to such presentation to the Trustee, to each registered owner of Bonds then Outstanding hereunder at his address as given upon the registry books kept by the Trustee, provided however that if at any time not more than forty-five (45) and not less than thirty (30) days prior to such presentation to the Trustee, all Bonds Outstanding hereunder shall be in fully registered form, Published Notice as aforesaid may be dispensed with;
(2) that no such modification, amendment, suspension, rescis- sion, or insertion shall be such, or shall be so construed, as to change any of the powers, rights, duties, or obligations of the Trustee without the Trustee's written assent thereto;
(3) that no action shall be taken under this Section affecting the rights of the holders of one or more series of Bonds in any manner or to any extent differing from that in or to which the rights of holders of any other series of Bonds are affected, unless such action shall have received the written consent, filed with the Trustee, of holders of not less than seventy percentum (70%) in principal amount of the Bonds of each series so affected then Out- standing (excluding Company-owned Bonds);
(4) that no such modification, amendment, suspension, rescis- sion, or insertion shall affect the obligation of the Company in respect of the principal of or interest on any Bond, which obligation is absolute, unconditional, and unalterable, or permit any change in the principal amount, or premium, or any extension of the maturity, of any Bond, or the reduction of the rate, or extension of the time of payment, of the interest thereon, or permit any modification in the terms of payment of such principal or interest, without the consent of the holder thereof, or impair or affect the right of any Bondholder, without his consent, to receive payment of the principal of or interest on any of his Bonds on or after the respective due dates expressed in the Bonds and coupons, or to institute suit for the enforcement of any such payment on or after such respective dates, subject to the limitations contained in 9.18 hereof;
(5) that no such modification, amendment, suspension, rescis- sion, or insertion shall reduce the percentage required by the pro- visions of this Section for the taking of any action thereunder, or shall permit any other change in any of the provisions of this Section, or authorize the creation by the Company, except as herein expressly authorized, of any mortgage, pledge, or lien on any part or all of the Mortgaged Property ranking prior to or on an equality with the Lien of this Indenture.
Subject to the provisions of 13.02 and 13.03 hereof the Trustee shall receive
and shall be entitled to rely for all purposes on an Opinion of Counsel that
the provisions of any such Supplemental Indenture executed by the Company and
presented to the Trustee for execution comply with the provisions hereof; and
any such Supplemental Indenture executed by the Company, and by the Trustee
pursuant to such Opinion of Counsel, shall have full force and effect
notwithstanding any conflict thereof with any provisions hereof, (or of any
prior Supplemental Indenture) other than subclauses (1), (2), (3), (4), and
(5) immediately preceding; and the Trustee shall be as fully protected in
relying on and acting pursuant to any such Supplemental Indenture as if the
provisions thereof were herein set forth as a part hereof, and were expressed
to control, in case of conflict, all other provisions hereof.
It shall not be necessary for the consent of Bondholders under this
Section to approve the particular form of any proposed Supplemental Indenture
but it shall be sufficient if such consent shall approve the substance
thereof.
16.03 In each and every case provided for in this Article, the Trustee shall be entitled to exercise its uncontrolled discretion in determining whether or not any proposed Supplemental Indenture, or any term or provision thereof, is necessary or desirable, having in view the needs of the Company and the respective rights and interests of the holders of Bonds theretofore issued hereunder; and the Trustee, subject to the provisions of 13.02 and 13.03 hereof shall be under no responsibility or liability to the Company or to any holder of any Bond, or otherwise, for any act or thing which it may do or decline to do in good faith, pursuant to the provisions of this Article XVI, in the exercise of such discretion.
16.04 The Trustee is authorized to join with the Company in the execution of any Supplemental Indenture authorized under this Article XVI, to make the further agreements and stipulations which may be therein contained, and to accept the conveyance, transfer, and assignment of any property thereunder.
Any Supplemental Indenture executed in accordance with any of the provisions of this Article shall thereafter form a part of this Indenture; and all the terms and conditions contained in any such Supplemental Indenture, if authorized hereby to be contained therein, shall be, and be deemed to be, part of the terms or conditions hereof for any and all purposes, and, if deemed necessary or desirable by the Trustee, any of such terms or conditions may be set forth in reasonable and customary manner in the Bonds of the particular series to which such Supplemental Indenture shall apply and express reference may be made thereto in the test of the Bonds of any series issued thereafter; provided, however, that each such supplemental indenture or mortgage shall comply with any applicable requirements of the Trust Indenture Act of 1939 as in effect on the date of the execution of this Indenture, unless said Act shall then have been repealed, and shall stipulate that the Trustee shall not be taken impliedly to waive thereby any right it would otherwise have, and that nothing in this Section shall affect or limit the obligation of the Company to execute and deliver to the Trustee any instrument of further assurance, or other instrument, which elsewhere in this Indenture is required to be made to or with the Trustee.
ARTICLE XVII.
Miscellaneous
17.01 Nothing in this Indenture, expressed or implied, is intended or shall be construed to confer upon, or give to any person or corporation other than the parties hereto and the holders from time to time of the Bonds and coupons Outstanding hereunder, any security, rights, remedies, or claims, legal or equitable, under or by reason hereof, or any covenant, condition or stipulation hereof; and this Indenture and all the covenants, conditions, stipulations, and agreements herein are and shall be held to be for the sole and exclusive benefit of the parties hereto and the holders from time to time of the Bonds and coupons Outstanding hereunder.
17.02 Each Certificate or Opinion provided for in this Indenture delivered to the Trustee in respect to compliance with a condition or covenant herein contained shall include (1) a statement that the person making such Certificate or Opinion has read such covenant or condition; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such Certificate or Opinion are based; (3) a statement that, in the opinion of such person, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such a covenant or condition has been complied with; and (4) a statement as to whether or not in the opinion of such person such condition or covenant has been complied with.
Each Certificate or Opinion of an Independent Engineer or Independent Accountant provided for in this Indenture delivered to the Trustee shall also state that such Engineer or Accountant, as the case may be, is in fact independent and is not a director, officer, or employee of, or under retainer by, the Company or any Affiliate of the Company.
17.03 Any notice or demand by any Bondholder to or upon the Trustee shall be due and sufficient notice or demand for each and every purpose hereunder if made by written instrument delivered to the Trustee at its principal office. Any notice or demand which by any provision of this Indenture is required or provided to be given or served by the Trustee or by any Bondholder, upon the Company shall be deemed to have been sufficiently given or served for all purposes if mailed as registered mail matter, postage prepaid, addressed as follows:
Western Massachusetts Electric Company 45 Federal Street Greenfield, Massachusetts
or addressed to the Company at any other address which it may file with the Trustee as the address to which notices or demands shall be mailed.
17.04 All parties to this Indenture agree, and each holder or owner of any Bond by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Trustee, to any suit instituted by any Bondholder, or group of Bondholders, holding in the aggregate more than ten percentum (10%) in aggregate principal amount of the Bonds outstanding (excluding Company-owned Bonds), or to any suit instituted by any Bondholder for the enforcement of the payment of the principal of or interest on any Bond, on or after the respective due dates expressed in such Bond.
17.05 If and to the extent that any provision of this Indenture limits, qualifies, or conflicts with any other provision included herein that is required to be included herein by the Trust Indenture Act of 1939, such required provision shall control.
17.06 Wherever reference is made in this Indenture to the Trust Indenture Act of 1939, reference is made to such Act as it was in force on the date of the execution of this Indenture.
17.07 Whenever in this Indenture either of the parties hereto is named or referred to, the successors and assigns of such party shall be deemed to be included, and all the covenants, promises, and agreements in this Indenture contained by or on behalf of the Company, or by or on behalf of the Trustee, shall bind and inure to the benefit of their respective successors and assigns, whether so expressed or not.
17.08 In case any one or more of the provisions contained in this Indenture or in the Bonds or coupons shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provisions of this Indenture, but this Indenture shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein.
17.09 The date of this Indenture, to wit, August 1, 1954, is in- tended as and for a date for reference and for identification, the actual time of the execution hereof being the date written in the testimonium clause hereof.
17.10 The cover of this Indenture, and all Articles and description headings, and the table of contents and marginal notes and headings, if any, are inserted for convenience of reference, and are not to be taken to be any part of these provisions, nor to control or affect the meaning, construction, or effect of the same.
17.11 It is hereby certified that the United States Internal Revenue tax which may be imposed by reason of the initial issue of eleven million dollars ($11,000,000) principal amount of the 2.95% Bonds, and which may be paid by affixing stamps to this Indenture, has been paid by affixing to an original counterpart hereof (to be filed with the Trustee), and duly canceling, the required stamps.
17.12 This Indenture may be simultaneously executed in any number of counterparts, each of which shall be deemed an original; and all said counterparts executed and delivered, each as an original, shall constitute but one and the same instrument, which shall for all purposes be sufficiently evidenced by any such original counterpart.
IN WITNESS WHEREOF, said Western Massachusetts Electric Company has caused this instrument to be executed in its corporate name by its President or one of its Vice-Presidents, thereunto duly authorized, and its corporate seal to be hereto affixed, attested by its Clerk or an Assistant Clerk and said Old Colony Trust Company has caused this instrument to be executed in its corporate name by one of its Vice-Presidents, thereunto duly authorized, and its corporate seal to be hereto affixed, all on August 17, 1954, but as of the day and year first above written.
WESTERN MASSACHUSETTS ELECTRIC COMPANY
By /s/ Howard J. Cadwell
President
ATTEST:
/s/ James Gray
Clerk
signed, sealed and delivered by
Western Massachusetts Electric
Company in our presence:
/s/ A. W. Wilkinson
/s/ D. R. Pokross
OLD COLONY TRUST COMPANY
By /s/ J. J. Walsh
Vice-President
Signed, sealed and delivered by
Old Colony Trust Company in our
presence:
/s/ A. W. Wilkinson
/s/ D. R. Pokross
SCHEDULE A
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I. All real estate and rights in real estate owned of record by the Company, as follows:
A. Hydro-Electric Properties
A.1. Turners Falls Dam and associated or adjacent real estate as follows:
The site of The Turners Falls dam across the Connecticut River in the towns of Montague and Gill in Franklin County, Massachusetts, including land in said towns occupied by the head gates, canal, and forebay; two hydro-electric generating stations in said Montague known as Cabot Station and Turners Falls Station; office building, garage, maintenance building, and switching station in said Montague; also the flowage, seepage, and percolation rights appurtenant to said dam, canal, and forebay upstream of said dam in said towns and in the towns of Erving, Northfield, and Greenfield (all in said Franklin County) and extending into Hinsdale, New Hampshire, and Vernon, Vermont. The title to said site and rights hereby conveyed is that acquired by the Company by deed of Turners Falls Power & Electric Company dated December 30, 1942, and recorded in Franklin County Deeds, Book 856, page 174, and by two deeds of other grantors dated March 30, 1949, and November 14, 1950, and recorded with said Deeds, Book 934, page 372, and Book 956, page 197, respectively; except that rights under certain indentures to draw and use water from said canal have since then been released to the Company. The title conveyed to the Company thereby was then and is now subject to indentures between said Turners Falls Power & Light Company, or a predecessor thereof, and others, relating to rights to draw and use water from said canal, as follows:
Indentures with Keith Paper Company dated September 2, 1873, and recorded Book 275, page 397, dated June 2, 1885, and recorded Book 377, page 235, dated September 12, 1892, and recorded Book 427, page 100, dated August 21, 1900, and recorded Book 478, page 252, dated June 13, 1912, and recorded Book 576, page 78, dated December 29, 1920, and recorded Book 650, page 288, dated May 1, 1922, and recorded Book 876, page 12; Indenture with Marshall Paper Company dated June 20, 1895, and recorded Book 440, page 334; Indentures with Esleeck Manufacturing Company dated July 22, 1903, and recorded Book 504, page 154, dated July 28, 1922, and recorded Book 691, page 124, dated August 7, 1928, and recorded Book 751, page 40.
A.2. Gardners Falls Dam and associated or adjacent real estate as follows:
The site of Gardners Falls Dam across the Deerfield River in the towns of Buckland and Shelburne including land occupied by the head gates, canal, and forebay in said towns; the hydro-electric generating station in said Buckland; also the flowage, seepage, and percolation rights appurtenant to said dam, canal, and forebay upstream of said dam in said towns; the title to said real estate and rights in real estate being that acquired by the Company by the following deeds, of which all but the last were acquired under the Company's prior name, Greenfield Electric Light & Power Company:
Recording Reference in
Date of Deed Franklin County Deed
(a) June 23, 1903 Book 501, page 223
(b) June 26, 1903 Book 501, page 231
(c) April 30, 1904 Book 557, page 111
(d) May 23, 1918 Book 632, page 230
(e) May 9, 1919 Book 650, page 11
(f) June 11, 1924 Book 690, page 312
(g) October 25, 1945 Book 884, page 310.
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A.3. Dam across Green River and associated or adjacent real estate as follows:
The site of the dam across Green River in said Greenfield including land occupied by the head gates, canal, and forebay and hydro-electric station, all in said Greenfield; also the flowage, seepage, and percolation rights appurtenant to said dam, canal, and forebay upstream of said dam in said town; the title to said real estate and rights in real estate being that acquired by having been conveyed to the Company (under its prior name, Greenfield Electric Light & Power Company) by deed of Arthur D. Potter and others dated September 23, 1910, and recorded in said Franklin County Deeds, Book 566, page 123.
A.4. Indian Orchard Dam and associated or adjacent real estate as follows:
The site of the Indian Orchard Dam across the Chicopee River in the town of Ludlow and city of Springfield, both in Hampden County, Massachusetts, including land occupied by head gates, canal, and forebay in said town and city; a hydro-electric generating station in said Springfield; also the flowage, seepage, and percolation rights appurtenant to said dam, canal, and forebay upstream of said dam in said town and city; the title to said real estate and rights in real estate being that acquired by the Company by deed of United Electric Light Company dated December 30, 1942, and recorded in Hampden County Deeds, Book 1753, page 597.
A.5. Leases: The rights of the Company as lessee under the following leases to it:
(a) Lease from the City of Springfield dated June 21, 1928, and recorded with Hampden County Deeds, Book 1467, page 174, as amended by two later agreements, one dated August 1, 1928, recorded with said Deeds, Book 1467, page 186, and the other dated February 25, 1929, recorded with said Deeds, Book 1467, page 187, subject to the payment of rent as therein provided, of a hydro-electric generating station situated on the Westfield Little River in the town of Granville known as the Cobble Mountain Plant, together with the right to operate said plant for the generation of electricity and to sell the electricity so generated and for this purpose to draw water from the Cobble Mountain Reservoir so-called which is owned by said City, all as set forth in said lease as amended; except the last day of the term of said lease.
(b) Lease from The Quinnehtuk Company dated June 30, 1947, but not
recorded, subject to the payment of rent as therein provided, of a
hydroelectric development on Chicopee River in the city of Chicopee
known as the Dwight Plant, said lease being for a period of ten years
beginning July 1, 1947, with provisions for successive automatic
renewals and for termination on thirty days' notice by either party;
except the last day of the term of said lease.
B. Steam Generating Properties
B.1. West Springfield plant consisting of the following:
(a) The site of the principal steam generating plant of the Company and of an outdoor substation and other transmission facilities in the town of West Springfield, Hampden County, on the westerly side of Highway Route 5, so-called.
(b) The site of the screen well house between the easterly side of said Route 5 and Connecticut River; said sites (a) and (b) together containing about fifty acres.
(c) Easements appurtenant to parcels (a) and (b) for tunnels under said Route 5. For Company's title to said easements, see the following deeds in said Hampden County Deeds:
Book 1358, page 260
Book 1864, page 97
Book 1900, page 171
Book 1900, page 169
Book 2017, page 287
Book 2315, page 342
The title to said sites (a) and (b) being that acquired by the Company by the following deeds recorded in said Hampden Deeds:
Date Recording Data
December 30, 1942 Book 1753, page 597
January 7, 1947 Book 1846, page 303
January 7, 1947 Book 1846, page 378
March 1, 1947 Book 1864, page 100
April 1, 1947 Book 1864, page 93
April 1, 1947 Book 1864, page 95
May 12, 1947 Book 1867, page 14
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The land acquired under said deeds was reduced by taking of Commonwealth of Massachusetts for said Route 5. (See Book 2264, page 462, Book 2274, page 228.)
B.2. The site of a team generating plant in said Springfield on the easterly side of the Connecticut River at the foot of State Street containing about 157,600 square feet; the title to said real estate being that acquired by the Company by the following deeds recorded in said Hampden County Deeds:
Date Recording Data
December 30, 1942 Book 17O3, page 597
February 16, 1948 Book 1925, page 69
July 29, 1948 Registered land. See Certificate No. 4574.
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B.3. The site containing about thirty-four acres of a steam generating plant in the city of Chicopee at the confluence of the Chicopee and Connecticut Rivers at the foot of Depot Street; the title to said real estate being that acquired by the Company by deed from Turners Falls Power & Electric Company dated December 30, 1942, recorded in said Hampden County Deeds, Book 1753, page 594.
B.4. The site of a steam generating plant and transmission facilities, including an outdoor substation and other transmission facilities, in the city of Pittsfield, Berkshire County, at the corner of Fourth Street and Silver Lake Road, containing about 298,000 square feet; the title to said real estate being that acquired by the Company by deed from Pittsfield Electric Company dated December 30, 1942, recorded in Berkshire Middle District Deeds, Book 511, page 43.
C. Transmission and Distribution Properties, the titles to the various sites being those acquired by the Company by the respective deeds below mentioned:
Fourteen sites in said Springfield as follows:
C.1. Of the Distribution Department building, garage, and storage facilities on King Street containing about 114,000 square feet.
C.2. Of the Meter Department building, a substation and storage facili- ties on Wilbraham Avenue containing about 123,000 square feet.
C.3. Of No. 4 Distribution Substation building, so-called, on Carew Street, containing about 23,000 square feet.
C.4. Of No. 5 Transmission Substation building, so-called, and trans- mission line facilities on Page Boulevard, containing about eleven acres.
C.5. Of No. 7 Distribution Substation building, so-called, at the corner of Converse and Buckler Streets, containing about 19,923 square feet.
C.6. Of a Distribution Substation building at the corner of Armory and Ledyard Streets containing about 6,937 square feet.
C.7. Of a Distribution Substation building on Birnie Avenue containing about 4,740 square feet.
The above sites, C.1 to C.7 inclusive, were all acquired by the Company by deed of United Electric Light Company dated December 30, 1942, and recorded in Hampden County Deeds, Book 1753, page 597.
C.8. Of Unit Substation No. 12 so-called, on Longhill Street, contain- ing about 9,968 square feet, acquired by deed of J. C. Nowak, dated January 27, 1948, and recorded in said Hampden County Deeds, Book 1919, page 432.
C.9. Of Unit Substation No. 13 so-called, on Berkshire Avenue and
Jasper Street containing about 3,520 square feet, acquired by deed of Marcel
A. Bedard dated November 10, 1949, and recorded in said Hampden County Deeds,
Book 2019, page 325.
C.10. Of Unit Substation No. 14 so-called, on said Carew Street containing about 5,000 square feet, acquired by deed of Stephen W. Sarandis and Demetrius G. Hondros dated November 25, 1949, and recorded in said Hampden County Deeds, Book 2021, page 451.
C.11. Of Unit Substation No. 15 so-called, on Main Street (Indian Orchard section) containing about 5,000 square feet, acquired by deed of Stanley J. Chmura dated February 24, 1950, and recorded in said Hampden County Deeds, Book 2034, page 561.
C.12. Of a prospective unit substation at the corner of Wilbraham Road and Kane Street containing about 8,986 square feet, acquired by deed of Elizabeth Varanka dated October 8, 1953, and recorded in said Hampden County Deeds, Book 2270, page 514.
C.13. Of a prospective unit substation on Allen Street containing about 20,963 square feet, acquired by deed of Frank Pessolano dated October 8, 1953, and recorded in said Hampden County Deeds, Book 2270, page 515.
C.14. Of a prospective unit substation and transmission substation at the corner of said Wilbraham Road and Bradley Road containing about 11.85 acres, acquired by deed of Estate of Jane D. Namack dated November 2, 1953, and recorded in said Hampden County Deeds, Book 2276, page 412.
Twenty-two sites outside of said Springfield as follows:
C.15. Of No. 9 Distribution Substation so-called, on Southwick Street, Agawam, in said Hampden County, containing about 32,480 square feet, acquired by said deed of United Electric Light Company dated December 30, 1942, recorded in said Hampden County Deeds, Book 1753, page 597.
C.16. Of No. 19 Distribution Substation on Perry Street in said Agawam containing about 9,927 square feet, acquired by two deeds of Agawam Manufacturing Company, Inc. dated October 9, 1952, and June 8, 1954, recorded in said Hampden County Deeds, Books 2203, page 159, and Book 2315, page 544, respectively.
C.17. Of No. 10 Distribution Substation on Hubbard Street in said Ludlow containing about 13,699 square feet, acquired by said deed of United Electric Light Company dated December 30, 1942, recorded in said Hampden County Deeds, Book 1753, page 597.
C.18. Of No. 11 Unit Substation on Union Street in said West Springfield containing about 7,000 square feet, acquired by deed of Walter R. Johnson et ux. dated November 25, 1947, recorded in said Hampden County Deeds, Book 1908, page 275.
C.19. Of No. 17 Unit Substation on Kings Highway in said West Springfield, containing about 15,000 square feet, acquired by deed of Rachel E. Raleigh dated September 29, 1952, recorded in said Hampden County Deeds, Book 2200, page 432.
C.20. Of No. 16 Distribution Substation so-called, on Longmeadow Street in Longmeadow, in said Hampden County, containing about 13,600 square feet, acquired by deed of Marjorie S. Jennings, dated September 6, 1951, recorded in said Hampden County Deeds, Book 2134, page 108.
C.21. Of a Unit Substation at the corner of Bernardston-Northfield State Highway and Turners Falls Road, in Bernardston, in said Franklin County, containing about 15,491 square feet, acquired by deed of Herbert L. Ryther dated July 13, 1948, recorded in said Franklin County Deeds, Book 914, page 348.
C.22. Of Regulator Units on State Highway leading from Shelburne Falls in Colrain, in said Franklin County, containing about 7,000 square feet, acquired by deed of Earle H. Temple and Harold D. Temple dated February 3, 1941, recorded in said Franklin County Deeds, Book 845, page 155.
C.23. Of a Unit Substation on Graves Street in Deerfield, in said Franklin County, containing about 4.8 acres, acquired by deed of Selvestor Jachimowicz et ux. dated December 10, 1949, recorded in said Franklin County Deeds, Book 943, page 351.
C.24. Of a Distribution and Meter Department building, garage, and storage facilities on Federal Street in said Greenfield, containing about 43,000 square feet, acquired by the following deeds, of which all but the last were acquired under the Company's prior name, Greenfield Electric Light & Power Company; being recorded in said Franklin County Deeds.
Date Recording Data
(a) January 24, 1913 Book 594, page 23
(b) May 5, 1916 Book 624, page 12
(c) June 13, 1916 Book 624, page 60
(d) April 14, 1920 Book 662, page 82
(e) April 29, 1920 Book 663, page 101
(f) May 17, 1920 Book 661, page 126
(g) June 7, 1920 Book 661, page 167
(h) April 8, 1927 Book 738, page 24
(i) February 1, 1929 Book 758, page 141
(j) July 1, 1929 Book 767, page 5
(k) January 8, 1930 Book 748, page 393
(l) May 10, 1945 Book 883, page 21
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Note: A portion of the parcel acquired by said deed (e) was conveyed to Town of Greenfield by deed dated December 18, 1925, recorded in said Deeds, Book 707, page 372, but a right of way 12 feet wide to Main Street was reserved by the Company in said deed over said portion so conveyed.
Also by the same deed to said Town portions of the parcels acquired by said deeds (f) and (g) were conveyed to said Town.
Said portions so conveyed to said Town are not included in the area of about 43,000 square feet.
C.25. Of a Unit Substation on Franklin Street in said Greenfield, containing about 16,346 square feet, acquired by deed of Franklin Savings Institution dated January 13, 1939, recorded in said Franklin County Deeds, Book 827, page 336.
C.26. Of Greenfield Substation building and transmission line facilities on Mill Street, in said Greenfield, containing about 525,865 square feet, acquired by the Company under its prior name, Greenfield Electric Light & Power Company by the following deeds recorded in said Franklin County Deeds:
Date Recording Data
(a) August 2, 1897 Book 457, page 112
(b) June 21, 1915 Book 601, page 381
(c) February 2, 1916 Book 612, page 70
(d) April 21, 1916 Book 611, page 170
(e) February 18, 1925 Book 707, page 78
(f) December 18, 1925 Book 706, page 348
(g) September 6, 1926 Book 736, page 158
(h) September 27, 1926 Book 737, page 150
(i) May 7, 1931 Book 775, page 155
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Note: A portion of the parcel acquired by said deed (b) was conveyed
to H. Kunaszko by deed dated February 2, 1916, recorded in said Deeds,
Book 612, page 70. Also portions of the parcels acquired by said deeds
(g) and (h) were taken by said Town March 26, 1954, for highway purposes by
a taking recorded in said Deeds, Book 1000, page 348. Said portions are not
included in the area of about 525,865 square feet.
C.27. Of the Millers Falls Substation so-called, on Grand Avenue in said Montague containing about 9,712 square feet (under the name of Green- field Electric Light & Power Company) by deed of Franklin Electric Company dated July 21, 1923, recorded in said Franklin County Deeds, Book 674, page 361.
C.28. Of Montague Town Substation so-called, on Sunderland-Turners Falls Highway in said Montague, containing about 11,592 square feet, acquired by deed of Boston and Maine Railroad dated December 21, 1950, recorded in said Franklin County Deeds, Book 956, page 389.
C.29. Of Leyden Substation so-called, on Greenfield Road in Leyden in said Franklin County, containing about 7,500 square feet, acquired by deed of William A. Webb et ux. dated November 14, 1952, recorded in said Franklin County Deeds, Book 982, page 54.
C.30. Of Agawam Substation so-called, a service building, storage facilities, and transmission facilities on Maple Street in said Agawam containing about 22.13 acres, acquired by deed of Turners Falls Power & Electric Company dated December 30, 1942, recorded in said Hampden County Deeds, Book 1753, page 594.
C.31. Of Chicopee Substation so-called, and transmission facilities on Gratton Street in said Chicopee containing about 5 acres acquired by said deed of Turners Falls Power & Electric Company dated December 30, 1942, recorded in said Hampden County Deeds, Book 1753, page 194.
C.32. Of Westfield Substation so-called, on Elm Street in the city of Westfield in said Hampden County, containing about 41,086 square feet, acquired by two deeds of said Turners Falls Power & Electric Company and of The Quinnehtuk Company dated December 30, 1942, and October 31, 1944 respec- tively; and recorded in said Hampden County Deeds, Book 1753, page 594, and Book 1790, page 54, respectively.
C.33. Of Amherst Substation so-called, garage, transmission, and storage facilities on College Street in Amherst, Hampshire County, Massachusetts, containing about 5 acres, acquired by deed of Western Counties Electric Company dated December 30, 1933, recorded in Hampshire County Deeds, Book 893, page 488.
C.34. Of the West Chesterfield Substation so-called, northerly of, but not abutting on, the Chesterfield-West Chesterfield Highway in Chesterfield in said Hampshire County, containing about 3,000 square feet, with a right of way to said site from said highway, acquired by said deed of Western Counties Electric Company dated December 30, 1933, recorded in said Hampshire County Deeds, Book 893, page 488.
C.35. Of a garage with stock room and storage facilities on Liberty Street, Easthampton, in said Hampshire County, containing about 42,312 square feet, acquired by deed of Easthampton Gas Company dated May 31, 1935, recorded in said Hampshire County Deeds, Book 906, page 219.
C.36. Of Easthampton Substation so-called, on said Liberty Street in said Easthampton containing about 57,000 square feet, acquired by said deed of Western Counties Electric Company dated December 30, 1933, recorded in said Hampshire County Deeds, Book 893, page 488.
C.37. Of Mount Tom Substation so-called, on State Highway leading to Northampton in said Easthampton containing about 6 acres, acquired by deed of said Turners Falls Power & Electric Company dated December 30, 1942, recorded in said Hampshire County Deeds, Book 972, page 521.
C.38. Of Bancroft Substation so-called, on Bancroft Road in the town of Becket, in said Berkshire County, containing about 11,689 square feet.
C.39. Of Dalton Substation so-called, on Housatonic Street in the town of Dalton, in said Berkshire County, containing about 47,000 square feet.
C.40. Of Canal Street Substation so-called, at the foot of Canal Street in Lee in said Berkshire County, containing about 9,000 square feet.
C.41. Of Valley Mill Substation so-called, on the easterly side of Housatonic River in Lee, containing about .87 acres.
C.42. Of Maple Street Substation so-called, on Maple Street in said Lee containing about 44,700 square feet.
C.43. Of Woodland Road Substation so-called, and transmission facilities on Woodland Road in said Lee containing about 25 acres.
Sites numbered 38 to 43 inclusive were all acquired by deed of Pittsfield Electric Company dated December 30, 1942, recorded in Berkshire County Middle District Deeds, Book 511, page 43.
C.44. Of Fairview Street Substation so-called, on Fairview Street in said Lee containing about 70,000 square feet acquired by deed of Southern Berkshire Power and Electric Company dated November 9, 1945, recorded in said Berkshire County Middle District Deeds, Book 512, page 435.
C.45. Of Renne Avenue Substation so-called, on Eagle Street in said city of Pittsfield, containing about 5,740 square feet, acquired by said deed of Pittsfield Electric Company dated December 30, 1942, recorded in said Berkshire County Middle District Deeds, Book 511, page 43.
C.46. Of Seymour Street Substation so-called, on Seymour Street in said Pittsfield containing about 3,960 square feet, acquired by deed of Leonard S. Murrel et ux. dated April 13, 1950, recorded in said Berkshire County Middle District Deeds, Book 555, page 374.
C.47. Of Dorchester Avenue Substation so-called, on Dorchester Avenue in said Pittsfield containing about 10,000 square feet, acquired by deeds of Turners Falls Power & Electric Company and Pittsfield Electric Company dated December 30, 1942, recorded in said Berkshire County Middle District Deeds, Book 512, page 42, and Book 511, page 43, respectively.
C.48. Of Coltsville Substation so-called, on Merrill Road in said Pittsfield containing about 39,525 square feet, acquired by deeds of Edward H. Prentice et ux. dated April 15, 1952, and March 26, 1953, recorded in said Berkshire County Middle District Deeds, Book 583, page 121, and Book 595, page 156, respectively.
C.49. Of Wyandotte Substation so-called, on North Street in said Pittsfield containing about 15,000 square feet, acquired by deed of Francis J. Quirico dated March 4, 1954, recorded in said Berkshire County Middle District Deeds, Book 610, page 318.
C.50. Of Doreen Substation so-called, and transmission line and switching facilities on Elm Street in said Pittsfield, containing about 12 acres, acquired by deed of Anna Dragone dated November 3, 1952, recorded in said Berkshire County Middle District Deeds, Book 590, page 568.
D. Office Properties
The following sites of office properties, in addition to office properties included in the sites above mentioned; the titles to the various sites being those acquired by the Company by the respective deeds below mentioned:
D.1. Of the office of the Springfield Division, 73 State Street, Springfield containing about 51,187 square feet, acquired by said deed of United Electric Light Company dated December 30, 1942, recorded in Hampden County Deeds, Book 1753, page 597.
D.2. Of office, living quarters, and garage on College Highway in Southwich; Hampden County, containing about 9,528 square feet, acquired by deed of Pittsfield Electric Company dated December 30, 1942, recorded in Hampden County Deeds, Book 1753, page 592.
D.3. Of an office building on Federal Street in said Greenfield containing about 10,041 square feet, acquired (under prior name of Greenfield Electric Light & Power Company) by deed of Jacob Schick dated December 13, 1929, recorded in Franklin County Deeds, Book 768, page 101.
D.4. Of an office building, a Distribution Department building, garage, and storage facilities on Eagle Street in said Pittsfield, containing about 56,586 square feet, acquired by deed of Pittsfield Electric Company dated December 30, 1942, recorded in Berkshire County Middle District Deeds, Book 511, page 43.
E. Miscellaneous Properties Not Included in the Foregoing and Not Including Easements or other Transmission Line Rights
The titles to the various sites are those acquired by the Company by the respective deeds below mentioned:
E.1. Of the former location of Northfield Substation so-called (not now in use) on Parker Avenue in Northfield, in said Franklin County, containing about 30,717 square feet, acquired (under said prior name) by two deeds, one dated December 27, 1910, recorded in said Franklin County Deeds, Book 566, page 326, and one dated February 4, 1928, and recorded with said Deeds, Book 748, page 90.
B.2. Of a radio tower and associated equipment southerly of, but not abutting on, Old Albany Road, so-called, in said Shelburne containing about 1.24 acres, acquired by deed of Guy Manners and Rachel L. Manners dated March 3, 1950, recorded in said Franklin County Deeds, Book 945, page 135; also and easement to said site acquired by deed of Harry P. Koch dated February 2, 1950, and recorded in said Franklin County Deeds, Book 944, page 315.
E.3. Of a radio tower and associated equipment on North Street in the town of Blandford, said Hampden County, containing about 2.3 acres, acquired by deed of Ethel M. Fiske dated May 13, 1953, recorded in said Hampden County Deeds, Book 2240, page 405.
E.4. Of the portion of a former transformer location, remaining after a taking by the Commonwealth of Massachusetts for Route 5, on Bishop Street in said West Springfield containing about 599 square feet, acquired by said deed of United Electric Light Company dated December 30, 1942, recorded in said Hampden County Deeds, Book 1753, page 597.
E.5. Of a former dam site and hydro-generating plant known as No. 3 Substation on East Main Street in said Chicopee and Monsanto Avenue in said Springfield containing about 14.28 acres acquired by said deed of United Electric Light Company dated December 30, 1942, recorded in said Hampden County Deeds, Book 1753, page 597.
E.6. Of a radio tower and associated equipment on Washington Mountain Road in the town of Washington in said Berkshire County, containing about 10,000 square feet, acquired by deed of Arthur W. Dust et ux. dated January 26, 1950, recorded in said Berkshire County Middle District Deeds, Book 558, page 210.
F. Transmission and Distribution Lines
All locations of record for all transmission or distribution lines of the Company of whatever capacity and wherever situated, of which the following are all the lines operating at a voltage of 13,400 volts or more. In some instances two or more lines carrying different voltages are in whole or in part within the same location.
13,400-Volt Lines
F.1. Gardners Falls Line from said Gardners Falls Hydro-Electric Station in Buckland running easterly through Shelburne and Greenfield to said Montague Substation.
F.2. South Deerfield Line from said Gardners Falls Line in Greenfield running southerly through Deerfield to said South Deerfield Substation.
F.3. Millers Falls Line from said Montague Substation easterly to said Millers Falls Substation, all in said Montague.
F.4. A distribution line from said Millers Falls Line southerly to said Montague Town Substation, all in said Montague.
F.5. Leyden Line in Greenfield and Leyden from said Greenfield Sub- station northerly to said Leyden Substation.
F.6. Mount Hermon Line from said Turners Falls Station so-called, in Montague running northerly through Gill to said Mount Hermon Substation in Bernardston.
F.7. Underground distribution line from said Gardners Falls Line in Montague westerly to said Greenfield Substation.
F.8. A line in Montague from said Montague Substation northerly to said Turners Falls Station.
F.9. A line leading from a tap off said Gardners Falls Line in Greenfield running northeasterly to said Greenfield Substation.
F.10. Lane Quarry Line from said Mount Tom Substation in Easthampton running across the Connecticut River through the town of Hadley in a northerly direction then easterly and southerly in said Amherst to Lane's Quarry.
F.11. A line from said Mount Tom Substation in Easthampton running southwesterly on the northerly side of the Easthampton Branch Railroad to said Easthampton Substation.
F.11.A. A line from said Mount Tom Substation running southwesterly on the northerly side of the Easthampton Branch Railroad, then northerly to the boundary between the city of Northampton and said Easthampton and there connecting with the lines of Northampton Electric Lighting Company.
F.12. A line in Easthampton from said Mount Tom Substation running southerly, then westerly to said Easthampton Substation.
F.13. A line from said Chicopee Substation running southerly to the United States Rubber Company (Fisk Tire Plant) with a tap therefrom running easterly, to Chicopee Manufacturing Corporation and Savage Arms Corporation (J. Stevens Arms Div.), all in Chicopee.
F.14. Willimansett Line from said Chicopee Substation running south- westerly, southerly, and westerly to the steam generating station in Chicopee; with a tap line running northerly to A. G. Spalding & Brothers, a tap line running southerly to Dwight Station, and a tap line to Moore Drop Forging Co., all in Chicopee.
F.15. Bear Hole Line from said Agawam Substation running north- westerly, westerly, and northerly, through West Springfield, to Lanes Quarries in Westfield.
F.16. Southwick Tap from said Bear Hole Line running southerly, westerly, and southerly to said No. 9 Distribution Substation, with a tap westerly to a television station, all in Agawam, and a tap in Agawam to Suzio Quarry in Southwick.
F.17. Ramapogue Line from said Bear Hole Line in said Agawam running northerly and easterly to Boston and Albany Railroad shops in West Springfield.
F.18. Merrick Line from said Agawam Substation running easterly and northerly to General Fiber Box Co. in said West Springfield.
F.19. Warehouse Point (Riverside Park) Line from said Agawam Sub- station running southerly and easterly to Riverside Park, all in said Agawam.
F.20. A line from said West Springfield Substation underground beneath the Connecticut River easterly to said State Street Substation in Springfield.
23,000-Volt Lines
F.20.A. Chester Line from said Westfleld Substation running north- westerly through Montgomery, Russell, Huntington, and Chester to Bancroft Substation in said Becket.
F.21. West Chesterfield Line, a tap off said Chester Line in Huntington running northerly through Huntington and Chesterfield to said Welt Chesterfield Substation.
F.22. Dalton Line from said outdoor substation on Silver Lake Road in Pittsfield running easterly and northeasterly to said Dalton Substation.
F.23. Coltsville Line from said Doreen Substation running northerly to said Coltsville Substation, all in Pittsfield.
F.24. Wyandotte Line from said Coltsville Substation running northerly and westerly to said Wyandotte Substation, all in Pittsfield.
F.25. A line from said Woodland Road Substation running southerly to said Maple Street Substation, thence southerly and westerly to said Fairview Street Substation, all in Lee.
F.26. A line from said Valley Mill Substation running southerly and westerly to Hurlburt Paper Company, all in Lee.
F.27. A line from said outdoor substation on Silver Lake Road in Pittsfield running easterly to said Doreen Substation, thence southerly through Pittsfield and Lenox to said Woodland Road Substation.
66,000-Vott Lines
F.28. Mount Tom-Agawam Line from said Mount Tom Substation running southerly through Easthampton, Southampton, and Westfield to said Westfield Substation, thence running southeasterly through Agawam to said Agawam Substation.
F.29. Cobble Mount Line from said Cobble Mountain Station running northeasterly through Granville to a connection in Westfield with said Mount Tom-Agawam Line.
F.30. Holyoke Tap Line from a tap in Chicopee off the Agawam-Chicopee Line below mentioned running northerly and northwesterly to Holyoke Water Power Company, in Holyoke.
F.31. A line from said Amherst Substation running southerly through Amherst and Granby, thence westerly through South Hadley and Hadley across the Connecticut River to said Mount Tom Substation.
F.32. The Hampden Tap Line, being a tap off said Agawam-Chicopee Line at a point near the Connecticut River in Chicopee, running southerly to said Steam Station in Chicopee.
Parallel 66,000-Volt and 115,000-Vott Lines
F.33. Two parallel lines, one of 66,000 volts known as the Montague- Mount Tom Line, the other of 115,000 volts known as the Montague-Agawam Line, both running from said Montague Substation northeasterly, southeasterly, and southerly through Montague, Sunderland, Leverett, and Amherst to said Amherst Substation.
F.34. Two parallel lines, one of 66,000 volts known as the Agawam- Chicopee Line, and the other of 115,000 volts known as the Montague-Agawam Line, from said Chicopee Substation running southwesterly across the Con- necticut River thence westerly and southerly into West Springfield, said lines being separated for a distance with individual rights of ways but continuing parallel again through West Springfield to said Agawam Substation.
115,000-Volt Lines
F.35. A line from said Montague Substation running northerly through Montague and Greenfield to a connection with the Harriman-Millbury line of the New England Power Company.
F.36. Montague-Pittsfield Line from said Montague Substation running westerly, southerly, and westerly through Montague thence westerly through Greenfield, Deerfield, Shelburne, Conway, Ashfield, Plainfield, Windsor, Peru, Hinsdale, Dalton, and Pittsfield to said Silver Lake Road Substation in Pittsfield.
F.37. Lanesboro Line from said Silver Lake Road Substation in Pittsfield running easterly to Doreen Substation thence northerly through Pittsfield and Lanesboro to a connection with the lines of the New England Power Company.
F.38. A line, being a portion of the Montague-Agawam Line, from said Amherst Substation running southerly and southwesterly through Amherst and Granby thence southerly, southeasterly, and southwesterly through Chicopee to aid Chicopee Substation.
F.39. East Springfield Tap Line, being a tap off the Montague-Agawam Line at a point northeasterly of the Chicopee Substation in Chicopee, running southeasterly to the Chicopee River thence southerly across said Chicopee River through Springfield to said East Springfield Substation.
F.40. Agawam-West Springfield Line from said Agawam Substation running easterly through Agawam and West Springfield and again through Agawam, thence northeasterly through West Springfield to said West Springfield Substation.
F.41. Agawam-Hartford Line from said Agawam Substation running southerly and southwesterly through Agawam to the Massachusetts-Connecticut state boundary line where connection is made with Connecticut Power Company Lines.
All the real estate and rights in real estate mentioned in this Schedule A are conveyed subject to and with the benefit of all easements, reservations, and restrictions which are set forth or referred to in the respective deeds above mentioned insofar as now in force and applicable.
The Company holds a license dated January 17, 1944, as amended by Amendment No. 1 dated April 5, 1950, and Amendment No. 2 dated January 3, 1951, granted by the Federal Power Commission for the operation and maintenance of the hydro-electric project known as the Turners Falls development on the Connecticut River and designated as Project No. 1889. The project is described in the license and includes the two hydro-electric generating stations in said Montague known as Cabot Station and Turners Falls Station, the Turners Falls dam, the headgates, canal, and forebay, and the land and water rights appurtenant to the project, all of which are mentioned in Paragraph A.1. hereof, and also all structures, fixtures, equipment, and facilities connected therewith, and the transmission lines and circuits between said Cabot Station and the switching station near said Cabot Station.
The license is effective from January 1, 1938 to June 30, 1970, and is subject to the provision among others, that the United States shall have the right upon or after the expiration of the license to take over the project upon payment as provided therein.
II. All tangible personal property now owned by the Company and situated in any city or town within the Counties of Franklin, Hampshire, Hampden, and Berkshire in the Commonwealth of Massachusetts, other than property of the character described as included in paragraphs A to J, both inclusive, of the description of the property conveyed by the Indenture to the Trustee.
COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss.
On this 17th day of August in the year 1954 before me personally came Howard J. Cadwell and James Gray, both to me personally known, who being by me duly sworn did depose and say that they reside in Greenfield, Massachusetts and in Springfield, Massachusetts, respectively; that they are respectively president and clerk of Western Massachusetts Electric Company, one of the corporations described in and which executed the foregoing Indenture; that they know the seal of said corporation; that the seal affixed to said instrument opposite the execution was affixed thereto pursuant to the authority and order of its Board of Directors; that they signed their respective names thereto by like authority; and each of them acknowledged said instrument to be his free act and deed in his said capacity and the free act and deed of Western Massachusetts Electric Company.
IN WITNESS WHEREOF I have hereunto set my hand and affixed my official seal, at Boston in said Commonwealth, the day and year first above written.
/s/ Elliot G. Kelley
Notary Public for
the Commonwealth of Massachusetts
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My commission expires: November 14, 1958
COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss.
On this 17th day of August in the year 1954 before me personally came J. J. Walsh to me personally known, who being by me duly sworn did depose and say that he resides in Dorchester, Massachusetts; that he is a vice-president of Old Colony Trust Company, one of the corporations described in and which executed the foregoing Indenture; that he knows the seal of said corporation; that the seal affixed to said instrument opposite the execution was affixed thereto pursuant to the authority and order of its Board of Directors; that he signed his name thereto by like authority; and he acknowledged said instrument to be his free act and deed in his said capacity and the free act and deed of Old Colony Trust Company.
IN WITNESS WHEREOF I have hereunto set my hand and affixed my official seal, at Boston in said Commonwealth, the day and year first above written.
/s/ Elliot G. Kelley
Notary Public for
the Commonwealth of Massachusetts
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My commission expires: November 14, 1958
I, the undersigned, Clerk of WESTERN MASSACHUSETTS ELECTRIC COMPANY, hereby certify that at a special meeting of the stockholders of said Company, duly called and held at Springfield, Massachusetts, on July 23, 1954, the following vote was duly adopted by the affirmative vote of all the outstanding stock of said Company; and I, the undersigned, further certify that at a meeting of the Board of Directors of said Company, duly called and held on July 23, 1954, at which a quorum was present and voting, the same identical vote was unanimously passed by said Board of Directors:
Further Voted: That a First Mortgage Indenture and Deed of Trust, dated as of August 1, 1954, between the Company and Old Colony Trust Company, as Trustee, providing for the issue of First Mortgage Bonds, of which $11,000,000 in original aggregate principal amount are to be issued forthwith, and known as First Mortgage Bonds, Series A, 2.95%, due October 1, 1973, and of other and further bonds of other and different series, and conveying, transferring, and assigning to said Trustee as security for said First Mortgage Bonds all real estate, rights in real estate, rights of way, and all property now owned or hereafter to be acquired by the Company and used or planned to be used by it in the business of operating its electric utility and steam systems, and the franchises of the Company thereto enabling, but excluding therefrom all cash, receivables, securities, office furniture, vehicles, materials, supplies and the like, all as described in paragraphs A to J, both inclusive, of the description of the property so conveyed, transferred, or assigned, in the form as laid before this meeting be and it is hereby approved, subject to such changes, insertions, and omissions, not inconsistent with the general tenor and purposes thereof as may be approved prior to the execution thereof by the President of the Company or any Vice President of the Company, and either the President or any Vice President be and each of them is hereby authorized and directed to execute the same for and on behalf of the Company and under its corporate seal, and either the President or any Vice President be and each of them is hereby authorized and directed to deliver the same in as many counterparts as may be deemed desirable by the said Trustee for execution by it, and that the execution as aforesaid of an Indenture of the above description by either the President or any Vice President shall be conclusive evidence that it is the Indenture in the form in which it has been hereby approved and the execution of which is hereby authorized.
And I further certify that Howard J. Cadwell is the President and Robert R. Habberley is a Vice President of said Company, each of said officers being duly authorized to execute, in the name and on behalf of said Company, the foregoing First Mortgage Indenture and Deed of Trust, dated as of August 1, 1954; and I am the Clerk of said Company, duly authorized to attest the ensealing of said First Mortgage Indenture and Deed of Trust; that the First Mortgage Indenture and Deed of Trust, to which this certificate is attached, is substantially in the form presented to and approved at each of said meetings held on July 23, 1954; that the foregoing is a correct copy of the vote adopted at each of said meetings; and that the foregoing vote remains in full force and effect without alteration.
IN WITNESS WHEREOF, I have hereunto subscribed my name as Clerk and have caused the corporate seal of the Company to be hereunto affixed on August 17, 1954.
/s/ James Gray
Clerk
RECORDING NOTE
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The First Mortgage Indenture and Deed of Trust dated as of August 1, 1954, from Western Massachusetts Electric Company to Old Colony Trust Company as Trustee, has been duly filed for record as follows:
in the following Registries of Deeds:
County of Franklin
County of Hampden
County of Hampshire
County of Berkshire-Middle District
County of Berkshire-Northern District
County of Berkshire-Southern District
all in the Commonwealth of Massachusetts
County of Cheshire
in the State of New Hampshire
Vernon Land Records
in the State of Vermont
and in the following Land Court Registration Districts:
County of Hampden
County of Hampshire
County of Berkshire-Middle District
all in the Commonwealth of Massachusetts.
A Confirmatory Indenture of Mortgage dated August 17, 1954, from said Company to Old Colony Trust Company as Trustee, incorporating by reference the terms and provisions of said First Mortgage Indenture and Deed of Trust, was duly filed for record in the offices of the clerks of the following cities and towns:
City of Boston
City of Springfield
City of Chicopee
City of Pittsfield
Town of West Springfield
City of Westfield
Town of Lee
Town of Greenfield
Town of Easthampton
Town of Dalton
Town of Montague
all in the Commonwealth of Massachusetts.
Exhibit 4.4.11
SEVENTY-FOURTH SUPPLEMENTAL INDENTURE dated as of the first day of March, 1994, made and entered into by and between WESTERN MASSACHUSETTS ELECTRIC COMPANY, a corporation organized under the laws of the Commonwealth of Massachusetts, with its principal place of business at 174 Brush Hill Avenue, West Springfield, Massachusetts 01089 (hereinafter generally called the Company), and THE FIRST NATIONAL BANK OF BOSTON, a national banking association organized under the laws of the United States of America, as successor by merger to Old Colony Trust Company, as Trustee under the Mortgage Indenture described below, with its principal office at 100 Federal Street, Boston, Massachusetts 02110 (said The First National Bank of Boston or, as applied to action antedating the effective date of said merger, said Old Colony Trust Company, being hereinafter generally called the Trustee).
WITNESSETH that:
WHEREAS the Company has heretofore executed and delivered to the Trustee its First Mortgage Indenture and Deed of Trust(FN1) dated as of August 1, 1954 (hereinafter as amended by a First Supplemental Indenture dated as of October 1, 1954, called the Original Indenture, the Original Indenture with all indentures supplemental thereto being hereinafter generally called the Indenture), conveying certain property therein described in trust as security for the Bonds of the Company to be issued thereunder as therein provided and for other purposes more particularly specified therein, and the Trustee has accepted said Trust; and
WHEREAS there are outstanding $308,219,000 aggregate principal amount of Bonds which have been issued at various times and in various amounts and with various dates of maturity and rates of interest and have been denominated Series F, Series G, Series H, Series J, Series R, Series T, Series U, Series V and Series W; and
WHEREAS the Company has authorized the issue pursuant to Section 3.08 of the Original Indenture of an additional series of its fully registered First Mortgage Bonds without coupons, to be issued under the Indenture, to be designated "First Mortgage Bonds, Series X, 6-1/4%, due March 1, 1999" (hereinafter called the Series X Bonds) and to be limited (except as provided in Section 2.13 of the Original Indenture) in aggregate principal amount to $40,000,000 being the entire issue of the Series X Bonds; and
WHEREAS the Company, pursuant to resolutions duly and legally adopted by its Board of Directors at a meeting duly called and held for the purpose, has duly authorized the execution and delivery of this Seventy-Fourth Supplemental Indenture and the issue of the Series X Bonds in the aggregate principal amount of $40,000,000; and
WHEREAS the issue of the Series X Bonds in said aggregate principal amount of $40,000,000 and the execution and delivery of this Seventy-Fourth Supplemental Indenture have been duly approved to the extent required by law by the Department of Public Utilities of said Commonwealth and by the Department of Public Utility Control of the State of Connecticut; and
(FN1) For details as to the filing and recording of this instrument in Massachusetts, see Schedule C.
WHEREAS all requirements of law and of the certificate of incorporation, as amended, and of the by-laws of the Company, including all requisite action on the part of directors and officers, and all things necessary to make the Series X Bonds, when duly executed by the Company and delivered, the valid, binding, and legal obligations of the Company, and the covenants and stipulations herein contained valid and binding obligations of the Company, have been done and performed, and the execution and delivery hereof have been in all respects duly authorized; and
NOW, THEREFORE, THIS SEVENTY-FOURTH SUPPLEMENTAL INDENTURE WITNESSETH:
In consideration of the premises and of the mutual covenants herein
contained and of the purchase and acceptance by the registered owners
thereof of the Series X Bonds at any time issued hereunder, and of one
dollar ($1) duly paid to the Company by the Trustee and for other good and
valuable considerations, the receipt whereof at or before the ensealing and
delivery of these presents is hereby acknowledged, and in confirmation of
and supplementing the Indenture, and in the performance and observance of
the provisions thereof, and in order to establish the form and
characteristics of the Series X Bonds, and to secure the payment of the
principal of and premium, if any, and interest on all Bonds from time to
time outstanding under the Indenture according to their tenor and effect,
and to secure the performance and observance of all the covenants and
conditions contained therein and in this Seventy-Fourth Supplemental
Indenture, the Company has executed and delivered this Seventy-Fourth
Supplemental Indenture, and does hereby confirm the conveyance, transfer,
assignment, and mortgage of the franchises and properties as set forth in
the Original Indenture and in all supplemental indentures prior hereto,
excepting only such as have been released in accordance with Article VII of
the Indenture and has granted, bargained, sold, conveyed, assigned,
transferred, mortgaged, and confirmed, and by these presents does grant,
bargain, sell, convey, assign, transfer, mortgage, and confirm unto The
First National Bank of Boston, as Trustee, as provided in the Indenture,
its successors in the trusts thereof and hereof, and its and their assigns,
all and singular the franchises and properties of the Company of the
character described and defined in the Original Indenture as Mortgaged
Property (including all and singular such franchises and properties which
may hereafter be acquired by the Company) acquired after the execution of
the Original Indenture including all real property conveyed to the Company
prior to the date hereof, including, but not limited to, the property set
forth in Schedule B appended hereto, subject, however, to Permitted
Encumbrances and to any mortgages or other liens or encumbrances thereon of
the character described in Section 4.10 of the Indenture existing at the time
of the acquisition of such franchises and properties by the Company or
created contemporaneously to secure or to raise a part of the purchase price
thereof and to any renewals or extensions of such Permitted Encumbrances,
mortgages or other liens or encumbrances.
There is furthermore expressly excepted and excluded from the lien and operation of this Seventy-Fourth Supplemental Indenture, and from the definition of Mortgaged Property, all the property of the Company described in clauses A to J, both inclusive, of the granting clauses of the Original Indenture, whether owned at the time of the execution of this Seventy-Fourth Supplemental Indenture or thereafter acquired by it.
TO HAVE AND TO HOLD all and singular the above described franchises and properties unto the said The First National Bank of Boston, as Trustee under the Indenture, its successors in the trusts thereof and hereof, and its and their assigns, to its and their own use forever.
BUT IN TRUST, NEVERTHELESS, upon the terms and trusts set forth in the Indenture for the equal pro rata benefit, security, and protection of the bearers or registered owners of the Bonds from time to time certified, issued, and outstanding under the Indenture, without any discrimination, preference, priority, or distinction of any Bond or coupon over any other Bond or coupon by reason of series, priority in the time of issue, sale, or negotiation thereof, or otherwise howsoever, except as otherwise provided in the Indenture;
PROVIDED, HOWEVER, and these presents are upon the condition that if the Company, its successors or assigns, shall pay or cause to be paid the principal of and the premium, if any, and interest on the Bonds Outstanding under the Indenture at the times and in the manner stipulated therein and in the Indenture and shall keep, perform, and observe all and singular the covenants and promises in said Bonds and in the Indenture expressed to be kept, performed, and observed by or on the part of the Company, then this Seventy-Fourth Supplemental Indenture and the estate and rights hereby granted shall, pursuant to the provisions of Article XV of the Original Indenture, cease, determine and be void, but only if the Indenture shall have ceased, determined and become void, as therein provided, otherwise to be and remain in full force and effect.
ARTICLE I.
DESCRIPTION AND ISSUE OF SERIES X BONDS.
Section 1.01. Series X Bonds and the certificate of authentication of
the Trustee upon said Bonds shall be substantially in the forms thereof
respectively set forth in Schedule A appended hereto, with such changes
therein as shall be approved by the Company and the Trustee. Series X
Bonds shall be designated as the First Mortgage Bonds, Series X, 6-1/4%, due
March 1, 1999 of the Company, shall be issuable in the aggregate principal
amount of forty million dollars ($40,000,000) and no more except as
provided in Section 2.13 of the Original Indenture, shall be dated as
provided in Section 1.02 of this Seventy- Fourth Supplemental Indenture,
shall mature March 1, 1999, shall bear interest at the rate specified in
their title, as provided in said Section 1.02 until the Company's obligation
in respect of the principal thereof shall be discharged, payable semiannually
on the first days of March and September in each year as provided in said
Section 1.02 (the principal and interest thereon being payable at the
principal corporate trust office of the Trustee in the City of Boston,
Massachusetts, or at the principal corporate trust office of its successors,
in such coin or currency of the United States of America as at the time of
payment is legal tender for public and private debts), shall be issued in
fully registered form in denominations of one thousand dollars ($1,000) and
any multiple thereof, shall be transferable as provided in Sectioin 2.08 of
said Original Indenture at the principal corporate trust office of the
Trustee or at the office or agency of the Company in the Borough of
Manhattan, the City of New York, New York and shall not be redeemable in
whole or in part at any time as hereinafter provided in Article III of this
Seventy-Fourth Supplemental Indenture. Notwithstanding the provisions of
Section 2.11 of the Original Indenture, no charge, except for taxes or
governmental charges, shall be made by the Company upon any registration of
transfer or exchange of Series X Bonds.
Series X Bonds in fully registered form may be exchanged at the principal corporate trust office of the Trustee or at the office or agency of the Company in the Borough of Manhattan, the City of New York, New York, for a like aggregate principal amount of Series X Bonds in fully registered form of other authorized denominations and, upon surrender for exchange of one or more of such Series X Bonds, the Company shall execute and the Trustee shall certify and there shall be delivered in exchange therefor a like aggregate principal amount of such Series X Bonds of other authorized denominations. Bonds so surrendered for exchange shall be considered as having been surrendered for Cancellation and shall be forthwith cancelled by the Trustee.
Pursuant to the provisions of Section 2.07 of the Original Indenture, the Company appoints BancBoston Trust Company of New York and its successors as the agency of the Company in the Borough of Manhattan, the City of New York, New York, for the registration of transfer and exchange of Series X Bonds.
Section 1.02. Notwithstanding the provisions of Section 2.12 of the Original Indenture, the person in whose name any Series X Bond is registered at the close of business on any record date (as herein below defined) with respect to any interest payment date shall be entitled to receive the interest payable on such interest payment date notwithstanding the cancellation of such Bond upon any registration of transfer or exchange thereof subsequent to the record date and prior to such interest payment date, except if and to the extent the Company shall default in the payment of the interest due on such interest payment date, then such defaulted interest shall be paid to the person in whose name such Bond is registered on a subsequent record date for the payment of such defaulted interest if one shall have been established as hereinafter provided and otherwise on the date of payment of such defaulted interest. A subsequent record date may be established by the Company by notice mailed to the owners of Series X Bonds not less than ten days preceding such record date, which record date shall be not more than thirty days prior to the subsequent interest payment date. The term "record date" as used in this Section with respect to any regular interest payment date shall mean the February 15 or August 15, as the case may be, next preceding such interest payment date, or, if such February 15 or August 15 shall be a legal holiday or a day on which banking institutions in the City of Boston, Massachusetts, are authorized by law to close, the next preceding day which shall not be a legal holiday or a day on which such institutions are so authorized to close.
Notwithstanding the provisions of Sections 2.01 and 2.12 of the Original Indenture, each Series X Bond shall be dated the date of the certification thereof by the Trustee, and shall bear interest on the principal amount thereof payable semiannually on the first days of March and September in each year, until the Company's obligation with respect to the principal shall be discharged, at the rate per annum specified in the title from the interest payment date next preceding the date thereof to which interest has been paid on the Bonds of said series, or if the date thereof is prior to August 16, 1994, then from the date of original issuance, or if the date thereof be an interest payment date to which interest is being paid or a date between the record date for any interest payment date to which interest is paid and such interest payment date, then from such interest payment date.
ARTICLE II.
DIVIDEND COVENANT.
Section 2.01. This Seventy-Fourth Supplemental Indenture imposes no additional restrictions on the Company's right to declare or pay any dividends or make any other distributions on or in respect of its common stock or to purchase or otherwise acquire for a consideration any shares of its common stock beyond those created by prior supplemental indentures and those in the Company's preferred stock provisions, by-laws and those otherwise required by law.
ARTICLE III.
REDEMPTION OF SERIES X BONDS.
The Series X Bonds shall not be redeemable as a whole or in part at any time.
ARTICLE IV.
THE TRUSTEE.
Section 4.01. The Trustee shall be entitled to, may exercise, and shall be protected by, where and to the full extent that the same are applicable, all the rights, powers, privileges, immunities and exemptions provided in the Indenture, as if the provisions concerning the same were incorporated herein at length. The remedies and provisions of the Indenture applicable in case of any default by the Company thereunder are hereby adopted and made applicable in case of any default with respect to the properties included herein and, without limitation of the generality of the foregoing, there are hereby conferred upon the Trustee the same powers of sale and other powers over the properties described herein as are expressed to be conferred by the Indenture.
ARTICLE V.
DEFEASANCE.
Section 5.01. This Seventy-Fourth Supplemental Indenture shall become void when the Indenture shall be void.
ARTICLE VI.
MISCELLANEOUS PROVISIONS.
Section 6.01. The recitals in this Seventy-Fourth Supplemental Indenture shall be taken as recitals by the Company alone, and shall not be considered as made by or as imposing any obligation or liability upon the Trustee, nor shall the Trustee be held responsible for the legality or validity of this Seventy- Fourth Supplemental Indenture, and the Trustee makes no covenants or representations, and shall not be responsible, as to or for the effect, authorization, execution, delivery, or recording of this Seventy-Fourth Supplemental Indenture, except as expressly set forth in the Original Indenture. The Trustee shall not be taken impliedly to waive by this Seventy- Fourth Supplemental Indenture any right it would otherwise have as provided in the Original Indenture, this Seventy-Fourth Supplemental Indenture shall hereafter form a part of the Indenture.
Section 6.02. This Seventy-Fourth Supplemental Indenture may be simultaneously executed in any number of counterparts, each of which shall be deemed an original; and all said counterparts executed and delivered, each as an original, shall constitute but one and the same instrument, which shall for all purposes be sufficiently evidenced by any such original counterpart.
IN WITNESS WHEREOF, said Western Massachusetts Electric Company has caused this instrument to be executed in its corporate name by its President or one of its Vice Presidents and by its Treasurer or an Assistant Treasurer, thereunto duly authorized, and its corporate seal to be hereto affixed and attested by its Clerk or an Assistant Clerk, and said The First National Bank of Boston has caused this instrument to be executed in its corporate name by one of its Authorized Officers, thereunto duly authorized, and its corporate seal to be hereto affixed, all as of the day and year first above written.
WESTERN MASSACHUSETTS ELECTRIC COMPANY
By /s/John B. Keane
Vice President
and by/s/Robert C. Aronson
Assistant Treasurer
Attest: (CORPORATE SEAL)
/s/ Mark A. Joyse
Assistant Clerk
Signed, sealed and delivered by Western Massachusetts Electric Company in
our presence:
/s/ Tracy DeCredico
/s/ Jeffery C. Miller
THE FIRST NATIONAL BANK OF BOSTON,
Trustee
By /s/Mark Nelson
Authorized Officer
(CORPORATE SEAL)
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Signed, sealed and delivered by
The First National Bank of Boston
in our presence:
/s/Traci Martin /s/Kecia Banks |
STATE OF CONNECTICUT
BERLIN
COUNTY OF HARTFORD
On this 9th day of March in the year 1994 before me personally came John B. Keane and Robert C. Aronson, to me personally known, who being by me duly sworn did depose and say that they are respectively Vice President and Assistant Treasurer of Western Massachusetts Electric Company, one of the corporations described in and which executed the foregoing instrument; that they know the seal of said corporation; that the seal affixed to said instrument opposite the execution was affixed thereto pursuant to the authority of its Board of Directors; that they signed their names thereto by like authority; and they acknowledged said instrument to be their free act and deed in their said respective capacities and the free act and deed of Western Massachusetts Electric Company.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal, at Berlin in said State, the day and year first above written.
/s/ Maureen Rothwell
Maureen J. Rothwell
Notary Public for the
State of Connecticut
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My commission expires: May 31, 1996
(NOTARIAL SEAL)
COMMONWEALTH OF MASSACHUSETTS
BOSTON
COUNTY OF SUFFOLK
On this 11th day of March in the year 1994 before me personally came Mark Nelson, to me personally known, who being by me duly sworn did depose and say that he is an authorized officer of The First National Bank of Boston, one of the corporations described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument opposite the execution was affixed thereto pursuant to the authority of its Board of Directors; that he signed his name thereto by like authority; and he acknowledged said instrument to be his free act and deed in his said capacity and the free act and deed of The First National Bank of Boston.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal, at Boston in said Commonwealth, the day and year first above written.
/s/ Shawn Patrick George
Notary Public for the
Commonwealth of
Massachusetts
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My commission expires: September 2, 1999
(NOTARIAL SEAL)
Schedule A
[FORM OF BOND]
No. $
WESTERN MASSACHUSETTS ELECTRIC COMPANY
First Mortgage Bond, Series X, 6-1/4%, due March 1, 1999
FOR VALUE RECEIVED, WESTERN MASSACHUSETTS ELECTRIC COMPANY, a corporation of the Commonwealth of Massachusetts (hereinafter called the Company), hereby promises to pay to , registered assigns, the principal sum of dollars, on the first day of March, 1999, and to pay interest on said sum semiannually on the first days of March and September in each year until the Company's obligation with respect to said principal sum shall be discharged at the rate per annum specified in the title of this Bond from the interest payment date next preceding the date hereof to which interest has been paid on the Bonds of this series, or if the date hereof is prior to August 16, 1994, then from the date of original issuance, or if the date hereof be an interest payment date to which interest is being paid or a date between the record date for any interest payment date to which interest is paid and such interest payment date, then from such interest payment date. Both principal and interest shall be payable at the principal corporate trust office in the City of Boston in the County of Suffolk in said Commonwealth of The First National Bank of Boston (hereinafter with its successors, generally called the Trustee), or at the principal corporate trust office of its successors, in such coin or currency of the United States of America as at the time of payment is legal tender for public and private debts.
Each installment of interest hereon (other than overdue interest) shall be payable to the person (as defined in the Original Indenture mentioned on the reverse hereof) who shall be the registered owner of this Bond at the close of business on the record date, which shall be the February 15 or August 15, as the case may be, next preceding such interest payment date, or, if such February 15 or August 15 shall be a legal holiday or a day on which banking institutions in the City of Boston, Massachusetts, are authorized by law to close, the next preceding day which shall not be a legal holiday or a day on which such institutions are so authorized to close.
Reference is hereby made to the further provisions of this Bond set forth on the reverse hereof, including without limitation provisions in regard to the registration of transfer and exchangeability of this Bond, and such further provisions shall for all purposes have the same effect as though fully set forth in this place.
This Bond shall take effect as a sealed instrument.
This Bond shall not become or be valid or obligatory until the certificate of authentication hereon shall have been signed by the Trustee.
IN WITNESS WHEREOF, WESTERN MASSACHUSETTS ELECTRIC COMPANY has caused this Bond to be executed in its name and on its behalf by its President or a Vice President and its Treasurer or an Assistant Treasurer thereunto duly authorized, and its corporate seal to be impressed or imprinted hereon.
Dated: WESTERN MASSACHUSETTS ELECTRIC COMPANY
By
By
CERTIFICATE OF AUTHENTICATION
This Bond is one of the First Mortgage Bonds, Series X, 6-1/4%, due March 1, 1999, described and provided for in the within mentioned Indenture.
THE FIRST NATIONAL BANK OF BOSTON,
TRUSTEE
By
Authorized Signatory
[FORM OF BOND]
[REVERSE]
This Bond is one of a series of Bonds in fully registered form known as the "First Mortgage Bonds, Series X, 6-1/4%, due March 1, 1999" of the Company, limited to forty million dollars ($40,000,000) in aggregate principal amount (except as provided by the terms of Section 2.13 of the Original Indenture mentioned below), and issued under and secured by a First Mortgage Indenture and Deed of Trust between the Company and Old Colony Trust Company (now The First National Bank of Boston, successor by merger) as Trustee, dated as of August 1, 1954 (herein as amended by a First Supplemental Indenture dated as of October 1, 1954, called the Original Indenture, the Original Indenture with all indentures supplemental thereto, including specifically the Seventy-Fourth Supplemental Indenture dated as of March 1, 1994, being herein generally called the Indenture) and said Seventy-Fourth Supplemental Indenture, an executed counterpart of each of which is on file at the principal corporate trust office of the Trustee, to which Indenture reference is hereby made for a description of the nature and extent of the security, the rights thereunder of the bearers or registered owners of Bonds issued and to be issued thereunder, the rights, duties, and immunities thereunder of the Trustee, the rights and obligations thereunder of the Company, and the terms and conditions upon which said Bonds, and other and further Bonds of other series, are issued and are to be issued; but neither the foregoing reference to the Indenture nor any provision of this Bond or of the Indenture shall affect or impair the obligation of the Company, which is absolute, unconditional and unalterable, to pay at the maturities herein provided the principal of and interest on this Bond as herein provided.
The Bonds of this series are issuable in fully registered form in denominations of one thousand dollars ($1,000) and any multiple thereof.
This Bond is transferable by the registered owner hereof upon surrender hereof at the principal corporate trust office of the Trustee or at the office or agency of the Company in the Borough of Manhattan, the City of New York, New York, together with a written instrument of transfer in approved form signed by the registered owner or by his duly authorized attorney, and a new Bond or Bonds of this series for a like principal amount will be issued in exchange, all as provided in the Indenture. Prior to due presentment for registration of transfer of this Bond the Company and the Trustee may deem and treat the registered owner hereof as the absolute owner hereof, whether or not this Bond be overdue, for the purpose of receiving payment and for all other purposes, and neither the Company nor the Trustee shall be affected by any notice to the contrary.
This Bond is exchangeable at the option of the registered owner hereof at the principal corporate trust office of the Trustee or at the office or agency of the Company in the Borough of Manhattan, the City of New York, New York, for an equal principal amount of fully registered bonds of this series of other authorized denominations, in the manner and on the terms provided in the Indenture.
Bonds of this series are to be issued initially under a book-entry only system and, except as hereinafter provided, registered in the name of The Depository Trust Company, New York, New York ("DTC") or its nominee, which shall be considered to be the holder of all bonds of this series for all purposes of the Mortgage, including, without limitation, payment by the Company of principal of and interest on such bonds of this series and receipt of notices and exercise of rights of holders of such bonds of this series. There shall be a single bond of this series which shall be immobilized in the custody of DTC with the owners of book-entry interests in bonds of this series ("Book-Entry Interests") having no right to receive bonds of this series in the form of physical securities or certificates. Ownership of Book-Entry Interests shall be shown by book-entry on the system maintained and operated by DTC, its participants (the "Participants") and certain persons acting through the Participants. Transfer of ownership of Book-Entry Interests are to be made only by DTC and the Participants by that book-entry system, the Company and the Trustee having no responsibility therefor so long as bonds of this series are registered in the name of DTC or its nominee. DTC is to maintain records of positions of Participants in bonds of this series, and the Participants and persons acting through Participants are to maintain records of the purchasers and owners of Book-Entry Interests. If DTC or its nominee determines not to continue to act as a depository for the bonds of this series in connection with a book-entry only system, another depository, if available, may act instead and the single bond of this series will be transferred into the name of such other depository or its nominee, in which case the above provisions will continue to apply but to the new depository. If the book- entry only system for bonds of this series is discontinued for any reason upon surrender and cancellation of the single bond of this series registered in the name of the then depository or its nominee, new registered bonds of this series will be issued in authorized denominations to the holder of Book-Entry Interests shown on the book-entry system immediately prior to the discontinuance thereof. Neither the Trustee nor the Company shall be responsible for the accuracy of the interests shown on that system.
The Bonds of this series are not subject to redemption as a whole or in part at any time.
The Indenture contains provisions permitting the Company and the Trustee with the consent of the bearers or registered owners of not less than seventy percentum (70%) in principal amount of the Bonds at the time outstanding (except Bonds held by or for the benefit of the Company), including, if more than one series of Bonds shall be at the time outstanding, not less than seventy percentum (70%) in principal amount of the Bonds (except Bonds held by or for the benefit of the Company) of each series affected differently from those of other series, to effect by supplemental indenture modifications or alterations of the Indenture and of the rights and obligations of the Company and of the bearers and registered owners of the Bonds; but no such modification or alteration shall be made which, without the written approval or consent of the registered owner hereof, will extend the maturity hereof or reduce the rate or extend the time for payment of interest hereon or change the amount of the principal hereof or of any premium payable on the redemption hereof, or which will reduce the percentage of the principal amount of Bonds or the percentage of the principal amount of Bonds of any one series required for the adoption of the modifications or alterations as aforesaid, or authorize the creation by the Company, except as expressly authorized by the Indenture, of any mortgage, pledge, or lien upon the property subjected thereto ranking prior to or on an equality with the lien thereof.
If a default as defined in the Indenture shall occur, the principal of this Bond may become or be declared due and payable before maturity, in the manner and with the effect provided in the Indenture; but any default and the consequences thereof may be waived by certain percentages of the bearers or registered owners of Bonds, all as provided in the Indenture.
No recourse shall be had for the payment of the principal of or the interest on this Bond or for any claim based hereon or otherwise in respect hereof or of the Indenture against any incorporator, stockholder, director, or officer, past, present, or future, as such, of the Company or of any predecessor or successor corporation under any constitution, statute, or rule of law, or by the enforcement of any assessment, penalty, or otherwise, all such liability being waived and released by the holder hereof by the acceptance of this Bond.
Schedule B
NONE
Schedule C
Detail of Filing and Recording of First Mortgage Indenture and Deed of Trust dated as of August 1, 1954 in Massachusetts.
Date
Recorded Doc. No. Book Page
Registry of Deeds
County of Berkshire
Middle District 8/18/54 22357 614 395
Northern District 8/18/54 2684 512 97
Southern District 8/18/54 None 310 379
Assigned
County of Franklin 8/18/54 3501 1007 2
County of Hampshire 8/18/54 5070 1175 388
County of Hampden 8/15/54 20682 2331 1
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Registry District of Land Court
County of Berkshire
Middle District 10/4/54 8407-A
Northern District 11/5/68 3115
County of Hampshire 8/18/54 822
County of Hampden 8/19/54 18800
Office of Town Clerk,
West Springfield* 3/22/67 6917 None Assigned
*Confirmatory Indenture of
Mortgage filed 8/18/54 None 54 121
Assigned
Secretary of the Commonwealth 442315
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Exhibit 4.4.12
SEVENTY-FIFTH SUPPLEMENTAL INDENTURE dated as of the first day of March, 1994, made and entered into by and between WESTERN MASSACHUSETTS ELECTRIC COMPANY, a corporation organized under the laws of the Commonwealth of Massachusetts, with its principal place of business at 174 Brush Hill Avenue, West Springfield, Massachusetts 01089 (hereinafter generally called the Company), and THE FIRST NATIONAL BANK OF BOSTON, a national banking association organized under the laws of the United States of America, as successor by merger to Old Colony Trust Company, as Trustee under the Mortgage Indenture described below, with its principal office at 100 Federal Street, Boston, Massachusetts 02110 (said The First National Bank of Boston or, as applied to action antedating the effective date of said merger, said Old Colony Trust Company, being hereinafter generally called the Trustee).
WITNESSETH that:
WHEREAS the Company has heretofore executed and delivered to the Trustee its First Mortgage Indenture and Deed of Trust(FN1) dated as of August 1, 1954 (hereinafter as amended by a First Supplemental Indenture dated as of October 1, 1954, called the Original Indenture, the Original Indenture with all indentures supplemental thereto being hereinafter generally called the Indenture), conveying certain property therein described in trust as security for the Bonds of the Company to be issued thereunder as therein provided and for other purposes more particularly specified therein, and the Trustee has accepted said Trust; and
WHEREAS there are outstanding $348,219,000 aggregate principal amount of Bonds which have been issued at various times and in various amounts and with various dates of maturity and rates of interest and have been denominated Series F, Series G, Series H, Series J, Series R, Series T, Series U, Series V, Series W and Series X; and
WHEREAS the Company has authorized the issue pursuant to Section 3.08 of the Original Indenture of an additional series of its fully registered First Mortgage Bonds without coupons, to be issued under the Indenture, to be designated "First Mortgage Bonds, Series Y, 7-3/4%, due March 1, 2024" (hereinafter called the Series Y Bonds) and to be limited (except as provided in Section 2.13 of the Original Indenture) in aggregate principal amount to $50,000,000 being the entire issue of the Series Y Bonds; and
WHEREAS the Company, pursuant to resolutions duly and legally adopted by its Board of Directors at a meeting duly called and held for the purpose, has duly authorized the execution and delivery of this Seventy-Fifth Supplemental Indenture and the issue of the Series Y Bonds in the aggregate principal amount of $50,000,000; and
WHEREAS the issue of the Series Y Bonds in said aggregate principal amount of $50,000,000 and the execution and delivery of this Seventy-Fifth Supplemental Indenture have been duly approved to the extent required by law by the Department of Public Utilities of said Commonwealth and by the Department of Public Utility Control of the State of Connecticut; and
(FN1) For details as to the filing and recording of this instrument in Massachusetts, see Schedule C.
WHEREAS all requirements of law and of the certificate of incorporation, as amended, and of the by-laws of the Company, including all requisite action on the part of directors and officers, and all things necessary to make the Series Y Bonds, when duly executed by the Company and delivered, the valid, binding, and legal obligations of the Company, and the covenants and stipulations herein contained valid and binding obligations of the Company, have been done and performed, and the execution and delivery hereof have been in all respects duly authorized; and
NOW, THEREFORE, THIS SEVENTY-FIFTH SUPPLEMENTAL INDENTURE WITNESSETH:
In consideration of the premises and of the mutual covenants herein
contained and of the purchase and acceptance by the registered owners
thereof of the Series Y Bonds at any time issued hereunder, and of one
dollar ($1) duly paid to the Company by the Trustee and for other good and
valuable considerations, the receipt whereof at or before the ensealing and
delivery of these presents is hereby acknowledged, and in confirmation of
and supplementing the Indenture, and in the performance and observance of
the provisions thereof, and in order to establish the form and
characteristics of the Series Y Bonds, and to secure the payment of the
principal of and premium, if any, and interest on all Bonds from time to
time outstanding under the Indenture according to their tenor and effect,
and to secure the performance and observance of all the covenants and
conditions contained therein and in this Seventy-Fifth Supplemental
Indenture, the Company has executed and delivered this Seventy-Fifth
Supplemental Indenture, and does hereby confirm the conveyance, transfer,
assignment, and mortgage of the franchises and properties as set forth in
the Original Indenture and in all supplemental indentures prior hereto,
excepting only such as have been released in accordance with Article VII of
the Indenture and has granted, bargained, sold, conveyed, assigned,
transferred, mortgaged, and confirmed, and by these presents does grant,
bargain, sell, convey, assign, transfer, mortgage, and confirm unto The
First National Bank of Boston, as Trustee, as provided in the Indenture,
its successors in the trusts thereof and hereof, and its and their assigns,
all and singular the franchises and properties of the Company of the
character described and defined in the Original Indenture as Mortgaged
Property (including all and singular such franchises and properties which
may hereafter be acquired by the Company) acquired after the execution of
the Original Indenture including all real property conveyed to the Company
prior to the date hereof, including, but not limited to, the property set
forth in Schedule B appended hereto, subject, however, to Permitted
Encumbrances and to any mortgages or other liens or encumbrances thereon of
the character described in Section 4.10 of the Indenture existing at the
time of the acquisition of such franchises and properties by the Company or
created contemporaneously to secure or to raise a part of the purchase
price thereof and to any renewals or extensions of such Permitted
Encumbrances, mortgages or other liens or encumbrances.
There is furthermore expressly excepted and excluded from the lien and operation of this Seventy-Fifth Supplemental Indenture, and from the definition of Mortgaged Property, all the property of the Company described in clauses A to J, both inclusive, of the granting clauses of the Original Indenture, whether owned at the time of the execution of this Seventy-Fifth Supplemental Indenture or thereafter acquired by it.
TO HAVE AND TO HOLD all and singular the above described franchises and properties unto the said The First National Bank of Boston, as Trustee under the Indenture, its successors in the trusts thereof and hereof, and its and their assigns, to its and their own use forever.
BUT IN TRUST, NEVERTHELESS, upon the terms and trusts set forth in the Indenture for the equal pro rata benefit, security, and protection of the bearers or registered owners of the Bonds from time to time certified, issued, and outstanding under the Indenture, without any discrimination, preference, priority, or distinction of any Bond or coupon over any other Bond or coupon by reason of series, priority in the time of issue, sale, or negotiation thereof, or otherwise howsoever, except as otherwise provided in the Indenture;
PROVIDED, HOWEVER, and these presents are upon the condition that if the Company, its successors or assigns, shall pay or cause to be paid the principal of and the premium, if any, and interest on the Bonds Outstanding under the Indenture at the times and in the manner stipulated therein and in the Indenture and shall keep, perform, and observe all and singular the covenants and promises in said Bonds and in the Indenture expressed to be kept, performed, and observed by or on the part of the Company, then this Seventy-Fifth Supplemental Indenture and the estate and rights hereby granted shall, pursuant to the provisions of Article XV of the Original Indenture, cease, determine and be void, but only if the Indenture shall have ceased, determined and become void, as therein provided, otherwise to be and remain in full force and effect.
ARTICLE I.
DESCRIPTION AND ISSUE OF SERIES Y BONDS.
Section 1.01. Series Y Bonds and the certificate of authentication of the Trustee upon said Bonds shall be substantially in the forms thereof respectively set forth in Schedule A appended hereto, with such changes therein as shall be approved by the Company and the Trustee. Series Y Bonds shall be designated as the First Mortgage Bonds, Series Y, 7-3/4%, due March 1, 2024 of the Company, shall be issuable in the aggregate principal amount of fifty million dollars ($50,000,000) and no more except as provided in Section 2.13 of the Original Indenture, shall be dated as provided in Section 1.02 of this Seventy- Fifth Supplemental Indenture, shall mature March 1, 2024, shall bear interest at the rate specified in their title, as provided in said Section 1.02 until the Company's obligation in respect of the principal thereof shall be discharged, payable semiannually on the first days of March and September in each year as provided in said Section 1.02 (the principal, premium, if any, and interest thereon being payable at the principal corporate trust office of the Trustee in the City of Boston, Massachusetts, or at the principal corporate trust office of its successors, in such coin or currency of the United States of America as at the time of payment is legal tender for public and private debts), shall be issued in fully registered form in denominations of one thousand dollars ($1,000) and any multiple thereof, shall be transferable as provided in Section 2.08 of said Original Indenture at the principal corporate trust office of the Trustee or at the office or agency of the Company in the Borough of Manhattan, the City of New York, New York, and shall be redeemable at the times and in the manner provided in Article V of the Original Indenture and as hereinafter provided in Article III of this Seventy-Fifth Supplemental Indenture. Notwithstanding the provisions of Section 2.11 of the Original Indenture, no charge, except for taxes or governmental charges, shall be made by the Company upon any registration of transfer or exchange of Series Y Bonds.
Series Y Bonds in fully registered form may be exchanged at the principal corporate trust office of the Trustee or at the office or agency of the Company in the Borough of Manhattan, the City of New York, New York, for a like aggregate principal amount of Series Y Bonds in fully registered form of other authorized denominations and, upon surrender for exchange of one or more of such Series Y Bonds, the Company shall execute and the Trustee shall certify and there shall be delivered in exchange therefor a like aggregate principal amount of such Series Y Bonds of other authorized denominations. Bonds so surrendered for exchange shall be considered as having been surrendered for Cancellation and shall be forthwith cancelled by the Trustee.
Pursuant to the provisions of Section 2.07 of the Original Indenture, the Company appoints BancBoston Trust Company of New York and its successors as the agency of the Company in the Borough of Manhattan, the City of New York, New York, for the registration of transfer and exchange of Series Y Bonds.
Section 1.02. Notwithstanding the provisions of Section 2.12 of the Original Indenture, the person in whose name any Series Y Bond is registered at the close of business on any record date (as herein below defined) with respect to any interest payment date shall be entitled to receive the interest payable on such interest payment date notwithstanding the cancellation of such Bond upon any registration of transfer or exchange thereof subsequent to the record date and prior to such interest payment date, except if and to the extent the Company shall default in the payment of the interest due on such interest payment date, then such defaulted interest shall be paid to the person in whose name such Bond is registered on a subsequent record date for the payment of such defaulted interest if one shall have been established as hereinafter provided and otherwise on the date of payment of such defaulted interest. A subsequent record date may be established by the Company by notice mailed to the owners of Series Y Bonds not less than ten days preceding such record date, which record date shall be not more than thirty days prior to the subsequent interest payment date. The term "record date" as used in this Section with respect to any regular interest payment date shall mean the February 15 or August 15, as the case may be, next preceding such interest payment date, or, if such February 15 or August 15 shall be a legal holiday or a day on which banking institutions in the City of Boston, Massachusetts, are authorized by law to close, the next preceding day which shall not be a legal holiday or a day on which such institutions are so authorized to close.
Notwithstanding the provisions of Sections 2.01 and 2.12 of the Original Indenture, each Series Y Bond shall be dated the date of the certification thereof by the Trustee, and shall bear interest on the principal amount thereof payable semiannually on the first days of March and September in each year, until the Company's obligation with respect to the principal shall be discharged, at the rate per annum specified in the title from the interest payment date next preceding the date thereof to which interest has been paid on the Bonds of said series, or if the date thereof is prior to August 16, 1994, then from the date of original issuance, or if the date thereof be an interest payment date to which interest is being paid or a date between the record date for any interest payment date to which interest is paid and such interest payment date, then from such interest payment date.
ARTICLE II.
DIVIDEND COVENANT.
Section 2.01. This Seventy-Fifth Supplemental Indenture imposes no additional restrictions on the Company's right to declare or pay any dividends or make any other distributions on or in respect of its common stock or to purchase or otherwise acquire for a consideration any shares of its common stock beyond those created by prior supplemental indentures and
those in the Company's preferred stock provisions, by-laws and those otherwise required by law.
ARTICLE III.
REDEMPTION OF SERIES Y BONDS.
Section 3.01. The Series Y Bonds shall not be redeemable as a whole or in part before March 1, 1999. Thereafter, subject to the provisions of Section 5.06 of the Original Indenture, the Series Y Bonds shall be redeemable as a whole at any time, or, in part, from time to time, either at the option of the Company or for the purposes of other applicable provisions of the Indenture (i) if from moneys received by the Trustee pursuant to Section 4.05, Section 7.03, Section 7.04, Section 7.05, or Section 7.07 of the Original Indenture or Section 4.18 of the Indenture to be applied by the Trustee as provided in Section 8.03(a) or in Section 8.05 of the Original Indenture, at the applicable percentages of the called principal amount thereof specified under the column headed Special Redemption Price in the form of Series Y Bond set forth in Schedule A appended hereto, and (ii) if at the option of the Company pursuant to any provisions of the Indenture, other than those in respect of the aforesaid moneys applied pursuant to Section 8.03(a) or Section 8.05 of the Original Indenture, at the applicable percentages of the called principal amount thereof specified under the column headed Optional Redemption Price in the form of Series Y Bond set forth in Schedule A appended hereto, together in each case with accrued and unpaid interest to the date fixed for redemption.
Section 3.02 Notice of redemption of the Series Y Bonds either as a whole
or in part shall be mailed by the Trustee by first class mail, postage
prepaid, to the registered owner or owners of each Series Y Bond called for
redemption either in whole or in part not less than thirty (30) or more
than sixty (60) days prior to the date set for redemption at their last
addresses as they shall appear upon the books for registration kept by the
Registrar. Any notice given in the foregoing manner shall be conclusively
deemed to have been duly given whether or not received by the owner or
owners. Failure to give such notice by mail to the owner or owners of any
Series Y Bond designated for redemption in whole or in part, or any defect
therein, shall not affect the validity of any proceedings for the
redemption of any other Series Y Bond. Except as aforesaid and except that
(a) Published Notice need not be given, (b) in the event a Series Y Bond
shall be called for redemption in its entirety the notice herein provided
need not contain the number of the Bond so called, and (c) any such notice
may be made subject to the deposit of redemption moneys with the Trustee
before the date fixed for redemption, the applicable provisions of Article
V of the Original Indenture shall control and be followed in all matters
connected with the redemption and payment of Series Y Bonds.
ARTICLE IV.
THE TRUSTEE.
Section 4.01. The Trustee shall be entitled to, may exercise, and shall be protected by, where and to the full extent that the same are applicable, all the rights, powers, privileges, immunities and exemptions provided in the Indenture, as if the provisions concerning the same were incorporated herein at length. The remedies and provisions of the Indenture applicable in case of any default by the Company thereunder are hereby adopted and made applicable in case of any default with respect to the properties included herein and, without limitation of the generality of the foregoing, there are hereby conferred upon the Trustee the same powers of sale and other powers over the properties described herein as are expressed to be conferred by the Indenture.
ARTICLE V.
DEFEASANCE.
Section 5.01. This Seventy-Fifth Supplemental Indenture shall become void when the Indenture shall be void.
ARTICLE VI.
MISCELLANEOUS PROVISIONS.
Section 6.01. The recitals in this Seventy-Fifth Supplemental Indenture shall be taken as recitals by the Company alone, and shall not be considered as made by or as imposing any obligation or liability upon the Trustee, nor shall the Trustee be held responsible for the legality or validity of this Seventy-Fifth Supplemental Indenture, and the Trustee makes no covenants or representations, and shall not be responsible, as to or for the effect, authorization, execution, delivery, or recording of this Seventy-Fifth Supplemental Indenture, except as expressly set forth in the Original Indenture. The Trustee shall not be taken impliedly to waive by this Seventy-Fifth Supplemental Indenture any right it would otherwise have as provided in the Original Indenture, this Seventy-Fifth Supplemental Indenture shall hereafter form a part of the Indenture.
Section 6.02. This Seventy-Fifth Supplemental Indenture may be simultaneously executed in any number of counterparts, each of which shall be deemed an original; and all said counterparts executed and delivered, each as an original, shall constitute but one and the same instrument, which shall for all purposes be sufficiently evidenced by any such original counterpart.
IN WITNESS WHEREOF, said Western Massachusetts Electric Company has caused this instrument to be executed in its corporate name by its President or one of its Vice Presidents and by its Treasurer or an Assistant Treasurer, thereunto duly authorized, and its corporate seal to be hereto affixed and attested by its Clerk or an Assistant Clerk, and said The First National Bank of Boston has caused this instrument to be executed in its corporate name by one of its Authorized Officers, thereunto duly authorized, and its corporate seal to be hereto affixed, all as of the day and year first above written.
WESTERN MASSACHUSETTS ELECTRIC COMPANY
By /s/John B. Keane
Vice President
and by /s/ Robert C. Aronson
Assistant Treasurer
Attest: (CORPORATE SEAL)
/s/ Mark A. Joyse
Assistant Clerk
Signed, sealed and delivered by
Western Massachusetts Electric
Company in our presence:
/s/Tracy A. DeCredico
/s/Jeffrey C. Miller
THE FIRST NATIONAL BANK OF BOSTON,
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Trustee
By /s/Mark Nelson
Authorized Officer
(CORPORATE SEAL)
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Signed, sealed and delivered
by The First National Bank of Boston
in our presence:
/s/Traci Martin
/s/Kecia Banks
STATE OF CONNECTICUT
BERLIN
COUNTY OF HARTFORD
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On this 9th day of March in the year 1994 before me personally came John B. Keane and Robert C. Aronson, to me personally known, who being by me duly sworn did depose and say that they are respectively Vice President and Assistant Treasurer of Western Massachusetts Electric Company, one of the corporations described in and which executed the foregoing instrument; that they know the seal of said corporation; that the seal affixed to said instrument opposite the execution was affixed thereto pursuant to the authority of its Board of Directors; that they signed their names thereto by like authority; and they acknowledged said instrument to be their free act and deed in their said respective capacities and the free act and deed of Western Massachusetts Electric Company.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal, at Berlin in said State, the day and year first above written.
/s/ Maureen J. Rothwell
Maureen J. Rothwell
Notary Public for the
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State of Connecticut
My commission expires: May 31, 1996
(NOTARIAL SEAL)
COMMONWEALTH OF MASSACHUSETTS
BOSTON
COUNTY OF SUFFOLK
On this 11th day of March in the year 1994 before me personally came Mark Nelson, to me personally known, who being by me duly sworn did depose and say that he is an authorized officer of The First National Bank of Boston, one of the corporations described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument opposite the execution was affixed thereto pursuant to the authority of its Board of Directors; that he signed his name thereto by like authority; and he acknowledged said instrument to be his free act and deed in his said capacity and the free act and deed of The First National Bank of Boston.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal, at Boston in said Commonwealth, the day and year first above written.
/s/Shawn Patrick George Notary Public for the |
Commonwealth of
Massachusetts
My commission expires: September 2, 1999
(NOTARIAL SEAL)
Schedule A
[FORM OF BOND]
No. $
WESTERN MASSACHUSETTS ELECTRIC COMPANY
First Mortgage Bond, Series Y, 7-3/4%, due March 1, 2024
FOR VALUE RECEIVED, WESTERN MASSACHUSETTS ELECTRIC COMPANY, a corporation of the Commonwealth of Massachusetts (hereinafter called the Company), hereby promises to pay to , or registered assigns, the principal sum of dollars, on the first day of March, 2024, and to pay interest on said sum semiannually on the first days of March and September in each year until the Company's obligation with respect to said principal sum shall be discharged at the rate per annum specified in the title of this Bond from the interest payment date next preceding the date hereof to which interest has been paid on the Bonds of this series, or if the date hereof is prior to August 16, 1994, then from the date of original issuance, or if the date hereof be an interest payment date to which interest is being paid or a date between the record date for any interest payment date to which interest is paid and such interest payment date, then from such interest payment date. Both principal and interest shall be payable at the principal corporate trust office in the City of Boston in the County of Suffolk in said Commonwealth of The First National Bank of Boston (hereinafter with its successors, generally called the Trustee), or at the principal corporate trust office of its successors, in such coin or currency of the United States of America as at the time of payment is legal tender for public and private debts.
Each installment of interest hereon (other than overdue interest) shall be payable to the person (as defined in the Original Indenture mentioned on the reverse hereof) who shall be the registered owner of this Bond at the close of business on the record date, which shall be the February 15 or August 15, as the case may be, next preceding such interest payment date, or, if such February 15 or August 15 shall be a legal holiday or a day on which banking institutions in the City of Boston, Massachusetts, are authorized by law to close, the next preceding day which shall not be a legal holiday or a day on which such institutions are so authorized to close.
Reference is hereby made to the further provisions of this Bond set forth on the reverse hereof, including without limitation provisions in regard to the registration of transfer and exchangeability of this Bond, and such further provisions shall for all purposes have the same effect as though fully set forth in this place.
This Bond shall take effect as a sealed instrument.
This Bond shall not become or be valid or obligatory until the certificate of authentication hereon shall have been signed by the Trustee.
IN WITNESS WHEREOF, WESTERN MASSACHUSETTS ELECTRIC COMPANY has caused this Bond to be executed in its name and on its behalf by its President or a Vice President and its Treasurer or an Assistant Treasurer thereunto duly authorized, and its corporate seal to be impressed or imprinted hereon.
Dated: WESTERN MASSACHUSETTS ELECTRIC
COMPANY
By
By
CERTIFICATE OF AUTHENTICATION
This Bond is one of the First Mortgage Bonds, Series Y, 7-3/4%, due March 1, 2024, described and provided for in the within mentioned Indenture.
THE FIRST NATIONAL BANK OF BOSTON,
TRUSTEE
By
Authorized Signatory
[FORM OF BOND]
[REVERSE]
This Bond is one of a series of Bonds in fully registered form known as the "First Mortgage Bonds, Series Y, 7-3/4%, due March 1, 2024" of the Company, limited to fifty million dollars ($50,000,000) in aggregate principal amount (except as provided by the terms of Section 2.13 of the Original Indenture mentioned below), and issued under and secured by a First Mortgage Indenture and Deed of Trust between the Company and Old Colony Trust Company (now The First National Bank of Boston, successor by merger) as Trustee, dated as of August 1, 1954 (herein as amended by a First Supplemental Indenture dated as of October 1, 1954, called the Original Indenture, the Original Indenture with all indentures supplemental thereto, including specifically the Seventy-Fifth Supplemental Indenture dated as of March 1, 1994, being herein generally called the Indenture) and said Seventy-Fifth Supplemental Indenture, an executed counterpart of each of which is on file at the principal corporate trust office of the Trustee, to which Indenture reference is hereby made for a description of the nature and extent of the security, the rights thereunder of the bearers or registered owners of Bonds issued and to be issued thereunder, the rights, duties, and immunities thereunder of the Trustee, the rights and obligations thereunder of the Company, and the terms and conditions upon which said Bonds, and other and further Bonds of other series, are issued and are to be issued; but neither the foregoing reference to the Indenture nor any provision of this Bond or of the Indenture shall affect or impair the obligation of the Company, which is absolute, unconditional and unalterable, to pay at the maturities herein provided the principal of and interest on this Bond as herein provided.
The Bonds of this series are issuable in fully registered form in denominations of one thousand dollars ($1,000) and any multiple thereof.
This Bond is transferable by the registered owner hereof upon surrender hereof at the principal corporate trust office of the Trustee or at the office or agency of the Company in the Borough of Manhattan, the City of New York, New York, together with a written instrument of transfer in approved form signed by the registered owner or by his duly authorized attorney, and a new Bond or Bonds of this series for a like principal amount will be issued in exchange, all as provided in the Indenture. Prior to due presentment for registration of transfer of this Bond the Company and the Trustee may deem and treat the registered owner hereof as the absolute owner hereof, whether or not this Bond be overdue, for the purpose of receiving payment and for all other purposes, and neither the Company nor the Trustee shall be affected by any notice to the contrary.
This Bond is exchangeable at the option of the registered owner hereof at the principal corporate trust office of the Trustee or at the office or agency of the Company in the Borough of Manhattan, the City of New York, New York, for an equal principal amount of fully registered bonds of this series of other authorized denominations, in the manner and on the terms provided in the Indenture.
Bonds of this series are to be issued initially under a book-entry only system and, except as hereinafter provided, registered in the name of The Depository Trust Company, New York, New York ("DTC") or its nominee, which shall be considered to be the holder of all bonds of this series for all purposes of the Mortgage, including, without limitation, payment by the Company of principal of and interest on such bonds of this series and receipt of notices and exercise of rights of holders of such bonds of this series. There shall be a single bond of this series which shall be immobilized in the custody of DTC with the owners of book-entry interests in bonds of this series ("Book-Entry Interests") having no right to receive bonds of this series in the form of physical securities or certificates. Ownership of Book-Entry Interests shall be shown by book-entry on the system maintained and operated by DTC, its participants (the "Participants") and certain persons acting through the Participants. Transfer of ownership of Book-Entry Interests are to be made only by DTC and the Participants by that book-entry system, the Company and the Trustee having no responsibility therefor so long as bonds of this series are registered in the name of DTC or its nominee. DTC is to maintain records of positions of Participants in bonds of this series, and the Participants and persons acting through Participants are to maintain records of the purchasers and owners of Book-Entry Interests. If DTC or its nominee determines not to continue to act as a depository for the bonds of this series in connection with a book-entry only system, another depository, if available, may act instead and the single bond of this series will be transferred into the name of such other depository or its nominee, in which case the above provisions will continue to apply but to the new depository.
If the book- entry only system for bonds of this series is discontinued for any reason upon surrender and cancellation of the single bond of this series registered in the name of the then depository or its nominee, new registered bonds of this series will be issued in authorized denominations to the holder of Book-Entry Interests shown on the book-entry system immediately prior to the discontinuance thereof. Neither the Trustee nor the Company shall be responsible for the accuracy of the interests shown on that system.
The Bonds of this series are not subject to redemption as a whole or
in part prior to March 1, 1999. Thereafter, subject to the provisions of
Section 5.06 of the Original Indenture, the Bonds of this series are subject
to redemption prior to maturity upon not less than thirty (30) days' prior
notice, as a whole at any time, or in part from time to time, either at the
option of the Company, or for the purposes of any applicable provision of
the Indenture, in the manner and with the effect provided in the Indenture,
(i) if from moneys received by the Trustee pursuant to Section 4.05, Section
7.03, Section 7.04, Section 7.05 or Section 7.07 of the Original Indenture or
Section 4.18 of the Indenture to be applied by the Trustee as provided in
Section 8.03(a) or in Section 8.05 of the Original Indenture, at the
applicable percentages of the called principal amount thereof specified under
the column headed Special Redemption Price, below, and (ii) if at the option
of the Company or pursuant to any provisions of the Indenture other than
those in respect of the aforesaid moneys applied pursuant to Section 8.03(a) or
Section 8.05 of the Original Indenture, at the applicable percentages of the
called principal amount thereof specified under the column headed Optional
Redemption Price, below, together in each case with accrued and unpaid
interest to the date fixed for redemption:
Optional Special
If Redeemed During Redemption Redemption
the 12 Months' Period Price Price
Starting March 1 % %
1999 104.65 100.00
2000 104.34 100.00
2001 104.03 100.00
2002 103.72 100.00
2003 103.41 100.00
2004 103.10 100.00
2005 102.79 100.00
2006 102.48 100.00
2007 102.17 100.00
2008 101.86 100.00
2009 101.55 100.00
2010 101.24 100.00
2011 100.93 100.00
2012 100.62 100.00
2013 100.31 100.00
2014 100.00 100.00
2015 100.00 100.00
2016 100.00 100.00
2017 100.00 100.00
2018 100.00 100.00
2019 100.00 100.00
2020 100.00 100.00
2021 100.00 100.00
2022 100.00 100.00
2023 100.00 100.00
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Notice of redemption as aforesaid (which notice may be made subject to the deposit of redemption moneys with the Trustee before the date fixed for redemption) shall be mailed by the Trustee not less than thirty (30) days nor more than sixty (60) days prior to the date set for redemption, by first class mail, postage prepaid, to the registered owner or owners of each Bond of this series called for redemption, at their last addresses as they shall appear upon the books for registration kept by the Registrar.
If this Bond, or a part hereof, shall be duly called for redemption, or provision for such call shall have been made, as provided in the Indenture, and payment of the redemption price shall have been duly provided for by the Company, interest shall cease to accrue hereon, or on such called part, from and after the redemption date, the Company shall from the time provided in the Indenture be under no further liability in respect of the principal of, or premium, if any, or interest on, this Bond, or such called part, and the registered owner hereof shall from and after such time look for payment hereof, or of such called part, solely to the money so provided.
The Indenture contains provisions permitting the Company and the Trustee with the consent of the bearers or registered owners of not less than seventy percentum (70%) in principal amount of the Bonds at the time outstanding (except Bonds held by or for the benefit of the Company), including, if more than one series of Bonds shall be at the time outstanding, not less than seventy percentum (70%) in principal amount of the Bonds (except Bonds held by or for the benefit of the Company) of each series affected differently from those of other series, to effect by supplemental indenture modifications or alterations of the Indenture and of the rights and obligations of the Company and of the bearers and registered owners of the Bonds; but no such modification or alteration shall be made which, without the written approval or consent of the registered owner hereof, will extend the maturity hereof or reduce the rate or extend the time for payment of interest hereon or change the amount of the principal hereof or of any premium payable on the redemption hereof, or which will reduce the percentage of the principal amount of Bonds or the percentage of the principal amount of Bonds of any one series required for the adoption of the modifications or alterations as aforesaid, or authorize the creation by the Company, except as expressly authorized by the Indenture, of any mortgage, pledge, or lien upon the property subjected thereto ranking prior to or on an equality with the lien thereof.
If a default as defined in the Indenture shall occur, the principal of this Bond may become or be declared due and payable before maturity, in the manner and with the effect provided in the Indenture; but any default and the consequences thereof may be waived by certain percentages of the bearers or registered owners of Bonds, all as provided in the Indenture.
No recourse shall be had for the payment of the principal of or the interest on this Bond or for any claim based hereon or otherwise in respect hereof or of the Indenture against any incorporator, stockholder, director, or officer, past, present, or future, as such, of the Company or of any predecessor or successor corporation under any constitution, statute, or rule of law, or by the enforcement of any assessment, penalty, or otherwise, all such liability being waived and released by the holder hereof by the acceptance of this Bond.
Schedule B
NONE
Schedule C
Detail of Filing and Recording of First Mortgage Indenture and Deed of Trust dated as of August 1, 1954 in Massachusetts.
Date
Recorded Doc. No. Book
Page
Registry of Deeds
County of Berkshire
Middle District 8/18/54 22357 614 395
Northern District 8/18/54 2684 512 97
Southern District 8/18/54 None 310 379
Assigned
County of Franklin 8/18/54 3501 1007 2
County of Hampshire 8/18/54 5070 1175 388
County of Hampden 8/15/54 20682 2331 1
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Registry District of Land Court
County of Berkshire Middle District 10/4/54 8407-A Northern District 11/5/68 3115 County of Hampshire 8/18/54 822 County of Hampden 8/19/54 18800 Office of Town Clerk, West Springfield* 3/22/67 6917 None Assigned |
*Confirmatory Indenture of
Mortgage filed 8/18/54 None 54 121
Assigned
Secretary of the Commonwealth 442315
Exhibit 4.4.13
Connecticut Development Authority
and
Western Massachusetts Electric Company
LOAN AGREEMENT
Dated as of September 1, 1993
Connecticut Development Authority
$53,800,000 Pollution Control Revenue Refunding Bonds
(Western Massachusetts Electric Company Project - 1993A Series)
[6] TABLE OF CONTENTS
Page
PREAMBLE .............................................. 1
ARTICLE I DEFINITIONS AND INTERPRETATION
Section 1.1. Definitions.......................... 5
Section 1.2. Interpretation....................... [7] 12
ARTICLE II REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations by the Authority..... [8] 14
Section 2.2. Limitation of Control by Borrower.... 15
Section 2.3. Representations by the Borrower...... 16
ARTICLE III THE LOAN
Section 3.1. Loan Clauses......................... 19
Section 3.2. Other Amounts Payable................ 20
Section 3.3. Manner of Payment.................... 21
Section 3.4. Obligation Unconditional............. 21
Section 3.5. Security Clauses..................... 21
Section 3.6. Issuance of Bonds.................... 21
Section 3.7. Use of Priority Amounts.............. 21
Section 3.8. Effect of Drawing Under Letter
of Credit............................ 22
Section 3.9. Effective Date and Term.............. 22
Section 3.10. Borrower's Purchase of Bonds......... 22
Section 3.11. Letter of Credit..................... 23
Section 3.12. Requirements for Delivery of a
Substitute Credit Facility........... 23
Section 3.13. Securities Laws...................... 25
Section 3.14. New York Paying Agent................ 25
ARTICLE IV THE PROJECT
Section 4.1. Completion of the Project............ 26
Section 4.2. No Warranty Regarding Condition,
Suitability or Cost of Project....... 26
Section 4.3. Taxes................................ 26
Section 4.4. Insurance............................ 27
Section 4.5. Compliance with Law.................. 27
Section 4.6. Maintenance and Repair............... 27
ARTICLE V CONDEMNATION DAMAGE AND DESTRUCTION
Section 5.1. No Abatement of Payments Hereunder... 29
Section 5.2. Project Disposition Upon Condemnation,
Damage or Destruction................ 29
Section 5.3. Application of Net Proceeds of
Insurance or Condemnation............ 29
ARTICLE VI COVENANTS
Section 6.1. The Borrower to Maintain its
Corporate Existence; Conditions under
which Exceptions Permitted........... 30
Section 6.2. Indemnification, Payment of Expenses,
and Advances......................... 30
Section 6.3. Incorporation of Tax Regulatory
Agreement; Payments Upon Taxability.. 33
Section 6.4. Covenant as to Project Use........... 34
Section 6.5. Further Assurances and Corrective
Instruments.......................... 35
Section 6.6. Covenant by Borrower as to Compliance
with Indenture....................... 36
Section 6.7. Assignment of Agreement or Note...... 36
Section 6.8. Inspection........................... 36
Section 6.9. Default Notification................. 36
Section 6.10. Covenant Against Discrimination...... 37
Section 6.11. Authority Costs and Expenses......... 37
ARTICLE VII EVENTS OF DEFAULT AND REMEDIES
Section 7.1. Events of Default.................... 38
Section 7.2. Remedies on Default.................. 39
Section 7.3. Remedies Upon Project Use Default.... 40
Section 7.4. No Duty to Mitigate Damages.......... 40
Section 7.5. Remedies Cumulative.................. 41
ARTICLE VIII PREPAYMENT PROVISIONS
Section 8.1. Optional Prepayment.................. 42
Section 8.2. Notice by the Borrower of Optional
Prepayment........................... 44
Section 8.3. Mandatory Prepayment on Taxability... 44
Section 8.4. Mandatory Prepayment Upon Occurrence
of Certain Events.................... 44
ARTICLE IX GENERAL
Section 9.1. Indenture............................ 45
Section 9.2. Benefit of and Enforcement by
Bondholders.......................... 45
Section 9.3. Force Majeure........................ 45
Section 9.4. Amendments........................... 46
Section 9.5. Notices.............................. 46
Section 9.6. Prior Agreements Superseded.......... 46
Section 9.7. Execution of Counterparts............ 47
Section 9.8. Time................................. 47
APPENDICES
Appendix A - Form of Promissory Note
Appendix B - Description of Project
Connecticut Development Authority
Western Massachusetts Electric Company
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LOAN AGREEMENT
THIS LOAN AGREEMENT, made and dated as of September 1, 1993 by and between the Connecticut Development Authority, a body corporate and politic constituting a public instrumentality and political subdivision of the State of Connecticut, and Western Massachusetts Electric Company, a corporation organized and existing under the laws of the Commonwealth of Massachusetts,
WITNESSETH THAT:
WHEREAS, the State Commerce Act, constituting Connecticut General Statutes, Sections 32-la through 32-23ss, as amended (the "Act"), declares that there is a continuing need in the State (1) for economic development and activity to provide and maintain employment and tax revenues and to control, abate and prevent pollution to protect the public health and safety and (2) for assistance to public service businesses providing transportation and utility services in the State, and that the availability of financial assistance and suitable facilities are important inducements to industrial and commercial enterprises to remain or locate in the State and to provide industrial, recreation, urban and public service projects; and
WHEREAS, the Act provides that (1) the term "project" as used therein means any facility, plant, works, system, building, structure, utility, fixture or other real property improvement located in the State, and the land on which it is located or which is reasonably necessary in connection therewith, which is of a nature or which is to be used or occupied by any person for purposes which would constitute it as an economic development project, recreation project, urban project, public service project or health care project, and any real property improvement reasonably related thereto, and (2) that a project may also include or consist exclusively of machinery, equipment or fixtures; and
WHEREAS, the Act defines economic development project to include "any project which is to be used or occupied by any person for . . . (2) controlling, abating, preventing or disposing of land, water, air or other environmental pollution . . . or (3) the conservation of energy or the utilization of cogeneration technology or solar, wind, hydro, biomass or other renewable sources to produce energy for any industrial or commercial application."
WHEREAS, the Act provides that the Authority shall have power (1) to determine the location and character of any project to be financed under the provisions of the Act; (2) to purchase, receive by gift or otherwise, lease, exchange, or otherwise acquire, and construct, reconstruct, improve, maintain, equip and furnish one or more projects, including all real and personal property which the Authority may deem necessary therewith, and to enter into a contract with a person therefor upon such terms and conditions as the Authority shall determine to be reasonable, including but not limited to reimbursement for the planning, designing, financing, construction, reconstruction, improvement, equipping, furnishing, operation and maintenance of reserve and insurance funds with respect to the financing of the project; (3) to extend credit or make loans to any person for the planning, designing, financing, acquiring, constructing, reconstructing, improving, equipping and furnishing of a project and for the refinancing of existing indebtedness with respect to any facility or part thereof which would qualify as a project in order to facilitate substantial improvements thereto, which credits or loans may be secured by loan agreements, mortgages, contracts and all other instruments or fees and charges, upon such terms and conditions as the Authority shall determine to be reasonable in connection with such loans, including provision for the establishment and maintenance of reserve and insurance funds and in the exercise of powers granted in the the Act in connection with a project for such person, to require the inclusion in any contract, loan agreement or other instrument, such provisions for the construction, use, operation and maintenance and financing of a project as the Authority may deem necessary or desirable; (4) to issue its bonds for such purposes, subject to the approval of the Treasurer of the State; and, (5) as security for the payment of the principal or redemption price, if any, of and interest on any such bonds, to pledge or assign such a loan, lease or sale agreement and the revenues and receipts derived by the Authority from such a project; and
WHEREAS, by resolutions adopted October 24, 1973; July 10, 1984; March
12, 1985; September 10, 1985; and December 12, 1985, the Authority has
authorized the issuance of $11,650,000 principal amount of its Pollution
Control Revenue Bonds (Millstone Point Project - 1973 Series) (of which
$2,213,500 was for the benefit of Western Massachusetts Electric Company);
$16,400,000 principal amount of its Pollution Control Revenue Bonds
(Western Massachusetts Electric Company Project - 1984 Series); $9,300,000
principal amount of its Pollution Control Revenue Variable Rate Demand
Bonds (Western Massachusetts Electric Company Project - 1985 Series);
$14,200,000 principal amount of its Pollution Control Revenue Par Value
Demand Bonds (Western Massachusetts Electric Company Project - 1985 Series
B); and $12,500,000 principal amount of its Pollution Control Revenue Par
Value Demand Bonds (Western Massachusetts Electric Company Project - 1985
Series C) (the "Prior Obligations") for the purposes of providing funds for
the financing of construction of and additions to the pollution control
facilities of the Borrower; and
WHEREAS, the Borrower currently owns certain individual interests in existing facilities within certain municipalities in the State and, by resolution adopted in furtherance of the purposes of the Act, the Authority has accepted the application of the Borrower for assistance in the financing of facilities for the control, abatement or prevention of environmental pollution deriving from the operation of certain nuclear electric generating facilities (the "Project"); and
WHEREAS, the Authority has by a further resolution adopted September 8, 1993, authorized the issuance of $53,800,000 principal amount of its Pollution Control Revenue Refunding Bonds (Western Massachusetts Electric Company Project - 1993A Series) for the purposes of providing funds for the refunding of the Prior Obligations; and
WHEREAS, pursuant to such resolution the Bonds (as hereinafter defined) are to be secured by an Indenture of Trust of even date herewith, by and between the Authority and Shawmut Bank Connecticut, National Association, as Trustee; and
WHEREAS, in order to further secure the Bonds, the Borrower concurrently with the execution hereof has arranged the delivery to the Paying Agent of an irrevocable Letter of Credit, dated the date of delivery of the Bonds, issued by Union Bank of Switzerland, New York Branch, for the account of the Borrower in favor of the Paying Agent as beneficiary on behalf of the owners of the Bonds; and
WHEREAS, the Borrower and Union Bank of Switzerland, New York Branch, entered into a Letter of Credit and Reimbursement Agreement dated as of September 1, 1993 obligating the Borrower inter alia to repay all amounts drawn under the Letter of Credit together with interest, if any, thereon; and
WHEREAS, the Bonds shall be special obligations of the Authority, payable solely from the revenues or other receipts, funds or monies to be derived by the Authority under this Agreement or the Indenture and from any amounts otherwise available under the Indenture for the payment of the Bonds; and
WHEREAS, all federal and State agencies having jurisdiction in the premises have certified that the portion of the Project that constitutes pollution control Facilities, as designed, is in furtherance of the purpose of controlling, abating or preventing such pollution at the Project; and
WHEREAS, the Authority proposes with the proceeds of the Bonds to make a loan to the Borrower and the Borrower proposes to borrow such proceeds from the Authority for the purpose of refunding the Prior Obligations issued by the Authority to finance and refinance a portion of the cost of undertaking and completing the Project; and
WHEREAS, the Borrower acknowledges that the Authority is providing financing for the Project in furtherance of the Authority's corporate purposes under the Act, that the accomplishment of these purposes is dependent upon the compliance of the Borrower with its covenants contained in this Agreement, that the Authority has a resulting beneficial interest in the Project, and that the Borrower's use of and interest in the Project as provided hereby are in furtherance of the discharge of a public purpose; and
WHEREAS, the Massachusetts Department of Public Utilities has approved the issuance of the Note;
NOW, THEREFORE, in consideration of the premises and of the mutual representations, covenants and agreements herein set forth, the Authority and the Borrower, each binding itself, its successors and assigns, do mutually promise, covenant and agree as follows (provided that in the performance of the agreements of the Authority herein contained, any obligation it may incur for the payment of money shall not be an obligation, debt or liability of the State or any municipality thereof and neither the State nor any municipality thereof shall be liable on any obligation so incurred, but any such obligation shall be payable solely out of the revenues or other receipts, funds or monies to be derived by the Authority under this Agreement or the Indenture and from any amounts otherwise available under the Indenture for the payment of the Bonds):
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1. Definitions. For the purposes of this Agreement, the following words and terms shall have the respective meanings set forth as follows, and any capitalized word or term used but not defined herein is used as defined in the Indenture:
"Act" means the State Commerce Act, constituting Connecticut General Statutes, Sections 32-la through 32-23ss, as amended.
"Agreement" means this Loan Agreement and any amendments and supplements hereto.
"Authority" means the Connecticut Development Authority, a body corporate and politic constituting a public instrumentality and political subdivision of the State of Connecticut duly organized and existing under the laws of the State, and any body, board, authority, agency or other political subdivision or instrumentality of the State which shall hereafter succeed to the powers, duties and functions thereof.
"Authorized Representative" means, in the case of the Authority, the Chairman or Vice Chairman, the President, the Executive Vice President or any Senior Vice President or any Vice President thereof and, in the case of the Borrower, the Chairman, Vice Chairman, President, any Vice President, Chief Financial Officer, Treasurer, Assistant Treasurer, Secretary, Assistant Secretary, Clerk or Assistant Clerk thereof and, when used with reference to the performance of any act, the discharge of any duty or the execution of any certificate or other document, any officer, employee or other person authorized to perform such act, discharge such duty or execute such certificate or other document.
"Bank" means Union Bank of Switzerland, New York Branch, in its capacity as issuer of the Letter of Credit and any other issuer of a Credit Facility.
"Beneficial Owner" shall have the meaning specified in Section 2.3(F) of the Indenture. If any person claims to the Trustee to be a Beneficial Owner, for purposes of Section 2.4(C) of the Indenture, such person shall prove such claim to the satisfaction of the Trustee with such documentation and signature guaranties as the Trustee may request.
"Bonds" means the $53,800,000 Pollution Control Revenue Refunding Bonds (Western Massachusetts Electric Company Project - 1993A Series) authorized and issued pursuant to Section 2.3 of the Indenture.
"Bond Counsel" means Whitman & Ransom or such other nationally recognized bond counsel selected by the Authority and reasonably satisfactory to the Borrower and the Trustee.
"Borrower" means (i) Western Massachusetts Electric Company, a corporation organized and existing under the laws of the Commonwealth of Massachusetts, and its successors and assigns and (ii) any surviving resulting or transferee corporation as provided in Section 6.1 hereof.
"Business Day" means any day (i) that is not a Saturday or Sunday, (ii) that is a day on which banks located in Hartford, Connecticut and New York, New York are not required or authorized to remain closed, (iii) that is a day on which banking institutions in all of the cities in which the principal offices of the Trustee and the Paying Agent and, if applicable, the Remarketing Agent and the Bank are located and are not required or authorized to remain closed and (iv) that is a day on which the New York Stock Exchange, Inc. is not closed.
"Code" means the Internal Revenue Code of 1986, as amended and regulations promulgated thereunder.
"Conversion Date" means the date on which a new Mode becomes effective with respect to a Bond, and with respect to a Bond in the Multiannual Mode, the date on which a new Rate Period becomes effective.
"Credit Facility" means the Letter of Credit and any substitute irrevocable transferable letter of credit delivered to the Paying Agent pursuant to the Indenture and this Agreement and then in effect. More than one Credit Facility may be in effect from time to time.
"Debt Service Fund" means the special trust fund so designated, established pursuant to Section 5.1 of the Indenture.
"DTC" or "The Depository Trust Company" shall mean the limited-purpose trust company organized under the laws of the State of New York which shall act as securities depository for the Bonds, and any successor thereto.
"Determination of Taxability" means (1) a published revenue ruling by
the Internal Revenue Service and an opinion of Bond Counsel, unless the
Borrower timely requests the Authority to proceed in accordance with
Section 6.3(H) of this Agreement and proceedings pursuant to such section
are continuing, (2)(a)(i) a private ruling specifically applicable to the
Bonds or (ii) the receipt by any Bondowner of a notice of assessment and
demand for payment from the Internal Revenue Service and (b)(i) the
expiration of the appeal period provided therein if no appeal is taken or
(ii) if an appeal is taken, a final unappealable decision by a court of
competent jurisdiction; provided that in the case of an event described in
clause (2) that the Authority or the Bondowner, as the case may be, has
given the Borrower and the Trustee prompt written notice of any application
for such a private ruling or, as the case may be, any proposed assertion of
taxability by the Internal Revenue Service and, if the Borrower agrees to
pay all expenses in connection therewith, permits the Borrower to contest
such action, either directly or in the name of the registered owner,
through any level of appeal determined by the Borrower, or (3) the
admission in writing by the Borrower, in the case of clause (1), (2) and
(3) to the effect that the interest on the Bonds is includable in the gross
income for federal income tax purposes (other than for purposes of any
alternative minimum tax, environmental tax or foreign branch profits tax)
of an owner or former owner thereof, other than for a period during which
such owner or former owner is or was a "Substantial User" of the Project or
a "Related Person" as such terms are defined in the Code. For purposes of
this definition, the term owner or Bondowner means the Beneficial Owner of
the Bonds so long as the Book-Entry Only System (as defined in Section
23(f) of the Indenture is in effect.
"Event of Default" means an Event of Default as defined in Section 7.1 hereof.
"Financing Documents" means this Agreement, the Tax Regulatory Agreement and the Note.
"Indenture" means the Indenture of Trust, of even date herewith, by and between the Authority and the Trustee, together with all indentures supplemental thereto made and entered into in accordance therewith.
"Interest Payment Date" shall mean each date on which interest is payable on the Bonds as provided in the forms of the Bonds.
"Letter of Credit" means the $54,596,000 irrevocable letter of credit dated the date of the initial delivery of the Bonds and issued by Union Bank of Switzerland, New York Branch, for the benefit of the Paying Agent.
"Mortgage Indentures" means (i) that certain First Mortgage Indenture and Deed of Trust dated as of August 1, 1954, by and between the Borrower and Old Colony Trust Company (which was merged into First National Bank of Boston by merger effective January 4, 1971), as trustee, as amended and supplemented, and (ii) any other mortgage indenture which may hereafter be created so long as such mortgage indenture covers the property pledged under the indenture named in (i) above or otherwise covers substantially all of the property of the Borrower.
"Moody's" means Moody's Investors Services, Inc., a corporation organized and existing under the laws of the State of Delaware, its successors and their assigns, and if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, "Moody's" shall be deemed to refer to any other nationally recognized securities rating agency designated by the Authority, at the direction of the Borrower, by notice to the Trustee and the Borrower.
"Net Proceeds" when used with respect to any insurance or condemnation
award, means the gross proceeds from such award less all expenses
(including attorney's fees and expenses and any extraordinary expenses)
incurred in the collection thereof.
"1954 Code" means the Internal Revenue Code of 1954, as amended, as in effect on August 1, 1986.
"Note" means the promissory note of the Borrower to the Authority, dated the date of initial delivery of the Bonds in the form attached as an Appendix to this Agreement, and any amendments or supplements made in conformity with this Agreement and the Indenture.
"Outstanding", when used with reference to a Bond or Bonds, as of any particular date, means all Bonds which have been authenticated and delivered under the Indenture, except:
(1) any Bonds cancelled by the Trustee because of payment or redemption prior to maturity or surrendered to the Trustee for cancellation;
(2) any Bond (or portion of a Bond) paid or redeemed or for the payment or redemption of which there has been separately set aside and held in the Debt Service Fund either:
(a) monies in an amount sufficient to effect payment of the principal or applicable Redemption Price thereof, together with accrued interest on such Bond to the payment or redemption date, which payment or redemption date shall be specified in irrevocable instructions given to the Trustee to apply such monies to such payment on the date so specified; or
(b) obligations of the kind described in subsection 12.1(A) of the Indenture in such principal amounts, of such maturities, bearing such interest and otherwise having such terms and qualifications as shall be necessary to provide monies in an amount sufficient to effect payment of the principal or applicable Redemption Price of such Bond, together with accrued interest on such Bond to the payment or redemption date, which payment or redemption date shall be specified in irrevocable instructions given to the Trustee to apply such obligations to such payment on the date so specified; or
(c) any combination of (a) and (b) above;
(3) Bonds deemed tendered for purchase and not delivered to the Paying Agent on the Purchase Date, provided sufficient funds for payment of the Purchase Price are on deposit with the Paying Agent;
(4) Bonds in exchange for or in lieu of which other Bonds shall have been authenticated and delivered under Article III of the Indenture; and
(5) any Bond deemed to have been paid as provided in subsection 12.1 of the Indenture.
"Paying Agent" means any paying agent for the Bonds appointed pursuant to Section 9.10 of the Indenture (and may include the Trustee), and its successor or successors and any other corporation which may at any time be substituted in its place in accordance with the Indenture.
"Permitted Encumbrances" mean, as of any particular date, (i) the lien of the Mortgage Indentures, (ii) liens and encumbrances permitted by the Mortgage Indentures, (iii) liens for taxes not yet due and payable, (iv) any lien created by this Agreement and the Indenture, (v) utility, access and other easements and rights-of-way, that will not interfere with or impair the value or use of the Project as herein provided, (vi) any mechanic's, laborer's, materialman's, supplier's or vendor's lien or right in respect thereof if payment is not yet due and payable and for which statutory lien rights exist, and (vii) such minor defects, irregularities, easements, and, rights-of-way (including agreements with any railroad the purpose of which is to service the railroad siding) as normally exist with respect to property similar in character to the Project and which do not materially impair the value or use of the property affected thereby for the purpose for which it was acquired hereunder.
"Plants" means, collectively, the nuclear electric generating plants at which the various portions of the Project are located, including the Millstone 1, Millstone 2, and Millstone 3 plants in Waterford, Connecticut, and as used in the singular form shall mean any one of them.
"Principal User" means any principal user of the Project within the meaning of Section 144(a)(2)(B) of the Code, or 103(b)(6)(B) of the 1954 Code, as applicable, including without limitation any person who is a greater-than-10-percent-owner (or if none, the person(s) who holds the largest ownership interest in the Project), lessee or user of more than 10% of the Project measured either by occupiable space or fair rental value under any formal or informal agreement or, under the particular facts and circumstances, anyone who is a principal customer of the Project. The term "principal customer" means any person, who purchases output of the Project under a contract if the percentage of output taken or to be taken by such person, multiplied by a fraction the numerator of which is the term of such contract and the denominator of which is the economic life of the Project, exceeds 10%. In the case of a person who purchases output of an electric or thermal energy, gas, water or other similar facility, such person is a principal customer if the total output purchased by such person during any one-year period beginning with the date the facility is placed in service is more than 10 percent of the facility's output during each such period. Co-owners or co-lessees who are shareholders in a corporation or who are collectively treated as a partnership subject to subchapter K under section 761(a) of the Code are not treated as Principal Users merely by reason of their ownership of corporate or partnership interests.
"Prior Obligations" means the Authority's $11,650,000 principal amount of Pollution Control Revenue Bonds (Millstone Point Project - 1973 Series) (of which $2,213,500 was for the benefit of the Borrower); $16,400,000 principal amount of Pollution Control Revenue Bonds (Western Massachusetts Electric Company Project - 1984 Series); $9,300,000 principal amount of Pollution Control Revenue Variable Rate Demand Bonds (Western Massachusetts Electric Company Project - 1985 Series); $14,200,000 principal amount of Pollution Control Revenue Par Value Demand Bonds (Western Massachusetts Electric Company Project - 1985 Series B); and $12,500,000 principal amount of Pollution Control Revenue Par Value Demand Bonds (Western Massachusetts Electric Company Project - 1985 Series C).
"Project" means the Borrower's interest in the realty and other interests in the real property, and in all personal property, goods, leasehold improvements, machinery, equipment, furnishings, furniture, fixtures, tools and attachments wherever located and whether now owned or hereafter acquired, acquired or financed in whole or in part with the proceeds of the Prior Obligations or the proceeds of tax-exempt securities refunded by the Prior Obligations, and any additions and accessions thereto, substitutions therefor and replacements, improvements, extensions and restorations thereof, described in Appendix B to this Agreement, as amended from time to time in accordance with this Agreement.
"Redemption Price" means, when used with respect to a Bond or a portion thereof, the principal amount of such Bond or portion thereof plus the applicable premium, if any, payable upon redemption thereof pursuant to the Indenture.
"Refunding Fund" means the special trust fund so designated, established pursuant to Section 5.1 of the Indenture.
"Reimbursement Agreement" means the Letter of Credit and Reimbursement Agreement dated as of September 1, 1993 among the Borrower, Union Bank of Switzerland, New York Branch, as agent and issuing bank thereunder, and the participating banks referred to therein, and any other agreement between the Borrower and a Bank under which the Borrower is obligated to reimburse the Bank for payments made by the Bank under a Credit Facility.
"Related Person" means, with respect to any Principal User, a person
which is a related person (as defined in Section 144(a)(3) of the Code, or
Section 103(b)(6)(B) of the 1954 Code, as applicable, and by reference to
Sections 267, 707(b) and 1563(a) of the Code, except that 50% is to be
substituted for 80% in Section 1563(a)).
"Sharing Agreement" means the Sharing Agreement - 1979 Connecticut Nuclear Unit dated as of September 1, 1973, among the Borrower and the other participants from time to time in ownership of the Millstone 3 nuclear electric generating plant in Waterford, Connecticut, pertaining to the ownership, construction and operation of Millstone 3, as such agreement has been or may be amended from time to time.
"S&P" means Standard & Poor's Corporation, a corporation organized and existing under the laws of the State of New York, its successors and their assigns and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, "S&P" shall be deemed to refer to any other nationally recognized securities rating agency designated by the Trustee at the direction of the Borrower.
"State" means the State of Connecticut.
"Substantial User" means any substantial user of the Project within the meaning of Section 147(a) of the Code or Section 103(b)(13) of the 1954 Code, as applicable.
"Supplemental Indenture" means any indenture supplemental to the Indenture or amendatory of the Indenture, adopted by the Authority in accordance with Article X of the Indenture.
"Tax Incidence Date" means the date as of which interest on the Bonds becomes or became includable in the gross income of the recipient thereof (other than the Borrower or another Substantial User or Related Person) for federal income tax purposes for any cause, as determined by a Determination of Taxability.
"Tax Regulatory Agreement" means the Tax Regulatory Agreement, dated as of the date of initial issuance and delivery of the Bonds, among the Authority, the Borrower and the Trustee, and any amendments and supplements thereto.
"Term", when used with reference to this Agreement, means the term of this Agreement determined as provided in Article III hereof.
"Trustee" means Shawmut Bank Connecticut, National Association, and its successor or successors hereafter appointed in the manner provided in the Indenture.
Section 1.2. Interpretation. In this Agreement:
(1) The terms "hereby", "hereof", "hereto", "herein", "hereunder" and any similar terms, as used in this Agreement, refer to this Agreement, and the term "hereafter" means after, and the term "heretofore" means before, the date of this Agreement.
(2) Words of the masculine gender mean and include correlative words of the feminine and neuter genders and words importing the singular number mean and include the plural number and vice versa.
(3) Words importing persons include firms, associations, partnerships (including limited partnerships), trusts, corporations and other legal entities, including public bodies, as well as natural persons.
(4) Any headings preceding the texts of the several Articles and Sections of this Agreement, and any table of contents appended to copies hereof, shall be solely for convenience of reference and shall not constitute a part of this Agreement, nor shall they affect its meaning, construction or effect.
(5) Nothing contained in this Agreement shall be construed to cause the Borrower to become the agent for the Authority or the Trustee for any purpose whatsoever, nor shall the Authority or the Trustee be responsible for any shortage, discrepancy, damage, loss or destruction of any part of the Project wherever located or for whatever cause.
(6) All approvals, consents and acceptances required to be given or made by any person or party hereunder shall be at the sole discretion of the party whose approval, consent or acceptance is required.
(7) All notices to be given hereunder shall be given in writing within a reasonable time unless otherwise specifically provided.
(8) This Agreement shall be governed by and construed in accordance with the applicable laws of the State.
(9) If any provision of this Agreement shall be ruled invalid by any court of competent jurisdiction, the invalidity of such provision shall not affect any of the remaining provisions hereof.
(10) From and after the date upon which there is no Credit Facility in effect, upon receipt by the Trustee of a certificate from the Bank stating that all amounts payable to the Bank under the Reimbursement Agreement have been paid in full, all references to the Bank, the Reimbursement Agreement or the Credit Facility in this Agreement, the Note, the Indenture, and the Bonds shall be ineffective.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations by the Authority. The Authority represents and warrants that:
(1) It is a body corporate and politic constituting a public instrumentality and political subdivision of the State, duly organized and existing under the laws of the State including the Act. The Authority is authorized to issue the Bonds in accordance with the Act and to use the proceeds thereof to refinance the Project.
(2) The Authority has complied with the provisions of the Act and has full power and authority pursuant to the Act to consummate all transactions contemplated by the Bonds, the Indenture and the Financing Documents.
(3) By resolution duly adopted by the Authority and still in full force and effect, the Authority has authorized the execution, delivery and due performance of the Bonds, the Indenture and the Financing Documents, and the taking of any and all action as may be required on the part of the Authority to carry out, give effect to and consummate the transactions contemplated by this Agreement and the Indenture, and all approvals necessary in connection with the foregoing have been received.
(4) The Bonds have been duly authorized, executed, authenticated, issued and delivered, constitute valid and binding special obligations of the Authority payable solely from revenues or other receipts, funds or monies pledged therefor under the Indenture and from any amounts otherwise available under the Indenture, and are entitled to the benefit of the Indenture. Neither the State nor any municipality thereof is obligated to pay the Bonds or the interest thereon. Neither the faith and credit nor the taxing power of the State nor any municipality thereof is pledged for the payment of the principal, and premium, if any, of and interest on the Bonds.
(5) The execution and delivery of the Bonds, the Indenture and the Financing Documents and compliance with the provisions thereof, will not conflict with or constitute on the part of the Authority a violation of, breach of or default under its by-laws or any statute, indenture, mortgage, deed of trust, note agreement or other agreement or instrument to which the Authority is a party or by which the Authority is bound, or, to the knowledge of the Authority, any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Authority or any of its activities or properties, and all consents, approvals, authorizations and orders of governmental or regulatory authorities which are required for the consummation by the Authority of the transactions contemplated thereby have been obtained.
(6) Subject to the provisions of this Agreement and the Indenture, the Authority will apply the proceeds of the Bonds to the purposes specified in the Indenture and the Financing Documents.
(7) There is no action, suit, proceeding or investigation at law or in equity before or by any court, public board or body pending or threatened against or affecting the Authority, or to the best knowledge of the Authority, any basis therefor, wherein an unfavorable decision, ruling or finding would adversely affect the transactions contemplated hereby or by the Indenture, or which, in any way, would adversely affect the validity of the Bonds, or the validity of or enforceability of the Indenture or the Financing Documents, or any agreement or instrument to which the Authority is a party and which is used or contemplated for use in consummation of the transactions contemplated hereby and by the Indenture.
(8) It has not made any commitment or taken any action which will result in a valid claim for any finders or similar fees or commitments in respect of the transactions contemplated by this Agreement.
(9) The representations of the Authority set forth in the Tax Regulatory Agreement are by this reference incorporated in this Agreement as though fully set forth herein.
Section 2.2 Limitation of Control by Borrower. Pursuant to the Sharing
Agreement, the Borrower is the owner of a 12.2385% undivided interest in
the Millstone 3 nuclear electric generating plant in Waterford,
Connecticut, at which a portion of the Project is located. The Sharing
Agreement designates the Borrower as one of two lead participants and,
together with such other lead participant, the Borrower has sole
responsibility for operation and maintenance of Millstone 3, subject to the
provisions of the Sharing Agreement. Every obligation of the Borrower
hereunder with respect to that portion of the Project located at Millstone
3 (other than the continuing obligation of the Borrower to pay, at the
times and in the amounts set forth herein, its loan obligation pursuant to
this Agreement) is subject to and limited by the provisions of such Sharing
Agreement. The Borrower agrees, however, subject to the representations
set forth in this Section, to exercise all rights granted to it pursuant to
the Sharing Agreement and its rights as to matters otherwise within the
Borrower's control, and to take all reasonable actions in the prudent
exercise of business judgment, to cause the covenants of the Borrower
contained in this Agreement to be performed to the full extent of the
Borrower's ability during the Term of this Agreement.
Section 2.3. Representations by the Borrower. The Borrower represents and warrants that:
(1) The Borrower has been duly incorporated and validly exists as a corporation in good standing under the laws of the Commonwealth of Massachusetts, is not in violation of any provision of its certificate of incorporation or its by-laws, has corporate power to enter into and perform the Financing Documents, and by proper corporate action has duly authorized the execution and delivery of the Financing Documents.
(2) The Financing Documents constitute valid and legally binding obligations of the Borrower, enforceable in accordance with their respective terms, except to the extent that such enforceability may be limited by bankruptcy or insolvency or other laws affecting creditors' rights generally or by general principles of equity.
(3) Neither the execution and delivery of the Financing Documents, the consummation of the transactions contemplated thereby, nor the fulfillment by the Borrower of or compliance by the Borrower with the terms and conditions thereof is prevented or limited by or conflicts with or results in a breach of, or default under the terms, conditions or provisions of any contractual or other restriction of the Borrower, evidence of its indebtedness or agreement or instrument of whatever nature to which the Borrower is now a party or by which it is bound, or constitutes a default under any of the foregoing. No event has occurred and no condition exists which, upon the execution and delivery of any Financing Documents, constitutes an Event of Default hereunder or an event of default thereunder or, but for the lapse of time or the giving of notice, would constitute an Event of Default hereunder or an event of default thereunder.
(4) There is no action or proceeding pending or, to the knowledge of the Borrower, threatened against the Borrower before any court, administrative agency or arbitration board that will materially and adversely affect the ability of the Borrower to perform its obligations under the Financing Documents except as disclosed in the Borrower's Annual Report on Form 10-K for the fiscal year ended December 31, 1992, the Borrower's Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 1993 and June 30, 1993, and the Borrower's Current Reports on Form 8-K dated June 3, 1993, June 30, 1993 and September 10, 1993; and all authorizations, consents and approvals of governmental bodies or agencies required in connection with the execution and delivery of the Financing Documents and in connection with the performance of the Borrower's obligations hereunder or thereunder have been obtained.
(5) The execution, delivery and performance of the Financing Documents and any other instrument delivered by the Borrower pursuant to the terms hereof or thereof are within the corporate powers of the Borrower and have been duly authorized and approved by the board of directors of the Borrower and are not in contravention of law or of the Borrower's certificate of incorporation or by-laws, as amended to date, or of any undertaking or agreement to which the Borrower is a party or by which it is bound.
(6) The Borrower represents that it has not made any commitment or taken any action which will result in a valid claim for any finders' or similar fees or commitments in respect of the transactions described in this Agreement other than the fees to various parties to the transactions contemplated hereby which have been heretofore paid or provided.
(7) The Project is included within the definition of a "project" in the Act, and its estimated cost is equal to or in excess of $53,800,000. The Borrower intends the Project to be and continue to be an authorized project under the Act during the Term of this Agreement.
(8) All amounts shown in Schedule D of the Tax Regulatory Agreement are eligible costs of a project financed by bonds issued by the Authority under the Act, and may be financed by amounts in the Refunding Fund under the Indenture. None of the proceeds of the Bonds will be used directly or indirectly as working capital or to finance inventory.
(9) The Project is in compliance with all applicable federal, State and local laws and ordinances (including rules and regulations) relating to zoning, building, safety and environmental quality the non-compliance with which would materially adversely affect the performance by the Borrower of any of its obligations hereunder.
(10) The Borrower has obtained all necessary material approvals from any and all governmental agencies requisite to the Project, and has also obtained all material occupancy permits and authorizations from appropriate authorities authorizing the occupancy and use of the Project for the purposes contemplated hereby. The Borrower further represents and warrants that it has completed the Project in accordance with all material federal, State and local laws, ordinances and regulations applicable thereto.
(11) The availability of financial assistance from the Authority as provided herein and in the Indenture has induced the Borrower to locate the Project in the State. The Borrower does not presently intend to lease the project.
(12) The Borrower will not take or omit to take any action which action or omission will in any way cause the proceeds of the Bonds to be applied in a manner contrary to that provided in the Indenture and the Financing Documents as in force from time to time.
(13) The Borrower has not taken and will not take any action and knows of no action that any other person, firm or corporation has taken or intends to take, which would cause interest on the Bonds to be includable in the gross income of the recipients thereof for federal income tax purposes. The representations, certifications and statements of reasonable expectation made by the Borrower in the Tax Regulatory Agreement and relating to Project description, composite issues, bond maturity and average asset economic life, use of Bond proceeds, arbitrage and related matters are hereby incorporated by this reference as though fully set forth herein.
(14) The Borrower has good and marketable or good and merchantable title to the Project subject only to Permitted Encumbrances and to irregularities or defects in title which may exist which do not materially impair the use of such properties in the Borrower's business.
(15) The Borrower will use all of the proceeds of the Bonds to refund the Prior Obligations.
ARTICLE III
THE LOAN
Section 3.1. Loan Clauses. (A) Subject to the conditions and in accordance with the terms of this Agreement, the Authority agrees to make a loan to the Borrower from the proceeds of the Bonds in the amount of $53,800,000 and the Borrower agrees to borrow such amount from the Authority.
(B) The loan shall be made at the time of delivery of the Bonds and receipt of payment therefor by the Authority against receipt by the Authority of the Note duly executed and delivered to evidence the pecuniary indebtedness of the Borrower hereunder. As and for the loan the Authority shall apply the proceeds of the Bonds as provided in the Indenture on the terms and conditions therein prescribed.
(C) The Borrower shall make payments in immediately available
funds to the Trustee for deposit in the Debt Service Fund no later than
12:00 Noon on the date on which such payment of principal (including
principal called for redemption) of, premium, if any, or interest on Bonds
shall become due in an amount equal to the payment then coming due on such
Bonds less the amounts, if any, (i) then held in the Debt Service Fund and
available to pay the same, and (ii) amounts received by the Paying Agent to
pay the same from a draw under a Credit Facility. The Borrower may make
payments to the Debt Service Fund earlier than required by this section,
but such payments shall not affect the accrual of interest. In addition,
the Borrower shall pay to the Trustee, as and when the same shall become
due, all other amounts due under the Financing Documents, together with
interest thereon at the then applicable rate as set forth herein in Section
6.2(G). The Borrower shall have the option to prepay its loan obligation in
whole or in part at the times and in the manner provided in Article VIII
hereof.
(D) The payments to be made under Section 3.1(C) shall be appropriately adjusted to reflect the date of issue of Bonds, accrued interest deposited in the Debt Service Fund, if any, and any purchase or redemption of Bonds so that there will be available on each payment date the amount necessary to pay the interest and principal due or coming due on the Bonds and so that accrued interest will be applied to the installments of interest to which it is applicable.
(E) At any time when any principal of the Bonds is overdue, the Borrower shall also have a continuing obligation to pay to the Trustee for deposit in the Debt Service Fund an amount equal to interest on the overdue principal but the installment payments required under this section shall not otherwise bear interest. Redemption premiums shall not bear interest.
(F) The payment obligations of the Borrower in this Section 3.1 are subject in all respects to the provisions of Sections 3.7 and 3.8 hereof regarding the use of Priority Amounts and the effect of drawings under the Credit Facility.
(G) In the event the Borrower should fail to make any of the payments required under the foregoing provisions of this Section 3.1, the item or installment so in default shall continue as an obligation of the Borrower until the amount in default shall have been fully paid, and the Borrower agrees to pay or cause to be paid the same with interest thereon at the rate determined in accordance with Article II of the Indenture until paid in accordance herewith and with the Indenture.
Section 3.2. Other Amounts Payable. (A) The Borrower hereby further expressly agrees to pay to the Trustee as and when the same shall become due, (i) an amount equal to the initial and annual fees of the Trustee for the ordinary services of the Trustee rendered and its ordinary expenses incurred under the Indenture, including fees and expenses as Paying Agent and the fees and expenses of Trustee's counsel, including fees and expenses as registrar and in connection with preparation and delivery of new Bonds upon exchanges or transfers, (ii) the reasonable fees and expenses of the Trustee and any Paying Agents on the Bonds for acting as paying agents as provided in the Indenture, including fees and expenses of the Paying Agent as registrar and in connection with the preparation of new Bonds upon exchanges, transfers or redemptions, (iii) the reasonable fees and expenses of the Bank and the Remarketing Agent for the performance of their duties as provided in the Indenture, including the reasonable fees of their counsel and other expenses the Remarketing Agent may incur in providing for accurate offering documents in connection therewith, (iv) the reasonable fees and charges of the Trustee for extraordinary services rendered by it and extraordinary expenses incurred by it under the Indenture, including reasonable counsel fees and expenses, and (v) fees and expenses of Bond Counsel and the Authority for any future action requested of either.
(B) The Borrower also agrees to pay all amounts payable by it under the Financing Documents at the time and in the manner therein provided.
Section 3.3. Manner of Payment. The payments provided for in Section 3.1 hereof shall be made by any reasonable method providing immediately available funds at the time and place of payment directly to the Trustee for the account of the Authority and shall be deposited in the Debt Service Fund. The additional payments provided for in Section 3.2 shall be made in the same manner directly to the entitled party or to the Trustee for its own use or disbursement to the Paying Agents, as the case may be.
Section 3.4. Obligation Unconditional. The obligations of the Borrower under the Financing Documents shall be absolute and unconditional, irrespective of any defense or any rights of setoff, recoupment or counterclaim it might otherwise have against the Authority or the Trustee. The Borrower will not suspend or discontinue any such payment or terminate this Agreement (other than in the manner provided for hereunder) for any cause, including, without limiting the generality of the foregoing, any acts or circumstances that may constitute failure of consideration, failure of title, or commercial frustration of purpose, or any damage to or destruction of the Project, or the taking by eminent domain of title to or the right of temporary use of all or any part of the Project, or any change in the tax or other laws of the United States, the State or any political subdivision of either thereof, or any failure of the Authority or the Trustee to perform and observe any agreement or covenant, whether expressed or implied, or any duty, liability or obligation arising out of or connected with the Financing Documents.
Section 3.5. Security Clauses. The Authority hereby notifies the Borrower and the Borrower acknowledges that, among other things, the Borrower's loan payments and all of the Authority's right, title and interest under the Financing Documents to which it is a party (except its rights under Section 6.2 hereof) are being concurrently with the execution and delivery hereof endorsed, pledged and assigned without recourse by the Authority to the Trustee as security for the Bonds as provided in the Indenture.
Section 3.6. Issuance of Bonds. The Authority has concurrently with the execution and delivery hereof sold and delivered the Bonds under and pursuant to a resolution adopted by the Authority on September 8, 1993, authorizing their issuance under and pursuant to the Indenture. The proceeds of sale of the Bonds shall be applied as provided in Articles IV and V of the Indenture.
Section 3.7. Use of Priority Amounts. The Borrower and the Authority acknowledge their intention to minimize the risk that any payment made to a Bondowner from amounts provided by or on behalf of the Borrower may be determined by a bankruptcy court to constitute a preference. To this end the parties agree that payments to Bondowners on Bonds supported by a Credit Facility shall be made only from Priority Amounts, except when and to the extent no Priority Amounts are available for the purpose as provided in Section 5.8(e) of the Indenture.
Section 3.8. Effect of Drawings Under Credit Facility. The payment of obligations of the Borrower under this Agreement and the Note with respect to the Bonds shall be completely satisfied to the extent of all drawings made under the Credit Facility for the purpose of satisfying such obligations.
Section 3.9. Effective Date and Term. (A) This Agreement shall become effective upon its execution and delivery by the parties hereto, shall remain in full force from such date and, subject to the provisions hereof (including particularly Articles VII and VIII), shall expire on such date as the Indenture shall be discharged and satisfied in accordance with the provisions of subsection 12.1(A) thereof. The Borrower's obligations under Sections 6.2 and 6.3 hereof, however, shall survive the expiration of this Agreement.
(B) Within 60 days of such expiration the Authority shall deliver to the Borrower any documents and take or cause the Trustee, at the Borrower's expense, to take any such reasonable actions as may be necessary to effect the cancellation, release and satisfaction of the Indenture and the Financing Documents.
Section 3.10. Borrower's Purchase of Bonds. Pursuant to Section 5.8(F) of the Indenture, if the amount drawn on the Credit Facility and deposited with the Paying Agent, together with all other amounts (including remarketing proceeds) received by the Paying Agent for the purchase of Bonds supported by a Credit Facility and tendered pursuant to Section 2.3(G)(1)(c) or 2.3(G)(2)(c) or (d) of the Indenture, is not sufficient to pay the Purchase Price of such Bonds on the Purchase Date, the Paying Agent shall before 3:30 P.M. on such Purchase Date, notify the Borrower, the Remarketing Agent and the Trustee of such deficiency by telephone promptly confirmed in writing. The Borrower shall pay to the Paying Agent in immediately available funds by 4:00 P.M. on the Purchase Date an amount equal to the Purchase Price of such Bonds less the amount, if any, available to pay the Purchase Price in accordance with Section 9.18 of the Indenture from the proceeds of the remarketing of such Bonds or from drawings on the Credit Facility, as reported by the Paying Agent. Bonds so purchased with moneys furnished by the Borrower shall be Borrower Bonds.
Section 3.11. Letter of Credit. The Borrower has arranged, concurrently with the original issuance and authentication of the Bonds, for the delivery to the Paying Agent of the Letter of Credit having a term expiring three years from the date of issuance, and providing for the Paying Agent to be entitled to draw on or prior to the Termination Date (as defined therein), an amount that is not less than the sum of the aggregate principal amount (or that portion of the purchase price corresponding to principal) of the Outstanding Bonds and the aggregate amount of interest accrued on such Bonds (or that portion of the purchase price corresponding to interest).
Section 3.12. Requirements for Delivery of a Substitute Credit
Facility. (A) The Borrower may, upon satisfaction of the requirements set
forth in this Section, at its option (except during the period between the
giving of notice of mandatory tender for purchase on account of the
expiration of the Credit Facility and the Purchase Date), provide for the
delivery to the Paying Agent of a substitute Credit Facility; provided,
however, that (1) the Credit Facility being replaced shall in no event be
terminated or released until the Borrower has given not less than
forty-five (45) days' written notice to the Authority, the Trustee, the
Paying Agent and the Remarketing Agent, and further the Paying Agent has
received the proceeds of all outstanding drawings on the Credit Facility
being replaced, (2) if any Bonds supported by the Credit Facility being
replaced are in the Weekly Mode, the Paying Agent has given not less than
(30) days' written notice of the termination or release of the Credit
Facility to owners of such Bonds in the Weekly Mode and (3) if any of the
Bonds supported by the Credit Facility being replaced are in the Flexible
Mode, such Credit Facility shall in no event be terminated or released
earlier than on the second Business Day after an Effective Date for all
such Bonds or such earlier day on or after such Effective Date on which the
full Purchase Price for such Bonds is received by the Paying Agent. Any
notice given pursuant to clause (1) or (2) above shall specify the
expiration date of the Credit Facility and the name of the entity providing
the substitute Credit Facility and shall advise that the Credit Facility
will terminate on the date stated in such notice.
(B) Each Credit Facility must:
(i) be an irrevocable, unconditional obligation of a financial institution;
(ii) be on terms no less favorable to the Paying Agent than the Letter of Credit and entitle the Paying Agent to draw upon or demand payment and receive in immediately available funds an amount equal to the sum of the principal amount of the Bonds supported by the Credit Facility, any premium applicable thereto, and (A) forty-five (45) days' accrued interest at the Maximum Interest Rate on the principal amount of Bonds then Outstanding in the Weekly Mode, or (B) thirty-eight (38) days' accrued interest at the Maximum Interest Rate on the principal amount of Bonds then Outstanding in the Flexible Mode; and
(iii) provide for a term which may not expire in less than 360 days and which may not expire or be terminated prior to the fifth Business Day after the mandatory tender for purchase as provided in Section 2.3(G)(1)(c) or 2.3(G)(2)(d) of the Indenture. The Borrower shall not enter into any Reimbursement Agreement or agree to any amendment of a Reimbursement Agreement which in any way limits the obligation of the Bank to provide funds under the Credit Facility without the prior written consent of 100% of the principal amount of the Bonds Outstanding and entitled to the benefit thereof.
(C) No substitute Credit Facility may be delivered to the Trustee for any purpose under this Agreement or the Indenture unless accompanied by the following documents: (i) an opinion of counsel for the issuer of the substitute Credit Facility to the effect that it constitutes a legal, valid and binding obligation of the issuer enforceable in accordance with its terms; (ii) an opinion of Bond Counsel to the effect that the issuance of a substitute Credit Facility will not adversely affect the exclusion of interest on the Bonds from gross income for federal income tax purposes and that such Credit Facility is permitted under the Indenture; (iii) an opinion of counsel to the Borrower, satisfactory to the Trustee stating that the delivery of such substitute Credit Facility is authorized under this Agreement and complies with the terms hereof; (iv) a certificate of the Bank that all amounts due under the Reimbursement Agreement have been paid and that the Company has fulfilled all its obligations arising out of such Agreement; (v) an executed copy of the Reimbursement Agreement entered into with respect to the substitute Credit Facility; (vi) copies of any other documents, agreements or arrangements entered into directly or indirectly between the Borrower and the entity issuing the substitute Credit Facility with respect to the transactions contemplated by the substitute Credit Facility and related Reimbursement Agreement; and (vii) such other documents and opinions as the Trustee or the Authority may reasonably request. Notice of the substitution, replacement, termination or extension of a Credit Facility shall be sent by the Paying Agent to Moody's and S&P and shall include the new expiration date of the Credit Facility and the name of the entity providing the substitute Credit Facility.
The substitute Credit Facility, related Reimbursement Agreement and other documents, agreements and arrangements entered into and delivered with respect to the delivery of a substitute Credit Facility shall not include any provisions less favorable to the owners of the Bonds than the provisions of the Credit Facility and related Reimbursement Agreement, documents, agreements and arrangements, including provisions regarding the acceleration of the Bonds, any right of setoff of assets of the account party by the entity issuing the substitute Credit Facility, and any direct or indirect pledge of collateral which is not pledged on a priority or parity basis to the owners of the Bonds.
Section 3.13. Securities Laws. In any remarketing of Bonds under this Agreement, the Borrower shall at all times comply with applicable federal and state securities laws.
Section 3.14. New York Paying Agent. The Borrower agrees that if at any time it becomes necessary or desirable to have a Paying Agent capable of performing in New York, New York, it shall remove Shawmut Bank Connecticut, National Association as Paying Agent and a successor shall be appointed pursuant to Section 9.11 of the Indenture.
ARTICLE IV
THE PROJECT
Section 4.1. Completion of the Project. (A) The Borrower represents and warrants that the Project has been completed.
(B) The Borrower affirms that it shall bear all of the costs and expenses in connection with the preparation of the Financing Documents and the Indenture, the preparation and delivery of any legal instruments and documents necessary in connection therewith and their filing and recording, if required, and all taxes and charges payable in connection with any of the foregoing. Such costs and all other costs of the Project shall be paid by the Borrower or from the Refunding Fund in the manner and to the extent provided in the Indenture.
Section 4.2. No Warranty Regarding Condition, Suitability or Cost of Project. Neither the Authority, nor the Trustee, nor any Bondholder makes any warranty, either expressed or implied, as to the Project or its condition or that it will be suitable for the Borrower's purposes or needs, or that the insurance required hereunder will be adequate to protect the Borrower's business or interest, or that the proceeds of the Bonds will be sufficient to refund the Prior Obligations.
Section 4.3. Taxes. (A) The Borrower will pay when due all material
(1) taxes, assessments, water rates and sewer use or rental charges, (2)
payments in lieu thereof which may be required by law, and (3) governmental
charges and impositions of any kind whatsoever which may now or hereafter
be lawfully assessed or levied upon the Project or any part thereof, or
upon the rents, issues, or profits thereof, whether directly or indirectly.
With respect to special assessments or other governmental charges that may
lawfully be paid in installments over a period of years, the Borrower shall
be obligated to pay only such installments as are required to be paid
during the Term.
(B) The Borrower may, at its expense and in its own name, in good faith contest any such taxes, assessments and other charges and payments in lieu of taxes including assessments and, in the event of such contest, may permit the taxes, assessments or other charges or payments in lieu of taxes, including assessments so contested to remain unpaid, provided prior written notice thereof has been given to the Trustee and reserves to the extent required by the Reimbursement Agreement are maintained, during the period of such contest and any appeal therefrom. Nothing herein shall preclude the Borrower, at its expense and in its own name and behalf, from applying for any tax exemption allowed by the federal government, the State or any political or taxing subdivision thereof under any existing or future provision of law which grants or may grant such tax exemption.
Section 4.4. Insurance. (A) The Borrower shall insure the Project against loss or damage by fire, flood, lightning, windstorm, vandalism and malicious mischief and other hazards, casualties, contingencies and extended coverage risks in such amounts and in such manner as is required by applicable federal or state law and shall pay when due the premiums thereon.
(B) The Borrower further agrees that it will at all times carry public liability insurance with respect to the Project to the extent required by applicable federal or state law.
(C) As an alternative to the hazard insurance and public liability insurance requirements of subsections (A) or (B) above the Borrower may self-insure against hazard or public liability risks.
(D) The insurance coverage required by this Section may be effected under overall blanket or excess coverage policies of the Borrower or any affiliate and may be carried with any insurer other than an unauthorized insurer under the Connecticut Unauthorized Insurers Act. The Borrower shall furnish evidence satisfactory to the Authority or the Trustee, promptly upon the request of either, that the required insurance coverage is valid and in force.
Section 4.5. Compliance with Law. The Borrower will observe and comply with all material laws, regulations, ordinances, rules, and orders (including without limitation those relating to zoning, land use, environmental protection, air, water and land pollution, wetlands, health, equal opportunity, minimum wages, worker's compensation and employment practices) of any federal, state, municipal or other governmental authority relating to the Project except during any period during which the Borrower at its expense and in its name shall be in good faith contesting its obligation to comply therewith.
Section 4.6. Maintenance and Repair. At its own expense, the Borrower
will keep and maintain or cause the Project to be kept and maintained in
accordance with sound utility operating practice and in good condition,
working order and repair, will not commit or suffer any waste thereon, and
will make all material repairs and replacements thereto which may be
required in connection therewith. Nothing in this Section 4.6 shall (1)
apply to any portion of the Project beyond its useful or economic life or
(2) apply to the use and disposition by the Borrower of any part of the
Project in the ordinary course of its business.
ARTICLE V
CONDEMNATION
DAMAGE AND DESTRUCTION
Section 5.1. No Abatement of Payments Hereunder. If the Project shall be damaged or either partially or totally destroyed, or if title to or the temporary use of the whole or any part thereof shall be taken or condemned by a competent authority for any public use or purpose, there shall be no abatement or reduction in the amounts payable by the Borrower hereunder and the Borrower shall continue to be obligated to make such payments. In any such case the Borrower shall promptly give written notice thereof to the Authority and the Trustee.
Section 5.2. Project Disposition Upon Condemnation, Damage or Destruction. In the event of any such condemnation, damage or destruction the Borrower shall:
(1) Comply with the applicable provisions of the Mortgage Indentures and the Sharing Agreement concerning the repair, reconstruction or restoration of the Project or give notice to the Authority of its decision not to so comply; and/or
(2) If and as permitted by Section 8.1 hereof, exercise its option to prepay its loan obligation in full.
Section 5.3. Application of Net Proceeds of Insurance or Condemnation. The Net Proceeds from any insurance or condemnation award with respect to the Project shall be applied as provided in the Mortgage Indentures, or, in the event that the Mortgage Indentures have been discharged or are no longer in effect, shall be applied at the direction of the Borrower with the approval of the Authority.
ARTICLE VI
COVENANTS
Section 6.1. The Borrower to Maintain its Corporate Existence; Conditions under which Exceptions Permitted. (A) The Borrower covenants and agrees that, during the Term of this Agreement it will maintain its corporate existence, will continue to be a corporation either organized under the laws of or duly qualified to do business as a foreign corporation in the State and in all jurisdictions necessary in the operation of its business, will not dissolve or otherwise dispose of all or substantially all of its assets and will not consolidate with or merge into another corporation or permit one or more other corporations to consolidate with or merge into it.
(B) The Borrower may, however, without violating the agreements contained in this Section, consolidate with or merge into another corporation or permit one or more other corporations to consolidate with or merge into it, or sell or otherwise transfer to another corporation all or substantially all of its assets as an entity and thereafter liquidate or dissolve, if (a) the Borrower is the surviving, resulting or transferee corporation, as the case may be, or (b) in the event the Borrower is not the surviving, resulting or transferee corporation, as the case may be, such corporation (i) is a solvent corporation either organized under the laws of or duly qualified to do business as a foreign corporation subject to service of process in the State and (ii) assumes in writing all of the obligations of the Borrower herein, and under the Note.
Section 6.2. Indemnification, Payment of Expenses, and Advances. (A) The Borrower agrees to protect, defend and hold harmless the Trustee, the Paying Agent, the Authority, the State, agencies of the State and the members, servants, agents, officers, employees and directors of the Trustee, the Paying Agent, the Authority or the State (the "Indemnified Parties") from any claim, demand, suit, action or other proceeding and any liabilities, costs, and expenses whatsoever by any person or entity whatsoever, arising or purportedly arising from or in connection with the Financing Documents, the Indenture, the Bonds, or the transactions contemplated thereby or actions taken thereunder by any person (including without limitation the filing of any information, form or statement with the Internal Revenue Service), except for any wilful and material misrepresentation, wilful misconduct or gross negligence on the part of the Indemnified Parties and except for any bad faith on the part of any Indemnified Party other than the Authority.
The Borrower agrees to indemnify and hold harmless any Indemnified Party against any and all claims, demands, suits, actions or other proceedings and all liabilities, costs and expenses whatsoever caused by any untrue statement or misleading statement or alleged untrue statement or alleged misleading statement of a material fact contained in the written information provided by the Borrower in connection with the issuance of the Bonds or incorporated by reference therein or caused by any omission or alleged omission from such information of any material fact required to be stated therein or necessary in order to make the statements made therein in the light of the circumstances under which they were made, not misleading.
(B) The Authority and the Trustee shall not be liable for any damage or injury to the persons or property of the Borrower or its members, directors, officers, agents, servants or employees, or any other person who may be about the Project due to any act or omission of any person other than the Authority or the Trustee or their respective members, directors, officers, agents, servants and employees.
(C) The Borrower releases each Indemnified Party from, agrees that no Indemnified Party shall be liable for, and agrees to hold each Indemnified Party harmless against, any attorney fees and expenses, expenses or damages incurred because of any investigation, review or lawsuit commenced by the Trustee or the Authority in good faith with respect to the Financing Documents, the Indenture, the Bonds and the Project Realty and the Project Equipment, and the Authority or the Trustee shall promptly give written notice to the Borrower with respect thereto.
(D) All covenants, stipulations, promises, agreements and obligations of the Authority and the Trustee contained herein shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the Authority and the Trustee and not of any member, director, officer or employee of the Authority or the Trustee in its individual capacity, and no recourse shall be had for the payment of the Bonds or for any claim based thereon or hereunder against any member, director, officer or employee of the Authority or the Trustee or any natural person executing the Bonds.
(E) In case any action shall be brought against one or more of the Indemnified Parties based upon any of the above and in respect of which indemnity may be sought against the Borrower, such Indemnified Party shall promptly notify the Borrower in writing, enclosing a copy of all papers served, but the omission so to notify the Borrower of any such action shall not relieve it of any liability which it may have to any Indemnified Party otherwise than under this Section 6.2. In case any such action shall be brought against any Indemnified Party and it shall notify the Borrower of the commencement thereof, the Borrower shall be entitled to participate in and, to the extent that it shall wish, to assume the defense thereof with counsel satisfactory to such Indemnified Party, and after notice from the Borrower to such Indemnified Party of the Borrower's election so to assume the defense thereof, the Borrower shall not be liable to such Indemnified Party for any subsequent legal or other expenses attributable to such defense, except as set forth below, other than reasonable costs of investigation subsequently incurred by such Indemnified Party in connection with the defense thereof. The Indemnified Party shall have the right to employ its own counsel in any such action, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless (i) the employment of counsel by such Indemnified Party has been authorized by the Borrower; (ii) the Indemnified Party shall have reasonably concluded that there may be a conflict of interest between the Borrower and the Indemnified Party in the conduct of the defense of such action (in which case the Borrower shall not have the right to direct the defense of such action on behalf of the Indemnified Party); or (iii) the Borrower shall not in fact have employed counsel reasonably satisfactory to the Indemnified Party to assume defense of such action; provided, however, that Borrower shall not be responsible for the fees and expenses of more than one such law firm unless an Indemnified Party shall have reasonably concluded that there may be a conflict of interest between such Indemnified Party and any other Indemnified Party requiring the use of separate counsel, or Borrower has not employed counsel which is satisfactory to each Indemnified Party. The Borrower shall not be liable for any settlement of any action or claim effected without its consent.
(F) The Borrower also agrees to pay all reasonable or necessary out-of-pocket expenses of the Authority in connection with the issuance of the Bonds, the administration of the Financing Documents and the enforcement of its rights thereunder.
(G) In the event the Borrower fails to pay any amount or perform any act under the Financing Documents, the Trustee or the Authority may pay the amount or perform the act, in which event the costs, disbursements, expenses and reasonable counsel fees and expenses thereof, together with interest thereon from the date the expense is paid or incurred at the prime interest rate generally prevailing among banks in the State on the date of the advance plus 1% shall be an additional obligation hereunder payable upon demand by the Authority or the Trustee.
(H) Any obligation of the Borrower to the Authority under this
Section shall be separate from and independent of the other obligations of
the Borrower hereunder, and may be enforced directly by the Authority
against the Borrower irrespective of any action taken by or on behalf of
the owners of the Bonds.
(I) The obligations of the Borrower under this section, notwithstanding any other provisions contained in the Financing Documents, shall survive the termination of this Agreement and shall be recourse to the Borrower, and for the enforcement thereof any Indemnified Party shall have recourse to the general credit of the Borrower.
Section 6.3. Incorporation of Tax Regulatory Agreement; Payments Upon Taxability. (A) For purpose of this Section, the term owner means the Beneficial Owner of the Bonds so long as the Book-Entry System is in effect.
(B) The representations, warranties, covenants and statements of expectation of the Borrower set forth in the Tax Regulatory Agreement are by this reference incorporated in this Agreement as though fully set forth herein.
(C) If any owner of the Bonds receives from the Internal Revenue Service a notice of assessment and demand for payment with respect to interest on any Bond (except a notice and demand based upon the assertion that the owner of the Bonds is a Substantial User or Related Person), an appeal may be taken by the owner of the Bonds at the option of the Borrower. Without limiting the generality of the foregoing, the Borrower shall have the right to direct the Trustee to direct the owner of the Bonds to take such appeal or not to take such appeal. In either case all expenses of the appeal including reasonable counsel fees and expenses shall be paid by the Borrower, and the owner of the Bonds and the Borrower shall cooperate and consult with each other in all matters pertaining to any such appeal, except that no owner of the Bonds shall be required to disclose or furnish any non-publicly disclosed information, including, without limitation, financial information and tax returns.
(D) Not later than 90 days following a Determination of Taxability, the Borrower shall pay to the Trustee an amount sufficient, when added to the amount then in the Debt Service Fund and available for such purpose, to retire and redeem all Bonds then Outstanding, in accordance with Section 2.4 of the Indenture.
(E) The obligation of the Borrower to make the payments provided for in this Section shall be absolute and unconditional, and the failure of the Authority or the Trustee to execute or deliver or cause to be executed or delivered any documents or to take any action required under this Agreement or otherwise shall not relieve the Borrower of its obligation under this Section. Notwithstanding any other provision of this Agreement or the Indenture, the Borrower's obligations under this Section shall survive the termination of this Agreement and the Indenture.
(F) The Borrower's payment obligations under this Section are further subject in all respects to the provisions of Section 3.7 and 3.8 hereof regarding the use of Priority Amounts and the effect of drawings under the Letter of Credit.
(G) The occurrence of a Determination of Taxability shall not be an Event of Default hereunder but shall require only the performance of the obligations of the Borrower stated in this Section, the breach of which shall constitute an Event of Default as provided in Section 7.1 hereof.
(H) At any time after the issuance of the Bonds, the Authority shall, upon (1) the release of a published Revenue Ruling by the Internal Revenue Service and the receipt by the Authority of an opinion of Bond Counsel to the effect that such ruling may adversely affect the exclusion of interest on the Bonds from gross income for federal income tax purposes, and (2) receipt from the Borrower, within 30 days after the Authority has mailed copies of such ruling and such opinion to the Borrower, of a written request to proceed in accordance with this Section, proceed to apply for and use its best efforts to obtain a ruling from the Internal Revenue Service, pursuant to Revenue Procedure 88-33 or any other procedures subsequently established by the Internal Revenue Service, as to the qualification or continued qualification of interest on the Bonds for exclusion from gross income for federal income tax purposes. The Authority and the Borrower shall cooperate and consult with each other in all matters pertaining to such ruling request. All expenses of the Authority in connection with such application including reasonable counsel fees shall be paid by the Borrower.
Section 6.4. Covenant as to Project Use. (A) The Borrower agrees that it shall promptly notify the Authority and the Trustee upon the occurrence of any of the following events, in each case, whether as a result of a determination by the Borrower, the Massachusetts Department of Public Utilities or the United States Nuclear Regulatory Commission or its successors,
(1) Abandonment of a substantial portion of the Project at any one time or in the aggregate;
(2) Any disposition of all or any part of the Borrower's ownership interest in the Project other than (i) to a company which is part of Northeast Utilities, (ii) in connection with a merger, consolidation, or sale of assets permitted by Section 6.1(B) hereof, (iii) in connection with any form of financing (including without limitation the grant of a mortgage or security interest or sale in connectin with a sale and lease back) by the Borrower, (iv) in any case in which the remaining aggregate ownership interest of Northeast Utilities is greater than 50 percent, (v) of any portion of the Project beyond its useful or economic life, or (vi) in the ordinary course of the Borrower's business. For purposes of this paragraph, "Northeast Utilities" means Northeast Utilities, its subsidiaries (whether direct or indirect) and their successors and assigns; or
(3) Any determination, following damage or destruction of all or substantially all of the Project, not to repair, reconstruct, relocate or replace the Project.
(B) In the event that the Authority receives notice from the
Borrower of the occurrence of any event described in subsection (A) of this
Section 6.4, the Borrower agrees that the Authority may, not later than one
year after the receipt of such notice from the Borrower, declare that
payment of all amounts due under the Financing Documents shall be
accelerated by notice to the Borrower and the Trustee stating that such
amounts are due and payable by the Borrower in full on a date selected by
the Borrower and set forth in a notice to the Trustee and the Authority,
which date shall be not later than three years from the date of mailing of
the Authority's acceleration notice to the Borrower.
(C) Any failure of the Borrower to comply with the provisions of this Section shall be subject to the provisions of Section 7.3 hereof.
Section 6.5. Further Assurances and Corrective Instruments. The Authority and the Borrower agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may reasonably be required for correcting any inadequate or incorrect description of the Project Realty or Project Equipment or for carrying out the intention of or facilitating the performance of this Agreement.
Section 6.6. Covenant by Borrower as to Compliance with Indenture. The Borrower covenants and agrees that it will comply with the provisions of the Indenture with respect to the Borrower and that the Trustee and the Bondholders shall have the power and authority provided in the Indenture. The Borrower further agrees to aid in the furnishing to the Authority or the Trustee of opinions that may be required under the Indenture. The Borrower covenants and agrees that the Trustee shall be entitled to and shall have all the rights, including the right to enforce against the Borrower the provisions of the Financing Documents, pertaining to the Trustee notwithstanding the fact that the Trustee is not a party to the Financing Documents.
Section 6.7. Assignment of Agreement or Note. (A) The Borrower may not assign its rights, interests or obligations hereunder or under the Note except as may be permitted pursuant to Section 6.1(B) hereof.
(B) The Authority agrees that it will not assign or transfer any of the Financing Documents or the revenues and other receipts, funds and monies to be received thereunder during the Term except to the Trustee as provided in this Agreement and the Indenture.
Section 6.8. Inspection. The Authority, the Trustee and their duly authorized agents shall have (1) the right at all reasonable times to enter upon and to examine and inspect the Project and (2) such rights of access thereto as may be reasonably necessary for the proper maintenance and repair thereof in the event of failure by the Borrower to perform its obligations under this Agreement, subject, in each case, to all applicable laws, rules, regulations, orders and guidelines. The Authority and the Trustee shall also be permitted, at all reasonable times, to examine the books and records of the Borrower with respect to the Project.
Section 6.9. Default Notification. Within seven (7) days after becoming aware of any condition or event which constitutes, or with the giving of notice or the passage of time would constitute, an Event of Default or an "Event of Default" under Section 8.1 of the Indenture, the Borrower shall deliver to the Authority, the Bank, if any, the Remarketing Agent, the Paying Agent and the Trustee a notice stating the existence and nature thereof and specifying the corrective steps, if any, the Borrower is taking with respect thereto.
Section 6.10. Covenant Against Discrimination. (A) The Borrower in the performance of this Agreement will not discriminate or permit discrimination against any person or group of persons on the grounds of race, color, religion, national origin, age, sex, sexual orientation, marital status, physical or learning disability, political beliefs, mental retardation or history of mental disorder in any manner prohibited by the laws of the United States or of the State.
(B) The Borrower will comply with the provisions of the resolution adopted by the Authority on June 14, 1977, as amended, and the policy of the Authority implemented pursuant thereto concerning the promotion of equal employment opportunity through affirmative action plans. The resolution requires that all borrowers receiving financial assistance from the Authority adopt and implement an affirmative action plan prior to the closing of the loan. The plan shall be updated annually as long as the Bonds remain Outstanding.
Section 6.11. Authority Costs and Expenses. The Authority agrees that it shall in all instances act in good faith in incurring costs, expenses and legal fees in connection with the transactions contemplated by this Agreement and the Indenture.
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.1. Events of Default. Any one or more of the following shall constitute an "Event of Default" hereunder:
(1) Any material representation or warranty made by the Borrower in the Financing Documents or any certificate, statement, data or information furnished in writing to the Authority or the Trustee by the Borrower in connection with the closing of the initial issue of the Bonds or included by the Borrower in its application to the Authority for assistance proves at any time to have been incorrect when made in any material respect.
(2) Failure by the Borrower to pay any amount that has become due and payable with respect to the Bonds or any other amount due and payable pursuant to the Financing Documents and the continuance of such failure for more than five Business Days.
(3) Failure by the Borrower to comply with the default notification provisions of Section 6.9 hereof.
(4) The occurrence of an "Event of Default" under Section 8.1(A) of the Indenture (other than an occurrence under Section 8.1(A)(2)(a)).
(5) Failure by the Borrower to observe or perform any covenant, condition or agreement hereunder or under the Financing Documents (except those referred to above) and (a) continuance of such failure for a period of sixty days after receipt by the Borrower of written notice specifying the nature of such failure or (b) if by reason of the nature of such failure the same cannot be remedied within the sixty day period, the Borrower fails to proceed with reasonable diligence after receipt of the notice to cure the failure.
(6) The Borrower shall (a) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian or the like of itself or of its property, (b) admit in writing its inability to pay its debts generally as they become due, (c) make a general assignment for the benefit of creditors, (d) be adjudicated a bankrupt or insolvent, or (e) commence a voluntary case under the Federal bankruptcy laws of the United States of America or file a voluntary petition or answer seeking reorganization, an arrangement with creditors or an order for relief or seeking to take advantage of any insolvency law or file an answer admitting the material allegations of a petition filed against it in any bankruptcy, reorganization or insolvency proceeding; or corporate action shall be taken by it for the purpose of effecting any of the foregoing; or if without the application, approval or consent of the Borrower, a proceeding shall be instituted in any court of competent jurisdiction, seeking in respect of the Borrower an adjudication in bankruptcy, reorganization, dissolution, winding up, liquidation, a composition or arrangement with creditors, a readjustment of debts, the appointment of a trustee, receiver, liquidator or custodian or the like of the Borrower or of all or any substantial part of its assets, or other like relief in respect thereof under any bankruptcy or insolvency law, and, if such proceeding is being contested by the Borrower in good faith, the same shall continue undismissed, or pending and unstayed, for any period of 90 consecutive days.
Section 7.2. Remedies on Default. (A) Whenever any Event of Default shall have occurred, the Trustee, or the Authority where so provided herein, may take any one or more of the following actions:
(1) The Trustee, as and to the extent provided in Article VIII of the Indenture, may cause all amounts payable under the Financing Documents to be immediately due and payable without notice or demand of any kind, whereupon the same shall become immediately due and payable.
(2) The Authority, without the consent of the Trustee or any Bondholder, may proceed to enforce the obligations of the Borrower to the Authority under this Agreement.
(3) The Trustee may take whatever action at law or in equity it may have to collect the amounts then due and thereafter to become due, or to enforce the performance or observance of the obligations, agreements, and covenants of the Borrower under the Financing Documents.
(B) In the event that any Event of Default or any proceeding taken by the Authority (or by the Trustee on behalf of the Authority) thereon shall be waived or determined adversely to the Authority, then the Event of Default shall be annulled and the Authority and the Borrower shall be restored to their former rights hereunder, but no such waiver or determination shall extend to any subsequent or other default or impair any right consequent thereon.
Section 7.3 Remedies Upon Project Use Default. (A) If the Borrower shall fail to notify the Authority of the occurrence of any event set forth in Section 6.4(A) hereof within 60 days of the determination thereof as provided in Section 6.4(A), the Authority may, not later than one year after obtaining knowledge of such determination and so long as such failure is continuing, send a notice to the Trustee and the Borrower calling for the acceleration of all of the Borrower's obligations under the Financing Documents and for the redemption of all of the Bonds Outstanding. Any such notice (i) shall set forth in reasonable detail the event giving rise to the Borrower's obligation under Section 6.4(A), (ii) shall be accompanied by such evidence thereof as shall be acceptable to the Trustee, and (iii) shall specify the dates upon which (a) notice of redemption of the Bonds is to be given by the Trustee (which shall not be less than 180 days from the date of the notice being given to the Trustee by the Authority) and (b) the date redemption of Bonds is to occur (which shall be a date at least thirty days after notice of redemption is to be given by the Trustee).
(B) If, after receipt of notice from the Authority as provided in Section 6.4(B), the Borrower shall fail to select a date for redemption of all Outstanding Bonds, the Authority may, not earlier than 60 days prior to the date which is three years after the date notice was mailed to the Borrower as provided in Section 6.4(B), send a notice to the Trustee and the Borrower calling for the redemption of all of the Bonds then Outstanding. Any such notice shall specify the date that notice of redemption is to be given by the Trustee and the date that such redemption is to occur.
(C) On or before the redemption date specified by the Trustee in its notice of redemption pursuant to this Section, the Borrower shall pay, as a final loan payment hereunder, a sum sufficient, together with other funds on deposit with the Trustee and available for such purpose, to redeem all Bonds then Outstanding under the Indenture at 100% of the principal amount thereof plus accrued interest to the redemption date. The Borrower shall also pay or provide for all reasonable and necessary fees of the Trustee and any Paying Agent accrued and to accrue through the date of redemption of the Bonds and all other amounts due or to become due under the Financing Documents.
Section 7.4. No Duty to Mitigate Damages. Unless otherwise required by law, neither the Authority, the Trustee nor any Bondholder shall be obligated to do any act whatsoever or exercise any diligence whatsoever to mitigate the damages to the Borrower if an Event of Default shall occur.
Section 7.5. Remedies Cumulative. No remedy herein conferred upon or reserved to the Authority or the Trustee is intended to be exclusive of any other available remedy or remedies but each and every such remedy shall be cumulative and shall be in addition to every remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. Delay or omission to exercise any right or power accruing upon any default or failure by the Authority or the Trustee to insist upon the strict performance of any of the covenants and agreements herein set forth or to exercise any rights or remedies upon default by the Borrower hereunder shall not impair any such right or power or be considered or taken as a waiver or relinquishment for the future of the right to insist upon and to enforce, by injunction or other appropriate legal or equitable remedy, strict compliance by the Borrower with all of the covenants and conditions hereof, or of the right to exercise any such rights or remedies, if such default by the Borrower be continued or repeated.
ARTICLE VIII
PREPAYMENT PROVISIONS
Section 8.1. Optional Prepayment. (A) The Borrower shall have, and is hereby granted, the option to prepay its loan obligation and to cause the corresponding optional redemption of the Bonds pursuant to Section 2.4(A) of the Indenture at such times, in such amounts, and with such premium, if any, for such optional redemption as set forth in the forms of the Bonds, by delivering a written notice to the Trustee in accordance with Section 8.2 hereof, with a copy to the Authority, setting forth the amount to be prepaid, the amount of Bonds requested to be redeemed with the proceeds of such prepayment, and the date on which such Bonds are to be redeemed. Such prepayment must be sufficient to provide monies for the payment of interest and Redemption Price in accordance with the terms of the Bonds requested to be redeemed with such prepayment and all other amounts then due under the Financing Documents. In the event of any complete prepayment of its loan obligation, the Borrower shall, at the time of such prepayment, also pay or provide for the payment of all reasonable or necessary fees and expenses of the Authority, the Trustee and the Paying Agent accrued and to accrue through the final payment of all the Bonds. Any such prepayments shall be applied to the redemption of Bonds in the manner provided in Section 2.4(A) of the Indenture, and credited against payments due hereunder in the same manner.
(B) The Borrower shall have, and is hereby granted, the option to prepay its loan obligation in full at any time without premium if any of the following events shall have occurred, as evidenced in each case by the filing with the Trustee of a certificate of an Authorized Representative of the Borrower to the effect that one of such events has occurred and is continuing, and describing the same:
(1) Damage or destruction to any of the Plants or the Project to
such extent that in the opinion of the Borrower (expressed in a resolution
adopted by the Board of Directors of the Borrower (a "Board Resolution"))
and of an architect or engineer acceptable to the Borrower (who may be an
employee of the Borrower), both filed with the Authority and the Trustee,
(1) any of the Plants or the Project, as the case may be, cannot be
reasonably repaired, rebuilt, or restored within a period of six (6) months
to their condition immediately preceding such damage or destruction, or (2)
normal operations are thereby prevented from being carried on at any of the
Plants for a period of not less than six (6) months.
(2) Loss of title to or use of a substantial part of any of the Plants or the Project as a result of the exercise of the power of eminent domain which, in the opinion of the Borrower (expressed in a Board Resolution) and of an architect or engineer acceptable to the Borrower (who may be an employee of the Borrower), both filed with the Authority and the Trustee, prevents or is likely to prevent normal operations from being carried on at any of the Plants for a period of not less than six (6) months.
(3) A substantial part of any of the Plants or the Project shall become obsolete in the opinion of the Borrower (expressed in a Board Resolution).
(4) A change in the Constitution of the State of Connecticut or of the United States of America or legislative or executive action (whether local, state, or federal) or a final decree, judgment or order of any court or administrative body (whether local, state, or federal) that causes this Agreement to become void or unenforceable or impossible of performance in accordance with the intent and purpose of the parties as expressed herein or, imposes unreasonable burdens or excessive liabilities upon the Borrower with respect to any of the Plants or the Project or the operation thereof.
(5) The operation of any of the Plants or the Project shall have been enjoined or shall otherwise have been prohibited by any order, decree, rule or regulation of any court or of any local, state, or federal regulatory body, administrative agency or other governmental body for a period of not less than six (6) months.
(6) Changes which the Borrower cannot reasonably control in the economic availability of fuel, materials, supplies, labor, equipment, or other properties or things necessary for the efficient operation of any of the Plants or the Project shall have occurred which, in the judgment of the Borrower (expressed in a Board Resolution), render the continued operation of any of the Plants uneconomical.
In any such case the final loan payment shall be a sum sufficient, together with other funds deposited with Trustee and available for such purpose, to redeem all Bonds then outstanding under the Indenture at the redemption price of 100% of the principal amount thereof plus accrued interest to the redemption date or dates and all other amounts then due under the Financing Documents, and the Borrower shall also pay or provide for all reasonable or necessary fees and expenses of the Trustee and Paying Agent and the Remarketing Agent accrued and to accrue through final payment for the Bonds. The Borrower shall deliver a written notice to the Trustee, with a copy to the Authority, requesting the redemption of the Bonds under the Indenture, which notice shall have attached thereto the applicable certificate of the Authorized Representative of the Borrower. The Borrower's right to so request the redemption of the Bonds upon the occurrence of any single event listed in this Section 8.1(B) shall expire six (6) months, and any such redemption shall occur within nine (9) months, after such event occurs.
Section 8.2. Notice by the Borrower of Optional Prepayment. The
Borrower shall exercise its option to prepay its loan obligation pursuant
to Section 8.1(A) or (B) by giving written notice signed by an Authorized
Representative of the Borrower to the Trustee, the Authority, the Paying
Agent, and the Remarketing Agent at least five (5) days before the
prepayment date if Bonds to be redeemed with the amounts to prepaid
pursuant to the Indenture are then in the Flexible Mode, and forty-five
(45) days before the prepayment date if Bonds to be redeemed with the
amounts so prepaid pursuant to the Indenture are then in any other Mode.
Section 8.3. Mandatory Prepayment on Taxability. The Borrower shall pay or cause the prepayment of its loan obligation following a Determination of Taxability in the manner provided in Section 6.3 of this Agreement.
Section 8.4. Mandatory Prepayment Upon Occurrence of Certain Events. The Borrower shall pay or cause the prepayment of its loan obligation, prior to the maturity of the Bonds, on a date selected by the Borrower, which date shall be not later than three years after the date of mailing to the Borrower of notice from the Authority of the Authority's election to accelerate the Borrower's loan obligation hereunder as provided in Sections 6.4 and 7.3 hereof.
ARTICLE IX
GENERAL
Section 9.1. Indenture. (A) Monies received from the sale of the Bonds and all loan payments made by the Borrower and all other monies received by the Authority or the Trustee under the Financing Documents shall be applied solely and exclusively in the manner and for the purposes expressed and specified in the Indenture and in the Bonds and as provided in this Agreement.
(B) The Borrower shall have and may exercise all the rights, powers and authority given the Borrower in the Indenture and in the Bonds, and the Indenture and the Bonds shall not be modified, altered or amended in any manner which adversely affects such rights, powers and authority or otherwise adversely affects the Borrower without the prior written consent of the Borrower.
Section 9.2. Benefit of and Enforcement by Bondholders. The Authority and the Borrower agree that this Agreement is executed in part to induce the purchase by others of the Bonds and for the further securing of the Bonds, and accordingly that all covenants and agreements on the part of the Authority and the Borrower as to the amounts payable with respect to the Bonds hereunder are hereby declared to be for the benefit of the holders from time to time of the Bonds and may be enforced as provided in the Indenture on behalf of the Bondholders by the Trustee.
Section 9.3. Force Majeure. In case by reason of force majeure either party hereto shall be rendered unable wholly or in part to carry out its obligations under this Agreement, then except as otherwise expressly provided in this Agreement, if such party shall give notice and full particulars of such force majeure in writing to the other party within a reasonable time after occurrence of the event or cause relied on, the obligations of the party giving such notice, other than the obligation of the Borrower to make the payments required under the terms hereof or of the Note, so far as they are affected by such force majeure, shall be suspended during the continuance of the inability then claimed which shall include a reasonable time for the removal of the effect thereof, but for no longer period, and such parties shall endeavor to remove or overcome such inability with all reasonable dispatch. The term "force majeure", as employed herein, means acts of God, strikes, lockouts or other industrial disturbances, acts of the public enemy, orders of any kind of the Government of the United States, of the State or any civil or military authority, insurrections, riots, epidemics, landslides, lightning, earthquakes, volcanoes, fires, hurricanes, tornadoes, storms, floods, washouts, droughts, arrests, restraining of government and people, civil disturbances, explosions, partial or entire failure of utilities, shortages of labor, material, supplies or transportation, or any other similar or different cause not reasonably within the control of the party claiming such inability. It is understood and agreed that the settlement of existing or impending strikes, lockouts or other industrial disturbances shall be entirely within the discretion of the party having the difficulty and that the above requirements that any force majeure shall be reasonably beyond the control of the party and shall be remedied with all reasonable dispatch shall be deemed to be fulfilled even though such existing or impending strikes, lockouts and other industrial disturbances may not be settled and could have been settled by acceding to the demands of the opposing person or persons.
Section 9.4. Amendments. This Agreement may be amended only with the concurring written consent of the Trustee and, if required by the Indenture, of the owners of the Bonds given in accordance with the provisions of the Indenture.
Section 9.5. Notices. All notices, certificates or other
communications hereunder shall be sufficiently given and shall be deemed
given when delivered or when mailed by registered or certified mail,
postage prepaid, addressed as follows: if to the Authority, at 845 Brook
Street, Rocky Hill, Connecticut 06067, Attention: Program Manager - Loan
Administration; if to the Borrower, c/o Northeast Utilities Service Company
at 107 Selden Street, Berlin, Connecticut 06037, Attention: Assistant
Treasurer; if to the Remarketing Agent, Goldman Sachs & Co., 85 Broad
Street, New York, New York 10004, Attention: Municipal Bond Department; if
to the Paying Agent, Shawmut Bank Connecticut, National Association, 777
Main Street, Hartford, Connecticut 06115, Attention: Corporate Trust
Department; and if to the Trustee, Shawmut Bank Connecticut, National
Association, 777 Main Street, Hartford, Connecticut 06115, Attention:
Corporate Trust Department. A duplicate copy of each notice, certificate
or other communication given hereunder by either the Authority or the
Borrower to the other shall also be given to the Trustee. The Authority,
the Borrower, the Remarketing Agent, the Paying Agent and the Trustee may,
by notice given hereunder, designate any further or different addresses to
which subsequent notices, certificates or other communications shall be
sent.
Section 9.6. Prior Agreements Superseded. This Agreement, together with all agreements executed by the parties concurrently herewith or in conjunction with the sale of the Bonds, shall completely and fully supersede all other prior understandings or agreements, both written and oral, between the Authority and the Borrower relating to the lending of money and the Project, including those contained in any commitment letter executed in anticipation of the issuance of the Bonds.
Section 9.7. Execution of Counterparts. This Agreement may be executed simultaneously in several counterparts each of which shall be an original and all of which shall constitute but one and the same instrument.
Section 9.8. Time. All references to times of day in this Agreement are references to New York City time.
IN WITNESS WHEREOF, the Authority has caused this Agreement to be executed in its corporate name by a duly Authorized Representative, and the Borrower has caused this Agreement to be executed in its corporate name by its duly authorized officer all as of the date first above written.
Connecticut Development Authority
By /s/ Stanley R. Killinger
Name: Stanley R. Killinger
Authorized Representative
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Western Massachusetts Electric Company
By /s/ Bruce F. Garelick Name: Bruce F. Garelick Title: Assistant Treasure |
APPENDIX B
Description of Project Equipment and Project Realty
Exhibit 4.4.14
LETTER OF CREDIT
AND REIMBURSEMENT AGREEMENT
Dated as of September 1, 1993
Among
WESTERN MASSACHUSETTS
ELECTRIC COMPANY
as Account Party
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH
as Issuing Bank and as Agent
and
THE PARTICIPATING BANKS
REFERRED TO HEREIN
Relating to
Connecticut Development Authority
$53,800,000 Pollution Control Revenue Refunding Bonds
(Western Massachusetts Electric Company Project - 1993A Series)
TABLE OF CONTENTS
Section Page
PRELIMINARY STATEMENT
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01 Certain Defined Terms . . . . . . . . . . 2
1.02 Computation of Time Periods . . . . . . . 13
1.03 Accounting Terms. . . . . . . . . . . . . 14
1.04 Computations of Outstandings. . . . . . . 14
ARTICLE II
THE LETTER OF CREDIT
2.01 The Letter of Credit. . . . . . . . . . . 14
2.02 Termination of the Commitments. . . . . . 14
2.03 Commissions and Fees . . . . . . . . . . 14
2.04 Reinstatement of the Letter of Credit . . 15
2.05 Extension of the Stated Termination Date. 16
ARTICLE III
REIMBURSEMENT AND ADVANCES
3.01 Reimbursement on Demand . . . . . . . . . 17
3.02 Advances . . . . . . . . . . . . . . . . 17
3.03 Interest on Advances. . . . . . . . . . . 18
3.04 Prepayment of Advances. . . . . . . . . . 19
3.05 Participation; Reimbursement of Issuing
Bank. . . . . . . . . . . . . . . . . 19
ARTICLE IV
PAYMENTS
4.01 Payments and Computations . . . . . . . . 22
4.02 Default Interest. . . . . . . . . . . . . 24
4.03 Yield Protection. . . . . . . . . . . . . 24
4.04 Sharing of Payments, Etc. . . . . . . . . 26
4.05 Taxes . . . . . . . . . . . . . . . . . . 27
4.06 Obligations Absolute. . . . . . . . . . . 29
4.07 Evidence of Indebtedness . . . . . . . . 30
ARTICLE V
CONDITIONS PRECEDENT
5.01 Conditions Precedent to the Issuance of
the Letter of Credit . . . . . . . . . . 30
5.02 Additional Conditions Precedent to the
Issuance the Letter of Credit . . . . . . 34
5.03 Conditions Precedent to Initial Advances. 34
5.04 Conditions Precedent to Term Advances . . 35
5.05 Reliance on Certificates. . . . . . . . . 36
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.01 Representations and Warranties of the
Account Party . . . . . . . . . . . . . . 36
ARTICLE VII
COVENANTS OF THE ACCOUNT PARTY
7.01 Affirmative Covenants . . . . . . . . . . 40
7.02 Negative Covenants. . . . . . . . . . . . 43
7.03 Reporting Obligations . . . . . . . . . . 48
ARTICLE VIII
DEFAULTS
8.01 Events of Default . . . . . . . . . . . . 51
8.02 Remedies Upon Events of Default . . . . . 54
ARTICLE IX
THE AGENT, THE PARTICIPATING BANKS
AND THE ISSUING BANK
9.01 Authorization of Agent; Actions of Agent
and Issuing Bank . . . . . . . . . . . . 55
9.02 Reliance, Etc.. . . . . . . . . . . . . . 55
9.03 The Agent, the Issuing Bank and Affiliates 56
9.04 Participating Bank Credit Decision. . . . 56
9.05 Indemnification . . . . . . . . . . . . . 57
9.06 Successor Agent . . . . . . . . . . . . . 57
9.07 Issuing Bank. . . . . . . . . . . . . . . 58
ARTICLE X
MISCELLANEOUS
10.01 Amendments, Etc.. . . . . . . . . . . . . 58
10.02 Notices, Etc. . . . . . . . . . . . . . . 59
10.03 No Waiver of Remedies . . . . . . . . . . 60
10.04 Costs, Expenses and Indemnification . . . 60
10.05 Right of Set-Off. . . . . . . . . . . . . 62
10.06 Binding Effect; Assignments and
Participants . . . . . . . . . . . . . 63
10.07 Relation of the Parties; No Beneficiary . 64
10.08 Issuing Bank Not Liable . . . . . . . . . 65
10.09 Confidentiality . . . . . . . . . . . . . 65
10.10 Waiver of Jury Trial. . . . . . . . . . . 66
10.11 Governing Law . . . . . . . . . . . . . . 66
10.12 Execution in Counterparts . . . . . . . . 67
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SCHEDULES
Schedule I - Applicable Lending Offices Schedule II - Pending Actions
EXHIBITS
Exhibit 1.01A - Form of Letter of Credit
Exhibit 1.01B - Form of Participation Assignment
Exhibit 1.01C - Form of Pledge Amendment
Exhibit 5.01A - Form of Opinion of Day, Berry & Howard,
counsel to the Account Party
Exhibit 5.01B - Form of Opinion of King & Spalding,
special New York counsel to the Agent and the Issuing
Bank
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LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
Dated as of September 1, 1993
THIS LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT (this Agreement )
is made by and among:
(i) WESTERN MASSACHUSETTS ELECTRIC COMPANY, a corporation duly organized and validly existing under the laws of the Commonwealth of Massachusetts (the Account Party );
(ii) UNION BANK OF SWITZERLAND, NEW YORK BRANCH ( UBS ), as issuer
of the Letter of Credit (the Issuing Bank );
(iii) The Participating Banks (as hereinafter defined) from time to time party hereto; and
(iv) UBS as agent (together with any successor agent hereunder, the Agent) for such Participating Banks and the Issuing Bank.
PRELIMINARY STATEMENT
The Connecticut Development Authority (the Issuer) proposes to issue, pursuant to an Indenture of Trust, dated as of September 1, 1993 (as supplemented or amended from time to time with the written consent of the Issuing Bank, the Indenture ), made to Shawmut Bank Connecticut, National Association, as trustee (such entity, or its successor as trustee, being the Trustee ), $53,800,000 aggregate principal amount of its Pollution Control Revenue Refunding Bonds (Western Massachusetts Electric Company Project - 1993A Series) (the Bonds ). Pursuant to the Indenture and the Loan Agreement, dated as of September 1, 1993, between the Issuer and the Account Party (the Loan Agreement ), the Account Party has requested the Issuing Bank to issue its irrevocable letter of credit in favor of the Paying Agent (as defined below), in substantially the form of Exhibit 1.01A hereto (such letter of credit, as it may from time to time be extended or modified pursuant to the terms of this Agreement, being the Letter of Credit ), in the amount of $54,596,000 (the Stated Amount ), of which (i) $53,800,000 shall support the payment of principal of the Bonds (or the portion of the purchase or redemption price of the Bonds corresponding to principal), (ii) $796,000 shall support the payment of up to 45 days' interest on the principal amount of the Bonds (or the portion of the purchase or redemption price of the Bonds corresponding to interest), computed at a maximum interest rate of 12% per annum on the basis of the actual days elapsed and a year of 365 or 366 days (as applicable) and (iii) $0.00 shall support the payment of premium on the Bonds. The Issuing Bank has agreed to issue the Letter of Credit subject to the terms and conditions set forth herein (including the terms and conditions relating to the rights and obligations of the Participating Banks).
NOW, THEREFORE, in consideration of the premises and in order to induce the Issuing Bank to issue the Letter of Credit and the Participating Banks to participate in the Letter of Credit and make advances hereunder, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. In addition to the terms defined in the Preliminary Statement hereto, as used in this Agreement, the following terms shall have the following meanings (such meanings to be applicable to the singular and plural forms of the terms defined):
Advances means Initial Advances and Term Advances, without differentiation; individually, an Advance.
Affiliate means, with respect to any Person, any other Person directly or indirectly controlling (including, but not limited to all directors and officers of such Person), controlled by, or under direct or indirect common control with such Person. A Person shall be deemed to control another entity if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such entity, whether through the ownership of voting securities, by contract or otherwise.
Alternate Base Rate means a fluctuating interest rate per annum equal at all times to the highest from time to time of:
(a) the rate of interest announced publicly by UBS in New York, New York, from time to time, as UBS's prime rate; and
(b) 1/2 of one percent per annum above the Federal Funds Rate from time to time.
Each change in the Alternate Base Rate shall take effect concurrently with any change in such prime rate or Federal Funds Rate, as the case may be.
Applicable Commission means, for any period, the percentage set forth below corresponding to the ratings then assigned by Moody's and S&P to the Account Party's first mortgage bonds (or other senior secured debt) not supported by letters of credit or other credit enhancement facilities, the Applicable Commission to change as when such ratings change; in the event of a split rating, the lower rating shall govern:
Moody's S&P Applicable Commission A3 or Higher A- or Higher 0.35% Baa1 and Baa2 BBB+ and BBB 0.40% Baa3 BBB- 0.55% Ba1 or Below BB+ or Below 0.70% |
Applicable Lending Office means, with respect to each Participating Bank, such Participating Bank's Domestic Lending Office as specified opposite such Participating Bank's name on Schedule I hereto (in the case of a Participating Bank initially party to this Agreement) or in the Participation Assignment pursuant to which such Participating Bank became a Participating Bank (in the case of any other Participating Bank), or such other office or affiliate of such Participating Bank as such Participating Bank may from time to time specify to the Account Party and the Agent.
Available Amount in effect at any time means the maximum
aggregate amount available to be drawn at such time under the Letter of
Credit, the determination of such maximum amount to assume compliance with
all conditions for drawing and no reduction for (i) any amount drawn by the
Paying Agent to make a regularly scheduled payment of interest on the Bonds
(unless such amount will not be reinstated under the Letter of Credit) or
(ii) any amount not available to be drawn because Bonds are held by or for
the account of the Account Party and/or in pledge for the benefit of the
Issuing Bank.
Bonds has the meaning assigned to that term in the Preliminary Statement.
Business Day means a day of the year that is not a Saturday or Sunday or a day on which banks are authorized to close in New York City and, if the applicable Business Day relates to any action to be taken by, or notice furnished to or by, or payment to be made to or by, the Trustee, the Paying Agent or the Remarketing Agent, is a day on which (A) banks located in Hartford, Connecticut and New York, New York are not required or authorized to remain closed, (B) banking institutions in all of the cities in which the principal offices of the Issuing Bank, the Trustee, the Paying Agent and, if applicable, the Remarketing Agent are located are not required or authorized to remain closed and (C) the New York Stock Exchange, Inc. is not closed.
Closing Date means the Business Day upon which each of the conditions precedent enumerated in Sections 5.01 and 5.02 hereof shall be fulfilled to the satisfaction of the Agent, the Issuing Bank, the Participating Banks and the Account Party. All transactions contemplated to occur on the Closing Date shall occur contemporaneously on or prior to November 15, 1993, at the offices of King & Spalding, 120 West 45th Street, New York, New York 10036, at 10:00 A.M. (New York City time), or at such other place and time as the parties hereto may mutually agree.
Collateral means all of the collateral in which liens, mortgages or security interests are purported to be granted by any or all of the Security Documents.
Commitment means, for each Participating Bank, such Participating Bank's Participation Percentage of the Available Amount. Commitments shall refer to the aggregate of the Commitments.
Confidential Information has the meaning assigned to that term in Section 10.09 hereof.
Consolidated Capitalization means, for any period, the
aggregate of all amounts that would, in accordance with generally accepted
accounting principles and consistent with those applied in the preparation
of the Account Party's consolidated financial statements included in its
Annual Report on Form 10-K for the year ended December 31, 1992, appear on
the Account Party's consolidated balance sheet as the sum of (i) the total
principal amount of all long-term Debt of the Account Party and its
Subsidiaries (excluding, however, Debt not to exceed $400,000,000 existing
under any nuclear fuel financing so long as the proceeds of such Debt are
used solely to finance the purchase and carrying of nuclear fuel and so
long as the appropriate regulatory authorities have not taken any action
which would not allow the costs with respect to such financing to be
recovered through the rate making process), (ii) the aggregate of the par
value of, or stated capital represented by, the outstanding shares of all
classes of common and preferred shares of the Account Party and its
Subsidiaries, (iii) the consolidated surplus of the Account Party and its
Subsidiaries, paid-in, earned and other, if any, and (iv) the excess, if
any, of (A) the aggregate unpaid principal amount of all short-term Debt of
the Account Party and its Subsidiaries over (B) 10% of the sum of clauses
(i), (ii) and (iii) above.
Consolidated Common Equity means, for any period, an amount equal to the sum of the aggregate of the par value of, or stated capital represented by, the outstanding common shares of the Account Party and its Subsidiaries and the surplus, paid-in, earned and other, if any, of the Account Party and its Subsidiaries as determined on a consolidated basis in accordance with generally accepted accounting principles.
Credit Termination Date means the date on which the Letter of Credit shall terminate in accordance with its terms.
Debt means, for any Person, without duplication, (i) indebtedness of such Person for borrowed money, including but not limited to obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (ii) obligations of such Person to pay the deferred purchase price of property or services (excluding any obligation of such Person to the United States Department of Energy or its successor with respect to disposition of spent nuclear fuel burned prior to April 3, 1983), (iii) obligations of such Person as lessee under leases which shall have been or should be, in accordance with generally accepted accounting principles, recorded as capital leases, (iv) obligations under direct or indirect guaranties in respect of, and obligations (contingent or otherwise) to purchase or otherwise acquire, or otherwise to assure a creditor against loss in respect of, indebtedness or obligations of others of the kinds referred to in clauses (i) through (iii), above, and (v) liabilities in respect of unfunded vested benefits under ERISA Plans.
Default Rate means a fluctuating interest rate equal at all times to two percent (2.00%) per annum above the Alternate Base Rate in effect from time to time.
ERISA means the Employee Retirement Income Security Act of 1974, as amended from time to time.
ERISA Affiliate means, with respect to any Person, any trade or business (whether or not incorporated) which is a commonly controlled entity of the Account Party within the meaning of the regulations under Section 414 of the Internal Revenue Code of 1986, as amended from time to time.
ERISA Multiemployer Plan means a multiemployer plan subject to Title IV of ERISA.
ERISA Plan means an employee benefit plan (other than an ERISA Multiemployer Plan) maintained for employees of the Account Party or any ERISA Affiliate and covered by Title IV of ERISA.
ERISA Plan Termination Event means (i) a Reportable Event described in Section 4043 of ERISA and the regulations issued thereunder (other than a Reportable Event not subject to the provision for 30-day notice to the PBGC under such regulations) with respect to an ERISA Plan or an ERISA Multiemployer Plan, or (ii) the withdrawal of the Account Party or any of its ERISA Affiliates from an ERISA Plan or an ERISA Multiemployer Plan during a plan year in which it was a substantial employer as defined in Section 4001(a)(2) of ERISA, or (iii) the filing of a notice of intent to terminate an ERISA Plan or an ERISA Multiemployer Plan or the treatment of an ERISA Plan or an ERISA Multiemployer Plan under Section 4041 of ERISA, or (iv) the institution of proceedings to terminate an ERISA Plan or an ERISA Multiemployer Plan by the PBGC, or (v) any other event or condition which might constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any ERISA Plan or ERISA Multiemployer Plan.
Event of Default has the meaning assigned to that term in
Section 8.01.
Federal Funds Rate means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published on the next succeeding Business Day, the average of the quotations for such day on such transactions received by the Agent from three Federal funds brokers of recognized standing selected by it.
FERC means the Federal Energy Regulatory Commission.
Governmental Approval means any authorization, consent, approval, license, permit, certificate, exemption of, or filing or registration with, any governmental authority or other legal or regulatory body (including, without limitation, the Securities and Exchange Commission, the FERC, the Nuclear Regulatory Commission, the Massachusetts Department of Public Utilities and the Connecticut Department of Public Utility Control), required in connection with either (i) the execution, delivery or performance of any Loan Document or Related Document or the grant and perfection of any lien or security interest contemplated by the Security Documents or (ii) the nature of the Account Party's or any Principal Subsidiary's business as conducted or the nature of the property owned or leased by it.
Hazardous Substance means any waste, substance or material identified as hazardous, dangerous or toxic by any office, agency, department, commission, board, bureau or instrumentality of the United States of America or of the State or locality in which the same is located having or exercising jurisdiction over such waste, substance or material.
Indemnified Person has the meaning assigned to that term in
Section 10.04(b) hereof.
Indenture has the meaning assigned to that term in the Preliminary Statement.
Indenture Documents means, collectively, the Indenture and the Loan Agreement, together with all amendments, modifications and supplements thereto; individually, an Indenture Document .
Initial Advance has the meaning assigned to that term in
Section 3.02(a) hereof.
Initial Repayment Date has the meaning assigned to that term in Section 3.02(a) hereof.
Interest Component has the meaning assigned to that term in
the Letter of Credit.
Interest Drawing has the meaning assigned to that term in
the Letter of Credit.
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Issuer has the meaning assigned to that term in the Preliminary Statement.
Issuer Resolution means the resolution adopted by the Issuer that authorized the issuance of the Bonds, approved the terms and provisions of the Bonds, and approved those of the documents related to the Bonds to which the Issuer is a party.
Letter of Credit has the meaning assigned to that term in the Preliminary Statement.
Lien has the meaning assigned to that term in Section 7.02(a) hereof.
Loan Agreement has the meaning assigned to that term in the
Preliminary Statement.
Loan Documents means this Agreement and the Security
Documents.
Majority Lenders means on any date of determination, (i)
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the Issuing Bank and (ii) Participating Banks who, collectively, on such date, have Participation Percentages in the aggregate of at least 66-2/3%. Determination of those Participating Banks satisfying the criteria specified above for action by the Majority Lenders shall be made by the Agent and shall be conclusive and binding on all parties absent manifest error.
Moody's means Moody's Investors Service, Inc. or any successor thereto.
NU means Northeast Utilities, an unincorporated voluntary business association organized under the laws of the Commonwealth of Massachusetts.
Participant shall have the meaning assigned to that term in
Section 10.06(b) hereof.
Participating Banks means the Persons listed on the signature pages hereof following the heading Participating Banks and any other Person who becomes a party hereto pursuant to Section 10.06 hereof.
Participation Assignment means a participation assignment entered into pursuant to Section 10.06 hereof by any Participating Bank and an assignee, in substantially the form of Exhibit 1.01B hereto.
Participation Percentage means, as of any date of
determination (i) with respect to a Participating Bank initially a party
hereto, the percentage set forth opposite such Participating Bank's name on
the signature pages hereof, except as provided in clause (iii), below, (ii)
with respect to a Participating Bank that became a party hereto by
operation of Section 10.06(a) hereof, the Participation Percentage stated
to be assumed by such assignee Participating Bank in the relevant
Participation Assignment, except as provided in clause (iii), below, and
(iii) with respect to any Participating Bank described in clauses (i) and
(ii), above, that assigns a percentage of its interests in accordance with
Section 10.06(a) hereof, its Participation Percentage as reduced by the
percentage so assigned.
Paying Agent means (i) Shawmut Bank Connecticut, National Association, as the initial paying agent for the Bonds under the Indenture Documents, and (ii) any successor paying agent for the Bonds under the Indenture Documents.
PBGC means the Pension Benefit Guaranty Corporation (or any successor entity) established under ERISA.
Person means an individual, partnership, corporation (including a business trust), joint stock company, trust, estate, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof.
Pledge Agreement means the Pledge Agreement, dated as of September 1, 1993, by the Account Party in favor of the Issuing Bank for the benefit of the Agent and the Participating Banks, in substantially the form of Exhibit 1.01C hereto, and as the same may from time to time be amended, modified or supplemented.
Pledged Bonds shall have the meaning assigned to that term in the Pledge Agreement.
Premium Component has the meaning assigned to that term in
the Letter of Credit.
Principal Component has the meaning assigned to that term
in the Letter of Credit.
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Principal Subsidiary means a Subsidiary, whether owned directly or indirectly by the Account Party, which, with respect to the Account Party and its Subsidiaries taken as a whole, represents a material portion of the Account Party's consolidated assets or consolidated net income (or loss), (it being understood that, as of the date of this Agreement, the Account Party has no Principal Subsidiaries).
Purchase Contract means the Bond Purchase Agreement, dated September 21, 1993, among the Issuer, the Account Party and Goldman, Sachs & Co., Individually and as Representative of Advest, Inc., Greenwich Partners, Inc. and U.S. Securities, Inc.
Recipient has the meaning assigned to that term in Section 10.09 hereto.
Regulatory Transaction means any merger or consolidation of the Account Party with or into, or any purchase or acquisition by the Account Party of the assets of (and any related assumption by the Account Party of the liabilities of) any utility company or utility-related company, if such transaction is undertaken pursuant to an order or request of, or otherwise in fulfillment of the stated goals of, a utility regulatory agency having jurisdiction over NU or any of its Subsidiaries.
Regulatory Transaction Entity means any utility company or utility-related company (other than the Account Party) that is the subject of a Regulatory Transaction.
Related Documents means the Letter of Credit, the Bonds, the Indenture Documents, any Remarketing Agreement and the Purchase Contract.
Remarketing Agent has the meaning assigned to that term in the Indenture Documents.
Remarketing Agreement means (i) the Remarketing Agreement,
dated as of September 1, 1993, among the Issuer, the Account Party and
Goldman, Sachs & Co., as the same may be amended from time to time; and
(ii) any successor remarketing agreement between the Account Party and a
successor Remarketing Agent as shall be in effect from time to time in
accordance with the terms of the Indenture Documents.
S&P means Standard and Poor's Corporation or any successor thereto.
Second Mortgage means the Open End Mortgage and Trust Agreement made as of October 1, 1986, by and between the Account Party and Bank of Boston Connecticut, as trustee, as amended through the date hereof to secure the obligations of the Account Party hereunder and as the same may be further amended, modified or supplemented from time to time.
Security Documents means the Pledge Agreement and the Indenture Documents, but shall not include the Second Mortgage.
Stated Amount has the meaning assigned to that term in the Preliminary Statement hereto.
Stated Termination Date means the expiration date specified in clause (i) of the first paragraph of Paragraph (1) of the Letter of Credit, as such date may be extended pursuant to Section 2.05 hereof.
Subsidiary shall mean, with respect to any Person (the Parent ), any corporation, association or other business entity of which securities or other ownership interests representing 50% or more of the ordinary voting power are, at the time as of which any determination is being made, owned or controlled by the Parent or one or more Subsidiaries of the Parent or by the Parent and one or more Subsidiaries of the Parent.
Tender Drawing has the meaning assigned to that term in the
Letter of Credit.
Term Advance has the meaning assigned to that term in
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Section 3.02(b) hereof.
Term Borrowing means a borrowing consisting of Term Advances made on the same day by the Participating Banks, ratably in accordance with their respective Participation Percentages.
Termination Date means the Credit Termination Date or the earlier date of termination of the Commitments pursuant to Sections 2.02 or 8.02 hereunder.
Trustee has the meaning assigned to that term in the Preliminary Statement hereto.
Unmatured Default means the occurrence and continuance of an event which, with the giving of notice or lapse of time or both, would constitute an Event of Default.
WMECO Indenture has the meaning assigned to that term in
Section 7.02(a)(i) hereof.
SECTION 1.02. Computation of Time Periods. In the computation of periods of time under this Agreement any period of a specified number of days or months shall be computed by including the first day or month occurring during such period and excluding the last such day or month. In the case of a period of time from a specified date to or until a later specified date, the word from means from and including and the words to and until each means to but excluding .
SECTION 1.03. Accounting Terms. All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles applied on a basis consistent with the application employed in the preparation of the Account Party's consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 1992.
SECTION 1.04. Computations of Outstandings. Whenever reference is made in this Agreement to the principal amount outstanding on any date under this Agreement, such reference shall refer to the sum of (i) the Available Amount on such date, (ii) the aggregate principal amount of all Advances outstanding on such date and (iii) the aggregate amount of all demand loans under Section 3.01 hereunder on such date, in each case after giving effect to all transactions to be made on such date and the application of the proceeds thereof.
ARTICLE II
THE LETTER OF CREDIT
SECTION 2.01. The Letter of Credit. The Issuing Bank agrees, on the terms and conditions hereinafter set forth (including, without limitation, the applicable conditions precedent set forth in Article V hereof), to issue the Letter of Credit to the Paying Agent, upon not less than three Business Days prior notice from the Account Party, on the Closing Date.
SECTION 2.02. Termination of the Commitments. The obligation of the Issuing Bank to issue the Letter of Credit shall automatically terminate if not issued on or before 5:00 P.M. (New York City time) on November 15, 1993.
SECTION 2.03. Commissions and Fees. (a) The Account Party hereby agrees to pay to the Agent, for the account of the Participating Banks ratably in accordance with their respective Participation Percentages, a letter of credit commission on the Available Amount in effect from time to time from the date of issuance of the Letter of Credit until the Termination Date (disregarding for such purpose any temporary diminution thereof arising from drawings under the Letter of Credit to pay interest (or purchase price corresponding to interest) on the Bonds, regardless of whether the amount so drawn shall be thereafter reinstated), at a rate per annum equal to the Applicable Commission, payable quarterly in arrears on the first day of March, June, September and December in each year, commencing on the first such date to occur following the date of issuance of the Letter of Credit, and on the Credit Termination Date.
(b) The Account Party also agrees to pay to the Agent, for the account of the Agent and the Issuing Bank, such other fees as may be agreed upon from time to time by the Account Party and the Agent and the Issuing Bank.
SECTION 2.04. Reinstatement of the Letter of Credit. (a) The Interest Component and the Principal Component shall, from time to time, be reinstated by the Issuing Bank in accordance with, and only to the extent provided in, the Letter of Credit. In no event shall reductions in the Premium Component be reinstated.
(b) Interest Component. With respect to reinstatement of reductions in the Interest Component resulting from Interest Drawings:
(i) The Issuing Bank may only deliver to the Paying Agent any notice of non-reinstatement pursuant to Paragraph 5(i)(A) of the Letter of Credit if (A) the Issuing Bank and/or the Participating Banks have not been reimbursed in full by the Account Party for one or more drawings, together with interest, if any, owing thereon pursuant to this Agreement, or (B) an Event of Default has occurred and is then continuing.
(ii) If, subsequent to any such delivery of a notice of non- reinstatement, the circumstances giving rise to the delivery of such notice of non-reinstatement shall have ceased to exist (whether as a result of reimbursement of unreimbursed drawings, or waiver or cure of an Event of Default, or otherwise), then, provided that no other Event of Default shall have occurred and be continuing, the Issuing Bank shall deliver to the Paying Agent, by hand delivery or facsimile transmission, a Notice of Reinstatement in the form of Exhibit 5 to the Letter of Credit reinstating that portion of the Interest Component in respect of which such notice of non-reinstatement was given.
(c) Principal Component. With respect to reinstatement of a reduction in the Principal Component resulting from any Tender Drawing, IF:
(i) such reduction has not been reinstated pursuant to Paragraph 5(ii)(A) of the Letter of Credit;
(ii) the Issuing Bank and/or the Participating Banks shall have been reimbursed by the Account Party for such Tender Drawing;
(iii) any demand loan(s) and Advance(s) made in respect of such Tender Drawing shall have been repaid by the Account Party, together with any interest thereon and any other amounts payable hereunder in connection therewith; AND
(iv) no Event of Default shall have occurred and then be continuing;
THEN, the Issuing Bank shall deliver to the Paying Agent, by hand delivery or facsimile transmission, a Notice of Reinstatement in the form of Exhibit 5 to the Letter of Credit reinstating the Principal Component to the extent of such Tender Drawing.
SECTION 2.05. Extension of the Stated Termination Date. Unless the Letter of Credit shall have previously expired in accordance with its terms, at least 60 days but not more than 90 days before each anniversary date of this Agreement, the Account Party may, by notice to the Agent (any such notice being irrevocable), request the Issuing Bank and the Participating Banks to extend the Stated Termination Date of the Letter of Credit for a period of one year. If the Account Party shall make such request, the Agent shall promptly inform the Issuing Bank and all of the Participating Banks and, no later than 15 days prior to such anniversary date, the Agent shall notify the Account Party in writing (with a copy of such notice to the Trustee and the Paying Agent) if the Issuing Bank and the Participating Banks consent to such request and the conditions of such consent (including conditions relating to legal documentation). If such consent is granted, the Stated Termination Date as theretofore in effect shall be extended for one year, such extension to take effect on such anniversary date. The granting of any such consent shall be in the sole and absolute discretion of the Issuing Bank and all of the Participating Banks, and if the Agent shall not so notify the Account Party, such lack of notification shall be deemed to be a determination not to consent to such request.
ARTICLE III
REIMBURSEMENT AND ADVANCES
SECTION 3.01. Reimbursement on Demand. Subject to the provisions of
Section 3.02 hereof, the Account Party hereby agrees to pay (whether with
the proceeds of Initial Advances made pursuant to this Agreement or
otherwise) to the Issuing Bank on demand (a) on and after each date on
which the Issuing Bank shall pay any amount under the Letter of Credit
pursuant to any draft, but only after so paid by the Issuing Bank, a sum
equal to such amount so paid (which sum shall constitute a demand loan from
the Issuing Bank to the Account Party from the date of such payment by the
Issuing Bank until so paid by the Account Party), plus (b) interest on any
amount remaining unpaid by the Account Party to the Issuing Bank under
clause (a), above, from the date such amount becomes payable on demand
until payment in full, at the Default Rate in effect from time to time. No
reinstatement of the Interest Component or the Principal Component despite
the failure by the Account Party to reimburse the Issuing Bank for any
previous drawing to pay interest on the Bonds shall limit or impair the
Account Party's obligations under this Section 3.01.
SECTION 3.02. Advances. Each Participating Bank agrees to make Initial Advances and Term Advances for the account of the Account Party from time to time upon the terms and subject to the conditions set forth in this Agreement.
(a) Initial Advances; Repayment of Initial Advances. If the
Issuing Bank shall honor any Tender Drawing and if the conditions precedent
set forth in Section 5.03 of this Agreement have been satisfied as of the
date of such honor, then, each Participating Bank's payment made to the
Issuing Bank pursuant to Section 3.05 hereof in respect of such Tender
Drawing shall be deemed to constitute an advance made for the account of
the Account Party by such Participating Bank (each such advance being an
Initial Advance made by such Participating Bank). Subject to Article VIII
of this Agreement, each Initial Advance and all interest thereon shall be
due and payable on the earlier to occur of (i) the date 30 days from the
date of such Initial Advance (such repayment date being the Initial
Repayment Date for such Initial Advance) and (ii) the Termination Date.
The Account Party may repay the principal amount of any Initial Advance
with (and to the extent of) the proceeds of a Term Advance made pursuant to
subsection (b), below, and may prepay Initial Advances in accordance with
Section 3.04 hereof.
(b) Term Advances; Repayment. Subject to the satisfaction of the conditions precedent set forth in Section 5.04 hereof and the other conditions of this subsection (b), each Participating Bank agrees to make one or more advances for the account of the Account Party ( Term Advances ) on each Initial Repayment Date in an aggregate principal amount equal to the amount of such Participating Bank's Initial Advances maturing on such Initial Repayment Date. All Term Advances comprising a single Term Borrowing shall be made upon written notice given by the Account Party to the Agent not later than 11:00 A.M. (New York City time) on the Business Day of such proposed Term Borrowing. The Agent shall notify each Participating Bank of the contents of such notice promptly after receipt thereof. Each such notice shall specify therein the date on which such Term Borrowing is to be made and the principal amount of Term Advances comprising such Term Borrowing. The proceeds of each Participating Bank's Term Advances shall be applied solely to the repayment of the Initial Advances made by such Participating Bank and shall in no event be made available to the Account Party. The principal amount of each Term Advance, together with all accrued and unpaid interest thereon, shall be due and payable on the earlier to occur of (x) the same calendar date occurring 35 months following the date upon which such Term Advance is made (or, if such month does not have a corresponding date, on the last day of such month) and (y) the Termination Date.
SECTION 3.03. Interest on Advances. The Account Party shall pay interest on the unpaid principal amount of each Advance from the date of such Advance until such principal amount is paid in full at a fluctuating interest rate per annum equal to the Alternate Base Rate in effect from time to time. The Account Party shall pay interest on each Advance quarterly in arrears on the first day of March, June, September and December in each year and on the Termination Date or the earlier date for repayment of such Advance (including the Initial Repayment Date therefor, in the case of an Initial Advance).
SECTION 3.04. Prepayment of Advances. (a) The Account Party shall have no right to prepay any principal amount of any Advances except in accordance with subsections (b) and (c) below.
(b) The Account Party may, upon at least one Business Day's notice to the Agent stating the proposed date and aggregate principal amount of the prepayment and the specific Initial Advances or Term Borrowing(s) to be prepaid, and if such notice is given, the Account Party shall, prepay, in whole or ratably in part, together with accrued interest to the date of such prepayment on the principal amount prepaid, the outstanding principal amount of (i) all Initial Advances made on the same date or (ii) all Term Advances comprising the same Term Borrowing, in each case as the Account Party shall designate in such notice; provided, however, that each partial prepayment shall be in an aggregate principal amount not less than $10,000,000, or, if less, the aggregate principal amount of all Advances then outstanding.
(c) Prior to or simultaneously with the resale of all of the Bonds purchased with the proceeds of a Tender Drawing, the Account Party shall prepay, or cause to be prepaid, in full, the then outstanding principal amount of all Initial Advances and of all Term Advances comprising the same Term Borrowing(s) arising pursuant to such Tender Drawing, together with all interest thereon to the date of such prepayment. If less than all of such Bonds are resold, then prior to or simultaneously with such resale the Account Party shall prepay or cause to be prepaid that portion of such Advances, together with all interest thereon to the date of such prepayment, equal to the then outstanding principal amount thereof multiplied by a fraction, the numerator of which shall be the principal amount of the Bonds resold and the denominator of which shall be the principal amount of all of the Bonds purchased with the proceeds of the relevant Tender Drawing.
SECTION 3.05. Participation; Reimbursement of Issuing Bank. (a)
The Issuing Bank hereby sells and transfers to each Participating Bank, and
each Participating Bank hereby acquires from the Issuing Bank, an undivided
interest and participation to the extent of such Participating Bank's
Participation Percentage in and to (i) the Letter of Credit, including the
obligations of the Issuing Bank under and in respect thereof and the
Account Party's reimbursement and other obligations in respect thereof and
(ii) each demand loan or deemed demand loan made by the Issuing Bank,
whether now existing or hereafter arising.
(b) If the Issuing Bank (i) shall not have been reimbursed in full for any payment made by the Issuing Bank under the Letter of Credit on the date of such payment or (ii) shall make any demand loan to the Account Party, the Issuing Bank shall promptly notify the Agent and the Agent shall promptly notify each Participating Bank of such non-reimbursement or demand loan and the amount thereof. Upon receipt of such notice from the Agent, each Participating Bank shall pay to the Issuing Bank, directly, an amount equal to such Participating Bank's ratable portion (according to such Participating Bank's Participation Percentage) of such unreimbursed amount or demand loan paid or made by the Issuing Bank, plus interest on such amount at a rate per annum equal to the Federal Funds Rate from the date of such payment by the Issuing Bank to the date of payment to the Issuing Bank by such Participating Bank. All such payments by each Participating Bank shall be made in United States dollars and in same day funds:
(x) not later than 2:45 P.M. (New York City time) on the day such notice is received by such Participating Bank if such notice is received at or prior to 12:30 P.M. (New York City time) on a Business Day; or
(y) not later than 12:00 Noon (New York City time) on the Business Day next succeeding the day such notice is received by such Participating Bank, if such notice is received after 12:30 P.M. (New York City time) on a Business Day.
If a Participating Bank shall have paid to the Issuing Bank its ratable portion of any unreimbursed amount or demand loan paid or made by the Issuing Bank, together with all interest thereon required by the second sentence of this subsection (b), such Participating Bank shall be entitled to receive its ratable share of all interest paid by the Account Party in respect of such unreimbursed amount or demand loan from the date paid or made by the Issuing Bank. If such Participating Bank shall have made such payment to the Issuing Bank, but without all such interest thereon required by the second sentence of this subsection (b), such Participating Bank shall be entitled to receive its ratable share of the interest paid by the Account Party in respect of such unreimbursed amount or demand loan only from the date it shall have paid all interest required by the second sentence of this subsection (b).
(c) Each Participating Bank's obligation to make each payment to the Issuing Bank, and the Issuing Bank's right to receive the same, shall be absolute and unconditional and shall not be affected by any circumstance whatsoever, including, without limitation, the foregoing or Section 4.06 hereof, or the occurrence or continuance of an Event of Default, or the non- satisfaction of any condition precedent set forth in Sections 5.03 or 5.04 hereof, or the failure of any other Participating Bank to make any payment under this Section 3.05. Each Participating Bank further agrees that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.
(d) The failure of any Participating Bank to make any payment to the Issuing Bank in accordance with subsection (b) above, shall not relieve any other Participating Bank of its obligation to make payment, but neither the Issuing Bank nor any Participating Bank shall be responsible for the failure of any other Participating Bank to make such payment. If any Participating Bank shall fail to make any payment to the Issuing Bank in accordance with subsection (b) above, then such Participating Bank shall pay to the Issuing Bank forthwith on demand such corresponding amount together with interest thereon, for each day until the date such amount is repaid to the Issuing Bank at the Federal Funds Rate. Nothing herein shall in any way limit, waive or otherwise reduce any claims that any party hereto may have against any non-performing Participating Bank.
(e) If any Participating Bank shall fail to make any payment to the
Issuing Bank in accordance with subsection (b) above, then, in addition to
other rights and remedies which the Issuing Bank may have, the Agent is
hereby authorized, at the request of the Issuing Bank, to withhold and to
apply to the payment of such amounts owing by such Participating Bank to
the Issuing Bank and any related interest, that portion of any payment
received by the Agent that would otherwise be payable to such Participating
Bank. In furtherance of the foregoing, if any Participating Bank shall
fail to make any payment to the Issuing Bank in accordance with subsection
(b), above, and such failure shall continue for five Business Days
following written notice of such failure from the Issuing Bank to such
Participating Bank, the Issuing Bank may acquire, or transfer to a third
party in exchange for the sum or sums due from such Participating Bank,
such Participating Bank's interest in the related unreimbursed amounts and
demand loans and all other rights of such Participating Bank hereunder in
respect thereof, without, however, relieving such Participating Bank from
any liability for damages, costs and expenses suffered by the Issuing Bank
as a result of such failure. The purchaser of any such interest shall be
deemed to have acquired an interest senior to the interest of such
Participating Bank and shall be entitled to receive all subsequent payments
which the Issuing Bank or the Agent would otherwise have made hereunder to
such Participating Bank in respect of such interest.
ARTICLE IV
PAYMENTS
SECTION 4.01. Payments and Computations. (a) The Account Party shall make each payment hereunder (i) in the case of reimbursement obligations pursuant to Section 3.01 hereof (excluding any portion thereof in respect of which an Initial Advance is to be made), not later than 2:30 P.M. (New York City time) on the day the related drawing under the Letter of Credit is paid by the Issuing Bank, and (ii) in all other cases, not later than 12:30 P.M. (New York City time) on the day when due, in each case in lawful money of the United States of America to the Agent at its address referred to in Section 10.02 hereof in immediately available funds. The Agent will promptly thereafter cause to be distributed like funds relating to the payment of reimbursements, principal, interest, fees or other amounts payable to the Issuing Bank and the Participating Banks to whom the same are payable, ratably and without offset or counterclaim except as provided in Section 3.05, at its address set forth in Section 10.02 hereof (in the case of the Issuing Bank) or for the account of their respective Applicable Lending Offices (in the case of the Participating Banks), in each case to be applied in accordance with the terms of this Agreement.
(b) The Account Party hereby authorizes the Issuing Bank, and each Participating Bank, if and to the extent payment owed to the Issuing Bank, or such Participating Bank, as the case may be, is not made when due hereunder, to charge from time to time against any or all of the Account Party's accounts with the Issuing Bank or such Participating Bank, as the case may be, any amount so due.
(c) All computations of interest based on the Alternate Base Rate when based on UBS's prime rate referred to in the definition of Alternate Base Rate shall be made by the Agent on the basis of a year of 365 or 366 days, as the case may be. All other computations of interest hereunder (including computations of interest based on the Federal Funds Rate (including the Alternate Base Rate if and so long as such Rate is based on the Federal Funds Rate)), and of all fees, commissions, and other amounts payable hereunder shall be made by the Agent or the party claiming such other amounts, as the case may be, on the basis of a year of 360 days. In each such case, such computation shall be made for the actual number of days (including the first day, but excluding the last day) occurring in the period for which such interest, fees, commissions or other amounts are payable. Each such determination by the Agent or a Participating Bank, as the case may be, shall be conclusive and binding for all purposes, absent manifest error.
(d) Whenever any payment hereunder shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest, commissions and fees hereunder.
(e) Unless the Agent shall have received notice from the Account Party prior to the date on which any payment is due to the Issuing Bank or the Participating Banks hereunder that the Account Party will not make such payment in full, the Agent may assume that the Account Party has made such payment in full to the Agent on such date and the Agent may, in reliance upon such assumption, cause to be distributed to the Issuing Bank and/or each Participating Bank on such due date an amount equal to the amount then due the Issuing Bank and/or such Participating Bank. If and to the extent the Account Party shall not have so made such payment in full to the Agent, the Issuing Bank and/or each such Participating Bank shall repay to the Agent forthwith on demand such amount distributed to the Issuing Bank and/or such Participating Bank, together with interest thereon, for each day from the date such amount is distributed to the Issuing Bank and/or such Participating Bank until the date the Issuing Bank and/or such Participating Bank repays such amount to the Agent, at the Federal Funds Rate.
(f) If, after the Agent has paid to the Issuing Bank or any Participating Bank any amount pursuant to subsection (a) above, such payment is rescinded or must otherwise be returned or must be paid over by the Agent or the Issuing Bank to any Person, whether pursuant to any bankruptcy or insolvency law, Section 4.04 hereof or otherwise, such Participating Bank shall, at the request of the Agent or the Issuing Bank, promptly repay to the Agent or the Issuing Bank, as the case may be, an amount equal to its ratable share of such payment, together with any interest required to be paid by the Agent or the Issuing Bank with respect to such payment.
SECTION 4.02. Default Interest. Any amounts payable by the Account Party hereunder that are not paid when due shall (to the fullest extent permitted by law) bear interest, from the date when due until paid in full, at the Default Rate, payable on demand.
SECTION 4.03. Yield Protection. (a) Change in Circumstances. Notwithstanding any other provision herein, if after the date hereof, the adoption of or any change in applicable law or regulation or in the interpretation or administration thereof by any governmental authority charged with the interpretation or administration thereof (whether or not having the force of law) (i) shall impose, modify or deem applicable any reserve, special deposit or similar requirement against letters of credit (or participatory interests therein) issued by, commitments or assets of, deposits with or for the account of, or credit extended by, the Issuing Bank or any Participating Bank, or (ii) shall impose on the Issuing Bank or such Participating Bank any other condition affecting this Agreement, the Letter of Credit or participatory interests therein, and the result of any of the foregoing shall be (A) to increase the cost to the Issuing Bank or such Participating Bank of issuing, maintaining or participating in this Agreement or the Letter of Credit or of agreeing to make, making or maintaining any Advance or (B) to reduce the amount of any sum received or receivable by the Issuing Bank or such Participating Bank hereunder (whether of principal, interest or otherwise), then the Account Party will pay to the Issuing Bank or such Participating Bank, upon demand, such additional amount or amounts as will compensate the Issuing Bank or such Participating Bank for such additional costs incurred or reduction suffered.
(b) Capital. If the Issuing Bank or any Participating Bank shall have determined that the adoption after the date hereof of any law, rule, regulation or guideline regarding capital adequacy, or any change therein or in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by the Issuing Bank or any Participating Bank (or any Applicable Lending Office of the Issuing Bank or such Participating Bank), or any holding company of any such entity, with any request or directive regarding capital adequacy not in effect on the date hereof (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect (i) of reducing the rate of return on such entity's capital or on the capital of such entity's holding company, if any, as a consequence of this Agreement, the Letter of Credit or such entity's participatory interest therein, any Commitment hereunder or the portion of the Advances made by such entity pursuant hereto to a level below that which such entity or such entity's holding company could have achieved, but for such applicability, adoption, change or compliance (taking into consideration such entity's policies and the policies of such entity's holding company with respect to capital adequacy), or (ii) of increasing or otherwise determining the amount of capital required or expected to be maintained by such entity or such entity's holding company based upon the existence of this Agreement, the Letter of Credit or such entity's participatory interest therein, any Commitment hereunder, the portion of the Advances made by such entity pursuant hereto and other similar such credits, participations, commitments, agreements or assets, then from time to time the Account Party shall pay to the Issuing Bank or such Participating Bank, upon demand, such additional amount or amounts as will compensate such entity or such entity's holding company for any such reduction or allocable capital cost suffered.
(c) Notices. A certificate of the Issuing Bank or any Participating Bank setting forth such entity's claim for compensation hereunder and the amount necessary to compensate such entity or its holding company pursuant to subsection (a) or (b) of this Section 4.03 shall be submitted to the Account Party and the Issuing Bank and shall be conclusive and binding for all purposes, absent manifest error. The Account Party shall pay the Issuing Bank or such Participating Bank directly the amount shown as due on any such certificate within ten days after its receipt of the same. The failure of any entity to provide such notice or to make demand for payment under this Section 4.03 shall not constitute a waiver of such Participating Bank's rights hereunder; provided, that such entity shall not be entitled to demand payment pursuant to subsections (a) or (b) of this Section 4.03 in respect of any loss, cost, expense, reduction or reserve if such demand is made more than one year following the later of such entity's incurrence or sufferance thereof or such entity's actual knowledge of the event giving rise to such entity's rights pursuant to such subsections. The protections of this Section 4.03 shall be available to the Issuing Bank and each Participating Bank regardless of any possible contention of the invalidity or inapplicability of the law, rule, regulation, guideline or other change or condition which shall have occurred or been imposed and shall survive the Termination Date and the payment of all other amounts hereunder.
SECTION 4.04. Sharing of Payments, Etc. If any Participating Bank
shall obtain any payment (whether voluntary, involuntary, through the
exercise of any right of set-off, or otherwise, but excluding any proceeds
received by assignments or sales of participations in accordance with
Section 10.06 hereof to a Person that is not an Affiliate of the Account
Party) on account of the Advances owing to it (other than pursuant to
Section 4.03 hereof) in excess of its ratable share of payments on account
of the Advances obtained by all the Participating Banks, such Participating
Bank shall forthwith purchase from the other Participating Banks such
participation in the portions of the Advances owing to them as shall be
necessary to cause such purchasing Participating Bank to share the excess
payment ratably with each of them; provided, however, that if all or any
portion of such excess payment is thereafter recovered from such purchasing
Participating Bank, such purchase from each Participating Bank shall be
rescinded and such Participating Bank shall repay to the purchasing
Participating Bank the purchase price to the extent of such recovery
together with an amount equal to such Participating Bank's ratable share
(according to the proportion of (i) the amount of such Participating Bank's
required repayment to (ii) the total amount so recovered from the
purchasing Participating Bank) of any interest or other amount paid or
payable by the purchasing Participating Bank in respect of the total amount
so recovered. The Account Party agrees that any Participating Bank so
purchasing a participation from another Participating Bank pursuant to this
Section 4.04 may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of set-off) with respect to such
participation as fully as if such Participating Bank were the direct
creditor of the Account Party in the amount of such participation.
Notwithstanding the foregoing, if any Participating Bank shall obtain any
such excess payment involuntarily, such Participating Bank may, in lieu of
purchasing participations from the other Participating Banks in accordance
with this Section 4.04, on the date of receipt of such excess payment,
return such excess payment to the Agent for distribution in accordance with
Section 4.01(a) hereof.
SECTION 4.05. Taxes. (a) All payments by the Account Party hereunder shall be made in accordance with Section 4.01, free and clear of and without deduction for all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding, in the case of each Participating Bank and the Issuing Bank, taxes imposed on its overall net income, and franchise taxes imposed on it, by the jurisdiction under the laws of which such Participating Bank or the Issuing Bank (as the case may be) is organized or any political subdivision thereof and, in the case of each Participating Bank, taxes imposed on its overall net income, and franchise taxes imposed on it, by the jurisdiction of such Participating Bank's Applicable Lending Office or any political subdivision thereof (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as Taxes ). If the Account Party shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder to any Participating Bank or the Issuing Bank, (i) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 4.05) such Participating Bank or the Issuing Bank (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Account Party shall make such deductions and (iii) the Account Party shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law.
(b) In addition, the Account Party agrees to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies that arise from any payment made hereunder or from the execution, delivery or registration of, or otherwise with respect to, this Agreement (hereinafter referred to as Other Taxes ).
(c) The Account Party will indemnify each Participating Bank and the Issuing Bank for the full amount of Taxes and Other Taxes (including, without limitation, any Taxes and any Other Taxes imposed by any jurisdiction on amounts payable under this Section 4.05) paid by such Participating Bank or the Issuing Bank (as the case may be) and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted. This indemnification shall be made within 30 days from the date such Participating Bank or the Issuing Bank (as the case may be) makes written demand therefor. If any Taxes or Other Taxes for which a Participating Bank or the Issuing Bank has received payments from the Account Party hereunder shall be finally determined to have been incorrectly or illegally asserted and are refunded to such Participating Bank, such Participating Bank shall promptly forward to the Account Party any such refunded amount. The Account Party's, the Issuing Bank's and each Participating Bank's obligations under this Section 4.05 shall survive the Termination Date and the payment of all other amounts hereunder.
(d) Within 30 days after the date of any payment of Taxes, the Account Party will furnish to the Issuing Bank, at its address referred to in Section 10.02 hereof, the original or a certified copy of a receipt evidencing payment thereof.
(e) Each Participating Bank not incorporated in the United States or a jurisdiction within the United States shall, on or prior to the date it becomes a Participating Bank hereunder, deliver to the Account Party and the Issuing Bank such certificates, documents or other evidence, as required by the Internal Revenue Code of 1986, as amended from time to time (the Code ), or treasury regulations issued pursuant thereto, including Internal Revenue Service Form 4224 and any other certificate or statement of exemption required by Treasury Regulation Section 1.1441-1(a) or Section 1.1441-6(c) or any subsequent version thereof, properly completed and duly executed by such Participating Bank establishing that it is (i) not subject to withholding under the Code or (ii) totally exempt from United States of America tax under a provision of an applicable tax treaty. Each Participating Bank shall promptly notify the Account Party and the Issuing Bank of any change in its Applicable Lending Office and shall deliver to the Account Party and the Issuing Bank together with such notice such certificates, documents or other evidence referred to in the immediately preceding sentence. Unless the Account Party and the Issuing Bank have received forms or other documents satisfactory to them indicating that payments hereunder are not subject to United States of America withholding tax or are subject to such tax at a rate reduced by an applicable tax treaty, the Account Party or the Issuing Bank shall withhold taxes from such payments at the applicable statutory rate in the case of payments to or for any Participating Bank organized under the laws of a jurisdiction outside the United States of America. Each Participating Bank represents and warrants that each such form supplied by it to the Issuing Bank and the Account Party pursuant to this Section 4.05, and not superseded by another form supplied by it, is or will be, as the case may be, complete and accurate.
(f) Any Participating Bank claiming any additional amounts payable pursuant to this Section 4.05 shall use reasonable efforts (consistent with legal and regulatory restrictions) to file any certificate or document requested by the Account Party or to change the jurisdiction of its Applicable Lending Office if the making of such a filing or change would avoid the need for or reduce the amount of any such additional amounts which may thereafter accrue and would not, in the sole determination of such Participating Bank, be otherwise disadvantageous to such Participating Bank.
SECTION 4.06. Obligations Absolute. The obligations of the Account Party under this Agreement shall be unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement (as the same may be amended from time to time) under all circumstances, including, without limitation, the following circumstances:
(i) any lack of validity or enforceability of this Agreement, the Second Mortgage or any of the Security Documents or Related Documents or any document or agreement delivered in connection therewith;
(ii) any change in the time, manner or place of payment of, or in any other term of, all or any of the obligations of the Account Party in respect of the Letter of Credit or any other amendment or waiver of or any consent to departure from all or any of the Loan Documents, the Second Mortgage or the Related Documents or any document or agreement delivered in connection therewith;
(iii) the existence of any claim, set-off, defense or other right which the Account Party may have at any time against the Paying Agent, the Trustee or any other beneficiary, or any transferee, of the Letter of Credit (or any persons or entities for whom the Paying Agent, the Trustee, any such beneficiary or any such transferee may be acting), the Agent, the Issuing Bank, or any other person or entity, whether in connection with this Agreement, the transactions contemplated in any of the Loan Documents, the Second Mortgage or the Related Documents, or any unrelated transaction;
(iv) any statement or any other document presented under the Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect, except to the extent that a court of competent jurisdiction shall determine that the Issuing Bank shall have engaged in gross negligence or willful misconduct with respect thereto;
(v) payment by the Issuing Bank under the Letter of Credit against presentation of a draft or certificate which does not comply with the terms of the Letter of Credit, except to the extent that a court of competent jurisdiction shall determine that the Issuing Bank shall have engaged in gross negligence or willful misconduct with respect thereto;
(vi) any exchange of, release of or non-perfection of any interest in any collateral, or any release or amendment or waiver of or consent to departure from any guarantee, for all or any of the obligations of the Account Party in respect of the Letter of Credit; or
(vii) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing.
SECTION 4.07. Evidence of Indebtedness. The Issuing Bank and each Participating Bank shall maintain, in accordance with their usual practice, an account or accounts evidencing the indebtedness of the Account Party resulting from each drawing under the Letter of Credit (in the case of the Issuing Bank) and from each Advance (in the case of each Participating Bank) made from time to time hereunder and the amounts of principal and interest payable and paid from time to time hereunder. In any legal action or proceeding in respect of this Agreement, the entries made in such account or accounts shall, in the absence of manifest error, be conclusive evidence of the existence and amounts of the obligations of the Account Party therein recorded.
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.01. Conditions Precedent to the Issuance of the Letter of Credit. The obligation of the Issuing Bank to issue the Letter of Credit and of each Participating Bank to make the Advances to be made by it is subject to the fulfillment of the conditions precedent that the Agent shall have received on or before the day of such issuance the following, each dated such day (except where specified otherwise below), in form and substance satisfactory to each Participating Bank (except where specified otherwise below) and in sufficient copies for each Participating Bank:
(a) Agreements:
(i) Counterparts of this Agreement, duly executed and delivered by the Account Party, the Agent, the Issuing Bank and each Participating Bank listed on the signature pages hereto.
(ii) Counterparts of the Pledge Agreement, duly executed by the Account Party, the Agent and the Issuing Bank.
(iii) Executed copies (or duplicate copies thereof certified as of the Closing Date by the Account Party in a manner satisfactory to the Agent to be a true copy) of the Indenture and the Loan Agreement, duly executed by the parties thereto.
(iv) Executed copies (or duplicate copies thereof certified as of the Closing Date by the Account Party in a manner satisfactory to the Agent to be a true copy) of the Second Mortgage, duly executed by the parties thereto.
(b) Corporate Matters:
(i) A certificate of the Secretary, an Assistant Secretary, the Clerk or an Assistant Clerk of the Account Party certifying that attached thereto are (A) a true and correct copy of the Articles of Incorporation of the Account Party and a true and correct copy of the By-laws of the Account Party, in each case as in effect on the Closing Date and (B) true and correct copies of the resolutions of the Board of Directors of the Account Party approving, if and to the extent necessary, this Agreement, the other Loan Documents, the Related Documents to which it is a party and the other documents to be delivered by or on behalf of the Account Party hereunder and thereunder, and of all documents evidencing other necessary corporate action, if any, with respect to the execution, delivery and performance by or on behalf of the Account Party of this Agreement, the other Loan Documents and such Related Documents and certifying that such resolutions and other corporate actions, if any, are in full force and effect and have not been revoked, rescinded or modified.
(ii) A certificate of the Secretary, an Assistant Secretary, the Clerk or an Assistant Clerk of the Account Party certifying the names and true signatures of the officers of the Account Party authorized to sign this Agreement, the other Loan Documents, the Related Documents to which it is a party and the other documents to be delivered hereunder and thereunder.
(c) Governmental Approvals:
(i) A certificate of a duly authorized officer of the Account Party certifying that attached thereto are true and correct copies of all Governmental Approvals referred to in clause (i) of the definition of Governmental Approval required to be obtained or made by the Account Party.
(d) Financial, Accounting and Compliance Matters:
(i) A certificate signed by the Treasurer or Assistant Treasurer of the Account Party, certifying as to the absence of any material adverse change in the financial condition, operations, properties or prospects of the Account Party since December 31, 1992, except to the extent, if any, described in the Account Party's Quarterly Reports on Form 10-Q for the periods ended March 31 and/or June 30, 1993 or in the Account Party's Current Reports on Form 8-K dated June 3, 1993, June 30, 1993 and/or September 10, 1993.
(ii) A certificate of a duly authorized officer of the Account Party to the effect that:
(A) the representations and warranties contained in
Section 6.01 are correct in all material respects on and as of the Closing
Date before and after giving effect to the issuance of the Letter of
Credit; and
(B) no event has occurred and is continuing which constitutes an Event of Default or Unmatured Default, or would result from the issuance of the Letter of Credit.
(e) Relating to the Issuance of the Bonds:
(i) An executed copy (or a duplicate copy thereof certified by the Account Party in a manner satisfactory to the Agent to be a true copy) of the Remarketing Agreement, duly executed by the Issuer, the Remarketing Agent and the Account Party.
(ii) An executed copy (or a duplicate copy thereof certified by the Account Party in a manner satisfactory to the Agent to be a true copy) of the Purchase Contract, duly executed by Goldman, Sachs & Co., Individually and as Representative of Advest, Inc., Greenwich Partners, Inc. and U.S. Securities, Inc., the Issuer and the Account Party.
(iii) A letter from Whitman & Ransom, counsel to the Issuer, addressed to the Agent, the Issuing Bank and the Participating Banks and stating therein that the Agent, the Issuing Bank and the Participating Banks may rely on the opinion of such firm in the form of Appendix C to the Official Statement relating to the Bonds and delivered pursuant to Section 14(i)(2)(F) of the Purchase Contract, together with copies of such opinion.
(iv) Copies of the Preliminary Official Statement and Official Statement used in connection with the offering and remarketing of the Bonds, and any amendments, supplements or "stickers" thereto.
(v) Copies of the Issuer Resolution, and, to the extent not otherwise referenced in this Section 5.01(e), of all other agreements, documents, certificates and opinions delivered in connection with the issuance of the Bonds.
(f) Opinions of Counsel:
Favorable opinions of:
(i) Day, Berry & Howard, counsel to the Account Party, in substantially the form of Exhibit 5.01A and as to such other matters as the Majority Lenders, through the Agent, may reasonably request; and
(ii) King & Spalding, special New York counsel to the Agent and the Issuing Bank, in substantially the form of Exhibit 5.01B.
(g) Miscellaneous:
(i) Letters from S&P and Moody's to the effect that the Bonds have been rated A-1+ and VMIG-1, respectively, such letters to be in form and substance satisfactory to the Issuing Bank.
(ii) Such other approvals, opinions and documents as the Majority Lenders, through the Issuing Bank, may reasonably request as to the legality, validity, binding effect or enforceability of the Loan Documents or the financial condition, properties, operations or prospects of the Account Party.
SECTION 5.02. Additional Conditions Precedent to the Issuance of the Letter of Credit. The obligation of the Issuing Bank to issue the Letter of Credit and of each Participating Bank to make the Advances to be made by it shall be subject to the further conditions precedent that, on the date of the issuance of the Letter of Credit:
(a) the representations and warranties contained in Section 6.01 shall be correct in all material respects on and as of the Closing Date before and after giving effect to the issuance of the Letter of Credit;
(b) no event shall have occurred and be continuing which constitutes an Event of Default or Unmatured Default, or would result from the issuance of the Letter of Credit; and
(c) The Account Party shall have paid all fees under or referenced in Section 2.03 hereof, to the extent then due and payable.
SECTION 5.03. Conditions Precedent to Initial Advances. The obligation of each Participating Bank to make any Initial Advance shall be subject to the conditions precedent that, on the date of such Initial Advance, the following statements shall be true:
(a) the representations and warranties contained in Section 6.01 of this Agreement (other than the last sentence of subsection (f) and clause (ii) of subsection (g) thereof) are true and correct on and as of the date of such Initial Advance, before and after giving effect to such Initial Advance and to the application of the proceeds (if any) therefrom, as though made on and as of such date; and
(b) no event has occurred and is continuing which constitutes an Event of Default.
Unless the Account Party shall have previously advised the Agent in
writing that one or more of the statements contained in subsections (a) and
(b) of this Section 5.03 is no longer true, the Account Party shall be
deemed to have represented and warranted, on and as of the date of any
Initial Advance, that the above statements are true.
SECTION 5.04. Conditions Precedent to Term Advances. The obligation of each Participating Bank to make any Term Advance shall be subject to the conditions precedent that, on the date of such Term Advance the following statements shall be true:
(a) the representations and warranties contained in Section 6.01 of this Agreement (including the last sentence of subsection (f) and clause (ii) of subsection (g) thereof) are true and correct on and as of the date of such Term Advance, before and after giving effect to such Term Advance and to the application of the proceeds therefrom, as though made on and as of such date; and
(b) no event has occurred and is continuing which constitutes an Event of Default or an Unmatured Default.
Unless the Account Party shall have previously advised the Agent in writing that one or more of the statements contained in subsections (a) and (b) of this Section 5.04 is no longer true, the Account Party shall be deemed to have represented and warranted, on and as of the date of any Term Advance, that the above statements are true.
SECTION 5.05. Reliance on Certificates. The Agent, the Issuing Bank and the Participating Banks shall be entitled to rely conclusively upon the certificates delivered from time to time by officers of the Account Party, NU and the other parties to the Loan Documents and Related Documents as to the names, incumbency, authority and signatures of the respective persons named therein until such time as the Agent may receive a replacement certificate, in form acceptable to the Agent, from an officer of such Person identified to the Agent as having authority to deliver such certificate, setting forth the names and true signatures of the officers and other representatives of such Person thereafter authorized to act on behalf of such Person.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01. Representations and Warranties of the Account Party. The Account Party represents and warrants as follows:
(a) Each of the Account Party and its Principal Subsidiaries is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, has the requisite corporate power and authority to own its property and assets and to carry on its business as now conducted and is qualified to do business in every jurisdiction where, because of the nature of its business or property, such qualification is required, except where the failure so to qualify would not have a material adverse effect on the financial condition, properties, prospects or operations of the Account Party or of the Account Party and its Principal Subsidiaries taken as a whole. The Account Party has the corporate power to execute, deliver and perform its obligations under this Agreement, each other Loan Document and each Related Document to which it will be a party.
(b) The execution, delivery and performance by the Account Party of each Loan Document and Related Document to which it is a party are within the Account Party's corporate powers, have been duly authorized by all necessary corporate action, and do not and will not contravene (i) the Account Party's charter or by-laws or any law or legal restriction or (ii) any contractual restriction binding on or affecting the Account Party or its properties or any of its Principal Subsidiaries or its properties.
(c) Each of the Account Party and its Principal Subsidiaries is not in violation of any law, or in default with respect to any judgment, writ, injunction, decree, rule or regulation of any court or governmental agency or instrumentality, where such violation or default would have a material adverse effect on the financial condition, properties, prospects or operations of the Account Party or of the Account Party and its Principal Subsidiaries taken as a whole.
(d) All Governmental Approvals referred to in clause (i) in the definition of Governmental Approvals have been duly obtained or made, and all applicable periods of time for review, rehearing or appeal with respect thereto have expired, except as described below. If the period for appeal of the order of the Securities and Exchange Commission approving the transactions contemplated hereby has not expired, the filing of an appeal of such order will not affect the validity of said transactions, unless such order has been otherwise stayed or any of the parties hereto has actual knowledge that any of such transactions constitutes a violation of the Public Utility Holding Company Act of 1935 or any rule or regulation thereunder. No such stay exists and the Account Party has no reason to believe that any of such transactions constitutes any such violation. Although the period for appeal of the order of the Massachusetts Department of Public Utilities (the MDPU ) approving the transactions contemplated hereby has not expired, no Person (other than the Account Party) has standing to appeal such order of the MDPU. If the period for appeal of the decision of the Connecticut Department of Public Utility Control (the CDPUC ) approving or waiving approval of the transactions contemplated hereby has not expired, the filing of an appeal of such decision will not affect the validity of said transactions, unless operation of such decision has been stayed or suspended by the CDPUC or a reviewing court prior to the consummation of such transactions. No such stay or suspension exists. No representation or warranty is made concerning the applicable period of time for review, rehearing or appeal with respect to Governmental Approvals of the Issuer in connection with the issuance of the Bonds. The Account Party and each of its Principal Subsidiaries have obtained or made all Governmental Approvals referred to in clause (ii) of the definition of Governmental Approvals , except (i) those which are not yet required but which are obtainable in the ordinary course of business as and when required, (ii) those the absence of which would not materially adversely affect the financial condition, properties, prospects or operations of the Account Party or any Principal Subsidiary and (iii) those which the Account Party is diligently attempting in good faith to obtain, renew or extend, or the requirement for which the Account Party is contesting in good faith by appropriate proceedings or by other appropriate means; in each case described in the foregoing clause (iii), such attempt or contest, and any delay resulting therefrom, is not reasonably expected to have a material adverse effect on the financial condition, properties, prospects or operations of the Account Party or any Principal Subsidiary or to magnify to any significant degree any such material adverse effect that would reasonably be expected to result from the absence of such Governmental Approval.
(e) This Agreement, each other Loan Document and each Related Document to which the Account Party is a party have been duly executed and delivered by or on behalf of the Account Party and are legal, valid and binding obligations of the Account Party enforceable against the Account Party in accordance with their respective terms; subject to the qualifications, however, that the enforcement of the rights and remedies herein and therein is subject to bankruptcy and other similar laws of general application affecting rights and remedies of creditors and the application of general principles of equity (regardless of whether considered in a proceeding in equity or at law) and that indemnification against violations of securities and similar laws may be subject to matters of public policy.
(f) (i) The audited balance sheet of the Account Party as at December 31, 1992, and the audited statements of income and cash flows of the Account Party for the fiscal year then ended as set forth in the Account Party's Annual Report on Form 10-K for such fiscal year and (ii) the unaudited balance sheet of the Account Party as at June 30, 1993 and the unaudited statements of income and cash flows of the Account Party for the six-month period then ended as set forth in the Account Party's Quarterly Report on Form 10-Q for the period then ended, fairly present in all material respects the financial condition and results of operations of the Account Party at and for the respective periods ended on such dates, and have been prepared in accordance with generally accepted accounting principles consistently applied. Since December 31, 1992, there has been no material adverse change in the financial condition, operations, properties or prospects of the Account Party and its Subsidiaries, if any, taken as a whole, except to the extent, if any, described in the Account Party's Quarterly Reports on Form 10-Q for the periods ended March 31, 1993 and/or June 30, 1993, or in the Account Party's Current Reports on Form 8-K dated June 3, 1993, June 30, 1993 and/or September 10, 1993 or in Schedule II hereto.
(g) There is no pending or known threatened action or proceeding
(including, without limitation, any action or proceeding relating to any
environmental protection laws or regulations) affecting the Account Party
or its properties, or any of its Principal Subsidiaries or its properties,
before any court, governmental agency or arbitrator (i) which affects or
purports to affect the legality, validity or enforceability of the Loan
Documents or the Related Documents or any of them or (ii) as to which there
is a reasonable possibility of an adverse determination and which, if
adversely determined, would materially adversely affect the financial
condition, properties, prospects or operations of the Account Party and its
Principal Subsidiaries taken as a whole; except, for purposes of clause
(ii) only, such as is described in the Account Party's Annual Report on
Form 10-K for the fiscal year ended December 31, 1992, in the Account
Party's Quarterly Reports on Form 10-Q for the periods ended March 31, 1993
or June 30, 1993, or in the Account Party's Current Reports on Form 8-K,
dated June 3, 1993, June 30, 1993 and/or September 10, 1993 or in Schedule
II hereto.
(h) No ERISA Plan Termination Event has occurred nor is reasonably expected to occur with respect to any ERISA Plan which would materially adversely affect the financial condition, properties, prospects or operations of the Account Party and its Subsidiaries taken as a whole, except as disclosed to and consented to in writing by the Majority Lenders. Since the date of the most recent Schedule B (Actuarial Information) to the annual report of each such ERISA Plan (Form 5500 Series), there has been no material adverse change in the funding status of the ERISA Plans referred to therein, and no prohibited transaction has occurred with respect thereto that, singly or in the aggregate with all other prohibited transactions and after giving effect to all likely consequences thereof, would be reasonably expected to have a material adverse effect on the financial condition, properties, prospects or operations of the Account Party and its Subsidiaries taken as a whole. Neither the Account Party nor any of its ERISA Affiliates has incurred nor reasonably expects to incur any material withdrawal liability under ERISA to any ERISA Multiemployer Plan, except as disclosed to all Lenders and consented to in writing by the Majority Lenders.
(i) The Account Party or one of its Principal Subsidiaries has good and marketable title (or, in the case of personal property, valid title) or valid leasehold interests in the electric generating plants of which it is named as owner in Item 2 of the Account Party's Annual Report on Form 10-K for the fiscal year ended December 31, 1992 under the caption System Generating Plants , except for minor defects in title that do not interfere with the ability of the Account Party or any of its Principal Subsidiaries to conduct its business as now conducted. All such assets and properties are free and clear of any Lien, other than Liens permitted under Section 7.02(a) hereof.
(j) All outstanding shares of capital stock having ordinary voting power for the election of directors of the Account Party have been validly issued, are fully paid and nonassessable and are owned beneficially by NU, free and clear of any Lien. NU is a holding company (as defined in the Public Utility Holding Company Act of 1935, as amended).
(k) The Account Party and each of its Principal Subsidiaries has filed all tax returns (Federal, state and local) required to be filed and paid taxes shown thereon to be due, including interest and penalties, or, to the extent the Account Party or any of its Principal Subsidiaries is contesting in good faith an assertion of liability based on such returns, has provided adequate reserves in accordance with generally accepted accounting principles for payment thereof.
(l) No exhibit, schedule, report or other written information provided by or on behalf of the Account Party or its agents to the Agent, the Issuing Bank or the Participating Banks in connection with the negotiation, execution and closing of this Agreement, the other Loan Documents or the Related Documents knowingly contained when made any material misstatement of fact or knowingly omitted to state any material fact necessary to make the statements contained therein not misleading in light of the circumstances under which they were made.
(m) No proceeds of any Advance will be used in violation of, or in any manner that would result in a violation by any party hereto of, Regulations G, T, U or X promulgated by the Board of Governors of the Federal Reserve System or any successor regulations. The Account Party (A) is not an investment company within the meaning ascribed to that term in the Investment Company Act of 1940 and (B) is not engaged in the business of extending credit for the purpose of buying or carrying margin stock.
ARTICLE VII
COVENANTS OF THE ACCOUNT PARTY
SECTION 7.01. Affirmative Covenants. So long as any amounts shall remain available to be drawn under the Letter of Credit or any Advance or other amounts shall remain unpaid hereunder or any Participating Bank shall have any Commitment, the Account Party will, unless the Majority Lenders shall otherwise consent in writing:
(a) Use of Proceeds. Apply all proceeds of each Advance solely as specified in Section 3.02 and Section 6.01(m) hereof.
(b) Payment of Taxes, Etc. Pay and discharge before the same shall become delinquent, and cause each of its Principal Subsidiaries to pay and discharge before the same shall become delinquent, all taxes, assessments and governmental charges, royalties or levies imposed upon it or upon its property except to the extent the Account Party or any of its Principal Subsidiaries is contesting the same in good faith by appropriate proceedings and has set aside adequate reserves in accordance with generally accepted accounting principles for the payment thereof.
(c) Maintenance of Insurance. Maintain, or cause to be maintained, insurance (including appropriate plans of self-insurance) covering the Account Party, its Principal Subsidiaries and their respective properties, in effect at all times in such amounts and covering such risks as may be required by law and in addition as is usually carried by companies engaged in similar businesses and owning similar properties.
(d) Preservation of Existence, Etc. Subject at all times to
Section 7.02(b) hereof, preserve and maintain, and cause each of its
Principal Subsidiaries to preserve and maintain, its existence, corporate
or otherwise, material rights (statutory and otherwise) and franchises
except for such rights and franchises which do not materially adversely
affect the financial condition, properties, prospects or operations of the
Account Party or any of its Principal Subsidiaries.
(e) Compliance with Laws, Etc.. Comply, and cause each of its Principal Subsidiaries to comply, in all material respects with the requirements of all applicable laws, rules, regulations and orders of any governmental authority, including, without limitation, any such laws, rules, regulations and orders issued by the Securities and Exchange Commission or relating to zoning, environmental protection, use and disposal of Hazardous Substances, land use, construction and building restrictions, ERISA and employee safety and health matters relating to business operations, except to the extent (i) that the Account Party or any of its Principal Subsidiaries is contesting the same in good faith by appropriate proceedings or (ii) that any such non-compliance, and the enforcement or correction thereof, would not materially adversely affect the financial condition, properties, prospects or operations of the Account Party or any of its Principal Subsidiaries.
(f) Inspection Rights. At any time and from time to time upon reasonable notice, permit the Issuing Bank and its agents and representatives to examine the records and books of account of, and the properties of, the Account Party and any of its Principal Subsidiaries.
(g) Keeping of Books. Keep proper records and books of account, in which full and correct entries shall be made of all financial transactions of the Account Party and its Principal Subsidiaries and the assets and business of the Account Party and its Principal Subsidiaries, in accordance with generally accepted accounting practices consistently applied.
(h) Conduct of Business. Conduct its primary business, and cause each of its Principal Subsidiaries to conduct its primary business, in substantially the same manner and in substantially the same fields as such business is conducted on the Closing Date.
(i) Maintenance of Properties, Etc. (i) As to properties of the type described in Section 6.01(i) hereof, subject at all times to Section 7.02(b) hereof, maintain, and cause its Principal Subsidiaries to maintain, title of the quality described therein; and (ii) preserve, maintain, develop, and operate, and cause its Principal Subsidiaries to preserve, maintain, develop and operate, in substantial conformity with all laws, material contractual obligations and prudent practices prevailing in the industry, all of its properties which are used or useful in the conduct of its or its Principal Subsidiaries' respective businesses in good working order and condition, ordinary wear and tear excepted, except to the extent such non- conformity would not materially adversely affect the financial condition, properties, prospects or operations of the Account Party or any of its Principal Subsidiaries; provided, however, that the Account Party or any Principal Subsidiary will not be prevented from discontinuing the operation and maintenance of any such properties if such discontinuance is, in the judgment of the Account Party or such Principal Subsidiary, desirable in the operation or maintenance of its business and would not materially adversely affect the financial condition, properties, prospects or operations of the Account Party or such Principal Subsidiary.
(j) Governmental Approvals. Duly obtain, and cause each of its
Principal Subsidiaries to duly obtain, on or prior to such date as the same
may become legally required, and thereafter maintain in effect at all
times, all Governmental Approvals on its or such Principal Subsidiary's
part to be obtained, except with respect to those Governmental Approvals
referred to in clause (ii) of the definition of Governmental Approvals ,
(i) those the absence of which would not materially adversely affect the
financial condition, properties, prospects or operations of the Account
Party or any Principal Subsidiary and (ii) those which the Account Party is
diligently attempting in good faith to obtain, renew or extend, or the
requirement for which the Account Party is contesting in good faith by
appropriate proceedings or by other appropriate means; provided, however,
that the exception afforded by clause (ii), above, shall be available only
if and for so long as such attempt or contest, and any delay resulting
therefrom, does not have a material adverse effect on the financial
condition, properties, prospects or operations of the Account Party or any
Principal Subsidiary and does not magnify to any significant degree any
such material adverse effect that would reasonably be expected to result
from the absence of such Governmental Approval.
(k) Further Assurances. Promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary or that any Participating Bank through the Issuing Bank may reasonably request in order to fully give effect to the interests and properties purported to be covered by the Security Documents.
(l) Related Documents. Perform and comply in all material respects with each of the provisions of each Related Document to which it is a party.
(m) Ratings. Maintain at all times ratings in respect of the Bonds of at least two nationally-recognized ratings services, at least one of which shall be S&P or Moody's.
SECTION 7.02. Negative Covenants. So long as any amount shall remain available to be drawn under the Letter of Credit or any Advance or other amounts shall remain unpaid hereunder or any Participating Bank shall have any Commitment, the Account Party will not, without the written consent of the Majority Lenders:
(a) Liens, Etc. Create, incur, assume or suffer to exist any lien, security interest, or other charge or encumbrance (including the lien or retained security title of a conditional vendor) of any kind, or any other type of preferential arrangement the intent or effect of which is to assure a creditor against loss or to prefer one creditor over another creditor upon or with respect to any of its properties or assets (any of the foregoing being referred to herein as a Lien ), excluding, however, from the operation of the foregoing restrictions the Liens created or perfected under or in connection with the Pledge Agreement, and the following, whether now existing or hereafter created or perfected:
(i) Liens created by the First Mortgage Indenture and Deed of Trust dated as of August 1, 1954, from the Account Party to the First National Bank of Boston, as Successor Trustee, as amended and supplemented (the WMECO Indenture );
(ii) Liens on the Account Party's interest in the Millstone Unit No. 1, Millstone Unit No. 2 or Millstone Unit No. 3 nuclear generating units in Waterford, Connecticut, or nuclear fuel for any or all nuclear units in which the Account Party has an interest (including, without limitation, Millstone Unit No. 1, Millstone Unit No.2 and Millstone Unit No. 3);
(iii) Permitted Liens or Permitted Encumbrances under the WMECO Indenture;
(iv) any Lien on assets of any of its Subsidiaries created or assumed to secure Debt owing by any of its Subsidiaries to the Account Party or to any wholly-owned Subsidiary of the Account Party;
(v) any purchase money Lien or construction mortgage on assets hereafter acquired or constructed by the Account Party or any of its Subsidiaries and any Lien on any assets existing at the time of acquisition thereof by the Account Party or any of its Subsidiaries, or created within 180 days from the date of completion of such acquisition or construction; provided that such Lien shall at all times be confined solely to the assets so acquired or constructed and any additions thereto;
(vi) any existing Liens on assets now owned by the Account Party or any of its Subsidiaries; Liens on assets or stock of any class of, or any partnership or joint venture interest in, any of its Subsidiaries existing at the time it becomes a Subsidiary of the Account Party, and liens existing on assets of a corporation or other going concern when it is merged into or with the Account Party or a Subsidiary of the Account Party, or when substantially all of its assets are acquired by the Account Party or a Subsidiary of the Account Party; provided that such Liens shall at all times be confined solely to such assets, or if such assets constitute a utility system, additions to or substitutions for such assets;
(vii) Liens resulting from legal proceedings being contested in good faith by appropriate legal or administrative proceedings by the Account Party or any of its Subsidiaries, and as to which the Account Party or any of its Subsidiaries, as the case may be, to the extent required by generally accepted accounting principles applied on a consistent basis, shall have set aside on its books adequate reserves;
(viii) Liens created in favor of the other contracting party in connection with advance or progress payments;
(ix) any Liens in favor of any state of the United States or any political subdivision of any such state, or any agency of any such state or political subdivisions, or trustee acting on behalf of holders of obligations issued by any of the foregoing or any financial institutions lending to or purchasing obligations of any of the foregoing, which Lien is created or assumed for the purpose of financing all or part of the cost of acquiring or constructing the property subject thereto;
(x) Liens resulting from conditional sale agreements, capital leases or other title retention agreements;
(xi) Liens on property of the Account Party or any of its Subsidiaries related to the financing of pollution control facilities;
(xii) Liens on accounts receivable and power contracts resulting from financing transactions;
(xiii) any other Liens incurred in the ordinary course of business otherwise than to secure Debt; and
(xiv) any extension, renewal or replacement of Liens permitted by clauses (i) through (vi) and (viii) through (xiii); provided, however, that the principal amount of Debt secured thereby shall not, at the time of such extension, renewal or replacement, exceed the principal amount of Debt so secured and that such extension, renewal or replacement shall be limited to all or a part of the property which secured the Lien so extended, renewed or replaced;
(b) Mergers, and Sales of Assets, Etc. Merge with or into or consolidate with or into, any Person, or permit any of its Subsidiaries to be a party to, any merger or consolidation, or purchase or otherwise acquire all or substantially all of the assets or stock of any class of, or any partnership or joint venture interest in, any other Person or entity, or sell, transfer, convey or lease all or any substantial part of its assets (other than sales, transfers or conveyances of receivables and power contracts), except for, and then only after receipt of all necessary corporate and governmental or regulatory approvals and provided, that, before and after giving effect to any such merger, consolidation, purchase, acquisition, sale, transfer, conveyance or lease, no Event of Default or Unmatured Default shall have occurred and be continuing:
(i) any such merger or consolidation, sale, transfer, conveyance, lease or assignment of or by any wholly-owned Subsidiary of the Account Party into the Account Party or into, with or to any other wholly- owned Subsidiary of the Account Party and any such purchase or other acquisition by the Account Party or any wholly-owned Subsidiary of the Account Party of the assets or stock of any wholly-owned Subsidiary of the Account Party;
(ii) any such sale of assets (other than stock) which comprise all or any part of its interest in a nuclear power generating plant (whether completed or under construction);
(iii) any such merger or consolidation of the Account Party with or into another wholly-owned Subsidiary of NU and/or a Regulatory Transaction Entity and/or an entity owning a cogeneration or independent power project, pursuant to step-in or similar rights granted pursuant to a pre-existing power purchase contract, if (but only if): (A) the successor or surviving corporation, if not the Account Party, shall have assumed or succeeded to all of the liabilities of the Account Party (including the liabilities of the Account Party under this Agreement), and (B) the Agent shall have received the favorable written opinion of counsel to the Account Party, in form and substance satisfactory to the Agent and the Majority Lenders, to the effect of the foregoing subclause (A); provided, however, in the event of a merger or consolidation with a Regulatory Transaction Entity, if the purchase price plus the amount of any liabilities assumed in connection with such merger or consolidation exceeds $100,000,000, the Account Party shall deliver to the Agent with sufficient copies for each Participating Bank 30 days prior to such merger or consolidation, a certificate of a duly authorized officer of the Account Party demonstrating projected compliance with the ratio set forth in Section 7.02(d) hereof for and as of each of the three consecutive fiscal quarters immediately succeeding such merger or consolidation and certifying that such projections were prepared in good faith and on reasonable assumptions;
(iv) any purchase or acquisition of all or substantially all of the assets of or stock of any class of, or any partnership or joint venture interest in (and any assumption of the related liabilities) (A) an entity owning a cogeneration or independent power project, pursuant to step-in or similar rights granted pursuant to a pre-existing power purchase contract; (B) a Regulatory Transaction Entity; or (C) any other Person if the purchase price of such acquisition plus the amount of any liabilities assumed by the Account Party in connection therewith does not exceed $50,000,000 in the aggregate; provided, however, in the event of a purchase or acquisition of a Regulatory Transaction Entity, if the purchase price plus the amount of any liabilities assumed in connection with such purchase or acquisition exceeds in the aggregate $100,000,000, the Account Party shall deliver to the Agent with sufficient copies for each Participating Bank 30 days prior to such purchase or acquisition, a certificate of a duly authorized officer of the Account Party demonstrating projected compliance with the ratio set forth in Section 7.02(d) hereof for and as of each of the three consecutive fiscal quarters immediately succeeding such purchase or acquisition and certifying that such projections were prepared in good faith and on reasonable assumptions; or
(v) any purchase or acquisition of a joint venture interest in a generating and/or transmission facility or in a mutual insurance company providing nuclear liability or nuclear property or replacement power insurance.
(c) Compliance with ERISA. (i) Terminate, or permit any ERISA Affiliate to terminate, any ERISA Plan so as to result in any liability of the Account Party or any Principal Subsidiary to the PBGC in an amount greater than $1,000,000, or (ii) permit to exist any occurrence of any Reportable Event (as defined in Title IV of ERISA) which, alone or together with any other Reportable Event with respect to the same or another ERISA Plan, has a reasonable possibility of resulting in liability of the Account Party or any Subsidiary to the PBGC in an aggregate amount exceeding $1,000,000, or any other event or condition, which presents a material risk of such a termination by the PBGC of any ERISA Plan or has a reasonable possibility of resulting in a liability of the Account Party or any Subsidiary to the PBGC in an aggregate amount exceeding $1,000,000.
(d) Common Equity Ratio. Permit the ratio (expressed as a percentage) of Consolidated Common Equity to Consolidated Capitalization to be less than 30% for any three consecutive fiscal quarters.
SECTION 7.03. Reporting Obligations. So long as any amount shall remain available to be drawn under the Letter of Credit or any Advance or other amounts shall remain unpaid hereunder or any Participating Bank shall have any Commitment, the Account Party will, unless the Majority Lenders shall otherwise consent in writing, furnish to the Agent in sufficient copies for the Issuing Bank and each Participating Bank, the following:
(i) as soon as possible and in any event within ten days after the occurrence of each Event of Default or Unmatured Default continuing on the date of such statement, a statement of the Chief Financial Officer, Treasurer or Assistant Treasurer of the Account Party setting forth details of such Event of Default or Unmatured Default and the action which the Account Party proposes to take with respect thereto;
(ii) as soon as available and in any event within 50 days after the end of each of the first three quarters of each fiscal year of the Account Party, a copy of the Account Party's Quarterly Report on Form 10-Q, if any, submitted to the Securities and Exchange Commission with respect to such quarter, containing financial statements in reasonable detail and duly certified (subject to year-end audit adjustments) by the Chief Financial Officer, Treasurer, Assistant Treasurer or Comptroller of the Account Party as having been prepared in accordance with the system of management financial reports of the Account Party applied on a basis consistent with the financial statements referred to in Section 6.01(f) hereof and accompanied by a certificate of a duly authorized officer of the Account Party (X) stating that no Event of Default or Unmatured Default has occurred and is continuing or, if an Event of Default or Unmatured Default has occurred and is continuing, describing the nature thereof and the action which the Account Party proposes to take with respect thereto and (Y) demonstrating compliance with Section 7.02(d) hereof for and as of the end of such fiscal quarter, such demonstration to be in a schedule (in form satisfactory to the Agent) which sets forth the computations used in determining such compliance;
(iii) as soon as available and in any event within 105 days after the end of each fiscal year of the Account Party, a copy of the Account Party's Annual Report on Form 10-K submitted to the Securities and Exchange Commission with respect to such year, containing financial statements certified by a nationally-recognized independent public accountant and to be accompanied by a certificate of the Chief Financial Officer, Treasurer, Assistant Treasurer or Comptroller of the Account Party (X) stating that no Event of Default or Unmatured Default has occurred and is continuing, or if an Event of Default or Unmatured Default has occurred and is continuing, describing the nature thereof and the action which the Account Party proposes to take with respect thereto and (Y) demonstrating compliance with Section 7.02(d) hereof for and as of the end of such fiscal year, such demonstration to be in a schedule (in form satisfactory to the Agent) which sets forth the computations used in determining such compliance;
(iv) as soon as possible and in any event (A) within 30 days after the Chief Financial Officer, Treasurer or any Assistant Treasurer of the Account Party knows or has reason to know that any ERISA Plan Termination Event described in clause (i) of the definition of ERISA Plan Termination Event with respect to any ERISA Plan or ERISA Multiemployer Plan has occurred and (B) within 10 days after the Account Party knows or has reason to know that any other ERISA Plan Termination Event with respect to any ERISA Plan or ERISA Multiemployer Plan has occurred, a statement of the Chief Financial Officer, Treasurer or Assistant Treasurer of the Account Party describing such ERISA Plan Termination Event and the action, if any, which the Account Party proposes to take with respect thereto;
(v) promptly after receipt thereof by the Account Party or any of its ERISA Affiliates from the PBGC, copies of each notice received by the Account Party or any such ERISA Affiliate of the PBGC's intention to terminate any ERISA Plan or ERISA Multiemployer Plan or to have a trustee appointed to administer any ERISA Plan or ERISA Multiemployer Plan;
(vi) promptly after receipt thereof by the Account Party or any of its ERISA Affiliates from an ERISA Multiemployer Plan sponsor, a copy of each notice received by the Account Party or any of its ERISA Affiliates concerning the imposition or amount of withdrawal liability in an aggregate principal amount of at least $1,000,000 pursuant to Section 4202 of ERISA in respect of which the Account Party may be liable;
(vii) promptly after the Account Party or any Subsidiary becomes aware of the commencement thereof, notice of all actions, suits, proceedings or other events of the type described in Section 6.01(g) hereof;
(viii) promptly after the filing thereof, copies of each prospectus (excluding any prospectus contained in any Form S-8) and Current Report on Form 8-K, if any, which the Account Party or any Principal Subsidiary files with the Securities and Exchange Commission or any governmental authority which may be substituted therefor;
(ix) promptly after receipt thereof, any assertion of the character described in Section 8.01(h) hereof and the action the Account Party proposes to take with respect thereto; and
(x) promptly after requested, such other information respecting the financial condition, operations, properties, prospects or otherwise, of the Account Party or its Subsidiaries as the Agent on behalf of the Majority Lenders may from time to time reasonably request in writing.
ARTICLE VIII
DEFAULTS
SECTION 8.01. Events of Default. The following events shall each constitute an Event of Default if the same shall occur and be continuing after the grace period and notice requirement (if any) applicable thereto:
(a) The Account Party shall fail to pay any interest on any Advance or pursuant to Section 4.02 hereof within two days after the same becomes due; or the Account Party shall fail to reimburse the Issuing Bank for any Interest Drawing (as defined in the Letter of Credit) within two days after such reimbursement becomes due; or the Account Party shall fail to pay any fees or commissions hereunder within five days after the same becomes due; or the Account Party shall fail to make any other payment required to be made pursuant to Article II or Article III hereof when due; or
(b) Any representation or warranty made by the Account Party (or any of its officers or agents) in this Agreement, the Pledge Agreement or the Purchase Contract, or in any certificate or other writing delivered pursuant to this Agreement or the Purchase Contract, shall prove to have been incorrect in any material respect when made or deemed made; or
(c) The Account Party shall fail to perform or observe any term or covenant on its part to be performed or observed contained in Sections 7.01(d), Section 7.02(b) or (d), or Section 7.03(i) hereof; or
(d) The Account Party shall fail to perform or observe any other term or covenant on its part to be performed or observed contained in this Agreement or the Pledge Agreement and any such failure shall remain unremedied, after the earlier of written notice having been given to the Account Party by the Agent, the Issuing Bank or any Participating Bank, and actual knowledge thereof by the Account Party, for a period of 30 days; or
(e) The Account Party or any Principal Subsidiary shall fail to pay any of its Debt when due (including any interest or premium thereon but excluding Debt arising hereunder and excluding other Debt aggregating in no event more than $10,000,000 in principal amount at any one time) whether by scheduled maturity, required prepayment, acceleration, demand or otherwise, and such failure shall continue after the applicable grace period, if any, specified in any agreement or instrument relating to such Debt; or any other default under any agreement or instrument relating to any such Debt, or any other event, shall occur and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such default or event is to accelerate, or to permit the acceleration of, the maturity of such Debt; or any such Debt shall be declared to be due and payable, or required to be prepaid (other than by a regularly scheduled required prepayment or as a result of the Account Party's or such Principal Subsidiary's exercise of a prepayment option) prior to the stated maturity thereof; or
(f) The Account Party or any Principal Subsidiary shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall make an assignment for the benefit of creditors; or any proceeding shall be instituted by or against the Account Party or such Principal Subsidiary seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of its debts under any law relating to bankruptcy, insolvency, or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, or other similar official for it or for any substantial part of its property and, in the case of a proceeding instituted against the Account Party or such Principal Subsidiary, either the Account Party or such Principal Subsidiary shall consent thereto or such proceeding shall remain undismissed or unstayed for a period of 90 days or any of the actions sought in such proceeding (including without limitation the entry of an order for relief against the Account Party or such Principal Subsidiary or the appointment of a receiver, trustee, custodian or other similar official for the Account Party or such Principal Subsidiary or any of its property) shall occur; or the Account Party or such Principal Subsidiary shall take any corporate or other action to authorize any of the actions set forth above in this subsection (f); or
(g) Any judgment or order for the payment of money in excess of $10,000,000 shall be rendered against the Account Party or its properties, or any Principal Subsidiary or its properties, and either (i) enforcement proceedings shall have been commenced by any creditor upon such judgment or order and shall not have been stayed or (ii) there shall be any period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or
(h) Any material provision of any Loan Document or any Related
Document shall for any reason other than the express terms thereof or the
exercise of any right or option expressly contained therein cease to be
valid and binding on the Account Party, or shall be determined to be
invalid or unenforceable by any court, governmental agency or authority
having jurisdiction over the Account Party, or the Account Party shall deny
that it has any further liability or obligation under this Agreement or any
Related Document, or any party to a Related Document shall so assert in
writing; provided, that in the case of any party other than the Account
Party making such assertion in respect of any Related Document, such
assertion shall not in and of itself constitute an Event of Default
hereunder until (i) such asserting party shall cease to perform under and
in compliance with such Related Document, (ii) the Account Party shall fail
to diligently prosecute, by appropriate action or proceedings, a rescission
of such assertion or a binding determination as to the merits thereof or
(iii) such a binding determination shall have been made in favor of such
asserting party's position; or
(i) The Security Documents shall for any reason, except to the extent permitted by the terms thereof, fail or cease to create valid and perfected Liens (to the extent purported to be granted by such documents and subject to the exceptions permitted thereunder) in any of the Collateral (other than Liens in favor of the Trustee with respect to the interests of the Issuer under the Indenture Documents), provided, that such failure or cessation relating to any non-material portion of such Collateral shall not constitute an Event of Default hereunder unless the same shall not have been corrected within 30 days after the Account Party becomes aware thereof; or
(j) NU shall cease to own 100% of the issued and outstanding shares of the capital stock of the Account Party having ordinary voting power for the election of directors, free and clear of any Liens; or
(k) An event of default (as defined therein) shall have occurred and be continuing under the Indenture Documents.
SECTION 8.02. Remedies Upon Events of Default. Upon the occurrence and during the continuance of any Event of Default, then, and in any such event, the Agent with the concurrence of the Issuing Bank and the Majority Lenders may, and upon the direction of the Issuing Bank and the Majority Lenders the Agent shall (i) if the Letter of Credit shall not have been issued, instruct the Issuing Bank to (whereupon the Issuing Bank shall) by notice to the Account Party declare its commitment to issue the Letter of Credit to be terminated, whereupon the same shall forthwith terminate, (ii) if the Letter of Credit shall have been issued, instruct the Issuing Bank to (whereupon the Issuing Bank shall) furnish to the Trustee and the Paying Agent, at their respective corporate trust offices as provided in the Indenture Documents, written notice of such Event of Default in accordance with Section 8.1(A)(4)(1) of the Indenture and of the Issuing Bank's determination to terminate the Letter of Credit on the fifth business day (as defined in the Indenture) following the Trustee's and Paying Agent's receipt of such written notice, (iii) if the Letter of Credit shall have been issued, instruct the Issuing Bank to (whereupon the Issuing Bank shall) furnish to the Trustee and the Paying Agent written notice that the Interest Component will not be reinstated in the amount of one or more Interest Drawings, all as provided in the Letter of Credit; (iv) declare the Advances and all other principal amounts outstanding hereunder, all interest thereon and all other amounts payable hereunder to be forthwith due and payable, whereupon the Advances and all other principal amounts outstanding hereunder, all such interest and all such other amounts shall become and be forthwith due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Account Party, and (v) instruct the Issuing Bank to (whereupon the Issuing Bank shall) exercise all the rights and remedies provided herein and under and in respect of the Security Documents; provided, however, that in the event of the occurrence of any Event of Default described in Section 8.01(f) with respect to the Account Party, (A) the commitment of the Issuing Bank to issue the Letter of Credit and the Commitments and the obligations of the Participating Banks to make Advances shall automatically be terminated, and (B) the Advances and all other principal amounts outstanding hereunder, all interest accrued and unpaid thereon and all other amounts payable hereunder shall automatically become due and payable, without presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by the Account Party.
ARTICLE I
THE AGENT, THE PARTICIPATING BANKS AND THE ISSUING BANK
SECTION 9.01. Authorization of Agent; Actions of Agent and Issuing Bank. The Issuing Bank and each Participating Bank hereby appoint and authorize the Agent to take such action as agent on their behalf and to exercise such powers under this Agreement as are delegated to the Agent by the terms hereof, together with such powers as are reasonably incidental thereto; provided, however, that neither the Agent nor the Issuing Bank shall be required to take any action which exposes the Agent or the Issuing Bank to personal liability or which is contrary to this Agreement or applicable law. As to any matters not expressly provided for by any Related Document (including, without limitation, enforcement or collection thereof), neither the Agent nor the Issuing Bank shall be required to exercise any discretion or take any action. The Agent agrees to deliver promptly (i) to the Issuing Bank and each Participating Bank copies of each notice delivered to it by the Account Party and (ii) to each Participating Bank copies of each notice delivered to it by the Issuing Bank, in each case pursuant to the terms of this Agreement.
SECTION 9.02. Reliance, Etc. Neither the Agent, the Issuing Bank, nor any of their directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by it or them under or in connection with this Agreement or any Related Document, except for its or their own gross negligence or willful misconduct as determined by a court of competent jurisdiction. Without limitation of the generality of the foregoing, each of the Agent and the Issuing Bank (i) may consult with legal counsel (including counsel for the Account Party), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (ii) makes no warranty or representation to any Participating Bank and shall not be responsible to any Participating Bank for any statements, warranties or representations made in or in connection with this Agreement or any Related Document; (iii) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement or any Related Document on the part of the Account Party to be performed or observed, or to inspect any property (including the books and records) of the Account Party; (iv) shall not be responsible to any Participating Bank for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any Related Document or any other instrument or document furnished pursuant hereto and thereto; and (v) shall incur no liability under or in respect of this Agreement or any Related Document by acting upon any notice, consent, certificate or other instrument or writing (which may be by telegram, cable or telex), including, without limitation, any thereof from time to time purporting to be from the Trustee, believed by it to be genuine and signed or sent by the proper party or parties.
SECTION 9.03. The Agent, the Issuing Bank and Affiliates. The Agent and the Issuing Bank shall have the same rights and powers under this Agreement as any other Participating Bank and may exercise (or omit from exercising) the same as though they were not the Agent and the Issuing Bank, respectively, and the term Participating Bank shall, unless otherwise expressly indicated, include UBS in its individual capacity. The Agent, the Issuing Bank and their respective Affiliates may accept deposits from, lend money to, act as trustee under indentures of, and generally engage in any kind of business with, the Account Party, any of its subsidiaries and any Person who may do business with or own securities of the Account Party or any such subsidiary, all as if UBS was not the Agent or the Issuing Bank, and without any duty to account therefor to the Participating Banks.
SECTION 9.04. Participating Bank Credit Decision. Each of the Issuing Bank and each Participating Bank acknowledges that it has, independently and without reliance upon the Agent, the Issuing Bank or any other Participating Bank and based on the financial information referred to in Section 6.01(f) hereof and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each of the Issuing Bank and each Participating Bank also acknowledges that it will, independently and without reliance upon the Agent, the Issuing Bank or any other Participating Bank and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement.
SECTION 9.05. Indemnification. The Participating Banks agree to indemnify the Agent and the Issuing Bank (to the extent not reimbursed by the Account Party), ratably according to their respective Participation Percentages, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against the Agent or the Issuing Bank in any way relating to or arising out of this Agreement or any action taken or omitted by the Agent or the Issuing Bank under this Agreement, provided that no Participating Bank shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the Agent's or the Issuing Bank's gross negligence or willful misconduct. Without limitation of the foregoing, each Participating Bank agrees to reimburse the Agent and the Issuing Bank promptly upon demand for its ratable share of any amounts for which the Agent and the Issuing Bank are entitled to reimbursement or indemnity pursuant to Section 10.04 hereof but are not reimbursed by the Account Party.
SECTION 9.06. Successor Agent. The Agent may resign at any time by giving written notice thereof to the Issuing Bank, the Participating Banks and the Account Party, with any such resignation to become effective only upon the appointment of a successor Agent pursuant to this Section 9.06. Upon any such resignation, the Issuing Bank shall have the right to appoint a successor Agent, which shall be another commercial bank or trust company reasonably acceptable to the Account Party, organized or licensed under the laws of the United States, or of any State thereof. Upon the acceptance of any appointment as Agent hereunder by a successor Agent and the execution and delivery by the Account Party and the successor Agent of an agreement relating to the fees, if any, to be paid to the successor Agent in connection with its acting as Agent hereunder, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations under this Agreement. After any retiring Agent's resignation hereunder as Agent, the provisions of this Article IX shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement.
SECTION 9.07. Issuing Bank. (a) All notices received by the Issuing Bank pursuant to this Agreement or any Related Document (other than the Letter of Credit) shall be promptly delivered to the Agent for distribution to the Participating Banks.
(b) The Issuing Bank shall not amend or waive any provision or consent to the amendment or waiver of any Related Document without the written consent of the Majority Lenders.
(c) Upon receipt by the Issuing Bank from time to time of any amount pursuant to the terms of any Related Document (other than pursuant to the terms of this Agreement), the Issuing Bank shall promptly deliver to the Agent such amount.
ARTICLE
MISCELLANEOUS
SECTION 10.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Pledge Agreement, nor consent to any
departure by the Account Party therefrom, shall in any event be effective
unless the same shall be in writing and signed by the Majority Lenders, and
then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided, however,
that no amendment, waiver or consent shall, unless in writing and signed by
the Issuing Bank and all the Participating Banks, do any of the following:
(a) waive, modify or eliminate any of the conditions specified in Article
V, (b) increase the Commitments of the Participating Banks that may be
maintained hereunder or subject the Participating Banks to any additional
obligations, (c) reduce the principal of, or interest on, the Advances, any
amount reimbursable on demand pursuant to Section 3.01, or any fees or
other amounts payable hereunder, (d) postpone any date fixed for any
payment of principal of, or interest on, the Advances, such reimbursable
amounts or any fees or other amounts payable hereunder (other than fees
payable to the Issuing Bank or the Agent pursuant to Section 2.03(b)
hereof), (e) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Advances, or the number of Participating
Banks which shall be required for the Participating Banks or any of them to
take any action hereunder, (f) amend this Agreement or the Pledge Agreement
in a manner intended to prefer one or more Participating Banks over any
other Participating Banks, (g) amend this Section 10.01, or (h) release any
of the Collateral otherwise than in accordance with any provisions for such
release contained in the Security Documents, or change any provision of any
Security Document providing for the release of all or substantially all of
the Collateral; and provided, further, that no amendment, waiver or consent
shall, unless in writing and signed by the Issuing Bank or the Agent in
addition to the Participating Banks required above to take such action,
affect the rights or duties of the Issuing Bank or the Agent, as the case
may be, under this Agreement or the Pledge Agreement.
SECTION 10.02. Notices, Etc. All notices and other communications provided for hereunder and under the other Loan Documents shall be in writing (including telegraphic, telex, telecopy or cable communication) and mailed, telegraphed, telexed, telecopied, cabled or delivered:
(i) if to the Account Party, to it in care of Northeast Utilities Service Company at 107 Selden Street, Berlin, Connecticut 06037 (telecopy: (203) 665-5457), Attention: Assistant Treasurer;
(ii) if to the Issuing Bank or the Agent, to it at its address
at 299 Park Avenue, New York, New York 10171-0026 Attention: Loan
Servicing Department, James Brodus (telephone: (212) 715-3227, telecopy:
(212) 715- 3891), with a copy to Christopher W. Criswell, (telephone: (212)
715-3317, telecopy: (212) 715-3878);
(iii) if to any Participating Bank, to it at its address set forth on the signature pages hereof or in the Participation Assignment pursuant to which it became a Participating Bank; or
as to each party other than any Participating Bank, at such other address as shall be designated by such party in a written notice to the other parties, and, as to any Participating Bank, at such other address as shall be designated by such Participating Bank in a written notice to the Account Party and the Agent. All such notices and communications shall, when mailed, telegraphed, telexed, telecopied or cabled, be effective five days after when deposited in the mails, or when delivered to the telegraph company, confirmed by telex answerback, telecopied or delivered to the cable company, respectively, except that notices and communications to the Agent or the Issuing Bank pursuant to Article II, III or IV shall not be effective until received by the Agent or the Issuing Bank, as the case may be.
SECTION 10.03. No Waiver of Remedies. No failure on the part of any Participating Bank or the Issuing Bank to exercise, and no delay in exercising, any right hereunder or under any Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.
SECTION 10.04. Costs, Expenses and Indemnification. (a) The Account Party agrees to pay on demand all costs and expenses, if any (including, without limitation, reasonable counsel fees and expenses including, in the case of clause (ii) below, the reasonable allocated cost of internal counsel), of (i) the Agent and the Issuing Bank in connection with the preparation, negotiation, execution and delivery of the Loan Documents and the administration of the Loan Documents, the care and custody of any and all collateral, and any proposed modification, amendment, or consent relating thereto; and (ii) the Agent, the Issuing Bank and each Participating Bank in connection with the enforcement (whether through negotiations, legal proceedings or otherwise) of this Agreement, the Second Mortgage or any other Loan Document.
(b) The Account Party hereby agrees to indemnify and hold the Agent, the Issuing Bank and each Participating Bank and their respective officers, directors, employees, professional advisors and affiliates (each, an Indemnified Person ) harmless from and against any and all claims, damages, losses, liabilities, costs or expenses (including reasonable attorney's fees and expenses, whether or not such Indemnified Person is named as a party to any proceeding or investigation or is otherwise subjected to judicial or legal process arising from any such proceeding or investigation) which any of them may incur or which may be claimed against any of them by any person or entity (except to the extent such claims, damages, losses, liabilities, costs or expenses arise from the gross negligence or willful misconduct of the Indemnified Person):
(i) by reason of or in connection with the execution, delivery or performance of any of the Loan Documents, the Second Mortgage or the Related Documents or any transaction contemplated thereby, or the use by the Account Party of the proceeds of any Advance or the use by the Paying Agent or the Trustee of the proceeds of any drawing under the Letter of Credit;
(ii) in connection with or resulting from the utilization, storage, disposal, treatment, generation, transportation, release or ownership of any Hazardous Substance (A) at, upon or under any property of the Account Party or any of its Affiliates or (B) by or on behalf of the Account Party or any of its Affiliates at any time and in any place;
(iii) in connection with any documentary taxes, assessments or charges made by any governmental authority by reason of the execution and delivery of any of the Loan Documents or the Second Mortgage;
(iv) by reason of or in connection with the execution and delivery or transfer of, or payment or failure to make payment under, the Letter of Credit; provided, however, that the Account Party shall not be required to indemnify the Agent, the Issuing Bank or any Participating Bank pursuant to this Section for any claims, damages, losses, liabilities, costs or expenses to the extent caused by (A) the Issuing Bank's willful misconduct or gross negligence, as determined by a court of competent jurisdiction, in determining whether documents presented under the Letter of Credit are genuine or comply with the terms of the Letter of Credit or (B) the Issuing Bank's willful or grossly negligent failure, as determined by a court of competent jurisdiction, to make lawful payment under the Letter of Credit after the presentation to it by the Paying Agent of a draft and certificate strictly complying with the terms and conditions of the Letter of Credit; or
(v) by reason of any inaccuracy or alleged inaccuracy in any material respect, or any untrue statement or alleged untrue statement of any material fact, contained in any Preliminary Official Statement or Official Statement relating to the Bonds or any amendment or supplement thereto, except to the extent contained in or arising from information in any Preliminary Official Statement or Official Statement relating to the Bonds supplied in writing by and describing the Issuing Bank.
(c) Nothing contained in this Section 10.04 is intended to limit the Account Party's obligations set forth in Articles II, III and IV. The Account Party's obligations under this Section 10.04 shall survive the creation and sale of any participation interest pursuant to Section 10.06 hereof and shall survive as well the repayment of all amounts owing to the Agent, the Issuing Bank and the Participating Banks under the Loan Documents and the termination of the Commitments. If and to the extent that the obligations of the Account Party under this Section 10.04 are unenforceable for any reason, the Account Party agrees to make the maximum contribution to the payment and satisfaction thereof which is permissible under applicable law.
SECTION 10.05. Right of Set-off. (a) Upon (i) the occurrence and
during the continuance of any Event of Default and (ii) the taking of any
action or the giving of any instruction by the Agent as specified by
Section 8.02 hereof, the Issuing Bank and each Participating Bank are
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by the Issuing Bank or such Participating
Bank to or for the credit or the account of the Account Party against any
and all of the obligations of the Account Party now or hereafter existing
under this Agreement in favor of the Issuing Bank or such Participating
Bank, irrespective of whether or not the Issuing Bank or such Participating
Bank shall have made any demand under this Agreement and although such
obligations may be unmatured. The Issuing Bank and each Participating Bank
agrees promptly to notify the Account Party after any such set-off and
application provided that the failure to give such notice shall not affect
the validity of such set-off and application. The rights of the Issuing
Bank and each Participating Bank under this Section are in addition to
other rights and remedies (including, without limitation, other rights of
set-off) which the Issuing Bank and/or such Participating Bank may have.
(b) The Account Party agrees that it shall have no right of off-set, deduction or counterclaim in respect of its obligations hereunder, and that the obligations of the Issuing Bank and of the several Participating Banks hereunder are several and not joint. Nothing contained herein shall constitute a relinquishment or waiver of the Account Party's rights to any independent claim that the Account Party may have against the Issuing Bank or any Participating Bank, but no Participating Bank shall be liable for the conduct of the Issuing Bank or any other Participating Bank, and the Issuing Bank shall not be liable for the conduct of any Participating Bank.
SECTION 10.06. Binding Effect; Assignments and Participants. (a) This Agreement shall become effective when it shall have been executed and delivered by the Account Party, the Agent, the Issuing Bank and each Participating Bank named on the signature pages hereto and thereafter shall be binding upon and inure to the benefit of the Account Party, the Agent, the Issuing Bank and each Participating Bank and their respective successors and assigns, except that the Account Party shall not have the right to assign its rights hereunder or any interest herein nor transfer any of its obligations without the prior written consent of the Issuing Bank and each Participating Bank, and the Issuing Bank may not assign its commitment to issue the Letter of Credit or its obligations under or in respect of the Letter of Credit.
(b) Each Participating Bank may assign all or any portion of its rights and transfer its obligations under this Agreement, under the Letter of Credit or in any security hereunder, including, without limitation, any instruments securing the Account Party's obligations hereunder; provided that (i) no assignment by any Participating Bank may be made to any Person, except with the prior written consent of (A) the Account Party (which consent shall not be unreasonably withheld and, in the case of an assignment to another Participating Bank or to an Affiliate of a Participating Bank, shall not be required) and (B) the Issuing Bank, (ii) any assignment shall be of a constant and not a varying percentage of all of the assignor's rights and obligations hereunder and (iii) the parties to each such assignment shall execute and deliver to the Agent a Participation Assignment, together with a processing fee of $3,000. Upon receipt of a completed Participation Assignment and the processing fee, the Agent will record in a register maintained for such purpose the name of the assignee and the percentage participation interest assigned by the assignor and assumed by the assignee for purposes of the determination of such assignor's and assignee's respective Participation Percentages. Upon such execution, delivery, acceptance and recording, from and after the effective date specified in each Participation Assignment, which effective date shall be at least five Business Days after the execution thereof, the assignee shall, to the extent of such assignment, become a party hereto and have all of the rights and obligations of a Participating Bank hereunder and, to the extent of such assignment, such assigning Participating Bank shall be released from its obligations hereunder (without relieving such Participating Bank from any liability for damages, costs and expenses suffered by the Issuing Bank or the Account Party as a result of the failure by such Participating Bank to perform its obligations hereunder).
(c) Each Participating Bank may grant participations to one or more
Persons in all or any part of, or any interest (undivided or divided) in,
such Participating Bank's rights and obligations under this Agreement (any
such Person being referred to hereinafter as a Participant and such
interests are collectively, referred to hereinafter as the Rights );
provided, however, that (i) such Participating Bank's obligations under
this Agreement shall remain unchanged; (ii) any such Participant shall be
entitled to the benefits and cost protections provided for in Section 4.03
hereof on the same basis as if it were a Participating Bank hereunder;
(iii) the Account Party, the Agent and the Issuing Bank shall continue to
deal solely and directly with such Participating Bank in connection with
such Participating Bank's rights and obligations under this Agreement; and
(iv) no such Participant, other than an Affiliate of such Participating
Bank, shall be entitled to require such Participating Bank to take or omit
to take any action hereunder, unless such action or omission would have an
effect of the type described in subsections (c), (d) or (h) of Section
10.01 hereof.
(d) Notwithstanding anything contained in this Section 10.06 to the contrary, the Issuing Bank and any Participating Bank may assign and pledge all or any portion of the Advances (or participating interests therein) owing to the Issuing Bank or such Participating Bank to any Federal Reserve Bank (and its transferees) as collateral security pursuant to Regulation A of the Board of Governors of the Federal Reserve System and any Operating Circular issued by such Federal Reserve Bank. No such assignment shall release the Issuing Bank or such Participating Bank from its obligations hereunder.
SECTION 10.07. Relation of the Parties; No Beneficiary. No term, provision or requirement, whether express or implied, of any Loan Document, or actions taken or to be taken by any party thereunder, shall be construed to create a partnership, association, or joint venture between such parties or any of them. No term or provision of the Loan Documents shall be construed to confer a benefit upon, or grant a right or privilege to, any Person other than the parties hereto.
SECTION 10.08. Issuing Bank Not Liable. As between the Agent, the Issuing Bank and the Participating Banks on the one hand, and the Account Party on the other, the Account Party assumes all risks of the acts or omissions of the Paying Agent, the Trustee and any other beneficiary or transferee of the Letter of Credit with respect to its use of the Letter of Credit. Neither the Agent, the Issuing Bank, any Participating Bank, nor any of their respective officers or directors shall be liable or responsible for: (a) the use which may be made of the Letter of Credit or any acts or omissions of the Paying Agent, the Trustee and any other beneficiary or transferee in connection therewith; (b) the validity, sufficiency or genuineness of documents, or of any endorsement thereon, even if such documents should prove to be in any or all respects invalid, insufficient, fraudulent or forged; (c) payment by the Issuing Bank against presentation of documents which do not comply with the terms of the Letter of Credit, including failure of any documents to bear any reference or adequate reference to the Letter of Credit; or (d) any other circumstances whatsoever in making or failing to make payment under the Letter of Credit, except that the Account Party shall have a claim against the Issuing Bank, and the Issuing Bank shall be liable to the Account Party, to the extent of any direct, as opposed to consequential, damages suffered by the Account Party which the Account Party proves were caused by (i) the Issuing Bank's willful misconduct or gross negligence, as determined by a court of competent jurisdiction, in determining whether documents presented under the Letter of Credit are genuine or comply with the terms of the Letter of Credit or (ii) the Issuing Bank's willful or grossly negligent failure, as determined by a court of competent jurisdiction, to make lawful payment under the Letter of Credit after the presentation to it by the Paying Agent of a draft and certificate strictly complying with the terms and conditions of the Letter of Credit. In furtherance and not in limitation of the foregoing, the Issuing Bank may accept original or facsimile (including telecopy) sight drafts and accompanying certificates presented under the Letter of Credit that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary.
SECTION 10.09. Confidentiality. In connection with the negotiation and administration of this Agreement and the other Loan Documents, the Account Party has furnished and will from time to time furnish to the Agent, the Issuing Bank and the Participating Banks (each, a Recipient ) written information which is identified to the Recipient when delivered as confidential (such information, other than any such information which (i) was publicly available, or otherwise known to the Recipient, at the time of disclosure, (ii) subsequently becomes publicly available other than through any act or omission by the Recipient or (iii) otherwise subsequently becomes known to the Recipient other than through a Person whom the Recipient knows to be acting in violation of his or its obligations to the Account Party, being hereinafter referred to as Confidential Information ). The Recipient will not knowingly disclose any such Confidential Information to any third party (other than to those Persons who have a confidential relationship with the Recipient), and will take all reasonable steps to restrict access to such information in a manner designed to maintain the confidential nature of such information, in each case until such time as the same ceases to be Confidential Information or as the Account Party may otherwise instruct. It is understood, however, that the foregoing will not restrict the Recipient's ability to freely exchange such Confidential Information with prospective assignees of or participants in the Recipient's position herein, but the Recipient's ability to so exchange Confidential Information shall be conditioned upon any such prospective assignee's or participant's entering into an understanding as to confidentiality similar to this provision. It is further understood that the foregoing will not prohibit the disclosure of any or all Confidential Information in any litigation or proceedings between the Account Party and such Recipient and/or if and to the extent that such disclosure may be required (i) by a regulatory agency or otherwise in connection with an examination of the Recipient's records by appropriate authorities, (ii) pursuant to court order, subpoena or other legal process or (iii) otherwise, as required by law; in the event of any required disclosure under clause (ii) or (iii), above, the Recipient agrees to use reasonable efforts to inform the Account Party as promptly as practicable unless the Recipient is prohibited from doing so by court order, subpoena or other legal process.
SECTION 10.10 Waiver of Jury Trial. The Account Party, the Agent, the Issuing Bank, and the Participating Banks each hereby irrevocably waives all right to trial by jury in any action, proceeding or counterclaim arising out of or relating to this Agreement or any other Loan Document, or any other instrument or document delivered hereunder or thereunder.
SECTION 10.11. Governing Law. This Agreement and the Pledge Agreement shall be governed by, and construed in accordance with, the laws of the State of New York. The Account Party, the Agent, the Issuing Bank and each Participating Bank each (i) irrevocably submits to the jurisdiction of any New York State court or Federal court sitting in New York City in any action arising out of any Loan Document, (ii) agrees that all claims in such action may be decided in such court, (iii) waives, to the fullest extent it may effectively do so, the defense of an inconvenient forum and (iv) consents to the service of process by mail. A final judgment in any such action shall be conclusive and may be enforced in other jurisdictions. Nothing herein shall affect the right of any party to serve legal process in any manner permitted by law or affect its right to bring any action in any other court.
SECTION 10.12. Execution in Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
THE ACCOUNT PARTY:
WESTERN MASSACHUSETTS ELECTRIC COMPANY
By /s/ Bruce F. Garelick Title: Assistant Treasurer |
THE AGENT AND ISSUING BANK:
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH,
as Agent and as Issuing Bank
By /s/ Christopher W. Criswell Title: Vice President By /s/ Laura Monroe Singer Title: Assistant Treasurer |
THE PARTICIPATING BANKS:
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH
By /s/ Christopher W. Criswell Title: Vice President By /s/Laura Monroe Singer Title: Assistant Treasurer |
Participation Percentage: 100%
Address for Notices
Union Bank of Switzerland,
New York Branch
299 Park Avenue
New York, New York 10171- 0026
Attention: Loan Servicing
Dept., James Brodus
Telephone: (212) 715-3227
Fax: (212) 715-3891
With a Copy To:
Attention: Christopher W. Criswell
Telephone: (212) 715-3317
Fax: (212) 715-3878
SCHEDULE I
APPLICABLE LENDING OFFICES
Name of Domestic
Participating Bank Lending Office
Union Bank of Switzerland, 299 Park Avenue
New York Branch New York, NY 10022
Attn: Loan Servicing
Dept., James Brodus
Tel: (212) 715-3227
Fax: (212) 715- 3891
with a copy to:
Christopher W. Criswell
Tel: (212) 715-3317
Fax: (212) 715-3878
|
SCHEDULE II
PENDING ACTIONS
NONE
[Form of Letter of Credit - CDA/WMECO SERIES A]
EXHIBIT 1.01A
IRREVOCABLE LETTER OF CREDIT
NO. SBY502182
September 22, 1993
Shawmut Bank Connecticut, National Association
777 Main Street
Hartford, Connecticut 06115
Attention: Corporate Trust Department
Dear Sir or Madam:
We hereby establish, at the request and for the account of Western
Massachusetts Electric Company (the "Account Party"), in your favor, as
Paying Agent (the "Paying Agent") under that certain Indenture of Trust,
dated as of September 1, 1993 (the "Indenture"), by and between the
Connecticut Development Authority (the "Issuer") and Shawmut Bank
Connecticut, National Association, as trustee (the "Trustee"), pursuant to
which $53,800,000 in aggregate principal amount of the Issuer's Pollution
Control Revenue Refunding Bonds (Western Massachusetts Electric Company
Project - 1993A Series) (the "Bonds"), are being issued, our Irrevocable
Letter of Credit No. SBY502182, in the amount of US$54,596,000.00 (FIFTY-
FOUR MILLION FIVE HUNDRED NINETY-SIX THOUSAND AND NO ONE-HUNDREDTHS UNITED
STATES DOLLARS) (subject to reduction and reinstatement as provided below).
(1) Credit Termination Date. This Letter of Credit shall expire on
the earliest to occur of (i) September 22, 1996 (the "Stated Termination
Date"), (ii) the date upon which we honor a draft accompanying a written
and completed certificate signed by you in substantially the form of
Exhibit 2 attached hereto, and stating therein that such draft is the final
draft to be drawn under this Letter of Credit and that, upon the honoring
of such draft, this Letter of Credit will expire in accordance with its
terms, (iii) the date upon which we receive a written certificate signed by
you and stating therein that no Bonds entitled to the benefits of this
Letter of Credit (as determined in accordance with the Indenture)
("Eligible Bonds") are "Outstanding" under (and as defined in) the
Indenture, (iv) the fifth business day following receipt by you and the
Trustee of written notice from us that an Event of Default (as defined
below) has occurred under the Reimbursement Agreement (as defined below)
and of our determination to terminate this Letter of Credit on such fifth
business day and (v) the date upon which we receive a written certificate
signed by you and stating therein that a substitute or replacement Credit
Facility (as defined in the Indenture) has been provided pursuant to
Section 3.12 of the "Agreement" referred to (and as defined) in the
Indenture (such earliest date being the "Credit Termination Date").
As used herein, the term "business day" shall mean any day of the year
(i) that is not a Saturday or Sunday, (ii) that is a day on which banks
located in Hartford, Connecticut and New York, New York are not required or
authorized to remain closed and (iii) that is a day on which banking
institutions in all of the cities in which the principal offices of the
Trustee, the Paying Agent and the Remarketing Agent (as defined in the
Indenture) are located are not required or authorized to remain closed and
(iv) that is a day on which the New York Stock Exchange, Inc. is not
closed.
As used herein "Reimbursement Agreement" shall mean the Letter of Credit and Reimbursement Agreement, dated as of September 1, 1993, between the Account Party, us and certain Participating Banks referred to therein, and the term "Event of Default" shall mean an "Event of Default" as that term is defined in the Reimbursement Agreement.
(2) Principal, Interest and Premium Components. The aggregate amount which may be drawn under this Letter of Credit, subject to reductions in amount and reinstatement as provided below, is US$54,596,000.00 (FIFTY-FOUR MILLION FIVE HUNDRED NINETY-SIX THOUSAND AND NO ONE-HUNDREDTHS UNITED STATES DOLLARS), of which the aggregate amounts set forth below may be drawn as indicated.
(i) An aggregate amount not exceeding US$53,800,000.00 (FIFTY-
THREE MILLION EIGHT HUNDRED THOUSAND AND NO ONE-HUNDREDTHS UNITED
STATES DOLLARS), as such amount may be reduced and reinstated as
provided below, may be drawn in respect of payment of principal
(whether upon scheduled or accelerated maturity, or upon redemption)
of Eligible Bonds or the portion of the purchase price of Eligible
Bonds corresponding to principal (the "Principal Component").
(ii) An aggregate amount not exceeding US$796,000.00 (SEVEN HUNDRED NINETY-SIX THOUSAND AND NO ONE-HUNDREDTHS UNITED STATES DOLLARS), as such amount may be reduced and reinstated as provided below, may be drawn in respect of payment of (A) accrued and unpaid interest on Eligible Bonds not in the Flexible Mode (as defined in the Indenture) or that portion of the redemption price or purchase price of such Eligible Bonds corresponding to accrued and unpaid interest, but not more than an amount equal to accrued and unpaid interest on such Eligible Bonds for up to a maximum of 45 days immediately preceding the date of such drawing and (B) unpaid interest (whether accrued or to accrue) on Eligible Bonds in the Flexible Mode or that portion of the redemption price or purchase price of such Eligible Bonds corresponding to such interest, but not more than an amount equal to such interest on such Eligible Bonds for up to a maximum of 45 days immediately preceding the next Purchase Date (as defined in the Indenture) for each such Eligible Bond (or, if interest on any such Eligible Bond was not paid on the most recent Purchase Date for such Bond, for up to a maximum of 45 days immediately preceding the date of such drawing), calculated, in each case referred to in the foregoing clause (A) or clause (B) at a maximum rate of twelve percent (12%) per annum, or such lesser rate of interest as shall equal the Maximum Interest Rate (as defined in the Indenture) in effect under the Indenture with respect to such Eligible Bonds, and in any case calculated on the basis of a year of 365 or 366 days (as applicable) for the actual days elapsed (the "Interest Component").
(iii) An aggregate amount not exceeding US$0.00 (ZERO UNITED STATES DOLLARS) may be drawn in respect of premium on Eligible Bonds (the "Premium Component"). If, subsequent to the date hereof, the Premium Component shall be increased by us at the request of the Account Party, the Premium Component shall be subject to reduction as provided below, and amounts drawn in respect thereof shall not be subject to reinstatement.
(3) Drawings. Funds under this Letter of Credit are available to you against (i) your draft, stating on its face: "Drawn under Irrevocable Letter of Credit No. SBY502182, dated September 22, 1993", and (ii) the appropriate certificate specified below, purportedly executed by you and appropriately completed.
Exhibit Setting Forth
Type of Drawing Form of Certificate Required
Tender Drawing Exhibit 1
(as hereinafter defined)
Redemption/Mandatory Exhibit 2
Purchase Drawing
(as hereinafter defined)
Interest Drawing Exhibit 3
(as hereinafter
defined)
|
Drafts and certificates hereunder shall be dated the date of presentation and shall be presented at our office located at 299 Park Avenue, New York, New York 10171-0026 Attention: Loan Servicing Department, James Brodus (telephone: (212) 715-3227) (or at such other office as we may designate by written notice to you) with a copy to Christopher W. Criswell (telephone: (212) 715-3317), FAX: (212) 715-3878). Presentation of such drafts and certificates may be made (a) by physical presentation of such drafts and certificates or (b) by facsimile transmission of such drafts and certificates received by us at (212) 715- 3891 (or at such other number as we may designate by written notice to you) with prior telephone notice to us at (212) 715-3227, Attention: James Brodus, (or at such other number as we may designate by written notice to you; in any event with a copy to Christopher W. Criswell as aforesaid) that such presentation is to be made by facsimile transmission and with the original executed drafts and certificates to be received by us not later than our close of business on the next business day, it being understood that payments hereunder shall be made upon receipt by us of such facsimile transmission; provided, however, that presentations of drafts and certificates relating to Tender Drawings in respect of Eligible Bonds in the Flexible Mode shall in all instances be made in accordance with the foregoing clause (b). Drafts drawn under and in strict compliance with the terms of this Letter of Credit will be duly honored by us upon presentation thereof in accordance with this Paragraph 3 if presented on or prior to 4:00 P.M. (New York City time) on the Credit Termination Date as follows:
(i) Tender Drawings; Flexible Mode. In the case of drafts and certificates relating to Tender Drawings in respect of Eligible Bonds in the Flexible Mode presented in accordance with the foregoing clause (b):
(A) if such drafts and certificates are presented as aforesaid at or prior to 1:30 P.M. (New York City time) on a business day, and provided that such drafts and certificates strictly conform to the requirements of this Letter of Credit, we will initiate a wire transfer of the amount so drawn to your account indicated below at or prior to 3:30 P.M. (New York City time) on the same business day;
(B) if such drafts and certificates are presented as aforesaid after 1:30 P.M. but at or prior to 4:00 P.M. (New York City time) on a business day, and provided that such drafts and certificates strictly conform to the requirements of this Letter of Credit, we will initiate a wire transfer of the amount so drawn to your account indicated below at or prior to 10:00 A.M. on the business day next succeeding the business day on which such drafts and certificates were presented (notwithstanding that such day of presentation may have been the Credit Termination Date); and
(C) if such drafts and certificates are presented as aforesaid after 4:00 P.M. (New York City time) on a business day, and provided that such drafts and certificates strictly conform to the requirements of this Letter of Credit, we will initiate a wire transfer of the amount so drawn to your account indicated below at or prior to 1:00 P.M. (New York City time) on the business day next succeeding the business day on which such drafts and certificates were presented (notwithstanding that such day of presentation may have been the Credit Termination Date);
and
(ii) All Other Drawings: In the case of any other drafts and certificates:
(A) if such drafts and certificates are presented as aforesaid at or prior to 4:00 P.M. (New York City time) on a business day, and provided that such drafts strictly conform to the requirements of this Letter of Credit, we will initiate a wire transfer of the amount so drawn to your account indicated below at or prior to 10:00 A.M. (New York City time) on the business day next succeeding the business day on which such drafts and certificates were presented (notwithstanding that such day of presentation may have been the Credit Termination Date); and
(B) if such drafts and certificates are presented as aforesaid after 4:00 P.M. (New York City time) on a business day, and provided that such drafts and certificates strictly conform to the requirements of this Letter of Credit, we will initiate a wire transfer of the amount so drawn to your account indicated below at or prior to 1:00 P.M. (New York City time) on the business day next succeeding the business day on which such drafts and certificates were presented (notwithstanding that such day of presentation may have been the Credit Termination Date).
Wire transfers of funds paid in respect of any drawing hereunder shall be made to you at Shawmut Bank Connecticut, National Association, Hartford, Connecticut, ABA# 011900445, Account No. 0067548290 Corporate Trust Admin. Wire Account, Attention: K. Larimore, Reference: CDA/WMECO Series 1993A, or to such other account as you may from time to time specify to us in writing. All payments made by us under this Letter of Credit will be made with our own funds and not with any funds of the Account Party or the Issuer.
(4) Reductions. The Interest Component shall be reduced immediately
following our honoring any draft drawn hereunder to pay unpaid interest on
Eligible Bonds or to pay that portion of the purchase price or redemption
price corresponding to unpaid interest on Eligible Bonds, in each case by
an amount equal to the amount of such draft (any such drawing being an
"Interest Drawing"). The Principal Component shall be reduced immediately
following our honoring any draft drawn hereunder: (i) pursuant to Section
5.8(B) of the Indenture to pay that portion of purchase price corresponding
to principal of Eligible Bonds that are (A) subject to mandatory tender for
purchase pursuant to Section 2.3(G)(1)(c) or 2.3(G)(2)(d)(ii) of the
Indenture or (B) tendered for purchase by the holders thereof pursuant to
2.3(G)(2)(c) of the Indenture, (ii) pursuant to Section 5.8(C) of the
Indenture to pay that portion of purchase price corresponding to principal
of Eligible Bonds that are the subject of a failed conversion pursuant to
Section 2.3(G)(1)(b) or 2.3(G)(2)(b) of the Indenture, as appropriate (any
such drawing in respect of the circumstances referred to in the foregoing
clause (i) or this clause (ii) being a "Tender Drawing"), (iii) pursuant to
Section 5.8(A) of the Indenture to pay the principal of Eligible Bonds or
that portion of the redemption price of Eligible Bonds corresponding to
principal, whether at stated maturity, upon acceleration or upon
redemption, or (iv) pursuant to Section 5.8(B) of the Indenture to pay that
portion of the purchase price corresponding to principal of Eligible Bonds
that are subject to mandatory tender for purchase pursuant to Section
2.3(G)(2)(d)(i) of the Indenture (any such drawing in respect of the
circumstances referred to in the foregoing clause (iii) or in this clause
(iv) being a "Redemption/Mandatory Purchase Drawing"), in each such case by
an amount equal to the amount of such draft. The Premium Component shall
be reduced immediately following our honoring any draft drawn hereunder to
pay premium on Eligible Bonds in connection with a Redemption/Mandatory
Purchase Drawing, by an amount equal to the amount of such draft.
Additionally, upon receipt of a Notice of Reduction in the form of Exhibit 4 to this Letter of Credit purportedly executed by you, we will reduce the Principal Component, Interest Component and Premium Component to the amounts therein stated.
(5) Reinstatement. The Interest Component and the Principal
Component shall, from time to time, be reinstated by us in accordance with,
and only to the extent provided in, the following subparagraphs (i) and
(ii). In no event shall reductions in the Premium Component be reinstated.
(i) Interest Component. Reductions in the Interest Component resulting from Interest Drawings shall be reinstated as follows:
(A) Immediately following each drawing hereunder to pay unpaid interest on Eligible Bonds in the Flexible Mode or to pay that portion of purchase price, but not redemption price, corresponding to unpaid interest on Eligible Bonds in the Flexible Mode, the amount so drawn shall be automatically reinstated to the Interest Component unless, not later than the business day preceding such drawing you shall have received written notice from us that we will not reinstate the Interest Component in the amount of such drawing. On the fifth day following each drawing hereunder to pay accrued and unpaid interest on Eligible Bonds that are not in the Flexible Mode, or to pay that portion of purchase price, but not redemption price, corresponding to accrued and unpaid interest on Eligible Bonds that are not in the Flexible Mode, the amount so drawn shall be automatically reinstated to the Interest Component, unless you shall have theretofore received written notice from us that we will not reinstate the Interest Component in the amount of such drawing. Any notice of non-reinstatement delivered pursuant to this subparagraph (i)(A) shall be in writing and shall be delivered to you by hand delivery or facsimile transmission.
(B) If, subsequent to any such delivery of a notice of non- reinstatement as aforesaid, we shall deliver to you, by hand delivery or facsimile transmission, a Notice of Reinstatement in the form of Exhibit 5 hereto, then, upon such delivery to you, the Interest Component shall be immediately reinstated to the extent specified in such Notice of Reinstatement.
(C) In no event shall the Interest Component be reinstated to an amount in excess of 45 days' interest on Eligible Bonds, computed at the rate of 12% per annum on the basis of a year of 365 or 366 days (as applicable) for the actual days elapsed, or such lesser rate of interest as shall equal the Maximum Interest Rate (as defined in the Indenture) in effect under the Indenture with respect to such Eligible Bonds.
(ii) Principal Component. Reductions in the Principal Component resulting from Redemption/Mandatory Purchase Drawings shall in no event be reinstated. Reductions in the Principal Component resulting from Tender Drawings shall be reinstated as follows:
(A) Immediately upon receipt by us of proceeds from the remarketing of Pledged Bonds (as defined in the Indenture), or of written notice from you that you have received such proceeds (or a window receipt guaranteeing same day payment in immediately available funds of such proceeds as contemplated by Section 9.19(A) of the Indenture), the Principal Component shall be reinstated automatically by the amount of such proceeds.
(B) Immediately upon your receipt from us, by hand delivery or facsimile transmission, of a Notice of Reinstatement in the form of Exhibit 5 hereto, the Principal Component shall be immediately reinstated to the extent specified in such Notice of Reinstatement.
(C) In no event shall the Principal Component be reinstated to an amount in excess of the aggregate principal amount of Eligible Bonds then outstanding under the Indenture.
Any Notice of Reinstatement delivered to you in the form set forth in Exhibit 5 hereto, whether delivered pursuant to subparagraph (i) or subparagraph (ii), above, may be combined, in a single such Notice, with any other Notice of Reinstatement delivered pursuant to the other such subparagraph.
(6) Notices. Communications (other than drawings) with respect to this Letter of Credit shall be in writing and shall be addressed to us at 299 Park Avenue, New York, New York 10171-0026, Attention: Loan Servicing Department, James Brodus (telephone: (212) 715-3227, telecopy: (212) 715- 3891), with a copy to Christopher W. Criswell, (telephone: (212) 715-3317, telecopy: (212) 715-3878), (or at such other office as we may designate by written notice to you), specifically referring to the number of this Letter of Credit.
(7) Transfer. This Letter of Credit is transferable in its entirety (but not in part) to any transferee who has succeeded you as Paying Agent under the Indenture and may be successively so transferred. Transfer of the available balance under this Letter of Credit to such transferee shall be effected by the presentation to us of this Letter of Credit accompanied by a certificate substantially in form set forth in Exhibit 6.
(8) Governing Law, Etc. Except as otherwise provided herein, this Letter of Credit shall be governed by and construed in accordance with the Uniform Customs and Practices for Documentary Credits (1983 Revision) Publication No. 400 of the International Chamber of Commerce ("UCP") and, to the extent not inconsistent with the UCP, the laws of the State of New York, including the Uniform Commercial Code as in effect in the State of New York. This Letter of Credit sets forth in full our undertaking, and, except as expressly set forth herein, such undertaking shall not in any way be modified, amended, amplified or limited by reference to any document, instrument or agreement referred to herein (including, without limitation, the Bonds, the Indenture and the Reimbursement Agreement), except only the certificates and the drafts referred to herein; and any such reference shall not be deemed to incorporate herein by reference any document, instrument or agreement except for such certificates and such drafts. Whenever and wherever the terms of this Letter of Credit shall refer to the purpose of a draft hereunder, or the provisions of any agreement or document pursuant to which such draft may be presented hereunder, such purpose or provisions shall be conclusively determined by reference to the certificate accompanying such draft; in furtherance of this sentence, whether any drawing is in respect of payment of regularly scheduled interest on the Bonds or of principal of or interest on the Bonds upon scheduled or accelerated maturity or is a Tender Drawing or a Redemption/Mandatory Purchase Drawing shall be conclusively determined by reference to the certificate accompanying such drawing.
Very truly yours,
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH
By _________________________________
Title:
By _________________________________
Title:
EXHIBIT 1
TO THE LETTER OF CREDIT
CERTIFICATE FOR TENDER DRAWING
The undersigned, a duly authorized officer of _______________________, (the "Paying Agent"), hereby certifies as follows to UNION BANK OF SWITZERLAND, NEW YORK BRANCH (the "Bank"), with reference to Irrevocable Letter of Credit No. SBY502182 (the "Letter of Credit") issued by the Bank in favor of the Paying Agent. Terms defined in the Letter of Credit and used but not defined herein shall have the meanings given them in the Letter of Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for the holders of the Bonds.
(2) The Paying Agent is making a Tender Drawing under the Letter of Credit in the amount of $_________ pursuant to Section 5.8 of the Indenture to pay that portion of the purchase price corresponding to principal of Eligible Bonds that are
[subject to mandatory tender for purchase pursuant to Section
[2.3(G)(1)(c)] [2.3(G)(2)(d)(ii)] of the Indenture.]
[tendered for purchase by the holders thereof pursuant to Section 2.3(G)(2)(c) of the Indenture.]
[the subject of a failed conversion pursuant to Section 2.3(G)(1)(b) or 2.3(G)(2)(b) of the Indenture.]
(3) The amount of purchase price corresponding to principal of Eligible Bonds and with respect to the payment of which the Paying Agent, pursuant to the foregoing Sections of the Indenture, is drawing under the Letter of Credit, is as follows, and the amount of the draft accompanying this Certificate does not exceed such amount:
Principal: $ _________________________________
(4) The amount of the draft accompanying this Certificate being drawn in respect of purchase price corresponding to principal of Eligible Bonds, as indicated in paragraph (3), above, does not exceed the Principal Component of the Letter of Credit. The amount of the draft accompanying this Certificate in respect of purchase price corresponding to principal of such Bonds has been computed in accordance with the terms and conditions of such Eligible Bonds and the Indenture.
(5) No proceeds of this drawing will be applied to the payment of purchase price of any Bonds that are not Eligible Bonds, including any Pledged Bonds (as defined in the Indenture), any Borrower Bonds (as defined in the Indenture) and any Bonds in the Fixed Rate Mode (as defined in the Indenture).
[(6) The Eligible Bonds in respect of which this drawing is being made are Eligible Bonds in the Flexible Mode, and payment of this drawing shall be made in accordance with Paragraph 3(i) of the Letter of Credit.]
[(6) The Eligible Bonds in respect of which this drawing is being made are not Eligible Bonds in the Flexible Mode, and payment of this drawing shall be made in accordance with Paragraph 3(ii) of the Letter of Credit].
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this Certificate as of the ____ day of _____________________, 19__.
[NAME OF PAYING AGENT],
as Paying Agent
By _________________________________
Title:
EXHIBIT 2
TO THE LETTER OF CREDIT
CERTIFICATE FOR REDEMPTION/
MANDATORY PURCHASE DRAWING
The undersigned, a duly authorized officer of ____________________, (the "Paying Agent"), hereby certifies as follows to UNION BANK OF SWITZERLAND, NEW YORK BRANCH (the "Bank"), with reference to Irrevocable Letter of Credit No. SBY502182 (the "Letter of Credit") issued by the Bank in favor of the Paying Agent. Terms defined in the Letter of Credit and used but not defined herein shall have the meanings given them in the Letter of Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for the holders of the Bonds.
(2) The Paying Agent is making a Redemption/Mandatory Purchase Drawing under the Letter of Credit in the amount of $______________
[pursuant to Section 5.8(A) and Section 8.5 of the Indenture to pay the principal of Eligible Bonds due pursuant to the Indenture upon maturity or as a result of acceleration of such Eligible Bonds in accordance with the Indenture and the terms of such Eligible Bonds.]
[pursuant to Section 5.8(A) of the Indenture to pay that portion of the redemption price corresponding to principal of [and premium on] Eligible Bonds due pursuant to the Indenture upon redemption of such Eligible Bonds in accordance with the Indenture and the terms of such Eligible Bonds.]
[pursuant to Section 5.8(B) of the Indenture to pay that portion of the purchase price of Eligible Bonds corresponding to principal that are subject to mandatory tender for purchase pursuant to Section 2.3(G)(2)(d)(i) of the Indenture.]
(3) The amount of [principal of] [redemption price corresponding to principal of] [and premium on] [purchase price corresponding to principal of] Eligible Bonds which is due and payable and with respect to the payment of which the Paying Agent, pursuant to the foregoing Section[s] of the Indenture, is to draw under the Letter of Credit is as follows, and the amount of the draft accompanying this Certificate does not exceed such amount:
Principal: $____________________
[Premium: $____________________
(4) The amount of the draft accompanying this Certificate being drawn
in respect of payment of [principal] [redemption price corresponding to
principal] [purchase price corresponding to principal] of Eligible Bonds,
as indicated in paragraph (3), above, does not exceed the Principal
Component of the Letter of Credit. [The amount of the draft accompanying
this Certificate being drawn in respect of that portion of the redemption
price of Eligible Bonds corresponding to premium, as indicated in paragraph
(3), above, does not exceed the Premium Component of the Letter of Credit.]
The amount of the draft accompanying this Certificate in respect of payment
of [principal] [redemption price corresponding to principal] [and premium]
[purchase price corresponding to principal] of such Eligible Bonds has been
computed in accordance with the terms and conditions of such Eligible Bonds
and the Indenture.
(5) No proceeds of this drawing will be applied to the payment of principal, redemption price (including premium, if any) or purchase price of any Bonds that are not Eligible Bonds, including any Pledged Bonds (as defined in the Indenture), any Borrower Bonds (as defined in the Indenture), and any Bonds in the Fixed Rate Mode (as defined in the Indenture).
(6) Payment of this drawing shall be made in accordance with Paragraph 3(ii) of the Letter of Credit.
[(7) The draft accompanying this Certificate is the final draft to be drawn under the Letter of Credit, and, upon the honoring of such draft, the Letter of Credit will expire in accordance with its terms.]
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this Certificate as of the____ day of _____________________, 19__.
[NAME OF PAYING AGENT],
as Paying Agent
By _________________________________
Title:
EXHIBIT 3
TO THE LETTER OF CREDIT
CERTIFICATE FOR INTEREST DRAWING
The undersigned, a duly authorized officer of ____________________, (the "Paying Agent"), hereby certifies as follows to UNION BANK OF SWITZERLAND, NEW YORK BRANCH (the "Bank"), with reference to Irrevocable Letter of Credit No. SBY502182 (the "Letter of Credit") issued by the Bank in favor of the Paying Agent. Terms defined in the Letter of Credit and used but not defined herein shall have the meanings given them in the Letter of Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for the holders of the Bonds.
(2) The Paying Agent is making a drawing under the Letter of Credit in the amount of $____________________ with respect to [the payment of interest] [the payment of the portion of redemption price corresponding to interest] [the payment of the portion of purchase price corresponding to interest] on Eligible Bonds in accordance with the Indenture.
(3) The amount of [interest] [redemption price corresponding to interest] [purchase price corresponding to interest] on Eligible Bonds that is due and owing is as follows, and the amount of the draft accompanying this Certificate does not exceed such amount:
Interest: ____________________
(4) The amount of the draft accompanying this Certificate being drawn in respect of payment of [interest] [redemption price corresponding to interest] [purchase price corresponding to interest] on Eligible Bonds, as indicated in paragraph (3), above, does not exceed the Interest Component of the Letter of Credit. The amount of the draft accompanying this Certificate in respect of payment of [interest] [redemption price corresponding to interest] [purchase price corresponding to interest] on Eligible Bonds has been computed in accordance with the terms and conditions of such Eligible Bonds and the Indenture.
(5) Payment of this drawing shall be made in accordance with Paragraph 3(ii) of the Letter of Credit.
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this Certificate as of the ____ day of _____________________, 19__.
[NAME OF PAYING AGENT],
as Paying Agent
By _________________________________
Title:
EXHIBIT 4
TO THE LETTER OF CREDIT
NOTICE OF REDUCTION
The undersigned, a duly authorized officer of _____________________, (the "Paying Agent"), hereby certifies as follows to UNION BANK OF SWITZERLAND, NEW YORK BRANCH (the "Bank"), with reference to Irrevocable Letter of Credit No. SBY502182 (the "Letter of Credit") issued by the Bank in favor of the Paying Agent. Terms defined in the Letter of Credit and used but not defined herein shall have the meanings given them in the Letter of Credit.
(1) The Paying Agent is the Paying Agent under the Indenture for the holders of the Bonds.
(2) As of the date hereof, the aggregate principal amount of Eligible Bonds (including for this purpose all Pledged Bonds and all Borrower Bonds) outstanding is
Principal: $ ____________________
(3) You are hereby directed to reduce the [Principal] [Premium]
[and] [Interest] Components of the Letter of Credit as follows:
[The Principal Component of the Letter of Credit is reduced to $____________________.]
[The Premium Component of the Letter of Credit is reduced to $____________________.]
[The Interest Component of the Letter of Credit is reduced to $____________________.]
IN WITNESS WHEREOF, the Paying Agent has executed and delivered this Certificate as of the____ day of _____________________, 19__.
[NAME OF PAYING AGENT],
as Paying Agent
By _________________________________
Title:
EXHIBIT 5
TO THE LETTER OF CREDIT
NOTICE OF REINSTATEMENT
The undersigned, a duly authorized officer of UNION BANK OF SWITZERLAND, NEW YORK BRANCH (the "Bank"), hereby gives the following notice to _________________, as paying agent (the "Paying Agent"), with reference to Irrevocable Letter of Credit No. SBY502182 (the "Letter of Credit") issued by the Bank in favor of the Paying Agent. Terms defined in the Letter of Credit and used but not defined herein have the meanings given them in the Letter of Credit.
The Bank hereby notifies you that:
[1.] [Pursuant to Paragraph 5(i)(B) of the Letter of Credit and Section 2.04(b)(ii) of the Reimbursement Agreement, the Interest Component has been reinstated by $________________.]
[2.] [Pursuant to Paragraph 5(ii)(B) of the Letter of Credit and Section 2.04(c) of the Reimbursement Agreement, the Principal Component has been reinstated by $_________________.]
IN WITNESS WHEREOF, the Bank has executed and delivered this Notice of Reinstatement as of the ____ day of _____________________, 19__.
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH
By _________________________________
Title:
EXHIBIT 6
TO THE LETTER OF CREDIT
INSTRUCTIONS TO TRANSFER
____________________, 19__
Re: Irrevocable Letter of Credit No. SBY502182
Gentlemen:
The undersigned, as Paying Agent under that certain Indenture of Trust, dated as of September 1, 1993 (the "Indenture"), by and between the Connecticut Development Authority (the "Issuer") and Shawmut Bank Connecticut, National Association, as Trustee, is named as beneficiary in the Letter of Credit referred to above (the "Letter of Credit"). The Transferee named below has succeeded the undersigned as Paying Agent under such Indenture.
Therefore, for value received, the undersigned hereby irrevocably instructs you to transfer to such Transferee all rights of the undersigned to draw under the Letter of Credit.
Such Transferee shall hereafter have the sole rights as beneficiary under the Letter of Credit; provided, however, that no rights shall be deemed to have been transferred to such Transferee until such transfer complies with the requirements of the Letter of Credit pertaining to transfers.
IN WITNESS WHEREOF, the undersigned has executed and delivered this Certificate as of the ____ day of _____________________, 19__.
[NAME OF RETIRING PAYING AGENT],
as Paying Agent
By _________________________________
Title:
The undersigned, [Name of Transferee], hereby accepts the foregoing transfer of rights under the Letter of Credit.
[Name of Transferee]
By _________________________________ Title:
Address of Principal Corporate Trust Office:
[insert address]
EXHIBIT 1.01B
Form of
PARTICIPATION ASSIGNMENT
Dated _________________, 19__
Reference is made to the Letter of Credit and Reimbursement Agreement, dated as of September 1, 1993 (said Agreement, as it may hereafter be amended or otherwise modified from time to time, being the "Agreement"; unless otherwise defined herein terms defined in the Agreement are used herein with the same meaning), among Western Massachusetts Electric Company (the "Account Party"), Union Bank of Switzerland, New York Branch ("UBS"), as Issuing Bank, the Participating Banks named therein and from time to time parties thereto, and UBS, as Agent. Pursuant to the Agreement, ______________ (the "Assignor") has purchased a participation from the Issuing Bank in and to the Letter of Credit and each payment thereunder and demand loan made by the Issuing Bank and has committed to make Advances to the Account Party.
The Assignor and ________________ (the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns, without recourse, to the
Assignee, and the Assignee hereby purchases and assumes from the Assignor,
without recourse to the Assignor that portion set forth in Section 1(c) of
Schedule 1 hereto (the "Assigned Interest") of the Assignor's rights and
obligations under the Agreement and the Pledge Agreement, including,
without limitation, the participation purchased by the Assignor pursuant to
Section 3.07 of the Agreement in respect of unreimbursed amounts and demand
loans owing from time to time to the Issuing Bank, the Commitment of the
Assignor to make Advances and the Advances outstanding on the Effective
Date (as hereinafter defined). Such Assigned Interest represents the
percentage interest specified in Section 2(b) of Schedule 1 of all
outstanding rights and obligations of the Participating Banks under the
Agreement, and, after giving effect to such sale and assignment, the
Assignee's and Assignor's Participation Percentages will be as set forth in
Sections 2(b) and 2(c), respectively, of Schedule 1. The effective date of
this sale and assignment shall be the date specified in Section 3 of
Schedule 1 (the "Effective Date").
2. On the Effective Date, the Assignee will pay to the Assignor, in same day funds, at such address and account as the Assignor shall advise the Assignee, an amount equal to (1) the aggregate amount of unreimbursed letter of credit payments, demand loans and Advances outstanding (as set forth in Section 1 of Schedule 1) times (2) the Assigned Interest. From and after the Effective Date, the Assignor agrees that the Assignee shall be entitled to all rights, powers and privileges of the Assignor under the Agreement and the Pledge Agreement to the extent of the Assigned Interest, including without limitation (i) the right to receive all payments in respect of the Assigned Interest for the period from and after the Effective Date, whether on account of reimbursements, principal, interest, fees, indemnities in respect of claims arising after the Effective Date, increased costs, additional amounts or otherwise; (ii) the right to vote and to instruct the Agent and the Issuing Bank under the Agreement based on the Assigned Interest; (iii) the right to set-off and to appropriate and apply deposits of the Account Party as set forth in the Agreement; and (iv) the right to receive notices, requests, demands and other communications. The Assignor agrees that it will promptly remit to the Assignee any amount received by it in respect of the Assigned Interest (whether from the Account Party, the Agent or otherwise) in the same funds in which such amount is received by the Assignor.
3. The Assignor (i) represents and warrants that it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim; (ii) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Agreement or the Related Documents or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Agreement, the Related Documents or any other instrument or document furnished pursuant thereto; and (iii) makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Account Party or the performance or observance by the Account Party of any of its obligations under the Agreement, the Related Documents or any other instrument or document furnished pursuant thereto.
4. The Assignee (i) confirms that it has received a copy of the
Agreement, together with copies of the financial statements referred to in
Section 6.01(f) thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter
into this Assignment; (ii) agrees that it will, independently and without
reliance upon the Agent, the Issuing Bank, the Assignor or any other
Participating Bank and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Agreement and the Related Documents;
(iii) appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers under the Agreement and the Pledge
Agreement as are delegated to the Agent by the terms thereof, together with
such powers as are reasonably incidental thereto; (iv) agrees that it will
perform in accordance with its terms all of the obligations which by the
terms of the Agreement are required to be performed by it as a
Participating Bank and (v) confirms that it has paid the processing fee
referred to in subsection 10.06(b) of the Agreement.
5. Following the execution of this Assignment, it will be delivered to the Agent for acceptance and recording by the Agent. Upon such acceptance and recording and receipt of the consent of the Issuing Bank required pursuant to Section 10.06(b) of the Agreement (which shall be evidenced by the Issuing Bank's execution of this Assignment on the appropriate space on Schedule 1), as of the Effective Date, (i) the Assignee shall be a party to the Agreement and, to the extent provided in this Assignment, have the rights and obligations of a Participating Bank thereunder and under the Pledge Agreement and (ii) the Assignor shall, to the extent provided in this Assignment, relinquish its rights and be released from its obligations under the Agreement and the Pledge Agreement.
6. Upon such acceptance, recording and consent, from and after the Effective Date, the Agent shall make all payments under the Agreement in respect of the interest assigned hereby (including, without limitation, all payments of principal, interest and fees with respect thereto) to the Assignee at its address set forth on Schedule 1 hereto. The Assignor and Assignee shall make all appropriate adjustments in payments under the Agreement for periods prior to the Effective Date directly between themselves.
7. This Assignment shall be governed by, and construed in accordance with, the laws of the State of New York.
8. This Assignment may be executed in counterparts by the parties hereto, each of which counterpart when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment to be executed by their respective officers thereunto duly authorized, as of the date first above written, such execution being made on Schedule 1 hereto.
Schedule 1
to
Participation Assignment
Dated ____________, 19__
Section 1
(a) Total Unreimbursed
Payments and demand loans $__________
(b) Total Advances: $__________
(c) Assigned Interest: __________%
Specify percentage to no more than 8 decimal points.
Section 2
(a) Assignor's Participation
Percentage (immediately
prior to the effectiveness
of this Assignment) ___________%
(b) Assignee's Participation
Percentage2 (upon the
effectiveness of this
Assignment) ___________%
(c) Assignor's Participation
Percentage (upon
the effectiveness of
this Assignment) ___________%
|
The sum of the percentages set forth in Section 2(b) and (c) shall equal
the percentage
set forth in Section 2(a).
Section 3
Effective Date:__________, 19__
Such date shall be at least 5 Business Days after the execution of this
Assignment.
[NAME OF ASSIGNOR]
By______________________________
Title:
[NAME OF ASSIGNEE]
By______________________________
Title:
[Address]
Telecopier No._______________
Attention:___________________
Consented to this __ day
of ______________, ___
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH,
as Issuing Bank
By _________________________________
Title:
By _________________________________
Title:
Accepted this __ day
of _____________, ___
Not to be accepted without proof of Account Party's consent pursuant to
Section 10.06(b) of the Reimbursement Agreement.
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH,
as Agent
By _________________________________
Title:
By _________________________________
Title:
APPLICABLE LENDING OFFICE
The Assignee's Applicable Lending Office is as follows:
Exhibit 1.01C
Form of
PLEDGE AGREEMENT
Dated as of September 1, 1993
THIS PLEDGE AGREEMENT ("this Agreement") is made by and between:
(i) Western Massachusetts Electric Company, a corporation duly organized and validly existing under the laws of the Commonwealth of Massachusetts (the "Account Party"); and
(ii) UNION BANK OF SWITZERLAND, NEW YORK BRANCH, as issuer of the Letter of Credit (the "Issuing Bank");
for the benefit of the Issuing Bank and
(iii) The Agent (as defined therein) and the Participating Banks (as defined therein) from time to time party to the Reimbursement Agreement hereinafter referred to.
PRELIMINARY STATEMENT
The Connecticut Development Authority (the "Issuer") proposes to issue, pursuant to an Indenture of Trust, dated as of September 1, 1993 (as supplemented or amended from time to time with the written consent of the Issuing Bank, the "Indenture"), made to Shawmut Bank Connecticut, National Association, as trustee (such entity, or its successor as trustee, being the "Trustee"), $53,800,000 aggregate principal amount of its Pollution Control Revenue Refunding Bonds (Western Massachusetts Electric Company Project - 1993A Series) (the "Bonds"). Pursuant to the Indenture and the Loan Agreement, dated as of September 1, 1993, between the Issuer and the Account Party, the Account Party has requested the Issuing Bank to issue the letter of credit referred to therein in favor of the Paying Agent described therein.
The Issuing Bank has agreed to issue such letter of credit subject to the terms and conditions set forth in that certain Letter of Credit and Reimbursement Agreement, of even date herewith, among the Account Party, the Issuing Bank, the Agent and the Participating Banks referred to therein and relating to the Bonds (said Letter of Credit and Reimbursement Agreement, as it may hereafter be amended, modified or supplemented from time to time, being hereinafter referred to as the "Reimbursement Agreement").
It is a condition precedent to the obligation of the Issuing Bank to issue such letter of credit and of the Participating Banks to make the Advances described in the Reimbursement Agreement that the Account Party shall have made the pledge described in this Agreement.
NOW THEREFORE, in consideration of the premises and to induce the Issuing Bank to issue such letter of credit and to induce the Participating Banks to make such Advances, the Account Party hereby agrees as follows (capitalized terms used herein and not otherwise defined herein having the meanings assigned them in the Reimbursement Agreement):
SECTION 1. Pledge. The Account Party hereby pledges to the Issuing Bank for the benefit of the Agent and the Participating Banks, and grants to the Issuing Bank for the benefit of the Agent and the Participating Banks a security interest in, the following (the "Pledged Collateral"):
(i) the Pledged Bonds (as defined in the Indenture) and the instruments, if any, evidencing the Pledged Bonds, and all interest, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the Pledged Bonds; and
(ii) all proceeds (other than the proceeds of the initial sale upon issuance of the Pledged Bonds) of any and all of the foregoing collateral (including, without limitation, proceeds that constitute property of the types described above).
SECTION 2. Security for Obligations. This Agreement secures the payment of all obligations of the Account Party now or hereafter existing under the Reimbursement Agreement, whether for reimbursement, principal, interest, fees, expenses or otherwise, and all obligations of the Account Party now or hereafter existing under this Agreement (all such obligations of the Account Party being the "Obligations"). Without limiting the generality of the foregoing, this Agreement secures the payment of all amounts which constitute part of the Obligations and would be owed by the Account Party to the Issuing Bank, the Agent or any Participating Bank under the Reimbursement Agreement but for the fact that they are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving the Account Party.
SECTION 3. Delivery of Pledged Collateral. (a) All certificates or instruments representing or evidencing the Pledged Collateral shall be delivered to the Paying Agent and held by the Paying Agent on behalf of the Issuing Bank pursuant hereto and shall be in suitable form for transfer by delivery, or shall be accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance satisfactory to the Issuing Bank. For the better perfection of the Issuing Bank's, the Agent's and the Participating Banks' rights in and to the Pledged Collateral, the Account Party shall forthwith, upon the pledge of any Pledged Collateral hereunder, cause such Pledged Collateral to be registered in the name of such nominee or nominees of the Issuing Bank as the Issuing Bank shall direct.
(b) If, prior to the payment in full of the Obligations and the termination of the Letter of Credit, the Account Party shall become entitled to receive or shall receive any payment in respect of the Pledged Collateral, the Account Party agrees to accept the same as the agent of the Issuing Bank, the Agent and the Participating Banks, to hold the same in trust for the Issuing Bank, the Agent and the Participating Banks and to deliver the same to the Issuing Bank. All such sums so received by the Issuing Bank shall be credited against the Obligations in such order as the Agent shall, in its sole discretion, elect.
(c) Notwithstanding the foregoing subsection (a), if and for so long as the Bonds are to be held in the Book-Entry Only System (as defined in the Indenture), the Account Party's obligations under such subsection shall be deemed satisfied if such Pledged Bonds are (i) registered in the name of DTC (as defined in the Indenture) in accordance with the Book-Entry Only System, (ii) credited on the books of DTC to the account of the Paying Agent (or its nominee) and (iii) further credited on the books of the Paying Agent (or such nominee) to the account of the Issuing Bank (or its nominee).
SECTION 4. Representations and Warranties. The Account Party represents and warrants as follows:
(a) The pledge of the Pledged Collateral pursuant to this
Agreement creates, upon the Paying Agent's taking possession of the Pledged
Bonds pursuant to Section 3 hereof (whether by physical possession or by
means of registration to DTC and book-entry credit as described in subsection
(c) thereof), a valid and perfected first priority security interest in the
Pledged Collateral, securing the payment of the Obligations.
(b) No consent of any other person or entity and no authorization, approval, or other action by, and no notice to or filing with, any governmental authority or regulatory body is required (i) for the pledge by the Account Party of the Pledged Collateral pursuant to this Agreement or for the execution, delivery or performance of this Agreement by the Account Party, (ii) for the perfection or maintenance of the security interest created hereby (including the first priority nature of such security interest), other than any filings of Uniform Commercial Code financing statements that may be required for such perfection with respect to any "proceeds" of the Pledged Bonds, or (iii) for the exercise by the Issuing Bank of the voting or other rights provided for in this Agreement or the remedies in respect of the Pledged Collateral pursuant to this Agreement (except as may be required in connection with any disposition of any portion of the Pledged Collateral by laws affecting the offering and sale of securities generally and except for such as have already been obtained and are in full force and effect).
SECTION 5. Further Assurances. The Account Party agrees that at any time and from time to time, at the expense of the Account Party, the Account Party will promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary or desirable, or that the Issuing Bank may reasonably request, in order to perfect and protect any security interest granted or purported to be granted hereby or to enable the Issuing Bank to exercise and enforce its rights and remedies hereunder with respect to any Pledged Collateral.
SECTION 6. Release. In the event that any Pledged Bonds are subsequently remarketed by the Remarketing Agent and the proceeds thereof, when added to any amounts paid to the Issuing Bank and/or the Agent by the Account Party, are sufficient to (a) reimburse the Issuing Bank and the Participating Banks in full for the drawing under the Letter of Credit pursuant to which such Pledged Bonds became Pledged Bonds, (b) repay or prepay any demand loan or Advance made in respect thereof and (c) pay all interest, fees and other amounts accrued in respect thereof pursuant to the Reimbursement Agreement, the lien of this Agreement shall be released as to such Pledged Bonds (but not as to any other Pledged Bonds).
SECTION 7. Transfers and Other Liens. The Account Party agrees that it will not (i) sell, assign or otherwise dispose of, or grant any option with respect to, any of the Pledged Collateral, or (ii) create or permit to exist any lien, security interest, option or other charge or encumbrance upon or with respect to any of the Pledged Collateral, except for the security interest under this Agreement.
SECTION 8. Bank Appointed Attorney-in-Fact. The Account Party hereby appoints the Issuing Bank the Account Party's attorney-in-fact, with full authority in the place and stead of the Account Party and in the name of the Account Party or otherwise, from time to time in the Issuing Bank's discretion to take any action and to execute any instrument which the Issuing Bank may deem necessary or advisable to accomplish the purposes of this Agreement, including, without limitation, to receive, indorse and collect all instruments made payable to the Account Party representing any interest payment or other distribution in respect of the Pledged Collateral or any part thereof and to give full discharge for the same.
SECTION 9. Bank May Perform. If the Account Party fails to
perform any agreement contained herein, the Issuing Bank may itself perform,
or cause performance of, such agreement, and the expenses of the Issuing Bank
incurred in connection therewith shall be payable by the Account Party under
Section 10.04 of the Reimbursement Agreement.
SECTION 10. The Issuing Bank's Duties. The powers conferred on the Issuing Bank hereunder are solely to protect its interest in the Pledged Collateral and shall not impose any duty upon it to exercise any such powers.
Except for the safe custody of any Pledged Collateral in its actual possession and the accounting for moneys actually received by it hereunder, the Issuing Bank shall have no duty as to any Pledged Collateral, as to ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters relative to any Pledged Collateral, whether or not the Issuing Bank has or is deemed to have knowledge of such matters, or as to the taking of any necessary steps to preserve rights against any parties or any other rights pertaining to any Pledged Collateral.
The Issuing Bank shall be deemed to have exercised reasonable care in the custody and preservation of any Pledged Collateral in its actual possession if such Pledged Collateral is accorded treatment substantially equal to that which the Issuing Bank accords its own property.
SECTION 11. Remedies upon Default. If any Event of Default shall have occurred and be continuing:
(a) The Issuing Bank may exercise in respect of the Pledged Collateral, in addition to other rights and remedies provided for herein or otherwise available to it, all the rights and remedies of a secured party on default under the Uniform Commercial Code in effect in the State of New York at that time (the "Code") (whether or not the Code applies to the affected Pledged Collateral), and may also, without notice except as specified below, sell the Pledged Collateral or any part thereof in one or more parcels at public or private sale, at any exchange, broker's board or at any of the Issuing Bank's offices or elsewhere, for cash, on credit or for future delivery, and upon such other terms as the Issuing Bank may deem commercially reasonable. The Account Party agrees that, to the extent notice of sale shall be required by law, at least ten days' notice to the Account Party of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification. The Issuing Bank shall not be obligated to make any sale of Pledged Collateral regardless of notice of sale having been given. The Issuing Bank may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned.
(b) Any cash held by the Issuing Bank as Pledged Collateral and all cash proceeds received by the Issuing Bank in respect of any sale of, collection from, or other realization upon all or any part of the Pledged Collateral may, in the discretion of the Issuing Bank, be held by the Issuing Bank as collateral for, and/or then or at any time thereafter be applied (after payment of any amounts payable to the Issuing Bank pursuant to Section 9 hereof and/or Section 10.04 of the Reimbursement Agreement) in whole or in part by the Issuing Bank against, all or any part of the Obligations in such order as the Issuing Bank shall elect. Any surplus of such cash or cash proceeds held by the Issuing Bank and remaining after payment in full of all the Obligations shall be paid over to the Account Party or to whomsoever may be lawfully entitled to receive such surplus.
SECTION 12. Continuing Security Interest; Assignments. This
Agreement shall create a continuing security interest in the Pledged
Collateral and shall (i) remain in full force and effect until the later of
(x) the payment in full of the Obligations and all other amounts payable
under this Agreement and (y) the expiration or termination of the
Commitments, (ii) be binding upon the Account Party, its successors and
assigns, and (iii) inure to the benefit of, and be enforceable by, the
Issuing Bank, the Agent, the Participating Banks and their respective
successors, transferees and assigns. Without limiting the generality of the
foregoing clause (iii), any Participating Bank may, subject to Section 10.06
of the Reimbursement Agreement, assign or otherwise transfer all or any
portion of its rights and obligations under the Reimbursement Agreement
(including, without limitation, all or any portion of its Commitment and the
Advances owing to it) to any other person or entity, and such other person or
entity shall thereupon become vested with all the benefits in respect thereof
granted to such Participating Bank herein or otherwise. Upon the later of
the payment in full of the Obligations and all other amounts payable under
this Agreement and the expiration or termination of the Commitments, the
security interest granted hereby shall terminate and all rights to the
Pledged Collateral shall revert to the Account Party. Upon any such
termination, the Issuing Bank will, at the Account Party's expense, return to
the Account Party such of the Pledged Collateral as shall not have been sold
or otherwise applied pursuant to the terms hereof and execute and deliver to
the Account Party such documents as the Account Party shall reasonably
request to evidence such termination.
IN WITNESS WHEREOF, the Account Party has caused this Agreement to be duly executed and delivered by its officer thereunto duly authorized as of the date first above written.
WESTERN MASSACHUSETTS
ELECTRIC COMPANY, as
Account Party and pledgor
By _________________________________
Title:
UNION BANK OF SWITZERLAND, NEW
YORK BRANCH, as Issuing Bank and pledgee
By _________________________________
Title:
By _________________________________
Title:
[Form of Opinion of King & Spalding - CDA/WMECO]
EXHIBIT 5.01B
September 22, 1993
To Union Bank of Switzerland, New York Branch,
as Agent and as Issuing Bank under
the Reimbursement Agreement referred
to below, and to each Participating
Bank thereunder
Re: Western Massachusetts Electric Company
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 5.01(f)(ii) of the Letter of Credit and Reimbursement Agreement, dated as of September 1, 1993 (the "Reimbursement Agreement"), among Western Massachusetts Electric Company (the "Company"), Union Bank of Switzerland, New York Branch, as the Agent (the "Agent") and Issuing Bank (the "Issuing Bank") thereunder, and the Participating Banks referred to therein. Unless otherwise defined herein, terms defined in the Reimbursement Agreement are used herein as therein defined.
We have acted as special New York counsel to the Agent and the Issuing Bank in connection with the preparation, execution and delivery of the Reimbursement Agreement and the issuance by the Issuing Bank of the Letter of Credit referred to therein.
In that connection, we have examined the following documents:
(a) The Reimbursement Agreement, executed by each of the parties thereto; and
(b) The documents furnished to you today pursuant to Section 5.01 of the Reimbursement Agreement, including the opinion of counsel delivered pursuant to Section 5.01(f)(i) of the Reimbursement Agreement (the "Opinion").
In our examination of the documents referred to above, we have assumed the authenticity of all such documents submitted to us as originals, the genuineness of all signatures, the due authority of the parties executing such documents and the conformity to the originals of all such documents submitted to us as copies or telecopies. We have also assumed that the Agent, the Issuing Bank and each Participating Bank have duly executed and delivered, with all necessary power and authority (corporate and otherwise), the Reimbursement Agreement.
To the extent that our opinions expressed below involve conclusions as to matters governed by laws other than the laws of the State of New York, we have relied upon the Opinion and have assumed without independent investigation the correctness of the matters set forth therein, our opinions expressed below being subject to the assumptions, qualifications and limitations set forth in the Opinion. As to matters of fact, we have relied solely upon the documents we have examined.
Based upon the foregoing, and subject to the qualifications set forth below, we are of the opinion that:
4. The Reimbursement Agreement is in substantially acceptable legal form.
5. The Opinion and the other documents referred to in item (b), above, are substantially responsive to the requirements of the Sections of the Reimbursement Agreement pursuant to which the same have been delivered.
The foregoing opinions are solely for your benefit and may not be relied upon by any other person, other than any person that may become a Participating Bank under the Reimbursement Agreement after the date hereof.
Very truly yours,
Exhibit 10.4
STOCKHOLDER AGREEMENT, dated December 10, 1958, between Yankee Atomic Electric Company ("Yankee") and [the names of Stockholders appear in the attached Appendix] (the "Stockholder").
Yankee is a Massachusetts electric company, organized in 1954, which has undertaken the construction and operation of a nuclear power plant of approximately 134,000 kilowatts net electrical capacity, to be located at Rowe, Massachusetts (the "plant"). Construction of the plant is now under way, with completion scheduled for 1960. The plant is expected to be the first nuclear power plant in New England and one of the first in the nation. Because of its importance in the development of commercial nuclear power, it is one of the projects included in the Atomic Energy Commission's Power Demonstration Reactor Program.
By separate contracts, Yankee will agree to sell the entire net electrical output of the plant to the New England utility companies which are its stockholders, and to make available to them such information as may from time to time be useful to them as a result of Yankee's experience in the design, planning, construction, and operation of a demonstration nuclear power plant. The percentages of Yankee's presently outstanding stock held by these companies and the percentages of the output of the plant to be purchased by them are as follows:
Stock Power
Percentage Percentage
New England Power Company 30.0% 30.0%
The Connecticut Light and Power Company 15.0 15.0
Boston Edison Company 9.5 9.5
Central Maine Power Company 9.5 --
The Hartford Electric Light Company 9.5 9.5
Western Massachusetts Electric Company 7.0 7.0
Public Service Company of New Hampshire 7.0 16.5*
Montaup Electric Company 4.5 4.5
New Bedford Gas and Edison Light Company 2.5 2.5
Cambridge Electric Light Company 2.0 2.0
Central Vermont Public Service Corp. 3.5 3.5
100.0% 100.0%
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*Public Service Company of New Hampshire proposes to enter into arrangements to supply power to Central Maine Power Company in amounts equivalent to 9.5% of the net electrical output of the Yankee plant, after appropriate allowance for transmission losses.
Yankee's present capitalization consists of $8,000,000 of common capital stock, which has been purchased for cash at par by the foregoing stockholders. Yankee's estimated capital requirements aggregate $57,000,000, which Yankee proposes to finance through the issuance of senior securities to provide funds of $37,000,000 and additional capital stock to provide total equity funds of $20,000,000.
In consideration of the foregoing, of similar stockholder agreements executed by others, and of the mutual covenants contained herein, the parties agree as follows:
1. From time to time prior to plant completion date when additional shares of its capital stock are offered by Yankee to its stockholders for subscription, and until the total amount of Yankee's capital stock and capital stock premium accounts, together with any amounts to be received upon the issue and sale of the shares then being offered for subscription, shall aggregate $20,000,000, the Stockholder will subscribe for, and thereafter will purchase, its stock percentage of such shares, at a price not less than the par value thereof, payable in cash on such terms and at such times as may be specified by Yankee when said shares are offered for subscription. If any additional shares of its capital stock are offered by Yankee to its stockholders to meet all or any part of the excess capital requirements of the project, the Stockholder will in like manner subscribe for and purchase its stock percentage thereof.
The "plant completion date" shall be the date on which Yankee shall have placed the plant in satisfactory operation, as determined by Yankee's board of directors and evidenced by notice to its stockholders.
The "excess capital requirements of the project" shall be such capital requirements in excess of $57,000,000 as Yankee may require to complete construction of the plant and place it in satisfactory operation and to provide adequate working capital for the continued operation of plant, as determined by Yankee's board of directors at any time or from time to time prior to the plant completion date and evidenced by notice to its stockholders.
2. Yankee will proceed with due diligence with the construction and operation of the plant, and will keep the Stockholder currently informed as to the progress of the project and its anticipated capital requirements. Yankee will use its best efforts to complete construction of the plant on the presently estimated construction schedule (and in any event prior to January 1, 1962) and within the limits of present costs estimates.
3. The obligations of the Stockholder hereunder are subject to the following conditions:
(a) That all necessary regulatory approvals shall have been received for the issue and sale by Yankee of any shares of its capital stock which it may from time to time offer to its stockholders for subscription, and for the acquisition by the Stockholder of its stock percentage of such shares; and
(b) That Yankee shall have entered into contracts for the issue and sale of its senior securities sufficient to provide capital funds aggregating $37,000,000, and that no regulatory approvals necessary for the issue and sale of such senior securities shall have been denied or revoked, or granted upon conditions unacceptable to Yankee.
The parties will use their best efforts to obtain, or to assist in obtaining, the foregoing regulatory approvals.
4. The Stockholder acknowledges notice of the restrictions on stock transfer contained in Article IV, section 3 of Yankee's bylaws, and agrees to be bound by said provisions with respect to all shares of Yankee's capital stock which it now owns or may hereafter acquire.
5. This agreement, and the obligations of the parties hereunder, shall terminate if the stockholders of Yankee, by vote of not less than 75% in interest of the outstanding stock having general voting rights, shall vote to discontinue and the construction or operation of the plant or to liquidate Yankee and wind up its affairs.
6. This agreement is the corporate act and obligation of the parties hereto, and any claim hereunder against any stockholder, director or officer of either party, as such, is expressly waived.
IN WITNESS WHEREOF the parties have executed this agreement as a sealed instrument by their respective officers thereunto duly authorized, as of the date first above written.
YANKEE ATOMIC ELECTRIC COMPANY
By ____________________________________
ATTEST:
By ___________________________________
ATTEST:
[Forms of signatures appear in the attached Appendix.]
APPENDIX
Separate Stockholder Agreements were entered into, identical in form with the foregoing except as to the execution thereof and except that on page 1 the names of the respective Stockholders were inserted.
The Stockholder Agreements were executed by the parties thereto, under their corporate seals, as follows:
YANKEE ATOMIC ELECTRIC COMPANY
ATTEST: By WILLIAM WEBSTER, President
D. G. ALLEN, Asst. Clerk
NEW ENGLAND POWER COMPANY
ATTEST: By ROBERT F. KRAUSE, President
JOSEPH X. CORBETT, Clerk
THE CONNECTICUT LIGHT AND POWER
COMPANY
ATTEST: By SHERMAN R, KNAPP, President
R. F. PROBST, Secretary
BOSTON EDISON COMPANY
ATTEST: By THOMAS G. DIGNAN, President
EDWIN J. LEE, Clerk
CENTRAL MAINE POWER COMPANY
ATTEST: By W. F. WYMAN, President
NATHANIEL W. WILSON, Secretary
THE HARTFORD ELECTRIC LIGHT COMPANY
ATTEST: By R. A. GIBSON, President
C. T. DWIGHT
WESTERN MASSACHUSETTS ELECTRIC
COMPANY
ATTEST: By HOWARD J. CADWELL, President
JAMES GRAY, Clerk
PUBLIC SERVICE COMPANY OF NEW
HAMPSHIRE
ATTEST: By A. R. SCHILLER, President
ANABELLE LANDERS, Secretary
MONTAUP ELECTRIC COMPANY
ATTEST: By GUIDO R. PERERA, President
R. M. KEITH, Clerk
NEW BEDFORD GAS AND EDISON LIGHT
COMPANY
ATTEST: By JOHN F. RICH, President
R. E. ROLLS, Clerk
CAMBRIDGE ELECTRIC LIGHT COMPANY
ATTEST: By JOHN F. RICH, President
R. E. ROLLS, Clerk
CENTRAL VERMONT PUBLIC SERVICE
CORPORATION
ATTEST: By ALBERT A. CREE, President
R. VANBUSKIRK, Clerk
Exhibit 10.5.4
Form of
Amendment No. 7
to
Power Contract
AMENDMENT NO. 7, dated as of the 1st day of February, 1992 between
YANKEE ATOMIC ELECTRIC COMPANY ("Yankee"), a Massachusetts corporation, and
a corporation ("Customer"),
to the Power Contract dated June 30, 1959, as heretofore amended and
revised effective June 2, 1975, October 1, 1980, April 1, 1985, May 6,
1988, June 26, 1989 and July 1, 1989, between Yankee and the Customer (the
"Power Contract").
WITNESSETH
WHEREAS, pursuant to the Power Contract, Yankee supplies to the
Customer and, pursuant to separate power contracts substantially identical
to the Power Contract except for the names of the parties, to the other
stockholders of Yankee, each of whom is contemporaneously entering into an
amendment to its power contract which is identical hereto except for the
necessary changes in the names of the parties, all of the capacity and the
electric energy available from the nuclear generating unit owned by Yankee
at a site in Rowe, Massachusetts (such unit being herein together with the
site and all related facilities owned by Yankee referred to as the
"plant"); and
WHEREAS, Yankee currently possesses a Facility Operating License for the plant, issued by the Nuclear Regulatory Commission ("NRC"), which authorizes operation of the plant through July 9, 2000; and
WHEREAS, the parties to the Power Contract and the Federal Energy Regulatory Commission, which has regulatory jurisdiction over the Power Contract, have consistently recognized that the cost of the capacity and electric energy being sold under the Power Contract necessarily included the costs of shutting down, removing from service and decommissioning the plant after its useful life had ended and have heretofore incorporated in the Power Contract provisions designed to achieve that result, whether or not the plant produces electricity and whether or not the plant operates for the full term of the Facility Operating License; and
WHEREAS, the parties to the Power Contract recognize that, if the plant were to be shut down prematurely, it would be anticipated that the NRC could amend the present Facility Operating License or issue a series of superseding licenses applicable to the plant until such time as decommissioning thereof is completed and that Yankee would be required to retain possession of its spent fuel until such time as the Department of Energy accepts responsibility therefor as required by law, during which time the parties intend that the Power Contract would remain in effect to govern the performance of their responsibilities; and
WHEREAS, the parties to the Power Contract have concluded that it is in the best interest of their ratepayers and themselves to clarify the application of the Power Contract in the event of a premature shutdown of the plant; and
WHEREAS, the parties to the Power Contract desire to amend the provisions of the Power Contract to provide for the foregoing.
NOW, THEREFORE, in consideration of the above and of other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree that the Power Contract is hereby amended as follows:
1. Terms used herein and not defined shall have the meanings set forth in the Power Contract.
2. Section 2 of the Power Contract is hereby amended by inserting at the end thereof the following clause:
",including all billings and adjustments with respect to the
recovery of Yankee's total cost of service, as provided in
Section 6 hereof, until the non-salvageable investment in
plant, nuclear fuel and materials and supplies has been
fully amortized in accordance herewith."
3. Section 6 of the Power Contract is hereby amended by deleting clause (i) of the fourth paragraph thereof and inserting in lieu thereof the following:
"(i) depreciation accrued at a rate at least sufficient to fully amortize over the estimated remaining useful life of the plant Yankee's non-salvageable investments in plant, nuclear fuel and materials and supplies, provided, however, that if a decision is made to cease electricity production at the plant prior to July 9, 2000, then such remaining non- salvageable investments shall be amortized over a period extending to July 9, 2000;".
4. Section 6 of the Power Contract is hereby amended by deleting clause (iv) of the fourth paragraph thereof and inserting in lieu thereof the following:
"(iv) costs incurred in connection with decommissioning the plant, including (a) the direct and indirect costs of operating, maintaining or dismantling the spent fuel storage facilities and other plant facilities after the cessation of electricity production and (b) the accruals to any reserve established by Yankee's board of directors to provide for physical decommissioning of the plant over the estimated remaining useful life of the plant, provided, however, that if a decision is made to cease electricity production at the plant prior to July 9, 2000, then the accruals to the reserve referred to in clause (b) shall be made over a period extending to July 9, 2000;".
5. Section 6 of the Power Contract is hereby amended by inserting at the end of the eighth paragraph thereof the following:
";plus (vi) the amount of any unamortized deferred expenses, as permitted from time to time by the Federal Energy Regulatory Commission or its successor agency; plus (vii) to the extent not provided for elsewhere in this paragraph, the remaining unamortized amount of the non-salvageable investment in plant, nuclear fuel and materials and supplies."
6. This Amendment shall become effective as of the date first above written, subject to any suspension order duly issued by the Federal Energy Regulatory Commission.
IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to be executed by its officer thereunto duly authorized, as of the date first above written.
YANKEE ATOMIC POWER COMPANY
By___________________________
Its President
CUSTOMER
By_____________________________
Its__________________________
Title
Exhibit 10.7.1
Form of
Maine Yankee Atomic Power Company
Amendment No. 1
to
POWER CONTRACT
AMENDMENT, dated as of March 1, 1983, between MAINE YANKEE ATOMIC POWER COMPANY ("Maine Yankee"), a Maine corporation, and (the "Purchaser") to the Power Contract, dated as of May 20, 1968, between Maine Yankee and the Purchaser.
W I T N E S S E T H
WHEREAS, Maine Yankee has heretofore established a trust pursuant to an Indenture of Trust dated as of October 12, 1982 (the "Maine Yankee Trust") to make provision for financing the decommissioning of its Unit in accordance with the rules and regulations of the Nuclear Regulatory Commission (the "NRC") and to assure its financial ability to meet the obligations to the NRC, other applicable regulatory bodies, the general public and its customers in connection with said decommissioning, such trust to hold all payments made to it and any earnings thereon solely for the purpose of meeting such decommissioning expenses and thereafter for the benefit of the wholesale purchasers of power from Maine Yankee in accordance with the terms and conditions ordered by any governmental regulatory body having jurisdiction; and
WHEREAS, in order to provide for the accrual of an appropriate fund for decommissioning the Unit at the end of its useful life, Maine Yankee and each of its other Sponsors are contemporaneously entering into Amendments which are identical to the Amendment except for the necessary changes in the names of the parties; and
WHEREAS, pursuant to an Order (the "Order") issued by the Federal Energy Regulatory Commission ("FERC") on August 3, 1982 (Docket No. ER 82- 15-000), Maine Yankee began collecting estimated costs of decommissioning the Unit through rates effective on November 1, 1981, which amounts have been paid into the Maine Yankee Trust except such amounts as are necessary to be used to pay federal and state income taxes on moneys collected as decommissioning charges unless and until it is ultimately determined that such moneys are not subject to tax.
NOW, THEREFORE, in consideration of the premises and of other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree that the Power Contract is hereby amended as follows:
1. Terms used herein and not defined shall have the meanings set forth in the Power Contract.
2. The second paragraph of Section 7 is hereby amended to insert
the clause "or, in the case of payments under clause (b) below, commencing on
or after the date authorized by the Federal Energy Regulatory Commission
("FERC"), formerly the Federal Power Commission," and the clause "plus
(b) the Total Decommissioning Costs for the month with respect to the
Unit," and to reletter the two final clauses, so that the entire paragraph
reads as follows:
"With respect to each month commencing on or after the plant completion date or, in the case of payments under clause (b) below, commencing on or after the date authorized by the Federal Energy Regulatory Commission ("FERC"), formerly the Federal Power Commission, the Purchaser will pay Maine Yankee an amount equal to the Purchaser's entitlement percentage of the sum of (a) Maine Yankee's total fuel costs for the month with respect to the Unit, plus (b) the Total Decommissioning Costs for the month with respect to the Unit, plus (c) Maine Yankee's total operating expenses for the month with respect to the Unit, plus (d) an amount equal to one-twelfth of the composite percentage for such month of the net Unit investment as most recently determined in accordance with this Section 7."
3. Section 7 is further amended by inserting therein immediately preceding in the last paragraph thereof the following three paragraphs:
"Total Decommissioning Costs" for any month shall mean the
sum of (x) an amount equal to all accruals in such month to any
reserve, as from time to time established by Maine Yankee and
approved by its board of directors, to provide for the ultimate
payment of the Decommissioning Expenses of the Unit plus
(y) Decommissioning Tax Liability for such month. It is
understood (i) that such funds may be held by Maine Yankee or, if
required, by an independent trust or other separate fund, as
determined by said board of directors, (ii) that, upon compliance
with Section 21 hereof, the amount, custody and/or timing of such
accruals may from time to time during the term hereof be modified
by said board of directors in its discretion or to comply with
applicable statutory or regulatory requirements or to reflect
changes in the amount, custody or timing of anticipated
Decommissioning Expenses, and (iii) that the use of the term "to
decommission" herein encompasses compliance with all requirements
(other than those relating to spent nuclear fuel) of the Nuclear
Regulatory Commission or its successors (NRC) for permanent
cessation of operation of a nuclear facility.
"Decommissioning Expenses" shall include:
(1) All costs and expenses of removing the Unit from service, including without limitation, dismantling, mothballing, removing radioactive material (excluding spent nuclear fuel) to temporary and/or permanent storage sites, decontaminating, restoring and supervising the site, and any costs and expenses incurred in connection with proceedings before governmental regulatory authorities relating to any authorization to decommission the Unit or remove the Unit from service;
(2) All costs of labor and services, whether directly or indirectly incurred, including without limitation services of foremen, inspectors, supervisors, surveyors, engineers, security personnel, counsel, and accountants, performed or rendered in connection with the decommissioning of the Unit and the removal of the Unit from service, and all costs of materials, supplies, machinery, construction, equipment and apparatus acquired or used (including rental charges for machinery, equipment or apparatus hired) for or in connection with the decommissioning of the Unit and the removal of the Unit from service, and all administrative costs, including services of counsel and financial advisers, of any applicable independent trust or other separate fund; it being understood that any amount, exclusive of amounts received in respect of proceeds of insurance, realized by Maine Yankee as salvage on any machinery, construction equipment and apparatus, the cost of which was charged to Decommissioning Expense, shall be treated as a reduction of the amounts otherwise chargeable on account of the costs of decommissioning of the unit; and
(3) All overhead costs applicable to the Unit during its decommissioning period, including without limiting the generality of the foregoing, taxes (other than taxes on or in respect of income), licenses, excises, and assessments, casualties, surety bond premiums and insurance premiums.
"Decommissioning Tax Liability" for any month shall be an amount established by Maine Yankee and approved by its board of directors to meet possible income tax obligations, which amount shall not exceed: the amount to be included in the clause (x) portion of Total Decommissioning Costs for such month multiplied by a fraction whose numerator is equal to the combined highest statutory federal and state marginal income tax rate and whose denominator is equal to one minus the combined highest statutory federal and state marginal income tax rate. Maine Yankee will use its best efforts to obtain as promptly as possible favorable tax treatment of the payments for total decommissioning costs hereunder so that Decommissioning Tax Liability may be minimized.
Without limiting the generality of the foregoing, any other amounts expended or to be paid with respect to decommissioning of the Unit or removal of the Unit from service shall constitute part of the Decommissioning Expenses if they are, or when paid will be, either (i) properly chargeable to any account related to decommissioning of a nuclear generating unit in accordance with the Uniform System or generally accepted accounting principles as then in effect, or (ii) properly chargeable to decommissioning of a nuclear generating unit in accordance with then applicable regulations of the NRC or FERC or any other regulatory agency having jurisdiction.
4. A new Section 7A is hereby inserted therein immediately following Section 7 thereof as follows:
"7A. Decommissioning Fund
Maine Yankee agrees to pay to, or cause to be paid to, the Maine Yankee Trust or any successor trust approved by the board of directors of Maine Yankee all funds collected hereunder for the express purpose of decommissioning the Unit or removing the Unit from service and further agrees that, after the tax consequences of decommissioning collections have been resolved, any funds collected hereunder to meet Decommissioning Tax Liability which are not used for that purpose will be refunded to Purchaser to the extent required by FERC."
5. The last four lines of the first paragraph of Section 9 following clause (iii) thereof are hereby amended to read as follows:
"then and in any such case, the Purchaser may cancel the provisions of this contract, except that in all cases other than those described in clause (ii) above, the provisions relating to the payment of Total Decommissioning Costs shall, whether or not the Unit is operated or operable and notwithstanding any earlier termination of the service life of the Unit, remain in full force and effect until January 1, 2003 or the completion of decommissioning, whichever is earlier. Such cancellation shall be effected by written notice given by the Purchaser to Maine Yankee. In the event of such cancellation, all continuing obligations of the parties (other than the obligations relating to the payment and application of Total Decommissioning Costs to the extent that such obligations remain in full force and effect pursuant to the second preceding sentence, but including the Purchaser's obligations to continue payments pursuant to clauses (a), (c) and (d) of the second paragraph of Section 7 hereof) shall cease forthwith. Any dispute as to the Purchaser's right to cancel this contract pursuant to the foregoing provisions shall be referred to arbitration in accordance with the provisions of Section 13.
6. A new Section 21 is inserted therein as follows:
"21. Amendments
Upon authorization by Maine Yankee's board of directors of
uniform amendments to all the sponsor power contracts, Maine
Yankee shall have the right to amend the provisions of Section 7
hereof insofar as they relate to the amounts collectible by Maine
Yankee pursuant to clause (b) of the second paragraph of
Section 7 hereof or to the timing of such collections by serving
an appropriate statement of such amendment upon the Purchaser and
filing the same with FERC (or such other regulatory agency as may
have jurisdiction in the premises) in accordance with the
provisions of applicable laws and any rules and regulations
thereunder, and the amendment shall thereupon become effective on
the date specified therein, subject to any suspension order duly
issued by such agency. All other amendments to this contract
shall be by mutual agreement, evidenced by a written amendment
signed by the parties hereto."
This Amendment No. 1 shall become effective on , 1983, subject to any suspension order duly issued by the Federal Energy Regulatory Commission.
IN WITNESS WHEREOF, the parties have executed this amendment by their respective officers duly authorized as of the day of , 1983.
MAINE YANKEE ATOMIC POWER COMPANY
By
President
PURCHASER
By
Exhibit 10.7.2
MAINE YANKEE ATOMIC POWER COMPANY
Form of
Amendment No. 2
to
Power Contract
AMENDMENT, dated as of this 1st day of January , 1984, between MAINE YANKEE ATOMIC POWER COMPANY ("Maine Yankee"), a Maine corporation, and , a corporation (the "Purchaser"), to the Power Contract dated as of May 20, 1968, between Maine Yankee and the Purchaser (the "Power Contract").
W I T N E S S E T H
WHEREAS, pursuant to the Power Contract, Maine Yankee supplies to the Purchaser and, pursuant to separate Power Contracts, to the other Sponsors of Maine Yankee, each of whom is contemporaneously entering into Amendments which are identical to the Amendment except for the necessary changes in the names of the parties, all of the capacity and the electric energy available from the nuclear generating unit owned by Maine Yankee at a site on the tidewater in the Town of Wiscasset, Maine (such unit being herein together with the site and all related facilities owned by Maine Yankee, referred to as the "Unit").
WHEREAS, Maine Yankee, the Purchaser and the other Sponsors of Maine Yankee believe that the monthly payments provided in the Power Contracts are no longer sufficient to permit Maine Yankee to finance potential modifications to the Unit and to purchase replacement nuclear fuel on an optimum basis and that the implicit return on the equity component of Maine Yankee's capitalization resulting from the payments provided in the Power Contracts may not be sufficient to provide a return on the equity investment in the Unit which is equal to the return achieved on investments of comparable risk.
WHEREAS, in order to facilitate Maine Yankee's future financing and to assure the maintenance of an appropriate level of return on common equity, Maine Yankee and the Purchaser have agreed to enter into this Amendment in order to provide for an appropriate supplemental payment for power delivered from the Unit and to provide for a late payment charge to better ensure prompt payment for power delivered from the Unit.
NOW, THEREFORE, in consideration of the premises and of other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree that the Power Contract is hereby amended as follows:
1. Terms used herein and not defined shall have the meanings set forth in the Power Contract.
2. The third paragraph of Section 7 of the Power Contract is amended to read as follows:
"Composite percentage" shall be computed as of the plant
completion date and as of the last day of each month
thereafter (the "computation date") and for any month the
composite percentage shall be that computed as of the last
day of the previous month. "Composite percentage" as of a
computation date shall be the sum of (i) nine and eight-
tenths percent (9.8%) or such higher percentage as the
Federal Energy Regulatory Commission (the "Commission") from
time to time may allow but not more than twenty percent
(20%), multiplied by the percentage which equity investment
with respect to the Unit (other than equity investment for
the financing of fuel inventory, including nuclear materials
and the cost of fabrication thereof, for the Unit) as of
such date is of the total capital as of such date; plus
(ii) the "effective interest rate" per annum of each
principal amount of indebtedness outstanding on such date
for money borrowed with respect to the Unit (other than for
money borrowed for the financing of fuel inventory,
including nuclear materials and the cost of fabrication
thereof, for the Unit), multiplied by the percentage which
such principal amount is of total capital as of such date.
The "effective interest rate" of each principal amount of
indebtedness referred to in clause (ii) of the next
preceding sentence will reflect the annual interest
requirements and to the extent applicable, amortization of
issue expenses, discounts and premiums, sinking fund call
premiums, expenses and discounts, refunding and retirement
expenses, discounts and premiums, and all other expenses
applicable to the issue.
3. The seventh paragraph of Section 7 of the Power Contract is amended to read as follows:
Maine Yankee's "fuel costs" for any month shall include
(i) amounts chargeable in accordance with the Uniform System
in such month as amortization of costs of fuel assemblies
and components and burnup of nuclear materials for the Unit;
plus (ii) all other amounts properly chargeable in
accordance with the Uniform System to fuel costs for the
Unit less any applicable credits thereto; plus (iii) one-
twelfth of nine and eight-tenths percent (9.8%) or such
higher percentage as the Commission from time to time may
allow, but not more than twenty percent (20%), multiplied by
the equity investment for the financing of fuel inventory,
including nuclear materials and the cost of fabrication
thereof, for the Unit; plus (iv) to the extent not provided
for in any of the foregoing, all payments (or accruals
therefor or amortization thereof) with respect to
obligations incurred in connection with the financing or
leasing of fuel inventory, including nuclear materials and
the cost of fabrication thereof, for the Unit.
4. The last paragraph of Section 7 of the Power Contract is amended to read as follows:
Maine Yankee will bill the Purchaser, as soon as practicable after the end of each month, for all amounts payable by the Purchaser with respect to the particular month. Such bills will be rendered in such detail as the Purchaser may reasonably request and may be rendered on an estimated basis subject to corrective adjustments in subsequent billing periods. All bills shall be due and payable when rendered.
When all or any part of any bill shall remain unpaid
for more than thirty (30) days after the rendering thereof,
simple interest at an annual rate which is 2% in excess of
the current prime rate then in effect at The First National
Bank of Boston shall accrue to Maine Yankee from and after
the due date to the date payment is received and shall be
payable to Maine Yankee on either (i) such unpaid amount, or
(ii) in the event the amount of the bill is disputed, the
amount finally determined to be due and payable.
This Agreement shall become effective on January 1, 1984, or upon such later date as it shall be permitted to become effective by the Federal Energy Regulatory Commission or other governmental regulatory authority having jurisdiction.
This Agreement may be executed in any number of counterparts and each executed counterpart shall have the same force and effect as an original instrument and as if all the parties to all of the counterparts had signed the same instrument. Any signature page of this Agreement may be detached from any counterpart without impairing the legal effect of any signatures thereon, and may be attached to another counterpart of this contract identical in form hereto but having attached it to one or more signature pages.
IN WITNESS WHEREOF, the parties have executed this Agreement by their respective officers hereto duly authorized, as of the date first above written.
MAINE YANKEE ATOMIC POWER COMPANY
By
Its __________________________
Title
Address: Edison Drive
Augusta, Maine 04336
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By ______________________________
Its __________________________
Title
Address: _________________________
Exhibit 10.7.4
FORM OF
ADDITIONAL POWER CONTRACT, dated as of February 1, 1984, between MAINE YANKEE ATOMIC POWER COMPANY ("Maine Yankee"), a Maine corporation, and (the "Purchaser").
It is agreed as follows:
1. Basic Understandings
Maine Yankee was organized in 1966 to provide for the supply of power to its eleven sponsoring utility companies (including the Purchaser), which utilities are hereinafter called the "sponsors". It constructed a nuclear electric generating unit of the pressurized water type, having a maximum net capability of approximately 830 megawatts electric, on Bailey Point in Wiscasset, Maine (said unit being herein, together with the site and all related facilities owned or to be owned by Maine Yankee, referred to as the "Unit"). On June 27, 1973 Maine Yankee was issued a full-term, operating license for the Unit from the Atomic Energy Commission (now the Nuclear Regulatory Commission which, together with any successor agency or agencies, is hereafter called the "NRC"), which license expires on October 21, 2008, and the Unit commenced commercial operation on January 1, 1973.
The Unit is operated to supply power to Maine Yankee's sponsors, each of which by a Power Contract dated as of May 20, 1968, as amended and as may be further amended from time to time (collectively the "Initial Power Contracts"), has undertaken to purchase a fixed percentage of the capacity and output of the Unit for a term extending through January 1, 2003. The names of the sponsors and their respective percentages ("entitlement percentages") of the capacity and output of the Unit are as follows:
Entitlement
Sponsor Percentage
Central Maine Power Company 38.0%
New England Power Company 20.0%
The Connecticut Light and Power Company 12.0%
Bangor Hydro-Electric Company 7.0%
Maine Public Service Company 5.0%
Public Service Company of New Hampshire 5.0%
Cambridge Electric Light Company 4.0%
Montaup Electric Company 4.0%
Western Massachusetts Electric Company 3.0%
Central Vermont Public Service Corporation 2.0%
100.0%
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The sponsors have resold portions of their entitlement percentages of capacity and output of the Unit under the Initial Power Contracts to other utilities (the "secondary purchasers") on terms and conditions substantially equivalent to those in the Initial Power Contracts: in 1972, the three Maine sponsors resold an aggregate of .7158% of the Unit's capacity and output to other utilities in Maine and, also in 1972, the non- Maine sponsors resold an aggregate of 5.5689% of the Unit's capacity and output to other New England utilities outside of Maine (collectively the "Resale Contracts"). In 1983 the Initial Power Contracts were amended to incorporate provisions for collection of funds to defray the ultimate cost of decommissioning the Unit, which costs are being borne pro rata by the secondary purchasers under the Resale Contracts.
Maine Yankee and its sponsors desire to provide for the orderly continuation of the sale and purchase of the capacity and output of the Unit during the useful life of the Unit to the extent it continues beyond the termination date of the Initial Power Contracts, and to provide appropriate provisions for the collection of funds for and the payment of decommissioning and any other costs with respect thereto both during and after the useful life of the Unit. Maine Yankee and its other sponsors are entering into Additional Power Contracts which are identical to this contract except for necessary changes in the names of the parties.
2. Effective Date, Term and Waiver
This contract shall become effective upon receipt by the Purchaser of notice that Maine Yankee has entered into Additional Power Contracts, as contemplated by Section 1 above, with each of its other sponsors. The operative term of this contract shall commence on January 2, 2003, notwithstanding the fact that the useful service life of the Unit may have been terminated prior to that date, and shall terminate upon the later to occur of (i) 30 days after the date on which the last of the financial obligations of Maine Yankee which constitute elements of the purchase price calculated pursuant to Section 7 of this contract has been extinguished by Maine Yankee or (ii) 30 days after the date on which Maine Yankee is finally relieved of any obligations under the last of any licenses (operating and/or possessory) which it now holds from, or which may hereafter be issued to it by, the NRC with respect to the Unit under applicable provisions of the Atomic Energy Act of 1954, as amended from time to time (the "Act").
Maine Yankee and the Purchaser acknowledge that if the useful service life of the Unit is terminated prior to January 2, 2003, then only the provisions of this contract applicable to decommissioning of the Unit will apply during the operative term of this contract.
The Purchaser hereby irrevocably waives its right to extend the
contract term of its Initial Power Contract pursuant to subsections (a) or
(b) of Section 8 thereof.
3. Operation and Maintenance of the Unit
Maine Yankee will operate and maintain the Unit in accordance with good utility practice under the circumstances and all applicable law, including the applicable provisions of the Act and of any licenses issued thereunder to Maine Yankee. Within the limits imposed by good utility practice under the circumstances and applicable law, the Unit will be operated at its maximum capability and on a long hour use basis.
Outages for inspection, maintenance, refueling and repairs and replacements will be scheduled in accordance with good utility practice and insofar as practicable shall be mutually agreed upon by Maine Yankee and the Purchaser. In the event of an outage, Maine Yankee will use its best efforts to restore the Unit to service as promptly as practicable.
4. Decommissioning
After commercial operation of the Unit permanently ceases, Maine Yankee will decommission the Unit in a manner authorized by Maine Yankee's board of directors and approved by the NRC in accordance with the Act and the rules and regulations thereunder then in effect and by any agency having jurisdiction over decommissioning of the Unit.
It is understood that, pursuant to the Initial Power Contracts and the Resale Contracts, the sponsors and secondary purchasers are currently being billed for Total Decommissioning Costs which, as of the date of this contract, are being accumulated in a separate trust fund (the "Maine Yankee Trust") which was established for the purpose of reimbursing Maine Yankee for Decommissioning Expenses incurred in the process of decommissioning the Unit and that such billings are subject to change in accordance with the provisions of the Initial Power Contracts, subject to the jurisdiction of the Federal Energy Regulatory Commission ("FERC"), formerly the Federal Power Commission. It is contemplated that sufficient funds will be accumulated pursuant to those contracts and paragraph 7 hereof to reimburse Maine Yankee for the full cost of decommissioning the Unit.
5. Purchaser's Entitlement
The Purchaser will, throughout the term of this contract, be entitled and obligated to take its entitlement percentage of the capacity and net electrical output of the Unit, at whatever level the Unit is operated or operable, whether more or less than 830 megawatts electric.
6. Deliveries and Metering
The Purchaser's entitlement percentage of the output of the Unit will be delivered to and accepted by it at the step-up substation at the site. All deliveries will be made in the form of 3-phase, 60 cycle, alternating current at a nominal voltage of 345,000 volts. The Purchaser will make its own arrangements for the transmission of its entitlement percentage of the output of the Unit.
Maine Yankee will supply and maintain all necessary metering equipment for determining the quality and conditions of supply of deliveries under this contract, will make appropriate tests of such equipment in accordance with good utility practice and as reasonably requested by the Purchaser, and will maintain the accuracy of such equipment within reasonable limits. Maine Yankee will furnish the Purchaser with such summaries of meter readings as the Purchaser may reasonably request.
7. Payment
With respect to each month commencing on or after January 1, 2003, the
Purchaser will pay Maine Yankee an amount equal to the Purchaser's
entitlement percentage of the sum of (a) Maine Yankee's total fuel costs
for the month with respect to the Unit, plus (b) the Total Decommissioning
Costs for the month with respect to the Unit, plus (c) Maine Yankee's total
operating expenses for the month with respect to the Unit, plus (d) an
amount equal to one-twelfth of the composite percentage for such month of
the net Unit investment as most recently determined in accordance with this
Section 7.
"Composite percentage" shall be computed as of the last day of each month during the term hereof (the "computation date") and for any month the composite percentage shall be that computed as of the last day of the previous month. "Composite percentage" as of a computation date shall be the sum of (i) the equity percentage as of such date multiplied by the percentage which equity investment with respect to the Unit (other than equity investment for the financing of fuel inventory, including nuclear materials and the cost of fabrication thereof, for the Unit) as of such date is of the total capital as of such date; plus (ii) the "effective interest rate" per annum of each principal amount of indebtedness outstanding on such date for money borrowed with respect to the Unit (other than for money borrowed for the financing of fuel inventory, including nuclear materials and the cost of fabrication thereof, for the Unit), multiplied by the percentage which such principal amount is of total capital as of such date. The "effective interest rate" of each principal amount of indebtedness referred to in clause (ii) of the next preceding sentence will reflect the annual interest requirements and to the extent applicable, amortization of issue expenses, discounts and premiums, sinking fund call premiums, expenses and discounts, refunding and retirement expenses, discounts and premiums, and all other expenses applicable to the issue.
"Equity investment" as of any date shall consist of the sum of (i) all amounts theretofore paid to Maine Yankee for all capital stock theretofore issued, plus all capital contributions, less the sum of any amounts paid by Maine Yankee in the form of stock retirements, repurchases or redemptions or return of capital; plus (ii) any credit balance in the capital surplus account not included under (i) and in the earned surplus account on the books of Maine Yankee as of such date.
"Equity percentage" as of any date after commencement of the operative term hereof shall be that percentage which was the "equity percentage" in effect on the last day of the term of the Initial Power Contracts or such other percentage as may from time to time thereafter be approved by FERC.
"Total capital" as of any date shall be the equity investment with respect to the Unit, plus the total of all other securities and indebtedness then outstanding with respect to the Unit other than equity investment, securities, indebtedness and other obligations issued in connection with the financing or leasing of fuel inventory, including nuclear materials and the cost of fabrication thereof, for the Unit.
"Uniform System" shall mean the Uniform System of Accounts prescribed by FERC for Class A and Class B Public Utilities and Licensees as in effect on the date of this Agreement and as said System may be hereafter amended to take account of private ownership of special nuclear material.
Maine Yankee's "fuel costs" for any month shall include (i) amounts chargeable in accordance with the Uniform System in such month as amortization of costs of fuel assemblies and components and burn-up of nuclear materials for the Unit; plus (ii) all other amounts properly chargeable in accordance with the Uniform System to fuel costs for the Unit less any applicable credits thereto; plus (iii) one-twelfth of the equity percentage as of such month multiplied by the equity investment for the financing of fuel inventory, including nuclear materials and the cost of fabrication thereof, for the Unit; plus (iv) to the extent not provided for in any of the foregoing, all payments (or accruals therefor or amortization thereof) with respect to obligations incurred in connection with the financing or leasing of fuel inventory, including nuclear materials and the cost of fabrication thereof, for the Unit (provided that such inventory is not included in the net Unit investment).
Maine Yankee's "operating expenses" shall include all amounts properly chargeable to operating expenses accounts (other than such amounts which are included in Maine Yankee's fuel costs), less any applicable credits thereto, in accordance with the Uniform System; it being understood that for purposes of this contract "operating expenses" shall include depreciation accrual and amortization at a rate at least sufficient to fully amortize the non-salvageable plant investment over the estimated remaining useful life of the plant.
The "net Unit investment" shall consist, in each case with respect to
the Unit, the net sum of (i) the aggregate amount properly chargeable at
the time in accordance with the Uniform System to Maine Yankee's electric
plant accounts (including construction work in progress); less (ii) the
amount of any unamortized property losses; less (iii) the amount of
reserves for depreciation and for amortization of property losses; plus
(iv) such allowances for inventories, materials and supplies (other than
fuel assemblies and components), prepaid items and cash working capital as
may reasonably be determined from time to time by Maine Yankee. The net
Unit investment shall be determined as of the commencement of each calendar
year, or, if Maine Yankee elects, at more frequent intervals.
"Total Decommissioning Costs" for any month shall mean the sum of
(x) an amount equal to all accruals in such month to any reserve, as from
time to time established by Maine Yankee and approved by its board of
directors, to provide for the ultimate payment of the Decommissioning
Expenses of the Unit plus (y) Decommissioning Tax Liability for such month.
It is understood (i) that such funds may be held by Maine Yankee or by any
independent trust or other separate fund, as determined by said board of
directors, (ii) that, upon compliance with Section 18 hereof, the amount,
custody and/or timing of such accruals may from time to time during the
term hereof be modified by said board of directors in its discretion or to
comply with applicable statutory or regulatory requirements or to reflect
changes in the amount, custody or timing of anticipated Decommissioning
Expenses, and (iii) that the use of the term "to decommission" herein
encompasses compliance with all requirements (other than those relating to
spent nuclear fuel) of the NRC for permanent cessation of operation of a
nuclear facility. "Decommissioning Expenses" shall include:
(1) All costs and expenses of removing the Unit from service, including without limitation, dismantling, mothballing, removing radioactive material (excluding spent nuclear fuel) to temporary and/or permanent storage sites, decontaminating, restoring and supervising the site, and any costs and expenses incurred in connection with proceedings before governmental regulatory authorities relating to any authorization to decommission the Unit or remove the Unit from service;
(2) All costs of labor and services, whether directly or indirectly incurred, including without limitation services of foremen, inspectors, supervisors, surveyors, engineers, security personnel, counsel and accountants, performed or rendered in connection with the decommissioning of the Unit and the removal of the Unit from service, and all costs of materials, supplies, machinery, construction equipment and apparatus acquired or used (including rental charges for machinery, equipment or apparatus hired) for or in connection with the decommissioning of the Unit and the removal of the Unit from service, and all administrative costs, including services of counsel and financial advisers, of any applicable independent trust or other separate fund; it being understood that any amount, exclusive of proceeds of insurance, realized by Maine Yankee as salvage on any machinery, construction equipment and apparatus, the cost of which was charged to Decommissioning Expense, shall be treated as a reduction of the amounts otherwise chargeable on account of the costs of decommissioning of the Unit; and
(3) All overhead costs applicable to the Unit during its decommissioning period, including, without limiting the generality of the foregoing, taxes (other than taxes on or in respect of income), licenses, excises and assessments, casualties, surety bond premiums and insurance premiums.
"Decommissioning Tax Liability" for any month shall be an amount established by Maine Yankee and approved by its board of directors to meet possible income tax obligations, which amount shall not exceed: the amount to be included in the clause (x) portion of Total Decommissioning Costs for such month multiplied by a fraction whose numerator is equal to the combined highest statutory Federal and state marginal income tax rate and whose denominator is equal to one minus the combined highest statutory Federal and state marginal income tax rate.
Without limiting the generality of the foregoing, any other amounts
expended or to be paid with respect to decommissioning of the Unit or
removal of the Unit from service shall constitute part of the
Decommissioning Expenses if they are, or when paid will be, either
(i) properly chargeable to any account related to decommissioning of a
nuclear generating unit in accordance with the Uniform System or generally
accepted accounting principles as then in effect, or (ii) properly
chargeable to decommissioning of a nuclear generating unit in accordance
with then applicable regulations of the NRC or FERC or any other regulatory
agency having jurisdiction.
8. Billing
Maine Yankee will bill the Purchaser, as soon as practicable after the end of each month, for all amounts payable by the Purchaser with respect to the particular month pursuant to Section 7 hereof. Such bills will be rendered in such detail as the Purchaser may reasonably request and may be rendered on an estimated basis subject to corrective adjustments in subsequent billing periods. All bills shall be paid in full within 10 days after receipt thereof by the Purchaser.
When all or any part of any bill shall remain unpaid for more than thirty (30) days after the due date thereof, simple interest at an annual rate which is at all times 1% in excess of the prime rate for commercial loans in effect at The First National Bank of Boston shall accrue to Maine Yankee from and after the thirtieth day from the due date of said bill.
9. Decommissioning Fund
Maine Yankee agrees to pay to, or cause to be paid to, the Maine Yankee Trust or any successor trust approved by the board of directors of Maine Yankee all funds collected hereunder for the express purpose of decommissioning the Unit or removing the Unit from service and further agrees that, after the tax consequences of decommissioning collections have been resolved, any funds collected hereunder to meet Decommissioning Tax Liability which are not used for that purpose will be refunded to the Purchaser to the extent required by FERC.
10. Cancellation of Contract
If deliveries cannot be made to the Purchaser because either
(i) the Unit is damaged to the extent of being completely or substantially completely destroyed, or
(ii) the Unit is taken by exercise of the right of eminent domain or a similar right or power, or
(iii) (a) the Unit cannot be used because of contamination, or because a necessary license or other necessary public authorization cannot be obtained or is revoked, or because the utilization of such a license or authorization is made subject to specified conditions which are not met, and (b) the situation cannot be rectified to an extent which will permit Maine Yankee to make deliveries to the Purchaser from the Unit;
then and in any such case, the Purchaser may cancel the provisions of this
contract, except that in all cases other than those described in clause
(ii) above, the provisions relating to the payment of Total Decommissioning
Costs shall, whether or not the Unit is operated or operable and
notwithstanding any earlier termination of the service life of the Unit,
remain in full force and effect until the expiration of the term hereof, it
being recognized that such costs represent deferred payment in connection
with power theretofore delivered by Maine Yankee hereunder. Such
cancellation shall be effected by written notice given by the Purchaser to
maine Yankee. In the event of such cancellation, all continuing
obligations of the parties hereunder (other than the obligations relating
to the payment and application of Total Decommissioning Costs to the extent
that such obligations remain in full force and effect pursuant to the
second preceding sentence, but including the Purchaser's obligations to
continue payments pursuant to clauses (a), (c) and (d) of the first
paragraph of Section 7 hereof) shall cease forthwith. Notwithstanding the
foregoing, the applicable provisions of this contract shall continue in
effect after the cancellation hereof to the extent necessary to permit
final billings and adjustments hereunder with respect to obligations
incurred through the date of cancellation and the collection thereof. Any
dispute as to the Purchaser's right to cancel this contract pursuant to the
forgoing provisions shall be referred to arbitration in accordance with the
provisions of Section 14 hereof.
Notwithstanding anything in this contract elsewhere contained, the Purchaser may cancel this contract or be relieved of its obligations to make payments hereunder only as provided in the next preceding paragraph of this Section 10. Further, if for reasons beyond Maine Yankee's reasonable control, deliveries are not made as contemplated by this contract, Maine Yankee shall have no liability to the Purchaser on account of such non- delivery.
11. Insurance
Maine Yankee presently has in effect, and hereafter will at all times maintain until the expiration of the term hereof, insurance to cover its "public liability" for personal injury and property damage resulting from a "nuclear incident" (as those terms are defined in the Act), with limits not less than Maine Yankee may be required to maintain to qualify for governmental indemnity under the Act and shall execute and maintain an indemnification agreement with the NRC as provided by the Act. Maine Yankee will also at all times maintain such other types of liability insurance, including workmen's compensation insurance, in such amounts as is customary in the case of other similar electric utility companies or as may be required by law.
Maine Yankee will at all times keep insured such portions of the Unit (other than the fuel assemblies and components, including nuclear materials) as are of a character usually insured by electric utility companies similarly situated and operating like properties, against the risk of a "nuclear incident" ad such other risks as electric utility companies, similarly situated and operating like properties, usually insure against; and such insurance shall to the extent available be carried in amounts sufficient to prevent Maine Yankee from becoming a co-insurer. Maine Yankee will at all times keep its fuel assemblies and components (including nuclear materials) insured against such risks and in such amounts as shall, in the opinion of Maine Yankee, provide adequate protection.
12. Additional Units
At any time after the date hereof Maine Yankee or its nominees may install one or more additional generating units at the Wiscasset site. The installation of such unit or units shall not affect the terms of this contract, but in such case if any portion of the Unit (whether such portion constitutes land, structures or equipment) is also used with an additional unit or units, an appropriate allocation of the cost of the Unit shall be made and the net Unit investment shall be reduced accordingly, subject, however, to the limitation that the aggregate amount of the reduction in net Unit investment resulting from all such allocations shall not exceed $5,000,000. Maine Yankee may make any other necessary allocations or any necessary adjustments in its accounts with respect to the Unit (including fuel assemblies and components) and any additional unit or units, and such allocations and adjustments shall be binding on the sponsors.
13. Audit
Maine Yankee's books and records (including metering records) shall be open to reasonable inspection and audit by the Purchaser.
14. Arbitration
In case any dispute shall arise as to the interpretation or performance of this contract which cannot be settled by mutual agreement and which may be finally determined by arbitration under the law of the State of Maine then in effect, such dispute shall be submitted to arbitration, and arbitration of such dispute shall be a condition precedent to any action at law or suit in equity that can be brought. The parties shall if possible agree upon a single arbitrator. In case of failure to agree upon an arbitrator within 15 days after the delivery by either party to the other of a written notice requesting arbitration, either party may request the American Arbitration Association to appoint the arbitrator. The arbitrator, after opportunity for each of the parties to be heard, shall consider and decide the dispute and notify the parties in writing of his decision. The expenses of the arbitration shall be borne equally by the parties.
15. Regulation
This contract, and all rights, obligations and performance of the parties hereunder, are subject to all applicable state and federal law and to all duly promulgated orders and other duly authorized action of governmental authority having jurisdiction in the premises.
16. Assignment
This contract shall be binding upon and shall inure to the benefit of, and may be performed by, the successors and assigns of the parties, except that no assignment, pledge or other transfer of this contract by either party shall operate to release the assignor, pledgor or transferor from any of its obligations under this contract unless consent to the release is given in writing by the other party, or, if the other party has theretofore assigned, pledged or otherwise transferred its interest in this contract, by the other party's assignee, pledgee or transferee, or unless such transfer is incident to a merger or consolidation with, or transfer of all or substantially all of the assets of the transferor to, another sponsor which shall, as a part of such succession, assume all the obligations of the transferor under this contract.
17. Right of Setoff
The Purchaser shall not be entitled to set off against the payments required to be made by it under this contract (i) any amounts owed to it by Maine Yankee or (ii) the amount of any claim by it against Maine Yankee. However, the foregoing shall not affect in any other way the Purchaser's right and remedies with respect to any such amounts owed to it by Maine Yankee or any such claim by it against Maine Yankee.
18. Amendments
Upon authorization by Maine Yankee's board of directors of uniform amendments to all the Additional Power Contracts with sponsors, Maine Yankee shall have the right to amend the provisions of Section 7 hereof insofar as they relate to the amounts collectible by Maine Yankee pursuant to clause (b) of the first paragraph of Section 7 hereof or to the timing of such collections by serving an appropriate statement of such amendment upon the Purchaser and filing the same with FERC (or such other regulatory agency as may have jurisdiction in the premises) in accordance with the provisions of applicable laws and any rules and regulations thereunder, and the amendment shall thereupon become effective on the date specified therein, subject to any suspension order issued by such agency. All other amendments to this contract shall be by mutual agreement, evidenced by a written amendment signed by the parties hereto.
19. Interpretation
The interpretation and performance of this contract shall be in accordance with and controlled by the law of the State of Maine.
20. Addresses
Except as the parties may otherwise agree, any notice, request, bill or other communication from one party to the other, relating to this contract, or the rights, obligations or performance of the parties hereunder, shall be in writing and shall be effective upon delivery to the other party. Any such communication shall be considered as duly delivered when delivered in person or mailed by registered or certified mail, postage prepaid, to the post office address of the other party shown following the signature of such other party hereto, or such other address as may be designated by written notice given as provided in this Section 20.
21. Corporate Obligations
This contract is the corporate act and obligation of the parties hereto, and any claim hereunder against any stockholder (other than the Purchaser), director or officer of either party, as such, is expressly waived.
22. All Prior Agreements Superseded
This contract represents the entire agreement between the parties relating to the subject matter hereof during the operative term hereof (i.e., post-January 1, 2003), and all previous agreements, discussions, communications and correspondence with respect to the subject matter are hereby superseded and are of no further force and effect.
IN WITNESS WHEREOF, the parties have executed this contract by their respective officers thereunto duly authorized as of the date first above written.
MAINE YANKEE ATOMIC POWER COMPANY
By
President
Edison Drive
Augusta, Maine 04336
PURCHASER
By
Exhibit 10.10.2
Form of
Amendment No. 2 to
Vermont Yankee Power Contract
AMENDMENT, dated as of April 15, 1983, between VERMONT YANKEE NUCLEAR POWER CORPORATION ("Vermont Yankee"), a Vermont corporation and (the "Purchaser") to the Power Contract, dated as of February 1, 1968, as amended as of June 1, 1972, between Vermont Yankee and the Purchaser.
It is agreed that, in order to provide for the accrual of an appropriate fund for decommissioning the Vermont Yankee nuclear generating plant at the end of its useful life, said Power Contract is hereby amended as follows:
1. The second paragraph of Section 7 is hereby amended to insert the clause "or, in the case of payments under clause (b) below, commencing on or after the date authorized by FERC" and the clause "plus (b) the Total Decommissioning Costs for the month with respect to the Unit," and to reletter the two final clauses, so that the entire paragraph reads as follows:
"With respect to each month commencing on or after the plant completion date or, in the case of payments under clause (b) below, commencing on or after the date authorized by FERC, the Purchaser will pay Vermont Yankee an amount equal to the Purchaser's entitlement percentage of the sum of (a) Vermont Yankee's total fuel costs for the month with respect to the Unit, plus (b) the Total Decommissioning Costs for the month with respect to the Unit, plus (c) Vermont Yankee's total operating expenses for the month with respect to the Unit, plus (d) an amount equal to one-twelfth of the composite percentage for such month of the net Unit investment as most recently determined in accordance with this Section 7."
2. Section 7 is further amended by inserting therein immediately preceding the ultimate paragraph thereof the following three paragraphs:
"Total Decommissioning Costs" for any month shall mean the
sum of (x) an amount equal to all accruals in such month to any
reserve, as from time to time established by Vermont Yankee and
approved by its board of directors, to provide for the ultimate
payment of the Decommissioning Expenses of the Unit plus
(y) Decommissioning Tax Liability for such month. It is
understood (i) that such funds may be held by Vermont Yankee or,
if required, by an independent trust or other separate fund, as
determined by said board of directors, (ii) that, upon compliance
with Section 20 hereof, the amount, custody and/or timing of such
accruals may from time to time during the term hereof be modified
by said board of directors in its discretion or to comply with
applicable statutory or regulatory requirements or to reflect
changes in the amount, custody or timing of anticipated
Decommissioning Expenses, and (iii) that the use of the term "to
decommission" herein encompasses compliance with all requirements
(other than those relating to spent nuclear fuel) of the Nuclear
Regulatory Commission or its successors (NRC) for permanent
cessation of operation of a nuclear facility.
"Decommissioning Expenses" shall include:
(1) All costs and expenses of removing the Unit from service, including without limitation, dismantling, mothballing, removing radioactive material (excluding spent nuclear fuel) to temporary and/or permanent storage sites, decontaminating, restoring and supervising the site, and any costs and expenses incurred in connection with proceedings before governmental regulatory authorities relating to any authorization to decommission the Unit or remove the Unit from service;
(2) All costs of labor and services, whether directly or indirectly incurred, including without limitation services of foremen, inspectors, supervisors, surveyors, engineers, security personnel, counsel and accountants, performed or rendered in connection with the decommissioning of the Unit and the removal of the Unit from service, and all costs of materials, supplies, machinery, construction equipment and apparatus acquired or used (including rental charges for machinery, equipment or apparatus hired) for or in connection with the decommissioning of the Unit and the removal of the Unit from service, and all administrative costs, including services of counsel and financial advisers, of any applicable independent trust or other separate fund; it being understood that any amount, exclusive of proceeds of insurance, realized by Vermont Yankee as salvage on any machinery, construction equipment and apparatus, the cost of which was charged to Decommissioning Expense, shall be treated as a reduction of the amounts otherwise chargeable on account of the costs of decommissioning of the Unit; and
(3) All overhead costs applicable to the Unit during its decommissioning period, including, without limiting the generality of the foregoing, taxes (other than taxes on or in respect of income), licenses, excises, and assessments, casualties, surety bond premiums and insurance premiums.
"Decommissioning Tax Liability" for any month shall be an amount established by Vermont Yankee and approved by its board of directors to meet possible income tax obligations, which amount shall not exceed: the amount to be included in the clause (x) portion of Total Decommissioning Costs for such month multiplied by a fraction whose numerator is equal to the combined highest statutory federal and state marginal income tax rate and whose denominator is equal to one minus the combined highest statutory federal and state marginal income tax rate. Vermont Yankee will use its best efforts to obtain as promptly as possible favorable tax treatment of the payments for Total Decommissioning Costs hereunder so that Decommissioning Tax Liability may be minimized.
Without limiting the generality of the foregoing, amounts expended or to be paid with respect to decommissioning of the Unit or removal of the Unit from service shall constitute part of the Decommissioning Expenses if they are, or when paid will be, either (i) properly chargeable to any account related to decommissioning of a nuclear generating unit in accordance with the Uniform System or generally accepted accounting principles as then in effect, or (ii) properly chargeable to decommissioning of a nuclear generating unit in accordance with then applicable regulations of the NRC or the Federal Energy Regulatory Commission or its successors (FERC) or any other regulatory agency having jurisdiction."
3. A new Section 7A is hereby inserted therein immediately following Section 7 thereof as follows:
"7A. Decommissioning Fund.
Vermont Yankee agrees to cause an appropriate decommissioning fund to be established in accordance with applicable regulatory requirements. It is anticipated that FERC may require an independent trust or other separate fund to be created which will have the necessary powers to hold and invest all funds collected for the decommissioning of the Unit and to disburse the same to pay, or to reimburse Vermont Yankee for, such costs when actually incurred for decommissioning of the Unit or removal of the Unit from service. If during the term of such trust or fund federal or state legislation or regulations are promulgated which so permit or require, or an alternative entity is created for funding decommissioning of the Unit, such trust will have the authority, with the concurrence of Vermont Yankee, to transfer its trust estate to such newly authorized entity for the purpose of providing for the decommissioning of the Unit or removal of the Unit from service.
Vermont Yankee agrees to pay to, or cause to be paid to, said decommissioning fund or trust all funds collected hereunder for the express purpose of decommissioning the Unit or removing the Unit from service and further agrees that, after the tax consequences of decommissioning collections have been resolved, any funds collected hereunder to meet Decommissioning Tax Liability which are not used for that purpose will be refunded as Purchaser."
4. The last five lines of the first paragraph of Section 9 following clause (iii) thereof are hereby amended to read as follows:
"then and in any such case, the Purchaser may cancel the provisions of this contract, except that in all cases other than those described in clause (ii) above, the provisions relating to the payment of Total Decommissioning Costs shall, whether or not the Unit is operated or operable and notwithstanding any earlier termination of the service life of the Unit, remain in full force and effect until December 31, 2002 or the completion of decommissioning, whichever is earlier. Such cancellation shall be effected by written notice given by the Purchaser to Vermont Yankee. In the event of such cancellation, all continuing obligations of the parties other than the obligations relating to the payment and application of Total Decommissioning Costs to the extent excluded from such cancellation by the second preceding sentence, but including the Purchaser's obligations to continue payments pursuant to clauses (a), (c), and (d) of the second paragraph of Section 7 hereof, shall cease forthwith. Any dispute as to the Purchaser's right to cancel this contract pursuant to the foregoing provisions shall be referred to arbitration in accordance with the provisions of Section 12.
5. A new Section 20 is inserted therein as follows:
"20. Amendments
Upon authorization by Vermont Yankee's board of directors of
uniform amendments to all the sponsor power contracts, Vermont
Yankee shall have the right to amend the provisions of Section 7
hereof insofar as they relate to the amounts collectible by
Vermont Yankee pursuant to clause (b) of the second paragraph of
Section 7 hereof or to the timing of such collections by serving
an appropriate statement of such amendment upon the Purchaser and
filing the same with FERC (or such other regulatory agency as may
have jurisdiction in the premises) in accordance with the
provisions of applicable laws and any rules and regulations
thereunder, and the amendment shall thereupon become effective on
the date specified therein, subject to any suspension order duly
issued by such agency. All other amendments to this contract
shall be by mutual agreement, evidenced by a written amendment
signed by the parties hereto."
This Amendment No. 2 shall become effective on April 24, 1983, subject to any suspension order duly issued by the Federal Energy Regulatory Commission.
IN WITNESS WHEREOF, the parties have executed this amendment by their respective officers duly authorized as of the day and year first named above.
VERMONT YANKEE NUCLEAR POWER CORPORATION
By ______________________________
President
R.D. 5, Ferry Road, Box 169
Brattleboro, Vermont 05301
PURCHASER
By ______________________________
(Officer)
Exhibit 10.10.9
FORM OF
ADDITIONAL POWER CONTRACT, dated as of February 1, 1984, between VERMONT YANKEE NUCLEAR POWER CORPORATION ("Vermont Yankee"), a Vermont corporation, and (the "Purchaser").
It is agreed as follows:
1. Basic Understandings
Vermont Yankee was organized in 1966 to provide for the supply of power to its sponsoring utility companies (including the Purchaser), which utilities are hereinafter called the "sponsors". It constructed a nuclear electric generating unit of the boiling water type, having a maximum net capability of approximately 540 megawatts electric, at a site adjacent to the Connecticut River at Vernon, Vermont (said unit being herein, together with the site and all related facilities owned or to be owned by Vermont Yankee, referred to as the "Unit"). On February 28, 1973 Vermont Yankee was issued a full-term, operating license for the Unit from the Atomic Energy Commission (now the Nuclear Regulatory Commission which, together with any successor agency or agencies, is hereafter called the "NRC"), which license expires on December 11, 2007, and the Unit commenced commercial operation on November 30, 1972.
The Unit is operated to supply power to Vermont Yankee's sponsors, each of which by a Power Contract dated as of February 1, 1968, as amended (collectively the "Initial Power Contracts"), has undertaken to purchase a fixed percentage of the capacity and output of the Unit for a term extending through November 30, 2002. The names of the sponsors and their respective percentages ("entitlement percentages") of the capacity and output of the Unit are as follows:
Entitlement
Sponsor Percentage
Central Vermont Public Service Corporation 35.0%
Green Mountain Power Corporation 20.0%
New England Power Company 20.0%
The Connecticut Light and Power Company 9.5%
Central Maine Power Company 4.0%
Public Service Company of New Hampshire 4.0%
Western Massachusetts Electric Company 2.5%
Montaup Electric Company 2.5%
Cambridge Electric Light Company 2.5%
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The sponsors have resold portions of their entitlement percentages of capacity and output of the Unit under the Initial Power Contracts to other utilities (the "secondary purchasers") on terms and conditions substantially equivalent to those in the Initial Power Contracts: in 1969, the two Vermont sponsors resold an aggregate of 7.426% of the Unit's capacity and output to other utilities in Vermont; and in 1970 the non- Vermont sponsors resold an aggregate of 4.5451% of the Unit's capacity and output to other New England utilities outside of Vermont (collectively the "Resale Contracts"). In 1983 the Initial Power Contracts were amended to incorporate provisions for collection of funds to defray the ultimate cost of decommissioning the Unit, which costs are being borne pro rata by said secondary purchasers under the Resale Contracts.
Vermont Yankee and its sponsors desire to provide for the orderly continuation of the sale and purchase of the capacity and output of the Unit during the useful life of the Unit to the extent it continues beyond the termination date of the Initial Power Contracts and to provide appropriate provisions for the collection of funds for and the payment of decommissioning and any other costs with respect thereto both during and after the useful life of the Unit. Vermont Yankee and its other sponsors are entering into Additional Power Contracts which are identical to this contract except for necessary changes in the names of the parties.
2. Effective Date, Term and Waiver
This contract shall become effective upon receipt by the Purchaser of notice that Vermont Yankee has entered into additional power contracts, as contemplated by Section 1 above, with each of its other sponsors. The operative term of this contract shall commence on December 1, 2002 notwithstanding the fact that the useful service life of the Unit may have been terminated prior to that date, and shall terminate upon the later to occur of (i) 30 days after the date on which the last of the financial obligations of Vermont Yankee which constitute elements of the purchase price calculated pursuant to Section 7 of this contract has been extinguished by Vermont Yankee or (ii) 30 days after the date on which Vermont Yankee is finally relieved of any obligations under the last of any licenses (operating and/or possessory) which it now holds from, or which may hereafter be issued to it by, the NRC with respect to the Unit under applicable provisions of the Atomic Energy Act of 1954, as amended from time to time (the "Act").
Vermont Yankee and the Purchaser acknowledge that, if the useful service life of the Unit is terminated prior to December 1, 2002, then only the provisions of this contract applicable to decommissioning of the Unit will apply during the operative term of this contract.
The Purchaser hereby irrevocably waives its right to extend the
contract term of its Initial Power Contract pursuant to subsections (a) or
(b) of Section 8 thereof.
3. Operation and Maintenance of the Unit
Vermont Yankee will operate and maintain the Unit in accordance with good utility practice under the circumstances and all applicable law, including the applicable provisions of the Act and of any licenses issued thereunder to Vermont Yankee. Within the limits imposed by good utility practice under the circumstances and applicable law, the Unit will be operated at its maximum capability and on a long hour use basis.
Outages for inspection, maintenance, refueling and repairs and replacements will be scheduled in accordance with good utility practice and insofar as practicable shall be mutually agreed upon by Vermont Yankee and the Purchaser. In the event of an outage, Vermont Yankee will use its best efforts to restore the Unit to service as promptly as practicable.
4. Decommissioning
After commercial operation of the Unit permanently ceases, Vermont Yankee will decommission the Unit in a manner authorized by Vermont Yankee's board of directors and approve by the NRC in accordance with the Act and the rules and regulations thereunder then in effect and by any agency having jurisdiction over decommissioning of the Unit.
It is understood that, pursuant to the Initial Power Contracts and the Resale Contracts, the sponsors and secondary purchasers are currently being billed for Total Decommissioning Costs which, as of the date of this contract, are being accumulated in a separate fund which was established for the purpose of reimbursing Vermont Yankee for Decommissioning Expenses incurred in the process of decommissioning the Unit and that such billings are subject to change in accordance with the provisions of the Initial Power Contracts, subject to the jurisdiction of FERC. It is contemplated that sufficient funds will be accumulated pursuant to those contracts and paragraph 7 hereof to reimburse Vermont Yankee for the full cost of decommissioning the Unit.
5. Purchaser's Entitlement
The Purchaser will, throughout the term of this contract, be entitled and obligated to take its entitlement percentage of the capacity and net electrical output of the Unit, at whatever level the Unit is operated or operable, whether more or less than 540 megawatts electric.
6. Deliveries and Metering
The Purchaser's entitlement percentage of the output of the Unit will be delivered to and accepted by it at the step-up substation at the site. All deliveries will be made in the form of 3-phase, 60 cycle, alternating current at a nominal voltage of 345,000 volts. The Purchaser will make its own arrangements for the transmission of its entitlement percentage of the output of the Unit.
Vermont Yankee will supply and maintain all necessary metering equipment for determining the quantity and conditions of supply of deliveries under this contract, will make appropriate tests of such equipment in accordance with good utility practice and as reasonably requested by the Purchaser, and will maintain the accuracy of such equipment within reasonable limits. Vermont Yankee will furnish the Purchaser with such summaries of meter readings as the Purchaser may reasonably request.
7. Payment
With respect to each month commencing on or after December 1, 2002,
the Purchaser will pay Vermont Yankee an amount equal to the Purchaser's
entitlement percentage of the sum of (a) Vermont Yankee's total fuel costs
for the month with respect to the Unit, plus (b) the Total Decommissioning
Costs for the month with respect to the Unit, plus (c) Vermont Yankee's
total operating expenses for the month with respect to the Unit, plus
(d) an amount equal to one-twelfth of the composite percentage for such
month of the net Unit investment as most recently determined in accordance
with this Section 7.
"Composite percentage" shall be computed as of the last day of each month during the term hereof (the "computation date") and for any month the composite percentage shall be that computed as of the most recent computation date. "Composite percentage" as of a computation date shall be the sum of (i) the equity percentage as of such date multiplied by the percentage which equity investment as of such date is of the total capital as of such date; plus (ii) the stated interest rate per annum of each principal amount of indebtedness bearing a particular rate of interest outstanding on such date for money borrowed from other than sponsors multiplied by the percentage which such principal amount is of total capital as of such date.
"Equity percentage" as of any date after the commencement of the operative term hereof shall be that percentage which was the "equity percentage" in effect on the last day of the term of the Initial Power Contracts or such other percentage as may from time to time thereafter be approved by the Federal Energy Regulatory Commission or any successor agency thereto ("FERC").
"Common stock equity investment" as of any date shall consist of equity investment as of such date less the aggregate par value of all issues of preferred stock outstanding on such date.
"Equity investment" as of any date shall consist of not less than the
sum of (i) all amounts theretofore paid to Vermont Yankee for all capital
stock theretofore issued (taken at the total par value thereof plus the
total of all amounts in excess of such par value paid thereon); plus all
capital contributions, loans and advances theretofore made to Vermont
Yankee by its sponsors, less the sum of any amounts distributed by Vermont
Yankee to its sponsors or stockholders in the form of stock repurchases or
redemptions, return of capital or repayments of loans and advances; plus
(ii) any credit balance in the capital surplus account (not included under
(i)) and in the earned surplus account on the books of Vermont Yankee as of
such date.
"Total capital" as of any date shall be the equity investment plus the total of all indebtedness then outstanding for money borrowed from other than Vermont Yankee's sponsors.
"Uniform System" shall mean the Uniform System of Accounts prescribed by the FERC for Class A and Class B Public Utilities and Licensees as from time to time in effect.
Vermont Yankee's "fuel costs" for any month shall include (i) amounts chargeable in accordance with the Uniform System in such month as amortization of costs of fuel assemblies and components and burn-up of nuclear materials for the Unit; plus (ii) all other amounts properly chargeable in accordance with the Uniform System to fuel costs for the Unit less any applicable credits thereto; plus (iii) to the extent not so chargeable, all payments (or accruals therefor) with respect to lease or other financing obligations incurred in connection with such fuel assemblies and components. Including nuclear materials, for the Unit (provided such fuel assemblies and components are not included in net Unit investment), and with the temporary or permanent storage or disposal thereof.
Vermont Yankee's "operating expenses" shall include all amounts
properly chargeable to operating expense accounts (other than such amounts
which are included in Vermont Yankee's fuel costs), less any applicable
credits thereto, in accordance with the Uniform System; it being understood
that for purposes of this contract "operating expenses" shall include
(i) depreciation accrual at a rate at least sufficient to fully amortize
the non-salvageable plant investment over the estimated remaining useful
life of the plant; and (ii) obligations incurred in connection with the
leasing of plant facilities.
The "net Unit investment" shall consist, in each case with respect to the Unit, of (i) the aggregate amount properly chargeable at the time in accordance with the Uniform System to Vermont Yankee's electric plant accounts (including construction work in progress) less the amount of any accumulated provisions for depreciation thereof; plus (ii) the aggregate amount properly chargeable at the time in accordance with the Uniform System to accounts representing fuel assemblies and components (including nuclear materials) and other materials and supplies, less the balance, if any, at the time of the accumulated amortization thereof; plus (iii) such reasonable allowances for prepaid items and cash working capital as may from time to time be determined by Vermont Yankee. The net Unit investment shall be determined as of the commencement of each calendar year, or, if Vermont Yankee elects, at more frequent intervals.
"Total Decommissioning Costs" for any month shall mean the sum of
(x) an amount equal to all accruals in such month to any reserve, as from
time to time established by Vermont Yankee and approved by its board of
directors, to provide for the ultimate payment of the Decommissioning
Expenses of the Unit plus (y) Decommissioning Tax Liability for such month.
It is understood (i) that such funds may be held by Vermont Yankee or by an
independent trust or other separate fund, as determined by said board of
directors, (ii) that, upon compliance with Section 17 hereof, the amount,
custody and/or timing of such accruals may from time to time during the
term hereof be modified by said board of directors in its discretion or to
comply with applicable statutory or regulatory requirements or to reflect
changes in the amount, custody or timing of anticipated Decommissioning
Expenses, and (iii) that the use of the term "to decommission" herein
encompasses compliance with all requirements (other than those relating to
spent nuclear fuel) of the NRC for permanent cessation of operation of a
nuclear facility and any other activities reasonably related thereto.
"Decommissioning Expenses" shall include:
(1) All costs and expenses of removing the Unit from service, including without limitation, dismantling, mothballing, removing radioactive material (excluding spent nuclear fuel) to temporary and/or permanent storage site, decontaminating, restoring and supervising the site, and any costs and expenses incurred in connection with proceedings before governmental regulatory authorities relating to any authorization to decommission the Unit or remove the Unit from service;
(2) All costs of labor and services, whether directly or indirectly incurred, including without limitation services of foremen, inspectors, supervisors, surveyors, engineers, security personnel, counsel and accountants, performed or rendered in connection with the decommissioning of the Unit and the removal of the Unit from service, and all costs of materials, supplies, machinery, construction equipment and apparatus acquired or used (including rental charges for machinery, equipment or apparatus hired) for or in connection with the decommissioning of the Unit and the removal of the Unit from service, and all administrative costs, including services of counsel and financial advisers, of any applicable independent trust or other separate fund; it being understood that any amount, exclusive of proceeds of insurance, realized by Vermont Yankee as salvage on any machinery, construction equipment and apparatus, the cost of which was charged to Decommissioning Expense, shall be treated as a reduction of the amounts otherwise chargeable on account of the costs of decommissioning of the Unit; and
(3) All overhead costs applicable to the Unit during its decommissioning period, including, without limiting the generality of the foregoing, taxes (other than taxes on or in respect of income), charges, licenses, excises and assessments, casualties, surety bond premiums and insurance premiums.
"Decommissioning Tax Liability" for any month shall be an amount established by Vermont Yankee and approved by its board of directors to meet possible income tax obligations, which amount shall not exceed: the amount to be included in the clause (x) portion of Total Decommissioning Costs for such month multiplied by a fraction whose numerator is equal to the combined highest statutory Federal and state marginal income tax rate and whose denominator is equal to one minus the combined highest statutory Federal and state marginal income tax rate.
Without limiting the generality of the foregoing, amounts expended or to be paid with respect to decommissioning of the Unit or removal of the Unit from service shall constitute part of the Decommissioning Expenses if they are, or when paid will be, either (i) properly chargeable to any account related to decommissioning of a nuclear generating unit in accordance with the Uniform System or generally accepted accounting principles as then in effect, or (ii) properly chargeable to decommissioning of a nuclear generating unit in accordance with then applicable regulations of the NRC or the FERC or any other regulatory agency having jurisdiction.
8. Billing
Vermont Yankee will bill the Purchaser, as soon as practicable after the end of each month, for all amounts payable by the Purchaser with respect to the particular month pursuant to Section 7 hereof. Such bills will be rendered in such detail as the Purchaser may reasonably request and may be rendered on an estimated basis subject to corrective adjustments in subsequent billing periods. All bills shall be due and payable when rendered and any amount remaining unpaid 10 days following the date of issuance of bills should bear interest at an annual rate equal to 2% in excess of the current prime rate then in effect at The First National Bank of Boston, from the due date to the date payment is received by Vermont Yankee.
9. Decommissioning Fund
Vermont Yankee agrees to cause an appropriate decommissioning reserve to be maintained in accordance with applicable regulatory requirements. As of the date hereof, FERC has required an independent trust or other separate fund to be created which has the necessary powers to hold and invest all funds collected for the decommissioning of the Unit and to disburse the same to pay, or to reimburse Vermont Yankee for, such costs when actually incurred for decommissioning of the Unit or removal of the Unit from service. If during the term of such trust or fund federal or state legislation or regulations are promulgated which so permit or require, or an alternative entity is created for funding decommissioning of the Unit, such trust has the authority, with the concurrence of Vermont Yankee, to transfer its trust estate to such newly authorized entity for the purpose of providing for the decommissioning of the Unit or removal of the Unit from service.
Vermont Yankee agrees to credit to, or cause to be credited to, the appropriate decommissioning reserve all funds collected hereunder for the express purpose of decommissioning the Unit or removing the Unit from service and further agrees that, after the tax consequence of decommissioning collections have been resolved, any funds collected hereunder to meet Decommissioning Tax Liability which are not used for that purpose will be refunded to Purchaser.
10. Cancellation of Contract
If deliveries cannot be made to the Purchaser because either
(i) the Unit is damaged to the extent of being completely or substantially completely destroyed, or
(ii) the Unit is taken by exercise of the right of eminent domain or a similar right or power, or
(iii) (a) the Unit cannot be used because of contamination, or because a necessary license or other necessary public authorization cannot be obtained or is revoked, or because the utilization of such a license or authorization is made subject to specified conditions which are not met, and (b) the situation cannot be rectified to an extent which will permit Vermont Yankee to make deliveries to the Purchaser from the Unit;
then and in any such case, the Purchaser may cancel the provisions of this
contract, except that in all cases other than those described in clause
(ii) above, the provisions relating to the payment of Total Decommissioning
Costs and of costs of permanent storage or disposal of spent nuclear fuel
shall, whether or not the Unit is operated or operable and notwithstanding
any earlier termination of the service life of the Unit, remain in full
force and effect until the expiration of the term hereof, it being
recognized that such costs represent deferred payments in connection with
power theretofore delivered by Vermont Yankee hereunder. Such cancellation
shall be effected by written notice given by the Purchaser to Vermont
Yankee. In the event of such cancellation, all continuing obligations of
the parties hereunder as to subsequently incurred costs of Vermont Yankee
other than the obligations relating to the payment and application of Total
Decommissioning Costs and of costs of permanent storage or disposal of
spent nuclear fuel to the extent excluded from such cancellation by the
second preceding sentence, but including the Purchaser's obligations to
continue payments pursuant to clause (a) (other than those related to the
costs of permanent storage or disposal of spent nuclear fuel, and clauses
(c) and (d) of the first paragraph of Section 7 hereof, shall cease
forthwith. Notwithstanding the foregoing, the applicable provisions of
this contract shall continue in effect after the cancellation hereof to the
extent necessary to permit final billings and adjustments hereunder with
respect to obligations incurred through the date of cancellation and the
collection thereof. Any dispute as to the Purchaser's right to cancel this
contract pursuant to the foregoing provisions shall be referred to
arbitration in accordance with the provisions of Section 13.
Notwithstanding anything in this contract elsewhere contained, the Purchaser may cancel this contract or be relieved of its obligations to make payments hereunder only as provided in the next preceding paragraph of this Section 10. Further, if for reasons beyond Vermont Yankee's reasonable control, deliveries are not made as contemplated by this contract, Vermont Yankee shall have no liability to the Purchaser on account of such non-delivery.
11. Insurance
Vermont Yankee presently has in effect, and hereafter will at all times maintain until the expiration of the term hereof, insurance to cover its "public liability" for personal injury and property damage resulting from a "nuclear incident" (as those terms are defined in the Act), with limits not less than Vermont Yankee may be required to maintain to qualify for governmental indemnity under the Act and shall execute and maintain an indemnification agreement with the NRC as provided by the Act. Vermont Yankee will also at all times maintain such other types of liability insurance, including workmen's compensation insurance, in such amounts, as is customary in the case of other similar electric utility companies, or as may be required by law.
Vermont Yankee will at all times keep insured such portions of the Unit (other than the fuel assemblies and components, including nuclear materials) as are of a character usually insured by electric utility companies similarly situated and operating like properties, against the risk of a "nuclear incident" and such other risks as electric utility companies, similarly situated and operating like properties, usually insure against; such insurance shall to the extent available, be carried in amounts sufficient to prevent Vermont Yankee from becoming a co-insurer. Vermont Yankee will at all times keep its fuel assemblies and components (including nuclear materials) insured against such risks and in such amounts as shall, in the opinion of Vermont Yankee, provide adequate protection.
12. Audit
Vermont Yankee's books and records (including metering records) shall be open to reasonable inspection and audit by the Purchaser.
13. Arbitration
In case any dispute shall arise as to the interpretation or performance of this contract which cannot be settled by mutual agreement, such dispute shall be submitted to arbitration. The parties shall if possible agree upon a single arbitrator. In case of failure to agree upon an arbitrator within 15 days after the delivery by either party to the other of a written notice requesting arbitration, either party may request the American Arbitration Association to appoint the arbitrator. The arbitrator, after opportunity for each of the parties to be heard, shall consider and decide the dispute and notify the parties in writing of his decision. Such decision shall be binding upon the parties, and the expenses of the arbitration shall be borne equally by them.
14. Regulation
This contract, and all rights, obligations and performance of the parties hereunder, are subject to all applicable state and federal law and to all duly promulgated orders and other duly authorized action of governmental authority having jurisdiction in the premises.
15. Assignment
This contract shall be binding upon and shall inure to the benefit of, and may be performed by, the successors and assigns of the parties, except that not assignment, pledge or other transfer of this contract by either party shall operate to release the assignor, pledgor or transferor from any of its obligations under this contract unless consent to the release is given in writing by the other party, or, if the other party has theretofore assigned, pledged or otherwise transferred its interest in this contract, by the other party's assigned, pledged or otherwise transferred its interest in this contract, by the other party's assignee, pledgee or transferee, or unless such transfer is incident to a merger or consolidation with, or transfer of all or substantially all of the assets of the transfer of all or substantially all of the assets of the transferor to, another sponsor which shall, as a part of such succession, assume all the obligations of the transferor under this contract.
16. Right of Setoff
The Purchaser shall not be entitled to set off against the payments required to be made by it under this contract (i) any amounts owed to it by Vermont Yankee or (ii) the amount of any claim by its against Vermont Yankee. However, the foregoing shall not affect in any other way the Purchaser's right and remedies with respect to any such claim by it against Vermont Yankee.
17. Amendments
Upon authorization by Vermont Yankee's board of directors of uniform amendments to all the Additional Power Contracts with sponsors, Vermont Yankee shall have the right to amend the provisions of Section 7 hereof by serving an appropriate statement of such amendment upon the Purchaser and filing the same with FERC (or such other regulatory agency as may have jurisdiction in the premises) in accordance with the provisions of applicable laws and any rules and regulations thereunder, and the amendment shall thereupon become effective on the date specified therein, subject to any suspension order issued by such agency. All other amendments to this contract shall be by mutual agreement, evidenced by a written amendment signed by the parties hereto.
18. Interpretation
The interpretation and performance of this contract shall be in accordance with and controlled by the law of the State of Vermont.
19. Addresses
Except as the parties may otherwise agree, any notice, request, bill
or other communication from one party to the other, relating to this
contract, or the rights, obligations or performance of the parties
hereunder, shall be in writing and shall be effective upon delivery to the
other party. Any such communication shall be considered as duly delivered
when delivered in person or mailed by registered or certified mail, postage
prepaid, to the respective post office address of the other party shown
following the signatures of such other party hereto, or such other address
as may be designated by written notice given as provided in this
Section 19.
20. Corporate Obligations
This contract is the corporate act and obligation of the parties hereto, and any claim hereunder against any stockholder, director or officer of either party, as such, is expressly waived.
21. All Prior Agreements Superseded
This contract represents the entire agreement between the parties relating to the subject matter hereof during the operative term hereof (i.e., post-December 1, 2002), and all previous agreements, discussions, communications and correspondence with respect to the subject matter are hereby superseded and are of no further force and effect.
IN WITNESS WHEREOF, the parties have executed this contract by their respective officers thereunto duly authorized as of the date first above written.
VERMONT YANKEE NUCLEAR POWER CORPORATION
By
President
R.D. 5, Ferry Road, Box 169
Brattleboro, Vermont 05301
PURCHASER
By
Exhibit 10.11.2
VERMONT YANKEE NUCLEAR POWER CORPORATION
FORM OF
AMENDMENT NO. 2
TO
CAPITAL FUNDS AGREEMENT
AMENDMENT NO. 2, dated as of September 1, 1993, between VERMONT YANKEE NUCLEAR POWER CORPORATION ("Vermont Yankee"), a Vermont corporation, and the "Sponsor"), a corporation, to the Capital Funds Agreement dated as of February 1, 1968, as heretofore amended (the "Capital Funds Agreement"), between Vermont Yankee and the Sponsor.
Whereas, Vermont Yankee and its sponsoring utilities desire to extend the term of their Capital Funds Agreements in order to facilitate Vermont Yankee's financings and prevent the acceleration of some of Vermont Yankee's outstanding First Mortgage Bonds.
Now, therefore, in consideration of the premises and other good and valuable consideration, receipt of which is hereby acknowledged, Vermont Yankee and the Sponsor hereby agree Section 2 of the Capital Funds Agreement is hereby amended by striking the date "December 31, 2002" and inserting in lieu thereof the date "March 21, 2012".
The parties hereto further agree that this Amendment No 2. shall become effective upon receipt by the Sponsor of notice that Vermont Yankee has entered into a similar amendment with each of its other sponsoring utilities.
IN WITNESS WHEREOF, the parties have executed this amendment by their respective officers thereunto duly authorized as of the date first above written.
VERMONT YANKEE NUCLEAR POWER CORPORATION
By_____________________________________
SPONSOR
By______________________________________
Exhibit 10.17.11
(Conformed Copy)
FOURTEENTH AMENDMENT TO AGREEMENT FOR JOINT OWNERSHIP,
CONSTRUCTION AND OPERATION OF NEW HAMPSHIRE NUCLEAR UNITS
This Fourteenth Amendment to Agreement For Joint Ownership, Construction and Operation of New Hampshire Nuclear Units (the Fourteenth Amendment), made as of the 1st day of June, 1982, by and among Public Service Company of New Hampshire, The United Illuminating Company, Bangor Hydro-Electric Company, Central Maine Power Company, Central Vermont Public Service Corporation, Commonwealth Electric Company (formerly New Bedford Gas and Edison Light Company), The Connecticut Light and Power Company, Fitchburg Gas and Electric Light Company, Hudson Light and Power Department, Maine Public Service Company, Massachusetts Municipal Wholesale Electric Company, Montaup Electric Company, New England Power Company, New Hampshire Electric Cooperative, Inc., Taunton Municipal Lighting Plant and Vermont Electric Cooperative, Inc. (the Participants).
WITNESSETH THAT:
WHEREAS, the Participants are parties to the Agreement for Joint Ownership, Construction and Operation of New Hampshire Nuclear Units made as of May 1, 1973, as heretofore amended by the amendatory agreements dated May 24, 1974, June 21, 1974, September 25, 1974, October 25, 1974, January 31, 1975, April 18, 1979, April 25, 1979, June 8, 1979, October 11, 1979, December 15, 1979, June 16, 1980 and December 31, 1980 (collectively the Agreement); and
WHEREAS, the Participants desire to effect, in accordance with (paragraph 29 of the Agreement, the amendments to the Agreement hereinafter set forth:
NOW, THEREFORE, the Participants agree as follows:
1. Amendment to Paragraph 23 - Rights re Transfer of Ownership Shares
Paragraph 23 of the Agreement is hereby amended by adding after paragraph 23.1 the following paragraph:
"23.2. Notwithstanding the provisions of paragraph 23.1 but subject to the provisions of paragraph 32.5, any Participant may sell all or any portion of its Ownership Share in particular nuclear fuel provided that such Participant makes arrangements to lease the fuel share so sold, that the terms of such sale and lease arrangements do not adversely affect the rights and interests of the other Participants in such particular nuclear fuel and in its use and financing in accordance with this Agreement, and that such terms are satisfactory to PSNH."
2. Amendment to Paragraph 32 - Miscellaneous
Paragraph 32.5 is hereby amended by striking out "paragraph 23" and substituting therefor "paragraph 23.1".
3. Execution in Counterparts.
Any number of counterparts of this Fourteenth Amendment may be executed and each shall have the same force and effect as an original and as if all the parties to all of the counterparts had signed the same instrument.
4. Effective Date of this Fourteenth Amendment.
When counterparts hereof have been executed by Participants having Ownership Shares aggregating at least 80%, this Fourteenth Amendment shall become effective in accordance with Paragraph 29 of the Agreement.
IN WITNESS WHEREOF, each of the undersigned has caused this Fourteenth Amendment to be signed by an authorized officer and its respective seal to be affixed hereto on the date indicated but as of the date first above written.
Witness: PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
s/ Florence B. Chase Bys/ W. C. Tallman (Seal)
Its Chairman
Date June 3, 1982
|
State of New Hampshire
County of Hillsborough
The foregoing instrument was acknowledged before me this 3rd day of June, 1982, by W. C. Tallman, Chairman, of Public Service Company of New Hampshire, a New Hampshire corporation, on behalf of the corporation.
s/ F. J. Coolbroth(Seal) Notary Public My Commission expires October 14, 1986 |
Witness: THE UNITED ILLUMINATING COMPANY
s/ Carlotta S. Shea Bys/ Leon A. Morgan (Seal)
Its Executive Vice President
|
Date June 9, 1982
State of Connecticut
County of New Haven
The foregoing instrument was acknowledged before me this 9th day of June, 1982, by Leon A. Morgan, Executive Vice President, of The United Illuminating Company, a Connecticut corporation, on behalf of the corpora- tion.
s/ Richard F. Skinner(Seal) Richard F. Skinner |
Notary Public
My commission expires April 1, 1985
Witness: BANGOR HYDRO-ELECTRIC COMPANY
s/ Robert S. Briggs
Bys/ T. A. Greenquist (Seal)
|
Its President
DateJune 8, 1982
State of Maine
County of Penobscot
The foregoing instrument was acknowledged before me this 8th day of
June, 1982, by T. A. Greenquist, President, of Bangor Hydro-Electric
Company, a Maine corporation, on behalf of the corporation.
s/ Robert S. Briggs(Seal) |
Witness: CENTRAL MAINE POWER COMPANY
s/ Judith Sargent Bys/ E. W. Thurlow (Seal)
Its President
|
DateJune 7, 1982
State of Maine
County of Kennebec
The foregoing instrument was acknowledged before me this 7th day of June, 1982, by E. W. Thurlow, President, of Central Maine Power Company, a Maine corporation, on behalf of the corporation.
s/ William M. Finn(Seal) Notary Public |
My commission expires September 16, 1984
Witness: CENTRAL VERMONT PUBLIC SERVICE CORPORATION
s/ Beverly H. Merrett Bys/ James E. Griffin (Seal)
Its President
|
DateJune 10, 1982
State of Vermont
County of Rutland
The foregoing instrument was acknowledged before me this 10th day of June, 1982, by James E. Griffin, President, of Central Vermont Public Service Corporation, a Vermont corporation, on behalf of the corporation.
s/ Olga G. Laird(Seal)
Notary Public
Witness: COMMONWEALTH ELECTRIC COMPANY
(Formerly New Bedford Gas and Edison Light Company)
CANAL ELECTRIC COMPANY
s/ M. P. Sullivan Bys/ E. G. Cheney (Seal)
Its Financial Vice President
DateJune 10, 1982
Commonwealth of Massachusetts
County of Middlesex
|
The foregoing instrument was acknowledged before me this 10th day of June, 1982, by E. G. Cheney, Financial Vice President, of Commonwealth Electric Company, Canal Electric Company, a Massachusetts corporation, on behalf of the corporation.
s/ Michael P. Sullivan(Seal) Notary Public |
Witness: THE CONNECTICUT LIGHT AND POWER COMPANY
s/ Walter F. Torrance, Jr. By s/ W. T. Schultheis (Seal)
Its Vice President
|
DateJune 10, 1982
State of Connecticut
County of Hartford
The foregoing instrument was acknowledged before me this 10th day of June, 1982, by Walter T. Schultheis, Vice President, of The Connecticut Light and Power Company, a Connecticut corporation, on behalf of the corporation.
s/ Janet E. Spencer(Seal) Janet E. Spencer |
Notary Public
My commission expires 3/31/85
Witness: FITCHBURG GAS AND ELECTRIC LIGHT COMPANY
s/ Bruce R. Garlick Bys/ Howard W. Evirs, Jr.(Seal)
Its President
|
DateJune 17, 1982
Commonwealth of Massachusetts
County of Worcester
The foregoing instrument was acknowledged before me this 17th day of June, 1982, by Howard W. Evirs, Jr., President, of Fitchburg Gas and Electric Light Company, a Massachusetts corporation, on behalf of the corporation.
s/ John A. Haven(Seal) My commission expires April 2, 1987 |
Witness: HUDSON LIGHT AND POWER DEPARTMENT
s/ Mary Ann Kenyon Bys/ Horst Huehmer (Seal)
Its Manager
|
Date7/16/82
Commonwealth of Massachusetts
County of Middlesex
The foregoing instrument was acknowledged before me this 16th day of July, 1982, by Horst Huehmer, Manager, of Hudson Light and Power Department, an agency of a Massachusetts municipal corporation, on behalf of the corporation.
s/ George E. Thompson(Seal)
Witness: MAINE PUBLIC SERVICE COMPANY
s/ Glenna M. Briggs Bys/ R. A. Brown (Seal)
Its President
|
DateJune 10, 1982
State of Maine
County of Aroostook
The foregoing instrument was acknowledged before me this 10th day of June, 1982, by Ralph A. Brown, President, of Maine Public Service Company, a Maine corporation, on behalf of the corporation.
s/ Linda M. Swett(Seal)
My Commission Expires July 10, 1988
Witness: MASSACHUSETTS MUNICIPAL WHOLESALE ELECTRIC COMPANY
s/ Laurie Thompson Bys/ Phillip C. Otness(Seal)
Its General Manager and Secretary
|
DateDecember 9, 1982
Commonwealth of Massachusetts
County of Hampden
The foregoing instrument was acknowledged before me this 9th day of December, 1982, by Phillip C. Otness, General Manager and Secretary, of Massachusetts Municipal Wholesale Electric Company, a Massachusetts corporation, on behalf of the corporation.
s/ Armand J. Goulet(Seal) Notary Public |
My Commission expires 3/3/89
Witness: MONTAUP ELECTRIC COMPANY
s/ Donald G. Parker Bys/ John F. G. Eichorn(Seal)
Its President
|
DateJune 8, 1982
Commonwealth of Massachusetts
County of Suffolk
The foregoing instrument was acknowledged before me this 8th day of June, 1982, by John F. G. Eichorn, Jr., President, of Montaup Electric Company, a Massachusetts corporation, on behalf of the corporation.
s/ William F. O'Connor(Seal) Notary Public |
My Commission Expires: May 18, 1984
Witness: NEW ENGLAND POWER COMPANY
By(Seal)
Its
Date
Commonwealth of Massachusetts
County of Worcester
The foregoing instrument was acknowledged before me this day
of June, 1982, by
, of New England Power Company, a Massachusetts corporation, on behalf of
the corporation.
(Seal)
Witness: NEW HAMPSHIRE ELECTRIC COOPERATIVE, INC.
s/ William A. Bardely Bys/ James J. Page (Seal)
Its President
|
Date2/25/83
State of New Hampshire
County of Grafton
The foregoing instrument was acknowledged before me this 25th day of February, 1983, by James Page, of New Hampshire Electric Cooperative, Inc., a New Hampshire corporation, on behalf of the corporation.
s/ Maurice H. Muzzey(Seal)
My Commission Expires 12/13/87
Witness: TAUNTON MUNICIPAL LIGHTING PLANT
s/ W. F. O'Connor Bys/ Joseph M. Blain(Seal)
Its General Manager
|
Date6/17/82
Commonwealth of Massachusetts
County of Bristol
The foregoing instrument was acknowledged before me this 25th day of June, 1982, by Joseph M. Blain, of Taunton Municipal Lighting Plant, an agency of a Massachusetts municipal corporation, on behalf of the corporation.
s/ Patricia S. Adams(Seal)
My commission expires 11/26/82
Witness: VERMONT ELECTRIC COOPERATIVE, INC.
s/ Nora H. Winckler Bys/ William J. Gallagher(Seal)
Its Vice-President and Executive Manager
DateJune 14, 1982
State of Vermont
County of Lamoile
|
The foregoing instrument was acknowledged before me this 14th day of June, 1982, by William J. Gallagher, Vice-President and Executive Manager, of Vermont Electric Cooperative, Inc., a Vermont corporation, on behalf of the corporation.
s/ Nora H. Winckler(Seal) |
Exhibit 10.18.2
FORM OF
COMPOSITE OF AGREEMENT FOR SEABROOK
PROJECT DISBURSING AGENT THROUGH
SECOND AMENDMENT TO RESTATED AGREEMENT
This Agreement for Seabrook Project Disbursing Agent, dated as of May 23, 1984 ("Disbursing Agent Agreement" or "Agreement"), as heretofore amended and herein restated to include all nine amendments, by and among Public Service Company of New Hampshire, The United Illuminating Company, Canal Electric Company (successor in interest to New Bedford and Edison Light Company), The Connecticut Light and Power Company, EUA Power Corporation, Massachusetts Municipal Wholesale Electric Company, Montaup Electric Company, New England Power Company, New Hampshire Electric Cooperative, Inc., Taunton Municipal Lighting Plant, Hudson Light & Power Department and Vermont Electric Generation and Transmission Cooperative, Inc. (collectively, the "Participants") and North Atlantic Energy Service Corporation ("NAESCO" or "Disbursing Agent").
WITNESSETH THAT:
This Agreement is made pursuant to the provisions of Paragraph 35 of the John Ownership Agreement to establish the powers, duties, responsibilities, terms of employment and compensation of, and other matters respecting, the Disbursing Agent appointed to receive, hold and disburse payments due from Participants in the Seabrook Project.
1. Appointment of NAESCO as Disbursing Agent under the Joint Ownership Agreement.
1.1 Appointment. The Participants hereby appoint NAESCO to act as their Disbursing Agent under the terms of the Joint Ownership Agreement as now in effect and as it may from time to time be amended or modified in the future, and NAESCO hereby accepts this appointment. The scope of the agency is as set forth in this Agreement.
1.2 Powers, etc. NAESCO's powers, duties, and responsibilities under this Agreement shall be limited to activities reasonably incident to collection and disbursal of Participants' payments for their respective shares of costs of the Seabrook Project, as is more fully set out below in Paragraph 1.5 and Paragraph 2.
1.3 Agency. For purposes of this Agreement, the Participants agree that NAESCO shall act as agent for each of the Participants individually (and not jointly or jointly and severally). With respect to certain other agreements, the following provisions shall apply:
(1) In the event of any conflict between the provisions of this Agreement and the Managing Agent Operating Agreement, the provisions of this Agreement shall prevail.
(2) The parties to this Agreement on April 27, 1984, entered into an agreement entitled "Interim Agreement to Preserve and Protect the Assets of and Investment in the New Hampshire Nuclear Units" ("Interim Agreement"). This Agreement does not supersede the Interim Agreement, and any bills or invoices paid pursuant to that agreement shall not be paid or deemed paid pursuant to this Agreement.
(3) In the event of any conflict between the provisions of this Agreement and the provisions of the Joint Ownership Agreement, the provisions of the Joint Ownership Agreement shall prevail.
1.4 Escrowed Funds. Notwithstanding anything the contrary contained elsewhere in this Agreement, all monies paid to NAESCO under this Agreement, including without limitation, vendor credits received under Paragraph 2.6 and gains from investment or interest under Paragraph 2.3 shall not be the property of the Participants but shall be held at all times in escrow by NAESCO in the accounts established under Paragraph 2.3 hereof to be disbursed by NAESCO pursuant to the provisions hereof. Upon termination of this Agreement, the Executive Committee will determine whether the moneys held by the Disbursing Agent exceed future Project Costs and any necessary reserves and, if so, will issue instructions to the Disbursing Agent for the distribution of such surplus consistent with the intent and purpose of this Agreement.
1.5 Disbursements. Except as otherwise specifically set out herein, NAESCO shall disburse monies received from and credited to each Participant only to pay that Participant's pro rata share, as defined in Paragraph 5.1 below, of Project Costs as defined in Paragraph 1.6. Monies received by NAESCO from, or credited to, PSNH pursuant to Paragraphs 23.10 or 23.11 of the Joint Ownership Agreement may be applied only to pay MMWEC's pro rata share of Project Costs as defined in the Joint Ownership Agreement.
1.6 Definitions. As used in this Agreement, the following terms shall have the following meanings:
Costs of Completion means and includes all Project Costs that are subject to contractual commitment to be paid by or incurred by the Participants to complete construction of Unit 1 of the Seabrook Project, including, without limitation, costs resulting from suspension and restarting after suspension (if any) of the construction of Unit 1. Without limiting the generality of the foregoing, Costs of Completion shall include the cost of the initial nuclear fuel load for Unit 1 of the Seabrook Project.
Project Costs means and includes those costs described in Paragraph 1.5 above and in Paragraphs 11 and 13 and the Operating Deposit described in 37.3(d)(i) of the Joint Ownership Agreement, including costs of the design, construction, operation, maintenance, renovation and termination or decommissioning (if any) of, and fuel for, Unit 1 of the Seabrook Project, and with respect to the preservation, protection and termination of Unit 2 of the Seabrook Project. Costs incurred for one or more Participants' individual accounts are not Project Costs but may be billed to such Participant or Participants by NAESCO directly.
Project Manager means North Atlantic Energy Service Corporation unless and until a successor has received all necessary licenses and authorizations to replace North Atlantic Energy Service Corporation and has replaced North Atlantic Energy Service Corporation as Project Manager of the Seabrook Project.
2. Billings, Deposits, Investments and Payments.
2.1 The Execution Committee. The Executive Committee established pursuant to Paragraph 37 of the Joint Ownership Agreement (the "Executive Committee"), or its successor, shall oversee the functions of the Disbursing Agent. The Participants authorize the Executive Committee or any designee of such Executive Committee (i) to perform the functions assigned to it in this Agreement, and (ii) to provide direction to NAESCO in the fulfillment of NAESCO's responsibilities under this Agreement. NAESCO agrees that it will operate under the direction of the Executive Committee or its designee.
2.2(a) Routine Monthly Billing. Not later than the 15th day of each month, or the first business day thereafter, the Disbursing Agent shall, subject to the provisions of Paragraph 37.3(f) of the Joint Ownership Agreement, bill ("routine monthly billing") each Participant for its pro rata Ownership Share of the estimated Project Costs for the subsequent month under the approved then current six-months' budget, as established pursuant to Paragraphs 37.3(a), 37.3(b), and 37.3(c) of the Joint Ownership Agreement. Each invoice shall be due and payable on the first business day of the next following month. Any amount not paid on such date shall bear interest from said date until the date of payment at the rate provided in the Joint Ownership Agreement. In the event that one or more Participants have not paid their routine monthly billing by the due date, the Disbursing Agent shall notify the Executive Committee of such fact and the details thereof and obtain specific direction from the Executive Committee. Succeeding routine monthly billings shall set forth a reconciliation for the previous month between the estimated Project Costs previously billed, including any interim payments billed pursuant to Paragraph 2.2(c) below, and the actual Project Costs incurred. Such billings also shall set forth a credit or debit to the then current routine monthly billed amount to reflect such reconciliation and interest due for late payment or other adjustments such as vendor credits and interest. The routine monthly billings shall show as debits or credits the amounts necessary to restore the Operating Deposit (as defined in Paragraph 37.3(d)(i) of the Joint Ownership Agreement) to the target amount set from time to time as provided in the Joint Ownership Agreement, and such amounts shall be funded by the Participants as provided in Paragraph 37.3(d)(i) and (d)(ii) of the Joint Ownership Agreement. The Disbursing Agent shall not include in a routine monthly billing for Project Costs a bill for funds for a major expenditure unless such expense is to be paid by the Disbursing Agent during the month for which the routine monthly billing is made. Unless otherwise directed by the Executive Committee or provided by the Joint Ownership Agreement, any net interest paid by any Participant with respect to its overdue payment for any month's bill shall be credited by the Disbursing Agent, pro rata determined by Ownership Share, to those Participants which made timely payment of their bills for each such month.
2.2(b) Operating Deposit. After Commercial Operation of Unit No. 1, the Disbursing Agent shall bill each Participant for its pro rata share of the target amount of the Operating Deposit as provided in Paragraph 37.3(d)(i) and (ii) of the Joint Ownership Agreement. Such billing shall be included in the routine monthly billing made by the Disbursing Agent under Paragraph 2.2(a) above. The Operating Deposit shall be held by the Disbursing Agent with the routine monthly billing payments to provide sufficient working capital for the Project, in escrow as provided in Paragraphs 1.4 and 2.13 of this Agreement and in Paragraph 37.3(h) of the Joint Ownership Agreement, solely for the benefit of creditors of the Project, to be disbursed solely to pay each Participant's Ownership Share of Project Costs, and at no time shall any of such funds be the property of the Disbursing Agent.
2.2(d) Interim Billing. Subject to the prior approval of the
Executive Committee, the Disbursing Agent may, when and to the extent
authorized by Paragraph 37.3(g) of the Joint Ownership Agreement, obtain an
interim payment from each Participant by means of an interim billing to all
Participants, for payment of unanticipated expenditures which, in the
absence of such interim payment, would result in the reduction at the end
of the month of the sum of (i) the balance of the Operating Deposit and
(ii) the amounts of funds then remaining from the routing monthly billings
to the minimum required amount set forth in Paragraph 37.3(g) of the Joint
Ownership Agreement, or less. To the extent that any interim billing would
result in estimated Project Costs exceeding the then current six-months'
budget, such interim billing shall require approval, in advance, as
provided in Paragraph 37.3(c)(i) and (ii) of the Joint Ownership Agreement.
Upon receipt of the aforesaid required approvals, the Disbursing Agent
shall without delay bill each Participant for its pro rata Ownership Share
of the interim billing which shall be the amount necessary to restore said
minimum required balance. Each interim billing shall be due and payable
ten business days after issuance by the Disbursing Agent and any amount not
paid by such date shall bear interest from said due date until the date of
payment at the rate provided in the Joint Ownership Agreement. Each
interim billing shall be accompanied by a letter from the Project Manager
or the Managing Agent confirming the amount required and the reason for the
request.
2.3(a) Deposit of Funds. The Disbursing Agent shall establish one or more bank accounts ("bank account(s)") at one or more banks or trust companies organized under the laws of the United States or one of the states with a combined capital and surplus of at least $10,000,000, which is subject to supervision or examination by federal or state authority and is not a creditor of any Participant. The Executive Committee shall have the right to approve the selection of, and direct the Disbursing Agent to change banks if the Executive Committee determines such to be in the best interests of the Project. The monies deposited and held in all bank accounts shall at all times be subject to the provisions of Paragraphs 1.4 and 2.13 of this Agreement and Paragraph 37.3(h) of the Joint Ownership Agreement, and each bank account shall be denominated to show that it is an escrow account.
2.3(b) Investment of Monies. To the extent that monies held in bank accounts are not immediately required to pay Project Costs pursuant to Paragraph 2.5 of this Agreement, the Disbursing Agent shall to the maximum extent practicable invest such monies in one or more investment pool accounts ("investment pool accounts") which have been selected by the Disbursing Agent pursuant to investment guidelines developed and modified from time to time by the Disbursing Agent, all with the approval of the Executive Committee. Annually, a Participant shall inform the Disbursing Agent of the particular investment pool account it prefers. The monies deposited and held in all investment pool accounts and all earnings and gains thereon shall at all times be subject to the provisions of Paragraphs 1.4 and 2.13 of this Agreement and Paragraph 37.3(h) of the Joint Ownership Agreement, and each investment pool account shall be denominated to show that it is an escrow account. The Disbursing Agent shall maintain records which show the earnings and gains of each investment pool account and the credits from such earnings and gains which are attributable to each Participant. Such credits shall be entered into the escrow account maintained by the Disbursing Agent in the name of such Participant. Each Participant shall directly pay such taxes on such gains and earnings on investment pool accounts as may be attributable to it.
2.3(c) Executive Committee Satisfaction. The procedures for selecting, establishing, maintaining and changing bank accounts and investment pool accounts, and the receipt, holding, investment and disbursement of all monies and credits, shall at all times be satisfactory to the Executive Committee.
2.4 Daily Payment Certificates. On a daily basis, the Project Manager shall present a certificate to NAESCO signed by an officer or authorized agent of the Project Manager, certifying:
(i) the total amount of payments to be made for bills, invoices and requests for payment covering Project Costs; and\
(ii) that such expenditures have been authorized as provided in Paragraph 37 of the Joint Ownership Agreement. Such certificate, when accompanied by an invoice approved by the Project Manager, an audited voucher and a check (if required by NAESCO) for each payment being made, shall be presented to NAESCO for NAESCO's review and payment.
2.5 Project Costs Payments. NAESCO shall withdraw and disburse monies from the appropriate bank accounts to pay each Participant's pro rata share of Project Costs, but NAESCO shall pay only those Project bills that have been duly certified as provided in Paragraph 2.4 above. Before making payment, NAESCO shall review all Project bills submitted for payment to ensure compliance with these requirements. After following these procedures, NAESCO shall pay such approved Project bills, in whole or in part, directly to the vendors, as provided in Paragraph 1.5 of this Agreement. In the event of, and as a condition to, a partial payment, NAESCO shall obtain from the payee a release or waiver, in a form approved by the Executive Committee, of liability, of each Participant that has contributed its pro rata share of such payment (including a waiver of liens on Seabrook Project real or personal property), unless the Executive Committee otherwise directs in each specific case.
2.6 Vendor Credits. The Project Manager will deliver to NAESCO, without delay, any and all monies derived from vendor credits, chargebacks and other reimbursements ("vendor credits") that it receives on the Seabrook Project. The Project Manager will notify all vendors to deliver all such vendor credits on the Seabrook Project to, and to make such vendor credits payable to, NAESCO as Disbursing Agent for the Participants. Checks or other instruments representing such vendor credits, if payable to the Project Manager, shall be properly endorsed by the Project Manager or its agent to be payable to the order of NAESCO as Disbursing Agent. Upon receipt of such vendor credits, NAESCO shall promptly deposit the same into the appropriate bank account and credit each Participant, pro rata according to its respective Ownership Share at the time the expense was billed to the Participants, except that if any Participant did not pay its pro rata share of such expense, such Participant shall not be entitled to such credit. NAESCO shall disburse all such vendor credits solely to pay Project Costs. If any Participant has a surplus of such vendor credits over its pro rata share of disbursements for Project Costs, NAESCO shall retain such surplus and shall disburse it, in accordance with Paragraph 2.5 above, to pay such Participant's pro rata share of Project Costs in subsequent months.
2.7 MMWEC Credits. Notwithstanding any other provision of this Agreement to the contrary, credits, refunds, recoveries, and damages (collectively "Credits") to which MMWEC would be entitled but which arise on account of payments made by NAESCO from funds provided by other Participants on or after July 28, 1988 (including payments made from funds deposited with NAESCO before July 28, 1988) of MMWEC's pro rata share of Seabrook Project Requirement Estimates, shall be applied by NAESCO to MMWEC's Supplementary Advance Payment Account in accordance with NAESCO's prior practice; provided, that if any Credit is in the amount of Twenty- Five Thousand Dollars ($25,000.00) or more, such Credit shall not be so applied by NAESCO, but NAESCO shall deposit the Credit into the main account of the Participant which made the payment to which the Credit relates; except that any such Credits related to MMWEC Supplementary Advance Payments made under Paragraph 23.10 or 23.11 of the Joint Ownership Agreement, which Credit is received while PSNH is obligated to make such payments, shall be deposited into the MMWEC Supplementary Advance Payment Account.
2.8 Executive Committee Instructions. NAESCO shall report to the Executive Committee or its designee (1) for overall direction in carrying out its function, (2) for specific approval of or direction with respect to payment of specific Project bills, if NAESCO believes that there is a question as to whether such Project bills have been duly certified or have been duly authorized under Paragraph 37 of the Joint Ownership Agreement and (3) for specific approval for payment of bills related to any program adopted to reconcile past unpaid bills. NAESCO shall also provide a monthly report to the Participants itemizing, in appropriate form and detail, and in any event in such form and detail as the Executive Committee may direct, all Seabrook Project disbursements, credits, expenses, investment and interest income and monies received from Participants.
2.9 Records. NAESCO shall maintain separate records of each
Participant's payments, credits applied on its behalf and disbursements
applied against its payments and credits. Each Participant shall have the
unrestricted right to all financial records relating to the Seabrook
Project within the control of the Disbursing Agent, and its affiliates,
wherever located, except for information which is a) protected by law,
b) restricted by contract with third parties, or c) deemed commercially
sensitive by an affiliate or affiliates of the Disbursing Agent. If
requested financial records are restricted by contract with third parties,
the Disbursing Agent, and its affiliates, will use their best efforts to
obtain the consent of third parties to disclose confidential financial
records to Participants, with the understanding that Participants may be
required to sign a nondisclosure agreement. For financial records which
are considered commercially sensitive to (an) affiliate(s) of the
Disbursing Agent, upon the request of one or more Participants, such
affiliate shall allow for their review by an independent third party,
selected by the parties involved (other than the Disbursing Agent and its
affiliates) and acceptable to the Disbursing Agent (provided that the
Disbursing Agent may not unreasonably withhold its acceptance) to
determine, using an informal, simplified procedure, whether the financial
records in question are commercially sensitive. In any event, if
reasonable under the circumstances, the Disbursing Agent may require a
Participant to sign a nondisclosure agreement covering financial records
that it considers commercially sensitive.
Review of financial records at the offices of the Disbursing Agent, or its affiliate companies, shall occur at reasonable times during normal business hours, and shall be arranged in advance among the involved parties. The Participants shall use reasonable efforts to avoid disrupting the business operations of the Disbursing Agent or its affiliates.
The Disbursing Agent shall coordinate and facilitate the dissemination of financial records between Seabrook Station and the Executive Committee and/or the Participants.
Subject to the limitations set forth elsewhere in this Section 2.9, any financial records relating to the project shall be provided to any Participant requesting them, with the understanding that the Participant may be required to pay for the cost of providing them in the circumstances described in Section 2.13.
Without limiting the generality of this Section 2.9, any Participant or the Executive Committee may request an audit of the accounts and records of the Disbursing Agent, at its offices, at reasonable times, by an independent certified accountant or other representative of the Participant requesting the audit; provided that, absent extraordinary circumstances, subject to the rights of the Participants under Section 18 (Arbitration) of the Managing Agent Operating Agreement, a full-scope audit shall not be performed at the request of the Executive Committee or one or more Participants not affiliated with the Disbursing Agent more frequently than once each year. If an audit is represented by the Executive Committee, the costs thereof shall be borne by all Participants in proportion to their Ownership Shares. If an audit is requested by one or more, but less than all, of the Participants, the costs thereof shall be borne by the Participant(s) making such request. If an audit is performed in connection with an arbitration proceeding, the costs of the audit shall be allocated among the Participants in accordance with the decision of the arbitrator.
2.10 Payments. All services rendered by the Disbursing Agent, or its affiliates, under this Agreement shall be at actual cost thereof, fairly and equitably allocated and calculated, all consistent with the requirements of the Act and the rules and regulations and orders thereunder. Direct charges will be made for services where a direct allocation of cost is possible. Charges not directly assignable shall be determined and allocated on a reasonable and equitable basis in accordance with the Act and as approved by the Executive Committee, which approval shall not be unreasonably withheld. The Disbursing Agent shall obtain Executive Committee approval, which approval shall not be unreasonably withheld, of the methodology utilized, as well as changes thereto, for allocating costs to Seabrook Station prior to the implementation of such methodology. Such allocation methods will be appropriately documented and available for review by the Participants upon request. Without limiting the generality of the foregoing, allocable costs include executive salaries and fringe benefits paid by the Disbursing Agent, the insurance expenses incurred by the Disbursing Agent and other general overhead expenses incurred by the Disbursing Agent. The Disbursing Agent shall keep complete and accurate accounts of all receipts and expenditures hereunder in accordance with the rules and regulations of the Securities and Exchange Commission and the Uniform System of Accounts prescribed for Public Utilities and Licensees, subject to the provisions of the Federal Power Act as amended from time to time (or such similar accounts as may hereafter become appropriate) (hereinafter the "Uniform System of Accounts").
2.11 Consultants. The Executive Committee is authorized to engage such consultants as it sees fit to assist it in carrying out its function under this Agreement and shall bill each Participant on a monthly basis for the cost thereof based upon each such Participant's pro rata Ownership Share of such costs. Each Participant will pay its pro rata share of such bills and shall only be liable for such pro rata share.
2.12 Reports. This Agreement shall not affect the obligations of the Project Manager to provide accounting reports to the other Participants pursuant to the Joint Ownership Agreement or the Managing Agent Operating Agreement.
2.13 Technical Assistance. Upon request, the Disbursing Agent shall assist the Participants in regulatory proceedings and other contested matters relative to the Plant, including the provision of witnesses and of current and accurate data on a timely basis.
Information, including witness support, that will require a substantial commitment of time or a substantial effort to assemble or develop, and is neither a) required by a substantial number of Participants, nor b) requested by the Executive Committee, shall be paid for by the Participant(s) requesting such information. The Disbursing Agent, in consultation with the Executive Committee, shall develop a reasonable standard by which it will determine how and when a Participant is to be charged for information requested.
2.14 NAESCO Covenant re Escrowed Funds. NAESCO agrees and stipulates that neither it nor any of its creditors shall have any interest in the bank accounts, the investment pool accounts, or in monies deposited therein or credits applied thereto, and that the bank accounts and investment pool accounts have been created and are being held in escrow solely for the vendors whose bills have been certified for payment pursuant to Paragraph 2.4 above, subject to the terms of, and to maintaining and disbursing funds in the bank accounts in accordance with, this Agreement.
2.15 PSNH/MMWEC Settlement. Notwithstanding any other provision of this Agreement to the contrary, on and after August 1, 1989, and in order to give effect thereto:
(a) MMWEC shall have no liability for payment or repayment to NAESCO of any amounts applied by NAESCO for MMWEC Project Costs from funds held by NAESCO for MMWEC's account since June 1, 1988 (including payment or refunding any of the prefunded amounts drawn down by MMWEC from June 1, 1988 through July 28, 1988);
(b) MMWEC shall have no liability to pay any interest or penalties with respect to the aforesaid application of funds by NAESCO or with respect to MMWEC's nonpayment of MMWEC Project Costs;
(c) PSNH shall not incur any additional obligations or liability as a result of making payments required under Paragraphs 1 and 6 of the Memorandum of Understanding of November 4, 1988 between PSNH and MMWEC, except for the additional liability that PSNH assumes with respect to the obligations of MMWEC under Paragraphs 23.10 and 23.11 of the Joint Ownership Agreement, as amended, and only to the extent specifically provided therein; and
(d) MMWEC shall not be liable for any payment which PSNH is to make under Paragraphs 23.10 and 23.11 of the Joint Ownership Agreement, as amended, whether or not PSNH makes such payment.
2.16 Further Amendment. The provisions of this Agreement not specifically amended by the Sixth Amendment, including without limitation the provisions of Section 5.1, shall be deemed to have been modified, without the necessity of further formal amendment, as may be necessary to given effect to the provisions of Paragraphs 23.10 and 23.11 of the Joint Ownership Agreement with respect to payments to be made by PSNH thereunder which MMWEC but for said Amendment would have been obligated to make.
2.17 No Setoff. The Participants' obligation to make payments to NAESCO hereunder is absolute and unconditional and a Participant shall not be entitled to set off against the payments required to be made hereunder any amounts owed to it by NAESCO or any affiliate of NAESCO or by any other Participant or the amount of any claim by it against NAESCO or any affiliate of NAESCO or any other Participant.
3. Removal or Resignation of NAESCO and Appointment of Successor
NAESCO may resign at any time by giving twenty-one (21) days' prior written notice thereof to each of the Participants. Such resignation shall become effective on the date specified in the notice, or upon the appointment of and acceptance by a successor, whichever is earlier. Upon agreement of Participants owning sixty-two percent (62%) or more of the Ownership Shares in the Seabrook Project, the Participants may at any time remove NAESCO without cause upon twenty-one (21) days' prior written notice to NAESCO, and with cause upon seven (7) days' prior written notice to NAESCO. Such removal shall become effective on the date specified in the notice. In the event of resignation or removal, NAESCO shall be entitled to compensation under Paragraph 2.10 of this Agreement until the effective date of such resignation or removal. In the event NAESCO resigns or is removed, the Participants shall use their best efforts to appoint a successor upon agreement of Participants owning sixty-two percent (62%) or more of the Participants' Ownership Shares in the Seabrook Project. Any successor agent shall execute an instrument accepting such appointment and shall thereupon become vested with and subject to all properties, rights, powers, and duties of NAESCO, as if originally named in the provisions hereof (including this Paragraph 3). NAESCO shall duly assign, transfer and deliver to the successor agent all records, property, and money held by it hereunder, provided that NAESCO may retain copies of such records.
4. Liability and Indemnification
4.1 NAESCO. NAESCO shall not be responsible for the genuineness of any signature and may rely conclusively upon, and shall be protected in acting upon, any certificate, notice, request, consent, statement or other instrument believed by it in good faith to be duly authorized and properly made. The duties and obligations of NAESCO hereunder shall be governed solely by the provisions of this Agreement and Joint Ownership Agreement. For and in consideration of the fact that NAESCO is undertaking responsibility under this Agreement for and on behalf of the Participants without any compensation or charge other than recovery of its costs for such service, no Participant shall be entitled to recover from NAESCO or the directors, trustees, officers, employees, agents or affiliates of NAESCO (or the directors, trustees, officers, employees or agents of such affiliates) (collectively, "Protected Parties") any damages resulting from performance or nonperformance of its respective responsibilities hereunder or under the Joint Ownership Agreement, or for any damage to the Seabrook Project, any curtailment of power, or any other damages of any kind, including direct, incidental, consequential, special, indirect or punitive damages occurring during the course of the design, engineering, procurement, installation, construction, operation, maintenance, refueling or decommissioning of the Seabrook Project or otherwise arising out of the performance or nonperformance of this Agreement, unless such damages shall have resulted directly from the willful misconduct of NAESCO, or, to the extent legally attributable to NAESCO, directly from the willful misconduct of a Protected Party. Notwithstanding the above, no Participant shall be entitled to recover any such damages if such damages result from NAESCO's or a Protected Party's actions or omissions that have been expressly approved by the Executive Committee or by the Participants. All goods and services provided to the Seabrook Project by a Protected Party shall be under a written contract having the same limitation of liability as above; provided, however, that the same limitation of liability shall also apply even if goods and services are provided without a written contract. The provisions of this Section 4.1 shall apply notwithstanding any provision of this Agreement to the contrary and shall survive the expiration or termination of this Agreement. NAESCO shall not have any duty to use its own funds in carrying out its responsibilities under this Agreement.
4.2 Executive Committee. Notwithstanding the provisions of
Section 4.1 of this Agreement, neither the Executive Committee nor any
member nor designee thereof, when acting in such capacity, nor any employer
of any member or designee, nor any affiliate, agent or employee of such
member, designee or employer, shall by virtue of its relationship to the
Executive Committee or any Executive Committee member or designee acting in
such capacity, be liable to any Party to this Agreement for claims for
direct, incidental, indirect, consequential or other damages of any nature,
including, but not limited to, damages for loss of anticipated profits,
loss of use of revenue, loss by reason of construction shutdown or
interruption, and cost of capital, connected with or resulting from the
performance of this Agreement by the Executive Committee or by any member
or designee thereof or by any employee of any member or designee or any
affiliate, agent or employee of such member, designee or employer, except
in the event of willful misconduct. In addition, the Participants,
severally (and not jointly or jointly and severally), in accordance with
their respective pro rata shares as specified in Paragraph 5.1, agree to
defend, indemnify and hold the Executive Committee, each member and
designee thereof and each of the other persons or entities referred to in
the preceding sentence, harmless against all losses, claims, expenses
(including reasonable counsel fees) and liabilities, not resulting from his
or their willful misconduct, which may be asserted, imposed, or incurred in
connection with the performance of his or its responsibilities hereunder,
including any litigation arising from the foregoing.
5. Miscellaneous
5.1 Liability of Participants. All obligations of the Participants hereunder are pro rata and several (not joint or joint and several) and, with respect to each Participant, limited to the proportion of such Participant's Ownership Share in the Seabrook Project to the total of all Ownership Shares in the Seabrook Project (called a "pro rata share" in the Agreement). As of the date of execution of this Agreement, the pro rata share of each Participant is as follows:
Public Service Company of New Hampshire 35.56942%
The United Illuminating Company 17.50000%
Canal Electric Company 3.52317%
The Connecticut Light and Power Company 4.05985%
Hudson Light and Power Department 0.07737%
Massachusetts Municipal Wholesale
Electric Co. 11.59340%
Montaup Electric Company 2.89989%
New England Power Company 9.95766%
New Hampshire Electric Cooperative 2.17391%
Taunton Municipal Lighting Plant 0.10034%
Vermont Electric Generation &
Transmission Cooperative, Inc. 0.41259%
EUA Power Corporation 12.13240%
100.00000%
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The Executive Committee shall notify NAESCO promptly of any changes in each Participant's pro rata share. Every document delivered to any third party by NAESCO pursuant to this Agreement which may bear on the nature of the Participants' obligations hereunder shall specify such several (and not joint or joint and several) nature of the Participants' obligations.
5.2 Unpaid Project Costs. Without limiting the generality of Paragraph 5.6, nothing in this Agreement shall constitute or be construed as a waiver or limitation on the enforceability of, or an election of remedies with respect to, the rights of the Participants other than PSNH to recover PSNH's unpaid share of Project Costs, if any, or its share of interim care and protection costs paid by other Participants pursuant to the Interim Agreement or to enforce other claims (whether now existing or arising in the future) against PSNH.
5.3 Governing Law. This Agreement is made under and shall be governed by, and construed in accordance with, the laws of the State of New Hampshire.
5.4 Severability. In the event that any clause or provision of this Agreement, or any part thereof, shall be declared invalid or unenforceable by any regulatory body or court having jurisdiction, such invalidity or unenforceability shall not affect the validity of the remaining portions of this Agreement.
5.5 Survival. All provisions of this Agreement providing for limitation of or protection against liability shall apply to the full extent permitted by law and shall survive termination of this Agreement.
5.6 Right of Vendors. This Agreement is not intended, and shall not be construed, to create or acknowledge any rights in favor of persons who or entities that are not parties to this Agreement, except for rights of vendors whose bills have been certified for payment pursuant to Paragraph 2.4, subject to the terms of, and to maintaining and disbursing the bank accounts and investment pool accounts in accordance with, this Agreement. Anything in this Agreement to the contrary notwithstanding, the Participants agree that this Agreement is made without prejudice to, and does not constitute a waiver of, or election of remedies with respect to, or limitation on the enforceability of, any rights or claims which any Party or Participant may now have or in the future have against any other Party or Participant.
5.7 Corporate Acts. This Agreement is the act and obligation of the Parties hereto in their corporate capacities.
5.8 Effectiveness. The Seventh Amendment hereto shall become effective upon execution by NAESCO and by Participants owning ninety-five percent (95%) or more of the Ownership Shares in the Seabrook Project, and upon its effectiveness, all Participants shall be, and be deemed to be, Parties to this Agreement as amended by the Seventh Amendment.FOOTNOTE 1
5.9 Counterparts. Any number of counterparts of this Agreement may be executed and each shall have the same force and effect as the original.
5.10 Amendments. Upon the Seventh Amendment becoming effective, this Agreement may thereafter be amended or modified by an instrument executed by Participants owning fifty-one percent or more of the Ownership Shares in the Seabrook Project and by NAESCO; provided, however, that this Paragraph 5.10 and the definitions of "Projected Costs" and "Cost of Completion" in Paragraph 1.7 hereof, may be modified or amended only by
FOOTNOTE 1 The Seventh Amendment hereto has received the required Participant approval and become effective. The First Amendment to Seventh Amendment to and Restate Agreement for Seabrook Project Disbursing Agent shall become effective at the "Time of Effectiveness," defined as "the date of the closing of the transactions necessary to accomplish the transfer of responsibility for the management, operation, and maintenance of Seabrook from the New Hampshire Yankee Division of Public Service Company of New Hampshire to NAESCO."
consent of Participants owning ninety-five percent or more of the Ownership Shares in the Seabrook Project and NAESCO, and provided further that any amendment to this Agreement which would have the effect of modifying the terms of the Joint Ownership Agreement shall not become effective unless approved as provided in Article 29 of the Joint Ownership Agreement.
5.11 Notices. Unless otherwise provided herein, notices and other communications required or permitted to be given or made under terms of this Agreement shall be in writing, and shall be deemed to have been duly made or given when delivered personally or when made or given by telex, telegraph or telecopier, prepaid, at, in the case of each Participant such address and to the attention of the chief executive officer or such other person as may be designated from time to time by a Participant in accordance with the Joint Ownership Agreement; and, in the case of NAESCO, to North Atlantic Energy Service Corporation, 107 Selden Street, Berlin, Connecticut 06037, Attention Treasurer, or to such other address or to the attention of such other person as NAESCO may from time to time designate by notice in writing to each Participant.
5.12 Contracts with Affiliates. NAESCO may retain or appoint a service company or agent (which service company or agent shall be affiliated with NAESCO) to act on its behalf and perform the responsibilities and assume the duties of the Disbursing Agent hereunder and under the Joint Ownership Agreement, so long as such appointment is consistent with the terms of the Operating License and the rules and regulation of the NRC. No such retention or appointment shall become effective unless the agreement(s) between NAESCO land such service company or agent(s) has been approved by at least three or more unaffiliated Participants, owning collectively 60 percent or more of the Ownership Shares. Participants shall not withhold their approval of any such agreement if it is fair and equitable to all affected parties. Any service company or agent(s) which perform services under this section shall, unless the Executive Committee otherwise directs, submit bills for such services to NAESCO, and NAESCO shall in turn bill the Participants for such services.
5.13 Termination. This Agreement shall be subject to termination and shall terminate, without any action by NAESCO or the Participants, to the extent and from the time that performance may conflict with the Public Utility Holding Company Act of 1935 or with any rule, regulation, or order of the Securities and Exchange Commission before or after the making hereof.
IN WITNESS WHEREOF, each of the undersigned has cause this Agreement to be duly signed by an authorized officer and attested (or such signature by an authorized officer to be attested to by a witness) on the date indicated by as of the date first above written.
CANAL ELECTRIC COMPANY
BY
Title:
THE CONNECTICUT LIGHT AND
POWER COMPANY
By
Title:
EUA POWER CORPORATION
By
Title:
HUDSON LIGHT & POWER DEPARTMENT
By
Title:
MASSACHUSETTS MUNICIPAL
WHOLESALE ELECTRIC COMPANY
By
Title:
MONTAUP ELECTRIC COMPANY
By
Title:
NEW ENGLAND POWER COMPANY
By
Title:
NEW HAMPSHIRE ELECTRIC COOPERATIVE
By
Title:
PUBLIC SERVICE COMPANY OF NEW
HAMPSHIRE
By
Title:
TAUNTON MUNICIPAL LIGHTING PLANT
By
Title:
THE UNITED ILLUMINATING COMPANY
By
Title:
VERMONT ELECTRIC GENERATION AND
TRANSMISSION COOPERATIVE, INC.
By
Title:
NORTH ATLANTIC ENERGY SERVICE
CORPORATION
By
Title:
Exhibit 10.20
NORTHEAST UTILITIES SERVICE COMPANY
FORM OF
SERVICE CONTRACT
AGREEMENT made and entered into as of the 1st day of July , 1966, by and between NORTHEAST UTILITIES SERVICE COMPANY (hereinafter referred to as Service Company) and
(hereinafter referred to as Associate Company).
WHEREAS, by order in File No. 37-65, the Securities and Exchange Commission (hereinafter referred to as SEC) approved and authorized, under the Public Utility Holding Company Act of 1935 (hereinafter referred to as the Act), the organization and conduct of business of Service Company in accordance herewith, as a wholly owned subsidiary service company of Northeast Utilities (hereinafter referred to as Northeast); and
WHEREAS, Service Company is willing to render services as provided herein to Northeast and its associated subsidiaries (hereinafter collectively referred to as the System) at cost, determined in accordance with applicable rules and regulations under the Act; and
WHEREAS, economies, increased efficiencies and other benefits will result to the System from the performance by Service Company of services as herein provided:
NOW, THEREFORE, in consideration of the premises and of the mutual agreements herein, it is agreed as follows:
Section 1. Agreement to Furnish Services.
Service Company agrees to furnish to Associate Company and other System companies, upon the terms and conditions herein provided, the services hereinafter referred to in Section 2 hereof at such times and for such periods as may be required, and Service Company will, as and to the extent required to provide such services to the system, keep itself and its personnel available and competent to render such services to the System so long as it is authorized so to do by federal and state regulatory agencies having jurisdiction.
For the purpose of providing services as herein provided, Service Company proposes to establish various departments, one or more of which will participate in providing particular services hereinafter described. Service Company reserves to itself the privilege, without amendment hereof or express prior agreement by Associate Company or other System companies, from time to time to establish new departments, to subdivide or otherwise reorganize any of the departments established by it, and to reallocate services among various departments.
Service Company will also provide for Associate Company and other
System companies as required such other services not referred to in
Section 2 hereof as Service Company may conclude it may furnish with
economies and increased efficiencies to the System or such other services
as Associate Company or other System companies may require and Service
Company is competent to perform.
Services will also be furnished to other System companies under agreements similar in all respects hereto and may also be furnished, in Service Company's discretion, to others, provided that by so doing the cost of services to Associate Company or other System companies will not be increased.
In supplying services hereunder, Service Company may arrange for services of such executives, financial advisers, accountants, attorneys, technical advisers, engineers and other persons as are required for or pertinent to the rendition of such services.
Section 2. Services to be Performed.
Subject to the provisions of Section 1 hereof, Service Company will provide to Associate Company and other System companies, the following services:
(A) General System Management: Executive, administrative, managerial, coordinating and advisory services, particularly with respect to the formulation and effectuation of policies and programs affecting or relating to the System as a whole, including financial, accounting, and economic policies and programs, power supply, public and employee relations, regulation, contractual arrangements, administrative and other proceedings, industry-wide activities and like matters.
(B) Other Functions and Activities: Studying, planning, advise, assistance, guidance, supervision, direction, administration, maintenance, handling, performance and operation, as may be required, in connection with the following functions and activities:
(i) Corporate and Secretarial: Policies and practices relating to the performance of corporate secretarial functions and activities, including the preparation and maintenance of official corporate records, reports, minutes and correspondence in accordance with assigned responsibilities and duties.
(ii) Financial Planning: Financial structures; financial programs to raise funds required or to effect savings through refinancing; relations with commercial banks and negotiation of short-term borrowings; relationships with investment bankers, analysts, analyst societies, securities holders, stock holders, stock exchanges and indenture trustees, transfer agents and registrars; general treasury, banking and financial matters.
(iii) Accounting: General accounting, customer accounting and related records; depreciation, accounting procedures and practices to improve efficiency; internal auditing, relations with independent auditors and appearances before and requirements of regulatory bodies with respect to accounting matters; and financial and operating reports and other statistical matters and analyses thereof.
(iv) Taxes: Consolidated and other income tax returns and other federal, state and municipal tax returns, and all matters related thereto, including relations with the Internal Revenue Service and other taxing authorities, the examination and processing of tax returns, assessments and claims, and developments in federal, state and municipal taxes.
(v) Insurance: Insurance programs and matters, including pension and other employee benefit plans and programs; and relations with insurance brokers and agents.
(vi) Budgets: Operating, construction and cash budgets, and similar studies or documents, including estimates and other information required therefor or related thereto.
(vii) Data Processing: Computer and other data processing activities.
(viii) Bulk Power Supply: The bulk power supply system from sources of supply through to bulk substations, to achieve reliable service at minimum cost, including forecasts of electric loads; power supply arrangements among System companies; power supply relations with other utilities; forecasts of gas requirements and the procurement of gas supplies; design, engineering and scheduling of electric and gas production and transmission facilities; the design, engineering and scheduling of major and unusual distribution facilities; and System electric load dispatching operations and related matters.
(ix) Engineering Research and Standardization: Engineering activities in the fields of research, design, construction and standardization; technical specifications and standard designs for and procedures and methods of utilizing materials, equipment and associated services; technical support and engineering as required in all areas of the System's operations.
(x) System Operations: Electric and gas operations, including production, transmission and distribution of electricity and gas; the construction, operation and maintenance of electric and gas facilities; and in general all electric and gas construction, maintenance and operating activities.
(xi) Other Administrative Services: Management-union and all other employee relation activities, including the definition of major organizational responsibilities and the translation of those responsibilities into effective organization structures; employee welfare and other programs and problems; business methods and procedures; and transportation activities and matters.
(xii) Purchasing and Stores: The purchasing and handling of materials and supplies, fuel and equipment, including such activities as buying, traffic, expediting and stock control, and scrap and salvage sales; major and long-term purchase contracts pertaining to the foregoing; and contacts with market conditions and principal suppliers.
(xiii) Commercial Activities: Electric, gas and other sales; customer service facilities; rate matters and rate structures; and area development plans and activities.
(C) Officers and other employees of Service Company will, on request of Associate Company, serve, without charge other than as herein provided, as officers or representatives of such Company.
Section 3. Agreement to Take and Pay for Services.
Associate Company agrees to take from Service Company such of the services to be performed by Service Company as may be required and to pay to Service Company the cost of such services determined as herein provided. It is the intent of this Agreement that the payment for services rendered by the Service Company to the System shall cover all the costs of its doing business (less credits for services to others any other miscellaneous income items), including reasonable compensation for necessary capital as permitted by Rule 91 of the SEC under the Act. The methods and procedure for determining the cost of services performed for Associate Company are set forth in Appendix A hereto.
Bills will be rendered for each calendar month on or before the twentieth day of the succeeding month and will be payable on presentation and not later than the last day of that month. Monthly charges may be made in whole or in part for particular expenses on an estimated basis, subject to adjustment, so that all charges for services during a calendar year will be made on an actual basis.
4. Effective Date; Term; and Cancellation.
This Agreement shall become and be effective as of the date hereof and it shall continue in effect, unless sooner terminated as herein provided, for a period of one year. It may be renewed from time to time for similar one-year periods by mutual agreement. This Agreement shall also be subject to termination and shall terminate, without any action by either of the parties, to the extent and from the time that performance may conflict with the Act or with any rule, regulation or order of the SEC adopted before or after the making hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, by their respective officers thereunto duly authorized, all as of the day and year first above written.
NORTHEAST UTILITIES SERVICE COMPANY
By
Its President
Attest:
Secretary ASSOCIATE COMPANY
By
Its President
|
Attest:
Secretary
APPENDIX A
DESCRIPTION OF METHODS AND PROCEDURE
FOR ALLOCATING COST OF SERVICES
JOB OR WORK ORDERS FOR SERVICE
There shall be job or work orders covering services to be performed for Associate Company or other System companies. These orders may be either general or specific. Services of a continuing nature, such as accounting, financial planning and dispatching, will be covered by general job or work orders; specific job or work orders will cover such things as issues of securities, special studies or construction projects. General orders, as well as specific orders, will specify the nature of the services to be performed thereunder in sufficient detail that charges therefor may be determined as herein provided and properly accounted for by the Associate Company under its prescribed Uniform System of Accounts.
CHARGES FOR SERVICES
General
Charges for services rendered to Associate Company and other System companies will be made on the bases of benefits conferred and of actual cost (including reasonable compensation for necessary capital as permitted by Rule 91 of the SEC under the Act), fairly and equitably allocated.
Specific Services
Charges for specific services performed will be made to the appropriate specific job or work order number assigned to accumulate the charges applicable to the particular activity. These charges will include both direct and indirect costs involved in providing the specific services.
General Services
Charges for general services performed will be made to the appropriate general job or work order number assigned to accumulate the charges applicable to the particular activity. These charges will include both direct and indirect costs involved in providing the general services.
NATURE OF CHARGES AND METHOD OF ALLOCATION
Direct Charges
Direct charges consist of those costs which can practicably be recorded separately and identified not only by job or work order number and department but also as to source, such as time reports for each employee, vehicle reports, invoices and other source documents. Time reports will be maintained for each employee, including officers, in such detail as may be appropriate for such employee and the nature of the services performed. Employees (other than stenographic, secretarial, clerical, and other workers engaged in rendering support services) will record on their time reports hours chargeable to the appropriate job or work order numbers and the nature of the work performed.
Northeast will be charged with 25% of the costs chargeable to job or work orders for general services not of an operating or functional nature related primarily to the System subsidiary companies but primarily of benefit to and performed for Northeast and the System as a whole. The balance of the charges to such job or work orders will be allocated to among System subsidiary companies as provided hereafter under "Charges to System Companies - General Services."
Indirect Charges or Overhead Expenses
Indirect charges or overhead expenses consist of all costs of the Service Company, other than direct charges described above. These charges may be classified into the following two general categories:
1. General Service Company Overheads - These charges include costs which
cannot be identified as applicable to either a particular job or work
order number or department and which must be allocated to the various
Service Company departments on a fair and equitable basis. The
following items are illustrative, and not all-inclusive, of the types
of costs which may be so-allocated to the extent above provided:
rents; office supplies and expenses; depreciation; building operation
and maintenance; insurance; reasonable compensation for necessary
capital; general services, such as stenographic, files, mail, etc.,
including salaries, employee benefits, and expenses of related
employees; and other general overheads.
These overhead costs will be allocated to each department on the basis of functional relationship, such as number of personnel, space occupied, use, etc.
2. Departmental Overheads - These charges include costs which can be identified as applicable to a particular department but which cannot be directly associated with a particular job or work order number. These costs will consist of the following:
(a) Wages and salaries of stenographic, secretarial, clerical and other workers in the department engaged in rendering support services.
(b) Lost or nonproductive time for vacations, personal time off, sickness, holidays, etc., of all employees in department.
(c) Payroll-related Federal and State taxes and group benefit plans for pension, life insurance, hospitalization and medical, etc., of all employees in department.
(d) Miscellaneous supplies and expense.
(e) General Service Company overheads allocated to the particular department as set forth in item 1 above.
The indirect charges of a particular department, as outlined in this item 2, will be distributed to the active specific or general job or work orders for which work is being performed by that department on the same proportionate basis as the actual direct payroll charges of that department.
CHARGES TO OTHER THAN SYSTEM COMPANIES
Services performed for other than System companies will be billed and paid for by them on an appropriate basis. All amounts so billed will be credited to the appropriate job or work orders before any charges are made therefrom to System companies.
CHARGES TO SYSTEM COMPANIES
Specific Services
Charges for specific services recorded in the appropriate job or work order numbers, including overhead items, will be billed to the company or companies for whom the services are performed.
General Services
Charges for general services recorded in the appropriate job or work order numbers, including overhead items, will be allocated among System subsidiary companies on one of the following bases determined on the basis of functional relationship to be the most fair and equitable:
1. Revenues - The relation of each company's gross operating revenues (electric, gas or total, as may be appropriate) to the sum of the operating revenues of all System companies (electric, gas or total, as may be appropriate) for the preceding calendar year.
2. Electric Peak Load - The relation of each company's annual electric peak load to the combined electric peak load of all System companies for the preceding calendar year.
3. Peak Day Sendout - The relation of each company's gas peak day sendout to the combined gas peak day sendout of all System companies for the preceding calendar year.
4. Customers Billed - The relation of each company's total customers billed to the combined total customers billed of all System companies for the preceding calendar year.
5. Other - Such other basis or bases as experience may show will provide on a functional relationship, a more fair and equitable allocation of particular charges than any of the foregoing.
DEPARTMENT COST CONTROLS
Annual operating budgets, on a departmental basis, will be used and costs will be controlled independently for each department so as to maintain a periodic check on the balances, if any, over or underbilled to insure that services rendered are being billed at cost. Each department will be charged with all of its expenses, including overhead items allocated to it, and will be credited with amounts billed from the department for services rendered. The accounts of each department will be maintained so as to be substantially in balance at all times. Accordingly, semiannual reviews will be made of balances to determine to what extent the billings should be adjusted to reflect actual cost.
BILLING
Bills will be provided Associate Company in sufficient detail so as to identify the services rendered and permit proper accounting distribution of the charges under the Associate Company's prescribed Uniform System of Accounts. Detail on the bill will include: (1) Department; (2) Function or type of service; (3) Nature of charges, whether direct or indirect (overhead); and (4) Source of charges, if direct.
Exhibit 10.20.2
FORM OF
ANNUAL RENEWAL OF SERVICE CONTRACT
AGREEMENT, made and entered into as of the day of , by and between Northeast Utilities Service Company (hereinafter referred to as Service Company) and (hereinafter referred to as Associate Company.
WHEREAS, the Service Contract between Service Company and Associate Company expires as of ; and
WHEREAS, both companies deem it to be in their best interests to renew the Service Contract for an additional period of one year on the same terms and conditions;
NOW, THEREFORE, in consideration of the premises and of the mutual agreements herein contained, it is agreed as follows:
(1) The Service Contract between Service Company and Associate Company is hereby renewed as of , for a period of one year; and
(2) All terms and conditions of the Service Contract shall continue in full force and effect during such renewal period.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be duly executed by their respective officers thereunto duly authorized, all as of the day and year first above written.
NORTHEAST UTILITIES SERVICE COMPANY
By:
attest:
ASSOCIATE COMPANY
By:
attest:
Exhibit 10.21.1
AMENDMENT TO
MEMORANDUM OF UNDERSTANDING
POOLING OF GENERATION AND TRANSMISSION
THIS AGREEMENT, dated as of February 2, 1982, is entered into by and
among The Connecticut Light and Power Company, The Hartford Electric Light
Company, Holyoke Power and Electric Company, Holyoke Water Power Company
and Western Massachusetts Electric Company (the "Companies") to amend an
agreement by and among the Companies entitled: MEMORANDUM OF
UNDERSTANDING -- POOLING OF GENERATION AND TRANSMISSION, dated as of
June 1, 1970 (hereinafter called the "NUG&T Agreement").
The Companies agree as follows:
1. Section 5 of the NUG&T Agreement is amended to read in the manner shown on the attached revised pages 6, 7, and 8 of the NUG&T Agreement.
2. Schedule A to the NUG&T Agreement, consisting of 2 pages and entitled: "DETERMINATION OF INVESTMENT RETURN," is amended to read in the manner shown on the attached revised Schedule A.
3. This Agreement, and the amendments provided in 1 and 2 above, shall become effective on April 5, 1982, or on such later date as the Federal Energy Regulatory Commission shall specify; provided, however, that if the Federal Energy Regulatory Commission shall order a hearing and suspend the effectiveness of the amendments provided herein for any period, then this Agreement and such amendments shall not become effective until the Commission's order following such hearing becomes final and is no longer subject to judicial review.
IN WITNESS WHEREOF, each of the Companies has caused this Agreement to be executed by its duly authorized representative, as of this 2nd day of February, 1982.
THE CONNECTICUT LIGHT AND POWER COMPANY
By /s/ W. A. Hunt
Its Vice President--
Revenue Requirements
|
THE HARTFORD ELECTRIC LIGHT COMPANY
By /s/ W. A. Hunt
Its Vice President--
Revenue Requirements
|
HOLYOKE POWER AND ELECTRIC COMPANY
By /s/ W. A. Hunt
Its Vice President--
Revenue Requirements
|
HOLYOKE WATER POWER COMPANY
By /s/ W. A. Hunt
Its Vice President--
Revenue Requirements
|
WESTERN MASSACHUSETTS ELECTRIC COMPANY
By /s/ W.A. Hunt |
amounts are fixed, they shall be reflected in a supplement to this Memorandum.
The amount which any of the Companies is required to pay, or entitled
to receive, under Section 3 each month shall be increased or decreased, as
appropriate, by one-twelfth of (i) 75% of its adjustment amount, as so
fixed, during the initial twelve months of the term of this Memorandum,
(ii) 50% of such adjustment amount during the second twelve months of the
term, and (iii) 25% of such adjustment amount during the third twelve
months of the term. No adjustment shall be made thereafter.
SECTION 5. DEFINITIONS.
The Companies participate in the New England Power Pool (NEPOOL) pursuant to the NEPOOL Agreement, dated September 1, 1971, which superseded the NEPEX Agreement. All references in Sections 2 through 8 of this Memorandum to the NEPEX Agreement shall be interpreted to be references to the NEPOOL Agreement, as amended, and as used in this Memorandum and all schedules and supplements hereto the terms NEPEX, Annual Peak, Load, and Unit Adjusted Contrast shall have the meanings specified for them in the NEPOOL Agreement, as amended.
Further, as used in the Memorandum and all schedules and supplements hereto the following items have the following respective meanings:
(a) Backbone Transmission: (i) all transmission lines 69KV and above except radial tap lines and other lines which serve principally local load and contribute little or no parallel capability to the interconnected system, and (ii) necessary linkages (including substation facilities such as transformers, circuit breakers and associated equipment) required to connect such lines to each other or to connect generation to such lines.
(b) Investment: as applied to any facility or facilities, means the original cost thereof as shown on the books of the owner thereof at the applicable time (including the cost of any betterments, improvements and additions thereto and excluding the cost of any retirements therefrom).
(c) Net Investment: as applied to any facility or facilities, means the Investment therein at the applicable time less the net amount of depreciation accumulated and less the net amount of deferred income taxes accumulated with respect to investments made subsequent to December 31, 1981, in such facility or facilities and plus the net amount of deferred income taxes accumulated subsequent to December 31, 1981, with respect to the recovery of estimated costs of final dismantlement and decontamination applicable to nuclear production facilities.
(d) Depreciable Investment: as applied to any facility or facilities, means such part of the Investment therein at the applicable time as reflects the portion thereof which is depreciable in accordance with generally accepted accounting principles.
(e) Operation and Maintenance Expense: as applied to any facility or facilities, means the actual expense of operating and maintaining such facility or facilities (being those amounts, other than amounts representing Fuel Expense, which are properly charged by the owner to power production or transmission expense accounts under the Uniform System of Accounts prescribed by the Federal Power Commission for Class A and Class B Public Utilities and Licensees and which are properly allocable to the facility or facilities), plus an appropriate amount to cover applicable administrative and general expense with respect thereto.
(f) Depreciation Expense: as applied to any facility or facilities, means an appropriate allowance to cover depreciation and obsolescence of the Depreciable Investment therein as fixed by the owner in accordance with its established practices.
(g) Property Tax Expense: as applied to any facility or facilities, means an appropriate allowance to cover property taxes incurred with respect thereto as fixed by the owner in accordance with its established practices.
(h) Investment Return: as applied to any facility or facilities, means an appropriate amount to cover capital costs with respect thereto, and, in the case of a generating unit, fuel inventory and other materials and supplies for the unit, determined in the manner provided in the appropriate schedule or supplement to this Memorandum.
(i) Income Tax Expense: as applied to any facility or facilities, means Federal or state income or other taxes related to Investment Return with respect to such facility or facilities, or the investment therein and shall reflect any applicable tax credits related to investments made subsequent to December 31, 1981, in such facility or facilities ratably over the remaining service life of such facilities.
(j) Fuel Expense: as applied to any facility or facilities, means the amount which is properly charged by the owner thereto the appropriate fuel expense account under the Uniform System of Accounts prescribed by the Federal Power Commission for Class A and Class B Public Utilities and Licensees and which is properly allocable to such facility or facilities.
SECTION 6. REIMBURSEMENT OF CERTAIN TAXES.
If at any time any of the Companies is required by any state or local governmental authority to pay a gross revenue or other similar tax with respect to payments made to it under this Memorandum by any other Company, the Company paying the tax shall be promptly reimbursed by such other Company for the amount of the tax.
SCHEDULE A
DETERMINATION OF INVESTMENT RETURN
"Investment Return" for any year shall be determined individually for
each of the Companies for purposes of the foregoing Memorandum by
multiplying the amount of its Net Investment in generation and Backbone
Transmission by its composite cost of capital. A Company's composite cost
of capital shall be computed on the basis of (a) its costs, expressed in
percentages, for (i) bonds and other long-term indebtedness and
(ii) preferred stock, and (iii) a return on its common equity, which is for
this purpose agreed to be 16.00%. These costs shall be combined in
accordance with the following formula to determine the Company's composite
cost of capital:
composite cost of capital = AxB + CxD + ExF
in which: A = the Company's cost for long-term indebtedness
B = the percentage of the Company's capitalization
represented by long-term indebtedness
C = the Company's cost for preferred stock
D = the percentage of the Company's capitalization
represented by preferred stock
E = the Company's return on common equity
F = the percentage of the Company's capitalization
represented by common equity
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For purposes of the foregoing formula and this Schedule A, a Company's capitalization consists of its long-term indebtedness, preferred stock and common equity, and the percentage of capitalization represented by each of the components thereof, shall be rounded off to the nearest whole number.
A Company's cost of long-term indebtedness for purposes of this Schedule is the weighted average of the costs of its various issues of long-term indebtedness. The cost of an issue of long-term indebtedness shall be computed in accordance with the following formula:
(Discount or (Premium)+Company
+ Expenses of Issue) 100
Coupon or Interest Rate (%)xPrincipal Amount) Years to Maturity
Principal Amount - (Discount or (Premium) + Company Expenses of Issue)
A Company's cost of preferred stock for purposes of this Schedule is the weighted average of the costs of its various issues of preferred stock. The cost of an issue of preferred stock shall be computed in accordance with the following formula:
Cost of Issue in Percent =
(Dividend Rate (%)xAggregate Par or Stated Value)
(Proceeds to Company from Underwriter or Investor -
Company Expenses of Issue
Each Company's Investment Return for a year shall be computed initially at the beginning of the year on the basis of its Net Investment in generation and Backbone Transmission and its composite cost of capital as of the beginning of the year. The Investment Return, as so computed, shall be re-computed each time that a substantial change in generation or Backbone Transmission utility plant in service accounts occurs during the year and at such other times as the Companies mutually agree is appropriate.
The usage in this Schedule of terms which are defined in the foregoing Memorandum is in accordance with the definitions thereof in the Memorandum.
CERTIFICATE OF CONCURRENCE
OF
THE HARTFORD ELECTRIC LIGHT COMPANY
This is to certify that The Hartford Electric Light Company assents to and concurs in the rate schedule change described below which is being filed concurrently herewith by The Connecticut Light and Power Company, and The Hartford Electric Light Company hereby files this Certificate of Concurrence in lieu of filing such rate schedule change:
AMENDMENT dated February 2, 1982, to MEMORANDUM OF UNDERSTANDING --
POOLING OF GENERATION AND TRANSMISSION dated as of June 1, 1970, by
and among The Connecticut Light and Power Company, The Hartford
Electric Light Company, Holyoke Power and Electric Company, Holyoke
Water Power Company and Western Massachusetts Electric Company
The Hartford Electric Light Company also assents to and concurs in the information and supporting data which are being filed with such rate schedule change, insofar as such information and supporting data relate to The Hartford Electric Light Company, and respectfully requests that such information and supporting data be deemed to have been submitted by The Hartford Electric Light Company.
The Hartford Electric Light Company also joins in the request that such rate schedule change be permitted to become effective on April 5, 1982, and advises the Commission that is has agreed with the other NU Companies that, in the event that the Commission should order a hearing and suspend the effectiveness of the rate schedule change for any period, the rate schedule change shall not become effective until the Commission's order following such hearing becomes final.
THE HARTFORD ELECTRIC LIGHT COMPANY
By /s/ W. A. Hunt
February 2, 1982
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CERTIFICATE OF CONCURRENCE
OF
HOLYOKE WATER POWER COMPANY
This is to certify that Holyoke Water Power Company assents to and concurs in the rate schedule change described below which is being filed concurrently herewith by The Connecticut Light and Power Company, and Holyoke Water Power Company hereby files this Certificate of Concurrence in lieu of filing such rate schedule change:
AMENDMENT dated February 2, 1982, to MEMORANDUM OF UNDERSTANDING --
POOLING OF GENERATION AND TRANSMISSION dated as of June 1, 1970, by
and among The Connecticut Light and Power Company, The Hartford
Electric Light Company, Holyoke Power and Electric Company, Holyoke
Water Power Company and Western Massachusetts Electric Company
Holyoke Water Power Company also assents to and concurs in the information and supporting data which are being filed with such rate schedule change, insofar as such information and supporting data relate to Holyoke Water Power Company, and respectfully requests that such information and supporting data be deemed to have been submitted by Holyoke Water Power Company.
Holyoke Water Power Company also joins in the request that such rate schedule change be permitted to become effective on April 5, 1982, and advises the Commission that is has agreed with the other NU Companies that, in the event that the Commission should order a hearing and suspend the effectiveness of the rate schedule change for any period, the rate schedule change shall not become effective until the Commission's order following such hearing becomes final.
HOLYOKE WATER POWER COMPANY
By /s/ W. A. Hunt
February 2, 1982
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CERTIFICATE OF CONCURRENCE
OF
HOLYOKE POWER AND ELECTRIC COMPANY
This is to certify that Holyoke Power and Electric Company assents to and concurs in the rate schedule change described below which is being filed concurrently herewith by The Connecticut Light and Power Company, and Holyoke Power and Electric Company hereby files this Certificate of Concurrence in lieu of filing such rate schedule change:
AMENDMENT dated February 2, 1982, to MEMORANDUM OF UNDERSTANDING --
POOLING OF GENERATION AND TRANSMISSION dated as of June 1, 1970, by
and among The Connecticut Light and Power Company, The Hartford
Electric Light Company, Holyoke Power and Electric Company, Holyoke
Water Power Company and Western Massachusetts Electric Company
Holyoke Power and Electric Company also assents to and concurs in the information and supporting data which are being filed with such rate schedule change, insofar as such information and supporting data relate to Holyoke Power and Electric Company, and respectfully requests that such information and supporting data be deemed to have been submitted by Holyoke Power and Electric Company.
Holyoke Power and Electric Company also joins in the request that such rate schedule change be permitted to become effective on April 5, 1982, and advises the Commission that is has agreed with the other NU Companies that, in the event that the Commission should order a hearing and suspend the effectiveness of the rate schedule change for any period, the rate schedule change shall not become effective until the Commission's order following such hearing becomes final.
HOLYOKE POWER AND ELECTRIC COMPANY
By /s/ W. A. Hunt
February 2, 1982
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CERTIFICATE OF CONCURRENCE
OF
WESTERN MASSACHUSETTS ELECTRIC COMPANY
This is to certify that Western Massachusetts Electric Company assents to and concurs in the rate schedule change described below which is being filed concurrently herewith by The Connecticut Light and Power Company, and Western Massachusetts Electric Company hereby files this Certificate of Concurrence in lieu of filing such rate schedule change:
AMENDMENT dated February 2, 1982, to MEMORANDUM OF UNDERSTANDING --
POOLING OF GENERATION AND TRANSMISSION dated as of June 1, 1970, by
and among The Connecticut Light and Power Company, The Hartford
Electric Light Company, Holyoke Power and Electric Company, Holyoke
Water Power Company and Western Massachusetts Electric Company
Western Massachusetts Electric Company also assents to and concurs in the information and supporting data which are being filed with such rate schedule change, insofar as such information and supporting data relate to Western Massachusetts Electric Company, and respectfully requests that such information and supporting data be deemed to have been submitted by Western Massachusetts Electric Company.
Western Massachusetts Electric Company also joins in the request that such rate schedule change be permitted to become effective on April 5, 1982, and advises the Commission that is has agreed with the other NU Companies that, in the event that the Commission should order a hearing and suspend the effectiveness of the rate schedule change for any period, the rate schedule change shall not become effective until the Commission's order following such hearing becomes final.
WESTERN MASSACHUSETTS ELECTRIC COMPANY
By /s/ W. A. Hunt
February 2, 1982
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Exhibit 10.22.4
TWENTY-NINTH AGREEMENT AMENDING
NEW ENGLAND POWER POOL AGREEMENT
THIS AGREEMENT, dated as of the 1st day of May, 1993 is entered into by the signatories hereto for the amendment by them of the New England Power Pool Agreement dated as of September 1, 1971 (the "NEPOOL Agreement"), as previously amended by twenty-eight (28) amendments, the most recent of which was dated as of September 15, 1992. WHEREAS, Participant generation resources, other than hydroelectric units, whose annual hours of operation are restricted by regulatory requirements, contract terms or engineering or operating constraints, may require treatment different from that otherwise provided in the NEPOOL Agreement for Capability Responsibility and energy billing purposes; and
WHEREAS, the signatory Participants have determined to amend the NEPOOL Agreement in the manner specified below in order to provide for a modified Capability Responsibility and energy billing treatment for restricted generation resources.
NOW THEREFORE, the signatories hereby agree as follows:
SECTION I TEXT OF AMENDMENTS
A. Amendment of Section 9.2(b)(2)
Section 9.2(b)(2) of the NEPOOL Agreement is amended by inserting the following additional provisions immediately following the present final paragraph of Section 9.2(b)(2):
The New Unit Adjustment Factor for any Restricted Unit for which proposed plans were submitted subsequent to November 1, 1990 for review pursuant to Section 10.4 (or, in the case of a unit with a rated capacity of less than 5MW, for which notification was first given to NEPOOL subsequent to November 1, 1990) and for the Peabody Municipal Light Plant's Waters River #2 unit shall be determined in accordance with the formula previously specified in this Section 9.2(b)(2), modified as follows:
n = K1(c-C) + K2(f-F) + K3(m-M) + K4(d-D) + K5(f-F)c2 + K6(2500-a)
The symbols used in the above formula, as modified, shall have the meanings previously specified, except that the symbols "K6" and "a" shall have the following meanings:
K6 is a scaling factor of 0.0001.
a is as follows:
for units with more than 2500 annual hours
available for operation, "a" = 2500,
for units with annual hours available for
operation between 500 and 2500, inclusive, "a" =
annual hours available for operation, and
for units with annual hours available for
operation less than 500 hours, "a" = - 7500;
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provided, however, that a Participant may elect to avoid, in whole or part, the effect on its Capability Responsibility of a Restricted Unit's availability being limited to 2500 hours or less a year by agreeing to leave unfilled a portion of its dispatchable load allocation in accordance with rules to be adopted by the Operations Committee.
B. Amendment of Section 12.6
The first two sentences of Section 12.6 of the NEPOOL Agreement are amended to read as follows:
If pursuant to Section 12.5A, a Participant is deemed to have received energy service in any hour when the Participant (i) had Entitlements in one or more generating units which were available for service but were not scheduled for operation by NEPEX at their full available Reserve Capability (or, to the extent applicable, at their full available Temporary Reserve Capability) and which, in the case of any Restricted Unit, had an unused portion of an available Restricted Unit Operational Allowance and/or (ii) had Scheduled Outage Service Entitlements, the Participant shall be deemed to have received Economy Flow Service and/or Scheduled Outage Service in an amount equal to the lesser of:
(a) the amount of energy service the Participant is deemed to have received pursuant to Section 12.5A, or
(b) the amount of energy service which could have been provided from its share of (1) the unused portion of the available Reserve or Temporary Reserve Capabilities of the units described in (i) above, as limited in the case of any Restricted Unit by the unused portion of its available Restricted Unit Operational Allowance, plus (2) its Scheduled Outage Service Entitlements.
Economy Flow Service is service which a Participant is deemed to receive at any time to replace service which it could have provided at the time from units described in (i) above, and the amount of Economy Flow Service which it is deemed to receive at the time shall not exceed the amount of energy service which could have been provided from its share of the unused portions of the available Reserve Capabilities (or, to the extent applicable, the unused portion of the available Temporary Reserve Capabilities or the unused portion of the available Restricted Unit Operational Allowances, whichever is controlling) of such units.
C. Addition of Definitions of "Restricted Unit" and "Restricted Unit Operational Allowance".
The NEPOOL Agreement is amended by adding the following definitions following the definition of "Reserve Savings Shares" in Section 15.37A:
15.37B. Restricted Unit is a generating unit, other than a hydroelectric unit, that is restricted in annual hours available for operation by regulatory requirements, contract terms or actual engineering or operating constraints. Planned or forced outages due to maintenance requirements are not considered restrictions in annual hours available for operation.
15.37C. Restricted Unit Operational Allowance "Allowance") for a Participant's Entitlement in a Restricted Unit for any calendar year (or for the term of the Entitlement in any year, if such term is for a shorter period than the year) is the number of hours for which the Restricted Unit is available for operation during the year or such shorter period, whichever is applicable. The Allowance for a Participant's Entitlement in a Restricted Unit for any year or shorter period shall be deemed to be exhausted when (i) the number of hours that the Operations Committee determines the Participant would have used its Restricted Unit Entitlement to minimize the Participant's overall energy costs in the absence of NEPEX dispatch, plus (ii) the number of hours that the Participant is deemed to receive Scheduled Outage Service with respect to its Entitlement in the Restricted Unit during the year or such shorter period pursuant to Section 12.6, equals the Allowance.
D. Modification of Definition of "Scheduled Outage Service Entitlement".
The definition of "Scheduled Outage Service Entitlement" in Section 15.38B of the NEPOOL Agreement is amended to read as follows:
15.38B Scheduled Outage Service Entitlement of a
Participant is the amount of Scheduled Outage
Service which the Participant is entitled to
receive in any hour with respect to a generating
unit which is scheduled by the Operations
Committee to be out of service, in whole or in
part, for maintenance during a period approved
for it by the Operations Committee for Scheduled
Outage Service and is in fact out of service, in
whole or in part, for any reason during the
approved period. Such amount is equal to the
lesser of (i) the portion of the Participant's
share of the Reserve Capability of such unit which
is unavailable for service times an estimated
average availability of such unit between its
periodic scheduled outages or (ii) in the case of
any generating unit with a currently applicable
Temporary Reserve Capability, the portion of the
Participant's share of the Temporary Reserve
Capability which is unavailable for service;
provided, however, that (a) in the case of any
Limited Fuel Unit, the amount of a Participant's
Scheduled Outage Service Entitlement shall be
reduced, if appropriate, to take account of any
limit on the availability of stream flow or fuel
to operate the unit during the outage period, and
(b) in the case of any Restricted Unit, the
Participant's Scheduled Outage Service Entitlement
shall be limited to the unused portion, if any, of
its currently available Restricted Unit
Operational Allowance for the unit. The
Operations Committee shall develop rules for
establishing the estimated average availability of
each unit between scheduled outages. Such rules
shall become effective upon approval by the
Management Committee.
SECTION II
EFFECTIVENESS OF AGREEMENT
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Following its execution by the requisite number of Participants, this Agreement, and the amendments provided for above, shall become effective on August 1, 1993, or on such later date as the Federal Energy Regulatory Commission shall provide that such amendment shall become effective.
SECTION III USAGE OF DEFINED TERMS
The usage in this Agreement of terms which are defined in the NEPOOL Agreement shall be deemed to be in accordance with the definitions thereof in the NEPOOL Agreement.
SECTION IV COUNTERPARTS
This Agreement may be executed in any number of counterparts and each executed counterpart shall have the same force and effect as an original instrument and as if all the parties to all the counterparts had signed the same instrument. Any signature page of this Agreement may be detached from any counterpart of this Agreement without impairing the legal effect of any signatures thereof, and may be attached to another counterpart of this Agreement identical in form hereto but having attached to it one or more signature pages.
IN WITNESS WHEREOF, each of the signatories has caused a counterpart signature page to be executed by its duly authorized representative, as of the 1st day of May, 1993.
COUNTERPART SIGNATURE PAGE
TO TWENTY-NINTH AGREEMENT AMENDING
NEW ENGLAND POWER POOL AGREEMENT
DATED AS OF MAY 1, 1993
The NEPOOL Agreement, being dated as of September 1, 1971, and being previously amended by twenty-eight (28) amendments, the most recent prior amendment being an amendment dated as of September 15, 1992.
By: /s/
Name:
Title:
Address:
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Exhibit 10.28
NORTHEAST NUCLEAR ENERGY COMPANY
$25,000,000
7.17% SENIOR NOTES DUE AUGUST 31, 2019
NOTE AGREEMENT
Dated as of December 21, 1993
TABLE OF CONTENTS
(Not Part of Agreement)
Page
1. AUTHORIZATION AND INTEREST RATE . . . . . . . . . . . . . . . . . . .1
1A. Authorization of Issue of Notes . . . . . . . . . . . . . .1
1B. Interest Rate . . . . . . . . . . . . . . . . . . . . . . .1
2. PURCHASE AND SALE OF NOTES; FEES . . . . . . . . . . . . . . . . . . 1
2A. Purchase and Sale of Notes. . . . . . . . . . . . . . . . .1
2B. Rate Lock Delayed Delivery Fee. . . . . . . . . . . . . . .2
2C. Rate Lock Cancellation Fee. . . . . . . . . . . . . . . . .2
2D. Commitment Fee. . . . . . . . . . . . . . . . . . . . . . .3
3. CONDITIONS OF FUNDING. . . . . . . . . . . . . . . . . . . . . . . . 3
3A. Opinion of Purchaser's Special Counsel. . . . . . . . . . .3
3B. Opinion of Company's Counsel. . . . . . . . . . . . . . . .3
3C. Opinion of CL&P's Special Counsel . . . . . . . . . . . . .3
3D. Opinion of WMECO's Special Counsel. . . . . . . . . . . . .3
3E. Representations and Warranties; No Default. . . . . . . . .4
3F. Purchase Permitted By Applicable Laws; Regulatory
Approvals. . . . . . . . . . . . . . . . . . . . . . . . . 4
3G. Millstone Plant Agreement . . . . . . . . . . . . . . . . .4
3H. Delivery of Notes . . . . . . . . . . . . . . . . . . . . .4
3I. Inducement Letter . . . . . . . . . . . . . . . . . . . . .4
3J. Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . .5
3K. Proceedings . . . . . . . . . . . . . . . . . . . . . . . .5
4. PREPAYMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4A(1). Required Prepayments Prior to Downgrade Event. . . . .5
4A(2). Required Prepayments With Yield-Maintenance Amount . .5
4B. Optional Prepayment With Yield-Maintenance Amount . . . . .5
4C. Notice of Optional Prepayment . . . . . . . . . . . . . . .6
4D. Partial Payments Pro Rata . . . . . . . . . . . . . . . . .6
4E. Retirement of Notes . . . . . . . . . . . . . . . . . . . .6
5. AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . 7
5A. Financial Statements. . . . . . . . . . . . . . . . . . . .7
5B. Information Required by Rule 144A . . . . . . . . . . . . .9
5C. Inspection of Property. . . . . . . . . . . . . . . . . . .9
5D. Conduct of Business and Maintenance of Existence. . . . . .9
5E. Maintenance of Properties . . . . . . . . . . . . . . . . 10
5F. Obligations and Taxes . . . . . . . . . . . . . . . . . . 10
5G. Compliance with Laws and Other Covenants. . . . . . . . . 10
5H. Maintenance of Insurance. . . . . . . . . . . . . . . . . 11
5I. Covenant to Secure Note Equally . . . . . . . . . . . . . 11
6. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . 11
6A. Lien, Debt and Other Restrictions . . . . . . . . . . . . 11
6A(1). Liens. . . . . . . . . . . . . . . . . . . . . . . . 11
6A(2). Debt . . . . . . . . . . . . . . . . . . . . . . . . 12
6A(3). Merger and Sale of Assets. . . . . . . . . . . . . . 13
6A(4). Restricted Investments . . . . . . . . . . . . . . . 13
6B. No Amendment of Millstone Plant Agreement . . . . . . . . 14
7. EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . 14
7A. Acceleration. . . . . . . . . . . . . . . . . . . . . . . 14
7B. Rescission of Acceleration. . . . . . . . . . . . . . . . 17
7C. Notice of Acceleration or Rescission. . . . . . . . . . . 18
7D. Other Remedies. . . . . . . . . . . . . . . . . . . . . . 18
8. REPRESENTATIONS, COVENANTS AND WARRANTIES. . . . . . . . . . . . . .18
8A. Organization. . . . . . . . . . . . . . . . . . . . . . . 18
8B. Power and Authority . . . . . . . . . . . . . . . . . . . 19
8C. Financial Statements. . . . . . . . . . . . . . . . . . . 19
8D. Actions Pending . . . . . . . . . . . . . . . . . . . . . 19
8E. Outstanding Debt. . . . . . . . . . . . . . . . . . . . . 19
8F. Title to Properties . . . . . . . . . . . . . . . . . . . 20
8G. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8H. Conflicting Agreements and Other Matters. . . . . . . . . 20
8I. Offering of Notes . . . . . . . . . . . . . . . . . . . . 20
8J. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . 21
8K. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8L. Governmental and Other Third Party Consent. . . . . . . . 22
8M. Environmental Compliance. . . . . . . . . . . . . . . . . 22
8N. Disclosure. . . . . . . . . . . . . . . . . . . . . . . . 23
8O. Permits and Other Operating Rights. . . . . . . . . . . . 23
8P. Millstone Plant Agreement . . . . . . . . . . . . . . . . 23
8Q. Regulatory Status of Company. . . . . . . . . . . . . . . 23
9. REPRESENTATIONS OF THE PURCHASER . . . . . . . . . . . . . . . . . 24
9A. Nature of Purchase. . . . . . . . . . . . . . . . . . . . 24
9B. Source of Funds . . . . . . . . . . . . . . . . . . . . . 24
10. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
10A.Yield-Maintenance Terms . . . . . . . . . . . . . . . . . .24
10B.Other Terms . . . . . . . . . . . . . . . . . . . . . . . .26
10C.Accounting Principles, Terms and Determinations . . . . . .30
11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
11A.Note Payments . . . . . . . . . . . . . . . . . . . . . . .31
11B.Expenses. . . . . . . . . . . . . . . . . . . . . . . . . .31
11C.Consent to Amendments . . . . . . . . . . . . . . . . . . .32
11D.Form, Registration, Transfer and Exchange of Notes; Lost
Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11E.Persons Deemed Owners; Participations . . . . . . . . . . .33
11F.Survival of Representations and Warranties; Entire
Agreement. . . . . . . . . . . . . . . . . . . . . . . . . 33
11G.Successors and Assigns. . . . . . . . . . . . . . . . . . .33
11H.Disclosure to Other Persons . . . . . . . . . . . . . . . .33
11I.Notices . . . . . . . . . . . . . . . . . . . . . . . . . .34
11J.Payments Due on Non-Business Days . . . . . . . . . . . . .34
11K.Satisfaction Requirement. . . . . . . . . . . . . . . . . .34
11L.Governing Law . . . . . . . . . . . . . . . . . . . . . . .34
11M.Severability. . . . . . . . . . . . . . . . . . . . . . . .35
11N.Descriptive Headings. . . . . . . . . . . . . . . . . . . .35
11O.Counterparts. . . . . . . . . . . . . . . . . . . . . . . .35
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PURCHASER SCHEDULE
EXHIBIT A -- FORM OF NOTE EXHIBIT B -- FORM OF OPINION OF COMPANY'S SPECIAL COUNSEL EXHIBIT C -- FORM OF OPINION OF CL&P'S SPECIAL COUNSEL EXHIBIT D -- FORM OF OPINION OF WMECO'S SPECIAL COUNSEL EXHIBIT E -- FORM OF INDUCEMENT LETTER SCHEDULE 4A(1) -- AMORTIZATION SCHEDULE SCHEDULE 6A(1)(v) -- EXISTING LIENS SCHEDULE 6A(2) -- DEBT |
SCHEDULE 8H -- LIST OF AGREEMENTS RESTRICTING DEBT
SCHEDULE 10B(2) -- MONEY POOL APPLICATION AND APPROVAL
NORTHEAST NUCLEAR ENERGY COMPANY
107 Selden Street
Berlin, Connecticut 06037
As of December 21, 1993
The Prudential Insurance Company of America
c/o Prudential Power Funding Associates
Four Gateway Center
100 Mulberry Street
Newark, New Jersey 07102-4069
Ladies and Gentlemen:
The undersigned, Northeast Nuclear Energy Company (herein called the "Company"), hereby agrees with you as follows:
1. AUTHORIZATION AND INTEREST RATE.
1A. Authorization of Issue of Notes. The Company will authorize the issue of its senior promissory notes in the aggregate principal amount of $25,000,000, to be dated the date of issue thereof, to mature August 31, 2019, to bear interest on the unpaid balance thereof from the date thereof until the principal thereof shall have become due and payable at the rate per annum determined in accordance with paragraph 1B hereof and on overdue payments at the rate specified therein, and to be substantially in the form of Exhibit A attached hereto. The term "Notes" as used herein shall include each such senior promissory note delivered pursuant to any provision of this Agreement and each such senior promissory note delivered in substitution or exchange for any other Note pursuant to any such provision.
1B. Interest Rate. The Notes shall bear interest at the rate of 7.17% per annum payable on the last day of each month commencing December 31, 1993 and otherwise in accordance and as set forth in paragraph 11A hereof; provided, however, that, in the event a Downgrade Event occurs, then, on and after the Downgrade Date, the Notes shall bear interest at the rate of 7.67% per annum payable as set forth herein and in paragraph 11A hereof.
2. PURCHASE AND SALE OF NOTES; FEES.
2A. Purchase and Sale of Notes. The Company hereby agrees to sell to you and, subject to the terms and conditions herein set forth, you agree to purchase from the Company Notes in the aggregate principal amount set forth opposite your name on the Purchaser Schedule attached hereto at 100% of such aggregate principal amount. The Company will deliver to you, at the offices of Schiff Hardin & Waite at 7200 Sears Tower, Chicago, Illinois 60606, one or more Notes registered in your name, evidencing the aggregate principal amount of Notes to be purchased by you and in the denomination or denominations specified in the Purchaser Schedule attached hereto, against payment of the purchase price thereof by transfer of immediately available funds for credit to the Company's account #0031-3419 at Shawmut Bank Connecticut, Hartford, Connecticut on the date of funding, which shall be December 21, 1993 or any other date on or before December 30, 1993 upon which the Company and you may mutually agree (herein called "funding" or the "date of funding").
2B. Rate Lock Delayed Delivery Fee. If funding does not occur on or before December 30, 1993 for any reason, the Company will pay to you in immediately available funds on January 1, 1994 a delayed delivery fee calculated as provided below. If the funding date is delayed beyond December 30, 1993 for any reason other than your failure to purchase the Notes when you are obligated to do so pursuant to the terms of this Agreement, the Company will pay to you in immediately available funds additional delayed delivery fees on the rescheduled second funding date and any subsequently rescheduled funding date calculated as provided below. The amount of any delayed delivery fee shall be calculated as follows:
(7.17% - MMY) x DTS/360 x $25,000,000
where "MMY" means Money Market Yield, i.e., the yield per annum on an alternative investment selected by you on the date you receive notice of the delay of the funding date having a maturity date on or about the rescheduled funding date (a new investment being selected by you each time the funding date is delayed); "DTS" means Days to Settlement, i.e., the number of actual days elapsed (a) from and including (i) December 30, 1993, if no delayed delivery fee has been paid, or (ii) the date of the immediately preceding payment of a delayed delivery fee, if a delayed delivery fee has previously been paid, (b) to but excluding the date such delayed delivery fee is to be paid. In no case shall any delayed delivery fee be less than zero. Nothing in this paragraph 2B shall be or operate as a consent by you to, or waiver of, the failure by the Company to comply with the terms of this Agreement regarding the issuance and sale of the Notes on the funding date, or a selection or limitation of any of your rights or remedies resulting from such failure.
2C. Rate Lock Cancellation Fee. If funding does not occur on or prior to the Cancellation Date for any reason, the Company will pay you in immediately available funds on the Cancellation Date a cancellation fee calculated as follows:
PI x $25,000,000
where "PI" means Price Increase, i.e., the quotient (expressed in decimals)
obtained by dividing (a) the excess, if any, of the asked price (determined
by you) of the Hedge Treasury Note(s) (as defined below) on the
Cancellation Date over the bid price (as determined by you) of the Hedge
Treasury Notes on December 17, 1993 by (b) such bid price. The foregoing
bid and asked prices shall be as reported by Telerate Systems, Inc. (or, if
such date for any reason ceases to be available through Telerate Systems,
Inc., any publicly available source of similar market data selected by
you). Each price shall be based on a Hedge Treasury Note having a par
value of $100.00 and shall be rounded to the second decimal place. In no
case shall the cancellation fee be less than zero. For purposes of this
paragraph 2C, (a) "Cancellation Date" shall mean the earlier to occur of
(i) the date on which you receive notice from the Company that the Company
does not intend to issue the Notes (or the next succeeding Business Day if
you receive such notice after 4:00 p.m., New York City time) or (ii)
December 30, 1993, and (b) "Hedge Treasury Note" shall mean the U.S.
Treasury Note or Notes used by you to lock the interest rate on the Notes
on December 17, 1993.
2D. Commitment Fee. The Company will pay to you in immediately available funds on the date of funding a commitment fee on $28,000,000 at the rate of 0.125% per annum for the period from September 14, 1993 to the date of funding.
3. CONDITIONS OF FUNDING. Your obligation to purchase and pay for the Notes to be purchased by you hereunder is subject to the satisfaction, on or before the date of funding, of the following conditions:
3A. Opinion of Purchaser's Special Counsel. You shall have received from Schiff Hardin & Waite, who are acting as special counsel for you in connection with this transaction, a favorable opinion satisfactory to you as to such matters incident to the matters herein contemplated as you may reasonably request.
3B. Opinion of Company's Counsel. You shall have received from Day, Berry & Howard, special counsel for the Company, a favorable opinion satisfactory to you in the form of Exhibit B attached hereto, and the Company, by its execution of this Agreement, authorizes and directs such to render such opinion to you.
3C. Opinion of CL&P's Special Counsel. You shall have received from Day, Berry & Howard, special counsel for CL&P, a favorable opinion in the form of Exhibit C attached hereto.
3D. Opinion of WMECO's Special Counsel. You shall have received from Day, Berry & Howard, special counsel for WMECO, a favorable opinion in the form of Exhibit D attached hereto.
3E. Representations and Warranties; No Default. The representations and warranties contained in paragraph 8 and in the Inducement Letter shall be true on and as of the date of funding, both before and after giving effect to the purchase of the Notes and the use of the proceeds thereof; there shall exist on the date of funding no Event of Default or Default both before and after giving effect to the purchase of the Notes and the use of the proceeds thereof; and the Company shall have delivered to you an Officer's Certificate, dated the date of funding, to both such effects.
3F. Purchase Permitted By Applicable Laws; Regulatory Approvals. The purchase of and payment for the Notes to be purchased by you on the date of funding on the terms and conditions herein provided (including the use of the proceeds of such Notes by the Company) shall not violate any applicable law or governmental regulation (including, without limitation, section 5 of the Securities Act or Regulation G, T or X of the Board of Governors of the Federal Reserve System) and shall not subject you to any tax, penalty, liability or other onerous condition under or pursuant to any applicable law or governmental regulation, and you shall have received such certificates or other evidence as you may request to establish compliance with this condition. The orders of the Securities and Exchange Commission and the CDPUC referred to in paragraph 8L of this Agreement shall be satisfactory to you, shall be in full force and effect on the date of funding, shall not have been stayed, suspended, modified, vacated or held invalid, shall not be contested and no petition for rehearing, stay or suspension or appeal or review of any thereof shall have been filed, and, with respect to the orders described in clause (ii) of paragraph 8L, shall be final. Any conditions contained in such orders shall have been satisfied to your reasonable satisfaction. You and your special counsel shall have received copies of such documents and papers (including, without limitation, certified or attested copies of such orders) as you or they may reasonably request in connection therewith or as a basis for your special counsel's funding opinion, all in form and substance satisfactory to you and your special counsel.
3G. Millstone Plant Agreement. The Millstone Plant Agreement shall be in full force and effect without any amendment or supplement thereto or waiver of any rights by any party thereunder and there shall be no default or claim of default by any party under such agreement.
3H. Delivery of Notes. The Company shall have delivered to you the Notes to be delivered to you pursuant to paragraph 2, all duly completed and executed by the Company.
3I. Inducement Letter. Each of CL&P and WMECO shall have executed and delivered to you a letter agreement in the form of Exhibit E attached hereto (the "Inducement Letter") and the Inducement Letter shall be in full force and effect.
3J. Fees. The Company shall have paid any delayed delivery fees pursuant to paragraph 2B and the commitment fee pursuant to paragraph 2D.
3K. Proceedings. All corporate and other proceedings taken or to be taken in connection with the transactions contemplated hereby and all documents incident thereto shall be satisfactory in substance and form to you, and you shall have received all such counterpart originals or certified or other copies of such documents as you may reasonably request.
4. PREPAYMENTS. The Notes shall be subject to prepayment with respect to the required prepayments specified in paragraph 4A(1) and 4A(2) and the optional prepayments permitted by paragraph 4B.
4A(1). Required Prepayments Prior to Downgrade Event. Until the Notes shall be paid in full, the Company shall apply to the prepayment of the Notes, without premium, on the last day of each month, from September 30, 1994 through July 31, 2019, the principal amount set forth on Schedule 4A(1) attached hereto opposite such day, and such principal amounts of the Notes, together with interest accrued thereon to the prepayment dates, shall become due on such prepayment dates. The remaining principal amount of the Notes, together with interest accrued thereon, shall become due on August 31, 2019 or at such earlier time as may be required pursuant to paragraph 4A(2). Notwithstanding the foregoing, in the event a Downgrade Event occurs, the Company shall make the prepayments required under paragraph 4A(2) in lieu of the prepayments required under this paragraph 4A(1).
4A(2). Required Prepayments With Yield-Maintenance Amount. In the event that a Downgrade Event occurs, the Company shall give immediate notice thereof to the holders of the Notes and, until the Notes shall be paid in full, the Company shall apply to the prepayment of the Notes, with the Yield Maintenance Amount, if any, the Downgrade Prepayment Amount on each Downgrade Payment Date, and such principal amounts of the Notes, together with interest accrued thereon to the prepayment dates and together with the Yield Maintenance Amount, if any, with respect thereto, shall become due on such prepayment dates. The remaining outstanding principal amount of the Notes, together with interest accrued thereon and together with the Yield Maintenance Amount, if any, with respect thereto, shall become due on the third anniversary of the first Downgrade Payment Date.
4B. Optional Prepayment With Yield-Maintenance Amount. The Notes shall be subject to prepayment, in whole or in part on the last day of any month (in multiples of $5,000,000 and integral multiplies of $1,000,000 in excess of $5,000,000), at the option of the Company, at 100% of the principal amount so prepaid plus interest accrued thereon to the prepayment date and together with the Yield-Maintenance Amount, if any, with respect thereto. Any partial prepayment of the Notes pursuant to this paragraph 4B shall be applied in satisfaction of required payments of principal under paragraph 4A(1) or 4A(2), as the case may be, in inverse order of their scheduled due dates.
4C. Notice of Optional Prepayment. The Company shall give the holder of each Note irrevocable written notice of any prepayment pursuant to paragraph 4B not less than 30 days prior to the prepayment date, specifying such prepayment date and the principal amount of the Notes, and of the Notes held by such holder, to be prepaid on such date and stating that such prepayment is to be made pursuant to paragraph 4B. Notice of prepayment having been given as aforesaid, the principal amount of the Notes specified in such notice, together with interest accrued thereon to the prepayment date and together with the Yield-Maintenance Amount, if any, with respect thereto, shall become due and payable on such prepayment date. The Company shall, on or before the day on which it gives written notice of any prepayment pursuant to paragraph 4B, give telephonic notice of the principal amount of the Notes to be prepaid and the prepayment date to each Significant Holder which shall have designated a recipient of such notices in the Purchaser Schedule attached hereto or by notice in writing to the Company.
4D. Partial Payments Pro Rata. Upon any partial prepayment of the Notes pursuant to paragraph 4A(1), 4A(2) or 4B, the principal amount so prepaid shall be allocated to all Notes at the time outstanding (including, for the purpose of this paragraph 4D only, all Notes prepaid or otherwise retired or purchased or otherwise acquired by the Company or any of its Subsidiaries or Affiliates other than by prepayment pursuant to paragraph 4A(1), 4A(2) or 4B) in proportion to the respective outstanding principal amounts thereof.
4E. Retirement of Notes. The Company shall not, and shall not permit any of its Subsidiaries or Affiliates to, prepay or otherwise retire in whole or in part prior to their stated final maturity (other than by prepayment pursuant to paragraph 4A(1), 4A(2) or 4B or upon acceleration of such final maturity pursuant to paragraph 7A), or purchase or otherwise acquire, directly or indirectly, Notes held by any holder unless the Company or such Subsidiary or such Affiliate shall have offered to prepay or otherwise retire or purchase or otherwise acquire, as the case may be, the same proportion of the aggregate principal amount of Notes held by each other holder of Notes at the time outstanding upon the same terms and conditions. Any Notes so prepaid or otherwise retired or purchased or otherwise acquired by the Company or any of its Subsidiaries or Affiliates shall not be deemed to be outstanding for any purpose under this Agreement, except as provided in paragraph 4D.
5. AFFIRMATIVE COVENANTS.
5A. Financial Statements. The Company covenants that it will deliver to each Significant Holder in quadruplicate:
(i) as soon as practicable and in any event within 60 days after the end of each quarterly period (other than the last quarterly period) in each fiscal year, consolidated statements of income and retained earnings of the Company and its Subsidiaries for the period from the beginning of the current fiscal year to the end of such quarterly period, and a consolidated balance sheet of the Company and its Subsidiaries as at the end of such quarterly period, setting forth in each case in comparative form figures for the corresponding period in the preceding fiscal year, all in reasonable detail and satisfactory in form to the Required Holder(s) and certified by an authorized financial officer of the Company, subject to changes resulting from year-end adjustments;
(ii) as soon as practicable and in any event within 135 days after the end of each fiscal year, (A) consolidated statements of income and cash flows of the Company and its Subsidiaries for such year, (B) a consolidated balance sheet of the Company and its Subsidiaries as at the end of such year, (C) consolidating and consolidated statements of income and cash flows and a consolidated statement of stockholders' earnings of Northeast Utilities and its subsidiaries for such year, and (D) a consolidating and consolidated balance sheet of Northeast Utilities and its subsidiaries as at the end of such year, setting forth in each case in comparative form corresponding consolidated figures from the preceding annual consolidated statements, in the case of the Company and its Subsidiaries, and the preceding annual audit, in the case of Northeast Utilities and its subsidiaries, all in reasonable detail and satisfactory in form to the Required Holder(s) (with respect to the financial statements for the Company and its Subsidiaries) and in conformance with the requirements of the Securities and Exchange Commission (with respect to the financial statements for Northeast Utilities and its subsidiaries), and, as to the consolidated statements of Northeast Utilities and its subsidiaries, reported on by independent public accountants of recognized national standing selected by the Company whose report shall be without limitation as to the scope of the audit and, as to the consolidated statements of the Company and its Subsidiaries, certified by an authorized financial officer of the Company;
(iii) promptly upon transmission thereof, copies of all such financial statements, proxy statements, notices and reports as it shall send to its public stockholders, if any, and copies of all registration statements (without exhibits) and all reports which it files with the Securities and Exchange Commission (or any governmental body or agency succeeding to the functions of the Securities and Exchange Commission);
(iv) promptly upon receipt thereof, a copy of each other report submitted to the Company or any Subsidiary by independent accountants in connection with any annual, interim or special audit made by them of the books of the Company or any Subsidiary;
(v) promptly upon transmission thereof by Northeast Utilities, copies of the Annual Reports on Form 10-K and Form U5S of Northeast Utilities filed with the Securities and Exchange Commission (or any governmental body or agency succeeding to the functions of the Securities and Exchange Commission) and such other reports, financial or other statements, notices or reports filed by Northeast Utilities pursuant to the Exchange Act as such Significant Holder shall request, filed with the Securities and Exchange Commission (or any governmental body or agency succeeding to the functions of the Securities and Exchange Commission);
(vi) promptly after becoming available, any of the following which is related to the Millstone Site:
(1) Nuclear Regulatory Commission ("NRC") Systematic Assessment of Licensee Performance Report,
(2) NRC Inspection Report or, at the Company's option, a summary thereof prepared by the Company,
(3) NRC Confirmatory Action Letter ("CAL"), and
(4) any other material report, notice from or other correspondence with or submissions to the NRC or any other governmental or regulatory agency; and
(vii) with reasonable promptness, such other financial data as such Significant Holder may reasonably request.
Together with each delivery of financial statements required by clauses (i) and (ii) above, the Company will deliver to each Significant Holder an Officer's Certificate stating that there exists no Event of Default or Default, or, if any Event of Default or Default exists, specifying the nature and period of existence thereof and what action the Company proposes to take with respect thereto. Together with each delivery of financial statements required by clause (ii) above, the Company will deliver to each Significant Holder a certificate of such accountants stating that, in making the audit necessary for their report on such financial statements, they have obtained no knowledge of any Event of Default or Default, or, if they have obtained knowledge of any Event of Default or Default, specifying the nature and period of existence thereof. Such accountants, however, shall not be liable to anyone by reason of their failure to obtain knowledge of any Event of Default or Default which would not be disclosed in the course of an audit conducted in accordance with generally accepted auditing standards. The Company also covenants that immediately after any Responsible Officer obtains knowledge of an Event of Default or Default, it will deliver to each Significant Holder an Officer's Certificate specifying the nature and period of existence thereof and what action the Company proposes to take with respect thereto.
5B. Information Required by Rule 144A. The Company covenants that it will, upon the request of the holder of any Note, provide such holder, and any qualified institutional buyer designated by such holder, such financial and other information as such holder may reasonably determine to be necessary in order to permit compliance with the information requirements of Rule 144A under the Securities Act in connection with the resale of Notes, except at such times as the Company is subject to the reporting requirements of section 13 or 15(d) of the Exchange Act. For the purpose of this paragraph 5B, the term "qualified institutional buyer" shall have the meaning specified in Rule 144A under the Securities Act.
5C. Inspection of Property. The Company covenants that it will permit any Person designated by any Significant Holder in writing, at such Significant Holder's expense, to visit and inspect any of the properties of the Company and its Subsidiaries, to examine the corporate books and financial records of the Company and its Subsidiaries and make copies thereof or extracts therefrom and to discuss the affairs, finances and accounts of any of such corporations with the principal officers of the Company and its independent public accountants, all at such reasonable times and as often as such Significant Holder may reasonably request.
5D. Conduct of Business and Maintenance of Existence. The Company covenants that it and its Subsidiaries shall (i) carry out and conduct its primary business in substantially the same manner and in substantially the same fields as such business is now carried on and conducted (it being understood that the Company will remain a wholly-owned subsidiary of Northeast Utilities whose activities shall be limited to acting as agent for CL&P, WMECO and the other co-owners of Units 1, 2 and 3 of the Millstone Nuclear Generating Station; provided, however, that the Company may also act as operator of any other nuclear generating unit in which Northeast Utilities or any subsidiary thereof owns an interest, directly or indirectly), (ii) subject to paragraph 6A(3) of this Agreement, preserve, renew and keep in full force and effect its corporate existence and its rights, licenses, privileges and franchises necessary or desirable in the normal conduct of its business (provided, however, that it shall not be required to preserve any such right, license, privileges or franchise if it shall determine in its sole discretion that the preservation thereof is no longer necessary, desirable or permissible in the operation of its business and it shall reasonably determine that the loss thereof is not (and could not reasonably be expected to be) disadvantageous in any material respect to you or any holder of any Note.
5E. Maintenance of Properties. With exception for ordinary wear and tear, loss by fire or other casualty or condemnation, the Company and its Subsidiaries will each cause all material properties used or useful in the conduct of its business to be maintained and kept in good condition, repair and working order, and cause to be made all necessary repairs, renewals, replacements, betterments and improvements thereof, all as in its reasonable judgment may be necessary so that the business carried on in connection therewith may be properly and advantageously conducted at all times; provided, however, that neither the Company nor any of its Subsidiaries shall be prevented from discontinuing the operation and maintenance of any such properties if such discontinuance is, in its reasonable judgment, desirable in the operation or maintenance of its business and is not disadvantageous in any material respect to you or any holder of any Note.
5F. Obligations and Taxes. The Company and its Subsidiaries will each pay when due all taxes, assessments, fees and other governmental charges (including, without limitation, real estate taxes, betterments, assessments, water rates and sewer charges) and all other proper claims, demands and liabilities (including, without limitation, claims or demands of materialmen, mechanics, carriers, warehousemen and landlords); provided, however, that neither the Company nor any of its Subsidiaries shall be required to pay any such tax, assessment, fee, charge, claim, demand or liability if the same is being contested and diligently pursued in good faith by appropriate proceedings and if the Company or such Subsidiary shall have set aside on its books, to the extent required by generally accepted accounting principles applied on a consistent basis, reserves reasonably deemed by it to be adequate with respect thereto; provided, further, that the Company or such Subsidiary will pay or cause to be paid in full, or will post a bond for the full amount of, any of such taxes, assessments, fees, charges, claims, demands and liabilities forthwith prior to the commencement of any proceeding to foreclose on any lien which secures any of such amounts and to which any of its property may be subject.
5G. Compliance with Laws and Other Covenants. The Company and its Subsidiaries will each comply in all respects with all laws, rules, ordinances, bylaws, codes, regulations and governmental orders (federal, state and local) having applicability to it or to the business or businesses at any time conducted by it (including, without limitation, ERISA and the rules and regulations thereunder), or relating to its property, the improvements thereon and/or occupancy or use thereof, except where the failure to comply with any provision of the foregoing does not and could not reasonably be expected to (a) have a material adverse effect on the business, operations, affairs, condition (financial or otherwise), properties, assets or prospects of the Company or the Company and its Subsidiaries taken as a whole, or (b) be disadvantageous in any material respect to you or any holder of any Note. The Company will comply in all material respects with all of its covenants in the Millstone Plant Agreement.
5H. Maintenance of Insurance. The Company covenants that it shall (i) maintain insurance in such amounts and with such deductibles and against such liabilities and hazards as customarily is maintained by other companies operating similar businesses, and (ii) upon a request by any holder of a Note, deliver to such holder a certificate of the insurer or the Company's independent insurance agent summarizing the details of such insurance in effect and stating the term of such insurance.
5I. Covenant to Secure Note Equally. The Company covenants that, if it or any Subsidiary shall create or assume any Lien upon any of its property or assets, whether now owned or hereafter acquired, securing any Debt of the Company or any Subsidiary, other than Liens permitted by the provisions of paragraph 6A (unless prior written consent to the creation or assumption thereof shall have been obtained pursuant to paragraph 11C), it will make or cause to be made effective provision whereby the Notes will be secured by such Lien equally and ratably with any and all other Debt thereby secured so long as any such other Debt shall be so secured.
6. NEGATIVE COVENANTS.
6A. Lien, Debt and Other Restrictions. The Company covenants that it shall not, and it shall not permit any Subsidiary to, directly or indirectly:
6A(1). Liens -- create, assume or suffer to exist any Lien upon any of its properties and assets, whether now owned or herewith acquired, except:
(i) Liens for taxes, assessments and other governmental charges not yet due or which (a) are being actively contested in good faith by appropriate proceedings and (b) for which reserves have been established in accordance with generally accepted accounting principles;
(ii) Statutory Liens of landlords and Liens of carriers, warehousemen, mechanics and materialmen (a) incurred in the ordinary course of business for sums not yet due, (b) the payment of which is not at the time required, (c) securing obligations which are not overdue for a period of more than 90 days or (d) securing obligations claimed to be due and which (i) are being actively contested in good faith by appropriate proceedings and (ii) for which reserves have been established in accordance with generally accepted accounting principles;
(iii) Liens (other than any Lien imposed by ERISA) incurred or deposits made in the ordinary course of business (a) in connection with workers' compensation, unemployment insurance and other types of social security, or (b) to secure (or to obtain letters of credit that secure) the performance of statutory obligations, surety and appeal bonds, bids, performance bonds, purchase, construction or sales contracts and other similar obligations, in each case not incurred or made in connection with the borrowing of money, the obtaining of advances or credit or the payment of the deferred purchase price of property;
(iv) Easements, rights-of-way, restrictions and other similar charges or encumbrances, in each case incidental to, and not interfering with, the ordinary conduct of the business of the Company;
(v) Liens resulting from Capitalized Lease Obligations, conditional sale agreements or other title retention agreements provided that the aggregate amount of Debt secured by such Liens is permitted by paragraph 6A(2);
(vi) Liens arising from prejudgment remedies imposed pursuant to Section 52-278c of the Connecticut General Statutes or a similar statute under the laws of another state, provided the Company contests the imposition of a prejudgment lien pursuant to Section 52-278d of the Connecticut General Statutes or such other similar statute and, in the event payment of any judgment rendered against the Company is not adequately secured by insurance, the Company has substituted a bond for the prejudgment remedy; and
(vii) Liens existing on the date hereof, which Liens are described on Schedule 6A(1)(v) hereto;
6A(2). Debt -- Create, incur, assume or suffer to exist any Debt or any Guarantee, except:
(i) Debt represented by the Notes;
(ii) Existing Debt of the Company which is described on Schedule 6A(2) hereto; and
(iii) Current Debt not in excess of the aggregate amount of Current Debt the Company is authorized by the Securities and Exchange Commission to create, incur or suffer to exist, provided such Current Debt is consistent with the Securities and Exchange Commission authorization therefor;
6A(3). Merger and Sale of Assets -- Merge or consolidate with any other corporation, sell, lease, transfer or otherwise dispose of all or substantially all of its assets, except that the Company or any Subsidiary may merge with or into another direct or indirect subsidiary of Northeast Utilities if (A) immediately before such merger and after giving effect thereto no Default or Event of Default shall exist, (B) the surviving corporation expressly assumes, by an agreement satisfactory in substance and form to the Required Holder(s) (which agreement may require in connection with such assumption the delivery of such opinions of counsel as the Required Holder(s) may reasonably request), the obligations of the Company under this Agreement, the Notes and the Millstone Plant Agreement, and (C) any authorizations, consents, approvals, exceptions or other actions by or notices to or filings with any court, administrative or governmental body or any other Person required for such merger or such assumption shall have been obtained and made; and (D) the surviving corporation shall, in the discretion of the Required Holder(s), be of a credit quality equivalent to the credit quality of the Company.
6A(4). Restricted Investments -- Make or permit to remain outstanding any loan or advance to, or own, purchase or acquire any stock, obligations or securities of, or any other interest in, or make any capital contribution to any Person, except for loans to the Northeast Utilities System Money Pool, provided that funds contributed to the Northeast Utilities System Money Pool by the Company or any Subsidiary are invested only in:
(i) short-term loans made to subsidiaries of Northeast Utilities participating in the Northeast Utilities System Money Pool, provided such short-term loans are within amounts and on terms and conditions approved by the Securities and Exchange Commission;
(ii) obligations issued or guaranteed by the United States of America;
(iii) obligations issued or guaranteed by any person controlled or supervised by and acting as an instrumentality of the United States of America pursuant to authority granted by the Congress of the United States;
(iv) obligations issued or guaranteed by any state or political subdivision thereof, provided that such obligations are rated for investment purposes at not less than "A" by Moody's Investors Service, Inc., or by Standard & Poor's Corporation;
(v) commercial paper rated not less than "P-1" by Moody's Investors Service, Inc., or not less than "A-1" by Standard & Poor's Corporation;
(vi) any other investment permitted under Rule 40(a)(1) of the Public Utility Holding Company Act of 1935, as amended.
6B. No Amendment of Millstone Plant Agreement -- The Company covenants that it will not terminate the Millstone Plant Agreement or amend, supplement, modify or waive any provision of the Millstone Plant Agreement without the prior written consent of the Required Holder(s).
7. EVENTS OF DEFAULT.
7A. Acceleration. If any of the following events shall occur and be continuing for any reason whatsoever (and whether such occurrence shall be voluntary or involuntary or come about or be effected by operation of law or otherwise):
(i) the Company defaults in the payment of any principal of or Yield-Maintenance Amount payable with respect to any Note when the same shall become due, either by the terms thereof or otherwise as herein provided; or
(ii) the Company defaults in the payment of any interest on any Note for more than 10 days after the date due; or
(iii) the Company, any Subsidiary, CL&P or WMECO defaults (whether as primary obligor or as guarantor or other surety) in any payment of principal of or interest on any other obligation for money borrowed (or any Capitalized Lease Obligation, any obligation under a conditional sale or other title retention agreement, any obligation issued or assumed as full or partial payment for property whether or not secured by a purchase money mortgage or any obligation under notes payable or drafts accepted representing extensions of credit) beyond any period of grace provided with respect thereto, or the Company, any Subsidiary, CL&P or WMECO fails to perform or observe any other agreement, term or condition contained in any agreement under which any such obligation is created (or if any other event thereunder or under any such agreement shall occur and be continuing) and the effect of such failure or other event is to cause, or to permit the holder or holders of such obligation (or a trustee on behalf of such holder or holders) to cause, such obligation to become due (or to be repurchased by the Company, any Subsidiary, CL&P or WMECO prior to any stated maturity), provided that the aggregate amount of all obligations as to which such a payment default shall occur and be continuing or such a failure or other event causing or permitting acceleration (or resale to the Company, any Subsidiary, CL&P or WMECO) shall occur and be continuing exceeds $15,000,000; or
(iv) any representation or warranty made by the Company herein, by CL&P or WMECO in the Inducement Letter or by the Company, CL&P or WMECO or any of its officers in any writing furnished in connection with or pursuant to this Agreement shall be false in any material respect on the date as of which made; or
(v) the Company fails to perform or observe any agreement contained in paragraph 6 or CL&P or WMECO fails to perform or observe any agreement contained in the Inducement Letter; or
(vi) the Company fails to perform or observe any other agreement, term or condition contained herein and such failure shall not be remedied within 30 days after any Responsible Officer obtains actual knowledge thereof; or
(vii) the Company, any Subsidiary, CL&P or WMECO makes an assignment for the benefit of creditors or is generally not paying its debts as such debts become due; or
(viii) any decree or order for relief in respect of the Company, any Subsidiary, CL&P or WMECO is entered under any bankruptcy, reorganization, compromise, arrangement, insolvency, readjustment of debt, dissolution or liquidation or similar law, whether now or hereafter in effect (herein called the "Bankruptcy Law"), of any jurisdiction; or
(ix) the Company, any Subsidiary, CL&P or WMECO petitions or applies to any tribunal for, or consents to, the appointment of, or taking possession by, a trustee, receiver, custodian, liquidator or similar official of the Company, any Subsidiary, CL&P or WMECO or of any substantial part of the assets of the Company, any Subsidiary, CL&P or WMECO or commences a voluntary case under the Bankruptcy Law of the United States or any proceedings (other than proceedings for the voluntary liquidation and dissolution of a Subsidiary) relating to the Company, any Subsidiary, CL&P or WMECO under the Bankruptcy Law of any other jurisdiction; or
(x) any such petition or application is filed, or any such proceedings are commenced, against the Company or any Subsidiary, CL&P or WMECO and the Company, such Subsidiary, CL&P or WMECO by any act indicates its approval thereof, consent thereto or acquiescence therein, or an order, judgment or decree is entered appointing any such trustee, receiver, custodian, liquidator or similar official, or approving the petition in any such proceedings, and such order, judgment or decree remains unstayed and in effect for more than 90 days; or
(xi) any order, judgment or decree is entered in any proceedings against the Company, CL&P or WMECO decreeing the dissolution of the Company and such order, judgment or decree remains unstayed and in effect for more than 90 days; or
(xii) any order, judgment or decree is entered in any proceedings against the Company, any Subsidiary, CL&P or WMECO decreeing a split-up of the Company, such Subsidiary, CL&P or WMECO which requires the divestiture of assets representing a substantial part, or the divestiture of the stock of a Subsidiary whose assets represent a substantial part, of the consolidated assets of the Company and its Subsidiaries or the consolidated assets of CL&P or WMECO, as the case may be (determined in accordance with generally accepted accounting principles) or which requires the divestiture of assets, or stock of a Subsidiary, which shall have contributed a substantial part of the consolidated net income of the Company and its Subsidiaries (determined in accordance with generally accepted accounting principles) for any of the three fiscal years then most recently ended, and such order, judgment or decree remains unstayed and in effect for more than 60 days; or
(xiii) a final judgment in an amount in excess of $15,000,000 is rendered against the Company, any Subsidiary, CL&P or WMECO and, within 60 days after entry thereof, such judgment is not discharged or execution thereof stayed pending appeal, or within 60 days after the expiration of any such stay, such judgment is not discharged; or
(xiv) the Company or any ERISA Affiliate, in its capacity as an employer under a Multiemployer Plan, makes a complete or partial withdrawal from such Multiemployer Plan resulting in the incurrence by such withdrawing employer of a withdrawal liability which is or would be materially adverse to the business, condition (financial or otherwise) or operations of the Company; or
(xv) the Millstone Plant Agreement, or any provision thereof which would adversely affect the rights of the Company under Section 3(b) thereof, or the Inducement Letter, shall at any time be terminated or shall cease to be valid and binding on any party thereto, or shall be declared to be null or void, or the validity or enforceability thereof shall be contested by any party thereto, or a proceeding shall be commenced by any governmental agency or authority having jurisdiction over any party thereto seeking to establish the invalidity or unenforceability thereof, or any party thereto shall deny that such party has no further liability or obligation thereunder, or any party thereto shall default in the performance of any provision thereof;
then (a) if such event is an Event of Default specified in clause (i) or
(ii) of this paragraph 7A, the holder of any Note (other than the Company
or any of its Subsidiaries or Affiliates) may at its option, by notice in
writing to the Company, declare such Note to be, and such Note shall
thereupon be and become, immediately due and payable at par together with
interest accrued thereon, without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Company, (b) if
such event is an Event of Default specified in clause (viii), (ix) or (x)
of this paragraph 7A with respect to the Company, all of the Notes at the
time outstanding shall automatically become immediately due and payable at
par together with interest accrued thereon, without presentment, demand,
protest or notice of any kind, all of which are hereby waived by the
Company, and (c) if such event is not an Event of Default specified in
clause (viii), (ix) or (x) of this paragraph 7A with respect to the
Company, the Required Holder(s) may at its or their option, by notice in
writing to the Company, declare all of the Notes to be, and all of the
Notes shall thereupon be and become, immediately due and payable together
with interest accrued thereon and together with the Yield-Maintenance
Amount, if any, with respect to each Note, without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Company, provided that the Yield-Maintenance Amount, if any, with respect
to each Note shall be due and payable upon such declaration only if (x)
such event is an Event of Default specified in any of clauses (i) to (vi),
inclusive, or clause (xv), of this paragraph 7A, (y) the Required Holder(s)
shall have given to the Company, at least 10 Business Days before such
declaration, written notice stating its or their intention so to declare
the Notes to be immediately due and payable and identifying one or more
such Events of Default whose occurrence on or before the date of such
notice permits such declaration and (z) one or more of the Events of
Default so identified shall be continuing at the time of such declaration.
7B. Rescission of Acceleration. At any time after any or all of
the Notes shall have been declared immediately due and payable pursuant to
paragraph 7A, the Required Holder(s) may, by notice in writing to the
Company, rescind and annul such declaration and its consequences if (i) the
Company shall have paid all overdue interest on the Notes, the principal of
and Yield-Maintenance Amount, if any, payable with respect to any Notes
which have become due otherwise than by reason of such declaration, and
interest on such overdue interest and overdue principal and
Yield-Maintenance Amount at the rate specified in the Notes, (ii) the
Company shall not have paid any amounts which have become due solely by
reason of such declaration, (iii) all Events of Default and Defaults, other
than non-payment of amounts which have become due solely by reason of such
declaration, shall have been cured or waived pursuant to paragraph 11C, and
(iv) no judgment or decree shall have been entered for the payment of any
amounts due pursuant to the Notes or this Agreement. No such rescission or
annulment shall extend to or affect any subsequent Event of Default or
Default or impair any right arising therefrom.
7C. Notice of Acceleration or Rescission. Whenever any Note shall be declared immediately due and payable pursuant to paragraph 7A or any such declaration shall be rescinded and annulled pursuant to paragraph 7B, the Company shall forthwith give written notice thereof to the holder of each Note at the time outstanding.
7D. Other Remedies. If any Event of Default or Default shall occur and be continuing, the holder of any Note may proceed to protect and enforce its rights under this Agreement and such Note by exercising such remedies as are available to such holder in respect thereof under applicable law, either by suit in equity or by action at law, or both, whether for specific performance of any covenant or other agreement contained in this Agreement or in aid of the exercise of any power granted in this Agreement. No remedy conferred in this Agreement upon the holder of any Note is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to every other remedy conferred herein or now or hereafter existing at law or in equity or by statute or otherwise.
8. REPRESENTATIONS, COVENANTS AND WARRANTIES. The Company represents, covenants and warrants as follows:
8A. Organization. The Company is a corporation duly organized and existing in good standing under the laws of the State of Connecticut. The Company has no Subsidiaries. The Company is duly qualified and authorized to transact business as a foreign corporation and is in good standing in every jurisdiction in which the nature of the business conducted by it or the ownership of its properties or assets makes such qualification necessary, except where the failure to be in good standing or to be so qualified or authorized would not have a material adverse effect on the business, condition (financial or otherwise) or operations of the Company. All of the outstanding shares of capital stock of the Company have been duly authorized and validly issued, are fully paid and nonassessable and are owned beneficially and of record by Northeast Utilities free and clear of any Lien. There are no outstanding rights, options, warrants, or agreements for the purchase from, or sale or issuance by, the Company of any of its capital stock or any securities convertible into or exchangeable for any of its capital stock or any such rights, options, warrants or agreements.
8B. Power and Authority. The Company has all requisite corporate power to conduct its business as currently conducted and as currently proposed to be conducted. The Company has all requisite corporate power to execute, deliver and perform its obligations under this Agreement, the Notes and the Millstone Plant Agreement. The execution, delivery and performance by the Company of each of this Agreement, the Notes and the Millstone Plant Agreement have been duly authorized by all requisite corporate action on the part of the Company. The Company has duly executed and delivered each of this Agreement, the Notes and the Millstone Plant Agreement, and each of this Agreement, the Notes and the Millstone Plant Agreement constitutes the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms.
8C. Financial Statements. The Company has furnished you with the following financial statements, identified by a principal financial officer of the Company: (i) a balance sheet of the Company as at December 31 in each of the years 1991 and 1992, inclusive, and statements of income and cash flows of the Company for each such year, all certified by the Chief Financial Officer of the Company; and (ii) a balance sheet of the Company as at March 31 and June 30 in each of the years 1991 and 1992 and statements of income and cash flows for the three-month and six-month periods ended on such dates, prepared by the Company. Such financial statements (including any related schedules and/or notes) are true and correct in all material respects (subject, as to interim statements, to changes resulting from audits and year-end adjustments), have been prepared in accordance with generally accepted accounting principles consistently followed throughout the periods involved and show all liabilities, direct and contingent, of the Company required to be shown in accordance with such principles. The balance sheets fairly present the condition of the Company as at the dates thereof, and the statements of income and cash flows fairly present the results of the operations of the Company and its cash flows for the periods indicated. There has been no material adverse change in the business, condition (financial or otherwise) or operations of the Company since December 31, 1992.
8D. Actions Pending. There is no action, suit, investigation or proceeding pending or, to the knowledge of the Company, threatened against the Company, or any properties or rights of the Company, by or before any court, arbitrator or administrative or governmental body which is likely to result in any material adverse change in the business, condition (financial or otherwise) or operations of the Company.
8E. Outstanding Debt. The Company does not have outstanding any Debt except as set forth on Schedule 6A(2) attached hereto. There exists no default under the provisions of any instrument evidencing such Debt or of any agreement relating thereto.
8F. Title to Properties. The Company has good and indefeasible title to its real properties (other than properties which it leases) and good title to all of its other properties and assets, including the properties and assets reflected in the balance sheet as at December 31, 1992 referred to in paragraph 8C (other than properties and assets disposed of in the ordinary course of business), subject to no Lien of any kind except Liens permitted by paragraph 6A. All leases necessary in any material respect for the conduct of the business of the Company are valid and subsisting and are in full force and effect.
8G. Taxes. The Company has filed all federal, state and other income tax returns which, to the knowledge of the officers of the Company, are required to be filed, and has paid all taxes as shown on such returns and on all assessments received by it to the extent that such taxes have become due, except such taxes as are being contested in good faith by appropriate proceedings for which adequate reserves have been established in accordance with generally accepted accounting principles.
8H. Conflicting Agreements and Other Matters. The Company is not a party to any contract or agreement or subject to any charter or other corporate restriction which materially and adversely affects its business, property or assets, or financial condition. Neither the execution nor delivery of this Agreement, the Notes or the Millstone Plant Agreement, nor the offering, issuance and sale of the Notes, nor fulfillment of nor compliance with the terms and provisions hereof, of the Notes or the Millstone Plant Agreement will conflict with, or result in a breach of the terms, conditions or provisions of, or constitute a default under, or result in any violation of, or result in the creation of any Lien upon any of the properties or assets of the Company pursuant to, the charter or by-laws of the Company, any award of any arbitrator or any agreement (including any agreement with stockholders), instrument, order, judgment, decree, statute, law, rule or regulation to which the Company is subject. The Company is not a party to, or otherwise subject to any provision contained in, any instrument evidencing Indebtedness of the Company, any agreement relating thereto or any other contract or agreement (including its charter) which limits the amount of, or otherwise imposes restrictions on the incurring of, Debt of the Company of the type to be evidenced by the Notes except as set forth in the agreements listed in Schedule 8H attached hereto.
8I. Offering of Notes. Neither the Company nor any agent acting on its behalf has, directly or indirectly, offered the Notes or any similar security of the Company for sale to, or solicited any offers to buy the Notes or any similar security of the Company from, or otherwise approached or negotiated with respect thereto with, any Person other than institutional investors, and neither the Company nor any agent acting on its behalf has taken or will take any action which would subject the issuance or sale of the Notes to the provisions of section 5 of the Securities Act or to the provisions of any securities or Blue Sky law of any applicable jurisdiction.
8J. Use of Proceeds. The Company does not own or have any
present intention of acquiring any "margin stock" as defined in Regulation
G (12 CFR Part 207) of the Board of Governors of the Federal Reserve System
(herein called "margin stock"). The proceeds of sale of the Notes will be
used (i) to finance the construction by the Company on behalf of CL&P and
WMECO of Building 475 located on the Millstone Site, (ii) to repay
indebtedness incurred by the Company in connection with such construction,
(iii) to pay certain costs associated with the transactions contemplated by
this Agreement, and (iv) in the event a balance of the proceeds of the
Notes remains unspent after application thereof for the purposes set forth
in clauses (i) through (iii) hereof and to the extent permitted by the
regulatory orders referred to in paragraph 8L(i) hereof, to apply the
balance of such proceeds for the Company's general corporate purposes.
None of such proceeds will be used, directly or indirectly, for the
purpose, whether immediate, incidental or ultimate, of purchasing or
carrying any margin stock or for the purpose of maintaining, reducing or
retiring any Indebtedness which was originally incurred to purchase or
carry any stock that is currently a margin stock or for any other purpose
which might constitute this transaction a "purpose credit" within the
meaning of such Regulation G. Neither the Company nor any agent acting on
its behalf has taken or will take any action which might cause this
Agreement or the Notes to violate Regulation G, Regulation T or any other
regulation of the Board of Governors of the Federal Reserve System or to
violate the Exchange Act, in each case as in effect now or as the same may
hereafter be in effect.
8K. ERISA. No accumulated funding deficiency (as defined in section 302 of ERISA and section 412 of the Code), whether or not waived, exists with respect to any Plan (other than a Multiemployer Plan). No liability to the Pension Benefit Guaranty Corporation has been or is expected by the Company or any ERISA Affiliate to be incurred with respect to any Plan (other than a Multiemployer Plan) by the Company or any ERISA Affiliate which is or would be materially adverse to the business, condition (financial or otherwise) or operations of the Company. Neither the Company nor any ERISA Affiliate has incurred or presently expects to incur any withdrawal liability under Title IV of ERISA with respect to any Multiemployer Plan which is or would be materially adverse to the business, condition (financial or otherwise) or operations of the Company. The execution and delivery of this Agreement and the issuance and sale of the Notes will be exempt from, or will not involve any transaction which is subject to, the prohibitions of section 406 of ERISA and will not involve any transaction in connection with which a penalty could be imposed under section 502(i) of ERISA or a tax could be imposed pursuant to section 4975 of the Code. The representation by the Company in the next preceding sentence is made in reliance upon and subject to the accuracy of your representation in paragraph 9B.
8L. Governmental and Other Third Party Consent. Neither the nature of the Company, nor any of its businesses or properties, nor any relationship between the Company and any other Person, nor any circumstance in connection with the offering, issuance, sale or delivery of the Notes is such as to require any authorization, consent, approval, exemption or other action by or notice to or filing with any court or administrative or governmental body (other than routine filings after the date of funding with the Securities and Exchange Commission and/or state Blue Sky authorities) in connection with the execution and delivery of this Agreement or the Millstone Plant Agreement, the offering, issuance, sale, execution or delivery of the Notes or fulfillment of or compliance with the terms and provisions hereof, of the Millstone Plant Agreement, of the Inducement Letter or of the Notes, other than (i) the order of the Securities and Exchange Commission dated December 16, 1993 under the Public Utility Holding Company Act of 1935, as amended, and the order of the CDPUC dated December 1, 1993 under Section 16-43 of the Connecticut General Statutes, authorizing the execution and delivery of this Agreement and the execution, sale, delivery and issuance of the Notes, each of which orders has been obtained, is in full force and effect, has not been stayed, suspended, modified, vacated or held invalid, is not being contested and with respect to which no petition for rehearing, stay or suspension or appeal or review has been filed, and (ii) the order of the Securities and Exchange Commission dated September 24, 1985 under the Public Utility Holding Company Act of 1935, as amended, and the order of the CDPUC dated September 17, 1985, authorizing the execution, delivery and performance of the Millstone Plant Agreement, each of which orders has been obtained, is final and in full force and effect, has not been stayed, suspended, modified, vacated or held invalid, is not being contested and is not subject to petition for rehearing, stay suspension or appeal or review, and the time period in which a petition for rehearing, stay or suspension or an application for appeal or review of either such order must be filed has expired. The Company has delivered to you true and complete copies of each such order.
8M. Environmental Compliance. The Company and all of its properties and facilities are in compliance in all respects with and to its best knowledge have complied at all times and in all respects with all federal, state, local and regional statutes, laws, ordinances and judicial or administrative orders, judgments, rulings and regulations relating to protection of the environment except, in any such case, where failure to comply would not result in a material adverse effect on the business, condition (financial or otherwise) or operations of the Company.
8N. Disclosure. Neither this Agreement nor any other document, certificate or statement furnished to you by or on behalf of the Company, CL&P, WMECO, Northeast Utilities or Northeast Utilities Service Company in connection herewith contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein and therein not misleading. There is no fact peculiar to the Company, CL&P or WMECO which materially adversely affects or in the future may (so far as the Company can now foresee) materially adversely affect the business, property or assets, or financial condition of the Company, CL&P or WMECO and which has not been set forth in this Agreement or in the other documents, certificates and statements furnished to you by or on behalf of the Company, CL&P or WMECO prior to the date hereof in connection with the transactions contemplated hereby.
8O. Permits and Other Operating Rights. The Company has all such valid and sufficient franchises, licenses, permits, operating rights, certificates of convenience and necessity, other authorizations from federal, state, regional, municipal and other local regulatory bodies or administrative agencies or other governmental bodies having jurisdiction over the Company or any of the Company's properties, easements and rights-of-way as are necessary for the ownership, operation and maintenance of its business and properties, subject to exceptions and deficiencies which do not materially and adversely affect its business and operations considered as a whole or any material part thereof, and such franchises, licenses, permits, operating rights, certificates of convenience and necessity, other authorizations from federal, state, regional, municipal and other local regulatory bodies or administrative agencies or other governmental bodies having jurisdiction over the Company or any of the Company's properties, easements and rights-of-way are free from burdensome restrictions or conditions of an unusual character in the utility business and are free from restrictions or conditions materially adverse to the business or operations of the Company, and the Company is not in violation thereof in any material respect.
8P. Millstone Plant Agreement. The Company has delivered to each of you prior to the date hereof a true, correct and complete copy of the Millstone Plant Agreement, as in effect on the date hereof, which has not been amended or otherwise modified and no waiver has been given with respect thereto. The Millstone Plant Agreement has been duly authorized, executed and delivered by, and is the legal, valid and binding obligation of, each party thereto, and is in full force and effect. No party to the Millstone Plant Agreement is in default thereunder, nor is there any claim of such default.
8Q. Regulatory Status of Company. The Company is not an "investment company" or a company "controlled" by an "investment company," within the meaning of the Investment Company Act of 1940, as amended. The Company is a "subsidiary company" of a "holding company" within the meaning of the Public Utility Holding Company Act of 1935, as amended, which holding company is registered as a "public utility holding company" under such Act. The Company is a "public service company" under Connecticut law which is subject to the jurisdiction of the CDPUC. The Company is not a "public utility" or a "public service company" under the law of any state, other than the State of Connecticut, or subject to the jurisdiction of any commission or regulatory authority or Person in any state, other than the CDPUC. Solely by purchasing the Notes you (i) will not be (a) a "public utility, a "holding company" or an "affiliate" of a "holding company" or a "subsidiary company" of a "holding company" within the meaning of the Public Utility Holding Company Act of 1935, as amended, (b) a " public utility" within the meaning of the Federal Power Act, as amended, or (c) a "public service company" under Connecticut law or a "public utility" or a "public service company" under the law of any other state or (ii) subject to the jurisdiction of the Federal Energy Regulatory Commission, the CDPUC or any other commission or Person in any other state.
2. REPRESENTATIONS OF THE PURCHASER. You represent as follows:
9A. Nature of Purchase. You are not acquiring the Notes to be purchased by you hereunder with a view to or for sale in connection with any distribution thereof within the meaning of the Securities Act, provided that the disposition of your property shall at all times be and remain within your control.
9B. Source of Funds. No part of the funds being used by you to pay the purchase price of the Notes being purchased by you hereunder constitutes assets allocated to any separate account maintained by you. For the purpose of this paragraph 9B, the term "separate account" shall have the meaning specified in section 3 of ERISA.
10. DEFINITIONS. For the purpose of this Agreement, the terms defined in the introductory sentence and in paragraphs 1 and 2 shall have the respective meanings specified therein, and the following terms shall have the meanings specified with respect thereto below:
10A. Yield-Maintenance Terms.
"Business Day" shall mean any day other than a Saturday, a Sunday or a day on which commercial banks in New York City are required or authorized to be closed.
"Called Principal" shall mean, with respect to any Note, the principal of such Note that is to be prepaid pursuant to paragraph 4A(2) or 4B or is declared to be immediately due and payable pursuant to paragraph 7A, as the context requires.
"Discounted Value" shall mean, with respect to the Called Principal of any Note, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates under paragraph 4A(1) (determined by assuming, if a Downgrade Event has occurred, that the Company is still required to make the required prepayments under paragraph 4A(1) and any prepayments under paragraph 4A(2) or 4B are applied to required payments under paragraph 4A(1) in the inverse order of their maturity) to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount factor (applied on the same periodic basis as that on which interest on the Notes is payable) equal to the Reinvestment Yield with respect to such Called Principal.
"Reinvestment Yield" shall mean, with respect to the Called
Principal of any Note, the yield to maturity implied by (i) the yields
reported, as of 10:00 a.m. (New York City time) on the Business Day next
preceding the Settlement Date with respect to such Called Principal, on the
display designated as "Page 500" on the Telerate Service (or such other
display as may replace Page 500 on the Telerate Service) for actively
traded U.S. Treasury securities having a maturity equal to the Remaining
Average Life of such Called Principal as of such Settlement Date, or if
such yields shall not be reported as of such time or the yields reported as
of such time shall not be ascertainable, (ii) the Treasury Constant
Maturity Series yields reported, for the latest day for which such yields
shall have been so reported as of the Business Day next preceding the
Settlement Date with respect to such Called Principal, in Federal Reserve
Statistical Release H.15 (519) (or any comparable successor publication)
for actively traded U.S. Treasury securities having a constant maturity
equal to the Remaining Average Life of such Called Principal as of such
Settlement Date. Such implied yield shall be determined, if necessary, by
(a) converting U.S. Treasury bill quotations to bond-equivalent yields in
accordance with accepted financial practice and (b) interpolating linearly
between yields reported for various maturities.
"Remaining Average Life" shall mean, with respect to the Called
Principal of any Note, the number of years (calculated to the nearest
one-twelfth year) obtained by dividing (i) such Called Principal into (ii)
the sum of the products obtained by multiplying (a) each Remaining
Scheduled Payment of such Called Principal (but not of interest thereon) by
(b) the number of years (calculated to the nearest one-twelfth year) which
will elapse between the Settlement Date with respect to such Called
Principal and the scheduled due date under paragraph 4A(1) (determined by
assuming, if a Downgrade Event has occurred, that the Company is still
required to make the required prepayments under paragraph 4A(1) and any
prepayments under paragraph 4A(2) or 4B are applied to required payments
under paragraph 4A(1) in the inverse order of their maturity) of such
Remaining Scheduled Payment.
"Remaining Scheduled Payments" shall mean, with respect to the Called Principal of any Note, all payments of such Called Principal and interest thereon that would be due on or after the Settlement Date with respect to such Called Principal under paragraph 4A(1) (determined by assuming, if a Downgrade Event has occurred, that the Company is still required to make the required prepayments under paragraph 4A(1) and any prepayments under paragraph 4A(2) or 4B are applied to required payments under paragraph 4A(1) in the inverse order of their maturity) if no payment of such Called Principal were made prior to its scheduled due date under paragraph 4A(1).
"Settlement Date" shall mean, with respect to the Called Principal of any Note, the date on which such Called Principal is to be prepaid pursuant to paragraph 4A(2) or 4B or is declared to be immediately due and payable pursuant to paragraph 7A, as the context requires.
"Yield-Maintenance Amount" shall mean, with respect to any Note, an amount equal to the excess, if any, of the Discounted Value of the Called Principal of such Note over the sum of (i) such Called Principal plus (ii) interest accrued thereon as of (including interest due on) the Settlement Date with respect to such Called Principal. The Yield-Maintenance Amount shall in no event be less than zero.
10B. Other Terms.
"Affiliate" shall mean any Person directly or indirectly controlling, controlled by, or under direct or indirect common control with, the Company, except a Subsidiary. A Person shall be deemed to control a corporation if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such corporation, whether through the ownership of voting securities, by contract or otherwise.
"Bankruptcy Law" shall have the meaning specified in clause
(viii) of paragraph 7A.
"Capitalized Lease Obligation" shall mean any rental obligation which, under generally accepted accounting principles, would be required to be capitalized on the books of the Company or any Subsidiary, CL&P or WMECO, taken at the amount thereof accounted for as indebtedness (net of interest expense) in accordance with such principles.
"CDPUC" shall mean the Connecticut Department of Public Utility Control.
"CL&P" shall mean The Connecticut Light and Power Company, a
Connecticut corporation, and its successors and assigns.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Current Debt" shall mean, with respect to any Person, all Indebtedness of such Person for borrowed money which by its terms or by the terms of any instrument or agreement relating thereto matures on demand or within one year from the date of the creation thereof and is not directly or indirectly renewable or extendible at the option of the debtor to a date more than one year from the date of the creation thereof, provided that Indebtedness for borrowed money outstanding under a revolving credit or similar agreement which obligates the lender or lenders to extend credit over a period of more than one year shall constitute Funded Debt and not Current Debt, even though such Indebtedness by its terms matures on demand or within one year from the date of the creation thereof.
"Debt" shall mean Current Debt and Funded Debt.
"Downgrade Date" shall mean the first day upon which a Downgrade Event occurs.
"Downgrade Event" shall mean either (a) the rating by Moody's Investors Service, Inc. (or any successor thereto) of any long-term bonds of CL&P or any long-term bonds of WMECO at less than "Baa3", or (b) the rating by Standard & Poor's Corporation (or any successor thereto) of any long-term bonds of CL&P or any long-term bonds of WMECO at less than "BBB-".
"Downgrade Payment Date" shall mean each of (i) the 10th day after the Downgrade Date, and (ii) the first and second anniversaries of the date specified in clause (i).
"Downgrade Prepayment Amount" shall mean one-fourth of the aggregate principal of the Notes outstanding on the Downgrade Date.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended.
"ERISA Affiliate" shall mean any corporation which is a member of the same controlled group of corporations as the Company within the meaning of section 414(b) of the Code, or any trade or business which is under common control with the Company within the meaning of section 414(c) of the Code.
"Event of Default" shall mean any of the events specified in paragraph 7A, provided that there has been satisfied any requirement in connection with such event for the giving of notice, or the lapse of time, or the happening of any further condition, event or act, and "Default" shall mean any of such events, whether or not any such requirement has been satisfied.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Funded Debt" shall mean, with respect to any Person, all Indebtedness of such Person which by its terms or by the terms of any instrument or agreement relating thereto matures, or which is otherwise payable or unpaid, more than one year from, or is directly or indirectly renewable or extendible at the option of the debtor to a date more than one year (including an option of the debtor under a revolving credit or similar agreement obligating the lender or lenders to extend credit over a period of more than one year) from, the date of the creation thereof.
"Guarantee" shall mean, with respect to any Person, any direct or indirect liability, contingent or otherwise, of such Person with respect to any indebtedness, lease, dividend or other obligation of another, including, without limitation, any such obligation directly or indirectly guaranteed, endorsed (otherwise than for collection or deposit in the ordinary course of business) or discounted or sold with recourse by such Person, or in respect of which such Person is otherwise directly or indirectly liable, including, without limitation, any such obligation in effect guaranteed by such Person through any agreement (contingent or otherwise) to purchase, repurchase or otherwise acquire such obligation or any security therefor, or to provide funds for the payment or discharge of such obligation (whether in the form of loans, advances, stock purchases, capital contributions or otherwise), or to maintain the solvency or any balance sheet or other financial condition of the obligor of such obligation, or to make payment for any products, materials or supplies or for any transportation or services regardless of the non-delivery or non-furnishing thereof, in any such case if the purpose or intent of such agreement is to provide assurance that such obligation will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such obligation will be protected against loss in respect thereof. The amount of any Guarantee shall be equal to the outstanding principal amount of the obligation guaranteed or such lesser amount to which the maximum exposure of the guarantor shall have been specifically limited.
"Indebtedness" shall mean, with respect to any Person, without duplication, (i) all items (excluding items of contingency reserves or of reserves for deferred income taxes) which in accordance with generally accepted accounting principles would be included in determining total liabilities as shown on the liability side of a balance sheet of such Person as of the date on which Indebtedness is to be determined, (ii) all indebtedness secured by any Lien on any property or asset owned or held by such Person subject thereto, whether or not the indebtedness secured thereby shall have been assumed, and (iii) all indebtedness of others with respect to which such Person has become liable by way of a Guarantee.
"Inducement Letter" shall have the meaning specified in paragraph 3I.
"Lien" shall mean any mortgage, pledge, security interest, encumbrance, lien (statutory or otherwise) or charge of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, any lease in the nature thereof, and the filing of or agreement to give any financing statement under the Uniform Commercial Code of any jurisdiction) or any other type of preferential arrangement for the purpose, or having the effect, of protecting a creditor against loss or securing the payment or performance of an obligation.
"Millstone Plant Agreement" shall mean the Amended and Restated
Plant Agreement, dated as of December 1, 1984, among the Company, CL&P and
WMECO.
"Millstone Site" shall mean the approximately 500-acre site located in Waterford, Connecticut containing the nuclear generating units and appurtenant equipment and facilities operated by Borrower on behalf of, among others, CL&P and WMECO pursuant to the Millstone Plant Agreement.
"Multiemployer Plan" shall mean any Plan which is a "multiemployer plan" (as such term is defined in section 4001(a)(3) of ERISA).
"Northeast Utilities" shall mean Northeast Utilities, a Massachusetts Voluntary Association, and its successors and assigns.
"Northeast Utilities System Money Pool" shall mean the money pool among Northeast Utilities, CL&P, WMECO, Public Service Company of New Hampshire, North Atlantic Energy Corporation, Holyoke Water Power Company, the Company, The Rocky River Realty Company, The Quinnehtuk Company and HEC Inc. approved by the Securities and Exchange Commission in Release No. 35-25710. A copy of such approval and the application therefor is attached hereto as Schedule 10B(2).
"Officer's Certificate" shall mean a certificate signed in the name of the Company by its President, one of its Vice Presidents, its Treasurer or one of its Assistant Treasurers.
"Person" shall mean and include an individual, a partnership, a joint venture, a corporation, a trust, an unincorporated organization and a government or any department or agency thereof.
"Plan" shall mean any "employee pension benefit plan" (as such term is defined in section 3 of ERISA) which is or has been established or maintained, or to which contributions are or have been made, by the Company or any ERISA Affiliate.
"Responsible Officer" shall mean the chief executive officer, chief operating officer, if any, chief financial officer, chief accounting officer or assistant treasurer for finance of the Company or any other officer of the Company involved principally in its financial administration or its controllership function.
"Required Holder(s)" shall mean the holder or holders of at least 66-2/3% of the aggregate principal amount of the Notes from time to time outstanding.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Significant Holder" shall mean (i) you, so long as you shall hold (or be committed under this Agreement to purchase) any Note, or (ii) any other holder of at least 5% of the aggregate principal amount of the Notes at any time outstanding.
"Subsidiary" shall mean any corporation organized under the laws of any state of the United States, Canada, or any province of Canada, which conducts the major portion of its business in and makes the major portion of its sales to Persons located in the United States or Canada, and at least 51% of the total combined voting power of all classes of Voting Stock of which shall, at the time as of which any determination is being made, be owned by the Company either directly or through Subsidiaries.
"Transferee" shall mean any direct or indirect transferee of all or any part of any Note purchased by you under this Agreement.
"Voting Stock" shall mean, with respect to any corporation, any shares of stock of such corporation whose holders are entitled under ordinary circumstances to vote for the election of directors of such corporation (irrespective of whether at the time stock of any other class or classes shall have or might have voting power by reason of the happening of any contingency).
"WMECO" shall mean Western Massachusetts Electric Company, a Massachusetts corporation, and its successors and assigns.
10C. Accounting Principles, Terms and Determinations. All references in this Agreement to "generally accepted accounting principles" shall be deemed to refer to generally accepted accounting principles in effect in the United States at the time of application thereof. Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all determinations with respect to accounting matters hereunder shall be made, and all unaudited financial statements and certificates and reports as to financial matters required to be furnished hereunder shall be prepared, in accordance with generally accepted accounting principles, applied on a basis consistent with the most recent audited consolidated financial statements of the Company and its Subsidiaries delivered pursuant to clause (ii) of paragraph 5A or, if no such statements have been so delivered, the most recent financial statements referred to in clause (i) of paragraph 8C.
11. MISCELLANEOUS.
11A. Note Payments. The Company agrees that, so long as you shall hold any Note, it will make payments of principal of, interest on and any Yield-Maintenance Amount payable with respect to such Note, delayed delivery fees, cancellation fee or commitment fee which comply with the terms of this Agreement, by wire transfer of immediately available funds for credit (not later than 12:00 noon, New York City time, on the date due) to your account or accounts as specified in the Purchaser Schedule attached hereto, or such other account or accounts in the United States as you may designate in writing, notwithstanding any contrary provision herein or in any Note with respect to the place of payment. Interest on the Notes and the commitment fee shall be payable based on actual days outstanding and a 360-day year. You agree that, before disposing of any Note, you will make a notation thereon (or on a schedule attached thereto) of all principal payments previously made thereon and of the date to which interest thereon has been paid. The Company agrees to afford the benefits of this paragraph 11A to any Transferee which shall have made the same agreement as you have made in this paragraph 11A.
11B. Expenses. The Company agrees, whether or not the transactions contemplated hereby shall be consummated, to pay, and save you and any Transferee harmless against liability for the payment of, all out-of-pocket expenses arising in connection with such transactions, including (i) all document production and duplication charges and the fees and expenses of any special counsel engaged by you or such Transferee in connection with this Agreement or the Inducement Letter, the transactions contemplated hereby and any subsequent proposed modification of, or proposed consent under, this Agreement, whether or not such proposed modification shall be effected or proposed consent granted, provided that the amount payable with respect to the fees, charges and disbursements of your special counsel in connection with the preparation, execution and delivery of this Agreement and the Inducement Letter shall not exceed $50,000 and (ii) the costs and expenses, including attorneys' fees, incurred by you or such Transferee in enforcing (or determining whether or how to enforce) any rights under this Agreement, the Inducement Letter or the Notes or in responding to any subpoena or other legal process or informal investigative demand issued in connection with this Agreement or the transactions contemplated hereby or by reason of your or such Transferee's having acquired any Note, including without limitation costs and expenses incurred in any bankruptcy case. The obligations of the Company under this paragraph 11B shall survive the transfer of any Note or portion thereof or interest therein by you or any Transferee and the payment of any Note.
11C. Consent to Amendments. This Agreement may be amended, and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, if the Company shall obtain the written consent to such amendment, action or omission to act, of the Required Holder(s) except that, without the written consent of the holder or holders of all Notes at the time outstanding, no amendment to this Agreement shall change the maturity of any Note, or change the principal of, or the rate or time of payment of interest on or any Yield-Maintenance Amount payable with respect to any Note, or affect the time, amount or allocation of any prepayments, or change the proportion of the principal amount of the Notes required with respect to any consent, amendment, waiver or declaration. Each holder of any Note at the time or thereafter outstanding shall be bound by any consent authorized by this paragraph 11C, whether or not such Note shall have been marked to indicate such consent, but any Notes issued thereafter may bear a notation referring to any such consent. No course of dealing between the Company and the holder of any Note nor any delay in exercising any rights hereunder or under any Note shall operate as a waiver of any rights of any holder of such Note. As used herein and in the Notes, the term "this Agreement" and references thereto shall mean this Agreement as it may from time to time be amended or supplemented.
11D. Form, Registration, Transfer and Exchange of Notes; Lost Notes. The Notes are issuable as registered notes without coupons in denominations of at least $100,000, except as may be necessary to reflect any principal amount not evenly divisible by $100,000. The Company shall keep at its principal office a register in which the Company shall provide for the registration of Notes and of transfers of Notes. Upon surrender for registration of transfer of any Note at the principal office of the Company, the Company shall, at its expense, execute and deliver one or more new Notes of like tenor and of a like aggregate principal amount, registered in the name of such transferee or transferees. At the option of the holder of any Note, such Note may be exchanged for other Notes of like tenor and of any authorized denominations, of a like aggregate principal amount, upon surrender of the Note to be exchanged at the principal office of the Company. Whenever any Notes are so surrendered for exchange, the Company shall, at its expense, execute and deliver the Notes which the holder making the exchange is entitled to receive. Every Note surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by a written instrument of transfer duly executed, by the holder of such Note or such holder's attorney duly authorized in writing. Any Note or Notes issued in exchange for any Note or upon transfer thereof shall carry the rights to unpaid interest and interest to accrue which were carried by the Note so exchanged or transferred, so that neither gain nor loss of interest shall result from any such transfer or exchange. Upon receipt of written notice from the holder of any Note of the loss, theft, destruction or mutilation of such Note and, in the case of any such loss, theft or destruction, upon receipt of such holder's unsecured indemnity agreement, or in the case of any such mutilation upon surrender and cancellation of such Note, the Company will make and deliver a new Note, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Note.
11E. Persons Deemed Owners; Participations. Prior to due presentment for registration of transfer, the Company may treat the Person in whose name any Note is registered as the owner and holder of such Note for the purpose of receiving payment of principal of, interest on and any Yield-Maintenance Amount payable with respect to such Note and for all other purposes whatsoever, whether or not such Note shall be overdue, and the Company shall not be affected by notice to the contrary. Subject to the preceding sentence, the holder of any Note may from time to time grant participations in such Note to any Person on such terms and conditions as may be determined by such holder in its sole and absolute discretion, provided that any such participation shall be in a principal amount of at least $100,000.
11F. Survival of Representations and Warranties; Entire Agreement. All representations and warranties contained herein or made in writing by or on behalf of the Company in connection herewith shall survive the execution and delivery of this Agreement and the Notes, the transfer by you of any Note or portion thereof or interest therein and the payment of any Note, and may be relied upon by any Transferee, regardless of any investigation made at any time by or on behalf of you or any Transferee. Subject to the preceding sentence, this Agreement and the Notes embody the entire agreement and understanding between you and the Company and supersede all prior agreements and understandings relating to the subject matter hereof.
11G. Successors and Assigns. All covenants and other agreements in this Agreement contained by or on behalf of either of the parties hereto shall bind and inure to the benefit of the respective successors and assigns of the parties hereto (including, without limitation, any Transferee) whether so expressed or not.
11H. Disclosure to Other Persons. The Company acknowledges that
the holder of any Note may deliver copies of any financial statements and
other documents delivered to such holder, and disclose any other
information disclosed to such holder, by or on behalf of the Company or any
Subsidiary in connection with or pursuant to this Agreement to (i) such
holder's directors, officers, employees, agents and professional
consultants, (ii) any other holder of any Note, (iii) any Person to which
such holder offers to sell such Note or any part thereof, (iv) any Person
to which such holder sells or offers to sell a participation in all or any
part of such Note, (v) any Person from which such holder offers to purchase
any security of the Company, (vi) any federal or state regulatory authority
having jurisdiction over such holder, (vii) the National Association of
Insurance Commissioners or any similar organization or (viii) any other
Person to which such delivery or disclosure may be necessary or appropriate
(a) in compliance with any law, rule, regulation or order applicable to
such holder, (b) in response to any subpoena or other legal process or
informal investigative demand or (c) in connection with any litigation to
which such holder is a party.
11I. Notices. All written communications provided for hereunder shall be sent by first class mail or nationwide overnight delivery service (with charges prepaid) and (i) if to you, addressed to you at the address specified for such communications in the Purchaser Schedule attached hereto, or at such other address as you shall have specified to the Company in writing, (ii) if to any other holder of any Note, addressed to such other holder at such address as such other holder shall have specified to the Company in writing or, if any such other holder shall not have so specified an address to the Company, then addressed to such other holder in care of the last holder of such Note which shall have so specified an address to the Company, and (iii) if to the Company, addressed to it at 107 Selden Street, Berlin, Connecticut 06037, Attention: Treasurer, or at such other address as the Company shall have specified to the holder of each Note in writing.
11J. Payments Due on Non-Business Days. Anything in this Agreement or the Notes to the contrary notwithstanding, any payment of principal of or interest on any Note that is due on a date other than a Business Day shall be made on the next succeeding Business Day. If the date for any payment is extended to the next succeeding Business Day by reason of the preceding sentence, the period of such extension shall be included in the computation of the interest payable on such Business Day.
11K. Satisfaction Requirement. If any agreement, certificate or other writing, or any action taken or to be taken, is by the terms of this Agreement required to be satisfactory to you or to the Required Holder(s), the determination of such satisfaction shall be made by you or the Required Holder(s), as the case may be, in the sole and exclusive judgment (exercised in good faith) of the Person or Persons making such determination.
11L. Governing Law. This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the State of Connecticut.
11M. Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
11N. Descriptive Headings. The descriptive headings of the several paragraphs of this Agreement are inserted for convenience only and do not constitute a part of this Agreement.
11O. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument.
If you are in agreement with the foregoing, please sign the form of acceptance on the enclosed counterpart of this letter and return the same to the Company, whereupon this letter shall become a binding agreement between the Company and you.
Very truly yours,
NORTHEAST NUCLEAR ENERGY COMPANY
By: /s/John B. Keane
Title: Vice President
and Treasurer
|
The foregoing Agreement is
hereby accepted as of the
date first above written.
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By: /s/Lisa M. Ferraro
Vice President
|
PURCHASER SCHEDULE
Aggregate
Principal
Amount of
Notes to be Note Denom-
Purchased ination(s)
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA $25,000,000 $25,000,000
|
(1) All payments on account of Notes held by such purchaser shall be made by wire transfer of immediately available funds for credit to:
Account No. 050-54-526
Morgan Guaranty Trust Company
of New York
23 Wall Street
New York, New York 10015
(ABA No.: 021-000-238)
Each such wire transfer shall set
forth the name of the Company, a
reference to "7.17% Senior Notes due
August 31, 2019, Security No.
66435*\D0", and the due date and
application (as among principal,
interest, Yield-Maintenance Amount,
delayed delivery fees, cancellation
fee and commitment fee) of the payment
being made.
(2) Address for all notices relating to payments:
The Prudential Insurance Company
of America
c/o Prudential Capital Corporation
Three Gateway Center
100 Mulberry Street
Newark, New Jersey 07102-4077
Attention: Investment Administration Unit
(3) Address for all other communications and notices:
The Prudential Insurance Company
of America
c/o Prudential Power Funding
Associates
Four Gateway Center
100 Mulberry Street
Newark, New Jersey 07102-4069
Attention: Lisa Ferraro
(4) Recipient of telephonic prepayment notices:
Manager, Asset Management Unit
(201) 802-3288
(5) Tax Identification No.: 22-1211670
EXHIBIT A
FORM OF NOTE
NORTHEAST NUCLEAR ENERGY COMPANY
7.17% SENIOR NOTE DUE AUGUST 31, 2019
No. _____ [Date] $________
FOR VALUE RECEIVED, the undersigned, Northeast Nuclear Energy Company
(herein called the "Company"), a corporation organized and existing under
the laws of the State of Connecticut, hereby promises to pay to THE
PRUDENTIAL INSURANCE COMPANY OF AMERICA, or registered assigns, the
principal sum of _________________________ DOLLARS on August 31, 2019, with
interest (computed on the basis of actual days outstanding and a 360-day
year) (a) on the unpaid balance thereof at the rate per annum determined in
accordance with paragraph 1B of the Note Agreement referred to below from
the date hereof, payable on the last day of each month, commencing December
31, 1993, until the principal hereof shall have become due and payable, and
(b) on any overdue payment (including any overdue prepayment) of principal,
any overdue payment of interest and any overdue payment of any
Yield-Maintenance Amount (as defined in the Note Agreement referred to
below), payable monthly as aforesaid (or, at the option of the registered
holder hereof, on demand), at a rate per annum from time to time equal to
the greater of (i) 2% in excess of the rate specified in clause (a) above
or (ii) 2.0% over the rate of interest publicly announced by Morgan
Guaranty Trust Company of New York from time to time in New York City as
its Prime Rate.
Payments of principal of, interest on and any Yield-Maintenance Amount payable with respect to this Note are to be made at the main office of Morgan Guaranty Trust Company of New York in New York City or at such other place as the holder hereof shall designate to the Company in writing, in lawful money of the United States of America.
This Note is one of a series of Senior Notes (herein called the "Notes") issued pursuant to a Note Agreement, dated as of December 21, 1993 (herein called the "Agreement"), between the Company and The Prudential Insurance Company of America and is entitled to the benefits thereof.
This Note is a registered Note and, as provided in the Agreement, upon surrender of this Note for registration of transfer, duly endorsed, or accompanied by a written instrument of transfer duly executed, by the registered holder hereof or such holder's attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee. Prior to due presentment for registration of transfer, the Company may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Company shall not be affected by any notice to the contrary.
The Company agrees to make required prepayments of principal on the dates and in the amounts specified in the Agreement. This Note is also subject to optional prepayment, in whole or from time to time in part, on the terms specified in the Agreement.
In case an Event of Default, as defined in the Agreement, shall occur and be continuing, the principal of this Note may be declared or otherwise become due and payable in the manner and with the effect provided in the Agreement.
This Note is intended to be performed in the State of Connecticut and shall be construed and enforced in accordance with the law of such State.
NORTHEAST NUCLEAR ENERGY COMPANY
By:
Treasurer
EXHIBIT B
FORM OF OPINION OF COMPANY'S SPECIAL COUNSEL
Letterhead of Day, Berry & Howard
[Date of Funding]
The Prudential Insurance Company of America
c/o Prudential Power Funding Associates
Four Gateway Center
100 Mulberry Street
Newark, New Jersey 07102
Ladies and Gentlemen:
We have acted as special counsel for Northeast Nuclear Energy Company (the "Company") in connection with the Note Agreement, dated as of December 21, 1993, between the Company and you (the "Note Agreement"), pursuant to which the Company has issued to you today the 7.17% Senior Notes due August 31, 2019 of the Company in the aggregate principal amount of $25,000,000. All terms used herein that are defined in the Note Agreement have the respective meanings specified in the Note Agreement. This letter is being delivered to you in satisfaction of the condition set forth in paragraph 3B of the Note Agreement and with the understanding that you are purchasing the Notes in reliance on the opinions expressed herein.
In this connection, we have examined such certificates of public officials, certificates of officers of the Company and copies certified to our satisfaction of corporate documents and records of the Company and of other papers, and have made such other investigations, as we have deemed relevant and necessary as a basis for our opinion hereinafter set forth. We have relied upon such certificates of public officials and of officers of the Company with respect to the accuracy of material factual matters contained therein which were not independently established. With respect to the opinion expressed in paragraph 3 below, we have also relied upon the representation made by each of you in paragraph 9A of the Note Agreement.
Based on the foregoing, it is our opinion that:
1. The Company is a corporation duly organized and validly existing in good standing under the laws of the State of Connecticut.
2. The Note Agreement, the Notes and the Millstone Plant Agreement have been duly authorized by all requisite corporate action and duly executed and delivered by authorized officers of the Company, and are valid obligations of the Company, legally binding upon and enforceable against the Company in accordance with their respective terms, except as such enforceability may be limited by (a) bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors' rights generally and (b) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
3. It is not necessary in connection with the offering, issuance, sale and delivery of the Notes under the circumstances contemplated by the Note Agreement to register the Notes under the Securities Act or to qualify an indenture in respect of the Notes under the Trust Indenture Act of 1939, as amended.
4. The extension, arranging and obtaining of the credit represented by the Notes do not result in any violation of Regulation G, T or X of the Board of Governors of the Federal Reserve System.
5. The execution and delivery by the Company of the Note Agreement, the Notes and the Millstone Plant Agreement, the offering, issuance and sale of the Notes and fulfillment of and compliance by the Company with the respective provisions of the Note Agreement, the Notes and the Millstone Plant Agreement do not conflict with, or result in a breach of the terms, conditions or provisions of, or constitute a default under, or result in any violation of, or result in the creation of any Lien upon any of the properties or assets of the Company pursuant to, or require any authorization, consent, approval, exemption or other action by or notice to or filing with any court, administrative or governmental body or other Person (other than the orders of the Securities and Exchange Commission and the Connecticut Department of Public Utility Control referred to in paragraphs 6 through 9 below and other than routine filings after the date hereof with the Securities and Exchange Commission and/or state Blue Sky authorities) pursuant to, the charter or by-laws of the Company, any applicable law (including any securities or Blue Sky law), statute, rule or regulation (including, without limitation, the Public Utility Holding Company Act of 1935 and any rule or regulation thereunder) or (insofar as is known to us after having made due inquiry with respect thereto) any agreement (including, without limitation, any agreement listed in Exhibit C to the Note Agreement), instrument, order, judgment or decree to which the Company is a party or otherwise subject.
6. The Connecticut Department of Public Utility Control has duly issued an order dated December 1, 1993 approving the execution, delivery and performance by the Company of the Note Agreement and the Notes and the offering, issuance and sale of the Notes; to our knowledge after due inquiry, such order is in full force and effect and has not been stayed or suspended and no petition for rehearing, stay or suspension or appeal of such order has been filed; and no further authorization, consent, approval, exemption, or other action by or notice to or filing with the Connecticut Department of Public Utility Control is required for the execution, delivery or performance by the Company of the Note Agreement or the Notes or the offering, issuance or sale of the Notes. The validity, legality and enforceability of the Notes will not be affected if such order is stayed, suspended, vacated, modified or otherwise held to be wholly or partly invalid after the date hereof.
7. The Connecticut Department of Public Utility Control has duly issued an order dated September 17, 1985 approving the execution, delivery and performance by the Company of the Millstone Plant Agreement; such order is final, in full force and effect and has not been stayed or suspended, and the time for petition for rehearing, stay or suspension or appeal of such order has expired without any such petition having been filed or appeal having been taken; and no further authorization, consent, approval, exemption, or other action by or notice to or filing with the Connecticut Department of Public Utility Control is required for the execution, delivery or performance by the Company of the Millstone Plant Agreement.
8. The Securities and Exchange Commission has duly issued an order dated December 16, 1993 under the Public Utility Holding Company Act of 1935, as amended, approving the execution, delivery and performance by the Company of the Note Agreement, the Notes and the offering and issuance and sale of the Notes; to our knowledge after due inquiry, such order is in full force and effect and has not been stayed or suspended and no petition for rehearing, stay or suspension or appeal of such order has been filed; and no further authorization, consent, approval, exemption, or other action by or notice to or filing with the Securities and Exchange Commission under such Act is required for the execution, delivery or performance by the Company of the Note Agreement or the Notes or the offering, issuance or sale of the Notes. The validity, legality and enforceability of the Notes will not be affected if such order is stayed, suspended, vacated, modified or otherwise held to be wholly or partly invalid after the date hereof unless you have actual knowledge that the issuance and sale of the Notes is in violation of the Public Utility Holding Company Act of 1935 or any rule or regulation thereunder.
9. The Securities and Exchange Commission has duly issued an order dated September 24, 1985 under the Public Utility Holding Company Act of 1935, as amended, approving the execution, delivery and performance by the Company of the Millstone Plant Agreement; such order is final, in full force and effect and has not been stayed or suspended and the time for petition for rehearing, stay or suspension or appeal of such orders has expired without any such petition having been filed or appeal having been taken; and no further authorization, consent, approval, exemption, or other action by or notice to or filing with the Securities and Exchange Commission under such Act is required for the execution, delivery or performance by the Company of the Millstone Plant Agreement.
10. All amounts that may become due to you or any holder of any Note under the Note Agreement or any Note, including, without limitation, the principal of, interest on and Yield Maintenance Amount, if any, with respect to the Notes and any amounts due under paragraph 11B of the Note Agreement, are "expenses" which CL&P and WMECO are obligated to pay to the Company under clause (i) of Subsection 3(b) of the Millstone Plant Agreement in accordance with their respective Allocable Shares (as defined in the Millstone Plant Agreement).
11. The Company validly holds all certificates, franchises, licenses, permits and authorizations from governmental bodies or regulatory authorities, including, without limitation, the Connecticut Public Utility Control Authority and the Securities Exchange Commission under the Public Utility Holding Company Act of 1935, as amended, free from unduly burdensome restrictions or conditions of an unusual character, that are necessary in any material respect for the ownership, maintenance and operation of its properties and assets or for the conduct of its business and, insofar as is known to us after having made due inquiry with respect thereto, the Company is not in violation of any material term or provision thereof in any respect which may materially adversely affect the condition (financial or otherwise), operation, properties, assets or prospects of the Company.
The opinions expressed above are limited to the laws of the State of Connecticut, the Commonwealth of Massachusetts and the federal laws of the United States.
Very truly yours,
EXHIBIT C
FORM OF OPINION OF CL&P'S SPECIAL COUNSEL
Letterhead of Day, Berry & Howard
[Date of Funding]
The Prudential Insurance Company of America
c/o Prudential Power Funding Associates
Four Gateway Center
100 Mulberry Street
Newark, New Jersey 07102
Ladies and Gentlemen:
We have acted as counsel for The Connecticut Light and Power Company ("CL&P") in connection with the letter agreement (the "Inducement Letter"), dated as of the date hereof, from CL&P and Western Massachusetts Electric Company ("WMECO") to you relating to the obligations of CL&P and WMECO under the Amended and Restated Millstone Plant Agreement, dated as of December 1, 1984, among Northeast Nuclear Energy Company (the "Company"), CL&P and WMECO, as such obligations relate to the Note Agreement, dated as of December 21, 1993, between the Company and you (the "Note Agreement"), pursuant to which the Company has issued to you today the 7.17% Senior Notes due August 31, 2019 of the Company in the aggregate principal amount of $25,000,000. All terms used herein that are defined in the Note Agreement have the respective meanings specified in the Note Agreement. This letter is being delivered to you in satisfaction of the condition set forth in paragraph 3C of the Note Agreement and with the understanding that you are purchasing the Notes in reliance on the opinions expressed herein.
In this connection, we have examined such certificates of public officials, certificates of officers of CL&P and copies certified to our satisfaction of corporate documents and records of CL&P and of other papers, and have made such other investigations, as we have deemed relevant and necessary as a basis for our opinion hereinafter set forth. We have relied upon such certificates of public officials and of officers of CL&P with respect to the accuracy of material factual matters contained therein which were not independently established.
Based on the foregoing, it is our opinion that:
1. CL&P is a corporation duly organized and validly existing in good standing under the laws of the State of Connecticut.
2. The Inducement Letter and the Millstone Plant Agreement have been duly authorized by all requisite corporate action and duly executed and delivered by authorized officers of CL&P, and are valid obligations of CL&P, legally binding upon and enforceable against CL&P in accordance with their respective terms, except as such enforceability may be limited by (a) bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors' rights generally and (b) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
3. The execution and delivery by CL&P of the Inducement Letter and the Millstone Plant Agreement, and fulfillment of and compliance by CL&P with the respective provisions of the Inducement Letter and the Millstone Plant Agreement do not conflict with, or result in a breach of the terms, conditions or provisions of, or constitute a default under, or result in any violation of, or result in the creation of any Lien upon any of the properties or assets of CL&P pursuant to, or require any authorization, consent, approval, exemption or other action by or notice to or filing with any court, administrative or governmental body or other Person (other than the orders of the Connecticut Department of Public Utility Control and the Securities and Exchange Commission referred to in paragraphs 4 and 5 below and other than routine filings after the date hereof with the Securities and Exchange Commission and/or state Blue Sky authorities) pursuant to, the charter or by-laws of CL&P, any applicable law (including any securities or Blue Sky law), statute, rule or regulation or (insofar as is known to us after having made due inquiry with respect thereto) any agreement, instrument, order, judgment or decree to which WMECO is a party or otherwise subject.
4. The Connecticut Department of Public Utility Control has duly issued an order dated September 17, 1985 approving the execution, delivery and performance by CL&P of the Millstone Plant Agreement; such order is final, in full force and effect and has not been stayed or suspended, and the time for petition for rehearing, stay or suspension or appeal of such order has expired without any such petition having been filed or appeal having been taken; and no further authorization, consent, approval, exemption, or other action by or notice to or filing with the Connecticut Department of Public Utility Control is required for the execution, delivery or performance by CL&P of the Inducement Letter or the Millstone Plant Agreement.
5. The Securities and Exchange Commission has duly issued an order dated September 24, 1985 under the Public Utility Holding Company Act of 1935, as amended, approving the execution, delivery and performance by CL&P of the Millstone Plant Agreement; such order is final, in full force and effect and has not been stayed or suspended and the time for petition for rehearing, stay or suspension or appeal of such order has expired without any such petition having been filed or appeal having been taken; and no further authorization, consent, approval, exemption, or other action by or notice to or filing with the Securities and Exchange Commission under such Act is required for the execution, delivery or performance by CL&P of the Inducement Letter or the Millstone Plant Agreement.
6. All amounts that may become due to you or any holder of any Note under the Note Agreement or any Note, including, without limitation, the principal of, interest on and Yield Maintenance Amount, if any, with respect to the Notes and any amounts due under paragraph 11B of the Note Agreement, are "expenses" which CL&P is obligated to pay to the Company under clause (i) of Subsection 3(b) of the Millstone Plant Agreement in accordance with its respective Allocable Share (as defined in the Millstone Plant Agreement).
7. CL&P validly holds all certificates, franchises, licenses, permits and authorizations from governmental bodies or regulatory authorities, including, without limitation, the Connecticut Department of Public Utility Control and the Securities Exchange Commission under the Public Utility Holding Company Act of 1935, as amended, free from unduly burdensome restrictions or conditions of an unusual character, that are necessary in any material respect for the ownership, maintenance and operation of its properties and assets or for the conduct of its business and, insofar as is known to us after having made due inquiry with respect thereto, CL&P is not in violation of any material term or provision thereof in any respect which may materially adversely affect the condition (financial or otherwise), operation, properties, assets or prospects of CL&P.
The opinions expressed above are limited to the laws of the State of Connecticut, the Commonwealth of Massachusetts and the federal laws of the United States.
Very truly yours,
EXHIBIT D
FORM OF OPINION OF WMECO'S SPECIAL COUNSEL
Letterhead of Day, Berry & Howard
[Date of Funding]
The Prudential Insurance Company of America
c/o Prudential Power Funding Associates
Four Gateway Center
100 Mulberry Street
Newark, New Jersey 07102
Ladies and Gentlemen:
We have acted as counsel for Western Massachusetts Electric Company ("WMECO") in connection with the letter agreement (the "Inducement Letter"), dated as of the date hereof, from The Connecticut Light and Power Company ("CL&P") and WMECO to you relating to the obligations of CL&P and WMECO under the Amended and Restated Millstone Plant Agreement, dated as of December 1, 1984, among Northeast Nuclear Energy Company (the "Company"), CL&P and WMECO, as such obligations relate to the Note Agreement, dated as of December 21, 1993, between the Company and you (the "Note Agreement"), pursuant to which the Company has issued to you today the 7.17% Senior Notes due August 31, 2019 of the Company in the aggregate principal amount of $25,000,000. All terms used herein that are defined in the Note Agreement have the respective meanings specified in the Note Agreement. This letter is being delivered to you in satisfaction of the condition set forth in paragraph 3D of the Note Agreement and with the understanding that you are purchasing the Notes in reliance on the opinions expressed herein.
In this connection, we have examined such certificates of public officials, certificates of officers of WMECO and copies certified to our satisfaction of corporate documents and records of WMECO and of other papers, and have made such other investigations, as we have deemed relevant and necessary as a basis for our opinion hereinafter set forth. We have relied upon such certificates of public officials and of officers of WMECO with respect to the accuracy of material factual matters contained therein which were not independently established.
Based on the foregoing, it is our opinion that:
1. WMECO is a corporation duly organized and validly existing in good standing under the laws of the Commonwealth of Massachusetts.
2. The Inducement Letter and the Millstone Plant Agreement have been duly authorized by all requisite corporate action and duly executed and delivered by authorized officers of WMECO, and are valid obligations of WMECO, legally binding upon and enforceable against WMECO in accordance with their respective terms, except as such enforceability may be limited by (a) bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors' rights generally and (b) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
3. The execution and delivery by WMECO of the Inducement Letter and the Millstone Plant Agreement, and fulfillment of and compliance by WMECO with the respective provisions of the Inducement Letter and the Millstone Plant Agreement do not conflict with, or result in a breach of the terms, conditions or provisions of, or constitute a default under, or result in any violation of, or result in the creation of any Lien upon any of the properties or assets of WMECO pursuant to, or require any authorization, consent, approval, exemption or other action by or notice to or filing with any court, administrative or governmental body or other Person (other than the order of the Securities and Exchange Commission referred to in paragraph 4 below and other than routine filings after the date hereof with the Securities and Exchange Commission and/or state Blue Sky authorities) pursuant to, the charter or by-laws of WMECO, any applicable law (including any securities or Blue Sky law), statute, rule or regulation or (insofar as is known to us after having made due inquiry with respect thereto) any agreement, instrument, order, judgment or decree to which CL&P is a party or otherwise subject.
4. The Securities and Exchange Commission has duly issued an order dated September 24, 1985 under the Public Utility Holding Company Act of 1935, as amended, approving the execution, delivery and performance by WMECO of the Millstone Plant Agreement; such order is final, in full force and effect and has not been stayed or suspended and the time for petition for rehearing, stay or suspension or appeal of such order has expired without any such petition having been filed or appeal having been taken; and no further authorization, consent, approval, exemption, or other action by or notice to or filing with the Securities and Exchange Commission under such Act is required for the execution, delivery or performance by WMECO of the Inducement Letter or the Millstone Plant Agreement.
5. All amounts that may become due to you or any holder of any Note under the Note Agreement or any Note, including, without limitation, the principal of, interest on and Yield Maintenance Amount, if any, with respect to the Notes and any amounts due under paragraph 11B of the Note Agreement, are "expenses" which WMECO is obligated to pay to the Company under clause (i) of Subsection 3(b) of the Millstone Plant Agreement in accordance with its respective Allocable Share (as defined in the Millstone Plant Agreement).
6. WMECO validly holds all certificates, franchises, licenses, permits and authorizations from governmental bodies or regulatory authorities, including, without limitation, the Massachusetts Department of Public Utilities and the Securities Exchange Commission under the Public Utility Holding Company Act of 1935, as amended, free from unduly burdensome restrictions or conditions of an unusual character, that are necessary in any material respect for the ownership, maintenance and operation of its properties and assets or for the conduct of its business and, insofar as is known to us after having made due inquiry with respect thereto, WMECO is not in violation of any material term or provision thereof in any respect which may materially adversely affect the condition (financial or otherwise) operation, properties, assets or prospects of WMECO.
The opinions expressed above are limited to the laws of the State of Connecticut, the Commonwealth of Massachusetts and the federal laws of the United States.
Very truly yours,
EXHIBIT E
Form of Inducement Letter
[Funding Date]
The Prudential Insurance Company
of America
c/o Prudential Power Funding Associates
Four Gateway Center
100 Mulberry Street
Newark, New Jersey 07102
Ladies and Gentlemen:
Reference is made to the Note Agreement dated as of December 21, 1993 (the "Note Agreement") between you and Northeast Nuclear Energy Company (the "Company") providing for the issuance and sale by the Company to you of the 7.17% Senior Notes due August 31, 2019 of the Company in the aggregate principal amount of $25,000,000 (the "Notes"). Terms not otherwise defined herein are used herein as defined in the Note Agreement.
The undersigned hereby certifies that attached hereto as Exhibit A is a true and complete copy of the Amended and Restated Millstone Plant Agreement dated as of December 1, 1984, by and among the Company, The Connecticut Light and Power Company and Western Massachusetts Electric Company (the "Millstone Plant Agreement"), together with all supplements and amendments thereto.
To induce you to purchase the Notes pursuant to the Note Agreement, and in satisfaction of one of the conditions precedent to your obligation to purchase the Notes pursuant to the Note Agreement, the undersigned:
(a) represent to you that all amounts due you or any holder of any Note under the Note Agreement or any Note, including, without limitation, the principal of, interest on and Yield Maintenance Amount, if any, with respect to the Notes and any amounts due under paragraph 11B of the Note Agreement, are "expenses" which the undersigned are obligated to pay as provided in clause (i) of Subsection 3(b) of the Millstone Plant Agreement in accordance with their respective Allocable Shares (as defined in the Millstone Plant Agreement);
(b) covenant with you and any holder of any Note as follows:
(1) The undersigned will perform all of their obligations to the Company under the Millstone Plant Agreement. So long as any Notes are outstanding or the Company has any obligations to you or the holders of the Notes under the Note Agreement or the Notes, the obligations of the undersigned under clause (i) of Subsection 3(b) of the Millstone Plant Agreement shall be absolute and unconditional and shall not be affected by any circumstances, including, without limitation, any setoff, counterclaim, recoupment, defense or other right which either of the undersigned may have against the Company or anyone else (including, without limitation, the other party to this letter agreement) for any reason whatsoever or any failure or claimed failure of the Company to perform any obligation under the Millstone Plant Agreement.
(2) The undersigned will not during the term of the Millstone Plant Agreement terminate the Millstone Plant Agreement or, without the written consent of the Required Holder(s), amend, supplement or modify any provision of the Millstone Plant Agreement so as to adversely effect the rights of the Company under Section 3(b) thereof. The undersigned will make payment of any amount which the undersigned are obligated to pay to the Company or any successor thereto or permitted assignee thereof pursuant to clause (i) of subsection 3(b) of the Millstone Plant Agreement with respect to any amounts due to you or any holder of any Note under the Note Agreement or any Note notwithstanding any termination of the Millstone Plant Agreement in accordance with its terms.
(3) You and any other holder of any Note shall constitute
third-party beneficiaries of, and shall be entitled to enforce directly
against the undersigned, the obligations of the undersigned under clause
(i) of Subsection 3(b) of the Millstone Plant Agreement with respect to any
amounts due to you or such holder under the Note Agreement or any Note.
(4) Each of the undersigned will deliver to each Significant Holder in quadruplicate:
(i) as soon as practicable and in any event within 60 days after the end of each quarterly period (other than the last quarterly period) in each fiscal year, consolidated statements of income, stockholders' equity and cash flows of the undersigned and its subsidiaries for the period from the beginning of the current fiscal year to the end of such quarterly period, and a consolidated balance sheet of the undersigned and its subsidiaries as at the end of such quarterly period, setting forth in each case in comparative form figures for the corresponding period in the preceding fiscal year, all in reasonable detail and satisfactory in form to the Required Holder(s) and certified by an authorized financial officer of the undersigned, subject to changes resulting from year-end adjustments; provided, however, that delivery pursuant to clause (iii) below of copies of the Quarterly Report on Form 10-Q of the undersigned for such quarterly period, together with any exhibits thereto containing the financial statements of the undersigned and its subsidiaries, filed with the Securities and Exchange Commission shall be deemed to satisfy the requirements of this clause (i);
(ii) as soon as practicable and in any event within 135 days after the end of each fiscal year, consolidating and consolidated statements of income and cash flows and a consolidated statement of stockholders' equity of the undersigned and its subsidiaries for such year, and a consolidated balance sheet of the undersigned and its subsidiaries as at the end of such year, setting forth in each case in comparative form corresponding consolidated figures from the preceding annual audit; provided, however, that delivery pursuant to clause (iii) below of copies of the Annual Report on Form 10-K of the undersigned for such fiscal year filed with the Securities and Exchange Commission, together with any exhibits thereto containing the financial statements of the undersigned and its subsidiaries, shall be deemed to satisfy the requirements of this clause (ii);
(iii) promptly upon transmission thereof, copies of all such financial statements, proxy statements, notices and reports as it shall send to its public stockholders, if any, and copies of all registration statements on Form S-1, S-2 or S-3 (without exhibits) and all reports on Form 10-K, 10-Q or 8-K which it files with the Securities and Exchange Commission (or any governmental body or agency succeeding to the functions of the Securities and Exchange Commission); and
(iv) with reasonable promptness, such other financial data as such Significant Holder may reasonably request.
Together with each delivery of financial statements required by clauses (i) and (ii) above, each of the undersigned will deliver to each Significant Holder an officer's certificate stating as to itself, and, to its knowledge after due inquiry as to the Company, that there exists no Event of Default or Default or failure by the undersigned to perform any obligation under the Millstone Plant Agreement, or, if any Event of Default, Default or such default exists, specifying the nature and period of existence thereof and what action the undersigned proposes to take with respect thereto; and
(c) represent and warrant as follows:
(1) Each of the undersigned is a corporation duly organized and existing in good standing under the laws of the jurisdiction of its organization and is qualified to do business in each state or other jurisdiction in which the nature of its business makes such qualification necessary.
(2) Each of the undersigned has the corporate power and authority to execute and deliver this letter and the Millstone Plant Agreement. The execution and delivery of this letter and the Millstone Plant Agreement have been duly authorized by all requisite corporate action on behalf of the undersigned. This letter and the Millstone Plant Agreement have been duly executed and delivered by authorized officers of the undersigned and are valid obligations of the undersigned, legally binding upon and enforceable against the undersigned in accordance with their respective terms.
(3) Neither the execution and delivery by them of this letter and the Millstone Plant Agreement nor the performance or observance by them of the terms, conditions or provisions hereof or thereof (i) does or will conflict with or violate any existing law or governmental rule, regulation or order or any existing judicial or administrative order or decree binding on them or any of their properties; (ii) does or will conflict with or violate their amended certificate of incorporation or articles of organization, as the case may be, or bylaws as in effect on the date hereof, or (iii) does or will require, under any existing law or governmental rule, regulation, or order or any existing judicial or administrative order or decree, on the part of them or Northeast Utilities or any other subsidiary of Northeast Utilities, the consent or approval of, the giving of notice to, the registration with or the taking of any other action in respect of, any governmental or public authority or agency, except as has been obtained or made and is in full force and effect; and
(d) Authorize and direct Day, Berry & Howard, special counsel to each of the undersigned, to render to you the opinions referred to in paragraph 3C and 3D of the Note Agreement.
Very truly yours,
THE CONNECTICUT LIGHT AND
POWER COMPANY
By:
Title:
WESTERN MASSACHUSETTS ELECTRIC
COMPANY
By:
Title:
SCHEDULE 4A(1)
AMORTIZATION SCHEDULE
(See Attached)
SCHEDULE 6A(1)(v)
EXISTING LIENS
None.
SCHEDULE 6A(2)
DEBT
$14,000,000 aggregate principal amount owed to the Northeast Utilities System Money Pool.
SCHEDULE 8H
LIST OF AGREEMENTS RESTRICTING DEBT
1. 364 Day Revolving Credit Agreement dated December 3, 1992 among CL&P, WMECO, Northeast Utilities, Holyoke Water Power Company, the Company, The Rocky River Realty Company, Shawmut Bank Connecticut as successor to The Connecticut National Bank, and Northeast Utilities Service Company, as Agent.
2. 364 Day Revolving Credit Agreement dated December 3, 1992 among CL&P, WMECO, Northeast Utilities, Holyoke Water Power Company, the Company, The Rocky River Realty Company, Fleet Bank, N.A., and Northeast Utilities Service Company, as Agent.
3. 364 Day Revolving Credit Agreement dated December 3, 1992 among CL&P, WMECO, Northeast Utilities, Holyoke Water Power Company, the Company, The Rocky River Realty Company, State Street Bank and Trust Company, and Northeast Utilities Service Company, as Agent.
4. Three Year Revolving Credit Agreement dated December 3, 1992 among CL&P, WMECO, Northeast Utilities, Holyoke Water Power Company, the Company, The Rocky River Realty Company, Shawmut Bank Connecticut as successor to The Connecticut National Bank, and Northeast Utilities Service Company, as Agent.
5. Three Year Revolving Credit Agreement dated December 3, 1992 among CL&P, WMECO, Northeast Utilities, Holyoke Water Power Company, the Company, The Rocky River Realty Company, Fleet Bank, N.A., and Northeast Utilities Service Company, as Agent.
6. Three Year Revolving Credit Agreement dated December 3, 1992 among CL&P, WMECO, Northeast Utilities, Holyoke Water Power Company, the Company, The Rocky River Realty Company, State Street Bank and Trust Company, and Northeast Utilities Service Company, as Agent.
SCHEDULE 10B(2)
MONEY POOL APPLICATION AND APPROVAL
(See Attached)
Exhibit 10.35.1
Amendment No. 1 to Supplemental Executive Retirement Plan For Officers of Northeast Utilities System Companies
Section V(a) of the Supplemental Executive Retirement Plan for Officers of
Northeast Utilities System Companies is hereby amended, effective as of
August 1, 1993, to read in its entirety
as follows:
"(a) equals a lifetime benefit in an annual amount equal to 60 percent of the Participant's Final Average Compensation multiplied by the ratio of the Participant's Credited Service at the date his or her Credited Service ends to twenty-five years (such ratio not to exceed one), which benefit shall be reduced, if payment of the Target Benefit shall commence prior to the Participant's attainment of age 65, in accordance with the factors set forth in the Retirement Plan applicable to retirement benefits of employees retiring on an early retirement date, Credit Service and age to be determined for purpose of this subsection (a) after taken into account any additions to age and/or Credited Service pursuant to any retirement incentive program."
Exhibit 10.35.2
AMENDMENT NO. 2 TO
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
FOR OFFICERS OF NORTHEAST UTILITIES SYSTEM COMPANIES
The Supplemental Executive Retirement Plan for Officers of Northeast Utilities System Companies is hereby amended, effective as of January 1, 1994, as follows:
A. Article I is amended to read in its entirety as follows:
The purpose of this Supplemental Executive Retirement Plan for Officers of Northeast Utilities System Companies (the "Plan") is to provide certain executives with (i) the benefits that would have been provided to them under the Northeast Utilities Service Company Retirement Plan (the "Retirement Plan") if compensation and benefits were not subject to the limitations imposed by Sections 401(a)(17) and 415 of the Code and if certain awards under the Northeast Utilities Executive Incentive Compensation Program (the "EICP") and the Northeast Utilities Executive Incentive Plan (the "Incentive Plan") were included in the benefit calculations under the Retirement Plan, and (ii) a supplemental retirement benefit in addition to the retirement benefit provided under the Retirement Plan and the benefits described in clause (i) above. Effective as of January 1, 1992, this Plan amends and restates in its entirety the Supplemental Executive Retirement Plan for Officers of Northeast Utilities System Companies dated June 23, 1987; provided, however, that the provisions of this Plan applicable to the Compensation Limit Benefit shall be effective as of January 1, 1989. The Plan has been further amended on September 28, 1993, effective August 1, 1993, and on January 25, 1994, effective January 1, 1994. The Plan is not intended to meet the qualification requirements of Section 401 of the Code.
B. The definition of "Administrator" in Article II is amended to read in its entirety as follows:
"Administrator" shall mean the plan administrator under the Retirement Plan and, to the extent a trust is established in accordance with Article XI, the trustee of such trust, their respective duties to be subject to written agreement between such plan administrator and such trustee.
C. Article XI is amended to read in its entirety as follows:
Benefits payable under this Plan shall be "unfunded," as that term is used in Sections 201(2), 301(a)(3), 401(a)(1) and 4021(a)(6) of the Employee Retirement Income Security Act of 1974, as amended, with respect to unfunded plans maintained primarily for the purpose of providing deferred compensation to a select group of management or highly compensated employees, and the Administrator shall administer this Plan in a manner that will ensure that benefits are unfunded and that Participants will not be considered to have received a taxable economic benefit prior to the time at which benefits are actually payable hereunder. Accordingly, the Employer shall not be required to segregate or earmark any of its assets for the benefit of Participants or their spouses or other beneficiaries, and each such person shall have only a contractual right against the Employer for benefits hereunder. The Company may from time to time establish a trust and deposit with the trustee thereof funds to be held in trust for the payment of benefits hereunder; provided, that the use of such funds for such purpose shall be subject to the claims of the Company's general creditors as set forth in the agreement establishing any such trust. The rights and interests of a Participant under this Plan shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge or encumbrance by a Participant or any person claiming under or through a Participant, nor shall they be subject to the debts, contracts, liabilities or torts of a Participant or anyone else prior to payment. The Treasurer of the Company may from time to time appoint an investment manager or managers for the funds held in any such trust.
D. Section (b) of Article XIV is amended to read in its entirety as follows:
(b) Benefits under this Plan shall, in the first instance, be paid and satisfied by NUSCO, whether from a trust set up as provided in Article XI or otherwise. If NUSCO shall be dissolved or for any other reason shall fail to pay and satisfy such benefits, through such trust or otherwise, each individual Employer shall pay and satisfy its share of such benefits, such share to be the ratio of the Participant's Compensation, as defined in this Plan, charged to such Employer during the three calendar years immediately preceding the year in which the Participant's employment as an NU system employee terminates to the total of the Participant's Compensation charged to all Employers during the same period.
Exhibit 10.36.1
January 15, 1992
Mellon Bank, N.A.
One Mellon Bank Center
Suite 3340
Pittsburgh, PA 15258
(Attention: Earl Kleckner)
Re: Northeast Utilities ESOP Loan
Gentlemen:
Reference is made to the Loan Agreement, dated as of December 2, 1991, by and between Northeast Utilities and Mellon Bank, N.A. solely in its capacity as trustee (the "Trustee") of the Northeast Utilities Service Company Supplemental Retirement and Savings Plan ESOP Trust (the "Loan Agreement"). Section 5 of the Loan Agreement provides that the Trustee has pledged to Northeast Utilities, and granted Northeast Utilities a security interest in, all Company Shares acquired pursuant to the Share Purchase Agreement (as such terms are defined in the Loan Agreement), and provides for the release of such shares form such pledge and security interest as payments of interest and principal are made on the Loan (as defined in the Loan Agreement).
However, the Northeast Utilities Service Company Supplemental Retirement and Savings Plan (the "401(k) Plan"), consistent with the Employee Retirement Income Security act of 1974, as amended, and the Internal Revenue Code of 1986, as amended, and regulations thereunder, contemplates that Company Shares might be allocated to 401(k) Plan participants' accounts in accordance with the terms of the 401(k) Plan, whether or not the Loan payment has yet been made, and that no allocated Company Shares be subject to the pledge and security interest. Northeast Utilities hereby waives its rights under Section 5 of the Loan agreement to the extent necessary to effect this intent.
The Declaration of Trust of Northeast Utilities provides that no shareholder of Northeast Utilities shall be held to any liability whatever for the payment of any sum of money, or for damages or otherwise under any contract, obligation or undertaking made, entered into or issued by the trustees of Northeast Utilities or by an officer, agent or representative elected or appointed by such trustees, and no such contract, obligation or undertaking shall be enforceable against such trustees or any of them in their or his or her individual capacities or capacity and all such contracts, obligations and undertakings shall be enforceable only against the trustees as such, and every person or entity, having any claim or demand arising out of any such contract, obligation or undertaking shall look only to the trust estate for the payment or satisfaction thereof.
Please sign and return one copy of this letter to indicate your agreement with the foregoing.
Very truly yours,
NORTHEAST UTILITIES
By /s/Eugene G. Vertefeuille
Eugene G. Vertefeuille
Its Assistant Treasurer
|
Agreed:
MELLON BANK, N.A.
By /s/Richard S. Thomas
Richard S. Thomas
Its Vice President
Date: February 7, 1992
|
Exhibit 10.36.3
March 16, 1992
Mellon Bank, N.A.
One Mellon Bank Center
Suite 3340
Pittsburgh, PA 15258
(Attention: Earl Kleckner)
Re: Northeast Utilities ESOP Loan
Gentlemen:
Reference is made to the Loan Agreement, dated as of December 2, 1991, by and between Northeast Utilities and Mellon Bank, N.A. solely in its capacity as trustee (the "Trustee") of the Northeast Utilities Service Company Supplemental Retirement and Savings Plan ESOP Trust, as amended (the "Loan Agreement"). Section 8(d) of the Loan Agreement provides that Northeast Utilities will make or cause to be made contributions to the ESOP Trust (as defined in the Loan agreement) in amounts sufficient to pay reasonable operating expenses of the ESOP Trust and to pay all interest on and the full amount of principal of the Loan (as therein defined) as and when such obligations become due, after taking into account the extent to which such interest and principal obligations are otherwise satisfied using dividends paid on common shares of Northeast Utilities held by the ESOP Trust.
On March 9, 1992, Northeast Utilities Service Company ("NUSCO") adopted amendments to the Northeast Utilities Service Company Supplemental Retirement and Savings Plan (the "Plan") providing for the merger into the Plan of the Northeast Utilities Service Company Tax Reduction Employee Stock Ownership Plan ("TRAESOP") and the Northeast Utilities Service Company Payroll-Based Employee stock Ownership Plan ("PAYSOP"), and for an additional ESOP benefit with respect to earnings on common shares ("TRAESOP/PAYSOP Shares") that had been held in the TRAESOP and PAYSOP trusts. It is contemplated that the Treasurer of NUSCO may direct you from time to time in your capacity as Trustee of the ESOP Trust to make payments on the Loan under the Loan Agreement using cash dividends on certain TRAESOP/PAYSOP Shares, allowing allocation of shares from the ESOP Trust to the accounts of Plan participants holding TRAESOP/PAYSOP Shares, all in accordance with the provisions of the amended Plan. In such case Northeast Utilities's obligation under Section 8(d) of the Loan Agreement to make or cause to be made Plan contributions would take into account the extent to which Loan interest and principal obligations have been satisfied not only using dividends paid on shares held by the ESOP Trust, but also using dividends on those TRAESOP/PAYSOP Shares.
Accordingly, please sign and return one copy of this letter to indicate your agreement that Section 8(d) of the Loan Agreement is hereby amended to read in its entirety as follows, to reflect the foregoing:
(d) The Company will make, or will cause to be made by and on behalf of companies that are members of a "controlled group of corporations" (as defined in the Code) with the Company, contributions to the ESOP Trust in amounts sufficient to pay reasonable operating expenses of the ESOP Trust and to pay all interest on and the full amount of principal of the Loan outstanding hereunder and under the ESOP Term Note as and when such obligations become due, after taking into account the extent to which such interest and principal obligations are otherwise satisfied using dividends paid on Company Shares as required or permitted by the Plan.
The Declaration of Trust of Northeast Utilities provides that no shareholder of Northeast Utilities shall be held to any liability whatever for the payment of any sum of money, or for damages or otherwise under any contract, obligation or undertaking made, entered into or issued by the trustees of Northeast Utilities or by an officer, agent or representative elected or appointed by such trustees, and no such contract, obligation or undertaking shall be enforceable against such trustees or any of them in their or his or her individual capacities or capacity and all such contracts, obligations and undertakings shall be enforceable only against the trustees as such, and every person or entity, having any claim or demand arising out of any such contract, obligation or undertaking shall look only to the trust estate for the payment or satisfaction thereof.
Very truly yours,
NORTHEAST UTILITIES
By /s/Eugene G. Vertefeuille
Eugene G. Vertefeuille
Its Assistant Treasurer
|
Acknowledged and Agreed:
MELLON BANK, N.A., solely in
its capacity as trustee of the
trust created under the Agreement
of Trust, dated as of December 1, 1991,
between such trustee and Northeast
Utilities Service Company
By /s/Richard S. Thomas
Name: Richard S. Thomas
Title: Vice President
Date: April 9, 1992
|
Exhibit 13.1
1993
PORTIONS OF ANNUAL REPORT TO SHAREHOLDERS
NORTHEAST UTILITIES
FINANCIAL AND STATISTICAL SECTION
TABLE OF CONTENTS
Page 18-25
Management's Discussion And Analysis
Company Report
Report Of Independent Public Accountants
Consolidated Statements Of Income
Consolidated Statements Of Cash Flows
Consolidated Statements Of Income Taxes
Page 30-31
Consolidated Balance Sheets
Page 32-33
Consolidated Statements Of Capitalization
Consolidated Statements Of Common Shareholders' Equity
Page 35-48
Notes To Consolidated Financial Statements
Consolidated Statements Of Quarterly Financial Data
Consolidated General Operating Statistics
Page 50-51
Selected Consolidated Financial Data
Page 52-53
Consolidated Electric Operating Statistics
Shareholder Information
MANAGEMENT'S DISCUSSION AND ANALYSIS
FINANCIAL CONDITION
Overview
Northeast Utilities' (NU or the company) earnings per common share were $2.02 in 1993, unchanged from 1992. The 1993 earnings per common share reflect a decrease in net income and a decrease in the number of shares outstanding, resulting from a change in accounting rules for Employee Stock Ownership Plans (ESOP). The 1993 earnings also reflect the cumulative effect of a change in the accounting for Connecticut municipal property taxes. Certain subsidiaries of NU adopted a one-time change in the method of accounting for Connecticut municipal property tax expense in the first quarter of 1993. This change resulted in a one-time contribution to earnings of $51.7 million or $0.42 per common share.
Earnings per common share before the cumulative effect of the change in accounting for property taxes were $1.60 in 1993. The earnings decrease from 1992 is primarily attributable to one-time impacts of (a) an increase of $0.19 per share in June 1992 for earnings associated with NU's acquisition of Public Service Company of New Hampshire (PSNH), (b) a decrease of $0.14 per share for the charge to earnings in the third quarter of 1993 for the costs of the company's employee-reduction program, and (c) a decrease of $0.12 per share for disallowances ordered by Connecticut regulators in The Connecticut Light and Power Company (CL&P) rate case. Other items that affected earnings in 1993 were the additional earnings from PSNH and North Atlantic Energy Corporation (NAEC) reflecting a full year of merged operations, the approval of an agreement with the state of New Hampshire that resolves certain issues that had arisen under the PSNH rate agreement (the Global Settlement) in the fourth quarter of 1993, increased revenues from recent rate increases in NU subsidiaries' retail jurisdictions, and the company's continued cost- management efforts. These increases were partially offset by higher costs for the recovery of regulatory deferrals and the higher contribution in 1992 of energy transactions with other utilities.
The year 1993 was one of both challenge and success for the company. NU's work force was reduced about 7 percent in 1993 through an employee-reduction program that involved early retirements and involuntary terminations. The 1993 composite nuclear capacity factor of 80.8 percent was the highest level the NU system has ever achieved and far above the national average. Connecticut regulators approved a three-year rate plan that weakened 1993 earnings but will assure CL&P customers rate stability over the next few years, which should help to improve CL&P's future earnings and competitive position.
In 1994, NU will continue to face challenges associated with a lagging economy and competition. Retail sales for 1993 were flat, as compared to 1992, as a result of a stagnant New England economy. NU's subsidiaries expect retail sales growth of between 1 and 2 percent in 1994, based on some modest improvement in the economy.
Competition within the electric utility industry is increasing. In response, NU has developed, and is continuing to develop, a number of initiatives to retain and continue to serve its existing customers and to expand its retail and wholesale customer base. These initiatives are aimed at keeping customers from either leaving NU's retail service territory or replacing NU's electric service with alternative energy sources.
The cost of doing business, including the price of electricity, is higher in the Northeast than in most other parts of the country. Relatively high state and local taxes, labor costs, and other costs of doing business in New England also contribute to competitive disadvantages for many industrial and commercial customers of CL&P, PSNH, and Western Massachusetts Electric Company (WMECO). These disadvantages have aggravated the pressures on business customers in the current weakened regional economy. Since 1991, CL&P and WMECO have worked actively with state development authorities to package development incentives for a variety of retail and wholesale customers. These economic development packages typically include both electric rate discounts and incentive payments for energy-efficient construction, as well as technical support and energy conservation services. Targeted rate reductions in effect at the end of 1993 to a limited group of large customers were successful in preserving NU system revenues of approximately $50 million. The amount of discounts provided to customers is expected to increase as each subsidiary intensifies its efforts to retain existing customers and gain new customers.
As a result of very limited load growth throughout the Northeast and the operation of several new generating plants in the past five years, wholesale competition has grown, and a seller's market for electricity has turned into a buyer's market. The prices the NU system has been able to receive for new wholesale sales have generally been far lower than
the prices prevalent in 1988 and 1989. In future years, competition in the Northeast is expected to increase, putting further downward pressure on prices. However, the potential price decreases may be offset somewhat by an improvement in the region's economy, as well as by the retirement of a number of the region's existing generating facilities.
The ability of retail customers to select an electricity supplier and then force the local electric utility to transmit the power to the customer's site is known as "retail wheeling." While wholesale wheeling is mandated by the Energy Policy Act of 1992 under certain circumstances, retail wheeling is generally not required in any of the NU system's jurisdictions. Retail wheeling is being investigated in some of the NU system's jurisdictions.
NU management has taken steps to make the company more competitive and profitable in the changing utility environment. A system wide emphasis on improved customer service is a central focus of the reorganization of NU that became effective on January 1, 1994. The reorganization entails realignment of the system into two new core business groups. The first core business group is devoted to energy resource acquisition and wholesale marketing and focuses on nuclear, fossil, and hydroelectric generation, wholesale power marketing, and new business development. The second core business group oversees all customer service, transmission and distribution operations, and retail marketing in Connecticut, New Hampshire, and Massachusetts. These two core business groups are served by various support functions.
In connection with NU's reorganization, the company has begun a corporate reengineering process which should help it to identify opportunities to become more competitive, while improving customer service and maintaining excellent operational performance. NU has aggressive cost-reduction targets over the next three years, which should enable the company to remain competitive with vulnerable customers in particular.
To date, the NU system has not been materially affected by competition, and it does not foresee substantial adverse effect in the near future, unless the current regulatory structure is substantially altered. NU believes the steps it is taking will have significant, positive effects in the next few years. In addition, NU's subsidiaries benefit from a diverse retail base. The NU system has no significant dependence on any one customer or industry. The NU system's extensive transmission facilities and diversified generating keepsake are strong positive factors in the regional wholesale power market. NU serves about 30 percent of New England's electric needs and is one of the 20 largest electric utility systems in the country.
Achieving measurable improvement in earnings in 1994 will depend, in part, on the success of NU's wholesale power marketing, customer retention, and reengineering efforts. These efforts should help increase NU's earnings and, thereby, lower the dividend payout ratio. (1993 dividends were equal to 87 percent of earnings.)
RATE MATTERS
Deferred charges at December 31, 1993 were $2.9 billion, which includes $1.2 billion for the adoption of Statement of Financial Accounting Standards (SFAS) No. 109, Accounting for Income Taxes, and $769 million for the PSNH regulatory asset. The PSNH regulatory asset was established under PSNH's reorganization plan. A portion of the regulatory asset ($425 million) is being recovered over a seven-year period, and the remainder is being recovered over a twenty-year period. The system companies are currently recovering some amounts of the remaining deferred charges from customers. Management expects that substantially all of the deferred charges will be recovered through future rates.
Under SFAS No.109, the company reflected a regulatory asset and a deferred tax liability for the cumulative amount of income taxes associated with timing differences for which deferred taxes had not been provided but are expected to be recovered from customers in the future. The adoption of SFAS No. 109 has not had a material effect on results of operations.
The company also adopted SFAS No. 106, Employer's Accounting for Postretirement Benefits Other Than Pensions, in 1993. Adopting SFAS No. 106 has not had a material impact on financial condition or results of operations because the system companies are currently recovering or expect to recover these costs in the future.
See the "Notes To Consolidated Financial Statements" for further details on deferred charges and recently adopted accounting standards.
CONNECTICUT
On June 16,1993, the Department of Public Utility Control (DPUC) issued a final decision in CL&P's December 1992 retail rate case (the rate decision) approving a multiyear rate plan which provides for annual rate increases of $46 million, or 2.01 percent, in July 1993; $47.1 million, or 2.04 percent, in July 1994; and $48.2 million, or 2.06 percent, in July 1995. The total cumulative increase granted of $141.3 million, or 6.1 percent, was approximately 42 percent of CL&P's updated request.
In light of the state of Connecticut's concern over economic development and industrial and commercial rates, one important aspect of the rate decision was that industrial and manufacturing rates will only rise by about 1.1 percent annually over the three-year period. Other significant aspects of the rate decision included the reduction of CL&P's return on equity (ROE) from 12.9 percent to 11.5 percent for the first year of the multiyear plan, 11.6 percent for the second year, and 11.7 percent for the third year, a 32- month phase-in beginning in 1995 of CL&P's nonpension, postretirement benefit costs required to be recognized under SFAS No. 106 with amortization of deferred amounts over five years; the three-year phase-in of the Millstone 2 steam generators; the deferral of cogeneration expenses with carrying costs of $42.1 million in fiscal year 1994 and $20.9 million in fiscal year 1995 with recovery over five years beginning July 1, 1996; and the full recovery of the remaining costs of the Millstone 3 and Seabrook phase-ins (balance of $185.9 million at December 31,1993).
The rate decision used $49 million of prior fuel over recoveries to offset a similar amount of the unrecovered replacement power costs under CL&P's Generation Utilization Adjustment Clause (GUAC). The GUAC has been in operation since 1979 and was designed as a mechanism to recover or to refund certain fuel costs if the nuclear units do not operate at a predetermined capacity factor. In January 1994, the DPUC issued a decision ordering CL&P not to include a GUAC amount in customers' bills through August 1994. The DPUC found that CL&P overrecovered its fuel costs during the 1992-1993 GUAC period and offset the amount of the over recovery against the unrecovered GUAC balance. The effect of the order was a disallowance of $7.9 million. The DPUC further ordered that any GUAC deferred charges subsequent to July 1993 will be offset by any fuel overrecoveries. There is an unrecovered GUAC balance at December 31, 1993 of $13.7 million, but there is not expected to be an unrecovered balance at the end of the GUAC period in August 1994. The DPUC's decision creates some uncertainty about the future operation of the GUAC. CL&P has requested further clarification of the decision, and has appealed it, but does not expect that the decision will have a material adverse effect on future results of operations.
The rate decision also required CL&P to allocate to customers a portion of the property tax accounting change made in the first quarter of 1993, which resulted in a charge against other income of $10.2 million in the second quarter of 1993.
In August 1993, two appeals were filed from the DPUC's June 1993 rate decision. CL&P appealed four issues from the rate decision. The second appeal was filed by the Connecticut Office of Consumer Counsel (OCC) and the city of Hartford. This appeal challenges the legality of the multiyear plan accepted by the DPUC. CL&P has filed a motion to dismiss this appeal on jurisdictional grounds. In addition, the Court rejected the city of Hartford's and OCC's motion to stay implementation of the second and third year of the rate plan pending the outcome of their appeal.
Outages that occurred over the period October 1990 through February 1992 at the Millstone nuclear units have been the subject of five ongoing prudence reviews in Connecticut. CL&P has received final decisions from the DPUC on four of the reviews. The OCC has appealed decisions favorable to the company in two dockets. The exposure under these two dockets is approximately $66 million. The DPUC has suspended a third docket, pending the outcome of one of the appeals. The exposure under this docket is $26 million. An additional nuclear outage prudence docket before the DPUC is the docket established to review the 1992 outage at Millstone 2 to replace the steam generators. A decision is expected in late 1994. Management believes that its actions with respect to all of these outages have been prudent, and it does not expect the outcome of the prudence reviews to result in material disallowances.
In April 1993, the DPUC issued an order approving a new Conservation Adjustment Mechanism (CAM), which allowed CL&P to recover conservation and load-management (C&LM) expenditures over an eight-year period (reduced from ten years) and reaffirmed program performance incentives. In December 1993, CL&P filed a proposed CAM settlement with the DPUC. The settlement proposes 1994 C&LM expenditures of $39 million, reduction in the recovery period from 8 to 3.85 years and other changes in program designs, performance incentives, and cost recovery. Unrecovered C&LM costs at December 31, 1993 were $111.4 million.
NEW HAMPSHIRE
PSNH's rates are determined under a rate agreement executed by the Governor
and the Attorney General of New Hampshire in 1989 and subsequently approved
by the New Hampshire Public Utilities Commission (NHPUC) (the Rate
Agreement). The Rate Agreement sets out a comprehensive plan of rates for
PSNH, providing for seven base rate increases of 5.5 percent per year (the
fixed-rate period) and a comprehensive fuel and purchased power adjustment
clause (FPPAC). The base rate increases are effective annually on each June
1. The fourth base rate increase took place on June 1, 1993.
In June 1993, PSNH's base rates increased by 6.2 percent. The increase above the 5.5 percent under the Rate Agreement reflected a temporary increase to recover the increased costs associated with recently enacted tax legislation. Concurrently, the FPPAC rate was lowered resulting in a net average rate increase of 4.5 percent.
In November 1993, the NHPUC approved a 1.8 percent increase in PSNH's average retail rates, effective on December 1, 1993, for an increased FPPAC rate. The increase was attributed primarily to the anticipated costs of a refueling outage at Seabrook scheduled to begin in March 1994. To mitigate the rate increase, the NHPUC approved the collection of the refueling outage costs over 18 months.
In January 1994, the NHPUC approved the Global Settlement between PSNH, NAEC, Northeast Utilities Service Company (NUSCO), and the Attorney General of the state of New Hampshire. The Global Settlement addressed changes in tax legislation in New Hampshire, accounting treatments resulting from adoption of SFAS No. 106 and SFAS No. 109, and recovery for certain aspects of PSNH's settlement with the Vermont Electric Generation and Transmission Cooperative, Inc. (VEG&T), including the purchase by NAEC of VEG&T's approximate 0.4 percent share of Seabrook, among other results. The Global Settlement, as approved, allowed the accelerated recognition of tax benefits, which will result in moderate increases in PSNH's earnings in the next several years, beginning in 1993.
The costs associated with purchases from certain small-power producers (SPPs) over the level assumed in the Rate Agreement are deferred and recovered over ten-year periods through the FPPAC. At December 31, 1993, SPP deferrals are approximately $107.6 million. A majority of these purchases is under long- term arrangements (20-30 years) at prices significantly higher than PSNH's current or projected avoided costs. PSNH is attempting to renegotiate these arrangements and must report to the NHPUC on the results of the negotiations.
In January 1994, PSNH filed agreements reached with certain SPPs with the NHPUC, which call for PSNH to pay the SPPs a total of $91.8 million. In return, PSNH would no longer be obligated to buy power from these SPPs, and the SPPs are barred from attempting to provide service to any customers now on the PSNH system or on the entire NU system. If approved by the NHPUC, the agreements will provide benefits to customers over the terms of the arrangements. Management expects to recover any payments from customers. The NHPUC will be examining the prudence of PSNH's efforts and considering the implementation of temporary rates for the SPPs that have not settled with PSNH.
As prescribed by the Rate Agreement, NAEC is phasing in its $700-million initial investment in Seabrook 1. As of December 31,1993, NAEC has included in rates $385 million of its Seabrook investment. The remaining investment ($315 million) will be phased into rates over the next three years beginning May 15, 1994. The deferred return associated with the amount of investment that has not been included in rates is $136.3 million through December 31,1993. This amount and the additional deferred amounts associated with the remaining phase-in will be recovered over the period May 1997 through 2001.
MASSACHUSETTS
As a result of a May 1992 Department of Public Utilities (DPU) decision, WMECO's annual retail rates increased by approximately $11 million, or 2.7 percent, on July 1,1993. This increase is the second step of a two-year settlement agreement proposed jointly by WMECO and the Massachusetts Attorney General's Office and approved by the DPU. The first step went into effect on July 1, 1992.
WMECO had incurred approximately $17 million in replacement-power costs associated with Millstone outages that have been the subject of prudence reviews in Connecticut. Recovery of prudently incurred replacement-power costs is permitted through a retail fuel adjustment clause. The DPU reviews the performance of WMECO's generating units on an annual basis. Management believes that its actions with respect to these outages have been prudent and does not expect the outcome of the DPU performance program reviews to have a material adverse effect on WMECO's future earnings.
WMECO has a conservation charge (CC) in effect to recover the cost of C&LM programs above or below the base rate recovery levels. WMECO filed a new CC in February 1994. WMECO expects to spend about $14 million in 1994 on C&LM programs.
ENVIRONMENTAL MATTERS
The company devotes substantial resources to identify and then to meet the multitude of environmental requirements it faces. The company has active auditing programs addressing a variety of different regulatory requirements, including an environmental auditing program to detect and remedy noncompliance with environmental laws or regulations.
The NU system is potentially liable for environmental cleanup costs at a number of sites both inside and outside its service territories. To date, the future estimated
environmental remediation costs for the sites for which the system companies expect to bear some liability have not been material with respect to the earnings or financial position of the company. At December 31, 1993, the liability recorded by the system for its estimated environmental remediation costs, excluding any possible insurance recoveries or recoveries from third parties, amounted to approximately $4 million. However, while not probable, it is reasonably possible, these costs could rise to much as $9 million. The extent of additional future environmental cleanup costs is not estimable due to factors such as the unknown magnitude of possible contamination and changes in existing laws and regulatory practices.
The company expects that the implementation of Phase I of the 1990 Clean Air Act Amendments will require only modest emissions reductions for the NU system. CL&P's and WMECO's exposure is minimal because of the companies' investment in nuclear energy in the 1970s and 1980s and the burning of low- sulfur fuels. PSNH is subject to more stringent emission limits for nitrogen oxides within the next five years under Phase II requirements. The costs for meeting Phase II requirements cannot be estimated at this time because the emission limits have not been determined.
The NU system companies' estimated cost to decommission their shares of Millstone units 1,2, and 3 and Seabrook is approximately $1.1 billion in year-end 1993 dollars. In addition, the system companies' estimated cost to decommission their shares of the regional nuclear generating units is estimated to be approximately $280-$290 million. These costs are being recovered and recognized over the lives of the respective units. Yankee Atomic Electric Company (YAEC) has begun decommissioning its nuclear facility. The NU system companies' estimated obligation to YAEC has been recorded on the Consolidated Balance Sheets. Managements expects that the system companies will continue to be allowed to recover these costs.
For further information regarding nuclear decommissioning, environmental matters, and other contingencies, see the "Notes To Consolidated Financial Statements."
NUCLEAR PERFORMANCE
The composite capacity factor of the five nuclear generating units that the NU system operates (including the Connecticut Yankee nuclear unit) was 80.8 percent for 1993, compared with 63.7 percent for 1992 and a national average of 70.6 percent for 1993. The lower 1992 capacity factor was primarily the result of the 1992 Millstone 2 steam generator replacement outage and some unexpected technical and operating difficulties.
In 1993, NU was informed by the Nuclear Regulatory Commission (NRC) of three apparent violations related to the circumstances surrounding the repair of a leaking valve in the reactor coolant system at the Millstone 2 nuclear power station. Millstone 2 was shut down on August 5, 1993 when extensive repair efforts proved unsuccessful and the valve began to leak at a level beyond operating requirements. NU was assessed and paid a civil penalty of $237,500 for the three violations that were identified during the NRC investigation.
NU has initiated a number of immediate and long-term actions designed to further enhance the safe operation of all the NU nuclear plants. In an effort to improve nuclear performance, NU management announced a reorganization of its Connecticut-based nuclear organization in November 1993. The reorganization, which is based on an overview of NU's future nuclear operational needs, resulted in a number of personnel changes, including the appointment of a new senior vice president of Millstone Station, realignment of engineering operations along unit lines, and management consolidation. In addition, centralization of the nuclear engineering function at the generating stations is expected to occur during the summer of 1994. No material expense will be incurred by the company in connection with the reorganization.
LIQUIDITY AND CAPITAL RESOURCES
Cash provided from operations increased $258.7 million in 1993, compared with the same period in 1992, primarily due to the contributions of PSNH and NAEC and higher cash earnings from CL&P. Cash provided from financing activities was $1.1 billion lower in 1993, compared with the same period in 1992, primarily due to the financing activity in 1992 associated with the acquisition of PSNH and a net decrease in short-term debt. Cash used for investments was $835.4 million lower in 1993, compared with the same period in 1992, primarily due to the acquisition of the net assets of PSNH in 1992.
The charts on the next page illustrate the sources and uses of cash requirements for 1992 and 1993, and the projections for 1994 through 1998.
The NU system companies have been able to shift their focus to refinancing outstanding high-cost securities. Internally generated cash has generally been, and is projected to continue to be, more than sufficient to cover construction costs. The forecast through 1998 shows additional financings only in years with a large amount of securities maturing. CL&P may need up to $200 million in 1994 to finance maturing debt and PSNH may need to finance a buyout of some of its arrangements with the
SPPs. The system companies are obligated to meet $1.5 billion of long-term debt and preferred stock maturities and cash sinking-fund requirements for the 1994 through 1998 period, including $295.3 million for 1994. Also, $125 million of First Mortgage Bonds outstanding at December 31, 1993 has been called in December 1993 for redemption in 1994.
Aggressive refinancing of their outstanding high-cost securities has enabled the system companies to lower their cost of debt. There was no new money financing in 1993. To take advantage of favorable market conditions during 1993, the system companies refinanced $485 million of First Mortgage Bonds, $110 million of preferred stock, and $414.1 million of pollution control bonds, in addition to restructuring the system companies' various credit lines. It is estimated that the 1993 refinancings and restructuring will save the company approximately $17 million per year. The system companies intend, if market conditions permit, to continue to refinance a portion of their outstanding long-term debt and preferred stock at a lower effective cost.
On February 17, 1994, CL&P issued two new First Mortgage Bonds, the $140 million 1994 Series A and the $140 million 1994 Series B Bonds, at annual rates of 5.50 percent and 6.125 percent, respectively. The Series A Bonds will mature on February 1, 1999 and the Series B Bonds will mature on February 1, 2004. Proceeds from these issues, together with proceeds from short-term debt, will be used to redeem $310 million of outstanding bonds with interest rates ranging from 5.625 percent to 7.625 percent. Savings from the refinancings are estimated to be approximately $4.7 million per year in reduced interest rates.
The NU system's construction program expenditures, including Allowance for Funds Used During Construction (AFUDC), for the period 1994 through 1998 are estimated to be approximately $1.2 billion, including $267.5 million for 1994. The construction program's main focus is maintaining and upgrading the existing transmission and distribution system as well as nuclear and fossil- generating facilities. The company does not foresee the need for new major generating facilities at least until the year 2007.
CL&P and WMECO utilize a nuclear fuel trust to finance nuclear fuel requirements for Millstone 1, 2, and 3. Nuclear fuel requirements, including nuclear fuel financed through the trust, are estimated to be $449.7 million for the period 1994 through 1988, including $98.4 million for 1994.
RESULTS OF OPERATIONS
A majority of the changes in items affecting results of operations between 1992 and 1993 is due to the inclusion of PSNH and NAEC results for a full year in 1993 and only seven months in 1992. The fact that PSNH and NAEC were not part of the NU system in 1991 but were for seven months of 1992, was a primary contributor to changes in results of operations between 1991 and 1992.
The relative magnitude of the various expenditures incurred by the system's continuing operations is illustrated in the chart on page 25.
OPERATING REVENUES
The components of the change in operating revenues for the past two years are provided in the table on the next page.
Operating revenues increased $412.2 million from 1992 to 1993 primarily due to the additional revenues of PSNH for a full year in 1993. Operating revenues excluding PSNH increased $45.1 million from 1992 to 1993. Revenues related to regulatory decisions increased in 1993, primarily
NORTHEAST UTILITIES
SOURCE & USE OF FUNDS
1992-1998
Use of Funds 1992 1993 1994 1995 1996 1997 1998
- ------------ ---- ---- ---- ---- ---- ---- ----
(Percentages)
Construction 15.4 16.2 36.8 46.2 33.8 25.2 34.4
Nuclear Fuel 1.7 4.7 8.8 13.2 18.3 5.5 19.5
Maturities and Sinking Fund 42.0 68.6 39.9 34.2 41.4 36.7 42.0
Repayment of Short-Term Debt 0.0 10.5 14.5 6.4 6.5 32.6 4.1
Acquisition of PSNH 40.9 0.0 0.0 0.0 0.0 0.0 0.0
----- ----- ----- ----- ----- ----- -----
Total Funds Required 100.0 100.0 100.0 100.0 100.0 100.0 100.0
===== ===== ===== ===== ===== ===== =====
Source of Funds 1992 1993 1994 1995 1996 1997 1998
- --------------- ---- ---- ---- ---- ---- ---- ----
(Percentages)
Internally Generated Funds 15.9 35.9 51.4 86.8 82.4 81.1 82.2
Nuclear Fuel Trust 1.7 3.9 8.0 10.6 15.6 4.4 17.8
Long-Term Debt and
Preferred Stock 60.0 59.0 40.6 0.0 0.0 8.8 0.0
Short-Term Debt 9.0 0.0 0.0 0.0 0.0 0.0 0.0
Common Stock 13.4 1.2 0.0 2.6 2.0 5.7 0.0
----- ----- ----- ----- ----- ----- -----
Total Source of Funds 100.0 100.0 100.0 100.0 100.0 100.0 100.0
===== ===== ===== ===== ===== ===== =====
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Increase/(Decrease) Increase/(Decrease)
- -----------------------------------------------------------------------------
- ---------------
1993 vs. 1992(a) 1992 vs. 1991(b)
- -----------------------------------------------------------------------------
- ---------------
(Millions of Dollars) (Millions of Dollars)
NU Excl. PSNH Total NU Excl. PSNH
Total
PSNH NU PSNH
NU
Regulatory decisions $ 46.1 $ 8.6 $ 54.7 $ 95.1 $ 15.8
$110.9
Fuel, purchased power, and
FPPAC cost recoveries (14.9) 154.1 139.2 18.8 151.5
170.3
Sales volume 6.8 188.8 195.6 2.4 242.0
244.4
Other revenues 7.1 15.6 22.7 (91.6) 29.1
(62.5)
----- ------ ------ ----- ------
------
Total revenue change $ 45.1 $367.1 $ 412.2 $ 24.7 $ 438.4
$463.1
===== ====== ====== ===== ======
======
(a) The change in operating revenues from 1992 to 1993 was due primarily to
the inclusion of PSNH's operating revenues for a full year in 1993 and
only seven months in 1992.
(b) The change in operating revenues from 1991 to 1992 was due primarily to
the fact that PSNH was not part of the NU system in 1991 but was
included for seven months in 1992.
|
because of the effects of the June 1993 DPUC retail rate increase for CL&P and the July 1992 and July 1993 DPU retail rate increases for WMECO. Fuel and purchased-power cost recoveries decreased primarily due to lower energy costs. Retail sales for CL&P and WMECO increased only 0.2 percent in 1993 from 1992 sales levels.
Other revenues increased primarily because of the recognition by a nonutility subsidiary of recoveries for 1993 conservation expenditures.
Operating revenues increased $463.1 million from 1991 to 1992 primarily due to the addition of PSNH revenues for seven months in 1992. Operating revenues excluding PSNH increased $24.7 million from 1991 to 1992. Revenues related to regulatory decisions increased in 1992, primarily because of the effects of the July 1991 and July 1992 DPU retail rate increases for WMECO and the August 1991 DPUC retail rate increase for CL&P. Fuel and purchased- power cost recoveries increased primarily due to timing in the recover of fuel expenses under the provisions of CL&P's fuel adjustment clauses. Other revenues decreased primarily because of 1992 sales to other utilities that took place at lower prices per kilowatt-hour, the 1991 one-time reimbursement of costs associated with the reactivation of fossil-generating units, and lower 1992 WMECO recoveries associated with conservation, capacity, and transmission costs.
FUEL, PURCHASED, AND NET INTERCHANGE POWER
Fuel, purchased, and net interchange power increased $145.2 million in 1993, as compared to 1992, primarily due to the additional PSNH and NAEC expenses ($99.0 million), the timing in the recovery of fuel expenses under the provisions of CL&P's fuel adjustment clauses and disallowances of replacement-power costs as a result of regulatory reviews in Connecticut, partially offset by lower outside purchases due to better nuclear performance in 1993.
Fuel, purchased, and net interchange power increased $98.7 million in 1992, as compared to 1991, primarily due to the addition of PSNH and NAEC expenses ($59.1 million), timing in the recovery of fuel expenses under the provisions of CL&P's fuel adjustment clauses, and previously deferred replacement-power costs that are not recoverable as a result of regulatory reviews in Connecticut.
OTHER OPERATION AND MAINTENANCE EXPENSES
Other operation and maintenance expenses increased $142.5 million in 1993, as compared to 1992, primarily due to the additional PSNH and NAEC expenses ($105.2 million), the 1993 costs associated with the employee-reduction program, the 1992 reimbursement of previously expended costs associated with the PSNH acquisition, and 1993 SFAS No. 106 postretirement benefit costs, partially offset by lower 1993 costs associated with the operation and maintenance activities of the nuclear units.
Other operation and maintenance expenses increased $109.1 million in 1992, as compared to 1991, primarily due to the addition of PSNH and NAEC expenses ($147.8 million) and higher 1992 costs of operation and maintenance activities at the nuclear units, partially offset by the 1992 reimbursement of previously expensed costs associated with the PSNH acquisition, the 1991 costs associated with a voluntary early
retirement program, and lower 1992 conservation expenses.
DEPRECIATION EXPENSES
Depreciation expenses increased $38.6 million in 1993, as compared to 1992, and $44.2 million in 1992, as compared to 1991, primarily as a result of the additional PSNH and NAEC depreciation expense ($26.8 million in 1993 and $34.4 million in 1992, including Seabrook), higher depreciation rates, and higher depreciable plant balance.
AMORTIZATION, OF REGULATORY ASSETS, NET
Amortization, of regulatory assets net increased $58.1 million in 1993, as compared to 1992, and $69.8 million in 1992, as compared to 1991, primarily because of the additional PSNH amortization of the regulatory asset as provided for in the Rate Agreement ($37.7 million in 1993 and $51.8 in 1992), and higher amortization of Millstone 3 and Seabrook deferred return and expenses. The increase in 1993 is also attributable to the gross-up of taxes due to SFAS No. 109, and the amortization in 1993 of costs paid by CL&P to the developers of two wood-to-energy plants as allowed in the recent rate decision, partially offset by the amortization of the regulatory liability recognized as a result of the PSNH Global Settlement ($21.9 million).
FEDERAL AND STATE INCOME TAXES
Federal and state income taxes increased $4.5 million in 1993, as compared to 1992, primarily because of an increase in flow-through depreciation combined with the tax accounting associated with the PSNH Global Settlement partially offset by the company's change in accounting for its ESOP.
Federal and state income taxes increased $33.8 million in 1992, as compared to 1991, primarily because of the addition of PSNH and NAEC and higher book income of the other NU companies.
TAXES OTHER THAN INCOME TAXES
Taxes other than income taxes increased $19.0 million in 1993, as compared to 1992, and $34.8 million in 1992, as compared to 1991, primarily due to the additional PSNH and NAEC taxes ($20.2 million in 1993 and $27.4 million in 1992, including property taxes on Seabrook).
DEFERRED NUCLEAR PLANTS RETURN
Deferred nuclear plants return increased $18.7 million in 1993, as compared to 1992, and $15.6 million in 1992, as compared to 1991, primarily because of deferred return associated with NAEC's ownership share of Seabrook ($30.0 million in 1993 and $22.8 million in 1992), partially offset by a decrease in Millstone 3 deferred return because additional Millstone 3 investment was phased into rates.
OTHER INCOME, NET
Other income, net decreased $10.9 million in 1993, as compared to 1992, primarily because of the allocation to customers of a portion of the property tax accounting change as ordered by the DPUC in the CL&P rate decision and lower AFUDC.
INTEREST CHARGES
Interest on long-term debt increased $57.3 million in 1993, as compared to 1992, and $70.2 million in 1992, as compared to 1991, primarily because of higher debt levels from the addition of PSNH and NAEC ($56.7 million in 1993 and $86.8 million in 1992), partially offset by lower average interest rates as a result of the substantial refinancing activity. The increase in 1993 is also due to the absence of an interest expense offset in 1993 for ESOP dividends due to a change in accounting for ESOPs.
Other interest charges increased $9.6 million in 1993, as compared to 1992, primarily because of higher interest on short-term borrowings, lower AFUDC, and interest recognized for a potential Connecticut sales tax audit assessment.
PREFERRED DIVIDENDS OF SUBSIDIARIES
Preferred dividends of subsidiaries increased $4.4 million in 1992, as compared to 1991, primarily because of the addition of preferred dividends for PSNH ($7.5 million), partially offset by lower preferred dividend rates.
TAX BENEFIT OF EMPLOYEE STOCK OWNERSHIP PLAN DIVIDENDS
Tax benefit of ESOP dividends of $7.3 million in 1992 is the result of the company adopting an ESOP. In 1993, these benefits are reflected as a reduction to income tax expense. See the "Notes to Consolidated Financial Statements" for further information regarding ESOP.
1993 DISTRIBUTION OF REVENUE
Percent
-------
Energy Costs 25.4%
Other Operation and Maintenance Expenses 20.4%
Wages and Benefits 13.9%
Taxes 12.5%
Common and Preferred Dividends 7.3%
Other Operating Expenses and Other Income, Net 20.5%
------
Total Revenue Dollars 100.0%
======
|
COMPANY REPORT
The consolidated financial statements of Northeast Utilities and subsidiaries and other sections of this Annual Report were prepared by the company. These financial statements, which were audited by Arthur Andersen & Co., were prepared in accordance with generally accepted accounting principles using estimates and judgment, where required, and giving consideration to materiality.
The company has endeavored to establish a control environment that encourages the maintenance of high standards of conduct in all of its business activities. The company maintains a system of internal controls over financial reporting, which is designed to provide reasonable assurance to the company's management and Board of Trustees regarding the preparation of reliable published financial statements. The system is supported by an organization of trained management personnel, policies and procedures, and a comprehensive program of internal audits. Through established programs, the company regularly communicates to its management employees their internal control responsibilities and policies prohibiting conflicts of interest.
The Audit Committee of the Board of Trustees is composed entirely of outside trustees. This committee meets periodically with management, the internal auditors, and the independent auditors to review the activities of each and to discuss audit matters, financial reporting, and the adequacy of internal controls.
Because of inherent limitations in any system of internal controls, errors or irregularities may occur and not be detected. The company believes, however, that its system of internal accounting controls and control environment provide reasonable assurance that its assets are safeguarded from loss or unauthorized use and that is financial records, which are the basis for the preparation of all financial statements, are reliable.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF NORTHEAST UTILITIES:
We have audited the accompanying consolidated balance sheets and consolidated statements of capitalization of Northeast Utilities (a Massachusetts trust) and subsidiaries as of December 31, 1993 and 1992, and the related consolidated statements of income, common shareholders' equity, cash flows, and income taxes for each of the three years in the period ended December 31, 1993. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material aspects, the financial position of Northeast Utilities and subsidiaries as of December 31, 1993 and 1992, and the results of their operations and cash flows for each of the three years in the period ended December 31, 1993, in conformity with generally accepted accounting principles.
As explained in <F6> Note 1 to the financial statements, "Summary of Significant Accounting Policies-Accounting Changes," effective January 1, 1993, Northeast Utilities and subsidiaries changed their methods of accounting for property taxes, postretirement benefits other than pensions, income taxes, and employee stock ownership plans.
/S/ ARTHUR ANDERSEN & CO.
ARTHUR ANDERSEN & CO.
Hartford, Connecticut
February 18, 1994
|
CONSOLIDATED STATEMENTS OF INCOME
For the Years Ended December 31, 1993 1992
1991
---- ----
----
(Thousands of Dollars,except
share information)
OPERATING REVENUES ...................................$ 3,629,093 $ 3,216,874
$ 2,753,803
----------- -----------
-----------
OPERATING EXPENSES:
Operation--
Fuel, purchased and net interchange power........... 917,957 772,804
674,096
Other............................................... 979,403 828,345
763,610
Maintenance.......................................... 265,926 274,495
230,166
Depreciation......................................... 321,359 282,738
238,575
Amortization of regulatory assets, net............... 208,506 150,413
80,643
Federal and state income taxes (See Consolidated
Statements Of Income Taxes)<F6>(Note 1).............. 243,854 246,227
190,556
Taxes other than income taxes ....................... 240,413 221,422
186,645
----------- -----------
-----------
Total operating expenses............................ 3,177,418 2,776,444
2,364,291
----------- -----------
-----------
OPERATING INCOME...................................... 451,675 440,430
389,512
----------- -----------
-----------
OTHER INCOME:
Deferred nuclear plants return--other funds.......... 38,373 45,299
39,477
Equity in earnings of regional nuclear generating
and transmission companies........................ 12,980 15,357
14,431
Other, net........................................... 4,747 15,672
11,712
Income taxes--credit ................................ 29,948 36,787
14,873
----------- -----------
-----------
Other income, net .................................. 86,048 113,115
80,493
----------- -----------
-----------
Income before interest charges...................... 537,723 553,545
470,005
----------- -----------
-----------
INTEREST CHARGES:
Interest on long-term debt........................... 333,163 275,819
205,585
Other interest ...................................... 13,059 3,503
4,145
Deferred nuclear plants return--
borrowed funds <F6>(Note 1)......................... (54,462) (28,838)
(19,023)
----------- ---------
----------
Interest charges, net .............................. 291,760 250,484
190,707
-----------
- ---------- -----------
Income before cumulative effect of accounting change 245,963 303,061
279,298
CUMULATIVE EFFECT OF ACCOUNTING CHANGE <F6>(Note 1) .. 51,681 --
--
----------- -----------
-----------
Income before preferred dividends of subsidiaries 297,644 303,061
279,298
PREFERRED DIVIDENDS OF SUBSIDIARIES .................. 47,691 47,007
42,589
----------- -----------
-----------
NET INCOME ........................................... 249,953 256,054
236,709
Tax benefit of Employee Stock Ownership
Plan dividends <F12>(Note 7)........................ -- 7,348
--
----------- -----------
-----------
EARNINGS FOR COMMON SHARES ........................... $ 249,953 $ 263,402
$ 236,709
=========== ===========
===========
EARNINGS PER COMMON SHARE:
Before cumulative effect of accounting change ........ $ 1.60 $ 2.02
$ 2.12
Cumulative effect of accounting change <F6>(Note 1) .. .42 --
--
-----------
- ----------- -------------
TOTAL EARNINGS PER COMMON SHARE....................... $ 2.02 $ 2.02
$2.12
============
============= =============
COMMON SHARES OUTSTANDING (AVERAGE) <F12>(Note 7) .... 123,947,631 130,403,488
111,453,550
============
============= =============
|
The accompanying notes are an integral part of these financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 1993 1992
1991
---- ----
----
(Thousands of
Dollars)
CASH FLOWS FROM OPERATIONS:
Income before preferred dividends of subsidiaries.......... $ 297,644 $
303,061 $ 279,298
Adjusted for the following:
Depreciation.............................................. 331,382
298,528 245,853
Deferred income taxes and investment tax credits, net..... 63,506
103,089 109,820
Deferred nuclear plants return, net of amortization ...... 18,189
(3,619) 4,687
Deferred energy costs, net of amortization ............... 90,063
(52,298) (128,047)
Amortization of regulatory asset--PSNH ................... 89,822
51,836 --
Deferred conservation and load-management,
net of amortization..................................... (23,955)
(31,989) (47,402)
Other sources of cash .................................... 141,766
111,036 60,530
Other uses of cash........................................ (32,694)
(94,192) (34,771)
Changes in working capital:
Receivables and accrued utility revenues................... 2,797
3,162 (57,289)
Fuel, materials, and supplies.............................. 10,126
(9,686) 33,191
Accounts payable........................................... (678)
(38,889) 83,891
Accrued taxes ............................................. (97,789)
(8,627) (46,208)
Other working capital (excludes cash) ..................... 30,010
30,109 29,369
----------
- ---------- ----------
Net cash flows from operations.............................. 920,189
661,521 532,922
----------
- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Common shares.............................................. 22,252
271,128 42,420
Long-term debt............................................. 924,650
1,141,995 197,207
Preferred stock............................................ 80,000
75,000 --
Financing expenses ........................................ (5,868)
(16,234) (2,067)
Net increase (decrease) in short-term debt ................ (179,240)
182,240 (125,615)
Reacquisitions and retirements of long-term debt........... (1,051,501)
(744,771) (112,990)
Reacquisitions and retirements of preferred stock ......... (116,496)
(106,893) (6,498)
Cash dividends on preferred stock.......................... (47,691)
(49,399) (42,589)
Cash dividends on common shares............................ (218,179)
(229,074) (195,056)
----------
- ---------- ----------
Net cash flows from (used for) financing activities......... (592,073)
523,992 (245,188)
----------
- ---------- ----------
INVESTMENT ACTIVITIES:
Investment in plant:
Electric and other utility plant.......................... (275,741)
(311,892) (237,416)
Nuclear fuel.............................................. (33,202)
3,498 (5,097)
----------
- ---------- ----------
Net cash flows used for investments in plant............... (308,943)
(308,394) (242,513)
Acquisition of the net assets of PSNH <F6>(Note 1)......... --
(828,237) --
Other investment activities, net........................... (32,811)
(40,507) (24,252)
----------
- ---------- ----------
Net cash flows used for investments ........................
(341,754)(1,177,138) (266,765)
----------
- ---------- ----------
NET INCREASE (DECREASE) IN CASH FOR THE PERIOD.............. (13,638)
8,375 20,969
Cash and special deposits--beginning of period.............. 45,646
37,271 16,302
----------
- ---------- ----------
Cash and special deposits--end of period ................. $ 32,008 $
45,646 $ 37,271
==========
========== ==========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the year for:
Interest, net of amounts capitalized during construction ..$ 325,552 $
218,515 $ 201,021
==========
========== ===========
Income taxes...............................................$ 142,669 $
96,821 $ 116,334
==========
========== ===========
Increase in obligations:
Niantic Bay Fuel Trust.....................................$ 49,509 $
38,172 $ 18,156
==========
========== ===========
Capital leases.............................................$ 4,696 $
2,985 $ 11,107
==========
========== ===========
|
The accompanying notes are an integral part of these financial statements.
CONSOLIDATED STATEMENTS OF INCOME TAXES
For the Years Ended December 31, 1993
1992 1991
<F6>(Note
1)
--------
- -------- --------
(Thousands of Dollars)
The components of the federal and state income tax provisions
charged to operations are:
Current income taxes:
Federal.............................................................$ 99,591
$ 74,768 $ 44,417
State............................................................... 50,809
31,583 21,446
---------
- --------- ---------
Total current ...................................................... 150,400
106,351 65,863
---------
- --------- ---------
Deferred income taxes, net:
Federal............................................................. 87,105
101,025 88,659
State............................................................... (10,058)
12,550 28,007
---------
- --------- ---------
Total deferred..................................................... 77,047
113,575 116,666
---------
- --------- ---------
Investment tax credits, net.......................................... (13,541)
(8,182) (7,869)
---------
- --------- ---------
Total income tax expense..............................................$ 213,906
$211,744 $174,660
=========
========= =========
The components of total income tax expense are classified as follows:
Income taxes charged to operating expenses ..........................$ 243,854
$246,227 $190,556
Income taxes associated with the amortization of
deferred nuclear plants return--borrowed funds...................... --
(17,566) (15,208)
Income taxes associated with the allowance
for funds used during construction (AFUDC)
and deferred nuclear plants return--borrowed funds ................. --
19,870 14,185
Other income taxes--credit .......................................... (29,948)
(36,787) (14,873)
---------
- --------- ---------
Total income tax expense..............................................$ 213,906
$211,744 $174,660
=========
========= =========
Deferred income taxes are comprised of the tax effects
of temporary differences as follows:
Depreciation, leased nuclear fuel, settlement credits,
and disposal costs..................................................$ 79,288
$ 66,683 $ 55,275
Energy adjustment clauses ........................................... (39,660)
22,484 48,892
Conservation and load management .................................... 8,117
13,635 22,175
Alternative minimum tax ............................................. 2,306
(13,462) --
Early retirement program ............................................ (7,715)
220 (11,612)
Organization costs................................................... --
10,042 (2,231)
Deferred tax asset associated with net operating losses.............. 25,438
9,335 --
Other................................................................ 9,273
4,638 4,167
---------
- -------- ---------
Deferred income taxes, net............................................$ 77,047
$113,575 $116,666
=========
========= =========
A reconciliation between income tax expense and the expected tax expense
at the applicable statutory rates is as follows:
Expected federal income tax at 35 percent of pretax income for
1993 and at 34 percent for 1992 and 1991............................$ 179,043
$175,033 $154,346
Tax effect of differences:
Depreciation differences............................................ 21,319
14,090 9,203
Deferred nuclear plants return--other funds ........................ (13,486)
(15,402) (13,422)
Amortization of deferred Millstone 3 return--other funds............ 21,988
17,367 15,793
Amortization of regulatory asset--PSNH ............................. 23,764
17,624 --
Seabrook intercompany loss ......................................... (19,176)
(11,903) --
Investment tax credit amortization.................................. (13,541)
(8,182) (7,869)
State income taxes, net of federal benefit.......................... 26,488
29,130 32,814
Property tax differences ........................................... (13,514)
(901) 502
Other, net.......................................................... 1,021
(5,112) (16,707)
---------
- --------- ---------
Total income tax expense..............................................$ 213,906
$211,744 $174,660
=========
========= =========
|
The accompanying notes are an integral part of these financial statements.
CONSOLIDATED BALANCE SHEETS
At December 31, 1993
1992
----
----
(Thousands of
Dollars)
ASSETS
UTILITY PLANT, AT ORIGINAL COST:
Electric................................................ $ 9,119,285 $
8,951,305
Other................................................... 146,228
132,755
-----------
- -----------
9,265,513
9,084,060
Less: Accumulated provision for depreciation............. 3,021,987
2,749,034
-----------
- -----------
6,243,526
6,335,026
Construction work in progress ........................... 208,084
164,374
Nuclear fuel, net........................................ 218,051
220,252
-----------
- -----------
Total net utility plant.............................. 6,669,661
6,719,652
-----------
- -----------
OTHER PROPERTY AND INVESTMENTS:
Nuclear decommissioning trusts, at cost.................. 206,179
170,058
Investments in regional nuclear generating
companies, at equity.................................... 81,029
80,619
Investments in transmission companies, at equity......... 26,536
27,655
Other, at cost........................................... 36,882
39,483
-----------
- -----------
350,626
317,815
-----------
- -----------
CURRENT ASSETS:
Cash and special deposits <F6>(Note 1) .................. 32,008
45,646
Receivables, less accumulated provision for uncollectible
accounts of $14,629,000 in 1993 and $13,255,000 in 1992. 357,449
370,834
Accrued utility revenues ................................ 150,794
140,206
Fuel, materials, and supplies, at average cost .......... 194,968
205,094
Recoverable energy costs, net--current portion <F6>(Note 1) 667
75,539
Prepayments and other.................................... 34,611
26,009
-----------
- -----------
770,497
863,328
-----------
- -----------
DEFERRED CHARGES:
Regulatory asset--income taxes, net <F6>(Note 1) ....... 1,183,716
--
Regulatory asset--PSNH <F6>(Note 1) .................... 769,498
868,716
Deferred costs--nuclear plants <F6>(Note 1)............. 294,004
253,212
Unrecovered contract obligation--YAEC <F9>(Note 3)...... 132,826
154,879
Recoverable energy costs, net <F6>(Note 1).............. 148,789
164,598
Deferred conservation and load-management costs......... 111,442
87,487
Deferred DOE assessment <F6>(Note 1).................... 53,476
56,715
Amortizable property investments........................ 34,229
47,921
Unamortized debt expense ............................... 37,444
44,874
Other................................................... 111,956
145,143
-----------
- -----------
2,877,380
1,823,545
-----------
- -----------
TOTAL ASSETS.............................................. $10,668,164 $
9,724,340
===========
===========
|
The accompanying notes are an integral part of these financial statements.
At December 31, 1993
1992
----
- ----
(Thousands of
Dollars)
CAPITALIZATION AND LIABILITIES
CAPITALIZATION: (See Consolidated Statements of Capitalization)
Common shareholders' equity (See Note <F4>(a)-Consolidated
Statements Of Common Shareholders' Equity):
Common shares, $5 par value-authorized 225,000,000 shares;
134,207,025 shares issued and 124,326,836 shares outstanding
in 1993 and 133,862,919 shares issued and outstanding in 1992 ..$ 671,035
$ 669,315
Capital surplus, paid in........................................ 901,740
897,317
Deferred benefit plan--employee stock ownership plan <F12>(Note 7) (228,205)
(240,399)
Retained earnings............................................... 879,518
847,744
-----------
-----------
Total common shareholders' equity ........................... 2,224,088
2,173,977
Preferred stock not subject to mandatory redemption............. 239,700
304,696
Preferred stock subject to mandatory redemption................. 380,500
349,500
Long-term debt.................................................. 4,045,468
4,316,678
-----------
-----------
Total capitalization......................................... 6,889,756
7,144,851
-----------
-----------
OBLIGATIONS UNDER CAPITAL LEASES................................ 171,004
188,094
-----------
-----------
CURRENT LIABILITIES:
Notes payable to banks ........................................ 173,500
220,000
Commercial paper .............................................. --
132,740
Long-term debt and preferred stock--current portion............ 420,142
276,741
Obligations under capital leases--current portion ............. 72,756
78,006
Accounts payable............................................... 229,118
229,796
Accrued taxes ................................................. 40,501
138,290
Accrued interest............................................... 69,682
72,749
Accrued pension benefits....................................... 82,513
53,340
Other.......................................................... 83,853
71,514
-----------
-----------
1,172,065
1,273,176
-----------
-----------
DEFERRED CREDITS:
Accumulated deferred income taxes <F6>(Note 1) ................ 1,911,981
567,353
Accumulated deferred investment tax credits.................... 201,635
215,255
Deferred contract obligation--YAEC <F9>(Note 3)................ 132,826
154,879
Deferred DOE obligation <F6>(Note 1)........................... 43,034
56,715
Other.......................................................... 145,863
124,017
-----------
-----------
2,435,339
1,118,219
-----------
-----------
COMMITMENTS AND CONTINGENCIES <F13>(Note 8)
TOTAL CAPITALIZATION AND LIABILITIES ........................... $10,668,164
$ 9,724,340
===========
===========
|
The accompanying notes are an integral part of these financial statements.
CONSOLIDATED STATEMENTS OF CAPITALIZATION
At December 31,
1993 1992
- ---- ----
(Thousands of Dollars)
COMMON SHAREHOLDERS' EQUITY (See Consolidated Balance Sheets).............
$2,224,088 $2,173,977
- ---------- ----------
CUMULATIVE PREFERRED STOCK OF SUBSIDIARIES:
$25 par value--authorized 36,600,000 shares at December 31, 1993 and 1992;
outstanding 13,220,000 shares in 1993 and 15,280,000 shares in 1992
$50 par value--authorized 9,000,000 shares at December 31, 1993 and 1992;
outstanding 5,424,000 shares in 1993 and 5,123,925 shares in 1992
$100 par value--authorized 1,000,000 shares at December 31, 1993 and 1992;
outstanding 200,000 shares in 1993 and 1992
Current Redemption Current Shares
Dividend Rates Prices <F1>(a) Outstanding
-------------- ------------------ --------------
NOT SUBJECT TO MANDATORY REDEMPTION:
$25 par value--Adjustable Rate $ 25.00 4,140,000.....
103,500 103,500
$50 par value--$1.90 to $4.48 $ 50.50 to $ 54.00 2,324,000.....
116,200 181,196
$100 par value--$7.72 $103.51 200,000.....
20,000 20,000
- ---------- ----------
Total Preferred Stock Not Subject to Mandatory Redemption...............
239,700 304,696
- ---------- ----------
SUBJECT TO MANDATORY REDEMPTION: <F2>(b)
$25 par value--$1.90 to $2.65 $ 25.00 to $ 26.14 9,080,000.....
227,000 278,500
$50 par value--$2.65 to $3.615 $ 51.00 to $ 52.41 3,100 000.....
155,000 75,000
- ---------- ----------
Total Preferred Stock Subject to Mandatory Redemption...................
382,000 353,500
Less: Preferred Stock to be redeemed within one year....................
1,500 4,000
- ---------- ----------
Preferred Stock Subject to Mandatory Redemption, Net....................
380,500 349,500
- ---------- ----------
LONG-TERM DEBT: <F3>(c)
First Mortgage Bonds--
Maturity Interest Rate
-------- -------------
1993 4.25% to 8.50% ..........................................
-- 140,000
1994 4.25% to 4.50% ..........................................
182,000 182,000
1995 9.25%....................................................
34,650 94,400
1996 8.875%...................................................
172,500 172,500
1997 5.63% to 7.63%...........................................
265,000 265,000
1998 6.50% to 9.17%...........................................
290,000 290,000
1999-2003 5.75% to 9.05% ..........................................
1,065,000 885,000
2004-2008 8.75% to 9.375% .........................................
-- 220,000
2016-2019 7.38% to 10.13% .........................................
303,569 304,235
2023-2025 7.38% to 7.50% ..........................................
225,000 --
- ---------- ----------
Total First Mortgage Bonds ..........................................
2,537,719 2,553,135
- ---------- ----------
Other Long-Term Debt--
Pollution Control Notes and Other Notes--
1996 Adjustable Rate..........................................
235,000 329,000
1998 5.9% ....................................................
-- 7,650
2000-2004 15.23% and Adjustable Rate...............................
205,000 220,000
2005-2007 6.5% to 8.58% ...........................................
245,000 266,000
2013-2017 Adjustable Rate..........................................
23,400 379,500
2018-2022 7.17% to 7.65% and Adjustable Rate.......................
602,785 577,785
2028 Adjustable Rate..........................................
369,300 --
- ---------- ----------
Total Pollution Control Notes and Other Notes........................
1,680,485 1,779,935
Fees and interest due for spent fuel disposal costs....................
168,055 162,981
Other..................................................................
86,731 98,716
- ---------- ----------
Total Other Long-Term Debt...........................................
1,935,271 2,041,632
- ---------- ----------
Unamortized premium and discount, net .................................
(8,880) (5,348)
- ---------- ----------
Total Long-Term Debt..................................................
4,464,110 4,589,419
Less amounts due within one year......................................
418,642 272,741
- ---------- ----------
Long-Term Debt, Net ..................................................
4,045,468 4,316,678
- ---------- ----------
TOTAL CAPITALIZATION....................................................
$6,889,756 $7,144,851
========== ==========
|
The accompanying notes are an integral part of these financial statements.
NOTES TO CONSOLIDATED STATEMENTS OF CAPITALIZATION
<F1> (a) Each of these series is subject to certain refunding limitations for the first five years after they were issued. Redemption prices reduce in future years.
<F2> (b) Changes in Preferred Stock Subject to Mandatory Redemption:
(Thousands of Dollars)
Balance at January 1, 1991 . . . . . . $176,892
Reacquisitions and Retirements . . . (6,498)
--------
Balance at December 31, 1991 . . . . . 170,394
Issues . . . . . . . . . . . . . . . 75,000
PSNH stock transferred . . . . . . . 125,000
Reacquisitions and Retirements . . . (16,894)
--------
Balance at December 31, 1992 . . . . . 353,500
Issues . . . . . . . . . . . . . . . 80,000
Reacquisitions and Retirements . . . (51,500)
--------
Balance at December 31, 1993 . . . . . $382,000
========
|
The minimum sinking-fund provisions of the series subject to mandatory redemption aggregate approximately $1,500,000 in 1994, $5,300,000 in 1995 and 1996, $30,300,000 in 1997, and $34,000,000 in 1998. In case of default on sinking-fund payments, no payments may be made on any junior stock by way of dividends or otherwise (other than in shares of junior stock) so long as the default continues. If a subsidiary is in arrears in the payment of dividends on any outstanding shares of preferred stock, the subsidiary would be prohibited from redemption or purchase of less than all of the preferred stock outstanding.
<F3>(c) Long-term debt maturities and cash sinking-fund requirements, excluding fees and interest due for spent fuel disposal costs, on debt outstanding at December 31, 1993 for the years 1994 through 1998 are approximately $293,800,000, $170,900,000, $265,100,000, $314,300,000, and $329,700,000, respectively. Also, $125,000,000 of first mortgage bonds outstanding at December 31, 1993 had been called in December 1993 for redemption in 1994. In addition, there are annual 1 percent sinking- and improvement-fund requirements of approximately $17,100,000 for 1994, $15,400,000 for 1995, $15,000,000 for 1996 and 1997, and $12,400,000 for 1998. Such sinking- and improvement-fund requirements may be satisfied by the deposit of cash or bonds or by certification of property additions.
Essentially all utility plant of The Connecticut Light and Power Company (CL&P), Public Service Company of New Hampshire (PSNH), Western Massachusetts Electric Company (WMECO), and North Atlantic Energy Corporation (NAEC), wholly owned subsidiaries of Northeast Utilities (NU), is subject to the liens of their respective first mortgage bond indentures. In addition, CL&P and WMECO have secured $369,300,000 of pollution control notes with second mortgage liens on Millstone 1, junior to the liens of their respective first mortgage bond indentures. PSNH's two bank facilities, the Term Loan and the Revolving Credit Facility, have a second lien, junior to the lien of its first mortgage bond indenture, on all PSNH property located in New Hampshire. At December 31, 1993, the principal amount outstanding under the Term Loan was $235,000,000. At December 31, 1993, there were no borrowings under the Revolving Credit Facility.
The system companies have entered into interest-rate cap contracts to reduce the potential impact of upward changes in interest rates on certain variable-rate tax-exempt pollution control revenue bonds held by CL&P, PSNH, and WMECO, as well as a portion of the PSNH Variable-Rate Term Loan. Approximately $617,000,000 of total outstanding long-term variable-rate debt is secured by these interest-rate caps. The total cost of the interest-rate caps for 1993 was approximately $4,100,000, the costs of which are amortized over the terms of the contracts, which are from one to three years. The fair market value of outstanding interest- rate cap contracts as of December 31, 1993 is approximately $605,000.
Concurrent with the issuance of PSNH's Series A and B First Mortgage Bonds, PSNH entered into financing arrangements with the Industrial Development Authority of the state of New Hampshire (IDA). Pursuant to these arrangements, the IDA issued five series of Pollution Control Revenue Bonds (PCRBs) and loaned the proceeds to PSNH. At December 31, 1993, $516,500,000 of the PCRBs were outstanding. PSNH's obligation to repay each series of PCRBs is secured by a series of First Mortgage Bonds that were issued under its indenture. Each such series of First Mortgage Bonds contains terms and provisions with respect to maturity, principal payment, interest rate, and redemption that correspond to those of the applicable series of PCRBs; for financial reporting purposes, these bonds would not be considered outstanding unless PSNH fails to meet its obligations under the PCRBs.
Fees and interest due for spent fuel disposal costs are scheduled to be paid to the United States Department of Energy just prior to the first delivery of prior-period spent fuel, which is anticipated to be in 1998. Until such payment is made, the outstanding balance will continue to accrue interest at the three-month Treasury Bill Yield Rate. For additional information, see <F6> Note 1 of the accompanying Notes To
Consolidated Financial Statements.
CONSOLIDATED STATEMENTS OF COMMON SHAREHOLDERS' EQUITY
Deferred
Benefit
Capital Plan-
Retained
Common Surplus, ESOP
Earnings
Shares<F4>(a) Paid In <F12>(Note 7)
<F5>(b) Total
------------ -------- --------
- ---------- -----
(Thousands of Dollars)
BALANCE AT JANUARY 1, 1991............ $ 548,080 $ 469,647 $ -- $
773,031 $ 1,790,758
Net income for 1991..................
236,709 236,709
Cash dividends on common shares--
$1.76 per share....................
(195,056) (195,056)
Issuance of 7,608,695 common shares,
$5 par value, to Employee Stock
Ownership Plan (ESOP) Trust....... 38,043 136,957 (175,000)
--
Issuance of 2,029,504 common shares,
$5 par value....................... 10,148 32,272
42,420
Capital stock expenses, net.......... 1,243
1,243
--------- --------- ----------
- -------- ----------
BALANCE AT DECEMBER 31, 1991.......... 596,271 640,119 (175,000)
814,684 1,876,074
Net income for 1992..................
256,054 256,054
Tax benefit of ESOP dividends .......
7,348 7,348
Cash dividends on common shares--
$1.76 per share....................
(229,074) (229,074)
Loss on retirement of
preferred stock....................
(1,268) (1,268)
Issuance of 11,417,305 common shares,
$5 par value....................... 57,087 204,440
261,527
Issuance of 3,191,489 common shares,
$5 par value, to ESOP Trust........ 15,957 59,043 (75,000)
--
Allocation of benefits--ESOP......... 9,601
9,601
Capital stock expenses, net.......... (6,285)
(6,285)
--------- --------- ----------
- -------- ----------
BALANCE AT DECEMBER 31, 1992 ......... 669,315 897,317 (240,399)
847,744 2,173,977
Net income for 1993.................
249,953 249,953
Cash dividends on common shares--
$1.76 per share...................
(218,179) (218,179)
Issuance of 344,106 common shares,
$5 par value...................... 1,720 6,538
8,258
Allocation of benefits--ESOP........ 1,800 12,194
13,994
Capital stock expenses, net......... (3,915)
(3,915)
--------- --------- ---------
- --------- ----------
BALANCE AT DECEMBER 31, 1993 ......... $ 671,035 $ 901,740 $(228,205)
$879,518 $ 2,224,088
========= ========= =========
========== ===========
<F4>(a) Northeast Utilities (NU), as part of its acquisition of Public Service
Company of New
Hampshire (PSNH), issued 8,430,910 warrants to former PSNH equity
security holders. Each
warrant, which will expire on June 5, 1997, entitles the holder to
purchase one share of NU
common at an exercise price of $24 per share. As of December 31, 1993,
455,394 shares had been
purchased through the exercise of warrants.
<F5>(b) Certain consolidated subsidiaries have dividend restrictions imposed by
their long-term debt
agreements. These restrictions also limit the amount of retained
earnings available for NU
common dividends. At December 31, 1993, these restrictions totaled
approximately $609.3
million.
|
The accompanying notes are an integral part of these financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<F6>
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
Northeast Utilities (NU or the company) is the parent company of the Northeast Utilities system (the system). The consolidated financial statements of the company include the accounts of all wholly owned subsidiaries. Significant intercompany transactions have been eliminated in consolidation.
On June 5, 1992 (Acquisition Date), NU acquired Public Service Company of New Hampshire (PSNH). As part of this transaction, PSNH transferred its 35.6 percent ownership interest in the Seabrook nuclear power plant to North Atlantic Energy Corporation (NAEC). PSNH and NAEC are now both wholly owned subsidiaries of NU. On June 29, 1992, North Atlantic Energy Service Corporation (NAESCO), a wholly owned subsidiary of NU, began management of the Seabrook 1 power plant as agent for the Seabrook joint owners. The acquisition of PSNH has been accounted for, in accordance with generally accepted accounting principles, as a purchase. Effective with the Acquisition Date, the consolidated financial statements of the company include, on a prospective basis, the financial position, the results of operations, and the statements of cash flows for PSNH and NAEC. For the 12 months ended December 31, 1993, PSNH and NAEC increased NU's consolidated operating revenues and earnings for common shares by $805.5 million and $65.0 million, respectively. For the 12 months ended December 31, 1992, PSNH and NAEC increased NU's consolidated operating revenues and earnings for common shares by $438.4 million and $34.6 million, respectively.
ACCOUNTING CHANGES
PROPERTY TAXES: Certain subsidiaries of NU, including The Connecticut Light and Power Company (CL&P) and Western Massachusetts Electric Company (WMECO), adopted a one-time change in the method of accounting for municipal property tax expense for their Connecticut properties. Most municipalities in Connecticut assess property values as of October 1. Prior to January 1, 1993, the NU system accrued Connecticut property tax expense over the period October 1 through September 30 based on the lien-date method. In the first quarter of 1993, these subsidiaries changed their method of accounting for Connecticut municipal property taxes to recognize the expense from July 1 through June 30, to match the payments and the services provided by the municipalities. This one-time change increased earnings for common shares and earnings per common shares by approximately $51.7 million and $0.42, respectively, in 1993.
INCOME TAXES: The company adopted the provisions of Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes (SFAS 109)," effective January 1, 1993. For more information on this change, see <F6> Note 1, "Summary of Significant Accounting Policies - Income Taxes."
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS: The company adopted the provisions of Statement of Financial Accounting Standards No. 106, "Employer's Accounting for Postretirement Benefits Other Than Pensions (SFAS 106)," effective January 1, 1993. For information on this change, see <F11> Note 6, "Postretirement Benefits Other Than Pensions."
EMPLOYEE STOCK OWNERSHIP PLAN: The company adopted the provisions of Statement of Position 93-6, "Employers' Accounting for Employee Stock Ownership Plans (SOP 93-6)." For information on this change, see <F12> Note 7, "Employee Stock Ownership Plan."
ACCOUNTING RECLASSIFICATIONS
Certain amounts in the accompanying consolidated financial statements of the company for the year ended December 31, 1992 and December 31, 1991 have been reclassified to conform with the December 31, 1993 presentation.
PUBLIC UTILITY REGULATION
NU is registered with the Securities and Exchange Commission (SEC) as holding company under the Public Utility Holding Company Act of 1935 (1935 Act), and it and its subsidiaries are subject to the provisions of the 1935 Act. Arrangements among the system companies, outside agencies, and other utilities covering interconnections, interchange of electric power, and sales of utility property are subject to regulation by the Federal Energy Regulatory Commission (FERC) and/or the SEC. The operating subsidiaries are subject to further regulation for rates and other matters by the FERC and/or applicable state regulatory commissions, and they follow the accounting policies prescribed by the respective commissions.
REVENUES
Other than special contracts, utility revenues are based on authorized rates applied to each customer's use of electricity. Rates can be changed only through a formal proceeding before the appropriate regulatory commission. At the end of each accounting period, CL&P, PSNH, and WMECO accrue an estimate for the amount of energy delivered but unbilled.
SPENT NUCLEAR FUEL DISPOSAL COSTS
Under the Nuclear Waste Policy Act of 1982, CL&P, PSNH, WMECO, and NAEC must pay the United States Department of Energy (DOE) for the disposal of spent nuclear fuel and high-level radioactive waste. Fees for nuclear fuel burned on or after April 7, 1983 are billed currently to customers and paid to the DOE on a quarterly basis. For nuclear fuel used to generate electricity prior to April 7, 1983 (prior-period fuel), payment may be made anytime prior to the first delivery of spent fuel to the DOE. At December 31, 1993, fees due to the DOE for the disposal of prior-period fuel were approximately $168.1 million, including interest costs of $85.9 million. As of December 31, 1993, approximately $166.8 million had been collected through rates.
Under the Energy Policy Act of 1992 (Energy Act), CL&P, PSNH, WMECO, and NAEC are assessed for their proportionate shares of the costs of decontaminating and decommissioning uranium enrichment plants operated by the DOE (D&D assessment). The Energy Act imposes an overall cap of $2.25 billion on the obligation of the commercial power industry and limits the annual special assessment to $150 million each year over a 15-year period beginning in 1993. The Energy Act also requires that regulators treat D&D assessments as a reasonable and necessary cost of fuel, to be fully recovered in rates, like any other fuel cost. The cap and annual recovery amounts will be adjusted annually for inflation. The D&D assessment is allocated among utilities based upon services purchased in prior years. At December 31, 1993, the system's remaining share of these costs is estimated to be approximately $53.5 million. CL&P, PSNH, WMECO, and NAEC have begun to recover these costs. Accordingly, NU has recognized these costs as a regulatory asset, with a corresponding obligation, on its Consolidated Balance Sheets.
INVESTMENTS AND JOINTLY OWNED ELECTRIC UTILITY PLANT
REGIONAL NUCLEAR GENERATING COMPANIES: CL&P, PSNH, and WMECO own common stock of four regional nuclear generating companies (Yankee companies). The system holds a 49.0 percent ownership interest in Connecticut Yankee Atomic Power Company (CY); a 38.5 percent ownership interest in Yankee Atomic Electric Company (YAEC); a 20.0 percent ownership interest in Maine Yankee Atomic Power Company (MY); and a 16.0 percent ownership interest in Vermont Yankee Nuclear Power Corporation (VY). The system's investments in the Yankee companies are accounted for on the equity basis. The electricity produced by the facilities that are operating is committed to the participants substantially on the basis of their ownership interests and is billed pursuant to contractual agreements. For more information on these agreements, see <F13> Note 8, "Commitments And Contingencies-Purchased Power Arrangements."
The 173-megawatt (MW) YAEC nuclear power plant was shut down permanently on February 26, 1992. For more information on the Yankee companies, see <F8> Note 3, "Nuclear Decommissioning."
MILLSTONE 3: CL&P, PSNH, and WMECO have a 68.02 percent joint-ownership interest in Millstone 3, a 1,149-MW nuclear generating unit. As of December 31, 1993, plant-in-service and the accumulated provision for depreciation included approximately $2.4 billion and $460.6 million, respectively, for the system's share of Millstone 3. The system's share of Millstone 3 expenses is included in the corresponding operating expenses on the accompanying Consolidated Statements Of Income.
SEABROOK: As of December 31, 1993, CL&P and NAEC have a 39.63 percent joint- ownership interest in Seabrook 1, a 1,150-MW nuclear generating unit. NAEC sells all of its share of the power generated by Seabrook 1 to PSNH under a long-term contract. As of December 31, 1993, plant-in-service and the accumulated provision for depreciation included approximately $877.3 million and $66.4 million, respectively, for the system's share of Seabrook 1. The system's share of Seabrook 1 expenses is included in the corresponding operating expenses on the accompanying Consolidated Statements Of Income. In February 1994, NAEC purchased a 0.4 percent share of Seabrook 1. See <F13> Note 8, "Commitments and Contingencies-PSNH Rate Agreement" for additional information.
HYDRO-QUEBEC: NU has a 22.66 percent equity-ownership interest, approximating $26.5 million, in two companies that transmit electricity imported from the Hydro-Quebec system in Canada. The two companies own and operate transmission and terminal facilities, which have the capability of importing up to 2,000 MW from the Hydro-Quebec system. See <F13> Note 8, "Commitments and Contingencies-Hydro-Quebec" for additional information about Hydro-Quebec.
REGULATORY ASSET - PSNH
The regulatory asset-PSNH represents the aggregate value placed by the rate agreement with the state of New Hampshire (Rate Agreement) on PSNH's assets in excess of the net book
value of PSNH's non-Seabrook assets and the $700- million value assigned to Seabrook by the Rate Agreement. The regulatory asset-PSNH was valued at approximately $920.6 million on the Acquisition Date. The Rate Agreement provides for the recovery, through rates, of the amortization of the regulatory asset-PSNH with a return each year on the unamortized portion of the asset. The Rate Agreement provides that $425 million of the regulatory asset-PSNH be amortized over the first seven years after PSNH's May 16, 1991 reorganization from bankruptcy (Reorganization Date), with the remaining amount to be amortized over the 20-year period after the Reorganization Date.
In 1993, an adjustment related to certain liabilities associated with the acquisition reduced the regulatory asset-PSNH by approximately $9.4 million. At December 31, 1993, the balance of the regulatory asset-PSNH was $769.5 million.
DEPRECIATION
The provision for depreciation is calculated using the straight-line method based on the estimated remaining lives of depreciable utility plant-in- service, adjusted for salvage value and removal costs, as approved by the appropriate regulatory agency. Except for major facilities, depreciation factors are applied to the average plant-in-service during the period. Major facilities are depreciated from the time they are placed in service. When plant is retired from service, the original cost of plant, including costs of removal, less salvage, is charged to the accumulated provision for depreciation. For nuclear production plants, the costs of removal, less salvage, that have been funded through external decommissioning trusts will be paid with funds from the trusts and charged to the accumulated reserve for decommissioning included in the accumulated provision for depreciation over the expected service life of the plants. See <F8> Note 3, "Nuclear Decommissioning," for additional information.
The depreciation rates for the several classes of electric plant-in-service are equivalent to a composite rate of 3.6 percent in 1993, 3.5 percent in 1992, and 3.6 percent in 1991.
INCOME TAXES
The tax effect of temporary differences (differences between the periods in which transactions affect income in the financial statements and the periods in which they affect the determination of income subject to tax) is accounted for in accordance with the ratemaking treatment of the applicable regulatory commissions. See Consolidated Statements Of Income Taxes on page 29 for the components of income tax expense.
In 1992, the Financial Accounting Standards Board (FASB) issued SFAS 109. SFAS 109 supersedes previously issued income tax accounting standards. NU adopted SFAS 109, on a prospective basis, during the first quarter of 1993. At December 31, 1993, the net deferred tax obligation relating to the adoption of SFAS 109 approximated $1.2 billion. A valuation reserve was not established. As it is probable that the increase in deferred tax liabilities will be recovered from customers through rates, NU also established a regulatory asset. SFAS 109 does not permit net-of-tax accounting. Accordingly, the company no longer utilizes net-of-tax accounting for the deferred nuclear plants return-borrowed funds and allowance for funds used during construction (AFUDC)--borrowed funds.
The temporary differences which give rise to the accumulated deferred tax obligation at December 31, 1993, are as follows:
(Thousands of Dollars)
Accelerated depreciation and other
plant-related differences . . . . . . . . $1,472,509
Net operating loss carryforwards . . . . . . (270,612)
The tax effect of net regulatory assets. . . 555,342
Other. . . . . . . . . . . . . . . . . . . . 154,742
----------
$1,911,981
==========
|
At December 31, 1993, PSNH has a net operating loss (NOL) carryforward of approximately $788 million, and an Alternative Minimum Tax (AMT) NOL carryforward of $600 million, both to be used against PSNH's federal taxable income and expiring between the years 1999 and 2007. PSNH also had Investment Tax Credit (ITC) carryforwards of $66 million, which expire between the years 1994 and 2005. The reorganization of PSNH under Chapter 11 of the United States Bankruptcy Code limits its ability to use its NOL and ITC carryforwards so that some portion may expire unused. Of the carryforward amounts indicated above, approximately $323 million of the NOL, $274 million of the AMT NOL, and $35 million of the ITC carryforwards are available for use subject to applicable limits of the Internal Revenue Code.
ENERGY ADJUSTMENT CLAUSES
CL&P: Retail electric rates include a fuel adjustment clause (FAC) under which fossil-fuel prices above or below base-rate levels are charged or credited to customers. Administrative proceedings are required each month to approve the FAC
charges or credits proposed for the following month. Monthly FAC rates are also subject to retroactive review and appropriate adjustments by the Connecticut Department of Public Utility Control (DPUC) each quarter after public hearings.
Beginning in 1979, the DPUC approved the use of a generation utilization adjustment clause (GUAC), which defers the effect on fuel costs caused by variations from specified composite nuclear generation capacity factors embedded in base rates. Generally, at the end of a 12-month period ending July 31 of each year, these deferrals are refunded to, or collected from, customers over the subsequent 11-month period beginning in September. Should the annual composite nuclear capacity factor fall below the 55 percent GUAC floor, CL&P has to apply to the DPUC for permission to recover the additional fuel expense associated with nuclear performance below 55 percent.
On January 5, 1994, the DPUC issued a decision which ordered CL&P to offset GUAC deferred charges against prior fuel overrecoveries. This disallowance resulted in a zero GUAC rate for the period September 1993 through August 1994. CL&P is considering an appeal of this decision.
The DPUC further ordered that any GUAC deferrals subsequent to July 1993 will be offset by any fuel overrecoveries whenever the composite nuclear capacity factor is below the level embedded in base rates. For the period August 1993 to December 1993, there have been no further adjustments necessary as a result of the DPUC's decision.
The January 5, 1994 DPUC decision creates some uncertainty about the future operation of the GUAC. CL&P has requested the DPUC to clarify the portion of the decision related to future calculation of the GUAC rate. Management does not expect the decision to have a material adverse impact on CL&P's future results of operations.
PSNH: The Rate Agreement includes a comprehensive fuel and purchased power adjustment clause (FPPAC) permitting PSNH to pass through to retail customers, for a ten-year period, the retail portion of differences between the fuel and purchase power costs assumed in the Rate Agreement and PSNH's actual costs, which include the costs under the Seabrook Power Contract. The cost components of the FPPAC are subject to a prudence review by the New Hampshire Public Utilities Commission (NHPUC).
WMECO: In Massachusetts, all retail fuel costs are collected on a current basis by means of a separate fuel-charge billing rate. As permitted by the Massachusetts Department of Public Utilities (DPU), WMECO defers the difference between forecasted and actual fuel cost recoveries until it is recovered or refunded quarterly under a retail fuel adjustment clause. Massachusetts law requires the establishment of an annual performance program related to fuel procurement and use. The program establishes performance standards for plants owned and operated by WMECO or plants in which WMECO has a life-of-unit contract. Therefore, revenues collected under the WMECO retail fuel adjustment clause are subject to refund pending review by the DPU. To date, there have been no significant adjustments as a result of this program.
For additional information, see <F13> Note 8, "Commitments And Contingencies--Nuclear Performance."
PHASE-IN PLANS
As discussed below,the system's operating companies are phasing into rates the recoverable portions of their investments in Millstone 3 and Seabrook 1. All plans are in compliance with Statement of Financial Accounting Standards No. 92, "Regulated Enterprises--Accounting for Phase-in Plans."
CL&P: As allowed by the DPUC, CL&P is phasing into rate base its allowed investment in Millstone 3. The DPUC has provided for full deferred earnings and carrying charges on the portion of CL&P's allowed investment in Millstone 3 not included in rate base. Through December 31, 1993, CL&P had placed into rate base $1.58 billion, or 90 percent, of its allowed investment in Millstone 3. The remaining $175.7 million, or 10 percent, is to be phased into rate base annually in two 5-percent steps beginning January 1, 1994. The amortization and recovery of deferrals through rates began January 1, 1988 and will end no later than December 31, 1995. As of December 31, 1993, $349.6 million of the deferred return, including carrying charges, has been recovered, and $161.9 million of the deferred return to date, plus carrying charges, remains to be recovered.
As allowed by the DPUC, CL&P phased into rate base its allowed investment in Seabrook 1. The DPUC provided for full deferred earnings and carrying charges on the portion of CL&P's allowed investment in Seabrook 1 not included in rate base. Through December 31, 1993, CL&P has placed into rate base its full allowed investment in Seabrook 1. The amortization and recovery of deferrals through rates began September 1, 1991 and will end no later than August 31, 1996. As of December 31, 1993, $15.8 million of the deferred return, including carrying
charges, has been recovered, and $24.0 million of the deferred return recorded to date, plus carrying charges,remains to be recovered.
WMECO: As of December 31, 1991, all of WMECO's recoverable investment in Millstone 3 was in rate base. Beginning in 1986, the DPU has permitted WMECO to recover the portion of its Millstone 3 investment representing the amount currently determined to be "unuseful" by the DPU ($23.6 million at December 31, 1993) over a ten-year period, without earning a return. On June 30, 1987, WMECO also began recovering the deferred return, including carrying charges, on the recoverable but not yet phased-in portion of its investment in Millstone 3. This recovery is taking place over a nine-year period. As of December 31, 1993, $65.4 million of the deferred return, including carrying charges, has been recovered, and $22.7 million of the deferred return, including carrying charges, remains to be recovered over the period ending June 30, 1995.
NAEC: As prescribed by the Rate Agreement, NAEC is phasing in its $700- million initial investment in Seabrook 1 (Initial Investment). As of December 31, 1993, the portion of the Initial Investment on which NAEC is entitled to earn a cash return was 55 percent and will increase by 15 percent in each of the next three years beginning May 15, 1994. Between the Reorganization Date and the Acquisition Date, PSNH recorded $50.9 million of deferred return on its investment in Seabrook 1. In accordance with the Rate Agreement, PSNH transferred the $50.9 million deferred return balance to NAEC along with the other Seabrook assets. NAEC recorded the $50.9 million as part of utility plant. From the Acquisition Date through December 31, 1993, NAEC recorded an additional $85.4 million of deferred return, which is recorded in deferred costs--nuclear plants on the Consolidated Balance Sheets. The deferred return on the excluded portion of the Initial Investment, including the $50.9 million, will be recovered with carrying charges beginning six months after the end of PSNH's fixed-rate period (which continues through May 1997) and will be fully recovered by May 15, 2001.
CASH AND SPECIAL DEPOSITS
Cash and special deposits at December 31, 1992 included $25 million in special deposits that was used to redeem $15 million of Holyoke Water Power Company's (HWP) Pollution Control Notes and $10 million of CL&P's Pollution Control Notes in 1993.
<F7>
2. LEASES
CL&P and WMECO have entered into the Niantic Bay Fuel Trust (NBFT) capital lease agreement to finance up to $530 million of nuclear fuel for Millstone 1 and 2 and their share of the nuclear fuel for Millstone 3. CL&P and WMECO make quarterly lease payments for the cost of nuclear fuel consumed in the reactors (based on a units-of-production method at rates which reflect estimated kilowatt-hours of energy provided) plus financing costs associated with the fuel in the reactors. Upon permanent discharge from the reactors, ownership of the nuclear fuel transfers to CL&P and WMECO.
The system companies have also entered into lease agreements, some of which are capital leases, for the use of substation equipment, data processing and office equipment, vehicles, nuclear control room simulators, and office space. The provisions of these lease agreements generally provide for renewal options.
Capital lease rental payments charged to operating expense were $105,623,000 in 1993, $81,376,000 in 1992, and $69,876,000 in 1991. Interest included in capital lease rental payments was $16,525,000 in 1993, $20,581,000 in 1992, and $22,677,000 in 1991. Operating lease rental payments charged to operating expense were $22,630,000 in 1993, $27,451,000 in 1992, and $23,571,000 in 1991.
Substantially all of the capital lease rental payments were made pursuant to the nuclear fuel lease agreement. Future minimum lease payments under the nuclear fuel capital lease cannot be reasonably estimated on an annual basis due to variations in the usage of nuclear fuel.
Future minimum rental payments, excluding annual nuclear fuel lease payments and executory costs, such as property taxes, state use taxes, insurance, and maintenance, under the long-term noncancelable leases, as of December 31, 1993, are provided on the next page.
- -----------------------------------------------------------------------------
Capital Operating
Year Leases Leases
- -----------------------------------------------------------------------------
(Thousands of Dollars)
1994 ......................... $ 9,800 $ 23,800
1995 ......................... 9,400 21,900
1996 ......................... 8,500 19,100
1997 ......................... 7,800 17,800
1998 ......................... 7,700 9,900
After 1998 ................... 57,000 34,000
------- --------
Future minimum lease
payments ................... 100,200 $126,500
========
Less amount representing
interest ................... 49,800
-------
Present value of future
minimum lease payments
for other than nuclear fuel. 50,400
Present value of future nuclear
fuel lease payments ........ 193,400
--------
Total ................... $243,800
========
<F8>
|
3. NUCLEAR DECOMMISSIONING
The company's 1992 decommissioning study concluded that complete and immediate dismantlement at retirement continues to be the most viable and economic method of decommissioning the three Millstone units. A 1991 Seabrook decommissioning study also confirmed that complete and immediate dismantlement at retirement is the most viable and economic method of decommissioning Seabrook 1. Decommissioning studies are reviewed and updated periodically to reflect changes in decommissioning requirements, technology, and inflation.
The estimated cost of decommissioning Millstone 1 and 2, in year-end 1993 dollars, is $385.8 million and $309.9 million, respectively. The estimated cost of decommissioning the system's ownership share of Millstone 3 and Seabrook 1, in year-end 1993 dollars, is $286.6 million and $145.1 million, respectively. Nuclear decommissioning costs are accrued over the expected service life of the units and are included in depreciation expense on the Consolidated Statements Of Income. Nuclear decommissioning costs amounted to $29.4 million in 1993, $28.1 million in 1992, and $20.8 million in 1991. Nuclear decommissioning, as a cost of removal, is included in the accumulated provision for depreciation on the Consolidated Balance Sheets.
CL&P and WMECO have established independent decommissioning trusts for their portions of the costs of decommissioning Millstone 1, 2, and 3. PSNH makes payments to an independent decommissioning trust for its portion of the costs of decommissioning Millstone 3. Under the terms of the Rate Agreement, PSNH is obligated to pay NAEC's share of Seabrook's decommissioning costs, even if the unit is shut down prior to the expiration of its operating license. CL&P's and NAEC's portion of the cost of decommissioning Seabrook 1 is paid to an independent decommissioning financing fund managed by the state of New Hampshire.
As of December 31, 1993, CL&P and WMECO have collected, through rates, $148.3 million and $37.6 million, respectively, toward the future decommissioning costs of their share of the Millstone units, of which $154.4 million has been transferred to external decommissioning trusts. As of December 31, 1993, PSNH has collected, through rates, approximately $1.2 million toward the future decommissioning costs of its share of Millstone 3, which has been transferred to an external decommissioning trust. As of December 31, 1993, CL&P and NAEC (including pre-Acquisition Date payments made by PSNH) have paid approximately $860,000 and $7.3 million, respectively, into Seabrook 1's decommissioning financing fund. Earnings on the decommissioning trusts and financing fund increase the decommissioning trust balance and the accumulated reserve for decommissioning. At December 31, 1993, the balance in the accumulated reserve for decommissioning amounted to $237.7 million.
Changes in requirements or technology, or adoption of a decommissioning method other than immediate dismantlement, could change decommissioning cost estimates.
CL&P, PSNH, and WMECO attempt to recover sufficient amounts through their allowed rates to cover their expected decommissioning costs. Only the portion of currently estimated total decommissioning costs that has been accepted by regulatory agencies is reflected in rates of the system companies. Although allowances for decommissioning have increased significantly in recent years, ratepayers in future years will need to increase their payments to offset the effects of any insufficient rate recoveries in previous years.
CL&P, PSNH, and WMECO, along with other New England utilities, have equity investments in the four Yankee companies. Each Yankee company owns a single nuclear generating unit. The estimated costs, in year-end 1993 dollars, of
decommissioning the system's ownership share of CY and MY are $166.6 million and $64.7 million, respectively. The cost to decommission VY is currently being reestimated. The cost of decommissioning the system's ownership share of VY is projected to range from $48 million to $56 million. As discussed in the following paragraph, YAEC's owners voted to permanently shut down the YAEC unit on February 26, 1992. Under the terms of the contracts with the Yankee companies, the shareholders-sponsors are responsible for their proportionate share of the operating costs of each unit, including decommissioning. The nuclear decommissioning costs of the Yankee companies are included as part of the cost of power by CL&P, PSNH, and WMECO.
YAEC has begun decommissioning its nuclear facility. On June 1, 1992, YAEC filed a rate filing to obtain FERC authorization to collect the closing and decommissioning costs and to recover the remaining investment in the YAEC nuclear power plant over the remaining period of the plant's Nuclear Regulatory Commission operating license. The bulk of these costs has been agreed to by the YAEC joint owners and approved, as a settlement, by FERC. At December 31, 1993, the estimated remaining costs amounted to $345.0 million, of which the NU system's share was approximately $132.8 million. Management expects that CL&P, PSNH, and WMECO will continue to be allowed to recover such FERC-approved costs from their customers. Accordingly, NU has recognized these costs as regulatory assets, with corresponding obligations, on its Consolidated Balance Sheets. The system has a 38.5-percent equity investment, approximating $9.3 million, in YAEC. The system had relied on YAEC for less that 1 percent of its capacity.
<F9>
4. SHORT-TERM DEBT
The system companies have various credit lines, totaling $485 million. NU, CL&P, WMECO, HWP, Northeast Nuclear Energy Company (NNECO), and The Rocky River Realty Company (RRR) have established a revolving-credit facility with a group of 17 banks. Under this facility, the participating companies may borrow up to an aggregate of $360 million. Individual borrowing limits are $175 million for NU, $360 million for CL&P, $75 million for WMECO, $8 million for HWP, $60 million for NNECO, and $25 million for RRR. The system companies may borrow funds on a short-term revolving basis using either fixed-rate loans or standby loans. Fixed rates are set using competitive bidding. Standby-loan rates are based upon several alternative variable rates. The system companies are obligated to pay a facility fee of 0.20 percent of each bank's total commitment under the three-year portion of the facility, representing 75 percent of the total facility, plus 0.135 percent of each bank's total commitment under the 364-day portion of the facility, representing 25 percent of the total facility. At December 31, 1993, there were $22.5 million in borrowings under the facility.
PSNH has credit lines totaling $125 million available through a revolving- credit agreement with a group of 22 banks. PSNH may borrow funds on a short- term revolving basis using either fixed-rate or standby loans. Fixed rates are set using competitive bidding. Standby-loan rates are based upon several alternative variable rates. PSNH is obligated to pay a facility fee of 0.25 percent per annum on the total commitment. At December 31, 1993, there were no borrowings under the agreement.
Maturities of the system companies' short-term debt obligations were for periods of three months or less.
The amount of short-term borrowings that may be incurred by the system companies is subject to periodic approval by the SEC under the 1935 Act. In addition, the charters of CL&P and WMECO contain provisions restricting the amount of short-term borrowings. Under the SEC and/or charter restrictions, NU, CL&P, PSNH, WMECO, and NAEC were authorized, as of January 1, 1993, to incur short-term borrowings up to a maximum of $175 million, $375 million, $125 million, $75 million, and $50 million, respectively.
<F10>
5. PENSION BENEFITS
The system's subsidiaries participate in a uniform noncontributory-defined benefit retirement plan covering all regular system employees. Benefits are based on years of service and employees' highest eligible compensation during five consecutive years of employment. Total pension cost, part of which was charged to utility plant, approximated $29,173,000 in 1993, $9,681,000 in 1992, and $29,517,000 in 1991. Pension costs for 1993 and 1991 include approximately $27,718,000 and $19,831,000, respectively, related to work force-reduction programs.
Currently, the subsidiaries fund annually an amount at least equal to that which will satisfy the requirements of the Employee Retirement Income Security Act and the Internal Revenue Code. Pension costs are determined using market-related values of pension assets. Pension assets are invested primarily in domestic and international equity securities and bonds.
The components of net pension cost are:
- -----------------------------------------------------------------------------
For the Years Ended
December 31, 1993 1992 1991
- -----------------------------------------------------------------------------
(Thousands of Dollars)
Service cost ................. $ 59,068 $ 32,662 $ 48,738
Interest cost ................ 81,456 78,092 71,041
Return on plan assets ........ (176,798) (83,371) (198,437)
Net amortization ............. 65,447 (17,702) 108,175
--------- -------- ---------
Net pension cost.............. $ 29,173 $ 9,681 $ 29,517
========= ======== =========
- -----------------------------------------------------------------------------
|
For calculating pension costs, the following assumptions were used:
- -----------------------------------------------------------------------------
For the Years Ended
December 31, 1993 1992 1991
- -----------------------------------------------------------------------------
Discount rate ................ 8.00% 8.41% 9.00%
Expected long-term rate
of return .................. 8.50 9.00 9.70
Compensation/progression
rate ....................... 5.00 6.56 7.50
- -----------------------------------------------------------------------------
The following table represents the plan's funded status reconciled to the
Consolidated Balance Sheets:
- -----------------------------------------------------------------------------
At December 31, 1993 1992
- -----------------------------------------------------------------------------
(Thousands of Dollars)
Accumulated benefit obligation,
including $817,421,000 of vested
benefits at December 31, 1993 and
$719,608,000 of vested benefits at
December 31, 1992 ................. $ 898,788 $ 764,432
========== ==========
Projected benefit obligation......... $1,141,271 $1,055,295
Less: Market value of
plan assets ....................... 1,340,249 1,226,468
---------- ----------
Market value in excess of projected
benefit obligation 198,978 171,173
Unrecognized transition amount ...... (16,735) (18,277)
Unrecognized prior service costs.... 10,287 8,658
Unrecognized net gain ............... (275,043) (214,894)
---------- ----------
Accrued pension liability ........... $ (82,513) $ (53,340)
========== ===========
- -----------------------------------------------------------------------------
The following actuarial assumptions were used in calculating the plan's year-
end funded status:
- -----------------------------------------------------------------------------
At December 31, 1993 1992
- -----------------------------------------------------------------------------
Discount rate .......................... 7.75% 8.00%
Compensation/progression rate .......... 4.75 5.00
- -----------------------------------------------------------------------------
|
The discount rate for 1993 was determined by analyzing the interest rates, as of December 31, 1993, of long-term, high-quality corporate debt securities having a duration comparable to the 13.8-year duration of the plan.
During 1993, NU's work force was reduced by approximately 7 percent through a work force-reduction program that involved an early retirement program and involuntary terminations. The cost of the program, which approximated $38 million, included pension, severance, and other benefits.
<F11>
6. POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
The system's subsidiaries provide certain health care benefits, primarily
medical and dental, and life insurance benefits through a benefit plan to
retired employees. These benefits are available for employees leaving the
system who are otherwise eligible to retire and have met specified service
requirements. Through December 31, 1992, the system recognized the cost of
these benefits as they were paid. In December 1990, the FASB issued SFAS
106. This new standard requires that the expected cost of postretirement
benefits, primarily health and life insurance benefits, must be charged to
expense during the years that eligible employees render service. Effective
January 1, 1993, the system adopted SFAS 106 on a prospective basis. Total
health care and life insurance cost, part of which was deferred or charged to
utility plant, approximated $50,140,000 in 1993, $15,557,000 in 1992, and
$10,815,000 in 1991.
On January 1, 1993, the accumulated postretirement benefit obligation (APBO) represented the system's prior-service obligation upon the adoption of SFAS 106. As allowed by SFAS 106, the system is amortizing its APBO of approximately $338 million over a 20-year period. For current employees and certain retirees, the total SFAS 106 benefit is limited to two times the 1993 health care costs. The SFAS 106 obligation has been calculated based on this assumption.
During 1993, certain subsidiaries of NU began funding SFAS 106 postretirement costs through external trusts. The subsidiaries are funding annually amounts that have been rate recovered and which also are tax-deductible under the Internal Revenue Code. The trust assets are invested primarily in equity securities and bonds.
The following table represents the plan's funded status reconciled to the Consolidated Balance Sheet at December 31, 1993:
Accumulated postretirement
benefit obligation of:
Retirees .......................... $(242,889)
Fully eligible active employees ... (540)
Active employees not eligible to
retire ............................ (67,955)
---------
Total accumulated postretirement
benefit obligation .................. (311,384)
Less: Market value of plan assets .... 12,642
---------
Accumulated postretirement benefit
obligation in excess of plan assets.. (298,742)
Unrecognized transition amount ........ 287,551
Unrecognized net gain ................. (5,150)
---------
Accrued postretirement benefit liability $ (16,341)
==========
|
The components of health care and life insurance costs for the year ended December 31, 1993 are:
- -----------------------------------------------------------------------------
(Thousands of Dollars)
Service cost .......................... $ 9,175
Interest cost ......................... 25,330
Return on plan assets ................. (220)
Net amortization ...................... 15,855
-------
Net health care and life insurance costs $50,140
=======
- ----------------------------------------------------------------------------
|
For measurement purposes, an 11.1-percent annual rate of increase in the per capita cost of covered health care benefits was assumed for 1993; the rate was assumed to decrease to 5.4 percent for 2002. The effect of increasing the assumed health care cost trend rates by one percentage point in each year would increase the accumulated postretirement benefit obligation as of December 31, 1993 by $22.6 million and the aggregate of the service and interest cost components of net periodic postretirement benefit cost for the year then ended by $2.3 million.
The weighted-average discount rate used in determining the accumulated postretirement benefit obligation was 7.75 percent. The discount rate for 1993 was determined by analyzing the interest rates, as of December 31, 1993, of long-term, high-quality corporate debt securities having a duration comparable to that of the plan. The trust holding the plan assets is subject to federal income taxes at a 35-percent tax rate. The expected long-term rate of return on plan assets after estimated taxes was 5.00 percent for health assets and 8.50 percent for life assets.
CL&P and WMECO have received approval from their respective regulators to defer SFAS 106 postretirement costs. All deferred costs are expected to be recovered within ten years. PSNH is currently recovering SFAS 106 costs.
<F12>
7. EMPLOYEE STOCK OWNERSHIP PLAN
During December 1991 and March 1992, NU issued a total of $250 million principal amount of unsecured and amortizing notes. The proceeds of the notes were loaned to the trustee of the Employee Stock Ownership Plan (ESOP) in exchange for the ESOP's notes. The ESOP trustee used the proceeds to buy approximately 10.8 million newly issued NU common shares from the company. These shares are allocated to employees at the same rate as the principal and interest on the ESOP notes is being paid. Pursuant to the ESOP trust agreement, Northeast Utilities Service Company, a wholly owned subsidiary of NU, directs the ESOP trustee as to the timing, amount, and source of principal and interest payments on the ESOP notes. Beginning January 1, 1992, NU common shares held by the ESOP trust were allocated to employees based upon participation in the system's 401(k) plan to a previously established tax-credit-based employee stock ownership plan (tax credit plan) using dividend reinvestment. Regular system employees of the company's subsidiaries are eligible to participate in the 401(k) plan. The tax-credit plan was merged into the 401(k) plan on March 9, 1992. For the 12-month period ending December 31, 1993, the ESOP issued approximately 530,000 NU common shares, with a cost of approximately $14.0 million to the 401(k) plan and to the tax-credit plan. As of December 31, 1993, the total number of allocated and unallocated ESOP shares is 899,284 and 9,880,189, respectively, with a corresponding fair market value of approximately $234.7 million on unallocated ESOP shares.
During 1993, NU made an additional contribution of approximately $7.6 million to the ESOP trust. The ESOP trust used approximately $23.7 million in dividends paid on NU common shares and the $7.6 million contribution from NU to
meet the principal and interest payments on the ESOP notes. During the 12-month period ending December 31, 1993, the ESOP trust incurred approximately $20.9 million in interest expense.
In November 1993, the American Institute of Certified Public Accountants issued SOP 93-6. This SOP is effective as of January 1, 1994 and has significantly changed the accounting for leveraged ESOP plans. This new standard requires that (1) any income tax benefits associated with the ESOP be offset directly against income tax expense, (2) dividends on allocated ESOP shares be charged directly to retained earnings, (3) dividends on unallocated ESOP shares be excluded from dividends for financial reporting purposes and, (4) unallocated ESOP shares be excluded from the earnings-per- common-share calculation.
In the fourth quarter of 1993, NU opted for early implementation of this SOP, effective as of January 1, 1993. The adoption of SOP 93-6 did not have a material impact on 1993 earnings per common share; however, 1993 earnings for common shares decreased by approximately $19.9 million as a result of adopting the SOP. Had the provisions of SOP 93-6 been applied to 1992 results of operations, the impact on earnings per common share would not have been material; however, 1992 earnings for common shares would have decreased by approximately $16.0 million.
<F13>
8. COMMITMENTS AND CONTINGENCIES
CONSTRUCTION PROGRAM
The construction program is subject to periodic review and revision. Actual construction expenditures may vary from such estimates due to factors such as revised load estimates, inflation, revised nuclear safety regulations, delays, difficulties in the licensing process, the availability and cost of capital, and the granting of timely and adequate rate relief by regulatory commissions, as well as actions by other regulatory bodies.
The system companies currently forecast construction expenditures (including AFUDC) of approximately $1.2 billion for the years 1994-1998, including $267.5 million for 1994. In addition, the system companies estimate that nuclear fuel requirements, including nuclear fuel financed through the NBFT, will be $449.7 million for the years 1994-1998, including $98.4 million for 1994. See <F7> Note 2, "Leases," for additional information about the financing of nuclear fuel.
NUCLEAR PERFORMANCE
Outages that occurred over the period October 1990 through February 1992 at the Millstone nuclear units have been the subject of five ongoing prudence reviews in Connecticut. CL&P has received final decisions on four of the reviews. The Office of Consumer Counsel has appealed decisions favorable to the company in two dockets. The exposure under these two dockets is approximately $66 million. The DPUC has suspended a third docket, pending the outcome of one of the appeals. The exposure under this docket is $26 million. The only remaining nuclear outage prudence docket before the DPUC is the docket established to review the 1992 outage at Millstone 2 to replace the steam generators. A decision is expected in late 1994. Management believes that its actions with respect to these outages have been prudent, and it does not expect the outcome of the prudence reviews to result in material disallowances.
PSNH RATE AGREEMENT
The Rate Agreement provided the financial basis for PSNH's Plan of Reorganization (the Plan). The Rate Agreement calls for seven successive 5.5 percent annual increases in PSNH's base rates for its charges to retail customers (the Fixed-Rate Period). The first four increases were put into effect on January 1, 1990, May 16, 1991, June 1, 1992, and June 1, 1993, respectively. The remaining three increases are scheduled to be put into effect annually beginning on June 1, 1994. PSNH's base rates, as adjusted to reflect the 5.5 percent annual increases, are intended to recover assumed increases in PSNH's costs and to provide PSNH with a reasonable cumulative return on investment over the Fixed-Rate Period. As discussed in <F6> Note 1, "Summary of Significant Accounting Policies--Energy Adjustment Clauses-- PSNH," the FPPAC protects PSNH from changes in fuel and purchased power costs. Although the Rate Agreement provides an unusually high degree of certainty as to PSNH's future retail rates, it also entails a risk when sales are lower than anticipated or if PSNH should experience unexpected increases in its costs other than those for fuel and purchased power, since PSNH has agreed that it will not seek additional rate relief during the Fixed-Rate Period, except in limited circumstances. However, in order to provide protection from significant variations from the costs assumed in base rates over the Fixed-Rate Period, the Rate Agreement establishes a return on equity (ROE) collar to prevent PSNH from earning a ROE in excess of an upper limit or below a lower limit. To date, PSNH's ROE has been within the limits of the ROE collar.
In January 1994, the NHPUC approved a Memorandum of Understanding (the Memorandum) between PSNH, NAEC, Northeast Utilities Service Company, and the Attorney General of the state of New Hampshire relating to certain issues which had arisen under the Rate Agreement. The Memorandum addressed, among other things, the tax legislation in New Hampshire, accounting treatments resulting from adoption of SFAS No. 106 and SFAS No. 109, and recovery for certain aspects of PSNH's settlement with the Vermont Electric Generation and Transmission Cooperative, Inc. (VEG&T), including the purchase by NAEC of VEG&T's 0.4 percent share of Seabrook. The Memorandum also provides for the establishment of a regulatory liability attributable to significant NOL carryforwards and establishes that such liability should be amortized over a six-year period beginning on May 1, 1993.
ENVIRONMENTAL MATTERS
The system is subject to regulation by federal, state, and local authorities with respect to air and water quality, handling and the disposal of toxic substances and hazardous and solid wastes, and the handling and use of chemical products. The system has an active environmental auditing program to prevent, detect, and remedy noncompliance with environmental laws or regulations and believes that it is in substantial compliance with current environmental laws and regulations. Changing environmental requirements could hinder the construction of new fossil-fuel generating units, transmission and distribution lines, substations, and other facilities. The cumulative long-term, economic cost impact of increasingly stringent environmental requirements cannot be estimated. Changing environmental requirements could also require extensive and costly modifications to the system's existing hydro, nuclear, and fossil-fuel generating units, and transmission and distribution systems, and could raise operating costs significantly. As a result, the system may incur significant additional environmental costs, greater than amounts included in cost of removal and other reserves, in connection with the generation and transmission of electricity and the storage, transportation, and disposal of by-products and wastes. The system may also encounter significantly increased costs to remedy the environmental effects of prior waste handling and disposal activities.
The system has recorded a liability for what it believes is, based upon information currently available, its estimated environmental remediation costs for waste disposal sites for which the system's subsidiaries expect to bear legal liability. To date, these costs have not been material with respect to the earnings or financial position of the company. In most cases, the extent of additional future environmental cleanup costs is not reasonably estimable due to factors such as the unknown magnitude of possible contamination, the appropriate remediation method, the possible effects of future legislation and regulation, the possible effects of technological changes related to future cleanup, and the difficulty of determining future liability, if any, for the cleanup of sites at which a system company may be determined to be legally liable by the federal or state environmental agencies. In addition, the system cannot estimate the potential liability for future claims that may be brought against it by private parties. However, considering known facts and existing laws and regulatory practices, management does not believe that such matters will have a material adverse effect on the system's financial position or future results of operations. At December 31, 1993, the liability recorded by the system for its estimated environmental remediation costs, excluding any possible insurance recoveries or recoveries from third parties, amounted to approximately $4 million. However, in the event that it becomes necessary to effect environmental remedies that are currently not considered probable, it is reasonably possible that, based on information currently available and management intent, that the upper limit of the system's environmental liability range could increase to approximately $9 million.
NUCLEAR INSURANCE CONTINGENCIES
The Price-Anderson Act currently limits public liability from a single incident at a nuclear power plant to $9.4 billion. The first $200 million of liability would be provided by purchasing the maximum amount of commercially available insurance. Additional coverage of up to a total of $8.8 billion would be provided by an assessment of $75.5 million per incident, levied on each of the 116 nuclear units that are currently subject to the Secondary Financial Protection Program in the United States, subject to a maximum assessment of $10 million per incident per nuclear unit in any year. In addition, if the sum of all public liability claims and legal costs arising from any nuclear incident exceeds the maximum amount of financial protection, each reactor operator can be assessed an additional 5 percent, up to $3.8 million, or $437.9 million in total, for all 116 nuclear units. The maximum assessment is to be adjusted at least every five years to reflect inflationary changes. Based on the ownership interests in Millstone 1, 2, and 3 and in Seabrook 1, the system's maximum liability would be $243.9 million per incident. In addition, through power purchase contracts with the four
Yankee regional nuclear generating companies, the system would be responsible for up to an additional $97.9 million per incident. Payments for the system's ownership interest in nuclear generating facilities would be limited to a maximum of $43.1 million per incident per year.
Insurance has been purchased from Nuclear Electric Insurance Limited (NEIL) to cover: (1) certain extra costs incurred in obtaining replacement power during prolonged accidental outages with respect to the system's ownership interests in Millstone 1, 2, and 3, Seabrook 1, and CY, and PSNH's Seabrook Power Contract with NAEC; and (2) the cost of repair, replacement, or decontamination or premature decommissioning of utility property resulting from insured occurrences with respect to the system's ownership interests in Millstone 1, 2, and 3, Seabrook 1, CY, MY, and VY. All companies insured with NEIL are subject to retroactive assessments if losses exceed the accumulated funds available to NEIL. The maximum potential assessments against the system with respect to losses arising during current policy years are approximately $13.9 million under the replacement power policies and $29.9 million under the property damage, decontamination, and decommissioning policies. Although the system has purchased the limits of coverage currently available from the conventional nuclear insurance pools, the cost of a nuclear incident could exceed available insurance proceeds.
Insurance has been purchased from American Nuclear Insurers/Mutual Atomic Energy Liability Underwriters, aggregating $200 million on an industry basis for coverage of worker claims. All companies insured under this coverage are subject to retrospective assessments of $3.2 million per reactor. The maximum potential assessments against the system with respect to losses arising during the current policy period are approximately $13.9 million.
FINANCING ARRANGEMENTS FOR THE REGIONAL NUCLEAR GENERATING COMPANIES
CL&P, PSNH, and WMECO believe that the regional nuclear generating companies may require additional external financing in the next several years for construction expenditures, nuclear fuel, possible refinancings, and other purposes. Although the ways in which each regional nuclear generating company will attempt to finance these expenditures have not been determined, CL&P, PSNH, and WMECO may be asked to provide direct or indirect financial support for one or more of these companies.
PURCHASED POWER ARRANGEMENTS
CL&P, PSNH, and WMECO purchase a portion of their electricity requirements pursuant to long-term contracts with the Yankee companies. Under the terms of their agreements, the companies pay their ownership shares (or entitlement shares) of generating costs, which include depreciation, operation and maintenance expenses, the estimated cost of decommissioning, and a return on invested capital. These costs are recorded as purchased power expense and recovered through the companies' rates. The total cost of purchases under these contracts for the units that are operating amounted to $169.0 million in 1993, $145.4 million in 1992, and $127.5 million in 1991. See <F6> Note 1, "Summary of Significant Accounting Policies--Investments And Jointly Owned Electric Utility Plant" and <F8> Note 3, "Nuclear Decommissioning" for more information on the Yankee companies.
CL&P, PSNH, and WMECO have entered into various arrangements for the purchase of capacity and energy from nonutility generators. Some of these arrangements have terms from 10 to 30 years, and require the companies to purchase the energy at specified prices. For the 12 months ended December 31, 1993, 14 percent of NU system load requirements was met by cogenerators and small-power producers. The total cost of purchases under these arrangements amounted to $426.8 million in 1993, $323.8 million in 1992, and $241.4 million in 1991. These costs are eventually recovered through the companies' rates.
In an effort to control cost and price increases from nonutility generators, PSNH is in the process of attempting to negotiate contract buyouts with 13 nonutility generators. Settlement agreements have been reached with certain nonutility generators and have been filed with the NHPUC for approval. Negotiations continue with the remaining nonutility generators.
PSNH entered into a buy-back agreement to purchase the capacity and energy of the New Hampshire Electric Cooperative, Inc. (NHEC) and to pay all of NHEC's Seabrook costs for a ten-year period which began July 1, 1990. The total cost of purchases under this agreement was $14.4 million in 1993, $13.8 million in 1992, and $11.6 million in 1991. Part of these costs is collected currently though the FPPAC and part is deferred for future collection in accordance with the Rate Agreement. In connection with the agreement, NHEC agreed to continue as a firm-requirements customer of PSNH for 15 years.
The estimated annual cost of the system's significant purchase power arrangements is provided below:
- -----------------------------------------------------------------------------
1994 1995 1996 1997 1998
- -----------------------------------------------------------------------------
(Millions of Dollars)
Yankee
Companies ............ $162.5 $169.0 $187.4 $172.2 $195.5
Nonutility
Generators ........... 463.2 477.4 491.9 502.7 514.2
NHEC ................. 14.6 15.2 16.2 24.4 32.4
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|
HYDRO-QUEBEC
Along with other New England utilities, CL&P, PSNH, WMECO, and HWP entered into agreements to support transmission and terminal facilities to import electricity from the Hydro-Quebec system in Canada. CL&P, PSNH, WMECO, and HWP, in the aggregate, are obligated to pay, over a 30-year period, their proportionate share of the annual operation, maintenance, and capital costs of these facilities, which are currently forecast to be $172.1 million for the years 1994-1998, including $37.2 million for 1994.
GREAT BAY POWER CORPORATION
CL&P and The United Illuminating Company, an unaffiliated company, have agreed to make certain advances up to $20 million to cover shortfalls in the funding of the 12.13 percent ownership interest in Seabrook 1 of Great Bay Power Corporation, an unaffiliated company. CL&P's share of this commitment is limited to 60 percent of the advances, or $12 million. As of December 31, 1993, $1,047,000 of advances from CL&P were outstanding under this agreement.
PROPERTY TAXES
PSNH and CY have significant court appeals pending for property tax assessments in the towns of Bow, New Hampshire, and Haddam, Connecticut, respectively, concerning production plant. In each case, the central issue is the fair market value of utility property. The company believes that properly derived assessments that recognize the effect of rate regulation will result in fair market values that approximate net book cost. This is the assessment level that taxing authorities are predominantly using throughout Connecticut, Massachusetts, and some of New Hampshire. However, towns such as Bow and Haddam advocate a method that approximates reproduction cost. The company estimates that, for the assessments in the towns where the appeals are pending, the change to a reproduction cost-methodology could result in property tax valuations approximately three times greater than values approximating net book cost. Although PSNH and CY are currently paying property taxes based on the higher assessments, to date, the higher assessments have not had a material adverse effect on them or the company.
The company believes that assessment levels that approximate net book cost accurately reflect the fair market value of regulated utility property. However, because of uncertainties associated with the court appeals and the potential impact of adverse court decisions on property tax assessment policy in New Hampshire and Connecticut, the company cannot estimate the potential effects of adverse court decisions on future results of operations or financial condition. However, the company believes that, based upon past regulatory practices, it would be allowed to recover any increased property tax assessments prospectively beginning at the time new rates are established.
<F14>
9. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used to estimate the fair value of each of the following financial instruments:
CASH, SPECIAL DEPOSITS, AND NUCLEAR DECOMMISSIONING TRUSTS: The carrying
amounts approximate fair value.
PREFERRED STOCK AND LONG-TERM DEBT: The fair value of the system's fixed- rate securities is based upon the quoted market price for those issues or similar issues. Adjustable rate securities are assumed to have a fair value equal to their carrying value.
The carrying amounts of the system's financial instruments and the estimated fair values are as follows:
- -----------------------------------------------------------------------------
Carrying Fair
At December 31, 1993 Amount Value
- -----------------------------------------------------------------------------
(Thousands of Dollars)
Preferred stock not subject to
mandatory redemption ................. $ 239,700 $ 202,826
Preferred stock subject to
mandatory redemption ................. 382,000 407,990
Long-term debt --
First Mortgage Bonds ................. 2,537,719 2,632,983
Other long-term debt ................. 1,935,271 2,055,433
- -----------------------------------------------------------------------------
Carrying Fair
At December 31, 1992 Amount Value
- -----------------------------------------------------------------------------
(Thousands of Dollars)
Preferred stock not subject to
mandatory redemption ................. $ 304,696 $ 257,510
Preferred stock subject to
mandatory redemption ................. 353,500 378,730
Long-term debt --
First Mortgage Bonds ................. 2,553,135 2,675,251
Other long-term debt ................. 2,041,632 2,141,154
- -----------------------------------------------------------------------------
|
The fair values shown above have been reported to meet disclosure requirements and do not purport to represent the amounts that those obligations would be settled at.
In May 1993, the FASB issued Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities (SFAS 115)." SFAS 115 requires companies to disclose the classification of investments in debt or equity securities based on management's intent and ability to hold the security. SFAS 115 also requires disclosure of the aggregate fair value, gross unrealized holding gains, gross unrealized holding losses and amortized cost basis by major security type. Effective January 1, 1994, the system will adopt SFAS 115 on a prospective basis. NU anticipates that the adoption of SFAS 115 will not have a material impact on future results of operations or financial position.
CONSOLIDATED STATEMENTS OF QUARTERLY FINANCIAL DATA (UNAUDITED)
QUARTER ENDED
1993 <F15>(a) March 31 June 30 September 30
December 31
-------- ------- ------------
- -----------
(Thousands of Dollars, except per share
data)
Operating Revenues .............. $958,192 $853,769 $915,239
$901,893
======== ======== ========
========
Operating Income................. $125,079 $ 89,510 $l02,725
$134,361
======== ======== ========
========
Net Income....................... $112,447 $ 14,759 $ 46,421 $
76,326
======== ======== ========
========
Earnings Per Common Share ....... $ 0.91 $ 0.12 $ 0.37 $
0.62
======== ======== ========
========
1992 <F16>(b)
Operating Revenues .............. $762,730 $718,746 $847,873
$887,525
======== ======== ========
========
Operating Income................. $112,690 $104,291 $115,077
$108,372
======== ======== ========
========
Net Income ...................... $ 75,018 $ 64,426 $ 61,355 $
55,255
======== ======== ========
========
Earnings Per Common Share........ $ 0.63 $ 0.50 $ 0.47 $
0.43
======== ======== ========
========
|
CONSOLIDATED GENERAL OPERATING STATISTICS
1993 1992<F16>(b) 1991 1990 1989
---- ----------- ---- ---- ----
System Capability-MW (c)<F17>.. 7,795.3 7,823.2 5,916.2 5,909.6
5,963.7
System Peak Demand-MW.......... 6,191.0 5,781.0 4,999.8 4,753.9
4,858.0
Nuclear Capacity-MW(c)<F17>.... 3,110.0 2,981.1 2,380.0 2,459.5
2,397.1
Nuclear Capacity Factor(%)(d)<F18> 80.8 63.7 50.6 69.4
68.6
Nuclear Contribution to Total
Energy Requirements (%) (c)<F17> 62.1 48.5 43.5 57.5
56.8
<F15>(a) Amounts have been restated from those previously reported due to the
adoption in the fourth
quarter of 1993 of a change in accounting for the company's ESOP,
effective January 1,1993.
<F16>(b) Effective with the June 5, 1992 acquisition of PSNH, the consolidated
financial and
statistical information of NU includes, on a prospective basis, the
operations of PSNH and
NAEC.
<F17>(c) Includes the system's entitlements in regional nuclear generating
companies, net of capacity
sales and purchases.
<F18>(d) Represents the average capacity factor for the nuclear units operated
by the NU system.
|
SELECTED CONSOLIDATED FINANCIAL DATA
1993 1992<F19>(a) 1991
1990
---- ------------ ----
----
(Thousands of Dollars, except percentages
and share data)
BALANCE SHEET DATA:
Net Utility Plant--
Continuing Operations................ $ 6,669,661 $ 6,719,652 $ 5,257,567
$ 5,265,168
Discontinued Gas Plant .............. -- -- --
--
Total Assets ......................... 10,668,164 9,724,340 6,781,746
6,601,371
Total Capitalization <F20>(b)......... 7,309,898 7,421,592 5,138,426
4,965,859
Obligations Under Capital Leases <F20>(b) 243,760 266,100 279,729
319,548
INCOME DATA:
Continuing Operations:
Operating Revenues................... $ 3,629,093 $ 3,216,874 $ 2,753,803
$ 2,616,319
Net Income.......................<F21> 249,953(c) 256,054 236,709
211,007
Earnings per Common Share........<F21> $2.02(c) $2.02 $2.12
$1.94
Discontinued Gas Operations:
Operating Revenues................... $ -- $ -- $ --
$ --
Net Income........................... -- -- --
--
Earnings per Common Share ........... $ -- $ -- $ --
$ --
COMMON SHARE DATA:
Earnings per Share...............<F21> $2.02(c) $2.02 $2.12
$1.94
Dividends per Share ................. $1.76 $1.76 $1.76
$1.76
Payout Ratio (%)..................... 87.1 87.1 83.0
90.7
Number of Shares
Outstanding--Average............<F22> 123,947,631(d)130,403,488 111,453,550
109,003,818
Market Price--High................... $28 7/8 $26 3/4 $24 3/8
$22 5/8
Market Price--Low.................... $22 $22 1/2 $19
$17 7/8
Market Price--Closing Price
(end of year) ..................... $23 3/4 $26 l/2 $23 5/8
$20
Book Value per Share(end of year).... $17.89 $16.24 $15.73
$16.34
Rate of Return Earned on Average
Common Equity (%) ................. 11.4 12.7 13.0
12.0
Dividend Yield (end of year) (%) .... 7.4 6.6 7.4
8.8
Market-to-Book Ratio (end of year)... 1.3 1.6 1.5
1.2
Price-Earnings Ratio (end of year)... 11.8 13.1 11.1
10.3
CAPITALIZATION: <F20> (b)
Common Shareholders' Equity......... $ 2,224,088 $ 2,173,977 $ 1,876,074
$ l,790,758
Preferred Stock Not Subject
to Mandatory Redemption........... 239,700 304,696 394,695
394,695
Preferred Stock Subject to
Mandatory Redemption ............. 382,000 353,500 170,394
176,892
Long-Term Debt...................... 4,464,110 4,589,419 2,697,263
2,603,514
----------- ----------- -----------
-----------
Total Capitalization ............... $ 7,309,898 $ 7,421,592 $ 5,138,426
$ 4,965,859
=========== =========== ===========
===========
<F19>(a) Effective with the June 5, 1992 acquisition of PSNH, the consolidated
financial and
statistical information of NU includes, on a prospective basis, the
operations of PSNH and
NAEC.
<F20>(b) Includes portions due within one year.
<F21>(c) Includes the cumulative effect of change in accounting for municipal
property tax expense.
<F22>(d) Decease in the number of shares results from a change in accounting for
Employee Stock
Ownership Plan shares.
|
1989 1988 1987
1986
---- ---- ----
----
(Thousands of Dollars, except percentages
and share data)
BALANCE SHEET DATA:
Net Utility Plant--
Continuing Operations................ $ 5,237,805 $ 5,267,629 $ 5,229,242
$ 5,120,812
Discontinued Gas Plant .............. -- 254,587 237,903
224,581
Total Assets ......................... 6,523,202 6,764,608 6,663,794
6,299,755
Total Capitalization <F20>(b)......... 4,954,083 5,123,504 4,956,080
4,743,914
Obligations Under Capital Leases <F20>(b) 341,246 410,352 432,714
441,183
INCOME DATA:
Continuing Operations:
Operating Revenues................... $ 2,473,571 $ 2,268,607 $ 2,038,554
$ 2,006,842
Net Income........................... 203,225 224,844 214,529
171,234
Earnings per Common Share............ $1.87 $2.07 $1.97
$1.58
Discontinued Gas Operations:
Operating Revenues................... $ 124,229 $ 200,243 $ 202,816
$ 203,814
Net Income........................... 5,858 9,078 14,616
10,705
Earnings per Common Share ........... $0.05 $0.08 $0.14
$0.10
COMMON SHARE DATA:
Earnings per Share................... $1.92 $2.15 $2.11
$1.68
Dividends per Share ................. $1.76 $1.76 $1.76
$1.68
Payout Ratio (%)..................... 91.7 81.9 83.4
100.0
Number of Shares
Outstanding--Average................ 108,669,106 108,669,106 108,669,106
108,352,517
Market Price--High................... $23 $23 1/8 $28
$28 1/4
Market Price--Low.................... $18 1/2 $18 1/4 $18
$17 3/8
Market Price--Closing Price
(end of year) ..................... $22 1/2 $19 7/8 $20
1/4 $24 1/4
Book Value per Share(end of year).... $16.13 $16.90 $16.53
$16.24
Rate of Return Earned on Average
Common Equity (%) ................. 11.8 13.0 12.8
10.4
Dividend Yield (end of year) (%) .... 7.8 8.9 8.7
6.9
Market-to-Book Ratio (end of year)... 1.4 1.2 1.2
1.5
Price-Earnings Ratio (end of year)... 11.7 9.2 9.6
14.4
CAPITALIZATION: <F20>(b)
Common Shareholders' Equity......... $ 1,752,395 $ 1,837,034 $ 1,796,293
$ l,765,090
Preferred Stock Not Subject
to Mandatory Redemption........... 394,695 344,695 291,195
291,195
Preferred Stock Subject to
Mandatory Redemption ............. 181,892 111,832 205,832
166,832
Long-Term Debt...................... 2,625,101 2,829,943 2,662,760
2,520,797
----------- ----------- -----------
-----------
Total Capitalization ............... $ 4,954,083 $ 5,123,504 $ 4,956,080
$ 4,743,914
=========== =========== ===========
===========
|
1985 1984
---- ----
(Thousands of Dollars, except percentages and share
data)
BALANCE SHEET DATA:
Net Utility Plant--
Continuing Operations................ $ 5,204,687 $ 4,650,428
Discontinued Gas Plant .............. 214,115 204,187
Total Assets ......................... 6,147,720 5,507,040
Total Capitalization ................. 4,681,995 4,319,404
Obligations Under Capital Leases<F20>(b) 440,587 392,593
INCOME DATA:
Continuing Operations:
Operating Revenues................... $ 1,969,225 $ 2,030,557
Net Income........................... 277,768 276,615
Earnings per Common Share............ $2.62 $2.73
Discontinued Gas Operations:
Operating Revenues................... $ 220,010 $ 224,430
Net Income........................... 10,773 12,323
Earnings per Common Share ........... $0.10 $0.12
COMMON SHARE DATA:
Earnings per Share................... $2.72 $2.85
Dividends per Share ................. $1.58 $1.48
Payout Ratio (%)..................... 58.1 51.9
Number of Shares
Outstanding--Average............... 106,221,131 101,398,235
Market Price--High.................. $18 3/4 $14 3/4
Market Price--Low.................... $13 3/4 $10 5/8
Market Price--Closing Price
(end of year) ..................... $17 3/4 $14 1/4
Book Value per Share(end of year).... $16.21 $15.07
Rate of Return Earned on Average
Common Equity (%) ................. 17.4 19.8
Dividend Yield (end of year) (%) .... 8.9 10.4
Market-to-Book Ratio (end of year)... 1.1 0.9
Price-Earnings Ratio (end of year)... 6.5 5.0
CAPITALIZATION: <F20>(b)
Common Shareholders' Equity......... $ 1,738,871 $ 1,575,705
Preferred Stock Not Subject
to Mandatory Redemption........... 291,195 291,195
Preferred Stock Subject to
Mandatory Redemption ............. 185,833 186,978
Long-Term Debt...................... 2,466,096 2,265,526
----------- -----------
Total Capitalization ............... $ 4,681,995 $ 4,319,404
=========== ===========
|
CONSOLIDATED ELECTRIC OPERATING STATISTICS
1993 1992<F23>(a) 1991
1990
---- ------------ ----
----
SOURCE OF ELECTRIC ENERGY:
(kWh-millions) <F24>(b)
Nuclear--Steam........................ 22,965 15,520 11,062
17,724
Fossil--Steam......................... 7,676 6,784 6,179
6,829
Hydro--Conventional................... 1,140 1,076 994
1,174
Hydro--Pumped Storage................. 1,269 1,221 1,173
1,250
Internal Combustion................... 8 9 25
11
Energy Used for Pumping .............. (1,749) (1,671) (1,605)
(1,688)
------ ------ ------
------
Net Generation..................... 31,309 22,939 17,828
25,300
Purchased and Net Interchange......... 10,499 14,165 13,430
6,249
Company Use and Unaccounted for ...... (2,591) (2,028) (1,958)
(1,938)
------ ------ ------
------
Net Energy Sold.................... 39,217 35,076 29,300
29,611
====== ====== ======
======
REVENUE: (thousands)
Residential........................... $1,385,818 $1,213,140 $ 995,098
$ 938,032
Commercial............................ 1,043,125 943,832 828,117
788,478
Industrial............................ 649,876 554,587 419,003
410,125
Other Utilities ...................... 383,129 346,791 366,231
346,087
Streetlighting and Railroads.......... 45,480 43,296 38,656
37,195
Miscellaneous......................... 60,008 59,465 49,539
42,882
---------- ---------- ----------
----------
Total Electric ................... 3,567,436 3,161,111 2,696,644
2,562,799
Other................................. 61,657 55,763 57,159
53,520
---------- ---------- ----------
----------
Total............................. $3,629,093 $3,216,874 $2,753,803
$2,616,319
========== ========== ==========
==========
SALES: (kWh-millions)
Residential.......................... 11,988 10,839 9,518
9,500
Commercial........................... 10,304 9,608 8,900
8,981
Industrial........................... 7,572 6,593 5,208
5,448
Other Utilities ..................... 9,046 7,733 5,388
5,394
Streetlighting and Railroads......... 307 303 286
288
------ ------ ------
------
Total............................ 39,217 35,076 29,300
29,611
====== ====== ======
======
CUSTOMERS: (average)
Residential......................... 1,503,182 1,351,019 1,150,357
1,145,142
Commercial.......................... 155,487 132,680 102,867
102,900
Industrial.......................... 6,272 5,774 5,067
5,114
Other............................... 3,793 3,581 3,305
3,283
--------- --------- ---------
---------
Total............................ 1,668,734 1,493,054 1,261,596
1,256,439
========= ========= =========
=========
AVERAGE ANNUAL USE PER RESIDENTIAL
CUSTOMER (kWh)...................... 7,987 8,129 8,285
8,304
AVERAGE ANNUAL BILL PER RESIDENTIAL
CUSTOMER............................ $923.32 $909.80 $866.20
$819.94
AVERAGE REVENUE PER kWh:
Residential......................... 11.56 cents 11.19 cents 10.45cents
9.87 cents
Commercial.......................... 10.12 9.82 9.30
8.78
Industrial.......................... 8.58 8.41 8.05
7.53
<F23>(a) Effective with the June 5, 1992 acquisition of PSNH, the consolidated
financial and
statistical information of NU includes, on a prospective basis, the
operations of PSNH and
NAEC.
<F24>(b) Generated in system and regional nuclear generating plants.
|
1989 1988 1987
1986
---- ---- ----
----
SOURCE OF ELECTRIC ENERGY:
(kWh-millions)<F24> (b)
Nuclear--Steam........................ 17,119 19,146 18,019
16,624
Fossil--Steam......................... 8,956 8,805 7,912
9,048
Hydro--Conventional................... 956 825 866
895
Hydro--Pumped Storage................. 1,194 1,111 973
950
Internal Combustion................... 77 84 39
33
Energy Used for Pumping .............. (1,629) (1,509) (1,322)
(1,293)
------ ------ ------
------
Net Generation..................... 26,673 28,462 26,487
26,257
Purchased and Net Interchange......... 5,178 2,456 2,585
3,328
Company Use and Unaccounted for ...... (2,304) (2,333) (2,082)
(2,050)
------ ------ ------
------
Net Energy Sold.................... 29,547 28,585 26,990
27,535
====== ====== ======
======
REVENUE: (thousands)
Residential........................... $ 898,471 $ 838,011 $ 780,866
$ 741,838
Commercial............................ 734,709 673,819 630,678
602,924
Industrial............................ 391,661 366,517 353,394
350,310
Other Utilities ...................... 301,045 227,653 203,642
234,222
Streetlighting and Railroads.......... 35,499 33,151 32,318
34,741
Miscellaneous......................... 64,282 82,169 (18,146)
(2,464)
---------- ---------- ----------
----------
Total Electric ................... 2,425,667 2,221,320 1,982,752
1,961,571
Other................................. 47,904 47,287 55,802
45,271
---------- ---------- ----------
----------
Total............................. $2,473,571 $2,268,607 $2,038,554
$2,006,842
========== ========== ==========
==========
SALES: (kWh-millions)
Residential.......................... 9,594 9,412 8,825
8,274
Commercial........................... 8,757 8,585 8,151
7,676
Industrial........................... 5,557 5,535 5,449
5,394
Other Utilities ..................... 5,351 4,771 4,284
5,883
Streetlighting and Railroads......... 288 282 281
308
------ ------ ------
------
Total............................ 29,547 28,585 26,990
27,535
====== ====== ======
======
CUSTOMERS: (average)
Residential......................... 1,134,588 1,117,356 1,091,539
1,063,998
Commercial.......................... 101,301 98,095 94,164
90,924
Industrial.......................... 5,090 5,063 5,084
5,102
Other............................... 3,277 3,222 3,120
3,096
--------- --------- ---------
---------
Total............................ 1,244,256 1,223,736 1,193,907
1,163,120
========= ========= =========
=========
AVERAGE ANNUAL USE PER RESIDENTIAL
CUSTOMER (kWh)...................... 8,460 8,418 8,061
7,746
AVERAGE ANNUAL BILL PER RESIDENTIAL
CUSTOMER............................ $792.28 $749.54 $713.24
$694.51
AVERAGE REVENUE PER kWh:
Residential......................... 9.36 cents 8.90 cents 8.85cents
8.97 cents
Commercial.......................... 8.39 7.85 7.74
7.85
Industrial.......................... 7.05 6.62 6.49
6.49
|
1985 1984
---- ----
SOURCE OF ELECTRIC ENERGY:
(kWh-millions) <F24>(b)
Nuclear--Steam........................ 11,453 13,711
Fossil--Steam......................... 8,325 9,065
Hydro--Conventional................... 726 840
Hydro--Pumped Storage................. 925 875
Internal Combustion................... 16 34
Energy Used for Pumping .............. (1,287) (1,199)
------ ------
Net Generation..................... 20,158 23,326
Purchased and Net Interchange......... 5,398 2,916
Company Use and Unaccounted for ...... (1,859) (1,793)
------ ------
Net Energy Sold.................... 23,697 24,449
====== ======
REVENUE: (thousands)
Residential........................... $ 750,076 $ 754,075
Commercial............................ 606,414 589,898
Industrial............................ 371,079 381,289
Other Utilities ...................... 165,071 216,227
Streetlighting and Railroads.......... 34,899 32,252
Miscellaneous......................... 9,698 29,340
---------- ----------
Total Electric ................... 1,937,237 2,003,081
Other................................. 31,988 27,476
---------- ----------
Total............................. $1,969,225 $2,030,557
========== ==========
SALES: (kWh-millions)
Residential.......................... 7,837 7,804
Commercial........................... 7,185 6,904
Industrial........................... 5,286 5,374
Other Utilities ..................... 3,094 4,113
Streetlighting and Railroads......... 295 254
------ ------
Total............................ 23,697 24,449
====== ======
CUSTOMERS: (average)
Residential......................... 1,041,254 1,021,871
Commercial.......................... 88,031 85,658
Industrial.......................... 5,087 5,022
Other............................... 3,067 3,025
--------- ---------
Total............................ 1,137,439 1,115,576
========= =========
AVERAGE ANNUAL USE PER RESIDENTIAL
CUSTOMER (kWh)...................... 7,492 7,596
AVERAGE ANNUAL BILL PER RESIDENTIAL
CUSTOMER............................ $717.06 $734.00
AVERAGE REVENUE PER kWh:
Residential......................... 9.57 cents 9.66 cents
Commercial.......................... 8.44 8.54
Industrial.......................... 7.02 7.10
|
SHAREHOLDER INFORMATION
SHAREHOLDERS
As of January 31, 1994, there were 144,741 common shareholders of record of Northeast Utilities holding an aggregate of 134,207,604 common shares.
COMMON SHARE INFORMATION
The common shares of Northeast Utilities are listed on the New York Stock Exchange. The ticker symbol is "NU," although it is frequently presented as "Noeast Util" in various financial publications. The high and low sales prices and dividends paid for the past two years, by quarters, are shown below:
- -------------------------------------------------------
Quarterly
Dividend
Year Quarter High Low Per Share
- -------------------------------------------------------
1993 First $28 7/8 $25 1/2 $0.44
Second 28 3/4 25 1/4 0.44
Third 28 1/8 26 1/4 0.44
Fourth 27 3/8 22 0.44
1992 First $24 7/8 $22 1/2 $0.44
Second 24 3/4 22 3/4 0.44
Third 26 5/8 23 7/8 0.44
Fourth 26 3/4 24 7/8 0.44
- -------------------------------------------------------
|
DIVIDEND REINVESTMENT PLAN
The company has a Dividend Reinvestment Plan under which common shareholders may use their dividends to purchase additional common shares.
Northeast Utilities Service Company, Shareholder Services, P.O. Box 5006, Hartford, Connecticut 06102-5006, is the company's dividend-paying agent and administers its Dividend Reinvestment Plan.
ANNUAL MEETING
The annual meeting of shareholders of Northeast Utilities will be held on Tuesday, May 24, 1994, at 10 a.m., at La Renaissance, East Windsor, Connecticut, which is located at Exit 44 (East Windsor) of Interstate 91.
TRANSFER AGENTS AND REGISTRARS
Northeast Utilities Service Company
Shareholder Services
P.O. Box 5006
Hartford, Connecticut 06102-5006
State Street Bank and Trust Company
Corporate Stock Transfer Department
P.O. Box 8200
Boston, Massachusetts 02266-8200
FORM 10-K
Northeast Utilities will provide shareholders a copy of its 1993 Annual Report to the Securities and Exchange Commission on Form 10-K, including the financial statements and schedules thereto, without charge, upon receipt of a written request sent to:
Theresa H. Allsop
Assistant Secretary
Northeast Utilities
P.O. Box 270
Hartford, Connecticut 06141-0270
Exhibit 13.2
1993
ANNUAL REPORT
The Connecticut Light and Power Company
Index
Contents Page - -------- ---- Balance Sheets. . . . . . . . . . . . . . . . . . . . . . 1-2 Statements of Income. . . . . . . . . . . . . . . . . . . 3 Statements of Cash Flows. . . . . . . . . . . . . . . . . 4 Statements of Common Stockholder's Equity . . . . . . . . 5 Notes to Financial Statements . . . . . . . . . . . . . . 6-30 Report of Independent Public Accountants. . . . . . . . . 31 Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . 32-39 Selected Financial Data . . . . . . . . . . . . . . . . . 40 Statements of Quarterly Financial Data. . . . . . . . . . 40 Statistics. . . . . . . . . . . . . . . . . . . . . . . . 41 Preferred Stockholder and Bondholder Information. . . . . Back Cover |
THE CONNECTICUT LIGHT AND POWER COMPANY
BALANCE SHEETS
At December 31, 1993 1992
- -----------------------------------------------------------------------------
(Thousands of Dollars)
ASSETS
- ------
Utility Plant, at original cost:
Electric......................................... $5,936,344 $ 5,822,783
Less: Accumulated provision for depreciation.. 2,010,962 1,827,024
----------- -----------
3,925,382 3,995,759
Construction work in progress.................... 121,177 110,081
Nuclear fuel, net................................ 156,878 167,816
----------- -----------
Total net utility plant...................... 4,203,437 4,273,656
----------- -----------
Other Property and Investments:
Nuclear decommissioning trusts, at cost.......... 147,657 121,888
Investments in regional nuclear generating
companies and subsidiary companies, at equity... 53,951 53,717
Other, at cost................................... 14,184 14,198
----------- -----------
215,792 189,803
----------- -----------
Current Assets:
Cash and special deposits <F2>(Note 1).......... 2,283 12,104
Receivables, less accumulated provision for
uncollectible accounts of $10,816,000 in 1993
and $8,358,000 in 1992......................... 210,805 231,614
Receivables from affiliated companies............ 29,687 4,804
Accrued utility revenues......................... 97,662 92,366
Fuel, materials, and supplies, at average cost... 60,247 72,199
Recoverable energy costs, net--current
portion <F2>(Note 1)........................... 9,985 77,002
Prepayments and other............................ 33,697 31,875
----------- -----------
444,366 521,964
----------- -----------
Deferred Charges:
Regulatory asset--income taxes <F2>(Note 1)..... 1,026,046 -
Deferred costs--nuclear plants <F2>(Note 1)...... 185,909 199,914
Unrecovered contract obligation-YAEC <F4>(Note 3) 84,526 98,559
Deferred conservation and load-management costs.. 111,442 87,487
Recoverable energy costs, net <F2>(Note 1)....... 26,311 82,423
Deferred DOE assessment <F2>(Note 1)............. 39,279 41,730
Unamortized debt expense......................... 8,971 10,497
Amortizable property investment.................. 6,228 8,720
Other............................................ 45,073 68,053
----------- -----------
1,533,785 597,383
----------- -----------
Total Assets................................. $6,397,380 $5,582,806
=========== ===========
|
The accompanying notes are an integral part of these financial statements.
THE CONNECTICUT LIGHT AND POWER COMPANY
BALANCE SHEETS
At December 31, 1993 1992
- ------------------------------------------------------------------------------
(Thousands of Dollars)
CAPITALIZATION AND LIABILITES
- -----------------------------
Capitalization:
Common stock, $10 par value--authorized
24,500,000 shares; outstanding 12,222,930
shares in 1993 and 1992......................... $ 122,229 $ 122,229
Capital surplus, paid in........................... 630,271 634,851
Retained earnings.................................. 750,719 748,817
----------- -----------
Total common stockholder's equity............ 1,503,219 1,505,897
Cumulative preferred stock--
$50 par value--authorized 9,000,000 shares;
outstanding 5,424,000 shares in 1993 and
5,123,925 in 1992
$25 par value--authorized 8,000,000 shares;
outstanding 5,000,000 shares in 1993 and
7,000,000 shares in 1992
Not subject to mandatory redemption <F6>(Note 5) 166,200 231,196
Subject to mandatory redemption <F7> (Note 6). 230,000 197,500
Long-term debt <F8>(Note 7)....................... 1,743,260 1,930,832
----------- -----------
Total capitalization...................... 3,642,679 3,865,425
----------- -----------
Obligations Under Capital Leases..................... 121,892 136,800
----------- -----------
Current Liabilities:
Notes payable to banks............................. 95,000 96,500
Notes payable to affiliated company................ 1,250 -
Commercial paper................................... - 109,240
Long-term debt and preferred stock--current
portion......................................... 314,020 159,604
Obligations under capital leases--current
portion......................................... 55,526 60,604
Accounts payable................................... 117,858 108,797
Accounts payable to affiliated companies........... 52,179 55,808
Accrued taxes...................................... 36,114 118,132
Accrued interest................................... 29,669 32,829
Other.............................................. 32,287 17,185
----------- -----------
733,903 758,699
----------- -----------
Deferred Credits:
Accumulated deferred income taxes <F2>(Note 1)..... 1,575,965 475,355
Accumulated deferred investment tax credits........ 154,701 165,710
Deferred contract obligation--YAEC <F4>(Note 3).... 84,526 98,559
Deferred DOE obligation <F2>(Note 1)............... 31,523 41,730
Other.............................................. 52,191 40,528
----------- -----------
1,898,906 821,882
----------- -----------
Commitments and Contingencies <F12>(Note 11)
Total Capitalization and Liabilities...... $6,397,380 $5,582,806
=========== ===========
|
The accompanying notes are an integral part of these financial statements.
THE CONNECTICUT LIGHT AND POWER COMPANY
STATEMENTS OF INCOME
For the Years Ended December 31, 1993 1992 1991
- -----------------------------------------------------------------------------
- -----------
(Thousands of
Dollars)
Operating Revenues................................ $2,366,050 $2,316,451
$2,275,737
----------- -----------
- -----------
Operating Expenses:
Operation--
Fuel, purchased and net interchange
power....................................... 657,121 598,287
559,131
Other......................................... 641,402 605,675
614,440
Maintenance..................................... 180,403 197,460
184,727
Depreciation.................................... 219,776 209,884
198,597
Amortization of regulatory assets, net.......... 112,353 73,456
55,693
Federal and state income taxes
<F9>(Note 8).................................. 144,547 172,236
173,102
Taxes other than income taxes................... 170,353 171,642
166,212
----------- -----------
- -----------
Total operating expenses..................... 2,125,955 2,028,640
1,951,902
----------- -----------
- -----------
Operating Income.................................. 240,095 287,811
323,835
----------- -----------
- -----------
Other Income:
Deferred nuclear plants return--
other funds.................................. 23,537 35,396
36,714
Equity in earnings of regional
nuclear generating companies.................. 6,193 8,014
8,021
Other, net...................................... (1,044) 6,964
9,226
Income taxes--credit............................ 4,859 11,171
13,004
----------- -----------
- -----------
Other income, net............................ 33,545 61,545
66,965
----------- -----------
- -----------
Income before interest charges............... 273,640 349,356
390,800
----------- -----------
- -----------
Interest Charges:
Interest on long-term debt...................... 134,263 151,314
166,256
Other interest.................................. 9,654 4,205
1,542
Deferred nuclear plants return--
borrowed funds <F2>(Note 1)................... (13,979) (12,877)
(17,816)
----------- -----------
- -----------
Interest charges, net........................ 129,938 142,642
149,982
----------- -----------
- -----------
Income before cumulative effect of
accounting change............................... 143,702 206,714
240,818
Cumulative effect of accounting change <F2>(Note 1) 47,747 -
-
----------- -----------
- -----------
Net Income........................................ $ 191,449 $ 206,714 $
240,818
=========== ===========
===========
|
The accompanying notes are an integral part of these financial statements.
The Connecticut Light and Power Company
STATEMENTS OF CASH FLOWS
- -----------------------------------------------------------------------------
- ---------------
For the Years Ended December 31, 1993 1992
1991
---------
- --------- ---------
(Thousands
of Dollars)
Cash Flows From Operations:
Net Income .............................................. $ 191,449 $
206,714 $ 240,818
Adjusted for the following:
Depreciation............................................ 226,951
223,058 204,534
Deferred income taxes and investment tax credits, net... (20,188)
72,138 107,599
Deferred nuclear plants return, net of amortization..... 58,740
10,071 (3,529)
Deferred energy costs, net of amortization.............. 123,129
(22,408) (119,629)
Deferred conservation and load-management,
net of amortization.................................... (23,955)
(31,989) (47,402)
Other sources of cash................................... 81,386
13,256 37,143
Other uses of cash...................................... (26,431)
(66,494) (38,730)
Changes in working capital:
Receivables and accrued utility revenues............... (9,370)
245 (36,882)
Fuel, materials, and supplies.......................... 11,951
1,296 24,735
Accounts payable....................................... 5,433
(18,067) 52,029
Accrued taxes.......................................... (82,018)
15,344 (42,228)
Other working capital (excludes cash).................. 9,754
7,154 12,462
---------
- --------- ---------
Net Cash Flows From Operations............................. 546,831
410,318 390,920
---------
- --------- ---------
Cash Flows Used For Financing Activities:
Long-term debt........................................... 740,500
491,000 -
Preferred stock.......................................... 80,000
75,000 -
Financing expenses....................................... (2,393)
(9,825) -
Net increase (decrease) in short-term debt............... (109,490)
15,240 108,385
Reacquisitions and retirements of long-term debt.........
and preferred stock.................................... (886,969)
(523,123) (90,877)
Cash dividends on preferred stock........................ (29,182)
(31,977) (34,541)
Cash dividends on common stock........................... (160,365)
(164,277) (172,587)
---------
- --------- ---------
Net cash flows used for financing activities............... (367,899)
(147,962) (189,620)
---------
- --------- ---------
Investment Activities:
Investment in plant (including capital leases):
Electric utility plant................................. (149,308)
(225,901) (178,670)
Nuclear fuel........................................... (13,658)
3,139 (3,432)
---------
- --------- ---------
Net cash flows used for investments in plant........... (162,966)
(222,762) (182,102)
Other investment activities, net....................... (25,787)
(32,181) (18,334)
---------
- --------- ---------
Net cash flows used for investments........................ (188,753)
(254,943) (200,436)
---------
- --------- ---------
Net Increase (Decrease) In Cash for the Period............. (9,821)
7,413 864
Cash and special deposits - beginning of period........ 12,104
4,691 3,827
---------
- --------- ---------
Cash and special deposits - end of period.............. $ 2,283 $
12,104 $ 4,691
=========
========= =========
Supplemental Cash Flow Information:
Cash paid (received) during the year for:
Interest, net of amounts capitalized during
construction............................................. $ 130,592 $
143,957 $ 162,760
=========
========= =========
Income taxes............................................. $ 149,056 $
95,199 $ 92,884
=========
========= =========
Increase in obligations:
Niantic Bay Fuel Trust................................... $ 40,140
30,948 14,713
=========
========= =========
Capital leases........................................... $ - -
10,500
=========
========= =========
|
The accompanying notes are an integral part of these financial statements.
THE CONNECTICUT LIGHT AND POWER COMPANY
STATEMENTS OF COMMON STOCKHOLDER'S EQUITY
- -----------------------------------------------------------------------------
- -------
Capital Retained
Common Surplus, Earnings
Stock Paid In <F1>(a) Total
- -----------------------------------------------------------------------------
- -------
(Thousands of Dollars)
Balance at January 1, 1991.......... $122,229 $636,175 $ 705,303
$1,463,707
Net income for 1991............. 240,818
240,818
Cash dividends on preferred
stock......................... (34,541)
(34,541)
Cash dividends on common stock.. (172,587)
(172,587)
Capital stock expenses, net..... 1,027
1,027
--------- --------- ----------
- -----------
Balance at December 31, 1991........ 122,229 637,202 738,993
1,498,424
Net income for 1992............. 206,714
206,714
Cash dividends on preferred
stock......................... (31,977)
(31,977)
Cash dividends on common stock.. (164,277)
(164,277)
Loss on the retirement of
preferred stock............... (636)
(636)
Capital stock expenses, net..... (2,351)
(2,351)
--------- --------- ----------
- -----------
Balance at December 31, 1992........ 122,229 634,851 748,817
1,505,897
Net income for 1993............. 191,449
191,449
Cash dividends on preferred
stock......................... (29,182)
(29,182)
Cash dividends on common stock.. (160,365)
(160,365)
Capital stock expenses, net..... (4,580)
(4,580)
--------- --------- ----------
- -----------
Balance at December 31, 1993........ $122,229 $630,271 $ 750,719
$1,503,219
========= ========= ==========
===========
|
<F1> (a) The company has dividend restrictions imposed by its long-term debt
agreements. At December 31, 1993, these restrictions totaled
approximately
$540.0 million.
The accompanying notes are an integral part of these financial statements.
THE CONNECTICUT LIGHT AND POWER COMPANY COMPANY
GENERAL
The Connecticut Light and Power Company (CL&P or the company), Western
Massachusetts Electric Company (WMECO), Holyoke Water Power Company (HWP),
Public Service Company of New Hampshire (PSNH), and North Atlantic Energy
Corporation (NAEC) are the operating subsidiaries comprising the Northeast
Utilities system (the system) and are wholly owned by Northeast Utilities
(NU).
Other wholly owned subsidiaries of NU provide substantial support services to the system. Northeast Utilities Service Company (NUSCO) supplies centralized accounting, administrative, data processing, engineering, financial, legal, operational, planning, purchasing, and other services to the system companies. Northeast Nuclear Energy Company (NNECO) acts as agent for system companies in operating the Millstone nuclear generating facilities. Commencing June 29, 1992, North Atlantic Energy Service Corporation (NAESCO) began acting as agent for CL&P and NAEC in operating the Seabrook 1 nuclear facility.
All transactions among affiliated companies are on a recovery of cost basis which may include amounts representing a return on equity, and are subject to approval by various federal and state regulatory agencies.
ACCOUNTING CHANGES
Property Taxes: CL&P adopted a one-time change in the method of accounting
for municipal property tax expense for their Connecticut properties. Most
municipalities in Connecticut assess property values as of October 1. Prior
to January 1, 1993, CL&P accrued Connecticut property tax expense over the
period October 1 through September 30 based on the lien-date method. In the
first quarter of 1993, these subsidiaries changed their method of accounting
for Connecticut municipal property taxes to recognize the expense from July 1
through June 30, to match the payment and services provided by the
municipalities. This one-time change increased net income by approximately
$47.7 million for CL&P in 1993.
Income Taxes: The company adopted the provisions of Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS 109), effective January 1, 1993. For more information on this change, see <F2> Note 1, "Summary of Significant Accounting Policies - Income Taxes."
Postretirement Benefits Other Than Pensions: The company adopted the provisions of Statement of Financial Accounting Standards No. 106, Employer's Accounting for Postretirement Benefits Other Than Pensions (SFAS 106), effective January 1, 1993. For more information on this change, see <F11> Note 10, "Postretirement Benefits Other Than Pensions."
ACCOUNTING RECLASSIFICATIONS
Certain amounts in the accompanying financial statements of CL&P for the
year ended December 31, 1992 and 1991 have been reclassified to conform
with the December 31, 1993 presentation.
PUBLIC UTILITY REGULATION
NU is registered with the Securities and Exchange Commission (SEC) as a
holding company under the Public Utility Holding Company Act of 1935 (1935
Act), and it and its subsidiaries, including the company, are subject to
the provisions of the 1935 Act. Arrangements among the system companies,
outside agencies, and other utilities covering interconnections, interchange
of electric power, and sales
of utility property are subject to regulation by the Federal Energy Regulatory Commission (FERC) and/or the SEC. The company is subject to further regulation for rates and other matters by the FERC and the Connecticut Department of Public Utility Control (DPUC), and follows the accounting policies prescribed by the respective commissions.
REVENUES
Other than special contracts, utility revenues are based on authorized
rates applied to each customer's use of electricity. Rates can be changed
only through a formal proceeding before the appropriate regulatory
commission. At the end of each accounting period, CL&P accrues an estimate
for the amount of energy delivered but unbilled.
SPENT NUCLEAR FUEL DISPOSAL COSTS
Under the Nuclear Waste Policy Act of 1982, CL&P must pay the United States
Department of Energy (DOE) for the disposal of spent nuclear fuel and high-
level radioactive waste. Fees for nuclear fuel burned on or after April 7,
1983 are billed currently to customers and paid to the DOE on a quarterly
basis. For nuclear fuel used to generate electricity prior to April 7,
1983 (prior-period fuel), payment may be made anytime prior to the first
delivery of spent fuel to the DOE. At December 31, 1993, fees due to the
DOE for the disposal of prior-period fuel were approximately $136.1 million,
including interest costs of $69.6 million. As of December 31, 1993,
approximately $134.5 million had been collected through rates.
Under the Energy Policy Act of 1992 (Energy Act), CL&P is assessed for its proportionate shares of the costs of decontaminating and decommissioning uranium enrichment plants operated by the DOE (D&D assessment). The Energy Act imposes an overall cap of $2.25 billion on the obligation of the commercial power industry and limits the annual special assessment to $150 million each year over a 15-year period beginning in 1993. The Energy Act also requires that regulators treat D&D assessments as a reasonable and necessary cost of fuel, to be fully recovered in rates, like any other fuel cost. The cap and annual recovery amounts will be adjusted annually for inflation. The D&D assessment is allocated among utilities based upon services purchased in prior years. At December 31, 1993, CL&P's remaining share of these costs is estimated to be approximately $39.3 million. CL&P has begun to recover these costs. Accordingly, CL&P has recognized these costs as a regulatory asset, with a corresponding obligation, on its Balance Sheets.
INVESTMENTS AND JOINTLY OWNED ELECTRIC UTILITY PLANT
Regional Nuclear Generating Companies: CL&P owns common stock of four
regional nuclear generating companies (Yankee companies). The Yankee
companies, with the company's ownership interests, are:
- --------------------------------------------------------------------
Connecticut Yankee Atomic Power Company (CY). . . . . 34.5%
Yankee Atomic Electric Company (YAEC) . . . . . . . . 24.5
Maine Yankee Atomic Power Company (MY). . . . . . . . 12.0
Vermont Yankee Nuclear Power Corporation (VY) . . . . 9.5
|
CL&P's investments in the Yankee companies are accounted for on the equity basis. The electricity produced by these facilities that are operating is committed to the participants substantially on the basis
of their ownership interests and is billed pursuant to contractual agreements. For more information on these agreements, see <F12> Note 11, "Commitments and Contingencies - Purchased Power Arrangements."
The 173 megawatt (MW) YAEC nuclear power plant was shut down permanently on February 26, 1992. For more information on the Yankee companies, see <F4> Note 3, "Nuclear Decommissioning."
Millstone 1: CL&P has an 81 percent joint-ownership interest in Millstone
1, a 660 MW nuclear generating unit. As of December 31, 1993, plant-in-
service and the accumulated provision for depreciation included approximately
$332 million and $130.8 million, respectively, for CL&P's share of Millstone
1. CL&P's share of Millstone 1 operating expenses is included in the
corresponding operating expenses on the accompanying Statements of Income.
Millstone 2: CL&P has an 81 percent joint-ownership interest in Millstone 2, a 875 MW nuclear generating unit. As of December 31, 1993, plant-in- service and the accumulated provision for depreciation included approximately $676 million and $151.5 million, respectively, for CL&P's share of Millstone 2. CL&P's share of Millstone 2 operating expenses is included in the corresponding operating expenses on the accompanying Statements of Income.
Millstone 3: CL&P has a 52.93 percent joint-ownership interest in Millstone 3, a 1,149 MW nuclear generating unit. As of December 31, 1993, plant-in-service and the accumulated provision for depreciation included approximately $1.9 billion and $366.6 million, respectively, for CL&P's share of Millstone 3. CL&P's share of Millstone 3 expenses is included in the corresponding operating expenses on the accompanying Statements of Income.
Seabrook: As of December 31, 1993, CL&P has a 4.06 percent joint-ownership interest in Seabrook 1, a 1,150 MW nuclear generating unit. As of December 31, 1993, plant-in-service and the accumulated provision for depreciation included approximately $173.4 million and $17.7 million, respectively, for CL&P's share of Seabrook 1. CL&P's share of Seabrook 1 expenses is included in the corresponding operating expenses on the accompanying Statements of Income.
DEPRECIATION
The provision for depreciation is calculated using the straight-line method
based on estimated remaining lives of depreciable utility plant-in-service,
adjusted for salvage value and removal costs, as approved by the appropriate
regulatory agency. Except for major facilities, depreciation factors are
applied to the average plant-in-service during the period. Major facilities
are depreciated from the time they are placed in service. When plant is
retired from service, the original cost of plant, including costs of removal,
less salvage, is charged to the accumulated provision for depreciation. For
nuclear production plants, the costs of removal, less salvage, that have been
funded through external decommissioning trusts will be paid with funds from
the trusts and charged to the accumulated reserve for decommissioning
included in the accumulated provision for depreciation over the expected
service life of the plants. See <F4> Note 3, "Nuclear Decommissioning," for
additional information.
The depreciation rates for the several classes of electric plant-in-service are equivalent to a composite rate of 3.8 percent in 1993, 3.7 percent in 1992, and 3.5 percent in 1991.
INCOME TAXES
The tax effect of temporary differences (differences between the periods in
which transactions affect income in the financial statements and the periods
in which they affect the determination of income
subject to tax) is accounted for in accordance with the ratemaking treatment of the applicable regulatory commissions. See <F9> Note 8, "Income Tax Expense," for the components of income tax expenses.
In 1992, the Financial Accounting Standards Board (FASB) issued SFAS 109. SFAS 109 supersedes previously issued income tax accounting standards. The company adopted SFAS 109, on a prospective basis, during the first quarter of 1993. At December 31, 1993, the deferred tax obligation relating to the adoption of SFAS 109 approximated $1.0 billion. As it is probable that the increase in deferred tax liabilities will be recovered from customers through rates, CL&P also established a regulatory asset. SFAS 109 does not permit net-of-tax accounting. Accordingly, the company no longer utilizes net-of-tax accounting for the deferred nuclear plants return-borrowed funds and allowance for funds used during construction (AFUDC) - borrowed funds.
The temporary differences which give rise to the accumulated deferred tax obligation at December 31, 1993, are as follows:
(Thousands of Dollars)
Accelerated depreciation and other plant-related
differences. . . . . . . . . . . . . . . . . . $1,049,849
The tax effect of net regulatory assets. . . . . 434,894
Other. . . . . . . . . . . . . . . . . . . . . . 91,222
----------
$1,575,965
==========
|
ENERGY ADJUSTMENT CLAUSES
Retail electric rates include a fuel adjustment clause (FAC) under which
fossil-fuel prices above or below base-rate levels are charged or credited
to customers. Administrative proceedings are required each month to approve
the FAC charges or credits proposed for the following month. Monthly FAC
rates are also subject to retroactive review and appropriate adjustment by
the DPUC each quarter after public hearings.
Beginning in 1979, the DPUC approved the use of a generation utilization adjustment clause (GUAC), which defers the effect on fuel costs caused by variations from a specified composite nuclear generation capacity factor embedded in base rates. Generally, at the end of a 12-month period ending July 31 of each year, these deferrals are refunded to, or collected from, customers over the subsequent 11-month period beginning in September. Should the annual composite nuclear capacity factor fall below the 55 percent GUAC floor, CL&P would have to apply to the DPUC for permission to recover the additional fuel expense associated with nuclear performance below 55 percent.
On January 5, 1994, the DPUC issued a decision which ordered CL&P to offset GUAC deferred charges against prior fuel over-recoveries. The disallowance resulted in a zero GUAC rate for the period September 1993 through August 1994. CL&P is considering an appeal of this decision.
The DPUC further ordered that any GUAC deferrals subsequent to July 1993 will be offset by any fuel overrecoveries whenever the composite nuclear capacity factor is below the level embedded in base rates. For the period August 1993 to December 1993, there have been no further adjustments necessary as a result of the DPUC's decision.
The January 5, 1994 DPUC decision creates some uncertainty about the future operation of the GUAC. CL&P has requested the DPUC to clarify the portion of the decision related to future calculation of the GUAC rate. Management does not expect the decision to have a material adverse impact on CL&P's future results of operations.
For additional information see <F12> Note 11, "Commitments and Contingencies "Nuclear Performance."
CONSERVATION AND LOAD MANAGEMENT COSTS
Conservation and Load Management (C&LM) costs are recovered through a
Conservation Adjustment Mechanism (CAM). The DPUC issued an order in April
1993, which allowed CL&P to recover C&LM expenditures over an eight-year
period and reaffirmed program performance incentives. In December 1993,
CL&P filed a proposed CAM settlement with the DPUC. The settlement
proposes 1994 C&LM expenditures of $39 million, a reduction in the cost
recovery period from 8 to 3.85 years, and other changes in program designs,
performance incentives, and cost recovery. Unrecovered C&LM costs at
December 31, 1993 were $111.4 million.
PHASE-IN PLANS
As discussed below, CL&P is phasing into rates the recoverable parts of its
investments in Millstone 3 and Seabrook 1. All plans are in compliance
with Statement of Financial Accounting Standards No. 92, Regulated
Enterprises-Accounting for Phase-in Plans.
As allowed by the DPUC, CL&P is phasing into rate base its allowed investment in Millstone 3. The DPUC has provided for full deferred earnings and carrying charges on the portion of CL&P's allowed investment in Millstone 3 not included in rate base. Through December 31, 1993, CL&P had placed into rate base $1.58 billion, or 90 percent, of its allowed investment in Millstone 3. The remaining $175.7 million, or 10 percent, is to be phased into rate base annually in two 5-percent steps beginning January 1, 1994. The amortization and recovery of deferrals through rates began January 1, 1988 and will end no later than December 31, 1995. As of December 31, 1993, $349.6 million of the deferred return, including carrying charges, has been recovered, and $161.9 million of the deferred return to date, plus carrying charges, remains to be recovered.
As allowed by the DPUC, CL&P phased into rate base its allowed investment in Seabrook 1. The DPUC provided for full deferred earnings and carrying charges on the portion of CL&P's allowed investment in Seabrook 1 not included in rate base. Through December 31, 1993, CL&P has placed into rate base its full allowed investment in Seabrook 1. The amortization and recovery of deferrals through rates began September 1, 1991 and will end no later than August 31, 1996. As of December 31, 1993, $15.8 million of the deferred return, including carrying charges, has been recovered, and $24.0 million of the deferred return recorded to date, plus carrying charges, remains to be recovered.
CASH AND SPECIAL DEPOSITS
Cash and special deposits at December 31, 1992 included $10 million in
special deposits that was used to redeem $10 million of CL&P's Pollution
Control Notes.
<F3>
2. LEASES
CL&P and WMECO have entered into the Niantic Bay Fuel Trust (NBFT) capital lease agreement to finance up to $530 million of nuclear fuel for Millstone 1 and 2 and their share of the nuclear fuel for Millstone 3. CL&P and WMECO make quarterly lease payments for the cost of nuclear fuel consumed
in the reactors (based on a units-of-production method at rates which reflect estimated kilowatt-hours of energy provided) plus financing costs associated with the fuel in the reactors. Upon permanent discharge from the reactors, ownership of the nuclear fuel transfers to CL&P and WMECO.
CL&P has also entered into lease agreements, some of which are capital leases, for the use of substation equipment, data processing and office equipment, vehicles, nuclear control room simulators, and office space. The provisions of these lease agreements generally provide for renewal options. The following rental payments have been charged to operating expense:
Capital Operating
Year Leases Leases
---- ------- ---------
1993. . . . . . . . . . $76,549,000 $24,355,000
1992. . . . . . . . . . 61,795,000 26,919,000
1991. . . . . . . . . . 50,998,000 26,320,000
|
Interest included in capital lease rental payments was $11,298,000 in 1993, $14,782,000 in 1992, and $15,974,000 in 1991.
Substantially all of the capital lease rental payments were made pursuant to the nuclear fuel lease agreement. Future minimum lease payments under the nuclear fuel capital lease cannot be reasonably estimated on an annual basis due to variations in the usage of nuclear fuel.
Future minimum rental payments, excluding annual nuclear fuel lease payments and executory costs, such as property taxes, state use taxes, insurance, and maintenance, under long-term noncancelable leases, as of December 31, 1993, are approximately:
Capital Operating
Year Leases Leases
---- ------- ---------
(Thousands of Dollars)
1994. . . . . . . . . . . . $ 2,800 $ 20,800
1995. . . . . . . . . . . . 2,800 19,500
1996. . . . . . . . . . . . 2,800 17,900
1997. . . . . . . . . . . . 2,800 17,200
1998. . . . . . . . . . . . 2,800 12,300
After 1998. . . . . . . . . 45,000 75,700
------- --------
Future minimum lease
payments . . . . . . . . . 59,000 $163,400
========
Less amount of representing
interest . . . . . . . . . 38,300
-------
Present value of future
minimum lease payments
for other than nuclear
fuel . . . . . . . . . . . 20,700
Present value of future
nuclear fuel lease
payments . . . . . . . . . 156,700
-------
Total. . . . . . $177,400
========
<F4>
3. NUCLEAR DECOMMISSIONING
|
The company's 1992 decommissioning study concluded that complete and immediate dismantlement at retirement continues to be the most viable and economic method of decommissioning the three Millstone units. A 1991 Seabrook decommissioning study also confirmed that complete and immediate dismantlement at retirement is the most viable and economic method of decommissioning Seabrook 1. Decommissioning studies are reviewed and updated periodically to reflect changes in decommissioning requirements, technology, and inflation.
The estimated cost of decommissioning CL&P's ownership share of Millstone 1 and 2, in year-end 1993 dollars, is $312.5 million and $251.0 million, respectively. At December 31, 1993, the estimated cost of decommissioning CL&P's ownership share of Millstone 3 and Seabrook 1, in year-end 1993 dollars, is $223.0 million and $14.9 million, respectively. Nuclear decommissioning costs are accrued over the expected service life of the units and are included in depreciation expense on the Statements of Income. Nuclear decommissioning costs amounted to $21.9 million in 1993 and 1992, and $16.2 million in 1991. Nuclear decommissioning, as a cost of removal, is included in the accumulated provision for depreciation on the Balance Sheets.
CL&P has established independent decommissioning trusts for its portion of the costs of decommissioning Millstone 1, 2, and 3. CL&P's portion of the cost of decommissioning Seabrook 1 is paid to an independent decommissioning financing fund managed by the state of New Hampshire.
As of December 31, 1993, CL&P has collected, through rates, $148.3 million, toward the future decommissioning costs of its share of the Millstone units, of which $116.8 million has been transferred to external decommissioning trusts. As of December 31, 1993, CL&P has paid approximately $860,000 into Seabrook 1's decommissioning financing fund. Earnings on the decommissioning trusts and financing fund increase the decommissioning trust balance and the accumulated reserve for decommissioning. At December 31, 1993, the balance in the accumulated reserve for decommissioning amounted to $179.1 million.
Changes in requirements or technology, or adoption of a decommissioning method other than immediate dismantlement, could change decommissioning cost estimates. CL&P attempts to recover sufficient amounts through its allowed rates to cover its expected decommissioning costs. Only the portion of currently estimated total decommissioning costs that has been accepted by the regulatory agencies is reflected in CL&P's rates. Although allowances for decommissioning have increased significantly in recent years, ratepayers in future years will need to increase their payments to offset the effects of any insufficient rate recoveries in previous years.
CL&P, along with other New England utilities, has equity investments in the four Yankee companies. Each Yankee company owns a single nuclear generating unit. The estimated costs, in year-end 1993 dollars, of decommissioning CL&P's ownership share of CY and MY, are $117.3 million and $38.8 million, respectively. The cost to decommission VY is currently being re-estimated. The cost of decommissioning CL&P's ownership share of VY is projected to range from $28.5 million to $33.3 million. As discussed in the following paragraph, YAEC's owners voted to permanently shut down the YAEC unit on February 26, 1992. Under the terms of the contracts with the Yankee companies, the shareholders- sponsors are responsible for their proportionate share of the operating costs of each unit, including decommissioning. The nuclear decommissioning costs of the Yankee companies are included as part of CL&P's cost of power.
YAEC has begun decommissioning its nuclear facility. On June 1, 1992, YAEC
filed a rate filing to obtain FERC authorization to collect the closing
and decommissioning costs and to recover the remaining
investment in the
YAEC nuclear power plant, over the remaining period of the plant's Nuclear
Regulatory Commission (NRC) operating license. The bulk of these costs
has been agreed to by the YAEC joint owners and approved, as a settlement,
by FERC. At December 31, 1993, the estimated remaining costs amounted to
$345.0 million, of which CL&P's share was approximately $84.5 million.
Management expects that CL&P will continue to be allowed to recover such
FERC-approved costs from its customers. Accordingly, CL&P has recognized
these costs as a regulatory asset, with a corresponding obligation, on its
Balance Sheets. CL&P has a 24.5 percent equity investment, approximating
$5.9 million, in YAEC. CL&P had relied on YAEC for less than 1 percent of
its capacity.
<F5>
4. SHORT-TERM DEBT
The system companies have various credit lines, totaling $485 million. NU, CL&P, WMECO, HWP, NNECO, and The Rocky River Realty Company (RRR) have established a revolving credit facility with a group of 17 banks. Under this facility, the participating companies may borrow up to an aggregate of $360 million. Individual borrowing limits are $175 million for NU, $360 million for CL&P, $75 million for WMECO, $8 million for HWP, $60 million for NNECO, and $25 million for RRR. The system companies may borrow funds on a short-term revolving basis using either fixed-rate loans or standby loans. Fixed rates are set using competitive bidding. Standby-loan rates are based upon several alternative variable rates. The system companies are obligated to pay a facility fee of 0.20 percent of each bank's total
commitment under the three-year portion of the facility, representing 75 percent of the total facility, plus .135 percent of each bank's total commitment under the 364-day portion of the facility, representing 25 percent of the total facility. At December 31, 1993, there were $22.5 million of borrowings under the facility, $5 million attributable to CL&P.
Certain subsidiaries of NU, including CL&P, are members of the Northeast Utilities System Money Pool (Pool). The Pool provides a more efficient use of the cash resources of the system, and reduces outside short-term borrowings. NUSCO administers the Pool as agent for the member companies. Short-term borrowing needs of the member companies are first met with available funds of other member companies, including funds borrowed by NU parent. NU parent may lend to the Pool but may not borrow. Investing and borrowing subsidiaries receive or pay interest based on the average daily Federal Funds rate. Funds may be withdrawn from or repaid to the Pool at any time without prior notice. However, borrowings based on loans from NU parent bear interest at NU parent's cost and must be repaid based upon the terms of NU parent's original borrowing.
Maturities of CL&P's short-term debt obligations are for periods of three months or less.
The amount of short-term borrowings that may be incurred by the company is subject to periodic approval by the SEC under the 1935 Act. In addition, the charter of CL&P contains provisions restricting the amount of short- term borrowings. Under the SEC and/or charter restrictions, the company was authorized, as of January 1, 1993, to incur short-term borrowings up to a maximum of $375 million.
<F6>
5. PREFERRED STOCK NOT SUBJECT TO MANDATORY REDEMPTION
Details of preferred stock not subject to mandatory redemption are:
December 31, Shares
1993 Outstanding
December 31,
Redemption December 31
- --------------------------------
Description Price 1993 1993
1992 1991
- -----------------------------------------------------------------------------
- ---------------------
(Thousands
of Dollars)
$1.90 Series of 1947. . . . . $52.50 163,912 $ 8,196 $
8,196 $ 8,196
$2.00 Series of 1947. . . . . 54.00 336,088 16,804
16,804 16,804
$2.04 Series of 1949. . . . . 52.00 100,000 5,000
5,000 5,000
$2.06 Series E of 1954. . . . 51.00 200,000 10,000
10,000 10,000
$2.09 Series F of 1955. . . . 51.00 100,000 5,000
5,000 5,000
$2.20 Series of 1949. . . . . 52.50 200,000 10,000
10,000 10,000
$3.24 Series G of 1968. . . . 51.84 300,000 15,000
15,000 15,000
$3.80 Series J of 1971. . . . - - -
20,000 20,000
$4.48 Series H of 1970. . . . - - -
15,000 15,000
$4.48 Series I of 1970. . . . - - -
20,000 20,000
$4.56 Series K of 1974. . . . - - -
- 50,000
3.90% Series of 1949. . . . . 50.50 160,000 8,000
8,000 8,000
4.50% Series of 1956. . . . . 50.75 104,000 5,200
5,200 5,200
4.50% Series of 1963. . . . . 50.50 160,000 8,000
8,000 8,000
4.96% Series of 1958. . . . . 50.50 100,000 5,000
5,000 5,000
5.28% Series of 1967. . . . . 51.43 200,000 10,000
10,000 10,000
6.56% Series of 1968. . . . . 51.44 200,000 10,000
10,000 10,000
7.60% Series of 1971. . . . . - - -
9,996 9,996
9.36% Series of 1970. . . . . - - -
- 10,000
9.60% Series of 1974. . . . . - - -
- 14,999
1989 Adjustable Rate DARTS. . 25.00 2,000,000 50,000
50,000 50,000
-------
- ------- --------
Total preferred stock
not subject to mandatory
redemption. . . . . . . . . . $ 166,200 $
231,196 $ 306,195
========
======== ========
All or any part of each outstanding series of such preferred stock may be
redeemed by the company at any time at established redemption prices plus
accrued dividends to the date
of redemption.
|
<F7>
6. PREFERRED STOCK SUBJECT TO MANDATORY REDEMPTION
Details of preferred stock subject to mandatory redemption are:
December 31, Shares
1993 Outstanding December
31,
Redemption December 31
- --------------------------------
Description Price* 1993 1993
1992 1991
- -----------------------------------------------------------------------------
- ---------------------
(Thousands
of Dollars)
$5.52 Series L of 1975 . . . . $ - $ - $ - $
- $ 1,926
10.48% Series of 1980 . . . . . - - -
- 14,000
11.52% Series of 1975 . . . . . - - -
- 966
9.10% Series of 1987 . . . . . - - -
50,000 50,000
9.00% Series of 1989 . . . . . 26.65 3,000,000 75,000
75,000 75,000
7.23% Series of 1992 . . . . . 52.41 1,500,000 75,000
75,000 -
5.30% Series of 1993 . . . . . 51.00 1,600,000 80,000
- -
--------
- -------- --------
230,000
200,000 141,892
Less preferred stock to be
redeemed within on year . . . . -
2,500 2,500
--------
- -------- --------
Total preferred stock
subject to mandatory
redemption . . . . . . . . . . $230,000
$197,500 $139,392
========
======== ========
*Redemption prices reduce in future years.
|
The following table details redemption and sinking fund activity forpreferred
stock subject to
mandatory redemption:
Minimum
Annual Shares Reacquired
Sinking-Fund
- ------------------------------------
Series Requirement 1993 1992
1991
- -----------------------------------------------------------------------------
- ---------
(Thousands of Dollars)
$5.52 Series L of 1975 $ - - 38,524
40,000
10.48% Series of 1980 - - 280,000
40,000
11.52% Series of 1975 - - 19,318
20,008
9.10% Series of 1987 - 2,000,000 -
- -
9.00% Series of 1989 (1) 3,750 - -
- -
7.23% Series of 1992 (2) 3,750 - -
- -
5.30% Series of 1993 (3) 16,000 - -
- -
(1) Sinking fund requirements commence October 1, 1995.
(2) Sinking fund requirements commence September 1, 1998.
(3) Sinking fund requirements commence October 1, 1999.
|
The minimum sinking-fund provisions of the series subject to mandatory redemption, for the years 1994 through 1998, aggregate approximately $0 in 1994, $3,750,000 in 1995, 1996, and 1997, and $7,500,000 in 1998. In case of default on sinking-fund payments or the payment of dividends, no payments may be made on any junior stock by way of dividends or otherwise (other than in shares of junior stock) so long as the default continues. If the company is in arrears in the payment of dividends on any outstanding shares of preferred stock, the company would be prohibited from redemption or purchase of less than all of the preferred stock outstanding. All or part of each of the series named above may be redeemed by the company at any time at established redemption prices plus accrued dividends to the date of redemption, subject to certain refunding limitations.
<F8>
7. LONG-TERM DEBT
Details of long-term debt outstanding are:
First Mortgage Bonds:
4 1/4% Series 1963 due 1993 . . . . $ - $ 15,000
8 1/2% Series PP due 1993 . . . . - 125,000
4 1/2% Series 1964 due 1994 . . . . 12,000 12,000
4 1/4% Series WW due 1994 . . . . 170,000 170,000
5 5/8% Series 1967 due 1997 . . . . 20,000 20,000
6% Series S due 1997 . . . . 30,000 30,000
7 5/8% Series UU due 1997 . . . . 200,000 200,000
6 7/8% Series U due 1998 . . . . 40,000 40,000
7 1/8% Series 1968 due 1998 . . . . 25,000 25,000
6 1/2% Series T due 1998 . . . . 20,000 20,000
6 1/2% Series 1968 due 1998 . . . . 10,000 10,000
7 1/4% Series VV due 1999 . . . . 100,000 100,000
8 3/4% Series V due 2000 . . . . - 40,000
8 7/8% Series W due 2000 . . . . - 40,000
5 3/4% Series XX due 2000 . . . . 200,000 -
7 3/8% Series X due 2001 . . . . 30,000 30,000
7 5/8% Series 1971 due 2001 . . . . 30,000 30,000
7 1/2% Series 1972 due 2002 . . . . 35,000 35,000
7 5/8% Series Y due 2002 . . . . 50,000 50,000
7 5/8% Series Z due 2003 . . . . 50,000 50,000
7 1/2% Series 1973 due 2003 . . . . 40,000 40,000
8 3/4% Series AA due 2004 . . . . - 65,000
9 1/4% Series 1974 due 2004 . . . . - 30,000
8 7/8% Series DD due 2007 . . . . - 45,000
9 1/4% Series EE due 2008 . . . . - 40,000
9 3/8% Series 1978 due 2008 . . . . - 40,000
9 3/4% Series QQ due 2018 . . . . 75,000 75,000
9 1/2% Series RR due 2019 . . . . 75,000 75,000
9 3/8% Series SS due 2019 . . . . 75,000 75,000
7 3/8% Series TT due 2019 . . . . 20,000 20,000
7 1/2% Series YY due 2023 . . . . 100,000 -
7 3/8% Series ZZ due 2025 . . . . 125,000 -
---------- ----------
Total First Mortgage Bonds. . $1,532,000 $1,547,000
|
- ---------------------------------------------------------------------------
December 31,
---------------------------
1993 1992
- ---------------------------------------------------------------------------
(Thousands of Dollars)
Pollution Control Notes:
5.90%, due 1998. . . . . . . . . $ - $ 6,197
6.50%, due 2007. . . . . . . . . - 16,000
Variable rate, due 2013-2022 . . 46,400 350,100
Tax exempt, due 2028 . . . . . . . 315,500 -
Fees and interest due for spent fuel
disposal costs . . . . . . . . . 136,125 132,015
Other. . . . . . . . . . . . . . . 35,417 41,493
Less amounts due within one year . 314,020 157,104
Unamortized premium and
discount, net. . . . . . . . . . (8,162) (4,869)
---------- ----------
Long-term debt, net . . . . . $1,743,260 $1,930,832
========== ==========
|
Long-term debt maturities and cash sinking-fund requirements on debt outstanding at December 31, 1993 for the years 1994 through 1998 are approximately: $189,020,000, $8,111,000, $9,372,000, $260,828,000, and $95,011,000, respectively. Also, $125 million of first mortgage bonds outstanding at December 31, 1993 had been called in December 1993 for redemption in 1994. In addition, there are annual one percent sinking- and improvement-fund requirements, currently amounting to $13,950,000 for the year 1994, $12,250,000 for 1995, 1996, and 1997, and $9,750,000 for 1998. Such sinking- and improvement-fund requirements may be satisfied by the deposit of cash or bonds or by certification of property additions.
All or any part of each outstanding series of first mortgage bonds may be redeemed by the company at any time at established redemption prices plus accrued interest to the date of redemption, except certain series which are subject to certain refunding limitations during their respective initial five-year redemption periods.
Essentially all of the company's utility plant is subject to the lien of its first mortgage bond indenture. As of December 31, 1993, the company has secured $315.5 million of pollution control notes with second mortgage liens on Millstone 1, junior to the liens of its first mortgage bond indentures.
CL&P has entered into an interest-rate cap contract to reduce the potential impact of upward changes in interest rates on certain variable-rate tax- exempt pollution control revenue bonds. Approximately $340 million of total outstanding long-term variable-rate debt is secured by this interest rate cap. The total cost of the interest-rate cap for 1993 was approximately $2.9 million, the cost of which is amortized over the terms of the contract, which is three years. The fair market value of the interest-rate cap contract as of December 31, 1993 is approximately $388,000.
Fees and interest due for spent fuel disposal costs are scheduled to be paid to the United States Department of Energy just prior to the first delivery of prior-period spent fuel, which is anticipated to be in 1998. Until such payment is made, the outstanding balance will continue to accrue interest at the three-month Treasury Bill Yield Rate. For additional information, see <F2> Note 1 of the accompanying Notes to Financial Statements.
<F9>
8. INCOME TAX EXPENSE
The components of the federal and state income tax provisions charged to
operations are:
- -----------------------------------------------------------------------------
- ---------------
For the Years Ended December 31, 1993 <F2>(Note 1) 1992
1991
- -----------------------------------------------------------------------------
- ---------------
(Thousands of Dollars)
Current income taxes:
Federal. . . . . . . . . . . . . . . . . $115,403 $ 61,773
$ 33,717
State. . . . . . . . . . . . . . . . . . 44,473 27,153
18,782
-------- --------
- --------
Total current. . . . . . . . . . . . . 159,876 88,926
52,499
-------- --------
- --------
Deferred income taxes, net:
Federal. . . . . . . . . . . . . . . . . 3,808 60,788
88,554
State. . . . . . . . . . . . . . . . . . (12,987) 11,833
26,430
-------- --------
- --------
Total deferred . . . . . . . . . . . . (9,179) 72,621
114,984
-------- --------
- --------
Investment tax credits, net . . . . . . (11,009) (6,230)
(6,230)
-------- ---------
- ---------
Total income tax expense. . . . . . . $139,688 $155,317
$161,253
======== ========
========
The components of total income tax expense are classified as follows:
Income taxes charged to operating
expenses. . . . . . . . . . . . . . . . $144,547 $172,236
$173,102
Income taxes associated with the
amortization of deferred nuclear
plants return - borrowed funds. . . . . - (15,157)
(12,263)
Income taxes associated with AFUDC and
deferred nuclear plants return -
borrowed funds. . . . . . . . . . . . . - 9,409
13,418
Other income taxes - credit. . . . . . . (4,859) (11,171)
(13,004)
-------- --------
---------
Total income tax expense . . . . . . . . $139,688 $155,317
$161,253
======== ========
========
|
Deferred income taxes are comprised of the tax effects of temporary differences
as follows:
- -----------------------------------------------------------------------------
- -----------------
For the Years Ended December 31, 1993 <F2>(Note 1) 1992
1991
- -----------------------------------------------------------------------------
- -----------------
(Thousands of
Dollars)
Depreciation, leased nuclear fuel,
settlement credits, and disposal
costs. . . . . . . . . . . . . . . . . . $ 42,663 $ 43,715
$ 49,636
Conservation and load management. . . . . 9,156 13,506
22,594
Postretirement benefits accrual . . . . . (2,579) -
-
Energy adjustment clauses . . . . . . . . (52,189) 12,627
47,483
AFUDC and deferred nuclear plants
return, net. . . . . . . . . . . . . . . (13,741) (5,748)
1,155
Early retirement program. . . . . . . . . (3,355) 3,988
(9,718)
Pension accrual . . . . . . . . . . . . . 3,553 885
(351)
Settlement, canceled independent
power plants . . . . . . . . . . . . . . - 7,251
-
Loss on bond redemption . . . . . . . . . 8,145 10
-
Other . . . . . . . . . . . . . . . . . . (832) (3,613)
4,185
--------- --------
--------
Deferred income taxes, net. . . . . . $ (9,179) $ 72,621
$114,984
========= ========
========
A reconciliation between income tax expense and the expected tax expense at the
applicable statutory
rate is as follows:
- -----------------------------------------------------------------------------
- -----------------
For the Years Ended December 31, 1993 <F2>(Note 1) 1992
1991
- -----------------------------------------------------------------------------
- -----------------
(Thousands of
Dollars)
Expected federal income tax at
35 percent of pretax income
for 1993 and 34 percent for
1992 and 1991. . . . . . . . . . . . . . $115,898 $123,091
$136,704
Tax effect of differences:
Depreciation differences . . . . . . . . 19,264 15,826
10,647
Deferred nuclear plants return -
other funds . . . . . . . . . . . . . . (8,294) (12,035)
(12,483)
Amortization of nuclear plants return -
other funds . . . . . . . . . . . . . . 18,648 14,511
12,918
Property tax differences . . . . . . . . (12,320) (732)
502
Investment tax credit amortization . . . (11,009) (6,230)
(6,230)
State income taxes, net of federal
benefit . . . . . . . . . . . . . . . . 20,466 25,730
29,987
Adjustment for prior years taxes . . . . (2,330) (3,500)
(7,000)
Other, net . . . . . . . . . . . . . . . (635) (1,344)
(3,792)
-------- --------
- --------
Total income tax expense . . . . . . . $139,688 $155,317
$161,253
======== ========
========
|
<F10>
9. PENSION BENEFITS
The company participates in a uniform noncontributory defined benefit retirement plan covering all regular system employees (the Plan). Benefits are based on years of service and employees' highest eligible compensation during five consecutive years of employment. The company's direct-allocated portion of the system's pension cost, part of which was charged to utility plant, approximated $7.6 million in 1993, ($1.7) million in 1992, and $10.8 million in 1991. The company's pension costs for 1993 and 1991 include approximately $13.1 million and $10.0 million, respectively, related to work force reduction programs.
Currently, the company funds annually an amount at least equal to that which will satisfy the requirements of the Employment Retirement Income Security Act and the Internal Revenue Code. Pension costs are determined using market-related values of pension assets. Pension assets are invested primarily in domestic and international equity securities and bonds.
The components of the Plan's net pension cost for the system (excluding PSNH and NAESCO in 1992 and 1991) are:
- ----------------------------------------------------------------------------
For the Years Ended December 31, 1993 1992 1991
- ----------------------------------------------------------------------------
(Thousands of Dollars)
Service cost . . . . . . . . . . $ 59,068 $ 27,480 $ 48,738
Interest cost. . . . . . . . . . 81,456 69,746 71,041
Return on plan assets. . . . . . (176,798) (77,232) (198,437)
Net amortization . . . . . . . . 65,447 (16,266) 108,175
-------- -------- --------
Net pension cost . . . . . . . . $ 29,173 $ 3,728 $ 29,517
======== ======== ========
- ----------------------------------------------------------------------------
For calculating pension cost, the following assumptions were used:
- ----------------------------------------------------------------------------
For the Years Ended December 31, 1993 1992 1991
- -----------------------------------------------------------------------------
Discount rate. . . . . . . . . . 8.00% 8.50% 9.00%
Expected long-term rate of
return. . . . . . . . . . . . . 8.50 9.00 9.70
Compensation/progression rate. . 5.00 6.75 7.50
- -----------------------------------------------------------------------------
|
The following table represents the Plan's funded status reconciled to the NU Consolidated Balance Sheets:
(Thousands of Dollars)
Accumulated benefit obligation,
including $817,421,000 of vested
benefits at December 31, 1993 and
$719,608,000 of vested benefits at
December 31, 1992 . . . . . . . . . . $ 898,788 $ 764,432
========== ==========
Projected benefit obligation . . . . . $1,141,271 $1,055,295
Less: Market value of plan assets . . 1,340,249 1,226,468
---------- ----------
Market value in excess of projected
benefit obligation. . . . . . . . . . 198,978 171,173
Unrecognized transition amount . . . . (16,735) (18,277)
Unrecognized prior service costs . . . 10,287 8,658
Unrecognized net gain. . . . . . . . . (275,043) (214,894)
---------- ----------
Accrued pension liability. . . . . . . $ (82,513) $ (53,340)
========== ===========
- -----------------------------------------------------------------------------
The following actuarial assumptions were used in calculating the Plan's year-
end funded status:
- -----------------------------------------------------------------------------
At December 31, 1993 1992
- -----------------------------------------------------------------------------
Discount rate. . . . . . . . . . . . . 7.75% 8.00%
Compensation/progression rate. . . . . 4.75 5.00
|
The discount rate for 1993 was determined by analyzing the interest rates, as of December 31, 1993, of long-term high-quality corporate debt securities having a duration comparable to the 13.8-year duration of the plan.
During 1993, NU's work force was reduced by approximately 7 percent through a work force reduction program that involved an early retirement program and involuntary terminations. CL&P's direct cost of the program, which approximated $14.8 million, included pension, severance, and other benefits.
<F11>
10. POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
The company provides certain health care benefits, primarily medical and dental, and life insurance benefits through a benefit plan to retired employees. These benefits are available for employees leaving the company who are otherwise eligible to retire and have met specified service requirements. Through December 31, 1992, the company recognized the cost of these benefits as
they were paid. In December 1990, the FASB issued SFAS 106. This new standard requires that the expected cost of postretirement benefits, primarily health and life insurance benefits, must be charged to expense during the years that eligible employees render service. Effective January 1, 1993, the company adopted SFAS 106 on a prospective basis. Total health care and life insurance cost, part of which were deferred or charged to utility plant, approximated $23,170,000 in 1993, $8,791,000 in 1992, and $7,525,000 in 1991.
On January 1, 1993, the accumulated postretirement benefit obligation (APBO)
represented the company's prior-service obligation upon the adoption of SFAS
106. As allowed by SFAS 106, the company is amortizing its APBO of
approximately $164 million over a 20-year period. For current employees and
certain retirees, the total SFAS 106 benefit is limited to two times the 1993
health care costs. The SFAS 106 obligation has been calculated based on this
assumption.
During 1993, the company did not fund SFAS 106 postretirement costs through external trusts. The company expects to fund annually amounts once they have been rate recovered and which also are tax-deductible under the Internal Revenue Code.
The following table represents the plan's funded status reconciled to the Balance Sheet at December 31, 1993:
Accumulated postretirement
benefit obligation of:
Retirees . . . . . . . . . . . . . . $(119,520)
Fully eligible active employees. . . (288)
Active employees not eligible to
retire. . . . . . . . . . . . . . . (29,270)
---------
Total accumulated postretirement
benefit obligation. . . . . . . . . (149,078)
Unrecognized transition amount . . . 139,539
Unrecognized net gain. . . . . . . . (2,591)
---------
Accrued postretirement benefit
liability . . . . . . . . . . . . . $ (12,130)
=========
- ----------------------------------------------------------------------------
|
The components of health care and life insurance costs for the year ended December 31, 1993 are:
- ----------------------------------------------------------------------------
(Thousands of Dollars)
Service cost . . . . . . . . . . . . $ 3,397
Interest cost. . . . . . . . . . . . 12,091
Net amortization . . . . . . . . . . 7,682
-------
Net health care and life insurance
costs . . . . . . . . . . . . . . . $23,170
=======
- ----------------------------------------------------------------- -----------
|
For measurement purposes, an 11.1-percent annual rate of increase in the per capita cost of covered health care benefits was assumed for 1993; the rate was assumed to decrease to 5.4 percent for 2002. The effect of increasing the assumed health care cost trend rates by one percentage point in each year would increase the accumulated postretirement benefit obligation as of December 31, 1993 by $10.5 million and the aggregate of the service and interest cost components of net periodic postretirement benefit cost for the year then ended by $1.0 million.
The weighted-average discount rate used in determining the accumulated postretirement benefit obligation was 7.75 percent. The discount rate for 1993 was determined by analyzing the interest rates, as of December 31, 1993, of the long-term, high-quality corporate debt securities having a duration comparable to that of the plan.
CL&P has received approval from the DPUC to defer and recover the incremental SFAS 106 postretirement costs within eight years.
<F12>
11. COMMITMENTS AND CONTINGENCIES
CONSTRUCTION PROGRAM
The construction program is subject to periodic review and revision. Actual
construction expenditures may vary from such estimates due to factors such as
revised load estimates, inflation, revised nuclear safety regulations,
delays, difficulties in the licensing process, the availability and cost of
capital, and the granting of timely and adequate rate relief by regulatory
commissions, as well as actions by other regulatory bodies.
CL&P currently forecasts construction expenditures (including AFUDC) of approximately $741.8 million for the years 1994-1998, including $157.8 million for 1994. In addition, the company estimates that nuclear fuel requirements, including nuclear fuel financed through the NBFT, will be approximately $317.7 million for the years 1994-1998, including $74.6 million for 1994. See <F3> Note 2, "Leases," for additional information about the financing of nuclear fuel.
NUCLEAR PERFORMANCE
Outages that occurred over the period October 1990 through February 1992 at
the Millstone nuclear units have been the subject of five ongoing prudence
reviews in Connecticut. CL&P has received final decisions on four of the
reviews. The Office of Consumer Counsel has appealed decisions favorable to
the company in two dockets. The exposure under these two dockets is
approximately $66 million. The DPUC has suspended a third docket, pending
the outcome of one of the appeals. The exposure under this docket is $26
million. The only remaining nuclear outage prudence docket before the DPUC
is the docket established to review the 1992 outage at Millstone 2 to replace
the steam generators. A decision is expected in late 1994. Management
believes that its actions with respect to these outages have been prudent,
and it does not expect the outcome of the prudence reviews to result in
material disallowances.
ENVIRONMENTAL MATTERS
CL&P is subject to regulation by federal, state, and local authorities with
respect to air and water quality, handling and the disposal of toxic
substances and hazardous and solid wastes, and the handling and use of
chemical products. CL&P has an active environmental auditing program to
prevent, detect, and remedy noncompliance with environmental laws or
regulations and believes that it is in substantial compliance with current
environmental laws and regulations. Changing
environmental requirements could hinder the construction of new fossil-fuel environmental generating units, transmission, and distribution lines, substations, and other facilities. The cumulative long-term economic cost impact of increasingly stringent environmental requirements cannot be estimated. Changing environmental requirements could also require extensive and costly modifications to CL&P's existing hydro, nuclear, and fossil-fuel generating units, and transmission and distribution systems, and could raise operating costs significantly. As a result, CL&P may incur significant additional environmental costs, greater than amounts included in cost of removal and other reserves, in connection with the generation and transmission of electricity and the storage, transportation, and disposal of by-products and wastes. CL&P may also encounter significantly increased costs to remedy the environmental effects of prior waste handling and disposal activities.
CL&P has recorded a liability for what it believes is, based upon information currently available, the estimated environmental remediation costs for waste disposal sites for which it expects to bear legal liability. To date, these costs have not been material with respect to the earnings or financial position of the company. In most cases, the extent of additional future environmental cleanup costs is not estimable due to factors such as the unknown magnitude of possible contamination, the appropriate remediation method, the possible effects of future legislation and regulation, the possible effects of technological changes related to future cleanup, and the difficulty of determining future liability, if any, for the cleanup of sites at which CL&P has been informed that it may be determined to be legally liable by the federal or state environmental agencies. In addition, CL&P cannot estimate the potential liability for future claims that may be brought against it by private parties. However, considering known facts and existing laws and regulatory practices, management does not believe that such matters will have a material adverse effect on CL&P's financial position or future results of operations. At December 31, 1993, the liability recorded by CL&P for its estimated environmental remediation costs, excluding any possible insurance recoveries or recoveries from third parties, amounted to $2.9 million. However, in the event that it becomes necessary to effect environmental remedies that are currently not considered probable for the sites for which CL&P has recorded a liability, it is reasonably possible that, based on information currently available and management intent, that the upper limit of CL&P's environmental liability range could increase to approximately $5.8 million.
NUCLEAR INSURANCE CONTINGENCIES
The Price-Anderson Act currently limits public liability from a single
incident at a nuclear power plant to $9.4 billion. The first $200 million of
liability would be provided by purchasing the maximum amount of commercially
available insurance. Additional coverage of up to a total of $8.8 billion
would be provided by an assessment of $75.5 million per incident, levied on
each of the 116 nuclear units that are currently subject to the Secondary
Financial Protection Program in the United States, subject to a maximum
assessment of $10 million per incident per nuclear unit in any year. In
addition, if the sum of all public liability claims and legal costs arising
from any nuclear incident exceeds the maximum amount of financial protection,
each reactor operator can be assessed an additional 5 percent, up to $3.8
million, or $437.9 million in total, for all 116 nuclear units. The maximum
assessment is to be adjusted at least every five years to reflect
inflationary changes. Based on CL&P's ownership interests in Millstone 1, 2,
and 3, and Seabrook 1, CL&P's maximum liability would be $173.6 million per
incident. In addition, through CL&P's power purchase contracts with the four
Yankee regional nuclear generating companies, CL&P would be responsible for
up to an additional $63.8 million per incident. Payments for CL&P's
ownership interest in nuclear generating facilities would be limited to a
maximum of $29.9 million per incident per year.
Insurance has been purchased from Nuclear Electric Insurance Limited (NEIL) to cover: (1) certain extra costs incurred in obtaining replacement power during prolonged accidental outages with respect to CL&P's ownership interests in Millstone 1, 2, and 3, Seabrook 1, and CY; and (2) the cost of repair, replacement, or decontamination or premature decommissioning of utility property resulting from occurrences with respect to CL&P's ownership interests in Millstone 1, 2, and 3, Seabrook 1, CY, MY, and VY. All companies insured with NEIL are subject to retroactive assessments if losses exceed the accumulated funds available to NEIL. The maximum potential assessments against CL&P, with respect to losses arising during current policy years are approximately $9.7 million under the replacement power policies and $18.9 million under the property damage, decontamination, and decommissioning policies. Although CL&P has purchased the limits of coverage currently available from the conventional nuclear insurance pools, the cost of a nuclear incident could exceed available insurance proceeds.
Insurance has been purchased from American Nuclear Insurers/Mutual Atomic Energy Liability Underwriters, aggregating $200 million on an industry basis for coverage of worker claims. All companies insured under this coverage are subject to retrospective assessments of $3.2 million per reactor. The maximum potential assessments against CL&P with respect to losses arising during the current policy period are approximately $9.6 million.
FINANCING ARRANGEMENTS FOR THE REGIONAL NUCLEAR GENERATING COMPANIES CL&P believes that the regional nuclear generating companies may require additional external financing in the next several years for construction expenditures, nuclear fuel, possible refinancings, and other purposes. Although the ways in which each regional nuclear generating company will attempt to finance these expenditures has not been determined, CL&P may be asked to provide direct or indirect financial support for one or more of these companies.
PURCHASED POWER ARRANGEMENTS
CL&P purchases a portion of its electricity requirements pursuant to long-
term contracts with the Yankee companies. Under the terms of its agreements,
the company pays its ownership share (or entitlement share) of generating
costs, which include depreciation, operation and maintenance expenses, the
estimated cost of decommissioning, and a return on invested capital. These
costs are recorded as purchased power expense, and are recovered through the
company's rates. The total cost of purchases under these contracts for the
units that are operating amounted to $112.3 million in 1993, $103.2 million
in 1992, and $99.7 million in 1991. See <F2> Note 1, "Summary Of Significant
Accounting Policies - Investments and Jointly Owned Electric Utility Plant"
and <F4> Note 3, "Nuclear Decommissioning" for more information on the Yankee
companies.
CL&P has entered into various arrangements for the purchase of capacity and energy from nonutility generators. Some of these arrangements generally have terms from 10 to 30 years, and require the company to purchase the energy at specified prices or formula rates. For the 12 months ended December 31, 1993, 14 percent of NU system load requirements was met by cogenerators and small power producers. The total cost of purchases under these arrangements amounted to $279.8 million in 1993, $267.3 million in 1992, and $237.6 million in 1991. These costs are eventually recovered through the company's rates.
The estimated annual cost of CL&P's significant purchase power arrangements is provided below:
(In Millions)
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1994 1995 1996 1997 1998
---- ---- ---- ---- ----
Yankee companies $106.6 $109.2 $121.5 $111.8 $126.5
Nonutility generators 293.7 303.3 313.1 318.6 324.9
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HYDRO-QUEBEC
Along with other New England utilities, CL&P, PSNH, WMECO, and HWP entered
into agreements to support transmission and terminal facilities to import
electricity from the Hydro-Quebec system in Canada. CL&P, PSNH, WMECO, and
HWP, in the aggregate, are obligated to pay, over a 30-year period, their
proportionate share of the annual operation, maintenance, and capital costs
of these facilities, which are currently forecast to be $172.1 million for
the years 1994-1998, including $37.2 million for 1994.
GREAT BAY POWER CORPORATION
CL&P and The United Illuminating Company, an unaffiliated company, have
agreed to make certain advances up to $20 million to cover shortfalls in the
funding of the 12.13 percent ownership interest in Seabrook 1 of Great Bay
Power Corporation, an unaffiliated company. CL&P's share of this commitment
is limited to 60 percent of the advances, or $12 million. As of December 31,
1993, $1,047,000 of advances from CL&P were outstanding under this agreement.
PROPERTY TAXES
CY has a significant court appeal pending for its property tax assessment in
the town of Haddam, Connecticut, concerning production plant. The central
issue is the fair market value of utility property. The company believes
that a properly derived assessment that recognizes the effect of rate
regulation will result in a fair market value that approximates net book
cost. This is the assessment level that taxing authorities are predominantly
using throughout Connecticut, Massachusetts, and some of New Hampshire.
However, towns such as Haddam advocate a method that approximates
reproduction cost. The company estimates that,for the Haddam assessment, the
change to a reproduction cost-methodology could result in a property tax
valuation approximately three times greater than a value approximating net
book cost. Although CY is currently paying property taxes based on the
higher assessment, to date, the higher assessment has not had a material
adverse effect on it or the company.
The company believes that assessment levels that approximate net book cost accurately reflect the fair market value of regulated utility property. However, because of uncertainties associated with the court appeal and the potential impact of an adverse court decision on property tax assessment policy in Connecticut, the company cannot estimate the potential effect of an adverse court decision on future results of operations or financial condition. However, the company believes that, based upon past regulatory practices, it would be allowed to recover any increased property tax assessment prospectively beginning at the time new rates are established.
<F13>
12. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used to estimate the fair value of each of the following financial instruments:
Cash, special deposits, and nuclear decommissioning trusts: The carrying amounts approximate fair value.
Preferred stock and long-term debt: The fair value of CL&P's fixed rate securities is based upon the quoted market price for those issues or similar issues. Adjustable rate securities are assumed to have a fair value equal to their carrying value.
The carrying amounts of CL&P's financial instruments and the estimated fair values are as follows:
- ----------------------------------------------------------------------------
Carrying Fair
At December 31, 1993 Amount Value
- ----------------------------------------------------------------------------
(Thousands of Dollars)
Preferred stock not subject to mandatory
redemption . . . . . . . . . . . . . . . . . $ 166,200 $ 128,826
Preferred stock subject to mandatory
redemption . . . . . . . . . . . . . . . . . 230,000 240,400
Long-term debt:
First Mortgage Bonds . . . . . . . . . . . . 1,532,000 1,580,396
Other long-term debt . . . . . . . . . . . . 533,442 539,518
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Carrying Fair
At December 31, 1992 Amount Value
- --------------------------------------------------------------------------
(Thousands of Dollars)
Preferred stock not subject to mandatory
redemption . . . . . . . . . . . . . . . . . $ 231,196 $ 184,910
Preferred stock subject to mandatory
redemption . . . . . . . . . . . . . . . . . 200,000 208,750
Long-term debt:
First Mortgage Bonds . . . . . . . . . . . . 1,547,000 1,594,643
Other long-term debt . . . . . . . . . . . . 545,805 545,805
- --------------------------------------------------------------------------
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The fair values shown above have been reported to meet disclosure requirements and do not purport to represent the amounts that those obligations would be settled at.
In May 1993, the FASB issued Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities (SFAS 115)." SFAS 115 requires companies to disclose the classification of investments in debt or equity securities based on management's intent and ability to hold the security. SFAS 115 also requires disclosure of the aggregate fair value, gross unrealized holding gains, gross unrealized holding losses and amortized cost basis by major security type. Effective January 1, 1994, CL&P will adopt SFAS 115 on a prospective basis. CL&P anticipates that the adoption of SFAS 115 will not have a material impact on future results of operations or financial position.
THE CONNECTICUT LIGHT AND POWER COMPANY
To the Board of Directors
of The Connecticut Light and Power Company:
We have audited the accompanying balance sheets of The Connecticut Light and Power Company (a Connecticut corporation and a wholly owned subsidiary of Northeast Utilities) as of December 31, 1993 and 1992, and the related statements of income, common stockholder's equity and cash flows for each of the three years in the period ended December 31, 1993. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of The Connecticut Light and Power Company as of December 31, 1993 and 1992, and the results of its operations and cash flows for each of the three years in the period ended December 31, 1993, in conformity with generally accepted accounting principles.
As discussed in <F2> Note 1 to the Financial Statements, "Summary of Significant Accounting Policies-Accounting Changes," effective January 1, 1993, The Connecticut Light and Power Company changed its methods of accounting for property taxes, income taxes, and postretirement benefits other than pensions.
/s/Arthur Andersen & Co.
ARTHUR ANDERSEN & CO.
Hartford, Connecticut
February 18, 1994
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THE CONNECTICUT LIGHT AND POWER COMPANY
This section contains management's assessment of The Connecticut Light and Power Company's (CL&P or the company) financial condition and the principal factors having an impact on the results of operations. The company is a wholly-owned subsidiary of Northeast Utilities (NU). This discussion should be read in conjunction with the company's financial statements and footnotes.
FINANCIAL CONDITION
OVERVIEW
The company's net income decreased to $191.4 million in 1993 from $206.7 million in 1992. The 1993 net income reflects the cumulative effect of a change in the accounting for Connecticut municipal property taxes. The company adopted a one-time change in the method of accounting for municipal property tax expense in the first quarter of 1993. This change resulted in a one-time contribution to net income of $47.7 million.
See the "Notes to Financial Statements" for further information on the property tax accounting change.
Net income before the cumulative effect of the change in accounting for property taxes was $143.7 million in 1993. The decrease from 1992 is primarily attributable to one-time impacts of (a) disallowances ordered by the Department of Public Utility Control (DPUC) in the 1993 rate case decision and (b) the $10 million charge to earnings in the third quarter of 1993 for the costs of the company's employee reduction program. Other items that affected net income in 1993 include increased revenues from the 1993 retail rate increase and the company's continued cost-management efforts. These increases were offset by higher costs for the recovery of regulatory deferrals and the higher contribution in 1992 of energy transactions with other utilities.
The year 1993 was one of both challenge and success for the company. CL&P's work force was reduced by about 11 percent in 1993 through an employee reduction program that involved early retirements and involuntary terminations. The 1993 composite nuclear capacity factor of 80.8 percent was the highest level the NU system has ever achieved and far above the national average. The DPUC approved a three-year rate plan that weakened 1993 earnings but will assure CL&P customers rate stability over the next few years which will help to improve CL&P's future earnings and competitive position.
In 1994, CL&P will continue to face challenges associated with a lagging economy and competition. Retail sales for 1993 were flat, as compared to 1992, as a result of a stagnant Connecticut economy. The company expects retail sales growth of about two percent in 1994, based on some modest improvement in the economy.
Competition within the electric utility industry is increasing. In response, CL&P has developed, and is continuing to develop, a number of initiatives to retain and continue to serve its existing customers and to expand its retail and wholesale customer base. These initiatives are aimed at keeping customers from either leaving CL&P's retail service territory or replacing CL&P's electric service with alternative energy sources.
The cost of doing business, including the price of electricity, is higher in the Northeast than in most other parts of the country. Relatively high state and local taxes, labor costs, and other costs of doing business in New England also contribute to competitive disadvantages for many industrial and commercial customers of CL&P. These disadvantages have aggravated the pressures on business customers in the current weakened
regional economy. Since 1991, the company has worked actively with the Connecticut Department of Economic Development to package development incentives for a variety of retail and wholesale customers. These economic development packages typically include both electric rate discounts and incentive payments for energy-efficient construction, as well as technical support and energy conservation services. Targeted reductions in effect at the end of 1993 to a limited group of large customers were successful in preserving CL&P revenues of approximately $28 million. The amount of discounts provided to customers are expected to increase as the company intensifies its efforts to retain existing customers and gain new customers.
As a result of very limited load growth throughout the Northeast and the operation of several new generating plants in the past five years, wholesale competition has grown, and a seller's market for electricity has turned into a buyer's market. The prices the company has been able to receive for new wholesale sales have generally been far lower than the prices prevalent in 1988 and 1989. In future years, competition in the Northeast is expected to increase, putting further downward pressure on prices. However, the potential price decreases may be offset somewhat by an improvement in the region's economy as well as by the retirement of a number of the region's existing generating facilities.
The ability of retail customers to select an electricity supplier and then force the local electric utility to transmit the power to the customer's site is known as "retail wheeling". While wholesale wheeling is mandated by the Energy Policy Act of 1992 under certain circumstances, retail wheeling is generally not required in the company's jurisdiction. In Connecticut, the DPUC has begun an investigation into the viability of retail wheeling.
NU management has taken steps to make the NU system companies, including CL&P, more competitive and profitable in the changing utility environment. A systemwide emphasis on improved customer service is a central focus of the reorganization of NU that became effective on January 1, 1994. The reorganization entails realignment of the system into two new core business groups. The first core business group is devoted to energy resource acquisition and wholesale marketing and focuses on nuclear, fossil, and hydroelectric generation, wholesale power marketing, and new business development. The second core business group oversees all customer service, transmission and distribution operations, and retail marketing in Connecticut, New Hampshire, and Massachusetts. These two core business groups are served by various support functions.
In connection with NU's reorganization, a corporate reengineering process has begun which should help the company to identify opportunities to become more competitive while improving customer service and maintaining excellent operational performance. NU has aggressive cost-reduction targets over the next three years, which should enable the company to remain competitive by reducing prices to vulnerable customers in particular.
To date, the company has not been materially affected by competition, and it does not foresee substantial adverse effect in the near future, unless the current regulatory structure is substantially altered. The company believes the steps it is taking will have significant, positive effects in the next few years. In addition, CL&P benefits from a diverse retail base. The company has no significant dependence on any one customer or industry. The NU system's extensive transmission facilities and diversified generating capacity are all strong positive factors in the regional wholesale power market. NU serves about 30 percent of New England's electric needs and is one of the 20 largest electric utility systems in the country.
Achieving measurable improvement in earnings in 1994, will depend, in part, on the success of the company's wholesale power marketing customer retention and reengineering efforts.
RATE MATTERS
Deferred charges at December 31, 1993 were $1.5 billion, which includes $1.0 billion for the adoption in 1993 of Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes." Deferred charges, excluding the regulatory asset for SFAS No. 109 decreased almost $90 million in 1993. Recoveries for the deferred costs of Millstone 3, Seabrook, and the Yankee Atomic Electric Company (YAEC) contract obligation and reductions in deferred energy costs were partially offset by increased deferrals for conservation and load management costs. The company is currently recovering some amounts of its remaining deferred charges from customers. Management expects that substantially all of the deferred charges will be recovered through future rates.
Under SFAS No. 109, the company reflected a regulatory asset and a deferred tax liability for the cumulative amount of income taxes associated with timing differences for which deferred taxes had not been provided but are expected to be recovered from customers in the future. The adoption of SFAS No. 109 has not had a material effect on results of operations.
The company also adopted SFAS No. 106, "Employer's Accounting for Postretirement Benefits Other Than Pensions" in 1993. Adopting SFAS No. 106 has not had a material impact on financial condition or results of operations, because the company has received approval from the DPUC to defer these costs and expects to recover these costs in the future.
See the "Notes To Financial Statements" for further details on deferred charges and recently adopted accounting standards.
On June 16, 1993, the DPUC issued a final decision in CL&P's December 1992 retail rate case (the rate decision) approving a multiyear rate plan which provides for annual rate increases of $46 million, or 2.01 percent, in July 1993; $47.1 million, or 2.04 percent, in July 1994; and $48.2 million, or 2.06 percent, in July 1995. The total cumulative increase granted of $141.3 million, or 6.1 percent, was approximately 42 percent of CL&P's updated request.
In light of the State of Connecticut's concern over economic development and industrial and commercial rates, one important aspect of the rate case was that industrial and manufacturing rates will only rise by about 1.1 percent annually over the three year period. Other significant aspects of the rate decision included the reduction of CL&P's return on equity (ROE) from 12.9 percent to 11.5 percent for the first year of the multiyear plan, 11.6 percent for the second year, and 11.7 percent for the third year; a 32-month phase-in beginning in 1995 of CL&P's nonpension, postretirement benefit costs required to be recognized under SFAS No. 106 with amortization of deferred amounts over five years; the three-year phase-in of the Millstone 2 steam generators; the deferral of cogeneration expenses with carrying costs of $42.1 million in fiscal year 1994 and $20.9 million in fiscal year 1995 with recovery over five years beginning July 1, 1996; and the full recovery of the remaining costs of the Millstone 3 and Seabrook phase-ins(balance of $185.9 million at December 31, 1993).
The rate decision used $49 million of prior fuel overrecoveries to offset a similar amount of the unrecovered replacement power costs under CL&P's Generation Utilization Adjustment Clause (GUAC). The GUAC has been in operation since 1979 and was designed as a mechanism to recover or to refund certain fuel costs if the nuclear plants do not operate at a predetermined capacity factor. In January 1994, the DPUC issued a decision ordering CL&P not to include a GUAC amount in customers' bills through August 1994. The DPUC found that CL&P overrecovered its fuel costs during the 1992-1993 GUAC period and offset the amount of the overrecovery against the unrecovered GUAC balance. The effect of the order was a disallowance of $7.9 million. The DPUC further ordered that any GUAC deferred charges subsequent to July 1993 will be offset by any fuel overrecoveries. There is an unrecovered GUAC balance at December 31, 1993 of $13.7 million but there is not expected to be an unrecovered balance at the end of the GUAC period in August 1994. The DPUC's decision creates some uncertainty about the future operation of the GUAC. CL&P
has requested further clarification of the decision, and has appealed it, but does not expect that the decision will have a material adverse effect on future results of operations.
The rate decision also required CL&P to allocate to customers a portion of the property tax accounting change made in the first quarter of 1993, which resulted in a charge against other income of $10.2 million in the second quarter of 1993.
In August 1993, two appeals were filed from the DPUC's June 1993 rate decision. CL&P appealed four issues from the decision. The second appeal was filed by the Connecticut Office of Consumer Council (OCC) and the City of Hartford. This appeal challenges the legality of the multi-year plan accepted by the DPUC. CL&P has filed a motion to dismiss this appeal on jurisdictional grounds. In addition, the Court rejected the City of Hartford's and OCC's motion to stay implementation of the second and third year of the rate plan pending the outcome of their appeal.
Outages that occurred over the period October 1990 through February 1992 at the Millstone nuclear units have been the subject of five ongoing prudence reviews in Connecticut. CL&P has received final decisions on four of the reviews. The OCC has appealed decisions favorable to the company in two dockets. The exposure under these two dockets is approximately $66 million. The DPUC has suspended a third docket, pending the outcome of one of the appeals. The exposure under this docket is $26 million. The only remaining nuclear outage prudence docket before the DPUC is the docket established to review the 1992 nuclear outage at Millstone 2 to replace the steam generators. A decision is expected in late 1994. Management believes that its actions with respect to these outages have been prudent, and it does not expect the outcome of the prudence reviews to result in material disallowances.
In April 1993, the DPUC issued an order approving a new Conservation Adjustment Mechanism (CAM), which allowed CL&P to recover Conservation and Load Management (C&LM) expenditures over an eight-year period (reduced from ten years) and reaffirmed program performance incentives. In December 1993, CL&P filed a proposed CAM settlement with the DPUC. The settlement proposes 1994 C&LM expenditures of $39 million, reduction in the recovery period from 8 to 3.85 years and other changes in program designs, performance incentives and cost recovery. Unrecovered C&LM costs at December 31, 1993, were $111.4 million.
ENVIRONMENTAL MATTERS
The NU system devotes substantial resources to identify and then to meet the multitude of environmental requirements it faces. The system has active auditing programs addressing a variety of different regulatory requirements, including an environmental auditing program to detect and remedy noncompliance with environmental laws or regulations.
The company is potentially liable for environmental cleanup costs at a number of sites both inside and outside of its service territory. To date, the future estimated environmental remediation costs for these sites for which the company expects some legal liability have not been material with respect to the earnings or financial position of CL&P. At December 31, 1993, the liability recorded by CL&P for its estimated environmental remediation costs, excluding any possible insurance recoveries or recoveries from third parties, amounted to approximately $2.9 million. However, while not probable, it is reasonably possible that these costs could rise to as much as $5.8 million. The extent of additional future environmental cleanup costs is not estimable due to factors such as the unknown magnitude of possible contamination and changes in existing laws and regulatory practices.
The company expects that the implementation of Phase I of the 1990 Clean Air Act Amendments will require only modest emissions reductions. CL&P's exposure is minimal because of its investment in nuclear energy in the 1970s and 1980s and the burning of low-sulfur fuels. The costs for meeting the Phase II requirements cannot be estimated at this time because the emission limits have not been determined.
The company's estimated cost of decommissioning its shares of Millstone Units 1, 2, and 3 and Seabrook is approximately $801 million in year end 1993 dollars. In addition, the company's estimated cost to decommission its shares of the regional nuclear units is estimated to be approximately $185 to $189 million. Decommissioning costs are recovered and recognized over the lives of the respective units. YAEC has begun decommissioning its nuclear facility. The company's estimated obligation to YAEC has been recorded on its Balance Sheets. Management expects that the company will continue to be allowed to recover these costs.
For further information regarding nuclear decommissioning, environmental matters, and other contingencies, see the "Notes to Financial Statements."
NUCLEAR PERFORMANCE
The composite capacity factor of the five nuclear generating units that the NU system operates (including the Connecticut Yankee nuclear unit) was 80.8 percent for 1993, compared with 63.7 percent in 1992 and a national average of 70.6 percent for 1993. The lower 1992 capacity factor was primarily the result of the 1992 Millstone 2 steam generator replacement outage and some unexpected technical and operating difficulties.
In 1993, NU was informed by the Nuclear Regulatory Commission (NRC) of three apparent violations related to the circumstances surrounding the repair of a leaking valve in the reactor coolant system at the Millstone 2 nuclear power station. Millstone 2 was shutdown on August 5, 1993, when extensive repair efforts proved unsuccessful and the valve began to leak at a level beyond operating requirements. NU was assessed and paid a civil penalty of $237,500 for the three violations that were identified during the NRC investigation.
NU has initiated a number of immediate and long-term actions designed to further enhance the safe operation of all the NU nuclear plants. In an effort to improve nuclear performance, NU management announced a reorganization of its Connecticut-based nuclear organization in November 1993. The reorganization, which is based on an overview of NU's future nuclear operational needs, resulted in a number of personnel changes, including the appointment of a new senior vice president of Millstone Station, realignment of engineering operations along unit lines and management consolidation. In addition, centralization of the nuclear engineering function at the generating stations is expected to occur during the summer of 1994. No material expense will be incurred by the company in connection with the reorganization.
LIQUIDITY AND CAPITAL RESOURCES
Cash provided from operations increased $136.5 million in 1993, compared with the same period in 1992, primarily due to increased revenues in 1993 from the rate increase and for the recovery of replacement power costs under the GUAC.
Cash used for financing activities was $219.9 million higher in 1993,
compared with the same period in 1992, primarily due to a net decrease in
short-term debt, long-term debt, and preferred stock. Cash used for
investments was $66.2 million lower in 1993, compared with the same period in
1992, primarily due to lower construction expenditures in 1993.
The company has been able to shift its financing focus to
refinancing
outstanding high-cost securities. Internally generated cash has generally
been, and is projected to continue to be, more than sufficient to cover
construction costs. The forecast through 1998 shows additional new
financings only in years with a large amount of securities maturing. CL&P
may issue up to $200 million in 1994 to finance maturing debt. The company
is obligated to meet $581 million of long-term debt and preferred stock
maturities and cash sinking-fund requirements for the 1994 through 1998
period, including $189 million for 1994. Also, $125 million of First
Mortgage Bonds outstanding at December 31, 1993 has been called in December
1993 for redemption in 1994.
Aggressive refinancing of its outstanding high-cost securities has enabled the company to lower its cost of debt. There was no new money financing in 1993. To take advantage of favorable market conditions during
1993, the company refinanced $425 million of First Mortgage Bonds, $110 million of preferred stock and $135.5 million of pollution control bonds, in addition to restructuring the company's various credit lines. It is estimated that the 1993 refinancings and restructuring will save the company approximately $15 million per year. The company intends, if market conditions permit, to continue to refinance a portion of its outstanding long-term debt and preferred stock at lower effective cost.
On February 17, 1994, CL&P issued two new First Mortgage Bonds, the $140 million 1994 Series A and the $140 million 1994 Series B Bonds, at annual rates of 5.50 percent and 6.125 percent, respectively. The Series A Bond will mature on February 1, 1999, and the Series B Bond will mature on February 1, 2004. Proceeds from these issues, together with proceeds from short-term debt, will be used to redeem $310 million of outstanding bonds with interest rates ranging from 5.625 percent to 7.625 percent. Savings from the refinancings are estimated to be approximately $4.5 million per year in reduced interest rates.
The company's construction program expenditures, including allowance for funds used during construction (AFUDC), for the period 1994 through 1998 are estimated to be approximately $742 million, including $158 million for 1994. The construction program's main focus is maintaining and upgrading the existing transmission and distribution system as well as the nuclear and fossil-generating facilities. The company does not foresee the need for new major generating facilities, at least until the year 2007.
CL&P and WMECO utilize a nuclear fuel trust to finance nuclear fuel requirements for Millstone 1, 2, and 3. Nuclear fuel requirements, including nuclear fuel financed through the trust, are estimated to be approximately $318 million for the period 1994 through 1998, including $75 million for 1994.
RESULTS OF OPERATIONS
Change in Operating Revenues
Increase/(Decrease)
- ----------------------------------------------------------------- ------
1993 vs. 1992 1992 vs. 1991
- ----------------------------------------------------------------- ------
(Millions of Dollars)
Regulatory decisions $34.2 $72.7
Fuel and purchased power
cost recoveries 1.9 20.0
Sales volume 3.0 5.4
Other revenues 10.5 (57.4)
----- ------
Total revenue change $49.6 $40.7
===== =====
|
OPERATING REVENUES
The components of the change in operating revenues for the past two years are provided in the table above.
Operating revenues increased $49.6 million from 1992 to 1993. Revenues related to regulatory decisions increased in 1993, primarily because of the effects of the June 1993 DPUC retail rate increase and higher revenues under the CAM. Retail sales were essentially flat in 1993. Other revenues increased primarily because of higher 1993 capacity interchange sales.
Operating revenues increased $40.7 million from 1991 to 1992. Revenues related to regulatory decisions increased in 1992 primarily because of the effect of the August 1991 DPUC retail rate increase. Fuel and purchased- power cost recoveries increased primarily due to the timing in the recovery of fuel expenses under the provisions of CL&P's fuel adjustment clauses. Retail sales in 1992 were slightly higher than 1991. Other revenues decreased primarily because of 1992 capacity sales to other utilities that took place at lower prices per kilowatt-hour and the 1991 one-time reimbursement of costs associated with the reactivation of fossil-generating units.
FUEL, PURCHASED, AND NET INTERCHANGE POWER
Fuel, purchased, and net interchange power increased $58.8 million in 1993, as compared to 1992, primarily due to the timing in the recovery of fuel expenses under the provisions of the company's fuel adjustment clauses and disallowances of replacement power costs deferred under the GUAC, partially offset by lower outside purchases due to better nuclear performance in 1993.
Fuel, purchased, and net interchange power increased $39.2 million in 1992, as compared to 1991, primarily due to the timing in the recovery of fuel expenses under the provisions of the company's fuel adjustment clauses, and previously deferred replacement power costs that are not recoverable as a result of regulatory reviews.
OTHER OPERATION AND MAINTENANCE EXPENSES
Other operation and maintenance expenses increased $18.7 million in 1993, as compared to 1992, primarily due to the one-time costs in 1993 associated with the employee reduction program and 1993 SFAS No. 106 postretirement benefit costs prior to the DPUC order allowing the deferral of these costs, partially offset by lower 1993 costs associated with the operation and maintenance activities of the nuclear units.
Other operation and maintenance expenses increased $4.0 million in 1992, as compared to 1991, primarily due to higher 1992 costs of operation and maintenance activities at nuclear units, partially offset by the 1991 costs associated with a voluntary early retirement program, and lower 1992 conservation expenses.
DEPRECIATION EXPENSES
Depreciation expenses increased $9.9 million in 1993, as compared to 1992, and $11.3 million in 1992, as compared to 1991, primarily as a result of higher depreciation rates, higher depreciable plant balances, and higher decommissioning levels in 1992 as compared to 1991.
AMORTIZATION OF REGULATORY ASSETS, NET
Amortization of regulatory assets, net increased $38.9 million in 1993, as compared to 1992, and $17.8 million in 1992, as compared to 1991, primarily because of higher amortization of Millstone 3 and Seabrook deferred costs. The increase in 1993 is also attributable to the gross-up of taxes due to SFAS No. 109, and the amortization in 1993 of costs paid by CL&P to the developers of two wood-to-energy plants as allowed in the recent rate decision. CL&P was allowed to collect and amortize $17.9 million of previously deferred costs over the one-year period beginning July 1993.
FEDERAL AND STATE INCOME TAXES
Federal and State income taxes, net decreased $21.4 million in 1993, as compared to 1992, primarily because of lower book taxable income and higher investment tax credit amortization, partially offset by an increase in flow- through depreciation.
TAXES OTHER THAN INCOME TAXES
Taxes other than income taxes increased $5.4 million in 1992, as compared to 1991, primarily due to higher property taxes and higher Connecticut gross earnings taxes due to higher revenues.
DEFERRED NUCLEAR PLANTS RETURN
Deferred nuclear plants return decreased $10.8 million in 1993, as compared to 1992, and $6.3 million in 1992, as compared to 1991, primarily because of a decrease in Millstone 3 deferred return because additional Millstone 3 investment was phased into rates.
OTHER INCOME, NET
Other income, net decreased $8.0 million in 1993, as compared to 1992, primarily because of the allocation to customers of a portion of the property tax accounting change as ordered by the DPUC in the rate decision and lower AFUDC.
INTEREST CHARGES
Interest on long-term debt increased $17.1 million in 1993, as compared to 1992 and $14.9 million in 1992, compared to 1991, primarily because of lower average interest rates as a result of the substantial refinancing activity.
Other interest charges increased $5.4 million in 1993, as compared to 1992, primarily because of higher interest on short-term borrowings, lower AFUDC for borrowed funds and interest recognized for a potential Connecticut sales tax assessment.
THE CONNECTICUT LIGHT AND POWER COMPANY
- -----------------------------------------------------------------------------
- -----------------------
Years Ended December 31, 1993 1992 1991
1990 1989
- -----------------------------------------------------------------------------
- -----------------------
(Thousands of Dollars)
Continuing Operations:
Operating Revenues. . . . . . $2,366,050 $2,316,451 $2,275,737
$2,170,087 $2,069,559
Operating Income. . . . . . . 240,095 287,811 323,835
320,641 327,220
Net Income. . . . . . . . . . 191,449 206,714 240,818
224,783 207,875
Discontinued Gas
Operations:
Operating Revenues . . . . . - - -
- 124,229
Operating Income . . . . . . - - -
- 12,563
Net Income . . . . . . . . . - - -
- 6,630
Cash Dividends on
Common Stock. . . . . . . . . 160,365 164,277 172,587
179,921 155,972
Total Assets . . . . . . . . . 6,397,380 5,582,806 5,338,441
5,176,784 5,148,120
Long-Term Debt*. . . . . . . . 2,057,280 2,087,936 2,023,268
2,101,334 2,147,892
Preferred Stock Not
Subject to Mandatory
Redemption. . . . . . . . . . 166,200 231,196 306,195
306,195 306,195
Preferred Stock
Subject to Mandatory
Redemption* . . . . . . . . . 230,000 200,000 141,892
146,892 151,892
Obligations Under
Capital Leases* . . . . . . . 177,418 197,404 208,924
233,919 252,652
*Includes portions due within one year.
|
Quarter Ended
- -----------------------------------------------------------------------------
- -----------------------
1993 March 31 June 30 September
30 December 31
- -----------------------------------------------------------------------------
- -----------------------
(Thousands of Dollars)
Operating Revenues. . . . . . . $627,134 $559,894 $604,343
$574,679
======== ======== ========
========
Operating Income. . . . . . . . $ 67,201 $ 47,775 $58,321
$ 66,798
======== ======== ========
========
Net Income. . . . . . . . . . . $ 91,596 $ 13,775 $39,068
$ 47,010
======== ======== ========
========
1992
- -----------------------------------------------------------------------------
- -----------------------
Operating Revenues. . . . . . . $633,933 $547,010 $554,635
$580,873
======== ======== ========
========
Operating Income. . . . . . . . $ 90,840 $ 58,892 $75,438
$ 62,641
======== ======== ========
========
Net Income. . . . . . . . . . . $ 68,042 $ 40,615 $55,145
$ 42,912
======== ======== ========
========
|
THE CONNECTICUT LIGHT AND POWER COMPANY
- -----------------------------------------------------------------------------
- -----------------------
STATISTICS
- -----------------------------------------------------------------------------
- -----------------------
Gross Electric Average
Utility Plant Annual
December 31, Use Per Electric
(Thousands of kWh Sales Residential Customers
Employees
Dollars) (Millions) Customer (kWh) (Average)
(December 31,)
- -----------------------------------------------------------------------------
- -----------------------
1993 $6,214,399 26,107 8,519 1,078,925
2,676
1992 6,100,680 25,809 8,501 1,075,425
3,028
1991 5,986,269 24,992 8,435 1,069,912
3,364
1990 5,881,499 25,039 8,434 1,064,695
3,517
1989 5,732,850 25,078 8,570 1,054,055
3,556
|
The Connecticut Light and Power Company
1994 Dividend Payment Dates 5.28%, 5.30%, 9.00%, $3.24 Series - January 1, April 1, July 1, and October 1 4.50% (1956), 4.96%, 6.56% $1.90, $2.00, $2.04, $2.06, $2.09, and $2.20 Series - February 1, May 1, August 1, and November 1
3.90%, 4.50% (1963), 7.23% Series - January 12, March 1, June 1, September 1, and December 1
DARTS*
January 12, March 2, April 20, June 8, July 27, September 14, November 2, December 21
Address General Correspondence in Care of:
Northeast Utilities Service Company
Investor Relations Department
P.O. Box 270
Hartford, Connecticut 06141-0270
Tel. (203) 665-5000
*Transfer and Paying Agent:
Bankers Trust Company, Corporate Trust and Agency Group P.O. Box 318, Church Street Station, New York, New York 10015
The data contained in this Annual Report is submitted for the sole purpose of providing information to present stockholders about the Company.
Exhibit 13.3
1993
ANNUAL REPORT
WESTERN MASSACHUSETTS ELECTRIC COMPANY
1993 Annual Report
Western Massachusetts Electric Company
Index
Contents Page - -------- ---- Balance Sheets . . . . . . . . . . . . . . . . . . . . 1-2 Statements of Income . . . . . . . . . . . . . . . . . 3 Statements of Cash Flows . . . . . . . . . . . . . . . 4 Statements of Common Stockholder's Equity. . . . . . . 5 Notes to Financial Statements. . . . . . . . . . . . . 6-25 Report of Independent Public Accountants . . . . . . . 26 Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . 27-32 Selected Financial Data. . . . . . . . . . . . . . . . 33 Statements of Quarterly Financial Data . . . . . . . . 33 Statistics . . . . . . . . . . . . . . . . . . . . . . 34 Preferred Stockholder and Bondholder Information . . . Back Cover |
WESTERN MASSACHUSETTS ELECTRIC COMPANY
BALANCE SHEETS
At December 31, 1993 1992
- ------------------------------------------------------------------------------
(Thousands of Dollars)
ASSETS
- ------
Utility Plant, at original cost:
Electric......................................... $1,183,410 $1,158,160
Less: Accumulated provision for depreciation.. 395,190 364,702
----------- -----------
788,220 793,458
Construction work in progress.................... 23,790 18,522
Nuclear fuel, net................................ 35,727 37,704
----------- -----------
Total net utility plant...................... 847,737 849,684
----------- -----------
Other Property and Investments:
Nuclear decommissioning trusts, at cost.......... 49,155 41,986
Investments in regional nuclear generating
companies, at equity............................ 14,633 14,567
Other, at cost................................... 3,840 3,842
----------- -----------
67,628 60,395
----------- -----------
Current Assets:
Cash and special deposits........................ 185 165
Receivables, less accumulated provision for
uncollectible accounts of $1,997,000 in 1993
and $2,117,000 in 1992......................... 36,437 36,587
Receivables from affiliated companies............ 4,972 2,829
Accrued utility revenues......................... 17,362 15,627
Fuel, materials, and supplies, at average cost... 7,057 9,001
Prepayments and other............................ 9,613 7,572
----------- -----------
75,626 71,781
----------- -----------
Deferred Charges:
Regulatory asset--income taxes <F2>(Note 1)...... 94,414 -
Amortizable property investment--Millstone 3..... 28,001 39,201
Deferred costs--Millstone 3 <F2>(Note 1)......... 22,667 30,497
Unrecovered contract obligation--YAEC <F>(Note 3) 24,150 28,160
Deferred DOE assessment <F2>(Note 1)............. 8,908 9,630
Unamortized debt expense......................... 1,842 2,141
Other............................................ 33,669 39,195
----------- -----------
213,651 148,824
----------- -----------
Total Assets................................. $1,204,642 $1,130,684
=========== ===========
|
The accompanying notes are an integral part of these financial statements.
WESTERN MASSACHUSETTS ELECTRIC COMPANY
BALANCE SHEETS
At December 31, 1993 1992
- --------------------------------------------------------------------------------
(Thousands of Dollars)
CAPITALIZATION AND LIABILITIES
- ------------------------------
Capitalization:
Common stock,$25 par value--authorized and
outstanding 1,072,471 shares in 1993 and 1992... $ 26,812 $ 26,812
Capital surplus, paid in........................... 149,319 149,026
Retained earnings.................................. 97,627 91,077
----------- -----------
Total common stockholder's equity............ 273,758 266,915
Cumulative preferred stock--
$100 par value--authorized 1,000,000 shares;
outstanding 200,000 shares in 1993 and 1992;
$25 par value--authorized 3,600,000 shares;
outstanding 3,220,000 shares in 1993
3,280,000 shares in 1992
Not subject to mandatory redemption <F6>(Note 5) 73,500 73,500
Subject to mandatory redemption <F7>(Note 6).. 25,500 27,000
Long-term debt <F8>(Note 7)........................ 393,232 392,824
----------- -----------
Total capitalization...................... 765,990 760,239
----------- -----------
Obligations Under Capital Leases..................... 24,014 27,425
----------- -----------
Current Liabilities:
Notes payable to banks............................. 6,000 18,000
Commercial paper................................... - 23,500
Long-term debt and preferred stock--current
portion......................................... 1,500 1,652
Obligations under capital leases--current
portion......................................... 12,888 14,084
Accounts payable................................... 17,493 16,038
Accounts payable to affiliated companies........... 12,016 15,549
Accrued taxes...................................... 7,022 10,270
Accrued interest................................... 6,478 5,798
Refundable energy costs............................ 8,676 2,082
Other.............................................. 11,727 7,042
----------- -----------
83,800 114,015
----------- -----------
Deferred Credits:
Accumulated deferred income taxes <F2>(Note 1)..... 253,547 144,865
Accumulated deferred investment tax credits........ 36,083 37,512
Deferred contract obligation--YAEC <F4>(Note 3).... 24,150 28,160
Deferred DOE obligation <F2>(Note 1)............... 7,268 9,630
Other.............................................. 9,790 8,838
----------- -----------
330,838 229,005
----------- -----------
Commitments and Contingencies <F12>(Note 11)
Total Capitalization and Liabilities...... $1,204,642 $1,130,684
=========== ===========
|
The accompanying notes are an integral part of these financial statements.
WESTERN MASSACHUSETTS ELECTRIC COMPANY
STATEMENTS OF INCOME
For the Years Ended December 31, 1993 1992 1991
- -----------------------------------------------------------------------------
- -----
(Thousands of Dollars)
Operating Revenues................................ $415,055 $410,720 $409,840
--------- ---------
- ---------
Operating Expenses:
Operation--
Fuel, purchased and net interchange
power...................................... 67,781 86,356 99,717
Other......................................... 142,273 126,060 114,231
Maintenance..................................... 34,259 39,303 36,795
Depreciation.................................... 35,751 34,257 35,636
Amortization of regulatory assets............... 29,700 26,321 24,950
Federal and state income taxes
<F9>(Note 8).................................. 28,173 20,926 22,856
Taxes other than income taxes................... 17,051 16,984 15,932
--------- ---------
- ---------
Total operating expenses..................... 354,988 350,207 350,117
--------- ---------
- ---------
Operating Income.................................. 60,067 60,513 59,723
--------- ---------
- ---------
Other Income:
Deferred Millstone 3 return--other
funds........................................ 1,439 2,119 2,763
Equity in earnings of regional
nuclear generating companies.................. 1,680 2,170 2,181
Other, net...................................... 2,966 2,628 1,895
Income taxes--credit............................ 304 810 1,969
--------- ---------
- ---------
Other income, net............................ 6,389 7,727 8,808
--------- ---------
- ---------
Income before interest charges............... 66,456 68,240 68,531
--------- ---------
- ---------
Interest Charges:
Interest on long-term debt...................... 29,979 31,694 33,557
Other interest.................................. 881 469 1,544
Deferred Millstone 3 return--
borrowed funds <F2>(Note 1)................... (1,076) (945)
(1,207)
--------- ---------
- ---------
Interest charges, net........................ 29,784 31,218 33,894
--------- ---------
- ---------
Income before cumulative effect of
accounting change............................... 36,672 37,022 34,637
Cumulative effect of accounting change <F2>(Note 1) 3,922 - -
--------- ---------
- ---------
Net Income........................................ $ 40,594 $ 37,022 $ 34,637
========= =========
=========
|
The accompanying notes are an integral part of these financial statements.
WESTERN MASSACHUSETTS ELECTRIC COMPANY
STATEMENTS OF CASH FLOWS
---------
- --------- ---------
For the Years Ended December 31, 1993 1992
1991
---------
- --------- ---------
(Thousands
of Dollars)
Cash Flows From Operations:
Net Income .............................................. $ 40,594 $
37,022 $ 34,637
Adjusted for the following:
Depreciation............................................ 38,296
36,735 36,984
Deferred income taxes and investment tax credits, net... 918
(785) 3,767
Deferred return - Millstone 3, net of amortization...... 12,252
9,110 8,216
Deferred energy costs, net of amortization.............. 6,594
12,629 (8,418)
Other sources of cash................................... 27,745
24,113 18,977
Other uses of cash...................................... (5,142)
(10,814) (9,662)
Changes in working capital:
Receivables and accrued utility revenues............... (3,728)
12,288 (7,216)
Fuel, materials, and supplies.......................... 1,944
490 3,870
Accounts payable....................................... (2,078)
(5,355) 6,262
Accrued taxes.......................................... (3,248)
(295) 344
Other working capital (excludes cash).................. 2,433
1,932 4,971
---------
- --------- ---------
Net Cash Flows From Operations............................. 116,580
117,070 92,732
---------
- --------- ---------
Cash Flows Used For Financing Activities:
Long-term debt........................................... 113,800
85,000 -
Financing expenses....................................... (359)
(470) -
Net increase (decrease) in short-term debt............... (35,500)
(3,250) 7,750
Reacquisitions and retirements of long-term debt
and preferred stock.................................... (115,770)
(109,169) (21,650)
Cash dividends on preferred stock........................ (5,259)
(7,485) (8,048)
Cash dividends on common stock........................... (28,785)
(29,536) (31,499)
---------
- --------- ---------
Net cash flows used for financing activities............... (71,873)
(64,910) (53,447)
---------
- --------- ---------
Investment Activities:
Investment in plant (including capital leases):
Electric utility plant................................. (34,592)
(46,061) (32,775)
Nuclear fuel........................................... (2,926)
1,003 (570)
---------
- --------- ---------
Net cash flows used for investments in plant........... (37,518)
(45,058) (33,345)
Other investment activities, net....................... (7,169)
(7,101) (5,917)
---------
- --------- ---------
Net cash flows used for investments........................ (44,687)
(52,159) (39,262)
---------
- --------- ---------
Net Increase In Cash for the Period........................ 20
1 23
Cash and special deposits - beginning of period............ 165
164 141
---------
- --------- ---------
Cash and special deposits - end of period.................. $ 185 $
165 $ 164
=========
========== =========
Supplemental Cash Flow Information:
Cash paid (received) during the year for:
Interest, net of amounts capitalized during
construction............................................. $ 27,277 $
30,758 $ 32,616
=========
========= =========
Income taxes............................................. $ 21,200 $
17,711 $ 22,047
=========
========= =========
Increase in obligations:
Niantic Bay Fuel Trust................................... $ 9,369 $
7,224 $ 3,443
=========
========= =========
|
The accompanying notes are an integral part of these financial statements.
WESTERN MASSACHUSETTS ELECTRIC COMPANY
STATEMENTS OF COMMON STOCKHOLDER'S EQUITY
- -----------------------------------------------------------------------------
- ----------
Capital Retained
Common Surplus, Earnings
Stock Paid In <F1>(a)
Total
- -----------------------------------------------------------------------------
- ----------
(Thousands of Dollars)
Balance at January 1, 1991............... $26,812 $148,401 $ 96,618
$271,831
Net income for 1991.................. 34,637
34,637
Cash dividends on preferred
stock.............................. (8,048)
(8,048)
Cash dividends on common stock....... (31,499)
(31,499)
Capital stock expenses, net.......... 295
295
-------- --------- ---------
- ---------
Balance at December 31, 1991............. 26,812 148,696 91,708
267,216
Net income for 1992.................. 37,022
37,022
Cash dividends on preferred
stock.............................. (7,485)
(7,485)
Cash dividends on common stock....... (29,536)
(29,536)
Loss on the retirement of preferred
stock.............................. (632)
(632)
Capital stock expenses, net.......... 330
330
-------- --------- ---------
- ---------
Balance at December 31, 1992............. 26,812 149,026 91,077
266,915
Net income for 1993.................. 40,594
40,594
Cash dividends on preferred
stock.............................. (5,259)
(5,259)
Cash dividends on common stock....... (28,785)
(28,785)
Capital stock expenses, net.......... 293
293
-------- --------- ---------
- ---------
Balance at December 31, 1993............. $26,812 $149,319 $ 97,627
$273,758
======== ========= =========
=========
|
[FN]
<F1> (a) The company has dividend restrictions imposed by its long-term debt
agreements.
At December 31, 1993, these restrictions totaled approximately $71.1
million.
The accompanying notes are an integral part of these financial statements.
WESTERN MASSACHUSETTS ELECTRIC COMPANY
GENERAL
Western Massachusetts Electric Company (WMECO or the company), The Connecticut
Light and Power Company (CL&P), Holyoke Water Power Company (HWP), Public
Service Company of New Hampshire (PSNH), and North Atlantic Energy Corporation
(NAEC) are the operating subsidiaries comprising the Northeast Utilities system
(the system) and are wholly owned by Northeast Utilities (NU).
Other wholly owned subsidiaries of NU provide substantial support services to the system. Northeast Utilities Service Company (NUSCO) supplies centralized accounting, administrative, data processing, engineering, financial, legal, operational, planning, purchasing, and other services to the system companies. Northeast Nuclear Energy Company (NNECO) acts as agent for system companies in operating the Millstone nuclear generating facilities.
All transactions among affiliated companies are on a recovery of cost basis which may include amounts representing a return on equity, and are subject to approval by various federal and state regulatory agencies.
ACCOUNTING CHANGES
Property Taxes: WMECO adopted a one-time change in the method of
accounting for municipal property tax expense for their Connecticut properties.
Most municipalities in Connecticut assess property values as of October 1.
Prior to January 1, 1993, the company accrued Connecticut property tax expense
over the period October 1 through September 30 based on the lien-date method.
During the first quarter of 1993, these subsidiaries changed their method of
accounting for Connecticut municipal property taxes to recognize the expense
from July 1 through June 30, to match the payment and services provided by the
municipalities. This one-time change increased net income by approximately $3.9
million for WMECO in 1993.
Income Taxes: The company adopted the provisions of Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes (SFAS 109), effective January 1, 1993. For information on this change, see <F2> Note 1, "Summary of Significant Accounting Policies - Income Taxes."
Postretirement Benefits Other Than Pensions: The company has adopted the provisions of Statement of Financial Accounting Standards No. 106, Employer's Accounting for Postretirement Benefits Other Than Pensions (SFAS 106), effective January 1, 1993. For information on this change, see <F11> Note 10, "Postretirement Benefits Other Than Pensions."
ACCOUNTING RECLASSIFICATIONS
Certain amounts in the accompanying financial statements of WMECO for the years
ended December 31, 1992 and 1991 have been reclassified to conform with the
December 31, 1993 presentation.
PUBLIC UTILITY REGULATION
NU is registered with the Securities and Exchange Commission (SEC) as a holding
company under the Public Utility Holding Company Act of 1935 (1935 Act), and it
and its subsidiaries, including the company, are subject to the provisions of
the 1935 Act. Arrangements among the system companies, outside agencies, and
other utilities covering interconnections, interchange of electric power, and
sales of utility property are subject to regulation by the Federal Energy
Regulatory Commission (FERC) and/or the SEC. The company is subject to further
regulation for rates and other matters by the FERC and the
Massachusetts Department of Public Utilities (DPU), and follows the accounting policies prescribed by these commissions.
REVENUES
Other than special contracts, utility revenues are based on authorized rates
applied to each customer's use of electricity. Rates can be changed only
through a formal proceeding before the appropriate regulatory commission. At
the end of each accounting period, WMECO accrues an estimate for the amount of
energy delivered but unbilled.
SPENT NUCLEAR FUEL DISPOSAL COSTS
Under the Nuclear Waste Policy Act of 1982, WMECO must pay the United States
Department of Energy (DOE) for the disposal of spent nuclear fuel and high-level
radioactive waste. Fees for nuclear fuel burned on or after April 7, 1983 are
billed currently to customers and paid to the DOE on a quarterly basis. For
nuclear fuel used to generate electricity prior to April 7, 1983 (prior-period
fuel), payment may be made anytime prior to the first delivery of spent fuel to
the DOE. At December 31, 1993, fees due to the DOE for the disposal of
prior-period fuel were approximately $31.9 million, including interest costs of
$16.3 million. As of December 31, 1993, approximately $32.3 million had been
collected through rates.
Under the Energy Policy Act of 1992 (Energy Act), WMECO is assessed for its proportionate share of the costs of decontaminating and decommissioning uranium enrichment plants operated by the DOE (D&D assessment). The Energy Act imposes an overall cap of $2.25 billion on the obligation of the commercial power industry and limits the annual special assessment to $150 million each year over a 15-year period beginning in 1993. The Energy Act also requires that regulators treat D&D assessments as a reasonable and necessary cost of fuel, to be fully recovered in rates, like any other fuel cost. The cap and annual recovery amounts will be adjusted annually for inflation. The D&D assessment is allocated among utilities based upon services purchased in prior years. At December 31, 1993, WMECO's remaining share of these costs is estimated to be approximately $8.9 million. WMECO has begun to recover these costs. Accordingly, WMECO has recognized these costs as a regulatory asset, with a corresponding obligation, on its Balance Sheets.
INVESTMENTS AND JOINTLY OWNED ELECTRIC UTILITY PLANT
Regional Nuclear Generating Companies: WMECO owns common stock of four regional
nuclear generating companies (Yankee companies). The Yankee companies, with the
company's ownership interests, are:
Connecticut Yankee Atomic Power Company (CY) . . . . 9.5% Yankee Atomic Electric Company (YAEC). . . . . . . . 7.0 Maine Yankee Atomic Power Company (MY) . . . . . . . 3.0 Vermont Yankee Nuclear Power Corporation (VY). . . . 2.5 |
WMECO's investments in the Yankee companies are accounted for on the equity basis. The electricity produced by these facilities is committed to the participants substantially on the basis of their ownership interests and is billed pursuant to contractual agreements. For more information on these agreements, see <F12> Note 11, "Commitments and Contingencies - Purchased Power Arrangements."
The 173-megawatt (MW) YAEC nuclear power plant was shut down permanently on February 26, 1992. For more information on the Yankee companies, see <F4> Note 3, "Nuclear Decommissioning."
Millstone 1: WMECO has a 19 percent joint-ownership interest in Millstone 1, a 660-MW nuclear generating unit. As of December 31, 1993, plant-in-service and the accumulated provision for depreciation included approximately $77.6 million and $30.5 million, respectively, for WMECO's share of Millstone 1. WMECO's share of Millstone 1 operating expenses is included in the corresponding operating expenses on the accompanying Statements Of Income.
Millstone 2: WMECO has a 19 percent joint-ownership interest in Millstone 2, an 875-MW nuclear generating unit. As of December 31, 1993, plant-in-service and the accumulated provision for depreciation included approximately $158.1 million and $34.8 million, respectively, for WMECO's share of Millstone 2. WMECO's share of Millstone 2 operating expenses is included in the corresponding operating expenses on the accompanying Statements Of Income.
Millstone 3: WMECO has a 12.24 percent joint-ownership interest in Millstone 3, an 1,149-MW nuclear generating unit. As of December 31, 1993, plant-in-service and the accumulated provision for depreciation included approximately $375.5 million and $72.9 million, respectively, for WMECO's proportionate share of Millstone 3. WMECO's share of Millstone 3 expenses is included in the corresponding operating expenses on the accompanying Statements Of Income.
DEPRECIATION
The provision for depreciation is calculated using the straight-line method
based on estimated remaining lives of depreciable utility plant-in-service,
adjusted for salvage value and removal costs, as approved by the appropriate
regulatory agency. Except for major facilities, depreciation factors are
applied to the average plant-in-service during the period. Major facilities are
depreciated from the time they are placed in service. When plant is retired
from service, the original cost of plant, including costs of removal, less
salvage, is charged to the accumulated provision for depreciation. For nuclear
production plants, the costs of removal, less salvage, that have been funded
through external decommissioning trusts will be paid with funds from the trusts
and will be charged to the accumulated reserve for decommissioning included in
the accumulated provision for depreciation over the expected service life of the
plants. See <F4> Note 3, "Nuclear Decommissioning," for additional information.
The depreciation rates for the several classes of electric plant-in-service are equivalent to a composite rate of 3.1 percent in 1993, 3.0 percent in 1992, and 3.3 percent in 1991.
INCOME TAXES
The tax effect of temporary differences (differences between the periods in
which transactions affect income in the financial statements and the
periods in which they affect the determination of income subject to tax) is
accounted for in accordance with the ratemaking treatment of the applicable
regulatory commissions. See <F9> Note 8, "Income Tax Expense," for the
components of income tax expense.
In 1992, the Financial Accounting Standards Board (FASB) issued SFAS 109. SFAS 109 supersedes previously issued income tax accounting standards. WMECO adopted SFAS 109, on a prospective basis, during the first quarter of 1993. At December 31, 1993, the deferred tax obligation relating to the adoption of SFAS 109 approximated $94 million. As it is probable that the increase in deferred tax liabilities will be recovered from customers through rates, WMECO also established a regulatory asset. SFAS 109 does not permit net-of-tax accounting.
Accordingly, the company no longer utilizes net-of-tax
accounting for the deferred nuclear plants return-borrowed funds and allowance for funds used during construction (AFUDC) - borrowed funds.
The temporary differences which give rise to the accumulated deferred tax obligation at December 31, 1993 are as follows:
(Thousands of Dollars)
Accelerated depreciation and other
plant-related differences . . . . . . . . . $205,030
The tax effect of net regulatory assets. . . 37,258
Other. . . . . . . . . . . . . . . . . . . . 11,259
--------
$253,547
========
|
ENERGY ADJUSTMENT CLAUSE
In Massachusetts, all retail fuel costs are collected on a current basis by
means of a separate fuel-charge billing rate. As permitted by the DPU,
WMECO defers the difference between forecasted and actual fuel cost recoveries
until it is recovered or refunded quarterly under a retail fuel adjustment
clause. Massachusetts law requires the establishment of an annual performance
program related to fuel procurement and use. The program establishes
performance standards for plants owned and operated by WMECO or plants in which
WMECO has a life-of-unit contract. Therefore, revenues collected under the
WMECO's retail fuel adjustment clause are subject to refund pending review by
the DPU. To date, there have been no significant adjustments as a result of
this program.
For additional information, see <F12> Note 11, "Commitments and Contingencies--Nuclear Performance."
PHASE-IN PLAN
As of December 31, 1991, all of WMECO's recoverable investment in Millstone 3
was in rate base. Beginning in 1986, the DPU has permitted WMECO to recover the
portion of its Millstone 3 investment representing the amount currently
determined to be "unuseful" by the DPU ($23.6 million at December 31, 1993),
over a ten-year period, without earning a return. On June 30, 1987, WMECO also
began recovering the deferred return, including carrying charges, on the
recoverable but not yet phased-in portion of its investment in Millstone 3.
This recovery is taking place over a nine-year period. As of December 31, 1993,
$65.4 million of the deferred return, including carrying charges, has been
recovered, and $22.7 million of the deferred return, including carrying charges,
remains to be recovered over the period ending June 30, 1995.
<F3>2. LEASES
WMECO and CL&P have entered into the Niantic Bay Fuel Trust (NBFT) capital lease agreement to finance up to $530 million of nuclear fuel for Millstone 1 and 2 and their share of the nuclear fuel for Millstone 3. WMECO and CL&P make quarterly lease payments for the cost of nuclear fuel consumed in the reactors (based on a units-of-production method at rates which reflect estimated kilowatt-hours
of energy provided) plus financing costs associated with the fuel in the reactors.
Upon permanent discharge from the reactors, ownership of the nuclear fuel transfers to WMECO and CL&P.
WMECO has also entered into lease agreements, some of which are capital leases, for the use of substation equipment, data processing and office equipment, vehicles, nuclear control room simulators, and office space. The provisions of these lease agreements generally provide for renewal options. The following rental payments have been charged to operating expense:
Operating Capital
Year Leases Leases
1993. . . . . . . . . . . . $17,158,000 $6,367,000
1992. . . . . . . . . . . . 13,799,000 7,263,000
1991. . . . . . . . . . . . 11,599,000 6,790,000
|
Interest included in capital lease rental payments was $2,090,000 in 1993, $2,895,000 in 1992, and $3,434,000 in 1991.
Substantially all of the capital lease rental payments were made pursuant to the nuclear fuel lease agreement. Future minimum lease payments under the nuclear fuel capital lease cannot be reasonably estimated on an annual basis due to variations in the usage of nuclear fuel.
Future minimum rental payments, excluding annual nuclear fuel lease payments and executory costs, such as property taxes, state use taxes, insurance, and maintenance, under long-term noncancelable leases, as of December 31, 1993, are approximately:
Capital Operating
Year Leases Leases
---- ------- ---------
(Thousands of Dollars)
1994. . . . . . . . . . . . $ 40 $4,900
1995. . . . . . . . . . . . 40 4,600
1996. . . . . . . . . . . . 40 4,200
1997. . . . . . . . . . . . 40 4,100
1998. . . . . . . . . . . . 40 3,100
After 1998. . . . . . . . . 220 36,300
------- -------
Future minimum lease
payments . . . . . . . . . 420 $57,200
=======
Less amount of representing
interest . . . . . . . . . 120
-------
Present value of future
minimum lease payments
for other than nuclear
fuel . . . . . . . . . . . 300
Present value of future
nuclear fuel lease
payments . . . . . . . . . 36,600
-------
Total. . . . . . $36,900
=======
<F4>3. NUCLEAR DECOMMISSIONING
|
The company's 1992 decommissioning study concluded that complete and immediate dismantlement at retirement continues to be the most viable and economic method of decommissioning the three Millstone units. Decommissioning studies are reviewed and updated periodically to reflect changes in decommissioning requirements, technology, and inflation.
The estimated cost of decommissioning WMECO's ownership share of Millstone 1, 2, and 3, in year-end 1993 dollars, is $73.3 million, $58.9 million, and $51.6 million, respectively. Nuclear decommissioning costs are accrued over the expected service life of the units and are included in depreciation expense on the Statements Of Income. Nuclear decommissioning costs amounted to $4.6 million in 1993, 1992, and 1991. Nuclear decommissioning, as a cost of removal, is included in the accumulated provision for depreciation on the Balance Sheets.
WMECO has established independent decommissioning trusts for its portion of the costs of decommissioning Millstone 1, 2, and 3. As of December 31, 1993, WMECO has collected, through rates, $37.6 million toward the future decommissioning costs of its share of the Millstone units, all of which has been transferred to external decommissioning trusts. Earnings on the decommissioning trusts and financing fund increase the decommissioning trust balance and the accumulated reserve for decommissioning. At December 31, 1993, the balance in the accumulated reserve for decommissioning amounted to $49.2 million.
Changes in requirements or technology, or adoption of a decommissioning method other than immediate dismantlement, could change decommissioning cost estimates.
WMECO attempts to recover sufficient amounts through allowed rates to cover their expected decommissioning costs. Only the portion of currently estimated total decommissioning costs that has been accepted by regulatory agencies is reflected in rates of the company. Although allowances for decommissioning have increased significantly in recent years, ratepayers in future years will need to increase their payments to offset the effects of any insufficient rate recoveries in previous years.
WMECO, along with other New England utilities, has equity investments in the four Yankee companies. Each Yankee company owns a single nuclear generating unit. The estimated costs, in year-end 1993 dollars, of decommissioning WMECO's ownership share of CY and MY are $32.3 million, and $9.7 million, respectively. The cost to decommission VY is currently being reestimated. The cost of decommissioning WMECO's ownership share of VY is projected to range from $7.5 million to $8.75 million. As discussed in the following paragraph, YAEC's owners voted to permanently shut down the YAEC unit on February 26, 1992. Under the terms of the contracts with the Yankee companies, the shareholders-sponsors are responsible for their proportionate share of the operating costs of each unit, including decommissioning. The nuclear decommissioning costs of the Yankee companies are included as part of the cost of power by WMECO.
YAEC has begun decommissioning its nuclear facility. On June 1, 1992, YAEC filed a rate filing to obtain FERC authorization to collect the closing and decommissioning costs and to recover the remaining investment in the YAEC nuclear power plant over the remaining period of the plant's Nuclear Regulatory Commission operating license. The bulk of these costs has been agreed to by the YAEC joint owners and approved, as a settlement, by FERC. At December 31, 1993, the estimated remaining costs amounted to $345.0 million, of which WMECO's share was approximately $24.1 million. Management expects that WMECO will continue to be allowed to recover such FERC-approved costs from its customers. Accordingly, WMECO has recognized these costs as a regulatory asset, with a corresponding obligation, on its Balance Sheets. WMECO has a 7.0 percent equity investment, approximating $1.7 million, in YAEC. WMECO had relied on YAEC for less than 1 percent of its capacity.
<F5>4. SHORT-TERM DEBT
The system companies have various credit lines, totaling $485 million. NU, CL&P, WMECO, HWP, NNECO, and The Rocky River Realty Company (RRR) have established a revolving-credit facility with a group of 17 banks. Under this facility, the participating companies may borrow up to an aggregate of $360 million. Individual borrowing limits are $175 million for NU, $360 million for CL&P, $75 million for WMECO, $8 million for HWP, $60 million for NNECO, and $25 million for RRR. The system companies may borrow funds on a short-term revolving basis using either fixed-rate loans or standby loans. Fixed rates are set using competitive bidding. Standby-loan rates are based upon several alternative variable rates. The system companies are obligated to pay a facility fee of .20 percent of each bank's total commitment under the three-year portion of the facility, representing 75 percent of the total facility, plus .135 percent of each bank's total commitment under the 364-day portion of the facility, representing 25 percent of the total facility. At December 31, 1993, there were $22.5 million of borrowings under the facility, of which WMECO has no outstanding borrowings.
Certain subsidiaries of NU, including WMECO, are members of the Northeast Utilities System Money Pool (Pool). The Pool provides a more efficient use of the cash resources of the system, and reduces outside short-term borrowings. NUSCO administers the Pool as agent for the member companies.
Short-term borrowing needs of the member companies are first met with available funds of other member companies, including funds borrowed by NU parent. NU parent may lend to the Pool but may not borrow. Investing and borrowing subsidiaries receive or pay interest based on the average daily Federal Funds rate. Funds may be withdrawn from or repaid to the Pool at any time without prior notice. However, borrowings based on loans from NU parent bear interest at NU parent's cost and must be repaid based upon the terms of NU's original borrowing.
Maturities of WMECO's short-term debt obligations are for periods of three months or less.
The amount of short-term borrowings that may be incurred by the company is subject to periodic approval by the SEC under the 1935 Act. In addition, the charter of WMECO contains provisions restricting the amount of short-term borrowings. Under the SEC and/or charter restrictions, as of January 1, 1993, the company was authorized to incur short-term borrowings up to a maximum of $75 million.
<F6>5. PREFERRED STOCK NOT SUBJECT TO MANDATORY REDEMPTION
Details of preferred stock not subject to mandatory redemption are:
December 31, Shares
1993 Outstanding
December 31,
Redemption December 31
- --------------------------------
Description Price 1993 1993
1992 1991
- -----------------------------------------------------------------------------
- ---------------------
(Thousands of Dollars)
9.60% Series A of 1970 . . . . . $ - - $ -
$ - $15,000
7.72% Series B of 1971 . . . . . 103.51 200,000 20,000
20,000 20,000
1988 Adjustable Rate DARTS . . . 25.00 2,140,000 53,500
53,500 53,500
-------
- ------- -------
Total preferred stock not subject
to mandatory redemption . . . . $73,500
$73,500 $88,500
=======
====== ======
All or any part of each outstanding series of preferred stock may be redeemed
by the company at any time
at established redemption prices plus accrued dividends to the date of
redemption.
|
<F7>6. PREFERRED STOCK SUBJECT TO MANDATORY REDEMPTION
Details of preferred stock subject to mandatory redemption are:
December 31, Shares
1993 Outstanding
December 31,
Redemption December 31
- --------------------------------
Description Price* 1993 1993
1992 1991
- -----------------------------------------------------------------------------
- ---------------------
(Thousands of Dollars)
7.60% Series of 1987 . . . . . . $26.14 1,080,000 $27,000
$28,500 $28,502
Less preferred stock to be
redeemed within one year,
net of reacquired stock . . . . 1,500
1,500 2
-------
- ------- -------
Total preferred stock subject to mandatory redemption $25,500
$27,000 $28,500
=======
======= =======
*Redemption price reduces in future years.
|
The minimum sinking-fund provisions of the 1987 Series subject to mandatory redemption at December 31, 1993, for the years 1994 through 1998, are $1.5 million per year. In case of default on sinking-fund payments, no payments may be made on any junior stock by way of dividends or otherwise (other than in shares of junior stock) so long as the default continues. If the company is in arrears in the payment of dividends on any outstanding shares of preferred stock, the company would be prohibited from redemption or purchase of less than
all of the preferred stock outstanding. All or part of the 7.60% Series of 1987 may be redeemed by the company at any time at an established redemption price plus accrued dividends to the date of redemption except that during the initial five-year redemption period it is subject to certain refunding limitations.
<F8>7. LONG-TERM DEBT
Details of long-term debt outstanding are:
First Mortgage Bonds:
9 1/4% Series S, due 1995 . . . . . $ - $ 59,400
9 1/4% Series U, due 1995 . . . . . 34,650 35,000
5 3/4% Series F, due 1997 . . . . . 15,000 15,000
7 3/8% Series H, due 1998 . . . . . 15,000 15,000
6 3/4% Series G, due 1998 . . . . . 10,000 10,000
7 3/4% Series J, due 2002 . . . . . 30,000 30,000
7 3/4% Series V, due 2002 . . . . . 85,000 85,000
9 3/4% Series R, due 2016 . . . . . 24,750 25,000
10 1/8% Series T, due 2018 . . . . . 33,819 34,235
6 7/8% Series W, due 2000 . . . . . 60,000 -
-------- --------
Total First Mortgage Bonds . . 308,219 308,635
Pollution Control Notes:
Tax Exempt Series A, due 2028. . . . . . 53,800 -
Variable rate, due 2014-2015 . . . . . . - 52,400
5.9%, due 1998. . . . . . . . . . . . . - 1,454
Fees and interest due for spent fuel
disposal costs. . . . . . . . . . . . . 31,930 30,966
Less: Amounts due within one year . . . - 152
Unamortized premium and discount, net. . (717) (479)
-------- --------
Long-term debt, net. . . . . . . . . . . $393,232 $392,824
======== ========
|
Long-term debt maturities and cash sinking-fund requirements on debt outstanding at December 31, 1993 for the years 1994 through 1998 are approximately: $0 in 1994, $34,650,000 in 1995, $0 in 1996, $15,000,000 in 1997, and $25,000,000 in 1998. In addition, there are annual 1 percent sinking- and improvement-fund requirements, currently amounting to $3,100,000 in 1994 and 1995, $2,750,000 in 1996 and 1997, and $2,600,000 in 1998. Such sinking- and improvement-fund requirements may be satisfied by the deposit of cash or bonds or by certification of property additions.
All or any part of each outstanding series of first mortgage bonds may be redeemed by the company at any time at established redemption prices plus accrued interest to the date of redemption, except certain series which are subject to certain refunding limitations during their respective initial five-year redemption periods.
Essentially all of the company's utility plant is subject to the liens of its first mortgage bond indentures. As of December 31, 1993, the company has secured $53.8 million of pollution control notes with second mortgage liens on Millstone 1, junior to the liens of its first mortgage bond indentures.
WMECO has entered into an interest rate cap contract to reduce the potential impact of upward changes in interest rates on certain variable-rate tax-exempt pollution control revenue bonds held by WMECO. Approximately $52 million of total outstanding long-term variable-rate debt is secured by this interest rate cap. The total cost of the interest rate cap for 1993 was approximately $442,000, the cost of which is amortized over the term of the contract, which is for three years. The fair market value of the outstanding interest-rate cap contract as of December 31, 1993 is approximately $59,000.
Fees and interest due for spent fuel disposal costs are scheduled to be paid to the United States Department of Energy just prior to the first delivery of prior-period spent fuel, which is anticipated to be in 1998. Until such payment is made, the outstanding balance will continue to accrue interest at the three-month Treasury Bill Yield Rate. For additional information, see <F2> Note 1 of the accompanying Notes to Financial Statements.
<F9>8. INCOME TAX EXPENSE
The components of the federal and state income tax provisions are:
- -----------------------------------------------------------------------------
- ---------------
For the Years Ended December 31, 1993 <F2>(Note 1) 1992
1991
- -----------------------------------------------------------------------------
- ---------------
(Thousands of Dollars)
Current income taxes:
Federal. . . . . . . . . . . . . . . . . $22,239 $16,736
$13,550
State. . . . . . . . . . . . . . . . . . 4,712 4,165
3,570
------- -------
- -------
Total current. . . . . . . . . . . . . 26,951 20,901
17,120
------- -------
- -------
Deferred income taxes, net:
Federal. . . . . . . . . . . . . . . . . 1,683 (1,466)
1,581
State. . . . . . . . . . . . . . . . . . 664 117
1,259
------- -------
- -------
Total deferred . . . . . . . . . . . . 2,347 (1,349)
2,840
------- -------
- -------
Investment tax credits, net . . . . . . (1,429) (1,251)
(1,251)
------- --------
- -------
Total income tax expense. . . . . . . $27,869 $18,301
$18,709
======= =======
=======
The components of total income tax expense are classified as follows:
Income taxes charged to operating
expenses. . . . . . . . . . . . . . . . $28,173 $20,926
$22,856
Income taxes associated with the
amortization of deferred Millstone 3
return - borrowed funds . . . . . . . . - (2,410)
(2,945)
Income taxes associated with AFUDC and
deferred Millstone 3 return -
borrowed funds. . . . . . . . . . . . . - 595
767
Other income taxes - credit. . . . . . . (304) (810)
(1,969)
------- -------
- -------
Total income tax expense . . . . . . . . $27,869 $18,301
$18,709
======= =======
=======
|
Deferred income taxes are comprised of the tax effects of temporary
differences as follows:
- -----------------------------------------------------------------------------
- ---------------
For the Years Ended December 31, 1993 1992
1991
- -----------------------------------------------------------------------------
- ---------------
(Thousands of Dollars)
Depreciation, leased nuclear fuel,
settlement credits, and disposal costs . $6,852 $ 4,070
$ 5,911
Construction overheads . . . . . . . . . . - -
(979)
Energy adjustment clause . . . . . . . . . (2,627) (4,663)
1,409
AFUDC and Deferred Millstone 3 return,
net . . . . . . . . . . . . . . . . . . . (2,191) (1,815)
(2,178)
Deferred refueling cost. . . . . . . . . . 413 666
6
Early retirement program . . . . . . . . . (544) 775
(1,809)
Loss on bond redemption. . . . . . . . . . 1,561 18
527
Conservation and load management . . . . . (712) 394
(419)
Other. . . . . . . . . . . . . . . . . . . (405) (794)
372
------ -------
- -------
Deferred income taxes, net . . . . . . . $2,347 $(1,349)
$ 2,840
====== =======
=======
A reconciliation between income tax expense and the expected tax expense at the
applicable statutory
rates:
- -----------------------------------------------------------------------------
- ---------------
For the Years Ended December 31, 1993 1992
1991
- -----------------------------------------------------------------------------
- ---------------
(Thousands of Dollars)
Expected federal income tax at
35 percent of pretax income for
1993 and 34 percent for 1992
and 1991. . . . . . . . . . . . . . . . . $23,962 $18,810
$18,138
Tax effect of differences:
Depreciation differences . . . . . . . 1,784 (1,584)
(9)
Deferred Millstone 3 return -
other funds . . . . . . . . . . . . . (504) (721)
(940)
Amortization of deferred Millstone 3
return - other funds. . . . . . . . . 3,341 2,856
2,876
Construction overheads . . . . . . . . - -
(979)
Investment tax credit amortization . . (1,429) (1,251)
(1,251)
State income taxes, net of federal
benefit . . . . . . . . . . . . . . . 3,494 2,829
3,215
Adjustment for prior years taxes . . . - (1,500)
(1,000)
Other, net . . . . . . . . . . . . . . (2,779) (1,138)
(1,341)
------- -------
- -------
Total income tax expense. . . . . $27,869 $18,301
$18,709
======= =======
=======
|
|
|
<F10>9. PENSION BENEFITS
The company participates in a uniform noncontributory-defined benefit retirement plan covering all regular system employees (the Plan). Benefits are based on years of service and employees' highest eligible compensation during five consecutive years of employment. The company's direct-allocated portion of the system's pension cost, part of which was charged to utility plant, approximated $1.2 million in 1993, ($504,000) in 1992, and $1.9 million in 1991. The company's pension costs for 1993 and 1991 included approximately $2.7 million, and $1.9 million, respectively, related to work force reduction programs.
Currently, the company funds annually an amount at least equal to that which will satisfy the requirements of the Employee Retirement Income Security Act and the Internal Revenue Code. Pension costs are determined using market-related values of pension assets. Pension assets are invested primarily in domestic and international equity securities and bonds.
The components of the Plan's net pension cost for the system (excluding PSNH and North Atlantic Energy Service Corporation in 1992 and 1991) are:
- ----------------------------------------------------------------------------
For the Years Ended December 31, 1993 1992 1991
- ----------------------------------------------------------------------------
(Thousands of Dollars)
Service cost . . . . . . . . . . $ 59,068 $ 27,480 $ 48,738
Interest cost. . . . . . . . . . 81,456 69,746 71,041
Return on plan assets. . . . . . (176,798) (77,232) (198,437)
Net amortization . . . . . . . . 65,447 (16,266) 108,175
-------- --------- --------
Net pension cost . . . . . . . . $ 29,173 $ 3,728 $ 29,517
======== ========= ========
|
For calculating pension cost, the following assumptions were used:
- ---------------------------------------------------------------------------- For the Years Ended December 31, 1993 1992 1991 - ---------------------------------------------------------------------------- Discount rate . . . . . . . . . . 8.00% 8.50% 9.00% Expected long-term rate of return . . . . . . . . . . . 8.50 9.00 9.70 Compensation/progression rate . . 5.00 6.75 7.50 |
The following table represents the Plan's funded status reconciled to the NU
Consolidated Balance Sheets:
- ----------------------------------------------------------------------------
At December 31, 1993 1992
- ----------------------------------------------------------------------------
(Thousands of Dollars)
Accumulated benefit obligation,
including $817,421,000 of vested
benefits at December 31, 1993 and
$719,608,000 of vested benefits at
December 31, 1992. . . . . . . . . . . . $ 898,788 $ 764,432
========== ==========
Projected benefit obligation. . . . . . . $1,141,271 $1,055,295
Less: Market value of plan assets. . . . 1,340,249 1,226,468
---------- ----------
Market value in excess of projected
benefit obligation . . . . . . . . . . . 198,978 171,173
Unrecognized transition amount. . . . . . (16,735) (18,277)
Unrecognized prior service costs. . . . . 10,287 8,658
Unrecognized net gain . . . . . . . . . . (275,043) (214,894)
---------- ---------
Accrued pension liability . . . . . . . . $ (82,513) $ (53,340)
========== =========
The following actuarial assumptions were used in calculating the Plan's
year-end funded status:
- ----------------------------------------------------------------------------
At December 31, 1993 1992
- ----------------------------------------------------------------------------
Discount rate . . . . . . . . . . . . . . 7.75% 8.00%
Compensation/progression rate . . . . . . 4.75 5.00
|
The discount rate for 1993 was determined by analyzing the interest rates, as of December 31, 1993, of long-term, high-quality corporate debt securities having a duration comparable to the 13.8-year duration of the plan.
During 1993, NU's work force was reduced by approximately 7 percent through a work force reduction program that involved an early retirement program and involuntary terminations. WMECO's direct cost of the program, which approximated $3.0 million, included pension, severance, and other benefits.
<F11>10. POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
The company provides certain health care benefits, primarily medical and
dental, and life insurance benefits through a benefit plan to retired
employees. These benefits are available for employees leaving the company
who are otherwise eligible to retire and have met specified service
requirements. Through December 31, 1992, the company recognized the cost of
these benefits as they were paid. In December 1990, the FASB issued SFAS
106. This new standard requires that the expected cost of postretirement
benefits, primarily health and life insurance benefits, must be charged to
expense during the years that
eligible employees render service.
Effective January 1, 1993, the company adopted SFAS 106 on a prospective basis. Total health care and life insurance cost, part of which were deferred or charged to utility plant, approximated $5,038,000 in 1993, $2,174,000 in 1992, and $1,567,000 in 1991.
On January 1, 1993, the accumulated postretirement benefit obligation (APBO)
represented the company's prior-service obligation upon the adoption of SFAS
106. As allowed by SFAS 106, the company is amortizing its APBO of
approximately $36 million over a 20-year period. For current employees and
certain retirees, the total SFAS 106 benefit is limited to two times the 1993
health care costs. The SFAS 106 obligation has been calculated based on this
assumption.
During 1993, the company did not fund SFAS 106 postretirement costs through external trusts. The company expects to fund annually amounts once they have been rate recovered and which also are tax-deductible under the Internal Revenue Code.
The following table represents the plan's funded status reconciled to the Balance Sheet at December 31, 1993:
(Thousands of Dollars)
Accumulated postretirement
benefit obligation of:
Retirees. . . . . . . . . . . . . . . . $(27,685)
Fully eligible active employees . . . . (38)
Active employees not eligible
to retire . . . . . . . . . . . . . . . (5,488)
--------
Total accumulated postretirement
benefit obligation . . . . . . . . . . (33,211)
Unrecognized transition amount. . . . . 31,183
Unrecognized net gain . . . . . . . . . (587)
---------
Accrued postretirement benefit
liability. . . . . . . . . . . . . . . $ (2,615)
=========
|
The components of health care and life insurance costs for the year ended December 31, 1993 are:
(Thousands of Dollars)
Service cost. . . . . . . . . . . . . . $ 659
Interest cost . . . . . . . . . . . . . 2,676
Net amortization. . . . . . . . . . . . 1,703
--------
Net health care and life insurance
costs. . . . . . . . . . . . . . . . . $ 5,038
=======
|
For measurement purposes, an 11.1-percent annual rate of increase in the per capita cost of covered health care benefits was assumed for 1993; the rate was assumed to decrease to 5.4 percent for 2002. The effect of increasing the assumed health care cost trend rates by one percentage point in each year would increase the accumulated postretirement benefit obligation as of December 31, 1993 by $2.4
million and the aggregate of the service and interest cost components of net periodic postretirement benefit cost for the year then ended by $227,000.
The weighted-average discount rate used in determining the accumulated postretirement benefit obligation was 7.75 percent. The discount rate for 1993 was determined by analyzing the interest rates, as of December 31, 1993, of the long-term, high-quality corporate debt securities having a duration comparable to that of the Plan.
WMECO has received approval from the DPU to defer the incremental SFAS 106 postretirement costs. All deferred costs are expected to be recovered within ten years.
<F12>11. COMMITMENTS AND CONTINGENCIES
CONSTRUCTION PROGRAM
The construction program is subject to periodic review and revision. Actual
construction expenditures may vary from such estimates due to factors such as
revised load estimates, inflation, revised nuclear safety regulations, delays,
difficulties in the licensing process, the availability and cost of capital, and
the granting of timely and adequate rate relief by regulatory commissions, as
well as actions by other regulatory bodies.
The company currently forecasts construction expenditures (including AFUDC) of $170.1 million for the years 1994-1998, including $37.5 million for 1994. In addition, the company estimates that nuclear fuel requirements, including nuclear fuel financed through the NBFT, will be $72.7 million for the years 1994-1998, including $17.2 million for 1994. See <F3> Note 2, "Leases" for additional information about the financing of nuclear fuel.
NUCLEAR PERFORMANCE
WMECO has incurred approximately $17 million in replacement-power costs
associated with Millstone outages that have been the subject of prudence
reviews in Connecticut. Recovery of prudently incurred replacement-power costs
is permitted through a retail fuel adjustment clause. The DPU reviews the
performance of WMECO's generating units on an annual basis. Management believes
that its actions with respect to these outages have been prudent and does not
expect the outcome of the DPU performance program reviews to have a material
adverse effect on WMECO's future earnings.
ENVIRONMENTAL MATTERS
WMECO is subject to regulation by federal, state, and local authorities with
respect to air and water quality, handling and the disposal of toxic
substances and hazardous and solid wastes, and the handling and use of chemical
products. WMECO has an active environmental auditing program to prevent,
detect, and remedy noncompliance with environmental laws or regulations and
believes that it is in substantial compliance with current environmental laws
and regulations. Changing environmental requirements could hinder the
construction of new fossil-fuel environmental generating units, transmission and
distribution lines, substations, and other facilities. The cumulative long-term
economic cost impact of increasingly stringent environmental requirements cannot
be estimated. Changing environmental requirements could also require extensive
and costly modifications to WMECO's existing hydro, nuclear, and fossil-fuel
generating units, and transmission and distribution systems, and could raise
operating costs significantly. As a result, WMECO may incur significant
additional environmental costs, greater than amounts included in cost of removal
and other reserves, in connection with the generation and transmission of
electricity and the storage, transportation, and disposal of by-products
and wastes. WMECO may also encounter significantly increased costs to remedy the environmental effects of prior waste handling and disposal activities.
WMECO has recorded a liability for what it believes is, based upon information currently available, the estimated environmental remediation costs for waste disposal sites for which it expects to bear legal liability. To date, these costs have not been material with respect to the earnings or financial position of the company. In most cases, the extent of additional future environmental cleanup costs is not estimable due to factors such as the unknown magnitude of possible contamination, the appropriate remediation method, the possible effects of future legislation and regulation, the possible effects of technological changes related to future cleanup, and the difficulty of determining future liability, if any, for the cleanup of sites at which WMECO may be determined to be legally liable by the federal or state environmental agencies. In addition, WMECO cannot estimate the potential liability for future claims that may be brought against it by private parties. However, considering known facts and existing laws and regulatory practices, management does not believe that such matters will have a material adverse effect on WMECO's financial position or future results of operations. At December 31, 1993, the liability recorded by WMECO for its estimated environmental remediation costs, excluding any possible insurance recoveries from third parties, amounted to $600,000. However, in the event that it becomes necessary to effect environmental remedies that are currently not considered probable, it is reasonably possible that, based on information currently available and management intent, that the upper limit of WMECO's environmental liability range could increase to approximately $1.5 million.
NUCLEAR INSURANCE CONTINGENCIES
The Price-Anderson Act currently limits public liability from a single incident
at a nuclear power plant to $9.4 billion. The first $200 million of liability
would be provided by purchasing the maximum amount of commercially available
insurance. Additional coverage of up to a total of $8.8 billion would be
provided by an assessment of $75.5 million per incident, levied on each of the
116 nuclear units that are currently subject to the Secondary Financial
Protection Program in the United States, subject to a maximum assessment of $10
million per incident per nuclear unit in any year. In addition, if the sum of
all public liability claims and legal costs arising from any nuclear incident
exceeds the maximum amount of financial protection, each reactor operator can
be assessed an additional 5 percent, up to $3.8 million, or $437.9 million in
total, for all 116 nuclear units. The maximum assessment is to be adjusted at
least every five years to reflect inflationary changes. Based on WMECO's
ownership interests in Millstone 1, 2, and 3, WMECO's maximum liability would
be $39.8 million per incident. In addition, through WMECO's power purchase
contracts with the four Yankee regional nuclear generating companies, WMECO
would be responsible for up to an additional $17.5 million per incident.
Payments for WMECO's ownership interest in nuclear generating facilities would
be limited to a maximum of $7.2 million per incident per year.
Insurance has been purchased from Nuclear Electric Insurance Limited (NEIL) to cover: (1) certain extra costs incurred in obtaining replacement power during prolonged accidental outages with respect to WMECO's ownership interests in Millstone 1, 2, and 3, and CY, and (2) the cost of repair, replacement, or decontamination or premature decommissioning of utility property resulting from insured occurrences with respect to WMECO's ownership interests in Millstone 1, 2, and 3, CY, MY, and VY. All companies insured with NEIL are subject to retroactive assessments if losses exceed the accumulated funds available to NEIL. The maximum potential assessments against WMECO with respect to losses arising during current policy years are approximately $2.3 million under the replacement power policies and $4.5 million under the property damage, decontamination, and decommissioning policies.
Although WMECO
has purchased the limits of coverage currently available from the conventional nuclear insurance pools, the cost of a nuclear incident could exceed available insurance proceeds.
Insurance has been purchased from American Nuclear Insurers/Mutual Atomic Energy Liability Underwriters, aggregating $200 million on an industry basis for coverage of worker claims. All companies insured under this coverage are subject to retrospective assessments of $3.2 million per reactor. The maximum potential assessments against WMECO with respect to losses arising during the current policy period are approximately $2.3 million.
FINANCING ARRANGEMENTS FOR THE REGIONAL NUCLEAR GENERATING COMPANIES The company believes that the regional nuclear generating companies may require additional external financing in the next several years for construction expenditures, nuclear fuel, and other purposes. Although the ways in which each regional nuclear generating company will attempt to finance these expenditures have not been determined, the company expects that it may be asked to provide direct or indirect financial support for one or more of these companies.
PURCHASED POWER ARRANGEMENTS
WMECO purchases a portion of its electricity requirements pursuant to long-term
contracts with the Yankee companies. Under the terms of its agreements, the
company pays its ownership share (or entitlement share) of generating costs,
which include depreciation, operation and maintenance expenses, the estimated
cost of decommissioning, and a return on invested capital. These costs are
recorded as purchased power expense, and are recovered through the company's
rates. The total cost of purchases under these contracts for the units that are
operating amounted to $30.2 million in 1993, $29.2 million in 1992, and $27.9
million in 1991. See <F2> Note 1, "Summary Of Significant Accounting Policies
- - Investments and Jointly Owned Electric Utility Plant" and <F4> Note 3,
"Nuclear Decommissioning" for more information on the Yankee companies.
WMECO has entered into two arrangements for the purchase of capacity and energy from nonutility generators. These arrangements have terms of 15 and 25 years, and require the company to purchase the energy at specified prices or at formula rates. For the 12 months ended December 31, 1993, 14 percent of NU system load requirements was met by cogenerators and small power producers. The total cost of the company's purchases under these arrangements amounted to $13.6 million in 1993, $4.8 million in 1992, and $3.7 million in 1991. These costs are recovered through the company's rates.
The estimated annual cost of the significant purchase power arrangements is provided below:
- --------------------------------------------------------------------------
1994 1995 1996 1997 1998
---- ---- ---- ---- ----
(Millions of Dollars)
Yankee companies. . . . . . $29.5 $30.1 $33.7 $30.9 $35.0
Nonutility generators . . . 27.4 28.7 29.9 31.5 33.1
|
HYDRO-QUEBEC
Along with other New England utilities, WMECO, CL&P, PSNH, and HWP entered into
agreements to support transmission and terminal facilities to import electricity
from the Hydro-Quebec system in Canada. The company is obligated to pay, over
a 30-year period, its proportionate share of the annual
operation, maintenance, and capital costs of these facilities. WMECO's share of Hydro-Quebec costs are currently forecast to be $19.9 million for the years 1994-1998, including $4.3 million for 1994.
PROPERTY TAXES
CY has a significant court appeal pending for its property tax assessment in the
town of Haddam, Connecticut, concerning production plant. The central issue is
the fair market value of utility property. The company believes that a properly
derived assessment that recognizes the effect of rate regulation will result in
a fair market value that approximates net book cost. This is the assessment
level that taxing authorities are predominantly using throughout Connecticut,
Massachusetts, and some of New Hampshire. However, towns such as Haddam
advocate a method that approximates reproduction cost. The company estimates
that, for the Haddam assessment, the change to a reproduction cost-methodology
could result in a property tax valuation approximately three times greater than
a value approximating net book cost. Although CY is currently paying property
taxes based on the higher assessment, to date, the higher assessment has not had
a material adverse effect on it or the company.
The company believes that assessment levels that approximate net book cost accurately reflect the fair market value of regulated utility property. However, because of uncertainties associated with the court appeal and the potential impact of an adverse court decision on property tax assessment policy in Connecticut, the company cannot estimate the potential effect of an adverse court decision on future results of operations or financial condition. However, the company believes that, based upon past regulatory practices, it would be allowed to recover any increased property tax assessment prospectively beginning at the time new rates are established.
<F13>12. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used to estimate the fair value of each of the following financial instruments:
Cash, special deposits and nuclear decommissioning trusts: The carrying amount approximates fair value.
Preferred stock and long-term debt: The fair value of WMECO's fixed-rate securities is based upon the quoted market price for those issues or similar issues. WMECO's adjustable rate preferred stock is assumed to have a fair value equal to its carrying value.
The carrying amount of WMECO's financial instruments and the estimated fair values are as follows:
- ----------------------------------------------------------------------------
Carrying Fair
At December 31, 1993 Amount Value
- ----------------------------------------------------------------------------
(Thousands of Dollars)
Preferred stock not subject to
mandatory redemption . . . . . . . . . . . . . $ 73,500 $ 74,000
Preferred stock subject to
mandatory redemption . . . . . . . . . . . . . 27,000 28,215
Long-term debt -
First Mortgage Bonds . . . . . . . . . . . . . 308,219 319,213
Other long-term debt . . . . . . . . . . . . . 85,012 85,012
- ----------------------------------------------------------------------------
Carrying Fair
At December 31, 1992 Amount Value
- ----------------------------------------------------------------------------
(Thousands of Dollars)
Preferred stock not subject to
mandatory redemption . . . . . . . . . . . . . $ 73,500 $ 72,600
Preferred stock subject to
mandatory redemption . . . . . . . . . . . . . 28,500 29,355
Long-term debt -
First Mortgage Bonds . . . . . . . . . . . . . 308,635 325,661
Other long-term debt . . . . . . . . . . . . . 84,820 84,820
|
The fair values shown above have been reported to meet the disclosure requirements and do not purport to represent the amounts that those obligations would be settled at.
In May 1993, the FASB issued Statement of Financial Accounting Standards No. 115, Accounting for Certain Investments in Debt and Equity Securities (SFAS 115). SFAS 115 requires companies to disclose the classification of investments in debt or equity securities based on management's intent and ability to hold the security. SFAS 115 also requires disclosure of the aggregate fair value, gross unrealized holding gains, gross unrealized holding losses, and amortized cost basis by major security type. Effective January 1, 1994, WMECO will adopt SFAS 115 on a prospective basis. WMECO anticipates that the adoption of SFAS 115 will not have a material impact on future results of operations or financial position.
To the Board of Directors
of Western Massachusetts Electric Company:
We have audited the accompanying balance sheets of Western Massachusetts Electric Company (a Massachusetts corporation and a wholly owned subsidiary of Northeast Utilities) as of December 31, 1993 and 1992, and the related statements of income, common stockholder's equity, and cash flows for each of the three years in the period ended December 31, 1993. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Western Massachusetts Electric Company as of December 31, 1993 and 1992, and the results of its operations and cash flows for each of the three years in the period ended December 31, 1993, in conformity with generally accepted accounting principles.
As discussed in <F2> Note 1 to the Financial Statements, "Summary of Significant Accounting Policies - Accounting Changes," effective January 1, 1993, Western Massachusetts Electric Company changed its methods of accounting for property taxes, income taxes, and postretirement benefits other than pensions.
/s/ ARTHUR ANDERSEN & CO.
ARTHUR ANDERSEN & CO.
Hartford, Connecticut
February 18, 1994
|
Western Massachusetts Electric Company
This section contains management's assessment of Western Massachusetts Electric Company's (WMECO or the company) financial condition and the principal factors having an impact on the results of operations. The company is a wholly owned subsidiary of Northeast Utilities (NU). This discussion should be read in conjunction with the company's financial statements and footnotes.
FINANCIAL CONDITION
OVERVIEW
The company's net income increased to $40.6 million in 1993 from $37.0 million in 1992. The 1993 net income includes the impact of a change, in the first quarter of 1993, in the method of accounting for Connecticut municipal property taxes. This change resulted in a one-time contribution to net income of $3.9 million. (See the "Notes to Financial Statements" for further information about this accounting change.)
Net income before the cumulative effect of accounting change was $36.7 million in 1993. The decrease in net income from 1992 is mainly attributable to a one-time charge in the third quarter of 1993 for the costs of the company's employee-reduction program. This one-time charge lowered net income by about $2 million.
The year 1993 was one of both challenge and success for the company. WMECO's work force was reduced by about 12 percent in 1993 through an employee-reduction program that involved early retirements and involuntary terminations. The 1993 composite nuclear capacity factor of 80.8 percent was the highest level the NU system has ever achieved and far above the national average.
In 1994, the company will continue to face challenges associated with a lagging economy and competition. Retail sales for 1993 were flat, as compared to 1992, as a result of a stagnant Massachusetts economy. WMECO expects retail sales growth of about 1.5 percent in 1994, based on some expected modest improvement in the economy.
Competition within the electric utility industry is increasing. In response, the company has developed, and is continuing to develop, a number of initiatives to retain and continue to serve its existing customers and to expand its retail and wholesale customer base. These initiatives are aimed at keeping customers from either leaving WMECO's retail service territory or replacing WMECO's electric service with alternative energy sources.
The cost of doing business, including the price of electricity, is higher in the Northeast than in most other parts of the country. Relatively high state and local taxes, labor costs, and other costs of doing business in New England also contribute to competitive disadvantages for many industrial and commercial customers of WMECO. These disadvantages have aggravated the pressures on business customers in the current weakened regional economy. Since 1991, the company has worked actively with the Massachusetts Office of Business Development to package development incentives for a variety of retail and wholesale customers. These economic development packages typically include both electric rate discounts and incentive payments for energy-efficient construction, as well as technical support and energy conservation services. Targeted rate reductions in effect at the end of 1993 to a limited group of large customers were successful in preserving revenues of approximately $7 million for the company. The amount of discounts provided to customers is expected to increase as the company intensifies its efforts to retain existing customers and gain new customers.
As a result of very limited load growth throughout the Northeast and the operation of several new generating plants in the past five years, wholesale competition has grown, and a seller's market for electricity has turned into a buyer's market. The prices the company has been able to receive for new wholesale sales have generally been far lower than the prices prevalent in 1988 and 1989. In future years, competition in the Northeast is expected to increase, putting further downward pressure on prices. However, the potential price decreases may be offset somewhat by an improvement in the region's economy as well as by the retirement of a number of the region's existing generating facilities.
The ability of retail customers to select an electricity supplier and then force the local electric utility to transmit the power to the customer's site is known as "retail wheeling." While wholesale wheeling is mandated by the Energy Policy Act of 1992 under certain circumstances, retail wheeling is generally not required in the company's jurisdiction. In Massachusetts, bills being reviewed by legislative committees would permit limited retail wheeling in economically distressed areas and to municipal and state-owned facilities.
NU management has taken steps to make the NU system companies, including WMECO, more competitive and profitable in the changing utility environment. A systemwide emphasis on improved customer service is a central focus of the reorganization of NU that became effective on January 1, 1994. The reorganization entails realignment of the system into two new core business groups. The first core business group is devoted to energy resource acquisition and wholesale marketing and focuses on nuclear, fossil, and hydroelectric generation, wholesale power marketing, and new business development. The second core business group oversees all customer service, transmission and distribution operations, and retail marketing in Massachusetts, Connecticut, and New Hampshire. These two core business groups are served by various support functions.
In connection with NU's reorganization, the company has begun a corporate reengineering process which should help it to identify opportunities to become more competitive while improving customer service and maintaining excellent operational performance. NU has aggressive cost-reduction targets over the next three years, which should enable the company to remain competitive with vulnerable customers in particular.
To date, the company has not been materially affected by competition, and it does not foresee substantial adverse effect in the near future unless the current regulatory structure is substantially altered. The company believes the steps it is taking will have significant, positive effects in the next few years. In addition, WMECO benefits from a diverse retail base. The company has no significant dependence on any one customer or industry. The NU system's extensive transmission facilities and diversified generating capacity are all strong positive factors in the regional wholesale power market. NU serves about 30 percent of New England's electric needs and is one of the 20 largest electric utility systems in the country.
Achieving measurable improvement in earnings in 1994 will depend, in part, on the success of the company's wholesale power marketing, customer retention, and reengineering efforts. These efforts should help increase WMECO's earnings and improve the company's competitive position.
RATE MATTERS
Deferred charges at December 31, 1993 were approximately $214 million, which includes $94 million for the adoption in 1993 of Statement of Financial Accounting Standards (SFAS) No. 109, Accounting for Income Taxes. Deferred charges, excluding the regulatory asset for SFAS No. 109, decreased by approximately $30 million in 1993, primarily as a result of recoveries for the deferred costs of Millstone 3 and the Yankee Atomic Electric Company (YAEC) contract obligation. The company is currently recovering some amounts of its remaining deferred charges from customers. Management expects that substantially all of the deferred charges will be recovered through future rates.
Under SFAS No. 109, the company reflected a regulatory asset and a deferred tax liability for the cumulative amount of income taxes associated with timing differences for which deferred taxes had not been provided but
are expected to be recovered from customers in the future. The adoption of SFAS No. 109 has not had a material effect on results of operations.
The company also adopted SFAS No. 106, Employer's Accounting for Postretirement Benefits Other Than Pensions, in 1993. Adopting SFAS No. 106 has not had a material impact on financial condition or results of operations because the company has received approval to defer these costs and expects to recover these costs in the future.
See the "Notes To Financial Statements" for further details on deferred charges and recently adopted accounting standards.
As a result of a May 1992 Department of Public Utilities (DPU) decision, the company's annual retail rates increased by approximately $11 million or 2.7 percent on July 1, 1993. This increase is the second step of a two-year settlement agreement proposed jointly by WMECO and the Massachusetts Attorney General's Office and approved by the DPU. The first step went into effect on July 1, 1992.
WMECO has incurred approximately $17 million in replacement- power costs associated with Millstone outages that occurred over the period October 1990 through February 1992 that have been the subject of prudence reviews in Connecticut. Recovery of prudently incurred replacement-power costs is permitted through a retail fuel adjustment clause. The DPU reviews the performance of WMECO's generating units on an annual basis. Management believes that its actions with respect to these outages have been prudent and does not expect the outcome of the DPU performance program reviews to have a material adverse effect on WMECO's future earnings.
WMECO has a conservation charge (CC) in effect to recover the cost of Conservation and Load Management (C&LM) programs above or below the base rate recovery levels. WMECO filed a new CC in February 1994. WMECO expects to spend about $14 million in 1994 on C&LM programs. The DPU issued a decision approving the new CC rate effective March 1.
ENVIRONMENTAL MATTERS
The NU system devotes substantial resources to identify and then to meet the multitude of environmental requirements it faces. The system has active auditing programs addressing a variety of different regulatory requirements, including an environmental auditing program to detect and remedy noncompliance with environmental laws or regulations.
The company is potentially liable for environmental cleanup costs at a number of sites both inside and outside its service territories. To date, the future estimated environmental remediation costs for the sites for which the company expects to bear some liability have not been material with respect to the earnings or financial position of WMECO. At December 31, 1993, the liability recorded by WMECO for its estimated environmental remediation costs, excluding any possible insurance recoveries or recoveries from third parties, amounted to approximately $600,000. However, while not probable, it is reasonably possible, these costs could rise as much as $1.5 million. The extent of additional future environmental cleanup costs is not estimable due to factors such as the unknown magnitude of possible contamination and changes in existing laws and regulatory practices.
The company expects that the implementation of Phase I of the 1990 Clean Air Act Amendments will require only minimal emissions reductions. WMECO's exposure is minimal because of the company's investment in nuclear energy in the 1970s and 1980s and the burning of low-sulfur fuels. The costs of meeting the Phase II requirements cannot be estimated at this time because the emission limits have not been determined.
The company's estimated cost to decommission its share of Millstone Units 1, 2, and 3, in year-end 1993 dollars is $184 million. In addition, the company's estimated cost to decommission its share of the regional nuclear generating
units is estimated to be approximately $50 million. These costs are being recovered and recognized over the lives of the respective units. YAEC has begun decommissioning its nuclear facility. The company's estimated obligation to YAEC has been recorded on its balance sheets. Management expects that the company will continue to be allowed to recover these costs.
For further information regarding nuclear decommissioning, environmental matters, and other contingencies, see the "Notes To Financial Statements."
NUCLEAR PERFORMANCE
The composite capacity factor of the five nuclear generating units that the NU system operates (including the Connecticut Yankee nuclear unit) was 80.8 percent for 1993, compared with 63.7 percent in 1992 and a national average of 70.6 percent for 1993. The lower 1992 capacity factor was primarily the result of the 1992 Millstone 2 steam generator replacement outage and some unexpected technical and operating difficulties.
In 1993, NU was informed by the Nuclear Regulatory Commission (NRC) of three apparent violations related to the circumstances surrounding the repair of a leaking valve in the reactor coolant system at the Millstone 2 nuclear power station. Millstone 2 was shut down on August 5, 1993 when extensive repair efforts proved unsuccessful and the valve began to leak at a level beyond operating requirements. NU was assessed and paid a civil penalty of $237,500 for the three violations that were identified during the NRC investigation.
NU has initiated a number of immediate and long-term actions designed to further enhance the safe operation of all the NU nuclear plants. In an effort to improve nuclear performance, NU management announced a reorganization of its Connecticut-based nuclear organization in November 1993. The reorganization, which is based on an overview of NU's future nuclear operational needs, resulted in a number of personnel changes, including the appointment of a new senior vice president of Millstone Station, realignment of engineering operations along unit lines, and management consolidation. In addition, centralization of the nuclear engineering function at the generating stations is expected to occur during the summer of 1994. No material expense will be incurred by the company in connection with the reorganization.
LIQUIDITY AND CAPITAL RESOURCES
Cash provided from operations decreased $0.5 million in 1993, compared with the same period in 1992. Cash used for financing activities was $7.0 million higher in 1993, compared with the same period in 1992, primarily due to higher repayment of short-term debt partially offset by a net increase in long-term debt. Cash used for investments was $7.5 million lower in 1993, compared with the same period in 1992 due to lower construction expenditures.
The company has been able to shift its financing focus to refinancing outstanding high-cost securities. Internally generated cash has generally been, and is projected to continue to be, more than sufficient to cover construction costs. The forecast through 1998 shows additional new financings only in years with a large amount of securities maturing. The company is obligated to meet $82.2 million of long-term debt and preferred stock maturities and cash sinking-fund requirements for the 1994 through 1988 period, including $1.5 million in 1994. No new financings are planned for 1994.
Aggressive refinancing of its outstanding high-cost securities has enabled the company to lower its cost of debt, thus lowering electric rates. There was no new money financing in 1993. To take advantage of favorable market conditions during 1993, the company refinanced $60 million of First Mortgage Bonds and $53.8 million of pollution control bonds, in addition to restructuring the company's various credit lines. The company intends, if market conditions permit, to continue to refinance a portion of their outstanding long-term debt and preferred stock at a lower effective cost.
The company's construction program expenditures, including allowance for funds used during construction (AFUDC), for the period 1994 through 1998 are estimated to be approximately $170 million, including $37.5 million for 1994. The construction program's main focus is maintaining and upgrading the existing transmission and distribution system, as well as nuclear and fossil-generating facilities. The company does not foresee the need for new major generating facilities until at least the year 2007.
The company and The Connecticut Light and Power Company utilize a nuclear fuel trust to finance nuclear fuel requirements for their share of Millstone Units 1, 2, and 3. Nuclear fuel requirements for WMECO's share of Millstone Units 1, 2 and 3 of $72.7 million for the years 1994 through 1998, including $17.2 million for 1994, are expected to be financed by the trust.
RESULTS OF OPERATIONS
The components of the change in operating revenues for the past two years are provided in the table below.
Change in Operating Revenues
(Increase/Decrease)
- -----------------------------------------------------------------------
1993 vs. 1992 1992 vs. 1991
- -----------------------------------------------------------------------
(Millions of Dollars)
Regulatory decisions $12.0 $22.5
Fuel and purchased power
cost recoveries (18.9) (18.3)
Sales volume 3.7 (3.2)
Other revenues 7.5 (0.1)
----- -----
Total revenue change $ 4.3 $ 0.9
===== =====
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OPERATING REVENUES
Operating revenues increased $4.3 million from 1992 to 1993. Revenues related to regulatory decisions increased primarily because of the effects of the July 1992 and July 1993 retail rate increases. Fuel and purchased-power cost recoveries decreased primarily due to lower energy costs. Retail sales in 1993 were flat. Other revenues increased primarily because of higher capacity interchange revenues.
Operating revenues increased $0.9 million from 1991 to 1992. Revenues related to regulatory decisions increased primarily because of the effects of the July 1991 and July 1992 retail rate increases. Fuel and purchased power cost recoveries decreased primarily because of lower energy sales to other utilities.
Retail sales decreased 1.6 percent in 1992 as compared to 1991.
FUEL, PURCHASED, AND NET INTERCHANGE POWER
Fuel, purchased, and net interchange power decreased $18.6 million in 1993, as compared to 1992, primarily because of lower outside purchases as a result of better nuclear performance in 1993.
Fuel, purchased, and net interchange power decreased $13.4 million in 1992, as compared to 1991, primarily because of lower interchange purchases.
OTHER OPERATION AND MAINTENANCE EXPENSES
Other operation and maintenance expenses increased $11.2 million in 1993, as compared to 1992, primarily due to higher capacity interchange charges, increased conservation expenses, and the 1993 one-time costs associated with the employee-reduction program, partially offset by lower 1993 costs associated with the operation and maintenance activities of the nuclear units.
Other operation and maintenance expenses increased $14.3 million in 1992, as compared to 1991, primarily due to higher 1992 costs of operation and maintenance activities at nuclear and fossil units, partially offset by the 1991 costs associated with a voluntary early retirement program.
AMORTIZATION OF REGULATORY ASSETS
Amortization of regulatory assets increased $3.4 million in 1993, as compared to 1992, and $1.4 million in 1992, as compared to 1991, primarily because of higher amortization of Millstone 3 deferred costs. The increase in 1993 is also attributable to the gross-up of taxes due to SFAS No. 109.
FEDERAL AND STATE INCOME TAXES
Federal and state income taxes increased $7.8 million in 1993, as compared to 1992, primarily because of higher book taxable income and one-time adjustments in 1992 causing 1992 taxes to be lower than would otherwise be expected.
WESTERN MASSACHUSETTS ELECTRIC COMPANY
- -----------------------------------------------------------------------------
- -----------------------
SELECTED FINANCIAL DATA
- -----------------------------------------------------------------------------
- -----------------------
- -----------------------------------------------------------------------------
- -----------------------
1993 1992 1991
1990 1989
- -----------------------------------------------------------------------------
- -----------------------
(Thousands of Dollars)
Operating Revenues . . . . . . . $ 415,055 $ 410,720 $ 409,840 $
375,456 $ 348,720
Operating Income . . . . . . . . 60,067 60,513 59,723
57,448 55,483
Net Income . . . . . . . . . . . 40,594 37,022 34,637
35,191 38,578
Cash Dividends on
Common Stock . . . . . . . . . 28,785 29,536 31,499
34,459 28,974
Total Assets . . . . . . . . . . 1,204,642 1,130,684 1,119,593
1,134,986 1,135,096
Long-Term Debt*. . . . . . . . . 393,232 392,976 401,095
419,527 418,093
Preferred Stock Not Subject to
Mandatory Redemption . . . . . 73,500 73,500 88,500
88,500 88,500
Preferred Stock Subject to
Mandatory Redemption<F14>* . . 27,000 28,500 28,502
30,000 30,000
Obligations Under Capital
Leases<F14>*. . . . . . . . . . 36,902 41,509 44,134
52,370 56,730
<F14>*Includes portions due within one year.
|
- -----------------------------------------------------------------------------
- -----------------------
STATEMENTS OF QUARTERLY FINANCIAL DATA (Unaudited)
- -----------------------------------------------------------------------------
- -----------------------
Quarter Ended
- -----------------------------------------------------------------
1993 March 31 June 30 September
30 December 31
- -----------------------------------------------------------------------------
- -----------------------
Operating Revenues. . . . . . . $108,950 $92,383 $105,510
$108,212
======== ======= ========
========
Operating Income. . . . . . . . $ 17,659 $13,529 $ 13,045
$ 15,834
======== ======= ========
========
Net Income. . . . . . . . . . . $ 15,350 $ 7,316 $ 7,182
$ 10,746
======== ======= ========
========
1992
- -----------------------------------------------------------------------------
- -----------------------
Operating Revenues. . . . . . . $112,897 $95,231 $ 99,524
$103,068
======== ======= =========
=========
Operating Income. . . . . . . . $ 20,965 $ 9,276 $ 11,849
$ 18,423
======== ======= =========
=========
Net Income. . . . . . . . . . . $ 14,427 $ 3,518 $ 6,312
$ 12,765
======== ======= =========
========
|
WESTERN MASSACHUSETTS ELECTRIC COMPANY
- -----------------------------------------------------------------------------
- -----------------------
STATISTICS
- -----------------------------------------------------------------------------
- -----------------------
Gross Electric Average
Utility Plant Annual
December 31, Use Per Electric
(Thousands of kWh Sales Residential Customers
Employees
Dollars) (Millions) Customer (kWh) (Average)
(December 31,)
- -----------------------------------------------------------------------------
- -----------------------
1993 $1,242,927 4,715 7,351 192,542
657
1992 1,214,386 4,155 7,433 191,920
739
1991 1,199,362 3,780 7,494 191,692
797
1990 1,184,285 3,874 7,619 191,759
826
1989 1,147,780 3,975 7,878 190,217
849
|
Western Massachusetts Electric Company
Trustee and Interest Paying Agent The First National Bank of Boston, Corporate Trust Department P.O. Box 1897, Boston, Massachusetts 02105
Preferred Stock
Transfer Agent, Dividend Disbursing Agent and Registrar Northeast Utilities Service Company Shareholder Services P.O. Box 5006, Hartford, CT 06102-5006
1994 Dividend Payment Dates 7.72% Series B - January 1, April 1, July 1 and October 1
7.60% Series - February 1, May 1, August 1 and November 1
DARTS*
February 8, March 29, May 17, July 6, August 23, October 11, and November 29
Address General Correspondence in Care of:
Northeast Utilities Service Company
Investor Relations Department
P.O. Box 270
Hartford, Connecticut 06141-0270
Tel. (203) 665-5000
General Office
174 Brush Hill Avenue, West Springfield, Massachusetts, 01090-0010
*Transfer and Paying Agent:
Bankers Trust Company, Corporate Trust and Agency Group P.O. Box 318, Church Street Station, New York, New York 10015
The data contained in this Report is submitted for the sole purpose of providing information to present stockholders about the Company.
Exhibit 13.4
1993
ANNUAL REPORT
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
1993 Annual Report Public Service Company of New Hampshire Index
Contents Page
Balance Sheets ......................................... 1-2
Statements of Income ................................... 3
Statements of Cash Flows ............................... 4
Statements of Common Equity ............................ 5
Notes to Financial Statements .......................... 6-27
Report of Independent Public Accountants/
Independent Auditors' Report .................... 28-29
Management's Discussion and Analysis of Financial
Condition and Results of Operations ................... 30-35
Selected Financial Data ................................ 37-38
Statistics ............................................. 39
Statements of Quarterly Financial Data ................. 39
Preferred Stockholder and Bondholder Information ....... Back Cover
|
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
BALANCE SHEETS
At December 31, 1993 1992
- -------------------------------------------------------------------------------
(Thousands of Dollars)
ASSETS
- ------
Utility Plant, at original cost:
Electric......................................... $1,980,050 $1,887,659
Less: Accumulated provision for depreciation.. 441,076 410,026
----------- -----------
1,538,974 1,477,633
Construction work in progress.................... 8,573 4,363
Nuclear fuel, net................................ 2,107 2,337
----------- -----------
Total net utility plant...................... 1,549,654 1,484,333
----------- -----------
Other Property and Investments:
Nuclear decommissioning trusts, at cost.......... 1,486 1,147
Investments in regional nuclear generating
companies and subsidiary company, at equity..... 19,816 19,917
Other, at cost................................... 429 422
----------- -----------
21,731 21,486
----------- -----------
Current Assets:
Cash and special deposits........................ 5,995 2,328
Receivables, less accumulated provision for
uncollectible accounts of $1,816,000 in 1993
and of $2,780,000 in 1992...................... 76,665 75,094
Receivables from affiliated companies............ 859 2,827
Accrued utility revenues......................... 35,770 32,213
Fuel, materials, and supplies, at average cost... 41,187 45,123
Prepayments and other............................ 10,429 9,261
----------- -----------
170,905 166,846
----------- -----------
Deferred Charges:
Regulatory asset--rate agreement <F1>(Note 1).... 769,498 868,716
Regulatory asset--income taxes, net <F1>(Note 1). 54,250 -
Unrecovered contract obligation--YAEC <F4>(Note 4) 24,150 28,160
Energy adjustment clause <F1>(Note 1)............ 122,478 82,175
Unamortized debt expense......................... 19,643 24,679
Deferred taxes, net.............................. - 66,670
Deferred receivable from affiliated company...... 33,284 32,909
Other............................................ 8,918 17,794
----------- -----------
1,032,221 1,121,103
----------- -----------
Total Assets................................. $2,774,511 $2,793,768
=========== ===========
|
The accompanying notes are an integral part of these financial statements.
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
BALANCE SHEETS
At December 31, 1993 1992
- -----------------------------------------------------------------------------
- ------
(Thousands of
Dollars)
CAPITALIZATION AND LIABILITIES
- ------------------------------
Capitalization:
Common stock, $1 par value--authorized
and outstanding 1,000 shares in 1993 and 1992....... $ 1 $
1
Capital surplus, paid in............................. 421,245
420,762
Retained earnings.................................... 60,840
21,853
-----------
- -----------
Total common equity......................... 482,086
442,616
Cumulative preferred stock subject to mandatory
redemption--$25 par value--authorized 25,000,000 shares;
outstanding 5,000,000 shares in 1993 and 1992.. 125,000
125,000
Long-term debt....................................... 999,985
1,093,985
-----------
- -----------
Total capitalization........................ 1,607,071
1,661,601
-----------
- -----------
Obligations Under Seabrook Power Contract
and Other Capital Leases <F2>(Note 2)............... 815,553
752,866
-----------
- -----------
Current Liabilities:
Notes payable to banks............................... -
35,000
Notes payable to affiliated company.................. 2,500
8,500
Long-term debt--current portion...................... 94,000
94,000
Obligations under Seabrook Power Contract and
other capital leases--current portion <F2>(Note 2).. 41,006
34,960
Accounts payable..................................... 27,119
28,406
Accounts payable to affiliated companies............. 17,576
19,183
Accrued taxes........................................ 122
1,725
Accrued interest..................................... 11,142
11,281
Accrued pension benefits............................. 31,890
30,683
Other................................................ 22,014
23,727
-----------
- -----------
247,369
287,465
-----------
- -----------
Deferred Credits:
Accumulated deferred income taxes <F1>(Note 1)....... 18,076
- -
Accumulated deferred investment tax credits.......... 6,174
6,740
Deferred contract obligation--YAEC <F4>(Note 4)...... 24,150
28,160
Deferred revenue from affiliated company <F11>(Note 11) 33,284
32,909
Other................................................ 22,834
24,027
-----------
- -----------
104,518
91,836
-----------
- -----------
Commitments and Contingencies <F11>(Note 11)
Total Capitalization and Liabilities........ $ 2,774,511 $
2,793,768
===========
===========
|
The accompanying notes are an integral part of these financial statements.
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
STATEMENTS OF INCOME
- -----------------------------------------------------------------------------
- ------------
Jan. 1, June 5, Jan. 1, May 16,
Jan. 1,
1993 1992 1992 1991
1991
to to to to
to
Dec. 31, Dec. 31, June 4, Dec. 31,
May 15,
For the Periods 1993 1992 1992 1991
1991
- -----------------------------------------------------------------------------
- ------------
(Thousands of Dollars)
|
|
|
|
Operating Revenues.................... $864,415 $492,559 |$381,769 $539,827
|$ 246,281
--------- ---------|---------
- ---------|----------
Operating Expenses: |
|
Operation-- |
|
Fuel, purchased and net |
|
interchange power................ 208,023 105,346 | 123,784 139,166
| 95,261
Other............................. 301,534 176,679 | 103,250 119,296
| 80,231
Maintenance......................... 35,427 20,535 | 22,520 42,335
| 19,936
Depreciation........................ 38,580 21,526 | 25,183 36,590
| 28,269
Amortization of regulatory |
|
assets, net........................ 67,379 51,143 | 36,528 53,554
| -
Federal and state income |
|
taxes <F8>(Note 8)................. 73,263 39,197 | 16,449 38,316
| (12,769)
Taxes other than income taxes....... 34,675 16,927 | 19,805 27,815
| 13,737
--------- ---------|---------
- ---------|----------
Total operating expenses........ 758,881 431,353 | 347,519 457,072
| 224,665
--------- ---------|---------
- ---------|----------
Operating Income...................... 105,534 61,206 | 34,250 82,755
| 21,616
--------- ---------|---------
- ---------|----------
Other Income: |
|
Deferred Seabrook return--other |
|
funds.............................. - - | 12,101 15,578
| -
Equity in earnings of regional |
|
nuclear generating companies |
|
and subsidiary company............. 1,371 1,031 | 869 1,426
| 681
Bankruptcy related expenses......... - - | (5,084) (2,574)|
(9,314)
Gain on generating projects......... - - | 6,498 -
| 12,446
Other, net.......................... 1,041 2,519 | 63 8,706
| 3,359
Income taxes - credit............... 23,044 14,254 | 12,814 20,665
| (12,495)
--------- ---------|---------
- ---------|----------
Other income, net............... 25,456 17,804 | 27,261 43,801
| (5,323)
--------- ---------|---------
- ---------|----------
Income before interest charges.. 130,990 79,010 | 61,511 126,556
| 16,293
--------- ---------|---------
- ---------|----------
Interest Charges: |
|
Interest on long-term debt.......... 77,842 47,625 | 54,125 87,620
| 32,423
Post-petition interest.............. - - | - -
| 42,101
Other interest...................... 911 1,987 | 3,913 130
| 3,238
Deferred Seabrook return--borrowed |
|
funds, net of income taxes........ - - | (9,305) (13,888)|
-
--------- ---------|---------
- ---------|----------
Interest charges, net........... 78,753 49,612 | 48,733 73,862
| 77,762
--------- ---------|---------
- ---------|----------
Income (Loss) before extraordinary |
|
loss................................ 52,237 29,398 | 12,778 52,694
| (61,469)
Extraordinary loss from |
|
reorganization...................... - - | - -
| (39,322)
--------- ---------|---------
- ---------|----------
Net Income (Loss)..................... $ 52,237 $ 29,398 |$ 12,778 $ 52,694
|$(100,791)
========= =========|=========
=========|==========
|
PSNH was reorganized on May 16, 1991 and became a wholly owned subsidiary of Northeast Utilities on June 5, 1992.
The accompanying notes are an integral part of these financial statements.
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
STATEMENTS OF CASH FLOWS
- -----------------------------------------------------------------------------
- ------------
Jan. 1, June 5, Jan. 1, May 16,
Jan. 1,
1993 1992 1992 1991
1991
to to to to
to
Dec. 31, Dec. 31, June 4, Dec. 31,
May 15,
For the Periods 1993 1992 1992 1991
1991
- -----------------------------------------------------------------------------
- ------------
(Thousands of Dollars)
Cash Flows From Operations:
Net income (loss)..........................$ 52,237 $ 29,398 |$ 12,778 $ 52,694
|$ (100,791)
Adjusted for the following: |
|
Depreciation.............................. 38,665 21,561 | 25,183 36,590
| 28,269
Deferred income taxes and investment |
|
tax credits, net........................ 50,027 22,543 | 3,141 17,591
| (294)
Deferred return - Seabrook................ - - | (21,406)
(29,466)| -
Deferred energy costs, net of amortization (39,660) (42,520)| 1,469
(38,909)| -
Amortization of regulatory asset<F1>(Note 1)89,822 51,836 | 36,528 53,554
| -
Other sources of cash..................... 15,394 12,088 | 15,967 3,899
| 2,362
Other uses of cash........................ (12,042) (4,825)| (4,355)
(47,117)| (11,364)
Changes in working capital: |
|
Receivables and accrued utility revenues. (3,161) (18,314)| 34,432 44,976
| 7,962
Fuel, materials, and supplies.......... 3,936 459 | (4,945)
(23,187)| 4,482
Accounts payable....................... (2,894) 5,083 | (8,189)
(23,769)| 39,299
Accrued taxes.......................... (1,602) (17,323)| 20,409
(22,693)| 25,232
Other working capital (excludes cash).. (2,224) 12,610 | (26,056)
(55,114)| 27,761
--------- --------|---------
- --------|-----------
Net cash flows from (used for) operations... 188,498 72,596 | 84,956
(30,951)| 22,918
--------- --------|---------
- --------|-----------
Cash Flows From Financing Activities: |
|
Common shares.............................. - 425,000 | - 846
| -
Long-term debt............................. 44,800 75,000 | - -
| 1,331,785
Preferred stock............................ - - | - -
| 125,000
Financing expenses......................... (267) - | (45)
(7,734)| (21,132)
Net increase(decrease) in short-term debt.. (41,000) (64,500)| - 87,200
| (292)
Reacquisitions and retirements of |
|
long-term debt...........................(138,800)(171,000)| (27,000) -
| -
Cash dividends on preferred |
|
stock<F6>(Note 6)........................ (13,250) (9,938)| (3,312)
(8,282)| -
Acquisition settlement <F1>(Note 1)........ - (841,466)| - -
| -
Settlement of bankruptcy claims............ - - | -
(14,412)|(1,505,373)
--------- --------|---------
- --------|-----------
Net cash flows from (used for) |
|
financing activities.................(148,517)(586,904)| (30,357) 57,618
| (70,012)
-------- ---------|---------
- --------|-----------
Investment Activities: |
|
Investments in plant: |
|
Electric utility plant................... (35,360) (15,352)| (25,266)
(22,683)| (19,852)
Nuclear fuel............................. (614) (552)| (9,990)
(3,125)| 3,386
-------- --------|---------
- --------|-----------
Net cash flows used for investments in plant (35,974) (15,904)| (35,256)
(25,808)| (16,466)
Sale of Seabrook assets to NAEC............ - 504,265 | - -
| -
Other investment activities, net .......... (340) (180)| -
30 | (3)
--------- --------|---------
- --------|-----------
Net cash flows from (used for) investments.. (36,314) 488,181 | (35,256)
(25,778)| (16,469)
--------- --------|---------
- --------|-----------
Net Incr.\(Decr.) In Cash for the Period.... 3,667 (26,127)| 19,343 889
| (63,563)
Cash and special deposits - |
|
beginning of period..................... 2,328 28,455 | 9,112 8,223
| 71,786
--------- --------|---------
- --------|-----------
Cash and special deposits - end of period...$ 5,995 $ 2,328 |$ 28,455 $ 9,112
|$ 8,223
========= ========|=========
========|===========
Supplemental Cash Flow Information: |
|
Cash paid during the periods for: |
|
Interest, net of amounts capitalized |
|
during construction......................$ 75,609 $ 35,405 |$ 53,427 $ 71,909
|$ 349,663
========= ========|=========
========|===========
Income taxes..............................$ 2,390 $ 410 |$ 909 $
60 |$ 20
========= ========|=========
========|===========
Increase in obligations: |
|
Seabrook Power Contract...................$ 84,796 $ 37,490 |$ - $ -
|$ -
======== =========|=========
========|===========
Capital leases............................$ 4,696 $ - |$ - $ -
|$ -
========= ========|=========
========|===========
|
PSNH was reorganized on May 16, 1991 and became a wholly owned subsidiary of
Northeast Utilities
on June 5, 1992.
The accompanying notes are an integral part of these financial statements.
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
STATEMENTS OF COMMON EQUITY
- -----------------------------------------------------------------------------
- ------------
Capital
Common Surplus, Retained
Stock Paid In Earnings
Total
- -----------------------------------------------------------------------------
- ------------
(Thousands of
Dollars)
Balance at January 1, 1991.............. $210,773 $435,420 $(742,207)
$ (96,014)
Net loss............................ (61,469)
(61,469)
--------- --------- ----------
- ----------
Balance at May 15, 1991................. $210,773 $435,420 $(803,676)
$(157,483)
========= ========= ==========
==========
_____________________________________________________________________________
____________
Balance at May 16, 1991................. $ 31,982 $607,366 $ -
$ 639,348
Net income.......................... 52,694
52,694
Cash dividends on preferred stock... (8,282)
(8,282)
Stock dividends on common stock..... 5,470 38,310 (43,780)
-
Issuance of 42,313 shares of
common stock, $1 par value........ 42 622
664
--------- --------- ----------
- ----------
Balance at December 31, 1991............ 37,494 646,298 632
684,424
Net income.......................... 12,778
12,778
Cash dividends on preferred stock... (5,704)
(5,704)
Stock dividends on common stock..... 1,962 16,456 (18,418)
-
Capital stock expenses, net......... (2)
(2)
--------- --------- ----------
- ----------
Balance at June 4, 1992................. $ 39,456 $662,752 $ (10,712)
$ 691,496
========= ========= ==========
==========
_________________________________________________________________
________________________
Balance at June 5, 1992................. $ - $ - $ -
$ -
Net income.......................... 29,398
29,398
Cash dividends on preferred stock... (7,545)
(7,545)
Issuance of 1,000 shares of common
stock, $1 par value............... 1
1
Premium on common stock............. 424,999
424,999
Capital stock expenses, net......... (4,237)
(4,237)
--------- --------- ----------
- ----------
Balance at December 31, 1992............ 1 420,762 21,853
442,616
Net income.......................... 52,237
52,237
Cash dividends on preferred stock... (13,250)
(13,250)
Capital stock expenses, net......... 483
483
--------- --------- ----------
- ----------
Balance at December 31, 1993............ $ 1 $421,245 $ 60,840
$ 482,086
========= ========= ==========
==========
|
PSNH was reorganized on May 16, 1991 and became a wholly owned subsidiary of
Northeast Utilities
on June 5, 1992.
The accompanying notes are an integral part of these financial statements.
NOTES TO FINANCIAL STATEMENTS
<F1>
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
EMERGENCE FROM BANKRUPTCY AND MERGER WITH NORTHEAST UTILITIES
On January 28, 1988, Public Service Company of New Hampshire (PSNH or the company) filed a petition for reorganization under Chapter 11 of the Bankruptcy Code.
On January 2, 1990, Northeast Utilities Service Company (NUSCO) filed a plan of reorganization (the Plan) on behalf of Northeast Utilities (NU), the Creditors Committee, the Equity Committee, and various PSNH bondholders, with the support of the state of New Hampshire. On April 20, 1990, following a vote by all classes of creditors and equity security holders of PSNH and hearings in the Bankruptcy Court,the Plan was confirmed by the Bankruptcy Court. From April 30, 1990 until the June 5, 1992 acquisition date, NUSCO managed PSNH in accordance with a management services agreement approved by the Bankruptcy Court.
On May 16, 1991 (Reorganization Date) the company emerged from bankruptcy pursuant to the Plan as a stand-alone company, subject to a merger agreement (Merger Agreement) with NUSCO and NU Acquisition Corp. (NUAC). On the Reorganization Date, the company's then existing security holders and creditors were entitled to receive distributions of cash and new PSNH securities.
Under the Plan, a distribution totaling approximately $2.3 billion in cash and securities was made as of May 16, 1991 to former creditors and equity security holders of the company. Former holders of secured claims received cash in the full amount of their claims for principal and unpaid interest. Former holders of unsecured claims received a distribution in the amount of their claims for principal plus pre-petition interest, less any applicable original issue discount unamortized at the petition date, and a total of $110.6 million of post-petition interest. Approximately $593 million of such distribution was made in cash and the balance in shares of new common stock. Former holders of shares of preferred and common stock of the company received $205 million principal amount of 15.23 percent Notes, shares of new common stock and certificates entitling the holder to receive warrants to purchase NU common shares. Former holders of the company's outstanding warrants received a total of $1.3 million in cash.
The company accounted for the reorganization using fresh start accounting. Accordingly, all assets and liabilities were restated to their reorganization value, which approximated fair value at the Reorganization Date.
On June 5, 1992 (Acquisition Date), NU completed its acquisition of PSNH when NUAC was merged into PSNH pursuant to the Merger Agreement and the company became a wholly owned operating subsidiary of NU. In a related transaction, PSNH's 35.6 percent share of the Seabrook 1 nuclear power plant (Seabrook 1) and other Seabrook-related assets were transferred to North Atlantic Energy Corporation (NAEC), another new NU subsidiary, for approximately $504 million in cash and the assumption of the company's obligations under the $205 million, 15.23 percent Notes.
The total cash required to effect the acquisition of PSNH was approximately $941 million. The sources of the $941 million were a $425 million equity investment by NU into PSNH, a $161 million equity investment by NU into NAEC, and NAEC's issuance and sale of $355 million principal amount of First Mortgage Bonds. The proceeds were used (a) to make a distribution of $20 per share, or approximately $789 million in the aggregate, to the holders of the approximately 39.5 million outstanding shares of the company's new common stock, (b) to reimburse $45 million of NU acquisition expenses under the Plan,
(c) to provide $49 million to reduce PSNH's Term Loan, (d) to provide $7 million to meet the tax on the transfer of Seabrook to NAEC, and (e) to reduce PSNH's short-term borrowings with the balance of funds. The Plan also called upon NU to issue to former PSNH equity security holders warrants entitling the holders to purchase approximately 8.4 million NU common shares at an exercise price of $24 per share. The warrants expire on June 5, 1997.
In accordance with generally accepted accounting principles, the acquisition of PSNH has been accounted for as a purchase.
On June 29, 1992, PSNH's New Hampshire Yankee Division (NHY) was dissolved and North Atlantic Energy Service Corporation (NAESCO), a wholly owned subsidiary of NU, with the approval of the Securities and Exchange Commission (SEC) and the Nuclear Regulatory Commission (NRC), began management of the Seabrook 1 power plant as agent for the Seabrook joint owners. On June 29, 1992, all NHY employees became employees of NAESCO.
GENERAL
PSNH, The Connecticut Light and Power Company, Western Massachusetts Electric
Company, NAEC, and Holyoke Water Power Company are the operating subsidiaries
comprising the Northeast Utilities system (the system)and are wholly owned by
NU.
Other wholly owned subsidiaries of NU provide substantial support services to the system. NUSCO supplies centralized accounting, administrative, data processing, engineering, financial, legal, operational, planning, purchasing, and other services to the system companies. Northeast Nuclear Energy Company acts as agent for system companies in constructing and operating the Millstone nuclear generating facilities.
All transactions among affiliated companies are on a recovery of cost basis which may include amounts representing a return on equity, and are subject to approval by various federal and state regulatory agencies.
ACCOUNTING CHANGES
Income Taxes: The company adopted the provisions of Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes (SFAS 109),"
effective January 1, 1993. For information on this change, see <F1>Note 1,
"Summary of Significant Accounting Policies - Income Taxes."
Postretirement Benefits Other Than Pensions: PSNH adopted the provisions of Statement of Financial Accounting Standards No. 106, "Employer's Accounting for Postretirement Benefits Other Than Pensions" (SFAS 106), effective January 1, 1993. For information on this change, see <F10>Note 10, "Postretirement Benefits Other Than Pensions."
ACCOUNTING RECLASSIFICATIONS
For periods prior to December 31, 1993, certain amounts in the accompanying
financial statements of PSNH have been reclassified to conform with the
December 31, 1993 presentations.
PUBLIC UTILITY REGULATION
NU is registered with the SEC as a holding company under the Public Utility
Holding Company Act of 1935 (1935 Act), and it and its
subsidiaries, including PSNH, are subject to the provisions of the 1935 Act.
Arrangements among the system companies, outside agencies, and other
utilities covering
interconnections, interchange of electric power, and sales of utility property are subject to regulation by the Federal Energy Regulatory Commission (FERC) and/or the SEC. The company is subject to further regulation for rates and other matters by the FERC and the New Hampshire Public Utilities Commission (NHPUC), and follows the accounting policies prescribed by the commissions.
REVENUES
Other than special contracts, utility revenues are based on authorized rates
applied to each customer's use of electricity. Rates can be changed only
through a formal proceeding before the appropriate regulatory commission. At
the end of each accounting period, PSNH accrues an estimate for the amount of
energy delivered but unbilled.
For additional information see <F11> Note 11, "Commitments and Contingencies
- - PSNH Rate Agreement."
INVESTMENTS AND JOINTLY OWNED ELECTRIC UTILITY PLANT
Regional Nuclear Generating Companies: PSNH owns common stock of four
regional nuclear generating companies (Yankee companies). The Yankee
companies, with PSNH's ownership interests, are:
Connecticut Yankee Atomic Power Company (CY)....... 5.0% Yankee Atomic Electric Company (YAEC) ............. 7.0 Maine Yankee Atomic Power Company (MY) ............ 5.0 Vermont Yankee Nuclear Power Corporation (VY) ..... 4.0 |
PSNH's investments in the Yankee companies are accounted for on the equity basis. The electricity produced by the facilities that are operating is committed to the participants substantially on the basis of their ownership interests and is billed pursuant to contractual agreements. For more information on these agreements, see <F11>Note 11, "Commitments and Contingencies - Purchased Power Arrangements."
The 173-megawatt (MW) YAEC nuclear power plant was shut down permanently on February 26, 1992. For more information on the Yankee companies, see <F4> Note 4, "Nuclear Decommissioning."
Millstone 3: The company has a 2.85 percent joint ownership interest in Millstone 3, a 1,149 MW nuclear generating unit. As of December 31, 1993, plant-in-service and the accumulated provision for depreciation included approximately $118.1 million and $21.1 million, respectively, for PSNH's proportionate share of Millstone 3. PSNH's share of Millstone 3 expenses is included in the corresponding operating expenses on the accompanying Statements of Income.
Wyman Unit 4: PSNH has a 3.14 percent ownership interest in Wyman Unit 4 (Wyman), a 620 MW oil-fired generating unit. At December 31, 1993, plant-in-service and the accumulated provision for depreciation included approximately $6.0 million and $3.1 million, respectively, for PSNH's share of Wyman. PSNH's share of Wyman expenses are included in the corresponding operating expenses on the accompanying Statements of Income.
REGULATORY ASSET
The regulatory asset represents the aggregate value placed by the rate
agreement with the state of New Hampshire (Rate Agreement) on PSNH's assets
in excess of the net book value of PSNH's non-Seabrook assets and the $700
million value assigned to Seabrook by the Rate Agreement. The regulatory
asset was valued at approximately $920.6 million on the Acquisition Date.
The Rate Agreement provides for the recovery, through rates, of the
amortization of the regulatory asset with a return each year on the
unamortized portion of the asset. The Rate Agreement provides that $425
million of the regulatory asset be amortized over the first seven years after
the Reorganization Date, with the remaining amount to be amortized over
the 20-year period after the Reorganization Date. In 1993, an adjustment
related to certain liabilities associated with the acquisition reduced the
regulatory asset by approximately $9.4 million. In accordance with the Rate
Agreement, approximately $265 million of the remaining regulatory asset is
scheduled to be amortized and recovered through rates by 1998, and the
balance of approximately $504 million is scheduled to be amortized and
recovered through rates by 2011.
DEPRECIATION
The provision for depreciation is calculated using the straight-line method
based on estimated remaining lives of depreciable utility plant-in-service,
adjusted for salvage value and removal costs, as approved by the NHPUC.
Except for major facilities, depreciation factors are applied to the average
plant-in-service during the period. Major facilities are depreciated from
the time they are placed in service. When plant is retired from service, the
original cost of plant, including costs of removal, less salvage, is charged
to the accumulated provision for depreciation. For Millstone 3, the costs of
removal, less salvage, that have been funded through an external
decommissioning trust will be paid with funds from the trust and charged to
the accumulated reserve for decommissioning included in the accumulated
provision for depreciation over the expected service life of the plant. See
<F4> Note 4, "Nuclear Decommissioning," for additional information.
The depreciation rates for the several classes of electric plant-in-service are equivalent to a composite rate of 3.6 percent for the year ended December 31, 1993, 3.5 percent for the six-month and twenty-six day period ending December 31, 1992, 3.4 percent for the five-month and four-day period ending June 4, 1992, 3.4 percent for the seven and one-half months ended December 31, 1991, and 3.1 percent for the four and one-half months ended May 15, 1991.
INCOME TAXES
The tax effect of temporary differences (differences between the periods in
which transactions affect income in the financial statements and the periods
in which they affect the determination of income subject to tax) is accounted
for in accordance with the ratemaking treatment of the applicable regulatory
commissions. See <F8> Note 8, "Income Tax Expense," for the components of
income tax expense.
In 1992, the Financial Accounting Standards Board (FASB) issued SFAS 109. SFAS 109 supersedes previously issued income tax accounting standards. PSNH adopted SFAS 109, on a prospective basis, during the first quarter of 1993. The adoption of SFAS 109 has not had a material effect on the net income or on the balance sheet of the company. As a result of the adoption of SFAS 109, the company has increased the deferred tax asset for net-operating-losses (NOLs) previously not recognized. A valuation reserve was not established. As it is probable that the increase in deferred tax liabilities will be recovered from customers through rates, PSNH also established a regulatory asset. SFAS 109 does not permit net-of-tax accounting.
The temporary differences which give rise to the accumuated deferred tax obligation at December 31, 1993, are as follows:
(Thousands of Dollars)
Net operating loss carryforwards ........... $(270,612)
Accelerated depreciation and
other plant-related differences .......... 150,238
The tax effect of net regulatory assets .... 80,922
Other....................................... 57,528
---------
$ 18,076
=========
|
At December 31, 1993, PSNH had a NOL carryforward of approximately $788 million, and an Alternative Minimum Tax (AMT) NOL carryforward of $600 million, both to be used against PSNH's federal taxable income and expiring between the years 1999 and 2007. PSNH also had Investment Tax Credit (ITC) carryforwards of $66 million, which expire between the years 1994 and 2005. The reorganization of PSNH under Chapter 11 of the United States Bankruptcy Code limits its ability to use its remaining NOL and ITC carryforwards so that some portion may expire unused. Of the carryforward amounts indicated above, approximately $323 million of the NOL, $274 million of the AMT NOL, and $35 million of the ITC carryforwards are available for use subject to applicable limits of the Internal Revenue Code.
ENERGY ADJUSTMENT CLAUSE
The Rate Agreement includes a comprehensive fuel and purchased power
adjustment clause (FPPAC) permitting PSNH to pass through to retail
customers, for a ten-year period, the retail portion of differences between
the fuel and purchased power costs assumed in the Rate Agreement and PSNH's
actual costs, which include the costs under the Seabrook Power Contract. The
cost components of the FPPAC are subject to a prudence review by the NHPUC.
The costs associated with purchases from certain small-power producers (SPPs) over the level assumed in the Rate Agreement are deferred and recovered over ten-year periods through the FPPAC. At December 31, 1993, unrecovered SPP deferrals are $107.6 million. A majority of these purchases are under long-term arrangements (20-30 years) at prices significantly higher than the company's current or projected avoided costs.
For additional information, see <F2> Note 2, "Seabrook Power Contract" and Note 11, "Commitments and Contingencies - Purchased Power Arrangements."
<F2>
2. SEABROOK POWER CONTRACT
On June 5, 1992, NAEC and PSNH entered into the Seabrook Power Contract (Contract), under which PSNH is obligated to buy from NAEC, and NAEC is obligated to sell to PSNH, all of NAEC's 35.6 percent ownership share of the capacity and output of Seabrook 1 for a period equal to the length of the NRC's full power operating license for Seabrook 1. Accordingly, PSNH has included its right to buy power from NAEC on its Balance Sheets as part of utility plant with a corresponding obligation. At December 31, 1993, this right was valued at approximately $852.2 million. Under the Contract, PSNH is unconditionally
obligated to pay NAEC's cost of service during this period whether or not Seabrook 1 is operating. NAEC's cost of service includes all of its Seabrook-related costs, including operation and maintenance expense, fuel expense, property tax expense, depreciation expense, and certain overhead and other costs.
The Contract establishes the value of the initial investment in Seabrook (Initial Investment) at $700 million and the initial investment in nuclear fuel at $0. NAEC is depreciating its Initial Investment on a straight line basis over the remaining term of Seabrook's full power operating license. Any subsequent additions to Seabrook 1 will be depreciated on a straight-line basis over the remaining term of the Contract at the time the additions are brought into service. The Contract provides that NAEC's return on its allowed investment in Seabrook 1 (its investment in working capital, fuel, capital additions after the date of commercial operation of Seabrook 1 and a portion of the Initial Investment) is calculated based on NAEC's actual capitalization from time to time over the term of the Contract, which includes its actual debt and preferred equity costs, and a common equity cost of 12.53 percent for the first ten years of the Contract, and thereafter at an equity rate of return to be fixed in a filing with FERC. The portion of the Initial Investment which is included in the allowed investment was 40 percent at the Acquisition Date and will increase by 15 percent in each of the following four years beginning May 15, 1993. Between the Reorganization Date and the Acquisition Date, PSNH, recorded $50.9 million of deferred return on its investment in Seabrook 1. In accordance with the Rate Agreement, PSNH transferred the $50.9 million of deferred return balance to NAEC along with the other Seabrook assets. NAEC has recorded the $50.9 million as part of utility plant. From the Acquisition Date through December 31, 1993, NAEC recorded an additional $85.4 million of deferred return. The deferred return on the excluded portion of the Initial Investment, including the $50.9 million, will be recovered with carrying charges by NAEC through the Contract beginning six months after the end of PSNH's Fixed Rate Period and will be fully recovered by May 15, 2001.
If Seabrook 1 is shut down prior to the expiration of the NRC operating license term, PSNH will be unconditionally required to pay NAEC termination costs for 39 years, less the period during which Seabrook 1 has operated. These costs are designed to reimburse NAEC for its share of Seabrook 1 shut-down and decommissioning costs and to pay NAEC a return of and on any undepreciated balance of its Initial Investment in the plant over the then-remaining term of the Contract, and the return of and on any capital additions to the plant made after the Acquisition Date over a period of five years after shut down (net of any tax benefits to NAEC attributable to such cancellation).
Contract payments charged to operating expense were $123 million, including $33 million return on investment, for the year ended December 31, 1993.
On February 15, 1994, NAEC acquired Vermont Electric Generation and Transmission Cooperative Inc.'s (VEG&T) 0.4 percent ownership interest of Seabrook for approximately $6.4 million. NAEC will sell the output from the Seabrook interest purchased from VEG&T on February 15, 1994 to PSNH under an agreement that has been approved by the FERC and is substantially similar to the Seabrook Power Contract between PSNH and NAEC that was effective on the Acquisition Date.
Future minimum payments, excluding executory costs, such as property taxes, state use taxes,insurance, and maintenance, under the terms of the Contract, as of December 31, 1993, are approximately:
Seabrook Power Contract
-----------------------
(Thousands of Dollars)
1994 . . . . . . . . . . . . . . . $ 63,200
1995 . . . . . . . . . . . . . . . 72,300
1996 . . . . . . . . . . . . . . . 81,200
1997 . . . . . . . . . . . . . . . 91,100
1998 . . . . . . . . . . . . . . . 169,700
After 1998 . . . . . . . . . . . . 1,509,700
----------
Future minimum payments. . . . . . 1,987,200
Less amount representing interest and
return on equity . . . . . . . . 1,135,000
----------
Present value of Seabrook Power
Contract
payments . . . . . . . . . . . . . $ 852,200
==========
<F3>
|
3. LEASES
PSNH has entered into lease agreements, for the use of substation equipment, data processing and office equipment, vehicles, and office space. The provisions of these lease agreements generally provide for renewal options. Operating lease rental payments charged to operating expense were $6,197,000 in 1993, $8,511,000 in 1992, and $6,875,000 in 1991.
Future minimum rental payments, excluding executory costs, such as property taxes, state use taxes, insurance, and maintenance, under long-term noncancelable leases, as of December 31, 1993, are approximately:
Operating Leases
----------------
(Thousands of Dollars)
1994 . . . . . . . . . . . . . . . . . . $ 7,700
1995 . . . . . . . . . . . . . . . . . . 7,100
1996 . . . . . . . . . . . . . . . . . . 6,100
1997 . . . . . . . . . . . . . . . . . . 5,200
1998 . . . . . . . . . . . . . . . . . . 4,100
After 1998 . . . . . . . . . . . . . . . 6,000
-------
Future minimum payments. . . . . . . . . $36,200
=======
<F4>
|
4. NUCLEAR DECOMMISSIONING
A 1992 decommissioning study concluded that complete and immediate dismantlement at retirement continues to be the most viable and economic method of decommissioning Millstone 3. A 1991 Seabrook decommissioning study also confirmed that complete and immediate dismantlement at retirement is the most viable and economic method of decommissioning Seabrook 1.
Decommissioning studies are reviewed and updated periodically to reflect changes in decommissioning requirements, technology, and inflation.
The estimated cost of decommissioning PSNH's ownership share of Millstone 3 and NAEC's 36.0 percent share of Seabrook 1, in year-end 1993 dollars, is $12.0 million and $131.7 million, respectively. PSNH's Millstone 3 decommissioning costs are accrued over the expected service life of the unit and are included in depreciation expense on its Statements of Income. Nuclear decommissioning related to PSNH's share of Millstone 3 amounted to $0.3 million in 1993 and $0.2 million in 1992. Nuclear decommissioning costs, as a cost of removal, are included in the accumulated provision for depreciation on PSNH's Balance Sheets.
PSNH makes payments to an independent decommissioning trust for its portion of the costs of decommissioning Millstone 3. Under the terms of the Rate Agreement, PSNH is obligated to pay NAEC's share of Seabrook's decommissioning costs, even if the unit is shut down prior to the expiration of its operating license. Accordingly, NAEC bills PSNH directly for its share of the costs of decommissioning Seabrook. PSNH records its Seabrook decommissioning costs as a component of purchased power expense on its Statement of Income. Under the Rate Agreement, PSNH's Seabrook decommissioning costs are recovered through base rates.
As of December 31, 1993, PSNH has collected, through rates, approximately $1.2 million toward the future decommissioning costs of its share of Millstone 3, which has been transferred to the external decommissioning trust. Earnings on the decommissioning trusts and financing fund increase the decommissioning trust balance and the accumulated reserve for decommissioning. At December 31, 1993, the balance in the company's accumulated reserve for decommissioning amounted to $1.5 million.
As of December 31, 1993, NAEC (including pre-Acquisition Date payments made by PSNH) has paid approximately $7.3 million, into Seabrook 1's decommissioning financing fund.
Changes in requirements or technology, or adoption of a decommissioning method other than immediate dismantlement, could change decommissioning cost estimates. PSNH attempts to recover sufficient amounts through its allowed rates to cover its expected decommissioning costs. Only the portion of currently estimated total decommissioning costs that has been accepted by regulatory agencies is reflected in rates of PSNH. Although allowances for decommissioning have increased significantly in recent years, ratepayers in future years will need to increase their payments to offset the effects of any insufficient rate recoveries in previous years.
PSNH, along with other New England utilities, has equity investments in the four Yankee companies. Each Yankee company owns a single nuclear generating unit. The estimated costs, in year-end 1993 dollars, of decommissioning PSNH's ownership share of CY and MY are $17.0 million and $16.2 million, respectively. The cost to decommission VY is currently being re-estimated. The cost of decommissioning PSNH's ownership share of VY is projected to range from $12 million to $14 million. As discussed in the following paragraph, YAEC's owners voted to permanently shut down the YAEC unit on February 26, 1992. Under the terms of the contracts with the companies, the shareholders-sponsors are responsible for their proportionate share of the operating costs of each unit, including decommissioning. The nuclear decommissioning costs of the Yankee companies are included as part of the cost of power by PSNH.
YAEC has begun decommissioning its nuclear facility. On June 1, 1992, YAEC filed a rate filing to obtain FERC authorization to collect the closing and decommissioning costs and to recover the remaining investment in the YAEC nuclear power plant over the remaining period of the plant's NRC operating license. The bulk of these costs has been agreed to by the YAEC joint owners and approved, as a settlement, by FERC. At December 31, 1993, the estimated remaining costs amounted to $345.0 million, of which PSNH's share was approximately $24.1 million. Management expects that PSNH will continue to be allowed to recover such FERC-approved costs from its customers. Accordingly, PSNH has recognized these costs as a regulatory asset, with a corresponding obligation, on its Balance Sheets. PSNH has a 7.0 percent equity investment, approximating $1.7 million, in YAEC. PSNH had relied on YAEC for less than one percent of its capacity.
<F5>
5. SHORT-TERM DEBT
The system companies have various credit lines totaling $485 million. PSNH has credit lines totaling $125 million available through a revolving-credit agreement with a group of 22 banks. PSNH may borrow funds on a short-term revolving basis using either fixed-rate or standby-loans. Fixed rates are set using competitive bidding. Standby-loan rates are based upon several alternative variable rates. PSNH is obligated to pay a facility fee of 0.25 percent per annum on the total commitment. At December 31, 1993, there were no borrowings under the agreement. The company intends to negotiate a two year extension of the $125 million revolving credit agreement, which is scheduled to mature on May 14, 1994.
Certain subsidiaries of NU, including PSNH, are members of the Northeast Utilities System Money Pool (Pool). The Pool provides a more efficient use of the cash resources of the system, and reduces outside short-term borrowings. NUSCO administers the Pool as agent for the member companies. Short-term borrowing needs of the member companies are first met with available funds of other member companies, including funds borrowed by NU parent. NU parent may lend to the Pool but may not borrow. Investing and borrowing subsidiaries receive or pay interest based on the average daily Federal Funds rate. Funds may be withdrawn from or repaid to the Pool at any time without prior notice. However, borrowings based on loans from NU parent bear interest at NU parent's cost and must be repaid based upon the terms of NU parent's original borrowing.
Maturities of PSNH's short-term debt obligations were for periods of three months or less.
The amount of short-term borrowings that may be incurred by PSNH is subject to periodic approval by the SEC under the 1935 Act. Under the SEC restrictions, PSNH was authorized, as of January 1, 1993, to incur short-term borrowings up to a maximum of $125 million.
<F6>
6. PREFERRED STOCK SUBJECT TO MANDATORY REDEMPTION
Details of preferred stock subject to mandatory redemption are:
December 31, Shares
1993 Outstanding
Redemption December 31, December 31,
Description Price 1993 1993 1992
- -----------------------------------------------------------------------------
(Thousands of Dollars)
10.60% Series A
of 1991. . . . . $25.00 5,000,000 $125,000 $125,000
======== ========
|
In case of default on dividends or sinking-fund payments, no payments may be made on any junior stock by way of dividends or otherwise (other than in shares of junior stock) so long as the default continues. If PSNH is in arrears in the payment of dividends on any outstanding shares of preferred stock, PSNH would be prohibited from redemption or purchase of less than all of the preferred stock outstanding. The Series A Preferred Stock is not subject to optional redemption by PSNH. It is subject to a sinking fund beginning on June 30, 1997, sufficient to retire annually 1,000,000 shares at $25 per share.
<F7>
7. LONG-TERM DEBT
Details of long-term debt outstanding are:
(Thousands of Dollars)
First Mortgage Bonds:
8 7/8% Series A due 1996. . . . . . . . . $172,500 $ 172,500
9.17% Series B due 1998. . . . . . . . . 170,000 170,000
-------- ----------
Total First Mortgage Bonds. . . . . . . . . . . 342,500 342,500
Term Loan/Notes:
Variable Rate due 1996. . . . . . . . . . . . . 235,000 329,000
|
Pollution Control Revenue Bonds:
7.65% Series A due 2021. . . . . . . . . 66,000 66,000
7.50% Series B due 2021. . . . . . . . . 108,985 108,985
7.65% Series C due 2021. . . . . . . . . 112,500 112,500
Adjustable Rate Series D due 2021 . . . . . . . 39,500 39,500
Adjustable Rate Series E due 2021 . . . . . . . 69,700 114,500
Adjustable Rate, Tax-Exempt, Series D due 2021. 75,000 75,000
Adjustable Rate,Tax-Exempt, Series E due 2021 . 44,800 -
Less: Amounts due within one year. . . . . . . 94,000 94,000
-------- ----------
Long-term debt, net . . . . . . . . . . . . . . $999,985 $1,093,985
======== ==========
|
Long-term debt maturities and cash sinking-fund requirements on debt outstanding at December 31, 1993 for the years 1994 through 1998 are approximately $94,000,000 in 1994 and 1995, $219,500,000 in 1996, $0 in 1997, and $170,000,000 in 1998. Also, there are annual renewal and replacement fund requirements equal to 2.25 percent of the average of net depreciable property owned by PSNH at the Reorganization Date, plus cumulative gross property additions thereafter. PSNH expects to meet its future fund requirements by certifying property additions. Any deficiency would need to be satisfied the deposit of cash or bonds.
Essentially, all utility plant of PSNH is subject to the liens of its first mortgage bond indenture. PSNH's two bank facilities, the Term Loan and Revolving Credit Facility have a second lien, junior to the lien of its first mortgage bond indenture, on all PSNH property located in New Hampshire. At December 31, 1993, the principal amount outstanding under the Term Loan was $235 million. At December 31, 1993, there were no borrowings under the Revolving Credit Facility.
The Series A and B First Mortgage Bonds are not redeemable prior to their maturity except in limited circumstances. The Pollution Control Revenue Bonds, except for Series D and E, are redeemable on or after May 1, 2001, at the option of the company with accrued interest and at specified premiums. Under current interest rate elections by PSNH, the Series D and E Pollution Control Revenue Bonds are redeemable, at par plus accrued interest at the end of each interest rate period. Future interest rate elections by PSNH could significantly defer or eliminate the availability of optional redemptions by PSNH and could affect costs as well.
PSNH has entered into interest rate cap agreements to reduce the potential impact of upward changes in interest rates on certain variable rate tax exempt pollution control revenue bonds and on a portion of its variable rate Term Loan. At December 31, 1993, $50 million and $100 million of PSNH's $235 million Term Loan was capped at 4.5 percent and 5 percent, respectively. $75 million of its taxable Pollution Control Revenue Bonds was capped at 4.5 percent. The total cost of interest rate caps for 1993 was approximately $836,000, the costs of which are amortized over the terms of the contracts, which are from one to three years. The fair market value of outstanding interest rate cap contracts as of December 31, 1993 is approximately $158,000.
Concurrent with the issuance of PSNH's Series A and B First Mortgage Bonds, PSNH entered into financing arrangements with the Industrial Development Authority of the state of New Hampshire (IDA). Pursuant to these arrangements, the IDA issued five series of Pollution Control Revenue Bonds (PCRBs) and loaned the proceeds to PSNH. At December 31, 1993, $516.5 million of the PCRBs were outstanding. PSNH's obligation to repay each series of PCRBs is secured by a series of First Mortgage Bonds that were issued under its indenture. Each such series of First Mortgage Bonds contains terms and provisions with respect to maturity, principal payment, interest rate and redemption that correspond to those of the applicable series of PCRBs; for financial reporting purposes, these bonds would not be considered outstanding unless PSNH fails to meet its obligation under the PCRBs.
<F8>
8. INCOME TAX EXPENSE
The components of federal and state income tax provisions are:
- -----------------------------------------------------------------------------
- ---------------------
Jan. 1, 1993 June 5, 1992 Jan. 1, 1992 May 16,
1991 Jan. 1, 1991
to to to to
to
For the Periods Dec. 31, 1993 Dec. 31, 1992 June 4, 1992 Dec. 31,
1991 May 15, 1991
- -----------------------------------------------------------------------------
- ---------------------
<F1>(Note 1) (Thousands of Dollars)
Current income taxes:
Federal . . . . . . . . . $ (937) $ 2,400 $ 415 $ -
$ -
State . . . . . . . . . . 1,183 - 79
60 20
-------- -------- ---------
- -------- ---------
Total current. . . . . 246 2,400 494
60 20
-------- -------- ---------
- -------- ---------
Deferred income taxes, net:
Federal . . . . . . . . . 47,407 23,086 8,703 25,342
111
State . . . . . . . . . . 3,131 - - -
-
-------- -------- ---------
- -------- ---------
Total deferred . . . . 50,538 23,086 8,703 25,342
111
-------- -------- ---------
- -------- ---------
Investment tax credits, net (565) (326) (341)
(498) (294)
-------- -------- ---------
- -------- ---------
Total income tax expense $50,219 $25,160 $ 8,856
$24,904 $ (163)
======== ======== =========
======== =========
The components of total income tax expense are classified as follows:
Income taxes charged to
operating expenses . . $73,263 $39,197 $16,449
$38,316 $(12,769)
Income taxes associated
with the deferred return
on Seabrook . . . . . . . - - 4,793
7,155 -
Income taxes associated
with allowance for funds used
during construction (AFUDC)
and the deferred return on
New Hampshire Electric
Cooperative (NHEC)
deferred costs. . . . . . - 217 428
98 111
Other income taxes - credit (23,044) (14,254) (12,814)
(20,665) 12,495
--------- -------- --------
- -------- ---------
Total income tax expense $50,219 $25,160 $ 8,856
$24,904 $ (163)
========= ======== ========
======= =========
|
Deferred income taxes are comprised of the tax effects of temporary differences
as follows:
- -----------------------------------------------------------------------------
- ------------------------
Jan. 1, 1993 June 5, 1992 Jan. 1, 1992 May 16,
1991 Jan. 1, 1991
to to to
to to
For the Periods Dec. 31, 1993 Dec. 31, 1992 June 4, 1992 Dec.
31, 1991 May 15, 1991
- -----------------------------------------------------------------------------
- ------------------------
<F1>(Note 1) (Thousands of Dollars)
Depreciation . . . . . . . .$ 4,549 $ 1,629 $12,333
$21,450 $17,289
Energy adjustment clauses. . 15,155 14,520 (1,359)
14,476 4,628
Deferred tax asset
associated with NOL. . . . 25,438 9,335 (2,317)
(17,149) (81,002)
Alternative minimum tax. . . 1,056 (2,441) (394)
- - -
Amortization of prepaid
deferred taxes . . . . . . 7,667 - -
- - -
Seabrook unsecured interest. - - -
- - 52,058
Deferred return on Seabrook. - - 4,793
7,155 -
Severance benefits . . . . . - 254 (1,020)
- - -
Other . . . .. . . . . . . . (3,327) (211) (3,333)
(590) 7,138
-------- -------- ---------
- -------- ---------
Deferred income taxes, net $50,538 $23,086 $ 8,703
$25,342 $ 111
======== ======== =========
======== =========
|
A reconciliation between income tax expense and the expected tax expense at the
applicable statutory
rates is as follows:
- -----------------------------------------------------------------------------
- ----------------------------
Jan. 1, 1993 June 5, 1992 Jan. 1, 1992 May
16, 1991 Jan. 1, 1991
to to to
to to
For the Periods Dec. 31, 1993 Dec. 31, 1992 June 4, 1992 Dec.
31, 1991 May 15, 1991
- -----------------------------------------------------------------------------
- ----------------------------
<F1>(Note 1) (Thousands of Dollars)
Expected
federal income
tax at 35 percent pretax
income for 1993 and 34
percent for 1992 and 1991. .$35,860 $18,550 $ 7,356
$26,383 $ (34,324)
Tax effect of differences:
Depreciation differences . 1,593 1,032 (8,314)
(12,455) 1,524
Amortization of Regulatory
Asset - Rate Agreement . . 23,765 17,624 12,477
18,294 -
Seabrook intercompany loss . (19,176) (11,903) -
- - -
Reorganization expenses. . . - 22 1,728
795 5,179
Deferred investment return . - - (3,832)
(5,231) -
Unused book NOL. . . . . . . - - -
- - 22,058
State tax, net of federal
benefit . . . . . . . . . 2,804 - -
- - -
Amortization of prepaid
deferred taxes . . . . . . 7,667 - -
- - -
Other, net . . . . . . . . . (2,294) (165) (559)
(2,882) 5,400
-------- -------- --------
- -------- -----------
Total income tax expense . . $50,219 $25,160 $ 8,856
$24,904 $ (163)
======== ======== ========
======== ===========
|
<F9>
9. PENSION BENEFITS
The company participates in a uniform noncontributory defined benefit retirement plan covering all regular system employees (the Plan). Benefits are based on years of service and employees' highest eligible compensation during five consecutive years of employment. Effective January 1993, PSNH's plan was merged into the NU system's uniform noncontributory defined benefit plan. The company's direct allocated portion of the system's pension cost, part of which was charged to utility plant, approximated $6,626,000 in 1993, $4,422,000 for the period January 1, 1992 to June 4, 1992 and $3,467,000 for the period June 5, 1992 to December 31, 1992 and $13,220,000 in 1991. The pension cost for June 5, 1992 to December 31, 1992 excludes employees of NHY, who are now employees of NAESCO. Pension costs for 1993 included approximately $3,359,000 related to work force reduction programs.
Currently, PSNH funds annually an amount at least equal to that which will satisfy the requirements of the Employee Retirement Income Security Act and the Internal Revenue Code. Pension costs are determined using market-related values of pension assets. Pension assets are invested primarily in domestic and international equity securities and bonds.
The components of net pension cost for PSNH are:
- -----------------------------------------------------------------------------
- ----------
Jan. 1, 1993 June 5, 1992 Jan. 1, 1992 Jan.
1, 1991
to to to to
For the Periods Dec. 31, 1993 Dec. 31, 1992 June 4, 1992 Dec.
31, 1991
- -----------------------------------------------------------------------------
- ----------
(Thousands of Dollars)
Service cost . . . . . . $ 7,539 $ 2,889 $ 3,850 $
8,382
Interest cost. . . . . . 11,180 6,810 6,200
12,771
Return on plan assets. . (19,308) (5,026) (4,561)
(45,157)
Net amortization . . . . 7,215 (1,206) (1,067)
37,224
-------- -------- --------
- --------
Net pension cost . . . . $ 6,626 $ 3,467 $ 4,422
$13,220
======== ======== ========
========
|
For calculating pension cost, the following assumptions were used:
- -------------------------------------------------------------------------------
Jan. 1, 1993 June 5, 1992 Jan. 1, 1992 Jan. 1, 1991
to to to to
For the Periods Dec. 31, 1993 Dec. 31, 1992 June 4, 1992 Dec. 31, 1991
- --------------------------------------------------------------------------------
Discount rate. . . . . 8.00% 8.00% 8.00% 8.00%
Expected long-term
rate of return . . . 8.50 9.00 9.00 8.50
Compensation/
progression rate . . . 5.00 6.00 6.00 6.00
- --------------------------------------------------------------------------------
|
The following table represents the Plan's funded status reconciled to the Balance Sheets:
- -----------------------------------------------------------------------
At December 31, 1993 1992
- -----------------------------------------------------------------------
(Thousands of Dollars)
Accumulated benefit obligation,
including $111,691,000 of vested
benefits at December 31, 1993 and
$112,507,000 of vested benefits at
December 31, 1992 . . . . . . . . . . $122,429 $113,485
======== ========
Projected benefit obligation (PBO). . $156,475 $175,891
Less: Market value of plan assets. . 145,536 166,456
--------- ---------
PBO in excess of plan assets. . . . . (10,939) (9,435)
Unrecognized transition amount. . . . 5,338 6,741
Unrecognized prior service costs. . . 4,890 4,870
Unrecognized net gain . . . . . . . . (31,179) (32,859)
--------- ---------
Accrued pension liability . . . . . . $(31,890) $(30,683)
========= =========
|
The following actuarial assumptions were used in calculating the Plan's year-end funded status:
- ----------------------------------------------------------------------- At December 31, 1993 1992 - ----------------------------------------------------------------------- Discount rate . . . . . . . . . . . . 7.75% 8.00% Compensation/progression rate . . . . 4.75 5.00 |
The discount rate for 1993 was determined by analyzing the interest rates, as of December 31, 1993, of long-term, high quality corporate debt securities having a duration comparable to a 13.8-year duration of the plan.
During 1993, NU's work force was reduced by approximately 7 percent through a work force reduction program that involved a voluntary early retirement program and involuntary terminations. PSNH's direct cost of the program, which approximated $4.9 million, included pension, severance, and other benefits.
<F10>
10. POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
The company provides certain health care benefits, primarily medical and
dental, and life insurance benefits through a benefit plan to retired
employees. These benefits are available for employees leaving the company
who are otherwise eligible to retire and have met specified service
requirements. Through December 31, 1992, the company recognized the cost of
these benefits as they were paid. In December 1990, the FASB issued SFAS
106. This new standard requires that the expected cost of postretirement
benefits, primarily health and life insurance benefits, must be charged to
expense during the years that eligible employees render service. Effective
January 1, 1993, the company adopted SFAS 106 on a prospective basis. Total
health care and life insurance costs, part of which was deferred or charged
to utility plant, approximated $9,106,000 in 1993, $3,290,000 in 1992, and
$2,783,000 in 1991.
On January 1, 1993, the accumulated postretirement benefit obligation (APBO)
represented the company's prior-service obligation upon the adoption of SFAS
106. As allowed by SFAS 106, the company is amortizing its APBO of
approximately $63 million over a 20-year period. For current employees and
certain retirees, the total SFAS 106 benefit is limited to two times the 1993
health care costs. The SFAS 106 obligation has been calculated based on this
assumption.
During 1993, the company began funding SFAS 106 postretirement costs through external trusts. The company is funding annually amounts that have been rate recovered and which also are tax-deductible under the Internal Revenue Code. The trust assets are invested primarily in equity securities and bonds.
The following table represents the plan's funded status reconciled to the Balance Sheet at December 31, 1993:
(Thousands of Dollars)
Accumulated postretirement benefit obligation of:
Retirees . . . . . . . . . . . . . . . . . . . . . . . $(51,832)
Fully eligible active employees. . . . . . . . . . . . (99)
Active employees not eligible to retire . . . . . . . (7,888)
---------
Total accumulated postretirement benefit obligation. . (59,819)
Less: Market value of plan assets . . . . . . . . . . 2,387
---------
Accumulated postretirement benefit
obligation in excess of plan assets . . . . . . . . . . (57,432)
Unrecognized transition amount. . . . . . . . . . . . . 55,870
Unrecognized net gain . . . . . . . . . . . . . . . . . (1,065)
---------
Accrued postretirement benefit liability. . . . . . . . $ (2,627)
=========
|
The components of health care and life insurance costs for the year ended December 31, 1993 are:
- -------------------------------------------------------------------------
(Thousands of Dollars)
Service cost . . . . . . . . . . . . . . $1,260
Interest cost. . . . . . . . . . . . . . 4,800
Net amortization . . . . . . . . . . . . 3,046
------
Net health care and life insurance costs $9,106
======
- -------------------------------------------------------------------------
|
For measurement purposes, an 11.1-percent annual rate of increase in the per capita cost of covered health care benefits was assumed for 1993; the rate was assumed to decrease to 5.4 percent for 2002. The effect of increasing the assumed health care cost trend rates by one percentage point in each year would increase the accumulated postretirement benefit obligation as of December 31, 1993 by $5.1 million and the aggregate of the service and interest cost components of net periodic postretirement benefit cost for the year then ended by $476,000.
The weighted-average discount rate used in determining the accumulated postretirement benefit obligation was 7.75 percent. The discount rate for 1993 was determined by analyzing the interest rates, as of December 31, 1993, of long-term, high-quality corporate debt securities having a duration comparable to that of the plan. The trust holding the plan assets is subject to federal income taxes at a 35 percent tax rate. The expected long-term rate of return on plan assets after estimated taxes was 5.00 percent for health assets and 8.50 percent for life assets.
PSNH is currently recovering SFAS 106 costs.
<F11>
11. COMMITMENTS AND CONTINGENCIES
CONSTRUCTION PROGRAM
The construction program is subject to periodic review and revision. Actual
construction expenditures may vary from estimates due to factors such as
revised load estimates, inflation, revised nuclear safety regulations,
delays, difficulties in the licensing process, the availability and cost of
capital, and the granting of timely and adequate rate relief by regulatory
commissions, as well as actions by other regulatory bodies.
PSNH currently forecasts construction expenditures (including AFUDC) of $172.5 million for the years 1994-1998, including $37.5 million for 1994. In addition, PSNH estimates that nuclear fuel requirements, for its share of Millstone 3, will be $5.7 million for the years 1994-1998, including $1.7 million for 1994.
PSNH RATE AGREEMENT
The Rate Agreement provided the financial basis for the Plan. The Rate
Agreement calls for seven successive 5.5 percent annual increases in PSNH's
base rates for its charges to retail customers (the Fixed-Rate Period). The
first four increases were put into effect on January 1, 1990, May 16, 1991,
June 1, 1992 and June 1, 1993, respectively. The remaining three increases
are scheduled to be put into effect annually beginning on June 1, 1994.
PSNH's base rates, as adjusted to reflect the 5.5 percent annual increases,
are intended to recover assumed increases in PSNH's costs and to provide
PSNH with a reasonable cumulative return on investment over the Fixed-Rate
Period. As discussed in <F1>Note 1, "Summary of Significant Accounting
Policies-Energy Adjustment Clause," the FPPAC protects PSNH form changes in
fuel and purchased power costs. Although the Rate Agreement provides an
unusually high degree of certainty as to PSNH's future retail rates, it also
entails a risk when sales are lower than anticipated or if PSNH should
experience unexpected increases in its costs other than those for fuel and
purchased power, since PSNH has agreed that it will not seek additional rate
relief during the Fixed-Rate Period, except in limited circumstances.
However, in order to provide protection from significant variations from the
costs assumed in base rates over the Fixed-Rate Period, the Rate Agreement
establishes a return on equity (ROE) collar to prevent PSNH from earning a
ROE in excess of an upper limit or below a lower limit. To date, PSNH's ROE
has been within the limits of the ROE collar.
In January 1994, the NHPUC approved a Memorandum of Understanding (the Memorandum) between PSNH, NAEC, Northeast Utilities Service Company, and the Attorney General of the state of New Hampshire relating to certain issues which had arisen under the Rate Agreement. The Memorandum addressed, among other things, the tax legislation in New Hampshire, accounting treatments resulting from adoption of SFAS 106 and SFAS 109, and recovery for certain aspects of PSNH's settlement with the VEG&T, including the purchase by NAEC of VEG&T's 0.4 percent share of Seabrook. The Memorandum provides for the establishment of a regulatory liability attributable to significant NOL carryforwards and establishes that such liability should be amortized over a six-year period beginning on May 1, 1993.
ENVIRONMENTAL MATTERS
PSNH is subject to regulation by federal, state, and local authorities with
respect to air and water quality, handling and the disposal of toxic
substances and hazardous and solid wastes, and the handling and use of
chemical products. PSNH has an active environmental auditing program to
prevent, detect, and remedy noncompliance with environmental laws or
regulations and believes that it is in substantial compliance with current
environmental laws and regulations. Changing environmental requirements
could hinder the construction of new fossil-fuel generating units,
transmission and distribution lines, substations, and other facilities. The
cumulative long-term, economic cost impact of increasingly stringent
environmental requirements cannot be estimated. Changing environmental
requirements could also require extensive and costly modifications to PSNH's
existing hydro, nuclear, and fossil-fuel generating units, and transmission
and distribution systems, and could raise operating costs significantly. As
a result, PSNH may incur significant additional environmental costs, greater
than amounts included in cost of removal and other reserves, in connection
with the generation and transmission of electricity and the storage,
transportation, and disposal of by-products and waste. PSNH may also
encounter significantly increased costs to remedy the environmental effects
of prior waste handling and disposal activities.
In most cases, the extent of additional future environmental cleanup costs is not reasonably estimable due to factors such as the unknown magnitude of possible contamination, the appropriate remediation method, the possible effects of future legislation and regulation, the possible effects of technological changes related to future cleanup, and the difficulty of determining future liability, if any, for the cleanup of sites at which PSNH may be determined to be legally liable by federal or state environmental agencies. In addition, PSNH cannot estimate the potential liability for future claims that may be brought against it by private parties. However, considering known facts and existing laws and regulatory practices, management does not believe that such matters will have a material adverse effect on PSNH's financial position or future results of operations.
NUCLEAR INSURANCE CONTINGENCIES
The Price-Anderson Act currently limits public liability from a single
incident at a nuclear power plant to $9.4 billion. The first $200 million of
liability would be provided by purchasing the maximum amount of commercially
available insurance. Additional coverage of up to a total of $8.8 billion
would be provided by an assessment of $75.5 million per incident, levied on
each of the 116 nuclear units that are currently subject to the Secondary
Financial Protection Program in the United States, subject to a maximum
assessment of $10 million per incident per nuclear unit in any year. In
addition, if the sum of all public liability claims and legal costs arising
from any nuclear incident exceeds the maximum amount of financial protection,
each reactor operator can be assessed an additional 5 percent, up to $3.8
million, or $437.9 million in total, for all 116 nuclear units. The
maximum assessment is to be adjusted at least every five years to reflect
inflationary changes. Under the terms of the Contract with NAEC, PSNH would
be obligated to pay for any assessment charged to NAEC as a "cost of service." At December 31, 1993, based on PSNH's ownership interests in Millstone 3, and NAEC's ownership interests in Seabrook 1, PSNH's maximum liability would be $30.4 million per incident. In addition, through PSNH's purchased power contracts with the four Yankee regional nuclear generating companies, PSNH would be responsible for up to an additional $16.7 million per incident. These payments for PSNH's ownership interest in nuclear generating facilities and costs resulting from the Contract with NAEC would be limited to a maximum of $5.9 million per incident per year.
Insurance has been purchased from Nuclear Electric Insurance Limited (NEIL) to cover (1) certain extra costs incurred in obtaining replacement power during prolonged accidental outages with respect to PSNH's Contract with NAEC; and (2) the cost of repair, replacement, or decontamination or premature decommissioning of utility property resulting from insured occurrences with respect to PSNH's ownership interests in Millstone 3, CY, MY, and VY; and NAEC's ownership interest in Seabrook. All companies insured with NEIL are subject to retroactive assessments if losses exceed the accumulated funds available to NEIL. The maximum potential assessments against PSNH (including costs resulting from PSNH's Contract with NAEC) with respect to losses arising during current policy years are approximately $1.9 million under the replacement power policies and $1.9 million under the property damage, decontamination, and decommissioning policies. Although PSNH has purchased the limits of coverage currently available from the conventional nuclear insurance pools, the cost of a nuclear incident could exceed available insurance proceeds.
Insurance has been purchased from American Nuclear Insurers/Mutual Atomic Energy Liability Underwriters, aggregating $200 million on an industry basis for coverage of worker claims. All companies insured under this coverage are subject to retrospective assessments of $3.2 million per reactor. The maximum potential assessments against PSNH (including costs resulting from PSNH's Contract with NAEC) with respect to losses arising during the current policy period are approximately $1.9 million.
FINANCING ARRANGEMENTS FOR THE REGIONAL NUCLEAR GENERATING COMPANIES PSNH believes that the regional nuclear generating companies may require additional external financing in the next several years for construction expenditures, nuclear fuel, possible refinancings, and other purposes. Although the ways in which each regional nuclear generating company will attempt to finance these expenditures have not been determined, PSNH may be asked to direct or indirect financial support for one or more of these companies.
PURCHASED POWER ARRANGEMENTS
PSNH purchases a portion of its electricity requirements pursuant to
long-term contracts with the Yankee companies. Under the terms of its
agreements, the company pays its ownership share (or entitlement share) of
generating costs, which include depreciation, operation and maintenance
expenses, the estimated cost of decommissioning, and a return on invested
capital. These costs are recorded as purchased power expense and recovered
through the company's rates. The total cost of purchases under these
contracts for the units that are operating amounted to $26.5 million in 1993,
$24.8 million in 1992, and $23.9 million in 1991. See <F1>Note 1, "Summary
Of Significant Accounting Policies-Investments and Jointly Owned Electric
Utility Plant" and <F4>Note 4, "Nuclear Decommissioning" for more information
on the Yankee companies.
PSNH has entered into various arrangements for the purchase of capacity and energy from nonutility generators. Some of these arrangements generally have terms from 20 to 30 years, and require the
company to purchase the energy at specified prices or formula rates. For the 12 months ended December 31, 1993, 14 percent of NU system load requirements was met by cogenerators and small power producers. The total cost of the company's purchases under these arrangements amounted to $133.4 million in 1993, $92.1 million in 1992, and $105.7 million in 1991. These costs are eventually recovered through the company's rates.
In an effort to control cost and price increases from nonutility generators, PSNH is in the process of attempting to renegotiate new rate orders with 13 nonutility generators. Settlement agreements have been reached with certain nonutility generators and have been filed with the NHPUC for approval. Negotiations continue with the remaining nonutility generators.
PSNH entered into a buy-back agreement to purchase the capacity and energy of the New Hampshire Electric Cooperative, Inc. (NHEC) and to pay all of NHEC's Seabrook costs for a ten-year period which began July 1, 1990. The total cost of purchases under this agreement was $14.4 million in 1993, $13.8 million in 1992, and $11.6 million in 1991. Part of these costs is collected currently through the FPPAC and part is deferred for future collection in accordance with the Rate Agreement. In connection with the agreement, NHEC agreed to continue as a firm-requirements customer of PSNH for 15 years.
The estimated annual cost of PSNH's significant purchased power arrangements is provided below:
- ----------------------------------------------------------------------------
1994 1995 1996 1997 1998
---- ---- ---- ---- ----
(Millions of Dollars)
Yankee companies. . $ 26.5 $ 29.7 $ 32.2 $ 29.4 $ 34.0
Nonutility
generators. . . . 142.7 145.4 148.9 152.5 156.1
NHEC. . . . . . . . 14.6 15.2 16.2 24.4 32.4
|
HYDRO-QUEBEC
Along with other New England utilities, PSNH entered into agreements to
support transmission and terminal facilities to import electricity from the
Hydro-Quebec system in Canada. PSNH is obligated to pay, over a 30-year
period, its proportionate share of the annual operation, maintenance, and
capital costs of these facilities, which are currently forecast to be $53.8
million for the years 1994-1998, including $11.6 million for 1994.
PROPERTY TAXES
PSNH and CY have significant court appeals pending for property tax
assessments in the towns of Bow, New Hampshire, and Haddam, Connecticut,
respectively, concerning production plant. In each case, the central issue
is the fair market value of utility property. The company believes that
properly derived assessments that recognize the effect of rate regulation
will result in fair market values that approximate net book cost. This is
the assessment level that taxing authorities are predominantly using
throughout Connecticut, Massachusetts, and some of New Hampshire. However,
towns such as Bow and Haddam advocate a method that approximates reproduction
cost. The company estimates that, for the assessments in the towns where the
appeals are pending, the change to a reproduction cost methodology could
result in property tax valuations approximately three times greater than
values approximating net book cost. Although PSNH and CY are currently
paying property taxes based on the
higher assessments, to date, the higher assessments have not had a material adverse effect on CY or the company.
The company believes that assessment levels that approximate net book cost accurately reflect the fair market value of regulated utility property. However, because of uncertainties associated with the court appeals and the potential impact of adverse court decisions on property tax assessment policy in New Hampshire and Connecticut, the company cannot estimate the potential effects of adverse court decisions on future results of operations or financial condition. However, the company believes that, based upon past regulatory practices, it would be allowed to recover any increased property tax assessments prospectively beginning at the time new rates are established.
DEFERRED RECEIVABLE FROM AFFILIATED COMPANY
At the time PSNH emerged from bankruptcy on May 16, 1991, in accordance with
the phase-in under the Rate Agreement, it began accruing a deferred return on
a portion of its Seabrook investment. From May 16, 1991 to the Acquisition
Date, PSNH accrued a deferred return of $50.9 million. On the Acquisition
Date, PSNH sold the $50.9 million deferred return to NAEC as part of the
Seabrook-related assets.
At the time PSNH transferred the deferred return to NAEC, it realized, for income tax purposes, a gain that is deferred under the consolidated income tax rules. This gain will be restored for income tax purposes when the deferred return of $50.9 million, and the associated income taxes of $32.9 million, are collected by NAEC through the Contract. When NAEC recovers the $32.9 million in years eight through ten of the Rate Agreement, it is obligated to make corresponding payments to PSNH.
On the Acquisition Date, PSNH recorded the $32.9 million of income taxes associated with the deferred return as a deferred receivable from NAEC, with a corresponding entry to deferred revenue, on its Balance Sheet. In 1993, due to changes in tax rates, this amount was adjusted to $33.3 million.
<F12>
12. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used to estimate the fair value of each of the following financial instruments:
Cash, special deposits and nuclear decommissioning trusts: The carrying amounts approximate fair value.
Preferred stock and long-term debt: The fair value of PSNH's securities is based upon the quoted market price for those issues or similar issues. Adjustable rate securities are assumed to have a fair value equal to their carrying value.
The carrying amounts of PSNH's financial instruments and the estimated fair values are as follows:
- ----------------------------------------------------------------------------
At December 31, 1993 Carrying Amount Fair Value
- ----------------------------------------------------------------------------
(Thousands of Dollars)
Preferred stock subject to
mandatory redemption . . . . . . $125,000 $139,375
Long-term debt -
First Mortgage Bonds . . . . . . 342,500 359,878
Other long-term debt . . . . . . 751,485 783,389
|
- ----------------------------------------------------------------------------
At December 31, 1992 Carrying Amount Fair Value
- ----------------------------------------------------------------------------
(Thousands of Dollars)
Preferred stock subject to
mandatory redemption . . . . . . $125,000 $140,625
Long-term debt -
First Mortgage Bonds. . . . . . . 342,500 385,747
Other long-term debt. . . . . . . 845,485 861,297
|
The fair values shown above have been reported to meet disclosure requirements and do not purport to represent the amounts that those obligations would be settled at.
In May 1993, the FASB issued Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities (SFAS 115)." SFAS 115 requires companies to disclose the classification of investments in debt or equity securities based on management's intent and ability to hold the security. SFAS 115 also requires disclosure of the aggregate fair value, gross unrealized holding gains, gross unrealized holding losses and amortized cost basis by major security type. Effective January 1, 1994, PSNH will adopt SFAS 115 on a prospective basis. PSNH anticipates that the adoption of SFAS 115 will not have a material impact on future results of operations or financial position.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors
of Public Service Company of New Hampshire:
We have audited the accompanying balance sheets of Public Service Company of New Hampshire (a New Hampshire corporation and a wholly owned subsidiary of Northeast Utilities) as of December 31, 1993 and 1992, and the related statements of income, common equity and cash flows for the year ended December 31, 1993 and the periods from January 1, 1992 to June 4, 1992 and June 5, 1992 to December 31, 1992. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Public Service Company of New Hampshire as of December 31, 1993 and 1992, and the results of its operations and cash flows for the year ended December 31, 1993 and the periods from January 1, 1992 to June 4, 1992 and June 5, 1992 to December 31, 1992, in conformity with generally accepted accounting principles.
As discussed in <F1>Note 1 to the financial statements, "Summary of Significant Accounting Policies - Accounting Changes," effective January 1, 1993, Public Service Company of New Hampshire changed its methods of accounting for income taxes and postretirement benefits other than pensions.
/S/ ARTHUR ANDERSEN & CO.
ARTHUR ANDERSEN & CO.
Hartford, Connecticut
February 18, 1994
|
INDEPENDENT AUDITOR'S REPORT
The Board of Directors
Public Service Company of New Hampshire
We have audited the balance sheet and statement of capitalization of Public Service Company of New Hampshire as of December 31, 1991 (not presented herein), and the related statements of income, cash flows and common stock equity for the periods January 1, 1991 to May 15, 1991, and May 16, 1991 to December 31, 1991. These financial statements are the responsibility of management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Public Service Company of New Hampshire at December 31, 1991 and the results of its operations and its cash flows for the periods January 1, 1991 to May 15, 1991 and May 16, 1991 to December 31, 1991.
/S/ KPMG Peat Marwick
KPMG Peat Marwick
Boston, Massachusetts
February 7, 1992
|
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This section contains management's assessment of Public Service Company of New Hampshire's (the company or PSNH) financial condition and the principal factors having an impact on the results of operations. The company is a wholly-owned subsidiary of Northeast Utilities (NU). This discussion should be read in conjunction with the company's financial statements and footnotes.
FINANCIAL CONDITION
Overview
On June 5, 1992 (the Acquisition Date), NU and PSNH completed an affiliation, which represented the second step of a two-step bankruptcy court approved plan (the Plan) that was devised in 1989 to return the then-bankrupt company to financial health. The first step took place on May 16, 1991 (the Reorganization Date) when PSNH emerged from bankruptcy as a stand-alone company, subject to a Merger Agreement (the Merger Agreement) with NU's subsidiaries Northeast Utilities Service Company and NU Acquisition Corporation (NUAC).
The final step in the affiliation plan occurred on June 5, 1992, when NUAC was merged into the company pursuant to the Merger Agreement and the company became a wholly owned operating subsidiary of NU. In a related transaction, the company's 35.6 percent share of the Seabrook 1 nuclear power plant (Seabrook) and other Seabrook-related assets were transferred to North Atlantic Energy Corporation (NAEC), another wholly owned subsidiary of NU. On June 29, 1992, PSNH's New Hampshire Yankee division was dissolved and North Atlantic Energy Service Corporation, a wholly owned subsidiary of NU, received approval to manage Seabrook as agent for the Seabrook joint owners.
At the Acquisition Date, the company and NAEC entered into the Seabrook Power Contract, under which the company is obligated to buy from NAEC, and NAEC is obligated to sell to the company, all of NAEC's capacity and output of Seabrook for a period equal to the length of the Nuclear Regulatory Commission full-power operating license for Seabrook (through 2026). Under the contract, the company is unconditionally obligated to pay NAEC's "cost of service" during the period whether or not Seabrook is operating and without regard to the cost of alternative sources of power. In addition, the company will be obligated to pay decommissioning and project cancellation costs after the termination of the operating license.
NAEC's "cost of service" includes all of its prudently incurred Seabrook-related costs, including operation and maintenance expense, fuel expense, property tax expense, depreciation expense, certain overhead and other costs, and a phased-in return on its Seabrook investment. The Seabrook Power Contract established the initial recoverable investment at Seabrook at $700 million (Initial Investment), plus any capital additions, net of depreciation.
The company's net income for the 12 months ended December 31, 1993 was $52.2 million. The 1993 net income reflects a one-time $3 million charge to income in the third quarter of 1993 for the costs of an employee reduction program. The company's workforce was reduced by about 18 percent in 1993 through an employee reduction program that involved early retirements and involuntary terminations.
Retail sales for 1993 increased 1.4 percent as compared to 1992, as a result of warmer summer weather which offset the effects of a sluggish New Hampshire economy. The company expects retail sales growth of about 1 percent in 1994, based on some expected improvement in the economy.
In 1994, the company will continue to face challenges associated with a lagging economy and competition. Competition within the electric utility industry is increasing. In response, the company has developed, and is continuing to develop, a number of initiatives to retain and continue to serve its existing customers and to expand its retail customer base. These initiatives are aimed at keeping customers from either leaving the company's retail service territory or replacing the company's electric service with alternative energy sources.
The cost of doing business, including the price of electricity, is higher in the Northeast than in most other parts of the country. Relatively high energy and other costs of doing business in New England also contribute to competitive disadvantages for many industrial and commercial customers of PSNH. These disadvantages have aggravated the pressures on business customers in the current weakened regional economy. The company is working with the New Hampshire Office of Business and Industrial Development to package development incentives for a variety of retail and wholesale customers. These economic development packages may include electric rate discounts, as well as technical support, and energy conservation services. Targeted rate reductions in effect at the end of 1993 to a limited group of large customers were successful in preserving company revenues of approximately $15 million. The amount of discounts provided to customers may increase in the future as the company intensifies its efforts to retain existing customers and gain new customers.
The ability of retail customers to select an electricity supplier and then force the local electric utility to transmit the power to the customer's site is known as "retail wheeling". While wholesale wheeling is mandated by the Energy Policy Act of 1992, under limited circumstances, retail wheeling is not required in the company's jurisdictions. In New Hampshire, there have been no legislative proposals on retail wheeling to date.
NU management has taken steps to make the NU system companies, including PSNH, more competitive and profitable in the changing utility environment. A systemwide emphasis on improved customer service is a central focus of the reorganization of NU that became effective on January 1, 1994. The reorganization entails realignment of the system into two new core business groups. The first core business group is devoted to energy resource acquisition and wholesale marketing and focuses on nuclear, fossil, and hydroelectric generation, wholesale power marketing, and new business development. The second core business group oversees all customer service, transmission and distribution operations, and retail marketing in New Hampshire, Connecticut, and Massachusetts. These two core business groups are served by various support functions.
In connection with NU's reorganization, the system companies have begun a corporate reengineering process which should help PSNH to identify opportunities to become more competitive while improving customer service and maintaining excellent operational performance. NU has aggressive cost-reduction targets over the next three years, which should help enable PSNH to remain competitive.
To date, PSNH has not been materially affected by competition and it does not foresee substantial adverse effects in the near future unless the current regulatory structure is substantially altered. The company believes the steps it is taking will have significant, positive effects in the next few years. In addition, PSNH benefits from a diverse retail base. The company has no significant dependence on any one customer or industry. The NU system's extensive transmission facilities and diversified generating capacity are all strong positive factors in the regional wholesale power market. NU serves about 30 percent of New England's electric needs and is one of the 20 largest electric utility systems in the country.
Achieving measurable improvements in earnings in 1994 will depend in part on the success of the company's wholesale power marketing, customer retention and reengineering efforts. These efforts should help increase earnings and improve the company's competitive position.
Rate Matters
Deferred charges at December 31, 1993 were $1.0 billion, which includes $769.5 million for the regulatory asset under the rate agreement with the state of New Hampshire and $122.5 million for costs deferred under PSNH's energy adjustment clause. The regulatory asset was established under PSNH's reorganization plan. The Rate Agreement provides for the recovery of $425 million of the regulatory asset over the seven-year period ending May 1998 with the remaining amount to be amortized over a 20 year period. Management expects that substantially all of the deferred charges will be recovered through future rates.
The company adopted Statement of Financial Accounting Standards (SFAS) No. 109, Accounting for Income Taxes, in 1993. Under SFAS No. 109, the company reflected a regulatory asset of $54.3 million and a deferred tax liability for the cumulative amount of income taxes associated with timing differences for which deferred taxes had not been provided but are expected to be recovered from customers in the future. The adoption of SFAS No. 109 has not had a material effect on results of operations.
The company also adopted SFAS No. 106, Employers' Accounting for Postretirement Benefits Other Than Pensions, in 1993. Adopting SFAS No. 106 has not had a material impact on financial condition or results of operations because the company is currently recovering these costs from customers.
See the "Notes To Financial Statements" for further details on deferred charges and recently adopted accounting standards.
PSNH's rates are determined under a rate agreement executed by the Governor and the Attorney General of New Hampshire in 1989 and subsequently approved by the New Hampshire Public Utilities Commission (NHPUC) (the Rate Agreement). The Rate Agreement sets out a comprehensive plan of rates for PSNH, providing for seven base rate increases of 5.5 percent per year (the fixed-rate period), and a comprehensive fuel and purchased power adjustment clause (FPPAC). The fourth base rate increase took place on June 1, 1993. The remaining three base rate increases are scheduled to be put into effect annually on each June 1.
The FPPAC recovers or refunds the difference between actual prudent energy and purchased power costs, including the costs incurred under the Seabrook Power Contract and the costs included in base rates. The FPPAC is reviewed by the NHPUC every six months and adjusted to reflect actual fuel and purchased power costs and to anticipate expenditures for the next six-month period.
In June 1993, PSNH's base rates increased by 6.2 percent. The increase above the 5.5 percent under the Rate Agreement reflected a temporary increase to recover the increased costs associated with recently enacted tax legislation. Concurrently, the FPPAC rate was lowered resulting in a net average rate increase of 4.5 percent.
In November 1993, the NHPUC approved a 1.8 percent increase in PSNH's average retail rates effective on December 1, 1993 for an increased FPPAC rate. The increase was attributed primarily to the anticipated costs of a refueling outage at Seabrook scheduled to begin in March 1994. To mitigate the rate increase the NHPUC approved the collection of the refueling outage costs over eighteen months.
In January 1994, the NHPUC approved a Memorandum of Understanding between PSNH, NAEC, Northeast Utilities Service Company and the Attorney General of the State of New Hampshire relating to certain issues which had arisen under the Rate Agreement (the Global Settlement). The Global Settlement addressed changes in tax legislation in New Hampshire, accounting treatments resulting from adoption of SFAS No. 106 and SFAS No. 109 and recovery for certain aspects of PSNH's settlement with the Vermont Electric Generation and Transmission Cooperative, Inc. (VEG&T), including the purchase by NAEC of VEG&T's approximately 0.4 percent share of Seabrook among other results. NAEC will sell the output from the Seabrook interest purchased from VEG&T to PSNH under an agreement that is substantially similar to the Seabrook Power Contract. The Global
Settlement as approved allowed the accelerated recognition of tax benefits which will result in moderate increases in PSNH's earnings in the next several years beginning in 1993.
The costs associated with purchases from certain small-power producers (SPPs) over the level assumed in the Rate Agreement are deferred and recovered over ten-year periods through the FPPAC. At December 31, 1993, SPP deferrals are approximately $107.6 million. A majority of these purchases is under long-term arrangements (20-30 years) at prices significantly higher than PSNH's current or projected avoided costs. PSNH is attempting to renegotiate these arrangements and must report to the NHPUC on the results of the negotiations.
In January 1994, PSNH filed agreements reached with certain SPPs with the NHPUC which call for PSNH to pay the SPPs a total of $91.8 million. In return PSNH would no longer be obligated to buy power from these SPPs and the SPPs are barred from attempting to provide service to any customers now on the PSNH system or on the entire NU system. If approved by the NHPUC, the agreements will provide benefits to customers over the terms of the arrangements. Management expects to recover any payments from its customers. The NHPUC will be examining the prudence of PSNH's efforts and will consider the implementation of temporary rates for the SPPs that have not settled with PSNH.
As prescribed by the Rate Agreement, NAEC is phasing in its $700 million initial investment in Seabrook. As of December 31, 1993, NAEC has included in rates $385 million of its Seabrook investment. The remaining investment ($315 million) will be phased into rates over the next three years beginning May 15, 1994. The deferred return associated with the amount of investment that has not been included in rates is $136.3 million through December 31, 1993. This amount and the additional deferred amounts associated with the remaining phase-in will be billed to PSNH and recovered through the Seabrook Power Contract over the period 1997 through 2001.
Environmental Matters
The NU system devotes substantial resources to identify and then to meet the multitude of environmental requirements it faces. PSNH has active auditing programs addressing a variety of different regulatory requirements, including an environmental auditing program to detect and remedy noncompliance with environmental laws or regulations.
PSNH is potentially liable for environmental cleanup costs at a number of sites both inside and outside of its service territory. To date the future estimated environmental remediation costs for the sites, which the company expects to bear legal liability have not been material with respect to the earnings or financial position of the company. The extent of additional future environmental cleanup costs is not estimable due to factors such as the unknown magnitude of possible contamination and changes in existing laws and regulatory practices.
The company expects that the implementation of Phase 1 of the 1990 Clean Air Act Amendments will require only minimal emissions reductions for PSNH. The company has more exposure for stringent emission limits for nitrogen oxides within the next five years. The costs for meeting Phase II requirements cannot be estimated at this time because the emission limits have not been determined.
The estimated cost of decommissioning PSNH's share of Millstone 3 and NAEC's share of Seabrook is approximately $12 million and $131.7 million, respectively, in year-end 1993 dollars. Under the terms of the Rate Agreement, the company is obligated to pay NAEC's share of Seabrook's decommissioning costs, even if the unit is shut down prior to the expiration of its operating license. In addition, the company's estimated cost to decommission its share of the regional nuclear generating units is estimated to be approximately $46 million. These costs are being recovered and recognized over the lives of the units. Yankee Atomic Electric Company (YAEC) has begun decommissioning its nuclear facility. PSNH's estimated obligation to YAEC has been recorded on the Balance Sheets. Management expects that the company will continue to be allowed to recover these costs.
See the "Notes to Financial Statements" for further information regarding nuclear decommissioning and other environmental matters.
Seabrook Performance
The Seabrook plant operated at 89.8 percent of capacity for the year ended December 31, 1993 compared with 77.9 percent in 1992 and a national average of 70.6 percent for 1993. Seabrook began commercial operation on June 30, 1990. The unit was shut down on September 7, 1992, for refueling and maintenance and returned to service on November 13, 1992. The next refueling and maintenance outage is scheduled for March 1994.
Liquidity And Capital Resources
Cash flows from operations provided the primary source of funds for the period ended December 31, 1993, while the reacquisition and retirement of long-term debt, repayment of short-term debt, and investment in utility plant were the primary uses of funds.
As a result of the transactions established by the Plan, the company has a more leveraged capital structure than most other investor-owned public utilities and is required to make substantial interest payments. The company's indebtedness under the Term Loan, Revolving Credit Facility, and some of the company's pollution control revenue bonds bear interest at floating rates to be set periodically, causing the company to be sensitive to prevailing interest rates. The company has entered into interest rate cap agreements to reduce the potential impact of upward changes in interest rates on a portion of its variable rate long-term debt. To take advantage of favor able market conditions during 1993, the company refinanced $45 million of Pollution Control Bonds. The company expects to refinance a substantial portion of its Series A and B bonds when they mature in 1996 and 1998, respectively. In addition, the company's Term Loan must be repaid in 16 quarterly installments of $23.5 million that commenced in August 1992. PSNH's Series A preferred stock has an annual sinking fund of $25 million beginning in 1997.
The company's construction program expenditures, including allowance for funds used during construction (AFUDC), for the period 1994 through 1998 are estimated to be approximately $172.5 million, including $37.5 million for 1994. The construction program's main focus is maintaining and upgrading the existing transmission and distribution system, and nuclear and fossil-generating facilities. The company does not foresee the need for new major generating facilities until at least the year 2007.
Management believes that, as a result of the annual rate increases provided for by the Rate Agreement and the FPPAC, cash flow from operations should be sufficient to cover its cash requirements. The company expects to meet cash requirements not covered by cash from operations through borrowings under the Revolving Credit Facility and/or the NU system Money Pool. The Revolving Credit Facility's final maturity is May 14, 1994. At December 31, 1993, there were no borrowings under the Revolving Credit Facility and $2.5 million in borrowings outstanding under the Money Pool. The company may need to issue new debt in 1994 to finance a buyout of some of its arrangements with the SPPs.
See the "Notes to Financial Statements" for further information regarding the Revolving Credit Facility and the Money Pool.
Results of Operations
PSNH's results of operations for the 12 months ended December 31, 1993 and for the period June 5, 1992 through December 31, 1992 reflect the results after the acquisition. PSNH's results of operations for the period January 1, 1992 to June 4,1992 and May 16, 1991 to December 31, 1991 reflect the results of the reorganized
company. Prior to May 16, 1991, PSNH was in bankruptcy. The results for each of these periods are not comparable because of the significant impacts on the company of the acquisition and reorganization.
Operating Revenues
Operating revenues for the year ended December 31, 1993 decreased $9.9 million, compared to the same period in 1992, primarily due to lower short-term power sales to other utilities as a result of the elimination, effective with the acquisition, of sales to NU, and the one-time impact in 1992 of $15.8 million of revenues released from escrow at the acquisition date. These decreases were partially offset by increases under the Rate Agreement and FPPAC. The third and fourth steps of the Rate Agreement were effective June 1, 1992 and 1993. Retail sales increased 1.4 percent in 1993 over 1992 sales levels.
Operating revenues for the year ended December 31, 1992 increased $88.2 million, compared to the same period in 1991, primarily due to increases under the Rate Agreement and FPPAC and increased short-term power sales. Operating revenues for the year ended December 31, 1992, include $125.4 million in short-term sales, of which $96.0 million was sold to NU compared to $108.2 million, of which $97.0 million was sold to NU in 1991. In addition, retail sales increased approximately 2 percent. Operating revenues for the period June 5, 1992 to December 31, 1992, also include the one-time impact of $15.8 million of revenues released from escrow.
Fuel, purchased and net interchange power expense decreased $21.1 million for the year ended December 31, 1993, compared to the same period in 1992, primarily due to the timing in the recovery of fuel expenses under the FPPAC.
The payments made by PSNH to NAEC under the Seabrook Power Contract (excluding fuel expense) are reflected as purchased power capacity costs and are included in other operation expenses. The year ended December 31, 1993, and the period June 5, 1992 to December 31, 1992, include $115.0 million and $76.0 million, respectively, of costs associated with the "cost of service" under the Seabrook Power Contract. Maintenance, depreciation, and taxes other than income taxes for these periods do not reflect any Seabrook costs as a result of the transfer of the company's investment in Seabrook to NAEC and the inclusion of such costs in the Seabrook Power Contract.
Amortization of regulatory assets, net decreased $20 million for the year ended December 31, 1993 as compared to the same period in 1992 due to the amortization of the regulatory liability recognized from the PSNH Global Settlement. Approximately $128 million of pre-acquisition losses are being amortized over six years.
The company has not recorded a deferred Seabrook return after June 4, 1992 because the company's investment in Seabrook was transferred to NAEC at the Acquisition Date. Prior to the transfer of Seabrook to NAEC, a deferred return was calculated on the portion of the Seabrook investment not reflected in rate base in accordance with the Rate Agreement.
Bankruptcy-related expenses for the period prior to June 5, 1992, represent costs associated with PSNH's bankruptcy. In 1988, PSNH filed a petition for reorganization under Chapter 11 of the Bankruptcy Code.
The gain on generating projects of $6.5 million for the period prior to June 5, 1992, represents a first quarter 1992 adjustment related to the settlement of a Seabrook contractor dispute and a Seabrook property tax abatement.
Interest on long-term debt and other interest are lower for the year ended December 31, 1993, as compared to the same period in 1992, due to the assumption by NAEC, at the acquisition date, of the company's obligations under the 15.23 percent Notes, paydown of the Term Loan and a reduction in borrowings under the revolving credit facility.
(This page left intentionally blank)
- -----------------------------------------------------------------------------
- ------------------------
January 1, 1993 June 5, 1992<F14>* January 1,
1992 May 16, 1991<F15>**
to to to
to
For the Periods December 31, 1993 December 31, 1992 June 4,
1992 December 31, 1991
- -----------------------------------------------------------------------------
- -------------------------
(Thousands of Dollars)
Operating Revenues. . . . $864,415 $492,559 $381,769
$539,827
Operating Income. . . . . 105,534 61,206 34,250
82,755
Net Income (Loss) . . . . 52,237 29,398 12,778
52,694
|
- -----------------------------------------------------------------------------
- ------------------------
At December 31, 1993 December 31, 1992 June 4,
1992<F14>* December 31, 1991
- -----------------------------------------------------------------------------
- ------------------------
(Thousands of Dollars)
Total Assets. . . . . . . . $2,774,511 $2,793,768 $2,693,414
$2,636,525
Long-Term Debt <F13>(a) . . 1,093,985 1,187,985 1,488,985
1,515,985
Liabilities Subject to
Settlement <F13>(a) . . - - -
-
Preferred Stock Subject to
Mandatory Redemption <F13>(a) 125,000 125,000
125,000 125,000
Preferred Stock Not Subject
to Mandatory Redemption . - - -
-
Obligations Under Seabrook
Power Contract and Other
Capital Leases <F13>(a) . 856,559 787,826 -
-
<F13>(a)Includes portions due within one year.
<F14>*PSNH was acquired by NU on June 5, 1992 - See <F1>Note 1 of Notes to
Financial Statements.
<F15>**PSNH was reorganized on May 16, 1991 - See <F1>Note 1 of Notes to
Financial Statements.
|
SELECTED FINANCIAL DATA
- -----------------------------------------------------------------------------
- -------
January 1, 1991 January 1, 1990 January 1,
1989
to to to
For the Periods May 15, 1991 December 31, 1990 December 31,
1989
- -----------------------------------------------------------------------------
- -------
(Thousands of Dollars)
Operating Revenues. . . . $246,281 $660,122 $624,137
Operating Income. . . . . 21,616 63,059 98,126
Net Income (Loss) . . . . (100,791) (210,012) (203,237)
|
- -----------------------------------------------------------------------------
- ---------
At May 15, 1991<F15>** December 31, 1990 December
31, 1989
- -----------------------------------------------------------------------------
- ---------
(Thousands of Dollars)
Total Assets. . . . . . . . $2,502,237 $2,490,534 $2,447,521
Long-Term Debt<F13>(a). . . - - -
Liabilities Subject to
Settlement<F13>(a). . . 1,901,803 1,864,681 1,681,199
Preferred Stock Subject to
Mandatory Redemption<F13>(a) - 420,613 420,613
Preferred Stock Not Subject
to Mandatory Redemption . - 48,587 48,587
Obligations Under Seabrook
Power Contract and Other
Capital Leases<F13>a). . - - -
|
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
- -----------------------------------------------------------------------------
- ------------------------
STATISTICS
- -----------------------------------------------------------------------------
- ------------------------
Gross Electric Average
Utility Plant Annual
December 31, Use Per Electric
(Thousands of kWh Sales Residential Customers
Employees
Dollars) (Millions) Customer (kWh) (Average) (December
31,)
- -----------------------------------------------------------------------------
- ------------------------
1993 1,990,730 11,146 6,817 397,277 1,426
1992<F16>* 1,894,359 12,294 6,874 394,046 1,680
1991 1,782,894 11,377 7,184 390,793 2,639
1990 2,585,890 8,324 7,015 336,720 2,766
1989 2,555,404 7,656 7,311 383,497 2,786
|
- -----------------------------------------------------------------------------
- ------------------------
STATEMENTS OF QUARTERLY FINANCIAL DATA (Unaudited)
- -----------------------------------------------------------------------------
- ------------------------
- -----------------------------------------------------------------------------
- ------------------------
1993 March 31 June 30 September 30
December 31
- -----------------------------------------------------------------------------
- ------------------------
(Thousands of Dollars)
Operating Revenues. . . . . $224,705 $192,360 $222,717
$224,633
======== ======== ========
========
Operating Income. . . . . . $ 30,411 $ 17,133 $ 19,678
$ 38,312
======== ======== ========
========
Net Income (Loss) . . . . . $ 15,558 $ 2,995 $ 8,583
$ 25,101
======== ======== ========
========
|
- -----------------------------------------------------------------------------
- ------------------------
April 1 - June 5 -
1992<F16>* March 31 June 4 June 30 Sept.
30 Dec. 31
- -----------------------------------------------------------------------------
- ------------------------
(Thousands of Dollars)
Operating Revenues. . . . . $252,707 $129,062 $ 74,182
$204,161 $214,216
======== ======== ========
======== ========
Operating Income. . . . . . $ 34,094 $ 156 $ 17,112 $
22,452 $ 21,642
======== ======== ========
======== ========
Net Income (Loss) . . . . . $ 27,810 $(15,032) $ 12,478 $
10,379 $ 6,541
======== ======== ========
======== ========
<F16>*PSNH was acquired by NU on June 5, 1992 - See <F1>Note 1 of Notes to
Financial Statements.
|
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
Northeast Utilities Service Company Shareholder Services
P.O. Box 5006, Hartford, Connecticut 06102-5006
1994 Dividend Payment Dates
10.60% Series A
March 31, June 30, September 30, and December 31
Address General Correspondence in Care of:
Northeast Utilities Service Company
Investor Relations Department
P.O. Box 270
Hartford, Connecticut 06141-0270
Tel. (203) 665-5000
The data contained in this Report is submitted for the sole purpose of providing information to present stockholders about the Company.
Exhibit 13.5
1993
ANNUAL REPORT
NORTH ATLANTIC ENERGY CORPORATION
1993 Annual Report
North Atlantic Energy Corporation
Index
Contents Page - -------- ---- Balance Sheets . . . . . . . . . . . . . . . . . 1-2 Statements of Income . . . . . . . . . . . . . . 3 Statements of Cash Flows . . . . . . . . . . . . 4 Statements of Common Stockholder's Equity. . . . 5 Notes to Financial Statements. . . . . . . . . . 6-16 Report of Independent Public Accountants . . . . 17 Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . 18-22 Selected Financial Data. . . . . . . . . . . . . 23 Statistics . . . . . . . . . . . . . . . . . . . 23 Statement of Quarterly Financial Data. . . . . . 23 Bondholder Information . . . . . . . . . . . . . Back Cover |
NORTH ATLANTIC ENERGY CORPORATION
BALANCE SHEETS
At December 31, 1993
1992<F1>(a)
- -----------------------------------------------------------------------------
- ---------
(Thousands of
Dollars)
ASSETS
- ------
Utility Plant, at original cost:
Electric............................................ $ 758,170 $
756,806
Less: Accumulated provision for depreciation..... 56,649
36,327
------------
- ------------
701,521
720,479
Construction work in progress....................... 7,618
4,775
Nuclear fuel, net................................... 23,339
13,339
------------
- ------------
Total net utility plant......................... 732,478
738,593
------------
- ------------
Other Property and Investments:
Nuclear decommissioning trust, at cost.............. 7,881
5,037
------------
- ------------
Current Assets:
Cash and special deposits........................... 8,404
6,264
Receivables......................................... 3,677
349
Receivables from affiliated companies............... 20,304
22,842
Materials and supplies, at average cost............. 7,353
5,362
Prepayments and other............................... 4,183
4,157
------------
- ------------
43,921
38,974
------------
- ------------
Deferred Charges:
Deferred costs--Seabrook <F4>(Note 1)............... 85,428
22,801
Regulatory asset--income taxes <F4>(Note 1)......... 19,432
-
Unamortized debt expense............................ 5,507
6,179
Deferred DOE assessment <F4>(Note 1)................ 4,905
4,965
Other............................................... 1,269
1,574
------------
- ------------
116,541
35,519
------------
- ------------
Total Assets.................................... $ 900,821 $
818,123
============
============
|
<F1>(a) NAEC began operations on June 5, 1992. The accompanying notes are an integral part of these financial statements.
NORTH ATLANTIC ENERGY CORPORATION
BALANCE SHEETS
At December 31, 1993
1992<F1>(a)
- -----------------------------------------------------------------------------
- ---------
(Thousands of
Dollars)
CAPITALIZATION AND LIABILITIES
- ------------------------------
Capitalization:
Common stock, $1 par value--authorized
and outstanding 1,000 shares....................... $ 1 $
1
Capital surplus, paid in............................ 160,999
160,999
Retained earnings................................... 38,701
12,703
------------
- -----------
Total common stockholder's equity.......... 199,701
173,703
Long-term debt <F7>(Note 4)......................... 560,000
560,000
------------
- -----------
Total capitalization....................... 759,701
733,703
------------
- -----------
Current Liabilities:
Notes payable to affiliated company................. -
18,500
Accounts payable.................................... 3,999
760
Accounts payable to affiliated companies............ 2,389
602
Accrued interest.................................... 18,288
18,288
Accrued taxes....................................... 127
1
Deferred DOE obligation--current portion <F4>(Note 1) 845
-
------------
- ------------
25,648
38,151
------------
- ------------
Deferred Credits:
Accumulated deferred income taxes <F4>(Note 1)...... 74,772
8,395
Deferred obligation to affiliated company <F9>(Note 6) 33,284
32,909
Deferred DOE obligation <F4>(Note 1)................ 3,941
4,965
Deferred Seabrook tax settlement obligation......... 3,475
-
------------
- ------------
115,472
46,269
------------
- ------------
Commitments and Contingencies <F10>(Note 7)
Total Capitalization and Liabilities............ $ 900,821 $
818,123
============
============
|
<F1>(a) NAEC began operations on June 5, 1992. The accompanying notes are an integral part of these financial statements.
NORTH ATLANTIC ENERGY CORPORATION
STATEMENTS OF INCOME
January 1, 1993 June 5,
1992
to to
December 31, December
31,
For the Periods 1993 1992<F1>(a)
- -----------------------------------------------------------------------------
- ----
(Thousands of Dollars)
Operating Revenues........................... $ 125,408 $ 78,444
----------------
- -------------
Operating Expenses:
Operation--
Fuel..................................... 7,067 1,688
Other.................................... 35,656 25,305
Maintenance................................ 7,858 9,413
Depreciation............................... 22,642 12,905
Federal and state income taxes <F8>(Note 5) 5,673 2,583
Taxes other than income taxes.............. 12,794 10,428
----------------
- -------------
Total operating expenses............. 91,690 62,322
----------------
- -------------
Operating Income............................. 33,718 16,122
----------------
- -------------
Other Income:
Deferred Seabrook return--other funds...... 13,397 7,784
Other, net................................. 1,891 200
Income taxes-credit........................ 1,653 10,428
----------------
- -------------
Other income, net.................... 16,941 18,412
----------------
- -------------
Income before interest charges....... 50,659 34,534
----------------
- -------------
Interest Charges:
Interest on long-term debt................. 64,022 36,647
Other interest............................. 45 200
Deferred Seabrook return--borrowed funds,
<F4>(Note 1)............................ (39,406)
(15,016)
----------------
- -------------
Interest charges, net................ 24,661 21,831
----------------
- -------------
Net Income .................................. $ 25,998 $ 12,703
================
=============
|
<F1>(a) NAEC began operations on June 5, 1992.
The accompanying notes are an integral part of these financial statements.
NORTH ATLANTIC ENERGY CORPORATION
STATEMENTS OF CASH FLOWS
For the Periods January 1, 1993
June 5, 1992
to
to
December 31,
December 31,
1993
1992 <F1>(a)
- -----------------------------------------------------------------------------
- --------------
(Thousands
of Dollars)
Cash Flows From Operations:
Net Income .............................................. $ 25,998
$ 12,703
Adjusted for the following:
Depreciation........................................... 22,861
13,009
Deferred income taxes and investment tax credits, net.. 37,121
8,505
Deferred return - Seabrook............................. (52,803)
(22,802)
Other sources of cash.................................. 8,767
5,387
Other uses of cash..................................... (964)
(8,102)
Changes in working capital:
Receivables and accrued utility revenues.............. (790)
(20,736)
Materials and supplies................................ (1,990)
(2,288)
Accounts payable...................................... 5,026
1,362
Accrued taxes......................................... 126
(4,970)
Other working capital (excludes cash)................. 822
2,330
-------------
-------------
Net cash flows from (used for) operations.................. 44,174
(15,602)
-------------
-------------
Cash Flows From Financing Activities:
Common shares............................................ -
161,000
Long-term debt........................................... -
355,000
Net increase (decrease) in short-term debt............... (18,500)
18,500
-------------
-------------
Net cash flows from (used for) financing activities........ (18,500)
534,500
-------------
-------------
Investment Activities:
Investment in plant:
Investment in Seabrook assets, net..................... -
(504,265)
Electric utility plant................................. (6,707)
(6,307)
Nuclear fuel........................................... (13,983)
(511)
-------------
-------------
Net cash flows used for investments in plant............. (20,690)
(511,083)
Other investment activities, net......................... (2,844)
(1,551)
-------------
-------------
Net cash flows used for investments........................ (23,534)
(512,634)
-------------
-------------
Net Increase In Cash for the Period........................ 2,140
6,264
Cash and special deposits - beginning of period............ 6,264
-
-------------
-------------
Cash and special deposits - end of period.................. $ 8,404
$ 6,264
=============
=============
Supplemental Cash Flow Information:
Cash paid (received) during the period for:
Interest, net of amounts capitalized during
construction................................ $ 63,393
$ 18,166
=============
=============
Income taxes.............................................. $ (32,350)
$ (16,000)
=============
=============
<F1>(a)NAEC began operations on June 5, 1992.
|
The accompanying notes are an integral part of these financial statements.
NORTH ATLANTIC ENERGY CORPORATION
STATEMENTS OF COMMON STOCKHOLDER'S EQUITY
- -----------------------------------------------------------------------------
- --------
Capital Retained
Common Surplus, Earnings
Stock Paid In <F2>(a)
Total
- -----------------------------------------------------------------------------
- --------
(Thousands of Dollars)
Balance at June 5, 1992 <F3>(b)......... $ - $ - $ - $
-
Net income for 1992................. 12,703
12,703
Issuance of 1,000 shares of common
stock, $1 par value............... 1
1
Premium on common stock............. 160,999
160,999
----------- ---------- ----------
- ----------
Balance at December 31, 1992............ 1 160,999 12,703
173,703
Net income for 1993................. 25,998
25,998
----------- ---------- ----------
- ----------
Balance at December 31, 1993............ $ 1 $ 160,999 $ 38,701 $
199,701
=========== ========== ==========
==========
<F2>(a) The company had dividend restrictions imposed by its long-term debt
agreement
and was effectively prohibited by the agreement from the distribution
of any
dividends through May 1993. After that time, all retained earnings are
available plus an allowance of $10 million.
<F3>(b) NAEC began operations on June 5, 1992.
The accompanying notes are an integral part of these financial statements.
|
NORTH ATLANTIC ENERGY CORPORATION
<F4>
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General
North Atlantic Energy Corporation (NAEC or the Company) is a wholly owned
subsidiary of Northeast Utilities (NU). NAEC was incorporated on September
20, 1991 for the purpose of acquiring Public Service Company of New
Hampshire's (PSNH) ownership interest in the Seabrook nuclear project
(Seabrook). The company has no employees. Upon NU's acquisition of PSNH on
June 5, 1992 (Acquisition Date), PSNH's 35.6 percent share of the Seabrook
nuclear power plant (Seabrook 1) and other Seabrook-related assets were
transferred to NAEC for approximately $504 million in cash and the
assumption of PSNH's obligations under the $205 million, 15.23 percent Notes
originally issued by PSNH. The sources of cash were a $161 million equity
investment by NU into NAEC, and NAEC's issuance and sale of $355 million of
9.05 percent First Mortgage Bonds, both of which took place on June 5, 1992.
NAEC also acquired PSNH's 35.6 percent interest in the nuclear fuel for
Seabrook 1 and the cancelled Seabrook 2. In addition, it acquired from PSNH
ownership of the approximately 719 acres of exclusion area land which
surrounds the location of the two Seabrook units. NAEC will not operate
Seabrook 1, which at the Acquisition Date, was being operated by the New
Hampshire Yankee Division (NHY) of PSNH. Effective June 29, 1992, North
Atlantic Energy Service Corporation (NAESCO, another newly formed, wholly
owned, subsidiary of NU), replaced NHY as the managing agent and represents
the Seabrook joint owners, including NAEC, in the operation of Seabrook 1.
On June 29, 1992, all NHY employees became employees of NAESCO.
On February 15, 1994, NAEC acquired Vermont Electric Generation and Transmission Cooperative, Inc.'s (VEG&T) 0.4 percent ownership interest of Seabrook for approximately $6.4 million.
The company, The Connecticut Light and Power Company, PSNH, Western Massachusetts Electric Company, and Holyoke Water Power Company are the operating subsidiaries comprising the Northeast Utilities system (the system) and are wholly owned by NU. Other wholly owned subsidiaries of NU provide substantial support services to the system. Northeast Utilities Service Company (NUSCO) supplies centralized accounting, administrative, data processing, engineering, financial, legal, operational, planning, purchasing, and other services to the system companies. Northeast Nuclear Energy Company acts as agent for system companies in constructing and operating the Millstone nuclear generating facilities.
All transactions among affiliated companies are on a recovery of cost basis which may include amounts representing a return on equity, and are subject to approval by various federal and state regulatory agencies.
ACCOUNTING CHANGES
Income Taxes: The company adopted the provisions of Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes (SFAS 109),"
effective January 1, 1993. For information on this change, see <F4> Note 1,
"Summary of Significant Accounting Policies - Income Taxes."
ACCOUNTING RECLASSIFICATIONS
Certain amounts in the accompanying financial statements of the company for
the period June 5, 1992 through December 31, 1992 have been classified to
conform with December 31, 1993 presentation.
PUBLIC UTILITY REGULATION
NU is registered with the Securities and Exchange Commission (SEC) as a
holding company under the Public Utility Holding Company Act of 1935 (1935
Act), and it and its subsidiaries, including NAEC, are subject to the
provisions of the 1935 Act. Arrangements among the system companies, outside
agencies, and other utilities covering interconnections, interchange of
electric power, and sales of utility property are subject to regulation by
the Federal Energy Regulatory Commission (FERC) and/or the SEC. The company
is subject to further regulation for rates and other matters by the FERC and
the New Hampshire Public Utilities Commission (NHPUC), and follows the
accounting policies prescribed by the commissions.
SEABROOK POWER CONTRACT
On June 5, 1992, NAEC and PSNH entered into the Seabrook Power Contract
(Contract), under which PSNH is obligated to buy from NAEC, and NAEC is
obligated to sell to PSNH, all of NAEC's 35.6 percent ownership share of the
capacity and output of Seabrook 1 for a period equal to the length of the
Nuclear Regulatory Commission's (NRC) full power operating license for
Seabrook 1. The Contract is included as part of the rate agreement between
PSNH and the state of New Hampshire (the Rate Agreement). Under the
Contract, PSNH is unconditionally obligated to pay NAEC's cost of service
during this period whether or not Seabrook 1 is operating. NAEC's cost of
service includes all of its Seabrook-related costs, including operation and
maintenance expense, fuel expense, property tax expense, depreciation
expense, and certain overhead and other costs.
The Contract established the value of the initial investment in Seabrook at $700-million (Initial Investment) and the initial investment in nuclear fuel at $0. NAEC is depreciating its Initial Investment on a straight-line basis over the remaining term of Seabrook 1's full power operating license. Any subsequent additions to Seabrook 1 will be depreciated on a straight-line basis over the remaining term of the Contract at the time the additions are brought into service. The Contract provides that NAEC's return on its allowed investment in Seabrook 1 (its investment in working capital, fuel, capital additions after the date of commercial operation of Seabrook 1 and a portion of the Initial Investment) is calculated based on NAEC's actual capitalization from time to time over the term of the Contract, which includes its actual debt and preferred equity costs, and a common equity cost of 12.53% for the first ten years of the Contract, and thereafter at an equity rate of return to be fixed in a filing with FERC.
If Seabrook 1 is shut down prior to the expiration of the NRC operating license term, PSNH will be unconditionally required to pay NAEC termination costs for 39 years, less the period during which Seabrook 1 has operated. These costs are designed to reimburse NAEC for its share of Seabrook 1 cancellation and decommissioning costs and to pay NAEC a return of and on any undepreciated balance of its Initial Investment in the plant over the then-remaining term of the Contract, and the return of and on any capital additions to the plant made after the Acquisition Date over a period of five years after shut down (net of any tax benefits to NAEC attributable to such shut down).
The portion of NAEC's Initial Investment included in rates is prescribed by the Contract. The deferred return on the excluded portion of the Initial Investment will become a component of NAEC's cost of service beginning in the first year after the end of PSNH's fixed rate period (the Fixed Rate Period), which continues through May 1997. See <F4> Note 1, "Summary of Significant Accounting Policies - Phase-In Plan," below, for additional information regarding NAEC's phase-in plan.
NAEC will sell the output from the 0.4 percent Seabrook interest purchased from VEG&T on February 15, 1994 to PSNH under an agreement that has been approved by the FERC and is substantially similar to the Seabrook Power Contract between PSNH and NAEC that was effective on the Acquisition Date.
NUCLEAR FUEL AND SPENT NUCLEAR FUEL DISPOSAL COSTS
The cost of nuclear fuel is amortized to operation expense using a
units-of-production method at rates based on estimated kilowatt-hours of
energy provided.
Under the Nuclear Waste Policy Act of 1982, NAEC must pay the United States Department of Energy (DOE) for the disposal of spent nuclear fuel and high-level radioactive waste. Fees are billed currently to customers and paid to the DOE on a quarterly basis.
Under the Energy Policy Act of 1992 (Energy Act), NAEC is assessed for its proportionate share of the costs of decontaminating and decommissioning uranium enrichment plants operated by the DOE (D&D assessment). The Energy Act imposes an overall cap of $2.25 billion on the obligation of the commercial power industry and limits the annual special assessment to $150 million each year over a 15-year period beginning in 1993. The Energy Act also requires that regulators treat D&D assessments as a reasonable and necessary cost of fuel, to be fully recovered in rates, like any other fuel cost. The cap and annual recovery amounts will be adjusted annually for inflation. The D&D assessment is allocated among utilities based upon services purchased in prior years. As of December 31, 1993, NAEC's remaining share of these costs is estimated to be approximately $4.9 million. NAEC has begun to recover these costs. Accordingly, NAEC recognized these costs as a regulatory asset with a corresponding obligation on its Balance Sheet.
JOINTLY OWNED UTILITY PLANT
As of December 31, 1993, NAEC has a 35.6 percent joint-ownership interest in
Seabrook 1, a 1,150-MW nuclear generating unit. NAEC sells all of its share
of the power generated by Seabrook 1 to PSNH. As of December 31, 1993,
plant-in-service and the accumulated provision for depreciation included
approximately $758.1 million and $56.6 million, respectively, for NAEC's
share of Seabrook 1. NAEC's share of Seabrook 1 expenses is included in the
operating expenses on the accompanying Statement of Income. In February
1994, NAEC purchased an additional 0.4 share of Seabrook 1 from VEG&T.
DEPRECIATION
The provision for depreciation is calculated using the straight-line method
based on estimated remaining lives of depreciable utility plant-in-service,
adjusted for salvage value and removal costs, as approved by the FERC.
Except for major facilities, depreciation factors are applied to the average
plant-in-service during the period. Major facilities are depreciated from
the time they are placed in service. When plant is retired from service, the
original cost of plant, including costs of removal, less salvage, is charged
to the accumulated provision for depreciation. For Seabrook 1, the costs of
removal, less salvage, that have been funded through external decommissioning
trusts will be paid with funds from the trusts and charged to the accumulated
reserve for decommissioning included in the accumulated provision for
depreciation over the expected service life of the plant. See <F5> Note 2,
"Nuclear Decommissioning," for additional information.
The depreciation rates for the several classes of electric plant-in-service are equivalent to a composite rate of 3.2 percent in 1993 and 1992.
INCOME TAXES
The tax effect of temporary differences (differences between the periods in
which transactions affect income in the financial statements and the periods
in which they affect the determination of income subject to tax) is accounted
for in accordance with the ratemaking treatment of the FERC. See <F8>
Note 5, "Income Tax Expense," for the components of income tax expense.
When NU acquired PSNH on June 5, 1992, PSNH and NAEC became parties to the Tax Allocation Agreement among the members of the NU system. The Tax Allocation Agreement requires each member of the NU system to pay to NU the amount, if any, that would have been its federal income tax liability if it had filed a separate return, with certain adjustments, and requires NU to distribute the excess of the sum of such payments over the NU system's consolidated federal income tax liability among those members of the NU system that had tax items that reduced the NU system's current consolidated tax liability. A substantial portion of NAEC's cash flow for the first few years of operations is expected to consist of payments made by NU to NAEC under the Tax Allocation Agreement. The amount of such payments will decrease over time but is expected to remain substantial during the first few years of operations when NAEC is expected to incur losses for tax purposes due to the accelerated tax depreciation of Seabrook 1. Under the Tax Allocation Agreement, NAEC's tax losses may be utilized to offset taxable income of the NU system and NU is required, under the Tax Allocation Agreement, to pay NAEC for the use of such tax benefits. Such tax losses, if not fully utilized in the taxable year in which they were incurred, may be carried back to each of the three taxable years of the NU system preceding the taxable year in which they are incurred. If the NU system does not have enough taxable income in the taxable year in which such losses are incurred or in the preceding taxable years to permit it to take full advantage of such tax losses, or if the NU system is in an alternative minimum tax position in any such year, then the amount of payments under the Tax Allocation Agreement to NAEC will be decreased and NAEC's cash flow will be adversely affected. No assurance can be given that NAEC's cash flow will not be adversely affected in subsequent years by the inability of the other members of the NU system to utilize fully the tax losses expected to be incurred by NAEC.
In 1992, the Financial Accounting Standards Board (FASB) issued SFAS 109. SFAS 109 supersedes previously issued income tax accounting standards. NAEC adopted SFAS 109, on a prospective basis, during the first quarter of 1993. The adoption of SFAS 109 has not had a material effect on the net income or on the balance sheet of the company. As of December 31, 1993, the deferred tax obligation related to the adoption of SFAS 109 was approximately $19 million. As it is probable that the increase in deferred tax liabilities will be recovered from customers through rates, NAEC also established a regulatory asset. SFAS 109 does not permit net-of-tax accounting. Accordingly, the company no longer utilizes net-of-tax accounting for the deferred nuclear plants return-borrowed funds and allowance for funds used during construction (AFUDC)-borrowed funds associated with Seabrook 1.
The temporary differences which give rise to the accumulated deferred tax obligation at December 31, 1993 are as follows:
(Thousands of Dollars)
Accelerated depreciation and other
plant-related differences. . . . . . . . . . . $46,184
The tax effect of net regulatory assets . . . . 6,801
Other. . . . . . . . . . . . . . . . . . . . . . 21,787
-------
$74,772
=======
|
PHASE-IN PLAN
As described below, NAEC is phasing into rates its Initial Investment in
Seabrook 1. The plan is in compliance with Statement of Financial Accounting
Standards No. 92, "Regulated Enterprises - Accounting for Phase-In Plans."
As prescribed by the Rate Agreement, NAEC is phasing in its Initial Investment. As of December 31, 1993, the portion of the Initial Investment on which NAEC is entitled to earn a cash return was 55 percent and will increase by 15 percent in each of the next three years beginning May 15, 1994. Between the May 16, 1991 reorganization date of PSNH (Reorganization Date) and the Acquisition Date, PSNH recorded $50.9 million of deferred return on its investment in Seabrook 1. In accordance with the Rate Agreement, PSNH transferred the $50.9 million deferred return balance to NAEC along with the other Seabrook assets. On the Acquisition Date, NAEC recorded the $50.9 million deferred return and $32.9 million of income taxes associated with the deferred return as part of utility plant. From the Acquisition Date through December 31, 1993, NAEC recorded an additional $85.4 million of deferred return, which is recorded in deferred costs - Seabrook on the Balance Sheet. The deferred return on the excluded portion of the Initial Investment, including the $50.9 million, will be recovered with carrying charges beginning six months after the end of PSNH's Fixed-Rate Period (which continues through May 1997) and will be fully recovered by May 15, 2001.
CASH AND SPECIAL DEPOSITS
Cash and special deposits at December 31, 1993 and 1992 included $7.3 million
and $6.0 million, respectively, in special deposits that will be used to fund
the company's share of future Seabrook operational costs.
<F5>
2. NUCLEAR DECOMMISSIONING
A 1991 Seabrook decommissioning study confirmed that complete and immediate dismantlement at retirement is the most viable and economic method of decommissioning Seabrook 1. Decommissioning studies are reviewed and updated periodically to reflect changes in decommissioning requirements, technology, and inflation.
The estimated cost of decommissioning NAEC's 36.0 ownership share of Seabrook 1, in year-end 1993 dollars, is $131.7 million. Nuclear decommissioning costs are accrued over the expected service life of the unit and are included in depreciation expense on the Statements of Income. Nuclear decommissioning costs amounted to $2.6 million in 1993 and $1.4 million in 1992. Nuclear decommissioning, as a cost of removal, is included in the accumulated provision for depreciation on the Balance Sheets.
Under the terms of the Rate Agreement, PSNH is obligated to pay NAEC's share of Seabrook's decommissioning costs, even if the unit is shut down prior to the expiration of its operating license. NAEC's portion of the cost of decommissioning Seabrook 1 is paid to an independent decommissioning financing fund managed by the state of New Hampshire.
As of December 31, 1993, NAEC (including pre-Acquisition Date payments made by PSNH) has paid approximately $7.3 million into Seabrook 1's decommissioning financing fund. Earnings on the decommissioning trusts and financing fund increase the decommissioning trust balance and the accumulated reserve for decommissioning. At December 31, 1993, the balance in the accumulated reserve for decommissioning amounted to $7.9 million.
Changes in requirements or technology, or adoption of a decommissioning method other than immediate dismantlement, could change decommissioning cost estimates. Although allowances for decommissioning have increased significantly in recent years, ratepayers in future years will need to increase their payments to offset the effects of any insufficient rate recoveries in previous years.
<F6> 3. SHORT-TERM DEBT
NAEC is a limited participant in the Northeast Utilities System Money Pool (Pool). As a limited participant, NAEC is limited to borrowing funds provided by NU parent. The Pool provides a more efficient use of the cash resources of the system, and reduces outside short-term borrowings. NUSCO administers the Pool as agent for the member companies. Short-term borrowing needs of the member companies are first met with available funds of other member companies, including funds borrowed by NU parent. NU parent may lend to the Pool but may not borrow. However, borrowings based on loans from NU parent bear interest at NU parent's cost and must be repaid based upon the terms of NU parent's original borrowing. Funds may be withdrawn from or repaid to the Pool at any time without prior notice. Investing and borrowing subsidiaries receive or pay interest based on the average daily Federal Funds rate.
Maturities of NAEC's short-term debt obligations were for periods of three months or less.
The amount of short-term borrowings that may be incurred by the system companies is subject to periodic approval by the SEC under the 1935 Act. Under the SEC restrictions, NAEC was authorized, as of January 1, 1993, to incur short-term borrowings up to a maximum of $50 million.
<F7>
4. LONG-TERM DEBT
Details of long-term debt outstanding are:
First Mortgage Bonds:
9.05% Series A, due 2002. . . . . . . . $355,000 $355,000
Notes:
15.23% due 2000. . . . . . . . . . . . . 205,000 205,000
-------- --------
Long-term debt, net $560,000 $560,000
======== ========
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Long-term debt maturities and cash sinking-fund requirements on debt outstanding at December 31, 1993 for the years 1994 through 1998 are approximately $0 in 1994 and $20,000,000 for 1995-1998.
The Series A Bonds are not redeemable prior to maturity except out of proceeds of sales of property subject to the lien of the Series A First Mortgage Bond Indenture (Indenture), at general redemption prices established by the Indenture, and out of condemnation or insurance proceeds and through the operation of the sinking fund discussed above.
Essentially all of NAEC's utility plant is subject to the lien of its Indenture.
<F8>
5. INCOME TAX EXPENSE
The components of the federal and state income tax provisions are:
- -----------------------------------------------------------------------------
January 1, June 5,
to to
For the Periods December 31, 1993 December 31, 1992
<F4>(Note 1)
- -----------------------------------------------------------------------------
(Thousands of Dollars)
Current income taxes:
Federal. . . . . . . . . . . . $(33,225) $(16,350)
State. . . . . . . . . . . . . 124 -
--------- ---------
Total current . . . . . . . . (33,101) (16,350)
--------- ---------
Deferred income taxes, net:
Federal . . . . . . . . . . . . 37,199 16,240
State . . . . . . . . . . . . . (78) 1,979
--------- ---------
Total deferred . . . . . . . . 37,121 18,219
--------- ---------
Total income tax expense . . . $ 4,020 $ 1,869
========= =========
The components of total income tax expense are classified as follows:
Income taxes charged to
operating expenses. . . . . . . $ 5,673 $ 2,583
Income taxes associated with
allowance for funds used
during construction (AFUDC)
and deferred Seabrook 1
return - borrowed funds. . . . . - 9,714
Other income taxes - credit . . . (1,653) (10,428)
--------- ---------
Total income tax expense. . . . . $ 4,020 $ 1,869
========= =========
|
Deferred income taxes are comprised of the tax effects of temporary differences as follows:
- -----------------------------------------------------------------------------
January 1, to June 5,
to to
|
For the Periods December 31, 1993 December 31, 1992
<F4>(Note 1)
- -----------------------------------------------------------------------------
(Thousands of Dollars)
Depreciation. . . . . . . . . . . $23,000 $16,146
Alternative minimum tax . . . . . 1,250 (7,641)
AFUDC and deferred Seabrook
return, net. . . . . . . . . . . 13,792 9,714
Property taxes. . . . . . . . . . (1,003) -
Other . . . . . . . . . . . . . . 82 -
------- -------
Deferred income taxes, net. . . . $37,121 $18,219
======= =======
|
A reconciliation between income tax expense and the expected tax expense at the applicable statutory rate is as follows:
- -----------------------------------------------------------------------------
January 1, June 5,
to to
For the Periods December 31, 1993 December 31, 1992
<F4>(Note 1)
- -----------------------------------------------------------------------------
(Thousands of Dollars)
Expected federal income tax at
35 percent of pretax income for
1993 and at 34 percent for
1992 . . . . . . . . . . . . . . $10,506 $ 4,954
Tax effect of differences:
Depreciation differences. . . . . (1,481) (1,546)
Deferred Seabrook return -
other funds. . . . . . . . . . . (4,689) (2,647)
State income taxes, net of federal
benefit. . . . . . . . . . . . . 30 1,306
Other, net. . . . . . . . . . . . (346) (198)
------- -------
Total income tax expense . . $ 4,020 $ 1,869
======= =======
<F9> 6. DEFERRED OBLIGATION - AFFILIATED COMPANY
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At the time PSNH emerged from bankruptcy on May 16, 1991, in accordance with the phase-in under the Contract, it began accruing a deferred return on a portion of its Seabrook investment. From May 16, 1991 to the Acquisition Date, PSNH accrued a deferred return of $50.9 million. On the Acquisition Date, PSNH transferred the $50.9 million deferred return to NAEC as part of the Seabrook-related assets.
At the time PSNH sold the deferred return to NAEC, it realized, for income tax purposes, a gain that is deferred under the consolidated income tax rules. This gain will be restored for income tax purposes when the deferred return of $50.9 million, and the associated income taxes of $32.9 million, are collected by NAEC through the Contract. When NAEC recovers the $32.9 million in years eight through ten of the Rate Agreement, it is obligated to make corresponding payments to PSNH.
On the Acquisition Date, NAEC recorded the $32.9 million of income taxes associated with the deferred return as an adjustment to the purchase price of the Seabrook-related assets, with a corresponding obligation to PSNH, on its Balance Sheet. In 1993, due to changes in tax rates, this amount was adjusted to $33.3 million.
<F10>
7. COMMITMENTS AND CONTINGENCIES
SEABROOK 1 CONSTRUCTION PROGRAM
The construction program for Seabrook 1 is subject to periodic review and
revision. Actual construction expenditures may vary from such estimates due
to factors such as revised load estimates, inflation, revised nuclear safety
regulations, delays, difficulties in the licensing process, the availability
and cost of capital, and other actions taken by regulatory bodies.
NAEC currently forecasts construction expenditures (including AFUDC) for its share of Seabrook 1 to be $37.8 million for the years 1994-1998, including $8.2 million for 1994. In addition, NAEC estimates that its share of Seabrook 1 nuclear fuel requirements will be $53.5 million for the years 1994-1998, including $4.9 million for 1994.
ENVIRONMENTAL MATTERS
NAEC is subject to regulation by federal, state, and local authorities with
respect to air and water quality, handling and the disposal of toxic
substances and hazardous and solid wastes, and the handling and
use of chemical products. NAEC has an active environmental auditing program
to prevent, detect, and remedy noncompliance with environmental laws or
regulations and believes that it is in substantial compliance with current
environmental laws and regulations. Changing environmental requirements
could hinder future construction. The cumulative long-term, economic cost
impact of increasingly stringent environmental requirements cannot be
estimated. Changing environmental requirements could also require extensive
and costly modifications to NAEC's existing investment in Seabrook 1 and
could raise operating costs significantly. As a result, NAEC may incur
significant additional environmental costs, greater than amounts included in
cost of removal and other reserves, in connection with the generation of
electricity and the storage, transportation, and disposal of by-products and
wastes. NAEC may also encounter significantly increased costs to remedy the
environmental effects of prior waste handling and disposal activities.
In most cases, the extent of additional future environmental cleanup costs is not reasonably estimable due to factors such as the unknown magnitude of possible contamination, the appropriate remediation method, the possible effects of future legislation and regulation, the possible effects of technological changes related to future cleanup, and the difficulty of determining future liability, if any, for the cleanup of sites at which NAEC may be determined to be legally liable by the federal or state environmental agencies. In addition, NAEC cannot estimate the potential liability for future claims that may be brought against it by private parties. However, considering known facts and existing laws and regulatory practices, management does not believe that such matters will have a material adverse effect on NAEC's financial position or future results of operations.
NUCLEAR INSURANCE CONTINGENCIES
The Price-Anderson Act currently limits public liability from a single
incident at a nuclear power plant to $9.4 billion. The first $200 million of
liability would be provided by purchasing the maximum amount of commercially
available insurance. Additional coverage of up to a total of $8.8 billion
would be provided by an assessment of $75.5 million per incident, levied on
each of the 116 nuclear units that are currently subject to the Secondary
Financial Protection Program in the United States, subject to a maximum
assessment of $10 million per incident per nuclear unit in any year. In
addition, if the sum of all public liability claims and legal costs arising
from any nuclear incident exceeds the maximum amount of financial protection,
each reactor operator can be assessed an additional 5 percent, up to $3.8
million, or $437.9 million in total, for all 116 nuclear units. The maximum
assessment is to be adjusted at least every five years to reflect
inflationary changes. At December 31, 1993, based on NAEC's ownership
interest in Seabrook 1, the maximum liability would be $28.2 million per
incident. Payments for NAEC's ownership interest in Seabrook 1 would be
limited to a maximum of $3.6 million per incident per year.
Insurance has been purchased from Nuclear Electric Insurance Limited (NEIL) to cover the cost of repair, replacement, or decontamination or premature decommissioning of utility property resulting from insured occurrences with respect to NAEC's ownership interest in Seabrook 1. All companies insured with NEIL are subject to retroactive assessments if losses exceed the accumulated funds available to NEIL. The maximum potential assessments against NAEC with respect to losses arising during current policy years are approximately $4.6 million under the property damage, decontamination, and decommissioning policies. Although NAEC has purchased the limits of coverage currently available from the conventional nuclear insurance pools, the cost of a nuclear incident could exceed available insurance proceeds.
Insurance has been purchased from American Nuclear Insurers/Mutual Atomic Energy Liability Underwriters, aggregating $200 million on an industry basis for coverage of worker claims. All companies insured under this coverage are subject to retrospective assessments of $3.2 million per reactor. The maximum potential assessments against NAEC with respect to losses arising during the current policy period are approximately $1.2 million.
Under the terms of the Contract, any nuclear insurance assessments described above would be passed on to PSNH as a "cost of service."
<F11>
8. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used to estimate the fair value of each of the following financial instruments:
Cash, special deposits and nuclear decommissioning trust: The carrying amounts approximate fair value.
Long-term debt: The fair value of NAEC's long-term debt is based upon the quoted market price for those issues or similar issues.
The carrying amounts of NAEC's financial instruments and the estimated fair values are as follows:
- ----------------------------------------------------------------------------
Carrying Fair
At December 31, 1993 Amount Value
- ----------------------------------------------------------------------------
(Thousands of Dollars)
First Mortgage Bonds. . . . . . . . . . $355,000 $373,496
Other long-term debt. . . . . . . . . . 205,000 254,057
- ----------------------------------------------------------------------------
Carrying Fair
At December 31, 1992 Amount Value
- ----------------------------------------------------------------------------
(Thousands of Dollars)
First Mortgage Bonds. . . . . . . . . . . $355,000 $369,200
Other long-term debt. . . . . . . . . . . 205,000 262,400
|
The fair values shown above have been reported to meet the disclosure requirements and do not purport to represent the amounts that those obligations would be settled at.
In May 1993, the FASB issued Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities (SFAS 115)." SFAS 115 requires companies to disclose the classification of investments in debt or equity securities based on management's intent and ability to hold the security. SFAS 115 also requires disclosure of the aggregate fair value, gross unrealized holding gains, gross unrealized holding losses and amortized cost basis by major security type. Effective January 1, 1994, NAEC will adopt SFAS 115 on a prospective basis. NAEC anticipates that the adoption of SFAS 115 will not have a material impact on future results of operations or financial position.
NORTH ATLANTIC ENERGY CORPORATION
To the Board of Directors
of North Atlantic Energy Corporation:
We have audited the accompanying balance sheets of North Atlantic Energy Corporation (a New Hampshire corporation and a wholly owned subsidiary of Northeast Utilities) as of December 31, 1993 and 1992, and the related statements of income, common stockholder's equity, and cash flows for the year ended December 31, 1993 and the period from June 5, 1992 to December 31, 1992. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of North Atlantic Energy Corporation as of December 31, 1993 and 1992, and the results of its operations and cash flows for the year ended December 31, 1993 and the period from June 5, 1992 to December 31, 1992, in conformity with generally accepted accounting principles.
As discussed in <F4> Note 1 to the Financial Statements, "Summary of Significant Accounting Policies - Accounting Changes," effective January 1, 1993, North Atlantic Energy Corporation changed its method of accounting for income taxes.
/s/Arthur Andersen & Co.
ARTHUR ANDERSEN & CO.
Hartford, Connecticut
February 18, 1994
|
This section contains management's assessment of North Atlantic Energy Corporation (the company or NAEC) financial condition and the principal factors having an impact on the results of operations. The company is a wholly-owned subsidiary of Northeast Utilities (NU). This section should be read in conjunction with the company's financial statements and footnotes.
FINANCIAL CONDITION
Overview
On June 5, 1992 (the Acquisition Date), NU and Public Service Company of New Hampshire (PSNH) completed an affiliation, which represented the second step of a two-step bankruptcy court approved plan (the Plan) that was devised in 1989 to return then-bankrupt PSNH to financial health. The first step took place on May 16, 1991 (the Reorganization Date) when PSNH emerged from bankruptcy as a stand-alone company, subject to a Merger Agreement (the Merger Agreement) with NU's subsidiaries Northeast Utilities Service Company and NU Acquisition Corporation (NUAC). The final step in the affiliation plan occurred on June 5, 1992, when NUAC merged into PSNH pursuant to the Merger Agreement and PSNH became a wholly owned operating subsidiary of NU. In a related transaction, PSNH's 35.6 percent share of the Seabrook 1 nuclear power plant (Seabrook) and other Seabrook-related assets were transferred to the company. On June 29, 1992, North Atlantic Energy Service Corporation, another wholly owned subsidiary of NU, received approval to manage Seabrook as agent for the Seabrook joint owners.
At the Acquisition Date, PSNH and the company entered into the Seabrook Power Contract, under which PSNH is obligated to buy from the company, and the company is obligated to sell to PSNH, all of the company's capacity and output of Seabrook for a period equal to the length of the Nuclear Regulatory Commission full-power operating license for Seabrook (through 2026). Under the contract, PSNH is unconditionally obligated to pay the company's "cost of service" during the period whether or not Seabrook is operating and without regard to the cost of alternative sources of power. In addition, PSNH will be obligated to pay decommissioning and project cancellation costs after the termination of the operating license.
The company's "cost of service" includes all of its prudently incurred Seabrook-related costs, including operation and maintenance expense, fuel expense, property tax expense, depreciation expense, certain overhead and other costs, and a phased-in return on its Seabrook investment. The Seabrook Power Contract established the initial recoverable investment in Seabrook at $700 million (Initial Investment), plus any capital additions, net of depreciation.
The company's only assets are Seabrook and other Seabrook-related assets and its only source of revenue is the Seabrook Power Contract. PSNH's obligations under the Seabrook Power Contract are solely its own and have not been guaranteed by NU. The Seabrook Power Contract contains no provisions entitling PSNH to terminate its obligations. If, however, PSNH were to fail to perform its obligations under the Seabrook Power Contract, the company would be required to find other purchasers for Seabrook power.
Under the Seabrook Power Contract, the company is not entitled to earn an immediate cash return on the full amount of its Initial Investment in Seabrook, but instead is required to phase-in its return on the Initial Investment. The portion of the Initial Investment on which the company is entitled to earn a return is 20 percent in the first year after the Reorganization Date, increasing by 20 percent in the second year and by 15 percent in each of the next
four years, resulting in 100 percent recovery in the sixth and each succeeding year. The company is entitled to earn a noncash deferred return on the portion of the Initial Investment not yet phased into rates. The company is currently earning a return on 55 percent of its Seabrook investment.
When PSNH emerged from bankruptcy on May 16, 1991, in accordance with the phase-in under the Seabrook Power Contract, it began accruing a deferred return on a portion of its Seabrook investment. From May 16, 1991 to the Acquisition Date, PSNH accrued a deferred return of $50.9 million. On the Acquisition Date, PSNH transferred the $50.9 million deferred return to the company as part of the Seabrook-related assets. NAEC recorded the $50.9 million as an adjustment to utility plant. From the Acquisition Date through December 31, 1993, NAEC recorded an additional $85.4 million of deferred return, which is recorded in deferred costs--Seabrook on the Balance Sheets. The deferred return on the excluded portion of the Initial Investment, including the $50.9 million, will be recovered with carrying charges beginning six months after the end of PSNH's fixed-rate period (which continues through May 1997) and will be fully recovered by May 15, 2001.
At the time PSNH transferred the deferred return to NAEC, it realized, for income tax purposes, a gain that is deferred under the consolidated income tax rules. This gain will be restored for income tax purposes when the deferred return of $50.9 million, and the associated income taxes of $32.9 million, are collected by NAEC from PSNH through the Seabrook Power Contract over the period beginning six months after the end of PSNH's fixed rate period through May 15, 2001. When NAEC recovers the $32.9 million, it is obligated to make corresponding payments to PSNH. On the Acquisition Date, NAEC recorded on its balance sheet the $32.9 million as an adjustment to the purchase price of the Seabrook-related assets, with a corresponding obligation to PSNH.
In 1992, the company recorded a deferred assessment and obligation for the estimated costs for the company's Seabrook share of an assessment for costs for the decontamination and decommissioning of uranium enrichment plants operated by the United States Department of Energy (DOE). The company expects to recover these amounts from PSNH as part of the cost of Seabrook fuel.
In 1993, the company adopted Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes." Under SFAS No. 109, the company reflected a regulatory asset and a deferred tax liability for the cumulative amount of income taxes associated with timing differences for which deferred taxes had not been provided but are expected to be recovered from customers in the future. The adoption of SFAS No. 109 has not had a material effect on results of operations.
See the "Notes to Financial Statements" for further details on deferred charges and recently adopted accounting standard.
RATE MATTERS
PSNH's rate agreement with the State of New Hampshire (the Rate Agreement) provides the financial basis for the affiliation plan. It sets out a comprehensive plan of rates for PSNH, providing for seven base rate increases of 5.5 percent per year (the Fixed Rate Period) and a comprehensive Fuel and Purchased Power Adjustment Clause (FPPAC). The first of these base rate increases was put in effect on January 1, 1990. The remaining three increases are effective annually on each June 1 beginning in 1994.
The FPPAC allows PSNH to recover from its customers the difference between actual prudent energy and purchased power costs, including the costs incurred under the Seabrook Power Contract, and the costs included in base rates.
In January 1994, the NHPUC approved a Memorandum of Understanding between PSNH, NAEC, Northeast Utilities Service Company (NUSCO), and the Attorney General of the State of New Hampshire relating to certain issues which had arisen under the Rate Agreement (the Global Settlement). The Global Settlement addressed changes in tax legislation in New Hampshire, accounting treatments for PSNH resulting from adoption of SFAS
No. 106, "Employer's Accounting for Postretirement Benefits Other Than Pensions" and SFAS No. 109 and recovery for certain aspects of PSNH's settlement with the Vermont Electric Generation and Transmission Cooperative, Inc. (VEG&T), including the purchase by NAEC of VEG&T's 0.4 percent share of Seabrook.
NAEC became the purchaser of the VEG&T's 0.4 percent share of Seabrook and entered into a separate power contract with PSNH, under which PSNH is obligated to buy from NAEC all of the capacity and output of Seabrook attributable to such interest for a period equal to the length of the NRC full power operating license for Seabrook. On January 7, 1994, the NRC approved the transfer of VEG&T's ownership share of Seabrook to NAEC. All regulatory approvals for NAEC's purchase have been received and the closing was effective in February 1994.
On April 16, 1993, the Governor of New Hampshire signed into law legislation that implemented the settlement of a suit concerning a property tax on Seabrook station (the Seabrook Tax) that was filed with the United States Supreme Court by Attorneys General of Connecticut, Massachusetts, and Rhode Island. The legislation made various changes to New Hampshire tax laws. The change in the tax law required the State of New Hampshire to refund to the joint owners of Seabrook a total of $8.8 million in each of 1993 and 1994. NAEC has recognized a receivable and an obligation to PSNH for PSNH and NAEC's share of the refund. The tax refund is being refunded to PSNH through the FPPAC.
SEABROOK PERFORMANCE
In 1993 Seabrook operated at a capacity factor of 89.8 percent as compared to 77.9 percent for the same period in 1992 and a national average of 70.6 percent for 1993. The unit was shutdown on September 7, 1992 for refueling and maintenance and returned to service on November 13, 1992. The unit is scheduled to begin a 56-day refueling and maintenance outage on March 26, 1994.
NAEC could be affected by the ability of other Seabrook joint owners to fund their shares of Seabrook costs. Great Bay Power Corporation, an owner of a 12.13 percent entitlement in Seabrook is operating under bankruptcy protection of Chapter 11 of the Federal Bankruptcy Code. It is expected that Great Bay or certain companies that Great Bay has agreements with will have funds sufficient to fund the upcoming Seabrook outage.
ENVIRONMENTAL MATTERS
NAEC is subject to regulation by federal, state, and local authorities with respect to air and water quality, handling and the disposal of toxic substances and hazardous and solid wastes, and the handling and use of chemical products. The cumulative long-term economic cost impact of increasingly stringent environmental requirements cannot be estimated. However, NAEC has an active environmental auditing program to detect and remedy noncompliance with environmental laws or regulations. NAEC may incur significant additional costs, greater than amounts included in cost of removal and other reserves, in connection with the generation of electricity and the storage, transportation, and disposal of by-products and wastes. NAEC may also encounter significantly increased costs to remedy the environmental effects of prior waste handling and disposal practices.
The estimated cost of decommissioning NAEC's 36.0 ownership share of Seabrook, in year-end 1993 dollars, is $131.7 million. Nuclear decommissioning costs are accrued over the expected service life of the unit and are included in depreciation expense on the Statements of Income. Nuclear decommissioning costs amounted to $2.6 million in 1993 and $1.4 million in 1992. Nuclear decommissioning, as a cost of removal, is included in the accumulated provision for depreciation on the Balance Sheets.
See "Notes to Financial Statements" for further information regarding nuclear decommissioning and other environmental matters.
LIQUIDITY AND CAPITAL RESOURCES
Cash flows from operations provided the primary source of funds for the period ended December 31, 1993, while repayment of short-term debt and investment in nuclear fuel and plant were the primary uses of funds. Nuclear fuel expenditures for the period are high due to higher purchases in 1993 in preparation for a March 1994 refueling and maintenance outage.
The company had negative cash flow from operations for the period June 5, 1992 through December 31, 1992 due to a substantial portion of its earnings being noncash.
At the Acquisition Date, NAEC assumed PSNH's obligations under the $205 million of 15.23 percent notes (the Notes) and paid $504 million to PSNH for the purchase of PSNH's interest in Seabrook. The company financed these requirements out of the proceeds from the sale of $355 million Series A First Mortgage Bonds and the sale of its common stock to NU for $161 million. As a result of these transactions and the assumption of the Notes, the company's initial capitalization is approximately 78 percent debt and 22 percent common equity. In addition, the company borrowed amounts under the NU system Money Pool for ongoing cash requirements. As of December 31, 1993, there are no borrowings under the Money Pool. (See "Notes to Financial Statements" for information regarding the Money Pool.)
The company will have ongoing cash requirements for Seabrook-related capital expenditures, nuclear fuel expenditures, interest and operating expenses. Capital expenditures for the period 1994 through 1998 are expected to be approximately $37.8 million (including AFUDC), including $8.2 million for 1994. Nuclear fuel expenditures for the same period are expected to be approximately $53.5 million (excluding AFUDC), including $4.9 million for 1994. Such cash requirements are expected to be met from payments under the Seabrook Power Contract and the Tax Allocation Agreement, except that to the extent some or all of the capital expenditures and nuclear fuel expenditures may have to be financed, the company expects to borrow under the Money Pool.
A substantial portion of the company's cash flow for the first few years is expected to consist of payments made by NU to the company under a Tax Allocation Agreement that the company entered into with NU at the time of the acquisition. The amount of such payments will decrease over time but is expected to remain substantial during the first few years when the company is expected to incur losses for tax purposes due to accelerated tax depreciation of Seabrook. The company received approximately $33 million from NU for the period ended December 31, 1993 under this agreement. No assurance can be given, however, as to the extent of the future benefits, if any, that will actually accrue to the company under the Tax Allocation Agreement. (See "Notes to Financial Statements" for further information regarding the Tax Allocation Agreement.)
RESULTS OF OPERATIONS
The company has no historical results prior to June 5, 1992. Therefore, the Statements of Income for the periods June 5, 1992 to December 31, 1992 and January 1, 1993 to December 31, 1993 are not comparable.
Operating revenues represent amounts from PSNH under the terms of the Seabrook Power Contract and billings to PSNH for decommissioning expense.
Operating expenses represent the costs incurred for the operation of Seabrook including fuel expense.
The deferred Seabrook return represents the investment return not recovered currently on the portion of the Seabrook investment not reflected in rate base.
Income taxes included in other income represent the tax benefits related to the portion of the Seabrook investment not reflected in rate base.
Interest on long-term debt and other interest reflects the interest expenses on the debt incurred and assumed at the acquisition.
NORTH ATLANTIC ENERGY CORPORATION
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(Thousands of Dollars)
Operating Revenues . . . . . . . . $125,408 $ 78,444
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Operating Income . . . . . . . . . $ 33,718 $ 16,122
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Net Income . . . . . . . . . . . . $ 25,998 $ 12,703
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Total Assets . . . . . . . . . . . $900,821 $818,123
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Long-Term Debt . . . . . . . . . . $560,000 $560,000
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STATISTICS 1993 1992<F12>*
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Gross Electric Utility Plant
December 31,
(Thousand of Dollars). . . . . . . $789,127 $774,920
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kWh Sales (Millions) . . . . . . . 3,218 1,268
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(Thousands of Dollars)
Operating Revenues . . $29,153 $29,952 $31,845 $34,458
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Operating Income . . . $ 6,541 $ 7,964 $ 9,657 $ 9,556
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Net Income . . . . . . $ 5,185 $ 5,985 $ 7,491 $ 7,337
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1992
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Operating Revenues . . $ - $ 8,785 $32,439 $37,220
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Operating Income . . . $ - $ 2,010 $ 6,988 $ 7,124
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Net Income . . . . . . $ - $ 1,119 $ 6,822 $ 4,762
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<F12> *The company began commercial operations on June 5, 1992. Information
presented for 1992 covers the period June 5, 1992 through December 31,
1992.
<F13>**In 1992, represents the period June 5, 1992 through June 30,
1992.
North Atlantic Energy Corporation
Address General Correspondence in Care of:
Northeast Utilities Service Company
Investor Relations Department
P.O. Box 270
Hartford, Connecticut 06141-0270
Tel. (203) 665-5000
General Office
1000 Elm Street
P.O. Box 330
Manchester, New Hampshire 03105