-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, C4/FKRlAaavk2A6KSH961M0SLspxT4FAo4T9HCacyAyl5lHCcrkiQuz2ePMLecoB LORSs0RLconuPGPQEXR+HA== 0000950109-94-002167.txt : 19941122 0000950109-94-002167.hdr.sgml : 19941122 ACCESSION NUMBER: 0000950109-94-002167 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 12 FILED AS OF DATE: 19941118 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONNECTICUT LIGHT & POWER CO CENTRAL INDEX KEY: 0000023426 STANDARD INDUSTRIAL CLASSIFICATION: 4911 IRS NUMBER: 060303850 STATE OF INCORPORATION: CT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 033-56537 FILM NUMBER: 94561223 BUSINESS ADDRESS: STREET 1: 707 SELDEN ST CITY: BERLIN STATE: CT ZIP: 06037-1616 BUSINESS PHONE: 2036655000 S-3 1 FORM S-3 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 18, 1994 REGISTRATION NO. 33- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 -------------- THE CONNECTICUT LIGHT AND POWER COMPANY CL&P CAPITAL, L.P. (EXACT NAME OF REGISTRANT (EXACT NAME OF REGISTRANT AS SPECIFIED AS SPECIFIED IN CHARTER) IN LIMITED PARTNERSHIP AGREEMENT) DELAWARE CONNECTICUT (STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) APPLIED FOR 06-0303850 (I.R.S. EMPLOYER IDENTIFICATION NO.) SELDEN STREET SELDEN STREET BERLIN, CT 06037 BERLIN, CT 06037 (203) 665-5000 (203) 665-5000 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANTS' PRINCIPAL EXECUTIVE OFFICES) ROBERT E. BUSCH, EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER THE CONNECTICUT LIGHT AND POWER COMPANY SELDEN STREET BERLIN, CONNECTICUT 06037 (203) 665-5000 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE) WITH COPIES TO: M. LOUISE TURILLI, ESQ. DAVID P. FALCK, ESQ. DAY, BERRY & HOWARD WINTHROP, STIMSON, PUTNAM & ROBERTS CITYPLACE I ONE BATTERY PARK PLAZA HARTFORD, CONNECTICUT 06103-3499 NEW YORK, NEW YORK 10004-1490 APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to time, after the Registration Statement becomes effective, as determined by market conditions and other factors. -------------- If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [_] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, please check the following box. [X] CALCULATION OF REGISTRATION FEE - ------------------------------------------------------------------------------- - -------------------------------------------------------------------------------
PROPOSED PROPOSED TITLE OF EACH AMOUNT MAXIMUM MAXIMUM AMOUNT OF CLASS OF SECURITIES TO BE OFFERING PRICE AGGREGATE OFFERING REGISTRATION BEING REGISTERED REGISTERED(1) PER UNIT(1)(2)(3) PRICE(1)(2)(3) FEE(4) - ------------------------------------------------------------------------------------------ CL&P Capital, L.P. Preferred Securities.. - ------------------------------------------------------------------------------------------ The Connecticut Light and Power Company Subordinated Debentures............ - ------------------------------------------------------------------------------------------ The Connecticut Light and Power Company Guaranty with respect to Preferred Securities(5)......... - ------------------------------------------------------------------------------------------ Total................ $125,000,000 100% $125,000,000 $43,103.45 - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------
(1) There are being registered hereunder Preferred Securities of CL&P Capital, L.P. and Subordinated Debentures of The Connecticut Light and Power Company (which may be distributed to holders of such Preferred Securities upon a dissolution of CL&P Capital, L.P. for which no separate consideration will be received, or separately issued to the public or institutional investors) with an aggregate initial offering price not to exceed $125,000,000. The amount to be registered, the proposed maximum offering price per unit and the proposed maximum aggregate offering price for each class of securities being registered hereunder have been omitted in accordance with General Instruction II.D. of Form S-3. (2) Estimated solely for the purpose of determining the registration fee. (3) Exclusive of accrued interest and distributions, if any. (4) The amount of the registration fee has been calculated in accordance with Rule 457(o) under the Securities Act of 1933. (5) There is also being registered hereunder a Guaranty of The Connecticut Light and Power Company in connection with the issuance of Preferred Securities of CL&P Capital, L.P., for which no separate consideration will be received. -------------- THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ +INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A + +REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE + +SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY + +OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT + +BECOMES EFFECTIVE. THIS PROSPECTUS SUPPLEMENT SHALL NOT CONSTITUTE AN OFFER + +TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF + +THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD + +BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS + +OF ANY SUCH STATE. + ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ SUBJECT TO COMPLETION, DATED NOVEMBER , 1994 PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED NOVEMBER , 1994 PREFERRED SECURITIES CL&P CAPITAL % CUMULATIVE MONTHLY INCOME PREFERRED SECURITIES (MIPS*), SERIES A (LIQUIDATION PREFERENCE $25 PER PREFERRED SECURITY) GUARANTEED TO THE EXTENT THE ISSUER HAS FUNDS LEGALLY AVAILABLE THEREFOR, AS SET FORTH HEREIN, BY THE CONNECTICUT LIGHT AND POWER COMPANY ---------- The % Cumulative Monthly Income Preferred Securities, Series A (the "Series A Preferred Securities"), representing the limited partner interests offered hereby, are being issued by CL&P Capital, L.P., a limited partnership formed under the laws of the State of Delaware ("CL&P Capital"). The sole general partner of CL&P Capital is The Connecticut Light and Power Company ("CL&P" or the "General Partner"). CL&P Capital exists for the sole purpose of issuing partner interests and lending the proceeds thereof to CL&P. The Series A Preferred Securities are the initial series of preferred securities representing limited partner interests in CL&P Capital ("Preferred Securities") and will rank pari passu with all other series of Preferred Securities which may be issued by CL&P Capital. The Preferred Securities, including the Series A Preferred Securities, will have a preference with respect to cash distributions and amounts payable on redemption or liquidation over the General Partner's interest in CL&P Capital. Holders of the Series A Preferred Securities will be entitled to receive, to the extent funds are available, cumulative preferential cash distributions ("Dividends"), at an annual rate of % of the stated liquidation preference of $25 per Series A Preferred Security, accruing from the date of original issuance and payable monthly in arrears on the last day of each calendar month of each year, commencing , 199 . The payment of Dividends and payments in liquidation or redemption with respect to the Series A Preferred Securities, in each case out of funds on hand legally available therefor held by CL&P Capital, are guaranteed by CL&P to the extent described herein and in the accompanying Prospectus (the "Guaranty"). See "Description of the Guaranty" in the accompanying Prospectus. If CL&P fails to make interest payments on its % Junior Subordinated Deferrable Interest Debentures, Series A (the "Series A Subordinated Debentures") to be purchased by CL&P Capital with the proceeds of the Series A Preferred Securities and the General Partner's related capital contribution to CL&P Capital, CL&P Capital will not have sufficient funds to pay Dividends on the Series A Preferred Securities. The Guaranty does not cover payment of Dividends when CL&P Capital does not have sufficient funds to pay such Dividends. In such event the remedy of a holder of Series A Preferred Securities is to enforce the rights of CL&P Capital under the Series A Subordinated Debentures. See "Description of the Subordinated Debentures-- Enforcement of Certain Rights by Holders of Preferred Securities" and "Description of the Guaranty" in the accompanying Prospectus. The obligations of CL&P under the Guaranty are subordinate and junior in right of payment to all general liabilities of CL&P and the obligations of CL&P under the Series A Subordinated Debentures are subordinate and junior in right of payment to all present and future Senior Indebtedness (as defined herein) of CL&P, which aggregated approximately $ at , 1994. Under the Indenture (as defined herein), CL&P has the right to extend the interest payment period from time to time for the Series A Subordinated Debentures to a period not exceeding 60 consecutive months, and, as a consequence, Dividends on the Series A Preferred Securities will be deferred by CL&P Capital during any such extended interest payment period. In the event CL&P exercises its right to extend the interest payment periods on the Series A Subordinated Debentures, CL&P may not declare or pay dividends on, or redeem, purchase or acquire, any shares of its capital stock during such extension period. CL&P Capital and CL&P currently believe that the extension of an interest payment period is unlikely. See "Description of the Preferred Securities--Voting Rights" and "Description of the Subordinated Debentures--Option to Extend Interest Payment Period" in the accompanying Prospectus. The Series A Preferred Securities are subject to redemption at the option of the General Partner in whole or in part, from time to time, on or after , , at $25 per Series A Preferred Security plus accumulated and unpaid Dividends to the date fixed for redemption (the "Redemption Price"). The Series A Preferred Securities shall be redeemed at the Redemption Price from the proceeds of any redemption or payment at maturity of the Series A Subordinated Debentures. See "Certain Terms of the Series A Preferred Securities--Optional Redemption" and "--Mandatory Redemption" herein. In addition, upon the occurrence of certain special events (i) the Series A Preferred Securities will be subject to redemption and (ii) the Subordinated Debentures may be distributed to holders of the Preferred Securities in liquidation of CL&P Capital. See "Certain Terms of the Series A Preferred Securities--Investment Company Act Event Redemption or Distribution" and "--Tax Event Redemption or Distribution" herein. In the event of the liquidation of CL&P Capital, holders of the Series A Preferred Securities will be entitled to receive, for each Series A Preferred Security, a liquidation preference of $25 plus accumulated and unpaid Dividends to the date of payment unless, in connection with such liquidation, the Series A Subordinated Debentures are distributed to the holders of Series A Preferred Securities. See "Description of the Preferred Securities--Liquidation Distribution" in the accompanying Prospectus. Application has been made to list the Series A Preferred Securities on the New York Stock Exchange. SEE "CERTAIN INVESTMENT CONSIDERATIONS" FOR CERTAIN INFORMATION RELEVANT TO AN INVESTMENT IN THE SERIES A PREFERRED SECURITIES, INCLUDING THE PERIOD DURING WHICH AND CIRCUMSTANCES UNDER WHICH PAYMENT OF DIVIDENDS ON THE SERIES A PREFERRED SECURITIES MAY BE DEFERRED AND THE RELATED UNITED STATES FEDERAL INCOME TAX CONSEQUENCES. ---------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ----------
INITIAL PUBLIC UNDERWRITING PROCEEDS TO CL&P OFFERING PRICE COMMISSIONS(1) CAPITAL(2)(3) -------------- -------------- ---------------- Per Series A Preferred Security................ $ (2) $ Total................... $ (2) $
- ----- (1) CL&P Capital and CL&P have agreed to indemnify the several Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended. See "Underwriting." (2) As the proceeds of the sale of the Series A Preferred Securities will be loaned to CL&P, under the Underwriting Agreement CL&P has agreed to pay to the Underwriters $ per Series A Preferred Security (or $ in the aggregate); provided that such compensation will be $ per Series A Preferred Security sold to certain institutions. Therefore, to the extent that Series A Preferred Securities are sold to such institutions, the actual amount of Underwriters' compensation will be less than the amount specified above. See "Underwriting." (3) Expenses of the offering, excluding underwriting commissions, which are payable by CL&P are estimated to be $ . ---------- The Series A Preferred Securities offered hereby are offered severally by the Underwriters, as specified herein, subject to receipt and acceptance by them and subject to their right to reject any order in whole or in part. It is expected that delivery of the Series A Preferred Securities will be made only in book-entry form through the facilities of The Depository Trust Company on or about , 1994. - ----- * An application has been filed by Goldman, Sachs & Co. with the United States Patent and Trademark Office for the registration of the MIPS servicemark. GOLDMAN, SACHS & CO. SALOMON BROTHERS INC MERRILL LYNCH & CO. MORGAN STANLEY & CO. INCORPORATED PRUDENTIAL SECURITIES INCORPORATED SMITH BARNEY INC. ---------- THE DATE OF THIS PROSPECTUS SUPPLEMENT IS , 1994. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES A PREFERRED SECURITIES AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. The following information supplements and should be read in conjunction with the information contained in the accompanying Prospectus. Each of the capitalized terms used in this Prospectus Supplement has the meaning set forth in this Prospectus Supplement or in the accompanying Prospectus. CERTAIN INVESTMENT CONSIDERATIONS Prospective purchasers of the Series A Preferred Securities should carefully review the information contained elsewhere in this Prospectus Supplement and in the accompanying Prospectus and should particularly consider the following matters: SUBORDINATE OBLIGATIONS OF CL&P UNDER THE GUARANTY AND THE SUBORDINATED DEBENTURES CL&P's obligations under the Guaranty are subordinate and junior in right of payment to all general liabilities of CL&P, and its obligations under the Series A Subordinated Debentures are subordinate and junior in right of payment to all present and future Senior Indebtedness (as defined in the accompanying Prospectus) of CL&P. At , 1994, the Senior Indebtedness of CL&P aggregated $ . There are no terms in the Series A Preferred Securities, the Series A Subordinated Debentures or the Guaranty that limit CL&P's ability to incur additional indebtedness, including indebtedness that ranks senior to the Series A Subordinated Debentures and the Guaranty. The Guaranty guarantees payment to the holders of the Series A Preferred Securities of accumulated and unpaid monthly Dividends, amounts payable on redemption, and amounts payable on liquidation of CL&P Capital, in each case, however, only to the extent that CL&P Capital has funds on hand legally available therefor. If CL&P were to default in its obligation to pay interest or amounts payable on redemption or maturity of the Series A Subordinated Debentures, CL&P Capital would lack legally available funds for the payment of Dividends or amounts payable on redemption or maturity of the Series A Preferred Securities, and in such event holders of the Series A Preferred Securities would not be able to rely upon the Guaranty for payment of such amounts. Instead, holders of the Series A Preferred Securities would be required to seek enforcement of CL&P Capital's rights against CL&P pursuant to the terms of the Indenture (as defined below). See "Description of the Guaranty--Status of the Guaranty" and "Description of the Subordinated Debentures--Subordination" in the accompanying Prospectus. OPTION TO EXTEND INTEREST PAYMENT PERIOD AND TAX CONSEQUENCES Under the Indenture, CL&P has the right from time to time, so long as no Event of Default has occurred and is continuing, to extend the interest payment period for the Series A Subordinated Debentures for up to 60 consecutive months, and, as a consequence, Dividends on the Series A Preferred Securities will be deferred by CL&P Capital during any such extended interest payment period. Dividends in arrears on the Series A Preferred Securities after the monthly payment date therefor will, to the extent permitted by law, accumulate additional distributions thereon at the distribution rate per annum for the Series A Preferred Securities. The term "Dividends" as used herein includes, as applicable, monthly distributions and distributions on monthly distributions in arrears. In the event CL&P exercises its right to extend the interest payment periods on the Series A Subordinated Debentures, CL&P may not declare or pay dividends on, or redeem, purchase or acquire, any shares of its capital stock during such extension period. CL&P Capital and CL&P currently believe that the extension of an interest payment period is unlikely. See "Description of S-2 Preferred Securities--Voting Rights" and "Description of the Subordinated Debentures--Option to Extend Interest Payment Period" in the accompanying Prospectus. Should an extended interest payment period occur, CL&P Capital will continue to accrue income for United States federal income tax purposes, which will be allocated, but not distributed, to holders of the Series A Preferred Securities. As a result, a holder will include such interest in gross income for United States federal income tax purposes in advance of the receipt of cash, and will not receive the cash related to such income from CL&P Capital if the holder disposes of the Series A Preferred Securities prior to the record date for payment of Dividends. See "United States Taxation--Potential Extension of Interest Payment Period." CL&P CAPITAL CL&P Capital is a limited partnership formed under the Delaware Revised Uniform Limited Partnership Act (the "Partnership Act") on November 16, 1994. All of its general partner interests are owned by CL&P, which, as General Partner, shall maintain a capital account balance equal to at least 3% of the total positive capital account balances for CL&P Capital. In order to satisfy this requirement, it is expected that the General Partner will make an additional capital contribution to CL&P Capital in connection with the issuance of each series of the Preferred Securities. As a limited partnership, all of the business and affairs of CL&P Capital will be managed by the General Partner. CL&P Capital has been created solely for the purpose of issuing the Preferred Securities and lending the proceeds thereof, plus the General Partner's capital contributions, to CL&P. Such loans will be evidenced by the Junior Subordinated Deferrable Interest Debentures (the "Subordinated Debentures") issued by CL&P under an Indenture dated as of , 199 (the "Indenture") between CL&P and Bankers Trust Company, as trustee (the "Trustee"), including the Series A Subordinated Debentures to be issued concurrently with the issuance of the Series A Preferred Securities. The Subordinated Debentures will be the only assets of CL&P Capital and the only revenues of CL&P Capital will be the interest on the Subordinated Debentures. Assuming a holder of Preferred Securities acts in conformity with the Amended and Restated Limited Partnership Agreement of CL&P Capital (the "Limited Partnership Agreement"), such holder (other than the General Partner) will not be liable for the debts, obligations and liabilities of CL&P Capital, whether arising in contract, tort or otherwise, solely by reason of being a limited partner of CL&P Capital, subject to the obligation of a limited partner to repay any funds erroneously distributed to it. The place of business of CL&P Capital is the principal executive offices of the General Partner at Selden Street, Berlin, Connecticut 06037 and its telephone number is (203) 665-5000. CL&P CL&P is a wholly-owned subsidiary of Northeast Utilities ("NU"). The four wholly-owned operating subsidiaries of NU--CL&P, Public Service Company of New Hampshire, Western Massachusetts Electric Company and Holyoke Water Power Company--furnish electric service in portions of Connecticut and New Hampshire and in western Massachusetts. CL&P is a Connecticut corporation, organized in 1907, and is qualified as a foreign corporation in Massachusetts and New Hampshire. CL&P is the largest electric utility in Connecticut and is engaged principally in the production, purchase, transmission, distribution and sale of electricity at retail for residential, commercial, industrial and municipal purposes within Connecticut. The principal executive offices of CL&P are located at Selden Street, Berlin, Connecticut 06037 (telephone 203-665-5000). S-3 USE OF PROCEEDS The proceeds to be received by CL&P Capital from the sale of the Series A Preferred Securities offered hereby will be loaned to CL&P and will be applied by CL&P to the redemption, reacquisition or payment at maturity of all or a portion of CL&P's 1989 Series, 9% Preferred Stock, par value $25 per share, of which 3,000,000 shares are issued and outstanding as of the date hereof, and 1989 Dutch Auction Rate Transferable Securities, par value $25 per share, of which 2,000,000 shares are issued and outstanding as of the date hereof. CERTAIN TERMS OF THE SERIES A PREFERRED SECURITIES GENERAL All of the general partner interests in CL&P Capital are owned by CL&P. The Limited Partnership Agreement authorizes the General Partner to cause CL&P Capital to issue one or more series of Preferred Securities. The Series A Preferred Securities are the first series so issued. All series of the Preferred Securities will rank equally, and will have a preference over the general partner interests in CL&P Capital, with respect to Dividends and amounts payable on redemption or liquidation. The Limited Partnership Agreement does not permit the incurrence of any indebtedness by CL&P Capital. The summary of certain material terms and provisions of the Series A Preferred Securities set forth below does not purport to be complete and is subject to, and qualified in its entirety by reference to, the Limited Partnership Agreement which has been filed as an exhibit to the Registration Statement of which this Prospectus Supplement and the accompanying Prospectus form a part, and the Partnership Act. The following information should be read in conjunction with the statements under "Description of the Preferred Securities" in the accompanying Prospectus. DIVIDENDS The Series A Preferred Securities will be entitled to Dividends out of funds on hand legally available therefor held by CL&P Capital at the annual rate of % of the stated liquidation preference of $25 per Series A Preferred Security, payable monthly in arrears on the last day of each calendar month. The General Partner may cause CL&P Capital to make distributions on the general partner interests of CL&P Capital only after payment in full of all Dividends accrued on the Series A Preferred Securities and any other outstanding Preferred Securities of CL&P Capital. The first Dividend payment date for the Series A Preferred Securities will be , 199 , and such Dividends will be cumulative from the date of original issue. The amount of Dividends payable for any period will be computed on the basis of a 360-day year of twelve 30-day months, and for any period shorter than a full monthly distribution period, Dividends will be computed on the basis of the actual number of days elapsed on such period. The Series A Preferred Securities will rank pari passu with all other series of Preferred Securities which may be issued by CL&P Capital and senior to all general partner interests. No other series of Preferred Securities have been issued by CL&P Capital as of the date hereof. Under the Indenture, CL&P has the right from time to time, so long as no Event of Default has occurred and is continuing, to extend the interest payment period for the Series A Subordinated Debentures for up to 60 consecutive months (an "Extension Period"); provided that no Extension Period shall extend beyond the stated maturity, or acceleration thereof, or any date of redemption, of the Series A Subordinated Debentures. If such right is exercised, Dividends on the Series A Preferred Securities would be deferred (but would continue to accumulate in arrears with additional Dividends accumulating thereon after the monthly payment date therefor) by CL&P Capital during any Extension Period. In the event that CL&P exercises its right to extend the interest payment period on the Series A Subordinated Debentures, CL&P may not declare or pay dividends on, or redeem, purchase, acquire, or make a liquidation payment with respect to, any of its capital stock during the Extension Period. CL&P Capital and CL&P currently believe that the extension of an interest payment period is unlikely. Prior to the termination of any Extension Period, CL&P may shorten or S-4 further extend the interest payment period, provided that such Extension Period, together with all such previous and further extensions thereof, may not exceed 60 consecutive months. Upon the termination of any Extension Period and the payment of all amounts then due on the Series A Subordinated Debentures, CL&P may elect to extend the interest payment period again, subject to the above requirements. See "Description of the Subordinated Debentures--Option to Extend Interest Payment Period" in the accompanying Prospectus and "United States Taxation--Potential Extension of Interest Payment Period" herein. Payments received by CL&P Capital with respect to the Series A Subordinated Debentures and other series of CL&P's Subordinated Debentures will not be segregated by CL&P Capital for the benefit of the holders of the Series A Preferred Securities or holders of any other particular series of Preferred Securities. It is anticipated that CL&P Capital's earnings available for distribution to the holders of the Series A Preferred Securities will be limited to payments under the Series A Subordinated Debentures in which CL&P Capital will invest the proceeds from the issuance and sale of the Series A Preferred Securities. See "Certain Terms of the Series A Subordinated Debentures" in the accompanying Prospectus. If CL&P does not make interest payments on the Series A Subordinated Debentures, it is expected that CL&P Capital will not pay Dividends on the Series A Preferred Securities. Under the Limited Partnership Agreement, if and to the extent CL&P does make interest payments on the Series A Subordinated Debentures, CL&P Capital is obligated, to the extent funds are legally available therefor, to pay Dividends on the Series A Preferred Securities. The payment of Dividends is guaranteed by CL&P as, and to the extent, set forth under "Description of the Guaranty" in the accompanying Prospectus. Dividends on the Series A Preferred Securities will be payable to the holders thereof as they appear on the books and records of CL&P Capital on the relevant record dates, which, as long as the Series A Preferred Securities remain in book-entry-only form, will be one Business Day (as defined below) prior to the relevant payment dates. Subject to any applicable laws and regulations and the provisions of the Limited Partnership Agreement, each such payment will be made as described under "Book-Entry-Only Issuance--The Depositary Trust Company" in the accompanying Prospectus. In the event the Series A Preferred Securities shall not continue to remain in book-entry-only form, the General Partner shall have the right to change such record dates. In the event that any date on which Dividends are payable on the Series A Preferred Securities is not a Business Day, then payment of the Dividends payable on such date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay) except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date. A "Business Day" shall mean any day other than a day on which banking institutions in The City of New York, the State of Connecticut or the State of Delaware are authorized or required by law to close. OPTIONAL REDEMPTION The Series A Preferred Securities are subject to redemption, at the option of the General Partner, in whole or in part, from time to time, on or after , 2000, upon not less than 30 nor more than 60 days' notice, at $25 per Series A Preferred Security, plus accumulated and unpaid Dividends, if any, to the date fixed for redemption (the "Redemption Price"). Any such notice may state that it is subject to the receipt by CL&P Capital of redemption monies on or before such date fixed for redemption, which notice shall be of no effect unless such monies are so received prior to such date. See "Description of the Preferred Securities--Redemption Provisions" in the accompanying Prospectus. The Series A Preferred Securities will also be subject to redemption at the Redemption Price in certain circumstances described under "--Investment Company Act Event Redemption or Distribution" and "--Tax Event Redemption or Distribution." MANDATORY REDEMPTION If at any time CL&P redeems the Series A Subordinated Debentures or pays the Series A Subordinated Debentures at maturity as described under "Description of the Subordinated Debentures" in the S-5 accompanying Prospectus, the Series A Preferred Securities will be subject to mandatory redemption at the Redemption Price. The Series A Preferred Securities will not be entitled to any sinking fund. INVESTMENT COMPANY ACT EVENT REDEMPTION OR DISTRIBUTION If an Investment Company Act Event (as defined below) shall occur and be continuing, the General Partner will be required to (i) cause CL&P Capital to redeem in whole the Series A Preferred Securities at the Redemption Price within 90 days following the occurrence of such Investment Company Act Event, or (ii) dissolve CL&P Capital and cause CL&P Capital to distribute the Series A Debentures to holders of Series A Preferred Securities in liquidation of CL&P Capital within 90 days following the occurrence of such Investment Company Act Event; provided, however, that in the case of clause (ii) above CL&P Capital shall have received an opinion of counsel (which may be regular tax counsel to CL&P Capital or an affiliate, but not an employee thereof) to the effect that the holders of Series A Preferred Securities will not recognize any gain or loss for United States federal income tax purposes as a result of such distribution. See "United States Taxation--Receipt of Series A Subordinated Debentures Upon Liquidation of CL&P Capital." "Investment Company Act Event" means the occurrence of a change in law or regulation or a change in official interpretation of law or regulation by any legislative body, court, governmental agency or regulatory authority (a "Change in 1940 Act Law") to the effect that CL&P Capital is or will be considered an "investment company" which is required to be registered under the Investment Company Act of 1940, as amended (the "1940 Act"), which Change in 1940 Act Law becomes effective on or after the date of issuance of the Series A Preferred Securities; provided, that no Investment Company Act Event shall be deemed to have occurred if CL&P Capital has, within 45 days after such Change in 1940 Act Law, received an opinion of counsel (which may be regular counsel to CL&P Capital or an affiliate but not an employee thereof) experienced in such matters, to the effect that CL&P Capital and/or CL&P has taken reasonable measures, in its discretion, to avoid such Change in 1940 Act Law so that, notwithstanding such Change in 1940 Act Law, CL&P Capital is not required to be registered as an "investment company" within the meaning of the 1940 Act. TAX EVENT REDEMPTION OR DISTRIBUTION If a Tax Event (as defined below) shall occur and be continuing, the General Partner may (i) cause CL&P Capital to redeem the Series A Preferred Securities at the Redemption Price, within 90 days following the occurrence of such Tax Event, or (ii) dissolve CL&P Capital and cause CL&P Capital to distribute the Series A Debentures to holders of Series A Preferred Securities in liquidation of their interests in CL&P Capital within 90 days following the occurrence of such Tax Event; provided, however, that in the case of clause (ii) above CL&P Capital shall have received an opinion of counsel (which may be regular tax counsel to CL&P Capital or an affiliate, but not an employee thereof) to the effect that the holders of Series A Preferred Securities will not recognize any gain or loss for United States federal income tax purposes as a result of such distribution. See "United States Taxation--Receipt of Series A Subordinated Debentures Upon Liquidation of CL&P Capital." If the General Partner does not elect to cause a redemption as permitted by clause (i) above or a distribution as permitted by clause (ii) above, then the Series A Preferred Securities will remain outstanding and Additional Interest (as defined in the accompanying Prospectus) will be payable on the Series A Subordinated Debentures. See "Description of the Subordinated Debentures--Additional Interest" in the accompanying Prospectus. "Tax Event" means that CL&P Capital shall have received an opinion of counsel (which may be regular tax counsel to CL&P Capital or an affiliate but not an employee thereof) experienced in such matters to the effect that, as a result of any amendment to, or change (including any announced prospective change) in, the laws (or any regulations thereunder) of the United States or any political subdivision or taxing authority thereof or therein affecting taxation, or as a result of any official administrative pronouncement or judicial decision interpreting or applying such laws or regulations, which amendment or change is effective or such S-6 pronouncement or decision is announced on or after the date of issuance of the Series A Preferred Securities, there is more than an insubstantial risk that (i) CL&P Capital is subject to United States federal income tax with respect to interest received on the Series A Subordinated Debentures, (ii) interest payable by CL&P on the Series A Subordinated Debentures will not be deductible for United States federal income tax purposes or the Partnership will otherwise not be taxed as a partnership or (iii) CL&P Capital is subject to more than a de minimis amount of other taxes, duties or other governmental charges. LIQUIDATION DISTRIBUTION In the event of any voluntary or involuntary dissolution and winding up of CL&P Capital, other than in connection with the distribution of the Subordinated Debentures of any series upon the occurrence of an Investment Company Act Event or a Tax Event (see "--Investment Company Act Redemption or Distribution" and "--Tax Event Redemption or Distribution"), the holders of the Preferred Securities at the time outstanding will be entitled to receive out of the assets of CL&P Capital after satisfaction of liabilities to creditors as required by Delaware law and before any distribution of assets is made to holders of its general partner interests, the aggregate of the stated liquidation preference, which shall be $25 per Preferred Security plus all accumulated and unpaid Dividends to the date of payment (the "Liquidation Distribution"). If, upon such dissolution and winding up, CL&P Capital has insufficient assets available to pay the Liquidation Distribution in full, then the amounts payable on each series of Preferred Securities shall be paid on a pro rata basis, in proportion to the full Liquidation Distribution to which each series of Preferred Securities would be entitled. CERTAIN TERMS OF THE SERIES A SUBORDINATED DEBENTURES The following information should be read in conjunction with the statements under "Description of the Subordinated Debentures" in the accompanying Prospectus. In exchange for, and to evidence the loan of, the proceeds of the sale of the Series A Preferred Securities, plus the General Partner's related capital contribution, CL&P will issue the Series A Subordinated Debentures to CL&P Capital in the principal amount of $ and with interest payment and redemption provisions which correspond to the Dividend and redemption provisions of the Series A Preferred Securities. The Series A Subordinated Debentures will mature on , 20 . The Series A Subordinated Debentures will rank junior and be subordinate in right of payment to all Senior Indebtedness of CL&P. See "Description of the Subordinated Debentures--Subordination" in the accompanying Prospectus. The Series A Debentures are subject to redemption prior to maturity at the option of CL&P at the price of 100% of the principal amount thereof plus accrued interest to the redemption date in whole or in part (i) from time to time on or after , 2000, (ii) from time to time upon or after the dissolution of CL&P Capital, or (iii) from time to time if CL&P shall be required to pay Additional Interest thereon. See "Description of the Subordinated Debentures--Additional Interest" in the accompanying Prospectus. The Series A Debentures are subject to mandatory redemption prior to maturity at the price of 100% of the principal amount thereof plus accrued interest to the redemption date in whole or in part upon a redemption of the Series A Preferred Securities, but if in part, in an aggregate principal amount equal to the aggregate stated liquidation preference of the Series A Preferred Securities redeemed. UNITED STATES TAXATION INTRODUCTION Set forth following this Introduction is a summary of certain United States federal income tax considerations that may be relevant to prospective purchasers of Series A Preferred Securities and S-7 represents the opinion of Day, Berry & Howard, counsel to CL&P and CL&P Capital, insofar as it relates to matters of law and legal conclusions. The summary is based upon current provisions of the Internal Revenue Code of 1986, as amended (the "Code"), existing and proposed regulations thereunder and current administrative rulings and court decisions, all of which are subject to change. Subsequent changes may cause tax consequences to vary substantially from the consequences described below. No attempt has been made in the following summary to comment on all United States federal income tax matters affecting purchasers of Series A Preferred Securities. Moreover, the summary focuses on holders of Series A Preferred Securities who are individual citizens or residents of the United States that hold Series A Preferred Securities as a capital asset and has only limited application to corporations, estates, trusts or non-resident aliens. Accordingly, each prospective purchaser of Series A Preferred Securities should consult, and should depend on, his or her own tax adviser in analyzing the federal, state, local and foreign tax consequences of the purchase, ownership or disposition of Series A Preferred Securities. In April 1994, the IRS issued certain notices generally addressing the characteristics which distinguish debt from equity for various purposes under United States federal income tax laws. In these notices, the IRS indicated that transactions involving securities that, like the Series A Preferred Securities, have both debt and equity characteristics would be reviewed with scrutiny to determine how they would be treated for tax purposes. In particular, the IRS announced that it will carefully scrutinize any transaction designed to produce interest deductions with respect to a related stock issuance. CL&P believes that interest on the Series A Subordinated Debentures will be deductible by CL&P under the tests referred to in these notices. If, however, there is a change in applicable tax laws or regulations, or the IRS should subsequently issue a further official administrative pronouncement, or should there be a judicial decision, pursuant to which there is more than an insubstantial risk that interest on the Series A Subordinated Debentures would not be deductible (or any other Tax Event shall occur and be continuing), the Series A Preferred Securities would be subject to redemption at the option of CL&P Capital, as described under "Certain Terms of the Series A Preferred Securities--Tax Event Redemption or Distribution." INCOME FROM SERIES A PREFERRED SECURITIES In the opinion of Day, Berry & Howard, CL&P Capital will be treated as a partnership for United States federal income tax purposes. Accordingly, each holder of Series A Preferred Securities will be required to include in gross income such holder's distributive share of the net income of CL&P Capital. Such income will not exceed distributions received on such Series A Preferred Securities, except in limited circumstances as described below under "Potential Extension of Interest Payment Period." No portion of such income will be eligible for the dividends received deduction. DISPOSITION OF SERIES A PREFERRED SECURITIES Gain or loss will be recognized on a sale, exchange or other disposition, including a redemption for cash, of Series A Preferred Securities in an amount equal to the difference between the amount realized and the holder's tax basis in such Series A Preferred Securities. Gain or loss recognized by a holder of the Series A Preferred Security on the sale or exchange of a Series A Preferred Security held for more than one year will generally be taxable as long-term capital gain or loss. RECEIPT OF SERIES A SUBORDINATED DEBENTURES UPON LIQUIDATION OF CL&P CAPITAL Under certain circumstances, as described under the captions "Description of the Series A Preferred Securities--Investment Company Act Event Redemption or Distribution" and "--Tax Event Redemption or Distribution," Series A Subordinated Debentures may be distributed to the holders of the Series A Preferred Securities in liquidation of CL&P Capital. Under current United States federal income tax law, such a distribution would be treated as a non- taxable exchange to each holder of Series A Preferred Securities and would result in the holder of Series A Preferred Securities receiving an aggregate tax basis in the Series A Subordinated Debentures equal to such holder's aggregate tax basis in its Series A Preferred Securities. A S-8 holder's holding period in the Series A Subordinated Debentures so received in liquidation of CL&P Capital would include the period for which the Series A Preferred Securities were held by such holder. As a condition to the dissolution of CL&P Capital and such a distribution, CL&P Capital will be required to obtain an opinion of counsel (which may be regular tax counsel to CL&P Capital or an affiliate, but not an employee thereof) to the effect that the holders of the Series A Preferred Securities will not recognize any gain or loss for United States federal income tax purposes as a result of such dissolution and distribution of Series A Subordinated Debentures. CL&P CAPITAL INFORMATION RETURNS AND AUDIT PROCEDURES The General Partner will furnish each holder of a Series A Preferred Security with a Schedule K-1 each year setting forth such holder's allocable share of income for the prior calendar year. The General Partner is required to furnish such schedules as soon as practicable following the end of the year, but in any event prior to March 31. Any person who holds Series A Preferred Securities as a nominee for another person is required to furnish to CL&P Capital (a) the name, address and taxpayer identification number of the beneficial owner and the nominee; (b) information as to whether the beneficial owners is (i) a person that is not a United States person, (ii) a foreign government, an international organization or any wholly owned agency or instrumentality of either of the foregoing, or (iii) a tax-exempt entity; (c) the amount and description of Series A Preferred Securities held, acquired or transferred for the beneficial owner; and (d) certain information including the dates of acquisitions and transfers, means of acquisitions and transfers, and acquisition cost for purchases, as well as the amount of net proceeds from sales. Brokers and financial institutions are required to furnish additional information, including whether they are United States persons, and certain information on Series A Preferred Securities they acquire, hold or transfer for their own accounts. A penalty of $50 per failure (up to a maximum of $100,000 per calendar year) is imposed by the Code for failure to report such information to CL&P Capital. The nominee is required to supply the beneficial owners of the Series A Preferred Securities with the information furnished to CL&P Capital. POTENTIAL EXTENSION OF INTEREST PAYMENT PERIOD Under the terms of the Indenture, CL&P will be permitted to extend the interest payment period for the Series A Subordinated Debentures for up to 60 consecutive months (an "Extension Period"). Because the interest payment period is extendable by CL&P, the interest on the Series A Subordinated Debentures will be treated as "original issue discount" pursuant to Code sections 1271 et seq. and the Treasury Regulations promulgated thereunder. CL&P Capital will therefore be required, during any Extension Period, to include in gross income the interest on the Series A Subordinated Debentures as it accrues in accordance with a constant yield method (notwithstanding that no cash payments will be made during an Extension Period). Likewise, regardless of its regular method of accounting for tax purposes, each holder of Series A Subordinated Debentures (after a dissolution of CL&P Capital) will be required, during any Extension Period, to include in income the interest on the Series A Subordinated Debentures as it accrues in accordance with such method. Accrued income of CL&P Capital will be allocated, but not distributed, to holders of record on the Business Day preceding the last day of each calendar month. As a result, holders of Series A Preferred Securities during an Extension Period will be required to include interest in gross income in advance of the receipt of cash, and any such persons who dispose of Series A Preferred Securities prior to the record date for the payment of Dividends following such Extension Period will include interest in gross income but will not receive any cash related thereto. A holder's tax basis in a Series A Preferred Security will be increased by the amount of any interest that is included in income without a receipt of cash, and will be decreased when and if such cash is subsequently received from CL&P Capital. The subsequent receipt of such cash will not be included in gross income. S-9 UNITED STATES ALIEN HOLDERS For purposes of this discussion, a "United States Alien Holder" is any holder or beneficial owner who or which is (i) a nonresident alien individual, (ii) a foreign corporation or partnership or (iii) an estate or trust that has a foreign fiduciary, in each case not subject to United States federal income tax on a net income basis in respect of a Series A Preferred Security. Under present United States federal income tax law, subject to the discussion below with respect to backup withholding: (i) payments in respect of a Series A Preferred Security by CL&P Capital or any of its paying agents to a United States Alien Holder will not be subject to United States federal withholding tax provided that (a) the beneficial owner of the Series A Preferred Security does not actually or constructively own 10% or more of the total combined voting power of all classes of stock of CL&P entitled to vote, (b) the beneficial owner of the Series A Preferred Security is not a controlled foreign corporation that is related to CL&P through stock ownership, and (c) the beneficial owner provides the correct certification of United States Alien Holder status, which may generally be satisfied by providing an IRS Form W-8 certifying that the beneficial owner is a United States Alien Holder and providing the name and address of the beneficial owner; and (ii) a United States Alien Holder of a Series A Preferred Security will generally not be subject to United States federal income or withholding tax on any gain realized on the sale or exchange of a Series A Preferred Security. Under certain conditions, a United States Alien Holder may be subject to United States federal income tax on gain or income received with respect to the sale or exchange of a Series A Preferred Security. Such income taxation may occur, for example, if the United States Alien Holder (a) is engaged in a trade or business in the United States and gain or income is effectively connected with the conduct of that trade or business or (b) is an individual present in the United States for 183 days or more during the taxable year, and certain conditions are met. Such taxation is beyond the scope of this summary and should be discussed with a tax adviser. If income is effectively connected with the conduct of a trade or business in the United States by a United States Alien Holder, withholding of United States federal income tax may be required unless the United States Alien Holder files with CL&P Capital or its paying agent an IRS form to the effect that the income is so effectively connected. If the Series A Subordinated Debentures were not treated as debt, or if CL&P Capital were not treated as a partnership, for United States federal income tax purposes, United States Alien Holders could experience tax consequences different from those described above, including consequences related to withholding on Dividends and United States estate tax consequences. BACKUP WITHHOLDING AND INFORMATION REPORTING In general, information reporting requirements will apply to payments to non- corporate United States holders of the proceeds of the sale of Series A Preferred Securities within the United States and "backup withholding" at a rate of 31% will apply to such payments if the seller fails to provide a correct taxpayer identification number. In general, information reporting requirements will also apply to payments of principal and interest on a Series A Subordinated Debenture distributed to a holder of Series A Preferred Securities, and the proceeds of the sale of a Series A Subordinated Debenture prior to maturity within the United States, with respect to non-corporate United States holders, and "backup withholding" at a rate of 31% will apply to such payments if the United States holder fails to provide an accurate taxpayer identification number or to report all interest and dividends required to be shown on its United States federal income tax returns. Information reporting and backup withholding will not apply to payments of principal and interest made by CL&P or a paying agent to a United States Alien Holder on a Series A Subordinated Debenture distributed to a holder of Series A Preferred Securities if the certification described in clause (i)(c) under "United States S-10 Alien Holders" above is received, provided that the payor does not have actual knowledge that the holder is a United States holder. Payments of the proceeds from the sale by a United States Alien Holder of Series A Preferred Securities or Series A Subordinated Debentures distributed to such holder made to or through a foreign office of a broker generally will not be subject to information reporting or backup withholding, except that, if the broker is a United States person, a controlled foreign corporation for United States tax purposes or a foreign person 50% or more of whose gross income is effectively connected with a United States trade or business for a specified three-year period, information reporting may apply to such payments. Payments of the proceeds from the sale of Series A Preferred Securities or Series A Subordinated Debentures distributed to a holder of Series A Preferred Securities to or through the United States office of a broker is subject to information reporting and backup withholding unless the holder or beneficial owner certifies as to its non-United States status or otherwise establishes an exemption from information reporting and backup withholding. UNDERWRITING Subject to the terms and conditions of the Underwriting Agreement among CL&P Capital, CL&P and the underwriters named below (the "Underwriters"), for whom Goldman, Sachs & Co., Salomon Brothers Inc, Merrill Lynch & Co., Morgan Stanley & Co. Incorporated, Prudential Securities Incorporated and Smith Barney Inc. are acting as Representatives, CL&P Capital has agreed to sell to each of the Underwriters and each of the Underwriters has severally agreed to purchase from CL&P Capital the respective number of Series A Preferred Securities set forth opposite its name below:
NUMBER OF SERIES A UNDERWRITER PREFERRED SECURITIES ----------- -------------------- Goldman, Sachs & Co. ................................... Salomon Brothers Inc.................................... Merrill Lynch & Co...................................... Morgan Stanley & Co. Incorporated....................... Prudential Securities Incorporated...................... Smith Barney Inc........................................ --- Total................................................. ===
Under the terms and conditions of the Underwriting Agreement, the Underwriters are committed to take and pay for all such Series A Preferred Securities offered hereby, if any are taken. The Underwriters propose to offer the Series A Preferred Securities in part directly to the public at the initial public offering price set forth on the cover page of this Prospectus Supplement, and in part to certain securities dealers at such price less a concession of $ per Series A Preferred Security. The Underwriters may allow, and such dealers may reallow, a concession not in excess of $ per Series A Preferred Security to certain brokers and dealers. After the Series A Preferred Securities are released for sale to the public, the offering price and other selling terms may from time to time be varied by the Representatives. In view of the fact that the proceeds from the sale of the Series A Preferred Securities will be loaned to CL&P, under the Underwriting Agreement, CL&P has agreed to pay to the Underwriters $ per Series A Preferred Security ($ per Series A Preferred Security sold to certain institutions) for the accounts of the several Underwriters. Prior to this offering, there has been no public market for the Series A Preferred Securities. In order to meet one of the requirements for listing the Series A Preferred Securities on the New York Stock Exchange, the Underwriters have undertaken to sell the Series A Preferred Securities to a minimum of 400 beneficial holders. If the Series A Subordinated Debentures are distributed to the holders of the Series A Preferred Securities as described above under "Certain Terms of the Series A Preferred Securities--Investment S-11 Company Act Event Redemption or Distribution" and "--Tax Event Redemption or Distribution," CL&P will use its best efforts to have the Series A Subordinated Debentures listed on the New York Stock Exchange or on such other exchange as the Series A Preferred Securities are then listed. The Underwriters do not intend to confirm sales to any discretionary account unless the customer's prior written consent is obtained. CL&P and CL&P Capital have agreed to indemnify the several Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended. CL&P and CL&P Capital have agreed, during the period beginning on the date of the Underwriting Agreement and continuing to and including the earlier of (i) the date, after the closing date, on which the distribution of the Series A Preferred Securities ceases, as determined by Goldman, Sachs & Co., or (ii) 90 days after the closing date, not to offer, sell, contract to sell, or otherwise dispose of any Series A Preferred Securities, any limited partner interests of CL&P Capital, or any preferred stock or any other securities of CL&P Capital or CL&P which are substantially similar to the Series A Preferred Securities, including the related Guaranty, or any securities convertible into or exchangeable for Series A Preferred Securities, limited partner interests, preferred stock or other substantially similar securities of either CL&P Capital or CL&P, without the prior written consent of Goldman, Sachs & Co. S-12 ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ +INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A + +REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE + +SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY + +OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT + +BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR + +THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE + +SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE + +UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF + +ANY SUCH STATE. + ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ SUBJECT TO COMPLETION, DATED NOVEMBER , 1994 PROSPECTUS CL&P CAPITAL CUMULATIVE MONTHLY INCOME PREFERRED SECURITIES (MIPS*) GUARANTEED TO THE EXTENT THE ISSUER HAS FUNDS LEGALLY AVAILABLE THEREFOR, AS SET FORTH HEREIN, BY THE CONNECTICUT LIGHT AND POWER COMPANY ----------- CL&P Capital, L.P. ("CL&P Capital"), a Delaware special purpose limited partnership of which The Connecticut Light and Power Company ("CL&P" or the "General Partner") is the general partner, may offer from time to time, in one or more series, its monthly income preferred securities representing limited partner interests ("Preferred Securities"). The payment of periodic cash distributions ("Dividends") with respect to the Preferred Securities of each series and payments on liquidation or redemption with respect to such Preferred Securities, in each case out of funds on hand legally available therefor held by CL&P Capital, are guaranteed by CL&P pursuant to a Payment and Guaranty Agreement (the "Guaranty") to the extent described below. See "Description of the Guaranty." The obligations of CL&P under the Guaranty will be subordinate and junior in right of payment to all general liabilities of CL&P. Concurrently with the issuance of each series of Preferred Securities, CL&P Capital will lend the proceeds from the sale thereof, and the General Partner's related capital contribution, to CL&P and to evidence such loan CL&P will issue and deliver to CL&P Capital a series of CL&P's Junior Subordinated Deferrable Interest Debentures (the "Subordinated Debentures") with terms corresponding to that series of Preferred Securities. The Subordinated Debentures will be unsecured and subordinate and junior in right of payment to all present and future Senior Indebtedness (as defined herein) of CL&P. The Subordinated Debentures will be the sole asset of CL&P Capital and the interest on the Subordinated Debentures will be the only revenue of CL&P Capital. The Preferred Securities may be offered in amounts, at prices and on terms to be determined at the time of offering, provided, however, that the aggregate initial public offering price of all Preferred Securities issued under the Registration Statement of which this Prospectus forms a part shall not exceed $125,000,000. Certain specific terms of the particular series of Preferred Securities in respect of which this Prospectus is being delivered will be set forth in an accompanying Prospectus Supplement (the "Prospectus Supplement"), including where applicable and to the extent not set forth herein, the specific title, the aggregate amount, the Dividend rate (or the method for determining the rate), the stated liquidation preference, redemption provisions, other rights, the initial public offering price, and any other special terms, as well as any planned listing of the Preferred Securities on a securities exchange. The Preferred Securities may be sold for public offering to or through underwriters or dealers designated from time to time. See "Plan of Distribution." The names of any such underwriters or dealers involved in the sale of the Preferred Securities of the particular series in respect of which this Prospectus is being delivered, the number of Preferred Securities to be purchased by any such underwriters or dealers and any applicable commissions or discounts will be set forth in the Prospectus Supplement. The net proceeds to CL&P Capital will also be set forth in the Prospectus Supplement. The Prospectus Supplement will contain information concerning United States federal income tax considerations and the Preferred Securities offered. - -------- *An application has been filed by Goldman, Sachs & Co. with the United States Patent and Trademark Office for the registration of the MIPS servicemark. ----------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ----------- The date of this Prospectus is , 1994. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED, OR INCORPORATED BY REFERENCE, IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. --------------- AVAILABLE INFORMATION CL&P is subject to the informational requirements of the Securities Exchange Act of 1934 (the "1934 Act") and, in accordance therewith, files reports and other information with the Securities and Exchange Commission (the "SEC"). Such reports and other information can be inspected and copied at the public reference facilities maintained by the SEC at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549; 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and Seven World Trade Center, New York, New York 10007. Copies of such material can also be obtained at prescribed rates from the Public Reference Section of the SEC at its principal office at 450 Fifth Street, N.W., Washington, D.C. 20549. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE CL&P's Annual Report on Form 10-K for the year ended December 31, 1993, and its Quarterly Reports on Form 10-Q for the quarters ended March 31, 1994, June 30, 1994 and September 30, 1994 (File No. 0-404) have been filed with the SEC pursuant to the 1934 Act and are hereby incorporated in this Prospectus by reference. All documents filed by CL&P pursuant to Sections 13(a) and (c), 14 or 15(d) of the 1934 Act after the date of this Prospectus and prior to the termination of this offering shall be deemed to be incorporated by reference in this Prospectus and to be a part hereof from the date of filing such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus and any amendment or supplement hereto to the extent that a statement contained herein or in any other subsequently filed document, which also is or is deemed to be incorporated by reference herein, modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus or any such amendment or supplement. CERTAIN INFORMATION CONTAINED IN THIS PROSPECTUS SUMMARIZES, IS BASED UPON, OR REFERS TO, INFORMATION AND FINANCIAL STATEMENTS CONTAINED IN ONE OR MORE INCORPORATED DOCUMENTS; ACCORDINGLY, SUCH INFORMATION CONTAINED HEREIN IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH DOCUMENTS AND SHOULD BE READ IN CONJUNCTION THEREWITH. CL&P WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM A COPY OF THIS PROSPECTUS HAS BEEN DELIVERED, INCLUDING ANY BENEFICIAL OWNER, ON THE REQUEST OF ANY SUCH PERSON, A COPY OF ANY OR ALL OF THE DOCUMENTS REFERRED TO ABOVE WHICH HAVE BEEN OR MAY BE INCORPORATED IN THIS PROSPECTUS BY REFERENCE, OTHER THAN EXHIBITS TO SUCH DOCUMENTS. WRITTEN REQUESTS SHOULD BE DIRECTED TO THE CONNECTICUT LIGHT AND POWER COMPANY, P.O. BOX 270, HARTFORD, CONNECTICUT 06141-0270, ATTENTION: INVESTOR RELATIONS. TELEPHONE REQUESTS SHOULD BE MADE TO (203) 665-5000, ATTENTION: INVESTOR RELATIONS. --------------- IN CONNECTION WITH ANY FIRM COMMITMENT OFFERING MADE PURSUANT TO THIS PROSPECTUS, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. 2 CL&P CAPITAL CL&P Capital is a limited partnership formed under the Delaware Revised Uniform Limited Partnership Act (the "Partnership Act") on November , 1994. All of its general partner interests are owned by CL&P, which, as the General Partner, shall maintain a capital account balance equal to at least 3% of the total positive capital account balances for CL&P Capital. In order to satisfy this requirement, it is expected that the General Partner will make an additional capital contribution to CL&P Capital in connection with the issuance of each series of the Preferred Securities. As a limited partnership, all of the business and affairs of CL&P Capital will be managed by the General Partner. CL&P Capital has been created solely for the purpose of issuing the Preferred Securities and lending the proceeds thereof, plus the General Partner's capital contributions, to CL&P. Such loans will be evidenced by the Subordinated Debentures issued by CL&P under an Indenture dated as of , 199 (the "Indenture") between CL&P and Bankers Trust Company, as trustee (the "Trustee"). The Subordinated Debentures will be the only assets of CL&P Capital and the only revenues of CL&P Capital will be the interest on the Subordinated Debentures. The General Partner will pay all of CL&P Capital's operating expenses and will have general liability for all of CL&P Capital's obligations. Assuming a holder of Preferred Securities acts in conformity with the Amended and Restated Limited Partnership Agreement of CL&P Capital (the "Limited Partnership Agreement"), such holder (other than the General Partner) will not be liable for the debts, obligations and liabilities of CL&P Capital, whether arising in contract, tort or otherwise, solely by reason of being a limited partner of CL&P Capital, subject to the obligation of a limited partner to repay any funds wrongfully distributed to it. The place of business of CL&P Capital is the principal executive offices of the General Partner at Selden Street, Berlin, Connecticut 06037 and its telephone number is (203) 665-5000. CL&P CL&P is a wholly-owned subsidiary of Northeast Utilities ("NU"). The four wholly-owned operating subsidiaries of NU--CL&P, Public Service Company of New Hampshire, Western Massachusetts Electric Company and Holyoke Water Power Company--furnish electric service in portions of Connecticut and New Hampshire and in western Massachusetts. CL&P is a Connecticut corporation, organized in 1907, and is qualified as a foreign corporation in Massachusetts and New Hampshire. CL&P is the largest electric utility in Connecticut and is engaged principally in the production, purchase, transmission, distribution and sale of electricity at retail for residential, commercial, industrial and municipal purposes within Connecticut. The principal executive offices of CL&P are located at Selden Street, Berlin, Connecticut 06037 (telephone 203-665-5000). COVERAGE RATIOS RATIO OF EARNINGS TO FIXED CHARGES Below are set forth CL&P's ratio of earnings to fixed charges for each of the years in the period 1989 through 1993 and for the twelve months ended September 30, 1994. The ratios have been restated to reflect only the revenues and income from CL&P's continuing electric business. CL&P divested its gas business on June 30, 1989.
TWELVE-MONTH PERIOD ENDED RATIO ------------ ----- December 31, 1989................................................ 2.32 December 31, 1990................................................ 2.53 December 31, 1991................................................ 3.02 December 31, 1992................................................ 2.96 December 31, 1993................................................ 2.71 September 30, 1994 (unaudited)................................... 3.63
3 RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS Below are set forth CL&P's ratios of earnings to fixed charges and preferred dividends for each of the years in the period 1989 through 1993 and for the twelve months ended September 30, 1994. The ratios have been restated to reflect only the revenues and income from CL&P's continuing electric business. CL&P divested its gas business on June 30, 1989.
TWELVE-MONTH PERIOD ENDED RATIO ------------ ----- December 31, 1989................................................ 1.95 December 31, 1990................................................ 2.03 December 31, 1991................................................ 2.34 December 31, 1992................................................ 2.27 December 31, 1993................................................ 2.01 September 30, 1994 (unaudited)................................... 2.74
USE OF PROCEEDS The proceeds to be received by CL&P Capital from the sale of the Preferred Securities offered hereby will be loaned to CL&P and will be applied by CL&P to the redemption, reacquisition or payment at maturity of outstanding securities as may more specifically be set forth in the applicable Prospectus Supplement. DESCRIPTION OF THE PREFERRED SECURITIES The following is a summary of certain terms and provisions of the Preferred Securities and the Limited Partnership Agreement. The summary is subject to, and qualified in its entirety by reference to, the Limited Partnership Agreement and the Partnership Act. The Limited Partnership Agreement is filed as an exhibit to the Registration Statement of which this Prospectus forms a part. GENERAL Under the Limited Partnership Agreement, CL&P Capital is authorized to issue limited partner interests, including the Preferred Securities offered hereby, and general partner interests. All of the general partner interests of CL&P Capital are owned by CL&P. All of the Preferred Securities will be of equal rank in participation in the right to receive Dividends and the right to receive payments out of the assets of CL&P Capital upon voluntary or involuntary dissolution and winding up of CL&P Capital. Subject to the foregoing, the Limited Partnership Agreement authorizes the General Partner to establish series of Preferred Securities having such designations, rights, privileges, restrictions and other terms and provisions as CL&P, as general partner, may determine. Dividends on all series of Preferred Securities must be paid, or set aside for payment, in full before any distribution is paid, or set aside for payment, on the general partner interests. Under the Limited Partnership Agreement, CL&P Capital is not permitted to issue any limited partner interests ranking senior to the Preferred Securities with respect to the right to receive distributions or the right to receive payments out of the assets of CL&P Capital upon voluntary or involuntary dissolution and winding up of CL&P Capital. Reference is made to the Prospectus Supplement relating to the Preferred Securities of a particular series for specific terms, including (i) the distinctive designation of such series which shall distinguish it from other series; (ii) the number of Preferred Securities included in such series; (iii) the Dividend rate or rates per annum for (or method of determining such rate or rates) for Preferred Securities of such series and the date or dates upon which such Dividends shall be payable (subject to the requirement that Dividends on any series of Preferred Securities shall be payable on a monthly basis to holders of such series of Preferred Securities as of a record date in each calendar month during which the Preferred Securities of such series are outstanding); (iv) the amount or amounts which shall be paid out of the assets of CL&P Capital to the 4 holders of Preferred Securities of such series upon voluntary or involuntary dissolution or winding up of CL&P Capital; (v) the price or prices at which, the period or periods within which and the terms and conditions upon which the Preferred Securities of such series may be redeemed or purchased, in whole or in part, at the option of CL&P Capital; (vi) the obligation, if any, of CL&P Capital to purchase or redeem Preferred Securities of such series pursuant to any sinking fund or otherwise and the price or prices at which, the period or periods within which and the terms and conditions upon which Preferred Securities of such series shall be redeemed, in whole or in part, pursuant to such obligation; (vii) the period or periods within which and the terms and conditions, if any (including the price or prices or the rate or rates of conversion or exchange and the terms and conditions of any adjustments thereof), upon which the Preferred Securities of such series shall be convertible or exchangeable at the option of the holder thereof, or CL&P Capital, into any other interests or securities or other property or cash or into any other series of Preferred Securities; (viii) the voting rights, if any, of Preferred Securities of such series in addition to those required by law, and any requirement for the approval by the holders of Preferred Securities, or of Preferred Securities of one or more series, or of both, as a condition to specified action of the General Partner or amendments to the Limited Partnership Agreement; and (ix) any other relative rights, preferences, privileges, limitations or restrictions of Preferred Securities of the series not inconsistent with the Limited Partnership Agreement or with applicable law. All Preferred Securities offered hereby will be guaranteed by CL&P to the extent set forth below under "Description of the Guaranty." Any United States federal income tax considerations applicable to the offering of any series of Preferred Securities will be described in the Prospectus Supplement relating thereto. DIVIDENDS Dividends on each series of Preferred Securities will be cumulative, will accrue from the date of issuance and will be payable on a monthly basis to the holders of the Preferred Securities as of a record date in each calendar month during which the Preferred Securities are outstanding, as set forth in the applicable Prospectus Supplement, except as otherwise described below. The Dividends payable on a series of Preferred Securities offered hereby will be specified in a Prospectus Supplement related thereto. The amount of Dividends payable for any period will be calculated on the basis of a 360-day year consisting of twelve months of 30 days each, and for any period shorter than a full monthly distribution period, Dividends will be computed on the basis of the actual number of days elapsed in such period. Under the Indenture, CL&P has the right from time to time, so long as no Event of Default has occurred and is continuing, to extend the interest payment period for one or more series of the Subordinated Debentures for up to 60 consecutive months (an "Extension Period"); provided that no Extension Period shall extend beyond the stated maturity, or acceleration thereof, or any date of redemption, of any series of Subordinated Debentures. If such right is exercised, Dividends on the Preferred Securities would be deferred (but would continue to accumulate in arrears with additional Dividends accumulating thereon after the monthly payment date therefor) by CL&P Capital during any Extension Period. The term "Dividends" as used herein includes, as applicable, monthly distributions and distributions on monthly distributions in arrears. In the event that CL&P exercises this right, neither CL&P nor any majority-owned subsidiary of CL&P may declare or pay dividends on or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock (other than dividends by a wholly-owned subsidiary) during any Extension Period. Prior to the termination of any Extension Period, CL&P may shorten or further extend the interest payment period, provided that such Extension Period, together with all such previous and further extensions thereof, may not exceed 60 consecutive months. Upon the termination of any Extension Period and the payment of all amounts then due, CL&P may elect to extend the interest payment period again, subject to the above requirements. See "Description of the Subordinated Debentures--Option to Extend Interest Payment Period." Dividends on the Preferred Securities must be paid by CL&P Capital in any calendar year or portion thereof to the extent CL&P Capital has funds on hand legally available therefor. It is anticipated that CL&P Capital's earnings will be limited to interest payments on the Subordinated Debentures issued by CL&P to CL&P Capital. See "Description of the Subordinated Debentures." 5 Dividends on the Preferred Securities will be payable to the holders thereof as they appear on the books and records of CL&P Capital on the relevant record dates set forth in the Prospectus Supplement with respect to any series of the Preferred Securities. Subject to any applicable laws and regulations and the provisions of the Limited Partnership Agreement, each such payment will be made as described under "Book-Entry-Only Issuance--The Depository Trust Company" below. In the event that any date on which Dividends are payable on the Preferred Securities is not a Business Day, then payment of the Dividends payable on such date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay) except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date. A "Business Day" shall mean any day other than a day on which banking institutions in The City of New York, the State of Connecticut or the State of Delaware are authorized or required by law to close. CERTAIN RESTRICTIONS ON CL&P CAPITAL If Dividends have not been paid in full on any series of Preferred Securities, CL&P Capital shall not: (i) pay, or set aside for payment, any Dividends on any other series of the Preferred Securities, unless the amount of any Dividends paid, or set aside for payment, on any Preferred Securities is paid on all Preferred Securities then outstanding on a pro rata basis in proportion to the full Dividends to which each series of Preferred Securities would be entitled if paid in full; (ii) pay, or set aside for payment, any distribution on general partner interests; or (iii) redeem, purchase or otherwise acquire any Preferred Securities or general partner interests; until, in each case, such time as all accumulated and unpaid Dividends on all series of Preferred Securities shall have been paid in full for all prior distribution periods. As of the date of this Prospectus, there are no Preferred Securities outstanding. REDEMPTION PROVISIONS The redemption provisions with respect to each series of the Preferred Securities offered hereby will be set forth in the Prospectus Supplement related thereto. CL&P Capital may not redeem any Preferred Securities unless all accumulated and unpaid Dividends have been paid on all Preferred Securities for all monthly distribution periods terminating on or prior to the date of redemption. If a partial redemption would result in a delisting of such series of Preferred Securities from any national securities exchange on which such series of Preferred Securities is then listed, CL&P Capital may only redeem such series of Preferred Securities in whole. Notice of any redemption of the Preferred Securities will be given not less than 30 days nor more than 60 days prior to the date fixed for redemption thereof to the record holders thereof. The notice may state that it is subject to the receipt by CL&P Capital of redemption monies on or before such date fixed for redemption, which notice shall be of no effect unless such monies are so received prior to such date. No defect in the notice of redemption or in the mailing or distribution thereof or publication of its contents shall affect the validity of the redemption proceedings. In the event that any date fixed for redemption of Preferred Securities is not a Business Day, then payment of the Redemption Price payable on such date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay), except that if such Business Day falls in the next succeeding calendar year, such payment will be made on the immediately preceding Business Day (in each case with the same force and effect as if made on such day). Subject to applicable law, CL&P or its subsidiaries may at any time and from time to time purchase outstanding Preferred Securities by tender, in the open market or by private agreement. In the event that 6 CL&P surrenders any Preferred Securities to CL&P Capital, CL&P Capital will distribute, to or upon the order of CL&P, Subordinated Debentures of the corresponding series in aggregate principal amount equal to the aggregate liquidation preference of the Preferred Securities so surrendered. DISSOLUTION Pursuant to the Limited Partnership Agreement, CL&P Capital shall be dissolved and its affairs shall be wound up upon the occurrence of any of the following events: (i) the expiration of the term of CL&P Capital, which is 99 years, (ii) the withdrawal, removal or bankruptcy of the General Partner or the occurrence of any other event that under applicable law causes CL&P to cease to be the General Partner, except for a transfer to a permitted successor of the General Partner as set forth in the Limited Partnership Agreement, (iii) the entry of a decree of judicial dissolution, (iv) the written consent of the General Partner and all of the holders of the Preferred Securities or (v) if an Investment Company Act Event or a Tax Event has occurred, pursuant to an Action of the General Partner so providing. See "Certain Terms of the Series A Preferred Securities--Investment Company Act Event Redemption or Distribution," "--Tax Event Redemption or Distribution," and "--Liquidation Distribution" in the Prospectus Supplement. MERGER, CONSOLIDATION, ETC. OF CL&P CAPITAL CL&P Capital may not consolidate, amalgamate, merge with or into, or be replaced by, or convey, transfer or lease its properties and assets substantially as an entirety to any corporation or other entity, except with the approval of the General Partner and the holders of 66 2/3% in aggregate stated liquidation preference of the outstanding Preferred Securities or as otherwise described below. The General Partner may, without the consent of the holders of the Preferred Securities, cause CL&P Capital to consolidate, amalgamate, merge with or into, or be replaced by, or convey, transfer or lease its properties and assets substantially as an entirety to, a corporation, a limited liability company or a limited partnership, a trust or other entity organized as such under the laws of any state of the United States of America or the District of Columbia, provided that (i) such successor entity either (A) expressly assumes all of the obligations of CL&P Capital under the Preferred Securities or (B) substitutes for the Preferred Securities other securities having substantially the same terms as the Preferred Securities (the "Successor Securities") so long as the Successor Securities rank, as regards participation in the profits and assets of the successor entity, at least as high as the Preferred Securities rank, as regards participation in the profits and assets of CL&P Capital, (ii) CL&P confirms its obligations under the Guaranty with regard to the Successors Securities, if any, (iii) such consolidation, amalgamation, merger, replacement, conveyance, transfer or lease does not cause any series of Preferred Securities or Successor Securities to be delisted by any national securities exchange on which such series of Preferred Securities is then listed, (iv) such consolidation, amalgamation, merger, replacement, conveyance, transfer or lease does not cause the Preferred Securities or Successor Securities to be downgraded by any "nationally recognized statistical rating organization," as that term is defined by the SEC for purposes of Rule 436(g)(2) under the Securities Act of 1933, (v) such consolidation, amalgamation, merger, replacement, conveyance, transfer or lease does not adversely affect the powers, preferences and other special rights of holders of Preferred Securities or Successor Securities in any material respect, (vi) such successor entity has a purpose substantially identical to that of CL&P Capital, and (vii) prior to such consolidation, amalgamation, merger, replacement, conveyance, transfer or lease, CL&P has received an opinion of counsel (which may be regular tax or other counsel to CL&P or an affiliate, but not an employee thereof) to the effect that (A) holders of outstanding Preferred Securities will not recognize any gain or loss for United States federal income tax purposes as a result of the consolidation, amalgamation, merger, replacement, conveyance, transfer or lease, (B) such successor entity will be treated as a partnership for United States federal income tax purposes, (C) following such consolidation, amalgamation, merger, replacement, conveyance, transfer or lease, CL&P and such successor entity will be in compliance with the Investment Company Act of 1940 (the "1940 Act") without registering thereunder as an investment company, and (D) such consolidation, amalgamation, merger, replacement, conveyance, transfer or lease will not adversely affect the limited liability of holders of Preferred Securities or Successor Securities. 7 VOTING RIGHTS Except as provided below, above under "Merger, Consolidation, etc. of CL&P Capital" and below under "Description of the Guaranty--Amendments," and as otherwise required by law and the Limited Partnership Agreement, the holders of the Preferred Securities will have no voting rights. If (i) CL&P Capital fails to pay Dividends in full on the Preferred Securities for 18 consecutive months, (ii) an Event of Default (as defined in the Indenture) occurs and is continuing, or (iii) CL&P is in default on any of its payment or other obligations under the Guaranty, then the holders of all series of the Preferred Securities, acting as a single class, will be entitled, by a vote of the majority of the aggregate stated liquidation preference of the Preferred Securities then outstanding to appoint a special representative (the "Special Representative") to enforce CL&P Capital's creditors' rights against CL&P under the Subordinated Debentures and the Indenture and the obligations undertaken by CL&P under the Guaranty, including, after failure to pay Dividends for 60 consecutive monthly distribution periods on the Preferred Securities, the declaration and payment of Dividends on the Preferred Securities. Notwithstanding the failure of CL&P Capital to pay Dividends in full as described in clause (i) above, and the election of a Special Representative of the General Partner on account thereof, such Special Representative will not be able to compel CL&P to make interest payments on the Subordinated Debentures of any such series during such period of time as CL&P has exercised its right to defer interest payments on such Subordinated Debentures. Interest on the Subordinated Debentures of any series may be deferred at the option of CL&P for up to 60 consecutive months, as described under "Description of the Subordinated Debentures--Option to Extend Interest Payment Period." The Special Representative shall not be admitted as a partner of CL&P Capital or otherwise be deemed a partner of CL&P Capital and shall have no liability for the debts, obligations or liabilities of CL&P Capital, except to the extent otherwise required by applicable law in order for such Special Representative to enforce the rights of CL&P Capital and the holders of Preferred Securities under the Subordinated Debentures and the Indenture and fulfill its other duties under the Limited Partnership Agreement. For purposes of determining whether CL&P Capital has failed to pay Dividends in full for 18 consecutive monthly distribution periods, Dividends shall be deemed to remain in arrears, notwithstanding any payments in respect thereof, until full cumulative Dividends on all Preferred Securities have been or contemporaneously are declared and paid with respect to all monthly distribution periods terminating on or prior to the date of payment of such full cumulative Dividends. Subject to the requirements of applicable law, not later than 30 days after such right to appoint the Special Representative, the General Partner will convene a general meeting for the above purpose. If the General Partner fails to convene such meeting within such 30 day period, the holders of 10% of the aggregate stated liquidation preference of the outstanding Preferred Securities will be entitled to convene such meeting. The provisions of the Limited Partnership Agreement relating to the convening and conduct of the general meetings of security holders will apply with respect to any such meeting. Any Special Representative so appointed shall cease to act in such capacity immediately if CL&P Capital (or CL&P pursuant to the Guaranty) shall have paid in full all accumulated and unpaid Distributions on the Preferred Securities or such default or breach, as the case may be, shall have been cured. Notwithstanding the appointment of any such Special Representative, CL&P retains all rights under the Indenture, including the right to extend the interest payment period as provided under "Description of the Subordinated Debentures--Option to Extend Interest Payment Period." If any proposed amendment to the Limited Partnership Agreement provides for, or the General Partner otherwise proposes to effect, any action which would materially adversely affect the powers, preferences or special rights of any series of the Preferred Securities then outstanding, whether by way of amendment to the Limited Partnership Agreement or otherwise, then the holders of such series of Preferred Securities will be entitled to vote on such amendment or action of the General Partner (but not on any other amendment or action) and, in the case of an amendment or action which would equally adversely affect the powers, preferences or special rights of any other series of the Preferred Securities, all holders of such series of the Preferred Securities shall vote together as a class on such amendment or action of the General Partner (but not on any other amendment or action), and such amendment or action shall not be effective except with 8 the approval of the holders of not less than 66 2/3% of the aggregate stated liquidation preference of such series of Preferred Securities. Except in certain circumstances described under "Liquidation Distribution" or as required by the Partnership Act, CL&P Capital will be dissolved and wound up only with the consent of the holders of all Preferred Securities then outstanding. The powers, preferences or special rights attached to any Preferred Securities will be deemed not to be adversely affected by the creation or issue of, and no vote will be required for the creation or issue of, any additional series of Preferred Securities or additional general partner interests. Holders of Preferred Securities have no preemptive rights. So long as any series of the Subordinated Debentures are held by CL&P Capital, the General Partner, unless so directed by the Special Representative, shall not (i) direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or executing any trust or power conferred on the Trustee with respect to such series, (ii) waive any past default which is available under the Indenture, (iii) exercise any right to rescind or annul a declaration that the principal of all of a series of the Subordinated Debentures shall be due and payable or (iv) consent to any amendment, modification or termination of the Indenture, or to a supplemental indenture under the Indenture, where such consent shall be required, without, in each case, obtaining the prior approval of the holders of at least 66 2/3% in aggregate stated liquidation preference of all series of Preferred Securities affected thereby, acting as a single class; provided, however, that where a consent under the Indenture would require the consent of each holder affected thereby, no such consent shall be given by the General Partner without the prior consent of each holder of all series of Preferred Securities affected thereby. The General Partner shall not revoke any action previously authorized or approved by a vote of any series of Preferred Securities. The General Partner shall notify all holders of the Preferred Securities of any notice of default received from the Trustee with respect to the Subordinated Debentures. No vote or consent of the holders of the Preferred Securities will be required for CL&P Capital to redeem and cancel Preferred Securities in accordance with the Limited Partnership Agreement. Notwithstanding that holders of Preferred Securities are entitled to vote or consent under any of the circumstances described above, any of the Preferred Securities that are owned by CL&P or any entity owned more than 50% by CL&P, either directly or indirectly, shall not be entitled to vote or consent and shall, for the purposes of such vote or consent, be treated as if they were not outstanding. The holders of the Preferred Securities will have no rights to remove or replace the General Partner. BOOK-ENTRY-ONLY ISSUANCE--THE DEPOSITORY TRUST COMPANY On original issuance, The Depository Trust Company ("DTC") will act as securities depository for the Preferred Securities offered hereby. The Preferred Securities offered hereby will initially be registered on the books and records of CL&P Capital in the name of Cede & Co. (DTC's nominee). One or more fully-registered global Preferred Security certificates will be issued, representing in the aggregate the total number of Preferred Securities of each series, and will be deposited with DTC and no purchaser of a Preferred Security will receive a definitive certificate representing such purchaser's interest in CL&P Capital. DTC is a limited purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Exchange Act. DTC holds securities that its participants ("Participants") deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in Participants' accounts, thereby eliminating the need for physical movement of securities certificates. Direct Participants include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations ("Direct Participants"). DTC is owned by 9 a number of its Direct Participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others, such as securities brokers and dealers, banks and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). The rules applicable to DTC and its Participants are on file with the SEC. Purchases of Preferred Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Preferred Securities on DTC's records. The ownership interest of each actual purchaser of each Preferred Security ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchases, but Beneficial Owners are expected to receive written confirmations providing details of the transactions, as well as periodic statements of their holdings, from the Direct or Indirect Participants through which Beneficial Owners purchased Preferred Securities. Transfers of ownership interests in the Preferred Securities are to be accomplished by entries made on the books of Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Preferred Securities, except in the event that use of the book-entry system for the Preferred Securities is discontinued. DTC has no knowledge of the actual Beneficial Owners of the Preferred Securities. DTC's records reflect only the identity of the Direct Participants to whose accounts such Preferred Securities are credited, which may or may not be the Beneficial Owners. Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices shall be sent to Cede & Co. If less than all of a series of Preferred Securities are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such series to be redeemed. Although voting with respect to the Preferred Securities is limited, in those cases where a vote is required, neither DTC nor Cede & Co. will consent or vote with respect to Preferred Securities. Under its usual procedures, DTC would mail an omnibus proxy to CL&P Capital as soon as possible after the record date. The omnibus proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Preferred Securities are credited on the record date (identified in a listing attached to the omnibus proxy). Payments on the Preferred Securities will be made to DTC. DTC's practice is to credit Direct Participants' accounts on the relevant payment date in accordance with their respective holdings shown on DTC's records, unless DTC has reason to believe that it will not receive payments on such payment date. Payments by Participants to Beneficial Owners will be governed by standing instructions and customer practices and will be the responsibility of such Participant and not of DTC, CL&P Capital, the General Partner or CL&P, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of Dividends to DTC is the responsibility of CL&P Capital, disbursement of such payments to Direct Participants is the responsibility of DTC, and disbursement of such payments to the Beneficial Owners is the responsibility of Direct and Indirect Participants. The information in this section concerning DTC and DTC's book-entry system has been obtained from DTC. CL&P and CL&P Capital believe such information to be reliable, but neither CL&P nor CL&P Capital takes responsibility for the accuracy thereof. DTC may discontinue providing its services as securities depository with respect to any series of the Preferred Securities at any time by giving reasonable notice to CL&P Capital. Under such circumstances, in 10 the event that a successor securities depository is not obtained, Preferred Security certificates are required to be printed and delivered. Additionally, the General Partner may decide to select another securities depository for the Preferred Securities or to discontinue use of the system of book-entry transfers through DTC (or a successor depository), including for the purpose of effectuating a partial redemption of a series of Preferred Securities in which only the Preferred Securities of certain holders will be redeemed. In the event that the book entry only system is discontinued, the General Partner will appoint a registrar, transfer agent and paying agent for the Preferred Securities and Preferred Security certificates will be printed and delivered. Registration of transfers of Preferred Securities will be effected without charge by or on behalf of CL&P Capital, but upon payment of any tax or other governmental charges which may be imposed in relation to it. CL&P Capital will not be required to register or cause to be registered the transfer of Preferred Securities after such Preferred Securities have been called for redemption. MISCELLANEOUS CL&P, in its capacity as general partner, is authorized and directed to use its best efforts to manage the affairs of CL&P Capital in such a way that CL&P Capital would not be deemed to be an "investment company" required to be registered under the 1940 Act or taxed as a corporation for United States federal income tax purposes and so that the Subordinated Debentures will be treated as indebtedness of CL&P for United States federal income tax purposes. In this connection, CL&P is authorized to take any action not inconsistent with applicable law, the Certificate of Limited Partnership of CL&P Capital or the Limited Partnership Agreement, and that does not materially adversely affect the interests of holders of Preferred Securities, that CL&P determines in its discretion to be necessary or desirable for such purposes. CL&P Capital may not borrow money or issue debt or mortgage or pledge any of its assets. DESCRIPTION OF THE SUBORDINATED DEBENTURES The following is a summary of certain terms and provisions of the Subordinated Debentures and the Indenture. The summary is subject to, and is qualified by reference to the Indenture, which is filed as an exhibit to the Registration Statement of which this Prospectus forms a part. GENERAL Concurrently with the issuance of each series of the Preferred Securities, CL&P Capital will lend the proceeds from the sale thereof, plus the General Partner's related capital contribution, to CL&P. For each series of Preferred Securities, the loan will be evidenced by a separate series of Subordinated Debentures issued by CL&P to CL&P Capital. The Subordinated Debentures will be unsecured subordinated obligations of CL&P issued under the Indenture and, except in the case of the Series A Subordinated Debentures, a supplemental indenture. Each series of Subordinated Debentures will be in the principal amount equal to the aggregate stated liquidation preference of the related series of Preferred Securities plus the General Partner's related capital contribution, and will bear interest at a rate equal to the Dividend rate on such series of Preferred Securities accruing from the date Dividends accrue on the related series of Preferred Securities, payable as to interest on or before the dates on which Dividends are payable on the related series of Preferred Securities to the holder or holders of record on the record dates for such series of Subordinated Debentures. Reference is made to the Prospectus Supplement which will accompany this Prospectus for the following terms of the Subordinated Debentures offered thereby: (i) designation; (ii) date or dates of maturity, which may be serial; (iii) interest rate or method of determination of the interest rate and whether Additional Interest will be payable; (iv) interest payment dates and the record dates therefor; (v) issue date; (vi) authorized denominations; (vii) the place or places for the payment of principal (and premium, if any) and for the payment of interest; (viii) limitation upon the aggregate principal amount of Subordinated Debentures of the series which may be issued; (ix) the optional and mandatory redemption provisions, if any; and (x) provisions, if any, for any sinking or analogous fund with respect to the Subordinated Debentures of such series. 11 OPTION TO EXTEND INTEREST PAYMENT PERIOD Under the Indenture, CL&P has the right from time to time, so long as no Event of Default has occurred and is continuing, to extend the interest payment period for one or more series of the Subordinated Debentures for up to 60 consecutive months (an "Extension Period"); provided that no Extension Period shall extend beyond the stated maturity, or acceleration thereof, or any date of redemption, of any series of Subordinated Debentures. At the end of the Extension Period, CL&P shall pay all interest, including Additional Interest, if any, then accrued and unpaid (together with interest thereon compounded monthly at the rate specified for the applicable series to the extent permitted by applicable law). During any such Extension Period, neither CL&P nor any majority-owned subsidiary of CL&P shall declare or pay any dividend on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock (other than dividends paid by wholly- owned subsidiaries). Prior to the termination of an Extension Period, CL&P may shorten or further extend the interest payment period, provided that such Extension Period together with all such further extensions thereof may not exceed 60 consecutive months. Upon the termination of any Extension Period and the payment of all amounts then due, CL&P may select a new Extension Period subject to the above requirements. CL&P shall give the Trustee notice of its selection of such extended or shortened interest payment period on or prior to the earliest of (i) one Business Day prior to the date on which the related Dividend by CL&P Capital on the Preferred Securities would otherwise be payable, (ii) one Business Day prior to the date CL&P Capital is required to give notice of the record or payment date of such related Dividend to any national securities exchange on which the Preferred Securities are then listed or other applicable self-regulatory organization, and (iii) two Business Days prior to such record date. CL&P shall give or cause the Trustee to give such notice of its selection of such extended interest payment period to the holders of the Subordinated Debentures. ADDITIONAL INTEREST If CL&P Capital would be required to pay any taxes, duties, assessments or governmental charges of whatever nature (other than withholding taxes) imposed by the United States, or any other taxing authority, then, in any such case, CL&P will pay as interest ("Additional Interest") such amounts as shall be required so that the net amounts received and retained by CL&P Capital after paying any such taxes, duties, assessments or governmental charges will not be less than the amounts CL&P Capital would have received had no such taxes, duties, assessments or governmental charges been imposed. SUBORDINATION The Indenture provides that all payments by CL&P in respect of the Subordinated Debentures shall be subordinated to the prior payment in full of all amounts payable on present and future Senior Indebtedness. The term "Senior Indebtedness" means (i) the principal of and premium in respect of (A) indebtedness of CL&P for money borrowed and (B) indebtedness evidenced by securities, debentures, bonds or other similar instruments issued by CL&P; (ii) all capital lease obligations of CL&P; (iii) all obligations of CL&P issued or assumed as the deferred purchase price of property, all conditional sale obligations of CL&P and all obligations of CL&P under any title retention agreement (but excluding trade accounts payable arising in the ordinary course of business); (iv) certain obligations of CL&P for the reimbursement of any obligor on any letter of credit, banker's acceptance, security purchase facility or similar credit transaction entered into in the ordinary course of business of CL&P; (v) all obligations of the type referred to in clauses (i) through (iv) of other persons and all dividends of other persons (other than Preferred Securities) for the payment of which, in either case, CL&P is responsible or liable as obligor, guarantor or otherwise; and (vi) all obligations of the type referred to in clauses (i) through (v) of other persons secured by any lien on any property or asset of CL&P (whether or not such obligation is assumed by CL&P), except for (1) any such indebtedness that is by its terms subordinated to or pari passu with the Subordinated Debentures, (2) any indebtedness between or among CL&P and its affiliates and (3) endorsements of negotiable instruments for collection in the ordinary course of business. Upon any payment or distribution of assets or securities of CL&P, upon any dissolution or winding up or total or partial liquidation or reorganization of CL&P, whether voluntary or involuntary, or in bankruptcy, 12 insolvency, receivership or other proceedings, all amounts payable on, under or in connection with Senior Indebtedness (including any interest accruing on such Senior Indebtedness subsequent to the commencement of a bankruptcy, insolvency or similar proceeding) shall first be paid in full in cash, or payment provided for in cash or cash equivalents, before the holders of the Subordinated Debentures, or the Trustee on behalf of such holders, shall be entitled to receive from CL&P any payment of principal of or interest on or any other amounts in respect of the Subordinated Debentures. No direct or indirect payment by or on behalf of CL&P of principal of or interest on the Subordinated Debentures, whether pursuant to the terms of the Subordinated Debentures or upon acceleration or otherwise, shall be made if, at the time of such payment, there exists (i) a default in the payment of all or any portion of any Senior Indebtedness or (ii) any other default affecting Senior Indebtedness permitting its acceleration and as a result of which the maturity of Senior Indebtedness has been accelerated and, in either case, requisite notice has been given to the Trustee and such default shall not have been cured or waived by or on behalf of the holders of such Senior Indebtedness. If the Trustee, CL&P Capital, as holder of the Subordinated Debentures, or any other holder of the Preferred Securities, shall have received any payment on account of the principal of or interest on the Subordinated Debentures when such payment is prohibited and before all amounts payable on, under, or in connection with Senior Indebtedness are paid in full in cash, or payment provided for in cash or cash equivalents, then such payment shall be received and held in trust for the holders of Senior Indebtedness and shall be paid over or delivered first to the holders of the Senior Indebtedness remaining unpaid to the extent necessary to pay such Senior Indebtedness in full. Nothing in the Indenture shall limit the right of the Trustee, the Special Representative or any holder of the Subordinated Debentures to exercise all remedies permitted under applicable laws, subject to the above rights of the holders of Senior Indebtedness. Upon the payment in full of all Senior Indebtedness, CL&P Capital (and any Special Representative appointed by such holders) shall be subrogated to the rights of the holders of such Senior Indebtedness to receive payments or distributions of assets of CL&P made on such Senior Indebtedness until all accrued interest on and principal of the Subordinated Debentures shall be paid in full. The Indenture does not limit the aggregate amount of Senior Indebtedness which CL&P may issue. CERTAIN COVENANTS OF CL&P CL&P will covenant that neither it nor any majority-owned subsidiary will declare or pay any dividend on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock (other than dividends by a wholly-owned subsidiary) (i) during an Extension Period, (ii) if there shall have occurred any Event of Default or event that, after the giving of notice or the passage of time, or both, would constitute an Event of Default under the Indenture or (iii) if CL&P shall be in default with respect to its payment obligations under the Guaranty. CL&P will also covenant (i) to maintain, directly or indirectly, 100% ownership of the General Partner's interest in CL&P Capital, (ii) to cause the General Partner to maintain a capital account balance equal to at least 3% of the total positive capital account balances for CL&P Capital and, if necessary, to make additional capital contributions to meet this requirement, (iii) to timely perform or cause the General Partner to timely perform all of its duties as general partner of CL&P Capital (including the duty to pay Dividends on the Preferred Securities), and (iv) to use its reasonable efforts to cause CL&P Capital to remain a limited partnership and otherwise continue to be treated as a partnership for United States federal income tax purposes. The Special Representative or the holders of 66 2/3% in aggregate principal amount of the Subordinated Debentures at the time outstanding, by notice to the Trustee, CL&P and CL&P Capital, may waive any Event of Default, or any event that, after the giving of notice or the passage of time, or both, would constitute an Event of Default, under the Indenture; however, under the Limited Partnership Agreement, so long as the 13 Subordinated Debentures are held by CL&P Capital, CL&P, as General Partner, may not waive any default under the Indenture unless so directed by the Special Representative. ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF PREFERRED SECURITIES In the case of Subordinated Debentures corresponding to Preferred Securities of any series, the holders of the Preferred Securities of such series will have the rights referred to under "Description of the Preferred Securities-- Voting Rights," including the right under certain circumstances to appoint a Special Representative, which Special Representative shall be authorized to exercise CL&P Capital's and such holders' other rights under such Subordinated Debentures and the Indenture. MODIFICATION OF THE INDENTURE The Indenture contains provisions permitting CL&P and the Trustee, with the written consent of the Special Representative or the holders of not less than 66 2/3% of the aggregate principal amount of the Subordinated Debentures at the time outstanding which are affected by the amendment or waiver, to amend the Indenture or the Subordinated Debentures issued under the Indenture or waive future compliance by CL&P with any provision of the Indenture or such Subordinated Debentures; provided that without the consent of each holder of a Subordinated Debenture affected no such modification may (a) reduce the principal amount of the Subordinated Debentures the holders of which must consent to an amendment of the Indenture or a waiver; (b) change the stated maturity of the principal of, or the interest or rate of interest on, the Subordinated Debentures, change adversely to the holders of the Subordinated Debentures the redemption provisions, or impair the right to institute suit for the enforcement of any such payment or make any Subordinated Debenture payable in money or securities other than that stated in the Subordinated Debenture; (c) make any change in the subordination provisions that adversely affects the rights of the holders of the Subordinated Debentures or change any other provision that adversely affects the rights of the holders of the Subordinated Debentures under the subordination provisions; (d) waive a default in the payment of the principal of, premium, if any, or interest on, any Subordinated Debenture; or (e) modify the right of any holder of a Subordinated Debenture to receive payment of principal or interest on or after the respective due dates or any mandatory redemption date, or to bring suit for the enforcement thereof. EVENTS OF DEFAULT The following are Events of Default under the Indenture: (i) default in the payment when due and payable of any interest (including Additional Interest) on the Subordinated Debentures (other than the payment of interest during an Extension Period), whether or not payment is prohibited by the subordination provisions or otherwise, and the default continues for a period of 10 days; (ii) default in payment when due and payable at maturity, acceleration or a Redemption Date for a mandatory redemption of the Subordinated Debentures of principal of (or premium, if any, on) the Subordinated Debentures, whether or not payment is prohibited by the subordination provisions or otherwise; (iii) default in the performance of, or failure to comply with, any other covenant or agreement in the Indenture or the Subordinated Debentures and such failure or default continues for 60 days after receipt of proper notice thereof, or (iv) certain events of bankruptcy, insolvency or reorganization of CL&P. In case an Event of Default under the Indenture shall occur and be continuing other than an Event of Default relating to bankruptcy, insolvency or reorganization of CL&P, in which case principal and interest on all of the Subordinated Debentures shall become immediately due and payable, the Trustee, the holders of not less than 25% of the aggregate principal amount of the Subordinated Debenture then outstanding, or the Special Representative may declare the principal of all the Subordinated Debentures to be due and payable. Under certain circumstances, any declaration of acceleration with respect to Subordinated Debentures may be rescinded by the Special Representative or by holders of a majority in aggregate principal amount of the Subordinated Debentures at the time outstanding if past defaults (except a default in the payment of principal of or interest on the Subordinated Debentures that has become due solely because of acceleration) have been cured or waived. CL&P is required to furnish to the Trustee annually a statement as to the performance by CL&P of its obligations under the Indenture and as to any default in such performance. 14 CONSOLIDATION, MERGER, ETC. OF CL&P The Indenture provides that CL&P may not consolidate with or merge with or into or sell, convey, transfer or lease all or substantially all of its assets unless (i) the successor, if other than CL&P, shall be organized and existing under the laws of the United States or any state thereof or the District of Columbia, and shall expressly assume by a supplemental indenture all of the obligations of CL&P under the Subordinated Debentures and the Indenture, (ii) immediately prior to and after giving effect to such transaction, no Event of Default, and no event which, after notice or passage of time or both, would become an Event of Default, shall have occurred and be continuing and (iii) CL&P delivers to the Trustee an officer's certificate and an opinion of counsel, each stating that such consolidation, merger, sale, conveyance, transfer or lease and such supplemental indenture comply with the Indenture. DEFEASANCE AND DISCHARGE Under the terms of the Indenture, and subject to the conditions set forth therein, CL&P will be discharged from any and all obligations in respect of the Subordinated Debentures if CL&P deposits with the Trustee, or any Paying Agent, in trust, (i) cash, or (ii) United States Government Obligations, maturing as to principal and interest at such times and in such amounts as will ensure the availability of cash, or (iii) a combination thereof, sufficient to pay all the principal of, premium, if any, and interest on all the then outstanding Subordinated Debentures. INFORMATION CONCERNING THE TRUSTEE Subject to certain provisions of the Indenture relating to its duties, the Trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request or direction of any of the holders or the Special Representative thereunder, unless such holders or the Special Representative shall have offered to the Trustee reasonable security and indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction. Subject to certain conditions and to such provision for indemnification, the holders of a majority in aggregate principal amount of the Subordinated Debentures then outstanding thereunder or the Special Representative will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee thereunder, or of exercising any trust or power conferred on the Trustee. Bankers Trust Company, the Trustee under the Indenture, has from time to time engaged in transactions with, or performed services for, CL&P and its affiliates in the ordinary course of business. DESCRIPTION OF THE GUARANTY The following is a summary of certain provisions of the Guaranty which will be executed and delivered by CL&P for the benefit of the holders from time to time of the Preferred Securities. The summary is subject to, and qualified by reference to the Payment and Guaranty Agreement which is filed as an exhibit to the Registration Statement of which this Prospectus forms a part. GENERAL CL&P will agree to the extent set forth herein, to pay in full, to the holders of the Preferred Securities, the Guaranty Payments (as defined below) (except to the extent paid by CL&P Capital), as and when due, regardless of any defense, right of set-off or counterclaim which CL&P may have or assert. The following payments, to the extent not paid by CL&P Capital (the "Guaranty Payments"), will be subject to the Guaranty (without duplication): (i) any accumulated and unpaid Dividends on the Preferred Securities to the extent that CL&P Capital has funds on hand legally available therefor, (ii) the redemption price with respect to any Preferred Securities called for redemption to the extent that CL&P Capital has funds on hand legally available therefor and (iii) upon a liquidation of CL&P Capital, the lesser of (a) the Liquidation Distribution and (b) the amount of assets of CL&P Capital legally available for distribution to holders of Preferred Securities in 15 liquidation of CL&P Capital. CL&P's obligation to make a Guaranty Payment may be satisfied by direct payment of the required amounts by CL&P to the holders of Preferred Securities or by payment of such amounts by CL&P Capital to such holders. In addition, the Limited Partnership Agreement restricts the transfer of the General Partner's interest (other than to a directly or indirectly wholly-owned subsidiary or to a permitted successor by consolidation, merger, etc., as described in "--Consolidation, Merger, etc. of CL&P") without the consent of all the holders of the Preferred Securities and requires the General Partner to timely perform all its duties as such (including the duty to pay Dividends on the Preferred Securities), which include, among other things, the General Partner's duties to directly pay all costs and expenses of CL&P Capital (thereby insuring that the amount of CL&P's payments on its Subordinated Debentures will be sufficient to allow payment in full to the holders of the Preferred Securities) and the covenant of the General Partner to at all times maintain a "fair market value net worth" of at least 10% of the total contributions (less redemptions) to CL&P Capital. While the assets of the General Partner will not be available for making distributions on the Preferred Securities, they will be available for payment of the expenses of CL&P Capital. Accordingly, the Guaranty, together with the related covenants contained in the Limited Partnership Agreement and CL&P's obligations under the Subordinated Debentures, provide for CL&P's full and unconditional guaranty of the Preferred Securities as set forth above. STATUS OF THE GUARANTY The Guaranty will constitute an unsecured obligation of CL&P and will rank subordinate and junior in right of payment to all general liabilities of CL&P. The Limited Partnership Agreement provides that each holder of Preferred Securities by acceptance thereof agrees that (i) the Subordinated Debentures are subordinate and junior in right of payment to all general liabilities of CL&P and to the extent provided in the Indenture and (ii) the Guaranty is subordinate and junior in right of payment to all general liabilities of CL&P. The Guaranty will constitute a guaranty of payment and not of collection. The Guaranty will be held for the benefit of the holders of the Preferred Securities. In the event of the appointment of a Special Representative, the Special Representative may enforce the Guaranty. If no Special Representative has been appointed to enforce the Guaranty, the General Partner has the right to enforce the Guaranty on behalf of the holders of the Preferred Securities. The holders of not less than 10% in aggregate stated liquidation preference of the Preferred Securities have the right to direct the time, method and place of conducting any proceeding for any remedy available in respect of the Guaranty, including the giving of directions to the General Partner or the Special Representative, as the case may be. If the General Partner or the Special Representative fails to enforce the Guaranty as above provided, any holder of Preferred Securities may institute a legal proceeding directly against CL&P to enforce its rights under the Guaranty without first instituting a legal proceeding against CL&P Capital or any other person or entity. The Guaranty will not be discharged except by payment of the Guaranty Payments in full to the extent not paid by CL&P Capital. EFFECT OF OBLIGATIONS UNDER SUBORDINATED DEBENTURES AND GUARANTY As set forth in the Limited Partnership Agreement, the sole purpose of CL&P Capital is to issue the Preferred Securities and lend the proceeds thereof, plus the General Partner's capital contributions, to CL&P. As long as payments of principal and interest are made when due on the Subordinated Debentures corresponding to the Preferred Securities, such payments will be sufficient to enable CL&P Capital to make all payments of Dividends on the Preferred Securities, because (i) the aggregate principal amount of such Subordinated Debentures will be equal to the sum of the aggregate liquidation preference of the Preferred Securities plus the General Partner's capital contributions to CL&P Capital; (ii) the interest rate and interest and other payment dates of such Subordinated Debentures of each series will correspond to the Dividend rate and Dividend and other payment dates for the Preferred Securities of such series; (iii) the Limited Partnership Agreement provides that the General Partner will pay for all costs and expenses of CL&P Capital; and (iv) the Limited Partnership Agreement further provides that the General Partner will not cause or permit CL&P Capital, among other things, to engage in any activity that is not consistent with the limited purposes of CL&P Capital. 16 If CL&P Capital fails to pay Dividends in full on any series of the Preferred Securities for 18 consecutive months or if a default under the Indenture occurs and is continuing, the Limited Partnership Agreement provides a mechanism whereby the holders of the Preferred Securities may elect a Special Representative to enforce the rights of CL&P Capital on the Subordinated Debentures and under the Indenture. Payments of Dividends on the Preferred Securities out of monies held by CL&P Capital are guaranteed by CL&P to the extent set forth under "--General" above. The Limited Partnership Agreement also provides that, if CL&P is in default on any payment or other obligation under the Guaranty, a Special Representative may be appointed; and CL&P, under the Guaranty, acknowledges, that such Special Representative may enforce the Guaranty on behalf of the holders of the Preferred Securities. In addition, if CL&P, as the General Partner, or the Special Representative fails to enforce the Guaranty, a holder of Preferred Securities may institute a legal proceeding directly against CL&P to enforce such holder's rights under the Guaranty without first instituting a legal proceeding against CL&P Capital or any other person or entity. CERTAIN COVENANTS OF CL&P Under the Guaranty, CL&P will covenant that, so long as any Preferred Securities remain outstanding, neither CL&P nor any majority-owned subsidiary of CL&P shall declare or pay any dividend on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock (other than dividends paid by a wholly-owned subsidiary) if at such time CL&P shall be in default with respect to its payment obligations under the Guaranty or if there shall have occurred and be continuing an Event of Default or any event that, with giving of notice or the passage of time, or both, would constitute an Event of Default under the Indenture. AMENDMENTS The Guaranty may only be amended by a written instrument executed by CL&P; however, if any Preferred Securities are outstanding, any changes which adversely affect the rights of holders of Preferred Securities, any termination of the Guaranty and any waiver of compliance with any covenant under the Guaranty may be effected only with the prior approval of the holders of not less than 66 2/3% of the aggregate liquidation preference of the outstanding Preferred Securities. CONSOLIDATION, MERGER, ETC. OF CL&P So long as any Preferred Securities remain outstanding, CL&P will maintain its corporate existence; provided that CL&P may consolidate with or merge with or into, or sell, convey, transfer or lease all or substantially all of its assets as an entirety to any person, corporation, partnership, limited liability company, joint venture association, joint stock company, trust, or unincorporated association if the entity formed by or surviving such consolidation or merger or to which such sale, conveyance, transfer, or lease shall have been made, if other than CL&P, is organized and existing under the laws of the United States or any state thereof or the District of Columbia and shall expressly assume all the obligations of CL&P under the Guaranty. ASSIGNMENT Except as provided in "--Consolidation, Merger, etc. of CL&P," CL&P may assign its obligations under the Guaranty only with the prior approval of the holders of not less than 66 2/3% of the aggregate stated liquidation preference of all Preferred Securities then outstanding. TERMINATION OF THE GUARANTY The Guaranty will terminate and be of no further force and effect upon full payment of the redemption price of all the Preferred Securities then outstanding or upon full payment of the amounts payable to the holders of the Preferred Securities upon liquidation of CL&P Capital; however, the Guaranty will continue to be effective or will be reinstated, as the case may be, if at any time any holder of Preferred Securities must restore payments of any sums paid under the Preferred Securities or the Guaranty. 17 PLAN OF DISTRIBUTION CL&P Capital may offer or sell Preferred Securities offered hereby to one or more underwriters for public offering and sale by them. CL&P Capital may sell Preferred Securities as soon as practicable after effectiveness of the Registration Statement. Any such underwriter involved in the offer and sale of the Preferred Securities will be named in an applicable Prospectus Supplement. Underwriters may offer and sell the Preferred Securities at a fixed price or prices, which may be changed or from time to time at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices. In connection with the sale of Preferred Securities, underwriters may be deemed to have received compensation from CL&P and/or CL&P Capital in the form of underwriting discounts or commissions and may also receive commissions. Underwriters may sell Preferred Securities to or through dealers, and such dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters. Any underwriting compensation paid by CL&P and/or CL&P Capital to underwriters in connection with the offering of Preferred Securities, and any discounts, concessions or commissions allowed by underwriters to participating dealers, will be set forth in an applicable Prospectus Supplement. Underwriters and dealers participating in the distribution of the Preferred Securities may be deemed to be underwriters, and any discounts and commissions received by them and any profit realized by them on resale of the Preferred Securities may be deemed to be underwriting discounts and commissions, under the Securities Act. Underwriters and dealers may be entitled, under agreement with CL&P and CL&P Capital, to indemnification against and contribution toward certain civil liabilities, including liabilities under the Securities Act, and to reimbursement by CL&P for certain expenses. Underwriters and dealers may engage in transactions with, or perform services for, CL&P and/or CL&P Capital and/or any of their affiliates in the ordinary course of business. Each series of Preferred Securities will be a new issue of securities and will have no established trading market. Any underwriters to whom Preferred Securities are sold by CL&P Capital for public offering and sale may make a market in such Preferred Securities, but such underwriters will not be obligated to do so and may discontinue any market making at any time without notice. The Preferred Securities may or may not be listed on a national securities exchange. No assurance can be given as to the liquidity of or the trading markets for any Preferred Securities. LEGAL OPINIONS AND EXPERTS Legal matters in connection with the validity of the Preferred Securities, Subordinated Debentures and the Guaranty and certain tax matters in connection with the Preferred Securities and Subordinated Debentures will be passed upon for CL&P and CL&P Capital by Day, Berry & Howard, CityPlace I, Hartford, Connecticut. Legality of the Preferred Securities will be passed upon for the underwriters or other purchasers by Winthrop, Stimson, Putnam & Roberts, One Battery Park Plaza, New York, New York. CL&P's audited financial statements and schedules related thereto, incorporated by reference in this Prospectus, have been audited by Arthur Andersen LLP, independent public accountants, as indicated in their reports with respect thereto, which have also been incorporated by reference herein, in reliance upon the authority of said firm as experts in accounting and auditing in giving said reports. 18 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESEN- TATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE PRO- SPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE PRO- SPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF ANY OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS SUP- PLEMENT AND THE PROSPECTUS OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPEC- TUS NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS COR- RECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF SUCH INFORMATION. -------------- TABLE OF CONTENTS PROSPECTUS SUPPLEMENT
PAGE ---- Certain Investment Considerations.......................................... S-2 CL&P Capital............................................................... S-3 CL&P....................................................................... S-3 Use of Proceeds............................................................ S-4 Certain Terms of the Series A Preferred Securities......................... S-4 Certain Terms of the Series A Subordinated Debentures...................... S-7 United States Taxation..................................................... S-7 Underwriting............................................................... S-11 PROSPECTUS Available Information...................................................... 2 Incorporation of Certain Documents by Reference............................ 2 CL&P Capital............................................................... 3 CL&P....................................................................... 3 Coverage Ratios............................................................ 3 Use of Proceeds............................................................ 4 Description of the Preferred Securities.................................... 4 Description of the Subordinated Debentures................................. 11 Description of the Guaranty................................................ 15 Plan of Distribution....................................................... 18 Legal Opinions and Experts................................................. 18
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PREFERRED SECURITIES CL&P CAPITAL % CUMULATIVE MONTHLY INCOME PREFERRED SECURITIES, SERIES A GUARANTEED TO THE EXTENT THE ISSUER HAS FUNDS LEGALLY AVAILABLE THEREFOR, AS SET FORTH HEREIN, BY THE CONNECTICUT LIGHT AND POWER COMPANY -------------- PROSPECTUS SUPPLEMENT -------------- GOLDMAN, SACHS & CO. SALOMON BROTHERS INC MERRILL LYNCH & CO. MORGAN STANLEY & CO. INCORPORATED PRUDENTIAL SECURITIES INCORPORATED SMITH BARNEY INC. REPRESENTATIVES OF THE UNDERWRITERS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION SEC 1933 Act Filing Fee........................................... $ 44,000 Printing Expenses................................................. 25,000 Legal Fees........................................................ 75,000 NYSE Fee.......................................................... 45,000 Organization Fee.................................................. 15,500 Trustee........................................................... 5,000 Accounting Fees................................................... 25,000 Rating Agency Fees................................................ 60,000 NUSCO............................................................. 20,000 Blue Sky Listings................................................. 3,500 Miscellaneous..................................................... 7,000 -------- Total........................................................... $325,000 ========
-------- Note: Estimated expenses associated with one MIPS issuance. ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS Indemnification of the Company's officers and directors is governed by Section 33-320a of the Connecticut Stock Corporation Act (see Exhibit 99 hereto). ITEM 16. EXHIBITS
EXHIBIT NO. DESCRIPTION ----------- ----------- (1) Form of Underwriting Agreement to be used in connection with the issuance of Preferred Securities. (4)(a) Form of Indenture between CL&P Capital and Bankers Trust Company, as Trustee. (4)(b) Limited Partnership Agreement of CL&P Capital, including Action of General Partner with respect to Series A Preferred Securities. (4)(c) Form of Subordinated Debenture (See Exhibit (4)(a)). (4)(d) Form of Preferred Security (See Exhibit (4)(b)). (4)(e) Form of Payment and Guaranty Agreement with respect to Preferred Securities. (5) Opinion of Counsel with respect to legality. (8) Opinion of Day, Berry & Howard with respect to tax matters. (12)(a) Statement with respect to computation of Ratios of Earnings to Fixed Charges. (12)(b) Statement with respect to computation of Ratios of Earnings to Fixed Charges and Preferred Stock Dividends. (23)(a) Consent of Arthur Andersen LLP. (23)(b) Consent of Counsel (included in Exhibits (5) and (8) above). (24) Power(s) of Attorney (See Signature Page). (25) Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of Bankers Trust Company, as Trustee under the Indenture. (99) Section 33-320a of the Connecticut Stock Corporation Act.
II-1 ITEM 17. UNDERTAKINGS (a) The undersigned Registrants hereby undertake: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement; and (iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; provided, however, that the undertakings set forth in paragraph (a)(1)(i) and (a)(1)(ii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by The Connecticut Light and Power Company pursuant to Section 13 or 15(d) of the Securities Act of 1934 that are incorporated by reference in the Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) For purposes of determining any liability under the Securities Act of 1933, each filing of The Connecticut Light and Power Company's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and persons controlling the Registrants pursuant to the provision described under Item 15 above, or otherwise, the Registrants have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrants of expenses incurred or paid by a director, officer or controlling person of the Registrants in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrants will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. (d) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective. (e) For purposes of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-2 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED THEREUNTO DULY AUTHORIZED, IN THE TOWN OF BERLIN, STATE OF CONNECTICUT ON THE 18TH DAY OF NOVEMBER, 1994. The Connecticut Light and Power Company /s/ Hugh C. MacKenzie By: _______________________________ HUGH C. MACKENZIE PRESIDENT PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED. THE CONNECTICUT LIGHT AND POWER COMPANY AND EACH PERSON WHOSE SIGNATURE APPEARS BELOW HEREBY CONSTITUTE ROBERT E. BUSCH, JOHN B. KEANE, ROBERT C. ARONSON, JEFFREY C. MILLER AND JANE P. SEIDL, AND EACH OF THEM SINGLY, THEIR TRUE AND LAWFUL ATTORNEYS, WITH FULL POWER TO THEM AND EACH OF THEM TO SIGN FOR THEM AND IN THEIR NAMES, IN THE CAPACITIES INDICATED ABOVE OR BELOW, AS THE CASE MAY BE, ANY AND ALL AMENDMENTS TO THIS REGISTRATION STATEMENT, HEREBY RATIFYING AND CONFIRMING ITS OR THEIR SIGNATURES AS IT MAY BE SIGNED BY SAID ATTORNEYS TO ANY AND ALL AMENDMENTS TO SAID REGISTRATION STATEMENT. SIGNATURE TITLE DATE --------- ----- ---- /s/ Hugh C. MacKenzie President and a November 18, _____________________________________ Director 1994 HUGH C. MACKENZIE PRINCIPAL EXECUTIVE OFFICER /s/ Robert E. Busch Executive Vice November 18, _____________________________________ President and Chief 1994 ROBERT E. BUSCH Financial Officer PRINCIPAL FINANCIAL OFFICER and a Director /s/ John W. Noyes Vice President and November 18, _____________________________________ Controller 1994 JOHN W. NOYES PRINCIPAL ACCOUNTING OFFICER Chairman and a November , _____________________________________ Director 1994 WILLIAM B. ELLIS /s/ Robert G. Abair Director November 18, _____________________________________ 1994 ROBERT G. ABAIR Director November , _____________________________________ 1994 BARRY ILBERMAN /s/ John B. Keane Director November 18, _____________________________________ 1994 JOHN B. KEANE /s/ Bernard M. Fox Director November 18, _____________________________________ 1994 BERNARD M. FOX /s/ Cheryl W. Grise Director November 18, _____________________________________ 1994 CHERYL W. GRISE /s/ John F. Opeka Director November 18, _____________________________________ 1994 JOHN F. OPEKA /s/ William T. Frain, Jr. Director November 18, _____________________________________ 1994 WILLIAM T. FRAIN, JR. II-3 PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, CL&P CAPITAL, L.P. CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED THEREUNTO DULY AUTHORIZED, IN THE TOWN OF BERLIN, STATE OF CONNECTICUT ON THE 18TH DAY OF NOVEMBER, 1994. CL&P Capital, L.P. By: The Connecticut Light and Power Company, General Partner /s/ John B. Keane By: _______________________________ JOHN B. KEANE VICE PRESIDENT AND TREASURER II-4 EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION PAGE ----------- ----------- ---- (1) Form of Underwriting Agreement to be used in connection with the issuance of Preferred Securities. (4)(a) Form of Indenture between CL&P Capital and Bankers Trust Company, as Trustee. (4)(b) Limited Partnership Agreement of CL&P Capital, including Action of General Partner with respect to Series A Preferred Securities . (4)(c) Form of Subordinated Debenture (See Exhibit (4)(a)). (4)(d) Form of Preferred Security (See Exhibit (4)(b)). (4)(e) Form of Payment and Guaranty Agreement with respect to Preferred Securities. (5) Opinion of Counsel with respect to legality. (8) Opinion of Day, Berry & Howard with respect to tax matters. (12)(a) Statement with respect to computation of Ratios of Earnings to Fixed Charges. (12)(b) Statement with respect to computation of Ratios of Earnings to Fixed Charges and Preferred Stock Dividends. (23)(a) Consent of Arthur Andersen LLP. (23)(b) Consent of Counsel (included in Exhibits (5) and (8) above). (24) Power(s) of Attorney (See Signature Page). (25) Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of Bankers Trust Company, as Trustee under the Indenture. (99) Section 33-320a of the Connecticut Stock Corporation Act.
EX-1 2 UNDERWRITING AGREEMENT CL&P CAPITAL, L.P. Preferred Securities representing limited partner interests guaranteed to the extent described in the applicable Pricing Agreement by The Connecticut Light and Power Company ____________________________________________________ Underwriting Agreement ---------------------- __________, 1994 [Goldman, Sachs & Co. [[Name(s) of Co-Representative(s)] c/o Goldman, Sachs & Co.] 85 Broad Street, New York, New York 10004.] [To the Representatives of the several Underwriters named in the respective Pricing Agreements hereinafter described.] Ladies and Gentlemen: From time to time CL&P Capital, L.P. ("CL&P Capital"), a limited partnership formed under the laws of the State of Delaware, as issuer, and The Connecticut Light and Power Company, a Connecticut corporation, as guarantor (the "Guarantor"), each proposes to enter into one or more Pricing Agreements (each a "Pricing Agreement") in the form of Annex I hereto, with such additions and deletions as the parties thereto may determine, and, subject to the terms and conditions stated herein and therein, to issue and sell to the firms named in Schedule I to the applicable Pricing Agreement (such firms constituting the "Underwriters" with respect to such Pricing Agreement and the securities specified therein) certain preferred securities representing limited partner interests in CL&P Capital (liquidation preference $25 per preferred partner interest) (the "Preferred Securities") specified in Schedule II to such Pricing Agreement (with respect to such Pricing Agreement, the "Designated Preferred Securities"), guaranteed by the Guarantor as to the payment of distributions, to the extent CL&P Capital has cash on hand sufficient to permit such payments and funds legally available therefor, and as to payments on liquidation or redemption to the extent set forth in the Prospectus (as defined below) with respect to such Preferred Securities (the "Guarantee"). The Designated Preferred Securities and the Guarantee are herein collectively referred to as the "Designated Securities". The terms and rights of any particular issuance of Designated Securities shall be as specified in the Pricing Agreement relating thereto. -2- 1. Particular sales of Designated Securities may be made from time to time to the Underwriters of such Designated Securities, for whom the firms designated as representatives of the Underwriters of such Designated Securities in the Pricing Agreement relating thereto will act as representatives (the "Representatives"). The term "Representatives" also refers to a single firm acting as sole representative of the Underwriters and to Underwriters who act without any firm being designated as their representative. This Underwriting Agreement shall not be construed as an obligation of CL&P Capital to sell any of the Preferred Securities or as an obligation of any of the Underwriters to purchase any of the Preferred Securities. The obligation of CL&P Capital to issue and sell any of the Preferred Securities and the obligation of any of the Underwriters to purchase any of the Preferred Securities shall be evidenced by the Pricing Agreement with respect to the Designated Securities specified therein. Each Pricing Agreement shall specify the aggregate amount of Designated Securities, the initial public offering price of such Designated Securities or the manner of determining such price, the terms of the Designated Securities, the purchase price to the Underwriters of such Designated Securities, the names of the Underwriters of such Designated Securities, the names of the Representatives of such Underwriters, the amount of such Designated Securities to be purchased by each Underwriter and the commission, if any, payable to the Underwriters with respect thereto and shall set forth the date, time and manner of delivery of such Designated Securities, if any, and payment therefor. The Pricing Agreement shall also specify (to the extent not set forth in the registration statement and prospectus with respect thereto) the terms of such Designated Securities. A Pricing Agreement shall be in the form of an executed writing (which may be in counterparts), and may be evidenced by an exchange of telegraphic communications or any other rapid transmission device designed to produce a written record of communications transmitted. The obligations of the Underwriters under this Agreement and each Pricing Agreement shall be several and not joint. 2. Each of CL&P Capital and the Guarantor, jointly and severally, represents and warrants to, and agrees with, each of the Underwriters that: (a) A registration statement on Form S-3 (File No. 33-_______) in respect of the Preferred Securities, the Guarantee and the [Deferrable Interest] Subordinated Debentures of the Guarantor (the "Debt Securities") has been filed with the Exchange Commission (the "Commission"); such registration statement and any post-effective amendment thereto, each in the form heretofore delivered or to be delivered to the Representatives and, excluding exhibits to such registration statement, but including all documents incorporated by reference in the prospectus included therein, to the Representatives for each of the other Underwriters have been declared effective by the Commission in such form; no other document with respect to such registration statement or document incorporated by reference therein has heretofore been filed, or transmitted for filing, with the Commission (other than prospectuses filed pursuant to Rule 424(b) of the rules and regulations of the Commission under the Securities Act of 1933, as amended (the "Act") each in the form heretofore delivered to the Representatives); and no stop order suspending the effectiveness of such registration statement has been issued and no proceeding for that purpose has been initiated or threatened by the Commission (any preliminary prospectus included in such registration statement or filed with the Commission pursuant to Rule 424(a) under the Act, is hereinafter called a "Preliminary Prospectus"; the various parts of such -3- registration statement, including all exhibits thereto and the documents incorporated by reference in the prospectus contained in the registration statement at the time such part of the registration statement became effective but excluding Form T-1, each as amended at the time such part of the registration statement became effective, are hereinafter collectively called the "Registration Statement"; the prospectus relating to the Preferred Securities, the Guarantee and the Debt Securities, in the form in which it has most recently been filed, or transmitted for filing, with the Commission on or prior to the date of this Agreement, is hereinafter called the "Prospectus"; any reference herein to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to the applicable form under the Act, as of the date of such Preliminary Prospectus or Prospectus, as the case may be; any reference to any amendment or supplement to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include any documents filed after the date of such Preliminary Prospectus or Prospectus, as the case may be, under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated by reference in such Preliminary Prospectus or Prospectus, as the case may be; any reference to any amendment to the Registration Statement shall be deemed to refer to and include any annual report of CL&P Capital and the Guarantor filed pursuant to Section 13(a) or 15(d) of the Exchange Act after the effective date of the Registration Statement that is incorporated by reference in the Registration Statement; and any reference to the Prospectus as amended or supplemented shall be deemed to refer to the Prospectus as amended or supplemented in relation to the applicable Designated Securities in the form in which it is filed with the Commission pursuant to Rule 424(b) under the Act in accordance with Section 5(a) hereof, including any documents incorporated by reference therein as of the date of such filing); (b) The documents incorporated by reference in the Prospectus, when they became effective or were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder, and none of such documents contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and any further documents so filed and incorporated by reference in the Prospectus or any further amendment or supplement thereto, when such documents become effective or are filed with the Commission, as the case may be, will conform in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to CL&P Capital by an Underwriter of Designated Preferred Securities through the Representatives expressly for use in the Prospectus as amended or supplemented relating to such Preferred Securities; (c) The Registration Statement and the Prospectus conform, and any further amendments or supplements to the Registration Statement or the Prospectus will conform, in all material respects to the requirements of the Act and the Trust -4- Indenture Act of 1939, as amended (the "Trust Indenture Act") and the rules and regulations of the Commission thereunder and do not and will not, as of the applicable effective date as to the Registration Statement and any amendment thereto and as of the applicable filing date as to the Prospectus and any amendment or supplement thereto, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to CL&P Capital by an Underwriter of Designated Preferred Securities through the Representatives expressly for use in the Prospectus as amended or supplemented relating to such Preferred Securities; (d) Neither CL&P Capital, the Guarantor nor any of the Guarantor's subsidiaries has sustained since the date of the latest audited financial statements included or incorporated by reference in the Prospectus any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Prospectus; and, since the respective dates as of which information is given in the Registration Statement and the Prospectus, there has not been any change in the capital stock or long- term debt of the Guarantor or any of its subsidiaries or any change in the capital accounts or long-term debt of CL&P Capital or any material adverse change, or any development involving a prospective material adverse change, in or affecting (i) the general affairs, management, financial position, stockholders equity or results of operations of the Guarantor and its subsidiaries or (ii) the general affairs, management, financial position, capital accounts or results of operations of CL&P Capital, otherwise than as set forth or contemplated in the Prospectus; (e) CL&P Capital has been duly formed and is validly existing as a limited partnership in good standing under the Delaware Revised Uniform Limited Partnership Act, as amended (the "Partnership Act"); CL&P Capital has no subsidiaries; CL&P Capital is a special purpose limited partnership as described in the Prospectus and has conducted and will conduct no business other than the transactions contemplated by this Agreement and described in the Prospectus; CL&P Capital is not a party to or bound by any agreement or instrument other than its limited partnership agreement (in the form filed as an exhibit to the Registration Statement, the "Limited Partnership Agreement"); CL&P Capital has no liabilities or obligations other than those arising out of the transactions contemplated by this Agreement and described in the Prospectus; and CL&P Capital is not a party to or subject to any action, suit or proceeding of any nature; (f) The Guarantor has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Connecticut, with power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus; the Guarantor has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties, or conducts any business, so as to require such qualification; -5- (g) The Guarantor has an authorized capitalization as set forth in the Prospectus, and all of the issued shares of capital stock of the Guarantor have been duly and validly authorized and issued and are fully paid and non-assessable and are owned directly or indirectly by Northeast Utilities ("NU"), free and clear of all liens, encumbrances, equities or claims; (h) The Preferred Securities have been duly and validly authorized, and, when the Designated Securities are issued and delivered pursuant to this Agreement and the Pricing Agreement with respect to such Designated Securities, such Designated Securities will be duly and validly issued and fully paid and non-assessable; the Preferred Securities conform to the description thereof contained in the Registration Statement and the Designated Securities will conform to the description thereof contained in the Prospectus as amended or supplemented with respect to such Designated Securities; (i) The Limited Partnership Agreement has been duly authorized by the Guarantor and constitutes a valid and legally binding obligation of the Guarantor, in its capacity as general partner of CL&P Capital, enforceable in accordance with its terms, subject to bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and other laws of general applicability relating to or affecting creditors' rights and to general equity principles; (j) The Guarantor is the sole general partner of CL&P Capital; Northeast Utilities Service Company, a Connecticut corporation, is the sole Class A Limited Partner of CL&P Capital (the "Class A Limited Partner"); and the Class A Limited Partner has been duly incorporated and is validly existing in good standing as a corporation under the laws of the State of Connecticut, with power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus; and all of the issued general and limited partner interests of CL&P Capital are owned by the Guarantor and the Class A Limited Partner, respectively, and have been duly and validly authorized and validly issued, free and clear of all liens, encumbrances, equities or claims; (k) The issue and sale of the Preferred Securities and the compliance by CL&P Capital and the Guarantor with all of the provisions of this Agreement, any Pricing Agreement, the Indenture and the Guarantee, and the consummation of the transactions contemplated herein and therein will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which CL&P Capital or the Guarantor is a party or by which CL&P Capital and the Guarantor is bound or to which any of the property or assets of CL&P Capital or the Guarantor is subject, nor will such action result in any violation of the provisions of the Certificate of Incorporation or By-laws of the Guarantor or the Certificate of Limited Partnership of CL&P Capital or any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the CL&P Capital or the Guarantor or any of its properties; and no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the issue and sale of the Preferred Securities or the consummation by the CL&P Capital or the Guarantor of the -6- transactions contemplated by this Agreement or any Pricing Agreement or the Indenture or the Guarantee, except such as have been, or will have been prior to each Time of Delivery (as defined in Section 4 hereof), obtained under the Act and the Trust Indenture Act, the approval of the Commission under the Public Utility Holding Company Act of 1935, as amended (the "Holding Company Act") and the approvals of the Connecticut Department of Public Utility Control (the "DPUC"), and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Preferred Securities by the Underwriters; and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Preferred Securities by the Underwriters; (l) Other than as set forth in the Prospectus, there are no legal or governmental proceedings pending to which CL&P Capital, the Guarantor or any of the Guarantor's subsidiaries is a party or of which any of their properties is subject, which, if determined adversely to CL&P Capital, the Guarantor or any of the Guarantor's subsidiaries, as the case may be, would individually or in the aggregate have a material adverse effect on (i) the current or future financial position, capital accounts or results of operations of CL&P Capital or (ii) the current or future consolidated financial position, stockholders' equity or results of operations of the Guarantor or any of its subsidiaries; and, to the best of CL&P Capital's and the Guarantor's knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others; (m) Neither the Guarantor nor any of its subsidiaries is in violation of its Certificate of Incorporation or By-laws; CL&P Capital is not in violation of its Certificate of Limited Partnership or the Limited Partnership Agreement; and neither CL&P Capital, the Guarantor nor any of the Guarantor's subsidiaries is in default in the performance or observance of any material obligation, agreement, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a party or by which it or any of its properties may be bound; (n) The statements set forth in the Prospectus under the captions "Description of Preferred Securities," "Description of Debt Securities," and "Description of Guarantee", insofar as they purport to constitute a summary of the terms of the Preferred Securities, the Debt Securities and the Guarantee, respectively, under the caption "Taxation", and under the caption "Underwriting", insofar as they purport to describe the provisions of the laws and documents referred to therein, are accurate complete and fair; (o) Neither CL&P Capital nor the Guarantor is and, after giving effect to the offering and sale of the Preferred Securities, neither will be an "investment company" or an entity "controlled" by an "investment company", as such terms are defined in the Investment Company Act of 1940, as amended (the "Investment Company Act"); -7- (p) The Subordinated Indenture dated as of , 1994 between the Guarantor and , as trustee (the "Indenture") and the Debt Securities to be issued thereunder, have been duly authorized; the Indenture has been duly qualified under the Trust Indenture Act and, at the Time of Delivery (as defined herein), will have been duly executed and delivered and will constitute, and the Debt Securities, when duly executed and authenticated in accordance with the Indenture and issued and delivered under the circumstances provided in the Prospectus, as amended or supplemented, will constitute, valid and legally binding obligations of the Guarantor enforceable in accordance with their terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization, moratorium or similar laws of general equity principles, and will conform to the descriptions thereof contained in the Registration Statement and the Prospectus, as amended or supplemented; (q) The Guarantee has been duly authorized and, when issued and delivered by the Guarantor pursuant to this Agreement, will have been duly executed, authenticated, issued and delivered and will constitute a valid and legally binding obligation of the Guarantor entitled to the benefits provided by the Guarantee Agreement by the Guarantor dated , 1994 (the "Guarantee Agreement"); and the Guarantee will conform to the description thereof in the Prospectus; (r) Neither CL&P Capital, the Guarantor, nor any of their affiliates does business with the government of Cuba or with any person or affiliate located in Cuba within the meaning of Section 517.075, Florida Statutes; and (s) Arthur Andersen LLP, who have certified certain financial statements of CL&P Capital and the Guarantor and the Guarantor's subsidiaries, are independent public accountants as required by the Act and the rules and regulations of the Commission thereunder; (t) The Guarantor possesses such franchises, certificates, including certificates of public convenience and necessity, authorities, permits and easements issued by the appropriate state, federal or foreign regulatory agencies or bodies necessary to conduct the business now operated by it and/or own, operate and maintain its properties as described in the Prospectus, and it has not received notice of proceedings relating to the revocation or modification of any such franchise, certificate, authority, permit or easement which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would materially and adversely affect the condition, financial or otherwise, or the earnings, business affairs or business prospects of the Guarantor. 3. Upon the execution of the Pricing Agreement applicable to any Designated Securities and authorization by the Representatives of the release of such Designated Securities, the several Underwriters propose to offer such Designated Securities for sale upon the terms and conditions set forth in the Prospectus as amended or supplemented. 4. Certificates for the Designated Securities to be purchased by each Underwriter pursuant to the Pricing Agreement relating thereto, in the form specified in such Pricing Agreement, and in such authorized denominations and registered in such names as the Representatives may request upon at least forty- eight hours' prior notice to CL&P Capital, -8- shall be delivered by or on behalf of CL&P Capital to the Representatives for the account of such Underwriter, against payment by such Underwriter or on its behalf of the purchase price therefor by certified or official bank check or checks, payable to the order of CL&P Capital in the funds specified in such Pricing Agreement, all in the manner and at the place and time and date specified in such Pricing Agreement or at such other place and time and date as the Representatives and CL&P Capital may agree upon in writing, such time and date being herein called the "Time of Delivery". 5. Each of CL&P Capital and the Guarantor, jointly and severally, agrees with each of the Underwriters of any Designated Securities: (a) To prepare the Prospectus as amended and supplemented in relation to the applicable Designated Securities in a form approved by the Representatives and to file such Prospectus pursuant to Rule 424(b) under the Act not later than the Commission's close of business on the second business day following the execution and delivery of the Pricing Agreement relating to the applicable Designated Securities or, if applicable, such earlier time as may be required by Rule 424(b); to make no further amendment or any supplement to the Registration Statement or Prospectus as amended or supplemented after the date of the Pricing Agreement relating to such Preferred Securities and prior to any Time of Delivery for such Preferred Securities which shall be disapproved by the Representatives for such Preferred Securities promptly after reasonable notice thereof; to advise the Representatives promptly of any such amendment or supplement after any Time of Delivery for such Preferred Securities and furnish the Representatives with copies thereof; to file promptly all reports and any definitive proxy or information statements required to be filed by CL&P Capital or the Guarantor with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the delivery of a prospectus is required in connection with the offering or sale of such Preferred Securities, and during such same period to advise the Representatives, promptly after it receives notice thereof, of the time when any amendment to the Registration Statement has been filed or becomes effective or any supplement to the Prospectus or any amended Prospectus has been filed with the Commission, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of any prospectus relating to the Preferred Securities, of the suspension of the qualification of such Preferred Securities for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the Registration Statement or Prospectus or for additional information; and, in the event of the issuance of any such stop order or of any such order preventing or suspending the use of any prospectus relating to the Preferred Securities or suspending any such qualification, promptly to use its best efforts to obtain the withdrawal of such order; (b) Promptly from time to time to take such action as the Representatives may reasonably request to qualify such Preferred Securities for offering and sale under the securities laws of such jurisdictions as the Representatives may request and to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the distribution of such Shares, provided that in connection therewith neither CL&P -9- Capital nor the Guarantor shall be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction; (c) To furnish the Underwriters with copies of the Prospectus as amended or supplemented in such quantities as the Representatives may from time to time reasonably request, and, if the delivery of a prospectus is required at any time in connection with the offering or sale of the Preferred Securities or the Debt Securities and if at such time any event shall have occurred as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus is delivered, not misleading, or, if for any other reason it shall be necessary during such same period to amend or supplement the Prospectus or to file under the Exchange Act any document incorporated by reference in the Prospectus in order to comply with the Act or the Exchange Act, to notify the Representatives and upon their request to file such document and to prepare and furnish without charge to each Underwriter and to any dealer in securities as many copies as the Representatives may from time to time reasonably request of an amended Prospectus or a supplement to the Prospectus which will correct such statement or omission or effect such compliance; (d) To make generally available to its security holders as soon as practicable, but in any event not later than eighteen months after the effective date of the Registration Statement (as defined in Rule 158(c) under the Act), an earnings statement of the Guarantor and the Guarantor's subsidiaries (which need not be audited) complying with Section 11(a) of the Act and the rules and regulations of the Commission thereunder (including, at the option of the Guarantor, Rule 158); (e) During the period beginning from the date of the Pricing Agreement for such Designated Securities and continuing to and including the earlier of (i) the date, after the Time of Delivery, on which the distribution of the Designated Securities ceases, as determined by Goldman Sachs & Co., and (ii) the date which is 90 days after the Time of Delivery for such Designated Securities, not to offer, sell, contract to sell or otherwise dispose of, except as provided hereunder, any limited partner interests of CL&P Capital or any securities of CL&P Capital or the Guarantor that are substantially similar to the Preferred Securities or the Debt Securities or any preferred securities of the Guarantor, including but not limited to any securities that are convertible into or exchangeable for, or that represent the right to receive, any such substantially similar securities without the prior written consent of the Representatives; (f) To use its best efforts to list, subject to notice of issuance, the Preferred Securities and, upon issuance thereof to the holders of Preferred Securities, the Debt Securities on the New York Stock Exchange (the "Exchange"); (g) To furnish to the holders of the Preferred Securities as soon as practicable after the end of each fiscal year an annual report (including a balance sheet and statements of income, shareholder's equity and cash flows of the Guarantor and its consolidated subsidiaries audited by independent public accountants) and, as -10- soon as practicable after the end of each of the first three quarters of each fiscal year (beginning with the first such fiscal quarter ending after the effective date of the Registration Statement), consolidated summary financial information of the Guarantor and its subsidiaries for such quarter in reasonable detail; (h) During a period of five years from the date of this Agreement to furnish to you copies of all reports or other communications (financial and other) furnished to holders of common stock of the Guarantor, and deliver to you (i) as soon as they are available, copies of any reports and financial statements furnished to or filed with the Commission or any national securities exchange on which any class of securities of the Guarantor or CL&P Capital are listed; and (ii) such additional information concerning the business and financial condition of Guarantor as the Representatives may from time to time reasonably request; (i) In the case of the Guarantor, to issue the Guarantee concurrently with the issue and sale of the Preferred Securities as contemplated herein; and (j) To use the net proceeds received by it from the sale of the Designated Securities pursuant to this Agreement in the manner specified in the applicable Prospectus as amended or supplemented under the caption "Use of Proceeds". 6. Each of CL&P Capital and the Guarantor jointly and severally covenants and agrees with the several Underwriters that CL&P Capital and the Guarantor will pay or cause to be paid the following: (i) the fees, disbursements and expenses of CL&P Capital's and the Guarantor's counsel and accountants in connection with the registration of the Preferred Securities, the Debt Securities and the Guarantee under the Act and all other expenses in connection with the preparation, printing and filing of the Registration Statement, any Preliminary Prospectus and the Prospectus and amendments and supplements thereto and the mailing and delivering of copies thereof to the Underwriters and dealers; (ii) the cost of printing or producing any Agreement among Underwriters, this Agreement, any Pricing Agreement, the Indenture, the Preferred Securities, the Debt Securities any Blue Sky Memorandum, closing documents (including any compilations thereof) and any other documents in connection with the offering, purchase, sale and delivery of the Preferred Securities; (iii) all expenses in connection with the qualification of the Preferred Securities and the Guarantee for offering and sale under state securities laws as provided in Section 5(b) hereof, including the fees and disbursements of counsel for the Underwriters in connection with such qualification and in connection with the Blue Sky survey(s); (iv) any fees charged by securities rating services for rating the Preferred Securities; (v) any filing fees incident to, and the fees and disbursements of counsel for the Underwriters in connection with, any required reviews by the National Association of Securities Dealers, Inc. of the terms of the sale of the Preferred Securities; (vi) any fees and expenses in connection with listing the Preferred Securities and the Debt Securities; (vii) the cost of preparing certificates for the Preferred Securities; (viii) the cost and charges of any transfer agent or registrar or dividend disbursing agent; (ix) the cost of qualifying the Preferred Securities for delivery in book-entry only form; (x) the fees and expenses of any Trustee and any agent of any Trustee and the fees or disbursements of counsel for any Trustee in connection with the Indenture and the Debt Securities; and (xi) all other costs and expenses incident to the performance of its obligations hereunder which are not otherwise specifically provided for in this Section. It is understood, however, that, except as provided in this -11- Section, and Sections 8 and 11 hereof, the Underwriters will pay all of their own costs and expenses, including the fees of their counsel, transfer taxes on resale of any of the Preferred Securities by them, and any advertising expenses connected with any offers they may make. 7. The obligations of the Underwriters of any Designated Securities under the Pricing Agreement relating to such Designated Securities shall be subject, in the discretion of the Representatives, to the condition that all representations and warranties and other statements of CL&P Capital and the Guarantor in or incorporated by reference in the Pricing Agreement relating to such Designated Securities are, at and as of the Time of Delivery for such Designated Securities, true and correct, the condition that CL&P Capital and the Guarantor shall have performed all of their respective obligations hereunder theretofore to be performed, and the following additional conditions: (a) The Prospectus as amended or supplemented in relation to such Designated Securities shall have been filed with the Commission pursuant to Rule 424(b) within the applicable time period prescribed for such filing by the rules and regulations under the Act and in accordance with Section 5(a) hereof; no stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission; and all requests for additional information on the part of the Commission shall have been complied with to the Representatives' reasonable satisfaction; (b) Winthrop, Stimson, Putnam & Roberts, counsel for the Underwriters shall have furnished to the Representatives such opinion or opinions, dated the Time of Delivery for such Designated Securities, with respect to the matters covered in paragraphs (i), (ii), (iv), (viii), (ix), (x) and (xi) of subsection (c) below as well as such other related matters as the Representatives may reasonably request, and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters; (c) Day, Berry & Howard, counsel for CL&P Capital and the Guarantor, shall have furnished to the Representatives their written opinion or opinions, dated the time of Delivery for such Designated Securities, respectively, in form and substance satisfactory to the Representatives, to the effect that: (i) CL&P Capital has been duly formed and is validly existing as a limited partnership in good standing under the Partnership Act; CL&P Capital has no subsidiaries; CL&P Capital is a special purpose limited partnership as described in the Prospectus as amended or supplemented and has conducted and will conduct no business other than the transactions contemplated by this Agreement and described in the Prospectus as amended or supplemented; CL&P Capital is not a party to or bound by any agreement or instrument other than the Limited Partnership Agreement; CL&P Capital has no liabilities or obligations other than those arising out of the transactions contemplated by this Agreement and described in the Prospectus as amended or supplemented; CL&P Capital is not a party to or subject to any action, suit or proceeding of any nature; the Guarantor has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Connecticut -12- with power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus as amended or supplemented; and the Guarantor has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties, or conducts any business, so as to require such qualification; (ii) The Guarantor has an authorized capitalization as set forth in the Prospectus as amended or supplemented, and all of the issued shares of capital stock of the Guarantor have been duly and validly authorized and issued and are fully paid and non-assessable and are owned directly or indirectly by NU, free and clear of all liens, encumbrances, equities or claims; the Guarantor is the sole general partner of CL&P Capital; the Class A Limited Partner is the sole Class A Limited Partner of CL&P Capital; and the Class A Limited Partner has been duly incorporated and is validly existing in good standing as a corporation under the laws of the State of Connecticut, with power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus as amended or supplemented; and all of the issued general and limited partner interests of CL&P Capital are owned by the Guarantor and the Class A Limited Partner, respectively, and have been duly and validly authorized and validly issued, free and clear of all liens, encumbrances, equities or claims; (iii) To the best of such counsel's knowledge and other than as set forth in the Prospectus as amended or supplemented, there are no legal or governmental proceedings pending to which CL&P Capital, the Guarantor or any of the Guarantor's subsidiaries is a party or of which any property of CL&P Capital, the Guarantor or any of the Guarantor's subsidiaries is the subject which, if determined adversely to CL&P Capital, the Guarantor or any of the Guarantor's subsidiaries, would individually or in the aggregate have a material adverse effect on (x) the current or future consolidated financial position, capital accounts or results of operations of CL&P Capital or (y) the current or future consolidated financial position, stockholders' equity or results of operations of the Guarantor and its subsidiaries; and to the best of such counsel's knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others; (iv) This Agreement and the Pricing Agreement with respect to the Designated Securities have been duly authorized, executed and delivered by CL&P Capital and the Guarantor; (v) The issue and sale of the Designated Preferred Securities being delivered at such Time of Delivery and the compliance by CL&P Capital and the Guarantor with all of the provisions of this Agreement, the Pricing Agreement, the Indenture and the Guarantee with respect to the Designated Preferred Securities and the consummation of the transactions herein and therein contemplated will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument -13- known to such counsel to which CL&P Capital or the Guarantor or any of the Guarantor's subsidiaries is a party or by which CL&P Capital or the Guarantor is bound or to which any of the property or assets of CL&P Capital or the Guarantor or any of the Guarantor's subsidiaries is subject, nor will such action result in any violation of the provisions of the Certificate of Limited Partnership or Limited Partnership Agreement of CL&P Capital or the Certificate of Incorporation or By-laws of the Guarantor or any statute or any order, rule or regulation known to such counsel of any court or governmental agency or body having jurisdiction over CL&P Capital or the Guarantor or any of the Guarantor's subsidiaries or any of their properties; (vi) No consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the issue and sale of the Designated Preferred Securities being delivered at such Time of Delivery or the consummation by CL&P Capital or the Guarantor of the transactions contemplated by this Agreement or such Pricing Agreement, including the issuance and delivery of the Guarantee and the Designated Debt Securities, except such as have been obtained under the Act and the Trust Indenture Act, the approval of the Commission under the Holding Company Act and the approvals of the DPUC, and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Designated Preferred Securities by the Underwriters; (vii) Neither the Guarantor nor any of its subsidiaries is in violation of its Certificate of Incorporation or By-laws; CL&P Capital is not in violation of its Certificate of Limited Partnership or the Limited Partnership Agreement; and neither CL&P Capital, the Guarantor nor any of the Guarantor's subsidiaries is in default in the performance or observance of any material obligation, agreement, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a party or by which it or any of its properties may be bound; (viii) The statements set forth in the Prospectus under the captions "Description of Preferred Securities," "Description of Debt Securities," and "Description of Guarantee", insofar as they purport to constitute a summary of the terms of the Preferred Securities, the Guarantee and the Debt Securities, under the caption "Taxation", and under the caption "Underwriting", insofar as they purport to describe the provisions of the laws and documents referred to therein, are accurate, complete and fair; (ix) The Preferred Securities have been duly and validly authorized and are validly issued and, subject to the qualifications set forth in Section 7(e)(iv) hereof, are fully paid and non- assessable limited partner interests in CL&P Capital; and the Designated Preferred Securities conform to the description thereof contained in the Prospectus as amended or supplemented; -14- (x) The Indenture and the Debt Securities have been duly authorized; the Indenture has been duly qualified under the Trust Indenture Act; the Indenture has been duly executed and delivered and constitutes, and the Debt Securities have been duly executed and authenticated in accordance with the Indenture and delivered under the circumstances provided in the Prospectus as amended or supplemented and constitute, the valid and legally binding obligations of the Guarantor enforceable in accordance with their terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization, moratorium or similar laws of general equity principles; and the Indenture and the Debt Securities conform to the descriptions thereof contained in the Prospectus as amended or supplemented; (xi) The Guarantee has been duly authorized, executed, authenticated, issued and delivered by the Guarantor and constitutes a valid and legally binding obligation of the Guarantor entitled to the benefits provided by the Guarantee Agreement; and the Guarantee conforms to the description thereof contained in the Prospectus as amended or supplemented; (xii) Neither CL&P Capital nor the Guarantor is and, after giving effect to the offering and sale of the Designated Securities, neither will be an "investment company" or an entity "controlled" by an "investment company", as such terms are defined in the Investment Company Act; (xiii) The Guarantor possesses such franchises, certificates, including certificates of public convenience and necessity, authorities, permits and easements issued by the appropriate state, federal or foreign regulatory agencies or bodies necessary to conduct the business now operated by it and/or own, operate and maintain its properties as described in the Prospectus, and, to the knowledge of such counsel, it has not received notice of proceedings relating to the revocation or modification of any such franchise, certificate, authority, permit or easement which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would materially and adversely affect the condition, financial or otherwise, or the earnings, business affairs or business prospects of the Guarantor; (xiv) The documents incorporated by reference in the Prospectus as amended or supplemented (other than the financial statements and related schedules therein, as to which such counsel need express no opinion), when they became effective or were filed with the Commission, as the case may be, complied as to form in all material respects with the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder; and they have no reason to believe that any of such documents, when they became effective or were so filed, as the case may be, contained, in the case of a registration statement which became effective under the Act, an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or, in the case of other documents which were filed under the Act or the Exchange Act with the Commission, an untrue statement of a material fact or omitted to state a material fact necessary in order to -15- make the statements therein, in the light of the circumstances under which they were made when such documents were so filed, not misleading; (xv) The Registration Statement and the Prospectus as amended or supplemented, and any further amendments and supplements thereto made by CL&P Capital or the Guarantor prior to such Time of Delivery (other than the financial statements and related schedules therein, as to which such counsel need express no opinion), comply as to form in all material respects with the requirements of the Act and the rules and regulations thereunder; although they do not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Registration Statement or the Prospectus, except for those referred to in the opinion in subsection (viii) of this Section 7(c), they have no reason to believe that, as of its effective date, the Registration Statement or any further amendment thereto made by CL&P Capital or the Guarantor prior to such Time of Delivery (other than the financial statements and related schedules therein, as to which such counsel need express no opinion) contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that, as of its date, the Prospectus as amended or supplemented or any further amendment or supplement thereto made by CL&P Capital or the Guarantor prior to such Time of Delivery (other than the financial statements and related schedules therein, as to which such counsel need express no opinion) contained an untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading or that, as of such Time of Delivery, either the Registration Statement or the Prospectus as amended or supplemented or any further amendment or supplement thereto made by CL&P Capital or the Guarantor prior to such Time of Delivery (other than the financial statements and related schedules therein, as to which such counsel need express no opinion) contains an untrue statement of a material fact or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and they do not know of any amendment to the Registration Statement required to be filed or any contracts or other documents of a character required to be filed as an exhibit to the Registration Statement or required to be incorporated by reference into the Prospectus as amended or supplemented or required to be described in the Registration Statement or the Prospectus as amended or supplemented which are not filed or incorporated by reference or described as required; and (xvi) The Limited Partnership Agreement has been duly authorized, executed and delivered by the Guarantor and constitutes a valid and legally binding obligation of the Guarantor, in its capacity as general partner of CL&P Capital, enforceable in accordance with its terms, subject to bankruptcy, insolvency, moratorium, fraudulent conveyance, reorganization and other laws of general applicability relating to or affecting creditors' rights and to general equity principles. -16- [In rendering their opinion, such counsel may rely, as to matters of Delaware Law relating to CL&P Capital, the Preferred Securities and the Limited Partnership Agreement, upon the opinion of _________________________, delivered pursuant to subsection (e) hereof;] (d) Day, Berry & Howard, special tax counsel for CL&P Capital and the Guarantor, shall have furnished to you their written opinion, dated the Time of Delivery, in form and substance satisfactory to you, to the effect that such counsel confirms its opinion as set forth under "Taxation" in the Prospectus as amended and supplemented; (e) _________________________, special Delaware counsel for CL&P Capital and the Guarantor, shall have furnished to you their written opinion, dated the Time of Delivery, in form and substance satisfactory to you, to the effect that: (i) CL&P Capital has been duly formed and is validly existing in good standing as a limited partnership under the Partnership Act; (ii) Under the Limited Partnership Agreement and the Partnership Act, CL&P Capital has all necessary partnership power and authority to own its properties and conduct its business, all as described in the Prospectus as amended or supplemented; (iii) The general partner and limited partner interests in CL&P Capital issued to the Guarantor and the Class A Limited Partner, respectively, have been duly and validly authorized and are validly issued; (iv) The Preferred Securities issued to the limited partners of CL&P Capital, who hold the Preferred Securities (the "Preferred Security Holders") have been duly and validly authorized and are validly issued and, subject to the qualifications set forth herein, are fully paid and nonassessable limited partner interests in CL&P Capital, as to which, assuming that the Preferred Security Holders, as limited partners of CL&P Capital, do not participate in the control of the business of CL&P Capital, the Preferred Security Holders, as limited partners of CL&P Capital, will have no liability in excess of their obligations to make payments provided for in the Limited Partnership Agreement and their share of CL&P Capital's assets and undistributed profits (subject to the obligation of a Preferred Security Holder to repay any funds wrongfully distributed to it); (v) There are no provisions in the Limited Partnership Agreement the inclusion of which, subject to the terms and conditions therein, or, assuming that the Preferred Security Holders, as limited partners of CL&P Capital, take no action other than actions permitted by the Limited Partnership Agreement, the exercise of which, in accordance with the terms and conditions therein, would cause the Preferred Security Holders, as limited partners of CL&P Capital, to be deemed to be participating in the control of the business of CL&P Capital; (vi) The Limited Partnership Agreement has been duly authorized, executed and delivered by the Guarantor constitutes a legal, valid and binding agreement of the Guarantor, and is enforceable against the Guarantor, in its capacity as general -17- partner of CL&P Capital, in accordance with its terms subject to bankruptcy, insolvency, moratorium, fraudulent conveyance, receivership, reorganization, liquidation and other similar laws relating to or affecting the rights and remedies of creditors generally and to principles of equity (regardless of whether considered and applied in a proceeding in equity or at law); (vii) Under the Limited Partnership Agreement and the Partnership Act, CL&P Capital has all necessary partnership power and authority to execute and deliver, and to perform its obligations under, this Agreement; (viii) Under the Limited Partnership Agreement and the Partnership Act, the execution and delivery by CL&P Capital of this Agreement, and the performance by CL&P Capital of its obligations hereunder, have been duly authorized by all necessary partnership action on the part of CL&P Capital; (ix) The issuance and sale by CL&P Capital of the Preferred Securities pursuant to this Agreement and the execution, delivery and performance by CL&P Capital of this Agreement will not violate (i) any Delaware statute, rule or regulation, or (ii) the Certificate of Limited Partnership of CL&P Capital or the Limited Partnership Agreement; (x) No consent, approval, authorization, order, registration or qualification of or with any Delaware court or Delaware governmental agency or body is required solely as a result of the issuance and sale by CL&P Capital of the Preferred Securities pursuant to this Agreement, the execution, delivery and performance by CL&P Capital of this Agreement or the consummation of the transactions contemplated in this Agreement; (xi) Such counsel has reviewed the statements in the Prospectus as amended or supplemented under the caption "CL&P Capital" and, insofar as it contains statements of Delaware law, such statements are fairly presented; and (xii) Assuming that CL&P Capital is treated as a partnership for Federal income tax purposes, and assuming that CL&P Capital derives no income from or connected with sources within the State of Delaware and has no assets, activities (other than the maintenance of a registered office and registered agent in the State of Delaware and the filing of documents with the Delaware Secretary of State) or employees in the State of Delaware, the Preferred Security Holders (other than those Preferred Security Holders who reside or are domiciled in the State of Delaware), will have no liability for Delaware income taxes solely as a result of their participation in CL&P Capital, and CL&P Capital will not be liable for any Delaware income tax. (f) On the date of the Pricing Agreement for such Designated Securities at a time prior to the execution of the Pricing Agreement with respect to the Designated Securities and at each Time of Delivery for such Designated Securities, Arthur Andersen LLP, the independent accountants of CL&P Capital and the Guarantor who have certified the financial statements of CL&P Capital and the Guarantor and the Guarantor's subsidiaries included or incorporated by reference in the Registration Statement shall have furnished to the -18- Representatives a letter, dated the effective date of the Registration Statement or the date of the most recent report filed with the Commission containing financial statements and incorporated by reference in the Registration Statement, if the date of such report is later than such effective date, and a letter dated such Time of Delivery, respectively, to the effect set forth in Annex II hereto, and with respect to such letter dated such Time of Delivery, as to such other matters as the Representatives may reasonably request and in form and substance satisfactory to the Representatives; (g) (i) Neither CL&P Capital, the Guarantor nor any of the Guarantor's subsidiaries shall have sustained since the date of the latest audited financial statements included or incorporated by reference in the Prospectus as amended prior to the date of the Pricing Agreement relating to the Designated Securities any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Prospectus as amended prior to the date of the Pricing Agreement relating to the Designated Securities, and (ii) since the respective dates as of which information is given in the Prospectus as amended prior to the date of the Pricing Agreement relating to the Designated Securities there shall not have been any change in the capital accounts or long-term debt of CL&P Capital or capital stock or long-term debt of the Guarantor or any of its subsidiaries or any change, or any development involving a prospective change, in or affecting (x) the general affairs, management, financial position, capital accounts or results of operations of CL&P Capital or (y) the general affairs, management, financial position, stockholders' equity or results of operations of the Guarantor and its subsidiaries, otherwise than as set forth or contemplated in the Prospectus as amended prior to the date of the Pricing Agreement relating to the Designated Preferred Securities, the effect of which, in any such case described in Clause (i) or (ii), is in the judgment of the Representatives so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Designated Preferred Securities on the terms and in the manner contemplated in the Prospectus as amended relating to the Designated Preferred Securities; (h) On or after the date of the Pricing Agreement relating to the Designated Preferred Securities (i) no downgrading shall have occurred in the rating accorded any Preferred Securities or any of the Guarantor's debt securities or preferred stock by any "nationally recognized statistical rating organization", as that term is defined by the Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no such organization shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of any Preferred Securities or any of the Guarantor's debt securities or preferred stock; (i) On or after the date of the Pricing Agreement relating to the Designated Shares there shall not have occurred any of the following: (i) a suspension or material limitation in trading in securities generally on the New York Stock Exchange; (ii) a suspension or material limitation in trading in CL&P Capital's or the Guarantor's securities on the New York Stock Exchange; (iii) a general moratorium on commercial banking activities declared by either Federal or New York State authorities; or (iv) the outbreak or escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war, if the effect of any such event specified in this Clause (iv) in the judgment of the Representatives makes it impracticable or inadvisable to proceed with -19- the public offering or the delivery of the Designated Securities on the terms and in the manner contemplated in the Prospectus as first amended or supplemented relating to the Designated Securities; (j) The Preferred Securities at the Time of Delivery shall have been duly listed, subject to notice of issuance, on the New York Stock Exchange; (k) CL&P Capital and the Guarantor shall have furnished or caused to be furnished to the Representatives at the Time of Delivery for the Designated Securities certificates of officers of CL&P Capital and the Guarantor, respectively, satisfactory to the Representatives as to the accuracy of the respective representations and warranties of CL&P Capital and the Guarantor herein at and as of such Time of Delivery, as to the performance by CL&P Capital and the Guarantor of all of its respective obligations hereunder to be performed at or prior to such Time of Delivery, as to the matters set forth in subsections (a) and (e) of this Section and as to such other matters as the Representatives may reasonably request; (l) The Limited Partnership Agreement, the Guarantee and the Indenture shall have been executed and delivered, in each case in a form reasonably satisfactory to the Representatives; and [(m) A Special Event (as defined in the Prospectus as amended or supplemented) shall not have occurred and be continuing.] 8. (a) CL&P Capital and the Guarantor, jointly and severally, will indemnify and hold harmless each Underwriter against any losses, claims, damages or liabilities, joint or several, to which such Underwriter may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented and any other prospectus relating to the Shares, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse each Underwriter for any legal or other expenses reasonably incurred by such Underwriter in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that neither CL&P Capital nor the Guarantor shall be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented and any other prospectus relating to the Preferred Securities, or any such amendment or supplement in reliance upon and in conformity with written information furnished to CL&P Capital by any Underwriter of Designated Securities through the Representatives expressly for use in the Prospectus as amended or supplemented relating to such Preferred Securities. (b) Each Underwriter will indemnify and hold harmless CL&P Capital and the Guarantor against any losses, claims, damages or liabilities to which CL&P Capital may become subject, under the Act or otherwise, insofar as such losses, claims, damages or -20- liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented and any other prospectus relating to the Preferred Securities, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented and any other prospectus relating to the Preferred Securities, or any such amendment or supplement in reliance upon and in conformity with written information furnished to CL&P Capital and the Guarantor by such Underwriter through the Representatives expressly for use therein; and will reimburse CL&P Capital and the Guarantor for any legal or other expenses reasonably incurred by CL&P Capital in connection with investigating or defending any such action or claim as such expenses are incurred. (c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against an indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; but the omission so to notify such indemnifying party shall not relieve it from any liability which it may have to any indemnified party otherwise than under such subsection. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include any statement as to, or an admission of, fault, culpability or a failure to act, by or on behalf of any indemnified party. (d) If the indemnification provided for in this Section 8 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by CL&P Capital and the Guarantor on the one hand and the Underwriters of the -21- Designated Securities on the other from the offering of the Designated Securities to which such loss, claim, damage or liability (or action in respect thereof) relates. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required under subsection (c) above, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of CL&P Capital and the Guarantor on the one hand and the Underwriters of the Designated Securities on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by CL&P Capital and the Guarantor on the one hand and such Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from such offering (before deducting expenses) received by CL&P Capital and the Guarantor bear to the total underwriting discounts and commissions received by such Underwriters. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by CL&P Capital and the Guarantor on the one hand or such Underwriters on the other and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. CL&P Capital, the Guarantor and the Underwriters agree that it would not be just and equitable if contributions pursuant to this subsection (d) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the applicable Designated Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The obligations of the Underwriters of Designated Securities in this subsection (d) to contribute are several in proportion to their respective underwriting obligations with respect to such Designated Securities and not joint. (e) The obligations of CL&P Capital under this Section 8 shall be in addition to any liability which CL&P Capital and the Guarantor may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Underwriter within the meaning of the Act; and the obligations of the Underwriters under this Section 8 shall be in addition to any liability which the respective Underwriters may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of CL&P Capital and the Guarantor and to each person, if any, who controls CL&P Capital and the Guarantor within the meaning of the Act. 9. (a) If any Underwriter shall default in its obligation to purchase the Designated Securities which it has agreed to purchase under the Pricing Agreement relating -22- to such Designated Securities, the Representatives may in their discretion arrange for themselves or another party or other parties to purchase such Designated Securities on the terms contained herein. If within thirty-six hours after such default by any Underwriter the Representatives do not arrange for the purchase of such Designated Securities, as the case may be, then CL&P Capital shall be entitled to a further period of thirty-six hours within which to procure another party or other parties satisfactory to the Representatives to purchase such Designated Securities on such terms. In the event that, within the respective prescribed period, the Representatives notify CL&P Capital that they have so arranged for the purchase of such Designated Securities, or CL&P Capital notifies the Representatives that it has so arranged for the purchase of such Designated Securities, the Representatives or CL&P Capital shall have the right to postpone a Time of Delivery for such Designated Securities for a period of not more than seven days, in order to effect whatever changes may thereby be made necessary in the Registration Statement or the Prospectus as amended or supplemented, or in any other documents or arrangements, and CL&P Capital agrees to file promptly any amendments or supplements to the Registration Statement or the Prospectus which in the opinion of the Representatives may thereby be made necessary. The term "Underwriter" as used in this Agreement shall include any person substituted under this Section with like effect as if such person had originally been a party to the Pricing Agreement with respect to such Designated Securities. (b) If, after giving effect to any arrangements for the purchase of the Designated Securities, as the case may be, of a defaulting Underwriter or Underwriters by the Representatives and CL&P Capital as provided in subsection (a) above, the aggregate amount of such Designated Securities which remains unpurchased does not exceed one-eleventh of the aggregate amount of the Designated Securities to be purchased at the Time of Delivery, then CL&P Capital shall have the right to require each non-defaulting Underwriter to purchase the amount of Designated Securities which such Underwriter agreed to purchase under the Pricing Agreement relating to such Designated Securities and, in addition, to require each non-defaulting Underwriter to purchase its pro rata share (based on the amount of Designated Securities which such Underwriter agreed to purchase under such Pricing Agreement) of the Designated Securities, of such defaulting Underwriter or Underwriters for which such arrangements have not been made; but nothing herein shall relieve a defaulting Underwriter from liability for its default. (c) If, after giving effect to any arrangements for the purchase of the Designated Securities of a defaulting Underwriter or Underwriters by the Representatives and CL&P Capital as provided in subsection (a) above, the aggregate amount of Designated Securities which remains unpurchased exceeds one- eleventh of the aggregate amount of Designated Securities to be purchased at the Time of Delivery, as referred to in subsection (b) above, or if CL&P Capital shall not exercise the right described in subsection (b) above to require non- defaulting Underwriters to purchase the Designated Securities of a defaulting Underwriter or Underwriters, then the Pricing Agreement relating to such Designated Securities shall thereupon terminate, without liability on the part of any non-defaulting Underwriter or CL&P Capital or the Guarantor, except for the expenses to be borne by CL&P Capital and the Guarantor and the Underwriters as provided in Section 6 hereof and the indemnity and contribution agreements in Section 8 hereof; but nothing herein shall relieve a defaulting Underwriter from liability for its default. -23- 10. The respective indemnities, agreements, representations, warranties and other statements of CL&P Capital or the Guarantor and the several Underwriters, as set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of any Underwriter or any controlling person of any Underwriter, or CL&P Capital or the Guarantor, or any officer or director or controlling person of CL&P Capital or the Guarantor, and shall survive delivery of and payment for any Designated Securities. 11. If any Pricing Agreement shall be terminated pursuant to Section 9 hereof, neither CL&P Capital nor the Guarantor shall then be under any liability to any Underwriter with respect to the Designated Securities with respect to which such Pricing Agreement shall have been terminated except as provided in Sections 6 and 8 hereof; but, if for any other reason, Designated Securities are not delivered by or on behalf of CL&P Capital or the Guarantor as provided herein, CL&P Capital will reimburse the Underwriters through the Representatives for all out-of-pocket expenses approved in writing by the Representatives, including fees and disbursements of counsel, reasonably incurred by the Underwriters in making preparations for the purchase, sale and delivery of such Designated Securities, but CL&P Capital or the Guarantor shall then be under no further liability to any Underwriter with respect to such Designated Securities except as provided in Sections 6 and 8 hereof. 12. In all dealings hereunder, the Representatives of the Underwriters of Designated Securities shall act on behalf of each of such Underwriters, and the parties hereto shall be entitled to act and rely upon any statement, request, notice or agreement on behalf of any Underwriter made or given by such Representatives jointly or by such of the Representatives, if any, as may be designated for such purpose in the Pricing Agreement. All statements, requests, notices and agreements hereunder shall be in writing, and if to the Underwriters shall be delivered or sent by mail, telex or facsimile transmission to the address of the Representatives as set forth in the Pricing Agreement; and if to CL&P Capital or the Guarantor shall be delivered or sent by mail, telex or facsimile transmission to the address of CL&P Capital or the Guarantor, respectively set forth in the Registration Statement, Attention: Secretary; provided, however, that any notice to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by mail, telex or facsimile transmission to such Underwriter at its address set forth in its Underwriters' Questionnaire, or telex constituting such Questionnaire, which address will be supplied to CL&P Capital and the Guarantor by the Representatives upon request. Any such statements, requests, notices or agreements shall take effect upon receipt thereof. 13. This Agreement and each Pricing Agreement shall be binding upon, and inure solely to the benefit of, the Underwriters, CL&P Capital, the Guarantor and, to the extent provided in Sections 8 and 10 hereof, the officers and directors of CL&P Capital, the Guarantor and each person who controls CL&P Capital or the Guarantor or any Underwriter, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement or any such Pricing Agreement. No purchaser of any of the Preferred Securities from any Underwriter shall be deemed a successor or assign by reason merely of such purchase. -24- 14. Time shall be of the essence of each Pricing Agreement. As used herein, the term "business day" shall mean any day when the Commission's office in Washington, D.C. is open for business. 15. THIS AGREEMENT AND EACH PRICING AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. 16. This Agreement and each Pricing Agreement may be executed by any one or more of the parties hereto and thereto in any number of counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument. -25- If the foregoing is in accordance with your understanding, please sign and return to us one for CL&P Capital and one for each of the Representatives plus one for each counsel counterparts hereof. Very truly yours, CL&P CAPITAL, L. P. By: The Connecticut Light and Power Company its General Partner By:________________________________________ Name: Title: THE CONNECTICUT LIGHT AND POWER COMPANY By:________________________________________ Name: Title: Accepted as of the date hereof: Goldman, Sachs & Co. [Name(s) of Co-Representative(s)] By:__________________________________ (Goldman, Sachs & Co.) On behalf of each of the Underwriters ANNEX I PRICING AGREEMENT ----------------- Goldman, Sachs & Co., [NAME(S) OF CO-REPRESENTATIVE(S),(3)] As Representatives of the several Underwriters named in Schedule I hereto, [C/O GOLDMAN, SACHS & CO.,(3)] 85 Broad Street, New York, New York 10004. ___________, 19__ Ladies and Gentlemen: CL&P Capital, L.P., a Delaware limited partnership ("CL&P Capital"), as issuer, and The Connecticut Light and Power Company, a Connecticut corporation, as guarantor (the "Guarantor"), each proposes, subject to the terms and conditions stated herein and in the Underwriting Agreement, dated __________, 1994 (the "Underwriting Agreement"), between CL&P Capital and the Guarantor on the one hand and Goldman, Sachs & Co. [and (names of Co-Representatives named therein)] on the other hand], to issue and sell to the Underwriters named in Schedule I hereto (the "Underwriters") the Preferred Securities specified in Schedule II hereto (the "Designated Preferred Securities"). The Designated Preferred Securities will be guaranteed by the Guarantor to the extent set forth in this Agreement with respect to such Designated Preferred Securities (the "Guarantee"). Each of the provisions of the Underwriting Agreement is incorporated herein by reference in its entirety, and shall be deemed to be a part of this Agreement to the same extent as if such provisions had been set forth in full herein; and each of the representations and warranties set forth therein shall be deemed to have been made at and as of the date of this Pricing Agreement, except that each representation and warranty which refers to the Prospectus in Section 2 of the Underwriting Agreement shall be deemed to be a representation or warranty as of the date of the Underwriting Agreement in relation to the Prospectus (as therein defined), and also a representation and warranty as of the date of this Pricing Agreement in relation to the Prospectus as amended or supplemented relating to the Designated Preferred Securities which are the subject of this Pricing Agreement. Each reference to the Representatives herein and in the provisions of the Underwriting Agreement so incorporated by reference shall be deemed to refer to you. Unless otherwise defined herein, terms defined in the Underwriting Agreement are used herein as therein defined. The Representatives designated to act on behalf of the Representatives and on behalf of each of the Underwriters of the Designated Preferred Securities pursuant to Section 12 of the Underwriting Agreement and the address of the Representatives referred to in such Section 12 are set forth in Schedule II hereto. An amendment to the Registration Statement, or a supplement to the Prospectus, as the case may be, relating to the Designated Preferred Securities, in the form heretofore delivered to you is now proposed to be filed with the Commission. Subject to the terms and conditions set forth herein and in the Underwriting Agreement incorporated herein by reference, CL&P Capital agrees to issue and sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from CL&P Capital, at the time and place and at the purchase price to the -2- Underwriters set forth in Schedule II hereto, the amount of Preferred Securities set forth opposite the name of such Underwriter in Schedule I hereto. -3- If the foregoing is in accordance with your understanding, please sign and return to us one each for CL&P Capital and the Guarantor and one for each of the Representatives plus one for each counsel counterparts hereof, and upon acceptance hereof by you, on behalf of each of the Underwriters, this letter and such acceptance hereof, including the provisions of the Underwriting Agreement incorporated herein by reference, shall constitute a binding agreement between each of the Underwriters and CL&P Capital and the Guarantor. It is understood that your acceptance of this letter on behalf of each of the Underwriters is or will be pursuant to the authority set forth in a form of Agreement among Underwriters, the form of which shall be submitted to CL&P Capital for examination and the Guarantor, upon request, but without warranty on the part of the Representatives as to the authority of the signers thereof. Very truly yours, CL&P CAPITAL, L. P. By: The Connecticut Light and Power Company its General Partner By:________________________________________ Name: Title: THE CONNECTICUT LIGHT AND POWER COMPANY By:________________________________________ Name: Title: Accepted as of the date hereof: Goldman, Sachs & Co. [Name(s) of Co-Representative(s)] By:__________________________________ (Goldman, Sachs & Co.) On behalf of each of the Underwriters -4- SCHEDULE I
Amount of Preferred Securities to be Underwriters Purchased ------------ --------- Goldman, Sachs & Co................... [NAME(S) OF CO-REPRESENTATIVE(S)(3)].. [NAMES OF OTHER UNDERWRITERS]......... ______________ Total................................. ==============
SCHEDULE II TITLE OF DESIGNATED PREFERRED SECURITIES: ___% Cumulative Monthly Income Securities, Series __ Number of Preferred Securities: INITIAL OFFERING PRICE TO PUBLIC: $........ per security PURCHASE PRICE BY UNDERWRITERS: $........ per security COMMISSION PAYABLE TO UNDERWRITERS: $........ per security in [specify same form of funds as in Specified Funds below] FORM OF DESIGNATED PREFERRED SECURITIES: Book-entry only form represented by one or more global securities deposited with The Depository Trust Company ("DTC") or its designated custodian, to be made available for checking by the Representatives at least twenty-four hours prior to the Time of Delivery at the office of DTC. SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE: [DESCRIBE ANY BLACKOUT PROVISIONS WITH RESPECT TO THE DESIGNATED PREFERRED SECURITIES] TIME OF DELIVERY: ........ a.m. (New York City time), ................., 19.. CLOSING LOCATION: Offices of Winthrop Stimson Putnam & Roberts, One Battery Park Plaza, New York NY 10004 NAMES AND ADDRESSES OF REPRESENTATIVES: Designated Representatives: Goldman, Sachs & Co. [List other Representative(s)] Address for Notices, etc.: c/o Goldman, Sachs & Co., 85 Broad Street, New York, NY 10004, Attention: Registration Department OTHER TERMS: ANNEX II Pursuant to Section 7(f) of the Underwriting Agreement, the accountants shall furnish letters to the Underwriters to the effect that: (i) They are independent certified public accountants with respect to the Guarantor and its subsidiaries within the meaning of the Act and the applicable published rules and regulations thereunder; (ii) In their opinion, the financial statements and any supplementary financial information and schedules (and, if applicable, financial forecasts and/or pro forma financial information) examined by them and included or incorporated by reference in the Registration Statement or the Prospectus comply as to form in all material respects with the applicable accounting requirements of the Act or the Exchange Act, as applicable, and the related published rules and regulations thereunder; and, if applicable, they have made a review in accordance with standards established by the American Institute of Certified Public Accountants of the consolidated interim financial statements, selected financial data, pro forma financial information, financial forecasts and/or condensed financial statements derived from audited financial statements of the Guarantor for the periods specified in such letter, as indicated in their reports thereon, copies of which have been furnished to the representatives of the Underwriters (the "Representatives") and are attached hereto; (iii) They have made a review in accordance with standards established by the American Institute of Certified Public Accountants of the unaudited condensed consolidated statements of income, consolidated balance sheets and consolidated statements of cash flows included in the Prospectus and/or included in the Guarantor's quarterly reports on Form 10-Q incorporated by reference into the Prospectus as indicated in their reports thereon copies of which are attached hereto; and on the basis of specified procedures including inquiries of officials of the Guarantor who have responsibility for financial and accounting matters regarding whether the unaudited condensed consolidated financial statements referred to in paragraph (vi)(A)(i) below comply as to form in all material respects with the applicable accounting requirements of the Act and the Exchange Act and the related published rules and regulations, nothing came to their attention that caused them to believe that the unaudited condensed consolidated financial statements do not comply as to form in all material respects with the applicable accounting requirements of the Act and the Exchange Act and the related published rules and regulations; (iv) The unaudited selected financial information with respect to the consolidated results of operations and financial position of the Guarantor for the five most recent fiscal years included in the Prospectus and included or incorporated by reference in Item 6 of the Guarantor's Annual Report on Form 10-K for the most recent fiscal year agrees with the corresponding amounts (after restatement where applicable) in the audited consolidated financial statements for such five fiscal years which were included or incorporated by reference in the Guarantor's Annual Reports on Form 10-K for such fiscal years; (v) They have compared the information in the Prospectus under selected captions with the disclosure requirements of Regulation S-K and on the basis of limited procedures specified in such letter nothing came to their attention as a result of the foregoing procedures that caused them to believe that this information does not -2- conform in all material respects with the disclosure requirements of items 301, 302, 402 and 503(d), respectively, of Regulation S-K; (vi) On the basis of limited procedures, not constituting an examination in accordance with generally accepted auditing standards, consisting of a reading of the unaudited financial statements and other information referred to below, a reading of the latest available interim financial statements of the Guarantor and its subsidiaries, inspection of the minute books of the Guarantor and its subsidiaries since the date of the latest audited financial statements included or incorporated by reference in the Prospectus, inquiries of officials of the Guarantor and its subsidiaries responsible for financial and accounting matters and such other inquiries and procedures as may be specified in such letter, nothing came to their attention that caused them to believe that: (A) (i) the unaudited condensed consolidated statements of income, consolidated balance sheets and consolidated statements of cash flows included in the Prospectus and/or included or incorporated by reference in the Guarantor's Quarterly Reports on Form 10-Q incorporated by reference in the Prospectus do not comply as to form in all material respects with the applicable accounting requirements of the Exchange Act and the related published rules and regulations, or (ii) any material modifications should be made to the unaudited condensed consolidated statements of income, consolidated balance sheets and consolidated statements of cash flows included in the Prospectus or included in the Guarantor's Quarterly Reports on Form 10-Q incorporated by reference in the Prospectus, for them to be in conformity with generally accepted accounting principles; (B) any other unaudited income statement data and balance sheet items included in the Prospectus do not agree with the corresponding items in the unaudited consolidated financial statements from which such data and items were derived, and any such unaudited data and items were not determined on a basis substantially consistent with the basis for the corresponding amounts in the audited consolidated financial statements included or incorporated by reference in the Guarantor's Annual Report on Form 10-K for the most recent fiscal year; (C) the unaudited financial statements which were not included in the Prospectus but from which were derived the unaudited condensed financial statements referred to in clause (A) and any unaudited income statement data and balance sheet items included in the Prospectus and referred to in clause (B) were not determined on a basis substantially consistent with the basis for the audited financial statements included or incorporated by reference in the Guarantor's Annual Report on Form 10-K for the most recent fiscal year; (D) any unaudited pro forma consolidated condensed financial statements included or incorporated by reference in the Prospectus do not comply as to form in all material respects with the applicable accounting requirements of the Act and the published rules and regulations thereunder or -3- the pro forma adjustments have not been properly applied to the historical amounts in the compilation of those statements; (E) as of a specified date not more than five days prior to the date of such letter, there have been any changes in the consolidated capital stock (other than issuances of capital stock upon exercise of options and stock appreciation rights, upon earn-outs of performance shares and upon conversions of convertible securities, in each case which were outstanding on the date of the latest balance sheet included or incorporated by reference in the Prospectus) or any increase in the consolidated long-term debt of the Guarantor and its subsidiaries, or any decreases in consolidated net current assets or stockholders' equity or other items specified by the Representatives, or any increases in any items specified by the Representatives, in each case as compared with amounts shown in the latest balance sheet included or incorporated by reference in the Prospectus, except in each case for changes, increases or decreases which the Prospectus discloses have occurred or may occur or which are described in such letter; and (F) for the period from the date of the latest financial statements included or incorporated by reference in the Prospectus to the specified date referred to in Clause (E) there were any decreases in consolidated net revenues or operating profit or the total or per share amounts of consolidated net income or other items specified by the Representatives, or any increases in any items specified by the Representatives, in each case as compared with the comparable period of the preceding year and with any other period of corresponding length specified by the Representatives, except in each case for increases or decreases which the Prospectus discloses have occurred or may occur or which are described in such letter; and (vii) In addition to the examination referred to in their report(s) included or incorporated by reference in the Prospectus and the limited procedures, inspection of minute books, inquiries and other procedures referred to in paragraphs (iii) and (vi) above, they have carried out certain specified procedures, not constituting an examination in accordance with generally accepted auditing standards, with respect to certain amounts, percentages and financial information specified by the Representatives which are derived from the general accounting records of the Guarantor and its subsidiaries, which appear in the Prospectus (excluding documents incorporated by reference), or in Part II of, or in exhibits and schedules to, the Registration Statement specified by the Representatives or in documents incorporated by reference in the Prospectus specified by the Representatives, and have compared certain of such amounts, percentages and financial information with the accounting records of the Guarantor and its subsidiaries and have found them to be in agreement. All references in this Annex II to the Prospectus shall be deemed to refer to the Prospectus (including the documents incorporated by reference therein) as defined in the Underwriting Agreement as of the date of the letter delivered on the date of the Pricing Agreement for purposes of such letter and to the Prospectus as amended or supplemented (including the documents incorporated by reference therein) in relation to the applicable -4- Designated Preferred Securities for purposes of the letter delivered at the Time of Delivery for such Designated Preferred Securities. EX-4.A 3 INDENTURE/CL&P CAPITAL AND BANKERS TRUST ----------------------------------------------------------------- ----------------------------------------------------------------- INDENTURE Dated as of _________, 199__ By and Between THE CONNECTICUT LIGHT AND POWER COMPANY and BANKERS TRUST COMPANY, as Trustee Providing for the Issuance of Junior Subordinated Deferrable Interest Debentures in Series and for ___% Junior Subordinated Deferrable Interest Debentures, Series A ----------------------------------------------------------------- ----------------------------------------------------------------- TABLE OF CONTENTS -----------------
Page ---- ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE................ 1 Section 1.01 Definitions............................................. 1 Section 1.02 Incorporation By Reference Of Trust Indenture Act....... 6 Section 1.03 Rules Of Construction................................... 6 Section 1.04 Acts Of Holders......................................... 7 ARTICLE 2 THE DEBENTURES; THE SERIES A DEBENTURES................. 8 Section 2.01 Issue Of Debentures Generally........................... 8 Section 2.02 Form Of The Series A Debentures; Denominations.......... 9 Section 2.03 Payment Of Principal And Interest....................... 9 Section 2.04 Execution And Authentication............................ 10 Section 2.05 Registrar And Paying Agent.............................. 10 Section 2.06 Paying Agent To Hold Money In Trust..................... 11 Section 2.07 Debentureholder Lists................................... 11 Section 2.08 Transfer And Exchange................................... 11 Section 2.09 Replacement Debentures.................................. 12 Section 2.10 Outstanding Debentures; Determinations Of Holders' Action 13 Section 2.11 Temporary Debentures.................................... 13 Section 2.12 Cancellation............................................ 14 Section 2.13 Defaulted Interest...................................... 14 ARTICLE 3 REDEMPTION................................ 14 Section 3.01 Redemption; Notice To Trustee........................... 14 Section 3.02 Selection Of Debentures To Be Redeemed.................. 15 Section 3.03 Notice Of Redemption.................................... 15 Section 3.04 Effect Of Notice Of Redemption.......................... 16 Section 3.05 Deposit Of Redemption Price............................. 16 Section 3.06 Debentures Redeemed In Part............................. 16 ARTICLE 4 COVENANTS................................ 16 Section 4.01 Payment Of Debentures................................... 16 Section 4.02 Prohibition Against Dividends, Etc. During An Event Of Default Or An Extension Period.......................... 17 Section 4.03 SEC Reports............................................. 17 Section 4.04 Compliance Certificates................................. 18 Section 4.05 Relationship With CL&P Capital.......................... 18 Section 4.06 Further Instruments And Acts............................ 18 Section 4.07 Payments For Consents................................... 18 ARTICLE 5 SUCCESSOR CORPORATION.......................... 19 Section 5.01 When The Company May Merge, Etc......................... 19
-2- ARTICLE 6 DEFAULTS AND REMEDIES.......................... 19 Section 6.01 Events Of Default....................................... 19 Section 6.02 Acceleration............................................ 21 Section 6.03 Other Remedies.......................................... 21 Section 6.04 Waiver Of Past Defaults................................. 21 Section 6.05 Control By Majority Or The Special Representatives...... 22 Section 6.06 Limitation On Suits..................................... 22 Section 6.07 Rights Of Holders To Receive Payment.................... 23 Section 6.08 Collection Suit By The Trustee.......................... 23 Section 6.09 The Trustee May File Proofs Of Claim.................... 23 Section 6.10 Priorities.............................................. 24 Section 6.11 Undertaking For Costs................................... 24 Section 6.12 Waiver Of Stay, Extension, Or Usury Laws................ 24 ARTICLE 7 THE TRUSTEE............................... 25 Section 7.01 Duties Of The Trustee................................... 25 Section 7.02 Rights Of The Trustee................................... 26 Section 7.03 Individual Rights Of The Trustee........................ 26 Section 7.04 The Trustee's Disclaimer................................ 26 Section 7.05 Notice Of Defaults...................................... 27 Section 7.06 Reports By Trustee To Holders........................... 27 Section 7.07 Compensation And Indemnity.............................. 27 Section 7.08 Replacement Of Trustee.................................. 28 Section 7.09 Successor Trustee By Merger............................. 29 Section 7.10 Eligibility; Disqualification........................... 29 Section 7.11 Preferential Collection Of Claims Against The Company... 29 ARTICLE 8 SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE OF CERTAIN OBLIGATIONS; UNCLAIMED MONIES........... 29 Section 8.01 Satisfaction And Discharge Of Indenture................. 29 Section 8.02 Application By Trustee Of Funds Deposited For Payment Of Debentures.............................................. 30 Section 8.03 Repayment Of Monies Held By Paying Agent................ 30 Section 8.04 Return Of Monies Held By The Trustee And Paying Agent Unclaimed For Three Years............................... 30 ARTICLE 9 AMENDMENTS................................ 31 Section 9.01 Without Consent Of Holders.............................. 31 Section 9.02 With Consent Of Holders................................. 31 Section 9.03 Compliance With Trust Indenture Act..................... 32 Section 9.04 Revocation And Effect Of Consents, Waivers And Actions.. 32 Section 9.05 Notation On Or Exchange Of Debentures................... 33 Section 9.06 Trustee To Sign Supplemental Indentures................. 33 Section 9.07 Effect Of Supplemental Indentures....................... 33
-3- ARTICLE 10 SUBORDINATION.............................. 33 Section 10.01 Debentures Subordinated To Senior Indebtedness.......... 33 Section 10.02 Priority And Payment Of Proceeds In Certain Events; Remedies Standstill..................................... 34 Section 10.03 Payments Which May Be Made Prior To Notice.............. 35 Section 10.04 Rights Of Holders Of Senior Indebtedness Not To Be Impaired................................................ 35 Section 10.05 Trustee May Take Action To Effectuate Subordination..... 35 Section 10.06 Subrogation............................................. 36 Section 10.07 Obligations Of Company Unconditional; Reinstatement..... 36 Section 10.08 Trustee Entitled To Assume Payments Not Prohibited In Absence Of Notice....................................... 37 Section 10.09 Right Of Trustee To Hold Senior Indebtedness............ 37 ARTICLE 11 MISCELLANEOUS.............................. 37 Section 11.01 Trust Indenture Act Controls............................ 37 Section 11.02 Notices................................................. 38 Section 11.03 Communication By Holders With Other Holders............. 38 Section 11.04 Certificate And Opinion As To Conditions Precedent...... 39 Section 11.05 Statements Required In Certificate Or Opinion........... 39 Section 11.06 Severability Clause..................................... 39 Section 11.07 Rules By Trustee, Paying Agent And Registrar............ 39 Section 11.08 Legal Holidays.......................................... 40 Section 11.09 Governing Law........................................... 40 Section 11.10 No Recourse Against Others.............................. 40 Section 11.11 Successors.............................................. 40 Section 11.12 Multiple Original Copies Of This Indenture.............. 40 Section 11.13 No Adverse Interpretation Of Other Agreements........... 40 Section 11.14 Table Of Contents; Headings, Etc........................ 40 Section 11.15 Benefits Of The Indenture............................... 41 SIGNATURES.................................................................. 42 EXHIBIT A--FORM OF DEBENTURE
TRUST INDENTURE PROVISION OF ACT SECTION INDENTURE - -------------- ------------ Section 310 (a)(1) 7.10 (a)(2) 7.10 (a)(3) Not Applicable (a)(4) Not Applicable (a)(5) Not Applicable (b) 7.08; 7.10; 11.01 (c) Not Applicable Section 311 (a) 7.11 (b) 7.11 (c) Not Applicable Section 312 (a) 2.07 (b) 11.03 (c) 11.03 Section 313 (a) 7.06 (b)(1) Not Applicable (b)(2) 7.06 (c) 7.06; 11.02 (d) 7.06 Section 314 (a) 4.03;4.04; 11.02 (b) Not Applicable (c)(1) 2.02; 11.04 (c)(2) 2.02; 11.04 (c)(3) Not Applicable (d) Not Applicable (e) 11.05 (f) Not Applicable Section 315 (a) 7.01(2) (b) 7.05; 11.02 (c) 7.01(1) (d) 7.01(3) (e) 6.11 Section 316 (a)(1)(A) 6.05 (a)(1)(B) 6.04 (a)(2) Not Applicable (a)(last sentence) 2.10 (b) 6.07 (c) 1.04 Section 317 (a)(1) 6.08 (a)(2) 6.09 (b) 2.06 Section 318 (a) 11.01
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be part of the Indenture. INDENTURE --------- INDENTURE, dated as of , 199 by and between The ------------- ---- -- Connecticut Light and Power Company, a Connecticut corporation (together with its permitted successors and assigns, the "Company"), and Bankers Trust Company, ------- a New York corporation, as trustee (the "Trustee"). ------- WHEREAS, the Company is the general partner of CL&P Capital, L.P., a Delaware limited partnership, which intends to issue in series from time to time its limited partner interests and to loan the proceeds thereof, together with the investment by the Company in CL&P Capital, L.P., to the Company. WHEREAS, in order to evidence its intention to make such loans and to accept the Debentures (as hereinafter defined) as evidence of such loans, and its approval of the terms of the Series A Debentures (as hereinafter defined), CL&P Capital, L.P. has joined in this Indenture. WHEREAS, the Company has authorized the issuance of the Series A Debentures to evidence its obligations with respect to a loan from CL&P Capital, L.P. of the proceeds of a series of its preferred limited partner interests designated __% Cumulative Monthly Income Preferred Securities, Series A, and the related investment by the Company in CL&P Capital, L.P., and to provide therefor, the Company has duly authorized the execution and delivery of this Indenture, all things necessary to make the Series A Debentures, when duly issued and executed by the Company and authenticated and delivered hereunder, the valid obligations of the Company, and to make this Indenture a valid and binding agreement of the Company, in accordance with its terms, having been done. NOW THEREFORE: The Company and the Trustee, intending to be legally bound hereby, each agrees as follows for the benefit of the other party and for the equal and ratable benefit of the Holders of the securities issued hereunder, including the Series A Debentures: ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE Section 1.01 Definitions. ----------- For purposes of this Indenture, each of the following terms shall have the meaning set forth below: "Act" has the meaning specified in Section 1.04 hereof. --- "Additional Interest" means, with respect to the Series A Debentures, any ------------------- amounts which CL&P Capital would be required to pay as taxes, duties, assessments, or governmental charges of whatever nature (other than withholding taxes) imposed by the United States, or any other taxing authority, with respect to the Series A Debentures. With respect to any other series of Debentures, "Additional Interest" shall have the meaning set forth in the supplemental indenture creating such series. -2- "Affiliate" of any specified Person means any other Person, directly or --------- indirectly, controlling or controlled by or under direct or indirect common control with such specified Person. When used with respect to any Person, "control" means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Bankruptcy Law" means Title 11, United States Code, or any similar Federal -------------- or state law for the relief of debtors. "Board of Directors" means the Board of Directors of the Company or any ------------------ committee thereof duly authorized to act on behalf of such Board. "Business Day" means any day that is not a Saturday, a Sunday, or a day on ------------ which banking institutions in The City of New York, the State of Connecticut, or the State of Delaware are authorized or required to close. "Capital Lease Obligations" of a Person means any obligation which is ------------------------- required to be classified and accounted for as a capital lease on the face of a balance sheet of such Person prepared in accordance with GAAP. "Capital Stock" means any and all shares, interests, rights to purchase, ------------- warrants, options, participations, or other equivalents of or interests in (however designated) corporate stock, including any preferred stock. "CL&P Capital" means CL&P Capital, L.P., a Delaware limited partnership. ------------ "Company" means The Connecticut Light and Power Company, a Connecticut ------- corporation, together with its permitted successors and assigns. "Custodian" means any receiver, trustee, assignee, liquidator, --------- sequestrator, custodian, or similar official under any Bankruptcy Law. "Debentureholder" or "Holder" means a Person in whose name a Debenture is --------------- ------ registered on the Registrar's books. "Debentures" shall mean any of the securities of any series issued, ---------- authenticated, and delivered under this Indenture. "Default" means any event which is, or after notice or passage of time, or ------- both, would be, an Event of Default pursuant to Section 6.01 hereof. "Event of Default" has the meaning specified in Section 6.01 hereof. ---------------- "Exchange Act" means the Securities Exchange Act of 1934, as amended. ------------ "Extension Period" means a period, up to 60 consecutive months, in which ---------------- the Company elects to extend the interest payment period on the Debentures pursuant to Section -3- 4.01(b) hereof; provided that no Extension Period shall extend beyond the Stated -------- Maturity date or the date of redemption of any series of Subordinated Debentures. "GAAP" means generally accepted accounting principles set forth in the ---- opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board. "General Partner" means the Company, as the general partner of CL&P --------------- Capital, or any successor general partner of CL&P Capital pursuant to the Limited Partnership Agreement. "Guaranty Agreement" means that certain Payment and Guaranty Agreement ------------------ issued by the Company to irrevocably and unconditionally agree to pay Guaranty Payments (as defined in the Guaranty Agreement) to the holders of the Preferred Securities. "Holder" or "Debentureholder" means any Person in whose name a Debenture is ------ --------------- registered on the Registrar's books. "Indebtedness" means, without duplication, (i) the principal of and ------------ premium, if any, in respect of (A) indebtedness of the Company for money borrowed and (B) indebtedness evidenced by securities, debentures, bonds, or other similar instruments issued by the Company; (ii) all Capital Lease Obligations of the Company; (iii) all obligations of the Company issued or assumed as the deferred purchase price of property, all conditional sale obligations of the Company, and all obligations of the Company under any title retention agreement (but excluding trade accounts payable arising in the ordinary course of business); (iv) all obligations of the Company for the reimbursement of any obligor on any letter of credit, banker's acceptance, security purchase facility, or similar credit transaction (other than obligations with respect to letters of credit securing obligations (other than obligations described in (i) through (iii) above) entered into in the ordinary course of business of the Company to the extent such letters of credit are not drawn upon or, if and to the extent drawn upon, such drawing is reimbursed no later than the third Business Day following receipt by the Company of a demand for reimbursement following payment on the letter of credit); (v) all obligations of the type referred to in clauses (i) through (iv) of other Persons and all dividends of other Persons (other than the Preferred Securities) for the payment of which, in either case, the Company is responsible or liable as obligor, guarantor, or otherwise; and (vi) all obligations of the type referred to in clauses (i) through (v) of other Persons secured by any lien on any property or asset of the Company (whether or not such obligation is assumed by the Company), the amount of such obligation being deemed to be the lesser of the value of such property or assets or the amount of the obligation so secured; provided, however, that Indebtedness will not include endorsements of negotiable - -------- ------- instruments for collection in the ordinary course of business. "Indenture" means this indenture, as amended or supplemented from time to --------- time in accordance with the terms hereof, including the provisions of the TIA that are deemed to be a part hereof. "Issue Date" means, with respect to a series of Debentures, the date on ---------- which the Debentures of such series are originally issued. -4- "Legal Holiday" has the meaning specified in Section 11.08 hereof. ------------- "Limited Partnership Agreement" means the Amended and Restated Limited ----------------------------- Partnership Agreement of CL&P Capital dated _________, 199__, as it may be amended from time to time. "Notice of Default" has the meaning specified in Section 6.01 hereof. ----------------- "Officer" means, with respect to any corporation, the Chairman of the ------- Board, the Chief Executive Officer, the President, any Vice President, the Treasurer, any Assistant Treasurer, the Secretary, or any Assistant Secretary of such corporation. "Officer's Certificate" means a written certificate containing the --------------------- applicable information specified in Sections 11.04 and 11.05 hereof, signed in the name of the Company by any one of its Officers, and delivered to the Trustee. "Opinion of Counsel" means a written opinion containing the applicable ------------------ information specified in Sections 11.04 and 11.05 hereof, by legal counsel who is reasonably acceptable to the Trustee. "Paying Agent" has the meaning specified in Section 2.05 hereof. ------------ "Person" means any individual, corporation, partnership, limited liability ------ company, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof, or any other entity. "Preferred Securities" means the limited partner interests issued from time -------------------- to time in series by CL&P Capital. "Record Date", with respect to any series of the Debentures, means the date ----------- set to determine the Holders of such series entitled to payment of interest or principal or to vote, consent, make a request, or exercise any other right associated with such series. "Redemption Date", with respect to any Debenture to be redeemed, means the --------------- date specified for the redemption of such Debenture in accordance with the terms thereof and Article 3 hereof. "Redemption Price", with respect to any Debenture to be redeemed, means the ---------------- price at which it is to be redeemed pursuant to this Indenture and such Debenture. "Register" has the meaning specified in Section 2.05 hereof. -------- "Registrar" has the meaning specified in Section 2.05 hereof. --------- "Regular Record Date", with respect to an interest payment on the ------------------- Debentures of a series, means the date set forth in the Debentures of such series for the determination of Holders entitled to receive payment of interest on the next succeeding interest payment date. -5- "SEC" or "Commission" means the Securities and Exchange Commission. --- ---------- "Securities Act" means the Securities Act of 1933, as amended. -------------- "Senior Indebtedness" means all Indebtedness, except for Indebtedness that ------------------- is by its terms subordinated to or pari passu with the Debentures. Notwithstanding anything to the contrary in the foregoing, Senior Indebtedness shall not include any Indebtedness between or among the Company and any Affiliates. "Series A Debentures" means any of the Company's __% Junior Subordinated ------------------- Deferrable Interest Debentures, Series A issued under this Indenture. "Series A Preferred Securities" means the __% Cumulative Monthly Income ----------------------------- Preferred Securities, Series A, issued by CL&P Capital. "Special Representative" means a special representative appointed by the ---------------------- holders of the Preferred Securities pursuant to Section 13.02(d) of the Limited Partnership Agreement. "Stated Maturity", with respect to any Debenture, means the date specified --------------- in the Debenture as the fixed date on which the principal of the Debenture is due and payable. "Subsidiary" means any corporation, association, partnership, or other ---------- business entity of which more than 50% of the total voting power of shares of Capital Stock or other interests (including partnership interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers, or trustees thereof is at the time owned or controlled, directly or indirectly, by (i) the Company, (ii) the Company and one or more Subsidiaries, or (iii) one or more Subsidiaries. "Successor" has the meaning specified in Section 5.01 hereof. --------- "TIA" means the Trust Indenture Act of 1939, as amended and as in effect on --- the date of the execution and delivery of this Indenture; provided, however, -------- ------- that if the TIA is amended after such date, TIA means, to the extent required by any such amendment, the TIA as so amended. "Trust Officer" means, when used with respect to the Trustee, the chairman ------------- or vice-chairman of the board of directors, the chairman or vice-chairman of the executive committee of the board of directors, the president, any vice president, any assistant vice president, the secretary, any assistant secretary, the treasurer, any assistant treasurer, the cashier, any assistant cashier, any account officer or assistant account officer, the controller and any assistant controller, or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his or her knowledge of and familiarity with the particular subject. "Trustee" means the party named as the "Trustee" in the first paragraph of ------- this Indenture until a successor replaces it pursuant to the applicable provisions of this Indenture and, thereafter, shall mean such successor. -6- "U.S. Government Obligations" means direct obligations (or certificates --------------------------- representing an ownership interest in such obligations) of the United States of America (including any agency or instrumentality thereof) for the payment of which the full faith and credit of the United States of America is pledged and which are not callable at the issuer's option. "Voting Stock" means, with respect to a corporation, all classes of Capital ------------ Stock then outstanding of such corporation normally entitled to vote in elections of directors. "Wholly Owned Subsidiary" means a Subsidiary all the Capital Stock of which ----------------------- (other than directors' qualifying shares) is owned by the Company or another Wholly Owned Subsidiary. Section 1.02 Incorporation By Reference Of Trust Indenture Act. ------------------------------------------------- Whenever this Indenture refers to a provision of the TIA, such provision is incorporated by reference in and made a part of this Indenture. When so incorporated, the following TIA terms in such provisions correspond to the terms used in this Indenture as follows: The "Commission" means the SEC. The "indenture securities" means the Debentures. An "indenture security holder" means a Debentureholder. The "indenture to be qualified" means this Indenture. The "indenture trustee" or the "institutional trustee" means the Trustee. The "obligor" on the indenture securities means the Company and any other obligor on the Debentures. All other TIA terms used in this Indenture that are defined in the TIA, either directly or by reference therein, or defined by SEC rule, have the meanings assigned to them by such definitions. Section 1.03 Rules Of Construction. --------------------- Unless the context otherwise requires: (1) a term has the meaning assigned to it; (2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; (3) "or" is not exclusive; (4) "including" means including, without limitation; -7- (5) words in the singular include the plural, and words in the plural include the singular; and (6) unless used with a particular Article, Section, or other subdivision, "herein," "hereof," and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section, or other subdivision. Section 1.04 Acts Of Holders. --------------- Any request, demand, authorization, direction, notice, consent, waiver, or other action provided by this Indenture to be given or taken by Holders, may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of Holders signing such instrument or --- instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section. The fact and date of the execution by any Person of any such instrument or writing may be proved in any manner which the Trustee deems sufficient. The ownership of Debentures shall be proved by the Register. Any request, demand, authorization, direction, notice, consent, waiver, or other Act of the Holder of any Debenture shall bind every future Holder of the same Debenture and the holder of every Debenture issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted, or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Debenture. If the Company solicits from the Holders any request, demand, authorization, direction, notice, consent, waiver, or other Act, the Company may, at its option, by or pursuant to a resolution of its Board of Directors, fix in advance a Record Date for the determination of Holders entitled to give such request, demand, authorization, direction, notice, consent, waiver, or other Act, but the Company shall have no obligation to do so. If such a Record Date is fixed, such request, demand, authorization, direction, notice, consent, waiver, or other Act may be given before or after such Record Date, but only Holders of record at the close of business on such Record Date shall be deemed to be Holders for the purposes of determining whether Holders of the requisite proportion of outstanding Debentures have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver, or other Act, and for that purpose the outstanding Debentures shall be computed as of such Record Date. -8- ARTICLE 2 THE DEBENTURES; THE SERIES A DEBENTURES Section 2.01 Issue Of Debentures Generally. ----------------------------- The aggregate principal amount of the Debentures which may be authenticated and delivered under this Indenture is limited to the aggregate stated liquidation preference of the Preferred Securities plus the capital contributions to CL&P Capital by its General Partner. The Debentures may be issued in one or more series as from time to time shall be authorized by the Board of Directors. The Debentures of each series and the Trustee's certificate of authentication shall be substantially in the forms to be attached as exhibits to this Indenture or the supplemental indenture providing for their issuance, with such insertions, omissions, substitutions, and other variations as are required or permitted by this Indenture, and may have such letters, numbers, or other marks of identification or designation and such legends or endorsements printed, lithographed, or engraved thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Indenture, or as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any securities exchange on which the Debentures may be listed, or to conform to usage. Each Debenture shall be dated the date of its authentication. The several series of Debentures may differ from the Series A Debentures, and as and between series, in respect of any or all of the following matters: (1) designation; (2) date or dates of maturity, which may be serial; (3) interest rate or method of determination of the interest rate and whether Additional Interest will be payable; (4) interest payment dates and the Regular Record Dates therefor; (5) Issue Date; (6) authorized denominations; (7) the place or places for the payment of principal (and premium, if any) and for the payment of interest; (8) limitation upon the aggregate principal amount of Debentures of the series which may be issued; (9) the optional and mandatory redemption provisions, if any; -9- (10) provisions, if any, for any sinking or analogous fund with respect to the Debentures of such series; and (11) any other provisions expressing or referring to the terms and conditions upon which the Debentures of such series are to be issued under this Indenture which are not in conflict with the provisions of this Indenture; in each case as determined and specified by the Board of Directors. The Trustee shall not authenticate and deliver Debentures of any series (other than the Series A Debentures) upon initial issue unless the terms and conditions of such series shall have been set forth in a supplemental indenture entered into between the Company and the Trustee as provided in Section 9.01 hereof. Section 2.02 Form Of The Series A Debentures; Denominations. ---------------------------------------------- The Series A Debentures and the Trustee's certificate of authentication shall be substantially in the form of Exhibit A attached hereto. The terms and provisions contained in the Series A Debentures, as set forth in such Exhibit A, shall constitute, and are hereby expressly made, a part of this Indenture. The Company and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. The Trustee shall authenticate and make available for delivery Series A Debentures for original issue in the aggregate principal amount of $[*****_____________*****] to evidence the Company's obligation with respect to the loan from CL&P Capital, upon a resolution of the Board of Directors and a written order of the Company signed by two Officers of the Company, but without any further action by the Company. Such order shall specify the amount of the Series A Debentures to be authenticated and the date on which the original issue of Debentures is to be authenticated and delivered. The aggregate principal amount of Series A Debentures outstanding at any time may not exceed $[***** ___________ *****], except as provided in Section 2.09 hereof. The Series A Debentures shall be issuable only in registered form without coupons and only in denominations of $25.00 and any integral multiple thereof. Section 2.03 Payment Of Principal And Interest. --------------------------------- The principal of and interest on the Debentures of any series, as well as any premium thereon in the case of redemption thereof prior to maturity, shall be payable at the office of the Paying Agent in the coin or currency of the United States of America which at the time is legal tender for public and private debts. Each Debenture shall be dated its Issue Date. Interest on the Debentures shall be computed on the basis of a 360-day year composed of twelve 30-day months. The interest on any Debenture which is payable and is punctually paid or duly provided for on any interest payment date for Debentures of that series shall be paid to the person in whose name the Debenture is registered at the close of business on the Regular Record Date therefor. In the event that any Debenture of a particular series or portion thereof is called for redemption, and the Redemption Date is subsequent to the Regular -10- Record Date with respect to any interest payment date and prior to such interest payment date, interest on such Debenture will be paid upon presentation and surrender of such Debenture to the Paying Agent. Section 2.04 Execution And Authentication. ---------------------------- The Debentures shall be executed on behalf of the Company by its Chief Executive Officer, its President, or one of its Vice Presidents, under its corporate seal imprinted or reproduced thereon attested by its Secretary or one of its Assistant Secretaries. The signature of any such Officer on the Debentures may be manual or facsimile. Debentures bearing the manual or facsimile signatures of individuals who were at any time the proper Officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Debentures or did not hold such offices at the date of such Debentures. No Debenture shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Debenture a certificate of authentication duly executed by the Trustee by manual signature of an authorized officer, and such certificate upon any Debenture shall be conclusive evidence, and the only evidence, that such Debenture has been duly authenticated and made available for delivery hereunder. The Trustee shall act as the initial authenticating agent. Thereafter, the Trustee may appoint an authenticating agent. An authenticating agent may authenticate Debentures whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as a Paying Agent to deal with the Company or an Affiliate of the Company. Section 2.05 Registrar And Paying Agent. -------------------------- The Company shall maintain or cause to be maintained, within or outside the State of Connecticut an office or agency where the Debentures may be presented for registration of transfer or for exchange (the "Registrar"), an office or --------- agency where Debentures may be presented or surrendered for purchase or payment (the "Paying Agent"), and an office or agency where notices and demands to or ------------ upon the Company in respect of the Debentures and this Indenture may be served. The Registrar shall keep a register (the "Register") of the Debentures and of -------- their transfer and exchange. The Company may have one or more co-Registrars and one or more additional Paying Agents. The term Paying Agent includes any additional paying agent. The corporate trust office of the Trustee at Four Albany Street, New York, New York 10006, Attention: Corporate Trust Department, shall initially be the Registrar and agent for service of notice or demands on the Company, and the Company shall initially be the Paying Agent. The Company shall enter into an appropriate agency agreement with any Registrar, Paying Agent, or co-Registrar (if not the Trustee or the Company). The agreement shall implement the provisions of this Indenture that relate to such agent. The Company shall give prompt written notice to the Trustee of any change of location of such office or agency. If at any time the Company shall fail to maintain or cause to be maintained any -11- such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices, and demands may be made or served at the address of the Trustee set forth in Section 11.02 hereof. The Company shall notify the Trustee of the name and address of any such agent. If the Company fails to maintain a Registrar, Paying Agent, or agent for service of notices or demands, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 7.07 hereof. The Company or any Affiliate of the Company may act as Paying Agent, Registrar or co- Registrar, or agent for service of notices and demands. The Company may also from time to time designate one or more other offices or agencies where the Debentures may be presented or surrendered for any or all such purposes and may from time to time rescind such designations. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in location of any such other office or agency. Section 2.06 Paying Agent To Hold Money In Trust. ----------------------------------- Except as otherwise provided herein, prior to each due date of the principal and interest on any Debenture, the Company shall deposit with the Paying Agent a sum of money sufficient to pay such principal, premium (if any), and interest so becoming due. The Company shall require each Paying Agent (other than the Trustee or the Company) to agree in writing that such Paying Agent shall hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal, premium, if any, and interest on the Debentures and shall notify the Trustee of any default by the Company in making any such payment. At any time during the continuance of any such default, the Paying Agent shall, upon the request of the Trustee, forthwith pay to the Trustee all money so held in trust and account for any money disbursed by it. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee and to account for any money disbursed by it. Upon doing so, the Paying Agent shall have no further liability for the money so paid over to the Trustee. If the Company, a Subsidiary, or an Affiliate of either of them acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it as a separate trust fund. Section 2.07 Debentureholder Lists. --------------------- The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Debentureholders. If the Trustee is not the Registrar, the Company shall cause to be furnished to the Trustee on or before the Record Date for each interest payment date and at such other times as the Trustee may request in writing, within five Business Days of such request, a list in such form as the Trustee may reasonably require of the names and addresses of Debentureholders, provided -------- that during any deferral period, such information will be provided every six months and upon request of the Trustee. Section 2.08 Transfer And Exchange. --------------------- When Debentures are presented to the Registrar or a co-Registrar with a request to register the transfer or to exchange them for an equal principal amount of Debentures of the same series of other authorized denominations, the Registrar shall register the transfer or -12- make the exchange as requested if its requirements for such transactions are met. To permit registrations of transfer and exchanges, the Company shall execute and the Trustee shall authenticate Debentures, all at the Registrar's request. Every Debenture presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Registrar duly executed by the Holder or his attorney duly authorized in writing. The Company shall not charge a service charge for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to pay all taxes, assessments, or other governmental charges that may be imposed in connection with the transfer or exchange of the Debentures from the Debentureholder requesting such transfer or exchange (other than any exchange of a temporary Debenture for a definitive Debenture not involving any change in ownership). The Company shall not be required to make, and the Registrar need not register, transfers or exchanges of (1) any Debenture for a period beginning at the opening of business 15 days before the mailing of a notice of redemption of Debentures and ending at the close of business on the day of such mailing, or (2) any Debenture selected, called, or being called for redemption, except, in the case of any Debenture to be redeemed in part, the portion thereof not to be redeemed. Section 2.09 Replacement Debentures. ---------------------- If (1) any mutilated Debenture is surrendered to the Company or the Trustee, or (2) the Company and the Trustee receive evidence to their satisfaction of the destruction, loss, or theft of any Debenture, and there is delivered to the Company and the Trustee such Debenture or indemnity as may be required by them to save each of them harmless, then, in the absence of notice to the Company or the Trustee that such Debenture has been acquired by a bona fide purchaser, the Company shall execute in exchange for any such mutilated Debenture or in lieu of any such destroyed, lost, or stolen Debenture, a new Debenture of like tenor and principal amount, bearing a number not contemporaneously outstanding, and the Trustee shall authenticate and make such new Debenture available for delivery. In case any such mutilated, destroyed, lost, or stolen Debenture has become or is about to become due and payable, or is about to be redeemed by the Company pursuant to Article 3 hereof, the Company in its discretion may, instead of issuing a new Debenture, pay or purchase such Debenture, as the case may be. Upon the issuance of any new Debentures under this Section 2.09, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) in connection therewith. Every new Debenture issued pursuant to this Section 2.09 in lieu of any mutilated, destroyed, lost, or stolen Debenture shall constitute an original additional contractual obligation of the Company whether or not the mutilated, destroyed, lost, or stolen -13- Debenture shall be at any time enforceable by anyone, and shall be entitled to all benefits of this Indenture equally and ratably with any and all other Debentures duly issued hereunder. The provisions of this Section 2.09 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost, or stolen Debentures. Section 2.10 Outstanding Debentures; Determinations Of Holders' Action. --------------------------------------------------------- Debentures outstanding at any time are all the Debentures authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those mutilated, destroyed, lost, or stolen Debentures referred to in Section 2.09 hereof, those redeemed by the Company pursuant to Article 3 hereof, and those described in this Section 2.10 as not outstanding. A Debenture does not cease to be outstanding because the Company or a Subsidiary or Affiliate thereof holds the Debenture; provided, however, that in determining -------- ------- whether the Holders of the requisite principal amount of Debentures have given or concurred in any request, demand, authorization, direction, notice, consent, or waiver hereunder, Debentures owned by the Company, a Subsidiary, or an Affiliate shall be disregarded and deemed not to be outstanding. Subject to the foregoing, only Debentures outstanding at the time of such determination shall be considered in any such determination (including determinations pursuant to Articles 3, 6 and 9 hereof). If a Debenture is replaced pursuant to Section 2.09 hereof, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Debenture is held by a bona fide purchaser. If the Paying Agent (other than the Company) holds, in accordance with this Indenture, at maturity or on a Redemption Date, money sufficient to pay the Debentures payable on that date, then immediately on the date of maturity or such Redemption Date, as the case may be, such Debentures shall cease to be outstanding, and interest, if any, on such Debentures shall cease to accrue. Section 2.11 Temporary Debentures. -------------------- So long as CL&P Capital shall hold all of the Debentures, the Company may execute temporary Debentures, and upon the Company's written request, signed by two Officers of the Company, the Trustee shall authenticate and make such temporary Debentures available for delivery. Temporary Debentures shall be printed, lithographed, typewritten, mimeographed, or otherwise produced in any authorized denomination, substantially of the tenor of the definitive Debentures in lieu of which they are issued and with such appropriate insertions, omissions, substitutions, and other variations as the Officers of the Company executing such Debentures may determine, as conclusively evidenced by their execution of such Debentures. After the preparation of definitive Debentures, the temporary Debentures shall be exchangeable for definitive Debentures of the same series upon surrender of the temporary Debentures at the office or agency of the Company designated for such purpose pursuant to -14- Section 2.05 hereof, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Debentures, the Company shall execute a like principal amount of definitive Debentures of authorized denominations, and the Trustee, upon written request of the Company signed by two Officers of the Company, shall authenticate and make such Debentures available for delivery in exchange therefor. Until so exchanged, the temporary Debentures shall in all respects be entitled to the same benefits under this Indenture as definitive Debentures. Section 2.12 Cancellation. ------------ All Debentures surrendered for payment, redemption by the Company pursuant to Article 3 hereof, or registration of transfer or exchange shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly canceled by the Trustee. The Company may at any time deliver to the Trustee for cancellation any Debentures previously authenticated and made available for delivery hereunder which the Company may have acquired in any manner whatsoever, and all Debentures so delivered shall be promptly canceled by the Trustee. The Company may not reissue or issue new Debentures to replace Debentures it has paid or delivered to the Trustee for cancellation. No Debentures shall be authenticated in lieu of or in exchange for any Debentures canceled as provided in this Section 2.12, except as expressly permitted by this Indenture. All canceled Debentures held by the Trustee shall be destroyed by the Trustee, and the Trustee shall deliver a certificate of destruction to the Company. Section 2.13 Defaulted Interest. ------------------ If the Company defaults in a payment of interest on the Debentures, it shall pay the defaulted interest to the Persons who are Holders on a subsequent special Record Date, and such special Record Date, as used in this Section 2.13 with respect to the payment of any defaulted interest, shall mean the 15th day next preceding the date fixed by the Company for the payment of defaulted interest, whether or not such day is a Business Day. At least 15 days before the subsequent special Record Date, the Company shall mail to each Holder and to the Trustee a notice that states the subsequent special Record Date, the payment date, and the amount of defaulted interest to be paid. The Company may also pay defaulted interest in any other lawful manner. ARTICLE 3 REDEMPTION Section 3.01 Redemption; Notice To Trustee. ----------------------------- (a) The Series A Debentures are subject to redemption prior to maturity as provided in the form thereof. (b) The redemption terms for any additional series of Debentures shall be as specified in the supplemental indenture creating such series of Debentures. -15- (c) If any or all of the Debentures are to be redeemed pursuant to paragraphs (a) or (b) above, the Company shall give notice by first class mail, postage prepaid, to the Trustee within 45 days prior to the date of such redemption. Any such notice of redemption shall state the date and price of redemption. Section 3.02 Selection Of Debentures To Be Redeemed. -------------------------------------- If less than all the outstanding Debentures are to be redeemed at any time, the Trustee shall select the Debentures to be redeemed on a pro rata basis, by lot or any other method the Trustee considers fair and appropriate. The Trustee shall make the selection at least 30 but not more than 60 days before the Redemption Date from outstanding Debentures not previously called for redemption. Provisions of this Indenture that apply to Debentures called for redemption also apply to portions of Debentures called for redemption. The Trustee shall notify the Company promptly of the Debentures or portions of Debentures to be redeemed. Notwithstanding the foregoing, if a partial redemption would result in the delisting a series of the Preferred Securities by any national securities exchange or other organization on which such series is then listed, the Partnership may only redeem such series of the Preferred Securities in whole. Section 3.03 Notice Of Redemption. -------------------- So long as CL&P Capital remains the sole Debentureholder, no notice of any redemption of Debentures will be required. In the event and at such time that CL&P Capital ceases to be the sole Debentureholder, at least 30 days but not more than 60 days prior to a Redemption Date, the Trustee shall mail or cause to be mailed a notice of redemption by first-class mail, postage prepaid, to each Holder of Debentures to be redeemed at the Holder's last address, as it appears on the Register. At the Company's written request, the Trustee shall give the notice of redemption in the Company's name and at its expense. The notice shall identify the Debentures to be redeemed, the provision of the Debentures or this Indenture pursuant to which the Debentures called for redemption are being redeemed and shall state: (1) the Redemption Date; (2) the Redemption Price; (3) the name and address of the Paying Agent; (4) that Debentures called for redemption must be surrendered to the Paying Agent to collect the Redemption Price; (5) if fewer than all the outstanding Debentures are to be redeemed, the identification and principal amounts of the particular Debentures to be redeemed and that, on and after the Redemption Date, upon surrender of such Debentures, a new Debenture or Debentures in principal amount equal to the unredeemed portion thereof will be issued; and -16- (6) that, unless the Company does not make such redemption payment, interest will cease to accrue on Debentures called for redemption on and after the Redemption Date. The notice may state that it is subject to the deposit or segregation of the redemption monies on or before the date fixed for redemption in accordance with Section 3.05, and which notice shall be of no effect unless such monies are so deposited or segregated on or before such date. Section 3.04 Effect Of Notice Of Redemption. ------------------------------ If (1) the notice of redemption is not conditioned upon the deposit or segregation of the redemption monies on or before the date fixed for redemption, or (2) the notice of redemption is conditioned upon such deposit or segregation of redemption monies and such monies are so deposited or segregated, then the Debentures called for redemption shall become due and payable on the Redemption Date and at the Redemption Price and such Debentures shall, upon the later of the Redemption Date and the date such Debentures are surrendered to the Paying Agent, be paid at the Redemption Price, plus accrued interest to the Redemption Date. Section 3.05 Deposit Of Redemption Price. --------------------------- On or prior to a Redemption Date, the Company shall deposit with the Paying Agent (or if the Company or an Affiliate is the Paying Agent, shall segregate and hold in trust or cause such Affiliate to segregate and hold in trust) money sufficient to pay the Redemption Price of, and accrued interest on, all Debentures to be redeemed on that date. The Paying Agent shall return to the Company any money not required for the purpose stated in this Section 3.05. Section 3.06 Debentures Redeemed In Part. --------------------------- Upon surrender of a Debenture that is redeemed in part, the Trustee shall authenticate for the Holder a new Debenture equal in principal amount to the unredeemed portion of such Debenture. ARTICLE 4 COVENANTS Section 4.01 Payment Of Debentures. --------------------- (a) The Company shall pay the principal of and premium, if any, and interest (including Additional Interest, if any, and interest accruing on or after the filing of a petition in bankruptcy or reorganization relating to the Company, whether or not a claim for post-filing interest is allowed in such proceeding) on the Debentures on (or prior to) the dates and in the manner provided in the Debentures and/or pursuant to this Indenture. An installment of principal or interest shall be considered paid on the applicable date due if on such date the Trustee or the Paying Agent holds, in accordance with this Indenture, money sufficient to pay all of such installment then due. The Company shall pay interest on -17- overdue principal and interest on overdue installments of interest (including Additional Interest, if any, and interest accruing during an Extension Period and/or on or after the filing of a petition in bankruptcy or reorganization relating to the Company, whether or not a claim for post-filing interest is allowed in such proceeding), to the extent permitted by applicable law, at the rate per annum borne by the Debentures, which interest on overdue interest shall accrue from the date such amounts became overdue. (b) Notwithstanding paragraph (a) of this Section 4.01 or any other provision herein or in the Debentures to the contrary, the Company shall have the right in its sole and absolute discretion at any time and from time to time while the Debentures are outstanding, so long as no Event of Default has occurred and is continuing, to extend the interest payment period for one or more series of the Debentures for up to 60 consecutive months, provided that -------- such Extension Period shall not extend beyond the Stated Maturity, or acceleration thereof, or any date of redemption, of the Debentures, and provided -------- further that at the end of each Extension Period the Company shall pay all - ------- interest, including Additional Interest, if any, then accrued and unpaid (together with interest thereon compounded monthly at the rate specified for the applicable series of Debentures, to the extent permitted by applicable law). Prior to the termination of an Extension Period, the Company may shorten or may further extend the interest payment period, provided that such Extension Period -------- together with all such further extensions may not exceed 60 consecutive months. Upon the termination of any Extension Period and the payment of all amounts then due, the Company may select a new Extension Period subject to the above requirements. The Company shall give the Trustee notice of its selection of such extended or shortened interest payment period on or prior to the earliest of (1) one Business Day prior to the date on which the related distribution by CL&P Capital on the Preferred Securities would otherwise be payable, (2) one Business Day prior to the date CL&P Capital is required to give notice of the record or payment date of such related distribution to any national securities exchange on which the Preferred Securities are then listed or other applicable self-regulatory organization, and (3) two Business Days prior to such record date. The Company shall give or cause the Trustee to give such notice of the Company's selection of such extended interest payment period to the Holders and, if CL&P Capital is the sole holder of such series of the Subordinated Debentures, to the holders of the corresponding series of the Preferred Securities. Section 4.02 Prohibition Against Dividends, Etc. During An Event Of ------------------------------------------------------ Default Or An Extension Period. ------------------------------ Neither the Company nor any Subsidiary shall declare or pay any dividend on, or redeem, purchase, acquire, or make a liquidation payment with respect to, any of its Capital Stock (other than dividends paid by a Wholly Owned Subsidiary) during an Extension Period or if at such time there shall have occurred and be continuing any Default or Event of Default or if the Company shall be in default with respect to its payment obligations under the Guaranty Agreement. Section 4.03 SEC Reports. ----------- The Company shall file with the Trustee, within 15 days after it files them with the SEC, copies of its annual report and of the information, documents, and other reports (or copies of such portions of any of the foregoing as the SEC may by rules and regulations -18- prescribe) which the Company is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. If the Company is not subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company shall file with the Trustee such information, documents, and other reports (or copies of such portions of any of the foregoing as the SEC may by rules and regulations prescribe) which are specified in Sections 13 of the Exchange Act. The Company shall also comply with the provisions of Section 314(a) of the TIA. Section 4.04 Compliance Certificates. ----------------------- (a) The Company shall deliver to the Trustee within 90 days after the end of each of the Company's fiscal years an Officer's Certificate, stating whether or not the signer knows of any Default or Event of Default. Such certificate shall contain a certification from the principal executive officer, principal financial officer, or principal accounting officer of the Company as to his or her knowledge of the Company's compliance with all conditions and covenants under this Indenture. For purposes of this Section 4.04(a), such compliance shall be determined without regard to any period of grace or requirement of notice provided under this Indenture. If such Officer does know of such a Default or Event of Default, the certificate shall describe any such Default or Event of Default and its status. Such Officer's Certificate need not comply with Sections 11.04 and 11.05 hereof. (b) The Company shall deliver to the Trustee any information reasonably requested by the Trustee in connection with the compliance by the Trustee or the Company with the TIA. Section 4.05 Relationship With CL&P Capital. ------------------------------ The Company agrees (i) to maintain, directly or indirectly through a Wholly Owned Subsidiary, 100% ownership of the general partnership interests in CL&P Capital; (ii) to cause the General Partner to maintain a capital account balance in CL&P Capital equal to at least 3% of the total positive capital account balances for CL&P Capital and, if necessary, to make additional contributions to satisfy this requirement; (iii) to timely perform or cause to be timely performed all of the duties of the General Partner of CL&P Capital (including the duty to pay distributions on the Preferred Securities); and (iv) to use its reasonable efforts to cause CL&P Capital to remain a limited partnership and otherwise continue to be treated as a partnership for United States federal income tax purposes. Section 4.06 Further Instruments And Acts. ---------------------------- Upon request of the Trustee, the Company shall execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purposes of this Indenture. Section 4.07 Payments For Consents. --------------------- Neither the Company nor any Subsidiary shall, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee, or otherwise, to any Debentureholder for or as an inducement to any consent, waiver, or amendment of any of the terms or provisions of this Indenture or the Debentures unless such consideration is -19- offered to be paid or agreed to be paid to all Debentureholders who so consent, waive, or agree to amend in the time frame set forth in the documents soliciting such consent, waiver, or agreement. ARTICLE 5 SUCCESSOR CORPORATION Section 5.01 When The Company May Merge, Etc. ------------------------------- The Company may not consolidate with or merge with or into, or sell, convey, transfer, or lease all or substantially all of its assets (either in one transaction or a series of transactions) to, any Person unless: (1) the Person formed by or surviving such consolidation or merger or to which such sale, conveyance, transfer, or lease shall have been made (the "Successor"), if other than the Company, (a) is organized and existing --------- under the laws of the United States of America or any State thereof or the District of Columbia, and (b) shall expressly assume by a supplemental indenture, executed and delivered to the Trustee, in form reasonably satisfactory to the Trustee, all the obligations of the Company under the Debentures and this Indenture; (2) immediately prior to and after giving effect to such transaction (and treating any Indebtedness which becomes an obligation of the Successor as a result of such transaction as having been incurred by the Successor at the time of such transaction), no Default or Event of Default shall have occurred and be continuing; and (3) the Company delivers to the Trustee an Officer's Certificate and an Opinion of Counsel, each stating that such consolidation, merger, sale, conveyance, transfer, or lease and such supplemental indenture comply with this Indenture. The Successor will be the successor to the Company, and will be substituted for, and may exercise every right and power and become the obligor on the Debentures with the same effect as if the Successor had been named as the Company herein, but, in the case of a sale, conveyance, transfer, or lease of all or substantially all of the assets of the Company, the predecessor Company will not be released from its obligation to pay the principal of, premium, if any, and interest on the Debentures. ARTICLE 6 DEFAULTS AND REMEDIES Section 6.01 Events Of Default. ----------------- An "Event of Default" occurs if one of the following shall have occurred ---------------- and be continuing: -20- (1) The Company defaults in the payment, when due and payable, of (a) interest, including Additional Interest, on any Debenture and the default continues for a period of 10 days (whether or not payment is prohibited by the provisions of Article 10 hereof or otherwise); provided, -------- that during an Extension Period, interest shall not be due and payable and failure to pay interest on the Debentures shall not constitute a Default or Event of Default hereunder, or (b) the principal of, or premium, if any, on any Debentures when the same becomes due and payable at maturity, acceleration, on any Redemption Date, or otherwise (whether or not payment is prohibited by the provisions of Article 10 hereof or otherwise); (2) The Company defaults in the performance of, or fails to comply with, any of its other covenants or agreements in the Debentures or this Indenture and such default or failure continues for 60 days after receipt by the Company of a "Notice of Default"; ----------------- (3) The Company, pursuant to or within the meaning of any Bankruptcy Law: (a) commences a voluntary case or proceeding; (b) consents to the entry of an order for relief against it in an involuntary case or proceeding; (c) consents to the appointment of a Custodian of it or for all or substantially all of its property, and such Custodian is not discharged within 60 days; (d) makes a general assignment for the benefit of its creditors; or (e) admits in writing its inability to pay its debts generally as they become due; or (4) A court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (a) is for relief against the Company in an involuntary case or proceeding; (b) appoints a Custodian of the Company for all or substantially all of its properties; or (c) orders the liquidation of the Company; and in each case the order or decree remains unstayed and in effect for 60 days. The foregoing will constitute Events of Default whatever the reason for any such Event of Default and whether it is voluntary or involuntary or is effected by operation of -21- law or pursuant to any judgment, decree, or order of any court or any order, rule, or regulation of any administrative or governmental body. A Default under clause (2) above is not an Event of Default until the Trustee notifies the Company or the Holders of at least a majority in aggregate principal amount of the Debentures at the time outstanding or the Special Representative notifies the Company and the Trustee of the Default and the Company does not cure such Default within the time specified in clause (2) above after receipt of such notice. Any such notice must specify the Default, demand that it be remedied and state that such notice is a "Notice of Default." ----------------- Section 6.02 Acceleration. ------------ If any Event of Default, other than an Event of Default specified in clause (3) or (4) occurs and is continuing, the Trustee, the Holders of not less than 25% in principal amount of the Debentures then outstanding, or the Special Representative, may declare the principal of all such Debentures due and payable. Upon such a declaration, such principal and interest shall be due and payable immediately. If an Event of Default specified in clause (3) or (4) occurs, the principal of and interest on all the Debentures shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Debentureholders. The Special Representative or Holders of a majority in aggregate principal amount of the Debentures at the time outstanding by notice to the Trustee may rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default have been cured or waived except nonpayment of principal or interest that has become due solely because of acceleration. No such rescission shall affect any subsequent Default or impair any right consequent thereto. Section 6.03 Other Remedies. -------------- If an Event of Default occurs and is continuing, the Trustee may, in its own name or as trustee of an express trust, institute, pursue and prosecute any proceeding, including any action at law or suit in equity or other judicial or administrative proceeding, to collect the payment of principal of, premium, if any, or interest on, the Debentures, to enforce the performance of any provision of the Debentures or this Indenture or to obtain any other available remedy. The Trustee may maintain a proceeding even if it does not possess any of the Debentures or does not produce any of the Debentures in the proceeding. A delay or omission by the Trustee, the Special Representative, or any Debentureholder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of, or acquiescence in, the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative. Section 6.04 Waiver Of Past Defaults. ----------------------- The Special Representative or the Holders of 66 2/3% in aggregate principal amount of the Debentures at the time outstanding, by notice to the Trustee, the Company, and -22- CL&P Capital, may waive any Default or Event of Default that has occurred and its consequences. When a Default or Event of Default is waived, it is deemed cured and shall cease to exist, but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any consequent right. Section 6.05 Control By Majority Or The Special Representatives. -------------------------------------------------- The Holders of a majority in aggregate principal amount of the Debentures then outstanding or the Special Representative may direct the time, method, and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or that the Trustee determines in good faith is unduly prejudicial to the rights of other Debentureholders or would involve the Trustee in personal liability. The Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction, including withholding notice to the Holders of the Debentures of any series of any continuing Default (except in the payment of the principal (other than any mandatory sinking fund payment) of, premium, if any, or interest on, any Debentures of such series) if the Trustee considers it in the interest of the Holders of such series of Debentures to do so. Section 6.06 Limitation On Suits. ------------------- Except as provided in Section 6.07 hereof, the Holders and the Special Representative may not pursue any remedy with respect to this Indenture or the Debentures unless: (1) the Holders or the Special Representative gives to the Trustee written notice stating that an Event of Default is continuing; (2) the Holders or the Special Representative provides to the Trustee reasonable security and indemnity against any loss, liability, or expense satisfactory to the Trustee; (3) the Trustee does not comply with the request within 60 days after receipt of the notice, the request and the offer of security and indemnity; and (4) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the outstanding Debentures; it being understood and intended that no one or more Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb, or prejudice the rights of any other Holders, or to obtain or to seek to obtain priority or preference over any other Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all the Holders. -23- Section 6.07 Rights Of Holders To Receive Payment. ------------------------------------ Notwithstanding any other provision of this Indenture, the right of any Holder to receive payment of the principal amount of or interest on the Debentures held by such Holder, on or after the respective due dates expressed in the Debentures (in the case of interest, as the same may be extended pursuant to Section 4.01(b)) or any Redemption Date, or to bring suit for the enforcement of any such payment on or after such respective dates shall not be impaired or affected adversely without the consent of each such Holder. Section 6.08 Collection Suit By The Trustee. ------------------------------ If an Event of Default described in Section 6.01(1) hereof occurs and is continuing, the Trustee may, in its own name and as trustee of an express trust, recover judgment against the Company or any other obligor upon the Debentures for the whole amount owing with respect to the Debentures and the amounts provided for in Section 6.07 hereof. Section 6.09 The Trustee May File Proofs Of Claim. ------------------------------------ In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition, or other judicial proceeding relative to the Company or its properties or assets, the Trustee shall be entitled and empowered, by intervention in such proceeding or otherwise: (1) to file and prove a claim for the whole amount of the principal, premium, if any, and interest on the Debentures and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements, and advances of the Trustee, its agents, and counsel) and of the Holders allowed in such judicial proceeding; and (2) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same; and any Custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay the Trustee any amount due it for the reasonable compensation, expenses, disbursements, and advances of the Trustee, its agents, and counsel, and any other amounts due the Trustee under Section 7.07 hereof. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment, or composition affecting the Debentures or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding. -24- Section 6.10 Priorities. ---------- If the Trustee collects any money pursuant to this Article 6, it shall pay out the money in the following order: FIRST: to the Trustee for amounts due under Section 7.07 hereof; SECOND: to Debentureholders for amounts due and unpaid on the Debentures for the principal amount, Redemption Price, or interest, if any, as the case may be, ratably, without preference or priority of any kind, according to such amounts due and payable on the Debentures; and THIRD: the balance, if any, to the Company. The Trustee may fix a Record Date and payment date for any payment to Debentureholders pursuant to this Section 6.10. Section 6.11 Undertaking For Costs. --------------------- In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant (other than the Trustee) in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys' fees and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 hereof or a suit by Holders of more than 10% in aggregate principal amount of the Debentures at the time outstanding, or a suit by the Special Representative. Section 6.12 Waiver Of Stay, Extension, Or Usury Laws. ---------------------------------------- The Company covenants (to the extent permitted by applicable law) that it will not at any time insist upon, or plead or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law or any usury or other law wherever enacted, now or at any time hereafter in force, that would prohibit or forgive the Company from paying all or any portion of the principal or premium, if any, or interest on, the Debentures as contemplated herein or affect the covenants or the performance by the Company of its obligations under this Indenture; and the Company (to the extent permitted by applicable law) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay, or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted. -25- ARTICLE 7 THE TRUSTEE Section 7.01 Duties Of The Trustee. --------------------- (1) If an Event of Default has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in its exercise as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. (2) Except during the continuance of an Event of Default, (a) the Trustee need perform only those duties that are specifically set forth in this Indenture and no others; and (b) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, in the case of any certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture. (3) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that: (a) this paragraph (3) does not limit the effect of paragraph (2) of this Section 7.01; (b) the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and (c) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05 hereof. (4) Every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (1), (2), (3) and (5) of this Section 7.01 and to Section 7.02 hereof. (5) The Trustee may refuse to perform any duty or exercise any right or power or extend or risk its own funds or otherwise incur any financial liability unless it receives security and indemnity reasonably satisfactory to it against any loss, liability, or expense. (6) Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall not be liable for interest on any money held by it hereunder. -26- Section 7.02 Rights Of The Trustee. --------------------- (1) The Trustee may rely on any document believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in the document. (2) Before the Trustee acts or refrains from acting, it may require an Officer's Certificate and, if appropriate, an Opinion of Counsel. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officer's Certificate and Opinion of Counsel. (3) The Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care. (4) The Trustee shall not be liable for any action it takes or omits to take in good faith which it reasonably believes to be authorized or within its rights or powers. (5) The Trustee may consult with counsel of its selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered, or omitted by it hereunder in good faith and in reliance thereon. (6) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders or the Special Representative pursuant to this Indenture, unless such Holders or the Special Representative shall have offered to the Trustee reasonable security and indemnity against the costs, expenses, and liabilities which might be incurred by it in compliance with such request or direction. Section 7.03 Individual Rights Of The Trustee. -------------------------------- The Trustee in its individual or any other capacity may become the owner or pledgee of Debentures and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee. Any Paying Agent, Registrar, or co-Registrar may do the same with like rights. However, the Trustee must comply with Sections 7.10 and 7.11 hereof. Section 7.04 The Trustee's Disclaimer. ------------------------ The Trustee makes no representation as to the validity or adequacy of this Indenture or the Debentures, it shall not be accountable for the Company's use of the proceeds from the Debentures, and it shall not be responsible for any statement in this Indenture or the Debentures or any report or certificate issued by the Company hereunder or any registration statement relating to the Debentures (other than the Trustee's certificate of authentication), or the determination as to which beneficial owners are entitled to receive any notices hereunder. -27- Section 7.05 Notice Of Defaults. ------------------ The Trustee shall mail to the Debentureholders, as their names and addresses appear on the Register, notice of all Defaults known to the Trustee, within 90 days after the occurrence thereof; provided, however, that in the case -------- ------- of a Default described in Section 6.01(1) hereof, the Trustee may withhold such notice if and so long as a committee of Trust Officers in good faith determines that the withholding of such notice is in the interests of Debentureholders. The second sentence of this Section 7.05 shall be in lieu of the proviso to TIA Section 315(b). Said proviso is hereby expressly excluded from this Indenture, as permitted by the TIA. Section 7.06 Reports By Trustee To Holders. ----------------------------- Within 60 days after each [****_______*****], beginning with the [*****______*****] next following the date of the execution and delivery of this Indenture, the Trustee shall transmit by mail, postage prepaid, to (i) each Debentureholder, (ii) such other holders that have submitted their names to the Trustee for such purpose, and (iii) any other persons identified in the list of holders that the Company has provided to the Trustee pursuant to Section 2.07 hereof, a brief report dated as of such [****______****] in accordance with and to the extent required under TIA Section 313. A copy of each report at the time of its mailing to Debentureholders shall be filed with the Company, the SEC, and each securities exchange on which the Debentures are listed. The Company agrees to promptly notify the Trustee whenever the Debentures become listed on any securities exchange and of any listing thereof. Section 7.07 Compensation And Indemnity. -------------------------- The Company agrees: (1) to pay to the Trustee from time to time such compensation as shall be agreed in writing between the Company and the Trustee for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); (2) to reimburse the Trustee upon its request for all reasonable expenses, disbursements, and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and advances of its agents and counsel), including all reasonable expenses and advances incurred or made by the Trustee in connection with any Event of Default or any membership on any creditors' committee, except any such expense or advance as may be attributable to its negligence or bad faith; and (3) to indemnify the Trustee, its officers, directors, and shareholders for, and to hold it harmless against, any and all loss, liability, or expense, incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of this trust, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. -28- Before, after, or during an Event of Default, the Trustee shall have a claim and lien prior to the Debentures as to all property and funds held by it hereunder for any amount owing it or any predecessor Trustee pursuant to this Section 7.07, except with respect to funds held in trust for the payment of principal of, premium, if any, or interest on, particular Debentures. The Company's payment obligations pursuant to this Section 7.07 are not subject to Article 10 of this Indenture and shall survive the discharge of this Indenture. When the Trustee renders services or incurs expenses after the occurrence of an Event of Default specified in Section 6.01 hereof, the compensation for services and expenses are intended to constitute expenses of administration under any Bankruptcy Law. Section 7.08 Replacement Of Trustee. ---------------------- The Trustee may resign by so notifying the Company in writing at least 30 days prior to the date of the proposed resignation; provided, however, no such -------- ------- resignation shall be effective until a successor Trustee has accepted its appointment pursuant to this Section 7.08. The Special Representative or the Holders of a majority in aggregate principal amount of the Debentures at the time outstanding may remove the Trustee by so notifying the Trustee in writing and may appoint a successor Trustee, which shall be subject to the consent of the Company unless an Event of Default has occurred and is continuing. The Trustee shall resign if: (1) the Trustee fails to comply with Section 7.10 hereof; (2) the Trustee is adjudged bankrupt or insolvent; (3) a receiver or public officer takes charge of the Trustee or its property; or (4) the Trustee otherwise becomes incapable of acting. If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company shall promptly appoint a successor Trustee. A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon, the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers, and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Debentureholders. Subject to payment of all amounts owing to the Trustee under Section 7.07 hereof and subject further to its lien under Section 7.07 hereof, the retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee. If a successor Trustee does not take office within 30 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company, the Special Representative, or the Holders of a majority in aggregate principal amount of the Debentures at the time outstanding may petition any court of competent jurisdiction for the appointment of a successor Trustee. -29- If the Trustee fails to comply with Section 7.10 hereof, any Debentureholder may petition any court of competent jurisdiction for its removal and the appointment of a successor Trustee. Section 7.09 Successor Trustee By Merger. --------------------------- If the Trustee consolidates with, merges, or converts into, or transfers all or substantially all its corporate trust business or assets (including this Trusteeship) to another corporation, the resulting, surviving or transferee corporation without any further act shall be the successor Trustee. Section 7.10 Eligibility; Disqualification. ----------------------------- The Trustee shall at all times satisfy the requirements of TIA Sections 310(a)(1) and 310(a)(2). The Trustee (or any Affiliate thereof which has unconditionally guaranteed the obligations of the Trustee hereunder) shall have a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition. The Trustee shall comply with TIA Section 310(b). In determining whether the Trustee has conflicting interests as defined in TIA Section 310(b)(l), the provisions contained in the proviso to TIA Section 310(b)(1) shall be deemed incorporated herein. Section 7.11 Preferential Collection Of Claims Against The Company. ----------------------------------------------------- If and when the Trustee shall be or become a creditor of the Company, the Trustee shall be subject to the provisions of the TIA regarding the collection of claims against the Company. ARTICLE 8 SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE OF CERTAIN OBLIGATIONS; UNCLAIMED MONIES Section 8.01 Satisfaction And Discharge Of Indenture. --------------------------------------- The Company shall be deemed to have paid and discharged the entire indebtedness on any series of the Debentures outstanding on the date the Company has irrevocably deposited or caused to be irrevocably deposited with the Trustee or any Paying Agent as trust funds in trust, specifically pledged as security for, and dedicated solely to, the benefit of the Holders (1) cash in an amount, or (2) U.S. Government Obligations, maturing as to principal and interest at such times and in such amounts as will ensure the availability of cash, or (3) a combination thereof, sufficient to pay the principal of, premium, if any, and interest on all Debentures then outstanding, and on such date the provisions of this Indenture with respect to the Debentures shall no longer be in effect (except as to (1) the rights of registration of transfer, substitution, and exchange of Debentures, (2) the replacement of apparently mutilated, defaced, destroyed, lost, or stolen Debentures, (3) the rights of the Holders to receive payments of principal thereof and interest thereon, (4) the rights of the Holders as beneficiaries hereof with respect to the property so deposited with the Trustee payable to all or any of them, (5) the obligation of the Company to maintain an office or -30- agency for payments on and registration of transfer of the Debentures, and (6) the rights, obligations, and immunities of the Trustee hereunder); and the Trustee shall, at the request and expense of the Company, execute proper instruments acknowledging the same; provided that: -------- (A) no Default or Event of Default with respect to the Debentures shall have occurred and be continuing on the date of such deposit or occurs as a result of such deposit; (B) the Company shall have delivered to the Trustee an Officer's Certificate and an Opinion of Counsel, each stating that all conditions precedent relating to the defeasance contemplated by this provision have been complied with; and (C) the Company shall have delivered to the Trustee (i) either a private Internal Revenue Service ruling or an Opinion of Counsel, in either case to the effect that the Holders will not recognize income, gain, or loss for United States federal income tax purposes as a result of such deposit, defeasance, and discharge and will be subject to United States federal income tax on the same amount and in the manner and at the same times as would have been the case if such deposit, defeasance, and discharge had not occurred; and (ii) an Opinion of Counsel to the effect that (a) the deposit shall not result in the Company, the Trustee, or the trust being deemed to be an "investment company" under the Investment Company Act of 1940, as amended, and (b) such deposit creates a valid trust in which such Holders of the Debentures have the sole beneficial ownership interest or that such Holders of the Debentures have a nonavoidable first priority security interest in such trust. Section 8.02 Application By Trustee Of Funds Deposited For Payment Of Debentures. -------------------------------------------------------- Subject to Section 8.04 and Article 10 hereof, all monies deposited with the Trustee pursuant to Section 8.01 hereof shall be held in trust and applied by it to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent), to the Holders for the payment or redemption of which such monies have been deposited with the Trustee, of all sums due and to become due thereon for principal and interest; but such money need not be segregated from other funds except to the extent required by law. Section 8.03 Repayment Of Monies Held By Paying Agent. ---------------------------------------- In connection with the satisfaction and discharge of this Indenture, all monies then held by any Paying Agent under this Indenture shall, upon demand of the Company, be repaid to it or paid to the Trustee, and thereupon such Paying Agent shall be released from all further liability with respect to such monies. -31- Section 8.04 Return Of Monies Held By The Trustee And Paying Agent Unclaimed For Three Years. ----------------------------------------------------- Any monies deposited with or paid to the Trustee or any Paying Agent for the payment of the principal, premium, if any, or interest on, any Debenture and not applied but remaining unclaimed for three years after the date when such principal, premium, if any, or interest shall have become due and payable shall unless otherwise required by mandatory provisions of applicable escheat or abandoned or unclaimed property law, be repaid to the Company by the Trustee or such Paying Agent, and the Holder of such Debenture shall, unless otherwise required by mandatory provisions of applicable escheat or abandoned or unclaimed property laws, thereafter look only to the Company for any payment which such Holder may be entitled to collect, and all liability of the Trustee or any Paying Agent with respect to such monies shall thereupon cease. ARTICLE 9 AMENDMENTS Section 9.01 Without Consent Of Holders. -------------------------- From time to time, when authorized by a resolution of the Board of Directors, the Company and the Trustee, without notice to or the consent of any Debentureholders or the Special Representative issued hereunder, may amend or supplement this Indenture or the Debentures. (1) to cure any ambiguity, defect, or inconsistency; (2) to comply with Article 5 hereof; (3) to provide for uncertificated Debentures in addition to or in place of certificated Debentures; (4) to make any other change that does not adversely affect the rights of any Debentureholder; (5) to comply with any requirement of the SEC in connection with the qualification of this Indenture under the TIA; and (6) to set forth the terms and conditions, which shall not be inconsistent with this Indenture, of the series of Debentures (other than the Series A Debentures) that are to be issued hereunder and the form of Debentures of such series. Section 9.02 With Consent Of Holders. ----------------------- With written consent of the Special Representative or the Holders of at least 66 2/3% in aggregate principal amount of Debentures at the time outstanding and affected by such amendment or waiver, the Company and the Trustee may amend this Indenture or the Debentures or may waive future compliance by the Company with any provisions of this -32- Indenture or the Debentures. However, without the consent of each Debentureholder affected, such an amendment or waiver may not: (1) reduce the principal amount of the Debentures the Holders of which must consent to an amendment of the Indenture or a waiver; (2) change the Stated Maturity of the principal of, or the interest or rate of interest on, the Debentures, change adversely to the Holders the redemption provisions of Article 3 hereof, or impair the right to institute suit for the enforcement of any such payment or make any Debenture payable in money or securities other than that stated in the Debenture; (3) make any change in Article 10 hereof that adversely affects the rights of the Holders of the Debentures or any change to any other section hereof that adversely affects their rights under Article 10 hereof; (4) waive a Default in the payment of the principal of, premium, if any, or interest on, any Debenture; or (5) change Section 6.07 hereof. It shall not be necessary for the consent of the Holders under this Section 9.02 to approve the particular form of any proposed amendment, but it shall be sufficient if such consent approves the substance thereof. If certain Holders agree to defer or waive certain obligations of the Company hereunder with respect to Debentures held by them, such deferral or waiver shall not affect the rights of any other Holder to receive the payment or performance required hereunder in a timely manner. After an amendment or waiver under this Section 9.02 becomes effective, the Company shall mail to the Special Representative and to each Holder a notice briefly describing the amendment or waiver. Any failure of the Company to mail such notices, or any defect therein, shall not, however, in any way impair or affect the validity of such amendment or waiver. Section 9.03 Compliance With Trust Indenture Act. ----------------------------------- Every supplemental indenture executed pursuant to this Article 9 shall comply with the TIA. Section 9.04 Revocation And Effect Of Consents, Waivers And Actions. ------------------------------------------------------ Until an amendment, waiver, or other action by Holders becomes effective, a consent to it or any other action by a Holder of a Debenture hereunder is a continuing consent by the Holder and every subsequent Holder of that Debenture or portion of the Debenture that evidences the same obligation as the consenting Holder's Debenture, even if notation of the consent, waiver, or action is not made on the Debenture. However, any such Holder or subsequent Holder may revoke the consent, waiver, or action as to such Holder's Debenture -33- or portion of the Debenture if the Trustee receives the notice of revocation before the consent of the requisite aggregate principal amount of the Debentures then outstanding has been obtained and not revoked. After an amendment, waiver, or action becomes effective, it shall bind every Debentureholder, except as provided in Section 9.02 hereof. The Company may, but shall not be obligated to, fix a Record Date for the purpose of determining the Holders entitled to consent to any amendment or waiver. If a Record Date is fixed, then, notwithstanding the first two sentences of the immediately preceding paragraph, those Persons who were Holders at such Record Date or their duly designated proxies, and only those Persons, shall be entitled to consent to such amendment, supplement, or waiver, or to revoke any consent previously given, whether or not such Persons continue to be Holders after such Record Date. No such consent shall be valid or effective for more than 90 days after such Record Date. Section 9.05 Notation On Or Exchange Of Debentures. ------------------------------------- Debentures authenticated and made available for delivery after the execution of any supplemental indenture pursuant to this Article 9 may, and shall, if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Debentures so modified as to conform, in the opinion of the Trustee and the Board of Directors, to any such supplemental indenture may be prepared and executed by the Company and authenticated and made available for delivery by the Trustee in exchange for outstanding Debentures. Section 9.06 Trustee To Sign Supplemental Indentures. --------------------------------------- The Trustee shall sign any supplemental indenture authorized pursuant to this Article 9 if the supplemental indenture does not adversely affect the rights, duties, liabilities, or immunities of the Trustee. If it does, the Trustee may, but need not, sign it. In signing such amendment the Trustee shall be entitled to receive, and shall be fully protected in relying upon, an Officer's Certificate and Opinion of Counsel stating that such supplemental indenture is authorized or permitted by this Indenture. Section 9.07 Effect Of Supplemental Indentures. --------------------------------- Upon the execution of any supplemental indenture under this Article 9, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes and every Holder of Debentures theretofore or thereafter authenticated and made available for delivery hereunder shall be bound thereby. ARTICLE 10 SUBORDINATION Section 10.01 Debentures Subordinated To Senior Indebtedness. ---------------------------------------------- Notwithstanding the provisions of Section 6.01 hereof or any other provision herein or in the Debentures, the Company and the Trustee or Holder by his acceptance thereof (a) -34- covenant and agree that all payments by the Company of the principal of, premium, if any, and interest on the Debentures shall be subordinated in accordance with the provisions of this Article 10 to the prior payment in full, in cash or cash equivalents, of all amounts payable on, under, or in connection with present or future Senior Indebtedness, and (b) acknowledge that holders of Senior Indebtedness may rely on this Article 10. Section 10.02 Priority And Payment Of Proceeds In Certain Events; Remedies Standstill. ------------------------------------------------------------ (1) Upon any payment or distribution of assets or securities of the Company, as the case may be, of any kind or character, whether in cash, property, or securities, upon any dissolution or winding up or total or partial liquidation or reorganization of the Company, whether voluntary or involuntary, or in bankruptcy, insolvency, receivership, or other proceedings, all amounts payable on, under, or in connection with Senior Indebtedness (including any interest accruing on such Senior Indebtedness subsequent to the commencement of a bankruptcy, insolvency, or similar proceeding) shall first be paid in full in cash, or payment provided for in cash or cash equivalents, before the Holders or the Trustee on behalf of the Holders shall be entitled to receive from the Company any payment of principal of or interest on or any other amounts in respect of the Debentures or distribution of any assets or securities. (2) No direct or indirect payment by or on behalf of the Company of principal of or interest on the Debentures, whether pursuant to the terms of the Debentures or upon acceleration or otherwise, shall be made if, at the time of such payment, there exists (a) a default in the payment of all or any portion of any Senior Indebtedness, and the Trustee has received written notice thereof from the Company, one or more holders of Senior Indebtedness, or from any trustee, representative, or agent therefor, or (b) any other default affecting Senior Indebtedness permitting its acceleration, as the result of which the maturity of Senior Indebtedness has been accelerated, and the Trustee has received written notice from any trustee, representative, or agent for the holders of the Senior Indebtedness or the holders of at least a majority in principal amount of the Senior Indebtedness then outstanding of such default and acceleration, and such default shall not have been cured or waived by or on behalf of the holders of such Senior Indebtedness. (3) If, notwithstanding the foregoing provision prohibiting such payment or distribution, the Trustee or any Holder shall have received any payment on account of the principal of or interest on the Debentures (other than as permitted by subsections (1) and (2) of this Section 10.02) when such payment is prohibited by this Section 10.02 and before all amounts payable on, under, or in connection with Senior Indebtedness are paid in full in cash or cash equivalents, then and in such event (subject to the provisions of Section 10.08 hereof) such payment or distribution shall be received and held in trust for the holders of Senior Indebtedness and shall be paid over or delivered first to the holders of the Senior Indebtedness remaining unpaid to the extent necessary to pay such Senior Indebtedness in full in cash or cash equivalents. (4) Upon any payment or distribution of assets or securities referred to in this Article 10, the Trustee and the Holders shall be entitled to rely upon any order or decree of a court of competent jurisdiction in which such dissolution, winding up, liquidation, or reorganization proceedings are pending, and upon a certificate of the receiver, trustee in -35- bankruptcy, liquidating trustee, agent, or other Person making any such payment or distribution, delivered to the Trustee for the purpose of ascertaining the Persons entitled to participate in such distribution, the holders of Senior Indebtedness and other Indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon, and all other facts pertinent thereto or to this Article 10. Section 10.03 Payments Which May Be Made Prior To Notice. ------------------------------------------ Nothing in this Article 10 or elsewhere in this Indenture shall prevent (1) the Company, except under the conditions described in Section 10.02 hereof, from making payments of principal of and interest on the Debentures or from depositing with the Trustee any monies for such payments, or (2) the application by the Trustee of any monies deposited with it for the purpose of making such payments of principal of and interest on the Debentures, to the Holders entitled thereto, unless at least one day prior to the date when such payment would otherwise (except for the prohibitions contained in Section 10.02 hereof) become due and payable, the Trustee shall have received the written notice provided for in Section 10.02(2) hereof. Section 10.04 Rights Of Holders Of Senior Indebtedness Not To Be Impaired. ----------------------------------------------------------- No right of any present or future holder of any Senior Indebtedness to enforce subordination as herein provided shall at any time or in any way be prejudiced or impaired by any act or failure to act in good faith by any such holder, or by any noncompliance by the Company with the terms and provisions and covenants herein regardless of any knowledge thereof any such holder may have or otherwise be charged with. The provisions of this Article 10 are intended to be for the benefit of, and shall be enforceable directly by, the holders of Senior Indebtedness. Notwithstanding anything to the contrary in this Article 10, to the extent any Holders or the Trustee have paid over or delivered to any holder of Senior Indebtedness any payment or distribution received on account of the principal of or interest on the Debentures to which any other holder of Senior Indebtedness shall be entitled to share in accordance with Section 10.02 hereof, no holder of Senior Indebtedness shall have a claim or right against any Debentureholders or the Trustee with respect to any such payment or distribution or as a result of the failure to make payments or distributions to such other holder of Senior Indebtedness. Section 10.05 Trustee May Take Action To Effectuate Subordination. --------------------------------------------------- Each Debentureholder by his acceptance thereof authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to effectuate, as between the holders of Senior Indebtedness and such Debentureholders, the subordination as provided in this Article 10 and appoints the Trustee as such Debentureholder's attorney-in-fact for any and all such purposes. -36- Section 10.06 Subrogation. ----------- Upon the payment in full, in cash or cash equivalents, of all Senior Indebtedness, any Debentureholder shall be subrogated to the rights of the holders of such Senior Indebtedness to receive payments or distributions of assets of the Company made on such Senior Indebtedness until all accrued interest on the principal of the Debentures shall be paid in full; and for the purposes of such subrogation, no payments or distributions to holders of such Senior Indebtedness of any cash, property, or securities to which such Debentureholders would be entitled except for this Article 10, and no payment pursuant to this Article 10 to holders of such Senior Indebtedness by such Debentureholders shall, as between the Company, its creditors other than holders of such Senior Indebtedness, and such Debentureholders, be deemed to be a payment by the Company to or on account of such Senior Indebtedness, it being understood that the provisions of this Article 10 are solely for the purpose of defining the relative rights of the holders of such Senior Indebtedness, on the one hand, and such Debentureholders, on the other hand. If any payment or distribution to which such Debentureholders would otherwise have been entitled but for the provisions of this Article 10 shall have been applied, pursuant to this Article 10, to the payment of any Senior Indebtedness, then and in such case, such Debentureholders shall be entitled to receive from the holders of such Senior Indebtedness at the time outstanding any payments or distributions received by such holders of Senior Indebtedness in excess of the amount sufficient to pay, in cash or cash equivalents, all such Senior Indebtedness in full. Section 10.07 Obligations Of Company Unconditional; Reinstatement. --------------------------------------------------- Nothing in this Article 10, or elsewhere in this Indenture or in any Debenture, is intended to or shall impair, as between the Company and Debentureholders, the obligations of the Company, which are absolute and unconditional, to pay to such Debentureholders the principal of and interest on the Debentures as and when the same shall become due and payable in accordance with their terms, or is intended to or shall affect the relative rights of such Debentureholders and creditors of the Company other than the holders of the Senior Indebtedness, nor shall anything herein or therein prevent the Trustee, the Special Representative, or any Debentureholder from exercising all remedies otherwise permitted by applicable law upon Default under this Indenture, subject to the rights, if any, under this Article 10 of the holders of such Senior Indebtedness in respect of cash, property, or securities of the Company received upon the exercise of any such remedy. The failure to make a scheduled payment of principal of, or interest on, the Debentures by reason of Section 10.02 shall not be construed as preventing the occurrence of an Event of Default under Section 6.01 hereof; provided, -------- however, that if (i) the conditions preventing the making of such payment no - ------- longer exist, and (ii) such Debentureholders are made whole with respect to such omitted payments, the Event of Default relating thereto (including any failure to pay any accelerated amounts) shall be automatically waived, and the provisions of the Indenture shall be reinstated as if no such Event of Default had occurred. -37- Section 10.08 Trustee Entitled To Assume Payments Not Prohibited In Absence Of Notice. ----------------------------------------------------- The Trustee or Paying Agent shall not be charged with the knowledge of the existence of any facts which would prohibit the making of any payment to or by the Trustee or Paying Agent, unless and until the Trustee or Paying Agent shall have received written notice thereof from the Company or one or more holders of Senior Indebtedness or from any trustee or agent therefor or unless the Trustee or Paying Agent otherwise had actual knowledge thereof; and, prior to the receipt of any such written notice or actual knowledge, the Trustee or Paying Agent may conclusively assume that no such facts exist. Unless at least one day prior to the date when by the terms of this Indenture any monies are to be deposited by the Company with the Trustee or any Paying Agent for any purpose (including, without limitation, the payment of the principal of or the interest on any Debenture), the Trustee or Paying Agent shall, except where no notice is necessary, have received with respect to such monies the notice provided for in the preceding sentence, the Trustee or Paying Agent shall have full power and authority to receive and apply such monies to the purpose for which they were received. Neither of them shall be affected by any notice to the contrary, which may be received by either on or after such date. The foregoing shall not apply to the Paying Agent if the Company is acting as Paying Agent. Nothing in this Section 10.08 shall limit the right of the holders of Senior Indebtedness to recover payments as contemplated by Section 10.02 hereof. The Trustee or Paying Agent shall be entitled to rely on the delivery to it of a written notice by a Person representing himself, herself or itself to be a holder of such Senior Indebtedness (or a trustee on behalf of, or other representative of, such holder) to establish that such notice has been given by a holder of such Senior Indebtedness or a trustee or representative on behalf of any such holder. The Trustee shall not be deemed to have any duty to the holders of Senior Indebtedness. Section 10.09 Right Of Trustee To Hold Senior Indebtedness. -------------------------------------------- The Trustee and any Paying Agent shall be entitled to all of the rights set forth in this Article 10 in respect of any Senior Indebtedness at any time held by them to the same extent as any other holder of such Senior Indebtedness, and nothing in this Indenture shall be construed to deprive the Trustee or any Paying Agent of any of its rights as such holder. ARTICLE 11 MISCELLANEOUS Section 11.01 Trust Indenture Act Controls. ---------------------------- If any provision of this Indenture limits, qualifies, or conflicts with the duties imposed by operation of subsection (c) of Section 318 of the TIA, the imposed duties shall control. The provisions of Sections 310 to 317, inclusive, of the TIA that impose duties on any Person (including provisions automatically deemed included in an indenture unless the indenture provides that such provisions are excluded) are a part of and govern this -38- Indenture, except as, and to the extent, they are expressly excluded from this Indenture, as permitted by the TIA. Section 11.02 Notices. ------- Any notice or communication shall be in writing and delivered in person or mailed by first-class mail, postage prepaid, addressed as follows: if to the Company: The Connecticut Light and Power Company Selden Street Berlin, Connecticut 06037 Attention: _______________________ if to the Trustee: Bankers Trust Company ---------------------------- ---------------------------- ---------------------------- The Company or the Trustee, by giving notice to the other, may designate additional or different addresses for subsequent notices of communications. The Company shall notify the holder, if any, of Senior Indebtedness of any such additional or different addresses of which the Company receives notice from the Trustee. Any notice or communication given to a Debentureholder other than CL&P Capital shall be mailed to the Debentureholder at the Debentureholder's address as it appears on the Register of the Registrar and shall be sufficiently given if mailed within the time prescribed. Failure to mail a notice or communication to a Debentureholder or any defect in it shall not affect its sufficiency with respect to other Debentureholders. If a notice or communication is mailed in the manner provided above, it is duly given, whether or not received by the addressee. If the Company mails a notice or communication to the Debentureholders, it shall mail a copy to the Trustee and each Registrar, Paying Agent, or co- Registrar. Section 11.03 Communication By Holders With Other Holders. ------------------------------------------- Debentureholders may communicate, pursuant to TIA Section 312(b), with other Debentureholders with respect to their rights under this Indenture or the Debentures. The Trustee, the Company, the Registrar, the Paying Agent, and anyone else shall have the protection afforded to the Trustee in TIA Section 312(c). -39- Section 11.04 Certificate And Opinion As To Conditions Precedent. -------------------------------------------------- Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee: (1) an Officer's Certificate (complying with Section 11.05 hereof) stating that, in the opinion of such Officer, all conditions precedent to the taking of such action have been complied with; and (2) if appropriate, an Opinion of Counsel (complying with Section 11.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent to the taking of such action have been complied with. Section 11.05 Statements Required In Certificate Or Opinion. --------------------------------------------- Each Officer's Certificate and Opinion of Counsel with respect to compliance with a covenant or condition provided for in this Indenture shall include: (1) a statement that each Person making such Officer's Certificate or Opinion of Counsel has read such covenant or condition; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such Officer's Certificate or Opinion of Counsel are based; (3) a statement that, in the opinion of each such Person, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement that, in the opinion of such Person, such covenant or condition has been complied with; provided, however, that with respect to matter -------- ------- of fact not involving any legal conclusion, an Opinion of Counsel may rely on an Officer's Certificate or certificates of public officials. Section 11.06 Severability Clause. ------------------- If any provision in this Indenture or in the Debentures shall be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 11.07 Rules By Trustee, Paying Agent And Registrar. -------------------------------------------- The Trustee may make reasonable rules for action by or a meeting of Debentureholders. The Registrar and Paying Agent may make reasonable rules for their functions. -40- Section 11.08 Legal Holidays. -------------- A "Legal Holiday" is any day other than a Business Day. If any specified ------------- date (including a date for giving notice) is a Legal Holiday, the action to be taken on such date shall be taken on the next succeeding day that is not a Legal Holiday, and if such action is a payment in respect of the Debentures, no principal or interest installment shall accrue for the intervening period; except that if any interest payment is due on a Legal Holiday and the next succeeding day is in the next succeeding calendar year, such payment shall be made on the Business Day immediately preceding such Legal Holiday. Section 11.09 Governing Law. ------------- This Indenture and the Debentures shall be governed by and construed in accordance with the laws of the State of Connecticut as applied to contracts made and performed within the State of Connecticut, without regard to its principles of conflicts of laws. Section 11.10 No Recourse Against Others. -------------------------- No director, officer, employee, or stockholder, as such, of the Company shall have any liability for any obligations of the Company under the Debentures or this Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. By accepting a Debenture, each Debentureholder shall waive and release all such liability. The waiver and release shall be part of the consideration for the issue of the Debentures. Section 11.11 Successors. ---------- All agreements of the Company in this Indenture and the Debentures shall bind its successors and assigns. All agreements of the Trustee in this Indenture shall bind its successors and assigns. Section 11.12 Multiple Original Copies Of This Indenture. ------------------------------------------ The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. Any signed copy shall be sufficient proof of this Indenture. Section 11.13 No Adverse Interpretation Of Other Agreements. --------------------------------------------- This Indenture may not be used to interpret another indenture, loan, or debt agreement of the Company or any Subsidiary. Any such indenture, loan, or debt agreement may not be used to interpret this Indenture. Section 11.14 Table Of Contents; Headings, Etc. -------------------------------- The Table of Contents, Cross-Reference Table, and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof, and shall in no way modify or restrict any of the terms or provisions hereof. -41- Section 11.15 Benefits Of The Indenture. ------------------------- Except as expressly provided in Article 10 hereof, nothing in this Indenture or in the Debentures, express or implied, shall give to any person, other than the parties hereto and their successors hereunder, the Holders, and the Special Representative, any benefit or any legal or equitable right, remedy, or claim under this Indenture. -42- SIGNATURES ---------- IN WITNESS WHEREOF, the undersigned, being duly authorized, have executed this Indenture on behalf of the respective parties hereto as of the date first above written. THE CONNECTICUT LIGHT AND POWER COMPANY By: ---------------------------- Name: Title: BANKERS TRUST COMPANY, as Trustee By: ---------------------------- Name: Title: CL&P CAPITAL, L.P. By: The Connecticut Light and Power Company, Its General Partner By: --------------------------------- Solely for the purposes stated in the recitals hereto. EXHIBIT A [FORM OF DEBENTURE] __% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES, SERIES A DUE [***20__***] [STATED MATURITY NOT TO EXCEED 49 YEARS FROM DATE OF ISSUANCE] No. _________ $_______________ The Connecticut Light and Power Company, a Connecticut corporation (the "Company," which term includes any successor corporation under the Indenture - -------- hereinafter referred to), for value received, hereby promises to pay to or registered assigns, the principal sum of - --------------------- Dollars on , (subject to extension at the - ------------------ ------------- ----- option of the Company, as set forth below) and to pay interest on said principal sum from , 199 or from the most recent interest payment date (each ------------- - such date, an "Interest Payment Date") to which interest has been paid or duly --------------------- provided for, monthly in arrears on the last day of each calendar month of each year commencing , 199 at the rate of % per annum plus ------------ - ------ Additional Interest, if any, until the principal hereof shall have become due and payable, and on any overdue principal and premium, if any, and (to the extent that payment of such interest is permitted by applicable law) on any overdue installment of interest at the same rate per annum. The amount of interest payable on any Interest Payment Date shall be computed on the basis of a 360-day year composed of twelve 30-day months. In the event that any date on which interest is payable on this Debenture is not a Business Day, then payment of interest payable on such date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay), except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date. The interest installment so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the person in whose name this Debenture is registered at the close of business on the Regular Record Date for such interest installment, which shall be the close of business on the Business Day next preceding such Interest Payment Date. Any such interest installment not punctually paid or duly provided for shall forthwith cease to be payable to the registered holders on such Regular Record Date, and may be paid to the person in whose name this Debenture is registered at the close of business on a special Record Date to be fixed by the Trustee for the payment of such defaulted interest, notice whereof shall be given to the registered holders of this series of Debentures not less than 10 days prior to such special Record Date, as more fully provided in the Indenture hereinafter referred to. The principal of, premium, if any, and the interest on, this Debenture shall be payable at the office or agency of the Company maintained for that purpose in Berlin, Connecticut in any coin or currency of the United States of America which at the time of payment is legal tender for payment of public and private debts; provided, however, that payment -------- ------- of interest may be made at the option of the Company by check mailed to the registered holder at such address as shall appear in the Register. Notwithstanding the foregoing, so long as the holder of this Debenture is CL&P Capital, the payment of the principal of, premium, if any, and interest (including Additional Interest, if any) pursuant to this Debenture will be made at such place and to such account as may be designated by CL&P Capital. -A-2- The indebtedness evidenced by this Debenture is, to the extent provided in the Indenture hereinafter referred to, subordinate and subject in right of payment to the prior payment in full of all Senior Indebtedness, and this Debenture is issued subject to the provisions of such Indenture with respect thereto. Each Holder of this Debenture, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee on as such Holder's behalf to take such action as may be necessary or appropriate to acknowledge or effectuate the subordination so provided, and (c) appoints the Trustee as such Holder's attorney-in-fact for any and all such purposes. Each Holder hereof, by such Holder's acceptance hereof, hereby waives all notice of the acceptance of the subordination provisions contained herein and in the Indenture by each holder of Senior Indebtedness, whether now outstanding or hereafter incurred, and waives reliance by each such Holder upon said provisions. This Debenture is one of a duly authorized series of Debentures of the Company (herein sometimes referred to as the "Series A Debentures"), issued ------------------- under and pursuant to, and limited in aggregate principal amount as specified in, an Indenture dated as of ________, 199__ (the "Indenture"), executed and --------- delivered between the Company and Bankers Trust Company, as trustee (the "Trustee"), to which reference is made to the Indenture for a description of the - -------- rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company, and the holders of the Series A Debentures and any other series of debentures issued thereunder (collectively with the Series A Debentures, the "Debentures"). By the terms of the Indenture, Debentures are ---------- issuable in series which may vary as to amount, date of maturity, rate of interest, and in other respects as in the Indenture provided. The Series A Debentures are subject to redemption prior to maturity at the option of the Company at the price of 100% of the principal amount thereof plus accrued interest to the redemption date in whole or in part (i) from time to time on or after ________ __, ____, (ii) from time to time upon or after the dissolution of CL&P Capital, or (iii) from time to time if the Company shall be required to pay Additional Interest thereon. The Series A Debentures are subject to mandatory redemption prior to maturity at the price of 100% of the principal amount thereof plus accrued interest to the redemption date in whole or in part upon a redemption of the Series A Preferred Securities (as defined in the Indenture), but if in part, in an aggregate principal amount equal to the aggregate stated liquidation preference of the Series A Preferred Securities redeemed. In the event of redemption of this Debenture in part only, a new Debenture or Debentures of this series for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof. In case an Event of Default shall have occurred and be continuing, the principal of all of the Debentures may be declared, and upon such declaration shall become, due and payable, in the manner, with the effect, and subject to the conditions provided in the Indenture. The Indenture contains provisions for defeasance at any time of the entire indebtedness of this Debenture upon compliance by the Company with certain conditions set forth therein. -A-3- Subject to certain exceptions in the Indenture which require the consent of every Holder, (i) the Indenture or the Series A Debentures may be amended with the written consent of the Holders of 66 2/3% in aggregate principal amount of the Series A Debentures at the time outstanding, and (ii) certain defaults or noncompliance with certain provisions may be waived by the written consent of the Holders of 66 2/3% in aggregate principal amount of the Series A Debentures at the time outstanding; provided, however, that if any other series of the -------- ------- Debentures is at the time outstanding, then such written consents shall be by Holders of 66 2/3% in aggregate principal amount of all Debentures at the time outstanding and affected by such amendment or waiver. Subject to certain exceptions in the Indenture, without the consent of any Debentureholder, the Company and the Trustee may amend the Indenture or the Debentures to cure any ambiguity, defect, or inconsistency, to bind a successor to the Company to the obligations of the Indenture, to provide for uncertificated Debentures in addition to certificated Debentures, to comply with any requirements of the Securities and Exchange Commission in connection with the qualification of the Indenture under the TIA, or to make any change that does not adversely affect the rights of any Debentureholder. Amendments bind all Holders and subsequent Holders. No reference herein to the Indenture and no provision of this Debenture or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and premium, if any, and interest on this Debenture at the time and place and at the rate and in the money herein prescribed. The Company shall have the right at any time during the term of the Series A Debentures, from time to time to extend the interest payment period of such Debentures to up to 60 months (the "Extension Period"), provided that such ---------------- -------- Extension Period may not extend beyond the stated maturity date or the date of redemption of the Debentures, and provided further that at the end of each -------- ------- Extension Period the Company shall pay all interest then accrued and unpaid (together with interest thereon compounded monthly at the rate specified for the applicable series of Debentures, to the extent permitted by applicable law). During an Extension Period the Company shall not declare or pay any dividend on, redeem, or purchase any of its capital stock. Prior to the termination of any Extension Period, the Company may shorten or further extend the interest payment period, provided that such Extension Period together with all such further -------- extensions thereof shall not exceed 60 consecutive months. At the termination of any such Extension Period and upon the payment of all accrued and unpaid interest and any additional amounts then due, the Company may select a new Extension Period. As provided in the Indenture and subject to certain limitations therein set forth, this Debenture is transferable by the registered holder hereof on the Debenture Register of the Company, upon surrender of this Debenture for registration of transfer at the office or agency of the Trustee accompanied by a written instrument or instruments of transfer in form satisfactory to the Company or the Trustee duly executed by the registered holder hereof or his attorney duly authorized in writing, and thereupon one or more new Debentures of authorized denominations and for the same aggregate principal amount and series will be issued to the designated transferee or transferees. No service charge will be made for any such transfer, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in relation thereto. -A-4- Prior to presentment for registration of transfer of this Debenture, the Company, the Trustee, any paying agent, and any Registrar may deem and treat the registered holder hereof as the absolute owner hereof (whether or not this Debenture shall be overdue and notwithstanding any notice of ownership or writing hereon made by anyone other than the Registrar) for the purpose of receiving payment of or on account of the principal hereof and premium, if any, and interest due hereon and for all other purposes, and neither the Company nor the Trustee nor any payment agent nor any Registrar shall be affected by any notice to the contrary. No recourse shall be had for the payment of the principal of or the interest on this Debenture, or for any claim based hereon, or otherwise in respect hereof, or based on or in respect of the Indenture, against any incorporator, stockholder, officer or director, past, present or future, as such, of the Company or of any predecessor or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issuance hereof, expressly waived and released. Debentures of this series so issued are issuable only in registered form without coupons in denominations of $25 and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, Debentures of this series are exchangeable for a like aggregate principal amount of Debentures of this series of a different authorized denomination, as requested by the Holder surrendering the same. All terms used in this Debenture which are defined in the Indenture shall have the meanings assigned to them in the Indenture. This Debenture shall not be valid until an authorized officer of the Trustee manually signs the Trustee's Certificate of Authentication below. -A-5- IN WITNESS WHEREOF, the Company has caused this Debenture to be signed manually or by facsimile by its duly authorized officers and a facsimile of its corporate seal to be affixed hereto or imprinted hereon. THE CONNECTICUT LIGHT AND POWER COMPANY By: ---------------------------- Name: Title: Dated: --------------- TRUSTEE'S CERTIFICATE OF AUTHENTICATION This Is One Of The Debentures Referred To In The Within-mentioned Indenture. BANKERS TRUST COMPANY By: --------------------------- Authorized Signatory ASSIGNMENT FORM To assign this Debenture, fill in the form below: (I) or (we) assign and transfer this Debenture to: - ------------------------------------------------------------- (Insert assignee's social security or tax I.D. number) - ------------------------------------------------------------- (Print or type assignee's name, address, and zip code) and irrevocably appoint agent to transfer this --------------------------------- Debenture on the books of the Company. The agent may substitute another to act for him. Dated: Signature: ---------------- --------------------------------------- (Sign exactly as your name appears on this Debenture) Signature Guaranty: ------------------------------------------ EX-4.B 4 LIMITED PARTNERSHIP AGREEMENT/CLP&P CAPITAL _________________________________________________________________ _________________________________________________________________ __________________________________________ AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT OF CL&P CAPITAL, L.P. Dated as of ________ __, 199__ __________________________________________ _________________________________________________________________ _________________________________________________________________ TABLE OF CONTENTS -----------------
PAGE ---- ARTICLE I - DEFINITIONS...................................................... 1 ARTICLE II - CONTINUATION; NAME; PURPOSES; TERM; ETC......................... 6 Section 2.01. Formation............................................ 6 Section 2.02. Name, Place of Business and Registered Agent......... 6 Section 2.03. Purposes............................................. 6 Section 2.04. Term................................................. 6 Section 2.05. Qualification in Other Jurisdictions................. 6 Section 2.06. Admission of Preferred Partners...................... 7 Section 2.07. Records.............................................. 7 Section 2.08. Withdrawal of Class A Limited Partner................ 7 ARTICLE III - CAPITAL CONTRIBUTIONS.......................................... 7 Section 3.01. Capital Contributions................................ 7 Section 3.02. Additional Capital Contributions..................... 7 Section 3.03. No Interest or Withdrawals........................... 7 Section 3.04. Minimum Capital Account Balance of General Partner... 7 Section 3.05. Partnership Interests................................ 8 Section 3.06. Interests............................................ 8 ARTICLE IV - CAPITAL ACCOUNTS................................................ 8 Section 4.01. Capital Accounts..................................... 8 Section 4.02. Compliance with Treasury Regulations................. 8 ARTICLE V - ALLOCATIONS...................................................... 8 Section 5.01. Profits and Losses................................... 8 Section 5.02. Allocation Rules..................................... 9 Section 5.03. Adjustments to Reflect Changes in Interests.......... 9 Section 5.04. Tax Allocations...................................... 9 Section 5.05. Qualified Income Offset.............................. 9 Section 5.07. Minimum Allocations to General Partner............... 10 Section 5.08. Taxpayer Information................................. 10 ARTICLE VI - DISTRIBUTIONS................................................... 10 Section 6.01. Distributions........................................ 10 Section 6.02. Certain Distributions Prohibited..................... 10 ARTICLE VII - ACCOUNTING MATTERS; BANKING.................................... 11 Section 7.01. Fiscal Year.......................................... 11 Section 7.02. Certain Accounting Matters........................... 11 Section 7.03. Banking.............................................. 12 Section 7.04. Right to Rely on Authority of General Partner........ 12 Section 7.05. Tax Matters Partner.................................. 12 ARTICLE VIII - MANAGEMENT.................................................... 12 Section 8.01. Management........................................... 12 Section 8.02. Fiduciary Duty....................................... 13
-2- Section 8.03. Specific Obligations of the General Partner.......... 14 Section 8.04. Powers of the General Partner........................ 14 Section 8.05. Independent Affairs.................................. 15 Section 8.06. Meetings of the Partners............................. 15 Section 8.07. Net Worth of the General Partner..................... 16 Section 8.08. Restrictions on General Partner...................... 16 ARTICLE IX - LIABILITY AND INDEMNIFICATION................................... 17 Section 9.01. Partnership Expenses and Liabilities................. 17 Section 9.02. No Liability......................................... 17 Section 9.03. Indemnification...................................... 17 ARTICLE X - WITHDRAWAL; TRANSFER RESTRICTIONS................................ 18 Section 10.01. Transfer by General Partner; Admission of Substituted General Partner...................................... 18 Section 10.02. Withdrawal of Limited Partners....................... 18 ARTICLE XI - DISSOLUTION OF THE PARTNERSHIP.................................. 19 Section 11.01. No Dissolution....................................... 19 Section 11.02. Events Causing Dissolution........................... 19 Section 11.03. Notice of Dissolution................................ 19 ARTICLE XII - LIQUIDATION OF PARTNERSHIP INTERESTS........................... 20 Section 12.01. Liquidation.......................................... 20 Section 12.02. Termination.......................................... 20 Section 12.03. Duty of Care......................................... 20 Section 12.04. No Liability for Return of Capital................... 20 ARTICLE XIII - PREFERRED PARTNER INTERESTS................................... 21 Section 13.01. Preferred Partner Interests.......................... 21 Section 13.02. Terms of All Preferred Partner Interests............. 23 ARTICLE XIV - TRANSFERS...................................................... 28 Section 14.01. Transfers of Preferred Partner Interests............. 28 Section 14.02. Transfer of Certificates............................. 28 Section 14.03. Persons Deemed Preferred Partners.................... 29 Section 14.04. Book Entry Interests................................. 29 Section 14.05. Notices to Clearing Agency........................... 30 Section 14.06. Definitive Certificates.............................. 30 ARTICLE XV - GENERAL......................................................... 31 Section 15.01. Power of Attorney.................................... 31 Section 15.02. Waiver of Partition.................................. 31 Section 15.03. Notices.............................................. 31 Section 15.04. Entire Agreement..................................... 32 Section 15.05. Waivers.............................................. 32 Section 15.06. Headings............................................. 32 Section 15.07. Separability......................................... 32 Section 15.08. Contract Construction................................ 32
-3- Section 15.09. Counterparts......................................... 32 Section 15.10. Benefit.............................................. 32 Section 15.11. Further Actions...................................... 33 Section 15.12. Governing Law........................................ 33 Section 15.13. Amendments........................................... 33 SIGNATURES................................................................... 34
Exhibit A Form of Certificate AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT OF CL&P CAPITAL, L.P. ------------------ This AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT, dated as of _________, 199__, of CL&P Capital, L.P., a Delaware limited partnership (the "Partnership"), is made by and among The Connecticut Light and Power Company - ------------ ("CL&P"), as general partner of the Partnership, Northeast Utilities Service - ------ Company ("NUSCO") as Class A Limited Partner, and the Persons (as defined below) ----- who become limited partners of the Partnership in accordance with the provisions hereof. WHEREAS, CL&P and NUSCO have heretofore formed a limited partnership pursuant to the Delaware Act (as defined below) by filing a Certificate of Limited Partnership (as defined below) with the Secretary of State of the State of Delaware on __________ __, 199__, and entering into a Limited Partnership Agreement of the Partnership dated as of__________ __, 199__ (the "Limited ------- Partnership Agreement"); - --------------------- WHEREAS, the parties hereto desire to continue the Partnership as a limited partnership under the Delaware Act and to amend and restate the Limited Partnership Agreement in its entirety. NOW, THEREFORE, the parties hereto, intending to be legally bound hereby, agree to amend and restate the Limited Partnership Agreement in its entirety as follows: ARTICLE I DEFINITIONS ----------- For purposes of this Agreement, each of the following terms shall have the meaning set forth below (such meaning to be equally applicable to both singular and plural forms of the terms so defined). "Action" shall have the meaning set forth in Section 13.01(b). ------ "Affiliate" shall mean, with respect to the Person to which it refers, a --------- Person that directly or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, such subject Person. "Agreement" shall mean this Amended and Restated Limited Partnership --------- Agreement, as amended, modified, supplemented, or restated from time to time, including, without limitation, by any Action establishing a series of Preferred Partner Interests. "Book Entry Interests" shall mean a beneficial interest in the -------------------- Certificates, ownership and transfers of which shall be made through book entries by a Clearing Agency as described in Section 14.04. "Business Day" shall mean any day that is not a Saturday, a Sunday, or a ------------ day on which banking institutions in The City of New York, the State of Connecticut, or the State of Delaware are authorized or required to close. -2- "Capital Account" shall have the meaning set forth in Section 4.01. --------------- "Certificate" shall mean a certificate substantially in the form attached ----------- hereto as Exhibit A, evidencing a Preferred Partner Interest. "Certificate of Limited Partnership" shall mean the Certificate of Limited ---------------------------------- Partnership of the Partnership and any and all amendments thereto and restatements thereof filed with the Secretary of State of the State of Delaware. "Change in 1940 Act Law" shall mean the occurrence of a change, effective ---------------------- on or after the date of issuance of one or more series of Preferred Partner Interests, in law or regulation or a change in official interpretation of law or regulation by any legislative body, court, governmental agency, or regulatory authority to the effect that the Partnership is or will be considered an "investment company" which is required to be registered under the 1940 Act. "Class A Limited Partner" shall mean NUSCO, in its capacity as a limited ----------------------- partner of the Partnership. "Clearing Agency" shall mean an organization registered as a "Clearing --------------- Agency" pursuant to Section 17A of the Exchange Act. "Clearing Agency Participant" shall mean a broker dealer, bank, other --------------------------- financial institution, or other Person for whom from time to time a Clearing Agency effects book entry transfers and pledges of securities deposited with the Clearing Agency. "CL&P" shall mean The Connecticut Light and Power Company and its ---- successors. "Code" shall mean the United States Internal Revenue Code of 1986 and ---- (unless the context requires otherwise) the rules and regulations promulgated thereunder, as amended from time to time. "Commission" shall mean the Securities and Exchange Commission. ---------- "Covered Person" shall mean any Partner, the Special Representative, or any -------------- Affiliate thereof, or any officers, directors, shareholders, partners, members, employees, representatives or agents of a Partner, the Special Representative or their respective Affiliates, or any employee or agent of the Partnership or its Affiliates. "Definitive Certificate" shall have the meaning set forth in Section 14.04. ---------------------- "Delaware Act" shall mean the Delaware Revised Uniform Limited Partnership ------------ Act, 6 Del.C. Section 17-101, et seq. as amended from time to time or any successor statute thereto. "Economic Risk of Loss" shall mean the "economic risk of loss" that any --------------------- Partner is treated as bearing under Treasury Regulation Section 1.752-2 with respect to any Partnership liability. -3- "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. ------------ "Fiscal Year" shall have the meaning set forth in Section 7.01. ----------- "General Partner" shall mean CL&P, in its capacity as general partner of --------------- the Partnership, together with any successor thereto that becomes a general partner of the Partnership pursuant to the terms of this Agreement. "Guaranty" shall mean the Payment and Guaranty Agreement dated as of -------- ______, 199__, as amended or supplemented from time to time, of CL&P. "Indemnified Person" shall mean the General Partner or the Special ------------------ Representative, any Affiliate thereof, or any officers, directors, shareholders, partners, members, employees, representatives, or agents thereof, or any employee or agent of the Partnership or its Affiliates. "Indenture" shall mean the Indenture dated as of __________, 199__, as --------- amended or supplemented from time to time, between CL&P and Bankers Trust Company, as Trustee, and any supplemental Indentures thereto entered into by CL&P pursuant to which Subordinated Debentures of CL&P are to be issued. "Interest" shall mean the entire partnership interest of a Partner in the -------- Partnership at any particular time, including the right of such Partner to any and all benefits to which a Partner may be entitled as provided in this Agreement, together with the obligations of such Partner to comply with all of the terms and provisions of this Agreement. "Investment Company Act Event" shall mean, with respect to any series of ---------------------------- Preferred Partner Interests, the occurrence of a Change in 1940 Act Law without the Partnership having received, within 45 days after such Change in 1940 Act Law, an opinion of counsel (which may be regular counsel to CL&P or an Affiliate, but not an employee thereof) experienced in such matters, to the effect that CL&P and/or the Partnership has taken reasonable measures within its discretion to avoid such Change in 1940 Act Law so that notwithstanding such Change in 1940 Act Law, the Partnership is not required to be registered as an "investment company" within the meaning of the 1940 Act. "Limited Partners" shall mean the Class A Limited Partner, if any, and the ---------------- Preferred Partners. "Liquidating Distributions" shall mean distributions of Partnership ------------------------- property made upon a liquidation and dissolution of the Partnership as provided in Article XII. "Liquidating Trustee" shall have the meaning set forth in Section 12.01. ------------------- "Liquidation Distribution" shall mean the liquidation preference of each ------------------------ series of Preferred Partner Interests as set forth in the Action for such series. "Loss Items" shall mean, with respect to any fiscal period, items of gross ---------- Partnership loss, deduction, or expense for such period. -4- "Net Income" or "Net Loss" shall mean, with respect to any Fiscal Year, the ---------- -------- sum of the Partnership's (a) net gain or loss from the sale or exchange of the Partnership's capital assets during such Fiscal Year, and (b) all other items of income, gain, loss, deduction, and expense for such Fiscal Year that are not included in (a). For purposes of determining the Capital Accounts as set forth in Article IV, "Net Income" and "Net Loss" shall be computed in the same manner as the Partnership computes its income for United States federal income tax purposes, except that adjustments shall be made in accordance with Treasury Regulation Section 1.704-1(b)(2)(iv), which adjustments shall include any income which is exempt from United States federal income tax, all Partnership losses and all expenses properly chargeable to the Partnership, whether deductible or non-deductible and whether described in Section 705(a)(2)(B) of the Code, treated as so described pursuant to Treasury Regulation Section 1.704- 1(b)(2)(iv)(i), or otherwise, and a distribution in kind of Partnership property shall be treated as a taxable disposition of such property for its fair market value (taking into account Section 7701(g) of the Code) on the date of distribution. "1940 Act" shall mean the Investment Company Act of 1940, as amended. -------- "NUSCO" shall mean Northeast Utilities Service Company and its successors. ----- "Notice of Redemption" shall have the meaning set forth in Section -------------------- 13.02(b)(i). "Partners" shall mean the General Partner and the Limited Partners. -------- "Partnership" shall mean CL&P Capital, L.P., a limited partnership formed ----------- under the laws of the State of Delaware. "Person" shall mean any individual, general partnership, limited ------ partnership, corporation, limited liability company, joint venture, trust, business trust, cooperative, or association, and the heirs, executors, administrators, legal representatives, successors, and assigns of such Person where the context so admits. "Preferred Partner" shall mean a limited partner of the Partnership who ----------------- holds one or more Preferred Partner Interests. "Preferred Partner Distribution" shall have the meaning set forth in ------------------------------ Section 13.02(a)(1). "Preferred Partner Interest Owner" shall mean, with respect to a Book Entry -------------------------------- Interest, a Person who is the beneficial owner of such Book Entry Interest, as reflected on the books of the Clearing Agency, or on the books of a Person maintaining an account with such Clearing Agency (directly as a Clearing Agency Participant or as an indirect participant, in each case in accordance with the rules of such Clearing Agency). "Preferred Partner Interests" shall mean the Interests described in Article --------------------------- XIII. "Purchase Price" shall mean the amount paid to the Partnership for each -------------- Preferred Partner Interest. -5- "Redemption Price" shall have the meaning set forth in Section 13.01(b)(v). ---------------- "Securities Act" shall mean the Securities Act of 1933, as amended. -------------- "Special Representative" shall have the meaning set forth in Section ---------------------- 13.02(d). "Subordinated Debentures" shall mean the Junior Subordinated Deferrable ----------------------- Interest Debentures of CL&P issued under the Indenture. "Successor Securities" shall have the meaning set forth in Section -------------------- 13.02(e). "Tax Event" shall mean, with respect to any series of Preferred Partner --------- Interests, that the Partnership shall have received an opinion of counsel (which may be regular tax counsel to CL&P or an Affiliate, but not an employee thereof) experienced in such matters to the effect that, as a result of any amendment to, or change (including any announced prospective change) in, the laws (or any regulations thereunder) of the United States or any political subdivision or taxing authority thereof or therein affecting taxation, or as a result of any official administrative pronouncement or judicial decision interpreting or applying such laws or regulations, which amendment or change is effective or such interpretation or pronouncement is announced on or after the date of issuance of such series of Preferred Partner Interests, there is more than an insubstantial risk that (1) the Partnership is subject to United States federal income tax with respect to interest received on the related Subordinated Debentures or the Partnership will otherwise not be taxed as a Partnership or (2) interest payable by CL&P to the Partnership on the related Subordinated Debentures is not deductible for United States federal income tax purposes or (3) the Partnership is subject to more than a de minimis amount of other taxes, duties, or other governmental charges. "Tax Matters Partner" shall have the meaning set forth in Section 7.05. ------------------- "Transfer" shall mean any transfer, sale, assignment, gift, pledge, -------- hypothecation, or other disposition or encumbrance of an interest in the Partnership. "Treasury Regulations" shall mean the final and temporary income tax -------------------- regulations, as well as the procedural and administrative regulations, promulgated by the United States Department of the Treasury under the Code, as amended from time to time. "Trustee" shall mean Bankers Trust Company, or any successor Trustee under ------- the Indenture. "Underwriting Agreement" shall mean the Underwriting Agreement dated ---------------------- _____________, 199__, among the Partnership, CL&P and the underwriters named therein with regard to the sale of Preferred Partner Interests and related securities and any additional Underwriting Agreements entered into by the Partnership and CL&P with regard to the sale of additional Preferred Partner Interests and related securities. -6- ARTICLE II CONTINUATION; NAME; PURPOSES; TERM; ETC. ---------------------------------------- Section 2.01. Formation. The parties hereto hereby join together to --------- continue a limited partnership which shall exist under and be governed by the Delaware Act. The Partnership shall make any and all filings or disclosures required under the laws of Delaware or otherwise with respect to its continuation as a limited partnership, its use of a fictitious name, or otherwise as may be required. The Partnership shall be a limited partnership among the Partners solely for the purposes specified in Section 2.03 hereof, and this Agreement shall not be deemed to create a partnership among the Partners with respect to any activities whatsoever other than the activities within the business purposes of the Partnership as specified in Section 2.03. No Partner shall have any power to bind any other Partner with respect to any matter except as specifically provided in this Agreement. No Partner shall be responsible or liable for any indebtedness or obligation of any other Partner incurred either before or after the execution of this Agreement. The assets of the Partnership shall be owned by the Partnership as an entity, and no Partner individually shall own any direct interest in the assets of the Partnership. Section 2.02. Name, Place of Business and Registered Agent. The name of -------------------------------------------- the Partnership is "CL&P Capital, L.P." The principal place of business of the Partnership shall be Berlin, Connecticut or at such other place as may be selected by the General Partner in its sole discretion. The name and address of the agent for service of process for the Partnership is: Corporation Service Company 1013 Centre Road Wilmington, DE 19805 Section 2.03. Purposes. The sole purposes of the Partnership are to issue -------- and sell Interests in the Partnership, including, without limitation, Preferred Partner Interests, and to use the proceeds of all sales of Interests in the Partnership (as well as all or a portion of the capital contributions to the Partnership) to purchase Subordinated Debentures issued by CL&P pursuant to the Indenture and to effect other similar arrangements permitted by this Agreement, and to engage in any and all activities necessary, convenient, advisable, or incidental thereto. The Partnership shall not borrow money or issue debt or mortgage or pledge any of its assets. Section 2.04. Term. The Partnership was formed on November __, 1994 and ---- shall continue without dissolution through November __, 2093, unless sooner dissolved as provided in Article XI hereof. Section 2.05. Qualification in Other Jurisdictions. The General Partner ------------------------------------ shall cause the Partnership to be qualified, formed, or registered under assumed or fictitious name statutes or similar laws in any jurisdiction in which the Partnership transacts business. The General Partner shall execute, deliver and file any certificates (and any amendments and/or restatements thereof) necessary for the Partnership to qualify to do business in any jurisdiction in which the Partnership may wish to conduct business. -7- Section 2.06. Admission of Preferred Partners. Upon receipt by a Person ------------------------------- of a Certificate and payment for the Preferred Partner Interest being acquired by such Person, which shall be deemed to constitute a request by such Person that the books and records of the Partnership reflect its admission as a Preferred Partner, such Person shall be admitted to the Partnership as a Preferred Partner and shall become bound by this Agreement without execution of this Agreement. Section 2.07. Records. The name and mailing address of, and the amount ------- contributed to the capital of the Partnership by, each Partner shall be listed on the books and records of the Partnership. The Partnership shall keep such other records as are required by Section 17-305 of the Delaware Act. The General Partner shall update the books and records from time to time as necessary to accurately reflect the information therein. Section 2.08. Withdrawal of Class A Limited Partner. Upon the admission ------------------------------------- of at least one Preferred Partner as a limited partner of the Partnership, the Class A Limited Partner shall be deemed to have withdrawn from the Partnership as a limited partner of the Partnership, and upon such withdrawal, the Class A Limited Partner shall have its capital contribution returned to it without any interest or deduction and shall have no further interest in the Partnership. ARTICLE III CAPITAL CONTRIBUTIONS --------------------- Section 3.01. Capital Contributions. As of the date of this Agreement, --------------------- the General Partner has contributed the amount of [*** $___________ ***] to the capital of the Partnership and shall make any further contributions required to satisfy its obligations under Section 3.04. Each Preferred Partner, or its predecessor in interest, will contribute to the capital of the Partnership the amount of the Purchase Price for the Preferred Partner Interests held by it. Section 3.02. Additional Capital Contributions. No Partner shall be -------------------------------- required to make any additional contributions or advances to the Partnership except as provided in Section 3.04 or by law. The General Partner may make additional capital contributions in excess of the amounts required under this Agreement at any time. Section 3.03. No Interest or Withdrawals. No interest shall accrue on any -------------------------- capital contribution made by a Partner, and no Partner shall have the right to withdraw or to be repaid any portions of its capital contributions so made, except as specifically provided in this Agreement. Section 3.04. Minimum Capital Account Balance of General Partner. At all -------------------------------------------------- times throughout the term of the Partnership, the General Partner shall maintain a Capital Account balance equal to at least 3% of the total positive Capital Account balances for the Partnership. If necessary, the General Partner shall immediately make additional contributions to satisfy those requirements, which shall constitute additional capital contributions made by the General Partner. -8- Section 3.05. Partnership Interests. Unless otherwise provided herein, --------------------- the percentage interests of the Partners shall be as determined in proportion to the capital contributions of the Partners. Section 3.06. Interests. Each Partner's respective Preferred Partner --------- Interests shall be set forth on the books and records of the Partnership. Each Partner hereby agrees that its Interests shall for all purposes be personal property. No Partner has an interest in specific Partnership property. The Partnership shall not issue any additional interest in the Partnership after the date hereof other than General Partner Interests or Preferred Partner Interests. ARTICLE IV CAPITAL ACCOUNTS ---------------- Section 4.01. Capital Accounts. There shall be established on the books ---------------- of the Partnership a capital account (each a "Capital Account") for each Partner --------------- that shall consist of the initial capital contribution to the Partnership made by such Partner (or such Partner's predecessor in interest), increased by: (a) any additional capital contributions made by such Partner (or predecessor thereof), (b) the agreed value of any property subsequently contributed to the capital of the Partnership by such Partner (or predecessor thereof); and (c) Net Income allocated to any Partner (or predecessor thereof). A Partner's Capital Account shall be decreased by: (a) Net Loss allocated to any Partner (or predecessor thereof); and (b) any distributions made to such Partner (or predecessor thereof). In addition to and notwithstanding the foregoing, Capital Accounts shall be maintained at all times in accordance with the capital account maintenance rules set forth in Treasury Regulation Section 1.704-1(b)(2)(iv). Section 4.02. Compliance with Treasury Regulations. The foregoing ------------------------------------ provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Section 704(b) of the Code and Treasury Regulation Section 1.704-1(b) and shall be interpreted and applied in a manner consistent with such regulations. In the event that the General Partner shall determine that it is prudent to modify the manner in which the Capital Accounts, or any debits or credits thereto, are determined in order to comply with such regulations, the General Partner may make such modification. ARTICLE V ALLOCATIONS ----------- Section 5.01. Profits and Losses. Each fiscal period, the Net Income of ------------------ the Partnership shall be allocated (1) first, to the Preferred Partners, pro --- rata in proportion to the number of Preferred Partner Interests held by each - ---- Preferred Partner and at the distribution rate specified in the Action for each series of Preferred Partner Interests, in an amount equal to the excess of (a) the Preferred Partner Distributions accrued on such Preferred Partner Interests since their date of issuance through and including the close of the current fiscal period (whether or not paid) over (b) the amount of Net Income allocated to the Preferred Partners pursuant to clause (1) of this Section 5.01 in all prior fiscal periods; and (2) thereafter, to the General Partner. Except in connection with the dissolution and -9- liquidation of the Partnership, the Net Loss of the Partnership shall be allocated each year to the General Partner. Upon a dissolution and liquidation of the Partnership, Net Loss shall be allocated to each Preferred Partner in an amount equal to the excess of (a) such Preferred Partner's Capital Account over (b) such Preferred Partner's Liquidation Distribution (as defined with respect to each Preferred Partner's Interest in the Action establishing such Preferred Partner Interests), with any remaining Net Loss being allocated to the General Partner. Notwithstanding the foregoing, any and all costs and expenses of the Partnership paid (or required to be paid) by the General Partner pursuant to Section 8.03(c) shall be allocated each Fiscal Year to the General Partner. Section 5.02. Allocation Rules. For purposes of determining the profits, ---------------- losses, or any other items allocable to any period, profits, losses, and any such other items shall be determined on a daily, monthly, or other basis, as determined by the General Partner in its sole and absolute discretion using any method that is permissible under Section 706 of the Code and the Treasury Regulations thereunder. The Partners are aware of the income tax consequences of the allocations made by this Article V and hereby agree to be bound by the provisions of this Article V in reporting their shares of Partnership income and loss for income tax purposes. Section 5.03. Adjustments to Reflect Changes in Interests. ------------------------------------------- Notwithstanding the foregoing, with respect to any Fiscal Year during which any Partner's percentage interest in the Partnership changes, whether by reason of the admission of a Partner, the withdrawal of a Partner, a non-pro rata --- ---- contribution of capital to the Partnership or any other event described in Section 706(d)(1) of the Code and the Treasury Regulations issued thereunder, allocations of the items of income, gain, loss, and deduction of the Partnership shall be adjusted appropriately to take into account the varying interests of the Partners during such Fiscal Year. The General Partner shall consult with the Partnership's accountants and other tax advisors and shall select the method of making such adjustments, which method shall be used consistently thereafter. Section 5.04. Tax Allocations. For United States federal, state, and --------------- local income tax purposes, Partnership income, gain, loss, deduction, or credit (or any item thereof) for each Fiscal Year shall be allocated to and among the Partners in order to reflect the allocations made pursuant to the provisions of this Article V for such Fiscal Year (other than allocations of items which are not deductible or are excluded from taxable income), taking into account any variation between the adjusted tax basis and book value of Partnership property in accordance with the principles of Section 704(c) of the Code. Section 5.05. Qualified Income Offset. Notwithstanding any other ----------------------- provision hereof, if any Partner unexpectedly receives an adjustment, allocation, or distribution described in Treasury Regulation Section 1.704- 1(b)(2)(ii)(d)(4), (5), and (6) which creates or increases a deficit in the Capital Account of such Partner (and, for this purpose, the existence of a deficit shall be determined by increasing the Partner's Capital Account by any amounts that the Partner is obligated to restore to the Partnership pursuant to Treasury Regulation Section 1.704-1(b)(2)(ii)(c) or is deemed to be obligated to restore pursuant to the penultimate sentence of Treasury Regulation Section 1.704-2(g)(1) and -2(i)(5), and reducing the Partner's Capital Account by the items described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5), and (6)), the next available gross income of the Partnership shall be allocated to the Partners having such deficit balances, in proportion to the deficit -10- balances, until such deficit balances are eliminated as quickly as possible. The provisions of this Section 5.05 are intended to constitute a "qualified income offset" within the meaning of Treasury Regulation Section 1.704- 1(b)(2)(ii)(d) and shall be interpreted and implemented as therein provided. Section 5.06. Nonrecourse Debt. While this Agreement does not provide ---------------- certain provisions required by Treasury Regulations (S)(S) 1.704-1(b) and 1.704- 2 because those provisions apply to transactions that are not expected to occur, the Partners intend that the allocation under this Article V conform to Treasury Regulations (S)(S) 1.704-1(b) and 1.704-2 (including, without limitation, the minimum gain chargeback, chargeback of partner nonrecourse debt minimum gain and partner nonrecourse debt provisions of such Treasury Regulations), and the General Partner shall make such changes in the allocations under this Article V as it believes are reasonably necessary to meet the requirements of such Treasury Regulations. Section 5.07. Minimum Allocations to General Partner. Notwithstanding -------------------------------------- any other provision hereof, other than the provisions of Section 5.05, the General Partner shall be allocated at least 1% of all items of Net Income and Net Losses for each Fiscal Year. Section 5.08. Taxpayer Information. Any Person who holds Preferred -------------------- Partner Interests as a nominee for another Person is required to furnish to the Partnership (a) the name, address, and taxpayer identification number of the beneficial owner and the nominee; (b) information as to whether the beneficial owner is (1) a Person that is not a United States Person, (2) a foreign government, an international organization, or any wholly owned agency or instrumentality of either of the foregoing, or (3) a tax-exempt entity; (c) the amount and description of Preferred Partner Interests held, acquired, or transferred for the beneficial owner; and (d) certain information including the dates of acquisitions and transfers, means of acquisitions and transfers, and acquisitions cost for purchases, as well as the amount of net proceeds from sales. ARTICLE VI DISTRIBUTIONS ------------- Section 6.01. Distributions. Preferred Partners shall receive periodic ------------- distributions, if any, in accordance with the terms of the applicable Action creating the series of Preferred Partner Interests held by them, as and when determined by the General Partner, out of funds held by the Partnership and legally available therefor. Subject to the rights of the holders of the Preferred Partner Interests, the General Partner shall receive such distributions, if any, as may be determined from time to time by the General Partner. Section 6.02. Certain Distributions Prohibited. Notwithstanding anything -------------------------------- in this Agreement to the contrary, all Partnership distributions shall be subject to the following limitations: (a) No distribution shall be made to any Partner if, and to the extent that, such distribution would not be permitted under Section 17-607 of the Delaware Act or other applicable law. -11- (b) No distribution shall be made to any Partner to the extent that such distribution, if made, would create or increase a deficit balance in the Capital Account of such Partner. (c) Other than Liquidating Distributions, no distribution of Partnership property shall be made in kind. Notwithstanding anything in the Delaware Act or this Agreement to the contrary, in the event of a Liquidating Distribution, a Partner may be compelled in accordance with Section 12.01 to accept a distribution of cash or any other asset in kind from the Partnership even if the percentage of the asset distributed to it exceeds a percentage of that asset which is equal to the percentage in which such Partner shares in distributions from the Partnership. Section 6.03. Withholding. The Partnership shall comply with all ----------- withholding requirements under United States federal, state and local law. The Partnership shall request, and the Partners shall provide to the Partnership, such forms or certificates as are necessary to establish an exemption from withholding with respect to each Partner, and any representations and forms as shall reasonably be requested by the Partnership to assist it in determining the extent of, and in fulfilling, its withholding obligations. The Partnership shall file required forms with applicable jurisdictions and, unless an exemption from withholding is properly established by a Partner, shall remit amounts withheld with respect to the Partners to applicable jurisdictions. To the extent that the Partnership is required to withhold and pay over any amounts to any authority with respect to distributions or allocations to any Partner, the amount withheld shall be deemed to be a distribution in the amount of the withholding to the Partner. In the event of any claimed overwithholding, Partners shall be limited to an action against the applicable jurisdiction. If the amount withheld was not withheld from actual distributions, the Partnership may reduce subsequent distributions by the amount of such withholding. ARTICLE VII ACCOUNTING MATTERS; BANKING --------------------------- Section 7.01. Fiscal Year. The fiscal year ("Fiscal Year") of the ----------- ----------- Partnership shall be the calendar year, or such other year as is required by the Code. Section 7.02. Certain Accounting Matters. (a) At all times during the -------------------------- existence of the Partnership, the General Partner shall keep, or cause to be kept, full books of account, records and supporting documents, which shall reflect in reasonable detail, each transaction of the Partnership. The books of account shall be maintained on the accrual method of accounting, in accordance with generally accepted accounting principles, consistently applied. The Partnership shall use the accrual method of accounting for United States federal income tax purposes. The books of account and the records of the Partnership shall be examined by and reported upon as of the end of each Fiscal Year by a firm of independent certified public accountants selected by the General Partner. (b) The General Partner shall cause to be prepared and delivered to each of the Partners, within 90 days after the end of each Fiscal Year of the Partnership, annual financial statements of the Partnership, including a balance sheet of the Partnership as of the end of such Fiscal Year, and the related statements of income or loss and a statement -12- indicating such Partner's share of each item of Partnership income, gain, loss, deduction, or credit for such Fiscal Year for income tax purposes. (c) Notwithstanding anything in this Agreement to the contrary, the General Partner may, to the maximum extent permitted by applicable law, keep confidential from the Partners for such period of time as the General Partner deems reasonable any information which the General Partner reasonably believes to be in the nature of trade secrets or other information the disclosure of which the General Partner in good faith believes is not in the best interest of the Partnership or could damage the Partnership or which the Partnership or a third party is required by law or by an agreement to keep confidential. (d) The General Partner may make, or revoke, in its sole and absolute discretion, any elections for the Partnership that are permitted under tax or other applicable laws, including elections under Section 704(c) of the Code, provided that the General Partner shall not make any elections pursuant to Section 754 of the Code. Section 7.03. Banking. The Partnership shall maintain one or more bank ------- accounts in the name and for the sole benefit of the Partnership. The sole signatories for such accounts shall be designated by the General Partner. Reserve cash, cash held pending the expenditure of funds for the business of the Partnership, or cash held pending a distribution to one or more of the Partners may be invested in any manner at the sole and absolute discretion of the General Partner. Section 7.04. Right to Rely on Authority of General Partner. No Person --------------------------------------------- that is not a Partner, in dealing with the General Partner, shall be required to determine such General Partner's authority to make any commitment or engage in any undertaking on behalf of the Partnership, or to determine any fact or circumstance bearing upon the existence of the authority of the General Partner. Section 7.05. Tax Matters Partner. The "tax matters partner," as defined ------------------- in Section 6231 of the Code, of the Partnership shall be the General Partner (the "Tax Matters Partner"). The Tax Matters Partner shall receive no ------------------- compensation from the Partnership for its services in that capacity. The Tax Matters Partner is authorized to employ such accountants, attorneys, and agents as it, in its sole and absolute discretion, deems necessary or desirable. Any Person who serves as Tax Matters Partner shall not be liable to the Partnership or to any Partner for any action it takes or fails to take as Tax Matters Partner with respect to any administrative or judicial proceeding involving "partnership items" (as defined in Section 6231 of the Code) of the Partnership. ARTICLE VIII MANAGEMENT ---------- Section 8.01. Management. (a) The General Partner shall have full and ---------- exclusive authority with respect to all matters concerning the conduct of the business and affairs of the Partnership, including without limitation the power, without the consent of the Limited Partners, to make all decisions it deems necessary, advisable, convenient, or desirable to accomplish the purposes of the Partnership. The Limited Partners shall have no right to -13- remove or replace the General Partner. The acts of the General Partner acting alone shall serve to bind the Partnership and shall constitute the acts of the Partners. (b) The Limited Partners in their capacity as such shall not take part in the management, operation, or control of the business of the Partnership or transact any business in the name of the Partnership. In addition, the Limited Partners, in their capacity as such, shall not be agents of the Partnership and shall not have the power to sign or bind the Partnership to any agreement or document. The Limited Partners shall have the right to vote only with respect to those matters specifically provided for in this Agreement. Notwithstanding anything herein to the contrary, the Preferred Partners may exercise all rights provided to them, if any, under the Indenture and the Guaranty. (c) The General Partner is authorized and directed to use its best efforts to conduct the affairs of, and to operate, the Partnership in such a way that the Partnership would not be deemed to be an "investment company" required to be registered under the 1940 Act or taxed as a corporation for United States federal income tax purposes and so that the Subordinated Debentures will be treated as indebtedness of CL&P for United States federal income tax purposes. In this connection, the General Partner is authorized to take any action not inconsistent with applicable law, the Certificate of Limited Partnership, or this Agreement that does not materially adversely affect the interests of holders of Preferred Partner Interests that the General Partner determines in its sole and absolute discretion to be necessary or desirable for such purposes. Section 8.02. Fiduciary Duty. (a) To the extent that, at law or in -------------- equity, an Indemnified Person has duties (including fiduciary duties) and liabilities relating thereto to the Partnership or to any other Covered Person, an Indemnified Person acting under this Agreement shall not be liable to the Partnership or to any other Covered Person for its good faith reliance on the provisions of this Agreement or the advice of counsel selected by the Indemnified Person in good faith. The provisions of this Agreement, to the extent that they restrict the duties and liabilities of an Indemnified Person otherwise existing at law or in equity, are agreed by the parties hereto to replace such other duties and liabilities of such Indemnified Person. (b) Unless otherwise expressly provided herein, (1) whenever a conflict of interest exists or arises between Covered Persons, or (2) whenever this Agreement or any other agreement contemplated herein or therein provides that an Indemnified Person shall act in a manner that is, or provides terms that are, fair and reasonable to the Partnership or any Partner, the Indemnified Person shall resolve such conflict of interest, taking such action or providing such terms, considering in each case the relative interest of each party (including its own interest) to such conflict, agreement, transaction, or situation, and the benefits and burdens relating to such interests, any customary or accepted industry practices, the advice of counsel selected by the Indemnified Person in good faith, and any applicable generally accepted accounting practices or principles. In the absence of bad faith by the Indemnified Person, the resolution, action, or term so made, taken, or provided by the Indemnified Person shall not constitute a breach of this Agreement or any other agreement contemplated herein or of any duty or obligation of the Indemnified Person at law or in equity or otherwise. -14- (c) Whenever in this Agreement an Indemnified Person is permitted or required to make a decision (1) in its "discretion" or under a grant of similar authority or latitude, the Indemnified Person shall be entitled to consider only such interests and factors as it desires, including its own interests, and shall have no duty or obligation to give any consideration to any interest of or factors affecting the Partnership or any other Person, or (2) in its "good faith" or under another express standard, the Indemnified Person shall act under such express standard and shall not be subject to any other or different standard imposed by this Agreement or other applicable law. Section 8.03. Specific Obligations of the General Partner. The General ------------------------------------------- Partner hereby undertakes: (a) to devote to the affairs of the Partnership so much of its time as shall be necessary to carry on properly the Partnership's business and its responsibilities hereunder; (b) to cause the Partnership (i) to do, or refrain from doing, such acts as shall be required by Delaware law in order to preserve the valid existence of the Partnership as a Delaware limited partnership and to preserve the limited liability of the Limited Partners, and (ii) to refrain from engaging in any activity that is not consistent with the limited purposes of the Partnership set forth in Section 2.03 hereof; (c) to pay directly all (and the Partnership shall not be obligated to pay, directly or indirectly, any) of the costs and expenses of the Partnership, including without limitation costs and expenses relating to the organization of and offering of limited partner interests in the Partnership and costs and expenses relating to the operation of the Partnership. By way of example and not of limitation, such costs and expenses include costs and expenses of accountants, attorneys, statistical or bookkeeping services, computing or accounting equipment, paying agent(s), registrar(s), transfer agent(s), duplicating, travel, telephone, and costs and expenses incurred in connection with the acquisition, financing, and disposition of Partnership assets; and (d) to timely perform all its duties as General Partner, including its duty to pay distributions to the Preferred Partners in accordance with Section 6.01 hereof. Section 8.04. Powers of the General Partner. The General Partner shall ----------------------------- have the right, power and authority, in the management of the business and affairs of the Partnership, to do or cause to be done any and all acts deemed by the General Partner to be necessary or desirable to effectuate the business, purposes, and objectives of the Partnership. Without limiting the generality of the foregoing, the General Partner shall have the power and authority without any further act, approval, or vote of any Partner to: (a) cause the Partnership to issue Interests, including Preferred Partner Interests, and determine classes and series thereof, in accordance with this Agreement; provided, however, that the Partnership shall not create or issue any -------- ------- Interests senior to Preferred Partner Interests; (b) act as, or appoint another Person to act as, registrar and transfer agent for the Preferred Partner Interests; -15- (c) establish a record date with respect to all actions to be taken hereunder that require a record date to be established, including with respect to allocations, distributions, and voting rights and declare distributions and make all other required payments on General Partner, Class A Limited Partner and Preferred Partner Interests as the Partnership's paying agent; (d) enter into and perform one or more Indentures and one or more Underwriting Agreements and use the proceeds from the issuance of the Interests to purchase the Subordinated Debentures, in each case on behalf of the Partnership; (e) bring and defend on behalf of the Partnership actions and proceedings at law or in equity before any court or governmental, administrative, or other regulatory agency, body, or commission or otherwise; (f) employ or otherwise engage employees and agents (who may be designated as officers with titles) and managers, contractors, advisors, and consultants and pay reasonable compensation for such services; (g) redeem each series of Preferred Partner Interests (which shall constitute a return of capital and not a distribution of income) in accordance with its terms and/or to the extent that the related series of Subordinated Debentures is redeemed or reaches maturity; and (h) execute all documents or instruments, perform all duties and powers, and do all things for and on behalf of the Partnership in all matters necessary, desirable, convenient, advisable or incidental to the foregoing. The expression of any power or authority of the General Partner in this Agreement shall not in any way limit or exclude any other power or authority which is not specifically or expressly set forth in, or precluded by, this Agreement. Section 8.05. Independent Affairs. Any Partner or any Affiliate thereof ------------------- may engage in or possess an interest in any other business venture of whatever nature and description, independently or with others, wherever located and whether or not comparable to or in competition with the Partnership or the General Partner, or any Affiliate thereof, and neither the Partnership nor any of the Partners shall, by virtue of this Agreement, have any rights with respect to, or interests in, such independent ventures or the income, profits, or losses derived therefrom. No Partner or Affiliate thereof shall be obligated to present any particular investment opportunity to the Partnership even if such opportunity is of a character that, if presented to the Partnership, could be taken by the Partnership, and any Partner or Affiliate thereof shall have the right to take for its own account (individually or as a Partner or fiduciary) or to recommend to others any such particular investment opportunity. Section 8.06. Meetings of the Partners. Meetings of the Partners of any ------------------------ class or series or of all classes or series of the Partnership's Interests may be called at any time by the Partners holding 10% in liquidation preference of such class or series of Interests, or of all classes or series of Interests, as the case may be, or as provided in any Action -16- establishing a series of Preferred Partner Interests. Except to the extent otherwise provided in any such Action, the following provisions shall apply to meetings of Partners. (a) Notice of any meeting shall be given to all Partners not less than 10 Business Days nor more than 60 days prior to the date of such meeting. Partners may vote in person or by proxy at such meeting. Whenever a vote, consent, or approval of Partners is permitted or required under this Agreement, such vote, consent, or approval may be given at a meeting of Partners or by written consent. (b) Each Partner may authorize any Person to act for it by proxy on all matters in which a Partner is entitled to participate, including waiving notice of any meeting, or voting or participating at a meeting. Every proxy must be signed by the Partner or its attorney-in-fact. No proxy shall be valid after the expiration of 11 months from the date thereof unless otherwise provided in the proxy. Every proxy shall be revocable at the pleasure of the Partner executing it. (c) Each meeting of Partners shall be conducted by the General Partner or by such other Person that the General Partner may designate. (d) Subject to the provisions of this Section 8.06, the General Partner, in its sole and absolute discretion, shall establish all other provisions relating to meetings of Partners, including notice of the time, place, or purpose of any meeting at which any matter is to be voted on by any Partners, waiver of any such notice, action, by consent without a meeting, the establishment of a record date, quorum requirements, voting in person or by proxy, or any other matter with respect to the exercise of any such right to vote; provided, however, that -------- ------- unless the General Partner has established a lower percentage, a majority of the Partners entitled to vote thereat shall constitute a quorum at all meetings of the Partners. Section 8.07. Net Worth of the General Partner. By execution of this -------------------------------- Agreement, the General Partner represents and covenants that (a) as of the date hereof and at all times during the existence of the Partnership it will maintain a fair market value net worth of at least 10% of the total contributions less redemptions to the Partnership, throughout the life of the Partnership, in accordance with Rev. Proc. 92-88, 1992-2 C.B. 496, or such other amount as may be required from time to time pursuant to any amendment, modification, or successor to Rev. Proc. 92-88 (such net worth being computed excluding any interest in, or receivable due from, the Partnership and including any income tax liabilities that would become due by the General Partner upon disposition by the General Partner of all assets included in determining such net worth), and (b) it will not make any voluntary dispositions of assets which would reduce the net worth below the amount described in (a). Section 8.08. Restrictions on General Partner. So long as any series of ------------------------------- Subordinated Debentures are held by the Partnership, the General Partner, unless so directed by the Special Representative, shall not (1) direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or executing any trust or power conferred on the Trustee with respect to such series, (2) waive any past default which is available under the Indenture, (3) exercise any right to rescind or annul a declaration that the principal of all of a series of Subordinated Debentures shall be due and payable or (4) consent to any amendment, modification, or termination of the Indenture, or to a supplemental indenture under the Indenture where such consent shall be required, without, -17- in each case, obtaining the prior approval of the holders of not less than 66 2/3% of the aggregate stated liquidation preference of all series of Preferred Partner Interests affected thereby, acting as a single class; provided, however, -------- ------- that where a consent under the Indenture would require the consent of each holder affected thereby, no such consent shall be given by the General Partner without the prior consent of each holder of all series of Preferred Partner Interests affected thereby. The General Partner shall not revoke any action previously authorized or approved by a vote of any series of Preferred Partner Interests. The General Partner shall notify all holders of such Preferred Partner Interests of any notice of default received from the Trustee with respect to such series of Subordinated Debentures. ARTICLE IX LIABILITY AND INDEMNIFICATION ----------------------------- Section 9.01. Partnership Expenses and Liabilities. ------------------------------------ (a) Except as provided in the Delaware Act, the General Partner shall have the liabilities of a partner in a partnership without limited partners to Persons other than the Partnership and the other Partners. (b) Except as otherwise expressly required by law, a Limited Partner, in its capacity as such, shall have no liability in excess of (1) the amount of its capital contributions to the Partnership, (2) its share of any assets and undistributed profits of the Partnership, and (3) the amount of any distributions wrongfully distributed to it. Section 9.02. No Liability. Except as otherwise expressly provided in ------------ Section 9.01(a) or by the Delaware Act, no Covered Person shall be liable to the Partnership or to any other Partner for any act or omission performed or omitted pursuant to the authority granted to it hereunder or by law, or from a loss resulting from any mistake or error in judgment on its part or from the negligence, dishonesty, fraud or bad faith of any employee, independent contractor, broker or other agent of the Partnership, provided that such act or omission, such mistake or error in judgment or the selection of such employee, independent contractor, broker or other agent, as the case may be, did not result from the willful misconduct, gross negligence or fraud of such Covered Person. Any Covered Person shall be fully protected in relying in good faith upon the records of the Partnership and upon such information, opinions, reports or statements presented to the Partnership by any Person as to matters the Covered Person reasonably believes are within such other Person's professional or expert competence and who has been selected with reasonable care by or on behalf of the Partnership, including information, opinions, reports or statements as to the value and amount of the assets, liabilities, profits, losses, or any other facts pertinent to the existence and amount of assets from which distributions to Partners might properly be paid. Section 9.03. Indemnification. To the fullest extent permitted by --------------- applicable law, except as set forth in Section 8.03(c), an Indemnified Person shall be entitled to indemnification from the Partnership for any loss, damage or claim incurred by such Indemnified Person by reason of any act or omission performed or omitted by such Indemnified Person in good faith on behalf of the Partnership and in a manner reasonably believed to be within the scope of authority conferred on such Indemnified Person by this -18- Agreement, except that no Indemnified Person shall be entitled to be indemnified in respect of any loss, damage or claim incurred by such Indemnified Person by reason of willful misconduct, gross negligence or fraud with respect to such acts or omissions; provided, however, that any indemnity under this Section 9.03 -------- ------- shall be provided out of and to the extent of Partnership assets only, and except as otherwise provided by the Delaware Act, no Covered Person shall have any personal liability on account thereof. To the fullest extent permitted by applicable law, expenses (including legal fees) incurred by an Indemnified Person in defending any claim, demand, action, suit or proceeding shall, from time to time, be advanced by the Partnership prior to the final disposition of such claim, demand, action, suit or proceeding upon receipt by the Partnership of an undertaking by or on behalf of the Indemnified Person to repay such amount if it shall be determined that the Indemnified Person is not entitled to be indemnified as authorized in this Section 9.03. ARTICLE X WITHDRAWAL; TRANSFER RESTRICTIONS -------------------------------- Section 10.01. Transfer by General Partner; Admission of Substituted ----------------------------------------------------- General Partner. The General Partner may not Transfer its Interest (in whole or - --------------- in part) to any Person without the consent of all other Partners, provided that -------- the General Partner may, without the consent of any Partner, Transfer its Interest to any of its direct or indirect wholly-owned subsidiaries. Notwithstanding anything else herein, the General Partner may merge with or into another Person, may permit another Person to merge with or into the General Partner and may Transfer all or substantially all of its assets to another Person if the General Partner is the survivor of such merger or the Person into which the General Partner is merged or to which the General Partner's assets are transferred is a Person organized under the laws of the United States or any state thereof or the District of Columbia and the General Partner shall have the right to admit the assignee or transferee of its Interest which is permitted hereunder as a substituted or additional general partner of the Partnership, without the consent of the Limited Partners. Any such assignee or transferee of all or a part of the Interest of a General Partner shall be deemed admitted to the Partnership as a general partner of the Partnership immediately prior to the effective date of such Transfer, and such additional or successor general partner is hereby authorized to and shall continue the business of the Partnership without dissolution. Section 10.02. Withdrawal of Limited Partners. A Preferred Partner may ------------------------------ not withdraw from the Partnership prior to the dissolution, liquidation, or winding up of the Partnership except upon the assignment of its Preferred Partner Interests (including any redemption, repurchase, exchange, or other acquisition by the Partnership), as the case may be, in accordance with the provisions of this Agreement. Any Person who has been assigned one or more Interests shall provide the Partnership with a completed Form W-8 or such other documents or information as are requested by the Partnership for tax reporting purposes. A withdrawing Preferred Partner shall not be entitled to receive any distribution and shall not otherwise be entitled to receive the fair value of its Preferred Partner Interest except as otherwise expressly provided in this Agreement. -19- ARTICLE XI DISSOLUTION OF THE PARTNERSHIP ------------------------------ Section 11.01. No Dissolution. The Partnership shall not be dissolved by -------------- the admission of Partners in accordance with the terms of this Agreement. The death, withdrawal, incompetency, bankruptcy, dissolution, or other cessation to exist as a legal entity of a Limited Partner, or the occurrence of any other event that terminates the Interest of a Limited Partner in the Partnership, shall not in and of itself cause the Partnership to be dissolved and its affairs wound up. To the fullest extent permitted by applicable law, upon the occurrence of any such event, the General Partner, subject to the terms of this Agreement, may, without any further act, vote, or approval of any Partner, admit any Person to the Partnership as an additional or substitute Limited Partner, which admission shall be effective as of the date of the occurrence of such event, and the business of the Partnership shall be continued without dissolution. Section 11.02. Events Causing Dissolution. The Partnership shall be -------------------------- dissolved and its affairs shall be wound up upon the occurrence of any of the following events: (a) The expiration of the term of the Partnership, as provided in Section 2.04 hereof; (b) The withdrawal, removal, or bankruptcy of the General Partner or Transfer (other than a grant of a security interest) by the General Partner of its entire Interest in the Partnership when the assignee is not admitted to the Partnership as an additional or successor general partner in accordance with Section 10.01 hereof, or the occurrence of any other event that results in the General Partner ceasing to be a general partner of the Partnership under the Delaware Act, provided, the Partnership shall not be dissolved and required to be wound up in connection with any of the events specified in this clause (b) if (1) at the time of the occurrence of such event there is at least one remaining general partner of the Partnership who is hereby authorized to, agrees to, and does carry on the business of the Partnership, or (2) within 90 days after the occurrence of such event, a majority in Interest of the remaining Partners (or such greater percentage in Interest as is required by the Delaware Act) agree in writing to continue the business of the Partnership and to the appointment, effective as of the date of such event, if required, of one or more successor general partners of the Partnership; (c) The entry of a decree of judicial dissolution under Section 17-802 of the Delaware Act; (d) The written consent of the General Partner and all of the Preferred Partners; or (e) If a Tax Event or an Investment Company Act Event has occurred, pursuant to an Action of the General Partner so providing. Section 11.03. Notice of Dissolution. Upon the dissolution of the --------------------- Partnership, the General Partner shall promptly notify the Partners of such dissolution. -20- ARTICLE XII LIQUIDATION OF PARTNERSHIP INTERESTS ------------------------------------ Section 12.01. Liquidation. Upon dissolution, liquidation or winding up ----------- of the Partnership, the General Partner, or, in the event that the dissolution, liquidation or winding up is caused by an event described in Section 11.02(b) and there is no other general partner of the Partnership, a Person or Persons who may be approved by Preferred Partners holding not less than a majority in liquidation preference of the Preferred Partner Interests, as liquidating trustee (the "Liquidating Trustee"), shall immediately commence to wind up the ------------------- Partnership's affairs; provided, however, that a reasonable time shall be -------- ------- allowed for the orderly liquidation of the assets of the Partnership and the satisfaction of liabilities to creditors so as to enable the Partners to minimize the normal losses attendant upon a liquidation. The Preferred Partners shall continue to share profits and losses during liquidation in the same proportions, as specified in Articles V and VI hereof, as before liquidation. The proceeds of liquidation shall be distributed, as realized, in the following order and priority: (a) to creditors of the Partnership, including Preferred Partners who are creditors, to the extent permitted by law, in satisfaction of the liabilities of the Partnership (whether by payment or the making of reasonable provision for payment thereof), other than (1) liabilities for which reasonable provision for payment has been made and (2) liabilities for distributions to Partners; (b) to the holders of Preferred Partner Interests of each series then outstanding in accordance with the terms of the Action or Actions for such series; and (c) to all Partners in proportion to their respective positive Capital Account balances, after giving effect to all contributions, distributions, and allocations for all periods. Section 12.02. Termination. The Partnership shall terminate when all of ----------- the assets of the Partnership have been distributed in the manner provided for in this Article XII, and the Certificate of Limited Partnership shall have been cancelled in the manner required by the Delaware Act. Section 12.03. Duty of Care. The General Partner or the Liquidating ------------ Trustee, as the case may be, shall not be liable to the Partnership or any Partner for any loss attributable to any act or omission of the General Partner taken in good faith in connection with the liquidation of the Partnership and distribution of its assets in belief that such course of conduct was in accordance with this Agreement and in the best interest of the Partnership. The General Partner or the Liquidating Trustee, as the case may be, may consult with counsel and accountants with respect to liquidating the Partnership and distributing its assets and shall be justified in acting or omitting to act in accordance with the written opinion of such counsel or accountants, provided they shall have been selected with reasonable care. Section 12.04. No Liability for Return of Capital. The General Partner and ---------------------------------- its respective officers, directors, members, shareholders, employees, representatives, agents, partners, and Affiliates shall not be personally liable for the return of the contributions of any Partner to the Partnership. No Limited Partner shall be obligated to restore to the -21- Partnership any amount with respect to a negative Capital Account. The General Partner shall be obligated to restore to the Partnership any deficit balance in its Capital Account upon the dissolution of the Partnership by the end of the Fiscal Year of dissolution (or, if later, within 90 days after the date of such dissolution). ARTICLE XIII PREFERRED PARTNER INTERESTS --------------------------- Section 13.01. Preferred Partner Interests. --------------------------- (a) The aggregate number of Preferred Partner Interests which the Partnership shall have authority to issue is unlimited. Each series of Preferred Partner Interests shall rank equally and all Preferred Partner Interests shall rank senior to all other Interests in respect of the right to receive distributions and the right to receive payments out of the assets of the Partnership upon voluntary or involuntary dissolution and winding up of the Partnership. (b) The General Partner on behalf of the Partnership is authorized to issue Preferred Partner Interests, in one or more series, having such designations, rights, privileges, restrictions, and other terms and provisions, whether in regard to distributions, return of capital, or otherwise, as may from time to time be established in a written action or actions (each, an "Action") of the ------ General Partner providing for the issue of such series. In connection with the foregoing, the General Partner is expressly authorized, prior to issuance, to set forth in an Action or Actions providing for the issue of such series, the following: (1) The distinctive designation of such series which shall distinguish it from other series; (2) The number of Preferred Partner Interests included in such series; (3) The Preferred Partner Distribution rate (or method of determining such rate) for Preferred Partner Interests of such series and the first date upon which such Preferred Partner Distribution shall be payable; provided, however, that Preferred Partner Distributions shall be payable on -------- ------- a monthly basis to the holders of the Preferred Securities of such series as of a record date in each calendar month during which the Preferred Securities of such series are outstanding; (4) The amount or amounts which shall be paid out of the assets of the Partnership to the holders of such series of Preferred Partner Interests upon voluntary or involuntary dissolution and winding up of the Partnership; (5) The price or prices at which (the "Redemption Price"), the period ---------------- or periods within which, and the terms and conditions upon which the Preferred Partner Interests of such series may be redeemed or purchased, in whole or in part, at the option of the Partnership; -22- (6) The obligation, if any, of the Partnership to purchase or redeem Preferred Partner Interests of such series pursuant to a sinking fund or otherwise and the price or prices at which, the period or periods within which and the terms and conditions upon which the Preferred Partner Interests of such series shall be redeemed, in whole or in part, pursuant to such obligation; (7) The period or periods within which and the terms and conditions, if any (including the price or prices or the rate or rates of conversion or exchange and the terms and conditions of any adjustments thereof), upon which the Preferred Partner Interests of such series shall be convertible or exchangeable at the option of the Preferred Partner, or the Partnership, into any other Interests or securities or other property or cash or into any other series of Preferred Partner Interests; (8) The voting rights, if any, of the Preferred Partner Interests of such series in addition to those required by law or set forth herein, and any requirement for the approval by the Preferred Partner Interest, or of the Preferred Partner Interests of one or more series, or of both, as a condition to specified Action or amendments to this Agreement; and (9) Any other relative rights, powers, preferences, or limitations of the Preferred Partner Interests of the series not inconsistent with this Agreement or with applicable law. In connection with the foregoing and without limiting the generality thereof, the General Partner is hereby expressly authorized, without the vote or approval of any other Partner, to take any Action to create under the provisions of this Agreement a series of Preferred Partner Interests that was not previously outstanding. Without the vote or approval of any other Partner, the General Partner may execute, swear to, acknowledge, deliver, file, and record whatever documents may be required in connection with the issue from time to time of Preferred Partner Interests in one or more series as shall be necessary or desirable to reflect the issue of such series. The General Partner shall do all things it deems to be necessary or desirable to comply with the Delaware Act and is authorized and directed to do all permissible things it deems to be necessary or desirable in connection with any future issuance, including compliance with any statute, rule, regulation, or guideline of any federal, state, or other governmental agency or any securities exchange. Any Action or Actions taken by the General Partner pursuant to the provisions of this paragraph (b) shall be deemed an amendment and supplement to and part of this Agreement. (c) Except as otherwise provided in this Agreement or in any Action in respect of any series of the Preferred Partner Interests and as otherwise required by law, all rights to the management and control of the Partnership shall be vested exclusively in the General Partner. (d) No holder of Interests shall be entitled as a matter of right to subscribe for or purchase, or have any preemptive right with respect to, any part of any new or additional issue of Interests of any class or series whatsoever, or of securities convertible into any Interests of any class or series whatsoever, whether now or hereafter authorized and whether -23- issued for cash or other consideration or by way of distribution. Any Person acquiring Preferred Partner Interests shall be admitted to the Partnership as a Preferred Partner upon compliance with Section 2.06. Section 13.02. Terms of All Preferred Partner Interests. Notwithstanding ---------------------------------------- anything else in any Action to the contrary, all Preferred Partner Interests of the Partnership regardless of series shall have the voting rights, preferences, participating, optional and other special rights, and the qualifications, limitations, or restrictions of, and other matters relating to, the Preferred Partner Interests as set forth below in this Section 13.02. (a) Distributions. ------------- (1) The Preferred Partners shall be entitled to receive, to the extent that the Partnership has cash on hand sufficient to permit such payments and, as determined by the General Partner, funds legally available therefor, cumulative preferential cash distributions ("Preferred Partner ----------------- Distributions") at a rate per annum established by the General Partner, ------------- calculated on the basis of a 360-day year consisting of 12 months of 30 days each, and for any period shorter than a full monthly distribution period, Preferred Partner Distributions will be computed on the basis of the actual number of days elapsed in such period, and payable in United States dollars monthly in arrears on the last day of each calendar month of each year. In the event that any date on which Preferred Partner Distributions are payable is not a Business Day, then payment of such Preferred Partner Distributions will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay) except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date. Such Preferred Partner Distributions will be cumulative from the date of original issue whether or not there are profits, surplus, or other funds of the Partnership legally available for the payment of Preferred Partner Distributions, or whether they are deferred. (2) If distributions have not been paid, or set aside for payment, in full on any series of Preferred Partner Interests, the Partnership may not: (A) pay, or set aside for payment, any distributions on any other series of Preferred Partner Interests, unless the amount of any distributions paid, or set aside for payment, on any Preferred Partner Interests is paid on all Preferred Partner Interests then outstanding on a pro rata basis, on the date such distributions are paid, or set --- ---- aside for payment, so that (i) (x) the aggregate amount of distributions paid on such series of Preferred Partner Interests bears to (y) the aggregate amount of distributions paid on all such Preferred Partner Interests outstanding the same ratio as (ii) (x) the aggregate of all accumulated arrears of unpaid distributions in respect of such series of Preferred Partner Interests bears to (y) the aggregate of all accumulated arrears of unpaid -24- distributions in respect of all such Preferred Partner Interests outstanding; (B) pay, or set aside for payment, any distribution on the General Partner's Interest; or (C) redeem, purchase or otherwise acquire any other Preferred Partner Interests of such series or any other series then outstanding or any of the General Partner's Interest; until, in each case, such time as all accumulated and unpaid distributions on all series of Preferred Partner Interests shall have been paid in full for all distribution periods terminating on or prior to, in the case of clauses (A) and (B), such payment and, in the case of clause (C), the date of such redemption, purchase, or acquisition. (b) Redemption Procedures. --------------------- (1) Notice of any redemption (a "Notice of Redemption") of the -------------------- Preferred Partner Interests will be given by the Partnership by mail or delivery to each record holder of Preferred Partner Interests to be redeemed not fewer than 30 nor more than 60 days prior to the date fixed for redemption thereof, at a redemption price set forth in the related Action plus an amount equal to accumulated and unpaid Preferred Partner Distributions. For purposes of the calculation of the date of redemption and the dates on which notices are given pursuant to this paragraph (b)(i), a Notice of Redemption shall be deemed to be given on the day such notice is first mailed by first-class mail, postage prepaid, or on the date it was delivered in person, receipt acknowledged, to the holders of such Preferred Partner Interests. Each Notice of Redemption shall be addressed to the record holders of the Preferred Partner Interests at the address of the holder appearing in the books and records of the Partnership. Each Notice of Redemption may state that it is subject to receipt by the Partnership of redemption monies on or before the date fixed for redemption, and which notice shall be of no effect unless such monies are so received prior to such date. No defect in the Notice of Redemption or in the mailing or delivery thereof or publication of its contents shall affect the validity of the redemption proceedings. (2) The Partnership may not redeem any Preferred Partner Interests unless all accumulated and unpaid distributions have been paid on all Preferred Partner Interests for all monthly distribution periods terminating on or prior to the date of redemption. In the case of a partial redemption resulting from a Tax Event, the Partnership will (A) cause the global certificates representing all of such series of Preferred Partner Interests to be withdrawn from The Depository Trust Company or its successor securities depository, (B) issue certificates in definitive form representing such series of Preferred Partner Interests, and (C) redeem the series or portion of the series of Preferred Partner Interests subject to such Tax Event. Subject to applicable law, CL&P or its subsidiaries may at any time and from time to time purchase outstanding Preferred Partner Interests by tender, in the open market, or by private agreement. In the event that CL&P or its subsidiary surrenders any Preferred Partner Interests to the Partnership, the Partnership will distribute, to or -25- upon order by CL&P, Subordinated Debentures of the corresponding series in aggregate principal amount equal to the aggregate liquidation preference of the Preferred Securities so surrendered. If a partial redemption of outstanding Preferred Partner Interests would result in a delisting of a series of Preferred Partner Interests from any national securities exchange on which the series of Preferred Partner Interests is then listed, the Partnership may then only redeem the series of Preferred Partner Interests in whole. (3) If Notice of Redemption shall have been given and payment shall have been made by the Partnership to the record holders of the Preferred Partner Interests, then upon the date of such payment, all rights of the Preferred Partner Interest Owners or holders of such Preferred Partner Interests so called for redemption will cease, except the right of the holders of such securities to receive the Redemption Price, but without interest. In the event that any date fixed for redemption of Preferred Partner Interests is not a Business Day, then payment of the Redemption Price payable on such date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay), except that, if such Business Day falls in the next succeeding calendar year, such payment will be made on the immediately preceding Business Day (in each case with the same force and effect as if made on such day). In the event that payment of the Redemption Price in respect of Preferred Partner Interests is not made either by the Partnership or by CL&P pursuant to the Guaranty, distributions on such Preferred Partner Interests will continue to accrue at the then applicable rate, from the original redemption date to the date of payment, in which case the actual payment date will be considered the date fixed for redemption for purposes of calculating the Redemption Price. (c) Liquidation Distribution. If, upon any liquidation, the Liquidation ------------------------ Distribution on any series of Preferred Partner Interests can be paid only in part because the Partnership has insufficient assets available to pay in full the aggregate Liquidation Distribution on all Preferred Partner Interests, then the amounts payable directly by the Partnership on such series of Preferred Partner Interests and on all other series of Preferred Partner Interests shall be paid on a pro rata basis, so that (1) (A) the aggregate amount actually paid in respect of the Liquidation Distribution on such series bears to (B) the aggregate amount actually paid as liquidation distributions on all other Preferred Partner Interests the same ratio as (2) (A) the aggregate Liquidation Distribution on such series bears to (B) the aggregate maximum liquidation distributions on all other Preferred Partner Interests. (d) Voting Rights. The Limited Partners shall not have any right to vote ------------- on matters concerning the Partnership except as specifically set forth in this Agreement, in the Guaranty, or as otherwise required by law. If (1) the Partnership fails to pay distributions in full on any series of Preferred Partner Interests for 18 consecutive months; (2) an Event of Default under the Indenture occurs and is continuing; or (3) CL&P is in default on any of its payment or other obligations under the Guaranty, then the holders of all series of the Preferred Partner Interests outstanding, acting as a single class, will be entitled, by a vote of the majority of the aggregate stated liquidation preference of outstanding Preferred Partner -26- Interests, to appoint and authorize a special representative (the "Special ------- Representative") to enforce the Partnership's creditor rights under the - -------------- Subordinated Debentures and the Indenture against CL&P and enforce the obligations undertaken by CL&P under the Guaranty, including (but only after failure to pay distributions for 60 consecutive monthly distribution periods) to declare and pay distributions on such series of Preferred Partner Interests, the General Partner agreeing to execute and deliver such documents as may be necessary or desirable for the Special Representative to enforce such rights and obligations. Notwithstanding anything else herein, the Special Representative shall not be admitted as a partner of the Partnership and shall have no liability for the debts, obligations, or liabilities of the Partnership, except to the extent otherwise required by applicable law in order for such Special Representative to enforce the Partnership's rights under the Subordinated Debentures and the Indenture and fulfill its other duties hereunder. In furtherance of the foregoing, and without limiting the powers of any Special Representative so appointed and for the avoidance of any doubt concerning the powers of the Special Representative, any Special Representative, in its own name and as trustee of an express trust, may institute a proceeding, including, without limitation, any suit in equity, an action at law, or other judicial or administrative proceeding, to enforce the Partnership's creditor rights pursuant to the Indenture and the Guaranty directly against CL&P or any other obligor in connection with such obligations to the same extent as the Partnership and on behalf of the Partnership, and may pursue such proceeding to judgment or final decree, and enforce the same against CL&P or any other obligor in connection with such obligations and collect, out of the property, wherever situated, of CL&P or any such other obligor upon such obligations, the monies adjudged or decreed to be payable in the manner provided by law. For purposes of determining whether the Partnership has failed to pay distributions in full for 18 consecutive monthly distribution periods, distributions shall be deemed to remain in arrears, notwithstanding any payments in respect thereof, until full cumulative distributions have been or contemporaneously are declared and paid with respect to all monthly distribution periods terminating on or prior to the date of payment of such full cumulative distributions on all Preferred Partner Interests. Subject to the requirements of applicable law, not later than 30 days after such right to appoint a Special Representative arises, the General Partner will convene a general meeting for the above purpose. If the General Partner fails to convene such meeting within such 30-day period, the Preferred Partners who hold 10% of the aggregate stated liquidation preference of the outstanding Preferred Partner Interests will be entitled to convene such meeting. The provisions of this Agreement relating to the convening and conduct of general meetings of Partners will apply with respect to any such meeting. Any Special Representative so appointed shall cease to act in such capacity immediately if the Partnership (or CL&P pursuant to the Guaranty) shall have paid in full all accumulated and unpaid distributions on the Preferred Partner Interests or such default or breach, as the case may be, shall have been cured. Notwithstanding the appointment of any such Special Representative, CL&P retains all rights under the Indenture, including the right to extend the interest payment period on the Subordinated Debentures. If any proposed amendment of this Agreement provides for, or the General Partner otherwise proposes to effect (pursuant to an Action or otherwise), any action which would materially adversely affect the powers, preferences, or special rights of any series of -27- Preferred Partner Interests, then holders of such series of outstanding Preferred Partner Interests will be entitled to vote on such amendment or action of the General Partner (but not on any other amendment or action) and, in the case of an amendment which would equally adversely affect the powers, preferences, or special rights of any other series of Preferred Partner Interests, all holders of such series of Preferred Partner Interests, shall vote together as a class on such amendment or action of the General Partner (but not on any other amendment or action), and such amendment or action shall not be effective except with the approval of Preferred Partners holding not less than 66 2/3% of the aggregate stated liquidation preference of such outstanding series of Preferred Partner Interests. Except as otherwise provided under Section 11.02 or the Delaware Act, the Partnership will be dissolved and wound up only with the consent of the holders of all outstanding Preferred Partner Interests. The powers, preferences, or special rights of any Preferred Partner Interests will be deemed not to be adversely affected by the creation or issue of, and no vote will be required for the creation or issuance of, any additional series of Preferred Partner Interests or additional general partner Interests. Any required approval of Preferred Partner Interests may be given at a separate meeting of such holders convened for such purpose, at a meeting of the holders of all series of Preferred Partner Interests or pursuant to written consent. The Partnership will cause a notice of any meeting at which holders of any Preferred Partner Interests are entitled to vote, or of any matter upon which action by written consent of such holders is to be taken, to be mailed to each holder of Preferred Partner Interests. Each such notice will include a statement setting forth (a) the date of such meeting or the date by which such action is to be taken, (b) a description of any resolution proposed for adoption at such meeting on which such holders are entitled to vote or of such matter upon which written consent is sought, and (c) instructions for the delivery of proxies or consents. No vote or consent of the holders of the Preferred Partner Interests will be required for the Partnership to redeem and cancel the Preferred Partner Interests in accordance with this Agreement. Notwithstanding that holders of Preferred Partner Interests are entitled to vote or consent under any of the circumstances described above, any of the Preferred Partner Interests that are owned by CL&P or any entity owned more than 50% by CL&P, either directly or indirectly, shall not be entitled to vote or consent and shall, for the purposes of such vote or consent, be treated as if they were not outstanding. (e) Mergers. The Partnership shall not consolidate, amalgamate, merge ------- with or into, or be replaced by, or convey, transfer, or lease its properties and assets substantially as an entirety, to any corporation or other entity, except with the approval of the General Partner and the holders of 66 2/3% in aggregate stated liquidation preference of all outstanding Preferred Partner Interests or as otherwise described below. The General Partner may, without the consent of the holders of the Preferred Partner Interests, cause the Partnership to consolidate, amalgamate, merge with or into, or be replaced by, or convey, transfer, or lease its properties and assets substantially as an entirety to, a corporation, a limited liability company, limited partnership, trust, or other entity organized as such under the laws of any state of the United States of America or the District of Columbia, provided -------- -28- that (1) such successor entity either (A) expressly assumes all of the obligations of the Partnership under the Preferred Partner Interests and the other obligations of the Partnership or (B) substitutes for the Preferred Partner Interests other securities having substantially the same terms as the Preferred Partner Interests (the "Successor Securities") so long as the -------------------- Successor Securities rank, as regards participation in the profits and assets of the successor entity, at least as high as the Preferred Partner Interests rank, as regards participation in the profits and assets of the Partnership, (2) CL&P confirms in writing its obligations under the Guaranty with regard to the Successor Securities, if any are issued, (3) such consolidation, amalgamation, merger, replacement, conveyance, transfer, or lease does not cause the Preferred Partner Interests or Successor Securities to be delisted by any national securities exchange or other organization on which the Preferred Partner Interests are then listed, (4) such merger, consolidation, amalgamation, replacement, conveyance, transfer, or lease does not cause the Preferred Partner Interests or Successor Securities to be downgraded by any "nationally recognized statistical rating organization," as that term is defined by the Commission for purposes of Rule 436(g)(2) under the Securities Act, (5) such merger, consolidation, amalgamation, replacement, conveyance, transfer, or lease does not adversely affect the powers, preferences, and special rights of holders of Preferred Partner Interests or Successor Securities in any material respect, (6) such successor entity has a purpose substantially identical to that of the Partnership, and (7) prior to such merger, consolidation, amalgamation, replacement, conveyance, transfer, or lease CL&P has received an opinion of counsel (which may be regular counsel to CL&P or an Affiliate, but not an employee thereof) experienced in such matters to the effect that (A) holders of outstanding Preferred Partner Interests will not recognize any gain or loss for United States federal income tax purposes as a result of the merger, consolidation, amalgamation, replacement, conveyance, transfer or lease, (B) such successor entity will be treated as a partnership for United States federal income tax purposes, (C) following such consolidation, amalgamation, merger, replacement, conveyance, transfer, or lease, CL&P and such successor entity will be in compliance with the 1940 Act without registering thereunder as an "investment company," and (D) such merger, consolidation, amalgamation, replacement, conveyance, transfer, or lease will not adversely affect the limited liability of holders of Preferred Partner Interests or Successor Securities. ARTICLE XIV TRANSFERS --------- Section 14.01. Transfers of Preferred Partner Interests. Preferred ---------------------------------------- Partner Interests may be freely transferred by a Preferred Partner in accordance with the terms and conditions set forth in this Agreement. Any transfer or purported transfer of any Interest not made in accordance with this Agreement shall be null and void. Section 14.02. Transfer of Certificates. The General Partner shall ------------------------ provide for the registration of Certificates. Upon surrender for registration of transfer of any Certificate, the General Partner shall cause one or more new Certificates to be issued in the name of the designated transferee or transferees. Every Certificate surrendered for registration of transfer shall be accompanied by a written instrument of transfer and agreement to be bound by the terms of this Agreement in form satisfactory to the General Partner duly executed by the Preferred Partner or his attorney duly authorized in writing. Each Certificate surrendered for registration of transfer shall be cancelled by the General Partner. A -29- transferee of a Certificate shall provide the Partnership with a completed Form W-8 or such other documents or information as are requested by the Partnership for tax reporting purposes and thereafter shall be admitted to the Partnership as a Preferred Partner and shall be entitled to the rights and subject to the obligations of a Preferred Partner hereunder upon the receipt by such transferee of a Certificate. The transferor of a Certificate shall cease to be a Limited Partner at the time that the transferee of the Certificate is admitted to the Partnership as a Preferred Partner in accordance with this Section 14.02. Section 14.03. Persons Deemed Preferred Partners. The Partnership may --------------------------------- treat the Person in whose name any Certificate shall be registered on the books and records of the Partnership as the Preferred Partner and the sole holder of such Certificate for purposes of receiving distributions and for all other purposes whatsoever and, accordingly, shall not be bound to recognize any equitable or other claims to or interest in such Certificate on the part of any other Person, whether or not the Partnership shall have actual or other notice thereof. Section 14.04. Book Entry Interests. The Certificates, on original -------------------- issuance, will be issued in the form of a typewritten Certificate or Certificates representing the Book Entry Interests to be delivered to The Depository Trust Company, the initial Clearing Agency, by, or on behalf of, the Partnership. Such Certificates shall initially be registered on the books and records of the Partnership in the name of Cede & Co., the nominee of the initial Clearing Agency, and no Preferred Partner Interest Owner will receive a definitive Certificate representing such Preferred Partner Interest Owner's interests in such Certificate, except as provided in Section 14.06. Unless and until definitive, fully registered Certificates (the "Definitive Certificates") ----------------------- have been issued to the Preferred Partner Interest Owners pursuant to Section 14.06: (a) The provisions of this Section shall be in full force and effect; (b) The Partnership and the General Partner shall be entitled to deal with the Clearing Agency for all purposes of this Agreement (including the payment of distributions on the Certificates and receiving approvals, votes, or consents hereunder) and shall consider such clearing agency as the Preferred Partner and sole holder of the Certificates and shall have no obligations to the Preferred Partner Interest Owners; (c) The rights of the Preferred Partner Interest Owners shall be exercised only through the Clearing Agency and shall be limited to those established by law and agreements between such Preferred Partner Interest Owners and the Clearing Agency and/or the Clearing Agency Participants. Unless or until the Definitive Certificates are issued pursuant to Section 14.06, the initial Clearing Agency will make book entry transfers among the Clearing Agency Participants and receive and transmit payments of distributions on the Certificates to such Clearing Agency Participants; (d) To the extent that the provisions of this Section conflict with any other provisions of this Agreement, the provisions of this Section shall control; and (e) Whenever this Agreement requires or permits actions to be taken based upon approvals, votes, or consents of a percentage of the Preferred Partners, the Clearing Agency shall be deemed to represent such percentage only to the extent that it has received -30- instructions to such effect from the Preferred Partner Interest Owners and/or Clearing Agency participants owning or representing, respectively, such required percentage of the beneficial interests in the Certificates and has delivered such instructions to the General Partner. Section 14.05. Notices to Clearing Agency. Whenever a notice or other -------------------------- communication to the Preferred Partners is required under this Agreement, unless and until Definitive Certificates shall have been issued pursuant to Section 14.06, the General Partner shall give all such notices and communications specified herein to be given to the Preferred Partners to the Clearing Agency, and shall have no obligations to the Preferred Partner Interest Owners. Section 14.06. Definitive Certificates. If (1) the Clearing Agency elects ----------------------- to discontinue its services as securities depository and gives reasonable notice to the Partnership and a successor Clearing Agency is not obtained by the Partnership to act as securities depository, or (2) the Partnership elects to terminate the book entry system through the initial Clearing Agency or any successor Clearing Agency, then the Definitive Certificates shall be prepared by the Partnership. Upon surrender of the typewritten Certificate or Certificates representing the Book Entry Interests by the Clearing Agency, accompanied by registration instructions, the General Partner shall cause the Definitive Certificates to be delivered to the Preferred Partner Interest Owners in accordance with the instructions of the Clearing Agency. The General Partner shall not be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be protected in relying on, such instructions. Any Person receiving a Definitive Certificate in accordance with this Article XIV shall be admitted to the Partnership as a Preferred Partner upon receipt of such Definitive Certificate. The Clearing Agency or the nominee of the Clearing Agency, as the case may be, shall cease to be a Limited Partner of the Partnership under this Section 14.06 at the time that at least one additional Person is admitted to the Partnership as a Preferred Partner in accordance with this Section 14.06. The Definitive Certificates shall be printed, lithographed, or engraved or may be produced in any other manner as is reasonably acceptable to the General Partner, as evidenced by its execution thereof. In the event that the Partnership exercises its option to redeem only a portion of the Preferred Partner Interests of any series, the Partnership may cause the Certificate or certificates representing the Book Entry Interests to be withdrawn from the Clearing Agency and issue Definitive Certificates representing the Preferred Partner Interests of such series. The General Partner will appoint a registrar, transfer agent, and paying agent for Preferred Partner Interests represented by Definitive Certificates. Registration of transfers of Preferred Partner Interests represented by Definitive Certificates will be effected without charge by or on behalf of the Partnership, but upon payment of any tax or other governmental charges which may be imposed in relation to it. The Partnership will not be required to register or cause to be registered the transfer of Preferred Partner Interests represented by Definitive Certificates after such Preferred Partner Interests have been called for redemption. -31- ARTICLE XV GENERAL ------- Section 15.01. Power of Attorney. (a) The Class A Limited Partner and ----------------- each Preferred Partner constitutes and appoints the General Partner and the Liquidating Trustee as its true and lawful representative and attorney-in-fact, in its name, place, and stead, to make, execute, sign, acknowledge, and deliver or file (1) all instruments, documents, and certificates which may from time to time be required by any law to effectuate, implement and continue the valid and subsisting existence of the Partnership, (2) all instruments, documents, and certificates that may be required to effectuate the dissolution and termination of the Partnership in accordance with the provisions hereof and Delaware law, (3) all other amendments of this Agreement or the Certificate of Limited Partnership and other filings contemplated by this Agreement, including without limitation amendments reflecting the withdrawal of the General Partner, or the return, in whole or in part, of the contribution of any Partner, or the addition, substitution, or increased contribution of any Partner, or any action of the Partners duly taken pursuant to this Agreement whether or not such Partner voted in favor of or otherwise approved such action, and (4) any other instrument, certificate, or document required from time to time to admit a Partner, to effect its substitution as a Partner, to effect the substitution of the Partner's assignee as a Partner, or to reflect any action of the Partners provided for in this Agreement. (b) The powers of attorney granted herein (1) shall be deemed to be coupled with an interest, shall be irrevocable, and shall survive the death, insanity, incompetency, or incapacity (or, in the case of a Partner that is a corporation, association, partnership, limited liability company or trust, shall survive the merger, dissolution, or other termination of existence) of the Partner and (2) shall survive the assignment by the Partner of the whole or any portion of his Interest, except that where the assignee of the whole or any portion thereof has furnished a power of attorney, this power of attorney shall survive such assignment for the sole purpose of enabling the General Partner and the Liquidating Trustee to execute, acknowledge, and file any instrument necessary to effect any permitted substitution of the assignee for the assignor as a Partner and shall thereafter terminate. In the event that the appointment conferred in this Section 15.01 would not constitute a legal and valid appointment by any Partner under the laws of the jurisdiction in which such Partner is incorporated, established, or resident, upon the request of the General Partner or the Liquidating Trustee, such Partner shall deliver to the General Partner or the Liquidating Trustee a properly authenticated and duly executed document constituting a legal and valid power of attorney under the laws of the appropriate jurisdiction covering the matters set forth in this Section 15.01. (c) The General Partner may require a power of attorney to be executed by a transferee of a Partner as a condition of its admission as a substitute Partner. Section 15.02. Waiver of Partition. Each Partner hereby irrevocably ------------------- waives any and all rights that it may have to maintain an action for partition (or any action in the nature of partition) of any of the Partnership's property or assets. Section 15.03. Notices. Any notice or communication to a Partner ------- permitted or required to be given hereunder shall be in writing and delivered in person or mailed by first-class mail, postage prepaid. Any such notice or communication shall be deemed given -32- if in writing and delivered (1) on the date it was delivered in person to a Partner, receipt acknowledged, at its address appearing on the books and records of the Partnership, or (2) on the day it is first mailed to a Partner by first class mail, postage prepaid. Section 15.04. Entire Agreement. This Agreement, including the exhibits ---------------- annexed hereto and incorporated by reference herein, contains the entire agreement of the parties hereto and supersedes all prior agreements and understandings, oral or otherwise, among the parties hereto with respect to the matters contained herein. Section 15.05. Waivers. Except as otherwise expressly provided herein, no ------- purported waiver by any party of any breach by another party of any of his obligations, agreements, or covenants hereunder, or any part thereof, shall be effective unless made in a writing executed by the party or parties sought to be bound thereby, and no failure to pursue or elect any remedy with respect to any default under or breach of any provision of this Agreement, or any part hereof, shall be deemed to be a waiver of any other subsequent similar or different default or breach, or any election of remedies available in connection therewith, nor shall the acceptance or receipt by any party of any money or other consideration due him under this Agreement, with or without knowledge of any breach hereunder, constitute a waiver of any provision of this Agreement with respect to such or any other breach. Section 15.06. Headings. The section headings herein contained have been -------- inserted only as a matter of convenience of reference and in no way define, limit, or describe the scope or intent of any provisions of this Agreement nor in any way affect any such provisions. Section 15.07. Separability. Each provision of this Agreement shall be ------------ considered to be separable, and if, for any reason, any such provision or provisions, or any part thereof, is determined to be invalid and contrary to any existing or future applicable law, such invalidity shall not impair the operation of, or affect, those portions of this Agreement which are valid, and this Agreement shall be construed and enforced in all respects as if such invalid or unenforceable provision or provisions had been omitted. Section 15.08. Contract Construction. Whenever the content of this --------------------- Agreement permits, the masculine gender shall include the feminine and neuter genders, and reference to singular or plural shall be interchangeable with the other. References in this Agreement to particular sections of the Code or to provisions of the Delaware Act shall be deemed to refer to such sections or provisions as they may be amended after the date of this Agreement. Section 15.09. Counterparts. This Agreement may be executed in one or ------------ more counterparts and each of such counterparts for all purposes shall be deemed to be an original, but all of such counterparts, when taken together, shall constitute but one and the same instrument, binding upon all parties hereto, notwithstanding that all of such parties may not have executed the same counterpart. Section 15.10. Benefit. This Agreement shall be binding upon and inure to ------- the benefit of the parties hereto and their respective successors and assigns, but shall not be deemed for the benefit of creditors or any other Persons, nor shall it be deemed to permit -33- any assignment by a Partner of any of its rights or obligations hereunder except as expressly provided herein. Section 15.11. Further Actions. Each of the Partners hereby agrees that --------------- it shall hereafter execute and deliver such further instruments and do such further acts and things as may be required or useful to carry out the intent and purposes of this Agreement and as are not inconsistent with the terms hereof. Section 15.12. Governing Law. This Agreement shall be governed by and ------------- construed in accordance with the substantive laws of the State of Delaware, without regard to conflicts of laws. Section 15.13. Amendments. Except as otherwise expressly provided herein ---------- or as otherwise required by law, this Agreement may only be amended by a written instrument executed by the General Partner; provided, however, that any -------- ------- amendment which would adversely affect the powers, preferences, or special rights of any series of Preferred Partner Interests may be effected only as permitted by the terms of such series of Preferred Partner Interests. -34- SIGNATURES ---------- IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written. General Partner: THE CONNECTICUT LIGHT AND POWER COMPANY By _________________________________ Name: Title: Class A Limited Partner, solely to reflect its withdrawal from the Partnership: NORTHEAST UTILITIES SERVICE COMPANY By _________________________________ Name: Title: Exhibit A Certificate No. _____ CUSIP No. _____ Certificate Evidencing Preferred Partner Interests of CL&P Capital, L.P. __% Cumulative Monthly Income Preferred Securities, Series __ Liquidation preference $25 per Preferred Partner Interest CL&P Capital, L.P., a Delaware limited partnership (the "Partnership"), ----------- hereby certifies that Cede & Co. (the "Holder") is the registered owner of ------ ___________ (______________) fully paid Preferred Partner Interests of the Partnership designated the __% Cumulative Monthly Income Preferred Securities, Series ____ (liquidation preference $25 per Preferred Partner Interest) (the "Series ____ Preferred Partner Interests") representing preferred limited - ---------------------------------------- partner interests in the Partnership transferable on the books and records of the Partnership, in person or by a duly authorized attorney, upon surrender of this Certificate duly endorsed and in proper form for transfer. The powers, preferences and special rights and limitations of the Series ____ Preferred Partner Interests are set forth in, and this Certificate and the Series ____ Preferred Partner Interests represented hereby are issued and shall in all respects be subject to the terms and provisions of, the Amended and Restated Limited Partnership Agreement dated as of ___________, 199__ of the Partnership as the same may, from time to time, be amended (the "Partnership Agreement") --------------------- authorizing the issuance of the Series __ Preferred Partner Interests and determining, along with any actions of the General Partner of the Partnership as authorized under the Partnership Agreement, the powers, preferences, and other special rights and limitations, regarding distributions, voting, redemption, and otherwise and other matters relating to the Series __ Preferred Partner Interests. The Partnership will furnish a copy of the Partnership Agreement to the Holder without charge upon written request to the Partnership at its principal place of business or registered office. The Holder is entitled to the benefits of the Payment and Guaranty Agreement of The Connecticut Light and Power Company, dated as of _______, 199__ (the "Guaranty") relating to the -------- Preferred Partner Interests, and of the Indenture between The Connecticut Light and Power Company and ____________________, as Trustee, dated as of ____________, 199__ (the "Indenture"), under and pursuant to which the related --------- series of Subordinated Debentures are issued and outstanding, in either case to the extent provided therein. The Holder is further entitled to enforce such rights of the Partnership under the Indenture to the extent provided therein and in the Partnership -2- Agreement. The Partnership will furnish a copy of the Guaranty and the Indenture to the Holder without charge upon written request to the Partnership at its principal place of business or registered office. The Holder, by accepting this Certificate, is deemed to have (1) agreed that the Subordinated Debentures issued pursuant to the Indenture are subordinate and junior in right of payment to all general liabilities of The Connecticut Light and Power Company as and to the extent provided in the Indenture and (2) agreed that the Guaranty is subordinate and junior in right of payment to all general liabilities of The Connecticut Light and Power Company. Upon receipt of this Certificate, the Holder is admitted to the Partnership as a Preferred Partner, is bound by the Partnership Agreement and is entitled to the benefits thereunder. Capitalized terms used herein but not defined shall have the meaning given them in the Partnership Agreement. IN WITNESS WHEREOF, the Partnership has executed this Certificate this ____ day of ________________, 199__. CL&P CAPITAL, L.P. By The Connecticut Light and Power Company, its General Partner By_________________________________ Name: Title: ACTION BY THE GENERAL PARTNER OF CL&P CAPITAL, L.P. CREATING THE ____% CUMULATIVE MONTHLY INCOME PREFERRED SECURITIES, SERIES A Dated as of ___________ __, 199_ Pursuant to Section 13.01 of the Amended and Restated Limited Partnership Agreement of CL&P Capital, L.P. dated ____________ __, 199__ (as amended from time to time, the "Partnership Agreement"), The Connecticut Light and Power --------------------- Company ("CL&P"), as general partner (the "General Partner") of CL&P Capital, ---- --------------- L.P. (the "Partnership"), desiring to state the designations, rights, ----------- privileges, restrictions, preferences, voting rights, and other terms and conditions of a new series of Preferred Partner Interests, hereby authorizes and establishes such new series of Preferred Partner Interests having the designations, rights, privileges, restrictions, and other terms and provisions set forth below. Each capitalized term used but not defined herein shall have the meaning set forth in the Partnership Agreement. (a) Designation. [*****NUMBER OF INTERESTS IN THE SERIES*****] interests ----------- of the Partnership with an aggregate liquidation preference of $ [***** $25 TIMES NUMBER OF INTERESTS IN THE SERIES *****] of the Preferred Partner Interests of the Partnership, and a liquidation preference of $25 per Preferred Partner Interest, are hereby designated as "__% Cumulative Monthly Income Preferred Securities, Series A" (hereinafter the "Series A Preferred Partner -------------------------- Interests"). The Certificates evidencing the Series A Preferred Partner - --------- Interests shall be substantially in the form attached hereto as Exhibit A. The proceeds of the Series A Preferred Partner Interests shall be loaned to CL&P in return for the __% Subordinated Debentures, Series A, due 20__ of CL&P issued pursuant to an Indenture dated as of _______________, 199_ between CL&P and Bankers Trust Company, as Trustee (the "Indenture") and bearing interest at an --------- annual rate equal to the annual distribution rate on the Series A Preferred Partner Interests and having certain payment and redemption provisions which correspond to the payment and redemption provisions of the Series A Preferred Partner Interests (the "Series A Debentures"). ------------------- (b) Distributions on the Series A Preferred Partner Interests. --------------------------------------------------------- (1) The Preferred Partners who hold the Series A Preferred Partner Interests shall be entitled to receive, to the extent set forth in paragraph (b)(2) hereof, cumulative, preferential cash distributions at a rate per annum of ___% of the stated liquidation preference of $25 per Series A Preferred Partner Interest, calculated in accordance with Section 13.02(a)(1) of the Partnership Agreement ("Series A Preferred Partner Distributions"). Series A Preferred ------------------------------------------ Partner Distributions will be payable in United States dollars monthly in arrears on the last day of each calendar month of each year; -2- provided, however, that in the event that any date on which Series A -------- ------- Preferred Partner Distributions are payable is not a Business Day, then payment of such Series A Preferred Partner Distributions will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay) except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date. The Series A Preferred Partner Distributions will be cumulative from the date of original issue, and the cumulative portion from such date to _____________ __, 199__ shall be payable on ______________ __, 19__. (2) Series A Preferred Partner Distributions shall be paid to the extent that the Partnership has (x) funds on hand legally available therefor, as determined by the General Partner, and (y) cash on hand sufficient to permit such payments. Series A Preferred Partner Distributions will be deferred if and for so long as CL&P defers interest payments to the Partnership on the Series A Debentures. Accrued and unpaid Series A Preferred Partner Distributions will accrue additional distributions after the scheduled payment date therefor ("Additional Distributions") in respect thereof, ------------------------ to the extent permitted by law, at the distribution rate per annum for the Series A Preferred Partner Interests. Such Additional Distributions shall be payable at the time the related deferred Series A Preferred Partner Distribution is paid, but in any event by the end of such deferral period. Series A Preferred Partner Distributions will be payable to the Series A Preferred Partners as they appear on the books and records of the Partnership on the relevant record dates, which will be one Business Day prior to the relevant payment dates; provided, however, that if the Series A Preferred Partner Interests -------- ------- are not held by a securities depositary, the General Partner shall have the right to change such record dates. (c) Redemption. ---------- (1) The Series A Preferred Partner Interests are subject to redemption at the option of the General Partner, in whole or in part, from time to time, on or after _________ __, ____, at the redemption price of $25 per Series A Preferred Partner Interest plus accumulated and unpaid Series A Preferred Partner Distributions to the date fixed for redemption, together with any accrued Additional Distributions thereon (the "Redemption Price"). ---------------- (2) Upon redemption or payment at maturity of the Series A Debentures, the proceeds from such redemption or payment of the Series A Debentures shall be applied to redeem the Series A Preferred Partner Interests at the Redemption Price. (3) If at any time after the issuance of the Series A Preferred Partner Interests, an Investment Company Act Event shall occur and be continuing, the General Partner shall (A) cause the Partnership to redeem the Series A -3- Preferred Partner Interests at the Redemption Price, within 90 days following the occurrence of such Special Event, or (B) dissolve the Partnership and cause the Partnership to distribute the Series A Debentures to Holders of Series A Preferred Partner Interests in liquidation of the Partnership within 90 days following the occurrence of such Special Event; provided, however, that in the case of clause -------- ------- (B) above, the Partnership shall have received an opinion of counsel (which may be regular tax counsel to the Partnership or an affiliate, but not an employee thereof) to the effect that such Holders will not recognize any gain or loss for United States federal income tax purposes as a result of such distribution. (4) If at any time after the issuance of the Series A Preferred Partner Interests, a Tax Event shall occur and be continuing, the General Partner may (A) cause the Partnership to redeem the Series A Preferred Partner Interests at the Redemption Price, within 90 days following the occurrence of such Special Event, or (B) dissolve the Partnership and cause the Partnership to distribute the Series A Debentures to Holders of Series A Preferred Partner Interests in liquidation of the Partnership within 90 days following the occurrence of such Special Event; provided, however, that in the case of clause -------- ------- (B) above, the Partnership shall have received an opinion of counsel (which may be regular tax counsel to the Partnership or an affiliate, but not an employee thereof) to the effect that such Holders will not recognize any gain or loss for United States federal income tax purposes as a result of such distribution. (d) Liquidation Distribution. ------------------------ (1) In the event of any voluntary or involuntary dissolution, liquidation or winding up of the Partnership, holders of the Series A Preferred Partner Interests at the time outstanding will be entitled to receive out of the assets of the Partnership available for distribution to holders of Preferred Partner Interests, after satisfaction of liabilities to creditors as required by the Delaware Act and before any distribution of assets is made to holders of the general partner interests, but together with holders of every other series of Preferred Partner Interests outstanding, an amount equal to, in the case of holders of Series A Preferred Partner Interests, the aggregate of the stated liquidation preference of $25 per Series A Preferred Partner Interest plus accumulated and unpaid distributions and Additional Distributions to the date of payment (the "Liquidation ----------- Distribution"). ------------ (2) Notwithstanding the foregoing, the General Partner may distribute the Series A Debentures to Holders of Series A Preferred Partner Interests in liquidation of the Partnership pursuant to paragraph (c)(3)(B) or (c)(4)(B) hereof. After the date fixed for any such distribution, upon dissolution of the Partnership, (i) the Series A Preferred Partner Interests will no longer be deemed to be outstanding, (ii) DTC or its nominee, as the record Holder of the Series A Preferred Partner Interests, will return the registered global certificate or certificates representing the Series A Preferred Partner Interests -4- and will receive a registered global certificate or certificates representing the Series A Debentures to be delivered upon such distribution, and (iii) any certificates representing Series A Preferred Partner Interests not held by DTC or its nominee will be deemed to represent Series A Debentures having a principal amount and accrued and unpaid interest equal to the aggregate of the stated liquidation preference of, and accrued and unpaid Distributions on, such Series A Preferred Partner Interests until such certificates are presented to the General Partner or its agent for transfer or reissuance. (e) Voting Rights. The holders of the Series A Preferred Partner Interests ------------- shall have no voting rights except as provided in the Partnership Agreement. (f) Withholding. All payments by the Partnership in respect of the Series ----------- A Preferred Partner Interests will be made without withholding or deduction on account of any present or future taxes, duties or assessments imposed by the United States or any state thereof, unless such withholding or deduction is required by law. (g) Subordination. The holders of Series A Preferred Partner Interests ------------- are deemed, by acceptance of such Interests, to have (1) agreed that the Series A Debentures issued pursuant to the Indenture are subordinate and junior in right of payment to all general liabilities of CL&P as and to the extent provided in the Indenture and (2) agreed that the Guaranty relating to the Series A Preferred Partner Interests is subordinated and junior in right of payment to all general liabilities of CL&P. -5- IN WITNESS WHEREOF, the General Partner has executed this Action as of the date and year first above written. THE CONNECTICUT LIGHT AND POWER COMPANY, as General Partner By_________________________________ Name: Title: Exhibit A Certificate No. _____ CUSIP No. _____ Certificate Evidencing Preferred Partner Interests of CL&P Capital, L.P. __% Cumulative Monthly Income Preferred Securities, Series A Liquidation preference $25 per Preferred Partner Interest CL&P Capital, L.P., a Delaware limited partnership (the "Partnership"), ----------- hereby certifies that Cede & Co. (the "Holder") is the registered owner of ------ ___________ (______________) fully paid Preferred Partner Interests of the Partnership designated the __% Cumulative Monthly Income Preferred Securities, Series A (liquidation preference $25 per Preferred Partner Interest) (the "Series A Preferred Partner Interests") representing preferred limited partner - ------------------------------------- interests in the Partnership transferable on the books and records of the Partnership, in person or by a duly authorized attorney, upon surrender of this Certificate duly endorsed and in proper form for transfer. The powers, preferences and special rights and limitations of the Series A Preferred Partner Interests are set forth in, and this Certificate and the Series A Preferred Partner Interests represented hereby are issued and shall in all respects be subject to the terms and provisions of, the Amended and Restated Limited Partnership Agreement dated as of ___________, 199__ of the Partnership as the same may, from time to time, be amended (the "Partnership Agreement") --------------------- authorizing the issuance of the Series A Preferred Partner Interests and determining, along with any actions of the General Partner of the Partnership as authorized under the Partnership Agreement, the powers, preferences, and other special rights and limitations, regarding distributions, voting, redemption, and otherwise and other matters relating to the Series A Preferred Partner Interests. The Partnership will furnish a copy of the Partnership Agreement to the Holder without charge upon written request to the Partnership at its principal place of business or registered office. The Holder is entitled to the benefits of the Payment and Guaranty Agreement of The Connecticut Light and Power Company, dated as of _______, 199__ (the "Guaranty") relating to the -------- Preferred Partner Interests, and of the Indenture between The Connecticut Light and Power Company and ____________________, as Trustee, dated as of ____________, 199__ (the "Indenture"), under and pursuant to which the related --------- series of Subordinated Debentures are issued and outstanding, in either case to the extent provided therein. The Holder is further entitled to -2- enforce such rights of the Partnership under the Indenture to the extent provided therein and in the Partnership Agreement. The Partnership will furnish a copy of the Guaranty and the Indenture to the Holder without charge upon written request to the Partnership at its principal place of business or registered office. The Holder, by accepting this Certificate, is deemed to have (1) agreed that the Subordinated Debentures issued pursuant to the Indenture are subordinate and junior in right of payment to all general liabilities of The Connecticut Light and Power Company as and to the extent provided in the Indenture and (2) agreed that the Guaranty is subordinate and junior in right of payment to all general liabilities of The Connecticut Light and Power Company. Upon receipt of this Certificate, the Holder is admitted to the Partnership as a Preferred Partner, is bound by the Partnership Agreement and is entitled to the benefits thereunder. Capitalized terms used herein but not defined shall have the meaning given them in the Partnership Agreement. IN WITNESS WHEREOF, the Partnership has executed this Certificate this ____ day of ________________, 199__. CL&P CAPITAL, L.P. By The Connecticut Light and Power Company, its General Partner By_________________________________ Name: Title: EX-4.E 5 PAY AND GUARANTY AGREEMENT _________________________________________________________________ _________________________________________________________________ __________________________________________ PAYMENT AND GUARANTY AGREEMENT of THE CONNECTICUT LIGHT AND POWER COMPANY Dated as of ________ __, 199__ __________________________________________ _________________________________________________________________ _________________________________________________________________ TABLE OF CONTENTS
Page ---- ARTICLE I............................................................... 1 ARTICLE II.............................................................. 2 Section 2.01. Guarantor's Obligation to Pay....................... 2 Section 2.02. Waiver of Notice Etc................................ 3 Section 2.03. No Impairment of Guarantor's Obligations............ 3 Section 2.04. Guaranty Agreement for the Benefit of Holders....... 3 Section 2.05. Enforcement Directly Against the Guarantor.......... 4 Section 2.06. Subrogation......................................... 4 Section 2.07. Obligation Independent.............................. 4 ARTICLE III............................................................. 5 Section 3.01. Restriction on Distributions........................ 5 Section 3.02. Consolidation, Merger, Etc.......................... 5 Section 3.03. Subordination....................................... 5 ARTICLE IV.............................................................. 5 ARTICLE V............................................................... 5 Section 5.01. Successors, Assigns, Etc............................ 5 Section 5.02. Amendment........................................... 5 Section 5.03. Notices............................................. 6 Section 5.04. Guaranty Inseparable from the Preferred Securities.. 6 Section 5.05. Governing Law....................................... 6 SIGNATURE .............................................................. 7
PAYMENT AND GUARANTY AGREEMENT THIS PAYMENT AND GUARANTY AGREEMENT ("Guaranty Agreement"), dated as ------------------ of ______ __, 199_, is executed and delivered by The Connecticut Light and Power Company, a Connecticut corporation (the "Guarantor"), for the benefit of the --------- Holders (as defined below) from time to time of the Preferred Securities (as defined below) of CL&P Capital, L.P., a Delaware limited partnership ("CL&P ---- Capital"). - ------- WHEREAS, pursuant to the Amended and Restated Limited Partnership Agreement, dated as of the date hereof, of CL&P Capital (the "Partnership ----------- Agreement"), CL&P Capital may issue one or more series of Cumulative Monthly - --------- Income Preferred Securities (the "Preferred Securities"); and -------------------- WHEREAS, pursuant to the Partnership Agreement, CL&P Capital will loan the proceeds from the issuance and sale of the Preferred Securities and the capital contribution of the General Partner (as defined below) to CL&P Capital to the Guarantor, and the Guarantor will issue subordinated debentures (the "Debentures") in accordance with the Indenture (as defined below) to evidence ---------- such loan; and WHEREAS, the Guarantor desires to irrevocably and unconditionally agree, to the extent set forth herein, to pay to the Holders (as defined below) the Guaranty Payments (as defined below) and to make certain other undertakings on the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the premises and other consideration, receipt of which is hereby acknowledged, the Guarantor, intending to be legally bound hereby, agrees as follows: ARTICLE I As used in this Guaranty Agreement, each term set forth below shall, unless the context otherwise requires, have the following meaning. Each capitalized term used but not otherwise defined herein shall have the meaning assigned to such term in the Partnership Agreement. "Capital Stock" means any and all shares, interests, rights to ------------- purchase, warrants, options, participations, or other equivalents of or interests in (however designated) corporate stock, including any preferred stock. "General Partner" shall mean the Guarantor or its successor(s) as --------------- general partner of CL&P Capital. "Guaranty Payments" shall mean the following payments, without ----------------- duplication, to the extent not paid by CL&P Capital: (i) any accumulated and unpaid monthly distributions on the Preferred Securities out of monies legally available therefor held by CL&P Capital, (ii) the Redemption Price (as defined below) payable with respect to any Preferred Securities - 2 - required to be redeemed by CL&P Capital out of monies legally available therefor held by CL&P Capital, and (iii) upon a liquidation of CL&P Capital, the lesser of (a) the Liquidation Distribution (as defined below) and (b) the amount of assets of CL&P Capital available for distribution to Holders in liquidation of CL&P Capital. "Holder" shall mean any person in whose name a Preferred Security is ------ registered on the registration books maintained by CL&P Capital; provided, -------- however, that in determining whether the Holders of the requisite percentage of - ------- Preferred Securities have given any request, notice, consent, or waiver hereunder, "Holder" shall not include the Guarantor or any corporation, association, partnership, or other business entity of which more than 50% of the total voting power of shares of Capital Stock or other interests (including partnership interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers, or trustees thereof is at the time owned or controlled, directly or indirectly, by (i) the Guarantor, (ii) the Guarantor and one or more Subsidiaries, or (iii) one or more Subsidiaries. "Indenture" shall mean the Indenture, dated ________ __, 199_, --------- between the Guarantor and Bankers Trust Company, as trustee, governing the issuance by Guarantor of the Debentures. "Liquidation Distribution" shall mean the aggregate of the stated ------------------------ liquidation preference of $25 per Preferred Security and all accumulated and unpaid distributions to the date of payment. "Redemption Price" shall mean the aggregate of $25 per Preferred ---------------- Security and all accumulated and unpaid distributions to the date fixed for redemption. "Special Representative" shall mean any representative of the Holders ---------------------- appointed pursuant to Section 13.02(d) of the Partnership Agreement. "Subsidiary" means any corporation, association, partnership, or other ---------- business entity of which more than 50% of the total voting power of shares of Capital Stock or other interests (including partnership interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers, or trustees thereof is at the time owned or controlled, directly or indirectly, by (i) the Guarantor, (ii) the Guarantor and one or more Subsidiaries, or (iii) one or more Subsidiaries. ARTICLE II Section 2.01. Guarantor's Obligation to Pay. The Guarantor hereby ----------------------------- irrevocably and unconditionally agrees to pay in full to the Holders the Guaranty Payments, as and when due (except to the extent paid by CL&P Capital), to the fullest extent permitted by law, regardless of any defense, right of set- off, or counterclaim which the Guarantor may have or assert against CL&P Capital or the General Partner. The Guarantor's obligation to make a Guaranty Payment may be satisfied by direct payment by the Guarantor to the Holders or by payment of such amounts by CL&P Capital to the Holders. Notwithstanding anything to the contrary herein, the Guarantor retains all of its rights under Section 4.01(b) of the Indenture to extend the interest payment period on the Debentures (an "Extension Period") and the - ----------------- - 3 - Guarantor shall not be obligated hereunder to pay during any Extension Period any monthly distributions on the Preferred Securities which are not paid by CL&P Capital during such Extension Period. Section 2.02. Waiver of Notice Etc. The Guarantor hereby waives --------------------- notice of acceptance of this Guaranty Agreement and of any liability to which it applies or may apply, presentment, demand for payment, protest, notice of nonpayment, notice of dishonor, notice of redemption, and all other notices and demands. Section 2.03. No Impairment of Guarantor's Obligations. Except as ---------------------------------------- otherwise set forth herein, the obligations, covenants, agreements, and duties of the Guarantor under this Guaranty Agreement shall in no way be affected or impaired by reason of the happening from time to time of any of the following: (1) the release or waiver, by operation of law or otherwise, of the performance or observance by CL&P Capital of any express or implied agreement, covenant, term, or condition relating to the Preferred Securities to be performed or observed by CL&P Capital; (2) the extension of time for the payment by CL&P Capital of all or any portion of the distributions, Redemption Price, Liquidation Distribution, or any other sums payable under the terms of the Preferred Securities or the extension of time for the performance of any other obligation under, arising out of, or in connection with, the Preferred Securities; (3) any failure, omission, delay, or lack of diligence on the part of the Holders or the Special Representative to enforce, assert, or exercise any right, privilege, power, or remedy conferred on the Holders or the Special Representative pursuant to the terms of the Preferred Securities, or any action on the part of CL&P Capital granting indulgence or extension of any kind; (4) the voluntary or involuntary liquidation, dissolution, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition, or readjustment of debt of, or other similar proceedings affecting, CL&P Capital or any of the assets of CL&P Capital; (5) any invalidity of, or defect or deficiency in, any of the Preferred Securities; or (6) the settlement or compromise of any obligation guaranteed hereby or hereby incurred. There shall be no obligation to the Holders to give notice to or obtain the consent of the Guarantor with respect to the occurrence of any of the foregoing. Section 2.04. Guaranty Agreement for the Benefit of Holders. The --------------------------------------------- Guarantor expressly acknowledges that (i) this Guaranty Agreement will be deposited with the General Partner to be held for the benefit of the Holders; (ii) in the event of the appointment of a - 4 - Special Representative, the Special Representative may enforce this Guaranty Agreement for such purpose; (iii) if no Special Representative has been appointed, the General Partner has the right to enforce this Guaranty Agreement on behalf of the Holders; (iv) the Holders of not less than 10% in aggregate stated liquidation preference of the Preferred Securities have the right to direct the time, method, and place of conducting any proceeding for any remedy available in respect of this Guaranty Agreement including the giving of directions to the General Partner or the Special Representative as the case may be; and (v) if the General Partner or the Special Representative fails to enforce this Guaranty Agreement as above provided, any Holder may institute a legal proceeding directly against the Guarantor to enforce its rights under this Guaranty Agreement, without first instituting a legal proceeding against CL&P Capital or any other person or entity. Section 2.05. Enforcement Directly Against the Guarantor. This is a ------------------------------------------ guaranty of payment and not of collection. A Holder or the Special Representative may enforce this Guaranty Agreement directly against the Guarantor, and the Guarantor will waive any right or remedy to require that any action be brought against CL&P Capital or any other person or entity before proceeding against the Guarantor. The Guarantor agrees that this Guaranty Agreement shall not be discharged except by payment of the Guaranty Payments in full (to the extent not paid by CL&P Capital) and by complete performance of all obligations of the Guarantor contained in this Guaranty Agreement. Section 2.06. Subrogation. The Guarantor will be subrogated to all rights ----------- of the Holders against CL&P Capital in respect of any amounts paid to the Holders by the Guarantor under this Guaranty Agreement; provided, however, that -------- ------- the Guarantor hereby releases the Holders from all, and agrees not to assert or enforce (whether by or in a legal or equitable proceeding or otherwise) any, "claims" (as defined in Section 101(5) of the United States Bankruptcy Code) against CL&P Capital, whether arising under applicable law or otherwise, to which the Guarantor is or would at any time be entitled (by virtue of its obligations hereunder or any payment made pursuant hereto, including any such claims to which the Guarantor may be entitled as a result of any right of subrogation or any indemnity, reimbursement or other agreement); provided -------- further that to the extent such rights are not so released, the Guarantor shall not (except to the extent required by mandatory provisions of law) exercise any such rights (including by way of subrogation or any indemnity, reimbursement or other agreement), in all cases as a result of a payment under this Guaranty Agreement, if, at the time of any such payment, any amounts are due and unpaid under this Guaranty Agreement. To the extent that any amounts shall be paid to the Guarantor in violation of the preceding sentence, such amounts shall be held in trust by the Guarantor for the benefit of the Holders and not commingled with any of the Guarantor's other funds and the Guarantor agrees to pay over such amounts to the Holders. Section 2.07. Obligation Independent. The Guarantor acknowledges that its ---------------------- obligations hereunder are independent of the obligations of CL&P Capital with respect to the Preferred Securities and that the Guarantor shall be liable as principal and sole debtor hereunder to make Guaranty Payments pursuant to the terms of this Guaranty Agreement notwithstanding the occurrence of any event referred to in subsections (1) through (6), inclusive, of Section 2.03 hereof. - 5 - ARTICLE III Section 3.01. Restriction on Distributions. So long as any Preferred ---------------------------- Securities remain outstanding, neither the Guarantor nor any Subsidiary shall declare or pay any dividend on, or redeem, purchase, acquire, or make a liquidation payment with respect to, any of its Capital Stock (other than dividends paid by a wholly-owned Subsidiary) if at such time the Guarantor shall be in default with respect to its payment or other obligations hereunder or if there shall have occurred and be continuing any Default or Event of Default under the Indenture. The Guarantor shall take all actions necessary to ensure the compliance of any Subsidiaries with this Section 3.01. Section 3.02. Consolidation, Merger, Etc. So long as any Preferred -------------------------- Securities are outstanding, the Guarantor agrees to maintain its corporate existence; provided that the Guarantor may consolidate with or merge with or -------- into, or sell, convey, transfer, or lease all or substantially all of its assets (either in one transaction or a series of transactions) to, any person, corporation, partnership, limited liability company, joint venture association, joint stock company, trust, or unincorporated association if such entity formed by or surviving such consolidation or merger or to which such sale, conveyance, transfer, or lease shall have been made, if other than the Guarantor, (i) is organized and existing under the laws of the United States of America or any state thereof or the District of Columbia, and (ii) shall expressly assume all the obligations of the Guarantor under this Agreement. Section 3.03. Subordination. This Guaranty Agreement will constitute ------------- an unsecured obligation of the Guarantor and will rank subordinate and junior in right of payment to all general liabilities of the Guarantor. ARTICLE IV This Guaranty Agreement shall terminate and be of no further force and effect upon full payment of the Redemption Price of all Preferred Securities then outstanding or upon full payment of the amounts payable to the Holders upon liquidation of CL&P Capital; provided, however, that this Guaranty Agreement -------- ------- shall continue to be effective or shall be reinstated, as the case may be, if at any time any Holder must restore payments of any sums paid under the Preferred Securities or under this Guaranty Agreement for any reason whatsoever. ARTICLE V Section 5.01. Successors, Assigns, Etc. All guaranties and ------------------------ agreements contained in this Guaranty Agreement shall bind the successors, assigns, receivers, trustees, and representatives of the Guarantor and shall inure to the benefit of the Holders. Except as provided in Section 3.02, Guarantor may not assign its obligations hereunder without the prior approval of the Holders of not less than 66 2/3% of the aggregate stated liquidation preference of all Preferred Securities then outstanding. Section 5.02. Amendment. This Guaranty Agreement may only be amended --------- by a written instrument executed by the Guarantor; provided that, so long as any -------- of the Preferred Securities remain outstanding, any such amendment that adversely affects the Holders, any - 6 - termination of this Guaranty Agreement, and any waiver of compliance with any covenant hereunder shall be effected only with the prior approval of the Holders of not less than 66 2/3% of the aggregate liquidation preference of all Preferred Securities then outstanding. Section 5.03. Notices. Any notice or communication to the Guarantor ------- shall be in writing and delivered in person or mailed by first-class mail, postage prepaid, addressed as follows: The Connecticut Light and Power Company Selden Street Berlin, Connecticut 06037 Attention: _______________________ The Guarantor, by giving notice to the General Partner or Special Representative, may designate additional or different addresses for subsequent notices or communications. All notices, requests, or other communications required or permitted to be given hereunder to the Holders shall be deemed given if in writing and delivered by the Guarantor in the same manner as notices sent by CL&P Capital to the Holders. Section 5.04. Guaranty Inseparable from the Preferred Securities. -------------------------------------------------- This Guaranty Agreement is solely for the benefit of the Holders and is not separately transferable from the Preferred Securities. Section 5.05. Governing Law. This Guaranty Agreement shall be ------------- governed by and construed and interpreted in accordance with the laws of the State of Connecticut without giving effect to conflict of law principles thereof. - 7 - THIS GUARANTY AGREEMENT is executed as of the day and year first above written. THE CONNECTICUT LIGHT AND POWER COMPANY By:______________________________ Name: Title: EX-5 6 OPINION OF DAY, BERRY & HOWARD/LEGALITY Exhibit (5) November 18, 1994 The Connecticut Light and Power Company Selden Street Berlin, CT 06037 CL&P Capital, L.P. Selden Street Berlin, CT 06037 Ladies and Gentlemen: We are acting as counsel to The Connecticut Light and Power Company, a Connecticut corporation (the "Company"), and CL&P Capital, L.P., a Delaware limited partnership (the "Partnership"), in connection with (i) the proposed issuance and sale by the Company from time to time of up to $[125,000,000] in aggregate principal amount of Junior Subordinated Deferrable Interest Debentures (the "Debentures"), in one or more series, to be issued pursuant to an Indenture between the Company and the Bankers Trust Company, as trustee (the "Indenture"), (ii) the proposed issuance and sale by the Partnership from time to time of up to $125,000,000 of its preferred securities, representing preferred limited partner interests (the "Preferred Securities"), in one or more series, pursuant to an Amended and Restated Limited Partnership Agreement and one or more actions thereunder (collectively, the "Limited Partnership Agreement"), and (iii) the Company's proposed issuance of its Payment and Guaranty Agreement (the "Guaranty") pursuant to which it guarantees the payment by the Partnership of distributions with respect to the Preferred Securities and of amounts due upon liquidation of the Partnership or redemption of the Preferred Securities, to the extent set forth in the Guaranty, all as contemplated by the Registration Statement on Form S-3 to be filed by the Company and the Partnership with the Securities and Exchange Commission for the registration of the Debentures, the Preferred Securities, and the Guaranty under the Securities Act of 1933, as amended (the "Act"). As described in the Registration Statement, the Company will issue the Debentures to the Partnership in connection with the issuance of Preferred Securities. If Preferred Securities are issued by the Partnership, the proceeds therefrom, together with the capital contribution of the Company, as the Partnership's general partner, will be used to purchase the Debentures. In connection with the foregoing, we are of the opinion that: (a) All action necessary to make valid the proposed issuance of the Debentures by the Company will have been taken when: 1. The Registration Statement, as it may be amended, shall have become effective; 2. The Indenture shall have been qualified under the Trust Indenture Act of 1939, as amended; 3. Appropriate orders authorizing the issuance and sale of the Debentures by the Company shall have been entered by the State November 18, 1994 Page 2 of Connecticut Department of Public Utility Control and the issuance and sale shall be made in conformity with the terms of such orders; 4. The Board of Directors of the Company shall have duly adopted appropriate resolutions establishing one or more series of Debentures, fixing certain of the terms thereof, authorizing the execution and delivery of one or more supplemental indentures with respect to the series of Debentures, authorizing the execution and delivery of the Debentures and authorizing or ratifying such other corporate acts as may be necessary in connection with the issuance and sale of the Debentures; 5. The Indenture and any supplemental indentures relating to a particular series of Debentures shall have been executed and delivered; and 6. The Debentures shall have been appropriately issued, executed, authenticated, and delivered for the consideration contemplated by, and otherwise in conformity with, the acts, proceedings and documents referred to above. (b) When the steps set forth in paragraph (a) shall have been taken, the Debentures will be legal, valid and binding obligations of the Company enforceable in accordance with their terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization or other laws limiting creditors' rights generally or by equitable principles relating to the availability of remedies; provided, however, that in rendering the above opinion, we express no opinion as to the effect, if any, of the usury laws of any state upon the enforceability of rights of the holders of the Debentures. (c) All action necessary to make valid the proposed issuance of the Preferred Securities by the Partnership will have been taken when: 1. The steps set forth in paragraph (a) shall have been taken; 2. Appropriate orders authorizing the issuance and sale of the Preferred Securities by the Partnership shall have been entered by the State of Connecticut Department of Public Utility Control and the issuance and sale shall be made in conformity with the terms of such orders; 3. The Board of Directors of the Company, acting in its capacity as general partner of the Partnership, shall have approved the November 18, 1994 Page 3 number, characteristics, rights, and preferences, and terms of the sale, of the Preferred Securities and any series thereof in accordance with the resolutions adopted by the Company's Board of Directors authorizing the issuance and sale of the Preferred Securities and the Limited Partnership Agreement; 4. The Limited Partnership Agreement shall have been executed and delivered and all necessary partnership action required on the part of the Partnership for the issuance and sale of the Preferred Securities and any series thereof shall have been duly taken; and 5. The Preferred Securities and any series thereof shall have been appropriately issued and delivered for the consideration contemplated by, and otherwise in conformity with, the acts, proceedings and documents referred to above. (d) When the steps set forth in paragraph (c) shall have been taken, the Preferred Securities will have been duly issued and be validly outstanding and will be fully paid and nonassessable limited partner interests in the Partnership. (e) All action necessary to make valid the proposed issuance by the Company of the Guaranty shall have been taken when: 1. The steps set forth in paragraphs (a) and (c) above have been taken; 2. Appropriate orders authorizing the Company to enter into the Guaranty shall have been entered by the State of Connecticut Department of Public Utility Control; 3. The Board of Directors of the Company shall have approved the terms of the Guaranty in accordance with the resolutions adopted by the Company's Board of Directors authorizing the execution and delivery by the Company of the Guaranty; and 4. The Guaranty shall have been duly executed and delivered in conformity with the acts, proceedings and documents referred to above. (f) When the steps set forth in paragraph (e) shall have been taken, the Guaranty will be the legal, valid and binding obligation of the Company enforceable in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization or other laws limiting creditors' rights generally or by equitable principles relating to the availability of remedies. November 18, 1994 Page 4 We hereby authorize and consent to the use of this opinion as Exhibit (5) of the Registration Statement and authorize and consent to the references to our firm under the caption "Legal Opinions and Experts" in the preliminary Prospectus constituting a part thereof. In giving such consent, we do not thereby admit that we are within the category of persons whose consent is required pursuant to Section 7 of the Act or the rules and regulations of the Securities and Exchange Commission. Very truly yours, /s/Day, Berry & Howard EX-8 7 OPINION OF DAY, BERRY & HOWARD/TAX Exhibit (8) November 18, 1994 The Connecticut Light and Power Company Selden Street Berlin, CT 06037 CL&P Capital, L.P. Selden Street Berlin, CT 06037 Ladies and Gentlemen: We are acting as counsel to The Connecticut Light and Power Company, a Connecticut corporation (the "Company"), and CL&P Capital, L.P., a Delaware limited partnership (the "Partnership"), in connection with (i) the proposed issuance and sale by the Company from time to time of up to $[125,000,000] in aggregate principal amount of Junior Subordinated Deferrable Interest Debentures (the "Debentures"), in one or more series, (ii) the proposed issuance and sale by the Partnership from time to time of up to $125,000,000 of its preferred securities, representing preferred limited partner interests (the "Preferred Securities"), in one or more series, and (iii) the Company's proposed issuance of its Payment and Guaranty Agreement (the "Guaranty") pursuant to which it guarantees the payment by the Partnership of distributions with respect to the Preferred Securities and of amounts due upon liquidation of the Partnership or redemption of the Preferred Securities, to the extent set forth in the Guaranty, all as contemplated by the Registration Statement on Form S-3 to be filed by the Company and the Partnership with the Securities and Exchange Commission for the registration of the Debentures, the Preferred Securities, and the Guaranty under the Securities Act of 1933, as amended (the "Act"). In connection therewith, we hereby confirm our opinions as set forth under the caption "United States Taxation" (other than under the subcaption "Introduction") in the preliminary Prospectus Supplement for the Debentures, Preferred Securities, and the Guaranty that constitute a part of the Registration Statement (the "Preliminary Prospectus Supplement"). We hereby authorize and consent to use of this opinion as Exhibit (8) of the Registration Statement and authorize and consent to references to our firm in the Registration Statement and in the preliminary Prospectus and Preliminary Prospectus Supplement constituting a part thereof. In giving such consent, we do not admit that we are within the category of persons whose consent is required pursuant to Section 7 of the Act or the rules and regulations of the Securities and Exchange Commission. Very truly yours, /s/Day, Berry & Howard EX-12.A 8 EARNINGS AND FIXED CHARGES
Exhibit (12)(a) THE CONNECTICUT LIGHT AND POWER COMPANY RATIO OF EARNINGS TO FIXED CHARGES Twelve Months Ended Year Ended December 31, 30-Sep-94 1989 1990 1991 1992 1993 (unaudited) -------------------------------------------------------------------------------- Earnings Income from Continuing Operations $207,875 $224,783 $240,818 $206,714 $143,702 (a) $204,953 Current Income Taxes 78,459 72,843 52,499 88,926 159,876 162,526 Deferred Income Taxes 29,365 34,291 108,754 66,391 (20,188) 21,629 -------------------------------------------------------------------------------- Earnings before Income Taxes 315,699 331,917 402,071 362,031 283,390 389,108 Less: Undistributed Income of less than fifty percent owned companies 1,253 957 611 95 234 1,689 Fixed Charges 237,386 216,842 198,000 184,407 165,213 147,165 -------------------------------------------------------------------------------- Earnings Available for Fixed Charges 551,832 547,802 599,460 546,343 448,369 534,584 ================================================================================ Fixed Charges: Interest on Long Term Debt 186,301 176,940 162,307 145,066 126,850 113,013 Amortization of debt discount and expense, less premium 3,158 3,248 3,949 6,248 7,412 9,052 Interest on Short Term Debt 9,269 4,913 6,208 3,679 6,111 6,453 Other Interest 5,554 4,294 789 5,659 5,423 137 Portion of rents representative of the interest factor 33,104 27,447 24,747 23,755 19,417 18,510 -------------------------------------------------------------------------------- Total Fixed Charges 237,386 216,842 198,000 184,407 165,213 147,165 Ratio of Earnings to Fixed Charges 2.32 2.53 3.02 2.96 2.71 3.63 ================================================================================
(a) Excludes the cumulative effect of an accounting change in 1993 of $47.7 million. EX-12.B 9 EARNINGS AND FIXED CHARGES & PREFERRED STOCK DIVIDENDS
Exhibit (12)(b) THE CONNECTICUT LIGHT AND POWER COMPANY RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDEND REQUIREMENTS Twelve Months Ended Year Ended December 31, 30-Sep-94 1989 1990 1991 1992 1993 (unaudited) --------------------------------------------------------------------- Earnings: Income from Continuing Operations $207,875 $224,783 $240,818 $206,714 $143,702 (b) $ 204,953 Current Income Taxes 78,459 72,843 52,499 88,926 159,876 162,526 Deferred Income Taxes 29,365 34,291 108,754 66,391 (20,188) 21,629 --------------------------------------------------------------------- Earnings before Income Taxes 315,699 331,917 402,071 362,031 283,390 389,108 Less: Undistributed Income of less than fifty percent owned companies 1,253 957 611 95 234 1,689 Fixed Charges 237,386 216,842 198,000 184,407 165,213 147,165 --------------------------------------------------------------------- Earnings Available for Fixed Charges 551,832 547,802 599,460 546,343 448,369 534,584 ===================================================================== Fixed Charges: Interest on Long Term Debt 186,301 176,940 162,307 145,066 126,850 113,013 Amortization of debt discount and expense, less premium 3,158 3,248 3,949 6,248 7,412 9,052 Interest on Short Term Debt 9,269 4,913 6,208 3,679 6,111 6,453 Other Interest 5,554 4,294 789 5,659 5,423 137 Portion of rents representative of the interest factor 33,104 27,447 24,747 23,755 19,417 18,510 --------------------------------------------------------------------- Total Fixed Charges 237,386 216,842 198,000 184,407 165,213 147,165 Preferred Dividend Requirements (a) 44,934 52,224 57,683 55,992 57,547 47,890 --------------------------------------------------------------------- Total Fixed Charges and Preferred Dividends 282,320 269,066 255,683 240,399 222,760 195,055 ===================================================================== Ratio of Earnings to Combined Fixed Charges and Preferred Dividends 1.95 2.03 2.34 2.27 2.01 2.74 ===================================================================== (a) Preferred Dividends 29,581 35,358 34,541 31,977 29,182 25,225 Ratio of Earnings before Income Taxes to Income 1.519 1.477 1.670 1.751 1.972 1.89852541 Preferred Dividend Requirements 44,934 52,224 57,683 55,992 57,547 47,890 --------------------------------------------------------------------
(b) Excludes the cumulative effect of an accounting change in 1993 of $47.7 million. EX-23.A 10 ARTHUR ANDERSEN CONSENT CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS ----------------------------------------- As independent public accountants, we hereby consent to the incorporation by reference in this registration statement of our reports dated February 18, 1994, included or incorporated by reference in The Connecticut Light and Power Company's Form 10-K for the year ended December 31, 1993 and to all references to our Firm included in this registration statement. Arthur Andersen LLP Hartford, Connecticut November 18, 1994 EX-25 11 FORM T-1/BANKERS TRUST - -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ----------------------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305 (b)(2) ----- ---------------------------------- BANKERS TRUST COMPANY (Exact name of trustee as specified in its charter) NEW YORK 13-4941247 (Jurisdiction of incorporation (I.R.S. Employer if not a U.S. national bank) Identification no.) FOUR ALBANY STREET NEW YORK, NEW YORK 10006 (Address of principal (Zip Code) executive offices) ------------------------- THE CONNECTICUT LIGHT AND POWER COMPANY (Exact name of obligor as specified in the charter) CONNECTICUT 06-030850 (State or other jurisdiction (I.R.S. employer of incorporation or organization) Identification no.) SELDEN STREET BERLIN ,CONNECTICUT 06037 (Address of principal executive offices) (Zip Code) ----------------------- SUBORDINATED DEBENTURES (Title of the indenture securities) - -------------------------------------------------------------------------------- -2- ITEM 1. GENERAL INFORMATION. Furnish the following information as to the trustee. (a) Name and address of each examining or supervising authority to which it is subject.
NAME ADDRESS ---- ------- Federal Reserve Bank (2nd District) New York, N.Y. Federal Deposit Insurance Corporation Washington, D.C. New York State Banking Department Albany, N.Y.
(b) Whether it is authorized to exercise corporate trust powers. Yes. ITEM 2. AFFILIATIONS WITH OBLIGOR. If the obligor is an affiliate of the Trustee, describe each such affiliation. None. ITEM 16. LIST OF EXHIBITS. EXHIBIT 1 - Restated Organization Certificate of Bankers Trust Company dated August 7, 1990 and Certificate of Amendment of the Organization Certificate of Bankers Trust Company dated March 28, 1994 - Incorporated herein by reference to Exhibit 1 filed with Form T-1 Statement, Registration No. 33-79862. EXHIBIT 2 - Certificate of Authority to commence business - Incorporated herein by reference to Exhibit 2 filed with Form T-1 Statement, Registration No. 33-21047. EXHIBIT 3 - Authorization of the Trustee to exercise corporate trust powers - Incorporated herein by reference to Exhibit 2 filed with Form T-1 Statement, Registration No. 33-21047. EXHIBIT 4 - A copy of existing By-Laws of Bankers Trust Company, dated as amended on September 21, 1993. - Incorporated herein by reference to Exhibit 4 filed with Form T-1 Statement, Registration No. 33-52359. -3- EXHIBIT 5 - Not applicable. EXHIBIT 6 - Consent of Bankers Trust Company required by Section 321(b) of the Act. - Incorporated herein by reference to Exhibit 4 filed with Form T-1 Statement, Registration No. 22-18864. EXHIBIT 7 - A copy of the latest report of condition of Bankers Trust Company dated as of June 30, 1994 - Incorporated herein by reference to Exhibit 7 filed with Form T-1 Statement, Registration 33-83618 EXHIBIT 8 - Not Applicable EXHIBIT 9 - Not Applicable SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939 the trustee, Bankers Trust Company, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 15th day of November, 1994. BANKERS TRUST COMPANY By: /s/ Scott Thiel -------------------- Scott Thiel Assistant Treasurer EX-99 12 CONNECTICUT STOCK CORPORATION ACT/SECTION 33-320A Exhibit (99) SEC. 33-320a. INDEMNIFICATION OF SHAREHOLDERS, OFFICERS, EMPLOYEES AND CERTAIN OTHER PARTIES BY A CORPORATION. (a) As used in this section: (1) "Agent" means any person who is or was an agent of the corporation and any person who while an agent of the corporation, is or was serving at the request of the corporation as a director, officer, partner, trustee, employee or agent of another enterprise. (2) "Corporation" includes any domestic or foreign corporation or any domestic or foreign predecessor entity of the corporation in a merger, consolidation or other transaction in which the predecessor's existence ceased upon consummation of such transaction. (3) "Director" means any person who is or was a director of the corporation and any person who, while a director of the corporation, is or was serving at the request of the corporation as a director, officer, partner, trustee, employee or agent of another enterprise or as a fiduciary of an employee benefit plan or trust maintained for the benefit of employees of the corporation or employees of any other enterprise. (4) "Eligible outside party" means any person who, although not a shareholder, director, officer, employee or agent of the corporation, is or was serving solely at the request of the corporation as a director, officer, partner, trustee, employee or agent of another enterprise. (5) "Employee" means any person who is or was an employee of the corporation and any person who, while an employee of the corporation, is or was serving at the request of the corporation as a director, officer, partner, trustee, employee or agent of another enterprise or as a fiduciary of an employee benefit plan or trust maintained for the benefit of employees of the corporation or employees of any other enterprise. (6) "Enterprise" means any other foreign or domestic corporation, partnership, joint venture, trust or other enterprise, other than an employee benefit plan or trust. (7) "Expenses" include attorneys' fees. (8) "Officer" means any person who is or was an officer of the corporation and any person who, while an officer of the corporation, is or was serving at the request of the corporation as a director, officer, partner, trustee, employee or agent of another enterprise or as a fiduciary of an employee benefit plan or trust maintained for the benefit of employees of the corporation or employees of any other enterprise. (9) "Party" includes a person who was, is, or is threatened to be made, a defendant or respondent in a proceeding. (10) "Proceeding" means any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, and shall include any appeal therein. (11) "Shareholder" means any person who is or was a shareholder of the corporation and any person who, while a shareholder of the corporation, is or was serving -2- at the request of the corporation as a director, officer, partner, trustee, employee or agent of another enterprise. (b) Except as otherwise provided in this section, a corporation shall indemnify any person made a party to any proceeding, other than an action by or in the right of the corporation, by reason of the fact that he, or the person whose legal representative he is, is or was a shareholder, director, officer, employee or agent of the corporation, or an eligible outside party, against judgments, fines, penalties, amounts paid in settlement and reasonable expenses actually incurred by him, and the person whose legal representative he is, in connection with such proceeding. The corporation shall not so indemnify any such person unless (1) such person, and the person whose legal representative he is, was successful on the merits in the defense of any proceeding referred to in this subsection, or (2) it shall be concluded as provided in subsection (d) of this section that such person, and the person whose legal representative he is, acted in good faith and in a manner he reasonably believed to be in the best interests of the corporation or, in the case of a person serving as a fiduciary of an employee benefit plan or trust, either in the best interests of the corporation or in the best interests of the participants and beneficiaries of such employee benefit plan or trust and consistent with the provisions of such employee benefit plan or trust and, with respect to any criminal action or proceeding, that he had no reasonable cause to believe his conduct was unlawful, or (3) the court, on application as provided in subsection (e) of this section, shall have determined that in view of all the circumstances such person is fairly and reasonably entitled to be indemnified, and then for such amount as the court shall determine; except that, in connection with an alleged claim based upon his purchase or sale of securities of the corporation or of another enterprise, which he serves or served at the request of the corporation, the corporation shall only indemnify such person after the court shall have determined, on application as provided in subsection (e) of this section, that in view of all the circumstances such person is fairly and reasonably entitled to be indemnified, and then for such amount as the court shall determine. The termination of any proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent shall not, of itself, create a presumption that the person did not act in good faith or in a manner which he did not reasonably believe to be in the best interests of the corporation or of the participants and beneficiaries of such employee benefit plan or trust and consistent with the provisions of such employee benefit plan or trust, or, with respect to any criminal action or proceeding, that he had reasonable cause to believe that his conduct was unlawful. (c) Except as otherwise provided in this section, a corporation shall indemnify any person made a party to any proceeding, by or in the right of the corporation, to procure a judgment in its favor by reason of the fact that he, or the person whose legal representative he is, is or was a shareholder, director, officer, employee or agent of the corporation, or an eligible outside party, against reasonable expenses actually incurred by him in connection with such proceeding in relation to matters as to which such person, or the person whose legal representative he is, is finally adjudged not to have breached his duty to the corporation, or where the court, on application as provided in subsection (e) of this section, shall have determined that in view of all the circumstances such person is fairly and reasonably entitled to be indemnified, and then for such amount as the court shall determine. The corporation shall not so indemnify any such person for amounts paid to the corporation, to a plaintiff or to counsel for a plaintiff in settling or otherwise disposing of a proceeding, -3- with or without court approval; or for expenses incurred in defending a proceeding which is settled or otherwise disposed of without court approval. (d) The conclusion provided for in subsection (b) of this section may be reached by any one of the following: (1) The board of directors of the corporation by a consent in writing signed by a majority of those directors who were not parties to such proceeding; (2) independent legal counsel selected by a consent in writing signed by a majority of those directors who were not parties to such proceeding; (3) in the case of any employee or agent who is not an officer or director of the corporation, the corporation's general counsel; or (4) the shareholders of the corporation by the affirmative vote of at least a majority of the voting power of shares not owned by parties to such proceeding, represented at an annual or special meeting of shareholders, duly called with notice of such purpose stated. Such person shall also be entitled to apply to a court for such conclusion, upon application as provided in subsection (e), even though the conclusion reached by any of the foregoing shall have been adverse to him or to the person whose legal representative he is. (e) Where an application for indemnification or for a conclusion as provided in this section is made to a court, it shall be made to the court in which the proceeding is pending or to the superior court for the judicial district where the principal office of the corporation is located. The application shall be made in such manner and form as may be required by the applicable rules of the court or, in the absence thereof, by direction of the court. The court may also direct that notice be given in such manner as it may require at the expense of the corporation to the shareholders of the corporation and to such other persons as the court may designate. In the case of an application to a court in which a proceeding is pending in which the person seeking indemnification is a party by reason of the fact that he, or the person whose legal representative he is, is or was serving at the request of the corporation as a director, partner, trustee, officer, employee or agent of another enterprise, or as a fiduciary of an employee benefit plan or trust maintained for the benefit of employees of any other enterprise, timely notice of such application shall be given by such person to the corporation. (f) Expenses which may be indemnifiable under this section incurred in defending a proceeding may be paid by the corporation in advance of the final disposition of such proceeding as authorized by the board of directors upon agreement by or on behalf of the shareholder, director, officer, employee, agent or eligible outside party, or his legal representative, to repay such amount if he is later found not entitled to be indemnified by the corporation as authorized in this section. (g) A corporation shall not indemnify any shareholder, director, officer, employee, agent or eligible outside party, other than a shareholder, director, officer, employee, agent or eligible outside party who is or was serving at the request of the corporation as a director, officer, partner, trustee, employee or agent of another enterprise, against judgments, fines, penalties, amounts paid in settlement and expenses to an extent either greater or less than that authorized in this section. No provision made a part of the certificate of incorporation, the bylaws, a resolution of shareholders or directors, an agreement, or otherwise on or after October 1, 1982, shall be valid unless consistent with this section. Notwithstanding the foregoing, the corporation may procure insurance providing greater indemnification and may share the premium cost with any shareholder, -4- director, officer, employee, agent or eligible outside party on such basis as may be agreed upon. The rights and remedies provided in this section shall be exclusive. -----END PRIVACY-ENHANCED MESSAGE-----