Exhibit 10.28
NORTHEAST NUCLEAR ENERGY COMPANY
$25,000,000
7.17% SENIOR NOTES DUE AUGUST 31, 2019
NOTE AGREEMENT
Dated as of December 21, 1993
TABLE OF CONTENTS
(Not Part of Agreement)
Page
1. AUTHORIZATION AND INTEREST RATE . . . . . . . . . . . . . . . . . . .1
1A. Authorization of Issue of Notes . . . . . . . . . . . . . .1
1B. Interest Rate . . . . . . . . . . . . . . . . . . . . . . .1
2. PURCHASE AND SALE OF NOTES; FEES . . . . . . . . . . . . . . . . . . 1
2A. Purchase and Sale of Notes. . . . . . . . . . . . . . . . .1
2B. Rate Lock Delayed Delivery Fee. . . . . . . . . . . . . . .2
2C. Rate Lock Cancellation Fee. . . . . . . . . . . . . . . . .2
2D. Commitment Fee. . . . . . . . . . . . . . . . . . . . . . .3
3. CONDITIONS OF FUNDING. . . . . . . . . . . . . . . . . . . . . . . . 3
3A. Opinion of Purchaser's Special Counsel. . . . . . . . . . .3
3B. Opinion of Company's Counsel. . . . . . . . . . . . . . . .3
3C. Opinion of CL&P's Special Counsel . . . . . . . . . . . . .3
3D. Opinion of WMECO's Special Counsel. . . . . . . . . . . . .3
3E. Representations and Warranties; No Default. . . . . . . . .4
3F. Purchase Permitted By Applicable Laws; Regulatory
Approvals. . . . . . . . . . . . . . . . . . . . . . . . . 4
3G. Millstone Plant Agreement . . . . . . . . . . . . . . . . .4
3H. Delivery of Notes . . . . . . . . . . . . . . . . . . . . .4
3I. Inducement Letter . . . . . . . . . . . . . . . . . . . . .4
3J. Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . .5
3K. Proceedings . . . . . . . . . . . . . . . . . . . . . . . .5
4. PREPAYMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4A(1). Required Prepayments Prior to Downgrade Event. . . . .5
4A(2). Required Prepayments With Yield-Maintenance Amount . .5
4B. Optional Prepayment With Yield-Maintenance Amount . . . . .5
4C. Notice of Optional Prepayment . . . . . . . . . . . . . . .6
4D. Partial Payments Pro Rata . . . . . . . . . . . . . . . . .6
4E. Retirement of Notes . . . . . . . . . . . . . . . . . . . .6
5. AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . 7
5A. Financial Statements. . . . . . . . . . . . . . . . . . . .7
5B. Information Required by Rule 144A . . . . . . . . . . . . .9
5C. Inspection of Property. . . . . . . . . . . . . . . . . . .9
5D. Conduct of Business and Maintenance of Existence. . . . . .9
5E. Maintenance of Properties . . . . . . . . . . . . . . . . 10
5F. Obligations and Taxes . . . . . . . . . . . . . . . . . . 10
5G. Compliance with Laws and Other Covenants. . . . . . . . . 10
5H. Maintenance of Insurance. . . . . . . . . . . . . . . . . 11
5I. Covenant to Secure Note Equally . . . . . . . . . . . . . 11
6. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . 11
6A. Lien, Debt and Other Restrictions . . . . . . . . . . . . 11
6A(1). Liens. . . . . . . . . . . . . . . . . . . . . . . . 11
6A(2). Debt . . . . . . . . . . . . . . . . . . . . . . . . 12
6A(3). Merger and Sale of Assets. . . . . . . . . . . . . . 13
6A(4). Restricted Investments . . . . . . . . . . . . . . . 13
6B. No Amendment of Millstone Plant Agreement . . . . . . . . 14
7. EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . 14
7A. Acceleration. . . . . . . . . . . . . . . . . . . . . . . 14
7B. Rescission of Acceleration. . . . . . . . . . . . . . . . 17
7C. Notice of Acceleration or Rescission. . . . . . . . . . . 18
7D. Other Remedies. . . . . . . . . . . . . . . . . . . . . . 18
8. REPRESENTATIONS, COVENANTS AND WARRANTIES. . . . . . . . . . . . . .18
8A. Organization. . . . . . . . . . . . . . . . . . . . . . . 18
8B. Power and Authority . . . . . . . . . . . . . . . . . . . 19
8C. Financial Statements. . . . . . . . . . . . . . . . . . . 19
8D. Actions Pending . . . . . . . . . . . . . . . . . . . . . 19
8E. Outstanding Debt. . . . . . . . . . . . . . . . . . . . . 19
8F. Title to Properties . . . . . . . . . . . . . . . . . . . 20
8G. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8H. Conflicting Agreements and Other Matters. . . . . . . . . 20
8I. Offering of Notes . . . . . . . . . . . . . . . . . . . . 20
8J. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . 21
8K. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8L. Governmental and Other Third Party Consent. . . . . . . . 22
8M. Environmental Compliance. . . . . . . . . . . . . . . . . 22
8N. Disclosure. . . . . . . . . . . . . . . . . . . . . . . . 23
8O. Permits and Other Operating Rights. . . . . . . . . . . . 23
8P. Millstone Plant Agreement . . . . . . . . . . . . . . . . 23
8Q. Regulatory Status of Company. . . . . . . . . . . . . . . 23
9. REPRESENTATIONS OF THE PURCHASER . . . . . . . . . . . . . . . . . 24
9A. Nature of Purchase. . . . . . . . . . . . . . . . . . . . 24
9B. Source of Funds . . . . . . . . . . . . . . . . . . . . . 24
10. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
10A.Yield-Maintenance Terms . . . . . . . . . . . . . . . . . .24
10B.Other Terms . . . . . . . . . . . . . . . . . . . . . . . .26
10C.Accounting Principles, Terms and Determinations . . . . . .30
11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
11A.Note Payments . . . . . . . . . . . . . . . . . . . . . . .31
11B.Expenses. . . . . . . . . . . . . . . . . . . . . . . . . .31
11C.Consent to Amendments . . . . . . . . . . . . . . . . . . .32
11D.Form, Registration, Transfer and Exchange of Notes; Lost
Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11E.Persons Deemed Owners; Participations . . . . . . . . . . .33
11F.Survival of Representations and Warranties; Entire
Agreement. . . . . . . . . . . . . . . . . . . . . . . . . 33
11G.Successors and Assigns. . . . . . . . . . . . . . . . . . .33
11H.Disclosure to Other Persons . . . . . . . . . . . . . . . .33
11I.Notices . . . . . . . . . . . . . . . . . . . . . . . . . .34
11J.Payments Due on Non-Business Days . . . . . . . . . . . . .34
11K.Satisfaction Requirement. . . . . . . . . . . . . . . . . .34
11L.Governing Law . . . . . . . . . . . . . . . . . . . . . . .34
11M.Severability. . . . . . . . . . . . . . . . . . . . . . . .35
11N.Descriptive Headings. . . . . . . . . . . . . . . . . . . .35
11O.Counterparts. . . . . . . . . . . . . . . . . . . . . . . .35
PURCHASER SCHEDULE
EXHIBIT A -- FORM OF NOTE
EXHIBIT B -- FORM OF OPINION OF COMPANY'S SPECIAL COUNSEL
EXHIBIT C -- FORM OF OPINION OF CL&P'S SPECIAL COUNSEL
EXHIBIT D -- FORM OF OPINION OF WMECO'S SPECIAL COUNSEL
EXHIBIT E -- FORM OF INDUCEMENT LETTER
SCHEDULE 4A(1) -- AMORTIZATION SCHEDULE
SCHEDULE 6A(1)(v) -- EXISTING LIENS
SCHEDULE 6A(2) -- DEBT
SCHEDULE 8H -- LIST OF AGREEMENTS RESTRICTING DEBT
SCHEDULE 10B(2) -- MONEY POOL APPLICATION AND APPROVAL
NORTHEAST NUCLEAR ENERGY COMPANY
107 Selden Street
Berlin, Connecticut 06037
As of December 21, 1993
The Prudential Insurance Company of America
c/o Prudential Power Funding Associates
Four Gateway Center
100 Mulberry Street
Newark, New Jersey 07102-4069
Ladies and Gentlemen:
The undersigned, Northeast Nuclear Energy Company (herein called the
"Company"), hereby agrees with you as follows:
1. AUTHORIZATION AND INTEREST RATE.
1A. Authorization of Issue of Notes. The Company will authorize
the issue of its senior promissory notes in the aggregate principal amount
of $25,000,000, to be dated the date of issue thereof, to mature August 31,
2019, to bear interest on the unpaid balance thereof from the date thereof
until the principal thereof shall have become due and payable at the rate
per annum determined in accordance with paragraph 1B hereof and on overdue
payments at the rate specified therein, and to be substantially in the form
of Exhibit A attached hereto. The term "Notes" as used herein shall
include each such senior promissory note delivered pursuant to any
provision of this Agreement and each such senior promissory note delivered
in substitution or exchange for any other Note pursuant to any such
provision.
1B. Interest Rate. The Notes shall bear interest at the rate of
7.17% per annum payable on the last day of each month commencing December
31, 1993 and otherwise in accordance and as set forth in paragraph 11A
hereof; provided, however, that, in the event a Downgrade Event occurs,
then, on and after the Downgrade Date, the Notes shall bear interest at the
rate of 7.67% per annum payable as set forth herein and in paragraph 11A
hereof.
2. PURCHASE AND SALE OF NOTES; FEES.
2A. Purchase and Sale of Notes. The Company hereby agrees to
sell to you and, subject to the terms and conditions herein set forth, you
agree to purchase from the Company Notes in the aggregate principal amount
set forth opposite your name on the Purchaser Schedule attached hereto at
100% of such aggregate principal amount. The Company will deliver to you,
at the offices of Schiff Hardin & Waite at 7200 Sears Tower, Chicago,
Illinois 60606, one or more Notes registered in your name, evidencing the
aggregate principal amount of Notes to be purchased by you and in the
denomination or denominations specified in the Purchaser Schedule attached
hereto, against payment of the purchase price thereof by transfer of
immediately available funds for credit to the Company's account #0031-3419
at Shawmut Bank Connecticut, Hartford, Connecticut on the date of funding,
which shall be December 21, 1993 or any other date on or before December
30, 1993 upon which the Company and you may mutually agree (herein called
"funding" or the "date of funding").
2B. Rate Lock Delayed Delivery Fee. If funding does not occur
on or before December 30, 1993 for any reason, the Company will pay to you
in immediately available funds on January 1, 1994 a delayed delivery fee
calculated as provided below. If the funding date is delayed beyond
December 30, 1993 for any reason other than your failure to purchase the
Notes when you are obligated to do so pursuant to the terms of this
Agreement, the Company will pay to you in immediately available funds
additional delayed delivery fees on the rescheduled second funding date and
any subsequently rescheduled funding date calculated as provided below.
The amount of any delayed delivery fee shall be calculated as follows:
(7.17% - MMY) x DTS/360 x $25,000,000
where "MMY" means Money Market Yield, i.e., the yield per annum on an
alternative investment selected by you on the date you receive notice of
the delay of the funding date having a maturity date on or about the
rescheduled funding date (a new investment being selected by you each time
the funding date is delayed); "DTS" means Days to Settlement, i.e., the
number of actual days elapsed (a) from and including (i) December 30, 1993,
if no delayed delivery fee has been paid, or (ii) the date of the
immediately preceding payment of a delayed delivery fee, if a delayed
delivery fee has previously been paid, (b) to but excluding the date such
delayed delivery fee is to be paid. In no case shall any delayed delivery
fee be less than zero. Nothing in this paragraph 2B shall be or operate as
a consent by you to, or waiver of, the failure by the Company to comply
with the terms of this Agreement regarding the issuance and sale of the
Notes on the funding date, or a selection or limitation of any of your
rights or remedies resulting from such failure.
2C. Rate Lock Cancellation Fee. If funding does not occur on or
prior to the Cancellation Date for any reason, the Company will pay you in
immediately available funds on the Cancellation Date a cancellation fee
calculated as follows:
PI x $25,000,000
where "PI" means Price Increase, i.e., the quotient (expressed in decimals)
obtained by dividing (a) the excess, if any, of the asked price (determined
by you) of the Hedge Treasury Note(s) (as defined below) on the
Cancellation Date over the bid price (as determined by you) of the Hedge
Treasury Notes on December 17, 1993 by (b) such bid price. The foregoing
bid and asked prices shall be as reported by Telerate Systems, Inc. (or, if
such date for any reason ceases to be available through Telerate Systems,
Inc., any publicly available source of similar market data selected by
you). Each price shall be based on a Hedge Treasury Note having a par
value of $100.00 and shall be rounded to the second decimal place. In no
case shall the cancellation fee be less than zero. For purposes of this
paragraph 2C, (a) "Cancellation Date" shall mean the earlier to occur of
(i) the date on which you receive notice from the Company that the Company
does not intend to issue the Notes (or the next succeeding Business Day if
you receive such notice after 4:00 p.m., New York City time) or (ii)
December 30, 1993, and (b) "Hedge Treasury Note" shall mean the U.S.
Treasury Note or Notes used by you to lock the interest rate on the Notes
on December 17, 1993.
2D. Commitment Fee. The Company will pay to you in immediately
available funds on the date of funding a commitment fee on $28,000,000 at
the rate of 0.125% per annum for the period from September 14, 1993 to the
date of funding.
3. CONDITIONS OF FUNDING. Your obligation to purchase and pay for
the Notes to be purchased by you hereunder is subject to the satisfaction,
on or before the date of funding, of the following conditions:
3A. Opinion of Purchaser's Special Counsel. You shall have
received from Schiff Hardin & Waite, who are acting as special counsel for
you in connection with this transaction, a favorable opinion satisfactory
to you as to such matters incident to the matters herein contemplated as
you may reasonably request.
3B. Opinion of Company's Counsel. You shall have received from
Day, Berry & Howard, special counsel for the Company, a favorable opinion
satisfactory to you in the form of Exhibit B attached hereto, and the
Company, by its execution of this Agreement, authorizes and directs such to
render such opinion to you.
3C. Opinion of CL&P's Special Counsel. You shall have received
from Day, Berry & Howard, special counsel for CL&P, a favorable opinion in
the form of Exhibit C attached hereto.
3D. Opinion of WMECO's Special Counsel. You shall have received
from Day, Berry & Howard, special counsel for WMECO, a favorable opinion in
the form of Exhibit D attached hereto.
3E. Representations and Warranties; No Default. The
representations and warranties contained in paragraph 8 and in the
Inducement Letter shall be true on and as of the date of funding, both
before and after giving effect to the purchase of the Notes and the use of
the proceeds thereof; there shall exist on the date of funding no Event of
Default or Default both before and after giving effect to the purchase of
the Notes and the use of the proceeds thereof; and the Company shall have
delivered to you an Officer's Certificate, dated the date of funding, to
both such effects.
3F. Purchase Permitted By Applicable Laws; Regulatory Approvals.
The purchase of and payment for the Notes to be purchased by you on the
date of funding on the terms and conditions herein provided (including the
use of the proceeds of such Notes by the Company) shall not violate any
applicable law or governmental regulation (including, without limitation,
section 5 of the Securities Act or Regulation G, T or X of the Board of
Governors of the Federal Reserve System) and shall not subject you to any
tax, penalty, liability or other onerous condition under or pursuant to any
applicable law or governmental regulation, and you shall have received such
certificates or other evidence as you may request to establish compliance
with this condition. The orders of the Securities and Exchange Commission
and the CDPUC referred to in paragraph 8L of this Agreement shall be
satisfactory to you, shall be in full force and effect on the date of
funding, shall not have been stayed, suspended, modified, vacated or held
invalid, shall not be contested and no petition for rehearing, stay or
suspension or appeal or review of any thereof shall have been filed, and,
with respect to the orders described in clause (ii) of paragraph 8L, shall
be final. Any conditions contained in such orders shall have been
satisfied to your reasonable satisfaction. You and your special counsel
shall have received copies of such documents and papers (including, without
limitation, certified or attested copies of such orders) as you or they may
reasonably request in connection therewith or as a basis for your special
counsel's funding opinion, all in form and substance satisfactory to you
and your special counsel.
3G. Millstone Plant Agreement. The Millstone Plant Agreement
shall be in full force and effect without any amendment or supplement
thereto or waiver of any rights by any party thereunder and there shall be
no default or claim of default by any party under such agreement.
3H. Delivery of Notes. The Company shall have delivered to you
the Notes to be delivered to you pursuant to paragraph 2, all duly
completed and executed by the Company.
3I. Inducement Letter. Each of CL&P and WMECO shall have
executed and delivered to you a letter agreement in the form of Exhibit E
attached hereto (the "Inducement Letter") and the Inducement Letter shall
be in full force and effect.
3J. Fees. The Company shall have paid any delayed delivery fees
pursuant to paragraph 2B and the commitment fee pursuant to paragraph 2D.
3K. Proceedings. All corporate and other proceedings taken or
to be taken in connection with the transactions contemplated hereby and all
documents incident thereto shall be satisfactory in substance and form to
you, and you shall have received all such counterpart originals or
certified or other copies of such documents as you may reasonably request.
4. PREPAYMENTS. The Notes shall be subject to prepayment with
respect to the required prepayments specified in paragraph 4A(1) and 4A(2)
and the optional prepayments permitted by paragraph 4B.
4A(1). Required Prepayments Prior to Downgrade Event. Until
the Notes shall be paid in full, the Company shall apply to the prepayment
of the Notes, without premium, on the last day of each month, from
September 30, 1994 through July 31, 2019, the principal amount set forth on
Schedule 4A(1) attached hereto opposite such day, and such principal
amounts of the Notes, together with interest accrued thereon to the
prepayment dates, shall become due on such prepayment dates. The remaining
principal amount of the Notes, together with interest accrued thereon,
shall become due on August 31, 2019 or at such earlier time as may be
required pursuant to paragraph 4A(2). Notwithstanding the foregoing, in
the event a Downgrade Event occurs, the Company shall make the prepayments
required under paragraph 4A(2) in lieu of the prepayments required under
this paragraph 4A(1).
4A(2). Required Prepayments With Yield-Maintenance Amount. In
the event that a Downgrade Event occurs, the Company shall give immediate
notice thereof to the holders of the Notes and, until the Notes shall be
paid in full, the Company shall apply to the prepayment of the Notes, with
the Yield Maintenance Amount, if any, the Downgrade Prepayment Amount on
each Downgrade Payment Date, and such principal amounts of the Notes,
together with interest accrued thereon to the prepayment dates and together
with the Yield Maintenance Amount, if any, with respect thereto, shall
become due on such prepayment dates. The remaining outstanding principal
amount of the Notes, together with interest accrued thereon and together
with the Yield Maintenance Amount, if any, with respect thereto, shall
become due on the third anniversary of the first Downgrade Payment Date.
4B. Optional Prepayment With Yield-Maintenance Amount. The
Notes shall be subject to prepayment, in whole or in part on the last day
of any month (in multiples of $5,000,000 and integral multiplies of
$1,000,000 in excess of $5,000,000), at the option of the Company, at 100%
of the principal amount so prepaid plus interest accrued thereon to the
prepayment date and together with the Yield-Maintenance Amount, if any,
with respect thereto. Any partial prepayment of the Notes pursuant to this
paragraph 4B shall be applied in satisfaction of required payments of
principal under paragraph 4A(1) or 4A(2), as the case may be, in inverse
order of their scheduled due dates.
4C. Notice of Optional Prepayment. The Company shall give the
holder of each Note irrevocable written notice of any prepayment pursuant
to paragraph 4B not less than 30 days prior to the prepayment date,
specifying such prepayment date and the principal amount of the Notes, and
of the Notes held by such holder, to be prepaid on such date and stating
that such prepayment is to be made pursuant to paragraph 4B. Notice of
prepayment having been given as aforesaid, the principal amount of the
Notes specified in such notice, together with interest accrued thereon to
the prepayment date and together with the Yield-Maintenance Amount, if any,
with respect thereto, shall become due and payable on such prepayment date.
The Company shall, on or before the day on which it gives written notice of
any prepayment pursuant to paragraph 4B, give telephonic notice of the
principal amount of the Notes to be prepaid and the prepayment date to each
Significant Holder which shall have designated a recipient of such notices
in the Purchaser Schedule attached hereto or by notice in writing to the
Company.
4D. Partial Payments Pro Rata. Upon any partial prepayment of
the Notes pursuant to paragraph 4A(1), 4A(2) or 4B, the principal amount so
prepaid shall be allocated to all Notes at the time outstanding (including,
for the purpose of this paragraph 4D only, all Notes prepaid or otherwise
retired or purchased or otherwise acquired by the Company or any of its
Subsidiaries or Affiliates other than by prepayment pursuant to paragraph
4A(1), 4A(2) or 4B) in proportion to the respective outstanding principal
amounts thereof.
4E. Retirement of Notes. The Company shall not, and shall not
permit any of its Subsidiaries or Affiliates to, prepay or otherwise retire
in whole or in part prior to their stated final maturity (other than by
prepayment pursuant to paragraph 4A(1), 4A(2) or 4B or upon acceleration of
such final maturity pursuant to paragraph 7A), or purchase or otherwise
acquire, directly or indirectly, Notes held by any holder unless the
Company or such Subsidiary or such Affiliate shall have offered to prepay
or otherwise retire or purchase or otherwise acquire, as the case may be,
the same proportion of the aggregate principal amount of Notes held by each
other holder of Notes at the time outstanding upon the same terms and
conditions. Any Notes so prepaid or otherwise retired or purchased or
otherwise acquired by the Company or any of its Subsidiaries or Affiliates
shall not be deemed to be outstanding for any purpose under this Agreement,
except as provided in paragraph 4D.
5. AFFIRMATIVE COVENANTS.
5A. Financial Statements. The Company covenants that it will
deliver to each Significant Holder in quadruplicate:
(i) as soon as practicable and in any event within 60 days
after the end of each quarterly period (other than the last quarterly
period) in each fiscal year, consolidated statements of income and retained
earnings of the Company and its Subsidiaries for the period from the
beginning of the current fiscal year to the end of such quarterly period,
and a consolidated balance sheet of the Company and its Subsidiaries as at
the end of such quarterly period, setting forth in each case in comparative
form figures for the corresponding period in the preceding fiscal year, all
in reasonable detail and satisfactory in form to the Required Holder(s) and
certified by an authorized financial officer of the Company, subject to
changes resulting from year-end adjustments;
(ii) as soon as practicable and in any event within 135 days
after the end of each fiscal year, (A) consolidated statements of income
and cash flows of the Company and its Subsidiaries for such year, (B) a
consolidated balance sheet of the Company and its Subsidiaries as at the
end of such year, (C) consolidating and consolidated statements of income
and cash flows and a consolidated statement of stockholders' earnings of
Northeast Utilities and its subsidiaries for such year, and (D) a
consolidating and consolidated balance sheet of Northeast Utilities and its
subsidiaries as at the end of such year, setting forth in each case in
comparative form corresponding consolidated figures from the preceding
annual consolidated statements, in the case of the Company and its
Subsidiaries, and the preceding annual audit, in the case of Northeast
Utilities and its subsidiaries, all in reasonable detail and satisfactory
in form to the Required Holder(s) (with respect to the financial statements
for the Company and its Subsidiaries) and in conformance with the
requirements of the Securities and Exchange Commission (with respect to the
financial statements for Northeast Utilities and its subsidiaries), and, as
to the consolidated statements of Northeast Utilities and its subsidiaries,
reported on by independent public accountants of recognized national
standing selected by the Company whose report shall be without limitation
as to the scope of the audit and, as to the consolidated statements of the
Company and its Subsidiaries, certified by an authorized financial officer
of the Company;
(iii) promptly upon transmission thereof, copies of all
such financial statements, proxy statements, notices and reports as it
shall send to its public stockholders, if any, and copies of all
registration statements (without exhibits) and all reports which it files
with the Securities and Exchange Commission (or any governmental body or
agency succeeding to the functions of the Securities and Exchange
Commission);
(iv) promptly upon receipt thereof, a copy of each other
report submitted to the Company or any Subsidiary by independent
accountants in connection with any annual, interim or special audit made by
them of the books of the Company or any Subsidiary;
(v) promptly upon transmission thereof by Northeast
Utilities, copies of the Annual Reports on Form 10-K and Form U5S of
Northeast Utilities filed with the Securities and Exchange Commission (or
any governmental body or agency succeeding to the functions of the
Securities and Exchange Commission) and such other reports, financial or
other statements, notices or reports filed by Northeast Utilities pursuant
to the Exchange Act as such Significant Holder shall request, filed with
the Securities and Exchange Commission (or any governmental body or agency
succeeding to the functions of the Securities and Exchange Commission);
(vi) promptly after becoming available, any of the following
which is related to the Millstone Site:
(1) Nuclear Regulatory Commission ("NRC") Systematic
Assessment of Licensee Performance Report,
(2) NRC Inspection Report or, at the Company's option,
a summary thereof prepared by the Company,
(3) NRC Confirmatory Action Letter ("CAL"), and
(4) any other material report, notice from or other
correspondence with or submissions to the NRC or any other governmental or
regulatory agency; and
(vii) with reasonable promptness, such other financial
data as such Significant Holder may reasonably request.
Together with each delivery of financial statements required by clauses (i)
and (ii) above, the Company will deliver to each Significant Holder an
Officer's Certificate stating that there exists no Event of Default or
Default, or, if any Event of Default or Default exists, specifying the
nature and period of existence thereof and what action the Company proposes
to take with respect thereto. Together with each delivery of financial
statements required by clause (ii) above, the Company will deliver to each
Significant Holder a certificate of such accountants stating that, in
making the audit necessary for their report on such financial statements,
they have obtained no knowledge of any Event of Default or Default, or, if
they have obtained knowledge of any Event of Default or Default, specifying
the nature and period of existence thereof. Such accountants, however,
shall not be liable to anyone by reason of their failure to obtain
knowledge of any Event of Default or Default which would not be disclosed
in the course of an audit conducted in accordance with generally accepted
auditing standards. The Company also covenants that immediately after any
Responsible Officer obtains knowledge of an Event of Default or Default, it
will deliver to each Significant Holder an Officer's Certificate specifying
the nature and period of existence thereof and what action the Company
proposes to take with respect thereto.
5B. Information Required by Rule 144A. The Company covenants
that it will, upon the request of the holder of any Note, provide such
holder, and any qualified institutional buyer designated by such holder,
such financial and other information as such holder may reasonably
determine to be necessary in order to permit compliance with the
information requirements of Rule 144A under the Securities Act in
connection with the resale of Notes, except at such times as the Company is
subject to the reporting requirements of section 13 or 15(d) of the
Exchange Act. For the purpose of this paragraph 5B, the term "qualified
institutional buyer" shall have the meaning specified in Rule 144A under
the Securities Act.
5C. Inspection of Property. The Company covenants that it will
permit any Person designated by any Significant Holder in writing, at such
Significant Holder's expense, to visit and inspect any of the properties of
the Company and its Subsidiaries, to examine the corporate books and
financial records of the Company and its Subsidiaries and make copies
thereof or extracts therefrom and to discuss the affairs, finances and
accounts of any of such corporations with the principal officers of the
Company and its independent public accountants, all at such reasonable
times and as often as such Significant Holder may reasonably request.
5D. Conduct of Business and Maintenance of Existence. The
Company covenants that it and its Subsidiaries shall (i) carry out and
conduct its primary business in substantially the same manner and in
substantially the same fields as such business is now carried on and
conducted (it being understood that the Company will remain a wholly-owned
subsidiary of Northeast Utilities whose activities shall be limited to
acting as agent for CL&P, WMECO and the other co-owners of Units 1, 2 and 3
of the Millstone Nuclear Generating Station; provided, however, that the
Company may also act as operator of any other nuclear generating unit in
which Northeast Utilities or any subsidiary thereof owns an interest,
directly or indirectly), (ii) subject to paragraph 6A(3) of this Agreement,
preserve, renew and keep in full force and effect its corporate existence
and its rights, licenses, privileges and franchises necessary or desirable
in the normal conduct of its business (provided, however, that it shall not
be required to preserve any such right, license, privileges or franchise if
it shall determine in its sole discretion that the preservation thereof is
no longer necessary, desirable or permissible in the operation of its
business and it shall reasonably determine that the loss thereof is not
(and could not reasonably be expected to be) disadvantageous in any
material respect to you or any holder of any Note.
5E. Maintenance of Properties. With exception for ordinary wear
and tear, loss by fire or other casualty or condemnation, the Company and
its Subsidiaries will each cause all material properties used or useful in
the conduct of its business to be maintained and kept in good condition,
repair and working order, and cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in its
reasonable judgment may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all
times; provided, however, that neither the Company nor any of its
Subsidiaries shall be prevented from discontinuing the operation and
maintenance of any such properties if such discontinuance is, in its
reasonable judgment, desirable in the operation or maintenance of its
business and is not disadvantageous in any material respect to you or any
holder of any Note.
5F. Obligations and Taxes. The Company and its Subsidiaries
will each pay when due all taxes, assessments, fees and other governmental
charges (including, without limitation, real estate taxes, betterments,
assessments, water rates and sewer charges) and all other proper claims,
demands and liabilities (including, without limitation, claims or demands
of materialmen, mechanics, carriers, warehousemen and landlords); provided,
however, that neither the Company nor any of its Subsidiaries shall be
required to pay any such tax, assessment, fee, charge, claim, demand or
liability if the same is being contested and diligently pursued in good
faith by appropriate proceedings and if the Company or such Subsidiary
shall have set aside on its books, to the extent required by generally
accepted accounting principles applied on a consistent basis, reserves
reasonably deemed by it to be adequate with respect thereto; provided,
further, that the Company or such Subsidiary will pay or cause to be paid
in full, or will post a bond for the full amount of, any of such taxes,
assessments, fees, charges, claims, demands and liabilities forthwith prior
to the commencement of any proceeding to foreclose on any lien which
secures any of such amounts and to which any of its property may be
subject.
5G. Compliance with Laws and Other Covenants. The Company and
its Subsidiaries will each comply in all respects with all laws, rules,
ordinances, bylaws, codes, regulations and governmental orders (federal,
state and local) having applicability to it or to the business or
businesses at any time conducted by it (including, without limitation,
ERISA and the rules and regulations thereunder), or relating to its
property, the improvements thereon and/or occupancy or use thereof, except
where the failure to comply with any provision of the foregoing does not
and could not reasonably be expected to (a) have a material adverse effect
on the business, operations, affairs, condition (financial or otherwise),
properties, assets or prospects of the Company or the Company and its
Subsidiaries taken as a whole, or (b) be disadvantageous in any material
respect to you or any holder of any Note. The Company will comply in all
material respects with all of its covenants in the Millstone Plant
Agreement.
5H. Maintenance of Insurance. The Company covenants that it
shall (i) maintain insurance in such amounts and with such deductibles and
against such liabilities and hazards as customarily is maintained by other
companies operating similar businesses, and (ii) upon a request by any
holder of a Note, deliver to such holder a certificate of the insurer or
the Company's independent insurance agent summarizing the details of such
insurance in effect and stating the term of such insurance.
5I. Covenant to Secure Note Equally. The Company covenants
that, if it or any Subsidiary shall create or assume any Lien upon any of
its property or assets, whether now owned or hereafter acquired, securing
any Debt of the Company or any Subsidiary, other than Liens permitted by
the provisions of paragraph 6A (unless prior written consent to the
creation or assumption thereof shall have been obtained pursuant to
paragraph 11C), it will make or cause to be made effective provision
whereby the Notes will be secured by such Lien equally and ratably with any
and all other Debt thereby secured so long as any such other Debt shall be
so secured.
6. NEGATIVE COVENANTS.
6A. Lien, Debt and Other Restrictions. The Company covenants
that it shall not, and it shall not permit any Subsidiary to, directly or
indirectly:
6A(1). Liens -- create, assume or suffer to exist any Lien upon
any of its properties and assets, whether now owned or herewith acquired,
except:
(i) Liens for taxes, assessments and other governmental
charges not yet due or which (a) are being actively contested in good faith
by appropriate proceedings and (b) for which reserves have been established
in accordance with generally accepted accounting principles;
(ii) Statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics and materialmen (a) incurred in the ordinary course
of business for sums not yet due, (b) the payment of which is not at the
time required, (c) securing obligations which are not overdue for a period
of more than 90 days or (d) securing obligations claimed to be due and
which (i) are being actively contested in good faith by appropriate
proceedings and (ii) for which reserves have been established in accordance
with generally accepted accounting principles;
(iii) Liens (other than any Lien imposed by ERISA)
incurred or deposits made in the ordinary course of business (a) in
connection with workers' compensation, unemployment insurance and other
types of social security, or (b) to secure (or to obtain letters of credit
that secure) the performance of statutory obligations, surety and appeal
bonds, bids, performance bonds, purchase, construction or sales contracts
and other similar obligations, in each case not incurred or made in
connection with the borrowing of money, the obtaining of advances or credit
or the payment of the deferred purchase price of property;
(iv) Easements, rights-of-way, restrictions and other
similar charges or encumbrances, in each case incidental to, and not
interfering with, the ordinary conduct of the business of the Company;
(v) Liens resulting from Capitalized Lease Obligations,
conditional sale agreements or other title retention agreements provided
that the aggregate amount of Debt secured by such Liens is permitted by
paragraph 6A(2);
(vi) Liens arising from prejudgment remedies imposed
pursuant to Section 52-278c of the Connecticut General Statutes or a
similar statute under the laws of another state, provided the Company
contests the imposition of a prejudgment lien pursuant to Section 52-278d
of the Connecticut General Statutes or such other similar statute and, in
the event payment of any judgment rendered against the Company is not
adequately secured by insurance, the Company has substituted a bond for the
prejudgment remedy; and
(vii) Liens existing on the date hereof, which Liens are
described on Schedule 6A(1)(v) hereto;
6A(2). Debt -- Create, incur, assume or suffer to exist any
Debt or any Guarantee, except:
(i) Debt represented by the Notes;
(ii) Existing Debt of the Company which is described on
Schedule 6A(2) hereto; and
(iii) Current Debt not in excess of the aggregate amount of
Current Debt the Company is authorized by the Securities and Exchange
Commission to create, incur or suffer to exist, provided such Current Debt
is consistent with the Securities and Exchange Commission authorization
therefor;
6A(3). Merger and Sale of Assets -- Merge or consolidate with
any other corporation, sell, lease, transfer or otherwise dispose of all or
substantially all of its assets, except that the Company or any Subsidiary
may merge with or into another direct or indirect subsidiary of Northeast
Utilities if (A) immediately before such merger and after giving effect
thereto no Default or Event of Default shall exist, (B) the surviving
corporation expressly assumes, by an agreement satisfactory in substance
and form to the Required Holder(s) (which agreement may require in
connection with such assumption the delivery of such opinions of counsel as
the Required Holder(s) may reasonably request), the obligations of the
Company under this Agreement, the Notes and the Millstone Plant Agreement,
and (C) any authorizations, consents, approvals, exceptions or other
actions by or notices to or filings with any court, administrative or
governmental body or any other Person required for such merger or such
assumption shall have been obtained and made; and (D) the surviving
corporation shall, in the discretion of the Required Holder(s), be of a
credit quality equivalent to the credit quality of the Company.
6A(4). Restricted Investments -- Make or permit to remain
outstanding any loan or advance to, or own, purchase or acquire any stock,
obligations or securities of, or any other interest in, or make any capital
contribution to any Person, except for loans to the Northeast Utilities
System Money Pool, provided that funds contributed to the Northeast
Utilities System Money Pool by the Company or any Subsidiary are invested
only in:
(i) short-term loans made to subsidiaries of Northeast
Utilities participating in the Northeast Utilities System Money Pool,
provided such short-term loans are within amounts and on terms and
conditions approved by the Securities and Exchange Commission;
(ii) obligations issued or guaranteed by the United States
of America;
(iii) obligations issued or guaranteed by any person
controlled or supervised by and acting as an instrumentality of the United
States of America pursuant to authority granted by the Congress of the
United States;
(iv) obligations issued or guaranteed by any state or
political subdivision thereof, provided that such obligations are rated for
investment purposes at not less than "A" by Moody's Investors Service,
Inc., or by Standard & Poor's Corporation;
(v) commercial paper rated not less than "P-1" by Moody's
Investors Service, Inc., or not less than "A-1" by Standard & Poor's
Corporation;
(vi) any other investment permitted under Rule 40(a)(1) of
the Public Utility Holding Company Act of 1935, as amended.
6B. No Amendment of Millstone Plant Agreement -- The Company
covenants that it will not terminate the Millstone Plant Agreement or
amend, supplement, modify or waive any provision of the Millstone Plant
Agreement without the prior written consent of the Required Holder(s).
7. EVENTS OF DEFAULT.
7A. Acceleration. If any of the following events shall occur
and be continuing for any reason whatsoever (and whether such occurrence
shall be voluntary or involuntary or come about or be effected by operation
of law or otherwise):
(i) the Company defaults in the payment of any principal of
or Yield-Maintenance Amount payable with respect to any Note when the same
shall become due, either by the terms thereof or otherwise as herein
provided; or
(ii) the Company defaults in the payment of any interest on
any Note for more than 10 days after the date due; or
(iii) the Company, any Subsidiary, CL&P or WMECO defaults
(whether as primary obligor or as guarantor or other surety) in any payment
of principal of or interest on any other obligation for money borrowed (or
any Capitalized Lease Obligation, any obligation under a conditional sale
or other title retention agreement, any obligation issued or assumed as
full or partial payment for property whether or not secured by a purchase
money mortgage or any obligation under notes payable or drafts accepted
representing extensions of credit) beyond any period of grace provided with
respect thereto, or the Company, any Subsidiary, CL&P or WMECO fails to
perform or observe any other agreement, term or condition contained in any
agreement under which any such obligation is created (or if any other event
thereunder or under any such agreement shall occur and be continuing) and
the effect of such failure or other event is to cause, or to permit the
holder or holders of such obligation (or a trustee on behalf of such holder
or holders) to cause, such obligation to become due (or to be repurchased
by the Company, any Subsidiary, CL&P or WMECO prior to any stated
maturity), provided that the aggregate amount of all obligations as to
which such a payment default shall occur and be continuing or such a
failure or other event causing or permitting acceleration (or resale to the
Company, any Subsidiary, CL&P or WMECO) shall occur and be continuing
exceeds $15,000,000; or
(iv) any representation or warranty made by the Company
herein, by CL&P or WMECO in the Inducement Letter or by the Company, CL&P
or WMECO or any of its officers in any writing furnished in connection with
or pursuant to this Agreement shall be false in any material respect on the
date as of which made; or
(v) the Company fails to perform or observe any agreement
contained in paragraph 6 or CL&P or WMECO fails to perform or observe any
agreement contained in the Inducement Letter; or
(vi) the Company fails to perform or observe any other
agreement, term or condition contained herein and such failure shall not be
remedied within 30 days after any Responsible Officer obtains actual
knowledge thereof; or
(vii) the Company, any Subsidiary, CL&P or WMECO makes an
assignment for the benefit of creditors or is generally not paying its
debts as such debts become due; or
(viii) any decree or order for relief in respect of the
Company, any Subsidiary, CL&P or WMECO is entered under any bankruptcy,
reorganization, compromise, arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar law, whether now or hereafter in
effect (herein called the "Bankruptcy Law"), of any jurisdiction; or
(ix) the Company, any Subsidiary, CL&P or WMECO petitions or
applies to any tribunal for, or consents to, the appointment of, or taking
possession by, a trustee, receiver, custodian, liquidator or similar
official of the Company, any Subsidiary, CL&P or WMECO or of any
substantial part of the assets of the Company, any Subsidiary, CL&P or
WMECO or commences a voluntary case under the Bankruptcy Law of the United
States or any proceedings (other than proceedings for the voluntary
liquidation and dissolution of a Subsidiary) relating to the Company, any
Subsidiary, CL&P or WMECO under the Bankruptcy Law of any other
jurisdiction; or
(x) any such petition or application is filed, or any such
proceedings are commenced, against the Company or any Subsidiary, CL&P or
WMECO and the Company, such Subsidiary, CL&P or WMECO by any act indicates
its approval thereof, consent thereto or acquiescence therein, or an order,
judgment or decree is entered appointing any such trustee, receiver,
custodian, liquidator or similar official, or approving the petition in any
such proceedings, and such order, judgment or decree remains unstayed and
in effect for more than 90 days; or
(xi) any order, judgment or decree is entered in any
proceedings against the Company, CL&P or WMECO decreeing the dissolution of
the Company and such order, judgment or decree remains unstayed and in
effect for more than 90 days; or
(xii) any order, judgment or decree is entered in any
proceedings against the Company, any Subsidiary, CL&P or WMECO decreeing a
split-up of the Company, such Subsidiary, CL&P or WMECO which requires the
divestiture of assets representing a substantial part, or the divestiture
of the stock of a Subsidiary whose assets represent a substantial part, of
the consolidated assets of the Company and its Subsidiaries or the
consolidated assets of CL&P or WMECO, as the case may be (determined in
accordance with generally accepted accounting principles) or which requires
the divestiture of assets, or stock of a Subsidiary, which shall have
contributed a substantial part of the consolidated net income of the
Company and its Subsidiaries (determined in accordance with generally
accepted accounting principles) for any of the three fiscal years then most
recently ended, and such order, judgment or decree remains unstayed and in
effect for more than 60 days; or
(xiii) a final judgment in an amount in excess of
$15,000,000 is rendered against the Company, any Subsidiary, CL&P or WMECO
and, within 60 days after entry thereof, such judgment is not discharged or
execution thereof stayed pending appeal, or within 60 days after the
expiration of any such stay, such judgment is not discharged; or
(xiv) the Company or any ERISA Affiliate, in its
capacity as an employer under a Multiemployer Plan, makes a complete or
partial withdrawal from such Multiemployer Plan resulting in the incurrence
by such withdrawing employer of a withdrawal liability which is or would be
materially adverse to the business, condition (financial or otherwise) or
operations of the Company; or
(xv) the Millstone Plant Agreement, or any provision thereof
which would adversely affect the rights of the Company under Section 3(b)
thereof, or the Inducement Letter, shall at any time be terminated or shall
cease to be valid and binding on any party thereto, or shall be declared to
be null or void, or the validity or enforceability thereof shall be
contested by any party thereto, or a proceeding shall be commenced by any
governmental agency or authority having jurisdiction over any party thereto
seeking to establish the invalidity or unenforceability thereof, or any
party thereto shall deny that such party has no further liability or
obligation thereunder, or any party thereto shall default in the
performance of any provision thereof;
then (a) if such event is an Event of Default specified in clause (i) or
(ii) of this paragraph 7A, the holder of any Note (other than the Company
or any of its Subsidiaries or Affiliates) may at its option, by notice in
writing to the Company, declare such Note to be, and such Note shall
thereupon be and become, immediately due and payable at par together with
interest accrued thereon, without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Company, (b) if
such event is an Event of Default specified in clause (viii), (ix) or (x)
of this paragraph 7A with respect to the Company, all of the Notes at the
time outstanding shall automatically become immediately due and payable at
par together with interest accrued thereon, without presentment, demand,
protest or notice of any kind, all of which are hereby waived by the
Company, and (c) if such event is not an Event of Default specified in
clause (viii), (ix) or (x) of this paragraph 7A with respect to the
Company, the Required Holder(s) may at its or their option, by notice in
writing to the Company, declare all of the Notes to be, and all of the
Notes shall thereupon be and become, immediately due and payable together
with interest accrued thereon and together with the Yield-Maintenance
Amount, if any, with respect to each Note, without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Company, provided that the Yield-Maintenance Amount, if any, with respect
to each Note shall be due and payable upon such declaration only if (x)
such event is an Event of Default specified in any of clauses (i) to (vi),
inclusive, or clause (xv), of this paragraph 7A, (y) the Required Holder(s)
shall have given to the Company, at least 10 Business Days before such
declaration, written notice stating its or their intention so to declare
the Notes to be immediately due and payable and identifying one or more
such Events of Default whose occurrence on or before the date of such
notice permits such declaration and (z) one or more of the Events of
Default so identified shall be continuing at the time of such declaration.
7B. Rescission of Acceleration. At any time after any or all of
the Notes shall have been declared immediately due and payable pursuant to
paragraph 7A, the Required Holder(s) may, by notice in writing to the
Company, rescind and annul such declaration and its consequences if (i) the
Company shall have paid all overdue interest on the Notes, the principal of
and Yield-Maintenance Amount, if any, payable with respect to any Notes
which have become due otherwise than by reason of such declaration, and
interest on such overdue interest and overdue principal and
Yield-Maintenance Amount at the rate specified in the Notes, (ii) the
Company shall not have paid any amounts which have become due solely by
reason of such declaration, (iii) all Events of Default and Defaults, other
than non-payment of amounts which have become due solely by reason of such
declaration, shall have been cured or waived pursuant to paragraph 11C, and
(iv) no judgment or decree shall have been entered for the payment of any
amounts due pursuant to the Notes or this Agreement. No such rescission or
annulment shall extend to or affect any subsequent Event of Default or
Default or impair any right arising therefrom.
7C. Notice of Acceleration or Rescission. Whenever any Note
shall be declared immediately due and payable pursuant to paragraph 7A or
any such declaration shall be rescinded and annulled pursuant to paragraph
7B, the Company shall forthwith give written notice thereof to the holder
of each Note at the time outstanding.
7D. Other Remedies. If any Event of Default or Default shall
occur and be continuing, the holder of any Note may proceed to protect and
enforce its rights under this Agreement and such Note by exercising such
remedies as are available to such holder in respect thereof under
applicable law, either by suit in equity or by action at law, or both,
whether for specific performance of any covenant or other agreement
contained in this Agreement or in aid of the exercise of any power granted
in this Agreement. No remedy conferred in this Agreement upon the holder
of any Note is intended to be exclusive of any other remedy, and each and
every such remedy shall be cumulative and shall be in addition to every
other remedy conferred herein or now or hereafter existing at law or in
equity or by statute or otherwise.
8. REPRESENTATIONS, COVENANTS AND WARRANTIES. The Company
represents, covenants and warrants as follows:
8A. Organization. The Company is a corporation duly organized
and existing in good standing under the laws of the State of Connecticut.
The Company has no Subsidiaries. The Company is duly qualified and
authorized to transact business as a foreign corporation and is in good
standing in every jurisdiction in which the nature of the business
conducted by it or the ownership of its properties or assets makes such
qualification necessary, except where the failure to be in good standing or
to be so qualified or authorized would not have a material adverse effect
on the business, condition (financial or otherwise) or operations of the
Company. All of the outstanding shares of capital stock of the Company
have been duly authorized and validly issued, are fully paid and
nonassessable and are owned beneficially and of record by Northeast
Utilities free and clear of any Lien. There are no outstanding rights,
options, warrants, or agreements for the purchase from, or sale or issuance
by, the Company of any of its capital stock or any securities convertible
into or exchangeable for any of its capital stock or any such rights,
options, warrants or agreements.
8B. Power and Authority. The Company has all requisite
corporate power to conduct its business as currently conducted and as
currently proposed to be conducted. The Company has all requisite
corporate power to execute, deliver and perform its obligations under this
Agreement, the Notes and the Millstone Plant Agreement. The execution,
delivery and performance by the Company of each of this Agreement, the
Notes and the Millstone Plant Agreement have been duly authorized by all
requisite corporate action on the part of the Company. The Company has
duly executed and delivered each of this Agreement, the Notes and the
Millstone Plant Agreement, and each of this Agreement, the Notes and the
Millstone Plant Agreement constitutes the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance
with its terms.
8C. Financial Statements. The Company has furnished you with
the following financial statements, identified by a principal financial
officer of the Company: (i) a balance sheet of the Company as at December
31 in each of the years 1991 and 1992, inclusive, and statements of income
and cash flows of the Company for each such year, all certified by the
Chief Financial Officer of the Company; and (ii) a balance sheet of the
Company as at March 31 and June 30 in each of the years 1991 and 1992 and
statements of income and cash flows for the three-month and six-month
periods ended on such dates, prepared by the Company. Such financial
statements (including any related schedules and/or notes) are true and
correct in all material respects (subject, as to interim statements, to
changes resulting from audits and year-end adjustments), have been prepared
in accordance with generally accepted accounting principles consistently
followed throughout the periods involved and show all liabilities, direct
and contingent, of the Company required to be shown in accordance with such
principles. The balance sheets fairly present the condition of the Company
as at the dates thereof, and the statements of income and cash flows fairly
present the results of the operations of the Company and its cash flows for
the periods indicated. There has been no material adverse change in the
business, condition (financial or otherwise) or operations of the Company
since December 31, 1992.
8D. Actions Pending. There is no action, suit, investigation or
proceeding pending or, to the knowledge of the Company, threatened against
the Company, or any properties or rights of the Company, by or before any
court, arbitrator or administrative or governmental body which is likely to
result in any material adverse change in the business, condition (financial
or otherwise) or operations of the Company.
8E. Outstanding Debt. The Company does not have outstanding any
Debt except as set forth on Schedule 6A(2) attached hereto. There exists
no default under the provisions of any instrument evidencing such Debt or
of any agreement relating thereto.
8F. Title to Properties. The Company has good and indefeasible
title to its real properties (other than properties which it leases) and
good title to all of its other properties and assets, including the
properties and assets reflected in the balance sheet as at December 31,
1992 referred to in paragraph 8C (other than properties and assets disposed
of in the ordinary course of business), subject to no Lien of any kind
except Liens permitted by paragraph 6A. All leases necessary in any
material respect for the conduct of the business of the Company are valid
and subsisting and are in full force and effect.
8G. Taxes. The Company has filed all federal, state and other
income tax returns which, to the knowledge of the officers of the Company,
are required to be filed, and has paid all taxes as shown on such returns
and on all assessments received by it to the extent that such taxes have
become due, except such taxes as are being contested in good faith by
appropriate proceedings for which adequate reserves have been established
in accordance with generally accepted accounting principles.
8H. Conflicting Agreements and Other Matters. The Company is
not a party to any contract or agreement or subject to any charter or other
corporate restriction which materially and adversely affects its business,
property or assets, or financial condition. Neither the execution nor
delivery of this Agreement, the Notes or the Millstone Plant Agreement, nor
the offering, issuance and sale of the Notes, nor fulfillment of nor
compliance with the terms and provisions hereof, of the Notes or the
Millstone Plant Agreement will conflict with, or result in a breach of the
terms, conditions or provisions of, or constitute a default under, or
result in any violation of, or result in the creation of any Lien upon any
of the properties or assets of the Company pursuant to, the charter or
by-laws of the Company, any award of any arbitrator or any agreement
(including any agreement with stockholders), instrument, order, judgment,
decree, statute, law, rule or regulation to which the Company is subject.
The Company is not a party to, or otherwise subject to any provision
contained in, any instrument evidencing Indebtedness of the Company, any
agreement relating thereto or any other contract or agreement (including
its charter) which limits the amount of, or otherwise imposes restrictions
on the incurring of, Debt of the Company of the type to be evidenced by the
Notes except as set forth in the agreements listed in Schedule 8H attached
hereto.
8I. Offering of Notes. Neither the Company nor any agent acting
on its behalf has, directly or indirectly, offered the Notes or any similar
security of the Company for sale to, or solicited any offers to buy the
Notes or any similar security of the Company from, or otherwise approached
or negotiated with respect thereto with, any Person other than
institutional investors, and neither the Company nor any agent acting on
its behalf has taken or will take any action which would subject the
issuance or sale of the Notes to the provisions of section 5 of the
Securities Act or to the provisions of any securities or Blue Sky law of
any applicable jurisdiction.
8J. Use of Proceeds. The Company does not own or have any
present intention of acquiring any "margin stock" as defined in Regulation
G (12 CFR Part 207) of the Board of Governors of the Federal Reserve System
(herein called "margin stock"). The proceeds of sale of the Notes will be
used (i) to finance the construction by the Company on behalf of CL&P and
WMECO of Building 475 located on the Millstone Site, (ii) to repay
indebtedness incurred by the Company in connection with such construction,
(iii) to pay certain costs associated with the transactions contemplated by
this Agreement, and (iv) in the event a balance of the proceeds of the
Notes remains unspent after application thereof for the purposes set forth
in clauses (i) through (iii) hereof and to the extent permitted by the
regulatory orders referred to in paragraph 8L(i) hereof, to apply the
balance of such proceeds for the Company's general corporate purposes.
None of such proceeds will be used, directly or indirectly, for the
purpose, whether immediate, incidental or ultimate, of purchasing or
carrying any margin stock or for the purpose of maintaining, reducing or
retiring any Indebtedness which was originally incurred to purchase or
carry any stock that is currently a margin stock or for any other purpose
which might constitute this transaction a "purpose credit" within the
meaning of such Regulation G. Neither the Company nor any agent acting on
its behalf has taken or will take any action which might cause this
Agreement or the Notes to violate Regulation G, Regulation T or any other
regulation of the Board of Governors of the Federal Reserve System or to
violate the Exchange Act, in each case as in effect now or as the same may
hereafter be in effect.
8K. ERISA. No accumulated funding deficiency (as defined in
section 302 of ERISA and section 412 of the Code), whether or not waived,
exists with respect to any Plan (other than a Multiemployer Plan). No
liability to the Pension Benefit Guaranty Corporation has been or is
expected by the Company or any ERISA Affiliate to be incurred with respect
to any Plan (other than a Multiemployer Plan) by the Company or any ERISA
Affiliate which is or would be materially adverse to the business,
condition (financial or otherwise) or operations of the Company. Neither
the Company nor any ERISA Affiliate has incurred or presently expects to
incur any withdrawal liability under Title IV of ERISA with respect to any
Multiemployer Plan which is or would be materially adverse to the business,
condition (financial or otherwise) or operations of the Company. The
execution and delivery of this Agreement and the issuance and sale of the
Notes will be exempt from, or will not involve any transaction which is
subject to, the prohibitions of section 406 of ERISA and will not involve
any transaction in connection with which a penalty could be imposed under
section 502(i) of ERISA or a tax could be imposed pursuant to section 4975
of the Code. The representation by the Company in the next preceding
sentence is made in reliance upon and subject to the accuracy of your
representation in paragraph 9B.
8L. Governmental and Other Third Party Consent. Neither the
nature of the Company, nor any of its businesses or properties, nor any
relationship between the Company and any other Person, nor any circumstance
in connection with the offering, issuance, sale or delivery of the Notes is
such as to require any authorization, consent, approval, exemption or other
action by or notice to or filing with any court or administrative or
governmental body (other than routine filings after the date of funding
with the Securities and Exchange Commission and/or state Blue Sky
authorities) in connection with the execution and delivery of this
Agreement or the Millstone Plant Agreement, the offering, issuance, sale,
execution or delivery of the Notes or fulfillment of or compliance with the
terms and provisions hereof, of the Millstone Plant Agreement, of the
Inducement Letter or of the Notes, other than (i) the order of the
Securities and Exchange Commission dated December 16, 1993 under the Public
Utility Holding Company Act of 1935, as amended, and the order of the CDPUC
dated December 1, 1993 under Section 16-43 of the Connecticut General
Statutes, authorizing the execution and delivery of this Agreement and the
execution, sale, delivery and issuance of the Notes, each of which orders
has been obtained, is in full force and effect, has not been stayed,
suspended, modified, vacated or held invalid, is not being contested and
with respect to which no petition for rehearing, stay or suspension or
appeal or review has been filed, and (ii) the order of the Securities and
Exchange Commission dated September 24, 1985 under the Public Utility
Holding Company Act of 1935, as amended, and the order of the CDPUC dated
September 17, 1985, authorizing the execution, delivery and performance of
the Millstone Plant Agreement, each of which orders has been obtained, is
final and in full force and effect, has not been stayed, suspended,
modified, vacated or held invalid, is not being contested and is not
subject to petition for rehearing, stay suspension or appeal or review, and
the time period in which a petition for rehearing, stay or suspension or an
application for appeal or review of either such order must be filed has
expired. The Company has delivered to you true and complete copies of each
such order.
8M. Environmental Compliance. The Company and all of its
properties and facilities are in compliance in all respects with and to its
best knowledge have complied at all times and in all respects with all
federal, state, local and regional statutes, laws, ordinances and judicial
or administrative orders, judgments, rulings and regulations relating to
protection of the environment except, in any such case, where failure to
comply would not result in a material adverse effect on the business,
condition (financial or otherwise) or operations of the Company.
8N. Disclosure. Neither this Agreement nor any other document,
certificate or statement furnished to you by or on behalf of the Company,
CL&P, WMECO, Northeast Utilities or Northeast Utilities Service Company in
connection herewith contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
contained herein and therein not misleading. There is no fact peculiar to
the Company, CL&P or WMECO which materially adversely affects or in the
future may (so far as the Company can now foresee) materially adversely
affect the business, property or assets, or financial condition of the
Company, CL&P or WMECO and which has not been set forth in this Agreement
or in the other documents, certificates and statements furnished to you by
or on behalf of the Company, CL&P or WMECO prior to the date hereof in
connection with the transactions contemplated hereby.
8O. Permits and Other Operating Rights. The Company has all
such valid and sufficient franchises, licenses, permits, operating rights,
certificates of convenience and necessity, other authorizations from
federal, state, regional, municipal and other local regulatory bodies or
administrative agencies or other governmental bodies having jurisdiction
over the Company or any of the Company's properties, easements and
rights-of-way as are necessary for the ownership, operation and maintenance
of its business and properties, subject to exceptions and deficiencies
which do not materially and adversely affect its business and operations
considered as a whole or any material part thereof, and such franchises,
licenses, permits, operating rights, certificates of convenience and
necessity, other authorizations from federal, state, regional, municipal
and other local regulatory bodies or administrative agencies or other
governmental bodies having jurisdiction over the Company or any of the
Company's properties, easements and rights-of-way are free from burdensome
restrictions or conditions of an unusual character in the utility business
and are free from restrictions or conditions materially adverse to the
business or operations of the Company, and the Company is not in violation
thereof in any material respect.
8P. Millstone Plant Agreement. The Company has delivered to
each of you prior to the date hereof a true, correct and complete copy of
the Millstone Plant Agreement, as in effect on the date hereof, which has
not been amended or otherwise modified and no waiver has been given with
respect thereto. The Millstone Plant Agreement has been duly authorized,
executed and delivered by, and is the legal, valid and binding obligation
of, each party thereto, and is in full force and effect. No party to the
Millstone Plant Agreement is in default thereunder, nor is there any claim
of such default.
8Q. Regulatory Status of Company. The Company is not an
"investment company" or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended. The
Company is a "subsidiary company" of a "holding company" within the meaning
of the Public Utility Holding Company Act of 1935, as amended, which
holding company is registered as a "public utility holding company" under
such Act. The Company is a "public service company" under Connecticut law
which is subject to the jurisdiction of the CDPUC. The Company is not a
"public utility" or a "public service company" under the law of any state,
other than the State of Connecticut, or subject to the jurisdiction of any
commission or regulatory authority or Person in any state, other than the
CDPUC. Solely by purchasing the Notes you (i) will not be (a) a "public
utility, a "holding company" or an "affiliate" of a "holding company" or a
"subsidiary company" of a "holding company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended, (b) a " public
utility" within the meaning of the Federal Power Act, as amended, or (c) a
"public service company" under Connecticut law or a "public utility" or a
"public service company" under the law of any other state or (ii) subject
to the jurisdiction of the Federal Energy Regulatory Commission, the CDPUC
or any other commission or Person in any other state.
2. REPRESENTATIONS OF THE PURCHASER. You represent as follows:
9A. Nature of Purchase. You are not acquiring the Notes to be
purchased by you hereunder with a view to or for sale in connection with
any distribution thereof within the meaning of the Securities Act, provided
that the disposition of your property shall at all times be and remain
within your control.
9B. Source of Funds. No part of the funds being used by you to
pay the purchase price of the Notes being purchased by you hereunder
constitutes assets allocated to any separate account maintained by you.
For the purpose of this paragraph 9B, the term "separate account" shall
have the meaning specified in section 3 of ERISA.
10. DEFINITIONS. For the purpose of this Agreement, the terms
defined in the introductory sentence and in paragraphs 1 and 2 shall have
the respective meanings specified therein, and the following terms shall
have the meanings specified with respect thereto below:
10A. Yield-Maintenance Terms.
"Business Day" shall mean any day other than a Saturday, a Sunday
or a day on which commercial banks in New York City are required or
authorized to be closed.
"Called Principal" shall mean, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to paragraph 4A(2) or
4B or is declared to be immediately due and payable pursuant to paragraph
7A, as the context requires.
"Discounted Value" shall mean, with respect to the Called
Principal of any Note, the amount obtained by discounting all Remaining
Scheduled Payments with respect to such Called Principal from their
respective scheduled due dates under paragraph 4A(1) (determined by
assuming, if a Downgrade Event has occurred, that the Company is still
required to make the required prepayments under paragraph 4A(1) and any
prepayments under paragraph 4A(2) or 4B are applied to required payments
under paragraph 4A(1) in the inverse order of their maturity) to the
Settlement Date with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (applied on the same
periodic basis as that on which interest on the Notes is payable) equal to
the Reinvestment Yield with respect to such Called Principal.
"Reinvestment Yield" shall mean, with respect to the Called
Principal of any Note, the yield to maturity implied by (i) the yields
reported, as of 10:00 a.m. (New York City time) on the Business Day next
preceding the Settlement Date with respect to such Called Principal, on the
display designated as "Page 500" on the Telerate Service (or such other
display as may replace Page 500 on the Telerate Service) for actively
traded U.S. Treasury securities having a maturity equal to the Remaining
Average Life of such Called Principal as of such Settlement Date, or if
such yields shall not be reported as of such time or the yields reported as
of such time shall not be ascertainable, (ii) the Treasury Constant
Maturity Series yields reported, for the latest day for which such yields
shall have been so reported as of the Business Day next preceding the
Settlement Date with respect to such Called Principal, in Federal Reserve
Statistical Release H.15 (519) (or any comparable successor publication)
for actively traded U.S. Treasury securities having a constant maturity
equal to the Remaining Average Life of such Called Principal as of such
Settlement Date. Such implied yield shall be determined, if necessary, by
(a) converting U.S. Treasury bill quotations to bond-equivalent yields in
accordance with accepted financial practice and (b) interpolating linearly
between yields reported for various maturities.
"Remaining Average Life" shall mean, with respect to the Called
Principal of any Note, the number of years (calculated to the nearest
one-twelfth year) obtained by dividing (i) such Called Principal into (ii)
the sum of the products obtained by multiplying (a) each Remaining
Scheduled Payment of such Called Principal (but not of interest thereon) by
(b) the number of years (calculated to the nearest one-twelfth year) which
will elapse between the Settlement Date with respect to such Called
Principal and the scheduled due date under paragraph 4A(1) (determined by
assuming, if a Downgrade Event has occurred, that the Company is still
required to make the required prepayments under paragraph 4A(1) and any
prepayments under paragraph 4A(2) or 4B are applied to required payments
under paragraph 4A(1) in the inverse order of their maturity) of such
Remaining Scheduled Payment.
"Remaining Scheduled Payments" shall mean, with respect to the
Called Principal of any Note, all payments of such Called Principal and
interest thereon that would be due on or after the Settlement Date with
respect to such Called Principal under paragraph 4A(1) (determined by
assuming, if a Downgrade Event has occurred, that the Company is still
required to make the required prepayments under paragraph 4A(1) and any
prepayments under paragraph 4A(2) or 4B are applied to required payments
under paragraph 4A(1) in the inverse order of their maturity) if no payment
of such Called Principal were made prior to its scheduled due date under
paragraph 4A(1).
"Settlement Date" shall mean, with respect to the Called
Principal of any Note, the date on which such Called Principal is to be
prepaid pursuant to paragraph 4A(2) or 4B or is declared to be immediately
due and payable pursuant to paragraph 7A, as the context requires.
"Yield-Maintenance Amount" shall mean, with respect to any Note,
an amount equal to the excess, if any, of the Discounted Value of the
Called Principal of such Note over the sum of (i) such Called Principal
plus (ii) interest accrued thereon as of (including interest due on) the
Settlement Date with respect to such Called Principal. The
Yield-Maintenance Amount shall in no event be less than zero.
10B. Other Terms.
"Affiliate" shall mean any Person directly or indirectly
controlling, controlled by, or under direct or indirect common control
with, the Company, except a Subsidiary. A Person shall be deemed to
control a corporation if such Person possesses, directly or indirectly, the
power to direct or cause the direction of the management and policies of
such corporation, whether through the ownership of voting securities, by
contract or otherwise.
"Bankruptcy Law" shall have the meaning specified in clause
(viii) of paragraph 7A.
"Capitalized Lease Obligation" shall mean any rental obligation
which, under generally accepted accounting principles, would be required to
be capitalized on the books of the Company or any Subsidiary, CL&P or
WMECO, taken at the amount thereof accounted for as indebtedness (net of
interest expense) in accordance with such principles.
"CDPUC" shall mean the Connecticut Department of Public Utility
Control.
"CL&P" shall mean The Connecticut Light and Power Company, a
Connecticut corporation, and its successors and assigns.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Current Debt" shall mean, with respect to any Person, all
Indebtedness of such Person for borrowed money which by its terms or by the
terms of any instrument or agreement relating thereto matures on demand or
within one year from the date of the creation thereof and is not directly
or indirectly renewable or extendible at the option of the debtor to a date
more than one year from the date of the creation thereof, provided that
Indebtedness for borrowed money outstanding under a revolving credit or
similar agreement which obligates the lender or lenders to extend credit
over a period of more than one year shall constitute Funded Debt and not
Current Debt, even though such Indebtedness by its terms matures on demand
or within one year from the date of the creation thereof.
"Debt" shall mean Current Debt and Funded Debt.
"Downgrade Date" shall mean the first day upon which a Downgrade
Event occurs.
"Downgrade Event" shall mean either (a) the rating by Moody's
Investors Service, Inc. (or any successor thereto) of any long-term bonds
of CL&P or any long-term bonds of WMECO at less than "Baa3", or (b) the
rating by Standard & Poor's Corporation (or any successor thereto) of any
long-term bonds of CL&P or any long-term bonds of WMECO at less than
"BBB-".
"Downgrade Payment Date" shall mean each of (i) the 10th day
after the Downgrade Date, and (ii) the first and second anniversaries of
the date specified in clause (i).
"Downgrade Prepayment Amount" shall mean one-fourth of the
aggregate principal of the Notes outstanding on the Downgrade Date.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"ERISA Affiliate" shall mean any corporation which is a member of
the same controlled group of corporations as the Company within the meaning
of section 414(b) of the Code, or any trade or business which is under
common control with the Company within the meaning of section 414(c) of the
Code.
"Event of Default" shall mean any of the events specified in
paragraph 7A, provided that there has been satisfied any requirement in
connection with such event for the giving of notice, or the lapse of time,
or the happening of any further condition, event or act, and "Default"
shall mean any of such events, whether or not any such requirement has been
satisfied.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Funded Debt" shall mean, with respect to any Person, all
Indebtedness of such Person which by its terms or by the terms of any
instrument or agreement relating thereto matures, or which is otherwise
payable or unpaid, more than one year from, or is directly or indirectly
renewable or extendible at the option of the debtor to a date more than one
year (including an option of the debtor under a revolving credit or similar
agreement obligating the lender or lenders to extend credit over a period
of more than one year) from, the date of the creation thereof.
"Guarantee" shall mean, with respect to any Person, any direct or
indirect liability, contingent or otherwise, of such Person with respect to
any indebtedness, lease, dividend or other obligation of another,
including, without limitation, any such obligation directly or indirectly
guaranteed, endorsed (otherwise than for collection or deposit in the
ordinary course of business) or discounted or sold with recourse by such
Person, or in respect of which such Person is otherwise directly or
indirectly liable, including, without limitation, any such obligation in
effect guaranteed by such Person through any agreement (contingent or
otherwise) to purchase, repurchase or otherwise acquire such obligation or
any security therefor, or to provide funds for the payment or discharge of
such obligation (whether in the form of loans, advances, stock purchases,
capital contributions or otherwise), or to maintain the solvency or any
balance sheet or other financial condition of the obligor of such
obligation, or to make payment for any products, materials or supplies or
for any transportation or services regardless of the non-delivery or
non-furnishing thereof, in any such case if the purpose or intent of such
agreement is to provide assurance that such obligation will be paid or
discharged, or that any agreements relating thereto will be complied with,
or that the holders of such obligation will be protected against loss in
respect thereof. The amount of any Guarantee shall be equal to the
outstanding principal amount of the obligation guaranteed or such lesser
amount to which the maximum exposure of the guarantor shall have been
specifically limited.
"Indebtedness" shall mean, with respect to any Person, without
duplication, (i) all items (excluding items of contingency reserves or of
reserves for deferred income taxes) which in accordance with generally
accepted accounting principles would be included in determining total
liabilities as shown on the liability side of a balance sheet of such
Person as of the date on which Indebtedness is to be determined, (ii) all
indebtedness secured by any Lien on any property or asset owned or held by
such Person subject thereto, whether or not the indebtedness secured
thereby shall have been assumed, and (iii) all indebtedness of others with
respect to which such Person has become liable by way of a Guarantee.
"Inducement Letter" shall have the meaning specified in paragraph
3I.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien (statutory or otherwise) or charge of any kind (including
any agreement to give any of the foregoing, any conditional sale or other
title retention agreement, any lease in the nature thereof, and the filing
of or agreement to give any financing statement under the Uniform
Commercial Code of any jurisdiction) or any other type of preferential
arrangement for the purpose, or having the effect, of protecting a creditor
against loss or securing the payment or performance of an obligation.
"Millstone Plant Agreement" shall mean the Amended and Restated
Plant Agreement, dated as of December 1, 1984, among the Company, CL&P and
WMECO.
"Millstone Site" shall mean the approximately 500-acre site
located in Waterford, Connecticut containing the nuclear generating units
and appurtenant equipment and facilities operated by Borrower on behalf of,
among others, CL&P and WMECO pursuant to the Millstone Plant Agreement.
"Multiemployer Plan" shall mean any Plan which is a
"multiemployer plan" (as such term is defined in section 4001(a)(3) of
ERISA).
"Northeast Utilities" shall mean Northeast Utilities, a
Massachusetts Voluntary Association, and its successors and assigns.
"Northeast Utilities System Money Pool" shall mean the money pool
among Northeast Utilities, CL&P, WMECO, Public Service Company of New
Hampshire, North Atlantic Energy Corporation, Holyoke Water Power Company,
the Company, The Rocky River Realty Company, The Quinnehtuk Company and HEC
Inc. approved by the Securities and Exchange Commission in Release No.
35-25710. A copy of such approval and the application therefor is attached
hereto as Schedule 10B(2).
"Officer's Certificate" shall mean a certificate signed in the
name of the Company by its President, one of its Vice Presidents, its
Treasurer or one of its Assistant Treasurers.
"Person" shall mean and include an individual, a partnership, a
joint venture, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof.
"Plan" shall mean any "employee pension benefit plan" (as such
term is defined in section 3 of ERISA) which is or has been established or
maintained, or to which contributions are or have been made, by the Company
or any ERISA Affiliate.
"Responsible Officer" shall mean the chief executive officer,
chief operating officer, if any, chief financial officer, chief accounting
officer or assistant treasurer for finance of the Company or any other
officer of the Company involved principally in its financial administration
or its controllership function.
"Required Holder(s)" shall mean the holder or holders of at least
66-2/3% of the aggregate principal amount of the Notes from time to time
outstanding.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Significant Holder" shall mean (i) you, so long as you shall
hold (or be committed under this Agreement to purchase) any Note, or (ii)
any other holder of at least 5% of the aggregate principal amount of the
Notes at any time outstanding.
"Subsidiary" shall mean any corporation organized under the laws
of any state of the United States, Canada, or any province of Canada, which
conducts the major portion of its business in and makes the major portion
of its sales to Persons located in the United States or Canada, and at
least 51% of the total combined voting power of all classes of Voting Stock
of which shall, at the time as of which any determination is being made, be
owned by the Company either directly or through Subsidiaries.
"Transferee" shall mean any direct or indirect transferee of all
or any part of any Note purchased by you under this Agreement.
"Voting Stock" shall mean, with respect to any corporation, any
shares of stock of such corporation whose holders are entitled under
ordinary circumstances to vote for the election of directors of such
corporation (irrespective of whether at the time stock of any other class
or classes shall have or might have voting power by reason of the happening
of any contingency).
"WMECO" shall mean Western Massachusetts Electric Company, a
Massachusetts corporation, and its successors and assigns.
10C. Accounting Principles, Terms and Determinations. All
references in this Agreement to "generally accepted accounting principles"
shall be deemed to refer to generally accepted accounting principles in
effect in the United States at the time of application thereof. Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all determinations with respect to accounting matters
hereunder shall be made, and all unaudited financial statements and
certificates and reports as to financial matters required to be furnished
hereunder shall be prepared, in accordance with generally accepted
accounting principles, applied on a basis consistent with the most recent
audited consolidated financial statements of the Company and its
Subsidiaries delivered pursuant to clause (ii) of paragraph 5A or, if no
such statements have been so delivered, the most recent financial
statements referred to in clause (i) of paragraph 8C.
11. MISCELLANEOUS.
11A. Note Payments. The Company agrees that, so long as you
shall hold any Note, it will make payments of principal of, interest on and
any Yield-Maintenance Amount payable with respect to such Note, delayed
delivery fees, cancellation fee or commitment fee which comply with the
terms of this Agreement, by wire transfer of immediately available funds
for credit (not later than 12:00 noon, New York City time, on the date due)
to your account or accounts as specified in the Purchaser Schedule attached
hereto, or such other account or accounts in the United States as you may
designate in writing, notwithstanding any contrary provision herein or in
any Note with respect to the place of payment. Interest on the Notes and
the commitment fee shall be payable based on actual days outstanding and a
360-day year. You agree that, before disposing of any Note, you will make
a notation thereon (or on a schedule attached thereto) of all principal
payments previously made thereon and of the date to which interest thereon
has been paid. The Company agrees to afford the benefits of this paragraph
11A to any Transferee which shall have made the same agreement as you have
made in this paragraph 11A.
11B. Expenses. The Company agrees, whether or not the
transactions contemplated hereby shall be consummated, to pay, and save you
and any Transferee harmless against liability for the payment of, all
out-of-pocket expenses arising in connection with such transactions,
including (i) all document production and duplication charges and the fees
and expenses of any special counsel engaged by you or such Transferee in
connection with this Agreement or the Inducement Letter, the transactions
contemplated hereby and any subsequent proposed modification of, or
proposed consent under, this Agreement, whether or not such proposed
modification shall be effected or proposed consent granted, provided that
the amount payable with respect to the fees, charges and disbursements of
your special counsel in connection with the preparation, execution and
delivery of this Agreement and the Inducement Letter shall not exceed
$50,000 and (ii) the costs and expenses, including attorneys' fees,
incurred by you or such Transferee in enforcing (or determining whether or
how to enforce) any rights under this Agreement, the Inducement Letter or
the Notes or in responding to any subpoena or other legal process or
informal investigative demand issued in connection with this Agreement or
the transactions contemplated hereby or by reason of your or such
Transferee's having acquired any Note, including without limitation costs
and expenses incurred in any bankruptcy case. The obligations of the
Company under this paragraph 11B shall survive the transfer of any Note or
portion thereof or interest therein by you or any Transferee and the
payment of any Note.
11C. Consent to Amendments. This Agreement may be amended, and
the Company may take any action herein prohibited, or omit to perform any
act herein required to be performed by it, if the Company shall obtain the
written consent to such amendment, action or omission to act, of the
Required Holder(s) except that, without the written consent of the holder
or holders of all Notes at the time outstanding, no amendment to this
Agreement shall change the maturity of any Note, or change the principal
of, or the rate or time of payment of interest on or any Yield-Maintenance
Amount payable with respect to any Note, or affect the time, amount or
allocation of any prepayments, or change the proportion of the principal
amount of the Notes required with respect to any consent, amendment, waiver
or declaration. Each holder of any Note at the time or thereafter
outstanding shall be bound by any consent authorized by this paragraph 11C,
whether or not such Note shall have been marked to indicate such consent,
but any Notes issued thereafter may bear a notation referring to any such
consent. No course of dealing between the Company and the holder of any
Note nor any delay in exercising any rights hereunder or under any Note
shall operate as a waiver of any rights of any holder of such Note. As
used herein and in the Notes, the term "this Agreement" and references
thereto shall mean this Agreement as it may from time to time be amended or
supplemented.
11D. Form, Registration, Transfer and Exchange of Notes; Lost
Notes. The Notes are issuable as registered notes without coupons in
denominations of at least $100,000, except as may be necessary to reflect
any principal amount not evenly divisible by $100,000. The Company shall
keep at its principal office a register in which the Company shall provide
for the registration of Notes and of transfers of Notes. Upon surrender
for registration of transfer of any Note at the principal office of the
Company, the Company shall, at its expense, execute and deliver one or more
new Notes of like tenor and of a like aggregate principal amount,
registered in the name of such transferee or transferees. At the option of
the holder of any Note, such Note may be exchanged for other Notes of like
tenor and of any authorized denominations, of a like aggregate principal
amount, upon surrender of the Note to be exchanged at the principal office
of the Company. Whenever any Notes are so surrendered for exchange, the
Company shall, at its expense, execute and deliver the Notes which the
holder making the exchange is entitled to receive. Every Note surrendered
for registration of transfer or exchange shall be duly endorsed, or be
accompanied by a written instrument of transfer duly executed, by the
holder of such Note or such holder's attorney duly authorized in writing.
Any Note or Notes issued in exchange for any Note or upon transfer thereof
shall carry the rights to unpaid interest and interest to accrue which were
carried by the Note so exchanged or transferred, so that neither gain nor
loss of interest shall result from any such transfer or exchange. Upon
receipt of written notice from the holder of any Note of the loss, theft,
destruction or mutilation of such Note and, in the case of any such loss,
theft or destruction, upon receipt of such holder's unsecured indemnity
agreement, or in the case of any such mutilation upon surrender and
cancellation of such Note, the Company will make and deliver a new Note, of
like tenor, in lieu of the lost, stolen, destroyed or mutilated Note.
11E. Persons Deemed Owners; Participations. Prior to due
presentment for registration of transfer, the Company may treat the Person
in whose name any Note is registered as the owner and holder of such Note
for the purpose of receiving payment of principal of, interest on and any
Yield-Maintenance Amount payable with respect to such Note and for all
other purposes whatsoever, whether or not such Note shall be overdue, and
the Company shall not be affected by notice to the contrary. Subject to
the preceding sentence, the holder of any Note may from time to time grant
participations in such Note to any Person on such terms and conditions as
may be determined by such holder in its sole and absolute discretion,
provided that any such participation shall be in a principal amount of at
least $100,000.
11F. Survival of Representations and Warranties; Entire
Agreement. All representations and warranties contained herein or made in
writing by or on behalf of the Company in connection herewith shall survive
the execution and delivery of this Agreement and the Notes, the transfer by
you of any Note or portion thereof or interest therein and the payment of
any Note, and may be relied upon by any Transferee, regardless of any
investigation made at any time by or on behalf of you or any Transferee.
Subject to the preceding sentence, this Agreement and the Notes embody the
entire agreement and understanding between you and the Company and
supersede all prior agreements and understandings relating to the subject
matter hereof.
11G. Successors and Assigns. All covenants and other agreements
in this Agreement contained by or on behalf of either of the parties hereto
shall bind and inure to the benefit of the respective successors and
assigns of the parties hereto (including, without limitation, any
Transferee) whether so expressed or not.
11H. Disclosure to Other Persons. The Company acknowledges that
the holder of any Note may deliver copies of any financial statements and
other documents delivered to such holder, and disclose any other
information disclosed to such holder, by or on behalf of the Company or any
Subsidiary in connection with or pursuant to this Agreement to (i) such
holder's directors, officers, employees, agents and professional
consultants, (ii) any other holder of any Note, (iii) any Person to which
such holder offers to sell such Note or any part thereof, (iv) any Person
to which such holder sells or offers to sell a participation in all or any
part of such Note, (v) any Person from which such holder offers to purchase
any security of the Company, (vi) any federal or state regulatory authority
having jurisdiction over such holder, (vii) the National Association of
Insurance Commissioners or any similar organization or (viii) any other
Person to which such delivery or disclosure may be necessary or appropriate
(a) in compliance with any law, rule, regulation or order applicable to
such holder, (b) in response to any subpoena or other legal process or
informal investigative demand or (c) in connection with any litigation to
which such holder is a party.
11I. Notices. All written communications provided for hereunder
shall be sent by first class mail or nationwide overnight delivery service
(with charges prepaid) and (i) if to you, addressed to you at the address
specified for such communications in the Purchaser Schedule attached
hereto, or at such other address as you shall have specified to the Company
in writing, (ii) if to any other holder of any Note, addressed to such
other holder at such address as such other holder shall have specified to
the Company in writing or, if any such other holder shall not have so
specified an address to the Company, then addressed to such other holder in
care of the last holder of such Note which shall have so specified an
address to the Company, and (iii) if to the Company, addressed to it at 107
Selden Street, Berlin, Connecticut 06037, Attention: Treasurer, or at
such other address as the Company shall have specified to the holder of
each Note in writing.
11J. Payments Due on Non-Business Days. Anything in this
Agreement or the Notes to the contrary notwithstanding, any payment of
principal of or interest on any Note that is due on a date other than a
Business Day shall be made on the next succeeding Business Day. If the
date for any payment is extended to the next succeeding Business Day by
reason of the preceding sentence, the period of such extension shall be
included in the computation of the interest payable on such Business Day.
11K. Satisfaction Requirement. If any agreement, certificate or
other writing, or any action taken or to be taken, is by the terms of this
Agreement required to be satisfactory to you or to the Required Holder(s),
the determination of such satisfaction shall be made by you or the Required
Holder(s), as the case may be, in the sole and exclusive judgment
(exercised in good faith) of the Person or Persons making such
determination.
11L. Governing Law. This Agreement shall be construed and
enforced in accordance with, and the rights of the parties shall be
governed by, the laws of the State of Connecticut.
11M. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
11N. Descriptive Headings. The descriptive headings of the
several paragraphs of this Agreement are inserted for convenience only and
do not constitute a part of this Agreement.
11O. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be an original but all of which
together shall constitute one instrument.
If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterpart of this letter and return the same
to the Company, whereupon this letter shall become a binding agreement
between the Company and you.
Very truly yours,
NORTHEAST NUCLEAR ENERGY COMPANY
By: /s/John B. Keane
Title: Vice President
and Treasurer
The foregoing Agreement is
hereby accepted as of the
date first above written.
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By: /s/Lisa M. Ferraro
Vice President
PURCHASER SCHEDULE
Aggregate
Principal
Amount of
Notes to be Note Denom-
Purchased ination(s)
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA $25,000,000 $25,000,000
(1) All payments on account of Notes held by such purchaser shall be made
by wire transfer of immediately available funds for credit to:
Account No. 050-54-526
Morgan Guaranty Trust Company
of New York
23 Wall Street
New York, New York 10015
(ABA No.: 021-000-238)
Each such wire transfer shall set
forth the name of the Company, a
reference to "7.17% Senior Notes due
August 31, 2019, Security No.
66435*\D0", and the due date and
application (as among principal,
interest, Yield-Maintenance Amount,
delayed delivery fees, cancellation
fee and commitment fee) of the payment
being made.
(2) Address for all notices relating to payments:
The Prudential Insurance Company
of America
c/o Prudential Capital Corporation
Three Gateway Center
100 Mulberry Street
Newark, New Jersey 07102-4077
Attention: Investment Administration
Unit
(3) Address for all other communications and notices:
The Prudential Insurance Company
of America
c/o Prudential Power Funding
Associates
Four Gateway Center
100 Mulberry Street
Newark, New Jersey 07102-4069
Attention: Lisa Ferraro
(4) Recipient of telephonic prepayment notices:
Manager, Asset Management Unit
(201) 802-3288
(5) Tax Identification No.: 22-1211670
EXHIBIT A
FORM OF NOTE
NORTHEAST NUCLEAR ENERGY COMPANY
7.17% SENIOR NOTE DUE AUGUST 31, 2019
No. _____ [Date]
$________
FOR VALUE RECEIVED, the undersigned, Northeast Nuclear Energy Company
(herein called the "Company"), a corporation organized and existing under
the laws of the State of Connecticut, hereby promises to pay to THE
PRUDENTIAL INSURANCE COMPANY OF AMERICA, or registered assigns, the
principal sum of _________________________ DOLLARS on August 31, 2019, with
interest (computed on the basis of actual days outstanding and a 360-day
year) (a) on the unpaid balance thereof at the rate per annum determined in
accordance with paragraph 1B of the Note Agreement referred to below from
the date hereof, payable on the last day of each month, commencing December
31, 1993, until the principal hereof shall have become due and payable, and
(b) on any overdue payment (including any overdue prepayment) of principal,
any overdue payment of interest and any overdue payment of any
Yield-Maintenance Amount (as defined in the Note Agreement referred to
below), payable monthly as aforesaid (or, at the option of the registered
holder hereof, on demand), at a rate per annum from time to time equal to
the greater of (i) 2% in excess of the rate specified in clause (a) above
or (ii) 2.0% over the rate of interest publicly announced by Morgan
Guaranty Trust Company of New York from time to time in New York City as
its Prime Rate.
Payments of principal of, interest on and any Yield-Maintenance Amount
payable with respect to this Note are to be made at the main office of
Morgan Guaranty Trust Company of New York in New York City or at such other
place as the holder hereof shall designate to the Company in writing, in
lawful money of the United States of America.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to a Note Agreement, dated as of December 21, 1993
(herein called the "Agreement"), between the Company and The Prudential
Insurance Company of America and is entitled to the benefits thereof.
This Note is a registered Note and, as provided in the Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the
registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name
this Note is registered as the owner hereof for the purpose of receiving
payment and for all other purposes, and the Company shall not be affected
by any notice to the contrary.
The Company agrees to make required prepayments of principal on the
dates and in the amounts specified in the Agreement. This Note is also
subject to optional prepayment, in whole or from time to time in part, on
the terms specified in the Agreement.
In case an Event of Default, as defined in the Agreement, shall occur
and be continuing, the principal of this Note may be declared or otherwise
become due and payable in the manner and with the effect provided in the
Agreement.
This Note is intended to be performed in the State of Connecticut and
shall be construed and enforced in accordance with the law of such State.
NORTHEAST NUCLEAR ENERGY COMPANY
By:
Treasurer
EXHIBIT B
FORM OF OPINION OF COMPANY'S SPECIAL COUNSEL
Letterhead of Day, Berry & Howard
[Date of Funding]
The Prudential Insurance Company of America
c/o Prudential Power Funding Associates
Four Gateway Center
100 Mulberry Street
Newark, New Jersey 07102
Ladies and Gentlemen:
We have acted as special counsel for Northeast Nuclear Energy Company
(the "Company") in connection with the Note Agreement, dated as of December
21, 1993, between the Company and you (the "Note Agreement"), pursuant to
which the Company has issued to you today the 7.17% Senior Notes due August
31, 2019 of the Company in the aggregate principal amount of $25,000,000.
All terms used herein that are defined in the Note Agreement have the
respective meanings specified in the Note Agreement. This letter is being
delivered to you in satisfaction of the condition set forth in paragraph 3B
of the Note Agreement and with the understanding that you are purchasing
the Notes in reliance on the opinions expressed herein.
In this connection, we have examined such certificates of public
officials, certificates of officers of the Company and copies certified to
our satisfaction of corporate documents and records of the Company and of
other papers, and have made such other investigations, as we have deemed
relevant and necessary as a basis for our opinion hereinafter set forth.
We have relied upon such certificates of public officials and of officers
of the Company with respect to the accuracy of material factual matters
contained therein which were not independently established. With respect
to the opinion expressed in paragraph 3 below, we have also relied upon the
representation made by each of you in paragraph 9A of the Note Agreement.
Based on the foregoing, it is our opinion that:
1. The Company is a corporation duly organized and validly
existing in good standing under the laws of the State of Connecticut.
2. The Note Agreement, the Notes and the Millstone Plant
Agreement have been duly authorized by all requisite corporate action and
duly executed and delivered by authorized officers of the Company, and are
valid obligations of the Company, legally binding upon and enforceable
against the Company in accordance with their respective terms, except as
such enforceability may be limited by (a) bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of
creditors' rights generally and (b) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
3. It is not necessary in connection with the offering,
issuance, sale and delivery of the Notes under the circumstances
contemplated by the Note Agreement to register the Notes under the
Securities Act or to qualify an indenture in respect of the Notes under the
Trust Indenture Act of 1939, as amended.
4. The extension, arranging and obtaining of the credit
represented by the Notes do not result in any violation of Regulation G, T
or X of the Board of Governors of the Federal Reserve System.
5. The execution and delivery by the Company of the Note
Agreement, the Notes and the Millstone Plant Agreement, the offering,
issuance and sale of the Notes and fulfillment of and compliance by the
Company with the respective provisions of the Note Agreement, the Notes and
the Millstone Plant Agreement do not conflict with, or result in a breach
of the terms, conditions or provisions of, or constitute a default under,
or result in any violation of, or result in the creation of any Lien upon
any of the properties or assets of the Company pursuant to, or require any
authorization, consent, approval, exemption or other action by or notice to
or filing with any court, administrative or governmental body or other
Person (other than the orders of the Securities and Exchange Commission and
the Connecticut Department of Public Utility Control referred to in
paragraphs 6 through 9 below and other than routine filings after the date
hereof with the Securities and Exchange Commission and/or state Blue Sky
authorities) pursuant to, the charter or by-laws of the Company, any
applicable law (including any securities or Blue Sky law), statute, rule or
regulation (including, without limitation, the Public Utility Holding
Company Act of 1935 and any rule or regulation thereunder) or (insofar as
is known to us after having made due inquiry with respect thereto) any
agreement (including, without limitation, any agreement listed in Exhibit C
to the Note Agreement), instrument, order, judgment or decree to which the
Company is a party or otherwise subject.
6. The Connecticut Department of Public Utility Control has
duly issued an order dated December 1, 1993 approving the execution,
delivery and performance by the Company of the Note Agreement and the Notes
and the offering, issuance and sale of the Notes; to our knowledge after
due inquiry, such order is in full force and effect and has not been stayed
or suspended and no petition for rehearing, stay or suspension or appeal of
such order has been filed; and no further authorization, consent, approval,
exemption, or other action by or notice to or filing with the Connecticut
Department of Public Utility Control is required for the execution,
delivery or performance by the Company of the Note Agreement or the Notes
or the offering, issuance or sale of the Notes. The validity, legality and
enforceability of the Notes will not be affected if such order is stayed,
suspended, vacated, modified or otherwise held to be wholly or partly
invalid after the date hereof.
7. The Connecticut Department of Public Utility Control has
duly issued an order dated September 17, 1985 approving the execution,
delivery and performance by the Company of the Millstone Plant Agreement;
such order is final, in full force and effect and has not been stayed or
suspended, and the time for petition for rehearing, stay or suspension or
appeal of such order has expired without any such petition having been
filed or appeal having been taken; and no further authorization, consent,
approval, exemption, or other action by or notice to or filing with the
Connecticut Department of Public Utility Control is required for the
execution, delivery or performance by the Company of the Millstone Plant
Agreement.
8. The Securities and Exchange Commission has duly issued an
order dated December 16, 1993 under the Public Utility Holding Company Act
of 1935, as amended, approving the execution, delivery and performance by
the Company of the Note Agreement, the Notes and the offering and issuance
and sale of the Notes; to our knowledge after due inquiry, such order is in
full force and effect and has not been stayed or suspended and no petition
for rehearing, stay or suspension or appeal of such order has been filed;
and no further authorization, consent, approval, exemption, or other action
by or notice to or filing with the Securities and Exchange Commission under
such Act is required for the execution, delivery or performance by the
Company of the Note Agreement or the Notes or the offering, issuance or
sale of the Notes. The validity, legality and enforceability of the Notes
will not be affected if such order is stayed, suspended, vacated, modified
or otherwise held to be wholly or partly invalid after the date hereof
unless you have actual knowledge that the issuance and sale of the Notes is
in violation of the Public Utility Holding Company Act of 1935 or any rule
or regulation thereunder.
9. The Securities and Exchange Commission has duly issued an
order dated September 24, 1985 under the Public Utility Holding Company Act
of 1935, as amended, approving the execution, delivery and performance by
the Company of the Millstone Plant Agreement; such order is final, in full
force and effect and has not been stayed or suspended and the time for
petition for rehearing, stay or suspension or appeal of such orders has
expired without any such petition having been filed or appeal having been
taken; and no further authorization, consent, approval, exemption, or other
action by or notice to or filing with the Securities and Exchange
Commission under such Act is required for the execution, delivery or
performance by the Company of the Millstone Plant Agreement.
10. All amounts that may become due to you or any holder of any
Note under the Note Agreement or any Note, including, without limitation,
the principal of, interest on and Yield Maintenance Amount, if any, with
respect to the Notes and any amounts due under paragraph 11B of the Note
Agreement, are "expenses" which CL&P and WMECO are obligated to pay to the
Company under clause (i) of Subsection 3(b) of the Millstone Plant
Agreement in accordance with their respective Allocable Shares (as defined
in the Millstone Plant Agreement).
11. The Company validly holds all certificates, franchises,
licenses, permits and authorizations from governmental bodies or regulatory
authorities, including, without limitation, the Connecticut Public Utility
Control Authority and the Securities Exchange Commission under the Public
Utility Holding Company Act of 1935, as amended, free from unduly
burdensome restrictions or conditions of an unusual character, that are
necessary in any material respect for the ownership, maintenance and
operation of its properties and assets or for the conduct of its business
and, insofar as is known to us after having made due inquiry with respect
thereto, the Company is not in violation of any material term or provision
thereof in any respect which may materially adversely affect the condition
(financial or otherwise), operation, properties, assets or prospects of the
Company.
The opinions expressed above are limited to the laws of the State
of Connecticut, the Commonwealth of Massachusetts and the federal laws of
the United States.
Very truly yours,
EXHIBIT C
FORM OF OPINION OF CL&P'S SPECIAL COUNSEL
Letterhead of Day, Berry & Howard
[Date of Funding]
The Prudential Insurance Company of America
c/o Prudential Power Funding Associates
Four Gateway Center
100 Mulberry Street
Newark, New Jersey 07102
Ladies and Gentlemen:
We have acted as counsel for The Connecticut Light and Power Company
("CL&P") in connection with the letter agreement (the "Inducement Letter"),
dated as of the date hereof, from CL&P and Western Massachusetts Electric
Company ("WMECO") to you relating to the obligations of CL&P and WMECO
under the Amended and Restated Millstone Plant Agreement, dated as of
December 1, 1984, among Northeast Nuclear Energy Company (the "Company"),
CL&P and WMECO, as such obligations relate to the Note Agreement, dated as
of December 21, 1993, between the Company and you (the "Note Agreement"),
pursuant to which the Company has issued to you today the 7.17% Senior
Notes due August 31, 2019 of the Company in the aggregate principal amount
of $25,000,000. All terms used herein that are defined in the Note
Agreement have the respective meanings specified in the Note Agreement.
This letter is being delivered to you in satisfaction of the condition set
forth in paragraph 3C of the Note Agreement and with the understanding that
you are purchasing the Notes in reliance on the opinions expressed herein.
In this connection, we have examined such certificates of public
officials, certificates of officers of CL&P and copies certified to our
satisfaction of corporate documents and records of CL&P and of other
papers, and have made such other investigations, as we have deemed relevant
and necessary as a basis for our opinion hereinafter set forth. We have
relied upon such certificates of public officials and of officers of CL&P
with respect to the accuracy of material factual matters contained therein
which were not independently established.
Based on the foregoing, it is our opinion that:
1. CL&P is a corporation duly organized and validly existing in
good standing under the laws of the State of Connecticut.
2. The Inducement Letter and the Millstone Plant Agreement have
been duly authorized by all requisite corporate action and duly executed
and delivered by authorized officers of CL&P, and are valid obligations of
CL&P, legally binding upon and enforceable against CL&P in accordance with
their respective terms, except as such enforceability may be limited by (a)
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and (b) general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
3. The execution and delivery by CL&P of the Inducement Letter
and the Millstone Plant Agreement, and fulfillment of and compliance by
CL&P with the respective provisions of the Inducement Letter and the
Millstone Plant Agreement do not conflict with, or result in a breach of
the terms, conditions or provisions of, or constitute a default under, or
result in any violation of, or result in the creation of any Lien upon any
of the properties or assets of CL&P pursuant to, or require any
authorization, consent, approval, exemption or other action by or notice to
or filing with any court, administrative or governmental body or other
Person (other than the orders of the Connecticut Department of Public
Utility Control and the Securities and Exchange Commission referred to in
paragraphs 4 and 5 below and other than routine filings after the date
hereof with the Securities and Exchange Commission and/or state Blue Sky
authorities) pursuant to, the charter or by-laws of CL&P, any applicable
law (including any securities or Blue Sky law), statute, rule or regulation
or (insofar as is known to us after having made due inquiry with respect
thereto) any agreement, instrument, order, judgment or decree to which
WMECO is a party or otherwise subject.
4. The Connecticut Department of Public Utility Control has
duly issued an order dated September 17, 1985 approving the execution,
delivery and performance by CL&P of the Millstone Plant Agreement; such
order is final, in full force and effect and has not been stayed or
suspended, and the time for petition for rehearing, stay or suspension or
appeal of such order has expired without any such petition having been
filed or appeal having been taken; and no further authorization, consent,
approval, exemption, or other action by or notice to or filing with the
Connecticut Department of Public Utility Control is required for the
execution, delivery or performance by CL&P of the Inducement Letter or the
Millstone Plant Agreement.
5. The Securities and Exchange Commission has duly issued an
order dated September 24, 1985 under the Public Utility Holding Company Act
of 1935, as amended, approving the execution, delivery and performance by
CL&P of the Millstone Plant Agreement; such order is final, in full force
and effect and has not been stayed or suspended and the time for petition
for rehearing, stay or suspension or appeal of such order has expired
without any such petition having been filed or appeal having been taken;
and no further authorization, consent, approval, exemption, or other action
by or notice to or filing with the Securities and Exchange Commission under
such Act is required for the execution, delivery or performance by CL&P of
the Inducement Letter or the Millstone Plant Agreement.
6. All amounts that may become due to you or any holder of any
Note under the Note Agreement or any Note, including, without limitation,
the principal of, interest on and Yield Maintenance Amount, if any, with
respect to the Notes and any amounts due under paragraph 11B of the Note
Agreement, are "expenses" which CL&P is obligated to pay to the Company
under clause (i) of Subsection 3(b) of the Millstone Plant Agreement in
accordance with its respective Allocable Share (as defined in the Millstone
Plant Agreement).
7. CL&P validly holds all certificates, franchises, licenses,
permits and authorizations from governmental bodies or regulatory
authorities, including, without limitation, the Connecticut Department of
Public Utility Control and the Securities Exchange Commission under the
Public Utility Holding Company Act of 1935, as amended, free from unduly
burdensome restrictions or conditions of an unusual character, that are
necessary in any material respect for the ownership, maintenance and
operation of its properties and assets or for the conduct of its business
and, insofar as is known to us after having made due inquiry with respect
thereto, CL&P is not in violation of any material term or provision thereof
in any respect which may materially adversely affect the condition
(financial or otherwise), operation, properties, assets or prospects of
CL&P.
The opinions expressed above are limited to the laws of the State
of Connecticut, the Commonwealth of Massachusetts and the federal laws of
the United States.
Very truly yours,
EXHIBIT D
FORM OF OPINION OF WMECO'S SPECIAL COUNSEL
Letterhead of Day, Berry & Howard
[Date of Funding]
The Prudential Insurance Company of America
c/o Prudential Power Funding Associates
Four Gateway Center
100 Mulberry Street
Newark, New Jersey 07102
Ladies and Gentlemen:
We have acted as counsel for Western Massachusetts Electric Company
("WMECO") in connection with the letter agreement (the "Inducement
Letter"), dated as of the date hereof, from The Connecticut Light and Power
Company ("CL&P") and WMECO to you relating to the obligations of CL&P and
WMECO under the Amended and Restated Millstone Plant Agreement, dated as of
December 1, 1984, among Northeast Nuclear Energy Company (the "Company"),
CL&P and WMECO, as such obligations relate to the Note Agreement, dated as
of December 21, 1993, between the Company and you (the "Note Agreement"),
pursuant to which the Company has issued to you today the 7.17% Senior
Notes due August 31, 2019 of the Company in the aggregate principal amount
of $25,000,000. All terms used herein that are defined in the Note
Agreement have the respective meanings specified in the Note Agreement.
This letter is being delivered to you in satisfaction of the condition set
forth in paragraph 3D of the Note Agreement and with the understanding that
you are purchasing the Notes in reliance on the opinions expressed herein.
In this connection, we have examined such certificates of public
officials, certificates of officers of WMECO and copies certified to our
satisfaction of corporate documents and records of WMECO and of other
papers, and have made such other investigations, as we have deemed relevant
and necessary as a basis for our opinion hereinafter set forth. We have
relied upon such certificates of public officials and of officers of WMECO
with respect to the accuracy of material factual matters contained therein
which were not independently established.
Based on the foregoing, it is our opinion that:
1. WMECO is a corporation duly organized and validly existing
in good standing under the laws of the Commonwealth of Massachusetts.
2. The Inducement Letter and the Millstone Plant Agreement have
been duly authorized by all requisite corporate action and duly executed
and delivered by authorized officers of WMECO, and are valid obligations of
WMECO, legally binding upon and enforceable against WMECO in accordance
with their respective terms, except as such enforceability may be limited
by (a) bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and (b) general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
3. The execution and delivery by WMECO of the Inducement Letter
and the Millstone Plant Agreement, and fulfillment of and compliance by
WMECO with the respective provisions of the Inducement Letter and the
Millstone Plant Agreement do not conflict with, or result in a breach of
the terms, conditions or provisions of, or constitute a default under, or
result in any violation of, or result in the creation of any Lien upon any
of the properties or assets of WMECO pursuant to, or require any
authorization, consent, approval, exemption or other action by or notice to
or filing with any court, administrative or governmental body or other
Person (other than the order of the Securities and Exchange Commission
referred to in paragraph 4 below and other than routine filings after the
date hereof with the Securities and Exchange Commission and/or state Blue
Sky authorities) pursuant to, the charter or by-laws of WMECO, any
applicable law (including any securities or Blue Sky law), statute, rule or
regulation or (insofar as is known to us after having made due inquiry with
respect thereto) any agreement, instrument, order, judgment or decree to
which CL&P is a party or otherwise subject.
4. The Securities and Exchange Commission has duly issued an
order dated September 24, 1985 under the Public Utility Holding Company Act
of 1935, as amended, approving the execution, delivery and performance by
WMECO of the Millstone Plant Agreement; such order is final, in full force
and effect and has not been stayed or suspended and the time for petition
for rehearing, stay or suspension or appeal of such order has expired
without any such petition having been filed or appeal having been taken;
and no further authorization, consent, approval, exemption, or other action
by or notice to or filing with the Securities and Exchange Commission under
such Act is required for the execution, delivery or performance by WMECO of
the Inducement Letter or the Millstone Plant Agreement.
5. All amounts that may become due to you or any holder of any
Note under the Note Agreement or any Note, including, without limitation,
the principal of, interest on and Yield Maintenance Amount, if any, with
respect to the Notes and any amounts due under paragraph 11B of the Note
Agreement, are "expenses" which WMECO is obligated to pay to the Company
under clause (i) of Subsection 3(b) of the Millstone Plant Agreement in
accordance with its respective Allocable Share (as defined in the Millstone
Plant Agreement).
6. WMECO validly holds all certificates, franchises, licenses,
permits and authorizations from governmental bodies or regulatory
authorities, including, without limitation, the Massachusetts Department of
Public Utilities and the Securities Exchange Commission under the Public
Utility Holding Company Act of 1935, as amended, free from unduly
burdensome restrictions or conditions of an unusual character, that are
necessary in any material respect for the ownership, maintenance and
operation of its properties and assets or for the conduct of its business
and, insofar as is known to us after having made due inquiry with respect
thereto, WMECO is not in violation of any material term or provision
thereof in any respect which may materially adversely affect the condition
(financial or otherwise) operation, properties, assets or prospects of
WMECO.
The opinions expressed above are limited to the laws of the State
of Connecticut, the Commonwealth of Massachusetts and the federal laws of
the United States.
Very truly yours,
EXHIBIT E
Form of Inducement Letter
[Funding Date]
The Prudential Insurance Company
of America
c/o Prudential Power Funding Associates
Four Gateway Center
100 Mulberry Street
Newark, New Jersey 07102
Ladies and Gentlemen:
Reference is made to the Note Agreement dated as of December 21,
1993 (the "Note Agreement") between you and Northeast Nuclear Energy
Company (the "Company") providing for the issuance and sale by the Company
to you of the 7.17% Senior Notes due August 31, 2019 of the Company in the
aggregate principal amount of $25,000,000 (the "Notes"). Terms not
otherwise defined herein are used herein as defined in the Note Agreement.
The undersigned hereby certifies that attached hereto as Exhibit
A is a true and complete copy of the Amended and Restated Millstone Plant
Agreement dated as of December 1, 1984, by and among the Company, The
Connecticut Light and Power Company and Western Massachusetts Electric
Company (the "Millstone Plant Agreement"), together with all supplements
and amendments thereto.
To induce you to purchase the Notes pursuant to the Note
Agreement, and in satisfaction of one of the conditions precedent to your
obligation to purchase the Notes pursuant to the Note Agreement, the
undersigned:
(a) represent to you that all amounts due you or any holder of
any Note under the Note Agreement or any Note, including, without
limitation, the principal of, interest on and Yield Maintenance Amount, if
any, with respect to the Notes and any amounts due under paragraph 11B of
the Note Agreement, are "expenses" which the undersigned are obligated to
pay as provided in clause (i) of Subsection 3(b) of the Millstone Plant
Agreement in accordance with their respective Allocable Shares (as defined
in the Millstone Plant Agreement);
(b) covenant with you and any holder of any Note as follows:
(1) The undersigned will perform all of their obligations to the
Company under the Millstone Plant Agreement. So long as any Notes are
outstanding or the Company has any obligations to you or the holders of the
Notes under the Note Agreement or the Notes, the obligations of the
undersigned under clause (i) of Subsection 3(b) of the Millstone Plant
Agreement shall be absolute and unconditional and shall not be affected by
any circumstances, including, without limitation, any setoff, counterclaim,
recoupment, defense or other right which either of the undersigned may have
against the Company or anyone else (including, without limitation, the
other party to this letter agreement) for any reason whatsoever or any
failure or claimed failure of the Company to perform any obligation under
the Millstone Plant Agreement.
(2) The undersigned will not during the term of the Millstone
Plant Agreement terminate the Millstone Plant Agreement or, without the
written consent of the Required Holder(s), amend, supplement or modify any
provision of the Millstone Plant Agreement so as to adversely effect the
rights of the Company under Section 3(b) thereof. The undersigned will
make payment of any amount which the undersigned are obligated to pay to
the Company or any successor thereto or permitted assignee thereof pursuant
to clause (i) of subsection 3(b) of the Millstone Plant Agreement with
respect to any amounts due to you or any holder of any Note under the Note
Agreement or any Note notwithstanding any termination of the Millstone
Plant Agreement in accordance with its terms.
(3) You and any other holder of any Note shall constitute
third-party beneficiaries of, and shall be entitled to enforce directly
against the undersigned, the obligations of the undersigned under clause
(i) of Subsection 3(b) of the Millstone Plant Agreement with respect to any
amounts due to you or such holder under the Note Agreement or any Note.
(4) Each of the undersigned will deliver to each Significant
Holder in quadruplicate:
(i) as soon as practicable and in any event within 60 days
after the end of each quarterly period (other than the last quarterly
period) in each fiscal year, consolidated statements of income,
stockholders' equity and cash flows of the undersigned and its subsidiaries
for the period from the beginning of the current fiscal year to the end of
such quarterly period, and a consolidated balance sheet of the undersigned
and its subsidiaries as at the end of such quarterly period, setting forth
in each case in comparative form figures for the corresponding period in
the preceding fiscal year, all in reasonable detail and satisfactory in
form to the Required Holder(s) and certified by an authorized financial
officer of the undersigned, subject to changes resulting from year-end
adjustments; provided, however, that delivery pursuant to clause (iii)
below of copies of the Quarterly Report on Form 10-Q of the undersigned for
such quarterly period, together with any exhibits thereto containing the
financial statements of the undersigned and its subsidiaries, filed with
the Securities and Exchange Commission shall be deemed to satisfy the
requirements of this clause (i);
(ii) as soon as practicable and in any event within 135 days
after the end of each fiscal year, consolidating and consolidated
statements of income and cash flows and a consolidated statement of
stockholders' equity of the undersigned and its subsidiaries for such year,
and a consolidated balance sheet of the undersigned and its subsidiaries as
at the end of such year, setting forth in each case in comparative form
corresponding consolidated figures from the preceding annual audit;
provided, however, that delivery pursuant to clause (iii) below of copies
of the Annual Report on Form 10-K of the undersigned for such fiscal year
filed with the Securities and Exchange Commission, together with any
exhibits thereto containing the financial statements of the undersigned and
its subsidiaries, shall be deemed to satisfy the requirements of this
clause (ii);
(iii) promptly upon transmission thereof, copies of all such
financial statements, proxy statements, notices and reports as it shall
send to its public stockholders, if any, and copies of all registration
statements on Form S-1, S-2 or S-3 (without exhibits) and all reports on
Form 10-K, 10-Q or 8-K which it files with the Securities and Exchange
Commission (or any governmental body or agency succeeding to the functions
of the Securities and Exchange Commission); and
(iv) with reasonable promptness, such other financial data
as such Significant Holder may reasonably request.
Together with each delivery of financial statements required by
clauses (i) and (ii) above, each of the undersigned will deliver to each
Significant Holder an officer's certificate stating as to itself, and, to
its knowledge after due inquiry as to the Company, that there exists no
Event of Default or Default or failure by the undersigned to perform any
obligation under the Millstone Plant Agreement, or, if any Event of
Default, Default or such default exists, specifying the nature and period
of existence thereof and what action the undersigned proposes to take with
respect thereto; and
(c) represent and warrant as follows:
(1) Each of the undersigned is a corporation duly organized and
existing in good standing under the laws of the jurisdiction of its
organization and is qualified to do business in each state or other
jurisdiction in which the nature of its business makes such qualification
necessary.
(2) Each of the undersigned has the corporate power and
authority to execute and deliver this letter and the Millstone Plant
Agreement. The execution and delivery of this letter and the Millstone
Plant Agreement have been duly authorized by all requisite corporate action
on behalf of the undersigned. This letter and the Millstone Plant
Agreement have been duly executed and delivered by authorized officers of
the undersigned and are valid obligations of the undersigned, legally
binding upon and enforceable against the undersigned in accordance with
their respective terms.
(3) Neither the execution and delivery by them of this letter
and the Millstone Plant Agreement nor the performance or observance by them
of the terms, conditions or provisions hereof or thereof (i) does or will
conflict with or violate any existing law or governmental rule, regulation
or order or any existing judicial or administrative order or decree binding
on them or any of their properties; (ii) does or will conflict with or
violate their amended certificate of incorporation or articles of
organization, as the case may be, or bylaws as in effect on the date
hereof, or (iii) does or will require, under any existing law or
governmental rule, regulation, or order or any existing judicial or
administrative order or decree, on the part of them or Northeast Utilities
or any other subsidiary of Northeast Utilities, the consent or approval of,
the giving of notice to, the registration with or the taking of any other
action in respect of, any governmental or public authority or agency,
except as has been obtained or made and is in full force and effect; and
(d) Authorize and direct Day, Berry & Howard, special counsel to
each of the undersigned, to render to you the opinions referred to in
paragraph 3C and 3D of the Note Agreement.
Very truly yours,
THE CONNECTICUT LIGHT AND
POWER COMPANY
By:
Title:
WESTERN MASSACHUSETTS ELECTRIC
COMPANY
By:
Title:
SCHEDULE 4A(1)
AMORTIZATION SCHEDULE
(See Attached)
SCHEDULE 6A(1)(v)
EXISTING LIENS
None.
SCHEDULE 6A(2)
DEBT
$14,000,000 aggregate principal amount owed to the Northeast
Utilities System Money Pool.
SCHEDULE 8H
LIST OF AGREEMENTS RESTRICTING DEBT
1. 364 Day Revolving Credit Agreement dated December 3, 1992 among CL&P,
WMECO, Northeast Utilities, Holyoke Water Power Company, the Company,
The Rocky River Realty Company, Shawmut Bank Connecticut as successor
to The Connecticut National Bank, and Northeast Utilities Service
Company, as Agent.
2. 364 Day Revolving Credit Agreement dated December 3, 1992 among CL&P,
WMECO, Northeast Utilities, Holyoke Water Power Company, the Company,
The Rocky River Realty Company, Fleet Bank, N.A., and Northeast
Utilities Service Company, as Agent.
3. 364 Day Revolving Credit Agreement dated December 3, 1992 among CL&P,
WMECO, Northeast Utilities, Holyoke Water Power Company, the Company,
The Rocky River Realty Company, State Street Bank and Trust Company,
and Northeast Utilities Service Company, as Agent.
4. Three Year Revolving Credit Agreement dated December 3, 1992 among
CL&P, WMECO, Northeast Utilities, Holyoke Water Power Company, the
Company, The Rocky River Realty Company, Shawmut Bank Connecticut as
successor to The Connecticut National Bank, and Northeast Utilities
Service Company, as Agent.
5. Three Year Revolving Credit Agreement dated December 3, 1992 among
CL&P, WMECO, Northeast Utilities, Holyoke Water Power Company, the
Company, The Rocky River Realty Company, Fleet Bank, N.A., and
Northeast Utilities Service Company, as Agent.
6. Three Year Revolving Credit Agreement dated December 3, 1992 among
CL&P, WMECO, Northeast Utilities, Holyoke Water Power Company, the
Company, The Rocky River Realty Company, State Street Bank and Trust
Company, and Northeast Utilities Service Company, as Agent.
SCHEDULE 10B(2)
MONEY POOL APPLICATION AND APPROVAL
(See Attached)