-----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, YWrZT4bHF9c28I+eY8fXm6RHUYxn50LNsoNVfqcV/ndnB6oPDR95L7u0S15aU8XR D06u6e0wTSqYONdOGQujhA== 0000906602-94-000029.txt : 19940505 0000906602-94-000029.hdr.sgml : 19940505 ACCESSION NUMBER: 0000906602-94-000029 CONFORMED SUBMISSION TYPE: U-1/A PUBLIC DOCUMENT COUNT: 9 FILED AS OF DATE: 19940502 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PUBLIC SERVICE CO OF NEW HAMPSHIRE CENTRAL INDEX KEY: 0000315256 STANDARD INDUSTRIAL CLASSIFICATION: 4911 IRS NUMBER: 020181050 STATE OF INCORPORATION: NH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: U-1/A SEC ACT: 1935 Act SEC FILE NUMBER: 070-08367 FILM NUMBER: 94525738 BUSINESS ADDRESS: STREET 1: 1000 ELM ST CITY: MANCHESTER STATE: NH ZIP: 03105 BUSINESS PHONE: 6036694000 MAIL ADDRESS: STREET 1: 107 SELDON ST CITY: BERLIN STATE: CT ZIP: 06037-1616 U-1/A 1 AMENDMENT TO U-1 FILE NO. 70-8367 U-1/A SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 AMENDMENT NO. 1 TO FORM U-1 DECLARATION WITH RESPECT TO PROPOSED AMENDMENTS TO REVOLVING CREDIT AGREEMENT OF PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE Under THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 Public Service Company of New Hampshire 1000 Elm Street Manchester, New Hampshire 03105 (Names of companies filing this statement and addresses of principal executive offices) NORTHEAST UTILITIES (Name of top registered holding company) Robert P. Wax, Esq. Vice President, Secretary and General Counsel Northeast Utilities Service Company Selden Street Berlin, Connecticut 06037-0218 (Name and address of agent for service) The Commission is requested to mail signed copies of all orders, notices and communications to: John B. Keane Jeffrey C. Miller, Esq. Vice President and Assistant General Counsel Treasurer Northeast Utilities Service Company Northeast Utilities Service Company Selden Street Selden Street Berlin, Connecticut 06037 Berlin, Connecticut 06037 Richard C. MacKenzie, Esq. Day, Berry & Howard CityPlace Hartford, Connecticut 06103-3499 Public Service Company of New Hampshire hereby amends its declaration to read as shown in Attachment 1 hereto. Attachment 1 to Amendment No. 1 ITEM 1 DESCRIPTION OF PROPOSED TRANSACTION 1. Public Service Company of New Hampshire ("PSNH"), a wholly owned public utility subsidiary of Northeast Utilities ("NU"), a public utility holding company registered under the Public Utility Holding Company Act of 1935, as amended (the "Act"), submits this declaration (the "Declaration") pursuant to Sections 6(a) and 7 of the Act and Rule 50 thereunder with respect to the amendment and extension of the term of the Revolving Credit Agreement dated as of May 1, 1991 among PSNH, the banks named therein (the "Banks"), Bankers Trust Company, Chemical Bank and Citibank, N.A., as Co- Agents, and Chemical Bank, as Administrative Agent (the "Revolving Credit Agreement"). The Revolving Credit Agreement was entered into by PSNH in connection with PSNH's reorganization from bankruptcy on May 16, 1991 and prior to its acquisition by NU on June 5, 1992. As discussed further in paragraph 4, the transactions contemplated by the Revolving Credit Agreement have been approved by the Commission. See File No. 70-8048. Northeast Utilities, H.C.A. Rel. No. 25710 (December 16, 1992). 2. Under the Revolving Credit Agreement, PSNH has commitments from the Banks for an aggregate of $125 million in short-term borrowings. PSNH's obligations under the Revolving Credit Agreement are secured by a second mortgage on certain of PSNH's assets. PSNH pays quarterly to each participating Bank a facility fee (the "Facility Fee") equal to 25 basis points per annum of that Bank's commitment, and it pays an agency fee to each of the co-agents and the administrative agent as agreed to from time to time. Presently, the Revolving Credit Agreement expires on May 14, 1994. - 2 - 3. Interest on borrowings under the Revolving Credit Agreement accrues on one or more of four bases, at PSNH's option. The first is a "Eurodollar Rate" equal to the average of the co-agents' London interbank offered rates plus a margin of 50 basis points. The second interest rate option is a "CD Rate" equal to the average of the co-agents' certificate of deposit rates plus a margin of 87.5 basis points. The third interest rate option is an "Alternate Base Rate" equal to the greater of Chemical Bank's prime lending rate or the Federal Funds Rate in effect plus a margin of 50 basis points. The final interest rate option is a rate bid by some or all of the participating banks in a competitive bid procedure. The margins on Eurodollar Rate, CD Rate and Alternate Base Rate borrowings increase by 25 basis points if either Standard & Poor's Corporation ("S&P") or Moody's Investor Service, Inc. fails to give PSNH's first mortgage bonds an investment grade rating, and by 37.5 basis points if the advance on which that interest is accruing would be considered a "Highly Leveraged Transaction" under applicable banking regulations. On March 1, 1994, S&P downgraded its rating of PSNH's first mortgage bonds to "BB+," which is not an investment grade rating, so the 25 basis point additional margin is currently in effect. The reason given by S&P for the downgrade was PSNH's weak financial profile and below average business position. PSNH and NU have conveyed their disagreement with the downgrade to S&P, citing among other factors PSNH's improving financial condition. 4. Borrowings under the Eurodollar Rate option can have maturities of one, two, three or six months. Borrowings under the CD Rate option can have maturities of 30, 60, 90 or 180 days. Borrowings under the Alternate Base Rate option can be repaid at any time prior to the termination of the Revolving Credit Agreement. Borrowings under the competitive bid option can have any maturity up to 270 days. Borrowings under the Revolving Credit - 3 - Agreement were approved by the Commission in File No. 70-8048. Northeast Utilities, H.C.A. Rel. No. 25710 (December 16, 1992). Borrowings under the Revolving Credit Agreement (together with all other short-term borrowings undertaken by PSNH) are subject to the short-term debt limit approved by the Commission from time-to-time. PSNH's current short-term debt limit is set at $125 million. Id. 5. As stated above, the Revolving Credit Agreement currently expires on May 14, 1994. As PSNH explored various options available to replace the facility under the Revolving Credit Agreement, it became apparent that the terms of the Revolving Credit Agreement are as favorable to PSNH as any terms PSNH could expect to receive for a new revolving credit facility. Accordingly, PSNH has requested the Banks to extend the term of the present Revolving Credit Agreement for two more years, to May 14, 1996. This extension will result in the matching of the expiration date of the Revolving Credit Agreement with the May 14, 1996 expiration date of PSNH's Term Credit Agreement dated as of May 1, 1991 with the same group of Banks (the "Term Credit Agreement"). It will also result in significant transaction cost savings because PSNH will not need to negotiate and draft entirely new documents. 6. In order to make conforming changes required by the extension of the term of the Revolving Credit Agreement and to account for an increase in the Facility Fee charged by the Banks, PSNH now proposes to make the following additional amendments to the Revolving Credit Agreement: -- PSNH will be required to maintain a ratio of operating income to interest expense on a rolling four quarters basis, measured at the end of each quarter, through September 30, 1994 of 1.50 to 1 and from December 31, 1994 through May 14, 1996 of 1.75 to 1 (this change will bring the above ratios for the two-year extension period in line with the existing ratios required by the Term Credit Agreement); - 4 - -- PSNH will be required to maintain a common equity to total capitalization ratio through June 30, 1994 of 0.21 to 1, from July 1, 1994 through June 30, 1995 of 0.23 to 1, and from July 1, 1995 through May 14, 1996 of 0.25 to 1 (this change will bring the above ratios for the two-year extension period in line with the existing ratios required by the Term Credit Agreement); and -- the Facility Fee charged to PSNH under the Revolving Credit Agreement may be increased from 25 basis points per annum ($312,500 in the aggregate) to a higher amount that has not yet been negotiated, but will not exceed a maximum of 37.5 basis points per annum ($468,750 in the aggregate). A draft of the proposed amendment to the Revolving Credit Agreement is filed herewith as Exhibit B.2. 6A. As of December 31, 1993, PSNH's common equity to total capitalization ratio was 28.3%. As demonstrated in Exhibit J filed herewith, PSNH expects this ratio to surpass the 30% level by the end of 1994, due to both growth in its retained earnings and the $23.5 million quarterly sinking fund payments it is required to make on the term notes it issued in 1991. 7. In consideration of the extension, the Banks will charge PSNH an extension fee that has not yet been negotiated but will not exceed 15 basis points of their respective commitments under the Revolving Credit Agreement, or up to $187,500 in the aggregate. 8. To the extent the transaction described herein would be considered the issuance of "securities," that transaction is exempt from the competitive bidding requirement of Rule 50 under Rule 50(a)(2). The Revolving Credit Agreement has a term of less than 10 years, it is with commercial banks, the "securities" issued under it will not be resold to the public, and no finder's fee or other fee for negotiating this transaction will be paid to anyone except that Northeast Utilities Service Company, an affiliate of PSNH, will be reimbursed for its costs in arranging this transaction. - 5 - - 6 - ITEM 2 FEES, COMMISSIONS AND EXPENSES 9. The estimated amounts of fees, commissions and expenses paid or incurred, or to be paid or incurred, directly or indirectly, by PSNH with respect to the amendments described herein are set forth in Exhibit H. 10. None of such fees, commissions or expenses will be paid to any associate company or affiliate of PSNH except for financial and other services to be performed at cost by Northeast Utilities Service Company, an affiliated service company, and except that C. Duane Blinn, a member of the firm of Day, Berry & Howard, counsel to PSNH, is Assistant Secretary of Connecticut Yankee Atomic Power Company, an affiliate, and the estimate of legal fees will include payment to be made to that firm for legal services rendered in connection with the transactions proposed in this Declaration. ITEM 3 APPLICABLE STATUTORY PROVISIONS 11. The following sections of the Act, and the Rules promulgated by the Commission pursuant to the Act, are or may be applicable to the transactions described herein: Sections of the Act Transactions to Which Sections Are or May be Applicable 6(a) and 7 Amendment to and extension of term of Revolving Credit Agreement Rules Issued - 7 - by SEC Pursuant to the Act Transactions to Which Rules Are or May be Applicable Rule 50(a)(2) Amendment to and extension of term of Revolving Credit Agreement PSNH requests the Commission's approval, pursuant to this Declaration, of all transactions connected to the extension of the term of the Revolving Credit Agreement and the amendments described above, whether under the above enumerated sections of the Act and the rules thereunder or otherwise. ITEM 4 REGULATORY APPROVALS 12. In addition to the approval of the Commission, approvals or waivers are required from the public utility commissions of New Hampshire and Connecticut. A copy of the application to the New Hampshire Public Utilities Commission ("NHPUC") is filed herewith as Exhibit D.1, and a copy of the order of the NHPUC approving the transactions described herein is filed herewith as Exhibit D.2. A copy of the request for a waiver from the approval requirement filed with the Connecticut Department of Public Utility Control ("CDPUC") is filed herewith as Exhibit D.3, and a copy of the order the CDPUC granting that waiver is filed herewith as Exhibit D.4. - 8 - ITEM 5 PROCEDURE 13. PSNH intends to close the transactions described herein by May 5, 1994. Accordingly, PSNH requests the Commission to issue its order allowing this Declaration to become effective as soon as practicable and in any event no later than May 4, 1994. 14. PSNH hereby waives a recommended decision by a hearing officer or other responsible officer of the Commission and consents that the Office of Public Utility Regulation within the Division of Investment Management may assist in the preparation of the Commission's decision and/or order and hereby requests that the Commission's order become effective forthwith upon issuance. ITEM 6 EXHIBITS AND FINANCIAL STATEMENTS (a) EXHIBITS (Asterisked (*) items were filed with the original Declaration.) B.1 Revolving Credit Agreement dated as May 1, 1991 among PSNH, the Banks named therein, Bankers Trust Company, Chemical Bank and Citibank, N.A., as co-agents, and Chemical Bank, as administrative agent. (see Exhibit 4.12 to a Form 8-K report, File No. 1-6392, filed by PSNH on February 10, 1992, and incorporated herein by reference) (copy of Agreement, without exhibits, filed herewith) B.2 Amendment to Revolving Credit Agreement D.1 NHPUC Application D.2 NHPUC Order D.3 Request for Waiver from CDPUC D.4 Waiver from CDPUC F Opinion of Counsel - 9 - *G Financial Data Schedule *H Statement of Fees, Commissions and Expenses *I Proposed Form of Notice J Calculation of Common Equity Percentage (b) FINANCIAL STATEMENTS 1. Public Service Company of New Hampshire *1.1 Balance Sheet, per books and pro forma, as of December 31, 1993 *1.2 Statement of Income, per books and pro forma, for the twelve months ended December 31, 1993 2. Northeast Utilities and Subsidiaries (consolidated) *2.1 Balance Sheet, per books and pro forma, as of December 31, 1993 *2.2 Statement of Income, per books and pro forma, for the twelve months ended December 31, 1993 ITEM 7 INFORMATION AS TO ENVIRONMENTAL EFFECTS (a) The steps required for the implementation of the transactions described herein involve amendments to certain agreements entered into by PSNH. As such, the issuance of an order by the Commission with respect to this Declaration is not a major federal action significantly affecting the quality of the human environment. (b) No. - 10 - SIGNATURES Pursuant to the requirements of the Public Utility Holding Company Act of 1935, as amended, the undersigned has duly caused this Amendment to be signed on its behalf by the undersigned thereunto duly authorized. Dated: May 2, 1994 Public Service Company of New Hampshire By: /s/ John B. Keane John B. Keane Vice President and Treasurer EXHIBIT INDEX The following exhibits are filed herewith: Exhibits B.1 Revolving Credit Agreement dated as May 1, 1991 among PSNH, the Banks named therein, Bankers Trust Company, Chemical Bank and Citibank, N.A., as co-agents, and Chemical Bank, as administrative agent. (copy of Agreement, without exhibits) B.2 Amendment to Revolving Credit Agreement D.1 NHPUC Application D.2 NHPUC Order D.3 Request for Waiver from CDPUC D.4 Waiver from CDPUC F Opinion of Counsel J Calculation of Common Equity Percentage EX-99 2 EXHIBIT B.1 EXHIBIT B.1 CONFORMED COPY U.S. $200,000,000 REVOLVING CREDIT AGREEMENT Dated as of May 1, 1991 Among PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE as Borrower THE BANKS NAMED HEREIN as Banks BANKERS TRUST COMPANY CHEMICAL BANK CITIBANK, N.A. as Co-Agents CHEMICAL BANK as Administrative Agent -i- TABLE OF CONTENTS Section Page PRELIMINARY STATEMENT ARTICLE I DEFINITIONS AND ACCOUNTING TERMS 1.01 Certain Defined Terms . . . . . . . . . . 2 1.02 Computation of Time Periods . . . . . . . 24 1.03 Accounting Terms . . . . . . . . . . . . . 24 1.04 Computations of Outstandings . . . . . . 24 ARTICLE II COMMITMENTS 2.01 The Commitments . . . . . . . . . . . . . 25 2.02 Fees . . . . . . . . . . . . . . . . . . . 25 2.03 Reduction of the Commitments . . . . . . . 26 ARTICLE III CONTRACT AND COMPETITIVE ADVANCES 3.01 Contract Advances . . . . . . . . . . . . 26 3.02 Conversion of Contract Advances . . . . . 27 3.03 Other Terms Relating to the Making and Conversion of Contract Advances . . . . 28 3.04 Competitive Advances . . . . . . . . . . . 28 3.05 Making of Advances . . . . . . . . . . . . 35 3.06 Repayment of Advances . . . . . . . . . . 36 3.07 Interest . . . . . . . . . . . . . . . . . 36 ARTICLE IV PAYMENTS 4.01 Payments and Computations . . . . . . . . 39 4.02 Prepayments . . . . . . . . . . . . . . . 40 4.03 Yield Protection . . . . . . . . . . . . . 41 4.04 Sharing of Payments, Etc. . . . . . . . . 45 4.05 Taxes . . . . . . . . . . . . . . . . . . 46 ARTICLE V CONDITIONS PRECEDENT 5.01 Conditions Precedent to Commitment Closing 49 5.02 Conditions Precedent to Funding Date . . . 51 5.03 Conditions Precedent to Each Advance . . . 56 5.04 Reliance on Certificates . . . . . . . . . 57 ARTICLE VI REPRESENTATIONS AND WARRANTIES 6.01 Representations and Warranties of the Borrower 57 -ii- ARTICLE VII COVENANTS OF THE BORROWER 7.01 Affirmative Covenants . . . . . . . . . . 61 7.02 Negative Covenants . . . . . . . . . . . . 65 7.03 Reporting Obligations . . . . . . . . . . 72 ARTICLE VIII DEFAULTS 8.01 Events of Default . . . . . . . . . . . . 77 8.02 Remedies Upon Events of Default . . . . . 80 ARTICLE IX THE ADMINISTRATIVE AGENT 9.01 Authorization and Action . . . . . . . . . 81 9.02 Administrative Agent's Reliance, Etc. . . 81 9.03 Bankers Trust, Chemical, Citibank and Affiliates . . . . . . . . . . . . 82 9.04 Lender Credit Decision . . . . . . . . . . 82 9.05 Indemnification . . . . . . . . . . . . . 83 9.06 Successor Administrative Agent . . . . . . 83 ARTICLE X MISCELLANEOUS 10.01 Amendments, Etc. . . . . . . . . . . . . . 84 10.02 Notices, Etc. . . . . . . . . . . . . . . 85 10.03 No Waiver of Remedies . . . . . . . . . . 86 10.04 Costs, Expenses and Indemnification . . . 86 10.05 Right of Set-Off . . . . . . . . . . . . . 87 10.06 Binding Effect . . . . . . . . . . . . . . 88 10.07 Assignments and Participation . . . . . . 88 10.08 Confidentiality . . . . . . . . . . . . . 92 10.09 Certain Authorizations . . . . . . . . . . 93 10.10 Waiver of Jury Trial . . . . . . . . . . . 93 10.11 Governing Law . . . . . . . . . . . . . . 94 10.12 Relation of the Parties, No Beneficiary . 94 10.13 Execution in Counterparts . . . . . . . . 94 SCHEDULES Schedule I - Applicable Lending Offices Schedule II - Governmental Approvals Schedule III - Investments Schedule IV - Pending Actions Schedule V - Fees EXHIBITS Exhibit 1.01A - Form of Competitive Note Exhibit 1.01B - Form of Contract Note Exhibit 1.01C - Form of Collateral Agency Agreement Exhibit 1.01D - Form of PSNH Mortgage Exhibit 1.01E - Form of Seabrook Mortgage Exhibit 3.01A - Form of Notice of Contract Borrowing Exhibit 3.02A - Form of Notice of Conversion Exhibit 3.04A-1 - Form of Competitive Bid Request (Eurodollar Competitive Advance) Exhibit 3.04A-2 - Form of Confirmation of Competitive Borrowing (Fixed Rate Competitive Advance) Exhibit 3.04B - Form of Notice of Competitive Bid Request (Eurodollar Competitive Advance) Exhibit 3.04C-1 - Form of Competitive Bid (Eurodollar Competitive Advance) Exhibit 3.04C-2 - Form of Confirmation of Competitive Bid (Fixed Rate Competitive Advance) Exhibit 3.04D - Form of Competitive Bid Letter Exhibit 3.04E - Form of Administrative Questionnaire Exhibit 5.02A - Form of Opinion of Day, Berry & Howard, counsel to Northeast Utilities Service Company Exhibit 5.02B - Form of Opinion of Sulloway Hollis & Soden, special New Hampshire counsel to the Borrower Exhibit 5.02C - Form of Opinion of Pierre O. Caron, Assistant General Counsel to the Borrower Exhibit 5.02D - Form of Opinion of Drummond Woodsum Plimpton & MacMahon, special Maine counsel to the Borrower Exhibit 5.02E - Form of Opinion of Zuccaro, Willis & Bent, special Vermont counsel to the Borrower Exhibit 5.02F - Form of Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., special New Hampshire counsel to the Lenders Exhibit 5.02G - Form of Opinion of Porter & Travers, counsel to the Co-Agents Exhibit 10.07 - Form of Lender Assignment CREDIT AGREEMENT Dated as of May 1, 1991 THIS CREDIT AGREEMENT is made by and among: (i) Public Service Company of New Hampshire, a debtor- in-possession under the Bankruptcy Code pursuant to a proceeding under Chapter 11 of the Bankruptcy Code which, on the Funding Date (as hereinafter defined), will be a corporation duly organized and validly existing under the laws of the State of New Hampshire (the "Borrower"), (ii) The financial institutions (the "Banks") listed on the signature pages hereof and the other Lenders (as hereinafter defined) from time to time party hereto, and (iii) Bankers Trust Company ("Bankers Trust"), Chemical Bank ("Chemical") and Citibank, N.A. ("Citibank"), as Agents (the "Co-Agents") for the Lenders hereunder, and (iv) Chemical, as administrative agent (the "Administrative Agent") for the Lenders hereunder. PRELIMINARY STATEMENT The Borrower commenced a voluntary reorganization case under Chapter 11 of the Bankruptcy Code on January 28, 1988, in the United States Bankruptcy Court for the District of New Hampshire (the "Bankruptcy Court"). The Borrower is being reorganized pursuant to the Third Amended Joint Plan of Reorganization of the Borrower, dated December 28, 1989 (the "Plan") as confirmed by order of the Bankruptcy Court on April 20, 1990. Terms used herein are defined in Section 1.01 below. In order to finance the reorganization of the Borrower, the Borrower is entering into the following agreements on the date of the Commitment Closing (collectively, the "Financing Agreements"): (i) this Agreement; and (ii) a $452,000,000 Term Credit Agreement among the Borrower, the banks named therein, certain other lenders from time to time parties thereto, the Co-Agents and the administrative agent named therein. In addition to the Financing Agreements, the following additional sources of capital will be utilized by the Borrower: (w) the issuance and sale of First Mortgage Bonds by the Borrower, in an aggregate principal amount of not less than $858,985,000, on or prior to the Plan Effective Date; and (x) the issuance and sale of not less than $125,000,000 of Preferred Stock of the Borrower on or prior to the Plan Effective Date. In connection with the Borrower's Financing Agreements, the Borrower has agreed to provide security, in accordance with the terms of a Collateral Agency Agreement, evidenced by the PSNH Mortgage and the Seabrook Mortgage. Additionally, the Borrower has become bound by, and is entitled to the full rights and benefits of, the Rate Agreement and the Merger Agreement (subject to any necessary Governmental Approvals) and has entered into, or will enter into, the other Significant Contracts in connection with the effectiveness of the Plan and the Merger and Seabrook Transfer contemplated therein. Based upon the foregoing and subject to the terms and conditions set forth in this Agreement, the parties hereto hereby agree as follows: ARTICLE I DEFINITIONS AND ACCOUNTING TERMS SECTION 01. Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings (such meanings to be applicable to the singular and plural forms of the terms defined): "Advance" means a Contract Advance or a Competitive Advance (each of which shall be a "Class" of Advance). "Affiliate" means, with respect to any Person, any other Person directly or indirectly controlling (including, but not limited to, all directors and officers of such Person), controlled by, or under direct or indirect common control with such Person. A Person shall be deemed to control another entity if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such entity, whether through the ownership of voting securities, by contract or otherwise. "Agreement for Capacity Transfer" means the Agreement for Capacity Transfer between The Connecticut Light and Power Company and the Borrower which provides for capacity transfers from the Borrower to The Connecticut Light and Power Company in the form filed with the Federal Energy Regulatory Commission on January 5, 1990. "Alternate Base Rate" means, for any day, a rate per annum (rounded upwards, if necessary, to the next 1/8 of 1%) equal to the greater of: 3 (a) the Prime Rate in effect on such day; and (b) the Federal Funds Rate in effect on such day plus 1/2 of 1% per annum. For purposes hereof, the term "Prime Rate" shall mean the rate of interest per annum publicly announced from time to time by Chemical as its prime rate in effect at its principal office in New York City; each change in the Prime Rate shall be effective on the date such change is publicly announced. If for any reason the Administrative Agent shall have determined (which determination shall be conclusive absent manifest error) that it is unable to ascertain the Federal Funds Rate for any reason, including the inability or failure of the Administrative Agent to obtain sufficient quotations in accordance with the terms thereof, the Alternate Base Rate shall be determined without regard to clause (b) of the first sentence of this definition until the circumstances giving rise to such inability no longer exist. Any change in the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds Rate shall be effective on the effective date of such change in the Prime Rate or the Federal Funds Rate, respectively. "Applicable Contract Margin" means, on any date, for a Eurodollar Rate Advance, a CD Rate Advance or a Base Rate Advance, the percentage per annum set forth below in the column entitled "Eurodollar Rate", "CD Rate" or "Base Rate", as appropriate: Eurodollar Rate CD Rate Base Rate 0.50% 0.875% 0.00% Each Applicable Contract Margin set forth above shall be increased (i) by 0.25% per annum, if and so long as the Borrower shall fail to receive an Investment Grade Rating and (ii) by 0.375% per annum if and so long as the Advance to which such Applicable Contract Margin relates is classified as an HLT. "Applicable Lending Office" means, with respect to each Lender: (i) in the case of any Contract Advance, (A) such Lender's "Eurodollar Lending Office" in the case of a Eurodollar Rate Advance, (B) such Lender's "CD Lending Office" in the case of a CD Rate Advance, or (C) such Lender's "Domestic Lending Office" in the case of a Base Rate Advance, in each case as specified opposite such Lender's name on Schedule I hereto or in the 4 Lender Assignment pursuant to which it became a Lender; or (ii) in the case of any Competitive Advance, the office or affiliate of such Lender identified as the Applicable Lending Office in such Lender's Competitive Bid tendered pursuant to Section 3.04 hereof; or (iii) in each case, such other office or affiliate of such Lender as such Lender may from time to time specify in writing to the Borrower and the Administrative Agent. "Applicable Rate" means: (i) in the case of each Eurodollar Rate Advance comprising part of the same Borrowing, a rate per annum during each Interest Period equal at all times to the sum of the Eurodollar Rate for such Interest Period plus the Applicable Contract Margin in effect from time to time during such Interest Period; (ii) in the case of each CD Rate Advance comprising part of the same Borrowing, a rate per annum during each Interest Period equal at all times to the sum of the CD Rate for such Interest Period plus the Applicable Contract Margin in effect from time to time during such Interest Period; (iii) in the case of each Base Rate Advance, a rate per annum equal at all times to the sum of the Alternate Base Rate in effect from time to time plus the Applicable Contract Margin in effect from time to time; (iv) in the case of each Eurodollar Competitive Advance, a rate per annum during the Interest Period therefor, equal at all times to the sum of the Eurodollar Rate for such Interest Period plus or minus, as the case may be, the Competitive Margin in effect during such Interest Period; and (v) in the case of each Fixed Rate Competitive Advance by a Lender, at a rate per annum during the Interest Period therefor, equal at all times to the rate specified by such Lender in its Competitive Bid and accepted by the Borrower for such Competitive Advance in accordance with Section 3.04(b)(iv) hereof. "Available Commitment" means, for each Lender, the unused portion of such Lender's Commitment (which shall be equal to the excess, if any, of such Lender's Commitment over such Lender's Contract Advances then 5 outstanding), less such Lender's Percentage of the aggregate amount of Competitive Advances outstanding. "Available Commitments" shall refer to the aggregate of the Lenders' Available Commitments hereunder. "Bankruptcy Court" has the meaning assigned to that term in the Preliminary Statement. "Base Rate Advance" means a Contract Advance in respect of which the Borrower has selected in accordance with Article II hereof, or this Agreement provides for, interest to be computed on the basis of the Alternate Base Rate. "Borrowing" means a Contract Borrowing or Competitive Borrowing (each of which shall be a "Class" of Borrowing). "Business Day" means a day of the year on which banks are not required or authorized to close in New York City and, if the applicable Business Day relates to any Eurodollar Rate Advances or Eurodollar Competitive Advances, on which dealings are carried on in the London interbank market. "CD Rate" means, for each Interest Period for each CD Rate Advance comprising part of the same Borrowing, an interest rate per annum equal to the sum of: (a) the rate per annum obtained by multiplying (i) the rate of interest determined by the Administrative Agent to be the average (rounded upward to the nearest whole multiple of 1/100 of 1% per annum, if such average is not such a multiple) of the consensus bid rate determined by each of the Co-Agents for the bid rates per annum at 10:00 A.M. (New York City time) (or as soon thereafter as practicable) on the first day of such Interest Period, of three New York certificate of deposit dealers of recognized standing selected by such Co-Agent for the purchase at face value of certificates of deposit issued by such Co-Agent in the amount of $1,000,000 and with a maturity equal to such Interest Period, times (ii) the Domestic Reserve Adjustment in effect from time to time during such Interest Period, plus (b) the FDIC Assessment Rate as in effect from time to time for such Interest Period. The CD Rate for the Interest Period for each CD Rate Advance comprising part of the same Borrowing shall be determined by the Administrative Agent on the basis of applicable rates furnished to and received by the Administrative Agent from the Co-Agents on the first day of such Interest period, subject, however, to the provisions of Sections 3.07(d) and 4.03(g) hereof. 6 "CD Rate Advance" means a Contract Advance in respect of which the Borrower has selected in accordance with Article III hereof, and this Agreement provides for, interest to be computed on the basis of the CD Rate. "Class" has the meaning assigned to such term (i) in the definition of "Advance" when used in such context and (ii) in the definition of "Borrowing" when used in such context. "Collateral" means all of the collateral in which liens, mortgages or security interests are purported to be granted by any or all of the Security Documents. "Collateral Agency Agreement" means an agreement in substantially the form of Exhibit 1.01C hereto. "Collateral Agent" means Bankers Trust or any successor thereto as provided in the Collateral Agency Agreement. "Commitment" means, for each Lender, the amount set forth opposite such Lender's name on the signature pages hereof or, if such Lender has entered into one or more Lender Assignments, set forth for such Lender in the Register maintained by the Administrative Agent pursuant to Section 10.07(c), in each such case as such amount may be reduced from time to time pursuant to Section 2.03 hereof. "Commitments" shall refer to the aggregate of the Lenders' Commitments hereunder. "Commitment Closing" means the day upon which each of the conditions precedent enumerated in Section 5.01 hereof shall be fulfilled to the satisfaction of the Lenders, the Administrative Agent and the Borrower. All transactions contemplated by the Commitment Closing shall take place on or prior to June 30, 1991, at the offices of Porter & Travers, 120 West 45th Street, New York, New York 10036, at 10:00 A.M. (New York City time), or such other place and time as the parties hereto may mutually agree. "Common Equity" means, at any date, an amount equal to the sum of the aggregate of the par value of, or stated capital represented by, the outstanding shares of common stock of the Borrower and the surplus, paid-in, earned and other, if any, of the Borrower. "Competitive Advance" means an advance by a Lender to the Borrower as part of a Competitive Borrowing and refers to a Fixed Rate Competitive Advance or a Eurodollar Competitive Advance (each of which shall be a "Type" of Competitive Advance). 7 "Competitive Bid" means an offer by a Lender to make a Competitive Advance under the competitive bidding procedure described in Section 3.04(b). "Competitive Bid Rate" means, as to any Competitive Bid made by a Lender pursuant to Section 3.04(b)(iv), (i) in the case of a Eurodollar Competitive Advance, the Competitive Margin and (ii) in the case of a Fixed Rate Competitive Advance, the fixed rate of interest offered by such Lender making such Competitive Bid. "Competitive Bid Letter" means a letter in the form of Exhibit 3.04D hereto. "Competitive Bid Request" means a request made by the Borrower pursuant to Section 3.04(b)(i) in the form of Exhibit 3.04A-1 hereto. "Competitive Borrowing" means a borrowing consisting of one or more Competitive Advances of the same Type and Interest Period made on the same day by each of the Lenders whose Competitive Bid to make one or more Competitive Advances as part of such Borrowing has been accepted by the Borrower under the competitive bidding procedure described in Section 3.04(b). A Competitive Borrowing may be referred to herein as being a "Type" of Competitive Borrowing, corresponding to the Type of Competitive Advances comprising such Borrowing. "Competitive Margin" means, with respect to any Eurodollar Competitive Advance, the percentage per annum (expressed in the form of a decimal to no more than four decimal places) to be added to or subtracted from the Eurodollar Rate in order to determine the interest rate applicable to such Advance, as specified in the Competitive Bid relating to such Advance. "Competitive Note" means a promissory note of the Borrower payable to the order of a Lender, in substantially the form of Exhibit 1.01A hereto, evidencing the indebtedness of the Borrower to such Lender from time to time resulting from Competitive Advances made by such Lender. "Confidential Information" has the meaning assigned to that term in Section 10.08. "Contract Advance" means an advance by a Lender to the Borrower pursuant to Section 3.01 hereof and refers to a Eurodollar Rate Advance, a CD Rate Advance or a Base Rate Advance (each of which shall be a "Type" of Contract Advance). The Type of Contract Advance may change from time to time as and when such Advance is Converted. For purposes of this Agreement, all Contract Advances of a Lender (or portions thereof) made of, or Converted into, the same Type and Interest 8 Period on the same day shall be deemed to be a single Advance by such Lender until repaid or next Converted. "Contract Borrowing" means a borrowing consisting of Contract Advances of the same Type and Interest Period made on the same day by the Lenders, ratably in accordance with their respective Commitments. A Contract Borrowing may be referred to herein as being a "Type" of Contract Borrowing, corresponding to the Type of Contract Advances comprising such Borrowing. For purposes of this Agreement, all Contract Advances made of, or Converted into, the same Type and Interest Period on the same day shall be deemed a single Contract Borrowing hereunder until repaid or next Converted. "Contract Note" means a promissory note of the Borrower payable to the order of a Lender, in substantially the form of Exhibit 1.01B hereto, evidencing the aggregate indebtedness of the Borrower to such Lender resulting from the Contract Advances made by such Lender. "Conversion", "Convert" or "Converted" each refers to a conversion of Contract Advances pursuant to Section 3.02, including but not limited to any selection of a longer or shorter Interest Period to be applicable to such Advances. An Advance of one Class may not be converted into the other Class. "Debt" means, for any Person, without duplication, (i) indebtedness of such Person for borrowed money, (ii) obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) obligations of such Person to pay the deferred purchase price of property or services, (iv) obligations of such Person as lessee under leases which shall have been or should be, in accordance with generally accepted accounting principles, recorded as capital leases (not including the Unit Contract), (v) obligations (contingent or otherwise) of such Person under reimbursement or similar agreements with respect to the issuance of letters of credit, (vi) net obligations (contingent or otherwise) of such Person under interest rate swap, "cap", "collar" or other hedging agreements, (vii) obligations of such person to pay rent or other amounts under leases entered into in connection with sale and leaseback transactions involving assets of such Person being sold in connection therewith, (viii) obligations under direct or indirect guaranties in respect of, and obligations (contingent or otherwise) to purchase or otherwise acquire, or otherwise to assure a creditor against loss in respect of, indebtedness or obligations of others of the kinds referred to in clauses (i) through (vii), above, and (ix) liabilities in respect of unfunded vested benefits under ERISA Plans. 9 "Domestic Reserve Adjustment" means, during an Interest Period for CD Rate Advances comprising a single Borrowing, a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) in effect from time to time during such Interest Period, expressed as a decimal, established by the Board of Governors of the Federal Reserve System and any other banking authority to which the Administrative Agent is subject, for nonpersonal time deposits in U.S. dollars of over $100,000, with maturities approximately equal to the Interest Period in effect for such Advances. The Domestic Reserve Adjustment shall be determined from time to time by the Administrative Agent, shall be the same for all Advances comprising the same Borrowing and shall be adjusted automatically on and as of the effective date of each change in any reserve requirement. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time. "ERISA Affiliate" means, with respect to any Person, any trade or business (whether or not incorporated) which is a "commonly controlled entity" of the Borrower within the meaning of the regulations under Section 414 of the Internal Revenue Code of 1986, as amended from time to time. "ERISA Multiemployer Plan" means a "multiemployer plan" subject to Title IV of ERISA. "ERISA Plan" means an employee benefit plan (other than a ERISA Multiemployer Plan) maintained for employees of the Borrower or any ERISA Affiliate and covered by Title IV of ERISA. "ERISA Plan Termination Event" means (i) a Reportable Event described in Section 4043 of ERISA and the regulations issued thereunder (other than a Reportable Event not subject to the provision for 30-day notice to the PBGC under such regulations) with respect to an ERISA Plan or an ERISA Multiemployer Plan, or (ii) the withdrawal of the Borrower or any of its ERISA Affiliates from an ERISA Plan or an ERISA Multiemployer Plan during a plan year in which it was a "substantial employer" as defined in Section 4001(a)(2) of ERISA, or (iii) the filing of a notice of intent to terminate an ERISA Plan or an ERISA Multiemployer Plan or the treatment of an ERISA Plan or an ERISA Multiemployer Plan under Section 4041 of ERISA, or (iv) the institution of proceedings to terminate an ERISA Plan or an ERISA Multiemployer Plan by the PBGC, or (v) any other event or condition which might constitute grounds under Section 4042 of ERISA for the 10 termination of, or the appointment of a trustee to administer, any ERISA Plan or ERISA Multiemployer Plan. "Eurocurrency Liabilities" has the meaning assigned to that term in Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time. "Eurodollar Competitive Advance" means a Competitive Advance in respect of which the Borrower has selected in accordance with Section 3.04 hereof, and this Agreement provides, interest to be computed on the basis of the Eurodollar Rate. "Eurodollar Rate" means, for each Interest Period for each Eurodollar Rate Advance comprising part of the same Borrowing, an interest rate per annum equal to the average (rounded upward to the nearest whole multiple of 1/16 of 1% per annum, if such average is not such a multiple) of the rate per annum at which deposits in U.S. dollars are offered by the principal office of each of the Co-Agents in London, England to prime banks in the London interbank market at 11:00 A.M. (London time) two Business Days before the first day of such Interest Period in an amount of $1,000,000 and for a period equal to such Interest Period. The Eurodollar Rate for the Interest Period for each Eurodollar Rate Advance comprising part of the same Borrowing shall be determined by the Administrative Agent on the basis of applicable rates furnished to and received by the Administrative Agent from the Co-Agents two Business Days before the first day of such Interest Period, subject, however, to the provisions of Sections 3.07(d) and 4.03(g). "Eurodollar Rate Advance" means a Contract Advance in respect of which the Borrower has selected in accordance with Article III hereof, and this Agreement provides for, interest to be computed on the basis of the Eurodollar Rate. "Eurodollar Reserve Percentage" of any Lender for each Interest Period for each Eurodollar Rate Advance means the reserve percentage applicable during such Interest Period (or if more than one such percentage shall be so applicable, the daily average of such percentages for those days in such Interest Period during which any such percentage shall be so applicable) under Regulation D or other regulations issued from time to time by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement, without benefit of or credit for proration, exemptions or offsets) for such Lender with respect to liabilities or assets consisting of or including Eurocurrency Liabilities having a term equal to such Interest Period. 11 "Event of Default" has the meaning specified in Section 8.01. "FDIC Assessment Rate" means, during an Interest Period for CD Rate Advances comprising a single Borrowing, the annual rate (rounded upwards, if necessary, to the next 1/100 of 1%) most recently estimated by the Administrative Agent as the then current annual assessment rate payable by the Administrative Agent to the Federal Deposit Insurance Corporation (or any successor) for insurance by such Corporation (or such successor) of time deposits made in U.S. dollars at the Administrative Agent's domestic offices. The FDIC Assessment Rate shall be the same for all Advances comprising the same Borrowing and shall be adjusted automatically on and as of the effective date of each change in any such rate. "Federal Funds Rate" means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it. "Financing Agreements" has the meaning assigned to that term in the Preliminary Statement. "First Mortgage Bond Amount" means $950,000,000, provided that such dollar amount may be increased if, concurrently with the issuance of any First Mortgage Bonds whose aggregate principal amount together with the aggregate principal amount of all First Mortgage Bonds outstanding on the day of such issuance exceeds $950,000,000, the Borrower shall prepay outstanding Advances in accordance with Section 4.02(d) of the other Financing Agreement. "First Mortgage Bonds" means first mortgage bonds in the maximum aggregate principal amount of up to the First Mortgage Bond Amount to be issued by the Borrower and secured, directly or indirectly, collectively or severally, by one or more first-priority liens on all or part of the Indenture Assets pursuant to the First Mortgage Indenture or another indenture in form and substance satisfactory to the Majority Lenders. For purposes hereof, all or part of the First Mortgage Bonds may be issued as collateral for pollution control revenue bonds or industrial revenue bonds, whether taxable or tax exempt, issued by the Borrower or by a governmental authority at the Borrower's request (any 12 such pollution control revenue bonds or industrial revenue bonds being included, without duplication as to the principal amount of First Mortgage Bonds securing the same, within the definition hereunder of "First Mortgage Bonds"). "First Mortgage Indenture" means the General and Refunding Mortgage Indenture, between the Borrower and New England Merchants National Bank, as trustee and to which First Fidelity Bank, National Association, New Jersey, is to be successor trustee, dated as of August 15, 1978, as amended through the Plan Effective Date, as the same may thereafter be amended, supplemented or modified from time to time. "Fixed Rate Competitive Advance" means a Competitive Advance in respect of which the Borrower has selected in accordance with Section 3.04(b)(iv) hereof, and this Agreement provides, interest to be computed on the basis of a fixed percentage rate per annum (expressed in the form of a decimal to no more than four decimal places) specified by the Lender making such Advance in its Competitive Bid. "Form S-1" means the Registration Statement on Form S-1 as filed by the Borrower with the Securities and Exchange Commission on June 8, 1990 and all amendments and supplements thereto. "Funding Date" means the day upon which each of the conditions precedent enumerated in Section 5.02 hereof shall be fulfilled to the satisfaction of the Lenders, the Administrative Agent and the Borrower. All transactions contemplated to occur on the Funding Date shall occur contemporaneously with the Plan Effective Date on or prior to June 30, 1991 at the offices of Porter & Travers, 120 West 45th Street, New York, New York 10036, at 10:00 A.M. (New York City time), or at such other place and time as the parties hereto may mutually agree. "Governmental Approval" means any authorization, consent, approval, license, permit, certificate, exemption of, or filing or registration with, any governmental authority or other legal or regulatory body (including, without limitation, the Bankruptcy Court), required in connection with either (i) the execution, delivery or performance of the Rate Agreement, the Merger Agreement, any Loan Document or any Significant Contract, (ii) the grant and perfection of any security interest, lien or mortgage contemplated by the Security Documents, or (iii) the nature of the Borrower's business as conducted or the nature of the property owned or leased by it. For purposes of this Agreement, Chapter 362-C of the Revised Statutes Annotated of New Hampshire, as in effect on the date hereof, shall be deemed to be a Governmental Approval. 13 "Hazardous Substance" means any waste, substance or material identified as hazardous, dangerous or toxic by any office, agency, department, commission, board, bureau or instrumentality of the United States of America or of the State or locality in which the same is located having or exercising jurisdiction over such waste, substance or material. "HLT" means, with respect to any or all of the Advances outstanding hereunder from time to time, a classification by any Co-Agent or the Majority Lenders, in good faith, or by the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation or any other regulatory authority of the transactions evidenced by the Loan Documents as a "highly leveraged transaction" or an "HLT" as defined in Banking Circular BC-242, issued by the Comptroller of the Currency on October 30, 1989, as modified, amended or supplemented from time to time. "Indemnified Person" has the meaning assigned to that term in Section 10.04(b) hereof. "Indenture Assets" means fixed assets of the Borrower (including related Governmental Approvals and regulatory assets, but excluding the Seabrook Interests) which from time to time are subject to the first-priority lien under the First Mortgage Indenture. "Information Memorandum" means the Confidential Information Memorandum, dated January 1991, regarding the Borrower and NU, as distributed to the Administrative Agent, the Co-Agents and the Lenders, including, without limitation, Amendments Nos. 1, 2, 3, 4 and 5 to Form S-1, dated September 27, 1990, February 8, 1991, April 26, 1991, May 7, 1991 and May 9, 1991, respectively, the reports of the Borrower filed with the Securities and Exchange Commission on Form 8-K, dated January 8, 1991 and May 1, 1991, each of Form 10-Q for the quarter ended September 30, 1990 and March 31, 1991 and the Form 10-K for each of the fiscal year ended December 31, 1989 and the Third Amended Disclosure Statement of NUSCO dated December 28, 1989, as filed with the Bankruptcy Court. "Interest Expense" means, for any period, the aggregate amount of any interest on Debt (including long-term and short-term Debt). "Interest Period" has the meaning assigned to that term in Section 3.07(a) hereof. "Investment Grade Rating" means a rating of Baa3 or better by Moody's Investor Service, Inc. and a rating of BBB- or better by Standard & Poor's Corporation with respect to all First Mortgage Bonds rated by such agencies or, if no rated First Mortgage 14 Bonds are outstanding, all other senior long-term debt of the Borrower not entitled to the benefits of a letter of credit or other credit enhancement facility. "Joint Ownership Agreement" means the Agreement for Joint Ownership, Construction and Operation of New Hampshire Nuclear Units, among the Borrower and the other parties named therein, dated as of May 1, 1973, as amended from time to time. "Lender Assignment" means an assignment and agreement entered into by a Lender and an assignee, and accepted by the Administrative Agent, in substantially the form of Exhibit 10.07 hereto. "Lenders" means the financial institutions listed on the signature pages hereof, and each assignee that shall become a party hereto pursuant to Section 10.07. "Lien" has the meaning assigned to that term in Section 7.02(a) hereof. "Loan Documents" means the Financing Agreements, the Notes and the Security Documents. "Major Electric Generating Plants" means the following nuclear, combustion turbine and coal, oil or diesel-fired generating stations of the Borrower: Seabrook; the Merrimack generating station located in Bow, New Hampshire; the Newington generating station located in Newington, New Hampshire; the Schiller generating station located in Portsmouth, New Hampshire; the White Lake combustion turbine located in Tamworth, New Hampshire; the Millstone Unit No. 3 generating station located in Waterford, Connecticut, and the Wyman Unit No. 4 generating station located in Yarmouth, Maine. "Majority Lenders" means on any date of determination, Lenders who, collectively, on such date (i) hold at least 66-2/3% of the then aggregate unpaid principal amount of the Advances owing to the Lenders and (ii) have Percentages in the aggregate of at least 66-2/3%. Determination of those Lenders satisfying the criteria specified above for action by the Majority Lenders shall be made by the Administrative Agent and shall be conclusive and binding on all parties absent manifest error. "Management Services Agreement" means the Management Services Agreement between NUSCO and the Borrower in the form of Exhibit A to the Merger Agreement, as supplemented by Supplement No. 1 dated as of April 30, 1990. "Merger" means (i) the merger of NU Acquisition Corp., a wholly-owned subsidiary of NU, with and into the Borrower, pursuant to and in accordance with the 15 terms of the Merger Agreement and (ii) the concurrent transfer by the Borrower, as so merged, to NAEC of the Seabrook Interests (the "Seabrook Transfer") in accordance with the Plan, the Rate Agreement and the capital structure of the Borrower set forth in the Merger Pro-formas delivered pursuant to Section 5.01(a)(v) hereof. "Merger Agreement" means the Merger Agreement in the form of Exhibit A to the Plan, without giving effect to any amendment, modification or supplement thereto except as may be permitted by the terms hereof or as may otherwise be consented to by the Majority Lenders. "Merger Effective Date" means the date on which the Merger is consummated. "Merger Pro-Formas" has the meaning assigned to that term in Section 5.01(a)(v). "NAEC" means North Atlantic Energy Corporation, a corporation to be formed and wholly-owned by NU for the sole purpose of acquiring the Seabrook Interests, which shall be acquired by NAEC from the Borrower on the Merger Effective Date. "Note" means a Contract Note or a Competitive Note. "Notice of Contract Borrowing" has the meaning assigned to that term in Section 3.01 hereof. "NU" means Northeast Utilities, an unincorporated voluntary business association organized under the laws of the Commonwealth of Massachusetts. "NUSCO" means Northeast Utilities Service Company, a Connecticut corporation and a wholly-owned subsidiary of NU. "Operating Income" means, for any period, the Borrower's operating income for such period, adjusted as follows: (i) increased by the amount of income taxes (including New Hampshire Business Profits Tax and other comparable taxes) paid by the Borrower during such period, if and to the extent deducted in the computation of the Borrower's operating income for such period; and (ii) increased by the amount of any depreciation deducted by the Borrower during such period; and 16 (iii) increased by the amount of any amortization of acquisition adjustment deducted by the Borrower during such period; and (iv) decreased by the amount of any capital expenditures paid by the Borrower during such period. "PBGC" means the Pension Benefit Guaranty Corporation (or any successor entity) established under ERISA. "Percentage" means, in respect of any Lender on any date of determination, the percentage obtained by dividing such Lender's Commitment on such day by the total of the Commitments on such day, and multiplying the quotient so obtained by 100%. "Permitted Investments" means each and any of the following so long as (A) with respect to Permitted Investments held or maintained by the Collateral Agent pursuant to the terms of any Loan Document, no such Permitted Investment shall have a final maturity later than one month from the date of investment therein and (B) with respect to all other Permitted Investments, no such Permitted Investment shall have a final maturity later than 12 months from the date of investment therein and all such Permitted Investments, collectively, shall have a dollar-weighted average maturity no later than six months from any date of determination: (i) direct obligations of the United States of America, or obligations guaranteed as to principal and interest by the United States of America; (ii) certificates of deposit, eurodollar certificates of deposit or bankers' acceptances issued, or time deposits held, or investment contracts guaranteed, by (A) any Bank; or (B) any other commercial bank, trust company, savings and loan association or savings bank organized under the laws of the United States of America, or any State thereof, or of any other country which is a member of the Organization for Economic Cooperation and Development (or a political subdivision of any such country) having outstanding unsecured indebtedness that is rated (on the date of acquisition thereof) AA- or better by Standard & Poor's Corporation or Aa3 or better by Moody's Investors Service, Inc. (or an equivalent rating by another nationally recognized credit rating agency of similar standing if neither of such corporations is then in the business of rating unsecured bank indebtedness); 17 (iii) obligations with any Co-Agent or any other bank or trust company described in clause (ii), above, in respect of the repurchase of obligations of the type described in clause (i), above, provided that such repurchase obligations shall be fully secured by obligations of the type described in said clause (i) and the possession of such obligations shall be transferred to, and segregated from other obligations owned by, such Co-Agent or such other bank or trust company; (iv) commercial paper rated (on the date of acquisition thereof) A-1 or P-1 or better by Standard & Poor's Corporation or Moody's Investors Services, Inc., respectively (or an equivalent rating by another nationally recognized credit rating agency of similar standing if neither of such corporations is then in the business of rating commercial paper); and (v) after the Merger Effective Date, obligations of NU or any Affiliate of NU held or maintained in accordance with NUSCO intercompany lending arrangements. "Person" means an individual, partnership, corporation (including a business trust), joint stock company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof. "Plan" has the meaning assigned to that term in the Preliminary Statement. "Plan Effective Date" means the effective date of the Plan, pursuant to and in accordance with the terms thereof. "Plan Pro-Formas" has the meaning assigned to that term in Section 5.01(a)(v). "Preferred Stock" means 5,000,000 shares of Series A Preferred Stock of the Borrower (par value $25) as described in the Form S-1. "Preliminary Official Statements" means those four disclosure documents of The Industrial Development Authority of the State of New Hampshire (the "Authority"), each entitled "Preliminary Official Statement dated April 26, 1991", related to the Pollution Control Revenue Bonds of the Authority (Public Service Company of New Hampshire Project - 1991 Tax-Exempt Series A, B and C and Public Service Company of New Hampshire Project - 1991 Taxable Series D and E). 18 "PSNH Mortgage" means a mortgage by the Borrower in favor of the Collateral Agent, substantially in the form of Exhibit 1.01D hereto. "Rate Agreement" means the Agreement dated as of November 22, 1989, as amended by the First Amendatory Agreement dated as of December 5, 1989, and the Second Amendatory Agreement dated as of December 12, 1989, among NUSCO, the Governor and the Attorney General of the State of New Hampshire and adopted by the Borrower as of July 10, 1990 (without giving effect to any deemed modification effected pursuant to Section 2(c) thereof except and to the extent the Majority Lenders shall have consented thereto in writing, and excluding the Unit Contract appended as Exhibit A thereto subsequent to the effectiveness of such contract). "Recipient" has the meaning assigned to that term in Section 10.08 hereof. "Register" has the meaning specified in Section 10.07(c). "Restricted Payment" has the meaning assigned to that term in Section 7.02(f) hereof. "Seabrook" means the nuclear-fueled, steam- electric generating plant at a site located in Seabrook, New Hampshire, and the related real property interests, and other fixed assets as they are more fully described in the Seabrook Mortgage. "Seabrook Indenture Assets" means that portion of the Seabrook Interests subject to the Seabrook Mortgage. "Seabrook Interests" means all of the Borrower's right, title and interest in and to the fixed assets of Seabrook and nuclear fuel relating to Seabrook and Governmental Approvals relating thereto, including the undeveloped land adjacent to Seabrook wholly-owned by the Borrower and described as the "Adjacent Property" in Schedule D to the PSNH Mortgage. "Seabrook Mortgage" means a mortgage by the Borrower in favor of the Collateral Agent, substantially in the form of Exhibit 1.01E hereto, covering the Seabrook Indenture Assets. "Seabrook Transfer" has the meaning assigned to that term in clause (ii) of the definition of "Merger" herein. "Secured Party" has the meaning assigned to that term in the Collateral Agency Agreement. "Security Documents" means the PSNH Mortgage, the Seabrook Mortgage and the Collateral Agency Agreement. 19 "Series D Reimbursement Agreement" means the Series D Letter of Credit and Reimbursement Agreement, dated as of May 1, 1991, among the Borrower, Citibank, N.A. and the Participating Banks named therein relating to the Industrial Development Authority of the State of New Hampshire Pollution Control Revenue Bonds (Public Service Company of New Hampshire Project - 1991 Taxable Series D), as the same may from time to time be amended, modified or supplemented. "Series E Reimbursement Agreement" means the Series E Letter of Credit and Reimbursement Agreement, dated as of May 1, 1991, among the Borrower, Citibank, N.A. and the Participating Banks named therein relating to the Industrial Development Authority of the State of New Hampshire Pollution Control Revenue Bonds (Public Service Company of New Hampshire Project - 1991 Taxable Series E), as the same may from time to time be amended, modified or supplemented. "Sharing Agreement" means the Sharing Agreement among The Connecticut Light and Power Company, NUSCO, the Borrower and certain other parties thereto in the form filed with the Federal Energy Regulatory Commission on January 5, 1990, to be entered into on or prior to the Merger Effective Date. "Significant Contracts" means the following contracts, in each case as the same may be amended, modified or supplemented from time to time in accordance with this Agreement: (i) the Agreement for Capacity Transfer; and (ii) the Management Services Agreement. The following agreements shall be "Significant Contracts" when entered into by the Borrower as provided below: (x) the Sharing Agreement; (y) the Tax Allocation Agreement; and (z) the Unit Contract. "Tax Allocation Agreement" means the Tax Allocation Agreement dated as of January 1, 1990 among NU and the members of the consolidated group of which NU is the common parent, to which the Borrower will be added as a party on or prior to the Merger Effective Date. "Termination Date" means the earlier to occur of (i) May 14, 1994, (ii) June 30, 1991, if the Funding Date shall not have occurred on or prior to such date, (iii) the date of termination or reduction in whole of 20 the Commitments pursuant to Section 2.03 or 8.02 or (iv) the date of acceleration of all amounts payable hereunder and under the Notes pursuant to Section 8.02. "Total Capitalization" means, as of any day, the aggregate of all amounts that would, in accordance with generally accepted accounting principles applied on a basis consistent with the standards referred to in Section 1.03 hereof, appear on the balance sheet of the Borrower as of such day as the sum of (i) the principal amount of all long-term Debt of the Borrower on such day, (ii) the par value of, or stated capital represented by, the outstanding shares of all classes of common and preferred shares of the Borrower on such day, (iii) the surplus of the Borrower, paid-in, earned and other, if any, on such day and (iv) the unpaid principal amount of all short-term Debt of the Borrower on such day. "Type", has the meaning assigned to such term (i) in the definition of "Contract Advance" when used in the such context and (ii) in the definition of "Contract Borrowing" when used in such context. "Unit Contract" means the Unit Contract between the Borrower and NAEC, to be entered into on or prior to the Merger Effective Date, in the form of Exhibit A to the Rate Agreement. "Unmatured Default" means the occurrence and continuance of an event which, with the giving of notice or lapse of time or both, would constitute an Event of Default. SECTION 1.02. Computation of Time Periods. In the computation of periods of time under this Agreement any period of a specified number of days or months shall be computed by including the first day or month occurring during such period and excluding the last such day or month. In the case of a period of time "from" a specified date "to" or "until" a later specified date, the word "from" means "from and including" and the words "to" and "until" each means "to but excluding". SECTION 1.03. Accounting Terms. All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles applied on a basis consistent with the application employed in the preparation of the financial projections and pro-formas referred to in subsections 5.01(a)(iv) and (v) hereof. SECTION 1.04. Computations of Outstandings. Whenever reference is made in this Agreement to the principal amount outstanding on any date under this Agreement, such reference shall refer to the sum of the aggregate principal amount of all Advances outstanding on such date in each case after giving effect to all Advances to be made on such date and the application of the proceeds thereof. 21 ARTICLE II COMMITMENTS SECTION 01. The Commitments. (a) Each Lender severally agrees, on the terms and conditions hereinafter set forth, to make Advances to the Borrower from time to time on any Business Day during the period from the Funding Date until the Termination Date in an aggregate outstanding amount not to exceed on any day such Lender's Available Commitment (after giving effect to all Advances to be made on such day and the application of the proceeds thereof). Within the limits of each Lender's Available Commitment, the Borrower may request Advances hereunder, repay or prepay Advances and utilize the resulting increase in the Available Commitments for further Advances in accordance with the terms hereof. (b) In no event shall the Borrower be entitled to request or receive any Advance that would cause the total principal amount outstanding hereunder to exceed the Commitments. (c) In addition to each Lender's Commitment under subsection (a) above, but subject nevertheless to the provisions of subsection (b) above, the Borrower may request Competitive Advances to be made at the discretion of each Lender, in accordance with Section 3.04 hereof. SECTION 02. Fees. (a) The Borrower agrees to pay to the Administrative Agent for the account of each Lender a facility fee on the amount of such Lender's Commitment at the rate of 0.25% per annum, from the Funding Date, in the case of each Bank, and from the effective date specified in the Lender Assignment pursuant to which it became a Lender, in the case of each other Lender, until the Termination Date, payable quarterly on the fourteenth day of each February, May, August and November, commencing the first such date following the Funding Date, with final payment on the Termination Date. (b) The Borrower agrees to pay to the Administrative Agent for the account of each Lender the fees specified in Schedule V hereto, such fees to be payable on the Funding Date. (c) The Borrower agrees to pay to the Co-Agents and the Administrative Agent, for their respective accounts, fees in such amounts and payable at such times, as shall be agreed among themselves from time to time in writing. SECTION 03. Reduction of the Commitments. (a) The Borrower may not reduce the Commitments hereunder in part, prior to the Funding Date, without the prior written consent of the Majority Lenders. After the Funding Date, the Borrower may, upon at least five Business Days' notice to the Administrative Agent, terminate in whole or reduce ratably in part the respective Available Commitments of the Lenders; provided (i) that any such partial reduction shall be in the aggregate amount of $15,000,000 or an integral multiple of $1,000,000 in excess thereof and (ii) that in no event shall the Commitments be reduced hereunder to an amount less than the principal amount outstanding hereunder. (b) The Borrower may not reduce the lending commitments under the other Financing Agreement in whole or in part prior to the Funding Date without the prior written consent of the Majority Lenders; 22 provided, however, the Borrower may terminate such lending commitments in whole at any time if concurrently with any such termination the Borrower terminates the Commitments hereunder in whole. For purposes of this subsection (b), the Lenders will not unreasonably withhold their consent to any such reduction hereunder or thereunder if they are satisfied, in their sole judgment, that after giving effect thereto (i) sufficient funds will be available to the Borrower to consummate the Plan and (ii) the Borrower will have sufficient funds to likely remain in compliance with the covenants set forth in Section 7.01(j) hereof. (c) On the Merger Effective Date, the Commitments shall be reduced ratably to the aggregate amount of $125,000,000. (d) If the Funding Date does not occur on or prior to June 30, 1991, the Commitment of each Lender shall automatically terminate. ARTICLE III CONTRACT AND COMPETITIVE ADVANCES SECTION 01. Contract Advances. Each Contract Borrowing shall consist of Contract Advances of the same Type and Interest Period made on the same Business Day by the Lenders ratably according to their respective Commitments. The Borrower may request that more than one Borrowing be made on the same day. Each Contract Borrowing shall be made on notice, given not later than 11:00 A.M. (New York City time) (i) in the case of Eurodollar Rate Advances, on the third Business Day prior to the date of the proposed Borrowing, (ii) in the case of CD Rate Advances, on the second Business Day prior to the date of the proposed Borrowing, and (iii) in the case of Base Rate Advances, on the day of the proposed Borrowing, by the Borrower to the Administrative Agent, who shall give to each Lender prompt notice thereof on the same day such notice is received. Each such notice of a Contract Borrowing (a "Notice of Contract Borrowing") shall be in substantially the form of Exhibit 3.01A hereto, specifying therein the requested (i) date of such Borrowing, (ii) Type of Advances comprising such Borrowing and (iii) Interest Period for each such Advance. Each proposed Borrowing shall be subject to the provisions of Sections 3.03, 4.03 and Article V hereof. SECTION 02. Conversion of Contract Advances. So long as no Event of Default shall have occurred and be continuing, the Borrower may from time to time elect to Convert one or more Contract Advances of any Type to one or more Contract Advances of the same or any other Type on the following terms and subject to the following conditions: (a) Each such Conversion shall be made as to all Advances comprising a single Contract Borrowing, on notice given not later than 10:00 A.M. (New York City time) on the third Business Day prior to the date of the proposed Conversion by the Borrower to the Administrative Agent, who shall give to each Lender prompt notice thereof. Each such notice of Conversion (a "Notice of Conversion") shall be in substantially the form of Exhibit 3.02A hereto, specifying therein the requested (i) date of such Conversion, (ii) Type of, and Interest Period applicable to, the Advances proposed to be Converted, (iii) except in the case of a Conversion described in subsection (c) below, Type of Advances to which such Advances are proposed to be Converted, (iv) except in the case of a Conversion to Base Rate Advances, initial Interest Period to be applicable to the Advances resulting 23 from such Conversion and (v) aggregate amount of Advances proposed to be Converted. No Conversion may be requested by the Borrower hereunder unless made in compliance with Section 3.03 hereof. (b) The Borrower may not select an Interest Period of greater than one month (in the case of Conversions to Eurodollar Rate Advances) or 30 days (in the case of Conversions to CD Rate Advances) during the continuance of an Unmatured Default. (c) If no Notice of Conversion in respect of an Advance is received by the Administrative Agent as provided in subsection (a) above with respect to any Eurodollar Rate Advance or CD Rate Advance, the Administrative Agent shall treat such absence of notice as a deemed Notice of Conversion providing for each such Advance to be Converted into a Base Rate Advance on the last day of the Interest Period then in effect for such Advance. SECTION 03. Other Terms Relating to the Making and Conversion of Contract Advances. (a) Notwithstanding anything in Section 3.01 or 3.02 above to the contrary: (i) at no time shall more than ten different Contract Borrowings be outstanding hereunder; (ii) each Contract Borrowing hereunder shall be in an aggregate principal amount of not less than $10,000,000 or an integral multiple of $1,000,000 in excess thereof, or such lesser amount as shall be equal to the total amount of the Available Commitments for Contract Advances on such date, after giving effect to all other Contract Borrowings and Conversions to be made on such date; and (iii) each Contract Borrowing hereunder which is to be comprised of Eurodollar Rate Advances or CD Rate Advances shall be in an aggregate principal amount of not less than $10,000,000. (b) Each Notice of Borrowing and Notice of Conversion shall be irrevocable and binding on the Borrower. SECTION 04. (a) Competitive Advances. (i) Each Competitive Borrowing shall consist of Competitive Advances of the same Type and Interest Period made by the Lenders in accordance with Section 3.04 hereof and shall be in a minimum aggregate principal amount of $5,000,000 or an integral multiple of $1,000,000 in excess thereof, except as otherwise provided pursuant to Section 3.04(b)(iv) hereof. Competitive Advances shall be made in the amounts accepted by the Borrower in accordance with Section 3.04(b)(iv). Each Competitive Advance, regardless of which Lender makes such Advance, will reduce the Available Commitments of all Lenders pro rata as 24 provided in the definition of "Available Commitments" in Section 1.01 hereof. Promptly after each Competitive Borrowing, the Administrative Agent will notify each Lender of the amount of the Competitive Borrowing, the amount by which such Lender's Available Commitment has been reduced, the date of the Competitive Borrowing and the Interest Period with respect thereto. (ii) The Borrower shall not request any Competitive Advance with an Interest Period ending after the Merger Effective Date if the aggregate principal amount of all outstanding Competitive Advances with Interest Periods ending after the Merger Effective Date (after giving effect to such requested Competitive Advance) is greater than $125,000,000. (b) Competitive Bid Procedures. (i) In order to request Competitive Bids, (A) in the case of any request for Eurodollar Competitive Advances, the Borrower shall hand deliver, telex or telecopy to the Administrative Agent a duly completed Competitive Bid Request to be received by the Administrative Agent not later than 10:00 A.M. (New York City time), four Business Days prior to a proposed Competitive Borrowing to consist of Eurodollar Competitive Advances and (B) in the case of any request for Fixed Rate Competitive Advances, the Borrower shall give telephonic notice of a proposed Competitive Borrowing to consist of Fixed Rate Competitive Advances to the Administrative agent not later than 9:15 A.M. (New York City time) on the day of a proposed Competitive Borrowing (with written confirmation of the information given by telephone substantially in the form of Exhibit 3.04A-2 delivered by hand, telecopy or telex by the Borrower to the Administrative Agent no later than 5:00 P.M. (New York City time) on the day of such Competitive Borrowing.) No Contract Advances shall be requested in or made pursuant to a Competitive Bid Request. A Competitive Bid Request which requests Eurodollar Competitive Advances that does not conform substantially to the form of Exhibit 3.04A-1 may be rejected in the Administrative Agent's sole discretion, and the Administrative Agent shall promptly notify the Borrower of such rejection by telex or telecopier. Such request shall refer to this Agreement and specify (1) the Lenders selected by the Borrower to make a Competitive Bid (which shall be no more than six Lenders), (2) the date of such Competitive Borrowing (which shall be a Business Day) and the aggregate principal amount thereof (which shall not be less than $5,000,000 25 or an integral multiple of $1,000,000 in excess thereof), (3) the Interest Period with respect thereto and (4) whether the Borrowing then being requested is to consist of Eurodollar Competitive Advances or Fixed Rate Competitive Advances. Promptly after its receipt of a Competitive Bid Request that is not rejected as aforesaid, the Administrative Agent shall (A) in the case of a proposed Competitive Borrowing to consist of Eurodollar Competitive Advances, invite by telex or telecopier (in the form of Exhibit 3.04B hereto) the selected Lenders to bid to make Competitive Advances pursuant to the Competitive Bid Request and (B) in the case of a proposed Competitive Borrowing to consist of Fixed Rate Competitive Advances, not later than 9:30 A.M. (New York City time) on the day of such Competitive Bid Request, invite the selected Lenders by telephone to make Competitive Advances pursuant to the Competitive Bid Request, in accordance with the terms and conditions of this Agreement. (ii) Each selected Lender may, in its sole discretion, make one or more Competitive Bids to the Borrower which shall be responsive to the Competitive Bid Request. Each Competitive Bid by such Lender must be received by the Administrative Agent (A) in the case of a proposed Competitive Borrowing to consist of Eurodollar Competitive Advances, by telex or telecopier (in the form of Exhibit 3.04C-1 hereto) not later than 9:30 A.M. (New York City time), three Business Days prior to a proposed Competitive Borrowing and (B) in the case of a proposed Competitive Borrowing to consist of Fixed Rate Competitive Advances not later than 9:45 A.M. (New York City time) on the day of a proposed Competitive Borrowing (subsequently confirmed in writing, not later than 11:00 A.M. (New York City time) substantially in the form of Exhibit 3.04C-2 hereto). Multiple bids will be accepted by the Administrative Agent. Competitive Bids, with respect to Eurodollar Competitive Advances, that do not conform substantially to the format of Exhibit 3.04C-1 may be rejected by the Administrative Agent after conferring with, and upon the instruction of, the Borrower, and the Administrative Agent shall notify the Lender making such non-conforming bid of such rejection as soon as practicable. Each bid (a "Competitive Bid") shall refer to this Agreement and specify (A) the principal amount (which shall be a minimum principal amount of $5,000,000 and in an integral multiple of $1,000,000 and which may be up to the aggregate amount of the proposed Competitive Borrowing regardless of the Commitment of the Lender) of the Competitive Advance that the Lender is willing to 26 make to the Borrower and (B) the Competitive Bid Rate or Rates at which the Lender is prepared to make the Competitive Advances. If any selected Lender shall elect not to make a Competitive Bid, such Lender shall so notify the Administrative Agent (A) in the case of a proposed Competitive Borrowing to consist of Eurodollar Competitive Advances, by telex or telecopier, not later than 9:30 A.M. (New York City time), three Business Days prior to a proposed Competitive Borrowing, and (B) in the case of a proposed Competitive Borrowing to consist of Fixed Rate Competitive Advances, by telephone, telex or telecopier not later than 9:45 A.M. (New York City time) on the day of a proposed Competitive Borrowing; provided, however, that failure by any Lender to give such notice shall not cause such Lender to be obligated to make any Competitive Advance. A Competitive Bid submitted by a Lender pursuant to this subsection (ii) shall be irrevocable. (iii) The Administrative Agent shall (A) in the case of a proposed Borrowing to consist of Eurodollar Competitive Advances, promptly notify the Borrower by telex or telecopier and (B) in the case of a proposed Borrowing to consist of Fixed Rate Competitive Advances, notify the Borrower by telephone not later than 10:00 A.M. (New York City time) on the day of such proposed Competitive Borrowing of the Competitive Bids made, the Competitive Bid Rate, the principal amount of each Competitive Bid and the identity of the Lender that made each Competitive Bid. (iv) The Borrower may, in its sole and absolute discretion, subject only to the provisions of this subsection (iv), accept or reject any Competitive Bid. The Borrower shall notify the Administrative Agent by telephone whether and to what extent it has decided to accept or reject any or all of the Competitive Bids (specifying each Lender selected by it to make Competitive Advances, the principal amount of such Advances and the Competitive Bid Rate) (A) in the case of a Borrowing to consist of Eurodollar Competitive Advances, by not later than 10:15 A.M. (New York City time) three Business Days before a proposed Competitive Borrowing (promptly confirmed by a Competitive Bid Letter, hand delivered, telexed or telecopied by the Borrower to the Administrative Agent), and (B) in the case of a Borrowing to consist of Fixed Rate Competitive Advances, not later than 10:15 A.M. (New York City time) on the day of a proposed Competitive Borrowing (confirmed in writing substantially in the form of Exhibit 3.04A-2, hand delivered, telexed or telecopied to the Administrative Agent not later than 5:00 P.M. (New York City time) on 27 the day of the proposed Competitive Borrowing); provided, however, that (1) the failure by the Borrower to give such notice shall be deemed to be a rejection of all the bids referred to in subsection (iii) above, (2) the Borrower shall not accept a bid made at a particular Competitive Bid Rate if the Borrower has decided to reject a bid made at a lower Competitive Bid Rate, (3) the aggregate amount of the Competitive Bids accepted by the Borrower shall not exceed the principal amount specified in the Competitive Bid Request, (4) if the Borrower shall determine to accept Competitive Bids made at a particular Competitive Bid Rate but the aggregate amount of all Competitive Bids made at such Competitive Bid Rate, when added to the aggregate amount of all Competitive Bids at lower Competitive Bid Rates, would cause the total amount of Competitive Bids to be accepted by the Borrower to exceed the principal amount specified in the Competitive Bid Request, then the Borrower shall accept all such Competitive Bids at such Competitive Bid Rate in an aggregate amount reduced to eliminate such excess, which acceptance, in the case of multiple Competitive Bids at such Competitive Bid Rate, shall be made ratably in accordance with the amount of each such Competitive Bid (subject to clause (5) below), and (5) no Competitive Bid shall be accepted for a Competitive Advance unless such Competitive Advance is in a minimum principal amount of $5,000,000 and an integral multiple of $1,000,000 in excess thereof; provided further, however, that if a Competitive Advance must be in an amount of less than $5,000,000 because of the provisions of (4) above, such Competitive Advance may be for a minimum of $1,000,000 or any integral multiple thereof, and in calculating the pro rata allocation of acceptances of portions of multiple bids at a particular Competitive Bid Rate pursuant to (4) above, the amounts shall be rounded to integral multiples of $1,000,000 in a manner which shall be in the discretion of the Borrower. Notice given by the Borrower pursuant to this subsection (iv) shall be irrevocable. (v) The Administrative Agent shall notify each bidding Lender whether or not its Competitive Bid has been accepted (and if so, in what principal amount and at what Competitive Bid Rate) (A) in the case of a proposed Borrowing to consist of Eurodollar Competitive Advances, promptly by telex or telecopier and (B) in the case of a proposed Borrowing to consist of Fixed Rate Competitive Advances, by telephone (such information to be confirmed in writing by the Administrative Agent to the Lenders not later than 12:00 noon (New York City time) on such day), not later than 10:30 A.M. (New York City time) on the 28 day of the Competitive Borrowing and each successful bidder will thereupon become bound, subject to the other applicable conditions hereof, to make the Competitive Advance in respect of which its bid has been accepted. The Administrative Agent shall not be required to disclose to any Lender any other information with respect to the Competitive Bids submitted, but the Administrative Agent may, at the request of any Lender, and at the instruction of the Borrower, provide to such Lender certain information with respect to Competitive Bids made and accepted as deemed appropriate by the Borrower. (vi) Neither the Administrative Agent nor any Lender shall be responsible to the Borrower for (A) a failure to fund a Competitive Advance on the date such Advance is requested by the Borrower or (B) the funding of such Advance at a Competitive Bid Rate or in an amount other than that confirmed pursuant to subsections (iv) and (v) above due to delays in communications, miscommunications (including, without limitation, any variance between telephonic bids or acceptances and the written notice provided by the Administrative Agent to the Lenders pursuant to Sections (v) above or the written confirmation supplied by the Borrower pursuant to subsection (iv) above) and the like among the Borrower, the Administrative Agent and the Lenders, and the Borrower agrees to indemnify each Lender for all reasonable costs and expenses incurred by it on demand pursuant to Section 4.03(e) hereof, as a result of any such delay, miscommunication or the like that results in a failure to fund a Competitive Advance or the funding of a Competitive Advance at a Competitive Bid Rate or in an amount other than that set forth in the written notice provided by the Administrative Agent to the Lenders pursuant to subsection (v) above or the written confirmation supplied by the Borrower pursuant to subsection (iv) above. (vii) If the Administrative Agent has elected to submit a Competitive Bid in its capacity as Lender, such bid must be submitted directly to the Borrower one quarter of an hour earlier than the latest time at which the other Lenders are required to submit their bids to the Administrative Agent pursuant to subsection (ii) above. (viii) A Competitive Bid Request for Eurodollar Competitive Advances shall not be made within five Business Days after the date of any previous Competitive Bid Request for Eurodollar Competitive Advances. 29 (ix) All notices required by this Section 3.04 must be made in accordance with Section 10.02. (x) To facilitate the administration of this Agreement and the processing of Competitive Bids, each Lender has submitted, or will submit upon becoming a Lender pursuant to Section 10.07 hereof, to the Administrative Agent a completed administrative questionnaire in the form of Exhibit 3.04E, and each Lender agrees to promptly notify the Administrative Agent in writing of any change in the information so provided. SECTION 05. Making of Advances. (a) Each Lender shall, before 12:00 noon (New York City time) on the date of such Borrowing, make available for the account of its Applicable Lending Office to the Administrative Agent at the Administrative Agent's address referred to in Section 10.02, in same day funds, such Lender's portion of such Borrowing. Contract Advances shall be made by the Lenders pro rata and Competitive Advances shall be made by the Lender or Lenders whose Competitive Bids therefor have been accepted pursuant to Section 3.04(b)(iv) in the amounts so accepted. After the Administrative Agent's receipt of such funds and upon fulfillment of the applicable conditions set forth in Article V, the Administrative Agent will make such funds available to the Borrower at the Administrative Agent's aforesaid address. (b) Unless the Administrative Agent shall have received notice from a Lender prior to the date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender's ratable portion of such Borrowing, the Administrative Agent may assume that such Lender has made such portion available to the Administrative Agent on the date of such Borrowing in accordance with subsection (a) of this Section 3.05, and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower on such date a corresponding amount. If and to the extent that any such Lender (a "non-performing Lender") shall not have so made such ratable portion available to the Administrative Agent, the non-performing Lender and the Borrower severally agree to repay to the Administrative Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to the Borrower until the date such amount is repaid to the Administrative Agent, at (i) in the case of the Borrower, the interest rate applicable at the time to Advances comprising such Borrowing and (ii) in the case of such Lender, the Federal Funds Rate. Nothing herein shall in any way limit, waive or otherwise reduce any claims that any party hereto may have against any non-performing Lender. (c) The failure of any Lender to make the Advance to be made by it as part of any Borrowing shall not relieve any other Lender of its obligation, if any, hereunder to make its Advance on the date of such Borrowing, but no Lender shall be responsible for the failure of any other Lender to make the Advance to be made by such other Lender on the date of any Borrowing. SECTION 06. Repayment of Advances. The Borrower shall repay the principal amount of each Contract Advance on the Termination Date. The Borrower shall repay the principal amount of each Competitive Advance on the last day of the Interest Period for such Advance. 30 SECTION 07. Interest. (a) Interest Periods. The period between the date of each Advance and the date of payment in full of such Advance shall be divided into successive periods of months or days ("Interest Periods") for purposes of computing interest applicable thereto; provided that, in the case of Competitive Advances, the period from the date of each Advance until the final maturity of such Advance shall be a single Interest Period. The initial Interest Period for each Contract Advance shall begin on the day such Advance is made, and each subsequent Interest Period shall begin on the last day of the immediately preceding Interest Period for such Advance. All Contract Advances and Competitive Advances comprising part of the same Borrowing shall have the same Interest Period, as selected by the Borrower in accordance with this Section 3.07(a) and the other provisions of this Article III. The duration of each Interest Period shall be (i) in the case of any Eurodollar Rate Advance or Eurodollar Competitive Advance, 1, 2, 3 or 6 months, (ii) in the case of any CD Rate Advance, 30, 60, 90 or 180 days, (iii) in the case of any Base Rate Advance, until the earlier of repayment of such Advance in full or the Termination Date, and (iv) in the case of any Fixed Rate Competitive Advance, any number of days, but no more than 270 days; provided, however, that no Interest Period may be selected by the Borrower if such Interest Period would end after the Termination Date. (b) Interest Rates. The Borrower shall pay interest on the unpaid principal amount of each Advance owing to each Lender from the date of such Advance until such principal amount shall be paid in full, at the Applicable Rate for such Advance (except as otherwise provided in this subsection (b)), payable as follows: (i) Eurodollar Rate Advances and Eurodollar Competitive Advances. If such Advance is a Eurodollar Rate Advance or Eurodollar Competitive Advance, interest thereon shall be payable on the last day of each Interest Period therefor and, if any such Interest Period has a duration of more than three months, also on the day of the third month during such Interest Period which corresponds to the first day of such Interest Period (or, if any such month does not have a corresponding day, then on the last day of such month); provided that any amount of principal which is not paid when due (whether on the Termination Date, by acceleration or otherwise) shall bear interest, from the date on which such amount is due until such amount is paid in full, payable on demand, at a rate per annum equal at all times to (A) for the remaining term, if any, of the Interest Period for such Advance, 2% per annum above the Applicable Rate for such Advance for such Interest Period, and (B) thereafter, 2% per annum above the Applicable Rate in effect from time to time for Base Rate Advances. (ii) CD Rate Advances. If such Advance is a CD Rate Advance, interest thereon shall be payable on the last day of each Interest Period therefor and, if any such Interest Period has a duration of more than 90 days, also on the day which is 90 days from the first day of such Interest 31 Period; provided that any amount of principal which is not paid when due (whether on the Termination Date, by acceleration or otherwise) shall bear interest, from the date on which such amount is due until such amount is paid in full, payable on demand, at a rate per annum equal at all times to (A) for the remaining term, if any, of the Interest Period for such Advance, 2% per annum above the Applicable Rate for such Advance for such Interest Period, and (B) thereafter, 2% per annum above the Applicable Rate in effect from time to time for Base Rate Advances. (iii) Base Rate Advances. If such Advance is a Base Rate Advance, interest thereon shall be payable quarterly on the last day of each February, May, August and November and on the date such Base Rate Advance shall be paid in full; provided that any amount of principal which is not paid when due (whether on the Termination Date, by acceleration or otherwise) shall bear interest, from the date on which such amount is due until such amount is paid in full, payable on demand, at a rate per annum equal at all times to 2% per annum above the Applicable Rate in effect from time to time for Base Rate Advances. (iv) Fixed Rate Competitive Advances. If such Advance is a Fixed Rate Competitive Advance, interest thereon shall be payable on the last day of the Interest Period therefor and, if any Interest Period has a duration of more than 90 days, on each day which occurs during such Interest Period every 90 days from the first day of such Interest Period, provided that any amount of principal which is not paid when due (whether on the Termination Date, by acceleration or otherwise) shall bear interest, from the date on which such amount is due until such amount is paid in full, payable on demand, at a rate per annum equal at all times to (A) for the remaining, if any, of the original stated maturity of such Advance, 2% per annum above the rate of interest applicable to such Advance immediately prior to the date on which such amount became due, and (B) thereafter, 2% per annum above the sum of the Alternate Base Rate in effect from time to time plus the Applicable Rate in effect from time to time for Base Rate Advances. (c) Other Amounts. Any other amounts payable hereunder that are not paid when due shall (to the fullest extent permitted by law) bear interest, from the date when due until paid in full, at a rate per annum equal at all times to 2% per annum above the Applicable Rate in effect from time to time for Base Rate Advances, payable on demand. (d) Interest Rate Determinations. The Administrative Agent shall give prompt notice to the Borrower and the Lenders of the 32 Applicable Rate determined from time to time by the Administrative Agent for each Contract Advance. Each Co-Agent agrees to furnish to the Administrative Agent timely information for the purpose of determining the Eurodollar Rate or CD Rate for any Interest Period. If any one Co-Agent shall not furnish such timely information, the Administrative Agent shall determine such interest rate on the basis of the timely information furnished by the other two Co-Agents. ARTICLE IV PAYMENTS SECTION 01. Payments and Computations. (a) The Borrower shall make each payment hereunder and under the other Loan Documents not later than 11:00 A.M. (New York City time) on the day when due in U.S. Dollars to the Administrative Agent at its address referred to in Section 10.02 in same day funds. The Administrative Agent will promptly thereafter cause to be distributed like funds relating to the payment of principal, interest, fees or other amounts payable to the Lenders, to the respective Lenders to whom the same are payable, for the account of their respective Applicable Lending Offices, in each case to be applied in accordance with the terms of this Agreement. Upon its acceptance of a Lender Assignment and recording of the information contained therein in the Register pursuant to Section 10.07, from and after the effective date specified in such Lender Assignment, the Administrative Agent shall make all payments hereunder and under the Notes in respect of the interest assigned thereby to the Lender assignee thereunder, and the parties to such Lender Assignment shall make all appropriate adjustments in such payments for periods prior to such effective date directly between themselves. (b) The Borrower hereby authorizes the Administrative Agent and each Lender, if and to the extent payment owed to the Administrative Agent or such Lender, as the case may be, is not made when due hereunder (or, in the case of a Lender, under the Note held by such Lender), to charge from time to time against any or all of the Borrower's accounts with the Administrative Agent or such Lender, as the case may be, any amount so due. (c) All computations of interest based on the Alternate Base Rate when based on the Prime Rate and of fees payable pursuant to Section 2.02(a) and (b) shall be made by the Administrative Agent on the basis of a year of 365 or 366 days, as the case may be. All computations of interest and other amounts pursuant to Section 4.03 shall be made by the Lender claiming such interest or other amount, on the basis of a year of 360 days. All other computations of interest and fees hereunder (including computations of interest based on the Eurodollar Rate, the CD Rate and the Federal Funds Rate (including the Alternate Base Rate if and so long as such Rate is based on the Federal Funds Rate) and any interest rate applicable to a Competitive Advance) shall be made by the Administrative Agent on the basis of a year of 360 days. In each such case, such computation shall be made for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest or fees are payable. Each such determination by the Administrative Agent or a Lender shall be conclusive and binding for all purposes, absent manifest error. (d) Whenever any payment hereunder or under any other Loan Document shall be stated to be due, or the last day of an Interest 33 Period hereunder shall be stated to occur, on a day other than a Business Day, such payment shall be made and the last day of such Interest Period shall occur on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest and fees hereunder; provided, however, that if such extension would cause payment of interest on or principal of Eurodollar Rate Advances or Eurodollar Competitive Advances to be made, or the last day of an Interest Period for a Eurodollar Rate Advance or a Eurodollar Competitive Advance to occur, in the next following calendar month, such payment shall be made on the next preceding Business Day and such reduction of time shall in such case be included in the computation of payment of interest hereunder. (e) Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Lenders hereunder that the Borrower will not make such payment in full, the Administrative Agent may assume that the Borrower has made such payment in full to the Administrative Agent on such date and the Administrative Agent may, in reliance upon such assumption, cause to be distributed to each Lender on such due date an amount equal to the amount then due such Lender. If and to the extent the Borrower shall not have so made such payment in full to the Administrative Agent, such Lender shall repay to the Administrative Agent forthwith on demand such amount distributed to such Lender, together with interest thereon, for each day from the date such amount is distributed to such Lender until the date such Lender repays such amount to the Administrative Agent, at the Federal Funds Rate. SECTION 02. Prepayments. (a) The Borrower shall have no right to prepay any principal amount of any Contract Advances except in accordance with subsection (b) below. The Borrower shall have no right to prepay any principal amount of any Competitive Advance. (b) The Borrower may, upon at least one Business Days' notice to the Administrative Agent stating the proposed date and aggregate principal amount of the prepayment, and if such notice is given, the Borrower shall, prepay the outstanding principal amounts of Contract Advances comprising part of the same Borrowing, in whole or ratably in part, together with accrued interest to the date of such prepayment on the principal amount prepaid; provided, however, that each partial prepayment shall be in an aggregate principal amount not less than $10,000,000. (c) On the Merger Effective Date, the Borrower shall prepay outstanding Advances in such amount necessary to reduce such outstanding Advances to an aggregate amount equal to $125,000,000. SECTION 03. Yield Protection. (a) Change in Circumstances. Notwithstanding any other provision herein, if after the date hereof, the adoption of or any change in applicable law or regulation or in the interpretation or administration thereof by any governmental authority charged with the interpretation or administration thereof (whether or not having the force of law) shall (i) change the basis of taxation of payments to any Lender of the principal of or interest on any Eurodollar Rate Advance, CD Rate Advance or Competitive Advance made by such Lender or any fees or other amounts payable hereunder (other than changes in respect of taxes imposed on the overall net income of such Lender or its Applicable Lending Office by the jurisdiction in which such Lender has its principal office or in which such Applicable Lending Office is located or by any political subdivision or taxing authority therein), or (ii) shall impose, modify or deem applicable any reserve, special deposit or similar requirement against 34 commitments or assets of, deposits with or for the account of, or credit extended by, such Lender (excluding, in the case of CD Rate Advances, any such requirement included in the Domestic Reserve Adjustment), or (iii) shall impose on such Lender or the London interbank market any other condition affecting this Agreement or Eurodollar Rate Advances, CD Rate Advances or Competitive Advances made by such Lender, and the result of any of the foregoing shall be to increase the cost to such Lender of agreeing to make, making or maintaining any Advance or to reduce the amount of any sum received or receivable by such Lender hereunder or under the Notes (whether of principal, interest or otherwise), then the Borrower will pay to such Lender upon demand such additional amount or amounts as will compensate such Lender for such additional costs incurred or reduction suffered. (b) Capital. If any Lender shall have determined that the applicability of any law, rule, regulation or guideline adopted pursuant to or arising out of the July 1988 report of the Basle Committee on Banking Regulations and Supervisory Practices entitled "International Convergence of Capital Measurement and Capital Standards", or the adoption after the date hereof of any law, rule, regulation or guideline regarding capital adequacy, or any change in any of the foregoing or in the interpretation or administration of any of the foregoing by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Lender (or any Applicable Lending Office of such Lender) or any Lender's holding company with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect (i) of reducing the rate of return on such Lender's capital or on the capital of such Lender's holding company, if any, as a consequence of this Agreement, the Commitment of such Lender hereunder or the Advances made by such Lender pursuant hereto to a level below that which such Lender or such Lender's holding company could have achieved, but for such applicability, adoption, change or compliance (taking into consideration such Lender's policies and the policies of such Lender's holding company with respect to capital adequacy), or (ii) of increasing or otherwise determining the amount of capital required or expected to be maintained by such Lender or such Lender's holding company based upon the existence of this Agreement, the Commitment of such Lender hereunder, the Advances made by such Lender pursuant hereto and other similar such commitments, agreements or assets, then from time to time the Borrower shall pay to such Lender upon demand such additional amount or amounts as will compensate such Lender or such Lender's holding company for any such reduction or allocable capital cost suffered. (c) Eurodollar Reserves. The Borrower shall pay to each Lender upon demand, so long as such Lender shall be required under regulations of the Board of Governors of the Federal Reserve System to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency Liabilities, additional interest on the unpaid principal amount of each Eurodollar Rate Advance of such Lender, from the date of such Advance until such principal amount is paid in full, at an interest rate per annum equal at all times to the remainder obtained by subtracting (i) the Eurodollar Rate for the Interest Period for such Advance from (ii) the rate obtained by dividing such Eurodollar Rate by a percentage equal to 100% minus the Eurodollar Reserve Percentage of such Lender for such Interest Period. Such additional interest shall be determined by such Lender and notified to the Borrower and the Administrative Agent. (d) Breakage Indemnity. The Borrower shall indemnify each Lender against any loss, cost or reasonable expense which such Lender 35 may sustain or incur as a consequence of (i) any failure by the Borrower to fulfill on the date of any Borrowing hereunder the applicable conditions set forth in Article V, (ii) any failure by the Borrower to borrow or Convert any Advance hereunder after irrevocable Notice of Borrowing or Notice of Conversion has been given pursuant to Section 3.01 or 3.02, (iii) any payment, prepayment or Conversion of a Eurodollar Rate Advance or CD Rate Advance required or permitted by any other provision of this Agreement or otherwise made or deemed made on a date other than the last day of the Interest Period applicable thereto, (iv) any default in payment or prepayment of the principal amount of any Advance or any part thereof or interest accrued thereon, as and when due and payable (at the due date thereof, by irrevocable notice of prepayment or otherwise) or (v) the occurrence of any Event of Default, including, in each such case, any loss or reasonable expense sustained or incurred or to be sustained or incurred in liquidating or employing deposits from third parties acquired to effect or maintain such Advance or any part thereof as a Eurodollar Rate Advance, CD Rate Advance or Competitive Advance. Such loss, cost or reasonable expense shall include an amount equal to the excess, if any, as reasonably determined by such Lender, of (A) its cost of obtaining the funds for the Advance being paid, prepaid, Converted or not borrowed (based on the Eurodollar Rate or CD Rate) for the period from the date of such payment, prepayment, Conversion or failure to borrow to the last day of the Interest Period for such Advance (or, in the case of a failure to borrow, the Interest Period for such Advance which would have commenced on the date of such failure) over (B) the amount of interest (as reasonably determined by such Lender) that would be realized by such Lender in reemploying the funds so paid, prepaid, Converted or not borrowed for such period or Interest Period, as the case may be. For purposes of this subsection (d), it shall be presumed that each Lender shall have funded each such Advance with a fixed-rate instrument bearing the rates and maturities designated in the determination of the Applicable Rate for such Advance. (e) Notices. A certificate of each Lender setting forth such Lender's claim for compensation hereunder and the amount necessary to compensate such Lender or its holding company pursuant to subsections (a) through (d) of this Section 4.03 shall be submitted to the Borrower and the Administrative Agent and shall be conclusive and binding for all purposes, absent manifest error. The Borrower shall pay each Lender directly the amount shown as due on any such certificate within 10 days after its receipt of the same. The failure of any Lender to provide such notice or to make demand for payment under this Section 4.03 shall not constitute a waiver of such Lender's rights hereunder; provided that such Lender shall not be entitled to demand payment pursuant to subsections (a) through (d) of this Section 4.03, in respect of any loss, cost, expense, reduction or reserve, if such demand is made more than one year following the later of such Lender's incurrence or sufferance thereof or such Lender's actual knowledge of the event giving rise to such Lender's rights pursuant to such subsections. The protection of this Section 4.03 shall be available to each Lender regardless of any possible contention of the invalidity or inapplicability of the law, rule, regulation, guideline or other change or condition which shall have occurred or been imposed. (f) Change in Legality. Notwithstanding any other provision herein, if the adoption of or any change in any law or regulation or in the interpretation or administration thereof by any governmental authority charged with the administration or interpretation thereof shall make it unlawful for any Lender to make or maintain any Eurodollar Rate Advance or Eurodollar Competitive Advance or to give effect to its obligations as contemplated hereby with respect to any Eurodollar Rate 36 Advance or Eurodollar Competitive Advance, then, by written notice to the Borrower and the Administrative Agent, such Lender may: (i) declare that Eurodollar Rate Advances and Eurodollar Competitive Advances will not thereafter be made by such Lender hereunder, whereupon the right of the Borrower to select Eurodollar Rate Advances for any Borrowing or Conversion and any Competitive Borrowing consisting of Eurodollar Competitive Advances shall be forthwith suspended until such Lender shall withdraw such notice as provided hereinbelow or shall cease to be a Lender hereunder pursuant to Section 10.07(g) hereof; and (ii) require that all outstanding Eurodollar Rate Advances and Eurodollar Competitive Advances made by it be Converted to Base Rate Advances, in which event all such Eurodollar Rate Advances and Eurodollar Competitive Advances by all Lenders shall be automatically Converted to Base Rate Advances as of the effective date of such notice as provided herein below. Upon receipt of any such notice, the Administrative Agent shall promptly notify the other Lenders. Promptly upon becoming aware that the circumstances that caused such Lender to deliver such notice no longer exist, such Lender shall deliver notice thereof to the Borrower and the Administrative Agent withdrawing such prior notice (but the failure to do so shall impose no liability upon such Lender). Promptly upon receipt of such withdrawing notice from such Lender (or upon such Lender assigning all of its Commitments, Advances, participation and other rights and obligations hereunder in accordance with Section 10.07(g)), the Administrative Agent shall deliver notice thereof to the Borrower and the Lenders and such suspension shall terminate. Prior to any Lender giving notice to the Borrower under this subsection (f), such Lender shall use reasonable efforts to change the jurisdiction of its Applicable Lending Office, if such change would avoid such unlawfulness and would not, in the sole determination of such Lender, be otherwise disadvantageous to such Lender. Any notice to the Borrower by any Lender shall be effective as to each Eurodollar Rate Advance and Eurodollar Competitive Advance on the last day of the Interest Period currently applicable to such Eurodollar Rate Advance or Eurodollar Competitive Advance; provided that if such notice shall state that the maintenance of such Advance until such last day would be unlawful, such notice shall be effective on the date of receipt by the Borrower and the Administrative Agent. (g) Market Rate Disruptions. If, (i) less than two Co-Agents furnish timely information to the Administrative Agent for determining the Eurodollar Rate for Eurodollar Rate Advances or the CD Rate for CD Advances, in connection with any proposed Borrowing or Conversion or (ii) if the Majority Lenders shall notify the Administrative Agent that the Eurodollar Rate or CD Rate, as the case may be, will not adequately reflect the cost to such Majority Lenders of making, funding or maintaining their respective Eurodollar Rate Advances or CD Rate Advances, respectively, the right of the Borrower to select or receive such Type of Advances for any Borrowing or Conversion shall be forthwith suspended until the Administrative Agent shall notify the Borrower and the Lenders that the circumstances 37 causing such suspension no longer exist, and until such notification from the Administrative Agent each requested Borrowing or Conversion into such Type of Advance hereunder shall be deemed to be a request for Base Rate Advances. SECTION 04. Sharing of Payments, Etc. If any Lender shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise, but excluding any proceeds received by assignments or sales of participation in accordance with Section 10.07 hereof to a Person that is not an Affiliate of the Borrower) on account of the Advances owing to it (other than pursuant to Section 4.03 hereof) in excess of its ratable share of payments on account of the Advances obtained by all the Lenders, such Lender shall forthwith purchase from the other Lenders such participation in the Advances owing to them as shall be necessary to cause such purchasing Lender to share the excess payment ratably with each of them; provided, however, that if all or any portion of such excess payment is thereafter recovered from such purchasing Lender, such purchase from each Lender shall be rescinded and such Lender shall repay to the purchasing Lender the purchase price to the extent of such recovery together with an amount equal to such Lender's ratable share (according to the proportion of (i) the amount of such Lender's required repayment to (ii) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered. The Borrower agrees that any Lender so purchasing a participation from another Lender pursuant to this Section 4.04 may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off) with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of such participation. Notwithstanding the foregoing, if any Lender shall obtain any such excess payment involuntarily, such Lender may, in lieu of purchasing participation from the other Lenders in accordance with this Section 4.04, on the date of receipt of such excess payment, return such excess payment to the Administrative Agent for distribution in accordance with Section 4.01(a). SECTION 05. Taxes. (a) All payments by the Borrower hereunder and under the other Loan Documents shall be made in accordance with Section 4.01, free and clear of and without deduction for all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding, in the case of each Lender and the Administrative Agent, taxes imposed on its overall net income, and franchise taxes imposed on it, by the jurisdiction under the laws of which such Lender or the Administrative Agent (as the case may be) is organized or any political subdivision thereof and, in the case of each Lender, taxes imposed on its overall net income, and franchise taxes imposed on it, by the jurisdiction of such Lender's Applicable Lending Office or any political subdivision thereof (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as "Taxes"). If the Borrower shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder or under any other Loan Document to any Lender or the Administrative Agent, (i) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 4.05) such Lender or the Administrative Agent (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law. 38 (b) In addition, the Borrower agrees to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies that arise from any payment made hereunder or under any other Loan Document or from the execution, delivery or registration of, or otherwise with respect to, this Agreement or any other Loan Document (hereinafter referred to as "Other Taxes"). (c) The Borrower will indemnify each Lender and the Administrative Agent for the full amount of Taxes and Other Taxes (including, without limitation, any Taxes and any Other Taxes imposed by any jurisdiction on amounts payable under this Section 4.05) paid by such Lender or the Administrative Agent (as the case may be) and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted. This indemnification shall be made within 30 days from the date such Lender or the Administrative Agent (as the case may be) makes written demand therefor. If any Taxes or Other Taxes for which a Lender or the Administrative Agent has received payments from the Borrower hereunder shall be finally determined to have been incorrectly or illegally asserted and are refunded to such Lender or the Administrative Agent, such Lender or the Administrative Agent, as the case may be, shall promptly forward to the Borrower any such refunded amount. The Borrower's, the Administrative Agent's and each Lender's obligations under this Section 4.05 shall survive the payment in full of the Advances. (d) Within 30 days after the date of any payment of Taxes, the Borrower will furnish to the Administrative Agent, at its address referred to in Section 10.02, the original or a certified copy of a receipt evidencing payment thereof. (e) Each Lender shall, on or prior to the date it becomes a Lender hereunder, deliver to the Borrower and the Administrative Agent such certificates, documents or other evidence, as required by the Internal Revenue Code of 1986, as amended from time to time (the "Code"), or treasury regulations issued pursuant thereto, including Internal Revenue Service Form 4224 and any other certificate or statement of exemption required by Treasury Regulation Section 1.1441-1(a) or Section 1.1441-6(c) or any subsequent version thereof, properly completed and duly executed by such Lender establishing that it is (i) not subject to withholding under the Code or (ii) totally exempt from United States of America tax under a provision of an applicable tax treaty. Each Lender shall promptly notify the Borrower and the Administrative Agent of any change in its Applicable Lending Office and shall deliver to the Borrower and the Administrative Agent together with such notice such certificates, documents or other evidence referred to in the immediately preceding sentence. Unless the Borrower and the Administrative Agent have received forms or other documents satisfactory to them indicating that payments hereunder or under the Notes are not subject to United States of America withholding tax or are subject to such tax at a rate reduced by an applicable tax treaty, the Borrower or the Administrative Agent shall withhold taxes from such payments at the applicable statutory rate in the case of payments to or for any Lender organized under the laws of a jurisdiction outside the United States of America. Each Lender represents and warrants that each such form supplied by it to the Administrative Agent and the Borrower pursuant to this Section 4.05, and not superseded by another form supplied by it, is or will be, as the case may be, complete and accurate. 39 (f) Any Lender claiming any additional amounts payable pursuant to this Section 4.05 shall use reasonable efforts (consistent with legal and regulatory restrictions) to file any certificate or document requested by the Borrower or to change the jurisdiction of its Applicable Lending Office if the making of such a filing or change would avoid the need for or reduce the amount of any such additional amounts which may thereafter accrue and would not, in the sole determination of such Lender, be otherwise disadvantageous to such Lender. ARTICLE V CONDITIONS PRECEDENT SECTION 01. Conditions Precedent to Commitment Closing. The commitments of the Lenders to make Advances under and in accordance with this Agreement shall not become effective until the following conditions precedent shall have been fulfilled: (a) The Administrative Agent shall have received the following, each dated the date of delivery thereof (unless otherwise specified below), in form and substance satisfactory to each Lender and in sufficient copies for each Lender: (i) Certified copies of the resolutions of the Board of Directors of the Borrower and NUSCO approving, if and to the extent necessary, this Agreement, the other Loan Documents and the other documents to be delivered by the Borrower hereunder and thereunder, and of all documents evidencing other necessary corporate action, if any, with respect to the execution, delivery and performance by the Borrower of this Agreement and the other Loan Documents. (ii) A certificate of the Secretary of the Borrower certifying (A) the names and true signatures of the officers of the Borrower authorized to sign this Agreement and the other Loan Documents and the other documents to be delivered hereunder and thereunder and (B) that attached thereto are true and correct copies of the Articles of Incorporation of the Borrower, and all amendments thereto, and the By-laws of the Borrower, in each case as in effect on such date. (iii) A true and complete copy of the other Financing Agreement, as executed by the parties thereto. (iv) Financial projections, on assumptions acceptable to the Lenders, demonstrating projected compliance with Section 7.01(j) hereof and the terms of the other Financing Agreement (both giving effect to, and not giving effect to, the Merger and the Seabrook Transfer on a prospective basis). 40 (v) An audited balance sheet of the Borrower as at December 31, 1990 and certified financial statements of the Borrower setting forth the results of operations of the Borrower for the fiscal period ending on such date, together with pro-forma adjustments thereto, certified by the Treasurer or Assistant Treasurer, or other officer satisfactory to the Majority Lenders, that such pro-formas were prepared in good faith and on reasonable assumptions, in form and substance satisfactory to the Lenders and conforming with the projected financial information referred to in subsection (iv) above (A) reflecting the proposed capital structure of the Borrower as of June 1, 1991 after giving effect to the reorganization of the Borrower (the "Plan Pro-formas") and (B) reflecting the proposed capital structure of the Borrower after giving effect to the Merger (the "Merger Pro-formas"). (vi) True and complete copies of a favorable ruling by the Internal Revenue Service in response to the requests of NU as described in the Form S-1 insofar as they relate to consummation of the Plan. (vii) A certificate of a duly authorized officer of the Borrower certifying that Schedule IV hereto includes a description of all pending or known threatened actions or proceedings affecting the Borrower or its properties before any court, governmental agency or arbitrator, which may, if adversely determined (A) purport to affect the legality, validity or enforceability of the Plan, the Rate Agreement, the Merger Agreement, any Loan Document or any Significant Contract or (B) materially adversely affect the financial condition, properties, prospects or operations of the Borrower. (viii) A true and complete copy of the order of the Bankruptcy Court confirming the Plan. (ix) Such other approvals, opinions and documents as any Lender, through the Administrative Agent, may reasonably request as to the legality, validity, binding effect or enforceability of this Agreement and the other Financing Agreement. (b) The Borrower shall have paid all fees under or referenced in Section 2.02 hereof, to the extent then due and payable. (c) The Commitment Closing shall have occurred on or prior to June 30, 1991. 41 SECTION 02. Conditions Precedent to Funding Date. The obligation of each Lender to make its initial Advances is subject to the fulfillment of the conditions precedent that the Administrative Agent shall have received on or before the day of such Advances the following, each dated such day (except where specified otherwise below), in form and substance satisfactory to each Lender (except where specified otherwise below) and (except for the Notes) in sufficient copies for each Lender: (a) The Notes to the order of the respective Lenders, duly executed by the Borrower. (b) The Security Documents, duly executed by the Borrower, together with: (1) photocopies of Financing Statements (Form UCC-1) dated on or before the Funding Date duly executed on behalf of the Borrower and in proper form for filing under the Uniform Commercial Code in the State of New Hampshire to perfect the Liens (to the extent such Liens may be perfected by filing) created by the Security Documents and oral confirmation from Sulloway Hollis & Soden that the executed originals of such Financing Statements have been duly filed, and (2) oral confirmation from Sulloway Hollis & Soden of each completion of all recordings and filings of the Security Documents and all other actions, as may be necessary or, in the opinion of the Collateral Agent, desirable to perfect the Liens created by the Security Documents. (c) Evidence that the other Financing Agreement is in full force and effect on such date and that the initial fundings under the Financing Agreement will occur on the Funding Date in accordance with the terms thereof. (d) True and complete photocopies of the Rate Agreement, the Merger Agreement and the Significant Contracts in effect on the Funding Date and all amendments, modifications and supplements thereto, in each such case (other than the Merger Agreement) duly executed by the respective parties thereto. (e) Copies, certified by the Borrower, of all Governmental Approvals listed in Part A of Schedule II hereof. (f) Copies certified by appropriate officers of each of NU, NUSCO and The Connecticut Light and Power Company of (i) the resolutions of the Board of Directors or Board of Trustees of such Person approving the Merger Agreement, the Rate Agreement and the Significant Contracts then in effect to which it is a party and (ii) all other corporate or similar action required to authorize the execution, delivery and performance thereof on behalf of such Person. 42 (g) A certificate of the Secretary of each of NU, NUSCO and The Connecticut Light and Power Company certifying the names and true signatures of the officers of such Person authorized to sign the Merger Agreement, the Rate Agreement and other Significant Contracts referred to in subsection (f) above to which it is a party and all other documents to be delivered in connection therewith on behalf of such Person. (h) A certificate of the Secretary of the Borrower certifying that (i) attached thereto are true and correct copies of the Articles of Incorporation of the Borrower and the By-laws of the Borrower, in each case as in effect on such date and including any and all changes and modifications thereto required under the Plan and (ii) the resolutions of the Board of Directors of the Borrower referred to in Section 5.01(a)(i) are in full force and effect and have not been modified, supplemented, revised or changed in any way since the date on which they were previously delivered, which would adversely affect the execution, delivery and performance by the Borrower of this Agreement and the other Loan Documents; any adverse modification, supplement, revision or change shall be subject to the approval of the Majority Lenders. (i) A certificate of the Secretary of NUSCO certifying that the resolutions of the Board of Directors of NUSCO referred to in Section 5.01(a)(i) are in full force and effect and have not been modified, supplemented, revised or changed in any way since the date on which they were previously delivered, which would adversely affect the execution, delivery and performance of the Borrower of this Agreement and the other Loan Documents; any adverse modification, supplement, revision or change shall be subject to the approval of the Majority Lenders. (j) A certificate signed by the Treasurer or Assistant Treasurer of the Borrower, certifying as to the absence of any material adverse change in the financial condition, operations, properties or prospects of the Borrower from the Plan Pro-formas after giving effect to the transactions occurring on the Plan Effective Date. (k) A certificate signed by the Chief Financial Officer, Treasurer or Assistant Treasurer of NU, certifying as to the absence of any material adverse change in the financial condition, operations, properties or prospects of NU since December 31, 1990 and certifying that the audited consolidated balance sheets of NU as at December 31, 1990 and the related statements of NU setting forth the results of operations of NU and its subsidiaries for the fiscal year then ended, copies of which have been furnished to 43 each Bank, fairly present the financial condition and results of operations of NU and its subsidiaries on a consolidated basis at and for the year ended on such date, and have been prepared in accordance with generally accepted accounting principles consistently applied. (l) A certificate of a duly authorized officer of the Borrower stating that (i) the representations and warranties contained in Section 6.01 are correct, in all material respects, on and as of the Funding Date before and after giving effect to the initial Advances to be made on such date and the application of the proceeds thereof, as though made on and as of such date, (ii) no event has occurred and is continuing which constitutes an Event of Default or Unmatured Default, or would result from such initial Advances or the application of the proceeds thereof and (iii) "Seabrook" is in "commercial operation" (as such terms are referred to in the Rate Agreement). (m) Certificates signed by duly authorized officers of the Borrower and NU to the effect that all conditions to the occurrence of the Plan Effective Date set forth in Article VIII, Section B of the Plan and in any amendments, supplements or modifications to the Plan or to the order of the Bankruptcy Court (referred to in Section 5.01(a)(viii)) shall have been satisfied or waived. Such certificates shall set forth in reasonable detail any such conditions which were waived and the aggregate amounts of (i) the allowed Class 10 and Class 10A claims and the face amounts or estimated amounts, as the case may be, of disputed and unliquidated claims referred to in paragraph 2.j. of Article VIII, Section B of the Plan and (ii) the allowed administrative costs and expenses not paid prior to the Plan Effective Date, as referred to in paragraph 2.l. of Article VIII, Section B of the Plan. The waiver of any condition shall be subject to the approval of the Majority Lenders. (n) Certificates signed by duly authorized officers of the Borrower and NU setting forth the Plan Effective Date and certifying to the effect that the Plan Effective Date will occur concurrently with the initial Advances. (o) A true and complete copy of any and all orders of the Bankruptcy Court amending or supplementing the order confirming the Plan furnished pursuant to Section 5.01(a)(viii),if such amendment or supplemental order changes or adds any conditions to the occurrence of the Plan Effective Date or any material term of the Plan. (p) A certificate of a duly authorized officer of the Borrower describing in reasonable detail all insurance policies and self-insurance programs 44 maintained by the Borrower relating to property insurance and liability insurance, which shall comply with the requirements of Section 7.01(c) hereof and Section 2.03 of each of the PSNH Mortgage and the Seabrook Mortgage, and certifying that all such policies are fully paid and in full force and effect. (q) A certificate of a duly authorized officer of the Borrower updating, if necessary, any information set forth or required to be set forth in Schedule IV hereto. Any adverse change reflected in such updated certificate shall be subject to the approval of the Majority Lenders. (r) Evidence of the issuance at or about par, on terms described in the Form S-1 or in the Preliminary Official Statements and any amendments or supplements thereto relating to the First Mortgage Bonds, of (i) not less than $858,985,000 aggregate principal amount of First Mortgage Bonds and (ii) the Preferred Stock. (s) True and correct copies of the Series D Letter of Credit and Reimbursement Agreement and the Series E Letter of Credit and Reimbursement Agreement, in form and substance satisfactory to the Majority Lenders. (t) Favorable opinions of: (i) Day, Berry & Howard, counsel to NU, in substantially the form of Exhibit 5.02A and as to such other matters as the Majority Lenders, through the Administrative Agent, may reasonably request; (ii) Sulloway Hollis & Soden, special New Hampshire counsel to the Borrower, in substantially the form of Exhibit 5.02B and as to such other matters as the Majority Lenders, through the Administrative Agent, may reasonably request; (iii) Pierre O. Caron, Assistant General Counsel of the Borrower, in substantially the form of Exhibit 5.02C and as to such other matters as the Majority Lenders, through the Administrative Agent, may reasonably request; (iv) Drummond Woodsum Plimpton & MacMahon, special Maine counsel to the Borrower, in substantially the form of Exhibit 5.02D and as to such other matters as the Majority Lenders, through the Administrative Agent, may reasonably request; (v) Zuccaro, Willis & Bent, special Vermont counsel to the Borrower, in substantially the form 45 of Exhibit 5.02E and as to such other matters as the Majority Lenders, through the Administrative Agent, may reasonably request; (vi) Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., special New Hampshire counsel to the Lenders, in substantially the form of Exhibit 5.02F, and as to such other matters as the Majority Lenders, through the Administrative Agent may reasonable request; and (vii) Porter & Travers, counsel to the Co-Agents, in substantially the form of Exhibit 5.02G, and as to such other matters as the Majority Lenders, through the Administrative Agent, may reasonably request. (u) Payment of the fees referred to in Section 2.02 hereof, to the extent then due and payable. (v) A certificate signed by the Assistant General Counsel of the Borrower certifying that (i) the New Hampshire Supreme Court has not granted any motion for rehearing, motion for stay or any request for similar relief in connection with case no. 90-406 captioned Appeal of Robert C. Richards, et. al. and (ii) no other court shall have granted a motion for stay or any request for similar relief in connection with the Plan, the Loan Documents, the initial First Mortgage Bonds, the Preferred Stock or the transactions contemplated thereunder. (w) Such other approvals, opinions and documents as the Majority Lenders, through the Administrative Agent, may reasonably request as to the legality, validity, binding effect or enforceability of the Loan Documents or the financial condition, properties, operations or prospects of the Borrower. SECTION 03. Conditions Precedent to Each Advance. The obligation of any Lender to make any Advance (other than the initial Advance on the Funding Date and other than with respect to a Conversion) hereunder shall be subject to the further conditions precedent that, on the date of such Advance and after giving effect thereto: (a) the following statement shall be true (and each of the giving of the applicable notice or request with respect to such Advance and the performance of such Advance without prior correction by the Borrower shall constitute a representation and warranty by the Borrower that on the date of such Advance such statements are true): (i) the representations and warranties contained in Section 6.01 of this Agreement, in Section 1.02 of the Seabrook Mortgage and in Section 1.02 of the PSNH Mortgage are correct on and as of the date of such Advance, before and after giving effect to such Advance and to the 46 application of the proceeds therefrom, as though made on and as of such date, and (ii) no Event of Default or Unmatured Default has occurred and is continuing, or would result from such Advance or from the application of the proceeds thereof; and (b) the Borrower shall have furnished to the Administrative Agent such other approvals, opinions or documents as any Lender, through the Administrative Agent, may reasonably request as to the legality, validity, binding effect or enforceability of the Loan Document. SECTION 04. Reliance on Certificates. The Lenders and the Administrative Agent shall be entitled to rely conclusively upon the certificates delivered from time to time by officers of the Borrower, NU and the other parties to the Significant Contracts as to the names, incumbency, authority and signatures of the respective persons named therein until such time as the Administrative Agent may receive a replacement certificate, in form acceptable to the Administrative Agent, from an officer of such Person identified to the Administrative Agent as having authority to deliver such certificate, setting forth the names and true signatures of the officers and other representatives of such Person thereafter authorized to act on behalf of such Person. ARTICLE VI REPRESENTATIONS AND WARRANTIES SECTION 01. Representations and Warranties of the Borrower. The Borrower represents and warrants as follows: (a) Prior to the Funding Date, the Borrower is a debtor-in-possession under the Bankruptcy Code pursuant to a voluntary proceeding under the jurisdiction of the Bankruptcy Court and, on and after the Funding Date, will be a corporation duly organized and validly existing under the laws of the State of New Hampshire. The Borrower is duly qualified to do business in, and is in good standing in, all other jurisdictions where the nature of its business or the nature of property owned or used by it makes such qualifications necessary. (b) The execution, delivery and performance by the Borrower of the Rate Agreement, the Merger Agreement, each Loan Document and each Significant Contract to which it is a party are within the Borrower's corporate powers, have been duly authorized by all necessary corporate action, and do not and will not contravene (i) the Borrower's charter or by-laws or (ii) on and after the Funding Date (subject to obtaining any required Governmental Approval with respect to the Merger Agreement, the Agreement for Capacity Transfer, the Sharing Agreement and the Unit Contract), any law or legal or contractual restriction binding on or affecting the Borrower; and such execution, delivery and performance do not or will not result in or require the creation of any Lien (other than pursuant hereto or the Security Documents or the First Mortgage Indenture) upon or with respect to any of its properties. (c) No Governmental Approval referred to in clauses (i) and (ii) in the definition of "Governmental Approvals" is required except 47 as listed in Schedule II hereto, each of which, from and after the Funding Date (in the case of Part A of said Schedule II) or the Merger Effective Date (in the case of Part B of said Schedule II) will have been duly obtained or made, and will be in full force and effect; and except as set forth in Schedule IV hereto or in the certificate referred to in Section 5.02(q) hereof, all applicable periods of time for review, rehearing or appeal with respect thereto shall have expired on such dates; and the Borrower has obtained all Governmental Approvals referred to in clause (iii) in the definition of "Governmental Approvals", except those not yet required but which are obtainable in the ordinary course of business as and when required and those the absence of which would not materially adversely affect the financial condition, properties, prospects or operations of the Borrower as a whole. (d) This Agreement, the Rate Agreement and the Merger Agreement are, and each other Loan Document and each Significant Contract to which the Borrower will be a party when delivered hereunder will be, legal (subject to obtaining any required Governmental Approval with respect to the Merger Agreement, the Agreement for Capacity Transfer, the Sharing Agreement and the Unit Contract), valid and binding obligations of the Borrower enforceable against the Borrower in accordance with their respective terms; subject to the qualification, however, that the enforcement of the rights and remedies herein and therein is subject to bankruptcy and other similar laws of general application affecting rights and remedies of creditors and that the remedy of specific performance or of injunctive relief is subject to the discretion of the court before which any proceedings therefor may be brought. (e) The audited balance sheet of the Borrower as at December 31, 1990, and the related statements of the Borrower setting forth the results of operations of the Borrower for the fiscal year then ended, copies of which have been furnished to each Bank, fairly present in all material respects the financial condition and results of operations of the Borrower at and for the year ended on such date, and have been prepared in accordance with generally accepted accounting principles consistently applied. The Plan Pro-formas, the Merger Pro-formas and the financial projections referred to in Section 5.01(a)(iv), have each been prepared in good faith and on reasonable assumptions. Since December 31, 1990, there has been no material adverse change in the Borrower's financial condition, operations, properties or prospects other than as reflected by specific notation in the Plan Pro-formas. The Borrower has no material non-contingent liabilities as of the Plan Effective Date, after giving effect to the Plan, except as reflected in the Plan Pro-formas and as evidenced by the Loan Documents and all contingent liabilities have been appropriately reserved. (f) Except as set forth in Schedule IV hereto or in the certificate referred to in Section 5.02(q) hereof, there is no pending or known threatened action or proceeding (including, without limitation, any action or proceeding relating to any environmental protection laws or regulations) affecting the Borrower or its properties before any court, governmental agency or arbitrator, which may, if adversely determined, (i) purport to affect the legality, validity or enforceability of the Plan, the Rate Agreement, the Merger Agreement, any Loan Document or any Significant Contract in effect or (ii) materially adversely affect the financial condition, properties, prospects or operations of the Borrower as a whole. (g) On and after the Funding Date, all insurance required by Section 7.01(c) hereof will be in full force and effect. 48 (h) No ERISA Plan Termination Event has occurred nor is reasonably expected to occur with respect to any ERISA Plan which would materially adversely affect the financial condition, properties, prospects or operations of the Borrower, except as disclosed to and consented by the Majority Lenders in writing. Since the date of the most recent Schedule B (Actuarial Information) to the annual report of the Borrower (Form 5500 Series), if any, there has been no material adverse change in the funding status of the ERISA Plans referred to therein and no "prohibited transaction" has occurred with respect thereto, except as described in the Form S-1. Neither the Borrower nor any of its ERISA Affiliates has incurred nor reasonably expects to incur any material withdrawal liability under ERISA to any ERISA Multiemployer Plan, except as disclosed to and consented by the Majority Lenders in writing. (i) The Major Electric Generating Plants are on land in which the Borrower owns a full or an undivided fee interest subject only to Liens permitted by Section 7.02(a) hereof, which do not materially impair the usefulness to the Borrower of such properties; the electric transmission and distribution lines of the Borrower in the main are located in New Hampshire and on land owned in fee by the Borrower or over which the Borrower has easements, or are in or over public highways or public waters pursuant to adequate statutory or regulatory authority, and any defects in the title to such transmission and distribution lands or easements are in the main curable by the exercise of the Borrower's right of eminent domain upon a finding that such eminent domain proceedings are necessary to meet the reasonable requirements of service to the public; the Borrower enjoys peaceful and undisturbed possession under all of the leases under which it is operating, none of which contains any unusual or burdensome provision which will materially affect or impair the operation of the Borrower; and the Security Documents, when duly executed and delivered, will create valid Liens in the Collateral, subject only to Liens permitted by Section 7.02(a) hereof, and, on and after the Funding Date, all filings and other actions necessary to perfect and protect such security interests (to the extent such security interests may be perfected or protected by filing) will have been taken. (j) No material part of the properties, business or operations of the Borrower are materially adversely affected by any fire, explosion, accident, strike, lockout or other labor disputes, drought, storm, hail, earthquake, embargo, act of God or of the public enemy or other casualty (except for any such circumstance, if any, which is covered by insurance which coverage has been confirmed and not disputed by the relevant insurer or by fully-funded self-insurance programs). (k) The Borrower has filed all tax returns (Federal, state and local) required to be filed and paid taxes shown thereon to be due, including interest and penalties, or, to the extent the Borrower is contesting in good faith an assertion of liability based on such returns, has provided adequate reserves in accordance with generally accepted accounting principles for payment thereof. (l) No exhibit, schedule, report or other written information provided by the Borrower or its agents to the Lenders in connection with the negotiation, execution and closing of this Agreement (including, without limitation, the Information Memorandum) knowingly contained when made any material misstatement of fact or knowingly omitted to state any material fact necessary to make the statements contained therein not misleading in light of the circumstances under which they were made. 49 (m) No event has occurred and is continuing which constitutes a material default under the Rate Agreement, the Merger Agreement or any Significant Contract which is in effect. (n) All proceeds of the Advances shall be used for general working capital, including, without limitation, payment of any transaction expenses relating to the Plan and the Merger, and for the acquisition of an additional ownership interest in Seabrook from the Vermont Electric Generation and Transmission Cooperative, Inc. No proceeds of any Advance will be used (i) to acquire any equity security of a class which is registered pursuant to Section 12 of the Securities Exchange Act of 1934 or (ii) to buy or carry any margin stock (within the meaning of Regulation U issued by the Board of Governors of the Federal Reserve System) or to extend credit to others for such purpose. The Borrower (i) is not an "investment company" within the meaning ascribed to that term in the Investment Company Act of 1940 or (ii) is not engaged in the business of extending credit for the purpose of buying or carrying margin stock. ARTICLE VII COVENANTS OF THE BORROWER SECTION 01. Affirmative Covenants. On and after the Funding Date, so long as any Note shall remain unpaid or any Lender shall have any Commitment hereunder, the Borrower will, unless the Majority Lenders shall otherwise consent in writing: (a) Use of Proceeds. Apply all proceeds of each Advance solely as specified in Section 6.01(n) hereof. (b) Payment of Taxes, Etc. Pay and discharge before the same shall become delinquent, all taxes, assessments and governmental charges, royalties or levies imposed upon it or upon its property except to the extent the Borrower is contesting the same in good faith by appropriate proceedings and has set aside adequate reserves for the payment thereof. (c) Maintenance of Insurance. Maintain, or cause to be maintained, insurance (including appropriate plans of self-insurance) covering the Borrower and its properties in effect at all times in such amounts and covering such risks as may be required by law and in addition as is usually carried by companies engaged in similar businesses and owning similar properties. (d) Preservation of Existence, Etc. Preserve and maintain its corporate existence, material rights (statutory and otherwise) and franchises except as otherwise expressly provided in the Plan or in the Security Documents. (e) Compliance with Laws, Etc.. Comply in all material respects with the requirements of all applicable laws, rules, regulations and orders of any governmental authority, including without limitation any such laws, rules, regulations and orders relating to utilities, zoning, environmental protection, use and disposal of Hazardous Substances, land use, construction and building restrictions, and employee safety and health matters relating to business operations, except to the extent (i) that the Borrower is contesting the same in good faith by 50 appropriate proceedings or (ii) that any such non-compliance, and the enforcement or correction thereof, would not materially adversely affect the financial condition, properties, prospects or operations of the Borrower as a whole. (f) Inspection Rights. At any time and from time to time upon reasonable notice, permit the Administrative Agent and its agents and representatives to examine and make copies of and abstracts from the records and books of account of, and the properties of, the Borrower and to discuss the affairs, finances and accounts of the Borrower with the Borrower and of its officers, directors and accountants. (g) Keeping of Books. Keep proper records and books of account, in which full and correct entries shall be made of all financial transactions of the Borrower and the assets and business of the Borrower, in accordance with good accounting practices consistently applied. (h) Performance of Related Agreements. (i) From and after the effective date of the Rate Agreement, the Merger Agreement and each Significant Contract, (A) perform and observe all material terms and provisions of such agreements to be performed or observed by the Borrower and (B) take all reasonable steps to enforce such agreements substantially in accordance with their terms and to preserve the rights of the Borrower thereunder; provided, that the foregoing provisions of this Section 7.01(h) shall not preclude the Borrower from any waiver, amendment, modification, consent or termination permitted under Section 7.02(h) hereof. (ii) Upon any termination of the Merger Agreement, cause NUSCO to continue its obligations under the Management Services Agreement pursuant to Section 7(b)(i) thereof until the earlier of (A) 45 days after written notice from the Borrower to the Administrative Agent of the Borrower's intention to terminate such arrangement or (B) expiration of the six-month period specified in said Section 7(b)(i). (i) Collection of Accounts Receivable. Promptly bill, and diligently pursue collection of, in accordance with customary utility practices, all accounts receivable owing to the Borrower and all other amounts that may from time to time be owing to the Borrower for services rendered or goods sold. (j) Maintenance of Financial Covenants. (i) Operating Income to Interest Expense. Maintain, for each period of four consecutive fiscal quarters ending on the dates set forth below, a ratio of Operating Income to Interest Expense not less than the respective ratio specified below: 51 Period of Four Fiscal Quarters Ending on the Following Dates: Ratio June 30, 1992 1.30:1 September 30, 1992 1.30:1 December 31, 1992 1.40:1 March 31, 1993 1.40:1 June 30, 1993 1.40:1 September 30, 1993 1.40:1 December 31, 1993 1.50:1 March 31, 1994 1.50:1 Termination Date 1.50:1 (ii) Common Equity to Total Capitalization. Maintain at all times a ratio of Common Equity to Total Capitalization of not less than the respective ratio specified below: Prior to the Merger Effective Date: Period Ratio Funding Date through and 0.26:1 including December 31, 1991 January 1, 1992 through and 0.28:1 and including September 30, 1993 October 1, 1993 through and 0.30:1 including the Termination Date On and After the Merger Effective Date: Period Ratio Funding Date through and 0.20:1 including June 30, 1993 July 1, 1993 through and 0.21:1 including the Termination Date (k) Maintenance of Properties, Etc. (i) As to properties of the type described in Section 6.01(i), maintain title of the quality described therein; and (ii) preserve, maintain, develop, and operate in substantial conformity with all laws, material contractual obligations and prudent practices prevailing in the industry, all of its properties which are used or useful in the conduct of its business in good working order and condition, ordinary wear and tear excepted, except to the extent such non- conformity would not materially adversely affect the financial condition, properties, prospects or operations of the Borrower as a whole. (l) Governmental Approvals. Duly obtain on or prior to such date as the same may become legally required, and thereafter maintain in effect at all times, all Governmental Approvals on its part to be 52 obtained, except those the absence of which would not materially adversely affect the financial condition, properties, prospects or operations of the Borrower as a whole. (m) Further Assurances. Promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary or that any Lender through the Administrative Agent may reasonably request in order to fully give effect to the interests and properties purported to be covered by the Security Documents. SECTION 02. Negative Covenants. On and after the Funding Date, and so long as any Note shall remain unpaid or any Lender shall have any Commitment hereunder, the Borrower will not, without the written consent of the Majority Lenders: (a) Liens, Etc. Create, incur, assume or suffer to exist any lien, security interest, or other charge or encumbrance (including the lien or retained security title of a conditional vendor) of any kind, or any other type of preferential arrangement the intent or effect of which is to assure a creditor against loss or to prefer one creditor over another creditor (other than any preferential arrangement under the Joint Ownership Agreement with respect to any party thereto) upon or with respect to any of its properties of any character (any of the foregoing being referred to herein as a "Lien") whether now owned or hereafter acquired, or sign or file under the Uniform Commercial Code of any jurisdiction a financing statement which names the Borrower as debtor, sign any security agreement authorizing any secured party thereunder to file such financing statement, or assign accounts, excluding, however, from the operation of the foregoing restrictions the Liens created or perfected under the Loan Documents and the following, whether now existing or hereafter created or perfected: (i) Liens on property specifically reserved, excepted and excluded by subparagraphs (c) through (g) and subparagraph (j) following the Granting Clauses section of the First Mortgage Indenture; (ii) Permitted Encumbrances (as defined in the PSNH Mortgage) on the Indenture Assets (except Liens referred to in paragraphs (s) and (t) of Schedule C to the PSNH Mortgage hereafter directly created by the Borrower, provided, however, that the Borrower may create any such Lien with the consent of the Majority Lenders if such Lien would not materially adversely affect the security granted under the PSNH Mortgage, as determined by the Majority Lenders in their reasonable discretion), provided that in no event shall the outstanding principal amount of the First Mortgage Bonds exceed at any time the First Mortgage Bond Amount; (iii) Permitted Encumbrances (as defined in the Seabrook Mortgage) on the Seabrook Indenture Assets (except Liens referred to in paragraphs (s) and (t) of Schedule C to the Seabrook Mortgage hereafter created, incurred or assumed by the Borrower, provided, however, that the Borrower may create any such Lien with the 53 consent of the Majority Lenders if such Lien would not materially adversely affect the security granted under the Seabrook Mortgage, as determined by the Majority Lenders in their reasonable discretion); (iv) Liens referred to in paragraphs (b) through (t) of Schedule C to the PSNH Mortgage on realty or personalty that is subject to the Lien of the First Mortgage Indenture but is not also subject to the Lien of the PSNH Mortgage and, prior to the transfer of such interest to NAEC on the Merger Effective Date, Liens on the undeveloped land adjacent to Seabrook wholly- owned by the Borrower and described as the "Adjacent Property" in Schedule D to the PSNH Mortgage; provided, however, that the aggregate principal amount of the Debt at any one time outstanding secured by purchase money Liens permitted by paragraph (m) of Schedule C to the PSNH Mortgage and the Seabrook Mortgage including Liens of a conditional vendor that are the functional equivalent of purchase money Liens, shall not exceed $20,000,000; and (v) Liens created or perfected under or in connection with the Pledge Agreement (as defined in each of the Series D Reimbursement Agreement and the Series E Reimbursement Agreement). (b) Debt. Create, incur or assume any Debt unless, after giving effect thereto, (i) no Event of Default or Unmatured Default shall have occurred and be continuing on the date of such creation, incurrence or assumption (determined, in the case of Section 7.01(j)(i) as though such Debt were created, incurred or assumed as of the first day of the immediately preceding fiscal quarter and using the Borrower's most recent annual actuarial determinations in the computation of Debt referred to in clause (ix) in the definition of "Debt") and (ii) the Borrower shall have determined that, on the basis of the assumptions and forecasts set forth in the most recent operating budget/forecast of operations delivered pursuant to Section 7.03(iv) hereof (which the Borrower continues to believe to be reasonable), the Borrower will continue to be in compliance at all times with the provisions of Section 7.01(j) hereof. The Borrower will furnish evidence of its compliance with this subsection (b) for each fiscal quarter pursuant to Section 7.03(ii) hereof. (c) Mergers, Etc. Merge with or into or consolidate with or into, or acquire all or substantially all of the assets of, any Person; provided that the Merger shall be permitted if, on the Merger Effective Date, the Lenders shall have received (i) a certificate signed by the Chief Financial Officer, Treasurer or Assistant Treasurer of the Borrower certifying that the Merger Pro-formas attached thereto were updated through the Merger Effective Date to reflect any changes in the Merger Pro-formas delivered to the Lenders pursuant to Section 5.01(a)(v) hereof and such pro- formas were prepared in good faith and on reasonable assumptions and (ii) true and complete copies of the Sharing Agreement, the Tax Allocation Agreement and the Unit Contract, in each case duly executed by the parties thereto together with (A) a certificate of a duly authorized officer of the 54 Borrower, reaffirming the representations and warranties set forth in Sections 6.01(b), (c) and (d) hereof in so far as they relate to the Sharing Agreement, the Tax Allocation Agreement and the Unit Contract, and (B) an opinion of Day, Berry & Howard as to the legality, validity, binding effect and enforceability of such agreements, in each case, in form and substance satisfactory to the Majority Lenders. (d) Sales, Etc., of Assets. Sell, lease, transfer or otherwise dispose of all or any substantial part of its assets (whether in a single transaction or series of transactions during any consecutive 12-month period) other than in the ordinary course of the Borrower's business in accordance with ordinary and customary terms and conditions and other than the Seabrook Transfer contemplated pursuant to the Merger as permitted under Section 7.02(c) hereof. For purposes of this subsection (d): (i) all sales, leases, transfers or dispositions of receivables of the Borrower to any unaffiliated third party, except for collection in the ordinary course of the Borrower's business of delinquent accounts, shall be deemed to be substantial and outside of the ordinary course of the Borrower's business; and (ii) any transaction or series of transactions during any consecutive 12-month period shall be deemed to involve a "substantial part" of the Borrower's assets if, in the aggregate, (A) the value of such assets equals or exceeds 10% of the total assets of the Borrower reflected in the financial statements of the Borrower delivered pursuant to Section 7.03(ii) or 7.03(iii) hereof in respect of the fiscal quarter or year ending on or immediately prior to the commencement of such 12-month period or (B) for the four calendar quarters ending on or immediately prior to commencement of such 12-month period, the gross revenue derived by the Borrower from such assets shall equal or exceed 10% of the total gross revenue of the Borrower. (e) Investments in Other Persons. Make any loan or advance to any Person or purchase or otherwise acquire any capital stock, obligations or other securities of, make any capital contribution to, or otherwise invest in, any Person other than Permitted Investments and loans, advances, purchases and investments listed on Schedule III hereto. (f) Restricted Payments. Declare or pay any dividend, or make any payment or other distribution of assets, properties, cash, rights, obligations or securities on account of any share of any class of capital stock of the Borrower (other than stock splits and dividends payable solely in equity securities of the Borrower), or purchase, redeem, retire, or otherwise acquire for value any shares of any class of capital stock of the Borrower or any warrants, rights, or options to acquire any such Debt or shares, now or hereafter outstanding, or make any distribution of assets to any of its shareholders (any such transaction being a "Restricted Payment") except for Restricted Payments made in compliance with the following conditions: 55 (i) The Borrower may not make any Restricted Payments if an Event of Default or Unmatured Default shall have occurred and be continuing. (ii) The Borrower may not make any Restricted Payments during any fiscal quarter if, after giving effect thereto (and to the other computations set forth below in this clause (ii)), the Borrower would not be in full compliance with Section 7.01(j) hereof. For purposes of determining compliance with said Section 7.01(j) under this clause (ii): (A) computations under Section 7.01(j)(i) shall be made as of the end of the fiscal quarter immediately preceding the current fiscal quarter in which such Restricted Payment is to be made; and (B) computations under Section 7.01(j)(ii) shall be made as of the date of such Restricted Payment, except that, retained earnings shall be determined as of the last day of the immediately preceding fiscal quarter (adjusted for all Restricted Payments made after the last day of such preceding fiscal quarter). (iii) The Borrower may not make any Restricted Payments unless, after giving effect thereto, the Borrower shall have determined that, on the basis of the assumptions and forecasts set forth in the most recent operating budget/forecast of operations delivered pursuant to Section 7.03(iv) hereof (which the Borrower continues to believe to be reasonable) the Borrower will continue to be in compliance at all times with the provisions of Section 7.01(j) hereof. (iv) On or prior to the second anniversary of the Funding Date, the Borrower may make no Restricted Payments except out of that portion of earned surplus accumulated after the Funding Date in excess of $75,000,000 (determined in accordance with generally accepted accounting principles and without giving effect to charges to earned surplus on account of Restricted Payments or on account of transfers from earned surplus to capital surplus or capital stock accounts). Notwithstanding anything contrary contained in this Section 7.02(f), the Borrower may (x) declare and pay regularly scheduled quarterly dividends on the Preferred Stock and declare and pay into escrow on, or within 30 days after, the Funding Date, with respect to the first two dividend periods following the Funding Date all or any part of the dividends scheduled to accrue during such periods if, immediately prior to and after giving effect to any such payment, no Event of Default or Unmatured Default relating to the payment of principal, interest or fees under this Agreement or the other Financing Agreement shall have occurred and be continuing, (y) declare and pay into escrow, prior to the date required to be paid to holders of Preferred Stock, with respect to the fifth and sixth dividend periods 56 following the Funding Date all or any part of the dividends scheduled to accrue during such periods, if, immediately prior to and after giving effect to any such payment, no Event of Default or Unmatured Default shall have occurred and be continuing and (z) make any payments on account of its common stock required to be made pursuant to the Merger Agreement in connection with consummation of the Merger in accordance with Section 7.02(c) hereof. (g) Compliance with ERISA. (i) Terminate, or permit any ERISA Affiliate to terminate, any ERISA Plan so as to result in any material (in the opinion of the Majority Lenders) liability of the Borrower to the PBGC, or (ii) permit to exist any occurrence of any Reportable Event (as defined in Title IV of ERISA), or any other event or condition, which presents a material (in the opinion of the Majority Lenders) risk of such a termination by the PBGC of any ERISA Plan and such a material liability to the Borrower. (h) Related Agreements. (i) Amendments. Amend, modify or supplement or give any consent, acceptance or approval to any amendment, modification or supplement or deviation by any party from the terms of, the Rate Agreement, the Merger Agreement or any Significant Contract, except, with respect only to the Merger Agreement and the Significant Contracts, any amendment, modification or supplement to such agreement that would not reduce the rights or entitlements of the Borrower thereunder in any material way. (ii) Termination. Cancel or terminate (or consent to any cancellation or termination of) the Rate Agreement, the Merger Agreement or any Significant Contract prior to the expiration of its stated term, provided that this subsection (ii) shall not restrict the rights of the Borrower to reject a request by NU to the Borrower to extend the Termination Date (as defined in the Merger Agreement) of the Merger Agreement pursuant to Section 10.3(b) of the Merger Agreement or to otherwise enforce any remedy against any obligor under the Merger Agreement or any Significant Contract in the event of a material breach or default by such obligor thereunder if and so long as the Borrower shall have provided to the Administrative Agent at least 30 days prior written notice of the enforcement action proposed to be undertaken by the Borrower. (i) Change in Nature of Business. Engage in any material business activity other than those established and engaged in on the date hereof or described in the Third Amended Disclosure Statement of NU, dated December 28, 1989 and filed with the Bankruptcy Court. (j) Ownership in Seabrook and Nuclear Plants. (i) acquire, directly or indirectly, any additional ownership interest in Seabrook, or any ownership interest or any additional ownership interest of any kind in any other nuclear-powered electric generating plant, except such additional ownership 57 interest in Seabrook (A) as may be acquired from the Vermont Electric Generation and Transmission Cooperative, Inc. or (B) as the Borrower may be required to acquire pursuant to the terms of the Joint Ownership Agreement, provided, however, that, prior to acquiring any such additional ownership interest in Seabrook referred to in clause (B), the Borrower shall deliver to the Administrative Agent a written opinion of counsel (in form and substance satisfactory to the Majority Lenders) to the effect that any such additional ownership interest will be included in the "Ownership Share" (as defined in the Unit Contract) and that any payments referred to in Section B.(E)(1) and (2) of Exhibit C to the Rate Agreement would reflect the Ownership Share as increased by such additional ownership interest; or (ii) amend, modify or supplement, or give any consent, acceptance or approval to any amendment, modification or supplementation to, the Joint Ownership Agreement which would (A) cause the Borrower to acquire any additional ownership interest in Seabrook, except as permitted under clause (i) above, or (B) increase the obligations of the Borrower thereunder without increasing ratably the obligations of the other parties thereto. (k) Subsidiaries. Create or suffer to exist any active subsidiaries other than Properties, Inc., a New Hampshire corporation; or permit any material assets or business to be maintained at or conducted by any subsidiary except for the assets owned by Properties, Inc. not exceeding $20,000,000. SECTION 03. Reporting Obligations. So long as any Note shall remain unpaid or any Lender shall have any Commitment hereunder, the Borrower will, unless the Majority Lenders shall otherwise consent in writing, furnish to the Administrative Agent in sufficient copies for each Lender, the following: (i) as soon as possible and in any event within five (5) days after the occurrence of each Event of Default or Unmatured Default continuing on the date of such statement, a statement of the Chief Financial Officer, Treasurer or Assistant Treasurer of the Borrower setting forth details of such Event of Default or Unmatured Default and the action which the Borrower proposes to take with respect thereto; (ii) as soon as available and in any event within fifty (50) days after the end of each of the first three quarters of each fiscal year of the Borrower, (A) if and so long as the Borrower is required to submit to the Securities and Exchange Commission a report on Form 10-Q, a copy of the Borrower's report on Form 10-Q submitted to the Securities and Exchange Commission with respect to such quarter and (B) if the Borrower 58 ceases to be required to submit such report, a balance sheet of the Borrower as of the end of such quarter and statements of income and retained earnings and of cash flows of the Borrower for the period commencing at the end of the previous fiscal year and ending with the end of such quarter, all in reasonable detail and duly certified (subject to year-end audit adjustments) by the Chief Financial Officer, Treasurer or Assistant Treasurer of the Borrower as having been prepared in accordance with generally accepted accounting principles consistent with those applied in the preparation of the financial statements referred to in Section 6.01(e) hereof, in each such case, delivered together with a certificate of said officer (1) stating that no Event of Default or Unmatured Default has occurred and is continuing or, if an Event of Default or Unmatured Default has occurred and is continuing, a statement as to the nature thereof and the action which the Borrower proposes to take with respect thereto and (2) (y) demonstrating compliance with Section 7.01(j) for and as of the end of such fiscal quarter and compliance with Sections 7.02(b) and (f), as of the dates on which any Debt was created, incurred or assumed (using the Borrower's most recent annual actuarial determinations in the computation of Debt referred to in clause (ix) in the definition of "Debt") or any Restricted Payment was made during such quarter, and (z) demonstrating, after giving effect to the incurrence of any Debt created, incurred or assumed during such fiscal quarter (using the Borrower's most recent annual actuarial determinations in the computation of Debt referred to in clause (ix) in the definition of "Debt") and after giving effect to any Restricted Payment made during such fiscal quarter, compliance with Section 7.01(j) for the remainder of the fiscal year of the Borrower based on the operating budget/forecast of operations delivered pursuant to Section 7.03(iv) hereof for such fiscal year, in each case, such demonstration to be in a schedule (in form satisfactory to the Majority Lenders) which sets forth the computations used by the Borrower in determining such compliance; (iii) as soon as available and in any event within 105 days after the end of each fiscal year of the Borrower, (A) if and so long as the Borrower is required to submit to the Securities and Exchange Commission a report on Form 10-K, a copy of the Borrower's report on Form 10-K submitted to the Securities and Exchange Commission with respect to such year and (B) if the Borrower ceases to be required to submit such report, a copy of the annual audit report for such year for the Borrower including therein a balance 59 sheet of the Borrower as of the end of such fiscal year and statements of income and retained earnings and of cash flows of the Borrower for such fiscal year, in each case certified by a nationally-recognized independent public accountant, in each such case delivered together with a certificate of the Chief Financial Officer, Treasurer or Assistant Treasurer (A) (1) stating that the financial statements were prepared in accordance with generally accepted accounting principles consistent with those applied in the preparation of financial statements referred to in Section 6.01(e) hereto, and (2) no Event of Default or Unmatured Default has occurred and is continuing, or if an Event of Default or Unmatured Default has occurred and is continuing, a statement as to the nature thereof and the action which the Borrower proposes to take with respect thereto and (B) demonstrating compliance with Section 7.01(j) for and as of the end of such fiscal year and compliance with Sections 7.02(b) and (f), as of the dates on which any Debt was created, incurred or assumed (using the Borrower's most recent annual actuarial determinations in the computation of Debt referred to in clause (ix) in the definition of "Debt") or any Restricted Payment was made during the last fiscal quarter of the Borrower, in each case, such demonstration to be in a schedule (in form satisfactory to the Majority Lenders) which sets forth the computations used by the Borrower in determining such compliance. (iv) as soon as available and in any event within (A) 60 days prior to the end of each fiscal year of the Borrower if prior to the Merger Effective Date or (B) March 31 of each fiscal year commencing on or after the Merger Effective Date, a copy of an operating budget/forecast of operations of the Borrower as approved by the Board of Directors of the Borrower in form satisfactory to the Lenders for the next fiscal year of the Borrower, together with a certificate of the Chief Financial Officer, Treasurer or Assistant Treasurer of the Borrower stating that such budget/forecast was prepared in good faith and on reasonable assumptions; (v) as soon as available and in any event no later than the New Hampshire Public Utilities Commission shall have received the Borrower's annual submission, if any, relating to the "return on equity collar" referred to in the Rate Agreement, a copy of such annual submission of the Borrower; (vi) as soon as possible and in any event (A) within 30 days after the Borrower knows or has 60 reason to know that any ERISA Plan Termination Event described in clause (i) of the definition of ERISA Plan Termination Event with respect to any ERISA Plan or ERISA Multiemployer Plan has occurred and (B) within 10 days after the Borrower knows or has reason to know that any other ERISA Plan Termination Event with respect to any ERISA Plan or ERISA Multiemployer Plan has occurred, a statement of the Chief Financial Officer, Treasurer or Assistant Treasurer of the Borrower describing such ERISA Plan Termination Event and the action, if any, which the Borrower proposes to take with respect thereto; (vii) promptly after receipt thereof by the Borrower or any of its ERISA Affiliates from the PBGC, copies of each notice received by the Borrower or any such ERISA Affiliate of the PBGC's intention to terminate any ERISA Plan or ERISA Multiemployer Plan or to have a trustee appointed to administer any ERISA Plan or ERISA Multiemployer Plan; (viii) promptly and in any event within 30 days after the filing thereof with the Internal Revenue Service, copies of each Schedule B (Actuarial Information) to the annual report (Form 5500 Series) with respect to each ERISA Plan (if any) to which the Borrower is a contributing employer; (ix) promptly after receipt thereof by the Borrower or any of its ERISA Affiliates from an ERISA Multiemployer Plan sponsor, a copy of each notice received by the Borrower or any of its ERISA Affiliates concerning the imposition or amount of withdrawal liability in an aggregate principal amount of at least $10,000,000 pursuant to Section 4202 of ERISA in respect of which the Borrower may be liable; (x) promptly after the Borrower becomes aware of the occurrence thereof, notice of all actions, suits, proceedings or other events (A) of the type described in Section 6.01(f), or (B) which purport to affect the legality, validity or enforceability of any of the Loan Documents or Significant Contracts; (xi) promptly after the sending or filing thereof, copies of all such proxy statements, financial statements, and reports which the Borrower sends to its public security holders (if any) or files with, and copies of all regular, periodic and special reports and all registration statements and periodic or special reports, if any, which the Borrower files with, the Securities and Exchange Commission or any governmental 61 authority which may be substituted therefor, or with any national securities exchange; (xii) promptly after receipt thereof, any assertion of the character described in Section 8.01(h) hereof and the action the Borrower proposes to take with respect thereto; (xiii) promptly after knowledge of any material default under the Rate Agreement, the Merger Agreement or any Significant Contract, notice of such default and the action the Borrower proposes to take with respect thereto; (xiv) promptly after knowledge of any amendment, modification, or other change to the Rate Agreement, Merger Agreement or any Significant Contract or to any Governmental Approval affecting the Rate Agreement, notice of such amendment, modification or other change, it being understood that for purposes of this clause (xiv) any filing by the Borrower in the ordinary course of the Borrower's business with, or order issued or action taken by, a governmental authority or regulatory body after the Plan Effective Date to implement the terms of the Rate Agreement shall not be considered an amendment, modification or change to a Governmental Approval affecting the Rate Agreement; and (xv) promptly after requested, such other information respecting the financial condition, operations, properties, prospects or otherwise, of the Borrower as the Administrative Agent or Majority Lenders may from time to time reasonably request in writing. ARTICLE VIII DEFAULTS SECTION 01. Events of Default. The following events shall each constitute an "Event of Default" if the same shall occur and be continuing after the grace period and notice requirement (if any) applicable thereto: (a) The Borrower shall fail to pay any principal of any Note or any fees when due or shall fail to pay any interest on any Note within two days after the same becomes due; (b) Any representation or warranty made by the Borrower or NU (or any of their officers or agents) in this Agreement, any other Loan Document, certificate or other writing delivered pursuant hereto or thereto shall prove to have been incorrect in any material respect when made or deemed made; or 62 (c) The Borrower shall fail to perform or observe any term or covenant on its part to be performed or observed contained in Sections 7.01(a), (d) or (j), Section 7.02 or Section 7.03(i) hereof; or (d) On and after the Funding Date, the Borrower shall fail to perform or observe any other term or covenant on its part to be performed or observed contained in this Agreement or any Loan Document and any such failure shall remain unremedied, after written notice thereof shall have been given to the Borrower by the Administrative Agent or any Lender, for a period of 30 days; or (e) On and after the Funding Date, the Borrower shall fail to pay any of its Debt when due (including any interest or premium thereon but excluding Debt evidenced by the Notes and excluding other Debt aggregating in no event more than $10,000,000 in principal amount at any one time) whether by scheduled maturity, required prepayment, acceleration, demand or otherwise, and such failure shall continue after the applicable grace period, if any, specified in any agreement or instrument relating to such Debt; or any other default under any agreement or instrument relating to any such Debt, or any other event, shall occur and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such default or event is to accelerate, or to permit the acceleration of, the maturity of such Debt; or any such Debt shall be declared to be due and payable, or required to be prepaid (other than by a regularly scheduled required prepayment or as a result of the Borrower's exercise of a prepayment option) prior to the stated maturity thereof; unless in each such case the obligee under or holder of such Debt or the trustee with respect to such Debt shall have waived in writing such circumstance without consideration having been paid by the Borrower so that such circumstance is no longer continuing; or (f) On and after the Funding Date, the Borrower shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall make an assignment for the benefit of creditors; or any proceeding shall be instituted by or against the Borrower seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of its debts under any law relating to bankruptcy, insolvency,or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, or other similar official for it or for any substantial part of its property and, in the case of a proceeding instituted against the Borrower, either the Borrower shall consent thereto or such proceeding shall remain undismissed or unstayed for a period of 90 days or any of the actions sought in such proceeding (including without limitation the entry of an order for relief against the Borrower or the appointment of a receiver, trustee, custodian or other similar official for the Borrower or any of its property) shall occur; or the Borrower shall take any corporate or other action to authorize any of the actions set forth above in this subsection (f); or (g) On and after the Funding Date, any judgment or order for the payment of money in excess of $10,000,000 shall be rendered against the Borrower or its properties and either (i) enforcement proceedings shall have been commenced by any creditor upon such judgment or order and shall not have been stayed or (ii) there shall be any period of 15 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or 63 (h) Any material provision of any Loan Document, the Rate Agreement or any Significant Contract, after execution hereof or delivery thereof under Article V and Section 7.02(c) hereof, shall for any reason other than the express terms thereof or the exercise of any right or option expressly contained therein cease to be valid and binding on any party thereto except as otherwise expressly permitted by the exceptions and provisos contained in Section 7.02(h) hereof; or any party thereto other than the Lenders shall so assert in writing, provided that in the case of any party other than the Borrower making such assertion in respect of the Rate Agreement or any Significant Contract, such assertion shall not in and of itself constitute an Event of Default hereunder until (i) such asserting party shall cease to perform under and in compliance with the Rate Agreement or such Significant Contract, (ii) the Borrower shall fail to diligently prosecute, by appropriate action or proceedings, a rescission of such assertion or a binding determination as to the merits thereof or (iii) such a binding determination shall have been made in favor of such asserting party's position; or (i) The Security Documents after delivery under Article V hereof shall for any reason, except to the extent permitted by the terms thereof, fail or cease to create valid and perfected Liens (to the extent purported to be granted by such documents and subject to the exceptions permitted thereunder) in any of the Collateral, provided, that such failure or cessation relating to any non-material portion of such Collateral shall not constitute an Event of Default hereunder unless the same shall not have been corrected within 30 days after the Borrower becomes aware thereof; or (j) The Borrower shall not have in full force and effect any or all insurance required under Section 7.01(c) hereof or there shall be incurred any uninsured damage, loss or destruction of or to the Borrower's properties in an amount not covered by insurance (including fully- funded self-insurance programs) which the Majority Lenders consider to be material; or (k) A default by the Borrower shall have occurred under the Rate Agreement and shall not have been effectively cured within the time period specified therein for such cure (or, if no such time period is specified therein, 10 days); or, a default by the Borrower shall have occurred under the Merger Agreement, or a default by any party shall have occurred under any Significant Contract and, in either such case, such default shall not have been effectively cured within 30 days after notice from the Administrative Agent to the Borrower stating that, in the opinion of the Majority Lenders, such default may have a material adverse effect upon the financial condition, operations, properties or prospects of the Borrower as a whole; or (l) Any Governmental Approval (whether federal, state or local) required to give effect to the Rate Agreement (including, without limitation, Chapter 362-C of the New Hampshire Revised Statutes and the enabling order of The New Hampshire Public Utilities Commission issued pursuant thereto) shall be amended, modified or supplemented, or any other regulatory or legislative action or change (whether federal, state or local) having the effect, directly or indirectly, of modifying the benefits or entitlements of the Borrower under the Rate Agreement shall occur, and in any such case such amendment, modification, supplement, action or change may have, in the opinion of the Majority Lenders, a material adverse effect upon 64 the financial condition, operations, properties or prospects of the Borrower as a whole; or (m) On and after the Merger Effective Date, NU shall cease to own all of the outstanding common stock of the Borrower, free and clear of any Liens. SECTION 02. Remedies Upon Events of Default. Upon the occurrence and during the continuance of any Event of Default, then, and in any such event, the Administrative Agent shall at the request, or may with the consent, of the Majority Lenders, upon notice to the Borrower (i) declare the Commitments and the obligation of each Lender to make Advances to be terminated, provided, that any such request or consent shall be made solely by the Lenders having Percentages in the aggregate of not less 66-2/3%, whereupon the same shall forthwith terminate, (ii) declare the Notes, all interest thereon and all other amounts payable under this Agreement and the Security Documents to be forthwith due and payable, provided, that any such request or consent shall be made solely by the Lenders holding at least 66-2/3% of the then aggregate unpaid principal amount of the Advances owing to the Lenders, whereupon the Notes, all such interest and all such amounts shall become and be forthwith due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Borrower, and (iii) exercise in respect of any and all collateral, in addition to the other rights and remedies provided for herein and in the Security Documents or otherwise available to the Administrative Agent, the Collateral Agent or the Lenders, all the rights and remedies of a secured party on default under the Uniform Commercial Code in effect in the State of New York and in effect in any other jurisdiction in which Collateral is located at that time; provided, however, that in the event of an actual or deemed entry of an order for relief with respect to the Borrower under the Federal Bankruptcy Code, (A) the Commitments and the obligation of each Lender to make Advances shall automatically be terminated and (B) the Notes, all such interest and all such amounts shall automatically become and be due and payable, without presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by the Borrower. ARTICLE IX THE ADMINISTRATIVE AGENT SECTION 01. Authorization and Action. Each Lender hereby (i) appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers under this Agreement as are delegated to the Administrative Agent by the terms hereof, together with such powers as are reasonably incidental thereto and (ii) agrees that, except as otherwise expressly provided herein, Bankers Trust, Chemical and Citibank, as Co-Agents, shall have no duties or obligations hereunder. As to any matters not expressly provided for by any Loan Document (including, without limitation, enforcement or collection thereof), the Administrative Agent shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Majority Lenders, and such instructions shall be binding upon all Lenders; provided, however, that the Administrative Agent shall not be required to take any action which exposes the Administrative Agent to personal liability or which is contrary to this Agreement or applicable law. The Administrative Agent agrees to deliver promptly to each Lender notice of 65 each notice given to it by the Borrower pursuant to the terms of this Agreement. SECTION 02. Administrative Agent's Reliance, Etc.. Neither the Administrative Agent nor any of its directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by it or them under or in connection with any Loan Document, except for its or their own gross negligence or wilful misconduct. Without limitation of the generality of the foregoing, the Administrative Agent: (i) may treat the payee of any Note as the holder thereof until the Administrative Agent receives and accepts a Lender Assignment entered into by the Lender which is the payee of such Note, as assignor, and an assignee, as provided in Section 10.07; (ii) may consult with legal counsel (including counsel for the Borrower), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (iii) makes no warranty or representation to any Lender and shall not be responsible to any Lender for the Information Memorandum or any other statements, warranties or representations made in or in connection with any Loan Document; (iv) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of any Loan Document on the part of the Borrower to be performed or observed, or to inspect any property (including the books and records) of the Borrower; (v) shall not be responsible to any Lender for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of any Loan Document, Significant Contract or any other instrument or document furnished pursuant hereto; and (vi) shall incur no liability under or in respect of any Loan Document by acting upon any notice, consent, certificate or other instrument or writing (which may be by telegram, cable or telex) believed by it to be genuine and signed or sent by the proper party or parties. SECTION 03. Bankers Trust, Chemical, Citibank and Affiliates. With respect to its Commitment and the Note issued to it, each of Bankers Trust, Chemical and Citibank shall have the same rights and powers under this Agreement as any other Lender and may exercise the same as though it were not the Administrative Agent or a Co-Agent, as the case may be, and the term "Lender" or "Lenders" shall, unless otherwise expressly indicated, include Bankers Trust, Chemical and Citibank each in its individual capacity. Bankers Trust, Chemical and Citibank and their respective Affiliates may accept deposits from, lend money to, act as trustee under indentures of, and generally engage in any kind of business with, the Borrower, any of its subsidiaries and any Person who may do business with or own securities of the Borrower or any such subsidiary, all as if Bankers Trust, Chemical and Citibank were not the Administrative Agent or a Co-Agent, as the case may be, and without any duty to account therefor to the Lenders. SECTION 04. Lender Credit Decision. Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent, the Co-Agents or any other Lender and based on the Information Memorandum and other financial information referred to in Section 6.01(e) and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement, including, without limitation, in the case of the Lenders, with respect to the determination as to whether to classify the transactions evidenced by the Loan Documents as an "HLT" (as defined in Banking Circular BC-242, issued by the Comptroller of the Currency on October 30, 1989, as supplemented from time to time). Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent, the Co- 66 Agents or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement. In that regard, the Lenders, the Co-Agents and the Administrative Agent acknowledge that none of them has classified the transactions evidenced by the Loan Documents as an "HLT", and agree with each other that, in the event that any of them shall subsequently determine to classify such transactions as an "HLT", it will provide notice to such effect to the other Lenders and the Administrative Agent, as applicable, prior to or promptly following effecting such classification. SECTION 05. Indemnification. The Lenders agree to indemnify the Co-Agents and the Administrative Agent (to the extent not reimbursed by the Borrower), ratably according to the respective principal amounts of the Notes then held by each of them (or if no Notes are at the time outstanding or if any Notes are held by Persons which are not Lenders, ratably according to the respective Commitments of the Lenders), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against the Administrative Agent or the Co-Agents in any way relating to or arising out of this Agreement or any action taken or omitted by the Administrative Agent or the Co-Agents under this Agreement, provided that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the Administrative Agent's or any Co-Agent's gross negligence or willful misconduct. Without limitation of the foregoing, each Lender agrees to reimburse the Administrative Agent and the Co-Agents promptly upon demand for its ratable share of any out-of-pocket expenses (including counsel fees) incurred by the Administrative Agent and the Co-Agents in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement to the extent that the Administrative Agent and the Co- Agents are entitled to reimbursement for such expenses pursuant to Section 10.04 but is not reimbursed for such expenses by the Borrower. SECTION 06. Successor Administrative Agent. The Administrative Agent may resign at any time by giving written notice thereof to the Lenders and the Borrower, with any such resignation to become effective only upon the appointment of a successor Administrative Agent pursuant to this Section 9.06. Upon any such resignation, the Majority Lenders shall have the right to appoint a successor Administrative Agent, which shall be a Co-Agent (unless each Co-Agent shall decline such appointment, in which case such successor Administrative Agent shall be a Lender or another commercial bank or trust company reasonably acceptable to the Borrower organized or licensed under the laws of the United States, or of any State thereof). If no successor Administrative Agent shall have been so appointed by the Majority Lenders, and shall have accepted such appointment, within 30 days after the retiring Administrative Agent's giving of notice of resignation, then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent, which shall be a Co-Agent (unless each Co-Agent shall decline such appointment, in which case such successor Administrative Agent shall be a Lender or shall be another commercial bank or trust company organized or licensed under the laws of the United States or of any State thereof reasonably acceptable to the Borrower). In addition to the foregoing right of the Administrative Agent to resign, the Majority Lenders may remove the Administrative Agent at any time, with or 67 without cause, concurrently with the appointment by the Majority Lenders of a Co-Agent as the successor Administrative Agent. Upon the acceptance of any appointment as Administrative Agent hereunder by a successor Administrative Agent and the execution and delivery by the Borrower and the successor Administrative Agent of an agreement relating to the fees to be paid to the successor Administrative Agent under Section 2.02(b) hereof in connection with its acting as Administrative Agent hereunder, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations under this Agreement. After any retiring Administrative Agent's resignation or removal hereunder as Administrative Agent, the provisions of this Article IX shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement. ARTICLE X MISCELLANEOUS SECTION 01. Amendments, Etc. No amendment or waiver of any provision of this Agreement, any Note or any Security Document, nor consent to any departure by the Borrower therefrom, shall in any event be effective unless the same shall be in writing and signed by the Majority Lenders, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no amendment, waiver or consent shall, unless in writing and signed by all the Lenders, do any of the following: (a) waive, modify or eliminate any of the conditions specified in Article V, (b) increase the Commitments of the Lenders that may be maintained hereunder or subject the Lenders to any additional obligations, (c) reduce the principal of, or interest on, the Notes, any Applicable Contract Margin or any fees or other amounts payable hereunder, (d) postpone any date fixed for any payment of principal of, or interest on, the Notes or any fees or other amounts payable hereunder (other than fees payable to the Administrative Agent pursuant to Section 2.02(b) hereof), (e) change the percentage of the Commitments or of the aggregate unpaid principal amount of the Notes, or the number of Lenders which shall be required for the Lenders or any of them to take any action hereunder, (f) amend this Agreement, any Note or any Security Document in a manner intended to prefer one or more Lenders over any other Lenders, (g) amend this Section 10.01, or (h) release all or substantially all of the Collateral otherwise than in accordance with the provisions for such release contained in the Security Documents, or change any provision of any Security Document providing for the release of all or substantially all of the Collateral; and provided, further, that no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above to take such action, affect the rights or duties of the Administrative Agent under this Agreement or any Note. SECTION 02. Notices, Etc. Except as otherwise provided in Section 3.04 hereof, all notices and other communications provided for hereunder and under the other Loan Documents shall be in writing (including telegraphic, telex, telecopy or cable communication) and mailed, telegraphed, telexed, telecopied, cabled or delivered, (i) if to the Borrower, at its address at 1000 Elm Street, Manchester, New Hampshire 03105 (telecopy no. 603.669.2438), Attention: Treasurer, with a copy to NUSCO at its address at 107 Selden Street, Berlin, Connecticut 06037 (telecopy no. 68 203.665.5457), Attention: Assistant Treasurer; (ii) if to any Bank, at its Domestic Lending Office specified opposite its name on Schedule I hereto; (iii) if to any Lender other than a Bank, at its Domestic Lending Office specified in the Lender Assignment pursuant to which it became a Lender; and (iv) if to the Administrative Agent, at its address at 277 Park Avenue, New York, New York 10172, Attention: C.J.E. Feeley: Utilities Group; or, as to each party, at such other address as shall be designated by such party in a written notice to the other parties. All such notices and communications shall, when mailed, telegraphed, telexed, telecopied or cabled, be effective five days after when deposited in the mails, or when delivered to the telegraph company, confirmed by telex answerback, telecopied or delivered to the cable company, respectively, except that notices and communications to the Administrative Agent pursuant to Article II, III, IV or IX shall not be effective until received by the Administrative Agent. With respect to any telephone notice given or received by the Administrative Agent pursuant to Section 3.04 hereof, the records of the Administrative Agent shall be conclusive for all purposes. SECTION 03. No Waiver of Remedies. No failure on the part of any Lender or the Administrative Agent to exercise, and no delay in exercising, any right hereunder or under any Note shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law. SECTION 04. Costs, Expenses and Indemnification. (a) The Borrower agrees to pay on demand all costs and expenses, if any (including, without limitation, reasonable counsel fees and expenses), of (i) the Administrative Agent and each Co-Agent in connection with the preparation, negotiation, execution and delivery of the Loan Documents and the administration of the Loan Documents, the care and custody of any and all collateral, and any proposed modification, amendment, or consent relating thereto; and (ii) the Administrative Agent, each Co-Agent and each Lender in connection with the enforcement (whether through negotiations, legal proceedings or otherwise) of this Agreement, the Notes or any other Loan Document. (b) The Borrower hereby agrees to indemnify and hold each Lender, each Co-Agent, the Administrative Agent and their respective officers, directors, employees, professional advisors and affiliates (each, an "Indemnified Person") harmless from and against any and all claims, damages, losses, liabilities, costs or expenses (including reasonable attorney's fees and expenses, whether or not such Indemnified Person is named as a party to any proceeding or investigation or is otherwise subjected to judicial or legal process arising from any such proceeding or investigation) which any of them may incur or which may be claimed against any of them by any person or entity (except to the extent such claims, damages, losses, liabilities, costs or expenses arise from the gross negligence or willful misconduct of the Indemnified Person): (i) by reason of or in connection with the execution, delivery or performance of any of the Loan Documents or any transaction contemplated thereby, or the use by the Borrower of the proceeds of any Advance; 69 (ii) in connection with or resulting from the utilization, storage, disposal, treatment, generation, transportation, release or ownership of any Hazardous Substance (A) at, upon or under any property of the Borrower or any of its Affiliates or (B) by or on behalf of the Borrower or any of its Affiliates at any time and in any place; or (iii) in connection with any documentary taxes, assessments or charges made by any governmental authority by reason of the execution and delivery of any of the Loan Documents. (c) The Borrower's obligations under this Section 10.04 shall survive the assignment by any Lender pursuant to Section 10.07 and shall survive as well the repayment of all amounts owing to the Lenders, the Co-Agents and the Administrative Agent under the Loan Documents and the termination of the Commitments. If and to the extent that the obligations of the Borrower under this Section 10.04 are unenforceable for any reason, the Borrower agrees to make the maximum contribution to the payment and satisfaction thereof which is permissible under applicable law. SECTION 05. Right of Set-off. (a) Upon (i) the occurrence and during the continuance of any Event of Default and (ii) the making of the request or the granting of the consent specified by Section 8.02 to authorize the Administrative Agent to declare the Notes due and payable pursuant to the provisions of Section 8.02, each Lender is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Lender to or for the credit or the account of the Borrower against any and all of the obligations of the Borrower now or hereafter existing under this Agreement and the Note held by such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement or such Note and although such obligations may be unmatured. Each Lender agrees promptly to notify the Borrower after any such set-off and application made by such Lender, provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of each Lender under this Section are in addition to other rights and remedies (including, without limitation, other rights of set-off) which such Lender may have. (b) The Borrower agrees that it shall have no right of off-set, deduction or counterclaim in respect of its obligations hereunder, and that the obligations of the Lenders hereunder are several and not joint. Nothing contained herein shall constitute a relinquishment or waiver of the Borrower's rights to any independent claim that the Borrower may have against the Administrative Agent or any Lender, but no Lender shall be liable for the conduct of the Administrative Agent or any other Lender, and the Administrative Agent shall not be liable for the conduct of any Lender. SECTION 06. Binding Effect. This Agreement shall become effective when it shall have been executed by the Borrower and the Administrative Agent and when the Administrative Agent shall have been notified by each Bank that such Bank has executed it and thereafter shall be binding upon and inure to the benefit of the Borrower, the Administrative Agent and each Lender and their respective successors and assigns, except 70 that the Borrower shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of the Lenders. SECTION 07. Assignments and Participation. (a) Each Lender may assign to one or more banks or other entities all or a portion of its rights and obligations under this Agreement, the Notes and the Security Documents (including, without limitation, all or a portion of its Commitment, the Advances owing to it and the Note or Notes held by it) with the prior written consent of the Borrower to the extent the assignee thereunder is not then a Lender or an Affiliate of a Lender (which consent shall not be unreasonably withheld); provided, however, that (i) each such assignment shall be of a constant, and not a varying, percentage of all of the assigning Lender's rights and obligations under this Agreement, (ii) to the extent the assignee thereunder is not then a Lender or an Affiliate of a Lender, the amount of the Commitment or Note of the assigning Lender being assigned pursuant to each such assignment (determined as of the date of the Lender Assignment with respect to such assignment) shall in no event be less than the lesser of the amount of such Lender's Commitment and $3,000,000, and (iii) the parties to each such assignment shall execute and deliver to the Administrative Agent, for its acceptance and recording in the Register, a Lender Assignment, together with any Note or Notes subject to such assignment and a processing and recordation fee of $2,000. Upon such execution, delivery, acceptance and recording, from and after the effective date specified in each Lender Assignment, which effective date shall be at least five Business Days after the execution thereof, (x) the assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Lender Assignment, have the rights and obligations of a Lender hereunder and (y) the Lender assignor thereunder shall, to the extent that rights and obligations hereunder have been assigned by it to an assignee pursuant to such Lender Assignment, relinquish its rights and be released from its obligations under this Agreement (and, in the case of a Lender Assignment covering all or the remaining portion of an assigning Lender's rights and obligations under this Agreement, such Lender shall cease to be a party hereto); provided, however, if an Event of Default shall have occurred and be continuing and the Administrative Agent shall have declared all Advances to be immediately due and payable hereunder a Lender may assign all or a portion of its rights and obligations without the prior written consent of the Borrower but otherwise in accordance with this Section. (b) By executing and delivering a Lender Assignment, the Lender assignor thereunder and the assignee thereunder confirm to and agree with each other and the other parties hereto as follows: (i) other than as provided in such Lender Assignment, such assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with any Loan Document or the execution, legality, validity, enforceability, genuineness, sufficiency or value of any Loan Document or any other instrument or document furnished pursuant thereto; (ii) such assigning Lender makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Borrower or the performance or observance by the Borrower of any of its obligations under any Loan Document or any other instrument or document furnished pursuant thereto; (iii) such assignee confirms that it has received a copy of each Loan Document, together with copies of the financial statements referred to in Section 6.01(e) and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Lender Assignment; (iv) such assignee will, independently and without reliance upon the 71 EX-99 3 EXHIBIT B.2 EXHIBIT B.2 FIRST AMENDMENT TO THE REVOLVING CREDIT AGREEMENT Dated as of May __, 1994 This FIRST AMENDMENT is made by and among PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE, a New Hampshire corporation (the Borrower ); the banks listed on the signature page of this Amendment (together with their respective permitted assignees from time to time, the Lenders ); BANKERS TRUST COMPANY, CHEMICAL BANK and CITIBANK, N.A., as agents for the Lenders (the Agents ) and CHEMICAL BANK as administrative agent for the Lenders (the Administrative Agent ). PRELIMINARY STATEMENTS: (1)The Borrower, the Agents, the Lenders and the Administrative Agent have entered into a Revolving Credit Agreement, dated as of May 1, 1991 in the amount of U.S.$200,000,000 (the Revolving Credit Agreement ). Capitalized terms used but not defined herein shall have the meanings assigned such terms in the Revolving Credit Agreement. (2)The Borrower has requested that the Lenders (i) extend the Termination Date from May 14, 1994 to May 14, 1996, and (ii) amend the Revolving Credit Agreement to reflect such extension. (3)The Lenders, on the terms and conditions hereinafter set forth, are willing to grant the requests of the Borrower. NOW, THEREFORE, in consideration of the premises and in order to induce the Lenders to extend the Termination Date and amend the Revolving Credit Agreement, the parties hereto agree as follows: SECTION 1. Amendments to Credit Agreement. The Revolving Credit Agreement is, effective as of the date hereof and subject to the satisfaction of the conditions precedent set forth in Section 3 hereof, hereby amended as follows: (a) The defined term Termination Date contained in Section 1.01 is amended in full to read as follows: Termination Date means the earlier to occur of (i) May 14, 1996, (ii) the date of termination or reduction in whole of the Commitments pursuant to Section 2.03 or 8.02, or (iii) the date of acceleration of all amounts payable hereunder and under the Notes pursuant to Section 8.02. (b) Section 7.01(j) is amended in full to read as follows: (i) Operating Income to Interest Expense. Maintain, for each period of four consecutive fiscal quarters ending on the dates set forth below, a ratio of Operating Income to Interest Expense not less than the respective ratio specified below: Period of Four Fiscal Quarters Ending on the Following Dates: Ratio June 30, 1992 1.30:1 September 30, 1992 1.30:1 December 31, 1992 1.40:1 March 31, 19931.40:1 June 30, 1993 1.40:1 September 30, 1993 1.40:1 December 31, 1993 1.50:1 March 31, 19941.50:1 June 30, 1994 1.50:1 September 30, 1994 1.50:1 December 31, 1994 1.75:1 March 31, 19951.75:1 June 30, 1995 1.75:1 September 30, 1995 1.75:1 December 31, 1995 1.75:1 Termination Date1.75:1 (ii) Common Equity to Total Capitalization. Maintain at all times a ratio of Common Equity to Total Capitalization of not less than the respective ratio specified below: Period Ratio Funding Date through and including June 30, 1993 0.20:1 July 1, 1993 through and including June 30, 1994 0.21:1 July 1, 1994 through and including June 30, 1995 0.23:1 July 1, 1995 through and including the Termination Date 0.25:1 SECTION 2. Conditions of Effectiveness. This Amendment shall become effective when, and only when, the Administrative Agent, the Agents and each Lender party to this Amendment shall have received counterparts of this Amendment executed by the Borrower, and Section 1 of this Amendment shall become effective when, and only when, the Administrative Agent, the Agents and each Lender additionally shall have received all of the following documents, each (unless otherwise indicated) being dated the date of receipt thereof by the Lenders (which date shall be the same for all such documents), in form and substance satisfactory to the Lenders: (a) The Administrative Agent shall have received the following, each dated the date of delivery thereof (unless otherwise specified below), in form and substance satisfactory to each Lender and in sufficient copies for each Lender: (i) Certified copies of the resolutions of the Board of Directors of the Borrower approving, if and to the extent necessary, this Amendment to be delivered by the Borrower hereunder, and of all documents evidencing other necessary corporate action, if any, with respect to the execution, delivery and performance by the Borrower of this Amendment. (ii) A certificate of the Secretary of the Borrower certifying (A) the names and true signatures of the officers of the Borrower authorized to sign this Amendment to be delivered hereunder and (B) that attached thereto are true and correct copies of the Articles of Incorporation of the Borrower, and all amendments thereto, and the Bylaws of the Borrower, in each case as in effect on such date. (iii) Such other approvals, opinions and documents as any Lender, through the Administrative Agent, may reasonably request as to the legality, validity, binding effect or enforceability of this Amendment. [(b) Receipt of an extension fee referred to in that certain Letter, dated May ___, 1994, by and among the Administrative Agent, the Agents and the Borrower.] (c) A favorable opinion of [Pierre O. Caron,] Assistant General Counsel to the Borrower. (d) A favorable opinion of Day, Berry and Howard, counsel to the Borrower. (e) A favorable opinion of Drummond Woodsum Plimpton & MacMahon, as Maine counsel to the Borrower. (f) A favorable opinion of Zuccaro, Willis & Bent, as Vermont counsel to the Borrower. SECTION 3. Representations and Warranties of the Borrower. The Borrower represents and warrants as follows: (a)The execution, delivery and performance by the Borrower of this Amendment are within the Borrower's corporate powers, have been duly authorized by all necessary corporate action and do not contravene (i) the Borrower's charter or by-laws, (ii) law or (iii) any contractual restriction binding on or affecting the Borrower, and do not result in or require the creation of any Lien upon or with respect to any of its properties. (b) No authorization, approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the due execution, delivery and performance by the Borrower of this Amendment, except for the Government Approvals that have been obtained or will be obtained in due course. (c) This Amendment and the Revolving Credit Agreement, as amended by this Amendment, constitute the legal, valid and binding obligations of the Borrower, enforceable against the Borrower in accordance with their respective terms, subject to ^@ the effect of applicable bankruptcy, insolvency, reorganization or moratorium or other similar laws affecting the enforcement of creditors' rights generally, and ^@ the application of general principles of equity (regardless of whether considered in a proceeding in equity or at law). (d)The audited balance sheet of the Borrower and its Consolidated Subsidiaries as at December 31, 1993, and the related statements of income, retained earnings and cash flows of the Borrower and its Consolidated Subsidiaries for the fiscal year then ended, (a copy of which has been furnished to the Lenders), fairly present (subject to year-end adjustments) the financial condition of the Borrower and its Consolidated Subsidiaries as at such date and the results of operations of the Borrower and its Consolidated Subsidiaries for the year ended on such date, all in accordance with GAAP. (e) Except as described in the Borrower's reports filed with the Securities and Exchange Commission, there is no pending or threatened action or proceeding against the Borrower or any of its Consolidated Subsidiaries before any court, governmental agency or arbitrator, which might reasonably be expected to materially adversely affect the ability of the Borrower to perform its obligations under this Amendment or the Revolving Credit Agreement, as amended by this Amendment. SECTION 4. Reference to and Effect on the Revolving Credit Agreement. (a) Upon the effectiveness of Section 1 hereof, on and after the date hereof each reference in the Revolving Credit Agreement to this Agreement , hereunder , hereof or words of like import referring to the Revolving Credit Agreement, and each reference in the other Loan Documents to the Credit Agreement , thereunder , thereof or words of like import referring to the Revolving Credit Agreement, shall mean and be a reference to the Revolving Credit Agreement as amended hereby. (b)Except as specifically amended above, the Revolving Credit Agreement shall continue to be in full force and effect and is hereby in all respects ratified and confirmed. Without limiting the generality of the foregoing, the Loan Documents and all of the Collateral described therein do and shall continue to secure the payment of all obligations of the Borrower under the Revolving Credit Agreement as amended hereby. (c)The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of the Lenders, Administrative Agent or Collateral Agent under the Revolving Credit Agreement or Loan Documents, nor constitute a waiver of any provision of the Revolving Credit Agreement or Loan Documents. SECTION 5. Costs, Expenses and Taxes. The Borrower agrees to pay on demand all costs and expenses of the Administrative Agent in connection with the preparation, execution and delivery of this Amendment and the other instruments and documents to be delivered hereunder, including, without limitation, the reasonable fees and out-of-pocket expenses of King & Spalding, counsel for the Administrative Agent with respect thereto and with respect to advising the Lenders as to their rights and responsibilities hereunder and thereunder. In addition, the Borrower shall pay any and all stamp and other taxes payable or determined to be payable in connection with the execution and delivery of this Amendment and the other instruments and documents to be delivered hereunder, and agrees to save the Administrative Agent and the Lenders harmless from and against any and all liabilities with respect to or resulting from any delay in paying or omission to pay such taxes. SECTION 6. Execution in Counterparts. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute but one and the same instrument. SECTION 7. Governing Law. This Amendment shall be governed by, and construed in accordance with, the laws of the State of the New York. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written. PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE, as Borrower By:________________________________ Name: Title: CHEMICAL BANK, as Administrative Agent By:________________________________ Name: Title: BANKERS TRUST COMPANY, as Agent By:________________________________ Name: Title: CHEMICAL BANK, as Agent By:________________________________ Name: Title: THIS IS A SIGNATURE PAGE TO THE FIRST AMENDMENT TO THE REVOLVING CREDIT AGREEMENT OF PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND IS EXECUTED BY THE PARTIES NAMED ABOVE. CITIBANK, N.A., as Agent By:________________________________ Name: Title: BANK OF AMERICA NT&SA By:________________________________ Name: Title: THE BANK OF CALIFORNIA, N.A. By:________________________________ Name: Title: BANKERS TRUST COMPANY By:________________________________ Name: Title: THIS IS A SIGNATURE PAGE TO THE FIRST AMENDMENT TO THE REVOLVING CREDIT AGREEMENT OF PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND IS EXECUTED BY THE PARTIES NAMED ABOVE. BARCLAYS BANK PLC By:________________________________ Name: Title: CIBC INC. By:________________________________ Name: Title: CHEMICAL BANK By:________________________________ Name: Title: CITIBANK, N.A. By:________________________________ Name: Title: CONTINENTAL BANK, N.A. By:________________________________ Name: Title: THIS IS A SIGNATURE PAGE TO THE FIRST AMENDMENT TO THE REVOLVING CREDIT AGREEMENT OF PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND IS EXECUTED BY THE PARTIES NAMED ABOVE. THE FIRST NATIONAL BANK OF BOSTON By:________________________________ Name: Title: THE FIRST NATIONAL BANK OF CHICAGO By:________________________________ Name: Title: THE FUJI BANK, LIMITED By:________________________________ Name: Title: LTCB TRUST COMPANY By:________________________________ Name: Title: MELLON BANK, N.A. By:________________________________ Name: Title: THIS IS A SIGNATURE PAGE TO THE FIRST AMENDMENT TO THE REVOLVING CREDIT AGREEMENT OF PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND IS EXECUTED BY THE PARTIES NAMED ABOVE. MITSUI TRUST BANK (USA) By:________________________________ Name: Title: NATIONAL WESTMINSTER BANK, PLC NEW YORK BRANCH By:________________________________ Name: Title: NATIONAL WESTMINSTER BANK, PLC NASSAU BRANCH By:________________________________ Name: Title: THE NIPPON CREDIT BANK, LTD. By:________________________________ Name: Title: SHAWMUT BANK CONNECTICUT, N.A. By:________________________________ Name: Title: THIS IS A SIGNATURE PAGE TO THE FIRST AMENDMENT TO THE REVOLVING CREDIT AGREEMENT OF PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND IS EXECUTED BY THE PARTIES NAMED ABOVE. SWISS BANK CORPORATION NEW YORK BRANCH By:________________________________ Name: Title: TOKAI BANK, LIMITED, NEW YORK BRANCH By:________________________________ Name: Title: TORONTO-DOMINION (NEW YORK), INC. By:________________________________ Name: Title: UNION BANK By:________________________________ Name: Title: YASUDA TRUST AND BANKING CO., LTD. NEW YORK BRANCH By:________________________________ Name: Title: THIS A SIGNATURE PAGE TO THE FIRST AMENDMENT TO THE REVOLVING CREDIT AGREEMENT OF PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND IS EXECUTED BY THE PARTIES NAMED ABOVE. EX-99 4 EXHIBIT D.1 EXHIBIT D.1 March 8, 1994 VIA HAND DELIVERY Ms. Debra Howland Assistant Secretary State of New Hampshire Public Utilities Commission 8 Old Suncook Road Concord, New Hampshire 03301 RE: Extension of Revolving Credit Agreement Dear Ms. Howland: On behalf of Public Service Company of New Hampshire ("PSNH"), I hereby request that the New Hampshire Public Utilities Commission approve, pursuant to RSA 369:1, RSA 369:2 and RSA 369:4, the extension of the Revolving Credit Agreement and associated second mortgage from its current expiration date of May 14, 1994 to May 14, 1996. As detailed in the enclosed affidavit of David R. McHale, Manager of Project and Short Term Finance of Northeast Utilities Service Company, the proposed extension will occur pursuant to substantially the same terms and conditions of the existing Revolving Credit Agreement and associated second mortgage, which was approved by the Commission in DR 89-244. The operating income to expense ratio and common equity to total capitalization ratio requirements included in the Revolver will be extended for the period May 14, 1994 through May 14, 1996, and will conform to the corresponding requirements in the Term Credit Agreement, which were approved by the Commission in DR 89-244. An extension fee of no more than 15 basis points, or $187,500 will be charged, and the facility fee may be increased from 25 basis points per annum to a maximum of 37.5 basis points per annum, or an increase of not more than $156,250 per year. The terms of the proposed extension are as favorable to PSNH as any PSNH could expect to receive for a new revolving credit facility, and will result in a significant transaction cost savings because PSNH will not need to negotiate and draft entirely new documents. Consequently, PSNH submits that the proposed extension is consistent with the public good and should be approved by the Commission. Accordingly, PSNH requests that the Commission determine under RSA 369:1, RSA 369:2 and RSA 369:4 that the extension of the Revolving Credit Agreement pursuant to the terms and conditions set forth in Mr. McHale's affidavit are consistent with the public good and are approved. Because the proposed extension is substantially in accordance with the terms and conditions of the Revolving Credit Agreement and Term Credit Agreement approved by the Commission and does not otherwise materially alter PSNH's obligations, PSNH submits that no hearing or investigation of facts other than those contained in the attached affidavit is required. Accordingly, PSNH requests that the Commission consider issuing the requested approval in an Order NISI to expedite approval of the extension. If the Order NISI process is not deemed appropriate for some reason, PSNH requests that the Commission promptly issue an Order of Notice and establish a procedural schedule which would enable PSNH to close the proposed transaction by April 29, 1994. If you have any questions regarding this filing, or need any more information, please let me know. I can be reached directly at 634-2326. I will be on vacation March 9, 1994 through March 22, 1994. Any questions you may have during my absence should be referred to Jerry Eaton, at 634-2961. Very truly yours, Catherine E. Shively Senior Counsel Public Service Company of New Hampshire Enclosure: Affidavit of David R. McHale, with Exhibits 1 and 2 AFFIDAVIT OF DAVID R. MCHALE I, David R. McHale, being first duly sworn, do hereby state as follows: 1. I am Manager of Project and Short Term Finance of Northeast Utilities Service Company ("NUSCO"), which provides treasury and other financial services to Public Service Company of New Hampshire ("PSNH") pursuant to the terms and conditions of the Service Agreement between PSNH and NUSCO. 2. On July 20, 1990, in Docket No. DR 89-244, the New Hampshire Public Utilities Commission issued Report and Order No. 19,889 (the "Order"), which, among other things, approved the reorganization of PSNH and PSNH's acquisition by Northeast Utilities. One approval of the Commission contained in this Order approved the borrowing of up to $200 million from time to time by PSNH from a group of banks under a revolving credit facility, in accordance with a Revolving Credit Agreement in substantially the form submitted to the Commission. Order at p. 187-188. In connection with its reorganization, PSNH entered into a Revolving Credit Agreement dated as May 1, 1991 among PSNH, the banks named therein (the "Banks") and Bankers Trust Company, Chemical Bank and Citibank, N.A., as co-agents, and Chemical Bank, as administrative agent (the "Revolving Credit Agreement"). The Revolving Credit Agreement expires in accordance with its terms on May 14, 1994. PSNH proposes to extend the Revolving Credit Agreement to May 14, 1996. 3. Under the current terms of the Revolving Credit Agreement, PSNH has commitments from the participating banks (the "Banks") for an aggregate of $125 million. Pursuant the terms and conditions of the Revolving Credit Agreement, the credit line was reduced from $200 million to $125 million on the merger date, June 5, 1992. PSNH's obligations under the Revolving Credit Agreement are secured by a second mortgage on certain of PSNH's assets. 4. PSNH pays quarterly to each participating bank facility fee (the "Facility Fee") equal to 25 basis points per annum of that Bank's commitment, and it pays an agency fee to each of the co-agents and the administrative agent as agreed to from time to time. In connection with the proposed extension of the Revolving Credit Agreement, the facility fee may be increased from the current fee of 25 basis points per annum ($312,500) to higher amount to be negotiated, but not exceeding a maximum of 37.5 basis points per annum ($468,750), or an increase of no more than $156,250 per year. 5. The interest rate terms of the Revolving Credit Agreement remain unchanged. Interest on borrowings under the Revolving Credit Agreement accrues on one or more of four bases at PSNH's option. The first is a "Eurodollar Rate" equal to the average of the co-agents' London Interbank Offered Rates plus a margin of 50 basis points. Borrowings under the Eurodollar Rate option can have maturities of one, two, three or six months. The second interest rate option is a "CD Rate" equal to the average of the co-agents' certificate of deposit rates plus a margin of 87.5 basis points. Borrowings under the CD Rate option can have maturities of thirty, sixty, ninety or 180 days. The third option is an "Alternate Base Rate" equal to the greater of Chemical Bank's prime lending rate or the Federal Funds Rate in effect plus a margin of 50 basis points. Borrowings under the Alternate Base Rate option can be repaid at any time prior to the termination of the Revolving Credit Agreement. The final interest rate option is a rate bid by some or all of the participating banks in a competitive bid procedure. -2- Borrowings under the competitive bid option can have any maturity up to 270 days. 6. The margins on the Eurodollar Rate, CD Rate and Alternative Base Rate borrowings increase by 25 basis points if either Standard & Poor's Corporation or Moody's Investor Service, Inc. fails to give PSNH's first mortgage bonds an investment grade rating and by 37.5 basis points if the advance on which that interest is accruing would be considered a "Highly Leveraged Transaction" under applicable banking regulations. Thus, so long as PSNH's first mortgage bonds are rated BB+ by Standard & Poor's Corporation, the applicable interest rate would include an additional margin of 25 basis points. 7. Financial covenants similar to those included in the Revolving Credit Agreement for prior periods, and identical to those included in the Term Credit Agreement dated as May 1, 1991 among PSNH, the banks named therein (the "Banks") and Bankers Trust Company, Chemical Bank and Citibank, N.A., as co-agents, and Citibank, N.A., as administrative agent (the "Term Credit Agreement") are proposed to be added to the Revolving Credit Agreement and applicable to the extension period. PSNH will be required to maintain a ratio of operating income to interest expense on a rolling four quarters basis, measured at the end of each quarter, of 1.50 to 1 through September 30, 1994, and of 1.75 to 1 from December 31, 1994 through May 14, 1996. PSNH will be required to maintain a common equity to total capitalization ratio of 0.21 to 1 through June 30, 1994; a common equity to total capitalization ratio of 0.23 to 1 from July 1, 1994 through June 30, 1995; and a common equity to total capitalization ratio of 0.25 to 1 from July 1, 1995 through May 14, 1996. See, Section 7.01(j) of the Revolving Credit Agreement, attached hereto as Exhibit 1, and Section 7.01(j) of the Term Credit Agreement, attached hereto as Exhibit 2. 8. In consideration of the proposed extension, the Banks will charge PSNH an extension fee to be negotiated of not more than 15 basis points of their respective commitments under the Revolving Credit Agreement, or a maximum of $187,500. 9. The final amendment to the Revolving Credit Agreement incorporating the amendments and additions described herein will be filed with the Commission when executed. 10.As noted above, the Revolving Credit Agreement currently expires on May 14, 1994. PSNH has discussed with various potential lenders the terms on which it could replace the Revolving Credit Agreement with another revolving credit facility. As PSNH discussed with the Banks and other potential lenders the various options available to replace the Revolving Credit Agreement, it became apparent that the terms of the Revolving Credit Agreement are as favorable to PSNH as any terms PSNH could expect to receive for a new facility. Accordingly, PSNH requested that the Banks extend the term of the present Revolving Credit Agreement for two more years, to May 14, 1996. The proposed extension will result in the matching of the expiration date of the Revolving Credit Agreement and PSNH's Term Credit Agreement dated as of May 1, 1991 with the same group of Banks (the "Term Credit Agreement"). It will also result in significant transaction cost savings because PSNH will not need to negotiate and draft entirely new agreements. -3- 11.The proposed extension is consistent with the public good because the extension will provide PSNH with continued access to a revolving credit facility during the period from May 14, 1994 to May 14, 1996 at favorable interest rates, without requiring PSNH to make any substantially new or more restrictive business covenants than those that currently exist under agreements already reviewed and approve by the Commission in DR 89- 244. The proposed extension is also consistent with the public good because it will enable PSNH to avoid the legal and bank fees and other transaction costs associated with negotiating and drafting an entirely new agreement. Dated:______________ _________________________________ David R. McHale State of Connecticut County of Hartford The foregoing instrument was acknowledged before me this _____ day of March, 1994 by David R. McHale. ________________________________ Notary Public My Commission Expires:__________ Exhibit 1 EXECUTION COPY U.S. $200,000,000 REVOLVING CREDIT AGREEMENT Dated as of May 1, 1991 Among PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE as Borrower THE BANKS NAMED HEREIN as Banks BANKERS TRUST COMPANY CHEMICAL BANK CITIBANK, N.A. as Co-Agents CHEMICAL BANK as Administrative Agent (g)Keeping of Books. Keep proper records and books of account, in which full and correct entries shall be made of all financial transactions of the Borrower and the assets and business of the Borrower, in accordance with good accounting practices consistently applied. (h)Performance of Related Agreements. (i) From and after the effective date of the Rate Agreement, the Merger Agreement and each Significant Contract, (A) perform and observe all material terms and provisions of such agreements to be performed or observed by the Borrower and (B) take all reasonable steps to enforce such agreements substantially in accordance with their terms and to preserve the rights of the Borrower thereunder; provided, that the foregoing provisions of this Section 7.01(h) shall not preclude the Borrower from any waiver, amendment, modification, consent or termination permitted under Section 7.02(h) hereof. (ii) Upon any termination of the Merger Agreement, cause NUSCO to continue its obligations under the Management Services Agreement pursuant to Section 7(b)(i) thereof until the earlier of (A) 45 days after written notice from the Borrower to the Administrative Agent of the Borrower's intention to terminate such arrangement or (B) expiration of the six-month period specified in said Section 7(b)(i). (i)Collection of Accounts Receivable. Promptly bill, and diligently pursue collection of, in accordance with customary utility practices, all accounts receivable owing to the Borrower and all other amounts that may from time to time be owing to the Borrower for services rendered or goods sold. (j)Maintenance of Financial Covenants. (i) Operating Income to Interest Expense. Maintain, for each period of four consecutive fiscal quarters ending on the dates set forth below, a ratio of Operating Income to Interest Expense not less than the respective ratio specified below: Period of Four Fiscal Quarters Ending on the Following Dates: Ratio June 30, 1992 1.30:1 September 30, 1992 1.30:1 December 31, 1992 1.40:1 March 31, 1993 1.40:1 June 30, 1993 1.40:1 September 30, 1993 1.40:1 December 31, 1993 1.50:1 March 31, 1994 1.50:1 Termination Date 1.50:1 (ii) Common Equity to Total Capitalization. Maintain at all times a ratio of Common Equity to -2- Total Capitalization of not less than the respective ratio specified below: Prior to the Merger Effective Date: Period Ratio Funding Date through and 0.26:1 including December 31, 1991 January 1, 1992 through and 0.28:1 including September 30, 1993 October 1, 1993 through and 0.30:1 including the Termination Date On and After the Merger Effective Date: Period Ratio Funding Date through and 0.20:1 including June 30, 1993 July 1, 1993 through and 0.21:1 including the Termination Date Exhibit 2 EXECUTION COPY U.S. $452,000,000 REVOLVING CREDIT AGREEMENT Dated as of May 1, 1991 Among PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE as Borrower THE BANKS NAMED HEREIN as Banks BANKERS TRUST COMPANY CHEMICAL BANK CITIBANK, N.A. as Co-Agents CHEMICAL BANK as Administrative Agent (g)Keeping of Books. Keep proper records and books of account, in which full and correct entries shall be made of all financial transactions of the Borrower and the assets and business of the Borrower, in accordance with good accounting practices consistently applied. (h)Performance of Related Agreements. (i) From and after the effective date of the Rate Agreement, the Merger Agreement and each Significant Contract, (A) perform and observe all material terms and provisions of such agreements to be performed or observed by the Borrower and (B) take all reasonable steps to enforce such agreements substantially in accordance with their terms and to preserve the rights of the Borrower thereunder; provided, that the foregoing provisions of this Section 7.01(h) shall not preclude the Borrower from any waiver, amendment, modification, consent or termination permitted under Section 7.02(h) hereof. (ii) Upon any termination of the Merger Agreement, cause NUSCO to continue its obligations sunder the Management Services Agreement pursuant to Section 7(b)(i) thereof until the earlier of (A) 45 days after written notice from the Borrower to the Administrative Agent of the Borrower's intention to terminate such arrangement or (B) expiration of the six-month period specified din said Section 7(b)(i). (i)Collection of Accounts Receivable. Promptly bill, and diligently pursue collection of, in accordance with customary utility practices, all accounts receivable owing to the Borrower and all other amounts that may from time to time be owing to the Borrower for services rendered or goods sold. (j)Maintenance of Financial Covenants. (i) Operating Income to Interest Expense. Maintain, for each period of four consecutive fiscal quarters ending on the dates set forth below, a ratio of Operating Income to Interest Expense not less than the respective ratio specified below: Period of Four Fiscal Quarters Ending on the Following Dates: Ratio June 30, 1992 1.30:1 September 30, 1992 1.30:1 December 31, 1992 1.40:1 March 31, 1993 1.40:1 June 30, 1993 1.40:1 September 30, 1993 1.40:1 December 31, 1993 1.50:1 March 31, 1994 1.50:1 June 30, 1994 1.50:1 September 30, 1994 1.50:1 December 31, 1994 1.75:1 March 31, 1995 1.75:1 June 30, 1995 1.75:1 September 30, 1995 1.75:1 -2- December 31, 1995 1.75:1 Termination Date 1.75:1 (ii) Common Equity to Total Capitalization. Maintain at all times a ratio of Common Equity to Total Capitalization of not less than the respective ratio specified below: Prior to the Merger Effective Date: Period Ratio Funding Date through and 0.26:1 including December 31, 1991 January 1, 1992 through and 0.28:1 including September 30, 1993 October 1, 1993 through and 0.30:1 including September 30, 1994 October 1, 1994 through and 0.33:1 including September 30, 1995 October 1, 1995 through and 0.35:1 including the Termination Date On and After the Merger Effective Date: Period Ratio Funding Date through and 0.20:1 including June 30, 1993 July 1, 1993 through and 0.21:1 including June 30, 1994 July 1, 1994 through and 0.23:1 including June 30, 1995 July 1, 1995 through and 0.25:1 including the Termination Date (k)Maintenance of Properties, Etc. (i) As to properties of the type described in Section 6.01(i), maintain title of the quality described therein; and (ii) preserve, maintain, develop, and operate in substantial conformity with all laws, material contractual obligations and prudent practices prevailing in the industry, all of its properties which are used or useful in the conduct of its business in good working order and condition, ordinary wear and tear excepted, except to the extent such non-conformity would not materially adversely affect the financial condition, properties, prospects or operations of the Borrower as a whole. (l)Governmental Approvals. Duly obtain on or prior to such date as the same may become legally required, and thereafter maintain in effect at -3- all times, all Governmental Approvals on its part to be obtained, except those the absence of which would not materially adversely affect the financial condition, properties, prospects or operations of the Borrower as a whole. (m)Further Assurances. Promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary or that any Lender through the Administrative Agent may reasonably request in order to fully give effect to the interests and properties purported to be covered by the Security Documents. EX-99 5 EXHIBIT D.2 Exhibit D.2 DF 94-039 PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE Order Nisi Granting Authorization for Public Service Company of New Hampshire for an Extension of Revolving Credit Agreement ORDER NO. 21,180 On March 8, 1994 Public Service Company of New Hampshire (Company filed with the New Hampshire Public Utilities Commission (Commission) a petition under RSA 369:1, RSA 369:2 and RSA 369:4 for the extension of it's Revolving Credit Agreement; and WHEREAS, the Commission in Order No. 19,889 dated July 20, 1990 approved the Revolving Credit Agreement until May 14, 1994; and WHEREAS, the Company has proposed to extend the Credit Agreement until May 14, 1996 under substantially the same terms and conditions as in the original agreement; and WHEREAS, the Company proposes to maintain the Revolving Credit Agreement at it present level of One Hundred and Twenty Five Million Dollars ($125,000,000); and WHEREAS, the extension requires an extension fee of no more than 15 basis points per annum or an increase of not more than $187,500; and WHEREAS, the facility fee may be increased from 25 basis points to 37.5 basis points per annum or an increase of not more than $156,250; and WHEREAS, the interest rate opinions will remain the same unless the Company's First Mortgage Bonds are not down-graded from a rating of BB+ by Standard & Poor's Corporation, the applicable interest rate would include an additional margin of 25 basis points; and WHEREAS, the extension of the Revolving Credit Agreement will require the company to maintain certain expense and capitalization ratios which are comparable to the existing ratios that the company is presently required to maintain; and WHEREAS, the Company states that a renegotiation the revolver would increase the cost more than the extension fee due to increase legal and other costs; and WHEREAS, the Commission finds that the proposed extension of the Revolving Credit Facility under substantially the same term and conditions is in the public good; and WHEREAS, the public should be offered the opportunity to respond in support of, or in opposition to said petition; it is hereby ORDERED, that all persons interested in responding to this petition be notified that they may submit their comments or file a written request for a hearing on this matter before the Commission no later than April 29, 1994; and it is FURTHER ORDERED, that the Petitioner effect said notification by causing an attested copy of this order to be published no later than April 14, 1994, once in a newspaper having general circulation in the area where the service is provided and documenting compliance with this notice provisions by affidavit to be filed with the Commission on or before April 29, 1994; and it is. FURTHER ORDERED NISI, that the extension of the Revolving Credit Agreement be, and hereby is granted, pursuant to RSA 369:1 RSA 369:2 and RSA 369:4, effective April 29, 1994 unless the Commission otherwise directs prior to the proposed effective date. By order of the New Hampshire Public Utilities Commission this fourth day of April, 1994. __________________ _________________ ___________________ Douglas L. Patch Bruce B. Ellworth Susan S. Geiger Chairman Commissioner Commissioner Attested By: ___________________________ Debra A. Howard Assistant Secretary EX-99 6 EXHIBIT D.3 EXHIBIT D.3 TO THE DEPARTMENT OF PUBLIC UTILITY CONTROL OF THE STATE OF CONNECTICUT APPLICATION OF PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE FOR A WAIVER OF THE REQUIREMENTS OF C.G.S. SECTION 16-43 WITH RESPECT TO AMENDMENT AND EXTENSION OF REVOLVING CREDIT FACILITY I. INTRODUCTION 1. Public Service Company of New Hampshire ("PSNH"), a "foreign electric company" within the meaning of Section 16-246a of the Connecticut General Statutes, hereby applies to the Connecticut Department of Public Utility Control (the "Department") for an order pursuant to Section 16- 246c(c) of the General Statutes waiving the requirements of Section 16-43 with respect to the amendment and extension of the term of the Revolving Credit Agreement dated as of May 1, 1991 among PSNH, the banks named therein (the "Banks"), Bankers Trust Company, Chemical Bank and Citibank, N.A., as Co-Agents, and Chemical Bank, as Administrative Agent (the "Revolving Credit Agreement"). 2. PSNH is domiciled in and organized under the laws of the State of New Hampshire and is authorized under such laws to generate, transmit, distribute and sell electricity in that state. PSNH currently owns an undivided 2.8475 percent interest as a tenant-in-common in Millstone Unit No. 3, a nuclear generating unit in the Town of Waterford, Connecticut, but it is not engaged in the business of supplying retail electric service in Connecticut. As a result of its ownership interest in Millstone Unit No. 3, pursuant to the provisions of Section 16-246a and 16-246c(c) of the Connecticut General Statutes, PSNH constitutes a "public service company" in the State of Connecticut and is subject to certain jurisdiction of the Department under Title 16 of the Connecticut General Statutes. 3. On July 31, 1990, PSNH submitted an application to the Department requesting, among other things, that the Department waive the requirements of Section 16-43 with respect to the issuance of certain securities and certain bank financings as part of the first step ("Step One") of Northeast Utilities' proposed acquisition of PSNH. As part of its July 31, 1990 application, PSNH described the revolving credit facility which ultimately became documents in the Revolving Credit Agreement. 4. On August 29, 1990, the Department issued its Decision pursuant to Section 16-246c(c) of the Connecticut General Statutes waiving the requirements of Section 16-43 with respect to the Step One transactions subject to the condition that the securities and other transactions conform to the Third Amended Joint Plan of Reorganization for PSNH (the "Plan") and with the Order dated July 20, 1990 by the New Hampshire Public Utilities Commission ("NHPUC") and any supplemental order thereto. II. DESCRIPTION OF THE PROPOSED AMENDMENT AND EXTENSION OF THE REVOLVING CREDIT AGREEMENT 5. Pursuant to the Plan and as part of the Step One financing, PSNH entered into the Revolving Credit Agreement with the Banks. Under the Revolving Credit Agreement, PSNH has commitments from the Banks for an aggregate of $125 million in short-term borrowings. PSNH's obligations under the Revolving Credit Agreement are secured by a second mortgage on certain of PSNH's assets. PSNH pays quarterly to each participating bank a facility fee (the "Facility Fee") equal to 25 basis points per annum of that The amount of the commitments was reduced from $200 million to $125 million at the time of Northeast Utilities' acquisition of PSNH. Bank's commitment, and it pays an agency fee to each of the co-agents and the administrative agent as agreed to from time to time. The Revolving Credit Agreement currently expires on May 14, 1994. As PSNH explored various options available to replace the facility under the Revolving Credit Agreement, it became apparent that the terms of the Revolving Credit Agreement are as favorable to PSNH as any terms PSNH could expect to receive the term of the present Revolving Credit Agreement for two more years, to May 14, 1996. This extension will result in the matching of the expiration date of the Revolving Credit Agreement with the May 14, 1996 expiration date of PSNH's Term Credit Agreement dated as of May 1, 1991 with the same group of Banks (the "Term Credit Agreement"). It will also result in significant transaction cost savings because PSNH will not need to negotiate and draft entirely new documents. 6. In addition to an extension of the expiration date to May 14, 1996, the operating income to expense ratio and common equity to total capitalization ratio requirements included in the Revolving Credit Agreement will be extended for the period May 14, 1994 through May 14, 1996, and will confirm to the corresponding requirements in the Term Credit Agreement. In addition, the Facility Fee charged to PSNH may be increased from 25 basis points per annum ($312,500 in the aggregate) to a higher amount that has no yet been negotiated, but will not exceed a maximum of 37.5 basis points per annum ($468,750 in the aggregate). In consideration of the extension, the Banks will charge PSNH an extension fee that has not yet been negotiated but will not exceed 15 basis points of their respective commitments under the Revolving Credit Agreement, or up to $187,500 in the aggregate. III. REQUEST FOR WAIVER OF SECTION 16-43 WITH RESPECT TO THE AMENDMENT AND EXTENSION OF THE REVOLVING CREDIT AGREEMENT 7. Section 16-246c(c) of the Connecticut General Statutes provides that the Department may waive the requirements of Section 16-43 with respect to the proposed amendment and extension of the Revolving Credit Agreement upon a determination that authority over the amendment and extension has been exercised by the State of New Hampshire. PSNH has applied to the NHPUC for approval of the amendment and extension of the Revolving Credit Agreement and will provide the Department with a copy of the NHPUC's approval as soon as it is available. PSNH respectfully requests that after receipt thereof, the Department issue an order pursuant to Section 16-246c(c) waiving the requirements of Section 16-43 with respect to the amendment and extension of the Revolving Credit Agreement. IV. CORRESPONDENCE 8. PSNH requests that correspondence with respect to this Application be sent to the following persons: John B. Keane, Vice President and Treasurer Northeast Utilities Service Company Selden Street Berlin, Connecticut 06037 Telephone: 665-3541 and Richard C. MacKenzie, Esq. Day, Berry & Howard CityPlace Hartford, Connecticut 06103-3499 Telephone: 275-0204 Dated this ____ day of ______, 1994. Respectfully submitted, PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE By: Richard C. MacKenzie For Day, Berry & Howard CityPlace Hartford, CT 06103-3499 Its Attorneys EX-99 7 EXHIBIT D.4 EXHIBIT D.4 STATE OF CONNECTICUT DEPARTMENT OF PUBLIC UTILITY CONTROL ONE CENTRAL PARK PLAZA NEW BRITAIN, CT 06051 DOCKET NO. 94-03-21 APPLICATION OF PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE FOR WAIVER OF THE REQUIREMENTS OF CGS SECTION 16-43 WITH RESPECT TO AMENDMENT AND EXTENSION OF REVOLVING CREDIT FACILITY April 27, 1994 By the following Commissioners Evan W. Woollacott Thomas M. Benedict Reginald J. Smith DRAFT DECISION I. INTRODUCTION On August 29, 1990, the Department of Public Utility Control (Department) issued a Decision in Docket No. 90-07-24 which waived the requirements of *16-43 of the General Statutes of Connecticut (Conn. Gen. Stat.) with respect to the issue of securities associated with the reorganization and financial restructuring of Public Service Company of New Hampshire (PSNH), an electric utility incorporated under the laws of the State of New Hampshire and a foreign electric company within the meaning of Conn. Gen. Stat. *16-246c(c), in connection with the first step of the acquisition of PSNH by Northeast Utilities. This waiver was subject to the condition that the securities conform with the Order dated July 20, 1990, by the New Hampshire Public Utilities Commission (NHPUC) and any Supplemental Order thereto. As part of the application in Docket No. 92-07-24, PSNH described the revolving credit facility which ultimately became documented in the Revolving Credit Agreement dated as of May 1, 1991 (Revolving Credit Agreement). On September 9, 1992, the Department issued a Decision in the same docket, pursuant to Conn. Gen. Stat. *16-246c(c), which waived the approval requirements of Conn. Gen. Stat. *16-43 with respect to the substitution of the letter of credit as proposed by PSNH. By application filed with the Department on March 9, 1994, in the instant docket, PSNH requested this Department's waiver, pursuant to Conn. Gen. Stat. *16-246c(c), of the approval requirements of Conn. Gen. Stat. *16- 43 with respect to the amendment and extension of the term of the Revolving Credit Agreement. There was no statutory requirement for a hearing and none was held. II. APPLICANT'S EVIDENCE PSNH is proposing to amend and extend the term of the Revolving Credit Agreement until May 14, 1996. PSNH owns a 2.8475% undivided interest as tenant-in-common in Millstone Unit No. 3. Therefore, pursuant to the provisions of Conn. Gen. Stat. *16-246c(c), PSNH constitutes a foreign electric company and is subject to the approval requirements of Conn. Gen. Stat. *16-43 with respect to the proposed amendment. PSNH requests that the Department waive the requirements of Conn. Gen. Stat. *16-43, pursuant to Conn. Gen. Stat. *16-246c(c), which allows the Department to grant such waiver upon its determination that the authority over such amendment has been exercised by the state of domicile of such foreign electric company. PSNH provided a copy of the Order from the NHPUC, dated April 4, 1994, approving the amendment and extension of the Revolving Credit Agreement. III. CONCLUSION Pursuant to Conn. Gen. Stat. *16-246c(c), the Department hereby waives the requirements of Conn. Gen. Stat. *16-43 with respect to the amendment and extension of the term of the Revolving Credit Agreement. EX-99 8 EXHIBIT F Exhibit F OPINION OF DAY, BERRY & HOWARD, COUNSEL FOR PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE May 2, 1994 Securities and Exchange Commission 450 Fifth Street Judiciary Plaza Washington, D.C. 20549 Re: Public Service Company of New Hampshire File No. 70-8367 Ladies and Gentlemen: We have acted as counsel to Public Service Company of New Hampshire in connection with those transactions contemplated by the above-referenced declaration, as amended (the "Declaration"). This opinion is given to you with respect to such transactions pursuant to your Instructions as to Exhibits to applications and declarations filed on Form U-1. Except as otherwise defined herein, terms used herein shall have the meanings given them in the Declaration. We have examined such documents, corporate records and other instruments as we have deemed necessary or advisable for the purposes of this opinion. We have assumed the authenticity of all documents submitted to us as originals, the genuineness of all signatures, the legal capacity of natural persons and the conformity to originals of documents submitted to us a copies. The opinions set forth herein are qualified in their entirety as follows: (a) every opinion rendered herein is expressly subject to the consummation of such transactions in accordance with the Declaration; (b) no opinion is expressed as to any laws other than the federal laws of the United States and the laws of the States of Connecticut, New Hampshire, Vermont and Maine; (c) as to all matters of New Hampshire law, we have relied solely upon the most recent draft of the opinion of Pierre O. Caron, Assistant General Counsel for PSNH, as to all matters of Vermont law, we have relied solely upon the most recent draft of the opinion of Zuccaro, Willis & Bent, and as to all matters of Maine law, we have relied upon the most recent draft of the opinion of Drummond, Woodsum, Plimpton & MacMahon, and we express no opinion as to such matters except to the extent covered by such opinions and subject to the qualifications and assumptions contained in such opinions; (d) the opinion expressed in paragraph 4 is based solely upon the opinion of Pierre O. Caron, Assistant General Counsel for PSNH, and we express no opinion as to such matters except to the extent covered by such opinion and subject to the qualifications and assumptions contained in such opinion; and (e) insofar as any opinion relates to the Certificate of Incorporation or Bylaws of PSNH, we have assumed that that Certificate and those Bylaws will not be amended between now and the time the transactions contemplated by the Declaration are consummated. Based on and subject to the foregoing, we are of the opinion that: 1. All state laws applicable to the consummation of the transactions contemplated by the Declaration will have been complied with at the time those transactions are consummated. 2. PSNH is validly incorporated and duly existing. 3. The proposed amendment to the Revolving Credit Agreement described in the Declaration will be the valid and binding obligation of PSNH in accordance with the terms thereof. 4. The consummation of the transactions contemplated by the Declaration will not violate the legal rights of the holders of any securities issued by PSNH or any associate company thereof. This opinion may be relied on by the Commission in connection with the preparation of its decision in this matter. Very truly yours, /s/ Day, Berry & Howard RCM:PNB EX-27 9 EXHIBIT J WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE. EXHIBIT J PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE CALCULATION OF COMMON EQUITY PERCENTAGE AS DEFINED IN REVOLVING CREDIT AGREEMENT (THOUSANDS OF DOLLARS)
ACTUAL FORECAST FORECAST 12/31/93 6/30/94 13/31/94 CAPITALIZATION AND LIABILITIES CAPITALIZATION COMMON SHARES $1 $1 $1 CAPITAL SURPLUS, PAID IN 421,245 421,245 421,245 RETAINED EARNINGS 60,840 71,488 94,357 _______ _______ _______ TOTAL COMMON STOCKHOLDER EQUITY 482,086 492,734 515,603 PREFERRED STOCK SUBJECT TO MANDATORY REDEMPTION 125,000 125,000 125,000 LONG TERM DEBT 999,985 952,985 905,985 LONG-TERM DEBT CURRENT PORTION 94,000 94,000 94,000 SHORT-TERM DEBT 2,500 0 0 _______ _______ _______ TOTAL CAPITALIZATION 1,703,571 1,664,719 1,640,588 COMMON EQUITY TO TOTAL CAPITALIZATION 28.3% 29.6% 31.4% PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE CALCULATION OF COMMON EQUITY PERCENTAGE AS TRADITIONALLY DEFINED BY NORTHEAST UTILITIES (THOUSANDS OF DOLLARS) CAPITALIZATION AND LIABILITIES CAPITALIZATION COMMON SHARES $1 $1 $1 CAPITAL SURPLUS, PAID IN 421,245 421,245 421,245 RETAINED EARNINGS 60,840 71,488 94,357 _______ _______ _______ TOTAL COMMON STOCKHOLDER EQUITY 482,086 492,734 515,603 PREFERRED STOCK SUBJECT TO MANDATORY REDEMPTION 125,000 125,000 125,000 LONG TERM DEBT 999,985 952,985 905,985 LONG-TERM DEBT CURRENT PORTION 94,000 94,000 94,000 OPERATING LEASES, NET 4,359 4,363 4,363 _______ _______ _______ TOTAL CAPITALIZATION 1,705,430 1,669,082 1,644,951 COMMON EQUITY TO TOTAL CAPITALIZATION 28.3% 29.5% 31.3%
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